AFFLUENCE

DIRECTORS' REPORT

TO

THE MEMBERS,

Your Directors wish to submit their 30th Annual Report on the Audited Accounts for the year ended 31st March, 2015

OPERATIONS:

During the year under review, your company achieved a turnover of Rs.648.01 lakhs excluding Excise Duty as against previous year's turnover of Rs. 673.36 lakhs excluding Excise Duty and suffered a loss of Rs.247.09 lakhs as against previous year's net loss of Rs.163.32 lakhs. Your company manufactured and dispatched 9 machines during the year under report as against 7 machines during the previous year.

Your company's order book position at the beginning of the year under report consisted of 15 machines for a value of Rs.1219.06 lakhs.

During the year, your company received orders 6 machines  for a value of Rs.316.57 lakhs.

The material consumption has increased to 81.10% as compared to that of previous year of 64.88%.

CHANGE IN THE DIRECTORSHIP :

Mrs. Vrinda Mantri (DIN: 00848714) was appointed as an Additional Director on 18.03.2015. She holds office up to the date of the ensuing Annual General Meeting.

As required under Section 161 of the Companies Act, 2013, read with Rule 3 of The Companies (Appointment And Qualification of Directors) Rules, 2014, the Company has received a notice from Mrs. Vrinda Mantri in writing,

proposing the candidature for her appointment as Director of the Company. Resolution at Sl. No. 4 under Special Business of the Notice is before you for your approval.

A brief profile of Mrs. Vrinda Mantri being reappointed  as Director is given below:

Mrs. Vrinda Mantri (67) (DIN: 00848714) holds degree  in B.A. (Psychology). She was a Director in M/s. Cotmac Private Limited and has got vast experience in the field of industries.

DIRECTORS RETIRING BY ROTATION:

Mr. Vikram Sirur (DIN: 00312980) Director of the  Company, retires by rotation and being eligible offers himself for reappointment.

A brief profile of Mr. Vikram Sirur retiring by rotation is  given below:

Mr. Vikram Sirur (68) holds degree in B.E.(Chem) & M.I.E. He has about 47 years of industrial experience in the field of engineering industry. He has been appointed Past President of the Indian Machine Tools Manu facturer's Association. He is Chairman and Managing Director of Miven Mayfran Conveyors Pvt. Ltd., Chairman Urban Co-operative Bank Hubli, Managing Director of Ruris Tecnal Extraction Systems Pvt. Ltd., Director of N A Sirur (Hubli) Pvt. Ltd., Cotmac Electronics Pvt. Ltd., Mipro International Pvt. Ltd., Pratt Automation Pvt Ltd. and Finerarc Systems Pvt. Ltd., He is also a Member of the Shareholders Grievance Committee of the Company.

FINANCIAL STATEMENTS:

Audited Financial Statements including Balance Sheet, Profit & Loss Account, Cash Flow Statement and Notes to Financial Statements for the financial year 2014-15 have been approved by the Board of Directors at their meeting held on 30.05.2015.

AUDITOR'S REPORT:

Independent Auditor's Report to the Members of the Company for the year ended 31st March, 2015, received from M/s. B. K. Ramadhyani & Co. LLP, the statutory auditors, is enclosed, as Annexure - A, with this Report.

EXTRACT OF THE ANNUAL RETURN:

Extract of the Annual Return for the year ended 31st March, 2015, as provided under Sub-clause (3) of Section 92 of the Companies Act, 2013, read with Rule 11 of the Companies (Management & Administration) Rules, 2014 is enclosed, as Annexure - B, with this Report.

No. of Meeting of the Board :

During the financial year 2014-15, Company held five meetings of the Board of Directors. The details of attendance by the Directors at the Board meetings and the previous Annual General Meeting are as under

DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed;

1. That in the preparation of the annual accounts for the financial year ended 31st March, 2015; the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. That the Directors had 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 loss for the year under review.

3. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. They have devised proper systems to ensure compliance with the provisions of all applicable laws and these systems are adequate and operating effectively.

5. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively.

6. That the Directors had prepared the accounts for the financial year ended 31st March, 2015 on a 'Going Concern' basis.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013:

Pursuant to provision of Section 149, 152 and Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Members of the Company at their Meeting held on 27.09.2014, have appointed Mr.Sanjay B. Baljekar (DIN: 01999874) and Mr. Jitendra Divgi (DIN: 00471531) as an Independent Directors of the Company for three years from the conclusion of twenty ninth Annual General Meeting to the conclusion of the thirty second Annual General Meeting and not liable to retire by rotation.

The declarations of Independence have already been received from the above Directors.

COM PANY'S POLICY ON D IRECTOR'S APPOINTMENT AND REMUNERATION INCLUDING  CRITERIA FOR DETERMINING QUALIFICATIONS,  POSITIVE ATTRIBUTES, INDEPENDENCE OF A  DIRECTOR AND OTHER MATTERS PROVIDED  UNDER SUB-SECTION (3) OF SECTION 178:

The Nomination and Remuneration committee has formulated the following policy pursuant to the provisons of Section 178 of the Companies Act, 2013:

Before the Board selects any person for the position of Independent Director, it must make sure that:

• The Nomination and Remuneration Committee of the Board shall identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal shall carry out evaluation of every Director's performance.

• The Nomination and Remuneration Committee shall, while formulating the policy under Sub-Section (3) of Section 178 of the Act to ensure that:

a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

• As given in Schedule IV of the Act, the appointment process should be independent of management. The process invariably starts from the identification of an I n dependent Director by the N omin ation an d Remuneration Committee of the Board.

Qualifications of an Independent Director :

An Independent Director shall assess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration , research , corporate govern ance, technical operations or other disciplines related to the company's business.

An Independent Director in relation to a Company, means a Director other than a Managing Director or a Whole Time Director or a Nominee Director:

a) Who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience.

b) Who is not a promoter of the Company.

c) Who is not related to promoters or directors in the Company its holding.

d) Who has no pecuniary relationship with the company and its holding company.

e) None of whose relatives has pecuniary relationship or transaction with the company.

Manner of Appointment:

Appointment process of Independent Directors shall be in dependent of the Company Man agement, while selecting Independent Directors; the Board shall ensure that there is appropriate balance of skills, experience and knowledge in the Board so as to enable the Board to discharge its functions and duties effectively.

The appointment of Independent Director of the Company shall be approved by the Shareholders in their General Meetings.

As per Sub-Section (1) of Section 150, subject to the provisions contained in Sub-Section (5) of Section 149, an Independent Director may be selected from a Data Bank containing names, addresses and qualifications of persons who are eligible and willing to act as

Independent Directors maintained by any body, etc.

Remuneration to the Independent Directors will not be given except that of sitting fee for attending the Board Meeting only.

Remuneration to the Directors other than Independent Directors i.e. Whole Time Directors will be fixed in accordance with Schedule V of the Act.

DEPOSIT:

During the year under report, the company has not accepted or renewed any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules,  2014.

SHARE CAPITAL:

The paid-up equity Share Capital of the Company as on 31st March 2015 was Rs.3,00,35,000/-. There has been no change in the Equity Share Capital of the Company during the year.

DIVIDEND:

In view of the loss for the year and the unabsorbed accumulated losses of the earlier years, your Directors regret their inability to recommend dividend for the year under report.

RESERVES:

Your Company has not transferred to the General Reserve for the Financial Year ended 31st March, 2015.

DISCLOSURE:

The information stipulated under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished below:

i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-2015:

ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary - if any, in the financial year 2014-2015:

No increase in remuneration of each Director, CFO, CS & CEO in the financial 2014-15.

iii) The percentage increase in the median remuneration of employees in the financial year 2014-2015:

iv) The number of permanent employees on the roles of the Company: 30

v) The explanation on the relationship between average increase in remu n eration an d Compan y performance:

There was no increase in remuneration and since the company is under loss, explanation is not necessary.

vi) Comparison of the remuneration of the key managerial personnel against the performance of the company:

Since the Company is making loss, no comparison is possible.

vii) The key parameters for any variable component of remuneration availed by the directors:

Not Applicable.

viii) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

Not Applicable.

ix) Average percentile increase already made in the salaries of employees other than the managerial personnel in the past financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are an y exception al circumstances for increase in the managerial remuneration:

There was no increase in the salaries of employees other than managerial personnel and also managerial personnel, hence no comparison is possible.

x) Durin g the year un de review there was n o employee who was in receipt of a remuneration of Rs.5,00,000/- per month or Rs.60,00,000/- per annum and hence the particulars of the employees as required in terms of Sub Rule 2 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, does not attract.

xi) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies.

There is no liquidity / tradability in the equity shares of the Company for the last several years. No trading has been taken place since April 05, 2002.

ENVIRONMENT & SAFETY:

Your Company initiated several activities as part of employees engagement in Safety Management which are detailed below:

1. Preserve safety of workmen: As required under the said Act and for that purpose we have maintained a high standard of cleanliness. We have ensured proper lighting and clean drinking water for the employees.

2. Proper care and caution has been taken with regard to the handling of hazardous materials and we comply with specific statutory requirements.

3. We have ensured wherever necessary, periodic checking of cranes and hoists by competent authorities. Proper state of maintenance for the buildings and machines is carried out.

4. A proper system has been devised and training provided in respect of fire fighting and first aid to our employees.

5. We have ensured a system for controlling movement of material with regard to safety and health.

6. We have regulated measures for storage and safe keeping of materials both hazardous and non-hazardous.

7. Proper examination of machinery an d its maintenance from time to time is conducted with a view to make improvements wherever necessary, for achieving better levels of safety.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has neither having net worth of Rupees Five Hundred Crores or more nor Turnover of Rupees One Thousand Crores or more or a net profit of Rupees Five Crores or more, during the Financial Year 2014-15 and hence provision of Section 135(1) of the Companies Act, 2013 is not attracted to your Company.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

Pursuant to Section 161(1) of the Companies Act, 2013 and The Companies (Appointment and Qualification of Directors) Rules, 2014 the company has appointed Mrs. Vrinda Mantri (DIN 00848714) as an additional Director under Women Director's category on the Board and she holds office until the conclusion of the next Annual General Meeting.

As required under Section 161(1) of the Companies Act 2013 and Rule 13 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the company has received the notice from Mrs. Vrinda Mantri in writing, proposing the candidature for her appointment as Director of the Company. Resolution at serial no.4 under special business of the Notice calling the Annual General Meeting is before you for your approval.

Except the above, there has been no change in the Directors & Key Managerial Personnel during the year under report.

STATUTORY AUDITORS:

The Members at the 29th Annual General Meeting held on 27th September 2014 had appointed

M/s. B. K. Ram adhyani & Co., LLP, Chartered Accountants, Bangalore, as the statutory auditors of the company, pursuant to the provisions of Section 139, 142 & other applicable provisions, if any, of the Companies Act, 2013 to hold office from the conclusion of that Annual General Meeting till the conclusion of the 30th Annual General Meeting i.e up to September 2015.

In this regard, M/s. B. K. Ramadhyani & Co., LLP, Chartered Accountants, Bangalore, have submitted their written consent that they are eligible and qualified to be reappointed as Statutory Auditors of the Company in terms of Section 139 of the Companies Act, 2013 and also satisfy the criteria provided in Section 141 of the Companies Act, 2013.

Accordingly, the Board recommends to the Members of the Company for the appointmen t of M/s. B. K. Ram adhyani & Co., LLP, Chartered Accountants, Bangalore, at a remuneration to be decided by the Audit Committee in consultation with the Auditors for the purpose of Audit.

SECRETARIAL AUDIT:

Pursuant to the provision s of Section 204 of the Companies Act, 2013 read with the Companies

(Appointm en t and Rem un eration of Man agerial Personnel) Rules 2014, the Company had appointed Mr. Umesh Maskeri - a Practicing Company Secretary, Mumbai, to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report is given forming part of this Report.

COST AUDIT:

The order dated 24.01.2012 issued by the Ministry of Corporate Affairs (MCA) - Cost Audit Branch, Government of India, mandated Cost Audit being applicable to your Company as your Company is a listed Company.

As per Section 148 and other applicable provisions of the Companies Act, 2013, the Board of Directors based on the recommendation of the Audit Committee had appointed M/s. S. K. Tikare & Co., Dharwad - Cost Accountants, as Cost Auditor to carryout the audit of the cost records of the Company for the Financial Year 2013-14.

Later, the MCA had notified the Companies (Cost Records and Audit) Rules 2014 and Companies (Cost Records and Audit) Amendment Rules, 2014, specifying the industry for maintaining and auditing of Cost Records.

As the above rules were not applicable to your Company, the audit of the Cost Records was not carried out for the Financial Year 2014-15 and the Board of Directors have decided not to appoint Cost Auditor for the Financial

Year 2014-15.

EXPLANATIONS TO THE REMARKS IN THE AUDITORS' REPORT :

Auditor's Report:

The Company has considered an amount of Rs.14.58 Lakhs due from a Customer as good of recovery in respect of which the customer has made a counter claim of Rs.73.49 Lakhs which has been dismissed by the Additional District Judge, Vijayawada. The customer has moved to High Court, Telangana and Andhra Pradesh. The Company has been advised by its legal counsel and the claim of the party is not sustainable in law. The Company is confident of recovering all the dues.

EXPLANATIONS TO THE REMARKS IN COMPANY SECRETARY IN PRACTICES' REPORT:

1. To abide by the provisions of Securities Contracts (Regulation) Rules, 1957 ("SCRR") read with Clause 40 A of the listing agreement entered by the Company with the BSE Limited and the directions issued by the SEBI, the Company has initiated the process of voluntary delisting of its shares from BSE Ltd in accordance with the provisions of Regulation 27 of the SEBI (Delisting of Equity Shares) Regulations, 2009. Special resolution by means of postal ballot was passed by the shareholders of the Company on May 23, 2015 and the Company has obtained the in-principle approval from the BSE Ltd for delisting of the shares vide its letter No DCS/DEL/BM/IP/358/ 2015-16 dated June 23, 2015. The promoters have fixed the exit price payable to the public shareholders at Rs 10/- per share which is higher than the exit price of Rs 4.39 recommended by Tata Securities Limited, the Merchant Bankers for the delisting offer. The promoters have sent out letters dated July 24, 2015 to the public shareholders seeking their consent for delisting of the equity shares from BSE Ltd and also for dispensing with the discovery of exit price through the reverse book building process. The last date, initially fixed as July 30, 2015. In the meanwhile, up on the re que st by the C omp any, S EBI has extended the last date for completion of various formalities to October 2, 2015. Thus, the Company has made considerable progress in its efforts to achieve voluntary delisting of shares from BSE Ltd.

2. The company has filed an application for condonation of delay in Form CG-1 with the Ministry of Corporate Affairs ("MCA") on July 13, 2015 and the application is under process by the MCA.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The particulars of investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in a note no. 13 of the Standalone Financial Statements.

There are no loans or guarantees given by the Company during the year 2014-15.

RISK MANAGEMENT POLICY:

A detailed review of business risks and the Company's plan to mitigate them is presented to the Board. The Company has been taking steps to mitigate foreseeable business risks. Business risk evaluation and management is an ongoing and continuous process within the Company and regularly updated to the Board.

SIGNIFICANT & MATERIAL ORDERS PASSED BY

THE REGULATORS:

There are no significant and material orders passed by the Regulators or Courts or Tribunals during the year impacting the going concerns status and the Company's operations in future.

WHISTLE BLOWER POLICY / VIGIL MECHANISM:

The details of the Whistle Blower Policy is covered in Corporate Governance Report.

PARTICULARS OF CON TRACT OR ARRANGEMENTS WITH THE RELATED PARTIES PURSUANT TO THE PROVISIONS OF SECTION

188(1) OF THE COMPANIES ACT HAVE BEEN

FURNISHED IN FORM AOC02 ANNEXED TO THIS REPORT:

Full details have been furnished in 35 A. & 35 B. of the Notes to Financial Statements for the year ended 31st March 2015. All transactions entered into with the related parties as defined under the Companies Act, 2013 during the year were in the ordinary course of business and on an arms length basis.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COM PANY TO WH ICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT:

No material changes occurred between the end of the financial year of the Company.

AUDIT COMMITTEE:

The Board has constituted the Audit Committee. The composition, powers, role and terms of reference of the Committee are in accordance with the requirements mandated under Section 177 of the Companies Act. The details of the Audit Committee alongwith meetings held during the year are covered in Clause 3 of the Corporate Governance Report.

REMUNERATION POLICY:

The details of the remuneration policy are covered in the Clause No. 4 of the Corporation Governance Report. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The details about the adequacy of internal financial controls are covered in the Clause (f) of the Management Discussions and Analysis Report.

BOARD EVALUATION:

The Independent Directors shall meet at least once in a Calendar Year to review the performance of Non-Independent Directors and the Board as a whole; to review the performance of the Chairman and to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board and its Members that is necessary for the Board to effectively and reasonably perform their duties.

DISCLOSURE WITH REGARD TO CONSERVATION

OF ENERGY, TECHNOLOGY OUTGO, ETC:

Information as required under Section 134(m) of the Companies Act, 2013, forms part of this report and is given as an Annexure.

CORPORATE GOVERNANCE PROVISIONS:

Pursuant to the provisions of Clause 49 of the Listing Agreement, the company has adopted the provisions relating to Corporate Governance Code. Your company has complied with all the mandatory requirements of the said Corporate Governance provisions. Corporate Governance Report is furnished separately and forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

REPORT:

The Management Discussion and Analysis Report as per requirements under Clause V (A) of the Corporate Governance Provisions prescribed under Clause 49 of the Listing Agreement are furnished separately and forms part of this Report.

CEO / CFO Certification:

As required under Clause (V) of Clause 49 of the Listing Agreement, the Company has obtained a certificate from Mr. S. G. Gadagkar - Chief Financial Officer, confirming compliance of the aforesaid clause.

CERTIFICATE OF COMPLIANCE OF CORPORATE GOVERNANCE:

Certificate of the Auditors confirming Compliance with the provisions of Corporate Governance forms a part of this Report.

INDUSTRIAL RELATIONS:

Industrial relations with the employees of the company remained cordial, stable and satisfactory during the year under review.

ACKNOWLEDGEMENT:

Your directors wish to place on record their appreciation of the assistance and support extended by the Bankers, Financial Institutions, State and Central Governments, Customers and Suppliers to the Company. Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of your Company

For and on behalf of the Board

VIKRAM R. SIRUR

Chairman

Place : Pune

Dated 11th August 2015