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Directors Report of Automotive Axles Ltd.

Mar 31, 2017

To the Members,

The Directors have the pleasure in presenting the 36th Annual Report on the business and operations of your Company together with the Audited Statements of Accounts for the financial period ended March 31, 2017:

FINANCIAL HIGHLIGHTS:

(Rs. in million)

Particulars

2016-2017

2015-2016

Total Revenue

11,488.17

10,875.44

Profit before depreciation & tax

1133.23

919.94

Less : Depreciation, amortization & Loss on assets discarded

394.63

404.70

Tax expenses

252.81

167.50

Profit After Tax

485.79

347.74

Balance of Profit from Previous Year

2546.45

2,298.81

Profit available for appropriation

3032.25

2,646.55

Appropriations :

Dividend for the year

-

83.12

Tax on dividend

-

16.98

Transfer to General Reserve

-

-

Surplus retained in Profit & Loss Account

3032.25

2,546.45

DIVIDEND

The Board, at its meeting held on May 18, 2017, is pleased to recommend a dividend of Rs.8/- per Equity Share of the face value of Rs.10/- each for the financial year ended March 31, 2017 subject to the approval of shareholders at the ensuing Annual General Meeting to be held on Friday, August 18, 2017.

The total amount of Dividend aggregates to Rs.120.90 million, excluding Dividend Distribution Tax.

The register of members and share transfer books will remain closed from August 16, 2017 to August 18, 2017 (both days inclusive) for the payment of final dividend to the shareholders of the Company, for the year ended on March 31, 2017.

The Dividend will be paid to members within 30 days from the date of declaration of dividend to the Members whose names appear in the Register of Members as on August 15, 2017.

Transfer of Amount to Investor Education & Protection Fund

In terms of the provisions of the Companies Act, 2013 and Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 a sum of Rs.133,753/- which is unpaid/unclaimed dividends pertaining to the FY 2008-09 was transferred to the Investor Education and Protection Fund during the year.

PERFORMANCE OF THE COMPANY

The Sales and other income for the financial year under review was Rs.11,488.17 Million as against Rs.10,875.44 Million for the previous financial year. The Profit before tax (PBT) was Rs.738.60 Million and the Profit after tax (PAT) was Rs.485.79 Million for the financial year under review, as against Rs.515.24 Million and Rs.347.74 Million respectively for the previous financial year.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2017 stood at Rs.151.12 Million. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options nor sweat equity.

DEPOSITS

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 during the year.

TRANSFER TO RESERVE

There is no transfer to General Reserve Account duri ng the year under review.

LISTING

The equity shares of the Company are listed with BSE Limited and National Stock Exchange of India Limited. There are no arrears on account of payment of listing fees to the Stock Exchanges.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

As on March 31, 2017 there were seven (7) Directors on the Board of your Company, consisting of four (4) Independent Directors, two (2) Non-Executive Directors of whom one is the Chairman and one (1) Executive Director. None of the Directors have resigned or appointed during the year under review.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Narayanaswamy Muthukumar, President & Whole Time Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

Mr. S Ramkumar, Chief Financial Officer & Company Secretary retired from his office with effect from April 30, 2016 and Mr. Ranganathan Sankaran has been appointed as Chief Financial Officer of the Company with effect from April 1, 2016.

Ms. Thejeshwini. N has been appointed as Company Secretary of the Company with effect from November 5, 2016.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence and that there has been no change in the circumstances which may affect their status as independent director during the year as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure requirements) Regulations, 2015.

BOARD EVALUATION:

The Companies Act, 2013 states that a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandates that the Board shall monitor and review the Board evaluation framework. Pursuant to these provisions, the Company has developed a framework for the Board evaluation. The framework includes evaluation on various parameters such as information flow, Board dynamics, decision making, company performance and strategy, Board and committee’s effectiveness and peer evaluation.

The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

During the year 2016-17, Independent Directors met on February 6, 2017, discussed and reviewed the below:

- Performance of Non Independent Directors

- Performance of the Chairman

- Performance of the Board Committees

- Discussed on the quality, quantity and timeliness of flow of information between the Company management and the Board Members

- Overall performance of the Company

FAMILIARIZATION PROGRAMME FOR THE BOARD MEMBERS

Your Company has in place a structured induction and familiarization programme for all its Directors including Independent Directors and new appointee(s) to the Board. Through such programs, the Directors are briefed on the background of your Company, their roles, rights, responsibilities, nature of the industry in which it operates, business model operations, ongoing events etc.

The Board members are provided with the necessary documents, brochures, reports and internal policies to enable them to familiarize with the Company’s procedure and practice.

Periodic presentation are made at the Board Meetings, Board Committee Meetings and Independent Directors Meetings on business and overall performance updates of the Company, business strategy and risk involved.

The details of programs for Familiarization for Independent Directors are posted on the website of the Company and can be accessed at: www.autoaxle.com/Directors.aspx

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, your Directors make the following statements:

(a) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

(b) we 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 as at March 31, 2017 and of the profit of the company for the year ended on that date;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

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

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

AUDITORS & AUDITORS’ REPORT a. Statutory Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountant, Bangalore (Firm Registration No.008072S) were appointed as auditors of the Company since its inception. They were last re-appointed as auditors of the Company at 33rd Annual General Meeting held on February 5, 2015 as per the Companies Act, 2013. Currently, they are holding office of the auditors up to the conclusion of the 36th Annual General Meeting. As per second proviso to Section 139(2) of the Companies Act, 2013, (the Act), a transition period of three years from the commencement of the Act is provided to appoint a new auditor if the existing auditor’s firm has already completed the tenure as per the provisions of the Companies Act, 2013.

Accordingly, as per the said requirements of the Act, M/s.S R Batliboi & Associates LLP Chartered Accountants (Firm Registration No. 1 01 049W/E300004) are proposed to be appointed as auditors for a period of 5 years commencing from the conclusion of 36th Annual General Meeting till the conclusion of the 41st Annual General Meeting, subject to ratification by shareholders every year, as may be applicable, in place of M/s. Deloitte Haskins & Sells, Chartered Accountants.

M/s. S R Batliboi & Associates LLP, Chartered Accountants, have consented to the said appointment, and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

The Audit Committee and the Board of Directors recommend for the appointment of M/s. S R Batliboi & Associates LLP, Chartered Accountants, as statutory auditors of the Company from the conclusion of the 36th Annual General Meeting till the conclusion of 41st Annual General Meeting, to the shareholders.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Further no frauds have been reported by the Auditors in their reports.

b. Internal Auditor

The Audit Committee and the Board of Directors recommend for the re-appointment of M/s. Price Waterhouse & Co. Bangalore, LLP Chartered Accountants, as Internal Auditors of the Company for the Financial Year 2017-18.

c. Secretarial Auditor

Pursuant to the provisions of the Section 204 of the Companies Act, 2013 and the rules made there under and based on the recommendations of the Audit Committee, CS Pracheta M, Practicing Company Secretary has been appointed to conduct Secretarial Audit of the Company’s secretarial and other related records for the Financial year 2016-17.

The Secretarial Audit Report for the financial year ended March 31, 2017 in form MR-3 is appended to this report under Annexure - A.

Explanation for observations made by the Company Secretary in practice:

The compliance under Secretarial Standards on meetings of the Board of Directors have been largely met with but for certain improvements on the procedural aspects which would be complied henceforth.

INTERNAL FINANCIAL CONTROL

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

CORPORATE GOVERNANCE

Corporate Governance is about maximizing the value and to ensure fairness to all its shareholders. Your Company is renowned for its exemplary governance standards and believe that sound corporate governance is critical to enhance and retain investor trust. Your Company ensures that performance is driven by integrity.

The Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 [SEBI (LODR Regulations), 2015] have strengthened the governance regime in the country and your Company is in compliance with the governance requirements provided under the law both in letter and spirit. The Board also exercises its fiduciary responsibilities in the widest sense of the term.

Your Company has in place all the statutory committees required under the law. Details of the Board Committees along with their terms of reference, composition and meeting of the Board and its Committees held during the year are provided in the Corporate Governance Report which is presented in a separate section forming part of the Annual Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) [(Schedule V (E)] of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

MEETINGS OF THE BOARD

During the financial year the Board met four times, details of which are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days as prescribe under the Companies Act, 2013.

COMMITTEES OF THE BOARD

Your Company has the following committees which have been established as a part of the corporate governance practices and are in compliance with the requirements of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015.

- Audit Committee

- Nomination and Remuneration Committee O Stakeholders Relationship Committee

- Corporate Social Responsibility Committee

- Risk Management Committee

The details with respect to the compositions, roles, number of meetings held during the year is detailed in the corporate governance report of the Company, which forms a part of this Board’s Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are appended as Annexure - B to this report.

PARTICULARS OF REMUNERATION OF DIRECTORS & CERTAIN SPECIFIED EMPLOYEES:

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the ratio of remuneration of each Director to the median of the employees’ remuneration, a statement containing the names of top ten employees in terms of remuneration drawn and every employee who is employed throughout the financial year and was in receipt of a remuneration of Rs.102 lacs per annum or more and of every employee who is employed part of the financial year, was in receipt of remuneration of Rs.8.50 lacs or more per month is appended as Annexure - C.

EXTRACT OF ANNUAL RETURN 2016-17

The detail forming part of the extract of Annual Return in MGT - 9 is appended as Annexure - D.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for furtherance of business of the borrowing companies.

Your Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or persons and has not made any investment in the securities of any other body corporate.

POLICY ON DIRECTORS’ APPOINTMENT & REMUNERATION

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. On March 31, 2017, the Board consists of seven members, one of whom is executive or whole-time director, two are non executive directors and four are independent directors out of which one is Independent Woman Director.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration.

The Nomination and Remuneration policy is appended as Annexure - E to this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (RPT)

The related party transactions that were entered into during the financial year were in the ordinary course of business and on the arm’s length basis.

All related party transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions, which are foreseen and of repetitive nature.

For transactions with Meritor HVS (India) Limited, the Company has obtained shareholder’ approval in their 33rd Annual General Meeting held on February 5, 2015 for transaction value annually of Rs.25,000 Million for a period of five (5) financial years starting from October 1, 2014.

Further, all transactions entered into pursuant to the omnibus approval so granted are reviewed and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

In accordance with the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 your Company has formulated a Policy on Related Party Transactions which is also available on Company’s website at www.autoaxle. com/Policy.aspx.

Related Party disclosures as per AS-18 have been provided in Note 32 to the financial statement.

The particulars on RPTs in AOC 2 is annexed to the Report as Annexure - F.

RISK MANAGEMENT SYSTEM

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The risk governance structure of the Company is a formal organisation structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analysing the latest trends in risk information available internally and externally and using the same to plan for risk activities.

The Company has set up a Risk Management Committee to review the risks faced by the Company and monitor the development and deployment of risk mitigation action plans and the status is updated to the members of the Audit Committee and the Board of Directors on quarterly basis.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has been carrying out various Corporate Social Responsibility (CSR) activities. These activities are in terms of section 135 read with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. During the year the Company has spent Rs.3.83 Million on various CSR activities.

The Annual Report on CSR activities that includes details about the CSR policy developed and implemented by the Company and CSR initiatives taken during the year is appended to the Report as Annexure - G.

STATE OF COMPANY’S AFFAIRS

Discussion on state of Company’s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

VIGIL MECHANISM

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015. Under the policy the Directors and Employees are free to report any violation of the applicable laws and regulations and the code of conduct of the Company. The reportable matters are to be disclosed to the Audit Committee. During the year under review, the Company has not received any complaints under the said mechanism.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe workplace for every individual working in Company’s premise through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no adverse material changes or commitments occurred after March 31, 2017 which may affect the financial position of the Company or may require disclosure.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Your Company does not have any subsidiary, joint venture nor any associates.

CHANGE IN THE NATURE OF BUSINESS

There are no change in the nature of business of your Company.

AWARDS AND RECOGNITION

During the year 2016-17, your Company was conferred with awards and recognition as listed below:

1. Machinist Super Shop Floor 2016 Award in Green Manufacturing Category on May 26, 2016 at Pune.

2. During Quality Circle Forum of India (QCFI) 7th Regional Convention Quality Concepts-Kaizen Award held on May 22, 2016 at Vidyavardhaka College, Mysuru your Company bagged 13 gold awards, 1 silver award and 1 bronze award.

3. Your Company won Quality Circle Forum of India (QCFI) - Chapter Convention of Quality Concepts Kaizen Awards at Coimbatore on October 15, 2016 and QCFI - CCQC 2016 Kaizen Awards at Bangalore on October 23, 2016.

Acknowledgements

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, bankers, business associates, regulatory and government authorities for their continued support.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended by Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors

Place: Pune Dr. B. N. Kalyani

Date: 18th May, 2017 Chairman


Mar 31, 2016

The Directors have the pleasure in presenting the 35th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the financial period ended 31st March 201 6:

FINANCIAL HIGHLIGHTS:

2015-2016 2014-2015

Particulars (12 months) (6 months)

Total Revenue 10,875.44 4,617.03

Profit before depreciation & tax 919.94 338.03

Less : Depreciation, amortization & Loss on assets discarded 404.70 173.21

Provision for Taxation 67.50 59.40

Profit After Tax 347.74 105.42

Balance of Profit from Previous Year 2,298.81 2,223.20

Profit available for appropriation 2,646.55 2,328.62

Appropriations :

Dividend for the year 83.12 15.11

Tax on dividend 6.98 4.16

Transfer to General Reserve - 10.54

Surplus retained in Profit & Loss Account 2,546.45 2,298.81

DIVIDEND

Your Directors are pleased to recommend a Dividend of X 5.50 per equity share of face value of X 1 0/- each for the period ended 31st March 2016 aggregating to X 83.12 million, excluding Dividend Distribution Tax.

The Dividend, subject to the approval of Members at the Annual General Meeting to be held on 12th August 2016, will be paid within 30 days from the date of declaration of dividend to the Members whose names appear in the Register of Members, as on the date of book closure, i.e. from 10th August 201 6 to 12th August 201 6 (both days inclusive).

In terms of the provisions of the Companies Act, a sum of X 304,635/- of unpaid/unclaimed dividends was transferred during the year to the Investor Education and Protection Fund.

PERFORMANCE OF THE COMPANY

The Sales and other income for the financial period (1 2 months) under review wasRs, 1 0,875.44 Million as against Rs,4,61 7.03 Million for the previous financial year (6 months). The Profit before tax (PBT) of X 51 5.24 Million and the Profit after tax (PAT) of X 347.74 Million for the financial period under review, as against Rs, 164.82 Million and Rs, 105.42 Million respectively for the previous financial year.

The Company in its journey towards world class manufacturing has further improved the quality standards towards Zero Chips, Oil & Coolant (COC) initiatives implemented last financial year in all plants, to make it clean from Chips, Oil and Coolant on floor. Further, to improve the standards of Organization Health and Safety, your organization implemented OHSAS 18001 and was certified for OHSAS 1 8001 2007 which is valid for three years.

BOARD OF DIRECTORS

Ms.Sudhasri.A resigned from the Board due to other pressing engagements effective 10th February 2016. The Board places its appreciation for her valuable contributions made during her tenure.

Pursuant to Sections 149 and 1 52 of the Companies Act, 201 3 and in terms of Regulation 1 7 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors has at its meeting held on 1 0th February 201 6, appointed Ms.Supriti Bhandary as an additional director, who is being proposed to be appointed as an Independent Director with effect from the date of ensuing Annual General Meeting. The requisite resolution for approval of her appointment as Independent Director is being proposed in the notice of the meeting for the approval of the members.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Joseph A Plomin, Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

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

FIXED DEPOSITS

Your Company has not accepted any Public Deposits under Chapter V of Companies Act, 201 3, during the year.

POLICY ON NOMINATION & REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) & OTHER EMPLOYEES

The Company has framed a policy on Nomination & Remuneration of Directors, KMP & other employees as per the requirement of the Companies Act, 2013 which formulates the criteria for determining qualifications, positive attributes & independence of a director and their remuneration. The Nomination and Remuneration Policy is annexed herewith as Annexure - A to this report.

AUDITORS & AUDITORS'' REPORT

The report given by the Statutory Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

M/s. Deloitte Haskins & Sells (Chennai), Bengaluru were appointed as Statutory Auditors of your Company in the Annual General Meeting held on 5th February 2015 for a term of three consecutive years. As per the provisions of Section 1 39 of the Companies Act, 201 3, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

No frauds have been reported by the Auditors in their reports.

The Secretarial Audit Report for 2015-16 in form MR-3 is annexed to this Report under Annexure - B

Explanation for observations made by the Company Secretary in Practice :

The compliances under Secretarial Standards on meetings of the Board of Directors have been largely met with but for certain minor improvements which would be complied henceforth.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under and based on the recommendation from the Audit Committee, CS. Pracheta M, Practicing Company Secretary has been appointed by the Board to conduct the secretarial audit of Company''s secretarial and related records for the financial year 201 6-1 7.

CORPORATE GOVERNANCE

Your Company is renowned for exemplary governance standards since inception and continues to lay a strong emphasis on transparency, accountability and integrity.

The Companies Act, 201 3 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (LODR Regulations) have strengthened the governance regime in the Country. Your Company is in compliance with the governance requirements provided under the new law and has proactively adopted many provisions of the new law, ahead of time. Your Company is committed to embrace the new law in letter and spirit. In line with the requirements of new law, your Company has constituted Board Committees. Your Company has in place all the statutory committees required under the law. Details of Board Committees along with their terms of reference, composition and meetings of the Board and Board Committees held during the year, are provided in the Corporate Governance Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) (Schedule V(E)) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided as Annexure - C to this report.

ANNUAL RETURN 2015-16

The extract of annual return in MGT - 9 is annexed under Annexure -D

RELATED PARTY TRANSACTIONS (RPT)

In line with the requirements of the Companies Act, 2013 and LODR Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on Company''s website at www.autoaxle.com/Policy.aspx. This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on annual basis for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at Arm''s Length.

All Related Party Transactions entered during the year were in ordinary course of the business and on arm''s length basis. The particulars on RPTs in AOC 2 is annexed to the Report as Annexure E

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Disclosure on CSR has been annexed to the Report under Annexure F

PARTICULARS OF REMUNERATION OF DIRECTORS & CERTAIN SPECIFIED EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of certain employees, who are covered by the said rules, are set out in the Annexure G to the Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) we 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 the end of the financial year and of the profit and loss of the Company for that period;

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

(d) we have prepared the annual accounts on a going concern basis; and

(e) we 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) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RISK MANAGEMENT SYSTEM AND ITS POLICY

Your Company introduced the Risk Management System almost a decade back and it has attained the maturity whereby the Enterprise-wise Risk-log-cum-register is being maintained by the departmental head and is being periodically reviewed for adequacy and effectiveness by the Audit Committee and the Board. The Company''s Risk Management Committee is being assisted by Chief Risk-Coordinator. The Risk Management policy developed by the Company aims to cover all the business and other risks, which are revisited at reasonable intervals.

The Board level Committee on Risk Management is formed with the following directors as its members:

(a) Mr. B C Prabhakar, Chairman

(b) Dr. N Muthukumar, Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34(2)(e) of LODR Regulations, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

BOARD ANNUAL EVALUATION

The Nomination & Remuneration Committee arranges for a performance evaluation of the Board, its Committees and its individual Directors on an annual basis. The Committee will conduct an annual review of the role of the Board, assess the performance of the Board over the previous 12 months and examine ways of assisting the Board in performing its duties more effectively.

The review will include:

(a) comparing the performance of the Board with the requirements of the Act;

(b) examination of the Board''s interaction with management;

(c) the nature of information provided to the Board by management; and

(d) management''s performance in assisting the Board to meet its objectives.

A similar review will be conducted for each Committee by the Board with the aim of assessing the performance of each Committee and identifying areas where improvements can be made. The Nomination & Remuneration Committee will oversee the performance evaluation of the Senior Management Team. This evaluation is based on specific criteria, including the business performance of the Company, whether strategic objectives are being achieved and the development of management personnel.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Karnataka, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors

Place: Pune Dr. B.N. Kalyani

Date: 1 Oth May 201 6 Chairman


Sep 30, 2014

To the Members,

The Directors have the pleasure in presenting the 33rd Annual Report on the business and operations of the Company and the audited accounts for the financial year ended 30th September, 2014.

FINANCIAL RESULTS

(Rsin Million) Particulars 2013-2014 2012-2013

Profit before Depreciation & Tax 553.41 470.87

Less : depreciation & amortisation 294.79 285.29

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 76.83 58.60

Profit After Tax 181.79 126.98

Balance of Profit from Previous Year 2,103.79 2,024.87

Profit available for appropriation 2,285.58 2,151.85

Appropriations :

Dividend for the year 37.78 30.22

Tax on dividend 6.42 5.14

Transfer to General Reserve 18.18 12.70

Surplus retained in Profit & Loss Account 2,223.20 2,103.79

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was '' 7,576.72 Million as against '' 7,154.12 Million for the previous financial year. The Profit before Tax of '' 258.62 Million and the Profit After Tax of ''181.79 Million for the financial year under review as against '' 185.58 Million and '' 126.98 Million respectively for the previous financial year.

DIVIDEND

Your Directors are pleased to recommend a Final Dividend of '' 2.50 per Equity Share (25%) of the face value of '' 10/- each, aggregating to '' 37.78 (exclusive of tax on dividend) for the financial year ended on 30th September, 2014 for your consideration.

The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations. The Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

DIRECTORS

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Joseph A. Plomin Director of the Company, retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers him for re-appointment.

Mr. Marco Bassi was appointed as an Additional Director based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, in the place of Mr. Chris Villavarayan who resigned from the Board. The Board places its appreciation for the valuable contributions made by Mr. Villavarayan during his tenure. Mr. Bassi holds the office upto the ensuing AGM and his appointment is being sought to be regularised at the ensuing AGM.

Pursuant to Sections 149 and 152 of the Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Board of Directors has, at its meeting held on 25th November, 2014, appointed the existing Independent Directors Mr. B B Hattarki, Mr. B C Prabhakar, and Mr. Satish Sekhri as Independent Directors for a term of five consecutive years with effect from the date of ensuing AGM, subject to approval of shareholders in their Meeting. The requisite resolutions for approval of their appointment as Independent Directors are being proposed in the notice of the ensuing AGM for the approval of the members.

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.

The Company is required to appoint two more Independent Directors and a Woman Director on the Board. The Company is under the process of identifying suitable candidatures for appointment.

AUDITORS & AUDITORS'' REPORT

M/s Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company were holding office as Auditors, prior to the commencement of the Companies Act, 2013 ("the Act") and for more than 10 years now. In terms of the provisions of the Act and the related rules there under, in respect of rotation of auditors, M/s. Deloitte Haskins & Sells (Chennai), Bangalore are eligible for re-appointment for three consecutive financial years subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

The Directors, based on the recommendation of the Audit Committee, propose the appointment of M/s. Deloitte Haskins & Sells (Chennai), Bangalore for the period from the conclusion of ensuing 33rd AGM till the conclusion of the 36th AGM and seek authority for fixation of their remuneration for the year 2014-15.

The Company has received letter from Deloitte Haskins & Sells (Chennai), Bangalore to the effect that their appointment, if made, would be within the prescribed limits under the Companies Act, 2013, and the conditions prescribed read with the Rule 4 of Companies (Audit and Auditors) Rules, 2014 and that they are eligible for such appointment.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under and based on the recommendation from the Audit Committee, CS. Pracheta M, Practicing Company Secretary has been appointed to conduct a secretarial audit of Company''s Secretarial and related records for the financial year 2014-15. The Secretarial standards issued by the Institute of Company Secretaries of India (ICSI) from time to time are currently recommendatory in nature. The Company is, however, complying with most of them.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 along with the Rules there under and revised Schedule VII to the Act, concerning Corporate Social Responsibility (CSR), have been effective from 1st April, 2014. The Company being covered under the provisions of the said section has taken necessary initial steps in this regard. A committee of the Directors, titled ''Corporate Social Responsibility Committee'', has been formed by the Board in its meeting held on 29th April, 2014, consisting of the following Directors:

a. Mr. Amit B. Kalyani, Chairman

b. Mr. B. C. Prabhakar, Member

c. Mr. N. Muthukumar, Member

A policy on CSR has been formulated for the Company and was approved by the Board in its meeting held on 14th August, 2014.

CHANGE IN FINANCIAL YEAR

The new Companies Act, 2013 has mandated the financial year to be in line with the Section 2(41) of the Act which is April to March as against our financial

year October to September. The Act also gives two years'' timeline from the date of its notification i.e., 12th September, 2013. Hence, we had option either to close the year 2013-14 on 31st March, 2014 or to close the year 2014-15 on 31st March, 2015. The Board in its meeting held on 10th February, 2014 decided to close the financial year by 6 months from October 2014 to March 2015, so as to comply with the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company has adopted the Corporate Governance Policies and Code of Conduct which has set out the systems, processes and policy conforming to the best standards. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the dividend which remained unclaimed for a period of seven years has been transferred by the Company to the Investor Education and Protection Fund.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 21 7(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - A to this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto. Any member interested in obtaining such particulars, may write to the Company Secretary at the Registered Office of the Company.

During the year under review, pursuant to the new legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act 2013" introduced by the GOI, which came into effect from 9th December, 2013. The Company has constituted a Committee and framed a Policy on Prevention of Sexual Harassment at Workplace as per the applicable rules. So far no complaints have been received by the Committee.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended 30th September, 2014 the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) 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 as at 30th September, 2014 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts for financial year ended on 30th September, 2014 on a ''going concern'' basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the positive cooperation received from the Central Government, the Government of Karnataka, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

Your Directors wish to place on record their appreciation for the continued cooperation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors

Place: Mysuru B. N. Kalyani Date: 25th November, 2014 Chairman


Sep 30, 2013

To the Members,

The Directors have the pleasure in presenting the 32nd Annual Report on the business and operations of the Company and the accounts for the financial Year, ended 30th September, 2013.

FINANCIAL RESULTS

(Rs. in Million)

2012-2013 2011-2012

Profit before Depreciation & Tax 470.87 939.63

Less : depreciation & amortisation 285.29 273.88

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 58.60 215.57

Profit After Tax 126.98 450.18

Balance of Profit from Previous Year 2,024.87 1,795.43

Profit available for appropriation 2,151.85 2,245.61

Appropriations :

Dividend for the year 30.22 151.12

Tax on dividend 5.14 24.52

Transfer to General Reserve 12.70 45.10

Surplus retained in Profit & Loss Account 2,103.79 2,024.87

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was Rs. 7154.12 Million as against Rs. 10,445.63 Million for the previous financial year. The Profit Before Tax of Rs. 185.58 Million and the Profit After Tax of Rs. 126.98 Million for the financial year under review as against Rs. 665.75 Million and Rs. 450.18 Million respectively for the financial year.

Despite a volatile economic scenario, your Company launched two new products in 2012-13 - one in the lower variant of 5T axle and the higher variant of 18T reduction axle. Your Company also got a prestigious contract manufacturing order from TELCON for manufacturing the 100T dump truck axle. This places your Company in a completely new segment of axles, expanding our product range from 5T GVW to 100T GVW. Moreover, your Company launched prototypes for four new products: MS04 - 5T axle; HR 610 -18T hub reduction axles; and 6x6 and 8x8 axle for military application.

Your Company will continue to adapt to the evolving market trends and focus on creating a sustainable organisation. Moving ahead, AAL is determined to broaden the product portfolio to address a wider cross-section of auto component industry. You Company has strategically diversified into off-highway and military vehicles segments to try and mitigate the volatility in MHCV segment. Moreover, your Company with many global players eyeing to capitalise on the under-penetrated MHCVs market in India, it gives us an added opportunity to serve them as well.

DIVIDEND

The Directors recommend the payment of dividend of Rs. 2/- per share of Rs. 10/- each. The Dividend Distribution tax shall be paid by the Company and the dividend distributed to shareholders is exempt from tax.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - A to this report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

DIRECTORS

Chris Villavarayan was appointed as a non-retiring Director based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, in the place of Pedro N. Ferro who resigned from the Board. The Board places its appreciation to Mr. Ferro for his valuable contributions during his tenure.

P C. Bhalerao resigned from the directorship of the company effective 25.11.2013. The Board accepted his resignation and thanked Mr. Bhalerao for the contribution made by him during his tenure on the Board.

Ashok Rao ceased to be a Whole Time Director effective 30.09.2013 consequent to his resignation from the employment with the company. The Board while accepting his resignation, placed on record its appreciation for the services rendered by him during his tenure on the Board.

N. Muthukumar was appointed Additional Director effective 01.10.2013. As he holds office upto the date of ensuing Annual General Meeting, members'' approval is being sought for his appointment and payment of remuneration as Whole Time Director.

Amit B. Kalyani and Joseph A. Plomin were appointed Additional Directors effective 25.11.2013 and hold office up to the date of the ensuing Annual General Meeting where their appointment is being sought as Directors retiring by rotation.

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Bhalchandra B. Hattarki retires by rotation and being eligible, offers himself for re-appointment as Director.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended 30th September, 2013 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) 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 as at 30th September, 2013 and of the profit of the Company for the year under review;

(iii) 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; and

(iv) the Directors had prepared the annual accounts for financial year ended on 30th September, 2013 on a ''going concern'' basis.

AUDITORS AND AUDITORS'' REPORT

M/s Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the ensuing AGM and are eligible for re-appointment. The Company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under Section 224(1B) of the companies Act, 1956.

COST AUDITORS

In Compliance with the Orders and Circulars issued by Ministry of Corporate Affairs (MCA) with respect to Cost Audit, M/s G.S.R & Associates, Mysore were appointed as Cost Auditors of the Company and the relevant filings with MCA with respect to maintenance of Cost Accounts were made well within in the prescribed time limit.

PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their dedicated contribution to facilitate smooth operations during the year. The Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company None of the employees listed in the said Annexure is related to any Director of the Company

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the financial institutions, banks, central & state government authorities, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support to the Company.

The Directors also take this opportunity to express their gratitude and appreciation to all its executives, officers, workers and staff of the Company

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors

Place: Mysore Dr. B. N. Kalyani

Date: 25th November, 2013 Chairman


Sep 30, 2012

To the Members,

The Directors have the pleasure in presenting the 31st Annual Report on the business and operations of the Company and the accounts for the financial Year, ended 30th September, 2012.

FINANCIAL RESULTS

(Rs. in Million)

2011-2012 2010-2011

Profit before Depreciation & Tax 939.63 1,105.28

Less : depreciation & amortisation 273.88 233.93

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 215.57 295.78

Profit After Tax 450.18 575.57

Balance of Profit from Previous Year 1,795.43 1,453.09

Profit available for appropriation 2,245.61 2,028.66

Appropriations :

Dividend for the year 151.12 151.12

Tax on dividend 24.52 24.52

Transfer to General Reserve 45.10 57.56

Surplus retained in Profit & Loss Account 2,024.87 1,795.43

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was Rs.10,445.60 Million as against Rs. 11,144.87 Million for the previous financial year. The Profit Before Tax of Rs. 665.75 Million and the profit After tax of Rs. 450.18 Million for the financial year under review as against Rs. 871.35 Million and Rs. 575.56 Million respectively for the financial year

DIVIDEND

The Directors recommend the payment of dividend of Rs. 10/- per share of Rs. 10/- each. The Dividend Distribution tax shall be paid by the Company and the dividend distributed to shareholders is exempt from tax.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

WIND MILL

During the year the Company took up the initiative, along with other group companies, to generate power from Green Energy sources and installed one Wind Turbine Generator with 2.00 MW generation capacity at Tithwa, Gujarat. Total Generation of power from the wind mill during the year was 1742 Lacs KwH (April to September, 2012) which was in turn sold to Gujarat Urja Vikas Nigam Limited.

AUDITORS'' REPORT

The Auditors'' Report to the Shareholders does not contain any qualification.

DISCLOSURE OF PARTICULARS

Information as per the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earning and outgo is provided in the Annexure " A " forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their dedicated contribution to facilitate smooth operations during the year. The Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company None of the employees listed in the said Annexure is related to any Director of the Company

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms that:

- In the preparation of the annualaccounts, the applicable accounting standards have been followed and there has been no material departure.

- Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that have been made 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.

- 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 and detecting fraud and other irregularities.

- The annualaccounts have been prepared on an ongoing concern basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, M/s. B C Prabhakar & Satish Sekhri retires by rotation and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of ensuing AGM and are eligible for Reappointment. The Company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under Section 224(1B) of the companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the financial institutions, banks, central & state government authorities, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support to the Company.

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors.

Place: Mysore B. N. Kalyani

Date: 29th November, 2012 Chairman


Sep 30, 2010

The Directors are pleased to present the Twenty-Ninth Annual Report of your company with the audited accounts for year ended September 30, 2010.

Financial Results (Rs. in Million)

2009-2010 2008-2009

Profit before Depreciation & Tax 868.83 311.66

Less: Depreciaation & amortization 209.95 184.97

Provision for Taxation-Current/ 218.13 30.07

Deferred/Fringe Benefit Tax

Profit After Tax 440.74 96.61

Balance of Profit from Previous 1,205.66 1,167.01 Year

Profit available for appropriation 1,646.98 1,263.63

Appropriations :

Dividend for the year 128.45 41.29

Tax on dividend 21.33 7.01

Transfer to General Reserve 44.10 9.66

Surplus retained in Profit & 1,453.09 1,205.66

Loss Account

Review of performance

The Gross Sales and other income for the financial year under review was Rs.7323.62 Mn as against Rs.2,907.99 Mn for the previous financial year registering a growth of 152%. The Profit Before Tax of Rs.658.87 Mn and the Profit After Tax of Rs.440.74 Mn for the financial year under review as against Rs.126.69 Mn and Rs.96.61 Mn respectively for the financial year, improved by 420% and 356% respectively.

Dividend

The Directors recommend payment of dividend of Rs.8.50 per share of Rs. 10.00 each.

The Dividend Distribution tax shall be paid by the Company and the dividend is exempt from tax in the hands of shareholders.

Fixed deposits

Your company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Auditors Report

The Auditors Report to the Shareholders does not contain any qualification.

Disclosure of Particulars

Information as per the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 relating to conversion of Energy, Technology Absorption, Foreign Exchange Earning and outgo is provided in the Annexure “A“ forming part of this report.

Management Discussion and analysis Report and Report of the Directors on Corporate Governance

In accordance with clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

Particulars of Employees

The Board of Directors wishes to express their appreciation to all the employees for their contribution to operation of the company during the year. The information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)iv) of the Act, the report and accounts are being sent to the shareholders of the company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company. None of the employees listed in the said Annexure is related to any Director of the company.

Directors Responsibility Statement

The Board of Directors of the Company confirms that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure:

- Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that have been made 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.

h 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 and detecting fraud and other irregularities;

- The annual accounts have been prepared on an ongoing concern basis.

Directors

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Mr. B C Prabhakar retires by rotation and being eligible, offers himself for re-appointment.

Mr. P C Bhalerao was appointed a director in casual vacancy created by resignation of Mr. Larry Dowers and he holds office upto the date of ensuing Annual General meeting up to which Mr.Larry Dowers would have held office. In accordance with the provisions of the Companies Act, 1956, Mr. P C Bhalerao retires with effect from the date of the Annual General Meeting. The appointment of Mr. P C Bhalerao as Director liable to retire by rotation is proposed.

Mr.Satish Sekhri who was appointed as an Additional Director on 18th November 2010, holds office only up to the ensuing Annual General Meeting and his appointment has been proposed for the approval of the members.

Auditors

M/s. Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the company hold office until the conclusion of ensuing AGM and are eligible for Reappointment.

The company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under section 224(1B) of the companies Act, 1956.

Acknowledgements

Your directors take an opportunity to thank the financial institutions, Banks, Central & State Governments Authorities, Regulatory Authorities, Stock Exchanges and the stake holders for their continued co-operation and support to the company.

Your directors wish to place on record their appreciation for the continued co-operation and support received from, the Kalyani Group, Pune, and Arvin Meritor Inc., USA.

For and on behalf of the Board of Directors

Place : Mysore B.N. Kalyani

Date : 18th November 2010 Chairman

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