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OPTO LIMITED

SENSING TECHNOLOGY

14th Annual Report 2005-2006Global Reports LLC

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Opto Circuits (India) LimitedSENSING TECHNOLOGY

BOARD OF DIRECTORS

AUDITORS

COMPANY SECRETARY

BANKERS

REGISTERED OFFICE

• Vinod Ramnani

• Usha Ramnani

• Jayesh C. Patel

• Thomas Dietiker

• Suleman Adam Merchant

• Y Balasubramaniam

• Dr. Anvay Mulay

• Rajkumar Raisinghani

• Anand Shenoy & Co.

Chartered Accountants

S-2, II Floor, Gem Plaza,

No. 66, Infantry Road,

Bangalore - 560 001

• Mrs. Rose Chintamani

• State Bank of India

• State Bank of Travancore

No. 83, Electronics City,

Hosur Road, Bangalore - 561 229.

Chairman & Managing Directot

Executive Director

Director

Director

Director

Director

Director

Director

Annual General Meeting

Day & Date : Thursday, 28" September 2006.

Time 11:00 am.

Venue The Grand AshokKumara Krupa High GroundsBangalore-560001.

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Annual Report 2006

SHOWCASEKey Milestones

The Year 2005 has seen a quantum leap in the history of Opto

Circuits. The Company has diversified from non invasive segment to

invasive segment of the healthcare domain.

Opto Circuits (I) Ltd has grown both organically & inorganically. The

Company has proved its ability in aggressive take over and

integration of these businesses. Keeping the organic growth intact,

Opto Circuits has progressed & acquired Eurocor, a German

company specializing in the design & manufacturing of high

technology cardio vascular devices for successful treatment of

coronary & vascular diseases.

A 100% subsidiary,Mediaid, was set upin US

Mediaid received theCE approval forEuropean market

Mediaid receivedFDA approvalfor SpO, sensorrange

Acquired 100%stake in Akron

3 new product lineslaunched

Acquired 100% stakein Eurocor GmbHGermany

Acquired the patientmonitoring line ofproducts from PalcoLabsAcquired the digitalthermometer divisionfrom HLL

Acquired amajority stakein AMDL

2002 2003 2004 2005

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SENSING TECHNOLOGY

Opto Circuits (111

Showcase - Key Milstones 3

Window to Opto Circuits 4-12

Driving Growth the Inorganic Route 13-18

Expanding Geographies 19-30

Financial Review 26-30

Statutory Reports 31 -47

Opto Financial Statement 48-62

Subsidiaries Financial Statement 63-86

Consolidated Financial Statement 87-100

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A Window toOpto Circuits

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nW Opto Circuits (India) LimiteSENSING TECHNOLOGY

BRAINS TRUSTMeet the Management

EXECUTIVE DIRECTORS

VINODRAMNANI

A Mechanical Engineer by profession, Vinod is the driving forcebehind Opto Circuits. Having worked with Organizations in Indiaand abroad, he had a wealth of experience o back him, when, in1990, he along with Thomas Dietikar (the American co-promoter ofOpto Circuits) and others decided to establish M/s Elekon IndustriesPte Ltd., in Singapore. Thereafter, Vinod initiated a move to shift themanufacturing facilities to the Silicon Valley of India (Bangalore) andOpto Circuits was formed in 1992 with Vinod as the ManagingDirector. His passion to see Opto Circuits scale new heights isreflected in the hands on management style in which he manages thecompany.

THOMAS DIETIKER

The Swiss born Thomas Dietikar, who is an American Citizen is a co-promoter of Opto Circuits established in 1992. An ElectronicsEngineer, Thomas (Tom) brings to the table, extensive experience inbusiness Development, Products and a wide range of relatedelectronic assemblies. Since the inception of Opto Circuits, Tom hasexecuted a business strategy of targeted marketing and sole sourceproduct development. The market share for the company has steadilyincreased to a point where, the company enjoys a prominent positionin medical sensors, X-ray detecrors and various other key applicationsof Optoelectronic products.

JAYESH PATEL

An Electronic Engineer by profession, Jayesh brings with him almosta decade and a half of engineering and R & D expertise to thecompany's product line. He has been instrumental in the productdesign and conception of a multitude of Opto-electronic products forthe company.

USHARAMNANI

A post-graduate in Commerce, Usha has two decades of experience inthe field of administration. Having been with the company since itsinception, she oversees its Administration and Personnel Functions.

INDEPENDENT DIRECTORS

SULEMAN MERCHANT

A prominent radiologist, Dr. Suleman Merchant is the Chairman ofthe Department of Radiology at Sion Hospital in Mumbai. A wellknown member of the national and international medical fraternity,Dr. Merchant brings to the table his vast experience and medicalexpertise.

NEW INDEPENDENT DIRECTORS

V BALASUBRAMANIAM

With over two and a half decades of global experience,Balasubramaniam is the founder-promoter of a software company.An MBA from Symbiosis Institute of Business Management, Pune,he is also a member of CPA & FCMA. The company benefits from hisoperational & resource management skills.

DR. ANVAYMULAY

A cardiovascular thoracic surgeon (McH), Dr. Mulay has over adecade of medical experience and has also worked in the US & UK,before settling in India. Dr. Mulay brings to the table his vastexperience and medical expertise.

RAJKUMAR RAISINGHANI

An industrialist with an electrical engineering background,Rajkumar has over two and a half decades of experience. His vastmanufacturing experience stands the company in good stead.

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VISION &STRATEGY MUSINGS

-CMD

"Our performance for FY05-06 iswe l l r e f l e c t e d in our s t r o n gnumbers, and it pleases me to notethat we were able to achieve ourinternal targets. The key highlightsduring the year were the receipt of anew d i s t r i b u t i o n and p r i c i n ga g r e e m e n t f r o m a Del e n c ePersonnel Support Centre based inPhiladelphia and the acquisition ofLurocor. "

Eurocor has been the biggestacquisition in the history of Opto.

The acquis i t ion provides us portfolio diversif icat ion as Opto was onlypresent in the mm invasive segment. The global market lor stems isworth USScSbn of which 50% is outside of the LISA. We are targetingthis market tor growth. We have received CE approval for ourproducts which allows us to sell our products anywhere in the worldexcept the US & Japan. We are confident of captur ing 3-5'^' of th i smurker over the next two years through quality product offer ings andaggressive market ing .

"The agreement wi th defence USA enables us to distribute the FDAapproved SpO, Sensors and Patient Momtoting Devices at specific

prices through the Medical Prime Vendor Programme. I am proudthat Opto has become the f i r s t company from Ind ia to achieve thisd is t inc t ion . "

"Opto has been acquir ing companies only when the managementfeels that it is paying the right price for i t . We have always looked atcreating value tor shareholders through acquisitions. So if anoppor tuni ty arises ami if we believe that the acquisition would be astrategic f i t for the company in the longer run at attractive valuations,we would go fo rward and acquire the company. '

would also increase our focus on R&D ini t ia t ives to roll out new-products which would help us remain competitive."

"We have already started selling stems in markets where we haveregistered our products. Our CE approval enables us to sell productsin 36 countries and we have registered our products in 29 countr ies sofar. By Dec 2006, we will have registrations in all the countries. Ibelieve our products are equivalent if not superior in qual i ty to ourcompetitors who enjoy decades of experience in this market , Lurocorhas a strong distribution network in 36 countries and we plan toleverage on that advantage. We shall also bank upon our low costadvantage by shif t ing low end manufac tu r ing of stents to Ind ia .

"We require our products to be LISFDA approved for selling them inthe US market. We have already starred taking the necessary steps torobtaining the USFDA approval. But it is a rigorous process spanningover 18-24 months."

"Domestic market is a very important growth dr iver for Opto. Ourdomestic market product sales are driven through AdvancedMicronic Devices Limited (AMDL), a listed Ind ian company, in whichwe acquired a majority stake in 2001. AMDL has a 250 membermarketing and sales team spanning across the country. We leveragetheir extensive network and two decades of experience to drive sales."

"Our group turnover for FY05-06 i tself was around Rs. 1-15.- i5 crore.This year we wi l l have the ( t i l l effect of Lurocor's operations in ourfinancials. Our game plan is to s imultaneously drive growth throughorganic and inorganic means. F.ven w i thou t f a c t o r i n g incontributions from potential acquisitions, we are targeting a 10-50per cent growth rate. Given our past growth track record and wherewe are placed now, we at Opto are confident of achieving a prestigiousand challenging target of Rs500crore group turnover by 2008."

Vinod R a m n a n i

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opt t s ( lira 1 a ) LI mi t e dSENSING TECHNOLOGY

BUSINESS MODELDriving Growth through Niche Products

Opto has been very successful in introducing new

products along with synergizing multiple

acquisitions over the years. The company has

moved from its traditional non invasive products

to invasive products which is a big achievement in

terms of business strategy.

The acquisition of Eurocor leads to product

diversification for Opto. Prior to the acquisition,

Opto was only present in the non invasive

market. This development enables Opto to enter

the invasive segment and enhance its product

portfolio. On the other hand Opto can utilize

Eurocor s distribution network which is in 36

countries to further its products in Germany,

Poland & other parts of Europe.

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Annual Report 2006


Existing Business

NEW PRODUCTS

^ •KHI ^ ^ I

Model 30 Series

This is a new age hand-held Pulse

Oximeter. It has a compact, sleek

looking design with features like

bar graph, bright LED display,

patient data storage, USB &

infrared ports. It is an Oximeter

which can be used with a wide array

of reusable & disposable sensors.

Model 150 (Access thermal bill

printer)

Model 150 can either be used with

Integral finger sensor or with cable

adapter module . I t f ea tu res

simultaneous display of Oxygen

saturation & pulse rate. Model 150

can be used for sleep screening

studies & it also comes with a

memory to retain the data. This

stored data can be printed directly on

a printer using infrared port.

SpO2 Sensors

I^L " These consist of Oxy

^•jjjltt/ sensors (Emitter and

*f Detector assemblies)c o u p l e d w i t h

s p e c i a l i z e d c a b l e

a s s e m b l e s o r

customized interface

> circuitry to link to

/-i o v e r a l l p a t i e n t

monitoring system for

c h e c k i n g t h e

percentage of Saturated Oxygen in the blood. It also checks the

Pulse rate. SpO2 Sensors can meet all the specifications and

Requirements of customers. Opto Circuits has the capability to make

the Emitters and Detectors of both Lead frames as well as ceramic

versions, required for the SpO, Sensors and can handle and assemble

various kinds of tapes and housings for making them. All Sensors are

tested comprehensively (100%) for its functionality. Depending on

the customer requirement, each Sensor is identified for traceability

and packed.

Multiparameter Monitors

Industry Segment: Product Application

Health Care - Oximeter Probes (SpO2)

- Multiparameter Monitors-Desk Top Pulse Oximeter

- Patient Monitoring Systems (Pulse Oximeter)

- Cholesterol Monitors

- IV Fluid Warmers

- Digital Thermometers

Opto's Product Range

The term opto-electronics implies the combination of optical and

electronics phenomena in a single device. The company's coverage of

optoelectronics component products largely reflects that definition.

These are used in operation theatres & intensive care units. These

systems are used for monitoring the patient's vital signs such as ECG,

blood pressure, temperature & oxygen level saturations.

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Opto Circuits (India) LimitedSENSING TECHNOLOI


Desktop Pulse Oximeter

This range consists of desk top pulse oximetcrs, which are used inoperation theatres as well as intensive care units. These have nowbeen enhanced with added features like connectivity to the computer,nurse call back facility & features like battery back up, which puts it inthe league of International brands.

Pulse Oximeters

It uses non invasive method of monitoring the percentage ofHemoglobin saturated with oxygen. The Pulse Oximeter consists ofa sensor attached to the patients finger/Ear lobe, which is linked to acomputerized unit. It also gives a signal for each pulse beat and heart

rate.

Mini Pulse Oximeter:

This is a small oximeter used at hospitals, atclinics, for sleep screening and for homehealth care. This can be used with either theintegral finger sensor or with a cableadaptor module as well as with a variety ofadult & pediatric sensors.

Cholesterol Monitors

./

Cholesterol Monitor is aportable bat tery-operatedinstrument. It is an invasivemethod of measuring the totalcholesterol in the blood. A dropof blood when placed on achemical strip changes thecolour of the strip from white togray. The unit also undertakes

health risk analysis based on the cholesterol value. This monitor canindicate heart attack and cardiac arrest risk for various biologicalages. It is US-FDA approved.

Fluid warmerIt is used during surgeries and bloodt r a n s f u s i o n s , as i t helps inmaintaining the temperature ofblood at 37 degree Celsius (humanbody temperature) for smooth flowof blood. It is particularly necessary

in cold areas, where the blood becomes thicker resulting in thermalshocks that can often prove fatal for patients. This product has beenextensively used by the US army in Iraq.

Digital Thermometer

Unlike the conventional mercury based thermometers, this productcomes with a microprocessor chip and a thermistor for enabling quickand accurate measurement of body temperature. The sales of Opto'sdigital thermometers displayed a sharp uptrend during the SARScrisis.

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An mi arweport 2006


Access Thermal Bill Printer

ACCESS is a multi-font graphics

thermal printer, which lays claim to

be the world's fastest bill printer inthat segment. With a printing speed

of 18 lines per second (LPS), ACCESS

is compact and styled to fetch a very

high level of integration and a robust

•>«,./* performance. ACCESS is specifically

developed to print patient data

quickly through monitors, enabling doctors to take quick decisions.

These printers will also find industrial and commercial applications.

Multi parameter Monitor Model 720/960 P

Model 900

It is a Pulse Oximeter with Waveform (Model 900). It is an upgrade

to display graphical and tabular trends in oxygen saturation and

heartbeats. Model 900 is also equipped with reusable and disposable

sensors that can be administered on adult, pediatric & neonatepatients.

Infrared Emitters:

Infrared emitters are discrete components that emit infrared

(invisible) light. They arc basic building blocks in optoelectronic

applications. The company's emitters consist of light emitting diode

(LF.D) chips with lead frames and gold wiring that are mounted on

printed circuit boards (PCBs) or ceramic carriers or in plastic

packages.

The Multi Parameter Monitor (Model 720), now has enhanced

features 960 P is part of Opto's pioneering healthcare portfolio

that comprises other leading technologies like Fluid Warmers, SPO2

Probes and Pulse Oximeters. Model 720, a new-gen variation of the

existing monitors in OCI's portfolio, is a display of vital parameters

such as Blood Pressure, SP02, Heart Rate and Temperature. This 24-

hour recording system has an in-built printing facility and a feature

that alerts the nurse-station during an emergency. Designed to

deliver data in five different languages and manufactured at OCI's

facility which meets international standards, Model 720, an IP of

OCI, is a global success in critical healthcare monitoring.

Infra Red Detectors:

Infrared Detectots are discrete components that detect or receive

infrared light. They too are building blocks in optoelectronic

applications. They consist of light sensors such as photodiodes and

phototransistors, which are semiconductor chips capable of

converting light into electrical signals. The company's sensors are

attached to lead frames and are mounted on PCBs or ceramic carriers

or in plastic packages.

Photo Sensor, Detector and Emitter Assemblies:

These products also involve multiple components and combinations

of detector and emitters. Opto's sensor assembles are used to sense

motion, objects speed and distance.

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SENSING TECHNOLOGY

Opto Circuits (India) Limited

SENSING TECHNOLOGY

ADVANCED MICRONIC DEVICES LTD.

MEDIAID

EuroCORInterventional

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2006

Driving Growththe

Inorganic Route



1

SENSING TECHNOLOGY

INORGANIC GROWTHA Growth Driver

Majority stake in Advanced Micronics Devices Limited

Advanced Micronics Devices Limited (AMDL) was Opto'sacquisition in 2001. AMDL is a listed company engaged inmanufacturing and marketing of critical cardiac-care and otherhealth-care equipments. The company has its state-of-the-artmanufacturing facility at Electronic City, Bangalore, India. It has afull-fledged R&D set-up with a product design division. It hasmarketing offices at all the important metros in India. With about60% stake in AMDL, Opto can leverage the company's well settled &widespread distribution/ service network. Currently, AMDLdistributes Mediad Inc's products in India to various hospitals. It alsodistributes products fot big playets like Medtronics, J&J and BostonScientific in the domestic matket. Over the next few years, AMDLwill emerge as a major force in the domestic market for all OCIproducts including Eutocot.

Digital Thermometer division from HLL

Opto acquired'the digital thermometet division of HLL at Chennai in2002 for Rs50mn. Unlike the conventional mercury basedthermometers, this product comes with a microprocessor chip and athermistet for enabling quick and accurate measurement of bodytemperature. The conventional mercury based thermometers (MT)are banned in the US mainly because the exposure to mercury maycause a variety of health effects in people. The total market size in theUS alone is ovet 25mn per annum. In India, the market for DT is yetto develop due to the huge cost difference. At the time of acquisitionof this division from HLL, the division was reporting losses. Howeverjust after the acquisition, SARS broke out across the South East Asianregion and the company was able to supply digital thermometers tothe respective governments of the disease struck countries. This led totremendous volume growth in the product which enabled a speedyturnaround.

Patient monitoring division of Palco Labs, USA

Opto acquired the patient monitoring division of Palco labs, USA in2003 and renamed the same as Mediaid Inc., a separate entity.Mediaid is the 100% subsidiary of our Company and we use Mediaid'sstrong distribution network spread across the US, Latin America andEurope to market its brands. Earlier, the patent for SpO2 sensor was

with US-based Tyco-Ncllcor for around 1 3 years. After the patentexpired in November 2003, a huge market has opened up for sensors.Opto with a low cost manufacturing base and standard qualityproducts is well positioned to take advantage of the outsourcingopportunities. With Opto's subsidiary, Mediaid Inc., securing CEapproval in 2003 and US FDA approval for Spo2 sensors in 2004,Opto is geared up to compete in the market. Further, there seems tobe a huge market for Opto's products in the US and Europe which wepropose to capitalize by establishing branches through our subsidiaryMediaid Inc. Opto would like to add more OEMs to our existingclients to improve our market share.

MediAid Inc, USA enjoys strong distribution netwotk spread acrossthe US, Latin America and Europe. Some of the recent successes forthe company were tie ups & distributor-ship arrangements with somecompanies for the Canadian and Japanese markets. During rhe yearunder review, Mediaid received a new distribution and pricingagreement (DAPA) from a Defence Personnel Support Centre basedin Philadelphia. With this agreement, the company would able todistribute the FDA approved SpO, Sensors and Patient Monitoring

Devices at specific prices rhrough the Medical Prime VendorProgramme (MPVP). Opto's strategy would be to focus on themarketing efforrs of OEMs and complex producrs and systems.

Altron Industries (P) Ltd

Opto acquired a 100% stake in Altron Industries (P) Ltd in 2004.Altron is an ISO 9001 certified company engaged in ElectronicManufacturing services (EMS), having its state of the artmanufacturing facility at Electronic City, Bangalore. The unit iscapable of mass manufacturing electronic products and assemblies toworld standard requiremenrs.

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Ann |f ii

EUROCOR GmbHThe Jewel in the Crown

Opto acquired Eurocor GMbH in Germany, a company specializingin the manufacturing of cardiac stcnts of various types for aconsideration of 1 Imn Euros (Rs.600 million). Besides receiving newdistribution and pricing agreements from defence USA, this has beena major development at Opto.

Company Background

Eurocor GmbH (Eurocor) is a new European Life Sciences Technologycorporation specializing in the research, development andmanufacture of interventional cardiology products. They are into thebusiness of coronary stent technologies and special cardiovasculardevices. The founder is Dr. Michael Orlowski, who is the director &CEO. Headquartered at Bonn, Germany, with subsidiaries in France& Poland, Eurocor has a worldwide distribution network in 36countries. Eurocor specializes in cardiological & peripheral stentingtechnology with products like Genius, Magic, Taxcor, and Minimax.Besides, it also has coronary dilatation catheters in its portfolio as wellas Peripheral stenting catheters.

Eurocor has launched drug eluting stents (DES) which gives saferlong term patient results. Eurocor intends to implement a project fordrug coating not only to fight restenosis, but also to provide a naturalhealing solution for it, after coronary stenting through the release oftwo different drugs to the coronary artery wall.

Management board

Name

Dr. Michael Orlowski

Barbara Fricke

Katja Busch

Raymond Tarn

R. Jaganathan

Dr. Samandi

Elvira Pasch

Karin Wollsiefen

Designation

Chief Executive Officer

Interr itional Order Processing

International Marketing

Business Director, Asia Pacific

Finance and Administration

Microbiology & Biomcdical Engineering

Logistics

Management Assistant

Clinical Advisory board

Name

Prof. Dr. Thomas Ischinger

Prof. Dr. Nicolaus Reifart

Dr. Antonio Colombo

Dr. Martin Rothrnan

Dr. Jan Kovac

Prof. Gerhard Bauriedel

Designation

Hospital Bogenhausen,Mumc/Germany

Hospital Bad-Soden, Germany

Columbus Hospital, Milan/Italy

London Chest Hospital

Univ. Leicester HospitalGreat Britain

University Hospital of Bonn/Germany

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SENSING TECHNOLOGY

PRODUCTPROFILE

I Icart surgery has been revolutionized in the past ten years with thedevelopment of minimally invasive procedures. In order to keep thecoronary artery open, a new device was developed and clinicallyapproved in the early 90s, the coronary stent. It is a small metal tube,which is deployed inside the coronary artery lesion by means of acoronary stent del ivery system in order to kfep the diameter of thestented vessel open.

The company makes the following varieties of stents in Germany,

laxcor - Paclitaxel - liluting Coronary Stent System

'jf'

Taxcor provides a pure biological DT.C carbonized coronary stentsurface. The drug pachtaxel is incorporated in an exclusive, organicbiodegradable Hyper biopolymer stent coating. The patient directeddrug eluting technology ensures controlled PACLITAXEL release-Kinetics. There is no potential of long term side effects for the patient.Taxcor eliminates any polymer-induced, late adverse effect potential.

It eliminates the risk of subacute thrombosis by blood clot formation,ful ly elutes the entire drug dosage in 20 days. Taxcor's carbon coating

protects the patient against sensi t iv i ty reactions. Taxcor does norrequire long-term Antiplatelet Therapy. It is fu l ly DLC- Diamondlike carbon coated

Genius Megaflex

Bioflexible coronary s tent systemhas a low restenosis option wi thHigh Cl in ica l safety and ef f icacyal ternat ive to DliS.The bio f l ex ib l eMegaflex complies wi th vesselmotion, s i g n i f i c a n t l y reducingvascular t r auma. I t provides a veryhigh radial force to the artery wal land ensures a maximized in t ra-stent l u m i n a l g a i n .

Genius Magic

Super thin cobalt chromium coronary stent system biology based"MEGAFLEXIBILITY" coronary stent biomechanics reducesrestenosis, significantly. Genius MAGIC fol lows nature by superiorpulse synchronicity with every heart beat.

Racli max-Peripheral Stent ing

This is a state of the art self-expanding peripheral StentingTcchnology.Raclimax is manufac tu red from a solid n i t i n o l tubewithout any welding points. Radimax is a top c l in ica l performancestenting product providing un ique vessel support without risk ofvessel reaction.

Hoit theEiirocorncqHhtion benefits OPTO

Operational

The acquisition of Eurocor leads to product divers i f icat ion for Opto.Prior to the acquisition, Opto was only present in the non invasivemarket. This development enables Opto to enter the invasive-segment and enhance its product portfolio. On the other hand Opto



Annual

PRODUCTPROFILE

can utilize Eurocor's distribution network which is in 36 countries toenhance its reach to distribute its products.

Financial

Opto has designed a unique method of payment for the acquisition ofEurocor which is based upon certain milestones achieved by Eurocor.Opto paid 4.18mn Euros upfront for the acquisition and further0.5mn Euros paid in two installments of ().25mn Euros on March 3 1,2006 & another 0.25mn Euros payment on June 30, 2006.Subsequently, if Eurocor achieves a turnover of lOmn Euros byFebruary 2007 Opto will pay 60% of the turnover in excess of lOmnEuros. The amount so payable wil l be restricted to 3mn Euros.Thereafter, should the company achieve a turnover in excess of 20mnEuros for a 12-month period ended February 2008, Opto would bepaying 60% of the turnover that is above 2()mn Euros. The amount sopayable will be restricted to 3mn Euros. The maximum payment,which would have to be made, is 1 1 mn Euros. Both, Opto andEurocor are confident of achieving the milestones as indicated above.

Opportunity and Strategy

The global market size for stents is estimated to be USSSbn of whichUSA comprises of USSlbn, Europe US$3bn and rest of the worldcomprising of LISS1 bn. The stent market is growing ar !• !%• pa. Optohas recently received CE approval for 2 stents, Taxcor - 1 and Taxcor-f I, which presents an opportunity to penetrate the non US & Japanesemarkets using our distr ibution setup and low cost manufacturingadvantage. These markets comprise 36 countries and the companyalready have product registrations in 29 of those countries. Opto hassigned contracts with 32 distributors in 32 different countries whowould be selling its products. Opto would also be using media likeinternet, television, magazines and cardiological seminars to promoteits products.

The domestic market for stents is also very big with over 60,000stents sold in 2005 which is likely to go up to over 80,000 in 2006.Eurocor already has a distribution set up in India and the company isconfident of penetrating the markets further. Opto aims to achieve a5-7% market share for its domestic operations.

In order to remain competitive, the company would constantly investin R&D which would help it discover second generation and thirdgeneration stents.

Although Opto is a new entrant and faces competition fromestablished players like Johnson & Johnson, Medtronics and BostonScientific, it is confident of achieving a minimum 3-5%' market sharein Europe and rest of the world. Opto and Eurocor are also taking theright steps to obtain FDA approval for its stents.

Achievements of Eurocor after the acquisition

Eurocor received CE mark approval for four of their products:

Amadeus Supercross- which is a coronary dilatation catheter,E-wire a guide wire for intraventional use & an importantbreakthrough product 'Taxcor T which is first of its kind polymer freePaclitaxel drug eluting stent. The CE mark has opened newermarkets like Hong Kong, Pakistan, India, Taiwan, China, all of

Europe, Middle East, Far East, South America & Africa & Taxcor II-which is a biopolymer drug eluting stent.

A major achievement from the OCI- Eurocor union is the distributionagreement has signed with the German/Swiss medical device salesorganization "Eumedica AG". Fumedica AG has taken overallmarketing and distribution rights of Eurocor s entire range ofcoronary stent systems and balloon dilatation catheters, for theGerman and Swiss market. This was the first major agreement signedby Eurocor, after it was acquired by OCIL in January 2006.

Another important landmark deal was the signing of a distr ibutionagreement with a large distributor in Brazil to cover Latin Americanmarkets for marketing its blockbuster drug eluting stent 'TAXCOR'.The company has also bagged an additional order from Egypt.

In May'()6 OCI participated in the Paris Course of Revascularization(PCR) in France. This helped the company in fur ther accessing newermarkets like F.gypt & Latin America.

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. •"$£?«*,«;•

Annual Report 2P

Tete'a-Tete1

with Dr. Michael Orlowski

In a f rank ami tree-wheeling interview, Dr. Michael Orlowski, CEO,

Eurocor GmbH, highlights how EuroCor would benefit from Opto s

global presence and better managerial skills.

Qs. What was the primary reason behind selling Eurocor to

Opto Circuits?

Ans : To be honest, I needed money for R&D and for working capital

and did approach many banks in Germany during 200-1-05. At

that t ime, the German economy was slowing down and I

received a poor response from the banks. The bankers asked me

to approach them again after a year's time but without any

commitment. Around that time, Opto Circuits approached me

and af ter detailed discussions, Eurocor and Opto Circuits

decided to move ahead together.

Qs. How will Eurocor benef i t from the integration with Opto

(.1 re LI 11 s ?

Ans : Opto Circuits wil l bring in tighter cost control for Eurocor. We

plan to do some back-end operations in India which will help

save money. Opto has a strong marketing and distribution

network across the globe which we can leverage to penetrate

new geographies. Eurocor has no presence in USA. When we get

the USFDA approval for scents, we would look to bank upon

Opto's presence in the market. More importantly, Opto also

brings in superior managerial skills in terms of f inance.

Qs. What would be the success drivers for Eurocor as receipt of

CE approval is behind us?

Ans : CE approval was a very big thing for Eurocor. I can proudly say

that our efforts over the past few years are starting to bear fruit .

We have started marketing our products in 29 of the 36

countries where we have obtained registrations. We have also

appointed a very strong distribution team. I believe our

products are superior to those of our competitors and they

should receive an overwhelming response. We are organizing

various awareness programs for cardiologists, who in turn could

recommend our products. We had one very successful campaign

in Paris and are going to organize a similar event in Mumbai over

the next few months. Our success drivers would be our products

and our ability to market them efficiently.

Qs. Will technology obsolescence- be a big threat for Eurocor?

Ans : We have already received a patent for our Taxcor DES product

which is far superior to that of our competitors. The patent is for

20 years, due to expire in 2023. We are constantly investing in

R&D which will help us in innovating new products.

18

Global Reports LLC


ExpandingGeographies



SENSING TECHNOLOGY

BUSINESSSTRATEGIST

"R&D is a very integral part of the opto electronic industry. Webelieve investment in R&D would enable us to roll out newerproducts in the market. Last year, we launched three products andthey received a favorable response from customers. This year too, weare looking at launching three to four products with an addressablemarket of USS0.5-lbn."

"Eurocor is a very significant acquisition for the company. We are inthe process of integrating the operations of the two companies. Optowould be doing some back-end operations for Eurocor s products inI n d i a which will help save cost and make our products competitive.Our products have already received tremendous response in themarkets where we have set up a base. We arc well on track to achievethe targeted sales for the year."

"We are current ly going through a consolidation phase with theprime focus being on ident i fying and driving synergies between Opto& Eurocor. The entire industry is going through a consolidation phaseand opportunities are bound to arise."

"If we believe the targeted company is a good strategic tit lor us andthe valuations ate attractive we may go ahead with the acquisition. Asregards the area of operation of the targered company, we would lookat a company with a thrust on R&D."

"We have also earmarked R s . l 9 l m n from the follow on issueproceeds to set up a R&D center. Our proposal of sett ing up jointR&D operations with leading optoelectronic companies has alsogenerated a positive response. We are conf iden t tha t our investmentsin R&D would be a major driver for growth over the longer term.

"Although the major i ty of our revenues comes from the in ternat ionalmarkets, I believe domestic market would also be a s ign i f i can tcontributor over the next two years. In Ind ia , people have becomemore health conscious and are increasing thei r spending onhealthcare. The domestic market is on the point of inflexion. Ourproducts in the domestic market arc marketed by out subsidiaryAdvanced Micronics Devices Limited (AMDL). With growth pickingup, AMDL will have a critical role to play."

J a y e s h Patc l



2006

OUR OFFICES

Opto is a 100% EOU. Majority of our production is currentlyexported. Our vision is to be a global company with a strong reach & ageographical spread which spans the globe.

Opto started its operations in the USA through its wholly ownedsubsidiary, Mediaid Inc. since 2002. Mediaicl has an establisheddistribution network across US, Latin Ametica and Europe. Withover 170 distributors Mediaid Inc. helps in distributing Opto'sproducts. . ' . . - •

Furthering its reach Opto opened offices in Singapore, Malaysia & FarEast with the help of its subsidiary Mediaid Inc. also present inSingapore. Apart from this, Mediaid Inc. also has branches inGermany & Dubai. Through these offices Mediaid Inc. has formed anetwork of distributors in each place. Thus making the presence ofOpto & its products felt in this part of the globe.

Opto acquired Eurocor in 2005. Eurocor currently sells its productsin ovet 36 countties around the world. Eurocor's manufacturing andR&D facilities are based out of Bonn, and it has markering offices inFrance and Poland. This distribution network has spread Opto's reachin Europe & neighboring counrries.

Opto will continue to increase irs geographical spread & will alsofocus on inorganic growth plans, wherein it can acquite companies inthe healthcare domain, which share the same values & vision of Opto.

OPTO's Global Offices:

USAMediaid Inc.17517 Fabrica Way, Suite HCerritos, CA 90703 USAP 714.367.2848F [email protected]

Latin America:Mediaid IncP 714.367.2848F [email protected]

Regional Offices:

Europe:

Mediaid Gmbh41515 Grevenbroich, Germany

P 011.49.21.81.2129918F 011.49.21.81.2129287

[email protected]

Russia:Helena Tereshina (Russia)

[email protected]

Middle East :Vivek MalhotraP.O. Box 18122LB02-115, Jebel Ali Free Zone,Dubai - U.A.E.Telefax: +971.4.8818514Mobile: [email protected]



^ffffTDFaTReport 2006

OUR OFFICES

International Sales Support:

Cindy Rico714.367.2848x223customerservice 1 @ mediaidinc .com

Eurocor Worldwide Network

HeadquartersEurocor GmbH

Rheinwerkallee 2D-53227 Bonn

GermanyPhone: +49 - 228 / 20 150 - 0Fax: +49 - 228 /20 150-5

email: [email protected]

Office in Poland

Eurocor PolskaUl. Instalatorow 90 2 - 2 3 7 WarszawaPolandPhone: +48 - 2 2 / 8 462 051 283Fax: +48 - 2 2 / 8 6 8 3 173email: [email protected]

Eurocor International Distribution

GermanyFrance

EnglandItalySpain

PortugalAustria

SwitzerlandPoland

Czech RepublicSlovakiaBrazil

ArgentinaIndia

China/HongkongSouth Korea

JapanIran

IsraelEgypt

TurkeyHollandBelgium

Saudi-Arabia

22

Global Reports LLC


SENSING TECHNOLOGY

GLOBALSTRATEGIST

" Our products like the SpO2 sensors and Pulse Oximeters find major

demand in the USA & European markets. In addition USA & Europe,Asia Pacific: is also a big market for us."

We are extremely confident of sustaining our growth rate. We arefocused on niche segments of opto-electronics. Technology and chipdesign is a definite entry barrier in this business and we also have theadvantage of a low cost base which our competitors in the West do nothave."

" We have a strong marketing team at Mediaid. We are the preferredvendors for esteemed OEM's. In addition, our constant investmentsin R&D enable us to launch new products in the markets. In FY06,we launched 3-4 new products which received good response and Iam confident that we would launch a similar number this fiscal aswell."

"Competition is present in every business and opto-electronics is noexception. However certain specialized skill sets in terms oftechnology and chip design are needed in this business and thegestation period is long. Getting USFDA approval has been a very bigadvantage for Opto. Even if someone wants to enter the industrytoday with all technological skills, it will take a min imum of two yearsbefote the regulatory approvals are obtained and they can supply inthe US markets. Furthermore, it is tough to gain acceptance forproducts as applications are critical in nature.

"We have a strong order book in place for the core business. We wouldbe looking at expanding our presence in newer geographies. Webelieve the Middle East market looks very attractive and have set upoffices there."

We are looking at setting up marketing offices in various othercountries where we believe our products can generate good demand. Ibelieve the results from the new start up offices would be visiblestarting next year. Our strategy is to penetrate newer geographies forgrowth."

Thomas Die t iker



Opto CircuitSENSING TECHNOLOGY

Transcendingthe Number Barrier

FINANCIALINTERFACE

"Eurocor is the biggest acquisition fot Opto. Stents market worthUS$1 Obn is a big market growing at 15% annually. After theacquisition, Eurocor has received CE approval for its Taxcor DrugEluting Stents."

"We believe our pricing and marketing strategy will help us incapturing 2-3% share in European market over the next two years."

"The domestic market is also huge with over 60,000 Stents sold in2005 and 80,000 stents in 2006. I am very confident of Eurocorachieving good growth from the stent market. The acquisition ofEuroCor leads to product diversification for Opto. Prior to theacquisition, Opto was only present in the non invasive market. Thisdevelopment enables Opto to enter the invasive segment andenhance our product portfolio. On the other hand Opto can utilizeEuroCor's distribution network which is in 36 countries to enhance itsreach to distribute its products."

Opto generates surplus cash even on a standalone basis and is in aposition to fund its recurring capital expenditure from its internalaccruals. We did raise debt in order to fund the EuroCor acquisitionwhich subsequently has been repaid from the FPO proceeds.Furthermore, there is adequate scope for the company to raise lowcost funds, as and when required."

"Relatively higher debtor days is the norm in the healthcare industry.Shipment of goods takes around 90 days. We have a strong clientbase, which includes prominent customers. Hence, the chance ofdefault is very low for the company. Also we are nor dependent on asingle customer, single product or a single market for growth."

"Opto being a 100% EOU with large imports enjoys the position ofnatural hedging for all its foreign currency transactions. Therefore,the weakness of US dollar will not really impact profitability."

Bodapat i BhaskarGroup CFO



2006

Financial Review



SENSING TECHNOLOGY

5 YEAR FINANCIAL SUMMARY &KEY RATIOSFINANCIAL SUMMARY Rs. in Millions

FINANCIALS

SalesProfit Before taxProfit after tax

EPS

Gross Block

Net BlockNetworth

Capital Employed% OF Dividend Declared

Dividend payout

Bonus declaredBonus shares issued

KEY RATIOS

FINANCIAL PERFORMANCE RATIO

EMPLOYEE COSTS / NET SALESINTEREST / TOTAL INCOME

PAT / NET SALES

EBIDTA / NET SALES

RONW (PAT / NET WORTH)ROCESALES / GROSS BLOCK (TIMES)TOTAL INCOME / WORKING CAPITAL

DEBT EQUITY RATIO (TIMES)

CURRENT RATIO (TIMES)CASH AND EQUIVALENTS / TOTAL ASSETS %

01-02

310.1666.7166.38

6.29117.3791.48

263.51

382.1330%

29.871:10

01-02

3%6%

21%26%25%17%2.641.360.454.69

1%

02-03

380.57

77.4975.01

6.51161.04

129.00

321.71535.22

30%

38.492:10

10.34

02-03

4%4%

19%25%23%14%2.361.120.664.8510%

03-04

585.24

130.26

130.519.47

224.63

183.13412.97630.90

30%46.53

3:1022.75

03-04

3%3%

22%27%32%21%2.611.690.533.97

1%

04-05

791.43194.14191.64

10.66236.22

185.61

532.68

691.7335%

70.735:10

41.24

04-05

3%2%

24%

29%36%28%3.351.960.303.003%

05-06

1160.36351.60350.28

13.07260.35

200.85728.94

1337.21

40%140.52

1:1

89.36

05-06

2%

3%30%32%48%26%4.461.630.803.372%



Rep 006

WHAT THE NUMBERS SAYKey Ratios & Graphs

Sales Profit before tax

01-02 02-03 03-04 04-05 05-06

Financials Years

Profit after tax

192

131 I

i i i i01-02 02-03 03-04 04-05 05-06

Financials Years

EPS

1-02 02-03 03-04 04-05 0

Financials Year

27

Global Reports LLC


ii<fIa7 LIm 11e dSENSING TECHNOLOGY

WHAT THE NUMBERS SAYKey Ratios & Graphs

30%Capital Employed

02-03 03-04 04-05 05-06

Financials Years

Gross Block

236

Net worth 743

28

Global Reports LLC


AnnuaTReport 2006

WHAT THE NUMBERS DO NOT SAYSuccess Drivers

Diversification into Invasive Segment

The acquisition of Eurocor leads to product diversification andenables Opto to enter the invasive segment and enhance its productportfolio. On the other hand, it can utilize Eurocor's distributionnetwork which is in 36 countries to enhance our reach to distributeour products. OCIL is in the process of integrating its operations withEuroCor

US FDA approval for SpO2 sensors

The US market size of this product is estimated at 70% of the totalglobal demand of US$0.5bn and Opto has a market share of 2.5-3%thereof. In FY06, Mediaid, OCIL's 100% subsidiary received a newdistribution and pricing agreement (DAPA) from a DefencePersonnel Support Centre (DPSC) based in Philadelphia. With thisagreement, the company would be able to distribute the FDAapproved SpO2 Sensors and Patient Monitoring Devices at specificprices through the Medical Prime Vendor Programme (MPVP). Atthis point in time, Opto is the only company in India to have an FDAapproval for exporting medical devices and an agreement with DPSC.

immense scope to supply patient monitoring devices, sensor probesand other medical equipment to the Indian hospitals.

Penetrating New Markets

The global market size for srents is estimated to be US$8bn of whichUSA comprises of US$4bn, Europe US$3bn and rest of the worldcomprising of US$lbn. The stent market is growing at 14% pa.EuroCor has recently received CE approval for its stents, whichpresents them an opportunity to penetrate the non US & Japanesemarkets market using our distribution setup and low costmanufacturing advantage. The domestic market for stents is also verybig with over 60,000 stents sold in 2005 which is likely to go up toover 80,000 in 2006.

Qualitative Improvement in Financials

The ROE (RONW) has improved significantly from 23.4% in FY03to 45.9% in FY06. More importantly the quality of ROE hasimproved significantly with increasing contribution from Net profitMargin (NPM).

Emerging Outsourcing Opportunities

There is a visible trend among the OEMs in this sector to outsourcethe design and manufacture of opto-electronic devices and value-added subsystems to fully integrated, independent manufacturers. Ifthis trend gathers momentum a niche manufacturer like Opto couldbe a significant beneficiary.

Huge Market to be Tapped

The estimated market-size that Opto can cater to in non-invasivesensing for healthcare with sensors and pulse oximeters exceeds

Omn.

Emerging Domestic Demand

Given India's growing population and the fact that there are close to amillion hospital beds in India (marginally more than the US) for apopulation which is over four times the US population, there exists




WEALTH CREATION

Total shareholder return is a measure of the gain delivered to the shareholders of

the company. Returns are calculated not only in terms of the dividend per share,

but also in terms of capital appreciation in the underlying investment.

The management of Opto Circuits believes in rewarding shareholders

handsomely, and this is reflected in the undermentioned list of

dividend and bonus shares announced by the company over the years:

FY

FY 2000-01

FY 2001-02

FY 2002-03

FY 2003-04

FY 2004-05

FY 2005-06

FY2006-07

Dividend

30%

30%

30%

30%

30%

35%

40%

Bonus Share

-

1:10

2:10

3:10

4:10

5:10

1:1

Years

2000-012001-022002-032003-042004-052005-062006-07

BonusSharesRatio

-

1:10

2:10

3:10

5:10

1:1

-

BonusSharesalloted

100

220

396858

2574

CumilativeInvestment

in Shares

1000

1000

1100

1320

1716

25745148

Dividend%

30%30%30%30%35%40%

DividendAmount

300030003300396060069009

-

CumilativeDividend

60009300

132601926628275

-

Returns

Initial investmentAdd bonus sharesTotal shares as on date-Add dividendsTotal returns

As a % of investment

1000 at 5015742574 400

50000

102960019266

1048866

2098%

Opto Circuits made a follow on public offer (FPO) of 4mn shares at a

price of Rs270 per share. The follow on issue was for an aggregate

sum of Rs.108 crore. The issue elicited a tremendous response and

was oversubscribed 4.89 times. The HNI portion was over subscribed

3.5 times, QIB portion 9.88 times and retail portion 1,54 times.

Opto's shares have generated a return of 48% over a short span of four

and a half months from the FPO issue closing date as compared to a

negative return of 12.2% by the BSE HcalthCare Index. Opto has

been a significant out-performer as compared to every index in

a highly volatile market.

Table: Major index returns over April - August 2006

Index

BSEHC

BSE 200

BSE 500

SENSEX

NSE Nifty

CNXMidcap

April 1 2006

3944

1446

4626

11564

3473

4897

l6-Aug-06

3463

1373

4354

11448

3356

4265

Returns

(12.2)

(5.0)

(5.9)

(1.0)

(3.4)

(12.9)

This overwhelming response to the FPO highlights the faith

and trust that the public has in the company.

Table: Objects of FPO

Major Activity

To set up R&D center

Cost of upgrading infrastructure and for

modernizing and acquisition of additional

plant and machinery

Establishing matketing offices by wholly

owned subsidiary Mediaid, Inc. USA.

Additional Working Capital Margin

To meet part of the cost of acquisition of

EuroCOR, GmBH, Germany

Cost (Rs mn)

194

164

75

225

272



Opto Circuits ( India) LimitedSENSING TECHNOLOGY

31

Statutory Reports

Global Reports LLC


Opto Circuits (India) LimitedSENSING TECHNOLI

DIRECTORS REPORTYour Directors have pleasure in presenring their report on the business and operations of the company for the year ended 31 March 2006

Financial Results

Total RevenueProfit before DepreciationDepreciationProfit before TaxProvision for taxationPrior year adjustmentsProfit for the year

APPROPRIATIONProposed DividendTax on DividendSurplus carried to Balance Sheet

Year Ended31.03.06

1184.48363.94

12.35351.59

1.320.34

350.62

123.2317. 28

210.11

(Rs.in millions)Year Ended

31.03.05

783.75207.02

12.88194.14

2.50(1.20)

190.43

62.558.17

119.71

COMPANY PERFORMANCEYour company has recorded yet another year of good performanceduring the year under review. The total revenue at Rs. 1184.48million for the year ended March 2006 as against Rs.783.75 millionfor the same period during the previous year higher by 51 % and profitat Rs.350.62 million as of March 2006 as against Rs.190.43 millionfor the same period during the previous year million represents asincrease of 84% over the previous year.

DIVIDENDConsidering the performance of the Company, your Directors' arepleased to recommend an Dividend at the rate of 40% for the yearended 31st March 2006 on the equity share capital, which amountsRs.4.00pershate.

MANAGEMENT DISCUSSION AND ANALYSISExecutive Summary

Your Company is engaged in the Design, Development,Manufacturing, Marketing and Distribution of Medical ElectronicDevices and Medical monitoring products employing Sensing andDetection techniques. In the past fourteen years the company hasestablished itself as a leading supplier of noninvasive OEM Opticalsensors in the field of Patient monitoring systems.

The company has received US FDA approval for its SpO2 products. It

has also added two new products to its patient monitoring range.

The company is also expanding into new geographical territoty withoffices established in Dubai and Germany. Our world widedistribution network helps market our products globally.

COMPANY OVERVIEWThe group comprises Opto Circuits India Ltd, a public listedcompany and Advanced Micronic Devices Limited, also a listedcompany and Medi Aid Inc, USA. Opto Circuits India Ltd has beensteadily growing at an annual rate of approximately 36% and is aleader in Medical Non-Invasive sensors. The combined revenues ofOpto and Advanced Micronic Devices Ltd, is Rs. 1454.49 million (USf 32.40) million.

During the year your company also has acquired Eurocor Gmbh,which is in the business of manufacturing Cardiac and Peripheralstems with a market size of 10 Billion USD which is growing at therate of 15 % annually.

After the acquisition Eurocor received the CE approval for its TaxcorDrug Eluring Stents. The company has also acquired a 100% stake inAltron Industries during 2004-05 which is engaged in providingElectronic manufacturing services at its state of art manufacturingfacility at Electronic City, Bangalore.

During the current year, your company also had a very successfulfollow on Public offering of 4 million shares at a price of Rs.270 per



Annual Report Z U U 6

DIRECTORS REPORTshare. The follow on issue was for an aggregate sum of Rs.1080million. The issue elicited tremendous response and was oversubscribed 4.89 times. You will also be pleased to know that yourshares have been a significant out performer as compared to everyindex in a highly volatile market.

The Company plans to expand its state of the art technology indeveloping new models of patient monitoring systems like pulseoximeters, multiparameter monitors and other Patient Monitoringsystems used in Critical Patient Care.

The company proposes to enhance its in-house R& D capability in theUS and India and to ensute continued leadership in the field.

Human ResourcesOne of the key assets of the company is its people and this isstrengthened by motivating them to perform at their best byaugmenting their skills through, training programs and recognitionmechanisms. The employee strength is 345 as at 31st March 2006.

BONUS SHARESYour Directors are pleased to recommend Bonus shares on the fullypaid up shares in the ratio of 1 share for every 1 share held in the sharecapital of the Company. The necessary resolution is incorporated inthe notice convening the Annual General Meeting for shareholdersconsideration.

CONSERVATION OF ENERGY, R E S E A R C H &

DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGNEXCHANGE EARNINGS AND OUTGO.

In pursuance of the provisions of Section 217( l ) (e)of the companiesAct, 1956 read with Rule 2 of the Companies (Disclosure ofParticulars in the Report of the Board of Directors) Rules, 1988, theparticulars relating to conservation of energy, technology absorptionand foreign exchange earnings and outgo are furnished below:

Conservation of Energy: The operations of your company are notenergy intensive. Adequate measures have, however, been taken toreduce energy consumption by using energy efficient computerterminals. Air-conditioners are used only when required, therebyenhancing energy efficiency.

Research and Development: Your Company has launched aspecialized Research & Development facility in Electronics City,Bangalore. The research activities will focus on the design anddevelopment of a new range of patient monitoring systems.

The Company plans to use state of the art technology in developingnew models of patient monitoring systems like pulse oximeter, noninvasive gadget used to keep a tab on oxygen and pulse rate.

Technology Absorption: Not applicable.

CORPORATE GOVERNANCECertificate dated 13 June 2006 of the auditors of your Companyregarding compliance of the conditions for Corporate Governance asstipulated in Clause 49 of the listing agreement with stock exchanges,is enclosed.

PARTICULARS OF EMPLOYEESInformation as per Section 2 17 (2 A) of the Companies Act 1956, teadwith Companies (Patticulars of Employees) Rules 1975 as amended,is available at the registered office of your Company. As per theprovisions of Section 219 (1) (b) (iv) of the said Act, the Report andAccounts are being sent to all shareholders of the Company excludingthe statement of particulars of employee's u/s 217 (2 A) of the saidAct. Any shateholdets interested in obtaining a copy of this statementmay write to the Company Secretary at the Registered Office of theCompany.

Foreign Exchange Earnings and outgo: The Company earnedRs.634.16 million in Foreign Exchange. The Foreign Exchange outgoincluding capital goods wasRs6l2.01 million.

RESPONSIBILITY STATEMENTSPursuant to the requirement under Section 217 (2AA) of theCompanies Act, 1956, with respect to the Directors ResponsibilityStatement, it is hereby confirmed:

That in the preparation of the Annual Accounts for the financial yearended 31st March, 2006; the applicable accounting standards havebeen followed along with proper explanation relating to materialdepartures.

That they have selected such appropriate accounting policies andapplied them consistently and made judgment and estimated that



SENSING TECHNOLOGY

DIRECTORS REPORT

<t i m i t e d

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 of the company for that period.

That they have taken proper and sufficient care for the maintenance

of adequate accounting records in accordance with the provisions of

Companies Act 1956, for safeguarding the assets of the Company and

for preventing and detecting fraud and other irregularities:

That the Directors have prepared the annual accounts for the

financial year ended 31st March 2006 on agoing concern basis.

LISTING OF SECURITIESThe Company's securities are listed in, The Mumbai Stock Exchange

and National Stock Exchange.

ACKNOWLEDGMENTThe Directors wish to thank all Stakeholders and Business Partners

Your Company's Bankers, Financial Institutions, and Business

Associate for their continued support and valuable co-operation. The

Directors also wish to express their gratitude to investors for the faith

that they continue to repose in the Company.

For and on behalf of the Board

Date : 21st August 2006Place : Bangalore

sd/-VINOD RAMNANI

Chairman & Managing Director

FIXED DEPOSITSThe Company has not accepted any fixed deposits from the public

during the year.

PERSONNELThe Employer — Employee relationship was cordial throughout the

year under review. The Board wishes to express its appreciation to the

sections of employees for their contribution to the growth of thebusiness during the year.

DIRECTORSMr.Jayesh Patel, Tom Dietiker & Mr.Suleman Merchant retire by

rotation and offer themselves for re-appointment. In compliance of

clause 49 of the listing agreement the board has recommended to

appoint Dr. V Balasubramaniam, Raj Kumar Raisinghaniah and

Dr.Anvay Mulay, as independent directors, who offer themselves for

appointment.

AUDITORSThe auditors M/s. Anand Shenoy & Co., Chartered Accountants,

Bangalore retire at the conclusion of the forthcoming Annual General

Meeting. Your Company has received a letter from them to the effect

that their re-appointment, if made, will be in accordance with the

provisions of Section 224 (-B) of the Companies Act 1956.



Annual Report 2006

CORPORATEGOVERNANCE

In compliance with clause 49 of the Listing Agreement with Stock Exchanges, the Company submits the report on the matters mentioned in the said

clause and lists the practices followed by the Company.

1. PHILOSOPHY ON THE CODE OF GOVERNANCE

OPTO Circuits (India) Limited's philosophy on corporate governance envisages transparency, accountability, integrity, consistent value systems,

delegation and responsibility. The Company tries to work by these principles in all its interactions with Shareholders, Employees, Customers,

Suppliers and Statutory authorities. The Corporate Governance comprises of a unique combination of factors likes regulations, compliance, policies

and economic environments, voluntary practices and disclosures.

2. BOARD OF DIRECTORS

Composition and provisions as to Board and Committees

Your company's Board comprises of 8 Directors out of which 4 are executive. The details of directors with regard to outside directorships, committee

positions as well as attendance at Board/general meetings are as follows

NAME

Mr. Vinocl Ramnani

Mrs. Usha Ramnani

Mr. Jayesh Patel

Mr. Thomas Deitiker

Dr. Suleman AdamMerchant

Dr. Anvay Mulay

Mr. RajkumarRaisinghani

Mr. V Balasubramaniam

CATEGORY

Executive

Executive

Non-ExecutiveDirector

Month andyear of

appoint-ment

08-06-1992

08-06-1992

03-04-2000

Non-Executive , 03-04-2000Director




Non-Executive

20-08-2001

31-12-2005

Designa-tion

Chairman

Director

Director

No. ofMeetings

1Held [Attended

15

15

15J

Director

Director

Director

31-12-2005 Director

131-12-2005 Directot

15

15

15

15

15

15

13

05

03

13

No. ofMembership

in BoardOther

Companies

1

1

Nil

Nil

1

04

05

04

1

1

3

Member- • Chairmanship of ofBoard Board

Committee Committee

. .,. ._

Nil

1

Nil

Nil

3

2

1

2

Nil

No

Nil

Nil

1

Nil

Nil

2

WhetherAttendedLastAGM

Yes

Yes

Yes

Yes

No

No

No

No



Upto CirciiITs~(Tndia) LimftedSENSING TECHNOLOGY

CORPORATE GOVERNANCE

Mr. Mahesh Patel resigned as on 31st December 2005. Dr. Anvay Mulay, Mr. V Balasubramaniam and Mr. Rajkumar Raisinghani were appointed as'additional Directors on 31st December 2005. and they hold office up to the date of Annual General Meeting. They need to be re-appointed by themembers of the Company.

Pursuant to the provisions of the Companies Act 1956, Mr. Jayesh Patel, Mr Thomas Dietiker and Dr Suleman Adam Merchant retire by rotation atthe ensuing Annual General Meeting and being eligible offers themselves for reelection.

Code of Conduct

The Board of Directors of your Company have laid down a Code of Conduct ('the Code') applicable to all Board Members and Senior Managementpersonnel of your Company. A Declaration from the CEO of your Company to the effect that all Board Members and Senior Management personnel ofyour Company have affirmed Compliance with the Code, forms a part of this Report.

DECLARATION

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Memebers and the Senior Management Personnel haveaffirmed compliance with the Code of Conduct for the year ended 31st March 2006

3. AUDIT COMMITTEE

The Company has a qualified and indipendent Audit Committee. The present Committee consists of 3 members all being Non-ExecutiveIndependent Directors. The details are given below:

S.No

1

2

3

Name of the Members

Mr. VBalasubramanian

Dr. Anvay Mulay

Dr. Suleman Merchant

Category

Independent Director



Present position

Chairman

Member

Member

The attendance of the members are given belov

S.No.

1

2

3

4

5

Name of the Members

Mr. Mahesh C Patel

Ms. Usha Ramnani


Mr. V Balasubramanian

Dr. Anvay Mulay

Attendance

3

3

4

1

1

Changes during the year

Inducted on

-

-

-

31-12-2005

31-12-2005

Ceased on

31-12-2005

31-12-2005

-

-

_



fterport 2(row


The Audit Committee has the following powers:1. To investigate any activity within its terms of reference.

2. To seek information from any employee,

3. To obtain outside legal or other professional advice

4. To secure attendance of outsiders wirh relevant expertise, if it considers necessary

The role of rhe Audit Committee includes the following

Over view of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements arefairly stated.

Recommending the appointment and removal of external auditors, fixation of audit fee and also apptoval for payment of any other services.

Reviewing with management the annual financial statement before submission to the Board

Reviewing the internal audit system and scope of intetnal audit.

Reviewing with management the annual financial statement before submission to the Board for approval, with particular reference to:

a. Matters required to be included in the Director's Responsibiliry Statement to be included in the Board's report in terms of clause (2AA) ofSection 217 of the Companies Act, 1956.

b. Changes, if any, in accounting policies and practices and reasons for the same

c. Major accounting entries involving estimates based on the exercise of judgment by management

d. Significant adjustments made in the financial statements arising out of audit findings

e. Compliance with listing and other legal requirements relating to financial statements

f. Disclosure of any related party transactions

g. Qualifications in the draft audit report

The Audit Committee reviews the following information:

1. Management Discussion and Analysis of financial condition and results of operations,

2. Statement of significant related party transacrions (as defined by the Audit Committee), submitted by management,

3. Management letters/ letters of internal control weaknesses issued by the statutory auditors, if any,

4. Internal audit reports relating to internal control weaknesses and

5. The appointment, removal and terms of remuneration of the Chief Internal Auditors

During the year 2006, four audit committee meetings were held. The requirements on periodicity and time gap between two meetings were inaccordance with the requirements of clause 49 of the listing agreements.

4. REMUNERATION COMMITTEE:

The Board constituted a Remuneration Committee which presently comprises of 5 Non Executive Independent Directors

S.No

1

2

3

Name of the Members



Mr. Rajkumar Raisinghani

Category




Present position

Chairman

Member

Member



IJpfoCiFcuTts (India) LimitedSENSING TECHNOLOGY


The committee reviews and decides the overall remuneration of the key employees of the company and the Wholetime Directors.

The Committee has been empowered to review/ recommend appointment and remuneration of the executive & Non-executive Directors. TheCommittee met once during the financial year

The details of the Attendance & remuneration paid to the Directors during the year 2006 are given below

SI. No

1

2

34

5

6

7

8

Name of the Director

Mr. Vinod Ramnani

Mrs Usha Ramnani '

Mr.JayeshPatel

Mr. Thomas Deitiker

Dr.Suleman Adam Merchant

Dr. Anvay Mulay

Mr. Balasubramaniam

Mr. RajkumarRaisinghani

Salary #

33,75,000

33,75,000

Nil

Nil

Nil

Nil

Nil

Nil

Perquisites*

16,87,500

16,87,500

Nil

Nil

Nil

Nil

Nil

Nil

Total

50,62,500

50,62,500

Nil

Nil

Nil

Nil

Nil

Nil

Note:

# Salary includes bonus.*Perquisites includes House Rent Allowance, Leave Travel Assistance, MedicalReimbursement and contribution to Provident Fund and Superannuation Fund.

Besides this, all the Whole time Directors were also entitled to Graruity and encashment of leave at the end of tenure, as per the rules of the Company.

5. SHAREHOLDER'S/INVESTORS' GRIEVANCE COMMITTEE.

The Shareholders/ Investors Grievance Committee presently consists of 3 members two of the being Non Executive Independent Directors asdetails Below:

SNo.

1

2

3

Name of the Member

Dr. Suleman Adam Merchant

Dr. Anvay Mulay

Ms Usha Ramnani

Category

Independent

Independent

Executive

Present Position

Chairman

Member

Member

The committee is constituted monitor and look into the redressals of shareholders and investors complaints like transfers, non-receipt of balabcesheet, declared dividends etc and also approval of share transfers, transmissions, transpositions, splitting and consolidation.

All the Meetings of the Shareholders/Investors Grievance Committee meetings were attended by at least two independent directors Ms. RoseChintamani Company Secretary acts as a Compliance Officer,

The total number of Complaints received and replied to, to the satisfaction of shareholders during the year under review, were 80. There were nooutstanding complaints as on 31st March 2006. No requests for transfers and for dematerialisation were pending for approval as on 31st March2006.

During the year there were 14 Committee meetings. The attendance of the members are given below:




S.No.

1

2

3

4

5

Name of the Members

Mr. Vinod Ramnani

Mr.MaheshC Patel



Dr. Anvay Mulay

Attendance

10

10

14

4

4

Changes during the yearInducted on

-

-

-

31-12-2005

31-12-2005

Ceased on

31-12-2005

31-12-2005

-

-

-

The Board has also delegated the power of approving the transfer, transmission etc. of securities to the Chairman and the Company Secretary.

6. GENERAL BODY MEETINGSa) Last 3 Annual General Meetings

Financial Year

Date

Time

Venue

2002-03

26th September

12.00 Noon

The Atria HotelNo 1 Palace RoadBangalore 560001.

2003-04

30th September

12. 00 Noon

The Grand AshokKumara Krupa High GroundsBangalore -560 001.

2004-05

2 1st July

10.00 am

The Grand AshokKumara Krupa High GroundsBangalore -560 001.

b) Postal Ballot

There were no resolutions that were passed through postal ballot during the financial year 2005-06

7. DISCLOSURES

(A) Basis of Related party transaction

Your Company places all the aforesaid details with respect to related party transactions before the Audit Committee periodically.

No transaction of material nature has been entered into by the Company with Directors or Management and their relatives etc. that may have aporenrial conflict with the interest of the Company.

There has been no instance of non-compliance by the company on any matter related to capital markets. Hence, the question of penalties orstrictures being imposed by SEBI or Stock Exchanges does not arise.

(B) Disclosure of Accounting treatmentYour Company has followed all relevant Accounting Standards while preparing the financial statements, subject to compliance of Accountingfor Retirement Benefits of employees (AS 15) and Accounting for Taxes on income (AS 22) as srared in Note No-2 & 10 of the Notes to Accounts

(C) Risk Management

Your Company is aware of the risk associated with the business. It regularly analysis the risks and takes corrective action for managing/mitigating the same. Your Company has developed a risk management policy.

(D) Proceeds from public issues, Right Issues, Preferential issues etcDuring the year under review, your Company has raised funds by way of Public issues etc..





(E) The Company needs to disclose all pecuniary relationship or Transactions of the non-executive directors vis-a-vis the company

No significant material transactions have been made with the non-executive Directors Vis-a-vis the Company.

Director Shareholding As on 31st March 2006.

NAME No. of Shares

1 Mr. Vinod Ramnani 4661566

2 Mrs. Usha Ramnani 1124556

3 Mr. Jayesh Patel ' • 1608312

4 Mr. Thomas Deitiker 1169998

5 Dr. Suleman Adam Merchant 53500

6 Dr. Anvay Mulay Nil

7 Mr. Rajkumar Raisinghani 4286

8 Mr. V Balasubramaniam 4000

(F) Management

The Management Discussion and Analysis Report forms part of the Annual Report and is in accordance with the requirement laid out in Clause

49 of the Listing Agreement.

No material transaction has been entered into by your Company with the Promoters, Directors or the Management, their subsidiaries or

relatives etc., that may have a potential conflict with interests of your Company.

(G) Shareholders

Details of the Directors Seeking appointment / re-appoinrment at the ensuing AGM are provided in the Notice convening the AGM

A shareholders' Grievances Committee under the chairmanship of a non-executive director has been formed to specifically look into the redressal

of shareholder and investors complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc.

8. MEANS OF COMMUNICATIONThe annual, half yearly and quarterly results are regularly submitted to the Stock Exchanges in accordance with the listing agreement and

published in leading newspapers like Business standard and other local news papers.

Annual Report containing inter alia Audited Accounts, Consolidated Financial Statements, Directors Report, Auditors Report, and other

important information is circulated to members and others enrirled thereto.

Other information of significant importance like take over, change in management, information of subsidiaries/ offices, major projects,

status/recognition received etc. are promptly intimated to Stock Exchanges and also to the public by way of Press releases in leading newspapers.

9. MANAGEMENT DISCUSSION AND ANALYSIS.The management discussions and Analysis report forms part of the annual report and is captioned "Management Discussion and Analysis" in the

Directors Report.




10. GENERAL SHAREHOLDER INFORMAITON

10.1 Annual General Meeting

Date and Time 28th September 200611.00AM

Venue The Grand Ashok,Kumara Krupa, High Grounds,

Bangalore-5 60001.

10.2 Financial Calendar: Results ReportingQuarter 30thjune 2006 31st July 2006Quarter 30th Sept 2006 Last week of October 2006.

Quarter 31st December 2006 Last week of January 2007

Quarter 31 st March 2006 Last week of June 2007.AGM for the approval of the September 2007Audited accounts for the year

ended 3 1st March 2007

10.3 Details of Book Closure from 22nd September 2006 to 28th September2006 (both days inclusive)

10.4 Dividend payment: on or after 28th September 2006

10.5 Listing of Equity shares a) The Stock Exchange Mumbai

on Stock Exchanges Phiroze Jeejeebhoy Towers, Dalai StreetMumbai-400001

b) Natinal Stock Exchange of IndiaExchange Plaza, Bandra Kurla Complex, Bandra (E)

MUMBAI-40005110.6 Stock Code

a. Trading SymbolBombay Stock Exchange Code: 532391National Stock Exchange Symbol: OPTOCIRCUI

b. DematlSIN Numbers in NSDL : INE808B01016

And CDSL for equity Shares

Listing Fee : Paid

10.7. Stock Market Data : High and low quotation at Bombay Stock Exchange.





Date

• April 2005

May 2005

June 2005

July 2005

August 2005

September 2005

October 2005

November 2005

December 2005

January 2006

February 2006

March 2006

BS

High (Rs.)

163.90

180.00

206.90

273.00

283.40

241.00

230.00

227.90

265.00

294.95301.00

308.45

ELow (Rs.)

145.60

143.00

169.20

180.00

157.00

185.05

187.60

198.00

218.00

248.80

263.00

268.15

No. of

472475

1261686

1523696

1482847

525148

2228567

768689

10456091204972

759780

852940

570279

NSEHigh (Rs.)

Shares

178.09179.80

206.70

272.55

285.00

i 251.00

230.00

227.00

264.90

294.00

301.00

310.00

Low (Rs.)

144.05

141.25

169.00

179.55

156.20

184.50

188.05195.50

217.25

242.30

266.00

269.05

No. ofShares

817,163

2,738,197

3,207,955

2,871,2871,105,968

4,671,970

2,276,142

2,542,004

2,439,784

1,335,015

894,445

1,023,029

10.8 Registrar & Transfer Agents(Share transfer and communicationregarding share certificate, dividendsand change of Address)

10.9 Share Transfer System

Mr. M S Madhusudhan

Karvy Computershare Pvt Ltd.,Karvy House, 46, Avenue 4 Street No 1Banjara Hills, Hyderabad 500 034Ph 040 23312454, 23320751 23320752Fax 040 23311968E-Mail : [email protected]

Presently the share transfers which are received in physical form are processed by Karvy Computershare Pvt Ltd and the share certificates returnedwithin a period of 15 to 16 days from the date of receipt, subject to the documenrs being valid and complete in all respects. The share transfercommittee meets at frequrent intervals for approving the share transfer.

10.10 Distribution of Shareholding as On 31" March 2 006

SI. No.

12

34

56

7

8

Category

1-500

501-10001001-20002001-30003001-40004001-50005001-10000

10001 And Above

TOTAL

Number

8541

754

414174

61

4672

135

10197

••%

83.76

7.394.06

1.710.60

0.450.711.32

100.00

Amount

10665060.005466740.005890810.004375800.002190120.002107850.005320040.00

232066480.00

268082900.00

%

3.98

2.04

2.20

1.63 '0.82

0.791.98

86.57

100.00



Annual Report 2006


10.11 Categories of shareholders as on 31' March 2006.

Sno

12

345678

9101112

13

DescriptionHoldersBanksClearing MembersEmployeesFII'sForeign NationalsForeign PromotersH U FIndian PromotersBodies CorporatesMutual FundsNon Resident IndiansResident IndividualsTrustsTotal

No of Share

3104

148

1

1

185

3421

3

152

93002

10197

Shares

111206132754

38553191492803206

214615889657

73944343792120100812525014665631040

277726808290

% To Equity

0.41 %

0.49 %0.01 %

11.90%2.99 %8.00%0.33%

27.58 %14.14 %3.76%9.33%

21.00%0.01 %

100.00 %

10.12 Dematerialisation of shares

As on 31 March 2006, 68.48% of the company's total paid up capital representing 18358404 shares was held in dematerialized form and thebalance 31.52% representing8449886 shares were held in physical form.

10.13 Secretarial Audit:

As stipulated by the Securities and Exchange Board of India, a qualified practicing company secretary carries out the secretarial Audit and provides areport to reconcile the total admitted capital with the National Securities Depository Limited (NSDL) and Central Depository Services (India)Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the stockexchanges and is also placed before the Board of Directors. The audit, inter alia, confirms that the total listed and paid up capital of the company is inagreement with the aggregate of the total number of shares in dematerialized form (held with NSDL and CDSL) and total number of shares inphysical form.

10.14 INVESTOR CORRESPONDENCE FOR SHARES HELD IN PHYSICAL FORM:

(Share transfer and communicationregarding share certificate, dividendsand change of address and anyquery relating to the shares of theCompany)

For shares held in Demat Forn

Mr. M S Madhusudhan

Karvy Computershare Pvt Ltd.,Karvy House, No 45, Avenue 4,Street No 1, Banjara Hills,Hyderabad-560 034E-Mail : [email protected]

To the Depository Participant



Opto CIreuits (India) LimitedSENSING TECHNOLOGY


CERTIFICATE UNDER CORPORATE GOVERNANCE REPORT

Certificate related to Code of Conduct for Director's / Senior Management

This is to certify that as per revised Clause 49 of the Listing Agreemenr the code of conduct has been laid down for all theBoard Members and Senior Management of the Company. The Board Members and Senior Managment personnel haveaffirmed compliance with Company's code of conduct for the year 2005-06.

Place: BangaloreDate: 21st August, 2006

Sd/-Vinod Ramnani

Managing Director

AUDITORS' CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATEGOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT.

To the members of OPTO Circuits (India) Limited.,

We have examined the compliance of the conditions of Corporate Governance by OPTO Circuits (India) Limited for theyear ended 31 March, 2006, as stipulated in clause 49 of the listing agreement of the Company with Stock Exchanges inIndia.

The compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examinationwas limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of theconditions of Corporate Governance. Ir is neither an audit nor an expression of an opinion on the financial statements ofthe Company.

In our opinion and to the best of information and according to the explanations given to us, the Company has compliedwith the conditions of Corporate Governance as stipulated under the Clause 49 of the listing Agreement.

For Anand Shenoy & CompanyChartered Accountants

G C SomadasPartner

M.No.: 18636Place: BangaloreDate : 2l" August 2006



A n n u a i p ori:

AUDITORS REPORTTo,The Members of

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.

(iii) The Balance Sheet, Profit and Loss Account and Cash flowStatement dealt with by this teport are in agreement with thebooks of accounts.

1. We have audited the attached Balance Sheet of Opto Circuits(India) Limited as at 31st Match 2006 and the Profit and LossAccount for the year ended on that date annexed thereto.These financial statements are the responsibility of thecompany's management. Our responsibility is to express anopinion on these financial statements based on out audit.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account andCash Flow statement dealt with in this report subject to noteno. 2 regarding gratuity liability and note no. 10 regatdingAccounting for taxes on Income (AS 22), comply with theaccounting standards referred to in sub-section (3Q of section211 of the Companies Act, 1956.

We conducted our audit in accordance with the auditingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by management, as well asevaluating the overall financial statement ptesentation. Webelieve that our audit proves a reasonable basis for our opinion.

As required by the Companies' (Auditor's Report) Order, 2003in terms of sub-section (4A) of section 227 of the CompaniesAct, 1956, and according to the information and explanationgiven to us during the course of the audit and on the basis ofsuch checks as we consider appropriate, we enclose in theAnnexute a statement on the matters specified in paragraphs 4and 5 of the said Order.

(v) On the basis of written representation received from thedirectors, as on 31st March 2006 and taken on record by theBoard of Directors, we report that none of the directors aredisqualified as on 31st March 2006 from being appointed as aditector in terms of clause (g) of sub-section (1) of section 274of the Companies Act, 1956.

(vi) Subject to the foregoing, in our opinion, and to the best of outinformation and accounting to the explanations given to us,the said accounts give the information required by theCompanies Act, 1956, in the manner so required and give atrue and fair view in conformity with the accounting principlesgenerally accepted in India.

(a) in the case of the Balance Sheet, of the state of affairs of theCompany as at 31st March 2006;

(b) in the case of Profit and Loss Account, of the Profit for the yearended on that date; and

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

(c) in the case of Cash Flow statement, of the cash flows for theyear ended on that date.

(i) We have obtained all the information and explanations, whichto the best of our knowledge and belief were necessary for theputposes of our audit.

(ii) In our opinion, proper books of account as required by lawhave been kept by the Company so far as appears from ourexamination of those books:

Place: Bangalore.Date: 13th June 2006.

For Anand Shenoy & Co.,Chartered Accountants

G C SomadasPartner

M. No.18636

45

Global Reports LLC


SENSING TECHNOLOGY

AUDITORS REPORT

Limited

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 3 of our Report of even date on the accountsof Opto Circuits (India) Limited for the year ended 31st March 2006)

i. (a) The company has maintained proper records showing fullparticulars including quantitative details and situation offixed assets.

(b) Physical verification of Fixed Assets is performed by themanagement in a regular programme for verification once ina year. In our opinion, the frequency of verification isreasonable, having regard to the size and the nature of itsbusiness.

(c) There was no substantial disposal of fixed assets during theyear.

ii. (a) We are informed that the physical verifications of inventoriesexcept inventories lying with the third parties wereconducted by the management at reasonable intervals. Inour opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification ofinventories followed by the management are reasonable andadequate in relation to the size of the company and thenature of its business.

(c) The company has maintained proper records of inventories.According to the records produced to us, no discrepancieswere noticed on verificarion between physical stocks andstock records.

iii. (a) As per the explanation given to us the Company has givenloans to the parties listed in the register maintained undersection 301 of the Companies Act 1956., the rate of interestand other terms and conditions of such loans given are notprejudicial to the interest of the Company.

(b) As per the explanation given to us the Company has takenloans from the parties listed in the register maintained undersection 301 of the Companies Acr 1956., the rate of interestand othet terms and conditions of such loans accepted arenot prejudicial to the interest of the Company.

iv. In our opinion, and according to the information andexplanations given to us, there is adequate internal controlprocedure commensurate with size of the Company and thenature of its business for the purchase of inventory and assetsand for the sale of goods. During the course of our audit wehave not observed any continuing failure to correct majorweakness in internal control.

v. (a) According to the information and explanation given to us,we are of the opinion that the transactions that need to beentered into the register maintained under section 301 of theCompanies Act, 1956 have been so entered.

(b) In our opinion and according to the information andexplanations given to us, the transactions made in pursuanceof contracts or arrangements entered in the registermaintained under section 301 of the Companies Act, 1956and exceeding Rs. 5,00,000 in respect of each party duringthe year have been made at prices which are reasonablehaving regard ro the prevailing market price at the relevanttime.

vi. The Company has not accepted any deposits from the publicwithin the meaning of Section 58A of the companies Act,1956..

vii. In our opinion, the internal audir system in the companyduring the year is adequate and commensurare to the sizeand the nature of the business of the company.

viii. To the best of our knowledge and as explained, the CentralGovernment has not prescribed maintenance of cost recordsunder section 209(l ) (d)of the Companies Act, 1956 for anyproduct of the company.

ix. On the basis of records produced before us, the Company isgenerally been regular in depositing undisputed statutorydues including Provident Fund, Employees State Insurance,Income Tax, Sales Tax, Customs Duty and Excise Duty.According to the information and explanations given to us,there are no undisputed amounts payable in respecr ofProvident Fund, Income Tax, Sales Tax, Customs Duty andExcise Duty which are outstanding as on 31st March 2006for a period of more than six months from the date on whichthey became payable.

46

Global Reports LLC


2006

AUDITORS REPORTx. The company has no accumulated losses and has not incurred

cash losses during the current financial year and in the

, immediately preceding financial year.

xi. During the year, the company has not defaulted in

repayment of its dues to financial institutions and banks.

xii. In our opinion and according to the information and

explanations given to us, and based on the documents and

records produced to us, the Company has not granted any

loans and advances on the basis of security by way of pledge

of shares, debentures and other securities.

xiii. In our opinion and according to the information and

explanations given to us, the nature of activities of the

Company does not attract any special status applicable to

Chit-Fund and Nidhi / Mutual Benefit Fund/ Societies.

xiv. In our opinion, the Company is not dealing or trading in

shares, securities, debentures or other investments and

hence, the requirement of para 4(xiv) are not applicable to

the company.

xv. In our opinion and according to the information and

explanations given to us, the terms and conditions on which

the Company has given guarantee for loans taken by its

subsidiary from a bank, are not prima-facie prejudicial to the

interest of the Company..

xvi. In our opinion and based on information and explanations

given to us by the management, term loans have been

applied for the purpose for which they were obtained.

xvii. According to the information and explanations given to us

and on an overall examination of the balance sheet of the

company, we report that no funds raised on short-term basis

have been used for long-term investment except the short

term temporary borrowings from banks of Rs. 800 Laksh to

pay for the acquisition of Eurocor GmbH. No long-term

funds have been used to finance short-term assets except

permanent working capital.

xviii. The Company has not made any preferential allotment of

shares to parties and companies covered in the register

maintained under section 301 of the Companies Act, 1956

during the year.

xix. The company has not issued debentures during the financial

year.

xx. The company has not raised any money through a public

issue during the year.

xxi. On the basis of our examination and according to the

information and explanations given by the management, we

report that no ftaud on or by the Company has been noticed

or reported during the course of our audit.

For Anand Shenoy & Co.,Chartered Accountants

Place: Bangalore.Date: 13th June 2006.

G C SomadasPartner

M. No. 18636



Opto Clrcuit§ (intlla) Lim11eaSENSING TECHNOLOGY

Opto FinanciaStatement



Annual Report 2006

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.BALANCE SHEET AS AT 31.03.2006

I. SOURCES OF FUNDS

SHARE HOLDERS FUNDCapitalReserves & Surplus

LOAN FUNDSSecured LoansUnsecured Loans

TOTAL

II. APPLICATION OF FUNDSFIXED ASSETS:

Gross BlockLess Depreciation

Net Block

Capital work - in - progressINVESTMENTSCURRENT ASSETS, LOANS & ADVANCES:

InventoriesSundry DebtorsCash & Bank BalancesLoans & Advances

Less : Current Liabilities & ProvisionsLiabilitiesProvisions

Net Current Assets

Miscellaneous Expenditure(to the extent not written off or ajdusted)

TOTAL

For OPTO CIRCUITS (INDIA) LIMITED

sd/- sd/-VINOD RAMNANI USHA RAMNANI

Chairman & Managing Director Executive Director

SCH 31.03.2006Rs.

A 268,082,900B 474,697,616 •

C 579,727,421D 14,700,638

1,337,208,575

E260,348,698

59,504,270

200,844,428

19,000F 396,616,623G

224,512,860740,657,311

22,435,98244,756,219

1,032,362,372

H 1f 156,544,913\ 149,932,655

j: 725,884,804

1 I;": 13,843,720

1,337,208,575

sd/-ROSE CHINTAMANI

Company Secretary

31.03.2005Rs.

178,721,930353,954,842

146,514,34312,538,233

691,729,348

236,220,33150,611,595

185,608,736

7,914,12698,065,104

204,209,121314,289,715

23,021,24958,950,752

600,470,837

127,101,92773,227,528

400,141,382

-

691,729,348

Read with our Report

For ANAND SHENOY & CO.,Chartered Accountants

sd/-G.C. SOMADAS

PartnerM.No.: 18636

Place:BangaloreDate : 13* June 2006.



Op toCircui t s (India) LimitedSENSING TECHNOLOGY

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.PROFIT & LOSS A/C FOR PERIOD ENDED 31.03.2006

SCH

INCOME

Sales JOther Income KIncrease/Decrease in W I P & FG L

TOTAL

EXPENDITUREManufacturing Expenses MAdministrative & Selling Expenses N

Financial Expenses ODepreciation E

TOTAL

Profit for the year before Tax

Provision for TaxationProvision for FBT

Profit After Tax

Add/(Less):Prior Year Adjustment

Profit After Prior Year AdjustmentsProfit brought forward from Previous Year

Profit available for appropriation

Amount Transferred to General Reserve

Proposed DividendTax on Distributed Profits

Profit carried to Balance Sheet

Number of Equity Shares

Basic & Diluted earnings per equity share (Rs.)

(Face value of Rs. 10/- per share)Notes forming part of accounts P

Significant Accounting Policies Q


sd/- sd/-VINOD RAMNANI USHA RAMNANI ROSE

Chairman & Managing Director Executive Director Com

31.03.2006Rs.

1,160,360,51511,834,34512,290,542

1,184,485,402

708,400,314

82,503,56729,633,942

12,350,430

832,888,254

351,597,149900,000417,544

350,279,605

340,749350,620,354

266,106,120

616,726,474

36,000,000

123,233,16017,283,450

440,209,864

26,808,290

13.07

sd/-CHINTAMANI.pany Secretary

31.03.2005Rs.

791,429,634

3,228,353(10,902,555)

783,755,432

486,919,968

71,332,87318,475,682

12,883,235

589,611,758

194,143,674

2,500,000

-

191,643,674

(1,205,480)

190,438,194165,895,454

356,333,64819,500,000

62,552,6768,174,852

266,106,120

17,872,193

10.66



sd/-G.C. SOMADAS

PartnerM.No.: 18636

Place:BangaloreDare : 13* June 2006.



006

OPTu ^li^uiis uiMJlA) LIMITED, BANGALORE.SCHEDULE TO BALANCE SHEET AS AT 31.03-2006

SCHEDULE A:Share Capital Authorised :

50,000,000 Equity Share of Rs.10/- Each• (RY 20,000,000 Equity Shares of Rs. 10/- each)

Issued Capital27,070,190 Equity Shares of Rs.10/- each(RY 18,134,093 Equity Shares of Rs. 10/- each)(Out of the above- 1,239,831 Equity Shares ofRs. 10/- each fully paid-up allotted otherwise than for cash21,255,390 (P.Y12.319,293) Equity Shares ofRs.10/- Each fully paid up as Bonus shares

Subscribed Capital26,808,290 Equity Shares of Rs.10/- each(RY. 17,872,193 Equity Shares of Rs. 10/- each)(Out of the above- 1,239,831 Equity Shares ofRs. 10/- each fully paid-up allotted otherwise than for cash21,255,390 (PY12,319,293) Equity Shares ofRs.10/- Each fully paid up as Bonus shares

Paid-up Capital26,808,290 Equity Shares of Rs.10/- Each fully paid up(RY. 17,872,193 Equity Shares of Rs. 10/- each)(Out of the above- 1,239,831 Equity Shares ofRs. 10/- each fully paid-up allotted otherwise than for cash21,255,390 (PY12,319,293>Equity Shares ofRs. 10/- Each fully paid up as Bonus shares

SCHEDULE B:

Reserves & SurplusAs per last Balance SheetAdditions during the yearShare Premium accountProfit & Loss Account balance

TOTALLess: Transfers during the year - Bonus Shares

Acid: Subsidy received from Govt. Of Karnataka

TOTAL

SCHEDULE C:

31.03.2006(Rs.)

500,000,000

270,701,900

268,082,900

268,082,900

268,082,900

52,481,49236,000,00033,867,230

440,209,864

562,558,58689,360,970

473,197,616

1,500,000

474,697,616

31.03.2005(Rs.)

200,000,000

181,340,930

178,721,930

178,721,930

178,721,930

32,981,49219,500,00075,110,750

266,106,120

393,698,36241,243,520

352,454,842

1,500,000

353,954,842

Secured Loans:Term Loan From Banks & Financial Institutions*Working Capital Advances from Banks **Other Term Loans***

* Secured by hypothecation of Fixed Assets** Secured by hypothecation of Stocks & Book Debts*** Secured by hypothecation of Equipments & Vehicles

271,289,428301,893,828

6,544,165

579,727,421

26,680,000108,646,605

11,187,738

146,514,343



'titrr iff "'trim it e dSENSING TECHNOLOGY

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.SCHEDULE TO BALANCE SHEET AS AT 31.03.2006

SCHEDULE D:Un Secured Loans:From DirectorsFrom Others

SCHEDULE F:Investments:Quoted Shares at Cost :Advanced Micronic Devices Limited-3153165 E.Shares of Rs.10/- Fully Paidup(Aggregate cost of Quoted investment Rs.52461254.Market Value Rs.132905905/- as on 31.3.2006 or ason last quoted date)Unquoted Investment at Cost:Medi Aid Inc.,2250000 E.shares of US$1/- Fully paid upEuroCor GmBH40850 E.Shares of Euro I/- Fully paidAltron Industries Pvt. Ltd.7020 E.Shares of Rs.100/- Fully paid

Current Assets, Loans & Advances:A. INVENTORIES

(Valued at lower of cost or market value as certifiedby the Management)

B. SUNDRY DEBTORS(unsecured considered good, for which the companyholds no security other than the debtor'spersonal security)- from Subsidiaries > Above 180 Days

> Below 180 Days- from others > Above 180 Days

> Below 180 Days

TOTAL

C. CASH & BANK BALANCES:Deposit & Other AccountsCurrent AccountsCash on hand

TOTAL

CURRENT ASSETS TOTAL (A+B + C)

LOANS & ADVANCES:(Unsecured considered good, receivablein cash or in kind or for value to be received)Advances to Suppliers & Services - Subsidiary- OthersOthers AdvancesAdvances to Suppliers of Capital goodsAdvances-Inter Corporate Deposits - SubsidiaryAdvance Income TaxStaff AdvanceDepositsPrepaid Expenses

TOTAL

31.03.2006(Rs.)

12,660,6382,040,000

14,700,638

52,461,254

101,488,225

237,467,430

5,199,714

396,616,623

224,512,860

101,062,161178,135,58738,713,597

422,745,966

740.657311

16,847,9755,538,257

49,750

22,435.982

987,606,153

31.03.2005(Rs.)

12,538,233

12,538,233

52,461,254

45,603,850

98,065,104

204,209,121

3,121,632

133,673311,034,410

3)4.289.713

17,249,9435,763,201

8,105

23,021,249

541,520,085

17,440,04013,700,5327,469,8921,827,500

-2,867,425123,000494,746833,084

44,756,219

736,80036,545,93015,676,5243,516,9771,013,815

-168,500516,327775,879

58,950,752

52

Global Reports LLC



31.03.2006(Rs.)

31.03.2005(Rs.)

SCHEDULE H:

Current Liabilities & Provisions:•Current Liabilities :

Sundry Creditors for Purchases - Subsidiary- OthersSundry Creditors for ExpensesSundry Creditors for Capital GoodsAdvance received from CustomersAdvance received from SubsidiariesStatutory Dues PayableUnclaimed Dividend - 2000-2001Unclaimed Dividend - 2001-2002Unclaimed Dividend - 2002-2003Unclaimed Dividend - 2003-2004Unclaimed Dividend - 2004-2005

TOTAL

Provisions :Provision for DividendProvision for Dividend TaxProvision for InterestProvision for FBTProvision for Taxation 04-05 'Provision for Taxation 05-06

TOTAL

SCHEDULE I:

Preliminary Expenses(to the extent not written off or adjusted)

SCHEDULE J:

SALESSALES UNIT I- ExpottsSALES UNIT II-ExportsSALES UNIT- II- D T ASALES UNIT- II-Software

TOTAL

SCHEDULE K:

6,514,05761,731,25215,830,5865,608,7069,910,08155,036,1851,014,032

70,111104,297200,258197,041328,307

156,544,913

123,233,16021,458,3031,423,648417,544

2,500,000900,000

149,932,655

39,41899,150,39712,147,2663,700,5599,890,523

-1,561,944

70,411104,297201,816235,296

-

127,101,927

62,552,6768,174,852

--

2,500,000-

73,227,528

13,843,72013,843,720

160,2641,151,581,885

8,618,366

1,160,360,515

54,522,462708,165,282

14,933,39013,808,500

791,429,634

OTHER INCOME:Dividend received from SubsidiaryInterest receivedDifference in Exchange RateMiscellaneous Income

TOTAL

3,153,165425,887

8,255,293

11,834,345

3,153,16564,063

11,125

3,228,353



o Circuits (India )L imi tedSENSING TECHNOLOGY


SCHEDULE L:

Increase/Decrease in WIP & Finished Goods

Opening Stock of WIPOpening Stock of Finished Goods

TOTAL( A )

LESS:Closing Stock of WIPClosing Stock of Finished Goods

TOTAL( B )

Increase/(Decrease) in WIP & Finished Goods(B-A)

SCHEDULE M:

A. MANUFACTURING EXPENSES:CONSUMPTION OF RAW MATERIALS & CONSUMABLESOpening Stock

ADD:Purchase of Raw Materials & Consumables UN IPurchase of Raw Materials & Consumables UN II

TOTAL(a)

LESS: Closing StockRaw Materials & Consumables - Unit II

TOTAL(b)

Raw materials & Consumables Consumed (a-b)=A

B. FACTORY EXPENSES:Labour Charges & Job WorkPower & FuelTooling ChargesInsuranceRepairs & Maintenance - Plant & MachineryRepairs & Maintenance - Electricals & OthersRepairs & Maintenance - BuildingR&D,Product Development ExpensesCustoms Duty & Supervision Charges

TOTAL (B)

Total (A+B)

31.03.2006(Rs.)

13,099,326

13,099,326

25,389,868

25,389,868

12,290,542

191,109,795

692.210,347

883,320,142

199,122,992

31.03.2005(Rs.)

12,951,38111,050,500

24,001,881

13,099,326

13,099,326

(10,902,555)

134,985,414

43,238,232476.889,990

655,113,636

191,109,795

199,122,992

684,197,150

8,887,8547,489,664

47,6763,323,8761,046,388905,118857,437

1,623,25921,892

24,203,164

191,109,795

464,003,841

8,297,2096,161,6731,730,4143,288,007908,535866,872

: 72,553933,066657,798

22,916,127

708,400,314 486,919,968



Attnual Report 20UF


SCHEDULE N:

A. ADMINISTRATIVE EXPENSES:• Directors Remuneration

Travelling & ConveyanceProfessional & Consultancy ChargesPrinting & StationeryGeneral ExpensesPostage, Telephone & Fax ChargesShare Transfer ChargesLoss on sale of AssetRates & TaxesAdvertisementAuditor's RemunerationRentRepairs & Maintenance - OthersMembership, Books & Periodicals

TOTAL (A)

B. STAFF EXPENSES:Salaries & AllowancesStaff Welfare and Amenities

TOTAL (B)

C: SELLING EXPENSES:Freight & Handling ChargesDifference in Exchange ratePacking MaterialsClearing ChargesBusiness Promotion ExpensesTransportation

TOTAL ( C )

Total (A+B + C)

SCHEDULE O:

FINANCIAL CHARGESInterest - Working CapitalInterest on Term LoanInterest to OthersBank Charges

TOTAL

31.03.2006(Rs.)

28,913,752

8,956,213

1,484,4101,837,2992,250,052

494,109

15,022,083

82,503,567

16,398,5455,185,062

745,7427,304,593

31.03.2005(Rs.)

10,125,0009,887,2532,155,6043,636,0202,385,6822,188,675124,295

2,944,1082,072,7491,906,066525,500375,412115,913125,455

38,567,732

22,432,1026,481,650

9,000,0008,398,2032,954,2512,681,4181,780,3311,170,478484,477443,676397,526390,463385,700327,531124,44811,695

28,550,197

16,909,6175,987,795

22,897,412

11,939,0064,304,8461,676,5371,370,490

465,668128,717

19,885,264

71,332,873

10,323,0552,777,9861,135,2884,239,353

29,633,942 18,475,682



SENSING TECHNOLOGY

Opto C i r c u i t s ( I n d i a ) L i m i t e d

SCHEDULE TO BALANCE SHEET FOR THE YEAR ENDED 31.03.2006 (Continued)

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Global Reports LLC


Opto Cif ctiits (Indla) LmfTtedSENSING TECHNOLOGY

NOTES FORMING PART OF ACCOUNTSSCHEDULE P1. Contingent Liability:

I. The company has issued corporate guarantee in favour of State Bank of India against line of credit sanctioned to its subsidiary for M/s AdvancedMicronic Devices Limited for Rs. 18.4 lCrores(PY 18.41 Crores).

II. Bank Guarantee : 0.79 croresIII Letter of Credit: 5.95 crores

2. The company's liability towards retirement benefits in form of Provident fund is charged to revenue expenditure. The company contributes tothe employees PF scheme run by the Central Government. All other retirement benefits payable to employees are accounted for on paymentand not provided for accrual basis.

3. GIF value of Imports:

a. Components and Spares

b. Capital Goods

c. Raw material

31"-March-2006

8,604,209

13,811,532

670,187,181

3 ls'-March-2005

11,832,922

10,949,611

495,764,656

4. Value of raw materials consumed:

a. Imported

b. Indigenous

Total

%

94.09

5.91

100.00

31"-March-2006

Rs.

634,786,336

39,904,302

674,690,638

%

98.10

1.90

100.00

31"-March-2005

Rs.

446,531,840

8,650,420

455,182,260

5. Stores and Spares consumed:

a. Imported

b. Indigenous

Total

%

85.56

14.44

100.00

31"-March-2006Rs.

8,134,067

1,372,445

9,506,512

%

80.27

19.73

100.00

31"-March-2005Rs.

7,081,191

1,740,390

8,821,581

6. Income in foreign exchange (INR)

7.

8.

The

a. Sales

Expenditure in foreign currency (INR)

a. Capital Equipment (GIF value)

b. Raw materials

Remuneration to Chairman, Managing Directors &

a. Salary

above payments are as per the provisions of Schedule XIII

31"-March-2006Rs in Lakhs

6,341.60

3l"-March-2006Rs in Lakhs

86.76

6,033.34

Directors (INR)

3 1 -March-2006

10,125,000

of the Companies Act, 1956

3l"-March-2005Rs in Lakhs

6906.22

3 l"-March-2005Rs in Lakhs

302.01

3710.97

31 -March-2005

9,000,000

5Global Reports LLC


U 0 6

NOTES FORMING PART OF ACCOUNTS (CONTINUED)

9. Capacities & Production

Year ending 31"-March-2006 31-March-2005

Production 40,83,339 4,565,369

Exempted from licensing provision in terms of Notification No.477(E) of 25.07.91.

10. Defetred Tax Asset/Liability has not been recognized as there is a Deferred Tax Asset on the opening timing difference for the year ending 31March 2002 of the depreciation charged on the Fixed Assets and there is no virtual certainty supported by convincing evidence that sufficientfuture taxable income will be available against which such Deferred Tax Asset can be realized.

11. Auditors Remuneration

Statutory Audit fees

Tax Audit fees

Other Services

31 -March-2006

375,000

125,000

25,500

31-March-2005

275,500

99,180

11,020

12. Liability fot tax paid under protest Rs.4,22,130/- was disputed & contested in appeal to Income Tax Tribunal, for the prior years, was notprovided. However the Income tax Appeal is disposed in the Company favour and liability is set aside. Hence there was no need to provide forthe liability.

13. Segment wise reporting (Rs. In Lakhs)a. The company has mainly one business segment of Medical Electronic Products.b. The company has geographical region wise segments of the customers is as shown below, region wise profirability can not be ascertained.

Sales Revenue by Geographical segment(Rs.in Lakhs)

U.S.A.SINGAPOREGERMANYHONGKONGTURKEYUNITED KINGDOMNETHERLANDSSPAINSOUTH AFRICAUAE

DUBAIISREALIRANSAUDI ARABIAOMANDOMESTIC

Current Year31 Mar 06

5547.30

4511.531369.33

2.5118.3428.75

6.165.871.624.570.199.073.416.991.79

86.18

Previous year31 Mar 05

4,670.052,740.93

249.73-

26.4444.14

7.9719.220.771.220.543.96

---

149.33



OpTto Circuits (India) liriiitedSENSING TECHNOLOGY.

NOTES FORMING PART OF ACCOUNTS (CONTINUED)

1) Segments have been identified in accordance with Accounting Standard 17 "Segment reporting", considering the organization structure & thereturn/risk profiles of the businesses. The management information system recognizes & monitors these segments on a continuous basis.

2) Segment revenue includes sales & other income directly identifiable with the segment & allocated to it. Assets used in the Company'sbusiness or liabilities contracted have not been identified to any of the reportable segments.

14. Related Party Disclosure:A) List of related parties where control exists

(i) ADVANCED MICRONIC DEVICES LIMITED(li) MEDIAIDINC,

(iii) ALTRON INDUSTRIES PRIVATE LIMITED.

Related party transactionsDuring the year, the following transactions were carried out with the related party in the ordinary course of business.

Advanced Micronic Devices Ltd.

AMDL Chennai

AMDL USA

AMDL - Expenditure

AMDL - ICD

AMDL — Thermometer

-

406.93

14356316

15000000

20873761

3121632

1555.40

14352681

71050000

27347250

From To

-

40566.91

740435

55036185

6473490

MEDIAID INC.,

MEDIAID - Purchase

MEDIAID - Sales

From

109741115

358549929 284734372

To

5536625

-

ALTRON INDUSTRIES PRIVATE LIMITED

ALTRON - Advance

ALTRON - Purchases

ALTRON - Payable

From

2860930

1076200

-

To

62964

Name of Related Party

Vinod Ramnani

Usha Ramnani

Relationship

Key Management Personnel

Key Management Personnel

Remuneration to Key Management Personnel

Name of Related Party

Mr. Vinod Ramnani

Mrs. Usha Ramnani

5062500

5062500

15. Previous year figures have been regrouped & reclassified to cotrespond with the current years classification.



i iv e p o r t z u u o

NOTES FORMING PART OF ACCOUNTS (CONTINUED)Significant Accounting Policies

1) System of AccountingThe Financial statements have been prepared to comply in all material respects with the mandatory Accounting standards issued by the

•, Institute of Chartered Accountants of India ('ICAI') and the relevant provisions of the Companies Act, 1956. The financial statements havebeen prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Companyand are consistent with those applied in the previous year.

2) Revenue RecognitionRevenue from sale of products are recognized on dispatch of goods to customers and are net of sales tax, discounts, rebates for priceadjustments, rejections and shortage in transit.

1) Fixed assetsFixed assets are stated at cost, less accumulated depteciation. Cost in prices includes purchase price, duties, levies and any other cost relating tothe acquisition and installation of the assets. Interesr and financial charges on borrowed funds, if any, used to finance the acquisition of fixedassets, until the date the assets are ready for use are capitalized and included in the cost of the asset.

2) DepreciationDepreciation is provided on the straighr line method at the rates specified under schedule XIV of the Companies Act, 1956 and on proratabasis on the additions made during the year.

3) InventoriesValuation of inventories is ar the lower of cost or market value as certified by the management.

4) Retirement benefits to employeesThe company's liability towards retirement benefit in the form of provident fund is fully funded and charged to revenue expenditure. Thecompany contributes to the employee provided fund maintained under the employees provident scheme run by the Central Government. Thecompany will be accounting the Gratuity liability on cash basis.

5) InvestmentsThe investments are stated at cost.

6) Deferred TaxDeferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying valueof the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognizedonly if there is virtual certainty of realization. Othet deferred tax assets are recognized if there is reasonable certainty of realization. The effecton Deferred Tax Asset & Liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.

7) Foreign currency transactionsForeign currency transactions are recorded at the rates of exchange prevailing on rhe date of transaction. Foreign currency of assets & liabilitiesand realized gains and losses on foreign exchange transactions, other than those relating to fixed assets are recognized in the profit and lossaccount. Exchange difference arising on liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying value of therespective fixed assets.

8) ProvisionsProvision for income tax is provided by the company, after considering the exemption U/s 10B of the Income Tax Act.

9) Earnings per shareThe basic earning per share is computed by dividing net profit after tax by the number of equity shares outstanding for the period. Dilutedearnings per share have not been computed, as the company has not issued any Dilutive Potential Equity Shares.

For & on behalf of the Board of DirecrorsAs per our report of even date


60

sd/-VINOD RAMNANI

Chairman &Managing Director


sd/-USHA RAMNANIExecutive Director

sd/-ROSE CHINTAMANI

Company Secretary

sd/-G.C.SOMADAS

PartnerM.No.: 18636

Global Reports LLC


OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2006

I. Cash flow from Operating ActivitiesCash InflowNet Profit Before Tax and Non-Recurring Items 35 1,597,149Add : Depreciation 12,350,430Loss on Sale of Assets & Other Non Cash Items (3,457,755)

360,489,824Less: Dividend Received 3,153,165Less: Interest Received & Othet Non Cash Items 425,887Adjusted Cash Flow From ProfitsTotal Cash Inflows ACash OutflowIncrease in Trade & Other Receivables (426,367,595)Increase/(Decrease) in Inventories (20,303,739)Decrease in Loans & Advances 14,194,533Increase in Trade & Other Payables 27,855,871Income Tax Paid & Other Prior year expenses (976.795)Total Cash Outflows BNet Cash Flow From Operating Activities [A-B]

II. Cash Flow from Investing ActivitiesCash InflowSale of Fixed Assets . 10,217,235Dividend Received 3,153,165Interest Received 425.887Total Cash Inflows ACash OutflowIncrease in Capital WIP (7,895,126)Purchase of Fixed Assets B 34,345,603Purchase of Investment 298,551.519Total Cash OutflowNet Cash Flow From Investing Activities {A-B}

III Cash Flow from Financing ActivitiesCash InflowProceeds from Issue of Share Capital including premium

Proceeds from Borrowings-Term Loan 244,609,428-Short term borrowings 193,247,223

Proceeds from Unsecured Loan 2,162,405Total Cash Inflows ACash OutflowRepayment of Borrowings-Other term loans 4,643,573Payment on public Issue Expenses 13,843,720Dividend Paid (including tax on dividend) 62,224,369Total Cash Outflows BNet Cash Flow From Financing Activities [A-B]

Net Increase / (Decrease) in Cash & Cash Equivalents [I+ 11 +III]Cash & Cash Equivalents as at (Opening)Cash & Cash Equivalents as at (Closing)

31.03.2006 31.03.2005

356,910.772356,910,772

(405,597,725)(48,686,953)

13,796,287

325.001,996(311,205,710)

440,019,056

80.711.661339,307,395

(585,268)23,021,24922,435,982

194,143,67412,883,235(3,766,267)

203,260,6423,153,165

75,188

41,160,62645,221,82630,858,100

(12,002,456)1,205,480

129,1693,153,165

75.188

50,000,000

64,905,985

46,527,849

200,032,289200,032,289

106,443,57793,588,712

3,357,522

19,033,491

(15,675,969)

50,000,000

111.433.834(61,433.834)

16,478,9096,542,340

23,021,249

Note : Previous Years figures have been regrouped and recast wherever necessary to conform to the currenr year's format and (-) figures indicates outflow.

AUDITOR'S CERTIFICATE

We have examined the above Cash Flow Statement of Opto Circuits (India) Limited, for the year ended 31" March 2006. The statement has beenprepared by the Company in accordance with the requirement under Clause 32 of the Listing Agreement with the Stock Exchanges and is based on and

is in agreement with the corresponding Profit and Loss Account and Balance Sheet of the Company for the year ended 31" March 2006.

As pet our report of even dateFor ANAND SHENOY & CO.,

Chartered AccountantsFor OPTO CIRCUITS (INDIA) LIMITED

sd/-VINOD RAMNANI


Place:BangaloreDate : 13'h June 2006.


sd/-ROSE CHINTAMANI

Company Secretary

sd/-G.C. SOMADAS

PartnerM.No.: 18636



OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.BALANCE SHEET ABSTRACT AND COMPANY 'S GENERAL BUSINESS PROFILE.

Registration Details:

Registration No.Balance Sheet Date

1322331/03/2006

State Code 08

Capital Raised during the year (Amounts in Rs.Thousands)

Public Issue

Bonus Issue

NIL

89,361

Right IssuePrivate Placement

NIL

NIL

Position of Mobilisation and deployment of funds (Amounts in Rs.Thousands)

Total Liabilities

Sources of FundPaid up Capital

Secured LoansReserves & SurplusUnsecured Loans

1,337,208

268,082474,698

579,72714.701

Total Assets

Application of FundsNet Fixed AssetsNet Current Assets

InvestmentsMisc. Expenditure

1,337,208

200,863725,885396,617

1 3,843

Performance of the Company (Amounts in Rs. Thousands)

Turnover

Profit before Tax

Earnings per Share in Rs.

1,160,361

351,59713.07

Total Expenditure

Profit after tax

Dividend Rate %

832,888

350,27940%

Generic Names of three Principal products / services of company.

Item Code No. (ITC Code)

8541.40.2000

8541.40.7040

8541.40.7040

8541.40.7040

8541.40.6010

9025.40.1910

Product Description

Emitter Assy.

Micro SensorPhoto Interrupter

Photo Transistor

Photo Diode Chips

Digital Thermometer


sd/-VINOD RAMNANI




sd/-ROSE CHINTAMANI

Company Secretary

As per our report of even dateFor ANAND SHENOY & CO.,


sd/-G.C. SOMADAS

PartnerM.No.: 18636



OpicTCircuits (India) LimitedSENSING TECHNOLOGY

SubsidiariesFinancial Statement

Advanced Micronic Devices Ltd



Annual Report 2006

ADVANCED MICRONIC DEVICES LIMITEDBALANCE SHEET AS AT 31.03.2006

SOURCES OF FUNDSOwn Funds

Share CapitalReserves & Surplus

BORROWED FUNDSSecured LoanUnsured LoanTOTAL SOURCES OF FUNDS

APPLICATION OF FUNDSFixed AssetsLESS : DepreciationNet Block

INVESTMENTS

NET CURRENT ASSETSInventoriesSundry DebtorsCash & Bank BalancesLoans & Advances

LESS : Current LiabilitiesProvisionDeferred Tax LiabilityNET CURRENT ASSETS

MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

TOTAL APPLICATION OF FUNDS

Notes forming part of Accounts

For and on behalf of the Board

sd/- sd/-

Sch.

AB

C

D

E

FGHI

JK

L

R

of Directors

VINOD RAMNANI Bhaskar ValivetiChairman & Managing Director Director

As on 31.03.06Rs.

52,811,000123,406,738

178,047,759

354,265,497

91,714,11018,402,09373,312,017

2,850,225

254,437,828213,808,380

76,224,20689,139,146

633,609,560355,799,901

19,716,6644,413,275

253,679,720

24,423,535

354,265,497

sd/-Usha Ramnani

Director

As on 3 1.03. 05Rs.

52,811,00093,181,846

190,878,5121,013,815

337,885,173

97,416,51518,501,03978,915,476

2,850,225

163,484,217195,494,55775,295,09334,313,649

468,587,516208,777,613

12,002,5623,687,275

244,120,066

11,999,406

337,885,173



sd/-G.C. SOMADAS

PartnerM.No.: 18636

Place : BangaloreDate : 13'''June 2006.



or tsiTCtiirs (inaiaj timrte aSENSING TECHNOLOGY

ADVANCED MICRONIC DEVICES LIMITEDPROFIT & LOSS A/C FOR PERIOD ENDED 31.03.2006

INCOME

SalesOther Income

TOTAL

EXPENSES

Cost of Goods soldAdministrative & Selling ExpensesFinancial ChargesDepreciation

TOTAL

PROFIT BEFORE TAX

Less : Provision for TaxCurrent TaxDeferred TaxFringe Benefit tax

PROFIT AFTER TAXAdd : Prior year adjustmentsLess : Prior year adjustmentsProfit Brought Forward from Previous yearAmount available for appropriationProposed DividendProvision for tax on Dividend

Balance Carried forward to Balance Sheet

Number of Equity SharesBasic & Diluted Earning per Equity Share (Rs.)

Notes forming part of Accounts

SCH 31.03.2006Rs.

M 524,562,093N 35,719,507

560,281,600

O 376,816,295P 116,406,744Q 17,258,516D 5,146,859

515,628,414

44,653,186

6,100,000726,000

1,383,732

36,443,454——

10,127,58546,571,039

5,281,100937,462

40,352,477

5,281,1006.90

R

31.03.2005Rs.

544,528,3983,556,467

548,084,865

408,279,915109,157,958

14,685,9423,941,364

536,065,179

12,019,686

3,205,0001,060,000

7,754,686—

606,7209,198,181

16,346,1475,281,100

937,462

10,127,585

5,281,1001.47

For and on behalf of the Board of Directors

sd/-VINOD RAMNANI


Place : BangaloreDate : 13'''June 2006.

sd/-Bhaskar Valiveti

Director

sd/-Usha Ramnani

Director



sd/-G.C. SOMADAS

PartnerM.No.: 18636

65

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a orrjrorrz tw ®


31.03.2006 31.03.2005(Rs.) (Rs.)

SCHEDULE "A"

SHARE CAPITAL.AUTHORISED CAPITAL7,500,000 Equity Shares of Rs 10/-each - 75,000,000 75,000,000

ISSUED, SUBSCRIBED AND PAID UP CAPITAL5,281,100 Equity Shares of Rs. 10/-each 52,811,000 52,811,000(of which 650,000 equity shares of Rs. 10/- each were =capitalised by way of bonus shares during the years1992-93 & 1994-95)

SCHEDULE "B"RESERVES & SURPLUS

General Reserve 5,500,000 5,500,000Profit & Loss Account Balance 40,352,477 10,127,585Share Premium 77,554,261 77,554,261

TOTAL 123,406,738 93,181,846

SCHEDULE "C"SECURED LOANS

CASH CREDIT(Secured by hypothecation of stocks 151,374,418 147,277,919& Book debts)

TERM LOAN(Secured Hypothecation of Building & FD's) 24,473,100 41,955,900

VEHICLE LOAN 2,200,241 1,644,693(secured against hypothecation of Vehicles)

TOTAL 178,047,759 190,878,512

UNSECURED LOANOpto Circuits India Ltd. — 1,013,815

TOTAL — 1,013,815

SCHEDULE "E"INVESTMENT (AT COST) NON TRADE(i) Fully Paid up Shares (quoted) 2,648,425 2,648,425(ii) Fully paid up shares (unquoted) 201,800 201,800Aggregate cost ofQuoted Investments Rs. 26,48,425Market Value Rs. 37,42,354 as on31.3-06 or as on the last quoted dateunquoted investments Rs. 201800/-market value Rs. 201800/- as determinedby the Directors (after accounting for theimpairment loss in the value of theunquoted shares.)

TOTAL 2,850,225 2,850,225



TFpt o - t/rr c uTTS (I n a l&rj L.L ml tedSENSING TECHNOLOGY


31.03.2006(Rs.)

31.03.2005(Rs.)

SCHEDULE "F"STOCK IN TRADE(At Lower of cost or net realisable valueas certified by a Director)

MaterialGoods in Transit

TOTAL

SCHEDULE "G"SUNDRY DEBTORS(Unsecured considered good, forwhich the company holds no securityother than debtors personal security)

Out standing for a period exceeding six monthsOthers

TOTAL

SCHEDULE "H"CASH & BANK BALANCES

Cash in HandBalance with Scheduled Banks in Current accountsBalance with Scheduled Banks in Deposit accounts

TOTAL

SCHEDULE "I"LOANS AND ADVANCESAdvance recoverable in cash or in kindor for value to be received(unsecured considered good)Staff AdvanceAdvance to SuppliersOther AdvancesDepositsAdvance Tax & Tax Deducted at Source

TOTAL

196,474,19957,963,629

254,437,828

71,309,947142,498,433

213,808,380

240,28315,216,81260,767,111

76,224,206

1,669,2354,077,88418,090,69661,034,6164,266,715

163,484,217

163,484,217

37,415,640158,078,917

195,494,557

185,53815,819,18259,290,373

75,295,093

981,3697,250,964

16,790,0386,291,8772,999,401

89,139,146 34,313,649

SCHEDULE "J"CURRENT LIABILITIESSundry CreditorsAdvance from OthersAdvance from CustomersOther Statutoty Dues PayableLiabilities for ExpensesUnpaid Dividend

TOTAL

204,743,835116,586,660

13,890,03110,473,5629,094,6911,011,122

149,851,64035,101,160

7,527,8186,679,9988,792,844

824,153

355,799,901 208,777,613

67

Global Reports LLC


itai freport 2006


SCHEDULE "K"PROVISIONSProvision for TaxationProposed DividendProvision for Tax on DividendProvision for wealth tax

TOTAL

SCHEDULE "L"MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Product Development expenses

TOTAL

SCHEDULE "M"SALES & SERVICE

USA BranchDomesticCommission Received

TOTAL

SCHEDULE "N"OTHER INCOME

31.03.2006(Rs.)

24,423,535

24,423,535

23,247,752467,540,513

33,773,828

524,562,093

31.03.2005(Rs.)

11,860,0005,281,1002,551,564

24,000

19,716,664

5,760,0005,281,100

937,46224,000

12,002,562

11,999,406

11,999,406

41,794,440471,797,044

30,936,914

544,528,398

Interest received on Fixed DepositsDividend IncomeProfit on Sale of assetExcess provision withdrawn

TOTAL

SCHEDULE "O"COST OF GOODS SOLD

Materials ConsumedService ChargesPower & FuelSpares - materialsInsurance Charges

TOTAL

4,076,18151,838

31,591,488—

35,719,507

2,930,35650,398

—575,713

3,556,467

357,926,08812,256,865

185,3204,706,2051,741,817

386,427,71210,592,782

250,1029,032,2591,977,060

376,816,295 408,279,915

68

Global Reports LLC


OptoSENSING TECHNOLOGY


SCHEDULE "P"ADMINISTRATIVE & SELLING EXPENSES

AdvertisementAGM expensesBad debts written offBank ChargesCommission paidConveyance & Vehicle MaintenanceDiscount allowedDonation accountElectricity & Water ChargesFreight chargesLoss on Sale of AssetMembership & Subscription FeesOffice MaintenancePacking MaterialsPostage, Telegraph & TelephonesPreliminary Expenses written offPrinting and StationeryProfessional & Consultancy FeesRent, Rates and TaxesRepairs & MaintenanceSalary, Wages and Welfare expensesSales PromotionSecurity ChargesSeminar ExpensesSratutory Audit FeesTax Audit feesOther ServicesTender ExpensesTravelling Expenses

TOTAL

SCHEDULE "Q"FINANCIAL CHARGES

On Working CapitalOn Term LoanOn others

31.03.2006(Rs.)

582,09730,991

—"4,649,6556,830,7416,274,0603,300,247

40,057721,785

4,002,610—

~ 256,8852,966,559

110,6156,756,931

—2,853,1525,784,679

; 4,543,623; 1,086,487

47,319,3256,083,227

262,302997,124224,480

56,12010,400

308,87710,353,715

: 116,406,744

••

15,991,8411,150,779

115,896

31.03.2005(Rs.)

713,21855,205

1,544,5733,240,1053,436,4555,148,9712,529,866

186,232630,711

2,119,313196,081124,865

2,222,17584,442

6,442,87018,000

2,531,0775,843,4964,461,1002,223,078

48,121,9155,531,961

226,0101,379,067

165,30055,10050,000

329,0809,547,692

109,157,958

10,173,1274,315,624

197,191

TOTAL 17,258,516 14,685,942

69

Global Reports LLC

AD

VA

NC

ED

MIC

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DE

VIC

ES

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:F

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Ass

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Sch

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L

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R

Total

as on

01.0

4.05

868,2

42

49,59

1,639

8,55

7,65

2

7,35

2,07

4

25,0

65,3

63

3,14

4,92

0

1,203

,608

1,633

,017

97,4

16,5

15

93,40

6,107

Addi

tions

-

734,6

97

1,88

9,54

3

3,89

9,27

2

200,

685 -

1,24

7,71

5

7,971

,912

9,166

,560

Delet

ions

10,97

0,184

1,053

,149

74,86

4 -

759,

496

816,6

24 -

13,67

4,317

5,156

,152

Total

as on

31.0

3.06

868,2

42

38,62

1,455

8,23

9,20

0

9,16

6,75

3

28,96

4,635

2,58

6,10

9

386,9

84

2,88

0,73

2

91,7

14,1

10

97,4

16,5

15

Upto

01.04

.05

6,15

0,91

8

1,771

,157

2,61

5,20

7

6,18

4,93

3

1,073

,718

521,

930

183,1

76

18,5

01,0

39

15,0

71,1

57

DE

PR

EC

IAT

ION

Fot t

he year

1,470

,649

534,9

98

726,0

92

1,250

,798

135,1

68

37,5

11

991,6

43

5,14

6,85

9

3,941

,364

Delet

ions

3,75

5,64

1

666,6

40

74,86

4 -

360,

760

387,9

00 -

5,24

5,80

5

511,4

82

Upto

31.0

3.06

3,86

5,92

6

1,639

,515

3,266

,435

7,43

5,73

1

848,

126

171,

541

1,174

,819

18,4

02,0

93

18,5

01,0

39

NE

T B

LO

CK

As on

31.0

3.06

868,

242

34,7

55,5

29

6,59

9,68

5

5,90

0,31

8

21,5

28,9

04

1,737

,983

215,

443

1,70

5,91

3

73,3

12,0

17

78,9

15,4

76

As o

n

31.03

.05

868,2

42

43,4

40,7

21

6,786

,495

4,736

,867

18,88

0,430

2,07

1,20

2

681,6

78

1,449

,841

78,91

5,476

78,33

4,950

> H H H c ft o ts c c

Global Reports LLC




MEDIAID INC., USA



AnnuaTWeport 2006

MEDIAID INC., USABALANCE SHEET AS AT 31.03.2006

SCH 31.03.2006Rs.

31.03.2005Rs.

I. SOURCES OF FUNDS

SHARE HOLDERS FUNDCapitalReserves & Surplus


TOTAL

AB

CD

101,488,225(2,081,775)

--

99,406,450

43,630,000(4,871,765)

-1,480,336

40,238,571

II. APPLICATION OF FUNDS

FIXED ASSETS:Gross BlockLess Accumilated Depreciation

Net Block

INVESTMENTS

CURRENT ASSETS, LOANS & ADVANCES:InventoriesSundry DebtorsCash & Bank BalancesLoans & Advances

Less : Current Liabilities & ProvisionsLiabilitiesProvisionsDeferred Tax LiabilityNet Current Assets

F

G

15,710,3136,510,135

9,200,178

j 6,553,246

314,057,02465,133,768

". 2,074,18872,495,935

14,885,4661,191,024

13,694,442

1,529,624

81,986,58221,127,621

3,859,6178,364,245

H

453,760,915

370,107,889

83,653,026

115,338,065

90,323,560

25,014,505

TOTAL 99,406,450 40,238,571

Place : CaliforniaDate : 13* June 2006.

For MEDIAID INC., USA

sd/-MAHESH PATEL

CFO



a) LimitedSENSING TECHNOLOGY

MEDIAID INC., USAPROFIT & LOSS A/C FOR PERIOD ENDED 31.03.2006

INCOME

SalesOther Income

TOTAL

EXPENDITUREManufacturing ExpensesAdministrative & Selling ExpensesFinancial ExpensesDepreciation

TOTAL

Profit for the year before Tax

Profit After Tax

Profit brought forward from Previous Year

Profit available for appropriation


SCH 31.03.2006Rs.

I 227,388,976J 2,110

227,391,086

L [ 164,853,440M I 52,930,211N P' 693,596E ;- 5,286,899

223,764,146

3,626,940

3,626,940

(4,871,765)

(1,244,825)

(1,244,825)

31.03.2005Rs.

199,309,145-

199,309,145

155,125,33942,478,233

519,8801,007,796

199,131,248

177,897

177,897

(5,049,662)

(4,871,765)

(4,871,765)

For MEDIAID INC., USA

sd/-MAHESH PATEL

CFO

Place : CaliforniaDate: 13* June 2006.



Annual Rewort 2006

MEDIAID INC., USASCHEDULE TO BALANCE SHEET AS AT 31.03.2006


50,00,000 Equity Share of $!/- Each

Issued Capital22,50,000 Equity Share of $!/- Each(PY 10,00,000 Equity shares of $ II- each)

Subscribed Capital22,50,000 Equity Share of $!/- Each(PY 10,00,000 Equity shares of $ I/- each)

Paid-up Capital22,50,000 Equity Share of $!/- Each(PY 10,00,000 Equity shares of $ I/- each)

SCHEDULE B:

Reserves & SurplusGeneral Reserve:As per last Balance SheetAdd: Transfer from Profit & Loss Account

Foreign currency translation reserve

TOTAL

SCHEDULE C:Secured Loans:

31.03.2006(Rs.)

224,050,000

101,488,225

101,488,225

101,488,225

101,488,225

(1,244,825)

(1,244,825)

(836,950)

(2,081,775)

31.03.2005(Rs.)

224,050,000

43,630,000

43,630,000

43,630,000

43,630,000

(4,871,765)

(4,871,765)

(4,871,765)

SCHEDULE D:Un Secured Loans:

Others

SCHEDULE F:Investments:Unquoted Investment at Cost:

Medi Aid Inc.,GMBHMedi Aid Inc.,Dubai

5,124,4271,428,819

6,553,246

1,480,336

1,480,336

1,529,624

1,529,624

SCHEDULE G:Current Assets, Loans & Advances:

A. Inventories(Valued at lower of cost or market value as certifiedby the Management)

314,057,024 81,986,582



i= p t a ) •:JLi:m 1 1 e dSENSING TECHNOLOGY


B. Sundry Debtors(unsecured considered good, for which the companyholds no security other than the debtor'spersonal security)- < 6 months

TOTAL

C. CASH & BANK BALANCES:Cash at BankCash on Hand

TOTAL


Loans & Advances:(Unsecured considered good, receivablein cash or in kind or for value to be received)Others AdvancesStaff AdvanceDeposits - Security Deposits

TOTAL

SCHEDULE H:

Current Liabilities & Provisions:Current Liabilities :

Sundry Creditors for PurchasesSundry Creditors for ExpensesAdvance from OthersAdvance received from CustomersStatutory Dues Payable

TOTAL

SCHEDULE I:SALES

SALES

TOTAL

31.03.2006(Rs.)

65,133,768

65,133,768

2,021,98452,204

2,074,188

381,264,980

334,415,710631,931

7,704,01826,870,099

486,131

370,107,889

227,388,976

31.03.2005(Rs.)

21,127,621

21,127,621

3,859,617

3,859,617

106,973,820

71,909,95949,367536,609

72,495,935

8,066,74128,189

269,315

8,364,245

90,284,14025,58313,837

90,323,560

199,309,145

227,388,976 199,309,145

SCHEDULE J:OTHER INCOME:

Miscellaneous Income

TOTAL

2,110

2,110

75

Global Reports LLC



SCHEDULE K:

31.03.2006(Rs.)

31.03.2005(Rs.)

SCHEDULE L:A. MANUFACTURING EXPENSES:

Opening StockADD:Purchases

TOTAL ( A )

LESS: Closing Stock of Materials

TOTAL(B )

Total Material Cost(A-B)

B. FACTORY EXPENSES:Sales TaxProduction SuppliesTooling,setup,engr Cost

TOTAL (B)

Total Cost of Goods Sold (A + B)

SCHEDULE M:

A. ADMINISTRATIVE EXPENSES:Travelling & ConveyanceProfessional Consultancy ChargesPrinting & StationeryGeneral ExpensesPostage, Telephone & Fax ChargesOutside LabourRates & TaxesForeign Exchange Translation LossAdvertisement & Trade ShowsInsuranceRepairs & Maintenance -VehicleRentElectricity & Water ChargesOffice MaintenanceRepairs & Maintenance - OthersCommissionQuality Certification, Patent & FDA ExpensesMiscellaneous ExpensesMembership, Books & Periodicals

TOTAL (A)

81,986,582

396,436,249

478,422,831

314,057,024

314,057,024

164,365,807

164,853,440

78,909,386

154,619,651

233,529,037

81,986,582

81,986,582

151,542,455

38,914186,608262,111

487,633

41,972376,891

3,164,021

3,582,884

155,125,339

3,148,485949,738317,622

-; 1,097,875

1,013,19466,374

5,073,1442,338,6312,860,553429,465

3,265,592: 246,958

367,009246,610

2,490,4921,727,468

-184,364

25,823,574

1,949,213862,411285,527501,698933,108

1,686,245245,317

-2,978,8523,811,023119,055

1,977,639203,185440,560159,591

2,060,0131,132,67846,796156,130

19,549,041



opt c u 1 1 '$ f r "L r:m itemSENSING TECHNOLOGY


B. STAFF EXPENSES:Salaries & Allowances

TOTAL (B)

C: SELLING EXPENSES:Freight & Handling ChargesDuty

TOTAL ( C )

Total ( A + B + C )

SCHEDULE N:

FINANCIAL CHARGESInterest to OthersBank Charges

TOTAL

31.03.2006(Rs.)

21,817,910

21,817,910

4,934,935353,792

5,288,727

52,930,211

160,299533,297

693,596

31.03.2005(Rs.)

18,493,874

18,493,874

4,435,318

4,435,318

42,478,233

143,099376,781

519,880

77

Global Reports LLC

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Opt o Circuit s ( India f Limrt e<FSENSING TECHNOLOGY


Altron Industries Pvt. Ltd.,



Amttial Report 2006

ALTRON INDUSTRIES PRIVATE LIMITEDBALANCE SHEET AS AT 31.03.2006

SCH

I. SOURCES OF FUNDS

SHARE HOLDERS FUNDCapital AReserves & Surplus B

. LOAN FUNDSSecured Loans CUnsecured Loans • D

TOTAL

II. APPLICATION OF FUNDSFIXED ASSETS: E

Gross BlockLess Depreciation

Net Block

INVESTMENTS F

CURRENT ASSETS, LOANS & ADVANCES: GInventoriesSundry DebtorsCash & Bank BalancesLoans & Advances

Less : Current Liabilities & Provisions HLiabilitiesProvisions

Net Current Assets

TOTAL

31.03.2006 31.03.2005Rs. Rs.

702,000 702,0005,819,486 6,872,421

74,048 280,1032,572,773 2,592,773

9,168,307 10,447,297

10,826,726 10,826,7264,086,857 3,648,052

6,739,869 7,178,674

-

2,147,400 2,147,4001,334,293 2,234,845

812,595 1,325,2294,706,623 4,729,451

9,000,911 10,436,925

6,555,273 7,151,10217,200 17,200

2,428,438 3,268,623

9,168,307 10,447,297

For ALTRON INDUSTRIES PRIVATE LIMITED

sd/- sd/-MANJE GOWDA ALAMELU BHASKAR

Director Director


for ANAND SHENOY & CO.,

Chartered Accountants.,

sd/-G.C. SOMADAS

PartnerM.No.: 18636

Place: BangaloreDate : 13'''June 2006.



p to u 1 a

SENSING TECHNOLOGY

ALTRON INDUSTRIES PRIVATE LIMITEDPROFIT & LOSS A/C FOR PERIOD ENDED 31.03.2006

INCOMESalesOther IncomeIncrease/Decrease in W I P & FG

TOTAL

EXPENDITUREManufacturing ExpensesAdministrative & Selling ExpensesFinancial ExpensesDepreciation

TOTAL

Profit for the year before TaxProvision for Taxation

Profit After Tax

Prior Year Income/(Expenses)Profir After Prior Year Income/(Expenses)Profit brought forward from Previous YearProfit available for appropriation

Profir carried to Balance Sheet

SCH 31.03.2006Rs.

J 3,076,063K 1,228L

3,077,291

M 523,817N 3,149,769O 17,836E 438,805

4,130,227

(1,052,935)-

(1,052,935)

(1,052,935)6,338,4215,285,486

5,285,486

31.03.2005Rs.

7,875,775190,149

2,147,400

10,213,324

985,0018,405,765

65,578514,147

9,970,491

242,83317,200

225,633

8,690234,323

6,104,0986,338,421

6,338,421

For ALTRON INDUSTRIES PRIVATE LIMITED

sd/-MANJE GOWDA

Director

Place: BangaloreDate : 13"' June 2006.

sd/-ALAMELU BHASKAR

Director


for ANAND SHENOY & CO.,

Chartered Accountants.,

sd/-G.C. SOMADAS

PartnerM.No.: 18636



2 o ire

ALTRON INDUSTRIES PRIVATE LIMITEDSCHEDULE TO BALANCE SHEET AS AT 31.03.2006


100000 Equity Shares of Rs.100/- eachIssued Capital

7020 Equity Shares of Rs.100/- each fully paid upSubscribed Capital

7020 Equity Shares of Rs.100/- each fully paid upPaid-up Capital7020 Equity Shares of Rs. 1OO/- each fully paid up

SCHEDULE B:Reserves & Surplus

As per last Balance SheetProfit & Loss Account balance

TOTAL

Add: Subsidy received from Govt. Of Karnataka

TOTAL

SCHEDULE C:

Secured Loans:Term Loan From Banks & Financial Institutions


SCHEDULE F:Investments:


A. Inventories• (Valued at lower of cost or market value as certified

by the Management)

B. Sundry Debtors(unsecured considered good, for which the companyholds no security other than the debtor'spersonal security)

> Above 180 Days> Below 180 Days

TOTAL

31.03.2006(Rs.)

10,000,000

702,000

702,000

702,000

702,000

5,285,486

74,048

74,048

500,0002,072,773

2,572,773

2,147,400

1,334,293

31.03.2005(Rs.)

10,000,000

702,000

702,000

702,000

702,000

6,338,421

5,285,486

534,000

5,819,486

6,338,421

534,000

6,872,421

280,103

280,103

2,592,773

2,592,773

2,147,400

2,234,845

1,334,293 2,234,845



Op to c 1 r c u 11 s (I n a I a) Limit e ofSENSING TECHNOLOGY



TOTAL


Loans & Advances:(Unsecured considered good, receivablein cash or in kind or for value to be received)Advances to suppliers & servicesOthers AdvancesTDSDepositsPrepaid Expenses

TOTAL

SCHEDULE H:

31.03.2006(Rs.)

33,594113,071665,930

812,595

4,294,288

155,5242,963,463237,09744,979

1,305,560

4,706,623

31.03.2005(Rs.)

33,594624,899666,736

1,325,229

5,707,474

137,7882,963,463200,390122,250

1,305,560

4,729,451

Current Liabilities & Provisions:Current Liabilities :

Sundry Creditors for PurchasesInter Corporate DepositsSundry Creditors for Expenses

TOTAL

Provisions :Provision for Taxation

TOTAL

SCHEDULE J:SALES

TOTAL

669,3334,593,4301,292,510

; 6,555,273

F 17,200

17,200

3,076,063

3,076,063

683,0134,593,4301,874,659

7,151,102

17,200

17,200

7,875,775

7,875,775

SCHEDULE K:

OTHER INCOME:Dividend ReceivedInterest ReceivedOthers

TOTAL

SCHEDULE L:

1,228

1,228

81023,859165,480

190,149

Increase/Decrease in WIP & Finished GoodsOpening Stock of WIP

TOTAL( A )

2,147,400

2,147,400



Report 2006


LESS:Closing Stock of WIP

TOTAL( B )


31.03.2006(Rs.)

2,147,400

2,147,400

31.03.2005(Rs.)

2,147,400

2,147,400

2,147,400

SCHEDULE M:A. MANUFACTURING EXPENSES:

CONSUMPTION OF RAW MATERIALS & CONSUMABLESOpening StockADD:Purchases

TOTAL ( A )

LESS: Closing StockRaw Materials & Consumables

TOTAL(B )

Raw materials & Consumables Consumed(A-B)

B. FACTORY EXPENSES:Labour Charges & Job WorkPower & FuelEntry TaxInsuranceRepairs & Maintenance - Plant & MachineryRepairs & Maintenance - Electricals & OthersRepairs & Maintenance - BuildingR&D,Product Development ExpensesCustoms Duty & Supervision Charges

TOTAL (B)

Total (A+B)

SCHEDULE N:A. ADMINISTRATIVE EXPENSES:

Directors RemunerationTravelling & ConveyanceProfessional & Consultancy ChargesPrinting & StationeryGeneral ExpensesPostage, Telephone & Fax ChargesPenalties and InterestSecurity, Watch and WardRates & TaxesAuditor's RemunerationRentDonationRepairs & Maintenance - OthersMiscellaneous ExpensesMembership, Books & Periodicals

TOTAL (A)

26,873

26,873

51,42754,75546,938

8,63171,069

249,31928,86016,06925,00068,08027,00058,31710,176

121,950

121,950

26,873

200,909101,421

-5,540

25,84112,30847,689

-103,236

496,944

523,817

121,950

324,01124,89416,4073,196

76,51191,642326,390

-

863,051

985,001

595,000166,346198,692194,422

19,237131,09822,999

118,80927,16878,669

345,800

120,04087,28715,062

715,641 2,120,629



dilllt§!^l"ff"flia) LimiteSENSING TECHNOLOGY


B. STAFF EXPENSES:Salaries &. AllowancesStaff Welfare and Amenities

TOTAL (B)

C. SELLING EXPENSES:Packing MaterialsBusiness Promotion ExpensesTransportation

TOTAL( C )

Total ( A + B + C )

SCHEDULE O:

FINANCIAL CHARGESInterest on Term LoanBank Charges

TOTAL

31.03.2006(Rs.)

2,228,181163,109

2,391,290

20,743

22,095

42,838

3,149,769

12,3455,491

17,836

31.03.2005(Rs.)

5,956,347291,809

6,248,156

3,78633,194

36,980

8,405,765

62,2753,303

65,578

85

Global Reports LLC

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Global Reports LLC


SENSING TECHNOLOGY

Opto Circuits (India) Limited

ConsolidatedFinancial Statement



REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS OFOPTO CIRCUITS (INDIA) LIMITED

We have audited the attached consolidated balance sheet of OPTO CIRCUITS (INDIA) LIMITED and its subsidiaries(the Group)as at 31st March, 2006, and also the consolidated profit and loss account and the consolidated cash flowstatement for the year ended on that date,annexed thereto. These consolidated financial statements are the responsibilityof OPTO CIRCUITS (INDIA) LIMITED management and have been prepared by the management on the basis ofseparate financial statements and other financial information regarding components. Our responsibility is to express anopinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An au lit includes examining on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An ai dit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

We did not audit the financial statements of Mediaid Inc., the subsidiary, whose financial statements reflect the totalassets of Rs. 9.94 crores as against the Consolidated total assets of Rs. 161.64 crores as at 31st March, 2006 and the totalrevenues of Rs. 22.74 crores as against the Consolidated total revenue of Rs. 145.45 crores for the year ended on rhat date,in the consolidated financial statements.

We report that the consolidated financial statements have been prepared by OPTO CIRCUITS (INDIA) LIMITED'smanagement in accordance with the requirements of Accounting Standard 21, Consolidated Financial Statements, issuedby the Institute of Chartered Accountants of India, subject to the note on Eurocor GmbH, accounts as on 31.12.05 notconsidered for Consolidated Financial Statements.

Based on our audit, in our opinion and to the best of our information and according to the explanations given to us, theattached consolidated financial statements give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(a) in the case of the consolidated balance sheet, of the state of affairs of OPTO CIRCUITS (INDIA) LIMITED Group asat 31st March, 2006;

b) in the case of the consolidated profit and loss account, of the profit for the year ended on rhar date, and

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

For Anand Shenoy & CompanyChartered Accountants

G C SomadasPartner

M. No. 18636Place: BangaloreDate : 21" August 2006



A n n u a 1 R e p o r t 2006

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.CONSOLIDATED BALANCE SHEET AS ON 31-03-2006

I. SOURCES OF FUNDSSHARE HOLDERS FUNDCapitalReserves & Surplus


TOTAL

II. APPLICATION OF FUNDSFIXED ASSETS:Gross BlockLess Depreciation

Net BlockCapital work - in - progress

INVESTMENTS

CURRENT ASSETS, LOANS & ADVANCES:

InventoriesSundry DebtorsCash & Bank BalancesLoans & Advances

Less : Current Liabilities & ProvisionsLiabilitiesProvisionsDeferred Tax LiabilityNet Current AssetsMiscellaneous Expenditure(to the extent not written off or ajdusted)

TOTAL

Notes forming part of accountsSignificant Accounting Policies

SCH 31.03.2006Rs.

A 268,082,900B 573,270,560

C 757,849,228D 17,273,412

1,616,476,100

E378,599,848

88,503,356

290,096,49219,000

F 246,870,901

G

795,155,112741,695,438101,546,970150,047,643

1,788,445,163H

551,872,547166,513,354

4,413,2751,065,645,987

I 13,843,720

1,616,476,100

RS

31.03.2005Rs.

178,721,930428,641,413

337,392,85515,032,384

959,788,582

348,522,31270,303,658

278,218,6547,914,126

4,397,949

449,679,920441,812,559102,175,95972,996,731

1,066,665,169

308,489,95185,230,090

3,687,275669,257,853

-

959,788,582


sd/-VINOD RAMNANI


Place:BangaloreDate: 13'''June 2006.


sd/-ROSE CHINTAMANI

Company Secretary

As per our report of even dateFor AN AND SHENOY & CO.,


sd/-G.C. SOMADAS

PartnerM.No.: 18636




OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.CONSOLIDATED PROFIT & LOSS A/C FOR PERIOD ENDED 31.03.2006

INCOME

SalesOther Income

Increase/Decrease in W I P & FG

TOTAL

EXPENDITURE

Manufacturing ExpensesAdministrative & Selling Expenses

Financial ExpensesDepreciation

TOTAL

Profit for the year before TaxProvision for Taxation

Provision for FBTProvision for Deferred Tax

Profit After Tax

Add/(Less):Prior Year AdjustmentProfit After Prior Year Adjustments & Minority Interest

Profit brought forward from Previous Year

Profit available for appropriationTransfers to General Reserve

Proposed Dividend

Tax on Distributed Profits


SCH 31.03.2006Rs.

J 1,397,799,393K 44,404,024L 12,290,542

1,454,493,959

M 733,005,611

N 250,340,637

O 52,253,545

E 23,222,993

1,058,822,786

395,671,1737,000,0001,801,276

726,000

386,143,897

340,749386,484,646

271,361,940

657,846,58636,000,000

125,361,09518,220,912

478,264,579

31.03.2005Rs.

1,228,352,0576,784,820

(10,902,555)

1,224,234,322

743,410,103219,728,957

36,921,60917,832,395

1,017,893,064

206,341,258

5,705,000-

1,060,000

199,576,258

(1,812,200)197,764,058170,043,972

367,808,03019,500,000

67,833,7769,112,314

271,361,940


sd/-VINOD RAMNANI


Place:BangaloreDate : 13"'June 2006.


sd/-ROSE CHINTAMANI

Company Secretary

As per our report of even dateFor ANAND SHENOY & CO.,


sd/-G.C. SOMADAS

PartnerM.No.: 18636



AnnuaTReport 2QW5

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.CONSOLIDATED SCHEDULE TO BALANCE SHEET AS AT 31.03.2006

SCHEDULE A:Share Capital Authorised :50,000,000 Equity Share of Rs.10/- Each(PY 20,000,000 Equity Shares of Rs. 10/- each)Issued Capital27,070,190 Equity Shares of Rs.10/- each(PY 18,134,093 Equity Shares of Rs. 10/- each)(Out of the above- 1,239,831 Equity Shares ofRs. 10/- each fully paid-up allotted otherwisethan for cash 21,255,390 (RY12,319,293) Equity Shares of Rs.10/-Each fully paid up as Bonus sharesSubscribed Capital26,808,290 Equity Shares of Rs.10/- each(P.Y 17,872,193 Equity Shares of Rs. 10/- each)(Out of the above- 1,239,831 Equity Shares of Rs. 10/- each fully paid-upallotted otherwise than for cash 21,255,390 (RY12,319,293)Equity Shares of Rs.10/- Each fully paid up as Bonus sharesPaid-up Capital26,808,290 Equity Shares of Rs.10/- Each fully paid up(RY 17,872,193 Equity Shares of Rs. 10/- each)(Out of the above- 1,239,831 Equity Shares of Rs. 10/- each fully paid-upallotted otherwise than for cash21,255,390 (PY12,319,293) Equity Shares of Rs.10/- Each fully paid upas Bonus shares

SCHEDULE B:Reserves & SurplusAs per last Balance SheetAdditions during the yearShare Premium accountCapital Reserve as per- SCHEDULE PProfit & Loss Account balance as per - SCHEDULE QAdd: Capital Profit of Subsidary Company acquired during the yearAdd: Minority Interest

TOTAL

Less: Transfers during the year - Bonus Shares

Add: Subsidy received from Govt. Of Karnataka

TOTAL

* Altron Industries Private Limited

31.03.2006(Rs.)

500,000,000

270,701,900

268,082,900

268,082,900

268,082,900

52,481,49236,000,00033,867,23037,415,061

433,871,4416,338,421

61,157,885

661,131,530

89.360.970

571,770,560

1,500,000

573,270,560

31.03.2005(Rs.)

200,000,000

181,340,930

178,721,930

178,721,930

178,721,930

32,981,49219,500,00075,110,75020,700,614

266,106,120

53,985,957

468,384,933

41,243.520

427,141,413

1,500,000

428,641,413

SCHEDULE C:Secured Loans:Term Loan From Banks & Financial Institutions*Working Capiral Advances from Banks **Other Term Loans***

* Secured by hypothecation of Fixed Assets** Secured by hypothecation of Stocks & Book Debts*** Secured by hypothecation of Equipments & Vehicles

295,836,576453,268,246

8,744,406

757,849,228

68,635,900255,924,524

12,832,431

337,392,855



Op to Circuits (India) LimitedSENSING TECHNOLOGY

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.CONSOLIDATED SCHEDULE TO BALANCE SHEET AS AT 31.03.2006 (Contd.)


SCHEDULE F:Investments:Quoted Shares at Cost :Advanced Micronic Devices Limited-3153165 E.Shares of Rs.10/- Fully Paidup(Aggregate cost of Quoted investment Rs.52461254.Market Value Rs.132905905/- as on 31.3.2006 or ason last quoted date)Unquoted Investment at Cost:Medi Aid Inc.,Eurocor GMBHOthers


A. INVENTORIES(Valued at lower of cost or market value as certifiedby the Management)

B. SUNDRY DEBTORS(unsecured considered good, for which the companyholds no security other than the debtor'spersonal security)

> Above 180 Days> Below 180 Days

TOTAL


TOTAL

D. LOANS & ADVANCES:(Unsecured considered good, receivablein cash or in kind or for value to be received)

Advances to Suppliers & ServicesOthers AdvancesAdvances to Suppliers of Capital GoodsAdvances-Inter Corporate DepositsAdvance Income Tax 2004-05Advance Income Tax 2005-06Staff AdvanceDepositsPrepaid Expenses

TOTAL

31.03.2006(Rs.)

13,160,6384,112,774

17,273,412

2,648,425

6,755,046237,467,430

246,870,901

795,155,112

109,982,978631,712,460

741,695,438

77,648,68022,890,124

1,008,166

101,546,970

53,082,42976,756,445

1,827,5002,367,4254,766,7151,841,6027,029,7862,375,741

31.03.2005(Rs.)

14,018,5691,013,815

15,032,384

2,648,425

1,529,624

219.9004,397,949

449,679,920

37,415,640404,396,919

441,812,559

76,540,31625,442,000

193,643

102,175,959

16,933,69440,533,303

3,516,977

1,625,4231,373,9781,178,0587,059,419

775,879

150,047,643 72,996,731



A initial Report 2006


SCHEDULE H:Current Liabilities & Provisions:Current Liabilities :

• Sundry Creditors for PurchasesSundry Creditors for ExpensesSundry Creditors for Capital GoodsOther AdvancesInter Corporate DepositsAdvance received from CustomersStatutory Dues PayableUnclaimed Dividend - 2000-2001Unclaimed Dividend - 2001-2002Unclaimed Dividend - 2002-2003Unclaimed Dividend - 2003-2004Unclaimed Dividend - 2004-2005

TOTAL

Provisions :Provision for DividendProvision for Dividend TaxProvision for InterestProvision for FBTProvision for Taxation 04-05Provision for Taxation 05-06Provision for Wealth Tax

TOTAL

SCHEDULE I:Preliminary Expenses(to the extent not written off or adjusted)

SCHEDULE;:SALESSALES - ExportsSALES - D T ASALES - Commission

TOTAL

SCHEDULE K:OTHER INCOME:

Dividend ReceivedInterest receivedDifference in Exchange RateProfit on Sale of AssetMiscellaneous Income

TOTAL

SCHEDULE L:Increase/Decrease in WIP & Finished GoodsOpening Stock of WIPOpening Stock of Finished Goods

TOTAL( A )

31.03.2006(Rs.)

934,087,834431,013,931

32,697,628

1,397,799,393

15,246,726

31.03.2005(Rs.)

328,835,87326,849,7185,608,706

124,290,6781,732,500

50,670,21111,973,725

70,111104,297200,258197,041

1,339,429

551,872,547

125,361,09524,009,8671,423,648417,544

2,500,00012,777,200

24,000

166,513,354

250,226,26119,951,8783,700,5597,514,997

-17,418,3418,241,942

70,411104,297201,816

1,059,449-

308,489,951

67,833,7769,112,314_

_

2,555,0005,705,000

24,000

85,230,090

13,843,72013,843,720

834,352,921363,062,22230,936,914

1,228,352,057

53,0674,502,0688,255,293

31,591,4862,110

44,404,024

3,203,5632,994,419

--

586,838

6,784,820

12,951,38111,050,500

15,246,726 24,001,881

93

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ircuits (India) LimitedSENSING TECHNOLOGY


LESS:Closing Stock of WIPClosing Stock of Finished Goods

TOTAL( B )


SCHEDULE M:A. MANUFACTURING EXPENSES:CONSUMPTION OF RAW MATERIALS & CONSUMABLES

Opening StockADD:Purchase of Raw Materials & Consumables

TOTAL( A )

LESS: Closing StockRaw Materials & Consumables TOTAL ( B )Raw materials & Consumables Consumed(A-B)

B. FACTORY EXPENSES:Labour Charges & Job WorkPower & FuelTooling ChargesInsuranceRepairs & Maintenance - Plant & MachineryRepairs & Maintenance - Electricals & OthersRepairs & Maintenance - BuildingR&D,Product Development ExpensesDifference in ExchangeFreight, Handling, Octroi and OthersWarranty PurchasesSales TaxService ChargesSpares - materialsProduction SuppliesCustoms Duty & Supervision Charges

TOTAL (B)

TOTAL (A + B)

SCHEDULE N:A. ADMINISTRATIVE EXPENSES:

Advertisement & Trade ShowsAGM ExpensesAuditor's RemunarationBad Debts Written offCommissionDirectors RemunerationDiscount AllowedDonationElectricity & Water ChargesForeign Exchange Translation LossGeneral ExpensesInsuranceLoss on sale of Asset

31.03.2006(Rs.)

27,537,268

27,537,268

12,290,542

31-03.2005(Rs.)

13,099,326

13,099,326

(10,902,555)

?436,5SO,578

1,008,490,803

,1,445,071,381

767,617,844677,453,537

10,754,3297,776,405309,787

5,071,2331,072,229917,426 :905,126

1,623,2591,289,0866,977,6581,541,815

38,91412,256,8654,706,205186,608125,129

55,552,074

733,005,611

4,826,79430,99141,500

-521,233

...... 10,125,0003,300,247

67,057968,743

; 5,073,144• 2,394,3142,860,553

;. 2,944,108

280,870,209

850,769,274

1,131,639,483

436,580,594695,058,889

8,297,2096,411,7754,894,4355,265,067908,535866,87272,553933,066

---

41,97210,592,7829,032,259376,891657,798

48,351,214

743,410,103

4,082,53355,205691,004

1,544,5735,496,4689,000,0002,529,866186,232833,896

-2,282,0293,811,023639,757

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Annual Report 2006


Membership, Books & PeriodicalsMiscellaneous ExpensesOffice MaintenanceOutside LabourPenalties and InterestPostage, Telephone & Fax ChargesPremlinary expenses Written offPrinting & StationeryProfessional Consultancy ChargesQuality Certification, Patent & FDA ExpensesRates & TaxesRentRepairs & Maintenance - OthersRepairs & Maintenance - VehicleSecurity ChargesSeminar ExpensesShare Transfer ChargesTenderTravelling & Conveyance

TOTAL (A)

B. STAFF EXPENSES:Salaries & AllowancesStaff Welfare and Aminities

TOTAL (B)

C. SELLING EXPENSES:Fteight & Handling ChargesDutyDifference in ExchangePacking MaterialsClearing ChargesBusiness Promotion ExpensesTransportation

TOTAL ( C )

TOTAL (A+B + C )

31.03.2006(Rs.)

566,704-

3,343,7441,013,194

249,31910,114,550

-6,853,7318,944,7761,727,4682,155,1928,252,7071,507,328

429,465291,162997,124124,295308,877

23,440,880

113,074,200

93,797,51812,918,819

106,716,337

17,893,758353,792

-1,615,7681,837,2998,333,279

516,204

30,550,100

250,340,637

31.03.2005(Rs.)

292,69046,796

2,662,7351,686,243

-8,546,456

18,0005,498,0229,625,2541,132,678

642,8436,766,2702,507,1175,268,026

226,0101,379,067

484,477329,080

19,895,108

98,159,458

83,525,4065,987,795

89,513,201

11,939,0066,554,6314,304,8461,760,9791,370,4905,997,629

128,717

32,056,298

219,728,957

SCHEDULE O:FINANCIAL CHARGES

Interest - Working CapitalInterest on Term LoanInterest to OthersBank Charges

TOTAL

32,390,3866,348,1861,021,937

12,493,036

20,639,2817,093,6101,332,4797,856,239

52,253,545 36,921,609



DptoCTFcults (India) LimitedSENSING TECHNOLOGY


31.03.2006(Rs.)

31.03.2005(Rs.)

SCHEDULE P:CAPITAL RESERVE:

ADVANCED MICRONIC DEVICES LIMITED - (A)Share CapitalGeneral ReserveProfit and loss account balanceShare Premium

TOTAL

Less: Miscellaneous Expenses ro the extent not written off

NETWORTHLess: Minority InterestNet of Minority Interest- (a)Less: Investment by Parent Company - (b)Capital Reserve carried ro Consolidared Reserves & Surplus- (a) - (b)

52,811,0005,500,000

40,352,47777,554,261

176,217,738

(24,423,534)

151,794,204(61,157,885)

90,636,31952,461,25438,175,065

52,811,0005,500,000

10,127,58577,554,261

145,992,846

(11,999,406)

133,993,440(53,985,957)

80,007,48352,461,25427,546,229

MEDIAID INC., USA - (B)Share CapitalProfit and loss account balanceForeign currency translation reserve

TOTAL

NETWORTHLess: Investment by Parent CompanyCapital Reserve carried to Consolidated Reserves & Surplus

101,488,225(1,244,826)(836,950)

99,406,449

99,406,449101,488,225(2,081,776)

43,630,000(4,871,765)

38,758,235

38,758,23545,603,850(6,845,615)

ALTRON INDUSTRIES PRIVATE LIMITED - ©Share Capital 702,000Profit and loss account balance 5,285,486Subsidy 534,000Total 6,521,486NETWORTH 6,521,486Less: Investment by Parent Company . 5,199,714Capital Reserve carried to Consolidated Reserves & Surplus ; 1,321,772

Total Capital Reserve carried to Consolidated Reserves & Surplus - (A + B + C) 37,415,061

SCHEDULE Q:PROFIT AND LOSS ACCOUNT BALANCE

Profit and loss account balance as per Consolidated Profit & Loss Account 478,264,579Less: Profit and loss account balance of Advanced Micronic Devices Limited 40,352,477Less: Profit and loss account balance of Mediaid Inc., USA (1,244,825)Less: Profit and loss account balance of Altron Industries Private Limited 5,285,486Profit and loss account balance carried to Consolidated Reserves and Surplus 433,871,441

20,700,614

271,361,94010,127,585(4,871,765)

266,106,120


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Annual Report 2006

NOTES TO THE CONSOLIDATED BALANCE SHEET:

The consolidated financial statements have been prepared in accordance with the general principals of Accounting standards 21"Consolidated Financial Statements" issued by the ICAI.

The Subsidiaries (which along with Opto Circuits (India) Limited, the Holding Company ) considered in the preparation of theseconsolidated financial statements are:

12

3

Name of the Company

Advanced Micronic Devices Limited

Mediaid Inc., USA

Akron Industries Pvt Limited

Country ofIncorporation

India

USA

India

Percentage ofownership interest

as at 31.03.2006

59.71%

100%

100%


as at 31.03.2005

W\',

100',?

NIL

Further the subsidiaries not considered in preparation of these financial statements are:

Name of the Company

1 EurocorGmbH.,

Country ofIncorporation

Germany


as at 3 1.03. 2006

100%


as at 3 1.03. 2005

NIL

The financial statements of Eurocor are prepared as of December each year. Eurocor GmbH., was acquired by Opto Circuits (India) Ltd., duringJanuary 2006, consequently the Financial Statement of Eurocor for the period ended December 2005 have not been considered for consolidation.

4 The financial statements of all subsidiaries, considered in the consolidated accounts, are drawn up to 31st March.

5 The total amount of accumulated depreciation as per consolidated accounts is Rs.88,503,356/- out of which an amount of Rs.10,596,992/- pertaining to Depreciation calculated by Written Down Value method, (which constitutes 11.97% of the total accumulateddepreciation).

6. Stock Reserve on inventories held by the subsidiaries have not been considered while preparing Consolidated Financial Statements.

7. Deferred Tax Asset/Liability has not been recognized in the holding companies accounts as there is a Deferred Tax Asset on the openingtiming difference for the year ending 31" March 2002 of the depreciation charged on the Fixed Assets and there is no virtual certaintysupported by convincing evidence that sufficient future taxable income will be available against which such Deierred Tax Asset can berealized.Deferred Tax liability in case of Advanced Micronic Devices Limited, the subsidiary, as at 31 March 2006 represents the tax effect of temporarydifference substantially on account of WDV of fixed assets on account of differing depreciation methods/rates and other timing differencesarising during the accounting year. Accumulated net deferred tax liability arising out of timing differences of the earlier years has not beenrecognized.

Deferred tax liability as at 31 March 2006 Comprises ofTiming difference on account of depreciation :Deferred Tax liabilityOther timing differences-Deferred Tax AssetNet Deferred Tax Liability

31.03.2006(Rs.)

7,26,000

NIL(7,26,000)

31.03.2005(Rs.)

1 0,60,000

NIL(10,60,000)

SIGNIFICANT ACCOUNTING POLICIES

Convention:To prepare financial statements in accordance with the applicable accounting standards in India. A summary of important accounting policies,adopted and applied by the Holding Company which have been applied consistently, is set out below.

Basis of AccountingTo prepare financial statements in accordance with the historical cost convention modified by revaluation of certain fixed assets as and whenundertaken as detailed below.




NOTES TO THE CONSOLIDATED BALANCE SHEET:

1) Fixed assetsFixed assets are stated at cost, less accumulated depreciation. Cost price includes purchase price, duties, levies and any other cost relating to theacquisition and installation of the assets. Interest and financing charges on borrowed funds, if any, used to finance the acquisition of fixed assets,until the date the assets are ready for use are capitalized and included in the cost of the asset.

2) DepreciationDepreciation is provided on the straight line method at the rates specified under schedule XIV of the Companies Act, 1956 and on proratabasis on the additions made during the year. However, in case of Mcdiaid Inc., USA and Altron Industries Private Limited, the subsidiaries,depreciation is provided on written down value basis.

3) Revenue RecognitionRevenue from sale of products are recognized on dispatch of goods to customers and are net of sales tax, discounts, rebates for priceadjustments, rejections and shortage in transit.

4) InventoriesValuation of inventories is at the lower of cost or marker value as certified by the management.

5) Deferred TaxDeferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying valueof the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognizedonly if there is virtual certainty of realization. Other deferred tax assets are recognized if there is reasonable certainty of realization. The effecton Deferred Tax Asset & Liabilities of a change in rates is recognized in the income starement in the period of enactment of the change.

6) Foreign currency translationsForeign currency transaction recorded at the rates of exchange prevailing on the date of transaction. Foreign currency of assets & liabilities andrealized gains and losses on foreign exchange transactions, other than those relating to fixed assets are recognized in the profit and loss account.Exchange difference arising on liabiliries incurred for the purpose of acquiring fixed assets are adjusted in the carrying value of the respectivefixed assets.

While translating the financial statements of non integral foreign subsidiaries the exchange difference arising on translarion of assets /liabilities is disclosed as foreign currency rranslation reserve.

7) ProvisionsProvision for income tax is provided by the company, after considering the exemption U/s 10B of the Income Tax Act, available to the HoldingCompany.

8) InvestmentsInvestments other than investments in associates are valued at cost.

As per our report of even dateFor & on behalf of the Board of Directors For ANAND SHENOY & CO.,


sd/- . sd/- sd/- sd/-VINOD RAMNANI USHA RAMNANI ROSE CHJNTAMANI G.C.SOMADAS

Chairman & Executive Director Company Secretary PartnerManaging Director M.No. : 18636

Place:BangalorcDate : 13* June 2006.



Annual Report 2006

OPTO CIRCUITS (INDIA) LIMITED, BANGALORE.CONSOLIDATED CASH FLOW STATEMENT AS ON 31.03.2006

31.03.2006Rs.

31.03.2005Rs.

Cash flow from operating activitiesNet profit before tax & extraordinary itemsAdjustments for non operating items

(Amortisation and other non cash items)Depreciation & other non cash itemsDividend received for the yearInterest paid on borrowingsInterest received on Fixed DepositProfit on Sale of Fixed Assets

Adjustments for working capital(Increase)/Decrease in inventories(Increase)/Decrease in loans & advances(Increase)/Decrease in sundry debtorsIncrease/(Decrease) in current liabilities

Cash operating profit/(loss) before income taxIncome tax

Cash flow from operating activities before

extraordinary itemsExtraordinary items Previous year transaction

Net cash flow from operationsII. Cash Flow From Investing Activities

Dividend IncomeInterest received on Fixed DepositSale of Fixed AssetsProceeds from sale of investments(net)Total inflow of cash from investing activitiesPurchase of Fixed Assets

Product development expenses

Net cash flow from investing activities

III.Cash Flow From Financing ActivitiesProceeds from long term borrowingsNet proceeds from short term borrowings

Inflow of cashInterest paid on borrowingsDividend paidCorporate dividend tax

Net cash flow from financing activities

Total increase in cash & cash equivalents during the year

Cash & cash equivalents at the beginning of the year

Cash & cash equivalents at the end of the year

395,671,173

23,222,994(53,067)

52,253,546(4,502,068)

(31,591,4

435,001,090

(345,475,192)(77,050,912)

(299,882,880)325,391,86037,983,966(4,472,724)

33,511,242

(247,375,755)

422,697,400

422,697,400(52,253,545)

(125,361,095)(18,220,913)226,861,847

(628,990)

102,175,959

206,341,258

17,832,395(50,398)

36,921,609(2,994,419)

258,050,445

(181,959,323)(24,288,952)(42,802,858)145,716,108154,715,420(6,765,000)

147,950,420

(13,626,324)19,884,918

53,067(3,098,192)46,811,692

(242,472,952)(198,706,385)(34,825,650)(13,843,720)

(20,817,120)127,133,300

50,3982,994,4192,307,38444,045,32649,397,527

(44,331,268)

5,066,259

6,699,0546,699,054

(36,921,609)(67,833,776)

(9,112,314)

(107,168,645)

25,030,914

77,145,045

101,546,970 102,175,959

t100!Global Reports LLC



noticeRegd Office: No 83, Electronics City, Hosur Road, Bangalore-560 100.

Notice is here by given that the !4thAnnual General Meeting of theMembers of OPTO Circuits (India) Limited will be held on Thursdaythe 28" September 2006 at 11.00 am at The Grand Ashok, KumaraKrupa, High Grounds, Bangalore-560001.

ORDINARY BUSINESS:

1. To receive, consider and adopt the Balance Sheet as at 31' March2006 and the Profit and Loss account for the year ended on thatdate and the Report of Directors and Auditors there on.

2. To Declare a Dividend.

3. To appoint a Director in place of Mr. Jayesh C Patel, who retiresby rotation and being eligible, offers himself for re-election.

4. To appoint a Director in place of Mr. Thomas Dietiker, whoretires by rotation and being eligible, offers himself for re-election.

5. To appoint a Director in place of Dr. Suleman Adam Merchant,who retires by rotation and being eligible, offers himself for re-election.

6. To appoint M/s Anand Shenoy and Company retiring Auditorsof the Company, as Auditors, who hold office until theconclusion of the next Annual General Meeting and fix theirremuneration.

SPECIAL BUSINESS

7. To consider and if thought fit to pass with or with outmodification the following Resolution as an ORDINARYRESOLUTION.

"RESOLVED THAT, Mr. V Balasubramaniam, who was co-opted as an additional Director of the Company by the Board ofDirectors on 31 December 2005 under section 260 of theCompanies Act, 1956 and who holds office up to the date of theforth coming Annual General Meeting of the Company, beingeligible for re-appointment and in respect of whom theCompany has received a notice in writing from some membersproposing his candidature for the office of Director pursuant toprovisions of Section 257 of the Companies Act, 1956 be and ishereby appointed as Director of the Company subject toretirement by rotation."

8. To consider and if thought .fit to pass with or with outmodification the following Resolution as an ORDINARYRESOLUTION.

forth coming Annual General Meeting of the Company, beingeligible for re-appointment and in respect of whom theCompany has received a notice in writing from some membersproposing his candidature for the office of Director pursuant toprovisions of Section 257 of the Companies Act, 1956 be and ishereby appointed as Director of the Company subject toretirement by rotation."


"RESOLVED THAT Mr. RajKumar Raisinghani, who was co-opted as an additional Director of the Company by the Board ofDirectors on 31 December 2005 under section 260 of theCompanies Act, 1956 and who holds office up to the date of theforth coming Annual General Meeting of the Company, beingeligible for re-appointment and in respect of whom theCompany has received a notice in writing from some membersproposing his candidature for the office of Ditector pursuant toprovisions of Section 257 of the Companies Act, 1956 be and ishereby appointed as Director of the Company subject toretirement by rotation."

10. To consider and, if thought fit, to pass with or withoutmodification(s), the following resolution as a SPECIALRESOLUTION:

"RESOLVED THAT pursuant to the provisions of Section94(1) (a) of the Companies Act, 1956, consent of the Companybe and is hereby accorded for increasing the Authorised ShareCapital of the Company from the present Rs 50.00 Crores to Rs65.00 Crores by additionally creating 1,50,00,000, Equityshares of Rs.10/- each ranking pari passu with the existingequity shares of the Company in all respects.

RESOLVED THAT pursuant to the provisions of Section 16 ofthe Companies Act, 1956, the existing Clause V of theMemorandum of Association of the Company be amended andbe substituted with the following new Clause V thereof:

'(a). The Authorized Share Capital of the Company is Rs. 65.00crores (Rupees Sixty Five Crores Only) divided into 6,50,00,000(Six crores Fifty lakhs only) equity shares of Rs. 10/- each Rs.10/-(Rupees Ten only) each."

11 To consider and, if thought fit, to pass, with or withoutmodification (s), the following resolution as a SPECIALRESOLUTION:

"RESOLVED THAT, Dr. Anvay Mulay, who was co-opted asan additional Director of the Company by the Board ofDirectors on 31 December 2005 under section 260 of theCompanies Act, 1956 and who holds office upto the date of the

"RESOLVED THAT pursuant to the provisions of Section 31of the Companies Act 1956 and other applicable provisions, ifany, of the Companies Act, 1956 the existing Article Clause V

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Annual Report 2006

of the Articles of Association of the Company be and is herebysubstituted by the following new Article Clause V

(a). The Authorized Share Capital of the Company is Rs. 65.00crores (Rupees Sixty Five Crores Only) divided into 6,50,00,000(Six crores Fifty lakhs only) equity shares of Rs. 10/- each Rs.10/-(Rupees Ten only)each.


"RESOLVED THAT

a) Subject to the guidelines issued by the Securities and Exchangethe Board of India and subject to such approvals as may berequired by the Reserve Bank of India under Foreign ExchangeManagement Act 1999 for allotment and issue of new equityshares to the Non-resident members and subject to the consentof Financial Institutions, as may be applicable, and also subjectto such terms, conditions, alterations, modifications, changesand variations as may be specified while according suchapprovals, which the Board of Directors of the Company(hereinafter referred to a 'Board') be and is hereby authorised toaccept, if it thinks fit, the consent of the company be and ishereby accorded to capitalize part of the amount standing to thecredit of Reserves and Surplus Account in the books of theCompany as on 31st March 2006 for an aggregate amount of Rs30,80,82,9007- (Thirty crores Eighty lakhs Eight twoThousand Nine Hundred only) and such sum be set free fordistribution among the holders of existing fully paid equityshares of Rs. 10/- each of the Company, whose names will appearin the register of members on the company on a date to bedecided by the Board in that behalf as Record Date, as anincrease of the amount of share capital of the Company held byeach such member and not as income or in lieu of dividendcredited as bonus shares in the proportion of One new equityshare for every One existing fully paid equity shares held.

b) the above proposal will be subject to the following terms andconditions;

(i) new equity shares to be allotted as bonus shares will be subjectto the terms of Memorandum and Articles of Association of theCompany.

(ii) the new equity shares shall rank pari passu in all respects withand carry the same rights as the exiting fully paid-up equityshares of the Company and not withstanding the date or dates ofallotment thereof shall be entitled to participate in full in anydividend to be declared in respect of the financial year in whichthe allotment of the new equity shares pursuant to thisresolution is made;

(iii) no Letter of Allotment will be issued by the Company in respectof the new equity shares. However, the equity share certificatein respect thereof will be ready for delivery to the allotters withinone month from the date of allotment thereof; and for thoseshareholders who are holding the shares in dematerialized formtheir respective demat account will be credited with Bonusshares within one month from the date of allotment.

(iv) if as a result of implementation of this resolution, any memberbecomes entitled to a fraction of new equity shares to be allottedas bonus shares, the company shall not issue any certificate orcoupon in respect of such fractional shares, but the total numberof such new equity shares representing such fractions shall beallotted by the Board to a nominee to be selected by the Boardwho would hold them as trustee for the equity shareholders who

would have been entitled to such fractions, in case the same wereissued. Such nominee will as soon as possible, sell such equityshares allotted to him at the prevailing market rate and the netproceeds of such shares after adjusting the cost and expenses inrespect thereof be distributed among such members who areentitled to such fractions in the proportion of their respectiveholding and allotment of fractions thereof;

(v) no allotment of bonus shares or distribution of proceeds inrespect of fractions to the non-resident Indian members will bemade till the approval of Reserve Bank of India is obtained bythe Company if required.

RESOLVED FURTHER THAT for the purpose of givingeffect to this resolution, the Board be and is hereby authorised:

(i) to do all such acts, deeds and things whatsoever includingsettling any questions, doubt or difficulty that may arise withregard to, or in relation to, the issue or allotment of bonusshares;

(ii) to accept on behalf of the Company any conditions,modifications relating to the issue of bonus shares prescribed bythe Reserve Bank of India or any other authority and which theBoard in its discretion thinks fit and proper."

13. To consider and if thought fit, to pass with or withoutmodifications the following resolution as a Special resolution:

"RESOLVED that pursuant to the provisions of Section 372Aand all other applicable provisions, if any, of the Companies Act,1956 (including any amendment to or re-enactment thereof)and subject to such sanction, permissions and clearances as mayrequired, the consent of the Company be and is hereby accordedto the Board of Directors of the Company for making a loan, oran investment by the Company of a sum not exceeding Rs.250Crores by way of subscription and/or purchase of equity shares inany company having synergy of business with the Companynotwithstanding that such loan or investment exceeds theprescribed limits by law for the time in force."

"RESOLVED FURTHER that for the purpose of giving effect tothe above Resolution, the Board be and is hereby authorised totake all such actions, to do all such acts, deeds, matters andthings as may be necessary or desirable and to settle anyquestion or difficulty that may arise in this matter."

By order of the Boardfor OPTO CIRCUITS (INDIA) LTD.,

Date: 21 August 2006Place: Bangalore

VINOD RAMNANJChairman & Managing Director

Regd. Office : No. 83, Electronics CityHosur Road, Bangalore-560 100.

1. A MEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE INSTEAD OF HIMSELF ANDTHE PROXY NEED NOT BE A MEMBER OF THECOMPANY.

2. PROXY IN ORDER TO BE EFFECTIVE DULYCOMPLETED AND STAMPED PROXY FORM, MUSTREACH THE REGISTERED OFFICE OF THE COMPANYNOT LESS THAN 48 HOURS BEFORE THE TIME FORCOMMENCEMENT OF THE AFORESAID MEETING.

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3. The register of Members and share transfer books of the Company will remain closed from 22" September 2006 to 28" September 2006 (bothdays inclusive).

4. The Dividend for the year ended 31st March 2006 as recommended by the Board, if sanctioned at the Meeting will be paid within the time limit,to those members whose names appear in the company's Register of Members on 28" September 2006 In respect of shares held in electronic formthe dividend will be payable on the basis of beneficial ownership as per the details furnished by the National Securities Depository Limited andCentral Depository Services of India for this purpose.

5. Members desiring any information as regards accounts are requested to write to the company at an early date so as to enable the management tokeep the information teady

6. Notify immediately any change of address to Company/ Registrars (for shares held in physical form) and Depository Participants (for shares heldin dematerialized form).

7. It is suggested for the convenience of Members that they inform the Company about their Bank Account Numbers, Name of Bank to enableprinting of these particulars on the Dividend Warrant as a measure of abundant caution to minimize loss due to warrants falling into improperhands through forgery and fraud.

8. Members / Proxies should bring the Attendance Slip sent herewith duly filled for attending the Meeting.9. The proxy Form and Attendance slip are attached to the Annual Report.10. Members are requested to address their correspondence, including Share Transfer matters and Change of Address to: KARVY

COMPUTERSHARE PRIVATE LIMITED,Karvy House, No45, Avenue 4,.Street No 1, Banjara Hills, Hyderabad-560 034, E-Mail: mailmanager(5)karvy.com

ANNEXURE TO THE NOTICE:

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OFTHE COMPANIES ACT, 1956.

In conformity with the provision of Section 173(2) of the Companies Act 1956 the following explanatory statement sets out all material factsrelating to the Special business mentioned in the accompanying notice and should be taken as forming part of the Notice.

ITEMNOs7,8&9

Brief resume

Nature ofexpertise

Directorship inother companies

Committeememberships

Shareholding inthe company

Mr. V Balasubramaniatn,

Mr.VBalasubramaniam, agedabout 48 years, with over 25 yearsof work experience inInternational markets BalaSubramaniam has successfullystarted and managed a softwarecompany

He is an MBA from SymbiosisInst i tute of BusinessManagement, Pune & is amember of CPA & FCMA.company will benefits from hisOperational & ResourceManagement skills.

3

2

4000*

Dr. Anvay Mulay,

r

Dr. Anvay Mulay, aged about45 years, is a Cardio VascularThoracic surgeon (McH), fromMumbai University. He iscontributing to this specializedheld since 1 2 years.

He runs his own private clinic &is affiliated to hospitals likeDinnath Hospital, DindayalHospital & Ruby Hospital.Besides, he has also worked in theUS & UK before he settled inIndia. He brings to the table hisvast medical acumen

1

2

NIL

Mr.RajKumar Raisinghani,

Mr. Raj Kumar Raisinghani,aged about 53 years, with adiploma in ElectricalEngineering, is an Industrialist.

He has his own manufacturingunit, where he manufacturesElectrical goods since 25 years.He was working in a largemanufacturing unit in Mumbai,prior to venturing out into hisbusiness. He has vastexperience in business

1

1

4286*

* as on 31st March 2006

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Annual Report 2006

Considering the working knowledge, qualification andexperience it would be in the interest of the Company toappoint, Mr. V Balasubramaniam, Dr. Anvay Mulay, Mr.Rajkumar Raisinghani, as Directors of the Company.

The Board Commends the Resolution for shareholders approval.

Except, Mr. V Balasubramaniam, Dr. Anvay Mulay and Mr. RajKumar Raisinghani, no other Director of the Company isconcerned or interested in the Resolution

The Directors recommend the resolution for approval of themembers.

I t e m N o l O & l l

As per the provisions of Section 94 of the Companies Act, 1956,Increase in the Authorised Share Capital requires the approval ofthe members. Consequent to increase in Authorised ShareCapital, existing Capital Clause of Memorandum of Associationand also the relavant Article in the Articles of Associationrequires amendments which also requires approval of themembers in General Meeting.


Item No 13

There is immense potential for the Company to take overcompanies who are in the same or allied business such as yourcompany. Substantial growth in a short term is possible onlythrough takeovers, mergers, and tie-ups through strategicinvestments, both in India and in overseas markets. This processwill require that the Company undertake to buy, subscribe toshares and lend moneis in India and overseas, which could be inexecess of the mandated limits as laid down in the CompaniesAct 1956. This resolution is an enabling resolution so as topetmit the Board of Directors to look and assess viable projectsthat the Company can invest in the future so as to inctease theshareholders wealth by qualitative acquisitions.

Section 372(A) of the Companies Act 1956, requires that theshareholders' consent be taken for investment in shares of othercompanies or loans to other companies, in excess of theprescribed limits.

None of the directors is in any way concerned or interested in theresolution.


Item No 12

The Directors propose to capitalize a sum of Rs 30,80,82,900.7-((Thirty crores Eighty lakhs Eight two Thousand NineHundred only) to be applied for the issue of new equity sharesof Rs.10/- each credited as fully paid up bonus shares. Newequity shares will be issued and allotted as bonus equity shares inthe proportion of one such new equity share credited as fullypaid-up for every one existing fully paid equity shares asproposed in the resolution. The said bonus equity shares shallrank parri passu in all respects with the existing equity shares,and shall also be subject to Memorandum and Articles ofAssociation of the Company.

All the Directors of the Company may be considered to beinterested in the proposed resolution to the extent of theirentitlements to bonus shares.

Date: 2l" August 2006Place: Bangalore

By order of the Boardfor OPTO CIRCUITS (INDIA) LTD.,

VINOD RAMNANIChairman & Managing Director

Regd. Office : No. 83, Electronics CityHosur Road, Bangalore-560 100.


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OPTO CIRCUITS (INDIA) LIMITEDRegistered Office : No 83, Electronics City, Hosur Road, Bangalore-560 100.

Registered Folio No No. of shares

Or

DP ID No

Client ID No

of in the district of..

hereby appoint of

in the district of.

or failing him ofin the district of as my/our proxy to vote for me/us on my/our behalf at the 14" ANNUAL GENERAL MEETING of the Company tobe held on 28th September, 2006 and at any adjournment thereof.

Signed this day of 2006

Signature

Note - This form in order to be effective should be duly stamped, completed and signed and must be deposited at theRegistered Office of the Company, not less than 48 hours before the meeting.

OPTO CIRCUITS (INDIA) LIMITED .Registered Office : No 83, Electronics City, Hosur Road, Bangalore-560 100. ^

^AGM 28" September 2006 ' (/}

Registered Folio No ..................................................................... No. of shares ................................................................... *"Or UDP ID No ................................................................................... J7

Client ID No ............................................................................... "

PI certify that I am a Registered Shareholder/Proxy for the Registered Shareholder of the Company *^

I Hereby record my presence at the 14* ANNUAL GENERAL MEETING of the Company at THE GRAND ASHOK, KUMAR KRUPA WHIGH GROUNDS, BANGALORE - 5 60 00 1 . H

HMember's / Proxy's name in Block Letters ............................................................................................................................................ .

Member's / Proxy's Signature

Note - Please fill in this Attendance Slip and hand it over at the Entrance of the Meeting Hall.

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Op to C ir c u its (I' n d I a) LimitedSENSING TECHNOLOGY

DISCLAIMER ANDLOTUS BYLINE

CAUTIONARY STATEMENT :

Statements made in this Annual Report describing the Company'sobjectives, projections, estimates, expectations may be "Forwardlooking statements" within the meaning of applicable securities laws& regulations. Actual results could differ from those expressed orimplied. Important factors that could make a difference to theCompany's operations include economic conditions affecting demandsupply and price conditions in the domestic & overseas markets inwhich the company operates, changes in the government regulations,tax laws & other statutes & other incidental factors.

LOTUS KNOWLWEALTH

Concept, Research and Content by Lotus Knowlwealth Pvt.Ltd.E-mail: [email protected]

Tel.: +91-22-32970259

Processed & Printed byParamount Color Graphics

E-mail : print(«paramountcolor.com Tel : + 91-HO-231 00 666

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OPTO CIRCUITS (INDIA) LIMITEDPlot No. 83, Electronic City, Hosur RoadBangalore South - 560 100.Ph : +91-80-28521040/41 742, Fax : +91-80-28521094www.optoindia.com

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OPTO LIMITED - Morningstar, Inc.

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