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Directors Report of Greaves Cotton Ltd.

Mar 31, 2016

The Directors have pleasure in presenting the 97th Annual Report for the financial year ended 31st March, 2016.

Financial Highlights

(Rs,in crore)

Year ended 31st March 2016

Year ended 31st March 2015

Total Revenue

1,660.73

1,713.71

Profit Before Tax and Exceptional Items

266.73

174.66

Loss / (Gain) on Exceptional Items

(24.77)

65.92

Profit Before Tax

291.50

108.74

Less: Provision for Tax

92.72

27.21

Profit after Tax

198.78

81.53

Dividend (including proposed Final Dividend) and Tax on Dividend

162.41

72.15

Transfer to General Reserve

20.00

8.15

Balance of the Profit carried forward

420.42

404.94

Review of Operations

In spite of the challenging macro-economic conditions, the inherent strengths and clear strategic direction enabled the Company to withstand the challenges in difficult times and sustain its leadership across all businesses.

Management had taken a conscious decision to exit from the loss making infrastructure business in the previous financial year. This, along with the value engineering approach and focus on operational efficiencies, enabled the Company to improve its profitability for the year under review.

The Company registered total revenue of Rs,1,660.73 crore during the year under review as against Rs, 1,713.71 crore in the previous financial year. The profit after tax was Rs, 198.78 crore for the year under review as against Rs, 81.53 crore in the previous financial year. The profit after tax for the year under review includes a net exceptional gain of Rs, 24.77 crores. The profit after tax of the previous financial year had been negatively impacted due to exceptional losses.

The profit before tax and exceptional items as a percentage of total revenue for the year under review was higher at 16.06% as against 10.19% in the previous financial year.

Effective working capital management combined with other operational efficiencies resulted in a 52.72% improvement in the profit before tax and exceptional items as compared to the previous year.

Despite the challenges in revenue growth, the Company has continued its focus on margin enhancement and has sharply improved its EBITDA margin for the year from 11.79% to 16.62%.

The outlook of each business has been discussed in detail in the ''Management Discussion and Analysis'' which forms a part of this Annual Report.

Dividend

The Directors have recommended a final dividend of Rs,1 per share which together with the interim dividend of Rs,4.50 per share of face value of Rs,2 paid during the year, aggregates to Rs,5.5 per share of Rs,2 as against Rs,2.5 per share in the previous year. The total dividend pay-out for the year under review, excluding tax on dividend is Rs,134.31 crore as against Rs,61.05 crore in the previous year. Dividend as a percentage of net profit after tax is 67.57% as compared to 74.88% in the previous year.

Public Deposits

The Company discontinued its Fixed Deposit Scheme in April, 2005. During the year under review, the Company did not accept any deposits within the meaning of Chapter V of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

Investor Education and Protection Fund

Pursuant to the applicable provisions, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid account, is required to be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government. Accordingly, unpaid or unclaimed dividends in respect of the 3rd interim dividend for the financial year ended 31st March, 2008 and the 1st interim dividend for the financial year ended 31st March, 2009 and unclaimed fixed deposits, have been transferred to the IEPF.

Members, who have not yet en-cashed or claimed the dividends that are yet to be transferred to the IEPF, are requested to contact the Company''s Registrar and Share Transfer Agent, at the earliest.

Report on performance of Subsidiaries

During the year, no company became or ceased to be a subsidiary of the Company. The details of the performance of the subsidiary companies are as follows:

Greaves Leasing Finance Limited (GLFL)

GLFL, a wholly owned subsidiary of the Company, is a non-banking finance company. It reported a total revenue of Rs,0.62 crore and profit before tax and exceptional item of Rs,0.29 crore. On account of a provision for permanent diminution in the value of its investment in Greaves Cotton Middle East FZC, it reported a loss of Rs,3.83 crore for the year under review.

Dee Greaves Limited (DGL)

DGL, a wholly owned subsidiary of GLFL, did not undertake any business during the year under review. It reported a marginal loss during the year.

Greaves Cotton Middle East FZC (GCME)

GCME, United Arab Emirates, a wholly owned step-down subsidiary of the Company through GLFL, is engaged in trading and after sales services of the Company''s products in the Middle East. For the year under review, GCME recorded total revenue of Rs,5.42 crore and reported a loss of Rs,0.14 crore.

A statement containing salient features of the Financial Statements in Form AOC-1, as required under Section 129 (3) of the Companies Act, 2013, forms a part of this Annual Report. The audited Financial Statements of each subsidiary company shall be kept open for inspection at the Registered Office of the Company on every working day of the Company between 10 a.m. to 12 noon up to the date of the forthcoming 97th Annual General Meeting.

Consolidated Financial Statements

The Consolidated Financial Statements, prepared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the SEBI (LODR) Regulations"), forms a part of this Annual Report. The Auditors'' Report on the Consolidated Financial Statements is also attached. The same is with unmodified opinion (unqualified).

Management Discussion and Analysis

Detailed review by the Management of the operations, performance and future outlook of the Company and its business, pursuant to Schedule V of the SEBI (LODR) Regulations, is presented in a separate section - Management Discussion and Analysis, which forms a part of this Annual Report.

Corporate Governance Report

The Company follows the principles of Corporate Governance in letter and spirit. Requirements relating to Board of Directors, its Committees, related party transactions, disclosures etc. as prescribed under Schedule V of the SEBI (LODR) Regulations, have been duly complied with. The quarterly Corporate Governance Report confirming that the Company has complied with statutory provisions has been filed with the Stock Exchanges, where the shares of the Company are listed and also placed before the Board of Directors. A detailed report on Corporate Governance and a certificate from the Statutory Auditors confirming compliance of conditions of the Corporate Governance, forms a part of this Annual Report.

Compliance with the Code of Conduct

A declaration signed by the Managing Director & CEO affirming compliance with the Company''s Code of Conduct by the Directors and Senior Management, for the financial year 2015 - 16, as required under Schedule V of the SEBI (LODR) Regulations, forms a part of this Annual Report.

Environment, Health and Safety

The Company manufactures a wide range of industrial products to meet the requirements of the core sectors in India and abroad. Safety is an important aspect for any manufacturing company. Various safety guidelines are in place which help identify unsafe actions or conditions in the Company premises. These guidelines form the corner stone on which the Company can operate smoothly devoid of any mishap or accidents at the work place.

Regular safety drives coupled with effective training and role-play techniques are conducted to help spread awareness among employees on how to maintain a safe work environment. To further bolster employee safety, the Company also conducts a periodic Safety Management Audit which identifies unsafe actions or conditions through scientific data processing methods. These results are used to further improve the existing safety measures and foster a safe and secure environment for all employees.

With a strong focus in meeting our objectives of Zero Accidents and Zero Pollution for the Company, a detailed strategy for implementation of this program has been formulated and implemented across geographies. The safety program has been deployed through the KAI-KPI-KMI approach, i.e. Key Activity Indices, Key Performance Indices and Key Management Indices. The program methodology outlines training the employees, skill cultivation through practice and safety assurance in the form of output.

Some of the measures taken to promote environment, health and safety measures across the Company are:

1) Systems implementation to ensure zero compromise on safety through ''Work Permit System'' and ownership of adherence to the safety norms.

2) Identification of the safety hazards, near misses and accident prone areas through Safety Management Audit.

3) Special training programs to make the employees aware of the various nomenclatures regarding safety.

4) Health awareness initiatives, like complete medical health check-up, BMI Test, consultation sessions, etc. to take care of employees'' health, in order to prevent health hazards.

5) Environment friendly measures like planting saplings and a Swacch Plant Abhiyan across all facilities. The employees are also required to take an oath to keep the environment safe, and are encouraged to participate in competitions like poster creation, slogan design, essay and poem writing to keep the safety drive alive and vibrant in the culture.

Human Resources

Your Directors place on record their appreciation for the employees'' valuable contribution at all levels. Overall, our industrial relations continue to be cordial. The Company relocated its manufacturing operations of the Farm Equipment business from Gummidipoondi to Ranipet. Management is in the discussion with the workers for an amicable settlement.

The total number of permanent employees of the Company as on 31st March, 2016 was 1,894 (2,005 as on 31st March, 2015).

During the year under review, the Company continued to focus on talent conservation and talent development. Every employee is required to undergo minimum 8 man days of training for skill sets. Pursuant to the requirements under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has enacted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Work Place and constituted Internal Complaints Committees. There were no cases filed during the year under review. The required annual report has been filed with appropriate authority.

Awards

We are pleased to share that the Company has received the prestigious CLO (Chief Learning Officer''s) Award, organized by Tata Institute of Social Sciences in association with LeapVault. The Company has won the Silver award in the category for the Best Customer Service Training Program and Best Risk / Safety / Policy Compliance Training Program.

Directors and Key Managerial Personnel

Mr. Kewal Handa has been appointed as an Additional Director of the Company with effect from 6th May, 2016 to hold office upto the date of the forthcoming 97th Annual General Meeting and is eligible to be appointed as an Independent Director. It is proposed to appoint Mr. Handa as an Independent Director, not liable to retire by rotation for a period of five years, and accordingly, Members'' approval is being sought at the forthcoming 97th Annual General Meeting.

Mr. Vijay Rai was appointed as an Independent Director by the Members at the 95th Annual General Meeting held on 31st July, 2014 to hold office as such till 12th October, 2016. Pursuant to the provisions of Section 149 (10) of the Companies Act, 2013, an Independent Director shall be eligible for re-appointment for a second term on passing of a Special Resolution by the Company. It is proposed to re-appoint Mr. Rai as an Independent Director of the Company for a period of one year with effect from 13th October, 2016 and accordingly, Members'' approval is being sought at the forthcoming 97th Annual General Meeting.

Mr. Karan Thapar retires by rotation at the forthcoming 97th Annual General Meeting, and being eligible, offers himself for re-appointment.

Profiles of these Directors, as required by Regulation 36 (3) of the SEBI (LODR) Regulations, are given in the Notice of the forthcoming 97th Annual General Meeting.

The above appointments and re-appointments form a part of the Notice of the forthcoming 97th Annual General Meeting, and the Resolutions are recommended for Members'' approval.

During the year under review, Dr. Clive Hickman resigned as a Director with effect from 31st July, 2015. The Board places on record its sincere appreciation of the valuable contribution made by him to the Company.

Mr. Sunil Pahilajani, Managing Director & CEO, Ms. Monica Chopra, Executive Director - Legal & Company Secretary, and Mr. Narayan Barasia, Chief Financial Officer, are the Key Managerial Personnel of the Company within the meaning of Sections 2 (51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Statement on declaration given by the Independent Directors

As required under Section 149 (7) of the Companies Act, 2013, each of the Independent Directors has given the necessary declaration about meeting the criteria of independence as specified in Section 149 (6) of the Companies Act, 2013.

Directors'' Responsibility Statement

In terms of Section 134 (5) of the Companies Act, 2013, the Directors state that to the best of their knowledge and belief and according to the information and explanations obtained by them:

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

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for that period;

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

5. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively; and

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

Policy on appointment and remuneration of Directors

The Company has constituted a Nomination and Remuneration Committee and formulated the criteria for determining the qualification, positive attributes and independence of a Director (the Criteria). The Nomination and Remuneration Committee has recommended to the Board a policy relating to the remuneration for Directors, Key Managerial Personnel and other employees, as required under Section 178 (1) of the Companies Act, 2013. The Remuneration Policy is given in Annexure 1 to this Directors'' Report. The Criteria includes, inter alia, a person to be appointed on the Board of the Company should possess in addition to the fundamental attributes of character and integrity, appropriate qualifications, skills, experience and knowledge in one or more fields of engineering, banking, management, finance, marketing and legal, a proven track record, etc.

As required under Section 197 (14) of the Companies Act, 2013, the Executive Directors of the Company confirm that they do not receive any remuneration or commission from any subsidiary of the Company.

Ratio of remuneration of each Director to the median remuneration of the employees

The information 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, is available. In terms of Section 136 (1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company and others entitled thereto.

The said information shall be kept open for inspection at the Registered Office of the Company on every working day of the Company between 10 a.m. to 12 noon up to the date of the forthcoming 97th Annual General Meeting.

Familiarization Programme for Directors

The Company follows a structured orientation programme including presentations by key personnel, information about the various codes, policies, etc. to familiarize the Directors with the Company''s operations. In addition, plant visits are organized to familiarize the Directors with the Company''s products, production process, etc. Periodically, the Company sponsors interested Directors for seminars / training programmes. Presentations made at the Board / Committee Meetings, inter alia, cover the business strategies, human resource matters, budgets, initiatives, risks, operations of subsidiaries, etc. where the Directors get an opportunity to interact with the Senior Management.

The Directors'' Familiarization Programme is displayed on the Company''s website www.greavescotton.com.

Evaluation of performance of Board, its Committees and individual Directors

The Board has established a comprehensive and participative annual process to evaluate its own performance, its Committees and the individual Directors. The performance evaluation matrix defining the criteria of evaluation for each of the above was prepared by the Nomination and Remuneration Committee. The criteria for performance evaluation includes, inter alia, relevant experience and skills, ability and willingness to speak up, ability to carry others, ability to disagree, stand his / her ground, integrity, focus on shareholder value creation and high governance standards. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated).

A Meeting of the Independent Directors, with Mr. Vikram Tandon as the Lead Director, was held on 5th May, 2016 to review the performance of the Non-independent Directors, the Board as a whole and the Chairman on the parameters of effectiveness and to assess the quality, quantity and timeliness of the flow of information between the Management and the Board.

As an outcome of the evaluation process, the Directors were informed by the Chairman about their respective strengths, areas of improvements, focus areas for the future, etc. In turn, the Lead Director provided feedback to the Chairman.

Loans, Guarantees and Investments

Particulars of loans, guarantees and investments as on the 31st March, 2016 are given in the Notes to the Financial Statements.

Contracts and arrangements with Related Parties

During the year under review, the Company did not enter into any Material transaction (as defined in the Company''s Policy on Related Party Transactions) with related parties. All other transactions of the Company with related parties were in the ordinary course of business and at an arm''s length. Details of transactions with related parties are disclosed in the Notes to the Standalone Financial Statements, forming a part of this Annual Report.

The Form AOC - 2 as required under Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, is given in Annexure 2 to this Directors'' Report.

Number of Meetings of the Board

The details of the number of Meetings of the Board and other Committees are given in the Corporate Governance Report which forms a part of this Annual Report.

Extract of Annual Return

As required under Section 134 (3) (a) of the Companies Act, 2013, an extract of Annual Return in the prescribed Form MGT - 9, is given in Annexure 3 to this Directors'' Report.

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

Particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo, as prescribed in Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given in Annexure 4 to this Directors'' Report.

Risk Management Policy

The Company has constituted a Risk, CSR and Strategy Committee of Directors to oversee the risk management efforts. The Company has put in place a robust Enterprise Risk Management (ERM) Policy which covers strategic risks, operational risks, regulatory risks and catastrophic risks and provides a clear identification of "Risks That Matter (RTM)". These RTMs are periodically monitored by the Management and on a half-yearly basis by the Risk, CSR and Strategy Committee. Implementation of this ERM Policy effectively supports the Board and the Management in ensuring that risks, if any, which may significantly impact the Company are adequately highlighted and mitigation actions are implemented in a time-bound manner to reduce the risk impact. There are no risks, which in the opinion of the Board threaten the existence of the Company. However, the risks that may pose a concern are set out in the Management Discussion and Analysis which forms a part of this Annual Report.

Corporate Social Responsibility

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has adopted a Corporate Social Responsibility (CSR) Policy, as recommended by the Risk, CSR and Strategy Committee covering the objectives, initiatives, outlay, implementation, monitoring, etc. The CSR Policy is displayed on the Company''s website www.greavescotton.com.

A report on the CSR activities in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, duly signed by the Managing Director & CEO and the Chairman of the Risk, CSR and Strategy Committee, is given in Annexure 5 to this Directors'' Report.

The Company strives to maximize the organization''s positive impact and raise the social responsibility quotient by aligning with the needs of the selected communities.

Committed to creating opportunities for the local people to enable their empowerment, initiatives are aligned to areas of skill development. An important initiative undertaken by the Company to promote livelihood of the underprivileged is its ongoing programme to train mechanics. The programme, now running for over two decades at the Company''s facilities, focuses on promoting self-sufficiency and improving the quality of life through technical and financial support.

By contributing to community welfare and fulfilling unmet needs, the Company will continue to create value for society through community development programs in and around its areas of operations.

Vigil Mechanism

The Company has established a vigil mechanism, through a Whistle Blower Policy, where under the Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle-blowing mechanism not only helps the Company in detection of fraud, but is also used as a corporate governance tool leading to prevention and deterrence of misconduct. It provides direct access to the employees of the Company to approach the Compliance Officer or the Chairman of the Audit Committee, where necessary. the Company ensures that genuine Whistle Blowers are accorded complete protection from any kind of unfair treatment or victimization.

Internal Financial Controls related to Financial Statements

The Company has in place adequate internal financial controls related to Financial Statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. Some of the controls are outlined below:

- The Company has adopted accounting policies, which are in line with the Accounting Standards and other applicable provisions of the Companies Act, 2013;

- Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors;

- In preparing the Financial Statements, judgments and estimates have been made based on sound policies. The basis of such judgments and estimates are approved by the Auditors and the Audit Committee;

- The stand alone accounts are reviewed every quarter by the Auditors;

- The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of the Company. The accounts of the subsidiaries companies are audited and certified by their respective Statutory Auditors for consolidation.

Internal Control Systems and their adequacy

Details of the Internal Control Systems and their adequacy are provided in the Management Discussion and Analysis which forms a part of this Annual Report.

Statutory Auditors

Deloitte Haskins & Sells LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company at the 96th Annual General Meeting (AGM) held on 6th August, 2015 to hold office from the conclusion of the 96th AGM till the conclusion of the 101st AGM of the Company. As required under Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors has to be placed for ratification at every Annual General Meeting. Accordingly, the ratification of the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, as Statutory Auditors of the Company, forms a part of the Notice convening the forthcoming 97th Annual General Meeting and the Resolution is recommended for your approval.

Wrigley Parrington, U.K., the Auditors of the Company''s Branch in Cheshire, London (U.K.), retire at the forthcoming 97th Annual General Meeting. The re-appointment of the Branch Auditors forms a part of the Notice convening the forthcoming 97th Annual General Meeting and the Resolution is recommended for your approval.

Statutory Auditors'' Reports

Reports issued by the Statutory Auditors on the Standalone and Consolidated Financial Statements for the financial year ended 31st March, 2016 are with unmodified opinion (unqualified).

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company engaged the services of Pradeep Purwar and Associates, Company Secretary in Practice, Thane to conduct the secretarial audit of the Company for the financial year ended 31st March, 2016.

The Secretarial Audit Report (Form MR - 3) is attached as Annexure 6 to this Directors'' Report. The report is unqualified.

Cost Auditors

Pursuant to the provisions of Section 148 (3) of the Companies Act,

2013, the Board has appointed Dhananjay V. Joshi & Associates, Cost Accountants, as the Cost Auditors of the Company to conduct an audit of the cost records maintained by the Company for the financial year ending 31st March, 2017. The remuneration payable to the Cost Auditors is subject to approval of the Members at the Annual General Meeting. Accordingly, the remuneration payable to the Cost Auditors forms a part of the Notice convening the forthcoming 97th Annual General Meeting and the Resolution is recommended for your approval.

Change in Registrar and Share Transfer Agent

Pursuant to the Securities and Exchange Board of India (SEBI) Order dated 22nd March, 2016 advising companies who are clients of Sharepro Services (India) Limited (Sharepro) to carry out / switchover their activities relating to Register & Share Transfer Agent (RTA) to another RTA registered with SEBI, the Board of Directors of the Company at its meeting held on 6th May, 2016 approved the change of RTA from Sharepro to Karvy Computershare Private Limited.

Further, in accordance with the said Order of SEBI, the Company has appointed Parikh & Associates, Practicing Company Secretaries, for conducting a thorough audit of the records and systems of Sharepro for the past ten years, concerning dividend payments and transfer of securities to determine whether dividends have been paid to actual / beneficial holders and whether securities have been transferred as per the provisions of law. The audit is in progress and is expected to be completed shortly. As per the interim audit report, no untoward matter has been reported.

Other Disclosures

The Directors confirm that during the financial year under review-

- there were no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations;

- there was no issue of equity shares with differential rights as to dividend, voting or otherwise; there was no issue of shares (including sweat equity shares) to the employees of the Company under any scheme.

Acknowledgement

The Board wishes to place on record its appreciation for all the employees for their hard work, solidarity, cooperation and dedication during the year.

The Board sincerely conveys its appreciation to other stakeholders for their continued support.

For and on behalf of the Board of Directors

Mumbai Karan Thapar

6th May, 2016 Chairman


Mar 31, 2014

The Directors have pleasure in presenting their Ninety-ffth Annual Report for the year ended 31st March, 2014.

Financial Highlights:

The financial highlights for the year under review, compared with the previous financial year, are summarised below:

(Rs. in Crores)

Year ended Year ended March 31, March 31, 2014 2013

Revenue (Net of Excise Duty) 1,745.72 1,888.84

Profit Before Tax and 172.26 217.76 Exceptional items

Less: Provision for Tax 52.10 63.19

Profit After Tax before 120.16 154.57 Exceptional items

Loss / (Gain) on Exceptional 7.07 16.61 Items (Net of Tax)

Profit after Tax including 113.09 137.96 Exceptional Items

Dividends (including proposed 37.09 45.22 Final Dividend) and Tax on Dividend

Transfer to General Reserve 25.00 25.00

Balance of the Profit carried 411.22 360.22

forward

Review of Operations:

The financial year 2013-14 witnessed a sharp macro-economic downturn. It was characterised by slowing demand, high costs of borrowings and stalling of infrastructure projects. The bleak performance of the manufacturing and industrial sectors severely impacted the industries dependant on domestic demand. The environment resulted in de-growth across all the major product categories that the Company caters to i.e. three Wheeler / four Wheeler Small Commercial Vehicles, Pump sets, Gensets and Construction Equipment.

The Company registered a net revenue from operations of Rs.1,745.72 Crores in the financial year 2013-14 as against Rs.1,888.84 Crores in the financial year 2012-13, recording a decline of about 7.57%. The profit after tax recorded a 18.03% decline from Rs.137.96 Crores in the financial year 2012-13 to Rs.113.09 Crores in the financial year 2013-14.

Despite the performance being adversely affected by the grim situation for the capital goods industry, particularly so for the automotive segments, the Company was able to retain its market share across all its segments.

The Company''s sustained efforts towards back-end cost control, new product launches and efficiency improvement measures, supported the insulation and limited the impact on the profitability margins. The net profit margin (excluding exceptional items) for the financial year 2013-14 was lower at 7.04% as against 8.3% in the financial year 2012-13.

Our multi-dimensional growth strategy will help us develop superior products, deepen markets and widen geographies. The Company''s ability to better utilise capacities and product range will help derive better margins out of the businesses. The outlook of each business has been discussed in detail in the ''Management Discussion & Analysis'' which forms a part of this Annual Report.

Dividend:

The Directors, during the financial year 2013-14, paid two interim dividends of Rs.0.70 and recommended a final dividend of Rs.0.60 per share of Rs.2, aggregating to Rs.1.30 as against Rs.1.60 per share of Rs.2 in the previous year. The total dividend pay-out for the current year, excluding tax on dividend, is Rs.31.75 Crores as against Rs.39.07 Crores in the previous year. Dividend as a percentage of net profit after tax is 28.07 % as compared to 28.32% in the previous year.

The Register of Members and the Share Transfer books will remain closed from Tuesday, 22nd July, 2014 to Thursday, 31st July, 2014 (both days inclusive). The final dividend, as recommended by the Board of Directors, if declared at the Annual General Meeting, will be paid at par on or after Friday, 22nd August, 2014 in respect of Shares held in dematerialised form, to the beneficial owners of the Shares as at the close of business hours on Monday, 21st July, 2014, as per details furnished by National Securities Depository Limited and Central Depository Services (India) Limited and to those Members, who hold Shares in physical form and whose names appear on the Company''s Register of Members, on Thursday, 31st July, 2014.

Pursuant to the provisions of Section 124 of the Companies Act, 2013, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid account, is required to be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government. Accordingly, unpaid or unclaimed dividends in respect of the 3rd interim dividend and the final dividend for the financial year 2005-06 and 1st and 2nd interim dividends for the financial year 2006-07, have been transferred to the IEPF.

Members, who have not encashed the dividend warrants for the unclaimed dividends that are yet to be transferred to the IEPF Account, are requested to contact the Company''s Registrar and Share Transfer Agent, at the earliest.

Subsidiaries:

1. Greaves Leasing Finance Limited (GLFL)

GLFL, a wholly owned subsidiary of the Company, is a non-banking finance company. It reported total revenue of Rs.4.46 Crores and profit after tax of Rs.3.04 Crores for the financial year 2013-14. During the year under review, GLFL acquired 90% shareholding in Greaves Cotton Middle East FZC (GCME) from Greaves Cotton Netherlands B.V., at book value. Accordingly, GCME became a subsidiary of GLFL. In May, 2013, the Paid-up Share Capital of GLFL was reclassifiied by conversion of 1,50,82,689, 6% Cumulative Redeemable Preference Shares, issued to its parent company, to 1,50,82,689 Equity Shares of Rs.10 each. In March, 2014, GLFL issued 39,12,835 Equity Shares as Bonus Shares out of its Capital Reserves in the ratio of 1 Equity Share for every 4.311 Equity Shares held, to its parent company.

2. Greaves Auto Limited (GAL)

GAL is a wholly owned subsidiary of the Company. Since business activities were not likely to commence in the foreseeable future, an application for striking of the name of GAL from the register of the Registrar of Companies was made in April, 2014 under the Fast Track Scheme of the Ministry of Corporate Affairs. On completion of the formalities with the Registrar of Companies, GAL will cease to exist.

3. Dee Greaves Limited (DGL)

DGL is a wholly owned subsidiary of GLFL. During the financial year 2013-14, it did not undertake any business. It earned a marginal profit representing interest income, net of expenses.

4. Greaves Farymann Diesel GmbH, Germany (GFD)

GFD was a wholly owned subsidiary company of Greaves Cotton Netherlands B.V. In order to curtail further losses, during the year under consideration, the entire shareholding in GFD was disposed of under a Management Buyout arrangement. Accordingly, GFD ceased to be a subsidiary with effect from 10th October, 2013.

5. Greaves Cotton Middle East FZC, United Arab Emirates (GCME) (Formerly known as Ascot International FZC)

GCME is step-down subsidiary of the Company through GLFL. It ofers sales services in the Middle East and North African countries for various products of the Company and is of strategic importance. GCME recorded a revenue of Rs.15.22 Crores and incurred a loss of Rs.1.03 Crores for the year ended 31st March, 2014. During the year under review, the name of the company was changed from Ascot International FZC to Greaves Cotton Middle East FZC in order to help build the "Greaves" brand globally and to attract new business prospects for the Greaves Cotton Group.

6. Greaves Cotton Netherlands B.V., The Netherlands (GCN)

GCN, a wholly owned subsidiary of the Company, was set up as a Special Purpose Vehicle (SPV) for holding the Company''s investments in step-down subsidiaries. During the financial year 2013-14, its entire shareholding in Greaves Farymann Diesel GmbH was divested while its investment in Greaves Cotton Middle East FZC was sold to GLFL at book value. Consequently, GCN became a shell company and was eventually liquidated effective 19th December, 2013.

The subsidiary companies, mentioned above, are unlisted non- material subsidiaries as defined under Clause 49 of the Listing Agreement with the Stock Exchanges.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Balance Sheet, Statement of Profit and Loss of the subsidiary companies. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated 8th February, 2011, has exempted companies from complying with Section 212 of the Companies Act,1956, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2013-14 does not contain the financial statements of the subsidiary companies. A summary of the financial performance of the subsidiary companies is given in this Annual Report. The Annual Accounts of the subsidiary companies can be obtained from the Company''s website. The copy of the same is available, firee of cost to Members, on request and are open for inspection at the Registered Office between 10 am to 12 noon on any working day of the Company.

Consolidated Financial Statements:

The Consolidated Financial Statements, prepared by the Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreements with the Stock Exchanges, form a part of this Annual Report. The Auditors'' Report on the Consolidated Accounts is also attached. The same is unqualified.

Management Discussion & Analysis:

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed review by the Management of the operations, performance and future outlook of the Company and its business, is presented in a separate section - Management Discussion & Analysis and forms a part of this Annual Report.

Corporate Governance:

The Company has complied with the requirements of the Corporate Governance Code, as prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A Report on Corporate Governance, along with a Certificate from the Statutory Auditors, confirming the compliance, is annexed and forms a part of this Report.

Compliance with the Code of Conduct:

A declaration signed by the Managing Director affirming compliance with the Company''s Code of Conduct by the Directors and Senior Management, for the financial year 2013-14, as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is annexed and forms a part of this Report.

Public Deposits:

The Company discontinued its Fixed Deposit Scheme in April, 2005. As on 31st March, 2014, the unclaimed Public Deposits stood at Rs.1,75,000. Pursuant to provisions of Section 205C of the Companies Act, 1956, the unpaid deposits and interest due thereon, have been transferred to the Investor Education and Protection Fund (IEPF) on the respective due dates. During the year under review, the Company transferred Rs.52,000 to the IEPF Account.

Environment, Health and Safety:

The Company continues to be committed to its resolve of focusing on adequate safety procedures at unit level. All the plants are governed by our "Environment, Occupational Health and Safety Policy" and are certified to ISO 14000 and OHSAS 18000 standards.

The plants have successfully initiated and implemented various safety and environmental projects on energy conservation, water conservation, effective ventilation etc. Work place safety has been improved by introducing new machineries, tools and improvement in infrastructure. Results of safety initiatives are visible through reduced number of reportable accidents.

Human Resources:

Your Directors place on record their appreciation for the employees'' valuable contribution at all levels. Our industrial relations continue to be cordial. During the year under review, three settlement agreements were signed with the Employee Unions.

The total number of permanent employees of the Company as on 31st March, 2014 was 2,307 (2,248 as on 31st March, 2013).

During the year under review, the Company continued to focus on talent conservation and talent development.

Pursuant to the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has enacted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Work Place. No cases were filed during the year under review.

Particulars pursuant to the provisions of Section 217 of the Companies Act, 1956:

Particulars, as prescribed by Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, to the extent applicable to the Company, is set out in the Annexure to this Report.

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, this Report and Accounts are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Members may inspect the said Statement at the Registered Office of the Company between 10 a.m. and 12 noon on any working day of the Company.

Directors'' Responsibility Statement:

To the best of their knowledge and belief and according to the information and explanations obtained by them, in terms of Section 217(2AA) of the Companies Act, 1956, the Directors state that:

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

2. 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 as at 31st March, 2014 and of the profit of the Company for the year ended on that date;

3. 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; and

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

Directors:

Mr. Sukh Dev Nayyar retired as a Director of the Company with effect from 2nd November, 2013, in accordance with the retirement policy of the Company. The Board would like to thank Mr. Nayyar and place on record its appreciation for his contribution during his tenure of six years with the Company as a Director on the Board and Member and Chairman of the Audit Committee.

Mr. Vikram Tandon and Dr. Clive Hickman retire by rotation at the ensuing Annual General Meeting, and are proposed to be appointed as Independent Directors. The Company has received requisite notices in writing along with the necessary deposit from Members proposing the candidature of Mr. Tandon and Dr. Hickman for the Office of Independent Director.

Mr. Navneet Singh and Mr. Arvind Kumar Singhal were appointed as Additional Directors with effect from 1st August, 2013 and 1st November, 2013, respectively. They hold Office up to the date of the ensuing Annual General Meeting. The Company has received from them the requisite notices in writing along with the necessary deposit signifying their candidature for the Office of Independent Director.

Mr. Vijay Rai was appointed as a Director of the Company liable to retire by rotation. However, as per Section 149 of the Companies Act, 2013, it is necessary to appoint existing Directors as Independent Directors. The Company has received the requisite notice in writing from a Member proposing the candidature of Mr. Rai for the Office of Independent Director.

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

Profiles of these Directors, as required by Clause 49 of the Listing Agreement with the Stock Exchanges, are given in the Notice convening the forthcoming Annual General Meeting.

The above appointments form a part of the Notice convening the forthcoming Annual General Meeting and the Resolutions are recommended for your approval.

Statutory Auditors:

The Company''s Auditors, Walker, Chandiok & Co. LLP, Chartered Accountants, Mumbai and the Branch Auditors, Wrigley Partington, U.K., in respect of Company''s Branch in Cheshire, London (U.K.), retire at the forthcoming Annual General Meeting and have conformed their eligibility and willingness to accept Office, if re-appointed. Their re-appointment as the Statutory Auditors and the Branch Auditors, respectively, forms a part of the Notice convening the forthcoming Annual General Meeting and the Resolutions are recommended for your approval.

Cost Auditors:

Pursuant to the provisions of Section 148 (3) of the Companies Act, 2013, the Directors have appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, as the Cost Auditors of the Company to conduct an audit of the cost records maintained by the Company for the financial year 2014-15.

The Cost Audit Report and the Cost Audit Compliance Report for the financial year 2012-13 were filed with the Ministry of Corporate Affairs before the respective due dates.

Acknowledgement:

The Board places on record its appreciation for the support and co-operation the Company has been receiving from its all stakeholders. The Company looks upon them as partners in its progress. It will always be the Company''s Endeavour to build and nurture strong relationship for mutual benefits.

For and on behalf of the Board of Directors

Mumbai Karan Thapar

30th April, 2014 Chairman


Mar 31, 2013

The Members,

The Directors present the 94th Annual Report for the financial year ended 31st March, 2013.

Financial Highlights:

The financial highlights for the year under review, compared with the previous financial year, are given below:

(Rs. In Crore)

Year Ended Year Ended 31st March, 2013 31st March, 2012

Revenue (Net of Excise Duty) 1,888.84 1,759.42

Profit Before Tax and Exceptional items 217.76 207.29

Less: Provision for Tax 63.19 62.89

Profit After Tax before Exceptional items 154.57 144.40

Loss / (Gain) on Exceptional items (Net of Tax) 16.61 (41.09)

Profit after Tax including Exceptional items 137.96 185.49

Dividends (including proposed Final Dividend) and Dividend Distribution Tax 45.22 62.10

Transfer to General Reserve 25.00 25.00

Balance of the Profit carried forward 360.22 292.48

Review of Operations

The financial year under review began on a challenging tone. High inflation, low industrial output, high rates of interest plagued the country''s economy which witnessed the lowest growth in the decade of 5% in the financial year 2012-13 (FY13). This affected the performance of almost all business segments in which the Company operates.

Weathering tough times, the Company registered Net Revenue from operations of Rs.1,873.29 Crore in FY13 as against Rs.1,753.44 Crore in 2011-12 (FY12), clocking a rise of 6.8%. FY13 saw the Engine Segment record a 7% increase in revenue while the Infrastructure Equipment Segment revenue grew by 3%.

Net Profit for the year was Rs.137.96 Crore as against Rs.185.49 Crore in FY12. The Company had an advantage of exceptional income of Rs.41.09 Crore in FY12 and disadvantage of exceptional loss of Rs.16.61 Crore in FY13.

During the year under review, due to the growth-oriented strategy of the Company which laid special emphasis on operational efficiency and cost optimisation, the Net Profit margin (excluding exceptional items) was marginally higher at 8.3% for FY13 as against 8.2% in FY12.

In its endeavour to engineer growth, the Company has been treading on a multi-dimensional growth strategy, which is reflected in the performance and highlights of its different businesses. The outlook of each business has been discussed in detail in the ''Management Discussion and Analysis'' annexed to this Report.

Dividend

Three interim dividends aggregating to Rs.1.10 per share of Rs.2 were paid for FY13. The Directors have recommended a final dividend of Rs.0.50 per share of Rs.2, making in all Rs.1.60 per share as dividend for FY13 as against Rs.1.40 per share in FY12.

The total dividend payout is Rs.39.07 Crore as against Rs.53.72 Crore in the previous year. Dividend as a percentage of consolidated Net Profit after Tax is 28.32% as compared to 28.96 % in the previous year.

The Register of Members and the Share Transfer Books will remain closed from Tuesday, 23rdJuly, 2013 to Tuesday, 30th July, 2013 (both days inclusive) for determining the eligibility for final dividend, if declared at the ensuing Annual General Meeting scheduled to be held on 30th July, 2013.

Subsidiary Companies

1. Greaves Leasing Finance Limited (GLFL)

GLFL is a wholly owned subsidiary of the Company. GLFL is a non banking finance company engaged in leasing and finance activities confined only to the Greaves Group. It reported total Revenue of Rs.4.48 Crore and Profit after Tax of Rs.2.91 Crore for FY13. During the year under review, GLFL, with the approval of the HonRs.ble Bombay High Court, reduced the Paid-up Preference Share Capital to the extent of Rs.13.50 Crore, which was in excess of wants of the Company, by paying off / returning the same to the holders of the said Preference Shares.

2. Greaves Auto Limited (GAL)

GAL is a wholly owned subsidiary of the Company. GAL is yet to commence any business activity. GAL earned marginal profit on account of interest income, net of expenses.

3. Dee Greaves Limited (DGL)

DGL is a wholly owned subsidiary of GLFL. During FY13, it did not do any business. It earned a marginal profit representing interest income, net of expenses.

4. Greaves Cotton Netherlands B.V. (GCN), Netherlands

GCN is a wholly owned subsidiary of the Company functioning as its investment arm.

During the year under review, the Company invested in GCN a sum of € 22,000 in the Ordinary Share Capital and extended a credit facility of € 0.4 Million to help meet its operating cash flow requirements. As on 31st March, 2013, the Company has invested € 4.91 Million in GCN. For the year ended 31st March, 2013, GCN reported a loss of € 4.75 Million primarily on account of impairment of its investment in Greaves Farymann Diesel GmbH of € 4.71 Million. Correspondingly, the Company has impaired its investment in GCN to the extent of Rs.28.36 Crore.

5. Greaves Farymann Diesel GmbH (GFD), Germany

GFD is a wholly owned subsidiary of GCN. GFD is engaged in manufacturing and marketing of single cylinder diesel engines and parts in Europe.

For the financial year ended 31st March, 2013, GFD reported with a total Income of € 4.80 Million and a Loss of € 0.72 Million. There was an impairment in the books of GCN in respect of GCN''s investment in GFD to the extent of € 4.71 Million.

6. Ascot International FZC (Ascot), United Arab Emirates

Ascot is a subsidiary of GCN (90%) and the Company (10%).

Ascot offers aftersales services in the Middle East and North African Countries for various products of the Company and is of strategic importance for the Company''s International Business. Ascot recorded a Revenue of AED 9.14 Million and incurred a Profit of AED 0.03 Million for the year ended 31st March, 2013.

All the above subsidiary companies are non-material, non-listed subsidiary companies as defined under Clause 49 of the Listing Agreement with the Stock Exchanges.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Balance Sheet, Statement of Profit and Loss of the subsidiary companies. The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated 8th February, 2011, has provided an exemption to companies from complying with the requirement of Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2012-13 does not contain the financial statements of the subsidiary companies. A summary of the financial performance of the subsidiary companies is given in this Annual Report. The Company will make available copies of the financial statements of the subsidiary companies and the related detailed information, free of cost to Members, on request. The same are also available for inspection at the Registered Office between 11 a.m. and 4 p.m. on any working day of the Company.

Consolidated Financial Statements

The consolidated financial statements, prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the Stock Exchanges, forms part of this Annual Report. The Auditors'' Report thereon is also attached. The same is unqualified.

Management Discussion and Analysis

As required by Clause 49 of the Listing Agreement with the Stock Exchanges, a detailed review by the Management of the operations, performance and future outlook of the Company and its business, is presented in a separate section - Management Discussion and Analysis and forms part of this Report.

Corporate Governance Report

The Company has complied with the requirements of Corporate Governance, as prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. A Report on Corporate Governance, along with a Certificate from the Statutory Auditors, confirming the compliance, forms part of this Report.

Compliance with the Code of Conduct

A declaration by the Managing Director affirming compliance with the Company''s Code of Conduct by Directors and Senior Management for FY13, as required under Clause 49 of the Listing Agreement with Stock Exchanges is annexed and forms part of this Report.

Public Deposits

The Company discontinued its Fixed Deposit Scheme in April, 2005. As on 31st March, 2013, the unclaimed deposits stood at Rs.0.02 Crore. Pursuant to the provisions of Section 205C of the Companies Act, 1956, all unpaid deposits and interest due thereon, have been transferred to the Investor Education and Protection Fund (IEPF), on the respective due dates. During the year, the Company has transferred Rs.0.04 Crore to the IEPF.

Environment, Health and Safety (EHS)

The Company is committed to conduct business in a sustainable manner with adequate safety procedures in place at unit level. Measures have been implemented for stringent compliance with environmental, health and safety regulations across the Company.

EHS is a key management focus area. All our plants are governed by our ''Environment, Occupational Health and Safety Policy'' and are certified to ISO 14000 and OHSAS 18000 standards.

All plants have a first aid facility including a room for recuperation, with doctors on call round the clock. Regular training is provided to all employees on EHS. Mock fire drills and emergency evacuation exercises are carried out at specified intervals. All employees must use Personal Protection Equipment (PPE) wherever mandated. We observe a system of regular internal and external audits to ensure compliance and continual improvement.

Waste generation is continually reduced through elimination, reuse and recycling. Most of our vendors deliver materials to us in returnable packaging. We despatch engines to our major customers in returnable pellets. Rainwater harvesting is being implemented at large plants. All waste water and sewage is treated in effluent treatment plants and used for gardening within the premises.

Human Resources

Your Directors place on record their appreciation for the exemplary contribution of the employees at all levels. Our industrial relations continue to be cordial.

During the year under review, 45 employees were retrenched and 33 employees opted for the Early Separation Scheme of the Company. The total number of permanent employees of the Company as on 31st March, 2013 was 2,248 (2,273 as on 31st March, 2012)

During the year under review, the Company continued to focus on talent acquisition and talent development.

Information pursuant to the provisions of Section 217 of the Companies Act, 1956

Particulars, as prescribed by Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, to the extent applicable to the Company, is annexed and forms a part of this Report.

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Report and Accounts are being sent to all the Members of the Company, excluding the Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956. Members may inspect the said Statement at the Registered Office of the Company between 11 a.m. and 4 p.m. on any working day of the Company.

Directors

Mr. Vijay Rai, retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. His profile forms part of the Notice convening the Annual General Meeting. The Board recommends the re-appointment of Mr. Vijay Rai at the ensuing Annual General Meeting.

Mr. Suresh N. Talwar, retires by rotation at the ensuing Annual General Meeting. However, he has expressed his desire not to be re-appointed. Accordingly, Mr. Talwar will cease to be a Director of the Company after the ensuing Annual General Meeting.

During his tenure of nearly 9 years as Director of the Company, Mr. Talwar has made valuable contribution to the Company. The Directors place on record their appreciation for the guidance and support rendered by Mr. Talwar.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

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

2. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profits for the financial year ended 31st March, 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 financial statements have been prepared on a going concern basis.

Statutory Auditors

The Company''s Auditors, Walker, Chandiok & Co., Chartered Accountants, Mumbai and the Branch Auditors, Wrigley Partington, U.K., in respect of the Company''s Branch in Cheshire, U.K., retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed. Their re-appointment as the Statutory Auditors and the Branch Auditors respectively for the financial year 2013-14, forms part of the Notice of the said Annual General Meeting and the Resolutions are recommended for your approval.

Cost Auditors

Pursuant to the provisions of Section 233 B of the Companies Act, 1956, audit of the cost accounts in respect of the Company''s products, as applicable, is being regularly carried out by Dhananjay V. Joshi & Associates, Cost Auditors. The Directors have re-appointed Dhananjay V. Joshi & Associates as Cost Auditors of the Company for the financial year 2013-14.

The due date for filing the Cost Audit Report in XBRL for FY12 was 31st March, 2013. The Company has duly filed the Cost Audit Report on 2nd January, 2013 and the Cost Audit Compliance Report on 4th January, 2013 with the Ministry of Corporate Affairs.

Acknowledgement

The Board places on record its appreciation for the support and co-operation your Company has been receiving from its all stakeholders. The Company looks upon them as partners in its progress. It will always be the Company''s endeavour to build and nurture strong relationship for mutual benefits.

For and on behalf of the Board of Directors

London Karan Thapar

30th April, 2013 Chairman


Mar 31, 2012

The Directors present the Ninety-Third Annual Report for the financial year ended March 31, 2012.

Financial Highlights

(Rs in crore)

Year ended Nine month period ended March 31, 2012 March 31, 2011

Revenue (Net of Excise Duty) 1759.42 1264.55

Profit Before Tax and Exceptional items 207.29 183.68

Less: Provision for Tax 62.89 56.40

Profit After Tax before Exceptional items 144.40 127.28

Gains on Exceptional items (Net of Tax) 41.09 -

Profit after Tax including Exceptional items 185.49 127.28

Dividends (including proposed Final Dividend) and Dividend Distribution 62.10 42.44 Tax

Transfer to General Reserve 25.00 25.00

Balance of the profit carried forward 292.48 194.09

Performance Overview

The financial year under review began on a positive note. However, the economy started witnessing a rise in inflationary trend during the second half of the year which together with tightening of the monetary policy and a widening trade deficit resulted in a slow-down in the overall demand scenario. This affected the performance of almost all business segments in which Greaves operates.

The Company achieved gross revenue of Rs1759.42 crores and Profit after Tax (excluding exceptional items) of Rs144.40 crores for the financial year ended March 31, 2012 as against Rs1264.55 crores and Rs127.28 crores respectively, for the previous financial period (nine months). On a comparative basis (April to March period) the Revenue and the Profit after Tax before exceptional items registered a growth of 8.7% and drop of 6.9% respectively. The profits were lower due to higher material costs and certain one-off items of expenditures/write- offs. The Company commissioned in October 2011, its new unit at Shendra (Aurangabad) for manufacture of Light Diesel Engines. This together with the ongoing expansion at the Ranipet Unit, will enhance the production capacity of Light Diesel Engines for automotive applications to 5,25,000 nos. per annum.

During the year under review, the Company sold its land at Thoraipakkam, Chennai, for a consideration of Rs80 crores thus making a gain amounting to Rs69.4 crores, net of tax.

The performance highlights and business outlook of different businesses of Greaves, are discussed in detail in the "Management Discussion & Analysis" annexed to this Report.

Dividend

The Directors have recommended a Final Dividend of Rs0.20 per share for the year ended March 31, 2012. Thus, the total dividend for the year (including three interim dividends) works out to Rs1.40 per share. In addition, a Special Interim Dividend of Rs0.80 per share has been paid, with a view to distribute to the Shareholders, part of one time gain arising from the sale of Thoraipakkam land. The total cash outgo on account of dividends for the year 2011-12 works out to Rs62.10 crores, including the Dividend Distribution Tax.

The Final Dividend, upon approval by the Members at the Annual General Meeting to be held on July 30, 2012 will be paid to the Members whose names appear in the Register of Members as on July 30, 2012.

Subsidiaries

1. Greaves Farymann Diesel GmbH, Lampertheim, Germany (GFD)

The entire share capital of GFD is held by the Company's wholly owned subsidiary viz. Greaves Cotton Netherlands B.V. GFD reported improved performance for the financial year ended March 31, 2012 with a total income of Euro 5.541 million and loss of Euro 0.033 million. The Company has taken certain strategic moves in order to improve the performance of GFD.

2. Greaves Cotton Netherlands B.V. (GCN)

The entire equity capital of GCN is held by Greaves Cotton Limited. GCN acts as an investment Company in Netherlands B.V. During the financial year under review, the Company invested a further sum of Euro 35,000 in the ordinary shares of GCN. GCN reported a Loss of Euro 35,410 for the year ended March 31, 2012.

3. Ascot International FZC (Ascot), Sharjah

The entire share capital of Ascot is held jointly by Greaves Cotton Netherlands B.V. (90%) and Greaves Cotton Limited (10%). Ascot is engaged in the distribution of Greaves products, largely DG sets. Ascot earned total revenue of AED 2.926 million and incurred a loss of AED 0.367 million for the year ended March 31, 2012. The Company has initiated various steps to improve the business of Ascot on the back of extensive service network for the products sold by Ascot. These measures are expected to improve Ascot's performance substantially in the coming years.

4. Greaves Leasing Finance Limited (GLFL)

GLFL is a wholly- owned subsidiary of the Company. GLFL is engaged in leasing and finance activities confined only to Greaves Group. It reported total revenue of Rs4.47 crores and Profit after Tax of Rs2.72 crores for the financial year 2011-12.

5. Dee Greaves Limited (DGL)

DGL is a wholly owned subsidiary of GLFL. During the financial year 2011-12, it did not do any business. It earned a marginal profit representing interest income, net of expenses.

6. Greaves Auto Limited (GAL)

GAL is a wholly owned subsidiary of Greaves Cotton Limited. GAL is yet to commence any business activity. GAL earned marginal profit on account of interest income net of administrative expenses.

In terms of general exemption given by Central Government under Section 212 of the Companies Act, 1956, copies of the Balance Sheet and Profit & Loss Account, Reports of the Directors and Auditors of the Subsidiaries, have not been attached to the Annual Accounts of the Company. These documents, will however, be made available upon request by any Member of the Company. The financial data of the Subsidiaries in the format prescribed by the Central Government are provided in the Annexure and forms part of this Annual Report.

Promoter Group

The Promoter Group holding in the Company currently is 51.58% of the Company's Equity Capital. The Members may note that the Promoter Group companies, are controlled by Mr. Karan Thapar, comprising of the following Companies (1) English Indian Clays Limited (2) Premium Transmission Limited (3) Pembril Industrial & Engineering Company Private Limited (4) DBH International Private Limited (5) Karun Carpets Private Limited (6) Greaves Leasing Finance Limited (7) Dee Greaves Limited (8) Bharat Starch Products Limited (9) DBH Global Holdings Limited (10) DBH Investments Private Limited (11) Greaves Farymann Diesel GmbH (12) DBH Consulting Limited (13) Greaves Auto Limited (14) Greaves Cotton Netherlands B.V. (15) Ascot International FZC (16) Premium Transmission Cooperatie UA (17) DBH Stephan Ltd. and (18) Premium Stephan B.V., Netherlands.

Directors

Mr. Prabhakar Dev, Managing Director & CEO, retired on November 4, 2011.

Mr. Karan Thapar and Mr. S.D. Nayyar retire by rotation and are eligible for re-appointment.

Mr. Sunil Pahilajani was inducted on the Board as an Additional Director and appointed as Managing Director & CEO of the Company effective November 5, 2011. Mr. Pahilajani, aged 49 years, is a Mechanical Engineer from the Indian Institute of Technology - Roorkee and has multi-disciplinary experience of over 27 years in various companies such as Maruti Udyog Ltd., Hongo India, Mahindra Navistar Engines and Caparo India wherein he held the positions of MD, CEO and Board Member.

Dr. Clive Hickman joined the Board as an Additional Director effective March 1, 2012. Dr. Hickman, aged 57 years, a technology expert in the field of mechanical engineering from the UK, was the Managing Director of M/s. Ricardo, UK, several years ago. He is currently employed as the Managing Director of M/s. Manufacturing Technology Centre in UK, a UK Government initiative to encourage investment into engineering manufacturing in the UK.

The Directors are confident that the appointments of Mr. Pahilajani and Dr. Hickman would be beneficial to the Company.

The profiles of the new and retiring Directors seeking appointments/re-appointments, form part of the Notice convening the Annual General Meeting. The Board recommends appointments/re-appointments of these Directors.

Directors' Responsibility Statement

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. In the preparation of the Accounts, the applicable accounting standards have been followed.

2. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and profits for the financial 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.

Consolidated Financial Statements

The Consolidated Financial Statements, prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India, together with the Auditors' Report, form part of this Annual Report.

Code of Conduct

Pursuant to Clause 49 of the Listing Agreement, a Declaration signed by the Managing Director & CEO regarding compliance of Code of Conduct for the year ended March 31, 2012, is annexed and forms part of this Report.

Fitch Ratings

The Directors are pleased to report that M/s. Fitch Ratings have upgraded the long term rating of the Company from FITCH AA (- IND) to FITCH AA (IND). The Rating FITCH AA (IND) reflects High Credit Quality and indicates a low expectation of credit risk. This rating reflects sound financial health of the Company.

Corporate Governance

The Company has fully complied with the Corporate Governance Code, as prescribed under Clause 49 of the Listing Agreement. A Report on Corporate Governance, along with a Certificate from Auditors, confirming the compliance, is annexed and forms part of this Report.

Auditors

The Company's Auditors viz. Messrs. Walker, Chandiok & Co., Chartered Accountants, Mumbai and Branch Auditors viz. Messrs. Wrigley Partington, U.K., in respect of Company's Branch in Cheshire, London (U.K.), will retire at the ensuing Annual General Meeting and are eligible for re-appointment. Both these Auditors have sought their re-appointments.

The Directors recommend re-appointment of the Auditors.

Cost Auditors

Pursuant to the provisions of Section 233-B of the Companies Act, 1956, audit of cost accounts in respect of the Company's products, as applicable, is being regularly carried out by the Cost Auditors. The Directors have re-appointed Dhananjay V. Joshi & Associates, Cost Accountants, as Cost Auditors of the Company for the financial year 2012-13.

Unclaimed Shares Suspense Account

In July 2011, the Company opened an Unclaimed Shares Suspense Account on behalf of the holders whose shares of the Company have remained unclaimed for quite some time. The status of the shares held in the above suspense account as on March 31, 2012, is as follows:

Aggregate Number of shareholders and shares transferred to Unclaimed Shares Suspense Account on July 6,97,835 shares held by 28, 2011 5,184 shareholders

Number of shareholders who approached the Company for transfer of shares from Unclaimed Shares 27,100 shares held by 49 Suspense Account to their respective accounts shareholders.

Aggregate number of shareholders and the shares lying in the Unclaimed Shares Suspense Account as on 6,70,735 shares held by March 31, 2012 5,135 shareholders

Public Deposits

As on March 31, 2012, the unclaimed Public Deposits stood at Rs0.07 crores. Pursuant to the provisions of Section 205C of the Companies Act, 1956, all unpaid Public Deposits and interest due thereon, have been transferred to the Investor Education and Protection Fund, on the respective due dates.

Human Resources

During the year under review, the Company signed a long term wage settlement Agreement with the workers' union at Ranipet Unit of Automotive Engine Business. The Company's industrial relations by and large remained cordial.

During the year under review, Greaves continue to focus on talent acquisition and talent development. Its HR Department has introduced performance management system which will help in making Greaves a performance driven organization.

Particulars pursuant to the provisions of Section 217 of the Companies Act, 1956

Information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e) of the Companies Act, 1956 is set out in the Annexure to this Report.

Pursuant to the provisions of Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, in tandem with the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts as set out therein, are being sent to all the Members of the Company excluding the aforesaid information about the employees. Any Member interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of the Company.

Acknowledgement

The Board places on record its appreciation for the support and co-operation your Company has been receiving from its all stakeholders. The Company looks upon them as partners in its progress. It will always be the Company's endeavour to build and nurture strong relationship for mutual benefits.

For and on behalf of the Board of Directors

Place: Mumbai Karan Thapar

Date: May 11, 2012 Chairman


Mar 31, 2011

The Directors are pleased to present the Ninety-First Annual Report for nine month period ended March 31, 2011.

FINANCIAL HIGHLIGHTS

(Rs. in crores)

Nine month Year ended period ended June 30, March 31, 2010 2011

Net Sales, excl. Excise Duty 1250.47 1347.21 Other Income 14.08 6.85

Profit before Interest, 211.88 213.34 Depreciation, and Tax

Less: Interest and 7.22 12.91 Commitment charges

Less: Depreciation/ 20.98 27.03 Obsolescence/Amortization

Profit Before Tax 183.68 173.40

Less: Provision for Tax 54.54 56.20

Less/(Add): Deferred Tax 1.86 (0.77)

Profit After Tax 127.28 117.97

Profit brought forward 134.25 126.55

Profit available for 261.53 244.52 appropriation

Appropriations

Interim Dividends 19.54 21.98

Final Dividend 17.09 14.65

Special Dividend - 36.63

Dividend Distribution Tax 5.81 12.01

Transfer to General Reserve 25.00 25.00

Balance carried to Balance 194.09 134.25

Sheet 261.53 244.52

DIVIDEND

Your Directors have recommended a Final Dividend of Rs. 0.70/- per share of Rs. 2/- each for nine month period ended March 31, 2011. Considering the two interim dividends already declared and paid, the total dividend for the year works out to 75% i.e. equivalent to Rs. 1.50 on the share of Rs. 2/- each. The total cash outgo on account of dividends amounts to Rs. 42.44 crores (inclusive of Dividend Distribution Tax), which translates into 33.3% of Companys earnings. The

Final Dividend will be paid to those Members whose names appear in the Register of Members on July 27, 2011.

DIRECTORS

Mr. Vijay Rai and Mr. Vikram Tandon retire by rotation and are eligible for re-appointment.

The profiles of Mr. Rai and Mr. Tandon seeking re- appointments form part of the Notice convening the Annual General Meeting. The Board recommends re-appointment of these Directors.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. In the preparation of the Accounts, the applicable accounting standards have been followed.

2. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and profits for nine month period ended March 31, 2011.

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.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements, prepared by the Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India, together with the Auditors Report, form part of this Annual Report.

CODE OF CONDUCT

Pursuant to Clause 49 of the Listing Agreement, a Declaration signed by the Managing Director & CEO regarding compliance of Code of Conduct for nine month period ended March 31, 2011, is annexed and forms part of this Report.

CORPORATE GOVERNANCE

The Company has fully complied with the Corporate Governance Code, as prescribed under Clause 49 of the Listing Agreement. A Report on Corporate Governance, along with a Certificate from Auditors, confirming the compliance, is annexed and forms part of this Report.

AUDITORS

The Companys Auditors viz. Messrs. Walker, Chandiok & Co., Chartered Accountants, Mumbai and Branch Auditors viz. Messrs. Wrigley Partington, U.K., in respect of Companys Branch in Cheshire, London (UK), will retire at the ensuing Annual General Meeting and are eligible for re-appointment. Both these Auditors have sought their re-appointments.

The Directors recommend re-appointment of the Auditors.

COST AUDITORS

Pursuant to the provisions of Section 233-B of the Companies Act, 1956, audit of cost accounts in respect of Diesel Engines, IC Engines and Power Driven Pumps, is being regularly carried out by the Cost Auditors. The Directors have re-appointed Dhananjay V. Joshi & Associates, Cost Accountants, as Cost Auditors of the Company for the financial year 2011-12. The approval of the Central Government is awaited.

PUBLIC DEPOSITS

As on March 31, 2011, the unclaimed Deposits amount to Rs. 0.08 crore. Pursuant to the provisions of Section 205C of

the Companies Act, 1956, all unpaid Public Deposits and interest due thereon, have been transferred to the Investor Education and Protection Fund, on the respective due dates.

HUMAN RESOURCES

During the period under review, the Companys industrial relations by and large remained cordial. During this period, the Company signed a long term wage settlement Agreement with the workers union at Diesel Engines Unit, Chinchwad, Pune.

Your Company has infused a lot of rigor and intensity in its people development process and in honing skill-sets. HR processes are being aligned to facilitate achieving long term organizational goals. Ongoing learning and refreshing HR systems across the Company are few of the priority agenda for the Companys human resource function.

Particulars pursuant to the provisions of Section 217 of the Companies Act, 1956

Information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e) of the Companies Act, 1956 is set out in the Annexure to this Report.

Pursuant to the provisions of Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors report, as an addendum thereto. However, in tandem with the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts as set out therein, are being sent to all the Members of the Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of the Company.

ACKNOWLEDGEMENT

Your Directors recognize and appreciate the contributions made by the employees at all levels for their enthusiasm which have enabled the Company to achieve better financial results. The Board also acknowledges the unstinted support provided by the stakeholders of the Company.



For and on behalf of the Board of Directors

Karan Thapar Chairman

Place : Mumbai Date : April 29, 2011


Jun 30, 2010

The Directors have pleasure in presenting the Ninety-First Annual Accounts for the financial year ended June 30, 2010.

FINANCIAL HIGHLIGHTS

(Rs. in crores) Year ended Year ended June 30, June 30, 2010 2009

Gross Revenue

(excl. Excise Duty) 1354.06 1051.88 Profit before Interest, Depreciation, Tax and

Exceptional Items 213.34 125.76

Less: Interest and

Commitment charges 12.91 22.16

Less: Depreciation/

Obsolescence/Amortization 27.03 25.18 Profit Before Tax and

Exceptional Items 173.40 78.42

Add: Exceptional Items - 1.45

Profit Before Tax 173.40 79.87 Less: Provision for

Tax including Fringe Benefit Tax 56.20 8.46

Less/(Add): Deferred Tax (0.77) 15.41

Profit After Tax 117.97 56.00

Profit brought forward 126.55 118.03

Profit available for appropriation 244.52 174.03

Appropriations

Interim Dividends 21.98 14.65

Final Dividend 14.65 4.88

Special Dividend 36.63 -

Dividend Distribution Tax 12.01 2.95

Transfer to General Reserve 25.00 25.00 Balance carried to Balance Sheet 134.25 126.55

244.52 174.03

DIVIDEND

Your Directors are pleased to recommend a Final Dividend of Rs. 3.00 per share for the year ended June 30,2010. Considering that three interim dividends aggregating to Rs. 4.50 per share have already been declared by the Directors and paid, the total dividend for the year works out to Rs. 7.50 per share. 2009 commemorates 150 years of the Company. The Board of Directors has therefore recommended a Special Dividend of 75%, which will bring the total payout to 150%. This involves

a total cash outgo of Rs. 85.27 crores (inclusive of Dividend Distribution Tax). The Final Dividend and the Special Dividend will be paid on November 1, 2010.

PERFORMANCE OVERVIEW

The financial year of the Company commenced at the time when the Indian economy was affected by the world wide economic slow down. However, the situation gradually recovered, supported by stimulus packages announced by the Government of India to the various sectors of Industry. As such, the Company has concluded the financial year on a happy note. Its revenue registered an increase of 28.7% over the last year and Profit after Tax at Rs. 118 crores, an increase of 110.7%. Automotive Division and Agricultural Equipment Division performed very well, while the improvement in the business of Construction Equipment Division and Auxiliary Power Division was slower. The Industrial Engines Division which was created last year, has made its beginning with a modest business.

The business highlights are discussed in detail in the "Management Discussion & Analysis" annexed to this Report.

OUTLOOK

The automotive sector continues to report robust growth which assures good business prospects for the Companys Automotive Division, a significant contributor to the Companys bottom line. Construction Equipment Division and Auxiliary Power Division are expected to do much better in the current year in view of rising demand and various initiatives taken by the Company to improve overall performance of these Divisions. The Agricultural Equipment Division is expected to continue its growth path on the back of the changing rural scenario along with continued support from the Government to this sector. The Industrial Engines Division is expected to perform well as it continues to explore business opportunities by identifying new applications. The Directors, therefore, are hopeful of much better performance in the year under review, barring unforeseen circumstances.

SPLIT OF SHARES

With a view to provide better liquidity and retail participation in the Equity Share Capital of the Company, your Directors have proposed, subject to the approval of the Members of the Company, to split the existing Equity Shares of the Company, by sub-dividing them into 5 Equity Shares of the face value of Rs. 2/- each.

ODD LOT SCHEME

With a view to provide an opportunity to its shareholders, if they so desire, to dispose of their small holding i.e. less than 50 shares in physical form, the Directors had introduced Greaves Odd Lot Scheme in the month of December 2009. This Scheme facilitates Shareholders realizing the market value of the Shares without having to go through the process of dematerialization of Shares and cost to be incurred thereon. This Scheme will remain operative till December 2010.

PROMOTER GROUP

The Company is a part of the B M Thapar Group. The Promoter Groups shareholding currently is 51.4%. The Members may note that B M Thapar Group, inter alia, comprises of the following Companies (1) English Indian Clays Limited (2) Premium Transmission Limited (3) Pembril Industrial & Engineering Company Private Limited (4) DBH International Private Limited (5) Karun Carpets Private Limited (6) Greaves Leasing Finance Limited (7) Bharat Projects Private Limited (8) Dee Greaves Limited (9) KCT Chemicals & Electricals Limited (10) Standard Refinery & Distillery Limited (11) Bharat Starch Products Limited (12) Greaves Farymann Diesel GmbH (13) Greaves Cotton Netherlands B.V. (14) DBH Global Holdings Limited (15) Greaves Auto Limited (16) DBH Consulting Limited (17) DBH Investments Private Limited.

SUBSIDIARIES

The performance of the Companys Subsidiaries is as under:

1. Greaves Farymann Diesel GmbH, Lampertheim, Germany (GFD)

For the financial year ended June 30, 2010, GFD reported much improved performance with a total income of Euro 6.80 million and marginal Profit of Euro 0.07 million.

2. Greaves Cotton Netherlands B.V. (GCN)

GCN acts as a Holding and an investment Company in Netherlands. During the year, the Company invested a further sum of Euro 0.08 million in the Ordinary Shares of GCN to facilitate onward funding to GFD to meet their fund requirements.

3. Greaves Leasing Finance Limited (GLFL)

GLFL is engaged in leasing and finance activities confined only to Greaves Group. It reported total revenue of Rs. 3.39 crores during the financial year ended March 31, 2010 and Profit after Tax of Rs. 1.84 crores.

4. Dee Greaves Limited (DGL)

DGL is a wholly owned subsidiary of GLFL. During the financial year ended March 31, 2010, it did not do any business. As such, it reported a loss of Rs. 0.02 crore.

5. Greaves Auto Limited (GAL)

GAL is yet to commence any business activity. GAL incurred a loss of Rs. 0.01 crore due to administrative and other cost.

In terms of approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet and Profit & Loss Account, Reports of the Directors and Auditors of the Subsidiaries, have not been attached to the Annual Accounts of the Company. These documents, will however, be made available upon request by any Member of the Company. As directed by the Central Government in its approval, the financial data of the Subsidiaries have been annexed and form part of this Annual Report.

ACQUISITION OF ASCOT INTERNATIONAL FZE, SHARJAH

The Board at its Meeting held on August 12, 2010, has decided to acquire Ascot International FZE, Sharjah, together with its one or more of Indian / Overseas subsidiaries, for a consideration not exceeding USD 43,875. This Company is engaged in the distribution of Greaves DG sets. The acquisition process is expected to be completed in a couple of months after complying with necessary regulatory requirements.

DIRECTORS

Mr. S.N. Talwar and Mr. Karan Thapar retire by rotation and are eligible for re-appointment.

The profiles of Mr. Talwar and Mr. Thapar seeking re-appointments form part of the Notice convening the Annual General Meeting. The Board recommends re-appointments of these Directors.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. In the preparation of the Accounts, the applicable accounting standards have been followed.

2. The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at June 30, 2010 and profits for the year ended June 30, 2010.

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.

CODE OF CONDUCT

Pursuant to Clause 49 of the Listing Agreement, a Declaration signed by the Managing Director & CEO regarding compliance of Code of Conduct for the financial year 2009-10, is annexed and forms part of this Report.

CORPORATE GOVERNANCE

The Company has fully complied with the Corporate Governance Code, as prescribed under Clause 49 of the Listing Agreement. A Report on Corporate Governance, along with a Certificate from Auditors, confirming the compliance, is annexed and forms part of this Report.

AUDITORS

The retiring Auditors, Messrs. Sharp & Tannan have expressed their desire not to be re-appointed. A Special Notice has been received by the Company from a Member signifying his intention to appoint Messrs. Walker, Chandiok & Co., as the Auditors of the Company. Messrs. Walker, Chandiok & Co., have confirmed their eligibility for appointment.

Messrs. Wrigley Partington are the Auditors in respect of Companys U.K. and being eligible have sought re-appointment.

The Directors recommend the above appointment/ re-appointment.

COST AUDITORS

Pursuant to the provisions of Section 233B of the Companies Act, 1956, audit of cost accounts in respect of Diesel Engines, IC Engines and Power Driven Pumps, is being regularly carried out by the Cost Auditors. The Directors have reappointed M/s. Dhananjay V. Joshi & Co., Cost Accountants, as the Cost Auditors of the Company for the financial year 2010-11, in respect of which the approval of the Central Government has been duly received.

PUBLIC DEPOSITS

Pursuant to the provisions of Section 205C of the Companies Act, 1956, all unpaid Public Deposits and interest due thereon, have been transferred to the Investor Education and Protection Fund, on the respective due dates. As on June 30, 2010, the unclaimed Deposits amount to Rs. 0.09 crores.

HUMAN RESOURCES

During the year under review, the Companys industrial relations, by and large, remained cordial.

Information as required, pursuant to Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, is given in Annexure "A" forming part of this Report.

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

A statement pursuant to Section 217(l)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, forms part of this Report, as Annexure "B".

ACKNOWLEDGEMENT

Your Directors acknowledge the contribution made by all the stakeholders and the support given to the Company by its Bankers.

NOTES:

1 All appointments are non-contractual except in case of the Managing Director & CEO.

2 Gross Remuneration includes Salary, Allowances, Bonus, Commission, Ex-gratia, Performance Incentive, Leave Travel Concession, Companys Contribution to Provident Fund and Superannuation Fund, Leave Salary, Gratuity paid and taxable value of perquisites, wherever applicable.

3 None of the employees listed above, is a relative of any Director of the Company.



For and on behalf of the Board of Directors

Place : Mumbai Karan Thapar

Date : August 12, 2010 Chairman

 
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