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Directors Report of SML Isuzu Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present their thirty-first Annual Report together with audited financial statements for the financial year ended 31st March 2015.

PERFORMANCE REVIEW

The Indian economy witnessed a modest recovery in the year with lower fiscal and current account deficit, slowing inflation, lowering interest rates and weak commodity prices, particularly oil. It was hoped that the new initiatives on reforms and economic management would give considerable push to the industrial economy and business sentiment but the change was only marginal as reflected in the GDP growth to 7.3% from 6.9%. However, none of these assisted demand for commercial vehicles, which declined 1.3%. Sales volume in 5-12 ton GVW segment, in which the Company principally operates, remained virtually static. However, happily, your Company was able to achieve higher sales, at 11759 vehicles against 9760 in the previous year.

The financial performance of the Company, for the year ended 31st March, 2015 is summarized below:

(Rs. in Crores)

2015 2014

Sales volume (No. of vehicles) 11759 9760

Net revenue 1,114.34 885.99

Less : material cost & other expenses 1,040.00 849.58

Operating profit 74.34 36.41

Profit before tax 48.74 17.71

Profit after tax 36.94 17.40

Balance of profit from prior years 103.28 92.70

Surplus available for appropriation 140.22 110.10

Transfer to General Reserve 3.70 1.74

Proposed dividend (including tax) 10.45 5.08

Amount carried to Balance Sheet 126.07 103.28

DIVIDEND

The Directors have recommended payment of dividend of Rs. 6.0 per equity share of face value of Rs. 10 each for the year ended 31st March, 2015 (previous year - Rs. 3.0 per equity share ) amounting to Rs. 10.45 crores (previous year - Rs. 5.08 crores), including dividend distribution tax of Rs. 1.77 crores (previous year - Rs. 0.74 crores).

MANAGEMENT DISCUSSION AND ANALYSIS

A Management Discussion and Analysis, which also covers the state of the Company's affairs, forms a part of this report.

CORPORATE GOVERNANCE

A report on corporate governance together with the Auditors' Certificate confirming compliance with corporate governance norms, as stipulated in the Listing Agreements, forms a part of this report.

INDUSTRIAL RELATIONS

Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.

CREDIT RATING

The Company continues to enjoy the highest rating for short term borrowings, of A1 from ICRA reflecting the Company's financial prudence. Further, the long term rating for line of credit / cash credit limits has been upgraded from A to AA-.

SAFETY, HEALTH AND ENVIRONMENT

The Company continues to demonstrate strong commitment to safety, health and environment which have been adopted as core organizational values. The Company assures safety and audits its facilities in accordance with statutory and regulatory requirements.

Employees are continuously made aware of hazards / risks associated with their job and necessary training is imparted to update their knowledge and skill to meet any emergency. Regular medical and occupational check-ups of employees are conducted and eco-friendly activities are promoted.

Safe disposal of hazardous waste is ensured through an effluent treatment plant and an incinerator; a sewage treatment plant ensures eco-friendly disposal of sewage.

CURRENT BUSINESS ENVIRONMENT

High degree of optimism arising out of policy statements from a new stable government, most economists forecasting that the Indian economy is set for sustained growth with lower oil prices, some containment of inflation, stable financial and currency policy, has been somewhat belied so far. The expected growth in industrial, construction and mining sectors is still elusive. However, encouraged by replacement demand, an early resolution of the GST stalemate and a reasonable monsoon all together justify the growth forecast by the Society of Indian Automobile Manufacturers (SIAM) of 13-15% for medium & heavy vehicles and 3-5 % for low weight vehicles. Overall growth of commercial vehicle industry in the first quarter of the current year April-June, 2015 was reported at 6% (Domestic - 3.6% and Exports - 26.0%).

The Company registered sales volume growth of 5%, in the first quarter, 3810 (3629) vehicles, out of which passenger vehicle sale was 2766 (2749) and cargo trucks 1044 (880). Although the growth trend is expected to be maintained, that has to be seen in the light of prevailing uncertainty over enforcement of safety / emission regulations in respect of commercial vehicles.

On net revenue of Rs. 385.2 crores, the Company has earned profit after tax of Rs. 29.1 crores in the first quarter of the current year compared with Rs. 340.3 crores and Rs. 23.4 crores, respectively in the corresponding quarter last year.

In view of the foregoing comments, the Directors can look to a reasonable sales performance in the current year, but no more, with continuing emphasis on cost control and cash management.

The civil construction work in respect of the Company's capex project envisaging an outlay of Rs. 220 crores, as stated in the last Annual Report, for technology, product development and up-gradation, plant infrastructure to improve manufacturing efficiency commenced during the last quarter of financial year under review. Other work is also in progress.

DIRECTORS

Mr. Katsuya Okihiro tendered his resignation as Director of the Company in March, 2015. The Board, at its Meeting held on 27th March, 2015, recorded its deep appreciation for his valuable support and advice during his tenure.

Mr. Hiroshi Omino tendered his resignation as Director of the Company in July, 2015. The Board, at its Meeting held on 7th August, 2015, recorded its deep appreciation for his valuable support and advice during his tenure.

Mr. Masahiro Narikiyo was appointed as an Additional Director of the Company on 27th March, 2015 and holds office up to the forthcoming Annual General Meeting. The Company has received Notice under Section 160 of the Companies Act, 2013 proposing Mr. Narikiyo's appointment as a Director of the Company for consideration of the Members at the forthcoming Annual General Meeting.

Mr. Kimitoshi Kurokawa was appointed as an Additional Director of the Company on 7th August, 2015 and holds office up to the forthcoming Annual General Meeting. The Company has received Notice under Section 160 of the Companies Act, 2013 proposing Mr. Kurokawa's appointment as a Director of the Company for consideration of the Members at the forthcoming Annual General Meeting.

Mr. Masaki Nakajima retires by rotation and being eligible, offers himself for re-appointment.

Mr. Kyoichiro Takashima retires by rotation and being eligible, offers himself for re-appointment.

At the last Annual General Meeting of the Company, held in September 2014, the Members had approved the appointment of Mr. Hiroshi Omino and Mr. Kyoichiro Takashima as Non-Executive Directors, Mr. S.K.Tuteja, Mr. P.K. Nanda, Mr. A.K.Thakur, Mr. Sudhir Nayar and Dr. (Mrs.) Vasantha S. Bharucha as Independent Directors, Mr. Eiichi Seto as Managing Director & CEO, Mr. Gopal Bansal as Whole-time Director & CFO and Mr. Kei Katayama as Director - R&D.

All the independent Directors have given declarations to the Company that they meet the criteria of 'independence' set out in the Listing Agreements and the Companies Act, 2013.

KEY MANAGERIAL PERSONNEL (KMPs)

In terms of the applicable provisions of the Companies Act 2013, following were appointed as KMPs w.e.f. 1st April, 2014:

Name Designation

Mr. Eiichi Seto Managing Director & CEO

Mr. Gopal Bansal Whole-time Director & CFO

Mr. Parvesh Madan Company Secretary

No KMP has resigned or was newly appointed during the year.

NOMINATION AND REMUNERATION POLICY

Based on the recommendations of the Nomination and Remuneration Committee, the Board approved a Nomination and Remuneration Policy, which is attached as Annexure A.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 ('the Act') and the Listing Agreements. There were no material transactions made by the Company during the year that would have required shareholders approval under the Listing Agreements.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature.

The Company has adopted a policy to deal with related party transactions as approved by the Board of Directors. It is uploaded on the Company's website at web link: http://smlisuzu.com/Financials/RPTPolicy.aspx.

In terms of Section 134(3)(h) of the Companies Act, 2013, there are no transactions to be reported in Form AOC-2.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9 is attached as Annexure B.

MEETINGS OF THE BOARD

Five Board meetings were held during the year as detailed in the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee comprises three non-executive independent Directors, Mr. P.K. Nanda, as Chairman, Mr. A.K. Thakur and Mr. Sudhir Nayar, and one whole-time director, Mr. Gopal Bansal, Whole-time Director & CFO. All the recommendations made by the Audit Committee during the year were accepted by the Board.

PARTICULARS OF EMPLOYEES

The information as per Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. However, as per the provisions of Section 136 of the Act, the Report and Accounts are being sent to the members and others entitled thereto without the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. Any member interested in obtaining a copy thereof may write to the Company Secretary in this regard.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not given any loans, guarantees or made any investments during the year, which would be covered by Section 186 of the Companies Act, 2013.

AMOUNTS PROPOSED TO BE CARRIED TO RESERVES

The Company proposes to carry Rs. 3.70 crores to General Reserve for the FY 2014-15. (Previous year - Rs. 1.74 cores).

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

No adverse material changes have occurred or commitments made after 31st March, 2015 which may affect the financial position of the Company or require disclosure.

SUSTAINABILITY INITIATIVE

Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes initiatives to reduce consumption of electricity and water.

RISK MANAGEMENT

The primary objective of risk management is to protect the Company against risks to the value of the business, its capital and its continuity. In order to achieve the objective and for better governance, the Board has constituted a Risk Management Committee (RMC) comprising three independent Directors, one non-executive Director and the Whole-time Director & CFO.

RMC is entrusted with the functions, earlier overseen by the Audit Committee, of determining efficacy of risk management framework of the Company, evaluation of risks and mitigating measures. Based on its recommendations, the Company has adopted a formal Risk Management Policy.

The Policy sets out important areas of risk- financial risks (including risk to assets), legislative and regulatory risks, environmental risks (including natural disasters), operational risks (markets, production, technology, etc.), risks relating to employment and manpower, and individual large transactional risks. The Managing Director & CEO identifies and proposes action in respect of all risks through his management team as and when any are perceived or foreseen or inherent in operations; analyses these, and then reports to RMC for its review and guidance.

Pursuant to Section 135 of the Companies Act, 2013, your Directors have constituted Corporate Social Responsibility (CSR) Committee with two independent non- executive Directors, namely, Mr. S.K.Tuteja, as Chairman and Dr. (Mrs.) Vasantha S. Bharucha (w.e.f. 8th May, 2015), and two whole-time Directors namely Mr. Eiichi Seto, Managing Director & CEO and Mr. Gopal Bansal, Whole-time Director & CFO as its members. On its recommendation, the Board has adopted a Company policy on CSR with thrust areas of activities to include promoting healthcare and sanitation, supporting education of under privileged children / girl child, sponsoring vocational education for women and providing support to war widows and their dependents.

Annual Report on CSR activities for the year ended 31st March 2015 is attached as Annexure C.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreements, the Board has carried out an annual evaluation of its own performance and that of its Committees after seeking inputs from all the Directors and members of relevant Committees. The Board also carried out performance evaluation of each Director based on the evaluation carried out by the Nomination and Remuneration Committee (NRC).

The criteria for performance evaluation was set out by NRC and adopted by the Board. These included composition and structure of the Board and its Committees, effectiveness of the Committees, knowledge of the Company's operations by members, their participation at meetings including preparedness for issues for consideration, level of contributions in assessing and improving performance of the Company and interactions amongst themselves and with senior management. Adherence to code of conduct of the Company, fiduciary and statutory obligations, continuing maintenance of independence by independent Directors were a part of the performance evaluation.

The Board was satisfied with its composition and its diversified nature and that all Directors upheld highest standards of integrity and probity, adhered to Company's code of conduct, made constructive and effective contribution at meetings and generally carried out their responsibilities well in the interest of the Company and its stakeholders.

A separate meeting of independent Directors was held to review the performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman of the Company, taking into account the views of other Directors. That review was most satisfactory.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the year.

SHARE CAPITAL

There was no change in the Company's issued, subscribed and paid-up equity share capital during the year.

DEPOSITS

The Company has not accepted deposits under Chapter V of the Companies Act, 2013.

SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY'S OPERATIONS

To the best of our knowledge, the Company has not received any such orders from regulators, courts or tribunals during the year which may impact the going concern status of the Company or its operations in future.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) and the Rules there under. The Policy aims to provide protection to women at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment. The Company has also constituted an Internal Complaints Committee in accordance with the Act, to inquire into complaints and recommend appropriate action.

During the year, the Company has not received any complaint of sexual harassment.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a whistle blower policy, to provide formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. It provides for adequate safeguards against victimization of employees who avail of the mechanism and provides for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of the Company is available on the Company's website at web link : http://smlisuzu.com/Financials/ WhistleBlowerPolicy. aspx

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;

(ii) they 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 of the Company for that period;

(iii) they 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) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

Based on the work performed by the internal, statutory and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, the Directors are of the opinion that the Company has in place, adequate internal financial controls with reference to financial statements, commensurate with the size and nature of the business of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of the programme of familiarisation with the Company for independent Directors in respect of their roles, rights & responsibilities, nature of the industry in which Company operates, business model of the Company and related matters are put up on the website of the Company at web link http://smlisuzu.com/Financials Familiarisation Programme.aspx.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s A. Arora & Co., a firm of Company Secretaries in practice, to undertake the Secretarial Audit of the Company for FY 2014-15.

The Secretarial Audit Report does not contain any qualification and is attached as Annexure D.

STATUTORY AUDITORS

B S R & Company, which was appointed statutory auditors of the Company, at the last Annual General Meeting held in September 2014, and which is a part of the network B S R Affiliates has expressed its inability to continue as statutory auditors of the Company after the ensuing Annual General Meeting of the Company. B S R & Associates LLP, which is a part of the same network, viz. B S R Affiliates, has expressed its willingness to be appointed as the statutory auditors of the Company after the ensuing Annual General Meeting of the Company.

As required under the provisions of Section 139(1) of the Companies Act, 2013 (the Act), the Company has received written consent from B S R & Associates LLP for its appointment and a certificate to the effect that its appointment, if made, would be in accordance with the Act and the Rules framed thereunder and that it satisfies the criteria provided in Section 141 of the Act.

The notes on Financial Statements referred to in the Auditor's Report are self explanatory and do not call for any further comments.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in the Companies Act, 2013 is attached as Annexure E.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

S.K. TUTEJA EIICHI SETO Dated : 07 August 2015 Chairman Managing Director & CEO


Mar 31, 2014

Dear Members,

The Directors are pleased to present their Thirtieth Annual Report together with audited Financial Statements for the financial year ended 31st March 2014.

PERFORMANCE REVIEW

The report of the Directors for 2013 foresaw no major improvement in the economy which might give confidence for a recovery in demand for the Company''s products. In the event, the pace of slowdown continued with GDP growth falling to under 5%, the commercial vehicle industry inevitably suffered further falls in demand, of as much as 19% in the year under review with volumes falling to 709,800 vehicles from 873,200. The 5-12 ton GVW category, in which the Company principally operates, also declined by 15% to 100,200 from 118,100. In this backdrop, Company''s sales volume suffered a drop of 19% with devastating effect on profitability, even though highly inflationary pressures on costs, particularly wages, were almost totally offset by large savings in financial costs.

The financial performance of the Company, for the year ended 31st March, 2014 is summarized below:

(Rs. in Crores) 2014 2013

Sales Volume (Nos.) 9760 12045

Net Revenue 885.99 1,011.06

Less:Material Cost & Other Expenses 849.58 931.78

Operating Profit 36.41 79.28

Profit Before Tax 17.71 48.49

Profit After Tax 17.40 36.43

Balance of Profit from Prior Years 92.70 73.45

Surplus available for Appropriation 110.10 109.88

Transfer to General Reserve 1.74 3.64

Proposed Dividend (including tax) 5.08 13.54

Amount carried to Balance Sheet 103.28 92.70

DIVIDEND

The Directors have recommended payment of dividend @ 30% (Rs. 3.0 per share) for the Financial Year 2013-14 (80% in 2012-13).

MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE

A Management Discussion & Analysis Report is annexed to this report. A report on Corporate Governance together with the Auditors'' Certificate confirming compliance of Corporate Governance norms also forms part of this Annual Report.

INDUSTRIAL RELATIONS

Industrial Relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.

CREDIT RATING

The Company continues to enjoy the highest rating for short term borrowings, of A1 from ICRA reflecting the Company''s financial prudence.

PARTICULARS OF EMPLOYEES

The Company had 7 employees who were in receipt of remuneration of not less than Rs.6,000,000 during the year ended 31st March, 2014 or not less than Rs. 500,000 per month during any part of the said year.

A statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this report. However, as per the provisions of Section 219(1)(b)(iv), this statement, is not being sent to the shareholders with this report and the accompanying accounts. Members who wish to receive a copy may write to the Company Secretary at the Registered Office of the Company.

SAFETY, HEALTH AND ENVIRONMENT

The Company continues to demonstrate strong commitment to safety, health and environment. These aspects have been adopted as core organizational value of the Company.

Employees are continuously made aware of hazards / risks associated with their job and necessary training is imparted to them to update their knowledge and skill to meet any emergency.

The Company carries out statutory safety assurance and audits its facilities as per legal requirements. Regular medical and occupational check-up of employees are conducted and eco-friendly activities are promoted.

The Company has incinerator plant for safe disposal of hazardous waste and a sewage treatment plant ensures eco-friendly disposal of sewage.

CURRENT BUSINESS ENVIRONMENT

From all reports the national economy may have seen the worst behind it with slow resumption of growth, even though industrial indicators are still somewhat lackluster. The overall outlook, not least arising from the strong mandate delivered to the newly elected Government promising political stability and decisive industrial and fiscal policies, lends hope to an early revival of the commercial vehicles industry.

The Company is fully prepared to take advantage of the revival and with new and improved products it looks forward to sharing in sustained growth of the commercial vehicle industry, even though it may be gradual.

An enhancement in the in-house production of bus bodies as a result of completion of the facilities added as a part of the earlier reported expansion project, together with much improved vendor supplies, led to sale of passenger vehicles increasing to 2,749 in the first quarter, April-June, 2014 from 2,271 in the corresponding quarter of previous year. The seasonal demand for school buses was a major contributor. Cargo vehicles, however, fell short - 880 against 924 - reflecting the poor industrial growth. This product mix alongwith better per vehicle realization has enabled net revenue of Rs 340.3 crores and profit after tax of Rs 23.4 crores compared with Rs.10.2 crores in the corresponding quarter last year.

The Board has approved a capex plan envisaging an outlay of Rs. 220 crores to be implemented over next three years towards substantial technology and product up-gradation, development of products/ variants and on plant infrastructure to improve manufacturing efficiency.

DIRECTORS

Mr. Yutaka Watanabe decided to demit office of Managing Director & CEO with effect from 25th December 2013. The Directors placed on record their deep sense of appreciation of his strong and inspirational leadership as Managing Director & CEO, and his outstanding contribution to the Company.

Mr. Eiichi Seto, who joined the Board as non-executive Director in May 2010, was appointed Managing Director & CEO of the Company for a period of 5 years with effect from 26th December 2013, subject to approval of shareholders of the Company in General Meeting and of the Central Government.

Mr. Yasuyuki Niijima tendered his resignation as Director of the Company in October, 2013. The Board, at its Meeting held on 11th November, 2013, placed on record its deep appreciation for his valuable support and advice during his tenure.

Mr. Hiroshi Omino was appointed as an Additional Director of the Company on 11th November, 2013 and holds office up to the forthcoming Annual General Meeting. The Company has received Notice u/s 160 of the Companies Act, 2013 proposing Mr. Omino''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

Mr. Kyoichiro Takashima was appointed as an Additional Director of the Company on 11th February, 2014. The Company has received Notice u/s 160 of the Companies Act, 2013 proposing Mr. Takashima''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

Mr. Gopal Bansal was appointed as an Additional Director and Whole-time Director on 11th February, 2014 on the Board designated as Whole-time Director & CFO, for 5 years, subject to the approval of the Shareholders of the Company in the General Meeting. The Company has received Notice u/s 160 of the Companies Act, 2013 proposing Mr. Bansal''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

Mr. Yuji Kosaka tendered his resignation as Director-R&D effective 18th June 2014. The Board, at its Meeting held on 8th August, 2014, placed on record its appreciation for his contribution for development of new products during his tenure.

Mr. Kei Katayama was appointed as an Additional Director and Whole-time Director on 8th August, 2014 on the Board designated as Director-R&D, for 3 years, subject to the approval of the Shareholders of the Company in the General Meeting and of the Central Government. The Company has received Notice u/s 160 of the Companies Act, 2013 proposing Mr. Katayama''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

The Board, on the recommendation of Nomination & Remuneration Committee, has proposed the appointment of Dr. (Mrs.) Vasantha S. Bharucha, a Ph.D. in Economics, having experience of 45 years in areas such as Economics, Strategy Planning, Fiscal Policy, etc. as an independent Director of the Company for five years in the forthcoming Annual General Meeting.

Mr. K. Okihiro and Mr. Pankaj Bajaj are the Directors retiring by rotation at the forthcoming Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible corporate citizen, the Company has always strived to maintain the highest standards of social responsibility, governance, safety and environmental performance. Pursuant to Section 135 of The Companies Act, 2013, your Directors have constituted Corporate Social Responsibility Committee (CSR) with three Directors, namely, Mr. S.K. Tuteja, Non Executive Independent Director as Chairman, Mr. Eiichi Seto, Managing Director & CEO, and Mr. Gopal Bansal, Whole-time Director & CFO, as Members.

It will formulate and recommend to the Board a CSR Policy and under that the activities to be undertaken, amounts to be spent and monitoring implementation thereof.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of provision of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that :

i) In the preparation of annual accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) 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 true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

iii) 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 safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared annual accounts on a ''going concern'' basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.

A report required under the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 is annexed to this Report.

COST AUDIT

On the stipulation of the Central Government, Cost Audit of the Company for financial year 2013-14 is being conducted by Messers ABS & Associates, Cost Accountants.

AUDITORS

B S R & Company, Chartered Accountants, retires as Auditors of the Company and has given its consent for reappointment. As required under the provisions of Section 139(1) of the new Companies Act ("the Act"), the Company has received a written consent from the above Auditors for their appointment and a Certificate, to the effect that their re-appointment, if made, would be in accordance with the Act and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Act.

In respect of suggestion made by the Auditors in the annexure to their Report at Para (iv), the Management has already taken steps to strengthen internal control procedures in respect of purchase of inventories and fixed assets and the observation at para (ix) (a), when read with relevant note in the Notes to the Financial Statements, is self explanatory.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

S.K. TUTEJA EIICHI SETO Dated : 08 August 2014 Chairman Managing Director & CEO


Mar 31, 2013

The Directors are pleased to present their Twenty Ninth Annual Report together with Audited Accounts for the financial year ended 31st March 2013.

PERFORMANCE REVIEW

The Directors had stated in the performance review last year that a slowdown in manufacturing seemed almost inevitable with the economic data that was emerging. In the event, the year under review saw a much deeper slowdown in the Indian economy with its consequential impact on the commercial vehicle industry. After an impressive performance over the period 2008-09 to 2011-12 with compounded annual growth of 28% and volume reaching 902,000 vehicles, the industry suffered a decline of 3.2% in the year under review. Unfortunately, the decline was even higher at 7.2% in the 5-12 ton GVW category in which the Company mainly operates - 118,100 vehicles from 127,300 in 2011-12. This magnitude of the drop has adversely impacted both revenue and profit even though several measures taken in anticipation of the downturn arrested a sharper decline in profits.

The financial performance of the Company, for the year ended 31st March, 2013 is summarized below:

(Rs. in Crores)

2013 2012

Sales Volume (Nos.) 12045 13646

Net Revenue 1,011.06 1,042.22

Less : Material Cost & Other Expenses 91.78 956.19

Operating Profit 79.28 86.03

Profit Before Tax (before exceptional & prior period item) 48.49 64.96

Exceptional & prior period item 4.88

Profit After Tax 36.43 41.87

Balance of Profit from Prior years 73.45 49.22

Surplus available for appropriation 109.88 91.09

Transfer to General Reserve 3.64 4.19

Proposed Dividend (including tax) 13.54 13.45

Amount carried to Balance Sheet 92.70 73.45

DIVIDEND

The Directors have recommended payment of dividend @ 80% (Rs. 8.0 per share) for the Financial Year 2012-13, at the same level as the previous year.

MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE

A Management Discussions & Analysis Report is annexed to this report. A report on Corporate Governance together with the Auditors'' Certificate confirming compliance of Corporate Governance norms also forms part of this Annual Report.

INDUSTRIAL RELATIONS

Industrial Relations and work atmosphere remained cordial throughout the year. The Company has ensured sustained communication and engagement with workforce through various forms.

CREDIT RATING

The Company continues to have the highest rating, for short term borrowings, of A1 from ICRA. Highest credit rating reflects the Company''s strong financial discipline & prudence.

PARTICULARS OF EMPLOYEES

The Company had 5 employees who were in receipt of remuneration of not less than Rs.60,00,000 during the year ended 31st March, 2013 or not less than Rs. 5,00,000 per month during any part of the said year.

A statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report, together with Accounts, is being sent to the Shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Act. Members desiring to have a copy of the same, may write to the Company Secretary at the Registered Office of the Company.

SAFETY, HEALTH AND ENVIRONMENT

The Company continues to demonstrate strong commitment to safety, health and environment. These aspects have been adopted as core organizational value of the Company.

Employees are continuously made aware of hazards / risks associated with their job and necessary training is imparted to them to update their knowledge and skill to meet any emergency situation.

The Company carries out statutory safety assurance and audits its facilities as per legal requirements. Regular medical and occupational check-up of employees are conducted and eco-friendly activities are promoted.

The Company has incinerator plant for safe disposal of hazardous waste and a sewage treatment plant ensures eco-friendly disposal of sewage.

CURRENT BUSINESS ENVIRONMENT

Your Directors feel that currently there are no signs of any major improvement in macro-economic indicators which may reverse, or even arrest the declining trend for the Commercial Vehicle industry. It continues to bear the brunt of lower cargo availability, reduced Government expenditure, restrictive measures on mining in some states and continuation of tight monetary regime. Industry performance during April-June, 2013 quarter has further suffered with a 10% volume drop compared with the corresponding period last year. Under such conditions, on a sale volume of 3195 (3257) vehicles, during this quarter, the Company recorded a net profit of Rs. 10.2 crores (Rs. 12.2 crores).

In the above background, despite certain policy announcements for improving the economy, the Directors do not foresee that markets for the Company''s products will substantially increase. With efforts made in recent months to launch some improved products and further tightening of control over expenditure and cash resources, they hope that profitability will suffer the minimum effect. In these circumstances, it is given that the Company - and indeed the whole commercial vehicle industry will face pressure on margins. Product development has continued so that some of these adverse effects are mitigated, particularly over the longer term.

DIRECTORS

The Board reports with great regret the sad demise on 3rd March of this year of Mr. Harkirat Singh, who was an independent Director of the Company since 1991. He had played a constructive role at the Board, which at its Meeting on 7th May, 2013, placed on record its deep appreciation of the invaluable counsel and services rendered by Mr. Harkirat Singh.

Mr. R.P. Sehgal, who joined the Company in 2004 as Executive Director-Works and was appointed a Whole-time Director in 2010, completed his tenure of three years on 31st May, 2013. His tenure was marked by his involvement in setting up new facilities for enhancing manufacturing capacity including the new bus body plant for state-of-the- art ultra luxury buses. The Board has placed on record its deep appreciation for the outstanding contribution and distinguished services rendered by him to the Company. Directors and all his colleagues in the Company wish him and his family all the best for the future.

Mr. Masao Tabuchi tendered his resignation as Director of the Company in April, 2013 on his appointment in a new position in his Company. While regrettably accepting his resignation, the Board, at its Meeting held on 7th May, 2013, placed on record its deep appreciation for his valuable guidance and advice during the period of his association with the Company.

Mr. Kenji Iida tendered his resignation as Director of the Company in April, 2013. The Board, at its Meeting held on 7th May, 2013, took note of the same and placed on record its deep appreciation for the valuable contributions made by him during the period of his association with the Company.

Mr. Masaki Nakajima was co-opted as a Director of the Company on 7th May, 2013 and holds office upto the forthcoming Annual General Meeting. The Company has received Notice u/s 257 of the Companies Act, 1956 proposing Mr. Nakajima''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

Mr. Yasuyuki Niijima was co-opted as a Director of the Company on 7th May, 2013 and holds office upto the forthcoming Annual General Meeting. The Company has received Notice u/s 257 of the Companies Act, 1956 proposing Mr. Niijima''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

Recognizing the need to strengthen Research and Development function of the Company much needed for the development of new products and upgrading the existing ones, the Board at its meeting held on 8th November, 2012 appointed, subject to Shareholders'' approval, Mr. Yuji Kosaka, as Whole-time Director with effect from 8th November, 2012 for a period of two years, designated as Director-R&D. Mr. Kosaka worked with Isuzu Motors group for almost 43 years and has vast experience in the fields of Quality Control & Manufacturing Engineering. Appropriate resolution for Mr. Kosaka''s appointment as Director of the Company has been proposed for the forthcoming Annual General Meeting.

Mr. Sudhir Nayar was co-opted as an additional Director of the Company on 6th August, 2013 and holds office upto the forthcoming Annual General Meeting of the Company. The Company has received Notice u/s 257 of the Companies Act, 1956 proposing Mr. Nayar''s appointment as a Director of the Company for consideration of the members at the forthcoming Annual General Meeting.

Mr. E. Seto, Mr. P.K. Nanda and Mr. Pankaj Bajaj are the Directors retiring by rotation at the forthcoming Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of provision of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that :

i) In the preparation of annual accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) 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 of the Company for the year under review;

iii) 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 safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared annual accounts on a ''going concern'' basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.

A report required under the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 is annexed to this Report.

COST AUDIT

On the stipulation of the Central Government, Cost Audit of the Company for financial year 2012-13 is being conducted by Messers ABS & Associates, Cost Auditors.

AUDITORS

Observations made by the Auditors, when read with the relevant notes forming part of Accounts, are self- explanatory.

B S R & Company, Chartered Accountants, retires as Auditors of the Company and has given its consent for reappointment. As required under the provisions of Section 224(1B) of the Companies Act, 1956, the Company has received a written certificate from the above Auditors that their appointment, if made, would be in conformity with the limits specified in the said Section.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

S.K. TUTEJA Y. WATANABE

Dated : 06 August 2013 Chairma Managing Director & CEO


Mar 31, 2012

The Directors are pleased to present their Twenty Eighth Annual Report together with Audited Accounts for the financial year ended 31st March 2012.

PERFORMANCE REVIEW

As foreseen in last year's Directors report, economic growth of the earlier years was not maintained during the year, both for external reasons and internal factors and manufacturing growth remained sluggish. However, thanks to the continuing road infrastructure development and construction activities, the commercial vehicle industry was able to beat that trend, further helped by increased replacement demand arising from enforcement of regulatory requirements.

Consequently, your Company was able to achieve 6% growth in vehicle numbers, a revenue increase of 14%, crossing the Rs 1,000 crore milestone for the first time and new highs both in operating and net profit.

The financial performance of the Company, for the year ended 31st March, 2012 is summarized below:

(Rs. in Crores)

2012 2011

Sales Volume (Nos.) 13646 12870

Net Revenue 1,042.22 913.00

Less : Material Cost & Other Expenses 956.19 842.32

Operating Profit 86.03 70.68

Profit Before Tax (before exceptional & prior period item) 64.96 51.38

Exceptional & prior period item 4.88 -

Profit After Tax 41.87 36.56

Balance of Profit from prior years 49.22 29.82

Surplus available for appropriation 91.09 66.38

Transfer to General Reserve 4.19 3.66

Proposed Dividend (including tax) 13.45 13.50

Amount carried to Balance Sheet 73.45 49.22

EXPANSION PROJECT

Further progress has been made with the Project and enhanced output of new products from the new facility has been reasonably satisfactory. Plans are now in place to manufacture new products both on Isuzu and SML platform in the next twelve to eighteen months.

DIVIDEND

Having regard to the improved financial results, the Directors have recommended payment of dividend for Financial Year 2011-12 @ 80% i.e. Rs. 8.00 per share, same as the previous year's - which had included a 15% special dividend.

CHANGE IN SHAREHOLDING STRUCTURE

In April, 2012, Isuzu Motors Limited, Japan acquired from Sumitomo Corporation, Japan 1,591,881 equity shares of Rs 10 each thereby increasing their shareholding to 15% from existing 4%. Consequently, with its shareholding in the Company coming down to 43.96 %, Sumitomo Corporation, Japan has ceased to be the holding company of the company.

MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE

A Management Discussions & Analysis Report is annexed to this report. A report on Corporate Governance together with the Auditors' Certificate confirming compliance of Corporate Governance norms also forms part of this Annual Report.

INDUSTRIAL RELATIONS

Industrial Relations and work atmosphere remained cordial throughout the year. Company has ensured that there is sustained communication and engagement with workforce through various forms.

CREDIT RATING

The Company continues to have the highest rating, for short term borrowings, of A1 from ICRA, which is a reflection of the Company's financial discipline and prudence.

PARTICULARS OF EMPLOYEES

The Company had 5 employees who were in receipt of remuneration of not less than Rs. 60,00,000 during the year ended 31st March, 2012 or not less than Rs. 5,00,000 per month during any part of the said year.

A statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this report. As per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Report, together with Accounts, is being sent to the

Shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Act. Members desiring to have a copy of the same, may write to the Company Secretary at the Registered Office of the Company.

SAFETY, HEALTH AND ENVIRONMENT

The Company continues to demonstrate a strong commitment to safety, health and environment. These aspects have been adopted as core organizational value of the Company.

Employees are continuously made aware of hazards / risks associated with their job and necessary training is imparted to them to update their knowledge and skill to meet any emergency situation.

The Company carries out statutory safety assurance and audits its facilities as per legal requirements. Regular medical and occupational check-up of employees are concluded and eco-friendly activities are promoted.

The Company has installed incinerator plant to safely dispose of hazardous waste. A sewage treatment plant has also been installed to ensure eco-friendly disposal.

CURRENT BUSINESS ENVIRONMENT

Recent economic data on manufacturing and GDP growth is, quite naturally, a cause for concern for the industry and indeed for the country for the year 2012-13. As with other industries and trades, commercial vehicles industry will also suffer much uncertainty. Whilst the Directors feel that the Company must be prepared for a slow down, they are hopeful that the momentum of growth recently witnessed for the Company's products may continue this year. The Company's resources and management thereof are geared to achieve that growth, particularly so with launching plan of new products and performance improvement of existing products.

DIRECTORS

Mr. A.K. Thakur, Mr. M. Tabuchi and Mr. S.K. Tuteja are the Directors retiring by rotation at the forthcoming Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of provision of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that :

i) In the preparation of annual accounts, the applicable Accounting Standards have been followed and that there are no material departures;

ii) 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 of the Company for that period;

iii) 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) The Directors have prepared annual accounts on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.

A report required under the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 is annexed to this Report.

COST AUDIT

On the stipulation of the Central Government, Cost Audit of the Company for Financial Year 2011-12 is being conducted by Messers ABS & Associates, Cost Auditors.

AUDITORS

Observations made by the Auditors, when read with the relevant notes forming part of Accounts, are self- explanatory. As such, in the opinion of the Directors, they do not call for a specific reply.

Messers B S R & Company, Chartered Accountants, retires as Auditors of the Company and have given their consent for reappointment. As required under the provisions of Section 224(1 B) of the Companies Act, 1956, the Company has received a written certificate from the above Auditors that their appointment, if made, would be in conformity with the limits specified in the said Section.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

S.K. TUTEJA Y. WATANABE

Dated : May 25, 2012 Chairman Managing Director & CEO


Mar 31, 2011

Dear Members,

The Directors are pleased to present their Twenty Seventh Annual Report together with Audited Accounts for the financial year ended 31st March 2011, which was the 25th year since the Company commenced its commercial operations.

PERFORMANCE REVIEW

The improvement in the commercial vehicles market witnessed in the second half of the previous year continued and the Company was able to achieve the highest ever volume of sales at 12870 vehicles (10133). Net Revenue at Rs. 893.0 crores (Rs. 722.2 crores), Operating Profit of Rs. 69.5 crores (Rs. 58.0 crores) and Profit before Tax at Rs. 51.4 crores (Rs. 30.4 crores) also set new records.

Although sale of new products saw some improvement, these remained below targets set. Consequently, capital expenditure for the expansion project was restricted for the time being.

Receivables remained at satisfactory level having brought these to set standards in the previous year, and cash flow was well controlled.

It is in the above background that the Directors report the following summary of results for the year 2010-11

(Rupees in Crores) Year Ended Year ended 31st March, 2011 31st March, 2010

Sales Volume (Nos.) 12870 10133

Net Operating Revenue 893.00 722.23

Operating Profit 69.46 57.93

Profit Before Tax 51.38 30.43

Tax Expense 14.82 8.97

Profit After Tax 36.56 21.46

Balance of Profit from Prior Years 29.82 17.28

Surplus available for Appropriation: 66.38 38.74

Appropriations:

Transfer to General Reserve 3.66 2.15

Proposed Dividend 11.58 5.79

Tax on Dividend 1.92 0.98

Amount carried to Balance Sheet 49.22 29.82

CHANGE OF COMPANY NAME

Members may recall that they had approved the change of Company's name from Swaraj Mazda Limited to SML Isuzu Limited through postal ballot process in November, 2010. Consequently, upon receipt of fresh Certificate of Incorporation dated 3rd January, 2011 from the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh, the new name of the Company has become effective.

DIVIDEND

Having regard to the improvement in financial results, the Directors have recommended payment of dividend for Financial Year 2010-11 @ 65% i.e. Rs 6.50 per share. In addition the Directors recommend a special dividend of 15% i.e. Rs 1.50 per share on completion of 25 years of commercial operations, making aggregate of 80% i.e. Rs 8.00 per share. Previous year's dividend was 40%.

EXPANSION PROJECT

Members may recall that Company had embarked upon its Expansion Project in fiscal 2006-07 by setting up facilities with a view to expand its product portfolio aimed to capitalize on the emerging business opportunities in the Indian Commercial Vehicles sector and to enable it to foray into the manufacture of air-conditioned luxury buses and coaches targeted at the tourism industry and long distance inter-city travel.

In the terms of the Rights Issue, ii had been projected that the net proceeds of Rs.1800 lacs, earmarked for Expansion Project, would be utilized by March, 2011. However, as stated in the last fiscal's Directors Report, demand for luxury buses did not rise to expected levels. Accordingly, capital spending has been restricted to bare minimum and only a sum of Rs. 321.70 lacs utilized out of the aforesaid Rs. 1800 lacs. Shareholders' approval is being sought in the forthcoming Annual General Meeting of the Company for the deferment the date of completion of expenditure up to March, 2013.

MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE

A Management Discussions and Analysis Report is annexed to this report. A report on Corporate Governance together with the Auditors' Certificate confirming compliance of Corporate Governance norms also forms part of this Annual Report.

INDUSTRIAL RELATIONS

Directors report with satisfaction that after a gap of 4-years a fresh Wage Agreement was concluded with the representatives of the workmen in cordial atmosphere.

PARTICULARS OF EMPLOYEES

The Company had 5 employees who were in receipt of remuneration of not less than Rs. 60,00,000 during the year ended 31st March, 2011 or not less than Rs. 5,00,000 per month during any part of the said year.

A statement of particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report, together with Accounts, is being sent to the Shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Act. Members desiring to have a copy of the same, may write to the Company Secretary at the Registered Office of the Company.

SAFETY, HEALTH AND ENVIRONMENT

The Company continues to demonstrate a strong commitment to safety, health and environment. These aspects have been adopted as core organizational value of the Company.

Employees are continuously made aware of hazards / risks associated with their job and necessary training is imparted to them to update their knowledge and skill to meet any emergency situation.

The Company carries out statutory safety assurance and audits its facilities as per legal requirements. Regular medical and occupational check-up of employees are concluded and eco-friendly activities are promoted.

The Company has installed incinerator plant to safely dispose of hazardous waste. A sewage treatment plant has also been installed to ensure eco-friendly disposal.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.

A report required under the Companies (Disclosure of particulars in the Report of Directors) Rules 1988 is annexed to this Report.

CURRENT BUSINESS ENVIRONMENT

There are concerns that the estimated 8.5% economic growth in fiscal 2010-11 may not be sustained on account of various factors - both domestic & external, most importantly the effects of rising inflation, and the continuing uncertainties in most lead economies in the world. It is appropriate, therefore, to assume that the CV industry may not sustain the growth recently witnessed. The first two months of the current fiscal year has seen growth of CV volumes of 15% at half the rate of the comparable months last year;and the SML Isuzu segment's growth is only 1% (17500 against 17300).Company's sales for the first two months stayed flat (1672 against 1699). Margins, too, will be under pressure with prices of metals and petroleum products showing no signs of coming down.

Despite the foregoing, the Directors look at the current year with cautious optimism because of the initiatives taken to maintain growth in traditional products at recent levels and enhancement in the performance of new products.

DIRECTORS

Mr Yash Mahajan decided to demit office of the Managing Director upon completion of his tenure of 5 years on 31st May, 2011. The Directors respected his decision and placed on record their deep sense of appreciation of his strong and inspirational leadership as Managing Director of the Company since its establishment in 1983, his dedication and outstanding contribution to nurturing it to its present position. They wished Mr. Mahajan a happy and healthy life ahead.

The Directors appointed Mr. Yutaka Watanabe, presently Whole-time Director of the Company, as Managing Director and Chief Executive Officer of the Company for a period of 5 years with effect from 1st June, 2011 on his existing remuneration subject to requisite approval of Shareholders of the Company in the General Meeting and of the Central Government, if required.

Mr. P.K.Nanda, Mr. Pankaj Bajaj and Mr. Steven Enderby are the Directors retiring by rotation at the forthcoming Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of provision of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed that :

i) In the preparation of annual accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) 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 of the Company for the year under review;

iii) 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 safe guarding the assets of the Company and preventing and detecting fraud and other irregularities;

iv) The Directors have prepared annual accounts on a 'going concern' basis.

COST AUDIT

On the stipulation of the Central Government, Cost Audit of the Company for financial year 2010-11 was conducted by Messers Avtar Singh & Company, Cost Auditors. The Cost Auditors have given a clean report.

AUDITORS

Observations made by the Auditors, when read with the relevant notes under schedule 'N' to the Accounts, are self-explanatory. As such, in the opinion of the Directors, they do not call for a specific reply.

Messers Price Waterhouse (PW), the Company's Statutory Auditors informed the Company vide letter dated 15th May, 2011 that they would not be able to continue as a Statutory Auditors of the Company after the forthcoming Annual General Meeting.

Taking note of PW's decision, Directors placed on record their appreciation of the services rendered by Messers Price Waterhouse, Chartered Accountants, as Statutory Auditors during the last 28 years of their association with the Company.

Consequently, in the Board Meeting held on 30th June, 2011, the Directors, on the recommendation of the Audit Committee of the Board, appointed Messers B.S.R. & Company, Chartered Accountants as the Statutory Auditors of the Company to hold office from the forthcoming Annual General Meeting (AGM) of the Company to subsequent AGM subject to the approval of shareholders.

FOR AND ON BEHALF OF THE BOARD

S K TUTEJA Y. WATANABE

Dated: 30th June, 2011 Chairman Managing Director & CEO

 
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