Dear Members,
 
 The Directors have great pleasure in presenting the Fifteenth Annual
 Report of the Company on the business and operations together with the
 audited financial statements for the year ended 31st March, 2011.
 
 1.  Financial Results              
                                                           (Rs. in lakhs)
 
                                              Year ended    Year ended
                                        31st March, 2011    31st March, 
                                                                  2010
 
 Gross Sales                                  73,746.63     46,229.03
 
 Less : Excise Duty                            1,112.44        820.12
 
 Net Sales                                    72,634.19     45,408.91
 
 Other income                                    198.86        142.44
 
 Total Income                                 72,833.05     45,551.35
 
 Operating Profit before Depreciation, 
 Interest,                                     7,474.36      5,179.48 
 
 Tax & Exceptional Item
 
 Less: Depreciation                              793.66        714.96
 
 Profit Before Interest, Tax & 
 Exceptional Item                              6,680.70      4,464.52
 
 Less : Financial charges                      1,133.38        513.25
 
 Profit Before Tax & Exceptional Item          5,547.32      3,951.27
 
 Add: Exceptional profit                         363.61         -
 
 Profit Before Tax                              5910.93       3951.27
 
 Provision for tax:
 
 Current Tax                                   1,607.80      1,270.26
 
 Deferred Tax                                     39.46        130.22
 
 For earlier years                                  -            3.53
 
 Net Profit                                     4,263.67     2,547.26
 
 Balance in P & L account brought forward       3,930.02     2,926.91
 
 Profit available for appropriation             8,193.69     5,474.17
 
 Appropriations
 
 a) Transfer to General Reserve                   500.00       500.00
 
 b) Dividend proposed: -
 
 Final dividend proposed                         1,044.66      895.43
 
 Tax on Final Dividend proposed                    169.47      148.72
 
                                                 1,714.13    1,544.15
 
 c) Balance carried to Balance Sheet             6,479.56    3,930.02
 
                                                 8,193.69    5,474.17
 
 2.  Company''s Performance
 
 The Indian economy resurged after the global recession and showed a
 robust and steady growth in all spheres and it was very impressive in
 the core sectors like manufacturing, agriculture, construction and
 services. The country''s GDP has grown by 8.5% during the year under
 review.  Rural prosperity in the country has also contributed
 significantly to the industrial growth. Your Company was favourably
 positioned with a wide range of products with different models and
 excellent distribution network to take advantage of the opportunities
 that emanated from the economic growth and could perform exceptionally
 well in terms of growth in revenue and profit.
 
 Net Sales for the year under review was significantly higher at Rs.
 726.34 crores representing a growth of 59.96%, over the Net Sales of Rs.
 454.09 crores for the previous year. Following the robust growth
 achieved in sales, the Company recorded a Net Profit of Rs. 39.70 crores,
 without considering exceptional profit of Rs. 3.63 crores during the year
 under review, which is 55.84 % up over the previous year. The
 contribution from Non-South Indian markets to the turnover is more than
 Rs. 160.00 crores in the fiscal 2010-11. The significant improvement in
 the revenue and profit was attained mainly due to increase in market
 share, growth in sales volume across all product lines and higher
 capacity utilization. Growth of each product vertical is detailed under
 the section Management Discussion and Analysis, which forms part of the
 Annual Report.
 
 3.  Changes to the Share Capital
 
 There was no change in the share capital of the Company, during the
 year under review.
 
 4.  Appropriations made from the profits
 
 a) Transfer to Reserves
 
 Your Directors transferred an amount of Rs. 500.00 lakhs to the General
 Reserve account, out of the profits available for appropriation during
 the year, which is in accordance with the Companies (Transfer of
 Profits to Reserves) Rules 1975.
 
 b) Final Dividend
 
 Your Directors are pleased to recommend a final dividend of Rs. 3.50 per
 share (35% on par value of Rs. 10/- per share) considering the improved
 profit. The final dividend, if declared as recommended, would involve
 an outflow of Rs. 1,044.66 lakhs and Rs. 169.47 lakhs towards dividend tax,
 resulting in a total outflow of Rs. 1,214.13 lakhs. If approved by the
 shareholders at the ensuing Annual General Meeting, the dividend will
 be paid as per the applicable regulations.
 
 The Register of Members and Share Transfer Books will remain closed
 from 15th July, 2011 to 25th July, 2011, both days inclusive.
 
 5.  Projects of the Initial Public Offer
 
 Your Company has successfully completed four of the projects mentioned
 in the Offer Document dated 29th February, 2008, i.e. construction of
 LT Cable and Building Wire factories at Coimbatore and Kashipur
 respectively, Pilot Production Unit for Pumps and Water Heater and Fan
 at Coimbatore and Kala Amb, respectively and Service and Distribution
 Center at Bangalore.
 
 Construction work relating to setting up of Service and Distribution
 Centers at Hubli and Vijayawada has commenced and it is expected to be
 completed by the end of the third quarter of the fiscal 2011-12.
 
 6.  New Projects
 
 Considering the growth potential, Your Directors have decided to
 strengthen the manufacturing base of Solar Water Heater and it has been
 decided to set up a state of art facility for the manufacture of Solar
 Water Heater of different capacities with improved technology at the
 industrial land acquired in Perundurai. It has also been decided to
 strengthen the existing pilot production units of Electric Water Heater
 and Fan at Kala Amb and Pumps at Coimbatore. The other projects for
 expansion during the current fiscal include expanding the storage space
 available at Palakkad, Bangalore and Kochi. All the projects are
 expected to be implemented during the financial year 2011-12.
 
 7.  Fixed Deposit
 
 The Company has not accepted any fixed deposits during the year.
 
 8.  Change in Directors
 
 During the year under review, Dr. George Sleeba, was co-opted as an
 Additional Director of the Board of the Company with effect from 27th
 May, 2010. He was appointed as the Joint Managing Director of the
 Company for a period of three years with effect from 1st June, 2010
 with the approval of the members in the 14th Annual General Meeting
 held on 26th July, 2010.
 
 In terms of Section 256 of the Companies Act, 1956 and Articles 137 and
 139 of the Articles of Association of the Company, Mr. A K Nair,
 Independent Director is liable to retire by rotation and being eligible
 has offered himself for re-appointment.
 
 Brief resume of the Director proposed to be re-appointed, nature of his
 expertise in specific functional areas and names of companies in which
 he hold directorship and membership / chairmanship of the Board
 Committees, as stipulated under Clause 49 of the Listing Agreement with
 the Stock Exchanges has been provided as an annexure to the Notice
 convening the Annual General Meeting.
 
 9.  Human Resources
 
 The function of Human Resource Department is to ensure availability of
 the right type of skills at the right time at the right place and at
 the right cost to meet the organizational requirements. The HR Dept of
 your Company is making all-out effort in accomplishing this objective
 by selecting and developing quality Human resources to meet the
 challenges of a competitive business environment. The recruitment
 process for attracting the right talents in the identified areas is
 initiated through job portals, Newspaper advertisements and through
 outside consultants.  Marketing being one of the most significant areas
 of your Company''s activity, timely action is to be initiated to appoint
 efficient and skilled manpower at various locations and for timely
 replacement of people who leave the organization. To meet this need,
 the HR Dept closely associates with the top management in planning,
 developing and retaining talent. It also shares responsibility as a
 strategic partner in business for achieving the organizational goals
 and targets through a system of continuous performance monitoring 
 and appraisal of critical human resources of the Company.
 
 Considering the need for upgrading the knowledge and skills of the
 employees, your Company continues to invest in its human resources
 through various Learning & Development initiatives.  Programmes for
 In-house training are conducted on an ongoing basis and your Company
 has invested 6000 man hours in training during the year under review,
 which is almost double that of the previous financial year. In addition
 to the in-house programmes, employees are nominated for External
 training programs conducted by professional bodies, Academic
 Institutions and Training agencies. New Employees from all Branches
 across India are provided a week''s Induction Training and Orientation
 Program at Corporate Office, Cochin, covering all aspects of the
 organization. These induction programmes and opportunity provided for
 visiting the various units and departments of the Company as part of
 the orientation programme have helped to develop a positive feeling
 among the new comers and their continuity in the organization.
 
 Besides training and development activities, your Company has also been
 conducting various Employee engagement programs for involving the
 employees and for keeping them motivated.
 
 Total Employee strength was 955 as on 1st April, 2010 and as on 31st
 March, 2011, the number has increased to 1220. The increase has been
 mainly due to the growth and expansion activities undertaken during the
 year.
 
 10.  Corporate Social Responsibility
 
 Your Company believes in nurturing positive relationships across the
 entire range of stakeholders and the public which helps the Company
 understand pertinent issues, develop businesses, enhance stakeholder
 value and manage risks better. It is this relationship, trust and
 commitment to stakeholder interest and the warm reciprocity of the same
 by the stakeholders that make V-Guard robust, resilient and
 sustainable.
 
 A Social welfare fund was started during the year as an Employees''
 initiative with the objective of helping the ailing cancer patients in
 General Hospital, Cochin. Every month, Employees voluntarily contribute
 to this fund from their salary. The fund so collected is utilized for
 providing medicines to the cancer patients. With this amount, medicines
 worth Rs. 3,00,000/- has been purchased and supplied during the financial
 year.
 
 Education of children, especially those belonging to the lower strata
 of society continues to be one of the major thrust areas of your
 Company''s CSR interventions. During the year, the Company has adopted a
 Government school near our Corporate Office at Vennala and has
 associated with them in improving the welfare of students and basic
 amenities of the school. It has benefitted many students who belong to
 the under privileged section of the society. Your Company plans to
 undertake more activities in the coming financial year to reaffirm its
 commitment to the societal development.
 
 11.  Adequacy of Internal Control Systems
 
 The Company has formulated comprehensive Internal Control Manual for
 the entire operations of the Company. All the transactions of the
 Company are routed through the laid down procedures.  The Company has
 also appointed M/s. Varma & Varma, Chartered Accountants to conduct the
 internal audit of the Company. It has also formed an in-house Internal
 Audit Department, which regularly does the audit of branch offices and
 factories. Internal audit is conducted on a quarterly basis and the
 report and findings of Internal Auditors are placed before the Audit
 Committee and are reviewed in detail by the members. All significant
 observations and comments are placed before the Board of Directors and
 appropriate actions are taken based on the observations made by the
 Auditors.
 
 The Company has an Enterprise Wide Risk Management System in place and
 has laid down procedures for risk assessment and mitigation procedures.
 As part of risk management process, the Company has formed committees
 at two levels, one being the apex body, known as Risk Management Team,
 headed by the Executive Director and comprising of Sr. Vice President
 and Vice Presidents, who are heading various Product Risk Groups and
 Chief Risk Officer and Assistant Risk Officer as members. The other
 committee, known as Product Risk Team for various products is headed by
 the Vice President concerned and comprising of product heads and
 representatives from other functions like Finance, Systems, Customer
 Service, Human Resource, Legal etc. The consolidated quarterly risk
 report is placed before the Audit Committee for its review and
 recommendation to the Board.
 
 12.  Corporate Governance
 
 Your Company has complied with the Corporate Governance norms as
 stipulated under the provisions of the Listing Agreement entered into
 with the Stock Exchanges. A detailed Report on Corporate Governance
 forms part of the Annual Report. A certificate of Statutory Auditor
 confirming compliance of the Corporate Governance requirements by the
 Company is attached to the Report on Corporate Governance.
 
 13.  Management Discussion and Analysis Report
 
 A detailed review of the industrial growth vis-à-vis the growth of the
 Company and the future outlook is given under the head Management
 Discussion and Analysis Report, which forms part of the Annual Report.
 
 14.  Auditors
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, with firm
 registration number-008072S, who are the statutory auditors of the
 Company hold office, in accordance with the provisions of the Companies
 Act, 1956, upto the conclusion of the ensuing Annual General Meeting
 and being eligible, offer themselves for re-appointment. The Board of
 Directors upon the recommendation of the Audit Committee proposes the
 re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants,
 as the statutory auditors of the Company.
 
 15.  Disclosure of Particulars of employees
 
 The details of employees who are in receipt of salary in excess of the
 limits prescribed under Section 217(2A) of the Companies Act, 1956,
 read with Companies (Particulars of Employees) Rules, 1975 and
 Companies (Particulars of Employees) Amendment Rules, 2011 are given in
 Annexure I to the Directors'' Report, which forms part of the Annual
 Report.
 
 16.  Energy conservation, Technology absorption and Foreign exchange
 earnings and outgo
 
 The information required under Section 217(1)(e) of the Companies Act,
 1956, read with the Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules 1988, with respect to conservation of
 energy, technology absorption and foreign exchange earnings and outgo
 is given in Annexure II to the Directors'' Report which forms part of
 the Annual Report.
 
 17.  Directors'' Responsibility Statement
 
 In accordance with the provisions of Section 217 (2AA) of the Companies
 Act 1956, your Directors here by state that:- i) In the preparation of
 the annual accounts, the applicable accounting standards have been
 followed along with proper explanation relating to material departures;
 
 ii) Accounting policies selected were applied consistently. Reasonable
 and prudent judgements and estimates were made so as to give a true and
 fair view of the state of affairs of the Company at the end of the
 financial year as on 31st March, 2011 and of the profit of the Company
 for the year ended on that date;
 
 iii) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities.
 
 iv) The annual accounts of the Company have been prepared on a going
 concern basis.
 
 18.  Acknowledgement
 
 The Directors would like to place on record their sincere appreciation
 to the Company''s customers, vendors, registrar and bankers for their
 continued support to the Company during the year under review. The
 Directors also wish to place on record their appreciation to the
 contribution made by employees at all levels for achieving the
 remarkable growth in the turnover and profit and thank the Central
 Government and various State Governments and other Government agencies
 for their assistance and co-operation and look forward to their
 continued support in future also.  Finally, the Board expresses its
 gratitude to the members for their continued trust, co-operation and
 support.
 
                 For and on behalf of the Board of Directors
 
                               Sd/-                         Sd/-
 
 Kochi              Kochouseph Chittilappilly        Dr. George Sleeba
 17th May, 2011        Managing Director          Joint Managing Director