ESCORTS Directors Report

Dear Shareholders,

The Directors have pleasure in presenting the Sixty Seventh Annual
Report for the financial year ended 30th September, 2012.

FINANCIAL RESULTS (Rs. Crores)

Particulars 30.09.12 30.09.11

Gross Revenue 4046.10 3305.78

Excise Duty 103.32 25.96

Net Revenue 3942.78 3279.82

Profit Before Interest, Depreciation,
Amortisation, Exceptional Items & Tax 231.14 189.71

Finance Cost 96.44 55.77

Profit Before Depreciation, Amortisation,
Exceptional Items & Tax 134.70 133.94

Depreciation and Amortisation 48.43 37.97

Profit/(loss) Before Tax, Exceptional Items
& Tax 86.27 95.97

Exceptional Income 1.68 4.65

Profit Before Tax 87.95 100.62

Tax 18.35 (19.47)

Profit After Tax 69.60 120.09

FINANCIAL PERFORMANCE

The Net Revenue of the Company for the year was Rs. 3942.78 Crores as
against Rs. 3279.82 Crores in the previous year showing a growth of
20.21%. Sale of Tractors during the year was 60673 as against 63420 in
the previous year.

Profit before Interest, Depreciation, Amortisation, Exceptional Items &
Tax stood at Rs. 231.14 Crores against Rs. 189.71 Crores in the
previous year.

Profit Before Tax (PBT) stood at Rs. 87.95 Crores against Rs. 100.62
Crores in the previous year and Profit After Tax (PAT) stood at Rs.
69.60 Crores against Rs. 120.09 Crores in the previous year. Earnings
per share stands at Rs. 5.84 for the current year vis a vis Rs. 11.74
last year. MANAGEMENT DISCuSSIoN AND ANALYSIS Management Discussion
and Analysis (refer page 10 to 18), which forms an integral part of
this Annual Report; provides a more detailed analysis on the
performance of individual businesses and their outlook.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 12% i.e. Rs. 1.20
per Equity Share of Rs. 10 each for the year ended 30th September,
2012, payable to those Shareholders whose names appear in the Register
of Members as on the Book Closure Date, subject to the approval of
shareholders at the ensuing Annual General Meeting.

SCHEME OF ARRANGEMENT AND COMPROMISE

A Scheme of Arrangement and Amalgamation under Section 391 to 394 of
the Companies Act, 1956 for the amalgamation of Escorts Construction
Equipment Limited (''ECEL''), Escotrac Finance and Investments Private
Limited (''Escotrac'') and Escorts Finance Investments and Leasing
Private Limited (''EFILL'') (together ''Transferor Companies'') with the
Company (hereinafter referred to as ''the Scheme''), has been sanctioned
by the Hon''ble High Court of Punjab and Haryana at Chandigarh vide its
order dated 9th August, 2012 and upon necessary filings with the
Registrar of Companies, NCT of Delhi and Haryana by the Transferor
Companies and Transferee Company, the Scheme has become effective on
12th October, 2012 and the effect thereof has been given in the
financial statements from 1st October, 2011 being the appointed date
under the Scheme.

Pursuant to the Scheme, the issued and paid up share capital of the
Company has increased from Rs. 105.62 crores to Rs. 122.58 crores as
1,69,58,842 equity shares were allotted to the shareholders of the
transferor companies. The Authorized Share Capital of the Company
stands enhanced to Rs. 1289 crores.

The investments held by the Company in the merging entities have been
cancelled and wherever required the investment held by the later were
transferred to the Escorts Benefit and Welfare Trust in accordance with
the Scheme. Furthermore, pursuant to the scheme, Rs. 97.40 crores,
being the difference between the net assets of the transferor companies
and the purchase consideration issued by the Company is adjusted in
Reserves of the Company.

EMPLOYEE STOCK OPTION SCHEME

Disclosure pursuant to the SEBI (Employees Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999 is enclosed at
Annexure - A and forms part of this Directors'' Report for the year
ended 30th September, 2012.

DIRECTORS

In accordance with the provisions of Companies Act, 1956 and Articles
of Association of Company, Dr. S.A. Dave and Mr. S.C. Bhargava,
Directors retire by rotation at the ensuing Annual General Meeting of
your Company, and being eligible, offer themselves for re-appointment.

The brief resumes and other details relating to the Directors who are
proposed to be appointed/re-appointed, as required to be disclosed
under Clause 49 of the Listing Agreement, forms part of the Report on
Corporate Governance.

Your Directors recommend the appointment/re- appointment of the above
said Directors at the ensuing Annual General Meeting.

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

Information required under Section 217(1)(e) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 is given in Annexure - B and forms an
integral part of this Report.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the good corporate governance
practices. Pursuant to Clause 49 of the Listing Agreement with the
Stock Exchanges, Corporate Governance Report and Auditors'' Certificate
regarding compliance of conditions of Corporate Governance are enclosed
at Annexure - C and forms an integral part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Clause 32 and 50 of the Listing Agreement with Stock
Exchanges, your Company has prepared Consolidated Financial Statements
as per the Accounting Standards applicable to the Consolidated
Financial Statements issued by The Institute of Chartered Accountants
of India. Audited Consolidated Financial Statements along with the
Auditors'' Report are annexed with this Report. subsidiary COMPANIES

The Ministry of Corporate Affairs (MCA), Government of India vide
General Circular No. 2/2011 dated 8th February, 2011 has issued
directions under Section 212(8) of the Companies Act, 1956 granting
general exemption from the applicability of the provisions of Section
212 of the Companies Act, 1956, in relation to the Subsidiary
Companies, subject to the consent of the Board of Directors and
fulfillment of the other conditions specified in the said Circular.

The Board of Directors, in their meeting held on 27th November, 2012
has given its consent for not attaching the Balance Sheet of the
subsidiary companies in terms of the said circular and accordingly, the
documents mentioned in Section 212 of the Companies Act, 1956 relating
to the Company''s Subsidiaries are not attached to the Accounts of the
Company. In terms of the said Circular, your Company has fulfilled the
prescribed conditions and has also made the necessary disclosures in
the consolidated Balance Sheet and further undertakes that the Annual
Accounts of the Subsidiary Companies and the related detailed
information shall be made available to Shareholders of the Company and
its Subsidiary Companies seeking such information. These documents will
also be available for inspection during business hours at the
Head/Corporate office of the Company and of the respective Subsidiary
Companies.

AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and are eligible for
re-appointment. The observations of the Auditors in their Report on
Accounts read with the relevant notes to accounts are self-explanatory.
PARTICuLARS OF EMPLOYEES Information in accordance with provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended regarding employees
is annexed to this Report as Annexure - D.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, (the
Act) your Directors state that:

i. In the preparation of Annual Accounts for the year ended 30th
September, 2012, the applicable accounting standards have been followed
along with proper explanation relating to material departures;

ii. Accounting policies selected and applied are consistent and
judgement and estimates made 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. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and

iv. The Annual Accounts have been prepared on a going concern basis.

PUBLIC DEPOSITS

The Company has not accepted/renewed any Fixed Deposit during the year.
All Fixed Deposits which were due and claimed by the deposit holders
have been paid on time. As on 30th September, 2012, 375 deposits
aggregating to Rs. 0.75 crores matured but were not claimed.
Subsequently, out of the above, 31 deposits of Rs. 0.07 crores have
been repaid till the date of this report.

ACKNOWLEDGEMENT

Your Directors wish to thank the Customers, Dealers, Lenders,
Financiers, Vendors, the Central and State Governments and employees
for their continued support and commitment to the Company.

On behalf of the Board

RAJAN NANDA

Place: Faridabad Chairman &

Date: 27th November, 2012 Managing Director

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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