Directors Report of Rishi Laser Ltd.

Mar 31, 2015

To,

The Members,

The Directors have pleasure in presenting their 23rd Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015.

FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANYS

(Rs. In Lacs)

Sr. Particulars 2014-15 2013-14 No. Standalone Consolidated Standalone Consolidated

(i) Total Income 8883.25 10083.79 10343.03 12193.37

(ii) Profit/(Loss) before Tax (1392.27) (1671.31) (1263.63) (1495.48)

(iii) Provision for Tax (101.00) (115.87) (71.64) (74.92)

(iv) Profit After Tax (1291.27) (1555.44) (1191.99) (1420.56)

(v) Balance Brought forward from Previous year (443.19) (802.53) 748.83 560.58

(vi) Balance available for appropriation (1734.43) (2289.34) (443.19) (802.58)

(vii) General Reserve 746.41 746.41 746.41 746.41

(viii) Surplus/ (Deficit) Carried to the next years (1734.43) (2289.34) (443.19) (802.58) account.

DIVIDEND

In view of the losses for the year ended March 31, 2015, the Board of Directors of your Company do not recommend dividend for the year.

RESERVES

As on March 31, 2015 the reserves and surplus stood at Rs. 1773.83 lac as compared to Rs. 3066.50 in the previous year.

COMPANY'S WORKING DURING THE YEAR

During the year the Company earned total income of Rs. 8883.25 lacs as compared to Rs. 10343.03 earned in the previous year showing a reduction of 14%. The operations during the year has resulted in a loss of Rs. 1291.27 lacs.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department forming part of Accounts Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit; owners undertake corrective action in their respective areas and thereby strengthen the controls.

SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

As on the date of Balance Sheet, the Company has one subsidiary viz. Rishi Consfab Private Limited.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT

The details of the financial position of the Subsidiary included in the consolidated financial statement is annexed herewith as Annexure 'A' in Form AOC-1.

DEPOSITS

During the year under report, the Company has not accepted deposits from public under Chapter V of the Act.

STATUTORY AUDITORS

M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors of the Company (Firm Registration No. 100282W) retire and offer themselves for re- appointment.

The Company has obtained the requisite certificate required under Section 139 of the Companies Act, 2013 to the effect that their re-appointment, if made, will be in conformity with the limits specified in the said section and the criteria stipulated under section 141 of the Companies Act 2013.

As per the provisions of the Companies Act, 2013, the Auditors Report forms part of Annual Report.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs. 919.26 Lacs. As on March 31, 2015, following two directors are holding shares of the Company:

Mr. Harshad Patel Mr. Dinesh Mehta

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure 'B'.

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

The information required to be disclosed is set out in Annexure 'C'.

DIRECTORS:

A. Changes in Directors and Key Managerial Personnel

Mr. Jayesh Sheth, Director of the Company resigned with effect from 01.12.2014. The Board of the Company comprise of three directors viz. Mr. Harshad Patel, Managing Director and two other Independent Directors.

B. Declaration by an Independent Director(s)

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

C. Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

MEETINGS OF THE BOARD OF DIRECTORS

During the year, in all seven Board Meetings were held i.e. on 14th April, 2014; 29th May, 2014; 13th August, 2014; 11th November, 2014; 19th December, 2014; 10th February, 2015 and 23rd March, 2015. The time gap between any two meetings was not more than 120 days.

The details of Directors and their attendance record at Board Meetings held during the year and at the last Annual General Meeting, number of other directorships and chairmanships/memberships of committees, and other Committees of the Company is given in Corporate Governance Report.

AUDIT COMMITTEE

The Company has a Qualified Audit Committee as per the provisions of the Companies Act, 2013 and Listing Agreement with Stock Exchange. The necessary details in this regard form part of Corporate Governance Report.

VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company formulated Whistle Blower Policy as per the provisions of Clause 49 of the Listing Agreement to raise any complaint, query and to deal with instance of fraud and mismanagement, if any. The details of the said policy are explained in the Corporate Governance Report and circulated to the employees internally.

NOMINATION & REMUNERATION COMMITTEE

The Company has a Nomination & Remuneration Committee as per the provisions of the Companies Act, 2013 and Listing Agreement with Stock Exchange. The necessary details in this regard form part of Corporate Governance Report.

LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGE- MENTS WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

Pursuant to Section 134 read with rule of the Companies (Accounts) Rules 2014, there are no transactions to be reported under section 188(1) of the Companies act, 2013. The related party policy as approved by the Board is available on the website of the Company.

The disclosure in Form AOC-2 as per the provisions of Section 188 of the Companies Act, 2013 and rules mad there under is not required since there are no material contracts or arrangements entered into by the Company as per the Policy of Materiality framed forming part of Related Party Transaction policy of the Company.

Related Party Transactions as required under Accounting Standards are reported under the notes to the financial statements.

PARTICULARS OF EMPLOYEES - MANAGERIAL REMUNERATION

The statement containing particulars of employees as required and the ratio of remuneration of Managing Director to the median employees' remuneration and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) and (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report as "Annexure D".

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Sudhanwa S. Kalamkar & Associates, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as "Annexure E".

EMPLOYEE STOCK OPTION PLAN

The Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999 and Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, Section 62(1) (b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are provided in Annexure 'F'.

RISK MANAGEMENT POLICY

The Company has developed a very comprehensive risk management policy under which all key risks and mitigation plans are compiled into a Risk Matrix. The same is reviewed quarterly by senior management and periodically also by the Risk Management Committee of the Board.

CORPORATE SOCIAL RESPONSIBILITY POLICY (CSR)

CSR Policy is not applicable to the Company.

STATEMENT ON SALIENT FEATURES OF FINANCIAL STATEMENT

Statement on salient features of Financial Statement in Form AOC-3 is not required since Entire Annual Report is being sent to all Shareholders in the manner specified under Rule 11 of the Companies (Accounts) Rules, 2014.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that—

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis; and

(e) The directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis on the operations of the Company is provided in a separate section and forms a part of the Annual Report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock exchanges, is provided in a separate section and forms part of the Annual Report.

CORPORATE GOVERNANCE CERTIFICATE

The Compliance certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement is annexed to the Corporate Governance Report forming part of Annual Report.

ACKNOWLEDGEMENTS

The Directors place on record their appreciation of the efficient and loyal services rendered by the Staff and workmen as also help and guidance received from Canara Bank.

On behalf of Board of Directors

Place : Mumbai Harshad B. Patel

Date : 29th May, 2015 Chairman &

Managing Director

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Mar 31, 2014

Dear Members,

Directors present herewith the Annual Report and Audited Accounts for F.Y. 2013-14.

FINANCIAL RESULTS

(Rs. In crores) Sr. Particulars Standalone Consolidated No. 2013-14 2012-13 2013-14 2012-13

(i) Gross Revenue 113.54 151.90 134.26 183.73

(ii) Net Revenue (excluding excise duty) 103.43 137.04 121.93 165.22

(iii) Profit before interest, depreciation and tax 3.00 17.39 3.72 19.55

(iv) Interest 6.91 9.08 8.22 10.83

(v) Depreciation 8.73 8.84 10.46 10.48

(vi) Tax (0.72) (0.59) (0.75) (0.55)

(vii) Profit/loss after Tax (11.92) 6.75 (14.21) (1.21)



DIVIDEND

In view of the losses for the year ended March 31, 2014, the Board of Directors of your Company is constrained to recommend any dividend for the year under review.

OPERATING RESULTS

The standalone gross turnover for the year at Rs.113.54 crores was lower by Rs.38.36 crores compared to Rs.151.90 crores in the previous year. The demand from our primary market slowed down considerably in the financial year under review. The second half year saw a negative growth in demand from the earth moving industry as well as automotive sector.

Earnings before Interest, Depreciation and Tax were lower at Rs.3.00 crores as compared to Rs.17.39 crores in the previous year.

FINANCE

During the year the Company raised Rs.40,00,000/- by issue of 200000 Equity Shares of Rs.10/- each at a premium of Rs.10/- per share under ESOP.

CURRENT YEAR

Sales in the first two months of the current year at Rs.15.22 crores are lower than Rs.20.12 crores achieved in the same period in the previous year. This year will be very challenging as well as our major customers are not expecting any growth. To improve profitability in current situation company is reducing fixed cost by consolidation of Capacity.

MARKETS

The Four Main verticals namely Construction Equipment, Automotive, Rail Transportation and Power (Transmission and Distribution) cumulatively contributed to Rs.61.41 crores compared to Rs.82.43 crores in the previous year.

Dampening sales to Automotive vertical has been a major contributor for drop in total net revenue for the year under review. Revenue from Automotive vertical during FY 2013-14 has gone down drastically to Rs.6.26 crores as against Rs.18.88 crores in the previous year.

Construction equipment vertical contributed Rs.39.48 crores compared to Rs.41.86 crores in FY 2012-13. Sales from this vertical as a percentage of net revenue increased from 30.55% in FY 2012-13 to 38.22% in FY 2013-14 making it the highest contributor to sales. This was achieved despite lower demand from exsiting customers. New Business could compensate partly for the drop in sales to the previous customers.

Sales from Power (Transmission and Distribution) vertical for the year under consideration amounted to Rs.11.76 crores compared to Rs.15.19 crores in the previous year.

Revenue from Rail Transportation vertical has gone down from Rs.6.50 croes in the previous year to Rs.3.91 crores during FY 2013-14 representing a decrease of 40%. Decline in business from this vertical has been due to delay in award as well as implementation of various metro projects.

Other sector is second major contributor of drop in total net revenue for the year under review. Revenue from Other Sector during FY 2013-14 has gone down to Rs.41.87 crores as against Rs.54.49 crores in the previous year. Decline in business from this vertical has been due to lower order from project based customer.

INSURANCE

All the properties of the Company have been adequately insured against fire, riot, earthquake and various other risks.

FIXED DEPOSITS

During the year under report, the Company has not accepted deposits from public.

DIRECTORS

Mr. Vandan Shah, Director of the Company resigned w.e.f. 10th March 2014. We would like to acknoweldge his contribution and guidance to the Company during his period as the Director of the Company.

Mr. Jayesh Sheth retires by rotation and being eligible offer himself for reappointment.

Mr. Harshad Patel, Managing Director of the Company is being re-appointed for further period of three years commencing from 01st April 2014.

Mr. Vasant Goray, Independent Director of the Company is being proposed to be appointed as Independent Director of the Company for the period of five years in terms of Section 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, at the ensuing Annual General Meeting of the Company.

Appropriate resolutions for the appointment/re- appointment of Director are being placed for your approval at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors hereby Report:

a. That in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure, if any.

b. That the directors have selected such Accounting Policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as at 31st March, 2014.

c. That the Directors have taken the proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. That the Directors have prepared the Accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock exchanges, are enclosed.

PARTICULARS OF EMPLOYEES

During the year under report, no employees have drawn remuneration in excess of the limits laid down under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2011.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

The information is set out in Annexure – A.

EMPLOYEES STOCK OPTION PLAN

The information required to be disclosed under SEBI (ESOS & ESPS) Guidelines is given in Annexure B to the Directors'' Report.

AUDITORS

M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors of the Company (Firm Registration No. 100282W) retire and offer themselves for re- appointment.

The Company has obtained the requisite certificate required under Section 139 of the Companies Act, 2013 to the effect that their re-appointment, if made, will be in conformity with the limits specified in the said section and the criteria stipulated under section 141 of the Companies Act 2013.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation of the sustained and dedicated efforts put in by all the employees collectively and concertedly as a Team. The Directors would also like to thank the shareholders, customers, suppliers, bankers and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

On behalf of Board of Directors

Place : Mumbai Harshad B. Patel Date : 29th May 2014 Chairman & Managing Director

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Mar 31, 2011

Dear Members,

Directors have great pleasure in presenting the Annual Report and Audited Accounts for FY. 2010-11

FINANCIAL RESULTS

(Rs. in crores)

Sr. Standalone Consolidated Particulars : No. 2010-11 2009-10 2010-11 2009-10

(i) Gross Revenue 155.09 121.27 191.52 137.77

(ii) Net Revenue (excluding excise duty) 145.61 112.99 178.05 127.83

(iii) Profit before interest, depreciation and Tax 21.50 14.92 26.05 17.34 (excluding other income)

(iv) Interest 8.01 9.10 9.85 10.24

(v) Depreciation 7.93 6.10 9.25 6.65

(vi) Tax 0.84 0.72 1.65 0.83

(vii) Profit after Tax 5.05 1.25 5.52 0.15

DIVIDEND

In view of the improved financial performance during the year under review, the Directors recommend a dividend of Rs. 1.25/- per Equity Share of Rs. 10 each.

OPERATING RESULTS

The standalone gross turnover for the year at Rs. 155.09 crores were in line with projections and registered an increase of 28% over the previous year. The off take from our primary markets was very slow in the first two quarters and only picked up significantly in the last quarter.

Earnings before interest, depreciation and tax (excluding extraordinary items and other income) climbed up by 44% to Rs. 21.50 crores compared to Rs. 14.92 crores in previous year. Improvement in margin and repayment of sizable term debt during the year resulted in higher Return on capital Employed (ROCE) of 8.65% as against 6.23% in the previous year. Our balance sheet has become stronger with gross Debt to Equity ratio coming down to 1.05 times compared to 1.26 times in the previous year. The debt Asset ratio during the year improved significantly to 38.04% from 41.57% in the previous year.

The overall results are satisfactory in view of the tough conditions in the first two quarters. If market conditions remain stable then we should be able to maintain the growth momentum. The Ahmedabad plant was established and has stabilized. We expect good growth from this plant.

EXPANSION

In view of the uncertain market conditions and prohibitive interest costs, the Company has deferred its plan to set up a machining shop for machining parts for the Power generation sector. This will be reviewed in September 2011 for further action.

The Company will be expanding its cutting capacity at various locations by adding new generation of Plasma cutting machines at various locations. This will complement our Laser cutting facilities and we will be able to offer the appropriate technology to the customers at appropriate price.

The Company does not have manufacturing facility in Eastern India and looking at the potential this region offers we are exploring the possibility of setting up a plant in eastern India.

FINANCE

During the year the Company allotted 91,800 Equity Shares of Rs. 10/- each at a premium of Rs. 10/- per share under ESOP to employees of the Company. The total amount received from the employees amounted to Rs. 18,36,000/-.

CURRENT YEAR

The current year has begun on an optimistic note and we expect to see a 15% growth in the first quarter. Some of our customers are expanding and this may result in additional business from the third quarter onwards.

MARKETS

The four main verticals namely Construction Equipment, Automotive, Rail Transportation and Power (Transmission and Distribution) cumulatively contributed 75% of the total revenue amounting to Rs. 109.48 crores.

Robust demand of commercial vehicles resulted in increased sales to automotive verticals to Rs. 37.30 crores or 25.62% of net sales compared to Rs. 24.48 crores or 21.66% in the previous year.

Revenue from Rail Transportation vertical has gone up from Rs. 11.37 crores in previous year to Rs. 21.80 crores representing an increase of 91.73%.

Construction equipment vertical contributed Rs. 33.50 crores as against Rs. 32.70 crores in the previous year. Sales from this vertical as a percentage of net revenue declined from 28.94% in the previous year to 23.01% in the current year though it remained flat in absolute terms.

Revenue from Power (transmission and distribution) vertical has been disappointing during the year as it recorded a negative growth of 9.92% from Rs. 18.74 crores in previous year to Rs. 16.88 crores during the current year.

Our Rail transportation business is expected to see a sharp drop in this year as further orders are expected only in the third quarter of this year. The shortfall from this sector should get covered from the Construction equipment sector which is expected to see robust demand. The delays in execution of infrastructure projects along with high interest rates will affect demand and is worrying.

INSURANCE

All the properties of the Company have been adequately insured against fire, riot, earthquake and various other risks.

FIXED DEPOSITS

During the year under report, the Company has not accepted deposits from public.

DIRECTORS

Mr. Jayesh K. Sheth retires by rotation and being eligible offer himself for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors hereby Report:

A) That in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure, if any.

B) That the directors have selected such Accounting Policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as at 31st March, 2011 and of Profit and Loss Account for the year ended 31st March, 2011.

C) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

D) That the Directors have prepared the Accounts on a going concern basis.

PARTICULARS OF EMPLOYEES

During the year under report, no employees have drawn remuneration in excess of the limits laid down under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2011.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

The information is set out in Annexure - A.

EMPLOYEES STOCK OPTION PLAN

During the year Company allotted 91,800 Equity Shares under the Stock Option Scheme. The information required to be disclosed under SEBI (ESOS & ESPS) Guidelines is given in Annexure B to the Directors' Report.

AUDITORS

M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors of the Company retire and offer themselves for re-appointment.

The Company has obtained the requisite certificate required under Section 224 of the Companies Act, 1956 to the effect that their re-appointment, if made, will be in conformity with the limits specified in the said section.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation of the sustained and dedicated efforts put in by all the employees collectively and concertedly as a Team.

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

On behalf of Board of Directors

Place : Mumbai Harshad B. Patel

Date : 30th May, 2011 Chairman

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Mar 31, 2010

Directors have great pleasure in presenting the Annual Report and Audited Accounts for F.Y.2009-10 FINANCIAL RESULTS:

Particulars 2010 2009

Total Income 12,127.41 12,737.78

Profit before Interest and 1,728.58 1,538.20

Depreciation & Tax

Interest 909.90 1,047.61

Depreciation 609.63 675.10

Tax 72.69 (25.73)

Profit after tax 136.36 (158.78)

DIVIDEND:

In order to conserve resources, your Directors have not recommended dividend for the year.

OPERATING RESULTS:

The first quarter of 2009-10 started on a very low note similar to the last two quarters of 2008-09. Thereafter Company had growth in the next three consecutive quarters. In the fourth quarter Company achieved an all time high turnover. This was despite poor offtake from some of our major customers in the Earthmoving and Power Industries.

In our previous years Directors Report we had anticipated to get back on track in the third quarter of 2009-10. This has come true. The Company returned to profitability in third quarter of 2009-10.

Our focus on improving productivity and addition of more value to the jobs resulted in improvement of our operating parameters. The EBIDT margin has marginally improved by 172 basis points to 15.20%. ROCE has marginally improved by 150 basis points to 6.23% but is still well below that of 9.67% achieved in 2008. Our Balance Sheet has improved with Debt Equity ratio coming down to 1.26 from 1.89 in the previous year.

With improvement in sales and reduction in debt the profitability ratios should significantly improve going forward.

EXPANSION:

Company will have to expand capacities at its Ahmedabad and Pune plants to take care of the increased requirements of customers. This will mainly involve installation of equipments to balance capacity. We expect to utilise our capacities fully, at most plants, only in2011-12 and hence capital expenditures will mainly be to de-bottleneck or to add to technical capabilities in welding and forming.

Wear Plate Division: The Company has decided to set a plant to manufacture "Wear Plates" at Savli, Gujarat. The plant will be commissioned in June 2010. Wear Plates have high abrasion resistance and are used in equipments where there is high wear and tear of equipment.

FINANCE:

During the year the Company allotted 47840 equity shares of Rs.10/- each at a premium of ?10/- per share under ESOP to employees of the Company. The total amount received from the employees amounted to Rs.9,56,800.

The Company raised Rs.2,09,00,000 by way of issue of 5,50,000 equity shares of Rs.10/- each at a premium of Rs.28 per share to the promoters and others on preferential basis.

CURRENT YEAR:

Current year has begun on an optimistic note. Sales during the first two months of the current year are Rs.22.46 crores as compared to ?16.35 crores in the same period in the previous year

MARKETS:

There has been a significant shift in the percentage of sales to different markets in 2009-10 as compared to 2008-09. The sale to Construction Equipment (CE) sector has gone down from 34% of total sales in 2008-09 to 24% of total sales in 2009-10.

As against this sale to Rail Transportation (RT) has gone up from 4% to 11%, sale to Power Generation and Distribution (PGD) from 13% to 18% and sale to Automotive from 7% to 23%. Ideally we would prefer sales to CE, RT, PGD and Automotive to each range between 20% to 25% of total sales.

Of the four major segments served only the Automotive Sector has bounced back strongly after the downturn. Business from PGD & CE is still very sluggish and far below peak levels seen in 2007-08.

INSURANCE:

All the properties of the Company have been adequately insured against fire, riot, earthquake, and various other risks.

FIXED DEPOSITS

During the year under report, the Company has not accepted deposits from public.

DIRECTORS

Mr.Vandan Shah retires by rotation and being eligible offer himself for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors hereby Report:

A) That in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure, if any.

B) That the directors have selected such Accounting Policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as at March 31, 2010 and of Profit and Loss Account for the year ended March 31, 2010.

C) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

D) That the Directors have prepared the Accounts on a going concern basis.

PARTICULARS OF EMPLOYEES:

The statement of particulars required pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2002, forms part of this Report and is set out in Annexure-A.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.

The information is set out in Annexure - B.

EMPLOYEES STOCK OPTION PLAN

During the year Company allotted 47840 Equity Shares under the Stock Option Scheme. The information required to be disclosed under SEBI (ESOS & ESPS) Guidelines is given in Annexure C to the Directors Report.

AUDITORS

M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors of the Company retire and offer themselves for re-appointment.

The Company has obtained the requisite certificate required under section 224 of the Companies Act, 1956 to the effect that their re-appointment, if made, will be in conformity with the limits specified in the said section.

ACKNOWLEDGENENT

Your Directors wish to place on record their sincere appreciation of the sustained and dedicated efforts put in by all the employees collectively and conceitedly as a Team.

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

Place : Mumbai On behalf of Board of Directors

Date : 21st June, 2010 Harshad Patel

Chairman