The Directors present the Forty-eighth Annual Report on the Business and Operations of your Company together with the Audited Financial Statements for the six months ended March 31, 2013.

FINANCIAL RESULTS

The Financial Results of the Company for the period under review are as follows:

                                                 (Rs. in thousands)

                                        Six months       Year ended
                                        ended 31st 
                                        March, 2013      30th 
                                                         September, 2012

Revenue from Operations (Gross)             112,088         412,819

Revenue from Operations (Net)               104,928         378,533

Other Income                                  5,091           2,632

Finance costs                                49,263         220,105

Depreciation and amortisation expense         6,771          22,822

(Loss) before taxation                     (127,833)       (502,995)

Tax Expense : Deferred Tax- release           1,283           3,160

(Loss) after taxation                      (126,550)       (499,835)

Earnings per share: (face value of 
Rs. 10/- per share)
-Basic & Diluted (in Rs.)                    (13.83)         (54.61)

In view of the Company having suffered a loss during the period under review and accumulated losses of previous years, the Directors hereby express their inability to recommend any dividend for the six months ended 31st March, 2013.

PERFORMANCE

During the period under review, your Company recorded a net turnover of Rs. 10.49 Crores and loss after tax of Rs. 12.65 Crores. The figures of review period are not comparable with the previous year figures in view of the fact that the Accounts for the financial year 2012-13 had been prepared for a period of 6 (six) months i.e. from 1st October, 2012 to 31st March, 2013.

The performance review, outlook and strategy have been spelt out in depth in the Management Discussion and Analysis Report, which forms part of this Directors' Report.

DIRECTORS

During the period under review, Mr. Vivek Sanghi resigned as Director & Chief Operating Officer (COO) of the Company w.e.f. 12th January, 2013. The Board places on record its deep appreciation for the distinguished services rendered by Mr. Sanghi during his tenure.

Mr. Nandan Bardhan was appointed as an Additional Director and a Whole-time Director w.e.f. 27th February,

2013 by the Board and subsequently approved by the Members of the Company at their 47th Annual General Meeting held on 30.03.2013 and subject to the approval of Central Government, Banks, and Financial Institution.

In accordance with Section 256 of the Companies Act, 1956 read with Article 95 and 96 of the Articles of Association of the Company, Mrs. Vandana Khaitan, Director will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment.

The information on the particulars of Director seeking re- appointment as required under Clause 49 of the Listing Agreement is given under Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and the Companies (Particulars of Employees) Amendment Rules, 2011 is not applicable as none of the employees are drawing salary more than the limit prescribed under the aforesaid Rule during the period under review.

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

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is annexed herewith.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby state and confirm that:

a) In the preparation of accounts for the six months ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The Directors have 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 six months and of the loss of the Company for the period under review;

c) 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; and

d) The Directors have prepared the accounts for the six months ended 31st March, 2013 on a going concern basis.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The vision on Corporate Social Responsibility (CSR) is, "To be a socially and environmentally responsible corporate citizen". Our endeavour is to take an active role in minimizing harm to the natural resources. Your Company is planning to foster the development of people and society through various means with the aim of attaining overall corporate growth and enhancing Shareholders value.

APPOINTMENT OF COST AUDITOR

M/s. M K Sau & Associates, Cost Accountants (Registration No. 100902) has been appointed as Cost Accountants for the purpose of audit of cost records and preparation of report in accordance with the Companies (Cost Audit Report) Rules, 2011 for the financial year 2012-13 ended on 31st March, 2013.

CORPORATE GOVERNANCE

Your Company recognizes the importance of good Corporate Governance as a step for building stakeholders' confidence, improving investor protection and enhancing long term enterprise value. Your Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange are complied in its letter and spirit.

A separate report on Corporate Governance along with the certificate from M/s. Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Company for its due compliance and a Management Discussion and Analysis Report are annexed hereto.

PUBLIC DEPOSITS

Your Company has not accepted or renewed any fixed deposits from the public during the period under review.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants (Registration No. 302009E), Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting of the Company and have expressed their desire not to offer themselves for re- appointment at the ensuing Annual General Meeting of the Company. The Company has received a special notice from a member in terms of the provisions of the Companies Act, 1956 signifying his intention to propose the appointment of M/s. N. Agarwala & Associates as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

In view of the above and based on the recommendation of the Audit Committee, your Directors propose M/s. N. Agarwala & Associates, Chartered Accountants (Registration No. 315097E), for appointment as the Statutory Auditors of the Company at the ensuing Annual General Meeting. M/s. N. Agarwala & Associates are eligible and offer themselves for appointment as Statutory Auditors.

The Company has received a certificate from M/s. N. Agarwala & Associates to the effect that their appointment, if made, would be within the limits specified under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of Section 226 of the said Act.

AUDITORS' REPORT

Your Directors wish to clarify the points/observations reported by the Statutory Auditors, as under: -

1. Paragraph 1 described in the "Basis for Disclaimer of Opinion" of the report regarding preparation of the Financial Statements on a going concern basis, it is clarified that the Company believes that there is no issue with respect to going concern for the foreseeable future because of following reasons:-

- Sufficient demand of the products in the market and the Order Book can sustain Operations over the coming years, but due to lack of fund, the Company is presently unable to execute the same in time;

. Products are remunerative and the costs are under substantial control;

. Major steps taken to revive the Company includes cost control by streamlining of fund management, restructuring and realignment of manpower, concentrating on core products, development of new product lines, revamping its service networks, quality improvement through adoption of modern and proven manufacturing technology, concentration to recover dues from Debtors, identifying obsolete 'Inventory' for disposal and simultaneously maintaining an optimal Inventory level;

. Exploring the possibilities to induct fund into the Company enable balance debt-equity ratio and improvement of level of Operations; and

. Proposal of the Company for One Time Settlement (OTS) with Banks and Financial Institution is under consideration and the same shall be amicably settled at the earliest.

The Company expects that the above steps taken for improvement will result in increased productivity and profitability in coming years. Moreover, the Company has neither the intention nor the necessity of liquidation or of curtailing materially the scale of Operations any further.

Your Directors are looking into the Auditors' comments on Paragraph 1(ii) and 1(iii) in the "Basis for Disclaimer of Opinion" of their report regarding physical verification of fixed assets and inventories and existence or reliability of the value of inventories of Hosur unit, it is clarified that the Company is following the Accounting Standard-2 consistently over the years for valuation of inventories. Your Directors further stated that the verification of fixed assets and inventories could not carried out due to suspension of work at the said unit and also directed the Company Officials to take appropriate steps in this regard in future.

2. Paragraph 2 described in the "Basis for Disclaimer of Opinion" of the report regarding interest not provided on loan taken from a body corporate, it is clarified that the Company is in discussion with that body corporate for waiver of interest on the loan and amendment of clause of loan agreement on the ground that the Company is sick and will not be able to pay interest on the said loan and it should be treated as interest free loan. The Company believes that the body corporate shall agree for the same.

The Company has become a sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). A reference under Section 15(1) of SICA has already been made on the basis of duly adopted Audited Financial Statements for the year ended 30th September, 2012 to the Board for Industrial and Financial Reconstruction (BIFR) for determination of measures which shall be adopted with respect to the Company.

The Board of Directors of your Company examined the

Auditors' comments in the "Report on Other Legal and Regulatory Requirements" paragraphs of their report regarding Books of Account and Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 and confirmed that the Books of Account has been kept in compliance with Section 209 of the Companies Act, 1956 and it gives a true and fair view of the state of affairs of the Company and are kept on accrual basis and each and every transaction has been explained to the Auditors. Your Directors also certify that the financial statements are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956. The CEO and CFO have certified the financial statements which form part of this Annual Report. The Directors completely disagree with the comments of the Auditors.

The Auditors haven't expressed their opinion on the Financial Statements of the Company because of ONLY matters described in the "Basis for Disclaimer of Opinion" paragraphs of their report. The Board of Directors has clearly explained as above to the observation of the Auditors contained in their report as required under Section 217(3) of the Companies Act, 1956.

PERSONNEL/INDUSTRIAL RELATIONS

Your Company continued to have cordial and harmonious relations with its employees at all levels during the period under review. The Board acknowledges it's gratitude to all the shop floor personnel and other employees for their continuous efforts and valuable services rendered by them throughout the period.

The manufacturing operation of the Hosur Unit could not be continued due to high manufacturing cost and non remunerative selling prices. The 'Suspension of Work' was implemented on 24th July, 2012 in the Hosur Unit with a view to reduce the cost and expenditure without interruption of production i.e. by relocating a part of the Operation to Budge Budge, Kolkata plant with the option to the workmen to join the same for the time being.

The Company has conducted several training programs for its employees to improve the working as also for improving safety and health standards of the employees.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation and thanks to the Banks, Financial Institution, Customers, Stakeholders, Suppliers, various Government Authorities for their valuable assistance and co-operation.

Your Directors thank the Executives, Staff and Workers of the Company for their efficient and dedicated services during the period and look forward to their continued support.

                                    For and on behalf of the Board

                                                   Vandana Khaitan

Kolkata                                         Vice Chairperson &

22nd July , 2013                                 Managing Director