Directors Report of Hindusthan Udyog Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their 67th Annual Report together with the Audited Accounts of the Company for the financial year ended 31 st March, 2014.

2013 - 2014 2012 - 2013 Rs. in Lakhs Rs. in Lakhs

FINANCIAL RESULTS

Total Revenue 4,616.62 5,399.40

EBITDA 418.51 743.76

Less :

Finance Costs 163.96 128.46

Depreciation 174.00 172.70 Tax Expense 5.77 39.00

Profit after Tax (PAT) 74.78 403.60

Add : Opening Balance in Profit & Loss Account (2,097.02) (2,500.62)

Closing Balance (2,022.24) (2,097.02)

COMPANY PERFORMANCE:

The economic growth in India continued to remain sluggish in the current financial year 2013-14 with the GDP growth rate remaining below 5% for the second consecutive year. In such a challenging economic scenario, your Company continued to perform and maintain positive margins, inspite of a decrease in its Revenues.

Its Profit after tax for the year was '' 74.78 Lakhs with a Total Revenue of Rs. 4,616.62 Lakhs which has reduced the Accumulated Losses of the Company as on year end to Rs. 2,022.24 Lakhs.

Your Company is hopeful of reviving back its growth and profitability margins in the year to come in view of the expected positive momentum in the Indian as well as Global Economy.

The Durgapur Unit continued to remain closed during the year.

DIVIDEND:

In view of the Brought forward unabsorbed accumulated losses, the Directors express their inability to recommend any dividend for the year under review.

CORPORATE GOVERNANCE:

The principles of good Corporate Governance through professionalism, accountability, transparency, trusteeship and control have always been followed by your Company and it has complied with all the applicable provisions of Corporate Governance as per Clause 49 of the Listing Agreements with the Stock Exchanges.

A separate Report on Corporate Governance as prescribed by the Listing Agreement forms part of the Annual Report 2013-14 along with the Auditors'' Certificate on its compliance in Annexure "B".

DIRECTORS:

Mr. Prakash Agarwal, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

A Brief Resume of the above named Director seeking re-appointment is attached to the Notice of the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of The Companies Act, 1956, the Directors state as follows:-

(i) That in the preparation of the Annual Accounts for the financial year ended 31 st March, 2014, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for that period.

(iii) That the Directors had taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of The Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors had prepared the Annual Accounts for the financial year ended 31st March, 2014 on a "going concern" basis.

AUDITORS:

Messrs S. Ghose & Co., Chartered Accountants, Auditors of the Company, hold office till the conclusion of this Annual General Meeting. They have expressed their willingness to continue as the Auditors of the Company, if so re-appointed and have furnished to the Company the requisite certificate in this regards. Accordingly, Shareholders approval will be sought at the ensuing Annual General Meeting of the Company to their re-appointment and remuneration payable to them.

FIXED DEPOSIT:

Your Company has not invited and/or accepted any deposits from the General Public under Sections 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder.

PARTICULARS OF EMPLOYEES

Information required to be given pursuant to the provisions of section 217(2A) of The Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to your Company.

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

Particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under section 217(1 )(e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure "A".

CODE OF CONDUCT:

Your Company has formulated a Code of Conduct which applies to Board Members and Senior Management Personnel of the Company. Confirmations towards adherence to the Code during the Financial Year 2013-2014 have been obtained from all the Board Members and Senior Management Personnel in terms of the requirements of Clause 49 of the Listing Agreement and a declaration relating to compliance of this code during the year under review by all Board Members and Senior Management Personnel has been given by the Managing Director of the Company which accompanies this report.

ACKNOWLEDGEMENTS:

Your Directors would like to thank shareholders, customers, suppliers, bankers, employees and all other business associates for the continuous support given by them to the Company and their confidence in its management.

FOR AND ON BEHALF OF THE BOARD

V.N. AGARWAL Place: Kolkata RITU AGARWAL Date: 30th May, 2014 DIRECTORS

---

Mar 31, 2012

To the Members,

The Directors have pleasure in presenting their 65th Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2012.

2011 - 2012 2010 - 2011 in Lakhs in Lakhs

FINANCIAL RESULTS

Total Revenue 5,900.21 5,194.01

EBITDA 581.06 605.00

Less :

Finance Costs 135.82 106.18

Depreciation 180.87 190.91

Tax for Earlier Year 6.42 __

Profit after Tax (PAT) 257.95 307.91

Add : Opening Balance in Profit & Loss Account (2,758.58) (3,066.49)

Closing Balance (2,500.63) (2,758.58)





COMPANY PERFORMANCE:

During the year under review, the Total Revenue of the Company showed a significant growth of 14% from Rs. 5,194 Lakhs to Rs. 5,900 Lakhs. However, the Export Sales of the Company during the current year was Rs. 1,255 Lakhs as against Rs. 1,438 Lakhs in the previous year, showing a decrease of 13%, which was because of low demand from the Overseas Customers.

There was a reduction in the PAT of the Company (which stood at 4.37%) as compared to the last year and the same was due to an increase in the Finance Costs.

In view of the slowdown and the downtrend being witnessed in the Indian Economy too, the aforesaid Results and the Performance of the Company is considered to be quite satisfactory.

The Current Year's Profit has led to a further reduction in the Accumulated Losses of the Company from Rs. 2,758 Lakhs to Rs. 2,500 Lakhs.

The Durgapur Unit continued to remain closed during the year.

DIVIDEND:

In view of the Brought forward unabsorbed accumulated losses, the Directors express their inability to recommend any dividend for the year under review.

PREFERENCESHARES

The Board of Directors of your Company have obtained a written consent from the Preference Shareholder in terms of Section 106 of The Companies Act, 1956 for postponement of the date of redemption of 60,00,000, 10% Cumulative Redeemable Preference Shares of Rs. 10/- each from 9th March, 2012 to 9th March, 2017.

The necessary Resolution seeking Equity Shareholders' approval to the aforesaid postponement forms part of the Notice of the ensuing Annual General Meeting of the Company.

CORPORATE GOVERNANCE:

The principles of good Corporate Governance through professionalism, accountability, transparency, trusteeship and control have always been followed by your Company and it has complied with all the applicable provisions of Corporate Governance as per Clause 49 of the Listing Agreements with the Stock Exchanges.

A separate Report on Corporate Governance as prescribed by the Listing Agreement forms part of the Annual Report 2011 - 2012 along with the Auditors' Certificate on its compliance in Annexure "B".

DIRECTORS:

Mr. A.K. Ghosh, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

A Brief Resume of the above named Director seeking re-appointment is attached to the Notice of the ensuing Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of The Companies Act, 1956, the Directors state as follows:-

(i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for that period.

(iii) That the Directors had taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of The Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors had prepared the Annual Accounts for the financial year ended 31st March, 2012 on a "going concern" basis.

AUDITORS:

Messrs S. Ghose & Co., Chartered Accountants, Auditors of the Company, hold office till the conclusion of this Annual General Meeting. They have expressed their willingness to continue as the Auditors of the Company, if so re-appointed and have furnished to the Company the requisite certificate to the effect that their re-appointment, if effected, would be within the limits prescribed under section 224(1B) of the Companies Act, 1956. Accordingly, approval of the Shareholders will be sought at the ensuing Annual General Meeting of the Company to the re-appointment of and remuneration payable to Messrs S. Ghose & Co., Chartered Accountants as Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

FIXED DEPOSIT:

Your Company has not invited and/or accepted any deposits from the General Public under Sections 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder.

PARTICULARS OF EMPLOYEES

Information required to be given pursuant to the provisions of section 217(2A) of The Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to your Company.

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

Particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under section 217(1)(e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure "A".

CODE OF CONDUCT:

Your Company has formulated a Code of Conduct which applies to Board Members and Senior Management Personnel of the Company. Confirmations towards adherence to the Code during the Financial Year 2011-2012 have been obtained from all the Board Members and Senior Management Personnel in terms of the requirements of Clause 49 of the Listing Agreement and a declaration relating to compliance of this code during the year under review by all Board Members and Senior Management Personnel has been given by the Managing Director of the Company which accompanies this report.

ACKNOWLEDGEMENTS:

Your Directors would like to thank shareholders, customers, dealers, suppliers, bankers, employees union and all other business associates for the continuous support given by them to the Company and their confidence in its management.







FOR AND ON BEHALF OF THE BOARD



V. N. AGARWAL Place: Kolkata RITU AGARWAL Date: 29th May, 2012 DIRECTORS

---

Mar 31, 2011

The Directors have pleasure in presenting their 64th Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2011.

2010 - 2011 2009 - 2010 Rs. in Lakhs Rs. in Lakhs FINANCIAL RESULTS

Total Income 5,548.03 5,145.12

Profit before Interest and Depreciation 605.00 759.50 Deduction :

Interest 106.18 116.44

Depreciation 190.91 198.60

Tax for Earlier Year - 6.18

Net Profit after Tax 307.91 438.28

Add : Brought forward Profit/(Loss) (3,066.49) (3,504.77)

Balance carried forward to Balance Sheet (2,758.58) (3,066.49)

COMPANY PERFORMANCE:

During the year under review, the Total Turnover of the Company increased from Rs. 5,145 Lakhs to Rs. 5,548 Lakhs resulting into a growth of 8%.

However, there was a marginal reduction in the Profits of the Company during the year compared to Previous Year because of adverse market conditions in view of Global Economic and Industrial Slowdown.

The Accumulated Losses of the Company reduced from Rs. 3,066 Lakhs to Rs. 2,758 Lakhs on adjustment of Current Year’s Profits.

The Durgapur Unit continued to remain closed during the year.

DIVIDEND:

In view of the Brought forward unabsorbed accumulated losses, the Directors express their inability to recommend any dividend for the year under review.

LISTING OF NEW EQUITY SHARES WITH CALCUTTA STOCK EXCHANGE:

As reported in the last year’s Annual Report, 8,49,625 New Equity Shares allotted to the Equity Shareholder of ACC-Nihon Castings Limited pursuant to the Scheme of Amalgamation were listed with the Bombay Stock Exchange.

The same were also listed with the Calcutta Stock Exchange during the year 2010-2011 with effect from 16th June, 2010.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated in clause 49 of the Listing Agreements with the Stock Exchanges is appended below :-

A. BUSINESS

The Company is engaged in the manufacturing of Alloy and Stainless Steel Castings with stringent quality requirements required in Turbines, Metal Shredding, Heavy Earth Equipment, Pumps, Valves and Compressors and other Heavy Engineering Industries. It is also engaged in the manufacturing of Material Handling Equipments of varied nature required in the Mines, Cement Plants, Power Plants and Other General Engineering Sectors. The manufacturing units are located in Kolkata and Nagpur.

B. REVIEW OF OPERATIONS & FUTURE PROSPECTS

The Two Induction Furnaces with dual track record at the Nagpur Unit, which were made fully operational during the last year, have enabled the Company to maintain its bottom-line.

During the year 2010-2011 the Company was primarily focused on the development of different kinds of Castings under various grades so as to meet the requirements of its Customers.

In fact, the Company has decided to maintain the development of new varieties of Products as its primary motive in the coming year also.

It is also taking steps for major quality improvements which will enable it to meet the requirements of international regulations and procure bulk export orders from global engineering majors.

Most of the Industries dealing in Turbines, Power, Pumps, Compressors, Valves, Traction and Locomotives will be in need of components which we are manufacturing in substantial volumes in view of their expected expansion plans. Their need will benefit the growth of the Overall Foundry Industry and therefore the Future Prospects of the Industry in which we are operating seems bright and promising.

In view of above, your Company hopes to enhance its profitability in the coming years.

C. OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Company sees opportunity in the development and supply of critical castings required in High Alloy Steel or Iron Segment. In addition to catering to the requirements of mostly the Ferrous Segments, the Company also sees the scope for growth in the Non-Ferrous Segment.

Further, good opportunity also exists for the Company to develop and cater new export markets.

For capturing the aforesaid opportunities, the Company is continuously carrying on improvement of its infrastructure and other facilities and workings which will enable it to yield better results in the near future.

However, the main causes of concern of your Company in the year to come are:-

i) Demand for the Company’s highly sophisticated steel casting products in few critical segments only.

ii) Stagnancy in the Market Demand due to General Economic conditions.

iii) Dependence on a few number of Customers in the Export Market. Any change in their requirements will have a direct impact on the Exports Volume of the Company.

iv) Currency Fluctuations in adverse direction.

v) Fluctuations in raw material prices on the fixed price orders which will have a consequential effect on the bottom-line.

D. INTERNAL CONTROL SYSTEM

The Company has internal control procedures commensurate with the nature of its business and size of its operations. The objective of these procedures are to ensure efficient use and protection of the Company’s resources, accuracy in financial reports and due compliance of statutes and Company policies and procedure.

The Internal Audit function is conducted by a Senior Management Team of the Company. The reports of such audit, the progress in implementation of recommendations contained in such reports and the adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

E. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Industrial Relations were cordial during the year under review. At all levels, employees of the Company are fully committed to the growth of the Company and there was no loss of work due to any industrial relation problem during the year.

CORPORATE GOVERNANCE:

The principles of good Corporate Governance through professionalism, accountability, transparency, trusteeship and control have always been followed by your Company and it has complied with all the applicable provisions of Corporate Governance as per Clause 49 of the Listing Agreements with the Stock Exchanges.

A separate Report on Corporate Governance as prescribed by the Listing Agreement forms part of the Annual Report 2010 - 2011 along with the Auditors’ Certificate on its compliance in Annexure "B”.

DIRECTORS:

Mrs. Ritu Agarwal, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

A Brief Resume of the above mentioned Director seeking re-appointment is attached to the Notice of the ensuing Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors state as follows:-

(i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2011, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for that period.

(iii) That the Directors had taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors had prepared the Annual Accounts for the financial year ended 31st March, 2011 on a "going concern” basis.

AUDITORS:

Messrs S. Ghose & Co., Chartered Accountants, Auditors of the Company, hold office till the conclusion of this Annual General Meeting. They have expressed their willingness to continue as the Auditors of the Company, if so re-appointed and have furnished to the Company the requisite certificate to the effect that their re-appointment, if effected, would be within the limits prescribed under section 224(1B) of the Companies Act, 1956. Accordingly, approval of the Shareholders will be sought at the ensuing Annual General Meeting of the Company to the re-appointment of and remuneration payable to Messrs S. Ghose & Co., Chartered Accountants as Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

FIXED DEPOSIT:

Your Company has not invited and/or accepted any deposits from the General Public under Sections 58A and 58AA of the Companies Act, 1956 and the Rules framed there under.

PARTICULARS OF EMPLOYEES

Information required to be given pursuant to the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to your Company.

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

Particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under section 217(1)(e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure "A”.

CODE OF CONDUCT:

Your Company has formulated Code of Conduct which applies to Board Members and Senior Management Personnel of the Company. Confirmations towards adherence to the Code during the Financial Year 2010-2011 have been obtained from all the Board Members and Senior Management Personnel in terms of the requirements of Clause 49 of the Listing Agreement and a declaration relating to compliance of this code during the year under review by all Board Members and Senior Management Personnel has been given by the Managing Director of the Company which accompanies this report.

ACKNOWLEDGEMENTS:

Your Directors would like to thank shareholders, customers, dealers, suppliers, bankers, employees union and all other business associates for the continuous support given by them to the Company and their confidence in its management.

FOR AND ON BEHALF OF THE BOARD

V. N. AGARWAL Place: Kolkata RITU AGARWAL

Date: 30th May, 2011 DIRECTORS

---

Mar 31, 2010

The Directors have pleasure in presenting their 63rd Annual Report together with the Audited Accounts of the Company for the financial year ended 31 st March, 2010.



2009-2010 2008-2009

Rs. in Lakhs Rs. in Lakhs

FINANCIAL RESULTS

Profit before Interest and Depreciation 759.50 874.71

Deduction :

Interest 116.44 198.00

Depreciation 198.60 162.31

Provision for Fringe Benefit Tax - 9.61

Provision for Deferred Tax - 14.72

Tax for Earlier Year 6.18 1.40

Net Profit after Tax 438.28 488.67

Add: Brought forward Profit/(Loss) (3,504.77) (3,993.44)

Balance carried forward to Balance Sheet (3,066.49) (3,504.77)



AMALGAMATION OF ACC-NIHON CASTINGS LIMITED WITH THE COMPANY:

As reported in the last years Annual Report, the Honble High Court at Calcutta had passed an Order dated 23.03.2009 sanctioning the Scheme of amalgamation of ACC-Nihon Castings Limited (ANCL) with our Company, which became effective on 20.04.2009.

Pursuant to the aforesaid Scheme, 8,49,625 Equity Shares of Rs. 10/- each and 60,00,000, 10% Cumulative Redeemable Preference Shares of Rs. 10/- each were allotted as fully paid up on 29.07.2009 respectively to the Equity and Preference Shareholder of ANCL.

The New Equity Shares so allotted were also listed with the Bombay Stock Exchange Limited with effect from 14.09.2009.

COMPANY PERFORMANCE:

In the year 2009-2010 the Company witnessed decrease in its Sales both in terms of volume and value specially in its Export Business to the U.S. and Europeon Markets due to the impact of Global Economic Meltdown.

Inspite of decrease in Sales, the Companys Net Profit before tax as a percentage of Total Sales during the year has increased to 9.01% as compared to 8.27% in the previous year and the same was because of the various measures taken up by the Company for reducing its costs and improving the profitability.

The performance of Material Handling Division, being low tech business, remained subdued. The Durgapur Unit continued to remain closed during the year.

With gradual signs of recovery and growth in the Economy, your Directors feel that the future prospects of the Company in terms of its Turnover and Profit appears to be positive.

DIVIDEND:

In view of the Brought forward unabsorbed accumulated losses, the Directors express their inability to recommend any dividend for the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated in clause 49 of the Listing Agreements with the Stock Exchanges is appended below:-

A. BUSINESS

The Company is engaged in the manufacturing of Alloy and Stainless Steel Castings with stringent quality requirements required in Turbines, Metal Shredding, Heavy Earth Equipment, Pumps, Valves and Compressors and other Heavy Engineering Industries. It is also engaged in the manufacturing of Material Handling Equipments of varied nature required in the Mines, Cement Plants, Power Plants and Other General Engineering Sectors. The manufacturing units are located in Kolkata and Nagpur.

B. REVIEW OF OPERATIONS & FUTURE PROSPECTS

The Two Induction Furnaces with dual track record, which were installed at the Nagpur Unit in the Year 2008-2009, were made fully operational during the year. The Usage of same has enabled the Company to maintain its bottomline.

Because of the downturn in the U.S. and the Europeon Markets during the year 2009-2010 the Company was primarily focused on the development of different kinds of Castings under various grades so as to meet the requirements of its Customers.

In fact, the Company has decided to maintain the development of new varieties of Products as its primary motive in the coming year also.

It is also taking steps for major quality improvements which will enable it to meet the requirements of international regulations and procure bulk export orders from global engineering majors.

Most of the Industries dealing in Turbines, Power, Pumps, Compressors, Valves, Traction and Locomotives will be in need of components which we are manufacturing in substantial volumes in view of their expected expansion plans. Their need will benefit the growth of the Overall Foundry Industry and therefore the Future Prospects of the Industry in which we are operating seems bright and promising.

In view of above, your Company hopes to enhance its profitability in the coming years.

C. OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Company sees opportunity in the development and supply of critical castings required in High Alloy Steel or Iron Segment. In addition to catering to the requirements of mostly the Ferrous Segments, the Company also sees the scope for growth in the Non-Ferrous Segment.

Further, as a gradual recovery in the Global Economy is taking place from the effects of recession, good opportunity now exists for the Company to develop and cater new export markets.

For capturing the aforesaid opportunities, the Company is continuously carrying on improvement of its infrastructure and other facilities and workings which will enable it to yield better results in the near future.

However, the main causes of concern of your Company in the year to come are :-

i) Demand for the Companys highly sophisticated steel casting products in few critical segments only.

ii) Stagnancy in the Market Demand due to General Economic conditions.

iii) Dependence on a few number of Customers in the Export Market. Any change in their requirements will have a direct impact on the Exports Volume of the Company.

iv) Currency Fluctuations in adverse direction.

v) Fluctuations in raw material prices on the fixed price orders which will have a consequential effect on the bottomline.

D. INTERNAL CONTROL SYSTEM

The Company has internal control procedures commensurate with the nature of its business and size of its operations. The objective of these procedures are to ensure efficient use and protection of the Companys resources, accuracy in financial reports and due compliance of statutes and Company policies and procedure.

The Internal Audit function is conducted by a Senior Management Team of the Company. The reports of such audit, the progress in implementation of recommendations contained in such reports and the adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

E. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Industrial Relations were cordial during the year under review. At all levels, employees of the Company are fully committed to the growth of the Company and there was no loss of work due to any industrial relation problem during the year.

CORPORATE GOVERNANCE:

The principles of good Corporate Governance through professionalism, accountability, transparency, trusteeship and control have always been followed by your Company and it has complied with all the applicable provisions of Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchanges.

A separate Report on Corporate Governance as prescribed by the Listing Agreement forms part of the Annual Report 2009-2010 along with the Auditors Certificate on its compliance in Annexure "B".

DIRECTORS:

Mr. A.K. Chakravarty ceased to be a Director of the Company with effect from 13.02.2010 due to his sad demise.

The Board has placed on record its appreciation for the valuable services rendered by him during his association with the Company as a Director.

Mr. Prakash Agarwal, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

A Brief Resume of the above mentioned Director seeking re-appointment is attached to the Notice of the ensuing Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, the Directors state as follows:-

(i) That in the preparation of the Annual Accounts for the financial year ended 31 st March, 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for that period.

(iii) That the Directors had taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. They confirm that there are adequate systems and controls for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors had prepared the Annual Accounts for the financial year ended 31st March, 2010 on a "going concern" basis.

AUDITORS:

Messrs S. Ghose & Co., Chartered Accountants, Auditors of the Company, hold office till the conclusion of this Annual General Meeting. They have expressed their willingness to continue as the Auditors of the Company, if so re-appointed and have furnished to the Company the requisite certificate to the effect that their re-appointment if effected would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956. Accordingly, approval of the Shareholders will be sought at the ensuing Annual General Meeting of the Company to the re-appointment of and remuneration payable to Messrs S. Ghose & Co..Chartered Accountants as Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting.

FIXED DEPOSIT:

Your Company has not invited and/or accepted any deposits from the General Public under Sections 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder.

PARTICULARS OF EMPLOYEES

Information required to be given pursuant to the provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are not applicable to your Company.

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

Particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required under section 217(1 )(e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure "A".

CODE OF CONDUCT:

Your Company has formulated Code of Conduct which applies to Board Members and Senior Management Personnel of the Company. Confirmations towards adherence to the Code during the Financial Year2009-2010 have been obtained from all the Board Members and Senior Management Personnel in terms of the requirements of Clause 49 of the Listing Agreement and a declaration relating to compliance of this code during the year under review by all Board Members and Senior Management Personnel has been given by the Managing Director of the Company which accompanies this report.

ACKNOWLEDGEMENTS:

Your Directors would like to thank shareholders, customers, dealers, suppliers, bankers, employees union and all other business associates for the continuous support given by them to the Company and their confidence in its management.

FOR AND ON BEHALF OF THE BOARD

V. N. AGARWAL

Place: Kolkata RITU AGARWAL

Date: 31 st May, 2010 DIRECTORS