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Directors Report of Escorts Ltd.

Mar 31, 2016

Dear Shareholder''s

The Directors have pleasure in presenting the Seventieth Annual Report for the year ended on March 31, 2016.

Financial Results

(Rs. Cr)

Particulars For the year ended on For the year ended on March 31,2016 March 31,2015

Gross Revenue 3610.70 4122.29

Excise Duty 80.70 75.81

Net Revenue 3530.00 4046.48

Profit Before Interest, Depreciation, Amortisation, Exceptional Items & Tax 217.78 222.05

Finance Cost 51.29 57.11

Profit Before Depreciation, Amortisation, Exceptional Items & Tax 166.49 164.94

Depreciation and Amortisation 60.11 66.06

Profit Before Exceptional Items & Tax 106.38 98.88

Exceptional Income 14.51 30.63

Profit Before Tax 91.87 68.25

Tax 2.49 (6.46)

Profit After Tax 89.38 74.71

Financial Performance

The brief highlights of the Company''s performance for the financial year ended March 31, 2016 are:-

- Net Revenue of the Company for the Financial Year 2015-16 was Rs.3530 Cr.

- Profit Before Interest, Depreciation, Amortisation, Exceptional Items & Tax stood at Rs.217.78 Cr.

- Profit Before Tax (PBT) stood at Rs.91.87 Cr and Profit After Tax (PAT) stood at Rs.89.38 Cr. Earnings per share is of Rs.7.49 for the year under review.

- Your Company sold 51455 tractors during the year under review.

Management Discussion & Analysis

Management Discussion & Analysis which forms an integral part of this Annual Report provides a detailed analysis on the performance of individual businesses and their outlook.

Dividend

Your Directors are pleased to recommend a Dividend of Rs.1.20 per Equity Share (12%) on the face value of Rs.10 each, aggregating Rs.14.71 Cr. (exclusive of tax on dividend) for the financial year ended March 31, 2016. The dividend payout is subject to the approval of members at the ensuing Annual General Meeting (AGM).

The dividend, if approved at the ensuing AGM, will be paid to members whose names appear in the Register of Members as on September 9, 2016; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date.

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

Employee Stock Option Scheme

The particulars with regard to the Employees Stock Options as on March 31, 2016 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, are enclosed at Annexure - A and forms an integral part of this Report.

Directors

In accordance with the provisions of Companies Act, 2013 (hereinafter referred as "the Act") and Articles of Association of the Company, Mr. Hardeep Singh and Mr. G.B. Mathur, Directors retires by rotation at the ensuing AGM and being eligible, offers themselves for re-appointment.

The Board of Directors, in their meeting held on May 25, 2016, co-opted Mr. D J Kakalia as Additional Director on the Board of the Company. He shall hold office as Director of the Company upto the date of ensuing AGM.

Mr. S.C. Bhargava had resigned as Director of the Company w.e.f. March 29, 2016. The Board places on record its appreciation for the valuable guidance and services rendered by him during his tenure with the Company.

Pursuant to the provisions of Section 149 and other applicable provisions of the Act, your directors are seeking appointment of Mr. D J Kakalia as Independent Director for a period of 3 years. The Company has received requisite notice in writing from members proposing the appointment of Mr. D J Kakalia as Director of the Company

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed under sub-section (6) of Section 1 49 of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "the Listing Regulations"). The policy for selection of directors and determining directors independence is attached as Annexure - B and forms an integral part of this Report.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive and Executive Directors. In accordance with the Policy, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. The remuneration policy for directors, key managerial personnel and other employees is annexed as Annexure - C and forms an integral part of this Report.

The brief resumes and other details relating to the Directors who are proposed to be appointed/ re-appointed, as required to be disclosed under the Listing Regulations is given in the Annexure to the Notice of the 70th AGM.

Your Directors recommend the appointment/ re-appointment of the above said Directors at the ensuing AGM.

The details of programme for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company - www. escortsgroup.com.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 are provided as Annexure - D and forms an integral part of this Report.

Corporate Governance

Your Company reaffirms its commitment to the good corporate governance practices and has adopted the Code of Conduct which has set out the systems, processes and policy conforming to international standards. Pursuant to the Listing Regulations, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are enclosed as Annexure - E and forms an integral part of this Report.

Corporate Social Responsibility

The key philosophy of all CSR initiatives of the Company is to make CSR a key business process for sustainable development of the society. The initiatives aim at enhancing welfare measures of the society based on the immediate and long term social and environmental consequence of its activities.

The Company intends to undertake other need based initiatives in compliance with Schedule VII of the Act.

The CSR Policy may be accessed on the Company''s website www.escortsgroup.com under Investors Information Section. During the year, the Company has spent Rs.1.16 Cr. (0.71% of the average net profits of last three financial years) on CSR activities.

The Annual Report on CSR activities is enclosed as Annexure

- F and forms an integral part of this Report.

Consolidated Financial Statements

The Consolidated Financial Statements have been prepared in accordance with the Act and Accounting Standard (AS) - 21 applicable to the Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interests in Joint Ventures issued by The Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements along with the Auditors'' Report thereon are annexed with this Report.

Subsidiaries, Joint Ventures and Associate Companies

The statement containing salient features of financial statements of subsidiaries, associate and joint venture companies prepared in accordance with Section 129 of the Act read with Rule 5 of Companies (Accounts) Rules, 2014, forms an integral part of this Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiaries, associate and joint venture companies.

The Company will make available the Annual Accounts of its subsidiaries, associate and joint venture companies and related information to the members of the Company who may be interested in obtaining the same. The annual accounts of its subsidiaries, associate and joint venture companies will also be kept open for inspection at the Registered Office of the Company

Contracts and Arrangements with Related Parties

All contracts/ arrangements/ transaction entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on the materiality of related party transactions.

The particulars of contracts and arrangement with related parties under Section 188(1) of the Act in Form AOC-2 is enclosed as Annexure - G.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website www. escortsgroup.com under Investors Information Section.

Your Directors draw attention of the members to Note 45 to the financial statement which sets out related party disclosures.

Auditors and Auditors'' Report Statutory Auditors

M/s. S.N. Dhawan & Co., Chartered Accountants, Delhi (Firm Registration No. 000050N) Statutory Auditors of the Company, hold office till the conclusion of the ensuing AGM and are eligible for re-appointment.

The Company has received letter of confirmation from M/s. S. N. Dhawan & Co., Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Act and that they are not disqualified for such appointment within the meaning of Section 141 of the Act read with Companies (Audit and Auditors) Rules, 2014.

The observations and comments given by the Statutory Auditors in their report read together with notes to Accounts are self-explanatory and hence, do not call for any further comments under Section 134 of the Act.

Cost Auditors

The Board of Directors of the Company has re-appointed M/s. Ramanath Iyer and Co., Cost Accountants, New Delhi (Firm Registration No. 000019), Cost Auditors of the Company under Section 148 of the Act for conducting the audit of cost records for the financial year 2016-17.

The due date of filing the Cost Audit Report for the year ended on March 31, 2015 was September 30, 2015 and the same has been filed on September 28, 2015.

Secretarial Auditors

The Board of Directors of the Company had appointed M/s. Jayant Gupta and Associates, Practicing Company Secretary to conduct secretarial audit of the Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is enclosed as Annexure - H and forms an integral part of this Report.

The observations and comments given by the Secretarial Auditors in their report are self-explanatory and hence, do not call for any further comments under Section 204(3) of the Act.

The Board has also re-appointed M/s Jayant Gupta and Associates, Practicing Company Secretary to conduct secretarial audit of the Company for the financial year 2016-17.

Risk Management

A Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) overseeing and approving the Company''s enterprise wide risk management framework; and (b) overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Risk Management Policy was reviewed and approved by the Committee.

Internal Financial Controls

The Company has in place adequate internal financial controls for ensuring the orderly and efficient conduct of its business. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

Disclosures Meetings of the Board

Six meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance annexed as Annexure - E to this Report.

Audit Committee

All the recommendations made by the Audit Committee were accepted by the Board.

For constitution and other details of the Audit Committee, please refer Report on Corporate Governance annexed as Annexure - E to this Report.

Extracts of Annual Return

In terms of provisions of Section 92 of the Act read with the Companies (Management and Administration) Rules, 2014, the extracts of Annual Return in Form MGT-9 is enclosed as Annexure - I and forms an integral part of this Report.

Vigil Mechanism

The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. The mechanism provides for adequate safeguards against victimization of effected Director(s) and Employee(s). In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. The Whistle Blower Policy is available on Company''s website.

Shifting of Registered Office

The Company has shifted its registered office within the State of Haryana from "SCO-232, First Floor, Sector - 20, Panchkula - 134 109" to "15/5, Mathura Road, Faridabad - 121 003" w.e.f. January 30, 2016.

Registrar and Share Transfer Agent

The Company has appointed M/s Karvy Computershare Private Limited, Karvy Selenium, Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032, Andhra Pradesh w.e.f February 19, 2016 as Registrar and Share Transfer Agent.

Particulars of Loans given, Investments 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 utilised by the recipient has been given elsewhere in the Annual Report and forms an integral part of this Report.

Particulars of Employees and related disclosures

In terms of provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the prescribed limits is available with the Company Secretary. Having regard to the provisions of Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company and the same will be furnished on request.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - J and forms an integral part of this Report.

Public Deposits

The Company has not accepted/ renewed any Fixed Deposit during the financial year.

Transfer to Investor Education and Protection Fund

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

As on March 31, 2016, no unclaimed deposits are pending for transfer to Investor Education and Protection Fund.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 1 34(5) of the Act with respect to Directors'' Responsibility Statement, your Directors hereby state that:

(i) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed alongwith proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit and loss of the Company for the year ended on that date;

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

(iv) the Directors have prepared the annual accounts for financial year ended March 31, 2016 on a ''going concern'' basis;

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

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

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

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

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

4. Neither the 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 status and Company''s operations in future.

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.

Acknowledgement

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Haryana, Karnataka and Uttaranchal, Financial Institutions and the Company''s Bankers, Customers and Dealers.

The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board of Directors

Sd/-

Place: Faridabad RAJAN NANDA

Date: May 25, 2016 Chairman & Managing Director


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Sixty Ninth Annual Report for the year ended on March 31, 2015.

Financial Results

Particulars For the period of For the period of 12 months ended 18 months ended on March 31, 2015 on March 31, 2014

(Rs. Cr)

Gross Revenue 4122.29 6505.79

Excise Duty 75.81 132.87

Net Revenue 4046.48 6372.92

Profit Before Interest, 222.05 462.65 Depreciation,Amortisation, Exceptional Items & Tax

Finance Cost 57.11 110.67

Profit Before Depreciation, 164.94 351.98 Amortisation, Exceptional Items & Tax

Depreciation and Amortisation 66.06 83.22

Profit Before Exceptional 98.88 268.76 Items & Tax

Exceptional Income 30.63 (3.64)

Profit Before Tax 68.25 272.40

Tax (6.46) 27.51

Profit After Tax 74.71 244.89

Financial Performance

* The brief highlights of the Company''s performance for the financial year ended March 31, 2015 are:-

*Net Revenue of the Company for the Financial Year 2014-15 was Rs. 4046.48 Cr.

*Profit Before Interest, Depreciation, Amortisation, Exceptional Items & Tax stood at Rs. 222.05 Cr.

* Profit Before Tax (PBT) stood at Rs. 68.25 Cr and Profit After Tax (PAT) stood at Rs. 74.71 Cr. Earnings per share is of Rs. 6.26 for the year under review.

* Your Company sold 59779 tractors during the year under review.

Management Discussion & Analysis

Management Discussion & Analysis which forms an integral part of this Annual Report provides a detailed analysis on the performance of individual businesses and their outlook.

Dividend

Your Directors are pleased to recommend a Dividend of Rs. 1.20 per Equity Share (12%) on the face value of Rs. 10 each, aggregating Rs. 14.71 Cr (exclusive of tax on dividend) for the financial year ended March 31, 2015. The dividend payout is subject to the approval of members at the ensuing Annual General Meeting (AGM).

The dividend, if approved at the ensuing AGM, will be paid to members whose names appear in the Register of Members as on Friday, September 4, 2015; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as at that date.

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

Employee Stock Option Scheme

The particulars with regard to the Employees Stock Options as on March 31, 2015 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, are enclosed at Annexure - A and forms an integral part of this Report.

Directors

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Mr. Hardeep Singh, Director retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The Board of Directors, in their meeting held on January 16, 2015, co-opted Dr. Sutanu Behuria, Ms. Nitasha Nanda and Mr. G.B. Mathur as Additional Directors on the Board of the Company. They shall hold office of Director(s) upto date of ensuing AGM.

Further, Ms. Nitasha Nanda, has been appointed as Whole-time Director for a period of 5 years w.e.f. January 16, 2015, liable to retire by rotation, subject to the approval of the shareholders in the ensuing AGM. Her appointment is appropriate and in the best interest of the Company.

Pursuant to the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Dr. Sutanu Behuria as Independent Director for a period of 3 years. The Company has received requisite notices in writing from members proposing Dr. Sutanu Behuria, Ms. Nitasha Nanda and Mr. G.B. Mathur for appointment as Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. The policy for selection of directors and determining directors independence is attached as Annexure - B and forms an integral part of this Report.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive and Executive Directors. In accordance with the Policy, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. The remuneration policy for directors, key managerial personnel and other employees is annexed as Annexure - C and forms an integral part of this Report.

The brief resumes and other details relating to the Directors who are proposed to be appointed/ re-appointed, as required to be disclosed under Clause 49 of the Listing Agreement is given in the Annexure to the Notice of the 69th AGM.

Your Directors recommend the appointment/ re-appointment of the above said Directors at the ensuing AGM.

The details of programme for familarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company - www.escortsgroup.com.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided as Annexure - D and forms an integral part of this Report.

Corporate Governance

Your Company reaffirms its commitment to the good corporate governance practices and has adopted the Code of Conduct which has set out the systems, processes and policy conforming to international standards. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are enclosed as Annexure - E and forms an integral part of this Report.

Corporate Social Responsibility

During the financial year ended March 31,2015, the Corporate Social Responsibility (CSR) Committee had been reconstituted by inducting Mr. G.B. Mathur and Mrs. Vibha Paul Rishi as members of the Committee w.e.f. January 16, 2015.

The CSR Committee comprises of following Directors:

1. Mr. Rajan Nanda (Chairman)

2. Mr. Nikhil Nanda

3. Mr. Hardeep Singh

4. Mr. S.C. Bhargava

5. Mrs. Vibha Paul Rishi

6. Mr. G.B. Mathur

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 CSR Policy and recommending the amount to be spent on CSR activities.

The key philosophy of all CSR initiatives of the Company is to make CSR a key business process for sustainable development of the society. The initiatives aim at enhancing welfare measures of the society based on the immediate and long term social and environmental consequence of its activities.

The Company intends to undertake other need based initiatives in compliance with Schedule VII of the Act.

The CSR Policy may be accessed on the Company''s website www.escortsgroup.com under Investors Information Section.

During the year, the Company has spent Rs. 0.78 Cr. (0.48% of the average net profits of last three financial years) on CSR activities.

Since being the first year of the CSR Committee, the Company under the guidance and directions of the Committee is formulating its initiatives for undertaking activities as identified in the CSR Policy. The full impact of the CSR spend shall be felt in the financial year 2015-16.

The Annual Report on CSR activities is enclosed as Annexure - F and forms an integral part of this Report.

Consolidated Financial Statements

The Consolidated Financial Statements in accordance with the Companies Act, 2013 and Accounting Standard (AS) - 21 applicable to the Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS- 27 on Financial Reporting of Interests in Joint Ventures issued by The Institute of Chartered Accountants of India have been prepared. The Audited Consolidated Financial Statements along with the Auditors'' Report thereon are annexed with this Report.

Subsidiaries, Joint Ventures and Associate Companies

The statement containing salient features of financial statements of subsidiaries, associate and joint venture companies prepared in accordance with Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, forms an integral part of this Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiaries, associate and joint venture companies.

The Company will make available the Annual Accounts of its subsidiaries, associate and joint venture companies and related information to the members of the Company who may be interested in obtaining the same. The annual accounts of its subsidiaries, associate and joint venture companies will also be kept open for inspection at the Registered Office of the Company.

Contracts and Arrangements with Related Parties

All contract/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on the materiality of related party transactions. The particulars of contracts and arrangement with related parties under Section 188(1) of the Act in Form AOC-2 is enclosed as Annexure - G.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website www.escortsgroup.com under Investors Information Section. Your Directors draw attention of the members to Note 46 to the financial statement which sets out related party disclosures.

Auditors and Auditors'' Report

Statutory Auditors

M/s. S.N. Dhawan & Co., Chartered Accountants, Delhi (Firm Registration No. 000050N) Statutory Auditors of the Company, hold office till the conclusion of the ensuing AGM and are eligible for re-appointment.

The Company has received letter of confirmation from M/s. S.N. Dhawan & Co., Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of Section 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

The observations and comments given by the Statutory Auditors in their report read together with notes to Accounts are self- explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

Cost Auditors

The Board of Directors of the Company has re-appointed M/s. Ramanath Iyer and Co., Cost Accountants, New Delhi (Firm Registration No. 000019), Cost Auditors of the Company under Section 148 of the Companies Act, 2013 for conducting the audit of cost records for the financial year 2015-16.

The due date of filing the Cost Audit Report for the eighteen months period ended on March 31, 2014 was September 30, 2014 and the same has been filed on September 22, 2014.

Secretarial Auditors

The Board of Directors of the Company has appointed M/s. Jayant Gupta and Associates, Practicing Company Secretary to conduct secretarial audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is enclosed as Annexure - H and forms an integral part of this Report.

The observations and comments given by the Secretarial Auditors in their report are self-explanatory and hence, do not call for any further comments under Section 204(3) of the Companies Act, 2013.

Risk Management

During the year, your directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) overseeing and approving the Company''s enterprise wide risk management framework; and (b) Overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Risk Management Policy was reviewed and approved by the Committee.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

Disclosures

Meetings of the Board

Five meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance annexed as Annexure - E to this Report.

Audit Committee

The Audit Committee comprises of the following Non-Executive Directors:

1. Dr. S.A. Dave - Independent Director (Chairman)

2. Mr. S.C. Bhargava - Independent Director

3. Mr. Hardeep Singh - Non-Independent Director

All the recommendations made by the Audit Committee were accepted by the Board.

Extracts of Annual Return

In terms of provisions of Section 92 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the extracts of Annual Return in Form MGT-9 is enclosed as Annexure - I and forms an integral part of this Report.

Vigil Mechanism

The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct. The mechanism provides for adequate safeguards against victimisation of Director(s) and Employee(s) who avail of the mechanism. In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. The Whistle Blower Policy is available on Company''s website.

Particulars of Loans given, Investments 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 utilised by the recipient has been given elsewhere in the Annual Report and forms an integral part of this Report.

Particulars of Employees and related disclosures

In terms of provisions of Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the prescribed limits are available with the Company Secretary. Having regard to the provisions of Section 136(1) of the said Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company and the same will be furnished on request.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - J and forms an integral part of this Report.

Public Deposits

The Company has not accepted/ renewed any Fixed Deposit during the financial year. All Fixed Deposits which were due and claimed by the deposit holders have been paid on time.

Transfer to Investor Education and Protection Fund

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

As on March 31, 2015, 136 unclaimed deposits for the period of seven years aggregating to Rs. 26.45 lacs were transferred to Investor Education and Protection Fund.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, your Directors hereby state that:

(i) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed alongwith proper explanation relating to material departures;

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

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

(iv) the Directors have prepared the annual accounts for financial year ended March 31, 2015 on a ''going concern'' basis;

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

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

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

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

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

4. Neither the 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 status and Company''s operations in future.

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.

Acknowledgement

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Haryana and Uttaranchal, Financial Institutions and the Company''s Bankers, Customers and Dealers.

The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board of Directors

Sd/- Place: Faridabad RAJAN NANDA Date: July 10, 2015 Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Sixty Eighth Annual Report for the 18 months period ended on March 31, 2014.

Financial Results (RS Cr) Particulars For the period of 18 For the period of 12 months ended months on September 30,2012 ended on March 31,2014

Gross Revenue 6505.79 4046.10

Excise Duty 132.87 103.32

Net Revenue 6372.92 3942.78

Profit Before Interest, Depreciation, Amortisation, Exceptional Items & Tax 462.65 231.14

Finance Cost 110.67 96.44

Profit Before Depreciation, Amortisation, Exceptional Items & Tax 351.98 134.70

Depreciation and Amortisation 83.22 48.43

Profit Before Exceptional Items & Tax 268.76 86.27

Exceptional Income 3.64 1.68

Profit Before Tax 272.40 87.95

Tax 27.51 18.35

Profit After Tax 244.89 69.60

Financial Performance

For the financial period of 18 months ended on March 31, 2014 your Company has recorded improved revenue and margin performance. The brief highlights of the Company''s performance are:-

- Net Revenue of the Company for the 18 months period was Rs.6,372.92 Cr.

- Profit Before Interest, Depreciation, Amortisation, Exceptional Items & Tax stood at Rs.462.65 Cr.

- Profit Before Tax (PBT) stood at Rs.272.40 Cr and Profit After Tax (PAT) stood at Rs.244.89 Cr. Earnings per share is of Rs.20.53 for the period under review.

- Your Company sold 1,00,833 tractors during the period under review.

Management Discussion & Analysis

Management Discussion & Analysis which forms an integral part of this Annual Report provides a detailed analysis on the performance of individual businesses and their outlook.

Dividend

Your Company paid an Interim Dividend of Rs.1.20/- per Equity Share (12%) on the face value of Rs.10 each, aggregating Rs.14.71 Cr (exclusive of tax on dividend) during the financial

period ended on March 31, 2014.

Your Directors are pleased to recommend a Final Dividend of 60 paisa per Equity Share (6%) on the face value of H10 each, aggregating H7.35 Cr (exclusive of tax on dividend) for the 18 months period ended on March 31, 2014. The dividend payout is subject to approval of members at the ensuing Annual General Meeting.

The dividend, if approved at the ensuing Annual General Meeting, will be paid to members whose names appear in the Register of Members as on Friday, September 5, 2014; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as at that date.

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

Employee Stock Option Scheme

The particulars with regard to the Employees Stock Options as on March 31, 2014 as required to be disclosed pursuant to

the provisions of Clause 12 of SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, are enclosed at Annexure - A and forms an integral part of this Report.

Extension of Financial Year

The Board of Directors of your Company had extended the financial year from the current period of 12 months ending September 30, 2013 to 18 months ended on March 31, 2014 for the purpose of aligning with the Companies Act, 2013 requirement with the permission of Registrar of Companies, NCT of Delhi & Haryana (ROC). The ROC has also granted extension of time for holding the Annual General Meeting of the Company upto September 21, 2014.

Directors

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Mr. Hardeep Singh, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Rajan Nanda, has been re-appointment as Managing Director for a further period of 5 years w.e.f April 1, 2015, subject to the approval of the shareholders in the ensuing Annual General Meeting. His appointment is appropriate and in the best interest of the Company.

The Board of Directors, in their meeting held on July 29, 2014, co-opted Mr. P.H. Ravikumar and Mrs. Vibha Paul Rishi as Additional Directors designated as Independent Directors on the Board of the Company. They shall hold office of Director upto the date of ensuing Annual General meeting.

Pursuant to the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Dr. S. A. Dave and Mr. S. C. Bhargava as Independent Directors for a period of 3 years. The Company has received requisite notices in writing from members proposing Mr. P.H. Ravikumar, Mrs. Vibha Paul Rishi, Dr. S.A. Dave and Mr. S.C. Bhargava for appointment as Independent Directors.

Dr. M.G.K. Menon and Dr. P.S. Pritam have resigned as Directors of the Company w.e.f. July 4, 2013 and June 4, 2014 respectively. The Board places on record their appreciation for the valuable guidance and services rendered by these Directors during their tenure with the Company.

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

The brief resumes and other details relating to the Directors who are proposed to be appointed/ re-appointed, as required to be disclosed under Clause 49 of the Listing Agreement, given in the Annexure to the Notice of 68th Annual General Meeting.

Your Directors recommend the appointment/ re-appointment of the above said Directors at the ensuing Annual General Meeting.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

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

Corporate Governance

Your Company reaffirms its commitment to the good corporate governance practices and has adopted the Code of Conduct which has set out the systems, processes and policy conforming to international standards. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are enclosed as Annexure - C and forms an integral part of this Report.

Corporate Social Responsibility

Your Directors have constituted the Corporate Social Responsibility Committee comprising of Mr. Rajan Nanda as Chairman, Mr. Nikhil Nanda, Mr. Hardeep Singh and Mr. S. C. Bhargava 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.

Consolidated Financial Statements

Your Company has prepared Consolidated Financial Statements in accordance with the Accounting Standard - 21 applicable to the Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. Audited Consolidated Financial Statements along with the Auditors'' Report thereon are annexed with this Report.

Subsidiary Companies

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached to the Balance Sheet of the Company. The Company will make available the Annual Accounts of its subsidiary companies and related information to the members of the Company who may be interested in obtaining the same. The annual accounts of its

subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

Auditors

M/s. S.N. Dhawan & Co., Chartered Accountants, Delhi (Firm Registration No. 000050N) Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from M/s. S.N. Dhawan & Co., Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of Section 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

The observations and comments given by the Statutory Auditors in their report read together with notes to Accounts are self- explanatory and hence, do not call for any further comments under Section 217 of the Companies Act, 1956.

Cost Auditors

M/s. Ramanath Iyer and Co., Cost Accountants, New Delhi (Firm Registration No. 000019), Cost Auditors of the Company under Section 233 of the Companies Act, 1956 have been re- appointed as the Company''s Cost Auditors for the financial year 2014-15.

Particulars of Employees

In terms of provisions 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. 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 the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

Directors'' 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 Annual Accounts for the financial period ended on March 31, 2014, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a

true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the financial period under review;

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

(iv) the Directors had prepared the annual accounts for financial period ended on March 31, 2014 on a ''going concern'' basis.

Public Deposits

The Company has not accepted/ renewed any Fixed Deposit during the financial period. All Fixed Deposits which were due and claimed by the deposit holders have been paid on time. As on March 31, 2014, 53 deposits aggregating to H0.11 Cr have matured but have not been claimed. Subsequently, out of the above, 11 deposits aggregating to H3 lacs have been repaid till the date of this report.

Transfer to Investor Education and Protection Fund

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

As on March 31, 2014, 123 unclaimed deposits for the period of seven years aggregating to H25.50 lacs were transferred to Investor Education and Protection Fund.

Acknowledgement

Your Directors would like to express their sincere appreciation for the positive co-operation received from the Central Government, the Government of Haryana and Uttaranchal, Financial Institutions and the Company''s Bankers, Customers and Dealers.

The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the period.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board of Directors

Sd/- Place: Faridabad AJAN NANDA Date: July 29, 2014 Chairman &Managing Director


Sep 30, 2012

Dear Shareholders,

The Directors have pleasure in presenting the Sixty Seventh Annual Report for the financial year ended 30th September, 2012.

FINANCIAL RESULTS (Rs. Crores)

Particulars 30.09.12 30.09.11

Gross Revenue 4046.10 3305.78

Excise Duty 103.32 25.96

Net Revenue 3942.78 3279.82

Profit Before Interest, Depreciation, Amortisation, Exceptional Items & Tax 231.14 189.71

Finance Cost 96.44 55.77

Profit Before Depreciation, Amortisation, Exceptional Items & Tax 134.70 133.94

Depreciation and Amortisation 48.43 37.97

Profit/(loss) Before Tax, Exceptional Items & Tax 86.27 95.97

Exceptional Income 1.68 4.65

Profit Before Tax 87.95 100.62

Tax 18.35 (19.47)

Profit After Tax 69.60 120.09

FINANCIAL PERFORMANCE

The Net Revenue of the Company for the year was Rs. 3942.78 Crores as against Rs. 3279.82 Crores in the previous year showing a growth of 20.21%. Sale of Tractors during the year was 60673 as against 63420 in the previous year.

Profit before Interest, Depreciation, Amortisation, Exceptional Items & Tax stood at Rs. 231.14 Crores against Rs. 189.71 Crores in the previous year.

Profit Before Tax (PBT) stood at Rs. 87.95 Crores against Rs. 100.62 Crores in the previous year and Profit After Tax (PAT) stood at Rs. 69.60 Crores against Rs. 120.09 Crores in the previous year. Earnings per share stands at Rs. 5.84 for the current year vis a vis Rs. 11.74 last year. MANAGEMENT DISCuSSIoN AND ANALYSIS Management Discussion and Analysis (refer page 10 to 18), which forms an integral part of this Annual Report; provides a more detailed analysis on the performance of individual businesses and their outlook.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 12% i.e. Rs. 1.20 per Equity Share of Rs. 10 each for the year ended 30th September, 2012, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date, subject to the approval of shareholders at the ensuing Annual General Meeting.

SCHEME OF ARRANGEMENT AND COMPROMISE

A Scheme of Arrangement and Amalgamation under Section 391 to 394 of the Companies Act, 1956 for the amalgamation of Escorts Construction Equipment Limited (''ECEL''), Escotrac Finance and Investments Private Limited (''Escotrac'') and Escorts Finance Investments and Leasing Private Limited (''EFILL'') (together ''Transferor Companies'') with the Company (hereinafter referred to as ''the Scheme''), has been sanctioned by the Hon''ble High Court of Punjab and Haryana at Chandigarh vide its order dated 9th August, 2012 and upon necessary filings with the Registrar of Companies, NCT of Delhi and Haryana by the Transferor Companies and Transferee Company, the Scheme has become effective on 12th October, 2012 and the effect thereof has been given in the financial statements from 1st October, 2011 being the appointed date under the Scheme.

Pursuant to the Scheme, the issued and paid up share capital of the Company has increased from Rs. 105.62 crores to Rs. 122.58 crores as 1,69,58,842 equity shares were allotted to the shareholders of the transferor companies. The Authorized Share Capital of the Company stands enhanced to Rs. 1289 crores.

The investments held by the Company in the merging entities have been cancelled and wherever required the investment held by the later were transferred to the Escorts Benefit and Welfare Trust in accordance with the Scheme. Furthermore, pursuant to the scheme, Rs. 97.40 crores, being the difference between the net assets of the transferor companies and the purchase consideration issued by the Company is adjusted in Reserves of the Company.

EMPLOYEE STOCK OPTION SCHEME

Disclosure pursuant to the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 is enclosed at Annexure - A and forms part of this Directors'' Report for the year ended 30th September, 2012.

DIRECTORS

In accordance with the provisions of Companies Act, 1956 and Articles of Association of Company, Dr. S.A. Dave and Mr. S.C. Bhargava, Directors retire by rotation at the ensuing Annual General Meeting of your Company, and being eligible, offer themselves for re-appointment.

The brief resumes and other details relating to the Directors who are proposed to be appointed/re-appointed, as required to be disclosed under Clause 49 of the Listing Agreement, forms part of the Report on Corporate Governance.

Your Directors recommend the appointment/re- appointment of the above said Directors at the ensuing Annual General Meeting.

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

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure - B and forms an integral part of this Report.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the good corporate governance practices. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are enclosed at Annexure - C and forms an integral part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Clause 32 and 50 of the Listing Agreement with Stock Exchanges, your Company has prepared Consolidated Financial Statements as per the Accounting Standards applicable to the Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. Audited Consolidated Financial Statements along with the Auditors'' Report are annexed with this Report. subsidiary COMPANIES

The Ministry of Corporate Affairs (MCA), Government of India vide General Circular No. 2/2011 dated 8th February, 2011 has issued directions under Section 212(8) of the Companies Act, 1956 granting general exemption from the applicability of the provisions of Section 212 of the Companies Act, 1956, in relation to the Subsidiary Companies, subject to the consent of the Board of Directors and fulfillment of the other conditions specified in the said Circular.

The Board of Directors, in their meeting held on 27th November, 2012 has given its consent for not attaching the Balance Sheet of the subsidiary companies in terms of the said circular and accordingly, the documents mentioned in Section 212 of the Companies Act, 1956 relating to the Company''s Subsidiaries are not attached to the Accounts of the Company. In terms of the said Circular, your Company has fulfilled the prescribed conditions and has also made the necessary disclosures in the consolidated Balance Sheet and further undertakes that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to Shareholders of the Company and its Subsidiary Companies seeking such information. These documents will also be available for inspection during business hours at the Head/Corporate office of the Company and of the respective Subsidiary Companies.

AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The observations of the Auditors in their Report on Accounts read with the relevant notes to accounts are self-explanatory. PARTICuLARS OF EMPLOYEES Information in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is annexed to this Report as Annexure - D.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, (the Act) your Directors state that:

i. In the preparation of Annual Accounts for the year ended 30th September, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Accounting policies selected and applied are consistent and judgement and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv. The Annual Accounts have been prepared on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted/renewed any Fixed Deposit during the year. All Fixed Deposits which were due and claimed by the deposit holders have been paid on time. As on 30th September, 2012, 375 deposits aggregating to Rs. 0.75 crores matured but were not claimed. Subsequently, out of the above, 31 deposits of Rs. 0.07 crores have been repaid till the date of this report.

ACKNOWLEDGEMENT

Your Directors wish to thank the Customers, Dealers, Lenders, Financiers, Vendors, the Central and State Governments and employees for their continued support and commitment to the Company.

On behalf of the Board

RAJAN NANDA

Place: Faridabad Chairman &

Date: 27th November, 2012 Managing Director


Sep 30, 2011

Dear Shareholders,

The Directors have pleasure in presenting the Sixty Sixth Annual Report for the financial year ended 30th September, 2011.

financial results

(Rs. Crores)



INCOME & PROFIT /(LOSS) year Ended year Ended 30.09.2011 30.09.2010

1. net Sales & Business Incomes 3,251.49 2,764.77

2. Total Expenses 3,076.96 2,533.47

3. Profit before Interest, Depreciation, 174.53 231.30 Amortisation & Exceptional Items (1-2)

4. Interest & Finance Charges 25.51 11.74

5. Cash Profit before Tax (3-4) 149.02 219.56

6. Depreciation & Amortisation 38.91 43.47

7. Profit/(Loss) before Tax & Exceptional 110.11 176.09 Items (5-6)

8. Exceptional Income/(Expense) 9.49 (11.93)

9. Tax & Deferred Tax (19.47) 50.47

10. Profit after Tax 120.09 137.55

Financial Performance

The net Revenue of the Company for the year was Rs. 3,251.49 crores as againstRs. 2,764.77 crores in the previous year showing a growth of 17.60 per cent. Sale of Tractors increased by 5.50 per cent to 63,420 from 60,086 in the previous year.

Earnings before Interest, Depreciation, Amortisation (EBITDA) stood at RS. 174.53 crores against Rs. 231.30 crores in the previous year.

Profit Before Tax (PBT) stood at Rs. 100.62 crores against Rs. 188.02 crores in the previous year and Profit After Tax (PAT) stood at Rs. 120.09 crores against Rs. 137.55 crores in the previous year. Earnings per share stands at Rs. 11.74 for the current year vis a vis Rs. 14.67 last year.

management discussion & Analysis

Management Discussion & Analysis (refer page 14 to 33) , which forms an integral part of this Annual Report; provides a more detailed analysis on the performance of individual businesses and their outlook.

dividend

your Directors are pleased to recommend a dividend @ 15 per cent i.e. Rs. 1.50 per Equity Share of Rs. 10 each for the year ended 30th September, 2011, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date, subject to the approval of shareholders at the ensuing Annual General Meeting.

scheme of Arrangement & compromise

The Scheme of compromise and arrangement pending before the Hon'ble Delhi High Court (High Court) to bail out the Fixed Deposit Holders of Escorts Finance Limited stand disposed off vide order dated 4th March, 2011. On the interim direction of the High Court, fixed deposit liability of Rs. 130.32 crores has already been discharged by the Hardship Committee constituted under the direction of the High Court. For discharging the liability of unclaimed deposit holders, balance 2,401,050 Equity Shares of Escorts Limited, have been transferred to Escorts Benefit Trust (Trust) and the Hardship Committee has been dissolved. The Trust in due course and in terms of the direction of the High Court is discharging the unclaimed deposit holders as and when claimed by the deposit holders.

employee stock option scheme

Disclosure pursuant to the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 is enclosed at Annexure-A and forms part of this Directors' Report for the year ended 30th September 2011.

directors

In accordance with the provisions of Companies Act, 1956 and Articles of Association of Company, Dr. M.G.K.Menon, Director retires by rotation at the ensuing Annual General Meeting of your Company, and being eligible, offers himself for re-appointment.

The Board of Directors, in their meeting held on 28th November, 2011, co-opted Mr. Hardeep Singh as an Additional Director on the Board of the Company. He shall hold office of Director up to date of ensuing Annual General Meeting. A notice under Section 257 of the Companies Act, 1956, proposing his candidature as Director at the ensuing Annual General Meeting of the Company, have been received.

Mr. nikhil nanda, has been re-appointed as Joint Managing Director for a further period of 5 years with effect from 19th September, 2012, subject to the approval of the shareholders in the ensuing Annual General Meeting.

The brief resumes and other details relating to the Directors who are proposed to be appointed/re-appointed, as required to be disclosed under Clause 49 of the Listing Agreement, forms part of the Report on Corporate Governance.

your Directors recommend the appointment/re-appointment of the above said Directors at the ensuing Annual General Meeting.

conservation of energy, technology Absorption, foreign exchange earnings And outgo

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure - B and forms an integral part of this Report.

corporate Governance

your Company reaffirms its commitment to the good corporate governance practices. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are enclosed at Annexure - C and forms an integral part of this report.

consolidated financial statements

Pursuant to Clause 32 and 50 of the Listing Agreement with Stock Exchanges, your Company has prepared Consolidated Financial Statements as per the Accounting Standards applicable to the Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. Audited Consolidated Financial Statements along with the Auditors' Report are annexed with this Report.

subsidiary companies

The Ministry of Corporate Affairs (MCA), Government of India vide General Circular no. 2/2011 dated 8th February, 2011 has issued directions under Section 212(8) of the Companies Act, 1956 granting general exemption from the applicability of the provisions of Section 212 of the Companies Act,1956, in relation to the Subsidiary Companies, subject to the consent of the Board of Directors and fulfillment of the other conditions specified in the said Circular.

The Board of Directors, in their meeting held on 28th November, 2011 has given its consent for not attaching the Balance Sheet of the Subsidiary Companies in terms of the said circular and accordingly, the documents mentioned in Section 212 of the Companies Act, 1956 relating to the Company's Subsidiaries are not attached to the Accounts of the Company. In terms of the said Circular, your Company has fulfilled the prescribed conditions and has also made the necessary disclosures in the Consolidated Balance Sheet and further undertakes that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to Shareholders of the Company and its Subsidiary Companies seeking such information. These documents will also be available for inspection during business hours at the Head/Corporate office of the Company and of the respective Subsidiary Companies.

Auditors

M/s. S.n. Dhawan & Co., Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment. The observations of the Auditors in their Report on Accounts read with the relevant notes to accounts are self-explanatory.

Particulars of employees

Information in accordance with provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended regarding employees is annexed to this Report as Annexure - D.

directors' responsibility statement

As required under Section 217 (2AA) of the Companies Act, 1956, (Act) your Directors state that:

i. In the preparation of Annual Accounts for the year ended 30th September, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Accounting policies selected and applied are consistent and judgment and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv. The Annual Accounts have been prepared on a going concern basis.

Public deposits

The Company has not accepted/renewed any Fixed Deposit during the year. All Fixed Deposits which were due and claimed by the deposit holders have been paid on time. As on 30th September, 2011, 869 deposits aggregating to RS. 1.58 crores matured but were not claimed. Subsequently, out of the above, deposits of Rs. 0.08 crores have been repaid till the date of this report.

Acknowledgement

your Directors wish to thank the Customers, Dealers, Lenders, Financiers, vendors, the Central and State Governments and employees for their continued support and commitment to the Company.

On behalf of the Board

Sd/-

Place : Faridabad RAJAN NANDA

Date : 28th November, 2011 Chairman & Managing Director


Sep 30, 2009

The Directors have pleasure in presenting the Sixty Fourth Annual Report for the Financial year ended 30,th September, 2009.

FINANCIAL RESULTS

Year Ended Year Ended 2009 2008

INCOME & PROFIT/(LOSS)

1. Net Sales & Business Incomes 2189.59 2051.55

2. Total Expenses 1982.15 1899.07

3. Profit before Interest, Depreciation, Amortisation & Exceptional Items (1 -2) 207.44 152.48

4. Interest & Finance Charges 51.54 55.93

5. Cash Profit before Tax (3-4) 155.90 96.55

6. Depreciation & Amortisation 49.15 51.01

7. Profit/(Loss) before Tax & Exceptional Items (5-6) 106.75 45.54

8. Exceptional lncome/(Expense) 4.31 (19.40)

9. Tax & Deferred Tax 21.33 14.97

10. Profit after Tax 89.73 11.87

The Company marginally improved its income by 6.7% during the year but a series of cost reduction initiatives led by over 6% reduction in material cost resulted in improved profitability with EBIDTA excluding other income up at 9.4% against 7.4% last year. Improved working capital management and overall debt reduction also resulted in reduced financial costs by 7.8%. Cash profit for the year improved significantly by over 61 % to Rs. 155.90 crores and Profit before Tax improved from Rs. 26.14 crores to Rs. 1 11.06 crores. Net Profit after Tax went up almost 8 times from Rs. 1 1.87 crores to Rs. 89.73 crores.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion & Analysis (refer page 10 to 19) which forms an integral part of this Annual Report provides a more detailed analysis on the performance of individual businesses and their outlook.

DIVIDEND

Your Directors are pleased to recommend a dividend @10% i.e. Re. 1 per Equity Share of Rs. 10 each for the year ended 30 September, 2009, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date, subject to the approval of shareholders at the ensuing Annual General Meeting.

BUSINESS RECONSTRUCTION RESERVE

In terms of the Scheme of Arrangement approved by the Honble High Court of Punjab & Haryana on 1 7 September, 2009 the Board of Directors of the Company have created a Business Reconstruction Reserve (BRR) by transferring amounts lying to the credit of Amalgamation Reserve, Capital Redemption Reserve, Revaluation Reserve and Share Forfeiture Reserve as on 1 "April, 2009. The Company has also revalued some fixed assets and the resultant difference in the value has also been transferred to the BRR. The Board has also approved the diminution/impairment/provisioning/write-offs of certain investments, fixed assets, doubtful debts & loans and advances, inventories, carry forward losses and other miscellaneous items from the BRR. The aggregate of the diminution/impairment/provisioning/write-offs etc. approved underthese heads is to the tune of Rs. 642.02 crores, for which BRR has been utilised as per the said Scheme.

SHARE CAPITAL

The Company has issued 3,611,612 Equity Shares of Rs. 10 each fully paid up at a price of Rs. 84.50 per share (including premium of Rs. 74.50 per share) in favour of the trustees of Escorts Employees Benefit & Welfare Trust under Employee Stock Option Scheme, 2006 on 9 November, 2009. Accordingly, the share capital of the Company has been increased to Rs. 94,32,11,080.

SCHEME OF COMPROMISE & ARRANGEMENT

Your Company had filed Scheme of Compromise & Arrangement ("Scheme") in the Honble High Court of Delhi to bail out fixed deposit holders of Escorts Finance Limited. The Scheme was approved by the Shareholders, Secured and Unsecured Creditors of your Company and the Fixed Deposit holders and Secured Creditors of Escorts Finance Limited on 1 0* May, 2006 and 5 May, 2006 respectively in the court convened meetings. The approval of the scheme by the court is still awaited. In compliance of the order of the High Court, Delhi, the Company has placed 34,04,256 shares of Rs. 32 crores at the disposal of Hardship Committee.

EMPLOYEE STOCK OPTION SCHEME

Disclosure pursuant to the SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 is enclosed at Annexure-A and forms part of the Directors Report for the year ended 30* September, 2009.

DIRECTORS

Mr. S.C. Bhargava, Director, retires by rotation at the ensuing Annual General Meeting of your Company, and being eligible, offers himself for reappointment.

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

Information required under Section 21 7(1) (e) of the Companies Act, 1 956 read with Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure- Band forms an integral part of this Report.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to good corporate governance practices. Pursuance to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are enclosed at Annexure - C and forms an integral part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Clause 32 and 50 of the Listing Agreement with Stock Exchanges, your Company has prepared Consolidated Financial Statements as per the Accounting Standards applicable to the Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. Audited Consolidated Financial Statements along with the Auditors Report are annexed with this Report.

SUBSIDIARY COMPANIES

During the year under report, the Company has disinvested its entire equity and preference shareholdings in Cellnext Solutions Ltd. Accordingly, Cellnext Solutions Ltd. is no longer a subsidiary of the Company.

The Honble High Court of Punjab & Haryana has approved the Scheme of Arrangement between Escorts Agri Machinery Inc. (EAMI), a wholly owned Subsidiary of the Company in USA and the Company vide its Order dated 17 September, 2009. The necessary formalities for the merger with Secretary of State of Delaware, USA have also been completed. Accordingly, EAMI has merged into the Company.

The Company has filed an application with the Central Government for exemption from attaching Annual Accounts and other documents in respect of its subsidiaries to the Annual Report of the Company for the year ended 30* September, 2009 and the approval of the Central Government on the same is being obtained.

Accordingly, statement in respect of each of the subsidiary, giving the details of capital, reserves, total assets and liabilities, details of investments, turnover, profit before taxation and proposed dividend is attached to the consolidated balance sheet.

The Annual Accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary company investors, seeking such information and will also be available for inspection at the Corporate Office of the Company.

AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for reappointment. The observations of the Auditors in their Report on Accounts read with the relevant notes to accounts are self-explanatory.

PARTICULARS OF EMPLOYEES

Information in accordance with provisions of Section 21 7(2A) of the Companies Act, 1 956 read with the Companies (Particulars of Employees) Rules, 1 975 as amended regarding employees is annexed to this Report as Annexure- D.

DIRECTORSRESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, (Act) your Directors state that:

i. In the preparation of Annual Accounts for the year ended 30lh September, 2009, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Accounting policies selected and applied are consistent and judgement and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv. The Annual Accounts have been prepared on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted/renewed any Fixed Deposit during the year. All Fixed Deposits which were due and claimed by the deposit holder have been paid on time. 1453 Fixed Deposits aggregating to Rs. 2.63 crores were unclaimed as on 30* September, 2009. Subsequently, out of the above, 8 deposits of Rs. 0.01 crores have been repaid till date.

ACKNOWLEDGEMENT

Your Directors wish to thank the Customers, Dealers, Lenders, Financiers, Vendors, the Central and State Governments and employees for their continued support and commitment to the Company. On behalf of the Board

Sd/- Place : New Delhi RAJAN NANDA

Date : 27th December, 2009 Chairman & Managing Director

 
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