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Directors Report of Alicon Castalloy Ltd.

Mar 31, 2015

The Directors have pleasure in presenting their Twenty fifth Annual Report together with the audited Statements of Accounts for the year ended 31st March, 2015.

Financial Highlights

(Rs, in Millions)

Standalone Consolidated

2014-15 2013-14 2014-15 2013-14

Gross Sales 7250.51 4988.09 7996.33 5902.69

Net Sales/Income from Operations 6389.78 4410.46 7135.60 5325.06

Profit before Depreciation, Interest & tax 696.99 498.12 731.72 574.39

Other Income 20.66 30.49 22.25 40.82

Less: Depreciation & Prior Period adjustments 228.25 175.69 261.40 211.26

Less: Finance Costs 171.53 102.18 180.23 111.66

Profit before Tax 297.22 220.25 290.09 251.70

Provision for Tax 89.96 58.93 91.69 60.13

Profit after Tax 207.26 161.32 198.40 191.57

Dividend:

Enthused with the improved working of the Company, your Directors are pleased to recommend a higher dividend of 60% (Rs, 3/- per share of Rs, 5/- each) as against 50% paid for the previous year. The total payout on account of dividend including tax thereon will be Rs, 39.56 million. Dividend if declared, will be free of tax in the hands of the shareholders.

Performance

On standalone basis, the Company recorded the total income of Rs, 6,389.78 million as against Rs, 4410.46 million in the previous year, showing a jump of 44.9%. Pre-tax profit was also correspondingly higher by 34.95% compared to the last year. The Company earned a pre-tax profit of Rs, 297.22 millions as against Rs, 220.25 millions a year ago.

On consolidated basis, the Company recorded the total income of Rs, 7157.86 million as against Rs, 5365.79 million in the previous year, an increase of 33.4%. However, the pre-tax profit is Rs, 291.21 million as against Rs, 290.09 million a year ago.

Transfer to General Reserve

The Company has transferred Rs, 25 million to the general reserve during the current financial year.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to be best of their knowledge, confirm that -

a) in the preparation of the accounts the applicable accounting standards have been followed along with proper explanations relating to material departure;

b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Management Discussion and Analysis

A detailed report on the Management Discussion and Analysis is provided as a separate section in the Annual Report which forms part of the Directors' Report.

Update on the Scheme of Arrangement

The Hon'ble High Court of Bombay on 23rd October, 2015 had approved the scheme of arrangement under which the Casting Unit of Atlas Castalloy Ltd. is transferred and merged with the Company. The appointed date of the Scheme was April 1, 2014 and subsequent to filing of the necessary forms, the Scheme has become effective from 29th November, 2015.

Consequent upon the Scheme becoming effective, the Company will allot 12,56,222 Equity Shares of Rs, 5/- each to the shareholders of the Atlas Castalloy Ltd. The Scheme has enabled the Company to augment its capacity by 6,000 MTPA with an additional revenue ofRs, 1341 million for the financial year 2014-15 without any outflow of cash. Acquisition of unit will also enable the Company to achieve economies of scale with additional production capacity, optimal utilization of resources and reduction in cost. This will also give access to your Company to expand its large customer base with additional clients like Greaves Cotton Ltd., Royal Enfield Ltd., Piaggio and defence, which are the existing customers of Atlas Castalloy Ltd.

Loans, Guarantees and Investments

The full particulars of guarantee given, investment made or loan given or security provided as per the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements (refer to note no.8(b))

Transactions with Related Parties

All the related party transactions including in relation to direct/indirect subsidiaries are strictly done on an arm's length basis and in ordinary course of business. The Company presents details of all related party transactions before the Audit Committee. The policy on Related Party Transactions as approved by the Board of Directors is placed on the Company's website.

Since all the transactions with related parties entered into by the Company were in ordinary course of business and were on arm's length basis, Form AOC-2 is not applicable to the Company.

Subsidiary Companies:

Your Company has three foreign subsidiaries viz. Alicon Holding GmbH, lllichmann Castalloy S.R.O. and lllichmann Castalloy GmbH. Alicon Holding GmbH is the 100% subsidiary of your Company who in turn is holding 100% capital of lllichmann Castalloy S.R.O. lllichmann Castalloy GmbH is the 100% subsidiary of lllichmann Castalloy S.R.O.

A separate section on the performance and financial position of each of the subsidiaries in Form AOC-1 is part of this report and is annexed as Annexure I.

Consolidated Financial Statements

In accordance with the Accounting Standards 21, 23 and 27 issued by the Institute of Chartered Accountants of India, consolidated financial accounts prepared on the basis of financial statements of the subsidiary companies forms part of this report and accounts.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website www.alicongroup.co.in. The Company will make available the audited annual accounts and related information of its subsidiaries upon request by any of its shareholders.

Material Changes and Commitment

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

Public Deposits

Your Company has not accepted any deposit from the public, its shareholders or employees during the year under review.

Conservation of Energy etc.

Information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure II.

Risk Management

The Company has Risk Management Committee. This committee is responsible for reviewing the risk management plan and its effectiveness. The audit committee also reviews the financial risk and its control. The management also continuously access the risk involved in the business and all out efforts are made to mitigate the risk with appropriate action. All the assets of the Company are adequately covered by comprehensive insurance.

A detailed note on risk management is given under financial review section of the Management Discussion and Analysis of this Annual Report.

Corporate Social Responsibility (CSR)

Brief outline on the Corporate Social Responsibility (CSR) Policy of the Company and the initiative undertaken by the Company on CSR activities during the year are set out in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 and is annexed as Annexure III to this report. The said CSR Policy is hosted on the Company's website.

Corporate Governance

In line with the requirement of the Companies Act,2013 as also amended Clause 49 of the Listing Agreement, the Board of Directors has constituted new committees. Details of these committees along with their terms of reference, composition and meetings held during the year, are provided in the Corporate Governance Report. During the year the Company has also amended the existing policies and adopted new policies such as CSR policies, Related Party Transaction Policies, Whistle Blower Policies.

A separate report on Corporate Governance is annexed, which forms part of this report. A certificate of CEO and CFO of the Company confirming the correctness of the financial and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed and forms part this Directors' Report.

Directors and Key Managerial Personnel

The Board of Directors in its meeting held on 30th April 2015 had appointed Mr. Ajay Nanavati as an Additional Director (Independent). Pursuant to the provisions of Section 161 of the Act, Mr. Nanavati would be vacating the office as Director in the forthcoming Annual General Meeting. The Company has received a notice under Section 160 of the Act along with refundable deposit of Rs, 1,00,000/- proposing the appointment of Mr. Ajay Nanavati as an Independent Director.

The proposed appointment of Mr. Ajay Nanavati was recommended by the Nomination & Remuneration Committee. The Board of Directors of the Company had formed the opinion that the said Director meets with the criteria of Independence as per Section 149(6) of the Act and rules made there under and requirements of Clause 49 of the listing agreement with the stock exchanges.

Mrs. Pamela Rai shall retire by rotation at the forthcoming Annual General Meeting and being eligible has offered herself for re-appointment.

Additional information and brief profile as required under Clause 49 of the Listing Agreement for each of the above Directors seeking appointment and/or re-appointment is provided in the Corporate Governance Report, which forms part of the Annual Report. Further, the business items relating to the re-appointment of the above Directors have been included in the Notice of the AGM.

During the year under review, none of the non-executive directors had any pecuniary relationship or transactions with the Company.

Pursuant to the provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the listing agreement Mr. S. Rai is Managing Director, Mr. R. Sikand is Group Chief Executive Officer, Mr. Vimal Gupta is the Group Chief Finance Officer and Mr. R S. Rao is the Company Secretary.

Declaration of Independence

All the independent directors have submitted declarations as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as stipulated in Section 149(6) of the Act.

Nomination & Remuneration Policy

The Nomination and Remuneration Policy recommended by the Nomination & Remuneration Committee is duly approved and adopted by the Board of Directors. The said policy is annexed to the report as Annexure IV

Number of Meeting of The Board

Six meetings of the Board were held during the year under review. Corporate Governance Report, which forms part of this report, contains the details about the Board meeting as also meeting attended by each Directors of the Company.

Board Evaluation

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board of Directors had done the annual evaluation of its own performance, its committees and individual directors. The Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of criteria such as the contribution of the individual director to the Board and committee meetings.

In a separate meeting of independent directors, performance of non- independent directors, performance of the Board as a whole was evaluated, taking into account the views of executive directors and non- executive directors.

Policy on appointment of directors and remuneration as provided in Section 178(3) of the Companies Act, 2013 has been dealt with in the corporate governance report, which forms part of the Directors' Report.

Audit Committee

The Company has in place an Audit Committee in terms of the requirements of the Companies Act,2013 read with the rules made there under and Clause 49 of the Listing Agreement. The details pertaining to the audit committee are included in the Corporate Governance Report, which forms part of this report.

Internal Control System

Adequate internal control systems are in place to maintain quality of product, proper accounting as per norms and standards prescribed, asset maintenance and its proper use. The Company has an independent internal auditor, who periodically reviews the accounts and reports to the Audit Committee.

Employees

The relations between the management and employees remained cordial throughout the year. Information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are appended to this report as Annexure V and forms part of this report.

The details of employees receiving remuneration exceeding Rs, 5 lakhs per month or Rs, 60 lakhs per annum as required under the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure. In terms of Section 136(1) of the Act and the rules made there under, the Report and Account are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may obtain form the registered office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

Statutory Auditors

According to Directors, there is no adverse remarks made by Statutory Auditors in their report. Notes to the accounts are self explanatory to comments/observation made by the auditors in their report. Hence, no separate explanation is given.

M/s. Asit Mehta& Associates, Chartered Accountants, Statutory Auditors of your Company shall retire at the forthcoming Annual General Meeting. However, they are eligible for reappointment. Pursuant to Section 139 (2) of the Companies Act, 2013, Audit Committee and the Board of Directors of the Company have recommended their appointment for a period of one year i.e. from the conclusion of the 25th Annual General Meeting till the conclusion of the 26th AGM. M/s. Asit Mehta & Associates have confirmed that their appointment, if made, will be within the eligibility criteria prescribed under Section 141 (3) of the Companies Act, 2013.

Members are requested to appoint the Auditors and fix their remuneration.

Secretarial Audit Report

During the year, Secretarial Audit was carried out by Mr. Upendra C. Shukla, Practicing Company Secretary for the financial year 2014-15.

The report on the Secretarial Audit is appended as Annexure VI to this report. According to the Board of Directors the report does not have any adverse remark.

Extract of Annual Return

An extract of Annual Return in Form MGT-9 in pursuance to the provisions of Section 92(3) of the Companies Act,2013 is annexed to this report as Annexure VII and forms part of this report.

Receipt of Remuneration by Managing Director From Subsidiary Company

Mr. S. Rai, Managing Director of the Company, has not received any remuneration from any of its subsidiary companies.

Vigil Mechanism

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement. The whistle blower policy adopted by the Board of Directors is hosted on the website of the Company.

Reporting of Fraud

The Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013.

Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During the year under review, there were no material and significant orders passed by any of the regulators or courts or tribunals impacting the going concern status and the Company's operations.

Acknowledgement

Your Directors wish to thank Enkei Corporation, Japan, our technical collaborator, for their valued support and guidance for development of new parts. Your Directors also take this opportunity to thank all the customers, vendors, bankers and other business associates for their continued support. Your Directors also thank all the employees for their commitment, hard work and contribution to the Company's excellent performance. Your Directors are thankful to all the shareholders of the Company for their unstinted support and confidence reposed in the management of the Company.

On behalf of the Board of Directors

(S. Rai) (A.D. Harolikar)

Managing Director Director

Place: Shikrapur, Pune

Date: November 30, 2015


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting their Twenty-fourth Annual Report together with the audited Statements of Accounts for the year ended 31st March, 2014.

FINANCIAL HIGHLIGHTS (Rs. in Millions)

Particulars Standalone Standalone Consolidated Year ended Year ended Year ended 31.3.2014 31.3.2013 31.3.2014

Gross Sales 4,988.09 4,856.25 5,902.69

Net Sales 4,410.46 4,314.31 5,325.06

Profit before Depreciation, Interest & Tax 498.12 541.41 574.55

Less: Depreciation & Prior Period adjustments 175.69 175.12 211.19

Less: Interest 102.18 104.26 111.66

Profit before Tax 220.25 262.03 251.70

Provision for Tax 58.93 49.66 60.13

Profit after Tax 161.32 212.37 191.57

Add: Balance brought forward 677.11 519.48 565.93

Net Profit Available for appropriation 838.43 731.85 757.50

DIVIDEND

Your Directors are pleased to recommend a higher dividend of 50% (Rs. 2.50 per share of Rs. 5/- each) as against 40% paid for the previous year. The total payout on account of dividend including tax thereon will be Rs. 32.17 million. Dividend if declared will be free of tax in the hands of the shareholders.

YEAR UNDER RETROSPECT

During the year under review sales was marginally higher and profit was marginally lower compared to previous year. However, the consolidated sales and profit remain higher, thanks to improved overseas operations. Your Company recorded a net sale of Rs. 4,410.46 million in 2013-14 as against Rs. 4,314.31 million in the previous year with the corresponding profit before tax of Rs. 220.25 millions as against Rs. 262.03 million a year ago. On consolidated basis, your Company recorded a net sale of Rs. 5,325.06 million with a corresponding pre-tax profit of Rs. 251.70 million as against Rs. 5,246.29 million and Rs. 219.04 million a year ago.

FINANCE

During the year, the Company spent Rs. 228.82 million towards addition in fixed assets including plant and machinery and capital work in progress. The entire capital expenditure was funded from the internal accruals and term loans.

FUTURE PROSPECTS

It is hoped that the new government in center will push the economic activity by undertaking stalled and new infrastructure project and shall adopt policies for controlling the inflation and abetting price increase of essential commodities. This will in turn provide better job opportunities and higher disposable income. It is expected that Indian economy will be revived and shall be placed on growth track.

Your Company is continuously developing new products for other engineering and infra related industries. The Company has recorded in the financial year 2013-14, 3.30% of income out of non-auto business.

This will enable the Company to sustain the growth in years to come with reduced dependence of auto industry.

SUBSIDIARY COMPANIES:

Your Company has three foreign subsidiaries viz. Alicon Holding GmbH, Illichmann Castalloy s.r.o. and Illichmann Castalloy GmbH. Alicon Holding GmbH is the 100% subsidiary of your Company, who in turn in holding 100% capital of Illichmann Castalloy s.r.o. Illichmann Castalloy GmbH is the 100% subsidiary of Illichmann Castalloy s.r.o.

Illichman Castalloy GmbH is engaged in the business of marketing and Illichmann Castalloy s.r.o. is engaged in manufacturing of aluminium alloy castings. The combined revenue of both the subsidiaries was Rs. 927.14 million and profit before tax of Rs. 31.45 million. Your Directors are pleased to report that overseas operations of the Company has shown improvement compared to previous year.

Consolidated Financial Statement pursuant to Clause 41 of the Listing Agreement with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants, are annexed.

A statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies is attached to the accounts.

In terms of the general exemption granted by the Ministry of Corporate Affairs vide circular No. 02/2011 dated 8th February, 2011 for not attaching the annual accounts of subsidiaries and in compliance with the conditions enlisted therein, the report and annual accounts of the subsidiary companies for the financial year ended 31st March, 2014 have not been attached to the Company''s Accounts.

The annual accounts of the subsidiary companies and the related information are kept open for inspection by any shareholders at the Registered Office of the Company and of the concerned Subsidiary Company. Any shareholder, who wishes to obtain a copy of the said documents of any of the subsidiary companies, may send a request in writing at the Registered Office of the Company.

LISTING OF EQUITY SHARES

The Company''s Equity Shares are listed on the Bombay Stock Exchange Ltd. and the National Stock Exchange Ltd.

CORPORATE GOVERNANCE

Your Company is committed to adhere to Corporate Governance guidelines set out by SEBI and has complied with all the mandatory provisions of Clause 49 of the Listing Agreement. A separate section on Corporate Governance together with Certificate from the Company''s Auditors confirming compliance is set out in the Annexure forming part of this report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of the industrial growth vis-a-vis the growth of the Company and the future outlook is given under the head Management Discussion and Analysis Report, which forms part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to information and explanations provided to them, your Directors make the following statement, pursuant to Section 217(2AA) of the Companies Act, 1956 that:

1. In the preparation of annual accounts, the applicable accounting standards have been followed and that no material departure have been made from the same;

2. Appropriate accounting policies have been selected and applied them consistently and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year 31st March, 2014 and of the profit of the Company for the year ended on that date;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing, detecting fraud and other irregularities;

4. The annual accounts have been prepared on a ''going concern'' basis.

DIRECTORS

The Company has received a notice in writing from a member alongwith the deposit of requisite amount under Section 160 of the Act proposing the candidature of Mrs. Pamela Rai for the office of Director of the Company. Given her vast experience and past involvement with our group in HR and CSR activities, the Board of Directors has proposed that Mrs. Pamela Rai be appointed as a Director of the Company.

Mr. A.D. Harolikar and Mr. Vinay Panjabi were categorized as Independent Directors in accordance with the existing Clause 49 of the Listing Agreement. After coming into force of Section 149 of the Companies Act, 2013 from 1st April, 2014, the Company has re-assessed the status of its Directors with a view to determining whether Mr. A.D. Harolikar and Mr. Vinay Panjabi qualify for classification as Independent Directors in terms of Section 149(6) of the Companies Act, 2013. Accordingly, they fulfill the criteria as laid down in Section 149(6) of the Companies Act, 2013 in this regard.

Section 149 (10) of the new Companies Act, 2013 restricts the tenure of the Independent Director to two terms of upto ten years with a single term not exceeding five years. This has been made effective form 1st April, 2014. The proposed revised Clause 49 of the Listing Agreement issued by the Securities and Exchange Board of India (SEBI) and which shall be effective form 1st October, 2014 also contains the provisions in similar line. Mr. A.D. Harolikar and Mr. Vinay Panjabi retire by rotation at the forthcoming Annual general Meeting and they being eligible have offered themselves for appointment as Independent Directors in pursuance to the provisions of the Companies Act, 2013 and revised Clause 49 as aforesaid, to hold the office for a period upto 31st March, 2019.

Pursuant to the provisions of Section 160 of the Companies Act, 2013 read with the relevant rules, the Company has also received notices in writing from some of its members proposing their candidature for the office of Independent Directors.

To comply with the requirement of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Junichi Suzuki shall retire by rotation and being eligible, offers himself for reappointment.

Additional information and brief profile as required under Clause 49 of the Listing Agreement for each of the above Directors seeking appointment/ re-appointment are provided in the Notice and/or Corporate Governance Report, which forms part of the Annual Report.

EMPLOYEES:

Relations between the management and the employees remained cordial through out the year. Information as required in pursuance of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is set out in the annexure to the Directors'' Report. In terms of the provisions of Section 219(1)(b)(iv) of the Companied Act, 1956, the Directors'' Report is being sent to all the shareholders of the Company, excluding such annexure.

CONSERVATION OF ENERGY, ETC:

Information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 217(1)(e) of the Companies Act, 1956 is set out in the Annexure forming part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) :

At Alicon Castalloy Ltd., our approach to CSR is one that ensures the sustainability of all programmes initiated or supported, by remaining committed to all stakeholders and ensuring that all initiatives are well planned and subsequently monitored and evaluated.

Our focus is to engage with and empower the various influencers of child development who are working outside of mainstream education. Alicon has a long standing relation with various NGOs in Pune, like Maher, Sevadham & Tara Mobile Creches

Alicon focuses on empowering women via education, economic independence and developing in them a stronger sense of self confidence. One such partnership is with the Savitri Mahila Dairy Co-operative, a rural project in the outskirts of Pune.

We also work with an array of institutions that reach out to the healthcare needs of the marginalized in our communities, like the pediatric dept. at Pune''s Sassoon hospital. Besides organising regular blood donation camps, Alicon contributed to the healthcare needs of people affected by the Himalayan tsunami in the state of Uttarakhand in northern India.

AUDITORS:

The observations made in the Auditors'' Report and details provided in Notes to the Accounts are self-explanatory and therefore, do not call for any further comments under the Companies Act, 1956.

The Auditors, M/s. Asit Mehta & Associates, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

In pursuance to the notification of the Companies Act, 2013, made effective form 1st April, 2014 and rules made thereunder, no listed company shall appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years. Further, the said appointment is subject to ratification by the members of the Company at every AGM. The period of ten years (two terms of five years each) has to be calculated from the date of appointment of the auditors. Further, the provisio to the said Section 139 (2) stipulates that every company existing on or before the commencement of the new Act viz. the Companies Act, 2013, had to comply with the requirements of this section within three years from the date of commencement of this Act. M/s. Asit Mehta & Associates have already served as Statutory Auditors of the Company for a term of ten years.

Pursuant to Section 139 (2) of the Companies Act, 2013, Audit Committee and the Board of Directors of the Company have recommended their appointment for a period of one year i.e. from the conclusion of the 24th AGM till the conclusion of the 25th AGM, subject to approval of the members in the AGM of the Company. M/s. Asit Mehta & Associates have confirmed that their appointment, if made, will be within the eligibility criteria prescribed under Section 141 (3) of the Companies Act, 2013.

COST AUDITORS

Pursuant to the directive of the Central Government under the provisions of Section 233B of the Companies Act,1956, Mr. R. Srinivasa Raghavan, a qualified Cost Accountant, has been appointed for financial year 2013-14 to conduct the cost audit and submit his report.

ACKNOWLEDGEMENT

Your Directors wish to thank Enkei Corporation, Japan, our technical collaborator, for their valued support and guidance. Your Directors also wish to place on record their deep appreciation for exemplary contribution made by employees at all levels. Your Directors take this opportunity to express their gratitude for unstinted support extended by customers, suppliers, bankers and other business associates, and at last but not least the shareholders for the confidence reposed in the management.

On behalf of the Board of Directors

S. Rai A.D. Harolikar Managing Director Director

Place: Shikrapur, Pune Date : July 26, 2014


Mar 31, 2012

THE DIRECTORS HAVE PLEASURE IN PRESENTING THEIR TWENTY SECOND ANNUAL REPORT TOGETHER WITH THE AUDITED STATEMENTS OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH. 2012.

FINANCIAL HIGHLIGHTS

(Rs. in Millions)

parerticulars Standalone Standalone Consolidated

Year Ended March 31, 2012 Year Ended March 31, 2011 Year Ended March 31, 2012

Gross Sales 4216.33 2886.74 5095.28

Net Sales 3808.24 2566.70 4687.19

Profit before Depreciation, Interest & Tax 552.34 398.84 502.60

Less: Depreciation & Prior Period adjustments 149.74 126.17 170.76

Less: Interest 123.00 86.73 128.91

Profit before Tax 279.60 185.94 202.93

Provision for Tax 59.51 39.64 58.77

Profit after Tax 220.09 146.30 144.16

Add: Balance brought forward 332.02 213.55 340.38

Net Profit Available for appropriation 552.11 359.85 484.54

Dividend

Enthused with the commendable results, your Directors have recommended a higher dividend of 27.5% (Re1.38 per share of Rs.5/- each) as against 20% for the previous year. In the hands of shareholders the dividend will be free of tax. The total payout on account of Dividend and tax thereon for the year will be Rs. 17.64 million.

OPERATIONS: EVEN IN ODD ECONOMIC SITUATION. YOUR COMPANY TURNED OUT ONE MORE YEAR OF RECORD ACHIEVEMENTS. ON A STANDALONE BASIS. THE COMPANY RECORDED A NET SALE OF RS.3.808.24 MILLION AS AGAINST RS.2.566.70 IN THE PREVIOUS YEAR. A JUMP OF 48%. THE TOTAL INCOME FOR THE YEAR WAS RS.3.818.84 MILLION AS AGAINST RS.2.584.68 MILLION A YEAR AGO. INSPITE OF HIGHER PROVISION FOR DEPRECIATION AND FINANCIAL COST. THE PRE-TAX PROFIT GREW BY 48%. PRE-TAX PROFIT WAS RS.279.60 MILLION AS AGAINST RS.185.94 MILLION IN THE LAST YEAR.

On consolidated basis (inclusive of working of the overseas subsidiaries), the net sales for the year was Rs. 4,687.19 million and pre-tax profit was Rs.202.93 million. In the previous year, consolidated net sales was Rs. 3,191.20 million and pre-tax profit was Rs. 197.75 million.

FINANCE

During the year, the Company spent Rs. 324.45 million for expansion of its plant and machinery on stand alone and Rs. 374.76 million on consolidation basis. The entire expansion was funded from the internal accruals and term loan.

FUTURE PROSPECTS

The Company is continuously developing new products for other engineering and infra related industries. This will enable the Company to sustain the growth in years to come. A detailed review of the future outlook is given under the head Management Discussion and Analysis Report, which forms part of this report.

SUBSIDIARY COMPANIES:

To consolidate the European business, the operations in Austria are being shifted to Slovakia. Though presently, the overseas operations are incurring loss, after completing the consolidation exercise, the same is expected to become profitable.

A statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies is attached to the accounts.

Consolidated Financial Statement pursuant to Clause 41 of the Listing Agreement with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants, are annexed.

In terms of the general exemption granted by the Ministry of Corporate Affairs vide circular No. 02/2011 dated 8th February, 2011 for not attaching the annual accounts of subsidiaries and in compliance with the conditions enlisted therein, the report and annual accounts of the subsidiary companies for the financial year ended 31st March, 2012 have not been attached to the Company's Accounts.

The annual accounts of the subsidiary companies and the related information are kept open for inspection by any shareholders at the Registered Office of the Company and of the concerned Subsidiary Company. Any shareholder, who wishes to obtain a copy of the said documents of any of the subsidiary companies, may send a request in writing at the Registered Office of the Company.

CORPORATE GOvERNANCE

Your Company is committed to adhere to Corporate Governance guidelines set out by SEBI and has complied with all the mandatory provisions of Clause 49 of the Listing Agreement.

A separate section on Corporate Governance together with Certificate from the Company's Auditors confirming compliance is set out in the Annexure forming part of this report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of the industrial growth vis-a-vis the growth of the Company and the future outlook is given under the head Management Discussion and Analysis Report, which forms part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to information and explanations provided to them, your Directors make the following statement, pursuant to Section 217(2AA) of the Companies Act, 1956 that:

In the preparation of annual accounts, the applicable accounting standards have been followed and that no material departure have been made from the same;

Appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year March 31, 2012 and of the profit of the Company for the year ended on that date;

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing, detecting fraud and other irregularities;

The annual accounts have been prepared on a 'going concern' basis.

DIRECTORS

On 30th May, 2012 Mr. Maskatsu Uchiyama was appointed as an Alternate Director to Mr. Junichi Suzuki. Consequent upon his appointment, Mr. Osamu Ohashi ceased to be the Alternate Director.

To comply with the requirement of the Companies Act, 1956 Mr. A.D. Harolikar and Mr. Vinay Panjabi, Directors, shall retire by rotation and being eligible, they offer themselves for reappointment. Details of Directors seeking re-appointment are included in the Corporate Governance Report.

EMPLOYEES

Information as required in pursuance of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is annexed and forms part of this report.

conservation OF ENERGY, ETC:

Information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 217(1(e) of the Companies Act, 1956 is set out in the Annexure forming part of this report.

AUDITORS:

The observations made in the Auditors' Report and details provided in Notes to the Accounts are self-explanatory and therefore, do not call for any further comments under the Companies Act, 1956.

Asit Mehta & Associates, Statutory Auditors of the Company shall retire at the forthcoming Annual General Meeting and are eligible for reappointment. Members are requested to appoint Auditors for the current financial year and fix their remuneration.

ACKNOWLEDGEMENT

your directors wish to thank enkei corporation, japan, our technical collaborator, for their valued support and guidance for development of new parts. your directors also

WISH TO PLACE ON RECORD THEIR DEEP SENSE OF APPRECIATION FOR THE COMMITTED SERVICES BY EMPLOYEES AT ALL LEVELS. YOUR DIRECTORS TAKE THIS OPPORTUNITY TO ExPRESS THEIR GRATITUDE FOR UNSTINTED SUPPORT ExTENDED BY CUSTOMERS, SUPPLIERS, BANKERS AND OTHER BUSINESS ASSOCIATES, AND AT LAST BUT NOT LEAST THE SHAREHOLDERS FOR THE CONFIDENCE REPOSED IN THE MANAGEMENT.

On behalf of the Board of Directors

(S. Rai) (A.D. Harolikar)

Managing Director Director

Place: Shikrapur, Pune Date: July 30, 2012


Mar 31, 2010

THE DIRECTORS HAVE PLEASURE IN PRESENTING THEIR TWENTIETH ANNUAL REPORT TOGETHER WITH THE AUDITED STATEMENTS OF ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH. 2010.

FINANCIAL HIGHLIGHTS

PARTICULARS For the year ended For the year ended March 31.2009 March 31, 2010

Gross Sales 2383.47 3436.98

Net Sales 2121.07 3027.36

Profit before Depreciation, Interest & Tax 366.83 312.82

Less: Depreciation & Prior Period adjustments 125.45 203.26

Less: Interest 76.55 167.00

Profit before Tax 164.83 1123.78

Provision for Tax 30.85 0.50

Profit after Tax 133.98 114.20

Add: Balance brought forward 209.50 48.50

Net Profit Available for appropriation 343.48 209.50

Dividend

Enthused with the working of the Company, your Directors recommend a dividend of Rs.1/- per share (20%). The dividend if declared by the members, will be the highest in the history of the Company. The total pay out on account of Dividend and tax thereon for the year entails cash out- flow of Rs. 128 lacs.

THE INDIAN ECONOMY HAS SHOWN GROWTH OF OVER 8°/ OVER THE LAST FEW YEARS AND WITH STIMULUS PROVIDED BY THE CENTRAL GOVERNMENT AND RBI. THIS GROWTH WILL PICKUP THE MOMENTUM. YOUR COMPANY IS FULLY GEARED TO LEVERAGE THIS OPPORTUNITY.

Scheme Of Arrangement And Share Capital

During the year under review, the Honble High Court of Bombay approved the Scheme of arrangement between the Company and Enkei Wheels (India) Limited and their shareholders and creditors (the Scheme) vide its order dated 26th February 2010 without any modification as approved by the shareholders of the Company in the Court convened meeting held on 09th January 2009 under the Chairmanship of Mr. Milind D. Narvekar, an official of Honble High Court of Bombay.

As per the Scheme and in terms of sections 391-394 and other applicable provisions of the Companies Act, 1956, the Demerged Undertaking, namely entire business of the "Wheel Division" of the Company comprising of all properties (with rights and powers of every description), investments, assets and liabilities (includes duties of every description) stood transferred to / vested in Enkei Wheels (India) Limited as a going concern from the Appointed date, namely 01st April 2009.

In pursuance of the said Scheme, the shareholders of the Company will be issued and allotted 1(One) Equity Share of Rs.5/- each fully paid in Enkei Wheels (India) Limited for every 1(0ne) Equity Share of Rs.5/- each held by them in Company. The existing Investment of Company in the Equity Shares of Enkei Wheels (India) Limited of Rs 10 (Ten) lac shall stand cancelled as an integral part of the Scheme. There will not be any change in the Share Capital of the Company pursuant to the Scheme.

Subsidiaries

M/s. Enkei Wheels (India) Limited ceased to be a wholly owned subsidiary of the Company consequent to the cancellation of 2,00,000 Equity Shares of Rs. 5/- each held by the Company, including the equity shares held by its nominees from the Effective date namely 31st March 2010, in terms of the Scheme of Arrangement sanctioned by the Honble High Court of Bombay vide its order dated 26th February 2010.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to information and explanations provided to them, your Directors make the following statement, pursuant to Section 217 (2AA) of the Companies Act, 1956 that:

In the preparation of annual accounts, the applicable accounting standards have been followed and that no material departure have been made from the same;

Appropriate accounting policies have been selected and applied them consistently and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year March 31, 2010 and of the profit of the Company for the year ended on that date;

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the Provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing, detecting fraud and other irregularities;

The annual accounts have been prepared on a going concern basis,

DIRECTORS

To comply with the requirement of the Companies Act, 1956 Mr, Vinay Hiru Panjabi and Mr. Tetsuro Masui, Directors shall retire by rotation and being eligible, they offer themselves for reappointment. Details of Directors seeking re-appointment are included in the Corporate Governance Report.

CORPORATE GOVERNANCE:

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with certificate from the Companys Auditors confirming compliance is set out in the Annexure forming part of this report.

CONSERVATION OF ENERGY. ETC.:

Information pertaining to conservation of energy, technology absorption and foreign exchange earning and outgo pursuant to Section 217(1 He) of the Companies Act, 1956 Is set out in the Annexure forming part of this report.

EMPLOYEES:

Information as required in pursuance of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is annexed and forms part of this report.

AUDITORS REPORT:

Notes to the account gives full explanation to the remarks made by auditors in their report.

AUDITORS:

Asit Mehta & Associates, Statutory Auditors of the Company shall retire at the forthcoming Annual General Meeting and are eligible for reappointment.

Members are requested to appoint Auditors for the current financial year and fix their remuneration.

ACKNOWLEDGEMENT

Your Directors wish to thank Enkei Corporation, Japan, our technical collaborator for their valued support and guidance in technical matters. Your Directors aiso wish to place on record the unstinted support received from customers and employees of the Company at all levels.

Your Directors thank the shareholders for the confidence reposed in the management.

On behalf of the Board of Directors

(S. Rat) (A.D, Harolikar)

Managing Director Director

Place: Shikrapur, Pune

Date: April 10, 2010

 
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