CORPORATE INFORMATION Statutory Auditors Principal

GoldstoneGoldstone Infratech LimitedName of DirectorDate of BirthDate of AppointmentQualificationsExpertise in specific functional areasList of other companies in which directorshipsheldList of the Committees of other Companies inwhich chairmanship/Membership heldChairman/Member of the Committeesof the CompanyShareholding in the CompanyMr. M. Gopalakrishna, IAS (Retd.)12th January, 193929th October, 2007Graduate in Science & LawOver 40 Years of experience in Industry andBusiness SectorsNSL Textiles LimitedBGR Energy Systems LimitedJOCIL LimitedPitti Laminations LimitedVijayshri Organics LimitedKernex Microsystems LimitedNuzuveedu Seeds Pvt. LimitedSentini Bio-Products Pvt. LimitedAvra Laboratories Pvt. LimitedArani Power Systems Pvt. LimitedNSL Renewable Power Pvt. Limited1. Pitti Laminations Limited - RemunerationCommittee Member2. Kernex Microsystems Limited - AuditCommittee Member3. BGR Energy Limited Remuneration Committee - ChairmanAudit Committee - MemberShareholders Grievance Committee ChairmanAudit Committee - MemberRemuneration Committee - ChairmanNILBy order of the Board of DirectorsSd/Adalat SrikanthCompany SecretaryPlaceDate: Secunderabad: 30th August, 201111th Annual Report 2010-115

GoldstoneGoldstone Infratech LimitedDIRECTORS’ REPORTToThe MembersGoldstone Infratech LimitedYour Directors have pleasure in presenting the 11th Annual Report together with the Audited Statementsof Accounts of the company for the financial year ended 31st March 2011.Financial ResultsThe summarized financial results (Standalone) of the Company for the year ended 31st March,2011 as compared to the preceding year are as under: in Lakhs2009-10Particulars2010-11Gross SalesNet SalesOther IncomeTotal IncomeTotal ExpenditureOperating Profit (PBIDT)InterestDepreciation and Write OffsProfit Before TaxProvision for taxation CurrentDeferredProfit after TaxExtra-Ordinary ItemsTaxes pertains to previous yearPrior period adjustmentsNet ProfitSurplus brought forward from previous yearBalance available for appropriationAppropriations:Proposed Dividend on Equity SharesProvision for Dividend TaxTransfer to General ReservesSurplus carried forward to Balance SheetEquity Share Capital (3,60,80,737 Shares of 4/- each)E.P.S (After Prior Period Items) (Rupees)Net WorthBook Value in rupees (face Value of 4/- 7.8326.7961111th Annual Report 2010-11

GoldstoneGoldstone Infratech LimitedReview of OperationsDuring the year under review, your Companyhas achieved a gross turnover of 7295.39Lakhs as compared to 7035.09 Lakhs duringthe previous financial year. Inspite of slightincrease in the turnover, the Net Profit has comedown to 323.47 lakhs from 673.23 lakhs.This was mainly due to the reduction in sellingprices of the products, increased competition andhigher interest costs.To achieve forward integration and to reducethe dependency on outside suppliers for EndFittings, which is crucial for manufacture ofInsulators, the Company has set up a foundry inits manufacturing unit no. 2 at Plot No. 8, IDA,Gaddapotharam Village, Jinnaram Mandal,Medak District. The Management is working tobring this foundry into operation by April, 2012.When the foundry becomes fully operational, thecompany would be having all the facilities (endto end) under one roof and any excessproduction from this foundry could also be sold,which will give a contribution to the bottom line.Surge ArrestorsAs informed to the Members in the previousannual report, the Company sold a small quantityof this product during the year under review.The Company is expecting to increase the volumeof this product during the years to come.Solid Core InsulatorsSubstation Equipments like Solid Core andHollow Core insulators are presently beingmanufactured by the other players in the marketwith Porcelain material which has certaindisadvantages like causing heavy losses to thetransmission sector, low level of resistance to badweather conditions, frequent maintenance, etc.1211th Annual Report 2010-11With a view to expand the operations in this areaand to offer high quality product, theManagement is proposing to manufacture SolidCore Insulators. The company has alreadycompleted feasibility study and the in-house R&Dis working on this Project with an aim tocommence the commercial production of Solidcore Insulators during the current financial year.Keeping in view the existing market for thisproduct and the advantages that the product ishaving, the Management is confident that oncethe commercial production commences, it willfurther improve the financial performance of theCompany in the years to come. After successfulcommencement of commercial production of thisproduct, the Company is planning to go for theproduction of hollow core insulators, which maytake one more year.High Voltage InsulatorsYour Management is happy to inform that withthe objective to manufacture high voltageinsulators (which are more profitable), theCompany had entered into a TechnicalCollaboration Agreement with a reputed foreigncompany (Technology Provider). Thiscollaboration consists of transfer of technologicaldetails for the manufacture of Silicon RubberPolymer Insulators from and above 400KV to1100 KV of AC and DC of all combinations ofmechanical-strengths as may be required by yourCompany. The Technology Provider will offeractivation or installation support, includingassisting with the implementation of any Licensorsoftware, diagrams or technologicalupgradation, wherever applicable. Once theremaining formalities are over, yourManagement is of the opinion that the Companywould be in a position to commence commercialproduction of high voltage insulators and therebyincrease the profitability of the company.7

GoldstoneGoldstone Infratech LimitedDividendFixed depositsKeeping in view the funds requirement forreduction of interest costs, expansion anddiversifications plans of the Company, yourDirectors have recommended a dividend of 0.20 (i.e. 5%) per equity share of 4/- eachfor the year ended 31 st March 2011. Thepayment of dividend, if approved by theShareholders at the ensuing Annual GeneralMeeting, will entail an outflow of 83,86,786inclusive of Corporate Dividend Tax.The Company has not accepted any FixedDeposits, falling within the purview of Section58A of the Companies Act, 1956.Transfer to ReservesThe Board has transferred a sum of 32,34,675/- lacs to the General Reserve fromthe undistributed profits.Consolidated Financial Statements:In accordance with the Accounting StandardAS-21 on Consolidated Financial Statements, theaudited Consolidated Financial Statements areprovided in the Annual Report.Subsidiary Company:TF SolarPower Private Limited is the wholly ownedsubsidiary of the Company. In accordance withthe general circular issued by the Ministry ofCorporate Affairs, Government of India, theBalance Sheet, Profit and Loss Account and otherdocuments of the subsidiary company are notbeing attached with the Balance Sheet of theCompany. The Company will make available theAnnual Accounts of the subsidiary company andthe related detailed information to any memberof the Company who may be interested inobtaining the same. The annual accounts of thesubsidiary company will also be kept open forinspection at the Registered Office of theCompany. The Consolidated Financial Statementspresented by the Company include the financialresults of its subsidiary company.8InsuranceAll the properties of your Company including itsbuilding, plant & machinery and stocks have beenadequately insured.Management Discussion and AnalysisManagement Discussion and Analysis for theyear under review as required under Clause 49of the Listing Agreement entered with StockExchanges is given as a separate statement inthe Annual Report.AuditorsM/s. P. Murali & Company (FRN: 007257S),Chartered Accountants, Hyderabad, StatutoryAuditors of the Company holds office inaccordance with the provisions of the CompaniesAct, 1956 upto the conclusion of this AnnualGeneral Meeting and are eligible forreappointment. They being eligible, offerthemselves for re-appointment. They havefurnished a certificate stating that theirreappointment, if made, will be within the limitslaid down under Section 224(1B) of theCompanies Act, 1956.DirectorsMr. S Murali Krishna and Mr. M Gopalakrishnaretire by rotation and being eligible offerthemselves for re-appointment.The Board of Directors in their Meeting held on13th May 2011 has appointed Mr. S.D. Rama11th Annual Report 2010-11

GoldstoneGoldstone Infratech LimitedKrishna as Additional Director w.e.f13.05.2011Stock Exchange ListingPresently, the Equity Shares of the Company arelisted on National Stock Exchange of India (NSE),Bombay Stock Exchange Limited (BSE) andMadras Stock Exchange (MSE). As informed tothe members in the previous Annual Report, thede-listing approval from Madras Stock Exchangeis still awaited. The Company confirms that it haspaid Annual Listing Fees due to all the StockExchanges where the Company’s securities arelisted for the year 2011-12, except to the MadrasStock Exchange.Director’s Responsibility StatementIn accordance with the Section 217(2AA) of theCompanies Act, 1956, the Directors of theCompany, in respect of the financial year ended31st March, 2011, confirm that:(a) in preparation of the Accounts, theapplicable accounting standards have beenfollowed along with proper explanationrelating to material departures, if any;(b) They have selected such accounting policiesand applied them consistently and madejudgments and estimates that are reasonableand prudent so as to give a true and fairview of the state of affairs of the Companyat the end of the financial year and of theProfit of the Company for that year;11th Annual Report 2010-11(c) They have taken proper care for themaintenance of adequate accounting recordsin accordance with the provisions of theCompanies Act, 1956, for safeguarding theassets of the Company and for preventingand detecting fraud and other irregularities.(d) They have prepared the Annual Accountson a going concern basis.Corporate GovernanceA report on Corporate Governance includingAuditor Certificate thereon as per Clause 49 ofthe Listing Agreement is attached to this Report.Managing Director and Chief FinancialOfficer CertificationAs required under the SEBI Guidelines, theManaging Director and the Head of the FinanceFunction Certification is attached to this Report.BalanceSheetAbstractandCompany’s General Business ProfileInformation pursuant to notification issued by theMinistry of Corporate Affairs relating to theBalance Sheet Abstract and Company’s GeneralBusiness Profile is given in the Annual Report forinformation of the Shareholders.Particulars of Conservation of energy/technology absorption, foreignexchange earnings and outgoings:Information required to be furnished as per theCompanies (Disclosure of particulars in theDirectors Report) Rules 1998 is furnished below:9

GoldstoneGoldstone Infratech Limited1. CONSERVATION OF ENERGYa. Energy Conservation Measurestaken or under implementationDuring the period the company had1) Installed Energy Meters to each and everymachine to analyze power consumption ondaily basis; 2) Installed new software inDesma 400 ton machines to save powerconsumption at the time of mould curingperiod. Arranged Hydraulic Motor OFFoption at the time of curing time; 3) Installedstar Delta starters in the place of normalD.O.L starters to reduce power consumptionon water pumps which are using at waterchillers; 4) Installed Variable frequencydrive for Air Compressor Motor and savedenergy at loading and unloading time;5) Reconditioned the Moulding m/c - 1screw and increased its efficiency. Now itsproduction has been increased by utilizingthe same energy; 6) Arranged additionalchilled water line from 30 TR chiller toinjection moulding machines so that the 85TR chiller can be stopped while running lessno of machines and 7) Increased FRP rodsproduction from 2 rods to 4 rods(M/c-2)and increased FRP machine efficiency byusing same power.b. Additional investment andproposalsifany,beingimplemented for reduction ofconsumption of energyAdditional/new measures will be initiatedfor further reduction in energy consumptionbased on technical evaluation and study ofthe measures already implemented.c. Impact of measures at (a) and (b)forreductionofenergyconsumption and consequentimpact on the cost of production ofgoodsThe measures taken during the year hasensured optimum use of energy andincreased efficiency.d. Consumption of Energy Particulars.2010-20112009-2010A. PurchasedUnits – KWHTotal Amount – In RupeesRate/Unit – In B. Own Generation through Diesel GeneratorUnits – KWHTotal Amount – In RupeesRate/Unit – In Electricity2. TECHNOLOGY ABSORPTION :Research and Developmenta. Specific Areas in which R&D carriedout by the companyThe Company has taken up Research andDevelopment in Solid Core Insulators and10High Voltage insulators with a view to offermost viable and efficient product to themarket. Research activity has been focusedon backward integration to reducedependence on outside suppliers, to reducethe process loss so as to be more competitivein the market.1311th Annual Report 2010-11

GoldstoneGoldstone Infratech Limitedb. Benefits derived as results of theabove R & D: Achieved higher productivity in distributionclass insulators Able to reduce wastages Able to increase efficiency Dependency on imports reduced Achieved better quality controlc.Future Plan of Action1100 KV and manufacture of Solid CoreInsulators. A few new products have been identifiedafter a thorough study of the market; andthe technology for manufacturing therelated products would be developed inthe In house R & D Lab Focus to improve the existing processtechnology Manufacture of Silicon Rubber PolymerInsulators of 400 KV and above up to( In lakhs)3. FOREIGN EXCHANGE EARNINGS AND OUT GOParticularsa) Value of Imports on CIF Basis Raw Materials Capital 2.319.885.61124.32Nilb) Expenditure in Foreign Currency Traveling Expenses Othersc) Earnings in Foreign Currency (on receipt basis) Export of Goods (FOB Basis)Particulars of EmployeesNone of the Employees are drawingremuneration prescribed in Section 217(2A) ofthe Companies Act, 1956, read with Companies(Particulars of Employees) Rules, 1975 asamended.Your Directors thank all the Employees of yourcompany for their dedicated service. YourDirectors thank the shareholders for theirsupport and confidence reposed in the companyand the management and look forward to theircontinued co-operation and support.PersonnelPersonnel relations have remained very cordialduring the period.AcknowledgementsYour Directors convey their sincere thanks toState Bank of Hyderabad, Syndicate Bank,Allahabad Bank and Technology DevelopmentBoard for their support, guidance and assistance.1411th Annual Report 2010-11For and on behalf of the BoardSd/-Sd/-L P SashikumarManaging DirectorB Appa RaoDirectorPlace: SecunderabadDate: 30th August, 201111

GoldstoneGoldstone Infratech LimitedCERTIFICATE FROM THE MANAGING DIRECTOR & THE PRESIDENTWe, L P Sashikumar, Managing Director and Surendra Kabra, President of Goldstone InfratechLimited, responsible for the finance function, certify that:(a)We have reviewed financial statements and the cash flow statement for the year ended 31stMarch, 2011 and that to the best of our knowledge and belief, we state that:(i)these statements do not contain any materially untrue statement or omit any material factor contain statements that may be misleading;(ii)these statements give a true and fair view of the Company’s affairs and of the results ofoperations and cash flow. The financial statements have been prepared in conformity, inall material respects, with the existing generally accepted accounting principles includingaccounting standards, applicable laws and regulations.(b)There are, to the best of our knowledge and belief, no transactions entered into by the Companyduring the year which are fraudulent, illegal or in violation of company’s code of conduct.(c)We accept responsibility for establishing and maintaining internal controls for financial reporting.We have evaluated the effectiveness of internal control systems of the Company pertaining tofinancial reporting and have not noticed any deficiency that need to be rectified or disclosed tothe Auditors and the Audit Committee.(d) During the year under reference (i)there were no significant changes in the internal control and overall financial reporting;(ii)no significant changes in accounting policies were made that require disclosure in thenotes to the financial statements; and(iii) no instance of significant fraud and the involvement therein, if any, of the managementor an employee having a significant role in the Company’s internal control system overfinancial reporting, has come to our notice.Sd/L P SashikumarManaging DirectorSd/Surendra KabraPresidentPlace: SecunderabadDate: 30th August, 2011121511th Annual Report 2010-11

GoldstoneGoldstone Infratech LimitedMANAGEMENT DISCUSSION ANALYSISAND BUSINESS OUTLOOKA. INDUSTRY OVERVIEW:Economic growth and infrastructuredevelopment have lent impetus to the growthof the electrical insulator industry. Insulatorsare integral to power transmission throughoverhead lines since they provide mechanicalsupport and electrical protection. Globally,the size of insulator industry is valued at 15,000 crore and the Indian market at 1500 crore. The industry is posting ahealthy growth and demand is growing.Apart from capacity addition and newprojects, replacement and up gradation areother growth drivers.This industry is considered to be mature inIndia and the technology level too iscontemporary. India also exports a largequantity of insulators to many countriesincluding developed markets. The insulatorindustry has gained global reco

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