Dear Shareholders,
 
 I am delighted to inform you that your Company is celebrating 25 years
 of its incorporation. The Company was incorporated in 1986 and
 production started in 1988. We can all look back now with pride as we
 have come through various transitional curves, many of them very
 challenging, to reach a distinguished and reputed position in the
 Automotive Industry. It is at this point that I would like to thank
 each and every one of the stakeholders for having faith in the
 Management of the Company and for being there through the challenging
 journey of 25 years. Obviously, your Company is not going to rest on
 its laurels but will continually strive to deliver excellence in each
 sphere of the Business Process.
 
 The World Economy
 
 Since 2008 a lot of transformational changes have taken place in the
 Global Economy, however there is still a long way to go. The TRIAD
 markets are still going through the restructuring process and have not
 found
 
 a sustainable answer to many ills troubling their economies. In today''s
 world which is globally connected through trade and commerce, no market
 can remain unimpacted by the volatility in the major economies of the
 world. Although the developing countries, including the BRIC countries
 fared better than the rest, yet given the current situation, the entire
 global economy faces numerous challenges thrown up by inflationary
 pressures on commodities and food products.
 
 India''s growth dynamics were in contrast to the overall global scenario
 and India remained as one of the fastest growing economies registering
 growth of 8.5% during 2010-11. However, as we go into print, we hear of
 various downward revisions being made to India''s growth forecast for
 2011-12. The RBI has revised the growth forecast down to 8% for 2011-12
 but other indications from various independent agencies speak of a
 growth estimate below 8% also.
 
 The Indian Auto Industry
 
 The Indian two-wheeler industry has shown strong volume growth over the
 last two years, having grown by 25% in 2009-10 by manufacturing 10.52
 million units and 27% in 2010-11 to reach 13.37 million units. Further,
 with this growth vehicle production is estimated to increase three fold
 from 2009 to 2020. The rise in demand is led by various underlying
 factors including India''s rising per capita income, increasing rural
 demand, growing urbanization, swelling replacement demand etc. However
 it is expected that rising interest rates, raw material & fuel prices
 will lower sales growth and the forecast for the automobile sector in
 the current financial year is 11 to 13% compared to the earlier
 projection of 12-15%. The lower growth forecasts are primarily for
 passenger vehicles and undoubtedly, any further increase in interest
 rates will adversely affect growth numbers for other segments also.
 Your Company is however hoping that the rural market, which is also a
 large and vibrant market, will sustain a reasonable growth for two
 wheelers.
 
 Future outlook
 
 Inflationary pressures, which are triggered by supply side factors, are
 now developing into a wider issue together with other factors like
 higher finance and input costs. Monsoon during this year is predicted
 to be below normal. A new industrial policy is on the cards and will
 hopefully address the ground level realities faced by manufacturing set
 ups in the industrial sector, so that the growth in the current year (
 2011-12) atleast matches the prior year.
 
 Uncertainty about the extent and pace of global recovery persists.
 Private spending in advanced economies continues to be constrained
 making it likely that economic stimuli in these economies will continue
 for a further period. Emerging Market Economies will also have almost
 the same position as in the previous year i.e growth in a restricted
 manner in selected industries.
 
 On the cost front, the availability of key raw materials such as steel
 and energy at reasonable prices, inflation, lower demand etc will
 remain as a cause of concern.
 
 The Indian automobile market and our outlook
 
 The Indian automobile market has made its mark in the world by giving
 quality products at competitive prices. The Automobile and Auto
 Component sectors go hand in hand., With the robust growth in the
 automobile sector, the auto component sector has also flourished. There
 has been consistent growth in the auto component market in recent years
 and it is estimated that the auto component market is worth US $ 30
 billion in India.
 
 Significant investments are being made by Indian OEMs and auto
 component manufacturers in order to increase their capacities and fill
 the gap between the supply and demand. This has opened a new
 opportunity for your Company also to offer contemporary products to its
 export customers by upgrading its technology. As your Company now
 exports around 22% of its total sales, we have to focus on
 technological changes to keep abreast of various developments and be
 responsive to the market and specific customer requirements.
 Accordingly, we have recently acquired newer gear finishing
 technologies and we are further investing in world class and best-in
 class inspection/testing infrastructure for high quality products that
 can help in building up confidence of our esteemed customers in India
 and across the globe. This is because your Company believes that the
 long term outlook for the Auto Sector is still quite positive,
 especially in India.
 
 Company Strategy
 
 Your Company is now focusing on future technologies and sustainable
 manufacturing. In this connection, it is my pleasure to inform you that
 HGL has set up another state of the art plant, near the mother plant in
 Bhiwadi, Rajasthan which will soon be functional at its full capacity.
 This facility is an ''ECOFAC Plant'', and is meant to be a sustainable
 green manufacturing plant.
 
 The financial year 2010-2011 was an encouraging year in all aspects for
 the Company. The turnover of the company surpassed the Rs. 400 crore
 mark & touched Rs. 424.93 crores. The profit before tax was Rs.52.67
 crores and the profit after tax stood at Rs. 35.04 crores.  The Company
 has shared the gains among the shareholders of the Company by giving
 1:1 Bonus Shares and 15% interim dividend. Your Board of Directors have
 further reviewed the cash position of the Company and have recommended
 a final dividend of 25% for your approval.
 
 You must be aware that HGL is already one of the largest independent
 transmission manufacturing companies in the country and we are
 constantly updating and achieving best standards of technology to keep
 pace with the global requirements and make Hi-Tech a global brand. I
 would like to place on record my sincere gratitude to the entire
 Hi-Tech family for their dedicated and relentless hard work in the year
 that has gone by to enable the Company to achieve the success that it
 has.
 
 Before I conclude, I would like to thank all our business partners for
 their continued support and belief in Hi- Tech''s endeavors, and for
 being an active part of Hi- Tech''s growth story. My sincere gratitude
 to my Board colleagues for their wise guidance from time to time. I
 wish that this journey will continue to be equally exciting and
 rewarding as we move ahead.
 
 Deep Kapuria Chairman