Directors Report of Vybra Automet Ltd.

Mar 31, 2014

Dear Members,

The Directors are pleased to present the 30th Annual Report of the Company and the Audited Financial Statements for the year ended 31st March, 2014 and the Auditors'' Report thereon.

Financial Performance:

Sl. FOR THE YEAR ENDED (Rs.in Lacs) No. PARTICULARS 2013-14 2012-13

1. Income from operations 936.76 7133.47

2. Total Expenditure 2861.05 6473.38

3. Gross Profit before Int., Dep.andTax (1924.29) 660.09

4. Interest & Financial Charges 183.96 1071.88

5. Depreciation 358.13 350.77

6. Operational Profit (2466.38) (762.56)

7. Prior Period Expenses

8. Extraordinary Income - 1128.22

9. Profit before Tax (2466.38) 365.65

10. Deferred Tax / Income Tax / Fri. Ben.Tax - (125.89)

11. Net Profit after Tax (2466.38) 239.75

Company Performance:

During the year ended 31st March, 2014 the annual income of the Company was Rs.9.37 crores, as compared to Rs.71.19 crores in the previous year, representing a decrease of 86.91% which was due to the non performance of the company fromJuly2013to31stMarch,2014. It resulted in a loss of Rs.24.66crores,

Status ofthe company:

In the year 2013-14 the company has suffered with severe decrease in demand in the automotive sector and other market upheavals. Due to unprecedented slow down in the industry, high cost interest rates have worsened the over-all cost structure ofthe company there by reducing its margins, paucity of working capital lead to in-operative condition which resulted default with the secured lenders and subsequently went through securitization Act initiated by M/s. Edelweiss Asset Reconstruction Company (EARC). In nutshell the company has suffered a great deal due to unavoidable circumstances,the situation has further worsened due to on-going recession the end of which is still not in sight. In view of the above problems the projected earnings ofthe company has become inadequate to service the debt obligation at existing terms and conditions. Hence, it is the need ofthe company to re-structure the existing structure of borrowings which is under progress.

But the company has got an overwhelming support from all customers, the demand for your company''s products continuous to be encouraging as vendor codes are still alive and management is putting it''s best of efforts to revive the company''s out lookfrom the existing conditions.

Outlook:

There is recession in the overall Indian Economy and more so in the Automobile Sector. Auto majors like M/s.Maruti and M/s. Tata Motors Ltd.,haveincurred losses due to competition with MNCs like Hyundai Toyota,Honda VolksWagon and Nissan Etc. The Auto mobile sector under going a transformation and trying to compete globally by reducing the overall cost of the production which in turn has impact on our industry. On the other hand the input cost in the Indian Industry is gradually increasing due to increase in cost of steel, fuel, transport and salaries. In the situation the company would take a cautious approach and concentrate on managing the risk and containing the cost.

DIVIDEND:

With a view to the present economic situation,tight liquidity situation and Company''s current business plans,the Directors feel it prudent not to recommend any dividend on Equity Shares

TAXATION:

Income tax is not applicable for this year.

BOARD OF DIRECTORS

During the year there is no change in the Board of Directors of the Company and the following are the Board of Directors of the Company.

1. Mr. Vilas Vitthal Valunj - Chairman & Managing Director

2. Mr.Abhay Kailas Patil - Whole time Director

3. Mr.Vikram Manubhai Desai - Director

4. Mr.SuhasUmakantMate - Director

5. Mr.Prashant Kunjappa Nambiar - Independent Director

6. Mr. Santosh Bansilal Pandit - Independent Director

7. Mr. Jayaram Ramanandham - Independent Director (Nominee APIDC)

In accordance with the provisions of Section 255 of the Companies Act, 1956 read with Articles of Association of the Company Mr. Prashant Kunjappa Nambiar and Mr.Santosh Bansilal Pandit Directors are liable to retire by rotation at the ensuing annual general meeting and being eligible,offer themselves for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act 1956, with respect to the Directors Responsibility statement,it is hereby confirmed that:

(i) In the preparations of the Annual Accounts for the financial year ended 31st March, 2014 the applicable accounting standards have been followed along with proper explanations relating to material departures.

(ii) 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 ofthe financial year.

(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 safe guarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance and adhere to the Corporate governance requirements set out by SEBI as required under Clause 49 of the Listing Agreements with the Stock Exchanges,a Report on Corporate Governance with Auditors'' Certificate on compliance with conditions of Corporate Governance and a Management Discussion&Analysis Report forms part of this Annual Report and is annexed hereto.

CODE OF CONDUCT

The Board has laid down a code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the Company''s website. Board Members and Senior Management personnel have affirmed compliance with the code for the financial year 2013-14. A separate declaration to this effect is made out in Corporate Governance Report.

AUDITORS AND THEIR REPORT

The Statutory auditors of the Company M/s.Jawahar & Associates,Chartered Accountants,Hyderabad,retire at the ensuing Annual General Meeting being offer themselves for re-appointment as Statutory Auditor for the financial year 2014-15. A certificate has also been furnished to the effect that their proposed re-appointment, if made, would be within the limit prescribed under section 224(1B) of the Companies Act,2013,and that they are not disqualified for such re-appointment withinthemeaningofsection226 of the Companies Act,2013.

With regard to the comments suggested by the Auditors'' of the Company regarding Debtors/Creditors confirmations are still pending and management is making an effort in obtaining the same. With regard to identification of slow moving/non moving items the company will crystallize the liability to bring the true and fair view of the financials of the company. With regard to AS-15, provision for retirement benefits to employees, due to paucity of funds the company could not invest in gratuity funds and the same will be done after the financial performance is improved. The stock of dies were taken at actual cost of valuation after due technical verification bythe management.

FIXED DEPOSITS:

The Company has not invited /accepted any fixed deposits from the public and consequently no deposits has matured / become due for re-payment as on 31st March, 2014.

PERSONNEL AND PARTICULAR OF EMPLOYEES:

The relations with Employees continued to be cordial throughout the year.The Board appreciates the willful co-operation and team spirits in the Management Cadre and other employees of the Company. In terms of provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

The Industrial Relation has been fairly cordial during the year.

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

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the provisions of Section 217 (1) (e) of the Companies Act, 1956 in Form''A'' and forms part of this report. The additional information required under Rules 1989 Form''B'' is enclosed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India,is presented in a separate section forming part of the Annual report.

BUSINESS PERFORMANCE

During the year ended 31st March, 2014 the annual income of the Company was Rs.9.37 crores,as compared to Rs.71.19 crores in the previous year, representing a decrease of 86.91% which was due to the non performance of the company from July,2013 to 31-03-2014. It resulted in a Loss of Rs.24.66 Crores,after allocations made under Depreciation,Interest Charges and other provisions.

PENDING LITIGATION MATTERS

Following are the litigations pending against the Company for the various issues till the date of this notice and further the name ofthe opposite party along with the amount involved in respective case is mentioned below:

Sl.No Name of the Opposite party Amountinvolved(Rs.inLakhs)

1. Sales Tax Department 25.75

TRADING AND DEMAT FACILITIES FOR SHARES

The shares ofthe Company are listed with and traded in dematerialized form at Bombay Stock Exchange.The listing fee is paid to the exchange for the year 2013-14.The ISIN No.of the company isINE251F01010. Stock Code is 520003.

DECLARATION

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956 and has not defaulted in repayment of deposits, payment of dividend, redemption of debentures and preference shares. Accordingly,the company has not committed any ofthe defaults specified under Section 274 (1) (g) ofthe Companies Act, 1956(as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of valuable co-operation extended to the Company by its bankers and various authorities of State and Central Government Departments, customers, Vendors, strategic investors and members. Your Directors also takes this opportunity to place on record, its appreciation ofthe contributions made by the employees at all levels and last but not least,of the continued confidence reposed by you in the Management.

Date : 14th August, 2014 For and on behalf of the Board

Place : Hyderabad. Sd/- (VILAS VVALUNJ) CHAIRMAN AND MANAGING DIRECTOR

---

Mar 31, 2013

To The Members,

The Directors are pleased to present the 29th Annual Report of the Company and the Audited Financial Statements for the year ended 31 st March,2013 and the Auditors''Report thereon.

Financial Performance:

SI. FOR THE YEAR ENDED (RsinLacs)

No. PARTICULARS 2012-13 2011-12

1. Income from operations 7133.47 5743.02

2. Total Expenditure 6874.50 5057.29

3. Gross Profit before I nt., Dep. and Tax 258.97 685.73

4. Interest & Financial Charges 1071.88 347.88

5. Depreciation 350.77 322.02

6. Operational Profit (762.56) 15.83

7. Prior Period Expenses

8. Extraordinary Income 1128.22 127.75

9. Profit before Tax 365.65 143.58

10. Deferred Tax/Income Tax/Fri. Ben.Tax (125.89) 47.12

11. Net Profit after Tax 239.75 190.70



At the outset, we wish to thank you for your support our canvas has expanded, as we are entering in to new component development widening the portfolio of the existing business.

Business Model:

Our business is designed to ride the different business cycles to achieve consistent growth and returns. We ride on three levels of growth- supply of raw forgings, Machined components and Assemblies. The low correlation between their cyclically insulates us from troughs while ensuring that we grasp growth opportunities as they emerge.

Management Team:

We have a mix of senior management team and a potent blend of youth. We have been successful in attracting, retaining and nurtu ring this talent mix atall levels.

Quality product:

Over the years, we have maintained quality products despite of new entrants.Our strong management frame work, proven appraisal skills and pro active management of delinquencies have helped us to select and maintain a good value added product of business.

Company Performance:

During the year ended 31 st March, 2013 the annual income of the Company was Rs.71.19 crores, as compared to Rs.57.30 crores in the previous year, representing a increase of 24.24% which was due to the general trend of growth prevailed in all sectors of the industry. It resulted in a Profit of Rs.2.39 crores, after allocations made under Depreciation, Interest Charges and other provisions.The Production and Sales Turnover were higherthan the previousyear.

The Company has registered strong increase by leveraging its strong existing customer relations and aggressively penetrating new marketsjn sales from the automotive vertical across domestic.

Outlook:

The current macroeconomic environment continues to be challenging.Global economies, particularly Europe,face severe stress. While inflation in India has stagnant, the overall investment climate continues to be subdued. In this situation, the company would take a cautious approach and concentrate on managing the risks and containing costs.

Dividend:

With a view to the present economic situation,tight liquidity situation and Company''s current business plans,the Directors feel it prudent not to recommend any dividend on Equity Shares

Taxation:

Income tax is not applicable for this year.

Board of Directors

Thefollowing are the Board of Directors of the Company.

1. Mr. Vilas Vitthal Valunj - Managing Director

2. Mr. Abhay Kailas Patil - Whole time Director

3. Mr. Vikram Manubhai Desai - Director

4. Mr.Dhairyasheel Bhalchandra Mohite - Independent Director

5. Mr. Suhasl lmakant Mate - Director

6. Mr. Prashant Kunjappa Nambiar - Independent Director

7. Mr.Santosh Bansilal Pandit - Independent Director

8. Mr. Jayaram Ramanandham - Independent Director

9. Mr.Vijay Kumar Sharma - Independent Director

In accordance with the provisions of Section 255 of the Companies Act, 1956 read with Articles of Association of the Company Mr.AbhayKPatil,Whole time Director and Mr.VikramMDesai,Director are liable to retire by rotation atthe ensuing annual general meeting and being eligible,offerthemselves for re-appointment.

Mr.Vijay Kumar Sharma, Director has been resigned from the office of Director of the Company w.e.f. 29th May, 2013.

Mr.DhairyasheelB.Mohite,Director has been resigned from the office of Director of the Company w.e.f.14th August,2013

DIRECTORS''RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act 1956, with respect to the Directors Responsibility statement, it is hereby confirmed that:

(i) In the preparations of the Annual Accounts for the financial year ended 31 st March, 2013 the applicable accounting standards have been followed along with proper explanations relating to material departures.

(ii) The Directors have selected such accounting policies and applied them consistently and made judgements 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 ofthefinancial year and of the profit ofthecompanyforthe year under review;

(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 safe guarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) That the Directors have prepared theannual accounts on a going concern basis.

CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance and adhere to the Corporate governance requirements set out by SEBI as required under Clause 49 of the Listing Agreements with the Stock Exchanges,a Report on Corporate Governance with Auditors'' Certificate on compliance with conditions of Corporate Governance and a Management Discussion & Analysis Report forms part of this Annual Report and is annexed hereto.

CODEOFCONDUCT

The Board has laid down a code of Conduct for all Board Members and Senior Management of the Company.The Code of Conduct has been posted on the Company''s website. Board Members and Senior Management personnel have affirmed compliance with the code for the financial year 2012-13. A separate declaration to this effect is made out in Corporate Governance Report.

AUDITORS AND THEIR REPORT

The Statutory auditors of the Company M/s.Jawahar & Associates, Chartered Accountants, Hyderabad, retire atthe ensuing Annual General Meeting being offer themselves for re-appointment as Statutory Auditorforthe financial year 2013-14.

A certificate has also been furnished to the effect that their proposed re-appointment, if made, would be within the limit prescribed under section 224(1 B) of the Companies Act, 1956, and that they are not disqualified for such re-appointment within the meaning of section 226 of the Companies Act, 1956.

With regard to the comments suggested by the Auditors of the Company, regarding Debtors / Creditors confirmations are pertaining to erstwhile management are still pending and management is making an effort in obtaining the same. With regards to identification of slow moving / non moving items the Company will crystalize the liability in the coming financial year. With regard to AS-15, provision for retirement benefits to employees, due to paucity of funds the company could not invest in gratuity funds and the same will be done after the financial performance is improved. The stock of dies are pertained to erstwhile management and the management is in the process of finding of out dated dies which are not in use and accordingly will arrive theexact status during thefinancial year 2013-14

COST AUDITOR:

Pursuant to Section 233B of the Companies Act 1956, the Central Government has prescribed Cost Audit for the Company and the Board decides to follow the rotational policy in appointing cost auditor, accordingly the Company has appointed M/s.M P R& Associates,Cost Accountants fortheyear2013-14.

FIXED DEPOSITS:

The Company has not invited /accepted any fixed deposits from the public and consequently no deposits has matured / become due for re-payment as on 31 st March,2013.

PERSONNEL AND PARTICULAROF EMPLOYEES:

The relations with Employees continued to be cordial throughout the year.The Board appreciates the willful co-operation and team spirits in the Management Cadre and other employees of the Company.

In terms of provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules, 1975 (as amended),there are no employees governed by the said provisions.

HUMAN RESOURCE MANAGEMENT:

With the size of expansion going in the Company, human resources assume greater importance and have a significant place in the Organizational Structure. The company has been able to create a favorable work environment that encourages innovation and meritocracy.The Company has put in place a scalable recruitment and human resource management.The efforts of the company in the area of employees management and Human Resource (HR) practices have been proved effective in Human Resource Management. Emphasis is given to overall development of the personality of individual employees.Welfare schemes for employees and their families are runin the factories.

QUALITY

High quality standards are maintained in all areas and review of the same is also made constantly in view of the rapid

changes that are taking place in the global markets.

Conservation of Energy,Technology absorption and Foreign Exchange Earnings and Outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the provisions of Section 217(1) (e) of the Companies Act, 1956 in Form''A''and forms part of this report.The additional information required under Rules 1989 Form''B''is enclosed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in lndia,is presented in a separate section forming part of the Annual report.

PENDING LITIGATION MATTERS

Following are the litigations pending against the Company for the various issues till the date of this notice and further the name of the opposite party along with the amount involved in respective case is mentioned below:

SI. No Name of the Opposite party Amount involved (Rs.in Lakhs)

1. Sales Tax Department Rs.25.75

TRADING AND DEMAT FACILITIES FOR SHARES

The shares of the Company are listed with and traded in dematerialized form at Bombay Stock Exchange.The listing fee is paid to the exchange for the year 2012-13.The lSIN No.of the company is INE 251F01010.Stock Code is 520003.

DECLARATION

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956 and has not defaulted in repayment of deposits, payment of dividend, redemption of debentures and preference shares.

Accordingly,the company has not committed any of the defaults specified under Section 274 (1) (g) of the Companies Act, 1956(as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

ACKNOWLEDGMENTS:

Your Directors wish to place on record their appreciation of valuable co-operation extended to the Company by its bankers and various authorities of State and Central Government Departments, customers, Vendors, strategic investors and members. Your Directors also takes this opportunity to place on record, its appreciation of the contributions made by the employees at all levels and last but not least,of the continued confidence reposed by you in the Management.



Date : 14.08.2013 For and on behalf of the Board

Place Hyderabad.



Sd/-

(VILASVVALUNJ)

CHAIRMAN AND MANAGING DIRECTOR

---

Mar 31, 2012

The Directors are pleased to present the 28th Annual Report of the Company and the Audited Financial Statements for the year ended 31st March,2012 and the Auditors' Report thereon.

Financial Performance:

SI. FOR THE YEAR ENDED (Rs. in Lacs)

No. PARTICULARS 2011-12 2010-11

1. Income from operations 5743.02 3399.49

2. Total Expenditure 5057.29 3297.91

3. Gross Profit before Int., Dep. and Tax 685.73 101.58

4. Interest & Financial Charges 347.88 924.44

5. Depreciation 322.02 306.38

6. Operational Profit 15.83 (1129.24)

7. Prior Period Expenses - -

8. Extraordinary Income 127.75 -

9. Profit before Tax 143.58 (1129.24)

10. Deferred Tax/Income Tax/Fri.Ben. Tax 47.12 481.75

11. Net Profit after Tax 190.70 (647.49)

At the outset, we wish to thank you for your support our canvas has expanded, as we are entering in to new component development widening the portfolio of the existing business.

Business Model:

Our business is designed to ride the different business cycles to achieve consistent growth and returns. We ride on three levels of growth- supply of raw forgings, Machined components and Assemblies. The low correlation between their cyclicality insulates us from troughs while ensuring that we grasp growth opportunities as they emerge.

Management Team:

We have a mix of senior management team and a potent blend of youth. We have been successful in attracting, retaining and nurturing this talent mix at all levels.

Quality product:

Over the years, we have maintained Quality product despite of new entrants. Our strong management frame work, proven appraisal skills and pro active management of delinquencies have helped us select and maintain a Good value added product of business.

Company Performance:

During the year ended 31st March,2012 the annual income of the Company was Rs. 57.30 crores,as compared to Rs. 33.99 crores in the previous year, representing a increase of 68.57% which was due to the general trend of growth prevailed in all sectors of the industry. It resulted in a Profit of Rs. 1.91 Crores, after allocations made under Depreciation, Interest Charges and other provisions. The Production and Sales Turnover were higher than the previous year.

The Company has registered strong increase by leveraging its strong existing customer relations and aggressively penetrating new markets, in sales from the automotive vertical across domestic

Outlook:

The current macro economic environment continues to be challenging. Global economies, particularly Europe, face severe stress. While inflation in india has stagnant, the overall investment climate continues to be subdued. In this situation, the company would take a cautious approach and concentrate on managing the risks and containing costs.

DIVIDEND:

With a view to the present economic situation, tight liquidity situation and Company's current business plans, the Directors feel it prudent not to recommend any dividend on Equity Shares.

TAXATION:

In come tax is not applicable for this year.

BOARD OF DIRECTORS:

During the year there is no change in the Board of Directors of the Company and the following are the Board of Directors of the Company.

1. Mr. Vilas V Valunj -Chairman & Managing Director

2 Mr. Abhay Kailas Patil -Wholetime Director

3. Mr. M. Venkateshwar Rao -Director (APIDC Nominee)

4. Mr. Vikram Manubhai Desai -Director

5. Mr. Dhairyasheel Bhalchandra Mohite -Director

6. Mr. Suhas Umakant Mate -Director

7. Mr. Prashant Kunjappa Nambiar -Director

8. Mr. Santosh Bansilal Pandit -Director

9. Mr. Debendra Raut -Director

In accordance with the provisions of Section 255 of the Companies Act,1956 read with Articles of Association of the Company Mr. Suhas Umakant Mate and Mr. Santosh Bansilal Pandit, Directors are liable to retire by rotation at the ensuing annual general meeting and being eligible, offer them selves for re-appointment.

COMPANY SECRETARY:

During the year the Company has appointed Mr. Vijay Krishna Madadi, member of Institute of Company Secretaries of India, as Company Secretary and Compliance Officer of the Company with effect from 10th November,2011.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act 1956, with respect to the Directors Responsibility statement, it is here by confirmed that:

(i) In the preparations of the Annual Accounts for the financial year ended 31st March, 2012 the applicable accounting standards have been followed along with proper explanations relating to material departures.

(ii) 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 year and of the profit of the company for the year under review.

(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 safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

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

CORPORATE GOVERNANCE:

The Company is committed to maintain the standards of Corporate Governance and adhere to the Corporate governance requirements set out by SEBI as required under Clause 49 of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance with Auditors' Certificate on compliance with conditions of Corporate Governance and a Management Discussion & Analysis Report forms part of this Annual Report and is annexed here to.

CODE OF CONDUCT:

The Board has laid down a code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the Company's website. Board Members and Senior Management personnel have affirmed compliance with the code for the financial year 2011-12.A separate declaration to this effect is made out in Corporate Governance Report.

AUDITORS AND THEIR REPORT:

The Statutory auditors of the Company M/s. Jawahar & Associates, Chartered Accountants, Hyderabad, retire at the ensuing Annual General Meeting being offer themselves for re-appointment as Statutory Auditor for the financial year 2012-13.

A certificate has also been furnished to the effect that their proposed re-appointment, if made, would be within the limit prescribed under section 224(1B) of the Companies Act, 1956, and that they are not disqualified for such re-appointment with in the meaning of section 226 of the Companies Act,1956.

With regard to the comments suggested by the Auditors' of the Company regarding Debtors/Creditors confirmation are pertaining toerst while management are still pending and management is making an effort in obtaining the same. With regard to identification of slow moving/non moving items the company will crystalise the liability in the coming financial year. With regard to AS-15, provision for retirement benefits to employees, due to paucity of funds the company could not invest in gratuity funds and the same will be done after the financial performance is improved.

COST AUDIT:

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit for the Company and accordingly the Company has appointed M/s. K. Rao & Associates, Cost Accountants, Hyderabad for the said purpose.

The Company has also obtained the Cost Audit Report from M/s. K. K. Rao & Associates, Cost Accountants for the Year 2011-12.

FIXED DEPOSITS:

The Company has not invited/accepted any fixed deposits from the public and consequently no deposits has matured /become due for re-payment as on 31st March, 2012.

PERSONNEL AND PARTICULAR OF EMPLOYEES:

The relations with Employees continued to be cordial throughout the year. The Board appreciates the willful co-operation and team spirits in the Management Cadre and other employees of the Company.

In terms of provisions of Section 217 (2A) of the Companies Act,1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

INDUSTRIAL RELATIONS:

The directors are happy to report that the Industrial Relation has been extremely cordial at all levels through out the year.

PAID UP CAPITAL:

The Company has issued 24,75,000 Optionally Fully Convertible Warrants and 46,54,000 Equity Shares to promoters and others on preferential basis through Postal Ballot on 24/03/2011 Out of which company has allotted 38,04,000 Equity Shares of Rs. 10/- each on preferential basis of allotment on 31/03/2011 and allotted 5,40,000 Equity Shares on 10th February, 2012 by conversion of 5,40,000 warrants. The Company has again allotted 14,64,000 Equity Shares on 23rd May, 2012 by conversion of 6,14,000 and 8,50,000 warrants and accordingly the paid up capital has increased to 1,29,37,000 shares. Accordingly the Company has applied for listing permission from the Bombay Stock Exchange (BSE).

DEBT ASSIGNMENTS:

In order to regularize the existing loan accounts due to M/s. Axis Bank Ltd and M/s. ICICI Bank Ltd, the banks have voluntarily initiated the process of assignment of Debt to M/s. Edelweiss Asset Reconstruction Company Limited (EARC) to settle the secured debts.

Accordingly, the bankers of the Company viz, M/s. Axis Bank Ltd and M/s. ICICI Bank Ltd has assigned their debt to M/s. Edelweiss Asset Reconstruction Company Limited (EARC) with a view to repay the due loan amounts to ICICI Ltd and Axis Bank Ltd.

The settled amounts taken over by EARC to the extent of Rs. 21.05 Crores with Axis Bank and Rs. 5.40 Crores with ICICI Bank as against to the outstanding loan of Rs. 30.89 Crores of Axis Bank and Rs. 7.71 Crores of ICICI Bank respectively. The Company was also obligated to pay an amount of Rs. 3.45 Crores out of the total settled amount of Rs. 26.45 Crores to EARC.

Further to inform that the charges of Axis Bank Limited and ICICI Bank Limited has been modified in the name of EARC accordingly with the MCA Portal.

Though the amounts was settled between the bankers and EARC by virtue of assignment agreement in accordance with the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 the liability of the Company will stand remain viz, for an amount of Rs. 38.60 Crores which was the loan outstanding amounts due as on 28.2.2012 by the Company, including interests received to the bankers. Thus, the Company has initiated the process of negotiation with EARC to fix the settled amount as accepted by the bankers, by way of executing an agreement, where in the debt was restructuring with strategic investment with Debt and equity allotment.

HUMAN RESOURCE MANAGEMENT:

With the size of expansion going in the Company, human resources assume greater importance and have a significant place in the Organizational Structure. The company has been able to create a favorable work environment that encourages innovation and meritocracy. The Company has put in place a scalable recruitment and human resource management. The efforts of the company in the area of employees management and Human Resource (HR) practices have been proved effective in Human Resource Management. Emphasis is given to overall development of the personality of individual employees. Welfare schemes for employees and their families are run in the factories

QUALITY:

High quality standards are maintained in all areas and review of the same is also made constantly in view of the rapid changes that are taking place in the global markets.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO:

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the provisions of Section 217(1) (e) of the Companies Act, 1956 in Form ‘A' and forms part of this report. The additional information required under Rules 1989 Form ‘B' is enclosed.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual report.

PENDING LITIGATION MATTERS:

Following are the litigations pending against the Company for the various issues till the date of this notice and further the name of the opposite party along with the amount involved in respective cases mentioned below:

Sl.No Name of the Opposite party Amount involved (Rs. in Lakhs)

1. HSBC Limited 99.87

2. Sales Tax Department 25.75

TRADING AND DEMAT FACILITIES FOR SHARES:

The shares of the Company are listed with and traded in dematerlized form at Bombay Stock Exchange. The listing fee is paid to the exchange for the year 2011-12. The ISIN No. of the company is INE251F01010. Stock Code is 520003.

DECLARATION:

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act, 1956 and has not defaulted in repayment of deposits, payment of dividend, redemption of debentures and preference shares. Accordingly, the company has not committed any of the defaults specified under Section 274 (1) (g) of the Companies Act, 1956(as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of valuable co-operation extended to the Company by its bankers and various authorities of State and Central Government Departments, customers, Vendors, strategic investors and members. Your Directors also takes this opportunity to place on record, its appreciation of the contributions made by the employees at all levels and last but not least, of the continued confidence reposed by you in the Management.

For and on behalf of the Board

Sd/- (VILAS V VALUNJ) CHAIRMAN AND MANAGING DIRECTOR

Date : 14.08.2012. Place : Hyderabad.

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Mar 31, 2010

The Directors are pleased to present the 26th Annual Report of the Company and the Audited Financial Statements for the year ended 31 st March,2010 and the Auditors Report thereon.

FINANCIAL RESULTS

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31-03-2010

(Rs. In Lacs)

SL FOR THE YEAR ENDED

No. PARTICULARS 2009-10 2008-09

1 Income from operations 2429.48 6249.36

2 Total Expenditure 3287.75 6545.36

3 Gross Profit before Int., Dep. and Tax (858.27) (296.00)

4 Interests Financial Charges 424.96 601.04

5 Depreciation 303.61 277.18

6 Operational Profit (1586.84) (1174.22)

7 Prior Period Expenses - -

8 Extraordinary Income (103.21) -

9 Profit before Tax (1690.05) (1174.22)

10 Deferred Tax/Income Tax/ Fri.Ben.Tax 591.32 340.49

11 Net Profit after Tax (1098.74) (833.73)



OVERALL ECONOMY

The year 2009-10 was most challenging for companies across the globe and India. During the year we saw unprecedented volatility in the markets, both domestic and international. However multi-prolonged efforts of Government of India and its timely measures to revive the economy and industry, lndia could achieve a GDP growth of around 8% in 2009- 10,as estimated by RBI.

BUSINESS PERFORMANCE

During the year ended 31st March, 2010 the annual income of the Company was Rs 24.29 cro res, as compared to Rs.62.49croresin the previousyear,representing a decrease of 61.13 per cent which wasdue to the general trend of recession prevailed in all sectors of the industry.lt resulted in a net loss of Rs.1098.74 lakhs, after allocations made under Depreciation, Interest Charges and other provisions.The Production and SalesTurnover were lower than the previous year.

DIVIDEND

With a view to the present economic slow down, tight liquidity situation and Companys current business plans, the Directors feel it prudent not to recommend any dividend on Equity Shares.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual report as Annexure

FIXED DEPOSITS

The Company has not invited /accepted any fixed deposits and consequently no deposits has matured / become due for re-payment as on 31 st March,2010.

DIRECTORS:

During the year Mr. Debendra Raut, Mr. Soumen sengupta, Mr. Jaideep Ashokrao Kulkarni and Mr. Prashant Kunjappa Nambiar were appointed as Additional Directors of the Company on 31 st March 2010.They shall hold office upto the date of this ensuing Annual General Meeting of the Company and being eligible, offer themselves for appointment. Respective resolutions forthe appointment of said person as Director of the Company are proposed for your approval.

In accordance with the provisions of Section 255 of the Companies Act, 1956 read with Articles of Association of the Company,Sri B.Y.Somayajulu, Director is liable to retire by rotation at the ensuing annual general meeting and being eligible, offerhimself for reappointment.

The brief resume of the Directors who are to be appointed are furnished to the explanatory statement to the notice.

Further during the year,SriM.P.Murti,Chairman,SriV.Prakasa Rao, Director, Sri T. A. Choudary, Director, Sri Milind S Desai, Director and Sri Gunvant A Sanghrajka, Director have relinquished the office of Director on account of personal reasons and your Directors would like to place on record their appreciation for the services rendered and contribution made by them, during their tenure as Director of the Company.

DIRECTORSRESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act 1956, with respect to the Directors Responsibility statement,it is hereby confirmed that:

(i) In the preparations of the Annual Accounts for the financial year ended 31st March, 2010 the applicable accounting standards have been followed along with proper explanations relating to material departures.

(ii) The Directors have selected such accounting policies and applied them consistently and made judgements 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 year and of the profit of the company for the year under review;

(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 safe guarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

CASH FLOW STATEMENT

A Cash Flow Statement for the year ended 31 st March, 2010 is attached with the Annual Audited Accounts of the Company.

INSURANCE

Your Companys movabl eand immovable assets have been adequately insured against various risks.

TAKEOVER

During the year Mr. Villas Vitthal Valunj, resident of Pune along with the persons Acting in Concert ("PACS") i.e, Mr. Partha Debnath, resident of Kolkatta and Mr.Janardhan Shriniwas, resident of Pune offered themselves to acquire 14,25,800 fully paid up Equity Shares of Rs. 10A each representing 20% of the current voting capital of the Company at a price of Rs. 22.65 on theopening of offer dated Thursday July 01 st 2010.

However the said offer could not be completed due to the following reasons:

As the sale shares are pledged,the acquirer and the target Company had written letter to Axis Bankfor its consent for the proposed change in management and control of the Target Company in favour of the acquirer.Axis Bank, vide its letter dated March 26th 2010 had agreed to the proposed transfer of shares from the promoters to the acquirer and the consequent change in management and control of the target company subject to the payment of the entire interest outstanding as March 31 st 2010 by April 30th 2010 and the acquirer agreeing to continuation of the pledge on sale shares. After receiving the approval from the Bank the acquirerand the promoters have entered into a share purchase agreement on April 02,2010 for the acquisition of the sale shares.

In order to avoid a situation wherein the Axis Bank could raise an objection for the proposed change in management and control, the acquirer decided to complete the takeover process after the payment of dues to the Bank. Accordingly, the Company has made the payment1 of interest on April 27,2010. Subsequent to this, acquirers are in the process of issuing the fresh announcement with the revised time schedule in the month of September or October 2010.

PENDING LITIGATION MATTERS

Following are the litigations pending against the Company for the various issues till the date of this notice and further the name of the opposite party along with the amount involved in respective case is mentioned below: (Rs. in Lakhs)

SI.No. Name of the Opposite Party Amount involved

1. Ellarve Metal Limited 59.12

2. Ellarve Metals Limited 73.20

3. Mastana Construction 10.00

4. KVR Forging Ltd 143.00

5. HSBC Limited 159.92

6. Sales Tax Department 25.72

7. EPF Appellate tribunal 21.93



PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217 (2A) of the Companies Act 1956 read with Companies (particulars of employees) Rules, 1975 (as amended), there are no employees governed by the said provisions.

AUDITORS AND THEIR REPORT

The Statutory auditor of the Company M/s. Jawahar & Associates, Chartered Accountants, Hyderabad, retire at the ensuing Annual General Meeting being offer themselves for re-appointment as Statutory auditor for the financial year 2010- 11.

A certificate has also been furnished to the effect that their proposed re-appointment if made, would be within the limit prescribed under section 224(1 B) of the Companies Act, 1956, and that they are not disqualified for such re- appointment within the meaning of section 226 of the Companies Act, 1956.

The observations of the Auditors, together with the Notes to Accounts referred to in the Auditors report are self explanatory and do not call for any further explanation from the Directors.

ENERGY, JECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the provisions of Section 217 (1) (e) of the Companies Act, 1956 is Form A and forms part of this report. Theadditional information required under Rules 1989 Form Bis enclosed.

CORPORATE GOVERNANCE

The Company is committed to maintain the standards of Corporate Governance and adhere to the Corporate governance requirements set out by SEBI as required under Clause 49 of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance with Auditors Certificate on compliance with conditions of Corporate Governance and a Management Discussion & Analysis Report forms part of this Annual Report and is annexed hereto.

STATEMENT PURSUANT TO LISTING AGREEMENT

The shares of the Company are listed with and traded in dematerlized form at Bombay Stock Exchange. The listing fee is paid to the exchange for the year 2009-10.ThelSINNo.of the company is INE251F01010.Stock Code is520003.

DECLARATION

The Company is filing all Forms and Returns with the Registrar of Companies as required under the Companies Act 1956 and has not defaulted in repayment of deposits, payment of dividend, redemption of debentures and preference shares. Accordingly, the company has not committed any of the defaults specified under Section 274 (1) (g) of the Companies Act, 1956(as amended by the Companies Act, 2000) disqualifying its Directors to act as Directors of other Public Limited Companies.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of valuable co-operation extended to the Company by its bankers and various authorities of State and Central Government Departments, customers, Vendors, strategic investors and members. Your Directors also takes this opportunity to place on record, its appreciation of the contributions made by the employees at all levels and last but not leastof the continued confidence reposed by you in the Management.

By Order of the Board

Sd/-

Place HYDERABAD (V.A.NORHI)

Date: 30th July, 2010 VICE CHAIRMAN & MANAGING DIRECTOR

Sd/-

Jaideep Ashokrao Kulkarni

(DIRECTOR)