The Directors have great pleasure in presenting the 26th Annual Report
 of the Company together with the Audited Accounts for the year ended
 Mar 31, 2011. Your Company completed its Silver Jubilee year with the
 whole hearted support and contribution from all its Stakeholders.
 
 Global and Indian Industry scenario
 
 The global Great Recession during the year 2009 shook up the global
 Semiconductor industry in a major way but the year 2010 has brought in
 a lot of confdence to the Semiconductor industry and to the global
 economy as a whole.
 
 The Semiconductor industry has risen by 31.8% in the year 2010.  The
 outlook for the year 2011 looks promising with a 9% growth predicted;
 global Semiconductor revenues are expected to reach US$ 325 Billion up
 from US$ 298 Billion in 2010.
 
 Of the total revenues forecasted for the year 2011, about 40 percent
 can be attributed to the computing industry, which accounted for sales
 of 3 Billion. The rapidly growing smart phone segment accounted for
 about  Billion in sales in 2010 and is expected to grow although
 there is pressure on price points to remain low.
 
 There are huge growth opportunities for the electronic industry in
 India, but there have been some missed opportunities in the past
 decade. So, while the future holds a lot of promise, we need to address
 existing challenges in infrastructure, taxation, supply chain and
 logistics, labour laws, R&D and funding.
 
 SPEL performance during the year
 
 Your Company still continues to be First & only Semiconductor IC
 Assembly & Test production facility. It is continuously maintaining
 this position despite the market fuctuations and other external
 factors. SPEL continues to be a trusted & strategic contract
 manufacturing partner for many of the worlds leading Semiconductor
 companies.
 
 Your Company had invested around Rs.6.00 Crores during the 1st Quarter,
 to address (a) Production bottlenecks to improve productivity
 
 (b) Modernization of equipment for enhanced product mix and
 
 (c) equipping itself for future expansions. This would enable SPEL to
 address increased outsourcing from present & potential Customers during
 FY 2011-12.
 
 Various cost & energy saving measures initiated during FY 2009-10 have
 started producing positive results. Due to these proactive approaches
 and manpower rationalization SPEL effectively handled the pricing
 pressures that resulted from the recession and emerged with reduced
 impact.
 
 The Computing segment reported a sliding trend in the US & Europe
 during Q2 FY 2010-11. However, SPEL was able to maintain revenues
 during this quarter due to its balanced exposure across Communications,
 Computing & Consumer Electronics. The impact on sales was mainly due to
 the comparable impact on volatile foreign currency parity. It was also
 due to change in pattern of raw material consumption of smaller pin
 count packages, without corresponding price increase. The rising power
 & diesel cost is a major cause for concern.
 
 Rise of gold prices has propelled your Company towards investment in
 copper-process tools. SPEL will place most of its above expansion on
 leading-edge process and cooper-interconnect process capacities, both
 of which are estimated to boost the Company`s revenue and earnings
 during FY 2011-12.
 
 Towards the beginning 2011 SPEL started investing Rs. 22 Croes in
 production equipment which will increase its capacity. Funded by a term
 loan from nationalized banks, this expansion is primarily on
 leading-edge process & copper-interconnect capacities. The additional
 capacity will be available from 1st quarter of FY 2011-12, fetching
 increased sales and enabling SPEL to further diversify package & market
 base.
 
 The Management with its strong commitment and extensive support from
 its Employees, Suppliers & Customers, has continued to maintain its
 position as Proft Making Company, despite the Global Slowdown and
 Economic Crisis.
 
 Financial Performance
 
 The Operating results of your Company for the year ended Mar 31, 2011
 are given below
 
                                                      (Rs. In Lakhs)
 
 Particulars                         Year ended          Year ended
 
                                   Mar 31, 2011        Mar 31, 2010
 
 Sales                                  9133.01           8716.00
 
 Other Income                            173.74            149.17
 
 PBIDT                                  1828.28           1962.55
 
 Interest                                173.25            214.57
 
 Depreciation                            881.34            818.45
 
 Proft before Taxation                   773.69            929.53
 
 Tax / Deferred Tax                      320.71            318.69
 
 Proft after Taxation                    452.98            610.84
 
 Sales of your Company for current year have increased by 4.78% over the
 previous year. Increased expenditure on manpower, power, marketing
 expenses, other overheads, which were necessitated due to operational
 growth, had an impact on contribution. All the package lines of your
 Company are in good demand and are expected to increase the
 contribution in future years.
 
 Emphasis on Value system
 
 Your Company has adopted the following as its Core Values.  Management
 is highly committed to put in practice all these to make sure that they
 understand the values that we are into. Training sessions are conducted
 every month to make all the Employees aware of the Core Values. All the
 Employees attend this program at least once in six months and put it to
 practice
 
 a. Business Ethics : defnes us as a Company
 
 b. Professionalism : defnes us as individuals
 
 c. Citizenship : defnes our contribution to society
 
 Socio Economic Concept (SEC)
 
 Understanding human behavior and tuning it towards self-disciplined
 citizen underlines the concept of the SEC being implemented in your
 Company. Employees were given to apprehend their roles as an individual
 and his/her responsibility to bring up fellow citizen so as to make the
 Country proud. SPEL appreciates its Employees commitment and
 complements them by assisting their growth to become future leaders. In
 spite of all the recessionary trends Stakeholders may appreciate the
 fact that SPEL stood up to the times and posted positive in PAT.
 
 Dividend
 
 Your Directors would like to place on record their appreciation for the
 Shareholders patient waiting for these days.
 
 SPEL believes in business sustenance. Sustainability is not about what
 a Company does with its profts but how it makes profts. It is the
 business process itself. Towards this Company had invested in the Capex
 around Rs. 23 Crores, from the Allahabad Bank and through internal
 generations. These investments had helped the Company in offsetting the
 falling ASP, and had assisted to improve the PE ratio. Your Company is
 keenly concentrating on creating cash reserves, as the need for this is
 increasing, as Customers want to see this in place.
 
 Your Companys above initiatives have assisted in maintaining PAT.
 However, you would concur that your Company has consolidated itself for
 achieving a strong fnancial position conducive for this.
 
 Fixed Deposits
 
 The fxed deposits for the period were Rs. 4.45 Crores.
 
 Research & Development (R&D)
 
 The Company has carved out an ambitious plan of investment in R&D. This
 will include investment in PIP and MODLIB. This will assist Companys
 revenue and proftability in the future years.
 
 Dematerialization of Shares
 
 As the Members are aware, the Companys shares are in the compulsory
 demat mode, facilitated through arrangement with M/s. National
 Securities Depository Ltd. (NSDL) and M/s. Central Depository Services
 (India) Ltd. (CDSL). Going by the percentage of demat Shareholders, it
 is found that as many as 27,06,573 shares (5.87% of total shares
 issued), continued to be in physical mode.  Your Directors earnestly
 appeal to all of you to demat the shares and derive the benefts of
 holding the shares in electronic form.
 
 Subsidiary
 
 The Wholly Owned Subsidiary Company, SPEL America Inc, in California,
 USA has been rendering the marketing services to your Company resulting
 in enhanced Customer base and satisfaction.
 
 Pursuant to the Circular No.2/2011 dated Feb 8, 2011 of Ministry of
 Corporate Affairs, the Board at its Meeting held on Apr 29, 2011
 resolved not to enclose the Subsidiary Companys accounts for the year
 in the Annual Report.
 
 The Annual accounts of the Subsidiary Company and related detailed
 information will be made available to the Shareholders at any point of
 time. The annual accounts of the Subsidiary Company will also be kept
 for inspection by any Shareholders in the Head Offce of the Holding
 Company.
 
 Auditors
 
 Your Companys Auditors, M/s. Natarajan & Co., Chartered Accountants,
 retiring at the conclusion of the ensuing Annual General Meeting, are
 eligible for re-appointment.
 
 Directors
 
 Dr. A. Ramakrishna resigned from the Board and his resignation was
 accepted at the Board Meeting held on Apr 29, 2011. The Board placed on
 record its appreciation for the commendable services rendered by Dr. A.
 Ramakrishna.
 
 Mr. S. R. Vijayakar and Dr. A. Besant C. Raj are the directors retiring
 at the ensuing Annual General Meeting. As both are being eligible,
 offering themselves for reappointment. A brief profle of both directors
 is provided as follows :
 
 Mr. S. R. Vijayakar
 
 Mr. S. R. Vijayakar holds an Honours Degree in Electrical and
 Mechanical Engineering. After two years experience in the U.K. in the
 power industry he worked with the Ahmedabad Electricity Co., till 1967.
 Thereafter, he worked with the Electronics Corporation of India Ltd.
 under the Department of Atomic Energy, culminating as its Chairman and
 Managing Director till 1984. He was appointed as Secretary, Department
 of Electronics, Government of India until he retired in 1986. Post
 retirement he was Chairman of MELTRON, Government of Maharashtra and
 was associated with several Companies. He is a member of SPEL Boards
 Remuneration and Compensation Committee.
 
 In addition, he holds Directorship in TVS Electronics Limited and
 Surana Ventures Limited. He is the member of Audit Committee in TVS
 Electronics Limited.
 
 Dr. A. Besant C Raj
 
 Dr. A. Besant C Raj is an MBA from the Indian Institute of Management,
 Ahmedabad (First Batch). He also holds a Doctoral degree in Business
 Administration from the Harvard Business School, Harvard University,
 USA. He has a Masters degree in Philosophy from Madras University and
 a Masters degree in Psychology from Banaras Hindu University. Dr. Raj
 is the Founder Chairman of the Institute of Chartered Financial
 Analysts of India (ICFAI), Hyderabad.  He is closely associated with
 development of several educational institutions. He has held various
 senior positions in the Government of India. In addition, he is the
 Chairman and Managing Director in Besant Raj International Limited and
 Director in Henkel India Limited. He is Chairman of SPEL Boards Audit
 Committee and a Member of SPEL Boards Securities Transfer & Investors
 Grievance Committee (STIGC).
 
 Directors Responsibility Statement
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956 with respect to Directors Responsibility Statement, it is
 hereby confrmed :
 
 1.  That in the preparation of the annual accounts for the year ended
 Mar 31, 2011 the applicable Accounting Standards had been followed
 along with proper explanation relating to material departures
 
 2.  That the Directors had selected such accounting policies and
 applied them consistently and made judgment and estimates that were
 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 and of the
 proft or loss of your Company for the year under review
 
 3.  That the Directors had taken proper and suffcient 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
 
 4.  That the Directors had prepared the accounts for the year ended Mar
 31, 2011 on a ‘going concern basis.
 
 Corporate Governance
 
 Your Company is committed to the standards of Corporate Governance and
 in this direction has laid down well documented internal policies,
 procedures including Board and Committee
 
 procedures and practices in particular relation with Shareholders,
 Customers, Suppliers and Employees in order to enhance the long-term
 Shareholder value and maximize interest of all Stakeholders.
 
 Your Company has complied with the provisions of Clause 49 of the
 Listing Agreement relating to Corporate Governance.
 
 A detailed Report on Corporate Governance and a Management Discussion
 and Analysis report have been attached to form part of the Annual
 Report.
 
 A Certifcate from the Auditors of your Company regarding the compliance
 of conditions of Corporate Governance has been annexed to this report.
 
 Information pursuant to Section 217 of the Companies Act, 1956
 
 In terms of Section 217 (1) (e) of the Companies Act, 1956 and the
 rules framed there under, the particulars relating to the conservation
 of energy, technology absorption & foreign exchange earnings and outgo
 are given below :
 
 a.  Conservation of Energy
 
 The Company has in place an Energy Committee which meets once a month.
 This Committee consists of Cross-functional Executives. This Committee
 identifies the potential areas to conserve energy and implements novel
 energy saving measures, apart from recommending investment proposals to
 the management.
 
 Various measures to conserve water and energy, notable amongst them
 being, reuse of Dicing process water, Rain Water Harvesting, Power
 factor improvement and extension of length of condenser in the A/c
 system to improve effciency. Following savings were made during the
 year :
 
 Particulars                     Power                 Water
 
 Consumed                     83,46,655 units    79,193 Kilo litres
 
 Saved                         9,267.82 units    208.38 Kilo litres
 
 b.  Technology Absorption
 
 The particulars regarding Technology Absorption are not applicable to
 your Company.
 
 Particulars of Employees
 
 There are no such employees drawing remuneration in excess of limits
 mentioned as per the revised Notifcation dated Mar 31, 2011 of the
 Ministry of Corporate Affairs as per Section 217 (2A) of the Companies
 Act, 1956. Hence no disclosure is required as per the above
 Notifcation.
 
 Corporate Social Responsibility (CSR)
 
 SPELs answer towards CSR is through SPEL Employees Social Service
 Organization (SESSO). As part of the Core Values, following activities
 were undertaken though SESSO during the previous year.
 
 a.  Provided educational assistance to the needy people in and around
 Factory.
 
 b.  Conducted a voluntary Blood Donation camp.
 
 c.  Provided assistance to an orphanage and old age home located near
 Factory.
 
 Environment and Safety Measures
 
 Your Company understands that every individual has a responsibility
 towards our environment. Towards this, Your Company has been devising
 measures and encouraging its Employees to care for the environment and
 protect it through conservation of resources, waste minimization and
 proper disposal, pollution prevention and planting of trees.
 
 Further Your Companys manufacturing activities do not result in any
 signifcant release of effuent in the environment.
 
 The Environmental Management System established and maintained by your
 Company is certifed by Bureau Veritas Certifcation. The upgraded ISO
 14001 Certifcate from 1996 version to 2004 version will comprehensively
 take care of safe environment practices. It is hopeful that the Company
 will be able to achieve this certifcation during the current year
 
 Your Company considers environmental care to be a continuous effort and
 are always on the look out for more avenues to nurture nature by
 enhancing its environmental performance and also keeping in view the
 global trends in procurement of environment friendly products, Company
 is in the process of introducing Green-molding compounds that are
 environment friendly as demanded by the Customers.
 
 Acknowledgements
 
 Your Directors wish to place on record their gratitude to the
 Government of India, the Government of Tamil Nadu, Financial
 Institutions, Bankers, Insurance Companies, Customs & Excise
 authorities, valued overseas Customers & Vendors and the Promoters for
 their continued assistance and support extended to the Company.
 
 Yours Directors wish to place on record, their appreciation of the
 effcient and loyal services rendered by the Employees at all levels to
 the Company.
 
 Yours Directors wish to thank the Shareholders for their continued
 support and forbearance and the confidence reposed on the Management.
 
                              For and on behalf of Board of Directors
 
                                                     Dr. A.C. Muthiah 
 
                                                             Chairman
 
 Chennai 
 
 Apr 29, 2011