DIRECTORS' REPORT

TO

THE MEMBERS,

Your Directors are pleased to present the Twenty Eight Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the financial year ended 31st March, 2015.

2.PERFORMANCE REVIEW

The turnover including other income of the Company for the financial year 2014-15 stood at Rs. 15886.54 Lakhs as against last year's Rs. 16236.30 Lakhs. The Profit before tax is reduced to Rs. 2.19 Lakhs as against Rs. 463.11 Lakhs of last year. Profit/(Loss) for the year stood Rs.(59.29) Lakhs as against Rs. 284.47 Lakhs of last year. There was no change in nature of the business of the Company, during the year under review.

3.DIVIDEND

Your Directors have not recommended dividend for the financial year ended 31st March, 2015.

4.SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 stood at 52651756. During the year under review, the Company has not issued any shares or convertible instruments.

5.SUBSIDIARIES, ASSOCIATES & JOINT VENTURES

Your Company does not have any Subsidiary, Associate & Joint Venture Company.

6.CORPORATE GOVERNANCE

The report on Corporate Governance certifying the compliance of Clause 49 of the Listing Agreement is included in the Annual Report. As mandated, the report on Management Discussion and Analysis, Corporate Governance and a certificate from Practicing Company Secretary regarding compliance with the conditions of Corporate Governance forms part of the Annual Report. Further, a declaration signed by Chief Executive Officer affirming compliance with the Company's Code of Conduct by all the Board members and senior management personnel is also given therein.

7.DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Avanti Birla (DIN: 00167903) retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. Accordingly, her re-appointment forms part of the notice of the ensuing Annual General Meeting.

Mr. Shiv Charan Agarwal (DIN 00956339) and Mr. Kasturirangan Narayanan (DIN: 07246744) were appointed as an Additional Independent Director on the Board of the Company w.e.f. 19th May, 2015 and 27th July, 2105 respectively and they hold office upto the date of the ensuing Annual General Meeting. They are proposed to be appointed as Independent Directors of the Company for a period of three years. The Company has received declarations from both the Independent Directors confirming that they meet the criteria of Independence as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The resolution seeking approval of the Members for the appointment of Mr. Shiv Charan Agarwal and Mr. Kasturirangan Narayanan as Independent Directors have been incorporated in the notice of the forthcoming Annual General Meeting of the Company along with brief details about them. The Company has received a notice under Section 160 of the Act along with requisite deposit proposing their appointment.

Mr. Mahender Singh Arora (DIN 01697062), Managing Director & Chief Executive Officer and Mr. Augustine Kurias (DIN 00168563), Non-Executive Independent Directors of the Company has resigned from the Board w.e.f. 15th December, 2014 and 27th May, 2015 respectively.

The Board places on record their appreciation for the services rendered by them.

8.KEY MANAGERIAL PERSONNEL

In accordance with provisions of Section 203 of the Companies Act, 2013 and the rules made there under the Company has appointed Mr. Mukunda Mankar as Chief Financial Officer w.e.f. 27th May, 2014. Upon the resignation of Mr. Mahender Singh Arora as Managing Director & Chief Executive Officer of the company, Mr. Anil Choudhari was appointed as Chief Executive Officer of the Company w.e.f. 29th May, 2015, who has also resigned w.e.f. 31st July, 2015. Ms. Rupa Khanna is the Company Secretary and designated as Key Managerial Personnel (KMP) of the Company.

9.DIRECTORS' RESPONSIBILITY STATEMENT

As required by Section I34(3)(c) of the Companies Act, 2013, your Board of Directors hereby state:

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

(b)that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied them consistently and 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 for the financial year 31st March, 2015 and Statement of Profit & Loss of the Company for the year ended on that date;

(c)that the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d)that the annual accounts have been prepared on a going concern basis and;

(e)that directors has laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

(f)that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

(g)the above statement should be read with Resolution No. 8, 9, 10 and II for approval of Related Party Transaction for the financial year 2014-15 by the members of the Company alongwith the 'Annexure E'.

10.PLEDGE OF SHARES

None of the equity shares of the Directors of the Company are pledged with any banks or financial institutions.

11.PUBLIC DEPOSITS

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

12.DISCLOSURES UNDER SECTION I34(3)(l) OF THE COMPANIES ACT, 20I3:

No material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report.

13.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, required information relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the "Annexure A" to the Directors' Report.

14.CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of your Company has constituted a CSR Committee. As on 31st March 2015, the Committee comprises of three Directors. Your Company has framed a CSR Policy which is carried in this Annual Report. Additionally, the CSR Policy has been uploaded on the website of the Company at www.birlaprecision.in.

The Report on CSR activities is annexed herewith as "Annexure B".

15.EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section I34(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March 2015 made under the provisions of Section 92(3) of the Act in Form MGT 9 is annexed herewith as "Annexure C".

16.AUDITORS

16.1.      Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and rules framed thereunder, M/s. Thakur, Vaidyanath Aiyar & Co., Chartered Accountants, appointed as Statutory Auditors of the Company from the conclusion of the twenty eight Annual General Meeting (AGM) of the Company to be held on 30th September, 2015 till the conclusion of 33rd AGM to be held in the year 2020, subject to ratification of their appointment at every AGM. They have confirmed their eligibility and submitted the Certificate in writing that their appointment, if ratified, would be within the prescribed limit under the Act and they are not disqualified for appointment.

The Auditor's Report does not contain any qualification, reservation or adverse remark.

16.2.Cost Auditors

Pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, on recommendations of Audit Committee, your Directors had appointed Mr. Jayant Galande Cost Auditor to audit the cost accounts of the Company for the financial year ending 31st March, 2016 on a remuneration of Rs. 1,50,000/- p.a (Rupees One Lakh Fifty Thousand Only) plus applicable taxes and reimbursement of out of pocket expenses etc.,. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification.

16.3.Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Martinho Ferrao & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report is annexed herewith as Annexure-D'.

It does not contain any qualification, reservation or adverse remark except for Non appointment of Managing Director or Chief Executive Officer or Manager and in their absence, a whole-time Director, not spending of amount towards Corporate Social Responsibility (CSR) by the Company and the Related Party Transactions were entered into without adequate approval as required under the Companies Act, 2013.

As per the provision of the Section 203 of the Companies Act, 2013, the Company has appointed Mr. Anil Choudhari as Chief Executive Officer (KMP) w.e.f. 29th May, 2015 and the said provision of Section 203 of the Companies Act, 2013 is complied. The company was unable to spend the two per cent of the average net profit of the last three financial years as this is the first year of implementation of CSR Policy and it was time consuming to understand the exact nature of project, location of suitable site, finalization of project etc. However, the Company is in process of identifying the areas for implementation of CSR. The Company would ensure in future that all the provision are compiled to the fullest extent. The information available to the Audit Committee was not adequate to understand the need of the transaction, its benefits to the Company and satisfaction of the principal of Arm's Length. Audit Committee was not able to take an informed decision, hence recommended to the Board to take the members approval. Based on the recommendation of the Audit Committee the Board of Director of the Company has decided to take the approval from the members for the Related Party Transaction. The above statement should be read with Resolution No. 8, 9, 10 and II for approval of Related Party Transaction for the financial year 20I4-I5 by the members of the Company.

17RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the year under review were in the ordinary course of business and on arm's length basis. The Company has not entered into any contract/arrangement/transaction with related parties which could be considered material in nature. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The above statement should be read with Resolution No. 8, 9, I0 and II for approval of Related Party Transaction for the financial year 20I4-I5 by the members of the Company. The detail of the transaction with Related Parties are provided as in "Annexure E" to the Director's Report.

The Company has developed a Related Party Transactions Policy which has been uploaded on the website of the Company and web-link thereto has been provided in the Corporate Governance report.

18.RISK MANAGEMENT

The Company has laid down the procedures to inform to the Board about the risk assessment and minimization procedures and the Board has formulated Risk management policy to ensure that the Board, its Audit Committee and its executive management should collectively identify the risks impacting the Company's business and document their process of risk identification, risk minimization, risk optimization as a part of a risk management policy/ strategy. At present there is no identifiable risk which, in the opinion, of the Board may threaten the existence of the Company.

19.ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has adequate Internal Control System commensurate with its size and nature of business. Internal Audit is periodically conducted by an external firm of Chartered Accountants who monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance all locations of the Company. Based on the report of internal audit function, concern person/department undertakes corrective actions and thereby strengthens the controls. These Internal Audit reports are also reviewed by the Audit Committee. The information available to the Audit Committee was not adequate to understand the need of the transaction, its benefits to the Company and satisfaction of the principal of Arm's Length. In veiw of this the Audit Committee was not able to take an informed decision, hence recommended to the Board to take the members approval. The above statement should be read with Resolution No. 8, 9, I0 and II for approval of Related Party Transaction for the financial year 20I4-I5 by the members of the Company alongwith the "Annexure E".

20.VIGIL MECHANISM / WHISTLE BLOWER POLICY

In line with the best Corporate Governance practices, Company has put in place a system through which the Directors and employees may report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct & Ethics without fear of reprisal. The employees and directors may report to the Compliance officer and have direct access to the Chairman of the Audit Committee. The Whistle-blower Policy is placed on the website of the Company www.birlaprecision.in.

21.BOARD MEETINGS

During the financial year, four (4) Meeting of Board Director were held on 27th May, 20I4, I4th August, 20I4, I2th November, 20I4 and I2th February, 20I5 respectively.

22.AUDIT COMMITTEE

The Board has well-qualified Audit Committee with majority of Independent Directors including Chairman. They possess sound knowledge on accounts, audit, finance, taxation, internal controls etc. As on 3Ist March, 20I5, it comprises of Mr. Augustine Kurias as a Chairman, Mr. Mohandas Shenoy Adige & Mrs. Avanti Birla as member of this Committee. The Company Secretary of the Company acts as Secretary of the Committee.

Mr. Augustine Kurias has resigned from the Board and committee w.e.f 27th May, 20I5.

23.NOMINATION & REMUNERATION COMMITTEE & POLICY

The Board has in accordance with the provisions of sub-section (3) of Section I78 of the Companies Act, 20I3, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. The detail of the same has been disclosed in the corporate governance report.

24.BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 20I3 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various Committees.

25.SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The company, being the guarantor for M/s. Zenith Birla (India) Limited, has received the possession notice under Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) from State Bank of India Mumbai Branch, by which they have taken symbolic possession of the property situated at (i) District Nasik and (ii) One of the property out of three situated at Aurangabad.

26.PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loans and guarantees and has not made any investments. Details of Investments covered under the provisions of Section I86 of the Companies Act, 20I3 are given in the notes to the Financial Statements.

27.PARTICULARS OF EMPLOYEES

The information required pursuant to Section I97 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4 in respect of employees of the Company, will be provided upon request. In terms of Section I36 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office/ Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

28.LISTING OF SHARES

Your Company's shares are listed on BSE under Scrip Code 522I05. The ISIN code of the Company is INE372E0I025.

29.MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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

30.ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

31.ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

32.ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the support given by the Customers, Dealers, Distributors, Suppliers, Bankers, various departments of the Central and State Governments, Local Authorities and also the Shareholders of the Company.

Your Directors would further like to record their appreciation for the unstinted effort put by all Employees of the Company during the year.

For and on behalf of the Board of Directors

S.C.Agarwal

Director

M.S.Adige

Director

Place: Mumbai

Date: I2th August, 20I5