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Directors Report of Lumax Auto Technologies Ltd.

Mar 31, 2015

Dear Members,

It is a great privilege for your Directors to present the 34th Annual Report on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2015.

FINANCIAL RESULTS

Your Company''s performance during the year as compared with the previous year is summarized below: (rs. in Million )

PARTICULARS 2014-15 2013-14

Net Sales 5240.44 4766.10

EBDITA 602.03 339.16

Finance Expenses 50.64 32.67

Depreciation 103.82 81.49

Profit Before Taxation (PBT) 447.57 225.00

Provision for Taxation, 127.10 74.81 Deferred Tax

Profit After Tax (PAT) 320.47 150.19

Balance of Profit brought 344.68 305.20 forward

Balances Available for 661.90 455.39 Appropriation

Appropriation :

Proposed Equity Dividend 95.42 81.79

Corporate Dividend Tax 19.42 13.90

Transfer to General Reserve 31.52 15.02

Balance carried forward to 515.54 344.68 Balance Sheet

Dividend (%) 70 60

Basic and Diluted earning 23.51 11.02 per Share (EPS) Rs.

DIVIDEND

In line with our focus on enhancing shareholder returns, the Board of Directors are pleased to recommend a Dividend of 70% (Rs. 7/ - per equity share) for the Financial Year 2014-15 (Rs. 6/- previous year). The total amount of Dividend proposed to be distributed and tax thereon aggregates to Rs. 114.84 Million. The Dividend payout ratio comes to 35.83 %.

A sum of Rs. 31.52 Million has been transferred to General Reserve of the Company. This reaffirms the inherent financial strength of your company.

BUSINESS PERFORMANCE

India in last decade has grown into a large automotive market particularly for Japanese OEMs while the European and American''s have also entered for the long haul. India however due to the recent economic slowdown witnessed weak auto sales which impacted consumer as well as OEM sentiment. The India auto story is expected to be driven by four factors pent up demand, reducing food and fuel inflation, income growth due to improved business climate and lower penetration into households. The Indian automotive market is expected to witness ~15% CAGR FY14-17E on the back of the demand improvement. From auto component maker''s perspective besides, the aforementioned reasons would also lead to higher content per car and consumers up-trading to higher quality & safety and increased features.1

Auto sector to benefit greatly from "Make in India"! The Government has laid out a vision statement towards ushering India as a global manufacturing hub via the "Make in India" campaign. At present auto sector''s contribution to GDP remains at ~7%, leads the manufacturing sector, and the sector would greatly benefit from this specialized focus.1

In this backdrop, your company registered a growth of 9.95% during the year under review, by achieving Sales Turnover of Rs. 5,240.44 Million (on Standalone Basis) as against Rs. 4,766.10 Million (On Standalone Basis) in the corresponding previous year.

The Profit before Tax stood at Rs. 447.57 Million (On Standalone Basis) as compared to Rs. 225.00 Million (On Standalone Basis) during the previous year.

On Consolidated Basis, your Company registered a growth of 9.75% during the year under review by achieving a Sales Turnover of Rs. 8371.67 Million as against Rs. 7,627.57 Million during the previous year.

On Consolidated Basis, your Company recorded a Profit before Tax of Rs. 677.78 Million during the year under review as compared to Rs. 429.09 Million during the previous year.

QUALITY INTIATIVES

During the year Company is implementing Total Productive Maintenance (TPM) across all plants to create a culture and environment to continuously improve quality, cost and delivery parameters to meet and exceed customer''s expectations. TPM practice has become a necessity these days for improving the integrity of production and quality systems through the machines, equipment, processes and employees, which ultimately adds business value to the organization.

NEW PLANTS AND FACILITIES

During the year, a new Robotic plant of the Company was set up at Gut No. 53, Waluj, Aurangabad for manufacturing Chassis and fabrication parts etc. The plant has commenced manufacturing operations and supplies of Chassis to Bajaj Auto Limited in January, 2015.

A detailed discussion on business performance and future outlook is provided in the Chapter on Management Discussion & Analysis Report (MDA).

SUBSIDIARY COMPANY

100% SUBSIDIARY - LUMAX DK AUTO INDUSTRIES LIMITED (LDK)

During the year under review, LDK has achieved net sales of Rs 2,448.25 Million as against Rs. 2,490.90 Million in the previous year. The profit after tax declined to Rs. 119.83 Million from Rs. 128.18 Million.

During the year, the Pantnagar facility has received the BAVA Kaizen Award for reduction in Customer Rejection, Optimum Resource and T2 Vendor Development, Quality Gold Award from Bajaj Auto Limited and Quality Circle Award from CII.

LUMAX MANNOH ALLIED TECHNOLOGIES LIMITED (LMAT)

During the year under review, LMAT has reported an impressive growth of 142% by recording net sales of Rs 618.17 Million as against Rs. 255.38 Million in the previous year. The profit after tax has also increased by 146% to Rs. 41.86 Million from Rs. 17.02 Million during the previous year.

During the year, the Company has transferred 1,566,233 no. of equity shares (equivalent to 45% equity holding) of LMAT to Mannoh Industrial Co., Ltd., Japan pursuant to Joint Venture and Share Purchase and Shareholders Agreement entered with the Company, Mannoh Industrial Co., Ltd., Japan, LDK and LMAT.

During the year, LMAT has received award for Technology Innovation from VE Commercial Vehicles Limited.

JOINT VENTURE COMPANIES

LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)

During the year under review, LCAT has reported growth of 29.62% by recording net sales of Rs. 328.41 Million as against Rs. 253.36 Million in the previous year. The profit after tax has also increased by 53.56% to Rs. 20.70 Million from Rs. 13.49 Million during the previous year.

Presently, LCAT is supplying Air Intake System (AIS) to leading automobile manufactures in India viz. Tata, Fiat, Volkswagen, Skoda & General Motors and during the year it has received orders for development of AIS for 2 new model platforms of Tata to be launched in the next 2 years. In addition, 2 new model launches for Tata are expected to be launched in Q2 & Q3 of FY 2015-16. New Enquiries have also been received from VW & FIAT and efforts are also being put in the right direction for developing new customers like Ford & Renault Nissan.

The manufacturing facility at Chakan Industrial Area, Pune has started pilot supplies of Exhaust System to Tata Motors for its Nano AMT model. LCAT is also a nominated source for the Pelican model of Tata and commercial production for the same will start from March/ April, 2016.

LCAT has now evolved as a full service provider for Automotive Air Intake & Exhaust Systems. Further to complement its Vision, LCAT has initiated development of local engineering capability with the support of the Technology partner.

LUMAX GILL-AUSTEM AUTO TECHNOLOGIES PRIVATE LIMITED (LGAT)

During the year under review, LGAT submitted samples to its customer, Lear India, for testing and approval. The overall testing process is expected to be completed by Q2 of the financial year 2015-16 and LGAT will start commercial production accordingly by Q3/Q4 of the financial year 2015-16.

During the year under review, LGAT increased its authorized share capital to Rs. 5 crores and both the Joint Venture Partners have infused equity amounting to Rs. 21.88 Million each in the ratio of 50:50.

DIRECTORS & KEY MANAGERIAL PERSONNEL

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

The Board has appointed Mrs. Usha Jain as an additional director, in the category of Women Director, w.e.f. August 08, 2014, for the time being, on the Board of the Company subject to her regular appointment in the Annual General Meeting.

Mrs. Usha Jain, aged 68 years, is a Science Graduate and has more than 25 years of rich experience and knowledge in Automotive Sector.

In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mrs. Usha Jain holds office till the ensuing Annual General Meeting. The Company has received a Notice in respect of Mrs. Usha Jain, from a member under Section 160 of the Companies Act, 2013 proposing her appointment as Director of the Company, liable to retire by rotation.

The Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

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

The Board, on recommendation of Audit Committee, has appointed Mr. Ashish Dubey, Finance Head as Chief Financial Officer (CFO) of the company w.e.f. May 29, 2014. Mr. Ashish Dubey, aged 48 years, is a MBA (Finance) from National Institute of Management (NIM), Pune, having about 23 years of rich experience and knowledge in the field of Accounts and Finance.

The Board has appointed Mr. Pratik Dhuri as the Company Secretary of the Company w.e.f. April 7, 2014. Mr. Pratik Dhuri is an Associate member of the Institute of Company Secretaries of India.

EXTRACTS OF ANNUAL RETURN

In accordance with the requirement of Section 92 of Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the annual return in Form MGT 9 is annexed as Annexure - A.

NUMBER OF BOARD MEETINGS

The Board of Directors met 4 (Four) times in the Financial year 2014-15. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, the Directors state:

(i) that in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2015, the applicable Accounting Standards have been followed along with proper explanation relating to material departures in the Auditor Report and Notes to Accounts;

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

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

(iv) that the Directors have prepared the Annual Accounts on a "going concern" basis.

(v) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(vi) 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.

REMUNERATION POLICY

The Company follows a policy on remuneration of Directors and Senior Management Employees. The Policy is approved by the Nomination & Remuneration Committee and the Board. The Remuneration Policy is stated in the Corporate Governance Report.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposit under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

AUDITORS

STATUTORY AUDITORS

The members in their meeting held on July 23, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 5 consecutive years in terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, to hold the office of auditors till the conclusion of the sixth consecutive Annual General Meeting of the Company to be held in the year 2019, subject to ratification by the Members at every Annual General Meeting. Your Directors recommends for ratification of their appointment in the ensuing Annual General Meeting.

During the year, all the recommendations of the Audit Committee were accepted by the Board. Hence there is no need for disclosure of the same in this Report

COST AUDITORS

The Board has re-appointed M/s Jitender, Navneet & Co. as the Cost Auditors of the Company in accordance with Section 148 and other applicable provisions, if any, of the Companies Act, 2013, for the audit of the cost accounts of the Company for the Financial Year 2014-15. The Cost Audit Report for the Financial year 2013-14 has been filed with the Central Government.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Milind Kasodekar, Practicing Company Secretary, Partner, MRM Associates, Pune as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2014-15. The Report of the Secretarial Audit is annexed herewith as Annexure - B.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments covered under the provisions of section 186 of Companies Act, 2013 are given in the Notes to financial statements.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards, Companies Act, 2013, Listing Agreement and all other laws for the time being in force (if applicable) and the same forms part of this Annual Report.

The Audited Financial Statements, including the Consolidated Financial Statements and related information and audited accounts of subsidiaries are available on the website of the Company i.e. www.lumaxautotech.com. These documents shall also be available for inspection by any shareholder at the registered office of the Company and subsidiaries.

RELATED PARTY TRANSACTION AND POLICY

All related party transactions entered during the financial year were on arm''s length basis and were in the ordinary course of business. None of the transactions with any of related parties were in conflict with the Company''s interest. The particulars of contracts or arrangements with related parties referred to in Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is annexed herewith as Annexure - C.

All Related Party Transactions, which are foreseen and repetitive in nature, are placed before the Audit Committee on a yearly basis for obtaining prior omnibus approval of the committee. Prior omnibus approval of the committee is also obtained for the transactions

which are not foreseen and specified details of transactions are not available subject to their value not exceeding Rs. 1 (One) crore per transaction. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee for its approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. The Web link of the same is provided here under:

http://www.lumaxautotech.com/downloads/related-party-transaction- policy-28-05-2015.pdf

VIGIL MECHANISM

The Company has established a vigil mechanism named Whistle Blower Policy, for directors, employees and business associates to report to the management, concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy, in accordance with the provisions of Companies Act, 2013 and Listing Agreement. The mechanism provides for adequate safeguards against unfair treatment of employees who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/ exceptional cases. The Whistle Blower Policy is uploaded on the website of the Company.

MATERIAL CHANGES AND COMMITMENTS

No other material changes and commitments affecting the Financial position of the Company have occurred between April 1,2015 and the date on which this Report has been signed.

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

Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed separately as Annexure -D.

RISK MANAGEMENT POLICY

The Company has adopted an enterprise risk management policy and established a risk management framework to identify, mitigate and control the risks, which may threaten the existence of the Company, in accordance with the provisions of Companies Act, 2013 and Listing Agreement.

The Company accepts a level of risk in achieving its goals, however, sound risk management helps it to make the most of each business opportunity and enables the Company to be resilient and respond decisively to the changing environment.

The Company has also constituted a Risk Management Committee. The Committee reviews the risk trend, exposure and potential impact analysis carried out by the Internal Auditors of the Company. The Committee also finalises the risk mitigation plans, identify the risk owners and monitor the progress of mitigation actions.

The Board, Audit committee and Senior management periodically reviews the risk trend, exposure and potential impact analysis carried out by the Internal Auditors of the Company to gain assurance that risks are being managed within approved risk levels.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES

Your Company has been undertaking CSR activities through Lumax Charitable Foundation, a Trust set up by the Group Company. The key focus areas of your Company are education and the wellbeing of disadvantaged section of the society.

The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of Companies Act, 2013.

As part of its CSR initiatives, the Company has undertaken projects in the areas of Education and Healthcare for the disadvantaged children of the society. These projects are largely covered under Schedule VII of the Companies Act, 2013. During the year, the Company supported the schools by way of providing financial support in terms of fees of girl children, contributing towards infrastructure and other facilities for students in the school. Towards its healthcare initiatives, the Company is focussing on preventive healthcare by continuously organising health check-up camps and partnering in special drives organised by various agencies for this cause.

The Company''s spend on CSR activities is around one percent of the average net profits during the three immediately preceding financial years. The company is planning to scale up its CSR activities in phased manner in the coming years. The Annual Report on CSR activities is annexed herewith as Annexure-E.

PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS

The Nomination and Remuneration Committee lays down the criteria for performance evaluation of independent directors and other directors, Board of Directors and Committees of the Board of Directors. The criteria for performance evaluation cover the areas relevant to their functioning as independent directors or other directors, member of Board or Committees of the Board.

The Board has established a formal process, on the recommendation of Nomination and Remuneration Committee, for the annual evaluation of the performance of the Board. This includes the completion of a questionnaire designed and approved by the Board to provide a framework for the evaluation process. It is the role of the committee to summarise the responses and present the same to the Board. The committee also undertake a similar evaluation process of the committees of the Board.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - F.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts / Tribunals, which would impact the going concern status of the Company and its future operations.

INTERNAL FINANCIAL CONTROL

The Company has a comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.

The monitoring and reporting of finance systems is supported by a web-based system SAP Through this system, the Company undertakes an overview of income, expenditure, as well as commitments (labour contracts, procurement in progress, etc.) at all levels of the organization.

CORPORATE GOVERNANCE

The report on Corporate Governance together with the Auditor''s Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of this Annual Report as Annexure - G.

PARTICULARS OF EMPLOYEES

Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this report as Annexure - H.

The information required pursuant to section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is available for inspection by the members at the registered office of the Company during business hours on working days up to the date of ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the continued co-operation and support extended to the Company by its highly valued customers, Joint Venture Partners, all other business partners, all the shareholders, Financial institutions, Banks, Vendors and various Government Agencies with whose help, cooperation and hard work the Company is able to achieve the results.

The Board deeply acknowledges the co-operation and commitment rendered by all the associates and employees of the Company for their contribution and support for the growth of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon D. K. JAIN Dated: May 25, 2015 CHAIRMAN DIN:00085848


Mar 31, 2013

To The Members,

The is a great privilege for your Directors to present the 32nd Annual Report on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2013.

FINANCIAL RESULTS

Your Company''s performance during the year as compared with the previous year is summarized below:

(Rs. in Million)

PARTICULARS 2012-13 2011-12

Sales (Excluding Excise Duty) 4328.52 4366.05

EBITDA 368.06 374.97

Finance Expenses 1.55 2.28

Depreciation 39.38 31.59

Profit Before Taxation (PBT) 327.13 341.10

Provision for Taxation, Deferred Tax 104.15 106.82

Profit After Tax (PAT) 222.98 234.28

Balance of Profit brought forward 200.21 84.49

Balance Available for Appropriation 423.19 318.77

Proposed Equity Dividend 81.79 81.79

Corporate Dividend Tax 13.90 13.27

Transfer to General Reserve 22.30 23.50

Balance carried forward to Balance Sheet 305.20 200.21

423.19 318.77

Dividend (%) 60 60

Basic and Diluted earning per Share (EPS) Rs. 16.36 17.19

DIVIDEND

Keeping in view of the philosophy of the Company to reward its shareholders, the Board of Directors are pleased to recommend a Dividend of 60% (Rs. 6/- per equity share) for the Financial Year 2012-13 (Rs. 6/- previous year). The total amount of Dividend proposed to be distributed and tax thereon aggregates is Rs. 95.69 Million. The Dividend payout ratio comes to 43%.

An amount of Rs. 22.30 Million is proposed to be transferred to General Reserve of the Company. This reaffirms the inherent financial sustainability of your company.

BUSINESS PERFORMANCE

The recent slowdown in the automobile industry for two consecutive years has raised concerns on the long-term growth prospects of the Indian automobile industry. Taking a closer look at the key factors affecting demand over the last few years, it is believed that some of these trends are reversing and the demand for automobiles will revive in the near term. However, the recovery may not be sharp.

Income and the cost of ownership - two key factors affecting demand for passenger vehicles, and both were negatively impacted during the last two years. These factors typically act counter cyclically, resulting in relatively stable growth for the industry. Post June 2010, the cost of ownership has risen sharply on account of deregulation of petrol prices. This along with the economic slowdown has resulted in a sharp decline in industry growth. The overall Indian Automobile Industry recorded a production growth of 1.20% in 2012-13 by producing around 20.62 million vehicles, majorly driven by demand for utility vehicles and two wheelers.Going forward, while economic recovery is likely to be weak, cooling of petrol prices and interest rates would support demand in 2013-14.

After rising by about 30% in 2009-10 and 2010-11, auto component production growth slowed down gradually, dropping to 13% in 2011-12. In 2012-13, the sector''s revenue growth decelerated sharply to a 5 year low of 2-4% (last seen in 2008-09). Lackluster demand from automobile OEMs (which account for 70% of auto component demand) pulled down growth. Growth in exports is also estimated to have slowed to 0-3% y-o-y in 2012-13 on a higher base (41 % in 2011-12) and also due to lower demand for key markets.1

In this backdrop, during the year under review, your Company has achieved Sales Turnover (Net of Excise) of Rs. 4,328.52 Million (on Standalone Basis) as against Rs. 4366.05 Million (on Standalone Basis) in the corresponding previous year.

The Profit before Tax stood at Rs. 327.13 Million (on Standalone Basis) as compared to Rs. 341.10 Million (on Standalone Basis) during the previous year.

On Consolidated Basis, your Company registered a growth of 2% during the year under review by achieving a Sales Turnover (net of excise) of Rs. 7663.04 Million as against Rs. 7503.00 Million during the previous year.

On Consolidated Basis, your Company recorded a Profit before Tax of Rs. 594.02 Million during the year under review as compared to Rs. 617.99 Million during the previous year.

Though this is overall tough year for the Auto Industry, a moderate growth is achieved in supply of the certain products of the company such as Blinker, Head Lamp, Rear Fender, Chassis and Seat Frames etc. During the year under review, the company has started supply to Lear for their GM S2 Model and to Tata Johnson for Tata X1 model. After Market division registered a significant growth over the years, which is a result of its continues expansion of the network and focus on enhancement of its product range which is a blend of company''s manufactured products i.e. lighting and outsourced i.e. filters, rear view mirrors, electronic items and other auto components. These are distributed in domestic & international market as well.

During the year under review, Company awarded by Lear Corporation with the trophy for the Best Development and Excellent Support for new launch.

Also, the Companys'' Chakan unit has received prestigious "Bronze Award" for Quality by Bajaj Auto at the BAVA Waluj Convention for maintaining ZERO PPM for last 6 months i.e. from October 2013 to March 2013.

NEW PLANTS AND FACILITIES

The Robotic Frame Welding plant at Waluj, Aurangabad has commenced manufacturing operations in November, 2012.

Further, your company is in the final stages of setting up a dedicated manufacturing facility at Narsapur, Hobli, Karnataka with an estimated Project cost of Rs.800 Million, for supply of plastic moulded parts to Honda Motorcycle & Scooters India (HMSI) for its various models, to be manufactured at their new facility at Bangalore. The said facility is expected to become operational by July, 2013.

A detailed discussion on the business performance and future outlook is provided in the Chapter on Management Discussion and Analysis Report (MDA).

SUBSIDIARY COMPANY 100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED (LDK)

During the year under review, LDK has achieved net sales revenue of Rs. 3,238.65 Million as against Rs. 3106.57 Million in the previous year, showing a growth of 4 %. The Profit after Tax has however declined to Rs. 184.65 Million from Rs. 270.78 Million mainly due to higher income tax (Being Pantnagar facility shifted to 30% tax exemption from earlier 100%) and increase in deferred tax (due to higher capital investment during the year under review).

The Gear Shifter Division has received prestigious "Focused Cost Down Award" for Quality and best localization from M/s Maruti Suzuki India Limited and the "Yellow Belt Award" from Mahindra and Mahindra Limited for the year 2012-13.

The Pantnagar facility has received the JIPM TPM Excellence award from Japan Institute of Plant Maintenance (JIPM) possibly the first automotive lighting plant to achieve the same. This is one of the most significant achievements within Lumax group historically. The said facility has also received the Bajaj TPM excellence, Bajaj Quality Silver & Appreciation award from Bajaj Auto Limited.

During the year under review, LDK has acquired the 100% shares of M/s Lumax DK Electric Engineering India Private Limited (formerly known as Stanley Electric Engineering India Private Limited) for the expansion of its existing facility at Manesar.

JOINT VENTURE COMPANY

LUMAX CORNAGLIAAUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)

During the year under review, LCAT has reported an impressive growth of 97% by recording net sales of Rs. 225.08 Million as against Rs. 114.38 Million in the previous year. The Profit after Tax has also increased by 90% to Rs. 8.42 Million from Rs. 4.43 Million during the previous year.

Presently, LCAT is supplying Air Intake System (AIS) to leading automobile manufacturers in India viz. TATA, FIAT, VOLKSWAGEN, SKODA & GENERAL MOTORS and during the year it has received LOI for Development of AIS for 2 new programs of Tata Motors, proto supplies for which have already been effected. LCAT has also started manufacturing & supplying CAC Ducts for General Motors SII (SAIL) platform.

LCAT is in the process of setting up a manufacturing facility at Chakan Industrial Area, Pune, Maharashtra, for supply of Exhaust System to Tata Motors Limited for its Nano diesel models. However, due to delay in customer program SOP, commercial production will start in 2014.

The Joint Venture partners had decided to invest Rs. 30 Million in the Exhaust System facility in phased manner by way of equity & debt (1:1), out of which Rs. 15 Million has already been invested by way of equity in the FY 2012-13 & Rs. 15 Million will be invested through debt in FY 2013-14.

LCAT is truly on course to achieve its VISION - 2015 i.e. to become a full service provider for Automotive Air Intake & Exhaust Systems with the application of innovative and cost effective solutions that will add value to the customers as well as to the organization.

DIRECTORS

In accordance with the provisions of Companies Act, 1956 and Articles of Association of the Company Mr. Anmol Jain and Mr. Sandeep Dinodia, Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

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

DIRECTORS RESPONSIBILITY STATEMENT

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

(i) That in the preparation of the Annual Accounts for the Financial Year ended March 31, 2013, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(iii) That 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;

(iv) That the Directors have prepared the annual accounts on a going concern basis.

FIXED DEPOSITS

During the year under review the Company has not accepted any Deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS

M/s D. R. Barve & Co, Chartered Accountants, having Firm Registration Number FRN 101034W, are proposed for re-appointment as Statutory Auditors of the Company, from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. They have given their consent to act as Auditors of the Company and have further confirmed that their appointment, if made, would be in conformity with the provisions of Section 224(1 B) of the Companies Act, 1956. The Board recommends their re- appointment for the approval of the Members in the ensuing Annual General Meeting.

During the year, all the recommendations of the Audit Committee were accepted by the Board. Hence there is no need for disclosure of the same in this Report.

COST AUDITORS

As per the provisions of Section 233B of the Companies Act, 1956 and in accordance with the Order F. No. 52/26/CAB-2010 dated January 24, 2012 issued by the Ministry of Corporate Affairs, audit of the Company''s cost accounts has been made compulsory in respect of each of its financial year commencing on or after the April 01, 2012.

In conformity with the above order, the Company has appointed M/s Jitender, Navneet & Co., Cost Accountants having Firm Registration Number 000119, as the Cost Auditors for the audit of the cost accounts of the Company for the Financial Year 2012-13. The due date of filing the cost audit report for the financial year 2012-13 is September 30, 2013. The report will be filed within the stipulated period.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards, Companies Act, 1956 and all other laws for the time being in force (if applicable) and the same forms part of this Annual Report.

Further, in accordance with the Circular issued by Ministry of Corporate Affairs (MCA), granting the general exemption from the provisions of Section 212 of the Companies Act, 1956, your Company is not attaching the Annual Accounts for the year ended March 31, 2013 and other related documents of its subsidiary Company Lumax DK Auto Industries Ltd (LDK) with this Annual Report. Any shareholder interested in obtaining a copy of the Annual Accounts of LDK may write to the Company Secretary at the registered office of the Company and the company undertakes to supply the same along with all related detailed information. In addition, the Company shall also keep the same Annual Accounts for inspection by any shareholder at the registered office of the Company and LDK.

MATERIAL CHANGES AND COMMITMENTS

No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2013 and the date on which this Report has been signed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - A.

OTHER INFORMATION

Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earnings and Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is annexed separately as Annexure - B.

CORPORATE GOVERNANCE

The report on Corporate Governance together with the Auditor''s Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of this Annual Report as Annexure C.

PARTICULARS OF EMPLOYEES

Information on Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 forms an integral part of this report. However, as per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to the shareholders of the Company excluding the Statement of Particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of such statement may write to the Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to all its highly valued customers, its Technical Collaborators, Joint Venture Partners, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for the assistance, co-operation and encouragement they extended to the Company.

The Board would also like to acknowledge the co-operation and commitment rendered by all the associates and employees of the Company for their unstinted support shown during these challenging times.

For and on behalf of the Board of Directors

Place : Gurgaon D. K. JAIN

Dated : May 28, 2013 CHAIRMAN


Mar 31, 2012

The is a great privilege for your Directors to present the 31st Annual Report on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2012.

FINANCIAL RESULTS

Your Company's performance during the year as compared with the previous year is summarized below:

(Rs. in Million)

PARTICULARS 2011 - 12 2010 - 11

Sales (Net of Excise Duty) 4,377.88 3,408.05

Gross Profit (GP) 376.11 300.21

(-) Finance Expenses 3.43 5.20

(-) Depreciation 31.58 27.44

Profit Before Taxation (PBT) 341.10 267.58

(-) Provision for Taxation & Deferred Tax 106.82 88.60

Profit After Tax (PAT) 234.28 178.99

( ) Balance in the Statement of P&L b/f 84.49 18.50

Profit for Appropriation 318.77 197.49

Appropriation :

Proposed Equity Dividend 81.79 81.79

Tax on Dividend 13.27 13.27

Transfer to General Reserve 23.50 17.94

Balance retained in the Statement of P&L 200.21 84.49

318.77 197.49

DIVIDEND

Keeping in view of the remarkable financial performance during the year under review as also the philosophy of your Company to reward its shareholders, the Board of Directors are pleased to recommend a Dividend of 60% (Rs. 6/- per equity share) for the Financial Year 2011-2012 (Rs. 6 per share for the previous year). The total amount of Dividend proposed to be distributed and tax thereon aggregates to Rs. 95.06 Million (including Dividend Tax). The Dividend payout ratio comes to 41%.

An amount of Rs. 23.50 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

After a strong performance in FY 2010-11, the Indian economy showed signs of slowdown in FY 2011-12, due to inflationary pressures. The year also witnessed a sharp deceleration in manufacturing activity mainly due to monetary tightening, weak external demand and lack of investment activity. However, the Indian automotive industry has marked impressive growth in the last fiscal despite weak global macroeconomic fundamentals. The overall Indian automobile industry recorded a production growth of 13.83% in 2011-12 by producing 20.37 million units, majorly driven by demand for two-wheelers and light commercial vehicle.

In this backdrop, your Company also registered a growth of 28.46% during the year under review by achieving a Sales Turnover (Net of Excise) of Rs. 4,377.88 Million (on Standalone Basis) as against Rs.3,408.05 Million (on Standalone Basis) in the corresponding previous year.

The Profit before Tax increased to Rs. 341.10 Million (on Standalone Basis) from Rs. 267.58 Million (on Standalone Basis) resulting a 27.48% rise, as compared to the previous year.

On Consolidated Basis, your Company registered a growth of 20% during the year under review by achieving a Sales Turnover (net of excise) of Rs. 7,514.84 Million as against Rs. 6,266.92 Million during the previous year.

On Consolidated Basis, your Company recorded a Profit before Tax of Rs. 617.99 Million during the year under review as compared to Rs. 548.24 Million during the previous year, registering a growth of 12.72%.

Like other auto-component manufacturers, your Company also caters not only to the OEMs, but also to the after-sales market. A significant contribution to the turnover was mainly attributed by an outstanding performance of your Company in supplies of various lighting parts, Chassis and other Fabrication products to OEM's. The after market segment also registered a significant growth. In recent years, company has focused on new part requirements for OEM's, therefore your Company has achieved excellent results this year from the same.

The significant contribution for the growth was mainly attributed to sale of Chassis from Waluj Plant, Lighting parts from Chakan and Bhosari plants and Seat Frames from PCNTDA units to execute the strong orders book from its various customers and a growth of 25% in after- market sales of the Company over the previous year.

NEW BUSINESS AND FACILITIES

During the year under review, your company has successfully diversified into the business of Electronic Manufacturing with the setting up of State-of-the-art Surface Mounted Technology (SMT) line. This will primarily cater for all our Light Emitting Diodes (LED) based Printed Circuit Board (PCB) assemblies requirements for Auto lamps, LED Destination boards and venturing into non-Auto fields.

Further, your Company is also in the process of setting up new Robotic Frame Welding plant in Waluj, Aurangabad. The welding process requires skilled manpower and in present industry scenario it is very difficult to get and retain skilled manpower. Considering the stringent quality requirement, your Company has decided to set up a state of the art manufacturing facility having 7 robotic stations. With this robotic line 75% welding work will be done through robo, which will result into 70% less dependency on skilled manpower. The said facility is expected to become operational by the next year.

A detailed discussion on the business performance and future outlook is provided in the Chapter on Management Discussion and Analysis Report (MDA).

SUBSIDIARY COMPANY

100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED (LDK)

During the year under review LDK has achieved net sales revenue of Rs. 3,106.57 Million as against Rs. 2,838.58 Million during the previous year, showing a growth of 9.44%. However, the Profit Before Tax has marginally declined to Rs. 273.59 Million from Rs. 276.38 Million during the previous year.

Further, the Gear Shifter Division has received "Overall Performance Award" for Supplies and Quality and "Best localization supplier award" for the year 2011-12 from Maruti Suzuki India Limited.

JOINT VENTURE COMPANY

LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)

During the year under review LCAT has reported an impressive growth of 28.59% by recording net sales of Rs. 114.38 Million as against Rs. 88.95 Million for the previous year. The Profit before Tax has declined to Rs. 6.62 Million from Rs. 8.57 Million for the previous year mainly on account of forex loss.

Presently, LCAT is supplying Air Intake System (AIS) to four leading automobile manufacturers in India viz. TATA, FIAT, VOLKSWAGEN (VW) & SKODA and during the year it has supplied Prototype parts of AIS to General Motors India & Exhaust System to Tata Motors. LCAT has also started manufacturing & supplying 3D Blow Moulded Ducts to FIAT, thereby making itself a single source for all current programs. LCAT has also received orders from General Motors India (GM) for AIS and CAC Ducts for new Commercial & Passenger Vehicle programs. LCAT has, at the same time received RFQ for Exhaust systems from Tata Motors Passenger Car segment.

Further, regular supply of Exhaust Systems to Tata Motors will be started in F.Y.2012-13 for Nano Europa & Nano Diesel programs.

LCAT has a VISION - 2015, to become a full service provider for Automotive Air Intake & Exhaust Systems with the application of innovative and cost effective solutions that will add value to the customers as well as to the organization.

The Joint venture partners have invested Rs. 45.00 Million in the 3D Blow Moulding Plant for Intake & CAC Ducts in phased manner in two tranches, out of which the second tranche of Rs. 25.00 Million was invested in the FY 2011-12 by way of equity. LCAT has already secured orders for the Intake Ducts & CAC Ducts from TATA, VW & GM.

DIRECTORS

In accordance with the provisions of Companies Act, 1956 and Articles of Association of the Company Mr. Manmohan Sachdev and Mr. A.V. Alexander, Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

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

DIRECTORS RESPONSIBILITY STATEMENT

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

(i) That in the preparation of the Annual Accounts for the Financial Year ended March 31, 2012, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

(iii) That 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;

(iv) That the Directors have prepared the Annual Accounts on a "going concern" basis.

FIXED DEPOSITS

During the year under review the Company has not accepted any Deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

AUDITORS

M/s D. R. Barve & Co, Chartered Accountants, having its Firm Registration Number FRN 101034W, are proposed for re-appointment as Statutory Auditors of the Company, from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. They have given their consent to act as Auditors of the Company and have further confirmed that their appointment would be in conformity of the provision of Section 224(1B) of the Companies Act, 1956. The Board recommends their re-appointment for the approval of the Members in the ensuing Annual General Meeting.

During the year, all the recommendations of the Audit Committee were accepted by the Board. Hence there is no need for disclosure of the same in this Report.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standard, Companies Act, 1956 and all other laws for the time being in force (if applicable) and the same forms part of this Annual Report.

Further, in accordance with the Circular issued by Ministry of Corporate Affairs (MCA), granting the general exemption from the provisions of Section 212 of the Companies Act, 1956, your Company is not attaching the Annual Accounts for the year ended March 31, 2012 and other related documents of its subsidiary Company Lumax DK Auto Industries Ltd (LDK) with this Annual Report. Any shareholder interested in obtaining a copy of the Annual Accounts of LDK may write to the Company Secretary at the registered office of the Company and the company undertakes to supply the same along with all related detailed information. In addition, the Company shall also keep the same Annual Accounts for inspection by any Shareholders in the registered office of the Company and LDK.

MATERIAL CHANGES AND COMMITMENTS

No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2012 and the date on which this Report has been signed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - A.

OTHER INFORMATION

Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earnings and Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is annexed separately as Annexure - B.

CORPORATE GOVERNANCE

The report on Corporate Governance together with the Auditor's Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of this Annual Report as Annexure - C.

PARTICULARS OF EMPLOYEES

Information on Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 forms an integral part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to the shareholders of the Company excluding the Statement of Particulars of employees under Section 217(2A) of the Companies Act, 1956. Any shareholder interested in obtaining a copy of such statement may write to the Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to all its highly valued customers, its Technical Collaborators, Joint Venture Partners, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for the assistance, co- operation and encouragement they extended to the Company.

The Directors of your Company also wish to place on record their deep sense of appreciation for the dedicated and sincere services rendered by the executives, staff and workers of the Company.

For and on behalf of the Board of Directors

Place: Gurgaon D. K. JAIN

Dated: May 30, 2012 CHAIRMAN

 
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