The Directors have pleasure in presenting the Eighteenth Annual Report
 together with the audited accounts of the company for the year ended
 31st December, 2001
 
 FINANCIAL RESULTS
 
                                                        (Rs. in Million)
                                    Year ended         Nine Months Ended
                                    31.12.2001                31.12.2000
 
 Sales                                 194.258                   146.628
 
 Gross Profit before Depreciation
 and interest                           20.213                     0.568
 
 Less: Depreciation                      6.074                     5.401
 
 Interest                                2.431                     3.697
 
                                         8.505                     9.098
 
 Net Profit/(loss) before tax           11.708                   (8.532)
 
 After suffering losses for the past few years it is indeed heartening
 to report that your Company has started to post profit. The reason
 behind this better performance of the Company can be attributed mainly
 to the higher domestic sales, change to a more profitable product mix
 and strict cost control. Inspite of not so encouraging market scenario
 , the Company has been able to increase its market share due to
 increased sales, both to institutional customers as also through
 Distributor network.
 
 DIVIDEND
 
 In accordance with the provisions of the Companies Act, 1956, after
 adjustment of past years losses/depreciation the Company has no
 distributable profit for payment of dividend.
 
 QUALITY
 
 Your Company has during the year successfully undergone the
 Surveillance Audit conducted by the IS09001 team and the Company is
 constantly working towards achieving its objective for Total Quality
 Management.
 
 INSURANCE
 
 All the properties and insurable interests of the Company including
 Building, Plant & Machinery and Stocks, wherever necessary and to the
 extent required, have been adequately insured.
 
 SAFETY & ENVIRONMENT
 
 Safety and Environment Protection has been a hallmark of our industrial
 activity and has throughout the year received the focused attention of
 the Board. Your Company was accident free during the period under
 review. The Safety Committee of the Company has been extremely vigilant
 during the year and has reviewed with extreme care all safety measures
 adopted by the Company. Safety rules, policies and regulations
 previously framed by this Committee has also been adhered to strictly
 by the Company.
 
 EMPLOYEE RELATIONS
 
 During the year under review your Company has closed down its Bimetal &
 Strip manufacturing unit in Hosur. Consequentially the Company has on
 27th July, 2001 entered into Memorandum of Settlements, under
 Industrial Dispute Act, 1951 with 11 of its workmen, through which
 these 11 workmen have voluntarily resigned from the services of the
 Company.
 
 Industrial relations during the year remained cordial. The Board wishes
 to place on record its appreciation to all employees working at
 various levels in the Company for their devotion and sense of
 commitment.
 
 DIRECTORS
 
 During the year under review, Shri N. P. Achuthan and Shri C. Sukumaran
 joined the Board as Alternate Directors in place of Shri Lelio Segre
 and Shri Harry Furuberg respectively. The Board takes this opportunity
 to welcome these gentlemen and hopes that their rich experience and
 acumen will sincerely benefit your Company in the coming days. Shri. M.
 T. Shah, Shri. D. M. Shah & Shri. C. K. Thanawala have all resigned
 from the Board during the year 2002. The Board expresses its
 appreciation of the contribution of these Directors to the Company.
 
 In accordance to the provisions of the Companies Act, 1956 and as per
 Article 132 of the Articles of Association of the Company Shri Hans C.
 Gass retires by rotation and being eligible offers himself for
 re-appointment.
 
 AUDITORS
 
 At the ensuing Annual General Meeting, the members are requested to
 appoint Auditors for the current year and fix their remuneration.
 Messrs. N. A. Shah, Associates, Chartered Accountants, Mumbai, retire
 and though eligible for re-appointment have expressed their intention
 not to be re-appointed. The Company has received a special notice in
 accordance with Section 225, read with Section 190 of the Companies
 Act, 1956, from a member signifying his intention to propose the
 appointment of M/s Bharat S. Raut & Co., Mumbai as the Auditors of the
 Company. Your directors recommend their appointment. The Directors
 place on record their appreciation of the valuable advice and guidance
 rendered by M/s. N. A. Shah Associates to your Company during their
 tenure as Auditors.
 
 CORPORATE GOVERNANCE
 
 In terms of clause 49 of Listing Agreement with Stock Exchanges, the
 requirements as to corporate governance are required to be implemented
 by your Company by not later than 31st March, 2003.
 
 PARTICULARS OF EMPLOYEES
 
 There are no employees to whom the provisions of Sec. 217 (2A) of the
 Companies Act, 1956 read with the Companies (Particulars of Employees)
 Rules, 1975 applies.
 
 DISCLOSURE OF PARTICULARS
 
 Information as per Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988 relating to Conservation of Energy,
 Technology Absorption, Foreign Exchange Earnings and Outgo, is given in
 Annexure - `A to this report and forms an integral part of this
 report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956 inserted by the
 Companies Amendment Act, 2000, the Directors Responsibility Statement
 is given as Annexure - `B and forms an integral part of this report.
 
 MERGER WITH SANDVIK ASIA LIMITED
 
 Pursuant to the approval accorded to the Scheme of Arrangement of the
 Company with Sandvik Asia Limited by the shareholders of the Company at
 the Court convened meeting held on 21st January, 2002 the legal
 formalities of the merger are in progress.
 
 SUPPORT FROM KANTHAL AB, SWEDEN
 
 Your Directors wish to place on record their appreciation for the
 wholehearted support and co-operation, both technical and financial,
 extended by the Parent Company and its management during the period
 under review and are very much confident that the same will continue in
 future.
 
 ACKNOWLEDGEMENT
 
 The Board wishes to express appreciation and place on record its
 gratitude for the faith reposed in and co-operation extended to the
 Company by the Government of India, State Governments, various
 Government Agencies/Departments, Banks, Customers, Suppliers and
 Investors of the Company. Your Directors place on record their
 appreciation of the dedicated and sincere services rendered by the
 employees of the Company.
 
 ANNEXURE TO THE DIRECTORS REPORT
 
 Additional information given in terms of Notification 1029, dt.
 31.12.1988 issued by the Department of Company Affairs.
 
 1. CONSERVATION OF ENERGY
 
 As mentioned in the previous years report, the Company has already
 taken care during its production planning itself, to run the machines
 at optimum capacity over a period. This has helped in reducing idle
 running of the equipments and saving of electricity. It is not
 possible to quantify the savings.
 
 Total energy consumption and energy consumption per unit of production
 as required in Form A is not given, as the Company is not covered under
 the list of specified industries.
 
 2. TECHNOLOGY ABSORPTION
 
 The Company has initiated measures to raise its productivity and to
 bring the same in line with global standards and also to that of the
 Parent Company. Small investment have been made to upgrade existing
 facilities in our plant and regular interactions have been undertaken
 throughout the year with the highly efficient technicians of our Parent
 Company. Our Engineers have also been visiting Kanthal ABs plant at
 Sweden in order to keep themselves abreast of the latest developments
 taking place in the industry.
 
 3. FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The details of Foreign Exchange earnings and outgo are contained in
 Note No. 18 of Schedule No. 17 to the accounts.
 
 Pursuant to the provisions of Section 217(2AA) of the Companies Act,
 1956, the Directors hereby confirm:
 
 1) That in the preparation of the account for the financial year ended
 31st December, 2001, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 2) That the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and the
 profit of the Company for that period;
 
 3) That the Directors have taken proper and sufficient care 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 for preventing and detecting fraud and other
 irregularities;
 
 4) That the Directors have prepared the accounts for the financial year
 ended 31st December, 2001 on a `going concern basis.
 
                             For and on behalf of the Board of Directors
 
 Place: Mumbai                 Hans C. Gass                  Sumit Datta
 Date: 17th July, 2002             Chairman            Managing Director