SAMTEL INDIA LIMITED ANNUAL REPORT 2007-2008 CHAIRMAN'S REPORT Dear Shareholders, business environment continues to present challenges for your Company, but driven by its resilience, foresight acid is direction, it has continued to unlock-future growth potential. The financial year ended on 31st March 2008, your company sold as a part of its trading operations 1604 color picture valuing Rs. 1724 thousands, as against 6514 picture tubes valuing Rs. 7854 thousands sold during the previous - I year. As reported to the members in the last annual report, the Company had decided to set up a facility for manufacturing metal for picture tubes for color television sets at Kota (Rajasthan), to cater to the needs of Samtel Color Limited. However, to the revision of production plan by SCL for its Kota factory, there was a delay in setting up of the same. SCL is currently in the process of evaluating various options/ strategies for procurement of metal parts. Your company holds long-term investments in Samtel Color Limited and Samtel Glass Limited. As the market dynamics turn favourably in our direction, the Company's investments in group companies are expected to perform better in the coming years. The market for colour televisions continues to grow at about 10% per annum. However, Samtel Color Limited was not able a exploit the positive market dynamics due to delays in the ramp up of production on the two new lines, liquidity stress and dumping of color picture tubes by overseas suppliers. As mentioned in previous year's report, SCL approached the CDR cell RBI for corporate debt restructuring (CDR) and the proposal has since been approved. The CDR, coupled with the notification on anti-dumping duty, should help the company regain its foothold in the market. The performance of Samtel Glass Limited would also have shown improvements had it not been adversely affected by the performance of Samtel Color Limited. I would like to place on record my sincere thanks to the Board of Directors of your company for their continued guidance to the management of the Company and their relentless focus on the highest standards of corporate governance. Before concluding, I would like to thank all the stakeholders for their continued support and encouragement. Yours truly, Satish K. Kaura Chairman and Managing Director