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Directors Report of Automotive Stampings and Assemblies Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the Twenty Fifth Annual Report together with the Audited Financial Statement of your Company for the year ended March 31, 2015. The Management Discussion and Analysis forms part of the Report.

FINANCIAL RESULTS

(Rs. in Lakhs)

Particulars Financial Year

2014-15 2013-14

Revenue from Sale of Products (Net) 28,864.98 33,757.54

Other Operating Revenue 185.14 408.60

Other Income 4.68 12.07

Total Revenue 29,054.80 34,178.21

Cost of Materials Consumed (including change in inventories) 22,608.91 26,009.49

Employee Benefit Expense 4,073.56 4,043.21

Other Expenses 3,016.26 3,147.27

Earnings / (Loss) before Depreciation, Financial Charges and Tax (643.93) 978.24

Interest Expense 824.35 663.56

Depreciation and Amortization Expense 968.90 1,519.97

Profit / (Loss) before Tax (2,437.18) (1,205.29)

Tax Expense / (Credit) (120.09) (376.00)

Profit / (Loss) for the year (2,317.09) (829.29)

DIVIDEND

Due to the loss during the year, the Board of Directors has not recommended a dividend.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian Automobile Industry is made up of Original Equipment Manufacturers (OEMs) i.e. Automobile manufacturers and auto component manufacturers.

The Industry is an emerging sector in India, with almost all global majors having set up their facilities here. The Industry has been continually evolving and absorbing newer technologies in order to align itself with global developments and realise its full potential.

The Auto Components Industry in India comprises Tier One manufacturers who supply complete component modules to OEMs, Tier Two manufacturers who cater to Tier One manufacturers and Tier Three manufacturers who supply components to Tier Two manufacturers. The Industry is divided into five segments viz. engine parts, drive transmission & steering parts, suspension & brake parts, electric parts and body & chassis.

The fortunes of the Auto Components Industry are closely linked with those of the OEMs.

The Auto Components Industry has been impacted during the year due to economic slowdown of the industry in general and particularly, the automobile industry.

The chart below shows the sales of various categories of vehicles during FY 2014-15 compared to FY 2013-14:

Segment 2014-15 2013-14 Growth

Passenger cers 1,876,012 1,286,226 4.99%

Utility vehicles 553,699 525,839 5.30%

Vans 171,395 190,844 - 1 0.19%

3 -wheelers 531,927 490,085 10.80%

Medium & Heavy commercial vehicles ( M & HCVc) 252,755 250,618 16.02%

Light commercial vehicles (LCVs) 382,206 432,233 - 11.57%

Source: SIAM report

The Indian Auto Components Industry has also been facing its most formidable challenge to maintain volumes as well as margins.

Your Company operates in Sheet Metal Components, Assemblies and Sub-assemblies segment of the Auto Components Industry. It manufactures a range of sheet metal components and assemblies for the Automobile Industry and is a Tier One auto components supplier.

OPERATIONS

Your Company''s sales during the year were impacted by lower volumes in the segment in which it predominantly operates. Some of the models under passenger car segment and LCV segment, on which your Company has heavy dependence, recorded sharper drop in volume and this had a very adverse effect on sales. Even though, the passenger car segment recorded growth of 4.99%, your Company couldn''t achieve corresponding growth since the anchor customer of your Company recorded a negative growth.

Consequently, your Company could not utilize its capacity fully In addition, the frequent fluctuations in demand during the financial year 2014-15 have made planning for other resources difficult.

To minimise the impact of falling volumes and increasing input costs, your Company launched a number of containment actions and cost reduction drives as counter measures such as EBITDA improvement initiatives to enhance internal efficiencies and improve operational excellence. Apart from the cost reduction programmes, the Company has been aggressively pursuing new business opportunities. These initiatives will have a positive impact on volumes, margins and overall performance on a sustained basis in the future.

INCOME AND EXPENDITURE

Sales dropped by 14.49% to Rs. 28,864.98 Lakhs primarily due to lower volume and reduction in sales of tools, dies and moulds.

Other Operating Revenue which mainly comprises income from job work, reduced by 54.69% to Rs. 185.14 Lakhs.

Other Income, which mainly consists of interest on deposits, gain on exchange fluctuations and profit on sale of assets, reduced by 61.23% to Rs. 4.68 Lakhs. The prime reason for this was a loss caused by exchange fluctuations in the year under review against a gain in the previous year.

Cost of materials consumed (including change in stock) as a percentage to sales increased by 1.28% to 78.33% because of change in the product mix due to lower volume of LCVs. The Management has been taking continuous steps to improve control over material utilisation.

Employee expenses have remained almost at the same level as in the previous year since the effect of productivity improvements done was offset by the salary increases.

Other Expenses comprising Manufacturing, Administration and Selling Expenses reduced by 4.16% to Rs. 3,016.26 Lakhs due to reduction in Sales volumes and implementation of EBITDA improvement programmes. However, the reduction was partly offset by the increase in expenses on Repairs and maintenance.

The Loss before Depreciation, Financial Charges and Tax was Rs. 643.93 Lakhs as against Earnings before Depreciation, Finance Costs and Tax of Rs. 978.24 Lakhs in the previous year.

Interest expense increased by 24.23% to Rs. 663.56 Lakhs due to increase in borrowings.

Depreciation and amortization expense have reduced due to revision in the estimated useful lives of fixed assets, primarily plant and machinery, effective April 1, 2014 pursuant to the provisions of the Companies Act, 2013.

OPPORTUNITIES AND THREATS

* Investment in Technology:

As the automotive market is continually upgrading its technology, your Company is also upgrading its technology to participate in new vehicle programmes.

* Companies'' own technology improvement plan:

Your Company is undertaking various new technology initiatives which will further improve the potential for new businesses from existing and new customers.

The rural market is also facing a slowdown because of the impact of unseasonal rains that have hit the agricultural sector. Slowdown in industrial activity and modest income growth have been the key growth retarders over the past few years. The profitability of the Indian Auto Components Industry is likely to continue to be under strain due to pricing pressures from OEMs because of new product launches which has created heightened competitive intensity thereby constraining their pricing flexibility

SEGMENT-WISE PERFORMANCE

The Company operates only in the Automobile Component Segment in the Domestic Market.

FUTURE OUTLOOK

The industry is expected to benefit from lower fuel costs and softening of interest rates that would ideally help in replacements in the automotive sector. It is likely that the hatchback segment will see a visible growth as first-time buyers prefer new cars to two-wheelers or used cars.

The medium and long term outlook remains positive for the automotive sector and consequently, the auto component sector. This confidence is based on strong sector fundamentals which include low incidence of vehicle penetration in the country, projected high rate of GDP growth for the Indian economy, huge investments being made by the Government in infrastructure along with migration of middle class population to urban areas with aspirations for better living standards.

RISKS AND CONCERNS

* Rising input costs:

The rising input cost is a cause for concern which, unless controlled, will impact sales and also erode margins.

* Skill Availability:

In some of the locations of our operations, sourcing of skilled labour is an issue which may create challenges for future growth.

* Concentrated Customer Base:

Concentrated OEM and limited product portfolio make the component manufacturers vulnerable to the vagaries of business cycles.

Your Company has been taking steps to mitigate the risks by creating a state of internal readiness to seize opportunities that unfold and continues to explore new business opportunities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has developed a robust internal control systems by documenting procedures covering financial & operating functions. These systems are providing a reasonable assurance with regard to its financial & operations controls.

Some significant features of the internal control systems are:

* A detailed preparation and subsequent monitoring of both Annual budgets & Capital Expenditure budgets for all its functions.

* Implementation of ERP (SAP) for online control of all transactions including finance, materials, dispatch, quality, costing, etc. across all locations.

* Internal audits are conducted by external auditors and they audit all aspects of business, based on audit programmes finalised by the Audit Committee

* Review of the financial performance by Audit Committee.

RELATED PARTIES

Note 24 of the Accounts sets out the nature of transactions with related parties. Transactions with Related Parties are carried out in the ordinary course of business and at the arm''s length. The details of the transactions are tabled before the Audit Committee. Further details on this are explained in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILTY (CSR)

Pursuant to the provisions of the Companies Act, 2013, your Company is not mandatorily required to spend any amount on this account in view of the losses. Your Company has however been undertaking CSR initiatives voluntarily.

Your Company has constituted a Corporate Social Responsibility Committee in terms of section 135 of the Companies Act, 2013. The Committee has formulated a CSR Policy to be undertaken by your Company covering the activities specified in the Act. The Policy has been uploaded on the website of the Company: www.autostampings. com.

The employees from all plants of the Company voluntarily contribute their time by visiting orphanages/ old age homes, schools, etc. to provide some companionship and succour to the needy children and aged people.

Your Company identifies employable local youth and provides training to them under their Skill Development Centre.

ENVIRONMENT, HEALTH AND SAFETY

Your Company is committed to provide a safe, secure and healthy workplace and this has been documented in the Health, Safety and Environment (HSE) policy which is part of the Overarching Wellness strategy of your Company. Your Company has therefore adopted a comprehensive approach to implement this by adopting ''Total Safety Culture'' concept across its operations. All the Plants of the Company have been certified for EMS 14001 and OHSAS 18001. The Pune plants are especially focused on the wellness initiative.

Your Company has initiated a process for implementation of the British Safety Council (BSC) Certification. Internal Audits have been conducted at all Plants and training and awareness initiatives have been undertaken.

During the year, the approach to safety has been further strengthened in all operations of your Company. Regular safety drills and safety audits are continued at all plants. The requisite training is provided to the employees in Safety. HSE audits are carried out every quarter and health checks & counseling are extended to employees.

Your Company has adopted "Grey to Green" climate change policy to reduce its carbon footprint by reducing power consumption and selling steel scrap to be reprocessed and sold.

There is a continued focus on tracking of "near miss" incidences, which has resulted not only in reduction of reportable accidents but even in first aid injuries & non- reportable accidents. Safety competitions, presentations on safety kaizens, mock drills, etc. are conducted for achieving a safe and healthy work environment.

Your Board of Directors are continually updated on Health, Safety and Environment related matters.

QUALITY INITIATIVES

All the manufacturing Plants of your Company are certified under TS 16949 and ISO 14001. Your Company has been implementing the Tata Business Excellence Model to build excellence in its business operations.

DIRECTORS

Mr. Arvind Goel will retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment.

EVALUATION OF DIRECTORS, THE BOARD & ITS COMMITTEES

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation for FY 2014-15 of (a) its own performance; (b) the Directors individually; and (c) the working of its Committees viz. Audit Committee, ''Nomination and Remuneration Committee'', ''Corporate Social Responsibility Committee''; Finance Committee and the ''Stakeholders Relationship Committee''. The details of evaluation process have been explained in the Corporate Governance Report.

REMUNERATION POLICY

On the recommendation of the ''Nomination and Remuneration Committee'', the Board has approved and adopted a Remuneration Policy. The details of the Policy are stated in the Corporate Governance Report.

POLICY WRT QUALIFICATIONS, ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR

The Company has adopted the Guidelines on Board Effectiveness ("Governance Guidelines" or "guidelines") which inter alia cover the criteria for determining qualifications, attributes and independence of a Director. The details of the Policy are stated in the Corporate Governance Report.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from all the Independent Directors under Section 149 (7) of the Companies Act, 2013 that they meet the criteria of independence laid down in Section 149 (6) and Clause 49 of the Listing Agreement.

BOARD AND COMMITTEE MEETINGS

The details of Board and Committee meetings held during the year are given in the Corporate Governance Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by the Regulators / Courts which would impact the future operations / going concern status of the Company.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance, along with the Certificate of Compliance from the Auditors, forms a part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

1. in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures;

2. accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the loss of the Company for the year ended on that date;

3. proper and sufficient care have been taken for the maintenance of accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company, for preventing & detecting fraud and/or other irregularities;

4. the annual accounts have been prepared on a going concern basis;

5. internal financial controls have been laid down by the Company and that such internal financial controls are adequate and are operating effectively; and

6. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed as Annexure I to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Companies Act and Rule 12 (1) of Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT.9 is annexed as Annexure II to this Report.

PERSONNEL

At the end of March, 2015, your Company had 636 employees (excluding trainees and apprentices) as against 661 in March, 2014.

Your Company accords high importance to building and sustaining healthy industrial relations with the aim of achieving competitive productivity & cordial work environment. The industrial relations have remained harmonious. With a view to ensure prompt resolution of employee grievances, various Committees have been set up under the Chairmanship of Functional Heads / Department Heads e.g. Works Committee, Health, Safety and Environment Committee, Prevention of Sexual Harassment Committee, etc.

The functioning of these Committees is regularly reviewed by the Management and the Board is also updated regularly.

During the year, your Company has signed a long term productivity linked wage agreement at Halol plant. Considering the competitive market scenario, it has become essential to substantially improve the productivity on the shop floor. Your Company has been implementing TACO Productivity Management System (TPMS) on the principles of Maynard Operation Sequence Technique (MOST) to improve productivity, resulting in rationalisation / reduction in manpower in all the Plants.

The Information required under section 197(12) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is set out in Annexure III to this Report.

There was no employee of the Company who received remuneration in excess of the limits prescribed under Section 197 of the Companies Act, 2013, read with Rule 5 (2) and (3) of Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

RISK MANAGEMENT

The details of Risk Assessment framework are set out in the Corporate Governance Report forming part of the Board''s Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a vigil mechanism. The details of the same are explained in the Corporate Governance Report and also posted on the website of the Company.

AUDITORS

1. Statutory Auditors:

M/s. Price Waterhouse, Chartered Accountants (Firm Reg. No. 301112E) will retire at the conclusion of the ensuing Annual general meeting of your Company as Statutory Auditors and being eligible, offer themselves for re-appointment. Your Company has received a certificate, confirming that if re-appointed, their re-appointment will be in accordance with Section 139 read with Section 141 of the Act. Members are requested to consider the re-appointment of the Statutory Auditors and authorize the Board of Directors to fix their remuneration.

2. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. SVD & Associates, Company Secretaries for conducting Secretarial Audit of the Company for FY 2014-15. The Report of the Secretarial Audit is annexed herewith as Annexure IV to this Report.

Based on the Audit Committee recommendations, the Board has approved re-appointment of M/s. SVD & Associates, Company Secretaries for conducting the Secretarial Audit for FY 2015-16.

The Auditors'' Report and the Secretarial Audit Report for the year ended March 31, 2015 do not contain any qualification and adverse remark.

AWARDS AND RECOGNITION

Your Company received ''Supplier Quality Excellence Award'' from General Motors, India and ''Overall Performance Award'' from Tata Motors Limited.

FORWARD LOOKING STATEMENTS

Certain statements describing the Future Outlook, Industry Structure and Developments may be construed "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied in this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks and appreciation for the confidence reposed and continued support extended by Central and State Governments, Bankers, Customers, Suppliers and Shareholders.

Your Board would like to place on record its sincere appreciation to the employees for the dedicated efforts and contribution in playing a very significant part in the Company''s operations.



For and on behalf of the Board of Directors

Pradeep Mallick Pune, April 22, 2015 Chairman


Mar 31, 2013

Dear Members,

The Directors take pleasure in presenting the Twenty Third Annual Report together with the Audited Statement of Accounts of the Company for the year ended March 31, 2013.

FINANCIAL RESULTS

(Rs. in Crore)

Particulars Financial Year

2012-13 2011-12

Total Revenue 465.18 571.73

Earnings before Depreciation, Financial Charges and Tax 13.66 29.31

Finance Cost 4.74 5.46

Depreciation and Amortization Expense 15.24 14.97

Profit / (Loss) before Tax (6.32) 8.88

Tax Expense / (Credit) (1.89) 2.91

Profit / (Loss) for the year (4.43) 5.97

DIVIDEND

Due to the loss during the year, the Board of Directors has not recommended a dividend.

CORPORATE SOCIAL RESPONSIBILTY

In terms of societal contribution, the following initiatives have been undertaken by the Company:

- The Company has adopted an orphanage/ old age home wherein the employees voluntarily contribute their time and effort to provide some companionship and succour to the children. The Company also contributes financially to mitigate the hardships by providing help to this orphanage.

- The Company identifies employable local youth and provides training to them under earn and learn scheme.

- The Company also contributes to social causes such as educational institutions.

ENVIRONMENT, HEALTH AND SAFETY

The Company is deeply conscious of its responsibility towards the environment, health and safety of its employees. During the year, the Company planted more than 600 trees in Chakan and Bhosari plants and installed oil skimmer in Chakan plant to separate oil from water.

Electrical safety audit and Thermographic survey were conducted in the plants during the year. The Company has planned to undergo a safety audit from National Safety Council (NSC) in all its plants in the current financial year.

Moreover, all plants of the Company have a daily safety walk conducted by the staff and permanent workers to different areas of the plant. The suggestions made during the walk are tracked and addressed by the concerned departments. The Company has also appointed Safety Officers in various plants, who work closely with the Plant Heads to address Health, Safety and Environment (HSE) matters in the plants. To increase awareness of safety and to avoid accidents, the employees of the Company are being trained to identify near miss accidents.

For better medical facility to the employees, the Company has appointed a full time Medical Officer in Chakan plant.

QUALITY INITIATIVES

All the manufacturing plants of the Company are certified under TS 16949 and ISO 14001. The Company has been implementing the Tata Business Excellence Model to build excellence in the business operations.

DIRECTORS

Mr. Pradeep Mallick and Mr. R A Savoor will retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance, along with the Certificate of Compliance from the Auditors, forms a part of this Report.

THE DIRECTORS'' RESPONSIBILITY STATEMENT

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

1. In the preparation of the Annual Accounts for the year 2012-13, the applicable Accounting Standards have been followed and that there are no material departures;

2. They have, in consultation with the Statutory Auditors, selected and applied accounting policies consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year viz. March 31, 2013 and of the loss of the Company for the year ended on that date;

3. They have taken proper and sufficient care, to the best of their knowledge and ability, 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

4. They have prepared the annual accounts on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required in terms of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is set out in Annexure I to this Report.

PERSONNEL

At the end of March, 2013, the Company had 2000 employees as against 2929 in March, 2012.

The Company believes in providing a conducive environment for nurturing potential, encouraging performance and retaining talent at all levels.

The Company faced labour agitation for wage revision and other related matters at the manufacturing plants at Bhosari and Chakan. The strike resorted to by the permanent workers at Chakan plant with effect from October 12, 2012 was called off on November 26, 2012. Similarly, stoppage of work resorted to by the permanent workers at Bhosari plant with effect from October 12, 2012 was called off on November 10, 2012. The Company has signed a long-term productivity linked wage agreement with the trade union at Bhosari. The discussions are continuing with the union at Chakan. Harmonious industrial relations prevailed at other plants of the Company.

There was no employee of the Company who received remuneration in excess of the limits prescribed under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees), Amendment Rules, 2011.

AUDITORS

Price Waterhouse (FRN: 301112E), Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITORS

As per the Order of the Ministry of Corporate Affairs, Cost Audit has become applicable for the Company since the financial year 2012-13. The Company had appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune as the Cost Auditors for the financial year 2012-13. Based on the Audit Committee recommendations, the Board has approved the reappointment of the firm for the financial year 2013-14.

SECRETARIAL AUDIT REPORT

The Company appointed M/s. S. V. Deulkar & Co, Company Secretaries for conducting Secretarial Audit of the Company for the financial year ended March 31, 2013. The Secretarial Audit Report is attached to this Annual Report. The Report confirms compliance by the Company with provisions of the Companies Act, 1956, Listing Agreement with the Stock Exchanges and the applicable Regulations under Securities and Exchange Board of India Act, 1992 except an instance of delay in intimation of calling off of strike as per clause 36 of the Listing Agreement. Steps are being taken to further strengthen the compliance mechanism.

FORWARD LOOKING STATEMENTS

Certain Statements describing the Future Outlook, Industry Structure and Developments may be "forward - looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied in this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks and appreciation for the guidance, support and continued co-operation extended by Bankers, Central and State Governments, Customers, Suppliers and Shareholders.

The Directors also take this opportunity to record their appreciation of the dedicated efforts and contribution made by all the employees.

For and on behalf of the

Board of Directors

Pradeep Mallick

Mumbai, May 6, 2013 Chairman


Mar 31, 2012

The Directors take pleasure in presenting the Twenty Second Annual Report together with the Audited Statement of Accounts of the Company for the year ended March 31, 2012.

FINANCIAL RESULTS

(Rs. in Crores)

Particulars Financial Year

2011-12 2010-11

Total Revenue 571.73 531.90

Earnings before Depreciation, Financial Charges and Tax 29.31 33.88

Finance Cost 5.46 5.86

Depreciation and Amortization Expense 14.97 12.97

Profit before Tax 8.88 15.05

Tax Expense 2.91 4.88

Profit for the year 5.97 10.17

DIVIDEND

The Directors have paid dividend of Rs. 0.41 Crores (exclusive of dividend tax) on pro-rata basis on 90,00,000 12% Cumulative Redeemable Preference shares redeemed on August 17, 2011.

The Directors are pleased to recommend an equity dividend of 15% (Rs. 1.50 per share) for the year 2011-12. It would lead to an outflow of about Rs. 2.38 Crores (excluding dividend tax).

CORPORATE SOCIAL RESPONSIBILTY

In terms of societal contribution, the following initiatives have been undertaken by the Company:

* The Company has adopted an orphanage wherein the employees voluntarily contribute their time and effort to provide some companionship and succour to the children. The Company also contributes financially to mitigate the hardships by providing help to this orphanage.

* The Company identifies employable local youth and provides training to them under earn and learn scheme.

* The Company also contributes to social causes such as hospitals, educational institutions, etc. ENVIRONMENT, HEALTH AND SAFETY

In terms of its responsibility towards the environment, the initiatives undertaken include the planting of trees in the vacant land at Plant sites, conservation in water usage, minimizing effluents through better monitoring and corrective measures, use of solar powered heaters, oil skimmers for separating the oil from sewage, energy efficient CFL Lighting in place of Florescent lamps, reduction of quantum of input material through Value Analysis/Value Engineering activities, use of Piped Natural Gas (PNG) instead of diesel for heating purpose in Autophoretic Process and optimum utilisation of transport vehicles through multi stacking of pallets.

The Company has also undertaken the Green Initiative by sending electronic communications to its Directors and Shareholders.

The Company follows all statutory and safety norms. Safety is accorded prime importance in the organization. The Company has Safety Committees and Safety Captains in each Plant, who oversee the Workforce's safety, through ensuring safe conditions and actions. Safety audits and evacuation drills are conducted regularly and all staff members are encouraged to participate. Periodic health checkup for the employees is also conducted.

QUALITY INITIATIVES

All the manufacturing plants of the Company are certified under TS 16949 and ISO 14001. The Company has been implementing the Tata Business Excellence Model to build excellence in the business operations.

DIRECTORS' Appointment

Mr. Ajay Tandon was appointed as an Additional Director of the Company w.e.f. July 27, 2011. He holds office up to the date of the ensuing Annual General Meeting of the Company. Notice has been received from a member of the Company proposing his candidature for the office of Director. The Directors recommend his appointment.

* Retirement by Rotation

Mr. L Lakshman and Mr. Amitabha Mukhopadhyay will retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, have offered themselves for re-appointment.

CORPORATE GOVERNANCE

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance, along with the Certificate of Compliance from the Auditors, forms a part of this Report.

THE DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956 and based on the representations received from the operating management, the Directors confirm that -

1. In the preparation of the Annual Accounts for the year 2011-12, the applicable Accounting Standards have been followed and that there are no material departures;

2. They have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 viz. March 31, 2012 and of the profit of the Company for the year ended on that date;

3. They have taken proper and sufficient care, to the best of their knowledge and ability, 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

4. They have prepared the annual accounts on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required in terms of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is set out in Annexure I to this Report.

PERSONNEL

At the end of March, 2012, the Company had 2929 employees as against 2525 in March, 2011.

The Company believes in providing a conducive environment for nurturing potential, encouraging performance and retaining talent at all levels. Harmonious industrial relations prevailed at all the Plants of the Company.

The details of employees of the Company who received remuneration in excess of the limits prescribed under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Amendment Rules, 2011 are given in Annexure II to this Report.

AUDITORS

Price Waterhouse, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

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 M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune as the Cost Auditors for the financial year 2012-13.

SECRETARIAL AUDIT REPORT

The Company appointed M/s. S. V. Deulkar & Co., Company Secretaries for conducting Secretarial Audit of the Company for the financial year ended March 31, 2012. The Secretarial Audit Report is attached to this annual report. The Report confirms compliance by the Company with provisions of the Companies Act, 1956, Listing Agreement with the Stock Exchanges and the applicable Regulations under Securities and Exchange Board of India Act, 1992.

FORWARD LOOKING STATEMENTS

Certain Statements describing the Future Outlook, Industry Structure and Developments may be "forward - looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand / supply, price conditions in domestic and overseas market in which the Company operates, changes in Government regulations, tax laws and other statutes.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks and appreciation for the guidance, support and continued co-operation extended by Bankers, Central and State Governments, Customers, Suppliers and Shareholders.

The Directors also take this opportunity to record their appreciation of the dedicated efforts and contribution made by all the employees.

For and on behalf of the

Board of Directors

Pradeep Mallick

Mumbai, April 24, 2012 Chairman

 
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