INDIA’S WELDING

POWER HOUSE

5/A, CORPORA,L.B.S.Marg, Bhandup (West),Mumbai 400 078.Maharashtra, INDIA.Tel: 6623 9300Fax: 2596 6562 / 6062Email: cmo@adorians.com

2596 2564 /

5/A, CORPORA,L.B.S.Marg, Bhandup (West),Mumbai 400 078.Maharashtra, INDIA.Tel: 6623 9300Fax: 2596 6562 / 6062Email: exports@adorians.com

2596 2564 /

REGD. & HEAD OFFICE CORPORATE MARKETING OFFICE INTERNATIONAL BUSINESS DIVISION

Ador House, 6, K. Dubash Marg, Fort,Mumbai - 400 001.

Tel: 2284 2525, 2287 2548Fax: (022) 2287 3083Email:

Maharashtra, INDIA.(022)

pratikshah@adorians.comdineshnayak@adorians.com

ADOR WELDING LIMITED

Contents

Board of Directors, Corporate Management Team,

Bankers, Solicitors and RTA

Distribution of Revenue

Innovations / New Developments

Directors’ Report and its Annexures

Auditors Report

Balance Sheet, Profit and Loss Account

Cash flow statement

Schedules, Notes to Accounts and Annexure I

Balance Sheet Abstract and Company’s

General Business Profile

and its Annexures

ADOR WELDING LIMITED

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34-35

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56th Annual Report 2008-09

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Ms. A. B. AdvaniExecutive Chairman

Mr. Raman Kumar Managing Director (from 19th Oct, 2008)

Mrs. N. Malkani NagpalDirector

Mr. R. A MlrchandaniDirector

Mr. A. T. MalkaniDirector

Mr. D. A. LalvaniDirector

Mr. J. N. HindujaDirector

Mr. Anil HarishDirector

Mr. M. K. MaheshwariDirector

Mr. P. K. GuptaDirector

Mr. R. N. SapruDirector(from 19th Oct, 2008)

Mr. K. Digvijay SinghDirector(from 01st Feb, 2009)

Mr. V. G. KuttyManaging Director (upto 18th Oct, 2008)

Mr. G. L. MirchandaniDirector(Upto 11th June, 2008)

ExecutiveManagement TeamMr. S. M. Bhat

Mr. K. N. Subramanian

Mr. V. B. Tamboli

Mr. V. M. Bhide

Mr. T. P. Mukherjee

Mr. J. Rajagopalan

Mr. H. K. Bhatia

Mr. S. S. Bhoi

Mr. S. H. Lala

Mr. A. R. Vilekar

Mr. R. R. Mohapatra

Mr. S. Ajay Kumar

Mr. I. A. Pai

Mr. M. G. Gadre

Mr. G. R. Ravichandran

Company SecretaryMr. V. M. Bhide

Registered & Head OfficeAdor House,6, K. Dubash Marg,Fort, Mumbai - 400 001Maharashtra, INDIA.Tel.: 2284 2525, 2287 2548Fax.: 2287 3083Web : www.adorwelding.com

BankersHDFC Bank Limited Bank of Baroda

AuditorsDalal & Shah, Chartered AccountantsMumbai

SolicitorsNanu Hormasjee & Co.,Mumbai

Registrar & Share Transfer Agent (RTA)M/s. Sharex Dynamic (India) Pvt. Ltd.

Head Office17/B, Dena Bank Bldg., 2nd floor, Horniman Circle, Fort, Mumbai - 400 001.Maharashtra, INDIA.Tel.: 2270 2485, 2264 1376Fax.: 2264 1349

Branch OfficeUnit No. 1, Luthra Industrial Premises,Andheri Kurla Road, Safed Pool,Andheri (East),Mumbai - 400 072.Maharashtra, INDIATel.: 2851 5606 / 44Fax : 2851 2885Web : www.sharexindia.com

BOARD OF DIRECTORS, EXECUTIVE MANAGEMENT TEAM,

BANKERS, SOLICITORS AND RTA

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DISTRIBUTION OF REVENUE

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WELDING CONSUMABLES(NEW DEVELOPMENTS)

1.0 Consumables for automatic and semi automatic welding.

1.1 Automelt A82: Classification: AWS A / SFA 5.17 F7AZ-EM12K Product Type: Acidic Submerged Arc Welding Flux This flux is specially designed for high speed submerged

arc fillet welding of thin sheets and is used in combination with Automelt EM12K & Automelt EL8. It produces porosity free welds even at welding speeds in excess of 2.5m/min. This flux is characterized by high Silicon and Manganese pick-up.

Applications include fillet welding of thin sheets in flat and horizontal position.

1.2 Automelt A57 Classification: AWS A / SFA 5.17 F6AZ-EL8 Product Type: Acidic Submerged Arc Welding Flux This flux is specially designed for submerged arc welding

of fillets at very slow speeds and is used in combination with Automelt Automelt EM12K & Automelt EL8. Even when welding is carried out at speeds below 0.2m/min, the slag is easy to remove and the weld bead is smooth and shiny.

Applications include fillet welding of I/ H beams in flat position.

2.0 Consumables for manual welding2.1 Tenalloy-125: Product Type: SMAW electrode for welding high tensile

steels This is a basic coated, hydrogen controlled low-alloy

Cr/Mo/V type electrode for welding similar cast steels. It is an all position welding electrode and deposits a weld bead of uniform appearance with low spatter loss and easy slag removal.

Applications include welding of GS 17 CrMoV 5.1 steel and similar low alloy cast steels.

2.2 Betachrom-13/4LB:

Classification: AWS A / SFA 5.4: E410 Ni Mo-15 Product Type: SMAW electrode for welding special

types of stainless steels This electrode has been specially developed for

welding and surfacing of castings and forgings having specific chemical composition and extra low carbon. The weld deposit has excellent resistance to corrosion, erosion, pitting and impact.

The electrode is used for welding of ASTM CA 6NM castings or similar materials as well as light gauge AISI 410, 410S and 405 base metals, special low carbon castings and forgings having almost identical chemical composition, German castings/forgings type G-X5CrNi13.4 & G-5CrNi13.6 VIRGO 104 casting/forging.

Applications include surfacing of turbine blades, high pressure valves and repair of runners, valve seats, pulp and paper plant equipment

2.3 Tenalloy-16(6GR):

Classification: AWS A / SFA 5.1 E7016 Product Type: SMAW electrode for welding high tensile

steels. This hydrogen controlled electrode has been specially

developed for all position welding of “difficult to weld” steels, particularly in areas with restricted access. It deposits weld metal which is highly resistant to cracking. The arc is stable, slag removal is easy and the joint penetration is uniform.

It is suitable for welding of high carbon steels, low alloy steels, high sulphur steels, steels with unknown composition and dissimilar carbon steels. It is also used for depositing a buffer layer before hardfacing and for joining of cast iron to mild steel.

2.4 Castec-119A:

Classification: AWS A / SFA 5.11: ENi-Fe-CI-A

Product Type: SMAW electrode for welding of cast iron.

This electrode has been specially designed for welding cast iron without preheating. The nickel iron weld deposit does not pick-up carbon from the base metal and hence remains soft and is easily machinable, at the same time retaining adequate strength. It can also be used for repairing large complicated castings with little or no preheat.

Applications include welding and repairing cast iron components requiring controlled ductility, for repairing broken castings, building up of worn surfaces or correcting machining errors on castings, joining cast iron to steel and for the welding of nodular graphite/ malleable iron subject to heavy wear.

2.5 Zedalloy-600WR:

Product Type: SMAW electrode for hard facing applications.

This is a hydrogen controlled, iron powder electrode specially designed for high abrasion and wear resistance. The deposition efficiency is more than 110% and the weld metal deposited is hard (600 BHN) and is machined only by grinding.

It can be used for depositing wear resistant layers on mild steel and low alloy steels. Applications include building up plough shears and mining implements, scrapper blades, cement die rings, Muller tires, bucket edges, conveyor screws, machine parts, oil expeller worms, digger teeth etc.

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1. CHAMP 400 : This is the world class inverter based 400A DC

welder. It is suitable for MMA welding with basic, rutile and cellulosic electrodes. It is high efficiency and high power factor power source, resulting over 35% energy savings compared to the conventional thyristor type power sources.

Following are the salient features and protections provided in this welder.

Salient Features • Latest Inverter technology • IGBT based • High efficiency (>85%) • Smooth and stable arc with minimum spatter • Hot start / Arc force control / soft arc control

features available as standard • Controls provided for adjustments of Innovative

Arc dynamics • TIG operation possible with external HF TIG

control unit.

Protections • Over voltage and Under Voltage • Over Temperature • Protection against Single phasing

2. CHAMP MULTI 400: CHAMP MULTI 400 is IGBT inverter based Multi Process

welding power source with Synergic operation, suitable for MIG/MAG and MMA welding applications. It is most suitable for manual and semi automatic gas shielded and FCAW metal arc welding.

The complete system consists of Power source, Wire feeder, Torch and interconnecting cables. By selecting the CC or CV mode through Digital panel, SMAW or GMAW / FCAW processes can be selected.

Salient Features • Digital Panel for adjusting the welding

parameters and selection of Process either SMAW or GMAW.

• Synergic mode of operation for single point control in short circuit arc in MIG / MAG welding.

• 30% more Energy efficient than conventional machines.

• Excellent dynamic response enables superior arc characteristics.

• Unique feature of Fresh Tip Transfer (FTT) to avoid globule formation.

• Gas preflow, post flow and Burn back time presetable

• “Fan On demand” feature enables the Fan to operate only when it is required by power semiconductors.

• Weld programmes for 10 Nos. of Job can be stored for GMAW process.

• Automatic “Weld Stop” facility. • Suitable for TIG operation by interfacing

separate HF control unit in CC mode.

3. CHOP MULTI 400 : CHOP MULTI 400 is latest Chopper technology

based Energy Efficient Power Source, suitable for MMA / MIG-MAG / FCAW welding application. It can also be used for TIG welding along with H.F outfit. The power source provides both constant

EQUIPMENT GROUP(NEW DEVELOPMENTS)

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current (CC mode) and constant voltage (CV mode) characteristics.

For MMA and TIG process CC mode is selected where, Welding current remains constant in spite of variation in input supply voltage or increase in welding cable length.

It provides Drooping CV characteristics, which is suitable for MIG / MAG / FCAW welding processes. This power source is protected against output short circuit and over temperature. This is suitable for all kinds of electrodes for fabrication work, pipe welding, site construction etc.

Salient Features

• Suitable for MMA & MIG / MAG / FCAW. • Can be used for TIG welding with HF unit

attachment. • MOSFET based Chopper technology. • Higher switching frequency enables better

welding arc dynamics. • Chopper circuit is on the secondary (Isolated)

side of mains transformer, hence immune from supply voltage spikes

• Higher OCV, hence can be used with longer cables.

• High efficiency (>75%) & Power Factor (>0.9) • Hence low input currents as compared to

conventional power sources.

4. SILENT CHALLENGER MULTI 2X301:

This is the engine driven welding set which can be used by two welders simultaneously for multi welding processes like SMAW, GMAW, FCAW, GTAW etc. It is basically chopper based, high frequency power source which delivers welding power in CC or CV mode as required for different welding processes.

It is powered by 4 cylinder 45 BHP diesel engine and meets the requirement of CPCB norm.

Salient Features • It is the only double operator ED set which

complies CPCB Emission and Noise norms vide GSR 371(E) dated 17th May’2002 with noise level of 75 decible measured at 1 mtr from the set.

• Unique Brushless welding generator of it’s kind. Maintenance free as no windings, commutator on the rotor assembly.

• Maintenance free Brushless type generator with Chopper based current control, resulting excellent welding performance even with extra long cable lengths.

• It has multi welding processes capabilities and basically designed for cross country pipeline welding applications using SMAW and GMAW / FCAW processes with self shielded wire

• Significant savings per day per set on fuel consumption account (upto Rs. 1800/- per day per set)

• Single bearing, closed coupled type construction with life–long stainless steel flexible coupling arrangement. No component on the rotor, can fail prematurely. This feature makes these machines an ideal choice for cross-country pipeline welding.

• 18 KVA, 3 Phase, 415 volts and 8 KVA, 1 Phase Auxiliary Power source provided as standard feature. This enables Customer to use more nos. of tools at a time, reduces grinding time and edge preparation time for pipes. Also single phase auxiliary power source can be used simultaneously while welding is in progress.

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3. We are also the largest suppliers of Flares for steel Industry, our esteemed customers include : • Tata Steel • Visakhapatanam Steel Plant • Essar Steel • Kalyani Steel • Mukand Steel • Maheshwari Ispat Ltd. • Ramswarup Loh Udyog Ltd. • SJK Steel • Malvika Steel We have recently received an order for two numbers of Flares for Coke Oven gas and BF gas from IISCO

Burnpur for their expansion project.

PROJECT ENGINEERING BUSINESS(NEW DEVELOPMENTS)

1. FLARE SYSTEM AT JANA KSA: Flare is an equipment used to safely burn industrial

waste gases such as Hydrocarbons, BF gas etc.in an environment friendly manner. Ador has supplied flare system in Jubail Chemical Industries – Kingdom of Saudi Arabia and successfully commissioned the system on 18th September 2008.The flare system is self supported, 40mtr height, 14” stainless steel Tip and High Energy Ignition panel for auto start – up.

2. MOLECULAR SEAL: Molecular seal for BINA Refinery- Molecular Seal is safety seal to prevent gas –

air mixture formation in stack reducing risk of explosion. Large molecular seal made out of SS316L is supplied from Chinchwad plant PEB shop to BINA Refinery in January 2009.

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DIRECTORS’ REPORTTo

The Members,

The Directors have pleasure in presenting the Fifty-Sixth Annual Report of the Company and the Audited Statement of Accounts for the year ended 31st March 2009.

1.0 Financial Performance (Rs. in Crore)

Sr. No.

Key Financial Indicators For the year ended 31st March, 2009

For the year ended 31st March, 2008

1.1 Sales & other Income (Net of Excise Duty, Discounts & Incentives) 226.19 263.78

1.2 Profit before Interest and Depreciation 37.09 45.63

1.3 Profit before Tax (PBT) 21.83 31.42

1.4 Provision for Tax (Net of deferred tax) 9.26 8.50

1.5 Profit after Tax (PAT) 12.57 22.92

1.6 Capital Expenditure 15.14 33.62

1.7 Capital – work in progress 9.96 3.59

2.0 Dividend and Reserves

2.1 The Board of Directors is pleased to recommend a Dividend of 40% (i.e. @ Rs.4/- per Equity Share) for the financial year 2008–09, subject to the approval of the Members. Dividend for the previous financial year 2007–08 was declared @ 80% (i.e. @ Rs.8/- per Equity Share).

2.2 The Dividend for the financial year 2008-09 shall be paid to those Shareholders and Beneficial Owners whose names appear on the Register of Members as on the date of the Book closure for Dividend payment.

2.3 The Board recommends transfer of Rs.8.00 Crore (Rs.10.00 Crore)* to the General Reserve, and the balance of Rs.4.75 Crore (Rs. 6.96 Crore)* for retention in the Profit & Loss Account.

(* Figures in brackets indicate Previous Year).

3.0 Operations

In the financial year 2008-09, there was a drop of about 15% in the operational & other income. The year ended with an operational & other income of Rs.226.19 Crore (Rs. 263.78 Crore)*.

The Company’s Sales and income during the financial year 2008-09 comprised of the following:

3.1 Welding Consumables at Rs.165.17 Crore (Rs.168.74 Crore)*

3.2 Equipment & Project Engineering at Rs.58.67 Crore (Rs. 91.81 Crore)*

3.3 Other Income at Rs.2.36 Crore (Rs.3.24 Crore)*

(* Figures in brackets indicate Previous Year).

4.0 Domestic Business

4.1 Welding Consumables

There was a small drop in the revenues from Consumables business because of the slow-down in the economy and the fall in prices of materials. It is expected that in the later part of this year, the growth rate will start picking-up and the business prospects will improve. The execution of the new production line for submerged arc fluxes, which was delayed due to exigencies in the last year, will be completed and commissioned for production by September 2009.

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4.2 Welding Equipment, Project Engineering and Power Generators.

The Equipment business dropped sharply due to the capital investment curtailment by the industry. However, the project business grew because of the executions on-hand and the orders in the pipeline. The Project business prospects for the current year look particularly bright with orders already booked worth Rs.18 Crore. The power generators and Alternator business is likely to take-off this year, with the conclusion of contract with local Engine suppliers and the approvals of the proto sets by Regulatory Authorities as well as by the customers.

5.0 Exports During the year under review, there has been a

decline in our exports compared to the previous year. The Export Income during the financial year 2008-09 was at Rs. 32.76 Crore (Rs. 34.64 Crore)*.

Since our main exports have been to the Oil producing Gulf countries, the slow-down in the oil-based economies in these countries has adversely affected our business. We are in the process of restructuring our business in countries of Middle East / Gulf / Africa and some of the South East Asian nations, with an effective distribution system with pre & post sales supports to the customers / end users.

(* Figures in bracket indicate Previous Year).

6.0 CAPEX Our CAPEX Programme was in various stages

of implementation during the FY 2008 – 09. We completed CAPEX of Rs.15.14 Crore and Rs.9.96 Crore is in various stages of progress. The entire CAPEX programme of FY 2008-09 shall be completed by end of September 2009.

For the FY 2009-10, the CAPEX has been restricted to Rs.6.00 Crore mainly for –

(a) Replacement / Refurbishment of obsolete machinery,

(b) Machineries / equipments required by TDC’s for development of new products, etc.

7.0 Directors’ Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby confirm that:

7.1 In the preparation of the Annual Accounts, all the applicable Accounting Standards have been followed.

7.2 The Directors have selected such accounting policies & applied them consistently and made judgments & estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the Company as at the end of the financial year and of the profits of the Company for that period.

7.3 The Directors have taken proper & sufficient care for maintenance of adequate accounting / Statutory records in accordance with the provisions of the Companies Act, 1956, for safeguarding the Assets of the Company and for preventing / detecting fraud & other irregularities.

7.4 The Directors have prepared the Annual Accounts on a going-concern basis.

8.0 Technology Development Centers

The Company has 2 (two) Technology Development Centers (TDCs’) at Silvassa in the UT of Dadra & Nagar Haveli and at Chinchwad (Pune) in Maharashtra for consumables and Equipment respectively, which are recognized by the Department of Scientific and Industrial Research, Government of India. These (TDCs’) continue to pursue their goals, with renewed vigour, in terms of innovations, upgradations, improvements and cost reductions. These TDCs’ regularly interact with the market / users for improving the competitive features and performances of the Company’s products.

9.0 Directors

9.1 During the FY 2008-09 the following changes occurred in the composition of the Board of Directors of the Company:

a) Mr. R. R. Vora, Director, resigned from the Board. His resignation was taken on record in the Meeting of the Board of Directors held on 29th April, 2008. Mr. Vora was appointed as Director on the Board on 28th of March, 2005 and was on the Board for about 3 years. We are grateful for his valuable advice & guidance and appreciate his

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contribution towards the Company’s growth and prosperity.

b) Mr. G. L. Mirchandani, Director, retired from the Board on attaining superannuation at the age of 65 years on 11th June, 2008, and thus ceased to be a Director of the Company. Mr. G. L. Mirchandani was appointed as Director on 15th June, 2001 and was on the Board of the Company for about 7 years. We are grateful for his valuable advice & guidance and appreciate his contribution towards the Company’s growth and prosperity.

c) Mr. V. G. Kutty, Managing Director, opted to retire prematurely from the Board on 18th October, 2008 due to health problems. He was employed with the Company for nearly four decades in various capacities and was the Managing Director for more than four years.

We are grateful for his valuable advice & guidance and for steering the Company ahead during turbulent times. We sincerely appreciate his contribution towards the Company’s growth & prosperity.

d) Mr. R. N. Sapru and Mr. K. Digvijay Singh joined the Board of Directors as “Additional Directors” with effect from 19th October, 2008 and 01st February, 2009 respectively. They joined the Board in place of Mr. R. R. Vora & Mr. G. L. Mirchandani, respectively. As Additional Directors, the said Directors are liable to retire at the forthcoming Annual General Meeting. The Company has received Notices in writing from Members proposing their candidature to the Office of Directors of the Company. In the interest of the Company’s continued prosperity and well-being, the Board recommends their re-appointments at the forthcoming Annual General Meeting.

e) On premature retirement of Mr. V. G. Kutty as the Managing Director, the Board of Directors in its meeting held on 18th October, 2008 appointed Mr. Raman Kumar, the then President & CEO, as an Additional Director and designated him as the Managing Director of the Company with effect from 19th October, 2008 for a period of 3 years. As an Additional Director, Mr. Raman Kumar is liable to retire at the forthcoming Annual General Meeting. The Company has received a Notice in writing from a Member proposing his candidature to the Office of Director of the Company. In the interest of the Company’s continued prosperity and well-being, the Board recommends his re-appointment at the forthcoming Annual General Meeting.

f) Ms. A. B. Advani has been reappointed as the Executive Chairman of the Company with effect from 01st May, 2009 for a period of 5 years.

The above appointments are subject to the approval of the Members at the ensuing Annual General Meeting of the Company.

9.2 Mr. J. N. Hinduja, Mr. Anil Harish, Mr. M. K. Maheshwari, Directors of the Company, retire by rotation, as per the Articles of Association of the Company and are eligible for re-appointment.

9.3 The Board of Directors has received Form DD-A from all the above named Directors, as prescribed under the Companies Disqualification of Directors (under Section 274(1)(g) of the Companies Act, 1956) Rules, 2003, informing the Company that they are not disqualified under Section 274(1)(g) of the Companies Act, 1956.

10.0 Fixed Deposits

The Company has neither accepted nor renewed Fixed Deposits in the financial year 2008-09.

11.0 Insurance

The properties / assets of the Company are adequately insured.

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12.0 Energy Conservation, Technology Absorption & Foreign Exchange

The information required under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption & foreign exchange earnings / outgo is appended hereto as Annexure - I and forms part of this report.

13.0 Corporate Governance

As per the Listing Agreements executed with the Stock Exchanges, the Company has been following the Corporate Governance Code from the Financial Year 2001–02 onwards. The Company has successfully complied with all the requirements of the Corporate Governance as per Clause 49 of the Listing Agreement and a separate Report is attached herewith to this Report as Annexure - II.

The Corporate Governance Compliance Certificate obtained from M/s. Dalal & Shah, Chartered Accountants, Mumbai, the Statutory Auditors of the Company, is also attached to this Report.

The Management Discussion and Analysis Report, as mandated under the Code of Corporate Governance, is also attached to the Directors’ Report as Annexure - III.

14.0 Auditor’s Report

There are no qualifications contained in the Auditors’ Report, except the following, for which explanations are to be provided for in this report:

The reconciliation with respect to the provident fund account will be completed by end of June 2009 and the necessary entries would be passed & the necessary payments, if any, would be made in the month of June 2009 itself.

15.0 Auditors The Company’s Statutory Auditors, M/s. Dalal &

Shah, Chartered Accountants, Mumbai, retire and are eligible for re-appointment.

In view of the implementation of ERP Solutions and e-connectivity with all the locations of the

Company, it has been decided not to appoint separate branch auditors. M/s. Dalal & Shah, Chartered Accountants, Mumbai, will therefore, be the Statutory Auditors of the Company for the Financial Year 2009-10 on pan-India basis subject to the approval of the Members.

16.0 Employees

16.1 The industrial relation in all the Plants and Offices of the Company continues to be harmonious, cordial & peaceful.

16.2 The information required in terms of Section 217 (2A) of the Companies Act, 1956, read with Companies (particulars of Employees) Rules, 1975 forms part of this report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this Annual Report is being sent to all the Members of the Company excluding the said statement of particulars of Employees (which is available for inspection by any Member at the Registered Office of the Company during working hours upto the date of the Annual General Meeting). Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

16.3 The manpower strength of the Company as at the date of this report is 729.

17.0 Acknowledgement

Your Directors take this opportunity to place on record their warm appreciation for the invaluable contribution given and the spirit of dedication shown by the employees at all levels during the financial year 2008-09. The Directors also express their deep gratitude for the business assistance, co-operation and support extended to your Company by its Customers, Distributors, Dealers, Suppliers / Service Providers, Bankers, various Government Organisations / Agencies, & Shareholders and look forward to their continued support & co-operation in future also.

For and on behalf of the Board

Place : MumbaiDate : 30th May, 2009

A. B. AdvaniExecutive Chairman

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ANNEXURE I - TO THE DIRECTORS’ REPORTDISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO AS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE BOARD OF DIRECTORS’ REPORT) RULES, 1988.A) Conservation of Energy The Company is not covered under the list of Specified Industries. However, the required energy conservation measures

have already been taken to ensure optimum power consumption to the extent necessary. All the Consumable Plants of the Company have been certified by DNV for their Environmental Management Systems as per ISO 14001. All the Plants of the Company also adhere to the guidelines of the respective State Pollution Control Boards.

B) Technology Absorption The Disclosure of particulars with respect to Absorption of Technology, Research & Development (R&D) is given below as

per prescribed format in Form B:FORM B

a) Research and Development (R&D) 1.0 Specific areas in which R&D carried out by the Company: 1.1 Manual Metal Arc Welding Electrodes and Consumables. a) Special Purpose Electrodes for critical applications. b) Welding Fluxes for special / critical applications. 1.2 New range of Welding Equipment. 1.3 Welding Automation Products and Systems. 1.4 Alternators for Power Generators. 2.0 Benefits derived as a result of the above R&D: 2.1 Customised application oriented products. 2.2 Import substitution of products. 2.3 Updation in product quality. 2.4 Development of new products. 2.5 Cost reduction in the existing range of products. 2.6 Enlarged choices for customers in Welding Consumables and Equipment. 2.7 Standardization of input materials.

3.0 Future Plan of Action: 3.1 Continuous updating of the existing equipment, consumable ranges and technologies. 3.2 Introduce additional product features to meet customers’ specific needs. 3.3 Introduce new product and manufacturing process technologies of International Standards. 3.4 Continuously improve the performance efficiency of existing products. 3.5 Continue to work on reduction of cost of products and develop customized products for domestic &

overseas markets. 4.0 Expenditure on R&D:

4.1 Capital Rs. 0.01 Crore (Rs. 0.05 Crore)*4.2 Recurring Rs. 0.78 Crore (Rs. 1.22 Crore)*4.3 Total Rs. 0.79 Crore (Rs. 1.27 Crore)*4.4 Total R&D expenditure as a percentage of total Turnover 0.35% (0.48%)*

b) Technology Absorption, Adaptation and Innovation: 1.0 Efforts in brief made towards the technology absorption, adaptation and innovations: The Company has made rigorous efforts on improvements in designs through innovations, material

substitutions, process improvements and import substitutions. 2.0 Benefits derived as a result of the above effort: The Company’s above efforts have resulted in several benefits - such as product improvement &

development, providing user-friendly products to the customers and substitution of imported products by indigenous products.

3.0 Technology imported during the last 5 years: NILC) Foreign Exchange Earnings and Outgo The information in foreign exchange earnings and outgo is given below: Foreign exchange earnings: Rs. 32.76 Crore (Rs.34.64 Crore)* Foreign exchange outgo: Rs. 13.78 Crore (Rs.15.91 Crore)* (* Figures in bracket indicate Previous Year).

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ANNEXURE II - TO THE DIRECTORS’ REPORT

CORPORATE GOVERNANCE REPORTThe detailed Report on Corporate Governance as per the format prescribed by SEBI and incorporated in Clause 49 of the Listing Agreement is set out below. In this report, we confirm the compliance of the Corporate Governance criteria as required under Clause 49 of the Listing Agreement.

A) MANDATORY REQUIREMENTS

1) Company’s Philosophy on the Code of Corporate Governance

The Company believes that sound corporate practices based on transparency, accountability and high level of integrity in the functioning of the Company is essential for the long term enhancement of the shareholders / stakeholders value & interest. The Company believes that its actions must result in enhancing corporate performance by maximizing shareholders / stakeholders value and also result in motivated work force. We, as a Company, have always focused on good Corporate Governance practices, which is a key driver of sustainable corporate growth and long-term value creation for our shareholders.

2) Board of Directors

Composition and Number of Meetings held:

The strength of the Board of Directors is 12 (twelve) consisting of 2 (two) Executive/Whole-time Directors and 10 (ten) Non-Executive Directors.

The Meetings of the Board of Directors are generally held at the Registered Office of the Company in Mumbai. The Meetings are scheduled well in advance and the notice of each Board Meeting is given in writing to each Director about 8 to 10 weeks before the scheduled date of the Meeting. The Board of Directors meets generally once in a quarter primarily to review the quarterly performance and financial results amongst other things.

The Company Secretary in consultation with the Executive Chairman and the Managing Director prepares detailed agenda for the Board Meetings. All the necessary papers along with annexures, explanatory notes, etc., if any, are circulated along with the agenda to all the Directors about 7 to 10 days in advance. The Board Members are also free to recommend inclusion of any other matter in the agenda for discussion in the Board Meeting.

During the financial year 2008-09 under review, 4 (four) Board Meetings were held i.e. on 29th April 2008, 29th July 2008, 18th October 2008, and 31st January 2009.

The composition of the Board of Directors, attendance at the Board Meetings held during the year and at the last Annual General Meeting, number of Directorships in other Companies and Memberships of committees across various Companies in which the Director is a Member / Chairman are given below:

Sr. No.

Name of the Director Category of Directorship

Financial Year 2008 - 09Attendance at

As on March 31, 2009

Board Meetings

Last AGM (held on 29th July,

2008)

No. of other Directorships

#

Committee PositionsNo. of

Memberships @Chairman

1 Ms. A. B. Advani Executive 4 Present 2 NIL NIL2 Mr. Raman Kumar^ Executive 1 N A NIL NIL NIL3 Mrs. N. Malkani Nagpal Non-Executive 4 Present 3 3 24 Mr. R. A. Mirchandani Non-Executive 4 Present 2 2 1

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Sr. No.

Name of the Director Category of Directorship

Financial Year 2008 - 09Attendance at

As on March 31, 2009

Board Meetings

Last AGM (held on 29th July,

2008)

No. of other Directorships

#

Committee PositionsNo. of

Memberships @Chairman

5 Mr. A. T. Malkani Non-Executive 4 Present 2 1 NIL6 Mr. D. A. Lalvani Non-Executive 4 Present 2 1 NIL

7 Mr. J. N. HindujaIndependent & Non-Executive 2 Present NIL NIL NIL

8 Mr. Anil HarishIndependent & Non-Executive 4 Present 14 9 4

9 Mr. M. K. MaheshwariIndependent & Non-Executive 4 Present 8 5 NIL

10 Mr. P. K. GuptaIndependent & Non-Executive 3 Absent NIL NIL NIL

11 Mr. R. N. Sapru^Independent & Non-Executive 1 NA NIL NIL NIL

12 Mr. K. Digvijay Singh^^Independent & Non-Executive – NA NIL NIL NIL

13 Mr. V. G. Kutty* Executive 3 Present NA NA NA

14 Mr. G. L. Mirchandani**Independent & Non-Executive 1 NA NA NA NA

# Excludes Directorships in Foreign Companies, Private Limited Companies and Charitable Companies, if any. @ Memberships in Audit Committee and Shareholders/ Investors’ Grievance Committee * Retired prematurely on 18th October 2008 ** Retired / superannuated on 11th June 2008 ^ Appointed w. e. f. 19th October 2008. ^^ Appointed w. e. f. 01st February 2009

Mr. V. G. Kutty had in his letter dated 09th October, 2008, to the Board expressed his desire to prematurely retire from the Board with effect from 18th October, 2008 (after working hours) due to heath problems. The Board noted the decision of Mr. V. G. Kutty to retire prematurely and regretfully accepted the same. The Board thereafter put on record the distinctive and meritorious services rendered by Mr. V. G. Kutty during his tenure with the Company in various capacities for about four decades.

The Remuneration Committee recommended the name of Company’s President & CEO Mr. Raman Kumar as successor of Mr. V. G. Kutty. Mr. Raman Kumar is a Graduate Electrical Engineer and a Post Graduate in Business Management. He has rich experience in Strategic Management, Corporate Management, Operations Management, Sales and Marketing Management, Technology Management, Quality Management, Business / Technology Collaborations. He has been working with the Company in various capacities for over three decades.

The Board of Directors w.e.f. 19th October, 2008, inducted Mr. R. N. Sapru in place of Mr. R. R. Vora, as an Additional Director of the Company. Mr. R. N. Sapru, aged 47 years, is Commerce Graduate & an MBA. He has been with Executive Access (India) Pvt. Ltd. since March 2009. Earlier, he spent nearly 3 years in India & in Hong Kong with The EAL Consulting India Pvt Ltd., a wholly owned Company of the Executive Access Group, Hong Kong, a leading Asiapac HR Consulting and Executive Search firm. Prior to this, he spent about 3 years with EIH Ltd (The Oberoi Group of Hotels) as CEO for the Groups Travel Related business - Mercury. Earlier, he spent nearly 4 years in the Television broadcast industry

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with companies like GE (CNBC), SAB TV and Reliance Entertainment. Mr. R. N. Sapru commenced his career as a banker in 1985 and worked with HSBC for over 10 years prior to joining GE Capital. He was subsequently transferred internally to another GE Company, IGE India as CEO.

The Board of Directors w.e.f. 01st February, 2009, inducted Mr. K. Digvijay Singh in place of Mr. G. L. Mirchandani, as an Additional Director of the Company. Mr. K. Digvijay Singh has 30 years of experience of which 17 years (1992-2009) have been as President, CEO, Group CEO, and Director in TV, Print and New Media firms.

Mr. K. Digvijay Singh, 50, is a member of the top management team at Nimbus Sport working on media and sponsorship rights and production of live TV coverage around international sporting events, including international cricket and English Premier League football. Earlier, as Executive President of Zee Telefilms Ltd., India (1992-95) and as CEO Zee TV International & Managing Director Zee UK/Europe (1996-97), he was part of the start-up team that launched Zee TV and drove growth internationally across India, the UK, Africa and USA. As Group CEO of the Indian Express Group of Newspapers (1998-2000), and subsequently as CEO Internet Company of India Ltd. (2000-01), he was involved with the newspaper and new media businesses. Mr. K. Digvijay Singh started his career at Unilever India, with 10 years in detergent sales and brand-management.

He is an Economics (Honors) graduate from St. Stephens’ College, Delhi University, and Business Management post-graduate from XLRI, Jamshedpur.

None of the Directors is a Member of more than 10 (ten) Board Committees or a Chairman of more than 5 (five) such Committees as required under the Clause 49 of the Listing Agreement. The same is also evidenced from the above table.

None of the above-referred Independent Directors have any material pecuniary relationship or transactions with the Company, its Promoters or with its Management, which would affect the independence or judgement of the Directors. The Company has also not entered into any materially significant transactions with its Promoters, Directors or their relatives or with the Management, etc. that may have potential conflict with the interest of the Company at large.

The following information is generally provided to the Board of Directors:

• Annual operating plans & budgets and any updates thereon.

• Capital budgets and any updates thereon.

• Quarterly unaudited results of the Company and its operating divisions or business segments.

• Minutes of Meetings of Audit Committee and other committees of the Board.

• The information on recruitment and remuneration of senior officers just below the Board level.

• Show cause, demand, prosecution notices and penalty notices, which are materially important.

• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.

• Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company.

• Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.

• Details of any joint venture or Collaboration Agreement.

• Transactions that involve substantial payment towards Goodwill, Brand Equity or Intellectual Property.

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• Any significant development in Human Resources / Industrial Relations front like implementation of Voluntary Retirement Scheme, etc.

• Sale of material nature of investments, subsidiaries, assets, etc. which is not in the normal course of the business.

• Quarterly details of Foreign Exchange exposures and the steps taken by Management to limit the risks of adverse exchange rate movement, if material.

• Non-compliance of any regulatory, statutory or Listing requirements and shareholders service such as non-payment of dividend, delay in share transfer, etc.

• Risk assessment of the business.

The Board of Directors is routinely provided with all the information under the above referred heads, whenever applicable and materially significant. These are submitted either as a part of Agenda papers or are tabled in the course of the Board Meeting.

Code of Conduct:

The Board of Directors has laid down / adopted a Code of Conduct for all the Board Members and Senior Management of the Company. The Code of Conduct has also been posted onto the website of the Company – www.adorwelding.com. All the Board Members and Senior Management personnel have affirmed compliance with the Code of Conduct for the financial year 2008 - 09.

3) Audit Committee

Broad Terms of Reference:

The Committee reviews and ensures that financial statements are correct, sufficient and credible particularly with reference to the requirements as enumerated under Clause 49 of the Listing Agreement, to the extent applicable.

In order to effectively discharge their responsibility, the Audit Committee Members have been empowered:

• To investigate any activity within its terms of reference. • To seek information from any employee of the Company. • To obtain outside legal or other professional advice. • To secure attendance of the outsiders with relevant expertise, if it considers necessary. • To invite Statutory / Internal Auditors.

Composition, Number of Meetings and Attendance:

During the financial year 2008-09 under review, 4 (four) Audit Committee Meetings were held on 29th April 2008, 29th July 2008, 18th October 2008, and 31st January 2009.

On 29th April, 2008, the Board of Directors of the Company took on record the resignation tendered by Mr. R. R. Vora as a result of which he ceased to be a Member of the Audit Committee of the Company.

The Company Secretary acts as the Secretary of the Audit Committee.

It is the prerogative of the Audit Committee to invite Senior Executives, whom it considers appropriate to be present at the Meeting. Almost in all the Audit Committee Meetings, Senior Executives and Auditors of the Company were invited.

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The composition of the Audit Committee and attendance at its Meetings is given hereunder:

Sr. No.

Name of the Director Member

Position CategoryAttendance during

the FY 2008- 091 Mr. Anil Harish Chairman Independent & Non - Executive Director 42 Mr. R. A. Mirchandani Member Non - Executive Director 43 Mr. M. K. Maheshwari Member Independent & Non - Executive Director 4

The Minutes of each of the Audit Committee Meeting are placed before the Board of Directors and discussed in the Board Meeting.

4) Remuneration Committee

Broad Terms of Reference:

The Committee is vested with all the necessary powers and authority to ensure appropriate disclosure on the Remuneration of the Directors and to deal with all elements of the Remuneration package of all the Directors including but not restricted to the following:

• To review, assess & recommend the appointment and remuneration of Wholetime Directors.

• To review the remuneration package including the retirement benefits, payable to the Directors periodically and recommend suitable revision / increments, whenever required, to the Board of Directors.

Composition, Number of Meetings and Attendance:

During the Financial Year 2008 - 09 under review, 2 (two) Remuneration Committee Meetings were held on 29th April, 2008 and 18th October, 2008.

On 29th April, 2008, the Board of Directors of the Company took the resignation tendered by Mr. R. R. Vora on record, as a result of which he ceased to be a Member of the Remuneration Committee.

Mr. G. L. Mirchandani superannuated on 11th June, 2008 on attaining the age of 65 years, pursuant to clause 104 (c) (ii) of the Articles of Association of the Company, and thus ceased to be a Member of the Remuneration Committee.

On 29th April, 2008, the Remuneration Committee was reconstituted by the Board of Directors by inducting Mr. D. A. Lalvani in place of Mrs. N. Malkani Nagpal. Mr. D. A. Lalvani is a Commerce Graduate, from H. R. College of Commerce, Mumbai, with a distinction in Marketing and Advertising. He has done his Masters in Commerce with specialisation in Accounting. He has also done courses on International Business Strategy and Business Analysis & Valuations at London School of Economics, UK and also in Financial Planning & Basics in Derivatives. He has completed his MBA from Manchester Business School. He has worked with Langham Capital, London (Financial advisory firm focusing on M&A), DHL Europe & Penny – on (UK) (an NGO). He has hands on experience of over 7 (seven) years with many reputed National & International firms.

In the Meeting held on 18th October, 2008 the Committee elected Mr. M. K. Maheshwari as its Chairman. Mr. M. K. Maheshwari is 51 years of age and is a second-generation entrepreneur with interests in the Information Technology, Marketing and Chemical Industries. He is a graduate from the Bombay University with a major in Chemistry and has done his post graduation in Industrial Management. Mr. Maheshwari’s work experience encompasses the project management, production, marketing, financial and general management areas of medium sized companies and is on the Board of several public & private companies as an Executive and Independent Non-Executive Director.

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The Company Secretary acts as the Secretary of the Remuneration Committee.

The composition of the Remuneration Committee and attendance at its Meetings is given hereunder:

Sr. No.

Name of the Director Member

Position CategoryAttendance during the FY 2008-09

1 Mr. M. K. Maheshwari Chairman Independent & Non - Executive Director 22 Mr. Anil Harish Member Independent & Non - Executive Director 23 Mr. D. A. Lalvani^ Member Non - Executive Director 14 Mr. G. L. Mirchandani** Ex-Chairman Independent & Non - Executive Director 1

5 Mrs. N. Malkani NagpalMember &

Ex-ChairmanNon - Executive Director 1

^w.e.f. 29th April, 2008. **Retired / superannuated on 11th June, 2008.

Remuneration to the Executive Directors:

The remuneration of the Whole-time / Executive Director(s) is decided by the Remuneration Committee based on the criteria such as industry benchmarks, the Company’s performance vis-à-vis the Industry performance / track record of the Whole-time / Executive Director(s) and the same is reported to the Board of Directors. The Company pays remuneration by way of salary, perquisites & allowances (fixed component) to all its Whole-time / Executive Directors and commission (variable component) to all its Whole-time / Executive Directors at a maximum of 1% of the net profits of the Company as specifically computed for this purpose as per the provisions of the Companies Act, 1956 (as amended from time to time) such that the total remuneration (including commission / ex-gratia / bonus) as decided by the Board in its absolute discretion, does not exceed the limits prescribed in Section 198 and 309 of the Companies Act, 1956. Annual increments are decided by the Remuneration Committee within the salary scale approved by the Shareholders at the Annual General Meeting and are effective as per their individual Agreements. These terms of remunerations are approved by the Shareholders.

Remuneration to the Non-Executive Directors:

The Non-Executive Directors are paid a total Commission upto a maximum of 1% of the net profits of the Company as specifically computed for this purpose as per the provisions of the Companies Act, 1956, (as amended from time to time) proportionately. The Non-Executive Directors are also paid a sitting fee of Rs.10,000/- for attending every Meeting of the Board of Directors, Rs.8,000/- for attending every Meeting of the Audit Committee, Rs.5,000/- for attending every Meeting of the Shareholders / Investors’ Grievance Committee and Rs.5,000/- for attending every Meeting of the Remuneration Committee.

The details of the remuneration paid / payable to all the Directors during the Financial Year 2008 – 09 is given below: -

(Rs. in lacs)

Sr. No.

Name of the Director SalaryBenefits

(perquisites)Commission

Sitting Fees @

Total

1 Ms. A. B. Advani 58.48 5.28 23.88 – 87.642 Mr. Raman Kumar 41.78 0.21 10.73 – 52.723 Mrs. N. Malkani Nagpal – – 2.71 0.97 3.684 Mr. R. A. Mirchandani – – 2.71 0.92 3.635 Mr. A. T. Malkani – – 2.71 0.92 3.63

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The details of the remuneration paid / payable to all the Directors during the Financial Year2008 – 09 is given below: - (Contd.)

(Rs. in lacs)Sr. No.

Name of the Director SalaryBenefits

(perquisites)Commission

Sitting Fees @

Total

6 Mr. D. A. Lalvani – – 2.71 0.97 3.687 Mr. J. N. Hinduja – – 2.71 0.20 2.918 Mr. Anil Harish – – 2.71 0.82 3.539 Mr. M. K. Maheshwari – – 2.71 0.82 3.5310 Mr. P. K. Gupta – – 2.71 0.30 3.0111 Mr. R. N. Sapru – – 1.23 0.10 1.3312 Mr. K. Digvijay Singh – – 0.44 – 0.4413 Mr. V. G. Kutty 35.86 1.62 13.15 – 50.6314 Mr. G. L. Mirchandani – – 0.54 0.15 0.69

Total 136.12 7.11 71.65 6.17 221.05

@ As a Member / Invitee, wherever applicable.

Notes:

• The Agreement with the Executive Chairman is for a period of Five years. Either party to the Agreement is entitled to terminate the Agreement by giving notice as mentioned in their respective agreements to the other party.

• The Agreement with the Managing Director is for a period of Three years. Either party to the Agreement is entitled to terminate the Agreement by giving notice as mentioned in their respective agreements to the other party.

• According to the Articles of Association of the Company all the Directors, except the Managing Director, retire by rotation.

• Presently, the Company does not have any stock option scheme or performance linked incentive scheme for its Directors (other than the Commissions / ex-gratia / bonus payable to them as explained in above paragraphs).

5) Shareholders / Investors’ Grievance Committee

Broad Terms of Reference / Functions of the Committee:

The Shareholders / Investors’ Grievance Committee of the Board looks into the redressal of investors complaints like non-receipt of Annual Report, dividend payments etc. and matters related to Share transfers, issue of duplicate share certificates, de-materialisation / re-materialisation of shares, transfer / transmission of Shares, other allied transactions and also delegates necessary powers to the executives of the Company to process transfers etc.

The status on various complaints received and replied is also reported to the Board of Directors as an Agenda item in every Board Meeting.

Composition, Number of Meetings and Attendance:

During the financial year 2008–09 under review, 4 (four) Shareholders / Investors’ Grievance Committee Meetings were held on 28th April, 2008, 28th July, 2008, 17th October, 2008, and 30th January, 2009.

Mr. R. A. Mirchandani was elected as the Chairman of the Committee in the meeting of Shareholders / Investors’ Grievance Committee held on 28th July, 2008. Mr. R. A. Mirchandani is a Commerce

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Graduate and has a Masters Degree in Business Administration (MBA) from The Queensland University of Technology, Australia. He is presently working as the Managing Director of M/s. Cryolor Asia Pacific Pvt. Ltd.

The composition of the Shareholders / Investors Grievance Committee and attendance at its Meeting is given hereunder:

Sr. No.

Name of the Director Member

Position CategoryAttendance during the year 2008-09

1 Mr. R. A. Mirchandani Chairman Non - Executive Director 42 Mrs. N. Malkani Nagpal Member Non - Executive Director 43 Mr. A. T. Malkani Member Non - Executive Director 44 Mr. D. A. Lalvani Member Non - Executive Director 4

The Minutes of each of the Shareholders / Investors’ Grievance Committee Meeting are placed before the Board of Directors and discussed in the Board Meeting.

Compliance Officer:

Mr. V. M. Bhide, the Company Secretary, has been designated by the Board of Directors as the Compliance Officer.

Details of shareholders complaints received & replied and the status on pending share transfers is given below:

The total number of complaints received and replied to the satisfaction of the shareholders during the Financial Year 2008– 09 were 17 (Seventeen).

There were no outstanding complaint/s as on 31st March, 2009.

There are no pending share transfers in physical as well as in demat category. All the requests received upto 31st March, 2009 for share transfers have been processed by the Registrar & Share Transfer Agent of the Company.

The Statement of Directors Shareholding is as under:

Sr. No. Name of the DirectorShareholding as on

March 31, 2009 May 30, 20091 Ms. A. B. Advani 91,480 2,53,3302 Mr. Raman Kumar 600 6003 Mrs. N. Malkani Nagpal 55,500 55,5004 Mr. R. A. Mirchandani 6,150 6,1505 Mr. A. T. Malkani 81,450 86,2636 Mr. D. A. Lalvani 2,584 3,3347 Mr. J. N. Hinduja – –8 Mr. Anil Harish – –9 Mr. M. K. Maheshwari – –10 Mr. P. K. Gupta – –11 Mr. R. N. Sapru – –12 Mr. K. Digvijay Singh – –

6) General Body Meetings Location and time of the last 3 (three) General Meetings of the Company is given below:

Sr. No. Financial Year Date Location Time1 2007-08 29th July, 2008 Walchand Hirachand Hall, Mumbai 12:00 Noon2 2006-07 26th July, 2007 Walchand Hirachand Hall, Mumbai 04:00 p.m.3 2005-06 22nd June, 2006 Walchand Hirachand Hall, Mumbai 12:00 Noon

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No special resolutions were moved at the last Annual General Meeting.

Dividend History:

Sr.No.

FinancialYear

Div% Type DividendOutflow(Amt.Rs.In Lacs)

Dividend Tax Outflow (Amt. Rs. In Lacs)

Total(Amt. Rs. In Lacs)

PAT(Amt. Rs. In Lacs.)

% of Div to PAT

A B C D E F (E+F) = G H G/H X 100 = I

1 2008-09 40$ Final 543.94 92.44 636.38 1,257.18 50.62

2 2007-08 80 Final 1,087.88 184.88 1,272.76 2,291.61 55.54

3 2006-07 120 Final 1,631.82 277.33 1,909.15 3,261.78 57.85

4 2005-06 150* Interim, Final & Special 2,039.77 286.08 2,325.85 4,020.37 44.42

5 2004-05 80# Final & Special 1,087.88 152.57 1,240.45 2,792.50 43.50

6 2003-04 25 Final 339.96 43.56 383.52 881.56 45.85

7 2002-03 25 Final 339.96 43.56 383.52 836.51 50.39

8 2001-02 22 Final 348.22 – 348.22 691.01 63.61

* Interim @ 50%, Final @ 50% & Special @ 50%

# Final @ 30% & Special @ 50%

$ subject to approval by the Members at the ensuing AGM

7) Corporate Social Responsibilities

The Company, as a Corporate Citizen of the Country, is well aware of its social obligations. It has always participated in social reformation activities mainly in the field of education and healthcare. It continuously participates to provide help to the needy ones for education, medical & during natural disasters. The Company continues to support the various social causes on a need basis.

As a good Corporate Citizen, the Company pays all the taxes, Government dues, cess, duties etc. well on time because it believes that payment of taxes and levies is a way of fulfilling its social responsibilities.

8) Disclosures

Materially significant related party transactions:

During the Financial Year 2008-09 under review, there were no materially significant related party transactions of the Company with its Promoters, Directors or the Management, their subsidiaries or relatives etc. that had a potential conflict with the interest of the Company at large.

Details of non compliance by the Company, penalties, strictures imposed on the Company by the Stock Exchange or Securities and Exchange Board of India (SEBI) or any Authority on any matter related to capital markets during the last three years:

The Company has complied with all the rules & regulations prescribed by the Stock Exchanges, SEBI and all other statutory authorities relating to the capital markets during the last three years. No penalties or strictures have been imposed by them on the Company.

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9) Means of Communication:

Half-yearly / Quarterly Financial Results - sent to each Shareholders residence NoIn which Newspapers Quarterly / Half Yearly / Annual Results are normally Published

Business Standard – English Mumbai Sakal – Marathi

Any website, where results or official news are displayed

www.adorwelding.com &www.sebi.gov.in

The presentation made to the Institutional Investors or to Analysts Yes, whenever requiredWhether Management Discussion & Analysis Report is a part of the Annual Report or not Yes

10) General Shareholder Information Annual General Meeting:

Day, Date and Time : Thursday, 30th July, 2009 at 03:30 pmVenue : Walchand Hirachand Hall, Indian Merchant Chambers,

Churchgate, Mumbai-400 020, Maharashtra, India.

Financial Year : 01st April, 2008 – 31st March, 2009Book Closure Date : Saturday 18th July, 2009 to Thursday 30th July, 2009Dividend Payment Day and Date

: Thursday 06th August, 2009

Financial Calendar for the year 2009 - 10

: Financial Reporting (unaudited) for the quarter ending June 2009 – by the end of July 2009

: Financial Reporting (unaudited) for the quarter endingSeptember 2009 – by the end of October 2009

: Financial Reporting (unaudited) for the quarter ending December 2009 – by the end of January 2010

: Financial Reporting (audited) for the year endingMarch 2010 – by the end of May 2010.

Listing :The name of the Stock Exchanges on which the Company’s securities are listed and the Company’s corresponding Stock Code is given below:

Name of the Stock Exchange Stock CodeThe Bombay Stock Exchange Limited (BSE), MumbaiThe National Stock Exchange of India Limited (NSE), Mumbai

517041ADORWELD

Market Price Data: High / Low during each month of the Financial Year 2008 - 09 is given hereunder:

Month High Low No. of Shares No. of TradesApril 2008 176.00 138.40 3,60,982 4,901May 2008 171.40 142.95 97,504 1,781June 2008 154.00 139.00 66,748 1,130July 2008 153.50 125.00 1,18,197 1,988August 2008 157.00 125.00 1,34,089 2,313September 2008 133.00 91.30 93,981 1,743October 2008 108.00 81.50 58,766 1,101November 2008 97.00 81.00 37,074 621

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Market Price Data: High / Low during each month of the Financial Year 2008 - 09 is given hereunder: (Contd.)

Month High Low No. of Shares No. of TradesDecember 2008 101.00 83.00 52,136 652January 2009 100.75 83.70 27,345 509February 2009 94.05 80.00 21,522 457March 2009 87.60 77.00 42,582 756

Source – The Bombay Stock Exchange (BSE), Mumbai

Performance in comparison to broad based indices such as BSE Sensex:

Share Transfer Agents: • The name of the Registrar and Share Transfer Agents (RTA) of the Company is ‘M/s Sharex Dynamic

(India) Pvt. Ltd.’ • The share transfer for both physical and electronic (demat) segment is handled by the Company’s

Registrar and Share Transfer Agent (RTA) M/s. Sharex Dynamic (India) Pvt. Ltd., at the following addresses:

Head Office:17/B, Dena Bank Building,2nd Floor, Horniman Circle,Fort, Mumbai – 400 001,Maharashtra, INDIAemail: sharexindia@vsnl.comweb: www.sharexindia.com

Branch Office:Unit No.1, Luthra Industrial Premises,Andheri Kurla Road, Safed Pool,Andheri (E), Mumbai – 400 072Maharashtra, INDIAemail: sharexindia@vsnl.comweb: www.sharexindia.com

Share Transfer System: • Shares lodged for transfer at the RTA of the Company are normally processed within a period

of 15 days from the date of lodgement, provided the documents are clear in all respects.

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All requests for dematerialisation of shares are processed and the confirmation is given to the depositories within 15 days. The Company Secretary and a couple of Senior Executives of the Company are empowered to approve the share transfers. Grievances and other miscellaneous correspondence on change of address, bank mandates, etc. received from Members are generally processed either by the Investors Service Department or by the RTA of the Company within 7 working days.

Distribution of shareholding as on 31st March, 2009:

Sr. No.

Range of ShareholdingNo. of

shareholders% of total

shareholdersNo. of shares

held% of total

shareholding1 1 - 100 8,741 48.95 5,01,435 3.692 101 - 200 4,058 22.72 6,46,009 4.753 201 - 500 4,138 23.17 12,05,544 8.874 501 - 1,000 525 2.94 4,12,575 3.035 1,001 - 5,000 327 1.83 6,83,575 5.036 5,001 - 10,000 30 0.17 2,25,895 1.667 10,001 - 1,00,000 31 0.17 11,34,527 8.348 1,00,001 and Above 7 0.04 87,88,907 64.63

T O T A L 17,857 100.00 1,35,98,467 100.00

Shareholding pattern (category wise) as on 31st March, 2009:

Sr. No.

Category No. of shares held % of total shareholding

1 Promoters 76,10,523 55.972 Mutual Funds 15,71,826 11.563 Banks / Financial Institutions 542 0.014 FII’s 89,997 0.665 NRIs / OCBs 4,84,829 3.566 Private Corporate Bodies 4,24,153 3.127 Resident Individuals & others 34,12,383 25.098 Clearing Members 4,214 0.03

T O T A L 1,35,98,467 100.00

Dematerialisation of shares and Liquidity:

• About 92.07% of the shares of the Company have been dematerialized as on 31st March, 2009.

• Trading in shares of ADOR WELDING LIMITED is permitted only in dematerialised form with effect from 08th May, 2000.

Statutory Compliance:

During the Financial Year 2008-09 under review, the Company has generally complied with all the applicable provisions, filed all returns, forms etc. & furnished all the relevant particulars as required under the Companies Act, 1956 and allied Acts/Rules, the Securities & Exchange Board of India’s (SEBI) Regulations and the Listing Agreements.

Outstanding GDR / ADR / Warrants or any convertible instruments, conversion date and its impact on equity: Nil

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Plant Locations:

The Company has the following manufacturing plants as of 31st March, 2009:

Chennai PlantMelakottiyur, via Vandalur,Chennai - 600 048.Tamil Nadu, INDIA

Silvassa PlantSurvey 59 / 11 / 1, Khanvel Road, Masat, Silvassa - 396 230.U. T. of Dadra & Nagar Haveli, INDIA

Raipur PlantIndustrial Estate, Billaspur Road,Raipur - (CG) - 493 221.Chattisgarh, INDIA

Chinchwad PlantAkurdi,Pune - 411 019.Maharashtra, INDIA

Pimpri Plant54-55, F-II Block MIDC, Pimpri, Pune 411 018.Maharashtra, INDIA.

Address for Correspondence: ADOR WELDING LIMITED Ador House, 6, K. Dubash Marg, Fort, Mumbai - 400 001. MAHARASHTRA, INDIA.

B) NON MANDATORY REQUIREMENTS

• Chairman of the Board:

The Company has an Executive Chairman and hence the requirement pertaining to reimbursement of expenses to a Non - Executive Chairman does not arise.

• Remuneration Committee:

The Company has a Remuneration Committee. Please refer item no. 4 under Mandatory Requirements for details.

• Shareholder Rights:

As the Company’s financial results are published in English newspaper having a wide circulation all over India and in a Marathi newspaper widely circulated in Mumbai (Maharashtra), the same are not sent to the shareholders of the Company, individually. The Company’s Quarterly / Half Yearly / Annual Audited Results are also posted on to the Company’s website and also on to the SEBI’s Website under EDIFAR (The same is also mentioned under item no. 9 of Mandatory Requirements).

• Audit Qualifications :

There are no qualifications in the Auditor’s Report.

• Training of Board Members :

The necessary training will be provided to the Board Members as and when required.

• Mechanism to evaluate Non-Executive Board Members :

The Board of Directors does not feel the necessity of evaluating the performance of its Non-Executive Directors as of now.

• Whistle Blower Policy:

The Company has not formulated a Whistle Blower Policy as of now.

26

ANNUAL CERTIFICATION BY MANAGING DIRECTOR PURSUANT TO CLAUSE 49 I D (ii) OF THE LISTING AGREEMENT

As the Managing Director of Ador Welding Limited and pursuant to Clause 49 I D (ii) of the Listing Agreement, I hereby declare and certify that all the Board Members and Senior Management personnel of Ador Welding Limited have affirmed compliance with the Code of Conduct adopted by the Company for the Financial Year 2008-09.

For ADOR WELDING LIMITED

Place : Mumbai Raman KumarDate : 27th May, 2009. Managing Director

AUDITOR’S CERTIFICATE ON CLAUSE 49 COMPLIANCETo the MembersAdor Welding LimitedAdor House,6, K. Dubash Marg,Fort, Mumbai – 400 001.

We have reviewed the records concerning the Company’s compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into, by the Company, with the Stock Exchanges of India, for the financial year ended 31st March, 2009.

The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

We have conducted our review on the basis of the relevant records and documents maintained by the Company and furnished to us for the review, and the information and explanations given to us by the Company.

Based on such a review, and to the best of our information and according to the explanations given to us, in our opinion, the Company has complied with the conditions of Corporate Governance, as stipulated in Clause 49 of the said Listing Agreement.

We further state that, such compliance is neither an assurance as to the future viability of the Company, nor as to the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Mumbai, 30th May, 2009

For and on behalf ofDALAL & SHAH

Chartered Accountants

Ashish DalalPartner

Membership No.: 33596

27

ANNEXURE III - TO THE DIRECTORS’ REPORT

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1.0 BUSINESS SCENARIO

The Company operates in the business environment prevailing in the domestic market and the neighbourhood export markets of the Middle East & Africa. Since globalization is taking roots across all markets, its impact on our business is quite natural. The global economic turbulence of the last year, in many ways affected our business – raw material prices, flow of capital and the melt-down in many businesses made impacts on our performance.

The second half of the last year was particularly difficult and continues to be so, albeit with a hint of recovery Notwithstanding this, we were able to show improved performance in HY2, over HY1 of last year due to an effective response to the challenges and the collective team-work of Adorians. It is expected that we will continue to improve upon our services and provide useful and customized solutions that will re-enforce our partnership with the customer.

The Current Year is expected to gradually improve and the economy is expected to attain a reasonable GDP growth level by the HY2 of this year. With the new Government formed on a clear mandate in the recent elections and the initial public pronouncements by the Prime Minister on invigorating the economy, business sentiments are getting buoyant. The emphasis on accelerating Infrastructure growth is a good augury for our business and we are fully geared to meet the requirements. Our new Flux-cored wire production line is fully operative. The new Submerged-arc Flux line will be operative very soon, after the necessary last stage erection & commissioning work and the environmental approvals are completed. The additional investments made to enhance the capability of the fabrication and assembly shops will enable us to handle a wider variety of jobs as well as substantially improve our throughput- thereby setting-up an opportunity for us to grow our project related business substantially.

2.0 SEGMENTWISE PERFORMANCE

This is already detailed in the Directors’ Report under para 3.0

3.0 OUTLOOK, CONCERNS & RISKS - and our RESPONSE

The global economic scenario is too complex to hazard a guess on which way it will move over the next year. However, it is our assessment that over the next half-year, the liquidity will continue to be tight and the revival of the economy in India will largely depend upon the global recovery and the response of the new Government to the challenges mitigating the growth in Indian Industry. It is expected that whatever positive and innovative measures that are initiated to accelerate the economy in the domestic market, will bear fruits on the ground level during the second half of the year.

The competition scenario, meanwhile, continues to be challenging. More international players are establishing bases in India and will challenge the market shares of existing players. Your Company is fully conscious of this and is prepared to continually hone its ability to provide customer solutions that will be cost-effective and qualitatively of a class that will delight the user. For this purpose, a very intense cost-cutting mission was put in place a few months ago and this is being further re-enforced.

The Company was a DEBT FREE Company as of 31st March, 2009 and has a sound financial management system. The implementation of ERP is going to strengthen the accounting and financial management systems which will help us to take any corrective action immediately. The Company’s debt free status will also enable it to raise adequate resources required for any expansion.

The Company has a very good compliance track record with all legal and statutory entities in the Country, and there is a regular audit mechanism to ensure that the Company does not violate any of the legal or statutory provisions applicable to the Company / Industry .

4.0 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company believes that internal control is

28

inherent to the principle of governance, and freedom of Management should be exercised within the framework of appropriate checks and restraints.

The Company has an adequate system of internal controls covering all financial and operating functions, which complies with the relevant provisions on ‘Internal Control’ under the Companies (Auditors) Report Order, 2003 and as prescribed under clause 49 of the Listing Agreement with the Stock Exchanges. These systems cover the following aspects of business processes & reporting:

• Financial propriety of business transactions • Accurate reporting of the financial

transactions as per the applicable Accounting Standards

• Efficient use and protection of resources of the Company

• Compliance with the established Company policies, guidelines and statutes.

The Internal Control systems are reviewed at regular intervals through Management, Internal & Statutory Audits and the same are modified or fine-tuned to blend with the changing business needs. The Company avails the services of professional Chartered Accountants to conduct Internal Audits at all the Business Units of the Company. Internal Audits help to test the adequacy, effectiveness and adherence to all internal controls laid down by the Management and suggest improvements, if any. The Audit Committee, consisting of Independent Directors, reviews the Internal Audit Reports and offers necessary guidance with respect to the adequacy & scope of the Internal Audits.

The Company has put in place ERP system for SCM functions-the ORACLE e-Business Suite version 12.0.4, duly implemented by Price Waterhouse Coopers, one of the most reputed implementation agencies in this field. After the hard work put in to adapt the system to our needs, and its understanding by our employees through a period of intense training/ re-training, we are happy to state that the Final Accounts submitted

to the Auditors for this year have been generated through the system and put-up to Auditors. It is our resolve to use the ERP system to substantially improve the SCM function in our manufacturing operations with the objective to improve the effectiveness of our Cost Reduction mission and for improved decision making.

5.0 FINANCIAL PERFORMANCE

An overview of the financial performance is already given in the Directors’ Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

6.0 MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

Adorians are the key assets of the Company. It is our constant endeavour to keep sharpening these assets and enable them to deliver the growth objectives. Initiatives from HRD are built around programmes that provide learning, skill upgrades and raise motivational levels to stimulate performances of good quality. Controlling the attrition of trained personnel to expanding market employment opportunities is also of prime concern to all HODs.

Safety and health of employees is a major area of focus for the HRD. At all manufacturing plants, the process to certify under OHSAS 18001 has been initiated. Certifications for ISO 14001-2004 are meticulously maintained through regular audits.

The Company continues to have harmonious relations with all its employees at all the locations. The employee strength as of 31st March, 2009 was 731.

Disclaimer :

The information and opinion expressed in this section of the Annual Report may contain certain forward looking statements, which the Management believes are true to the best of its knowledge at the time of its preparation. The Company and the Management shall not be held liable for any loss, which may arise as a result of any action taken on the basis of the information contained herein.

29

REPORT OF THE AUDITORS TO THE MEMBERS

We have audited the attached Balance Sheet of ADOR WELDING LIMITED, as at 31st March, 2009, the annexed Profit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 and the Companies (Auditor’s Report) (Amendment) Order, 2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books of the Company. The Branch Auditors’ Reports have been forwarded to us and have been appropriately dealt with in this Report;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company;

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;

(v) Based on the representations made by the Directors and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March, 2009, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) Without qualifying our opinion, we invite reference to Note No.7 (C) in Schedule ‘T’ to the Accounts, relating to appointment of additional director as the managing director, during the year, which is subject to approval of the shareholders at the ensuing annual general meeting;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For and on behalf ofDALAL & SHAH

Chartered Accountants

Ashish DalalPartner

Mumbai, 30th May, 2009 Membership No.: 33596

30

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS’ REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2009 OF ADOR WELDING LIMITED

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that :-

i. (a) The Company has generally maintained proper records showing particulars, including quantitative details and situation of its fixed assets;

(b) As explained to us, fixed assets, according to the practice of the Company, are physically verified by the management in a phased verification-programme, at intervals, which, in our opinion, are reasonable, looking to the size of the Company and the nature of its business. According to the information and explanations given to us, the discrepancies noticed on physical verification have been adjusted in the books of account;

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern;

ii. (a) As explained to us, inventories have been physically verified during the year by the management;

(b) The procedures explained to us, which are followed by the management for physical verification of inventories, are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records of the Company, we have to state that, the Company has, consequent to implementation of a new “Enterprise Resource Planning” (ERP) solution, experienced difficulties in maintaining and updating its inventory records. Physical quantities have formed the basis of valuation of closing inventories and book records for discrepancies have accordingly been adjusted.

iii. According to the information and explanations given to us, the Company has, during the year, not granted / taken any loan, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956;

iv. In our opinion and according to the information and explanations given to us, the management is in the process of deploying internal control procedures consequent to the implementation of its new ERP solution during the year. However, the internal controls with respect to the procedures followed for purchase of inventory, fixed assets and for sale of goods and services are generally adequate looking to the size of the Company and the nature of its business. During the course of our previous assessment, no major weakness in internal control system, had come to our notice;

v. (a) On the basis of the audit procedures performed by us, and according to the information, explanations and representations given to us, the particulars of contracts or arrangements in which directors were interested, and which were required to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered;

(b) In our opinion and according to the information and explanations given to us, with regard to the transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 and exceeding the value of rupees five lac in respect of any party during the year, we have to state that, sales were made at the prevailing market price. However in case of purchase, since the items were of specialized nature, the Company has not called for quotations, since, as explained to us, this would have resulted in parting of proprietory drawings with outsiders, which is not commercially advisable for the Company;

vi. The Company has, during the year, not accepted any deposits from the public;

vii. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal audit functions carried out by firms of Chartered Accountants appointed by the management, is commensurate with the size of the Company and the nature of its business;

viii. We have broadly reviewed the books of account

31

maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of the Company’s product to which the said rules are made applicable, and are of the opinion that, prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate;

ix. (a) According to the records of the Company, it has been generally regular in depositing undisputed statutory dues including Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other Statutory Dues with the appropriate authorities except for Provident Fund dues which include certain amounts under reconciliation, of which Rs.1,33,335/- is outstanding at the close of the year for a period exceeding six months from the date it became payable;

(b) On the basis of our examination of the documents and records, the disputed statutory dues not deposited with appropriate authorities are as under:

Nature of the Dues

Amount (Rs. in lacs)

Forum where dispute is pending

Excise Duty 95.93 Central Excise and Service Tax Appellate Tribunal

Sales Tax 23.15 High Court35.16 Sales Tax Departmental

Authorities There were no disputed dues towards income

tax, wealth tax, service tax, custom duty or cess during the year.

x. The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses, both, in the financial year under report and the immediately preceding financial year;

xi. On the basis of the records examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company has not obtained any borrowings from any financial institution or by way of debentures;

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities;

xiii. According to the information and explanations given to us, and the representations made by the management, the Company has not given any guarantee for loans taken by others from any bank or financial institution;

xiv. On the basis of the records examined by us and the information and explanations given to us, the Company has not obtained any term loan during the year;

xv. According to the information and explanations given to us and on an overall examination of the Financial Statements of the Company, we are of the opinion that, prima-facie, short term funds have not been utilized for long term investment;

xvi. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956;

xvii. On the basis of the records and documents examined by us, the Company has not issued any debentures during the year;

xviii. The Company has not raised any money by public issue, during the year;

xix. According to the information and explanations given to us, and to the best of our knowledge and belief, no significant fraud on or by the Company, has been noticed or reported by the Company during the year;

Looking to the nature of activities being carried on, at present, by the Company and also considering the nature of the matters referred to in the various clauses of the Companies (Auditor’s Report) Order, 2003 and the Companies (Auditor’s Report) (Amendment) Order, 2004, Clauses (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii) (f), (iii) (g), (xiii) and (xiv) of paragraph 4 of the aforesaid Order, are in our opinion, not applicable to the Company.

For and on behalf ofDALAL & SHAH

Chartered Accountants

Ashish DalalPartner

Mumbai, 30th May, 2009 Membership No.: 33596

32

BALANCE SHEET AS AT 31ST MARCH, 2009(Rupees in lacs)

Schedule 31.03.2009 31.03.2008

SOURCES OF FUNDS: SHAREHOLDERS' FUNDS: Share Capital A 1,359.85 1,359.85 Reserves and Surplus B 11,779.52 11,199.81

13,139.37 12,559.66 LOAN FUNDS: Secured Loans C — —

DEFERRED TAX LIABILITY (Net) (Refer Note 15) 122.47 — TOTAL 13,261.84 12,559.66

APPLICATION OF FUNDS: FIXED ASSETS: D A) Gross Block 18,074.85 17,098.58 Less: Depreciation 9,837.71 8,960.55 Net Block 8,237.14 8,138.03 B) Capital Work-in-Progress, expenditure to date 995.99 358.72

9,233.13 8,496.75 INVESTMENTS E 0.02 400.02

DEFERRED TAX ASSET (Net) (Refer Note 15) — 28.04 CURRENT ASSETS, LOANS AND ADVANCES: Inventories F 3,580.87 3,361.69 Sundry Debtors G 1,306.63 2,296.23 Cash and Bank Balances H 747.97 640.33 Loans and Advances I 2,126.40 1,356.75

7,761.87 7,655.00 Less: CURRENT LIABILITIES AND PROVISIONS: Current Liabilities J 2,647.51 2,244.11 Provisions K 1,085.67 1,776.04 3,733.18 4,020.15 Net Current Assets 4,028.69 3,634.85

TOTAL 13,261.84 12,559.66 Notes forming part of the Accounts T

As per our attached report of even date On behalf of the Board of Directors

For and on behalf of DALAL & SHAH A. B. AdvaniChartered Accountants Executive Chairman

K. N. Subramanian

Ashish DalalPartner

V. M. BhideGeneral Manager & Company Secretary

Vice President(Finance, Accounts & IT)& Chief Financial Officer

Raman KumarManaging Director

Mumbai, 30th May, 2009 Mumbai, 30th May, 2009

33

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009(Rupees in lacs)

Schedule 2008-09 2007-08INCOME: Sales, Services, Export Incentive, etc. L 24,605.98 29,736.19 Less : Excise Duty 2,222.17 3,681.39

22,383.81 26,054.80 Other Income M 235.56 323.54

22,619.37 26,378.34 EXPENDITURE: Cost of Goods Sold N 12,427.19 14,496.02 Manufacturing Expenses O 1,560.73 1,879.12 Employment Costs P 2,512.85 2,291.48 Administrative & Selling Expenses Q 2,456.93 2,921.41 Other Expenses R 32.62 239.83 Interest and Finance charges S 198.13 229.97 Depreciation 1,328.17 1,191.47

20,516.62 23,249.30 Less : Finished Goods Capitalised 79.94 12.99

20,436.68 23,236.31 PROFIT FOR THE YEAR BEFORE TAX 2,182.69 3,142.03 Add/(Less): Provision for Income Tax: Current Tax (690.00) (800.00) Deferred Tax (Refer Note 15) (150.51) 25.13 Provision for Fringe Benefit Tax (80.00) (70.55) Provision for Wealth Tax (5.00) (5.00)PROFIT AFTER TAX 1,257.18 2,291.61 Add/(Less): Prior period adjustments (Net) 47.40 (45.85) Excess / (Short) Provision of Taxes in respect of earlier years (Net) (88.49) 10.25

1,216.09 2,256.01 Balance brought forward from previous year 695.74 712.49 BALANCE AVAILABLE FOR APPROPRIATION 1,911.83 2,968.50 APPROPRIATIONS: General Reserve 800.00 1,000.00 Proposed Dividend 543.94 1,087.88 Provision for tax on Proposed Dividend 92.44 184.88 Balance carried to Balance Sheet 475.45 695.74 Weighted average number of Equity Shares outstanding during the year 13598467 13598467 Nominal Value of Shares (In Rs.) 10.00 10.00 Basic and Diluted Earnings Per Share (In Rs.) 8.94 16.59 Notes forming part of the Accounts T

As per our attached report of even date On behalf of the Board of Directors

For and on behalf of DALAL & SHAH A. B. AdvaniChartered Accountants Executive Chairman

K. N. Subramanian

Ashish DalalPartner

V. M. BhideGeneral Manager & Company Secretary

Vice President(Finance, Accounts & IT)& Chief Financial Officer

Raman KumarManaging Director

Mumbai, 30th May, 2009 Mumbai, 30th May, 2009

34

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009

(Rupees in lacs)

ParticularsYear Ended

31st March, 2009 Year Ended

31st March, 2008

A) Cash Flow arising from Operating Activities

Net Profit before Tax 2,182.69 3,142.03

Add :

a) Depreciation Charge 1,328.17 1,191.47

b) Interest and Finance Charges 198.13 229.97

c) Amount Written off against leasehold land 0.62 0.62

d) Assets Written Off / discarded 13.65 140.07

e) Loss on Sale of Fixed Assets 3.00 33.25

1,543.57 1,595.38

3,726.26 4,737.41

Less :

a) Interest received on Fixed Deposits 9.52 7.82

b) Interest received on Investments 9.28 138.22

c) Prior Period Adjustments (43.48) 43.93

(24.68) 189.97

Operating Profit before Working Capital Changes 3,750.94 4,547.44

Adjustment for :

a) (Increase)/Decrease in Trade and Other Receivables 412.27 (104.74)

b) (Increase) in Inventories (219.18) (179.12)

193.09 (283.86)

3,944.03 4,263.58

(Decrease)/Increase in Trade Payables 319.10 (238.92)

Cash Inflow from Operations 4,263.13 4,204.66

Add/(Less) :

Direct Tax paid (1,008.36) (945.37)

Cash Inflow in course of Operating Activities 3,254.77 3,079.29

B) Cash Flow arising from Investing Activities

Outflow:

a) Acquisition of Fixed Assets 2,151.19 3,334.07

35

(Rupees in lacs)

ParticularsYear Ended

31st March, 2009 Year Ended

31st March, 2008

Inflow:

a) Sale of Fixed Assets 73.28 534.66

b) Sale/Redemption of Investments 400.00 1,830.00

c) Interest Received on Fixed Deposits 9.52 7.82

d) Interest Received on Investments 9.28 138.22

492.08 2,510.70

Net Cash (Outflow) in course of Investing Activities (1,659.11) (823.37)

C) Cash Flow arising from Financing Activities

Inflow — —

Outflow:

a) Interest and Finance Charges Paid 198.13 229.97

b) Dividend Paid 1,076.36 1,607.90

c) Dividend Tax Paid 184.88 277. 33

1,459.37 2,115.20

Net Cash (Outflow) in course of Financing Activities (1,459.37) (2,115.20)

Net Increase in Cash/Cash Equivalents (A+B+C) 136.29 140.72

Add :Balance at the beginning of the year 525.93 385.21

Cash/Cash Equivalents at the close of the year 662.22 525.93

Reconciliation to Cash and Bank Balances given in Schedule H, is as follows :

Cash and Bank Balances 747.97 640.33

Less :Deposits endorsed in favour of Banks as security against guarantees and letters of credit. 85.75 114.40

Cash and Cash Equivalents at the end of the year 662.22 525.93

As per our attached report of even date On behalf of the Board of Directors

For and on behalf of DALAL & SHAH A. B. AdvaniChartered Accountants Executive Chairman

K. N. Subramanian

Ashish DalalPartner

V. M. BhideGeneral Manager & Company Secretary

Vice President(Finance, Accounts & IT)& Chief Financial Officer

Raman KumarManaging Director

Mumbai, 30th May, 2009 Mumbai, 30th May, 2009

36

SCHEDULE "A" TO "T" ATTACHED TO AND FORMING PART OF THE BALANCE SHEET AS AT AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009SCHEDULE "A" - SHARE CAPITAL (Rupees in lacs)

31.03.2009 31.03.2008

AUTHORISED:

3,00,00,000 Equity Shares of Rs.10/- each 3,000.00 3,000.00

TOTAL 3,000.00 3,000.00

ISSUED, SUBSCRIBED AND PAID UP:

* 1,35,98,467 Equity Shares of Rs.10/- each, fully paid-up 1,359.85 1,359.85

TOTAL 1,359.85 1,359.85

* 85,26,100 Equity Shares of Rs.10/- each, were alloted as fully paid-up bonus shares, by way of Capitalisation of Securities Premium Account and General Reserve.

* 52,200 Equity Shares of Rs. 10/- each, were alloted as fully paid up, at par, to the shareholders of Advanced Welding Alloys Limited, pursuant to a Scheme of Amalgamation.

SCHEDULE "B" - RESERVES AND SURPLUS (Rupees in lacs)

31.03.2009 31.03.2008

General Reserve

Balance as per Last Account 10,281.09 9,281.09

Add:

Transfer from Profit and Loss Account 800.00 1,000.00

11,081.09 10,281.09

Capital Redemption Reserve Account

Balance as per Last Account 222.98 222.98

Surplus as per Profit and Loss Account 475.45 695.74

TOTAL 11,779.52 11,199.81

SCHEDULE "C" - SECURED LOANS (Rupees in lacs)

31.03.2009 31.03.2008

Working Capital Loans from Banks — —

TOTAL — —

Refer Note 1 for details of Security.

37

SCHEDULE "D" - FIXED ASSETS (Rupees in lacs)(A) Assets G R O S S B L O C K AT COST / BOOK VALUE D E P R E C I A T I O N N E T B L O C K

Particulars As At 01.04.2008

Additions/ Adjustments

Deductions/ Adjustments

As At 31.03.2009

Upto 31.03.2008

For The Year Deductions/ Adjustments

Upto 31.03.2008

As At 31.03.2009

As At 31.03.2008

Land - Freehold 211.47 — — 211.47 — — — — 211.47 211.47

Land - Leasehold (a) 51.34 — 0.62 (c) 50.72 — — — — 50.72 51.34

Buildings 4,372.43 455.48 60.60 4,767.31 1,054.58 319.61 40.14 1,334.05 3,433.26 3,317.85

Ownership Premises (b) 322.80 — — 322.80 127.39 9.77 — 137.16 185.64 195.41

Plant and Machinery 9,405.60 692.97 216.53 9,882.04 6,140.07 771.08 203.06 6,708.09 3,173.95 3,265.53

Electrical Installations 482.16 160.33 24.59 617.90 155.83 51.16 15.47 191.52 426.38 326.33

Furniture, Fixtures and Equipments 794.58 100.56 132.15 762.99 531.20 60.99 114.17 478.02 284.97 263.38

Vehicles 526.15 104.06 98.73 531.48 248.46 89.99 75.47 262.98 268.50 277.69

Temporary Shed 3.64 — — 3.64 3.64 — — 3.64 — —

Research and Development Assets:

Land Freehold 33.61 — — 33.61 — — — — 33.61 33.61

Buildings 90.49 — — 90.49 84.06 0.62 — 84.68 5.81 6.43

Plant and Machinery 802.93 0.52 3.55 799.90 614.41 24.89 1.86 637.44 162.46 188.52

Air Conditioners 1.38 — 0.88 0.50 0.91 0.06 0.84 0.13 0.37 0.47

TOTAL 17,098.58 1,513.92 537.65 18,074.85 8,960.55 1,328.17 451.01 (d ) 9,837.71 8,237.14 8,138.03

Previous Year's TOTAL 15,495.72 3,361.72 1,758.86 17,098.58 8,817.42 1,191.47 1,048.34 8,960.55 8,138.03

(B) Capital Work-in-Progress 995.99 358.72

GRAND TOTAL 9,233.13 8,496.75

Notes: (a) Leasehold Land includes Land Rs. 41.24 lacs (Net of amortisation Rs. 40.76 lacs) acquired by the Company on a co-ownership/lease basis for which conveyance deed is yet to be executed. (b) Includes : (i) Rs.0.01 lac being the aggregate value of Shares in Co-operative Housing Societies. (ii) Rs.4.17 lacs for Tenements in an Association of Apartment Owners. (c) Represents amount written off on account of amortisation of leasehold land Rs.0.62 lac; (Previous year Rs. 0.62 lac) (d) Includes Rs.3.92 lacs on account of net excess provision for depreciation relating to earlier years; {Previous year short depreciation Rs.1.92 lacs}.

SCHEDULE "E"- INVESTMENTS - OTHER THAN TRADE (UNQUOTED)(Rupees in lacs)

Face Value Rupees

31.03.2009 31.03.2008

Nos. Long Term Investments (At Cost):-1) In Government and Trust Securities: 6 Years National Savings Certificates * 2,500 0.02 0.02

0.02 0.02 — 2) Bonds:

(4,000) Rural Electrification Corporation Limited Bonds 10,000 — 400.00 TOTAL 0.02 400.02

* indicates deposited with Government Departments 0.02 0.02

Note : All the above investments have been classified by the Company as "Long Term Investments", in view of its intention to hold the same on a long-term basis

SCHEDULE "F" - INVENTORIES (Rupees in lacs) 31.03.2009 31.03.2008

1) Stores, Spares 249.83 222.07 2) Stock - in - Trade a) Raw Materials & Components and Packing Material 1,210.41 1,035.99 b) Goods-in-Process 815.98 716.01 c) Finished Goods 1,239.63 1,319.83 d) Goods for Resale 65.02 64.36 3) Goods-in-Transit — 3.43

TOTAL 3,580.87 3,361.69

38

SCHEDULE "G" - SUNDRY DEBTORS (UNSECURED) (Rupees in lacs)

31.03.2009 31.03.2008

(A) Over Six Months:

Considered good 104.57 115.85

(B) Others, considered good 1,202.06 2,180.38

TOTAL 1,306.63 2,296.23

SCHEDULE "H" - CASH AND BANK BALANCES (Rupees in lacs)

31.03.2009 31.03.2008

A) Cash on hand 4.05 4.63

B) Balances with Scheduled Banks:

i) In Current Accounts 657.34 520.61

ii) In Fixed Deposits (including Rs.85.75 lacs; Previous Year Rs.114.40 lacs endorsed in favour of banks as security against guarantees given) 86.58 115.09

TOTAL 747.97 640.33

SCHEDULE "I" - LOANS AND ADVANCES (Rupees in lacs)

31.03.2009 31.03.2008(UNSECURED, CONSIDERED GOOD)

Loans and Advances to Employees 12.32 13.14

Advances recoverable in cash or in kind or for value to be received 1,452.81 815.74

Balances with Central Excise, Customs and Port Trust 14.48 40.59

Sundry Deposits 179.37 183.53

Advance payment of Income Tax (Net of provisions) 467.42 303.75

TOTAL 2,126.40 1,356.75

SCHEDULE "J" - CURRENT LIABILITIES (Rupees in lacs)

31.03.2009 31.03.2008

Sundry Creditors *(Refer Note 4) 2,098.55 1,788.35

Advance against Sales and Services 425.58 316.41

Deposits and Advances from Distributors and Others 123.38 139.35

TOTAL 2,647.51 2,244.11

* Includes Rs.58.50 lacs (Previous Year Rs. 97.26 lacs) being remuneration to the Managing Director, Executive Chairman and other Non-executive Directors

39

SCHEDULE "K" - PROVISIONS (Rupees in lacs)

31.03.2009 31.03.2008

For Excise Duty on Finished Goods Stock 110.67 217.42

For Employee Benefits 275.99 237.18

For Wealth Tax and Fringe Benefit Tax (Net of advances) 42.98 24.18

For Warranties 19.65 24.50

For Proposed Dividend 543.94 1,087.88

For tax on Proposed Dividend 92.44 184.88

TOTAL 1,085.67 1,776.04

SCHEDULE "L" - SALES, SERVICES, EXPORT INCENTIVE, ETC. (Rupees in lacs)

2008-09 2007-08

Sales and Services (Adjusted for usual discounts and incentives) 24,975.27 29,912.51 Less: Returns, Allowances, etc. 511.99 224.93

24,463.28 29,687.58 Agency Commission 43.46 20.59 Export Incentives 98.74 14.29 Welding School fees 0.50 13.73

TOTAL 24,605.98 29,736.19

SCHEDULE "M" - OTHER INCOME (Rupees in lacs)

2008-09 2007-08

Interest received on investments (Long term, other than trade) 9.28 138.22 Interest received from Banks and Others (Gross) (tax deducted at source Rs.13.54 lacs; Previous Year Rs.1.63 lacs) 9.52 7.82 Credit Balances appropriated 13.54 —Excess Provision written back (including Warranties Rs.4.85 lacs; Previous Year Rs.Nil) 25.03 32.07 Income from Product Development — 50.00 Exchange Difference Gain (Net) 107.72 — Rent and Compensation 39.24 19.76 Bad Debts written off now recovered — 3.48 Miscellaneous Income 31.23 72.19

TOTAL 235.56 323.54

40

SCHEDULE "N" - COST OF GOODS SOLD (Rupees in lacs)

2008-09 2007-08

Opening Stock of Raw Materials, Components and Packing Materials 1,035.99 1,056.84 Add: Purchases (after deducting sales Rs. Nil;

Previous Year Rs. 126.66 lacs) 12,670.75 14,321.70 13,706.74 15,378.54 Less: Closing Stock of Raw Materials, Components

and Packing Materials 1,210.41 1,035.99 Consumption of Raw Materials, Components andPacking Materials 12,496.33 14,342.55 Purchase of Goods for Resale 58.04 263.02 (Increase)/Decrease in Inventories: Opening Stock: Finished Goods 1,319.83 1,016.34 Goods for Resale 64.36 73.00 Goods-in-Process 716.01 914.51

2,100.20 2,003.85 Closing Stock: Finished Goods 1,239.63 1,319.83 Goods for Resale 65.02 64.36 Goods-in-Process 815.98 716.01

2,120.63 2,100.20 (20.43) (96.35)

Variation in Excise Duty on inventory of Finished Goods Stock (106.75) (13.20) TOTAL 12,427.19 14,496.02

SCHEDULE "O" - MANUFACTURING EXPENSES (Rupees in lacs)

2008-09 2007-08

Stores, Spare Parts, etc. (after deducting sales Rs.Nil;Previous Year Rs.0.16 lac)

597.01 671.72

Power and Fuel 431.44 510.07 Repairs: Machinery 94.28 144.02 Buildings 122.64 163.20 Others 94.51 74.90 311.43 382.12 Other Manufacturing Expenses 220.85 315.21

TOTAL 1,560.73 1,879.12

41

SCHEDULE "P" - EMPLOYMENT COSTS (Rupees in lacs)

2008-09 2007-08Salaries, Wages, etc. 1,917.07 1,734.31 Contribution to Provident and Other Funds 107.55 103.46 Welfare Expenses 273.35 215.47 Directors' Remuneration 214.88 238.24

TOTAL 2,512.85 2,291.48

SCHEDULE "Q" - ADMINISTRATIVE AND SELLING EXPENSES (Rupees in lacs)

2008-09 2007-08Freight, etc. (Net) 195.56 524.56 Rent (Refer Note 8) 169.79 184.88 Rates and Taxes 20.69 28.81 Insurance 19.83 19.09 Travelling, Conveyance and Vehicle expenses 711.09 670.71 Directors' Fees 6.17 5.98 Advertisement and Publicity 187.03 212.15 Commission 5.71 7.34 Cash discounts and Special discounts — 103.71 Telephone, Telex, Postage, etc. 162.44 160.20 Repairs at Administrative and Area offices 60.28 82.36 Expenses on Warranties — 4.90 Miscellaneous Expenses 918.34 916.72

TOTAL 2,456.93 2,921.41

SCHEDULE "R" - OTHER EXPENSES (Rupees in lacs)

2008-09 2007-08

Alterations to and maintenance of rented premises 0.01 0.28 Donations 5.30 7.17 Bad Debts, deposits and debit balances written off (Net) 10.04 0.29 Exchange Difference (Net) — 58.15 Loss on sale of Fixed Assets (Net) 3.00 33.25 Assets written off/discarded 13.65 140.07 Amounts written off against amortisation of Leasehold land 0.62 0.62

TOTAL 32.62 239.83

SCHEDULE "S" - INTEREST AND FINANCE CHARGES (Rupees in lacs) 2008-09 2007-08Interest : On Fixed Loans — 13.19 Others 150.37 143.34

150.37 156.53 Finance Charges and Bank charges 47.76 73.44

TOTAL 198.13 229.97

42

SCHEDULE “T” - NOTES FORMING PART OF THE ACCOUNTS

1) Secured Loans and Guarantees:

i) Working Capital facilities from Banks are secured by hypothecation of stocks and other tangible movable assets of the Company, both present and future and book debts in favour of Bank of Baroda and HDFC Bank Limited. The said facilities are also secured / to be secured by way of pari-passu charge on the land and building at the Company’s Silvassa Unit.

ii) Guarantees given by banks to third parties amounting to Rs.315.89 lacs; (Previous Year Rs.287.43 lacs) on behalf of the Company are secured against securities mentioned in (i) above.

(Rupees in lacs)2) Contingent Liabilities not provided for : 31.03.2009 31.03.2008

a) Disputed income tax as the matters are in appeal (advance paid Rs.15.65 lacs; Previous Year Rs.Nil) 15.65 Nil

b) Disputed Sales Tax as the matters are in appeal (advance paid Rs.9.21 lacs; Previous Year Rs.9.21 lacs) 67.52 67.52

c) Disputed Excise duties as the matters are in appeal (advance paid Rs.1 lac; Previous Year Rs.1 lac) 117.99 119.91

d) On account of bills discounted by the Company 105.26 260.17e) Bonds / Undertakings given by the Company under concessional duty /

exemption scheme to Customs Authorities. 232.29 210.523) Estimated amount of Contracts remaining to be executed on Capital Account

and not provided for (Net of advances) 177.57 569.29

4) a) Sundry Creditors in Schedule “J” to the Accounts includes; (i) Rs.Nil; (Previous Year Rs.Nil) due to micro and small enterprises registered under The Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 2098.55 lacs (Previous Year Rs.1788.35 lacs) due to other creditors. During the year no amounts have been paid beyond the appointed day in terms of the MSME and, there are no amounts paid towards interest. Further, there is no interest accrued / payable under the said act at the close of the year.

b) The disclosure in (a) above is based on the information available with the Company regarding the status of suppliers under the MSME.

5) In the opinion of the Management, no item of current assets, including inventories has a value on realisation in the ordinary course of business, which is less than the amount at which it is stated in the Balance Sheet.

6) Revenue expenditure incurred during the year on Research and Development, through the natural heads of account, amounts to Rs.77.91 lacs (Previous Year Rs. 121.77 lacs) (including Depreciation Rs. 25.57 lacs; Previous Year Rs. 29.39 lacs) and Capital expenditure thereof amounts to Rs.0.52 lac (Previous Year Rs. 5.14 lacs).

(Rupees in lacs)7) A) Directors’ Remuneration : 2008-09 2007-08

Salary 79.27 87.74Contribution to Provident and Other Funds 20.69 15.30Commission 71.65 97.26House Rent Allowance 36.16 33.99Other Perquisites 7.11 3.95

214.88 238.24

43

B) Computation of Net Profit in accordance with Section 198(1) of the Companies Act, 1956. (Rupees in lacs)

2008-09 2007-08

Profit after Tax 1,257.18 2,291.61

Add :

a) Provision for Taxation (Net of Deferred Tax) 925.51 850.42

b) Director’s Remuneration 214.88 238.24

Less : 2,397.57 3,380.27

Interest on Capital Gain Bonds 9.28 138.22

Net Profit as per Section 198(1) of the Companies Act, 1956 2,388.29 3,242.05

Commission to the Executive Chairman 23.88 32.42

Commission to Managing Director *23.88 32.42

Commission to the Non - Executive Indian Resident Directors @ 1% 23.89 32.42

* includes proportionate commission to erstwhile Managing Director

C) The Board of Directors at their meeting held on 18th October,2008, appointed Mr.Raman Kumar as an additional director and the Managing Director in place of Mr.V.G.Kutty, the erstwhile Managing Director who resigned on 18th October,2008. The said appointment, together with the Contract of Employment is subject to the approval of the shareholders at the ensuing Annual General Meeting.

(Rupees in lacs)2008-09 2007-08

8) Rent includes rent for land — 90.65

9) Payment to Auditors :a) Audit fees (including Branch Auditors Rs.6.00 lacs;

Previous Year Rs.6.00 lacs) 18.00 18.00b) Tax Audit Fees (including Branch Auditors Rs.2.60 lacs;

Previous Year Rs.2.60 lacs) 5.80 5.80c) Tax Matters (including Branch Auditors Rs.Nil; Previous Year Rs. Nil) — 1.60d) Certification and Other Matters (including Branch Auditors

Rs. 0.39 lac; Previous Year Rs.Nil) 5.09 4.92e) Reimbursement of out of pocket expenses

(including Branch Auditors Rs. Nil; Previous Year Rs. Nil) 0.82 0.57

10) A) Details of CIF value of Imports (including in-transit) :Raw Materials and Components 948.25 782.55Capital Goods 86.17 457.03Spares, etc. 35.70 42.13Purchase of goods for resale — 9.86Others — 2.96

B) Details of Expenditure in Foreign Currency :Travelling 119.93 115.32Staff Training 0.43 3.07Bank charges 18.13 17.89Others 169.06 158.91

44

(Rupees in lacs)C) Details of Earnings in Foreign Exchange : 2008-09 2007-08

F.O.B. Value of Exports (Net of Returns) 3,232.83 3,442.75

Commission received 43.46 20.59

Others Nil 0.68

D) *Details of Dividend remitted to Non-Resident shareholders in Foreign Currency:

Number of Non-Resident Shareholders 70 70

Number of Equity Shares held 10,160 10,160

Financial Year ended for which dividend is remitted 2007-08 2006-07

Amount of dividend remitted (Rs. in Lacs) 0.81 1.22

* excluding dividend credited to the shareholders’ Non-Resident External Accounts with banks in India.

11) A) Detailed information regarding Registered Capacity,installed Capacity,Actual Production,Opening Stocks, Turnover and Closing Stocks

Particulars

Unit Annual Registered Capacity

Annual Installed

Capacity

Annual Production

Quantity

Opening Stock Turnover Closing Stock

Quantity Rupees in Lacs

Quantity Rupees in Lacs

Quantity Rupeesin Lacs

INDUSTRIAL MOUs / Registrations

1) Welding Consumables (Arc Welding Electrodes/ Continuous Welding Wires and Fluxes)

M.Tonnes 26,000 (per shift)

26,000 (per shift)

16,965.76 (18,655.23)

358.70 (343.61)

430.64 (425.01)

16,644.93 (18,640.14)

18,223.81 (19,995.84)

679.53 (358.70)

582.66 (430.64)

2) Welding Equipments (Welding and Cutting Equipment / Systems,Accessories Spares / Service)

Value 125Crs 125Crs NotEnumerable

NotEnumerable

831.01(524.54)

NotEnumerable

6,332.59(10,349.64)

NotEnumerable

633.33(831.01)

3) Power Generators (15-300 K VA) Nos 5,000 5,000 166.00 (62.00)

31.00 (30.00)

122.53 (139.78)

64.00 (61.00)

111.84 (261.35)

133.00 (31.00)

88.66 (122.54)

4) Goods for Resale

Not Enumerable

Rupees in lacs

58.04

58.04 (263.02)

1,384.18 (1,089.33)

24,668.25 (30,606.83)

1,304.65 (1,384.19)

Less : Usual discounts and incentives 204.97(919.25)

NET SALES 24,463.28

(29,687.58)

Notes : 1. The Company’s products a re exempt from licencing requirements under New industrial Policy in terms of Notification No.477 (E) dated 25th July 1991 and F.No. 10/43/91-LP dated 02nd August 1991.The Company has registered all its products (including existing products) with Secretariat for Industrial Assistance.

2. Opening Stock,Turnover,Closing Stock in respect of Goods for Resale are included in respective catagories in item no.1 to 3 3. Figures in bracket indicate figures relating to the previous year. 4. Figures have been regrouped wherever necessary.

45

11) B) i) Turnover quantity is derived on the basis of opening stock plus production and purchases for trading activity, less physical quantities of closing stock.

ii) ‘Annual installed Capacity’ in Note 11(A) above is as certified by the Managing Director, and being a technical matter, is accepted by the Auditors as correct.

C) Details of Raw Materials, Components and Packing Materials consumed (after adjusting sales Rs. Nil ; Previous Year Rs. 126.66 lacs)

2008 – 09 2007 – 08Unit Qty. Rs. in lacs Qty Rs. in lacs

Wires and Rods M.T. 13,059.70 5,860.00 14,700.10 5,493.41Titanium Dioxide and Rutile Sand M.T. 1,057.32 433.09 1,341.93 442.40Manganese M.T. 346.71 546.17 397.90 369.08Metal, Nickel and Iron Powder M.T. 364.08 266.90 276.02 357.65Others :Electrical Components 370.36 635.03Mechanical Fittings 1,964.73 3,857.33Miscellaneous 3,055.08 3,187.65

TOTAL 12,496.33 14,342.55

D) Value of imported and indigenous Raw Materials, Components and Packing Materials consumed and % thereof to total value of consumption

2008-09 2007-08(Rs. in lacs) % (Rs. in lacs) %

a) Imported 735.47 5.89 1,089.44 8.12b) Indigenous 11,760.87 94.11 13,253.11 91.88

TOTAL 12,496.34 100.00 14,342.55 100.00

E) Value of imported and indigenous Stores and Spare-parts consumed and % thereof to total value of consumption :

2008-09 2007-08(Rs. in lacs) % (Rs. in lacs) %

a) Imported 39.24 6.57 55.60 8.28b) Indigenous 557.77 93.43 616.12 91.72

TOTAL 597.01 100.00 671.72 100.00

(Rupees in lacs)12) Prior Period adjustments represent: 2008 – 09 2007 – 08

a) Debits Relating to earlier years (0.94) (59.05)b) Credits Relating to earlier years 44.42 15.12c) Excess /(Short) Depreciation adjustments (Net) 3.92 (1.92) Net (Debit)/Credit 47.40 (45.85)

46

13) Segment Information:

A) Business Segment

(Rupees in lacs)

Particulars

Consumables Equipments & Project Engineering

Total

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Segment Revenue External Revenue 16,516.67 16,873.82 5,867.14 9,180.98 22,383.81 26,054.80Inter Segment RevenueTotal Revenue 16,516.67 16,873.82 5,867.14 9,180.98 22,383.81 26,054.80Segment Result before Interest and tax 2,616.82 2,375.90 764.06 1,935.65 3,380.88 4,311.55Add/(Less) : Unallocable expenses (Net of unallocable income) (1,000.06) (939.55)Interest and Finance charges (net) (198.13) (229.97)Excess/ (Short) Provision of Taxes in respect of earlier years (net) (88.49) 10.25Prior Period Adjustments 44.66 (31.24) (0.18) (14.61) 44.48 (45.85)Prior Period Adjustments - Unallocable 2.92 –Provision for taxes (Net of Deferred Tax) (925.51) (850.42)Net Profit 2,661.48 2,344.66 763.88 1,921.04 1,216.09 2,256.01

Other Information

Segment Assets 10,137.99 9,529.94 5,077.08 5,072.61 15,215.07 14,602.55Unallocated Assets 1,779.95 1,977.26Total Assets 16,995.02 16,579.81Segment Liabilities 1,485.11 1,354.47 789.85 867.44 2,274.96 2,221.91Unallocated Liabilities 1,458.22 1,798.24Total Liabilities 3,733.18 4,020.15Capital ExpenditureSegment Capital Expenditure 1,167.79 1,798.03 944.82 1,452.58 2,112.61 3,250.61Unallocated Capital Expenditure 38.58 83.46Total Capital Expenditure(Tangible Assets) 2,151.19 3,334.07Depreciation and AmortisationSegment Depreciation and Amortisation 907.34 971.67 363.95 175.32 1,271.29 1,146.99Unallocated Depreciation and Amortisation 57.50 45.10Total Depreciation and Amortisation 1,328.79 1,192.09Significant Non Cash Expenditure Segment Significant Non Cash Expenditure 0.12 45.59 0.02 13.01 0.14 58.60Unallocated Significant Non Cash Expenditure 13.51 81.47Total Significant Non Cash Expenditure 13.65 140.07

47

B) Geographical Segment(Rupees in lacs)

ParticularsIndia Outside India Total

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Segment Revenue 19,150.98 22,612.05 3,232.83 3,442.75 22,383.81 26,054.80

Carrying Amount of Segment Assets 14,962.84 13,490.04 252.23 1,112.51 15,215.07 14,602.55

Additions to Fixed Assets (Tangible Assets) 2,112.61 3,250.61 — — 2,112.61 3,250.61

C) Other Disclosures: 1. Segments have been identified in line with the Accounting Standard on Segment Reporting

(AS – 17) taking into account the organisation structure as well as differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment. 3. Types of Products and Services in each Business Segment:

Business Segment Types of Products and Servicesa) Consumables – Electrodes, Wires, Agency Items related to consumables.b) Equipment & Project

Engineering– Equipment, Spares, cutting products and Agency Items

related to Equipment and Cutting Products & Design, Engineering, Procurement and commissioning of Flares, Incinerators, Furnaces, etc.

4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

14) Related Parties Disclosures:

A) Relationships:

Relationship Name of the Person / Company

a) Investor having significant influence and its associates

J. B. Advani & Co. Pvt. Ltd.Ador Powertron LimitedAdor Fontech LimitedAdor Multiproducts Limited

b) Key Management Personnel Ms. A. B. AdvaniMr. V. G. Kutty (up to 18.10.2008)Mr. Raman Kumar (from 19.10.2008)

c) Relatives of Key Management Personnel where Transacations have taken place

No Transactions have taken place during the year.

Note: Related Party relationship is as identified by the Company and relied upon by the Auditors.

48

B) Transactions:(Rupees in lacs)

Particulars Investor having significant influence

and its associates

Key Management Personnel

Relatives of Key Management

Personnel

Sales and Services

Goods, Materials and Services 911.46(1,937.84)

—(—)

—(—)

Other Income

Rent{Ador Fontech Ltd. Rs.4.38 lacs (Rs.4.38 lacs)}

8.82(6.78)

—(—)

—(—)

Royalty {Ador Fontech Ltd. Rs.1.93 lacs (Rs.42.73 lacs)}

3.73(44.99)

—(—)

—(—)

Product Development Charges(Ador Fontech Ltd.)

—(50.00)

—(—)

—(—)

Miscellaneous —(0.90)

—(—)

—(—)

Sale of FSI Rights (J.B.Advani & Co. Pvt. Ltd.) —(472.50)

—(—)

—(—)

Purchases

Goods and Agency Items {J.B.Advani & Co. Pvt. Ltd. Rs.1133.54 lacs (Rs.2309.44 lacs)}

1,278.93(2,593.67)

—(—)

—(—)

Other Expenses

Rent (J.B.Advani & Co. Pvt. Ltd.) —(91.62)

—(—)

—(—)

Rates and Taxes (J.B.Advani & Co. Pvt. Ltd.) —(5.62)

—(—)

—(—)

Brand Preference Incentive —(7.01)

—(—)

—(—)

Sales Incentive 3.00(—)

—(—)

—(—)

Remuneration —(—)

190.99(205.82)

—(—)

Other Receipts

Refund of Rent Deposit (J.B.Advani & Co. Pvt. Ltd.) —(88.00)

—(—)

—(—)

Fixed Assets

Purchases of Fixed Assets —(13.33)

—(—)

—(—)

Sale of Fixed Assets —(4.38)

—(—)

—(—)

Outstandings

Receivables as Sundry Debtors 13.95(72.60)

—(—)

—(—)

Payables as Sundry Creditors/Advances Received 22.34(2.18)

34.61(64.84)

-(-)

(Figures in brackets indicate Previous Year)

49

15) Deferred Tax:

(Rupees in lacs)Particulars As at

31.03.2009As at

31.03.2008As at

31.03.2007Deferred Tax Liability on account of:Depreciation 142.46 49.35 54.77Capital Expenditure for Scientific Research 57.32 24.76 72.10

199.78 74.11 126.87Deferred Tax Assets on account of:Employee Benefits 62.32 72.60 72.60VRS Payments 14.99 29.55 57.18

77.31 102.15 129.78Net Deferred Tax (Asset) / Liability 122.47 (28.04) (2.91)

16) Computation of Profit for Earnings per Share: (Rupees in lacs)

Particulars 2008-09 2007-08

Profit for the year after tax 1,257.18 2,291.61

Add/ (Less): Prior Period Adjustments 47.40 (45.85)

Excess / (Short) Provision of Taxes in respect of earlier years (Net) (88.49) 10.25

Earnings 1,216.09 2,256.01

17) Disclosure in respect of derivative instruments:

a) Derivative instruments for hedging purposes,outstanding : Forward contracts USD 4,00,000/-(Debtors)

b) Foreign currency exposures that are not hedged by derivative instruments :

Particulars USD EURO DHMS SR GBP

i) Debtors 1,01,560.79 — — — —

ii) Creditors 4,844.00 19,219.00 — — 615.00

iii) Other Advances/Deposits 3,635.00 525.00 66,630.62 3,500.00 —

iv) Bank Balance — — 7,106.25 — —

v) Other Liability 877.00 — 6,511.37 — —

18) Fixed Assets under Schedule D to the Accounts, include net book value of assets at the Company’s Ahmednagar division aggregating Rs. 83.47 lacs, which have been retired from active use, as given below. As per the estimates made by the management, the net realisable value of such fixed assets would atleast be equal to the carrying value of the fixed assets. Hence, in the opinion of the management, no expected loss needs to be recognised.

(Rupees in lacs)

Description of Assets Cost as at

31.03.2009

Depreciation upto

31.03.2009

Net Block as at

31.03.2009

Buildings 382.59 299.12 83.47

50

19) Employee Benefits: Amount of Rs.107.55 lacs (Previous Year Rs.103.46 lacs) towards defined contribution plans is recognised as

expense in the Profit and Loss Account.

The following table sets out the status of the gratuity plan as required under AS 15 (Revised 2005) and the reconciliation of opening and closing balances of the present value of the defined benefit obligation:

(Rupees in lacs)Particulars 2008-09 2007-08Change in present value of obligationObligation at beginning of the year 280.05 289.93Current Service Cost 17.89 16.47Interest Cost 20.24 21.12Actuarial (gain)/loss 72.52 24.53Benefits paid (95.39) (72.00)

Obligation at the end of the year 295.31 280.05

Change in Plan assetsFair value of Plan assets at beginning of the year 304.84 343.08Expected return on plan assets 20.49 22.96Actuarial gain / (loss) (1.70) 10.81Contributions – –Benefits paid (95.39) (72.00)

Fair value of plan assets at end of the year 228.24 304.85

Reconciliation of present value of the obligation and the fair value of plan assets and amount recognized in the balance sheet:Present value of the defined benefit obligation at the end of the year 295.31 280.05Fair value of plan assets at the end of the year (228.24) (304.85)Balance amount not recognized as an asset – 1.22

Net liability / (Asset) recognized in the balance sheet 67.07 (23.58)

Gratuity cost recognized for the year:Current Service cost 17.89 16.47Interest cost 20.24 21.12Expected return on plan assets (20.49) (22.96)Actuarial (gain)/loss 74.22 13.72Effect of the limit in Para 59(b) (0.51) (4.77)Net gratuity cost 91.35 23.58

Break-up of Plan Assets at the end of the year

Govt. of India Securities 21% 28%Corporate Bonds 32% 37%Special Deposit Schemes 46% 34%Others 1% 1%

Assumptions:Interest rate 6.00% 7.60%Estimated rate of return on plan assets 7.50% 7.50%Rate of growth in salary levels* 8.00% 7.00%

* The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors

51

20) Lease Rental Obligation:

(Rupees in lacs)Particulars As at

31.03.2009As at

31.03.2008Amount due within one year 103.12 104.28Amount due from one year to five years 416.42 357.45Amount due from five years and above 414.14 436.84

21) Previous Year’s figures have been regrouped wherever necessary

22) Significant accounting policies and practices adopted by the Company are as disclosed in the Statement annexed to these Accounts as Annexure I.

As per our attached report of even date On behalf of the Board of Directors

For and on behalf of DALAL & SHAH A. B. AdvaniChartered Accountants Executive Chairman

K. N. Subramanian

Ashish DalalPartner

V. M. BhideGeneral Manager & Company Secretary

Vice President(Finance, Accounts & IT)& Chief Financial Officer

Raman KumarManaging Director

Mumbai, 30th May, 2009 Mumbai, 30th May, 2009

52

ANNEXURE - I - ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2009.

Statement of Significant Accounting Policies and Practices: -

I) Recognition of Income and Expenditure :-

1. Sale of goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods by the Company.

2. Benefit on account of entitlement to import duty - free materials under Duty Entitlement Passbook Scheme is accounted in the year of export as Export Incentives.

3. Compensation paid to employees, is fully charged to the Profit and Loss Account in the year in which it is incurred.

4. Other Revenue / Income and Cost / Expenditure are generally accounted on accrual as they are earned or incurred.

II) Fixed Assets : -

1. Fixed Assets are accounted by the Company on the basis of historical costs. Gains or Losses arising on disposal are recognised in the Profit and Loss Account of the relevant financial year.

2. Method of Depreciation / Amortisation:

a) Depreciation for the year is provided on the written down value method at the rates and in the manner specified in the Schedule XIV to the Companies Act, 1956.

b) Cost of leasehold land is amortised over the period of lease.

c) Depreciation on additions / deletions is charged on pro-rata basis, upto the month of purchase / excluding the month of sale.

III) Investments :-

Long Term Investments are stated at ‘Cost’. A provision for diminution is made to recognise a decline, other than temporary in the value of long term investments.

IV) Valuation of Inventories :-

Inventories of Raw Materials and Components, Goods in Process, Finished Goods, Goods for Trade, Stores, Spares and Packing Materials are stated ‘at cost or net realisable value, whichever is lower’. Goods in Transit are stated ‘at cost’. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The excise duty in respect of closing inventory of finished goods is included as part of finished goods.

Cost formula used is either ‘Average Cost’ or ‘First in First Out’ as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

V) Foreign Currency Translations :-

1. All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place;

2. Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet. Resultant gain or loss is accounted during the year;

3. In respect of Forward Exchange contracts entered into to hedge foreign currency risks, the difference between the forward rate and exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange differences arising on such contracts are recognised as income or expense along with the exchange differences on the underlying assets / liabilities. Profit or loss on cancellations / renewals of forward contracts is recognised during the year.

4. Accounting of foreign branches / integral operations:-

a) Monetary items in the form of Current Assets and Current Liabilities in foreign currency, outstanding at

53

the close of the year, are converted at the appropriate rates of exchange prevailing on the date of the Balance Sheet.

b) Fixed assets and depreciation thereon, are converted at the exchange rates prevailing on the date of acquisition of the respective asset.

c) Revenue items, excluding depreciation, are converted at the monthly exchange rates prevailing on the date of the transaction

VI) Research and Development :-

1. Revenue expenditure on Research and Development (including overheads) are charged out as expense through the natural heads of account in the year in which they are incurred.

2. Expenditure of a capital nature on Research and Development is debited to Fixed Assets and depreciation is provided on such assets as are depreciable.

VII) Retirement and Other Employee Related Benefits :-

a) Short term employee benefits - All employee benefits payable within twelve months of rendering the service are recognised in the period in which the employee renders the related service

b) Post Employment / Retirement Benefits - Defined Contribution Plans such as Government Pension Fund etc., are charged to the Profit and Loss Account as incurred.

c) Defined Benefit Obligation Plans - The present value of the obligation under such plans, is determined based on an actuarial valuation, using the Projected Unit Credit Method, carried out (approximately) at the close of the year. Actuarial gains and losses arising on such valuation are recognised immediately in the Profit and Loss Account. In the case of gratuity, which is funded, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognise the obligation on net basis.

d) Other Long Term Employee Benefits are recognised in the same manner as Defined Benefit Plans.

e) Termination Benefits are charged to the Profit and Loss Account in the year in which they are incurred.

VIII) Assets taken on Lease :-

For assets taken under operating lease, lease rentals payable are charged to Profit and Loss Account.

IX) Taxation :-

Income tax expense comprises Current Tax, Fringe Benefit Tax (FBT) and Deferred Tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Provision for FBT is made on the basis of the fringe benefits provided/deemed to have been provided during the year at the rates and values applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure realization.

X) Impairment of Assets :-

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Impairment losses recognised in prior accounting periods are reversed if there has been any change in the estimate of the recoverable amount.

XI) Borrowing Costs :-

Interests and other borrowing costs attributable to qualifying assets are capitalised. Other interests and borrowing costs are charged to revenue.

54

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILEI Registration Details

Registration No.: U70100MH1951PLC008647 State Code : 11Balance Sheet Date : 31-03-2009

II Capital Raised during the year (Amount in Rupees Thousands)Public Issue Rights Issue

Nil NilBonus Issue Private Placement

Nil NilIII Position of Mobilisation and Deployment of Funds (Amount in Rupees Thousands)

Total Liabilities Total Assets1326184 1326184

Sources of FundsPaid - up Capital Reserves & Surplus

135985 1177952Secured Loans Unsecured Loans

Nil NilDeferred Tax Liability (net)

12247Application of Funds

Net Fixed Assets Investments923313 2

Net Current Assets Misc. Expenditure402869 Nil

Accumulated LossesNil

Deferred Tax Asset (net)Nil

IV Performance of the Company (Amount in Rupees Thousands)Turnover Total Expenditure2238381 2043668

Profit Before Tax Profit After Tax218269 125718

Earnings Per Share including extra ordinary items In Rs. Dividend Rate %8.94 40

Earnings Per Share excluding extra ordinary items In Rs.8.94

V Generic Names of Three Principal Products / Services of the Company (as per monetary terms)1) Item Code No.: 83112000 PRODUCTION DESCRIPTION: MANUAL METAL ARC WELDING / BRAZING ELECTRODES of manufacture falling under ITC

- broad description of CORED WIRE BASE OF METAL FOR ELECTRIC ARC-WELDINGCONTINUOUS WELDING ELECTRODES of Manufacture falling under ITC - broad description CORED WIRED OF BASE METAL FOR ELECTRIC ARC-WELDING

2) Item Code No.: 83119000 PRODUCTION DESCRIPTION: ARC WELDING / BRAZE-WELDING FLUXES of Manufacture falling under ITC - broad

description of OTHER, INCLUDING PARTS.3) Item Code No.: 85151900 PRODUCTION DESCRIPTION: WELDING & CUTTING EQUIPMENT & ACCESSORIES of Manufacture falling under ITC -

broad description OTHER

On behalf of the Board of Directors

Mumbai, 30th May, 2009

V. M. BhideGeneral Manager & Company Secretary

K. N. SubramanianVice President

(Finance, Accounts & IT)& Chief Financial Officer

A. B. Advani Executive Chairman

Raman Kumar Managing Director

THIS FORM IS APPLICABLE ONLY FOR SECURITIES HELD IN PHYSICAL FORM. IT WILL NOT BE ACCEPTED VIA EMAIL. THE FORM SHOULD BE COMPLETE IN ALL RESPECTS. IN CASE OF ECS OPTION KINDLY FURNISH A PHOTOCOPY OF THE CANCELLED MICR CHEQUE OF THE BANK ACCOUNT WHERE THE DIVIDEND IS TO BE CREDITED.

Date :To Sharex Dynamic (India) Pvt. Ltd.1, Luthra Ind. PremisesAndheri Kurla Road, Safed PoolAndheri (E), Mumbai 400 072.

SUB. : REQUEST FOR ECS / MANDATE

Unit: ADOR WELDING LIMITED Folio No(s): Name of the First Shareholder :

Dear Sirs,I wish to record my ECS / Mandate instruction as given below :

Type of instruction (select) ECS MANDATEBank NameBank Address

9 digit MICR code number Bank Account typeBank Account number

Tel no :

Fax no :

Thanking you,Yours faithfully,

(Signature of the First holder)

Encl.: MICR cheque duly cancelled

Notes

ADOR WELDING LIMITED

CONSUMABLES

EQUIPMENT

P L A N T S

ChennaiMelakottiyur, via Vandalur,Chennai - 600 048.

Tel: (044) 2747 7115 / 116Fax: (044) 2747 7117

Tamil Nadu, INDIA.

Email: itchennai@adorians.com

RaipurIndustrial Estate,Billaspur Road,Raipur - 493 221Chattisgarh, INDIA.Tel: (0771) 4016 288,2562 201Fax: (0771) 2562 204Email: rpr.plant@adorians.com

SilvassaSurvey 59 / 11 / 1,Khanvel Road,Masat,Silvassa - 396 230U.T of Dadra & Nagar Haveli, INDIA.Tel: (0260) 2632 287, 3258 843, 2640 447Fax: (0260) 2632 776Email: silvassa.plant@adorians.com

ChinchwadAkurdi,Pune - 411 019.Maharashtra, INDIA.Tel: (020) 4070 6000Fax: (020) 4070 6001Email: chinchwad.plant@adorians.com

Pimpri54-55, F-11 Block, MIDC,Pimpri, Pune - 411 018.Maharashtra, INDIA.Tel: (020) 6630 4577, 4676 5475Fax: (020) 6630 4578

OVERSEAS OFFICE

Ador House, 6, K. Dubash Marg, Fort, Mumbai - 400 001.Maharashtra, INDIA.

Website: www.adorwelding.com

SHARJAH OFFICESharjah Airport International Free Zone, Q3 - 216,P. O. Box-120025, Sharjah, (UAE)Tel: (00971) 65578601Fax: (00971) 65578602E-mail: awloverseas@adorians.com

OUR MARKET REACHOUR MARKET REACH

Ahmedabad

804-805, Sakar IV, Near Ellis Bridge,

Ahmedabad - 380 006.

Tel: (079) 2657 9928, 6661 2788,

Fax: (079) 6661 2788

Email: ahmedabadter@adorians.com

Bangalore

N-406/407, North Block, Rare Wing,

Manipal Centre, Dickenson Road,

Bangalore - 560 042.

Tel: (080) 2558 5125

Fax: (080) 2532 1477

Email: blr.area@adorians.com

Baroda

Suraj Plaza III, 7th Floor,

Sayajiganj, Vadodara - 390 005.

Tel: (0265) 2362 335

Fax: (0265) 2361 851

Email: baroda.area@adorians.com

Chennai

Capital Towers, 2nd Floor, 180,

Kodam Bakkam High Road,

Nungambakkam, Chennai - 600 034.

Tel: (044) 2822 1375, 2822 0816

Fax: (044) 2822 1376

Email: chennai.area@adorians.com

Coimbatore

Ramakrishna Bagh,

1289, Trichy Road,

Coimbatore - 641 018.

Tel: (0422) 2304 281

Fax: (0422) 2303 869

Email: coimbatorearea@adorians.com

Delhi

C-116, Naraina Industrial Area,

Phase 1, New Delhi - 110 028..

Tel:(011) 41411049,4141 1106,4557 8099

Fax: (011) 2579 5529

Email: delhi@adorians.com

Hyderabad

9-1-93/1, Lane Adjacent to

Sangeet Cinema, Sarojini Devi Road,

Secunderabad - 500 003.

Tel: (040) 2771 2090, 6649 2090

Fax: (040) 2771 5570

Email: hyd.area@adorians.com

Indore

402, Apollo Trade Centre,

Ambedkar Square,

Geeta Bhavan - Chouraha, A.B.Rd,

Indore - 452 001. (M.P.)

Tel: (0731) 2494 220, 4066 840

Fax: (0731) 4066 840

Email: indore.area@adorians.com

Jaipur

309, Aishwarya Tower,

Near. Hotel Hawa Mahal,

Ajmer Road,

Jaipur - 302 001.

Tel: (0141) 2220 833 / 2220 834

Fax: (0141) 2220 834

Email: jaipurter@adorians.com

Jamshedpur

Rm. No, 203/ 2nd Floor,

Shreeji Arcade, 76/B, Tenar Road,

Sakchi Jamshedpur - 831 001

Tel: (0657)2427 851

Fax: (0657) 2223 104

Email: jamshedpur@adorians.com

Kochi

Door No : 41 / 3031A , Providence Road,

Kochi - 682 018.

Tel: (0484) - 2394401

Fax: (0484) - 2394401

Email: kochiarea@adorians.com

Kolkata

3A, Auckland Place, 4th Floor,

Kolkata - 700 017.

Tel: (033) 40084862,40084863

Fax: (033) 40084864

Email: kolkata@adorians.com

Ludhiana

C/o Shekhar Gupta, Hse No. 302/D,

Motel Town Extension,

New Kartarpur Road, Ludhiana

Tel: 9815443860

Email: ludhianaao@adorians.com

Mumbai

5 / A, "CORPORA", L. B. S. Marg,

Bhandup (W), Mumbai - 400 078 (India).

Tel: (022) 66239300 / 35, 25962564

Fax: (022) 25966562, 25966062

Email:navimumbaiarea@adorians.com

Nagpur

17, Ganesh Colony,

Pratap Nagar Square,

Opp. Gurukripa Super Bazar,

Ring Road, Nagpur - 440 022.

Tel: (0712) 2287 363

Fax: (0712) 2287 363

Email: nagpurter@adorians.com

PuneP. B. No. 2, Akurdi,Chinchwad, Pune - 411 019.Tel: (020) 40706000, 40706026Fax: (020) 40706001Email: punearea@adorians.com

RaipurBilaspur Road, Post. Birgash,Bhanpuri Industrial Area,Raipur - 493 221.Tel:(0771) 2562 290, 4041 317Fax:(0771) 4041 318Email: raipurter@adorians.com

RourkelaM/20, Civil Township,Rourkela - 769 004.Tel: (0661) 2400791, 2400792Fax: (0661) 2400792Email: rourkela@adorians.com

TrichySri Sun Plaza, 2nd Floor,Shop No:403,404141, Madurai Road,Near Sophys Corner,Trichy- 620008Tel / Fax: (0431) 4001117Email: trichyter@adorians.com

ADOR WELDING LIMITED

SALES OFFICES