Directors Report of Best & Crompton Engineering Ltd.

Mar 31, 2013

Dear Members,

The Directors present the 101st Annual Report and the Audited Statement of Accounts of the Company for the Year ended March 31, 2013.

These statements are presented on the same basis as in previous year and not with reference to Companies Act, 2013 pursuant to the directive in circular No.8/2014 dated 4th April 2014 issued by the Ministry of Corporate Affairs, New Delhi.

The Highlights of the financial performance for the year ended under review are as below:-

1. Financial Highlights (Rs''Lakhs) Particulars Year ended Year ended March 31, 2013 March 31, 2012

Total Income 4927 6578

Expenditure 6508 6749

Gross Profit/(Loss) (1581) (171)

Taxation (111) 185

Profit/(Loss) for the year (1470) (356)

As your Company has accumulated losses, your Directors are unable to recommend any dividend for the year ended March 31, 2013.

Finance :

IL & FS Financial Services Limited, a Lender, (your Company had availed a term loan of Rs.50,70,00,000/-) had filed a Winding up Petition against your Company, for default in payment of dues, before the Hon''ble High Court of Madras, which had passed an order on 31.10.2013 against your Company appointing Provisional Liquidator. The Hon''ble Court, after considering the Affidavit filed by your Company, granted, on 21.11.2013, a Stay of its order dated 31.10.2013. Your Company has proposed a Statement of Repaying Schedule and is making payments accordingly to IL & FS Financial Services Limited.

2. Performance of various Divisions of the company

2.1 Pump Division, Chennai

The order inflow for pumps in the financial year 2012-13 continued to be robust and the order booking in the industrial segment grew by a healthy 30% when compared to the financial year 2011-12. The revenue for the year 2012-13 was lower primarily because large infrastructure projects both in the government and private sector were shelved/deferred due to various reasons. The EBITDA margins continued to be good and was at a healthy 17 % for the financial year.

Your company continues to be a preferred supplier of pumps to the Indian Navy and expects to benefit from the Navy''s growth plan and its emphasis on greater indigenisation in the coming years. Your company made fresh forays into the steel sector by bagging orders from different Engineering Procurment Construction (EPC) contractors for various steel plants. The order book position continues to be healthy and the division is expected to perform well in the current year.

2.2 Chennai Foundry

The performance of the foundry division during this period has been affected severely by the steep market drop and the resultant lower sales and production. The foundry continued to face numerous challenges due to negative growth of the OEM market, uncertain power scenario, and sharp increase in raw material and power prices, which were not adequately compensated by the customer. The division continued to produce the Non Ferrous castings needed to meet the in-house requirement of the pump division. With the improvement in power supply scenario and the bounce back of the automotive sector, the unit is expected to increase production levels and generate increased revenue in the coming years.

2.3 Machinery Manufacturing Division

The electrical machine factory has bagged repeat orders from the railways for making 4.5 Kw and 25 Kw alternators and has a healthy order book. The division achieved sales revenue of Rs.2.09 Cr and it is expected that the division would make a higher turnover in the coming year.

Plug and Socket Unit achieved a sales turnover of Rs.1.5 Crore. As the Power Sector unit is on the growth path, the performance of this unit is expected to improve substantially over the coming years.

2.4 Fabrication Division

The division has met the in-house fabrication requirements of the pump division and the machinery manufacturing division. It is expected that the division will be able to achieve optimum levels of production in the next few years.

2.5 Bangalore Pump Factory

The division achieved net sales of Rs 3.47 Crore and a PBT of Rs.23 Lakhs in this financial year. To cater to the growing needs of the transformer manufacturers, the division has put greater emphasis on manufacture of transformer oil pumps and expects to grow its turnover and profitability in the coming years.

3. Fixed Deposits

No Fixed Deposits have been accepted by the Company. There was no outstanding deposit at the close of the financial year.

4. Accounts of Subsidiaries

As per the Circular issued by the Ministry of Corporate Affairs, Government of India, exemption has been granted to all Companies from attaching the Accounts of the Subsidiary Companies, however, a statement showing the particulars about the performance of the Subsidiary Companies forms part of this Annual Report. Your Company undertakes that the Annual Accounts of the Subsidiary Companies and related information will be made available to the Members of the Company, if such request is made by them. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Registered Office of the Company.

5. Performance of Subsidiary Companies

5.1 Best & Crompton Apparels Limited

This Subsidiary, due to lack of firm orders and working capital, had to suspend operations from April 1, 2012. However, in the recent trend, the market has shown the signs of recovery and there is potential demand for such products. As such, your company is considering the revival of the existing business and is under discussion with strategic investors for augmenting working capital requirements and restart operations of the unit, besides infusion of funds to the satisfaction of Debts Recovery Tribunal, Chennai, whereat the recovery proceedings initiated by the Lenders against the Company are pending.

The Company at this stage, is examining the various options, viz: revival of the operations of the subsidiary company by identifying a strategic partner or lease out the unit to an International Brand apparel manufacturer.

5.2 B & C Machinery Limited

The subsidiary is at the final stage of completion of the project. The delay caused was due to several factors. As a means of revival, the company has submitted a comprehensive proposal to the bankers and to commence commercial production within a time frame despite reference to Debts Recovery Tribunal, Chennai, whereat the recovery proceedings initiated by the Lenders against the Company are pending.

The Company, at this stage, is examining the various options, viz: possible disinvestment of equity shares held by the company in the said subsidiary company or possible revival by the operations of the subsidiary company by identifying a suitable strategic investor.

5.3 Crombest Precast Buildings Limited

In terms of market analysis, the potential demand for the existing products is on the increase and thus your company is contemplating the revival of the existing business.The company is in discussions with the potential investors for augmenting working capital requirements of the company. Besides, a comprehensive proposal is being made to the bankers for reschedulement/ restructuring/settlement of their dues to the satisfaction of Debts Recovery Tribunal, Chennai whereat the recovery proceedings initiated by the Lenders against the Company are pending.

5.4 B & C Tech. Services Limited

Since the market conditions are not conducive, it would be wise not to infuse funds into this project at this juncture. A creditor has filed a petition for winding up of the company and the High Court has appointed, under it''s Order dated 08.09.2014, the Official Liquidator as Provisional Liquidator to take charge of the assets of the Company and the Company is under Liquidation proceedings.

6. Delisting

The Madras Stock Exchange has since dropped the listing and trading of shares including the equity shares of the Company. While the shares are listed in the Bombay Stock Exchange Limited it has suspended the listing and trading and dealing of the Company''s shares due to non- fulfilment of the listing requirements. Corrective steps are being initiated.

7. Directors

Mr. M. Sinivasan retires by rotation and being eligible offers himself for re-appointment.

Mr. S.V.Venkatesan retires at this Annual General Meeting. It is proposed to appoint him as an Independent Director of the Company, not liable to retire by rotation, for a term of five consecutive years upto 31st March, 2019.

Mr. K.Prakash holds office upto this Annual General Meeting. It is proposed to appoint him as an Independent Director of the Company, not liable to retire by rotation, for a term of five consecutive years upto 31st March, 2019.

Mr. Ravindranath Gupta holds office upto this Annual General Meeting. It is proposed to appoint him as an Independent Director of the Company, not liable to retire by rotation, for a term of five consecutive years upto 31st March, 2019.

Mr. A. Annamalai, Director, resigned form the Board effective from 19th January, 2013, Mr.N.Srinivasan resigned on 12th June 2014 and Mr.S.Sathiyamurthy resigned on 9th October 2014. The Board placed on record the valuable services rendered by them during their tenure as Directors of the Company.

8. Directors'' Responsibility Statement

Pursuant to the requirements under Section 217 (2 AA) of the Companies Act 1956 with respect to the Directors'' Responsibility Statement, it is hereby confirmed- (i) that in preparation of the Accounts for the financial year from April 1, 2012 to March 31, 2013, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial period and of the Profit or Loss of the Company for the financial period under review;

(iii) 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 safe-guarding the assets of the Company and for preventing fraud and other irregularities; and

(iv) that the Directors prepared the accounts for the financial year from April 1, 2012 to March 31, 2013 on a ''going concern'' basis for reasons stated in note no.39 on the accounts of the Company.

9. Audit Committee

The Audit Committee comprises of the following Directors:- Mr. S. V. Venkatesan - Chairman Mr. M. Sinivasan - Member Mr. Ravindranath Gupta - Member Mr. N.Srinivasan - Permanent Invitee

10. Corporate Governance

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as stipulated by the Listing Agreement with the Stock Exchanges, form part of the Annual Report for the financial year ended March 31, 2013. The Management Discussion and Analysis Report is also enclosed.

11. Auditors

The Auditors, CNGSN & Associates LLP, Chartered Accountants, Chennai, retire at the ensuing Annual General Meeting and it is proposed to appoint the reconstituted firm viz CNGSN and Associates LLP, Chartered Accountants, Chennai, as auditors for the ensuing financial year 2013-14.

With reference to the observations in the Auditors'' Report, the relevant financial notes on investment in subsidiaries, loans and advances including provision for doubtful debts and advances are self explanatory.

Further, the Companies'' ability to carry on its business as a ''going concern'' has also been amplified in the appropriate financial note.

With reference to the observations in the Auditors'' Report of the Subsidiaries, the Board of the respective subsidiaries have adequately respondend to the observations in their report.

12. Personnel

Particulars of Employees

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder would be made available to the Members on request.

The particulars required pursuant to Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975 as amended forms part of this Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act, the Directors'' Report (excluding the Statement of Particulars of Employees) is being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said Statement may write to the Registered Office of the Company.

13. Conservation of Energy, Research & Development, Technology Absorption, Foreign Exchange Earnings and Outgo

There is no material development to report relating to conservation of Energy, Research & Development and Technology Absorption, as required under Section 217 (1) (e) of the Companies Act, 1956. Information pertaining to Foreign Exchange Earnings and Outgo are as contained in Item Nos. 32 and 33 of the Notes on Accounts respectively.

14. Acknowledgment

The Board places on record its appreciation to the Bankers to the Company and its Subsidiaries for their continued support. The Board also places on record its appreciation for the guidance and support extended by host of consultants and advisors. The Board acknowledges gratefully the continuing relationship with customers and business partners. Your Directors express their appreciation of the co-operation and assistance extended by the Central Government and the State Governments and the various Governmental Agencies. The forbearance and support of shareholders and the co-operation of employees are gratefully acknowledged.

For and on behalf of the Board of Directors

Chennai M. Sinivasan December 15, 2014 Chairman

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Mar 31, 2010

The Directors present the 98th Annual Report and the Audited Statement of Accounts of the Company for the year ended March 31, 2010.

The highlights of the financial performance for the year under review are as below:

1. Financial Highlights

(Rs000)

Particulars Year ended Year ended March 31, 2010 March 31, 2009

Total Income 641.274 1,735,702

Expenditure 608,460 1,303,270

Gross Profit 32,8141 432,432

Taxation 20,526 187,799

Profit after Tax 12,288 244,633

Revaluation Reserve no longer required - 314,776

Profit for the year 12,288 559,409

As the profit for the year could not absorb the accumulated losses of the earlier years, your Directors are unable to recommend any dividend for the year ended March 31, 2010.

As in the previous year, abridged standalone and consolidated annual accounts for the year ended March 31, 2010 are being circulated in accordance with the suggestion of SEBI. Detailed annual accounts would be made available on request and also at the venue of the Annual General Meeting.

2. Performance of various Divisions of the Company

2.1 Pump Division - Chennai

Pump Division has achieved a growth of over 15% in net sales over the last year to reach Rs.38.93 Crore. The Company continues to be a preferred supplier of pumps to the Indian Navy. The Company was able to secure prestigious orders from the Indian Navy for supply of pumps for their submarine and Aircraft Carriers. The Company continues to serve municipal corporations, water and sewerage boards of India and has made significant in-roads in supply of pumps to waste water segment. The order book position continues to be healthy and the division is expected to perform well in the current year. The Pump Division also received ISO 9001.- 2008 certification from Lloyds Registrar of Quality Assurance.

2.2 Pump Factory - Bangalore

The Unit has achieved a growth of over 10% in net sales over the last year to reach Rs.3.65 Crore. The division has commenced manufacture of lKw, 3Kw and 5Kw Monoblock pumps, which is expected to increase the turnover and profitability of the Company.

2.3 Chennai Foundry

The Foundry operations was adversely affected by the power cuts imposed by the Tamil Nadu Electricity Board and also because of the slump in the automotive industry, which is a major sector the foundry is catering to. The diversification strategy of making Non Ferrous casting in the foundry has paid off and the Company was successful in producing pump casting needed to meet the in-house requirement of the pump division. It is expected to secure orders for non ferrous casting from the outside industry. With the improvement in power supply scenario and the bounce back of the automotive sector, the unit is expected to increase production levels and generate increased revenue.

2.4 Machinery Manufacturing Division

The electrical machine factory has secured repeat orders from the railways for making 4.5 Kw and 25 Kw alternators. The unit also manufactured subassemblies like spindle motors and servo motors needed for the gantry machines. The factory has received the ISO 9001- 2008 certification and this will ensure continuous business with the Railways.

Plug and Socket Unit performed well during the year and achieved a turnover of Rs.1.99 Crore. As the Power Sector unit is on the growth path, the performance of this unit is expected to improve.

2.5 Fabrication Division

The division has met the in-house fabrication requirements of the Pump division. It has also undertaken development jobs like Prestressed Cement Concrete Bed and sub-assembfy of Gantry machine to meet the requirements of New Business Verticals. It is expected that the division will be able to achieve optimum levels of production.

3. Fixed Deposits

No Fixed Deposits have been accepted by the Company. There was no outstanding deposit at the close of the financial year.

4. Accounts of Subsidiary Companies

Your Company has applied for exemption under sub section 8 of Section 212 of the Companies Act 1956 from attaching the accounts of the Subsidiary Companies; however, a statement showing the particulars about the performance of the Subsidiary Companies forms part of this Annual Report.

Your Company undertakes that the Annual Accounts of the Subsidiary Companies and related detailed information will be made available to the investors of the Company and the Subsidiaries, if such request is made by them at any point of time with prior notice. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Registered Office of the Company.

5. Subsidiary Companies

Your Directors are pleased to inform that the Honble High Court of Madras has, by its Order dated April 13, 2010, sanctioned the Scheme of Merger of the seven Wholly Owned Subsidiaries, namely, Best & Crompton Infratech Limited, Best & Crompton Infratech (Ambattur) Limited, Best Crompton EU Energy Limited, Best Land Realty Limited, Best & Crompton Electric Limited, Nellai Steel India Limited and Best & Crompton Textiles & Apparels Limited with your Company. Consequent upon the Merger in terms of the orders of the Honble High Court these Wholly Owned Subsidiaries stood dissolved without being wound up. The Effective Date of the Merger is April 1, 2008. The accounts of those erstwhile subsidiary compannies have been merged with the accounts of your Company with effect from 1.4.2008.

5.1 Best & Crompton Engineering Projects Limited

The Company had decided to exit out of the contracting business as a whole, in view of the continued down trend in the performance of the Wholly Owned Subsidiary, Best & Crompton Engineering Projects Limited and accordingly has disinvested its entire Equity Shareholding in the said Wholly Owned Subsidiary. The Disinvestment was effected in the year now current.

5.2 Best & Crompton Apparels Limited

This Subsidiary has established a strong net work of reputed customers; however, the cascading effect of global melt down made it difficult to capitalise on this; the volatility in yarn prices and forex market especially in US dollar and Euro added to the woes of this Subsidiary; with the markets showing signs of recovery, it is expected that the performance would improve in the current year.

5.3 B&C Machinery Limited

The Civil and Electrical works are in progress. Imported machines and Radial Drill Machines along with other machineries are in the process of being installed.

5.4 Bestai Precast Buildings Limited

The Company is in the process of trial run of its products with commercial production slated in the third quarter of 2010.

5.5 Best & Crompton Green Tech Limited

The Lines of business and manufacturing are being reviewed and focus is on Energy Efficent Lighting and display products, which have a growing market. The new line of activity will be in addition to the contract manufacturing services. To reflect the new line of activity, the subsidiarys name has been changed from Best & Crompton Global Electronic Solutions Limited to Best & Crompton Green Tech Limited with effect from March 25, 2010.

5.6 B&C Foundry Limited

The Subsidiarys name has been changed from B&C Forgings & Pumps Limited to B & C Foundry Limited with effect from January 25, 2010, to reflect the proposed line of business.

5.7 B&C Tech. Services Limited

During the year under review, this subsidiary has, despite financial constraints and high attrition level of manpower, been able to achieve a modest turn over of Rs.90 Lakhs from Engineering and Training services.

Various options are being explored to revive the Company to enable it to capitalize on the growing business opportunities.

6. Directors

Mr. N. Srinivasan retires by rotation and being eligible offers himself for re-appointment.

7. Directors Responsibility Statement

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed :-

i) that in preparation of the Accounts for the financial year from April 1, 2009 to March 31, 2010, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial period and of the Profit or Loss of the Company for the financial period under review;

iii) 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 safe-guarding the assets of the Company and for preventing fraud and other irregularities;

and

iv) that the Directors prepared the accounts for the financial year from April 1, 2009 to March 31, 2010 on a going concern basis.

8. Audit Committee

Pursuant to the requirements of Section 292 A of the Companies Act, 1956 and the Listing Agreement entered into with the Stock Exchanges, the Committee was reconstituted during the year and comprised of the following Directors:-

Mr. S. V. Venkatesan - Chairman

Mr. A. Annamalai - Member

Mr. G. S. Mamik - Member upto 17.11.2009

Mr. T.L. Guru Vijendran - Member upto 17.11.2009

9. Corporate Governance

A separate section on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance, as stipulated by the Listing Agreement with the Stock Exchanges, form part of the Annual Report for the financial year ended March 31, 2010. The Management Discussion and Analysis Report is also enclosed.

10. Auditors

The Auditors, M/s. CNGSN & Associates, Chartered Accountants, Chennai, retire and are eligible for re-appointment for the current year.

With reference to the observations in the Audit Report on overdue advances, the relevant financial note no. 7 on the accounts is self explanatory.

11. Personnel

Particulars of Employees

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder is provided in the Annexure forming part of the Report.

12. Conservation of Energy, Research & Development, Technology Absorption, Foreign Exchange" Earnings and outgo

There is no material development to report relating to conservation of Energy, Research & Development and Technology Absorption, as required under Section 217 (1) (e) of the Companies Act, 1956. Information pertaining to Foreign Exchange Earnings and Outgo are as contained in Item No.14 and 13 of Schedule 14 - Notes on Accounts respectively.

13. Acknowledgment

The Board places on record its appreciation to the Bankers to the Company and its Subsidiaries for their continued support. The Board also places on record its appreciation for the guidance and support extended by host of consultants and advisors. The Board acknowledges gratefully the continuing relationship with customers and business partners. Your Directors express their appreciation of the co-operation and assistance extended by the Central Government and the State Governments and the various Governmental Agencies. The forbearance and support of shareholders and the co-operation of employees are gratefully acknowledged.

For and on behalf of the Board of Directors

Chennai S.V. VENKATESAN

November 13, 2010 Chairman