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Directors Report of Wheels India Ltd.

Mar 31, 2014

Dear Members,

The directors present their Fifty Fifth Annual report and the Audited Accounts of your Company for the year ended march 31, 2014.

Financial results

Sales for the year under review were Rs 1,798 crores compared to Rs 1,897 crores in the last year. the financial results of your Company for the year under review are as below:

(Rs. in Lakhs)

2013-14 2012-13

Gross profit before finance cost and depreciation 14,955 15,364

Finance Costs 5,535 5,550

Depreciation 5,534 5,359

Profit before tax for the year 3,886 4,455

Profit after tax for the year 2,841 3,188

Transfer to General Reserve 1,800 2,000

Dividend

The board approved and paid an interim dividend of Rs 4.00 per equity share (40%) in december 2013.

Your directors are pleased to recommend a final dividend of Rs.4.20 per equity share (42%) for the year ended 31st march, 2014 on the enhanced Capital. the final dividend recommended, if approved at the Fifty Fifth Annual General meeting, will be paid to all the shareholders whose name appears in the Register of members as on the book closure date. the total dividend for the financial year including the proposed final dividend will absorb Rs 10.53 crores including dividend distribution tax of Rs 1.53 crores.

Rights Issue

During the year under review your Company came with a Rights Issue of 21,62,835 equity shares of Rs 10/- each to the non-promoter shareholders in the ratio of 51 shares for every 20 shares held, at a price of Rs 400/- per share (including a premium of Rs 390/- per share). this issue was made to meet the minimum Public Shareholding requirement of 25% as stipulated by the Securities and exchange board of India (SEBI).

The board of directors thanks all the investors for fully subscribing the Rights Issue. the basis of allotment was finalized in consultation with national Stock exchange of India Limited. the funds raised through the rights issue were mainly utilized towards reducing the borrowings of the Company.

Management Discussion and Analysis

In the year 2013, the global economy continued to struggle with GdP growth estimated to be only 2.5%. While western economies remained sluggish throughout the year, the year also saw a marked slowdown in India and China. In India, the economy grew at its slowest rate in a decade with GdP growth estimated to be 4.7%. this was compounded by persistently high infation, a slowing down of capital formation and stagnant industrial production, affecting demand in your Company''s key industry segments.

The poor sentiment in the market resulted in negative growth of 6% in the passenger car market, for the frst time in decades. the year saw the Government systematically reduce the gap in price between petrol and diesel which resulted in a shift in demand towards petrol cars. the market was driven by new product launches and saw a shift in volume towards the premium b segment. there was a double digit decline in the utility vehicle market that was affected by both the increasing diesel prices and the slowing of economic activity.

The slowing down of the economy in the last year resulted in less goods movement and under utilization of trucks by feets. this took place at a time when fuel costs increased on a monthly basis affecting the viability of operations for truck operators, with no prospects for improving conditions. these business prospects for good carriage operators resulted in a decline of more than 25% in the commercial vehicle industry. the decline was across the board from small trucks to heavy commercial vehicles.

A good monsoon resulted in record levels of agricultural output and a buoyant growth of the agricultural tractor industry in the last year. the tractor industry grew by 19% in the last financial year as farmers increasingly looked at mechanization to overcome labour availability issues. the construction and mining equipment industry continued to be adversely affected through the year and registered negative growth.

There was delay in implementation of the JnnuRm scheme for buses, which resulted in the demand for air suspension systems to be stagnant in the last year. the power equipment sector was badly affected by slow execution of projects on account of land acquisition, coal linkages, environmental clearances, social issues and funding and declined by 20% in the last year.

Your Company saw sales decline by 5.3% in the last financial year, largely affected by the steep decline in volumes across the commercial vehicle industry. the decline in our sales to the passenger car and utility vehicle industry was made up by our increased sales to the agricultural tractor industry. there was a marginal improvement in our exports. the Company was affected by infationary headwinds that resulted in significant hikes in government controlled power tariffs and minimum wages. At the same time, the steel price increased in the second half of the year increasing our input cost. there was an effective review mechanism within the Company with a focus on controlling and reducing costs that enabled the Company to manage in these diffcult times.

While the last year saw low levels of growth, the government had improved the current account defcit and fiscal defcit levels by the year end. the current year is filled by the prospects of some improvement in economic activity with a new government coming to power. this should in time result in improved sentiments and an uptick in infrastructural and industrial activity in the country. It is expected that this could positively impact the automotive and commercial vehicle segments towards the latter part of the current year. the agricultural tractor industry is likely to see muted growth in the current year, following year of record production and high growth. Further, there is some uncertainty regarding the impact of global climatic patterns on our monsoons that could dampen growth in the sector. It is expected that in the latter part of the current year that economic activity and infrastructure development pick up, resulting in growth of construction and mining equipment market. Similarly, we expect that there will be some improvements in the power sector with the new government in place. there are orders from state transport undertakings for buses with air suspension which would result in some growth in the air suspension business of your Company. While the business environment remains diffcult, it is expected that prospects could improve in the latter part of the current year.

Your Company received major awards for its performance in the year under review as a supplier from key customers like Ashok Leyland, Caterpillar, Hyundai, John deere, mahindra & mahindra, maruti Suzuki, TAFE, toyota and Volvo-eicher.

Directors

The newly enacted Companies Act, 2013 provides that 2/3rd of the non-independent directors should be liable to retire by rotation. In order to comply with this requirement, your board of directors at the meeting held on 16th may, 2014 re-appointed mr S Ram (dIn 18309) as a Whole-time director designated as executive Chairman, liable to retire by rotation, subject to the approval of the members of the Company. the notice for this meeting places this subject before you for your approval.

Mr T K Seshadri, director (dIn63592) who retires by rotation at this Annual General meeting, has not offered himself for re-election for personal reasons. your directors place on record the valuable contribution made by him to the growth and development of the Company through his vast experience and expertise during his tenure as a director of the Company.

In order to meet the requirements of the Listing Agreement on the composition of the board with reference to the Independent directors, your board at its meeting held on July 16, 2014, have recommended the appointment of mr b Santhanam (dIn 00494806), as an Independent director of the Company to hold office for a term of five consecutive years from the date of the Annual General meeting. the notice for this meeting places this subject before you for your approval.

Mr T S Vijayaraghavan (dIn 0063728), mr S Prasad (dIn 63667) and mr Aroon Raman (dIn 00201205) present Independent directors are being appointed for a term of five consecutive years as mentioned in the notice, subject to the approval of the shareholders.

In the opinion of the board, the Independent directors fulfll the conditions specified under the Companies Act, 2013 and rules made thereunder and are independent of the management.

Under Article 94(3) of the Company, mr S Viji (dIn 139043) retires by rotation and being eligible, offers himself for re-election.

Corporate Governance

In pursuance to Clause 49 of the Listing Agreement with the Stock exchange, Corporate Governance Report is given elsewhere and forms part of this Report.

Director''s Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate Governance Voluntary Guidelines, 2009 issued by the ministry of Corporate Affairs, your directors confirm that:- 1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. Such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st march, 2014 and of the profit of the Company for the year ended on that date;

3. Proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts have been prepared on a going concern basis and

5. Proper systems are in place to ensure compliance with all laws applicable to the Company

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion of the Fifty Fifth Annual General meeting and are eligible for re-appointment. the Company has received necessary certifcate from the Auditors under Section 141 of the Companies Act, 2013 to the effect that they satisfy the conditions under the Companies Act, 2013 and the rules made thereunder for the above appointment. the directors recommend their re-appointment.

Internal Control and Audit

Your Company remains committed to ensure an effective internal control system which is a prerequisite for good governance. the internal control procedures are designed to ensure that all the transactions are properly authorized, recorded, and reported, apart from safeguarding the assets of the Company. Further the internal control system is supplemented by well- documented policies, guidelines and procedures and in order to ensure that an effective internal control environment is in vogue internal audit department of the Company and external audit firms, review regularly the internal control procedures implemented at the various units of the Company, and give its recommendations for improvement if found necessary. besides statutory auditors also give their suggestion for improvement in control and compliance.

Cost Audit

The Report of m/s Geeyes & Co, Cost and management Accountants, Chennai, (Firm Registration no. 00044), on the Cost Audit carried out for the Financial year 2012-13 was fled with the Central Government on 27.9.2013 (within the due date of 180 days from the closure of the financial year).

Safety

Your Company has identified safety of people and environment as a primary focus of responsibility and attempts all efforts towards achieving the same. the Company has embarked on an important journey of creating a safe work place for all the stake holders with the help of an external consulting entity, who have done pioneering work in this feld. during the year under review, your Company constituted various Committees under the leadership of managing director to oversee the implementation of the recommendations of the Consultant. the main focus is on cultural change and making people understand the importance of Safety on and off the work place. Various programs were held to educate and train people at all levels.

Corporate Social Responsibility (CSR)

Your Company is involved in a number of CSR activities so as to cater to basic needs of the society in the feld of health and education. during the year under review, number of initiatives were taken in the above felds in and around the Company''s plants. As provided under Section 135 of the Companies Act 2013, the board of directors have constituted Corporate Social Responsibility Committee of the board. the Committee will evolve the CSR policy of the Company and the same will be placed before the board for approval in due course.

Particulars of Employees

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975.

General

Particulars prescribed by the Companies (disclosure of Particulars in the Report of board of directors) Rules, 1988 are enclosed in the annexure and forms part of this report.

The directors wish to thank united bank of India, State bank of India, Standard Chartered bank, HdFC bank, and other banks for their continued support. your Company continues to have the full co-operation of all its employees. the directors would like to place on record the appreciation of the efforts of the employees in controlling costs and improving the profitability of the Company.

On behalf of the board of directors Chennai S Ram

July 16, 2014 Chairman

DIN 00018309


Mar 31, 2013

The Directors present their Fifty Fourth Annual report and the Audited Accounts of your Company for the year ended March 31, 2013.

Financial results

Sales for the year under review were Rs. 1,897 crores compared to Rs. 2,051 crores in the last year. The financial results of your Company for the year under review are as below:

(Rs. in Lakhs) 2012-13 2011-12

Gross profit before finance cost and depreciation 15,364 16,598

Finance Costs 5,550 6,135

Depreciation 5,359 5,047

Profit before tax for the year 4,455 5,416

Profit after tax for the year 3,188 3,435

Transfer to General Reserve 2,000 2,300

Dividend

Your Directors are pleased to recommend, out of the profits of the current year, a dividend of Rs. 8.10 per share on the paid-up capital of the Company as at 31st March, 2013. The dividend will be paid to all the shareholders whose names appear in the Register of Members as on the Book closure date.

If the dividend recommended is approved at the Fifty Fourth Annual General Meeting, a sum of Rs. 7,99,42,496.40 will become payable. A dividend tax of 16.995% (including surcharge) will be paid on the dividend declared.

Management Discussion and Analysis

The growth in the global economy was weak in 2012 and is expected to stay sluggish in 2013, as fiscal adjustments are expected to slow growth in advanced economies and delay cyclical recovery in emerging economies. In India, the GDP growth in the last fiscal was at 5%, the lowest levels in the last decade. The persistent high levels of inflation adversely impacted consumption while structural bottlenecks affected investments. The last financial year saw the second consecutive year of decelerating growth and the uncertainty in the business environment affected all major industry segments serviced by your Company.

The passenger vehicle segment was affected by these macroeconomic factors and registered only a marginal growth last year. The passenger car sub-segment was affected by the escalation of labour issues in the first half of last year and the price gap between diesel and petrol, and saw negative growth in the last year. This was offset by a strong performance by the diesel dominated utility vehicle market. The utility vehicle segment sales were also boosted by popular new models. The small truck segment continued to grow albeit at a slower pace with customers segmenting the market with new products in both goods and passenger applications.

The medium and heavy commercial vehicle segment was badly affected by the slowdown in the Indian economy. The slowing down of infrastructure projects, the stoppage of mining activities in some states and the general slowing down of demand in the economy resulted in under utilization of trucks. The last three quarters of the year under review saw a steep decline in truck production in the country as the medium and heavy commercial vehicle segment had a negative growth of 29% over the year. There was also a marginal negative growth in the light commercial vehicle sector.

After a number of years of robust growth, the agricultural tractor market in India saw a negative growth of 8% last year, due to deficit rainfall in some states, high interest rates and at the same time huge grain stocks with the Government. The tractor in rural India is used not only for agriculture but also for haulage where demand was affected by the slowdown.

The slowdown in the global economy last year affected the demand for construction and mining equipment significantly especially towards the second half of the year. In this, the mining sector globally was especially hard hit as commodity prices remained at low levels through the year. The coal industry which is one of the major users of mining equipment, was severely hit by the movement from coal to shale gas as an energy source in the US.

The power equipment sector which is serviced by your Company was very badly hit last year as project clearances slowed down significantly. The sector was also affected by coal linkages and environmental clearance issues. The gap between demand and supply widened resulting in a significant increase in power tariff across the country.

The slowing down in growth in all major industry segments affected the growth of your Company last year, and saw the sales decline by 7.5%. The decline in sales was more towards the second half of the year as sales to commercial vehicle and construction and mining equipment customers fell steeply during this period. The slowing down of the economy in a competitive environment, with high inflation especially in manpower and energy costs adversely affected the performance of your Company. Nevertheless, in the passenger vehicle segment, your Company was able to increase its share of business and grow in a sluggish market. Similarly, your Company was able to increase its fabrication business supplying energy equipment manufacturers in spite of the adverse business environment in that sector. In all other segments, your Company top-line was in line with the respective industry segments. Your Company launched an after- market brand WILGO in the last year and hopes to build this business in the years to come. In the year under review, your Company received a number of awards from its valued customers both domestic and international, recognising our performance as their suppliers.

In spite of the difficult business environment, your Company has continued its internal drive towards operational efficiencies and cost management. The review mechanism of internal projects and processes has been made more robust. Your Company has also re-organized itself internally into business units to bring better focus to the specific requirements of business segments. It is only with this relentless focus on our internal processes that we have been able to tackle the significant obstacles in the last financial year.

The year ahead is likely to see the Indian economy growing at around the same level as last year. The passenger vehicle and commercial vehicle segments are expected to grow only marginally in the current year. The expectations of a good monsoon, are likely to result in some growth in the agricultural tractor segment. However, the construction and mining industry worldwide continues to be depressed. Your Company is likely to benefit from the JNNURM scheme as the government plans to purchase city buses with air suspension systems under the scheme in the coming year. Similarly, we do expect some movement in the power equipment segment, especially in the second half of the year.

Directors

Under Article 94(3) of the Company, Mr S Prasad and Mr J M A Akers retire by rotation and being eligible offer themselves for re-election.

Your Board of Directors at the meeting held on 05.02.2013, re-appointed Mr Srivats Ram as Managing Director for a period of 5 years with effect from 01.05.2013 subject to the approval of members in the ensuing Annual General Meeting.

Corporate Governance

In pursuance to Clause 49 of the Listing Agreement with the Stock Exchange, Corporate Governance Report is given elsewhere and forms part of this Report.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs, your Directors confirm that:-

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

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

4. the annual accounts have been prepared on a going concern basis and

5. proper systems are in place to ensure compliance with all laws applicable to the Company

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion of the Fifty Fourth Annual General Meeting and are eligible for re-appointment. The Directors recommend their re-appointment.

Internal Control and Audit

The Company''s internal control system provides for adequate documentation of policies, guidelines, authorities and approval procedures, which helps in ensuring that the assets of the Company are properly protected.

The effectiveness of the internal control system is constantly monitored by the internal audit department along with the external audit firms appointed to carry out the internal audit of the various units of the Company.

The highlights of the internal control and internal audit reports are placed before each Audit Committee meeting along with the recommendations and responses of the management. Besides, statutory auditors also present their suggestions to the members for improvements in control and compliance.

Cost Audit

Pursuant to the circular dated 24th January, 2012 of the Ministry of Corporate Affairs, your Company has appointed M/s Geeyes & Co, Cost Accountants, Chennai, (Firm Registration No. 00044) as Cost Auditor for the year 2012-13, with the consent of the Central Government, for the audit of cost accounts maintained by the Company.

Safety

Your Company has always attached a high degree of importance to safety, health and environment standards, wherein the objective is to excellence in Safety without any incident

Your Company is working with DuPont, the world leader in industrial safety, to implement several initiatives for achieving excellence in safety. Your Company anticipates such implementation will see an all-round improvement in various essentials of Safety in the Company.

By persistent efforts in Safety management, the Company was able to achieve considerable reduction in incidents.

The Central Safety Committee of the Company, continues to monitor safety, health and environment performance and provides necessary direction for improvement through regular monthly reviews, which includes proper training to the employees, creating awareness on safety to all the employees. The Central Safety Committee is also supported by several sub- committees, which also co-ordinates and monitors Safety management in the Company.

Corporate Social Responsibility

Your Company believes that working with the local communities is an integral part of business. Towards this, your Company has taken sustainable initiatives in the field of health and supplementary education in the year under review to underprivileged children in rural areas around the Company''s plants.

Particulars of Employees

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Open Offer by Titan

Consequent to the acquisition of shares by Titan International Inc., in Titan Europe Plc., an Open Offer was made by Titan Europe Plc. (Acquirer) along with Titan International Inc., the Person Acting in Concert (PAC) with the Acquirer to acquire equity shares of Rs.10/- each of Wheels India Limited, in order to comply with the SEBI Regulations.

Pursuant to the above Open Offer Titan Europe acquired 5,74,170 equity shares of Rs. 10/- each in the Company.

General

Particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are enclosed in the annexure and forms part of this report.

The Directors wish to thank United Bank of India, State Bank of India, Standard Chartered Bank, HDFC Bank Limited, and other Banks for their continued support.

Your Company continues to have the full co-operation of all its employees. The Directors would like to place on record the appreciation of the efforts of the employees in controlling costs and improving the profitability of the Company.

On behalf of the Board of Directors Chennai S Ram

May 27, 2013 Chairman


Mar 31, 2012

The Directors present their Fifty Third Annual report and the Audited Accounts of your Company for the year ended March 31, 2012.

Financial Results

Sales for the year under review were Rs. 2,051 crores compared to Rs. 1,676 crores in the last year. The financial results of your Company for the year under review are as below: (Rs. in Lakhs)

2011-2012 2010-2011

Gross profit before finance cost and depreciation 17,493 13,228

Finance Costs 7,030 5,362

Depreciation 5,047 4,608

Profit before tax for the year 5,416 3,258

Profit after tax for the year 3,435 2,464

Transfer to General Reserve 2,300 1,600

Dividend

The Board approved and paid an interim dividend of Rs. 4/- per equity share of Rs. 10/- each, in March 2012.

Your Directors are pleased to recommend a final dividend of Rs. 6/- per equity share of the face value of Rs.10/- each, for the year ended 31st March, 2012. The final dividend, recommended, if approved at the Fifty Third Annual General Meeting, will be paid to all the shareholders whose names appear in the Register of members as on the Book closure date.

The total dividend for the financial year including the proposed final dividend amounts to Rs. 10/- per equity share and will absorb Rs. 11.47 Crores including Dividend Distribution Tax of Rs. 1.60 Crores

Management Discussion and Analysis

The last financial year saw tumultuous events on the world stage from the Arab Spring to the Japanese earthquake-tsunami to the Euro crisis. The Indian economy saw the GDP growth come down to 6.8% as the nation's fiscal and trade deficit widened and inflation remained at high levels. Coming on the back of a year of strong growth, the headwinds of the slowing economy affected all domestic market segments serviced by your Company.

The passenger car market was additionally burdened by two factors. There was a major industrial dispute affecting production at the largest car manufacturer for over a month. The year also saw a widening gap between petrol and diesel prices leading to consumers increasingly preferring diesel vehicles. The supply chain capacities in diesel engines was not able to ramp up adequately to meet this demand. As a result, the passenger car market had only a marginal growth during the year.

The traditional commercial vehicle market saw growth in the heavy and light segments with no growth in the medium commercial vehicles. This resulted in the commercial vehicle segment growing at only single digit rates. Outside of the traditional CV market there continued to be strong growth in the small commercial vehicle market. Even the agricultural tractor market saw moderated growth as the slowdown in the economy started affecting all market segments. The construction and mining equipment wheel segment of your Company is truly international in nature and a resurgence in global demand augurs well for your Company in the coming years.

Your Company faced increased competition in all domestic industry segments, as demand slowed down. While Company grew at around industry rates in all segments, it benefited from its relatively stronger position in the growing small commercial vehicle segment. The air suspension system division of your Company, that had seen a decline in the previous year, saw strong growth off the low base, with demand from both state transport undertakings and private operators. In the energy equipment structural parts division, your Company was able to scale up above break-even levels. It was really the growth in the earth moving and construction equipment wheel global business together with new segments of businesses that were taken up that helped your Company to grow at a faster rate above the domestic vehicle industry levels.

While the year under review saw a slower rate of growth, it had its share of inflationary forces to deal with, with higher material costs at the start of the year and high energy costs at the year-end. Added to this, a double digit depreciation of the Indian Rupee vis-a-vis the US Dollar added to the cost pressures. In this environment, your Company dedicated its efforts for the year on operational cost control across its plants. This has built strength and teamwork within the organization that can be harnessed in the years to come. During the year, your Company signed a technical agreement with Topy Industries, a leading Japanese wheel manufacturer, that will strengthen the passenger car wheel business.

The coming year is likely to see the Indian economy grow at around 7%, and the domestic industry segments are likely to grow at single digit levels. There is particularly some concern on the growth prospects of the tractor and truck markets in the country. Your Company is a supplier in some of the high volume newer models in the passenger car segment and is likely to benefit from this in the coming year. We continue to see reasonable growth in the construction and mining equipment business worldwide, as also the non-wheel business. The major concerns in the year ahead is inflation in the cost of most inputs. Your Company has a reasonably large foreign exchange exposure to the extent of approximately 23% of sales by way of exports and imports. To add to this, in the year under review, there was a steep depreciation of the Indian Rupee vis-a-vis the US Dollar particularly in the second half of the year. This element of foreign exchange risk is likely to continue in the current year.

Directors

Mr Aroon Raman, who was appointed as a Director in the vacancy caused by the resignation of Mr T T Rangaswamy holds upto the conclusion of the 53rd Annual General Meeting and being eligible, offers himself for appointment by the members.

The Company has received notice under Section 257 of the Companies Act, 1956 from a member of the Company proposing Mr Aroon Raman to be appointed a Director.

Under Article 94(3) of the Company, Mr S Viji and Mr T S Vijayaraghavan retire by rotation and being eligible offer themselves for re-election.

Corporate Governance

In pursuance to Clause 49 of the Listing Agreement with the Stock Exchange, Corporate Governance Report is given elsewhere and forms part of this Report.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs, your Directors confirm that:-

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

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

4. the annual accounts have been prepared on a going concern basis and

5. proper systems are in place to ensure compliance with all laws applicable to the Company

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion of the Fifty Third Annual General Meeting and are eligible for re-appointment. The Directors recommend their re-appointment.

Internal Control and Audit

The Company has a well established internal control system which helps in ensuring that the assets of the Company are properly protected. The effectiveness of the internal control system is constantly monitored by the internal audit department along with the external audit firms appointed to carry out the internal audit of the various units of the Company. The Audit Committee periodically reviews the reports on the internal audit findings and takes appropriate decisions to implement corrective action wherever required.

Awards

During the year under review, your Company's Padi plant won the All India Organisation of Employers (AIOE) Industrial Relations Award for the year 2010-11.

Your Company received awards from TAFE, Toyota, Caterpillar and Maruti Suzuki for its performance, quality and supply of products.

Safety

Your Company gives high priority to the Safety and the objective is to achieve a zero incident. To ensure Safety and create a safe work environment, Safety Audit is being conducted regularly and reviewed by the Company. Further, safety performance is being reviewed by the top-level management every month. Your Company also gives safety training to create awareness on safety to all the employees periodically.

Corporate Social Responsibility

Your Company believes that Corporate Social Responsibility is an integral part of the business. As a part of its CSR activity:-

- your Company established educational facilities in Thiruvannamalai District to cater to the needs of the children. Your Company along with reputed Non Governmental Organization, has set up SuperKidz Centers in 13 villages in Vembakkam, Thiruvannamalai District, wherein most of the children in Vembakkam, Thiruvannamalai District have benefited.

- Special Health check up camp was conducted in association with ESI Hospital Chennai and Sriperumbudur during the year under review .

Particulars of Employees

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

General

Particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are enclosed in the annexure and form part of this report.

The Directors wish to thank United Bank of India, State Bank of India, Standard Chartered Bank and HDFC Bank Limited for their continued support.

Your Company continues to have the full cooperation of all its employees. The Directors would like to place on record the appreciation of the efforts of the employees in controlling costs and improving the profitability of the Company.

On behalf of the Board of Directors

Chennai S Ram

30th May 2012 Chairman


Mar 31, 2011

The Directors present their Fifty Second Annual Report and the Audited Accounts of your Company for the year ended March 31, 2011.

Financial Results

Sales for the year under review were Rs. 1676 crores compared to Rs. 1241 crores in the last year. The financial results of your Company for the year under review are as below:

(Rs. in Lakhs)

2010-2011 2009-2010

Gross profit before interest and depreciation 12,844 9,116

Interest 4,978 3,777

Depreciation 4,608 3,316

Profit before tax for the year 3,258 2,023

Profit after tax for the year 2,464 1,295

Transfer to General Reserve 1,600 2,100

Dividend

Your Directors are pleased to recommend, out of the profits of the current year, a dividend of Rs. 6.50 per share on the paid-up capital of the Company as at 31st March, 2011. The dividend will be paid to all the shareholders whose names appear in the Register of Members as on the Book closure date. If the dividend recommended is approved at the Fifty Second Annual General Meeting, a sum of Rs. 6,41,51,386/- will become payable. A dividend tax of 16.2225% (including surcharge) will be paid on the dividend declared.

Management Discussion and Analysis

After two years of slowdown, in the last year, global GDP is estimated to have grown at 3.9%, with growth

in all geographies. The Indian economy grew at 8.6% over the year, as against 7.1% in the previous year, with strong recovery in the agricultural sector. Inflation remains a concern with the consumer price index at a double digit level for the second year in a row.

The growth in the economy resulted in a high growth in all segments of the automotive industry. The passenger car and light vehicle segment grew at 25% to come close to 3 million vehicles in the last year. While, the exports of cars marginally slowed down with the removal of the "scrappage" scheme in Europe, the growth was driven by strong demand in the domestic market. There was a strong growth of almost 30% in the commercial vehicle market in the last year, mainly in the goods carriage segments, as the government did not extend the inclusion of city buses under the JNNURM scheme. With a growth of over 5% in the agricultural sector, high food grain prices, the NREG scheme and good rural credit availability, the tractor segment grew at 24% in the year under review.

Your Company grew along with domestic industry in all segments. In the last two months of the year, for the first time in our history, we produced more than a million wheels a month, supported by robust demand in the domestic industry. The earthmoving and mining equipment market that was worst hit by the recession showed an impressive recovery in the last year. With the recovery of global markets, your Companys exports more than doubled from the last year. In Air Suspension business, with the JNNURM bus scheme being discontinued, volumes dropped to less than half of last years volumes. In the coming year, with introduction of new models, your Company is seeing growth in the Air Suspension business. The raw material costs increased significantly last year and

are likely to increase in the coming year as well, in line with global commodity trends. Last year saw a steep increase in energy costs and continues to be an issue in the coming year. The biggest challenge for your Company remains cost control in these two areas.

The Pantnagar plant that was started two years ago has reached peak production levels servicing the customer base at Uttarakhand. The Deoli plant that makes components for the power equipment sector completed its first full year of operations and is expected to break even in the coming year.

In the coming year, the Indian economy is expected to grow at the same level as last year. The automotive and tractor markets are expected to grow at 15%. However, the continuing hikes in interest rates and fuel prices are likely to result in a slightly muted growth in the commercial vehicle segment. The exports of your Company are expected to grow in the coming year, although not at the same levels as last year.

Your Companys main plant at Padi was awarded the TPM Excellence Award by the Japanese Institute of Plant Maintenance in the last year. While your Company faced high inflation in the year under review with material, energy and manpower costs increasing, more efficient management of operations by implementing TPM yielded benefits to the Company.

Your Company continues to receive awards for performance from its customers and has received awards from Caterpillar, Maruti Suzuki and Toyota Kirloskar in this respect. Your Company continues to engage, educate and motivate its employees through quality circles, self directed work teams and suggestions schemes.

Your Company remains committed to ensuring an effective internal control system that provides assurance on the effectiveness of operations, reliability in financial reporting and security of its assets. Towards this, the internal audit department of the Company, along with external audit firms frequently review internal control procedures and make suggestions for improvement. Their reports are placed before the Audit Committee at periodic intervals for review and assessment of the status of compliance with operating systems, internal policies and regulatory requirements.

Your Company would like to place on record its appreciation for the efforts of its employees in controlling the costs of the Company, in the current environment.

Directors

Mr. T T Rangaswamy who was appointed as a Director on the Board of the Company on 28th June, 1990 resigned from the Board on April 15, 2011. Your Directors place on record the significant contribution made by him to the deliberations of the Board and various committees of the Board.

At its meeting held on April 15, 2011, the Board appointed Mr. Aroon Raman as a Director of your Company under Section 262 of the Companies Act, 1956, in the casual vacancy caused by the resignation of Mr. T T Rangaswamy.

Consequent to the above changes, your Company reconstituted Audit Committee, Share Transfer & Investor Relations Committee and Remuneration Committee of the Board.

Under Article 94(3) of the Company, Mr. J M A Akers and Mr. T K Seshadri retire from office by rotation, and being eligible, offer themselves for re-appointment.

Corporate Governance

In pursuance to Clause 49 of the Listing Agreement with the Stock Exchange, Corporate Governance Report is given elsewhere and forms part of this Report.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs, your Directors confirm that:-

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

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

4. the annual accounts have been prepared on a going concern basis and

5. proper systems are in place to ensure compliance with all laws applicable to the Company.

Auditors

M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion of the Fifty Second Annual General Meeting and are eligible for re-appointment. The Directors recommend their re-appointment.

Particulars of Employees

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

General

Particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are enclosed in the annexure and form part of this report.

The Directors wish to thank United Bank of India, State Bank of India, Standard Chartered Bank and HDFC Bank Limited for their continued support.

Your Company continues to enjoy the full cooperation of all its employees. The Directors wish to place on record their appreciation of the good work done by them.

On behalf of the Board of Directors

S Ram Chairman

Chennai 30th May, 2011


Mar 31, 2010

The Directors present their Fifty First Annual Report and the Audited Accounts of your Company for the year ended 31 st March 2010.

Financial Results

Sales for the year under review were Rs. 1,241 crores compared to Rs. 1,128 crores in the last year. The financial results of your Company for the year under review are as below:

2009-2010 2008-2009 (Rs in Lakhs)

Gross profit before interest and depreciation 9,116 10,997

Interest 3,777 4,676

Depreciation 3,316 3,379

Profit before tax for the year 2,023 2,942

Profit after tax for the year 1,295 2,115

Dividend

Your Directors are pleased to recommend, out of the profits of the current year, a dividend of Rs. 4.50 per share on the paid up capital of the Company as at 31 st March, 2010. The dividend will be paid to all the shareholders whose names appear in the Register of Members as on the Book closure date. If the dividend recommended is approved at the Fifty First Annual General Meeting, a sum of Rs. 4,44,12,498/- will become payable. A dividend tax of 16.60875% (including surcharge) will be paid on the dividend declared.

Management Discussion and Analysis

The last year started with a recession in international markets and a slowing down of the domestic market in India. The Government of India came out with a stimulus package which included cuts in excise duty for vehicles and the inclusion of city buses in the JNNURM scheme. The Indian economy recovered quiet strongly especially in the latter part of the year. The GDP growth rate last year was 7.1 % as against 6.7% the previous year. It was also significant that the industrial production index grew by nearly 10% to fuel growth in the country in spite of a marginally negative growth in agriculture. The quick recovery resulted in higher levels of inflation with the consumer price index for the year at 12%.

The passenger car market grew significantly throughout the year recording a 29% growth, initially fuelled by export of cars to Europe feeding into the "scrappage" scheme there, and later fed by the resurgence of the Indian economy. The truck market started the year sluggishly, but recovered very strongly in the second half thanks to the stimulus package to record a 32% growth. The tractor market grew by 30%, in spite of a -1% growth in agriculture production, fuelled by high food grain prices, the NREG scheme and credit availability in the rural sector. The export markets for your Company plummeted with international markets in recession.

Your Company faced a very difficult first half of the year with truck volumes at a low level and export activity at 30% of the same period the previous year. The low level of activity in the first half was barely adequate to cover our fixed costs and the company just about broke even for the half year. The strong recovery of the economy in the second half resulted in increase in steel prices and major power availability issues. The inflationary pressures affected all elements of cost across the board in spite of your Companys best efforts to control cost. The export markets remained at a low level throughout the year. The drop in exports was partly made up by increase in the demand for air suspension for buses. Your company was able to ramp up both manufacturing and its supply chain adequately to meet this demand.

Your Company started operations at its Pantnagar facility which services customers in the region. During the first half, we moved a truck wheel line to Rampur in an effort to reduce costs and get closer to the customer plants. In the wheel business, we will be de-bottlenecking our major lines to meet the increased demand in the coming year.

Your Company was able to commence operations at its Deoli plant in Wardha District, Maharashtra in the month of March, within a year of ground breaking. This plant will be making components for the power equipment sector, which is likely to continue to grow at a substantial rate in the coming years.

In the coming year, the Indian economy is expected to grow at 9%. While the current demand in all vehicle segments remains strong, it is expected that with the high levels of inflation credit availability will be tightened in the latter part of the year. In spite of this, we expect a double digit growth in all sectors. The central government has scaled down the stimulus package in light of the high growth of the economy. While this is likely to affect the bus air suspension business, your Company is looking at widening the product range to other suspension applications. The export markets are showing signs of recovery although it will take some time till we reach our previous export peak levels.

The effects of inflation are the main challenges your Company will face in the coming year, with increase in the cost of steel, power and fuel and manpower. The effective management of operations are critical to containing costs in the coming year. In light of this, your Company is practicing Total Productive Maintenance at its Padi plant and intends to take this practice across its major plants.

The Company remains committed to ensure an effective internal control environment that provides assurance on the efficiency of operations, statutory compliance and security of assets of the Company. The Internal Audit team of the Company along with a team of outside internal audit firms appointed to carry out the internal audit function at various units of the Company reviews the adequacy of internal control systems and suggests necessary checks and balances to increase the effectiveness of the system. The Company has an Enterprise Resource Planning system that helps in monitoring the adequacy and effectiveness of the internal controls across the various units of the Company and the status of compliance with internal policies and regulatory requirements.

Your company would like to place on record its appreciation for the efforts of its employees in controlling the costs of the company, in the current environment.

Directors

Under Article 94(3) of the Company, Mr. T S Vijayaraghavan and Mr. S Prasad retire from office by rotation, and being eligible, offer themselves for re-appointment.

Corporate Governance

In pursuance to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report is given elsewhere and forms part of this Report.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate Governance Voluntary Guidelines, 2009 your Directors confirm that

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. Such accounting policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your company as at 31 st March, 2010 and of the profit of the Company for the year ended on that date;

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. The annual accounts have been prepared on a going concern basis and

v. Proper systems are in place to ensure compliance with all laws applicable to the Company

Auditors

M/s Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion of the Fifty First Annual General Meeting and are eligible for re-appointment. The Directors recommend their re-appointment.

Particulars of Employees

In accordance with provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to all the shareholders of the Company excluding the annexure prescribed under Section 217(2A) of the Companies Act, 1956. The said annexure, setting out the names and other particulars of employees, is available for inspection by the Members at the Registered Office of the Company during office hours till date of the Annual General Meeting viz. 13.08.2010.

General

Particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are enclosed in the annexure and form part of this report.

The Directors wish to thank United Bank of India, State Bank of India, Standard Chartered Bank and HDFC Bank Limited for their continued support.

Your Company continues to enjoy the full cooperation of all its employees. The Directors wish to place on record their appreciation of the good work done by them.

On behalf of the Board of Directors Chennai S. Ram

29th May, 2010 Chairman





 
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