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Directors Report of FIEM Industries Ltd.

Mar 31, 2017

The Directors present the 28th Annual Report of Fiem Industries Limited (the Company or FIEM) on the business and operations of the Company along with the audited financial statements for the financial year ended March 31, 2017.

Financial Results

The Directors'' Report is prepared on the basis of Standalone Financial Statements of the Company pursuant to Rule 8 of the Companies (Accounts) Rules, 2014. However, this report also contains highlights of the performance and financial position of the Wholly-owned Subsidiary (WOS), Fiem Industries Japan Co., Ltd. and Joint Venture Company (JV), Centro Ricerche FIEM HorustecH S.r.l (Italy). The financials of these two overseas incorporated entities are included in the Consolidated Financial Statements of the Company. As financials of WOS as well as JV are not significant, hence their contribution to the overall financial performance of the Company are negligible. However, these two entities are giving immense operative support to the Indian parent company in Design, Development and local interface in Japan to our esteemed Japanese OEMs and working like extended arms of the Company.

Company''s financial performance for the year under review along with previous year figures are as under: (Rs. in Lakhs)

Sr.

Particulars

Standalone

Consolidated

FY 2016-17

FY 2015-16

FY 2016-17

FY 2015-16

1

Income from Operations

a) Net Sales/Income from operations (Net of excise duty)

100,768.61

97,745.79

100,987.58

97,904.98

b) Other Operating Income

975.46

952.10

895.76

910.96

Total Income from operations (Net)

101,744.07

98,697.89

101,883.34

98,815.94

2

Total Expenses (excluding dep and finance cost)

89,999.67

85,998.55

90,104.38

86,085.93

3

Profit from operations before other income, finance costs, depreciation and exceptional items (1-2)

11,744.40

12,699.34

11,778.96

12,730.01

4

Add Other income

470.89

96.72

470.89

97.06

5

Profit from ordinary activities before finance costs, depreciation and exceptional items (3 4)

12,215.29

12796.06

12,249.85

12,827.07

6

Less :- Finance costs

2,324.17

1,576.84

2,326.58

1,578.09

Depreciation

3,922.52

3,303.49

3,928.91

3,312.01

7

Profit from ordinary activities after finance costs, depreciation but before exceptional items (5-6)

5,968.60

7,915.73

5,994.36

7,936.97

8

Exceptional Items

1,418.86

-

1,418.86

-

9

Profit/(Loss) from Ordinary Activities Before Tax (7-8)

4,549.74

7,915.73

4,575.50

7,936.97

10

Tax expense

1,260.09

2,197.26

1,262.96

2,203.67

11

Net Profit/(Loss) from Ordinary Activities After Tax (9-10)

3,289.65

5,718.47

3,312.54

5,733.30

12

Weighted Earnings Per Share (EPS)

26.12

47.80

26.30

47.93

State of the Company''s affairs / Business Review

During the year, Company achieved a good growth in automotive business segment despite severe impact of demonetization on overall economy. Net sales in automotive business grew by 11%. However, performance of LED business was not good during the year and net revenue of LED Luminaries segment came down to Rs. 57.93 crores in FY 201617 as compared to Rs. 119.17 crores in FY 2015-16. Further, the Company has supplied over 1,18,000 LED Street Light to EESL for SDMC project in Delhi under SITC contract with comprehensive maintenance for 7 years. After commissioning, the comprehensive maintenance is discontinued by EESL and a net amount of Rs. 14.19 crores has been written-off as being non-recoverable from EESL (net of reversal of earlier provision of Rs. 5.28 crores). This exceptional item has proved a dampener in the profitability of the Company. Further, some orders of LED Bulbs have been short closed by EESL, due to steep price fall and other reasons. One order of PVVNL, Meerut for LED Bulbs has also been short closed. These all things coupled with demonetization has adversely impacted the LED business.

During the year, demonetization has adversely impacted overall business in the country in 3rd and 4th Quarter. Liquidity crunch was prevalent and automotive business was not an exception. Sales at dealers end were not happening. Therefore, OEMs cut down production drastically and our supplies to our major OEMs affected adversely during this period.

However, management believes that these are short term obstacles and in long term, LED provides a huge opportunity in the country as well as for export opportunities. In India, LED adoption is still in the initial phases and it will take some time to settle the volatility in the market. At the automotive front, the outlook is promising and the impact of demonetization is behind us. New regulations of BS-IV and AHO are positive for the industry as well as for the Company. LED is being adopted very fast in the automotive lighting applications. This is very positive development for the Company as Company is frontrunner in the development of LED Head lamps based on its in-house R&D capabilities.

Keeping in view the growth prospective and to meet the capex requirements, Company augmented the financial resources and raised Rs. 120 cores through Qualified Institutions Placement (QIP) in September, 2016. Out of which Rs. 36.14 crores have been utilized towards cost of issue and capital expansion, the balance of Rs. 83.86 crores have been temporarily invested in mutual funds/ fixed deposits.

During FY 2016-17, Rs. 21 crores has been invested in newly set-up Unit of the Company in Gujarat. Total Investment as on March 31, 2017 for Gujarat unit was Rs 75 crores. Investment in Tapukara Plant (Rajasthan) in LED Lighting products facilities during FY 2016-17 was Rs. 23 crores. During the Financial year, the total capex was Rs. 110 crores in different units of the Company.

During the year, we have signed a "Technology License and Assistance Agreement" (TAA) with Aisan Industry Co., Ltd., Japan and Toyota Tsusho Corporation, Japan for manufacturing of ''Canister'' in India. ''Canister'' is an Emission Control System Product. Under the TAA, the ''Canister'' is manufactured by Fiem Industries Ltd. with the technical support of Aisan Industry Co., Ltd. for two-wheelers and three-wheelers in Indian market.

Dividend

The Board of directors in their meeting held on May 30, 2017, has recommended a final dividend at the rate of 80% i.e. Rs.8/-per equity share for the financial year ended on March 31, 2017 to the shareholders. The Dividend payout is subject to approval of members at the ensuing Annual General Meeting of the Company. The recommended dividend, if approved by the members, would involve a cash outflow of Rs. 1267.13 lacs including dividend tax.

Statutory disclosures as per provisions of Section 134 of the Companies Act, 2013 (the "Act")

1. Extract of Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 as amended, an extract of Annual Return in Form MGT-9 as on March 31, 2017, has been prepared and enclosed as Annexure I, which forms an integral part of this report.

2. Number of meetings of the Board

The Company operate under guidance and control of the Board. Meetings of the Board are held on regular intervals to discuss and decide on various business policies, strategies, operational, financial and other matters. Due to business exigencies, the Board has also approved some proposals through resolution passed by circulation from time to time.

During the financial year 2016-17, six (6) Board Meetings were held. One separate meeting of Independent Directors of the Company was also held during the Financial Year 2016-17. Detailed information on the meetings of the Board is included in the report on Corporate Governance, which forms an integral part of this Annual Report.

3. Directors'' Responsibility Statement

In terms of Section 134(3)(c) of the Companies Act, 2013, Your Directors state that:

a) in the preparation of the Annual Accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) 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 as at end of Financial Year ended March 31, 2017 and of the Profit and Loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the Annual Financial Statements on a ''going concern'' basis;

e) the Directors have laid down internal financial controls to be

followed by the Company and that such internal financial controls are adequate and are operating efficiently; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including review of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during financial year 2016-17.

4. Independent Directors'' declaration

The Company has received necessary declaration from each of independent director of the Company under Section 149(7) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), that they meet the criteria of independence as laid down under the Companies Act, 2013 and the Listing Regulations.

5. Directors'' Appointment Criteria and Remuneration Policy etc.

The Nomination & Remuneration Committee has formulated criteria for determining qualifications, positive attributes and independence of the Directors as well as Remuneration Policy for the Company as mandated under Section 178(3)/(4) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.

The above referred Policy is enclosed as Annexure II which forms part of this report.

6. Auditors & Auditor''s Reports

(a) Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013, the term of the present Statutory Auditors of the Company, M/s Anil S. Gupta & Associates, Chartered Accountants (Firm Registration No.004061N), is due for completion at the conclusion of the ensuing 28th Annual General Meeting of the Company. The Board of Directors of the Company, on the recommendation of the Audit Committee, at their meeting held on May 30, 2017, have recommended to the shareholders for appointment of M/s. V. Sachdeva & Associates, Chartered Accountants (Firm Registration No-004417N), as the new Statutory Auditors of the Company at the ensuing 28th Annual General Meeting of the Company for a term of 5 (five) years from the conclusion of 28th Annual General Meeting till the conclusion of 33rd Annual General Meeting of the Company, subject to ratification by the shareholders at every Annual General Meeting. Accordingly, a resolution, proposing appointment of M/s. V. Sachdeva & Associates, Chartered Accountants, as the new Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013, has been set out in the Notice of the 28th Annual General Meeting of the Company.

The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, would be in accordance with the applicable provisions of the Act and rules made there under. M/s V. Sachdeva & Associates, Chartered Accountants, also hold a Peer Review Certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Board place on record its appreciation for the services rendered by outgoing Statutory Auditors of the Company, M/s Anil S. Gupta & Associates.

(b) Statutory Auditor''s Reports

The Auditor''s Reports given by M/s Anil S. Gupta & Associates, Statutory Auditors on the financial statement of the Company for the financial year 2016-17 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Reports. Further, during the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

(c) Secretarial Auditor

In terms of Section 204 of the Companies Act, 2013 the Audit Committee recommended and the Board of Directors in their meeting held on May 30, 2017 has appointed M/s Ranjana Gupta & Associates, a firm of Company Secretaries in Practice (C.P No. 9920) as the Secretarial Auditors of the Company to conduct the secretarial audit for the financial year 2017-18. The Company has received their consent for appointment.

(d) Secretarial Audit Report

The Secretarial Audit was conducted by M/s Ranjana Gupta & Associates, Company Secretaries (C.P No. 9920) for the financial year 2016-17. The Report given by the Secretarial Auditors is annexed as Annexure - III and forms integral part of this Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report; hence no explanation by Directors is warranted.

During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

(e) Cost Auditor

As per Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014, on the recommendation of the Audit Committee, the Board of Directors appointed Mr. Krishan Singh Berk, Cost Accountants (Membership No. 2724) as Cost Auditor of the Company for the financial year 2017-18. The Company has received their consent that the appointment is in accordance with the applicable provisions of the Act and rules framed there under and they are not disqualified to be appointed as Cost Auditors. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and in terms of the Companies Act, 2013 and Rules there under a requisite resolution for ratification of remuneration of Cost Auditors by the members has been set out in the Notice of the 28th Annual General Meeting of the Company.

The Cost Audit Report for Financial Year 2015-16 was filed to Registrar of Companies on September 23, 2016. Further, the Cost Audit Report for Financial Year 2016-17 will be filed with the Registrar of Companies in due course.

7. Particulars of Loans, Guarantees or Investments under Section 186

Details of the loans given, guarantees or securities provided (if any) and investments made by the Company along with their purposes, have been disclosed in the financial statements. Please refer to Note No. 12 in the standalone financial statement.

8. Contracts and Arrangements with Related Parties

All contracts/ arrangement/ transactions entered with Related Parties during the year under review were on arm''s length basis and in the ordinary course of business. Due approvals from Board and Audit Committee were taken under the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under. Further, no approval from shareholder required for any related party transaction during the year under review. There are no ''material'' related party transactions during the year under review with the Promoters, Directors, Key Managerial Personnel or any other related entity as defined under Regulation 23 of the Listing Regulations read with ''Related Party Transactions Policy'' of the Company. Therefore, disclosure in form AOC-2 in terms of Section 134(3)(h) of the Companies Act, 2013 are not required.

Members may refer to Note No. 47 to the financial statements which sets out related party disclosures pursuant to AS-18.

Your Company has formulated a policy on related party transactions which is also available on Company''s website at https://www.fiemindustries.com. This policy deals with the governing framework for review and approval of related party transactions.

The web-link of the same has been provided in the Corporate Governance Report.

9. Transfer to Reserves

Your Company has transferred Rs.350.00 lacs to the General Reserve from the profits of the Company.

10. Material changes and commitment affecting financial position of the Company / Change in the Nature of the Business

There are no material changes and commitments, affecting the financial position of the Company which has occurred after the close of financial year till the date of this Report.

11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Details of Energy Conservation, Technology Absorption, Research and Development and Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014 are given in Annexure IV to this Report.

12. Risk Management

Company''s approach to address business risks is comprehensive and includes periodic review of such risks and a framework for mitigating, controls and reporting mechanism of such risks. As per Listing Regulations, the Board of Directors of the Company are responsible for framing, implementing and monitoring the Risk Management plans of the Company. The Company has defined a "Risk Management Policy" and the same has been approved by the Board of Directors of the Company. Audit Committee plays a vital role in overseeing risk management.

A brief about the risk management of the Company is also given in the Management Discussion and Analysis Report.

13. Corporate Social Responsibility (CSR)

The Company has set up a dedicated trust, namely ''Fiem Foundation'' as CSR Vehicle for undertaking Company''s CSR programmes as per Schedule VII read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Company whole-heartedly supported the CSR provisions and remained compliant with the statutory requirements.

Your Company always seeks ways to make a positive impact on the society at large through various CSR activities. In our pursuit of Corporate Social Responsibility as per the Companies Act, 2013, we have selected ''health cure'' as one of area of intervention and way of serving the humanity.

Towards this noble cause, we have collaborated with Social Welfare Unit of AIIMS, Delhi and disburse the financial assistance amount as and when they recommend to help the poor and needy patients suffering from cancer and other life threatening diseases for getting their treatment done in AIIMS. We are doing this work through our CSR Vehicle ''Fiem Foundation.''

During the financial year 2016-17, through the help of AIIMS, Company helped many poor and indigent patients who are not able to bear their medical treatment expenses due to their weak financial conditions.

Company does various other social welfare programme like arranging mass marriages for poor girls, free eye operation and other activities to help underprivileged. Company also providing financial support to ''Kutch Vikas Trust'' which organizing eye and dental operation camps for poor patients.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For details regarding the CSR Committee, please refer the Corporate Governance Report, which forms part of Annual Report. The CSR Policy is available on the website of the Company (URL: www.fiemindustries. com/investors).

14. Board Evaluation

Performance Evaluation for Board is aimed to use constructively as a mechanism to improve Board''s effectiveness, maximize strengths and tackle weaknesses. It involves questionnaires to be filled by every Director about his own performance (self-assessment), performance of Board as whole, performance of Chairman and performance of respective Committee(s) where he is a member.

Initially, Nomination & Remuneration Committee carry out the primary evaluation of every Director''s performance which is subject to next level of evaluation by the Board and Independent Directors. As per Section 178(2) of the Act, the Committee is required to conduct the performance evaluation of every Individual Director. As per Performance Evaluation framework of the Company, the evaluation process consists of evaluation on the basis of filled questionnaires'' received from all directors and opinions, inputs from all Committee members and any other information as may be required by the Committee.

The outcome of Committee in respect of Independent Directors is subject to final evaluation by the Board. Outcome of Committee in respect of Non-Independent Directors is subject to final evaluation by the Independent Directors. Performance evaluation of Board as a whole as well as Chairman of the Board is also conducted by the Independent Directors.

15. Highlights of the performance and financial position of Subsidiary and Joint Venture Company

a) Fiem Industries Japan Co., Ltd. (Wholly-owned

Subsidiary): The Company was set-up in Japan as an extended arm of the Company for liaison with Japanese customers like Honda, Suzuki and Yamaha etc., support in Designing, R&D and new business development. While the parent Company (Fiem) is getting full support in above areas, the financials of the subsidiary are at very small scale. The financial performance of the Company is as under:

Subsidiary- Fiem Industries Japan Co. Ltd.

(Amount In INR)

FY 16-17

FY 15-16

% of shareholding

100%

100%

Turnover

2,38,74,639

1,50,95,827

Other Operating Income

0

16,18,751

Other Income

326

34,279

Total Income

2,38,74,965

1,67,48,857

Total expenses

2,14,93,356

1,40,11,773

Profit/(Loss) before taxation

23,81,609

27,37,084

Provision for taxation

2,87,532

6,40,991

Profit/ (Loss) after taxation

20,94,078

20,96,093

b) Centro Ricerche FIEM HorustecH S.r.l. (Joint venture in Italy): The Company was set-up in Italy as a 50:50 JV with Horustech Lighting of Italy, which is a Designing Company. The purpose of setting-up of JV was to strengthen R&D and Designing capabilities of the Company. The JV is working with this objective. The financial performance of the JV Company is as under:

Joint Venture- Centro Ricerche FIEM HorustecH S.r.l

(Amount In INR)

FY 16-17

FY 15-16

Extent of Holding %

50%

50%

Turnover

90,21,342

92,09,416

Total Income

90,21,342

92,09,416

Total expenses

90,42,167

97,64,492

Profit/(Loss) before taxation

(20,825)

(5,55,076)

Provision for taxation

-

-

Profit/ (Loss) after taxation

(20,825)

(5,55,076)

The financial position of the subsidiary and Joint Venture Company is given in AOC-1 in the financial statements.

16. Other statutory disclosures as required under Rule 8(5) of the Companies (Accounts) Rules, 2014

i. Financial summary/ highlights are already mentioned in the beginning of the report.

ii. Change in Directors and Key Managerial Personnel:

- The Board of Directors, at its meeting held on May 30, 2017, upon recommendation of the Nomination & Remuneration Committee, re-appointed Mr. Kashi Ram Yadav (DIN: 02379958) as Whole-time Director of the Company, w.e.f. October 25, 2017 to hold the office for a period of 3 years, subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.

- The Board of Directors, on May 30, 2017, upon recommendation of the Nomination & Remuneration Committee, also re-appointed Mr. J.S.S. Rao (DIN: 00014320) as Whole-time Director of the Company, w.e.f. December 1, 2017 for a period of 3 years, subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.

- Pursuant to provisions of Section 152 of the Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Mrs. Seema Jain (DIN: 00013523) and Mr. J.S.S. Rao (DIN: 00014320), Directors of the Company liable to retire by rotation and being eligible have offered themselves for re-appointment and they are not disqualified under Section 164(2) of the Companies Act, 2013.

- Mr. Ashok Kumar Sharma (DIN: 07610447) was appointed as the Independent Director of the Company on September 10, 2016 to fill the vacancy arose due to the resignation of Mr. Abhishek Jain on September 8, 2016.

- Mr. Jawahar Thakur (DIN: 07650035) was appointed as the Independent Director of the Company on November 12, 2016 to fill the vacancy arose due to the resignation of Mr. Charoen Sachamuneewongse on October 20, 2016.

- The details of Directors being recommended for appointment/ re-appointment as required under the Listing Regulations are contained in the Notice convening the ensuing Annual General Meeting of the Company.

- Mr. J.K. Jain, Chairman & Managing Director; Mr.

O. P Gupta, Chief Financial Officer and Mr. Arvind K. Chauhan, Company Secretary are the Key Managerial Personnel of the Company within the meaning of Section 203 of the Act.

- None of the Key Managerial Personnel has resigned or appointed during the year under review.

iii. There is only one Subsidiary and one Joint Venture Company of the Company and there was no change during the year about numbers of subsidiary or Joint Venture Company.

iv. Details relating to Deposits:

The Company has not accepted any Deposit from public within the meaning of the Companies (Acceptance of Deposit) Rules, 1975 or Chapter V of the Companies Act, 2013 and as such there was no outstanding as on the date of the balance sheet on account of principal or interest on deposits from public.

v. No significant and material orders were passed by any Regulator or court or tribunal impacting the going concern status and Company''s operations in future.

vi. Details in respect of adequacy of internal financial controls with reference to the Financial Statement:

The Company has in place adequate internal financial controls, which are commensurate to size and operations of the Company. During the year, no area of concern, continuing failure or major weakness was observed.

vii. Other disclosures required under provisions of the Companies Act, 2013 and the Listing Regulations, as may be applicable:

- As per provisions of Section 177(8) of the Act, composition of the Audit Committee has been disclosed under Corporate Governance Report. The Board, during the year under review, had accepted all the recommendation made to it by the Audit Committee.

- Establishment of vigil mechanism as per provision of Section 177(10) of the Act: Company has already at place a vigil mechanism namely, ''Whistle Blower Policy''. The details of the same are reported under Corporate Governance Report;

- The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the

Company Secretary.

- Disclosure as required under Section 62(1)(b) of the Act read with Sub-rule 9 of Rule 12 of the Companies (Share and Capital Debentures) Rules, 2014, are not applicable, as during the year no shares were issued under ESOS / ESOP or under sweat equity scheme.

- Disclosure as required under Section 43(a)(ii) of the Act read with Sub-rule 4 of Rule 4 of the Companies (Share and Capital Debentures) Rules, 2014, are not applicable as during the year no equity shares with differential rights as to dividend, voting or otherwise were issued.

Corporate Governance Report & Management Discussion & Analysis Report

Pursuant to Listing Regulations, Management Discussion & Analysis Report, Report on Corporate Governance, Certificate on Corporate Governance, issued by Practicing Company Secretary and the declaration by the Chairman and Managing Director regarding affirmation for compliance with the Company''s Code of Conduct forms part of the Annual Report.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated financial statements and Accounting Standard (AS) - 27 on Financial reporting of interest in Joint Ventures, the audited consolidated financial statements are provided in the Annual Report. The accounts of Wholly-owned Subsidiary company ''Fiem Industries Japan Co., Ltd.'' and 50:50 JV Company ''Centro Ricerche Fiem HorustecH S.r.l'' are consolidated with the accounts of the Company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has in place a formal policy for prevention of sexual harassment of its women employees in line with "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, there was no complaint filed under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Acknowledgement

The Directors hereby wish to place on record their appreciation of the efficient and loyal services rendered by each and every employee, without whose whole-hearted efforts, the overall performance would not have been possible. Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. In last, but most important, your Directors also wish to place on record their deep sense of appreciation for the patronage and confidence reposed by its valued OEM customers.

For and on behalf of the Board of

Fiem Industries Limited

Sd/-

J.K. Jain

Place : Rai, Sonepat (HR.) Chairman & Managing Director

Date : May 30, 2017 (DIN: 00013356)


Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty Sixth Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended on March 31, 2015.

FINANCIAL SUMMARY / HIGHLIGHTS

As mandated under Rule 8 of the Companies (Accounts) Rules, 2014, the Director's Report is prepared based on the Standalone Financial Statements of the Company. However, this report also contain a separate section wherein a report is given on the performance and financial position of the Wholly-owned subsidiary and Joint Venture Company, the financials of which are included in the consolidated financial statements of the Company.

Company's financial performance for the year under review along-with previous year's figures are given hereunder on Standalone basis:

(Rs. in Lacs)

Particulars Standalone % Increase or Decrease

2014-15 2013-14

Gross Sales 90028.78 78804.10 14.24%

Sales, Net of Excise 81949.78 71410.57 14.75%

Earnings before Tax, Depreciation

& Finance Cost 10333.50 8914.15 15.92%

Less: Cost of Finance 1204.08 1443.89 -16.60%

Profit before Tax & Depreciation 9129.42 7470.26 22.21%

Less: Depreciation 3063.35 2178.53 40.62%

Profit Before Tax 6066.07 5291.73 14.63%

Less: Tax Expenses 1839.68 1551.74 18.56%

Profit After Tax 4226.39 3739.99 13.00%

Add: Balance brought forward

from previous year 10621.41 8096.13

Profit available for appropriation 14847.80 11836.12 25.44%

Less: Transfer to General Reserve 425.00 375.00 13.33%

Less: Proposed Dividend 837.36 717.73 16.67%

Less: Corporate Dividend Tax 170.46 121.98 39.74%

Less: Transitional adjustments to

Fixed Assets as per Schedule II of Companies Act 2013 193.57 - -

Surplus - Closing Balance 13221.41 10621.41 24.48%

Earnings Per Share (Rs.) 35.33 31.27 12.98%

Dividend

Based on the Company's performance, your Directors have recommended a Dividend of Rs. 7/- per equity share of face value of Rs. 10/- each (i.e. 70%) for the financial year ended March 31, 2015, amounting to Rs. 837.36 Lacs. The Dividend payout is subject to approval of members at the ensuing Annual General Meeting of the Company.

The Dividend payout for the year under review has been recommended in accordance with the Company's policy to pay sustainable dividend and to retain resources requirements for long term growth objectives of the Company to be met from internal accruals.

STATUTORY DISCLOSURES AS PER PROVISIONS OF SECTION 134 OF THE COMPANIES ACT, 2013 (the ACT)

1. Extract of Annual Return

Pursuant to sub section 3(a) of Section 134 and sub-section (3) of Section 92 of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 an extract of Annual Return in form MGT-9 as on March 31, 2015 has been prepared and enclosed as Annexure I, which forms part of this report.

2. Number of meetings of the Board

Regular meetings of the Board are held to discuss and decide on various business policies, decisions and performance of the Company. Due to business exigencies, certain business decisions are taken by the Board through resolution passed by circulation from time to time.

The Board met five times in financial year 2014-15 viz., on May 28, 2014, August 9, 2014, November 10, 2014, December 5, 2014 and February 12, 2015. One separate meeting of Independent Directors was also held on December 5, 2014. Detailed information on the meetings of the Board is included in the report on Corporate Governance, which forms the part of the Annual Report.

3. Independent Directors' declaration

All Independent Directors of the Company have given declaration under Section 149(7) of the Act, that they meet the criteria laid down in Section 149(6) of the Act read with Clause 49 of the Listing Agreement.

4. Directors' Appointment Criteria and Remuneration Policy etc.

The Nomination & Remuneration Committee has formulated criteria for determining qualifications, positive attributes and independence of the Directors as well as Remuneration Policy for the Company as mandated under section 178(3)/(4) and Clause 49.IV.B.4 of the Listing Agreement.

The above referred Policy is enclosed as Annexure II which forms part of this report.

5. Auditors & Auditor's Report

(a) Statutory Auditors

Pursuant to section 139 of the Companies Act, 2013, M/s Anil S. Gupta & Associates, Chartered Accountants (ICAI Firm Registration No.004061N), Statutory Auditors of the Company, were re-appointed in the previous Annual General Meeting of Company to hold office till the conclusion of 28th Annual General Meeting to be held in the calendar year 2017. However, their continuation is subject to ratification by the members at every Annual General Meeting. They have confirmed their eligibility to the effect that their continuation as Statutory Auditor, if ratified, would be within the prescribed limits under the Act and they are not disqualified for such continuation. Accordingly, the Board of Directors recommend the ratification by the members, the continuation of M/s Anil S. Gupta & Associates, Chartered Accountants, as the statutory auditors of the Company to hold office till the conclusion of 28th Annual General Meeting to be held in the calendar year 2017on such remuneration to be decided by the Board.

(b) Statutory Auditor's Reports

The Auditor's Reports on standalone as well as on consolidated financial statements are self-explanatory and do not call for any further comments. These Reports don't contain any qualification, reservation, adverse remarks or disclaimer.

(c) Secretarial Auditor

Pursuant to Section 204 of the Act, the Company had appointed M/s Ranjana Gupta & Associates, Practicing Company Secretaries, Delhi as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Company provided all assistance and facilities to the Secretarial Auditor for conducting the Audit.

(d) Secretarial Audit Report

Based on the Secretarial Audit, the Secretarial Auditor has furnished a report to the Company for the financial year 2014-15 which is annexed to this report as Annexure III. There is no qualification, reservation or adverse remark in the Secretarial Audit Report; hence no explanation by Directors is warranted.

(e) Cost Auditor

For financial year 2014-15, Cost Audit was not applicable on the Company. The Cost Audit Report for financial year 2013-14 was filed on 23/09/2014 within due date for filing. For the financial year 2015-16, Cost Audit is applicable on the Company and pursuant to section 148(3) of the Companies Act read with Rule 6(2) of Companies (Cost Records and Audit) Rules, 2014, Mr. Krishan Singh Berk, Cost Accountant (membership No. 2724) has been appointed as Cost Auditor of the Company at the Board Meeting held on 29th May, 2015.

6. Particulars of Loans, Guarantees or Investments under Section 186

Particulars of loans given, investment made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement of the Company (Please refer to Note No. 11 to the standalone financial statement).

7. Contracts and Arrangements with Related Parties

All contract/arrangement/transactions entered by the Company during the Financial Year 2014-15, with the related parties were on arm's length basis. During the year, Company has not entered into contract/arrangement/ transactions with related parties which could be considered material in accordance with the Company's 'Subsidiary & Related Party Transactions Policy'. The said policy is available on the Company's website (www.fiemindustries.com).

During the year, Company and one of its Whole-time Directors have entered into a Contract/ arrangement, which is a related party transaction pursuant to Section 188(1), AS-18 and Clause 49 of the Listing Agreement. The particulars of the transaction are disclosed in Form AOC-2 as Annexure IV.

Further, kindly refer to Note no 45 of the Standalone Financial Statements of the Company for details on all related party transactions.

8. State of the Company's affairs / Business Review

The financial year 2014-15 was another successful year, where despite a challenging economic environment; business of the Company grew well, ahead of Industry.

The macro business environment continued to remain muted during the previous year, however economy is now slowly improving because of industry friendly and growth oriented policies of the Govt. Amid all these developments, your Company delivered healthy results. Company achieved a net turnover of Rs.819.50 Crore in comparison to Rs. 714.11 Crores in previous financial year. Company has also been able to increase the Profit after tax from Rs. 37.40 Crore in 2013-14 to Rs. 42.26 Crore in 2014-15. One important development during the year was Company's winning of LED Bulb tender from EESL for 7.74 lac LED Bulbs, which was completed by the Company in last quarter of FY 2014-15.

The Operational Performance of the Company has remained among best in the Industry with an EBIDTA margin of 12.52%. The management has clear vision and mission as how to competitively differentiate by defining the right values proposition for the customer and maintain excellence in all parameters of operations, whether Quality, Cost, Design, Development, Delivery and overall Management systems.

9. Transfer to Reserves

Your Company has transferred Rs. 425.00 Lacs to the general reserve from the profits of the Company.

10. Material changes and commitment affecting financial position of the Company / Change in the Nature of the Business

There are no material changes and commitments, affecting the financial position of the Company which has occurred after the close of financial

year till the date of this Report. However, there are two important developments on LED front. One is the awarding of tender by EESL (Energy Efficiency Services Ltd) to Company for LED Street Lights in Delhi under South Delhi Municipal Corporation. The value of contract is Rs. 99.79 Crores. Second tender by EESL is for supply 70,00,000 LED 9W Bulbs at the rate of Rs. 72.40 per Bulb (total value Rs. 50.68 Crore). Both these orders are to be completed during current year.

11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Details of Energy Conservation, Technology Absorption, Research and Development and Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014 are given in Annexure V to this Report.

12. Risk Management

During the year, your Directors has re-visited the terms of reference of the Audit Committee by adding various issues related to risk management and the name of the Committee has been changed to Audit & Risk Management Committee and Committee also entrusted with the responsibility to assist the Board in risk management framework and implementation of adequate risk management mechanism. A Risk Management Policy was framed and implemented by the Company.

A brief about the risk management of the Company is also given in the Management Discussion and Analysis Report.

13. Corporate Social Responsibility (CSR)

Your Company being a responsible corporate citizen has been taking initiatives for society at large under Corporate Social Responsibility provisions prescribed under the Companies Act, 2013. Financial Year 2014- 15, being first financial year for the Company to implement its CSR programme as per section 135 of the Act in a more structured way, hence during the year company used its resources to lay down the basic frame work for undertaking the CSR activities in accordance with the provisions of the Act, including finalizing the CSR Policy, constituting committee for undertaking CSR activities, identifying the CSR projects which meet the Company's policy and statutory requirements. The Company has set up a dedicated trust, namely Fiem Foundation for undertaking CSR programmes and has contributed Rs.75,33,000/- in the corpus of trust for implementation of CSR programme as per Schedule VII read with Companies (Corporate Social Responsibility Policy) Rules, 2014. Company whole-heartedly supported the CSR provisions and remained compliant with the requirement of Section 135 which mandated CSR spent equal to 2% of average profits for the last three years.

In terms of the provisions of Section 135 of the Companies Act, 2013 (Act) your Company has constituted a CSR Committee and the Composition of the CSR Committee has been disclosed in the Corporate Governance Report forming part of the Annual Report. The Company also adopted CSR Policy which is available on its website www.fiemindustries.com.

Corporate Social Responsibility Report, pursuant to clause (o) of Sub- section (3) of Section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 forms part of the Directors' Report and enclosed as Annexure VI.

14. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the performance evaluation of each individual directors as well as the evaluation of the working of its various Committees.

Structured questionnaires were prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board. The performance evaluation of the Independent Directors was carried out by the entire Board.

The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process. Nomination &

Remuneration Committee supported the entire process in terms of provisions of the Act.

15. Performance and Financial position of Subsidiary and Joint venture company

a) Fiem Industries Japan Co., Ltd. (wholly-owned subsidiary): The Company was set-up in Japan as an extended arm of the Company for liaison with Japanese customers like Honda, Suzuki and Yamaha etc., support in Designing, R&D and new business development. While the parent Company (Fiem) is getting full support in above areas, the financials of the subsidiary are at very small levels. The financial performance of the Company was as under:

Subsidiary- Fiem Industries Japan Co. Ltd.

(Amount In INR)

FY 14-15 FY 13-14

% of shareholding 100% 100%

Turnover 31,21,586 206,16,168

Other Operating Income 66,56,400 -

Other Income 43,066 4,813

Total Income 98,21,052 206,20,981

Total expenses 102,91,590 190,02,648

Profit/(Loss) before taxation (4,70,538) 16,18,333

Provision for taxation 41,998 2,29,495

Profit/ (Loss) after taxation (5,12,536) 13,88,838

b) Centro Ricerche FIEM HorustecH S.r.l. (Joint venture in Italy): The Company was set-up in Italy as a 50:50 JV with Horustech Lighting of Italy, which is Designing Company. The purpose of setting-up of JV was to strengthen R&D and Designing capabilities of the Company. The JV is working with this objective. The financial performance of the JV Company was as under:

Joint Venture- Centro Ricerche FIEM HorustecH S.r.l

(Amount In INR)

FY 14-15 FY 13-14

Extend of Holding % 50% 50%

Turnover 79,18,803 12,94,387

Total Income 79,18,803 12,94,387

Total expenses 53,31,630 39,14,374

Profit/(Loss) before taxation 25,87,172 -26,19,987

Provision for taxation - -

Profit/ (Loss) after taxation 25,87,172 -26,19,987

The financial position of the subsidiary and Joint Venture Company is given in AOC-1 in the financial statements.

16. Directors' Responsibility Statement Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) 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 as at end of financial year ended March 31, 2015 and of the profit and loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual financial statements on a going concern' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating efficiently; and

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

17. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES, 2014

i. Financial summary/ highlights are already mentioned in the beginning of the report.

ii. Change in Directors and Key Managerial Personnel:

The Board of Directors, at its meeting held on August 1, 2015, upon recommendation from the Nomination & Remuneration Committee, re-appointed Mr. J.K. Jain (DIN: 00013356) as Managing Director of the Company, w.e.f. August 7, 2015 to hold the office for a period of five years, subject to the approval of shareholders at the ensuing Annual General Meeting of the Company.

The Board of Directors, on August 1, 2015, upon recommendation from the Nomination & Remuneration Committee, also re-appointed Mr. Rahul Jain (DIN: 00013566) as Whole-time Director of the Company for a period of five years w.e.f. October 1, 2015, subject to the Approval of shareholders at the ensuing Annual General Meeting of the Company.

Pursuant to provisions of Section 152 of the Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Mrs. Seema Jain (DIN: 00013523) and Ms. Aanchal Jain (DIN: 00013350), Directors of the Company liable to retire by rotation and being eligible have offered themselves for re-appointment and they are not disqualified under Section 164(2) of the Companies Act, 2013.

Shri Padur Narayana Viswanathan was appointed as Independent Director w.e.f. 9th August, 2014. He passed away in December, 2014. The Board places on record its deep appreciation for the valuable contribution made by him during his short stint as Director of the Company. As per the provisions of the Act read with the Articles of Association of the Company, and on the recommendation of the Nomination & Remuneration Committee, Board in their meeting held on February 12, 2015 had appointed Mr. Mohan Bir Sahni as an Independent Director in place of Late P.N. Viswanathan to fill the casual vacancy arose due to his death.

The details of Directors being recommended for appointment/ re-appointment as required under Clause 49 of the Listing Agreement are contained in the Notice convening the ensuing Annual General Meeting of the Company.

Mr. J.K. Jain, Chairman & Managing Director; Mr. O. P. Gupta, Chief Financial Officer and Mr. Arvind K. Chauhan, Company Secretary are the Key Managerial Personnel of the Company within the meaning of section 203 of the Act. They were already in office before the commencement of the Act. During the year, their position as Key Managerial Personnel has been formalised by noting in the Board meeting.

None of the Key Managerial Personnel has resigned or appointed during the year under review.

iii. There is only one subsidiary and one joint venture of the Company and there was no change during the year about numbers of subsidiary or Joint Venture Company.

iv. Details relating to Deposits:

The Company has not accepted any Deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975 or Chapter V of the Companies Act, 2013 and as such no details are required to be furnished.

v. No significant and material orders were passed by any Regulators or court or tribunals impacting the going concern status and company's operations in future.

vi. Details in respect of adequacy of internal financial controls with reference to the Financial Statement:

The Company has in place adequate internal financial controls, which are commensurate to size and operations of the Company. During the year, no area of concern, continuing failure or major weakness was observed.

vii. Other disclosures required under provisions of Companies Act, 2013 and Listing Agreement, as may be applicable:

As per provisions of Section 177(8) of the Act, composition of the Audit & Risk Management Committee has been disclosed under Corporate Governance Report. The Board, during the year under review, had accepted all the recommendation made to it by the Audit & Risk Management Committee.

Establishment of vigil mechanism as per provision of Section 177(10) of the Act: During the year the Company has instituted a vigil mechanism namely, 'Whistle Blower Policy'. The details of the same are reported under Corporate Governance Report;

Disclosure regarding remuneration of Directors and employees as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure VII & Annexure VIII.

Disclosure as required under Section 62(1) (b) of the Act read with Sub-rule 9 of Rule 12 of the Companies (Share and Capital Debentures) Rules, 2014, are not applicable, as during the year no shares were issued under- ESOS / ESOP or under sweat equity scheme.

Disclosure as required under Section 43(a) (ii) of the Act read with Sub-rule 4 of Rule 4 of the Companies (Share and Capital Debentures) Rules, 2014, are not applicable as during the year no equity shares with differential rights as to dividend, voting or otherwise were issued.

There are no public issue / preferential allotment proceeds pending to be utilized during the year, hence information required under Clause 43 of the Listing Agreement are not applicable.

CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, Management Discussion and Analysis Report, Report on Corporate Governance, Certificate on Corporate Governance, issued by Practising Company Secretary and the declaration by the Chairman and Managing Director regarding affirmation for compliance with the Company's Code of Conduct form part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) – 21 on Consolidated financial statement and Accounting Standard (AS) – 27 on Financial reporting of interest in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. The accounts of wholly owned subsidiary company 'Fiem Industries Japan Co., Ltd.' and 50:50 JV Company 'Centro Ricerche Fiem Horustech S.r.l' are consolidated with the accounts of the Company.

The policy of determining material subsidiary as approved, may be accessed on the Company's website (www.fiemindustries.com).

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a formal policy for prevention of sexual harassment of its women employees in line with "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, there was no complaint filed under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. The hard work and unstinting efforts of the employees have enabled the Company to sustain and further consolidate its position in the industry.

Your Company continues to occupy a place of respect among its stakeholders and all valued OEM customers. Your Directors would like to express their sincere appreciation for assistance and co-operation received from the vendors and stakeholders including banks, Central and State Government authorities. It will be the Company's endeavour to build and nurture these strong relations with its stakeholders.

The Board deeply acknowledges the trust and confidence placed by customers and all shareholders.

For and on behalf of the Board of

Fiem Industries Limited

-Sd-

J.K. Jain

Place : Rai, Sonepat (HR.) Chairman & Managing Director

Date : 01.08.2015 (DIN: 00013356)


Mar 31, 2014

The Members,

The Directors have pleasure in presenting the 25th Annual Report on the business and operations of the Company, together with the audited accounts for the financial year ended March 31, 2014.

FINANCIAL RESULTS

The company''s financial performance, for the year ended March 31, 2014 is summarised below:

(Rs.in Lacs) Particulars Consolidated 2013-14 2012-13

Gross Sales 79009.95 66469.85

Sales, Net of Excise 71616.01 60308.87

Earning before Tax, 8905.81 7066.96 Depreciation & Finance Cost

Less: Cost of Finance 1445.27 1296.52

Profit before Tax & Depreciation 7460.54 5770.44

Less: Depreciation 2178.99 1834.94

Profit Before Tax 5281.55 3935.50

Less: Tax Expenses 1554.03 1163.36

Profit After Tax 3727.52 2772.14

Add: Balance brought 8081.46 6144.13 forward from previous year

Profit available for 11808.98 8916.27 appropriation

Less: Transfer to General Reserve 375.00 275.00

Less: Proposed Dividend 717.73 478.49

Less: Corporate Dividend Tax 121.98 81.31

Surplus -Closing Balance 10594.27 8081.47

Earning Per Share (Rs.) 31.16 23.17

Particulars Standalone 2013-14 2012-13

Gross Sales 78804.10 66048.55

Sales, Net of Excise 71410.57 59887.57

Earning beforeTax,Depreciation & 8914.15 7022.09 Finance Cost

Less: Cost of Finance 1443.89 1292.99

Profit before Tax & Depreciation 7470.26 5729.10

Less: Depreciation 2178.53 1834.75

Profit Before Tax 5291.73 3894.35

Less: Tax Expenses 1551.74 1162.94

Profit After Tax 3739.99 2731.41

Add: Balance brought forward from previous year 8096.13 6199.53

Profit available for appropriation 11836.12 8930.94

Less: Transfer to General Reserve 375.00 275.00

Less: Proposed Dividend 717.73 478.49

Less: Corporate Dividend Tax 121.98 81.31

Surplus -Closing Balance 10621.41 8096.14

Earning Per Share (Rs.) 31.27 22.83

BUSINESS REVIEW

Year 2013-14, has remained a tough year for Auto Industry and except two- wheeler all other vehicle segments shown negative growth. Because of two- wheeler''s 4% growth, Automobile Industry has shown a growth of 4%. Even in two wheelers, scooters segment has registered a growth of more than 20%. Otherwise, all other segments have shown negative growth - passenger vehicle near minus 4% and commercial vehicle just below minus 20%.

The Operational Performance of the Company has remained among best in the Industry. The management has clear vision and mission as how to competitively differentiate by defining the right values proposition for the customer and maintain excellence in all parameters of operational excellence, whether Quality, Cost, Design, Development, Delivery and overall Management Systems. This excellence is acknowledged by the esteemed OEM customers of the Company by way of repetitive QCDDM Awards and Quality Certificates.

Regarding financial performance, despite a tough year for the automobile industry, the Company has recorded yet another year of strong performance with a growth of 19.24% in FY 2013-14 and achieved a net turnover of Rs. 714.11 Crore in comparison to Rs. 598.88 Crores in previous year. Company has also been able to increase the Profit after tax from Rs. 27.31 Crores in FY 2012-13 to Rs. 37.40 Crore in 2013-14, with a growth of 36.95%. This shows inherent strength of the company.

DIVIDEND

Considering the performance of the company, Board pleased to recommend a dividend of 60% (Rs. 6.00 per share) from the profits of the Company, for the year 2013-14 to the equity shareholders to be determined by Book Closure. The Board recommended the same for approval by the shareholders in the ensuing Annual General Meeting. If approved by the shareholders, the dividend will be paid with in the period stipulated under Companies Act, 2013.

TRANSFER TO RESERVES

An amount of Rs. 375.00 lacs is transferred to General Reserve Account out of the profits for the financial year ended 2013-14.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per requirement of Clause 49 of the Listing Agreement, Management Discussion and Analysis Report for the year under review, is presented in addition to the Directors'' Report in a separate section forming part of Annual Report.

CORPORATE GOVERNANCE REPORT

As per requirement of Clause 49 of the Listing Agreement, a Corporate Governance Report for the year under review is presented in a separate section forming part of Annual Report.

DIRECTORS

Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, may offer themselves for re- appointment at Annual General Meeting. Consequently, Shri Kashi Ram Yadav and Shri J.S.S. Rao, Directors will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment in accordance with the provisions of the Companies Act, 2013.

Further, Shri Iqbal Singh, Shri Subodh Kumar Jain, Shri Charoen Sachamuneewongse, Shri Amitabh Prakash Agrawal and Shri Vinod Kumar Malhotra were appointed as Independent Directors of the Company at various times, in compliance with the requirement of the Clause 49 of the listing agreement entered with the Stock Exchanges. Existing appointments of all these Directors are in compliance with the Companies Act, 1956, and their appointment is subject to retire by rotation.

As per the provisions of Section 149(4) of Companies Act, 2013 (the Act) which has come into force with effect from 1st April, 2014, every listed company is required to have at least one third of the total number of Directors as Independent Directors. Further, Section 149(10) of the Act provides that an Independent Director shall hold office for a term up to five consecutive years on the Board of a company and is not liable to retire by rotation pursuant to Section 149(13) read with Section 152 of the Act.

The Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement which would be effective from October 1, 2014 inter alia stipulates the conditions for the appointment of Independent Directors by a listed company.

In view of the fact that existing appointment of all Independent Directors is subject to retire by rotation and under Companies Act, 2013 they are not subject to retire by rotation and they can hold office for a term up to five consecutive years and considering the other provisions of Companies Act , 2013 and Clause 49 of the Listing Agreement, it is proposed to freshly appoint all the above directors as Independent Directors under Section 149 of the Act and Clause 49 of the Listing Agreement to hold office for 5 (five) consecutive years for a term up to the conclusion of the 30th Annual General Meeting of the Company in the calendar year 2019 and they would not be subject to retire by rotation. The Nomination and Remuneration Committee has also recommended the fresh appointments of all these Independent Directors.

In the opinion of the Board, each of the above Independent Directors fulfil the conditions for appointment as Independent Directors as specified in the Act and the Listing Agreement. The above Independent Directors are independent of the management.

Brief resume of the above Independent Directors, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships / chairmanships of Board and Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are given in explanatory statement to Notice of AGM.

The Board commends the appointment of each Independent Director.

Further, during the year, Shri C.S. Kothari, Independent Director has resigned from the Directorship w.e.f. February 13, 2014. Because of his resignation, the total independent directors reduced to 5 instead of minimum required strength of 6.

Therefore, Pursuant to the provisions of Section 161(1) of the Act and the Articles of Association of the Company, Board of Directors of the Company has appointed Shri Padur Narayana Viswanathan (P.N. Viswanathan) as an Additional Director (Independent Director) of the Company w.e.f. August 9, 2014.

In terms of Section 149(10) of the Act, an Independent Director can hold office for a term up to 5 (five) consecutive years, hence Shri P.N. Viswanathan is appointed by the Board as Independent Director for a period of 5 (five) years w.e.f. August 9, 2014, subject to his appointment by shareholders in ensuing Annual General Meeting.

Brief resume of Shri P.N. Viswanathan, nature of his expertise in specific functional areas and names of companies in which he holds directorships and memberships / chairmanships of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is given in explanatory statement to Notice of AGM.

The Board commends the appointment of Shri P.N. Viswanathan in the ensuing AGM.

SUBSIDIARY COMPANY AND JV COMPANY

Company has only one wholly-owned subsidiary Company incorporated in Japan namely ''Fiem Industries Japan Co., Ltd.'' The Financial Statements of the same together with Report of the Auditors and Directors thereon are being attached with the Financial Statements of the Company as required under section 212 of the Companies Act, 1956.

The Company had entered into a joint venture agreement with ''Horustech Lighting SRL Italy'' on December 2, 2013 for forming a joint venture company to set-up a design centre in Italy. Accordingly, a 50:50 joint venture company ''Centro Ricerche Fiem Horustech SRL.'' has been formed in Italy on December 12, 2013. The Company has invested a sum of Rs. 8,41,200/- (Euro 10,000) towards capital contribution in said Joint Venture Company as on the date of balance sheet.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 and Accounting Standard 27 read with other applicable provisions, the Audited Consolidated Financial Statements has also been prepared for FY 2013-14, which forms part of this Annual Report of your Company. The accounts of wholly owned subsidiary company ''Fiem Industries Japan Co., Ltd.'' and 50:50 JV Company ''Centro Ricerche Fiem Horustech SRL'' are consolidated with the accounts of the Company.

Kindly refer the notes to consolidated accounts for further information.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975 or Chapter V of the Companies Act, 2013.

STATUTORY AUDITORS

M/s Anil S. Gupta & Associates, Chartered Accountants (ICAI Firm Registration No.004061N), Delhi were appointed as the Statutory Auditors of the Company for the financial year 2013-14 at the Annual General Meeting (AGM) of the Company held on September 23, 2013.

M/s Anil S. Gupta & Associates have been the Auditors of the Company since beginning. As per the provisions of Section 139 of the Act, no listed company can appoint or re-appoint an individual auditor for more than one term of 5 (five) consecutive years. Section 139 of the Act read with Companies (Audit and Auditors) Rules, 2014 have also provided a period of three years from the date of commencement of the Act to comply with this requirement.

In view of the above, M/s Anil S. Gupta & Associates, being eligible for re- appointment has offered himself for appointment for a term of 3 years from conclusion of the ensuing AGM. Based on the recommendation of the Audit Committee, the Board of Directors has, at its meeting held on August 9, 2014, proposed the appointment of M/s Anil S. Gupta & Associates as the Statutory Auditors of the Company for a period of 3 (three) years to hold office from the conclusion of ensuing AGM till the conclusion of the 28th AGM of the Company to be held in the calendar year 2017 (subject to ratification of their appointment at every AGM).

Pursuant to Section 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate from the Auditors to the effect, inter-alia, that their appointment, if made, would be within the limits laid down by the Act and shall be as per the term provided under the Act and that they are not disqualified for such appointment under the provisions of applicable laws and also that there is no proceeding against them pending with respect to professional matter of conduct. The Auditors have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

The Board commends appointment of M/s Anil S. Gupta & Associates as Statutory Auditors of the Company.

OBSERVATIONS IN AUDITORS'' REPORT

There is no reservation, qualification or adverse remark in the auditors'' report hence, no explanation is required from Board of Directors.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report which forms part of this Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Financial Statements i.e. Annual Report excluding the above information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such Particulars of Employees under section 217(2A) of the said Act read with Companies (Particulars of Employees) Rules, 1975, may write to the Company Secretary at the Registered Office of the Company. The same is also available for inspection in accordance with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In today''s world, a Company and the society in which it operates are intrinsically and inseparably linked. Corporate Social Responsibility or CSR is a natural corollary of this symbiotic and co-dependent relationship. The Companies Act, 2013 mandates a legal obligation on this responsibility by making CSR a binding commitment for prescribed companies. Since beginning, Fiem has been a responsible corporate citizen and always take initiatives for giving back to the society. Social empowerment has been an integral part of the operations. The Company has constituted a Corporate Social Responsibility Committee for

overseeing the Corporate Social Responsibility activities of the Company under Companies Act, 2013.

With the spirit of giving back to the society in every possible way, company will implement its CSR initiatives in a more formal way as mandated under Companies Act, 2013.

As a matter of policy, company gives opportunities for the inclusive growth of women and underprivileged. Company support in many ways to communities among whom the Company operates. Company also contributes towards social causes by way of donations to the various societies and trusts, which are engaged in these social activities. Further, Company takes a lot of initiatives for environment protection and encouragement for greener environment.

COST AUDIT

For F.Y. 2013-14, Mr. Krishan Singh Berk, a Practising Cost Accountant had been re-appointed as Cost Auditor by the Board of Directors of the Company.

For F.Y. 2012-13, Cost Audit Report was filed by the Company on September 25, 2013 which was within due date for filing the same. The Cost Audit Report for the year 2013-14 will be filed in due course.

As per Companies (Cost Records and Audit) Rules, 2014 notified vide Notification dated 30th June, 2014 issued by Ministry of Corporate Affairs; Company is not falling under the Industries, which will subject to Cost Audit or required to maintain cost records. Hence, no cost auditor was appointed for F.Y. 2014-15 by the Board of Directors of the Company.

MATERIAL CHANGES

After the end of the Financial Year 2013-14 and up to date of this Report, no material changes or commitments happened, which in the opinion of the Board would affect the financial position of the Company at large.

BUY-BACK OF SHARES

No proposal of buy-back of the shares was considered by the Board during the period under review.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of

Directors) Rules, 1988 are given in ''Annexure- A'' which forms part of this Directors'' Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, Directors of your company hereby confirm:

(i) that In the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed and no material departures have been made from the same;

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

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing & detecting fraud and other irregularities;

(iv) that the Annual Accounts for the year-ended March 31, 2014 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Directors would like to place on record their sincere appreciation to the Company''s OEM customers and acknowledge their patronage and confidence shown in the Company over the years and deeply value their relationship. Board is also thankful to the vendors and bankers for their continued support to the Company during the year. The Directors also wish to acknowledge the contribution made by employees at all levels for steering the growth of the organisation. The Board would like to express its gratitude to the members for their continued trust, cooperation and support and look forward for such support and confidence in future also.

For and on behalf of the Board of Fiem Industries Limited

-Sd- Place : Rai, Sonepat (HR.) J.K. Jain Date : 09.08.2014 Chairman & Managing Director


Mar 31, 2013

Dear Shareholders,

Board of Directors of your Company have pleasure in presenting the 24th Annual Report on the affairs of the company alongwith the Audited Financial Statements for the financial year ended 31st March 2013 and the report of Statutory Auditors thereon.

FINANCIAL RESULTS

(Rs. in Lacs)

Particulars F.Y. 2012-13 F.Y. 2011-12

Gross Sales 66048.55 57653.87

Sales, Net of Excise 59887.57 53022.67

Earning before Tax, Depreciation & Finance Cost 7022.09 6795.68

Less: Cost of Finance 1292.99 2075.55

Profit before Ta x & Depreciation 5729.10 4720.13

Less: Depreciation 1834.75 1688.36

Profit Before Tax 3894.35 3031.77

Less: Tax Expenses 1162.93 917.28

Profit After Tax 2731.42 2114.49

Add: Balance brought forward from previous year 6199.53 4727.12

Profit available for appropriation 8930.95 6841.61

Less: Transfer to General Reserve 275.00 225.00

Less: Proposed Dividend 478.49 358.87

Less: Corporate Dividend Tax 81.31 58.22

Balance carried to Balance Sheet 8096.15 6199.53

Earning Per Share (Rs.) 22.83 17.68





BRIEF REVIEW

The economic scenario in F.Y. 2012-13 continued to be fraught with challenges amid slower growth and uncertainties. Operating in such difficult and testing environment is not less than a challenge.

For Automobile and Auto Component Industry, this year has remained extremely difficult as all the segments gripped in slowdown coped with drying demand. In Passenger Vehicle segments, passenger cars are testing worse times with a negative growth of 4.26% on production and negative growth of 6.69% in domestic sales. However, overall Passenger Vehicle segment has shown positive growth of 2.78% in production and 2.15% in domestic sales, registering an overall growth of 3.27% in total sales including exports, mainly because of robust demand of Utility Vehicles (UVs).

In two-wheeler segment the growth in production has remained slightly less then 2% and in domestic sales, slightly less then 3%. However, the production and sales growth in motorcycles has remained flat with less then 1% variation. In all these slow growth time even for two wheeler segment, the clear winner is scooter class, which has registered a production growth of 13.75% with 14.24% growth in domestic sales. As two-wheeler segment constitute a major part in overall business of your Company and in that too, your company is leader in scooters, hence this has remained a contributory factor in growth of Automotive Lighting and Mirrors business of your company. [Auto Industry data source: SIAM]

Despite all economic challenges, difficult situation and uncertainties of the Industry in which we operate, your Company has achieved a growth of 12.95%, as Net Sales for F.Y. 2012-13 has been Rs. 59887.57 Lacs in comparison to Rs. 53022.67 lacs in F.Y. 2011-12. Profit Before Tax is Rs. 3894.35 lacs in comparison to Rs. 3031.77 Lacs in F.Y. 2011-12. Profit After Tax has also increased with the increase in turnover and during F.Y. 2012-13 it was Rs. 2731.42 lacs in comparison to Rs. 2114.49 lacs, registering an increase of 29.18% over last year figure.

DIVIDEND

Since, the Company has came with IPO in year 2006, your Board of Directors has been continuously recommending dividend every year. So in continuance of this practice and depending upon the growth in last year, Board of Directors has recommended a dividend of 40% (Rs. 4.00 per share) from the profits of the Company, for the year 2012-13 to the equity shareholders to be determined by Book Closure. The Board recommended the same for approval by the shareholders in the ensuing Annual General Meeting.

TRANSFER TO RESERVES

In consonance to applicable Rules, an amount of Rs 275.00 Lac is transferred to General Reserve Account out of the profits for the financial year ended 2012-13.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per requirement of Clause 49 of the Listing Agreement, Management Discussion and Analysis Report for the year under review, is presented in addition to the Directors'' Report in a separate section forming part of Annual Report.

CORPORATE GOVERNANCE REPORT

As per requirement of Clause 49 of the Listing Agreement, a Corporate Governance Report for the year under review is presented in a separate section forming part of Annual Report.

DIRECTORS

In terms of the Articles of Association read with Section 255 and 256 of the Companies Act, 1956, Mr. Iqbal Singh, Mr. Charoen Sachamuneewongse, Mr. Vinod Kumar Malhotra and Mr. Chatter Singh Kothari Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Resolutions for re-appointment of Mrs. Seema Jain and Ms. Aanchal Jain as Whole-time Directors w.e.f. 01/04/2014 are also to be considered in ensuing Annual General Meeting.

During the year under review and up to date of this Report the following changes happened in Board of Directors:

- Mr. C.D. Shah has resigned from the directorship and he was director up to 13.09.2012.

- Mr. Subodh Kumar Jain was appointed as additional director w.e.f. 09.11.2012. He is being proposed to be appointed as regular director and necessary resolution is being moved in the ensuing Annual General Meeting.

SUBSIDIARY COMPANY

Company has only one wholly-owned subsidiary Company incorporated in Japan namely ''Fiem Industries Japan Co., Ltd.'' The Financial Statements of the same together with Report of the Auditors and Directors thereon are being attached with the Financial Statements of the Company as required under section 212 of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with other applicable provisions, the Audited Consolidated Financial Statements has also been prepared for FY 2012-13, which forms part of this Annual Report of your Company.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975.

STATUTORY AUDITORS

M/s Anil S. Gupta & Associates, Chartered Accountants who retire at the conclusion of the 24th Annual General Meeting and being eligible are proposed for re- appointment. They have given their consent for re-appointment and certificate to the effect that the re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

OBSERVATIONS IN AUDITORS'' REPORT

The observations made in the Auditors'' Report are self-explanatory and therefore do not call for further comments, except Para 9(a) to the Annexure of their Report in respect of slight delay in payment of statutory dues in some cases. It is hereby explained and informed that, these statutory dues have since been paid.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report which forms part of this Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Financial Statements i.e. Annual Report excluding the above information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such Particulars of Employees under section 217(2A) of the said Act read with Companies (Particulars of Employees) Rules, 1975, may write to the Company Secretary at the Registered Office of the Company. The same is also available for inspection in accordance with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company believes that corporates have a special social responsibility in comparison to other constituents of the society, because they play more active, constructive and cohesive role in the society. They touch every facet of society in one or other way and hence should have a more human face and spirit in their conduct and activities.

While profit motive derive any business, this should not be the sole motive of any business. Business must be driven by social reasons, growth spirit and supporting the society in more than one ways. There must be spirit, conduct and efforts of giving back to the society in every possible way. With this belief and as a responsible corporate citizen, your Company considers CSR as an integral part of its activities. Company gives back to the society and helps to form a sustainable society by providing the opportunities for the inclusive growth of women and underprivileged. Company support in many ways to communities among whom the Company operates. Besides following the spirit of CSR in its activities, Company also contributes towards social causes by way of donations to the various societies and trusts, which are engaged in these social activities. Further, Company''s policies are strict for maintaining health, safety environmental and it takes a lot of initiatives for environment protection and encouragement for greener environment. CSR not only plays an important role in giving back to the society but also creates credibility, reputation and confidence for corporates among society at large, particularly among the communities where they operate.

COST AUDIT

From F.Y. 2012-13 onwards, the Cost Audit has become applicable on all Automotive Components like Automotive Lighting & Signaling Equipments etc. manufactured by the Company. Hence, to conduct the Cost Audit for F.Y. 2012- 13, Mr. Krishan Singh Berk, a practising Cost Accountant has been re-appointed as Cost Auditor by the Board of Directors of the Company.

For F.Y. 2011-12, Cost Audit Report was filed by the Company on 26/02/2013, which was with in the extended due date for filing the same. The Cost Audit Report for the year 2012-13 will be filed in due course.

MATERIAL CHANGES

After the end of the Financial Year 2012-13 and up to date of this Report, no material changes or commitments happened, which in the opinion of the Board would affect the financial position of the Company at large.

BUY-BACK OF SHARES

No proposal of buy-back of the shares was considered by the Board during the period under review.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in ''Annexure- A'' which forms part of this Directors'' Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, Directors of your company hereby confirm, that:

(i) In the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(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 or loss 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 protecting & detecting fraud and other irregularities;

(iv) The Annual Accounts for the year-ended 31.3.2013 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Our OEM customers are the most important constituent in our business and your Directors gratefully acknowledge their patronage and confidence shown in the Company over the years and deeply value their relationship. Your Company is among the corporates who realize the importance of human capital on top priority and implement this belief throughout their business operations. With this belief, the Board of Directors of your Company wishes to place on record sincere appreciation for hard work and dedication of all employees and associates of the Company. Through out our journey of growth, we have been supported by banks, vendors and many other stakeholders who are connected with us by one or other way. Further, you the shareholders have continuously reposed faith in us and encouraged us during difficult times. Board of Directors deeply acknowledges the trust, confidence and support of all these stakeholders and look forward for it in future as well.

For and on behalf of the Board of Fiem Industries Limited



-Sd-

Place : Rai, Sonepat (HR.) J.K. Jain

Date :12.08.2013 Chairman & Managing Director


Mar 31, 2012

The Board of Directors have pleasure in presenting the 23rd Annual Report on the affairs of the company along with the Audited Financial Statements of the Company for the financial year ended 31st March 2012 and the report of Statutory Auditors thereon.

FINANCIAL RESULTS

Like last year, your Company has registered a good growth and performance of the Company for financial year ended 31st March 2012 in comparison to last financial year is being presented as under:

(Rs. In Lacs)

PARTICULARS F.Y. 2011-12 F.Y. 2010-11

Gross Sales 57653.87 45117.12

Sales, Net of Excise 53022.67 41557.21

Profit before Tax, Depreciation,

Finance Cost 6795.68 3820.55

Less: Cost of Finance 2075.55 950.37

Profit before Tax & Depreciation 4720.13 2870.18

Less: Depreciation 1688.36 1297.93

Profit Before Tax 3031.77 1572.25

Less: Tax Expenses 917.28 429.54

Net Profit 2114.49 1142.71

BRIEF REVIEW

During F.Y. 2011-12, the Automobile Industry in India has registered a production growth of 13.83%. Further, on domestic sales front two wheeler segment has registered a better growth of 14.16% in comparison to 4.66% in passenger vehicle segment, by which the company has benefited because two wheeler segment constitute a major part in overall business of the Company. At Company front, this has been another excellent year with a strong performance across all dimensions; the Net Turnover of the Company is Rs. 530.23 Crore in comparison to Rs. 415.57 Crore in F.Y. 2010-11. This has resulted in a growth of 27.59%. The Net Profit after Tax is Rs. 21.14 Crore in Comparison to Rs. 11.43 Crore during F.Y. 2010-11.

DIVIDEND

Like last years and continuing the practice of rewarding the Shareholders, your Board of Directors has recommended a dividend of 30% (Rs. 3.00 per share) from the profits of the Company on the Equity Shares of the Company for the year 2011-12 to the shareholders to be determined by Book Closure. The Board recommended the same for approval by the shareholders.

TRANSFER TO RESERVES

An amount of Rs. 225.00 Lac is transferred to General Reserve Account out of the profits for the financial year ended 2011-12.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per requirement of Clause 49 of the Listing Agreement, Management Discussion and Analysis Report for the year under review, is presented in addition to the Directors' Report in a separate section forming part of Annual Report.

CORPORATE GOVERNANCE REPORT

As per requirement of Clause 49 of the Listing Agreement, a Corporate Governance Report for the year under review is presented in a separate section forming part of Annual Report.

DIRECTORS

In terms of the Articles of Association read with Section 255 and 256 of the Companies Act, 1956, Mr. Rahul Jain, Mr. Amitabh Prakash Agrawal, Mrs. Seema Jain and Ms. Aanchal Jain Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Further, resolutions for re-appointment of Mr. J.K. Jain as Chairman & Managing Director and Mr. Rahul Jain as Whole-time Director are also to be considered in ensuing Annual General Meeting.

During the year under review and up to date of this Report the following changes happened in Board of Directors:

- Mr. J.S. Chandhok has resigned from the Directorship w.e.f. 04.08.2011.

- Mr. Vinod Kumar Malhotra had been appointed as additional director w.e.f. 04.08.2011 and regularised in Annual General Meeting held on 30th September, 2011.

SUBSIDIARY COMPANY

Your Company has one wholly-owned subsidiary Company incorporated in Japan namely 'Fiem Industries Japan Co., Ltd.' The Financial Statements of the same together with Report of the Auditors and Directors thereon are being attached with the Financial Statements of the Company as required under section 212 of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with other applicable provisions, the Audited Consolidated Financial Statements has also been prepared for FY 2011-12, which forms part of this Annual Report of your Company.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975.

STATUTORY AUDITORS

M/s Anil S. Gupta & Associates, Chartered Accountants who retire at the conclusion of this 23rd Annual General Meeting and being eligible are proposed for re-appointment. They have given their consent for re-appointment and certificate to the effect that the re-appointment, if made, would be within the limit prescribed under Section 224(IB) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

OBSERVATIONS IN AUDITORS' REPORT

The observations made in the Auditors' Report are self-explanatory and therefore do not call for further comments, except Para 9(a) to the Annexure of their Report in respect of slight delay in payment of statutory dues in some cases. It is hereby explained and informed that, these statutory dues have since been paid.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report which forms part of this Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Financial Statements i.e. Annual Report excluding the above information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such Particulars of Employees under section 217(2A) of the said Act read with Companies (Particulars of Employees) Rules, 1975, may write to the Company Secretary at the Registered Office of the Company. The same is also available for inspection in accordance with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR today is synonymous with the responsible business behavior of the organization. CSR not only plays an important role in giving back to the society but also creates credibility, reputation and confidence among stakeholders and society at large.

As a responsible corporate citizen, CSR is at very core of the business of your Company, It is also about the inclusive growth and development which postulates that the benefits of growth are not shared just by its shareholders and employees but also communities among whom the Company operates. It is about helping the underprivileged, protecting the environment and helping the humanity in the similar ways. The Company contributes towards all these causes by way of donations to the various societies and trusts, which are engaged in these social activities. Company also contributes to Kutch Vikas Trust, which organizes free eye operation camp for underprivileged. Company takes a lot of initiatives for environment protection and encouragement for greener environment. Company also donates in religious and social institutions as gesture to support them in the noble cause.

COST AUDIT

During the year 2011-12, Ministry of Corporate Affairs has issued Orders under section 233B of the Companies Act and also issued some Circulars in this regard. As a result of which, Cost Audit become applicable on the Company for F.Y. 2011-12 for the 'Rear View Mirrors'. Hence, to conduct the Cost Audit, Mr. Krishan Singh Berk, Cost Accountant has been appointed as Cost Auditor by the Board of Directors of the Company. From F. Y. 2012-13 onwards, the Cost Audit has become applicable on other products like Automotive Lighting & Signaling Equipments etc. i.e. products under Automotive Components, hence Mr. Krishan Singh Berk has been re- appointed for carrying out Cost Audit for F.Y. 2012-13.

As Cost Audit is applicable on the Company 1st time from F.Y. 2011-12, hence no Cost Audit Report was required to be filed during F.Y. 2011-12. The Cost Audit Report for the year 2011-12 will be filed in due course.

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

The particulars as prescribed under Section 2l7(l)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, l988 are given in 'Annexure- A' which forms part of this Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

As required by Section 2l7(2AA) of the Companies Act, 1956, Directors of your company hereby confirm, that:

(i) In the preparation of the annual accounts for the year ended March 31, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(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 or loss 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, l956 for safeguarding the assets of the company and for protecting & detecting fraud and other irregularities;

(iv) The Annual Accounts for the year-ended 31.3.2012 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Board of Directors of your Company wishes to place on record sincere appreciation for hardwork and determination of all employees of the Company for a creditable performance during the year. Your Directors also want to gratefully acknowledge the confidence and faith shown by valued OEM customers and remain thankful for their support and co-operation. Last but not the least, Board also want to say thanks to banks, vendors and all other stakeholders for their co-operation and support during all this time and look forward for same in future as well.

For and on behalf of the Board of Firm Industries Limited

-Sd-

Place : Rai, Sonepat (HR.) J.K. JAIN

Date : 18.08.2012 Chairman & Managing Director


Mar 31, 2011

Dear Shareholders,

The Directors of your company have pleasure in presenting the 22nd Annual Report on the affairs of the company together with the Audited Financial Statements of the Company for the financial year ended 31st March 2011 and the report of Statutory Auditors thereon.

FINANCIAL RESULTS

The comparative performance of the Company for financial year ended 31st March 2011 and previous financial year on the major financial parameters are being presented as under:

(Rs. In Lacs)

PARTICULARS F.Y. (2010-11) F.Y. (2009-10)

Gross Sales 45300.45 31501.61

Sales, Net of Excise 41729.02 29418.88

Profit before Tax, Depreciation, Cost of Finance & Prior Period Expenses 3832.39 2838.95

Less: Prior Period Expenses. 6.63 12.84

Less: Cost of Finance 949.97 332.95

Profit before Tax & Depreciation 2875.79 2493.16

Less: Depreciation 1297.93 924.67

Profit Before Tax 1577.86 1568.49

Less:

a) Provision for tax 433.79 492.01

b) Income Tax Paid for earlier years 1.37 1.45

Net Profit 1142.70 1075.03

BRIEF REVIEW OF F.Y. 2010-11

Once again your company has notched up a remarkable performance and surged ahead in its journey of growth. During FY 2010-11, the company has registered a growth of 41.84% by achieving a Net Turnover of Rs. 417.29 Crores in comparison to Rs. 294.18 Crores in FY 2009-10. The growth of the Company is also because of rebound of the Indian economy, which has grown by 8.5% in FY 2010-11, 2nd highest in the world after China. The rebound in the economy has well reflected by the Automobile Industry, which has registered a 27% overall vehicle production growth, 26% growth in domestic sales and 30% growth in exports.

The company has improved marginally in the profits from Rs. 1075 lacs in 2009-10 to Rs. 1143 lacs in 2010-11 registering a growth of 6.30%. Though the net sales has increased substantially by 41.84%, the profitability of the Company has been adversely affected mainly due to loss on settlement of currency forward contracts during the year under review.

Management firmly believes that best of the opportunities yet to come and to tap these growth opportunities capacity building is must. In this direction, management wishes to inform that the 8th Unit of the Company, which is established in Tapukara, Rajasthan at 10.5 acre of plot has started commercial production in March, 2011. The Rai Unit (Unit-7) of the Company, which now also houses the Corporate Office, is one of the best manufacturing facilities in the industry and equipped with ultra modern facilities with state of the art technology and in-house R&D Centre. With the same objective, the renovation and modernization of the Kundli Unit is underway, which will also result into capacity addition.

DIVIDEND

Like last four years, your Board of Directors has recommended a dividend of 25% (Rs. 2.50 per share) from the profits of the Company on the Equity Shares of the Company for the year 2010-11 to the shareholders to be determined by Book Closure. The same is recommended for approval of the shareholders.

TRANSFER TO RESERVES

Out of the profits for the financial year ended 2010-11 an amount of Rs 125.00 Lacs is transferred to General Reserve Account.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per requirement of Clause 49 of the Listing Agreement, Management Discussion and Analysis Report for the year under review, is presented in addition to the Directors' Report in a separate section forming part of Annual Report.

CORPORATE GOVERNANACE REPORT

As per requirement of Clause 49 of the Listing Agreement, a Corporate Governance Report for the year under review is presented in a separate section forming part of Annual Report.

DIRECTORS

In terms of the Articles of Association read with Section 255 and 256 of the Companies Act, 1956, Mr. Chatter Singh Kothari, Mr. J.S.S. Rao, Mr. Charoen Sachamuneewongse and Mr. Iqbal Singh, Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Further, resolutions for re-appointment of Mr. Kashi Ram Yadav and Mr. J.S.S. Rao as Whole-time Directors are also to be considered in ensuing Annual General Meeting.

During the year under review and up to date of this Report the following changes happened in Board of Directors:

- Mr. P. S. Bhatia had resigned from Directorship w.e.f. 01.05.2010.

- Mr. Amitabh Prakash Agrawal has been appointed as Additional Director (Independent Director) w.e.f. 01.08.2010 and regularized in last AGM on 30.09.2010.

- Mr. J. S. Chandhok has resigned from the Directorship w.e.f. 04.08.2011.

- Mr. Vinod Kumar Malhotra has been appointed as additional director w.e.f. 04.08.2011 and to be considered for regularization in ensuing Annual General Meeting.

SUBSIDIARY COMPANY

Your Company has one wholly-owned subsidiary Company incorporated in Japan namely 'Fiem Industries Japan Co., Ltd.' The Financial Statements of the same together with Report of the Auditors and Directors thereon are being attached with the Financial Statements of the Company as required under section 212 of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with other applicable provisions, the Audited Consolidated Financial Statements has also been prepared for FY 2010-11, which forms part of this Annual Report of your Company.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS

M/s Anil S. Gupta & Associates, Chartered Accountants who retire at the conclusion of this 22nd Annual General Meeting and being eligible are proposed for re-appointment. They have given their consent for re- appointment and certificate to the effect that the re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

OBSERVATIONS IN AUDITORS' REPORT

The observations made in the Auditors' Report are self-explanatory and therefore do not call for further comments, except Para 9(a) to the Annexure of their Report in respect of slight delay in payment of statutory dues in some cases. It is hereby explained and informed that, these statutory dues have since been paid.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report which forms part of this Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Financial Statements i.e. Annual Report excluding the above information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such Particulars of Employees under section 217(2A) of the said Act read with Companies (Particulars of Employees) Rules, 1975, may write to the Company Secretary at the Registered Office of the Company. The same is also available for inspection in accordance with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The management of the Company believes that CSR is an integral part of the company's larger objective and leads to sustainable growth. It is based on premise of fulfilling one's duty of giving back to the society, helping the underprivileged, protecting the environment and helping the humanity in the similar ways. The Company contributes towards all these causes by way of donations to the various societies and trusts, which are engaged in these social activities. Company also contributes to Kutch Vikas Trust, which organizes free eye operation camp for underprivileged. Company takes a lot of initiatives for environment protection and encouragement for greener environment.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in 'Annexure- A' which forms part of this Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, Directors of your company hereby confirm, that:

(i) In the preparation of the annual accounts for the year ended March 31, 2011, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(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 or loss 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 protecting & detecting fraud and other irregularities;

(iv) The Annual Accounts for the year-ended 31.3.2011 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Board of Directors of your company firmly believes in the power of team work and co-operation of associates and stakeholders and wants to take this opportunity to place on record its sincere thanks & gratitude to the valued OEM customers, banks and vendors for their co-operation and support. Board of Directors also wishes to express its sincere appreciation and thanks for the employees of the company at all levels for their commitment, dedication and hard work in achieving the success and growth of the Company.

For and on behalf of the Board of

Fiem Industries Limited

-Sd-

Place : Rai, Sonepat (HR.) J.K. JAIN

Date : 19.08.2011 Chairman & Managing Director


Mar 31, 2010

The Directors of your company have pleasure in presenting the 21st Annual Report on the affairs of the company together with the Audited Financial Statements of the Company for the financial year ended 31st March 2010 and the report of Statutory Auditors thereon.

FINANCIAL RESULTS:

The comparative summary of the financial results of the company is provided hereunder:

(Rs. In Lacs)

PARTICULARS F.Y. (2009-10) F.Y. (2008-09)

Gross Sales 31501.61 24195.68

Sales, Net of Excise 29418.88 21928.93

Profit before Tax, Depreciation, Interest, Bank charges &

Prior Period Expenses 2838.95 2070.75

Less: Prior Period Expenses. 12.84 15.70

Less: Interest & Bank Charges 332.95 399.78

Profit before Tax & Depreciation 2493.16 1655.27

Less: Depreciation 924.67 882.32

Profit Before Tax 1568.49 772.95

Less:

a) Provision for tax 492.01 304.61

b) Income Tax Paid for earlier years 1.45 7.16

Net Profit 1075.03 461.18

REVIEW OF BUSINESS PERFORMANCE

FY 2009-10 has proved a year of impressive performance for Automobile Industry. The effect of rebound of the economy is clearly visible on Automobile Industry, which have registered a production growth of 25.76% and two- wheeler domestic sales has grown by 26% during FY 2009-10.

Indian Auto Component Industry, being the integral part of the Automobile Industry has also been enjoying this impressive recovery in FY 2009-10. The increasing demand from OEMs is contributing in the growth of Auto Component manufacturers. This increased demand has compelled them to add new capacities apart from optimum utilization of existing capacity.

Your Company being suppliers to OEMs and mainly into two-wheeler business has shown remarkable performance during FY 2009-10 by registering a growth of 34% in Net Sales. The company has also improved well on profits and earned a profit of Rs. 1075 lacs in comparison to Rs. 461 lacs in FY 2008- 09 resulting in a growth of 133%.

DIVIDEND

Your Board of Directors has recommended a divided of 25% (Rs. 2.50 per share) from the profits of the Company on the Equity Shares of the Company for the year 2009-10 to the shareholders to be determined by Book Closure. The same is recommended for approval of the shareholders.

TRANSFER TO RESERVES

Out of the profits for the financial year ended 2009-10 an amount of Rs 110.00 Lacs is transferred to General Reserve Account.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in addition to the Directors Report in a separate section forming part of Annual Report.

CORPORATE GOVERNANACE REPORT

A Corporate Governance Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of Annual Report.

OPERATIONAL UPDATE

The major development on operational front during the year 2009-10 and up to the date of this Report is as under:

Commencement of Commercial Production In Unit VII at Rai, Distt. Sonepat, Haryana:

As the shareholders are aware, for last more than two years your Company is setting-up a Green Field Facility at Rai Industrial Area, Distt. Sonepat, Haryana. In first week of July, 2010 your Company has commenced commercial production in this Plant. This plant is established with ultra- modern manufacturing facilities and latest technology keeping in view the growing business of the Company and well equipped for meeting the growing demand of the OEMs.

Acquirement of Plot in Industrial Area Tapukara, Distt. Alwar in Rajasthan:

Your Company has acquired a new Industrial Plot measuring around 10.5 acre in Ist week of June,2010 in Industrial Area Tapukara, Distt. Alwar in Rajasthan. This is strategically located in close proximity to upcoming new Factory of one of the esteemed customer of your Company, M/s Honda Motorcycle and Scooter India Pvt. Ltd. (HMSI) and existing factory of M/s Honda Siel Cars India Ltd. In this plant, your company will be setting-up the facilities of Injection Molding and Paint Shop for which the construction has already been started.

MoUs with Ichikoh Industries Ltd. of Japan:

One more important development has happened in your company at strategic front, resulting in further strengthening of partnership with Ichikoh Industries Limited of Japan. In first week of July, Your Company has signed two MoUs with Ichikoh Industries Limited of Japan, which is having a worldwide Alliance with Valeo of France called Ichikoh-Valeo Alliance, the worlds No. one manufacturer of Automotive Lighting and Signaling Equipments. First MoU is for setting-up a Joint Venture Company for manufacturing of Automotive Lighting & Signaling Equipments for catering to four-wheeler OEM Customers both in Northern and Eastern India. Second MoU is for forming a Strategic Global Fiem-Ichikoh Alliance for acquiring the 2-Wheeler Automotive Lighting business in worldwide market. Under this Alliance, Fiem Industries Limited and Ichikoh Industries Limited will tap global 2-Wheeler Automotive Lighting business by strategic use of core competencies, manufacturing facilities, technical expertise, and sales network of both the companies.

DIRECTORS

In terms of Article 159 of the of the Articles of Association read with Section 255 and 256 of the Companies Act, 1956, Mrs. Seema Jain, Ms. Aanchal Jain, Mr. C.D. Shah and Mr. J.S. Chandhok, Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

During the year under review and up to date of this Report the following changes happened in Board of Directors:

- Mr. K.S. Lamba had resigned from the Board of Directors w.e.f. 30.04.2009.

- Mr. Charoen Sachamuneewongse was appointed as Additional Director (Independent Director) w.e.f. 30.04.2009 and regularized in Last AGM of the Company held on 30.09.2009.

- Mr. P.S. Bhatia has resigned from Directorship w.e.f. 01.05.2010.

- Mr. Amitabh Prakash Agrawal has been appointed as Additional Director (Independent Director) w.e.f. 01.08.2010 and proposed to be regularized in ensuing AGM on 30.09.2010.

SUBSIDIARY COMPANY

Your Company has one wholly-owned subsidiary Company incorporated in Japan namely Fiem Industries Japan Co., Ltd. The Financial Statements of the same together with Report of the Auditors and Directors thereon are being attached with the Financial Statements of the Company as required under section 212 of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 21 on Consolidated Financial Statements read with other applicable provisions, the Audited Consolidated Financial Statements has also been prepared for FY 2009-10, which forms part of this Annual Report of your Company.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposit within the meaning of the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS

M/s Anil S. Gupta & Associates, Chartered Accountants who retire at the conclusion of this 21st Annual General Meeting and being eligible are proposed for re-appointment. They have given their consent for re-appointment and certificate to the effect that the re-appointment, if made, would be within the limit prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act.

OBSERVATIONS IN AUDITORS REPORT

The observations made in the Auditors Report are self-explanatory and therefore do not call for further comments, except Para 9(a) to the Annexure of their Report in respect of slight delay in payment of statutory dues in some cases. It is hereby explained and informed that, these statutory dues have since been paid.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors Report which forms part of this Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Financial Statements i.e. Annual Report excluding the above information is being sent to all members of the Company and others entitled thereto. Any member interested in obtaining such Particulars of Employees under section 217(2A) of the said Act read with Companies (Particulars of Employees) Rules, 1975, may write to the Company Secretary at the Registered Office of the Company. The same is also available for inspection in accordance with the provision of Section 219(1)(b)(iv) of the Companies Act, 1956.

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

The particulars as prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure- A which forms part of this Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, Directors of your company hereby confirm, that:

(i) In the preparation of the annual accounts for the year ended March 31, 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(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 or loss 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 protecting & detecting fraud and other irregularities;

(iv) The Annual Accounts for the year-ended 31.3.2010 have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Board of Directors acknowledge that the success and growth of the Company is a result of collective efforts and support of all stakeholders and constituents, therefore they wish to place on record its thanks & gratitude to the valued OEM customers, government authorities, shareholders, banks and vendors for their efforts, co-operation and support during the year.

Your Directors also wish to express its sincere appreciation and thanks for the employees of the company at all levels for their commitment, dedication and hard work for achieving the remarkable performance of the Company.

For and on behalf of the Board of

Fiem Industries Limited

-Sd-

Place : New Delhi J.K. JAIN

Date : 16.08.2010 Chairman & Managing Director

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