V-Guard Industries

Dear Shareholders,
 
 It is indeed a great pleasure for me to present before you the annual
 performance of the fiscal 2008-09, a year which was quite turbulent and
 tumultuous financially and also in terms of industrial growth. The
 Indian economy continued to register impressive GDP growth, although
 the rate of growth declined marginally over the previous year. The
 level of industrial productivity has also begun to decline, as a result
 of fiscal constraints imposed on money supply and the raising of
 interest rates, especially in the second half of the fiscal. The
 overall economic recession prevalent in the country has severely
 affected the purchasing power of the common man.
 
 Let me take you to a quick look to the performance of the Company in
 terms of figurjes.  Your Company recorded net revenue of Rs.31,677.67
 lakhs, increase of 13.90% over the previous year of Rs. 27,81 1 lakhs.
 The Net Profit after tax (excluding after tax Hon recurring profit of
 Rs.2,277.92 lacs), increased from Rs. 1,464.39 in 2007-08 to Rs.
 1,734.65 lakhs in 2008-09, an increase of 18.46%. Considering the
 improved profitability, the Board has recommended a dividend of Rs.2.50
 per share on the paid-up share capital of the Company.
 
 The performance of the Company was badly hit in the third quarter of
 the fiscal under review. Moreover, high fluctuation in the price of the
 basic raw-material copper had affected the profitability of the product
 cable. As the Company was not actively involved in forward bookings,
 the loss on account of the volatility in the price of the copper was
 less. Your Company was able to do well in terms of sales turnover in
 some of the products, i.e. fans, solar water heaters, pumps and of
 course in cables.
 
 With the whole-hearted efforts of your Management, the Company was able
 to complete four of its projects, mentioned in the offer document. Your
 Company was able to set up two state of the art facilities for
 manufacture of building wire and power cables. The investments up to
 31s1 March 2009 towards these factories were Rs.38.75 crores. The
 Management is confident of capitalising on the output of the two new
 factories.
 
 During the year under review, the Company was able to add a new product
 to its folder, i.e. Digital Home UPS. The R&D wing of the Company is
 engaged in continuous research to meet the customer demand for new
 models with unique or customized features and improved quality.
 
 The outlook for the future seems to be good aiding our vision to become
 a national player in the area of electrical and electronic segment.
 Focus will be given to penetrate the North Indian markets by adopting
 new strategies and also on export sales. The Management will also
 concentrate on industrial clients to get a sizable turnover in the sale
 of jLT Cables. Your Management hopes that the desired goals can be
 achieved with the contribution of highly motivated and innovative team
 of employees at all levels and with them I am confident of taking your
 Company to greater heights in the years to come.
 
                                           With Best Wishes
                                                 Sdi-
                                               P G R Prasad
                                                  Chairman
 28th May, 2009
 Kochi