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Directors Report of Lumax Industries Ltd.

Mar 31, 2017

The Directors are pleased to present the 36th Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended March 31, 2017.

Financial Results

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

(Rs. in Million)

Particulars

2016-17

2015-16

Net Sales

12,997.81

12,551.75

EBITDA

1059.95

929.27

Financial Expenses

114.10

134.38

Depreciation/Amortization/Impairment Loss

404.25

378.99

Profit Before Tax (PBT)

541.60

415.90

Provision for Tax

89.76

42.16

Profit After Tax (PAT)

451.84

373.74

Balance of Profit brought forward

554.42

353.20

Balance Available for Appropriation

1006.26

726.94

Appropriations

Dividend

-

112.17

Corporate Dividend Tax

-

22.84

Transfer to General Reserve

54.20

37.50

Balance Carried to Balance Sheet

952.06

554.43

1006.26

726.94

Dividend (%)

145

120

Basic and Diluted Earning Per Share (EPS) (?)

48.34

39.98

DIVIDEND

The Company continues to deliver progressive returns to the Shareholders. The Board of Directors are pleased to recommend a Dividend of 145% (Rs.14.50/- per Equity Share) for the Financial Year 2016-17 ('' 12/- per Equity Share in the previous year). The total amount of Dividend proposed to be distributed, aggregates to Rs.163.13 Million (Including Dividend Tax).The Dividend payout ratio comes to 36.10%.

A sum of Rs.54.20 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

The auto sector, which saw a revival last year after two years of turbulence, is set to continue the momentum this year with demand picking up across all segments. The positive sentiment is driven primarily by the rural and semi-urban demand for two-wheelers and cars, driven on the back of good monsoons. Another boost up will be the 7th pay commission that will infuse around '' 1.02 trillion of disposable income of over 1 crore employees. Another reason is the aggressive play by the cab aggregators who are expanding their operations extensively.

The Indian Auto Component industry is also expected to grow by 8-10% in Financial Year 2017-18, based on higher localisation by Original Equipment Manufacturers (OEM), higher component content per vehicle, and rising exports from India. The Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80-US$ 100 billion by 2026, from the current US$ 11.2 billion. (Source: ICRA Reports)

During the year under review, the Indian Automobile Industry recorded a production growth of 5.41% as compared to 2.58% of the corresponding period last year. The industry produced around 25.31 Million vehicles of which share of two wheelers were 79%, passenger vehicles-15%, three wheelers- 3% and commercial vehicles- 3%.

In this backdrop, during the year under review, your Company recorded a sales turnover of Rs.12997.81 Million as against Rs.12551.75 Million in the corresponding year registering a growth of 3.56%. The profit for the year after tax recorded at Rs.451.84 Million as compared to Rs.373.74 Million during the previous year registering an excellent growth of 20.90%.

CAPACITY EXPANSION / MODERNISATION OF FACILITIES

During the year under review, the Company has made investment to the tune of '' 654 million towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including Bawal, Dharuhera and Chakan plants.

The Company has set-up its first international state-of-the-art Design centre in Taiwan in May, 2016, as a strategic move to expand its presence across the globe and strengthen the synergies of cost and technology.

During the year under review, the Company has also approved investment of about Rs.120 crores to its existing plant at Sanand, which was set-up in the year 2011 for supplies to Tata Nano and which was non-operational due to subdued volumes of Tata Nano. The plant is expected to commence operations from November 2017, for supplies to Suzuki Motors, Gujarat and will also cater to Tata Motors Limited and Honda Motorcycle and Scooter India Limited, at a later stage. The investment will spread over a period of 2 years i.e. Financial Year 2017-18 and Financial Year 2018-19.

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

TECHNOLOGY AND QUALITY

Your Company continues to excel in Design, Development and New Product launches, in line with its strategy towards delivering competitive advantage to the customer and to meet its business objectives. The management ensures that the engineers of your Company are fully aligned with the organization’s strategy and towards this end, the Company has started to celebrate September 15th as Innovation day, as a tribute to the greatest engineer Bharat Ratna, Late Shri M. Visvesvaraya. This step will ensure building in-house engineering and design capability.

In order to continuously create value for our customers in today''s intense competitive environment, your Company has launched Zero Defect & Zero Effect initiative to deliver products, first time right to its customers. This will help in improvement in quality, reduction in rejection cost and thereby optimize cost structures across your Company.

DIRECTORS & KEY MANAGERIAL PERSONNEL

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

The tenure of Mr. Eiichi Hirooka, Senior Executive Director is expiring on July 26, 2017. The Board recommends to reappoint Mr. Eiichi Hirooka as Senior Executive Director for a further period of 3 years w.e.f. July 27, 2017, subject to the approval of the members in the ensuing Annual General Meeting.

Stanley Electric Co., Ltd. (Stanley) had withdrawn the nomination of Mr. Norihisa Sato, Executive Director from the Board of the Company. Consequently, Mr. Norihisa Sato resigned from the Board of the Company w.e.f. 08-08-2016. The Board of Directors places on record its appreciation for the valuable services rendered by Mr. Norihisa Sato during his tenure as Executive Director.

Stanley nominated Mr. Koji Sawada in place of Mr. Norihisa Sato. Pursuant to his nomination, the Board of Directors have appointed Mr. Koji Sawada, as additional Director as well as Executive Director w.e.f. 09-08-2016, for the time being, on the Board of the Company at their meeting held on August 8, 2016, subject to his regular appointment in the Annual General Meeting.

Mr. Koji Sawada, aged 54 years, is a Graduate from Osaka Institute of Technology, Japan, having over 30 years of rich experience in Quality Control and Lamp assembly. He joined Stanley, Japan in 1986 and has abundant experience and knowledge in the automobile lighting field.

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

Mr. Gursaran Singh, Independent Director on the Board of the Company since January, 2003 has resigned from the position of Independent Director due to his other commitments w.e.f. April 19, 2017. His resignation was accepted and taken on record by the board in its meeting held on May 13, 2017.

The Board places on record its sincere appreciation and gratitude for the valuable guidance received from Mr. Gursaran Singh during his tenure as Independent Director on the board of your Company.

The Board has appointed Mr. Rajeev Kapoor as an additional director, w.e.f. May 13, 2017 designated as an Independent Director, for the time being, on the Board of the Company at their meeting held on May 13, 2017, subject to his regular appointment in the Annual General Meeting.

Mr. Rajeev Kapoor, aged 65 years, is a B.E. (Mechanical) (Hons.) from NIT, Kurukshetra, having extensive experience of over 40 years in Automotive, Engineering and FMCG, Corporations with specific skills in General Management, Marketing / Brand Management, Performance Analysis, HRD, Business Development, Innovation and Change Management. He is credited with Launch of Fiat and Copart Businesses from Greenfield stage and developing them to sustainable level.

In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Rajeev Kapoor holds office till the ensuing Annual General Meeting. The Company has received a Notice in respect of Mr. Rajeev Kapoor, from a member under Section 160 of the Companies Act, 2013 proposing his appointment as Director of the Company for five consecutive years w.e.f. May 13, 2017, not liable to retire by rotation.

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

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.

EXTRACT 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.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of IEPF authority. Accordingly, all such shares shall be transferred as per the requirement of IEPF Rules. The details of such shares is available on the Company''s website http://www. lumaxindustries.com/investor/iepf-investor-details.html.

NUMBER OF BOARD MEETINGS

The Board of Directors met 5 (Five) times in the Financial year 2016-17. 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 March 31, 2017, 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) that 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) that 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 August 22, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 3 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 fourth consecutive Annual General Meeting of the Company to be held in the year 2017. The tenure of M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors is expiring in the ensuing Annual General Meeting proposed to be held on July 22, 2017.

In terms of the provisions of Section 139 of Companies Act, 2013 and the Rules made there under regarding mandatory retirement of statutory auditors, your Directors proposed to appoint BSR & Associates LLP, Chartered Accountants (Firm Registration No. 116231W/ W-100024) as the Statutory auditors of the Company. BSR & Associates LLP will hold office of auditors for a period of 5 consecutive years from the conclusion of 36th Annual General Meeting of the Company scheduled to be held on July 22, 2017, till the conclusion of the 41st Annual General Meeting of the Company to be held in the year 2022, subject to the approval of shareholders of the Company. 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 141 of the Companies Act, 2013. The Audit Committee in its meeting held on May 13, 2017 has also recommended the appointment of BSR & Associates LLP, as Statutory Auditors of the Company. Your Directors also recommend for 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 2016-17. The Cost Audit Report for the Financial Year 2015-16 has been filed with the Central Government within the stipulated time on September 6, 2016.

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. Maneesh Gupta, Practising Company Secretary as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2016-17. 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 company has consolidated the Financial Statements of its Associate Company SL Lumax Limited with its financials in accordance with the provisions of Companies Act, 2013. The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards, Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and all other applicable laws for the time being in force and the same forms part of this Annual Report.

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

RELATED PARTY TRANSACTION AND POLICY

In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 the company has formulated a policy on Related Party Transactions, which is available on the Company''s website at http://www. lumaxindustries.com/pdf/related-party-transaction-policy. pdf. 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. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of Companies Act, 2013 and Listing Regulations.

All related party transactions entered during the financial year were in the ordinary course of business and on arm''s length basis. There have been no material related party transactions undertaken by the Company during the year. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013.

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 SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. The mechanism provides for adequate safeguards against unfair treatment of whistle blower 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, 2017 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 - C.

RISK MANAGEMENT POLICY

The Company has adopted an enterprise risk management policy and established a risk management framework with an objective of timely identification, mitigation and control of the risks, which may threaten the existence of the Company, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. The Company has also constituted a Risk Management Committee to review the risk trend, exposure, potential impact and their mitigation plans and periodically the key risks are also discussed at the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES

Your Company''s Corporate Social Responsibility (CSR) initiative is about achieving organisation excellence in ways that honor ethical values and respect people and communities. The Company''s CSR programmes are being implemented through its CSR arm Lumax Charitable Foundation. The key focus areas of your Company are education, promotion of girl chid and the healthcare, for disadvantaged section of the society. During the year, your Company''s spend on CSR activities is 1.80% of the average net profits during the three immediately preceding financial years. Your Company endeavoured to meet the budgeted expenditure in its CSR activities and has committed to incur expenditure for CSR initiatives, however, discontinuance of support to one school has resulted into a shortfall as such in the CSR expenditure as compared to the stipulated 2% of the average net profits of the last three financial years. The Company is committed to spend 2% of the average net profits of the last three financial years on CSR activities and it shall ensure compliance of the same going forward.

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. The Committee monitors and oversees various CSR initiatives and activities of the Company. The details of CSR Policy is available on the Company''s website http://www.lumaxindustries.com/pdf/CSR-policy.pdf. The annual report on Corporate Social Responsibility activities is annexed herewith as Annexure-D.

PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS

During the year, the evaluation of the Board as a whole, committees and all the Directors conducted, as per the internally designed evaluation process approved by the Board. The evaluation tested key areas of the Board''s work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directors'' functioning. The feedback of the evaluation exercise was collated and presented to the Board.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - E.

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 in place for ensuring reliability of financial reporting, orderly and efficient conduct of business, compliance with policies, procedures, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and operate effectively.

The monitoring and reporting of finance systems is supported by a web-based system SAP, which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures.

CORPORATE GOVERNANCE

The report on Corporate Governance together with the Auditor''s Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 is annexed and forms part of this Annual Report as Annexure - F.

PARTICULARS OF EMPLOYEES

Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this report as Annexure-G. 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

It is our belief that we have a leadership team with the right experience and skills to take us into the next decade of growth. We continue to build our skills and add appropriate resources, which will help the company deliver solid results in the years to come. We want to recognize employees at all levels for their efforts, which has allowed us to successfully navigate a tough economy and continue to achieve growth. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator-M/s Stanley Electric Co., Ltd., Japan, all other business partners, all the shareholders, financial institutions, banks, vendors and various Government agencies for their continued support and patronage.

For and on behalf of the Board of Directors

D.K. Jain

Place : Gurugram Chairman

Dated : May 13, 2017 DIN: 00085848


Mar 31, 2016

TO THE MEMBERS,

The Directors are pleased to present the 35th Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended March 31, 2016.

Financial Results

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

(RS, in Million)

Particulars

2015-16

2014-15

Net Sales

12551.75

11425.59

EBITDA

929.27

648.62

Financial Expenses

134.38

144.30

Depreciation/Amortization/Impairment Loss

378.99

361.58

Profit Before Tax (PBT)

415.90

142.74

Provision for Tax

42.16

(22.99)

Profit After Tax (PAT)

373.74

165.73

Balance of Profit brought forward

353.20

299.26

Less: Adjustment related to transitional provision (Schedule II of Companies Act, 2013)

-

33.31

Balance Available for Appropriation

726.94

431.68

Appropriations

Dividend

112.17

51.41

Corporate Dividend Tax

22.84

10.47

Transfer to General Reserve

37.50

16.60

Balance Carried to Balance Sheet

554.43

353.20

726.94

431.68

Dividend (%)

120

55

Basic and Diluted Earnings Per Share (EPS) (H)

39.98

17.73

Dividend

The Company continues to deliver progressive returns to the Shareholders. The Board of Directors recommend that Interim Dividend of 120% (RS,12/- per Equity Share) declared on March 12, 2016 for the Financial Year 201516, be considered as Final Dividend. No further dividends are proposed/ recommended by the Board. The total amount of Dividend distributed aggregates to H 135.00 Million (Including Dividend Tax). The Dividend payout ratio comes to 36.12%.

A sum of H37.50 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

Business Performance

After a subdued growth of about 2.8% during FY16, Indian auto-component industry is likely to gain momentum and register a growth of 10% in the current fiscal FY17, with some traction in the passenger vehicle (PV) and motorcycle segments. Over the medium to long term, growth in the auto component industry is expected to be higher than the underlying automotive industry growth, given the increasing localization by OEMs, higher component content per vehicle and rising exports from India. Over the medium term, operating margins are expected to stabilize at around 13.5%-14% level, given bottoming out of commodity prices in the current year. The implementation of the 7th Pay Commission is expected to support urban/ semi-urban segments like PV and scooter, whereas rural demand will be driven by expected above-average monsoon. In exports, robust demand for PV in North America as well as Europe is likely to offset expected decline in the M&HCV segment in those markets. Relatively better OE and exports demand, coupled with stable aftermarket demand, is likely to drive overall auto component industry growth in FY17. (ICRA reports)

During the year under review, the Indian Automobile Industry recorded a production growth of 2.58% as compared to 8.68% of the corresponding period last year. The industry produced around 23.96 Million vehicles of which share of two wheelers were 79%, passenger vehicles- 14%, three wheelers- 4% and commercial vehicles- 3%.

In this backdrop, during the year under review, your Company recorded a sales turnover of RS, 12551.75 Million as against RS, 11425.59 Million in the corresponding year registering a growth of 9.86%. The profit for the year after tax recorded at RS, 373.74 Million as compared to RS, 165.73 Million during the previous year registering an excellent growth of 125.51%.

Capacity Expansion / Modernization of Facilities

During the year under review, the Company has made investment to the tune of RS, 518 million towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including its Bawal, Dharuhera and Chakan plants.

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

Vendor Development

The auto industry is heavily dependent on the auto component manufacturers and thus, the quality of final automobile is replica of the quality of the product supplied by auto component manufacturers. In order to ensure the quality, it becomes essential for the auto component manufacturers that their suppliers should be technologically as well as technically sound, must have capable manufacturing facility and must be using quality management techniques at par with global standard. The Company in its continuous efforts to upgrade its Vendors has started Sadbhav initiative, wherein a supplier council was formed to work closely with them and to support them to work more efficiently.

This initiative is focused towards achieving long-term cooperative effort between the company and its Vendors and to upgrade their technical, quality, delivery and cost capabilities and to foster ongoing improvements. In the auto component industry quality, cost and on-time delivery are considered as most important factors and focus on Vendor development will not only reduce cost but also ensure timely deliveries.

Directors & Key Managerial Personnel

In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Norihisa Sato and Mr. Toru Tanabe, Directors are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The tenure of Mr. Deepak Jain, Managing Director expired on January 31, 2016. The Board reappointed Mr. Deepak Jain as Managing Director for a further period of 5 years w.e.f. February 1, 2016, subject to the approval of the members in the ensuing Annual General Meeting.

Further, the tenure of Mr. Anmol Jain, Joint Managing Director is expiring on July 31, 2016. The Board recommends to reappoint Mr. Anmol Jain as Joint Managing Director for a further period of 5 years w.e.f. August 1, 2016, subject to the approval of the members in the ensuing Annual General Meeting.

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

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.

Mr. B.S. Bhadauriya, Company Secretary of the Company since January 1, 2007 ceased to be the Company Secretary w.e.f. July 31, 2015 for taking up higher responsibilities at group level after restructuring. The Board has appointed Mr. Shwetank Tiwari as Company Secretary of the Company w.e.f. August 1, 2015. Mr. Shwetank Tiwari is a Law Graduate and an Associate Member of The Institute of Company Secretaries of India (ICSI), having about 10 years of experience and knowledge in secretarial functions.

Extract of Annual Return

In accordance with the requirement of Section 92 of the 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 5 (Five) times in the Financial year 2015-16. 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, 2016, 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) that 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) that 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 August 22, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 3 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 fourth consecutive Annual General Meeting of the Company to be held in the year 2017, subject to ratification by the Members at every Annual General Meeting. Your Directors recommend 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 2015-16.

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. Maneesh Gupta, Practising Company Secretary as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2015-16. 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 company has Consolidated the Financials Statements of its Associate Company SL Lumax Limited with its financials first time in accordance with the provisions of Companies Act, 2013. The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards, Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and all other applicable laws for the time being in force and the same forms part of this Annual Report.

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

Related Party Transaction and Policy

In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 the company has formulated a policy on Related Party Transactions, which is available on the Company''s website at http://www. lumaxindustries.com/pdf/related-party-transaction-policy. pdf. 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. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of Companies Act, 2013 and Listing Regulations.

All related party transactions entered during the financial year were in the ordinary course of business and on arm''s length basis. There have been no material related party transactions undertaken by the Company during the year. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013.

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 behavior, 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 SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. The mechanism provides for adequate safeguards against unfair treatment of whistle blower 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, 2016 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 - C.

Risk Management Policy

The Company has adopted an enterprise risk management policy and established a risk management framework with an objective of timely identification, mitigation and control of the risks, which may threaten the existence of the Company, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. The Company has also constituted a Risk Management Committee to review the risk trend, exposure, potential impact and their mitigation plans and periodically the key risks are also discussed at the Audit Committee.

Corporate Social Responsibility (CSR) Policy and Initiatives

Your Company believes that corporate social responsibility programs reflect the human side of corporate, and the management''s personal commitments to contribute to the community and society of which they are a part. A well-managed CSR program creates social and environmental value, while supporting a company''s key stakeholders.

Your Company''s Corporate Social Responsibility (CSR) programs has been planned with focused approach of community participation. The key focus areas of your Company are education, promotion of girl chid and the healthcare of disadvantaged section of the society.

The company''s focus areas are largely covered under Schedule VII of the Companies Act, 2013. During the year, the Company has added one more school under its education initiative, besides continuing its support to the existing schools by way of providing financial support in terms of fees of girl children, E-learning centre, contributing towards infrastructure and other facilities for students in the school. Under its healthcare initiatives, the Company is focusing on preventive healthcare by continuously organizing health check-up camps, lending financial support to hospitals for juvenile diabetes, cataract operations and partnering in special drives organized by various agencies for this cause.

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. The Committee monitors and oversees various CSR initiatives and activities of the Company. A detailed Report on Corporate Social Responsibility is annexed herewith as Annexure-D.

Performance Evaluation of Board, Committee and Directors

The Board is committed to transparency in determining its performance, committees and in assessing the performance of members. During the year, the Board with the assistance of Nomination and Remuneration Committee has completed the evaluation exercise, which includes the evaluation of the Board as a whole, committees and Directors, as per the internally designed evaluation process approved by the Board.

The evaluation tested key areas of the board''s work including strategy, business performance, risk and governance processes. The need to balance its monitoring activities with discussion on strategic matters was recognized and ought to be continually borne in mind. The evaluation considers the balance of skills, experience, independence and knowledge of the Company and the Board, its overall diversity, and analysis of the Board and its Directors'' functioning.

The feedback of the evaluation exercise was collated and discussed with the Board and an action plan to further improve the effectiveness of Board and committees is put in place.

Management Discussion & Analysis Report

Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - E.

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 in place for ensuring reliability of financial reporting, orderly and efficient conduct of business, compliance with policies, procedures, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.

The monitoring and reporting of finance systems is supported by a web-based system SAP, which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures.

Corporate Governance

The report on Corporate Governance together with the Auditor''s Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 is annexed and forms part of this Annual Report as Annexure - F.

Particulars of Employees

Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this report as Annexure-G. 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

We are confident that our actions will develop a robust business model, which will help the company deliver solid results in the years to come. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator-M/s Stanley Electric Co. Ltd., Japan, all other business partners, all the shareholders, financial institutions, banks, vendors and various Government agencies for their continued support and patronage.

The Board would also like to acknowledge the tireless efforts of its associates and employees across all levels for their wholehearted dedication and contribution for the growth of the Company.

For and on behalf of the Board of Directors

Place : New Delhi D.K. Jain

Dated : May 12, 2016 Chairman

DIN: 00085848


Mar 31, 2015

Dear MEMBERS,

The Directors are pleased to present the 34th Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account 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:

Rupees in Million

Particulars 2014-15 2013-14

Net Sales 11425.59 11166.98

EBITDA 648.62 578.23

Financial Expenses 144.30 174.11

Depreciation/Amortisation/ Impairment Loss 361.58 366.21

Profit Before Tax (PBT) 142.74 37.91

Provision for Tax (22.99) (39.08)

Profit After Tax (PAT) 165.73 76.99

Balance of Profit brought forward 299.26 268.25

Less: Adjustment related to transitional provision (Schedule II of 33.31 - Companies Act, 2013)

Balance Available for Appropriation 431.68 345.24

Appropriations

Dividend 51.41 32.72

Corporate Dividend Tax 10.47 5.56

Transfer to General Reserve 16.60 7.70

Balance Carried to Balance Sheet 353.20 299.26

431.68 345.24

Dividend (%) 55 35

Basic and Diluted Earning Per Share (EPS)(Rs.) 17.73 8.24

DIVIDEND

The Company continues to deliver progressive returns to the shareholders. The Board of Directors are pleased to recommend a Dividend of 55% (Rs.5.50/- per Equity Share) for the Financial Year 2014-15 (Rs.3.50/- per Share in the previous year). The total amount of Dividend proposed to be distributed, aggregates to Rs. 61.88 Million (Including Dividend Tax). The Dividend payout ratio comes to 37.33%.

A sum of Rs.16.60 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

The domestic automobile industry is slowly recovering from the slowdown witnessed over the last two fiscals (FY13 & FY14) against the backdrop of a slowing economy and inflationary pressures, which resulted in lower disposable income and hence consumption. The Indian auto component industry size is estimated at Rs. 2.12 trillion, out of which domestic OEM segment accounts for 54% of revenue. Amongst various automotive segments, medium & heavy commercial vehicle (M&HCV) and passenger vehicle (PV) segment constitute over 55% of revenue share of auto component supplies to OEMs. After witnessing demand slowdown during FY13-14, both these segments have posted healthy volume growth during FY15, however, momentum has slowed down in the two wheeler segment (2W), which constitute a sizable ~11% of overall industry turnover. With strong recovery in domestic M&HCV industry during FY15 and healthy growth by major OEMs in the PV segment, the auto ancillary companies have also witnessed robust revenue growth during FY15. 1

Over the medium term, the auto ancillary industry''s revenues are expected to grow at a relatively faster pace than the OEM segment riding on several factors including auto OEMs'' growing thrust on localization, the Make in India policy, auto suppliers'' efforts to expand business in new geographies, the strong upside potential to replacement market demand and increasing sophistication of vehicles necessitating higher value added inputs.

During the year under review, the Indian Automobile Industry recorded a production growth of 8.68% as compared to 4% of the corresponding period last year. The industry produced around 23.36 Million vehicles of which share of two wheelers were 79%, passenger vehicles - 14%, three wheelers - 4% and commercial vehicles - 3%. 2

In this backdrop, during the year under review, your Company recorded a sales turnover of Rs. 11,425.59 Million as against Rs. 11,166.98 Million in the corresponding year registering a growth of 2.31%. The profit for the year after tax stood at Rs. 165.73 Million as compared to Rs. 76.99 Million during the previous year registering a growth of 115.26%.

CAPACITY EXPANSION / MODERNISATION OF FACILITIES

During the year under review, the Company has made investment to the tune of Rs. 524 million towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including Bangalore, Bawal and Dharuhera plants.

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

SUPPLY CHAIN MANAGEMENT

The rapid transformation and globalization of the Indian auto industry has resulted in significant opportunities and challenges for players in managing their supply chains. The industry landscape is exposed to a set of critical challenges and trends that are leading, if not accelerating, the need to fine-tune supply chain strategies and operations even further. The increasing requirement for real-time information and effective communication across the supply network is critical for managing and optimizing the supply chain on a flexible basis, while keeping costs under control.

In the area of supply planning, your Company focuses on integrating the end-to-end supply chain, improving transparency, identify and develop relationships with strong logistics service providers and improvement in process efficiencies. To achieve this objective, your company organizes Annual Supplier Meet as a platform where the management shares the company''s plans and their expectation with the suppliers. Furthermore, the concerns of the company and those of suppliers were also addressed in this meet during the year.

During the year, your Company has started an initiative to support the suppliers with early payables through dedicated finance schemes and annual negotiations. In conjunction with other continuous improvement initiatives, this has helped your company to maintain a healthy working capital position.

QUALITY INITIATIVES

Total Productive Maintenance (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. In its journey towards TPM, the Pantnagar plant has received the prestigious JIPM TPM Excellence award from Japan Institute of Plant Maintenance (JIPM). This is one of the most significant achievements of the Company in this journey.

During the year under review, your Company has launched Quality Control Circle (QCC) initiative as a way to Quality Improvement aiming significant improvement in quality and productivity, horizontal deployment of POKA-YOKE with total employees involvement. This initiative shall provide a platform to the associates to perform other than routine work,convert their ideas into reality and get recognized. Your Company expects that this initiative will lead to heightened quality awareness in the company, which will translate into higher profits for the company.

DIRECTORS & KEY MANAGERIAL PERSONNEL

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

The tenure of Mr. Eiichi Hirooka, Senior Executive Director expired on July 26, 2014. The Board reappointed Mr. Eiichi Hirooka as Senior Executive Director for a further period of 3 years w.e.f July 27, 2014, subject to the approval of the members in the ensuing Annual General Meeting.

The Board of Directors of the Company, at their meeting held on August 13, 2014, approved the elevation of Mr. Anmol Jain from ''Senior Executive Director'' to ''Joint Managing Director'' with effect from August 13, 2014. He shall hold the office as ''Joint Managing Director'' for his remaining tenure i.e. up to July 31,2016 on the same terms and conditions including remuneration as approved by the members at their meeting held on August 9, 2011.

Mr. Suman Jyoti Khaitan, Independent Director on the Board of the Company since January, 2003 has resigned from the position of Independent Director w.e.f July 21,2014 due to his other pressing engagements. His resignation was accepted and taken on record by the board in its meeting held on August 13, 2014.

The Board places on record its sincere appreciation and gratitude for the valuable guidance received from him during his tenure as Independent Director.

The Board has appointed Ms. Pallavi Dinodia as an additional director, in the category of Women Director, w.e.f. August 23, 2014 (Designated as an Independent Director), on the Board of the Company at their meeting held on August 13, 2014, subject to her regular appointment in the ensuing Annual General Meeting.

Ms. Pallavi Dinodia, aged 33 years, is a B.Com. (H) from Lady Shriram College of Commerce, New Delhi, Law Graduate from Delhi University and a Fellow member of the Institute of Chartered Accountants of India (ICAI), having about 12 years of rich experience and knowledge in International Taxation, Transfer Pricing and cross border transactions with special reference to Double Taxation Avoidance Agreements. She is also actively involved in the domestic taxation in the practice.

She is a Partner with S.R. Dinodia & Co. LLP, Chartered Accountants. She is also currently a Board member of an international alliance of accounting, tax, and consulting firms called MGI.

In accordance with the Articles of Association of the Company and the Companies Act, 2013, Ms. Pallavi Dinodia hold office till the ensuing Annual General Meeting. The Company has received a Notice in respect of Ms. Pallavi Dinodia, from a member under Section 160 of the Companies Act, 2013 proposing her appointment as Director of the Company for five consecutive years w.e.f. August 23, 2014, not 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, had appointed Mr. Sanjay Mehta as Chief Financial Officer (CFO) of the company w.e.f. June 1,2014 at their meeting held on May 30, 2014. Mr. Sanjay Mehta ceased to be the CFO of the Company w.e.f. March 28, 2015.

The Board, on recommendation of Audit Committee, has appointed Mr. Shruti Kant Rustagi as Chief Financial Officer (CFO) of the company w.e.f. May 23, 2015. Mr. Shruti Kant Rustagi, aged 45 years, is a B.com. (H) and a Fellow member of the Institute of Chartered Accountants of India (ICAI), having about 22 years of rich experience and knowledge in the field of Accounts and Finance.

EXTRACT 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, 2015, 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 reqiured 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) that 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) that 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 August 22, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 3 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 fourth consecutive Annual General Meeting of the Company to be held in the year 2017, 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.

The explanations of your Board of Directors on the Auditor''s observations as contained in their report, read with the relevant notes to accounts are as follows:

i. With reference to the observations of the Auditor in Para (vii)(a) to the Annexure of their Report regarding slight delay in deposit

of Statutory Dues, it is informed that the said dues have since been paid.

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 within the stipulated time on September 27, 2014.

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.Maneesh Gupta, Practising Company Secretary 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.

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. There are no material contracts, arrangements or transactions made by the Company with its related parties, which may have a potential conflict with the interest of the company at large. Accordingly no transactions are being reported in form No. AOC-2 in terms of section 134 of the Comapnies Act 2013 read with companies (Accounts) rules 2014.

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 Company has developed an internal Purchase Policy for transaction with related parties for purpose of identification and monitoring of such transactions. 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: http://www.lumaxindustries.com/pdf/related-partv-transaction-policv.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 - C.

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, from time to time, carries study on Enterprise Risk Management of the organization and has developed a comprehensive Risk identification framework for the organization with the expert advice and guidance of its Internal auditors. Under the frame work various risk events have been identified for various functions and mitigation plans have been put in place.

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 Audit department and 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 Audit department and 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''s corporate social responsibility (CSR) programs promotes a vision of business accountability to a wide range of stakeholders, besides shareholders and investors. The key focus areas of your Company are Education, Girl Child and healthcare 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, your Company continued to support to the schools by 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 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 a phased manner in the coming years. The Annual Report on CSR activities is annexed herewith as Annexure-D.

PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS

Good governance requires boards to have effective processes and to evaluate their performance and appraise directors from time to time. The evaluation process is a constructive mechanism for improving board effectiveness, maximising strengths and tackling weaknesses, leading to an immediate improvement in performance throughout the organisation. The evaluation process check that there are proper board procedures in place, with all directors fully understanding their role and having the special skills that directors need.

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 covers 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 responses and present the same to the Board. The committee also undertakes 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 - E.

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

Internal Control Culture is pervasive in the company. 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.

The Internal Audit department also assesses opportunities for improvement in business processes, systems and controls, provides recommendations, designed to add value to the organization and follows up on the implementation of corrective actions and improvements in business processes after review by the Internal Auditors.

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 - F.

PARTICULARS OF EMPLOYEES

Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this report as Annexure- G.

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

At Lumax, we are adopting state-of-the-art technology and engaging a highly passionate workforce to constantly enhance positive customer experience. We will continue to make every effort to further enhance our technological capabilities in our continuous pursuit for quality excellence. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator- M/s Stanley Electric Co. Ltd., Japan, all other business partners, shareholders, financial institutions, banks, vendors and various Government agencies for their continued support and patronage.

The Board would also like to acknowledge the co-operation and commitment rendered by all the associates and employees of the Company for their wholehearted efforts and contribution for the growth of the Company.

For and on behalf of the Board of Directors

Place : Gurgaon D.K. JAIN Dated : May 23, 2015 Chairman DIN : 00085848


Mar 31, 2014

The Directors are pleased to present the 33rd Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended March 31, 2014.

FINANCIAL RESULTS

Your Companies performance during the year as compared with the previous year is summarized below:

Rupees in Million

Particulars 2013-14 2012-13

Net Sales 11166.98 10702.06

EBITDA 578.23 657.63

Financial Expenses 174.11 185.73

Depreciation/Amortisation/ Impairment Loss 366.21 316.27

Profit Before Tax (PBT) 37.91 155.63

Provision for Tax (39.08) 19.78

Profit After Tax (PAT) 76.99 135.85

Balance of Profit brought forward 268.25 195.44

Balance Available for Appropriation 345.24 331.29

Appropriations

Dividend 32.72 42.06

Corporate Dividend Tax 5.56 7.15

Transfer to General Reserve 7.70 13.83

Balance Carried to Balance Sheet 299.26 268.25

345.24 331.29

Dividend (%) 35 45

Basic and Diluted Earning Per Share (EPS)(Rs.) 8.24 14.53

DIVIDEND

Keeping in view of the philosophy of the Company to reward its shareholders and to continue the tradition of recommending dividend for the last 29 years, the Board of Directors are pleased to recommend a Dividend of 35% (Rs.3.50/- per Equity Share) for the Financial Year 2013-14 (Rs.4.50/- per share in the previous year). The total amount of Dividend proposed to be distributed aggregates to Rs. 38.28 Million (including Dividend Tax). The Dividend payout ratio comes to 49.72%.

A sum of Rs. 7.70 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

The Indian automobile industry has witnessed a period of sluggish demand for almost three consecutive years with signs of recovery still appearing distant. As auto component manufacturers derive over 60% of their revenues from supplies to the domestic auto Original Equipment Manufacturers (OEMs), the ongoing weakness in demand for new vehicles has accordingly had an adverse impact on revenue growth of suppliers. Amongst segments, the Commercial Vehicle (CV) segment has been the worst impacted. The Passenger Vehicle (PV) segment had recorded positive volume growth (although in low single digits) in 2011-12 and 2012-13, but growth turned negative (-6.05% YoY) in 2013-14. Over the medium term, the auto components industry''s revenues are expected to grow at a relatively faster pace than the OEM segment riding on several factors including auto OEMs'' growing thrust on localization, auto suppliers'' efforts to expand business in new geographies, the strong upside potential to replacement market demand and increasing sophistication of vehicles shoring up part prices.1

During the year under review, the Indian Automobile Industry recorded a production growth of 4% as compared to 1.20% of the corresponding period last year. The industry produced around 21.48 Million vehicles of which share of two wheelers were 79%, passenger vehicles - 14%, three wheelers - 4% and commercial vehicles - 3%.2

In this backdrop, during the year under review, your Company recorded a sales turnover of Rs. 11166.98 Million registering a growth of 4.34%, which is in line with the industry growth. The profit for the year after tax stood at Rs. 76.99 Million as compared to Rs. 135.85 Million during the previous year.

CAPACITY EXPANSION / MODERNISATION OF FACILITIES

During the year under review, the Company has made investment to the tune of Rs. 214 million towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including Dharuhera and Bangalore plants.

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

QUALITY INITIATIVES

Total Productive Maintenance (TPM) aims to create a culture and environment, which constantly tries to maximize the effectiveness of the entire production system by using a hands-on approach to build a "Zero accident, Zero defect & Zero breakdown" system. It is designed to pre-empt losses of all types throughout the life cycle of the production system which includes development, sales, production as well as administration. It involves at every level of the organization, from top management to front-line employees. TPM is the only way to keep customers, employees and stakeholders happy and contented at the same time. The Bawal, Dharuhera, Pantnagar and Chakan Plants have successfully launched TPM Kick-off ceremony.

RECOGNITION AND AWARDS

Your company considers continuous improvement and implementing appropriate quality management systems and processes to enable it to deliver the highest practicable quality products. Your company also recognises the importance of monitoring and reviewing of quality management systems. As a result of which the Company has received the following awards and recognitions from Customers and other Agencies during the year under review:

- Award for Outstanding Support on Development & Completion of Etios Project from Toyota Kirloskar Motor Private Limited.

- Certificate of appreciation for Continuous Improvement in the Quality issues from Tata Motors Limited.

- Gold trophy in Quality Circle Competition organised by Quality Circle Forum of India.

- Certificate of participation in Direct Material Cost Reduction Initiative from John Deere India Private Limited.

- Shield for Quality improvement - Vendor Upgradation from Maruti Suzuki India Limited.

- Shield for Tier-2 Upgradation from Maruti Suzuki India Limited.

DIRECTORS

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

During the year under review, the following changes were made in the Management structure of the Company, with the view to strengthen professional management and provide robust management structure for the Company''s growth in the future :

i) Mr. D.K. Jain, Chairman & Managing Director has stepped down from the position of Managing Director and now functioning as

Non-Executive Chairman of the Company.

ii) Mr. Deepak Jain has been elevated to the position of Managing Director of the Company.

We thank the shareholders for their support in confirming the above change in management structure of the Company vide Postal Ballot on October 22, 2013.

Stanley Electric Co. Ltd. (Stanley - Technical & Financial Collaborator) had withdrawn the nomination of Mr. Makio Natsusaka, Non- Executive Director and Mr. Toshio Masuda, Executive Director from the Board of the Company. Consequently, Mr. Makio Natsusaka and Mr. Toshio Masuda resigned from the Board of the Company w.e.f. August 6, 2013 and October 28, 2013 respectively. The Board of Directors places on record its appreciation for the valuable services rendered by them during their tenure as Director.

Stanley - Japan nominated Mr. Shigeki Muto and Mr. Norihisa Sato in place of Mr. Makio Natsusaka and Mr. Toshio Masuda. Pursuant to their nomination, the Board of Directors have appointed Mr. Shigeki Muto, as additional Director w.e.f. August 6, 2013 and and Mr. Norihisa Sato as additional director as well as Executive director w.e.f. October 28, 2013, for the time being, on the Board of the Company at their meeting held on August 6, 2013 and October 28, 2013 respectively, subject to their regular appointment in the Annual General Meeting.

Thereafter, in May, 2014, Stanley - Japan has withdrawn the nomination of Mr. Shigeki Muto from the Board of the Company. Consequently, he resigned from the Board of the Company w.e.f. May 30, 2014. The Board of Directors place on record its appreciation for the valuable services rendered by him during his tenure as Director.

Stanley - Japan nominated Mr. Toru Tanabe in place of Mr. Shigeki Muto. Pursuant to his nomination, the Board of Directors have appointed Mr. Toru Tanabe, as additional Director w.e.f. May 30,2014, for the time being, on the Board of the Company at their meeting held on May 30, 2014, subject to his regular appointment in the Annual General Meeting.

Mr. Norihisa Sato is a B. Tech. from Kogakuin University, Japan, aged 52 years, having about 30 years of rich experience in Production Engineering. He joined Stanley, Japan in 1984 and has abundant experience and knowledge in the Production Engineering Fields and has a management record of 10 years'' standing.

Mr. Toru Tanabe is a Graduate from HOSEI University, Japan, aged 55 years, having about 23 years of rich experience and knowledge in R&D of electrical components and advanced illumination systems for automotive equipment and about 10 years in automotive electronics since he joined Stanley, Japan in 1981 and has a management record of about 20 years'' standing.

In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Norihisa Sato and Mr. Toru Tanabe hold office till the ensuing Annual General Meeting. The Company has received Notices in respect of Mr. Norihisa Sato and Mr. Toru Tanabe from a member under Section 160 of the Companies Act, 2013 proposing their appointment as Directors of the Company liable to retire by rotation.

Consequent to notification of Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of all Independent Directors for five consecutive years from the ensuing Annual General Meeting and they shall not be liable to retire by rotation.

Your Directors recommend the re-appointment/ appointment of the above 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 31st March, 2014, 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 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 S.R. Batliboi & Co. LLP, Chartered Accountants, auditors of the Company are completing 9 years as Statutory Auditors in the ensuing AGM. In terms of the provisions of Section 139 of the Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014, your Directors proposed to appoint S.R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditors of the company for a period of 3 consecutive years from the conclusion of the ensuing Annual General Meeting till the conclusion of the fourth consecutive 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 provision of Section 141 of the Companies Act, 2013. The Audit Committee in its meeting held on May 30, 2014 has also recommended the appointment of M/s S.R. Batliboi & Co. LLP, as Statutory Auditors of the Company. Your Directors also recommend their appointment.

The explanations of your Board of Directors on the Auditor''s observations as contained in their report, read with the relevant notes to accounts are as follows:

i. With reference to the observations of the Auditor in Para (ix)(a) to the Annexure of their Report regarding slight delay in deposit

of Statutory Dues, it is informed that the said dues have since been paid.

ii. With reference to the observations of the Auditor in Para (xvii) to the Annexure of their Report regarding the use of short term

funds for long term purposes, it is informed that in view of the general slowdown in the global economy, leading to slowdown in Auto Industry, your company decided not to go for fresh long term loans till the market improves as a result of which the company has used short term funds for long term investments.

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 233B of the Companies Act, 1956 and in conformity with the directives of the Central Government, for the audit of the cost accounts of the Company for the Financial Year 2013-14. The Cost Audit Report for the Financial year 2012-13 has been filed with the Central Government within the stipulated time on September 26, 2013.

MATERIAL CHANGES AND COMMITMENTS

No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2014 and the date on which this Report has been signed.

CORPORATE SOCIAL RESPONSIBILITY

People and the environment are the industry''s top resources. The automobile industry invests heavily in new technologies and strategies to address the complex CSR and sustainability challenges. All over the world, the automobile brings improved quality of life; the task is to sustain and improve its benefits while reducing the environmental footprint of its products, services and production facilities.

Indian entrepreneurs and business enterprises have a long tradition of working within the values that have defined nation''s character for millennia. India''s ancient wisdom, which is still relevant today, inspires people to work for the larger objective of the well-being of all stakeholders. These sound and all-encompassing values are even more relevant in current times, as organizations grapple with the challenges of modern-day enterprise, the aspirations of stakeholders and of citizens eager to be active participants in economic growth and development. Corporate Social Responsibility is about achieving organization excellence in ways that honour ethical values and respect people and communities.

Your Company''s CSR programs focuses on improving the well-being of people and communities through its Education and Healthcare initiatives. Through various activities, your company strive to support social inclusion and education in its broader sense of disadvantaged and underprivileged children of the society – with a focus on Girl child. Through its healthcare initiatives, which involves partnership with various agencies, your company is making healthcare available to more people in more places. All in all the activities within the both focus groups shall demonstrate a positive social and economic impact.

Education

In its continuous efforts towards CSR activities, your Company has adopted yet another branch of a School in Dundahera, Gurgaon, which is dedicated to the children from the economically weaker section. The school has been provided with infrastructure support and other facilities for students. Apart from the above, the Company continued to support the existing 3 schools, bearing fees of all girl students and distributed school starter kit in the beginning of the session. These schools have also been provided with infrastructure and other facilities for students.

Healthcare

Further, in its on-going efforts to create healthy society, your Company also joined the Punjab Cancer Screening Drive, the biggest ever cancer screening program launched with the collaboration of Max Healthcare and Government of Punjab, as District partner- Amritsar on September 28 and 29, 2013. Nearly 1,00,000 patients were examined over two days with the help of approximately 400 doctors and more than 2500 nurses, managers and other volunteers in 22 district hospitals of Punjab. The motive behind the drive was to make people aware about the benefits of early screening and make a healthy, prosperous and cancer free society.

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 Earning 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 Vice President (Legal) and Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

It is our belief that we are able to embrace continuous change and respond quickly with innovative products and solutions that is vitally important in an increasingly dynamic business environment. We will continue to make rapid innovations, which are essential to an organization''s survival in today''s hypercompetitive business environment. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator- M/s Stanley Electric Co. Ltd., Japan, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for their continued support and patronage.

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 30, 2014 Chairman


Mar 31, 2013

TO THE MEMBERS''

The Directors are pleased to present the 32nd Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended March 31st 2013.

FINANCIAL RESULTS

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

Rupees in Million

Particulars 2012-13 2011-12

Net Sales 10702.06 9851.58

EBITDA 657.63 494.14

Financial Expenses 185.73 122.14

Depreciation/Amortisation/ Impairment Loss 316.27 236.68

Profit Before Tax (PBT) 155.63 135.32

Provision for Tax 19.78 7.18

Profit After Tax (PAT) 135.85 128.14

Balance of Profit brought forward 195.44 145.49

Balance Available for Appropriation 331.29 273.63

Appropriations

Dividend 42.06 56.09

Corporate Dividend Tax 7.15 9.10

Transfer to General Reserve 13.83 13.00

Balance Carried to Balance Sheet 268.25 195.44

331.29 273.63

Dividend (%) 45 60

Basic and Diluted Earning Per Share (EPS)(Rs.) 14.53 13.71



DIVIDEND

Keeping in view of the philosophy of the Company to reward its shareholders and to continue the tradition of recommending dividend for the last 28 years'' the Board of Directors are pleased to recommend a Dividend of 45% (Rs.4.50/- per Equity Share) for the Financial Year 2012-13 (Rs.6/- per share in the previous year). The total amount of Dividend proposed to be distributed aggregates to Rs. 49.21 Million (including Dividend Tax). The Dividend payout ratio comes to 36.23%.

A sum of Rs. 13.83 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

The Indian auto and auto components industry is currently facing its most formidable challenge – that of slowing demand; and that too across the board. After a frenzied period of 2009-10 and 2010-11 when all automotive spots - domestic OEMs'' exports and replacement market - shone bright'' the year 2011-12 marked the commencement of a slowdown phase as volumes in the domestic Passenger Vehicle and Medium & Heavy Commercial Vehicle segments began to stutter. If the year 2011-12 was bad'' the year 2012-13 has turned out to be worse as other segments too including the domestic Two-Wheeler segment as also exports to overseas OEMs and tier-1 players have come into the grips of the slowdown. While the revenue growth of diversified auto component manufacturers had been steady till Q1 2012-13'' the across the board weakness in demand witnessed during the last two quarters has tended to neutralize this structural advantage otherwise enjoyed by such players.1

During the year under review'' the Indian Automobile Industry recorded a production growth of 1.20% as compared to 13.83% of the corresponding period last year. The industry produced around 20.62 Million vehicles of which share of two wheelers were 76%'' passenger vehicles - 16%'' three wheelers and commercial vehicles - 4% each.2

In this backdrop'' during the year under review'' your Company recorded a sales turnover of Rs. 10702.06 Million registering a growth of 8.63%'' which is much above the industry growth. The profit for the year after tax stood at Rs.135.85 Million as compared to Rs. 128.14 Million during the previous year.

NEW PLANTS AND FACILITIES

The plant in Bidadi'' Bangalore has commenced manufacturing operations and supplies of Auto Lighting and other components to Toyota Kirloskar Motors India Private Limited for their Etios and Liva vehicles in August'' 2012. Further'' the supplies of two wheeler lighting from this plant to Honda Motorcycle & Scooter India Private Limited (HMSI) are expected to commence in the first quarter of FY 2013-14.

During the year under review'' the Company has made investment to the tune of Rs. 865 million towards up-gradation of its Research and Development facilities'' modernization of its existing manufacturing facilities including Bawal and Bangalore plants.

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

RECOGNITION AND AWARDS

Your company considers high standards for quality'' environmental protection and safety as critical success factors and'' therefore'' all relevant issues are regularly monitored and assessed within the framework of company''s quality management system. As a result of which the Company has received the following awards and recognitions from Customers and other Agencies during the year under review:

- Got the Shield for Manufacturing Excellence from Maruti Suzuki India Limited.

- Won 2nd Runner up trophy in Quality Circle Preliminary Competition organized by Confederation of Indian Industry.

DIRECTORS

In accordance with the Articles of Association of the Company and the Companies Act'' 1956'' Mr. Anmol Jain'' Mr. Makio Natsusaka'' Mr. Dhiraj Dhar Gupta and Mr. Rattan Kapur'' Director(s) 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 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 31st March'' 2013'' 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 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 S.R. Batliboi & Co.'' Chartered Accountants'' auditors of the company'' retire at the conclusion of the ensuing Annual General Meeting and offers themselves for re-appointment. The company has received a letter dated 11th April'' 2013 from Auditors informing that the Partnership Firm M/s. S.R. Batliboi & Co. has been converted into Limited Liability Partnership w.e.f. 1st April'' 2013 and consequent to the conversion'' the name of the firm has also been changed to S.R. Batliboi & Co. LLP. The Company has also received a letter from S.R. Batliboi & Co. LLP'' Chartered Accountants stating that their appointment'' if made'' will be in accordance with the limits specified in Section 224(1B) of the Companies Act'' 1956. The Audit Committee in its meeting held on 27th May'' 2013 has also recommended the appointment of S.R. Batliboi & Co. LLP'' as Statutory Auditors of the Company. Your directors also recommend their appointment..

The explanations of your Board of Directors on the Auditor''s observations as contained in their report'' read with the relevant notes to accounts are as follows:

(i) With reference to the observation in Para (v)(b) to the Annexure of their Report in respect of transactions exceeding Rs. 5 Lacs in which comparable prices are not availaible'' it is explained that the nature of these transactions covers under two categories viz. (a) Designing and Development of Tools'' Moulds and (b) Specialized Nature of Raw Material'' Semi Finished and Finished Products.

a) Designing and Development of Tools'' Moulds

The Tools and Moulds etc are of specialized nature of products which needs to be designed and developed with specialized knowledge and skill as per the Customer specifications and requirements. The specifications provided by Customer for designing and development of Tools are of Confidential Nature and having immense Intellectual property value. Therefore'' the Company arranges the Designing and development of Tools with the Technical Support and Guidance from its Collaborator M/s Stanley Electric Co. Ltd and its associates. In some cases'' the Tool designing and its development is also undertaken by Vendors which transactions are not pursuance of such contracts and arrangements as referred to in Para (v) (b) to the Annexure of the Audit Report.

In all these cases the Company need to share the Technical Specification and Other Information of Customer which is of immense Intellectual Property Value with the Vendor which can only be done after entering into Legally binding Contracts which includes Confidentiality Agreements also'' with the respective Vendor. These Vendors are finalised after due Financial and Technical Assessment of their capability to execute the job. In view of this background'' it is not possible for the Company to share the Customers Information/ specifications with alternate vendors only for the purpose of arranging comparable quotes/ prices.

b) Raw Material'' Semi Finished and Finished Products

In most of these cases'' the Company procures the raw material and components from the Vendors after supplying'' Tools'' Moulds''Jigs'' Dies for its manufacturing and some of the items purchased are of a specialized and unique nature for which no alternate sources of supply available to enable comparison of prices. Further'' such Vendors are also defined and approved by our Customer(s)'' to whom the Company supplies the Final Product. As these raw material and components are of specialized and unique nature and its comparable market prices are not available.

(ii) With reference to the observations of the Auditor in Para (ix) (a) to the Annexure of their Report regarding slight delay in deposit of Statutory Dues'' it is informed that the said dues have since been paid.

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 24th January'' 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 1st day of April'' 2012.

In conformity with the above order'' the Company has appointed M/s Jitender'' Navneet & Co.'' Cost Accountants'' 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 30th September'' 2013. The report will be filed within the stipulated period.

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.

CORPORATE SOCIAL RESPONSIBILITY

Today'' Corporate Social Responsibility has become a world wide concept whereby organisations consider the interests of society by taking responsibility for the impact of their activities on customers'' employees'' shareholders'' communities and the environment in all aspects of their operations.

As India rides the wave of economic boom and commercial success'' corporate social responsibility is presenting itself both as an opportunity and an important requirement for corporates to be engaged in. This also contributes towards faster and more balanced growth of our society.

The Government has also taken an initiative towards this cause by introducing a clause in new Companies Bill to make CSR mandatory for corporates'' which was earlier voluntary in nature'' for certain class of companies as specified. The Companies Bill says that larger corporates should contribute to society'' especially the communities in which they operate'' by setting aside 2% of their net profit towards CSR.

Your company has always believed in serving the underprivileged of the society – with a focus on the girl child. The Company''s efforts towards this direction are evident in places where it works'' with specific focus on manufacturing locations'' implemented by CSR team by continuously supporting the 3 schools adopted by it in NCR region by way of providing financial support in terms of fees of children on one side and contributing towards infrastructure and other facilities for students in the school on the other. With a combination of approaches communities in the neighborhood are being assisted to access healthcare by organizing regular Health check-up camp'' Blood donation camp and AIDS awareness campaigns'' improved education opportunities for the underprivileged to achieve sustainable livelihoods.

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 Earning 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 Vice President (Legal) and Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

It is our overriding quest to become a company that society wants to exist. We will continue to look for strategic'' prudent ways to help grow our existing businesses in this direction and focus on new business opportunities. Your Directors wish to place on record their sincere thanks to all its highly valued customers'' its Technical and Financial Collaborator- M/s Stanley Electric Co. Ltd.'' Japan'' all other business partners'' all the Shareholders'' Financial Institutions'' Banks'' Vendors and various Government agencies for their continued support and patronage.

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 27'' 2013 Chairman & Managing Director


Mar 31, 2012

The Directors are pleased to present the 31st Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account 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.

Rupees in Million

Particulars 2011-12 2010-11

Net Sales 9851.58 8662.49

EBRTDA 494.28 567.92

Financial Expenses 122.28 90.13

Depreciation/Amortization/ Impairment Loss 236.68 240.45

Profit Before Tax (PBT) 135.32 237.34

Provision for Tax 7.18 57.60

Profit After Tax (PAT) 128.14 179.74

Balance of Profit brought forward 145.49 48.94

Balance Available for Appropriation 273.63 228.68 Appropriations

Dividend 56.09 56.09

Corporate Dividend Tax 9.10 9.10

Transfer to General Reserve 13.00 18.00

Balance Carried to Balance Sheet 195.44 145.49

273.63 228.68

Dividend (%) 60 60

Basic and Diluted Earning Per Share (EPS)(Rs.) 13.71 19.23

DIVIDEND

Keeping in view of the philosophy of the Company to reward its shareholders and to continue the tradition of recommending dividend for the last 27 years, 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 aggregates to Rs. 65.19 Million (including Dividend Tax). The Dividend payout ratio comes to 50.87%.

A sum of Rs. 13.00 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

The Rs. 1,600 billion Indian auto component industry derives its growth impetus from the growth in automobile industry. The Indian auto components industry has been witnessing a moderation in its revenue growth since the beginning of this fiscal following the deceleration in sales volume growth across all automobile segments. The margins of the auto component manufacturers declined due to higher overhead costs, increase in raw material & power prices, sluggish growth in supplies to domestic Original Equipment Manufacturers and sudden depreciation of rupee against major currencies. The sluggishness was partly arrested on the back of rise in component exports and higher domestic replacement market sales.1

During the year under review the Indian Automobile Industry recorded a production growth of 13.83% as compared to 27% of the corresponding period last year. The industry produced around 20.37 Million vehicles of which share of two wheelers was 76%, passenger vehicles - 16%, three wheelers and commercial vehicles - 4% each.2

In this backdrop, during the year under review, your Company recorded a sales turnover of 9851,58 Million registering a growth of 13.73%, which is in line with the industry growth. The profit for the year after tax stood at Rs. 128.14 Million as compared to Rs. 179.74 Million during the previous year.

SCALING UP OF BUSINESS: NEW PLANTS AND FACILITIES

Currently, the auto components industry in India is around two-thirds the size of the OEM segment. This proportion is around one to two times in mature markets of Europe, America and Japan. Given the healthy growth prospects of the Indian automobile industry over the medium term, the size of the auto components industry would grow at a rate faster than the OEM segment, driven by OEMs' thrust on localization and steadily growing replacement market demand.

As volumes increase, Indian auto component manufacturers will have to scale up their operations and further improve quality, cost and delivery performance to global standards demanded by customers.

Keeping in view the huge growth potential of automotive industry, to better serve its esteemed customers and to retain competitive edge, your company has made an investment to the tune of Rs.1100 million, which is up by nearly 44% over the last year. The Investments have been made towards setting up a new state of the art automotive lighting plant at Bawal, modernization of Dharuhera Plant, setting up a new surface treatment facility at Pantnagar and up-gradation of its Research and Development facilities & Production engineering capabilities. The automotive lighting plant at Bawal has commenced commercial production in February, 2012, in a record time of one year.

The development work of new plant in Bidadi, Bangalore for Manufacturing of Auto Lighting and other components for the Small Car Toyota - Etios is going as per schedule and expected to complete by June, 2012. Further, the Company has also received business from Honda Motorcycle & Scooter India Private Limited (HMSI) for supply of two wheeler lighting from this plant.

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

RECOGNITION AND AWARDS

Your company considers technological leadership to be a significant factor in quality excellence and its continued success and therefore continues to devote significant resources to upgrade its technological capabilities. As a result of which the Company has received the following awards and recognitions from Customers and other Agencies during the year under review:

- Won gold trophy in Quality Circle Competition organized by Quality Circle Forum of India.

- Won 4th Runner up award in Quality Circle Competition organized by TOYOTA.

- Got the Award to maintain the 90% score continuously from last two years in Vendor System Audit by Maruti Centre for Excellence (MACE).

- Got distinguished award in Quality Circle Competition organized by Quality Circle Forum of India.

- Won Bronze Trophy for "Manufacturing Excellence" from Automotive Components Manufacturer Association (ACMA).

- Won Bronze Trophy for "Quality and Productivity" from Automotive Components Manufacturer Association (ACMA).

- Received Certificate of appreciation for Quality & Delivery of Spare part components by Honda Siel Cars India Limited.

- Received Certificate for Proactive capacity enhancement from Maruti Suzuki India Limited.

DIRECTORS

In accordance with the Articles of Association of the Company and the Companies Act, 1956, Mr. Deepak Jain, Mr. Gursaran Singh and Mr. Suman Jyoti Khaitan, Director(s) are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Stanley Electric Co. Ltd. (Stanley - Technical & Financial Collaborator) has withdrawn the nomination of Mr. Ikuo Abe, Senior Executive Director and Mr. Atsushi Ishii, Executive Director from the Board of the Company. Consequent to withdrawal of their nomination, Mr. Ikuo Abe and Mr. Atsushi Ishii resigned from the Board of the Company w.e.f. 26-07-2011 and 30-06-2011 respectively. The Board of Directors places on record its appreciation for the valuable services rendered by them during their tenure as Director.

Stanley nominated Mr. Eiichi Hirooka and Mr. Toshio Masuda in place of Mr. Ikuo Abe and Mr. Atsushi Ishii. Pursuant to their nomination, the Board of Directors have appointed Mr. Eiichi Hirooka and Mr. Toshio Masuda, as additional Directors and thereafter as Senior Executive Director and Executive Director respectively w.e.f. 27-07-2011, for the time being, on the Board of the Company at their meeting held on July 26, 2011 subject to their regular appointment in the Annual General meeting.

Mr. Eiichi Hirooka is a Masters in Business Administration (Finance), Japan, aged 54 years, having about 29 years of rich experience in Auto Lighting sales and worked in USA, Stanley for 7 years. Before joining the Company, he was responsible for Suzuki Japan Business for Automotive Lighting.

Mr. Toshio Masuda is a Graduate from Japan, aged 54 years, having about 31 years of rich experience in production engineering in Auto Lighting. He joined Stanley Japan in 1980 and worked 17 years in Thai Stanley as Director-Automotive Lamps, thereafter as plant Manager in Stanley Japan for 8 years. He has also worked in China, Stanley for 1 year as Vice President- Plant before joining the Company.

Your Directors recommend the re-appointment / appointment of the above 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 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 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. S. R. Batliboi & Associates, Chartered Accountants, auditors of the Company, retire at the conclusion of the ensuing annual general meeting but do not offer themselves for re-appointment. The Company has received a requisition to appoint M/s. S.R Baltiboi & Co., Chartered Accountants, as the Statutory Auditor of the Company. Consequently a consent letter and certificate from M/s. S.R Baltiboi & Co., Chartered Accountants stating that their appointment, if made, will be in accordance with the limits specified in Section 224(1 B) of the Companies Act, 1956 has also been received. The Audit Committee in its meeting held on 30th May, 2012 has also recommended the appointment of M/s. S. R. Batliboi & Co., as Statutory Auditors of the Company. Your directors also recommend their appointment.

The explanations of your Board of Directors on the Auditor's observations as contained in their report, read with the relevant notes to accounts are as follows:

(i) With reference to the observation in Para (v)(b) to the Annexure of their Report in respect of transactions exceeding Rs. 5 Lacs in which comparable prices are not available, it is explained that the nature of these transactions covers under two categories viz. (a) Designing and Development of Tools, Moulds and (b) Specialized Nature of Raw Material, Semi Finished and Finished Products.

a) Designing and Development of Tools, Moulds

The Tools and Moulds etc are of specialized nature of products which needs to be designed and developed with specialized knowledge and skill as per the Customer specifications and requirements. The specifications provided by Customer for designing and development of Tools are of Confidential Nature and having immense Intellectual property value. Therefore, the Company arranges the Designing and development of Tools with the Technical Support and Guidance from its Collaborator M/S Stanley Electric Co. Ltd and its associates. In some cases, the Tool designing and its development is also undertaken by Vendors which transactions are not pursuance of such contracts and arrangements as referred to in Para (v) (b) to the Annexure of the Audit Report.

In all these cases the Company need to share the Technical Specification and Other Information of Customer which is of immense Intellectual Property Value with the Vendor which can only be done after entering into Legally binding Contracts which includes Confidentiality Agreements also, with the respective Vendor. These Vendors are finalized after due Financial and Technical Assessment of their capability to execute the job. In view of this background, it is not possible for the Company to share the Customers Information/ specifications with alternate vendors only for the purpose of arranging comparable quotes/ prices.

b) Raw Material, Semi Finished and Finished Products

In most of these cases, the Company procures the raw material and components from the Vendors after supplying Tools, Moulds, Jigs Dies for its manufacturing and some of the items purchased are of a specialized and unique nature for which no alternate sources of supply available to enable comparison of prices. Further, such Vendors are also defined and approved by our Customer(s), to whom the Company supplies the Final Product. As these raw material and components are of specialized and unique nature and its comparable market prices are not available.

(ii) With reference to the observations of the Auditor in Para (ix) (a) to the Annexure of their Report regarding slight delay in deposit of Statutory Dues, it is informed that the said dues have since been paid.

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.

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.

CORPORATE SOCIAL RESPONSIBILITY

Today, Corporate Social Responsibility (CSR) is one of the most important global issues with serious challenges and implications on almost all sectors. Surging economies, including India, are coping with issues related to poverty, unemployment, illiteracy, malnutrition, child rights, community welfare etc and are a hotbed for an innovative CSR scenario which is still shaping up. While the Government undertakes extensive developmental initiatives through a series of sect oral programmes, the business sector also needs to take the responsibility of exhibiting socially responsible business practices that ensures the distribution of wealth and well-being of the communities . in which the business operates.

The Indian business has traditionally been socially responsible. From inactive philanthropy to the incorporation of the stakeholders' interest in the business model, the Indian business sector practices various methods of discharging its social responsibility.

Your Company is already taking part in CSR activities through its various programmes which include "Lumax Ki Nanhi Chhaan" for promoting the girl child amongst general population and to promote community's involvement in forestation drive and by organizing free Health checkup camps & running a charitable dispensary for the underprivileged. However, for effective implementation and providing a roadmap to its CSR objectives, the Company has formed a Trust in October, 2011 namely 'Lumax Charitable Foundation' for contributing in the economic and social development of communities and geographical areas, particularly in the vicinity of its operations. This will include education, skill building for livelihood of people, health, cultural and social welfare particularly targeting the weaker sections of society.

In addition to above, M/s Stanley - Japan has also shown its keen desire to contribute in the formation of a much better society in India by supporting deserving students to up-scale their knowledge by providing scholarship to those students who are needy and bearing the expenses for their education. This proposal is being implemented with the support of Kitano Foundation of Lifelong Integrated Education, Japan, founded by Mr. Takahoru Kitano, founder of Stanley- Japan. The Kitano Foundation is actively involved in providing aid for lifelong educational projects, to support initiatives that lead to skill development and educational benefits for the Economically Weaker Sections of the community in Japan.

Further we have also adopted 3 schools in the NCR region. Through this initiative, the Company not only aims to impact lives of thousands of children by providing them better infrastructural facilities, but also continues its mission to promote girl child by sponsoring the fees of all girl children in kindergarten. In addition to these schools, the Company has adopted visually impaired children by sponsoring their fees in various colleges of Delhi University.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis 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 Earning and Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is annexed separately as Annexure - B.

GROUP

Pursuant to the intimation from the Promoters, the names of the Promoters and entities comprising 'Group' are disclosed in the Annual Report as Annexure C, for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

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 - D.

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 Vice President (Legal) & Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

We are driven by the consumer and deliver results through a partnership with our customers - built upon superior brands and products, continuous innovation and a commitment to quality in the past and will continue to do so in future. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator- M/s Stanley Electric Co. Ltd., Japan, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for their continued support and patronage.

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 30, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors are pleased to present the 30th Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended March 31, 2011.

FINANCIAL RESULTS

Your Companys performance during the year as compared with the previous year is summarized below:

Rupees in Million

Particulars 2010-11 2009-10

Net Sales 8,609.25 6,341.54

Profit before Interest and Depreciation 571.41 517.56

(-) : Financial Expenses 93.63 113.20

(-) : Depreciation/Amortisation/ Impairment Loss 240.45 340.54

Profit Before Tax (PBT) 237.33 63.82

(-) : Provision for Tax 57.60 4.55

Profit After Tax (PAT) 179.73 59.27

(+) : Balance of Profit brought forward 48.94 28.37

Balance Available for Appropriation 228.67 87.64 Appropriations

Dividend 56.09 28.04

Corporate Dividend Tax 9.10 4.66

Transfer to General Reserve 18.00 6.00

Balance Carried to Balance Sheet 145.48 48.94

228.67 87.64

Dividend (%) 60 30

Basic and Diluted Earning Per Share (EPS)(Rs.) 19.23 6.34

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 2010-2011 as against 30% for the corresponding last year. The total amount of Dividend proposed to be distributed and tax thereon aggregates to Rs. 65.19 Million (including Dividend Tax) as against Rs. 32.70 Million. The Dividend payout ratio comes to 36.27%.

A sum of Rs. 18 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

Since the first car was rolled out in India in the year 1898, the Indian Automobile Industry has come a long way. During its early stages it was overlooked, but since the introduction of the liberalization policy, various tax reliefs by the Government of India and rapid growth in industrialization process in recent years, the automobile industry has made a remarkable growth. India is expected to become the worlds 7th largest automobile market by 2016 and third largest by 2030. Further, the total sales are expected to reach US$ 120 -160 Billion by 2016 and the investment requirement is estimated to be US$ 35-40 Billion. 1

During the year under review the Indian Automobile Industry recorded a remarkable production growth of 27%, as compared to the last year. The industry produced around 18 Million vehicles of which share of two wheelers were 75%, passenger vehicles - 17 %, three wheelers and commercial vehicles - 4% each. 2

In this backdrop, your Company has achieved a 36% growth in the Annual Sales, which is much above the industry growth, by clocking the sales of Rs.8,609 Million during the year under review ended March 31, 2011, as compared to Rs. 6,342 Million in the previous year.

During the year under review, Lumax has posted Earnings before Depreciation Interest and Tax (EBDITA) of Rs. 571.41 Million for the year ended March 31, 2011 as against Rs. 517.56 Million in the previous year, an increase of 10% as compared to the previous year and Profit After Tax (PAT) of Rs. 179.73 Million as compared to the Profit After Tax (PAT) of Rs. 59.27 Million during the previous year, registering a tremendous growth of 203%.

During the year under review, your Company has laid foundation for construction of a new ultra modern manufacturing plant at Bawal, Haryana at an estimated cost of about Rs.800 million to meet the increasing demand for supply of high volume auto lightings for one of its existing top customer - Maruti Suzuki, as some of the existing plants are facing capacity constraints. The said plant is expected to start commercial production by January 2012.

Further, your Company is also in the process of setting up new plant at Bidadi, Bangalore for supply of auto lighting and other components for the Small Car of Toyota - Etios and the said facility is expected to become operational by the next year. Till then your company has set up a new small assembly facility in Bidadi, Bangalore and started supplying to this customer. Further, due to low volumes of Nano Car productions, your Company has delayed the commencing of production from the Nano Plant, Sanand, Gujarat, after a string of negotiations in relation with the investment in Singur, West Bengal.

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

RECOGNITION AND AWARDS

Your Company believes that the journey of excellence is a never ending one but it begins with Quality. Quality initiatives are all pervasive encompassing each and every process throughout the organization, leading to excellence. As a result of which the Company has received the following awards and recognitions from Customers and other Agencies during the year under review:

Rs. Got 90% marks in the "Annual Vendor System Audit" by Maruti Suzuki India Ltd in 2010-11, as against 85% last year.

Rs. Won Silver Award for "Manufacturing Excellence" from Automotive Components Manufacturer Association (ACMA).

Rs. Won Golden Trophy in QCC Competition organised by Quality Circle Forum of India - Delhi Chapter.

Rs. Won First prize in poster competition in QCC Competition organised by Quality Circle Forum of India - Delhi Chapter.

Rs. Won "Winner Award (GOLD TROPHY)" in the 23rd Preliminary QC Circle Competition Organized by Confederation of Indian Industry (CII).

Rs. Won Silver Award in the 21st Chapter Convention QC Circle Competition Organized by Quality Circle Forum of India - Delhi Chapter.

Rs. Received Certificate from Maruti Suzuki India Ltd. (MSIL), recognizing efforts and superior performance of the Company in the field of Design and Development

Rs. Received Certificate of Appreciation from International Centre for Automotive Technology (ICAT).

DIRECTORS

In accordance with the Articles of Association of the Company and the Companies Act 1956 Mr Anmol Jain Mr M C Gupta Mr Makio Natsusaka and Mr A P Gandhi Director(s) are retiring by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The term of Mr D K Jain as Chairman & Managing Director and Mr Anmol Jain as Sr Executive Director is expiring accordingly the Board recommends to re-appoint them as Whole-time Directors with respective Designations subject to the approval of the members in the ensuing Annual General Meeting.

Further the previous tenure of Mr Deepak Jain as Sr Executive Director expired on 31-01-2011 Hence the Board re-appointed Mr Deepak Jain as Sr Executive Director for a further period of 5 years we f 01-02-2011 in its meeting dated 29-01-2011 subject to the approval of the members in the ensuing Annual General Meeting.

Your Directors recommend the re-appointment of the above 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 2011 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 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 S.R. Batliboi & Associates, Chartered Accountants 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 members in the ensuing Annual General Meeting.

The explanations of your Board of Directors on the Auditors observations as contained in their report, read with the relevant notes to accounts are as follows.

(i) With reference to the observation in Para (v) (b) to the Annexure of their Report in respect of transactions exceeding

Rs. 5 Lacs in which comparable prices are not availaible, it is explained that the nature of these transactions covers under two categories viz. (a) Designing and Development of Tools, Moulds and (b) Specialized Nature of Raw Material, Semi Finished and Finished Products.

(a) Designing and Development of Tools, Moulds

The Tools and Moulds etc. are of specialized nature of products which needs to be designed and developed with specialized knowledge and skill as per the Customer specifications and requirements. The specifications provided by Customer for designing and development of Tools are of a Confidential Nature and having immense Intellectual property value. Therefore, the Company arranges the Designing and development of Tools with the Technical Support and Guidance from its Collaborator M/s Stanley Electric Co. Ltd and its associates. In some cases, the Tool designing and its development is also undertaken by Vendors which transactions are not pursuance of such contracts and arrangements as referred to in Para (v) (b) to the Annexure of the Audit Report.

In all these cases the Company need to share the Technical Specification and Other Information of Customer which is of immense Intellectual Property Value with the Vendor which can only be done after entering into Legally binding Contracts which includes Confidentiality Agreements also, with the respective Vendor. These Vendors are finalised after due Financial and Technical Assessment of their capability to execute the job. In view of this background, it is not possible for the Company to share the Customers Information/specifications with alternate vendors only for the purpose of arranging comparable quotes/prices.

(b) Raw Material, Semi Finished and Finished Products

In most of these cases, the Company procures the raw material and components from the Vendors after supplying Tools, Moulds, Jigs Dies for its manufacturing and some of the items purchased are of a specialized and unique nature for which no alternate sources of supply availaible to enable comparison of prices. Further such Vendors are also defined/approved by our Customer(s), to whom the Company supplies the Final Product. As these raw material and components are of specialized and unique nature and its comparable market prices are not availaible.

(ii) With reference to the observations of the Auditor in Para (ix) (a) to the Annexure of their Report regarding slight delay in deposit of Statutory Dues, it is informed that the said dues have since been paid.

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.

MATERIAL CHANGES AND COMMITMENTS

No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2011 and the date on which this Report has been signed.

CORPORATE SOCIAL RESPONSIBILITY

The Company actively takes part in Corporate Social Responsibility (CSR) programmes, from time to time, in order to create value for all stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at large etc.

The Companys CSR scheme is underpinned by the principles of Ethics, Transparency and Accountability. Your company does not engage in business practices that are abusive, unfair, corrupt or anti-competitive.

Depending upon the core competency and business interest, the Company aims to undertake activities for social development of communities and geographical areas, particularly in the vicinity of their operations. These operations may vary from education, skill building for livelihood of people, health, cultural and social welfare etc.

The Corporate Social Responsibility (CSR) program is an integral part of the way the Company conducts its business.

Last year your Company started the programme of "Nanhi Chhaan", which is fostered by Confederation of Indian Industry (CII) for promoting the girl child amongst general population and to promote communitys involvement in aforestation drive. The programme has gained considerable popularity and credibility for its tremendous contribution to the society.

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 Earning and Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is annexed separately as Annexure - B.

GROUP

Pursuant to the intimation from the Promoters, the names of the Promoters and entities comprising Group are disclosed in the Annual Report as Annexure C, for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

CORPORATE GOVERNANCE

The report on Corporate Governance together with the Auditors 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 - D.

PARTICULARS OF EMPLOYEES

Information of 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. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are 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 Vice President (Legal) and Company Secretary at the registered office of the Company.

ACKNOWLEDGEMENT

It is our strong belief that caring for our business constituents has endured our success in the past and will do so in future. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator- M/s Stanley Electric Co. Ltd., Japan, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for their continued support and patronage.

The Board would also like to acknowledge the co-operation & commitment rendered by all the associates & 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 27, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors are pleased to present the 29th Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

Your Companys performance during the year as compared with the previous year is summarized below :

Rupees in Million

Particulars 2009-10 2008-09

Net Sales 6,341.54 5,230.82

Profit before Interest and Depreciation 517.56 278.27

(-) : Financial Expenses 113.20 92.46

(-) : Depreciation/Amortisation/ Impairment Loss 340.54 222.25

Profit Before Tax (PBT) 63.82 (36.44)

(-) : Provision for Tax 4.55 (20.25)

Profit After Tax (PAT) 59.27 (16.19)

(+) : Balance of Profit brought forward 28.37 55.50

Balance Available for Appropriation 87.64 39.31 Appropriations

Dividend 28.04 9.35

Corporate Dividend Tax 4.66 1.59

Transfer to General Reserve 6.00 -

Balance Carried to Balance Sheet 48.94 28.37

Dividend (%) 30 10

Basic and Diluted Earning Per Share (EPS)(Rs.) 6.34 (1.73)

DIVIDEND

Keeping in view of the philosophy of the Company to reward its shareholders and to continue the tradition of recommending dividend for the last 25 years, your Directors are pleased to recommend a Dividend of 30% (Rs.3/- per Equity Share) for the Financial Year 2009-2010 as against 10% for the corresponding last year. The total amount of Dividend proposed to be distributed and tax thereon aggregates to Rs. 32.70 Million (including Dividend Tax) as against Rs.10.94 Million.

A sum of Rs. 6.00 million have been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.

BUSINESS PERFORMANCE

The global financial crises in the auto industry, which began during the latter half of 2008, was also aggravated by the substantially more expensive auto fuels linked to the 2003-08 oil crises . The related credit crunch put a lot of pressure on raw material prices, and their availability. But once again, India came up triumphant. The country and auto industry weathered the storm of the worst financial crisis with a lot of courage, determination and sound government policies. The stage now looks set for bigger and better things in the coming decade, and more.

During the year 2009-10, the recovery in the automobile sector in India was remarkably, quick and sharp. It was aided by a fairly diverse set of factors, including fiscal stimulas. The recovery in the automobile sales has been phenomenal in several aspects. It has been broad based, with all segments recovering, including heavy commercial vehicles, which was affected the most and was the last to see sales pick up. The recovery has also been quick and sharp with sales taking less than a year to revert to the trend line. This has been unprecedented in comparison to the previous downturns, where the trough in sales lasted for a few years. The same is evident from the fact that the Automobile Production has increased from 11.17 million vehicles to 14.04 million vehicles during the year 2009-10, registering an increase of 25.75% as compared to previous year and the Automobile Domestic Sales increased from 9.72 million vehicles to 12.29 million vehicles during the year 2009-10, registering an increase of 26.41% as compared to previous year. (Source: SIAM)

As your Companys business is directly dependent on the Original Equipment Manufacturer(s) of Automobiles (OEMs), consequently, in this background, during the year under review your Company has achieved a 21.23 percent growth in the Annual Sales by clocking the sales of Rs.6,341.54 million as compared to Rs. 5,230.82 million in the previous year ended March 31, 2009.

Your Company posted Earnings Before Depreciation, Interest and Tax (EBDITA) of Rs.517.56 Million for the year ended March 31st 2010 as against Rs.278.27 million in the previous year an increase of 86% as compared to the previous year.

Your Directors are pleased to inform you that as compared to Loss of Rs. 16.19 million during the previous year, your company has posted a Profit After Tax of Rs. 59.27 million. The improvement on margins was accomplished through better sales realizations, effective cost rationalization measures which included better control over the material cost and overheads cost, apart from the sharp focus on operational efficiencies.

Further, pursuant to completion of negotiations with customer in relation with the companys investment in a plant in Singur, West Bengal and after giving consideration to its alternative plans, your Company has assessed the carrying value of its assets and made adequate provisions as considered necessary.

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

RECOGNITION AND AWARDS

Your Company’s commitment on continuous improvement in quality and TQM practices is being recognized and appreciated by the Customers, as a result of which the Company has received the following awards and recognitions from Customers and other Agencies during the year under review :

- Silver Trophy for “Manufacturing Excellence” from ACMA.

- “Tier - 2 Upgradation” Award by Maruti Suzuki India Ltd.

- Best Product Development Award by Mahindra & Mahindra.

- Dharuhera Unit got 85% marks in Annual Vendor System Audit by Maruti Suzuki India Ltd in 2009-10 against 81% marks in the last year.

- Vendor performance Award by Maruti Suzuki India Ltd.

- “Golden Leaf Award for ECO Profit” by Society for enhancing sustainability and value of organisation.

- Quality Award for Zero PPM from Toyota Kirloskar.

- Participation Award from Hero Honda Motors Ltd for implementation of Green Vendor Development Programme.

DIRECTORS

In accordance with the Articles of Association of the Company and the Companies Act, 1956, Mr. Deepak Jain, Mr. Gursaran Singh, Mr. Suman Jyoti Khaitan and Mr. D.D. Gupta, Directors are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

Mr. Deep Kapuria, Independent Director on the Board of the Company since, July 2002 has resigned from the position of Independent Director due to his other commitments and his resignation was accepted by the Board in its meeting held on May 22, 2010.

The Board places on record its sincere appreciation and gratitude for the valuable guidance received from Mr. Deep Kapuria during his tenure as Independent Director on the Board of your company.

The Board of Directors has appointed Mr. Rattan Kapur, as an Additional Director on the Board of the Company, who is an Independent Director, at their meeting held on May 22, 2010. He has done his Graduation in Commerce from Delhi University and started his professional career as an Entrepreneur in the year 1977 by establishing a auto component manufacturing unit. In the year 1993, Mr. Rattan Kapur promoted Mark Exhaust Systems Limited (MESL) in Joint Venture with Maruti Suzuki India Limited.

Mark Exhaust Systems Ltd. is one of the major OEM suppliers of Exhaust Systems, Catalytic Convertor and Door Assemblies.

Mr. Rattan Kapur has also held the position of the President of the Honda Siel Suppliers Club from the year April 2003 to March 2004 and Deputy Chairman of the Automotive Component Manufacturers Association (ACMA) Northern Region (2009-2010). Presently, he is the Managing Director of Mark Exhaust Systems Ltd.

In accordance with the Articles of Association of the Company and the Companies Act, 1956, Mr. Rattan Kapur will hold office till the ensuing Annual General Meeting. The Company has received a Notice in respect of Mr. Rattan Kapur, from a member under Section 257 of the Companies Act, 1956 proposing his appointment as Director of the Company liable to retire by rotation. The Board recommends his appointment for the approval of members in the ensuing Annual General Meeting.

Your Directors recommend the re-appointment and appointment of the above 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 31st March, 2010, 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 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 S.R. Batliboi & Associates, Chartered Accountants 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 members in the ensuing Annual General Meeting.

The explanations of your Board of Directors on the Auditors observations as contained in their report, read with the relevant notes to accounts are as follows.

(I) With reference to the observation in Para (v)(b) to the Annexure of their Report in respect of transactions exceeding Rs. 5 Lacs in which comparable prices are not available, it is explained that the nature of these transactions covers under two categories viz.(a) Designing and Development of Tools, Moulds and (b) Specialized Nature of Raw Material, Semi Finished and Finished Products.

(a) Designing and Development of Tools, Moulds

The Tools and Moulds etc are of specialized nature of products which needs to be designed and developed with specialized knowledge and skill as per the Customer specifications and requirements. The specifications provided by Customer for designing and development of Tools are of a Confidential Nature and having immense Intellectual Property Value. Therefore, the Company arranges the Designing and development of Tools with the Technical Support and Guidance from its Collaborator Stanley Electric Co., Ltd. and its associates. In some cases, the Tool designing and its development is also undertaken by Vendors which transactions are not in pursuance of such contracts and arrangements as referred to in Para (v)(b) to the Annexure of the Audit Report.

In all these cases the Company need to share the Technical Specification and Other Information of Customer which is of immense Intellectual Property Value with the Vendor which can only be done after entering into Legally binding Contracts which includes Confidentiality Agreements also, with the respective Vendor. These Vendors are Finalised after due Financial and Technical Assessment of their capability to execute the job. In view of this background, it is not possible for the Company to share the Customers Information/Specifications with alternate vendors only for the purpose of arranging comparable quotes/prices.

(b) Raw Material, Semi Finished and Finished Products

In most of these cases, the Company procures the raw material and components from the Vendors after supplying, Tools, Moulds, Jigs Dies for its manufacturing and some of the items purchased are of a specialized and unique nature for which no alternate sources of supply available to enable comparison of prices. As these raw material and components are of specialized and unique nature and its comparable market prices are not available.

(II) With reference to the observations of the Auditor in Para (ix) (a) to the Annexure of their Report regarding slight delay in deposit of Statutory Dues, it is informed that the said dues have since been paid.

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.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2010 and the date on which this Report has been signed.

CORPORATE SOCIAL RESPONSIBILITY

Behaving responsibly and contributing to the communities in which we operate is an essential part of our heritage. The Corporate Social Responsibility (CSR) programs is an integral part of the way the Company conducts its business.

Your Company has adopted the concept of “Nanhi Chhaan” across all facilities around August 2009, promoted by Confederation of Indian Industry (CII) for promoting the girl child amongst general population, reinforcing the sentiment of cherishing and being proud of parenting a girl and to promote community’s involvement in aforestation drive, thereby impacting the environment through extended green coverage with people participation.

Under the campaign “Nanhi Chhaan” your Company has designated an area in each of the facilities and shall be used for this purpose. A banner shall be put to highlight the area with the message of “LUMAX KI NANHI CHHAAN”. Whenever a girl child is born in the Lumax family, a plant sapling shall be planted in her name by the respective parent of the child together with the Plant Head of that facility. The sapling shall further have a plate bearing the name of the child, the parents name and the date of birth. Outside the area there shall be a board having the “Lumax Ki Nanhi Chhaan count till date ___”, which will help any person to gauge the number of saplings planted till date.

Further, a Free Charitable Dispensary has been organized up by the Company for providing Free Checkup and medication, a doctor has been appointed and available for check ups. A Free eye check – up and Cataract Operation Camp are also being organized under these programs.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis 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 Earning and Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is annexed separately as Annexure – B.

GROUP

Pursuant to the intimation from the Promoters, the names of the Promoters and entities comprising Group are disclosed in the Annual Report as Annexure C, for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

CORPORATE GOVERNANCE

The report on Corporate Governance together with the Auditors 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 – D.

PARTICULARS OF EMPLOYEES

Information of 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. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are 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 Vice President (Legal) and Company Secretary at the registered office of the Company and the same is also available for inspection in accordance with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956.

ACKNOWLEDGEMENT

It is our strong belief that caring for our business constituents has endured our success in the past and will do so in future. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator- M/s Stanley Electric Co. Ltd., Japan, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for their continued support and patronage.

The Board would also like to acknowledge the co-operation & commitment rendered by all the associates & 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 : June 22, 2010 Chairman & Managing Director

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