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Directors Report of Gabriel India Ltd.

Mar 31, 2015

The Members,

The Directors take pleasure in presenting the 53rd Annual Report on the business and operations of the Company, together with the Audited Financial Statement for the year ended March 31, 2015.

Your Company reported attractive growth in its topline and bottom line, the slowdown in the Indian economy notwithstanding. This counter-trend performance is the result of proactive capacity and capability investments, deepening on core competence, stronger customer orientation, opportunity responsiveness, robust Balance Sheet and extensive de-risking.

1. Financial Results

(Amount in rs) Particulars Year ended March 31, Year ended March 31, 2015 (Rs. Million) 2014 (Rs. Million)

Net Sales 14,298.40 12,745.21

Earnings before interest, tax 1,201.60 918.27 and Depreciation & amortisation (EBITDA)

Finance cost 54.80 89.96

Depreciation 311.32 270.73

Profit/(Loss) before tax(PBT) 835.48 557.58

Provision for taxation

- Current 193.43 108.10

- Deferred Tax 41.81 23.49

Profit/(Loss) after tax (PAT) 600.24 425.99

Profit/(Loss) Account balance at 2,032.44 1,828.40 the beginning of the year

Profit available for appropriations 2,632.68 2,254.39

Appropriations:

Dividend on Equity Shares 64.64 122.10

Tax on dividend 13.23 20.75

Transferred to General Reserves 62.79

Profit/(Loss) Account balance at 2,554.81 2,048.75 the end of the year

2. Highlights of our performance

The Company recorded total sales of Rs.14,298.40 Million (Rs.12,745.21 Million in 2013-14), registering a growth of 12%, which outperformed the auto industry growth of 7.2% during the year under review. The Company reported a 30.85% growth in EBITDA, largely on account of volume growth in the two-wheeler segment, higher exports and expense control. The result was a Profit after Tax of Rs.600.24 Million (Rs.425.99 Million in 2013-14), which represented a 40.9% growth over the previous year. The Earnings per Share increased to Rs.4.18 from Rs.2.97 per share in 2013-14.

What is creditable is that the various economic and sector challenges notwithstanding, the Company reported an improvement in EBITDA margins - from 7.04% in the first quarter of the year under review to 8.34% in the last quarter. The result is that the Company''s annual EBITDA margin strengthened from 7.14% in 2013-14 to 8.32% in 2014-15.

Two/three-wheeler

The Company reported Rs.8,869.3 Million in revenues from this segment during the year under review, which was a 18% growth over the previous year. The Company''s two/three- wheeler accounted for 62% of total revenues compared to 59% in 2013-14. The Company accounted for a larger share of the wallet of prominent customers like TVS, Honda and Yamaha.

Passenger cars

The Company''s revenues contracted by 2% during the year following 3.9% industry growth in the passenger vehicle segment. The Company''s passenger cars accounted for 26% of total revenues compared to 30% in 2013-14. The Company addressed the needs of respected customers like Maruti Suzuki India Ltd, Mahindra & Mahindra Ltd., Volkswagen and Toyota Kirloskar.

Commercial vehicle and railways

The Company reported Rs.1,569.5 Million in revenues from this segment during the year under review, which was a 15.5% growth over the previous year. The commercial vehicle and railways accounted for 11% of the total revenues.

Exports

Over the years, the Company strengthened its research, product customisation, technology arrangements, quality and cost management not only to address the available opportunity in India but also to carve out a growing share of global opportunities.

The Company''s increasing focus on exports was inspired by a need to progressively de-risk revenues from an excessive dependence on the domestic geography, increased sales and graduate to superior economies, enhancing competitiveness.

The Company''s exports increased from Rs.358.23 Million in 2013-14 to Rs.552 Million in 2014-15 i.e. a growth of correspondingly, exports as a proportion of sales increased from 3% in 2013-14 to 4%.

During the year under review, the Company received an export order from Mahindra GenZe USA (electric scooter developed, made and manufactured in Michigan by Mahindra USA used for campus movements for R-scooter- Amphere). The Company also won an export order for commercial vehicle from ASEAN region where production will commence from December 2015.

After-market

The after-market domestic segment reported revenues of Rs.1,622 Million in 2014-15, a 15% growth over the previous year. Revenues from the after-market as a proportion of sales increased from 11.1% in 2013-14 to 11.3% in 2014-15. The growth in this segment was mainly derived from launch of new products and entry into new geographies.

The Company strengthened its brand and retailer-connect through the launch of the first-of-its-kind Elite Retailer programme which was conducted across 198 retailers in 2014-15.

3. Business Outlook

The prospects of the Company appear reasonably optimistic for a number of reasons.

The forecast for 2015-16 is expected to be marginally better even as double-digit sectoral growth may be elusive. With the government''s ''Make in India'' initiative likely to strengthen the case for manufacturing and moderate GDP growth expected, the Indian auto sector appears poised for a reasonable improvement. The Company''s performance in aftermarket and exports is expected to do better on the bench of improved thrust and focus.

4. Operations

Your Company is pleased to report that a high operating efficiency across its various manufacturing plants represented the bedrock of its success. This operating efficiency was marked by process improvements, constant benchmarking with available best practices, technology collaborations, employee training and a conducive working environment.

Parwanoo (Himachal Pradesh): This plant manufactures GRC shox, SOQI shox, McPherson struts and front forks. The plant strengthened its 5S and energy management, moderating energy costs per unit. The plant added a number of aftermarket products and reported a significant improvement in leveraging the Heijunka production system.

Khandsa (Haryana): It addresses the growing requirements of Maruti Suzuki, its single largest customer. During the year under review, the Company widened its product diversity, making it possible to address the needs of other customers as well. The plant retained its competitive edge through the sustained implementation of Lean Manufacturing concepts, which translated into enhanced line efficiency, human productivity and material economy. The plant received an award at the Quality Circle competition (QCFI-Delhi Chapter) and appreciation by Honda Cars India Limited for the best Quality Circle practices and team working, among others.

Chakan (Maharashtra): The plant is adequately empowered through relevant global quality certifications like TS 16949, ISO 14001, OSHAS 18001 and VDA 6.3. The plant strengthened its manufacturing competencies by setting new benchmarks, which were recognised through awards from reputed customers and other prominent agencies. The plant was showcased as a benchmark plant by Toyota, Honda and Volkswagen to their other suppliers.

The Company strengthened its holistic responsibility through the installation of state-of-art technologies and processes (chrome plating, painting, laser welding and component cleaning) as well as the installation of a solar plant(for captive consumption), moderating the carbon footprint and making the plant a showcase for the ''Best Green Initiative''. The plant also won a prestigious green initiative award from the reputable Dr. R.J.Rathi and the DSK Energy Gold Award.

The plant won a number of awards across categories for incorporating best practices in AHPS, EHS and MSES; it was provided a Toyota commendation certificate for achieving quality targets. The plant won the coveted gold award at the national level in Total Employee Involvement from ACMA, the Par Excellence Award in Quality Circle and the Gold and Silver Award in Safety from QCFI.

Aluminum Casting Facility, Chakan (Maharashtra): This facility continued to report year-on-year improvement in efficiency and energy management systems, winning the prestigious ''Trailblazer Innovation Award'' within Anand Group. The plant strengthened its quality and competitiveness related to the manufacture of specialty aluminum castings for front forks. The facility focused on enhancing plant efficiency, quality and carbon foot print reduction. It developed the new front fork outer tube casting for Honda Motors & Scooters as well as new products for Yamaha and Royal Enfield. The plant is also focusing on backward integration by manufacturing Special Aluminum Alloy AC4D within the facility in this financial year.

Ambad (Maharashtra): The plant set quality benchmarks and won customer appreciation through the BAL TPM Excellence Award and Honda National Level Quality Circle Award; it won industry appreciation through the Platinum Award from FICCI (second time) in 2013. The plant received the Gold Award at the National Level ACT Summit 2015 for Best Quality Case Study, first prize in the Kaizen Competition organised by ACNA West Region and first prize in the Regional Quality Circle Competition (organised by HMSI 2 & 4 wheeler).

Dewas (Madhya Pradesh): The plant retained its topline despite a demand decline for commercial vehicles, excelling across a number of performance ratios. The Dewas plant focused on the upgradation of facilities; it embarked on the VSME journey to create a win-win customer-supplier proposition. The plant was acknowledged among the five best technology suppliers by VECV. The plant was the prime contributor in the Company winning the Mahindra - SPD Best Supplier Award. The plant received the letter of intent for an export breakthrough order from Isuzu (commercial vehicles). The Dewas plant continued to strengthen its dominance in the domestic commercial vehicles segment through an increased share of business from longstanding and emerging OEMs.

Hosur (Tamil Nadu): The plant, the Company''s largest, reported substantial improvements in lean manufacturing and operational decongesting. The plant focused on process improvement, automation, vendor reduction and capacity enhancement for shock absorbers.

Malur (Karnataka): This plant reported a 118 % increase in volumes. The Company''s new facility commenced production in May 2013 to service the growing needs of Honda Motorcycles & Scooters India. The plant achieved cost reduction, which was recognised through VAVE [Value Added Value Engineering] award for 2014-15 from Suzuki Motorcycles and Scooters India Pvt Ltd

Sanand (Gujarat): The plant continues to service the needs of TATA Nano programme.

Aurangabad (Maharashtra): The satellite plant represents a manufacturing and assembly extension to the Ambad plant for addressing the large requirements of Bajaj Auto.

5. Dividend

Your Directors had declared an interim dividend of H0.45 per equity share of rupees one each (previous year H0.35). This dividend amounted to H64.64 Million (previous year H50.28 Million). This was distributed to shareholders, whose names appeared on the Register of Members as on 22nd November, 2014. Your Directors further recommended for the approval of shareholders a final dividend of H0.60 per equity share of rupees one each (previous year 0.50 per equity share of rupees one each).

The proposed dividend will amount to H86.20 Million (previous year H71.82 Million). The dividend, subject to its declaration, will be distributed to shareholders whose names appear on the Register of Members on July 30, 2015.

During the year under review, the unclaimed dividend pertaining to the financial years 2005-06 and 2006-07 was transferred to the Investor Education and Protection Fund following a due notice to members.

6. Share capital

The paid-up Equity Share Capital as on March 31, 2015 was H143.6 Million. During the year under review, the Company did not issue any shares and did not grant stock options or sweat equity shares to employees. The details of the shareholding of the Directors are as mentioned below as on March 31,2015.

Sr. No. Name of Director Shareholding % of Holding

1 Mrs. Anjali Anand 641,942 shares 0.45%

2 Mr. Manoj Kolhatkar 4,000 shares 0.01%

7. Deposits

The Company was accepting public deposits as per the provisions of the Companies Act, 1956 till 31st March, 2014. In compliance with the provisions of Section 73 and 74 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, the Company re-launched the Public Deposit Scheme from 9th January, 2015 (brief details below)

Sr. Details Amount (Rs. in Millions)/Remark No

i Public deposits accepted during the year 1.26

ii Deposits that remained unpaid or unclaimed as at the end of the year 4.45

iii Whether there has been any default in repayment of deposits or payment of interest thereon

a at the beginning of the year Nil

b maximum during the year Nil

c at the end of the year Nil

iv Details of deposits which are not in compliance with the requirements of 116.11 chapter V of the act

8. Meetings of the board

The Board of the Company comprised six Directors as on 31st March, 2015. The Board comprised of Mrs. Anjali Anand, Mr. Manoj Kolhatkar, Mr. Pradipta Sen, Mr. Atul Khosla, Mr. Aditya Vij and Mr. Rohit Philip. The details of the meetings held during the financial year under review are mentioned below.

Sr. Date of meetings Board strength No. of Directors present No

1 14th May, 2014 6 5

2 8th August, 2014 6 6

3 18th September, 2014 5 5

4 10th November, 2014 6 5

5 30th January, 2015 6 6

6 31st March, 2015 6 6

The maximum time gap between two Board meetings was not more than four months.

9. Directors and key managerial personnel

A. Directors

The composition of the Board of Directors of the Company is as below.

Sr. Name of Director DIN Position No

1 Mrs. Anjali Anand 02082840 Non-Executive Chairperson

2 Mr. Manoj Kolhatkar 03553983 Managing Director

3 Mr. Pradipta Sen 00051758 Non-Executive Independent Director

4 Mr. Atul Khosla 02674215 Non-Executive Independent Director

5 Mr. Aditya Vij 03200194 Non-Executive Independent Director

6 Mr. Rohit Philip 06625425 Non-Executive Director

Pursuant to Section 149(10) of the Companies Act, 2013 the appointment of the Non-Executive Independent Directors is proposed in the Annual General Meeting for a period of five years. The details of the Directors who are proposed to be appointed in the ensuing Annual General Meeting forms part of the Corporate Governance Report.

During the year under review, the following changes occurred in the constitution of the Board of Directors.

Sr. Name of Director Designation Date of appoint Date of resigna No ment tion

1 Mr. Deepak Chopra Chairman 21st May, 2008 18th September, 2014

2 Mr. Rajeev Vasudeva Non-Executive 12th November, 9th August, Independent 2008 2014 Director

3 Mr. H R Prasad Non-Executive 14th March, 18th September, Independent 2011 2014 Director

4 Mr. Gurdeep Singh Non-Executive 28th July, 2009 18th September, Independent 2014 Director

5 Dr. Arun Jaura Non-Executive 18th September, 30th January, Independent 2014 2015 Director

The Board of Directors deeply appreciates the contribution of Mr. Deepak Chopra, Mr. Rajeev Vasudeva, Mr. HR Prasad, Mr. Gurdeep Singh and Dr. Arun Jaura, who resigned from the Board during the year under review. The resigning Directors provided valuable guidance that benefited the Company.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Article 123 of the Articles of Association, Mr. Rohit Philip retires by rotation. Mr. Rohit Philip has expressed his unwillingness to be re-appointed so and Company proposes not to fill the vacancy so caused on the Board of the Company at the forthcoming AGM in terms of the Section 152 of the Companies Act, 2013.

B. Declaration of Independence

The Non-Executive Independent Directors enlisted below provided a declaration under Section 149 (6) of the Companies Act, 2013 that they meet the criteria of independence. The declarations from the Directors is attached as Annexure A

Sr. No. Name of Director

1 Mr. Pradipta Sen

2 Mr. Atul Khosla

3 Dr. Arun Jaura*

4 Mr. Aditya Vij

* Resigned from the Board w.e.f. 30th January, 2015

C. Formal evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Clause 49 of the Listing agreement, the Board carried out an annual evaluation of its own, the Chairperson and the Directors individually. A detailed note on the manner of evaluation forms a part of the Corporate Governance Report.

D. Audit Committee

The Committee was constituted as per the provisions of the Companies Act, 2013 and the Listing Agreement. The Composition of the Audit Committee is as below.

Sr. Name of Director DIN Position No

1 Mr. Atul Khosla 02674215 Non-Executive Independent Chairman

2 Mr. Pradipta Sen 00051758 Non-Executive Independent Member

3 Mr. Rohit Philip 06625425 Non- Executive Member

E. Key managerial personnel

During the year under review, there has been a change in the Key Managerial Personnel of the Company. The details of the same are as enlisted below:

Sr. Name of key managerial Designation Date of appoint Date of resigna NO personnel ment tion

1 Mr. Sarang Deshpande Company Sec 12th August, 9th December, retary 2013 2014

2 Mr. Pranvesh Tripathi Company Sec 30th January, - retary 2015

10. Remuneration to directors and remuneration policy

Remuneration is being paid to the Managing Director under Section 197 and 198 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company laid down a Nomination and Remuneration Policy, which was duly approved by the Board in its meeting held during the year under review. The remuneration in all forms that would be paid to the Managing Directors would be in compliance with the said policy. The remuneration to Non-Executive Independent Directors in the form of commission and sitting fees would also be paid in terms of the said policy. The disclosure of the details of the Remuneration Policy forms part of the Corporate Governance Report.

11. Particulars of loans, guarantees or investment

Disclosures relating to the Loans, Guarantees or Investments, as defined under Section 186 of the Companies Act, 2013, forms part of the notes to the Financial Statement.

12. Vigil mechanism

A Vigil Mechanism in the form of an Ethics Helpline and Whistle Blower Policy was established by the Company to trace and deal with instances of fraud and mismanagement. The details/report for the same was directly reported to the Audit Committee Chairman. A brief note on the Whistle Blower Policy is disclosed in the Corporate Governance report; the policy is also posted on the Company''s website.

13. Internal control systems and their adequacy

The Company has satisfactory internal control systems, which are continuously evaluated by professional internal and statutory auditors of repute. The company continues to improve the present internal control systems by implementation of appropriate policy and processes. The Company is focused on incorporating the controls and checks in ERP system of SAP.

14. Business risk management

There exists good opportunities in Export in both OEM and Aftermarket segments. By establishing network in all six continents, Gabriel has taken steps to capitalise on in this opportunity.

In the domestic market, there exists an opportunity of increasing business shares through consistent delivery of quality and innovative new products. Gabriel has already embraced innovation as a key initiative which will help in the above.

The entry of Global OEM''s in heavy commercial vehicle segment is likely to bring in a positive change in terms of product performance, reliability and safety. Your company''s leadership position in this segment will hold it in good stead.

In the competitive auto environment like most Tier- I industries Gabriel also has several threats. The new competition in the suspension industry is going to put pressure for developing competitive products with high performance, quality and longer life. Most of the OEM''s are trying to leverage upon these aspects to sell more vehicles.

The Company''s business is exposed to many internal and external risks. To address same in a systematic manner, Company had engaged an external professional agency to help identify key risks for the organisation. They have interviewed more than 30 senior officials & identified key risks faced by organisation. The some of the key risks identified are threat to market share due to global competition, procurement of few components, talent acquisition, technology, regulatory compliance. The risks have been reviewed by senior management and short term & long term risk mitigation plans have been identified. A Risk Committee has been formed under Chairmanship of CFO which will meet quarterly & present the progress on mitigation plans to the Board.

The Key risks of the organisation are:

(i) Threat to market share due to Global competition

Due to growing Indian market, global players have started operations in India which poses a strong competition for new business. To compete with these competitors, company is focusing on cost reduction with centralised sourcing. The company will also focus on technology upgrade and R & D is working closely with the customers to offer customised solutions. We are also exploring for a technology partner in the Commercial Vehicle segment. The company is also focusing on improving its product quality with focus on internal manufacturing and vendor processes.

(ii) Procurement Risk

As the company is spread across India, it leads to dependency on small localised vendors. For some key parts, the company operates with few single sourced suppliers which pose threat of production continuity.

Company is taking adequate steps like vendor rationalisation by consolidating requirement at pan India level thereby reducing dependency on small local vendors looking into aggressive growth plans. The company has also initiated actions for mapping the capabilities of the vendors on various parameters. It proposes to evaluate same for plugging the risks and rationalising of vendor base.

(iii) Risk of Global Competition in Exports

Looking into vast export potential in OEM as well as After Market segment, exports is one of the key focus areas for the company. To achieve aggressive export targets drawn for next 5 years, company forecasts concern over inducting technology or produce designs in line with target market requirements.

Technology road map is in place for these requirements for the next 5 years and work has already commenced. We have also mooted a strong drive to improve quality of current products to compete in Global markets.

(iv) Talent Acquisition Risk:

Attracting & retaining talent is key area for the management & various activities are carried out like effective induction, continuous training & management interactions to keep the attrition under control. Besides rewards & recognition company tries to enhance the engagement with the team through learning opportunities, 360 degree feedback & cross functional exposure.

(v) Technology Risk:

The company will continue to face strong competition from domestic and foreign players in this segment on latest and developing technology. To mitigate said risk, our company has a strong base in technology and also works with different technology support partners in different segments on different platforms. Our R & D efforts are oriented towards improvement in existing product & process capability that can produce value added products at competitive cost.

(vi) Regulatory & Compliance Risk

As the company operations are spread over the country and are exposed to various compliance requirements of different laws and statutes. The Company is conscious of said risk and has a proper & adequate system of internal control to review and monitor compliances. The internal control system is supplemented by an extensive programme of internal audits, reviews of the findings by management & also assesses opportunities for improvement in business processes, systems & controls for regulatory compliance.

The company will be monitoring above and other risks on a regular and systematic basis.

15. Related party transactions

Pursuant to the requirement of Section 188 of the Companies Act, 2013 and Clause 49 of the Listing Agreement entered by the Company with the Stock Exchanges, the Company established a Related Party Transaction Policy, which intends to ensure the proper approval and reporting of transactions between the Company and related parties. Such transactions are held to be appropriate only if they are in the best interest of the Company and its shareholders.

All the related party transactions of the Company were routed through the said policy and through the Audit Committee as per the requirements of the Companies Act, 2013. A policy on the related party transactions, duly approved by the Board, was posted on the website of the Company.

The Company is required to disclose in the Financial Statements certain transactions between the Company and related parties as well as policies concerning transactions with related parties. Accordingly, the particulars, as required to be disclosed under Section 188 (1) of the Companies Act, 2013 read with rule 8 (2) of the Companies (Accounts) Rules, 2014, were annexed as Annexure B to the report in Form AOC 2.

16. Corporate social responsibility

The Company invested in corporate social responsibility initiatives for societal betterment. It continued to work actively in enhancing life quality and enabling livelihoods as a responsible corporate citizen. The Company supported social initiatives through field level activities, which helped foster a ''spirit of giving'' among neighbourhood corporates/ partners. The Company invested in vocational training, health and educational accessibilities. All activities were conducted through the Sant Nischal Singhji Foundation. SNS Foundation is a charitable Trust which has been sanctioned tax exemption under Income Tax Act, 1961. Its activities are aimed at skills development for employability and empowerment of women, elementary education of most unreached categories of children living in slums, etc. This includes actions for preventing spread of HIV/AIDS amongst migrants and industrial workers. SNS Foundation is a social engagement arm of Anand Group.

The company has spent H10.85 Million on CSR Activities as required by the Act. Further, as per the requirement of Section 135 of the Companies Act, 2013, the Company constituted a CSR Committee and CSR Policy to track related transactions and initiatives. The detailed policy was posted on the Company''s website. Further, the detailed report on the CSR activities is annexed as ''Annexure C''.

17. Sustainable development

The Company is working towards making the world greener and cleaner. The Company embarked on extensive tree planting in 2011, an activity that has sustained. It harnessed renewable energy through a solar park in Chakan plant, invested in eco-friendly paint line equipment, reduced energy consumption, sourced green wind energy, utilised waste heat to improve equipment efficiency and focused fossil fuel conservation.

18. Technology

The Company continued to collaborate with KYB Japan and YHSJ for various models on a platform basis. During the year under review, the Company signed a technical license agreement with KONI B.V to deliver high technology automotive products to the Indian market in lesser time. KONI develops, manufactures and markets high performance shock absorbers for all types of cars and commercial vehicles.

The Company continued to invest in R&D and testing facilities to facilitate robust design, faster new products launch and higher customer satisfaction, which was reflected in awards from OEM customers.

The Company intends to emerge as a complete solutions provider for suspension systems. In line with this stated goal, the Company developed a new R&D Centre for two-wheelers at Hosur in December 2013. The Company has a dedicated R&D facility for passenger cars and commercial vehicles in Pune. These Centres will generate advanced products and features following robust testing with the objective to deliver reliable defect-free products. The Centres provided research professionals with a creative and innovative environment that enhances the speed, responsiveness and quality of product development leading to stronger customer satisfaction.

19. Conservation of energy, technology absorption and foreign exchange earnings and outgo

As required under Section 134(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules 2014, information relating to the foregoing matters is given by way of an Annexure D to this Report.

20. Employee relations

''Gabriel India Limited'' has been recognised by Great Place To Work® as one of India''s Best Companies To Work For - 2015, and has been ranked as the Best Place to Work in the industry and amongst the Top 50 Companies to Work for in India. The Great Place To Work® ranking is considered the most definitive employer-of-choice and workplace quality recognition that an organisation can receive. We believe that being a great workplace is a way of life and is a continuous journey.

To achieve higher productivity levels and employee value addition we have taken many initiatives for our Operating Engineers and Staff. These initiatives include skill enhancement, technical training and soft skills development.

With the aim of preparing the company for high growth in the coming year, we have continued emphasis on focused coaching & guidance for our talent pool. The Company continues its initiative in employee development by way of the leadership programme, Anand Leadership Development Programme (ALDP), with support from the Anand Group.

We have also initiated a Behavioral Model pledge during our annual goal setting exercise, to inculcate the core value of "delivery on promise".

Further, employee relations remain cordial at all locations.

21. Significant and material orders passed by the regulators or courts

There were no significant material orders passed by the regulators or courts having competent jurisdiction, which could have an impact on the business of the Company under the going concern concept.

22. Corporate governance report

A separate section on Corporate Governance is included in the Annual Report and the Certificate from the Company''s Auditors, confirming the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock exchanges, is annexed thereto.

23. Auditors

Statutory Auditors

BK Khare & Co., Chartered Accountants, Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate under Section 141 of the Companies Act, 2013 to the effect that the proposed appointment, if made, would be in accordance with Sections in Companies Act, 2013

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed KPRC & Associates, a firm of Company Secretaries in practice, to undertake the Secretarial Audit. The Self Explanatory report of the Secretarial Audit is annexed herewith as ''Annexure E''. The Company is taking action for filing an E-Form MGT-14.

24. Extract of annual return

The extract of the Annual Return as per Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 in the form MGT 9 is annexed herewith as ''Annexure F''.

25. Particulars of employees

As required under Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of employees were set out. In terms of Section 136 of the Companies Act, 2013, the report and accounts were sent to members and others entitled thereto, excluding information on employees'' particulars, which are available for inspection by 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.

26. Directors'' responsibility statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013:

1. In preparation of the annual accounts the applicable accounting standards have been followed along with proper explanation relating to material departures

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit and Loss Account of the Company for that period

3. The Directors have taken proper and special care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and for preventing / detecting fraud and other irregularities

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

5. The Directors, in case of a listed Company, have laid down internal financial controls followed by the Company and such financial controls are adequate and operating effectively

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

27. Acknowledgements

Your Directors wish to thank the collaborators, technology partners, financial institutions, bankers, customers, suppliers, shareholders and employees for their continued support and co-operation.

For and on behalf of Board

Place : Pune Mrs. Anjali Anand (DIN 02082840) Date : May 20, 2015 Chairperson


Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the Fifty-second Annual Report together with the Audited Accounts for the year ended March 31, 2014.

FINANCIAL HIGHLIGHTS Year ended Year ended March 31, 2014 March 31, 2013 (Rs. Million) (Rs. Million)

Net Sales 12,745.2 11,960.3

Profit before interest and Depreciation 918.3 807.5

Interest 90.0 122.9

Depreciation 270.7 272.8

Profit/ Loss before tax 557.6 411.8

Provision for Current Tax (Net of MAT credit) 113.0 73.5

Provision for Deferred Tax (15.0) (22.9)

Profit/ Loss after Tax for current year 459.6 361.2

Provision for Tax for earlier years 33.6 (20.2)

Profit/ Loss after Tax 426.0 381.4

Dividend

Interim 50.3 43.1

Final Proposed * 71.8 64.6

Dividend Tax 20.8 17.5

Transfer to/(from) General Reserve 62.8 38.1

* Subject to the approval of Shareholders

DIVIDEND

Your Directors had declared an interim dividend of Rs. 0.35 per equity share of Re. One each (Previous Year Interim Dividend''s of Rs. 0.30 per equity share of Re. One each). This dividend amounted to Rs. 50.27 Million (previous year Rs.43.1 Million). The same was distributed to the shareholders whose name appeared in the Register of Members as on November 29, 2013. Your directors have further recommended for approval of shareholders a final dividend of Rs. 0.50 per equity share of Re. One each (previous year Rs. 0.45 per equity share of Rs. One each).

The proposed Final dividend would amount to Rs. 71.82 Million (previous year Rs. 64.63 Million). The final dividend, subject to its declaration will be distributed to the shareholders whose name appears on the Register of members as on August 08, 2014.

INDIAN ECONOMY

In FY 2013-14, the Indian Economy is expected to grow by 4.9% as against a growth of 5.0% in previous year. There is a continued slowdown in industrial sector as well which is expected to grow only by 0.7% (compared to previous year of 1.0%). The slowdown is mainly due to internal uncertainties on policies, high inflation, high interest rate impacting slow infrastructure growth and private capital formation. Consequently, the investor and retail sentiment was also negative.

However, as domestic consumption pattern backed by increasing per capita income and continued advantage of low cost manufacturing, India is slated to emerge as one of the key growth economies in world and also as major auto component hub in Asia. The overall Sales Growth in auto sector during the FY 2013-14 was close to 4.0%. Low growth for past two years has affected the Auto Industry negatively. The Commercial Vehicle followed by passenger car segment was the most affected with negative growth in FY 13-14. The Two wheeler segment posted single digit growth bringing some respite to industry. The continued increase in fuel prices, high interest rates, slow growth in economy and poor sentiment dampened the auto industry growth in every segment.

PERFORMANCE

The Auto industry grew overall by 4.0% with Passenger Vehicles segment recording a negative growth of -4.9%, Commercial Vehicles segment degrew by -16% and Two wheeler segment registered positive growth of 7.2% compared to previous year.

The Company has recorded total sales at Rs.12,745 Million, (Previous Year Rs. 11,960 Million), registered a growth of 6.5%, which is slightly higher than the overall industry trend. The Profit After Tax was Rs. 426.0 Million (Previous Year Rs. 381.4 Million). As a result, the Earnings Per Share increased to Rs. 2.97 from Rs. 2.65 in the previous year.

EXPORTS

The Company''s focused approach on exports from 2013 onwards has unwrapped multiple global opportunities including few breakthroughs in high potential markets. Establishing network in 8 new geographies has now enabled us to make presence all the six Continents. Through structured market research & systematic approach, we have ingrained the seeds of GIL competencies worldwide to ensure exponential growth with most of the Global OEMs in near future.

During 2013-14, We faced major challenges in exports as the sales reduced to Rs. 358 Million from Rs. 415 Million due to drop in sales to a global customer in one of the key markets due to the local political turbulence. However with the revival of the market, we see promising exports in year 2014-15 & onwards.

AFTER MARKET

After Market continue to record a robust growth of 19% in the current year by achieving sales of Rs. 1,416 Million. This increase achieved primarily due to aggressive launch of new products and deeper geographical penetration in this segment. The focus on this segment will continue in the coming years. The Company has launched a unique initiative to strengthen the Gabriel brand and connect with retailer by launching "ELITE RETAILER" program. Five Hundred premier retailers pan-India have been selected for interaction in the first phase.

OPERATIONS

Some of the key highlights for each of the plants are as below

1. Parwanoo (Himachal Pradesh):

Brief – Parwanoo plant has been on a growth trajectory since its inception. With this year being no different, it has posted a strong 20% growth. It mainly delivers GRC shox, SOQI shox, McPherson struts and Front forks. It has also improved in terms of 5S and energy management resulting in substantial reduction of energy cost / unit production this year.

Key Highlights - The plant added 13 quality circles in the year 2013-14. It has also added several new products for the Aftermarket and also made substantial improvements in using level production system (Heijunka).

Accolades - The plant won Gold award in QFCI Chapter, New Delhi for quality circle.

2. Khandsa (Haryana):

Brief - Khandsa plant has always been implementing Lean Manufacturing concepts to ensure its competitive edge. The entire team at the plant works towards focused improvement on line efficiency, human productivity and RM reduction in 2013-14

Key Highlights - Traditionally Khandsa plant has been delivering quality products to its maiden customer - Maruti Suzuki. However, in order to improve product diversity it has taken several steps last year to add new customers successfully

Accolades - The plant has received many awards like Excellence Award in National convention Quality award Kolkata, Gold Award in QCFI North zone competition, etc.

3. Chakan (Maharashtra):

Brief - The chakan plant set a new benchmark in all the facets of manufacturing and has won many accolades from reputed customers for enhanced quality and delivery performance.

Key Highlights - Installation of State - of - Art technology equipment''s and processes for chrome plating, painting, laser welding and components cleaning have played a big role in reducing the carbon foot print. It had been showcased by renowned customers like M/s Toyota and Volkswagen to their suppliers as "Bench mark plant"

Accolades - The plant won prestigious awards in people practice, "Best place to work in Anand Group" and "Best Anand Heijunka Production System implementation" at group level in 2013. It also won Bajaj "Gold quality award" consistently for two years, "Certificate of appreciation for good practices in quality system" from FICCI. It won three gold awards from QCFI for quality circles allied concepts and many awards at Toyota, M &M & Tata''s organized QC competitions. The Chakan plant show-cased its futuristic technology at Volkswagen Vendor meet which was witnessed by representatives from across the globe and was awarded the, "Love the details" award from Volkswagen.

4. Aluminum Casting Facility : Chakan ( Maharashtra):

Brief - The plant has taken some innovative actions to improve its competitiveness and quality produces in specialty Aluminum castings for front forks. The facility is focusing on increasing plant efficiency, quality and reduction of carbon foot print by using innovation as the main theme.

Key Highlights - It has Developed "New front fork outer tube Casting" for Honda Motors & Scooters and new products for Yamaha & Royal Enfield. The plant has successfully commissioned in manufacturing of Alloy AC4D project as well.

Accolades - This facility has improved substantially, the efficiencies and energy Management systems and has Won the Prestigious "Trailblazer Innovation award" from Anand Corporate.

5. Ambad (Maharashtra):

Brief - The plant has achieved a new milestone by achieving the highest ever sales in the history of the plant with record growth of 35% in 2013-14.

Key Highlights - Capacity expansion has been done for addressing new business opportunities acquired from Mahindra 2 wheelers, Honda & Yamaha

Accolades - The plant has set bench marks for quality by winning Customer and Industry Awards for example TPM Award from Bajaj, Platinum Award in 2013 from FICCI for 2nd consecutive year, New Delhi & Honda National level Quality Circle Award..

6. Dewas (Madhya Pradesh):

Brief - In spite of a reduced demand for commercial vehicles, the plant continued to excel in all its performance Ratios and managed to retain its top line. This was also possible by increasing the exports from the plant. The plant also focused on various effective cost cutting measures during the year.

Expansion Plans - First ever pilot lot was dispatched for US market in March''14.Dewas plant has also embarked upon reducing carbon footprints.

Accolades - The plant won Best supplier award from WHEELS INDIA, under the category "Continuous improvement- Quality and Delivery".

7. Hosur (Tamil Nadu):

Brief - It continues to be the largest of all Gabriel Plants and even crossed a milestone of Rs 4000 Million sales. The plant made substantial improvement towards lean manufacturing and decongesting the operations. It focused on process improvement, Automation, vendor reduction and plant re-layout in the last financial year.

Expansion Plans -The plant inaugurated 2 wheeler R&D Tech Centre on 23rd December, 2013. It has also set up a new facility at Malur (Karnataka) and production commenced from May 2013 servicing Honda Motorcycles & Scooters India.

Accolades - The plant won IMYL award for Excellence in Sales in the year 2013-14.

8. Sanand (Gujarat): The Plant continues to service TATA Nano from its Sanand facility.

FIXED DEPOSITS

Fixed deposits at the end of the year were Rs. 184.65 Million (Previous year Rs. 164.10 Million) The Company has revised the interest rate on its various deposits program during the year downwards.

CREDIT RATING

The credit rating of the Company was revised to CRISIL A (Stable) from CRISIL A (Stable) by CRISIL for long term and short term rating was reaffirmed at CRISIL A1 in the month of Dec''13. The long term rating indicates adequate degree of safety regarding timely servicing of financial obligations, carrying low credit risk. The short term rating indicates very strong degree of safety regarding timely payment of financial obligations carrying lowest credit risk.

TECHNOLOGY

The Company continues to have tie-up with KYB Japan for various models on platform basis. The Company continues to invest in its R&D activities and testing facilities to enable robust design and faster launch of new products apart from higher customer satisfaction. The same is reflected in rewards and accolades received from the OEM customers.

The Company has inaugurated a new Two-wheeler R&D Centre at its Hosur plant in December 2013. The new R&D centre at Hosur, dedicated for ride control products for two-wheelers would strengthen our ability to co-develop right from the drawing board stage with our OEM customers, products which are cost effective and suitable for the Indian road conditions and which ensure superior ride comfort and safety for the Indian consumers. The purpose behind this new R&D centre is to establish a world class centre encompassing product and process design, and prototyping and evaluation section. The facility is fully equipped to develop and provide any type of two wheeler suspension products. With this, Gabriel India would become a complete solution provider to its customer for the suspension systems. The centre will offer advanced products and features, after robust internal testing, so that customer gets products which are defect free and reliable. Also, the centre intends to provide conducive environment for its people to encourage creativity and innovation. By this significant milestone, we will improve our speed, agility and quality of product development, thereby increasing customer confidence and satisfaction. In addition to this new R&D center, Gabriel India has a dedicated R&D set up for passenger cars and commercial vehicles segment at Pune.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, information relating to the foregoing matters is given by way of an Annexure to this Report.

DIRECTORS

The Board of directors deeply appreciated the contribution of Mr. Mahendra Kumar Goyal who has resigned w.e.f October 25, 2013. Mr. Mahendra Kumar Goyal has given his valuable guidance all along. Mr. Rohit Philip was appointed as a director in the casual vacancy caused by the resignation of Mr. Mahendra Goyal w.e.f. 13th November, 2013.

In accordance with Article 123 of the Articles of Association, Mr. Deepak Chopra, retire by rotation and being eligible, offer himself for re-appointment.

Director''s Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

1. in the preparation of the financial statements, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the Profit and Loss Account for the year ended March 31, 2014;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the certificate from the Company''s Auditors confirming the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the Stock Exchanges is annexed thereto.

AUDITORS

Messers BK Khare & Co., Chartered Accountants, Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the proposed re- appointment, if made, will be in accordance with sections in Companies Act, 2013.

EMPLOYEE RELATIONS

Employee relations were cordial at all locations.

A number of initiatives are being taken for all employees - Operating Engineers as well as staff for enhancing "employee value". This includes skill enhancement, training and soft skills development. Coaching/guidance for selected talent is also included. This initiative is aimed at preparing the Company for high growth in the coming years. The Company continues its initiative in Employee development by way of several developmental programs with support from Anand group.

The Directors are pleased to record their appreciation of the services rendered by the employees and staff at all levels.

PARTICULARS OF EMPLOYEES

As required under the provisions of Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, particulars of employees are set out. As per the provisions of Section 219 (1)(d)(iv) of the said Act, these particulars would be made available to any shareholder on request.

ACKNOWLEDGEMENTS

Your Directors wish to thank the Collaborators, Technology Partners, Financial Institutions, Bankers, Customers, Suppliers, Shareholders and Employees for their continued support and co-operation.

For and on behalf of the Board

Place : Pune Deepak Chopra

Date : May 14, 2014 Chairman


Mar 31, 2013

The Directors take pleasure in presenting the Fifty-First Annual Report together with the Audited Accounts for the year ended March 31, 2013.

Financial Highlights Year ended Year ended March 31, 2013* March 31, 2012 (Rs. Million) (Rs. Million)

Net Sales 11,960.3 11,152.8

Profit before Interest and Depreciation 806.5 1,070.9

Interest 121.9 170.1

Depreciation 272.8 276.4

Profit / Loss before Tax 411.8 624.4

Provision for Current Tax (Net of MAT credit) 73.5 133.5

Provision for Deferred Tax (22.9) (15.9)

Profit / Loss after Tax for current year 361.2 506.8

Provision for Tax for earlier years (20.2) (23.8)

Profit / Loss after Tax 381.4 530.6

Dividend

Interim 43.1 71.8

Final Proposed 64.6 -

Dividend Tax 17.5 11.8

Transfer to / (from) General Reserve 38.1 53.1

* Subject to the approval of Shareholders

Dividend

Your Directors had declared an interim dividend of Re. 0.30 per equity share of Re. One each (Previous Year Interim Dividend of Re. 1.00 per equity share of Re. One each). This dividend amounted to Rs. 43.1 Million (Previous Year Rs.71.8 Million). The same was distributed to the shareholders whose names appeared in the Register of Members as on November 30, 2012. Your directors have further recommended for approval of shareholders a final dividend of Re. 0.45 per equity share of Re. One each (Previous Year Rs. Nil).

The proposed final dividend would amount to Rs. 64.6 Million (Previous Year Rs. nil). The final dividend, subject to its declaration, will be distributed to the shareholders whose names appear on the Register of members as on August 12, 2013.

INDIAN ECONOMY

In FY 2012-13, once considered as rising star in Asia, the Indian Economy is showing signs of decline mainly due to internal uncertainties compounded by global circumstances like Euro-zone crisis, high inflation and market sentiments. Country registered a GDP Growth rate of 5.3% in FY 2012-13 which was a nine year low. The private consumption is also showing declining trend from 7.6% in 2011-12 to 5.3% in 2012-13. The manufacturing sector has also shown contraction in the FY 2012-13.

In the long run, due to its robust consumption pattern and continued advantage of low cost manufacturing, India is slated to emerge as one of the key auto component hubs in Asia. The overall Sales Growth in auto sector during the FY 2012-13 was close to 4.5%. This affected the Auto Industry negatively as expected growth was more than 8% at the beginning of the fiscal year. Many OEM''s and Auto Component Companies ended up having excess capacities due to slowdown in demand. The Commercial Vehicle followed by passenger car segment was the most affected with negative growth in FY 12-13. The Increase in fuel prices dampened the auto industry growth virtually in every segment.

PERFORMANCE

The total sales at Rs.11,960.3 Million, (Previous Year Rs. 11,152.8 Million), registered a growth of 7.2%. The Profit After Tax is Rs. 381.4 Million (Previous Year Rs. 530.6 Million). As a result, the Earnings Per Share came down to Rs. 2.65 from Rs 3.69 in the previous year.

EXPORTS

The total exports of the Company was lower, at Rs. 415 Million compared to Rs. 553 million in the last year. Efforts are on to diversify the portfolio of customers and geographies to mitigate country specific issues.

AFTER MARKET

After Market continued to record a robust growth of 15% in the current year by achieving sales of Rs. 1,187 Million. This increase primarily happened due to aggressively launching new products and deeper penetration in this segment. The focus on this segment will continue in the coming years.

OPERATIONS

1. Parwanoo (Himachal Pradesh): The Plant at Parwanoo has matured in most of the segments - GRC shox, SOQI shox, McPherson struts and Front forks. This plant has continued to grow year on year since its inception. FY-2012 -13 has been no exception to its growth trend, with a strong growth of 20% in production units of Shock Absorbers. It has added several new products for the Aftermarket and also made substantial improvements in using level production system (Heijunka).

2. Khandsa (Haryana): It has been largely dependent on a single customer. However, in order to improve product diversity the Company has taken several steps last year to add new customers successfully. The plant continues to implement Lean Manufacturing concepts to ensure its competitive edge.

3. Chakan (Maharashtra): This plant has shown good improvement in 5S, work place management and energy management. The steps have helped the plant to substantially enhance the quality levels during the year under review. The State-of-the- Art- Technology such as Chrome plating and Auto -Phoretic paint system have already been implemented and are helping the plant to reduce its carbon foot print.

4. Aluminum Casting Facility : Chakan (Maharashtra) : This facility has continued to improve year on year, the efficiencies and energy Management system. The plant has taken some innovative actions to improve its competitiveness and quality produces specialty Aluminum castings for front forks. The facility is focusing on increasing plant efficiency, quality and reduction of carbon foot print by using innovation as the main theme.

5. Ambad (Maharashtra): The plant has already set bench marks for quality by winning Customer and Industry Awards, for example Platinum Award from FICCI for the second year running. It has recently concluded a wage settlement for a period of four years, before the expiry of previous long term agreement which itself is a bench mark for the local industry for Industrial relations.

6. Dewas (Madhya Pradesh): This plant continued to excel in all its performance Ratios and maintaining the robust top and bottom line despite decrease in demand for Commercial Vehicles. There was an amicable long term wage settlement with the Workmen in the 1st Quarter and new productivity standards have been agreed upon.

7. Hosur (Tamil Nadu): Hosur continues to be the largest of all Gabriel Plants. FY 12 -13 has been a year of several challenges because of external factors, namely power crisis in the state of Tamil Nadu.

The plant made substantial improvements towards lean manufacturing and decongesting the operations. It has also commissioned the first fully Robotic line for Shock Absorbers probably one of its kind in India.

8. Sanand (Gujarat): The Plant continues to service TATA Nano from its Sanand facility.

Fixed Deposits

Fixed deposits at the end of the year were Rs.164.10 Million (Previous year Rs.255.44 Million).

Technology Tie -ups

The Company continues its association with Technology partners KYB Japan, who now own a 5% stake in the Company bought from the company''s erstwhile collaborator Arvin Meritor, USA. Company continues its technical tie-up with KYBSE, Spain in four- wheelers and Yamaha Motor Hydraulic System Company Limited for two-wheelers.

The Company also has in-house State-of-the-Art Research and Development facilities at Chakan, Hosur and Ambad which have design and development competency to meet the latest requirements of its customers. The new Two-wheeler R&D centre will be commissioned in 2013-14.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, information relating to the foregoing matters is given by way of an Annexure to this Report.

Directors

The Board of Directors deeply appreciated the contribution of Professor Russi Jal Taraporevala, who has retired w.e.f April 02, 2013. Professor Taraporevala has served since inception of the Company and has given his valuable guidance all along.

In accordance with Article 123 of the Articles of Association, Mr. Rajeev Vasudeva and Mr. Gurdeep Singh retire by rotation, and being eligible offer themselves for re-appointment.

Director''s Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and they have 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, 2013 and of the Statement of Profit and Loss for the year ended March 31, 2013;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

Corporate Governance

A separate section on Corporate Governance is included in the Annual Report and the certificate from the Company''s Auditors confirming the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the Stock Exchanges is annexed thereto.

Auditors

Messers BK Khare & Co., Chartered Accountants, Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the proposed re-appointment, if made, will be in accordance with sub-section (1B) of Section 224 of the Companies Act, 1956.

Employee Relations

Employee relations were cordial at all locations. Long Term agreements with the Unions have been concluded at the Ambad and Dewas Plants, which are the only unionized plants in the Company. The Agreements would result in higher productivity.

A number of initiatives are being taken for all employees - operating engineers as well as staff for enhancing "employee value". This includes skill enhancement, training and soft skills development. Coaching/guidance for selected talent is also included. This initiative is aimed at preparing the Company for high growth in the coming years. The Company continues its initiative in employee development by way of several developmental programmes with support from Anand group.

The Directors are pleased to record their appreciation of the services rendered by the employees and staff at all levels.

Particulars of Employees

As required under the provisions of Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, particulars of employees are set out in the Annexure to the Directors Report. As per the provisions of Section 219 (1)(d)(iv) of the said Act, these particulars would be made available to any shareholder on request.

Acknowledgements

Your Directors wish to thank the Collaborators, Technology Partners, Financial Institutions, Bankers, Customers, Suppliers , Shareholders and Employees for their continued support and co-operation. For and on behalf of the Board

Place : Pune Deepak Chopra

Date : May 27, 2013 Chairman


Mar 31, 2012

The Directors take pleasure in presenting the Fiftieth Annual Report together with the Audited Accounts for the year ended March 31, 2012.

Financial Highlights Year ended Year ended

March 31, 2012* March 31, 2011

(Rs Million) (Rs Million)

Net Sales 11,152.8 9,617.0

Profit before Interest and Depreciation 1,070.9 981.1

Interest 170.1 171.3

Depreciation 276.4 219.0

Profit / Loss before Tax 624.4 590.8

Provision for Current Tax (Net of MAT credit) 133.5 142.2

Provision for Deferred Tax (15.9) 15.8

Profit / Loss after Tax for current year 506.8 432.8

Provision for Tax for earlier years (23.8) (37.8)

Prior period item (Net of Tax) - 17.2

Profit / Loss after Tax 530.6 453.4 Dividend

Interim 28.7 21.6

2nd Interim 43.1 50.3

Dividend Tax 11.8 11.9

Transfer to / (from) General Reserve 53.1 45.3

* Subject to the approval of Shareholders

Dividend

Your Directors had declared an Interim dividend of Re. 0.40 per equity share of Re. One each (Previous Year Re. 0.30 per equity share). This dividend amounted to Rs. 28.7 Million (Previous Year Rs. 21.6 Million). The same was distributed to shareholders whose names appeared on the Register of Members as on 25th November, 2011.

Your Directors have declared 2nd Interim dividend in the Board Meeting dated May 30, 2012 of Re. 0.60 per equity share of Rs. One each. The dividend would amount to Rs. 43.1 Million. The same will be distributed to shareholders whose names would appear on the Register of Members as on 12th June, 2012.

Bonus

Your Directors have recommended Bonus Shares in the ratio of 1 (One) equity share of Re.1 each for every 1 (One) equity share of Re.1 each by capitalization of Securities Premium/ General Reserve Account or such other eligible accounts in the Books of the Company aggregating to Rs.7,18,21,970/-, in the Board Meeting dated May 30, 2012, subject to approval of the Shareholders in the Extra Ordinary General Meeting to be held on July 2, 2012 and other statutory approvals, if any.

INDIAN ECONOMY

In 2011 -12, in spite of uncertain global circumstances like Euro-zone crisis, natural calamities, political upheavals and high inflation in India, the country registered an average Growth rate of 6.9%.

Today, India is emerging as one of the key auto component hub in Asia and is expected to play a significant role in the global automotive supply chains in the near future. The Overall Sales Growth in the auto sector during the Year was 14%. Passenger Vehicle segment recovered marginally at 4% over the same period last year. The overall Commercial Vehicle (C.V.) segment registered growth of 19% during the year mainly driven by sub-2T category. Two Wheelers registered growth of 15% during the year.

During the year overall automobile exports registered growth rate of 21%. Passenger vehicles registered growth in exports at 14%, two & three wheelers registered a growth of 27% and 34% in exports respectively.

PERFORMANCE

With the Net sales at Rs.11,153 Million, (Previous Year Rs. 9,617 Million), the Company registered a growth of 16%, which is slightly higher than the industry trend. The Profit After Tax of Rs. 530.6 Million (Previous Year Rs. 453.4 Million) grew by 17%. As a result, the Earnings Per Share rose to Rs. 7.39 from Rs. 6.31 in the previous year.

EXPORTS

The total exports of the Company grew from Rs. 292 million in the last year to Rs. 553 Million in the current year - a growth of 90%.

Exports to Renault & Ride Control LLC (erstwhile Arvin Meritor, USA) have helped to increase exports substantially. Company now is focusing on business opportunities for 2 wheeler market as well. The Company entered the 3 and 4 wheeler After Market segments in the Middle East. The Company is also focusing on private branding business in Asia Pacific Region.

AFTER MARKET

After Market recorded a growth of 16% in the current year by achieving a sales of Rs. 1,040 Million. There was a substantial improvement in the market share in 2/3 wheeler segments.

OPERATIONS

1. Parwanoo (Himachal Pradesh): The Plant at Parwanoo has matured in most of the segments - GRC shox, SOQI shox, McPherson struts and Front forks. The steady growth in all these product lines is seen during the year in all segments - OE and After Market. The growing sub 2T market has offered the plant an opportunity via supplies to Tata-ACE. The plant is in the phase of consolidating its supply chain to meet growing demand in the future. The substantial expansion at Parwanoo in the area of McPherson Struts and GRC shock absorber was realized within the eligibility period of the tax incentive scheme.

2. Khandsa (Haryana): It has been a dedicated facility for Maruti-Suzuki India Ltd. However, in order to improve the plant utilization company is adding new businesses for customers like Tata and Honda at Khandsa. The plant has undergone a re- layout and right sized in line with Lean Manufacturing Concepts to improve the competitiveness and quality.

3. Chakan (Maharashtra): Major revamping of the plant along with Visionary Small & Medium Enterprises (VSME) initiative is now maturing and showing positive results on plant's business performance. These steps have helped the plant to increase its volume and productivity substantially. The quality performance is also showing improving trend. New customers like Volkswagen and Renault - Exports, now contribute to a substantial share of its business.

Aluminium Casting Facility :

This facility produces special Aluminum castings for front forks. The facility is now fully matured and the company is focusing on increasing plant efficiency, quality and reduction of carbon foot print by using innovative technology solutions.

4. Ambad (Maharashtra): This plant is a steady performer. Its volumes are showing increasing trend with addition of new customer base i.e. Yamaha Motorcycles and Mahindra 2 wheelers. Recently, the plant was awarded the Platinum Excellence award by FICCI for Quality Systems & won the Bajaj Auto Quality - Gold and TPM Excellence Award. The plant expansion is under progress to increase its capacity in Front Fork area.

5. Hosur (Tamil Nadu): This plant has shown substantial growth during FY 11-12 due to steep increase in volumes from Suzuki and Yamaha Motor cycles. It has made record production of Front Forks during this period. Substantial capacities have already been added to meet future requirements of customers.

Recently, the plant has acquired substantial business from Honda Motorcycles for their new operations near Bangalore. In future, the plant will focus on sharpening its business performance through productivity and quality improvement. It will also start VSME for improving supplier quality.

Hosur plant has won several awards from various customers for consistent performance in Quality, Cost and Delivery. Adjacent plot of 0.55 acres has been acquired to build a "State of the Art" Tech Centre for 2 wheeler.

6. Dewas(Madhya Pradesh): This plant is dedicated to production of shock absorbers for all commercial vehicles and utility vehicles. The products are highly robust and cost effective. New customers namely Daimler - Heavy Commercial Vehicles and Ashok Leyland Nissan have been added to its list of customers. The plant has made record deliveries in the last quarter of 2011-12. Its export orders to North America are also on increase.

7. Sanand(Gujarat): This plant is set up as a dedicated facility for Tata Nano at Sanand for carrying out final assembly operations. Since October 2011 the volumes have steadily grown with increase in the sales of Nano car. The plant has also won an award from Tata Motors in Kaizen competition.

Fixed Deposits

Fixed deposits at the end of the year were Rs.255.4 Million (Previous year Rs.357.1 Million).

Technology Tie -up

The Company continues its association with Technology partners KYB Japan who now own a 5.53% stake in the Company bought from the company's erstwhile collaborator Arvin Meritor, USA. Company continues its technical tie-up with KYBSE, Spain in four-wheelers and Yamaha Motor Hydraulic System Company Limited for two-wheelers.

The Company also has an in-house state of the art Research and Development facility at Chakan and Hosur which have design and development competency to meet the latest requirements of its customers.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

As required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, information relating to the foregoing matters is given by way of an Annexure to this Report.

Directors

In accordance with Article 123 of the Articles of Association, Mr. Deepak Chopra and Mr. Russi Jal Taraporevala retire by rotation and being eligible, offer themselves for re-appointment.

Director's Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the Profit and Loss Account for the year ended March 31, 2012;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

Corporate Governance

A separate section on Corporate Governance is included in the Annual Report and the certificate from the Company's Auditors confirming the compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the Stock Exchanges is annexed thereto.

Auditors

Messers BK Khare & Co., Chartered Accountants, Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that the proposed re-appointment, if made, will be in accordance with sub-section (1B) of Section 224 of the Companies Act, 1956.

Employee Relations

Employee relations were cordial at all locations.

A number of initiatives are being taken for all employees - Operating Engineers as well as staff for enhancing "employee value". This includes skill enhancement, training and soft skills development. Coaching/guidance for selected talent is also included. This initiative is aimed at preparing the Company for high growth in the coming years. To give improved visibility to the employees about their Key Result areas and the Company's objectives, a Large Scale Integration Program (LSIP) was successfully conducted.

The Directors are pleased to record their appreciation of the services rendered by the employees and staff at all levels.

Particulars of Employees

As required under the provisions of Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, particulars of employees are set out in the Annexure to the Directors Report. As per the provisions of Section 219 (1)(d)(iv) of the said Act, these particulars would be made available to any shareholder on request.

Acknowledgements

Your Directors wish to thank the Technology Partners, Financial Institutions, Bankers, Customers, Suppliers, Shareholders and Employees for their continued support and co-operation.

For and on behalf of the Board

Place : Mumbai Deepak Chopra

Date : May 30, 2012 Chairman

 
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