Report of the Board of Directors
 
 The Directors take pleasure in presenting the Forty Ninth Annual
 Report together with the Audited Accounts for the year ended March 31,
 2011.
 
 Financial Highlights                 Year ended        Year ended
 
                                  March 31, 2011*   March 31, 2010
                                     (Rs Million)      (Rs Million)
 
 Net Sales                               9,617.0           6,974.0
 
 Profit before Interest and 
 Depreciation                              973.0             702.0
 
 Interest                                  163.0             148.0
 
 Depreciation                              219.0             201.8
 
 Profit / Loss before Tax                  590.8             352.2
 
 Provision for Current Tax 
 (Net of MAT credit)                       142.2              55.4
 
 Provision for Deferred Tax                 15.8              35.2
 
 Profit / Loss after Tax 
 for current year                          432.8             261.6
 
 Provision for Tax for 
 earlier years                             (37.8)             21.2
 
 Prior period item 
 (Net on tax)                               17.2                 -
  
 Profit / Loss after Tax                   453.4             240.4
 
 Dividend
 
 Interim                                    21.6              21.6
 
 Final Proposed                             50.3*             39.5
 
 Dividend Tax                               11.9              10.4
 
 Transfer to / (from) General 
 Reserve                                    45.3              24.0
 
 * subject to the approval of Shareholders
 
 Dividend
 
 Your Directors had declared an interim dividend of Rs. 0.30 per equity
 share of Rs. One each (Previous Year 30%). This dividend amounted to
 Rs. 21.5 Million (Previous Year Nil). The same was distributed to
 shareholders whose names appeared on the Register of Members as on 25th
 November, 2010.
 
 Your Directors have recommended for approval of shareholders a final
 dividend of Rs. 0.70 per equity share of Rs. one each (Previous Year
 0.55 per equity share of Rs. one each). This proposed dividend would
 amount to Rs. 50.28 Million (Previous Year Rs. 39.50 Million). The
 dividend, subject to its declaration will be distributed to the
 shareholders whose name appears on the Register of Members as on July
 28, 2011.
 
 INDIAN ECONOMY
 
 During the year 2010-11 the Indian economy sustained its growth story
 of year 2009-10. Although the world economy showed signs of recovery,
 the fast growth displayed by the Indian economy was indicative of its
 inherent strength. The Indian economy grew by 8.6% in 2010-11, a rate
 which was quite comparable to growth rate of China. India has now
 emerged as worlds, top 10 countries in industrial production.
 
 The Indian automotive industry recorded the highest ever sales in
 2010-11 with all segments i.e. passenger cars, commercial vehicles and
 two-wheelers showing strong growth. The automotive sector grew by 27%
 over the previous year. This has made India the second fastest growing
 market after China. The passenger car segment grew by 27% over the
 previous year.  M/s Maruti Suzuki India Limited alone sold more than
 1.3 million units in the fiscal year. The commercial vehicle segment
 grew by a robust 33% in this year riding on strong growth of 26% last
 year. The two wheeler segment grew by 27% over last year’s growth of
 25%.  The new emission norms, rising commodity prices especially oil
 prices and a possible hike in interest rates would affect the industry.
 The industry is expected to consolidate and grow overall by 15% in
 2011-12 and beyond.
 
 PERFORMANCE
 
 The total sales at Rs. 9617 Million, (Previous Year Rs. 6974 Million),
 registered a growth of 38%, which is higher than the industry trend of
 27%. While the Profit Before Tax of Rs. 591 Million (Previous year Rs.
 352 Million) recorded a growth of 68%, the Profit After Tax of Rs. 453
 Million (Previous Year Rs. 240 Million) grew by 89%. As a result, the
 Earnings Per Share grew significantly to Rs. 6.31.
 
 The restructuring of the organization in terms of manpower and the
 various cost reduction measures helped the Company improve its
 efficiency over the previous year. EBITDA for the year was Rs. 973
 Million (10.12% to net sales) against Rs. 702 Million (10.06% to net
 sales) in the previous year.
 
 EXPORTS
 
 The total exports of the Company grew at 132% from Rs. 126 Million to
 Rs. 292 Million in the current year. The growth was due to expansion of
 OE as well as exports for replacement market.
 
 After Market exports recorded a growth of 32% in the current year.
 While there was substantial improvement in market share in 2/3 wheeler
 segments in Sri Lanka and Bangladesh, the Company entered the 3 and 4
 wheeler segments in Egypt and Turkey for the first time. The Company
 also focused on private branding business in Australia and Singapore.
 Export to OE customers i.e Renault Iran registered a significant
 increase.
 
 Both OE and After Market exports will be the focus area for growth in
 the coming years.
 
 OPERATIONS
 
 The company has undertaken a significant facility restructuring
 exercise during the year which included:
 
 1.  At Parwanoo: The Parwanoo Plant has initiated in the year expansion
 plans for meeting higher demands all round. The capacities for
 commercial vehicle business would be 3 Lac numbers per month.
 
 2.  At Khandsa: A dedicated facility for Maruti-Suzuki India Ltd., had
 undergone expansion for meeting the increased requirement from MSIL.
 The plating capacity was augmented to its full potential and has also
 started supplies to M/s.  MANDO Chennai for their requirements of
 piston rods. Major initiatives were taken and continue to be planned
 for productivity, quality and delivery improvements.
 
 3.  At Chakan: The layout of the Plant has been changed to improve
 material flow. The new state of art plating facility has been
 commissioned successfully and has eliminated lot of material movement
 as also improved quality and reliability.  Environment friendly water
 base painting system has also been installed. All these activities have
 been undertaken while the plant kept meeting the demands of OEM
 customers.
 
 Casting Facility
 
 The output has steadily increased during the year with improved quality
 standards.
 
 4.  At Ambad: Plant received the prestigious recognition of “BAL TPM
 Excellence Award” from its major customer ‘BAJAJ’. It received
 approvals from OEMs like Piaggio for export possibilities to Europe.
 The Plant has received continued appreciation from its valued
 customers.
 
 5.  At Hosur: Capacity augmentation was undertaken to increase plant’s
 capacity to 1.5 lac front fork per month and 4.5 Lac shox per month.
 The focus has been on quality and productivity.
 
 6.  At Dewas: The plant is projected to become a major source for
 exports for commercial vehicle products.
 
 Fixed Deposits
 
 Fixed deposits at the end of the year were Rs. 318.34 Million (Previous
 year Rs. 357.1 Million).
 
 Technology Tie -up
 
 The Company continues its association with Technology partners KYB,
 Japan and KYBSE, Spain in four-wheelers and two- wheelers, Arvin
 Meritor for commercial vehicles and Yamaha Motor Hydraulic System
 Company Limited for two-wheelers.
 
 The Company has evolved an in-house state of the art Research and
 Development facility at Chakan which has design and development
 competency to meet the latest requirements of the customers. This setup
 has been recognised by DSIR during the year.
 
 Collaborators
 
 Your Company wishes to place on record its appreciation of the
 continued support extended by its collaborators. There were fruitful
 discussions with the Collaborators during the year on several areas of
 mutual cooperation.
 
 Conservation of energy, technology absorption and foreign exchange
 earnings and outgo
 
 As required under Section 217(1)(e) of the Companies Act, 1956, read
 with the Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules 1988, information relating to the foregoing matters is
 given by way of an Annexure to this Report.
 
 Directors
 
 In accordance with Article 123 of the Articles of Association, Mr.
 Rajeev Vasudeva and Mr. Gurdeep Singh retire by rotation and being
 eligible, offer themselves for re-appointment. The Board of Directors
 also appreciated the contribution of the retiring directors i.e. Mr.
 Prakash Kulkarni and Ms. Padmini Khare Kaicker from the Board of the
 Company. The Board of Directors also welcomed Mr. Manoj Kolhatkar and
 Mr. Mahendra Goyal on the Board of the Company.
 
 Director’s Responsibility Statement
 
 Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
 the Directors confirm that:
 
 1.  in the preparation of the annual accounts, the applicable
 accounting standards have been followed;
 
 2.  appropriate accounting policies have been selected and applied
 consistently, and they have made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at March 31, 2011 and of the Profit and
 Loss Account for the year ended March 31, 2011;
 
 3.  proper and sufficient care has been taken 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;
 
 4.  the annual accounts have been prepared on a going concern basis.
 
 Corporate Governance
 
 A separate section on Corporate Governance is included in the Annual
 Report and the certificate from the Company’s Auditors confirming the
 compliance of conditions of Corporate Governance as stipulated in
 Clause 49 of the listing agreement with the Stock Exchanges is annexed
 thereto.
 
 Auditors
 
 Messers Price Waterhouse & Co., Chartered Accountants, Auditors of the
 Company will retire at the conclusion of the ensuing Annual General
 Meeting and are eligible for re-appointment. They have expressed their
 unwillingness to continue as Auditors after the Conclusion of this
 Annual General meeting. The Board has recommended M/s B.K. Khare & Co.
 Chartered Accountants to be appointed as Auditors from the conclusion
 of this AGM to the Conclusion of next AGM. M/s B.K. Khare & co. has
 furnished a Certificate to the effect that the proposed re-appointment,
 if made, will be in accordance with sub-section (1B) of Section 224 of
 the Companies Act, 1956.
 
 Employee Relations
 
 Employee relations were cordial at all locations. Long Term agreements
 with the Unions have been concluded at the Ambad and Dewas Plants,
 which are the only unionized plants in the Company. The Agreements
 resulted in higher productivity.
 
 Your Company is undertaking initiatives to increase Human Capital by
 approximately 20% from current levels. A number of initiatives are
 being taken for all employees - Operating Engineers as well as staff
 for enhancing “employee value”. This includes skill enhancement,
 training and soft skills. Coaching/guidance for selected talent is also
 included. This initiative is aimed at preparing the Company for high
 growth in the coming years.
 
 The Directors are pleased to record their appreciation of the services
 rendered by the employees and staff at all levels.
 
 Particulars of Employees
 
 As required under the provisions of Sub-Section (2A) of Section 217 of
 the Companies Act, 1956 read with the Companies (Particulars of
 Employees) Rules 1975 as amended, particulars of employees are set out
 in the Annexure to the Directors Report. As per the provisions of
 Section 219 (1)(d)(iv) of the said Act, these particulars would be made
 available to any shareholder on request.
 
 Acknowledgements
 
 Your Directors wish to thank the Collaborators, Technology Partners,
 Financial Institutions, Bankers, Customers, Suppliers, Shareholders and
 Employees for their continued support and co-operation.
 
                                       For and on behalf of the Board
 
                                                        Deepak Chopra 
                                                             Chairman
 
 Place : Mumbai 
 Date : May 27, 2011