S & S Power Switchgear Ltd

The Directors have pleasure in presenting herewith the Thirty Fourth Annual Report ofyour Company together with the audited accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. In Million)

ABRIDGED FINANCIAL STATEMENT

As permitted by SEBI guidelines and Companies Act, 1956, we have included the abridge dfinancial statements of the Company in this annual report. The detailed financialstatements and audit reports of the Company and each of its subsidiaries are available forinspection at the registered office of the Company.

OVERVIEW, BUSINESS PROSPECTS AND OPERATIONS

The gross turnover for the year under review was Rs. 33,421,895 as against Rs.39,921,940 last year. After absorbing depreciation of Rs. 2,588,750, the profit before Taxis Rs. (17,193,167) as compared to Rs. (21,202,084) in the corresponding previous year.

Under the agreement with EPS(UK) Limited a specialist Switchgear Consultancy theCompany has completed the design of the following products and the prototype developmentis in progress

1. 12kV Indoor Circuit Breaker Truck incorporating maglatch mechanism with option forspring mechanism mounting suitable for various ratings

2. 12kV Outdoor Structure mounted VCB

3. 36kV Outdoor Structure mounted VCB

The Company has selected a place of manufacture for the above said products. Onsuccessful completion of the development and testing of the products, the

Company revenues after the sale of its products are expected to increase manifold asthe avenues for the growth of the power sector are high in view of the continued shortageand infrastructure development plans.

The Company is also working on the design and development of the following products, inconsultation with the EPS (UK) Limited,

1. 12kV Auto Recloser with associated electronics

2. 12kV Ring Main Unit

3. New development of technology on CTs

4. Railway Trackside Breakers

We expect to start the production of our circuit breaker range towards the end of thisyear.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Company has five subsidiaries namely;

1. Acrastyle EPS Technologies Limited, Chennai (AEPS)

2. Acrastyle Power (India) Limited, Chennai (APIL)

3. S&S Power Switchgear Equipment Limited, Chennai (S&SPSE)

4. Acrastyle Switchgear Limited, United Kingdom (ASL,Subsidiary of APIL)

5. Acrastyle Controls India Private Limited, Chennai (ACIL, Subsidiary of ASL and alsoAPIL)

6. Acrastyle Limited, U. K,

A statement containing brief financial details of the subsidiaries is included in theConsolidated Accounts. As required under the Listing Agreement with the Stock Exchanges, aConsolidated Financial Statement of the Company and all its subsidiaries is attached inthe Consolidated Accounts. The Consolidated Financial Statements have been prepared inaccordance with the relevant Accounting Standards as prescribed under Section 211(3C) ofthe Companies Act, 1956 ("Act"). These financial statements disclose the assets,liabilities, income, expenses and other details of the Company, its subsidiaries andassociate companies.

Pursuant to the provision of Section 212(8) of the Act, the Ministry of CorporateAffairs vide its Circular dated February 8, 2011 has granted general exemption fromattaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiarycompanies with the Balance Sheet of the Company. A statement of the Company's interest inthe subsidiaries and a summary of the financials of the subsidiaries are given along withthe consolidated accounts.

S&S POWER SWITCHGEAR EQUIPMENT LIMITED (S&SPSE)

S&SPSE had established a Joint Venture with COELME Costruzioni ElettromeccanicheSpA, Italy for manufacture of Disconnector products in the name and style of "S&SPower Switchgear Equipment Limited" (S&SPSE). S&SPSE recorded a turnover ofRs. 146,094,647 for the year ended 31.03.2012.

During the month of June, 2012 S&SPSE came out with a rights issue of 2,50,000equity shares of a face value of Rs.10 per share at premium of Rs,70 per share. Both theCompany and COELME, JV partner subscribed and were allotted shares in the ratio of 51:49.The Company was allotted 1,27,500 equity shares.

The performance of the current year is satisfactory and the company expects to make aprofit in this financial year. Also the exports of very high quality products andcomponent s to COELME have commenced. We have also completed the design of our first jointproduct and are now embarking on the joint design of the 400kV disconnector range,

The Company is certified for ISO 9001-2008 by TUV -Novd Quality systems, bymeans of periodical internal audits and surveillance,

ACRASTYLE POWER (INDIA) LIMITED (APIL)

Acrastyle Power (India) Limited recorded a turnover of Rs. 12,647,772 for the yearended 31st March 2012. The Company has incurred a loss of Rs, 23,839,084 as against lossof Rs. 20,952,801 in the previous year,

APIL caters to the needs of various types of Engineering Services with respect toControl , Protection and othe r controls in power systems segment both in India andOverseas,

The Company has been very much involved in Global Engineering Services in that it isassociated with customers in Dubai, Saudi, Qatar, Australia, Germany apart from Acrastyle,UK. The Company has also been extending its services to local Customers like Areva, Suzlonand Siemens etc.

With the increase in the customer base of the Company and increasing acceptance of boththe concept of outsourced engineering and the quality of services that the Companyprovides, we expect the Company to grow and prosper.

APIL is certified for ISO 9001-2008 Quality Systems by TUV-Novd and successfully goe sthrough the surveillance Audit.

ACRASTYLE SWITCHGEAR LIMITED (WOS) / ACRASTYLE LIMITED

The principal activity of Acrastyle Switchgear Limited during the period was that of aninvestment Company. Acrastyle Switchgear Limited is a holding Company for AcrastyleLimited (AL).

Acrastyle Limited is engaged in the designing and manufacturing of control andprotection equipment for power generation, transmission and distribution systems, Duringthe period under review the turnover of AL has increased from 7,334,684 Pds to 8,334,415Pds although the accounting period is 18 months compared to previous 12 months. TheOperations of the Company resulted in a loss of 716,280 Pds. This was a very difficultperiod for the U.K economy & the Company suffered as a result. We are happy to saythat after strict cost cutting measures implemented the Company has turned around & isnow making profits.

ACRASTYLE CONTROLS INDIA PRIVATE LIMITED (ACIL)

Acrastyle Controls India Private Limited recorded a turnover of Rs.63,559,570 for theyear ended 31st March 2012and incurred a loss of Rs. 5,982,633 as against profit of Rs.2,07,955 in the previous year. During the period under review, the company' s operationsfor its control cubicles and control and relay panels to the existing customers,especially the OEM customers has been good.

Thrust is on to add, at least two more OEM customers and parallely explore new avenuesfor Control Relay Panel business and thus augment the revenues. This will also enable usto minimize dependence on existing, customers.

The Company has moved into a larger premise in the current year and expects to do evenbetter this year. The Company is certified for ISO 9001-2008 Quality systems, by means ofperiodical internal audits and surveillance.

ACRASTYLE EPS TECHNOLOGIES LIMITED (AEPS)

Acrastyle EPS Technologies Limited was floated as a Joint Venture Company formanufacture of Magnetic Actuators. The factory has been set up at Maraimalai Nagar. ThisJoint Venture Company has completed the prototype of the maglatch and established asupplier base. The production is expected to commence in the ensuing year.

RESEARCH & DEVELOPMENT

The Company has a strong R&D team to absorb the technology in its products to bedeveloped with EPS (UK) Limited.

FINANCE

The working capital requirements were met from the internal resources and creditfacilities from Bank through bills discounting scheme.

DIRECTORS

Mr. Deepak Chowdhary retires by rotation in terms of Article 118 of the Company'sArticles of Association and he being eligible offers himself for reappointment,

INTERNAL CONTROL & AUDIT SYSTEMS AND THEIR ADEQUACY

Your Company remains committed to maintain high standards of internal control designedto provide adequate assurance on the efficiency of operations and security of its assets.

The internal control mechanism comprises of a well defined organization structure,documented manuals and pre-determined authority levels, In order to ensure that adequatechecks and balances are in place and the internal control systems are in order, periodicalaudits are conducted by independent agencies.

The Audit Committee of your Company, inter-alia, reviews Quarterly Financial Results,evaluates the effectiveness of Internal Control Systems, including significant changes inaccounting policies and the recommendations of the internal audit agencies.

DISQUALIFICATION UNDER SECTION 274 (1) (g) OF THE COMPANIES ACT, 1956:

None of the Directors attract disqualifications in terms of Section 274 (1) (g) of theCompanies Act, 1956.

FIXED/CUMULATIVE DEPOSITS

The Company has not accepted any public deposits during the year.

DEPOSITORY SERVICES

As on August 23, 2012, out of total 6,200,000 equity shares of the Company, 46,86,121equity shares representing 75.58% of total shares have been dematerialized.

CORPORATE GOVERNANCE

Our governance practices along with the Auditor's Certificate on its compliance areattached hereto as an Annexure to this report

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed Management Discussion & Analysis is covered under this Report itself, aseparate note on the same si not being furnished.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the companies Act, 1956, withrespect to the Directors' Responsibility statement, it is hereby confirmed.

(i) in the preparation of the annual accounts, for year ended 31.03.2012 the applicableaccounting standards have been followed and that there are no material departures from thesame.

(ii) The Directors have selected such Accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31.03.2012, and of the loss of thecompany for the said period.

(iii) The Directors have taken proper and sufficient care has been taken formaintenance of adequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the Company and for preventing anddetectin g fraud and other irregularities; and

(iv) The Director have prepared the accounts for the year ended 31.03.2012 on a goingconcern basis.

AUDITORS' REPORT

With regard to points raised in the auditors' report the same are dealt with hereunder:

HUMAN RESOURCES & INTERNAL CONTROLS

During the period the Company maintained cordial relations with the employees of theCompany.

In respect of the erstwhile workmen relating to Porur unit, settled under Section 12(3)of the Industrial Disputes Act, 1947, a section of the workmen preferred a writ petitionchallenging the settlement and the same was dismissed. Against the dismissal a writ appealwas filed by the workman, which was disposed with a direction to the State Government ofTamil Nadu to refer the dispute, in case an application was made by the dissentingworkmen. The Government of Tamil Nadu, pursuant to an application by the said workmenissued a reference on 27,11.2007. The matter is pending before the Industrial Tribunal.

In the meantime the alleged representatives of the dissenting workmen preferred a suitclaiming them to be the authorized representative of the union, which was dismissed andtheir claim to have locus stand! as the representatives of the Union has been negated.

AUDITORS

M/s.GSV Associates, Chartered Accountants, Chennai, retire at the forthcoming AnnualGeneral Meeting and are eligible for reappointment, As required under Section 224 of theCompanies Act , 1956, the company has obtained from them a confirmation to the effect thattheir re-appointment, if made, would be in conformity with the limits prescribed in thesaid section

PARTICULARS OF EMPLOYEES

None of the employees draw remuneration more than the limit prescribed under Section217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules,1975,

DISCLOSURE WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217 (l)(e) of the Companies Act, 1956 readwith rule 2 of the Companies (Disclosure of particulars in the Report of the Board ofDirectors) rules 1988 are set out in an

Annexure to this report

ACKNOWLEDGEMENT

Your Directors thank the Company's employees, customers, vendors, bankers,shareholders, government department s and all others for their cooperation and support tothe Company.

ANNEXURE TO THE DIRECTORS' REPORT STATEMENT

Information pursuant of Companies (Disclosure of particulars in the report of Board ofDirectors) Rules,1988,

a) Energy conservation measures taken during 2011-2012

The company is not a power .intensive industry and hence the scope for conservation ofenergy is not much,

b) Additional Investments and proposals, if any, being implemented for reduction ofconsumption of energy.

NIL

c) Impact of measures (a) and (b) for reduction of energy consumption and consequentimpact on the cost reduction of goods.

NIL

a. RESEARCH & DEVELOPMENT

i. Specific area in which R&D is carried out by the company:

a. Development of 12kV, 1250/2000 A, 25 KA,Indoor, VCB Switchgear with MagneticActuator Mechanism

b. Development of 12kV & 36kV, 25 KA, Outdoor, VCB with Magnetic Actuator Mechanismc. 12kV / 36kV Outdoor Structure Mounted VCB

ii, Benefits derived as a result of the above R&D

The company will be reentering into the Circuit Breaker segmen t with the State of ArtTechnology and thus enabling to exploit the huge market potential in the domestic andinternational market. ill. Future plan of action a, Development of 12kV Ring Main Unit b.Development of 1 2kV Autoreclosure with magnetic actuator mechanism c, Railway TracksideBreakers d, New Development of technology on CTs

1. Efforts in brief made towards technology absorption, adaptation andInnovation:

The Company developed the design for 12kV/ 36kV indoor / outdoor switchgearincorporating Magnetic Actuator with technical assistance from a Design Consultant EPS UK.

2. Benefits derived as a result of the above R&D

The Company will be soon marketing the above said State of Art Technology products inboth domestic and international markets.

3. Imported technology during last 5 years.

c. FOREIGN EXCHANGE EARNINGS AND OUTGO:

i. Activities relating to Exports

The Company will be re-entering into South East Asia and Asean Countries with the newlydeveloped Vaccum Circuit Breakers with Magnetic Actuator Mechanism