It is my pleasure to welcome you to the 19th Annual General Meeting of your Company.
 
 ECONOMIC SCENARIO:
 
 It may be recalled that in my statement of September 1992, I had described the year 1991-92 as most
difficult for the Country. The Government had to resort to devaluation of the Rupee to salvage the Balance of
Payment's position. 1992-93 was a transitory period and a year of consolidation. The year under review
1993-94, saw further improvements in the direction. the year saw further liberalisation in the form of
permitting Indian and foreign entrepreneurs to enter power and telecommunication sectors. The policies, in
general, have restored India's credit-worthiness in world markets. As a result, many foreign entrepreneurs
have begun implementing projects in Export Processing Zones and elsewhere.
 
 The investment climate has considerably improved following the liberalisation of licensing procedures and
relaxation of FERA. The inflow of FOREX resources, as a result of purchases in secondary market, and Euro
issues have strengthened the Balance of Payment's position and the Rupee as well. The Rupee is now
convertible on current account.
 
 PROSPECTS FOR THE CURRENT YEAR:
 
 Since April 1994, the economy appears to be gathering further momentum. A satisfactory monsoon, for the 7th
year in succession, is a good augury for the economic development of the Country. The Government of India has
taken steps to reduce the various delays in giving approvals. MODVAT has been extended to capital goods and to
trades. Exporters are being encouraged to become globally competitive. Fresh concessions, like Income tax
exemption for the industries coming up in backward areas, have been announced. The prospects for our
customers in telecoms, automobiles, cables, domestic appliances, consumer electronics, computer hardware,
power generation etc. have improved, as a result of the latest budget. This is bound to result in higher
demand for the Company's products.
 
 YOUR COMPANY'S PERFORMANCE:
 
 The Director's Report has adequately highlighted the improved performance of the Company. The year under
review was one of consolidation as well as a higher achievement. The turnover showed a jump of 37.6% from
Rs.1214.53 lacs in 1993 to Rs.1671.13 lacs in 1994, against the industry average of 13.1%. The Company also
posted a profit before Interest & Depreciation of Rs.282.73 lacs, representing 81.7% increase over the
previous year. It may be worthwhile to record the substantial progress during the last four yeas.
 
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                            (Rs. in lacs)
 
                         1991    1994    % Increase
 
 Net Sales (loss)        995.62  1671.13    67.85
 Profit before Interest
 & Depreciation          (34.79)  282.73
 -----------------------------------------------------------
 
 ISO 9002:
 
 This year was notable for the Company's achievement in the field of quality. While the Company's objective
is to achieve Total Quality Management, the Company was adjudged eligible for ISO 9002 certification. Now the
Company's name is recorded in the book maintained by International Electro-technical Commission Quality
Assessment System (IECQ), Headquarters at Geneva) and is in the distinguished company of other world class
manufacturers. This will stand the Company in good stead, in times to come, when the Company has plans to
enter the export market in a big way.
 
 KVArs:
 
 Another notable achievement was in the field of diversification. The efforts made in the previous year
resulted in the launching of KVAr products. I am happy to say that the products have been well received. This
product also has a good export market.
 
 RECENT DEVELOPMENT:
 
 During the current year, the momentum already gained has been further accelerated. The Company's Net Sales
for the 5 month period up to August 1994, aggregated Rs.709.18 lacs, as against Rs.570.31 lacs for the
corresponding period last year, yielding an increase of over 24%.
 
 EXPORTS:
 
 The export prospects for the Company has vastly improved as a result of a contract between SAHA GROUP and
THOMPSON COMPONENTS, FRANCE, who are a well known organisation in Electronic Components, worldwide. The
contract envisages export to the extent of Rs.45 crores over a period of 5 years. Apart from this, the
Company has also made a small beginning in exporting KVArs and this is expected to gather momentum in the
coming year.
 
 BIFR:
 
 The matter which is before BIFR, which I had mentioned in my last statement, came up for final hearing in
March '94 and inspite of the Company showing significant indications of turning round and becoming viable,
the BIFR turned down our plea to reconsider. Against the Order of the BIFR, the Management filed a writ
petition, in the High Court of Karnataka as well as Appellate Authority of Industrial Financial
Reconstruction (AAIFR), where the impugned Order of the BIFR has been stayed and the case has been admitted
for further hearing.
 
 INDUSTRIAL RELATIONS:
 
 A wage agreement was entered into, with the Workers' Union. The workers have pledged their unstinted support
to the Company, to improve production and maintain quality of the products.
 
 I would like to record my own and the Company's appreciation of the support of our Banks, Institutions,
Customers, Employees and Shareholders.
 
 Note: This does not purport to be a record of the proceedings of the Annual General
Meeting.