Dear Stake Holders, 2010 was a banner year for the company. Katlax turned in a strong performance in a challenging economic environment.All in all, we reported 41% growth in sales closing the year with an excellent rise in overall profitability, .

invested in our new state-of-the-art facility for interface products and revived our City Gas Distribution (CGD) project. I want to thank my people for their tremendous contributions. Our people continue to bring the deep, differentiated skills that set us apart in the marketplace.

I am happy that the maiden issue of Katlax newsletter was well received and it fetched an overwhelming response from individual customers, vendors, well-wishers, friends and alumni expressing great satisfaction for Katlax's all-round progress. Its my pleasure to have partly achieved my goal of reaching my stake holders in an endearing manner. This response gave me tremendous energy to continue with this activity and bring out the second issue which hopefully will meet your increasing aspirations.

2010 has been a very exciting year for Katlax as we took the first initiative to showcase our products in the international arena. We participated in Hannover 2011 along with 25 other Indian industries as part of the CBI (The Netherland Govt. Agency) sponsored ECP program. Our participation fetched us a good number of visitors, not only from the European Region but also from the US, Canada, Brazil, Mexico, Chile, Argentina, Africa, Turkey, Middle East and South East Asian countries including Japan and China. We'd also had a chance to meet many of Indian customers and senior officials of Indian MNCs as a part of the event. Taking Katlax's philosophy - Future sense forward, our upcoming range of future-ready products that have been crafted bearing in mind the environment degradation were also displayed, as environment friendliness is the most important thing for companies and technologies of the future. In this regard, we launched a number of cutting-edge products with primary focus on Wireless Technology for Green Earth eco-friendly movement from our 2 SBUs, viz. Interface Products Group (IPG) and Controllers & Instrumentation group (CIG). During the occasion, the demo of our wireless products was also witnessed by Mr. Heinz Arnold (Editor-in-Chief) of Weka Fachmedien and one of the leading Electronics trade magazine in Germany, Markt & Technik who are in the 33rd year of publishing, also published our interview in their publication. Mr.Fandrich Guenther, Sr. Consultant of CBI also seemed very much impressed with our initiatives for making low cost wireless products in automation.

This overwhelming response for our Interface Products impelled us to take up major expansion activities in this area. In that light, we are now creating a separate set-up which shall hopefully be operational by the third quarter of this financial year. This new facility will be with state-of-the-art automatic injection molding equipments catering to OEMs and private label business segments.

We also successfully completed our expansion of CIG facilities and eagerly look forward to capitalizing on this ongoing momentum with the recent introduction of our high end instrumentation products with ground-breaking embedded technologies. These new products would be manufactured in reasonably high volumes giving impetus to our growth which will add to top and bottom lines.

Our City Gas Distribution (CGD) project, which had been slow-moving till yet, is back in action now. Taking a step forward on this front, we are implementing CGD at Faridabad for Adani Energy Ltd. Further, with more than 230 cities going in for CGD, we see Katlax contributing to energy management for efficient, reliable and safe gas distribution in the near future. Not to forget, this is going to be a major source of project revenue and is next to Oil Tankers Tracking which has ample scope.

With SBUs getting stabilized as cost and profit centers, we also anticipate growth in core sectors through SPV concepts and I shall certainly share more about SPV and its impact on growth in my next issue. The past year presented Katlax with many challenges like spiraling cost of basic raw materials influenced by international metals and petroleum products' prices, cost of labor and inflationary trends pushing up borrowing interest rates. Global economies are also facing crisis of staggering proportions, putting pressure on Indian markets, being the second largest in the world. Competitions have reduced margins and there are uncertainties in capital markets making financial decisions bit difficult. This environment presents other business challenges as well.

But we have met these challenges in a manner consistent with our commitment and excellence. We moved quickly to respond to them and the actions we took have produced satisfying results. We have accelerated changes already under way to meet the opportunities and challenges we face given the demands of the market and of the environment in which we operate. As a result, Katlax is moving forward into 2011 well positioned to achieve the future long-term growth to which we are committed and which you, our stakeholders, expect.

I take this opportunity to wish all a successful financial year 2011-12 and beyond.

Warm Regards,

L.R. Katrat
Managing Director – CEO
lrk@katlax.com