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ANNUAL REPORT23rd

ACCURATE TRANSFORMERS LTD.AN ISO 9001 COMPANY

2010 - 2011

ACCURATE TRANSFORMERS LTD.

CONTENTS

Particulars Page

Board of Directors 3

Notice 4

Director's Report 7

Management Discussion & Analysis 14

Corporate Governance 21

Additional Shareholders' Information 27

Auditor's Report 33

Balance Sheet 2010-11 39

Profit & Loss Accounts 40

Schedules 41

Cash Flow Statement 54

Proxy Form & Attendance Sheet 55


Board of Directors : Sh. C. L. Sharma, Chairman & Managing Director

Sh. Deepak Sharma, Managing Director

Sh. K. L. Chauhan, Independent Director (Expired on 16-01-2011)

Sh. Bhupal Singh, Independent Director

Sh. Subhash Chander Sharma, Independent Director (Appointed w.e.f. 03-09-2010)

Company Secretary : Sh. V.K.Chhabra

Registered Office : 8, L. S. C., Vardhman Sidhant Plaza,

Savita Vihar, Delhi - 110 092

Works : 1. Meerut Road, Opp. Raj Nagar Chowki, Ghaziabad, U. P.

2. D-16-17, UPSIDC Industrial Area, Greater Noida, U. P.

3. A-97, UPSIDC Industrial Area, Sikandrabad, U. P.

4. 1394/2, M. Langha Road, Dehradun, Uttranchal

5. Plot No. 2, Sector 8A, Integrated Industrial Area, Ranipur, Haridwar, Uttranchal

Auditors : S. Lal & Company87-88, Navyug Market, Ghaziabad (U. P.)

Bankers : Bank of MaharashtraPreet Vihar, Delhi - 110 092

: Indusind BankDr. Gopal Das Bhawan,28, Barakhamba Road, New Delhi - 110 001

: Bank of IndiaSector 18, NoidaNoida

: IDBI BankRed Cross Building, Red Cross RoadNew Delhi -110 001

Registrar & : MAS Services Ltd.Transfer Agent T-34, IInd Floor, Okhla Industrial Area Phase -II(RTA) New Delhi - 110 020

Tel : 011-26387281/82/83

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NOTICE

Notice is hereby given that the 23rd Annual General Meeting of the members of Accurate Transformers Limited will be held on Friday, the 30th day of September, 2011 at 09.00A.M. at Surya Garden Farm House, Palla Bakhtawerpur Road, G.T. Karnal Road, Alipur, Delhi -110036 to transact the following business -

Ordinary Business

1. To receive, consider and adopt the audited Balance Sheet of the Company as at 31st March 2011, the Profit and Loss Account for the year ended on that date and the Reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Shri Bhupal Singh,who retires by rotation at this Annual General Meeting and being eligible offers himself for re-appointment. .

3. To consider and, if thought fit to pass with or without modification(s), the following as an Ordinary Resolution :-

"RESOLVED that pursuant to Section 224 of the Companies Act, 1956 M/s S. Lal and Company, Chartered Accountants, the retiring Auditors of the Company be and are hereby re-appointed as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company at such remuneration as may be fixed by the Board of Directors of the Company in consultation with the Statutory Auditors."

Special Business

1. To consider and, if thought fit, to pass with or without modification (s), the following as an ORDINARY RESOLUTION :-

"RESOLVED THAT in partial modification of the Resolution passed at the 21st Annual General Meeting of the Company held on September 30, 2009 for the appointment and remuneration payable to Shri Deepak Sharma, Managing Director of the Company and in accordance with the provisions of Section 198,269,309,310 read with Schedule XIII and other applicable provision, if any, of the Companies Act, 1956 or any statutory amendment or re-enactment thereof and subject to such other approvals as may be necessary approval be and is hereby accorded to the modification in the terms of remuneration payable to Sh. Deepak Sharma, Managing Director of the Company with effect from October 01,2011 for the remaining period of his appointment i.e. up to 02-09-2013 as set out in the Explanatory Statement".

"RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to alter or vary the terms of appointment of the appointee including relating to remuneration as it may, at its discretion, deem fit from time to

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time so as not to exceed the limits specified in Schedule XIII to the Companies Act 1956 or any statutory amendment or re-enactment thereof".

"RESOLVED FURTHER THAT pursuant to all applicable provisions of the companies Act 1956, the revised remuneration, as set out in Explanatory Statement be paid as the minimum remuneration, in case of absence or inadequacy of profits, during the residual tenure of appointment of the Managing Director."

EXPLANATORY STATEMENT AS REQUIRED UNDER SECTION 173 (2) OF THE COMPANIES ACT, 1956

Brief Profile of Shri Deepak Sharma (Item No. 1 of Special Business)

Name : Shri Deepak Sharma

Father's Name : Shri C. L. Sharma

Designation : Managing Director

Date of Appointment as Director of the Company : 03-09-2008

Date of Appointment as Managing Director : 03-09-2008

Date of Birth : 12-12-1980

Address : C-187, Surya Nagar, Ghaziabad

Qualification : M. Com., MBA.

No. of Board Meetings held during his tenure : Forty Two ( from 03-09-2008 to 31-03-2011 )

No. of Board Meetings attended : Forty Two

Member of Board or Committees of : Two Board of other Companies

Shri Deepak Sharma is M. Com., MBA. He is Managing Director of Modern Instruments Pvt. Ltd. (MIPL) since 13-11-2000. MIPL is into business of manufacture of ACSR, AAC, Aluminium Conductors which is used for transmission and distribution of electricity. Your Company will certainly be benefitted from the energetic stage of life and rich experience of Shri Deepak Sharma as Managing Director of the Company. He joined the Company as Managing Director with effect from 03-09-2008.

The Company has made commendable progress in terms of sales and net profit with the wholehearted contribution and dynamic leadership given by Shri Deepak Sharma, Managing Director of the Company. Your Board feels that to maintain this tempo and to remunerate Shri Deepak Sharma, Managing Director suitably, he should be paid reasonably sufficient remuneration, commission and perquisites keeping in view his extensive responsibility and all round exposure in the increasing activities of the Company. The Board of Directors have therefore considered in their meeting held on

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25-08-2011 to revise remuneration, commission and perquisites with effect from 01-10-2011 for the residual period of his tenure up to 02-09-2013. The revision in the remuneration etc., is within the guidelines in schedule Xlll of the Companies Act 1956, and other provisions , if any Companies Act 1956 .

Name and Designation Tenure upto Present Pay Scale & Proposed Pay Scale &Basic Salary p.m (Rs.) Basic Salary p.m (Rs.)

Sh. Deepak Sharma 02-09-2013 1,00,000 - 10,000 - 1,75,000 - 25,000 - Managing Director 1,40,000 2,00,000

Besides the above salary the Managing Director shall also be entitled to perquisites which may include accommodation/HRA, reimbursement of expenses for gas, electricity, water and furnishings, medical reimbursement, LTC, personal accident insurance, use of car and telephone, contribution to Provident Fund, superannuation fund or annuity fund, gratuity payable at a rate not exceeding half a month's salary for each completed year of service and have leave encashment at the end of the tenure. Perquisites shall be restricted to an amount equal to the annual salary or the amount of entitlement in accordance with Schedule XIII to the Companies Act 1956 as amended from time to time whichever is less.

Besides the above salary and perquisites a commission @ 4% of net profits of the Company but restricted to 10% of net profits of the Company as salary and perquisites for all working directors shall be payable to the Managing Director.

The above remuneration, perquisites and commission shall also be paid as minimum remuneration to Shri Deepak Sharma, Managing Director in the event of absence or inadequacy of profit in any year during the remaining tenure of his appointment.

This may also be treated as compliance of Section 302 of the Companies Act, 1956.

The necessary resolutions are placed for the approval of the members. Shri C.L. Sharma is interested Director in these resolution being father of Shri Deepak Sharma.

Shri Deepak Sharma is interested in these resolutions.

By order of the Board

For Accurate Transformers Ltd.

Registered Office : V.K. Chhabra8,L.S.C,Vardhman Siddhant Plaza Company SecretarySavita Vihar, Delhi-110 092

Dated : 05-09-2011

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DIRECTORS' REPORT

To,

The Members

Accurate Transformers Limited

Your Director have pleasure in presenting their TWENTY THIRD ANNUAL REPORT on the statement of Accounts of your Company for the financial year ended on 31st March' 2011.

(2010-2011) (2009-2010)

Sales & Other Income 22,102.09 19,124.85

Profit before interest, Depreciation & Tax 2,651.84 2,255.69

Less : Financial Charges 1,730.56 1,332.50

Depreciation 93.75 111.58

Profit before Tax 827.53 811.61

Less Provision for Tax (Current) 221.50 205.00

(Deferred) 8.97 (15.07)

(Previous Year) – 0.52

(Fringe Benefits Tax) – –

Profit after Tax 597.05 621.16

Add Balance brought forward 4,065.34 3,444.18

Profit available for appropriation 4,623.89 4,065.34

Appropriations

1. General Reserve – –

2. Surplus carried to Balance Sheet 4,623.89 4,065.34

4,623.89 4,065.34

Operation

During the year under consideration, your company achieved a turnover of Rs. 22,102.09 lakhs as against Rs. 19,124.85 lakhs for the previous year. The net Profit after tax at Rs. 597.05 lakhs which is slightly lower as compared to the Previous year of Rs. 621.16 lakhs. Your company accordingly has registered an increase of Rs. 2977.24 lakhs in turnover and a slight decrease of Rs. 24.11 lakhs in net profit during the Financial Year 2010-11.

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The major customer of Company's product are State Electricity Boards / Govt. Sectors. With the growth in industrial sector and power equipment sector and with a view to diversify its marketing strategy the company is making efforts to enlarge its customer base of private Sector enterprises.

At present, the Company is manufacturing Power Transformers upto 40 MVA capacity. There is tremendous scope of growth and better profitability in higher capacity Power Transformers. Keeping the same in mind, your company has planned for manufacture of Transformers of 160 MVA capacity in near future.

Dividend

With a view to conserve the resources of the Company, the Directors regret their inability to declare dividend for the year ended on 31.03.2011. The accumulated profit is being carried forward in the Profit & Loss Account.

Future Growth Prospects

India"s power market is the fifth largest in the World. Total installed capacity for Power Generation in the Country as on 30-06-2011 is 1,76,990 MW. The power sector is high on Govt of India's priority as it offers tremendous potential for Power Equipment suppliers Companies based on the sheer size of the market and the returns available on invested capital.

In the past five years , there has been a much greater emphasis on Power Sector reforms including transmission and distribution reforms. The government aims to provide "power to all by 2012".To achieve that promise, it will have to add as much as 78,577 MW of generation capacity, cut transmission and distribution losses substantially, rationalize tariffs and ensure that average revenue realization is greater than the cost of production. it will have to continue to push the process of reform and restructuring and ensure greater private participation, in every segment.

The objective of Govt " Power to all by 2012 " has added impetus to growth of power equipment manufactures. Govt. has planned an ambitious target of additional target of additional power generation capacity of 78,577 MW in 11th five year plan leading to very bright future for all power equipment manufactures . As our Company is dominant supplier to almost all State Electricity boards of the country thus see a bright future ahead.

Directors

Dr. Om Prakash Sharma, Director has resigned from the directorship w.e.f. 3rd September, 2010. The Board of Directors places on records the appreciation of services rendered by Dr. Om Prakash Sharma during his tenure.

Sh. Subhash Chander Sharma was appointed as an independent Director w.e.f. 3rd September 2010.

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Shri K.L. Chauhan, Director expired on 16-01-2011. The Board appreciates the untiring efforts done by Shri K.L.Chauhan for the growth of the company during his long eleven years of association with the Company.

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 confirmed:

i. That in the preparation of the accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments 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 profit or loss of the company for the year under review;

iii. That the Directors have taken proper and sufficient 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;

iv. That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a going concern basis.

Auditors and Their Report

M/s S. Lal & Company, Chartered Accountants, the Statutory Auditors of the Company will retire at the end of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

The report of the Auditors on the accounts of your Company for the period under report is appended elsewhere with this report. The observations made by them in their report, however, are self-explanatory and do not call for any further comments under Section 217 of the Companies Act, 1956.

Fixed Deposits

Your Company has not accepted any deposit during the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The requisite information in regard to conservation of energy, technology absorption, foreign exchange earnings and outgo in terms of Section 217 (1) (e) of Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is set out in Annexure A annexed hereto which forms part of this report.

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Particulars of Employees

Information in accordance with the provisions of section 217 (2A) of the Companies Act, 1956 read with Companies (particulars of Employees) rules,1975 as amended regarding employees given below :

S. Nameno. nature of duties ration cation commence- Experience Years Employ-

Gross ment of (Years) mentRs. employment

1 Sh. C.L. Managing Director 30,00,000 M.Sc. 18.04.1988 32 57 Enter-Sharma Overall Superin- prenure

tendence andcontrol of affairsof the Company

Compliance of the Listing Agreements

During the year under review the Company has made compliances with the Listing Agreement with the Stock Exchanges. The Cash flow statement is annexed with the report and detail of Stock Exchanges where the shares of the company are listed is given in Annexure B.

Industrial Relations

Industrial relations between employees and Management have remained very cordial during the period under report.

Acknowledgement

Your Directors wish to place on record their appreciation for dedicated efforts and contributions made by all the employees of the company during the year. Your Directors would also like to express their sincere gratitude for the valuable assistance, advice and support extended by the Government of India, state Governments, Financial Institutions and Stock Exchanges. The Directors would also like to thank the share holders, customers, suppliers and banks for the support they have given to the company and the confidence they have reposed in the Management.

On behalf of the Board of Directors

Place : Delhi C. L. Sharma

Dated : 5th September, 2011 Chairman & Managing Director

Designation & Remune- Qualifi- Date of Total Age in Last

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ANNEXURE-A

ANNEXURE TO THE DIRECTORS' REPORT

Year Ending Year Ending 31.03.2011 31.03.2010

FORM 'A'

A. Power and Fuel Consumption

1. Electricity

(a) Purchased KWH 25,65,356 20,55,958

Total Amount Rupees 12,661,120 10,259,230

Rate / Unit Rupees 4.94 4.99

Own Generation Units 512,264 355,154

Unit Per Ltr. of Diesel Oil Unit (KWH) 6.86 5.85

Cost Rs. / Unit 5.98 5.70

B. Consumption Per Unit of Production

Transformer No. 18698 19,532

Electricity (Includes Unit for DG Set) Unit/Transformer 137.20 122.42

Cost Rs./Transformer 677.14 623.06

C. Consumption per unit of Production Kgs. NIL NIL

(Chemical) Unit/Kg. NIL NIL

Rs./Per Kg. NIL NIL

FORM 'B'

A. Research & Development (R&D)

1. Specific area in which R&D Improvement of process productivity and carried out by the company quality; reduction of cost and control on

rejection; development of new designs and models.

2. Benefits derived as a result of Overall improvement in performance ofthe above R & D products, reduction in manufacturing

costs; minimize material consumption; optimization of product design; improve performance, increase in productivity and reliability

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3. Future plan of action To continue work in design and development of New models and products; to constantly review quality & performance of existing products for appropriate modification etc,

B. Technology Absorption, Adaptation, & Innovation

1. Efforts, In brief, made towards Developing in-house expertise to absorb technology absorption and technology for adaption and for design & innovation manufacturing of Power Transformers of

Higher ratings.

2. Benefits derived as a result of Diversification project implemented for the above efforts e.g. import manufacture of Power Transformers,substitution, etc. product improvement, cost reduction &

development.

3. In case of imported technology(imported during the last 5 YearsReckoned from the beginning ofthe financial Year); followinginformation may be furnished

a) Technology imported

b) Year of import

c) Has technology been fullyabsorbed?

d) If not fully absorbed, areas where this has not takenplace, reasons thereforeand future plans of action.

C. Foreign Exchange Earnings & Outgo

Activities relating to foreign exchange are as under :

Particulars 2010-2011 2009-2010

Foreign Exchange earned NIL NIL

Foreign Exchange outgo NIL NIL

Not Applicable

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ANNEXURE – 'B'

Names and Addresses of Stock Exchanges with which Listing Agreements have been entered into :

S. No. Name of Stock Exchange Address

1. The Delhi Stock Exchange DSE House3/1, Asaf Ali Road,New Delhi - 110 002

2. The Stock Exchange Bombay Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001

3. The U.P. Stock Exchange Association Ltd. Padam Towers14/113, Civil LinesKanpur - 208 001

4. The U.P. Stock Exchange Ahmedabad Kamdhenu Complex,Opp. Sahajanand CollegePanjara Pole,Ahmedabad - 380 015

5. Jaipur Stock Exchange Ltd. Stock Exchange Building, Jawahar Lal Nehru Marg,Malviya Nagar, Jaipur - 302 017

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MANAGEMENT DISCUSSION & ANALYSIS REPORT

Overview

Accurate Transformers Limited has its registered office at Delhi and manufacturing units located at the following locations:

1) Meerut Road (Opp. Raj Nagar Chowki), Ghaziabad, U.P.

2) D-16-17, UPSIDC Industrial Area, Greater Noida, U.P.

3) A-97, UPSIDC Industrial Area, Sikandrabad, U.P.

4) 1394/2, M, Langha Road, Dehradun, Uttranchal

5) Plot No. 2, Sector - 8A, Integrated Industrial Area, Rani pur, Haridwar, Uttranchal.

The Directors' Report gives in detail the performance of your Company and therefore, please refer to "Review of operations" in this regard.

Your Company has achieved 16% higher sales as compared to last year. This profitability in recessionary conditions has been achieved by effective management of resources, better product mix, and diversification in rural electrification projects.

A number of opportunities exist for Transformer Industry. The need of the hour is to take proactive steps both internal and external to the organisation and management of your company is planning for the same.

The demand for transmission and distribution equipments is expected to be high in the coming years. This is because the government is striving to bridge the widening gap between the demand for and supply of power in the country by adding new generating capacities.

The reform process in the power sector continues. Thirteen states have unbundled SEBs into separate entities for transmission, distribution and generation. Two states have privatized distribution. Regulatory authorities have been set up in 24 states. These authorities are applying commercial principles to tariff setting, monitoring the performance of state utilities and paying attention to areas such as demand side management and grid discipline.

We are all aware that the demand for power has consistently outstripped the supply. In order to bridge this demand sully gap, Govt. of India's National Electricity Policy stipulates 'Power For All by 2012' and aims to achieve a per capita consumption of 1,000 KWH by the end of XIth Plan, by adding a capacity of 78,577 MW. This requires massive investment of over Rs. 10,00,000 crore during this Plan period including establishment of requisite transmission and distribution system.

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Further the Government is planning 40,000 MW of power by 2020 through its nuclear programme.

We believe that the above plans of the Govt. of India for generation capacity addition and facilitation of investments in the T & D system would provide buoyant conditions for growth, especially for Transformer Sector.

Opportunities In Power Sector

Recognizing the fact that the power sector is of vital importance for development of the economy, the Government of India has taken many policy initiatives in the recent past like :

(a) The National Power Policy. 2005

(b) The Electricity Act. 2003

(c) Setting up of Central Electricity Regulatory Commission in 1998

(d) Guidelines for private investment in transmission, 2006

(e) Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)

(f) Launching of Re-structured Accelerated Power Development and Reforms Programme.

(g) Clean-up of State Electricity Board losses.

Likely upswing in the Indian Economy, high GDP growth of about 8%, thrust on development of infrastructure etc., have also contributed significantly for growth of electrical equipment industry.

Power Sector needs investment of Rs.10,00,000 Crores in the 11th Five Year Plan, i.e. 2007-12. To meet the huge funding requirement the Govt. of India is considering a number of initiatives to provide finance to power sector.

Additional capacity of 78,577 Mega Watt is being implemented through several initiatives of Govt. of India for setting up of several new projects in public and private sectors. Seven Ultra Mega Projects of 4000 MW each are at various stages of implementation.

Industry size, Growth rate

The Transformer Industry in India has been in the forefront for over 50 years and has a well matured technology base up to 800 KV class. There is a strong base of about 150 Transformer Companies in India. Besides meeting the domestic requirement, India is exporting transformers to over 50 countries covering USA, Europe, South Africa, Cyprus, Syria, Iraq and other Middle East and Far East countries all over the world.

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Transformer industry growth due to :

lCaptive power

lReplacement demand

lHuge Government spending in Power Sector

lExports

lIndustrial Demand

lHuge Infrastructure Development

With every Megawatt of generating capacity being added, an additional requirement of 5 times transformer capacity is needed. This provides opportunity for players in the transformer manufacturing space to benefit to the most. This demand coupled with demand arising out of the replacement market also poses a promising future for the players in the sector. The average life of a transformer is 20-30 years, which means that the transformers installed during the IVth - VIIth plan would be replaced now.

Indian Power Scenario

Per capita consumption of electricity is expected to rise to over 1000 kilowatt hours per annum in next 10 years (from present level of 580 kwh). Developed countries has per capita consumption of 10,000 kwh per annum reflecting huge growth potential for the sector.

The growth of the economy calls for matching rate of growth in infrastructure facilities The Indian Power Sector is a core component of the Indian infrastructure and its expansion is essential for the success of economic liberalization of India. At present, a ratio of infrastructure development of around 1.5 to G.D.P is projected. Therefore, in order to support a rate of growth of GDP of around 9 % per annum, the rate of growth of power supply needs to be over 14 % annually. This is evident from ever increasing power demand of the country's vibrant economy leading to a widening gap between the supply and demand.

Strength of your Company

lCompany's major customers are various SEBs who have initiated restructuring for better efficiency hence the business prospects of the company good. In most of the cases, payments are made out of Word Bank Funds.

lRural Electrification Projects is another profitable area where Company has gained substantial ground.

lThe company has a proven track record of successfully operating in the power sector, hence continue to be in the priority list of various State Electricity Boards.

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lThe exposure falls under SSI sector which is a thrust area.

lTwo of our manufacturing units are located in tax exemption zone leading to substantial tax savings.

Threats

lThe entry of multi-nationals in the field of power and distribution transformers Sector. This may result in cut throat competition.

lThough the SEBs are under restructuring process, they are still facing with liquidity constraint resulting in delayed payments to their suppliers.

lMajor customers of the company are various SEBs.

l Higher commodity and oil price both locally and international

l Destablisation of European and USA economies

Disclosure of Material Transactions

Considering the size and nature of operations there were no related party transactions of a materially significant nature in terms of the Listing Agreement with Stock Exchanges that could have potential conflict with the interests of the Company at large.

Accounting Policies

The Company has adopted accounting treatments which are in conformance with those prescribed by the Accounting Policies.

Insider Trading

The Company has comprehensive guidelines in accordance with the SEBI Regulations in this regard which advise and caution the Directors, Management and Executives on the procedures to be followed, whilst dealing with the securities of the Company. The insider Trading Guidelines framed by the Company helps in ensuring compliance with these requirements.

Communication to Shareholders

Full and complete disclosure of information regarding the Company's financial situation and performance is an important part of the Company's Corporate Governance ethics. The Company has demonstrated this commitment by sending its shareholders a full version of its Annual Report, despite a Regulatory exemption.

The Company's quarterly results in the format prescribed by the Stock Exchanges are approved and taken on record by the Board within the prescribed timeframe and sent

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immediately to all Stock Exchanges on which Company's shares are listed. These results are published in leading newspapers in English and Hindi.

Company Website

www.accuratetransformers.com

Information on General Body Meetings

The details of the last three General Meetings are as under :

List of Last 3 years AGM

AGM / EGM Date Venue / Special Business

AGM 30-09-2010 9.00 a.m. at Surya Garden Farm House, Pala Bakhtavarpur Road, G.T. Karnal Road, Alipur, Delhi- 110 036

Special Business

(a) Appointment of Shri Subhash Chandra Sharma as A director liable to retire by rotation

(b) Allotment of Warrants to promoters

AGM 30-09-2009 9:00 a.m. at Surya Garden Farm House, Palla. Bakhtawerpur Road, G. T. Karnal Road, Alipur, Delhi - 110 036

Special Business. Passed

(a) Revision in remuneration payable to Shri Deepak Sharma, Managing Director of the Company

(b) Issue of Share warrants to Promotors Group

(c) Issue of Share warrants to selected investors

(d) Resolution under section 293 (1) (a) for Term Loans from SIDBI

AGM 30-09-2008 9:00 a.m. at Carnival Farm House, G.T. Road, Alipur, Delhi - 110 036

Special Business. Passed

(a) Revision in remuneration payable to Shri C. L. Sharma, Managing Director of the Company

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(b) Appointment of Shri Deepak Sharma as Director

(c) Appointment of Shri Deepak Sharma as Managing Director of the company and to approve his remuneration

Details of Capital Market Non-Compliance, if any

The Company has complied with all requirements of the Listing Agreement with Stock Exchanges as well as the regulations and guidelines prescribed by SEBI. There were no penalties or strictures imposed on the Company by any statutory authorities for non - compliance on any matter related to capital markets.

Shareholders' / Investors' Grievance Committee

The Committee was re-constituted on 29th January, 2011 and now comprises of Shri Subhash Chandra Sharma (Chairman), Shri Bhupal Singh. Shri V. K. Chhabra, the Company Secretary has been designated by the Board as the Compliance Officer. During F.Y.2010-11, the Shareholders' / Investors' Grievance Committee met on 16 times on 15-04-2010, 15-05-2010, 15-07-2010, 16-08-2010, 30-08-2010, 15-09-2010, 30-09-2010, 30-10-2010, 30-11-2010, 15-12-2010, 30-12-2010, 15-01-2011, 15-02-2011, 28-02-2010, 15-03-2011 and 30-03-2011 at which meetings all Members were present.

The Committee reviews the redressal of Investors' complaints related to transfers and transmission of shares, non-receipt of annual reports, dividends and other share related matters, the periodicity and effectiveness of the share transfer process, statutory certifications, depository related issues and activities of the Registrar and Share Transfer Agent.

The Company has received 16 complaints from shareholders during the financial year 2010-11 and as on now none of the Complaints are are pending.

CEO Certification

The Managing Director has certified to the Board with report to the financial statements, internal controls and other matters, as required by Clause 49 of Listing Agreement with Stock Exchanges and the said Certificate is contained in this Annual Report.

Report on Corporate Governance

This chapter, read together with the information given in the chapter titled Additional Shareholder information, constitute the compliance report on Corporate Governance during F.Y. 2010-11.

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Auditors Certificate on Corporate Governance

The Company has obtained a certificate from the Auditors of the Company regarding Compliance with the provisions relating to Corporate Governance prescribed by Clause 49 of the Listing Agreement with Stock Exchanges, which is attached at the end of this report.

Industrial Relations

Industrial relations remained peaceful during the year under review

Enhancing Shareholders Value

The Company continues its relentless focus on strengthening its competitiveness in the transformer and Rural Electrification businesses. The Company would strive to deploy its resources in the most judicious and optional manner so as to secure the interest of its shareholders in the near and long term.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company's objectives, expectations, or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement; important factors that could influence the Company's operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

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CORPORATE GOVERNANCE

The Company's Philosophy on Corporate Governance

Accurate Transformers Ltd. continues to remain committed to highest levels of Corporate Governance and seeks to achieve a healthy blend of performance with conformance; creating the environment and the means through which corporate objectives are attained. The Company is committed to maintaining high standards of ethical behaviour and Corporate Governance, and to serving its shareholders with honesty, fairness and integrity.

Board of Directors

Composition

As on 31 March 2011, the Company had a four member Board of Directors. The Chairman Shri C. L. Sharma is a whole time working Director designated as Chairman & Managing Director. He belongs to promoters' family.

Shri Deepak Sharma has been appointed as a Managing Director w.e.f. 03-09-2008. He belongs to promoter's family.

Shri M. K. Basak was a professional Director and was working as a Whole Time Director since November 1993 upto 30.09.2009.

Name Particulars Relationship Other Board Representations

Directorship Committee CommitteeMembership Chairman-

ship

Sh. C. L. Sharma Chairmen & Managing Father of Sh. Accurate Meters Ltd. None NoneDirector (Executive) Deepak Sharma

Maharashtra MetersLimited

Sh. Deepak Sharma Managing Director Son of Sh. Modern Instruments None None (Executive) C. L. Sharma Pvt Limited

Gilbert Electricals& Electronics Pvt.Limited

Sh. Bhupal Singh Independent Director None None Two Three

Sh. Subhash Chandra Independent Director None None One Three Sharma


22

Composition of the Board

Shri Bhupal Singh and Dr. Om Prakash Sharma were appointed as independent Directors w.e.f 31-01-2007 in terms of Clause 49 of the Listing Agreement with Stock Exchanges. Shri K.L.Chauhan who was serving on the Board since last about eleven years was the other independent Director. Who passed away on 16-01-2011. As on 31.03.2011, the Board comprises Two Executive Directors and two Non-Executive Directors, of whom two are independent Directors. Table 1 gives the composition of the Board, relationship between Directors and the numbers of outside directorships held by each.

Board Meetings

There were twenty Meetings held during the year on 30-04-2010, 15-05-2010, 09-07-2010, 31-07-2010, 01-08-2010, 22-08-2010, 02-09-2010, 03-09-2010, 31-10-2010, 11-11-2010, 02-01-2011, 10-01-2011, 11-01-2011, 31-01-2011, 18-03-2011 and 31-03-2011. The Company's last Annual General Meeting was held on 30th September, 2010. Table gives the attendance record of the Directors at the Board Meetings :

Attendance Record of The Directors Durning F.Y. 2010-11

Date Attended Not Attended

30-04-2010 Sh. C.L. Sharma, Chairman & Managing Director All were Present


Dr. Om Prakash Sharma, Director

Sh. Bhupal Singh, Director

Sh. K.L.Chauhan, Director










Sh. K.L. Chauhan, Director


23



























24





Sh. Subhash Chander Sharma,Director





Sh. Subhash Chander Sharma,Director





Sh. Subhash Chander Sharma, Director












25


Sh. Deepak Sharma,











Code of Conduct

The Company has a Code of Conduct for Directors and Senior Management that reflects its high standards of integrity and ethics. The Director and Senior Management, of the Company have affirmed their adherence to this Code of Conduct and to the absence of any potential conflict with the interests of the Company with reference to material, financial and commercial transactions. As required by Clause 49 of the Listing Agreement, the Managing Director's Declaration on adherence to the Code of Conduct has been annexed to this Report.

Committees of the Board

Audit Committee

The Audit Committee comprises two Non-Executive Directors, all are independent. The committee was re-constituted on 29th January, 2011 and composition is as under :

lShri Bhupal Singh, Director

lShri Subhash Chander Sharma, Director

The company Secretary is the Secretary to the Committee.

In terms of the present scope of this Committee, it regularly reviews the financial reporting processes, financial statements, internal control systems, taxation related issues,related parties of the Company and compliance with regulatory guidelines.

During FY 2010-11, four meetings of Audit Committee were held.

Managing Director


Remuneration Committee

Although not mandatory in terms of Clause 49 of the Listing Agreement, the Company has a remuneration Committee comprising three Non- Executive Directors, of which two, including the Chairman, are independent. The Committee was re-constituted w.e.f. 29-01-2011 and comprises :



Since no revision to the remuneration package of the Managing Director took place during FY 2010-11 no meeting of the Remuneration Committee was convened.

Shareholders' / Investors' Grievance Committee

The company has Shareholders' / Investor's Grievance Committee details of which are given under section 'Shareholders' in this Report. The Committee was re-constituted w.e.f. 3rd September, 2010 and comprises :



26


27

ADDITIONAL SHAREHOLDERS' INFORMATION

Annual General Meeting

Date : 30th September, 2011

Time : 9:00 A.M

Venue : Surya Garden Farm House, Palla Bhaktawerpur Road, Alipur, Delhi - 110036

Financial Calendar

First Quarter Results : Mid August

Second Quarter Results : Mid November

Third Quarter Results : Mid February

Last Quarter Results : Mid May

Annual Audited Results : Last week of August

Dates of Book Closure

The register of members and share transfer books of the Company shall remain closed from Thursday 22nd September, 2011 to Friday, 30th September, 2011.

Registrar and Transfer Agents

The share registry activities of the Company are handled by a SEBI registered Registrar and Transfer Agent - MAS SERVICES Ltd. whose contact details are :

MAS Services. Ltd.T-34, IInd Floor, Okhla Industrial Area, Phase - II, New Delhi - 110 020Tel: 011 26387281/82/83 E-mail id: [email protected]

To enable the Company to expeditiously facilitate exchange of shares and issue of duplicate share certificates by our Registrar and Transfer Agent, members are requested to route their request in these matters only through the Company's Investor Services Department.

The Company's Investor Services Department will be happy to assist in case Investors experience any difficulties in their interaction with MAS Services Ltd.

Share Transfer System

The Company's shares are compulsorily traded in dematerialised form. In the case of transfers in physical form which lodged at the Registrar and Transfer Agent's office, these are processed within a maximum period of 30 days from the date of receipt.


28

All Share transfers and other share related issues are approved by a Director or by a Senior Executive duly authorised by the Board.

Dematerialisation of Shares

As on 31st March 2011, 24,95,495 shares representing 83.98 % of total shares of the company were dematerialised compared to 24,56,798 shares representing 82.67 % of total shares as on 31st March 2010.

Stock Codes

BSE: 530513

Listing Details

The details of the Stock Exchange on which the Company's shares are listed are:

The Stock Exchange Mumbai P.J Towers, Dalal Street, Fort Mumbai - 400 001

The Delhi Stock Exchange DSE House, 3/1, Asaf Ali Road, New Delhi 110002

The U.P Stock Exchange Padam Towers, 14/113, Civil Lines, Association Ltd. Kanpur - 208 001

The Stock Exchange, Kamdhenu Complex, Opp. Sahajanand College, Ahmedabad Panjara Pole, Ahmedabad - 380 015

Jaipur Stock Exchange Ltd. Stock Exchange Building, Jawahar Lal Nehru MargMalviya Nagar, Jaipur - 302 017

Market Price Data

There was no trading on Delhi, Jaipur, Kanpur and Ahmedabad Stock Exchanges due to reason that these stock exchanges are not in operation.

Month wise high, low and average prices from April 2010 to March 2011 is given below :

Month High (Rs.) Low (Rs.) Average (Rs.)

April 103.00 72.00 87.50

May 102.05 80.00 91.03

June 95.50 78.10 86.80

July 144.50 92.35 118.43

August 102.50 96.00 99.25

September 109.00 94.70 101.85


29

October 115.45 93.25 104.35

November 126.80 92.10 108.95

December 114.85 91.20 109.45

January 119.45 82.10 100.77

February 94.15 53.10 73.63

March 94.85 55.20 75.023

DISTRIBUTION OF SHAREHOLDING AS ON 31 MARCH 2011

Number of Shares Number of %age of Nominal %age ofShareholders Shareholders Value in Rs. Shareholders

1 - 5000 3383 88.306 6224470 20.495

5001 - 10000 225 5.873 1721170 5.667

10001 - 20000 117 3.054 168352 5.543

20001 - 30000 33 0.861 798350 2.629

30001 - 40000 16 0.418 566810 1.866

40001 - 50000 15 0.392 670110 2.206

50001 - 100000 16 0.418 1260690 4.151

100001 and Above 26 0.679 17445880 57.443

Total 3831 100.00 3071000 100.00

CATEGORIES OF SHAREHOLDERS ON 31 MARCH 2011

Category Number of Shares %

Promoters 1,295,874 43.61

Indian Public 1,675,826 56.39

Total 2,971,700 100.00

Total Share Holders in NSDL 1536 Total Shares in NSDL 867225

Total Share Holders in CSDL 864 Total Shares in CSDL 1628273

Total Share Holders in PHY 1431 Total Shares in PHY 541602

Total Share Holders 3831 Total Shares 3037100


Investor Services Department

In addition to the Share Registrar and Transfer Agents, our Investor Services Department, which is located at the Company's Registered Office will be happy to assist. In case investors experience any difficulties in their interaction with MAS Services Pvt. Ltd.

Contact Person : Shri V.K.ChhabraCompany Secretary

Time : 2:00 pm to 5:00 pm (Monday to Friday)

Tel : 91-120-453700-729 Fax : 91-120-2834191

E-mail : [email protected]

Plant Location

The required details are given on back side of Cover Page.

The Company has implemented the following non-mandatory requirements recommended by Clause 49 of the Listing Agreement.

Reunumeration Committee

A Remuneration Committee comprising two Non-Executive Directors is already functional for review and decisions on the remuneration package of the Managing Director.

Company Website

www.accuratetransformers.com

Financial Results

Financial results as published in the newspapers are made available to the members on request.

On behalf of the Board of Directors

Place : Delhi

Dated : 5th September, 2011 C. L. SharmaChairman

30


31

MANAGING DIRECTOR'S CERTIFICATE ONCORPORATE GOVERNANCE

To Dated : 5th September 2011

The Board of DirectorsAccurate Transformers Ltd.

CERTIFICATE

We have reviewed financial statements and the cash flow statement of Accurate Transformers Ltd. for the financial year ended 31 March, 2011 and certify that:

(a) These statements to the best of our knowledge and belief.

(i) Do not contain any materially untrue statement or omit any material facts or contain statements that might be misleading.

(ii) Present a true and fair view of the Company's affairs and are in compliance with existing accounting standards applicable laws and regulations.

(b) To the best of our knowledge and belief there are no transactions entered into by the Directors and Senior Management during the year, which are fraudulent, illegal or violative of the Company's Code of Conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and have evaluated the effectiveness of the internal control systems of the Company to such reporting. We have disclosed to the Auditors and the Audit Committee deficiencies if any in the design or operation such internal controls, of which we are aware and the steps taken and / or proposed to be taken to rectify these deficiencies.

(d) We have also indicated to the Auditors and the Audit Committee.

(i) Significant changes in the internal controls with respect to financial reporting during the year and the achievement of adequate internal controls within the Company's ERP systems.

(ii) Significant changes in accounting policies during the year and these have been disclosed in the notes to the financial statements.

(e) To the best of our knowledge and belief there are no instances of significant fraud involving either the Management or employees having a significant role in the Company's internal control systems with respect to financial reporting.

C. L. SharmaChairman & Managing Director


32

CERTIFICATE ON CORPORATE GOVERNANCE

To, Dated : 5th September 2011

The MembersAccurate Transformers Ltd.8, L.S.C, Vardhman Sidhant Plaza, Savita Vihar, Delhi - 110 092

We have examined the compliance of conditions of Corporate Governance by Accurate Transformers Ltd for the year ended 31-03-2011, as stipulated in Clause 49 of Listing Agreement entered by the Company with the Stock Exchanges.

The compliance of conditions Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementations thereof adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. it is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explorations given to us, we certify that the Company has compliance in all material respects with the conditions of Corporate governance as stipulated in the above mentioned Listing Agreement.

We further state that no investor's grievances are pending against the Company as at financial year end as per the records maintained by the Shareholders/Investors' Grievances Committee.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For S LAL & COMPANY87- 88, Navyug Market

Gaziabad (U.P.)


AUDITOR'S REPORT

TO THE MEMBERS OF ACCURATE TRANSFORMERS LIMITED,

1. We have audited the attached Balance Sheet of ACCURATE TRANSFORMERS LIMITED as at 31st March, 2011 and also the Profit & Loss Account and the Cash flow Statement for the year ended on that date annexed thereto. The financial statements are the responsibility of the Management of the Company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to above, we report that: -

a. We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit ;

b. In our opinion, subject to paragraph 5.1, 5.2 and 5.3 below, and notes given in schedule 16, proper books of account as required by law have been kept by the company so far as appears from our examination of the books ;

c. The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account ;

d. In our opinion, subject to paragraph 5.3 and 5.4, Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this Report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the companies Act, 1956;

e. On the basis of the written representation received from the directors and taken on the record by the Board of Directors, we report that none of the

S. LAL & COMPANYCHARTERED ACCOUNTANTS

87-88 NAVYUG MARKETGHAZIABAD-201001

Ph. : 2790154, 4111622

33


director of the Company is disqualified as on 31st March, 2011 from being appointed as a director under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 with reference to the matters relating to the Company;

f. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with accounting policies and notes thereon and attached thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to our comments in paragraph 5 below, give respectively, a true and fair view in conformity with the accounting principles generally accepted in India :

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; and

(ii) in the case of the Profit & Loss Account, Profit for the year ended on that date; and

(iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

5.1. Income Tax Authorities has conducted search proceedings under section 132 of the Income Tax Act, 1961 on 26th July 2006. The Assessment proceeding has been completed. The Company has gone in appeal in all cases. Now the matter is pending before C.I.T ̀ (Appeals).

5.2. During the Search Proceedings, the Company has offered Rs. 175 lacs as additional income, and the same has been taken into consideration in assessment of the F.Y. 2006-07.The Company has taken the same under the head other Income (in F.Y. 2006-07) and corresponding amount has been shown as other current assets. The exact effect of the same would be taken into the Accounts when the appeal is decided by C.I.T (Appeals).

5.3. The liability towards the retirement benefits i.e. gratuity and leave encashment was provided by the Company on cash basis, contrary to the AS-15, issued by ICAI, the effect of the same is not ascertainable as the amount of liability is not available.

5.4. That the company not follows the Accounting Standard (AS-17), "Segment Reporting" as company deals in Manufacturing of the Transformers, Trading of Iron & Steel and Electrification Project (erection).

For S. LAL & COMPANYChartered Accountants

Sohan Lal, F.C.A.Ghaziabad PartnerDated : 05.09.2011 M. No. 017310

34


Annexure referred to in paragraph (3) of the Auditors' Report of even date on the accounts of Accurate Transformers Limited

for the year ended 31st March, 2011

(i) (a) The Company has maintained proper records showing full particulars, including quantitative detail and situation of fixed assets.

(b) The management has carried out a physical verification of most of its fixed assets during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the book of account.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) During the year, the inventories have been physically verified by the management except for inventory lying with third parties.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintaining proper records of inventories.

(iii) (a) According to the information and explanations given to us, the Company has granted loans, secured or unsecured during the year to companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year are prima facie prejudicial to the interest of the company.

(b) According to the information and explanations given to us, the Company has not taken unsecured loans during the year from the companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year.

(c) In our opinion, in case of loans, secured or unsecured granted or taken to/from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 in the previous years, we are not making any comments because the terms of repayment and/or interest have not been specified.

(iv) In our opinion and according to the information and explanations given to us, the company have adequate internal control systems commensurate with the size of the

35


Company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, we have neither come across any instances of major weaknesses in the aforesaid internal control procedures.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars or arrangement referred to in section 301 of the Act transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakh have been entered into during the financial year at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not invited deposits from the public.

(vii) In our opinion, the internal audit system of the Company is commensurate with the size and nature of its business.

(viii) The company has informed to us to maintain the cost records, in pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956. We have not examined the records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us and records of the Company examined by us, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues i.e. employees' provident fund, ESI, income tax, TDS, service tax, VAT/sales tax, excise duty, cess, Investor education and protection fund and other material statutory dues applicable to it. (Refer to note No. 5 (v) to the schedule 16).

(x) According to the information and explanations given to us and the records of the Company, the following are the particulars of disputed dues on account of excise duty, Income Tax, and Sales tax/VAT, Cess matters that have not been deposited by the company as at March 31, 2011.

36


S. Name of the Statute Nature No. of the (Rs. in which the is pending

dues Lacs) * amountrelated

1. Central Excise Tax Excise 0.51 2003-04 High court of Allahabad

duty161.00 2002-06 Customs, Excise & Services

Tax Appellate Tribunal36.00 2002-06

8.38 2008-09

2. Income Tax Act, Income 23.88 2001-02 Commissioner of1961 Tax Income Tax (Appeals)15.85 2002-03

52.87 2003-04

38.42 2004-05

136.57 2005-06

361.78 2006-07

187.36 2007-08

25.79 2008-09

3. Sales Tax / VAT Sales 1.92 2007-08 Joint Commissioner (Appeals)Tax / Vat

0.93 2009-10

0.42 2009-10

0.68 2009-10

0.34 2009-10

1.77 2009-10

0.04 2009-10

2.40 2008-09 Deputy Commissioner (Assessment)

*Amount as per demand orders including interest and penalty wherever indicated in the demand.

(xi) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(xii) According to the records of the company examined by us and the information and explanations given to us, the Company during the year has not defaulted in repayment of dues to financial institution, banks or debenture holders.

Amount Period to From where dispute

37


(xiii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable.

(xiv) The provisions of any special statue as specified under paragraph 4 (xiii) of the Order are not applicable to the Company.

(xv) As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institution.

(xvii) In our opinion and according to the information and explanations given to us, terms loans were applied for the purpose for which loans were obtained.

(xviii) In our opinion and according to the information and explanations given to us, funds raised on short term basis have, prima facie, not been used during the year for long-term investments.

(xix) According to the information and explanation given to us, the company has issued shares warrant as preferential allotment to Directors/ Promoters covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion the price at which shares warrant have been issued is not prejudicial to the interest of the company.

(xx) As the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.

(xxi) As the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order is not applicable.

(xxii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2011.

For S. LAL & COMPANYChartered Accountants

Sohan Lal, F.C.A.Ghaziabad PartnerDated : 05.09.2011 M. No. 017310

38


ACCURATE TRANSFORMERS LIMITEDBALANCE SHEET AS AT MARCH 31, 2011

(In Rupees)

Particulars Schedule As at As at 31.03.2011 31.03.2010

Source of FundsA. Share Holders Funds

i) Share Capital 1 29,970,500 29,970,500 ii) Share Application Money

on Share Warrant 3,959,000 –iii) Reserves & Surplus 2 479,692,399 513,621,899 419,987,230 449,957,730

B. Loansi) Secured 3 691,526,298 495,877,014 ii) Unsecured 4 75,508,932 767,035,230 55,643,922 551,520,936

C. Deferred Tax Liability (Net) 1,610,603 712,634 Total 1,282,267,732 1,002,191,300

Application of FundsA. Fixed Assets

Gross Block 5 148,349,390 145,370,522 Less Depreciation 87,261,865 77,886,541 Net Block 61,087,525 67,483,981

B. Investments 6 936,100 936,100 C. Current Assets, Loans and Adv. 7

a) Inventories 237,950,449 227,728,907 b) Sundry Debtors 1,092,682,008 736,413,530 c) Cash & Bank Balances 285,348,779 245,345,935 d) Loans and Advances 197,517,430 147,714,759 e) Other Current Assets 33,259,689 25,563,041

1,846,758,355 1,382,766,172 Less : Current Liab. & Provisions 8a) Liabilities 584,127,434 428,802,003 b) Provisions 42,650,000 20,500,000

626,777,434 449,302,003 Net Current Assets 1,219,980,921 933,464,169

D. Miscellaneous Expenditure 263,186 307,051(To the extent not written off or adjusted)

Total 1,282,267,732 1,002,191,300 E. Accounting Policies and Notes to Accts. 16

Schedule 1 to 8 and 16 referred above form an integral part of Balance Sheet

In term of our attached report of even date.

For S. LAL & COMPANY C. L. Sharma Deepak SharmaChartered Accountants Chairman & Managing Director Managing Director FRN : 000819C

Sohan Lal, F.C.A. V. K. Chhabra (Partner) Company SecretaryM No. 017310

Place : GhaziabadDated : 05.09.2011

39


ACCURATE TRANSFORMERS LIMITEDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011

PARTICULARS SCHEDULE For the yearended 31.03.11 ended 31.03.10

INCOME

Sales 2,303,305,410 1,946,602,482

Less: Excise Duty 93,096,165 34,117,087

2,210,209,245 1,912,485,395

Increase/(Decrease) in finished & Semi

Finished Stocks 9 6,750,508 28,077,483

Other Income 10 11,990,100 6,321,338

Total 2,228,949,853 1,946,884,217

EXPENDITURE

Cost of goods consumed/sold 11 1,779,954,512 1,568,318,215

Manufacturing & Other Expenses 12 89,476,767 64,497,814

Personnel Expenses 13 30,537,053 32,397,052

Administrative & Selling Expenses 14 57,685,954 49,764,067

Director's Remuneration 15 6,111,000 6,337,533

Profit Before Interest, Depreciation and Taxation 265,184,567 225,569,535

Financial Charges 173,056,105 133,250,329

Depreciation 5 9,375,324 11,157,756

Profit Before Taxation 82,753,138 81,161,450

Provision for Taxation (Current) 22,150,000 20,500,000

Short Provision in previous years – 52,185

Provision for Taxation (Deferred) 897,969 (1,506,527)

Profit after Taxation 59,705,169 62,115,792

Add: Balance Brought Forward from previous year 406,533,730 344,417,938

Balance available for appropriation 466,238,899 406,533,730

Appropriations

Balance Carried to Balance Sheet 466,238,899 406,533,730

Accounting Policies & Notes to Accounts 16

Earning Per Share(Rs. Per Share) Basic/Diluted (Refer Note No.11) 20.09/20.09 20.75/20.90

Schedule 9 to 16 referred above form an integral part of Profit & Loss Account

In terms of our attached report of even date.

For S. LAL & COMPANY C. L. Sharma Deepak SharmaChartered Accountants Chairman & Managing Director Managing Director FRN : 000819C

Sohan Lal, F.C.A. V. K. Chhabra (Partner) Company SecretaryM No. 017310

Place : GhaziabadDated : 05.09.2011

For the year

40


SCHEDULE TO THE BALANCE SHEET(In Rupees)

PARTICULARS 31.03.2011 31.03.2010

Schedule-1 : Share Capital

Authorised1,00,00,000 Equity Shares of 10 Each(Previous year 1,00,00,000 Equity Shares of Rs.10/- each) 100,000,000 100,000,000

Issued & Subscribed Capital30,37,100 Equity Shares of Rs.10/- each 30,371,000 30,371,000

Paid Up Capital29,71,700 Equity Shares of Rs.10/- each 29,717,000 29,717,000(Previous Year 29,71,700 Equity Shares)Less : Call Money Due (Due from Directors - Nil) – –Add : Forfeiture of Shares (Amount Originally Paid Up) 253,500 253,500

TOTAL 29,970,500 29,970,500

Schedule 2 : Reserve & Surplus Nature of Reserve Balance Additions/ Transfer Balance as Balance as

as on 01.04.2010 During the Year on 31.03.2011 on 31.03.2010

A. General Reserve 800,000 - 800,000 800,000 B. Profit & Loss Account 406,533,730 59,705,169 466,238,899 406,533,730 C. Share Premium Account 12,653,500 - 12,653,500 12,653,500

TOTAL 419,987,230 59,705,169 479,692,399 419,987,230

Schedule 3: Secured Loansa) From Bank of Maharashtra, New Delhi 540,284,039 328,394,254

(In Cash Credit Accounts against hypothecation of Stocks,Book Debts, Plant & Machinery, Stores, Spares & Personalguarantee of the Directors of the company)

b) From Indusind Bank 38,858,963 100,264,969 (First pari passu charge on current assets of the companyboth present and future and second charge on Plant &Machinery & other movable assets)

c) Loan from Bank of India, Noida 102,324,744 49,874,828 (First pari passu charge on current assets of the companyboth present and future and second charge on Plant &Machinery & other movable assets)

d) Loan from SIDBI 2,878,000 6,170,000 (Secured against hypothecation of Land Building,Plant & Machinery at Haridwar)

e) Vehicle / Equipment Loan from ICICI Bank, HDFC Bank &Reliance Capital against hypothecation of Vehicles & Equipments) 7,180,552 11,172,963

691,526,298 495,877,014

Schedule-4 Unsecured Loans a) Business Loan from Bank / Financial Institutions 21,590,736 1,725,726 b) From Share Holders & Directors 333,196 333,196 c) From Others 53,585,000 53,585,000

Total 75,508,932 55,643,922

As At As At

41

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42


Schedule - 6 InvestmentsQuoted (at cost) (Non Traded) (40,700 (Previous Year 40,700) Equity Shares of 936,100 936,100 Bank of Maharashtra, of Rs.10/- each)Apprx. Market Value of Shares as on 31/03/2011 is Rs. 24.30 Lacs(Previous Year Rs. 20.17 lacs)

Total 936,100 936,100

Schedule - 7 Current Assets, Loan & Advances

Current Assets

a) InventoriesStocks as per inventories taken, valued & Certifiedby Management (at cost) i) Raw Materials 91,355,984 87,884,950 ii) Semi Finished Goods 75,492,327 82,955,651 iii) Finished Goods 71,102,138 56,888,306

Total (a) 237,950,449 227,728,907

b) Sundry Debtors Unsecured, Considered Good i) Outstanding for more than six months old 229,463,222 128,982,135 ii) Other Debts 863,218,786 607,431,395

Total (b) 1,092,682,008 736,413,530

c) Cash & Bank Balancesi) Cash in Hand 2,019,179 1,680,923 ii) With Scheduled Banks:

Fixed Deposit with BOM & Indusind Bank New Delhi (against security/margin for LC, Guarantees & Hundis) 131,643,480 62,370,844 iii) Short Term Deposit with SBI, Ghaziabad & BOM N Delhi 119,000,000 130,000,000 iv) Interest Accrued but not due (on FDs) 14,561,543 10,187,639 v) In current Account with scheduled Banks 18,124,577 41,106,528

Total (c) 285,348,779 245,345,935

d) Loans & AdvancesAdvances to Suppliers 118,066,167 90,620,345 Advances to Staff 5,813,876 6,426,899 Security Deposit & Earnest Money 15,769,696 15,825,194 Deposit for Excise Duty 199,650 1,266,447 Deposit with Sales Tax Department – 988,206 Advance Income Tax, & TDS 35,514,794 11,778,432 Income Tax (against disputed cases) 20,488,723 20,409,608 Sundry Advances 1,664,524 399,628

Total (d) 197,517,430 147,714,759

e) Other Current Assets (Considered Goods)Other Current Assets 17,500,000 17,500,000 Prepaid Expenses 15,759,689 8,063,041

Total (e) 33,259,689 25,563,041

Total (a) to (e) 1,846,758,355 1,382,766,172

43

PARTICULARS As At As At 31.03.2011 31.03.2010


Schedule - 8 Current Liabilities & Provisions

a) Liabilities Sundry Creditors for Goods & Services 545,716,220 394,981,167 Sundry Creditors for Expenses 29,964,235 25,373,857 Retention Money 7,796,479 7,796,479 Other Liabilities 650,500 650,500

Total (a) 584,127,434 428,802,003

b) Provisions Provision for Taxation 22,150,000 Income Tax Payable 20,500,000 20,500,000

Total (b) 42,650,000 20,500,000

Total (a) & (b) 626,777,434 449,302,003


Schedule 9 : Increase (Decrease) in finished & Semi Finished StockIncrease/(Decrease) in Semi-Finished Goods

Opening Stock 82,955,651 51,013,907 Closing Stock 75,492,327 82,955,651

7,463,324 31,941,744

Increase/(Decrease) in Finished Goods Opening Stock 56,888,306 60,752,567 Closing stock 71,102,138 56,888,306

14,213,832 (3,864,261)

Increase/(Decrease) in Finished & Semi Goods Stock 6,750,508 28,077,483

Schedule 10 : Other IncomeInterest Received on FDR 5,093,646 6,155,869 Miscellaneous Income 6,896,454 165,469

Total 11,990,100 6,321,338

Schedule 11 : Raw Material ConsumedOpening Stock 87,884,950 88,923,809 Add:- Purchases 1,783,425,546 1,567,279,356

Total 1,871,310,496 1,656,203,165

Less:- Closing Stock 91,355,984 87,884,950

Raw Material Consumption 1,779,954,512 1,568,318,215

Schedule 12 : Manufacturing & Other ExpensesManufacturing Expenses 43,867,512 25,083,273 Freight & Cartage 19,912,304 16,577,973 Power & Fuel 18,376,172 13,682,619 Testing Charges 5,739,913 6,410,210 Machinery Repair & Maintenance 738,570 1,559,095 Factory Maintenance 842,296 1,184,646

Total 89,476,767 64,497,814

44



Schedule 13 : Personnel Expenses

Salaries, Wages & Bonus 28,978,464 30,685,985

Employer Contribution to P.F. & E.S.I. 619,650 527,679

Gratuity 62,555 358,298

Workman Compensation - -

Welfare Expenses 876,384 825,090

Total 30,537,053 32,397,052

Schedule 14 : Administrative & Selling Expenses

Auditor's Fees 307,674

(i) As Auditors 190,270 154,420

(ii) Tax Audit Fees 63,420 56,253

(iii) Other 53,984 56,266 266,939

Advertising Expenses 424,798 325,885

Building Repair 1,641,913 242,225

Conveyance Expenses 529,126 556,764

Consultancy Charges 809,663 727,700

Commission Charges 3,369,557 2,982,310

Donation & Subscription 160,556 112,594

Business Promotion Expenses 6,513,586 5,009,409

Insurance Expenses 407,055 449,389

Legal & Professional Charges 2,859,344 3,848,217

Miscellaneous Expenses 137,284 272,981

Preliminary Expenses written Off 43,865 43,865

Printing & Stationery 631,759 744,515

Postage, Telegram and Telephone 2,032,123 1,956,194

Rent, Rates & Taxes 7,256,289 6,579,230

Security Charges 3,281,796 3,099,749

Short & Excess 32,150

Travelling Expenses 5,930,869 7,061,181

Tender Fees 544,668 469,386

Vehicle Maintenance 2,592,212 2,766,225

Rebate & Discount 18,179,667 12,249,309

Total 57,685,954 49,764,067

Schedule 15: Director's Remuneration

Remuneration & Benefits Paid to

Managing Director 5,900,000 6,000,000

Other 211,000 337,533

Total 6,111,000 6,337,533

45



SCHEDULE 16 : Significant Accounting Policies and Notes on Accounts :

(i) Basis of Accounting

These Financial statements have been drawn up using the historical cost convention adopting the accrual basis.

(ii) Use of Estimates

The preparation of financial statement in accordance with the generally accepted accounting principals requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of financial statements and the reported amount of expenses of the year. Actual results could differ from these estimates. any revision to such accounting estimates is recognized in the accounting period in which such revision takes place.

(iii) Fixed Assets & Depreciation

(a) Fixed Assets are stated at their original cost less depreciation. Cost includes inward freight, duties, taxes and expenses incidental to acquisition and Installation.

(b) Depreciation on Fixed Assets is provided on W.D.V. method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

(c) Depreciation on additions to and disposals of Fixed Assets during the period has been provided on pro-rata basis according to the period such asset was used during the year.

(iv) Inventories

Inventories have been valued at lower of cost or market value except scrap, which is valued at realizable value.

(v) Sales

Sales comprises of sale of Goods and Services, net of trade discount and returns, if any. Revenue is recognized on dispatch of the product to the customers. Sales and Job Work receipts/credits are exclusive of excise duty and Sales Tax/VAT.

(vi) Taxation

(a) Provision for Income Tax has been made at the current tax rates based on assessable income or on the basis of Section 115 JB of Income Tax Act, 1961 (Minimum Alternate Tax) Which ever is higher.

(b) Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent years.

46


(vii) Excise Duty

The Company has been acknowledging liabilities for excise duty in respect of materials lying in factory/bounded premises, as and when these are cleared/ debonded.

(viii) Retirement Benefits

The company has not made Provisions in respect of liabilities towards leave encashment and Gratuity. It is accounted for as and when paid as it is not ascertainable for the time being.

Others

1 Contingent liabilities not provided for in respect of Bank Guarantee Rs. 8,373.87 lacs (Rs. 5999.63 lacs P.Y.), Letter of credit Rs. 3,792.51 lacs (Rs. 2448.25 lacs P.Y.).

2 Contingent Liability not provided for in respect of Disputed Income Tax, Excise, Service Tax, Vat and Bills Discounted during the year because in the absence of records, we are unable to determine the liability of the tax and the penalties.

3 Cenvat Credit on Excise Duty and VAT paid on goods is accounted for by reducing the purchase cost of related material.

(a) Managing /Wholetime Directors Salaries (including Contributions to Provident Fund & Commission)

2010-11 2009-10

(i) Managing Director’s Salary 5,900,000 6,000,000

(ii) Whole Time Director’s Salary – 136,533

(iii) Other Director’s Salary 211,000 201,000

TOTAL 6,111,000 6,337,533

(b) Computation of Net Profit under Section 349 of the Companies Act, 1956

2010-11 2009-10

Profit/(Loss) before exceptional items as 59,705,000 62,115,792 per Profit and Loss Account

Add : Provision for depreciation as per 9,375,324 11,157,756Profit and Loss Account

69,080,324 73,273,548

Less : Depreciation under Section 350 9,375,324 11,157,756 of the Companies Act, 1956

Profit as per Section 349 of the Companies 59,705,000 62,115,792 Act, 1956

Salary, Perquisites and Performancecommission payable to Managing / Wholetime Directors as per Section 198 and309 of the Companies Act, 1956 5,970,500 6,211,579

Restricted as per resolution passed / to bepassed by the shareholders 5,970,500 6,211,579

47


4 The closing stock is taken as valued and certified by the management of the Company.

5 (i) Balance in the personal accounts, Debtors, Loans and Advances, other Current Assets, Creditors, Unsecured Loans and other liabilities are subject to confirmation and reconciliation from the respective parties.

(ii) Reconciliation of Purchases and Sales are subject to verification and confirmation from the returns filed with Excise, VAT and other Departments.

(iii) Fixed deposits and Short Term Deposits with the Banks are subject to confirmation and Certificate from respective bank.

(iv) The company has not received any information from the "suppliers" regarding their status under the micro, small and medium enterprises development act, 2006 & hence disclosures, if any, relating to the amounts as at year end together with interest paid/payable as required under the said Act have not given.

(v) As per Section 205 A of the companies Act, 1956 Rs. 6.51 Lacs Pertaining to unclaimed dividend & unclaimed Share application money due and outstan

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