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Directors Report of Hinduja Foundries Ltd.

Mar 31, 2016

The Directors present the Fifty-Fifth (55th) Annual Report together with the Audited Financials of your Company for the 18 months period ended March 31, 2016.

FINANCIAL RESULTS

(Rs. In Lakhs)

Eighteen Eighteen Months PARTICULARS Months Period Period ended ended March September 31 2016 30, 2014

Profit /(Loss) before (31,837.53) (19,019.26) Depreciation and Taxation

Less : Depreciation 7,587.65 7,224.56

Less: Provision for Taxation - -

Profit / (Loss) after Taxation (39,425.18) (26,243.82)

Add : Balance brought forward (64,963.05) (38,719.23) from previous year

Add : Adjustment on account of depreciation (279.36) -

Balance carried to Balance Sheet (1,04,667.59) (64,963.05)

Basic and Diluted Earnings Per Share of face value of Rs. 10/- (59.45) (65.07) each. (in Rs.)

BUSINESS OPERATIONS

During the period under review, your Company''s net sales were Rs. 84,232 Lakhs compared to the net sales of Rs. 99,679 Lakhs for the eighteen months period ended September 30, 2014. The operations resulted in a loss of Rs. 39,425 Lakhs for the period under review compared to a loss of Rs. 26,244 Lakhs in respect of the previous eighteen months period.

The Company continued to face numerous challenges due to negative growth of the OEM market for some period, uncertain power scenario and sharp decline in the price of end products. The Sriperumbudur Unit (SPU) ramp-up with debottlenecking of capacity constraints and stabilization of production processes was slowed down.

MATERIAL CHANGES AND COMMITMENTS

Your Directors confirm that there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

DIVIDEND

In view of loss for the period under review, no dividend has been recommended by the Board of Directors (Board).

TECHNOLOGY UPGRADATION/MODERNIZATION

The Company has invested substantially in energy efficient technologies and has implemented various processes which minimize waste. Commissioning of various equipment such as Maus Fettling Machine, Vent Drilling Machine and the improved material handling of cores has resulted in reduction of wastage, improved productivity and fewer breakages.

Capacity was added in the machine shop to handle more castings in finished form thereby increasing value addition and becoming a more preferred supplier of castings as the OEMs get ready to assemble components.

The particulars required under Rule 8 of the Companies (Accounts) Rules, 2014 on conservation of energy, technology absorption and foreign exchange earnings and outgo to the extent applicable are furnished in Annexure - A to this report.

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits from public within the meaning of Section 73 (1) of the Companies Act, 2013 during the period under review.

AUTHORISED CAPITAL

During the period under review, the Company had, with the approval of members, increased its authorized capital from Rs. 550,00,00,000 (Rupees Five Hundred Fifty Crores only) to Rs. 1000,00,00,000 (Rupees One Thousand Crores only).

FUND RAISING

(i) Global Depository Receipts (GDR)

Pursuant to the approval of the members of the Company vide a special resolution passed through postal ballot, the Company had successfully completed an Offering of 11,200 Global Depository Receipts (non - voting) each representing 12,000 Equity Shares of par value of Rs. 10 at an Offering Price of U.S. $ 5,351.33701 per Global Depository Receipt, aggregating 59,934,974.51 USD, equivalent to Rs. 3,998,400,000

Accordingly, your Company had issued and allotted 134.40 million equity shares of face value of Rs. 10 each at a price of Rs. 29.75 per equity share (including a premium of Rs. 19.75 per share) held by ICICI Bank Limited as the domestic custodian to the order of The Bank Of New York Mellon, Depository, such shares representing the underlying Equity Shares to 11,200 GDRs (non - voting) of an aggregate value of Rs. 3,998.40 million issued to overseas investors.

(ii) Term Loan

During the period under review, the Company has borrowed monies aggregating to Rs. 27,922 Lakhs.

(iii) Repayment

During the period under review, the Company has repaid Loans as follows :

Term loan - Rs. 27,498 Lakhs

Decrease in working capital loans - Rs. 14,222 Lakhs

CORPORATE GOVERNANCE

Your Company is fully compliant with the norms on corporate governance laid out in the notification dated September 2, 2015 of the Securities and Exchange Board of India enacting the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("New Listing Regulations") which have replaced the erstwhile Listing Agreement. All the Directors and the senior management personnel have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The details of the Code of Conduct are furnished in the Corporate Governance Report attached as Annexure-B to this Report. The Chief Executive Officer has given a certificate of compliance with the Code of Conduct which forms part of Annexure-B, as required under the New Listing Regulations.

The Statutory Auditors of the Company have examined the requirements of Corporate Governance with reference to the New Listing Regulations and have certified the compliance, as required under the New Listing Regulations. The Certificate in this regard is attached as Annexure-C to this Report. Management Discussion and Analysis Report is attached in Annexure - D.

The certification by the Chief Executive Officer / Chief Financial Officer (CEO/CFO) as required under the New Listing Regulations is attached as Annexure-B to this Report..

MEETINGS OF BOARD OF DIRECTORS

Annual calendar of meetings of the Board/ Committees is finalized well before the beginning of the year after seeking concurrence of all Directors. Attempts are made to ensure that the scheduled meetings are made convenient to attend by the Directors. Where circumstances preclude the Chairman from attending the meeting, he entrusts an Independent Director or a non-executive Director to chair the meeting. Wherever possible, Directors who are not able to attend the meetings physically, participate in the proceedings through video conferencing or other audio visual means. Further, in order to facilitate the smooth functioning of the Company and to address exigent matters, the Board approves resolutions by circulation between two Board meetings.

During the period under review, the Board of Directors met ten times viz. on November 20, 2014, January 27, 2015, February 9, 2015, March 11, 2015, May 13, 2015, August 13, 2015, November 3, 2015, January 13, 2016, January 25, 2016 and February 9, 2016. The time gap between any two Board meetings did not exceed four months.

DIRECTORS

Changes that had taken place in the composition of the Board of Directors of the Company during the period under review and subsequent thereto are given below:

Appointments:

(i) Mr. Markus Wermers was appointed as Chief Executive Officer with effect from February 1, 2015 and Managing Director with effect from August 13, 2015.

(ii) Mr. Vijay Vaid was appointed as an Additional Director on March 11, 2015 and based on the declaration of independence received from him as prescribed under Section 149 (7) of the Companies Act, 2013, he has been classified as an Independent Director subject to the approval of the members at the ensuing annual general meeting of the Company.

(iii) Mr. Sudhanshu K Tripathi and Mr. Sridharan Kesavan were appointed as Additional Directors on August 13, 2015 to hold office till the conclusion of the 55th Annual General Meeting.

(iv) Dr. C. Bhaktavatsala Rao and Ms. Bhumika Batra were appointed as Additional Directors on November 3, 2015 and based on the declarations of independence received from them as prescribed under Section 149 (7) of the Companies Act, 2013, they have been classified as Independent Directors subject to the approval of the members at the ensuing annual general meeting.

(v) Mr. A.R. Chandrasekharan was appointed as an Additional Director on May 11, 2016 to hold office till the conclusion of the 55th Annual General meeting. He was also appointed as an Executive Director.

The Independent Directors of the Company have declared that they meet the criteria of independence in terms of Section 149(6) of the Companies Act, 2013 and that there is no change in their status of independence as on date.

We seek your confirmation for appointment of Mr. Vijay Vaid, Dr. C Bhaktavatsala Rao and Ms. Bhumika Batra as Independent Directors for a term of three consecutive years on a non-rotational basis and Mr. Sudhanshu K Tripathi and Mr. Sridharan Kesavan as Directors of the Company, liable to retire by rotation. Your approval is also sought for the appointment of Mr.A.R.Chandrasekharan as Executive Director for a period of 3 years with effect from May 11, 2016.

Resignation :

(i) Mr. GRV Rajan resigned as a member of the Board and Managing Director of the Company with effect from March 11, 2015.

(ii) Mr. R Seshasayee resigned from the Board and Chairmanship of the Company on June 12, 2015.

(iii) Mr. S Ragothaman, an independent Director resigned from the Board on November 18, 2015.

(iv) Mr. Markus Wermers resigned as a member of the Board and Managing Director of the Company with effect from April 4, 2016.

The Board of Directors wish to place on record their sincere appreciation for the valuable contributions made by Mr.GRV Rajan, Mr.R. Seshasayee, Mr.S. Ragothaman and Mr. Markus Wermers during their tenure as Directors.

The casual vacancies caused by the resignations were not filled-up.

Director retiring by rotation:

In terms of Article 106 of the Articles of Association of the Company, Mr. Dheeraj G Hinduja is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment.

KEY MANAGERIAL PERSONNEL

Mr. D M Reddy was appointed as Chief Executive Officer and Key Managerial Personnel on April 4, 2016.

Mr. D M Reddy, Chief Executive Officer, Mr. K R Ravi Shankar, Chief Financial Officer and Mr. S Venkatasubramanian are the whole-time Key Managerial Personnel of the Company.

COST AUDIT0RS

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. The Board of Directors of the Company has, on recommendation of the Audit Committee, approved the appointment of M/s. Geeyes & Co. (Firm Registration Number 000044) as the Cost Auditor of the Company to conduct cost audits pertaining to product(s) Steel (Castings) in compliance with the Companies (Cost Records and Audit) Rules, 2014, for the 18 months period ended March 31, 2016. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking ratification of the members for the remuneration payable to M/s Geeyes & Co., Cost Auditors is included at Item No. 10 of the Notice convening the Annual General Meeting.

Cost Audit Reports for the financial year ended September 30, 2014 were filed in a timely manner. The Cost Audit Reports for the 18 months period ended March 31, 2016 will be filed with the Ministry of Corporate Affairs in a timely manner.

The Board of Directors, subject to the approval of the Central Government, has appointed M/s. Geeyes & Co. as Cost Auditors for conducting cost audit for the financial year 2016-17.

INTERNAL CONTROL:

The Company has an internal control system commensurate with the size, scale and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, applicable laws and regulations and that all assets and resources of the Company are safeguarded against loss from wastage, unauthorised use and removal. The Internal Auditors are an integral part of the internal control mechanism of the Company. To maintain its objective and independence, the Internal Auditors report to the Audit Committee of the Board of Directors.

The internal control system of the Company is supplemented by documented policies, guidelines and procedures. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control systems in the Company, its compliance with the operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of the Internal Auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

The Audit Committee oversees the adequacy of the internal control systems. The Company reviews its policies, guidelines and procedures of internal control on an ongoing basis in view of the ever changing business environment.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of Ms. B. Chitra, Company Secretary in Practice, Chennai to conduct the secretarial audit of the Company for the 18 months period ended March 31, 2016.

The Secretarial Audit Report (in Form MR-3) is attached as Annexure-E to this Report. The report is unqualified.

STATUTORY AUDITORS

M/s. B S R and Company, Chartered Accountants, retire at the close of this Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from M/s. B S R and Company that they are unwilling to be considered for re-appointment.

In their place, the Company has proposed the appointment of B S R & Co. LLP who are also a member firm of B S R and Affiliates network of firms, registered with ICAI and who have given consent and confirmed their eligibility under Section 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for appointment as the Auditors of the Company.

The Audit Committee and the Board of Directors have recommended B S R & Co. LLP, a Limited Liability Partnership Firm for appointment as Auditor of the company for a term of 5 years subject to ratification by the members at every Annual General Meeting.

The necessary resolution is being placed before the members for approval.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Companies Act, 2013, the details forming part of the extract of the Annual Return in Form MGT-9 are furnished in Annexure - F.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and on the basis of the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) in the preparation of the annual financial statements for the 18 months period ended March 31, 2016, the applicable Accounting Standards had been followed. There are no material departures.

b) for the 18 months period ended March 31, 2016, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit and Loss and Cash Flow of the Company for the 18 months period ended March 31, 2016.

c) that proper and sufficient care has been taken 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.

d) the annual financial statements have been prepared on a going concern basis.

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

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

REMUNERATION POLICY OF THE COMPANY

The Remuneration policy of the Company comprising the policy followed by the Company on the appointment and remuneration of its Directors, Key Managerial Personnel and Senior Executives including criteria for determining qualifications, positive attributes, independence of a Director and other related matters has been provided in the Corporate Governance Report which is attached as Annexure-B to this Report.

In terms of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Directors of the Company are entitled to a sitting fee of Rs. 20,000 for every meeting of Board/ Committee attended by them. In the absence of profits, no commission was paid to them. The median remuneration of employees for the same period was Rs. 4 Lakhs. The ratio of median remuneration of employee to the remuneration of Managing Director was 1:30.

The Company had 1647 permanent employees on the rolls of the Company as on March 31, 2016.

The Company has effected increment in general on the remuneration to all employees after a span of three years. The average increase per employee was Rs. 6,750 p.m.

During the period under review, the Company also made a revision of remuneration to the Chief Financial Officer [CFO] and Company Secretary [CS] to reflect the market/industry standards to the extent possible commensurate with the performance of the Company and individual. The above remuneration is as per Remuneration policy of the Company.

RISK MANAGEMENT POLICY

Risks are events, situations or circumstances which may negatively impact the Company''s business. Risk management is a structured approach to manage uncertainty. The Company is adopting a formal approach to risk management in such a way that key risks be managed within a unitary framework.

The Company has constituted a Risk Management Committee which met on August 13, 2015 and reviewed that the Company has an appropriate and effective Enterprise Risk Management system with appropriate policies and processes which carries out risk assessment.

The details of Risk Management as practiced by the Company are provided as part of Management Discussion and Analysis Report attached as Annexure - D to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Pursuant to Section 135 of the Companies Act, 2013, your Company is not required to constitute Corporate Social Responsibility Committee. However, as part of social initiative, the Company has undertaken a programme known as B.VOC degree(3 year work integrated programme conducted by Tata Institute of Social Sciences approved by AICTE/ GOI) in order to enhance the skill of the society to enable them to get employed.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the New Listing Regulations, Independent Directors at their meeting without the participation of the Non-independent Directors and Management, evaluated the Board''s performance, performance of the Chairman and other Non- independent Directors.

The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Director).

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and the New Listing Regulations, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same has been hosted on the website of the Company. This Policy inter alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report attached as Annexure-B to this Report.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Board of Directors have approved the "Sexual Harassment Policy" in terms of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The said policy is uploaded on the website of the Company.

During the year under review, there were no complaints received from any regular/contract employee or from any of the outsiders who visited our office for official purpose.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Your Company has successfully implemented a voluntary retirement scheme at the Company''s unit located at Ennore, Tamilnadu. All employees of the Company''s Ductron casting unit located at Hyderabad, Telangana had sought voluntary separation from the Company, which was agreed and implemented. Consequently the unit had to be closed down. Your Company has successfully concluded Long Term Settlement (LTS) with workers at Sriperumbudur (SPU) and Ennore units.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure forming part of the Annual Report.

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished in Annexure-G.

FORWARD LOOKING STATEMENTS

This Report together with the annexures contains forward looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe", "estimate", "expect", "intend", "will", and other similar expressions as they relate to the Company and/or its business are intended to identify such forward looking statements. Neither the Company nor the Directors undertake any obligation to publicly update or revise any forward looking statements, whether as a result of any new information, future events, or otherwise.

We cannot, of course, guarantee that these forward looking statements will be realized, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected.

ACKNOWLEDGEMENT

The Directors wish to acknowledge and place on record their appreciation of the valuable advice and support received from Hinduja Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited. The Directors wish to express their gratitude to the Government of India, Government of Tamil Nadu, Government of Telangana and other Government agencies. They also thank the Company''s Bankers, members, Customers and Suppliers and all the employees for their continued support.

By Order of the Board

Chennai Dheeraj G Hinduja

May 11, 2016 Chairman


Sep 30, 2014

THE MEMBERS:

The Directors present the Fifty Fourth Annual Report together with the audited accounts of your Company for the 18 months period ended September 30, 2014.

FINANCIAL RESULTS (Rs. In Lakhs)

2013-14 2012-13 PARTICULARS (18 Months) (6 Months)

Profit/(Loss) before Depreciation and Taxation 19019.26 7874.84

Less: Depreciation 7224.56 2033.07

Less: Provision for Taxation _ 470.45

Profit / (Loss) after Taxation (26243.82) (10378.36)

Add : Balance brought forward from previous year 38719.23 28340.87

Balance carried to Balance Sheet (64963.05) (38719.23)

Basic and Diluted Earnings Per Share of face (65.07) (39.13) value of Rs. 10/- each, (in Rs.)

DIVIDEND

In view of loss for the period under review, no dividend has been recommended by the Board of Directors.

BUSINESS OPERATIONS

The Company''s Net Sales for the 18 months period ended September 30, 2014 was Rs.96,679 Lakhs and the loss incurred during the same period was Rs. 26,244 Lakhs. The corresponding Net Sales and Loss figures of the previous year comprising six months period October 1, 2012 to March 31, 2013 was Rs. 30,422 Lakhs and Rs. 9,908 Lakhs respectively.

The slow down of the economy coupled with negative growth of Auto sector has severely impacted your company

TheCompany continued to face numerouschallenges due to negative growth of the OEM market, uncertain power scenario, and sharp unremunerative price of end products. The Sriperumbudur Unit (SPU) Ramp- up with debottlenecking of capacity constraints and stabilization of production processes was slowed down.

TECHNOLOGY UPGRADATION/MODERNIZATION

The Company has invested substantially in energy efficient technologies and has implemented various processes which minimize waste. Commissioning of various equipment such as Maus Fettling Machine, Vent Drilling Machine and the improved material handling of cores has resulted in reduction of wastage, improved productivity and fewer breakages.

Capacity was added in the machine shop to handle more castings in finished form thereby increasing value addition and becoming a more preferred supplier of castings as the OEMs get ready to assemble components.

The particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 to the extent applicable are furnished in Annexure - A to this report.

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits from public within the meaning of Section 73 (1) of the Companies Act, 2013 during the period under review.

EXTENSION OF FINANCIAL YEAR 2013-14

The Financial Year 2013-14 was extended by six months upto September 30, 2014 with the permission of Registrar of Companies, Chennai

BORROWINGS

During the period, your Company has made an additional borrowings of Rs. 23,025 Lakhs and repaid Rs. 12,818 Lakhs of loans, on due dates.

CORPORATE GOVERNANCE

Your Company is fully compliant with the Corporate Governance requirements laid down in Clause 49 of the Listing Agreement. All the Directors (and also the members of the Senior Management of the rank General Managers and above) have confirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company.

Many of the Corporate Governance Voluntary Guidelines 2009, issued by the Ministry of Corporate Affairs are being followed by the Company. A detailed Report on Corporate Governance together with Certification of the Managing Director and the Chief Financial Officer is furnished in Annexure - B. The certification of the Managing Director, on the adherence to the Code of Conduct, specified in said clause is provided separately.

The Statutory Auditors of the Company have examined the contents of the Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance as required under the SEBI guidelines. The Certificate of the Statutory Auditors on Company''s compliance with the Corporate Governance requirements is attached in Annexure - C. The Management Discussion and Analysis Report is attached in Annexure - D.

As required under Section 217(2AA) of the Companies Act, 1956 and Section 134(5) of the Companies Act, 2013 the Directors'' Responsibility Statement is furnished in Annexure - E to this Report.

Related party disclosures/transactions are detailed in Notes forming part of the Accounts.

ISSUE OF SHARES

Pursuant to the approval of the shareholders at an Extraordinary General Meeting held on January 17, 2014, your Company has raised capital by the issue and allotment of:

1) 1,78,18,448 Equity Shares of the Company by way of Preferential Allotment to Hinduja Foundries Holding Limited, Mauritius, forming part of the "promoter" and "promoter group" of the Company at a price per equity share of Rs.34.15 aggregating Rs.60,84,99,999.

2) 2,61,05,417 Equity Shares of the Company of Rs.10/- each at a price of Rs.31.00 by way of Qualified Institutional Placement ("QIP") aggregating Rs.80,92,67,927.

MEETINGS OF BOARD OF DIRECTORS

Annual calendar of meetings of the Board/ Committees is usually finalized well before the beginning of the year after seeking concurrence of all Directors. The meetings are scheduled only if most of the directors agree for the same, in case any of the directors have a subsequent change of plan

and are not available for the meeting, effort is made to re-schedule the meeting provided the other Directors are available and willing to re-schedule. Where circumstances preclude the Chairman from attending the meeting, he entrusts an independent Director or a non-executive Director to chair the meeting. Wherever possible, Directors who are not able to attend the meetings, join the proceedings through video / audio conference. Further, in order to facilitate the smooth functioning of the company and out of necessity the board approves resolutions by circulation between two board meetings.

During the period ended September 30, 2014, the Board of Directors met seven times viz. on May 11, 2013, July 17, 2013, November 7, 2013, January 22, 2014, May 6, 2014, May 21, 2014 & July 26, 2014.

The time gap between any two Board Meetings did not exceed four months

DIRECTORS

In terms of Article 106 of the Articles of Association of the Company, Mr. R Seshasayee is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment.

During the period, Mr. F Sahami stepped down from the Board and the casual vacancy caused by his resignation was not filled up. Mr. T Anantha Narayanan was appointed as an Additional Director w.e.f. March 28, 2014, who holds office till the conclusion of the ensuing Annual General Meeting. The Company has received a notice proposing the name of Mr. T Anantha Narayanan for the Directorship. Mrs. Mohana Srinivasan was appointed as an Additional Director w.e.f. September 17, 2014 who holds office till the conclusion of the ensuing Annual General Meeting. Based on the declaration, she is being appointed as an independent director for a term of three consecutive years on a non rotational basis.

Pursuant to provisions of Section 149 and other applicable provisions / rules of Companies Act, 2013 and based on their eligibility, Mr. D J Balaji Rao, Mr. S Ragothaman and Mr. Sridhar Venkiteswaran, Directors are being recommended for appointment as an Independent Director for a term upto three consecutive years i.e. upto December 21, 2017, on a non-rotational basis.

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

Mr. Jean Brunol has resigned from the directorship of the company w.e.f November 10, 2014. The casual vacancy caused by his resignation was not filled-up.

Details of the proposals including profiles of the Directors for appointments / re-appointment as applicable are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 in the Notice to the 54th Annual General Meeting. Necessary resolutions are being placed before the shareholders for approval.

KEY MANAGERIAL PERSONNEL

Managing Director, Chief Financial Officer and Company Secretary are recognized as Key Managerial personnel with effect from April 1, 2014.

Mr. K R Ravi Shankar, Chief Financial Officer has been designated as whole time Key Managerial Personnel with effect from April 1, 2014 as per Section 203 of the Companies Act, 2013.

COST AUDITORS

Pursuant to the Industry vide Order No. 52/26/ CAB/2010 dated 30.06.2011 issued by Ministry of Corporate Affairs, Cost Audit Branch, the Company, after obtaining due approval from the Central Government, has appointed M/s. GEEYES & CO; (Firm Registration Number 00044) as Cost Auditors for the audit of Cost Accounts (relevant to "Steel" Industry covering Chapter Heading 72 and 73 of Central Excise Tariff Act, 1985) in compliance with The Companies (Cost Audit Report) Rules 2011 and The Companies (Cost Accounting Record Rules) 2011 for the period ended September 30, 2014 (18 months). The Cost Audit Reports for the 18 months period ended September 30, 2014 will be filed with the MCA before due date.

The Board of Directors, subject to the approval of the Central Government, appointed M/s. GEEYES & CO as Cost Auditors for conducting Cost Audit for the financial year 2014-15. Cost Audit Reports for the financial year ended March 31, 2013 (from October 1, 2012 to March 31, 2013) were filed on due date.

SECRETARIAL AUDIT

As directed by Securities and Exchange Board of India (SEBi), a qualified Practicing Company Secretary carries out a Share Capital Audit on a quarterly basis to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued / paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL. The findings of the secretarial audit were entirely satisfactory. Further to the above, the Company has complied with all the provisions of listing agreement in the current year under review.

STATUTORY AUDITORS

M/s. BSR and Company Chartered Accountants, retire at the close of this Annual General Meeting and are eligible for re-appointment. The Company has received confirmation from them that their appointment will be within the limits prescribed under Section 141(3) (g) of the Companies Act, 2013. The Audit Committee of the Board has recommended their re-appointment for the year 2014-15. The necessary resolution is being placed before the shareholders for approval.

VOLUNTARY RETIREMENT SCHEME

The Company has implemented a Voluntary Retirement Scheme to the employees of company''s Ductron Castings Unit located at Uppal, Hyderabad with an outgo of Rs. 1,129.53 Lakhs.

PERSONNEL

The Company continues to enjoy cordial relationship with its employees at all levels. The details of employee(s) as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules,1975 as amended are furnished in Annexure - F.

FORWARD LOOKING STATEMENTS

This Report together with the annexures contains forward looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe", "estimate","expect"/''intend", "will", and other similar expressions as they relate to the Company and/or its business are intended to identify such forward looking statements. Neither the Company nor the Directors undertake any obligation to publicly update or revise any forward looking statements, whether as a result of any new information, future events, or otherwise.

We cannot, of course, guarantee that these forward looking statements will be realized, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainities

materialize, or should underlyingassumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected.

ACKNOWLEDGEMENT

The Directors wish to acknowledge and place on record their appreciation of the valuable advice and support received from Hinduja Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited. The Directors wish to express their gratitude to the Government of India, Government of Tamil Nadu, Government of Telangana and other Government agencies. They also thank the Company''s Bankers, Shareholders, Customers and Suppliers and all the employees for their continued support.

By Order of the Board

Chennai R.Seshasayee November 20, 2014 Chairman


Mar 31, 2013

To THE MEMBERS:

The Directors present the Fifty Third Annual Report together with the audited accounts of your Company for the year ended (6 months) March 31, 2013.

FINANCIAL RESULTS

(Rs. In Lakhs)

2012-13 2011-12

PARTICULARS (6 Months) (18 Months)

Profit/(Loss) before Depreciation and Taxation

Less: Depreciation 2033.07 5166.02

Less: Provision for Taxation 470.45 (1004.19)

Profit/(Loss) after Taxation (10378.36) (29133.95)

Add : Balance brought forward (28340.87) 793.08 from previous year

Balance carried to Balance Sheet (38719.23) (28340.87)

Basic and Diluted Earnings Per Share of face value of Rs. 10/- (39.13) (102.21) each, (in Rs.)



DIVIDEND

In view of loss for the period under review, your Directors regret their inability to recommend any dividend for the year.

BUSINESS OPERATIONS

The Company''s Sales Revenue for the six months period 1st October 2012 to 31st March, 2013 was Rs. 30422 Lakhs and the loss incurred during the same period was Rs. 9,908 Lakhs. The corresponding Sales Revenue and Loss figures of the previous year comprising of 18 months period from 1st April 2011 to 30th September 2012 was Rs. 102936 Lakhs and Rs. 30138 Lakhs respectively.

Total Net Sales of Ferrous and Non Ferrous Castings at 37359 MT were proportionately lower in the current accounting period as compared to 130750 MT in the previous accounting period. Gross production of Ferrous and Non Ferrous Castings at 42100 MT was proportionately lower in the current accounting period as compared to 157408 MT in the previous accounting period.

In the period under review, the Company consolidated its position as a principal supplier of castings to various Original Equipment Manufacturers (OEMs) namely Tata Cummins, Renault, New Holland, John Deere etc., meeting their exacting standards of quality and delivery schedules. Necessary infrastructure and tooling have been put in place and technical knowhow has been developed to become supplier of choice to all major OEMs in the Commercial Vehicle, Passenger Vehicle, Tractors and Construction Equipment segments. The company is well poised to take advantage of opportunities that will arise on revival of the market.

The Company continued to face numerous challenges due to negative growth of the OEM market, uncertain power scenario, and sharp increase in raw material and power prices which were not adequately compensated by the customers. Sriperumbudur Unit (SPU) Ramp-up is proceeding at a rapid pace with debottlenecking of capacity constraints and stabilization of production processes.

TECHNOLOGY UPGRADATION/MODERNIZATION

The Company has invested substantially in energy efficient technologies and has implemented various processes which minimize waste. Commissioning of various equipment such as Maus Fettling Machine, Vent Drilling Machine and the improved material handling of cores has resulted in reduction of wastage, improved productivity and fewer breakages.

Capacity was added in the machine shop to handle more castings in finished form thereby increasing value addition and becoming a more preferred supplier of castings as the OEMs get ready to assemble components.

The particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 to the extent applicable are furnished in Annexure A to this report.

PUBLIC DEPOSITS

The Company has not accepted any fixed deposits from public within the meaning of Section 58 A of the Companies Act, 1956 during the year under review. However, the amount of matured and unclaimed deposits & unclaimed interest on fixed deposits as of March 31, 2013 was Rs. 0.02 lakhs & Rs.0.52 lakhs respectively.

ALIGNMENT OF FINANCIAL YEAR 2012 - 13

The previous financial year 2011-12 comprised of 18 months period ended September 30, 2012. With a view to adopt uniform accounting year i.e. from April to March, the Board of Directors at their meeting held on February 27, 2013, has aligned the current financial year 2012-13 to end on March 31, 2013 (6 months) and accordingly, the Accounts for the Financial Year 2012 - 13 has been prepared for a period of six months from October 1, 2012 to March 31, 2013.

The accounting period for the next financial year (i.e. 2013-14) would be for a period of 12 months commencing from April 01, 2013 to March 31, 2014.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity in spirit and not just the letter of law. The Company is fully compliant with the Corporate Governance stipulations as laid down in Clause 49 of the Listing Agreement. All the Directors (and also the members of the Senior Management of the rank General Managers and above) have confirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company.

Many of the Corporate Governance Voluntary Guidelines 2009, issued by the Ministry of Corporate Affairs are being followed by the Company. A detailed Report on Corporate Governance together with Certification of the Managing Director and the Chief Financial Officer is furnished in Annexure - B. The certification of the Managing Director, on the adherence to the Code of Conduct, specified in said clause is provided separately.

The Statutory Auditors of the Company have examined the contents of the Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance as required under the SEBI guidelines. The Certificate of the Statutory Auditors on Company''s compliance with the

Corporate Governance requirements is attached in Annexure - C. The Management Discussion and Analysis Report is attached in Annexure - D.

As required under Section 217(2AA) of the Companies Act, 1956, the Directors'' Responsibility Statement is furnished in Annexure - E to this Report.

Related party disclosures / transactions are detailed in Notes forming part of the Accounts.

CHANGES IN CAPITAL STRUCTURE

During the year under review, the Company allotted 2,25,00,000, 9% Redeemable, Non-Convertible, Cumulative Preference Shares of Rs.100/- each of an aggregate nominal amount of Rs. 225 Crores to Ashok Leyland Limited. With the above allotment, the total Preference Share Capital of the Company increased to Rs. 321.67 Crores as at March 31, 2013 (Previous Year Rs. 96.67 Crores). There was no change in paid-up equity share capital of the Company.

REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION

During the year under review, the Company obtained the approval of the shareholders through Postal Ballot process pursuant to section 192 A of the Companies Act, 1956 read with the Companies (Passing of Resolutions by Postal Ballot) Rules, 2011 in compliance with Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985 which obligates a company to report the fact of potential sickness to BIFR within 60 days of adoption of audited financial results and a resolution from the shareholders of the company, when the accumulated losses of a company as at the end of any financial year have resulted in erosion of fifty per cent or more of its peak net worth during the immediately preceding four financial years.

While Hinduja Foundries is not a sick company, the above reference to BIFR was made only as a matter of statutory compliance and has no other implications. The operational recovery of the Company and the commitment of the promoters to support the Company in line with the committed plans, remain intact.

DIRECTORS

In terms of Article 106 of the Articles of Association of the Company, Mr. R Seshasayee, Mr. D.G. Hinduja and Mr. Sridhar Venkiteswaran, Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re- appointment. The brief resume of these Directors and other information have been detailed in the notice convening the AGM of the Company. Necessary resolutions are being placed before the shareholders for approval. The Board recommends their re-appointment.

Mr. B.Swaminathan, whose contract of employment expired on April 30, 2013 was re-appointed by the Board as the Managing Director for a further period of one year w.e.f. May 01, 2013. Subsequently, Mr. B.Swaminathan resigned from his position of Managing Director w.e.f. the close of business hours of July 17, 2013. Mr. Jorma Antero Halonen resigned as an Independent Director effective from July 07, 2013. The Board places on record their warm appreciation and gratitude for the valuable contribution made by Mr.B.Swaminathan and Mr.Jorma Antero Halonen during their association with the Company.

In terms of Article 101 of the Articles of Association and Section 260 of the Companies Act, 1956, Mr. G.R.V. Rajan was appointed as an Additional Director in the first stance and as Managing Director (Designate) and CEO effective June 24, 2013. Based on the recommendations of the Remuneration Committee and approved by the Board, he was appointed as Managing Director and CEO effective July 17, 2013. The necessary resolution proposing his appointment and the remuneration payable to him is placed before the shareholders for approval. The Board recommends his appointment.

COST AUDITORS

Pursuant to the Industry vide Order No. 52/26/ CAB/2010 dated 30.06.2011 issued by Ministry of Corporate Affairs, Cost Audit Branch, the Company, after obtaining due approval from the Central Government, has appointed M/s. GEEYES & CO;

(Firm Registration Number 00044) as Cost Auditors for the audit of Cost Accounts (relevant to "Steel" Industry covering Chapter Heading 72 and 73 of Central Excise Tariff Act, 1985) in compliance with The Companies (Cost Audit Report) Rules 2011 and The Companies (Cost Accounting Record Rules) 2011 for the financial year ended September 30, 2012 (18 months). The Cost Audit Reports for the financial year ended September 30, 2012 were duly filed with the MCA on June 10, 2013 (due date March 31, 2013).

The Board of Directors, subject to the approval of the Central Government, appointed M/s. GEEYES & CO as Cost Auditors for conducting Cost Audit for the financial year 2012-13 (6 months). The Audit Committee of the Directors recommended their appointment subject to the compliance of all the requirements as stipulated in Circular No. 15/2011 dated 11.04.2011 issued by the MCA. The Central Government has also accorded its approval for the appointment.

SECRETARIAL AUDIT

As directed by Securities and Exchange Board of India (SEBI), a qualified Practicing Company Secretary carries out a Share Capital Audit on a quarterly basis to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued / paid up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL. The findings of the secretarial audit were entirely satisfactory. Further to the above, the Company has complied with all the provisions of listing agreement in the current year under review.

STATUTORY AUDITORS

M/s. B S R and Company, Chartered Accountants, Chennai, retire at the close of the ensuing Annual General Meeting and are eligible for re- appointment. They have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 224(IB) of the Companies Act, 1956. The Company''s Statutory Auditors have also furnished us with a certificate from the Peer Review Board of the ICAI that they have undergone the process of peer review.

The Audit Committee of the Board has recommended their re-appointment for the FY 2013-14. The necessary resolution is placed before the shareholders for approval. The Board recommends their re-appointment.

PERSONNEL

The Company continues to enjoy cordial relationship with its employees at all levels. The details of employee(s) as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules,1975 as amended are furnished in Annexure - F.

FORWARD LOOKING STATEMENTS

This Report together with the annexures contains forward looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe", "estimate","expect","intend", "will", and other similar expressions as they relate to the Company and/or its business are intended to ''identify such forward looking statements. Neither the Company nor the Directors undertake any obligation to publicly update or revise any forward- looking statements, whether as a result of any new information,future events, or otherwise.

We cannot, of course, guarantee that these forward looking statements will be realized, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainities and even inaccurate assumptions. Should known or unknown risks or uncertainities materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected.

ACKNOWLEDGEMENT

The Directors wish to acknowledge and place on record their appreciation of the valuable advice and support received from Hinduja Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.

The Directors wish to express their gratitude to the Government of India, Government of Tamil Nadu, Government of Andhra Pradesh and other Government agencies. They also thank the Company''s Bankers, Shareholders, Customers and Suppliers and all the employees for their continued support.



By Order of the Board



Chennai R.Seshasayee

July 17, 2013 Chairman


Mar 31, 2010

The Directors present the Fiftieth Annual Report together with the Audited Accounts of your Company for the year ended March 31, 2010.

Financial Results (Rs. in lakhs)

2009-10 2008-09

Profit before tax/ (Loss) 64.61 (1859.06)

Less: Provision for Taxation 30.00 (661.00)

Profit/(Loss) after Tax 34.61 (1198.06)

Less : Transfer to General Reserve - -

34.61 (1198.06)

Balance brought forward from last year 10.82 1542.21 Less : Transfer to Capital Redemption - (333.33) Reserve

Balance available for appropriation 45.43 10.82

Appropriation:

Dividend on preference shares - -

Tax thereon - -

Proposed dividend on equity shares - -

Tax thereon - -

Balance carried to balance sheet 45.43 10.82

Earnings per share (0.63) (7.30)

Dividend

In view of the carried forward losses and marginal profit, your Directors regret their inability to recommend any dividend for the year.

Business Operations:

Your Company earned as a sales revenue for the year at Rs.39154.46 lakhs compared to Rs.36312.53 lakhs in the previous year and earned a profit of Rs.64.61 lakhs before tax against the loss before tax of Rs.1859.06 lakhs in the previous year.

Total sales volume of ferrous and non-ferrous castings was higher at 57,701 tonnes compared to 49,130 tonnes in the previous year. Gross Production of ferrous and non-ferrous castings during the year increased to 66,985 tonnes from 58,166 tonnes in 2008-09.

From the second half of 2009-10, demand from the commercial vehicles segment has been growing and there is a general expectation that this trend would continue in the year 2010-11.

Development of new products for new and existing customers is progressing as per schedule. Your Company has received orders from leading international customers for which deliveries would commence in the second half of 2010- 11.

In line with the latest developments, project implementations have been suitably planned and commencement of commercial production has been suitably re-scheduled based on customer requirements.

Technology Upgradation/Modernization

Your Companys drive for technology updation to gain advantageous position, continues. New Foundry has started producing thin water jacket cores from cold box process for the first time. Modernisation of all units is being taken up for ensuring consistency in quality and for cost optimization.

The Design Centre and Pattern Shop have been added with new machines to improve quality of tools made.

The particulars required under Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 to the extent applicable are furnished in Annexure - A to this report.

Corporate Governance

Your Company has complied with the requirements of the Code of Corporate Governance as stipulated under Clause 49 of the listing agreements with the stock exchanges. A detailed Report on Corporate Governance together with Certification of the Managing Director and Chief Financial Officer is furnished in Annexure - B. The certification of the Managing Director on the adherence to the Code of Conduct specified in said clause is provided separately.

The certificate of the Statutory Auditors on the Companys Compliance with the Corporate Governance requirements is attached in Annexure-C.

The Management Discussion and Analysis Report is attached in Annexure D.

As required under Section 217(2AA) of the Companies Act, 1956,theDirectors Responsibility Statement is furnished in Annexure-E to this report.

Fixed Deposits

The amount of matured and unclaimed deposits as on March 31, 2010 was Rs.0.25 lakhs.

Directors

Mr. Jean Brunol has been appointed as Additional Director of the Company and will hold office till the ensuing Annual General Meeting (AGM).

Mr. R J Shahaney, Mr. S Ragothaman and Mr F Sahami retire at the ensuing AGM.

Auditors

M/s Fraser and Ross, Chartered Accountants and M/s S R Batliboi & Associates, Chartered Accountants, retire at the close of the ensuing AGM and are eligible for reappointment.

Personnel

The Company continued to enjoy cordial relationship with its employees. The details of employees as prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975 are furnished in Annexure - F.

Forward Looking Statements

This Report together with the annexures contains forward looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe", "estimate",

"expect", "intend", "will", and other similar expressions as they relate to the Company and/or its business are intended to identify such forward looking statements. Neither the Company nor the Directors undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements due to risks, uncertainties or even inaccurate assumptions. No undue reliance should be placed on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Acknowledgement

The Directors wish to acknowledge and place on record their appreciation of the valuable advice and support received from Hinduja Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.

The Directors wish to express their gratitude to the Government of India, the Government of Tamil Nadu, the Government of Andhra Pradesh and other government agencies. They also thank the Companys Bankers, Shareholders, Customers, Suppliers and all the employees for their continued support.

On behalf of the Board of Directors

Chennai RJ Shahaney

April 30, 2010 Chairman

 
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