FCI OEN CONNECTORS LIMITED

CHAIRMAN’S SPEECH AT THE 25TH   ANNUAL GENERAL
MEETING ON 28TH APRIL 2007

Ladies and Gentlemen,

I am delighted to welcome you to the 25th Annual General Meeting of FCI OEN Connectors Limited.

The Director's Report and Accounts of your Company have been with you for some time and I seek your permission to take them as read.

Review of Activities

In the year 2006, your Company increased net sales by 30% to Rs.1829 million.  Domestic sales increased by 33% to Rs.772 million. Export sales increased by 28% to Rs.1057  million.  Growth in turnover came from connectors for   communication & data sectors and higher export business.   Other income was Rs.122 million.   Profit Before Depreciation, Interest and Tax (PBDIT) went up by 16% to Rs.407 million and  Net profit  increased by 12%  to Rs.196 million. 

Export sales crossed another milestone of Rs.1000 million during the year.  Major chunk of the exports moved to Asian countries followed by Europe.

Communication & data market had grown during the year.  Eventhough the margin was under pressure, your Company could maintain reasonable level of profitability.

Current Year

The Government of India 's  thrust on higher tele-density & penetration of telephone lines in rural areas,  setting up of operation in India by telephone equipment manufacturers and contract equipment manufacturers;  will all augur well for your Company.

Though we do not have much presence  in the  mobile  connector  market, connectors required for switching stations of mobile operators are being supplied by us.  Hence greater mobile penetration in India will benefit your Company.

Bangalore factory is now fully geared up to cater to the increasing demand of cable assemblies that  goes into the Communication & Data market.   We continue to cater to customers in the data market.    Our strength is a large portfolio of products including  connectors  with high speed application  and  good engineering capability. 

Areas of concern in the current year are price pressure, uncertainty of demand, and inflow of low cost products. 

The Board of Directors approved today the unaudited quarterly financial results of the Company for the first quarter ended 31st March 2007.   The  net domestic sales for the said period  was Rs.234 million as against Rs.142 million for the corresponding period in the previous year.  The  net export sales during the above period was Rs.263  million as against Rs.224  million for the corresponding period in the previous year.    PAT for the quarter was at Rs.55 million as against Rs.50 million in the corresponding period in the previous year.

Sale of Electrical And Automotive Business

As mentioned at the last Annual General Meeting, the electrical business was sold during the year.

The Board, after deliberating the economics of  continuing the  automotive connector business decided, in consultation with FCI, the Company’s Parent Company, to sell  off the Automotive Business to FCI Technology Services Ltd. effective from 1st January 2007  for a consideration of Rs.280.97 million  subject to the approval of shareholders.  The Shareholders approval was duly obtained by an overwhelming majority (98% in favour) through the postal ballot process.  The sale is expected to be completed on 30th April 2007.

Business Relations

The Board of Directors   acknowledge with much appreciation and gratitude  the contributions made by all employees.  Harmonious employee relations continued in 2006 also.

On behalf of the Board, I wish to express my heartfelt thanks to the FCI Group for their increasing support to the Company.

I take this opportunity also to express my sincere thanks to the family of  investors for their continued support and confidence.

Thank you.