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Directors Report of Autoline Industries Ltd.

Mar 31, 2014

The Directors present their 18th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2014.

FINANCIAL RESULTS:

The financial highlights for the year under review compared to the previous financial year are given below:

(in Millions except EPS data)

PARTICULARS Standalone Consolidated

31.3.2014 31.3.2013 31.3.2014 31.3.2013

Revenue from operations (Net) 3,969.07 5,733.27 6,770.54 8,006.85

Earnings before Interest, Financial Charges, Depreciation, Tax & 25.20 420.14 247.26 625.27

Amortisation - EBIDTA

Less: Finance Cost 311.36 344.66 338.72 374.84

Less: Depreciation & amortization expenses 220.28 198.51 246.70 230.75

Add: Exceptional items 63.72 67.88 63.72 67.88 Less: Extraordinary items 107.01 - 107.01 -

Profit Before Tax (549.73) (55.15) (381.45) 87.56

Tax Expense 2.29 (64.79) 18.17 (19.15)

Profit After Tax but before deducting minority interest (PAT) (552.01) 9.64 (399.62) 106.71

Minority Interest - - (2.06) (2.39)

Profit Attributable to group - - (397.56) 109.10

Earnings per Share (Basic) (in) (44.10) 1.67 (31.52) 9.81

Earnings per Share (Weighted Average) (in Rs..) (44.67) 0.78 (32.17) 8.87

PERFORMANCE REVIEW (CONSOLIDATED BASIS):

Revenue from operations (Net) Rs.. 6770.54 Millions (Previous Year Rs.. 8006.85 Millions).

Operating EBITA (Earnings before Interest, Financial Charges, Depreciation, Tax & Amortisation) decreased from Rs.. 625.27 Millions to Rs.. 247.26 Millions.

Profit before Tax decreased (PBT) from Rs..87.56 Millions to Rs.. (381.45) Millions.

Profit after Tax (PAT) decreased from Rs.. 106.71 Millions to Rs.. (399.62) Millions.

DIVIDEND:

In view of losses incurred, the Board of Directors do not recommend dividend for the financial year 2013-14. [Previous Year Rs.. 1.00 per equity share (i.e. 10%) amounting toRs.. 14.34 Millions including Dividend Distribution tax].

OVERVIEW OF PROGRESS AT VARIOUS PLANTS:

Your Company operates through Eleven manufacturing facilities and Design & Styling Centers.

Your Company proposes to consolidate the six existing plants in Pune and bringing them under one roof at Chakan Unit II with multiple advantages. This will reduce the number of locations to three (from existing six). On consolidation, your Company proposes to dispose of those Assets and realize a sum to the tune of approx. Rs.. 250 Millions. The consolidation will result in substantial operational efficiencies and costs savings by avoiding inter-plant movements, reduced manpower and considerable savings in overheads.

The consolidation will help utilize the credit in excise duty account to the tune ofRs.. 60 Millions and higher utilization of VAT credit (unused Credit available - Rs.. 440 Millions approx.) and thus help in improving liquidity. The credit is due to high capital investments made in Chakan Unit II plant and low utilization over the period.

FUTURE PLANS:

Your Company will be gaining market edge by incorporating following Strategic Objectives which will be the centre of the activity flow at Autoline.

1) Focus on enriching the life of employees ;

2) Having delighted customers, to bring true value to Shareholders;

3) Financial step- up to boost the net profit, ROI and cash flow;

4) Achieving the desired results through the Framework of diversification of business, efficiency improvement and growth mind set as the primary drivers;

Your Company is planning to increase exports from current 2 % to 20 % in next 3 years by targeting current customers of Autoline Industries USA, Inc. for sheet metal and fabrication.

Your Company proposes to diversify the customer base from Automotive to non -Automotive sectors like Power, Construction and Industrial. This will reduce the dependency of Automotive sector from current 95 % to 60 % by increasing the share of businesses. This will also open new market segments for your company and more opportunity for growth. Your Company will also focus more in domestic market for increasing the share with customers like Ford, General Motors, Volkswagen, Mahindra & Mahindra etc.

Your Company has been awarded sizable business to supply major Assemblies for the new upcoming models which has been recently launched by Tata Motors Ltd. The SOP will start with effect from July, 2014 onwards.

Your Company proposes to set up a manufacturing facility at Chennai- "The Detroit of South Asia" which is emerging as the leading automotive hub in India with a base of over 30% of India''s automotive industry and 35% of its auto components industry. Your Company proposes to get assured additional business from Ashok Leyland - Nissan, Daimler India, Isuzu Motors for its Heavy and Light Commercial Vehicles and also explore the possibility for development of business for Passenger Vehicles with Ashok Leyland - Nissan, Renault Nissan, Ford, Kamaz Vectra etc.

Autoline Industrial Parks Limited - (AIPL):

AIPL (a subsidiary of Autoline Industries Limited) proposes to develop infrastructure for setting up of Township under Special Township Act (STP) vide Notification No. TPS-1804/Pune R.P DCR /UD -13 dated November 16, 2005 at Village Mahalunge, Taluka, Khed, District Pune, State - Maharashtra, India under the Special Township Project (STP) of Government of Maharashtra. AIPL has filed an application for constructing Special Township at Village Mahalunge, Taluka Khed, District Pune on its land, to Government of Maharashtra, Mumbai.

During the period under review and till date, AIPL, has acquired further land so as to meet necessary conditions and stipulations and taken necessary steps as per latest requirement of Urban Development Department, Government of Maharashtra. Hence the Location Clearance for the land (100 Acres under Special Township Project) is expected to be received shortly and thereafter Letter of Intent and all other approvals (including Environment Clearance from Ministry Of Environment & Forest [MOEF]) is expected.

Autoline Industries, Inc., Butler, Indiana, USA- (Autoline -Butler): [a 100% owned subsidiary Company]:

1.) This year Autoline-Butler has maintained its position in the pedal and park brake market. Your company is in the midst of launching a major GM park brake program in China and Europe and will be supplying over 600,000 park brake levers in these two continents.

2.) Autoline-Butler will be fulfilling these contracts by successfully managing the manufacturing of the components through partner companies in Europe and China.

3.) Autoline-Butler continues to focus its efforts on operational improvement, cost reductions and profit improvement objectives throughout the year.

4.) Autoline-Butler has also launched a new lightweight pedal technology which is already in production. Further technological innovations are geared towards improving fuel economy of vehicles by reducing the weight of the products.

5.) During the year under review your company successfully implemented $ 500,000 of cost savings.

6.) Patents: Autoline-Butler have successfully filed and got approval for one patent globally for a crash release mechanism specifically used in General Motor products.

DEP Autoline USA, Inc. and Nuvent Technologies Private Limited:

Your Company had made investment in 30,600 shares in DEP Autoline USA, Inc. in financial year 2007-08 by way of remittance of USD 2.40 Millions (Rs.. 98.00 Millions) and balance by issue of 5,38,125 shares of the Company at an issue price of Rs.. 400/- per share (including premium of Rs.. 390/- per share). In September, 2013 as per Share Purchase Agreement entered with DEP Autoline USA, Inc., your Company has disinvested its remaining 40% stake / shares held in DEP Autoline USA Inc. and has received USD 3.50 Million (Rs.. 217.30 Millions) as per present fair value towards full and final settlement. The loss on account of disinvestment has been accounted for as an extra-ordinary item. Further your Company has sold the remaining 40% stake /shares held in Nuvent Technologies Private Limited for consideration of Rs.. 0.25 Millions as part of the whole deal.

SZ Design, Srl and Zagato Srl ("ZAGATO") Milan, Italy:

The net worth of the SZ Design, Sri, (under liquidation) has been eroded due to various write offs. On June 13, 2012 the Court of Milan, Italy have rejected the request for "Concordato Preventivo" under the Italian Laws filed in June, 2011. SZ Design, Sri has challenged before the Supreme Court of Cassation the decision of the Court of Appeal of Milan of November 15, 2012 which rejected SZ Design'' appeal against the decision of the Tribunal of Milan that did not approve the proposal of Concordato Preventivo due to the opposition of the Tax Authorities. Nevertheless, there has not yet been a decision of the Supreme Court on this matter.

EXPORTS:

Your Company now exports Thirty one Sheet Metal Parts and Assemblies for Cummins Power Generation USA and Cummins Filtration USA. During the financial year 2013-14, the Company has exported worth USD 1.48 Million (Rs.. 88.29 Millions). Your Company also made tooling for Export Parts through which a business of USD 0.11 Million (Rs.. 6.21 Millions) was achieved.

MEGA PROJECT:

As per the Package Scheme of Incentives (PSI) 2007, your Company''s unit located at S. Nos. 313/314, Nanekarwadi, Chakan, Tal: Khed, Dist: Pune - 410 501 has been sanctioned Industrial Promotion Subsidy (IPS) amounting to Rs.. 773.80 Millions to be availed over a period of 7 years starting from October 1, 2009. The Company has received a credit of Rs.. 245.10 Millions till date. During the current financial year, the Company has claimed Industrial Promotion Subsidy under Package Scheme of Incentive, 2007 from Government of Maharashtra ofRs.. 58.27 Millions. Follow up for receipt of the balance subsidy ofRs.. 27.23 Millions of earlier years and Rs.. 52.44 Millions (90% ofRs.. 58.27 Millions) the claim for F.Y 2013-14 is being made. Further, your Company plans to submit the claims out of the total entitlement of Rs.. 773.80 Million on a yearly basis from Financial year 2013-14 onwards (to be claimed within 6 months of the end of each financial year).

FIXED DEPOSITS:

During the year under review, your Company has not accepted any deposits under the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1975 framed thereunder.

CONSOLIDATED ACCOUNTS:

In accordance with the requirements of Accounting Standard AS - 21, prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts and Cash Flow are annexed to this report. The Consolidated Financial Results are based on the audited financial results of subsidiaries Autoline Design Software Limited and Autoline Industrial Parks Limited, except the Annual Un-audited financial statements of Koderat Investments Limited, Cyprus and Autoline Industries USA, Inc. and Autoline Stampings Ltd, South Korea.

During the year under review, the stake held in Autoline Industrial Parks Limited has been reduced from 51.12 % to 43.78 %. The Financial Results of Autoline Industrial Parks has been consolidated as per provisions of Companies Act, 1956 and as per Accounting Standard - 21 ( Consolidated Financial Results) issued by the Institute of Chartered Accountants of India to the extent of 43.78 %. Autoline Industrial Parks Limited continues to remain subsidiary within the meaning of Section 2(87) of the Companies Act, 2013.

Pursuant to provisions of Section 212 (8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its General Circular No. 02/ 2011 and 03/2011 dated February 8, 2011 and February 21, 2011 respectively read with General Circular No. 08/2014 dated April 4, 2014 has granted a general exemption subject to certain conditions to holding companies from complying with the provisions of Section 212 of the Act which requires the attaching of the Balance Sheet, Statement of Profit and Loss and other documents of its subsidiary companies to its Balance Sheet. Accordingly, the said documents are not being included in this Annual Report. The main financial summaries of the subsidiary companies are provided under the Section ''Subsidiary Companies: Financial Highlights 2013-14'' in the Annual Report. The Company will make available the said annual accounts and related detailed information of the subsidiary companies upon request by any member of the Company or its subsidiary companies and the same will also be kept open for inspection by any member at the Head Office of the Company and the Subsidiary Companies on all working days during business hours.

FINANCIAL HIGHLIGHTS AS ON 31.3.2014 - DOMESTIC COMPANIES :

i) Autoline Design Software Limited :

The revenue from operations including exports was Rs.. 33.05 Millions (Previous Year Rs.. 28.30 Millions) The Company achieved net profit of Rs.. 1.13 Millions ( Previous year loss of Rs.. 3.86 Millions)

ii) Autoline Industrial Parks Limited :

The Company incurred loss of Rs.. 3.66 Millions ( Previous year loss of Rs.. 4.90 Millions)

FINANCIALS HIGHLIGHTS AS ON 31.3.2014 - FOREIGN COMPANIES :

i) Autoline Industries INC. USA :

The turnover increased to Rs.. 2444.47 Millions ( Previous Year turnover was Rs.. 2030.55 Millions) During the period the Company achieved a net profit of Rs.. 147.14 Millions (Previous Year net profit was Rs.. 86.30 Millions).

ii) Autoline Stampings Limited, South Korea :

Autoline Stampings Limited, South Korea achieved a turnover of Rs.. 439.36 Millions ( Previous Year turnover was Rs.. 337.90 Millions) and a net profit ofRs.. 8.73 Millions ( Previous Year net profit was Rs.. 20.78 Millions)

iii) Koderat Investments Limited, Cyprus:

Koderat Investment Limited, Cyprus a wholly owned subsidiary of the Company incurred a loss of Rs.. 0.93 Millions ( Previous Year loss ofRs.. 1.24 Millions)

RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION:

i) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 , read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 is Given as an Annexure A to this report.

ii) Particulars under Section 217 (2A) of the Companies Act, 1956 read with Companies ( Particulars of Employees) Rules, 2011 as amended:

During the year under review, there was no person employed throughout the financial year who was in receipt of remuneration in aggregate of not less than Rs.. 60,00,000/- per annum or Rs.. 5,00,000/- per month. Hence the particulars required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rues, 2011 as amended are not given.

DIRECTORS:

In accordance with the provisions of the Companies Act, 2013 and Company''s Articles of Association Mr. M. Radhakrishnan, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for re- appointment at the Annual General Meeting.

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Umesh N. Chavan was appointed as an Additional Director and designated as an Executive Director and Chief Executive Officer w.e.f. June 25, 2014 and he shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from Mr. Umesh N. Chavan proposing signifying his candidature as a Director of the Company.

Mr. Umesh N. Chavan was appointed as an Executive Director and Chief Executive Officer of the Company with effect from June 25, 2014 subject requisite approval from Central Government and Shareholders by Special Resolution at the ensuing Annual General Meeting.

In terms of the Articles of Association of the Company, Mr. Prakash B. Nimbalkar and CA. Vijay K. Thanawala Directors retire at the ensuing Annual General Meeting. The Company has received requisite notices in writing from Mr. Prakash B. Nimbalkar and CA. Vijay K. Thanawala signifying their candidatures as an Independent Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, state and confirm that:

(a) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and that there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and 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 March 31, 2014 and of the Profit /Loss Account of the Company for that period;

(c) the Directors have taken proper and sufficient care 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 and detecting fraud and other irregularities; and

(d) the Directors have prepared annual accounts of the Company on ''a going concern'' basis.

EMPLOYEES'' STOCK OPTION SCHEME - ESOS

In accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the Company has instituted Employee Stock Option Scheme 2008 (Autoline ESOS 2008) pursuant to the Special Resolution passed by Shareholders at 12th Annual General Meeting held on September 27, 2008. As per Autoline ESOS 2008,1,60,000 Options were granted to 171 Permanent employees and 15,000 options were granted to 5 Independent Directors. During the year under review, 35781 options were exercised and 9 employees holding 2369 options resigned.

These options are available for re-issue. The details of the same are given in the Annexure - B to this report.

The Certificate from the Company''s Statutory Auditors in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed as Annexure - C.

CORPORATE GOVERNANCE:

Your Company has complied with the mandatory provisions of Clause 49 of the Listing Agreement relating to Corporate Governance, as amended from time to time. A separate section on Corporate Governance forms part of the Annual Report and the Certificate from the Company''s Statutory Auditors in terms of Clause 49 of the Listing agreement with Stock Exchanges is annexed as Annexure - D.

AUDITORS:

M/s. K V M D S & Associates, Chartered Accountants, Pune (bearing FRN 121347W) Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting. However the Company has received letters from M/s. K V M D S & Associates, Chartered Accountants, Pune informing that they do not wish to be considered for re-appointment as Statutory Auditors. M/s. K V M D S & Associates, Chartered Accountants, Pune, Statutory Auditors of the Company will retire from the office of the Auditors at the forthcoming Annual General Meeting.

M/s. A.R. Sulakhe & Co. Chartered Accountants (FRN 110540), have consented to the appointment as Statutory Auditors. The Company has received letters from M/s. A.R. Sulakhe &Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for such appointment.

The Statutory Auditors, if appointed, shall hold office from the conclusion of this Annual General Meeting to the conclusion of the fourth consecutive Annual General Meeting (subject to ratification of the appointment by the members at every Annual General Meeting held after this Annual General Meeting).

AUDITORS'' REPORT:

The observations made in the Auditors'' Report, read together with the relevant notes thereon are self-explanatory and hence does not call for any comments under Section 217 (3) of the Companies Act, 1956.

COST AUDITORS:

As per the Order of the Ministry of Corporate Affairs, the Cost Audit has become applicable for the Company. Accordingly, the Company has appointed Mr. S.G. Jog, Cost Accountant, Pune as the Cost Auditors for the financial year 2014-15. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the Shareholders of the Company at the ensuing Annual General Meeting.

The due date for filing the Cost Audit Report in XBRL mode for the financial year ended March 31, 2013 was September 27, 2013 and the Cost Audit Report was filed by Mr. S.G. Jog, Cost Auditors on September 18, 2013. The Cost Audit Report for the financial year ended March 31, 2014 will be filed within the prescribed time.

ACKNOWLEDGEMENTS:

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company''s executives, staff and workers.

For and on behalf of the Board

Place : Pune (Prakash B. Nimbalkar)

June 25, 2014 Chairman


Mar 31, 2013

Dear Member(s),

The Directors are pleased to present their 17th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2013.

FINANCIAL RESULTS:

The financial highlights for the year under review compared to the previous financial year are given below:

(Rs. in Millions except EPS data)

Standalone Consolidated

PARTICULARS 31.3.2013 31.03.2012 31.3.2013 31.03.2012

Revenue from operations (Net) 5733.27 5837.09 8006.85 7480.03

Earnings before Interest, Financial Charges, Depreciation, 419.58 652.20 624.64 788.31

Tax & Amortisation- EBIDTA

Less: Finance Cost 344.66 286.25 374.84 311.61

Less: Depreciation & amortization expenses 198.50 194.58 230.75 210.52

Add: Exceptional items 68.51 203.86 68.51 203.86

Profit Before Tax (55.07) 375.23 87.56 470.04

Tax Expense (64.71) 40.50 (19.15) 75.15

Profit After Tax but before deducting minority interest (PAT) 9.64 334.73 106.71 394.89

Less : Minority Interest ---- ----- (2.39) (1.86)

Profit Attributable to group ---- ----- 109.10 396.75

Earnings per Share (Basic) (in ~) 1.67 28.33 9.81 33.41

Earnings per Share (Diluted) (in ~) 0.78 27.21 8.87 32.25

DIVIDEND:

The Board of Directors have recommended a dividend ofRs. 1/- per equity share (i.e.10 %) amounting to Rs. 14.34 Millions including Dividend Distribution tax, (Previous Year Rs. 4.00 per equity share (i.e.40%) amounting to Rs. 56.74 Millions including Dividend Distribution tax.)

PERFORMANCE REVIEW (CONSOLIDATED BASIS):

Revenue from operations (Net) increased by 7.04 % from Rs. 7480.03 Millions to Rs. 8006.85 Millions.

Operating EBIDTA (Earnings before Interest, Financial Charges, Depreciation, Tax & Amortisation) decreased by 20.76 % from Rs. 788.31 Millions to Rs. 624.64 Millions.

Profit before Tax (PBT) decreased by 81.37 % from Rs. 470.04 Millions to Rs. 87.56 Millions.

Profit after Tax ( PAT) decreased by 72.97 % from Rs. 394.89 Millions to Rs. 106.71 Millions.

OVERVIEW OF PROGRESS AT VARIOUS PLANTS:

A) Manufacturing facility at Chakan Unit II - Nanekarwadi, Chakan, India:

This particular plant has large press capacity varying from 500 Ton to 2000 Ton, inclusive of two nos. 1,000 Ton Double Action Press Machines. During the financial year under review, your Company has purchase done 900 Ton press as a standby for unexpected breakdown of certain Critical Presses and the same is under installation. The total number of presses installed in this plant are 17.

This particular plant is engaged in manufacturing of various sheet metal components along with major assembly lines for Structure Assembly, Door Assemblies, Roof panel, Vehicle Floors and other aesthetic items for various models of Tata Motors Limited (TML), Mahindra Navistar Automotive Ltd. and other OEMs.

During the year under review, your Company has set up dedicated assembly line for various assemblies for Mahindra Navistar Automotive Ltd. and has started supplying for its Heavy Commercial Vehicles as per awarded business.

On the future business development front, your Company is exploring the business possibilities with global automotive players like Foton, a Chinese Truck Maker, Jaguar Land Rover (JLR) Bharat Benz (Daimler trucks) etc. Initial visits from Foton, JLR and Daimler, Chennai have taken place and your Company is in further business discussions with them.

TOOL ROOM:

The State of the Art Tool Room is equipped with the best facilities for manufacturing various sheet metal large dies upto 4.5 Meters of world class quality along with in-house design facilities (CAD/ CAM team of about 25 engineers). Your Company has manufactured various tools for domestic and international OEMs like - TML, General Motors- India, Bajaj Auto Limited, Diamler India, FIAT India Pvt. Ltd, Cummins USA, American Axle Manufacturing, Volkswagen, Ashok Leyland - Nissan, etc.

B) Manufacturing facility at Chakan Unit III- Mahalunge - Chakan, India :

This unit manufactures Silencers, Tubular Cross Members, Exhaust Systems from Engine to Tailpipe and Radiator tubes, CAC inlet and outlet tubes for Heavy Commercial Vehicles (HCVs), Light Commercial Vehicles (LCVs) as well as Passenger Cars. This unit has a separate painting booth for painting exhaust systems and Structural Assemblies.

C) Manufacturing facility at Plot Nos. 5, 6 & 8, Rudrapur -Uttarakhand, India:

Your Company has set up manufacturing facilities located at Plot Nos. 5, 6 and 8, Sector 11, IIE, Rudrapur, SIDCUL, Uttarakhand which manufactures various sheet metal Press components, Welded Assemblies, Load Bodies and Small Mechanical Assemblies ( SMA) for various Models of Vehicles manufactured by TML, Ashok Leyland and other OEMs.

Your Company has installed the press shop which consists of 10 large presses ranging from 400 tons to 1200 tons and 14 medium presses ranging from 40 tons to 350 tons. Your Company has installed welding facility for manufacture of Low Deck Load Body, BIW parts, Foot Control Modules (FCM), Guide plates and Door Hinges.

During the year under review, the Company has set up and installed the Automated Welding Line for manufacturing of High Deck Load Body for TML''s Tata Ace with installed capacity of 400 per day. The Company has started supplying High Deck Load Body from October, 2012 as per roll out requirement for this Model in TML. The said High Deck Load Body was designed and developed by your Company''s Wholly Owned Subsidiary Company - Autoline Design Software Limited.

D) Manufacturing facility at Plot No. E-12-17 (7) and (8), MIDC, Bhosari, Pune, India:

Your Company is having world class Manufacturing facilities for various Pedal Control Systems (Foot Control Modules), Parking Brakes, Door Hinges, Mechanical Jacks and other Small Mechanical Assemblies for its domestic and International OEMs like TML, General Motors, India and Korea, Volkswagen India, Daimler India Commercial vehicles (Bharat Benz) and Ashok Leyland - Nissan, Ford Chennai and Sanand. This facility has been certified EMS 14001, OHSAS 18001 and TS 16949 and complies with the highest and stringent quality standards of the International OEMs. In-addition, this facility has also been qualified for General Motor''s QSB and Volkswagen''s formal Q Certification. This facility is equipped with a dedicated state of the art testing facility required for validating the safety of the critical product range which is being manufactured at this plant. This facility exports the GM Mini pedal systems to Korea as a part of GM global supply as single source.

Your Company has set up additional manufacturing facility at Plot No. E-12-17 (7), MIDC, Bhosari, Pune (Adjacent to Plot No. E-12-17 (8), MIDC, Bhosari, Pune). The Company has started its production for Volkswagen, Daimler and other OEMs. The press line of 6 Presses with capacity from 63 Ton to 350 Ton as well as 5 Ton overhead crane and 200 CFM compressor have been installed. Two assemblies have been set up for Volkswagen and four assemblies for Daimler. In addition to these products new awarded businesses from FORD, Ashok Leyland - Nissan and Renault Nissan will be established in this facility.

E) Manufacturing facility at Dharwad, Karnataka:

In October 2012, your Company has setup a manufacturing facility on a rented premises at Belur Industrial Area, Dharwad, Karnataka. Five major assemblies for the Commercial Vehicle are manufactured and delivered to TML, Dharwad from this plant. This plant has a capacity of manufacturing 400 Assemblies per day.

The Company also owns 2 acres land at Belur Industrial Area, Dharwad. Recently Bhumi Pooja was performed and all approvals for construction of building has been received. This proposed manufacturing facility along with a rented shed will be used to assemble the major components being supplied by your Company for the various vehicles manufactured at TML, Dharwad. Considering the proximity to Banglore this facility will also to be used to supply Auto Components to other OEMs like - Ashok Leyland- Nissan, Toyota located in this area.

FUTURE PLANS:

Your Company proposes to set up a manufacturing facility at Chennai- "The Detroit of South Asia" which is the leading automotive hub in India with a base of over 30% of India''s automotive industry and 35% of its auto components industry. The Company proposes to get assured additional business with Ashok Leyland - Nissan, Daimler India, Isuzu Motors for its Heavy and Light Commercial Vehicles and also explore the possibility of development of business for Passenger Vehicles with Ashok Leyland - Nissan, Renault Nissan, Ford, Kamaz Vectra.

Further your Company proposes to enter into the Aluminum Die Casting business which has good export potential and a thriving domestic demand. This would be a logical extension and your Company has requisite technical and marketing capabilities.

F) Autoline Industrial Parks Limited - (AIPL):

AIPL now proposes to develop infrastructure for setting up of Township under Special Township Act (STP) vide Notification No. TPS-1804/Pune R.P. DCR /UD -13 dated 16th November, 2005 at Village Mahalunge, Taluka, Khed, District Pune, State - Maharashtra, India under the Special Township Project (STP) of Government of Maharashtra.

During the year under review, AIPL has filed an application for constructing Special Township at Village Mahalunge, Taluka Khed, District Pune on its land, to Mantralaya, Mumbai. The location clearance is expected to take 4 months and then Letter of Intent and all other approvals (including Environment Clearance from Ministry Of Environment and Forest [MOEF]) within a overall period of approx. 12 months.

AIPL is continuing to explore the possibilities of a sale/ joint development in a manner most beneficial to all stakeholders. Negotiations are at different stages with few reputed corporate developers.

G) Autoline Design Software Limited, India : (ADSL)

End to end R&D support carried out during the year and its benefit to Autoline Industries Ltd and OEMs.:

Technological advancement and virtual product development process is directly involved in decrease in cost and waste. Here ADSL''s R&D team plays a significant role in supporting entire product life cycle and its implementation throughout the process.

a) ADSL has successfully carried out design and development work for Pedal system and parking brake for various OEM''s like TML, General Motors, and Ford Motors during the year 2012-13. For GM (M2XX) RHD Crash Mechanism of Pedal system has been developed, Renault Nissan manual transmission pedal assembly design has been completed. Parking brake design for Nano CNG and Renault Nissan has been completed and all the projects handed over to production.

b) Ford pedal system for manual and automatic transmission has been designed and handed over to production.

c) Product validation is being carried out with CAE group which helped in design modifications to reduce the number of iterations during the design process. CAE enabled ''earlier'' problem resolution, which reduced the costs associated with the product life cycle. The CAE team was involved in each major project of TML, Ashok Leyland, and General Motors during the year.

d) Considering the potential requirement of sheet metal assembly line, building a team of Jigs & Fixtures initiatives has been taken for various operations like welding inspection, assembly line for pedal system for various customers like Ashok Leyland, TML, and Varroc Polymers & Daimler.

e) On the marketing front, various R&D initiatives has been started to approach two/four wheelers OEM''s, few of them are Royal Enfield, Bajaj, Renault, Fiat etc. It helps to bring new tools and technologies, design knowledge and approach to find optimum solution for the product definition.

f) CAE (Initiative) - The mass optimization of 25% per seat of a two wheeler for VARROC has been achieved. The mass optimization done by taking the design considerations in to account. The mass optimization process with the help of CAE tools helped to reduce the overall tool modifications and hence the cost of modifications.

g) The Non-linear analysis of small assemblies like parking break, clutch pedal and brake pedal of GM, TML and ASHOK LEYLAND is carried out to achieve optimal design. Evaluated and refined analysis using computer simulations rather than physical prototype testing helped to reduce the efforts for the design modifications and development process. The results are 85-90% in relation with physical testing.

h) The optimization of heavy vehicle bracket for an excitation load is done. ADSL have presented this analysis in Altair national level paper seminar (HTC-2012 ) at Bangalore.

i) ADSL Structural design team has done the design of High deck load body of LCV for one of the largest OEM in India and also supported Autoline Industries Ltd to set up the line for production. Design support has been provided to Autoline Industries Ltd. to develop Cab tilt and Cab stay. ADSL styling team has come with styling solutions for Helmets, lighting systems, Two wheelers, concept design for interior and exterior for 4 wheelers and concept design for Consumer Goods. Small Mechanical Assemblies team has been instrumental in providing latest Pedal Systems, Jacks and Parking Brakes for leading automobile manufacturers globally like General Motors, Ford, Chrysler, Fisker, Ashok Leyland-Nissan and Daimler etc. ADSL has also been able to get a global order working closely with DEP Autoline Inc., USA for a European Auto manufacturer.

j) ADSL is also working closely with a leading Automobile OEM for conversion of an existing SEDAN to a LOAD CARRIER with minimum changes and cost effectiveness in close co-operation with DEP Autoline Inc., USA.

H) Autoline Industries, Inc., Butler, Indiana, USA- (Autoline -Butler):

1) During the year under review, Autoline -Butler continues to be a strong player in the pedal system, Park Brake and Jack Business units. The Company is executing a $ 92 Million USD Global Mechanical Park Brake contract over 6 years in 3 continents. Your Company now proposes to start its operations both in China and Europe through contract manufacturing partners in both of these countries. It has emerged as a key player in the Global Mechanical Park Brake segment. Your Company will now expand into these geographies and start servicing global OEMs in these regions.

2) During the year under review, your Company successfully implemented a $ 1 million USD profit improvement action program. The Company is happy to report that the program is off to a great start and your Company will achieve its target in this fiscal year.

3) A chassis spare tyre kit and a wheel chock program was launched supplying 350,000 units / year at an estimated value of USD 1.2 Million.

4) Your Company through Autoline Industries USA has been accepted at two additional OEMs in the US for supplying Jacks and Pedal assemblies and new programs are being quoted currently for launch in 2016.

5) The Company is very delighted to report a successful negotiation of a new three year contract with the Labour Union at the Butler operations.

I) SZ Design, Srl and Zagato Srl ("ZAGATO") Milan, Italy :

The net worth of the SZ Design, Srl, (under liquidation) has been eroded due to various write offs. On 13th June, 2012 the Court of Milan, Italy has rejected the request of "Concordato Preventivo" under the Italian Laws filed in June, 2011. However SZ Design, Srl, filed appeal against this decision. The appeal was discussed at a hearing held on 15th November, 2012. The Court of Appeal in Milan has dismissed the appeal of SZ Design, Srl. against the decision of the Milan Court which rejected the request of "Concordato Preventivo". The attorney of SZ Design, Srl informed that the SZ Design Srl., has filed the appeal before the Court of Cassation against the decision of the Court of Appeal of Milan to reject the "Concordato Preventivo proposal". As of today, no request for bankruptcy is pending. The Company will take suitable action after the decision.

J) EXPORTS:

Your Company now exports Thirty one Sheet Metal Parts and Assemblies for Cummins Power Generation USA and Cummins Filtration USA. During the financial year 2012-13, the Company has exported worth USD 1.61 Million (Rs. 86.45 Million). Your Company also made tooling for Export Parts through which a business of USD 0.045 Million ( Rs. 2.40 Million) was achieved. There was a 38.11% growth in exports as compared to the financial year 2011-12. During the period under review, your Company also exported Components worth Rs. 3.31 Million to South Korea.

FIXED DEPOSITS:

During the year, your Company has not accepted any deposits under the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1975 framed thereunder.

MEGA PROJECT:

As per the Package Scheme of Incentives (PSI) 2007, your Company''s unit located at S. Nos. 313/314, Nanekarwadi, Chakan, Tal: Khed, Dist: Pune - 410 501 has been sanctioned Industrial Promotion Subsidy (IPS) amounting to Rs. 773.80 Million to be availed over a period of 7 years starting from 1st October, 2009. The Company received a credit ofRs. 101 Million on 11th June, 2012 towards IPS (being 85% of admissible IPS ofRs. 36.60 Million and Rs. 82.2 Million for the FY 2009- 10 and 2010-11 respectively) and Rs. 72.20 Million on 3rd December, 2012 (being 85% of admissible IPS ofRs. 84.90 Million for FY 2011-12). Further your Company has also submitted a claim for IPS for FY 2012-13 and a credit ofRs. 58.20 Million (being 85% of admissible IPS ofRs. 68.50 Million) is expected to be received shortly. Further, your Company plans to submit the claims out of the total entitlement of Rs. 773.8 Million on a yearly basis from Financial year 2013-14 onwards (to be claimed within 6 months of the end of each financial year).

CONSOLIDATED ACCOUNTS:

In accordance with the requirements of Accounting Standard AS - 21, prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts and Cash Flow are annexed to this report.

Pursuant to provisions of Section 212 (8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its General Circular No. 02/ 2011 dated February 8, 2011 has granted a general exemption subject to certain conditions to holding companies from complying with the provisions of Section 212 of the Act which requires the attaching of the Balance Sheet, Statement of Profit and Loss and other documents of its subsidiary companies to its Balance Sheet. Accordingly, the said documents are not being included in this Annual Report. The main financial summaries of the subsidiary companies are provided under the section ''Subsidiary Companies: Financial Highlights 2012-13'' in the Annual Report. The Company will make available at any point of time the said annual accounts and related detailed information of the subsidiary companies upon request by any member of the Company or its subsidiary companies and the same will also be kept open for inspection by any member at the Head Office of the Company and the Subsidiary Companies.

FINANCIALS HIGHLIGHTS - DOMESTIC COMPANIES:

i) Autoline Design Software Limited :

The revenue from operations including exports was Rs. 28.30 Millions (Previous YearRs. 31.34 Millions) The Company incurred Loss ofRs. 3.86 Millions as against a Profit ofRs. 3.48 Millions) during the Previous Year.

ii) Autoline Industrial Parks Limited :

During the year under review the Company incurred loss of Rs. 4.90 Millions (Previous year Rs. 3.80 Millions).

FINANCIALS HIGHLIGHTS -FOREIGN COMPANIES:

i) Autoline Industries, INC. USA :

During the period under review, the turnover increased to Rs. 2030.55 Millions (Previous Year turnover was 1417.97 Millions). During the period the Company achieved net profit ofRs. 86.30 Millions (Previous Year net profit was Rs. 50.34 Millions.)

ii) Autoline Stamping Limited,South Korea:

During the period under review, the Autoline Stampings Limited, South Korea achieved a turnover of Rs. 337.90 Millions (Previous Year turnover was Rs. 259.93 Millions) and a net profit ofRs. 20.78 Millions (Previous Year net profit was Rs. 15.50 Millions).

iii) Koderat Investments Limited, Cyprus:

Koderat Investments Limited, Cyprus, a wholly owned subsidiary of the Company incurred a loss ofRs. 1.24 Millions (previous year loss ofRs. 5.35 Millions)

RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION:

i) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo:

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies ( Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given as an Annexure - A to this report.

ii) Particulars under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 2011 as amended:

The particulars required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 2011 as amended is given as Annexure- B to this report.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and Company''s Articles of Association Mr. Amit Goela retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for re- appointment at the Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, state and confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards had been followed and that there are no material departures;

(b) the Directors had selected such accounting policies and applied them consistently and 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 31st March, 2013 and of the Profit of the Company for that period;

(c) the Directors had taken proper and sufficient care 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 and detecting fraud and other irregularities;

(d) the Directors had prepared annual accounts on a going concern basis.

EMPLOYEES'' STOCK OPTION SCHEME - ESOS:

In accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the Company has instituted Employee Stock Option Scheme 2008 (Autoline ESOS 2008) pursuant to the Special Resolution passed by Shareholders at 12th Annual General Meeting held on 27th September, 2008. As per Autoline ESOS 2008, 1,60,000 Options were granted to 171 Permanent employees and 15,000 options were granted to 5 Independent Directors. During the year under review, 44,496 options were exercised and 5 employees holding 3,292 options resigned. These options are available for re-issue. The details of the same are given in the Annexure - C to this report.

The Certificate from the Company''s Statutory Auditors in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed as Annexure -D.

CORPORATE GOVERNANCE:

Your Company has complied with the mandatory provisions of Clause 49 of the Listing Agreement relating to Corporate Governance, as amended from time to time. A separate section on Corporate Governance forms part of the Annual Report and the Certificate from the Company''s Statutory Auditors in terms of Clause 49 of the Listing agreement with Stock Exchanges is annexed as Annexure - E.

AUDITORS:

M/s. K V M D S & Associates, Chartered Accountants, Pune, Auditors bearing the FRN No, 121347W who are the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint them to examine and audit the accounts of the Company for the FY. 2013-14. M/s. K V M D S & Associates, have under Section 224(1) of the Companies Act, 1956, furnished a certificate of their eligibility for re-appointment.

AUDITORS'' REPORT:

The observations made in the Auditors'' Report, read together with the relevant notes thereon, are self-explanatory and hence does not call for any comments under Section 217 (3) of the Companies Act, 1956.

COST AUDITORS:

As per the requirement of the Central Government and pursuant to Section 233B of the Act, the audit of the cost accounts relating to Tractors and other motor vehicles (including automotive components) and Engineering machinery (including electrical and electronic product) is carried out every year. Pursuant to the approval of Ministry of Corporate Affairs, Mr. S.G Jog having registration No. 5599 was appointed as the Cost Auditors for auditing the Company''s cost accounts relating to the Company''s products for the F.Y 2012-13. An application has been made to the Central Government seeking their approval, for the appointment of Mr. S.G. Jog for auditing the Company''s Cost Accounts relating to the Company''s products for FY 2013-14. The Compliance Report for FY 2011-12 was filed by the Company on 21st December, 2012 well within the prescribed due date of 28th February, 2013. The Cost Audit Report for FY 2012-13 is expected to be filed within the prescribed time.

ACKNOWLEDGEMENTS:

The Directors would like to thank the investors, employees, customers, suppliers, bankers, all other business associates and various departments of Central Government and State Government for the continuous support extended by them to the Company and their confidence in its Management.



For and on behalf of the Board

Place : Pune (Prakash B. Nimbalkar)

Date : 18th May, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present their 16th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2012.

FINANCIAL RESULTS:

The financial highlights for the year under review compared to the previous financial year are given below:

(Rs. in Millions except EPS data)

Standalone Consolidated

PARTICULARS 31.3.2012 31.03.20 31.3.2012 31.03.2011

Revenue from operations (Net) 5840.59 4937.86 7483.52 6567.15

Earnings before Interest, Financial Charges, Depreciation, 650.51 596.07 782.52 741.03

Tax & Amortisation- EBIDTA

Less: Finance Cost 284.56 183.23 305.82 199.18

Less: Depreciation & amortization expenses 194.58 147.74 210.52 186.64

Add: Exceptional items 203.86 ---- 203.86 ----

Profit Before Tax 375.23 265.10 470.04 355.21

Tax Expense 40.50 64.49 75.15 73.15

Profit After Tax but before deducting minority interest (PAT) 334.73 200.61 394.89 282.06

Less : Minority Interest ---- ---- (1.86) 8.67

Profit Attributable to group ---- ---- 396.75 273.39

Earnings per Share (Basic) (in Rs.) 27.43 16.44 32.51 22.40

Earnings per Share (Weighted Average) (in Rs.) 27.43 16.44 32.51 22.40

DIVIDEND:

The Board of Directors has recommended a dividend of Rs. 4 per equity share (i.e. 40%) amounting to Rs. 56.74 Millions including Dividend Distribution tax, (Previous Year Rs. 3.00 per equity share (i.e. 30%) amounting to Rs. 42.70 Millions including Dividend Distribution tax.)

PERFORMANCE REVIEW (CONSOLIDATED BASIS):

- Revenue from operations (Net) increased by 13.95 % from Rs. 6567.15 Millions to Rs. 7483.52 Millions.

- Operating EBIDTA (Earnings before Interest, Financial Charges Depreciation, Tax & Amortisation) increased by 5.60 % from Rs. 741.03 Millions to Rs. 782.52 Millions.

- Profit before tax (PBT) increased by 32.32% from Rs. 355.21 Millions to Rs. 470.04 Millions.

- Profit after tax (PAT) increased by 45.12% from Rs. 273.39 Millions to Rs. 396.75 Millions.

OVERVIEW OF PROGRESS AT VARIOUS PLANTS:

A) Manufacturing facility at Chakan Unit II - Nanekarwadi, Chakan, India:

This particular plant has large press capacity varying from 500 Ton to 2000 Ton, inclusive of 2 nos. 1000 Ton Double Action Press Machines. During the financial year under review, your Company has installed 4 nos. 500 Ton presses to cater requirements of new projects. The total no. of presses installed in this plant are 17. Your Company has also set up a separate Die Maintenance area along with additional Die washing facility and additional EOT Crane to meet the quality requirements of OEMs and increase in number of large Dies for maintenance.

During the year under review, your Company has been awarded business from Mahindra Navistar Automotive Ltd. In the first phase, supply of press parts / assemblies required for its heavy commercial Vehicles started in this financial year with a dedicated assembly line set up. In the second phase, Mahindra will be awarding business for their new upcoming models of vehicles. The costing logic for commercial settlement is finalized and RFQs for new parts / assembly development for their new upcoming models are awaited.

Your Company has further commissioned a new welding Assembly line for Sub-structure Project of Tata Motors Ltd. (TML) for its medium Commercial vehicles. Pilot batch of 100 assemblies produced and sent to TML for their vehicle assemblies. Various other projects like Safari Merlin project, Xenon Euro 5 Project, Army Ambulance Project, and Mudguard Project etc. are also productionised in this financial year.

This particular plant is engaged in manufacturing of various sheet metal components along with major assembly lines for Structure Assembly, Door Assemblies, Roof panel, Vehicle Floors and other aesthetic items etc. for various models of Tata Motors - Winger, Aria, for Light Commercial Vehicles, Safari and various assemblies for Mahindra vehicles.

On future business development front, your Company is exploring the business possibilities with upcoming global automotive players like Foton, a Chinese Truck Maker, Jaguar Land Rover (JLR) etc. Initial visits from Foton and JLR have taken place and your Company is in further business discussions with them.

TOOL ROOM:

The State of the Art Tool Room is equipped with the best facilities for manufacturing various sheet metal large dies upto 4.5 Meters of world class quality along with in-house design facilities. (CAD/ CAM team of about 25 engineers). Your Company has manufactured various tools for domestic and international OEMs like - Tata Motors Ltd., General Motors- India, Bajaj Auto Limited, Diamler India, FIAT India Pvt. Ltd, Cummins USA, American Axle Manufacturing, Volkswagen, Ashok Leyland - Nissan, etc.

During this period, the tooling orders which were executed were valued at approximately Rs. 97.63 Millions.

B) Manufacturing facility at Chakan Unit III- Mahalunge - Chakan, India :

This unit manufactures Silencers, Tubular Cross Members, Exhaust Systems from Engine to Tailpipe for e.g. - Front Tube with Bellows, Middle Tube, Muffler, Pre-Silencer, Post- Silencer, Main Silencer, Tail Pipe etc. for Heavy Commercial Vehicles (HCVs), Light Commercial Vehicles (LCVs) as well as Passenger Cars and mainly supplies to Tata Motors Limited. This unit also manufactures Radiator tubes, CAC inlet & outlet tubes etc.

During the year, Exhaust system added of 180 HP vehicle with the silencer which are supplied to Asian Motors Works Ltd. Structural Assembly as well as Press Components, Sub-structure added in this year for TATA MARCOPOLO Buses for their Dharwad (Karnataka) Plant is also supplied from this location. It also manufactures required jigs, fixtures & small dies etc. and is technically equipped and has capability of designing and modification in products to suit customer requirements with Base Coat for painting. This unit has separate painting Booth for painting exhaust systems & Structural Assemblies, ETP plant to control effluents, for LPG line which is used for OVEN, Gas Detector for safety purpose, etc.

C) Manufacturing facility at Plot Nos. 5, 6 & 8, Rudrapur -Uttarakhand, India:

Considering the increase in volume of regular supplies and addition of new business at Uttarakhand, your Company has set up manufacturing facility at Plot No. 6, Sector 11, IIE, Rudrapur, SIDCUL, Uttarakhand which started its operations in the month of October, 2011. The Company has installed a small press shop and a welding set up to cater to the additional Press Part requirements and Welding Assembly requirements as per requirements of Tata Motors Ltd.

Your Company has already set up manufacturing facilities located at Plot Nos. 5 & 8, Sector 11, IIE, Rudrapur, SIDCUL, Uttarakhand which manufactures various sheet metal components and Welded Assemblies. Major Assemblies being Ace Load Body, Assembly Front Door inner - Ace 0.75 ton & Super Ace, ZIP, IRIS, Panel Front Door Outer - Ace 0.75 ton & Super Ace, Assembly Front wall - Super Ace & Venture, Sub frame Assembly - Venture, Load Floor Assembly -ZIP, Hinges - Ace Family etc.

These units supply to Tata Motors Ltd. for domestic as well as export vehicles i.e. Ace (0.75 Ton) , Ace Magic, Super Ace, Venture, Magic IRIS, Ace ZIP etc. and is expected to take care of the large volume growth at Uttarakhand. Further these units supply Assembly Axle Beam for Ace - 0.75 ton and 1 ton to American Axles, Uttarakhand.

At Plot No. 8, your Company have installed the press shop which consists of 10 large presses ranging from 400 tons to 1200 tons and 13 medium presses ranging from 60 tons to 350 tons. The Capacity utilization of these presses is around 75%. (with operating efficiency of 85%).

In April, 2011, Plot No. 5 commenced the production of IRIS and ZIP Vehicles with 150 vehicles per month and have achieved a daily production level of 200 per day as on date and having capacity of ramping upto 300 vehicles per day, as per customer requirement by the end of this year.

Your Company has also been invited by Tata Motors Ltd. to manufacture high deck load body for its Tata Ace, which was designed & developed by wholly owned subsidiary Company - Autoline Design Software Limited. The said design has been approved by Tata Motors Ltd and protobuilds have been submitted for its evaluation. The Semi- Automated Assembly line is ready with a capacity to produce 400 Nos. per day. The Commercial Production is likely to start from 1st November, 2012.

D) Manufacturing facility at Plot No. E-12-17 (7), MIDC, Bhosari, Pune, India:

Your Company has set up additional manufacturing facility at Plot No. E-12-17 (7), MIDC, Bhosari, Pune (Adjacent to Plot No. E-12-17 (8), MIDC, Bhosari, Pune). The Construction was started from January, 2011 and completed by end of November, 2011. The Company has started its production for Volkswagen & Daimler and other OEMs. The press line of 6 Presses with capacity from 63 Ton to 350 Ton as well as 5 Ton overhead crane & 200 CFM compressor have been installed. Two assemblies have been set up for Volkswagen (i.e. ASM Pedal Cluster Brake/ ETC & ASM Pedal Cluster Clutch) and four assemblies for Daimler ( i.e. Clutch for 9 Ton, Clutch for 12 Ton, Cab Stay & Cab Tilt for 9 Ton &12 Ton).

E) Manufacturing facility at Plot No. E-12-17 (8), MIDC, Bhosari, Pune, India (formerly known as Nirmiti Autocomponents Pvt. Ltd.) :

This world class facility manufactures & supplies Pedal Control Systems (Foot Control Mounting), Parking Brake, Door Hinges, Mechanical Jacks and other Small Mechanical Assemblies to domestic and International OEMs like TATA Motors Ltd., General Motors India & Korea, Volkswagen India, Daimler India Commercial vehicles (Bharat Benz) and Ashok Leyland - Nissan etc. This facility has been certified EmS 14001, OHSAS 18001 and TS 16949 and comply with highest and stringent quality standards of the international OEMs. In-addition, this facility has also been qualified for General Motor's QSB and Volkswagen's formal Q Certification. This facility is equipped with a dedicated state of the art testing facility required for validating the safety of the critical product range which are being manufactured at this plant. This facility exports the GM Mini pedal systems to Korea as a part of GM global supply as single source with '0' PPM for pedal systems.

New assemblies (all single source from your Company) introduced during the year are as under:

1. Ashok Leyland-Nissan "Dost" pedal system (BC pedal) & "Dost" hinge assembly.

2. General Motor's M300 Beat diesel pedal system, General Motor's M200 Spark pedal system.

3. Tata Motor's Penguin parking brake, TML Penguin pedal system (with TMC mounting), TML Indica Vista Quadra-jet pedal system, TML Aria pedal system, TML Sumo Victa (DI-BS IV) pedal system.

F) Setting up manufacturing facility at Dharwad, Karnataka:

The Company proposes to set up manufacturing facility at Dharwad for Tata Motors Limited's expansion of capacity for IRIS & ZIP and other new models. Tata Motors Ltd has started its production of ZIP in the current financial year with support from Uttarakhand plants. Your Company proposes to invest approximately Rs. 50 Crores in a phased manner to achieve production of 1200 per day of ZIP and IRIS vehicles during next 2-3 years as per requirements of Tata Motors Ltd. For this purpose, land is being provided by Tata Motors in their vendor park at Dharwad. Till such time, your Company owned 2 acres of land near Tata Motors Ltd's factory at Dharwad, alongwith a rented shed, will be used to assemble the components being supplied by your Company at present for same vehicle viz: ZIP at Pantnagar, Uttarakhand.

G) Autoline Industrial Parks Limited - (AIPL):

AIPL is continuing to explore the possibilities of a sale/ joint development in a manner most beneficial to all stakeholders. Negotiations are at different stages with few reputed corporate developers. Further, efforts for sale of land in parcels after part development are also being explored to maximize returns.

The process has got delayed due to non-receipt of certain permissions from the State Government, which seems to be in no hurry and is taking its own sweet time.

H) Autoline Design Software Limited, India: (ADSL)

R&D Initiatives and/or technological advancements during the year and its benefit to Autoline Industries Ltd and OEMs.:

1) Design concept proposed to TATA MOTORS as VAVE for their existing SCREW JACK for weight reduction.

ADSL have optimized the design by integrating the parts and reducing the number of components in the assembly and also used the optimum material thickness to satisfy the given loading conditions.

Design Proposal Details:

Existing jack weight: 1.50 Kg

Autoline Jack Design weight: 1.28 Kg

(% reduction in weight: 14.66 %)

Existing Jack: no. of components: 16 Autoline design: no. of components: 13 (% reduction in no. of components: 18.75%)

Our VAVE proposal has been appreciated and business is awarded to Autoline Industries Ltd.

2) CAE - Initiative

The mass optimization of 25% per seat of a two wheeler for VARROC has been achieved. The mass optimization done by taking the design considerations in to account. The mass optimization process with the help of CAE tools helped to reduce the overall tool modifications & hence the cost of modifications.

3) The complete analysis of TATA HI-DECK LOAD BODY was done and the suggested design modifications helped to reduce the no. of trials to prove the product validation. Warranty exposure is reduced by identifying and eliminating potential problems. When properly integrated into product and manufacturing development, CAE enabled earlier problem resolution, which reduced the costs associated with the product lifecycle.

4) The Non-linear analysis of small assemblies like parking break, clutch pedal and brake pedal of GM, TATA MOTORS and ASHOK LEYLAND is carried out to achieve optimal design. Evaluated and refined analysis using computer simulations rather than physical prototype testing helped to reduce the efforts for the design modifications and development process. The results are 85-90% in relation with physical testing.

5) The optimization of heavy vehicle bracket for an excitation load is done. ADSL have presented this analysis in Altair national level paper seminar (HTC-2012 ) at Bangalore.

6) ADSL Structural design team has :

- Done the design of High deck load body of LCV for one of the largest OEM in India and also supported Autoline Industries Ltd to set up the line for production. The products to be manufactured in a State -of- the Art Automated Assembly Line is to be launched in the market very shortly.

- Given design support to Autoline Industries Ltd. to develop Cab tilt & Cab stay. Analysis of manufacturing feasibility of the same. Suggesting design modifications to improve the product life cycle & better functioning of the Cab tilt & Cab stay for an International OEM.

ADSL styling team has come with styling solutions for Helmets, lighting systems, Two wheelers, concept design for interior & exterior for 4 wheelers & concept design for Consumer Goods. SMA team has been instrumental in providing latest Pedal Systems, Jacks & Parking Brakes for leading automobile manufacturers globally like General Motors, Ford, Chrysler, Fisker, Ashok Leyland-Nissan & Daimler etc. ADSL has also been able to get a global order working closely with DEP Autoline Inc, USA for a European Auto manufacturer.

7) ADSL is also working closely with a leading Automobile OEM for conversion of an existing SEDAN to a LOAD CARRIER with minimum changes and cost effectiveness in close co-operation with DEP Autoline Inc, USA.

I) Autoline Industries, Inc., Butler, Indiana, USA: (Autoline -Butler)

1) During the year under review, Autoline -Butler emerged as a key player in the Global Mechanical Park Brake segment. The Company was awarded with a USD 92 Million contract over a 6 year period supplying over 1.4 Million park brakes globally from Europe, China, Korea and USA. Your Company will now expand into these geographies and start servicing global OEMs in these regions. Additionally, your Company has secured USD 18 Million contract for supplying park brakes in the US for a global medium sized car starting in 2016.

2) During the year under review, your Company launched a new 5 year Ford Pedal program for a small size SUV supplying over 340,000 units / year. The annual sales is USD 4.2 Million. Additionally a small luxury sedan pedal program was launched for GM supplying 140,000 units / year.

3) A chassis spare tyre kit program was launched supplying 350,000 units / year at an estimated value of USD 1.2 Million.

Your Company, through Autoline Industries Inc. USA, proposes to start operations in Europe, China and expand operations in South Korea, to support a Global Small Car Program of an International OEM.

J) SZ Design Srl & Zagato Srl ("ZAGATO") Milan, Italy :

The net worth of the SZ Design Srl Milan, Italy has been eroded due to various write offs. The original promoter of SZ Design, Srl and ICON Developments, SA has initiated Arbitration Proceedings against Koderat Investments Limited and 3 of its Directors and first Arbitration hearing was held in Milan, Italy on 19th November, 2010 to decide procedure and the next Arbitration meeting was held in 2nd week of September, 2011. No further steps have been taken till date and no further action is expected, as advised by our Lawyers in Italy.

The Concordato Preventivo procedure under Italian Laws, originally scheduled on 20th September, 2011 was postponed to 20th October, 2011 and was finally held on 9th November, 2011. At the hearing held on 9th November, 2011 the required majorities for the approval of the Concordato Preventivo under the Italian Laws have been reached, although the Tax Authorities have again voted against the proposal. At the meeting held on 19th January, 2012, the hearing for the approval of the Concordato Preventivo under the Italian Laws has been again postponed to 23rd February, 2012 as the Tax Authorities & one of the Creditors have voted against the proposal. SZ Design Srl was granted time upto 10th February 2012 to file reply to such oppositions. After the hearing of 23rd February 2012, the Bankruptcy Tribunal has reserved the decision. The Company will take suitable action after the decision.

The Tribunal of Milan has not yet issued a decision on the approval or rejection of the Arbitration Proceedings and till date the decision on Concordato Preventivo has not yet finalised. The final decision will be known only by end of September, 2012.

K) EXPORTS:

Your Company now exports Thirty one Sheet Metal Parts & Assemblies to Cummins Power Generation USA and Cummins Filtration USA. During the financial year 2011-12, your Company has exported worth USD 1.32 Million (Rs. 62.45 Million). There was a 102% growth in exports as compared to the financial year 2010-11. During the financial year 2011-12, 6 new parts have been added for Cummins Filtration USA.

In the current financial year 2012-13, Exports to Cummins is expected to improve by 28%. Running parts will achieve a business of USD 1.97 Million (Rs. 88.65 Million) and new parts will add USD 0.18 (Rs. 8.1 Million).

During the period under review, your Company, also exported to South Korea and others Rs. 6.54 Millions worth of Components.

TRANSFER TO GENERAL RESERVES:

During the year, a sum of Rs. 33.50 Millions has been transferred to the General Reserve Account.

FIXED DEPOSITS:

During the year, your Company has not accepted any deposits under the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1975 framed thereunder. However during the year, the Company has repaid fixed deposits of Rs. 23 Millions along with interest thereon, on due dates and has no overdue deposits and unclaimed deposits. The Company discontinued the acceptance and renewal of fixed deposits from public.

CONSOLIDATED ACCOUNTS:

In accordance with the requirements of Accounting Standard AS - 21, prescribed by the Institute of Chartered Accountants of India, the consolidated accounts and cash flow are annexed to this report.

Pursuant to provisions of Section 212 (8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its General Circular No. 02/ 2011 dated February 8, 2011 has granted a general exemption subject to certain conditions to holding companies from complying with the provisions of Section 212 of the Act which requires the attaching of the Balance Sheet, Profit & Loss Account and other documents of its subsidiary companies to its Balance Sheet. Accordingly, the said documents are not being included in this Annual Report. The main financial summaries of the subsidiary companies are provided under the section 'Subsidiary Companies: Financial Highlights 2011-12' in the Annual Report. The Company will make available at any point of time the said annual accounts and related detailed information of the subsidiary companies upon request by any member of the Company or its subsidiary companies and the same will also be kept open for inspection by any member at the Head Office of the Company and the subsidiary companies.

MEGA PROJECT STATUS:

On 31st December, 2011, your Company received Eligibility Certificate for Chakan Project ('Mega Project') located at S. Nos. 313/314, Nanekarwadi, Chakan, Tal: Khed, Dist: Pune - 410 501, [a 'C' Zone under the Package Scheme of Incentives (PSI) 2007] from Directorate of Industries, Government of Maharashtra. As per the Scheme, your Company has been sanctioned Industrial Promotion Subsidy (IPS) amounting to Rs. 77.38 Crores to be availed over a period of 7 years starting from 1st October, 2009. The Company received a credit of Rs. 10.10 Crores on 11th June, 2012 towards IPS (being 85% of admissible IPS of Rs. 3.66 Crores and Rs. 8.22 Crores for the F.Y. 2009-10 and 2010-11 respectively). Further, your Company has also submitted a claim for IPS for F.Y. 2011-12 and a credit of Rs. 7.22 Crores (being 85% of admissible IPS of Rs. 8.49 Crores) is expected to be received shortly.

Further, your Company plans to submit the claims out of the total entitlement of Rs. 77.38 Crores on a yearly basis from Financial year 2012-13 onwards (to be claimed within 6 months of the end of each financial year).

Domestic Companies:

i) Autoline Design Software Limited :

The revenue from operations including exports was Rs. 31.34 Millions (Previous Year Rs. 23.03 Millions). Profit before tax stood at Rs. 5.52 Millions (Previous Year Rs. 2.30 Millions). Profit after tax was Rs. 3.48 Millions (Previous Year Rs. 1.44 Millions).

ii) Autoline Industrial Parks Limited :

During the year under review, your Company acquired the balance land. The business operations have not yet started. During the year, the Company incurred a loss of Rs. 3.80 Millions.

Foreign Companies:

i) Autoline Industries, INC. USA :

During the period under review, the turnover increased to USD 348,02,137 amounting to Rs. 1677.90 Millions (Previous year turnover was USD 315,83,076 amounting to Rs. 1440.62 Millions). During the period, the Company achieved net profit of USD 13,99,121 amounting to Rs. 65.84 Millions (previous year net profit was USD 13,75,884 amounting to Rs. 63.04 Millions).

ii) Koderat Investments Limited:

Koderat Investments Limited, Cyprus a wholly owned subsidiary of the Company, is acting as a Special Purpose Vehicle (SPV). During the period, the Company incurred Loss of Euros 85,484 amounting to Rs. 5.35 Millions. (Previous year loss was Euros 12,122 amounting to Rs. 0.73 Millions).

RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION:

i) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo:

Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given as an Annexure - A to this report.

ii) Particulars under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975:

The particulars required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is given as Annexure- B to this report.

DIRECTORS:

During the financial year 2011-12, Cmde. N. Ravindranathan IN. (Retd.) and Mr. Ajit Karnik, Non- Executive and Independent Directors of the Company retiring by rotation at the 15th Annual General Meeting (AGM) held on 30th December, 2011, did not seek re-appointment vide their letters dated 29th December, 2011. Accordingly the Shareholders at the said AGM did not re-appoint them as Directors of the Company and they ceased to be Directors with effect from 30th December, 2011.

Mr. Prakash Nimbalkar and CA. Vijay Thanawala retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, state and confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards had been followed and that there are no material departures;

(b) the Directors had selected such accounting policies and applied them consistently and 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 31st March, 2012 and of the Profit Account of the Company for that period;

(c) the Directors had taken proper and sufficient care 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 and detecting fraud and other irregularities;

(d) the Directors had prepared annual accounts on a going concern basis.

EMPLOYEES' STOCK OPTION SCHEME - ESOS

In accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the Company has instituted Employee Stock Option Scheme 2008 (Autoline ESOS 2008) pursuant to the Special Resolution passed by Shareholders at 12th Annual General Meeting held on 27th September, 2008. As per Autoline ESOS 2008, 1,60,000 Options were granted to 171 Permanent employees and 15,000 options were granted to 5 Independent Directors. During the year under review, 10 employees holding options resigned. The number of options lapsed up to year ended 31st March, 2012 is 11460. These options are available for re-issue. The details of the same are given in the Annexure - C to this report.

The Certificate from the Company's Statutory Auditors in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed as Annexure - D.

CORPORATE GOVERNANCE:

Your Company has complied with the mandatory provisions of Clause 49 of the Listing Agreement relating to Corporate Governance, as amended from time to time. A separate section on Corporate Governance forms part of the Annual Report and the Certificate from the Company's Statutory Auditors in terms of Clause 49 of the Listing agreement with Stock Exchanges is annexed as Annexure - E.

AUDITORS:

M/s. Gujar Rawat Sheth & Associates, Chartered Accountants, Pune, Auditors of the Company will retire from the office of the Auditors at the forthcoming Annual General Meeting and are being eligible offer themselves for re-appointment. The name of the said firm has been changed to M/s. K V M D S & Associates, Chartered Accountants, Pune with effect from 19th July, 2012. The Company has received letters from M/s. K V M D S & Associates, Chartered Accountants, Pune to the effect that their re-appointment, if made would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act. The Statutory Auditors, if appointed, shall hold the office until the conclusion of the next Annual General Meeting of the Company.

AUDITORS' REPORT:

The observations made in the Auditors' Report, read together with the relevant notes thereon are self explanatory and hence does not call for any comments under Section 217 (3) of the Companies Act, 1956

COST AUDITORS:

As per the Order of the Ministry of Corporate Affairs, the Cost Audit has become applicable for the Company. Accordingly, the Company has appointed Mr. S.G. Jog, Cost Accountant, Pune as the Cost Auditors for the financial year 2012-13.

ACKNOWLEDGEMENTS:

The Directors would like to thank the investors, employees, customers, suppliers, bankers, all other business associates and various departments of Central Government and State Government for the continuous support given by them to the Company and their confidence in its Management.

For and on behalf of the Board

Place : Pune (Prakash B.Nimbalkar)

Date : 19th July, 2012 Chairman

 
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