Directors Report of Pitti Engineering Ltd.

Mar 31, 2018

Dear Members,

The Directors are pleased to present the 34th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2018.

The name of the Company has been changed from Pitti Laminations Limited to Pitti Engineering Limited to reflect our evolution as a integrated engineering solutions provider.

BUSINESS OVERVIEW

Pitti Engineering Limited, formerly known as Pitti Laminations Limited, is a manufacturer of Stator & Rotor Core Assemblies, Die Cast Rotors & Assemblies, Traction Motors, High Precision Machine Components, Pole Assemblies, Specialized Electrical Steel Laminations, etc. Pitti Engineering caters to the industries like transportation (rail, road & off highway, diesel electric vehicles), power generation, aerospace, oil & gas, mining, earth moving and others. The company supplies full assemblies and sub-assemblies, high precision machined castings, laminations and fabricated bodies, etc. The company also manufactures special purpose lamination and stampings for all types of rotating electrical machinery, motor cores, subassemblies, die cast rotors and press tools. The company offers end to end support for motor and generator manufacturers.

FINANCIAL RESULTS

The financial performance of your Company for the year ended 31st March, 2018 is summarised below:

Rs. in lakhs

Particulars	2017-18	2016-17
Net Revenue from Operations	38032.44	28589.72
Other Income	294.30	306.90
Profit before Finance Costs, Depreciation, Amortisation and Tax	5752.56	3660.56
Less: Finance costs	2357.86	1531.60
Profit before Depreciation, Amortisation and Tax	3394.7	2128.96
Less: Depreciation & Amortisation	1763.21	1617.40
Profit before Tax	1631.49	511.56
Less: Tax expenses	503.53	80.53
Profit after Tax	1127.96	431.03
Add: Other comprehensive income	26.45	109.34
Total comprehensive income for the year	1154.41	540.37
Add: Surplus at the beginning of the year.	5342.11	4801.74
Less: Dividend	-	-
Less: Transferred to General reserve	-	-
Surplus carried to Balance sheet	6496.52	5342.11

Pursuant to the notification dated 16th February, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards (“IndAS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1st April, 2017. The financial statements for the year ended and as at 31st March, 2017 have been restated to conform to IndAS.

OPERATING RESULTS AND BUSINESS OPERATIONS

The company reported a robust performance during the year under review, with a revenue and total comprehensive income growth of 33.03% and 113.63% respectively compared to the same period last year. The company’s efforts for the past few years on expansion, modernisation and strategic relocation has resulted in higher revenues and better margins. The Net revenue from operations for the financial year 2017-18 was Rs.380.32 crores as against Rs.285.90 crores in the previous year and the total comprehensive income for the period was Rs. 11.54 crores as against Rs. 5.40 crores in the previous year.

The total debt as on 31st March, 2018 was Rs. 255.92 crores which included Rs. 88.68 crores long-term debt and Rs. 167.24 crore of short term debt. Cash and cash equivalents at the year end was Rs. 13.52 crores resulting in a net debt position of Rs. 242.40 crores. We continued to maintain a conservative leverage profile with a total debt to equity ratio of 1.66x

During the year under review the company had commenced operations at the Aurangabad and commenced commercial production at Hyderabad (Plant -IV). Further the Company has been re-certified by BVCI in Quality Management Systems ISO 9001:2015 and Environmental Management Systems ISO 14001:2015. Our Quality Management Systems ISO 9001:2015 has been integrated with Environmental Management Systems ISO 14001:2015 in all the plants.

MATERIAL CHANGES

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate and the date of this report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

TRANSFER TO RESERVES

The Company does not propose to transfer any amount to the General reserve out of the amount available for appropriation.

DIVIDEND

In view of the expansion plans and requirement of higher working capital for the purpose of business of the Company, your Directors express their inability to recommend dividend for the financial year 2017-18. The Board of Directors of the Company has adopted a dividend distribution policy. The policy is also available on the website of the company www.pitti.in.

CHANGES IN SHARE CAPITAL

During the year under review the authorised share capital of the Company was increased from Rs. 15 crores comprising of 3 crore equity shares of Rs. 5 each to Rs. 30 crores comprising of 6 crore equity shares of Rs. 5 each.

Inorder to meet the capital expenditure for setting up new facilities at Aurangabad and Hyderabad, general corporate and working capital requirements the company had availed loans from banks which had stipulated minimum promoter’s contribution against their lending, the Company had obtained approvals from the shareholders for making preferential allotment to the promoters and promoter group. Accordingly 28,44,445 equity shares of Rs. 5/- each were issued and allotted at a price of Rs. 90/- per share (including a premium of Rs. 85/- per share) to the persons belonging to the promoter/ promoter group on preferential basis. The issued and paid up capital of the Company as on 31st March 2018 stands increased to Rs. 14,91,39,225 divided into 2,98,27,845 equity shares of Rs. 5/- each. The equity shares issued during the year rank pari-passu with the existing equity shares of the Company.

Further the Company has allotted 22.22.222 convertible warrants at a price of Rs. 90/- each to be converted into 22.22.222 equity shares of Rs. 5/- (including a premium of Rs. 85/- per share) to the persons belonging to Promoter/Promoter Group on 14th February,2018. The subscription amount of 25% of warrant price has been received and fully paid- up equity shares of the Company will be allotted on receipt of balance 75% warrant price within 18 months from date of allotment.

The amount raised through the preferential issue has been used for the objects of the preferential issue as stated in the 33rd AGM notice and there has been no deviation from the intended use of the funds.

CHANGE IN NAME OF THE COMPANY

Further to the special resolution passed by the shareholder of the Company at the Extra-Ordinary General Meeting held on 11th April, 2018 approving the change in the name of the Company from ‘Pitti Laminations Limited’ to ‘Pitti Engineering Limited’, the Ministry of Corporate Affairs, Office of Registrar of Companies, Hyderabad has issued a Certificate of Incorporation pursuant to change of name on 8th May, 2018.

Consequent to change in name of the Company from Pitti Laminations Limited to Pitti Engineering Limited the scrip code of the company on the National Stock Exchange of India Limited has been change from PITTILAM to PITTIENG.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposit within the meaning of Section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment for the time being in force.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134 (3) (m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as an Annexure-1 and forms an integral part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators / courts that would impact the going concern status of the Company and its future operations.

DIRECTOR’S & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act 2013 Shri Akshay S Pitti, Vice-Chairman & Managing Director retires by rotation and being eligible offers himself for reappointment.

In terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 dated 9th May 2018, effective from 1st April, 2019 consent of the Members by way of Special Resolution is required for continuation of a Non-Executive Director beyond the age of seventy five years. Shri M Gopalakrishna, IAS (Retd) is 79 years of age and will complete his present term as an Independent Director on 21st September, 2019. The Board at its meeting held on 13th August, 2018, on the recommendation of the Nomination & Remuneration Committee recommended for the approval of the Members, continuation of Shri M Gopalakrishna, IAS (Retd) as an Independent Director of the Company from 1st April, 2019 till the completion of his present term on the existing terms and conditions.

The Independent Directors of the Company have submitted a declaration confirming that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of the Listing Regulations.

The Board had appointed Ms. Mary Monica Braganza as Company Secretary & Compliance Officer effective from 14th December 2017. Shri Satyabrata Padhi has resigned as Company Secretary on 16th November 2017. Shri Sharad B Pitti, Chairman & Managing Director; Shri Akshay S Pitti, Vice-Chairman & Managing Director ; Shri NK Khandelwal, President Corporate Resources & CFO and Ms. Mary Monica Braganza, Company Secretary & Compliance Officer are the Key Managerial Personnel of the Company as on the date of this report.

Meetings of the Board

Nine meetings of the Board were held during the year. The details of composition of the Board, particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.

Committees of the Board

Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an evaluation of the directors as well as the evaluation of the Board and its Committees. The process was carried out by circulating questionnaires on the Board and Committees functioning on certain parameters. The performance evaluation of the independent directors was carried out by the entire Board, except the director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors including Executive Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

Remuneration Policy

The Board of Directors has framed a policy which lays down a framework in relation to the remuneration of Directors, key managerial personnel and senior management of the Company. This policy also lays down criteria for selection and appointment of Board members. The detailed policy is available on Company’s website www.piiti.in.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information relating to remuneration and other details as required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is provided as an Annexure-2 to this report.

There are no employees who draw remuneration in excess of the limits prescribed in Rule 5(2) (i), (ii) and (iii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Pursuant to the provisions of the first proviso to Section 136(1) of the Act and as advised, the annual report excluding the remuneration details of top ten employees is being sent to the members of the Company. The said information is available for inspection on all working days, during business hours, at the Registered Office of the Company. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Directors of your company confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards have been followed and there are no material departures from the same;

b) such accounting policies as mentioned in the notes to the financial statements have been applied consistently and judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date.

c) proper and sufficient care has been taken forthe maintenanceofadequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a ‘going concern’ basis;

e) proper internal financial controls laid down by the Directors were followed by your Company and that such internal financial controls are adequate and operating effectively; and

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

INDUSTRIAL RELATIONS

Your Company has always considered its workforce and their skills as its valuable asset and continues to enhance the performance driven environment with emphasis on aligning it with the changing business requirements.

PREVENTION OF SEXUAL HARRASSMENT

Your Company has formulated a policy for the prevention of sexual harassment at the workplace. It ensures prevention and deterrence of acts of sexual harassment and communicates procedures for their resolution and settlement. The Company is committed to creating and maintaining a healthy working environment that enables employees to work without fear or prejudice, gender bias and sexual harassment. The Company believes that all employees have a right to be treated with respect and dignity and has zero tolerance towards violations of its code of conduct, in general, and its sexual harassment policy, in particular. During the year, no complaint under the sexual harassment policy has been received by the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a whistle blower policy and has established necessary vigil mechanism as defined under Regulation 22 of the Listing Regulations and section 177 of the Companies Act, 2013 for the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethical policy. The policy provides for adequate safeguards against victimisation of employees who avail of the mechanism. During the year under review, no personnel was denied access to the Audit Committee. The policy is posted on the website of the Company at www.pitti.in.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new / revised standard operating procedures. The Company’s internal control system is commensurate with its size, scale and complexities of its operations. The internal audit is entrusted to M/s. SVD & Associates, Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

Further, the Statutory Auditors of the Company have also issued an attestation report on internal control over financial reporting (as defined in section 143 of Companies Act, 2013) for the financial year ended 31st March, 2018, which forms part to the Statutory Auditors Report.

RISK MANAGEMENT

Risk management is embedded in your Company’s operating framework. Your Company believes that managing risks help in maximizing returns. The Company’s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is periodically reviewed by the Board and the Audit Committee.

However, some of the risks which may pose challenges are set out in the Management and Discussion Analysis which forms an integral part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As a part of its initiative under the Corporate Social Responsibility (CSR) drive, the Company has undertaken projects in the areas of urban and rural development, welfare activities, women empowerment eradicating hunger, promoting health care and education. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company’s CSR policy. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-3 and forms an integral part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY

During the year under review, the Company has not given any loans, provided any guarantees nor made any investments.

RELATED PARTY TRANSACTIONS

All transactions entered into with related parties for the year under review were on arm’s length basis and in the ordinary course of business and is in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. Further there were transactions with related parties which qualify as material transactions under the Listing Regulations for which approval of members is being sought in the ensuing Annual General Meeting. The information on transactions with related parties is given in Annexure-4 in Form No. AOC-2 and the same forms part of this report.

All related party transactions are placed before the Audit Committee and omnibus approval is obtained for transactions which are of repetitive nature.

The policy on related party transactions as approved by the Board of Directors has been uploaded on the website of the Company www.pitti.in.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9, as required under section 92 of the Companies Act, 2013 is annexed as Annexure-5 and forms an integral part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company as required under Listing Regulations is provided in a separate section and forms an integral part of this Report.

CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the Listing Regulations, a detailed report on corporate governance, together with a certificate from the Company’s Auditors confirming compliance forms an integral part of this Report.

AUDITORS AND AUDITOR’S REPORT

Statutory Auditors

M/s. Laxminiwas & Co, Chartered Accountants were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 6th September, 2017 for a term of five consecutive years, subject to ratification by the members at every Annual General Meeting (AGM). Pursuant to the notification dated 7th May, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in notice of the 34 th AGM.

M/s. Laxminiwas & Co, Chartered Accountants have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditor’s Report are self-explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors

The Board of Directors, on the recommendation of Audit Committee has appointed M/s. S S Zanwar & Associates, Cost Accountants (Firm Registration No.100283) as the Cost Auditors to audit the cost accounts of the Company for the financial year 2018-19. As required under the Companies Act, 2013 a resolution seeking member’s ratification for the remuneration payable to the cost auditor forms part of the notice convening the 34th AGM.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board has appointed Shri Ajay Kishen, Practicing Company Secretary (CP. No. 5146) to conduct Secretarial Audit for the Financial Year 2017-18. The Secretarial Audit

Report for the financial year ended 31st March, 2018 is annexed to this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

CAUTIONARY STATEMENT

Statements in this Directors’ Report and Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The Board of Directors would like to express their sincere appreciation for the assistance and cooperation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.

For and on behalf of the Board of Directors

Sharad B Pitti

Chairman & Managing Director

Place : Hyderabad DIN: 00078716

Date : 13th August, 2018

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Mar 31, 2016

BOARD''S REPORT

Net worth stood at Rs. 106.96 crores, as of March 31st 2016. Total debt equity ratio was about 1.5x.

Dear Members,

The Directors have pleasure in presenting the 32nd Annual Report of your Company for the financial year ending 31st March, 2016.

BUSINESS OVERVIEW

Pitti Laminations Limited (PLL) is one of the largest manufacturers of special purpose laminations for all types of rotating electrical machinery. The Company’s products have application in industrial motors, alternators, hydro-electric and thermal power generators, wind power generators, DC machines, railway traction motors, pumps, medical diagnostic equipment and aeronautic wing control motors. PLL has a fully integrated manufacturing facility to cater to specific customer requirements and provides end-to-end solutions at one location.

The Company has a state of the art tool room for the manufacture of dies, jigs, fixtures and press tools. It also has a modern press shop with high speed presses, coil feeds, CNC notching and machine shop for assembly and finished machining of lamination housings as a ready to use product.

FINANCIAL RESULTS

The financial performance of your company for the year ended 31st March, 2016 is summarized below:

Rs. in crores

	FY 2016	FY 2015
Net sales & other income	313.50	342.74
Total expenditure	292.46	300.52
Profit / (Loss) before depreciation and finance charges	21.04	42.22
Depreciation and amortization expenses	15.42	15.84
Finance charges	17.04	11.26
Profit / (Loss) before tax	(11.42)	15.12
Tax expenses	(1.86)	5.79
Net Profit / (Loss)	(9.56)	9.33
Profit / (Loss) brought forward from the previous year	57.51	52.03
Dividend (including tax on dividend)	-	3.24
Transferred to General Reserve	-	0.60
Profit / (Loss) carried to Balance sheet	47.95	57.51

OVERVIEW OF COMPANY’S FINANCIAL PERFORMANCE

Net revenue from operations decreased to Rs. 311.49 crores as against Rs. 341.04 crores in the previous year 2014-15, a decline of 8.66 %. Cost of goods sold as a percentage to net revenue from operation increased to 96.10% as against 90.55% in the previous year. Employee cost as a percentage to net revenue from operations increased to 13.24% as against 9.13% in the previous year. Other expenses as a percentage to net revenue from operations increased to 15.40% as against 13.52% in the previous year. The Loss After Tax for the current year is Rs. 9.56 crores as against a profit of Rs. 9.33 crores in the previous year.

The performance of the Company during the year was mainly impacted due to factors such as significant decline in export volumes, fall in raw material and scrap prices, rise in employee cost, elongated working capital cycle, change in statutes relating to componentization under Companies Act, 2013 and payment of Bonus Act, 1965.

Employee cost in FY2016 increased by 32.51% compared to the same period last year. This increase was on account of ramp-up of Pune plant operations while continuing the existing man power at Plant I where operations were minimal. Further employee cost was adversely impacted by one-time compensation of Rs. 0.44 crores due to staff reduction and allocation of Rs. 2 crores as severance package towards full and final settlement to unionized employees.

The Company has provided Rs. 1.50 crores as full and final settlement for unionized employees as per subsequent agreement dated 01st July, 2016 between the end of the financial year 2015-16 and the date of this report.

LIQUIDITY

As of 31st March 2016, the Company had total debt of Rs. 162.58 crores including Rs. 26.07 crores of long term debt and Rs. 136.51 crores of short term debt. With cash and cash equivalents of Rs. 18.23 crores, it resulted in a net debt position of Rs. 144.35 crores. Net worth stood at Rs. 106.96 crores, as of March 31st 2016. Total debt equity ratio was about 1.5x.

SHARE CAPITAL

The paid-up equity share capital as on 31st March, 2016 was Rs. 13.49 crores. The Company had 2,69,83,400 shares of Rs. 5/- each.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your company’s business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2015-16.

DIVIDEND

In view of the loss incurred by the Company, your Directors express their inability to recommend dividend for the financial year 2015-16.

PUBLIC DEPOSITS

During the year under review, your company has not accepted any deposit within the meaning of Section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force.

CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance, forms an integral part of this report.

INDUSTRIAL RELATIONS

Your Company has always considered its workforce and their skills as its valuable asset and continues to enhance the performance driven environment with emphasis on aligning it with the changing business requirements.

During the financial year 2015-16, a strike was called by the workmen in March, 2016 in protest against the shifting of operations from plant I (Hyderabad) to plant III (Pune). The operations at the said plant returned to normalcy by 20th April, 2016.

Industrial relations in respect of the other facilities of your company are normal.

PREVENTION OF SEXUAL HARRASSMENT

Pursuant to the legislation “Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013” introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace.

Your Company is committed to creating and maintaining a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company believes that all employees have a right to be treated with respect and dignity and has zero tolerance towards violations of its Code of Conduct, in general, and its sexual harassment policy, in particular. During the year, no complaint under the sexual harassment policy has been received by the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Retirement by rotation and subsequent re-appointment

In accordance with Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 Shri Akshay S Pitti, Vice-Chairman & Managing Director retires by rotation and being eligible offers himself for reappointment.

Appropriate Resolutions for his re-appointment are being placed for members’ approval at the ensuing AGM. The brief resume of the Director and other related information has been detailed in the notice convening the 32nd AGM of your Company. Shri Akshay S Pitti fulfils the conditions specified in the Companies Act, 2013 and the rules made there under and accordingly, the Board recommends his appointment.

During the year under review Shri GVSN Kumar, Executive Director and Chief Financial Officer of the company resigned with effect from 02nd March, 2016. The Board of Directors based on the recommendation of the Audit Committee, appointed Shri Nand Kishore Khandelwal as the Chief Financial Officer of the company with effect from 12th February, 2016.

Shri Sharad B Pitti, Chairman & Managing Director, Shri Akshay S Pitti, Vice-Chairman & Managing Director, Shri Y B Sahgal, Executive Director, Shri Nand Kishore Khandelwal, Chief Financial Officer and Shri Satyabrata Padhi, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

The Independent Directors of your Company will hold office till 21st September, 2019 and are not liable to retire by rotation.

Disclosure relating to remuneration of Directors, Key Managerial Personnel and particulars of employees:

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force). The detailed policy is available on Company’s website (http://pitti.in/investors.html).

The information required under section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Director / employees of your Company are set out as an Annexure to this report.

Directors Responsibility Statement:

Pursuant to Section 134(3)(c) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force), the Directors of your company confirm that:

a) i n the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable Accounting Standards and Schedule III of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force), have been followed and there are no material departures from the same;

b) for the financial year ended 31st March, 2016 such accounting policies as mentioned in the notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the profit and loss for the year ended 31st March, 2016;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force) for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a ‘going concern’ basis;

e) proper internal financial controls laid down by the Directors were followed by your Company and that such internal financial controls are adequate and operating effectively; and

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

Declaration of Independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued there under as well as Regulation 16(1)(b) of Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force).

Familiarization Programme for Independent Directors

The familiarization programmes are aimed to familiarize the Independent Directors with the Company, nature of industry in which the Company operates and business model of the Company. The details of the familiarization programme imparted to Independent Directors are available on the Company’s website (http://pitti.in/investors.html). The Independent Directors are regularly briefed with respect to the developments that are taking place in the Company and its operations.

Evaluation of Board’s Performance:

Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force), the process for evaluation of the annual performance of the Directors / Board was carried out.

NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES

The Board of Directors met 4 (four) times in the financial year 2015-16. The details of the meeting of the Board of Directors and its Committees and the attendance of the Directors are provided in the Corporate Governance Report which forms a part of this report.

AUDITORS AND AUDITORS REPORT

Statutory Auditors:

In accordance with section 139 and other provisions of the Companies Act, 2013 read with Companies (Audit & Auditors) Rules, 2014, members at the Annual General Meeting held on 22nd September, 2014 have appointed M/s.Laxminiwas & Co as the statutory auditors of the Company till the completion of 33rd AGM to be held in the year 2017, subject to the ratification at every AGM. Members are requested to consider the re-appointment of M/s.Laxminiwas & Co as statutory auditors and authorize the Board of Directors to fix their remuneration.

Your Company has received written consent(s) and certificate(s) of eligibility from M/s.Laxminiwas & Co in accordance with sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules issued there under (including any statutory modification or re-enactment for the time being in force).

The Auditors’ Report for the financial year ended 31st March, 2016, does not contain any qualification, reservation or adverse remark.

Cost Auditor:

The Board of Directors of your Company, on the recommendation made by the Audit Committee at its meeting held on 10th August, 2016 has approved the appointment of M/s.S S Zanwar & Associates, Cost Accountants, (Firm Registration No.100283) as the Cost Auditor of your Company to conduct the audit of cost records for the financial year 2016-17. The remuneration proposed to be paid to the Cost Auditor, subject to your ratification at the ensuing 32nd AGM, will be Rs. 2 lakhs (Rupees Two lakhs only) excluding taxes and out of pocket expenses, if any.

Your company has received consent from M/s.S S Zanwar & Associates, Cost Accountants, to act as the Cost Auditor for conducting audit of the cost records for the financial year 201617 along with a certificate confirming their independence and arm’s length relationship.

Secretarial Auditor:

In terms of Section 204 of the Companies Act, 2013, the Board of Directors of your Company have appointed Shri Ajay Kishen, Practicing Company Secretary (Certificate of Practice No.5146), as the Secretarial Auditor to conduct an audit of the secretarial records, for the financial year 2015-16.

Your Company has received consent from Shri Ajay Kishen to act as the auditor for conducting audit of the Secretarial records for the financial year ending 31st March, 2016.

The Secretarial Audit Report for the financial year ended 31st March, 2016 is annexed herewith as an Annexure to this report. The audit report confirms that the Company has complied with the applicable provisions of the Companies Act and Rules made there under, Listing agreements with stock exchanges, applicable SEBI Listing Regulations and other laws applicable to the Company.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Return as on 31st March, 2016 in form MGT-9 in accordance with section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014 are set out herewith as Annexure to this report.

RELATED PARTY TRANSACTIONS

During the financial year 2015-16, your company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which were in the ordinary course of business and on arm’s length basis and is in accordance with the provisions of the Companies Act, 2013, read with the Rules issued there under and the Listing Regulations. Further there were transactions with related parties which qualify as material transactions under the Listing Regulations for which approval of members is being sought in the forthcoming Annual General Meeting.

All transactions with related parties were reviewed and approved by the Audit Committee. Prior Omnibus approvals are granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arm’s length basis in accordance with the provisions of Companies Act, 2013 read with the Rules issued there under and the Listing Regulations.

The details of the related party transactions as per Accounting Standard 18 are set out in Note (2.38) to financial statements forming part of this report.

The Form AOC-2 pursuant to section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as an Annexure.

The policy on related party transactions, as approved by the Board, is available on the Company’s website (http://pitti.in/ investors.html).

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company during the financial year has acquired 50 equity shares of Saraswat Co-operative Bank Ltd at a price of Rs. 10/- per share.

During the year under review, 5,10,000 share warrants at Rs. 10/- each, allotted by Pitti Castings Pvt. Ltd. were converted into equity shares.

The company has not given any guarantees or provided any security during the year.

UNCLAIMED SHARES

During the year the Company transferred 2,50,600 undelivered unclaimed equity shares of '' 5/- each belonging to 1,021 shareholders to the Unclaimed Suspense Account. These shares were transferred to unclaimed suspense account on 17th November, 2015 after sending three reminders in compliance with Clause 5A of the Listing Agreement & Regulation 39(4) of the Listing Regulations, 2015.

Company is holding these shares in a Demat ‘Unclaimed Suspense Account’ with Stockholding Corporation of India on behalf of the allottees of these shares. The voting rights in respect of these shares would remain frozen till the rightful owner claims it as per the procedure laid down under the Listing Regulations.

RISK MANAGEMENT

The Risk Management is overseen by the Audit Committee of the Company on an ongoing basis. The management periodically briefs the committee / Board on the emerging risks along with the mitigation plans put in place. There are no risks which in the opinion of the Board threaten the existence of your Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this report.

VIGIL MECHANISM

Pursuant to section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, the Board of Directors have formulated a Whistle Blower Policy. Employees can raise concerns regarding any discrimination, harassment, victimization, and any other unfair practice being adopted against them or any instances of fraud by or against your Company.

Your Company hereby affirms that no Director / employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

The Whistle Blower Policy is available on Company’s website (http://pitti.in/investors.html).

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR expenditure incurred by your Company during the financial year 2015-16 is '' 0.29 crores in the areas of promoting education and women empowerment.

Your Company’s CSR Policy statement and report on the CSR activities undertaken during the financial year ended 31st March, 2016, in accordance with section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as an annexure to this report.

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

The information on conservation of energy technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is set out herewith as an Annexure to this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has well-documented Standard Operating Procedures (SOPs) for various processes which are periodically reviewed for changes warranted due to business needs. The Internal Audit department continuously monitors the efficiency of the internal controls / compliance with SOPs with the objective of providing to Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy and effectiveness of the organization’s risk management, control and governance processes.

With respect to the internal financial controls related to financial statements your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standard) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with the generally accepted accounting principle in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

CORPORATE AWARDS

During the year under review, Pitti Laminations was awarded the ‘Certificate of Excellence’ by GE of U.S. This certificate was awarded to the Company for being the ‘Best Supplier - Quality 2015’. This award is a testament to the Company’s commitment to providing products with international quality standards to its customers.

APPRECIATION

Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities and employees for their continue3d support.

For and on behalf of the Board

Sharad B Pitti

Chairman & Managing Director

DIN: 00078716

Place: Hyderabad

Date: 10th August, 2016

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Mar 31, 2014

Dear Members,

The Directors are pleased to present their 30th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March, 2014.

Corporate overview

Pitti Laminations Limited (PLL) is one of the largest manufacturers of special purpose laminations for all types of rotating electrical machinery. The Company''s products have application in industrial motors, alternators, hydro-electric and thermal power generators, wind power generators, DC machines, railway traction motors, pumps, medical diagnostic equipment and aeronautic wing control motors. PLL has a fully integrated manufacturing facility to cater to specific customer requirements and provides end-to-end solutions at one location. The Company has a state of the art tool room for the manufacture of dies, jigs, fixtures and press tools. It also has a modern press shop with high speed presses, coil feeds, CNC notching and machine shop for assembly and finished machining of lamination housings as a ready to use product. During the year under review, the Company has undertaken expansion projects, by which the installed capacity increased to 32,000 TPA. The Company has also diversified its presence into the smaller laminations segment to cater to the consumer sector.

Financial results

The financial results for the FY 2013-14 in comparison with that of the previous year are presented below:

(Rs. in cores)

FY2014 FY2013

Gross Sales 264.31 330.25

Other Income 6.37 4.35

Taxes & Duties 20.89 22.96

Net Sales & Other Income 249.79 311.65

Total Expenditure 215.12 269.51

Profit/(Loss) before depreciation and finance charges 34.67 42.14

finance charges

Depreciation 8.75 8.37

Finance charges 19.15 17.91

Profit/(Loss) before tax 6.77 15.86 Provision for taxation

- Income tax 2.07 4.82

- Deferred 0.49 1.19

Net Profit/ (Loss) 4.21 9.85

Profit/(Loss) brought forward from the previous year 49.65 41.37

Dividend (including tax on dividend) 1.58 1.57

Transferred to General Reserve 0.25 -

Profit/(Loss) carried to Balance Sheet 52.03 49.65

Review of operations

During the year, the Indian economy remained under pressure due to low levels of industrial and infrastructure investments. However, during the last quarter of the financial year, the Company benefitted from some early signs of improvement in the key economic indicators such as inflation and current account deficit. This changing environment supported strong financial performance of the Company in Q4 FY 2014, resulting in gross sales of Rs. 264.31 crores for FY 2014. Of the total sales, domestic sales contributed Rs. 161.34 crores and export sales Rs. 102.97 crores. Export sales were impacted by the postponement of orders from some of the Company''s international clients, although the situation improved from Q4 FY 2014. In particular, the export of stator frames sales declined by 450 units to 501 in FY 2014. EBITDA was Rs. 24.06 crores in FY 2014, a decrease of 38% compared to the same period of last year. PAT for the period decreased from Rs. 9.85 crores in FY 2013 to Rs. 4.21 crores in FY 2014.

Liquidity

As of 31st March 2014, the Company had a consolidated total debt of Rs. 115.24 crores, cash and cash equivalents of Rs. 9.47 crores, net debt of Rs. 105.77 crores and net worth of Rs. 111.57 crores. Total debt consists of Rs. 21.15 crores of long term debt and Rs. 94.09 crores of short term debt. At the financial year end the Company had a conservative capital structure with total debt to equity ratio of 1.0x.

Credit ratings

During the year under review, Credit Analysis and Research Limited (CARE) has reaffirmed the CARE BBB rating for long term facilities and CARE A2 rating for short term bank facilities of your Company.

Transfer to general reserves

We propose to transfer Rs. 25 lacs to the General Reserves and the balance of Rs. 395.53 lacs is proposed to be retained in the profit and loss account.

Share capital

During the year, there was no change in the issued, subscribed and paid-up equity share capital of the Company which was at Rs. 13,49,17,000 comprising 1,34,91,700 equity shares of Rs. 10/- each as at 31st March 2014.

Dividend

Despite the challenging business environment, your Directors are pleased to recommend dividend of Rs. 1.00 per equity share, 10% on face value of Rs. 10.00 each for the year ended 31st March 2014. This demonstrates Management''s ongoing commitment to provide returns to shareholders. The total dividend payout for FY 2014 will be Rs. 1.58 crores including dividend distribution tax of Rs. 0.23 crores.

The dividend, subject to approval of shareholders at the Annual General Meeting (AGM) to be held on 22nd September 2014, will be paid to the shareholders whose names appear in the Register of Members as on 15th September 2014. In respect of shares held in dematerialised form, it shall be paid to members whose names are furnished by National Securities Depository Limited (NSDL) and Central Depository Securities (India) Limited (CDSL) as beneficial owners as on that date.

Major corporate developments:

New Clients: During the year under review, the Company started supply to high profile customers such as Wind World (Enercon) and Jeumont Electric.

From September 2014, the Company expects to start supplies to companies such as:

a. Motor Segment: Toshiba, Mitsubishi-Electric and Industrial Systems Corporation

b. Thermal Power Segment: ALSTOM and Bharat Forge

c. Turbo Generators / HT Motors: WEG

Small Laminations and Die Casting:

The Company entered into the small laminations and die casting segment in FY 2014 to capitalise on the prevailing opportunities in the consumer sector. This diversification is an extension of the Company''s existing business, and limited capital expenditure was incurred. This segment is expected to result in significant cost synergies as the wastage from the industrial segment will contribute to the raw material required for this division. The consumer segment is less prone to seasonal and business cycles and is expected to strengthen the Company''s positioning in the domestic market.

Small laminations are used in making core, stators and rotors for electric motors, compressors, generators and turbines. The major customers for the segment include Texmo, Crompton Greaves, Tecumseh, Amara Raja, Servomax, Elmas, Tibrewala Fans, Crompton Greaves and V-GUARD.

Establishment of New Plant at Pune:

The Company is in the process of setting up a manufacturing facility with production capacity of around 15,000MT per annum at Pune. The new plant is focused on providing best-in- class products to customers. As many of the major domestic customers of the Company are located in Maharashtra and Gujarat, this will help in reducing the logistics effort while providing for better customer service. Moreover, the major domestic suppliers of PLL are also located in Nasik and Pune. Furthermore the facility will be closer to the Mumbai seaport, where the Company receives its imported raw materials. This new facility will enable PLL to save time, freight cost and improve inventory turnover, besides providing better customer satisfaction at competitive prices. The Company anticipates an increase in domestic volumes post completion of the project.

Expansion of Machining Division:

During the year, PLL started an expansion project for the machining division with the objective to provide "One stop solutions" to customers. The Company added new machinery and equipment to meet customer requirements. Samples in compliance with client needs from the new set-up have been submitted and the Company expects new orders in due course. This expansion is expected to add to revenue and profitability from FY 2015.

Status of Open Offer: As informed earlier, Securities Appellate Tribunal (SAT) has allowed the appeal vide its order dated 31st October 2013 in favour of the acquirers to the open offer process. However, Securities and Exchange Board of India (SEBI) has advised the Merchant Bankers not to proceed with the open offer. SEBI has filed an appeal with the Hon''ble Supreme Court of India against the SAT order dated 31st October 2013 and the matter is now pending before the apex court of India.

Capital expenditure

During the year, the Company took many strategic decisions like capacity expansion and diversification with the objective of providing one stop solutions to customers. These initiatives resulted in total capital expenditure of Rs. 19 crores. Of this total capital expenditure, Rs. 12 crore was incurred on the expansion of machining division and the remaining Rs. 7 crore was utilised for setting-up the smaller laminations segment.

PLL plans to invest around Rs. 6 crore in FY 2015 for setting up the manufacturing facility at Pune. This expansion will provide a competitive advantage to the Company in terms of customer service and supplier logistics.

Corporate social responsibility (CSR)

Your Company has always been undertaking Corporate Social Responsibility (CSR) activities on a significant scale. During the year under review, the Company has contributed Rs. 0.57 crores for various activities by way of donations.

Pursuant to section 135 of the Companies Act, 2013 your Company has constituted a Corporate Social Responsibility Committee by the Board of Directors at their meeting held on 26th May 2014.

Human resources and industrial relations

PLL understands the importance of human resource for the sustainable growth of the Company and makes best efforts for maintaining cordial relationship with the employees. The Company undertakes various measures to improve the welfare and skills of its employees through training initiatives, which support job enrichment, engagement and accountability and lead to better performance, career progression, recognition and reward. PLL has an excellent track-record of cordial and harmonious industrial relations and over the years, not a single man-day has been lost on account of labour unrest.

Transfer of amount to investor education and protection fund

Pursuant to the provisions of section 205A(5) of the Companies Act, 1956, the declared dividend which remained unpaid or unclaimed for a period of seven years has been transferred by the company to the Investor Education and Protection Fund (IEPF) established by the Central Government under section 205C of the said Act.

Environment and safety

The Company appreciates that for sustainable growth of an organisation due attention must be paid to environmental and safety standards. PLL''s internal policy ensures that they are in compliance of all the requirements for environment protection and conservation of natural resources. Suitable actions are undertaken to adopt best-in-class standards to ensure employee safety and cleanliness of the surroundings where PLL operates.

Insurance

The properties of the Company including its cash, building, plant, machinery and stocks wherever necessary and to the extent required have been adequately insured.

Fixed deposits

During the year under review, the Company has not accepted or invited any deposit from the public within the meaning of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975.

Particulars of employees

The provisions of section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 do not apply as no employee is drawing a remuneration of more than Rs. 5 lacs per month or Rs. 60 lacs per financial year.

Conservation of energy, technology absorption and foreign exchange earnings & outgo

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to section 217(1) (e) of Companies Act 1956 the Act read with Rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors Rules, 1988) is annexed hereto and forms part of the Report.

Management discussion & analysis report

In accordance with the listing agreement requirements, the Management Discussion & Analysis Report is presented in a separate section forming an integral part of the Annual Report.

Directors

During the period under review, Shri Sanjay Srivastava, Executive Director resigned from the services of the company with effect from 03rd May 2014. The Board places on record its appreciation for the services rendered by Shri Sanjay Srivastava during his tenure.

In accordance to the provisions of section 152 of the Companies Act, 1956, Shri Akshay S Pitti, Director of the company will be retiring by rotation at the ensuing Annual General Meeting (AGM) and being eligible, has offered himself for reappointment. Pursuant to provisions of section 161 (1) of the Companies Act, 2013 and Articles of Association of the company Shri GVSN Kumar was appointed as an Additional Director, designated as Executive Director & CFO with effect from 04th November 2013 and he holds office upto the date of ensuing AGM. The company has received requisite notice in writing from a member proposing Shri GVSN Kumar for appointment as Director.

As per provisions of section 149 of the Act, which has come into force with effect from 01st April 2014, an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company and is not liable to retire.

In compliance of section 149, read with schedule IV of the Act, the appointment of Shri G Narayana Rao, Shri Kanti Kumar R Podar, Shri Arun Garodia, Shri N R Ganti, Shri G Vijayakumar, Shri M Gopalakrishna, IAS (Retd) and Shri TSSN Murthy as Directors is being placed before the members in the AGM for approval.

As per the provisions of Section 149(1) of the Companies Act 2013 and the amended listing agreement, the Company should have atleast one women Director. Keeping in view the above legal requirement the Board of Directors at their meeting held on 11th August 2014 proposed to appoint Ms. Gayathri Ramachandran as an Independent Director and recommended the members for their approval.

The company has received necessary declaration from all the Independent Directors of the company confirming that they meet the criteria of Independency as prescribed both under section 149 of Companies Act, 2013 and under clause 49 of Listing Agreement.

In the opinion of the Board they fulfill the conditions specified in the Act and Rules made thereunder for appointment of Independent Directors and are Independent of the management. Members are required to refer notice of AGM and explanatory statement for details of the qualification and experience of the Directors and the period of their appointment.

The Board commends the passing of Resolutions at Item no.3,5,6,7,8,9,10,11 and 12 of the AGM notice.

Statutory auditors

M/s.Laxminiwas Neeth & Co, Chartered Accountants, auditors of the Company hold office till the conclusion of the ensuing AGM and being eligible, offer themselves for re-appointment. The statutory auditors have informed the Company that with effect from 1st April 2014, a demerger has taken place with the approval of "The Institute of Chartered Accountants of India" (ICAI) and the name of the audit firm is M/s. Laxminiwas & Co with FRN 011168S. The said Auditors have furnished a certificate, confirming that if appointed, their appointment will be in accordance with section 139 read with section 141 of the Companies Act, 2013.

Pursuant to section 139 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, it is proposed to appoint M/s. Laxminiwas & Co as statutory auditors of the company from the conclusion of the forth coming AGM till the conclusion of the 33rd AGM to be held in the year 2017, subject to ratification of their appointment at the subsequent AGMs.

Related Resolution is provided in the notice for the meeting. Your Directors commend the Resolution for members'' approval.

Cost auditors

During the year under review, based on the recommendations of the audit committee, the Board of Directors have appointed M/s. Sagar & Associates as the cost auditors of the company for the financial year 2013-14 at a remuneration of Rs. 2 lacs per annum. The due date for filing of the cost audit report for the financial year 2012-13 is 30th September 2013. The company has duly filed the reports to the Ministry of Corporate Affairs by the due date.

Pursuant to section 148 of Companies Act, 2013 read with Companies (cost records and audit) Rules, 2014 your company is not required to maintain cost audit records as the products manufactured by the company are not covered in the category of products given under the Cost Audit Rules.

Auditors report

Notes to the accounts, as referred to in the Auditors'' Report are self explanatory and therefore do not require further comments and explanation.

Corporate governance & share holders information

Your Company is committed to maintain the highest standard of corporate governance. It strives to ensure that best corporate practices are identified, adopted and consistently followed. The Directors adhere to the requirements of Corporate Governance practices set out by the Securities & Exchange Board of India, and have implemented all the stipulations prescribed. A detailed report on the Corporate Governance system is given in a separate section of the Annual Report FY 2013-14.

A certificate from auditors of the Company, M/s. Laxminiwas Neeth & Co, Chartered Accountants, Hyderabad certifying compliance with the conditions of corporate governance as stipulated in clause 49 of the listing agreement with Stock Exchanges is annexed with the report of corporate governance.

Directors responsibility statement

Pursuant to section 217 (2AA) of the Companies (Amendment) Act 1956, the Directors to their best of the knowledge and belief confirm that:

a. In the preparation of the annual accounts for the financial year ended 31st March, 2014 the applicable accounting standards have been followed and there are no material departures;

b. Accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at the end of the financial year 31st March, 2014 and of the profit & loss account of the Company for that period;

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act. Adequate systems and controls are implemented for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The annual accounts have been prepared on a going concern basis.

Acknowledgements

Your Directors wish to place on record their sincere appreciation for the co- operation and support extended by its bankers, regulatory authorities and other government agencies. Your Directors record their gratitude for the encouraging response and patronage received from the domestic and overseas clients during the year under review. The Board appreciates the committed support extended by vendors. Finally your Directors express their gratitude for the support given by all the stakeholders for the overall growth and development of the Company.

By order of the Board For Pitti Laminations Limited

Place: Hyderabad Sharad B Pitti Date: 11th August 2014 Chairman & Managing Director

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Mar 31, 2013

The Directors are pleased to present their 29th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31st, 2013.

CORPORATE OVERVIEW

Pitti Laminations Limited (PLL) is one of the large manufacturers of special purpose laminations for all types of rotating electrical machinery. The Company''s products have application in industrial motors, alternators, hydel and thermal power generators, wind power generators, DC machines, railway traction motors, pumps, medical diagnostic equipment and aeronautic wing control motors. PLL has a fully integrated manufacturing facility to cater to specifi c customer requirements and providing end- to-end solutions at one location. The Company has a state of the art tool room for the manufacture of dies, jigs, fi xtures and press tools. It also has a modern press shop with high speed presses, coil feeds, CNC notching and machine shop for assembly and fi nished machining of lamination housings as a ready to use product. During the year under review, the Company has undertaken expansion projects, by which the capacity increased to 32,000 TPA.

FINANCIAL RESULTS

The fi nancial results for the fi nancial year 2012-2013 in comparison with that of the previous year are presented below:

(? in crores)

2012- 2013 2011-2012

Gross Sales 330.25 423.91 Other Income 4.35 4.43

Taxes & Duties 22.96 20.06

Net Sales & Other Income 311.65 408.28

Total Expenditure 269.50 345.31

Profi t / (Loss) before depreciation and fi nance charges 42.15 62.97

Depreciation 8.37 6.64

Finance charges 17.91 22.87

Profi t / (Loss) before tax 15.86 33.46

Provision for taxation

- Income tax 4.83 10.11

- Deferred 1.19 0.93

Net Profit / (Loss) 9.85 22.42

Profi t / (Loss) brought forward from the previous year 41.37 25.95

Dividend (including tax on dividend) 1.57 4.70

Transferred to General Reserve 2.30

Profi t / (Loss) carried to Balance Sheet 49.65 41.37

REVIEW OF OPERATIONS

In the context of a diffi cult environment, your Company recorded sales of Rs.330.25 crores a decline of 22.09% compared to last year. Of the total sales, domestic sales contributed to Rs.172.32 crores and export sales was Rs.157.93 crores. Growth profi les have varied signifi cantly between domestic and export market''s. While domestic sales remained relatively fl at with a

2.67% growth, in a sharp contrast, the export sales declined by 38.33%. Exports sales were impacted by lower delivery volume due to postponements in the order book. Stator frames sales declined by 81 units to 951 in FY2013.

EBITDA was Rs.39.06 crores in FY2013, a decrease of 33.46%. This decline is attributed to lower revenues marginally offset

by cost effi ciency achieved by the Company. EBITDA margin was 12.55%. Interest expense for the year was Rs.14.83 crores a decline of 20.31% compared to last year. The decline in interest cost is due to successful negotiation with banks to provide better rates of interest. PAT for the period decreased from Rs.22.42 crores in FY2012 to Rs.9.85crores in FY2013.

LIQUIDITY

As of March 31st, 2013, the Company had a consolidated total debt of Rs.144.76 crores, cash and cash equivalents of Rs.6.31 crores, net debt of Rs.138.45 crores and net worth of Rs.108.94 crores. Total debt consists of Rs.14.22 crores of long term debt and Rs.130.54 crores of short term debt. The gross fi xed asset value is Rs.131.75 crores and the current asset value is Rs.231.61 crores.

CREDIT RATINGS

Your Company has been awarded a BBB rating for its long term bank facilities and A2 rating for its short term bank facilities by credit rating agency, Credit Analysis and Research Limited (CARE).

DIVIDEND

Despite the tough business environment, your Directors are pleased to recommend dividend of Rs.1.00 per equity share, 10% on face value of Rs.10 each for the year ended March 31, 2013. This demonstrates management''s ongoing commitment to provide returns to shareholders. The total dividend payout for FY2013 will be Rs.1.57 crores including dividend distribution tax of Rs.0.22 crores.

The dividend, subject to approval of shareholders at the Annual General Meeting to be held on 16th September 2013, will be paid to the shareholders whose names appear in the Register of Members as on the date of book closure i.e. from 10th September 2013 to 16th September 2013 (inclusive of both dates).

SUBSIDIARY COMPANY

As you are already aware, your Company had received the approval of members through Postal Ballot pursuant to section 192A of the Companies Act, 1956 read with the Companies (passing of the Resolution by Postal Ballot) Rules 2011 to create a subsidiary by way of investment in Pitti Castings Private Limited (PCPL) to an extent of 51% of its capital on June 28, 2012 and acquired the status of holding company. Thereafter your Company through its subsidiary was carrying

on the business of the castings and forgings.

PCPL is a power-intensive enterprise and the prevailing power shortage scenario in Andhra Pradesh has signifi cantly impacted its performance. Keeping in view the interest of shareholders, PLL ceased to be the holding Company w.e.f. March 25, 2013 through further allotment of shares and share warrants by PCPL, the stake of PLL is reduced to 48% from 51%. In order to strengthen its business relationship with PCPL, PLL has subscribed for 510,000 share warrants and shall regain the status of holding company by opting for conversion of warrants into equity shares when the operations of PCPL stabilises.

POSTAL BALLOT

Members are aware that the Company had sought approval of members through postal ballot pursuant to section 192A of the Companies Act 1956 read with the Companies (passing of the Resolution by Postal Ballot) Rules 2011 and Regulation 26 of SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 2011 in respect of the matters detailed herein below.

1. To alter the Articles of Association of Pitti Castings Private Limited (PCPL), subsidiary of Pitti Laminations Limited to enable PCPL to issue share warrants and other instruments on such terms and conditions as deemed fi t by the Board.

2. To increase issued capital of PCPL by issue of equity shares and share warrants.

The necessary resolutions were passed by the members with the requisite majority through postal ballot and were taken on record by the Board of Directors at their meeting held on March 21, 2013.

MAJOR CORPORATE DEVELOPMENTS

Recent Client Wins: During the year, your Company became an approved supplier to Chittaranjan Locomotive Works (CLW). This is a major development and enables PLL to enter the railway sector in India. The Company has supplied prototype and expects a favorable feedback. PLL''s aim is to start supplying commercial quantities to CLW by the end of FY2014. Other high profi le customer wins during the year included Emerson and BHEL (Jagdishpur and Haridwar) in the lamination segment.

Expansion Project for Machining Division: Focused on its vision to provide "One stop solutions", PLL has plans for expansion of machining division.

At the moment, Machining process is being out-sourced by PLL for the Castings supplied by PCPL. This operation is intended to be brought in-house to reduce cycle time and transport charges. This will help your Company in providing better pricing to customers and secure full control over the supply chain.

Status of Open Offer: In furtherance to the preferential allotment dated September 7, 2011, the acquirers forming part of the promoter group, namely Pitti Electrical Equipment Private Limited and Smt. Madhuri S Pitti have made a public announcement to acquire 2,698,340 equity shares from the public shareholders of Pitti Laminations Limited (PLL) and a draft letter of offer was submitted to Securities and Exchange Board of India (SEBI) on September 19, 2011.

SEBI vide its letter dated December 17, 2012 addressed to the acquirers, has asked them to increase the offer price. The acquirers have fi led an appeal with the Securities Appellate Tribunal (SAT) against the SEBI directions and the judgment is awaited from SAT.

Cost Optimisation Initiatives: During the year, Mr. Akshay S Pitti established a dedicated team to evaluate and implement cost effi ciency measures including lean manufacturing processes. All these efforts are resulting in cost optimisation and savings which will be evident from FY2014. In addition, your Company also engaged Ernst & Young LLP (E&Y) to improve operating procedures. E&Y has completed the evaluation process and submitted all the standard operating procedures (SOPs) suggesting where effi ciencies can be made enhanced. PLL is now focused on implementing the suggestions which will result in signifi cant cost reduction in coming years.

SHARE CAPITAL

During the year, there was no change in the issued, subscribed and paid-up equity share capital of the Company which stood at Rs.134,917,000 divided into 13,491,700 equity shares of Rs.10/- each as at March 31, 2013.

AWARDS & RECOGNITIONS

Your Company has received the prestigious "Best Supplier of the Year for 2012" from General Electric across all verticals (the verticals includes GE Power, GE Capital, GE Commercial, GE Transportation) in Asian pacifi c Region except China.

CORPORATE SOCIAL RESPONSIBILITY

Sustainability has always been integral to your Company''s way of doing business. During the year under review, the Company has contributed a sum of Rs.0.40 crores for various activities by way of donations as against Rs.0.50 crores in the preceding year.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Your Company has an excellent track record of cordial and harmonious industrial relations and over the years not a single man-day was lost on account of labor unrest. PLL undertakes steps for upgrading the knowledge base of the employees by continuous training. The management has been taking several steps to promote job enrichment, engagement and accountability for performance, career progression, reward, recognition and welfare. The Board places on record its appreciation of the performance of employees at all levels in the concluded year.

INVESTOR RELATIONS

Your Company always endeavors to keep the time of response to shareholders'' requests / grievances at the minimum.

TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of section 205A (5) of the Companies Act 1956 relevant amount which remained unpaid or unclaimed for a period of 7 years has been transferred by the Company to the Investors Education and Protection Fund (IEPF).

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company''s policy requires the conduct of all operations in such a manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

INSURANCE

The properties of the Company including its cash, building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

FIXED DEPOSITS

Your Company has not accepted any fi xed deposits and as such, no amount of principal or interest was outstanding as of the balance sheet date.

DEMATERIALIZATION OF SHARES

The Company''s shares are compulsorily traded in dematerialised form and are available for trading with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The shareholders can hold our shares with any of the depository participants registered with these depositories. As on March 31, 2013, about 96.9% shares of the Company were held in dematerialised form.

The equity shares of the Company are frequently traded at the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).

PARTICULARS OF EMPLOYEES

The provisions of section 217 (2A) of the Companies Act, 1956 with the Companies (Particulars of Employees) Amendment Rules, 2011 do not apply as no employee is drawing a remuneration of Rupees fi ve lacs per month or Rupees Sixty lacs per fi nancial year.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to section 217(1) (e) of the Act read with Rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors Rules, 1988) is annexed hereto and forms part of the Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In accordance with the listing agreement requirements, the Management Discussion & Analysis Report is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standard of corporate governance. The Directors adhere to the requirements set out by the Securities & Exchange Board of India (SEBI) Corporate Governance practices and have implemented all the stipulations prescribed. A detailed report on Corporate Governance pursuant to the requirements of clause 49(VI) of the listing agreement forms part of the annual report. A certifi cate from the auditors of the Company, M/s. Laxminiwas Neeth & Co, Chartered Accountants, Hyderabad confi rming compliance of conditions of corporate governance as stipulated under the aforesaid clause 49 is annexed to the report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 217 (2AA) of the Companies (Amendment) Act 2000, the directors to the best of their knowledge and belief confi rm that:

1. In the preparation of the annual accounts for the fi nancial year ended March 31st, 2013, the applicable accounting standards have been followed and there are no material departures;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the fi nancial year and of the profi t & loss account of the Company for that period;

3. They have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confi rm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts on a going concern basis.

DIRECTORS

Shri Sanjay Srivastava who was appointed as Executive Director for a period of three years effective from June 30, 2010 has been re-appointed for a period of three years effective from July 1, 2013 and the Company is seeking approval of members at the Annual General Meeting for the said re-appointment.

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Shri G Vijaya Kumar, Shri Arun Garodia, and Shri TSSN Murthy retire by rotation and being eligible offer themselves for re-appointment.

STATUTORY AUDITORS

M/s Laxminiwas Neeth & Co, Chartered Accountants, who are Statutory Auditors of the Company hold offi ce up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2013-14. As required under the provisions of the Section 224 (1B) of the Companies Act, 1956, the Company has obtained written confi rmation from M/s Laxminiwas Neeth & Co that their appointment if made would be in conformity with the limits specifi ed in the said Section. Further they also hold a valid certifi cate issued by the Peer Review Board of the ICAI as required under revised clause 41 of the listing agreement.

COST AUDITORS

Pursuant to section 233 B (1) of the Companies Act 1956, Board of the Directors of the Company in accordance with the provisions of the sub-section (1B) of section 224 and with the previous approval of Central Government, has appointed M/s Sagar and Associates, Cost Accountants as cost auditors in respect of the products of the Company covered under chapter 85 of the Central Excise Tariff Act, 1985 for the Financial year 2012-13.

Subject to the approval of the Central Government, the Board of Directors of the Company has appointed M/s Sagar and Associates, Cost Accountants as cost auditors to audit the cost accounts of the Company for the Financial Year 2013-14.

AUDITORS REPORT

The Board has duly examined the Statutory Auditors Report to the accounts, which is self explanatory and clarifi cations wherever necessary have been included in the notes to accounts section in the annual report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation for the co-operation and support extended by its bankers, regulatory authorities and other government agencies. Your Directors record their gratitude for the encouraging response and patronage received from the domestic and overseas clients during the year under review. The Board appreciates the committed support extended by vendors. Finally your Directors express their gratitude for the support given by all the stakeholders for the overall growth and development of the Company.

By order of the Board

For Pitti Laminations Limited

Place: Hyderabad Sharad B Pitti

Date: 03rd May 2013 Chairman & Managing Director

---

Mar 31, 2012

The Directors have pleasure in presenting their 28th Annual Report on the business and operations of your company for the financial year ended 31st March, 2012.

Financial Results

The financial results for 2011-2012 in comparison with that of the previous year are presented herein below:



(Rs. in lacs)

2011-2012 2010-2011

Gross Sales 42391.19 26649.17

Other Income 443.29 342.04

Taxes & Duties 2006.63 1471.48

Net Sales & Other Income 40827.85 25519.73

Total Expenditure 34531.31 22254.71

Profit/(Loss) before depreciation and finance charges 6296.54 3265.02

Depreciation 663.75 627.77

Finance charges 2286.52 1302.29

Profit/(Loss) before tax 3346.27 1334.96

Provision for taxation

- Current 1010.99 428.61

- Deferred 93.22 57.66

Net Profit/ (Loss) 2242.06 848.69

Profit/(Loss) brought forward from the previous year 2595.36 2056.40

Dividend (including tax on dividend) 470.41 109.74

Transferred to General Reserve 230.00 200.00

Profit/(Loss) carried to Balance sheet 4137.01 2595.36

Review of Operations

The Board has pleasure in informing you that the company achieved highest ever production, sales, turnover and profitability for the year ended 31st March 2012.

The company made sales of 25022 MT as against 20270 MT in the previous fiscal registering a growth of 23.44% while the target set for the year under review was 24000 MT. On export front, as against the target of 10000 MT, sales recorded were 11828 MT and the corresponding sales in the preceding year were 6800 MT. The domestic sales were marginally lower at 13194 MT as compared to the target of 14000 MT. The domestic sales in the previous fiscal were 13470 MT.

The company achieved a turnover of Rs. 423.91 crores as against Rs. 266.49 crores in the preceding year recording a growth of 59.07%.

The robust growth in exports, operational economies of scale, prudent working capital management and the diligent and dedicated efforts of the company in synergizing its operations in tune with the demands of buoyant market have all cumulatively contributed to a record profit before tax of Rs. 33.46 crores as against Rs. 13.35 crores in the previous fiscal.

The Profit after tax (PAT) stands at Rs. 22.42 crores compared to Rs. 8.49 crores in 2010-2011. The company has earned cash profit of Rs. 29.06 crores after tax as against Rs. 14.76 crores in the previous year.

The net worth of the company as on 31st March 2012 stands at Rs. 100.66 crores compared to Rs. 67.09 crores as on 31st March 2011.

Exports

The significant surge in the exports in the year under review is a pointer to the presence of strong demand coupled with the serious endeavours made by the company in tapping good volume of business from its overseas customers.

Against the sales of 6800 MT of laminations and 603 nos. of stator frames last year, the company has sold 11828 MT of laminations and 1032 nos. of stator frames during the year. The export turnover as a result, shot up to Rs. 256.08 crores as against export income of Rs. 131.70 crores in the previous fiscal thereby registering a growth of 94.44%.

Dividend

Members are aware that the company declared dividend at Rs. 1/- per share for the year ended 31st March 2011. Considering the significant improvement in the operations and financials, your Directors recommend dividend at Rs. 3/- per share for the year ended 31st March 2012 and if approved by the members at Annual General Meeting, it will entail an outflow of Rs. 4.70 crores including the dividend tax.

Corporate Social Responsibility

True to its belief and philosophy that Corporate Social Responsibility is an integral part of the business, your company continues to support various sustainable initiatives in social and charitable activities.

During the year under review, the company has contributed a sum of Rs. 49.37 lacs for various activities of such nature by way of donations as against Rs. 33.95 lacs in the preceding year.

Outlook and Current Year Plans

The company had preliminary deliberations with the present and potential clientele and having carefully considered the downturn in the domestic economic scenario, the company has set a sales target of 26000 MT for the year. The domestic sales and exports are expected to be 15000 MT and 11000 MT respectively. The company targets to sell 1200 nos of machined motor housings in the current year. Necessary capital expenditure programmes are being drawn up in the current year to strengthen the machining division.

Preferential Issue

Members are aware that the company has obtained the approval of members for issue of 40,50,000 equity shares of Rs. 10/- each to promoters at a price determined in accordance with SEBI (Issue of Capital and Disclosure Requirement) Regulations 2009. Approval of members was also given for re-issue of 8300 forfeited shares to the promoters at a price determined in accordance with SEBI (Issue of Capital and Disclosure Requirement) Regulations 2009.

The Board, at its meeting held on 07th September 2011, has allotted 34,90,000 equity shares to Pitti Electrical Equipment Pvt Ltd and 5,60,000 equity shares to Smt Madhuri S Pitti and the aggregate allotment of 40,50,000 equity shares to the promoters was made at Rs. 39.15 per share (including premium of Rs. 29.15 per share) being the price determined in accordance with SEBI (Issue of Capital and Disclosure Requirement) Regulations 2009.

As the request for the approval for re-issue of 8300 forfeited shares was to be dealt with by a different wing in the stock exchange, the company apprehended delay in obtaining approvals from Bombay Stock Exchange and National Stock Exchange and therefore deferred the proposal to re-issue forfeited shares to the promoters and restricted the preferential allotment to 40,50,000 equity shares only.

The listing approval for the preferential allotment of equity shares to the promoters has been obtained from the stock exchanges. The re-issue of 8300 equity shares will be made at an appropriate time subject to the approval of regulatory authorities.

As a result of the preferential allotment, the shareholding of the promoter group has gone up to 60% from 42.84% and therefore triggered the requirements of open offer.

It was stated in the last Annual report that the acquirers (promoter group) would be making an open offer under the SEBI Take Over Regulations for atleast 20% of the paid-up equity share capital of the company as expanded pursuant to the preferential allotment of equity shares. Accordingly the acquirers forming part of the promoter group, namely Pitti Electrical Equipment Pvt Ltd and Smt Madhuri S Pitti have made a public announcement to acquire 26,98,340 equity shares from the public shareholders of Pitti Laminations Limited (Target Company) and a

draft letter of offer has been submitted to Securities and Exchange Board of India (SEBI) on 19th September 2011.

While scrutinizing the draft letter of offer, SEBI sought certain clarifications which were promptly provided. The acquirers will initiate the process of acquiring the shares in accordance with the procedures laid down in the Regulations immediately after Draft Letter of Offer (DLOF) is cleared by SEBI.

Postal Ballot

Members are aware that the company has sought approval of members through postal ballot pursuant to section 192A of the Companies Act 1956 read with the Companies (passing of the Resolution by Postal Ballot) Rules 2011 in respect of the matters detailed herein below.

1. To alter the objects clause of its Memorandum of Association so as to foray into foundry / castings and forging business;

2. To create a subsidiary for carrying on interalia the foundry/ castings business;

3. To enter into an agreement with Vaksh Steels Private Limited (VSPL) either directly by the company or through its subsidiary to acquire the assets of its foundry / castings division

The necessary Resolutions were passed by the members with the requisite majority through postal ballot.

The company proposes to invest in Pitti Castings Private Limited (PCPL) so as to make it a subsidiary and there upon PCPL will acquire the assets of Foundry/Castings division of VSPL and carry on the operations.

The acquisition is proposed to be made by PCPL for operational convenience. The cost of acquisition will be funded by way of debt / equity / internal accruals / unsecured loans or a combination of these components.

The acquisition shall be subject to the satisfaction of the Board with regard to completion of legal, technical and financial due diligence of "The Assets" proposed to be acquired.

Transfer of Amount to Investor Education and Protection Fund

Pursuant to the provisions of section 205A (5) of the Companies Act 1956 relevant amount which remained unpaid or unclaimed for a period of 7 years has been transferred by the company to the Investors Education and Protection Fund.

Report on Corporate Governance

A detailed report on Corporate Governance prepared in compliance with provisions of listing agreement with the Stock Exchanges form part of this Report. The Management Discussion and Analysis also forms part of the Annual Report.

Directors

Shri Sharad B Pitti Chairman and Managing Director and Shri Y B Sahgal Executive Director have been re-appointed for a period of five years effective from 01st May 2012 and the company is seeking approval of members at the Annual General Meeting for the said reappointments.

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Shri Kanti Kumar R Podar and Shri M Gopalakrishna, IAS (Retd) retire by rotation and being eligible offer themselves for re- appointment.

Auditors

The Company has received a notice from a member proposing that M/s Laxminiwas Neeth. & Co Chartered Accountants Hyderabad be appointed as Statutory Auditors of the company in place of M/s Laxminiwas & Jain Chartered Accountants, Hyderabad and who upon their appointment shall hold office from the conclusion of the forthcoming Annual General Meeting (AGM) till conclusion of next AGM at such remuneration as the Board my determine in due course. The company has initiated necessary action upon receipt of notice from the member.

Industrial Relations

The commitment and devotion demonstrated by the employees at all levels in responding to the rising demand and the key role played by them in enabling the company to exceed its targets vindicates the point that the industrial relations of your company continue to be cordial with mutual trust, harmony and unity of purpose acting as strong binding forces.

To build the human resources, the management has been taking several steps to promote job enrichment, engagement, accountability for performance, career progression, reward, recognition and welfare.

The Board places on record its appreciation of the excellent performance of employees at all levels in the just concluded year.

Insurance

The properties of the company including its building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

Particulars of Employees

The provisions of section 217 (2A) of the Companies Act, 1956 with the Companies (Particulars of Employees) Amendment Rules, 2011 do not apply as no employee is drawing a remuneration of Rupees five lacs per month or Rupees Sixty lacs per financial year.

Energy, Technology and Foreign Exchange

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to section 217(1) (e) of the Act read with Rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors Rules, 1988) is annexed hereto and forms part of the Report.

Directors' Responsibility

Pursuant to section 217(2AA) of the Companies (Amendment) Act 2000, the Directors confirm that:

In the preparation of annual accounts for the year ended 31st March 2012, the applicable accounting standards read with requirements set out under revised schedule VI to the Companies Act 1956 have been followed and there are no material departures from the same.

The Directors have selected such accounting policies and applied them consistently and made judgements 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 financial year and of the profit or loss of the company for that period.

The Directors have 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; and

The Directors have prepared the annual accounts on a going concern basis.

Acknowledgements

Your Directors wish to place on record their appreciation for the co-operation and support extended by State Bank of India - Industrial Finance branch, Allahabad Bank - Industrial Finance branch, Kotak Mahindra Bank, Indian Overseas Bank, IndusInd Bank, Oriental Bank of Commerce, SBI Global Factors, Canbank Factors, Tata Capital, L & T Finance and all other Governmental bodies and agencies.

Your Directors record their appreciation for the encouraging response and patronage received from the domestic and overseas clientele as is evident by the surge in the sales during the year under review.

The Board appreciates the committed support extended by vendors and all other stake holders to the company.

Finally your Directors express their appreciation for the support given by the shareholders for the overall growth and development of the company.

By order of the Board

for Pitti Laminations Limited

Place : Hyderabad Sharad B Pitti

Date : 30th April 2012 Chairman & Managing Director

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting their 27th Annual Report on the business and operations of your company for the financial year ended 31st March, 2011.

FINANCIAL RESULTS

The financial results for 2010-2011 in comparison with that of the previous year are here in presented.

(Rs. in lacs)

2010-2011 2009-2010

Gross Sales 26649.17 15299.07

Other Income 386.71 721.32

Taxes & Duties 1471.48 851.10

Net Sales & Other Income 25564.40 15169.29

Total Expenditure 22254.71 13250.23

Profit/(Loss) before depreciation and finance charges 3309.69 1919.07

Depreciation 627.77 633.59

Finance charges 1346.96 1193.25

Profit/(Loss) before tax 1334.96 92.22 Provision for taxation

- Current 428.61 1.12

- Deferred 57.66 61.99

Net Profit/ (Loss) 848.69 29.11

Profit/(Loss) brought forward from the previous year 2056.40 2027.28

Dividend (including tax on dividend) 109.74 -

Transferred to General Reserve 200.00 -

Profit/(Loss) carried to Balance sheet 2595.36 2056.39

REVIEW OF OPERATIONS

The Board has pleasure in informing you that the company recorded highest ever production and sales for the year ended 31st March, 2011.

The company made sales of 20270 MT against 13814 MT in the previous year registering a growth of 46.74%. Increase in sales was in both exports and domestic sales while rate of growth on exports is more pronounced.

It is gratifying to note that the sales of 20270 MT recorded in the year significantly surpassed the sales target of 17000 MT set by the company. On the export front, as against the target of 3000 MT, sales recorded were 6800 MT. Against the domestic sales target of 14000 MT, the sales were marginally lower at 13470 MT.

Exports have risen to 6800 MT from a low of 3517 MT recorded in the previous year. Domestic sales have increased to 13470 MT compared to 10297 MT registered in the last year.

The increase in domestic and export sales during the year was due to the improvement in the economic situation and the concerted efforts of the company in synergizing its operations in tune with the demands of the buoyant market.

The company achieved a turnover of Rs.266.49 crores as against Rs.152.99 crores in the previous year recording a growth of 74.18%.

Due to the robust growth in volume of sales and operational economies of scale, the company has posted a profit before tax (PBT) of Rs.13.35 crores as against the PBT of Rs.0.92 crores in the previous fiscal year.

The profit after tax (PAT) stands at Rs.8.48 crores as against Rs.0.29 crores in 2009-10. The company has earned a cash profit of Rs.14.76 crores after tax compared to Rs.6.63 crores in the previous year.

The net worth of the company as on 31st March, 2011 stands at Rs.67.09 crores as against Rs.59.70 crores as on 31st March, 2010.

EXPORTS

Members are aware that during the previous year, the company suffered on the export front due to global melt down. The Board has pleasure in informing the members that there was a sharp rebound on the export front with the revival in the demand coupled with the diligent efforts made by the company in capturing good volume of business from GE group which enabled it to shore up its overseas business.

Against the sales of 3517 MT of laminations and 407 nos. of stator frames during the last year the company has sold 6800 MT of laminations and 603 nos. stator frames during the year. As a result, company earned an income of Rs.131.70 crores as against the export turnover of Rs.63.59 crores in the previous fiscal thereby registering a growth of 107.11%.

The sale of stator frames forming part of export turnover recorded an income Rs.23.70 crores as against Rs.13.98 crores recorded in the preceding year thereby registering a growth of 69.52%.

DIVIDEND

Members are aware that in view of the low profits, the company could not pay dividend in the last year to its members and taking into account the proposed outlay on capital expenditure programmes in the current year and the enhanced requirements of working capital facilities, there is need for the company to conserve its resources.

Despite such an imperative need to conserve resources, your Directors recommend dividend at Rs.1/- per share for the year ended 31st March, 2011. The dividend, if approved by the members at the Annual General Meeting will entail an outlay of Rs.1.10 crores including the dividend tax.

CORPORATE SOCIAL RESPONSIBILITY

The management believes and recognizes that social responsibility is integral to the business vision and philosophy and would strive to support various sustainable initiatives in social and charitable activities.

During the year under review, the company has contributed a sum of Rs.33.45 lacs to charitable activities by way of donations as against Rs.18.45 lacs in the preceding year.

OUTLOOK AND CURRENT YEAR PLANS

The company had extensive deliberations with its present and potential clientele and having carefully considered the recovery of the export market and further improvement in the domestic market, the company has set a sales target of 24000 MT for the year. The domestic sales and exports are expected to be 14000 MT and 10000 MT respectively. The company targets to also sell 900 nos of machined motor housings in the current year.

The proposed capital expenditure with an estimated outlay of Rs.23 crores is mainly to undertake de-bottlenecking operations and for replacement of certain machines which are being phased out. The financial tie-up has been completed and the facilities are expected to be in place during the financial year.

PREFERENTIAL ISSUE

With the improvement in the economic situation, Your Directors are hopeful that the company will enter a new growth trajectory. The mission of the company is to take advantage of emerging opportunities and add value at every stage of the value chain on a sustainable basis.

While the company is making all-out efforts to enlarge and broad–base the domestic and overseas clientele and build adequate capacity and infrastructure to more effectively service customers, there is pressing need to augment the long-term funds of the company. It is therefore felt appropriate to go in for a preferential issue to the promoters to facilitate the company to secure funds and fi nance its plans for rapid productivity increases and higher profitability.

Infusion of funds by way of preferential issue will help the company in augmenting the equity base, owned long term funds and bring about improvement in the net worth and other financials of the company.

The details of the preferential issue including the size and the price are detailed in the notice and explanatory statement and the company seeks the approval of members for the preferential issue at this Annual General Meeting.

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in compliance with the provisions of listing agreement with the Stock Exchanges forms part of this Report. The Management Discussion and Analysis also forms part of the Annual Report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company’s Articles of Association, Shri G Narayana Rao and Shri N R Ganti retire by rotation and being eligible offer themselves for re-appointment.

Members are aware that Shri Akshay S Pitti has been re-appointed as Vice-Chairman and Joint Managing Director with effect from 22nd March, 2010 and the same has been approved by the members at the Annual General Meeting held on 20th September, 2010.

The Board felt that the company should capitalize on the buoyant market and for that purpose take new initiatives and improve the performance of the company. Shri Akshay S Pitti has demonstrated commendable skill and commitment and played a pivotal role in recording robust growth in the year under review.

It is in this context that Shri Akshay S Pitti has been re-designated as Vice-Chairman and Managing Director so that the company can be geared to meet the emerging opportunities.

The appointment of Shri Akshay S Pitti as Vice- Chairman and Managing Director is subject to the approval of members.

AUDITORS

The present Auditors Laxminiwas & Jain, Chartered Accountants, Hyderabad retire at the conclusion of the ensuing Annual General Meeting. They have indicated their willingness to accept re-appointment and have further confirmed their eligibility under section 224 (IB) of the Companies Act, 1956.

INDUSTRIAL RELATIONS

Industrial relations of your company continue to be cordial and is based on mutual trust, harmony and unity of purpose. The contribution of the employees to improved performance during the year is proof of the success of the policy.

To build the human resources, the management has been taking several steps to promote job enrichment, engagement, accountability for performance, career progression, reward, recognition and welfare.

The Board places on record its appreciation of the excellent performance of employees at all levels in the just concluded year.

INSURANCE

The properties of the company including its buildings, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

PARTICULARS OF EMPLOYEES

The provisions of section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Amendment Rules, 2011 do not apply as no employee is drawing a remuneration of Rupees five lacs per month or Rupees sixty lacs per financial year.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to section 217 (1) (e) of the Act read with Rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors Rules, 1988) is annexed hereto and forms part of the Report.

DIRECTORS’ RESPONSIBILITY

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

in the preparation of annual accounts, the applicable accounting standards have been followed.

the Directors have selected such accounting policies and applied them consistently and made judgements 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 or loss of the company for that period.

the Directors have 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.

the Directors have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the co-operation and support extended by State Bank of India - Industrial Finance Branch, Allahabad Bank - Industrial Finance Branch, IndusInd Bank, Kotak Mahindra Bank, Indian Overseas Bank, Oriental bank of Commerce, SBI Global Factors, Canbank Factors, Tata Capital, L & T Finance Limited and all other governmental bodies and agencies.

Your Directors record their appreciation for the encouraging response and patronage being received from the domestic and overseas clientele as is evident by the surge in signifi cant growth in the sales during the year under review.

The Board appreciates the committed support extended by vendors and all other stakeholders to the company.

Finally your Directors express their appreciation for the support given by the shareholders for the overall growth and development of the company.

for and on behalf of the Board PITTI LAMINATIONS LIMITED SHARAD B PITTI CHAIRMAN & MANAGING DIRECTOR

Place : Hyderabad Date : 07th July, 2011

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Mar 31, 2010

The Directors have pleasure in presenting their 26th Annual Report on the business and operations of your company for the financial year ended 31st March, 2010.

FINANCIAL RESULTS

The financial results for 2009-2010 in comparison with the previous year are presented herein below:

(Rs. in lacs)

2009-2010 2008-2009

Gross Sales 15299.07 26702.45

Other Income 721.32 (914.87)

Taxes & Duties 851.10 852.27

Net Sales & Other

Income 15169.29 24935.32

Total Expenditure 13250.23 22186.67

Profit/(Loss) before depreciation and finance charges 1919.06 2748.65

Depreciation 633.59 552.28

Finance charges 1193.25 1290.26

Profit/(Loss) before tax 92.22 906.11

Provision for taxation

- Current 1.12 154.27

- Deferred 61.99 95.74

- FBT - 15.33

Tax of earlier years - 28.70

Net Profit/ (Loss) 29.11 612.07

Profit/(Loss) brought forward from the previous year 2027.28 1575.73

Dividend (including tax on dividend) - 110.51

Transferred to General Reserve - 50.00

Profit/(Loss) carried to Balance sheet 2056.39 2027.28

REVIEW OF OPERATIONS

The global meltdown had its impact on the exports of the company during the year under review. As a result, the company could record sales of only 13814 MT against 17546 MT achieved in the previous year, a decline of 21.27%.

The sales attained for the year under review falls short of the target set at 15000 MT. However the companys export sales are 3517 MT as against the target of 3000 MT. Domestic sales for the year are at 10297 MT as against the target of 12000 MT.

Though the domestic sales have fallen short of target set for the year, it is pertinent to note that the domestic sales have increased from 7462 MT to 10297 MT in the year signalling the economic recovery on the domestic front.

The company has clocked a turnover of Rs.152.99 crores as against Rs.267.02 crores registered in the year ago thus recording a decline of 42.70%.

During the year under review, the company incurred non-recurring expenditure of USD 1.20 million equivalent to Rs.548.31 lacs in respect of GEs claim towards Engineering analysis for repair procedures, actual repairs and other associated costs. This has been considered in the financial results as an exceptional item of expenditure.

In view of the lower volume of sales, steep fall in exports and the non-recurring expenditure incurred for settling GEs claim, the company has posted a profit before tax (PBT) of Rs.0.92 crores as against the PBT of Rs.9.06 crores recorded in the previous fiscal.

The profit after tax (PAT) stands at Rs.0.29 crores as against Rs.6.12 crores in 2008-2009. The company has earned a cash profit of Rs.6.63 crores after tax compared to Rs.11.64 crores in the previous year.

The networth of the company as on 31st March, 2010 stands at Rs.59.70 crores as against Rs.59.41 crores as on 31st March, 2009.

EXPORTS

The export sales were affected due to global recession. There is a steep fall in export turnover during the year under review. Export turnover declined to Rs.63.59 crores compared to Rs.200.61 crores in the previous fiscal. In an year marked by challenges in the wake of slowdown on the global front, it is gratifying to note that export sales of 3517 MT have surpassed the target set at 3000 MT.

Export sales of stator frames were 407 nos as against 1766 nos in the previous year. Sale of stator frames, forming part of export turnover, has witnessed significant fall yielding an income of Rs.13.98 crores as compared to Rs.69.28 crores in the preceding year.

DIVIDEND

In view of low profits earned by the company due to worldwide recessionary conditions, and steep fall in export orders, your Directors regret their inability to recommend any dividend for 2009-2010.

CORPORATE SOCIAL RESPONSIBILITY

The management believes and recognizes that social responsibility is integral to the business vision and philosophy and would strive to support various charitable and social activities through sustainable initiatives.

During the year under review, the company has contributed a sum of Rs.18.45 lacs as compared to Rs.29.45 lacs in the preceding year to charitable activities by way of donations.

OUTLOOK AND CURRENT YEAR PLANS

The management has not been witnessing any visible improvement in the order book position on the export front while further surge in the domestic sales is anticipated for the current year based on extensive deliberations the company had with its present and potential domestic clientele.

Based on available indications, the company has set a sales target of 17000 MT for current year, out of which, domestic sales and exports are expected to be 14000 MT and 3000 MT respectively. The company targets to sell 300 nos of machined motor housings in the current year.

REPORT ON CORPORATE GOVERNANCE

A detailed Report on Corporate Governance prepared in compliance with the provisions of listing agreement with the Stock Exchanges forms part of this Report. The Management Discussion and Analysis also forms part of the Annual Report.

DIRECTORS

In accordance with provisions of the Companies Act, 1956 and the Companys Articles of Association, Shri Arun Garodia and Shri TSSN Murthy retire by rotation and being eligible offer themselves for re-appointment.

Shri Akshay S Pitti has been re-appointed as Director (Exports & Business Development) for a further period of five years effective from 14th October, 2009 subject to the approval of members.

With the gradual improvement in the economic scenario, the company is poised to attain significantly higher volume of sales in 2010-2011 and the Board feels that the company should take stock and advantage of the emerging favourable climate and economic growth prospects of India and the western world.

It is in this context, that Shri Akshay S Pitti has been re-designated as Vice-Chairman and Joint Managing Director so that the company gears up to the emerging opportunities and meet the challenges under the dynamic leadership of Shri Akshay S Pitti.

Shri Akshay S Pitti has been appointed as Vice-Chairman and Joint Managing Director with effect from 22nd March, 2010 till 13th October, 2014 (the period up to which Shri Akshay S Pitti would have held the position in his earlier capacity).

The appointment of Shri Akshay S Pitti as Vice-Chairman and Joint Managing Director is subject to the approval of share holders.

Shri Y B Sahgal, Executive Director has been re-appointed for a further period of three years effective from 28th June, 2010 subject to the approval of members.

The Board at its meeting held on 30th June, 2010 has appointed Shri Sanjay Srivastava as an additional director under section 260 of the Companies Act, 1956 and designated him as Executive Director. He shall hold office up to the date of the forthcoming Annual General Meeting and a Resolution for his appointment is being placed before the members for their approval.

The Board believes that the extensive expertise of Shri Sanjay Srivastava in Quality Assurance, systems and practices and other critical areas concerning the operations will be of significant advantage to the company in attaining its production targets and in providing quality deliverables.

Shri Santosh Kumar Agrawal, Director (Technical) has resigned on personal grounds and was relieved from his duties and responsibilities on 31st July, 2010. The Board places on record its appreciation of the services rendered by Shri Santosh Kumar Agrawal.

AUDITORS

The present Auditors Laxminiwas & Jain, Chartered Accountants, Hyderabad retire at the conclusion of the ensuing Annual General Meeting. They have indicated their willingness to accept re-appointment and have further confirmed their eligibility under section 224 (IB) of the Companies Act, 1956.

INDUSTRIAL RELATIONS

The industrial relations have been marked by mutual trust, harmony and unity of purpose.

The company provides roadmap for acquiring need based and appropriate human resources, its development and its retention through training, job enrichment, reward, recognition and accountability for performance, career progression and welfare. The management believes that sincere compliance to the Human Resources Management (HRM) policy will certainly lead to greater operating efficiency and enhanced delivery capabilities.

The Board places on record its appreciation of the services rendered by employees at all levels during the year under review.

INSURANCE

The properties of the company including its buildings, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

PARTICULARS OF EMPLOYEES

Information in accordance with provisions of section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) (Amendment) Rules, 1975 is furnished in the annexure.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to section 217 (1) (e) of the Act read with Rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors Rules, 1988) is annexed hereto and forms part of the Report.

DIRECTORS RESPONSIBILITY

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

(i) in the preparation of annual accounts, the applicable accounting standards have been followed.

(ii)the Directors have selected such accounting policies and applied them consistently and made judgements 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 or loss of the company for that period.

(iii)the Directors have 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)the Directors have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the co-operation and support extended by State Bank of India, Industrial Finance Branch, Allahabad Bank, Industrial Finance Branch, IndusInd Bank Ltd, Kotak Mahindra Bank Ltd, SBI Global Factors Ltd, Canbank Factors Ltd, Tata Capital Ltd and all other governmental bodies and agencies.

Your Directors record their appreciation for the encouraging response and patronage being received from the domestic clientele as is evident by the surge in domestic sales.

The company appreciates its overseas clientele for the support rendered by them despite the adverse circumstances on the export front.

The Board appreciates the committed support extended by suppliers and all other stakeholders to the company.

Finally your Directors express their appreciation for the support given by the shareholders for the overall growth and development of the company.

for and on behalf of the Board

PITTI LAMINATIONS LIMITED

SHARAD B. PITTI

CHAIRMAN AND MANAGING DIRECTOR

Place : Hyderabad

Date : 06th August, 2010