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Directors Report of Balkrishna Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 53rd Annual Report and Company''s Audited Statement of Accounts for the year ended 31st March 2015.

(Rs. in Crores) Current Year ended Previous Year ended 31.03.2015 31.03.2014

Revenue from Operations 3833.83 3615.17 and other Operating Income

Less : Excise Duty 53.93 38.46 Recovered on Sales

Add : Other Income 279.80 13.84

Total Revenue 4059.70 3590.55

Gross Profit 967.75 882.66

Less: Depreciation and 240.20 164.96 Amortization

Profit before Tax 727.55 717.70

Less: Provision for Taxation

Current Tax 215.10 157.00

Deferred Tax (Net) 23.64 238.74 72.33 229.33

Profit after Tax 488.81 488.37

Balance brought 142.43 76.59 forward from last year

PROFIT AVAILABLE FOR 631.24 564.96 APPROPRIATIONS:

Transfer to General 50.00 400.00 Reserve

Proposed Final 23.20 19.33 Dividend

Tax on Final Dividend 4.63 3.20

Add : Income Tax of 9.47 NIL Earlier Years

Balance Carried forward 562.88 142.43 to balance sheet

OPERATIONS:

Your Company mainly operates in one single segment i.e. "tyres" with focus on manufacture of wide range of "Off-Highway Specialty Tyres". These specialty tyres are meant for Agricultural, Industrial, Material Handling, Construction, Earth moving (OTR), Forestry, Lawn & Garden Equipment and All Terrain Vehicles (ATV). More than 85% of our revenue is generated through exports. However, during the year under consideration, consequent to scheme of arrangement under section 391 to 394 of the Company''s Act 1956, separately explained in detail in this report, the operations of the company for the part of the year also included activities relating to its erstwhile paper subsidiary. Therefore, the above referred figures for the current year are not comparable with that of previous year.

During the year under consideration, the Company''s Total Revenue from its tyre operations has increased from Rs. 3,591 Crores to Rs. 3,919 Crores after taking into account exchange difference attributable to exports. The profit before interest, depreciation and tax (PBIDT) attributable to tyre business of the company for the year under consideration has increased to Rs. 1,014 Crores from Rs. 908 Crores during previous year.

BHUJ PROJECT:

The work on Bhuj Project is substantially completed and company has already commenced partial production over there during previous year itself. As on 31st March, 2015, the Company has incurred capital expenditure of approximately Rs. 2,606 Crores.

Your Company enjoys the status of "PREMIER TRADING HOUSE".

DIVIDEND:

Your Directors are pleased to recommend Dividend of Rs. 2.40 per Equity Share (120%) for the year, with a total payout of Rs. 27.83 Crores, including Tax on Dividend.

SHARE CAPITAL:

The paid up Share Capital of the Company as on 31st March, 2015 was Rs.19.33 Crores. During the year under review the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, none of the Directors of the Company hold convertible instruments.

RESERVES :

The Company proposes to transfer Rs. 50.00 Crores to Reserves.

SCHEME OF ARRANGEMENT :

The Scheme of arrangement ("the Scheme") between Balkrishna Industries Limited (BIL), Balkrishna Paper Mills Limited (BPML) and Nirvikara Paper Mill Limited (NPML) under the provisions of section 391 to 394 of the Companies Act, 1956 was approved by the Hon''ble High Court of Bombay vide Order dated 19th December 2014. Pursuant to the Scheme (i) BPML amalgamated with the Company with effect from the Appointed Date, i.e., 1st April 2013 and (ii) the Paper Division undertaking of the Company along with investment in Balkrishna Synthetics Limited demerged in to Nirvikara Paper Mill Limited (NPML) with effect from the Effective Date, i.e., 10th February 2015. In accordance with the Scheme, an aggregate of 1,07,39,844 equity shares of Rs. 10 each of NPML have been issued to the equity shareholders of the Company in the ratio of 1 equity share of NPML for every 9 equity shares held in the Company and the shares of NPML held by the Company have been cancelled. Accordingly, Balkrishna Synthetics Limited and NPML have ceased to be subsidiaries of the Company.

OUTLOOK FOR THE CURRENT YEAR 2015-2016:

The Company''s earnings are mainly generated through exports to various countries across the globe. Due to recessionary trends prevailing across the globe, the business environment is tough and challenging. However, your company will continue to make sustained efforts towards growth.

The long-term prospects of the company are definitely positive and the company continues to expand its product range by widening its products offerings and venturing in to new geographies.

OPPORTUNITY & THREATS:

OPPORTUNITIES:

Your company operates into a segment predominantly known as "large varieties -low volume segment", which is not only capital intensive but also labour intensive. Your Company is fully geared up to take advantage of the peculiarities of the said segment and has developed a large base of SKUs to meet the diverse needs and applications.

Moreover, this segment is neither exposed to any technological obsolescence nor wild fluctuations in demand for its products.

The Company has incremental opportunity to develop "Earth Moving Tyres" (OTR) markets and take advantage of the shift from bias to radial tires, which are growing up rapidly. In order to take advantage of this opportunity, the company has already set up an all-steel OTR Radial tyre plant at its Chopanki location and proud to be first company in India to set up such plant. Your company is in the process of expanding its base into its various sub-segments like agricultural, industrial, construction, mining, winter and solid tyres under both technologies - bias as well as radials.

THREATS:

Like any other Company, your Company is also exposed to various threats like competition from small players, retention of employees, labor unrest, increase in raw material prices and other input costs etc.

RISKS / CONCERNS AND RISK MITIGATION:

Fluctuation in Raw Material prices: The Company''s major raw material is Natural Rubber, which is an agricultural commodity and actively traded on the commodities exchanges. Its prices fluctuate significantly and have witnessed significant volatility in the past. Recently there has been a softening in the prices of natural rubber and other raw materials which are expected to continue for some more time in the back drop of subdued business environment across the globe.

In order to minimize such risks, the Company not only enters into medium-term contracts but also adopts the policy to "Buy and Stock" large quantities during the lean period.

Since most of the raw materials are imported, the company is exposed to foreign currency risk. However, it enjoys natural hedge as most of its revenues are in foreign currency.

Labour Relations: Since Company''s manufacturing process is that of batch processing, it requires lot of skilled as well as un-skilled workers. Maintaining a huge work force is a big challenge.

In order to mitigate the said risk, the Company follows good HR practices to promote the welfare, safety of its workmen and improve the work environment. All workers are paid more than adequate remuneration for their work.

Retention of skilled manpower: Like other players in the industry, the Company is also exposed to this risk, more particularly when there is shortage of skilled manpower in the industry.

The Company is able to manage the said risk by good HR practices and rewarding its employees handsomely.

Currency fluctuation: As stated earlier the company revenues are mainly generated through exports. The Company also imports lot of its raw materials and capital equipment''s. Moreover, all its borrowings are in foreign currency and it is therefore exposed to risks due to currency fluctuations.

The Company follows the system of hedging its receivables (net off payables) well in advance by entering into Forward Contracts, thereby protecting itself from the fluctuations in currencies.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Internal Auditors of the Company conduct Audits of various departments to ensure that the necessary controls are in place. The Audit Committee of the Board reviews these and the Company, when needed, takes corrective actions.

HUMAN RESOURCES:

The Company''s human resources continue to be its biggest asset. The team has remained as committed as ever and produced results that are considered significant. Quality, quick delivery and focus on resolving customer issues are the hallmark of the team performance. There is a strong focus on TEAM spirit, during the year, many events/training programs were conducted to develop personality and outlook of its employees. Employee relations continue to be cordial.

SUBSIDIARY COMPANIES:

The company has following 100% subsidiary companies:

BKT Tyres Limited, Thristha Synthetics Limited, BKT EXIM Limited and Indirect subsidiary Companies i.e subsidiary companies of BKT EXIM Limited; i.e. BKT EUROPE S.R.L., BKT USA INC and BKT TIRES (CANADA) INC. During the year BKT EXIM Limited. has invested in wholly owned subsidiary namely BKT EXIM US, INC and BKT EXIM US, INC has incorporated wholly owned subsidiary namely BKT TIRES INC. A report on the performance and financial position of each of the subsidiaries is provided under ''Details of Subsidiaries'' forming part of the Annual Report. The Policy determining material subsidiaries as approved may be accessed on the Company''s website at the link http://www.bkt-tires.com/en/about-us/investors-desk/download?file_ id=1801. During the year Balkrishna Paper Mills Ltd. is merged with Company, Nirvikara Paper Mills Ltd. and Balkrishna Synthetics Ltd. are ceased to be subsidiary Company as per the Scheme of Arrangement approved by the by Hon''ble High Court of Bombay on 19th December, 2014.

CONSOLIDATED FINANCIAL STATEMENT:

As required under the Listing Agreement with the Stock Exchanges, a Consolidated Financial Statement of the Company and all its subsidiaries is attached. The Consolidated Financial Statement has been prepared in accordance with Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, and form part of the Annual Report and Accounts.

DIRECTOR RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134 (3)(c ) of the Companies Act, 2013, your Directors hereby confirmed that:

(i) that in the preparation of the annul accounts for the year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the Profit of the Company for the year ended as on that date;

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

(iv) the Directors have prepared the annual accounts of the Company on a "going concern" basis;

(v) the Directors have laid down internal financial controls to be followed by the Company and the such internal financial controls are adequate and are operating effectively; and

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

CORPORATE GOVERNANCE :

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, Corporate Governance Report forms an integral part of Annual Report. The requisite certificate from Auditor of the Company confirming compliance with the condition of Corporate Governance is attached to the Report on Corporate Governance.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm''s length basis. During the year, the Company has not entered into any contracts /arrangements / transactions with related parties which could be considered materials in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions are approved by the Board may be accessed on the Company''s website at the link http://www.bkt-tires.com/en/about-us/investors-desk/download?file_ id=1798. Members can refer Note no. 42 to the financial statement which set out related party disclosures.

CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which is approved by the Board.

During the year, the Company has spent Rs.11.01 Crores ( 2%) of the average net profits of last three years) on CSR activities.

The Annual Report on CSR activities is annexed herewith as Annexure I.

RISK MANAGEMENT:

The Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. A detailed excise is being carried out that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

DIRECTORS:

In accordance with provisions of the Act and Articles of Association of the Company, Smt. Vijaylaxmi A Poddar, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. Necessary resolution for her re-appointment is placed before the shareholders for approval. Your Directors commend the resolution.

Brief resume of the Director being re-appointed as required under Clause 49 of the Listing Agreement is provided in the Annexure to the notice convening the Annual General Meeting of the Company.

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

During the under review, the members has approved appointment of Independent Directors viz., Shri Sachin Nath Chaturvedi, Shri Khurshed Doongaji, Shri Ashok Saraf, Shri Sanjay Asher and Shri Laxmidas Merchant, as Independent Directors for a period of 5 years w.e.f. 13th September, 2014.

Shri Subhash Chand B Mantri, the Independent Director has resigned from the Board of Directors of the Company w.e.f. 15th May, 2014.

CRITERIA FOR APPOINTMENT OF INDEPENDENT DIRECTORS:

The Independent Directors shall be of high integrity with relevant expertise and experience so as to have as diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, Law, governance and general management.

CRITERIA FOR APPOINTMENT OF MANAGING DIRECTOR / WHOLE TIME DIRECTORS:

The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise and experience particularly in Tyre Industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

REMUNERATION POLICY:

The Company follows a policy on remuneration of Directors and Senior Management employees, details of the same are given in the Corporate Governance Report.

PERFORMANCE EVALUATION:

In accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement the Nomination and Remuneration Committee has laid down the criteria for evaluation of individual Directors, the Board as a whole. Based on the criteria the exercise of evaluation was carried out through as structured process covering various aspects of the Board functioning such as composition of Board and Committees, experience and expertise, performance of specific duties and obligation, governance and compliance issues attendance, contribution at meeting etc.,

The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors at a separately convened meeting which the performance of the Board as a whole evaluated was reviewed. The performance of the Independent Directors was carried out by the entire Board (Excluding the Director being evaluated).

The Directors expressed their satisfaction with the evaluation.

FAMILIARISATION PROGRAMMES FOR BOARD MEMBERS:

On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Managing Director on the Company''s manufacturing, marketing, finance and other important aspects.

The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The induction for Independent Director include interactive sessions with Executive Directors, Business and Functional Heads, visit to the manufacturing site etc. On the matters of specialized nature, the Company engages outside experts/consultants for presentation and discussion with the Board members.

The details of such familirisation programme have been displayed on the company''s website link: http://www.bkt-tires.com/en/about-us/ investors-desk/download?file id=1802.

AUDITORS:

Statutory Auditors:

Messers Jayantilal Thakkar & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and who have furnished certificates of their eligibility for re- appointment as required under Companies Act, 2013.

Secretarial Auditor:

The Board has appointed Mr. GBB Babuji, Company Secretary in Whole time Practice, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith marked as Annexure II.

Cost Auditor:

The Company revenue from exports, in foreign exchange, exceeds seventy five per cent of Companies total revenue, as per Rule 7 (i) of the Companies (Cost Records and Audit) Rules, 2014 Cost Audit is not applicable to the Company for the financial year 2014-15.

INDUSTRIAL RELATIONS:

The industrial relations with staff and workers during the year under review continue to be cordial.

DISCLOSURES:

1. Vigil Mechanism

The Vigil Mechanism of the Company, which also incorporate a whistle blower policy in the terms of Listing Agreements deals with instances of fraud and mismanagement, if any. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company''s website at the link: http://www.bkt-tires.com/en/about-us/investors-desk/downioad?fiie id=1797.

2. Audit Committee

The Audit Committee was reconstituted w.e.f. 15th May, 2014 comprised of Two Independent Non-Executive Directors viz. Shri Sachin Nath B. Chaturvedi (Chairman), Shri Khurshed M Doongaji and Joint Managing Director Shri Rajiv A Poddar. All the recommendations made by the Audit Committee were accepted by the Board.

3. Number of Board Meeting

The Board of Directors of the Company met four times in the year, the details of which are provided in the Corporate Governance Report.

4. Particulars of loans given, investment made, guarantees given and securities provided

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note No. 14, 17, 21 and 32 to the Standalone Financial Statement).

5. 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 the Act, are provided in Annexure III to this report.

6. Extract of Annual Return

Extract of annual return of the Company is annexed herewith as Annexure IV to this report.

7. Particulars of Employees and related disclosures

Pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and in terms of provisions of the Section 136 (1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at Corporate Office of the Company during the working hours and any member interested in obtaining such information may write to the Company Secretary.

8. Your Directors further state that 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.

No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

1. Details of relating to deposit and unclaimed deposits or interest thereon.

2. Issue of equity shares with differential rights as to dividend or voting.

3. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

4. Neither the Managing / Joint Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company''s operation in future.

CAUTIONARY STATEMENTS:

Certain statements in the "Management Discussion and Analysis" describing the Company''s views about the Industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company''s operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

APPRECIATION:

Your Company is grateful to its valued customers for their continuous co-operation and patronizing its products. A word of appreciation is also extended to its Financial Institutions and Banks for their continuous co-operation and assistance in meeting the financial requirements of the Company. Your company would also like to thank its shareholders, employees, vendors and other service providers for their valuable services to the company.

Last but not least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors

Mumbai, ARVIND M PODDAR Dated : 14th May, 2015 CHAIRMAN & MANAGING DIRECTOR


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 52nd Annual Report and Audited Statement of Accounts for the year ended 31st March 2014.

(Rs. in Crores)

Current Year ended Previous Year ended 31.03.2014 31.03.2013

Income from Operations and other Operating Income 3615.17 3220.20

Less: Excise Duty Recovered on Sales 38.46 29.63

Total Income from Operations (Net) 3576.71 3190.57

Gross Profit 882.66 642.91

Less: Depreciation and Amortization 164.96 107.71

Profit before Tax 717.70 535.20

Less: Provision for Taxation

Current Tax 157.00 142.10

Deferred Tax 72.33 229.33 37.27 179.37

Profit after Tax 488.37 355.83

Balance brought forward from last year 76.59 87.72

PROFIT AVAILABLE FOR APPROPRIATIONS: 564.96 443.55

Transfer to General Reserve 400.00 350.00

Proposed Final Dividend 19.33 14.50

Tax on Final Dividend 3.20 2.46

Balance Carried forward to balance sheet 142.43 76.59

OPERATIONS:

Your Company mainly operates in one single segment i.e. "tyres" with focus on manufacture of wide range of "Off-Highway Specialty Tyres". These specialty tyres are meant for Agricultural, Industrial, Material Handling, Construction, Earth moving (OTR), Forestry, Lawn & Garden Equipment and All Terrain Vehicles (ATV). More than 85% of our revenue is generated through exports.

During the year under consideration, the Company''s revenue from its operations has grown over 12%. The Net Turnover and other Income of the company has increased from Rs. 3,191 Crores to Rs. 3,577 Crores.

The Gross Profit of the Company for the year under consideration has increased from Rs. 643 Crores to Rs. 883 Crores and correspondingly, the profit after tax has increased to Rs. 488 Crores as compared to Rs. 356 Crores in the previous year.

Your Company enjoys the status of "PREMIER TRADING HOUSE".

DIVIDEND:

Your Directors are pleased to recommend Dividend of Rs. 2/- per Equity Share (100%) for the year, with a total payout of Rs. 22.53 Crores, including Tax on Dividend.

BHUJ PROJECT:

The Bhuj Project is in advanced stage of implementations, and as at March end 2014, the Company has incurred capital expenditure of approximately Rs. 2,240 Crores. Partial production has already commenced and the plant is expected of be fully operative by March, 2015.

SCHEME OF ARRANGEMENT:

"A Scheme of Arrangement (''the Scheme'') has been filed with the Hon''ble High Court of Bombay, pursuant to the provisions of section 391 to 394 of the Companies Act, 1956 which envisages (i) the amalgamation of Balkrishna Paper Mills Limited, a wholly owned subsidiary of the Company, with the Company w.e.f. 1st April, 2013 being the appointed date for amalgamation and (ii) demerger of the Paper Division Undertaking of the Company into Nirvikara Paper Mills Limited, a wholly owned subsidiary of the Company along with transfer of Investment of Balkrishna Synthetics Limited, with appointed date for the demerger being the date of filing the order of the Hon''ble High Court sanctioning the Scheme, with the Registrar of Companies, i.e. the Effective Date. The scheme shall be given effect to in the books with effect from the respective appointed date, upon receipt of the necessary approvals."

OUTLOOK FOR THE CURRENT YEAR 2014-2015:

The Company''s earnings are mainly generated from exports to European Countries and USA. Due to recessionary trends continuing to prevail in the global market, the business environment has become competitive and difficult, however the company is optimistic about maintaining reasonable growth rates with profits match during fiscal 2014-15.

Whilst prices of rubber have declined in the international market and other input costs have risen marginally, however Company expects to maintain reasonable growth levels during the current year.

The long-term prospects of the company are definitely positive and the company continues to expand its product range by widening its products offerings and venturing in to new geographies.

OPPORTUNITY & THREATS:

OPPORTUNITIES:

The segment in which your company operates is predominantly known as "large varieties -low volume segment". Although it is considered both as capital and labour intensive. Your Company is fully geared up to take advantage of the peculiarities of the said segment and has developed a large base of SKUs to meet the diverse needs and applications.

Moreover, this segment is neither exposed to any technological obsolescence nor wild fluctuations in demand for its products.

The Company has incremental opportunity to develop "Earth Moving Tyres" (OTR) markets and take advantage of the shift from bias to radial tyres, which is growing up rapidly. To adhere this, the company has already set up an all-steel OTR Radial tyre plant at its Chopanki location and it is the first company in India to set up such plant. Your company is in the process of expanding its base into its various sub-segments like agricultural, industrial, construction, mining, winter and solid tyres under both technologies – bias as well as radials.

THREATS:

Like any other Company, your Company is also exposed to various threats like competition from small players, retention of employees, labour unrest, increase in raw material prices and other input costs etc.

RISKS / CONCERNS AND RISK MITIGATION:

Fluctuation in Raw Material prices: The Company''s major raw material is Natural Rubber, which is an agricultural commodity and actively traded on the commodities exchanges. Its prices fluctuate significantly and have moved up considerably in the past. Recently there has been a softening in the prices of natural rubber and other raw materials which is expected to continue for some more time. Whilst lower prices of raw materials may improve its profit margin it could be partly vitiated as the company would need to pass on the benefits to its customers.

In order to minimize such risks, the Company not only enters into medium-term contracts but also adopts the policy to "Buy and Stock" large quantities during the lean period.

Since most of the raw materials are imported, the company is exposed to foreign currency risk. However, it will be offset against the revenues of the company which are also in foreign currency. The increase in utility and other administrative costs may also marginally affect the profitability of the company adversely. However, there are chances of its off set through benefits of scale which is on card.

Labour Relations: Since Company''s manufacturing process is that of batch processing, it requires lot of skilled as well as un-skilled workers. Maintaining a huge work force is a big challenge.

In order to mitigate the said risk, the Company follows good HR practices to promote the welfare, safety of its workers and improve the overall work environment. All workers are paid more than adequate remuneration for their work.

Retention of skilled manpower: Like other players in the industry, the Company is also exposed to this risk, more particularly when there is shortage of skilled manpower in the industry.

The Company is able to manage the said risk by good HR practices and rewarding its employees handsomely.

Currency fluctuation: As stated earlier the company revenues are mainly generated through exports.

The Company also imports lot of its raw materials and capital equipments. Moreover, all its borrowings are in foreign currency and it is therefore exposed to risks due to currency fluctuations.

The Company follows the system of hedging its receivables (net off payables) well in advance by entering into Forward Contracts, thereby protecting itself from the fluctuations in currencies.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Internal Auditors of the Company conduct Audits of various departments to ensure that the necessary controls are in place. The Audit Committee of the Board reviews these and the Company, when needed, takes corrective actions.

HUMAN RESOURCES:

The Company''s human resources continue to be its biggest asset. The team has remained as committed as ever and produced results that are considered significant. Quality, quick delivery and focus on resolving customer issues are the hallmark of the team performance. There is a strong focus on TEAM spirit. During the year, many events/training programs were conducted to develop personality and outlook of its employees. Employee relations continue to be cordial.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

During the current year, your Directors have constituted the Corporate Social Responsibility Committee comprising of Smt. Vijaylaxmi A Poddar as the Chairperson and Shri Arvind M Poddar, Shri Rajiv A Poddar and Shri Sachin Nath Chaturvedi as other Members.

The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

SUBSIDIARY COMPANIES:

The company has following 100% subsidiary companies:

Balkrishna Paper Mills Limited, Balkrishna Synthetics Limited, BKT Tyres Limited, Nirvikara Paper Mills Limited, Thristha Synthetics Limited, BKT Exim Limited and Indirect subsidiary Companies i.e subsidiary companies of BKT Exim Limited; i.e. BKT EUROPE S.R.L., BKT (USA) INC and BKT TIRES (CANADA) INC. BKT EXIM Limited has dissolved BKT (EUROPE) Limited in December, 2013.

As required under the Listing Agreement with the Stock Exchanges, a Consolidated Financial Statement of the Company and all its subsidiaries is attached. The Consolidated Financial Statement has been prepared in accordance with Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, and form part of the Annual Report and Accounts.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. These documents will also be available for inspection by any members at the Corporate Office of the Company and that of respective subsidiary companies.

The financial data of the Subsidiaries have been furnished under ''Details of Subsidiaries'' forming part of the Annual Report.

DIRECTORS:

Shri Subhash Chand B Mantri, the Independent Director has resigned from the Board of Directors of the Company w.e.f. 15th May, 2014. Shri Subhash Chand B Mantri has put in his sincere and dedicated efforts into the Company. Your directors take on record their sincere appreciation for the valuable services rendered by him during his tenure on the Board of Directors of the Company.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Vipul Shah, Director is liable to retire by rotation and being eligible offer himself for reappointment.

Pursuant to the provisions of Section 150(2) read with Section 149(10) of the Companies Act, 2013, shareholders'' approval is sought for the appointment of Shri Sachin Nath Chaturvedi, Shri Khurshed Doongaji, Shri Ashok Saraf, Shri Sanjay Asher and Shri Laxmidas Merchant, as Independent Directors of the Company for a term of five consecutive years, at the ensuing annual general meeting.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditor''s Certificate regarding Compliance of the same are made a part of this Annual Report.

FIXED DEPOSITS:

There are no deposits as on 31st March 2014.

INDUSTRIAL RELATIONS:

The industrial relations with staff and workers during the year under review continue to be cordial.

PARTICULARS OF EMPLOYEES:

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

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

RESPONSIBILITY STATEMENT:

Pursuant to the requirement 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 accounts for the year ended 31st March, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Profit of the Company for the year ended as on that date;

(iii) The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with 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 have prepared the annual accounts of the Company on a "going concern" basis.

AUDITORS:

Messers Jayantilal Thakkar & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and who have furnished certificates of their eligibility for re-appointment as required under Companies Act, 2013.

CAUTIONARY STATEMENTS:

Certain statements in the "Management Discussion and Analysis" describing the Company''s views about the Industry, expectations/predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company''s operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

APPRECIATION:

Your Company is grateful to its valued customers for their continuous co-operation and patronizing its products. A word of appreciation is also extended to its Financial Institutions, Banks and State Governments of Maharashtra, Rajasthan and Gujarat for their continuous co-operation and assistance in meeting the financial requirements of the Company. Your company would also like to thank its shareholders, employees, vendors and other service providers for their valuable services to the company.

Last but not least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors

ARVIND PODDAR

CHAIRMAN & MANAGING DIRECTOR

Mumbai,

Dated : 2nd August,2014


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 51st Annual Report and Audited Statement of Accounts for the year ended 31st March, 2013.

(Rs. In Crores)

Current Year ended Previous Year ended 31.03.2013 31.03.2012

Income from Operations and other Operating Income 3220.20 2844.57

Less: Excise Duty Recovered on Sales 29.63 24.61

Total Income from Operations (Net) 3190.57 2819.96

Gross Profit 642.91 481.36

Less: Depreciation and Amortization 107.71 83.14

Profit before Tax 535.20 398.22

Less: Provision for Taxation

Current Tax 142.10 124.10

Deferred Tax (Net) 37.27 179.37 5.60 129.70

Profit after Tax 355.83 268.52

(Less)/Add: Adjustments relating to earlier years

Excess/(Short) Provision of Taxation NIL (3.35)

Profit after adjustment relating to earlier years 355.83 265.17

Balance brought forward from last year 87.72 389.31

PROFIT AVAILABLE FOR APPROPRIATIONS: 443.55 654.48

Transfer to General Reserve 350 549.91

Proposed Final Dividend 14.50 14.50

Tax on Final Dividend 2.46 2.35

Balance Carried forward to balance sheet 76.59 87.72

OPERATIONS:

Your Company mainly operates in one single segment i.e. " tyres" with focus on manufacture of wide range of "Off-Highway Specialty tyres". These specialty tyres are meant for Agricultural, Industrial, Material Handling, Construction, Earthmoving (OTR), Forestry, Lawn & Garden Equipments and All Terrain Vehicles (ATV). Around 90% of our revenue is generated through exports.

During the year under consideration, the revenue of your Company from its operations has grown by 13%. The Net Turnover and other Income of the company has increased from Rs. 2,820 Crores to Rs. 3,190 Crores.

The Gross Profit of the Company for the year under consideration has increased from Rs. 481 Crores to Rs. 643 Crores and correspondingly, the profit after tax has increased to Rs.356 Crores as compare to Rs.269 Crores in the previous year.

Your Company continues to enjoy the status of "STAR TRADING HOUSE".

DIVIDEND:

Your Directors are pleased to recommend Dividend of Rs.1.50 (75%) for the year, with a total payout of Rs. 16.96 Crores, including Tax on Dividend.

CAPITAL EXPENDITURE:

During the year, the company has carried out a modernization scheme at its existing plants by adding balancing equipments, with a view to remove debottlenecking and marginally improve its production capacity. The capex cost amounted to Rs.145 Crores.

The company has so far incurred capital expenditure of Rs. 912 Crores (approx.) towards its major upcoming green field tyre project at Bhuj Gujarat.

SUBSIDIARY COMPANIES:

The company has following 100% subsidiary companies:

Balkrishna Paper Mills Limited, Balkrishna Synthetics Limited, BKT Tyres Limited, BKT Exim Limited and Indirect subsidiary Companies i.e subsidiary companies of BKT Exim Limited; i.e. BKT (EUROPE) LTD., BKT EUROPE S.R.L. and BKT (USA) INC.

As required under the Listing Agreement with the Stock Exchanges, a Consolidated Financial Statement of the Company and all its subsidiaries is attached. The Consolidated Financial Statement has been prepared in accordance with Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, and form part of the Annual Report and Accounts.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. These documents will also be available for inspection by any members at the Corporate Office of the Company and that of respective subsidiary companies.

The financial data of the Subsidiaries have been furnished under ''Details of Subsidiaries'' forming part of the Annual Report.

DIRECTORS:

Shri Ashok Saraf, Shri Laxmidas Merchant, Shri Rajiv Poddar and Shri Subhash Chand Mantri retire by rotation and being eligible, offer themselves for re-appointment.

Necessary resolutions for their re-appointment are placed before the Shareholders. Your Directors commend the resolutions.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditor''s Certificate regarding Compliance of the same are made a part of this Annual Report.

FIXED DEPOSITS:

There are no deposits as on 31st March 2013.

INDUSTRIAL RELATIONS:

Industrial relations with staff and workers continue to be cordial.

PARTICULARS OF EMPLOYEES:

In terms of the provision of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company. Any members interested in obtaining such particulars may write to the Company Secretary at the Corporate Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

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

RESPONSIBILITY STATEMENT:

Pursuant to the requirement 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 accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review;

(iii) The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the accounts for the financial year ended 31st March, 2013 on a "going concern'''' basis.

AUDITORS:

The members are requested to appoint Auditors and fix their remuneration. Messers Jayantilal Thakkar & Co., Chartered Accountants, the retiring Auditors have furnished certificates of their eligibility for re-appointment as required under Companies Act, 1956.

CAUTIONARY STATEMENTS:

Certain statements in the "Management Discussion and Analysis" describing the Company''s views about the Industry, expectations/predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company''s operations may inter-alia be affected with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

APPRECIATION:

Your Company is grateful to its valued customers for their continuous co-operation and patronizing its products. A word of appreciation is also extended to Financial Institutions and Banks for their continuous co-operation and assistance in meeting the financial requirements of the Company. Your company would also like to thank its shareholders, employees, vendors and other service providers for their valuable services to the company.

Last but not least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors

ARVIND PODDAR

Chairman & Managing Director

Place : Mumbai,

Dated : 1st August, 2013


Mar 31, 2012

The Directors are pleased to present the 50th Annual Report and Audited Statement of Accounts for the year ended 31st March 2012.

(Rs. In Crores) Current Year ended Previous Year ended 31.03.2012 31.03.2011

Income from Operations and other Operating Income 2844.57 1953.12

Less: Excise Duty Recovered on Sales 24.61 18.98

Total Income from Operations (Net) 2819.96 1934.14

Gross Profit 481.36 349.38

Less: Depreciation and Amortisation 83.14 74.44

Profit before Tax 398.22 274.94

Less: Provision for Taxation

Current Tax 124.10 87.20

Deferred Tax (Net) 5.60 129.70 2.18 89.38

Profit after Tax 268.52 185.56

(Less)/Add: Adjustments relating to earlier years Excess/(Short) Provision of Taxation (3.35) 0.10

Profit after adjustment relating to earlier years 265.17 185.66

Balance brought forward from last year 389.31 237.93

PROFIT AVAILABLE FOR APPROPRIATIONS: 654.48 423.59

Transfer to General Reserve 549.91 18.56

Proposed Final Dividend 14.50 13.53

Tax on Final Dividend 2.35 2.19

Balance Carried forward to balance sheet 87.72 389.31

OPERATIONS:

Your Company mainly operates in one segment i.e. "tyres" with a focus on manufacture of wide range of "Off-Highway Specialty Tyres". These specialty tyres are meant for Agricultural, Industrial, Material Handling, Construction, Earthmoving (OTR), Forestry, Lawn & Garden Equipments and All Terrain Vehicles (ATV). Around 90% of our revenue is generated through exports.

During the year under consideration your Company has witnessed a good surge in its top line which was grown by 46%. The Net Turnover and other Income of the company increased from Rs.1,934 Crores to Rs.2,820 Crores in the year under consideration.

The Gross Profit of the Company for the year under consideration has increased from Rs.349 Crores to Rs. 481 Crores and correspondingly, the profit after tax has increased to Rs.269 Crores as compare to Rs.186 Crores in the previous year.

Your Company continues to enjoy the status of "STAR TRADING HOUSE".

DIVIDEND:

Your Directors are pleased to recommend a higher Dividend of Rs.1.50 (75%) for the year, with a total payout of Rs. 16.85 Crores, including Tax on Dividend.

CAPITAL EXPENDITURE

During the year, the company has incurred capital expenditure of Rs.150 Crores (approx.) on account of increase in small production capacity at all the three plants through de-bottlenecking and regular maintenance capax at all three plants.

The company also incurred capital expenditure of Rs. 531 Crores (approx.) in connection with its upcoming green field tyre project at Bhuj in the State of Gujarat which is progressing as per schedule.

OUTLOOK FOR THE CURRENT YEAR 2012-2013:

Though the company is seeing continuity in demand of its products in the current financial year in line with that of previous year, the fear of slow down, particularly in Europe & America, is looming large over the company which are the major markets for the company. The said demand is coming from across the geographies. While the replacement demand is constant, the demand from OEM segment is showing some sign of moderation.

The raw material prices and other input costs have started softening in the current financial year as compared to previous year. If the softening in raw material prices and other inputs costs continues, the margins of the company in the current financial year is expected to be better than that of previous year.

The company continues to expand its base through developing new product lines, venturing into new geographies and deeper penetration into existing markets to ensure its sustainable growth.

OPPORTUNITY & THREATS:

OPPORTUNITIES:

The segment in which your company operates is predominantly known as "large varieties - low volume" - a segment that restricts optimal capacity utilization. It is a capital intensive as well as labour intensive proposition, making it un-attractive for fresh investments by major players. Your Company is fully geared up to take advantage of the peculiarities of the said segment and has developed a large base of SKUs to meet the diverse needs and applications.

Moreover, the segment is not exposed to any technological obsolescence and wild fluctuations in demand of its products.

The Company has incremental opportunity to develop the "Earth Moving Tyres" (OTR) markets and take advantage of the shift from bias to radial tyres, which is picking up rapidly. In this pursuit, the company has already set up an all-steel OTR Radial tyre plant at its Chopanki location and thereby become the first company in India to set up such plant. Your company is in the process of expanding its base into its various sub-segments like agricultural, industrial, construction, mining, winter and solid tyres under both the technology - bias as well as radials.

THREATS:

Like any other Company, your Company is also exposed to various threats like competition from small players, retention of employees, labor unrest, increase in raw material prices and other input costs etc.

RISKS / CONCERNS AND RISK MITIGATION:

Fluctuation in Raw Material prices: The Company's major raw material is Natural Rubber, which is an agricultural commodity and actively traded on the commodities exchanges. Its prices fluctuate significantly and have moved up considerably in the past. Currently there has been a softening in the prices of natural rubber and other raw materials. The softening in prices is likely to continue for some more time. The softening in raw material prices may help the company to improve its margin; however, it may be offset as the company may have to pass on the benefits to the customers.

Since most of the raw materials used by company are imported, the softening in raw material prices will also be negated by depreciating INR against USD. The increase in utility cost and other administrative costs may also marginally affect the profitability of the company adversely.

In order to minimize such risks, the Company not only enters into medium-term contracts but also adopts the policy of "Buy and Stock" large quantities during the lean period.

Labour Relations: Since the nature of Company's manufacturing process is that of batch processing, it requires lot of skilled as well as un-skilled workers. Maintaining a huge work force is a big challenge.

In order to mitigate the said risk, the Company follows good HR practices and spends a lot of money and Management's time for their welfare, safety and to improve the quality of work environment. All workers are paid more than adequate remuneration for their work.

Retention of skilled manpower: Like other players in the industry, the Company is also exposed to this risk, more particularly when there is shortage of skilled manpower in the industry.

The Company is able to manage the said risk by good HR practices and rewarding its employees handsomely.

Currency fluctuation: Since approximately 90% of the Company's revenues are generated through exports and the Company also imports lot of its raw materials and capital equipments. Moreover, all its borrowings are in foreign currency. It is therefore exposed to risks due to currency fluctuations.

The Company follows the system of hedging its receivables and major payments well in advance by entering into Forward Contracts, thereby largely protects itself from fluctuations in currencies.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Internal Auditors of the Company conduct Audits of various departments to ensure that the necessary controls are in place. The Audit Committee of the Board reviews these and the Company, when needed, takes corrective actions.

HUMAN RESOURCES:

The Company's human resources continue to be the biggest asset of the Company. The team has remained as committed as ever and produced results that are considered significant. Quality, quick delivery and focus on resolving customer issues are the hallmark of the team performance. There is a strong focus on TEAM spirit. During the year, many events were conducted to develop the personality and outlook of its employees. Employee relations continue to be cordial.

SUBSIDIARY COMPANIES:

The company has following 100% subsidiary companies:

Balkrishna Paper Mills Limited, Balkrishna Synthetics Limited, BKT Tyres Limited , BKT Exim Limited and Indirect subsidiary Companies i.e subsidiary companies of BKT Exim Limited; i.e. BKT (EUROPE) LTD., BKT EUROPE S.R.L. and BKT (USA) INC.

As required under the Listing Agreement with the Stock Exchanges, a Consolidated Financial Statement of the Company and all its subsidiaries is attached. The Consolidated Financial Statement has been prepared in accordance with Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, and form part of the Annual Report and Accounts.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. These documents will also be available for inspection by any members at the Corporate Office of the Company and that of respective subsidiary companies.

The financial data of the Subsidiaries Companies have been furnished under 'Details of Subsidiaries' forming part of the Annual Report.

DIRECTORS:

Shri Dharaprasad Poddar, Chairman of the Company has resigned from the Board of Directors of the Company w.e.f. 29th May, 2012 due to old age. The board requested him to continue as Chairman Emeritus and he was kind enough to accept the request of the board. The Board places on record its deepest appreciation for the inspired leadership provided by Shri Dharaprasad Poddar during his tenure as Chairman on the Board of Directors of the Company.

Shri Basantkumar Bansal, Director (Finance) has resigned from the Board of Directors of the Company w.e.f. 11th February, 2012, however he is continuing his employment with the company as CFO designated as Director (Finance). Shri Bansal has put in his sincere and dedicated efforts into the Company. Your directors take on record their sincere appreciation for the valuable services rendered by him during his tenure on the Board of Directors of the Company.

Shri Anurag Poddar, Executive Director has resigned from the Board of Directors of the Company w.e.f. 29th May, 2012. Shri Anurag Poddar has put in his sincere and dedicated efforts into the Company. Your directors take on record their sincere appreciation for the valuable services rendered by him during his tenure with the Company.

Due to resignation of Shri Dharaprasad Poddar as a Chairman of the Company, Shri Arvind Poddar, Vice Chairman & Managing Director has been re-designated as Chairman & Managing Director of the Company w.e.f. 30th May, 2012.

Shri Vipul Shah has been inducted as an Additional Director and Whole Time Director of the Company designated as Director & Company Secretary w.e.f. 11th February, 2012 and holds office till the date of the ensuing Annual General Meeting.

Smt. Vijaylaxmi Poddar has been inducted as an Additional Director and Whole Time Director of the Company designated as Executive Director w.e.f. 30th May, 2012 and holds office till the date of the ensuing Annual General Meeting.

The Company has received notice from one of the Shareholder proposing the name of Shri Vipul Shah and Smt. Vijaylaxmi Poddar, as the Directors of the Company.

Shri Sanjay Asher, Shri Rameshkumar Poddar, Shri Khurshed Doongaji and Shri Sachin Nath Chaturvedi retire by rotation and being eligible, offer themselves for re-appointment.

Necessary resolutions for their appointment are placed before the Shareholders. Your Directors commend the resolutions.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditor's Certificate regarding Compliance of the same are made a part of this Annual Report.

FIXED DEPOSITS:

There are no deposits as on 31st March 2012.

INDUSTRIAL RELATIONS:

The industrial relations with staff and workers during the year under review continue to be cordial.

PARTICULARS OF EMPLOYEES:

In terms of the provision of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report.

However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company. Any members interested in obtaining such particulars may write to the Company Secretary at the Corporate Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

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

RESPONSIBILITY STATEMENT:

Pursuant to the requirement 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 accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review;

(iii) The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the accounts for the financial year ended 31st March, 2012 on a "going concern" basis.

AUDITORS:

The members are requested to appoint Auditors and fix their remuneration. Messers Jayantilal Thakkar & Co., Chartered Accountants, the retiring Auditors and who have furnished certificates of their eligibility for re-appointment as required under Companies Act, 1956.

CAUTIONARY STATEMENTS:

Certain statements in the "Management Discussion and Analysis" describing the Company's views about the Industry, expectations/predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company's operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

APPRECIATION:

Your Company is grateful to its valued customers for their continuous co-operation and patronizing its products. A word of appreciation is also extended to its Financial Institutions and Banks for their continuous co-operation and assistance in meeting the financial requirements of the Company. Your company would also like to thank its shareholders, employees, vendors and other service providers for their valuable services to the company.

Last but not least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors ARVIND PODDAR

Chairman & Managing Director

Mumbai,

Dated : 30th May, 2012

 
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