Dear Shareholders,
 
 It gives me great pleasure to communicate with you at a time of
 profound change at Smartlink. Such change is in the very nature of the
 IT industry, whose landscape keeps getting transformed from year to
 year. In such a scenario, the smart response for companies is to keep
 pace with the changes and find new directions for growth. This is what
 we have done at Smartlink; and that is how we remain the right company
 in the right segments at the right time.
 
 If you look back at our history, you will find this theme occurring
 again and again. It is part of the ''Smart Think'' attitude that is
 embedded into our DNA, and which we celebrate as the theme for this
 year''s Annual Report. It has been our hallmark ever since we were
 founded, nearly three decades ago.
 
 The four-fold path to growth
 
 Even in those early days of so called high-value mainframe computers,
 when the term ''IT'' hardly existed, we knew that growth in this field
 would be enormous and hence required certain key enablers.
 
 First, there has to be a strong line of growing technology products,
 addressing well-defined customer needs, and offering genuine value.
 
 Secondly, there has to be knowledge and expertise of the technology
 along with in-house value-addition to suit the Indian conditions with
 innovation, manufacturing and R&D capabilities in response to the
 evolving market.
 
 Thirdly, there must be a steady and sustained outreach to the customer,
 through a network of strong channel distribution, sales and marketing,
 as well as through continuous communications.
 
 Fourthly, the product offerings must be backed up by prompt and quality
 service that is accessible, responsive and highly competent.
 
 At every critical point in our history, you see these enablers at work.
 You see our technology awareness going hand-in-hand with our portfolio
 of offerings, always keeping up with the times.
 
 Active products: what our cards foretold
 
 We started by being amongst the earliest to set up SMT lines in India
 way back in the early 90''s.  In 1995, we entered into a JV with D-Link
 Corporation of Taiwan. As networking began to rapidly gain ground in
 India, we saw a huge opportunity and expanded our manufacturing
 capabilities steadily by adding more SMT lines in 1999 and 2001.
 
 With our JV partner, we put together a very comprehensive line-up of
 Active products, addressing many applications and specialised niches in
 the market. For us, it was a tremendous grounding in the domain of
 Active Networking Products, which has remained our core competency
 through all the years that followed.
 
 Those years also saw our entry into the Passive segment. Once again, we
 had spotted a growth trend due to the requirement of higher bandwidth
 and the increasing complexity of cabling (Passive range).  Hence we
 started our own in-house delevopment in passive range products. After
 seeing the enormous growth pontential in passive products, we launched
 the brand DIGILINK in 2004. By 2008, DIGILINK had become one of the
 leading brands in the structured cabling segment, a truly rare success
 story of indigenous development and brand building in the Indian
 networking industry.
 
 Reaching out for success
 
 A very critical factor in the enormous success of both Active and
 Passive products was our set-up for marketing and distribution. It was
 a nationwide network of regional distributors'' with an entrepreneurial
 attitude, whom we supported and encouraged. We formed close and lasting
 bonds with all these channel partners across the country; and put
 enormous effort into keeping those relationships vibrant and
 productive.
 
 Through this network, we are able to remain in constant touch with the
 market, to feel its pulse and sense its directions. We are also able to
 provide the ready access to service which is a must in any technology
 domain. To this day, our channel partners and their capabilities remain
 as key assets of the company; they will be with us in whatever journeys
 we now undertake.
 
 Independent avenues of growth
 
 Together, Active and Passive products each made up roughly 50% of the
 business. We and our JV partner both saw that both lines would better
 realise their potential if they focused on their own independent
 avenues of growth. Towards the financial year end of 2008, there
 occurred a formal de-merger, we changed our company name to Smartlink
 Network Systems Limited, controlling the entire passive cabling
 portfolio, along with the extensive manufacturing facilities, our
 nationwide infrastructure and our marketing network. And, of course, we
 had our dealers and distributors with us as valuable allies; while the
 Active business - the brand and the products was given to the new
 company.
 
 That brings us to the latest chapter in our story. As I mentioned
 earlier, Active products were very much part of our core competency
 right from day one. We had the in-depth knowledge; and we had our
 distribution and service partners ready and eager to once again be
 allied with us in Active products. So why not relaunch that business
 with a new brand name? This we did, in 2010, by introducing the DIGISOL
 range of Active products. Within a very short time, DIGISOL met with a
 good deal of acceptance and approval in the market.
 
 Towards an Active tomorrow
 
 It became clear to us that our future lay in Active products. We
 believed that the Passive business required the backing of a global
 brand that could grow that business not only in India but also in
 international markets.
 Active products, on the other hand, would provide us with an
 opportunity to leverage our four enablers – products, technology, reach
 and service – to go after all the growth potential that lay waiting to
 be realized. An Active line would also maximise the usefulness of the
 manufacturing units, which represented one of the finest manufacturing
 infrastructures in the country.
 
 A Momentous Step that Unlocks Value for Shareholders
 
 Smartlink is in the midst of one of the greatest transitions that the
 IT industry is witnessing. Growing consolidation, mergers and
 acquisitions, intense competition to gain market share by new entrants,
 deployment of huge resources towards building brands – these have
 become the order of the day.
 
 History has taught us that there are times in the life of an
 organization when opportunities need to be encashed upon.
 
 .... There is a tide in the affairs of men Which, taken at the flood,
 leads on to fortune
 
                                             - William Shakespeare
 
 Schneider Electric India Pvt. Ltd. was already present in the ''Passive''
 business with its other acquired brands; however their presence had
 been in the higher-end enterprise segment. By acquiring the ''DIGILINK''
 business, they can now leverage the strong channel network of the brand
 as well as use the facility to manufacture the products locally in
 India.
 
 Having concluded the slump sale of the Passive business, our focus on
 Active products is now sharpened. The enablers are all in place. There
 is scope for our R&D to innovate for market needs.  Our distribution
 and service partners are enthusiastically with us on the journey. Our
 manufacturing capability will finally be properly and fully leveraged.
 And the road-map is clear, complete with options for the buying of
 specific technologies, or the forming of strategic alliances.
 
 Clearly, Smartlink today is a fundamentally different company. To some,
 the decision to exit the DIGILINK business may seem foolhardy but it
 was important that Smartlink''s management took a bold and courageous
 decision keeping in view the long term business prospects.
 
 The momentum that took us back to our historic Active capability has
 also led us back to the motherboards of our earliest years. We plan to
 shortly introduce DIGILITE, featuring a comprehensive range of
 motherboards of various types. I know that all of you join me in
 looking forward to that future with keen anticipation.
 
 Let me close by expressing my pride to the men and women of the
 Smartlink team who have brought us to this point. And let me express my
 gratitude to you, our shareholders, for your unwavering support. I hope
 you are pleased with how your company is performing and evolving. And I
 trust that you share our excitement in what promises to be a new epoch
 for your company.
 
 Sincerely,
 
 K. R. Naik, Executive Chairman