Hind Rectifiers Ltd

TO THE MEMBERS

Your Directors have great pleasure in presenting 53rd Annual Report together with theAudited accounts for the year ended March 31, 2011.

OPERATIONS:

As envisioned, the output from Dehradun plant has been continuously improving withsustained efforts combined with aggressive marketing, the Company has been able to bookhigher orders despite keen competition resulting in increased sales. These two factorshave helped the Company to show marked improvements in the top-line and bottom-line.

The Company continues its policy of assertive marketing, vendor development andoutsourcing of intermediate products which will reflect in better results at the end offinancial year 2011-2012.

The Company's performance further improved due to the following :

• The Company supplied 2 MW Traction sub-station with HIRECT rectifier sets forMumbai Monorail which is the first monorail in India in the year 2010-2011. The Company istargeting the business of Monorail in India and South East Asia for further growth.

• The Company executed an order with a rating of 6MW for graphite application andthe Company expects to do further business in this area in the coming financial year. Themarket in India of High Current Rectifiers (Water Cooled) is showing positive signs ofimprovement.

• The Company will continue its sustained efforts in the export market in thecurrent year to create a niche in the global market.

DIVIDEND:

The Directors are pleased to recommend for consideration of the Shareholders at theAnnual General Meeting, payment of dividend @ 75% (Rs. 1.50 per share) amounting toRs.2,25,86,895/- for the year ended 31st March, 2011 (previous year Rs.2,10,81,102/-).

DEPOSITS:

Deposits amounting to Rs.4,00,000/- due for payment on or before 31st March,2011remained unclaimed by the depositors on that date. Letters have been sent to suchdepositors reminding them to claim their deposits

BOARD OF DIRECTORS:

As per the Provisions of the Companies Act, 1956 and in terms of the Articles ofAssociation of the Company, Shri Pawan Kumar Golyan & Shri Bharat Swaroop, Directorsof the Company retire by rotation and being eligible, offer themselves for re-appointment.

The Board has appointed Shri Akhil Marfatia as an Additional Director of the Companywith effect from April 11, 2011. His term expires at the forthcoming Annual GeneralMeeting of the Company. Being eligible, he offers himself for re-appointment and the Boardrecommends that he be re-appointed.

During the year Shri Jayant H. Shah expressed his inability to continue as Director ofthe Company due to his old age. Your Board places its appreciation for the servicesrendered by Shri Jayant H. Shah during the tenure of his directorship.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors confirm that:

1. In the preparation of the annual accounts, the applicable Accounting Standards havebeen followed.

2. Appropriate policies have been selected and applied consistently and judgments andestimates wherever made are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company as at March 31, 2011.

3. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956, for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

4. The annual accounts have been prepared on a going concern basis.

AUDITORS:

M/s. Khandwala & Shah, Chartered Accountants, Auditors of the Company are retiringat the ensuing Annual General Meeting. They are eligible for re-appointment and haveexpressed their willingness to act as Auditors, if re-appointed. The Company has receiveda certificate from them that they are qualified under section 224 (1B) of the CompaniesAct, 1956, for appointment as Auditors of the Company. Members are requested to considertheir appointment and fix their remuneration.

M/s. Daga & Chaturmutha, Chartered Accountants, Branch Auditors of the Company forNashik Plant are retiring and eligible for re-appointment and have expressed theirwillingness to act as Branch Auditors of the Company.

M/s. R. Gupta & Associates [name of the firm changed from Mullick & Co. to R.Gupta & Associates], Chartered Accountants, Branch Auditors of the Company forDehradun Plants are retiring and eligible for re-appointment and have expressed theirwillingness to act as Branch Auditors of the Company.

AUDITORS' OBSERVATIONS:

The observations of the auditors contained in their Report have been adequately dealtwith in the Notes to the Accounts given in Schedule "R" which are selfexplanatory and therefore, do not call for any further comments.

SECRETARIAL COMPLIANCE REPORT:

As required under the amended provisions of the Companies Act, 1956, the Company isrequired to obtain Secretarial Compliance Certificate from a Practicing Company Secretary.The same is enclosed and form part of this report.

DEPOSITORY SERVICES:

The Company's Equity Shares have been admitted to the depository mechanism of theNational Securities Depository Limited (NSDL) and also the Central Depository Services(India) Limited (CDSL). As a result the investors have an option to hold the shares of theCompany in a dematerialised form in either of the two Depositories. The Company has beenallotted ISIN No. INE835D01023.

Shareholders therefore, are requested to take full benefit of the same and lodge theirholdings with Depository Participants [DPs] with whom they have their Demat Accounts forgetting their holdings in electronic form.

CORPORATE GOVERNANCE:

Your Company continued to practice good governance as set out by the Securities &Exchange Board of India. In addition to the basic governance issues, the Board laid astrong emphasis on transparency, accountability and integrity. The detailed report oncompliance of Corporate Governance and Management Discussion Analysis as stipulated inClause 49 of the Listing Agreement is enclosed and form part of this Report.

CODE OF CONDUCT:

Your Company is committed to conducting its business in accordance with the applicablelaws, rules and regulations and highest standards of business ethics. In recognitionthereof, the Board of Directors have implemented a Code of Conduct for adherence by theDirectors and Senior Management Personnel of the Company. This will help in dealing withethical issues and also foster a culture of accountability and integrity.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO:

The information pursuant to section 217 (I) (e) of the Companies Act, 1956 read withthe Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988are given in Annexure "I" to this report.

PARTICULARS OF EMPLOYEES:

Particulars required under section 217(2A) of the Companies Act, 1956 read with theCompanies (particulars of employees) Rules, 1975 are given in the prescribed format as anAnnexure "II" to the Directors' Report.

LISTING:

The Company has listed its Shares on The Bombay Stock Exchange Ltd., & NationalStock Exchange of India Ltd. The Company is regular in payment of Listing Fees.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION:

The Company has taken all the necessary steps for safety and environmental control andprotection at the plant.

ACKNOWLEDGMENT:

The Directors wish to convey their appreciation to the Company's shareholders,customers, suppliers, bankers, distributors and all the technology partners for thesupport they have given to the Company and the confidence, which they have reposed in itsmanagement and the employees for the commitment and dedication shown by them.

ANNEXURE "I" TO THE DIRECTORS' REPORT

Information under section 217(1)(e) of the Companies Act, 1956 with the Companies(Disclosures of particulars in the Report of Board of Directors) Rules, 1988 and formingpart of the Directors' Report for the year ended 31st March, 2011.

I. CONSERVATION OF ENERGY

1. New modified gasket installed for curing oven and vacuum oven to minimize the heatloss.

2. Regular audit is being conducted to identify areas of energy wastage.

II. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

1. 12-Pulses, 90 V / 10 KA Water Cooled Rectifier designed, manufactured andcommissioned for Vikram Sarabhai Space Centre.

2. High Current Water Cooled Rectifier - SMOP (HT-CC) 100 V / 60K with 100 steps PLCcontrolled OLTC developed and executed for graphite production application.

3. 1500 V.DC BGACEMU designed successfully for Indian Railways.

4. Uprated BGMU commissioned successfully.

III. FOREIGN EXCHANGE EARNING AND OUTGO

To avoid repetition, Members are kindly requested to refer Note Nos. 21, 22, 23 &24 to the accounts where such information is furnished.