Dear Members,
 
 The Directors present the 25th Annual Report of your Company with
 great pleasure, together with the audited statement of accounts for the
 financial year ended 31st March, 2011.
 
 Financial Results
 
 The highlights of the financial performance of the Company are as
 under:-
 
                                                     (Rs. in lacs)
 
 Particulars                               2010-2011     2009-2010
 
 Sales (net of excise duty)                 42493.15      32269.86
 
 Other Income                                 243.23         86.18
 
 Total Income                               42736.38      32356.05 
 
 Profits before Depreciation, Interest
 and Taxes (PBDIT)                           7647.39       4846.94
 
 Depreciation                                1618.71       1260.72
 
 Profits before Interest and Taxes ( PBIT)   6028.68       3586.22
 
 Financial Charges                            761.52        887.07
 
 Cash Profit (PBDT)                          6885.86       3959.86
 
 Profits before Taxes (PBT)                  5267.16       2699.14
 
 Provision for Taxes                         1762.97        914.09
 
 Profit after tax (PAT)                      3504.19       1785.05
 
 Balance of profit brought forward           3276.53       2238.07
 
 Balance available for appropriation         6780.00       4020.57
 
 Dividend                                     750.72        422.28
 
 Tax on dividend                              122.87         71.76
 
 Transfer to General Reserve                  400.00        200.00
 
 Balance Surplus in P & L Account            5456.41       3276.53
 
 Paid-up Equity Share Capital                1876.80        938.40
 
 Earnings Per Share (EPS)                      18.67         19.00
 
 Operations
 
 The year gone by proved to be a turnaround year for the performance of
 your company and very encouraging for exports. The revenues of the
 Company (net of excise duty) increased to Rs. 42736.38 lacs in 2010-11
 as compared to Rs.32356.05 lacs in 2009-10, thus registering an
 impressive increase of 32.08%. The Net Profit (after tax) of the
 Company has increased from Rs. 1785.04 lacs to Rs. 3504.19 lacs,
 recording an increase of 96.31 % as compared to the previous year.
 
 During the year your company allotted bonus shares to the existing
 shareholders of the Company in the proportion of 1:1 by capitalising
 Rs.938.40 lacs from the General Reserves, thus raising the paid up
 share capital of your company to Rs.1876.80 lacs. The earnings per
 share (EPS) was Rs.18.67 per equity share on the increased share
 capital for the year under review.  In the prior year ( 2009-10 ) it
 was Rs.19.00 per share on the lower share capital of Rs. 938.40 Lacs.
 
 The year under review saw an increase in demand for the company''s
 products in both the domestic and exports markets.
 
 Exports
 
 During the year under review your Company recorded a total export
 turnover of Rs. 90.03 crores as compared to export sales of Rs. 48.89
 crores in the previous year, thus registering an increase of 84% . The
 higher exports were made possible because your company penetrated the
 European and Latin American markets also in addition to US market.
 
 Dividend
 
 During the year, an interim dividend of 15% i.e. Rs.  1.50 per equity
 share on the increased share capital amounting to Rs. 281.52 lacs was
 declared and paid.  The Directors have now recommend to the
 shareholders a final dividend of 25% i.e. Rs. 2.50 per equity share
 subject to the approval of the shareholders at the ensuing Annual
 General Meeting resulting in a payout of Rs. 469.20 lacs.
 
 If the dividend on the shares as, recommended by the Board of
 Directors, is approved by the shareholders in their 25th Annual General
 Meeting, payment of such dividend will be made to those members whose
 names appear in the Register of Members as on September 27, 2011. In
 respect of the shares held in electronic form, the dividend will be
 payable to the beneficial owners of the shares as on the closing hours
 of business on September 15, 2011, as per the details furnished by the
 depositories for this purpose.
 
 Credit Rating
 
 The independent credit rating agency, ''Fitch'' has upgraded HGL''s rating
 to ''A (ind)'', which reflects HGL''s consistent revenue growth and an
 improvement in its profitability in the last four years supported by a
 decline in HGL''s working capital cycle. Your company''s net cash
 conversion cycle therefore improved from 19 days to 3 days.
 
 Electronic Clearing Services (ECS)
 
 As per the circular issued by Securities & Exchange Board of India
 (SEBI), companies should mandatorily use the facility of Electronic
 Clearing Services (ECS), for distribution of dividends to its members.
 This facility provides to the members an opportunity to receive
 dividend amount directly in their bank accounts. For availing this
 facility, members holding shares in physical form may send their duly
 filled ECS mandate form to the Company''s Registrar and Share Transfer
 Agent (RTA). Members holding shares in dematerialized form may kindly
 note that their bank account details as furnished to their depositories
 will be taken for the purpose of ECS and the Company. Shareholders who
 wish to change their bank account details are therefore requested to
 advise their depositories participants about such changes.
 
 Those shareholders who have not yet opted for the ECS facility are once
 again requested to avail the benefits of ECS.
 
 Postal Ballot
 
 During the financial year 2010-11, no Special Resolution was required
 to be passed through postal ballot. At the forthcoming Annual General
 Meeting, there is no item for approval through Postal Ballot.
 
 Code for Prevention of Insider Trading Practices
 
 In compliance with the SEBI (Prohibition of Insider Trading)
 Regulations, 1992, your Company has adopted a Code of Conduct for
 Prevention of Insider Trading Practices for its Directors and
 designated employees.  The code lays down guidelines, which include
 procedures to be followed, and disclosures to be made while dealing in
 the shares of the Company.
 
 Trading Window
 
 In accordance with the Code of Conduct for prevention of insider
 trading, the Company closes its trading window for designated employees
 and directors from time to time. As per the policy, the trading window
 closes for a period of 7 (seven) days, prior to the date of the Board
 Meeting and opens 24 hours after the conclusion of Board Meeting in
 which the respective quarterly/half yearly/ yearly financial results
 are approved. The trading window is also closed during and after
 occurrence of price sensitive events as per the Code of Conduct for
 prevention of insider trading.
 
 Code of Conduct
 
 Your Company has adopted a Code of Conduct for its Board Members and
 Senior Management personnel.  The code of conduct has also been posted
 on the official website of the Company. A copy of the code of conduct
 has been circulated to all the directors and Senior Management.
 
 The Declaration by the Managing Director of the Company regarding
 compliance with the Code of Conduct for Board Members and Senior
 Management is annexed with the Corporate Governance report.
 
 Secretarial Audit
 
 M/s Grover Ahuja & Associates, practicing Company Secretary carried out
 the Secretarial Audit on quarterly basis to reconcile the total issued
 and listed share capital with National Securities Depository Limited
 (NSDL) and Central Depository Services (India) Limited (CDSL). The
 Board of Directors confirms that the total issued and paid up capital
 as on 31st March, 2011 is reconciled with the total number of shares in
 physical form and the total number of dematerialized shares held with
 NSDL and CDSL. The Secretarial audit report is being submitted every
 quarter to the Stock Exchanges and is also placed before the Board
 Meeting.
 
 Subsidiary Company
 
 The Company had no subsidiary during the financial year 2010-11.
 
 Listing of Shares
 
 With a view to provide easy liquidity in the shares of the Company, the
 equity shares of your Company are presently listed on the premier stock
 exchanges viz., the National Stock Exchange (NSE) and the Bombay Stock
 Exchange Limited (BSE) Mumbai. Pursuant to Clause 38 of the Listing
 Agreement, the annual listing fees for the year 2011-2012 has been paid
 within the prescribed time period.
 
 Dematerialization of the equity shares
 
 98.59% of the total equity shares of the Company are held in
 dematerialized form with the participants of National Securities
 Depository Limited (NSDL) and Central Depository Securities (India)
 Limited as on the date of this report.
 
 Keeping in view the benefits of dematerialization, your directors urge
 the shareholders holding shares in physical form to get their shares
 dematerialized.
 
 Directors
 
 Recently, the Board of Directors of your company has been reconstituted
 with the induction of a new Additional Director, Mr. Ramesh Chandra
 Jain w.e.f August 10, 2011. The appointment of Mr. Jain is upto the
 forthcoming Annual General Meeting and the Board of Directors commends
 to the shareholders, his appointment as a Director of the Company.
 
 Mr. Anil Kumar Khanna and Mr. Pranav Kapuria, Directors of the Company,
 retire by rotation at the ensuing Annual General Meeting and being
 eligible offer themselves for re-appointment. Mr. Deep Kapuria, Mr.
 Sandeep Dinodia, Mr. Anil Kumar Khanna, Mr. P C Mathews and Mr. Anuj
 Kapuria are the other continuing Directors
 
 A brief profile of the directors proposed to be appointed or
 re-appointed and the information pursuant to Clause 49 VI (A) of the
 Listing Agreement is being annexed to the Notice convening the 25th
 Annual General Meeting.
 
 Auditors
 
 M/s Gupta Vigg & Company, Chartered Accountants, Statutory Auditors of
 the Company retire at the conclusion of the Annual General Meeting of
 the Company and being eligible, have offered themselves for
 re-appointment. The Company has received an eligibility certificate
 from the auditors under Section 224 (1B) of the Companies Act, 1956.
 The Board of Directors recommends their re-appointment.
 
 The report by the Statutory Auditors is self explanatory.  Please refer
 to the Notes to Accounts wherever necessary.
 
 Directors Responsibility Statement
 
 In compliance of Section 217(2AA) of the Companies Act, 1956, as
 amended by the Companies (Amendment) Act, 2000, the Board of Directors
 of your Company confirms:
 
 a.  That the applicable accounting standards have been followed in the
 preparation of final accounts for the year ended March 31, 2011 and
 that there are no material departures.
 
 b.  That such accounting policies have been selected and applied
 consistently and such judgments and estimates made are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company as at March 31, 2011 and of the profit of the Company for
 the year ended on that date.
 
 c.  That proper and sufficient care has been taken for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and
 preventing and detecting fraud and other irregularities, and
 
 d. That the annual accounts for the year ended March 31, 2011 have been
 prepared on a going concern basis.
 
 Particulars of Employees
 
 Information in accordance with the provisions of Section 217(2A) of the
 Companies Act, 1956, read with the Companies (Particulars of Employees)
 Rules, 1975 as amended, is given in Annexure-I, to this report.
 
 The Conservation of Energy, Technology Absorption, Foreign Exchange
 earnings and outgo.
 
 Your Company continuously strives for Safety, Environment Management
 and conservation of resources like fuel, water, gas and power.
 Therefore, emphasis is being laid on employing sophisticated techniques
 which result in conservation of natural resources like energy, fuel
 etc.
 
 Your company gives high priority to safety which envisages a zero
 accident policy as the only acceptable standard of performance.
 
 Details of Energy Conservation, Technology Absorption, Research &
 Development activities undertaken by the Company and foreign exchange
 earnings and outgo of the Company and other information in accordance
 with the provisions of Section 217(1) (e) of the Companies Act, 1956,
 read with the Companies (Disclosure of Particulars in the Report of
 Board of Directors), Rules, 1988, are given in Annexure-II, to this
 Report.
 
 Corporate Governance
 
 The Report on Corporate Governance is attached herewith in
 Annexure-III, and the certificate from the Statutory Auditors
 confirming compliance with the provisions of Corporate Governance as
 stipulated in Clause 49 of the listing agreement is also attached to
 the report.
 
 Management discussion & analysis report
 
 The Management Discussion & Analysis Report is given
 separately, forming part of this report.
 
 Trade Relations
 
 The Board of Directors place on record their appreciation for the
 co-operation and valuable support extended by the customers, the
 suppliers and all other persons directly or indirectly associated with
 the Company. Your Company regards them as partners and shares with them
 a common vision of growth in the future.
 
 Public Deposits
 
 During the year under review your Company neither invited nor accepted
 any deposit within the meaning of Section 58-A of the Companies Act,
 1956, and rules made there under.
 
 Personnel
 
 The Board of Directors place on record their appreciation of the
 untiring efforts of the employees of the organisation at every level.
 The efforts to create a family like atmosphere continued through out
 the year.  Like the many years gone-by, this year also witnessed
 increased cohesion among all levels of employees, which is evident from
 the performance of the Company.  Training and Development of employees
 provided further impetus and have contributed towards the all round
 improved performance of your company.
 
 Awards and Other Recognitions
 
 Your directors have pleasure and feel privileged in reporting the award
 received by the Company during 2010-2011.The Details are provided in
 the Management Discussion & Analysis Report.
 
 Acknowledgement
 
 Your directors place on record their grateful appreciation for the
 assistance, cooperation and valuable support provided to the Company by
 Customers, Vendors, Banks & Financial Institutions and hope to continue
 to receive the same in future. Your Directors also record their
 appreciation for the commitment and dedication of the the employees of
 the Company.
 
 The Board of Directors also place on record their gratitude to the
 shareholders of the Company for their continued support to and
 confidence in the management of the Company.
 
                                                 By Order of the Board
                                             For Hi-Tech Gears Limited
 
 Place: New Delhi                                         Deep Kapuria
 
 Dated: August 10, 2011                                       Chairman