Directors Report of Midfield Industries Ltd.

Mar 31, 2011

The Members,

Midfield Industries Limited

The Directors have pleasure in presenting the Twenty First Annual Report of your Company together with the Audited Accounts for the financial year ended 31.03.2011 and the report of the Auditors thereon.

Financial Highlights

(in Rs.)

Particulars FY 2010-11 FY 2009-10

Total Income 1,325,686,415 907,051,874

Expenditure 1,059,569,143 716,308,307

Profit before Tax, Interest and Depreciation 266,117,272 190,743,567

Less: Depreciation 16,557,611 15,116,617

Less: Interest 61,651,300 49,866,604

Profit before tax 187,908,361 127,760,346

Provision for Income Tax 55,600,000 44,000,000

Provision for Deferred Tax Liability 6,740,481 (620,064)

Net Profit after Tax 125,567,880 82,380,410

Profit Brought forward 229,769,286 147,388,876

Balance available for appropriation 355,337,166 229,769,286

Transferred to General Reserve 36,000,000 -

Provision for Dividend (Rs. 2/- per Equity Share) 25,642,502 -

Provision for Tax on Dividend 4,259,220 -

Profit carried to Balance Sheet 289,435,444 229,769,286

Operations

Your Directors are pleased to inform you that the Company has made a turnover of Rs. 132 crores compared to the turnover of the previous year which stood at Rs. 90 crores and achieved a growth of 46%

The Company has achieved Net Profit after Tax of Rs. 12.55 crores compared to the Net Profit after tax of Rs. 8.24 crores achieved during the previous year and recorded a growth of 52%.

During the year under review the Company has come out with an Initial Public Offer (IPO) and the IPO was a great success and the Equity Shares of the Company got listed on the Bombay Stock Exchange Limited on 4.08.2010.

Your Directors are happy to inform you that the manufacturing facility at Sr. No. 5, Hissa No. 1, Vasurikhurd, Tal. Wada. District - Thane, Maharastra has become operational during the year.

New Manufacturing Facilities

Your Company is in the process of setting up:

a. Manufacturing facility near Rourkela, Odisha to cater to the requirements of the customers located in the Eastern region

b. Manufacturing facility for PET strapping and the same would be operational during the second quarter of financial year 2011 -2012.

c. Plant at Dubai to cater Middle East and African countries.

Corporate Governance

The Corporate Governance Report regarding compliance of the conditions of corporate governance by your Company as stipulated in clause 49 of the Listing Agreement entered into with The Bombay Stock Exchange Limited is annexed to this Report.

Material Changes

There are no material changes affecting the business of the Company after the date of the Balance Sheet.

Deposits

During the year under review the Company has not accepted any deposits from public as defined under the provisions of Section 58 A of the Companies Act, 1956.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 2/- per Equity Share of Rs. 10/- for the FY 2010 - 11. The dividend, if approved at the ensuing Annual General Meeting will be paid to those shareholders whose names appear on the Register of Members of the Company as on 23.09. 2011

The total outflow on account payment of dividend for the FY 2010-11 will beRs. 299.02 lacs.

Transfer to Reserves

Your Directors have proposed to transfer Rs. 360 lacs to the General Reserve retaining Rs. 2894 lacs in the Profit and Loss Account.

Directors

Sri K. Ashok Kumar and Sri Kamlesh Kumar Bhargava. Directors retire by rotation and being eligible offer themselves for re appointment. The Board recommends their re- appointment.

Company Secretary

Mr. A. Devi Prasad has resigned as the Company Secretary of the Company due to his pre occupations with effect from 31.12.2010 and the Board has identified and appointed Mr. Vivek Surana, a qualified member of the Institute of Company Secretaries of India as the Company Secretary with effect from 01.02.2011

Auditors

M/s Sampath & Ramesh, Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Board recommends their re-appointment

Personnel

During the year under review, there were no employees drawing remuneration in excess of the limits laid down in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employee's) Rules, 1975.

DIRECTORS' RESPONSIBILITY STATE- MENT

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956 we, the Board of Directors of the Company hereby state:

(i) that in the preparation of the annual accounts for the year ended 31.03.2011, the applicable accounting standards had been followed along with proper explanation relating to material departures

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

(iii) that we had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that we had prepared the annual accounts for the year ended 31.03.2011 on a going concern basis

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

The disclosures required under Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988, for the year ended March 31, 2011 are as follows:

A. Conservation of Energy

1. Adequate measures have been taken to conserve energy wherever possible.

2. Additional investments and proposals, if any, being implemented for reduction of consumption of energy: NIL

3. Impact of measures for reduction of energy consumption / energy conservation: NIL

B. Research And Development

1. Specific areas in which research & development is carried out: NIL

2. Benefits derived: NIL

3. Future plan of Action: NIL

4. Expenditure on R & D: NIL

C. Technology Absorption

a. Efforts in brief made towards Technology absorption adoption and innovation: NIL

b. Benefits derived as result of the above efforts e.g. product improvement, cost reduction, production development, import substitution etc.: NIL

D. In case of imported technology, imported during the last 5 years reckoned from the beginning of the financial year, following information may be furnished

a. Technology Imported: N. A.

b. Year of Import: N. A.

c. Has technology fully absorbed areas where this has not been taken place, reasons thereof and plan of action: N. A.

ACKNOWLEDGEMENTS

The Board places a record of appreciation to the Bankers, Government and Non Government authorities, Members and Employees of the Company for their continued support and confidence in the Company

For and on behalf of the Board

For Midfield Industries Limited

Place: Hyderabad M. Madhu Mohan Reddy

Date: 06.08.2011 Chairman & Managing Director

---

Mar 31, 2010

The Directors have pleasure in presenting the twentieth Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March 2010 and the report of the Auditors thereon.

FINANCIAL RESULTS:

PARTICULARS: 2009-2010 2008-2009 (in Rs.) (in Rs.)

Total Income 907,051,874 836,164,305

Expenditure 716,308,307 684,718,307

Profit before Tax, Interest and Depreciation 190,743,567 151,445,998

Less: Depreciation 15,116,617 16,904,755

Less: Interest 49,866.604 52,553,510

Profit before tax 127,760,346 69,458,265

Provision for Income Tax 44,000,000 28,100,000

Provision for Fringe Benefit Tax --- 350,000

Provision for Deferred Tax Liability (620,064) 91,605

Net Profit after Tax 82,380,410 53,446,128

Profit Brought forward 185,164,276 118,928,148

Share Premium --- 12,790,000

Profit carried to Balance Sheet 267,544.686 185,164,276

OPERATIONS AND FUTURE PROSPECTS-

Your directors are happy to inform that the performance of the Company was encouraging during the year 2009 - 2010 and expect to continue the same performance during The year 2010-2011 Company is in the Process of obtaining necessary statutory and regulatory approvals for the Initial Public Offering of its Equity Shares and get listed on the Stock Exchanges.

Your directors are also planning to expand the operations of the Company by introducing new products and increasing the production capacities.

CORPORATE GOVERNANCE

The Corporate Governance Report regarding compliance of the conditions of corporate governance by your Company as stipulated in clause 49 of the Listing Agreement with Stock Exchanges, are annexed to this Report.

MATERIAL CHANGES:

There are no material changes in the business of the Company after the date of the balance sheet.

DEPOSITS:

During the year under review the Company has not accepted any deposits from public as defined under the provisions of Section 58 A of the Companies Act, 1956

DIVIDEND:

Keeping in view of the future requirements of funds your directors are not recommending any dividend for the financial year 2009 - 2010.

DIRECTORS:

Sri K. Raja Raju and Sri V. G. Krishna Rao, Directors retire by rotation and being eligible offer themselves for re appointment. The Board recommends their re appointment.

COMPANY SECRETARY:

Mr. A. Devi Prasad, a qualified member of the Institute of Company Secretaries of India continues to be the Whole Time Company Secretary.

AUDITORS:

M/s Sampath & Ramesh, Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. The Board recommends their re-appointment

PERSONNEL:

During the year under review, there were no employees drawing remuneration in excess of the limits laid down in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employee's) Rules, 1975.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956 we, the Board of Directors of the Company hereby state:

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

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

(iii) that we had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that we had prepared the annual accounts for the year ended 31st March, 2010 on a going concern basis.

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

The disclosures required under Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, for the year ended March 31, 2010 are as follows:

A. CONSERVATION OF ENERGY:

a. Adequate measures have been taken to conserve energy wherever possible.

b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy: NIL

c. Impact of measures for reduction of energy consumption / energy conservation: NIL

B. RESEARCH AND DEVELOPMENT:

1. Specific areas in which research & development is carried out: NIL

2. Benefits derived: NIL

3. Future plan of Action: NIL

4. Expenditure on R & D: NIL

C. Technology Absorption:

a. Efforts in brief made towards Technology absorption, adoption and innovation: NIL

b. Benefits derived as result of the above efforts e.g., product improvement, cost reduction, production development, import substitution etc.: NIL

D. In case of imported technology, imported during the last 5 years reckoned from the beginning of the financial year, following information may be furnished:

a. Technology Imported: N. A.

b. Year of Import: N. A.

c. Has technology fully absorbed areas where this has not been taken place, reasons thereof and plan of action: N. A.

Your Company is proposing to set up manufacturing plant in Dubai to cater to the needs of the customers in middle east and to increase the exports to the European countries.

Your Company is also proposing to start export of its products to Canada and USA during the year.

ACKNOWLEDGEMENTS:

The Board places a record of appreciation to the Bankers, Government and Non Government authorities, Members and Employees of the Company for their continued support and confidence in the Company.

For and on behalf of the Board

For MIDFIELD INDUSTRIES LIMITED

Place: HYDERABAD Sd/-

Date : 28.05.2010

M. MADHU MOHAN REDDY

Chairman & Managing Director