MESSAGE FROM THE CHAIRMAN
 
 The last year has been a landmark period in the state of the Indian
 economy. GDP growth rate crossed 9% there was a huge inflow of FDI and
 several large overseas Cos. were acquired by Indian corporates. The
 Indian has now acquired an appropriate position of respect,
 appreciation and relevance in the global economy.
 
 The political stability has also contributed by providing the right
 environment for economic reforms. Investments in infrastructure,
 agriculture, housing, etc. are getting a great fillip through budgetary
 provisions and these investments are creating a spurt in demand across
 sectors like automobile, cement, steel, tractor, etc.
 
 The automobile sector has in particular displayed an excellent growth.
 The demand is continuously increasing in cars and light commercial
 vehicles, with the frequent introduction of newer models, with
 ergonomic designs, higher efficiencies and comfort. Multinationals like
 General Motors, Fiat, Renault, etc. are increasing their presence in
 the market, thereby creating further upswing in the demand. Toyota and
 Honda have also announced plans for introducing small cars in India.
 The One Lakh car will soon be a reality, with the Tata Motors project
 going on stream by mid 2008. Such introductions in the coming years
 would add to the demand, not just from the urban populace, but also
 from the rural area for four-wheelers. Consequently, many
 multinationals, like Dana, Eaton, and Caterpillar are setting up hubs
 in India for meeting the growing demand as well as for feeding
 components to their overseas operations. All this provides a great
 opportunity to the Company to further grow its business.
 
 The previous year has been good for the Company. Steadily we have
 consolidated our financial position as well as our systems and
 processes, in order to bring in better efficiencies. The Company has
 achieved a growth of over 20% (on an annualized basis) and maintained
 its market leadership. The production from the new plant at Gandhidham
 is well accepted by the customers and has added significantly in
 improving the overall business, in spite of last year being the first
 year of its operation. In the next two years Gandhidham Plant will
 materially help in increasing the business of the company. Thus,
 despite much higher interest, depreciation and manpower costs of the
 new plant, the Company has been able to maintain a -healthy bottomline
 and has continued paying dividend. With the higher utilization of the
 capacities in Gandhidham in the current year, the results are expected
 to only improve.
 
 In view of the strong growth in automobile industry in India, the
 Company has decided to diversify into precision machining of automobile
 components. To finance this new machining project, the Company is
 tapping the capital market with a Composite Issue of rights-cum-public
 aggregating to Rs. 29.00 crores. This project has a strong synergy with
 the existing operations of the Company, as the Company already has
 strong relationships with automobile OEMs, as well as considerable
 strength in precision machining capability. This project is suitable
 for expanding Companys business with the long term view.
 
 I take this opportunity to express my gratitude to all the
 shareholders, business associates, bankers, financial institutions and
 suppliers for their continued support and faith in the Company.