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Directors Report of Force Motors Ltd.

Mar 31, 2015

To The Members,

The Directors present the 56th Annual Report, together with the Audited Financial Statements for the Financial Year ended on 31st March 2015.

1. Financial Results

Standalone

2014-15 2013-14 Rs. Rs.

Income from 2638,90,20,260 2301,13,77,716 Operations (Gross)

Other Income 65,77,63,716 59,93,50,506

Gross Profit (Profit 206,22,74,829 147,46,54,600 before Depreciation & Taxes)

Depreciation 81,28,43,342 84,83,84,924

Profit before Tax 124,94,31,487 62,62,69,676

Provision for Tax 23,58,04,250 (15,06,73,127)

Profit after Tax 101,36,27,237 77,69,42,803

Transfer to - 7,76,94,281 General Reserve

Proposed Dividend 6,58,81,310 3,95,28,786

Provision for Tax on 1,34,11,855 67,17,918 Distributed Profit

Balance in Profit 897,96,55,520 807,10,44,173 & Loss Account carried forward

Consolidated

2014-15 2013-14 Rs. Rs.

Income from 2639,27,21,873 2301,47,56,082 Operations (Gross)

Other Income 65,78,72,797 59,93,50,506

Gross Profit (Profit 206,60,44,254 147,79,95,584 before Depreciation & Taxes)

Depreciation 81,28,43,342 84,83,84,924

Profit before Tax 125,32,00,912 62,96,10,660

Provision for Tax 23,69,68,730 (14,96,38,127)

Profit after Tax 101,62,32,182 77,92,48,787

Less : Profit for the 8,74,606 7,74,230 year attributable to Minority Interest

Profit for the year 101,53,57,576 77,84,74,557 (after Minority Interest)

Transfer to General 6,52,000 7,82,71,281 Reserve

Proposed Dividend 6,58,81,310 3,95,28,786

Provision for Tax on 1,34,11,855 67,17,918 Distributed Profit

Balance in Profit & 899,35,27,180 808,36,18,586 Loss Account carried forward

Considering the strong reserve position of the Company, the Board of Directors of your Company decided not to transfer further amount from the profits for the Financial Year under report to General Reserve.

The Audited Consolidated Financial Statement in accordance with the Companies Act, 2013 (the Act for brevity) and Accounting Standard - 21 on Consolidated Financial Statement, is provided in this Annual Report.

2. State of Company's Affairs and Future Outlook

The business of the Company has grown steadily. Vans and Tractors produced by the Company have achieved improved sales and market shares. Systematic and detailed efforts have improved distribution and service network of the Company which has yielded good results, both for Vans and Tractors.

The Company has been preparing for the change in the regulatory environment arising from new emission norms, revised requirements for School Buses and Ambulances, and also specifically taking into account customer requirements for the type of vehicles the Company produces.

The Company's plants have shown good improvement in productivity and quality. Rationalization of procurement policies and focus on cost saving has also yielded benefits.

Thus, product development, manufacturing, material procurement and sales promotion activities of the Company, have all contributed to the steady progress.

The establishment of engine manufacturing factory as a dedicated factory for BMW India Pvt. Ltd.at Chennai and the project to establish a new engine and axle production facility for Mercedes Benz at Chakan near Pune, has enabled the Company to participate in the rapidly growing high performance luxury vehicles market in India, by working together with companies with leadership positions. It is expected that these businesses will also develop and grow rapidly.

Besides the Pithampur Plant, which is Company's main plant producing Traveller and Trax range of vehicles and having its own facilities for production of engines, transmissions etc., the Company has now separate factories in Chennai and Pune for producing engines and transmissions, as stated above for leading luxurious carmakers.

The Akurdi factory of the Company focuses mainly on the production of tractors.

The R&D activities, the production engineering and the tool manufacturing activities are located at Akurdi and have been expanded and modernized to tackle future challenges.

3. Change in Nature of Business, if any

During the year, there is no change in the nature of business of the Company.

4. Dividend

The Board of Directors has recommended a dividend of Rs. 5 per share on 1,31,76,262 equity shares of Rs. 10 each fully paid up.

5. Share Capital

The paid up equity share capital as on 31st March 2015 was Rs. 13.17 crore. During the period under review, the Company has not issued any shares with differential voting rights or granted stock options or sweat equity.

6. Extract of Annual Return

The extract of Annual Return as on 31st March 2015, pursuant to the provisions of Section 92 of the Act and Rules framed thereunder, in the prescribed form is annexed to this report.

7. Meetings of the Board of Directors

During the Financial Year 2014-15, the Meetings of the Board of Directors of the Company were held on 29th April 2014, 24th May 2014, 26th July 2014, 30th July 2014, 11th August 2014, 20th September 2014, 18thOctober2014,16th January 2015,26th February 2015and 12th March2015.

8. Particulars of Loans, Guarantees or Investments

The Company has not given loans, guarantees or made investments under Section 186 of the Act during the year under report. Particulars of investments made upto the previous financial year by the Company are provided in the Financial Statement attached to this report.

9. Particulars of Contracts or Arrangements with Related Party

All Related Party Transactions (RPTs) entered during the year were on arm's length basis. There were no material related party contract(s)or arrangement(s)or transaction(s) during the year as defined under Clause 49 of the Listing Agreement and there are no details in this regard to be disclosed in FormAOC-2.

During the year 2014-15, pursuant to Section 177 of the Act and Clause 49 of the Listing Agreement, all RPTs were placed before Audit Committee for its required approval. The policy on RPTs as approved by the Board is uploaded on the Company's website www.forcemotors.com and can be accessed at weblink: http://www.forcemotors.com/page/index/ shareholders_information.

10. Explanation / Comments on any Qualification of Auditors

There were no qualifications, reservations or adverse remarks made by either the Auditors or by the Company Secretary in Practice in their respective reports.

11. Material Changes and Commitments

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the Financial Year i.e. 31st March 2015 and the date of Report.

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

Conservation of Energy

Several steps are taken such as -

- Power factor is maintained to "UNITY"

- Auto switch off facility is installed for shop floor lighting during lunch and recess

- Machines are switched off when not in use

- Increasing use of transparent sheets for roofing, to cater for natural lighting

- Strong effort on controlling air leakages and equipment maintenance to minimize losses

- LED lighting for street lights for the Company's plants are now increasingly being installed

- Increased use of well water for select consumption

Technology Absorption

Company has been focusing on developing extremely light weight vans. The T-2 family of Traveller vehicles has a self weight which is approximately 1000 kg less than most competitive vehicles. Similar effort is under way to develop light weight options for other seating capacities. This development has called for strong effort in engineering including product and process development as also material selection.

The Company has completed the development aspect of a full range of Common rail engines which will be highly fuel efficient enabling a low carbon foot print.

The Company has developed a new family of transmissions with higher efficiency, low friction and high reliability, using lightweight materials. All these weight reduction activities and development of new engines and transmissions have called for significant technology development and absorption activity.

The expenditure on Research & Development for new products, including the expenditure on Projects and Tool Engineering, was 2.69 % of the operational turnover of the Company for the year under report. The Company continues to maintain its emphasis on Research, Development and Tool Engineering activities.

Foreign Exchange Earnings and Outgo

The foreign exchange outgo, arising out of the import of raw materials, components and capital goods, is as per the details mentioned in the Notes to Financial Statements.

13. Subsidiary Company

Tempo Finance (West) Private Limited is the subsidiary of the Company. The Board of Directors of the Company has reviewed the affairs of the Subsidiary Company. As per Section 129 of the Act, the Company has prepared the Consolidated Financial Statements of the Company and the Subsidiary Company, which form a part of the Annual Report. A statement containing the salient features of the Financial Statement of the Subsidiary Company in the prescribed formatAOC-1 forms part of the Audited Financial Statement of the Company. A copy of the Audited Financial Statements of Subsidiary Company will be made available to the Members of the Company, seeking such information. The Audited Financial Statements of Subsidiary Company will be kept for inspection by any Member at its Registered Office during business hours. The same is placed on the Company's website and can be accessed at weblink: http://www.forcemotors.com/page/index/ shareholders_information.

14. Risk Management

The Company has deployed a comprehensive Risk Management framework - to identify, monitor, review and take all necessary steps towards mitigation of various risk elements which can impact the existence of the Company, on a periodic basis.

All the identified risks are managed through continuous review of business parameters by the Management, and the Board of Directors are also informed of the risks and concerns.

15. Directors and Key Managerial Personnel

Mr. Vinay Kothari, Director of the Company, retires by rotation and being eligible offers himself for reappointment. All necessary information regarding the Director retiring by rotation is a part of the Statement attached to Notice dated 31st July 2015 and/or Report on Corporate Governance.

Mr. L. Lakshman, Mrs. Anita Ramachandran, Mr. Atul Chordia, Mr. S. A. Gundecha and Mr. R. B. Bhandari have ceased to be Directors of the Company, by resignation during the year under report. Board places on record its appreciation for the services rendered by them in their capacity as Directors.

Mr. Nitin Desai and Dr. Indira Parikh were appointed as Additional Directors of the Company during the year under report. Mr. Desai and Dr. Parikh were appointed as Independent Directors by the Members of the Company in their Meeting held on 20th September 2014. Mr. Prashant V. Inamdar was appointed as an Additional Director of the Company w.e.f. 16th January 2015, designated as Executive Director (Operations) subject to the Members' approval at the ensuing Annual General Meeting.

Mr. Sanjay Bohra, was appointed as the Chief Financial Officer and Key Managerial Personnel, of the Company w.e.f. 16th January 2015. Mr. Pradeep Dhadiwal was the Chief Financial Officer from 26th July 2014 till 16th January 2015, who continues to head the Controlling and IT functions.

16. Declaration of Independent Directors, Terms of Appointment & Disclosure of Appointment

The five Independent Directors - Mr. Pratap Pawar, Mr. S. Padmanabhan, Mr. Arun Sheth, Mr. Nitin Desai and Dr. Indira Parikh, have been appointed by the Members of the Company as Independent Directors for a period of 3 years w.e.f. 20th September 2014. The terms of their appointment are posted on the Company's website atwww.forcemotors.com and can be accessed at weblink: http://www.forcemotors.com/ page/index/ shareholders_information.

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Act so as to qualify themselves to be continued as Independent Directors under the provisions of the Act and the relevant Rules.

17. Details of Significant and Material Orders Passed by the Regulators or Court or Tribunal

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operation in future for the year under Report.

As reported earlier, petition challenging the decision of the Hon'ble High Court of Judicature at Bombay, in respect of change in the name of the Company is still under consideration of the Hon'ble Supreme Court of India.

18. Adequacy of Internal Financial Controls

M/s. Capri Assurance& Advisory Services, Chennai& M/s. Jugal S. Rathi, Chartered Accountants, Pune are appointed as the Internal Auditors of the Company. The internal financial controls are adequate with reference to the Financial Statement and size and operations of the Company.

19. Fixed Deposits

The details of deposits accepted/renewed during the year under review are furnished hereunder:

Sr. Particulars Nos. Amount in No. (Rs.)

a) accepted or renewed during 4 53,00,000 the year

b) remained unpaid or unclaimed 113 49,65,000 as at the end of the year (31st March 2015)*

c) whether there has been any default in - - repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved

i) at the beginning of the year - -

ii) maximum during the year - -

iii) at the end of the year - -

* includes 5 nos., fixed deposits amounting to Rs. 60,000 which are matured, claimed but have been withheld on the instructions of Statutory Authorities and will be paid upon their approval.

20. Secretarial Audit Report

Mr. I. U. Thakur, Company Secretary in Practice having Membership no. FCS 2298, was appointed to conduct the secretarial audit of the Company for the Financial Year 2014-15, as required under Section 204 of the Act and Rules made there under. The Secretarial Audit Report, in the prescribed Form MR-3, for the Financial Year 2014-15 is annexed to this report.

21. Corporate Social Responsibility (CSR)

The Annual Report on the CSR activities of the Company, pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed to this report.

22. Audit Committee

The Audit Committee consists of Mr. Pratap Pawar, Mr. S. Padmanabhan, Mr. Arun Sheth and Mr. Vinay Kothari.

The above composition of the Audit Committee consists of Independent Directors viz., Mr. Pratap Pawar, Mr. S. Padmanabhan and Mr. Arun Sheth who form the majority.

The Company has established a vigil mechanism, formulated a Whistleblower Policy, and the Committee would oversee the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The mechanism provides direct access to the Chairman of the Audit Committee in exceptional cases. The details of the mechanism/ policy are disclosed on the website of the Company www.forcemotors.com.

23. Policy on Directors Appointment and Criteria

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Act is available on the website of the Company www.forcemotors.com.

24. Formal Annual Evaluation of the Performance of Board/Committees and Directors

Information on the manner in which formal annual evaluation has been made by the Board of its own performance and the directors is given in the Report on Corporate Governance.

25. Corporate Governance

The Company has taken all necessary steps to implement the provisions of the Listing Agreement, and a detailed report on the various issues, including the Auditors' Report on Corporate Governance is attached to this report.

26. Details of Directors and Employees' Remuneration

The information required pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and the Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company upto the date of ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

27. Disclosure on Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. There are no complaints received during the year under report.

28. Details of Frauds Reported by Auditors

There are no such frauds against the Company reported by the Auditors for the period underreport.

29. Directors' Responsibility Statement

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) (c) of the Act:

a) in the preparation of the Annual Financial Statements for the year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) for the Financial Year ended 31st March 2015 such accounting policies as mentioned in the Notes to the Financial Statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the profit and loss of the Company for the year ended 31st March 2015;

c) that 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;

d) the annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

30. You are requested to appoint Auditors for the current year and fix their remuneration. M/s. P. G. Bhagwat, Chartered Accountants, Pune, Auditors to the Company, who retire at the ensuing Annual General Meeting, are eligible for reappointment.

31. The Company appointed M/s. Joshi Apte & Associates, Cost Accountants, Pune, for verification and review of the Cost Records of the Company, for the Financial Year2014-15.

32. The industrial relations at the Pithampur Plant continued to be cordial. The litigation connected with recognition of labour union at the Company's Akurdi, Pune Plant, is still pending before the Hon'ble Supreme Court of India.

33. The Directors express their grateful thanks to the Dealers, Suppliers and Banks for their support, and express their warm appreciation of the sincere co-operation and dedicated work by a majority of the employees of the Company.

For and on behalf of the Board of Directors Pune - 411 035 ABHAYKUMAR FIRODIA

31st July 2015. Chairman

DIN:00025179


Mar 31, 2014

The Members,

The Directors present the 55th Annual Report, together with the audited accounts for the Financial Year ended on 31st March 2014.

1. Financial Results 2013-14 2012-13

Income from 2301,13,77,716 2276,35,17,184

Operations (Gross)

Other Income 59,93,50,506 43,65,16,285

Profit before 147,46,54,600 89,28,83,139

Depreciation

Depreciation 84,83,84,924 70,15,66,527

Provision for

Taxes (Net) (15,06,73,127) 4,85,29,076

Profit After Tax 77,69,42,803 14,27,87,536

Proposed Dividend 3,95,28,786 3,95,28,786

Provision for Tax

on Distributed Profit 67,17,918 67,17,918

Transfer to General

Reserve 7,76,94,281 1,42,78,754

Balance in Profit &

Loss Account

carried forward 807,10,44,173 741,80,42,355

2. In view of acquisition of 6,31,139 equity shares of - 10 each by Jaya Hind Investments Private Limited on 17th February 2014, the Company has become a subsidiary Company of Jaya Hind Investments Private Limited, the promoter of the Company, within the meaning of Regulation 2 of Securities & Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The holding company, as of the date of report, holds 72,68,497 equity shares (55.16% of the paid up capital) of your Company.

3. Dividend

The Board of Directors has recommended a dividend of - 3 per share on 1,31,76,262 equity shares on 0 each fully paid up.

4. Name Change

As reported earlier, petition challenging the decision of the Hon''ble High Court of Judicature at Bombay, in respect of change in the name of the Company has been admitted by the Hon''ble Supreme Court of India. The operation of the order of the Hon''ble High Court has been stayed. The matter is still under consideration of the Hon''ble Supreme Court of India.

5. Market Situation

In view of the provisions of the Listing Agreement, the Market Situation and Status of Operations are dealt with in the "Management Discussion and Analysis" attached hereto.

6. Exports

The export turnover for the year under report was

- 49.17 crore against the previous year''s export of

- 35.68 crore.

7. Research & Development

The expenditure on Research & Development, for new products, including the expenditure on Projects and Tool Engineering, was 3.90% of the operational turnover of the Company for the year under report. The Company continues to maintain its emphasis on research, development and tool engineering activities.

8. Foreign Collaborations

(a) During the year under consideration, the Company obtained technical assistance from M/s. AVL, Graz, Austria, for the engineering and development of a series of common rail engines, capable of BS IV / Euro IV emission standards, and which will also cater for the next level of emissions. Also assistance was obtained for further enhancement of the robustness, the reliability and life cycle of the engines.

(b) The Company also received technology assistance from Magna Steyr India Pvt. Ltd. for upgradation of transmissions.

(c) The period of the license arrangement, with ZF Friedrichshafen AG, Germany, for the technology for truck gearboxes ended. The Company has the right to continue to manufacture the products.

(d) The Company continues to have the benefit of technical assistance of Dr. Rolf Bacher, Germany, and of Prof. Wolfgang Kraus.

9. Industrial Relations

The litigation connected with recognition of labour union at the Company''s Akurdi, Pune Plant, is still pending before the Hon''ble Supreme Court of India. The industrial relations at the Pithampur Plant continued to be cordial. During the year under report, the permanent workmen of the Akurdi factory raised various demands. A reference has been made as per the provisions of the Industrial Disputes Act, 1947 in respect of these demands. The litigation connected with this reference is pending. The wage settlement with the workmen of Pithampur Plant is implemented satisfactorily.

10. Foreign Exchange

The foreign exchange outgo, arising out of the import of raw materials, components and capital goods, is as per the details mentioned in the Notes to Financial Statements.

11. Environment and Conservation of Energy

Several steps to save energy and natural resources like water are being taken so as to achieve energy saving and cost reductions. Installation and replacement of capacitors and compressors with high capacity have significantly contributed in energy saving and cost reductions. The Company has installed the latest generation robotic paint shop, obtained from Duerr AG, Germany, for painting of vehicle bodies. This, besides enabling dramatic improvement in paint coverage and paint quality, will result in approximately 10 per cent reduction in energy consumption.

12. Fixed Deposits

103 deposits amounting to ~ 35,05,000 matured for repayment on or before 31st March 2014 but remained unclaimed on that date. Out of these, 58 deposits amounting to ~ 19,45,000 have since been repaid.

13. Orders for Machinery

Since the close of the Accounting Year the Company has placed orders for new machinery, equipment and other capital assets of value ~ 4.79 crore.

14. Directors

Mr. Sudhir Mehta and Mr. R. B. Bhandari, Directors of the Company, retire by rotation and being eligible offer themselves for reappointment.

Mr. L. Lakshman, Mrs. Anita Ramachandran, Mr. Atul Chordia, Mr. S. A. Gundecha have ceased to be Directors of the Company, by resignation. Board places on records its appreciation for the services rendered by them in their capacity as Directors.

The Board of Directors of the Company, in its meetings held on 26th July 2014 and 11th August 2014, decided to put proposals for the appointment of Mr. Nitin Desai, Dr. Indira Parikh, Mr. Pratap Pawar, Mr. S. Padmanabhan and Mr. Arun Sheth as Independent Directors.

Considering the provisions of section 160 and 161 of the Companies Act, 2013, Jaya Hind Investments Private Limited has given notices for appointment of Mr. Nitin Desai, Dr. Indira Parikh, Mr. Pratap Pawar, Mr. S. Padmanabhan and Mr. Arun Sheth as Independent Directors for a period of 3 years.

All necessary information regarding these Directors retiring by rotation, additional director or independent director to be appointed is a part of the Statement attached to notice dated 11th August 2014 and/or report on Corporate Governance. The details of managerial remuneration are indicated in Note No. 38 Notes to Financial Statement (Schedule XIII). The term of appointment of Mr. Prasan Firodia, Managing Director of the Company, expires on 5th November 2014. The Board, and the Nomination and Remuneration Committee of the Board approved, subject to the approval of the Members of the Company, the proposal of reappointment of Mr. Prasan Firodia, Managing Director, for a further period of 5 years w.e.f. 6th

November 2014 and in respect of payment of remuneration to him as Managing Director of the Company.

Mr. Abhaykumar Firodia, Chairman of the Company, has agreed to assist the Company, by undertaking management responsibility, considering the expansion of business, the new projects to be implemented by the Company and accordingly, the Board, and Nomination and Remuneration Committee of the Board, in compliance with the provisions of the Companies Act, 2013, decided to put a proposal for the consideration of the Members of the Company, in the ensuing Annual General Meeting, to appoint Mr. Abhaykumar Firodia, as Managing Director, to be designated as the Chairman. Mr. Abhaykumar Firodia has indicated that he shall not draw any remuneration, including sitting fees, as a Managing Director of the Company, except the provision of cars and telephone.

15. Audit Committee

Mr. Pratap Pawar, Mr. S. Padmanabhan, Mr. Arun Sheth, Independent Directors, and Mr. Vinay Kothari, Non-Executive Director, are the Members of the Audit Committee.

16. Unclaimed Share Certificate and Suspense Account

Share certificates in respect of 4647 shares earlier issued as right shares or bonus shares were returned undelivered. The Company intimated the fact to the concerned Members from time to time including reminders issued as per the provisions of the Listing Agreement. List of these Members is hosted on the website of the Company.

17. Corporate Governance

The Company has taken all necessary steps to implement the provisions of the Listing Agreement, and a detailed report on the various issues, including the Auditors'' Report on Corporate Governance are attached to this Report.

18. Directors'' Responsibility Statement

As required by sub-section 2AA of Section 217 of the Companies Act, 1956, the Directors state that -

(a) in the preparation of Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit/loss of the Company for that period;

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

(d) the Annual Accounts are prepared on a going concern basis.

19. Other

Under the 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 employees are set out in the annexure to the Directors'' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the Members of the Company excluding the aforesaid annexure. The Members interested in obtaining a copy of the said annexure may write to the Company at the Registered Office of the Company. The Company had two employees who were in receipt of remuneration exceeding Rs. 5,00,000 per month and employed throughout the financial year.

20. You are requested to appoint Auditors for the current year and fix their remuneration. M/s. P. G. Bhagwat, Chartered Accountants, Pune, Auditors to the Company, who retire at the ensuing Annual General Meeting, are eligible for reappointment.

21. The Central Government has directed to conduct audit of the cost records of the Financial Year 2013-14 and accordingly M/s. Joshi Apte & Associates, Cost Accountants, Pune, were appointed as the Cost Auditors for that year. The Cost Audit Report is under preparation.

22. The Directors express their grateful thanks to the Dealers, Suppliers and Banks for their support, and express their warm appreciation of the sincere co-operation and dedicated work by a majority of the employees of the Company.

For and on behalf of the Board of Directors

Pune - 411 035 ABHAYKUMAR FIRODIA 11th August 2014. Chairman


Mar 31, 2013

To The Members''

The Directors present the 54th Annual Report'' together with the audited accounts for the Financial Year ended on 31st March 2013.

1. Financial Results

2012-13 2011-12

Income from 2276''35''17''184 2369''16''19''208

Operations (Gross)

Other Income 43''65''16''285 24''59''73''016

Exceptional Items 960''70''94''000

Gross Profit 89''28''83''139 1071''65''55''435

Depreciation 70''15''66''527 60''35''64''562

Provision for Taxes (Net) 4''85''29''076 186''96''72''785

Profit After Tax 14''27''87''536 824''33''18''088

Proposed Dividend 3''95''28''786 13''17''62''620

Provision for Tax on Distributed Profit 67''17''918 2''13''75''191

Transfer to General

Reserve 1''42''78''754 82''44''00''000

Balance in Profit & Loss Account Carried Forward 741''80''42''356 733''57''80''277

2. Dividend

The Board of Directors has recommended a dividend of Rs. 3 per share on 1''31''76''262 equity shares of Rs. 10 each fully paid up.

3. Name Change

As reported earlier'' petition challenging the decision of the Hon''ble High Court of Judicature at Bombay'' in respect of change in the name of the Company has been admitted by the Hon''ble Supreme Court of India. The operation of the orderof the Hon''ble High Court has been stayed. The matter is still under consideration of the Hon''ble Supreme Court of India.

4. TheJointVenture

As reported earlier'' the Heavy Commercial Vehicle Joint Venture with MAN Truck & Bus AG Germany'' was terminated w.e.f. 28th March 2012. As per the agreed arrangement'' Company was to provide common services till 27th March 2013. The arrangement regarding providing of common services stands terminated from 24th January 2013. The Company is continuing supply of Cabs and Gearboxes to MAN Trucks India Private Limited.

5. Market Situation

In view of the provisions of the Listing Agreement'' the Market Situation and Status of Operations are dealt with in the "Management Discussion and Analysis" attached hereto.

6. Exports

The export turnover for the year under report was Rs. 35.68 crore against the previous year''s export of Rs.23.96crore.

7. Research & Development

The expenditure on Research & Development'' for new products'' including the expenditure on Projects and Tool Engineering'' was 3.22 % of the operational turnover of the Company for the year under report. The Company continues to maintain its emphasis on research'' development and tool engineering activities.

8. Foreign Collaborations

As reported earlier the Company entered into a licensing agreement with Daimler AG'' Germany in respect of Multi-Purpose Vehicle (MPV). This project is progressing satisfactorily. The Company has received the agreed technology'' and has also procured dies'' tools required for the manufacture of MPV. The construction of buildings at Company''s Pithampur Plant to house the facilities for production of MPV is nearing completion. The supplier base'' for procurement of the parts of MPV'' is being established. The technology procured from Getriebe-und Zahnradfabrik Hermann HagenmeyerGmbH & Cie KG (GETRAG)'' in respect of Transaxles'' required in the manufacture of the MPV'' has been absorbed completely.

Continuous technical support'' as per the agreed arrangement'' is being availed by the Company from MB Tech Group GmbH KGAA'' for development of various parts and systems of vehicles being manufactured'' or planned to be manufactured by the Company.

The Company continues to have the benefit of technical assistance from Dr. Rolf Bacher'' Germany.

9. Industrial Relations

The litigation connected with recognition of labour union at the Company''s Akurdi'' Pune Plant'' is still pending before the Hon''ble Supreme Court of India. The industrial relations at the Pithampur Plant continued to be cordial.

10. Foreign Exchange

The foreign exchange outgo'' arising out of the import of raw materials'' components and capital goods'' is as per the details mentioned in the Notes to Financial Statements.

11. Environment and Conservation of Energy

Several steps to save energy and natural resources like water are being taken so as to achieve energy saving and cost reductions. The establishment of a new robotized top coat line in the paint shop'' at Pithampur'' is a step in this direction as it will result in considerable savings in paint'' energy and will improve the environmentfriendliness of the system.

12. Fixed Deposits

23 deposits amounting to Rs. 4''95''000 matured for repayment on or before 31st March 2013 but remained unclaimed on that date. Out of these'' 5 deposits amounting toRs. 1''35''000 have since been repaid/renewed.

13. Orders for Machinery

Since the close of the Accounting Year the Company has placed orders for new machinery'' equipment and other capital assets of value Rs. 13.08 crore.

14. Directors

Mr. Abhaykumar Firodia'' Mrs. Anita Ramachandran'' Mr. Atul Chordia and Mr. Arun Sheth'' Directors of the Company'' retire by rotation and being eligible offer themselves for reappointment.

15. Audit Committee

Mr. Vinay Kothari'' Mr. Pratap Pawar'' Mr. S. Padmanabhan'' Mr. Arun Sheth'' Independent Directors'' and Mr. S. A. Gundecha'' Non-Executive Director'' are the Members of the Audit Committee.

16. Unclaimed Share Certificate and Suspense Account

Share certificates in respect of 4709 shares earlier issued as right shares or bonus shares were returned undelivered. The Company intimated the fact to the concerned Members from time to time including reminders issued as per the provisions of the Listing Agreement. List of these Members is hosted on the website of the Company.

17. Corporate Governance

The Company has taken all necessary steps to implement the provisions of the Listing Agreement'' and a detailed report on the various issues'' including the Auditors'' Report on Corporate Governance are attached to this Report.

18. Directors''Responsibility Statement

As required by sub-section 2AA of Section 217 of the Companies Act'' 1956'' the Directors state that -

(a) in the preparation of Annual Accounts'' the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) 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 at the end of the Financial Year and of the profit/loss of the Company forthat period;

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

(d) the Annual Accounts are prepared on a going concern basis.

19. Other

Under the 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 employees are set out in the annexure to the Directors'' Report. However'' in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act'' 1956'' the Directors'' Report is being sent to all the Members of the Company excluding the aforesaid annexure. The Members interested in obtaining a copy of the said annexure may write to the Company at the Registered Office of the Company. The Company had two employees who were in receipt of remuneration exceeding Rs. 5''00''000 per month and employed throughout the financial year and six employees who were in receipt of remuneration exceeding Rs. 5''00''000 per month and employed for part of the financial year.

20. You are requested to appoint Auditors for the current year and fix their remuneration. M/s. P. G. Bhagwat'' Chartered Accountants'' Pune'' Auditors to the Company'' who retire at the ensuing Annual General Meeting'' are eligible for reappointment.

21. The Central Government has directed to conduct audit of the cost records of the Financial Year 2012-13 and accordingly M/s. Joshi Apte & Associates'' Cost Accountants'' Pune'' were appointed as the Cost Auditors for that year. The Cost Audit Report is under preparation.

22. The Directors express their grateful thanks to the Dealers'' Suppliers and Banks for their support'' and express their warm appreciation of the sincere co- operation and dedicated work by a majority of the employees of the Company.

For and on behalf of the Board of Directors

Pune - 411 035 ABHAYKUMAR FIRODIA

27th July 2013. Chairman


Mar 31, 2012

The Directors present the 53rd Annual Report, together with the audited accounts for the financial year ended on 31st March 2012.

1. Financial Results

2011-12 2010-11 Rs. Rs.

Income from 2369,16,19,208 1780,62,45,873

Operations (Gross)

Other Income 24,59,73,016 5,49,76,051

Exceptional Items 960,70,94,000 --

Gross Profit 1071,65,55,435 126,78,04,453

Depreciation 60,35,64,562 44,81,72,112

Provision for Taxes (Net) 186,96,72,785 23,34,53,386

Profit After Tax 824,33,18,088 58,61,78,955

Proposed Dividend 13,17,62,620 6,58,81,310

Provision for Tax on Distributed Profit 2,13,75,191 1,06,87,596

Transfer to General Reserve 82,44,00,000 182,46,33,784

Balance in Profit & Loss Account Carried Forward 733,57,80,277 7,00,00,000

The income from operations (gross) for the year under report increased to Rs. 2369 crores against the previous year's sale ofRs. 1780 crores representing a significant growth of 33%.

2. Dividend

The Board of Directors has recommended a dividend of Rs. 10 per share on 1,31,76,262 equity shares of Rs. 10 each fully paid up.

3. Name Change

As reported earlier, petition challenging the decision of the Hon'ble High Court of Judicature at Bombay, in respect of change in the name of the Company has been admitted by the Hon'ble Supreme Court of India. The operation of the order of the Hon'ble High Court has been stayed. The matter is still under consideration of the Hon'ble Supreme Court of India.

4. Heavy Commercial Vehicle Business - the Joint Venture

The Company entered into an agreement with MAN Truck & Bus AG (MAN), the joint venture partner in the Heavy Commercial Vehicles segment. As per this agreement, on 28th March 2012 the Company sold 5,57,97,100 equity shares ofRs. 10 each of MAN FORCE Trucks Private Limited, (the then joint venture ' company), to MAN for the agreed consideration of € 150,000,000. As per the other terms and conditions agreed with MAN, the Company will continue to hold one equity share of MAN FORCE Trucks Private Limited, (now named as MAN Trucks India Private Limited).

The Company had established a heavy commercial vehicles (HCV) division, for which it has sourced technology for engines, gear boxes, cabs, etc. underfull payment - from MAN Nutzfahrzeuge AG (MAN), ZF Friedrichshafen AG, etc.

Later accepting the offer made by MAN, Company converted the technical collaboration arrangement into a Joint Venture for manufacture of Heavy Commercial Vehicles with MAN, retaining 70 % of the equity capital of the joint venture company. This was done in response to MAN's offer to enable substantial exports.

Subsequently in the year 2006 in response to the proposal made by MAN for higher participation of MAN, Company diluted its shareholding to 50 % of the equity capital of the said joint venture.

With the above referred disinvestment of 5,57,97,100 number of shares, Company ceased to be a Joint Venture Partner in MAN Trucks India Private Limited.

The Company has agreed to continue to support MAN to achieve smooth transition, by making available certain services and component supply, under a specific agreement. Company has not accepted any restriction in respect of its entry, if decided, in the Heavy Commercial Vehicles Segment.

This sale of shares of MAN Trucks India Private Limited resulted in exceptional income of Rs. 960,70,94,000. The tax on this exceptional income, calculated on pro-rata basis is Rs. 201,61,58,346.

5. Market Situation

In view of the provisions of the Listing Agreement, the Market Situation and Status of Operations are dealt with in the "Management Discussion and Analysis" attached hereto.

6. Exports

The export turnover for the year under report was Rs. 23.96 crores against the previous year's export of Rs.27.17 crores.

7. Research & Development

The expenditure on Research & Development for new products, including the expenditure on Projects and Tool Engineering, was 1.94 % of the operational turnover of the Company for the year under report. The Company has maintained its emphasis on research, development and tool engineering activities.

8. Foreign Collaborations

The Company entered into a Licence Agreement with Daimler AG in respect of Multi Purpose Vehicle (MPV). As per the terms and conditions of this agreement, the drawings and designs of the vehicle, (excluding the engine and the transmission systems), have been made available by Daimler AG to the Company.

The Company has entered into a Technical Collaboration Agreement, with Getriebe-und Zahnradfabrik Hermann Hagenmeyer GmbH & Cie KG (GETRAG), in respect of Transaxles required in the manufacture of the MPV.

A Technical Support Agreement has been signed with MB Tech Group GmbH KGAA in respect of availing consultancy assistance in the field of product development and process development.

The Company continues to have the benefit of technical assistance from Dr. Rolf Bacher, Germany.

9. Industrial Relations

The litigation connected with recognition of labour union at the Company's Akurdi. Pune Plant, is still pending before the Hon'ble Supreme Court of India. The industrial relations at the Pithampur Plant continued to be cordial.

10. Foreign Exchange

The foreign exchange outgo arising out of the import of raw materials components and capital goods is as per the details mentioned in the Notes to Financial Statements.

11. Environment and Conservation of Energy

Several steps to save energy and natural resources like water are being taken so as to achieve energy saving and cost reductions. The new CED - paint shop (fifth generation technology) at Pithampur is a step in this direction.

12. Fixed Deposits

28 deposits amounting to Rs. 8,86,000 matured for repayment on or before 31st March 2012 but remained unclaimed on that date. Out of these, 4 deposits amounting to Rs. 51,000 have since been repaid / renewed.

13. Orders for Machinery

Since the close of the Accounting Year the Company has placed orders for new machinery, equipment and other capital assets of valueRs.20.05 crores.

14. Directors

Mr. Vinay Kothari. Mr. Sudhir Mehta, Mr. S. A. Gundecha and Mr. R. B. Bhandari, Directors of the Company, retire by rotation and being eligible offer themselves for reappointment.

Mr. S. N. Inamdar ceased to be the Director of the Company w.e.f. 16th April 2012. Mr. Inamdar has been closely associated with the Company for over three decades. His advice and guidance has greatly benefitted the Company. Board places on records its appreciation for the services rendered by Mr. Inamdar in his capacity as Director.

15. Audit Committee

Mr. Vinay Kothari, Mr. Pratap Pawar, Mr. S. Padmanabhan, Mr. Arun Sheth, Independent Directors, and Mr. S. A. Gundecha, Non-Executive Director, are the Members of the Audit Committee.

16. Corporate Governance

The Company has taken all necessary steps to implement the provisions of the Listing Agreement, and a detailed report on the various issues, including the Auditor's Report on Corporate Governance are attached to this Report.

17. Directors' Responsibility Statement

As required by sub-section 2AA of Section 217 of the Companies Act, 1956, the Directors state that-

(a) in the preparation of Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures:

(b) 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 at the end of the Financial Year and of the profit / loss of the Company for that period;

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

(d) the Annual Accounts are prepared on a going concern basis.

18. Other

Under the 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 employees are set out in the annexure to the Directors' Report. However, in terms of the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Directors' Report is being sent to all the Members of the Company excluding the aforesaid annexure. The Members interested in obtaining a copy of the said annexure may write to the Company at the Registered Office of the Company. The Company had two employees who were in receipt of remuneration exceeding Rs. 5,00,000 per month and employed throughout the financial year and six employees who were in receipt of remuneration exceeding Rs. 5,00,000 per month and employed for part of the financial year.

19. You are requested to appoint Auditors for the current year and fix their remuneration. M/s. P. G. Bhagwat, Chartered Accountants, Pune, Auditors to the Company, who retire at the ensuing Annual General Meeting, are eligible for reappointment.

20. The Central Government has directed to conduct audit of the cost records of the Financial Year 2011-12 and accordingly M/s. Joshi Apte & Associates, Cost Accountants, Pune, were appointed as the Cost Auditors, for that year. The Cost Audit Report is under preparation.

21. The Directors express their grateful thanks to the Dealers, Suppliers and Banks for their support, and express their warm appreciation of the sincere co-operation and dedicated work by a majority of the employees of the Company.

For and on behalf of the Board of Directors

Pune - 411 035 ABHAY FIRODIA

28th July 2012 Chairman


Mar 31, 2011

The Members,

The Directors present the 52nd Annual Report, together with the audited accounts for the financial year ended on 31st March, 2011.

1. Financial Results

2010-11 2009-10

(Rs.) (Rs.)

Gross Sales 1691,84,66,907 1075,32,09,626

Other Income 93,59,92,643 96,30,68,334

Gross Profit 126,94,93,453 84,88,03,627

Depreciation 44,81,72,112 41,99,55,157

Provision for

Taxes (Net) 23,51,42,386 (17,53,77,456)

Profit After Tax 58,61,78,955 60,42,25,926

Proposed Dividend 6,58,81,310 3,95,28,786

Provision for Tax

on Distributed Profit 1,06,87,596 67,19,894

Transfer to General

Reserve 182,46,33,784 6,04,22,593

Balance in Profit &

Loss Account

Carried Forward 7,00,00,000 138,50,23,735

The gross sales for the year under report increased to Rs. 1,691.85 crores against the previous year's sale of Rs. 1,075.32 crores representing a significant growth of 57.33 %.

2. Dividend

The Board of Directors has recommended a dividend of Rs. 5 per share on 1,31,76,262 equity shares of Rs. 10 each fully paid up.

3. Name Change

The Writ Petition in respect of the change in the name of the Company, filed by one of the Member of the Company was allowed by the Hon'ble High Court of Judicature at Bombay. The Hon'ble Court held that the order passed, as per the provisions of Section 22 of the Companies Act, 1956, based on which the name of the Company was changed in the year 2005, is not sustainable in law. The Company's Petition challenging this decision, has been admitted for hearing by the Hon'ble Supreme Court of India on 1st August, 2011. The operation of the order of the Hon'ble High Court has been stayed.

4. Market Situation

In view of the provisions of the Listing Agreement, the Market Situation and Status of Operations are dealt with in the "Management Discussion & Analysis" attached hereto.

5. Exports

The export turnover for the year under report was Rs. 27.17 crores against the previous year's export of Rs. 26.96 crores.

6. Research & Development

The expenditure on Research & Development for new products, including the expenditure on Projects and Tool Engineering, was 2.26 % of the operational turnover of the Company. The Company has maintained its emphasis on research, development and tool engineering activities.

7. Foreign Collaborations

The Company continues to have the benefit of technical assistance from Dr. Rolf Bacher, Germany. The Company also obtained technical consultancy from Mercedes Benz Project Consultation GmbH, Germany and MB Technology GmbH, Germany, for ongoing technical developments.

8. Industrial Relations

The litigation connected with recognition of labour union at the Company's Akurdi, Pune Plant is still pending before the Hon'ble Supreme Court of India. The industrial relations at the Pithampur Plant continued to be cordial.

9. Foreign Exchange

The foreign exchange outgo arising out of the import of raw materials, components and capital goods is as per the details mentioned in the Notes to Accounts.

10. Environment and Conservation of Energy

Several steps to save energy and natural resources like water are being taken so as to achieve energy saving and cost reductions. The new CED - paint shop at Pithampur is a step in this direction.

11. Fixed Deposits

50 deposits amounting to Rs. 17,63,000 matured for repayment on or before 31st March, 2011 but remained unclaimed on that date. Out of these, 13 deposits amounting to Rs. 5,75,000 have since been repaid / renewed.

12. Orders for Machinery

Since the close of the Accounting Year the Company has placed orders for new machinery, equipment and other capital assets of value of Rs. 35.83 crores.

13. Directors

The Board of Directors in its meeting held on 25th September, 2010 appointed Mr. Arun Sheth as an Additional Director of the Company. As per the provisions of Section 260 of the Companies Act, 1956, Mr. Arun Sheth holds office till the date of ensuing Annual General Meeting. The Company has received a notice proposing candidature of Mr. Arun Sheth for the directorship of the Company.

Mr. Bharat V. Patel resigned from the directorship of the Company w.e.f. 31st January, 2011. The Board places on record its appreciation of the services rendered by Mr. Patel during his association with the Company.

Mr. S. N. Inamdar, Mr. L. Lakshman, Mr. Pratap Pawar and Mr. S. Padmanabhan, Directors of the Company, retire by rotation and being eligible offer themselves for reappointment.

14. Audit Committee

The Board in its meeting held on 23rd April, 2011, reconstituted the Audit Committee. Now, Mr. Vinay Kothari, Mr. Pratap Pawar, Mr. S. Padmanabhan, Mr. Arun Sheth, Independent Directors, and Mr. S. A. Gundecha, Non-Executive Director, are the Members of the Audit Committee.

15. Corporate Governance

The Company has taken all necessary steps to implement the provisions of Listing Agreement and a detailed report on the various issues, including the Auditors' Report on Corporate Governance are attached to this Report.

16. Directors' Responsibility Statement

As required by sub-section 2AA of Section 217 of the Companies Act, 1956, the Directors state that –

(a) in the preparation of Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) 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 at the end of the Financial Year and of the profit / loss of the Company for that period;

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

(d) the Annual Accounts are prepared on a going concern basis.

17. Other

Under the 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 employees are set out in the annexure to the Directors' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report is being sent to all the Members of the Company excluding the aforesaid annexure. The Members interested in obtaining a copy of the said annexure may write to the Company at the Registered Office of the Company. The Company had, no employees who were in receipt of remuneration exceeding Rs. 5,00,000 per month and employed throughout the financial year and one employee who was in receipt of remuneration exceeding Rs. 5,00,000 per month and employed for part of the financial year.

18. You are requested to appoint Auditors for the current year and fix their remuneration. M/s. P. G. Bhagwat, Chartered Accountants, Pune, Auditors to the Company, who retire at the ensuing Annual General Meeting, are eligible for reappointment.

19. The Central Government has directed to conduct audit of the cost records of the Financial Year 2010-11 and accordingly M/s. Joshi Apte & Associates, Cost Accountants, Pune, were appointed as the Cost Auditors, for that year. The Cost Audit Report is under preparation.

20. The Directors express their grateful thanks to the Dealers, Suppliers and Banks for their support, and express their warm appreciation of the sincere co- operation and dedicated work by a majority of the employees of the Company.

For and on behalf of the Board of Directors

Pune - 411 035 ABHAY FIRODIA

9th August, 2011 Chairman


Mar 31, 2010

The Directors present the 51st Annual Report, together with the audited accounts for the financial year ended on 31stMarch, 2010.

1. Financial Results

2009-10 2008-09

(Rs.) (Rs.) Gross Sales 1075,32,09,626 865,28,30,698

Other Income 96,30,68,334 366,93,53,355

Gross Profit 84,88,03,627 231,93,99,520

Depreciation 41,99,55,157 41,82,56,236

Provision for

Taxes (net) (17,53,77,456) 65,55,13,246

Profit After Tax 60,42,25,926 124,56,30,038

Proposed Dividend 3,95,28,786 --

Provision for Tax on Distributed Profit 67,19,894 --

Transfer to General Reserve 6,04,22,593 --

Balance in Profit & Loss Account Carried Forward 138,50,23,735 88,74,69,082

The gross sales for the year under report increased to Rs. 1075.32 crores against the previous years sale of Rs. 865.28 crores representing a significant growth of24.27%.

2. Dividend

The Board of Directors recommended a dividend of Rs. 3 per share on 1,31,76,262 equity shares of Rs. 10 each fully paid up.

3. Name Change

As reported earlier, the litigation about name change is still pending before the Honble High Court of Judicature atMumbai.

4. Market Situation

In view of the provisions of the Listing Agreement, the Market Situation and Status of Operations are dealt with in the "Management Discussion & Analysis" attached hereto.

5. Exports

The export turnover for the year under report was Rs. 26.96 crores against the previous years export of Rs. 30.08 crores.

6. Research & Development

The expenditure on Research & Development for new products, including the expenditure on Projects and Tool Engineering, was 2.92% of the operational turnover of the Company. The Company has maintained its emphasis on research, development and tool engineering activities.

7. Foreign Collaborations

During the year under report the discussions, with ZF Friedrichshafen AG (ZF), in respect of return of licenses terminated without any change in the existing licensing arrangement in respect of 9-Speed Gear Box (E-21 9S-1110) and 6-Speed Gear Box (6S-850). This termination has resulted in retention of a sum of ¤ 3,000,000 by the Company, out of the advance received from ZF.

The Company continues to have the benefit of technical assistance from Dr.Rolf Bacher, Germany. The Company also obtained technical consultancy from Mercedes Benz Project Consultation GmbH, Germany and MB Technology GmbH, Germany, for ongoing technical developments.

8. Industrial Relations

The litigation connected with recognition of labour union at the Companys Akurdi, Pune Plant is still pending before the Honble Supreme Court of India. The industrial relations at the Pithampur Plant continued to be cordial. The Company signed a Wage Settlement for the workmen employed at Pithampur. This new settlement shall remain in force upto 31st March, 2013.

9. Foreign Exchange

The foreign exchange outgo arising out of the import of raw materials components and capital goods is as per the details mentionedin the Notesto Accounts.

10. Environment and Conservation of Energy

Several steps to save energy and natural resources like water are being taken so as to achieve energy saving and cost reductions.

11. Fixed Deposits

83 deposits amounting to Rs. 34,88,000 matured for repayment on or before 31st March, 2010 but remained unclaimed on that date. Out of these, 39 deposits amounting to Rs. 21,75,000 have since beenrepaid/ renewed.

12. Orders forMachinery

Since the close of the Accounting Year the Company has placed orders for new machinery, equipment and other capital assetsof value of Rs. 21.39 crores.

13. Directors

Mr. Abhay Firodia resigned from the Managing Directorship of the Company w.e.f. 5th November, 2009, after serving the Company as Managing Director over a period of over 22 years. Mr.Firodia kindly agreed to continue to guide the Company to achieve smooth transition.

The Board in its meeting held on 24th October, 2009 appointed Mr. Prasan Firodia as the Managing Director ofthe Company w.e.f. 6th November, 2009.

The Members of the Company in their Extraordinary General Meeting held on 16th January, 2010 approved the appointment of Mr.Prasan Firodia as the Managing Director of the Company for a period of five years and also approved the remuneration to be paid to him as the Managing Director. Mr.Prasan Firodia is also the Managing Director of Jaya Hind Industries Limited.

The Board of Directors in its meeting held on 24th October, 2009 and 23rd January, 2010 appointed Mr. Abhay Firodia and Mr. Atul Chordia, respectively, as Additional Directors of the Company. As per the provisions of Section 260 of the Companies Act, 1956, Mr. Abhay Firodia and Mr. Atul Chordia hold office till the conclusion of ensuing Annual General Meeting. The Company has received notice proposing candidature of Mr.Firodia and Mr.Chordia for the directorship of the Company.

Mrs. Anita Ramachandran, Mr. R. B. Bhandari, Mr. Sudhir Mehta, and Mr. S. A. Gundecha Directors of the Company, retire by rotation and being eligible offer themselves for reappointment.

14. AuditCommittee

The Board in its meeting held on 23rd January, 2010, reconstituted Audit Committee. Now, Mr. Vinay Kothari, Mr. Pratap Pawar, Mr. S. Padmanabhan, Independent Directors, and Mr. S. A. Gundecha, Non- Executive Director, are the Members of the Audit Committee.

15. CorporateGovernance

The Company has taken all necessary steps to implement the provisions of Listing Agreement and a detailed report on the various issues, including the Auditors Report on Corporate Governance are attached to this Report.

16. Directors Responsibility Statement

As required by sub-section 2AA of Section 217 of the Companies Act, 1956, the Directors state that –

(a) in the preparation of Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) 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 at the end of the Financial Year and of the profit/loss of the Company for that period;

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

(d) the Annual Accounts are prepared on a going concern basis.

17. Other

Under the 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 employees are set out in the annexure to the Directors Report. However, in terms of the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to all the Members of the Company excluding the aforesaid annexure. The Members interested in obtaining a copy of the said annexure may write to the Company at the Registered Office of the Company. The Company had 8 employees who were in receipt of remuneration exceeding Rs. 2,00,000 per month and employed throughout the financial year and 13 employees who were in receipt of remuneration exceeding Rs. 2,00,000 per month and employed for part of the financial year.

18. You are requested to appoint Auditors for the current year and fix their remuneration. M/s.P.G.Bhagwat, Chartered Accountants, Pune, Auditors to the Company, who retire at the ensuing Annual General Meeting, are eligible for reappointment.

19. The Central Government has directed to conduct audit of the cost records of the Financial Year 2009-10 and accordingly M/s. Dhananjay V. Joshi & Co., Cost Accountants, Pune, were appointed as the Cost Auditors, for that year. The Cost Audit Report is under preparation.

20. The Directors express their grateful thanks to the Dealers, Suppliers and Banks for their support, and express their warm appreciation of the sincere co-operation and dedicated work by a majority of the employeesofthe Company.

For and on behalf of the Board of Directors

Pune-411035. ABHAY FIRODIA

24th July, 2010. Chairman

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