Dear Shareholders,

Your Directors present the Fourteenth Annual Report on the business and operations of the Company and the audited financial statements for the financial year ended 31st March, 2013.

FINANCIAL RESULTS

Rs. in million

INFORMATION ON BOARD MEETING PROCEDURE AND ATTENDANCE DURING THE FINANCIAL YEAR 2012-13

In terms of manner, quality and disclosure of information for convening and conducting of Board meetings, the Company adheres to the Secretarial Standards recommended by The Institute of Company Secretaries of India.

The Board members are provided with detailed agenda in advance along with relevant supporting information and documents on various matters related to the business performance of the company, especially those that require deliberation. The Board is provided an action taken report on the decisions and recommendations given at its previous meeting(s). A summary of discussions at Committee meetings of the Company with recommendations thereat and also a brief on important matters decided at the board meetings of its subsidiary companies forms part of the agenda papers. Presentations are also made to the Board by functional heads on matters of strategic nature.

A yearly calendar of Board meetings is decided to review the quarterly financial results and other business matters based on the common convenient dates of the Directors. In case of business exigencies, resolutions are passed by circulation.

Draft minutes are circulated to the Board/ Committee members for their perusal and comments thereon. The minutes so finalised are recorded within the statutory time limit and are approved at the succeeding meeting of the Board / Committee.

During the year under review, seven Board meetings were held on the following dates: 19th April, 2012,29th June, 2012, 19th July, 2012, 29th August, 2012, 2nd October, 2012, 27th November, 2012 and 27th February, 2013.

A statement giving information about the Board members, their attendance at the Board meeting and the number of other directorships held by them is given below:

@Excludes foreign companies

COMMITTEES OF THE BOARD

Audit Committee

The Committee comprises non-executive directors. The Chairman of the Committee, Mr. Partho Datta, is a member of The Institute of Chartered Accountants of India. Mr. Soumendra Basu and Mr. Asanka Rodrigo are the other members of the Committee.

During the year 2012-13, the Committee met three times, on 29th June, 2012, 27th November, 2012 and 27th February, 2013. The meetings were attended by all its members. The Company Secretary acts as secretary to the Committee.

The Chairman of the Committee briefs the Board of Directors on the discussions at its meetings. The minutes of the Committee meetings are circulated to the Board of Directors, for a full disclosure of the discussions at these meetings.

The Company has an independent in-house internal audit function with adequate professional resources and skills, aligned with the Company's nature, size and business operations. The Head of Internal Audit reports directly to the Managing Director.

During the year under review, the Board of Directors adopted a charter for the Audit Committee, which inter alia governs the authority and responsibility of the Committee. The terms of reference of the Committee broadly covers:

a)Overseeing the financial reporting process to ensure fairness, transparency, sufficiency and reliability of financial statements, including recognition, recording and reporting of financial information in keeping with the applicable laws;

b)Reviewing the adequacy of internal control systems;

c)Recommending appointment and removal of Internal Auditor and outsourced Internal Auditors for the Company's overall operations and its auditable units;

d)Discussing scope of audit and audit plans on a regular basis with Statutory and Internal Auditors;

e)Monitoring and reviewing the direction and quality of Internal and Statutory Audit;

f)Reviewing with the management periodical and annual financial statements before submission of the same to the Board. This will include:

i) Any changes in accounting policies and practices or law/ accounting standards

ii) Major accounting entries based on exercise of judgment by the management

iii) Non-recurring, abnormal and one-time entries

iv) Qualification, if any, in the draft audit report

v) Significant adjustments arising out of audit observations

vi) Compliance with applicable accounting standards

vii) Related party transaction.

g)Reviewing the security andcontrol aspects of the Information Technology and Connectivity systems;

h)Reviewing compliance with Internal and Statutory Audit Reports and examine reasons for substantial defaults and delays in implementing audit recommendations;

i)Reviewing findings of internal investigations involving matters of fraud, financial integrity and fiduciary compliance;

j)Reviewing Management Representation Letters issued to Statutory Auditors.

Finance Sub-Committee

The Finance Sub-Committee of the Company comprises Mr. Naresh Chandra, Chairman, Mr. Anurang Jain and Mr. Asanka Rodrigo as the members of the Committee. This Committee is entrusted with the authority to meet the fund requirements of the Company through borrowings from banks / financial institutions. As mandated by the shareholders, the aggregate amount of borrowings, outstanding at any time, shall not exceed Rs. 12,500 million.

During the year 2012-13, the Committee met three times on following dates, 16th August, 2012, 21st December, 2012 and 13th February, 2013.

AUDITORS

The Company's Statutory Auditors, M/s. Deloitte Haskins and Sells, Chartered Accountants (ICAI Registration No. 117366W), hold office up to the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for appointment. They have furnished requisite certificate to the effect that their appointment, if approved by the shareholders at the ensuing Annual General Meeting, will be in conformity with the Companies Act, 1956.

Your Directors recommend their appointment.

COST AUDITORS

As notified by the Ministry of Corporate Affairs vide order no. F. No. 52/26/CAB  2010 dated 6th November, 2012, cost audit is mandatory for the Company with regard to the following product groups, viz. electrical energy, hand tools and parts and accessories of vehicles.

Pursuant to Section 233B of the Companies Act, 1956 and subject to the approval of Central Government, Mr. Jayant B. Galande, Cost Accountant (Membership No. M-5255) is appointed as Cost Auditor of the Company for the financial year 2013-14.

The cost audit and compliance reports of the Company for the financial year 2011-12 were filed in XBRL format with the Central Government on 22nd December, 2012.

FIXED DEPOSITS

During the period under review, the Company has not accepted any deposits from the public.

AWARDS AND RECOGNITIONS

It has always been the Company's endeavour to set a benchmark both in terms of products and processes in the area of its business operations. We take pride to share that your Company received the following awards and recognitions from accredited institutions and its major customers:

a)  SAP ACE Award won for Customer Excellence, 2012.

b) Regional Award from EEPC India qualifying as Star Performer in the category of BICYCLES AND PARTS  LARGE ENTERPRISE for the year  2011-12.

  c) The plant at B-1/3, Chakan has received ISO 14001:2004 and OHSAS 18001:2007 certificates.

 d)  The plant at Pantnagar has received Bajaj Gold Sustenance Award for Quality.

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors' Report for the year ended 31st March, 2013

NOTES:

1.    Mr. Anurang Jain, Managing Director, is a relative of Mr. Naresh Chandra, Chairman

2.    Designation of the employee indicates the nature of duties.

3.    Experience includes number of years' services both within the Company and elsewhere, wherever applicable.

4.    The nature of the above employment is contractual.

5.    Remuneration includes salary, ex-gratia, allowances, reimbursement of medical expenses, variable pay and the Company's contribution to provident fund.

6.    The employees are also entitled to gratuity and superannuation, in addition to the above remuneration.

Expenditure on R and D:

The expenditure on research and development during 2012-13 and the previous year was:

Rs. in million

HUMAN RESOURCE MANAGEMENT

Your Company treats its employees as valuable asset. The Company believes that with passage of time an employee becomes more valuable to the organization by his enhanced skill levels and knowledge. A dedicated Human Resource team puts its best to attract and retain employees with high and positive morale. The Company strives to attract the best talent in its area of operations.

The Company periodically undertakes significant investment in the learning and development of the employees at all levels. In the era of competition it becomes vital to have skilled workforce at all levels. Many of our employees have attended external training programmes which not only enhance their knowledge but also benefit the Company at large.

INDUSTRIAL RELATIONS

During the period under review the industrial relations remained cordial.

The Company signed a Wage Settlement Agreement for its plant located at Manesar, for a term of three years effective from 1st October, 2012 until 30th September, 2015.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank and place on record their appreciation for all the employees at all levels for their hard work and dedication during the year. The Directors would also like to thank the shareholders, employee unions, customers, vendors, dealers, bankers, government authorities and all the other business associates for their continued support extended to the Company and posing their confidence in the management.

Technology Absorption, Adaptation and Innovations

(i)  The details of Technical Assistance/Collaboration agreements entered into by the Company are given hereunder:

ii)    Benefits derived as a result of the above efforts:

(a)  Customer satisfaction,

(b)  Edge over competitors,

(c)  Improving productivity and quality,

(d)  Improved process engineering capabilities for reducing cost.

Total foreign exchange earnings and outgo is given below:

Rs. in million

The details of foreign exchange earnings and outgo are given in Notes 41 to 44 to the financial statements, which form part of the Annual Report.

Please Refer Disclosure in board of directors report explanatory Text Block

For the financial year 2012-13, your Directors recommend dividend as follows: Preference Shares As per the issue terms of redeemable preference shares (RPS), dividend of Rs. 0.90 ps. is payable on 1,680,000 RPS of face value Rs. 10 each. This amounts to Rs. 1.77 million (inclusive of tax Rs. 0.26 million). Equity Shares Dividend of Rs. 0.80 ps. (20%) (previous year Rs. 0.75 ps. per share) per equity share of Rs. 4 each. The dividend, if approved by the shareholders, will result in an outgo of Rs. 41.14 million (previous year Rs. 38.85 million), which includes tax on dividend aggregating to Rs. 5.96 million.

a) Energy conservation measure taken: (i) Wind Power generation: During the year under review the wind mills installed by the Company at Jaisalmer, Satara and Supa generated 8,232,863 units of electricity (including 5,606,839 units of captive consumption). The Company earned an income of Rs. 58.50 million (including captive consumption Rs. 44.20 million) from sale of wind power generation. (ii) Summary of initiatives undertaken by the Company's plants for conservation of energy: 1. Replacement of 150W/250W Metal halide lamps with new design 45W LED for street light lamps and use of transparent sheets for the roof in various plants to use natural light during day time for reduction in electricity consumption. 2. Investment in express feeder for plants at Aurangabad to receive uninterrupted supply of electricity thereby saving fuel cost of diesel for DG set. The uninterrupted power supply also enabled smooth running of machinery and equipments and thereby achieved improved productivity and reduction in rejections. 3. Purchase of power from third party to bridge shortage during peak period. Apart from being cost effective and it also minimises consumption of diesel. 4. As a step towards green energy the plants manufacturing casting switched to PNG from LPG fuel thereby saving of power at source. 5. Capacitor banks were installed in the utility section and machine shop at various plants for further improvement of the Power Factor to 0.998 or unity to achieve saving in electricity consumption and to avail Power Factor Incentive from State Electricity Board. 6. Horizontal deployment of Variable Frequency Drives in paint shops and pressure die casting machines to reduce power consumption. 7. Rationalising the wattage of connected loads to motors and heating elements used in various machines. 8. Measures were taken for reduction of electricity consumption by providing energy efficient Breeze Air Washer. 9. Various measures were taken to for reduction of compressed air energy such as: " Modification of air ducts of few CNC/VMC machines with solenoid valve to ensure air flow only when machines are operating, " Provision of foot switches on air gauges, " Air Leakage arresting. 10. Horizontal deployment for reduction of holding furnace energy by providing lids on each furnace with proper insulation and regular monitoring. 11. Outsourcing the process of melting of metal ingots for casting process deployment. This has resulted in saving on the energy cost to the extent of about 3-4% by eliminating one intermediate melting process. 12. Energy efficient pumps have been used to reduce power consumption. 13. Rectifiers used for the plating plant resulted in energy saving of 15% apart from space saving. A horizontal deployment in other manufacturing unit is being evaluated considering the advantages. (iii) Additional investment proposals, if any, being implemented for reduction of consumption of energy: 1. Commonisation of cooling towers at centralized location at the plant at E-92, Waluj (one no. in place of two nos.) with savings target of 30% on energy cost. 2. Replacement of the 500 Kg re-melting furnace with a new furnace of capacity 750kg to improve efficiency of furnace oil from 9.5 to 11 kg/litre. 3. Installation of recuperator at LPDC plant to recover heat losses. 4. Installation of tilting type crucible furnace for higher operational efficiency thus saving energy. 5. Provision of auto switch off /on devices for street lights and shop floor lights. 6. Avoidance of using compressed air for shop floor cleaning. 7. Provision of gravity dosing furnaces in place of holding furnaces to reduce energy consumption in casting plants. 8. Changing plant layout for efficient operations which will result in usage of five holding furnace for liquid metal storage instead of six. 9. Implementation of measures for processing of aluminum melting, resulting in lower consumption of furnace oil. 10. Provision of heating and cooling units in die-casting plants to minimize heat losses resulting in thermal balancing, longer die life, energy savings, improved productivity and lower rejections. (iv) Impact of measures above for reduction of energy consumption and consequent impact on cost of production of goods: The aforementioned measures have achieved saving in consumption of fuel such as furnace oil, electricity and diesel thereby lowering energy costs. This also helped increase in productivity and smooth operations at factory. (v) Total energy consumption and energy consumption per unit of production as per Form A of the Annexure to the rules in respect of industry specified in the schedule thereto: Not applicable as the Company is not covered under the Schedule of specified industries.

Refer to Disclosure in board of directors report explanatory text block

AUTOMOTIVE INDUSTRY SCENARIO

The Indian automotive industry is considered to be one of the fastest growing industries of the last decade. The industry has ranked eleventh in the manufacture of passenger cars, fourth in the manufacture of commercial vehicles and second in the manufacture of two wheelers in the world. The industry was valued at about USD 65 billion in 2012, contributing to about 3.5 - 4% to the country's GDP. (Source: report of Frost and Sullivan)

Unlike the double digit growth witnessed by the industry during the previous year, the year under review registered de-growth. This decline is a result of a number of adverse factors ranging from the global economic turmoil emanating from Europe, to domestic factors such as increasing fuel prices, high input costs, persistent inflation and high interest rates. The slowdown in economy and poor agricultural output affected the urban purchasing power and the rural disposable income, respectively.

During the year the passenger car sales dipped by 6.7% being the worst performance during the last decade. The medium and heavy commercial vehicles also faced a similar situation recording a 23.2% decline in sales, while light commercial vehicles fared well with 14% growth in sales, sports utility vehicle segment ruled the market with a phenomenal increase of 52.2% in sales.

The market remained flat with respect to the sales of two and three wheelers recording a nominal growth of 2.9% and 4.9%, respectively, with an entirely different product mix as compared to the previous year. Motorcycles which led the growth last year were replaced by scooters with a growth of 14.2% and sales growing to 2.92 million from 2.55 million during the period. The market share of motorcycles reduced to 72% from 73% in FY 2012-13, while the scooter market increased to 23% from 21%. (source: SIAM, ICRA Research)

AUTO COMPONENT INDUSTRY

The auto component industry has followed a pattern of crests and troughs in line with the automotive industry. The market which witnessed an uptrend from 2009-10 until 2011-12 is now going through a declining phase with lower profit margins and tepid growth.

The demand for auto components is primarily linked to the growth of automotive industry, largely influenced by demand from domestic OEMs and its corresponding demand drivers.

Research analysis estimates marginal improvement in the economic scenario with anticipated lowering of inflation and that of normal monsoons, which is expected to result in the two wheeler industry growth by around 8-9% in the FY 2013-14 with motorcycle segment likely to grow in a range of 6-7% and scooter segment at 13-14%.

The Union Budget of 2013 has also provided an impetus to the industry by giving an extension of five years for weighted deduction of 200% on research and development (R and D) expenditure.

COMPANY PERFORMANCE

During the year 2012-13 the Company faced weak market conditions due to sluggish growth in the automotive industry which mirrored in its overall operational and financial performance. Its major customers, in two and three wheeler automobile segment, were confronted with economic slowdown resulting in significant reduction in sales and also tapering of capex cycle.

The revenues registered a nominal decline of 1.7% at Rs. 27,392.86 million as compared to Rs. 27,862.47 million during the corresponding previous year. The profit before finance costs, depreciation, exceptional items and extraordinary expenses is Rs. 3,573.90 million which records a decline by 3.5% primarily on account of inflationary impact of fixed cost and increase in energy cost.

Although the Company secured orders for high volumes from existing as well as new customers, actual production by OEMs was much below their scheduled plans. Lower production by OEMs negatively affected the off take of components, which coupled with increased input and energy costs put pressure on the Company's operating margins, resulting in lower profitability. This pull back was partially compensated by introduction of new products and certain austerity measures taken by the Company to reduce operating costs.

Despite a slowdown in the auto component industry, the aftermarket business gave a commendable performance with the Company topping in terms of sale of its shock absorbers for two wheelers in the replacement market in India. Aftermarket business recorded revenue of Rs. 1,306 million, a growth of 13.2% over the previous year. Revenue from domestic aftermarket sales was Rs. 913 million, whereas exports stood at Rs. 393 million, together accounting for 4.8% of the total revenue of the Company.

MANAGEMENT ANALYSIS OF THE BUSINESS OPERATIONS

Your Company has state-of-the-art facilities for manufacture of die casting, braking and suspension systems. These facilities cater to the dominant OEMs in the two and three wheeler segment.The Company continues to align with customers' strategic plans with its steadfast focus on their product requirement and technology upgrade needs.

Aluminium is emerging as the preferred metal for automotive applications across the globe with growth driven by demand for lighter cars, higher fuel efficiency requirements and stricter fuel emission standards. Aluminium die casting is, therefore, emerging as a profitable venture in the industry. This being highly capital intensive, there are limited organised players in the market who are well equipped to meet the demand of OEMs. Your Company has an advantage of being one of the leading die casting manufacturers in India.

Benchmarking itself towards excellence by delivering high quality products at competitive prices, your Company believes in partnering with technology leaders in its product domain. Taking this forward, an alliance has been entered into with WP Suspension, Austria, a global technology leader in suspensions, for developing high performing suspension components for better driving comfort for two wheelers. The Company plans to foray in four wheeler brake manufacturing in the forthcoming year. Towards this, a technology assistance agreement has been entered into with BWI North America Inc., USA to manufacture four wheeler brake assemblies.

The Company introduced technologically upgraded solutions for premium motor cycles which were well accepted by its customers. These efforts culminated in tapping opportunities created in the segment of motorcycles and ungeared scooters.

Excellence through Total Productivity Management is being practiced at all plants. Operations at shop floors undergo continuous process improvement through Kaizen. It has been a constant endeavour to sharpen the Company's focus on lowering costs, offering better quality products, improving operational efficiency, delivery commitments, in order to serve the customer better.

Technology and innovation are assumed as critical factors for sustained long-term growth and therefore the R and D centres of your Company relentlessly aim to offer complete solutions in form of design to service thereby enlarging its offerings to new product platforms developed by OEMs.

Despite the unorganized sector dominating the domestic spare parts' market, the aftermarket business posted a satisfactory growth of 13.2%. The Company focused on penetration in rural market and strengthened its position overseas by initiating brand registration and widening its distribution network. The year saw expansion of export market in the African continent.

The automotive industry grappled with uncertainty during 2012-13, which the Company attempted to counter with its strategy of profitable growth. The Company aims to drive this strategy through improvement in vendor management, quality with timely delivery, reduction of early on line rejection and customer returns.

Your Company is well positioned to overcome the vagaries of the uncertain market conditions and shall continue its concerted efforts to be a preferred tier I supplier to leading OEMs in India in its product portfolio.

Revenue break-up

During the year under review, the distribution of revenue from the product mix remained almost the same as that of the last year.

Break-up of products sold is as under:

Cost

Material costs remained almost static compared to the previous year at 65.22% to total revenue. Employee benefit cost rose to 5.19% from 4.42% at Rs. 1421.29 million largely on account of increments and impact of agreement with workmen.

During the year under review, the finance cost came down to Rs. 841.12 million as compared to Rs. 865.39 million in the previous year.

Gross Block

Outlook

Although the auto industry is normally fast paced, the overall growth prospects are expected to be tepid for the financial year 2013-14, with high volume segments such as two and three wheelers already reporting decline or stagnation in the early months of the current year. However, despite this trend, automotive OEMs are gearing up aggressively to grow, both in domestic as well as overseas markets. With the average replacement cycle of vehicles reducing, the demand of new vehicles is expected to rise in the short term, resulting into better business prospects for the automotive industry.

India has proved to be a high potential market for automobile segment on account of low penetration, high proportion of youth population with growing disposable income, low cost of service and various government incentives including weighted deduction on R and D spend.

Your Company is well equipped to tap the business opportunities created in the industry. The Company is a complete solutions provider to its customers and makes efforts to provide first time right quality products at most competitive price. With its presence in the industry for over two decades, the Company has built up adequate infrastructure and has collaboration with leading technology partners to provide upgraded products. It has strategically located manufacturing facilities within the vicinity of auto hubs, which significantly reduces logistics costs.

The aftermarket business is aggressively geared up to increase its market share in both domestic as well overseas markets. In the forthcoming year, the Company plans to focus on strategies to penetrate rural market, which is anticipated to be almost 45% of the total two wheeler markets in India (Source: Two Wheeler Market in India by RNCOS based on statistics for the FY 2011). The Company shall continue its concerted efforts to gain foothold in countries in ASEAN region, Africa and South America.

BUY-BACK OF EQUITY SHARES

On 19th July, 2012, pursuant to the approval of the Shareholders, the Company offered to buy-back 1,000,000 fully paid up equity shares of the Company of Rs. 4 each. In response to the offer, 610,604 equity shares tendered were bought back by the Company.

Consequent to the buy back, the holding of promoter and promoter group stood at 86.28%, whereas Actis Investment Holdings No. 122 Ltd. holds 13.72% of the total paid up equity capital of the Company.

During the financial year, the Company has bought back 1,443,643 equity shares which includes 833,039 equity shares from the earlier buy-back offer approved by the Board of Directors at its meeting held on 19th April, 2012. Consequently, an amount of Rs. 418.28 million has been reduced from the Securities Premium Account. The paid-up equity share capital of the Company stands reduced to Rs. 175.83 million as on 31st March, 2013. The total percentage of the shares bought back is 4.04% of the paid-up equity share capital of the Company.

SUBSIDIARIES

Domestic

High Technology Transmission Systems (India) Private Limited - (HTTS), subsidiary of the Company is engaged primarily into manufacture and sale of clutch assemblies, continuous variable transmissions and friction plates.

The general slowdown in the auto industry did not adversely impact the business performance of HTTS. The total revenue of HTTS increased marginally by 9.8% to Rs. 2,884.95 million (previous year Rs. 2,626.55 million) which is attributed to new business acquired during the year. The profit after tax, however, posted a nominal decline of 1.83%, which was mainly due to partial withdrawal of tax exemption available on profits generated at Pantnagar. Till the financial year 2011-12, HTTS enjoyed a tax holiday of 100% which was reduced to 30% on the income from the financial year 2012-13.

Overseas

Endurance Overseas S.r.L., Italy (EoSrl): EoSrL, a wholly-owned subsidiary company of the Company is a Special Purpose Vehicle incorporated in Italy, for the purpose of making strategic overseas investments.

During the year under review, your Company infused equity of Euro 2 million to meet the capital adequacy requirement as well as to fund the cost of acquiring the residual stake of 49% of Endurance Fondalmec SpA.  EoSrl had acquired the stake in Endurance Fondalmec SpA in 2009-10 for Euro 14 million against which a total amount of Euro 12 million has been paid in tranches.

During the financial year ended 31st March, 2013, the total income of the EoSrl was significantly higher at Euro 1.2 million over the previous year's income of Euro 0.2 million. With a view to reinforce financials of the subsidiary, measures were taken to improve debt-equity ratio by conversion of the shareholders' loan as on 30th June, 2012 and part of EoSrl's reserves into share capital. Shareholders' loan of Euro 3.47 million (including interest) and reserves of Euro 2.04 million were converted into share capital.

Subsequent to the investment of Euro 2 million by your Company and the said measures taken to reinforce the equity and financials, the total paid-up share capital of EoSrl stood increased to Euro 15.3 million as on 31st March, 2013.

With an objective of strengthening foothold in the European markets, the management of your Company's operating overseas subsidiaries has been centralized at EoSrl. Apart from making strategic investments, EoSrl shall also provide management support services for certain critical functions to the overseas entities.

As a long-term strategic move and in order to strengthen the presence of Endurance Group in the existing segment of automotive components in Europe, EoSrl has acquired 15% stake in F.O.A. SpA, Italy (FOA), a tier I supplier engaged in the activity of aluminium die casting, machining and assembling. FOA has capabilities to provide assistance in the production of large size and complex die casting components which are the target products for the commercial evolution of the group companies in Europe.

Endurance Fondalmec S.p.A,, (EF SpA) is a step down operating subsidiary of the Company in Italy and is primarily engaged in the production of mechanical components for the automotive sector such as engine, transmission groups, machining and assembling of components of aluminum alloys, cast iron and steel.

During the year ended 31st March, 2013, EF SpA posted a growth of 2.3% achieving total income of Euro 83.4 million (USD 107.38 million) compared to Euro 81.6 million (USD 112.26 million) in the previous year, despite unfavorable conditions in the automotive market in Europe. Profit after tax was Euro 3.03 million (USD 3.9 million) against the previous year's profit of Euro 2.86 million (USD 3.93 million). The subsidiary paid a dividend of Euro 1.485 million on the equity share capital, translating to 49% dividend payout. The figures reported are as per local GAAP.

Amann Druckguss GmbH(Amann), a wholly owned subsidiary based in Germany, carries out manufacturing operations of high pressure die casting and machining components. It caters to large automotive OEMs in the German auto market.

The subsidiary faced economic slowdown and withdrawal of some orders by a customer. Despite the adversities this subsidiary reported a total income to Euro 41.8 million (USD 53.8 million); albeit this was lower by 11.9% compared to Euro 47.34 million (USD 63.38 million) in the previous year. Inventory management contributed to support the bottom-line. It posted a profit after tax of Euro 2.17 million (USD 2.79 million), compared to the previous year's profit of Euro 3.927 million (USD 5.40 million). The figures reported are as per local GAAP.

DISSOLUTION OF JOINT VENTURE WITH MAGNETI MARELLI S.P.A., ITALY

The Company had entered into a joint venture with Magneti Marelli S.p.A. (formerly known as Magneti Marelli Holding S.p.A.) (MM) in June 2008 for manufacturing, assembling and marketing shock absorbers, struts and gas springs for four and above wheeled vehicles. Accordingly, Endurance Magneti Marelli Shock Absorbers (India) Private Limited (EMM) was incorporated in July 2008. The products to be manufactured by EMM were primarily to cater to passenger cars.

In order to focus on the core business of components for two and three wheelers and small LCVs, the Board of your Company decided to exit from this joint venture. It was decided to sell the Company's entire 50% shareholding to MM at a consideration of Rs. 160.75 million and towards this a Share Purchase Agreement (SPA) was entered on 10th October, 2012 for dissolution of the joint venture. Consequently, the Company transferred its shareholding on 17th October, 2012, to MM and its nominee directors ceased to be the directors of EMM, thus bringing an end to this alliance.

To continue availing technical expertise from MM, your Company entered into a Licence and Technical Assistance Agreement with Magneti Marelli COFAP Companhia Fabricadora de Pecas, an affiliate of MM for manufacture of shock absorbers for the four wheeled vehicles to be launched by of one the leading domestic two wheeler manufacturers.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements, prepared in accordance with the applicable Accounting Standards issued by The Institute of Chartered Accountants of India, forms part of this Annual Report.

By a general exemption vide circular no. 2/2011 dated 8th February, 2011 the Ministry of Corporate Affairs, Government of India, under Section 212(8) of the Companies Act, 1956 has permitted companies to not annex to this Report, the Balance Sheet, Profit and Loss Account and other documents of all its subsidiaries. However, the Annual Accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company who desires in obtaining the same. These will also be kept for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The audited consolidated financial statements presented by the Company include the financial results of its subsidiary companies. In addition, a statement of summarized financials of all subsidiaries as prescribed by the Ministry of Corporate Affairs is attached to the Annual Report.

DIRECTORS

During the year under review, there was no change in the Board of Directors.

During the period under review, the Company made export of automotive components to Original Equipment Manufacturers in European countries. The exports of spare parts in aftermarket were made to countries in Latin America, Middle East, Asia and Africa. Total foreign exchange earnings and outgo is given below: Rs. in million . Also refer Disclosure in board of directors report explanatory text block.

(A) Research & Development (R & D) The Company has three well established R & D centres recognised by the Department of Scientific and Industrial Research (DSIR) for each of its' business verticals viz. casting, brakes and suspension. This year the R & D activities were focused on brakes and suspension business verticals being proprietary in nature. Developing in-house capability for CAE (Computer Aided Engineering) Analysis & Experimental Data Acquisition & Analysis also was in focus. This has helped gain higher customer confidence in the Company's capabilities to offer optimised products. Moreover, this is one of the capabilities, customers expect a tier I auto component manufacturer to develop in-house. With an aim to strengthen and enhance the R & D capabilities certain organisational changes were undertaken at the helm of the function. Also, as a commitment towards this, a detailed technology road map has been chalked out for the next three years. The R & D department has also established an IP (Intellectual Property) Cell to enlarge and protect the Company's IPR. R & D Centre at B-1/3, Chakan (Die Casting Components): (1) Specific areas in which the R & D activities are carried out are: i. Product Life Cycle Management (PLM) licenses are deployed in manufacturing plants for integration of engineering data between R & D and manufacturing. ii. Humidity chamber is developed and commissioned to do accelerated testing. iii. Thermography camera is used for die design and development to reduce the product defects and development time. iv. Developed in-house process for induction heat treatment of fork pipes. v. Jointly with the team of OEM worked on conversion of Cast Iron Gear Box Housings that presently is produced by gravity die casting (GDC) process to high pressure die casting (HPDC). (2) Benefits derived as a result of above R & D activities: i. Engineering drawings are available on line across all manufacturing plants through PLM software. ii. Humidity chamber is used to conduct accelerated testing for process validation. iii. Induction heat treatment has improved the fatigue life of the front fork, meeting global customer requirement. iv. Enables customer to optimize the product design for light weighting and generate new business opportunities. v. Manufacture of Cast Iron Gear Box Housings through HPDC process resulted in a substantial cost saving in finish machined casting, 67% for the front housing and 61% for the rear housing. (3) Future plan of action: i. Automation and additional measurement capabilities in metallurgical lab. ii. RFQ management, supplier integration and costing capabilities to be added in PLM. iii. Die life improvement. R & D Centre at K-226/2, Waluj, Aurangabad (Braking Assemblies and Parts): The Company has entered into a technical agreement with BWI North America Inc., USA for design & development of four wheeler brakes for light commercial vehicle (LCV). (1) Specific areas in which the R & D activities are carried out are i. Drum Brake design and development for four wheeler LCV was done. Mule samples were prepared and validated. ii. Tandem Master cylinder with remote reservoir design and development was done for small four wheelers like LCV. Float valve with reed switch design for sensing the fluid level in reservoir was introduced. Mule samples of these products were prepared and validated. iii. Front and rear disc brake system for 650CC capacity premium motorcycles was developed and validated by customer. Also, brake rotor with 292 mm diameter has been developed for this vehicle. This is the largest size of brake rotor developed till date for any motorcycle produced in India. Rear brake system is operated by foot and the master cylinder is of remote reservoir type. iv. 200 mm diameter drum brake designed & developed for three wheeler load carrier vehicle. Commercial production of the drum brake has commenced. (2) Improvement in products: i. Benchmarking of competitor product for two wheeler disc brake has been done. The benchmarking activity is included with the performance benchmarking on the brake dynamometer as well as on vehicle using the data acquisition system. Performance features like the stopping distance, Mean Fully Developed Deceleration (MFDD), load applied v/s. the torque, etc. were captured. ii. Design improvements for better Brake fluid displacement from master cylinder, close control of ineffective stroke, aesthetics of parts were exercised. iii. In-built pressure limiting arrangement introduced in master cylinder of pedal operated rear disc brake system for motor cycle. This helps to avoid damage of brake caliper due to excessive application of load on pedal. (3) Validation capability enhancement: New testing equipments added to R & D infrastructure in order to enhance the validation capability. Following equipments are being added: i. Residual Drag Test Rig: This test rig measures the freeness of wheel on release of brake from various load conditions and often this specification is demanded by customers. ii. Structural Integrity Test Rig: This is for evaluation of the structural strength of given drum or disc brake assembly for the severity of brake application. Useful for defining the limiting torque capacity of panel assembly and calipers used in brakes. This test rig is installed and in use. iii. Dust & rain water chamber: This test rig would be used for simulating the environmental conditions under which the brake system works. (4) Future action Plan: i. Introduce the products for four wheeler vehicles like brake caliper, brake booster and valves. ii. Design & develop different disc brake systems and create library of product like fixed caliper with different piston sizes, radial calipers & brake system with single pot which will be commercially competitive. iii. In house design and integration of durability testing bench dynamometers. iv. Install full scale best in class inertia dynamometer for four wheeler, which will be used for evaluating the performance of brake system and its parts under various conditions. R & D Centre at E-93, Waluj, Aurangabad (Suspension Products): This centre carries out R & D in suspension forks and shock absorbers for two wheeler & three wheeler vehicles. (1) Specific areas in which R & D carried out work during the year under review were - i. Development of new series of shock absorbers for its customers. ii. Development of new casting alloy for forks with improved properties. iii. Development of high strength hardened fork pipes for new product applications. iv. Development of in-house virtual simulation capabilities for forks and shock absorbers. v. Development of in-house road load data acquisition capabilities for measurement of vehicle level data for suspension characteristics. vi. India's first canister gas cushion/ monocross suspension shock absorbers for improved vehicle handling of motorcycles. vii. Increased capacity of validation testing on test rigs to support new product evaluation of various customers. viii. Development of suspension forks design and product development capabilities. (2) Benefits derived as a result of above R & D activities: i. List of customers expanded with leading OEMs in India and abroad joining the clientele. ii. India's first canister gas cushion/monocross suspension shock absorber has been productionised in Pulsar 200NS and Discover 125ST models. iii. Enhancement of technology competency and value added services by the company. iv. Reduction in cost of various products by value engineered designs. v. Improvement in product quality and life improvement. vi. Import substitution and indigenization. (3) Future plan of action: i. Conduct detailed benchmarking of products, components and carry out detailed analysis to improve the metallurgical properties and product reliability with assistance from research laboratories. ii. Develop road load data acquisition laboratory to enhance understanding of vehicle level performance of the Company's products. iii. Develop adjustable front forks for high end motorcycles. iv. Enhance testing capacity by adding new servo-hydraulic test system that handles higher loads/speeds. v. Undertake projects to develop monotube gas cushions for monosuspension motorcycles for the future Indian and export markets. vi. Undertake value engineering projects to reduce cost of manufacturing through use of alternative materials and design/manufacturing process innovation.

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, names and other particulars of employees is annexed and forms part of this Report. Refer to Disclosure in Board of Directors report Explanatory Text Block

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representation received from the management, confirm that: i. in the preparation of the annual financial statements for the year ended 31st March, 2013, the applicable Accounting Standards have been followed and that there are no material departures; ii. appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; iii. proper and sufficient care has been taken, to the best of their knowledge and ability, 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; and iv. the annual financial statements have been prepared on a going concern basis.

CORPORATE SOCIAL RESPONSIBILITY The Company believes that it is the duty and responsibility of every organization to contribute to the welfare and well-being of the society and community at large. We assume our responsibilities towards the society and always strive to add value to the community and support good social cause for the betterment of society in which we exist. To achieve this cause, the Board of your Company has allocated up to 2% of the immediate preceding year's net profits, as contribution to be utilized towards Corporate Social Responsibility initiatives to drive positive change in the communities where it operates. An amount of Rs. 10.90 lakh was contributed during the year towards the purpose. Sevak Trust, a non-government organization, was extended support by the Company for the following purposes: i. Establishment and/or acquisition and maintenance or support of schools, colleges, vidhyapiths, gurukuls, study centre and other institutions for imparting education and training of students. ii. Establishment & maintenance of hospitals, dispensaries, nursing homes etc. iii. Grant of medical help to poor and deserving people during epidemic, famine, floods or any unforeseen calamity or war or war-like situations or operations. iv. Providing financial assistance to the poor of any community in slum areas. v. Development of water shed in drought areas.

HEALTH AND SAFETY The management is committed to promote and maintain safety and health of its employees. Our highest priorities are to provide safe and healthy workplace. Equally, our employees are expected to take responsibility for their health and safety at individual level. During the period under review, the Company conducted various awareness programs at plant level which included training on safe work area. At periodic intervals mock drills related to safety & fire and training sessions on first aid and emergency preparedness were organised. Safety Week was observed across all plants and offices from 4th March, 2013 to 10th March, 2013 in order to create continuing awareness on safety. The Company has formed safety committee at each plant which deals with safety, health and environment issues. HUMAN RESOURCE MANAGEMENT Your Company treats its employees as valuable asset. The Company believes that with passage of time an employee becomes more valuable to the organization by his enhanced skill levels and knowledge. A dedicated Human Resource team puts its best to attract and retain employees with high and positive morale. The Company strives to attract the best talent in its area of operations. The Company periodically undertakes significant investment in the learning and development of the employees at all levels. In the era of competition it becomes vital to have skilled workforce at all levels. Many of our employees have attended external training programmes which not only enhance their knowledge but also benefit the Company at large. INDUSTRIAL RELATIONS During the period under review the industrial relations remained cordial. The Company signed a Wage Settlement Agreement for its plant located at Manesar, for a term of three years effective from 1st October, 2012 until 30th September, 2015.