The Directors have pleasure in presenting the Twenty Seventh Annual
 Report and Audited Accounts for the year ended 31st March 2012.
 
 1.  FINANCIAL HIGHLIGHTS
 
                                                              Rs lacs
 
                                    Year ended         Year ended 
                                    31st March 2012    31st March 2011
 
 Sales (Net of excise duty)                   26005              22885 
 
 Profit before depreciation,
 exceptional items and taxes                   4371               3750 
 
 Less:
 
 Depreciation                                   528                415 
 
 Profit before tax &
 exceptional items                             3843               3335
 
 Exceptional items                              133                  -
 
 Profit before tax                             3976               3335
 
 Taxation                                       846                792
 
 Profit after tax                              3130               2543
 
 Profit brought forward from
 previous year                                  785                836
 
 Dividends                                     1018                767
 
 Dividend distribution tax                      165                127
 
 Transfer to general reserve
 & share capital                               1200               1700
 
 Retained in profit and loss
 account                                       1532                785
 
 
 2.  OPERATIONS
 
 Your Company''s sales grew by 14% over the previous year, from Rs 228.85
 crores to Rs 260.05 crores. Profit before tax and exceptional items at
 Rs 38.43 crores showed an improvement of 15% over the previous year.
 
 4.  INTERNATIONAL APPRECIATION
 
 The ''smart regulator'' developed through in- house R&D by your company
 has won an award from a well known motorcycle maker from Japan, for
 fuel efficiency. A certificate in appreciation of the development has
 been given to the joint venture partner of your company, M/s Kokusan
 Denki, acknowledging this development by your company in India.  The
 customer is also keen to promote the use of this regulator in its
 products manufactured in other parts of the world.
 
 5.  PT AUTOMOTIVE SYSTEMS INDONESIA (PT ASI)
 
 Your Company has obtained approval from the designated authorities at
 Indonesia for extension of time by two more years for commencing
 commercial production which is expiring in March 2014. Your Company is
 continuing to explore various options and an appropriate decision will
 be made.
 
 The Ministry of Corporate Affairs viae its General Circular
 No.2/2011/circular no.5/12/2007-CL-lll dated 8th February 2011 has
 granted general exemption from the requirement of attaching the annual
 report of subsidiary company subject to fulfilment of conditions
 stipulated in the circular.  Your company has satisfied the conditions
 stipulated in the circular and hence is entitled to the exemption.
 
 The annual accounts of the subsidiary company will be available at the
 registered office of the Company and of the subsidiary company
 concerned, if any member or investor wishes to inspect them during the
 business hours on any working day.
 
 6.  ASSOCIATE COMPANY
 
 As indicated in the last year''s report, in the context of the growing
 need to reduce dependence on conventional sources of energy and on
 environmental grounds, the Central Government is accelerating
 initiatives to promote use of renewable sources of energy from the
 Twelfth Plan (2012- 17). Introduction of Renewable Purchase Obligation
 (RPO) for industrial consumers and state distribution utilities
 alongside Renewable Energy Certificates (REC) scheme for the renewable
 power generators is a step in this direction. Mandatory compliance of
 RPO commencing from FY 2011 -12 is expected to gather momentum in the
 coming years.  The Ministry of New and Renewable Energy is also in the
 process of formulating a National Biomass Mission policy framework to
 support biomass-based power generators on issues ranging from long term
 fuel security to viable energy tariffs for this sector.
 
 Synergy Shakthi Renewable Energy Limited (SSREL), in which your Company
 has made a strategic investment, has gradually improved its capacity
 utilization during the second half of the year under review by securing
 alternate sources of biomass and fine tuning its operations. SSREL has
 also received accreditation from the regulatory authorities for trading
 in RECs to which it would be entitled based on energy sold to its
 customers. Realization from en-cashing the certificates by sale to the
 obligated entities is expected to support the long term viability of
 your investee company.
 
 7.  DIVIDEND
 
 Your Company had paid an interim dividend of Rs 4.00 per share in the
 month of February ''12, A further dividend of Rs 5 per share will be
 paid in June ''12. The total dividend of Rs 9 per share is being treated
 as final dividend for the year. The dividends will absorb a sum of Rs
 101 7,97 lacs besides an additional outgo on dividend distribution tax
 of Rs 165.15 lacs.
 
 8.  BONUS SHARES
 
 During the year, your Company issued and allotted 32,31,632 equity
 shares of Rs 10/- each as bonus shares on 22nd September 2011 in the
 ratio of 2 equity shares for every 5 equity shares held to the eligible
 shareholders as on the record date i.e. 21 st September 2011 by
 capitalizing an equivalent amount standing to the credit of the general
 reserve account of the Company. As a result, the Company''s share
 capital now stands at Rs 11.31 crores.  The said issue and allotment of
 bonus shares was completed within the stipulated period of two months
 of its declaration by the Board of Directors in terms of SEBI (Issue of
 Capital and Disclosure Requirements) Regulations, 2009.
 
 9.  PUBLIC DEPOSITS
 
 Your Company has not accepted any deposits under Section 58A of the
 Companies Act, 1956 read with Companies [Acceptance of Deposits] Rules
 1975.
 
 10.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 OUTGO AND EARNINGS
 
 Please refer to Annexure-I to the Directors'' Report to the
 Shareholders.
 
 11.  PARTICULARS OF EMPLOYEES
 
 None of the employees is drawing remuneration in excess of the amounts
 specified as per Section 21 7 (2A) of the Companies Act, 1956 read with
 Companies (Particulars of Employees) Rules 1975 as amended.
 
 12.CORPORATE GOVERNANCE
 
 As required by Clause 49 of the Listing Agreement, the ''Report on
 Corporate Governance'' is enclosed as part of this report.
 
 A certificate from the Auditors of your Company regarding compliance of
 the conditions of the Corporate Governance as stipulated by Clause 49
 of the Listing Agreement is attached to this report.
 
 
 The certificate required from CEO/ CFO, is also attached to this
 report.
 
 13. DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions under Section 217(2AA) of the Companies Act,
 1956 on the Directors''
 
 Responsibility Statement, it is hereby confirmed:
 
 a) that in the preparation of accounts for the financial year ended
 31st March 2012 the applicable accounting standards have been followed.
 
 b) that the Directors have selected the accounting policies and applied
 them consistently and made judgements and estimates that are 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 under review and of
 the Profit of the Company, for the year under review.
 
 c) 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.
 
 d) that the Directors have prepared the annual accounts for the year
 ended 31st March 2012 on a ''going concern'' basis.
 
 14.  DIRECTORS
 
 Mr. K Nakamura has resigned from the Board of Directors and Mr Y Tomita
 has been inducted in the casual vacancy caused by his resignation
 effective 1st June 2012. Mr Y Tomita, will be proposed for appointment
 as a Director liable to retire by rotation in the ensuing Annual
 General Meeting.
 
 Mr. N S Murthy and Mr. G Chidambar are retiring by rotation at the
 ensuing Annual General meeting and being eligible offer themselves for
 re-appointment.
 
 15.  AUDITORS
 
 M/s Brahmayya & Co., Chartered Accountants, retire at the conclusion of
 the Annual General Meeting and are eligible for re-appointment.
 
 16. GENERAL
 
 Your Directors wish to place on record their appreciation for the good
 work of all the employees of the Company.
 
 Your Directors also acknowledge the continued support received from
 Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and
 also wish to thank the Governments at the Centre and in the States of
 Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd,
 Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time
 to time.
 
                             For and on behalf of the Board of Directors
 
                                                      Chennai T K BALAJI
 
 30th May 2012                                                  Chairman