Lumax Auto Technologies Ltd.

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3 Lumax Auto Technologies Ltd. BOARD OF DIRECTORS Mr. D. K. Jain (Chairman) Mrs. Usha Jain (Managing Director) Mr. Anmol Jain (Director) Mr. Manmohan Sachdev (Independent Director) Mr. Sandeep Dinodia (Independent Director) Mr. A. V. Alexander (Independent Director) Mr. Dhiraj Dhar Gupta (Independent Director) FINANCE HEAD REGISTRAR & SHARE TRANSFER AGENT Mr. Ashish Dubey Big Share Services Pvt. Ltd. E/2, Ansa Industrial Estate, Saki Vihar Road, Sakinaka, COMPANY SECRETARY Andheri (E) Mumbai Ms. Milita Bhar flavia@bigshareonline.com AUDITORS REGISTERED OFFICE D. R. Barve & Co. W-230, 'S' Block, M.I.D.C. Bhosari, Chartered Accountants Pune, Maharashtra th Floor, Above. Dr. Phatak Hospital, Opp. New English High School, militabhar@lumaxautotech.com Tilak Road, Pune Website : BANKERS ABN Amro Bank NV Corporation Bank HDFC Bank Ltd. ICICI Bank State Bank of India Syndicate Bank WORKS 1) W-230, 'S' Block, M.I.D.C. Bhosari, Pune, Maharashtra. 2) Plot No. 70, Sector-10, PCNTDA, Bhosari, Pune, Maharashtra. 3) Gat No. 156/1, Mahalunge, Chakan, Pune, Maharashtra. 4) Plot No. 54/8, D-II, Block-2, M.I.D.C. Chinchwad, Pune, Maharashtra. 5) W-28, M.I.D.C., Waluj, Industrial Area Aurangabad, Maharashtra. 6) A-8, M.I.D.C., Waluj, Industrial Area Aurangabad, Maharashtra. 7) B-86, Mayapuri Industrial Area, Phase-I, New Delhi (Marketing Division). 1

4 28th Annual Report Content Page No Financial Data at a Glance... 3 Graphs... 3 Directors' Report & Annexures Auditors' Report on Accounts Balance Sheet Profit & Loss Account Cash Flow Statement Schedules to Balance Sheet and P&L Account Notes Forming Part of Accounts Balance Sheet Abstract Statement Pursuant to Section 212 of the Companies Act, Subsidiary Company Directors' Report Auditors' Report on Accounts Balance Sheet Profit & Loss Account Cash Flow Statement Schedules to Balance Sheet and P&L Account Notes Forming Part of Accounts Balance Sheet Abstract Consolidated Auditors' Report on Consolidated Accounts Balance Sheet Profit & Loss Account Cash Flow Statement Schedules to Balance Sheet and P&L Account Notes Forming Part of Accounts Notice of AGM Attendance Slip ANNUAL GENERAL MEETING ON WEDNESDAY 16th SEPTEMBER,

5 Lumax Auto Technologies Ltd. FINANCIAL DATA AT A GLANCE PARTICULARS (Rs. in Lacs) Net Sales 29, , , , , , , , % Growth (16.41) Other Income Total Income 29, , , , , , , , EBDIT 2, , , Interest Cash Profit 2, , , % Rise In Cash Profits (6.38) (33.06) Depreciation EBT 1, , % of EBT To Total Income Earning After Tax (EAT) 1, , % of EAT To Total Income Equity Share Capital 1, , , Net Worth 6, , , , Figures from Financial year onwards are given on Consolidated Basis. Turnover Earning Before Depreciation, Interest and Tax Rupees in Lacs Rupees in Lacs ,897 8,549 11,723 21,643 29,115 29, Financial Year Earning Before Tax ,805 1, Rupees in Lacs Rupees in Lacs ,477 2, Financial Year Earning After Tax 1,191 1, Financial Year Financial Year 3

6 DIRECTORS' REPORT To The Members, Your Directors are delighted to present the 28th Annual Report on the business and operations together with Audited Balance Sheet and Profit & Loss Account of your Company for the year ended 31st March, FINANCIAL RESULTS Your Company's performance during the year as compared with the previous year is summarized below: PARTICULARS Sales (Excluding Excise Duty) 16, , Gross Profit (GP) ( - ) Finance Expenses ( - ) Depreciation Profit Before Taxation (PBT) ( - ) Provision for Taxation, Deferred Tax Adjustment and FBT (1.77) Profit After Tax (PAT) (+) Balance in the P&L A/c b/f ( - ) Prior Period Adjustment Profit for Appropriation Appropriation : (Rs. in Lacs) Proposed Equity Dividend Tax on Dividend Transfer to General Reserve Balance retained in P & L A/c DIVIDEND Your Directors are pleased to recommend a Dividend of 15% (Rs per share) for the year ended 31st March, 2009 which is at the same rate as declared in the previous year. The dividend is being declared out of the current as well previous year profits. The total amount of Dividend proposed to be distributed is Rs Lacs (excluding Dividend Tax). An amount of Rs Lacs is proposed to be transferred to General Reserve. BUSINESS PERFORMANCE The last financial year has been one of the worst years for Global Economy. It not only encompasses all sectors of the Economy but infects geographies, all asset classes. Globally, the impact of slowdown is worst in Automotive Industry. The Companies such as Ford and General Motors are producing less than 40% of their capacity. The USA and European countries have also been hit hard. As against the initial optimism that Indian Economy would remain unaffected, we have also witnessed a sharp slowdown in most of the sectors of the Economy. The Indian Automotive sector which recorded a flat growth of 2.96% in the production of Automobiles during , has been hard hit by the combined effect of a severe credit crunch and fall in demand growth. The third quarter of was particularly fierce. Average monthly sales of motorcycles in India fell by over 17% in Q versus Q2. The two wheeler sales came under intense pressure in the last financial year due to the sudden slowdown in lending to this segment by big private finance companies. This, coupled with weak consumer sentiment, has seen a segment report a meager 2.60% growth during In this background, for the Financial Year , your Company has achieved a Sales Turnover (Net of Excise) of Rs. 16, Lacs (on Standalone Basis) as against Rs.17, Lacs (on Standalone Basis) in the previous year, down by 9 %. The main reason of decrease in sale of the Company is drop in orders from Bajaj Auto - one of the main customers of the Company, as the sales to them has decreased by 34% in this year as compared to the previous year. However, the After Market sales of the Company have grown by 20% over the previous year. 4

7 Lumax Auto Technologies Ltd. The Profit After Tax (PAT) for the current year has decreased to Rs Lacs (on Standalone Basis) from Rs Lacs (on Standalone Basis) as compared to previous year, down by 79% as compared to the previous year. The reasons for such decrease include the impact of price reductions of Rs. 72 lacs from the customers pertaining to the earlier period, Bad debts of Rs. 93 Lacs written off among others. In this difficult year, there has been some positive news also. Your company has been successful in adding three new customers, including two for supply of Car Seating Frame and one for export business which will add to the business in future. Further, during the last year your company has successfully started commercial production of leveling motors unit at Chakan, Pune. On Consolidated Basis, for the Financial Year , your Company has achieved a Sales Turnover (net of excise) of Rs. 29, Lacs as against Rs. 29, Lacs in the previous year, showing a marginal growth of around 1.77%. The Profit after Tax (PAT) for the current year has decreased to Rs. 1, Lacs (on Consolidated Basis) from Rs. 1, Lacs (on Consolidated Basis) of the previous year having a reduction of 4.28% in the Consolidated Profit after Tax of the Company as compared to last Financial Year. During the year, Lumax DK Auto Industries Limited (LDK) -100% subsidiary of your company has got recognition of In-house Research and Development from Department of Science & Industrial Research, Ministry of Science & Technology, and Government of India for its unit at Manesar for Gear Shifter. In the very first year, the unit has got an excellence award in Design & Development from M/s Maruti Suzuki India Limited. This In-house R & D will enhance the capability of the LDK to secure more business in future. A detailed discussion on the business performance and future outlook is provided in the Chapter on Management Discussion and Analysis Report (MDA). JOINT VENTURE COMPANY- LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED. The financial year ended 31st, March 2009 was the first 12 months operations of the Joint Venture Company, during which it has achieved Turnover of Rs Lacs and Profit before Tax of Rs Lacs. During the year under review, the Joint Venture Company, who is supplying Air Intake systems to Tata Motors and Fiat India, now has acquired prestigious orders for Air Intake System from VOLKS WAGEN & SKODA INDIA, making it the single source catering to all the vehicle platforms of these customers. In its endeavour to increase the localisation of parts, the Joint Venture Company has planned to setup a new facility to produce Air Intake System Elements locally that are being currently imported from Cornaglia SPA, Italy - the other Joint Venture Partner. During the year under review both the Joint Venture Partners have infused additional Equity amounting to Rs Lacs each in the ratio of 50:50. DIRECTORS The Board consists of Executive and Non Executive Directors including Independent Directors who have wide and varied experience in different disciplines of Corporate Functioning. In accordance with the provisions of Companies Act, 1956 and Articles of Association of the Company. Mr. Dhiraj Dhar Gupta and Mr. Manmohan Sachdev, Directors are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Directors recommend the re-appointment of the above said Directors at the ensuing Annual General Meeting. DIRECTORS RESPONSIBILITY STATEMENT As required under Section 217(2AA) of the Companies Act 1956, the Directors state: (i) (ii) (iii) (iv) That in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2009, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for that period; That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities; That the Directors have prepared the Annual Accounts on a "Going Concern" basis; FIXED DEPOSITS During the year under review the Company has not accepted any Deposit under Sections 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules,

8 AUDITORS M/s D. R. Barve & Co, Chartered Accountants are proposed for re-appointment as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. They have given their consent to act as Auditors of the Company and have further confirmed that their appointment would be in conformity of the provision of Section 224(1B) of the Companies Act, The Board recommends their re-appointment for the approval of members in the ensuing Annual General Meeting. During the year, all the recommendations of the Audit Committee were accepted by the Board. Hence there is no need for disclosure of the same in this Report. SUBSIDIARY COMPANY 100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED In accordance with Section 212 of the Companies Act, 1956 the Audited Statements of the Accounts of the Companies Subsidiary Lumax DK Auto Industries Limited together with the reports of the Directors and Auditors thereon for the year ended March 31, 2009 are annexed hereto and form part of this Report. CONSOLIDATED FINANCIAL STATEMENT The Consolidated Financial Statements of the Company and its 100% subsidiary Lumax DK Auto Industries Limited as prepared in accordance with the Accounting Standard 21 are annexed hereto and forms part of this Report. MANAGEMENT DISCUSSION & ANALYSIS REPORT Pursuant to the provisions of Clause 49 of the Listing Agreement, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - A. OTHER INFORMATION Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is annexed separately as Annexure - B. None of the employees were in receipt of Remuneration exceeding the limits prescribed pursuant to Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 during the year ended March 31, CORPORATE GOVERNANCE The report on Corporate Governance together with the Auditor's Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of this Annual Report as Annexure - C. ACKNOWLEDGEMENT The Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical Collaborators, Joint Venture Partners, all other business partners, all the Shareholders, Financial Institutions, Banks, Vendors and various Government agencies for their continued support and patronage. The Board would also like to acknowledge the co-operation & commitment rendered by all the Associates & Employees of the Company for their unstinted support shown during these challenging times. For and on behalf of the Board of Directors Place: Gurgaon Dated: June 30, 2009 D.K. JAIN Chairman 6

9 Lumax Auto Technologies Ltd. MANAGEMENT DISCUSSION & ANALYSIS REPORT ANNEXURE - A a) INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK In April 2008, hardly anyone had predicted what the Global Economy would turn out to be by March 31, In the beginning of this financial year the world was under worst inflationary spiral since World War II. No body believed that the scourge of Global inflation would suddenly disappear to make way for the worst economic downturn since the Great Depression. The year has been one of the worst years for the Global Economy and India is also not immune to these tumultuous times. After three consecutive years of over 9% Gross Domestic Product (GDP) growth from 2005 to 2008, the GDP of the Indian Economy has recorded a growth rate of 6.7% in The economy has been adversely affected due to the impact of global financial meltdown, moderating consumption demand and depreciating currency. The adverse impact of Global Economy scenario is visible on GDP numbers especially with manufacturing sector which has recorded 2.4% growth in compared with 8.2% growth recorded last year. The liquidity squeeze, increased interest rates and high fuel prices started the slowdown in the Indian Automotive Market from the first half of the last year itself. The twin effect of liquidity crunch and contraction of demand from the beginning of third quarter of resulted in sharp de-growth across all the segments of the Indian Automotive market. A fall in demand growth translates to lower order books, lower capacity utilization and severe pressure on prices. The outlook for the Automotive Market in 2009 is not promising at least in the first half of the year. However, it is expected that the fiscal stimulus packages announced by the Government by way of reduction in Excise Duty and Infrastructure spending as well as the Monetary measures announced by the RBI will help in stimulating the growth from the second half of AUTO AND AUTO COMPONENT INDUSTRY The role of Automobile Industry is very important in Indian Economy; it is the prime mover in any economy. If it does well, the economy would fare well. Though the Indian Auto Sector is passing through a critical phase, comparatively it has been less affected by the global slowdown. The said slowdown has motivated economies all over the world to increasingly resort to production cut, lay-offs, retrenchment, etc; in order to save valuable resources. The current slowdown in the USA has brought about several mega changes. Apart from offering a bailout for the three world's renowned auto majors, the US Government has adopted a new future-oriented policy for the country's auto sector. Also many US companies are planning to shift their production base to low cost countries, including India. The short term outlook of the Indian Automotive Market is hard to forecast, due to the current Global Economic and its resultant effect on nearly all the Global Economies, including India. It is however, expected that the Indian Automotive market will see significant shrinkage in nearly all segments in the first half of The current slowdown and liquidity crisis has also forced many of the Auto OEMs to delay their investments planned in the coming years. The Indian Automobile Sector was also adversely affected and it registered a flat growth of 2.96 percent for the year ended March 31, The Automobile production trends of last five years are as follows: Automobile Production Trends (No's. in Lacs) Category Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers Grand Total % Increase/ (Decrease ) (2.11) 2.96 (Source: SIAM) As it is evident from above that as compared to the double digit growth till , the last two years were worst for the Indian Auto Industry as a whole. Further, during the last year, the Commercial Vehicle Segment was the worst hit, as the same has registered a negative growth of (24%) as compared to previous year. 7

10 However, there are some positive factors which should aid partial recovery of the Indian Automotive Market viz. reducing inflation rates, the economic stimulus packages announced by Government and reducing interest rates. Auto OEMs are vying for customers with new models and are also looking at export market(s) to partially compensate for the fall in local demand. The growth of the Indian Automotive Market over the long term looks positive. The Indian Automobile Industry has started showing signs of recovery from the beginning of the current financial year. The cumulative production data for April-May 2009 shows production growth of 8.28 percent over April May In May 2009, overall production grew by 6.53% over the same month last year. In April 2009, production grew at percent. (Source: SIAM) AUTO COMPONENT INDUSTRY Growth of the Automotive Component Industry directly linked with the growth of Automobile Industry. Over 70% sales to the OEM The Auto Component Industry comprises of the following. Electrical Parts 9% Other 7% Engine Parts 31% Equipment 10% Suspension & Braking Parts 12% Body & Chassis 12% Drive Transmission & Steering Parts 19% (Source : ACMA) The India's Automotive Component Industry manufactures the entire range of parts required by the Automobile Industry. It is conversant in all Global Automotive Standards, has appropriate investment in Research and Development and possesses the flexibility for Small Batch production to cater the OE requirements. The Industry is dominated by key 584 players and graduating to world class level. It has bagged 11 Deming Awards which is the most prestigious award for Quality, 15 TPM Awards, 60 OHSAS Certification and other Quality Certifications such as ISO Environmental Management, QS 9000, TS Quality Management, ISO 9000 Quality Management. Various world class Auto manufacturers such as BMW, Nissan, Mercedes Benz, Ford, General Motors, Toyota, Fiat, Volvo and Volkswagen among other are sourcing components from Indian Auto Component suppliers. (Source: ACMA). Despite, the slowdown in the Auto Industry your Company is seeing bright future for its business. Your Company is widening its consumer base, pulling in new accounts from OEM's for their upcoming products. 8

11 Lumax Auto Technologies Ltd. b) OPPORTUNITIES & THREATS India holds huge potential in the Automobile Sector including the Automobile Component Sector owing to its technology, cost and manpower advantage. Further, India has a well-developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centers. The country enjoys natural advantage and is among the lowest cost producers of steel in the world, low skilled manpower and rapidly growing Design Capability. The current scenario offers huge growth opportunities for Auto Component Industry in India and abroad and for your Company in particular. Your Company's growing product range and leadership in Domestic Market will aid the Company to cushion itself from the effects of the slowdown to some extent. The primary focus of your company is to consolidate its market share; and in this downturn where even the volumes are going down, your company needs to maintain and grow its leadership in the market. The Automotive Mission Plan 2016, which expects to achieve incremental investment of US$ 35 to $45 Billion in the Domestic Automotive Sector upto It not only has infrastructure and manpower but is also a promising future market. The middle class is growing fast and according to estimates, it is expected to add 450 million in middle class by This is the class that will buy cars and two wheelers, further at present, the penetration rate of Cars is substantially low i.e 7 to 8 Cars per 1000 persons. Further, India is emerging as a base for Compact Cars, various OEM's are setting up new facilities and increasing existing production capacities. The area of major competition for the Indian Auto Industry is in the Component Sector. Firstly, global sourcing of components from China and Thailand brings savings of nearly 10-15% as against the case of India which is mainly due to their scale economies, lower power costs, reduced freight, local government concessions, lower transactional costs, Infrastructural facilities, taxation etc. With the increasing competition from global OEM's, Indian Component exporters might lose out in the price wars, if they start with higher base. Further, the structure of the component industry in India shows a largely fragmented industry (implying low scale operations). The other challenges being faced by the Auto Component Industry is presence of Counterfeit Components, Rising Input Costs, Higher Interest Rates, continuous pressure from OEM's to reduce prices. Your Company proposes to address these threats and convert the opportunities into growth of the Company by cost reduction measures, developing economies of scale, process improvements, quality up-gradations, increase market share and by diversifying existing customer base with the addition of new strategic customers and enhancing the existing relationship. c) PRODUCT WISE PERFORMANCE The Company is engaged only in one segment of products viz. manufacture of Auto Components. The product wise performance during the year is shown below: (Rs. in Lacs) S.No Product Turnover Chassis Frame Sub Assembly Head Lamp Assembly Silencer Lamp Shed Assembly Rear Assembly/Fender Assembly Tail Lamp Blinker Wind Shield Fork Flap/Side Flap Fork Assembly Others Total 3, , , ,

12 d) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Based on the nature of business and size of operations, the Company's internal control system has been designed to provide for : Accurate recording of transactions with Internal Checks and prompt reporting. Adherence to applicable Accounting Standards and Policies. Review of Capital Investments and Long Term Business Plans. Periodic review meetings to guide optimum utilization of resources. Compliance with applicable statues, policies, listing requirements and management policies and procedures. Effective use of resources and safeguarding of Assets. The Company has appointed Independent firm of Internal Auditors who regularly conducts Audit of all the functional areas and is responsible to examine the adequacy and the compliance with policies and plans of the Company. Continuous audit and verification of the systems enables the various business groups to plug any shortcomings sooner rather than later. The summary of the Internal Audit observations is submitted to Audit Committee. The status of implementation of the recommendations is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board. e) RISK AND CONCERN The Company is exposed to external and internal risks associated with the business. The operations of the Company are directly dependent on the Automobile manufacturer's (OEMs) growth and business plans. General economic conditions impact the automotive industry, and in turn, the operations as well. To counter these risks, your company continues to broaden the product portfolio, increase customer profile and geographic reach and also enters into After Market Segment which now constitutes approximately 50% of the total revenue. The Company is exposed to strong competitive pressures both domestic and overseas. Your company's established reputation, close customer relationships, ability to provide higher level of engineering, design support and relentless drive for improvement gives it a competitive edge. The Company is also exposed to financial risk from changes in interest rates, foreign exchange rates and commodity prices. f) DISCUSSION ON FINANCIAL PERFORMANCE WITH REFERENCE TO OPERATIONAL PERFORMANCE The Indian Automotive Industry registered a flat growth in nearly all segments. The slowdown in the availability of credit, increase in the cost of borrowing and lower consumer confidence all took their toll on Indian Automobile Industry during the financial year ended March 31, 2009 resulting into flat growth of 2.96% in the production of Automobiles in this financial year over the last year ended in March 31, In this industry scenario your company's financial performance is as follows : REVENUE As your company's business is directly dependent on the Original Equipment Manufacturer(s), consequently, in this background your company achieved Net Sales of Rs. 16, Lacs for the year ended March 31, 2009 as compared to Rs.17, Lacs in the previous year, registering a reduction of 9.00% over the previous year. PROFITS Further, your Company has recorded Profit After Tax of Rs Lacs for the year ended March 31, 2009 as compared to Rs Lacs in the previous year, a decline of 79% over the previous year. The reasons for such decrease include the impact of price reductions of Rs. 72 lacs from the customers pertaining to the earlier period, Bad debts of Rs. 93 Lacs written off, Raw material price variation impact of Rs. 50 Lacs and Low order book for its various units. On Consolidated Basis, for the Financial Year , your Company has achieved a Sales Turnover (net of excise) of Rs. 29, Lacs as against Rs. 29, Lacs in the previous year, showing a marginal growth of around 1.77%. The Profit after Tax (PAT) for the current year has decreased to Rs. 1, Lacs (on Consolidated Basis) from Rs. 1, Lacs (on Consolidated Basis) of the previous year having a reduction of 4.28% in the Consolidated Profit after Tax of the Company as compared to last Financial Year. DIVIDEND During the year under review, the Company has declared a Dividend of Rs per Equity Share, which is same as compared to Rs per Equity Share last year. g) HUMAN RESOURCES AND INDUSTRIAL RELATIONS The Company has laid emphasis to upgrade the skills of its technical and marketing personnel. This is in keeping with its policy of enhancing the individual's growth potential within the framework of corporate goals. The Directors acknowledge and appreciate the contribution of all employees towards the performance of the Company. During the year under review the Company maintained cordial relationship with all employees. The Company has employed 421 number of employees during the year. CAUTIONARY STATEMENT The above mentioned statements are only "forward looking statements" based on certain assumptions/expectations. The Company's actual performance could differ materially from those expressed/projected depending upon changes in various factors. The Company does not assume any responsibility to any change(s) in "forward looking statements", on the basis of subsequent development, information or events etc. 10

13 Lumax Auto Technologies Ltd. ANNEXURE - B Information as per Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, and forming part of Directors' Report for the year ended 31st March, A. CONSERVATION OF ENERGY Though the Company does not come under the category of power intensive unit, adequate measures have been taken for energy conservation and thereby to reduce energy cost. (a) Energy Conservation Measures taken and their impact. All manufacturing units of the Company have implemented various initiatives for conservation of energy during the year ended March 31, The Company has initiated the following actions in the area of Energy Conservation: 1. In the PCNTDA plant of the Company, in 2nd shift, for one section, 9 CFM Capacity Compressor is added instead of running centralized Compressor of 224 CFM resulting in saving of electricity approximately 200 Units Per Shift. 2. In the Bhosari plant, two cooling towers have been replaced by a single cooling tower, resulting into saving of electricity consumption of approximately 16 Units / Day. 3. In the Chakan Plant, the Company has outsourced the process of Painting to outside vendors, resulting into saving of Energy by approximately 600 Units / Shift. 4. Across all the units, instead of running the plant on daily basis, the Company is clubbing volumes and running the same plant on every alternate day, this helps to drastically reduce the start up energy Units by approximately 500 Units / Day. 5. At some plants, one shift workings were implemented, instead of the regular two shift workings, which resulted in conservation of energy and costs. Also, in some plants the Company have opted for five days a week working, instead of six days, which resulted in to saving of energy by approximately 1000 Units Per Day. (b) Additional Investments and Proposals being implemented for reduction of consumption of Energy. 1. The Company is proposing to install Solar Heating System for Hot water Generator at the PCNTDA plant, with an approximate investment of Rs Lacs and to convert De-Coating Tank from Electrical Heating to Solar Heating at its Bhosari Plant with an Investment of Rs 2.50 Lacs 2. The Company is proposing to get the Energy Audit done in all existing plants in order to reduce the energy consumption and bring down the existing billings by 10 15%. 3. Proposal of VFD installation in Moulding machines for reduction in electricity units consumption in Chakan plant. 4. The Company is also proposing to replace existing mercury street lamps by LED Lamps to cut on the energy costs. (c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of Goods. It is difficult to quantify the impact of individual energy reduction measures on the Cost of Production of Goods. The above measures of energy reduction will reduce overall cost of energy. (d) Total Energy Consumption and Energy Consumption Per Unit of Production. Since the above is not applicable to the Auto Components Sector, Form A is not furnished. B. TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT The Company does not have any imported technology and hence the details required to be given for the imported technology are not applicable. As the trend in the Auto Industry is changing from import in technology to provide and develop local competency, the Company has taken the initiatives to improve local technical capabilities. 11

14 RESEARCH & DEVELOPMENT a) Specific Areas in which R & D carried out by the Company Steering Wheel Design & Development for Four Wheelers. Developed Main Stand Assembly for Piaggio Exports Italy Seating Systems for Tata Johnsons Control Levelling Motor production for Four Wheeler Head Lamps. New Design and Process Technology Developed for the Development and manufacturing of Chassis, Petrol Tanks, and Muffler of Automobiles, such as Robotic Assembly Process Developed for the Assembly of Muffler and Chassis. b) Benefits derived as a result of the above R & D Reinforced knowledge and Technology involving New Technology & Diversification from Two to Four Wheeler Segments. Robotic Assembly Process benefits in the improved accuracy and quality, also, reduction in manpower cost. c) Future Plan of Action The Company will be applying to the Ministry of Science and Technology, Department of Scientific and Industrial Research Technology for recognition of In-House Research & Development Unit. To upgrade our existing design and development infrastructure. To start in-house designing of new generation automotive lamps for Automotive OEMs (located in Pune region). d) Expenditure on Research & Development (Rs. in Lacs) (i) (ii) (iii) (iv) Capital Recurring Total Total R & D Expenditure as a percentage of Total Turnover % C. FOREIGN EXCHANGE EARNINGS AND OUTGO (a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans : Your Company has been continuously striving for opportunities for growth in export business. (b) Total Foreign Exchange used and earned This information is given in Notes on Accounts (Schedule '23') at S.No.14 and

15 Lumax Auto Technologies Ltd. CORPORATE GOVERNANCE REPORT ANNEXURE - C The Securities and Exchange Board of India (SEBI) regulates Corporate Governance Practices of Companies Listed on the Indian Stock Exchanges. These regulations are notified under Clause 49 of the Listing Agreement of all the Stock Exchanges. This clause specifies the standards that Indian Companies have to meet and the disclosures that they have to make with regards to Corporate Governance. Your Company has established systems and procedures to comply with the amended provisions of the Code of Corporate Governance and is complying with the same in its letter and spirit. 1. COMPANY'S PHILOSOPHY We believe in establishing a mechanism by which the most effective and efficient values, principles, management policies and procedures of the Company are inculcated. The essence of Corporate Governance for the Company lies in promoting and maintaining integrity, transparency and accountability throughout the organization. It is not only a sine qua non for facing intense competition for sustainable growth in the emerging global business scenario but is also an embodiment of the parameters of fairness, accountability and transparency to maximize value for the stakeholders. The Board of Directors is at the core of our Corporate Governance Practice, which oversees how the management serves and protects the long term interest of all stakeholders of the Company. 2. BOARD OF DIRECTORS The policy of the company is to have an appropriate mix of Executive and Non Executive Directors to maintain the independence of the Board, and to separate the Board functions of Management and Governance. The Board consists of 7 Directors comprising of one Executive Director, Six Non-Executive Directors out of which four are Independent Directors. The composition of the Board is in conformity with the requirements of Clause 49 of the Listing Agreement and the details of Directors are as follows : S. No. Name of the Directors Category of Directorship No. of Board Meetings attended No. of Directorships in other Public No. of Committee Positions held in other Public Companies* Last AGM Attended Relationship Interse Chairman Member 1 Mr. D.K. Jain Non-Executive Director (Chairman) Yes Related as Husband to Mrs. Usha Jain and as Father to Mr. Anmol Jain 2 Mrs.Usha Jain Executive Yes Related as Wife to Director (MD) Mr. D.K Jain and as Mother to Mr. Anmol Jain 3 Mr. Anmol Jain Non- Executive No Related as Son Director to Mr. D.K Jain and Mrs. Usha Jain 4 Mr.Manmohan Sachdev Non- Executive No Not related to any Director Independent Director. 5 Mr.Sandeep Dinodia Non- Executive Yes Not related to any Director Independent Director. 6 Mr.A.V.Alexander Non- Executive No Not related to any Director Independent Director. 7 Mr.Dhiraj Dhar Gupta Non- Executive No Not related to any Director Independent Director. *As per amended guidelines, Committee here means Audit Committee and Shareholders/ Investor Grievance Committee. 13

16 a) Board Meetings and Attendance The Board of Directors had met five times during the financial year ended 31st March, The intervening period between two Board Meetings was well within the maximum time gap of 4 months, as prescribed under Code of Corporate Governance. The details of Board Meetings held during the year are as under: S. No Date of Board Meeting Board's Strength No of Directors Present b) Board's Processes It is always been the Company's policy and practice that apart from matter requiring Board's approval by statute, all major decisions including quarterly results of the Company, financial restructuring, capital expenditure proposals, collaborations, material investment proposals in joint venture / group companies, sale and acquisition of material nature of assets, mortgages, guarantees, donations etc, as and when applicable, are placed before the Board. The minimum information required as per Code of Corporate Governance, is being made available to the Board as and when applicable. The Board meets at least once a Quarter. The Board Meetings are generally scheduled well in advance and the notice of each Board Meeting is given in writing to each Director. The items placed at the meeting of the Board include the following:- 1. Unaudited quarterly/half yearly financial results and audited annual accounts of the company. 2. Minutes of meeting of Audit, Shareholders Grievance Committee, Remuneration Committee along with the Minutes of the Subsidiary Company. 3. Abstract of circular resolution passed, general notices of interest and Sales and /or purchase of investments, fixed assets, if any. 4. Review of compliance of all laws applicable to the Company including the requirement of the Listing Agreement with the Stock Exchange and steps taken by the company to rectify instances of non compliance, if any. 5. Related Party Transactions, if any. 6. Reviewing the company's financial and risk management policies. 7. Reviewing the business plan and strategy of the company. All the items in agenda are accompanied by notes giving comprehensive information on related subject and in certain matters such as financial/business plans, financial results, detailed presentations are made. The agenda and relevant notes are given to each Director separately at the Board Meeting to enable the Board to take informed decisions. The minutes of the Meeting of the Board are circulated to all Directors and confirmed at the subsequent meeting. The minutes of the Audit Committee, Remuneration Committee and Shareholders' Grievance Committee are also individually given to the members of the Committee and thereafter placed before the Board at the subsequent Board Meeting for taking on record. 3. COMMITTEES OF THE BOARD Currently, the Board has three Committees: (a) (b) (c) Audit Committee, Remuneration Committee, Investor Grievance and Share Transfer Committee. The brief details of the various committees of the Board and their constitution and functions are as under: A. Audit Committee a) Composition and Attendance The Audit Committee comprises of three Non-Executive Independent Directors. The Composition of the Audit Committee is as follows: 14

17 Lumax Auto Technologies Ltd. S.No. Name of Directors Status Category of Membership 1 Mr. Sandeep Dinodia Chairman Non-Executive Independent Director 2 Mr.Manmohan Sachdev Member Non-Executive Independent Director 3 Mr. A.V. Alexander Member Non-Executive Independent Director The Audit Committee had met five times during the Financial Year April 1, 2008 to March 31, The attendances of the meetings are as under:- S. No Name of Members No. of Meetings attended 1 Mr. Sandeep Dinodia 4 2 Mr. Manmohan Sachdev 5 3 Mr. A.V. Alexander 4 Statutory Auditors, Managing Director, are permanent invitees to the Audit Committee Meetings. The Company Secretary acts as the Secretary to the Audit Committee. The Chairman of the Audit Committee attended the last Annual General Meeting, held on The Audit Committee has been constituted as per Section 292A of the Companies Act, 1956 and the guidelines set out in the Listing Agreement. The Audit Committee of the Company, inter-alia, provides assurance to the Board on the existence and adequacy of an effective Internal Control systems that ensures: * Efficiency and effectiveness of operations. * Safeguarding of Assets and adequacy of provisions for all liabilities. * Reliability of all financial and other management information and adequacy of disclosures. * Compliance with all relevant statutes. The Committee has powers as envisaged under Clause 49(II) of the Listing Agreement and as specified by the Board of Directors of the Company and includes the following terms of references:- b) Powers of Audit Committee Audit Committee shall have the following Powers: 1) To investigate any activity within its terms of reference 2) To seek any information from any employee. 3) To obtain outside professional legal advice. 4) To secure attendance of outsiders with relevant expertise, if considered necessary. c) Role of Audit Committee 1. Oversight of the Company's Financial Reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the Statutory Auditor and the fixation of Audit Fee. 3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors. 4. Reviewing, with Management, the Annual Financial Statements before submission to the Board for approval with particular reference to: a. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of clause (2AA) of Section 217 of the Companies Act, b. Changes, if any, in accounting policies and practices and reasons for the same. c. Major accounting entries involving estimates based on the exercise of judgement by management. d. Significant adjustments made in the financial statements arising out of audit findings. e. Compliance with Listing and other legal requirements relating to financial statements. f. Disclosure of any related party transactions i.e. transactions of the company of material nature, with promoters or the management, their subsidiaries or relatives etc., that may have potential conflict with the interests of company at large. g. Qualifications in Draft Audit Report. 15

18 5. Reviewing with the Management, the quarterly financial statements before submission to the Board for approval. 6. Reviewing with the Management, performance of the Statutory and Internal Auditors, adequacy of Internal Control Systems. 7. Reviewing the adequacy of Internal Audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of Internal Audit. 8. Discussion with Internal Auditors on any significant findings and follow-up thereon. 9. Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control system of a material nature and reporting the matter to the Board. 10. Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. 11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. 12. To review the functioning of Whistle Blower mechanism, in case the same is existing. 13. Carrying out any other function, which may be specified as a role of the Audit Committee under amendments, if any, from time to time as per the Listing Agreement, Companies Act, 1956, and other statutes. d) Review of information by Audit Committee The Audit Committee shall mandatorily review the following information:- 1. Management Discussion and Analysis of financial conditions and results of operations; 2. Statement of significant related party transaction as submitted by Management; 3. Management letters/ letters of internal control weakness issued by the Statutory Auditors; 4. Internal Audit Reports relating to internal control weakness; and 5. The appointment, removal and terms of remuneration of the Chief Internal Auditors shall be subject to review by the Audit Committee. e) Any other matter with the specific permission of the Board. B. Remuneration Committee The Remuneration Committee consists of Independent and Non-Executive Directors to review and recommend payment of annual salaries, commission, service agreements and other employment conditions of the Executive Directors of the Company. The committee fixes the remuneration after taking into consideration remuneration practices followed by Companies of similar size and standing in the Industry. The Remuneration Committee comprises of three Directors as its members. All the members of the Committee are Non-Executive Director and have sound knowledge of management practices. The Chairman of the Committee, Mr. Sandeep Dinodia is a Non-Executive Independent Director nominated by the Board. The power and role of the Remuneration Committee is as per guidelines set out in the Listing Agreement. The constitution of the Remuneration Committee is as follows: S.No. Name of Directors Status Category of Membership 1 Mr. Sandeep Dinodia Chairman Non-Executive Independent Director 2 Mr. D.K. Jain Member Non-Executive Director 3 Mr. A.V. Alexander Member Non-Executive Independent Director No Remuneration Committee meeting was held during the financial year April, to March 31,2009. a) Remuneration Policy: The Remuneration Committee fixes the remuneration of the Executive Directors after considering various factors such as qualification, experience, expertise, and the prevailing remuneration in the competitive industries, financial position of the Company, etc. The remuneration structure comprises of Basic Salary, Commission, Perquisites and Allowances, contribution to Provident Fund etc. 16

19 Lumax Auto Technologies Ltd. The remuneration policy for Executive Directors is directed towards rewarding performance, based on review of achievements of Executive Directors. The Non-Executive Directors have not drawn any remuneration from the Company, except sitting fees for attending meetings of the Board and Committees. b) Details of Remuneration paid to Directors during the accounting year ended March 31, 2009 are as under: (Amount in Rs.) Name of Directors Salary Perquisites & Allowances Commission Total Mrs. Usha Jain 880, ,369 Nil 1,035,369 c) The number of shares held by Non-Executive Directors in the Company are mentioned below. S. No Name of Non- Executive Directors No of shares held as on %age 1 Mr. D K Jain 2,548, % 2 Mr. Anmol Jain 765, % 3 Mr. Sandeep Dinodia Mr. Manmohan Sachdev Mr. A V Alexander % 6 Mr. Dhiraj Dhar Gupta - - There is no Stock Option Scheme of the Company for any Director and there are no Security / Investment of the Company pending for conversion into Equity Shares. C. Shareholders / Investors Grievance & Share Transfer Committee The Company has a Shareholders/Investors Grievance & Share Transfer Committee to oversee Investors Grievances and Redressal mechanism and recommends measures to improve the level of Investors' services and to look into the matters pertaining to share, transfers, duplicate share certificates and related matters. The Committee comprises of three Non Executive Directors, with two of them being Independent Directors. The present composition of the Committee is as under: S. No. Name of Directors Status Category of Membership 1 Mr. D.K.Jain Chairman Non-Executive Director 2 Mr. Sandeep Dinodia Member Non-Executive Independent Director 3 Mr. Manmohan Sachdev Member Non-Executive Independent Director The functioning and terms of reference of the Committee are, as prescribed under the Listing Agreement entered with the Stock Exchanges, with particular reference to transfer, dematerialization and complaints of Shareholders etc. The Quorum for the functioning of the Committee is any two Members present. The Share Transfer Committee meets normally once in a Quarter. The total complaints received and replied to the shareholders during the year ended 31st March, 2009 were 8 only. There were no complaints which were not resolved to the satisfaction of the shareholders and pending during the year. During the year five meetings of Committee were held. The following is the attendance record at the Committee during the year: Shareholders/Investors Grievance & Share Transfer Committee Attendance. S. No. Name of Members No. of Meetings attended 1 Mr. D K Jain 5 2 Mr Sandeep Dinodia 4 3 Mr. Manmohan Sachdev 5 4. COMPLIANCE OFFICER OF THE COMPANY Ms. Milita Bhar Company Secretary 17

20 5. GENERAL BODY MEETING The details of Annual General Meeting (AGMs) held in the last three years are as follows: Financial Year Date Time Location A.M. W-230, "S" Block M.I.D.C. Bhosari Pune A.M. Panchshil Club, 705, Club Road Moshi, Pune P.M. Panchshil Club, 705, Club Road Moshi, Pune Special Resolutions passed in previous three General Meetings (i) AGM held on : 1. Change the Name of Company from DHANESH AUTO ELECTRICALS LIMITED to LUMAX AUTO TECHNOLOGIES LIMITED. 2. Increase the remuneration of Mrs. Usha Jain, Managing Director (ii) AGM held on : 1. Appointment of Mrs. Usha Jain as Managing Director. 2. Amendment of Articles 80 of Articles of Association. (iii) AGM held on : 1. Approval of final utilization of IPO proceeds and project status. (iv) Postal Ballot Resolution passed on : 1. During the year the Company has passed a Special Resolution under Section 17 of the Companies Act, for alteration in the Object Clause of the Memorandum of Association of the Company through Postal Ballot mechanism. Mr. R.K Jain, Practicing Company Secretary was appointed as Scrutinizer. The Company followed the procedure as prescribed under the Companies Act, 1956 and The Companies (Passing of Resolution by Postal Ballot), Rules, 2001 for conducting the Postal Ballot Process and Mr. D.K Jain, Chairman, Mr. Anmol Jain, Director, along with Ms. Milita Bhar, Company Secretary, were authorised by the Board of Directors to conduct the Postal Ballot Process and were responsible for the entire Postal Ballot process. The detail of Special Resolution passed in the last year through Postal Ballot. Date of Notice Date of passing of Resolution Particulars of Resolution Percentage of votes cast in favour of Resolution Resolution under Section 17 of the Companies Act, 1956, for amendments in the Main Object Clause of the Memorandum of Association by including two more clauses related to the activities of Research and Development. Out of the total postal ballots received from 247 members, 230 members gave their assent to the resolution constituting 99.96% votes to the total no of votes received. 6. CODE OF CONDUCT The Company has adopted a Code of Conduct for all Board Members and Senior Employees of the Company. The Code of Conduct has already been posted on the website of Company for general viewing. All Board Members and Senior Management Personal have affirmed compliance with the Code of Conduct on annual basis. The Annual Report contains a declaration to this effect signed by the Managing Director. The code of conduct has also been posted on Company's website: 7. DISCLOSURES a. During , other than the transactions entered in the normal course of business and reported as the related party transactions in the annual accounts, the Company had not entered any materially significant related party transactions i.e. transaction of the Company of material nature with its Promoters/ Directors/Senior Employees or Relatives etc., which could have a potential conflict with the interest of Company at large. 18

21 Lumax Auto Technologies Ltd. b. The Audit Committee is briefed with all related party transaction undertaken by the Company. c. The Senior Employees have made disclosures to Board that they did not have personal interest in any material financial and commercial transactions that could result in a conflict with the interest of the Company at large. d. The Company has a Code of Conduct for its Board and Senior Employees (as per Corporate Governance Code) and the same is available at the Company's website. The Company has obtained a compliance certificate from all concerned. e. There has been no non-compliance penalties/strictures imposed on the Company by Stock Exchange(s) or SEBI or any other statutory authority, on any matter related to capital markets, during the last three years. f. The Company follows the Accounting Standards laid down by the Institute of Chartered Accountants of India, and there has been no deviation in the accounting treatment during the year, except as provided in this report. g. The Company does not have any Whistle Blower Policy. h. The Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement. i. The Company has formulated a Code of Conduct for prevention of Insider Trading in the Shares of the Company in accordance with the SEBI (Prohibition of Insider Trading) Regulation, MEANS OF COMMUNICATION It is the Managements' belief that all Share Holders should have access to complete information regarding Company's position to enable them to accurately access its future potential. The company's website ( serves as a key awareness facility for all shareholders, allowing them to access information at their convenience. It provide information of the company's financial performance, business strategy displays latest press releases as required by SEBI and Listing Agreements. The Annual / Quarterly results were published in National Daily newspapers -The Economic Times (English All Edition), Prabhat (Marathi Edition) and Nav Bharat Times, Financial Times, Mumbai Mirror. The 2nd, 3rd Quarter and Annual results were published in the Financial Express (All Edition) and Prabhat, Pune (Marathi Edition). 9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT FORMS PART OF THE DIRECTORS REPORT 10. GENERAL SHAREHOLDERS INFORMATION a) Annual General Meeting : The 28th Annual General Meeting is scheduled as under : Date : September 16, 2009 Time : 3.00 PM Venue : Plot No.70,Sector 10, PCNTDA Bhosari, Pune, Maharashtra b) Date of Book Closure : ( to ) (both days inclusive) c) Registered Office : Lumax Auto Technologies Limited W-230, S Block M.I.D.C Bhosari Pune , d) Financial Year : 1st April to 31st March e) For the year ended March 31, 2009 results were announced on: Adoption of Quarterly Results Ended Date 30th June, 2008 July 31, th September, 2008 October 20, st December, 2008 January 31, st March, 2009 (Audited Annual Accounts) June 30,

22 f) Financial Calendar for (Provisional) Adoption of Quarterly Results Ended In the Month of 30th June, th week of July th September, th week of October st December, th week of January st March, 2010 (Audited Annual Accounts) 4th week of June 2010 g) Dividend & Dividend Payment Date: A dividend of Rs.1.50 per share (15%) has been recommended by the Board of Directors for the Financial Year , out of the previous year profits which are subject to the approval of the Shareholders at the ensuing Annual General Meeting. For Demat shareholders and Physical shareholders who have opted for ECS, Dividend Amount of Rs.1.50 per share will be credited directly to their respective bank accounts through ECS, wherever such facilities are available, soon after the declaration of dividend in the AGM. For others, Dividend Warrants will be posted by September 30, 2009 (tentative date). h) Share Transfer System: To expedite the process of Share Transfers, the power for the same has been delegated to Company Secretary and Registrar, who shall attend to the same at least once in a fortnight. Share sent for transfer in physical form, if any, are registered and returned within the maximum period as prescribed by law from the date of receipt, subject to document being valid and complete in all respects. Similarly all request for demat are received and processed by the Registrar and Transfer Agents and confirmations given to the Depositories within the prescribed time limit. i) Registrars and Share Transfer Agent (For Physical as well as for Demat Segment) Address : Bigshare Services Private Limited E/2, Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (E), Mumbai Tel: Fax: flavia@bigshareonline.com Website: Contact Person: Ms. Flavia D'souza j) Investors Correspondence: All queries of Investors regarding the Company's shares in Physical / Demat form may be sent either to the Registrar & Share Agent or to the Secretarial Department of the Company at the following address: Address : Lumax Auto Technologies Limited Plot No. 70, Sector-10, PCNTDA, Bhosari, Pune, Maharashtra Tel: , Fax: militabhar@lumaxautotech.com Website: k) Listing on Stock Exchanges: Stock Exchange Scrip Code Bombay Stock Exchange Limited National Stock Exchange of India Limited LUMAXTECH l) ISIN No: INE872H01019 Listing Fees for the year has been paid to The Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. 20

23 Lumax Auto Technologies Ltd. m) Listing of GDRs / ADRs / FCCB : There is no convertible instrument which could result in increasing the Equity Capital of the Company and the Company has not issued any GDR / ADR / FCCB. n) Share Holding Pattern of the Company as on March 31, 2009 S. No. Category No. of Shares % of Shareholding A. Promoters' Holding 1. Promoters Indian Promoters 6,894, Foreign Promoters Persons Acting in Concert - - SUB TOTAL (A) 6,894, B. Non Promoters' Holding 3. Institutional Investors a. Mutual Funds and UTI - - b. Banks, Financial Institutions, Insurance Companies 37, c. FIIs 590, SUB -TOTAL (B-3) 627, Others a. Private Corporate Bodies 675, b. Indian Public 3,150, c. NRIs/OCBs 280, d. Any others 3, SUB -TOTAL (B-4) 4,109, SUB -TOTAL (B-3+4) 4,736, GRAND -TOTAL (A+B) 11,631, o) Distribution of Shareholding as on 31st March, Shareholding of Shareholders Shareholders Share Amount. Share Nominal Value of Rs. Number % to Total In Rupees Amount % to Total Up to 5, ,341, ,001 to 10, ,409, ,001 to 20, ,739, ,001 to 30, ,071, ,001 to 40, , ,001 to 50, , ,001 to 1,00, ,330, ,00,001 and above ,033, Total % 116,315, p) Dematerialisation of Shares: As per notifications issued by the Securities and Exchange Board of India (SEBI), the trading in Company's shares is permitted only in dematerialized form. In order to enable the shareholders to hold their shares in electronic form and to facilitate scripless trading, the Company has enlisted its shares with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). 21

24 q) Status of Dematerialisation as on 31st March, 2009: The shares of the Company are under compulsory Demat segment and are listed on Bombay Stock Exchange, Mumbai and National Stock Exchange of India Limited Mumbai. The Company's shares are available for trading in the Depository of both NSDL & CDSL. Category No. of Shares Shares in Demat mode with NSDL 4,180,221 Shares in Demat mode with CDSL 413,515 Shares in Physical mode 7,037,805 Total 11,631,541 r) Stock Market Data during the Financial Year The monthly High and Low Prices of the Shares of the Company Listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) along with the BSE Sensex and NSE Nifty. Month BSE Share Price Sensex Points Share Price S&P CNX Nifty Points High Low NSE High Low High Low High Low April, , , , , May, , , , , June, , , , , July, , , , , August, , , , , September, , , , , October, , , , , November, , , , , December, , , , , January, , , , , February, , , , , March, , , , , s) The performance of the Company's Share related to S&P CNX Nifty in graphical manner and monthly closing share price on BSE and NSE from April 2008 to March 2009 is given below : Stock Performance vis- a- vis S&P CNX Nifty Price: /03/2009 S&P CNX NIFTY: Price - S&P CNX NIFTY 01/04/ /06/ /09/ /10/ /01/ /03/2009 Monthly Closing Share Price on BSE & NSE (April 2008 to March 2009) Month BSE Sensex NSE Nifty April , , May , June , July , August September , October , November , December , January , February , March ,

25 Lumax Auto Technologies Ltd. t) Plant Locations of the Company as on 31st March, ) W-230. 'S' Block, M.I.D.C. Bhosari Pune, Maharashtra. 2) Plot No. 70, Sector-10, PCNTDA, Bhosari Pune, Maharashtra. 3) Gat No. 156/1, Mahalunge, Chakan Pune, Maharashtra. 4) Plot No. 54/8, D-II, Block-2, M.I.D.C. Chinchwad, Maharashtra. 5) W-28, M.I.D.C., Waluj, Industrial Area Aurangabad, Maharashtra. 6) A-8, M.I.D.C., Waluj,, Industrial Area Aurangabad, Maharashtra. 7) B-86, Mayapuri Industrial Area, Phase-I, New Delhi. (Marketing Division) u) Shares issued during IPO which are unclaimed and lying in Demat Suspense Account. The details pertaining to the shares issued during the IPO in the year January 2007 and which are unclaimed and lying in the Demat Suspense Account as per Information received from the Registrar are as follows: S. No Description No of Shareholders No of Shares 1 Aggregate No. of shareholders & Shares pending as on No. of shareholders who approached for transfer of shares from Demat suspense account during the year No. of shareholders and shares transferred from Demat suspense account during the year No. of shareholders and shares outstanding at the end of year in March 31, The voting rights on the remaining 1123 shares shall remain frozen till the rightful owner of such shares claims the shares 11. Non-Mandatory requirements The Company is complying with mandatory requirements and partly complying with the Non-Mandatory requirements such as: The Company has constituted a Remuneration Committee of Independent & Non-Executive Directors. A detailed note on the Remuneration Committee has already provided in the foregoing paras of the report. 12. CEO & CFO CERTIFICATE The Managing Director, Mrs. Usha Jain and the Finance Head, Mr. Ashish Dubey have furnished the requisite certificate to the Board of Directors pursuant to Clause 49 (V) of the Listing Agreement. 13. OTHER INFORMATION Electronic Clearing Service (ECS) SEBI had vide its Circular No.DCC/FITTCIR-3/2001 dated October 15, 2001 advised that all Companies should mandatory use ECS facility wherever available. In the absence of ECS facility, companies may use warrants for distributing the dividends and vide its Circular No.D&CC/FITTCIR-04/2001 dated November 13, 2001 had advised companies to mandatorily print the Bank Account details furnished by the Depositories, on the dividend warrants. This ensures that the dividend warrants, even if lost or stolen, cannot be used for any purpose other than for depositing the money in the accounts specified on the dividend warrants and ensures safety for the investors. However, members who wish to receive dividend in an account other than the one specified while opening the Depository Account, may notify their DPs about any change in the Bank Account details. Nomination Facility Shareholders holding Shares in Physical Form and desirous of making a Nomination in respect of their Shareholding in the Company, as permitted under Section 109A of the Companies Act, 1956, are requested to submit to the Company in the prescribed Form 2B for this purpose. 23

26 CEO & CFO Certification Under Clause 41 & 49(V) of the Listing Agreement to be placed before the Board along with Audited Annual Accounts for the year ended 31st March a. We certify to the Board that we have reviewed Financial Statements and Cash Flow Statement for the year ended 31st March 2009 and that to the best of our knowledge and belief; (i) (ii) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations. b. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of Company's Code of Conduct. c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the Internal Control Systems of the Company pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies, if any. d. We have indicated to the Auditors and the Audit Committee (i) (ii) (iii) Significant changes in internal control over financial reporting during the year, if any; Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements, if any; There were no instances of fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company's internal control system. Place : Gurgaon ASHISH DUBEY USHA JAIN Date : June 30, 2009 (FINANCE HEAD) (MANAGING DIRECTOR) Certificate of Compliance of Code of Conduct by Board of Directors and Senior. Management Personnel I Usha Jain, Managing Director of the Company hereby certify that the Board of Directors and the Senior Management Personnel have affirmed compliance of the Code of Conduct of the Company for the FY Place : Gurgaon Date : June 30, 2009 USHA JAIN (MANAGING DIRECTOR) Auditors' Certificate on Corporate Governance To, The Members of Lumax Auto Technologies Limited We have examined the compliance of conditions of Corporate Governance by Lumax Auto Technologies Limited, for the year ended on March 31, 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For D.R. Barve & Co Chartered Accountants C A D.R. Barve Proprietor Place : Pune Membership No.:17661 Date : June 30,

27 Lumax Auto Technologies Ltd. To, Auditors' Report On Accounts The Members of Lumax Auto Technologies Limited 1. We have audited the attached Balance Sheet of Lumax Auto Technologies Limited as at 31st March, 2009, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed there to. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors' Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in the paragraphs 4 and 5 of the said order. 4. Further to our comments in the Annexure referred to above, we report that; i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii) iii) In our opinion, proper books of account as required by the law have been kept by the Company so far as it appears from our examination of those books; The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, iv) On the basis of written representations received from the Directors, as on 31st March, 2009 and taken on record by the Board of Directors, we report that none of these Directors of the Company is disqualified as on 31st March, 2009 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, v) In our opinion and to the best of our information and according to explanations given to us, the said accounts, read together with other notes appearing in Schedule W and their impact on Profit & Loss Account, Cash Flow Statement and Balance Sheet give the information required by the Companies Act, 1956, in the manner so required to give a true & fair view in conformity with the accounting principles generally accepted in India: a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March b) in the case of the Profit & Loss Account, of the profit for the year ended on that date. c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Place: Pune Date: June 30, 2009 Annexure To Auditors' Report For D. R. Barve & Company Chartered Accountants CA D. R. Barve (Proprietor) Membership No Annexure referred to in paragraph 3 of our report of even date Re: Lumax Auto Technologies Limited i) (a) The company is in the process of maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. ii) (a) iii) (a) (b) We have been informed that the fixed assets of the company have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. (c) In terms of the information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that no substantial part of fixed assets have been disposed off during the year and hence our comments regarding the effect on going concern principle are not required. As informed to us, physical verification of inventory of the company has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable. (b) In our opinion and according to the explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) In our opinion and according to the explanations given to us, the company is maintaining proper records of inventory. We have been informed that no material discrepancies have been noticed on physical verification of inventory as compared to book records. According to the information and explanations given to us, the company has granted unsecured loan to one company covered in the register maintained under Section 301 of the Companies Act, The maximum amount involved during the year was Rs. 1, Lacs and the year-end balance of the said loan was Rs. 1, Lacs. (b) According to the information and explanations given to us, the said loan is interest free. However, the other terms and conditions of loan given are not prima facie prejudicial to the interest of the Company. 25

28 iv) (c) Since there is no stipulation as to the time period for recovery of principal amount of unsecured loans given, we are unable to comment on the regularity of the same. (d) Further, as there is no stipulation as to the time period for recovery of principal amount of unsecured loans given, we are also unable to comment on the overdue amount in respect of the said loan. (e) According to the information and explanations given to us, the company has taken unsecured loans, from two parties covered in the register maintained under Section 301 of the Companies Act, The maximum amount involved during the year was Rs Lacs and the year-end balance of the loans taken from such parties was Nil. (f) According to the information and explanations given to us, the rate of interest and other terms and conditions of unsecured loans taken by the company are not prima facie prejudicial to the interest of the company. (g) According to the information and explanations given to us, the company is generally regular in repayment of principal amount and interest thereon according to the terms and conditions of the loan agreement. In our opinion and according to the explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods & services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the of the Companies Act, 1956 have been so entered in the register required to be maintained under that section; and vi) (b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. According to the information and explanations given to us, the company has not accepted deposits from the public during the year under report. vii) In our opinion, the Internal Audit System of the company is commensurate with it s size and nature of its business. viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. However, we have not made detailed examination of the records with a view to determine whether they are accurate or complete. ix) (a) According to the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investors' Education & Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, cess or any other statutory dues with the appropriate authorities during the year. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investors' Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty And Cess and any other undisputed statutory dues were outstanding at the year end, for a period of more than six months from the date they became payable. (c) According to the information and explanations given to us, there are no disputed amounts payable in respect of Provident Fund, Investors' Education And Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty or Cess, by the company except following: x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceeding financial year. xi) xii) xiii) xiv) xv) xvi) Name of the statute Income Tax Act, 1961 Income Tax Act, 1961 The Central Excise Act, Nature of dues Amount (Rs. in Lacs) Period to which the amount relates Forum where dispute is pending Income Tax 0.40 F.Y Income Tax Appellate Tribunal Income Tax 0.31 F.Y C.I.T. Appeals Interest on Supplementary Invoices 1.96 Jan 2003 to Central Excise Appellate March 2007 Tribunal As informed to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. As informed to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities. In our opinion the Company is not a chit-fund, nidhi or mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company. As informed to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the Company. As informed to us, the proceeds of the loans taken by the Company are applied for the purpose for which the loans were obtained. xvii) In our opinion and according to the explanations given to us, the funds raised by the Company on short term basis have not been used for long-term investment. 26

29 Lumax Auto Technologies Ltd. xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. xix) xx) xxi) The Company did not have any outstanding debentures at the end of the year. The Company has not issued any shares during the year under report. Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and Place: Pune Date: June 30, 2009 For D. R. Barve & Company Chartered Accountants CA D. R. Barve (Proprietor) Membership No

30 Balance Sheet as at March 31, 2009 (Amount in Rs.) Particulars Schedule As at As at Sources of Funds Share Holders Funds Share Capital 1 116,315, ,315,410 Reserves & Surplus 2 252,222, ,405, ,537, ,721,008 Loan Funds Secured Loans 3 140,605, ,942,484 Unsecured Loans 4 12,889,588 23,189, ,494, ,132,444 Deferred Tax Liability (Net) 5 22,018,000 24,092,000 Total 544,050, ,945,452 Application of Funds Fixed Assets 6 Gross Block 465,642, ,672,831 Less : Depreciation-Accumulated / Amortisation 116,136,038 96,785,504 Net Block 349,506, ,887,327 Capital Work In Progress 5,098,713 66,784, ,604, ,671,500 Investments 7 39,194,720 26,670,720 Current Assets, Loans & Advances Inventories 8 157,679, ,253,155 Sundry Debtors 9 183,407, ,616,680 Cash and Bank Balances 10 26,764,263 50,641,536 Loans & Advances ,491, ,938,455 Less : Current Liabilities & Provisions 531,342, ,449,826 Current Liabilities ,369, ,076,688 Provisions 13 20,722,482 23,769, ,091, ,846,594 Net Current Assets 150,251, ,603,232 Miscellaneous Expenditure [To the extent not written off or adjusted] Total 544,050, ,945,452 Notes To Accounts 23 The Schedules referred to above form an integral part of the Balance Sheet. As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Ashish Dubey Milita Bhar Date : June 30, 2009 Head Finance Company Secretary 28

31 Lumax Auto Technologies Ltd. Profit & Loss Account for the year ended March 31, 2009 (Amount in Rs.) Particulars Schedule Year ended Year ended Income Turnover (Gross) 15 1,746,588,115 1,981,685,742 Less : Excise Duty 133,945, ,759,590 Turnover (Net) 1,612,642,715 1,771,926,152 Other Income 16 6,004,255 6,540,851 Total 1,618,646,970 1,778,467,003 Expenditure Purchases of Traded goods 809,378, ,853,715 Material Consumed ,718, ,881,274 Decrease/(Increase) In Inventory 18 (8,490,838) (17,378,406) Manufacturing Expenses ,529, ,942,293 Personnel Expenses 20 91,627,571 95,174,466 Administrative Expenses ,017,545 74,108,664 Finance Expenses 22 13,982,628 13,385,651 Depreciation 20,344,632 20,996,918 Total 1,613,107,346 1,734,964,575 Profit Before Tax 5,539,624 43,502,428 Less : Provision for Taxation For Earlier Tax - 415,512 For Current Tax 837,000 12,135,000 Deferred Tax (2,074,000) 2,521,700 Fringe Benefit Tax 1,060, ,000 Net Profit After Tax 5,716,624 27,692,216 Balance brought forward from earlier year 22,171,547 22,592,748 Prior period adjustments (244,143) (5,000,935) Profit available for appropriation 27,644,028 45,284,029 Less : Proposed Dividend 17,447,312 17,447,312 Tax on Proposed Dividend 2,965,170 2,965,170 Transfer to General Reserve 300,000 2,700,000 Surplus carried to Balance Sheet 6,931,546 22,171,547 Net Profit After Tax Basic & Diluted Earnings Per Share (Face Value of Rs. 10/- each) 5,716,624 27,692, Notes to Accounts 23 The Schedules referred to above form an integral part of the Profit & Loss Account. As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Ashish Dubey Milita Bhar Date : June 30, 2009 Head Finance Company Secretary 29

32 Cash Flow Statement for the year ended March 31, 2009 Particulars A. Cash Flow From Operating Activities : Profit Before Tax 5,539,624 43,502,428 Adjustments For : Depreciation & Amortisation of Assets 20,344,632 20,996,918 Loss/(Profit) on Sale of Fixed Assets 63,315 (159,300) Interest Income (1,012,801) (1,373,934) Interest Expense 13,982,628 13,385,651 Voluntary Retirement Compensation & Deferred Expenditure Written Off - 808,129 Operating Profit Before Working Capital Changes 38,917,398 77,159,891 Adjustments For : Inventories (5,426,372) (46,493,894) Trade & Other Receivables 32,453,812 73,502 Trade & Other Payables (22,707,400) 44,049,232 Other Loans & Advances ( Net ) 4,387,549 (6,653,026) Cash Generated From Operations 47,624,987 68,135,705 Direct Taxes Paid (9,506,677) (11,954,512) Net Cash From Operating Activities 38,118,310 56,181,193 B. Cash Flow From Investing Activities : Purchase of Fixed Assets (108,949,594) (20,109,336) Proceeds From Sale of Fixed Assets 31,055,743 3,328,288 Purchase of Investment (12,524,000) (13,947,500) Interest Received 1,012,801 1,373,934 Decrease / (Increase) In Capital W.I.P. 61,685,460 (51,095,597) Net Cash From Investing Activities (27,719,590) (80,450,211) C. Cash Flow From Financing Activities : (Amount in Rs.) Year ended Year ended Increase/(Decrease) In Borrowings 362,377 52,387,674 Interest Paid (13,982,628) (13,385,651) Dividend Paid (17,447,312) (17,447,312) Expended During the Year (243,260) (112,360) Tax on Distributed Profits (2,965,170) (2,965,171) Net Cash From Financing Activities (34,275,993) 18,477,180 Net Increase/(Decrease) In Cash & Cash Equivalents (A+B+C) (23,877,273) (5,791,838) Cash & Cash Equivalents at the Beginning of the Year 50,641,536 56,433,374 Cash & Cash Equivalents at the end of the year 26,764,263 50,641,536 As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Ashish Dubey Milita Bhar Date : June 30, 2009 Head Finance Company Secretary 30

33 Lumax Auto Technologies Ltd. Schedules to the Accounts Particulars (Amount in Rs.) As at As at Schedule 1 Share Capital Authorised Share Capital 15,000,000 Equity Shares of Rs.10/- each 150,000, ,000,000 Issued,Subscribed, Called Up & Paid Up Share Capital : 11,631,541 Equity Shares of Rs. 10/- each fully paid - up. 116,315, ,315,410 Out of above : i) 319,297 Equity Shares were issued as fully paid-up shares by capitalising the Reserves. ii) 1,272,222 Equity Shares have been issued for consideration received otherwise than in Cash. iii) 1,400,170 Equity Shares were issued by way of conversion of Debentures. Schedule 2 Reserves & Surplus 116,315, ,315,410 Securities Premium Account Balance as per last Balance Sheet 234,452, ,564,410 Less: Share Issue/ Preliminary Expenses 243, , ,208, ,452,050 General Reserve Balance as per last Balance Sheet 10,782,000 8,082,000 Add : Transfer from Profit & Loss Account 300,000 2,700,000 11,082,000 10,782,000 Profit And Loss Account Transferred from Profit & Loss A/c 6,931,546 22,171,548 6,931,546 22,171,548 Schedule 3 Secured Loans 252,222, ,405,598 Term Loan - I 4,000,000 10,000,000 ABN AMRO BANK N. V. (Secured against mortgage of Land, Building Hypothecation of Plant and Machinery) Amount due within one year Rs.4,000,000/-(Previous year Rs. 6,000,000/-) Term Loan - II 2,500,000 12,100,000 ABN AMRO Bank N. V. (Secured against mortgage of Land, Building Hypothecation of Plant and Machinery) Amount due within one year Rs. 2,500,000/- (Previous year Rs. 9,600,000/-) 31

34 Schedules to the Accounts Particulars (Amount in Rs.) As at As at Term Loan - III 43,529,000 40,000,000 ABN AMRO - Bank N. V. (Secured against mortgage of Land, Building Hypothecation of Plant and Machinery) Amount due within one year Rs. 14,258,000/- (Previous year Rs. 8,400,000 /-) Term Loan - IV 2,785,715 - ABN AMRO Bank N. V. (Secured against mortgage of Land, Building Hypothecation of Plant and Machinery) Amount due within one year Rs. 857,140/- Cash Credit Facilities 86,353,865 66,682,257 ABN AMRO Bank N. V. (Secured against Hypothecation of Inventories & Book debts). I C I C I Bank Ltd. 123, ,897 (Secured against Hypothecation of Maruti Car) amount due with one year Rs. 91,353/- (Previous year Rs. 84,474/-) H D F C Bank Ltd. (Secured against Hypothecation of Logan Car) amount due within one year Rs.158,161/- (Previous year Rs. 141,018/-) 244, ,330 Maruti Suzuki India Ltd. 376, ,000 (Secured against Hypothecation of Maruti Car) Amount due with in one year Rs.141,116/- (Previous year Rs. 190,467/-) Kotak Mahindra Prime Ltd. (Secured against Hypothecation of Maruti 692,385 - Car & Hyundai Car) Amount due with in one year Rs. 306,640/- 140,605, ,942,484 Schedule 4 Unsecured Loans Loan from others 839,588 10,339,588 Deferral Payment of Sales Tax 12,050,000 12,050,000 Interest Accured & due - 800,372 12,889,588 23,189,960 Schedule 5 Deferred Tax Liability Balance as per last Balance Sheet Add/(Less): Transferred from P&L Account 24,092,000 21,570,300 (2,074,000) 2,521,700 22,018,000 24,092,000 32

35 Lumax Auto Technologies Ltd. Schedules to the Accounts Schedule 6 Fixed Assets (Amount in Rs.) GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK Name of the Assets As at Additions Sales/ Adjustments As at As at For the Year Sales/ Upto As at As at Adjustments Adjustments TANGIBLE ASSETS Free Hold Land 761, , , ,200 Lease Hold Land 33,037,485 21,542,515 (717,373) - 53,862,627 11, , ,019 53,552,608 33,025,646 Buildings 86,755, , ,374,314 12,552,035 2,898,382-15,450,417 71,923,897 74,203,962 Plant & Machinery 246,478,320 78,411,461 (31,210,142) - 293,679,639 73,648,560 15,019,286 (986,611) 87,681, ,998, ,829,760 Furniture & Fixtures 8,499, , ,347,175 4,325, ,850-4,830,922 4,516,253 4,174,131 Office Equipments Vehicles 6,628,152 1,155, ,783,281 2,530, ,060-3,210,187 4,573,094 4,098,025 Computers 6,512, ,249 (52,750) - 7,049,973 3,717, ,125 (7,487) 4,472,509 2,577,464 2,794,603 INTANGIBLE ASSETS Technical Know how 5,783,950 5,783, , ,749 5,603,201 Grand Total 388,672, ,949,593 (31,980,265) - 465,642,159 96,785,504 20,344,632 (994,098) 116,136, ,506, ,887,327 Previous Year 374,134,158 20,109,336 (5,221,705) (348,959) 388,672,831 77,754,909 21,008,757 (1,978,162) 96,785, ,887, ,379,248 Particulars (Amount in Rs.) As at As at Schedule 7 Investments Unquoted-Long Term 20 Equity shares of Rs.50 /- each fully paid-up of 1,000 1,000 Rupee Co-Operative Bank Ltd. In Subsidiary Company 4,240,313 Equity Shares of Rs. 10/- Each fully paid up of Lumax DK Auto Industries Ltd. (Acquired in Consideration of issue of 1,272,222 equity shares of 10/- each fully paid-up) In Joint Venture Company 2,647,150 (1,394,750) Equity Shares of Rs. 10/- Each fully paid up of Lumax Cornaglia Auto Technologies Pvt. Ltd. 12,722,220 12,722,220 26,471,500 13,947,500 39,194,720 26,670,720 33

36 Schedules to the Accounts Particulars Current Assets, Loans and Advances Schedule 8 Inventories Stock In Trade (As taken, valued & certified by the Management) Raw Material & Components 88,925,399 91,607,749 Consumables 2,053,313 2,532,703 Packing Material 241, ,901 Finished Goods 60,745,310 51,860,281 Work In Progress 5,446,466 5,867,990 Stock In Transit 267, , ,679, ,253,155 Schedule 9 Sundry Debtors (Unsecured, Unconfirmed & Considered Good) Debts outstanding for a period exceeding six months 15,908,767 19,467,535 Other Debts 167,498, ,149,145 Schedule 10 Cash and Bank Balances (Amount in Rs.) As at As at ,407, ,616,680 Cash In Hand 427, ,923 Cheques in Hand - 889,744 Balance with Scheduled Banks a) In Current Accounts 17,067,591 40,171,080 b) In Fixed Deposit Accounts 9,268,789 9,268,789 26,764,263 50,641,536 Schedule 11 Loans And Advances Advances to Subsidiary Company 103,358, ,552,688 Advances recoverable in cash or kind for value to be received 31,649,758 26,750,348 Security Deposits 28,483,819 28,635, ,491, ,938,455 Current Liabilities and Provisions Schedule 12 Current Liabilities Sundry Creditors a) Micro, Small & Medium Enterprises 32, ,572 b) Others 304,088, ,437,894 Outstanding Expenses 29,224,170 34,310,022 Advances received from customers 26,809,565 22,154,200 Unclaimed Dividend 214,222 - Schedule 13 Provisions 360,369, ,076,688 Taxation - 3,357,424 Fringe Benefit Tax 310,000 - Proposed Dividend 17,447,312 17,447,312 Tax on Proposed Dividend 2,965,170 2,965,170 Schedule 14 Miscellaneous Expenditure To The Extent Not Written off or Adjusted Deferred Revenue Expenditure 20,722,482 23,769,906 Balance as per last Balance Sheet - 808,129 Less: Written off during the year - 808,

37 Lumax Auto Technologies Ltd. Schedules to the Accounts Particulars (Amount in Rs.) Year Ended Year Ended Schedule 15 Turnover Turnover (Gross) 1,746,588,115 1,981,685,742 1,746,588,115 1,981,685,742 Schedule 16 Other Income Miscellaneous Income 1,843,444 1,816,630 Interest Received (T.D.S. Rs.118,330/- Previous year Rs.113,059/-) 1,012,801 1,373,934 Discount Received 225, ,455 Profit/(Loss) on Sale of Assets (63,315) 159,300 Foreign Exchange Gain 1,937, ,616 Miscellaneous balance written back 1,048,622 1,753,915 Schedule 17 Material Consumed 6,004,255 6,540,851 Opening Stock of Raw Material 91,607,749 62,742,891 Add : Purchases during the year 480,036, ,746, ,643, ,489,023 Less : Closing Stock of Raw Material 88,925,399 91,607,749 Schedule 18 Decrease/(Increase) In Inventory Opening Inventory : 482,718, ,881,274 Work in Progress 5,867,990 9,940,225 Stock in Transit 231,218 1,322,544 Finished Goods 51,869,594 29,327,627 57,968,802 40,590,396 Closing Inventory : Work in Progress 5,446,466 5,867,990 Stock in Transit 267, ,531 Finished Goods 60,745,310 51,860,281 66,459,640 57,968,802 Decrease/(Increase) In Inventory (8,490,838) (17,378,406) Schedule 19 Manufacturing Expenses Miscellaneous Manufacturing Expenses 788,136 2,836,464 Packing Material 5,272,583 3,979,623 Consumables 36,936,939 35,437,099 Job-Work 21,186,482 41,782,323 Labour Charges (Contract) 18,956,929 20,907,103 Electricity, Light & Power 13,026,882 17,450,846 Freight and Cartage 5,228,848 5,841,899 Water Charges 446, ,515 Repairs & Maintenance - Plant & Machinery 1,685,639 4,276, ,529, ,942,293 35

38 Schedules to the Accounts Particulars (Amount in Rs.) Year Ended Year Ended Schedule 20 Personnel Expenses Wages & Salary 73,380,656 78,387,016 Bonus 5,271,755 3,571,263 Provident Fund Contribution 4,951,400 5,663,313 Welfare Expenses 3,206,797 3,478,439 E.S.I. Contribution 408,017 1,335,617 Gratuity/Group Gratuity 3,528, ,818 Directors' Remuneration 880, ,000 Commission to Director - 900,000 Schedule 21 Administrative Expenses 91,627,571 95,174,466 Rent, Rates & Taxes 3,458,966 3,120,627 Repairs to Buildings 192, ,838 Repairs Others 1,266,195 1,534,083 Insurance Charges 803, ,214 Travelling & Conveyance 5,845,859 5,403,193 Security Charges 2,060,118 2,261,363 Printing & Stationery 1,180,135 1,970,949 Postage & Telephones 3,007,655 3,135,693 Office Expenses 155, ,248 Advertisement 622,371 1,956,336 Profession Tax 2,500 2,500 Vehicle Expenses 1,375,622 1,485,794 Legal & Professional Fees 2,130,938 3,612,810 Carriage Outward 29,128,148 25,176,395 Miscellaneous Expenses 6,469,407 2,075,650 Meeting Fees 64,500 54,500 Breakage & Cash Discount / Sales Incentive 31,420,724 19,795,821 Commission to Selling Agent 1,437,093 1,113,650 Bad Debts 9,344,404 Royalty 51, ,017,545 74,108, Schedule 22 Finance Cost Interest on Term Loans 1,844,772 5,377,673 Interest on Working Capital Advance 8,914,006 3,594,249 Interest paid to others 715,112 2,250,715 Bank Charges 2,508,738 2,163,014 13,982,628 13,385,651 36

39 Lumax Auto Technologies Ltd. Schedule 23 : Notes To Accounts 1. Significant Accounting Policies: A) Basis of Preparation of Financial Statements: The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. B) Fixed Assets : Fixed Assets are stated at Cost Net of CENVAT, Cess, Deferred Excise Duty and VAT set-off less accumulated depreciation. Cost includes purchase cost together with inward freight, duties, taxes and incidental cost of acquisition and installation and eligible borrowing costs and also includes pre-operative expenses incurred during the construction, trial and stabilization period, up to the period such assets are put to commercial use. C) Depreciation: Depreciation on Fixed Assets is provided on Straight Line Method at the rates as provided under schedule XIV to the Companies Act, D) Intangible Assets and Amortisation: Intangible assets are recognised as per the criteria specified in Accounting Standard (AS) 26 Intangible Assets issued by the Institute of Chartered Accountants of India and are amortised as follows: (a) Leasehold land: over the period of lease (b) Specialised software: Over a period of three years E) Investments: a) Current Investments are valued at cost or market price whichever is lower. b) Long Term Investments are valued at cost less permanent diminution if any. F) Inventories: a) Raw Materials including components, consumables & packing material are valued at cost after making provision for obsolescence wherever necessary. Cost is determined on First-in-First-Out (FIFO) basis. b) Work in Progress is valued at estimated Cost. c) Goods purchased for resale & other finished goods are valued at lower of the cost or net realizable value. d) Scrap is valued at estimated realizable value. G) Revenue Recognition: a) Sale of goods is recorded when supply of goods takes place in accordance with the terms of Sale. It includes Excise Duty but excludes trade discount and Sales Tax. b) Interest income is recognized on accrual basis. c) Revenue from Logistics activity is recognized on the basis of contract entered in to by the company on accrual basis. H) Employees' Retirement Benefits: a) The Company's contribution to Provident Fund is charged to Profit & Loss Account. b) The Company's contribution to Gratuity Fund of Life Insurance Corporation of India is provided on the basis of scheme subscribed by the Company and the same is charged to Profit & Loss Account. c) Voluntary Retirement Compensation:- 20% of the amount paid to the employees towards voluntary retirement is charged to Profit & Loss Account. d) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave for future encashment subject to certain limits. The liability is provided based on the number of days of unutilised leave at balance sheet date on the basis of an independent actuarial valuation. Employee Benefits (a) During the year, the Company has recognized the following amounts in the Profit and Loss Account: Defined Contribution Plans Particulars Year Ended Year Ended Employer s Contribution to Provident Fund 4,951,400 5,663,313 Employer s Contribution to Employee State Insurance 408,017 1,335,617 37

40 Defined Benefit Plans Particulars Gratuity Gratuity Leave Encashment Leave Encashment Year Ended Year Ended Year Ended Year Ended Current service cost 644,029 1,118, , ,175 Interest Cost 461, , , ,575 Expected Return on Plan Assets Actuarial (gain) / loss 2,529,005-1,277, , ,646 Short Term 0 0 Net cost 3,634, , ,872 1,486,396 (b) The assumptions used to determine the benefit obligations are as follows: Particulars Gratuity Gratuity Leave Encashment Leave Encashment Year Ended Year Ended Year Ended Year Ended Discount Rate 8.00% 7.50% 8.00% 7.50% Expected Rate of increase in Compensation Levels 5.00% 5.00% 5.00% 5.00% Expected Rate of Return on Plan Assets N.A. N.A. N.A. N.A. Expected Average remaining working lives of employees (years) N.A. N.A. N.A. N.A. (c) Reconciliation of opening and closing balances of benefit obligations and plan assets Gratuity Gratuity Leave Encashment Leave Encashment Particulars Year Ended Year Ended Year Ended Year Ended Change in Projected Benefit Obligation (PBO) Projected benefit obligation at beginning of year * 5,763,649 6,857,645 2,143,692 2,167,666 Current service cost 644,029 1,118, , ,175 Interest cost 461, , , ,575 Benefits paid (158,780) 0-149, ,302 Actuarial (gain) / loss 2,529,005-1,277, , ,646 Projected benefit obligation at year end & change in plan assets: Fair value of plan assets at year end- Long Term 9,364,082 2,398,457 2,561, Fair value of plan assets at year end- Short Term Net funded status of the plan 9,364,082 23,98,457 2,561, Net amount recognized 9,364,082 2,398,457 2,561,403 - I) Borrowing Costs: Borrowing Costs that are attributable to the acquisition or construction of qualifying fixed assets are capitalized as part of the cost of assets. All other borrowing costs are recognized as expense in the year in which they are incurred. J) Cash Flow Statement : Cash flow statement has been prepared following the indirect method set out in the Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India. K) Taxes On Income: a) Income Tax expenses for the period comprise of Current Tax, Deferred Tax & Fringe Benefit Tax. b) Current Tax & Fringe Benefit Tax are the amounts of tax payable on the taxable income/expenses for the year determined in accordance with the provisions of the Income Tax Act,

41 Lumax Auto Technologies Ltd. c) Deferred Tax is recognized, on the timing differences, being the difference between accounting income and taxable income, which originates in one period and are capable of reversal in one or more subsequent accounting periods in accordance with provisions of Accounting Standard 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India. Deferred Tax Asset in respect of brought forward losses is recognized as if there is virtual certainty that there will be sufficient future taxable income against which such asset can be realized. L) Translation of Foreign Currency items a) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Exchange difference arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise. b) Monetary items denominated in foreign currency are reported using the closing exchange rate on each Balance Sheet date. M) Segment Reporting The Company has considered 'Business Segment' as the primary segment for disclosure. Further, since the company is engaged in the manufacturing of Automotive Parts, in the opinion of the Management, the Company operates in one primary segment only. N) Accounting for Interests in Joint Ventures: Interests in Joint Ventures are accounted as follows: Type of Joint Venture Accounting treatment Jointly Controlled Entities a) Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established. b) Investment in such Joint Ventures is carried at cost after providing for any permanent diminution in value. O) Provisions and Contingent Liabilities: Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if a) the Company has a present obligation as a result of a past event, b) a probable outflow of resources is expected to settle the obligation; and c) the amount of the obligation can be reliably estimated. Contingent liability is disclosed in case of a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation, b) a present obligation when no reliable estimate is possible; and c) a possible obligation arising from past events where the probability of outflow of resources is not remote. 2. Contingent Liabilities not provided for (Rs. in lacs) S. No. Particulars i) Provision for Income Tax assessment dues (Appeal pending with ITAT for the Financial year ) ii) Provision for Income Tax assessment dues (Appeal pending with C.I.T (Appeal), Financial year ) iii) Interest on Supplementary invoice for the period January 2003 to March 2007 Matter pending with CESTAT Mumbai iv) Corporate Guarantee given for Loans taken by Subsidiary Company Lumax DK Auto Industries Limited v) Capital Commitment Net of Advance Based on the favourable decisions in similar cases/legal opinions taken by the Company, the company believes that it has good cases in respect of the items listed under (i) to (iii) above and hence no provision there against is considered necessary. 3. Details in respect of Opening Stock, Production, Turnover & Closing Stock of Finished Goods: As Per Annexure-A (Certified by Management). 4. Details in respect of consumption of Raw Materials and Consumables and others: As per Annexure-B (Certified by Management). 39

42 5. In terms of Paragraph-3 Part-II of Schedule VI of the Companies Act 1956, quantity wise disclosure have been restricted to those items/articles which individually account for 10% or more of the total Sales, Consumption as the case may be and the same is disclosed to the extent available and considered as compiled and certified by the management. 6. Sundry Creditors as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) have been identified to the extent of information available with the company. This has been relied upon by the auditors. Sundry Creditors include following amounts due to MSMED parties: S.No Particulars Principal Interest Total A The outstanding dues to micro and small enterprises. 32, ,996 (174,572) (1,291) (175,863) B Principal amount and Interest due thereon remaining unpaid as at end 32, ,996 of the year (174,572) (1,291) (175,863) C Amount of Interest paid in terms of Section 16 of MSMED Act alongwith the amount of the payment made to supplier beyond (-) (-) (-) appointed day D Outstanding Interest (Where principal amount has been paid off to the - 1,720 1,720 supplier but interest amount is outstanding as on March 31, 2009) (-) (1,291) (1,291) E Total Interest out standing as on March 31, 2009 (Interest in 'B' + - 1,886 1,886 interest in 'D' above) (-) (1,291) (1,291) 7. The Balances of parties are subject to confirmations. Year ended March 31, 2009 (Amount in Rs.) 8. None of the employees was in receipt of remuneration more than Rs.24 Lacs per annum, if employed throughout the year or Rs.2 Lacs per month if employed for part of the month. 9. In previous year, the Company has adopted the Accounting Standard AS-15 (Revised) which is mandatory from Accounting Period commencing on or after December 07, The Company has provided for Employee Benefits on actuarial valuation as per Projected Unit Credit Method, using principles laid under Accounting Standard 15 (Revised). 10. Interest in Joint Venture Companies Pursuant to Accounting Standard 27 on Financial Reporting of Interests in Joint Ventures, the relevant information relating to the Joint Venture Company, is as given below: Name of the Joint Country of Proportion of Description of Interest Venture Company Incorporation Ownership interest Lumax Cornaglia Auto Technologies India 50% JV is established principally for Private Limited manufacture, assembly and sale of automotive components The Company's share in the aggregate amounts to each of the Assets, Liabilities, Income, Expenses, Capital Commitments and Contingent liabilities as at / for the year ended March 31, 2009 and March 31, 2008 are as under: Proportion of Company's Interest in Joint Venture (Amount in Rs.) Assets 27,123,578 13,598,924 Liabilities 242,191 Nil Income 12,569,807 40,197 Expenses 11,811, ,772 Capital Commitments 15,480,500 Nil Contingent Liabilities Nil Nil 40

43 Lumax Auto Technologies Ltd. 11. Statement showing the use of proceeds from Initial Public Offer. During the year ended March 31, 2007, the Company had issued 30,12,539 equity shares of Rs. 10/- each by way of initial public offering at a premium of Rs.65/- per share. The net proceeds of the issue have been utilized for the objects upto March 31, 2008 therefore the same is not required to be disclosed. 12. Subsequent to Accounting Standard 22 Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, Deferred Tax income of Rs.20,74, for the period is recognized in the Profit & Loss Account. The significant components of the Deferred Tax Liability as on March 31, 2009 are:- (Amount in Rs.) S.No. Particulars Year ended Year ended Deferred Tax Liability - - i) Depreciation 29,212,219 25,292,840 Total 29,212,219 25,292, Deferred Tax Asset i) Capital Loss Nil 596,182 ii) Disallowance u/s 43B 1,170, ,440 iii) Disallowance u/s 40 (a) ( ia ) 17,540 10,218 iv) Unabsorbed Depreciation 6,006,397 Nil Total 7,194,219 1,200,840 Deferred Tax Liability(Net) ( 1 2 ) 22,018,000 24,092, Information Regarding Capacity Etc. S.No. Particulars Year Ended Year Ended Licensed Capacity Not Applicable Not Applicable 2. Installed Capacity Not Applicable Not Applicable 3. Class of Goods Manufactured Auto Parts Auto Parts 14. Value of imports calculated on CIF basis by the company during the year in respect of: (Amount in Rs.) S.No. Particulars Year Ended Year Ended Raw Material and Component 2,345,030 6,986, Purchase of Finished Goods 666, Capital Goods and Accessories 8,107,220 - Total 11,119,027 6,986, Payment To Auditors: (Amount in Rs.) S.No. Particulars Year Ended Year Ended For Audit, Tax Audit & VAT Audit Fees 300, , For Other Services 40,500 40,000 Total 340, ,000 41

44 16. Directors Remuneration : (Amount in Rs.) S.No. Particulars Year Ended Year Ended Mrs. Usha Jain, Managing Director 1. Remuneration 880, , Provident Fund Contribution 105, , Commission to Managing Director (*) Nil 900, Others 49, Total 1,035,369 1,975,966 (*) Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956 for calculation of Commission to Managing Director :- Year ended Year ended Particulars Net Profit as per Profit & Loss Account (before taxation) 5,539,624 43,502,428 Add:- Managerial Remuneration 1,035,369 1,975,966 Directors Sitting Fees 64,500 54,500 Depreciation 20,344,632 20,996,918 Loss / (Profit) on Sale of Fixed Assets 63,314 (159,300) Total 27,047,439 66,261,512 Less:- Depreciation as per Section 350 of the Companies Act, ,344,632 20,996,918 Net Profit for Calculation of Commission 6,702,807 45,264,594 3% (Last year 2%) of Net Profit 201, ,293 Maximum Remuneration Payable (including 5% of Net Profit 335,140 2,263,230 Less - Actual Remuneration Paid* 1,035,369 1,075,966 Maximum Remuneration allowed Nil 1,187,264 Managerial Commission Provided in Profit & Loss Account Nil 900,000 * As prescribed under Schedule XIII of the Companies Act, Related Party Disclosures: The information about transactions with the related parties is attached herewith - As per Annexure "C". 18. Earnings Per Share: Particulars Year ended Year ended Profit After Tax as per Profit & Loss Account 5,716,624 27,692,216 Weighted Average No. of Equity Shares (Face Value Rs.10/- each) For Basic Earnings Per Share 11,631,541 11,631,541 For Diluted Earnings Per Share 11,631,541 11,631,541 Earnings Per Share:- (Amount in Rs.) Basic Diluted

45 Lumax Auto Technologies Ltd. 19. Earning / Outgo In Foreign Currency: (Amount in Rs.) Particulars Year ended Year ended Payment in Foreign Currency Travelling Foreign 581, ,985 Commission to Agents 497,862 11,327 Royalty 51,602 Nil Total 1,130, ,312 Earning in Foreign Currency 21,472,861 24,381, The total expenditure incurred on Research and Development: (Amount in Rs.) Nature of Expenses Year ended Year ended Expenditure charged to Profit and Loss Account 232, ,102 Expenditure capitalised during the year 4,417,930 3,928, Previous year's figures have been regrouped or rearranged wherever necessary to make them comparable with the current year's figures. As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Ashish Dubey Milita Bhar Date : June 30, 2009 Head Finance Company Secretary 43

46 (i) Particulars pertaining to Finished Goods As per Annexure A FOR THE YEAR ENDED S. No. Class of Goods / Opening Stock Production / Purchase Turnover Closing Stock Manufactured/ Purchased Qty Value Qty Value Qty Value Qty Value (Nos.) (Nos.) (Nos.) (Nos.) 1 Head Lamp Assembly - - 1,320, ,867,886 1,320, ,867, (-) (-) (931,159) (70,094,097) (931,159) (70,094,097) (-) (-) 2 Tail Lamp Assembly , ,687 15, , (-) (-) (51,268) (4,604,634) (51,268) (4,604,634) (-) (-) 3 Silencer Assembly ,926 20,352,724 18,926 20,352, (-) (-) (28,108) (24,451,082) (28,108) (24,451,082) (-) (-) 4 Frame / Chassis , ,649, , ,649, (-) (-) (431,952) (342,577,791) (431,952) (342,577,791) (-) (-) 5 Frame Assembly (-) (-) (65,955) (226,639,308) (65,955) (226,639,308) (-) (-) 6 Wind Shield CT-100/ Platina ,334 14,662, ,334 14,662, (-) (-) (569,726) (23,893,022) (569,726) (23,893,022) (-) (-) 7 Others - 297,107, ,107,225 - (-) (387,515,793) (387,515,793) (-) Total - 792,630, ,630,021 - (-) (1,079,775,727) (1,079,775,727) (-) Note: It is not practical to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total. (ii) Particulars in respect of Traded Goods FOR THE YEAR ENDED S. NO. OPENING STOCK PURCHASE TURNOVER CLOSING STOCK NAME OF THE ITEM Qty. Value Qty. Value Qty. Value Qty. Value (Nos.) (Nos.) (Nos.) (Nos.) 1. Head Lamp Assembly 46,666 7,679,866 2,273, ,490,989 2,248, ,153,583 71,188 7,679,866 (61,966) (9,910,762) (2,178,269) (314,759,439) (2,193,569) (359,295,574) (46,666) (7,679,866) 2. Tail Lamp Assembly/Rear Lamp 27,130 4,345, , ,244, , ,559,972 34,792 4,345,860 (30,129) (5,421,279) (456,318) (90,542,713) (459,317) (108,710,603) (27,130) (4,345,860) 3. Others 39,834, ,642, ,299,139 48,719,584 (13,995,586) (279,551,563) (224,144,248) (39,834,555) Total 51,860, ,378, ,012,694 60,745,310 (29,327,627) (684,853,715) (692,150,425) (51,860,281) 44

47 Lumax Auto Technologies Ltd. B) Details for Consumption of Raw Material As per Annexure B S. No. Name of the item Year ended Year ended Qty. Amount Qty. Amount 1. Steel Sheet Kgs. 111,325, Kgs 18,768, Steel Tube Mtrs. 18,335, Mtrs. 2,625, Steel Tube Nos. 85,970, Nos. 196,949, Plastic Powder Kgs. 28,441, Kgs. 32,404, Others 238,645, ,133,547 Total 482,718, ,881,274 Value and percentage of Raw Materials and Stores Consumed : S. No. 1. Particulars Indigenous Raw Material Consumable Stores % Value % Value (99.07) 480,782,037 (724,111,436) 100 (100) 36,936,939 (35,437,099) 2. Imported 0.40 (0.93) 1,936,400 (6,769,838) Nil (Nil) Total 100 (100) 482,718,437 (730,881,274) 100 (100) 36,936,939 (35,437,099) Details in accordance with Accounting Standard-18 "RELATED PARTY DISCLOSURE" AS PER ANNEXURE- C (i) (A) Subsidiary: (B) Related Parties: (a) Lumax DK Auto Industries Ltd. (a) Lumax Industries Ltd. (b) Sheela Finance Pvt. Ltd. (c) Deepak Auto Pvt. Ltd. (C) Key Management Personnel: (d) Lumax Automotive System Ltd. (a) Mr. D.K. Jain (e) Lumax Filter Pvt. Ltd. (b) Mrs. Usha Jain (f) Mr. Deepak Jain (c) Mr. Anmol Jain (g) Lumax Investment and Finance Pvt. Ltd. (h) Lumax International Pvt. Ltd. (i) Bharat Enterprises (j) D. K. Jain & Sons (HUF) (k) Mr. S. C. Jain (l) Lumax Tours & Travels Ltd. 45

48 (ii) Disclosure of transactions between the company and related parties and status of outstanding as on March 31, 2009 (Amount in Rs.) S. No. Particulars Key Management Subsidiary Related parties Personnel A. Transaction: PURCHASES (i) Components/Finished Goods Purchased 5,320, ,852,582 - (752,945) (356,110,663) (-) (ii) Other Raw Material Purchased & General Store - 54,447 - (-) (339,889) (-) (iii) Assets Purchased - 655,151 - (-) (161,862) (-) (iv) Job Work/Others - 4,756,934 - (-) (-) (-) SALES (v) Components/Finished Goods Sold 6,070,191 46,618,134 - (60,947) (24,172,181) (-) (vi) Other Raw Material Sold - 704,108 - (90,579) (37,533) (-) (vii) Assets Sold (-) (110,291) (-) (viii) Job Work/Others - 973,028 - (-) (782,244) (-) OTHER PAYMENTS (ix) Dividend Paid - 4,667,960 5,667,539 (-) (4,667,960) (5,667,539) (x) Interest on Unsecured Loan - 497,137 - (-) (690,247) (575,342) (xi) Managerial Remuneration ,000 (-) (-) (960,000) (xii) Provident Fund ,600 (-) (-) (115,200) (xiii) Commission Paid (-) (-) (900,000) (xiv) Other ,769 (-) (-) (97,717) (xv) Lease Rent - 924,000 - (-) (744,000) (-) (xvi) Unsecured Loan (-) (6,000,000) (-) B. Balances with Related Parties at the Year End (i) Unsecured Loan Payable (-) (10,300,372) (-) (ii) Other Current Assets 1,570 2,976,786 - (7,199) (18,757,864) (-) (iii) Advance to Subsidiary Company 103,359, (108,559,887) (-) (-) (iv) Other Current Liabilities 2,789,911 78,547,599 - (400,462) (133,312,881) (-) 46

49 Lumax Auto Technologies Ltd. LUMAX AUTO TECHNOLOGIES LTD. BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE I REGISTRATION DETAILS Registration No. : L31909MH1981PLC Balance Sheet Date : State Code : 25 II CAPITAL RAISED DURING Public Issue : - Rights Issue : - THE YEAR Bonus Issue : - Private Placement : - (Amount in Rs. Thousands) III POSITION OF MOBILIZATION Total Liabilities : 544,050 Total Assets : 544,050 AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands) Sources of Funds Paid up Capital Secured Loans Deferred Tax Liability : 116,315 Reserves & Surplus : 252,222 : 140,605 Unsecured Loans : 12,890 : 22,018 Application of Funds Net Fixed Assets Net Current Assets Accumulated Losses : 354,604 Investments : 39,195 : 150,251 Misc. Expenditure : - : - Deferred Tax Asset : - IV PERFORMANCE OF COMPANY Turnover : 1,612,643 Total Expenditure : 1,607,103 (Amount in Rs. Thousands) Profit/(Loss) Before Tax : 5,540 Profit/(Loss) after Tax : 5,717 Earning per share in Rs. : 0.49 Dividend rate % : V GENERIC NAMES OF THREE Items Code No. (ITC Code) : PRINCIPAL PRODUCTS / Product Description : SERVICES OF COMPANY Items Code No. (ITC Code) : (As per Monetary Terms) Product Description : Items Code No. (ITC Code) : Product Description : 8512 HEAD LAMP TAIL LAMP BLINKERS 8714 PARTS AND ACCESSORIES OF MOTOR VEHICLES 8708 SILENCERS AND EXHAUST PIPE For D. R. Barve & Company For and on behalf of the Board of Lumax Auto Technologies Ltd. CA D.R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Date : June 30, 2009 Ashish Dubey Milita Bhar Place : Gurgaon Head Finance Company Secretary 47

50 Statement pursuant to Section 212 of the Companies Act, 1956 relating to Subsidiaries S. No. Name of Subsidiary (1) (2) 1 Financial Year of the subsidiary Lumax DK Auto Industries Limited (3) Share of the subsidiary held by the company on the above date: (a) Number and face value (b) Extent of holding 4,240,343 Equity Shares of Rs. 10/- each fully paid up 100% 3 Net aggregate amount of profits/(losses) of the subsidiary for the above financial year of the subsidiary not dealt with in the company's accounts: (a) for the financial year of the subsidiary - Profit/(Loss) Rs. 108,243,794 (b) for the previous financial years since it become a subsidiary - Profit/(Loss) Rs. 136,764,600 4 Net aggregate amount of profits/(losses) of the subsidiary dealt with in the company's accounts: (a) for the financial year of the subsidiary - Profit/(Loss) Nil (b) for the previous financial years since it become a subsidiary - Profit/(Loss) Nil For D. R. Barve & Company For and on behalf of the Board of Lumax Auto Technologies Ltd. CA D.R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Date : June 30, 2009 Ashish Dubey Milita Bhar Place : Gurgaon Head Finance Company Secretary 48

51 Lumax Auto Technologies Ltd. LUMAX DK AUTO INDUSTRIES LIMITED Regd. Office : B-86, Mayapuri Industrial Area, Phase-I, New Delhi DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the Twelfth Annual Report together with Audited Balance Sheet and Profit & Loss Account for the year ended (Rs. in lacs) FINANCIAL RESULTS Sales (Net of Excise) Gross Profit (-) Interest (-) Depreciation Profit before Taxation(PBT) (-) Provision for Income Tax,Deferred tax and FBT Profit after Tax(PAT) (+) Balance in P& L A/c b/f Profit available for Appropriation Proposed Dividend - - Tax on Proposed Dividend - - Balance retained in P&L A/c OPERATIONS Your Directors are pleased to report the remarkable results for the year ended March 31, For the Financial Year your Company has achieved net sales revenue of Rs.13, lacs as against Rs.11, lacs in the previous year showing an impressive growth of %. The Profit after Tax has also increased from Rs lacs to Rs.1, lacs in the Current Financial Year registering remarkable growth of % over the previous year. During the year R & D unit at Manaser for Gear Shifter has got recognition of In-house R & D from Department of Science & Industrial Research, Ministry of Science & Technology, Government of India. In the very first year, the unit has got an excellence award in Design & Development from M/s Maruti Suzuki India Limited. The Directors are confident that In-house R & D will enhance the capability of Company to secure more business in future. DIVIDEND In order to augment resources for future expansion plans, your Directors do not recommend any dividend for the year. DIRECTORS Mr Deepak Jain retires by rotatation at the ensuing Annual General Meeting pursuant to the provisions of the Companies Act, 1956 and Articles of Association of the Company, and being, eligible, has offered himself for re-appointment. The term of Mrs. Shivani Jain as Executive Director is expiring on August 1, 2009, accordingly the Board of Directors at their meeting held on June 30, 2009 has reappointed Mrs. Shivani Jain as Executive Director of the Company for a further period of 3 years commencing from August 1, 2009 subject to the approval of members in the ensuing Annual General Meeting. AUDITORS J.C. Bhalla & Co., Chartered Accountants retire as Auditors at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment at a remuneration to be fixed by the Board. The Auditors have not made any adverse remark in their report except about slight delay in remitting some statutory dues in few cases, which have since been paid. DEPOSITS The Company has not accepted any Fixed Deposit during the year. Also there are no Fixed Deposits outstanding at the year end. 49

52 EMPLOYEES No employee of the Company is covered under the provisions of Section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules,1975. OTHER INFORMATION ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars relating to Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo as required under Section 217(1) (e) of the Companies Act, 1956 are annexed as part of the report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000 the Directors confirm: (i) (ii) that in the preparation of the annual accounts, the applicable accounting standard had been followed along with proper explanation relating to material departures; that the Directors had 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 financial year and of profit or loss of the Company for that period ; (iii) that the Directors had 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; (iv) that the Directors had prepared the annual accounts on going concern basis. ACKNOWLEDGEMENT Your Directors place on record their appreciation for the assistance and support extended by Holding Company, Government Authorities, Bankers, Customers and Vendors. Your Directors also place on record their appreciation for the efficient and loyal services rendered by the employees at all levels to the Company. For and on behalf of the Board Place : Gurgaon D.K. Jain Date : June 30, 2009 CHAIRMAN 50

53 Lumax Auto Technologies Ltd. ANNEXURE TO THE DIRECTORS' REPORT A Conservation of Energy: Though the Company does not come under the category of power intensive unit, adequate measures have been taken for the energy conservation and thereby to reduce energy cost. (a) Energy Conservation Measures Taken and their impact : During the year under review the Company has taken following measures to conserve the energy 1) CFL TUBE introduced in lighting : The Company has introduced energy efficient CFL tubes. Initially, the existing metal Halide Tubes of 250 Watt are replaced with CFL Tubes of 65 Watt. The reduction in Watt from 250 to 65 watt has reduced the energy consumption. 2) Auto Capacitor Panel introduced for maintaining the Power Factor : The Company has introduced Auto capacitor Panel on all the Units of the Company to maintain the Power Factor with in the preseribed limits. This has resulted in saving of extra charges to be paid/levied to/by the Electricity Department, if the Power Factor within the prescribed limit. (b) Additional Investments and Proposals being implemented for reduction of Consumption of Energy : NIL (c) Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of Goods : It is difficult to quantify the impact of individual energy reduction measures on the Cost of Production of Goods. The above measures of energy reduction will reduce over all cost of energy. (d) Total Energy Consumption and Energy Consumption per unit of production : Since the above is not applicable to Auto Components Sector, Form A is not furnished. B Research & Development. 1 Specific Areas in which R& D is carried out by the Company Self sufficiency in Design & Development activities Continuous improvement has been widely implemented in the plant by process reengineering, KIZANS. 2 Benefits derived as a result of the above R& D Increase in productivity, improved customer satisfaction and enhanced quality 3 Future Plan of Action To continue development of new range of products 4 Expenditure on R & D (Amount in Rs.) A Capital 5,317,770 B Recurring 5,757,376 C Total 11,075,146 D Total R& D expenditure percentage to turnover(%) 0.82 C Technology Absorption, Adoption and Innovation 1 Efforts in brief made towards technology absorption, adaptation and innovation Continuous efforts are made to secure and utilize the latest available technology, to keep pace with the latest manufacturing trends, keeping in mind the quality, cost reduction and capacity utilization 51

54 2 Benefits derived as a result of the above efforts, e.g product improvement, cost reduction, product development, import substitution etc. The Company has been able to achieve superior quality production as per the Customer's satisfaction. 3 Technology imported during last five years Technology imported Year of Import Has technology been fully absorbed Benefit derived Gear Shifter Assembly 2004 Yes Best products to Customers D Foreign Exchange Earnings & Outgo Particulars (Rs) (Rs) Earnings: Export of Goods 193,053 Nil Outgo: Travelling Expenses 248, ,830 Import of Capital Goods 16,760,198 14,140,635 Import of Raw Material 93,941,484 34,144,628 Royalty 3,578,465 2,059,272 Others - 356,001 52

55 Lumax Auto Technologies Ltd. Auditors' Report The Members of Lumax DK Auto Industries Limited We have audited the attached Balance Sheet of Lumax DK Auto Industries Limited as at 31st March, 2009 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. year ended on that date; and iii) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date. Place: Gurgaon Date: 30th June, 2009 Rajesh Sethi Partner Membership No For and on behalf of J.C. Bhalla & Co. Chartered Accountants Annexure to the Auditors' Report on the accounts of Lumax DK Auto Industries Limited for the year ended 31st March 2009 as referred to in our report of even date. (i) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. As required by the Companies (Auditor's Report) Order, 2003 issued (b) The Fixed Assets have been physically verified by the by the Central Government in terms of Section 227(4A) of the management at the year-end. We are informed that no material Companies Act, 1956, and on the basis of such checks as we discrepancies have been noticed by the management on such considered appropriate and according to the information and verification as compared with the record of fixed assets explanations given to us, we enclose in the Annexure a statement on maintained by the Company. the matters specified in paragraph 4 and 5 of the said order to the extent applicable. (c) The Company has not disposed off substantial part of Fixed Assets during the year. Further to our comments in the Annexure referred to in paragraph above, we report that; (ii) (a) The inventory (excluding stock lying with third parties which has been substantially confirmed by them) has been physically a) We have obtained all the information and explanations, which to verified by the management at reasonable intervals. the best of our knowledge and belief were necessary for the (b) In our opinion, the procedures of physical verification of purpose of our audit. inventory followed by the management were adequate in b) relation to the size of the Company and the nature of its In our opinion, proper books of account, as required by law, have business. been kept by the Company, so far as appears from our examination of the books. (c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as c) The Balance Sheet, Profit & Loss Account and Cash Flow compared to book records were not material and have been Statement dealt with by this report are in agreement with the books of account. properly dealt with in the books of account. (iii) (a) According to the information and explanations given to us, the d) The Balance Sheet, Profit & Loss Account and Cash Flow Company has not granted any loans, secured or unsecured to Statement are in compliance with the mandatory Accounting any Company, firms or other parties covered in the register Standards referred to in section 211 (3C) of the Companies Act, maintained under section 301 of the Companies Act, to the extent applicable. (b) As the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the e) On the basis of written representations received from Directors, register maintained under section 301 of the Companies Act, we report that none of the directors is disqualified as on March 1956, the provisions of para 4 (iii)(b), (iii)(c) and (iii)(d) of the 31, 2009 from being appointed as a director under clause (g) of Order are not applicable to the Company. sub-section (1) of section 274 of the Companies Act, f) In our opinion and to the best of our information and according to (c) According to the information and explanations given to us, the Company has taken an unsecured loan from a Company the explanations given to us, the said financial statements covered in the register maintained under Section 301 of the together with the notes thereon and attached thereto give in the Companies Act, The maximum amount involved during prescribed manner the information required by the Act and give a the year was Rs. 15 Lakhs and year-end balance of loan taken true and fair view in conformity with the accounting principles generally accepted in India: from such party was Rs. Nil. (d) In our opinion, the rate of interest and other terms and i) In the case of Balance Sheet, of the State of Affairs of the conditions of loan taken by the Company are not prima facie Company as at March 31, 2009; prejudicial to the interest of the Company. ii) In the case of Profit and Loss Account, of the Profit for the (e) The Company is regular in repayment of the principal and interest as stipulated. 53

56 (x) According to the records of the Company, the Company does (iv) In our opinion and according to the information and explanations not have accumulated losses at the end of the financial year. given to us there are adequate internal control procedures The Company has not incurred cash losses in the financial commensurate with the size of the Company and the nature of its year under report and in the immediately preceeding financial business for the purchase of inventory and fixed assets and for the year. sale of goods. The clause relating to sales of service is not applicable to the Company. Further, in our opinion, there is no continuing failure (xi) According to the information and explanations given to us, the to correct major weaknesses in internal control system. Company has not defaulted in repayment of dues to any bank. (v) (a) In our opinion and according to the information and (xii) According to the information and explanations given to us, the explanations given to us, we are of the opinion that the Company has not granted loans and advances on the basis of transactions that need to be entered in the register maintained security by way of pledge of Shares, Debentures and other under section 301 of the Companies Act, 1956 have been so Securities. entered. (xiii) In our opinion and according to the information and (b) The Company's major purchases of inventory and fixed assets explanations given to us, the provisions of any special statute and major sales of components are stated to be of applicable to Chit Fund, Nidhi, Mutual Benefit Fund, Societies proprietary/specialized nature, and hence, in such cases, the are not applicable to the Company. comparison of prices with the market rates or with purchases from/sales to other parties can not be made. (xiv) The Company is not dealing or trading in Shares, Securities, Debentures and other Investments. (vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public (xv) According to the information and explanations given to us, the during the year within the meaning of Section 58A, 58AA or any Company has not given any guarantee for loans taken by other relevant provisions of the Companies Act, 1956 and the rules others from banks or financial institutions. framed thereunder. (xvi) According to the information and explanations given to us, on (vii) The Company has an in-house internal audit system commensurate an overall basis, term loans have been applied for the purpose with its size and nature of its business.` for which they were obtained. (viii) On the basis of records produced, we are of the opinion that, prima (xvii) According to the information and explanations given to us, on facie, the cost accounting records prescribed by the Central the basis of an overall examination of the Balance Sheet of the Government under section 209(1)(d) of the Companies Act, 1956 Company, we are of the opinion that there are no funds raised have been maintained by the Company. However, we are not by the Company on short-term basis which have been used for required to and have not carried out any detailed examination of long term investment. such records. (xviii) The Company has not made any preferential allotment of (ix) (a) The Company is generally regular in depositing undisputed Shares to parties and companies covered in the register statutory dues including Provident Fund, Investor Education maintained under section 301 of the Companies Act, and Protection Fund, Employee's State Insurance, Income Tax, Sales-Tax, Service Tax, Custom Duty, Excise Duty, Cess (xix) The Company has not issued any Debentures during the year. and any other statutory dues with the appropriate authorities though there have been slight delays in deposit of Income tax (xx) The Company has not made any public issue during the year. (TDS) dues in a few cases. (xxi) According to the information and explanations given to us, no (b) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported undisputed amounts payable in respect of providend Fund, during the year. Investor Education and Protection Fund, Employees State insurance, Income-tax, Wealth-tax,Octroi Duty,Service Tax, Rajesh Sethi Sales-tax, Customs Duty, Excise Duty, Cess and other Partner undisputed statutory due were outstanding, at the year end, for Membership No a period of more than six months from the date they became For and on behalf of payable. Place: Gurgaon J.C. Bhalla & Co. Date: 30th June, 2009 Chartered Accountants (c) According to the information and explanations given to us, there is no case where Sales Tax, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess have not been deposited on account of dispute except as stated hereunder: Name of the Statute Employee State Insurance Corporation Employee State Insurance Corporation Nature of the Dues ESI Demand ESI Demand Amount Amount Disputed Deposited (Rs) (Rs) 102,139 51,070 Period to which it relates F.Y Forum where the dispute is pending. Additional Session Judge Gurgaon 90,247 45,123 F.Y Court of Civil Judge Senior Division Cum Designated ESI Court 54

57 Lumax Auto Technologies Ltd. LUMAX DK AUTO INDUSTRIES LIMITED BALANCE SHEET AS AT 31ST MARCH, 2009 Particulars Schedules As at As at SOURCES OF FUNDS Shareholders' Funds Share Capital 1 42,403,130 42,403,130 Reserves and Surplus 2 240,661, ,417,389 Loan Funds 3 Secured Loans 72,220, ,998,303 Unsecured Loans 103,358, ,052,688 Deferred Tax Liability - Net 36,322,761 29,611,092 APPLICATION OF FUNDS Fixed Assets 4 494,966, ,482,602 Gross Block 443,636, ,352,358 Less : Depreciation /Amortisation 68,013,468 46,203,144 Net Block 375,623, ,149,214 Capital Work in Progress (incl. Capital Advances) 1,921,560 2,572,258 Current Assets, Loans & Advances Inventories 5 37,983,393 35,598,185 Sundry Debtors 6 284,034, ,976,641 Cash & Bank Balances 7 4,465,008 10,954,213 Loans & Advances 8 80,049,603 59,589, ,532, ,118,549 Less: Current Liabilities & Provisions 9 Liabilities 213,190, ,152,639 Provisions 77,048,725 51,462,280 Net Current Assets 290,239, ,292, ,614,919 33,503,630 Miscellaneous Expenditure 10 1,128,750 2,257,500 (To the extent not written off or adjusted) Significant Accounting Policies & 20 Notes to Accounts 494,966, ,482,602 This is the Balance Sheet referred to in our report of even date. For and on behalf of the Board of Directors of Lumax DK Auto Industries Ltd. Rajesh Sethi Partner Membership No D.K. Jain Deepak Jain Anmol Jain Shivani Jain For and on behalf of Chairman Director Director Executive Director J.C. Bhalla & Co. Chartered Accountants Place : Gurgaon Sanjay Mehta Anil Tyagi Date : 30th June, 2009 Vice President(F) Company Secretary 55

58 LUMAX DK AUTO INDUSTRIES LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009 Particulars Schedules For the Year ended For the Year ended Rs. Rs. INCOME Gross Sales 1,459,817,435 1,269,281,429 Less : Excise Duty 110,032, ,717,165 Net Sales 1,349,784,744 1,139,564,264 Other Income 11 3,413,914 1,828,988 1,353,198,658 1,141,393,252 EXPENDITURE Purchase of Traded Goods 311,455, ,988,418 Raw Material Cost ,166, ,703,826 Manufacturing & Operating Expenses 13 61,385,631 53,105,893 Personnel Expenses 14 23,514,855 24,494,925 Administrative Expenses 15 20,474,539 14,860,487 Selling & Distribution Expenses 16 14,317,863 9,023,920 Financial Expenses 17 13,624,753 13,101,997 Depreciation 22,982,613 19,716,980 Decrease /(Increase) in Inventories 18 1,799,489 (944,924) R& D Expenses 19 5,757,376-1,195,478,472 1,004,051,522 Profit before Tax & Prior period Adjustment 157,720, ,341,730 Add /(Less) :Prior Period Adjustment 530,778 (318,332) Profit before Tax 158,250, ,023,398 Less : Tax Expenses Current Tax 42,737,300 29,273,300 Deferred Tax 6,711,669 15,916,073 Fringe Benefit Tax 605, ,740 Wealth Tax 15,450 - Tax adjustment of earlier years (net) (62,629) 50,007,170-45,656,113 Profit after Tax 108,243,794 91,367,285 Add : Balance brought forward from Previous Year 132,417,389 41,138,935 Less : Adjustment of Employee Benefit Provisions - (88,831) (Net of Tax of Rs 45,741/-) Amount Available for Appropriation 240,661, ,417,389 Earnings Per Share (Basic & Diluted) (Nominal value of shares Rs 10(Previous Year : Rs 10)) Significant Accounting Policies & Notes to Accounts 20 This is the Profit & Loss Account referred to in our report of even date. For and on behalf of the Board of Directors of Lumax DK Auto Industries Ltd. Rajesh Sethi Partner Membership No D.K. Jain Deepak Jain Anmol Jain Shivani Jain For and on behalf of Chairman Director Director Executive Director J.C. Bhalla & Co. Chartered Accountants Place : Gurgaon Sanjay Mehta Anil Tyagi Date : 30th June, 2009 Vice President(F) Company Secretary 56

59 Lumax Auto Technologies Ltd. LUMAX DK AUTO INDUSTRIES LIMITED CASH FLOW STATEMENT FOR THE PERIOD APRIL 1, 2008 TO MARCH 31, 2009 S. No Particulars Cash Flow from Operating Activities Net Profit (Loss) Before Tax (after Prior Period Items) 158,250, ,023,398 ADJUSTMENTS FOR : Depreciation charged for the year 22,982,613 19,716,980 Depreciation on R& D Assets 127,900 - Adjustment of Depreciation (860,165) - Interest Paid 13,624,753 13,101,997 Interest Income (99,218) (130,159) Rent Received (119,000) (96,000) Adjustment on Employees Retirement Benefits - (134,572) Dividend Income - - Deferred Revenue Expenditure 1,128,750 1,128,750 (Profit)/Loss on Sale of Fixed Assets 269,201 Operating Profit Before Working Capital Changes 195,305, ,610,394 ADJUSTMENTS FOR : - Inventories (2,385,208) (17,519,032) Sundry Debtors (66,057,674) (54,836,667) Loans and Advances (992,230) (2,636,493) Current Liabilities (25,961,765) 50,694,407 Provision for Leave Encashment, Gratuity and Excise Duty (201,244) 1,878,920 Cash Generated From Operations 99,707, ,191,529 Direct Taxes Paid (37,019,285) (40,689,523) Income Tax Refund for Earlier Years 43,610 - Cash Flow Before Extra-ordinary Items 62,732, ,502,006 Extra-Ordinary Item - - A NET CASH FLOW FROM OPERATING ACTIVITIES 62,732, ,502,006 CASH FLOW FROM INVESTING ACTIVITIES Dividend Income - - Interest Income 99, ,159 Rent Received 119,000 96,000 Sale/ Adjustment of Fixed Assets 8,449,695 6,665,654 Purchase of Fixed Assets (26,792,544) (85,443,173) Pre-Operative Expenses - 9,544,660 B NET CASH FLOW FROM INVESTING ACTIVITIES (18,124,631) (69,006,700) CASH FLOW FROM FINANCING ACTIVITIES Interest Paid (13,624,753) (13,101,997) Dividend Paid - - Dividend Tax Paid - - Proceeds from Long Term Borrowings Receipts - - Payments (30,440,000) (19,578,756) Proceeds from Short Term Borrowings Net movement in Cash Credit Facilities and Short Term Loans (7,031,823) 3,760,648 C NET CASH FLOW FROM FINANCING ACTIVITIES (51,096,576) (28,920,105) NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (6,489,205) 9,575,201 CASH AND CASH EQUIVALENTS (OPENING) 10,954,213 1,379,012 CASH AND CASH EQUIVALENTS (CLOSING) 4,465,008 10,954,213 NOTES: a) Cash Flow Statement has been prepared under the ' Indirect method ' as set out in Accounting Standard -3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. b) Negative figures have been shown in brackets. For and on behalf of the Board of Directors of Lumax DK Auto Industries Ltd. As per our report of even date Rajesh Sethi Partner Membership No D.K. Jain Deepak Jain Anmol Jain Shivani Jain For and on behalf of Chairman Director Director Executive Director J.C. Bhalla & Co. Chartered Accountants Place : Gurgaon Sanjay Mehta Anil Tyagi Date : 30th June, 2009 Vice President(F) Company Secretary 57

60 LUMAX DK AUTO INDUSTRIES LIMITED SCHEDULES TO THE BALANCE SHEET AS AT 31ST MARCH, 2009 Particulars As at As at Rs. Rs. SCHEDULE - 1 SHARE CAPITAL a) Authorised : 50,00,000 (Previous year 50,00,000) Equity Shares of Rs.10 /- each 50,000,000 50,000,000 50,000,000 50,000,000 b) Issued, Subscribed and Paid up : 42,40,313 (Previous Year 42,40,313) Equity Shares of Rs.10/- 42,403,130 42,403,130 each fully paid up ( - Out of the above, 8,97,625 Equity Shares allotted other than Cash - All the shares are held by the Holding Company M/s.Lumax Auto Technologies Limited) 42,403,130 42,403,130 SCHEDULE - 2 RESERVES AND SURPLUS Per last Balance sheet 132,417,389 41,138,936 Add : Profit during the year 108,243,794 91,367,285 Less : Adjustment of Employee Benefit Provisions (Net of Tax of Rs 45,741/-) - 240,661,183 88, ,417,389 Balance carried to Balance sheet 240,661, ,417,389 SCHEDULE - 3 LOAN FUNDS A) SECURED LOANS a) Vehicle Loans 395, ,343 (Secured against First Charge on Vehicles ) (Due within one year Rs.178,399 /- ( Previous year Rs 92,049/- ) b) Term Loans 54,040,000 84,480,000 (Due within one year Rs.3,0,440,000/- (Previous year Rs 30,440,000 ) (Secured by way of first charge against all movable fixed assets, equitable mortgage on Land and Building and Corporate Guarantee of Lumax Auto Technologies Ltd.) c) Working Capital 17,785,479 16,284,186 (Secured by way of first charge against current assets of the company and Corporate Guarantee of Lumax Auto Technologies Ltd.) d) Deferred Credit from SIDCUL - 2,104,774 (Against allotment of Land) 72,220, ,998,303 B) UNSECURED LOANS a) From Sheela Finance (P) Ltd. - 1,500,000 b) From Lumax Auto Technologies Ltd (Holding Company) 103,358, ,552, ,358, ,052,688 58

61 Lumax Auto Technologies Ltd. LUMAX DK AUTO INDUSTRIES LIMITED SCHEDULE - 4 FIXED ASSETS PARTICULARS TANGIBLE GROSS BLOCK DEPRECIATION As at Additions Sales/ As at Upto Adjustments Adjustments To NET BLOCK (Amount in Rs) Upto Value as at Value as at Free Hold Land 16,306,514 - (2,376,000) (Note1) 13,930, Lease Hold Land 19,200, ,200, , ,334 19,394 Buildings 105,261,263 3,402, ,663,839 4,951,443 4,141,372 - Plant & Machinery 265,042,842 14,848,945 (5,823,695) (Note2) 274,068,092 32,368,653 16,093,522 (250,424) Furniture & Fixtures 3,878, ,106-4,196, , ,821 - Office Equipments 2,660, ,314-3,510, , ,023 - Vehicles 1,953,377 2,438,101 (959,225) 3,432, , ,136 (440,024) Computers 5,423, ,430-5,690,644 2,689, ,128 (629,135) - 13,930,514 16,306, ,668 18,773,417 19,006,145 9,092,815 99,571, ,309,820 48,211, ,856, ,708,022 1,046,306 3,150,267 3,042, ,174 2,676,353 1,968, ,661 2,913,592 1,295,828 2,781,677 2,908,967 2,733,530 INTANGIBLE Technical Know How Fee 5,626, ,626,383 3,848,239 1,125,277-4,973, ,867 1,778,144 Total (A) 425,352,358 22,125,472 (9,158,920) 438,318,910 46,203,144 22,982,613 (1,300,189) 67,885, ,433, ,149,214 R& D Assets TANGIBLE Plant & Machinery - 3,059,986-3,059,986-72,243 - Furniture & Fixtures - 120, ,947 2,474 - Office Equipments - 252, , Vehicles - 557, ,779 31,793 - Computers - 287, ,422 20,508-72,243 2,987,743-2, , ,363-31, ,986-20, ,914 - INTANGIBLE Computer Software - 1,038,960 1,038, ,038,391 - Total (B) - 5,317, ,317, ,900 - Total (A+B) 425,352,358 27,443,242 (9,158,920) 443,636,680 46,203,144 23,110,513 (1,300,189) 127,900 5,189, ,013, ,623, ,149,214 Capital Work in Progress 1,921,560 (Note3) 2,572,258 Grand Total 425,352,358 27,443,242 (9,158,920) 443,636,680 46,203,144 23,110,513 (1,300,189) 68,013, ,544, ,721,472 Previous Year 169,160, ,857,521 6,665, ,352,358 26,486,164 19,716,980 46,203, ,721,472 Note: 1) Represents subsidy on Land 2) Includes Subsidy of Rs. 31,00,000/- on Plant & Machinery and Price adjustment of Rs 27,23,695/- 3 ) Capital Work in Progress includes capital advances amounting to Rs. 11,50,000/- (Pr. Yr. Rs. 16,45,000/-). 4) Capital Work in Process includes Rs. Nil (Pr. Yr. Rs. 3,73,810/-) relating to Research & Development Assets. 59

62 LUMAX DK AUTO INDUSTRIES LIMITED SCHEDULES TO THE BALANCE SHEET AS AT 31ST MARCH, 2009 Particulars As at As at SCHEDULE - 5 INVENTORIES (As taken, valued and certified by the Management) Raw Materials 32,351,818 28,934,125 Finished Goods 1,345,875 1,454,155 Finished Goods (Trading) - 1,756,064 Work in Progress 2,557,294 2,492,439 Consumable Stores 1,325, ,659 Packing material 403, ,743 37,983,393 35,598,185 SCHEDULE - 6 SUNDRY DEBTORS (Unsecured - considered good) Debtors outstanding for more than -Six months 112,328 1,978,185 -Others 283,921, ,998, ,034, ,976,641 SCHEDULE - 7 CASH AND BANK BALANCES Cash in Hand 70, ,222 Balance with Banks - Current Accounts 4,394,088 10,812,991 4,465,008 10,954,213 SCHEDULE - 8 LOANS AND ADVANCES (Unsecured - considered good unless other-wise stated) a) Advances recoverable in cash or in kind or for value to be received 10,238,093 8,035,522 b) Security Deposits 2,257,636 3,078,586 c) Balance with Central Excise Authorities 2,222,185 2,523,980 d) Tax Paid 65,419,285 45,951,422 80,137,199 59,589,510 Less: Provision for doubtful advances (87,596) - 80,049,603 59,589,510 SCHEDULE - 9 CURRENT LIABILITIES AND PROVISIONS a) Current Liabilities Sundry Creditors - Micro,Small and Medium Enterprises Others 197,488, ,971,538 Liability for Expenses 9,789,325 8,023,121 Advance from Customers 1,929,000 - (Secured against First Charge on Tools ) Other Liabilities 3,983, ,190,874 2,157, ,152,639 b) Provisions Income Tax 72,010,600 46,429,692 Fringe Benefit Tax 1,072, ,791 Wealth Tax 15,450 - Gratuity 1,893,944 2,431,797 Earned Leave 2,056,611 1,718,408 Excise Duty on Stock of Finished Goods - 77,048,725 1,592 51,462,280 Total Current Liabilities and Provisions 290,239, ,614,919 60

63 Lumax Auto Technologies Ltd. LUMAX DK AUTO INDUSTRIES LIMITED SCHEDULES TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009 Particulars For the year ended For the year ended SCHEDULE - 10 MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Deferred Revenue Expenditure Opening Balance 2,257,500 3,386,250 Less : Written off during the year 1,128,750 1,128,750 1,128,750 2,257,500 SCHEDULE - 11 OTHER INCOME Sale of Scrap 548, ,368 Interest (TDS - Rs-Nil (Pr. Year TDS Rs. Nil)) 99, ,159 Miscellaneous Income 1,684,906 1,254,254 Cash Discount received 239,596 - Rent Received 119,000 96,000 Excess Provision Written Back 722,713 82,207 3,413,914 1,828,988 SCHEDULE - 12 RAW MATERIAL COST Raw Material Consumed Opening Stock 28,934,125 12,967,417 Add : Purchases 723,584, ,670,534 Less : Closing Stock 32,351,818 28,934, ,166, ,703,826 SCHEDULE - 13 MANUFACTURING AND OPERATING EXPENSES Wages 20,765,591 17,139,215 Light, Power and Fuel 24,243,020 23,614,580 Consumable Stores 5,953,209 5,385,936 Repairs to Machinery 2,016, ,395 Job Work Charges 5,921,817 4,756,890 Testing fee 53, ,452 Freight Inward 2,434,265 1,501,263 Excise Duty on Finished Goods (1,592) (358,838) 61,385,631 53,105,893 SCHEDULE - 14 PERSONNEL EXPENSES Salaries and Allowances 18,059,746 19,680,044 Contribution to ESI and PF 1,734,745 1,746,059 Staff Welfare 3,720,364 3,068,822 23,514,855 24,494,925 SCHEDULE - 15 ADMINISTRATIVE EXPENSES Travelling and Conveyance 1,564,601 1,570,603 Postage and Telephones 888, ,428 Legal and Consultancy 951,118 1,356,329 Printing and Stationery 802, ,858 Rent 185, ,625 Rates and Taxes 619, ,237 General Repairs and Maintenance 1,540,263 2,175,036 61

64 LUMAX DK AUTO INDUSTRIES LIMITED SCHEDULES TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009 Particulars For the year ended For the year ended Building Repairs and Maintenance 1,842,975 1,627,045 Security Expenses 1,950,402 1,638,935 Insurance 589, ,942 Deferred Revenue Exp. Written off 1,128,750 1,128,750 Vehicle Maintenance 1,069, ,084 Loss on Sale of Assets 269,201 - Royalty 3,578,465 2,059,272 Donation 6,130 28,084 Provision for Excise duty Expenses 87,596 - Amount Written off (net) 46, ,850 Miscellaneous Expenses 1,411,152 1,236,959 Foreign Exchange Difference 1,943,640 (2,000,550) SCHEDULE ,474,539 14,860,487 SELLING AND DISTRIBUTION EXPENSES Packing and Forwarding 5,784,496 4,069,881 Rebate and Discounts 2,391,937 1,864,348 Packing Material Consumed 6,141,430 3,089,691 14,317,863 9,023,920 SCHEDULE - 17 FINANCE EXPENSES Interest on - Term Loan 9,603,789 9,242,730 Working capital 2,941,452 2,642,817 ICD 174, ,413 Others 149, ,532 Bank Charges 756, ,505 13,624,753 13,101,997 SCHEDULE - 18 INCREASE IN INVENTORIES a) Closing Stock : Finished Goods 1,345,875 3,210,219 Work in Progress 2,557,294 3,903,169 2,492,439 5,702,658 b) Opening Stock : Finished Goods 3,210,219 4,447,006 Work in Progress 2,492,439 5,702, ,728 4,757,734 Net Increase /(Decrease) (1,799,489) 944,924 SCHEDULE - 19 R& D EXPENSES Salaries and Allowances 3,702,063 - Contribution to PF 186,471 - Staff Welfare 3,835 - Gratuity Expenses 184,860 - Earned Leave Expenses 170,294 - Medical Reimbursement 102,408 - Leave Travel Allowance 102,404 - Postage and Telephones 71,342 - Travelling and Conveyance 512,545 - Vehicle Maintenance 158,947 - Prototype -(Raw Material) 152,676 - Books and Periodicals 8,585-62

65 Lumax Auto Technologies Ltd. Repair and Maintenance 242,618 - Repair to Machinery 14,495 - Electricity charges 8,282 - Consumable Stores 5,218 - Freight and Cartage 1,200 - Printing and Stationery 1,233 - Depreciation 127,900-5,757,376-63

66 LUMAX DK AUTO INDUSTRIES LIMITED SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS A. SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared under the historical cost convention on accrual basis of accounting in accordance with the Generally Accepted Accounting Principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. 2. REVENUE RECOGNITION Sale of goods is recognised at the point of dispatch of finished goods to customers. Sales are inclusive of Excise Duty and exclusive of Sales Tax. 3. FIXED ASSETS AND DEPRECIATION i) Fixed Assets are stated at cost of acquisition (Net of Cenvat) less accumulated depreciation and subsequent improvements thereto including expenses relating to acquisition and installation. Pre-operative expenses incurred during the construction, trial and stabilisation period including interest on borrowing related to acquisition of fixed assets are capitalised up to the period such assets are put to commercial use. ii) iii) Depreciation has been provided on straight-line basis in accordance with and at the rates prescribed in Schedule XIV to the Companies Act, 1956 read with the relevant circulars issued by the Department of Company Affairs from time to time on all the assets except Intangible Asset on which depreciation has been provided on straight-line Method to write off the cost of the Asset over its estimated useful life. Depreciation on Assets whose actual cost does not exceed Rs.5, 000/- is provided at the rate of 100%. Cost of Leasehold land is amortized over the period of lease. 4. INTANGIBLE ASSETS Intangible assets comprising of technical know how & computer software are amortized over a period of their estimated useful life of five years. 5. VALUATION OF INVENTORIES i) Raw Material, Packing Material & Consumable Stores At cost on FIFO basis or net realisable value whichever is lower. ii) Work in Progress At cost or net realisable value whichever is lower. iii) Finished Goods At cost or net realisable value whichever is lower. iv) Scrap At estimated realisable value. v) Trading At cost or net realisable value whichever is lower. Cost Includes Excise Duty in respect of Finished Goods. 6. TRANSACTIONS IN FOREIGN CURRENCIES (i) (ii) (iii) Transactions denominated in foreign currencies are recorded at exchange rate prevailing at the date of transaction. Foreign currency monetary items (including forward contracts) are translated at year end rates. Exchange differences arising on settlement of transactions and translation of monetary items (including forward contracts) are recognized as income or expense in the year in which they arise. The premium or discount arising at the inception of a forward contract, which is not intended for trading purpose, is amortized as expense or income over the life of the contract. 7. DEFERRED REVENUE EXPENDITURE Expenditure incurred on know how for modification of existing products along with any future expenditure is appropriately amortized on the commencement of commercial production of the modified products as the benefit of expenditure is expected in future years. 64

67 Lumax Auto Technologies Ltd. 8. EMPLOYEE BENEFITS (a) Short Term Employee Benefits: Short term employee benefits are recognized in the period during which the services have been rendered. (b) Long Term Employee Benefits: (i) Defined Contribution plan Provident Fund and Employees' State Insurance Schemes All employees of the Company are entitled to receive benefits under the Provident Fund, which is a defined contribution plan. Both the employees and the employer make monthly contributions to the plan at a predetermined rate (presently 12%) of the employees' basic salary and dearness allowance. These contributions are made to the fund administered and managed by the Government of India. In addition, some employees of the Company are covered under the Employees' State Insurance Scheme, which are also defined contribution scheme recognized and administered by the Government of India. The Company's contributions to both these schemes are expensed in the Profit and Loss Account. The Company has no further obligations under these plans beyond its monthly contributions. (ii) Defined benefit plan Leave Encashment Liability on account of unavailed earned leave at the year end is provided as per the actuarial valuation according to Projected Unit Credit Method. Gratuity Liability on account of gratuity at the year end is provided as per the actuarial valuation according to the Projected Unit Credit Method. (iii) Actuarial gains and losses are recognized as and when incurred. 9. BORROWING COST Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as part of the cost of such Assets. A qualifying Asset is an Asset that necessarily requires substantial period of time to get ready for its intended use. All other borrowing cost is recognized as expenses in the period in which they are incurred. 10. DEFERRED TAX Tax expense comprises both current and deferred tax. Current Tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing difference between taxable income and accounting income that are capable of reversal in one or more subsequent period and are measured using tax rate enacted or substantively enacted as at the balance sheet date. Deferred Tax assets are not recognized unless, in the management judgment, there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax is reviewed at each balance sheet date. 11. SEGMENT REPORTING The Company operates in two primary business segments viz. Automotive Parts, and Trading of Motor Adjusters. 12. EARNINGS PER SHARE Basic Earnings per equity share is computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The Diluted Earnings per share is calculated on the same basis as Basic Earnings per share, after adjusting for the effect of potential dilutive equity shares. 13. PRE-OPERATIVE EXPENDITURE The expenditure incurred by the Company from the date of setting up of a new unit, upto the date of commencement of commercial production of the unit is treated as Pre operative expenditure to be capitalized as a part of the indirect cost of construction. The amount of such expenditure is to be apportioned over the individual assets in an equitable manner. The amount not directly attributable to fixed assets are charged to the Profit and Loss account in the year in which such expenditure is incurred. 14. PROVISIONS Provisions are recognized when the Company has a present obligation as a result of past events and it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. 65

68 15. IMPAIRMENT OF ASSETS An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. 16. RESEARCH & DEVELOPMENT Revenue Expenditure on Research & Development is charged under respective heads of account. Capital Expenditure on Research and Development is included as part of fixed assets and depreciated on the same as other fixed assets. B NOTES TO ACCOUNTS 1. Contingent Liabilities: E.S.I Demand - Rs. 192,386/- (Rs. 147,262/-) 2. Capital Commitments (net of advances) - Rs. 1,150,000/- (Rs. 1,110,612/-) 3. The value of stock of finished goods lying at the year-end includes excise duty amounting to Rs. NIL /- (Rs. 1,592/-). This has no effect on the profit for the year. 4. Balances under the heads Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation. 5. The Company has sent letters for the identification of suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, On the basis of disclosure received no supplier falls under the said Act. 6. In the opinion of Directors, Current Assets, Loans and Advances, if realised in the ordinary course of business, have the value at which they are stated in the Balance Sheet. 7. Segment Reporting Information about Business Segment- Primary The company has considered business segment as the primary segment for disclosure. The products included in each of the reported business segments are as follows: Automotive Parts include Gear Shifter Assembly, Parking Brake, Automotive Lights and Plastic Mouldings. Trading Activities include Motor adjusters. The above business segments have been identified considering: a) the nature of products and services b) the differing risks and returns c) the organization structure, and d) the internal financial reporting systems. 66

69 Lumax Auto Technologies Ltd. S. No. (Amount in Rs.) Reportable Segments Automotive Parts Trading Consolidated 1. Segment Revenue a) External Revenue 968,253, ,945,188 1,353,198,658 (693,812,147 ) (447,581,105 ) (1,141,393,252) b) Inter Segment Revenue (-) (-) (-) c) Total Revenue 968,253, ,945,188 1,353,198,658 (693,812,147) (447,581,105 ) (1,141,393,252) 2. Segment Results 102,756,201 69,119, ,875,717 (Profit/Loss) (71,608,071) (78,517,324) (150,125,395 ) Unallocated Expenses 13,624,753 (13,101,997 ) Profit Before Tax 158,250,964 (137,023,398 ) Income Tax 42,737,300 (29,273,300 ) Previous Year Tax (62,629) Adjustment (-) Fringe Benefit Tax 605,380 (466,740 ) Deferred Tax Liability 6,711,669 (15,916,073) Wealth Tax (-) Profit after tax 108,243,794 (91,367,285) 3. Other Information 665,415, ,196, ,612,083 Segment Assets (577,063,270 ) (117,822,538) (694,885,808 ) Un-allocable Assets - - 4,465,008 (-) (-) (10,954,213 ) Total Assets 665,415, ,196, ,077,091 (577,063,270 ) (117,822,538) (705,840,021 ) Segment Liabilities 436,493,385 65,648, ,141,528 (457,259,857) (76,017,145) (533,277,002 ) Un-allocable Liabilities (-) (-) (-) Total Liabilities 436,493,385 65,648, ,141,528 (457,259,857 ) (76,017,145 ) (533,277,002 ) Capital Expenditure 27,443,242-27,443,242 (262,857,521) (-) (262,857,521 ) Capital Expenditure 1,921,560-1,921,560 (Including CWIP & Pre- (2,572,258) (-) (2,572,258) Operative Expenses) Depreciation 22,982,613-22,982,613 (19,716,980) (-) (19,716,980) Non-cash expenses 1,128,750-1,128,750 other than depreciation (1,128,750) (-) (1,128,750) 67

70 Notes:- 1. Segment results represent Profit / (loss) before Tax. 2. Capital Expenditure pertains to gross additions made to fixed assets during the year. Capital Expenditure (WIP) pertains to Capital expenditure on expansion project at Manesar. 3. Segment Assets include Fixed Assets, Capital WIP, Pre-Operative Expenses, Current Assets & Loans and Advances. 4. Segment Liabilities includes Current Liabilities, Provisions, Secured and Unsecured Loans and deferred tax liability. 5. The accounting policies used to derive reportable segment results are consistent with those described in the "Significant Accounting Policies" in schedule to the financial statements. Information about Geographical Segment- The Company's operations are restricted to India and it has nominal exports. Therefore, the Disclosure requirement for Geographical Segment as required by AS-17 is not applicable. 8. Employee Benefits (a) During the year, the Company has recognized the following amounts in the Profit and Loss Account: Defined Contribution Plans Particulars Year Ended Year Ended Employer s Contribution to Provident Fund* 1,567,200 1,422,259 Employer s Contribution to Employee State Insurance* 347, ,800 * included in Personnel Expenses (Refer Schedule 14 & 19) Defined Benefit Plans Particulars Gratuity* Year Ended Unfunded Gratuity* Year Ended Unfunded Leave* Encashment Year Ended Unfunded Leave* Encashment Year Ended Unfunded Current service cost 501,784 1,035, , ,306 Interest Cost 182, ,663 87,560 51,480 Expected Return on Plan Assets Relating to Corugated box unit which was non operational w.e.f Actuarial (gain) / loss ,253-20, 306 (12,22,022) 5,495 (528,403) (176,684) Short Term 450, ,674 Net cost (537,853) * included in Personnel Expenses (Refer Schedule 14 & 19). 1,242, ,416 1,123,082 68

71 Lumax Auto Technologies Ltd. (b) The assumptions used to determine the benefit obligations are as follows: Particulars Gratuity Year Ended Gratuity Year Ended Leave Encashment Year Ended Leave Encashment Year Ended Discount Rate 7.50% 8.00% 7.50% 8.00% Expected Rate of increase in Compensation Levels Expected Rate of Return on Plan Assets Expected Average remaining working lives of employees (years) 10.00% 10.00% 10.00% 10.00% N.A. N.A. N.A. N.A (c) Reconciliation of opening and closing balances of Benefit Obligations and Plan Assets Particulars Gratuity Year Ended Unfunded Change in Projected Benefit Obligation (PBO) Projected benefit obligation at beginning of year * Gratuity Year Ended Unfunded Leave Encashment Year Ended Unfunded Leave Encashment Year Ended Unfunded 2,431,797 1,356,635 1,200, ,371 Current service cost 501,784 1,035, , ,306 Interest cost 182, ,663 87,560 51,480 Benefits paid (71695) (66,539) (55,739) Actuarial (gain) / loss (1,222,022) 5,495 (528,403) 176,684 Projected benefit obligation at year end & change in plan assets: Fair value of plan assets at year end-long Term Fair value of plan assets at year end-short Term ,605,744 1,200, , ,674 Net funded status of the plan - - 2,056,611 1,718,408 Net amount recognized 1,893,944 2,431,797 2,056,611 1,718,408 * Includes provisions related to corrugated Box unit which was non operational w.e.f ,253-20,306 69

72 9. Related Party Disclosures As per Accounting Standard (AS-18), company's related party disclosure is as under: S. No. Name of Related Party 1 Lumax Auto Technologies Limited Relationship Holding company Nature of Transaction Unsecured Loan Sale of Goods Volume of Transactions (Rs) - (68,900,000 ) 5,346,195 (1,145,066 ) Closing Balance 103,358,288 (108,552,688 ) 2,793,346 (400,148 ) (Cr.) (Cr.) (Dr.) (Dr.) Purchase of Goods Purchase of Fixed Assets(CWIP) 6,064,313 (153,327 ) - (-) - (1570 ) (Cr) Others - (5,978,350 ) - (194,400 ) (Dr.) 2 Lumax Industries Limited Enterprise Significantly influenced by Directors & their relatives Purchase of Goods Purchase of Fixed Assets 25,107,163 (60,861,324) 2,985,874 (8,455,782) 485,451 (26,819,997) (Dr.) (Cr.) Sale of Goods Sal e of Fixed Assets 578,186,173 (787,702,680) - (6,493,277) 192,493,926 (172,239,144) (Dr.) (Dr.) Rent Received Others 15,000 (42,500) 172,299 (41,820) 264,119 (84,320) (Dr.) (Dr.) 3 S L Lumax Limited Enterprise Significantly influenced by Directors & their relatives 4 Deepak Auto (Pvt.) Ltd Enterprise Significantly influenced by Directors & their relatives Sale of Goods 7,422,607 (5,466,739) Sale of Goods Purchase of Goods 4,539,964 (2,537,630) 43,953,221 (21,331,817) 9,000 (5,466,739) 502,330 (2,537,630) 9,026,485 (8,535,153) (Cr.) (Dr.) (Dr.) (Dr.) (Cr.) (Cr.) 5 Sheela Finance Pvt Limited Enterprise Significantly influenced by Directors & their relatives Unsecured Loan Interest - (-) 174,452 (180,412) - (1,500,000) - (-) (Cr.) 70

73 Lumax Auto Technologies Ltd. S. No. Name of Related Party Relationship Nature of Transaction Volume of Transactions (Rs) Closing Balance 6 Mahavir Udyog Enterprise Rent paid - - (Partnership Firm) Significantly (-) (-) influenced by Directors & Rent Received 119,114 - their relatives (96,000) (-) Sale of Goods - - (-) (-) Purchase of 559,897 9,595(Cr.) Goods (2,184,485) (5,51 7)(Dr.) 7 Lumax Tours & Enterprise Service 351, (Cr.) Travels Ltd. Significantly Received (-) (-) influenced by Directors & their relatives 8 Mrs. Shivani Jain Key Remuneration 597,300 - Management Paid (651,600) (-) Personnel During the period the company has neither made any provisions on account of doubtful debts due from related parties nor any amount is written off in respect of related parties. 10. Earnings Per Share (EPS) The numerators and denominators used to calculate Basic and Diluted Earnings per share are as under. Description Year Ended Year Ended Profit attributable to the Equity Shareholders (A) 108,243,794 91,367,285 Basic/Weighted average number of Equity shares outstanding during the year (B) 4,240,313 4,240,313 Nominal Value of Equity Shares Basic/Diluted EPS (A/B) Deferred Revenue Expenditure Expenditure amounting to Rs. 11,287,500/- incurred on know how for modification of existing products during the year ended 31st March 2001 was treated as Deferred Revenue Expenditure to be charged to Profit & Loss Account over a period of ten years. Accordingly, Rs. 1,128,750/- has been charged during the year. 71

74 12. The composition of Deferred Tax Liability (Net) at the year end is as follows: - S. No. Particulars Deferred Tax Assets i) Expenditure deferred u/s 43B of Income Tax Act a) Leave Encashment 482, ,922 b) Bonus 205, ,117 c) Provision for Gratuity 523, ,472 Total (A) 12,11,457 1,232,511 Deferred Tax Liability i) Difference between carrying amount of fixed 37,150,556 30,122,020 assets in the financial statements and Income Tax Act ii) Deferred Revenue Expenditure 383, ,324 Total (B) 37,534,218 30,889,344 Deferred Tax Liability (Net) [(B) (A)] 36,322,761 29,656,833 Less: Adjustment on account of transitional provisions of Accounting Standard 15 (Revised) - 45,741 Deferred Tax Liability (Net) 36,322,761 29,611, Legal & Consultancy includes Auditors Remuneration: S. No. Particulars Audit Fee 402, ,000 Tax Audit Fee 72,000 72,000 Tax Matters 44,000 18,000 Service Tax 58,342 60,811 Total 576, , The Company has received approval for recognition of In-House R & D unit at Plot No. 165, Sector 5, IMT Manesar, Gurgaon, Haryana during the year from DSIR, Ministry of Science & Technology, Government of India vide their letter no. F-1(27)/2008- RDI/2809 dated

75 Lumax Auto Technologies Ltd. 15. Additional information pursuant to the provisions of Part II of Schedule VI to the Companies Act, A) (i) Particulars in respect of goods manufactured: Sl No. Class of Goods manufactured (Automotive Parts) Opening Stock Sales Closing Stock Qty. (Nos. ) 1 Gear Shifter Assembly - (2,178) Value - (470,641) Qty. (Nos.) 783,652 (724,336) Value 219,650,611 (187,155,588) Qty. (Nos.) - (-) Value - (-) 2 Moulding 1,823 (66,689) 12,629 (1,444,997) 6,899,426 (5,414,529) 217,769,319 (168,097,783) - (1,823) - (12,629) 3 Parking Brake - (183) - (26,405) 251,459 (208,095) 43,023,725 (32,449,708) - - (-) (-) 4 Head Lamp Assembly & Head Lamp 1,176 (-) 916,073 (-) 356,116 (277,663) 295,544,946 (193,872,092) 1,623 (1,176) 552,989 (916,073) 5 Tail Lamp Assembly & Tail Lamp 1,888 (-) 525,453 (-) 374,911 (283,158) 129,211,567 (96,856,679) 1,700 (1,888) 400,104 (525,453) 6 Others - (-) - (-) - (-) 59,641,888 - (13,551,309) (-) 392,782 (-) Total - (-) 1,454,155 (1,942,043) - (-) 964,842,056 (691,983,159) - (-) 1,345,875 (1,454,155) A) (ii) Particulars in respect of Traded goods : Sl. No Class of Goods Opening Stock Purchase Sales Closing Stock Qty. (Nos.) Value Qty. (Nos.) Value Qty. (Nos.) Value Qty. (Nos.) Value 1 Motor Adjusters 6,400 (11,312) 1,756,064 (2,504,963) 1,726,284 (1,928,977) 311,455,004 (365,988,418) 1,732,684 (1,933, ,942,688 (447,581,105) - (6,400) - (1,756,064) 73

76 B) Particulars of Licensed and Installed Capacity and Production (As certified by the Management): (Quantity in Nos.) S. No. Class of Goods Manufactured Licensed Capacity Installed Capacity 1 Gear Shifter Assembly N A 800,000 (750,000) 2 Moulding N A 7,200,000 (7,200,000) 3 Parking Brake N A 275,000 (250,000) 4 Head Lamp Assembly & N A 1,000,000 Head Lamp (1,000,000) 5 Tail Lamp Assembly & N A 1,000,000 Tail Lamp (1,000,000) Actual Production 783,652 (722,158) 6,897,603 (5,349,663) 251,459 (207,912) 356,563 (278,839) 374,723 (285,046) C) Details of Raw Material Consumed : 74 S. No. Name of the Item Quantity 1 Housing Assembly (Nos) 226,055 (240,430) 2 Knob (Nos) 489,234 (497,966) 3 Outer Boot (Nos) 480,601 (536,732) 4 Plastic Powder (Kg) 1,549,140 (1,228,444) 5 Sheet Metal (Nos) 3,015,558 (2,938,101) 6 Rotula (Nos) 257,352 (131,002) 7 Plastic Dana (Kg) 374,813 (308,693) 8 Bulbs (Nos.) 2,338,373 (1,570,445) 9 Cowl (Nos.) 318,143 (291,673) 1 0 Fender (Nos.) 317,858 (278,347) Value 18,758,843 (16,962,216) 12,565,274 (14,281,438) 6,984,919 (6,634,334) 151,565,295 (104,431,515) 38,239,667 (32,489,182) 46,863,799 (26,855,410) 52,860,936 (45,214,176) 28,852,397 (31,283,808) 51,757,357 (46,302,044) 25,238,458 (23,265,420) 11 Speedometer (Nos.) 75,348 40,862,370 (12,822) (5,703,934) 12 Head Lamp (Nos.) 55,628 (12,731) 22,818,362 (4,617,507) 13 Lacquer (Kg) 2,422 (2,338) 6,237,491 (7,731,992) 14 PCB Assembly (Nos.) 205,699 (18,927) 15,168,095 (2,042,669) 15 Stay CP B/L(Nos.) 20,380 (1,066,266) 248,432 (11,204,607) 16 Blinker Assembly ( -) 2,283,908 (-) 1 7. Windshield 17,605 (-) 1,684,402 (-) 18. Others 197,176,344 (125,683,574) Total 720,166,349 (504,703,826)

77 Lumax Auto Technologies Ltd. D) Value and percentage of Raw Materials and Stores consumed: S. No. 1 Particulars Raw Material Stores Consumed % Value % Value Indigenous (93.94) 633,505,071 (474,115,314) 100 (100) 5,953,209 (5,385,936) 2 Imported (6.06) 86,661,278 (30,588,512) - (-) - (-) Total 100 (100) 720,166,349 (504,703,826) 100 (100) 5,953,209 (5,385,936) E) Expenditure/Payments in Foreign Currency (Accrual Basis): S. No. Particulars CIF Value of Imports a) Raw Material 93,941,484 34,144,628 b) Capital Goods 16,760,198 14,140,635 2 Travelling 248, ,830 3 Testing Fee - 356,001 4 Royalty 35,78,465 2,059,272 F) Earnings in Foreign Currency (Accrual Basis) : S. No. Particulars Exports of goods calculated on FOB Basis 1,93,053-75

78 16. Details of Prior Period Adjustments (Net) S. No. Particulars A EXPENDITURE Travelling & Conveyance - 7,802 2 Salaries & Allowances 24, ,057 3 Postage & Telephones - 9,856 4 Light, Power & Fuel - 68,754 5 Freight Inward - 16,371 6 Raw material 2,81,530-7 Miscellaneous Expenses - 18,492 8 Line Rejection Charges 22,869-9 Amortisation of Land 19,394 - B INCOME TOTAL EXPENDITURE (A) 348, ,332 1 Depreciation Adjustment (Income) 879,559 - TOTAL INCOME (B) 879,559 - PRIOR PERIOD ADJUSTMENT (NET) (B-A) 530,778 (318,332) 17. Schedules 1 to 20 referred to above form an integral part of the accounts. 18. Figures have been rounded off to the nearest rupee and figures of the previous year are given in brackets and have been regrouped wherever necessary. For and on behalf of the Board of Directors of Lumax DK Auto Industries Ltd. D.K. Jain Deepak Jain Anmol Jain Shivani Jain Chairman Director Director Executive Director Place : Gurgaon Sanjay Mehta Anil Tyagi Date : 30th June, 2009 Vice President(F) Company Secretary 76

79 Lumax Auto Technologies Ltd. 1 REGISTRATION DETAILS LUMAX DK AUTO INDUSTRIES LIMITED BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE (Pursuant to the Provisions of Part-IV of Section VI of the Companies Act, 1956) Registration No. U34300DL1997PLC State Code 55 Balance Sheet Date II CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands) Public Issue - Rights Issue - Bonus Issue - Private Placement - III POSITION OF MOBILISATION & DEPLOYMENT OF FUNDS (Amount in Rs. Thousands) Total Liabilities 785,206 Total Assets 785,206 Source of Funds Paid up Capital 42,403 Reserves & Surplus 240,661 Secured Loans 72,221 Unsecured Loans 103,358 Deferred Tax Liability 36,323 Application of Funds Net Fixed Assets* 377,545 Net Current Assets 116,293 Accumulated Losses - Misc. Expenditure 1,129 (*) includes Capital WIP Rs.1922 thousand IV PERFORMANCE OF COMPANY (Amount in Rs. Thousands) (+) for Profit/(-) for Loss Turnover(**) 1353,199 Total Expenditure 1,195,478 Profit/Loss before Tax 158,251 Profit/Loss after Tax 108,244 Earnings per Share in Rs Dividend - (**) includes other income of Rs. 3,414 thousands. V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS SERVICES OF COMPANY Item Code No. (ITC Code) Product Description Gear Shifter Assembly. Item Code No. (ITC Code) Product Description Head Lamp,Tail Lamp, Blinkers Item Code No. (ITC Code) Product Description Motor Adjuster Assy For and on behalf of the Board of Directors of Lumax DK Auto Industries Ltd. D.K. Jain Deepak Jain Anmol Jain Shivani Jain Chairman Director Director Executive Director Place : Gurgaon Sanjay Mehta Anil Tyagi Date : 30th June, 2009 Vice President(F) Company Secretary 77

80 AUDITORS' REPORT To, The Board of Directors of Lumax Auto Technologies Limited, 1. We have examined the attached Consolidated Balance Sheet of Lumax Auto Technologies Limited, and its subsidiary viz., Lumax DK Auto Industries Limited, New Delhi as at 31st March, 2009, the Consolidated Profit & Loss Account and the Consolidated Cash Flow Statement for the year ended on that date, annexed thereto. 2. These financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit. 3. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 4. We did not audit the financial statements of the subsidiary Company. These financial statements have been audited by other auditors whose report has been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of this subsidiary is based solely on the report of other auditors. 5. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 "Consolidated Financial Statement" issued by the Institute of Chartered Accountants of India and on the basis of separate audited financial statements of the Company and its subsidiary included in the consolidated financial statements. 6. On the basis of the information and explanations given to us and on the consideration of the separate audit reports on individual audited financial statements of the Company and its subsidiary, we are of the opinion that the said Consolidated Financial Statements, and read together with other notes appearing in Schedule "X" and their impact on Balance Sheet, Profit & Loss account & Cash Flow statement give a true and fair view in conformity with the accounting principles generally accepted in India: [i] [ii] In case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Company and its subsidiary as on 31st March, 2009; In case of the Consolidated Profit & Loss account, of the consolidated results of operations of the Company and its subsidiary for the year ended on 31st March, [iii] In case of the Consolidated Cash Flow Statement, of the cash flows of the Company and its subsidiary for the year ended on 31st March, For D. R. Barve & Company Chartered Accountants CA D. R. Barve [Proprietor] Membership No Place : Pune Date : June 30,

81 Lumax Auto Technologies Ltd. Consolidated Balance Sheet as at March 31, 2009 Particulars Sources Of Funds Schedule As at (Amount in Rs.) As at Share Holders Funds Share Capital 1 116,315, ,315,410 Reserves & Surplus 2 522,564, ,503, ,879, ,819,306 Loan Funds Secured Loans 3 212,826, ,836,013 Unsecured Loans 4 12,889,588 26,794, ,715, ,630,747 Deferred Tax Lialibity 5 58,340,761 53,703,092 Total 922,936, ,153,145 Application of Funds Fixed Assets 6 Gross Block 909,278, ,025,191 Less :Depreciation 184,149, ,988,650 Net Block 725,129, ,036,541 Capital Work In Progress 7,020,273 69,356,431 Investments 7 26,472,500 13,948,500 Current Assets, Loans & Advances Inventories 8 195,662, ,851,339 Sundry Debtors 9 467,441, ,593,321 Cash and Bank Balance 10 31,229,271 61,595,749 Loans & Advances ,183, ,975, ,516, ,015,686 Less : Current Liabilities & Provision Current Liabilities ,560, ,229,327 Provisions 13 97,771,207 75,232, ,331, ,461,513 Net Current Assets 163,185, ,554,173 Miscellaneous Expenditure [To the extent not written off or adjusted] 14 1,128,750 2,257,500 Total 922,936, ,153,145 Notes to Accounts 24 The Schedules referred to above form an integral part of the Balance Sheet. As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Date : June 30, 2009 Ashish Dubey Head Finance Milita Bhar Company Secretary 79

82 Consolidated Profit & Loss Account for the year ended March 31, 2009 Particulars Income Schedule Year ended (Amount in Rs.) Year ended Turnover (Gross) 15 3,206,954,031 3,250,967,171 Less : Excise Duty 243,978, ,476,755 Turnover (Net) 2,962,975,940 2,911,490,416 Other Income 16 6,995,301 10,370,389 Total 2,969,971,241 2,921,860,805 Expenditure Purchase of Traded Goods 1,120,833,245 1,050,842,133 Material Consumed 17 1,202,884,786 1,235,585,101 Decrease/(Increase) In Inventory 18 (6,691,349) (18,323,330) Manufacturing Expenses ,290, ,868,210 Personnel Expenses ,908, ,808,606 Administrative Expenses ,263,352 97,352,713 Finance Expenses 22 27,607,381 26,487,648 Depreciation 43,327,245 40,713,898 R&D Expenses 23 5,757,376 - Total 2,806,180,653 2,741,334,979 Profit Before Tax 163,790, ,525,826 Less : Provision for Taxation For Earlier Tax (62,629) 415,512 For Current Tax 43,574,300 41,408,300 Deferred Tax 4,637,669 18,437,774 Fringe Benefit Tax 1,665,380 1,204,740 Wealth Tax 15,450 - Profit after Tax 113,960, ,059,500 Balance brought forward from earlier year 150,568,738 59,711,486 Prior period Adjustments (244,143) (5,089,766) Profit available for appropriation 264,285, ,681,220 Less : Proposed Dividend 17,447,312 17,447,312 Tax on Proposed Dividend 2,965,170 2,965,170 Transfer to General Reserve 11,300,000 2,700,000 Surplus Carried to Balance Sheet 232,572, ,568,738 Earnings Per Share Net Profit After Tax 113,960, ,059,500 Basic & Diluted Earnings Per Share (Face value of Rs. 10/- each) Notes to Accounts 24 The Schedule referred to above form and integral part of the Profit & Loss Account. As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Date : June 30, 2009 Ashish Dubey Head Finance Milita Bhar Company Secretary 80

83 Lumax Auto Technologies Ltd. Consolidated Cash Flow Statement for the year ended March 31, 2009 Particulars Year ended Year ended A. Cash Flow From Operating Activities : Profit Before Tax 163,790, ,525,826 Adjustments For : Depreciation 43,327,245 40,713,898 Depreciation on R&D Assets 127,900 Adjustment of Depreciation (860,165) Loss/(Profit) on Sale of Fixed Assets 1,192, ,450 Interest Income (1,112,019) (1,504,093) Interest Expense 27,607,381 26,487,648 Rent Received (119,000) (96,000) Voluntary Retirement Compensation & Deferred Expenditure Written off - 673,557 (Profit)/Loss on Sale of Fixed Assets 269,201 - Operating Profit Before Working Capital Changes 234,223,196 24,770,286 Adjustments For : Inventories (7,811,580) (64,012,926) Trade & Other Receivables (33,603,862) (54,763,165) Trade & Other Payables (48,669,165) 94,743,639 Other Loans & Advances ( Net ) 3,395,319 (9,289,520) Provision For Leave Encashment, Gratuity & Excise Duty (201,244) 1,878,920 Cash Generated From Operations 147,332, ,327,234 Direct Taxes Paid (46,525,962) (52,644,035) Income Tax Refund for Earlier Years 43,610 - Net Cash From Operating Activities 100,850, ,683,199 B. Cash Flow From Investing Activities : Purchase of Fixed Assets (135,742,138) (105,552,509) Proceeds From Sale of Fixed Assets 39,505,438 9,993,942 Purchase of Investment (12,524,000) (13,947,500) Interest Received 1,112,019 1,504,093 Rent Received 119,000 96,000 Decrease / (increase) In Capital W.I.P. 61,685,460 (51,095,597) Preoperative Expenses - 9,544,660 Net Cash From Investing Activities (45,844,221) (149,456,911) C. Cash Flow From Financing Activities : (Amount in Rs.) Increase/(decrease) in Borrowings (37,109,446) 36,569,566 Interest Paid (27,607,381) (26,487,648) Dividend Paid (17,447,312) (17,447,312) Expended During the Year (243,260) (112,360) Tax On Distributed Profits (2,965,170) (2,965,171) Net Cash From Financing Activities (85,372,569) (10,442,925) Net Increase/(decrease) in Cash & Cash Equivalents (A+B+C) (30,366,478) 3,783,363 Cash & Cash Equivalents at the beginning of the year 61,595,749 57,812,386 Cash & Cash Equivalents at the end of the year 31,229,271 61,595,749 As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Date : June 30, 2009 Ashish Dubey Head Finance Milita Bhar Company Secretary 81

84 Schedules to the Accounts Particulars As at (Amount in Rs.) As at Schedule "1 Share Capital Authorised Share Capital 1,50,00,000 Equity Shares of Rs.10/- 150,000, ,000,000 Issued,Subscribed, Called Up & Paid Up Share Capital : 1,16,31,541 Equity Shares of Rs. 10/- each fully paid - up. 116,315, ,315,410 Out of above i) 3,19,297 Equity Shares were issued as fully paid-up shares by capitalising the reserves. ii) 12,72,222 Equity Shares have been issued for consideration received otherwise than in Cash. iii) 14,00,170 Equity Shares were issued by way of conversion of Debentures. Schedule "2 Reserves & Surplus 116,315, ,315,410 Capital Reserve Balance as per last Balance Sheet 33,701,108 33,701,108 33,701,108 33,701,108 Securities Premium Account Balance as per last Balance Sheet 234,452, ,564,410 Less: Share Issue/Preliminary Expenses 243, , ,208, ,452,050 General Reserve Balance as per last Balance Sheet 10,782,000 8,082,000 Add : Transfer from Profit & Loss Account 11,300,000 2,700,000 Profit And Loss Account 22,082,000 10,782,000 Transferred from Profit & Loss A/c 232,572, ,568,738 Schedule "3 Secured Loans 232,572, ,568, ,564, ,503,896 Term Loan - I 58,040,000 94,480,000 ABN AMROBank N. V.(Secured against mortgage of Land, Building & Hypothecation of Plant and Machinery) Amount due within one year Rs. 30,480,000/-(Previous Year Rs. 36,440,000/-) Term Loan - II 2,500,000 12,100,000 ABN AMROBank N. V. (Secured against mortgage of Land, Building & Hypothecation of Plant and Machinery) Amount due within one year Rs.2,500,000/- (Previous Year Rs. 9,600,000/-) 82

85 Lumax Auto Technologies Ltd. Schedules to the Accounts Particulars As at (Amount in Rs.) As at Term Loan - III 43,529,000 40,000,000 ABN AMROBank N. V. (Secured against mortgage of Land, Building & Hypothecation of Plant and Machinery) Amountdue within one year Rs. 14,258,000/- (Previous Year Rs. 8,400,000/-) Term Loan - IV 2,785,715 - ABN AMROBank N. V. (Secured against mortgage of Land,Building & Hypothecation of Plant and Machinery) Amount Due within one year Rs. 857,140/-) Cash Credit facilities ABN AMRO Bank N. V. (Secured against Hypothecation of Inventories & Book Debts). 104,139,344 82,966,443 HDFC Bank Ltd. 244, ,330 (Secured against Hypothecation of Logan Car) Amount due with one year Rs.158,161/- (Previous Year Rs. 141,018/) ICICI Bank Ltd. 160, ,240 (Secured against Hypothecation of Maruti Car) Amount due with one year Rs.269,752/- (Previous year Rs.233,067/-) Maruti Suzuki India Ltd. 376, ,000 (Secured against Hypothecation of Maruti Car) Amount due with one year Rs 141,116./- (Previous Year Rs. 190,467/-) Kotak Mahindra Prime Ltd. 1,050,492 - (Secured against Hypothecation of Maruti Car & Hyundi Car) Amount due with one year Rs 3,06,640./- 212,826, ,836,013 Schedule "4 Unsecured Loans Loan from others 839,588 11,839,588 Deferral Payment of Sales Tax /SIDCUL 12,050,000 14,154,774 Interest Accrued & due 800,372 12,889,588 26,794,734 Schedule "5 Deferred Tax Liability Balance as per last Balance Sheet 53,703,092 35,311,059 Add: Transferred from Profit & Loss Account 4,637,669 18,392,033 58,340,761 53,703,092 83

86 Schedule to Accounts Schedule 6 : Fixed Assets (Amount in Rs.) As at As at As at ) 388) Particulars As at (Amount in Rs.) As at Schedule "7 Investments Unquoted - Long Term 20 Equity Shares of Rs.50 /- each fully paid-up of Rupee Co-Operative Bank Ltd. In Joint Venture Company 26,47,150(13,94,750) Equity Shares of Rs. 10/- each fully paidup of Lumax Cornaglia Auto Technologies Pvt.Ltd. 1,000 1,000 26,471,500 13,947,500 26,472,500 13,948,500 Current Assets, Loans and Advances Schedule "8 Inventories Stock In Trade (As taken, valued & certified by the Management) Raw Material & Components Consumable Packing Material Finished Goods Work In Progress Stock In Transit 121,277, ,541,873 3,378,502 3,158, , ,644 62,091,185 55,070,500 8,003,760 8,360, , , ,662, ,851,339 84

87 Lumax Auto Technologies Ltd. Schedules to the Accounts Particulars As at (Amount in Rs.) As at Schedule "9 Sundry Debtors (Unsecured, Unconfirmed & Considered Good) Debts Outstanding for a period exceeding six months Other Debts Schedule "10 Cash & Bank Balances Cash In Hand Cheques in Hand Balance with Scheduled Banks a) In Current Accounts b) In Fixed Deposit Accounts 16,149,067 21,445, ,292, ,147, ,441, ,593, , , ,744 21,461,679 50,984,071 9,268,789 9,268,789 31,229,271 61,595,749 Schedule "11 Loans And Advances Advances recoverable in cash or kind Security Deposits Current Liabilities & Provisions 109,441,725 83,261,272 30,741,455 31,714, ,183, ,975,277 Schedule "12 Current Liabilities Sundry Creditors a) Micro, Small and Medium Enterprises b) Others Outstanding Expenses Advances received from customers Unclaimed Dividend Schedule "13 Provisions 32, , ,785, ,844,513 36,598,890 36,056,042 1,929,000 22,154, , ,560, ,229,327 Taxation 72,010,600 49,787,116 Tax on Proposed Dividend 2,965,170 2,965,170 Proposed Dividend 17,447,312 17,447,312 Fringe Benefit Tax 1,382, ,791 Provision for Earned Leave 2,056,611 1,718,408 Provision for Gratuity 1,893,944 2,431,797 Provision for Excise Duty on Stock of Finished Goods - 1,592 Wealth Tax 15,450-97,771,207 75,232,186 Schedule "14 Miscellaneous Expenditure To The Extent Not Written off or Adjusted Deferred Revenue Expenditure Balance as per last Balance Sheet 2,257,500 4,194,379 Less: Written off during the year 1,128,750 1,936,879 1,128,750 2,257,500 85

88 Schedules to the Accounts Particulars Schedule "15 Turnover Turnover (Gross) 3,206,954,031 3,250,967,171 Schedule "16 Other Income Miscellaneous Income 3,528,350 3,704,533 Interest Received 1,112,019 1,504,093 (T.D.S. Rs.118,330/- Previous year Rs 113,059/-) Discount Received 464, ,175 Profit on Sale of Assets - 159,300 Rent Received 119,000 96,000 Exchange Difference - 2,664,166 Excess Provision Written Back 1,771,335 1,836,122 6,995,301 10,370,389 Schedule "17 Material Consumed Opening Stock of Raw Material 120,541,874 75,710,308 Add : Purchases during the year 1,203,620,129 1,280,416,666 1,324,162,003 1,356,126,974 Less : Closing Stock of Raw Material 121,277, ,541,873 1,202,884,786 1,235,585,101 Schdule "18 Decrease/(Increase) In Inventory Opening Inventory : Work In Progress 8,360,429 10,250,954 Stock In Transit 240,531 1,322,544 Finished Goods 55,070,500 33,774,632 63,671,460 45,348,130 Closing Inventory : Work In Progress 8,003,760 8,360,429 Stock In Transit 267, ,531 Finished Goods 62,091,185 55,070,500 70,362,809 63,671,460 Decrease/(Increase) In Inventory (6,691,349) (18,323,330) Schedule "19 Manufacturing Expenses Year ended (Amount in Rs.) Year ended ,206,954,031 3,250,967,171 Miscellaneous Manufacturing Expenses 841,181 2,836,464 Packing Material 11,414,013 7,069,314 Consumables 42,890,148 40,823,035 Job-Work 27,108,299 46,539,213 Labour Charges (Contract) 18,956,929 20,907,103 Electricity, Light & Power 37,269,902 41,065,426 Freight and Cartage 7,663,113 7,343,162 Water Charges 446, ,515 Excise Duty on Finished Goods (1,592) (358,838) Repairs & Maintenance - Plant & Machinery 3,701,915 5,212, ,290, ,868,210 86

89 Lumax Auto Technologies Ltd. Schedules to the Accounts Particulars Schedule "20 Personnel Expenses Year ended (Amount in Rs.) Year ended Wages & Salary 112,205, ,071,241 Bonus 5,271,755 3,584,263 Provident Fund Contribution 6,686,145 7,207,606 Welfare Expenses 6,927,161 6,547,261 E.S.I. Contribution 408,017 1,659,417 Gratuity/Group Gratuity 3,528, ,818 Directors' Remuneration 880, ,000 Commission to Director - 900, ,908, ,808,606 Schedule "21 Administrative Expenses Rent, Rates & Taxes 4,263,814 3,645,489 Repairs to Buildings 2,035,754 1,869,883 Repairs to others 2,806,458 3,709,119 Insurance Charges 1,393,279 1,772,156 Travelling & Conveyance 7,410,460 6,973,796 Security Charges 4,010,520 3,900,298 Printing & Stationery 1,982,155 2,673,807 Postage & Telephones 3,895,816 3,973,121 Office Expenses 155, ,248 Advertisement 622,371 1,956,336 Profession Tax 2,500 2,500 Vehicle Expenses 2,444,701 2,418,878 Legal & Professional Fees 3,082,056 4,969,139 Carriage Outward 34,381,866 29,564,608 Sales Incentives/Discount Paid 33,812,661 22,773,819 Amount Written off 46, ,850 Miscellaneous Expenses 7,974,285 3,471,144 Deferred Revenue Expenses written off 1,128,750 1,128,750 Royalty 3,630,067 2,059,272 Meeting Fees 64,500 54,500 Commission to Selling Agent 1,437,093 - Bad Debts 9,344,404 - Loss on Sale of Assets 332,516 - Foreign Exchange Difference 5, ,263,352 97,352,713 Schedule "22 Finance Expenses Interest on Term Loans 11,448,561 14,620,403 Interest on working Capital Advance 11,855,458 6,237,066 Interest Paid to others 1,038,615 3,004,660 Bank Charges 3,264,747 2,625,519 27,607,381 26,487,648 Schedule "23 R&D Expenses Salaries and Allowances 3,702,063 - Contribution to ESI and PF 186,471 - Staff Welfare 3,835 - Gratuity Expenses 184,860 - Earned Leave Expenses 170,294 - Medical Reimbursement 102,408 - Leave Travel Allowance 102,404 - Postage & Telephone 71,342 - Travelling & Conveyance 512,545 - Vehicle Maintainance 158,947 - Prototype-RM 152,676 - Books & Periodicals 8,585 - Repair & Maintainance 242,618 - Repair to Machinery 14,495 - Electricity Charges 8,282 - Consumable Store 5,218 - Freight & Cartage 1,200 - Printing & Stationery 1,233 - Depreciation 127,900-5,757,376-87

90 Schedule 24 : Notes To Consolidated Accounts 1. Significant Accounting Policies: A) Basis of Preparation of Financial Statements: The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accural basis. B) Fixed Assets : Fixed Assets are stated at cost net of CENVAT, Cess, Deferred Excise Duty and VAT set-off less accumulated depreciation. Cost includes purchase cost together with inward freight, duties, taxes and incidental cost of acquisition and installation and eligible borrowing costs and also includes pre-operative expenses incurred during the construction, trial and stabilization period, up to the period such assets are put to commercial use. C) Depreciation: Depreciation on Fixed Assets is provided on Straight Line Method at the rates as provided under Schedule XIV of the Companies Act, D) Intangible Assets and Amortisation: Intangible assets are recognised as per the criteria specified in Accounting Standard (AS) 26 Intangible Assets issued by the Institute of Chartered Accountants of India and are amortised as follows: (a) Leasehold land: over the period of lease (b) Specialised software: over a period of five years (c) Technical Knowhow : technical assistance over the period of 5 to 8 years as the case may be. E) Investments: a) Current Investments are valued at cost or market price whichever is lower. b) Long Term Investments are valued at cost less permanent diminution if any. F) Inventories: a) Raw Materials including components, consumables & packing material are valued at cost after making provision for obsolescence wherever necessary. Cost is determined on First-in-First-Out (FIFO) basis. b) Work in Progress is valued at estimated Cost. c) Goods purchased for resale & other finished goods are valued at lower of the cost or net realizable value. d) Scrap is valued at estimated realizable value. G) Deferred Revenue Expenditure For Subsidiary Company : Expenditure incurred on know how for modification of existing products along with any future expenditure is appropriately amortized on the commencement of commercial production of the modified products as the benefit of expenditure is expected in future years. H) Revenue Recognition: a) Sale of goods is recorded when supply of goods takes place in accordance with the terms of Sale. It includes Excise Duty but excludes Trade Discount and Sales Tax. b) Interest income is recognized on accural basis. c) Revenue from logistics activity is recognized on the basis of contract entered into by the company on accrual basis. I) Employees' Retirement Benefits: For Holding Company: a) The Company's contribution to Provident Fund is charged to Profit & Loss Account. b) The Company's contribution to Gratuity Fund of Life Insurance Corporation of India is charged to Profit & Loss Account on the basis of scheme subscribed by the Company. The contribution is provided on the basis of actuarial valuation. c) Voluntary Retirement Compensation:- 20% of the amount paid to the employees towards voluntary retirement is charged to Profit & Loss Account. d) The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave for future encashment subject to certain limits. The liability is provided based on the number of days of unutilised leave at balance sheet date on the basis of an independent actuarial valuation. 88

91 Lumax Auto Technologies Ltd. For Subsidiary Company: a) Short Term Employee Benefits: Short Term employee benefits are recognized in the period during which the services have been rendered. b) Long Term Employee Benefits: i) Defined Contribution Plan Provident Fund and Employees' State Insurance schemes. All employees of the Company are entitled to receive benefits under the Provident Fund, which is defined in the contribution plan. Both the employees and the employer make monthly contributions to the plan at a predetermined rate (presently 12 %) of the Employees' Basic Salary and Dearness Allowance. These contributions are made to the fund administered and managed by the Government of India. In addition, some employees of the company are covered under the Employees State Insurance Scheme which are also defined in the contribution scheme recognized and administered by the Government of India. The Company's contributions to both these schemes are expressed in the Profit and Loss Account. The Company has no further obligations under plans beyond its monthly contributions. ii) Defined Benefit Plan Leave Encashment- Liability on account of unavailed Earned Leave at the year end is provided as per the actuarial valuation according to Projected Unit Credit Method. Gratuity- Liability on account of Gratuity at the year end is provided as per the actuarial valuation according to the Projected Unit Credit Method. iii) Actuarial gains and losses are recognized as and when incurred. J) Borrowing Costs: Borrowing Costs that are attributable to the acquisition or construction of qualifying fixed assets are capitalized as part of the cost of assets. All other borrowing costs are recognized as expense in the year in which they are incurred. K) Cash Flow Statement : Cash Flow Statement has been prepared following the indirect method set out in the Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India. L) Taxes on Income: a) Income Tax expenses for the period comprise of Current Tax, Deferred Tax & Fringe Benefit Tax. b) Current Tax & Fringe Benefit Tax are the amounts of tax payable on the taxable income/expenses for the year determined in accordance with the provisions of the Income Tax Act, c) Deferred Tax is recognized, on the timing differences, being the difference between accounting income and taxable income, which originates in one period and are capable of reversal in one or more subsequent accounting periods in accordance with provisions of Accounting Standard 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India. Deferred Tax Asset in respect of brought forward losses is recognized as if there is virtual certainty that there will be sufficient future taxable income against which such asset can be realized. d) Wealth Tax is the amount of tax payable on the taxable wealth as at the date of Balance Sheet. M) Translation of Foreign Currency items a) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Exchange difference arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise. b) Monetary items denominated in foreign currency are reported using the closing exchange rate on each Balance Sheet date. N) Segment Reporting For Holding Company : The Company has considered 'Business Segment' as the primary segment for disclosure. Further, since the company is engaged in the manufacturing of Automotive Parts, in the opinion of the Management, the Company operates in one primary segment only. For Subsidiary Company : The Company operates in two primary segments viz. Automotive Parts, and Trading of Motor Adjusters. O) Accounting for Interests in Joint Ventures: Interests in Joint Ventures are accounted as follows: Type of Joint Venture Accounting treatment Jointly Controlled Entities a) Income on investments in incorporated Jointly Controlled Entities is recognised when the right to receive the same is established. b) Investment in such Joint Ventures is carried at cost after providing for any permanent diminution in value. 89

92 P) Pre-Operative Expenditure: The expenditure incurred by the Subsidiary Company from the date of setting up of a new unit, up to the date of commencement of commercial production of the unit is treated as Pre-operative expenditure to be capitalized as a part of the indirect cost of construction. The amount of such expenditure is to be apportioned over the individual assets in an equitable manner. The amount not directly attributable to fixed assets are charged to the Profit and Loss account in the year in which such expenditure is incurred. Q) Provisions and Contingent Liabilities: a) Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if i) the Company has a present obligation as a result of a past event, ii) a probable outflow of resources is expected to settle the obligation; and iii) the amount of the obligation can be reliably estimated. Contingent liability is disclosed in case of a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation, b) a present obligation when no reliable estimate is possible; and c) a possible obligation arising from past events where the probability of outflow of resources is not remote. 2. Contingent Liabilities not provided for (Rs. in lacs) S. Particulars No. i) Provision for Income Tax assessment dues (Appeal pending with ITAT for the Financial year ) ii) Provision for Income Tax assessment dues (appeal pending with C.I.T (Appeal) Financial year ) iii) Interest on Supplementary invoice Matter pending with CESTAT Mumbai iv) Employee State Insurance Demand (for Subsidiary) v) Capital Commitment Net of Advance Based on the favorable decisions in similar cases/legal opinions taken by the Company, the company believes that it has good cases in respect of the items listed under (i) to (iv) above and hence no provision there against is considered necessary. 3. Details in respect of Opening Stock, Production, Turnover & Closing Stock of Finished Goods: As Per Annexure-A (Certified by Management). 4. Details in respect of Consumption of Raw Materials and Consumables and Others: As per Annexure B ( Certified by Management). 5. In terms of Paragraph-3 Part-II of Schedule VI of the Companies Act 1956, quantity wise disclosure have been restricted to those items/articles which individually account for 10% or more of the total Sales, Consumption as the case may be and the same is disclosed to the extent available and considered as compiled and certified by the management. 6. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 In Case of Holding Company Sundry Creditors as defined under the Micro, Small and Medium Enterprises Development Act, 2006(MSMED) have been identified to the extent of information available with the company. This has been relied upon by the auditors. 90

93 Lumax Auto Technologies Ltd. Year ended march 31, 2009 (Amount in Rs.) S.No Particulars Principal Interest Total A The outstanding dues to micro small and medium enterprises. 32, ,996 (174,572) (1,291) (175,863) B Principal amount and Interest due thereon remaining unpaid as 32, ,996 at end of the year (174,572) (1,291) (175,863) C Amount of Interest paid in terms of Section 16 of MSMED Act alongwith the amount of the payment made to supplier beyond appointed day (-) (-) (-) D Outstanding Interest (Where principal amount has been paid off to the - 1,720 1,720 supplier but interest amount is outstanding as on March 31, 2009) (-) (1,291) (1,291) E Total Interest out standing as on March 31, ,886 1,886 (Interest in 'B' + interest in 'D' above) (-) (1,291) (1,291) In Case of Subsidiary Company : The Company has sent letters for the identification of suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, On the basis of disclosure received no supplier falls under the said Act. 7. The Balances of parties are subject to confirmations. 8. None of the Employees was in receipt of Remuneration more than Rs. 24 Lacs per annum, if employed throughout the year or Rs. 2 Lacs per month if employed for part of the month. 9. Subsequent to Central Government's Notification on Companies (Accounting Standard Rules) ("Rules") on December 7, 2006, to comply with the revised Accounting Standard - 11 on Accounting for the Effects of Changes in Foreign Exchange Rates, the exchange differences arising in respect of fixed assets acquired from outside India are to be charged off to the Profit and Loss Account. In the previous year, such differences were adjusted in the cost of the assets. Had the previous year policy been followed, the profit after tax for the current year would have been lower by Rs lacs and fixed assets (including Capital work in progress) would have been higher by Rs lacs. 10. In previous year, the Holding Company has adopted the Accounting Standard AS-15 (Revised) which is mandatory from Accounting Period commencing on or after December 07, The Company has provided for Employee Benefits on actuarial valuation as per Projected Unit Credit Method, using principles laid under Accounting Standard 15 (Revised). 11. Employee (a) During the year, the Company has recognized the following amounts in the Profit and Loss Account: Defined Contribution Plans Particulars Year Ended Year Ended Employer's Contribution to Provident Fund* 6,518,600 7,085,572 Employer's Contribution to Employee State Insurance* 755,137 1,659,417 * included in Personnel Expenses (Refer Schedule 20 & 23) 91

94 Defined Benefit Plans Particulars Gratuity* Gratuity* Leave Leave Year Ended Year Ended Encashment* Encashment* Year Ended Year Ended (b) Current Service Cost 1,145,813 2,154,559 1,349,462 1,670,481 Interest Cost 643, , , ,055 Expected Return on Plan Assets - - Relating to Corrugated Box - 95,253-20,306 Actuarial (Gain) / Loss 1,306,983 (1,272,145) (145,096) 186,962 Short Term 450, ,674 Net Cost 3,096,273 1,597,653 1,914,288 2,609,478 *Subsidiary Company - Unfunded The assumptions used to determine the Benefit obligations are as follows: Particulars Gratuity Gratuity Leave Leave Year Ended Year Ended Encashment Encashment Year Ended Year Ended Discount Rate i. Holding Company 8.00% 7.50% 8.00% 7.50% ii. Subsidiary Company 7.50% 8.00% 7.50% 8.00% Expected Rate of increase in Compensation Levels i. Holding Company 5.00% 5.00% 5.00% 5.00% ii. Subsidiary Company 10.00% 10.00% 10.00% 10.00% Expected Rate of Return on Plan Assets i. Holding Company N.A. N.A. N.A. N.A. ii. Subsidiary Company N.A. N.A. N.A. N.A. Expected Average remaining working lives of Employees (years) i. Holding Company N.A. N.A. N.A. N.A. ii. Subsidiary Company (c) Reconciliation of opening and closing Balances of Benefit obligations and plan Assets Particulars Gratuity Gratuity Leave Leave Year Ended Year Ended Encashment Encashment Year Ended Year Ended Change in Projected Benefit Obligation (PBO) Beginning of year** 8,195,446 8,214,280 3,344, ,037 Current Service Cost 1,145,813 2,154,559 1,349,462 1,670,481 Interest Cost 643, , , ,055 Benefits Paid (158,780) (71,695) (215,753) (403,041) Actuarial (Gain) / Loss 1,306,983 (1,272,145) (145,096) 540,330 Projected Benefit obligation at year end & change in plan Assets: Fair value of plan Assets at year end- Long Term 9,364,082 2,398,457 4,167,147 1,200,734 Fair value of plan Assets at year end- Short Term , ,674 Net funded status of the plan 9,364,082 2,398,457 4,618,014 1,718,408 Net amount Recognized 11,258,026 4,830,254 4,618,014 1,718,408 * Includes provisions relating to corrugated Box unit which was non operational w.e.f ,253-20,306 *Subsidiary Company - Unfunded 92

95 Lumax Auto Technologies Ltd. 12. Interest in Joint Venture Companies Pursuant to Accounting Standard 27 on Financial Reporting of Interests in Joint Ventures, the relevant information relating to the Joint Venture Company, is as given below: Name of the Joint Country of Proportion of Description of Interest Venture Company Incorporation Ownership interest Lumax Cornaglia Auto India 50% JV is established principally Technologies Private for manufacture, assembly Limited and sale automotive components The Company's share in the aggregate amounts to each of the assets, liabilities, income, expenses, capital commitments and contingent liabilities as at / for the year ended 31st March 2009 and 31st March 2008 are as under: (Amount in Rs.) Proportion of Company s Interest in Joint Venture Assets 27,123,578 13,598,924 Liabilities 242,191 Nil Income 12,569,807 40,197 Expenses 11,811, ,772 Capital Commitments 15,480,500 Nil Contingent Liabilities Nil Nil 13. Statement showing the use of proceeds from Initial Public Offer. During the year ended March 31, 2007, the Holding Company had issued 30,12,539 equity shares of Rs. 10/- each by way of initial public offering at a premium of Rs.65/- per share. The net proceeds of the issue have been utilized for the objects upto March 31, 2008 therefore the same is not required to be disclosed. 14. Subsequent to Accounting Standard 22 Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, Deferred Tax expense of Rs.4,637,669 for the period is recognized in the Profit & Loss Account. The significant components of the Deferred Tax Liability as on 31st March 2009 are:- (Amount in Rs. ) S.No. Particulars As at As at Deferred Tax Liability i) Depreciation 66,362,775 55,414,860 ii) Deferred Revenue Expenditure 383, ,324 Total 66,746,437 56,182, Deferred Tax Asset i) Capital Loss - 641,923 ii) Disallowance u/s 43B 2,381,739 1,826,951 iii) Disallowance u/s 40a(ia) 17,540 10,218 iv) Unabsorbed Depreciation 6,006,397 - Total Deferred Tax Asset 8,405,676 2,479,092 Deferred Tax Liability(Net) (1-2) 58,340,761 53,703, Information Regarding Capacity Etc. For Holding Company S.No. Particulars As at As at Licensed Capacity Not Applicable Not Applicable 2 Installed Capacity Not Applicable Not Applicable 3 Class of Goods Manufactured Auto Parts Auto Parts 93

96 For Subsidiary Company: S. Class of Goods Manufactured Licensed Capacity Installed Capacity Actual Production No. 1 Gear Shifter Assembly N A 800, ,652 (750,000) (722,158) 2 Moulding N A 7,200,000 6,897,603 (7,200,000) (5,349,663) 3 Parking Brake N A 275, ,459 (250,000) (207,912) 4 Head Lamp Assembly & Head Lamp N A 1,000, ,563 (1,000,000) (278,839) 5 Tail Lamp Assembly & Tail Lamp N A 1,000, ,723 (1,000,000) (285,046) 16. Value of Imports calculated on CIF basis by the company during the year in respect of: (Amount in Rs.) S. Particulars Year ended Year ended No Raw Material 93,941,484 34,075,715 2 Components, Spare Parts & Consumables 2,345,030-3 Purchase of Finished Goods 666,777 2,320,333 4 Capital Goods & Accessories 24,867,418 14,140,635 Total 121,820,709 50,536, Payment to Auditors: S. Particulars Year ended No Year ended For Audit & Tax Audit Fees 774, ,000 2 For Other Services 142, ,811 Total 916, , Payment to Directors: S. Particulars Year ended No Year ended Remuneration 1,437,700 1,568,400 2 Provident Fund Contribution 145, ,400 3 Commission - 900,000 4 Others 49, Total 1,632,669 2,627, Segment Reporting: The group has disclosed Business Segment as the primary segment. Segments have been identified by the Management taking into account the nature of the products, manufacturing process, risk and reward parameters, Internal financial reporting systems and other relevant factors. Automotive Parts includes Gear Shifter Assembly, Parking Brake, Automotive Lights and Plastic Mouldings. Trading Activities includes Motor Adjusters. 94

97 Lumax Auto Technologies Ltd. S. No. (Amount in Rs.) Reportable Segments Automotive Parts Trading Consolidated 1. Segment Revenue a) External Revenue 2,585,026, ,945,188 2,969,971,241 (2,474,279,700) (447,581,105 ) (2,921,860,805) b) Inter Segment Revenue (-) (-) (-) c) Total Revenue (a+b) 2,585,026, ,945,188 2,969,971,241 (2,474,279,700) (447,581,105 ) (2,921,860,805) 2. Segment Results a) (Profit/Loss) 108,295,825 69,119, ,415,341 (115,110,499) (78,517,324) (193,627,823) b) Unallocated Expenses 13,624,753 (13,101,997 ) c) Profit Before Tax (a-b) 163,790,588 (180,525,826) d) Taxation 49,830,170 (61,466,326) e) Profit after tax (c-d) 113,960,418 (119,059,500) 3. Other Information a) Segment Assets 1,448,841, ,196,638 1,563,038,399 (1,375,196,371) (117,822,538) (1,493,018,909) b) Un-allocable Assets ,29,271 (-) (-) (61,595,749) c) Total Assets (a+b) 1,448,841, ,196,638 1,594,267,670 (1,375,196,371) (117,822,538) (1,554,614,658) d) Segment Liabilities 889,739,688 65,648, ,387,831 (932,778,207) (76,017,145) (1,008,795,352) e) Un-allocable Liabilities (-) (-) (-) f) Total Liabilities (d+e) 889,739,688 65,648, ,387,831 (932,778,207) (76,017,145 ) (1,008,795,352) g) Capital Expenditure 136,392, ,392,835 (282,966,858) (-) (282,966,858) h) Depreciation 43,327,245-43,327,245 (40,713,898) (-) (40,713,898) i) Non-cash expenses 1,128,750-1,128,750 other than Depreciation (1,936,879) (-) (1,936,879) 20. Related Party Disclosures: `The information about transactions with the related parties is attached herewith - As Per Annexure - C 95

98 21. Earning / Outgo In Foreign Currency: (Amount in Rs.) Particulars Year ended Year ended Payment in Foreign Currency Testing Fee - 356,001 Royalty 3,630,067 2,059,772 Commission to Agents 497,862 11,327 Travelling 829, ,815 Total 4,957,381 2,814,915 Earning in Foreign Currency 21,665,914 24,381, The value of stock of finished goods of Subsidiary company lying at the year ended includes excise duty amounting to Rs. Nil (Rs. 1,592/-). This has no effect on the profit for the year. 23. The total expenditure incurred on Research and Development: Nature of Expenses Expenditure charged to profit and loss account (Salary allowances & Other exp. ) Year ended Year ended ,989,692 1,337,166 Expenditure capitalized during the year 4,417,930 4,301, Previous year's figures have been regrouped or rearranged wherever necessary to make them comparable with the current year's figures. As per our report of even date For D. R. Barve & Company Chartered Accountants For and on behalf of the Board of Directors of Lumax Auto Technologies Ltd. CA D. R. Barve D. K. Jain Usha Jain Proprietor Chairman Managing Director Membership No Place : Gurgaon Ashish Dubey Milita Bhar Date : June 30, 2009 Head Finance Company Secretary 96

99 Lumax Auto Technologies Ltd. Annexure "A" Attached to Notes to Accounts A (i) Particular pertaining to Finished Goods For the year ended Class of Goods / Opening Stock Production/Purchase Turnover Closing Stock S. No. Manufactured/ Purchased Qty Value Qty Value Qty Value Qty Value (Nos.) (Nos.) (Nos.) (Nos.) 1 Head Lamp Assembly ,677, ,049,748 1,677, ,412,832 1, ,989 (-) (-) (1,209,998) (264,882,262) (1,208,822) (263,966,189) (1,176) (916,073) 2 Tail Lamp Assembly , ,075, , ,201,254 1, ,104 (-) (-) (336,314) (101,986,766) (334,426) (101,461,313) (1,888) (525,453) 3 Silencer Assembly ,926 20,352,724 18,926 20,352, (-) (-) (28,108) (24,451,082) (28,108) (24,451,082) (-) (-) 4 Frame / Chassis , ,649, , ,649, (-) (-) (431,952) (342,577,791) (431,952) (342,577,791) (-) (-) 5 Frame Assembly (-) (-) (65,955) (226,639,308) (65,955) (226,639,308) (-) (-) 6 Wind Shield CT-100/ Platina ,334 14,662, ,334 14,662, (-) (-) (569,726) (23,893,022) (569,726) (23,893,022) (-) (-) 7 Gear Shifter Assembly , ,650, , ,650, (2178) (470,641) (722,158) (186,684,947) (724,336) (187,155,588) (-) (-) 8 Moulding ,629 6,897, ,756,690 6,899, ,769, (66689) (1,444,997) (5,349,663) (166,665,415) (5,414,529) (168,097,783) (1,823) (12,629) 9 Parking Brake ,459 43,023, ,459 43,023, (183) (26,405) (207,912) (32,423,303) (208,095) (32,449,708) (-) (-) 10 Others - 357,297, ,297, ,782 (-) (314,770,731) (314,770,731) (-) Total 12,629 1,757,519,496 1,758,020,558 1,345,875 (1,942,043) (1,684,974,627) (1,685,462,515) (1,454,155) Note :- It is not practical to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total A) (ii) Particulars in respect of Traded Goods For the year ended S. No. Class of Goods / Purchased Opening Stock Production/Purchase Turnover Closing Stock Qty Value Qty Value Qty Value Qty Value (Nos.) (Nos.) (Nos.) (Nos.) 1 Head Lamp Assembly 46,666 7,679,866 2,273, ,490,989 2,248, ,153,583 71,188 7,679,866 (61,966) (9,910,762) (2,178,269) (314,759,439) (2,193,569) (359,295,574) (46,666) (7,679,866) 2 Tail Lamp Assembly/Rear Lamp 27,130 4,345, , ,244, , ,559,972 34,792 4,345,860 (30,129) (5,421,279) (456,268) (90,542,713) (459,317) (108,710,603) (27,080) (4,345,860) 3 Motor Adjusters 6,400 1,756,064 1,726, ,455,004 1,732, ,942, (11,312) (2,504,963) (1,928,977) (365,988,418) (1,933,889) (447,581,105) (6,400) (1,756,064) 4 Others 39,834, ,642, ,299,139 48,719,585 (13,995,586) (279,551,563) (310,440,619) (39,834,556) Total 53,616,346 1,120,833,245 1,204,955,382 60,745,310 (31,832,590) (1,050,842,133) (1,226,027,901) (53,616,346) 97

100 Annexure "B" Attached to Notes to Accounts B (i) Details for Consumption of Raw Material For the year ended For the year ended Name of the Item Units Qty. Amount Qty. Amount Steel Sheet Kgs ,325, ,768,072 Steel Tubes Nos ,970, ,949,712 Steel Tubes Mts ,335, ,625,920 Plastic Powder Kgs ,006, ,835,538 Housing Assembly Nos ,758, ,962,216 Knob (Nos) Nos ,565, ,281,438 Outer Boot (Nos) Nos ,984, ,634,334 Sheet Metal (Nos) Nos ,239, ,489,182 Rotula (Nos) Nos ,863, ,855,410 Plastic Dana (Kg) Kgs ,860, ,214,176 Bulbs Nos ,852, ,283,808 Cowl Nos ,757, ,302,044 Fender Nos ,238, ,265,420 Speedometer Nos ,862, ,703,934 Head Lamp Nos ,818, ,617,507 Lacquer (Kg) Kgs ,237, ,731,992 PCB Assembly. Nos ,168, ,042,669 Stay CP B/L(Nos.) Nos , ,204,607 Blinker Assembly Nos ,283, Windshield Nos ,684, Others 435,822, ,817,122 Total 1,202,884,786 1,235,585,101 Value and percentage of Raw Materials and Store Consumed Raw Material Consumable Stores Particulars % Value % Value Indigenous ,114,287, ,890,148 (96.79) (1,195,906,418) (100) (40,823,035) Imported ,597, (3.21) (39,678,683) (-) (-) Total 100 1,202,884, ,890,148 (100) (1,235,585,101) (100) (40,823,035) Details in accordance with Accounting Standard-18 "RELATED PARTY DISCLOSURE" AS PER ANNEXURE- C (i) (A) Related Parties: (B) Key Management Personnel: (a) Lumax Industries Ltd. (a) Mr. D K Jain (b) Sheela Finance Pvt. Ltd. (b) Mrs. Usha Jain (c) Deepak Auto Pvt. Ltd. (c) Mr. Deepak Jain (d) Lumax Automotive Systems Ltd. (d) Mr. Anmol Jain (e) Lumax Filter Pvt. Ltd. (e) Mrs. Shivani Jain (f) Mahavir Udyog (g) Lumax Investment and Finance Pvt. Ltd. (h) Lumax International Pvt. Ltd. (i) Bharat Enterprises (j) S L Lumax Limited (k) Lumax Tours & Travels Ltd. (l) Mr. S.C. Jain 98

101 Lumax Auto Technologies Ltd. (ii) Disclosure of Transactions between the Company and Related Parties and Status of Outstanding as on 31st March, Particulars Related Parties Key Management Personnel Transaction Purchase (i) Components/Finish Goods Purchased 343,472,863 (443,203,739) (ii) Other Raw Material Purchased 54,447 (339,889) (iii) Assets Purchased 3,641,025 (6,655,139) (iv) Job Work/Other 5,108,139 (-) Sale (v) Components/Finish Goods Sold 636,766,878 (819,940,177) (vi) Other Raw Material Sold 704,108 (137,112) (vii) Assets Sold - (6,603,568) (viii) Job Work/Other 1,145,327 (782,244) Other (Amount in Rs.) (ix) Dividend Paid 3,475,982 6,859,517 (3,475,982) ( 6,859,517) (x) Interest on Unsecured loan 671,589 - (870,659) (575,342) (xi) Managerial Remuneration - 1,437,700 (-) (1,568,400) (xii) Provident Fund - 145,200 (-) (158,400) (xiii) Commission Paid - - (-) (900,000) (xiv) Other - 49,769 (138,500) (97,717) (xv) Lease Rent 384, ,000 (204,000) (540,000) (xvi) Unsecured loan - - (6,000,000) (-) (xvii) Rent received 134,114 - (-) (-) Outstandings as on 31st March, 2009 i) Unsecured Loan Payable - - (118,003,702) (-) ii) Other Current Assets 196,239,161 - (199,085,697) (-) iii) Other Current Liabilities 87,074,681 38,047 (155,355,521) (-) 99

102 Lumax Auto Technologies Limited Registered. Office: W-230, 'S' Block, M.I.D.C., Bhosari, Pune NOTICE TO MEMBERS Notice is hereby given that the 28th Annual General Meeting of the Members of Lumax Auto Technologies Limited will be held as under: Day : Wednesday Date : 16th September, 2009 Time : 3.00 P.M Venue : Plot No. 70, Sector-10, PCNTDA, Bhosari, Pune, Maharashtra to transact the following business: ORDINARY BUSINESS: 1. To receive, consider and adopt the Balance Sheet as at 31st March 2009 and the Profit and Loss Account for the year ended on that date and the Reports of the Auditors and Directors thereon. 2. To declare Dividend on Equity Shares as recommended by the Board of Directors. 3. To appoint a Director in place of Mr. Dhiraj Dhar Gupta, who retires by rotation and being eligible, offers himself for re-appointment. 4. To appoint a Director in place of Mr. Manmohan Sachdev, who retires by rotation and being eligible, offers himself for re-appointment. 5 To consider and, if thought fit, to pass with or without modification(s), the following as an Ordinary Resolution:- RESOLVED THAT pursuant to Section 224 and other applicable provisions of the Companies Act, 1956, M/s. D.R. Barve & Co., Chartered Accountants, the retiring auditors of the company, having offered themselves for re-appointment, be and are hereby re-appointed as the auditors of the company to hold office from the conclusion of the 28th Annual General Meeting up to the conclusion of the 29th Annual General Meeting of the company at a remuneration to be fixed by the Board & reimbursement of out of pocket expenses, if any, incurred in connection with the audit." BY ORDER OF THE BOARD PLACE : PUNE DATE : June 30, 2009 MILITA BHAR COMPANY SECRETARY Notes : 1. Proxies : A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote instead of himself/herself and such a proxy need not be a member of the Company. A proxy to be effective shall be deposited at registered office of the Company not less than forty eight hours before the commencement of the meeting. A proxy shall not vote except in a poll. Proxy form is attached with the Balance Sheet. 2. Book Closure : The Register of Members and Share Transfer Book of the Company will remain closed from 12 September, 2009 to 16 September, 2009 (both days inclusive) 3. Annual Report : The member or his proxy is requested to bring their copy of this annual report to the meeting as extra copies shall not be distributed. 4. AGM-Attendance Slip : Members / Proxies should fill the attendance slip for attending the meeting. Members who hold shares in dematerialized form are requested to write their Client ID and DP ID numbers and those who hold shares in physical form are requested to write their Folio Number in the attendance slip for attending the meeting. Entry to the Auditorium will be strictly against entry slips available at the counters, at the venue and against exchange of valid attendance slip. Attendance Slip & Proxy Form attached with the Balance Sheet. 5. Dividend Entitlement : Dividend on Equity Shares, as recommended by the Directors, if declared at the meeting will be payable to those members whose names appear on the Register of Members of the Company, in the case of beneficial owners as at the close of September , as per the beneficial ownership data furnished by NSDL/CDSL for the purpose and in respect of Shares held in physical form after giving effect to all valid Shares Transfers in physical form, which are lodged with the Company before September Dividend Amount of Shareholders holding shares in Electronic Form and to those Shareholders holding in Physical Form, who have given their Bank details, will be credited to their respective Bank Account through Electronic Clearing Service (ECS), wherever such facilities are 100

103 Lumax Auto Technologies Ltd. available, soon after the declaration of the Dividend in the AGM. Dividend Warrants in respect of Shareholders holding in Physical Form will be sent through post by September 30, 2009 (tentative date). In order to avoid fraudulent encashment, such Shareholders are requested to furnish their Bank Account Number and Bank's Name so as to incorporate the same in the Dividend Warrant, immediately, if not submitted earlier. If there is any change in the Bank Account of Demat Shareholders, they are requested to intimate the same to their respective Depository Participants for their further action. Consequent upon the amendment to Section 205 A of the Companies Act, 1956 and introduction of Section 205C of the Companies Act the amount of Dividend Unclaimed or Unpaid for a period of 7 years from the date of transfer to Unpaid Account, shall be transferred to the Investor Education & Protection Fund set up by Government of India and no claim shall lie against the Fund or the Company after the transfer of dividend amount to the Government. 6. Joint Holder : In case of joint holders attending the meeting, the First Holder will be entitled to vote. 7. Change of Address : The Members holding shares in physical mode are requested to intimate to the Registrar and Share Transfer Agent- M/s Bigshare Services Private Limited immediately, if there is any change in their registered address. Demat Shareholders should inform the change of address to their respective Depository Participants. 8. Corporate Member : Corporate member intending to send their authorized representatives are requested to send a duly certified copy of the Board Resolution authorizing their representative to attend and vote at the Annual General Meeting. 9. Gift : No Gift will be distributed at the Annual General Meeting. 10 Security : Owing to security concerns, the auditorium authorities do not allow carrying inside brief cases, bags, eatables and the like. Members attending are requested to make their own arrangements for the safe keeping of their belongings. BY ORDER OF THE BOARD PLACE : PUNE DATE : June 30, 2009 MILITA BHAR COMPANY SECRETARY ADDITIONAL INFORMATION AS PER CLAUSE 49 OF THE LISTING AGREEMENT Brief details of Directors seeking Appointment/Re-Appointment. Particulars Dhiraj Dhar Gupta Manmohan Sachdev Date of Birth & Age Years Years Date of First Appointment Qualification B.Com. (H) from Delhi University (Shri Ram College of Commerce) Graduate in Arts Experience & Expertise Industrialist, has more than two decades of rich and wide experience in Manufacturing Automotive Components, Finance & Marketing. More than 50 Years experience in Paint and Lacquer Industry. Name of Public Companies in which Directorship held. Chairman/Member of the Committee of the Board of Public Companies. 1. Abhishek Auto Industries Ltd. 2. M & M Auto Industries Ltd. 3. Lumax DK Auto Industries Ltd. 4. Lumax Industries Limited. Nil Nil Nil Relationship with Directors Interse Not related with any Director Not related with any Director 101

104 LUMAX AUTO TECHNOLOGIES LIMITED Regd. Office : W-230, 'S' Block, M.I.D.C. Bhosari, Pune P R O X Y - F O R M Twenty Eighth Annual General Meeting Regd. Folio No. *Demat A/c No. DP. ID No I/We of (Address) being a member of the Company here by appoint Mr./Ms. of (Address) or failing him/her of Mr./Ms. (Address) as my/our proxy to vote for me/us on my/ our behalf at the 28th Annual General Meeting of the Company to be held at Plot No.70,Sector-10 PCNTDA, Bhosari, Pune at 3.00 P.M. on Wednesday the 16th day of September, 2009 or any adjournment 's thereof. Signed this day of 2009 Affix One Rupee Revenue Stamp Signature Note: This form in order to be valid & effective, should be duly stamped, completed, and signed and must be deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting. *Those who hold shares in demat form must quote their Demat A/c no & Depository Participant (DP) ID. No. LUMAX AUTO TECHNOLOGIES LIMITED Regd. Office : W-230, 'S' Block, M.I.D.C. Bhosari, Pune A D M I S S I O N - S L I P Twenty Eighth Annual General Meeting Regd. Folio No. *Demat A/c No. No. of Shares Held : I certify that, I am a member/ Proxy for the member of the company. DP. ID No I hereby record my presence at the 28th Annual General Meeting of the Company being held at Plot No.70, Sector-10 PCNTDA, Bhosari, Pune at 3.00 P.M. on Wednesday the 16th day of September, 2009 or any adjournment 's thereof. Members/ Proxy's name in BLOCK Letters Signature of Member/Proxy Notes : Please fill this admission slip & hand it over at the entrance of the meeting hall. Members are requested to bring their copy of the Annual Report to the meeting. *Those who hold shares in demat from must quote their Demat A/c No. and Depository Participant (DP) ID. No. 102

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