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Directors Report of Salzer Electronics Ltd.

Mar 31, 2014

Dear Members,

The Directors, with great pleasure, are presenting this report on the performance of the Company together with the Audited Annual Financial Statements comprising of the Balance Sheet as at 31.03.2014 and Statement of Profit & Loss for the year ended on that date.

PERFORMANCE

The Financial year 2013-14 was considered to be a year, where Indian Economy at large faced several challenges for growth, due to market constraints both in domestic and international markets, which has impacted the industrial growth during the year under review.

Under these circumstances, the performance of your company for the year under review has not only sustained but also registered a modest growth of 9%. The gross turnover is Rs.26763.84 lakhs during the year under report as against Rs.24587.28 lakhs during the corresponding period last year. In the last five years, your Company has grown at a Compounded Annual Growth Rate (CAGR) of 20% in terms of turnover inspite of the severe volatility in the economic and market conditions due to its strong fundamentals and strategic cost competitiveness in all fronts. Similarly, the profitability of your company has also registered a growth of 24% in PBT - Rs. 1169.17 lakhs during the year under review as against Rs.942.31 lakhs during last year and the Profit After Tax (PAT) has registered a growth of 20% - 844.29 lakhs as against the Rs.706.29 lakhs during the corresponding period last year. Further, the EBITDA worked out to around I3.6%, PBT around 5% and PAT around 3.5% on the net revenue of the company during the year under review. The financial highlights for the year under review vis-a-viz the corresponding period last year are as under:

FINANCIAL HIGHLIGHTS: Rs. In laksh

PARTICULARS 31/03/2014

Rs. Rs.

I Revenue from operations: 24452.89

II Other Income 93.23

III Total Revenue (I II) 24546.12

IV (Less)Operating Expenses

a) Cost of Materials Consumed 17409.14

b) Changes in inventories of finished goods and work in progress (584.53)

c) Employee benefits expenses 1313.15

d) Other expenses 3293.28 21431.04

V Operating Profit (III-IV) 3115.08

a) (Less)Finance Costs 1194.13

b) (Less)Depreciation and amortization expenses 751.78

1945.91

VI Profit before tax 1169.17

VII Less :Tax expense:

a) Current tax 301.09

b) Deferred tax 23.80 324.89

VIII Profit After Tax 844.28

IX Earnings per equity share:

a) Basic (in Rs.) 8.21

b) Diluted (in. Rs.) 8.21

FINANCIAL HIGHLIGHTS: Rs. In laksh

PARTICULARS 31/03/2013

Rs. Rs.

I Revenue from operations: 22873.04

II Other Income 139.18

III Total Revenue (I II) 23012.22

IV (Less)Operating Expenses

a) Cost of Materials Consumed 16059.15

b) Changes in inventories of finished goods and work in progress (318.45)

c) Employee benefits expenses 1228.22

d) Other expenses 3057.70 20026.62

V Operating Profit (III-IV) 2985.60

a) (Less)Finance Costs 1176.59

b) (Less)Depreciation and amortization expenses 866.70

2043.29

VI Profit before tax 942.31

VII Less :Tax expense:

a) Current tax 239.35

b) Deferred tax (3.33) 236.02

VIII Profit After Tax 706.29

IX Earnings per equity share:

a) Basic (in Rs.) 6.87

b) Diluted (in Rs.) 6.87

DIVIDEND

Your Company is sparing no efforts to recognize the value and interest of the shareholders both in good and bad times and also consistently paying dividend since 1991-92. Accordingly, taking into account performance of the company during the year under review as well as the future business exigencies such as growth potentials, foreseeable risk and sustainability of the investor interest to ensure them appropriate return on their investments, the company has been maintaining payment of dividend at 12% for the last two years. Similarly, for the financial year 2013-14 also your Board of Directors thought it prudent to judicially recommend a dividend at a rate of 15% (Rs.1.50 per share) on the paid up capital of the company Rs.1028.37 lakhs as at 31.03.2014. The dividend at the above rate will work out to dividend payment of Rs.154.26 lakhs and also a dividend tax of Ra.26.22 lakhs - in aggregate the total dividend payout will be Rs.180.47 lakhs. Once dividend is declared by the shareholders, the same will be paid to all the eligible shareholders, whose name appear in the register of members as on 09.08.2014 i.e., date of AGM.

FOREIGN INVESTMENT

Aiming to globalize the trading of the products of your Company efficiently, your Company formed M/s.Salzer Global Services, LLC, USA (SGS) with 40% controlling interest in United States. This venture since formation has been facilitating your Company to identify the market opportunities in Unites States and serving them without any loss of time besides establishing proximity of contacts with the customers in this market as was evident in steady growth of export sales. As part of diversification, M/s. Salzer Global Services, LLC acquired 100% controlling interest in a IT and ITES Corporation viz., M/s.Global Technical Talent, Inc, USA, a leading outsourcing firm providing services in the areas of human resources for the IT and ITES companies in USA and Canada. In the face of gradual recovery of United States economy after several depressions, Global Technical Talent, Inc posted healthy results by having recorded revenue growth of 36% during the calendar period ending 31/12/2013 and projected revenue growth of 34% in 2014. Hence your Directors are confident that your company''s strategic investment in M/s.Salzer Global Services LLC, USA will provide suitable returns in the long run.

RESEARCH & DEVELOPMENT

In-house Research and Development department, duly recognized by the Government of India, Ministry of Science & Technology, Department of Scientific and Industrial Research, fully equipped with qualified people, continues with its efforts on improvement of process specifications to ensure cost reduction and the rejection levels consistently in addition to development of new products with innovative design and utility to meet the market preferences with power efficient and high-tech products. This continuous effort of the Research and Development Department will definitely not only add the new product profile but also to ensure the continuous growth of the company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO - UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Your Company being a modest power intensive one continues to ensure measures for conservation of energy wherever possible. Your Company is having Four Wind Mills to generate power to the extent of 1.2 MW through renewable resources - wind and generated 19.19 lakhs units of power and earned an income of Rs.97.94 lakhs. Details are furnished in Annexure - I for your information pursuant to the provisions of Sec.217(1)(e) of the Companies Act, 1956.

Your company''s operations aim -

* to ensure the continued existence and success of our Company by establishing and maintaining a safe working environment that promotes the health and performance of our employees as well as taking active measures to protect the environment.

* to actively use global work safety management systems for continuous improvement.

* to pay special emphasis on ergonomic design.

* to observe all legislation and specifications regarding work safety.

* to take comprehensive measures to protect our employees against health hazards.

* to ensure Comprehensive and effective emergency measures are in place at all locations to ensure that our employees and visitors receive proper care in the event of any emergency.

* to continue to maintain quality standard certifications viz., ISO 9001-2008, Environmental Management System (EMS) -14001, OHSAS (Occupational Health and Safety) Management System 18001.

INFORMATION UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) AMENDMENT RULES 1999.

The provisions of Section 217 (2A) of the Companies Act, 1956 and rules made thereof are not applicable, as no employee was in receipt of remuneration to the extent laid down therein.

DIRECTORS

During the year under review Mr.Nirmal Kumar M Chandria, Mr.PK.Shah, Mr.V.Sankaran and Mr.N.Jayabal, Directors of the Company are retiring by rotation and being eligible offer themselves for re-appointment.

In compliance with the requirement of Clause-49 of the Listing Agreement the details pertaining to the Directors seeking for appointment are given in the Note forming part of Notice calling the meeting.

CORPORATE GOVERNANCE:

Pursuant to the provisions of Clause-49 of the Listing Agreement, your Board of Directors is pleased to place their report on the Corporate Governance duly certified by the Auditors of the Company, for information of shareholders as an annexure to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, the Directors of your Company confirm:

(i) that all applicable accounting standards have been followed in preparation of Annual Accounts and that there are no material deviation;

(ii) 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 31st March, 2014 and of the Profit & Loss of the Company for the year ended on that date;

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis ;

(v) that the Company is having appropriate systems to ensure the compliance of all laws applicable to the Company;

(vi) that the Company is having appropriate system to ensure payment of statutory dues in time without any delay.

Employees Stock Option Scheme (ESOS)

As a part of recognition of the contributions made by the employees all these years and influencing their inherent potentialities for the further growth of your Company, a stock option scheme - Salzer Electronics Limited Employees Stock Options Scheme 2012-13 - has been instituted with necessary sanctions granted by the Members at their 27th Annual General Meeting held on 11th August 2012 for the purpose of issuance of stock options to the Eligible Employees of your Company.

The Employees Compensation Committee, constituted by the Board in accordance with SEBI Guidelines for administration of the Scheme, granted 10,28,000 Stock Options with one year vesting period to the identified employees on 19th November 2013 at a price of Rs.40/- per option as against the previous day closing market price of Rs.48.60 at Bombay Stock Exchange, resulting in a discount 17.70%.

The information furnished under SEBI (ESOS & ESPS) Guidelines, 1999

Title of the Scheme :

Salzer Electronics Limited Employees Stock Option Scheme 2012-13

Options granted :

10,28,000 options at issue of Rs.40 per option

The pricing formula :

The latest available closing price on Bombay Stock Exchange on 18.11.2013, preceding the date of grant on 19.11.2013 Rs.48.60 per share.

Employees Compensation Committee has approved the exercise price of Rs.40/- per equity share at its meeting held on 19.11.2013

Options vested :

Yet to take place, since the vesting commences only on 19.11.2014.

Options exercised :

Yet to take place. The exercise period commences only on 19.11.2014 and ends on 18.11.2019

the total number of shares arising as a result of exercise of option :

As at 31.03.2014 no employees have opted vesting their right on the options granted to them. The exercise period commences on 19.11.2014 & ends on 18.11.2019.

options lapsed : NIL

variation of terms of options : NIL

money realized by exercise of options total number of : NIL

options in force : 10,28,000 Options (Unvested)

employee wise details of options granted to :

Senior managerial personnel : NIL

Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year : NIL

Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital

(excluding outstanding warrants and conversions) of the company at the time of grant : NIL

Diluted Earnings Per Share (EPS) : Rs.8.21 pursuant to issue of shares on During the year exercise of option calculated in under review, since no accordance with employee has opted their right to vest the options granted to them, computation of diluted earnings per share will not arise.

Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and : -

the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company disclosed. Weighted-average exercise prices and weighted -average fair values of options disclosed separately : -

for options whose exercise price either equals or exceeds or is less than the market price of the stock A description of the method and significant assumptions used during the year to estimate the : -

fair values of options, including the following weighted-average information:

(i) risk-free interest rate,

(ii) expected life,

(iii) expected volatility,

(iv) expected dividends, and

(v) the price of the underlying share in market at the time of : - option grant.]

AUDITORS

M/s.JDS Associates, Chartered Accountants, Coimbatore, the retiring Auditors have conveyed to the company their intension not to get re- appointed pursuant to the provisions of Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014.

Accordingly, M/s.Swamy & Ravi, Chartered Accountants, Coimbatore, Statutory Auditors of the Company retire at the conclusion of this Annual General Meeting and are eligible for the re-appointment for a term of five years.

AUDITORS'' REPORT

The observations made in Independent Auditors'' Report read together with notes thereon are self explanatory and hence do not call for any further comments under section 217 of the Companies Act, 1956.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act 1956 and the rules made there under during the year under review and did not have any fixed deposit as at 31.03.2014.

INDUSTRIAL RELATIONS

The Industrial relations during the year under review remained very cordial.

BANK LOAN RATING

M/s. CRISIL Limited who have rated the Bank Loan facilities has rated the Company as under:

Loan Term Rating : CRISIL A-/Stable (Reaffirmed)

Short Term Rating : CRISIL A2 (Reaffirmed)

LISTING ARRANGEMENTS

The Company''s shares are listed in BSE Limited, which has got the National Wide Trading Terminals to enable the investors to trade in the shares of the Company.

DEMATERIALISATION OF YOUR COMPANY''S SHARES

The shares of your Company are admitted for dematerialization on Central Depository Services (India) Ltd (CDSL) and National Securities Depository Ltd (NSDL) under ISIN No. INE457F0I0I3. The shareholders have the option of holding their shares either in physical form or in dematerialized form.

ACKNOWLEDGEMENT

Your Directors place on record their deep sense of appreciation and gratitude to the Shareholders, various Government Agencies, Canara Bank, Bank of India, Union Bank of India, ICICI Bank, Citi Bank NA, M/s. HDFC Bank, M/s. Larsen & Toubro Limited - Marketing Associates, M/s.Plitron Manufacturing Inc, Canada (Collaborators), CRISIL, M/s.GNSA Infotech Ltd, (Registrar & Share Transfer agent) for their continued support and co-operation. Your Directors also wish to record their appreciation for the dedicated services being rendered by the employees at all levels.

For and on behalf of the Board

Place : Coimbatore (Sd/-) N RANGACHARY Date : 10.05.2014 CHAIRMAN


Mar 31, 2013

The great pleasure your Directors are presenting this 28th Annual Report together with the Audited Annual Accounts of the Company for the year ended March 31,2013.

PERFORMANCE

During the year under review, the industrial scenario both in domestic and international markets have been very very critical and the economic and market constraints are continue to be under duress and the recovery process is very slow and sluggish. Under these circumstances, your company has been taking all out efforts not only to maintain its sustainability but also to improve its performance and market share both in domestic and international markets. Your company has achieved a gross turnover of Rs.24587.28 lakhs during the year under review as compared to Rs.24027.95 lakhs during the corresponding period last year and registered a marginal growth of around 3%. Your company''s net revenue worked out to Rs.23012.22 lakhs during the year as against Rs. 22378.60 lakhs during the corresponding period last year registered a growth of 2.83%. This is possible due to the concerted efforts being taken by your company to be cost competitive in all areas, when the engineering industry in general and electrical equipment industry in particular has registered a negative growth during the year under review for the first time in 10 years, which is attributable to very high volatility in the input cost of raw materials such as Copper, Silver, Brass, PVC, etc., and labour cost, coupled with the acute power crises with resultant increase in the power and fuel cost. Due to the market constraints, your company could not adopt its pricing on back-to back basis to cover the volatility in the input cost and could able to obtain the price increase only to the limited extent. The performance highlight of your company during the year under review is as under:

FINANCIAL RESULTS :

31.03.2013 31.03.2012 PARTICULARS (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs) (Rs. in Lakhs)

I Revenue from operation 22873.80 22287.80

II Other Income 13.92 90.80

III Total Revenue (I II) 23012.22 22378.60

IV (Less) Operating Expenses

a) Cost of Materials Consumed 16059.15 15882.48

b) changes in inventories of -318.45 -452.35 finished good and work in progress

c) Employee benefits expenses 1228.22 970.39

d) Other expenses 3057.70 20026.62 3011.12 19411.64

V Operating Profit (III-IV) 2985.60 2966.96

a) (Less) Finance Costs 1176.59 1159.21

b) (Less) Depreciation and 866.70 795.92 amortization expenses

2043.29 1955.13

VI Profit before tax 942.31 1011.83

VII Less :Tax expense:

a) Current tax 239.35 256.75

b) Deferred tax (3.33) 236.02 (64.26) 192.49

VIII Profit After Tax 706.29 819.34

IX Earnings per equity share:

a) Basic (in Rs.) 6.87 7.97

b) Diluted (in.Rs) 6.87 7.97

DIVIDEND

Taking into account the prevailing economic and market conditions, slow recovery process as well as the negative growth prevailed in the electrical equipment industry during the year 2012 13, which works out to around 8%, your company could able to sustain and registered a marginal growth during the year under review under the prevailing sluggish conditions. However, in order to keep the investors morale considering their long term co- operation and support in the endeavours of your company, which enabled the company to achieve the height of date, your Board of Directors have recommended a modest dividend @12% - Rs.1.20 per equity share of Rs. 10/- each, for the year ended 31.03.2013 on the paid up capital of Rs. 10,28,37,370/- to all the eligible shareholders whose name appear as on 10.08.2013 i.e, the date of AGM. The dividend payout works out to Rs. 144.38 lakhs comprising of Dividend on the paid up capital of Rs. 1028.37 lakhs @ 12% - Rs. 123.41 lakhs plus Dividend Tax @ 16.995% - Rs.20.97 lakhs.

FOREIGN INVESTMENT

The investments made in M/s.Salzer Global Services, LLC, USA (SGS) is strategically made to keep the furtherance of market share in the international markets particularly USA and Canada, where the company''s products have been well received and also to provide proximity of contacts at these markets. As reported in our earlier reports, Salzer Global Services LLC, USA (SGS) have controlling interest in a IT and ITES Corporation viz.. M/s.Global Technical Talent, Inc, USA, who is providing services in the areas of human resources for the IT and ITES companies in USA and Canada. In view of the progressive recovery process of recessionary conditions in US economy, the potentials appear to be very progressive and hence your Directors are confident that your company''s strategic investment in M/s.Salzer Global Services LLC, USA will provide suitable returns in the long run.

RESEARCH & DEVELOPMENT

In-house Research and Development department, duly recognized by the Government of India, Ministry of Science & Technology, Department of Scientific and Industrial Research, fully equipped with qualified people, continues with its efforts on improvement of process specifications to ensure cost reduction and the rejection levels constantly in addition to development of new products with innovative design and utility to meet the market preferences with power efficient and high-tech products. This continuous effort of the Research and Development Department will definitely not only add the new product profile but also to ensure the continuous growth of the company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO - UNDER SECTION 217(l)(e) OF THE COMPANIES ACT, 1956

Your Company being a modest power intensive one continues to ensure measures for conservation of energy wherever possible. Your Company is having Four Wind Mills to generate power to the extent of 1.2 MW through renewable resources wind and generated 19.89 lakhs units of power and earned an income of Rs. 101.26 lakhs. Details are furnished in Annexure I for your information pursuant to the provisions of Sec.217(l)(e) of the Companies Act, 1956.

Your company''s operations aim

- to ensure the continued existence and success of our Company by establishing and maintaining a safe working environment that promotes the health and performance of our employees as well as taking active measures to protect the environment.

- to actively use global work safety management systems for continuous improvement.

- to pay special emphasis on ergonomic design.

- to observe all legislation and specifications regarding work safety.

- to take comprehensive measures to protect our employees against health hazards.

- to ensure Comprehensive and effective emergency measures are in place at all locations to ensure that our employees and visitors receive proper care in the event of any emergency.

- to continue to maintain quality standard certifications viz., ISO 90012008, Environmental Management System (EMS) -14001, OHSAS (Occupational Health and Safety) Management System 18001.

INFORMATION UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) AMENDMENT RULES 1999.

The provisions of Section 217 (2A) of the Companies Act, 1956 and rules made thereof are not applicable, as no employee was in receipt of remuneration to the extent laid down therein.

DIRECTORS

During the year under review Mr.R.Narayanaswamy, Mr.R.Dhamodharaswamy, Mr.Kantilal V Vaakharia and Mr.Howard M Gladstone Directors of the Company are retiring by rotation and being eligible offer themselves for re-appointment.

In compliance with the requirement of Clause-49 of the Listing Agreement the details pertaining to the Directors seeking re-appointment are given in the Note forming part of Notice calling the meeting.

CORPORATE GOVERNANCE:

Pursuant to the provisions of Clause-49 of the Listing Agreement, your Board of Directors is pleased to place their report on the Corporate Governance duly certified by the Auditors of the Company, for information of shareholders as an annexure to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, the Directors of your Company confirm:

i) that all applicable accounting standards have been followed in preparation of Annual Accounts and that there are no material deviation;

ii) 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 31st March, 2013 and of the Profit & Loss Account of the Company for the year ended on that date;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts have been prepared on a going concern basis;

v) that the Company is having appropriate systems to ensure the compliance of all laws applicable to the Company;

vi) that the Company is having appropriate system to ensure payment of statutory dues in time without any delay.

AUDITORS

M/s.JDS Associates, Chartered Accountants, Coimbatore, and M/s.Swamy & Ravi, Chartered Accountants, Coimbatore, Statutory Auditors of the Company retire at the conclusion of this Annual General Meeting and are eligible forthe re-appointment.

AUDITORS'' REPORT

The observations made in Independent Auditors'' Report read together with notes thereon are self explanatory and hence do not call for any further comments under section 217 of the Companies Act, 1956.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act 1956 and the rules made there under during the year under review and did not have any fixed deposit as at 31.03.2013.

INDUSTRIAL RELATIONS

The Industrial relations during the year under review remained very cordial.

BANK LOAN RATING

M/s. CRISIL Limited who have rated the Bank Loan facilities has rated the Company as under

Loan Term Rating - CRISIL A-/Stable (Reaffirmed)

Short Term Rating CRISILA2 (Reaffirmed)

LISTING ARRANGEMENTS

The Company''s shares are listed in Bombay Stock Exchange which has got the National Wide Trading Terminals to enable the investors to trade in the shares of the Company.

SEBI, vide its order No.WTM/RKA/MRD/12/2013 dated 03/04/2013, ceased the recognition of the Coimbatore Stock Exchange. Accordingly, Coimbatore Stock Exchange vide its letter dated 10.04.2013 advised the Company to discontinue henceforth Compliance requirements under Listing Agreement with Coimbatore Stock Exchange Limited.

Your Company has also applied to enlist its shares in the National Stock Exchange which is under process.

DEMATERIALISATION OF YOUR COMPANY''S SHARES

The shares of your Company are admitted for dematerialization on Central Depository Services (India) Ltd (CDSL) and National Securities Depository Ltd (NSDL) under ISIN No. INE457F01013. The shareholders have the option of holding their shares either in physical form or in dematerialized form.

ACKNOWLEDGEMENT

Your Directors place on record their deep sense of appreciation and gratitude to the Shareholders, various Government Agencies, Canara Bank, Bank of India, Union Bank of India, ICICI Bank, CITIBANK, M/s. HDFC Bank, M/s. Larsen & Toubro Limited - Marketing Associates, M/s.Plitron Manufacturing Inc, Canada (Collaborators), CRISIL, M/s.GNSA Infotech Ltd, (Registrar & Share Transfer agent) for their continued support and co- operation. Your Directors also wish to record their appreciation for the dedicated services being rendered by the employees at all levels.

For and On behalf of the Board

Place : Coimbatore (Sd/-)P.S.SANTHANAKRISHNAN

Date : 29.05.2013 CHAIRMAN


Mar 31, 2012

The great pleasure your Directors are presenting this 27th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2012.

PERFORMANCE

During the year under review, in spite of the prevailing economic and market constraints both in domestic and international markets, your Company has maintained its sustainability in its performance and market share and has achieved a gross turnover of Rs.24027.95 lakhs as against Rs.19135.04 lakhs during the corresponding period last year registering a growth of around 26%. Your company's net revenue worked out to Rs.22378.60 lakhs as against Rs.18133.18 lakhs during the corresponding period last year registered a growth of 23%. The volatility in the input cost such as Copper, Silver, Brass, PVC, etc., and labour cost, the constraints of pricing due to market forces, power and fuel cost due to the severe power-cut prevailing in the region and the interest cost has impacted and caused stress and strain on the margin i.e., Profit Before Tax as well as Profit After Tax during the year under review. The financial performance of the company during the year under review is as under:

FINANCIAL HIGHLIGHTS: Rs. in lakhs

PARTICULARS 31/03/2012 31/03/2011

Rs. In Lakhs Rs. In Lakhs Rs.in lakhs Rs.in lakhs

I Revenue from operations: 22287.80 18065.44

II Other Income 90.80 67.74

III Total Revenue (I II) 22378.60 18133. 18

IV (Less)Operating Expenses

a) Cost of Materials Consumed 15882.48 12668.05

b) Changes in inventories of (452.35) (902.11) finished goods and work in progress

c) Employee benefits expenses 970.39 845.10

d) Other expenses 3011.12 19411.64 2873.70 15484.74

V ~ Operating Profit (III-IV) ~ 2966.96 2648.44

a) (Less)Finance Costs 1159.21 889.95

b) (Less) Depreciation and 795.92 690.10

Amortization expenses 1955.13 1580.05

VI Profit before tax 1011.83 1068.39

VII Less :Tax expense:

a) Current tax 256.75 222.62

b) Deferred tax (64.26) 192.49 (59.62) 163.00

VIII Profit After Tax 819.34 905.39

IX Earnings per equity share:

a) Basic (in Rs.) 7.97 8.80

b) Diluted (in. Rs.) 7.97 8.80

DIVIDEND

With due regard to the prevailing economic and market conditions both in domestic and international markets and also the performance of the company during the year under review viz-a-viz the potentials under the competitive environment and also the shareholders interest, your Board of Directors have thought it prudent to maintain the dividend at the modest level. Accordingly your Board of Directors have recommended a dividend @ 12% - Rs.1.20 per equity share of Rs.10/- each, for the year ended 31.03.2012 on the paid up capital of Rs.10,28,37,370/- to all the eligible shareholders whose name appear as on 11.08.2012 i.e, the date of AGM. The dividend payout works out to Rs.143.42 lakhs comprising of Dividend on the paid up capital of Rs.1028.37 lakhs @ 12% - Rs.123.40 lakhs plus Dividend Tax @ 16.2225% - Rs.20.02 lakhs.

FOREIGN INVESTMENT

The investments made in M/s.Salzer Global Services, LLC, USA (SGS) is strategically made to keep the furtherance of market share in the international markets particularly USA and Canada, where the company's products have been well received and also to provide proximity of contacts at these markets. As reported in our earlier reports, Salzer Global Services LLC, USA (SGS) have controlling interest in a IT and ITES Corporation viz., M/s.Global Technical Talent, Inc, USA, who is providing services in the areas of human resources for the IT and ITES companies in USA and Canada. In view of the progressive recovery process of recessionary conditions in US economy, the potentials appear to be very progressive and hence your Directors are confident that your company's strategic investment in M/s.Salzer Global Services LLC, USA will provide suitable returns in the long run.

MANAGEMENT DISCUSSION AND ANALYSIS OF THE RISKS Overview

Our Economy, during the financial year 2011-12, witnessed a mixed trend only. The year, marked with the inflationary trends such as high volatility in crude oil prices, global currency fluctuations and liquidity constraints particularly in European markets, hike in interest rates by the Reserve Bank of India to contain the inflationary constraints, cost hike in materials like Copper, Silver, Brass, PVC, etc., have posed a greater stress and strain on the Indian economy, which in turn slowdown the reform process and development of infrastructure facilities. The Indian Corporate has the impact of the same in framing the growth strategies to ensure the industrial development and adopting a phased manner strategy in formulating the growth plans. During the year 2011-12, the Nation'S GDP growth is only 6.9% as against the target of 8.5% and also as compared to 8.4% of growth in 2010-2011.

Business environment review

During the financial year 2011-12, though Indian Corporate fared better in terms of their revenue stream the bottom line of the manufacturing sector was under severe stress and strain caused by more finance and input cost. The measures of Reserve Bank of India to contain the mounting inflation by frequent hike in interest rate led to severe cascading effect on finance and input cost of any company. In a bid to arrest the cost escalation, the Indian Corporate needed to effect some austerity measures in the form of deferment of expansion, diversification, closing down un-viable units and severe rationalization of the human resources. Further the industries have constraints and limitation in their pricing policies to match the input cost hikes due to the stiff competitive conditions in the market. The Index of Industrial Production (IIP) growth in March 2012 was dampened by de-growth displayed by the manufacturing (4.4%) which clearly indicating that the Financial year 2012-13 will be a crucial and challenging year for the growth of the Industry. Unless the Government accelerates the reform process, the growth of the industry will remain sluggish. Hence, growth oriented fiscal measures and policies are the need of the hour for sustainable development and growth of the Indian Industry.

Sect oral performance

The Indian electrical equipment industry comprising of multinationals, large, medium & small players is quite capable of producing, supplying and exporting a wide variety of electrical equipment/ products with contemporary technology.

During the financial year 2011-12, the Indian Electrical Equipment Industry's growth decelerates to 6.60% on account of sluggish growth in Power Sector and escalating imports severally impacting the domestic industry. This de-growth clearly implies distinct slowdown in industrial capex activities and slowdown in off-take by users due to credit squeeze, high interest costs, etc.

Growth rate of the Indian electrical equipment industry has decelerated to 6.6% in 2011-12 as compared to 11.3% and 13.7% in 2009-10 and 2010-11 respectively, according to data compiled by the Indian Electrical and Electronics Manufacturers' Association (IEEMA). IEEMA, in its report stated that sluggish growth in the power sector and the escalating imports of electrical equipment is significantly impacting the commercial viability of the domestic electrical equipment industry and will have severe long term consequences. All three segments of the power sector - generation, transmission and distribution are facing several challenges which need to be addressed expeditiously.

As per IEEMA Report, Growth in the capacitor, switchgear and transmission line sectors in 2011-12 turned negative, implying distinct slowdown in industrial capex activities and slowdown in off-take by users due to credit squeeze, high interest costs, etc. The cable industry is the only sector that has shown a double digit growth of 25.7% in the year.

Absence of a level playing field for the domestic industry to compete with imported electrical equipment, especially from China, is a clear and present threat. Imports of electrical equipment have grown in the past five years at a CAGR of 28.28%. Current export-import trends based on 27 major ports trade data indicates that imports continue to rise for 765 Kv transformers & reactors (mostly through power project imports), insulators, LV switchgear and HV cables.

According to IEEMA, urgent policy interventions are required by both the Central and the State Governments to check the deceleration in growth of the electrical equipment industry and also seeks urgent attention from Central Government at the highest level for conducive policy initiatives so as to meet the laid down targets of power generation capacity and related transmission & distribution capacity expansions.

Besides, the Government should come with suitable policies and guidelines for the promotion of energy saving across country by way of Energy Saving Equipments to tide over the prevailing crisis.

Competitions and Challenges

The market for electrical products remains competitive and challenging due to multiple growth of the competitors from the un-organized sectors and more imports from the developed Country like China. Under these circumstances, the Company is bound to concentrate more on its Research and Development activities for continuous innovation in the products catering to the changing preference of the customers.

It remains with Reserve Bank of India to announce further reduction on key interest rates to make business more competitive and sustainable. The Financial Result 2011-12 clearly indicating factors like finance cost and input cost particularly Copper impaired the profitability of the Company in spite the growth in sales volumes.

The Company has to strategically plan sourcing of semi- skilled and skilled manpower, which is scarce to augment its output without any interruption.

Risk Profile

The Company continues to reflect its market leadership in rotary switches, healthy financial risk profile marked by improved net worth and adequate debt protection and sustainable focus on research and development, besides deriving marketing benefits from its marketing tie-ups with Larsen & Toubro Ltd (L&T) which limits its susceptibility to slowdown in any one segment. The Company has to also combat the continued competition from un-organized sectors as well as cross-border competitions besides the competition being posed by the manufacturing facilities of MNC companies, who have already in the Indian market.

The efforts of the Company to take the energy saver products at pan India level would improve the performance of the Company in the near future.

The Company enjoys comfortable scale of productions, operating margin excluding the margins in cables product and always striving hard to launch new products with sophisticated technologies.

Significant initiatives undertaken

Taking into account the prevailing market conditions, the company has continuously taken the following significant initiatives to strengthen its sustainability, productivity and profitability

1. Adoption of Value Engineering Concept to bring out cost effective measures in manufacturing of products wherever feasible, in order to have substantial savings in the production process expenses

2. No capital expenditure would be made other than the planned new developments and

3. A study on man power utilization is being undertaken for rationalization

Risk Mitigation Measures

In a bid to combat any slowdown or likely negative growth in the given market conditions, the Company has already taken various strategic measures in association with marketing associates to face the situation. The Company has been continuously taking stock of the situation and swiftly taking such steps for moving towards projected target. The Company has undertaken stringent cost effective measures to contain the downward movement of profitability at this juncture of huge volatility in the prices of raw-materials like copper etc. Since the Company is having natural hedging policies i.e. same proportion export and import, the falling Rupee value against the Dollar will not impact the profitability of the Company.

CAUTIONARY STATEMENT

Some of the statements in this report, describing the Company's objectives and expectations expressed in good faith, may constitute "Forward Looking Statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those, in the event of changes in the assumptions / market conditions.

RESEARCH & DEVELOPMENT

In-house Research and Development department, duly recognized by the Government of India, Ministry of Science & Technology, Department of Scientific and Industrial Research, fully equipped with qualified people, continues with its efforts on improvement of process specifications to ensure cost reduction and the rejection levels constantly in addition to development of new products with innovative design and utility to meet the market preferences with power efficient and high-tech products. This continuous effort of the Research and Development Department will definitely not only add the new product profile but also to ensure the continuous growth of the company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO - UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956

Your Company being a modest power intensive one continues to ensure measures for conservation of energy wherever possible. Your Company is having Four Wind Mills to generate power to the extent of 1.2 MW through renewable resources - wind and generated 17.49 lakhs units of power and earned an income of Rs.64.10 lakhs. The low generation of power through wind mill is attributable to the low velocity of the wind during the year under review as well as frequent shut-down of the grid. Details are furnished in Annexure - I for your information pursuant to the provisions of Sec.217(1)(e) of the Companies Act, 1956.

Your company's operations aim -

- to ensure the continued existence and success of our Company by establishing and maintaining a safe working environment that promotes the health and performance of our employees as well as taking active measures to protect the environment

- to actively use global work safety management systems for continuous improvement

- to pay special emphasis on ergonomic design

- to observe all legislation and specifications regarding work safety

- to take comprehensive measures to protect our employees against health hazards

- to ensure Comprehensive and effective emergency measures are in place at all locations to ensure that our employees and visitors receive proper care in the event of any emergency

- to continue to maintain quality standard certifications viz., ISO 9001-2008, Environmental Management System (EMS) -14001, OHSAS (Occupational Health and Safety) Management System 18001.

INFORMATION UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) AMENDMENT RULES 1999.

The provisions of Section 217 (2A) of the Companies Act, 1956 and rules made thereof are not applicable, as no employee was in receipt of remuneration to the extent laid down therein.

DIRECTORS

During the year under review Mr.Nirmalkumar M Chandria, Mr.P.K.Shah, Mr.L.Venkatapathy and Mr.N.Jayabal Directors of the Company are retiring by rotation and being eligible offer themselves for re- appointment.

In compliance with the requirement of Clause-49 of the Listing Agreement the details pertaining to the Directors seeking re-appointment are given in the note forming part of Notice calling the meeting.

CORPORATE GOVERNANCE:

Pursuant to the provisions of Clause-49 of the Listing Agreement, your Board of Directors is pleased to place their report on the Corporate Governance duly certified by the Auditors of the Company, for information of shareholders as an annexure to this report.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, the Directors of your Company confirm:

(i) that all applicable accounting standards have been followed in preparation of Annual Accounts and that there are no material deviation;

(ii)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 31st March, 2012 and of the Profit & Loss Account of the Company for the year ended on that date;

(iii)that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis ;

(v) that the Company is having appropriate systems to ensure the compliance of all laws applicable to the Company;

(vi) that the Company is having appropriate system to ensure payment of statutory dues in time without any delay.

AUDITORS

M/s.JDS Associates, Chartered Accountants, Coimbatore, and M/s.Swamy & Ravi, Chartered Accountants, Coimbatore, Statutory Auditors of the Company retire at the conclusion of this Annual General Meeting and are eligible for the re-appointment.

AUDITORS' REPORT

The observations made in the Auditors' Report read together with notes thereon are self explanatory and hence do not call for any further comments under section 217 of the Companies Act, 1956.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 58A of the Companies Act 1956 and the rules made there under during the year under review and did not have any fixed deposit as at 31.03.2012.

INDUSTRIAL RELATIONS

The Industrial relations during the year under review remained very cordial.

BANK LOAN RATING

Sl.No. Facility Rating

1 Term Loan A-/ Stable (Reaffirmed)

2 Cash Credit A-/ Stable (Reaffirmed)

3 Packing Credit P2 Stable (Reaffirmed)

4 Letter of Credit - ILC P2 Stable (Reaffirmed)

5 Letter of Credit - FLC P2 Stable (Assigned)

6 Bank Guarantee P2 Stable (Reaffirmed)

LISTING ARRANGEMENTS

The Company's shares are listed in Bombay and Coimbatore Stock Exchanges.

Your Company has also been contemplating to enlist its securities viz., equity shares in the National Stock Exchange (NSE) and necessary application has already been made to NSE in this regard, which is under process.

DEMATERIALISATION OF YOUR COMPANY'S SHARES

The shares of your Company are admitted for dematerialization on Central Depository Services (India) Ltd (CDSL) and National Securities Depository Ltd (NSDL)under ISIN No. INE457F01013. The shareholders have the option of holding their shares either in physical form or in dematerialized form.

ACKNOWLEDGEMENT

Your Directors place on record their deep sense of appreciation and gratitude to the Shareholders, various Government Agencies, Canara Bank, Bank of India, Union Bank of India, ICICI Bank, CITIBANK, M/s. HDFC Bank, M/s. Larsen & Toubro Limited - Marketing Associates, M/s.Plitron Manufacturing Inc, Canada (Collaborators), CRISIL, M/s.GNSA Infotech Ltd, (Registrar & Share Transfer agent) for their continued support and co- operation. Your Directors also wish to record their appreciation for the dedicated services being rendered by the employees at all levels.

For and on behalf of the Board

(Sd/-)P.S.SANTHANAKRISHNAN

CHAIRMAN

Place : Coimbatore

Date : 26.05.2012


Mar 31, 2009

The Directors have pleasure in presenting this 24th Annual Report together with the Audited Accounts of the Company for the year ended March 31, 2009.

PERFORMANCE

Your company has completed one more year of successful operation as under:

Your company could able to sustain the economic and market recessionary conditions that had been cropped up during the fiscal year 2008-09 and the performance of the company has been stable as that of the corresponding year 2007-08. In order to sustain and further the growth of the company in the coming years, your Board of Directors have consistently and strategically superintendenting the affairs of the company to be cost effective in all fronts and also put the all available resources to achieve the optimum growth under the prevailing circumstances including amalgamating M/s.Salzer Cables Ltd (SCL) with your company in order to have the size economy and enlarge the product profile of the electrical installation products to meet the customers requirements for such products. In this direction, the shareholders might be aware that with your approval the scheme of amalgamation of SCL with your company has been put through with the sanction of the Honble High Court of Judicature at Madras with effect from 01.04.2008 and the performance highlights of the merged entity during the fiscal year under review are as under :

FINANCIAL RESULTS :

Year ended Year ended 31.03.2009 31.03.2008 (Rs. on Lakhs) (Rs. on Lakhs) (merged) (pre - merged)

Turnover and Other Income. 12076.07 7341.37

Profit before Interests Depreciation 1707.93 1158.56

Less : Interest& Financial Charges 629.65 285.14 Depreciation 466.27 1095.92 304.97 590.11 Profit after interset & Depreciation 612.01 568.45

Add: Previous Years Surplus B/f 987.89 660.99 1599.90 1229.44

Less: Transfer to General Reserve 10.00 10.00 Provision for tax 125.52 100.00 Deferred Tax (55.96) (10.99) FBT 7.79 7.53 Dividend Proposed final dividend 164.54 114.76 Dividend Tax on Proposed final dividend 27.96 19.50

Balance C/F to Balance Sheet 1356.14 988.64

DIVIDEND

Taking into account the economic and recessionary conditions being prevailed during the year under review and also the performance of the company vis-a-vis the expanded capital of Rs.1028.37 lakhs on account of merger of Salzer Cables Ltd with Salzer Electronics Ltd, the need to strengthen the net worth of the company under the prevailing conditions and also investors interest, in return on investment consistently, your Board of Directors, subject to the approval of the shareholders at their ensuing AGM, have decided to recommend a dividend at the rate of 16% - Rs.1.60 per equity share of Rs.10/- each, for the year ended 31.03.2009 to all the eligible shareholders whose name appear as on the book closure and AGM date i.e., 30.12.2009. The dividend payout works out to Rs.192.50 lakhs comprising of Dividend on the paid up capital of Rs.1028.37 lakhs @ 16% - Rs. 164.54 lakhs plus Dividend Tax @ 16.99% - Rs.27.96 lakhs

CONVERSION OF SHARE WARRANTS

As reported in our earlier report during the last year (31.03.2008) the 2,49,192 share warrants issued on preferential basis on 11.04.2007 have since been converted into same number of equity shares on exercising the option by the warrant holders and the equity shares of Rs.10/- each have been issued on 29.07.2008 thereby the paid-up capital of the company has increased during the year under review from Rs.637.58 lakhs to Rs.662.50 lakhs(pre-merger). These shares have also been enlisted in Bombay and Coimbatore Stock Exchanges and also demated with the depositories viz.CDSL & NSDL under ISIN No.INF457F01013.

MERGER

With the approval of the shareholders of both transferor (Salzer Cables Ltd) and transferee company (Salzer Electronics Ltd) and also with the sanction of the Honble High Court of Judicature at Madras, the Salzer Cables Ltd has since been merged with Salzer Electronics Ltd- with effect from 01.04.2008 and the annual accounts for the year ended 31.03.2009 has been finalized as a merged entity. Consequent upon the merger, the paid-up capital of the transferee company (SEL) has increased from Rs.662.50 lakhs to Rs.1028.37 lakhs.

Your company has also filed the sanction order of the Honble High Court of Judicature at Madras, sanctioning the Scheme of Amalagamation / merger with Registrar of Companies, Coimbatore and has also fixed the Record date as 30.11.2009 to decide the eligible share holder of the transferor company (SCL) and the shares would be allotted accordingly.

FOREIGN INVESTMENT

The investments made by your company in M/s. Salzer Global Services, a LLC company in the State of New Hampshire, USA to further the presence of Salzer in international market consistently, has been doing well. Your companys present holding in SGS works out to 40%. As reported in our earlier report, this company has since taken over the complete control of M/s.Global Technical Talent Inc, (GTT) a Cea-corp company providing ITES to the leading companies in IT industry in USA for example IBM, Novell, GE, Microsoft, TD Bank North, Liberty Life, GEICO insurance, etc. It is reported that the GTTs turnover for the year 2008 was US$ 21.00 millions (INR.1063.41 million) as against US$ 16.41 millions last year 2007 (INR. 646.86 millions) with resultant net income of US$ 0.12 million (INR. 5.94 millions) as against loss of US$ 0.40 millions (INR. 20.00 millions) under the prevailing US economic melt down and recessionary conditions.

In view of the progressive signs of recovery of global economy your directors are confident that the investment made in M/s.Salzer Global Services LLC, USA will give better returns in the long run and also to establish the brand image of Salzer in the global markets.

RESEARCH & DEVELOPMENT

Your companys in-house Research and Development department is fully equipped with qualified people to continuously improve upon the process specifications and techniques for optimum utilization of resources, consistency in quality comparable to the international standards, maintaining the international quality standard certifications, utilities of its existing products and development of new higher variants of the existing products as well as new high-tech products to meet the customers requirements. The In-house R&D Department of your Company has been duly recognized by Government of India, Ministry of Science & Technology, Department of Scientific and Industrial Research.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO - UNDER SECTION 217(l)(e) OF THE COMPANIES ACT, 1956

Your company, though not a power intensive one, is taking every possible efforts and measures to conserve the energy. Your company is having Four Wind Mills to generate power to the extent of 1.2 MW capacity in aggregate and the power is being generated through harnessing the natural resources - Wind. During the year under review, your company has generated 17.37 lakhs units of power through its Wind Mills and earned an income of Rs.56.26 lakhs. The low generation of power through wind mill is attributable to the low velocity of the wind during the year under review. Details are furnished in annexure - 1 for your information pursuant to the provisions of Sec.217(e) of the Companies Act, 1956.

INFORMATION UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) AMENDMENT RULES 1999.

The provisions of Section 217 (2A) of the Companies Act, 1956 and rules made thereof are not applicable, as no employee was in receipt of remuneration to the extent laid down therein.

DIRECTORS

During the year under review Mr.R.Damodharaswamy, Mr.P.K.Shah, Mr.L.Venkatapathy and Mr.V.Sankaran, Directors of the company are retiring by rotation and being eligible offer themselves for re-appointment.

Mr. Sharad Anant Kulkarni, a nominee director from M/s. L & T Capital Company Limited, was inducted on the Board of Directors of the Company in terms of Section 260 of the Companies Act, 1956 on 18.07.2009. In order to regularize his directorship, necessary resolution, in pursuance of Section 257 of the Companies Act, 1956, was placed before the members for their approval.

CORPORATE GOVERNANCE:

Pursuant to the provisions of Clause 49 of the Listing Agreement, your Board of Directors is pleased to place their report on the Corporate Governance for information of shareholders as an annexure to this report.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance of Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000, the Directors of your Company confirm:

(i). that all applicable accounting standards have been followed in the preparation of annual accounts and that there are no material deviation;

(ii). 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 31st March, 2009 and of the profit & Loss account of the Company for the year ended on that date;

(iii). that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv). that the annual accounts have been prepared on a going concern basis.

AUDITORS

M/s.JDS Associates, Chartered Accountants, Coimbatore, Statutory Auditors of the Company retire at the conclusion of this Annual General Meeting and are eligible for the re-appointment.

In view of the increasing of the volume of the Work consequent upon the amalgamation of Salzer Cables Limited with Salzer Electronics Limited, it is thought prudent to appoint M/s. Swamy & Ravi, Chartered Accountant, who was also statutory auditor of the Transferor Company - Salzer Cables Limited as statutory auditor of your company along with M/s. JDS associates, Chartered Accountant, the retiring Auditor of the Company for the financial year 2009-10.

AUDITORS REPORT

The observations made in the Auditors Report read together with notes thereon are self explanatory and hence do not call for any further comments under section 217 of the Companies Act, 1956.

Under Basel II norms, CRISIL has reaffirmed your companys stable outlook and adequate liquility for meeting its maturing debt obligations, significant focus on R&D, Strong financial risk profile.

RATING

SI. No. Facility Rating

1. Term Loan A-/stable

2. Cash Credit A-/stable

3. Packing Credit P2+

4. Letter of Credit P2+

5. Bank Guarantee P2+

LISTING ARRANGEMENTS

The Companys Shares are listed in Bombay and Coimbatore Stock Exchanges.

DEMATERIALISATION OF YOUR COMPANYS SHARES

The Shares of your Company are admitted for dematerialization on Central Depository Services (India) Ltd (CDSL) and National Securities Depository Ltd (NSDL) under ISIN No. INE457F01013. The shareholders have the option of holding their shares either in physical form or in dematerialized form.

ACKNOWLEDGEMENT

Your Directors place on record their deep sense of appreciation and gratitude to the Shareholders, various Government Agencies, Canara Bank, Bank of India, Union Bank of India, ICICI Bank, CITIBANK, M/s. Larsen & Toubro Limited and M/s. Crompton Greaves Limited - Marketing Associates, M/s.Plitron Manufacturing Inc, Canada (Collaborators), CRISIL, M/s.GNSA Infotech (P) Ltd, (Registrar & Share Transfer agent) for their continued support and co-operation. Your Directors also wish to record their appreciation for the dedicated services being rendered by the employees at all levels.

Place Coimbatore Date 26.11.2009

For and On behalf of the Board (Sd/-) P.S.SANTHANAKRISHNAN CHAIRMAN

 
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