Directors Report of Elgi Rubber Company Ltd.

Mar 31, 2025

The Board of Directors have pleasure in presenting the 19^th Annual Report and the Audited Financial Statements of the Company for the year
ended March 31,2025.

Financial Highlights

('' in million)

2024-25		2023-24
Profit before exceptional items, depreciation and tax	102.46	201.21
Less: Depreciation	151.45	121.60
Add: Exceptional items	-	109.72
Profit before taxation	(48.99)	189.33
Less: Provision for taxation	2.1	5.00
(Add) / Less: Provision for deferred tax	(8.52)	5.05
Income tax Related to Earlier Year	-	-
Profit after tax	(42.57)	179.28
Add: Opening surplus	1659.65	1480.37
Profit available for appropriation	1617.08	1659.65
Other comprehensive income, net of taxes	(0.94)	(5.78)
Total comprehensive income for the year	(43.51)	173.50

Review of Business Operations and Future Outlook

The company has recorded a revenue of INR 2272.28 million for the year against INR 2119.31 million in the previous year, an increase of
7.22%. This is mainly on account of increase in exports.

The net loss was INR 42.57 million compared to net profit of INR 179.28 million in the previous year. This is primarily due to the following:

• The Sriperumbudur factory is not operating at full capacity on account of process improvement and modifications required for environmental
control. It is expected that these will be completed by the third quarter of 2025-26.

• Loss in value of investments of INR 79.31 million.

• Inability of the market to absorb raw material price increases.

The wholly owned operating subsidiaries in the USA, Brazil and Sri Lanka have performed well. The market conditions in western Europe
continue to be challenging for the subsidiary in the Netherlands subsidiary. Major revival activities have been implemented, and business is
showing improvement with increased orders from existing as well as new customers and new markets.

During the year, the Aircraft Tyre Retreading business division of the Company was disposed of in accordance with the approval obtained
from the members by means of a special resolution passed through Postal Ballot process on October 28, 2023.

As part of strategic restructuring, the Company has obtained necessary approval from its members by means of a Special Resolution passed
through Postal Ballot on November 3, 2024 (a) to sell or otherwise dispose off certain immovable properties, comprising of land and buildings,
in Chengalpattu District of the Company on an “as is where is” basis to any prospective buyer(s), not being related parties; and (b) to sell or
otherwise dispose off the non-current investments held by it (excluding those investments held by the Company in its subsidiaries), in open
market through stock exchange platforms.

Change in the nature of Business

There was no change in the nature of business of the company during the financial year ended March 31,2025.

Transfer to Reserve

During the year under review, the company has not transferred any amount to the general reserves. However, the current year loss of Rs.
42.57 millions has been adjusted to the Retained earnings in the Statement of Profit and Loss account of the Company.

Dividend

In view of loss, the Board of Directors has not recommended any dividend for the financial year 2024-25.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

In accordance with the provisions of Section 124(6) of the Companies Act, 2013 read with the Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the company had transferred an amount of INR 0.150 million, being the
amount of dividend relating to FY 2016-17 remained unclaimed for a period of 7 years and 71,543 equity shares, to the Investor Education
and Protection Fund during the financial year 2024-25, within the stipulated time. The details of the amount of unclaimed dividend and the
shares transferred to the Investor Education and Protection Fund are also made available on the website of the Company www.elgirubber.
com.

Share Capital

The paid-up capital of the company as on March 31,2025 stood at INR 50.05 million divided into 50,050,000 equity shares of Re.1/- each.
During the year under review, the company has not made any fresh issue of shares or any other securities.

Copy of Annual Return

As per the requirements of Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration)
Rules, 2014 (as amended), the copy of the Annual Return in the prescribed Form MGT-7 for the financial year ended March 31,2025 is placed
on the company’s website www.elgirubber.com

Board and Committee meetings

During the year under review, 5 meetings of the Board of Directors, 5 meetings of the Audit Committee, 4 meetings of the Nomination and
Remuneration Committee, 10 meetings of the Stakeholders Relationship Committee and 6 meetings of the Finance and Administrative
Committee were held. Further details of the Board and committee meetings as applicable, have been enumerated in the Corporate Governance
Report annexed herewith and forms part of this Report.

Statement on Compliance of applicable Secretarial Standards

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such
systems are adequate and operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of
Company Secretaries of India on the meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

Directors’ Responsibility Statement

Pursuant to the requirement of section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the Board
hereby confirms that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there were no material departures
from those standards;

ii. the Directors have selected such accounting policies, 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 loss of the
company for that period;

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

iv. the Directors have prepared the annual accounts for the financial year ended 31^st March 2025 on a going concern basis;

v. the Directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate
and were operating effectively; and

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were
adequate and operating effectively.

Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are
reportable to the Central Government

During the year under review, there were no instances of fraud identified or reported by the Statutory Auditors during the course of their audit
pursuant to Section 143(12) of The Companies Act, 2013.

Declaration of Independent Directors

All the Independent directors have given necessary declarations under section 149(7) of the Companies Act, 2013 and Regulation 25 of
SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (as amended) that they meet the criteria of independence as laid
down under section 149(6) read with applicable Schedule and Rules made thereunder and Regulation 16(1)(b) of SEBI (Listing Obligation
and Disclosure Requirements) Regulations, 2015 (as amended) and that their name is included in the data bank as per Rule 6(3) of the
Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended). Further, they have also declared that they are not aware
of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgment and without any external influence.

Statement regarding opinion of the board with regard to integrity, expertise and experience (including the proficiency) of the
Independent Directors appointed during the year

During the year, Sarathraj Selvakumar (DIN: 08904057), Parvathi Srinivasan (DIN: 10646746) and Ramani Vidhya Shankar (DIN: 00002498)
were appointed as Independent Directors of the Company for a first term of five consecutive years with effect from August 14, 2024, September
1,2024 and September 27, 2024 respectively. The Board of Directors has evaluated the performance of the Independent Directors during the
year 2024-25 based on the criteria and framework adopted by the Board and opined that the integrity, expertise and experience (including
proficiency) of the Independent Directors was satisfactory.

Company’s policy relating to Directors’ appointment, payment of remuneration and other matters provided under Section 178(3) of
the Companies Act, 2013

The Board, based on the recommendation of the Nomination and Remuneration Committee, had framed a policy which inter alia provides
the criteria for selection and appointment of Directors, Key Managerial Personnel, Senior Management and the criteria for evaluation of their
performance and the remuneration payable to them and other matters provided under Section 178(3) of the Act and SEBI Listing Regulations.
The criteria for determining qualifications, positive attributes and independence of Directors have been outlined in the Corporate Governance
Report annexed to this report. The salient features of the nomination and remuneration policy of the company is annexed herewith as
Annexure I and the full policy can be accessed on the company’s website www.elgirubber.com.

Comments on Auditor’s Report

Statutory Auditor

The report of the Statutory Auditor for the year ended March 31,2025 does not contain any qualifications, reservations, adverse remarks or
disclaimers. Further, with respect to the observation made in the Auditor Report, the same is self explanatory.

Secretarial Auditor

With respect to the observations of the Secretarial Auditor of the Company in his report for the year ended March 31, 2025, which are
self-explanatory, your Directors wish to state that the delay in reporting was inadvertently caused due to administrative and other reasons as
disclosed to the stock exchange while reporting such events in accordance with Regulation 30. However, the company has taken necessary
steps and will ensure that there are no such instances going forward.

Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013

The Company has not made any investments during the year under review and the loans / guarantees given to its wholly-owned subsidiaries
during the year were in accordance with Section 186 of the Companies Act, 2013. Details of loans given, investments made in earlier years,
guarantees given and securities provided pursuant to the provisions of section 186 of the Companies Act, 2013 have been given in the notes
to the financial statements.

Particulars of contracts or arrangements made with related parties

All transactions entered into with related parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) during the financial year 2024-25 were in the ordinary course of
business and on an arm’s length pricing basis.

Pursuant to Section 188 of the Companies Act, 2013 and Regulation 23 of the Listing Regulations, the Company had obtained the approval
of the members by means of an ordinary resolution passed through postal ballot process on November 03, 2024 to enter into material related
party transactions with LRG Technologies Limited, a related party. Further, the approval of the members is being sought to enter into material
transactions with the said Related Party and accordingly, necessary ordinary resolution is included in the notice of the ensuing 19^th Annual
General Meeting for the approval of the members, who are not related parties of the Company.

The particulars of Material Related Party Contract / Transaction entered by the Company with its related parties which are at arms’ length
basis are provided in Form AOC-2 and the same is annexed to the Board’s Report as Annexure - II. The details of transactions entered with
related parties are disclosed in the relevant notes to the financial statements.

Further, the Company has formulated a policy on related party transactions for identification and monitoring of such transactions. The
policy on related party transactions, as approved by the Board of Directors of the company, is available on the company’s website
www.elgirubber.com.

Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial
year to which these financial statements relate and the date of the Report

There have been no material changes and commitments which affect the financial position of the Company since the end of the financial year
and till the date of Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section
134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure III of this report.

Statement on Risk Management

The Board identifies and reviews the various elements of risk which the company has to face and laid out the procedures and measures for
mitigating those risks. The elements of risk threatening the company’s existence are very minimal.

The company does not face any risk other than those that are prevalent in the industry and has taken all possible steps to overcome such
risks. The main concerns are volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material
purchasing and the ability to pass on raw material price increases, have minimised the risk relating to the volatility in raw material prices.

Foreign exchange fluctuation risk is minimised through proper planning and natural hedging. As a part of the overall risk management
strategy, all assets are appropriately insured.

Details about the policy developed and implemented by the company on Corporate Social Responsibility initiatives

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and all other applicable provisions, if any, the Corporate Social
Responsibility Committee (“CSR Committee”) was dissolved with effect from 10^th November, 2021 and all the roles, responsibilities and
functions of the Corporate Social Responsibility Committee, as provided under the provisions of Section 135 of the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended from time to time) are being discharged by the Board
of Directors of the Company in terms of the said provisions of the Act and its Rules with effect from the said date.

The requisite information has also been provided in the Corporate Governance Report forming part of this Directors’ Report. The Corporate
Social Responsibility (CSR) Policy of the Company is available on the website of the Company www.elgirubber.com.

As part of its initiatives under its CSR Policy, the company has undertaken various projects towards CSR initiatives and the said projects are
by and large in accordance with Schedule VII of the Companies Act, 2013 and the CSR Policy of the Company. The annual report on CSR
activities is annexed herewith as Annexure IV.

Annual performance evaluation of the Board, its committees and of the individual directors

The Board has made a formal annual evaluation of its own performance, its Committees and of every individual Directors including the
Independent Directors of the Company based on a structured questionnaire, formulated in accordance with the performance evaluation
criteria approved by the Nomination and Remuneration Committee. The Board’s own performance was evaluated based on the criteria like
structure, governance, dynamics and functioning and review of operations, financials, internal controls etc.

The performance of the individual Directors including Independent Directors were evaluated based on the evaluation criteria laid down
under the Nomination and Remuneration Policy and the Code of Conduct as laid down by the Board. Further, the Independent Directors, at
their separate meeting held during the year 2024-25, has evaluated the performance of the Board as a whole, including the Chairman and
Managing Director / Executive Director and Non-Executive Non-Independent Directors and other items as stipulated under Schedule IV of the
Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Committees of the Board were evaluated based on the terms of reference specified by the Board to the said Committee. The Board of
Directors were satisfied with the evaluation process which ensured that the performance of the Board, its Committees, Individual Directors
including Independent Directors adheres to their applicable criteria.

The criteria for evaluation of the performance of the Non-Executive Directors and Independent Directors have also been explained in the
Corporate Governance Report annexed to this Report.

Directors and Key Managerial Personnel

As per the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Jairam Varadaraj (DIN:
00003361), Director, retires by rotation at the ensuing 19^th Annual General Meeting and being eligible, he has offered himself for re¬
appointment. Your Directors recommend his re-appointment.

During the year under review, M D Selvaraj (DIN: 00001608), Vijayraghunath (DIN: 00002963) and V Bhuvaneshwari (DIN: 01628512) has
retired as Non-Executive Independent Director(s) of the Company consequent upon completion of their second term of five consecutive years
with effect from the close of the business hours on September 26, 2024. The Board acknowledges and appreciates their contributions and
valuable services rendered during their tenure as Independent Directors of the Company.

Based on the recommendation of the Nomination and Remuneration Committee and the Board of Directors and pursuant to the approval of
the members by means of passing a special resolution at their 18^th Annual General Meeting held on August 14, 2024, Sarathraj Selvakumar
(DIN: 08904057) was appointed as Non- Executive Independent Director of the Company for a first term of 5 (Five) consecutive years
effective from August 14, 2024 and has complied with the provisions of the Act.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at their meeting held on August 12,
2024, had appointed Parvathi Srinivasan (DIN: 10646746) as an Additional Director (in the capacity of “Non-Executive Independent”) with
effect from September 1,2024 with an intention to appoint her as an Independent Director to hold such office for a first term of 5 consecutive
years effective from September 1, 2024 subject to the approval of the members of the Company by way of passing a special resolution.
Subsequently, the appointment of Parvathi Srinivasan (DIN: 10646746) as an Independent Director for a first term of 5 consecutive years
effective from September 1, 2024 was approved by the members by means of a special resolution passed through postal ballot process on
November 3, 2024 and has complied with the provisions of the Act.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at their meeting held on September
27, 2024, had appointed R Vidhya Shankar (DIN: 00002498) as an Additional Director (in the capacity of “Non-Executive Independent”) with
effect from September 27, 2024 with an intention to appoint him as an Independent Director to hold such office for a first term of 5 consecutive
years effective from September 27, 2024 subject to the approval of the members of the Company by way of passing a special resolution.
Subsequently, the appointment of R Vidhya Shankar (DIN: 00002498) as an Independent Director for a first term of 5 consecutive years
effective from September 27, 2024 was approved by the members by means of a special resolution passed through postal ballot process on
November 3, 2024 and has complied with the provisions of the Act.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at their meeting held on May
29, 2025, has appointed Ashty David (DIN: 01813998) as an Additional Director (in the capacity of “Non-Executive Independent”) with an
intention to appoint him as an Independent Director to hold such office for a first term of 5 consecutive years effective from May 29, 2025,
subject to the approval of the members of the Company at the ensuing 19^th Annual General Meeting by way of passing a special resolution.
The Company has also received necessary declaration from the appointee Independent Director that he fulfils the criteria of independence as
prescribed under Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. Accordingly, necessary special resolution has been included in the notice of the ensuing 19^th Annual
General Meeting for the approval of the members. Your Directors recommends his appointment.

Other than the above, there was no change in the composition of Board of Directors and the Key Managerial Personnel during the year under
review.

The following are the Key Managerial Personnel of the Company as on March 31,2025:

• Sudarsan Varadaraj (DIN: 00133533) -Chairman and Managing Director

• Harsha Varadaraj (DIN: 06856957) -Executive Director

• SR Venkatachalam -Chief Financial Officer

• Faizur Rehman Allaudeen -Company Secretary

Subsidiaries, Joint Ventures and Associate Companies

The company has 7 wholly-owned subsidiaries and 2 step-down subsidiaries. The statement pursuant to section 129(3) of the Companies
Act, 2013 containing the salient features of the financial statements of the said subsidiary companies in the prescribed Form AOC-1 forms part
of this annual report. As required under Section 134 of the Act read with its relevant Rules, the said disclosure also highlights the performance
of the subsidiaries.

The Board has approved a policy for determining material subsidiaries which is available on the company’s website www.elgirubber.com.

The consolidated financial statements prepared in accordance with the applicable accounting standards have been annexed to the Annual
Report. The annual accounts of the subsidiary companies are also available on the website of the company www.elgirubber.com and kept for
inspection by the members at the registered office during normal business hours of the company. The company shall provide a copy of the

annual accounts of subsidiary companies to the shareholders upon their request.

Companies which have become or ceased to be Subsidiaries, joint ventures or associate companies during the year;

The Company to continue to maintain its wholly owned subsidiary in Kenya namely Elgi Rubber Company Limited, which has been inoperative
for the past three financial years, as dormant, instead of winding up, in accordance with applicable laws in order to enable the receipt of all
pending VAT credit and other claims, if any. However, none of the subsidiary(ies) of the Company has ceased to exist during the year under
review. Further, the Company does not have any joint ventures or associate companies during the year.

Deposits

The Company had obtained approval to invite, accept and renew deposits from public and/or its members within the limits as stipulated
under the provisions of Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (as
amended) by means of a special resolution passed in the 14^th Annual General Meeting held on August 28, 2020.

Accordingly, the Company has renewed the deposits from its members during the year ended March 31,2025 and the same are within the
limits prescribed under the Companies Act, 2013 and the rules framed there under. There were no fresh deposits accepted during the year
under review. The details relating to the unsecured deposits accepted from the members of the Company as covered under Chapter V of the
2013 Act are given hereunder:

('' in millions)

Amount of deposits as on 01.04.2024	82.50
Deposits accepted during the year	0.00
Deposits repaid during the year including pre matured deposits	12.00
Amount of deposits as on 31.03.2025	70.50
Deposits remaining unpaid or unclaimed as at the end of the year	Nil
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved	Nil
a. At the beginning of the year	Nil
b. Maximum during the year	Nil
c. At the end of the year	Nil
The details of deposits which are not in compliance with the requirements of Chapter V of the Act	Nil

There were no default in the payment of interest to the deposit holders during the year under review. Further, the Company has not accepted
any deposits from public.

The Company has obtained Credit Rating on the fixed deposits [IVR BB /INC Negative Outlook] as assigned by Infomerics Valuation and
Rating Private Limited.

In accordance with the Companies (Acceptance of Deposits) Rules, 2014 (as amended), the monies received from the Directors, if any, has
been disclosed under relevant notes to the financial statements

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and
company’s operation in future

There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s
operations in future.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year under
review

No applications have been made and no proceedings were pending against the Company under the Insolvency and Bankruptcy Code, 2016
during the year under review.

Details of difference between the amount of the valuation done at the time of one time settlement and the valuation done while
taking loan from the banks or financial institutions along with the reasons thereof

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial
institutions during the year under review.

Adequacy of internal financial controls with reference to the financial statements

The company has implemented and evaluated the internal financial controls which provide a reasonable assurance in respect of providing
financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of
frauds, accuracy and completeness of accounting records. The company has appointed internal auditors with a dedicated internal audit team.

The internal audit reports were reviewed periodically by the Board. Further, the Board annually reviews the effectiveness of the company’s
internal control system.

The Board of Directors confirms that the internal financial controls are adequate with respect to the operations of the company. A report of
auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of internal financial controls is annexed with the
Auditors report.

Statutory Auditors

M/s. Arun & Co (FRN: 014464S) Chartered Accountants, Tirunelveli, a sole proprietorship firm, was appointed as the Statutory Auditor of the
Company at the 16^th Annual General Meeting to hold such office for a period of 5 consecutive years from the conclusion of the 16^th Annual
General Meeting till the conclusion of the 21^st Annual General Meeting to be held in the year 2027. The Company has also obtained necessary
consent under Section 139 and eligibility certificate under Section 141 from M/s. Arun & Co., (FRN: 014464S) Chartered Accountants,
Tirunelveli to the effect that their appointment would be in conformity with the provisions of the Companies Act, 2013.

Further, the Statutory Auditor has confirmed that they are holding a valid Peer Review Certificate issued by the Institute of Chartered
Accountants of India.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, C N Paramasivam
(FCS No.: 4654; C P No.: 3687; Peer Review No.3167/2023) Company Secretary in Practice, was appointed as the Secretarial Auditor of the
company to carry out the secretarial audit for the financial year ended March 31,2025. Accordingly, the secretarial audit report given in the
prescribed Form No. MR-3 is enclosed with this report as Annexure V.

Further, pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the provisions of
Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
the Board of Directors of the Company, at their meeting held on May 29, 2025, has recommended the appointment of C N Paramasivam (FCS
4654/ COP 3687), Company Secretary in Practice, Coimbatore and who is holding a valid Peer Review Certificate issued by The Institute of
Company Secretaries of India, as the Secretarial Auditor of the Company for a period of five consecutive financial years commencing from
FY 2025-26 to FY 2029-30, subject to the approval of the members at the ensuing 19^th Annual General Meeting. Accordingly, necessary
ordinary resolution has been set out under Item No.6 of the notice of the said meeting for the approval of the members. Your Directors
recommend their appointment.

C N Paramasivam (FCS 4654/ COP 3687) has given his consent and confirmed his eligibility for appointment as Secretarial Auditor of the
Company. Further, the Secretarial Auditor has confirmed that he holds a valid Peer Review Certificate issued by the Institute of Company
Secretaries of India.

Cost Auditor and maintenance of cost records

The Company has made and maintained cost records as specified by the Central Government under Section 148(1) of the Companies Act,
2013. Based on the recommendation of the Audit Committee, the Board of Directors, at their meeting held on May 29, 2025, had re-appointed
M/s. P Mohan Kumar & Co (Firm Registration No.100490), Cost Accountants, Coimbatore as the Cost Auditor of the company for the financial
year 2025-26 and had approved the remuneration payable to the Cost Auditor. Pursuant to Section 148 of the Companies Act, 2013 read
with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors of the company is subject
to the ratification by the members at the ensuing 19^th Annual General Meeting. Necessary resolution has been included in the notice of the
ensuing 19^th Annual General Meeting for the approval of the members. The Board recommends the ratification of the remuneration payable
to the Cost Auditors.

The Cost Audit Report for the financial year 2024-25 will be filed with the Central Government within the period stipulated under the Companies
Act, 2013.

Disclosure under section 197 (12) and rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc., as stipulated under Section 197(12) and Rule
5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure VI to this Report.

In terms of provisions of Section 197(12) and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
the statement showing the names of the top ten employees in terms of remuneration drawn forms part of this report. Pursuant to the second
proviso to section 136(1) of the Act, the Annual Report excluding the said information is being sent to the members of the company. Any
member interested in obtaining such information may send an email to [e-mail].

There were no employees who are in receipt of remuneration in the aggregate at the rate of not less than ''10,200,000/- if employed throughout
the year or '' 850,000/- per month if employed for part of the year or if employed throughout the financial year or part thereof, was in receipt of
remuneration which, in the aggregate, is in excess of the remuneration drawn by the Chairman and Managing Director or Executive Director
and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

Human Resources and Industrial Relations

The company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31,2025 is 451.

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

The company has put in place a policy for prevention of sexual harassment of women at workplace in line with the requirements of the
provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints
Committee has been set up to redress complaints received, if any, under the said Act. There were no complaints received during the financial
year 2024-25 and there were no unresolved complaints as on 31^st March, 2025.

Corporate Governance

A report on Corporate Governance along with Management Discussion & Analysis Report (MD&A) as per regulation 34(3) read with Schedule
V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure VII and forms part of this report.
The company has complied with the conditions relating to corporate governance as stipulated in Clause C of Schedule V of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.

Audit Committee

The Audit committee has been constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The particulars relating to the composition, meetings and
functions of the committee has been disclosed in the Report on Corporate Governance under the head ‘Audit committee’ and forms part
of this report. The Board has accepted all the recommendations made by the Audit Committee during the year and hence no disclosure is
required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by Board.

Vigil Mechanism/ Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its
Powers) Rules, 2014 and Regulations 4 and 22 of the SEBI Listing Regulations and in accordance with the requirements of SEBI (Prohibition
of Insider Trading) Regulations, 2015, the company has a Whistle Blower Policy to deal with unethical or improper practice or violation of
Company’s Code Of Business Conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the
company. The policy gives a platform to the whistle blower to report the complaints on the above-mentioned practices to the chairperson of
the audit committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that
there are sufficient grounds for concern and is not done as a malicious act against an individual. The audit committee reviews the complaints
received, redressed, objected, withdrawn and dismissed, if any, for every quarter in their meeting. The whistleblower policy is available on the
company’s website www.elgirubber.com.

Cautionary Statement

Statements in this report, especially those relating to MD&A giving details of company’s objectives, projections, estimates and expectations
may be construed as “forward looking statements” within the realm of applicable laws and regulations. Actual results are liable to differ
materially from those either expressed or implied.

Acknowledgement

Your Directors thank the company’s shareholders, customers, suppliers, business associates, bankers and other stakeholders for their
continued support to the company during the year. Your Directors also wish to place on record their appreciation of the contributions made
by all the employees towards the growth of the Company

For and on behalf of the Board
For Elgi Rubber Company Limited

Sudarsan Varadaraj

Place : Coimbatore Chairman & Managing Director

Date : May 29, 2025 DIN: 00133533

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Mar 31, 2024

The Board of Directors have pleasure in presenting the 18^th Annual Report and the Audited Financial Statements of the Company for the year ended March 31,2024.

Financial Highlights

(Rs. in Million)
2023-24		2022-23
Profit before exceptional items, depreciation and tax	201.21	301.26
Less: Depreciation	121.60	83.67
Add : Exceptional items	109.72	(36.77)
Profit before taxation	189.33	180.82
Less: Provision for taxation	5.00	17.00
Less: Provision for deferred tax	5.05	15.34
Income tax relating to earlier year	-	0.29
Profit after tax	179.28	148.19
Add: Opening surplus	1,480.37	1,332.18
Profit available for appropriation	1,659.65	1,480.37
Other comprehensive income, net of taxes	(5.78)	(7.10)
Total comprehensive income for the year	173.50	141.09

Review of Business Operations and Future Outlook

The company has recorded a revenue of INR 2,119.31 million for the year against INR 2,230.21 million in the previous year, a reduction of 5% in the revenue. This is mainly on account of the exit of the business with the Tamil Nadu State Transport Undertakings. We have not participated in their tender since the terms and conditions are not viable. Most of the loss in revenue has been compensated by increased sales in both domestic and international markets. The net profit was INR 179.28 million compared to INR 148.19 million in the previous year. Ongoing aggressive cost reduction and reorganization has improved the bottom line.

The operations of wholly owned subsidiary companies in USA and Brazil continue to show good improvement. However, the Netherland subsidiary made a minor loss due to the slowdown in the Europe economy. Efforts are underway to overcome this issue.

The new reclaimed rubber manufacturing facility at Sriperumbudur has started production and will part of the operations.

As a part of strategic restructuring, the Company has obtained necessary approval from its members by means of a special resolution passed through postal ballot on October 28, 2023 to sell or otherwise dispose off the Aircraft Tyre Retreading business of the Company as a going concern basis / on an “as is where is” basis to any prospective buyer(s), not being related parties.

Change in the nature of Business

There was no change in the nature of business of the company during the financial year ended March 31,2024.

Transfer to Reserve

During the year under review, the company has not transferred any amount to the general reserves and the amount of INR 1,659.65 million (including the current profit of INR 179.28 million) has been retained under surplus in the Statement of Profit and Loss.

Dividend

In order to conserve reserves to overcome expected disruptions expected currently for unexpected events in the future, the Board of Directors has not recommended any dividend for the financial year 2023-24.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

The company had transferred an amount of INR 0.311 million, being the amount of dividend relating to FY 2015-16 remained unclaimed for a period of 7 years and 28,135 equity shares, to the Investor Education and Protection Fund during the financial year 2023-24. As stipulated under the Act, the amount of dividend relating to the financial year 2016-17 that is remaining unclaimed for a period of 7 years will be transferred to the Investor Education and Protection Fund established by the Central Government within the due date. The shares in respect of such unclaimed dividend will also be transferred to the designated Demat Account of the Investor Education and Protection Fund Authority

in accordance with the provisions of Section 124(6) of the Companies Act, 2013 read with Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,2016, within the stipulated time. The details are also made available on the website of the Company www.elgirubber.com

Share Capital

The paid-up capital of the company as on March 31,2024 stood at INR 50.05 million dividend into 50,050,000 equity shares of Re.1/- each. During the year under review, the company has not made any fresh issue of shares or any other securities.

Copy of Annual Return

As per the requirements of Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), the copy of the Annual Return in the prescribed Form MGT-7 for the financial year ended March 31,2024 is placed on the company’s website www.elgirubber.com.

Board and Committee meetings

During the year under review, 6 meetings of the Board of Directors, 6 meetings of the Audit Committee, 4 meetings of the Nomination and Remuneration Committee, 12 meetings of the Stakeholders Relationship Committee and 8 meetings of the Finance and Administrative Committee were held. Further details of the Board and committee meetings as applicable, have been enumerated in the Corporate Governance Report annexed herewith and forms part of this Report.

Statement on Compliance of applicable Secretarial Standards

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on the meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

Directors’ Responsibility Statement

Pursuant to the requirement of section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the Board hereby confirms that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there were no material departures from those standards;

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

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

iv. the Directors have prepared the annual accounts for the financial year ended 31^st March 2024 on a going concern basis;

v. the Directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and were operating effectively; and

vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government

During the year under review, there were no instances of fraud identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of The Companies Act, 2013.

Declaration of Independent Directors

All the Independent directors have given necessary declarations under section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under section 149(6) read with applicable Schedule and Rules made thereunder and Regulation 25 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (as amended) and that their name is included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).

Statement regarding opinion of the board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year

The Board of Directors has evaluated the performance of the Independent Directors during the year 2023-24 based on the criteria and framework adopted by the Board and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors was satisfactory.

There was no appointment of Independent Directors made during the year under review.

Company’s policy relating to Directors’ appointment, payment of remuneration and other matters provided under Section 178(3) of the Companies Act, 2013

The Board, on the recommendation of the Nomination and Remuneration Committee, had framed a policy which inter alia provides the criteria for selection and appointment of Directors, Key Managerial Personnel, Senior Management and the criteria for evaluation of their performance and the remuneration payable to them and other matters provided under Section 178(3) of the Act and SEBI Listing Regulations. The criteria for determining qualifications, positive attributes and independence of Directors have been outlined in the Corporate Governance Report annexed to this report. The salient features of the nomination and remuneration policy of the company is annexed herewith as Annexure I and the full policy can be accessed on the company’s website www.elgirubber.com.

Comments on Statutory Audit Report

The report of the Statutory Auditor for the year ended March 31,2024 does not contain any qualifications, reservations, adverse remarks or disclaimers.

Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013

Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of section 186 of the Companies Act, 2013 have been given in the notes to the financial statements. The Company has not made any investments during the year under review and the loans / guarantees given to its wholly-owned subsidiaries during the year were in accordance with Section 186 of the Companies Act, 2013. The details of the investments made and loans / guarantees given are disclosed in the relevant notes to the financial statements.

Particulars of contracts or arrangements made with related parties

All transactions entered into with related parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2023-24 were in the ordinary course of business and on an arm’s length pricing basis. Since there are no transactions which are material in nature, Form AOC-2 is not being annexed. The details of transactions entered with related parties are disclosed in the relevant notes to the financial statements.

Further, the Company has formulated a policy on related party transactions for identification and monitoring of such transactions. The policy on related party transactions, as approved by the Board of Directors of the company, is available on the company’s website www.elgirubber.com.

Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which these financial statements relate and the date of the Report

There have been no material changes and commitments which affect the financial position of the Company since the end of the financial year and till the date of Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure II of this report.

Statement on Risk Management

The Board identifies and reviews the various elements of risk which the company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the company’s existence are very minimal.

The company does not face any risk other than those that are prevalent in the industry and has taken all possible steps to overcome such risks. The main concerns are volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases, have minimised the risk relating to the volatility in raw material prices.

Foreign exchange fluctuation risk is minimised through proper planning and natural hedging. As a part of the overall risk management strategy, all assets are appropriately insured.

Details about the policy developed and implemented by the company on Corporate Social Responsibility initiatives

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and all other applicable provisions, if any, the Corporate Social Responsibility Committee (“CSR Committee”) was dissolved with effect from 10^th November, 2021 and all the roles, responsibilities and functions of the Corporate Social Responsibility Committee, as provided under the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended from time to time) are being discharged by the Board of Directors of the Company in terms of the said provisions of the Act and its Rules with effect from the said date.

The requisite information has also been provided in the Corporate Governance Report forming part of this Directors’ Report. The Corporate Social Responsibility (CSR) Policy of the Company is available on the website of the Company www.elgirubber.com.

As part of its initiatives under its CSR Policy, the company has undertaken various projects towards CSR initiatives and the said projects are by and large in accordance with Schedule VII of the Companies Act, 2013 and the CSR Policy of the Company. The annual report on CSR activities is annexed herewith as Annexure III.

Annual performance evaluation of the Board, its committees and of the individual directors

The Board has made a formal annual evaluation of its own performance, its Committees and of every individual Directors including the Independent Directors of the Company based on a structured questionnaire, formulated in accordance with the performance evaluation criteria approved by the Nomination and Remuneration Committee. The Board’s own performance was evaluated based on the criteria like structure, governance, dynamics and functioning and review of operations, financials, internal controls etc.

The performance of the individual Directors including Independent Directors were evaluated based on the evaluation criteria laid down under the Nomination and Remuneration Policy and the Code of Conduct as laid down by the Board. Further, the Independent Directors, at their separate meeting held during the year 2023-24, has evaluated the performance of the Board as a whole, its Chairman and Non-Executive Non-Independent Directors and other items as stipulated under Schedule IV of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Committees of the Board were evaluated based on the terms of reference specified by the Board to the said Committee. The Board of Directors were satisfied with the evaluation process which ensured that the performance of the Board, its Committees, Individual Directors including Independent Directors adheres to their applicable criteria.

The criteria for evaluation of the performance of the Non-Executive Directors and Independent Directors have also been explained in the Corporate Governance Report annexed to this Report.

Directors and Key Managerial Personnel

As per the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Harsha Varadaraj (DIN: 06856957), Executive Director, retires by rotation at the ensuing 18^th annual general meeting and being eligible, he has offered himself for re-appointment. Your Directors recommend his re-appointment.

Based on the recommendation of the Nomination and Remuneration Committee and the approval of the Audit Committee and the Board of Directors and pursuant to the approval of the members, by means of passing a special resolution at their 17^th Annual General Meeting held on August 18, 2023, Sudarsan Varadaraj (DIN: 00133533) has been re-appointed as Chairman and Managing Director of the Company for a further period of 3 (three) years effective from January 01,2024 and has complied with the provisions of the Act.

Based on the recommendation of the Nomination and Remuneration Committee and the approval of the Audit Committee and the Board of Directors and pursuant to the approval of the members, by means of passing a special resolution at their 17^th Annual General Meeting held on August 18, 2023, Harsha Varadaraj (DIN: 06856957) has been re-appointed as Whole-time Director (designated as “Executive Director”) of the Company for a further period of 3 (three) years effective from November 06, 2023 and has complied with the provisions of the Act.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at their meeting held on May 30, 2024, has recommended the appointment of Sarathraj Selvakumar (DIN: 08904057) as a Non-Executive Independent Director to hold such office for a first term of 5 consecutive years effective from August 14, 2024 for the approval of the members of the Company at the ensuing 18^th Annual General Meeting by way of passing a special resolution in accordance with the provisions of Section 149 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also received necessary declaration from the appointee Independent Director that he fulfils the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, necessary special resolution is included in the notice of the ensuing 18^th Annual General Meeting for the approval of the members. Your Directors recommends his appointment.

G Sasikumar has tendered his resignation as Company Secretary and Compliance Officer of the Company and the Board of Directors has accepted his resignation with effect from the close of business hours of June 07, 2023.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at their meeting held on August 10, 2023, had appointed Faizur Rehman Allaudeen as Company Secretary and Compliance Officer of the Company with effect from August 10, 2023 and has complied with the provisions of the Act.

Other than the above, there was no change in the in the composition of Board of Directors and the Key Managerial Personnel during the year under review.

The following are the Key Managerial Personnel of the Company as on March 31,2024:

• Sudarsan Varadaraj (DIN: 00133533) -Chairman and Managing Director

• Harsha Varadaraj (DIN: 06856957) -Executive Director

• SR Venkatachalam -Chief Financial Officer

• Faizur Rehman Allaudeen -Company Secretary

Subsidiaries, Joint Ventures and Associate Companies

The company has 7 wholly-owned subsidiaries and 2 step-down subsidiaries. The statement pursuant to section 129(3) of the Companies Act, 2013 containing the salient features of the financial statements of the said subsidiary companies in the prescribed Form AOC-1 forms part of this annual report. As required under Section 134 of the Act read with its relevant Rules, the said disclosure also highlights the performance of the subsidiaries.

The Board has approved a policy for determining material subsidiaries which is available on the company’s website www.elgirubber.com.

The consolidated financial statements prepared in accordance with the applicable accounting standards have been annexed to the Annual Report. The annual accounts of the subsidiary companies are also available on the website of the company www.elgirubber.com and kept for inspection by the members at the registered office during normal business hours of the company. The company shall provide a copy of the annual accounts of subsidiary companies to the shareholders upon their request.

Companies which have become or ceased to be Subsidiaries, joint ventures or associate companies during the year;

The closure of operations has been initiated in respect of Elgi Rubber Company Limited, Kenya. However, none of the subsidiary(ies) of the Company has ceased to exist during the year under review. Further, the Company does not have any joint ventures or associate companies during the year.

Deposits

The Company had obtained approval to invite, accept and renew deposits from public and/or its members within the limits as stipulated under the provisions of Sections 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (as amended) by means of a special resolution passed in the 14^th Annual General Meeting held on August 28, 2020.

Accordingly, the Company has renewed the deposits accepted from its members during the year ended March 31, 2024 within the limits prescribed under the Companies Act, 2013 and the rules framed there under. There were no fresh deposits accepted during the year under review. The details relating to the unsecured deposits accepted from the members of the Company as covered under Chapter V of the 2013 Act are given hereunder:

('' in millions)
Amount of deposits as on 01.04.2023	82.50
Deposits accepted during the year	0.00
Deposits repaid during the year including prematured deposits	0.00
Amount of deposits as on 31.03.2024	82.50
Deposits remaining unpaid or unclaimed as at the end of the year	Nil
Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved
a. At the beginning of the year	Nil
b. Maximum during the year	Nil
c. At the end of the year	Nil
The details of deposits which are not in compliance with the requirements of Chapter V of the Act	Nil

There were no default in the payment of interest to the deposit holders during the year under review. The Company has obtained Credit Rating on the fixed deposits [IVR BBB- with Negative Outlook] as assigned by Infomerics Valuation and Rating Pvt. Ltd.

In accordance with the Companies (Acceptance of Deposits) Rules, 2014 (as amended), the monies received from the Directors, if any, has been disclosed under relevant notes to the financial statements.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operation in future

There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year under review

No applications have been made and no proceedings were pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

Details of difference between the amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions during the year under review.

Adequacy of internal financial controls with reference to the financial statements

The company has implemented and evaluated the internal financial controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The company has appointed internal auditors with a dedicated internal audit team. The internal audit reports were reviewed periodically by the Board. Further, the Board annually reviews the effectiveness of the company’s internal control system.

The Board of Directors confirm that the internal financial controls are adequate with respect to the operations of the company. A report of auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of internal financial controls is annexed with the Auditors report.

Statutory Auditors

M/s. Arun & Co (FRN: 014464S) Chartered Accountants, Tirunelveli, was appointed as the Statutory Auditor of the Company at the 16^th Annual General Meeting to hold such office for a period of 5 consecutive years from the conclusion of the 16^th Annual General Meeting till the conclusion of the 21^st Annual General Meeting to be held in the year 2027. Accordingly, no resolution for appointment of statutory auditors is included in the Notice convening the 18^th Annual General Meeting.

The Company has also obtained necessary consent under Section 139 and eligibility certificate under Section 141 from M/s. Arun & Co., (FRN: 014464S) Chartered Accountants, Tirunelveli to the effect that their appointment would be in conformity with the provisions of the Companies Act, 2013. Further, the Statutory Auditor has confirmed that they are holding a valid Peer Review Certificate issued by the Institute of Chartered Accountants of India.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, C N Paramasivam (FCS No.: 4654; C P No.: 3687; Peer Review No.3167/2023) Company Secretary in Practice, was appointed as the Secretarial Auditor of the company to carry out the secretarial audit for the financial year ended March 31, 2024. Accordingly, the secretarial audit report given in the prescribed Form No. MR-3 is enclosed with this report as Annexure IV. With respect to the observations of the Secretarial Auditor of the Company in his report, which are self-explanatory, your Directors wish to state that necessary steps has been initiated to ensure compliance with all applicable statutory requirements.

Further, the Secretarial Auditor has confirmed that he is holding a valid Peer Review Certificate issued by The Institute of Company Secretaries of India.

Cost Auditor

The Company has made and maintained cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013. Based on the recommendation of the Audit Committee, the Board of Directors, at their meeting held on May 30, 2024, had re-appointed M/s. P Mohan Kumar & Co (Firm Registration No.100490), Cost Accountants, Coimbatore as the Cost Auditor of the company for the financial year 2024-25 and had approved the remuneration payable to the Cost Auditor. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors of the company is subject to the ratification by the members at the ensuing 18^th Annual General Meeting. Necessary resolution has been included in the notice of the ensuing 18^th Annual General Meeting for the approval of the members. The Board recommends the ratification of remuneration payable to the Cost Auditors.

The Cost Audit Report for the financial year 2023-24 will be filed with the Central Government within the period stipulated under the Companies Act, 2013.

Disclosure under section 197 (12) and rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc., as stipulated under Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure V to this Report.

In terms of provisions of Section 197(12) and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the statement showing the names of the top ten employees in terms of remuneration drawn forms part of this report. Pursuant to the second proviso to section 136(1) of the Act, the Annual Report excluding the said information is being sent to the members of the company. Any member interested in obtaining such information may send an email to [e-mail]

Further, there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than '' 10,200,000/- if employed throughout the year or '' 850,000/- per month if employed for part of the year.

Human Resources and Industrial Relations

The company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31,2024 is 448.

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

The company has put in place a policy for prevention of sexual harassment of women at workplace in line with the requirements of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received, if any, under the said Act. There were no complaints received during the financial year 2023-24 and there were no unresolved complaints as on 31^st March, 2024.

Corporate Governance

A report on Corporate Governance along with Management Discussion & Analysis Report (MD&A) as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure VI and forms part of this report. The company has complied with the conditions relating to corporate governance as stipulated in Clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Audit Committee

The Audit committee has been constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The particulars relating to the composition, meetings and functions of the committee has been disclosed in the Report on Corporate Governance under the head ‘Audit committee’ and forms part of this report. The Board has accepted all the recommendations made by the Audit Committee during the year and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by Board.

Vigil Mechanism/ Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulations 4 and 22 of the SEBI Listing Regulations and in accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015, the company has a Whistle Blower Policy to deal with unethical or improper practice or violation of Company’s Code Of Business Conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the company. The policy gives a platform to the whistle blower to report the complaints on the above-mentioned practices to the chairman of the audit committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that there are sufficient grounds for concern and is not done as a malicious act against an individual. The audit committee reviews the complaints received, redressed, objected, withdrawn and dismissed, if any, for every quarter in their meeting. The whistleblower policy is available on the company’s website www.elgirubber.com.

Cautionary Statement

Statements in this report, especially those relating to MD&A giving details of company’s objectives, projections, estimates and expectations may be construed as “forward looking statements” within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgement

Your Directors thank the company’s shareholders, customers, suppliers, business associates, bankers and other stakeholders for their continued support to the company during the year. Your Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the Company

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Mar 31, 2018

The Board of Directors have pleasure in presenting the 12^th annual report of the company and the audited financial statements for the year ended March 31, 2018 covering 12 months of operation. The Management Discussion and Analysis (MD&A) Report have been included at the appropriate places in this report.

First year of implementation of Indian Accounting Standards (Ind AS)

This is the first year of implementation of the Indian Accounting Standards (Ind AS). The standalone and consolidated financial statements for the year ended March 31, 2018 have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The financial statements for the year ended March 31, 2017 have been restated in accordance with Ind AS for comparative information.

Financial Highlights

(Rs. in million)

2017-2018		2016-2017
Profit before exceptional items, depreciation and tax	110.67	186.09
Less: Depreciation	73.03	70.39
Less: Exceptional items	4.50	16.38
Profit before taxation	33.14	99.32
Less: Provision for taxation	5.80	24.70
(Add) / Less: Provision for deferred tax	8.04	(4.18)
Profit after tax	19.30	78.80
Add : Opening surplus	1084.59	1027.14
Less: Dividend & Dividend distribution tax paid during the year	(7.84)	(22.29)
Add : Transfer from Other Comprehensive Income	(2.36)	0.94
Profit available for appropriation	1093.69	1084.59

Review of Business Operations and Future Outlook

During the year under review, your company recorded a sales of INR 1885.14 million as against INR 2138.97 million in the previous year. The company had made a net profit of INR 19.30 million as against the net profit of INR 78.80 million in the previous year.

The reduced profit was primarily on account of reduced sales. The drop in sales was on account of GST introduction which significantly impacted sales in first quarter and increased the cost of materials consumed also impacted on our profits.

Change in the nature of Business

There was no change in the nature of business of the company during the financial year ended March 31, 2018.

Transfer to Reserves

During the year under review, an amount of INR 1093.69 million (including the previous year closing balance of INR 1,084.59 million) has been retained under surplus in the Statement of Profit and Loss.

Dividend

During the year under review, the Directors have not recommended any Dividend for the year ended March 31, 2018. Considering the new Reclaimed rubber project at Mambattu, the company is conserving the reserves for investing in the project.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

The company had transferred an amount of INR 0.58 million to Investor Education and Protection Fund during the financial year 2017-18, as per the terms of section 124 and 125 of the Companies Act, 2013. As stipulated under the Act, unclaimed or unpaid dividend relating to the financial year 2010-11 will be remitted on or before October 21, 2018 to the Investor Education and Protection Fund, established by the Central Government. The shares in respect of such unclaimed or unpaid dividend will also be transferred to the Investor Education and Protection Fund Authority Ministry of Corporate Affairs Demat Account, on or before October 21, 2018, in accordance with the provisions of Section 124(6) of the Companies Act, 2013 read with Regulation 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

Share Capital

The paid-up capital of the company as at March 31, 2018 stood at INR 50.05 million. During the year under review, your company had not made any fresh issue of shares.

Extract of Annual Return

The extract of annual return pursuant to the provisions of section 92 of the Companies Act, 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure I of this report.

Board and Committee meetings conducted during the period under review

During the year under review, 4 meetings of the Board of Directors, 4 meetings of the Audit Committee, 1 meeting of the Nomination and Remuneration Committee, 4 meetings of the Corporate Social Responsibility Committee, 22 meetings of the Stakeholders’ Relationship Committee, 3 meetings of the Finance and Administrative Committee and 1 meeting of the Independent Directors were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.

Statement on Compliance of applicable Secretarial Standards

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

Directors’ Responsibility Statement

Pursuant to the requirement of section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the Board hereby confirms that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

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

c) 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;

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government

There had been no frauds reported by the auditors pursuant to section 143(12) of the Companies Act, 2013.

Declaration of Independent Directors

The company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Company’s policy relating to Directors appointment, payment of remuneration and other matters provided under Section 178(3) of the Companies Act, 2013

The Board, on the recommendation of the nomination and remuneration committee, had framed a policy for fixing and revising remuneration of Directors, Key Managerial Personnel and Senior Management Personnel of the company. The criteria for determining qualifications, positive attributes and independence of directors has been stated in Annexure II to this report. The nomination and remuneration policy of the company in annexed herewith as Annexure III and can also be accessed on the company’s website www.elgirubber.com.

Comments on Audit Report

There are no qualifications, reservations or adverse remarks or disclaimers made by M.S.Jagannathan & Visvanathan, Statutory Auditors and by CN Paramasivam, Secretarial Auditor, in their reports.

Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013

Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of section 186 of the Companies Act, 2013 have been given in the notes to the financial statements.

Particulars of contracts or arrangements made with related parties

All transactions entered into with related parties as defined under the Companies Act, 2013 and regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2017-18 were in the ordinary course of business and on arm’s length pricing basis. Since there are no transactions which are not on arm’s length basis and material in nature, Form AOC-2 is not being annexed.

The policy on related party transactions, as approved by the Board of Directors of the company, is available on the company’s website www.elgirubber.com.

Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report

No material changes and commitments affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure IV of this report.

Statement on Risk Management

The Board identifies and reviews the various elements of risk which the company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the company’s existence are very minimal.

The company does not face any risks other than those that are prevalent in the industry and has taken all possible steps to overcome such risks. The main concerns are volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimised the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimised through proper planning and natural hedging. As a part of the overall risk management strategy, all assets are appropriately insured.

As a matter of abundant caution, the company proposes to commence hedging of some of its key inputs like natural rubber with a view to containing risk further and necessary processes and approvals are being initiated.

Details about the policy developed and implemented by the company on Corporate Social Responsibility initiatives

The Board has formed a Corporate Social Responsibility (CSR) Committee comprising Sudarsan Varadaraj, MD Selvaraj and Suresh Jagannathan. The CSR policy deals with allocation of funds, activities, identification of programmes, approval, implementation, monitoring and reporting mechanisms for CSR activities.

As part of its initiatives under CSR, the company has undertaken projects in the areas of education including support to the education of differently abled children. The said projects are by and large in accordance with Schedule VII of the Companies Act, 2013 and the CSR Policy of the company.

The CSR spend is predominantly directed through registered trust(s). The trust(s) expends the sums contributed by the company towards educational and related activities and also for having a corpus for undertaking construction of new school building within the next 5-10 years. The trust(s) has a proven track record of over five years in involvement in educational activities as it runs a full-fledged school and has earned a good reputation over a period. The trust has medium term plans to construct a new school building with all modern amenities and is working to make it in par to international standards in the years to come. Hence, the company would continue to significantly contribute to the trust.

The trust also expends the funds towards educational scholarships, medical relief, to help the upliftment of rural people by way of building infrastructure like, schools, street lights, roads etc., to support special children’s school and also for the building corpus. The annual report on CSR activities is annexed herewith as Annexure V.

Annual evaluation of the Board on its own performance and of the individual directors

On the advice of the Board of Directors, the nomination and remuneration committee formulated the criteria for evaluating the performance of the Board of Directors & its Committees, Independent Directors, Non-Independent directors and the Chairman & Managing Director. Based on that, performance evaluation has been undertaken. The Independent Directors of the company have also convened a separate meeting for this purpose. The results and evaluation have been communicated to all concerned.

Directors and Key Managerial Personnel

As per the provisions of section 152 of the Companies Act, 2013, Jairam Varadaraj, the Director of the company, retires by rotation at this annual general meeting. Being eligible, he offers himself for re-appointment.

Selvakumar D has resigned as the Company Secretary & Compliance Officer of the Company with effect from the closure of business hours of January 25, 2018.

Subsidiaries, Joint Ventures and Associate Companies

The company has 7 wholly-owned subsidiaries, 3 step-down subsidiaries and one wholly-owned LLP. The statement pursuant to section 129(3) of the Companies Act, 2013 containing the salient features of the financial statements of subsidiary companies forms part of this annual report.

The Board has approved a policy for determining material subsidiaries which is available on the company’s website www.elgirubber.com.

The annual accounts of the subsidiary companies are available on the website of the company www.elgirubber.com and kept for inspection by the shareholders at the registered office during normal business hours of the company. The company shall provide the copy of the annual accounts of subsidiary companies to the shareholders upon their request.

Deposits

The company has not accepted or renewed any fixed deposit and hence there are no unclaimed deposits as on March 31, 2018.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operation in future

There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Adequacy of internal financial controls with reference to the financial statements

The company has implemented and evaluated the internal financial controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The company has appointed internal auditors with a dedicated internal audit team. The internal audit reports were reviewed periodically by the Board. Further, the Board annually reviews the effectiveness of the company’s internal control system.

The Directors and management confirm that the internal financial controls are adequate with respect to the operations of the company. A report of auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of internal financial controls is annexed with the Auditors report.

Statutory Auditors

M.S.Jagannathan & Visvanathan, Chartered Accountants, Coimbatore were appointed as statutory auditors for a period of 5 consecutive years at the 11^th annual general meeting of the company held on August 26, 2017 subject to ratification by the shareholders at every annual general meeting. Their continuance of appointment and payment of remuneration for the financial year 2018-19 is to be ratified in the ensuing annual general meeting. The company has received a certificate from the statutory auditors to the effect that if the appointment is ratified, it would be in accordance with the provisions of section 141 of the Companies Act, 2013.

Secretarial Auditors

Pursuant to the provisions of section 204 of the Companies Act, 2013 read with corresponding rules framed thereunder, CN Paramasivam, Company Secretary in Practice, was appointed as the secretarial auditor of the company to carry out the secretarial audit for the year ended March 31, 2018. A secretarial audit report given by the secretarial auditors in Form No. MR-3 is enclosed with this report as Annexure VI.

Cost Auditors

The Board of Directors, at their meeting held on May 24, 2018, have appointed M/s. P. Mohan Kumar & Co. (Firm Registration No.100490), Cost Accountants, as the Cost Auditors of the company for the financial year 2018-19. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable to the Cost Auditors of the company is subject to the ratification by the shareholders at the annual general meeting. The Board recommends their remuneration.

Particulars of employees

There are no employees who are in receipt of remuneration in excess of the prescribed limits for the whole financial year 2017-18 or a part thereof during the year. Particulars pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial personal) Rules, 2014, is enclosed as Annexure VII.

Human Resources and Industrial Relations

The company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2018 is 526.

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

The company has in place a policy for prevention of sexual harassment of women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An internal complaints committee has been set up to redress complaints received. All employees (permanent, contractual, temporary and trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2017-18.

Corporate Governance

A report on corporate governance, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as Annexure VIII and forms part of this report. The company has complied with the conditions relating to corporate governance as stipulated in clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Audit Committee

Audit committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. The particulars relating to the composition, meetings and functions of the committee has been disclosed in the Report on Corporate Governance under the head, ‘Audit committee’. The Board has accepted the Audit committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit committee by board.

Whistle Blower Policy

The company has a whistle blower policy to deal with unethical or improper practice or violation of company’s code of business conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the company. The policy gives a platform to the whistle blower to report the complaints on the above mentioned practices to the Chairman of the Audit Committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that there are sufficient grounds for concern and is not done as a malicious act against an individual. The Audit Committee of the Board reviews the complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The whistle blower policy is available on the company’s website www.elgirubber.com.

Cautionary Statement

Statements in this report, especially those relating to MD&A giving details of company’s objectives, projections, estimates and expectations may be construed as “forward looking statements” within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgement

The Directors thank the company’s customers, vendors, investors, business associates and bankers for their support to the company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the company.

For and on behalf of the Board

Coimbatore Sudarshan Varadaraj

Chairman & Managing Director

^May ²⁴, ²⁰¹⁸ DIN: 001313533

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Mar 31, 2016

Directors’ Report

The board of directors have pleasure in presenting the 10th annual report of the Company and the audited accounts for the year ended March 31, 2016 covering 12 months of operation. The Management Discussion and Analysis (MD&A) Report have been included at the appropriate places in this report.

Financial Highlights

(Rs, in millions)

2015-2016		2014-2015
Profit before exceptional items, depreciation and tax	224.64	146.53
Less: Depreciation	90.56	67.82
Less/(Add): Exceptional items	377.89	0.29
Profit before taxation	(243.81)	79.00
Less: Provision for taxation	32.18	24.60
(Add) / Less: Provision for deferred tax	(11.09)	(2.15)
Profit after tax	(264.90)	56.55
Add: Opening surplus	1,082.45	1,050.36
Add: Transfer of surplus from Treads direct Limited upon amalgamation	342.27	-
(Less): Transfer of deficit from Parani Steels Private Limited upon amalgamation	(115.36)	-
Profit available for appropriation	1,044.46	1,106.91
Appropriation
Transitional adjustment on account of depreciation	-	8.29
General reserve	-	5.66
Proposed dividend	18.52	10.51
Dividend distribution tax	3.77	-
Balance surplus carried to balance sheet	1,022.17	1,082.45

Provision for fall in value of investments

After review, the Company made a provision to the tune of Rs, 375.84 million towards fall in value of investments made in the wholly owned subsidiaries at Brasil, USA and Australia, which resulted in a net loss for the current year. This amount is grouped under exceptional items in the statement of profit and loss.

Review of Business Operations and Future Outlook

During the year under review, the Company recorded sales of Rs, 2,012.04 million as against Rs, 1,333.97 million in the previous year. The Company incurred a net loss of Rs, 264.90 million as against the net profit of Rs, 56.55 million in the previous year after making the above said provision.

The Company could not benefit from the raw material price reduction during the year under review due to market pressure and selling prices of the major products were reduced twice during the year. The Company is taking steps to consolidate its operations with a view to reduce operating costs and to bring in higher efficiencies to improve the bottom line.

The availability of tyres from China at very low prices has put tremendous pressure on the tyre and retreading industry with new tire manufacturers and leading retreaters like company’s customers facing the brunt of the situation.

The current year continues to be sluggish in terms of sales value and volume.

Change in the nature of Business

There was no change in the nature of business of the Company during the financial year ended 31^st March, 2016.

Transfer to Reserves

During the year under review no amount is transferred to General Reserve (Rs, 5.66 million for the year 2014-15) and an amount of Rs, 1,022.17 million (including the previous year closing balance of Rs, 1,082.45 million) has been retained in surplus in the statement of profit and loss

Dividend

For the financial year 2015-16, the board of directors has recommended a dividend of Rs, 0.37 per equity share of Rs, 1.00 each, on the paid up share capital of Rs, 50,050,000. Subject to the approval of shareholders, an amount of Rs, 22.29 million will be paid as dividend including dividend distribution tax (previous year Rs, 10.51 million).

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

The Company has transferred an amount of Rs, 0.33 million to Investor Education and Protection Fund during the financial year 2015-16. In terms of Section 205(A) of the Companies Act, 1956, any unclaimed or unpaid dividend relating to the financial year 2008-09 is due for remittance on 30.09.2016 to the Investor Education and Protection Fund established by the Central Government.

Share Capital

The paid-up capital of the Company as at 31.03.2016 stood at Rs, 50.05 million. During the year under review the Company has not made any fresh issue of shares.

Extract of Annual Return

The extract of annual return pursuant to the provisions of section 92 of the Companies Act, 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure I of this report.

Board and Committee meetings conducted during the period under review

During the year under review, 6 meetings of the board of directors, 5 meetings of the audit committee, 3 meetings of the nomination and remuneration committee, 2 meeting of the corporate social responsibility committee, 17 meetings of the stakeholders relationship committee,

1 meeting of finance and administrative committee and 1 meeting of the independent directors were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.

Directors’ Responsibility Statement

Pursuant to the requirement of section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the board hereby confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

b. 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 the financial year and of the loss of the Company for that period;

c. 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;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government

There have been no frauds reported by the auditors pursuant to section 143(12) of the Companies Act, 2013.

Declaration of Independent Directors

The Company has received declarations from all the independent directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Company’s policy relating to Directors appointment, payment of remuneration and other matters provided under Section 178(3) of the Companies Act, 2013

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing and revising remuneration of directors, key managerial personnel, senior management personnel and employees of the company. The criteria for determining qualifications, positive attributes, and independence of directors and senior management personnel has been stated in Annexure II to this report. The Nomination and Remuneration policy of the Company is annexed herewith as Annexure III and can also be accessed on the company’s website at www.elgirubber.com

Comments on Audit Report

There are no qualifications, reservations or adverse remarks or disclaimers made by Reddy, Goud and Janardhan, Statutory Auditors and by CN Paramasivam, Secretarial Auditor, in their report.

Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013

Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of section 186 of the Companies Act, 2013 have been given in the notes to the financial statements.

Particulars of contracts or arrangements made with related parties

All transactions entered into with related parties as defined under the Companies Act, 2013 and regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2015-16 were in the ordinary course of business and on an arm’s length pricing basis. Since there are no transactions which are not arm’s length basis and material in nature Form AOC-2 is not being annexed.

The policy on related party transactions as approved by the board of directors of the Company has been uploaded on the Company’s website www.elgirubber.com

Material changes and commitment if any affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of the report

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure IV of this report.

Statement on Risk Management

The board identifies and reviews the various elements of risk which the Company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the Company’s existence are very minimal.

The Company does not face any risks other than those that are prevalent in the industry. The Company has taken all possible steps to overcome such risks. The main concerns are the volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimized the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimized through proper planning and natural hedging. As a part of the overall risk management strategy, all assets are appropriately insured.

Details about the policy developed and implemented by the Company on Corporate Social responsibility initiatives

The board has formed a corporate social responsibility committee comprising of Sudarsan Varadaraj, MD Selvaraj and Suresh Jagannathan. The CSR policy deals with allocation of funds, activities, identification of programmes, approval, implementation, monitoring and reporting mechanisms for CSR activities.

As part of its initiatives under CSR, the Company has undertaken projects in the areas of education, social development, medical relief, sports, women empowerment, animal welfare, cultural protection etc. These projects are by and large in accordance with Schedule VII of the Companies Act, 2013.

The CSR spend is predominantly directed through a registered trust. The trust expends the sums contributed by the Company towards educational and related activities only and also for having a corpus for undertaking construction of new school building within the next 5-10 years. The trust has a proven track record of over three years in involvement in educational activities as it runs a full-fledged school and has earned a good reputation over time. The trust has medium term plans to construct a new school building with all modern amenities and aims to be a school of international standards in the years to come. Hence, the Company should continue to significantly contribute to the trust.

The trust also expends the funds towards educational scholarships, medical relief, to help the upliftment of rural people by way of building infrastructure like schools, street lights, roads etc. to support special children’s school and also for the building corpus. The annual report on CSR activities is annexed herewith as Annexure V.

Annual evaluation of the Board on its own performance and of the individual directors

On the advice of the board of directors, the nomination and remuneration committee of the board of directors formulated the criteria for the evaluation of the performance of the board of directors & its committees, independent directors, non-independent directors and the Chairman & Managing Director. Based on that, performance evaluation has been undertaken. The independent directors of the Company have also convened a separate meeting for this purpose. All the results and evaluation has been communicated.

Directors and Key Managerial Personnel

As per the provisions of section 152 of the Companies Act, 2013, Jairam Varadaraj, the director of the company, retires by rotation at this ensuing annual general meeting. Being eligible, he offers himself for re-appointment.

C Shankar, GM-Finance and Company Secretary had resigned from the services of the Company from 1st October 2015 & D Selvakumar was appointed as GM-Finance and Company Secretary with effect from 14th November 2015 at the board meeting held on that date.

Subsidiaries, Joint Ventures and Associate Companies

The Company has 7 subsidiaries, 4 step-down subsidiaries and one LLP. The statement pursuant to section 129(3) of the Companies Act, 2013 containing the salient features of the financial statements of subsidiary companies forms part of this annual report.

The board has approved a policy for determining material subsidiaries which has been uploaded on the company’s website www.elgirubber.com

The annual accounts of the subsidiary companies are posted on the website of the Company www.elgirubber.com and kept for inspection by the shareholders at the registered office of the company. The Company shall provide the copy of the annual accounts of subsidiary companies to the shareholders upon their request.

As a part of restructuring and consolidation process, during the year under review,

i. Treads direct LLC USA, a wholly owned subsidiary of the Company was merged with Elgi Rubber Company LLC, USA another wholly owned subsidiary of the Company.

ii. A new holding company, Elgi Rubber Company Holdings B.V., was incorporated in The Netherlands as a wholly owned subsidiary of the Company. The existing wholly owned subsidiaries of the Company viz., Elgi Rubber Company B.V. and Rubber Resources B.V., have become the subsidiaries of Elgi Rubber Company Holdings B.V. The Netherlands.

iii. Elgi Rubber Company Holdings B.V., has acquired 100% shares of Rubber Compounding Holland B.V., The Netherlands, a Company dealing with rubber compounds.

Merger of Indian subsidiaries

During the year under review, the wholly owned Indian subsidiaries M/s Treads direct Limited and Parani Steels Private Limited had been subsidiaries had been merged with the Company, as approved by the members in their meeting held on 26^th September 2015 and as per the orders of Honourable High court of Madras dated 22^nd January 2016. The merger was effective from 1^st April 2015. Hence, the current year figures (2015-16) are not comparable with the previous year figures (2014-15).

Deposits

The Company has not accepted or renewed any fixed deposit and hence there are no unclaimed deposits as on 31st March 2016.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operation in future

There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

Adequacy of internal financial controls with reference to the financial statements

The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Company has appointed Internal Auditor with a dedicated internal audit team. The Internal Audit Reports were reviewed periodically by the Board. Further, the Board annually reviews the effectiveness of the Company’s internal control system.

The directors and management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report.

Statutory Auditors

Reddy, Goud and Janardhan, Chartered Accountants, Bangalore were appointed as statutory auditors for a period of 3 years at the annual general meeting of the Company held on 27th September 2014 subject to ratification by the shareholders at every annual general meeting. Their continuance of appointment and payment of remuneration for the financial year 2016-17 is to be ratified in the ensuing annual general meeting. The Company has received a certificate from the above auditors to the effect that if the appointment is ratified, it would be in accordance with the provisions of section 141 of the Companies Act, 2013.

Secretarial Auditors

Pursuant to the provisions of section 204 of the Companies Act, 2013 read with corresponding rules framed there under, CN Paramasivam, Company Secretary in Practice, was appointed as the secretarial auditor of the Company to carry out the secretarial audit for the year ended 31st March, 2016. A secretarial audit report given by the secretarial auditors in Form No. MR-3 is enclosed with this report as Annexure VI.

Cost Auditors

The Board of Directors at their meeting held on May 30, 2016 have appointed M/s. P. Mohan Kumar & Co. (Firm Regn No.100490), Cost Accountants, as the Cost Auditors of the Company for the financial year 2016-17. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable to the Cost Auditors of the Company is subject to the ratification by the shareholders at the annual general meeting. The Board recommends their remuneration.

Particulars of employees

There are no employees who are in receipt of remuneration in excess of Rs, 6,000,000/- for the whole financial year 2015-16 or a part thereof during the year. Particulars pursuant to Rule of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, is enclosed as Annexure VII.

Human Resources and Industrial Relations

The Company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2016 is 593.

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

The Company has in place a policy on sexual harassment of women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An internal complaint committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2015-2016.

Corporate Governance

A report on corporate governance, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as Annexure VIII and forms part of this report. The Company has complied with the conditions relating to corporate governance as stipulated in clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Audit Committee

Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer to the Section on Corporate Governance, under the head, ‘Audit Committee’ for matters relating to the composition, meetings and functions of the Committee. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by Board.

Whistle Blower Policy

The Company has a whistle blower policy to deal with unethical or improper practice or violation of Company’s code of business conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the company. The policy gives a platform to the whistle blower to report the complaints on the above mentioned practices to the chairman of the audit committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that there are sufficient grounds for concern and is not done as a malicious act against an individual. The audit committee of the board reviews the complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The whistle blower policy is available in the website of the Company at the following address www.elgirubber.com

Cautionary Statement

Statements in this report, especially those relating to MD&A giving details of company’s objectives, projections, estimates and expectations may be construed as “forward looking statements” within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgment

The directors thank the company’s customers, vendors, investors, business associates and bankers for their support to the company. The directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the company.

For the board of directors

Sudarsan Varadaraj

^Coimbatore Chairman & Managing Director

30.05.2016 (DIN: 00133533)

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Mar 31, 2015

The Board of Directors have pleasure in presenting the 9th annual report of the Company and the audited accounts for the year ended March 31, 2015 covering 12 months of operation. The Management Discussion and Analysis (MD&A) Report have been included at the appropriate places in this report.

Financial Highlights

(Rs. in million) 2014-2015 2013-2014

Profit before depreciation and tax 146.53 259.99

Less: Depreciation 67.82 50.92

Add: Exceptional items 0.29 _

Profit before taxation 79.00 209.07

Less: Provision for taxation 24.60 51.63

(Add) / Less: Provision for deferred tax (2.15) 6.20

Profit after tax 56.55 151.24

Add: Opening surplus 1,050.36 932.76

Profit available for appropriation 1,106.91 1,084.00

Appropriation

Transitional adjustment on account of depreciation 8.29 _

General reserve 5.66 15.12

Proposed dividend 10.51 18.52

Dividend distribution Tax _ _

Balance surplus carried to balance sheet 1,082.45 1,050.36

Review of Business Operations and Future Outlook

During the year under review, the Company recorded sales of INR 1,333.97 million as against INR 1,442.86 million in the last year The company earned a net profit of INR 56.55 million as against INR 151.24 million in the previous year. The Indian Subsidiary, Treads direct Limited achieved sales of INR 1,516.59 million and Profit after tax of INR 72.76 million.

The current year continues to be sluggish in terms of sales with the overall industry going through difficult times. The Company is taking steps to consolidate its operations with a view to reduce operating costs and to bring in higher efficiencies to improve the bottom line.

Transfer to Reserves

An amount of INR 5.66 million has been transferred to General Reserve and an amount of INR 1,082.45 million (including the previous year closing balance of INR 1,050.36 million) has been retained in Surplus in the Statement of Profit and Loss.

Dividend

The directors recommend a dividend of INR 0.21 per equity share of INR 1.00 each. This comes to INR 10.51 million. The dividend will be paid to the registered members, who are in the register of members as on the book closure date and upon approval by the members of the Company at the ensuing annual general meeting. In respect of the dematerialised shares, dividend will be paid to the beneficial owners based on the list provided by the depositories.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

In terms of Section 205(a) and 205(b) of the Companies Act, 1956, any unclaimed or unpaid dividend relating to the financial year 2007- 2008 is due for remittance on 30/09/2015 to the Investor Education and Protection Fund established by the Central Government.

Share Capital

The paid-up capital of the Company as at 31.03.2015 stood at INR 50.05 million. During the year under review the Company has not made any fresh issue of shares.

Extract of Annual Return

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure I of this Report.

Board and Committee meetings conducted during the period under review

During the year under review, 5 Meetings of the Board of Directors, 4 Meetings of the Audit Committee, 2 Meetings of the Nomination and Remuneration Committee, 1 Meeting of the Corporate Social Responsibility Committee and 22 Meetings of the Stakeholders Relationship Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.

Directors' Responsibility Statement

Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the Board hereby confirms that:-

a. in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

b. 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 the financial year and of the profit of the company for that period;

c. 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;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government

There have been no frauds reported by the Auditors pursuant to Section 143(12) of the Companies Act, 2013.

Declaration of Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement entered with the Stock Exchange.

Company's policy relating to Directors appointment, payment of remuneration and other matters provided under Section 178(3) of the Companies Act, 2013

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing and revising remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and employees of the Company. The Nomination and Remuneration policy of the Company in annexed herewith as Annexure II and can also be accessed on the Company's website www.elgirubber.com.

Comments on Audit Report

There are no qualifications, reservations or adverse remarks or disclaimers made by Reddy, Goud and Janardhan, Statutory Auditors and by CN Paramasivam, Secretarial Auditor, in their report.

Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013

Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of Section 186 of the Companies Act, 2013 have been given in the Notes to the Financial Statements.

Particulars of contracts or arrangements made with related parties

All transactions entered into with related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year 2014-2015 were in the ordinary course of business and on an arm's length pricing basis. Transactions of material nature in Form AOC-2 is attached to this Report as Annexure III.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Company's website www.elgirubber.com.

Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report

The Board of directors at their meeting held on 21st April, 2015 has approved the Scheme of Amalgamation of the wholly owned subsidiaries Treadsdirect Limited and Parani Steels Private Limited with the Company with effect from 01st April, 2015 subject to the approval of the Hon'ble High Court of Judicature at Madras and such other authorities as may be necessary in this regard. Other than this there are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure IV of this report.

Statement on Risk Management

The Board identifies and reviews the various elements of risk which the Company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the Company's existence are very minimal.

The company does not face any risks other than those that are prevalent in the industry. The company has taken all possible steps to , overcome such risks. The main concerns are the volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimised the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimised through proper planning and natural hedging. As a part of the overall risk management strategy, all assets are appropriately insured.

Details about the policy developed and implemented by the Company on Corporate Social responsibility initiatives

The Board has formed a Corporate Social Responsibility Committee comprising of Sudarsan Varadaraj, MD Selvaraj and Suresh Jagannathan. The Committee at its meeting held on 4th August, 2014, recommended a CSR policy for adoption by the Company. The CSR policy deals with allocation of funds, activities, identification of programmes, approval, implementation, monitoring and reporting mechanisms for CSR activities.

As part of its initiatives under CSR, the Company has undertaken projects in the areas of Education, Social development, Medical relief, Sports, Women empowerment, animal welfare, Cultural protection etc. These projects are by and large in accordance with Schedule VII of the Companies Act, 2013.

The CSR spend is predominantly directed through a registered trust. The trust expends the sums contributed by the Company towards educational and related activities only and also for having a corpus for undertaking construction of new school building within the next 5- 10 years. The trust has a proven track record of over three years in involvement in educational activities as it runs a full-fledged school comprising of 1,300 students and has earned a good reputation over time. The trust has medium term plans to construct a new school building with all modern amenities and aims to be a school of international standards in the years to come. Hence, the Company should continue to significantly contribute to the trust.

The trust also expends the funds towards Educational Scholarships, Medical Relief, to help the upliftment of rural people by way of building infrastructure like Schools, Street Lights, Roads etc. to support Special Children's School and also for the Building Corpus. The Annual Report on CSR activities is annexed herewith as Annexure V.

Annual evaluation of the Board on its own performance and of the individual directors

On the advice of the Board of Directors, the Nomination and Remuneration Committee of the Board of Directors, the Company formulated the criteria for the evaluation of the performance of the Board of Directors & its Committees, Independent Directors, Non-independent Directors and the Chairman & Managing Director. Based on that performance evaluation has been undertaken. The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results and evaluation has been communicated.

Directors and Key Managerial Personnel

Suresh Jagannathan, MD Selvaraj, P Vijay Raghunath and Vidyasankar Bhuvaneshwari were appointed as Independent Directors of the Company at the Annual General Meeting held on 27th September 2014 for a term of five consecutive years.

As per the provisions of Section 152 of the Companies Act 2013, the Managing Director of the Company, Sudarsan Varadaraj, retires by rotation at this Annual General Meeting. Being eligible, he offers himself for re-appointment.

At the Board Meeting held on 19th May, 2014, Sudarsan Varadaraj, Chairman and Managing Director, SR Venkatachalam, Chief Financial '$

Officer (Vice-President - Finance) and C Shankar, GM - Finance and Company Secretary, were designated as "Key Managerial Personnel" of the Company pursuant to Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Sudarsan Varadaraj, Chairman and Managing Director of the Company, apart from drawing remuneration from this Company is also paid remuneration by way of commission by the wholly owned subsidiary, Treadsdirect Limited. This disclosure is made pursuant to the provisions of Section 197(14) of the Companies Act, 2013.

Subsidiaries, Joint Ventures and Associate Companies

The Board has approved a policy for determining material subsidiaries which has been uploaded on the Company's website www.elgirubber.com.

The annual accounts of the Subsidiary Companies are posted on the website of the Company www.elgirubber.com and kept for inspection by the shareholders at the Registered Office of the Company. The Company shall provide the copy of the annual accounts of Subsidiary Companies to the shareholders upon their request.

The statement pursuant to Section 129(3) of the Companies Act, 2013, containing the salient features of the Financial Statement of subsidiary Companies, forms part of this Annual Report.

Deposits

The Company has not accepted any fixed deposit and hence there are no unclaimed deposits as on 31st March 2015.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future

There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and I

company's operations in future. I

Internal Control Systems and their adequacy

The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditors' report, key issues, significant processes and accounting policies.

Statutory Auditors

Reddy, Goud and Janardhan, Chartered Accountants, Bangalore were appointed as Statutory Auditors for a period of 3 years at the previous Annual General Meeting held on 27th September 2014. Their continuance of appointment and payment of remuneration are to be ratified in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if the appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed thereunder, CN Paramasivam, Company Secretary in Practice, was appointed as the Secretarial Auditor of the Company to carry out the secretarial audit for the year ended 31st March, 2015. A Secretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 is enclosed with this Report as Annexure VI.

Particulars of employees

There are no employees who are in receipt of remuneration in excess of INR. 6,000,000/- for the whole Financial year 2014-15 or a part thereof during the year. Particulars pursuant to Rule 5(1) of Companies (Appointment and Remuneration of Managerial personnel) Rules 2014, is enclosed as Annexure VII

Human Resources and Industrial Relations

The Company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2015 is 318.

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

The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2014-2015.

Corporate Governance

A report on Corporate Governance is annexed and forms part of this report. The Company has complied with the conditions relating to Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

Whistle Blower Policy

The Company has a Whistle Blower Policy to deal with unethical or improper practice or violation of Company's Code of Business Conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. The Policy gives a platform to the Whistle Blower to report the complaints on the above mentioned practices to the Chairman of the Audit Committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that there are sufficient grounds for concern and is not done as a malicious act against an individual. The Audit Committee of the Board reviews the Complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The Whistle Blower Policy is available in the website of the Company at the following address www.elgirubber.com.

Cautionary Statement

Statements in this report, especially those relating to MD & A giving details of company's objectives, projections, estimates and expectations may be construed as "forward looking statements" within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgement

The Directors thank the Company's customers, vendors, investors, business associates and bankers for their support to the Company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the Company.

For the board of directors

Sudarsan Varadaraj

Coimbatore Chairman & Managing Director

30.07.2015 (DIN: 00133533)

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Mar 31, 2014

Dear members,

The Board of Directors take pleasure in presenting the 8th annual report and the audited accounts for the year ended March 31, 2014. The Management Discussion and Analysis (MD & A) Report have been included at the appropriate places in this report.

Abstract of the Financial Results of the Company

(Rs. in million)

2013-2014 2012-2013

Profit before depreciation and tax 259.99 268.96

Less : Depreciation 50.92 36.30

Profit before taxation 209.07 232.66

Less: Provision for taxation 51.63 52.13

(Add) / Less: Provision for deferred tax 6.20 3.22

Profit after tax 151.24 177.31

Add: Opening surplus 932.76 812.94

Add: Dividend distribution tax of earlier year return back 3.85

Profit available for appropriation 1,084.00 994.10

Appropriation

General reserve 15.12 17.73

Proposed dividend 18.52 40.04

Dividend distribution tax - 3.57

Balance surplus carried to balance sheet 1,050.36 932.76

Dividend

The directors recommend a dividend of INR 0.37 per equity share of INR 1.00 each. This comes to INR 18.52 million. The dividend will be paid, upon approval by the members of the Company at the ensuing annual general meeting to the registered members, who are in the register of members as on the book closure date and in respect of the dematerialised shares, dividend will be paid to the beneficial owners based on the list provided by the depositories.

Review of Operations and Future Outlook

During the year under review, the Company recorded sales of INR 1442.86 million as against INR 1407.32 million in the previous year. The company earned a net profit of INR 151.24 million as against INR 177.31 million in the previous year.

The Indian Subsidiaries, Treadsdirect Limited and Titan Tyrecare Products Limited achieved sales of INR 1670.88 million and INR 45.66 million respectively during the year under review. The revenue from windmill operations increased to INR 35.41 million from INR 33.63 million in the previous year recording an increase of 5%.

There was only marginal improvement in overall sales due to global economic slowdown. The decrease in input costs was inadequate to offset the increases in employee, depreciation and overhead costs. Hence the margins were lower.

In February 2014, the Company commenced manufacture of buffing rasp blades, with the installation and commissioning of a state of the art furnace and relocated two presses at Kovilpalayam in September 2013 at total cost of INR 72.75 million.

The Company acquired the entire business of its wholly owned subsidiary Titan Tyrecare Products Limited with effect from 01.09.2013 consisting of manufacture of retreading machineries and a 100% EOU division engaged in manufacture of brazed carbide products for a consideration of INR 169.63 million.

During the year under review, two hydraulic presses were installed at Annur and new moulds were procured at a total cost of INR 20.62 million.

The Karur facility manufacturing tyre repair units was shifted to Annur in order to consolidate operations.

The wholly owned subsidiary Treadsdirect LLC, USA acquired the assets of Western states manufacturing company Inc which was engaged in manufacture and distribution of tyre repair and related products.

The Company has successfully retreaded aircraft tyres for the Indian Airforce on commercial basis in November 2013.

The Company expects to have considerable growth in sales and profitability in future on account of substantial capital investments made during the year.

Risk and Concerns

The company does not face any risks other than those that are prevalent in the industry. The company has taken all possible steps to overcome such risks. The main concerns are the volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimised the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimised through proper planning and natural hedging.

As a part of the overall risk management strategy, all assets are appropriately insured.

Internal Control Systems

Quarterly Internal Audit is carried out by an independent firm of Chartered Accountants and the observations are reported to the management. Immediate steps are taken to rectify any discrepancies. All significant audit observations are discussed in the audit committee meetings.

Human Resources and Industrial Relations

The Company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2014 is 306.

Subsidiaries

The consolidated financial statements presented in this annual report include financial results of all the subsidiary companies. The details of the Subsidiary Companies are furnished in the statement pursuant to section 212 of the Companies Act, 1956.

Directors

The Board of Directors, at their meeting held on 31st July, 2014, have appointed Ms Vidyasankar Bhuvaneswari as an Additional Director of the Company and she holds office upto the ensuing Annual General Meeting. Further, the Board has recommended the appointment of Ms Vidyasankar Bhuvaneswari as the Independent Director and accordingly necessary Resolution has been included in the Agenda of the Notice convening the Annual General Meeting.

Further, the Board of Directors, at their meeting held on 31st July, 2014, has recommended the appointment of Mr Suresh Jagannathan, Mr P Vijay Raghunath and Mr M D Selvaraj, as the Independent Directors of the Company for a period of 5 consecutive years. Accordingly, necessary Resolution(s) proposing their appointment(s) has been included in the Agenda of the Notice convening the Annual General Meeting.

Dr Jairam Varadaraj, Director of the Company, retires by rotation and being eligible offers himself for re-appointment.

Auditors

Pursuant to the Section 139 of Companies Act, 2013 read with the Company (Audit and Auditors) Rules, 2014, the present auditors, M/s. Reddy, Goud and Janardhan, Chartered Accountants, Bangalore, is recommended for appointment as Statutory Auditors of the Company to hold the office for 3 years from the conclusion of the ensuing Annual General Meeting till the conclusion of 11th Annual General Meeting of the Company. Further, such appointment is liable to ratification by the members of the company at every annual general meeting during their tenure of office.

Directors'' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that they have

1. In the preparation of the annual accounts, followed the applicable accounting standards and there are no material departures.

2. Selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and of the profit of the Company for the financial year.

3. 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.

4. Prepared the annual accounts on a going concern basis.

Other Information

Particulars as required by Section 217(1) (e) of the Companies Act, 1956, relating to Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo are provided as an annexure to this report. There are no employees who are in receipt of remuneration exceeding the specified limit as notified by the Government.

The Company has not accepted any fixed deposits and hence there were no unclaimed fixed deposit as on 31.03.2014.

Corporate Governance

A separate report on the compliance with Clause 49 of the Listing Agreement with the Stock Exchanges and the Auditor''s Certificate on the compliance form part of this report.

Cautionary Statement

Statements in this report, especially those relating to MD & A giving details of company''s objectives, projections, estimates and expectations may be construed as "forward looking statements" within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgement

The Directors thank the Company''s customers, vendors, investors, business associates and bankers for their support to the Company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the Company

For the Board of Directors

Coimbatore Sudarsan Varadaraj 31.07.2014 Chairman & Managing Director

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Mar 31, 2013

The Board of Directors take pleasure in presenting the 7th annual report and the audited accounts for the year ended March 31,2013. The Management Discussion and Analysis (MD & A) Report have been included at the appropriate places in this report.

Abstract of the Financial Results of the Company

(Rs. in Million)

2012-2013 2011-2012

Profit before depreciation and tax 265.47 178.59

Less : Depreciation 36.30 39.37

Profit before taxation 229.17 139.22

Less: Provision for taxation 52.13 42.52

(Add) / Less: Provision for deferred tax 3.22 1.88

Profit after tax 173.82 94.82

(Add) / Less: Adjustment relating to earlier years (Income tax) (3.49) 0.95

177.31 93.87

Add: Opening surplus 812.94 757.54

Add: Dividend distribution tax of earlier year written back 3.85

Profit available for appropriation 994.10 851.41

Appropriation

General reserve 17.73 9.39

Proposed dividend 40.04 25.02

Dividend distribution tax (After adjustment of dividend distribution tax paid by subsidiaries) 3.57 4.06

Balance surplus carried to balance sheet 932.76 812.94

Dividend

The directors recommend a dividend of INR 0.80 per equity share of INR 1.00 each. This along with the dividend distribution tax comes to INR 43.61 Million. The dividend will be paid to the registered members, who are in the register of members as on the book closure date and upon approval by the members of the Company at the ensuing annual general meeting. In respect of the dematerialised shares, dividend will be paid to the beneficial owners based on the list provided by the depositories.

Review of operations and future outlook

During the year under review, the Company recorded sales of INR 1,407.32 Million as against INR 1,115.45 Million in the previous year. The Company earned a net profit of INR 177.32 Million as against INR 93.87 Million in the previous year.

The Indian subsidiaries, Treadsdirect Limited and Titan Tyrecare Products Limited achieved sales of INR 1,756.48 Million and INR 77.33 Million respectively during the year under review.

Acute power shortage and increase in cost of fuel during the financial year had a negative impact on the operations of the Company. Despite this, the Company achieved higher profitability on account of cost control and prudent financial management.

With increasing rubber prices, the margins are expected to be under pressure during the next financial year. The Company is taking measures to expand its market share overseas. These measures are expected to result in the growth of the Company''s business globally.

Risk and concerns

The Company does not face any risks other than those that are prevalent in the industry. The Company has taken all possible steps to overcome such risks. The main concerns are the volatility in raw material prices, availability of power and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases will minimise the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk will be minimised through proper planning and natural hedging.

As a part of the overall risk management strategy, all assets are appropriately insured.

Internal control systems

An independent firm of Chartered Accountants carries out quarterly internal audit and the observations are reported to the management. Immediate steps are taken to rectify any discrepancies. All significant audit observations are discussed in the audit committee meetings.

Human resources and industrial relations

The Company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2013 is 301.

Subsidiaries

In accordance with the circular issued by Ministry of Corporate Affairs, the Board of Directors of the Company at their meeting held on May 17, 2013 have approved waiving the requirement to attach the various documents related to the subsidiary companies. Upon request, the annual accounts of the subsidiary companies will be made available for inspection by any member of the Company at the registered office of the Company and that of the subsidiary companies. The consolidated financial statements presented in this annual report include financial results of the subsidiary companies. The details of the subsidiary companies are furnished in the statement pursuant to section 212 of the Companies Act, 1956.

Directors

As per the provisions of Companies Act, 1956, and the articles of association of the Company, the directors of the Company MD Selvaraj and Suresh Jagannathan retire by rotation. Being eligible, they offer themselves for reappointment.

Auditors

Reddy, Goud and Janardhan, Chartered Accountants, Statutory Auditors of the Company, retire in the ensuing annual general meeting and are eligible for reappointment.

Cost accounting records

In terms of the general order issued by the central government and pursuant to the provisions of section 233B of the Companies Act, 1956, the Company has appointed M/s. K.R.S & Associates, Cost Auditors, Coimbatore to audit the cost accounts of the Company for the year ended March 31, 2013. The cost audit report in respect of financial year 2012-2013 will be filed on or before the due date.

Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956 and Rule 5 of The Companies (Cost Accounting Records) Rules, 2011, the cost compliance report for the financial year ended March 31, 2012 has been submitted to the central government.

Directors'' Responsibility statement

In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, the Directors confirm that they have

1. In the preparation of the annual accounts, followed the applicable accounting standards and there are no material departures.

2. Selected relevant accounting policies, applied them consistently and made judgements and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company and of the profit of the Cbmpany for the financial year.

3. Taken proper care in the maintenance of 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.

4. Prepared the annual accounts on a going concern basis.

Other information

Particulars as required by section 217(1) (e) of the Companies Act, 1956, relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are provided as an annexure to this report. There are no employees who are in receipt of remuneration exceeding the specified limit as notified by the government.

The Company has not accepted any fixed deposits and there were no unclaimed fixed deposit as on 31.03.2013.

Corporate governance

A separate report on the compliance with clause 49 of the listing agreement with the stock exchanges and the auditor''s certificate on the compliance form a part of this report.

Cautionary statement

Statements in this report, especially those relating to MD & A giving details of company''s objectives, projections, estimates and expectations may be construed as "forward looking statements" within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgement

The Directors thank the Company''s customers, vendors, investors, business associates and bankers for their support to the Company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the Company.

For the Board of Directors

Coimbatore Sudarsan Varadaraj

17.05.2013 Chairman & Managing Director

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Mar 31, 2012

The Board of Directors take pleasure in presenting the 6th annual report and the audited accounts for the year ended March 31, 2012. The Management Discussion and Analysis (MD&A) Report have been included at the appropriate places in this report.

Abstract of the Financial Results of the Company

(Rs. in Million)

2011-2012 2010-2011

Profit Before Depreciation and Tax 178.59 344.29

Less : Depreciation 39.37 58.68

Profit Before Taxation 139.22 285.61

Less : Provision for Taxation 42.52 105.15

(Add) / Less: Provision for Deferred Tax 1.88 (9.64)

Profit after Tax 94.82 190.10

Less : Adjustment relating to earlier years (Income tax) 0.95 1.40

93.87 188.70

Add : Balance surplus incorporated on amalgamation - 637.15

Add : Opening Surplus 757.54 -

Profit available for appropriation 851.41 825.85

Appropriation

General Reserve 9.39 18.87

Proposed Dividend 25.02 42.54

Dividend Distribution Tax 4.06 6.90

Balance surplus carried to balance sheet 812.94 757.54

Dividend

The directors recommend a dividend of INR 0.50 per equity share of INR 1.00 each. This along with the dividend distribution tax comes to INR 29.08 Million. The dividend will be paid to the registered members, who are in the register of members as on the book closure date and upon approval by the members of the Company at the ensuing annual general meeting. In respect of the dematerialised shares, dividend will be paid to the beneficial owners based on the list provided by the depositories.

Review of Operations and Future Outlook

During the year, under reviewed the Company recorded sales of INR 1,115.45 Million as against INR1,942.38 Million in the previous year. The company earned a net profit of INR 93.87 Million as against INR 188.70 Million in the previous year. The current year figures are not comparable with the previous year on account of the Scheme of Amalgamation and Arrangement implemented during the last year.

The Indian Subsidiaries, Treadsdirect Limited and Titan Tyrecare Products Limited achieved sales of INR 1,943.18 Million and 51.78 Millions respectively during the year under review.

Despite healthy improvement in sales quantities and higher capacity utilisation, high input costs during the second half of the financial year, has affected the bottom line. Through an aggressive marketing strategy, the company is expanding into new products and markets, both domestic and overseas. To meet the projected demand, addition to manufacturing capacities is being implemented.

In October 2011, the company acquired Pincott International Pty Ltd, an Australian company manufacturing buffing blade refills used in the tyre retreading and recycling industry. This wholly owned subsidiary registered sales of INR 47.77 Million for the 9 months ending March, 31 2012. This acquisition brings to the company new technologies and globally respected brand.

Risk and Concerns

The company does not face any risks other than those that are prevalent in the industry. The company has taken all possible steps to overcome such risks. The main concerns are the volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimised the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimised through proper planning and natural hedging.

As a part of the overall risk management strategy, all assets are appropriately insured.

Internal Control Systems

Quarterly Internal Audit is carried out by an independent firm of Chartered Accountants and the observations are reported to the management. Immediate steps are taken to rectify any discrepancies. All significant audit observations are discussed in the audit committee meetings.

Human Resources and Industrial Relations

The Company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2012 is 288.

Subsidiaries

In accordance with the circular issued by Ministry of Corporate Affairs, the Board of Directors of the Company at their meeting held on May 23, 2012 have approved waiving the requirement to attach the various documents related to the subsidiary companies. Upon request, the annual accounts of the subsidiary companies will be made available for inspection by any member of the Company at the registered office of the Company and that of the subsidiary companies. The consolidated financial statements presented in this annual report include financial results of the subsidiary companies. The details of the Subsidiary Companies are furnished in the statement pursuant to section 212 of the Companies Act, 1956.

Directors

During the year CN Srivatsan, director, resigned with effect from November 01, 2011. As per the provisions of Companies Act and the Articles of Association of the Company, the directors of the Company Dr. Jairam Varadaraj and P Vijay Raghunath retire by rotation. Being eligible, they offer themselves for re-appointment.

Auditors

Reddy, Goud and Janardhan, Chartered Accountants, Statutory Auditors of the Company, retire in the ensuing Annual General Meeting and are eligible for re-appointment.

Cost Accounting Records

In conformity with the provisions of the Companies (Cost Accounting Records) Rules, 2011 (notified vide notification No. 52/26/CAB- 2010 dated 24th January 2012) issued by the Ministry of Corporate affairs, the company has appointed M/s K.R.S & Associates, Cost Accountants, Coimbatore as Cost Auditor for the year 2012 - 13.

Directors' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors confirm that they have

1. In the preparation of the annual accounts, followed the applicable accounting standards and there are no material departures.

2. Selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and of the profit of the Company for the financial year.

3. 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.

4. Prepared the annual accounts on a going concern basis.

Other information

Particulars as required by Section 217(1) (e) of the Companies Act, 1956, relating to Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo are provided as an annexure to this report. There are no employees who are in receipt of remuneration exceeding the specified limit as notified by the Government.

The Company has not accepted any fixed deposits and hence there were no unclaimed fixed deposit as on 31.03.2012.

Corporate Governance

A separate report on the compliance with Clause 49 of the Listing Agreement with the Stock Exchanges and the Auditor's Certificate on the compliance form part of this report.

Cautionary Statement

Statements in this report, especially those relating to MD & A giving details of company's objectives, projections, estimates and expectations may be construed as "forward looking statements" within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.

Acknowledgement

The Directors thank the Company's customers, vendors, investors, business associates and bankers for their support to the Company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the Company .

Annexure to Directors' Report

A. Conservation of Energy -

a. Energy conservation measures taken

Energy conservation is one of the primary objectives of the company and measures taken albeit small, is an ongoing process

b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy There are no significant proposals

c. Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods.

There is a marginal reduction in energy costs.

d. Total energy consumption per unit of production

Not applicable

B. Technology absorption

e. Efforts made in technology absorption

i. Research and Development (R&D)

1. Specific areas in which R & D is carried out by the Company

Improvements in products and processes

2. Benefit derived as a result of above R&D Increase in orders from new markets.

3. Future plan of action No significant plans.

4. Expenditure on R& D Rs. in Million

a. Capital : Nil

b. Recurring : 5.19

c. Total : 5.19

d. Total R&D expenditure as a percentage of total turnover : 0.47%

ii. Technology absorption, adaptation and innovation

Not applicable

C. Foreign Exchange Earnings & Outgo

f. Activities relating to exports; initiatives taken to increase exports, development of new export markets for products and services and export plan

The Company is constantly and consciously planning to penetrate unexplored markets to improve its international market share.

g. Total Foreign Exchange earned and used

Foreign Exchange Earned : Rs. 254.10 Million

Foreign Exchange Used : Rs. 12.36 Million

For the Board of Directors

Coimbatore Sudarsan Varadaraj

23.05.2012 Chairman & Managing Director