Directors Report of Krypton Industries Ltd.

Mar 31, 2015

Dear Members,

The Directors present the 25th Annual Report together with the audited accounts of your company for the year ended 31st March 2015.

1. FINANCIAL RESULTS

During the year under review, the company achieved an aggregate income of Rs.3659.41 Lakhs. The highlights of the financial results are as under:

Amount in (Rupees in '000)

Current Year Previous Year 2014-2015 2013-2014

Sales 363254.80 425662.71

Other Income 2686.09 2525.27

Gross Total Income 365940.89 428187.98

Profit before Interest, Depreciation 39810.15 42951.38 & Tax

Interest 19328.19 15559.09

Depreciation 16406.59 13848.61

Profit before Exceptional Items & 4075.37 13543.68 Extraordinary items and Tax

Exceptional Items - -

Profit before Tax and after Exceptional 4075.37 13543.68 Items & Extraordinary Items

Provision for Taxation 1761.34 4518.86

Profit after Tax 2314.03 9024.82

Balance in P&L A/c brought Forward 106474.63 97449.81

Adjustments under Schedule II of Companies (1192.34) - Act,2013

Balance Available for Appropriation 107596.32 106474.63

Proposed Dividend 0.00 0.00

Tax on Proposed Dividend 0.00 0.00

Transfer to General Reserve 0.00 0.00

Balance carried to Balance Sheet 107596.32 106474.63

2. OVERVIEW AND REVIEW OF OPERATION

A review on division wise performance of the company is furnished below:-

Tyre Division

The total income of the Tyre division for the year 2014-15 amounted to Rs.1635.53 lakhs compared to Rs.2206.51 lakhs of in the previous year. The profit before tax amounted to Rs. 73.97 lakhs as compared to profit of Rs.71.15 lakhs previous year.

The Company is in process of effective reduction in its cost by growing its productivity keeping the product quality intact. With the reorganization of the merged units, the overall income reduced having no adverse effect on profit.

Sadhurhat division

The unit has started its commercial production with effect from 01.12.2013. The unit is engaged in manufacturing MCP Tubeless Tires for domestic market. The unit reported an income for the full year 2014-15 amounted to Rs. 671.36 lakhs as compared to the previous year Rs. 175.15 Lakhs (for a period of 4 months w.e.f. 01.12.2013) and the unit reported the Profit before tax for the year 2014-15 of Rs. 47.45 lakhs compared with previous year of Rs. (3.97) lakhs.

Due to preliminary & pre operative expenditure written off in its first financial year the unit reported loss during the previous year whereas from the current year the unit has started making profit. The unit should increase its market reach and higher sales in the current year to give better performance.

Wheel division

The total income of this unit for the year 2014-15 amounted to Rs.348.71 lakhs compared to Rs.575.88 lakhs in the previous year. As in the financial year 2014-15, the units has done the job work for other group units at cost as a part of restructuring process which resulted in change in structure of unit.

The unit reported the profit before tax for the year 2014-15 amounted to Rs.3.95 lakhs compared to Rs. 106.46 lakhs in the previous year.

Plastic division

The total income of this unit for the year 2014-15 amounted to Rs.145.08 lakhs compared to Rs.94.80 lakhs. The unit reported the profit before tax for the year 2014-15 amounted to Rs.26.21 lakhs compared to the loss of Rs. (2.53) lakhs.

The unit should perform better in the current years due to the increase in production and capacity utilization.

Footwear division

The total income of the footwear division for the year 2014-15 amounted to Rs. 946.30 lakhs compared to Rs1556.99 lakhs in the previous year. The unit reported a loss before tax of Rs. (129.81) lakhs during the year compared to loss of Rs. (47.87) lakhs in the previous year.

Due to adverse market condition and sluggish demand, the unit reported a loss. The Company is taking steps to change the product and customer mix for a stable business and specifically moving towards high value added products and expecting turnaround in this business segment and also we are working hard for further cost reduction for better bottom line. Our tie up with VKC group has also started giving positive results.

Engineering division

The total income of this unit for the year 2014-15 amounted to Rs.607.24 lakhs compared to Rs.497.71 lakhs in the previous year.

The unit posted the profit before tax for the year 2014-15 amounted to Rs.16.05 lakhs compared to Rs. 8.15 lakhs.

The Indian Rehab Care Equipment Market has stated accepting the Brand "iCare" which was very encouraging for our company and the same is also noticeable from the current year itself.

Company has always taken a long term view of this business and the company is also in process to come with more similar products for the disabled persons in the coming year. And the company is also expecting very high demand due to weaker rupee and stronger USD & Chinese Yuan due to which we will be very competitive not only in India but all around the world. This currency situation will help us to increase our sales quickly.

2. DIVIDEND

In order to strengthen the financial position of the company the Board of Directors have decided not to recommend any dividend for the Financial Year ended 31st March, 2015 and plough back the profits of the company in its business.

3. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES

At present, the company does not have any subsidiary, Joint ventures or associates.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Listing agreement with Stock Exchange:-

A. Industry Structure & Developments:-

Krypton Industries Limited (KIL) had an average performance during last year due to difficult market conditions and high input cost and manufacturing expenses.

The company is mainly focused in market expansion in Indian Market as well as overseas market for its tire and hospital/disabled support equipment business. Company will open its sales depot in different states for all of its products which will help to reach smaller dealer and increase market penetration. Company is also planning to open sales & marketing office in Europe for our rehab care parts sales & for bicycle tires. Company is also focusing on high end products for disables persons and to increase its product portfolio. We have started working on de bottle necking our production facilities and to upgrade our machinery with very minimal capital outlay which help us to enhance our production capacity.

The company had a negative growth from its footwear business and the company has also restructured the business to get better results in the current and future years. The company is also focusing to change the product and customer mix for a stable business. Company is also working in reduction of cost and increasing its efficiency. In footwear segment also we are looking to enter safety shoe segment which will help company to achieve high turnover and high profitability.

B. Outlook and opportunities

Your Company has identified the following opportunities and future building business areas:

The company is mainly focused on its tire and rehab care business which also derives better profitability compare to previous year regardless marginal growth of sales. Primarily, the PU tire for Bicycle, rehab care products and industrial application tire business will be our main focus this year and years to come for the domestic as well as international market.

With hospital / disabled support equipment business, the company is now recognized as a serious good quality supplier, the future looks very promising. With some new quality certification of the products as required for government orders, this product line will be better positioned to do business with government tenders, defense, NGO's & hospitals. With new government in place, Medical support to every person seems a focus area for the new government, there will be more opportunities for this business and the company is also in process to come with more new advanced higher quality products for disabled persons.

With new structuring of the footwear division, the cost control and redefining on the business process will give incremental benefit in future. Safety shoes business has huge potential in coming future and we are working on it to give quality product to Indian markets.

C. Outlook on threats, risk and concern

1. Business Risks:

Company is more focused in its tires and wheel business, where the PU Bicycle tires, is comparatively a new product in this line and is also in its growing stage of market establishment and business stability. Our tires are completely new to the market and we have a tough competition with rubber tires and wheels which were easily available in the market and globally prices of rubber has decreased substantially which can impact our sales.

The company also had a tougher competition, in relation to its Hospital / disable support equipments business with that of Chinese products in India as well as across the world. Also foreign currency fluctuation can have adverse as well as positive impact our business.

Company is normally engaged in import of Raw Materials and export sales during its course of business which exposes it to exchange fluctuation and crude & petrochemicals prices, cost of manufacturing are also the areas of concern which we are mitigating it by cost reduction in each area possible.

Company also needed to improve its overall performance in both monetary as well as non monetary terms by emphasizing its product quality & market capture and increasing its sales and reducing its overall cost of sales including reduction of Cost of raw materials and other fixed and variable overheads.

2. Financial Risks:

Majority of raw material are imported, so any major fluctuation in US$ can affect the performance of the company. Although foreign exchange risks somewhat balanced by exports and company is regularly covering such risk.

The interest cost is still on the higher side although RBI started reducing interest rates and banks will take some time to pass on the benefit to borrowers. Company is exploring the other means to reduce interest cost.

3. Legal & Statutory Risks

Company is complying regularly with all the regulatory requirements with respect to manufacturing, taxations, statutory requirements, company law, SEBI etc, with new laws coming in, this exercise will need more inputs which company is working towards.

4. Political Risks

Any major change in local, national or international can effect the business but as, at the moment, company does not have any business with government entities, the risk is minimal. Although company is trying to secure government business at the moment, this can impact positively as well as negatively in a small percentage of growth of the company.

D. Internal Control System and their adequacy:

Your Company believes that Internal Control is a required principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

The company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. Internal auditor performs their duty and audit committee reviews internal auditor reports and other reports and provides suggestions for improvement /takes corrective actions. The committee also meets the Company's Statutory Auditors to ascertain, interalia, their views on the Adequacy of Internal Control Systems in the company and keeps Board of Directors informed from time to time.

E. Financial Performance

Over all financial Performance of the company is on right track but needs lot of improvements and which your company will surely do this year and in the years to come.

F. Human Resource Developments:

During the fiscal 2014-2015 company has 270 Persons on its payroll. Apart from this company has generated indirect employment to more than 500 persons in nearby locations. Company is working on to restructure the total organization to help its growth with further recruitment in the top and middle management level at different positions.

5. SHARE CAPITAL

The paid up equity share capital as at March 31, 2015 is Rs. 14.69 Crores, divided into 1,46,97,130 equity shares of face value Rs. 10 each.

During the year under review, the Company has not issued any equity shares with differential rights or sweat equity shares or under any employee stock option.

6. DEPOSITS

During the year under review, the Company has neither invited nor accepted any fixed deposits from the public within the meaning of section 73 of the Companies Act, 2013 and the rules made there under.

The company has also repaid all the deposits within 31st March, 2015 which were accepted before the Commencement of the Companies Act, 2013 and falls in ambit of the Deposits as specified under Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of the loans given, Investments made, Guarantees or Securities provided during the year have been disclosed under the Note no. 13, 14 & 32 to the financial statement.

8. PARTICULARS OF THE CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES

All transactions/ contracts/arrangements entered with the Related Parties as defined under section 188 of the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the Ordinary course of business and on arm's length basis and without any conflict of interest. Moreover, the company has not entered into any transaction of material nature with the promoters, directors, management, subsidiaries or any significant related party during the financial year that may have potential conflict with the interests of the company at large.

Since all the related party transactions entered into by the Company were in the ordinary course of the Business and on an arm's length basis. Thus, Form AOC-2 is not applicable to the company.

The details of the transactions/ contracts /arrangements held with the related parties have been disclosed in the Notes to the financial statements.

9. MATERIAL CHANGES AND COMMITMENTS

There has been no material changes have been occurred affecting the financial position of the company in between the period from the close of the financial year of the company to which the Balance Sheet relates and the date of the report.

10. AUDITORS

Statutory Auditors & their Report

M/s. Jagdish Agarwal & Associates (Registration No.320253E), Auditors of the Company have been appointed at the Annual General Meeting on August 27, 2014 for a term of 3 years, subject to the ratification by the members ateach Annual General Meeting. The Company has received consent of the Auditors for continuation of office for the Current year.

The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2015 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark.

Secretarial Audit Report

Pursuant to section 204 of the Companies Act, 2013, the Board has appointed M/s M.R. & Associates, Practicing Company secretaries to undertake the audit of Secretarial and other related records of the company. The Secretarial Audit Report issued by M/s MR & Associates in Form MR-3 for the financial year ended 31st March, 2015, is also annexed herewith in Annexure-VI. Your directors wish to clarify the observations made by the Auditors regarding the cases being shown as pending in the Bankshall Courts which were actually being resolved during the past years itself and for which a letter is being sent to the Registrar for removal of such cases from the pending list.

Your Directors also clarify that the listing fees of the Calcutta Stock Exchange for the financial year is not being paid as the said stock exchanges is suspended from long and expected that the exchange will get de-recognised soon.

Cost Audit & Records

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 the Company is only required to maintain its cost records in respect of the products being manufactured by the company. The Cost records are duly maintained by the company and the same is being also filed with the Registrar as required.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGES EARNINGS AND OUT GO:

The information as required under clause (m) sub section (3) of section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rule, 2014 is annexed herewith in Annexure- I.

12. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 forming part of the Directors Report is duly attached herewith in Annexure-II.

13. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL IMPACTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There were no significant & material orders passed by the regulators or courts or tribunal which would impact the going concern status and future operations of the company.

14. LISTING AT STOCK EXCHANGES

The equity shares of the company are listed on the stock exchanges at Kolkata, Mumbai, Delhi and Jaipur. The annual Listing fees have been paid for the financial year 2014-2015.

15. CORPORATE GOVERNANCE

A separate section on corporate governance together with a certificate from the Auditors of the company regarding full compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges forms a part of the Report under Annexure- IV.

16. MEETINGS

During the year under review, ten Board Meetings and four Audit Committee Meetings were convened and held, the dates and attendance in by each Directors are given in the Corporate Governance Report. The maximum time gaps between the Meetings were within the period as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The details of constitution of the Board and its Committee are given in the Corporate Governance Report.

17. DIRECTORS

The company at its Board Meeting held on 18th March, 2015, has accepted the resignation of Mr. Tansukh Gulgulia (DIN:00404343) from the board of the Company with immediate effect and also appointed Mr. Ravi Prakash Pincha (DIN:00094695) and Mrs. Vimala Devi Bardia (DIN: 07125170) as an Additional Director who will holds the office till the conclusion of the ensuing Annual General Meeting.

The Company has received a notice as per the provisions of section 160 of the companies Act, 2013, from a member proposing the appointment of Mr. Ravi Prakash Pincha. The company has also received a confirmation from Mr. Ravi Prakash Pincha stating that he meets the criteria as provided under section 149(6) of the companies Act, 2013 and in the opinion of Board he is a person of integrity and posses relevant expertise and experience for being appointed as Independent Director.

In accordance with the provision 152 (6) of the Companies Act, 2013 Mr. T C Bachhawat (DIN:00580356), retires by rotation as director at the forthcoming Annual General Meeting and is eligible for reappointment.

None of the Directors of the company are disqualified for being appointed as Directors as specified under section 164 of the Companies Act, 2013 and the rules made thereunder.

18. DECLARATION BY INDEPENDENT DIRECTOR

The Company has duly received the declaration from all the Independent Directors as laid under section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

19. KEY MANAGERIAL PERSONNEL

Mr. Vinay Sipani, Senior Accounts Executive of the company who is also a member of the Institute of the Chartered Accountants of India has been designated as the Chief Financial Officer of the Company with effect from September 30, 2014.

Mr. Tarun Kumar Das, Company Secretary has resigned from the service of the company with effect from September 1, 2014 and Miss Arti Bothra as the Company Secretary cum Compliance officer of the company has been appointed on September 30, 2014.

20. REMUNERATION POLICY

The Board, on recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management and their remuneration which includes criteria for performance evaluation of non-executive and executive directors. A detailed Policy is also annexed herewith in Annexure- V.

21. RISK MANAGEMENT POLICY

In accordance with the Clause 49 of the Companies Act, 2013, the Board of Directors of the Company are responsible for framing, implementing and monitoring the Risk management plans of the Company. The Company has also framed a Risk Management Policy defining the roles and responsibilities of the Committee and the same has been approved by the Board of Directors of the Company.

The Risk Management Policy is available on the website of the company, www.kryptongroup.com.

22. VIGIL MECHANISM/WHISTLE BLOWER POLICY

In accordance with the provision of the Companies Act, 2013 read with the Rules made therein and clause 49 of the Listing Agreement, every listed company shall establish a Vigil Mechanism for the directors and employees to report their genuine concerns and grievances. A framed Vigil Mechanism is available on the company's website, www.kryptongroup.com.

The Audit Committee is entrusted with the responsibility to oversee the Vigil Mechanism.

23. BOARD EVALUATION

In accordance with the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out a formal Annual performance evaluation of its own performance, directors individually as well as the working of its various committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report.

24. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors hereby states:

* That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any;

* That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are responsible and prudent so as to give true and fair view of the state of affairs of the company at the end of the financial year and of the profit of your company for that period.

* That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities, and

* That the directors have prepared the annual accounts on a going concern basis and

* That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively, and

* That the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

25. PARTICULARS OF EMPLOYEES

The disclosure required under section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith in Annexure- III.

Further, in accordance with the section 197(12) of the Companies Act, 2013 read with the Rules 5(2) & 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the company hereby confirm that:

* There was no employee employed throughout the financial year 2014-15 who was in receipt of remuneration in the financial year which, in aggregate was not less than sixty lakh rupees;

* There was no employee employed for a part of the financial year 2014-15 who was in receipt of remuneration for any part of the financial year which, in aggregate was not less than five lakh rupees per month;

* There was no employee employed throughout the financial year 2014-15 or a part thereof, who was in receipt of remuneration in the financial year which, in aggregate is in excess of that drawn by the Managing Director or whole time director or manager and hold by himself or along with his spouse and dependent children, not less than the two percent of the equity shares of the company.

Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

26. ISO 9001-2008 & IS 7454

Your company operates in ISO 9000 quality assurance system as per the ISO 9001-2008 standards. The Audit was duly carried out during the year 2014-15. The new standards are mainly customer oriented and they will help our Company to get much better controls to improve with best customer satisfaction standards.

The company has been granted the license by Bureau of Indian Standards (BIS) to use Standard Mark i.e. IS 7454 in respect of Rehabilitation equipment- Wheelchairs Folding and Adult size according to which we will manufacture highest quality of wheelchairs as per the specification.

27. APPRECIATION

Your Directors take this opportunity to record their appreciation for the continued and sustained support and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Suppliers, Transporters, Employees, Shareholders and all other Stakeholders.

Cautionary Note:

Certain statements made in the "Director's Report" and "Management Discussion & Analysis Report " which seek to describe the company's objectives, projections, estimates, expectation or predictions etc may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual result may differ from such expectations, projections, etc., whether express or implied. Several factors could make significant difference to the Company's operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. which the company doesn't have any direct control.

Registered Office : Falta Special Economic Zone By Order of the Board Sector-1, Plot-31&32, Falta For Krypton Industries Limited 24-Parganas (S), Pin-743504 West Bengal CIN : L25199WB1990PLC048791

Pradeep Kumar Singh Chairman Date: 30.05.2015 (DIN : 00386800)

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Mar 31, 2014

Dear shareholders,

The Directors present the 24th Annual Report together with the audited accounts of your company for the year ended 31st March 2014.

1. FINANCIAL RESULTS

During the year under review, the company achieved an aggregate income of Rs.4281.88 lakhs. The highlights of the financial results are as under:

Amount in (Rupees in ''000) Current Year Previous Year 20 13-2014 2012-2013

Sales 425662.71 424931.01 Other Income 2525.27 5878.78

Gross Total Income 428187.98 430809.79

Profit before Interest, Depreciation & Tax 42951.38 37389.89

Interest 15559.09 16583.69 Depreciation 13848.61 12816.45

Profit before Exceptional Items & Extraordinary items and Tax 13543.68 7989.75 Exceptional Items - -

Profit before Tax and after Exceptional Items 13543.68 7989.75

Provision for Taxation 4518.86 3999.33

Profit after Tax 9024.82 3990.42

Balance in P&L A/c brought Forward 97449.81 48913.43

Balance Available for Appropriation 106474.63 97449.81

Proposed Dividend 0.00 0.00

Tax on Proposed Dividend 0.00 0.00

Transfer to General Reserve 0.00 0.00

Balance carried to Balance Sheet 106474.63 97449.81



2. OVERVIEW AND REVIEW OF OPERATION

A review on division wise performance of the company is furnished below:-

Tyre Division The total income of the tyre division for the year 2013-14 amounted to Rs.2206.51 lakhs compared to Rs.2255.64 lakhs in the previous year. The profit before tax amounted to Rs.71.14 lakhs as compared to profit of Rs.82.83 lakhs previous year. Company is in process to increase the productivity and cost reduction of every product in general. With reorganizing ofdifferent merged units, overall performance will improve and overall all operational cost will decrease.

Footwear division

The total income of the footwear division for the year 2013-14 amounted to Rs. 1556.99 lakhs compared to Rs1781.51 lakhs in the previous year. The unit reported a loss before tax of Rs. (47.87) lakhs during the year compared to loss of Rs. (59.85) lakhs in the previous year.

The continuous increases in raw materials and slower market conditions have impacted the growth and profitability of this business.

The company has take a comprehensive review of the situation and taking steps to change the product and customer mix for a stable business and specifically adding overseas customers to its business and we have tied up with VKC group which will also help us to boost our profitability in significant manner in the coming years.

Company has retained all its customers and has good continuous orders in hand.

Wheel division

The total income of this unit for the year 2013-14 amounted to Rs.575.87 lakhs compared to Rs.1740.75 lakhs in the previous year. As in the financial year 2013-14. The unit has done the job work for other group units due to which its total income has reduced but profitability has not impacted too much.

The unit reported the profit before tax for the year 2013-14 amounted to Rs.106.46 lakhs compared to Rs. 135.50 lakhs in the previous year.

The unit is in process to further improve its performance due to new efficiency increasing steps being taken and we will see results by mid of 2014-15.

Engineering division

The total income of this unit for the year 2013-14 amounted to Rs.497.71 lakhs compared to Rs.424.86 lakhs in the previous year.

The unit posted the profit before tax for the year 2013-14 amounted to Rs.8.15 lakhs compared to Rs. (74.16) lakhs.

The Indian Rehab Care Equipment Market has stated accepting the Brand "iCare" which was very encouraging for our company and we are working on our Brand to grow it further in coming years.

Company has always taken a long term view of this business and this year the company is expecting a much better performance due to weaker rupee and stronger Chinese Yuan, as we have to compete with Chinese products in India as well as across the world. This currency situation will help us to increase our sales quickly.

Plastic division

The total income of this unit for the year 2013-14 amounted to Rs.94.79 lakhs compared to Rs.158.31 lakhs.The unit reported the loss for the year 2013-14 amounted to (Rs.2.53) lakhs compared to Rs. (9.23) lakhs.

Sadhurhat division

The company has started the commercial production of its new unit from 01.12.2013. The new unit is engaged in manufacturing MCP Tubeless Tires for domestic market. The total income of this unit w.e.f 01.12.2013 for the year 2013-14 amounted to Rs.175.16 lakhs and the unit reported the loss for the year 2013-14 amounted to (Rs.3.97) lakhs.

Due to preliminary & pre operative expenditure written off in its first financial year this unit has made loss and from financial year 2014-15 onwards this unit will start making profits.

3. DIVIDEND

In order to strengthen the financial position of the company the Board of Directors have decided not to recommend any dividend for the Financial Year ended 31st March, 2014 and plough back the profits of the company in its business.

4. SUBSIDIARY COMPANIES At present, the company does not have any subsidiary company.

5. CAPITAL EXPENDITURE

Your company has further invested in year 2013-14 Rs.173.19 Lakhs with a total cumulative investment of Rs. 592.89 Lakhs in expansion programs of its new unit situated at Sadhurhat for the PU Tubeless Tire and has been successfully implemented its commercial production from 1st December, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required Listing agreement with Stock Exchange:-

A. Industry Structure & Developments:-

Krypton Industries Limited (KIL) has a flat top line but better bottom line, which was focus of the company during last year due to difficult market conditions, high input cost and manufacturing expenses.

Major focus was been given to market expansion in Indian market with better penetration in the market which company has achieved for its tire and hospital / disable support equipment business. Both the business is doing better than previous year and poised to give a better results this year also.

The footwear business had a negative growth and company has restructured the business further to get better results in the current and future year. The business model has needed a fresh view and implementation of the fresh view needed new customer base and cost structure, which your company was able to implement during last year and those effects will be visible in future.

B. Outlook and opportunities

Your Company has identified the following opportunities and future building business areas :

Our Company''s major focus is on the tire and wheels business. Our company''s better profitability as compared to previous year regardless of flat sales have shown that we are on the right track. Primarily, the PU tire for Bicycle, rehab care and industrial application tire business will be our main focus this year and years to come for the domestic as well as international market. With hospital / disabled support equipment business has now establishes and recognized as a serious good quality supplier, the future looks very promising. With some new quality certification of the products, needed for government orders, this product line will be better positioned to do business with government. With new government in place, Medical support to every person seems a focus area for the new government, there will be more opportunities for this business. With new structuring of the footwear division, the cost control and redefining on the business process will give incremental benefit in future.

C. Outlook on threats, risk and concern

1. Business Risks:

Company is working in different markets in India as well overseas which exposes it to Foreign exchange fluctuation, each countries regulations, cost of manufacturing is also an area of concern during last few years. Your company has taken up program to reduce financial cost with implementing tighter control over cash flows and utilization of funds. Overall exposure and debtors certainly have a business risk which is normal. Reduction of manufacturing cost with upgrading the production machinery, processes and training of personnel is priority area for us. Material cost fluctuations are although difficult to control. Development of new products and materials for production for reducing cost and improving quality has been taken up to control this risk and improve overall performance.

2. Financial Risks:

Large part of cost is affected by import cost and any major fluctuation in US$ can affect the performance of the company. Although foreign exchange risks somewhat balanced by exports and company regularly cover such risk. The interest cost is still on the higher side although reduced in the previous year. Company is putting systems to improve this situation.

3. Legal & Statutory

Risks Company is complying regularly with all the regulatory requirements with respect to manufacturing, taxations, statutory requirements, company law, SEBI etc, with new laws coming in, this exercise will need more inputs which company is working towards.

4.Political Risks

Any major change in local, national or international can effect the business but as, at the moment, company does not have any business with government entities, the risk is minimal. Although company is trying to secure government business at the moment, this can impact positive as well as negatively in a small percentage of growth of the company.

D. Internal Control System and their adequacy:

Your Company believes that Internal Control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets. The company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. The Audit Committee reviews internal reports and provides suggestions for improvement /takes corrective actions. The committee also meets the Company''s Statutory Auditors to ascertain, interalia, their views on the Adequacy of Internal Control Systems in the company and keeps Board of Directors informed from time to time.

E. Financial Performance

Over all financial Performance of the company is satisfactory but needs lot of improvements and which your company will surely do this year and in the years to come.

F. Human Resource Developments:

During the fiscal 2013-2014 company has more than 250 Persons on its payroll. Apart from this company has generated indirect employment to more than 500 persons in nearby locations. Company is working on to restructure the total organization to help its growth with further recruitment in the top and middle management level at different positions.

G. Cautionary Note:

Certain statements made in the "Management Discussion & Analysis Report " which seek to describe the company''s objectives, projections, estimates, expectation or predictions etc may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual result may differ from such expectations, projections, etc., whether express or implied. Several factors could make significant difference to the Company''s operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. which the company doesn''t have any direct control.

6. FIXED DEPOSITS

The Company has neither invited nor accepted any fixed deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the year under review.

7. LISTING AT STOCK EXCHANGES

The equity shares of the company are listed on the stock exchanges at Bombay, Calcutta, Delhi and Jaipur. The annual Listing fees for the year 2013-2014 has been paid to all these stock exchanges

8.CORPORATE GOVERNANCE

A separate section on corporate governance together with a certificate from the Auditors of the company regarding full compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges forms a part of the Annual Report.

9. DIRECTORS

In accordance with the provision of the Companies Act, 1956 Mr. T C Bachhawat (DIN : 00580356) retires by rotation as director at the forthcoming Annual General Meeting and is eligible for reappointment.

10. FINANCE /RIGHTS ISSUE

Your company has issued equity shares of Rs.10/- each on right basis at a price of Rs. 15/- in the ratio 17:10 in April 2011 aggregating to 1,01,99,329 shares against a total amount received of Rs.1529.90 lakhs and the company has refunded Rs. 433.30 lakhs to the shareholders. The company has utilized the balance of Rs.1096.60 lakhs against which 7310680 shares have been allotted fully paid up on 7th May 2011. On 31.03.2014 the amount utilized in the following manner:-

Sl. Particulars Amount in'') No. Lakhs (Rs.)

a. Expenses Incurred / Deployed to Footwear Division 441.07

b. Expenses Incurred / Deployed to Tire Division 617.5

c. Right Issue Expenses 37.98

d. Fixed Deposit with scheduled banks NIL

e. Deposit with BSE(Refundable) NIL

f. Balance lying in the current accounts with Scheduled Bank NIL

1096.60

11. DIRECTORS RESPONSIBILITY STATEMENT

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

* Followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures if any;

* Selected such accounting policies and applied them consistently and made judgments and estimates that are responsible and prudent so as to give true and fair view of the state of affairs of your company at the end of the financial year and of the profit of your company for that period.

* Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities.; and

* Prepared the annual accounts on a going concern basis.

12. PARTICULARS OF EMPLOYEES

During the year under review there was no employee in the employment of the company falling within the purview of section 217(2A) of the Companies Act, 1956 read with Rules made there under.

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

The information as required Under Section 217(1)(e) of the Companies Act,1956 read with Companies(Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are appended as Annexure to the Report hereinafter.

14. AUDITOR''S REPORT The Auditors Report is self-explanatory and doesn''t warrant any comment.

15. ISO 9001-2008 & IS 7454

Your company operates in ISO 9000 quality assurance system as per the ISO 9001-2008 standards. The Audit was duly carried out during the year 2013-14. The new standards are mainly customer oriented and they will help our Company to get much better controls to improve with best customer satisfaction standards.

The company has been granted the license by Bureau of Indian Standards (BIS) to use Standard Mark i.e.IS 7454 in respect of Rehabilitation equipment- Wheelchairs Folding and Adult size according to which we will manufacture highest quality of wheelchairs as per the specification.

16. AUDITORS

M/s. Jagdish Agarwal & Associates (Registration No.320253E) retire as Auditors of the Company at the conclusion of the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Auditors, if re-appointed.

17. APPRECIATION

Your Directors take this opportunity to record their appreciation for the continued and sustained support and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Suppliers, Transporters, Employees, Shareholders and all other Stakeholders.

Registered Office: Falta Special Economic Zone By Order of the Board Sector-1, Plot-31&32, Falta For Krypton Industries Limited 24-Parganas (S), Pin-743504 West Bengal Jay Singh Bardia CIN : L25199WB1990PLC048791 Chairman Date: 30.05.2014

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Mar 31, 2013

Dear shareholders,

The Directors present the 23rd Annual Report together with the audited accounts of the Company for the year ended 31 st March 2013.

1. FINANCIAL RESULTS

During the year under review, the company achieved an aggregate income of Rs. 4308.09 lakhs. The highlights of the financial results are as under:



Amount in (Rupees in *000)

Current Year Previous Year 2012-2013 2011-2012

Sales 424931.01 321356.61

Other Income 5878.78 5169.73

Gross Total Income 430809.79 326526.34

Profit before Interest, Depreciation & Tax 37389.89 19646.40

interest 16583.69 12756.42

Depreciation 12816.45 7118.77

Profit before Exceptional Items & Extraordinary items and Tax 7989.75 (228.78)

Exceptional Items - 13741.82

Profit before Tax and after Exceptional Items & Extraordinary Items 7989.75 (13970.60)

Provision for Taxation 3999.33 3229.88

Profit after Tax 3990.42 (17200.48)

Balance in P&LA/c brought Forward 48913.43 66113.91

Balance Available for Appropriation 97449.81 48913.43

Proposed Dividend 0.00 0.00

Tax on Proposed Dividend 0.00 0.00

Transfer to General Reserve 0.00 0.00

Balance carried to Balance Sheet 97449.81 48913.43



2. OVERVIEW AND REVIEW OF OPERATION

A review on division wise performance of the company is furnished below:-

Tyre Division

The total income of the tyre division for the year 2012-13 amounted to Rs. 1901.84 lakhs compared to Rs. 1447.60 lakhs of in the previous year i.e. the total income has increased by about 31.38%.

The profit before tax amounted to Rs.8.15 lakhs as compared to loss of Rs.(52.05) lakhs previous year.

Company has taken necessary steps to increase the productivity and cost reduction of every product in general. With reorganizing of different merged units, overall performance will improve and overail operational cost will decrease.

Footwear division

The total income of the footwear division for the year 2012-13 amounted to Rs. 1781.51 lakhs compared to Rs.1761.03 lakhs in the previous year i.e. the total income has increased by about 1.16%.

The unit reported a loss before tax of Rs.(59.85) lakhs during the year compared to loss of Rs.(81.84) lakhs in the previous year.

The continuous increase in raw materials and slower market conditions have impacted the growth and profitability of this business.

The company has taken a comprehensive review of the situation and is taking steps to change the product and customer mix for a stable business and specifically adding overseas customers to it business. Company have retained all its customers and have good continuous orders in hand.

Wheel division [Formerly known as Eco Wheels Pvt. Ltd. (Wheel Division)]

The total income of this unit being merged w.e.f. 1.04.2012 for the year 2012-13 amounted to Rs. 1740.75 lakhs compared to Rs.1417.83 lakhs in the previous year i.e. the total income Is being increased by 22.78%.

The unit reported the profit for the year 2012-13 amounted to Rs.135.50 lakhs compared to Rs. 101.06 lakhs in the previous year i.e. showing an increase of 34.08%.

The unit will further improve its performance due to new efficient increasing steps being taken and we will see results by mid of 2013 -14.

Engineering division [Formerly known as Eco Wheels Pvt. Ltd. (Engg. Division)]

The total income of this unit being merged w.e.f. 1.04.2012 for the year 2012-13 amounted to Rs.424.86 lakhs compared to Rs.358.08 lakhs in the previous year i.e. the total income is being increased by 18.65%.

The unit posted the loss for the year 2012-13 amounted to Rs.(74.16) lakhs compared to Rs.(51.55) lakhs in the previous year.

The division has inroads to more locations and the "iCare" brand of products are being recognized in the rehab care equipment market.

Company has always taken a long term view of this business and this year the company is expecting a much better performance due to weaker Rupee and stronger Chinese Yuan, as we have to compete with Chinese products in India as well as across the world. This currency situation will help us to increase our sales quickly.

Plastic division [Formerly known as Barons Polymer Pvt. Ltd.]

The total income of this unit being merged w.e.f. 1.04.2012 for the year 2012-13 amounted to Rs. 158.31 lakhs compared to Rs.136.09 lakhs in the previous year i.e. the total income is being increased by 16.33%.

The unit reported the loss for the year 2012-13 amounted to Rs.(9.23) lakhs compared to profit of Rs.9.50 lakhs in the previous year.

3. DIVIDEND

In order to strengthen the financial position of the company the Board of Directors have decided not to recommend any dividend for the Financial Year ended "31st March, 2013 and plough back the profits of the company in its business.

4. CONSOLIDATED FINANCIAL STATEMENTS & SUBSIDIARIES

The Company is not required to prepare Consolidated Financial Statement as stipulated by clause 32 of the Listing Agreement as all the subsidiaries of the Company have now ceased to be its subsidiary.

5. SUBSIDIARY COMPANIES

At present, the company does not have any subsidiary as Eco Wheels Pvt. Ltd., subsidiary of the Company is now being amalgamated with the Company as per the order of Honorable High Court of Calcutta on dated 28.02.2013.

Krypton Developers Limited, subsidiary of the Company ceased to be a subsidiary, upon the sale of its shares by the Company on dated 30.03.2013 and the same were sold at the carrying amount, so there is no profit /loss on such sale.

6.- AMALGAMATION

With respect to the application filed under section 391-394 of the companies Act, 1956, before the Honorable High Court of Calcutta for the Scheme of Amalgamation/ merger of the Eco Wheels Pvt. Ltd. (a subsidiary of the company), Barons Polymers Pvt. Ltd. and Krypton Tyres Limited (Transferor Companies) with Krypton Industries Limited (Transferee Company), the Honorable High Court at Calcutta has sanctioned the Scheme by its order on dated 28.02.2013 being* effective from 19.03.2013. On coming into effect of the Scheme, the Transferor Companies stand amalgamated with the Company on a going concern basis from the appointed date i.e. 01.04.2011.

7. CAPITAL EXPENDITURE

The Company has further invested Rs.2.55 Crore in expansion programmes''for the Footwear Division and MCP Tubeless Tyre Divisions.

We are pleased to inform that the expansion of footwear division been implemented successfully and they have started production and our company should get a very good benefit due to this investments in the future.

Whereas, the expansions program for the PU tyre division was delayed due to local political issues in implementing the construction schedules. Now this situation is resolved and the Company has started to implement the project. The production from new unit will start by October 2013.

8. FIXED DEPOSITS

The Company has neither invited nor accepted any fixed deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the year under review.

10. LISTING AT STOCK EXCHANGES

The equity shares of the company are listed on the stock exchanges at Kolkata, Mumbai, Delhi and Jaipur. The annual Listing fees for the year 2012-2013 has been paid to all these stock exchanges.

11. CORPORATE GOVERNANCE

A separate section on corporate governance together with a certificate from the Auditors of the company regarding full compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges forms a part of this Annual Report.

12. DIRECTORS

In accordance with the provision of the Companies Act, 1956 Mr. Pradeep Kumar Singh retires by rotation as director at the forthcoming Annual General Meeting and is eligible for reappointment.

13. RIGHTS ISSUE

The Company has issued equity shares of Rs.107- each on right basis at a price of Rs. 15/- in the ratio 17:10 in April 2011 aggregating to 1,01,99,329 shares against a total amount of received of Rs. 1529.90 lakhs and the company has refunded 433.30 lakhs to the shareholders. The company has utilized the balance of Rs. 1096.60 lakhs against which 7310680 shares have been allotted fully paid up on 7th May 2011. The amount utilized in the following manner:-



Sl. No. Particulars Amount in''Lakhs (Rs.)

a. Expenses Incurred / Deployed to Footwear Division 437.84

b. Expenses Incurred / Deployed to Tyre Division 422.70

c. Right Issue Expenses 37.99

d. Fixed Deposit with scheduled banks 181.58

e. Deposit with BSE(Refundable) 11.00

f. Balance lying in the current accounts with Scheduled Bank 5.49

1096.60



14. DIRECTORS RESPONSIBILITY STATEMENT

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

Followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures if any;

- Selected such accounting policies and applied them consistently and made judgments and estimates that are responsible and prudent so as to give true and fair view of the state of affairs of our company at the end of the financial year and of the profit of our company for that period.

Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of our company and for preventing and detecting fraud and other irregularities.; and

Prepared the annual accounts on a going concern basis.

15. PARTICULARS OF EMPLOYEES

During the year under review there was no employee in the employment of the company falling within the purview of section 217(2A) of the Companies Act, 1956 read with Rules made there under.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS AND OUTGO:

The information as required Under Section 217(1)(e) of the Companies Apt,1956 read with Companies(Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are appended as Annexure to the Report hereinafter.

17. AUDITOR''S REPORT

The Auditors Report is self-explanatory and doesn''t warrant any comment

18. ISO 9001-2008

The Company operates in ISO 9000 quality assurance system as per the ISO 9001-2008 standards. The Audit was duly carried out during the year 2012 by TUV SUD South Asia Private Limited. The new standards are mainly customer oriented and they will help the Company to get much better controls to improve with best customer satisfaction standards.

19. AUDITORS

M/s. Jagdish Agarwal & Associates (Registration No.320253E) retire as Auditors of the Company at the conclusion of the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Auditors, if re-appointed.

20. APPRECIATION

Your Directors take this opportunity to record their appreciation for the continued and sustained support and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Suppliers, Transporters, Employees, Shareholders and all other Stakeholders.



Registered Office :

Falta Special Economic Zone For and on behalf of the Board

Sector-1, Plot-31 & 32, Falta

24 Parganas (s), Pin-743504 Jay Singh Bardia

West Bengal Chairman

Date: 29.05.2013

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Mar 31, 2010

The Directors have pleasure in presenting the 20th Annual Report on business and operations of the Company and the Audited Financial statements for the year ended 31st March 2010.

1. FINANCIAL RESULTS

During the year under review, the company achieved an aggregate income of Rs.2409.45 lakhs. The highlights of the financial results are as under:

(Rupees in ‘000)

Current Year PreviousYear

2009-2010 2008-2009

Sales 235904.83 170283.18

Other Income 5040.63 3976.46

Gross Total Income 240945.46 174259.64

Profit before Interest, Depreciation & Tax 30862.40 23524.28

Interest 12443.01 10079.33

Depreciation 6668.63 9112.64

Profit berore Extraordinary Items and Tax 11750.76 4332.31

Extraordinary Items (Right Issue Expenses) 419.18 0.00

Profit before Tax and after Extraordinatry Items 11331.58 4332.31

Provision for Taxation 2749.46 2884.80

Profit after Tax 8582.12 1447.51

Balance in P&L A/c brought Forward 50935.83 49560.70

Balance Available for Appropriation 59517.95 51008.21

Proposed Dividend 0.00 0.00

Tax on Proposoed Divididend 0.00 0.00

Transfer to General Reserve 429.00 72.38

Balance carried to Balance Sheet 59088.95 50935.83

2. DIVIDEND

In order to strengthen the financial position of the company and for investing in future capacity as well as for expansion, the company will need more funds. Therefore, the Board of Directors have decided not to recommend any dividend for the Financial Year ended 31st March, 2010 and plough back the profits of the company in its business.

3. CONSOLIDATED FINANCIAL STATEMENTS & SUBSIDIARIES

As stipulated by clause 32 of the Listing Agreement, Consolidated Financial Statements have been prepared by the company in accordance with the requirements of Accounting Standard 21, on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India.

These group accounts have been prepared on the basis of audited Financial Statements received from subsidiary companies M/s. Eco Wheels Private Limited, M/s. Krypton Developers Limited and Krypton Industries (Suzhou) Company Limited. along with the statement pursuant to sec 212 of the Companies Act,1956,as approved by their respective Boards.

4. SUBSIDIARY COMPANIES

The company has three subsidiary companies, the details of which are as follows : The details of investment in subsidiaries are :

(1) Eco wheels Pvt. Ltd. : 8,27,100 equity shares of Rs. 10 each as fully paid up.

(2) Krypton Developers Ltd. : 49,400 equity shares of Rs. 10 each as fully paid up.

(3) Krypton Industries (Suzhou) Co. Ltd. : 100% capital investment.

The statement pursuant to section 212 of the companies act, 1956 containing the details of the company forms part of this Annual Report.

The company has applied to the Central Government for obtaining exmeption from attaching of Audited Statement of Accounts, the Report of Board of Directors and that of Auditors of Subsidiary Companies u/s 212(8) of the Companies Act, 1956 and is hopeful of getting the same. Subject to the above approval, information of each subsidiary company partaining to capital reserves, total assets, total liabilities, details of investment, turnover, provision for taxation & proposed dividend etc. will be disclosed in the consolidated Balance Sheet. Moreover, shareholders who wish to have a copy of the full annual accounts of the subsidiaries will be provided the same on receipt of written request from them. These documents will also be available for inspection by any shareholder at the Registered office of the Company and of the subsidiary company on any day during business hours.

5. OPERATIONAL REVIEW

A review on division wise performance of the company is furnished below:-

Tyre Division

The total income of the tyre division for the year 2009 – 10 amounted to Rs.1277.03 lakhs compared to Rs. 784.63 lakhs in the previous year i.e. the total income has increased by - about 63 %. The profit before tax amounted to Rs. 79.25 lakhs as compared to Rs. 5.63 lakhs which was substantially up by Rs. 73.62 lakhs as compared to the previous year. The performance of the tyre division has shown marked improvement and it is expected to do better business in future.

Footwear Division

The total income of the Unit amounted to Rs1132.42 lakhs as compared to Rs. 958.37 Lakhs in the previous year i.e. the total income has increased by about 18%.The unit reported a profit before tax of Rs. 34.07 Lakhs during the year compared to Rs. 37.69 lakhs in the previous year i,e, the Profit before tax reduced by about 10%. The directors hope for a better performance in the forthcoming year.

6. WORKING

Your company has made a sincere efforts to grow and expand during the difficult times and also has made provisions for further improvement in future. The top-line of the company has grown, companies tyre and wheels sales and overseas sales have contributed to this growth heavily although the footwear could not add to the contribution due to productivity issue at our footwear division which could only be sorted out in the second half of the year.

Company has continuously invested into product development, market development and improving man power quality through training and hiring new and competent people and has tried to make each and every unit more productive with better quality products for the market.

These programs are already showing good results and will bring in better performance and more sustainable growth in future.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required Listing agreement with Stock Exchange:- A. Industry Structure & Developments:- Krypton has posted a very good year with respect to sales growth and with market penetration. Company has balanced its sales in Export market with a better sales in North America and also domestic market. This was planned last year and it has been very good for the growth of the company and limiting risk of limited geographical market dependence.

The launch of new products and assemblies for customers have given good results and has immensely contributed to the growth of tyre & wheels division. Although the industrial wheels segments did not give expected results, but has shown some growth in the current year and is expected to do better in future, therefore, adding to the contribution of Tyres and Wheels division. The China unit is performing better than the previous year but needs more improvement. The medical equipment and Wheelchair segments will help the company to grow and perform in near future.

The Footwear division has not performed as expected due to productivity issues at our unit which was only sorted out in the second half of last year and shown very good performance in the last quarter of year ending 2010. Company is certainly moving from component business to complete footwear and in the current year, about 50% of sales will be coming from complete footwear, this will eventually grow to at least 66% next year and in the long run should be about 80% or more of total sales and delivering better value additions and better per unit realization of our capacity.

ECO WHEELS PVT Ltd, dealing with finished medical equipment, has performed better than last year. The Indian market is developing and the products were able to get acceptance with the local distributors and dealers across the country. This business will grow further and should stabilize further in this year.

B. Outlook and opportunities

Your Company has identified the following opportunities and future building business areas:

1. Market development: Company has taken a global market approach where it is approaching all the market with importance according to their potential. Company has taken many steps to develop market in North America and is working hard to develop market in India which is growing at a very fast rate. This approach has helped the company to grow local market with very little competition along with the export growth with better capacity utilisation helping the whole company to grow and acquire more customers with a distributed risk of geographical effects.

2. Sales and distribution network in India: This is the most important of all the different activities and company has been able to penetrate with excellent work done by our team of experienced sales people. Company will further expand its network and will double the number of dealers in each product category this year.

3. Brand Building: Company has decide to invest into brand for its each line of business to ensure future customers loyalties, identifications and value creation. Company has put up more emphasis on "KRYPTON" brand name for tyres and wheels, footwear is sold under "SOFTFLEX" brand name. As last year the company had made the product available to the customers, this year however, the Company will start to promote the brands instead. This will be a continuous exercise and will help the company to get more identification with the final customers with long term benefits. This will support our dealers and distributors and will help to generate better sales with continuous growth.

4. Expansion of capacities: Company is already in process of debottlenecking certain capacity with minimum capital expenditure and will further invest into putting up new capacities to support the growth and provide better quality service, to all the customers with lesser lead times. Company will start the expansion program after completion of right issue.

C. Outlook on threats, risk and concern

1. Business Risks:

Company is investing and will invest into new capacities, brand promotions and distributing network currently and in very near future. Company has a very long manufacturing experience but rather new to the Indian distribution market and Branding.

Company could manage till now the Indian market expansion with very little or almost no promotion activities. The new initiative will be a new experience for the company. Although company has definite budget and has estimated the budget which does not effect the financial health of the company in a big way. Company is confident that this promotion will bring in desired results.

Your companies effort to bring in new big OEM customers has bought in good results for the company. Company will continue its effort further into different market areas, product segments to limit the risk in this turbulent international market. Company thinks that the combination of strong Indian market presence with well diversified strong export market customers base should minimize business risk.

Recovery of the global market is always a concern but during last year we have done better then 2008 -09, this shows companies resilience under difficult market conditions and risk managing capabilities.

2. Financial Risks:

The financial long term investment in all the expansion and working capitals have been continuously monitored and followed. Company has taken special program to reduce the debtors and credit period to the customers.

The foreign exchange risks are regularly covered and due to varied markets and purchases the risk has reduced considerably.

3. Legal & Statutory Risks

Your company has entered into the business agreements with various companies in different countries, either as distributors or consumers of your companys product and has non-disclosure agreements with some of them, which sometimes restrict the scope of business.

Your company has laid down procedures to monitor that all statutory obligation are timely met. Continuous monitoring of the same through a proper system of reporting ensures that the company has not defaulted in the same.

4. Political Risk

You company has negligible risk due to political situation as it does not have any business with countries, which are termed or perceived, as politically unstable countries. None of the assets of the company are situated on politically unstable regions.

Changes in taxation system can effect in positive and negative manners and like any other business your company also have to face such risks.

D. Internal Control System and their adequacy:

Your Company believes that Internal Control is a necessary concomitant of the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

The company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. The Audit Committee reviews internal reports and provides suggestions for improvement /takes corrective actions. The committee also meets the Companys Statutory Auditors to ascertain, interalia, their views on the Adequacy of Internal Control Systems in the company and keeps Board of Directors informed from time to time.

E. Financial Performance

Financial Performance of the company is very encouraging. Your Company has performed satisfactorily despite of the newer areas of operations.

F. Human Resource Developments

During the fiscal 2010, the Companys strength of Human Resources increased from that of previous year. At present there are 167 persons on the Rolls of the company. Company is continuously trying to improve its human resources by training, interaction and collaborative approach at different levels. This open tolerant but competitive culture is helping the company to bond better with its most important resource.

G. Cautionary Note

Certain statements made in the “Management Discussion & Analysis Report “ which seek to describe the companys objectives, projections, estimates, expectation or predictions etc may constitute “forward looking statements” within the meaning of applicable laws and regulations. Actual result may differ from such expectations, projections, etc., whether express or implied. Several factors could make significant difference to the Companys operations. These include climatic conditions and

economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. which the company doesnt have any direct control.

8. FIXED DEPOSITS

The Company has neither invited nor accepted any fixed deposits from the public within the meaning of section 58A of the Companies Act, 1956 during the year under review.

9. LISTING AT STOCK EXCHANGES

The equity shares of the company are listed on the stock exchanges at Kolkata, Mumbai, Delhi and Jaipur. The annual Listing fees for the year 2009-2010 has been paid to all these stock exchanges (except Delhi Stock Exchange and Jaipur Stock Exchange ,which are defunct.)

The Company is in the process of getting its shares delisted from the Jaipur and Delhi Stock Exchanges. The companys equity shares shall continue to be listed on the stock exchange at Kolkata (CSE) and Mumbai (BSE), of which BSE has nation wide trading terminals.

10. CORPORATE GOVERNANCE

A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

11. DIRECTORS

In accordance with the provision of the Companies Act, 1956 Mr. Punam Chand Daga retires by rotation as director at the forthcoming Annual General Meeting and is eligible for reappointment.

12. MANAGING DIRECTOR

Mr. Jay Singh Baradia, Managing Director, whose term of appointment expires on 31st December, 2010 has been reappointed as the Managing Director of the Company w.e.f. 01/01/2011 for a period of 3 years subject to the approval of shareholders in the ensuing AGM.

13. CEO/CFO

Mr. Panna Lal Bardia, CEO/CFO., whose term of appointment expires on 31st March , 2010 has been reappointed as the CEO/CFO of the Company w.r.e.f. 01/04/2010 for a period of 5 years subject to the approval of shareholders in the AGM.

14. RIGHTS ISSUE

In order to part finance its expansion and modernization plans and to meet the long term working capital requirement of the Company the Board has decided to come out with Rights Issue of approximately Rs.11 crores, to the eligible shareholders as on the record date through letter of offer at such price as may be decided, in consultation with the Lead Manager and on such terms and conditions as the Board may, in absolute discretion deem fit.

Moreover, it is to inform you that SEBI has given in principal approval to the proposal of Company for above mentioned right issue.

15. DIRECTORS RESPONSIBILITY STATEMENT

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

- Followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures if any;

- Selected such accounting policies and applied them consistently and made judgments and estimates that are resonable and prudent so as to give true and fair view of the state of affairs of your company at the end of the financial year and of the profit of your company for that period.

- Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities.; and

- Prepared the annual accounts on a going concern basis.

16. PERSONNEL

During the year under review there was no employee in the employment of the Company falling within the purview of Section 217(2A) of the Companies Act, 1956 read with the Rules made there under.

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGES EARNINGS AND OUT GO:

The information as required Under Section 217(1)(e) of the Companies Act,1956 read with Companies(Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are appended as Annexure to the Report hereinafter.

18. AUDITORS REPORT

The Auditors Report is self-explanatory and doesnt warrant any comment.

19. ISO 9001-2000

Your company operates in ISO 9000 quality assurance system as per the ISO 9001-2000 standards. The Audit was duly carried out during the year 2007 by BIS and your company has been re-registered as ISO 9001-2000 Company. The new standards are mainly customer oriented and they will help our Company to get much better controls to improve with best customer satisfaction standards.

20. AUDITORS

M/s. Jagdish Agarwal & Associates (Firm Registration No.320253E) retire as Auditors of the Company at the conclusion of the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Auditors, if re-appointed.

21. ACKNOLEDGEMENT

Your Directors take this opportunity to record their appreciation for the continued and sustained support and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Suppliers, Transporters, Employees, Shareholders and all other Stakeholders.



ANNEXURE TO THE DIRECTORS REPORT

(B) TECHNOLOGY ABSORPTION

1. Specific areas in which where R & D carried out by the Company Your company has primarily worked on developing lot of new designs in the footwear product range. Company has been able to introduce many new products for its footwear range.

Your company along with it subsidiary companies has developed a large range of disable persons and patient assistance equipments. These products have been complete design house design and development team.

Company has also developed the high load capacity castors but the products are not pursued further due to market conditions

2. Benefit derived as a result of the above R & D

The company achieved very good response in the footwear market for its new products therefore, helping the company to generate reasonable business even with difficult market situations.

With inhouse designs, more India specific, for the disable persons and patient assistance equipments, hospital furniture, company could produce these products at very competitive prices and with market acceptable products. The “i Care” product range has been introduced in the market and with very good response. You company plan to distribute the whole product range in India and also for global market.

The High load capacity castors and wheel project is under watch category till we see a reversal of trend in the industrial purchase trend world wide.

3. Future Plan of Action

The Company is working on development of PU DIP mens shoes and further higher range of Chappal and sandals in the footwear segment, and very good growing domestic markets.

Company will built up more R&D capabilities on disable persons and patient support equipments and Hospital furniture to enhance product range, enter different market segments and give a cost effective solution to the Hospital and patient care industry.

You company has taken more products developments for India market. First phase of trials, data collections and research on these data has given lot of inputs for modifying / developing new products for Indian market mainly, targeting bicycles, electric bikes and push carts. Your company has put up its PU tire development team on these products for future growth in the India market.



Registered Office:

Falta Special Economic Zone For and behalf of the Board

Sector-1, Plot-31&32, Falta,

24-Parganas (S), Pin-743504 J. S. BARDIA

West Bengal Chairman