Videocon Industries Ltd_2007

Cover 1

Videocon Industries Cover-I.pmd 3/2/2008, 6:08 PM1

VIDEOCON INDUSTRIES LIMITED

REGISTERED OFFICE

14 KM Stone, Aurangabad-Paithan Road,

Village Chittegaon, Tal. Paithan,

Dist. Aurangabad - 431 105 (Maharashtra)

MANUFACTURING FACILITIES

14 Km. Stone, Aurangabad – Paithan Road,

Village Chittegaon,

Taluka Paithan, Dist. Aurangabad

(Maharashtra)

Village Chavaj, Via Society Area,

Taluka & Dist. Bharuch

(Gujarat)

Village Majara, Taluka Warora,

District, Chandrapur

(Maharashtra)

Plot No. 1D, Udyog Vihar Industrial Area,

Gautam Budh Nagar, Greater Noida,

(U.P.)

Plot No. 28, Khasra No. 293, Industrial Area,

Selakul, Vikasnagar, Dehradun,

(Uttranchal)

Vigyan Nagar, RICO Industrial Area,

Shahjanpur, District Alwar,

(Rajasthan)

A-32, Butibori Industrial Area,

Village Ruikhiri,

Nagpur (Maharashtra)

BOARD OF DIRECTORS

Venugopal N. Dhoot Chairman &

Managing Director

Pradipkumar N. Dhoot Wholetime Director

Kuldeep Drabu

S. Padmanabhan

Karun Chandra Srivastava

Maj. Gen. S.C.N. Jatar

Arun Laxman Bongirwar

Satya Pal Talwar

Didier Trutt Nominee - Thomson S.A.

Johan Fant Nominee - AB Electrolux (Publ)

Ajay Saraf Nominee - ICICI Bank Ltd.

B. Ravindranath Nominee - IDBI Ltd.

Notice ................................................................... 1

Directors’ Report ................................................. 3

Corporate Governance ......................................... 6

Auditors’ Report ................................................... 14

Balance Sheet ...................................................... 16

Profit and Loss Account ...................................... 17

Cash Flow Statement ........................................... 18

Schedules............................................................. 19

Notes to Accounts ................................................ 25

Balance Sheet Abstract &

Company’s General Business Profile ................... 31

Statement Pursuant to Section 212

of the Companies Act 1956 ................................. 32

Consolidated Financial Statement ........................ 34

Contents Page No.

State Bank of India

Allahabad Bank

Bank of India

Bank of Maharashtra

Central Bank of India

ICICI Bank Ltd.

Indian Bank

Indian Overseas Bank

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Patiala

The Federal Bank Ltd.

Union Bank of India

Vijaya Bank

Punjab National Bank

BANKERS

COMPANY SECRETARY

Vinod Kumar Bohra

AUDITORS

KHANDELWAL JAIN & CO.

Chartered Accountants

12 - B, Baldota Bhavan

117, Maharshi Karve Road,

Opp. Churchgate Railway Station,

Mumbai - 400 020

KADAM & CO.


Ahmednagar College Road, Kothi,

Near Badve Petrol Pump,

Ahmednagar - 414 001

1

ANNUAL REPORT 2006-07

NOTICE

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE

COMPANIES ACT, 1956

NOTICE is hereby given that the Nineteenth Annual General Meeting of VIDEOCON

INDUSTRIES LIMITED (“the Company”) will be held on Monday, March 31, 2008 atthe registered office of the Company at 14 KM Stone, Aurangabad-Paithan Road,Village Chittegaon, Taluka Paithan, Dist. Aurangabad 431 105 (Maharashtra) at 9.30A.M. to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Profit and Loss Account for the yearended September 30, 2007, the Balance Sheet as at that date and the Reports ofthe Board of Directors and Auditors thereon.

2. To declare a dividend on Equity Shares.

3. To appoint a director in place of Mr. Didier Trutt, who retires by rotation and,being eligible, offers himself for re-appointment.

4. To appoint a director in place of Mr. Satya Pal Talwar, who retires by rotationand, being eligible, offers himself for re-appointment.

5. To appoint a director in place of Mr. Arun Laxman Bongirwar, who retires byrotation and, being eligible, offers himself for re-appointment.

6. To appoint Auditors and to fix their remuneration and in this regard to considerand if thought fit, to pass, with or without modification(s), the following resolutionas an Ordinary Resolution:

“RESOLVED THAT M/s. Khandelwal Jain & Co., Chartered Accountants andM/s. Kadam & Co., Chartered Accountants, be and are hereby appointed asJoint Auditors of the Company, to hold office from the conclusion of this AnnualGeneral Meeting until the conclusion of the next Annual General Meeting of theCompany, on such remuneration as shall be fixed by the Board of Directors.”

SPECIAL BUSINESS:

7. To consider and if thought fit, to pass, with or without modification(s), thefollowing resolution as an Ordinary Resolution:

“RESOLVED THAT in accordance with the provisions of Section 255, 256, 257and all other applicable provisions, if any, of the Companies Act, 1956 or anystatutory modification(s) or re-enactment thereof, Mr. Karun Chandra Srivastava,who was appointed as an additional director pursuant to the provisions of Section260 of the Companies Act, 1956 be and is hereby appointed as a director of theCompany, liable to retire by rotation, under the provisions of the Articles ofAssociation of the Company.”

By order of the Board of Directors of

Videocon Industries Limited

Vinod Kumar Bohra

Company Secretary

Place: MumbaiDate : February 25, 2008

Registered Office:

14 KM Stone, Aurangabad- Paithan Road,Village Chittegaon, Taluka Paithan,Dist. Aurangabad 431 105 (Maharashtra)

NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERALMEETING (“MEETING”) IS ENTITLED TO APPOINT A PROXY TO ATTEND ANDVOTE ON A POLL INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE AMEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING PROXY SHOULD,HOWEVER, BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANYNOT LESS THAN FORTY-EIGHT HOURS BEFORE COMMENCEMENT OF THEMEETING.

2. Corporate Members intending to send their authorised representatives to attend theAnnual General Meeting are requested to send a certified copy of the Board Resolutionauthorizing their representative to attend and vote on their behalf at the AnnualGeneral Meeting.

3. In terms of the provisions of Articles of Association of the Company, Mr. DidierTrutt, Mr. Satyapal Talwar and Mr. Arun Laxman Bongirwar retire by rotation and,being eligible, offer themselves for re-appointment. Further, the Company hasreceived a notice in writing from a member alongwith a deposit of Rs. 500/-proposing the candidature of Mr. Karun Chandra Srivastava for the office of theBoard of Directors of the Company under the provisions of Section 257 of theCompanies Act, 1956. Brief resume of each of these director(s), nature of theirexpertise in specific functional areas and names of companies in which they holddirectorship and membership/chairmanship of Board Committees, as required interms of Clause 49 of Listing Agreement entered with the Stock Exchanges, inIndia, is appended to the notice. The Board of Directors of the Company hasrecommended the re-appointments/ appointments of the aforesaid directors.

4. An Explanatory Statement pursuant to Section 173(2) of the Companies Act,1956, relating to the Special Business to be transacted at the Annual GeneralMeeting is annexed hereto.

5. Members are requested to bring their attendance slip along with their copy ofAnnual Report to the meeting.

6. In case of joint holders attending the meeting, only such joint holder who ishigher in the order of names will be entitled to vote.

7. All documents referred to in the accompanying notice are open for inspection atthe Registered Office of the Company on all working days, except Friday, between12 Noon to 2.00 PM upto the date of the Annual General Meeting.

8. The Register of Members and Share Transfer Books shall be closed from Tuesday,March 18, 2008 to Monday, March 31, 2008 (“both days inclusive”) fordetermining the names of members eligible for dividend on Equity Shares, ifdeclared at the meeting. The dividend on Equity Shares, if declared at the Meetingwill be paid on or around April 10, 2008 to those Members holding shares inphysical form, whose name appears on the Register of Members of the Company,at the close of business hours on Monday, March 31, 2008 after giving effect toall valid transfers in physical form lodged with the Company and/or its Registrarand Share Transfer Agent on or before Monday, March 17, 2008. In respect ofshares held in dematerialized form, the dividend will be paid on the basis ofparticulars of beneficial ownership furnished by depositories as at the end ofbusiness hours on Monday, March 17, 2008.

9. The Company has not declared any dividend during financial year(s)1997 to2004. The unclaimed and unpaid dividend in respect of financial year 1995-1996 has been transferred, earlier when due, to the Investor Education andProtection Fund (IEPF) established by the Central Government, pursuant toprovisions of Section 205A of the Companies Act, 1956.The unclaimed dividends, for the financial year 1999-2000, in respect of erstwhileVideocon International Limited (amalgamated with the Company) has beentransferred to the IEPF. Dividends for the financial year 2000-2001 and thereafter,which remain unclaimed/unpaid for a period of seven years will be transferredby the Company to IEPF, as and when due. Members who have not encasheddividend warrant(s) for the aforesaid years are requested to obtain duplicatewarrant(s) by writing to the Company’s Registrar and Transfer Agents, M/s.MCS Limited. Members are requested to note that no claims shall lie against theCompany or IEPF in respect of any amounts which were unclaimed and unpaidfor a period of seven years from the dates they first became due for paymentand no payment shall be made in respect of any such claims.

10. Members who hold shares in physical form in multiple folios in identical namesor joint accounts in the same order or names are requested to send the sharecertificates to the Company’s Registrar and Transfer Agents, M/s. MCS Limited,for consolidation into a single folio.

11. The shares of the Company are tradeable compulsorily in electronic form andyour company has established connectivity with both the depositories i.e.,National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL). In view of the enormous advantages offered by theDepository system, Members are requested to avail the facility of dematerializationof the Company’s shares on either of the depositories as aforesaid.

ITEM NO. 7:

The Board of Directors of the Company (“the Board”) has, pursuant to the provisionsof Section 260 of the Companies Act, 1956 (the Act) and Articles of Association ofthe Company appointed Mr. Karun Chandra Srivastava as an additional director ofthe Company.In terms of the provisions of Section 260 of the Act, Mr. Karun Chandra Srivastavaholds office upto the date of ensuing Annual General Meeting. The Company hasreceived a notice in writing from a member alongwith a deposit of Rs. 500/- (RupeesFive Hundred) proposing the candidature of Mr. Karun Chandra Srivastava for theoffice of the Board of Directors of the Company under the provisions of Section 257of the Act.Keeping in view his rich expertise, it will be in the interest of the Company that Mr.Karun Chandra Srivastava is appointed as a director, liable to retire by rotation, inaccordance with the provisions of the Articles of Association of the Company.Save and except Mr. Karun Chandra Srivastava none of the other directors of theCompany is, in any way, concerned or interested in the Resolution set out at ItemNo.7 of the notice. The Board recommends the Resolution set out at Item No.7 of thenotice for your approval.

By order of the Board of Directors of

Videocon Industries Limited

Vinod Kumar Bohra

Company Secretary

Place: MumbaiDate : February 25, 2008

Registered Office:

14 KM Stone, Aurangabad- Paithan Road,Village Chittegaon, Taluka Paithan,Dist. Aurangabad 431 105 (Maharashtra)

2


MR. DIDIER TRUTT:

SNo Particulars Profile

1 Name of the director Mr. Didier Trutt

2 Date of Birth February 20, 1960

3 Educational Qualification Graduate from l’Ecole Nationale d’Ingénieurs of Saint

Etienne ( ENISE )

4 Date of appointment on the Board October 29, 2005

5 Category of director Non Executive- Non Independent (Nominee, Thomson S.A)

6 Area of Expertise/Senior Position Joined Thomson in 1984. From 1987 to 1994, based in

Held/Work Experience Asia, he was responsible for Thomson Television Thailand,

and General Manager of Television and Video activities for

all industrial sites in South East Asia.

Between 1994 and 1999, he was in charge of all European

operations for Television and Video activities.

Appointed in 1999 Vice President, Tubes Operations he

was in charge of the whole industrial and sales activities

for Europe and Asia first, then for the worldwide activities.

He was appointed “Executive Vice President” in July 2003,

in charge of Tubes and Components activities.

Since October 2005, he is Senior Executive Vice President

and Chief Operating Officer, Thomson.

Since 1992, Didier Trutt has been Foreign Trade Advisor

of France

7 Names of other directorships in Nil

Public Limited Companies

8 Names of other Committees in Nil

which Chairman


which Member

10 Number of Shares Held Nil

MR. SATYA PAL TALWAR


1 Name of the Director Mr. Satya Pal Talwar

2 Date of Birth June 14, 1939

3 Educational Qualification Certified Associate of the Indian Institute of Bankers;

Member - Indian Council of Arbitration

4 Date of appointment on the Board December 8, 2005

5 Category of director Independent

6 Area of Expertise/Senior Position He Carries with him forty years of operational and policy

Held/Work Experience formulation experience in Commercial and Central Banking.

In the past, he has served on following positions:

� Deputy Governor, Reserve Bank of India.

� Chairman, RBI Services Board, Reserve Bank of India,

Mumbai.

� Chairman, Advisory Board for Banking, Commercial

& Financial Frauds (appointed by Central Vigilance

Commissioner of Government of India).

� Chairman & Managing Director, Bank of Baroda.

� Chairman & Managing Director, Union Bank of India.

� Chairman & Managing Director, Oriental Bank of

Commerce.

Other Positions Held:

� Chairman, Indian Banks Association (IBA).

� Director, Securities and Exchange Board of India.

� Director, Industrial Development Bank of India.

� Director, Small Industries Development Bank of India.

� Director, Oriental Insurance Company.

� Director, Agricultural Finance Corporation Limited.

� Director, IDBU International Finance Limited,

Hongkong.

� Director, Master Card International, Asia Pacific

Regional Board, Singapore.

He is presently Senior Advisor, YES Bank Limited

7 Names of other directorships in 1. Reliance Life Insurance Company Limited

Public Limited Company 2. Reliance Capital Trustee Company Limited

3. Reliance General Insurance Company Limited

4. Crompton Greaves Limited

5. Reliance Communications Limited

6. Housing Development Infrastructure Limited

7. Reliance Asset Reconstruction Company Limited

8. Reliance Communications Infrastructures Limited

9. Reliance Telecom Infrastructures Limited

10. Ambience Project & Infrastructure Limited

8 Names of the other Committees in 1. Crompton Greaves Limited (Audit)

which Chairman

2. Housing Development Infrastructures Limited (Audit)

BRIEF RESUME OF DIRECTORS BEING APPOINTED/RE-APPOINTED, NATURE OF THEIR EXPERTISE IN SPECIFIC FUNCTIONAL AREAS AND NAMES OF

COMPANIES IN WHICH THEY HOLD DIRECTORSHIP AND MEMBERSHIP/CHAIRMANSHIP OF BOARD COMMITTEES.

9 Names of the other Committees in 1. Reliance Life Insurance Company Limited (Audit)

which Member 2. Reliance General Insurance Company Limited (Audit)

3. Reliance Capital Trustee Company Limited (Audit)

4. Reliance Communications Limited (Audit)

5. Reliance Communications Limited (Shareholders)

6. Reliance Communications Infrastructures Ltd. (Audit)


MR. ARUN LAXMAN BONGIRWAR:


1 Name of the Director Mr. Arun Laxman Bongirwar

2 Date of Birth May 18, 1943

3 Educational Qualification I.A.S., M.Sc

4 Date of appointment on the Board December 8, 2005


6 Area of Expertise/Senior Position Mr. Arun Laxman Bongirwar is a Senior Retired

Held/Work Experience Government Servant having vast experience in diversified

fields. He has held important positions with the

Government, some of which are as under:

� Chairman, Tariff Authority for Major Ports.

� Chairman, Jawaharlal Nehru Port Trust (Ministry of

Shipping, Govt. of India), Mumbai.

� Chief Secretary, Govt. of Maharashtra.

� Addl Chief Secretary (Revenue), Govt. of

Maharashtra.

� Principal Secretary (and later Addl Chief Secretary)

to Chief Minister, Govt. of Maharashtra.

� Principal Secretary (Industries), Govt. of

Maharashtra.

� Development Commissioner, Santacruz Electronic

Export Processing Zone (SEEPZ), Mumbai.

� Secretary to Chief Minister of Maharashtra, Govt. of

Maharashtra.

7 Names of other directorships in 1. Maharashtra Airport Development Co.

Public Limited Company 2. Wanbury India Limited

3. JSW Infrastructure & Logistics Limited


which Chairman

9 Names of other Committees in Wanbury India Limited

which Member (Audit Committee)


MR. KARUN CHANDRA SRIVASTAVA


1 Name of the Director Mr. Karun Chandra Srivastava

2 Date of Birth February 10, 1944

3 Education Qualification B.A, M.A, Diploma in System Mgmt, Diploma in

Development Administration, I.A.S.

4 Date of appointment on the Board April 09, 2007


6 Area of Expertise/Senior Position Mr. Karun Chandra Srivastava is a Senior Retired Civil Servant

Held/Work Experience having 38 years of experience in diversified fields of

governance and administration. He has held important

positions with the Government, some of which are as under:

� Municipal Commisioner, Municipal Corporation of

Greater Mumbai.

� Chairman, 2nd Maharashtra Finance Commission,

Government of Maharashtra, Administrative Staff

College Campus, Mumbai.

� Additional Chief Secretary (Home Department),

Government of Maharashtra, Mantralaya, Mumbai

� Metropolitan Commissioner, Mumbai Metropolitan

Regional Development Authority, Mumbai

� Joint Development Commissioner, Small Scale

Industries, Ministry of Industries, Government of

India, New Delhi.

7 Names of other directorships in Grauer & Weil (India) Limited

Public Limited Company


which Chairman


which Member


3


The Shareholders,

of Videocon Industries Limited (the Company)

The Board of Directors of your Company are delighted to present the Nineteenth Annual

Report together with the Audited Accounts, Auditors’ Report and the Audited Consolidated

Financial Statements for the year ended September 30, 2007.

FINANCIAL RESULTS

The performance of the Company, on standalone basis, for the financial year ended

September 30, is as summarized below:

Rs. Millions

Particulars Year ended Year ended

30.09.2007 30.09.2006

Net Sales 82,854.24 72,188.17

Other Income 1,663.62 1,654.44

Total Income 84,517.86 73,842.61

Profit before Interest, Depreciation and Tax 18,119.35 14,750.93

Interest & Finance charges 3,106.51 2,258.80

Depreciation 4,183.88 3,355.47

Profit before Tax 10,828.96 9,136.66

Provision for Taxation 2,276.77 951.64

Profit after Tax 8,552.19 8,185.02

The Topline of the Company increased from Rs. 72,188.17 Million as on September 30,

2006 to Rs. 82,854.24 Million representing an increase of 14.78% over the previous financial

year. Similarly, Profit after Tax increased from Rs. 8,185.02 Million as on September 30,

2006 to Rs.8,552.19 Million for the year under review, representing an increase of 4.49%

over the previous financial year.

OPERATIONS

Highlights on the performance of the Company, during the year under review i.e., upto

Balance Sheet Date and material developments after the year under review, i.e., after Balance

Sheet Date are summarized hereunder:

During the year, with a view to diversify its activities in order to derisk the business model,

the Company identified power generation; trading and dealing in various minerals including

coal required for electricity/power generation; and telecommunication, as emerging business

for expansion(s) and diversification(s), while retaining the focus on its prime business

segments viz., Consumer Electronics Goods and Home Appliances and Exploration of Oil

and Natural Gas. The Shareholders of the Company accorded their consent for altering the

Memorandum of Association by passing special resolution by Postal Ballot so as to enable

the Company to undertake diverse activities, as aforesaid.

During the year, the Company continued its growth path in the Consumer Electronics &

Home Appliances Business. The business acquired from Electrolux pursuant to the

amalgamation of EKL Appliances Limited with the Company started yielding its result by

improving the Company’s market share in the Household segment.

As the members are aware, the Company has participating interests in Oil & Gas exploration

activities in Australia, Timor Sea and Oman. You are also aware that your Company, jointly

with Bharat Petroleum Corporation Limited, has signed an agreement with Encana, Canada

for buying Encana’s participating interest in Brazil exploration activities.

Exploration activities are on as per the agreed exploration programmes at the respective oil

fields and the results are expected in the coming year or so.

With a view to enable the Company to tap the global equity market, as and when, the first

exploration exercise gets converted into a proven field, it is decided to compile all the

global exploration activities into an Offshore Company. This Offshore Company is proposed

to be listed on London Stock Exchange at AIMs.

The Company, through one of its subsidiaries, has been granted a Letter of Intent for

providing mobile phone services on Pan India basis. The subsidiary has made requisite

payments of Rs.1650 crores and provided requisite guarantee of Rs.850 crores to

Government of India as the licence fees. The license agreement and the spectrum allotment

are expected to be completed in due course of time. The Company is now engaged in

drawing up business plans for launch of mobile phone services on Pan India basis as and

when the spectrum release in various circles takes place.

Issue/Allotment of Securities:

During the year, under review, the Company allotted 416 equity shares to the shareholders

of erstwhile EKL Appliances Limited, pursuant to scheme of amalgamation of EKL Appliances

Limited with the Company.

During the year, under review, in accordance with the terms and conditions of Issue of

Foreign Currency Convertible Bonds, the Company allotted 107,452 equity shares, pursuant

to the Conversion of Foreign Currency Convertible Bonds, as under:

DIRECTORS’ REPORT

1. Conversion of FCCBs of US$1,000 each, due on March 07, 2011, at a conversion price

of Rs. 448.59 per equity share:

S.No. Date of Allotment Number of Amount of Number of

Bonds Converted Bonds Converted Equity Shares

(US$) allotted pursuant

to conversion

1 May 29, 2007 500 500,000 49,204

2 June 23, 2007 500 500,000 49,204

2. Conversion of FCCBs of US$1,000 each, due on July 25, 2011, at a conversion price

of Rs.507.00 per equity share:




to conversion

1 June 23, 2007 99 99,000 9,044

Allotment of Securities after Balance Sheet Date:

Subsequent to the Balance Sheet Date, in accordance with the terms and conditions of

Issue of Foreign Currency Convertible Bonds, the Company allotted 8,339,350 equity shares,

pursuant to the Conversion of Foreign Currency Convertible Bonds, as under:

1. Conversion of FCCBs of US$1,000 each, due on March 07, 2011, at a conversion price

of Rs. 448.59 per equity share




to conversion

1 December 17, 2007 10,350 10,350,000 1,018,523

2 January 10, 2008 26,150 26,150,000 2,573,371

3 January 30, 2008 10,500 10,500,000 1,033,286

2. Conversion of FCCBs of US$1,000 each, due on July 25, 2011, at a conversion price

of Rs.477.00 per equity share:




to conversion

1 December 17, 2007 13,900 13,900,000 1,349,726

2 January 10,2008 22,500 22,500,000 2,184,805

3 January 30, 2008 1,850 1,850,000 179,639

APPROPRIATIONS

DIVIDEND:

In accordance with the Company’s policy of balancing dividend pay-out with the requirement

of deployment of internal accruals for its growth plans, your directors have pleasure in

recommending a dividend of 35% (Rs. 3.50 per share) on equity shares for the financial

year ended on September 30, 2007, subject to approval by shareholders at the Nineteenth

Annual General Meeting. The dividend on equity capital, including dividend on shares issued

pursuant to conversion of FCCBs, amounting to Rs. 803.02 Million, if approved by the

members at the ensuing Annual General Meeting, would be paid out of the profits for the

year. The dividend is free of tax in the hands of the shareholders.

TRANSFER TO RESERVES

Your Board proposes to transfer Rs. 2,000 Million to the General Reserve. After

appropriations, the balance amount of Rs. 14,516.42 Million (Previous year 8,380.87 Million)

is proposed to be carried to Balance Sheet.

TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND

The Company has transferred a sum of Rs. 52,12,108 /- in respect of unclaimed/unpaid

dividend for 1999-2000 and Rs. 31,19,526/- in respect of unclaimed/unpaid debenture

redemption amount, to Investor Education & Protection Fund, since the amount was due &

payable and remained unclaimed and upaid for a period of seven years, in terms of Section

205A(5) of the Companies Act, 1956.

FIXED DEPOSITS

The Company has not accepted any deposit within the meaning of Section 58A of the

Companies Act, 1956.

4


CONSERVATION OF ENERGY

The Company continues to emphases on conservation of energy, power and other energy

sources. As a part of continuous efforts, your Company has taken the following steps:

� All the new manufacturing facilities of the Company are equipped with hi-tech energy

monitoring and conservation systems to monitor usage, minimize wastage and increase

overall efficiency at every stage of power consumption.

� Use of energy saving lighting arrangement in shop floor and on roads inside

manufacturing facilities.

� Utilization of unconventional energy source such as Solar Energy.

� Timely maintenance & up-gradation of machinery & equipments to ensure that the

energy consumption is as minimal as possible.

� The Company has formed a team of the expert engineers engaged in the production

activity for taking up detailed study under guidance of management, by attending

seminars, obtaining expert opinion, research, on the possibilities of use of various

methods of optimum use of energy without affecting the productivity and educating

the production team members as well as whole of the staff to conserve energy.

The Company takes environment conservation seriously. It is working to equip its facilities

with methods that help recycle CRT glass, curb carbon emissions and other pollutants. The

Company at Bharuch glass plant has supported plantation of over 2,00,000 teak trees.

RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

The Company is committed to introduce new products and improve existing products to meet

the ever-increasing demands of the consumers by fully exploring technological options and

advancements. The Company gives utmost importance to the Research & Development activities.

The R&D activities are carried out at in-house R&D Centre of the Company located in Aurangabad.

The focus is on developing new products in line with market demand, improving production

efficiency and lowering the cost of production.

1. Specific areas in which R&D carried out by the Company:

The Company has carried out Research and Development in the following areas:

� Development of new products; application and innovative equipments.

� Improvement in operating efficiencies.

� Reduction in manufacturing cost.

� Improvement in the quality of products.

2. Benefits derived as a result of the above R&D:

The Company has derived the following benefits as a result of Research and

Development:

� Superior range of components viz., panels and funnels to meet the demand for

large-size flat and slim CRT display products.

� Innovation of CRT Glass that intercepts harmful x-rays and conforms to health

regulation world wide.

� Reduction in cost i.e., cost savings.

� Highest Value to the Customers.

� Quality, reliability, durability, improvement and performance of the products have

increased thereby resulting in more acceptance of the products.

� Launch of new models with latest technology.

3. Future plan of action:

In the coming days, the Company is aiming to achieve development in the following

areas through Research and Development:

� Continuous up-gradation of R&D centre facilities to world class levels.

� Launching of New Brands under Videocon umbrella.

� Reducing the electricity consumption for consumer electronics and home

appliances.

� To bring in features of various products together.

� Development of latest technologies like Super True Flat CPT, Extra Slim CPT; HD

16:9 format CPT.

During the year under review, Company has incurred revenue expenditure of Rs. 0.95

million (0.001% of the turnover) on Research & Development.

Your Company is using the latest advances in technology for production. Taking into

consideration the advancements in technology, the Company continues to upgrade its

technical base to meet the needs of the consumers.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the earnings in Foreign Exchange amounted to Rs. 4,381.24

Million (previous year Rs. 4,578.32 Million) and outgo in Foreign Exchange was

Rs. 10,136.77 Million (previous year 12,119.92 Million).

INFORMATION TECHNOLOGY

Your Company believes that Information Technology is the backbone of any industry in today’s

environment. The Company has taken it as a tool to improve productivity, efficiency and reliability.

As such, mySAP, a Customized ERP Module, has already been substantially implemented at

manufacturing facilities and branches of the Company, in India and foreign operations.

HEALTH, SAFETY AND ENVIRONMENT

Your Company recognizes its role in health and safety, as well as its responsibility towards

environment and society. The health and medical services are accessible to all employees

through well-equipped occupational health centers at all manufacturing facilities. Safety

and security of the personnel, assets and environmental protection are also on top of the

agenda of the Company at its manufacturing facilities.

Clean environment and sustainable development integrated with the business objective is

the focus of operations of the Company. The projects and activities are planned and designed

with environment protection as an integral part to ensure a safe and clean environment for

sustainable development.

APPOINTMENT/RE-APPOINTMENT OF DIRECTORS

During the year under review, Mr. Sanjiv Krishnaji Shelgikar and Mr. Claes John Bygge

resigned from the office of the Board of Directors of the Company. The Board places on

record its sincere appreciation for the valuable guidance received from them during their

tenure as members of the Board of Directors of the Company.

During the year under review, Mr. Karun Chandra Srivastava was appointed as an additional

director. In terms of the provisions of Section 260 of the Companies Act, 1956,

Mr. Karun Chandra Srivastava holds office upto the date of ensuing Annual General Meeting.

The Company has received a notice in writing from a member alongwith a deposit of

Rs. 500/- proposing the candidature of Mr. Karun Chandra Srivastava for the office of the

Board of Directors of the Company under the provisions of Section 257 of the Companies

Act, 1956. The Board recommends appointment of Mr. Karun Chandra Srivastava.

In terms of the provisions of Section 255, 256 of the Companies Act, 1956, the Articles of

Association of the Company, Mr. Didier Trutt, Mr. Satyapal Talwar and Mr. Arun Laxman Bongirwar

are liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, they

have offered themselves for re-appointment. The Board recommends their re-appointment(s).

The brief profiles of directors being appointed/re-appointed at the ensuing Annual General

Meeting forms part of notice of the ensuing Annual General Meeting.

PARTICULARS OF EMPLOYEES

The details of employees drawing remuneration in excess of the monetary ceiling prescribed

under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars

of Employees) Rules, 1975, during the financial year 2006-2007 is annexed to this report.

LISTING

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited and

National Stock Exchange of India Limited. The Global Depository Receipts are listed on The

Luxembourg Stock Exchange. The Foreign Currency Convertible Bonds are listed on

Singapore Exchange Trading Securities Limited.

SUBSIDIARY COMPANIES

During the year under review, Sky Billion Trading Limited, Global Energy Inc., and Videocon

Display Research Company Limited became subsidiaries of the Company. Further, Mars

Overseas Limited and Gajanan Electronics and Supply Private Limited ceased to be

subsidiaries of the Company.

As such, as on 30th September 2007, the Company had 12 subsidiaries viz., Paramount

Global Limited, Middle East Appliances LLC, Videocon Global Limited, Powerking Corporation

Limited, Godavari Consumer Electronics Appliances Private Limited, Mayur Household

Electronics Appliances Private Limited, Videocon (Mauritius) Infrastructure Ventures Limited,

Eagle Corporation Limited, Venus Corporation Limited, Sky Billion Trading Limited, Global

Energy Inc., and Videocon Display Research Company Limited.

The Company has received an exemption from the Central Government u/s 212(8) of the

Companies Act, 1956 with regard to attaching of the balance sheet, profit and loss account

and other documents of the subsidiaries for the year 2006-2007.

The Company undertakes that:

1. The Annual Accounts of the subsidiary companies and the related detailed information

will be made available to any member seeking such information, on free of cost basis,

at any point of time upon receipt of request for the same.

2. The Annual Accounts of the subsidiary companies will also be kept for inspection by

any investor at the Registered Office of the Company and at the Registered Office of

the Subsidiary Company also.

A summary of the key financials of the Company’s subsidiaries is included in this report.

CONSOLIDATED FINANCIAL STATEMENTS

The Directors present the consolidated financial statements, duly incorporating the

Company’s 100% ownership interest in Paramount Global Limited, Middle East Appliances

LLC, Mars Overseas Limited (Upto 26th September 2007), Videocon Global Limited,

Powerking Corporation Limited, Gajanan Electronics Supply Private Limited (Upto 26th

September 2007 ), Mayur Household Electronics Private Limited, Godavari Consumer

Electronics Appliances Private Limited, Eagle Corporation Limited, Venus Corporation

Limited, Videocon (Mauritius) Infrastructures Ventures Limited, Sky Billion Trading Limited

(w.e.f., 21st November 2006), Global Energy Inc (W.e.f., 10th October 2006) and Videocon

Display Research Company Limited (w.e.f., 09th March 2007).

5


The Consolidated financial results also includes interest through Eagle Corporation Limited

(subsidiary) in Technologies Display Americas LLC, Technologies Displays Mexicana S.A. de.

CV, TTD International S.A, TDP Spzoo, TTD International Limited, TGDC Guangdong Displays

Company Limited, Thomson Display Technology Research & Company Limited, VDC

Technologies S.P.A, VDC Technologies Deutschland Gmbh (w.e.f. 14th September 2007).

The Company holds 41.67% equity interest in Evans Fraser & Co (India) Ltd. The same has

been accounted in the consolidation.

The Financial statements also includes the effects of Company’s interest in various Joint

Ventures. The details on Joint ventures and Companies interest are given in the Note No. 10

of Schedule 15(B) to the Accounts.

The Consolidated financial results have been prepared in line with the requirements of

Accounting Standard 21 “Consolidated Financial Statements”, Accounting Standard 27 –

“Financial Reporting of Interests in Joint Ventures” and Accounting Standard 23 –

“Accounting for Investments in Associates in Consolidated Financial Statements”.

CASH FLOW STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchanges, in India,

a Cash Flow Statement, as prepared in accordance with the Accounting Standard on Cash

Flow Statement (AS 3) issued by the Institute of Chartered Accountants of India, is given

along with Balance Sheet and Profit and Loss Account.

AUDITORS’ REPORT

The Auditors’ Report is unqualified. The notes to the Accounts referred to in the Auditors Report

are self explanatory and therefore do not call for any further clarifications under Section 217(3) of

the Companies Act, 1956.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered

Accountants, Ahmednagar, Statutory Auditors of the Company hold office until the conclusion

of the ensuing Annual General Meeting. The Company has received certificates from these

Statutory Auditors to the effect that their re-appointment, if made, would be within the prescribed

limit under Section 224(1-B) of the Companies Act, 1956.

The Board recommends their re-appointment.

CORPORATE GOVERNANCE

As required under clause 49 of the Listing Agreement with the Stock Exchanges, Corporate

Governance and Management Discussion and Analysis Report form part of this Annual Report.

The Company is in full compliance with the requirements and disclosures that have to be

made in this regard. A certificate from the Statutory Auditors of the Company confirming

compliance of the Corporate Governance is appended to the Report on Corporate Governance.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) read with Section 292A of the Companies Act, 1956, we, the

directors of VIDEOCON INDUSTRIES LIMITED, state in respect of Financial Year 2006-07

that:

a) in the preparation of annual accounts, the applicable Accounting Standards have been

followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies and applied them consistently and

made judgments and estimates that are 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;

c) the directors have taken proper and sufficient care for the maintenance of adequate

accounting records in accordance with the provisions of this Act for safeguarding the

assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis;

e) the Board has constituted an Audit Committee comprising of 3 (three) independent

directors;

f) The Audit Committee has also been delegated with authority for investigation and access

for full information and external professional advice for discharge of the functions delegated

to it by the Board;

g) the Board agrees that the recommendations of the Audit Committee on any matter

relating to finance and management including the audit report would be binding on

the Board; and

h) based on the above and the Internal Audit System, the Audit Committee, the Board

opines that the Company has internal control system commensurate with the size of

the Company and the nature of its business.

ACKNOWLEDGEMENT

The directors would like to express their grateful appreciation for the assistance and co-

operation received from the Financial Institutions, Banks and Government Authorities.

The directors are happy to place on record their gratitude to the employees at all levels for

their commitment and dedicated efforts.

The directors are also thankful to the shareholders for their continued support to the

Company.

For and on Behalf of the Board of Directors

V.N.DHOOT

Chairman & Managing Director

Place: Mumbai

Date: February 25, 2008

STATEMENT OF PARTICULARS OF EMPLOYEES PURSUANT TO THE PROVISIONS OF SECTION 217(2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (PARTICULARS

OF EMPLOYEES) RULES, 1975 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED 30TH SEPTEMBER, 2007

Details of employees drawing remuneration above Rs.2 lacs p.m.

Name of employee Designation Remuneration Qualification Age Experience Date of Name of the Position Held

Commencement Last Employer

of Employment

Anil Kumar Modani Vice President 2,584,008 B.Com,CA & CS 44 24 Years 16.11.1989 Shree Digvijay Cement Finance Executive

Co.Ltd.

Arvind Bali Vice President 2,584,008 B.Sc.Engg. (Mech.) & 47 25 Years 01.02.1994 M/S Greaves Cotton & Area Sales Manager

M.B.A. Co.Ltd.

Rahul Sethi Vice President 4,894,441 B. Com. 56 33 Years 01.02.1987 Gedor Ltd. Commercial Manager

Subhash Nabar Joint President 3,653,140 BE (Mechanical) 60 36 Years 01.07.1997 Orson Electronics Ltd. Senior Manager

Arun Kumar Dashora Vice President 2,796,426 BE (Electronics) 54 28 Years 16.05.1990 Riico Ltd. Manager

Nitin Shewale General Manager 2,650,052 BE ( Electronics) 43 20 Years 14.01.1989 Nil Nil

Ajay Bajaj Vice President 5,000,000 B SC. 44 20 Years 16.06.2007 Lg Electronics India Ltd. Dy.General Manager

Ashok V.Patil Vice President 2,811,978 M.A.,BBA 55 25 Years 21.08.2006 EKL Appliances Ltd. Associate Vice Precident

Sunil Tandon Group Head 3,556,284 M.Sc.,D.B.M,I.C.S.E,I.SC 47 22 Years 01.10.1999 DHL Worldwide Express Regional Manager

Pawan Kalra Joint President 4,978,200 B. Com. 39 21 Years 12.12.2001 Baron Int. Ltd. General Manager

Sunil Mehta Joint President 5,804,208 M.A.,PGDBM 57 27 Years 20.02.2001 Bpl Ltd. Project Regional Head

Shekhar Jyoti Vice President 3,480,000 B. Com., M.B.A. 45 22 Years 22.01.1986 Macotax Consultants General Manager

Pvt.Ltd.

Anuj Jain Associate Vice President 3,100,092 B. Com., M.B.A. 39 18 Years 07.09.2005 Mirc Electronics Ltd. Regional Buisness

Manager

N.S. Satish Associate Vice President 3,900,108 M.B.A.-MARKETING 39 14 Years 17.12.2007 Mirc Electronics Ltd. National Head

ANNEXURE TO DIRECTORS’ REPORT

a) Remuneration includes Basic Salary, Ex-Gratia, H.R.A., Mktg. Allowance, Special Allowance, C.A., L.T.A., Leave Encashment, Medical Reimbursement, Contribution to Provident Fund.

b) The Employees are in whole time employment of the Company and the employment is contractual in nature.

c) None of the employees listed above is a relative of any Director of the Company.

Place : Mumbai

Date : February 25, 2008

6


COMPANY’S PHILOSPHY ON CORPORATE GOVERNANCE

Corporate Governance is all about commitment to values and ethical business conduct. It

is all about how an organization is managed. The Company believes that sound Corporate

Governance is critical to enhance and retain investor’s trust.

The Company’s philosophy on Corporate Governance is based on:

1. Transparency & maintaining high disclosure levels:

To maintain the highest standards of transparency in all aspects of our interactions

and dealings and to ensure timely dissemination of all price sensitive information

and matters of interest to our stakeholders.

2. Accountability:

To demonstrate highest levels of personal responsibility and continually affirm that

employees of the Company are responsible to themselves for the pursuit of excellence.

3. Ethical conduct:

To conduct the affairs of the Company in an ethical manner.

4. Compliance with the laws in all the Countries in which the Company operate:

To comply with all the laws and regulations as applicable to the Company.

5. Stakeholders’ Interest:

To promote the interests of all the stakeholders including customers, shareholders,

employees, lenders, vendors and the community. The Company relentlessly endeavors

to enhance the shareholder wealth while sparing no effort to deliver long term value

to all the stakeholders.

The objective is to institutionalize Corporate Governance practices that go beyond adherence

to the extant regulatory framework.

The Company is in compliance with all the requirements of the code of Corporate Governance,

enshrined in Clause 49 of the Listing Agreement.

1. The composition of the Board of Directors as on September 30, 2007 was as under:

Category Directors No. of

Directors

Promoter - Executive Director Mr. Venugopal N. Dhoot 2

(Chairman & Managing Director)

Mr. Pradipkumar N. Dhoot

(Whole Time Director)

Non Executive - Mr. Kuldeep Drabu 3

Non Independent Director Mr. Didier Trutt

Mr. Johan Fant

Independent Mr. S. Padmanabhan 7

Mr. Satya Pal Talwar

Mr. Arun Laxman Bongirwar

Maj. Gen. S. C. N. Jatar

Mr. Karun Chandra Srivastava

Mr. Ajay Saraf

(Nominee of ICICI Bank Ltd)

Mr. B. Ravindranath

(Nominee of IDBI Limited)

CORPORATE GOVERNANCE

The Board comprises of eminent persons having versatile experiences in the field of

marketing, finance, technical and administration.

2. Board/Committee Meetings and Procedures:

The Company is in substantial compliance with the secretarial standards governing

board meetings and also general meetings as set out in Secretarial Standards 1 and

2 issued by the Institute of Company Secretaries of India. The information furnished

to Board Members and Procedure is as set out hereunder:

a. The Company has defined guidelines for the meetings of the Board of Directors

and Committees thereof. These guidelines seek to systematize the decision

making process at the meetings of Board/Committees, in an informed and

efficient manner.

b. All Board/Committee Members are given notice of the meetings in advance.

The meetings are governed by structured agenda. The agenda alongwith the

explanatory notes are distributed well in advance.

c. The Members have unqualified access to all information available with the

Company. The information generally provided to the Members inter-alia include(s):

� Annual operating plans and budgets;

� Quarterly and financial results;

� Minutes of the meeting of Audit and other Committees to the Board;

Notice of Interest;

� Material important litigations, show cause, demand, prosecution and

penalty notices, if any;

� Sale of material nature of investments, subsidiaries and assets, which

are not in the normal course of business;

� Establishment, operations and Set up of Joint Venture, Subsidiary or

collaboration etc.,

� Divestment of Joint Ventures, Subsidiaries;

� Acquisitions/Amalgamation etc.,;

� Minutes of the Board Meeting, Annual General Meetings of Subsidiary

Companies and significant transactions if any; and

� Related Party Transactions

d. Minutes of the proceedings of each Board/Committee meetings are recorded.

Draft minutes are circulated amongst all members for their comments. The

minutes of the proceedings of the meetings are entered in the minutes book.

e. The guidelines for the Board/Committee meetings facilitate an effective post

meeting follow-up, review and reporting process for the actions taken on

decisions of the Board and Committees.

f. The Board periodically reviews the compliance reports to ensure adherence to

all applicable provisions of law, rules and guidelines.

g. The Company has laid down code of conduct which binds all the Board members

and senior management of the Company. A declaration by the Chairman and

Managing Director to this effect is appended to this report.

3. Board Meetings and Attendance:

16 Board Meetings were held during the year 2006 –07 on the following dates:

19th October 2006, 31st October 2006, 21st November 2006, 28th December 2006,

31st January 2007, 27th April 2007, 04th May 2007, 29th May 2007, 23rd June

2007, 06th July 2007, 11th July 2007, 20th July 2007, 31st July 2007, 11th August

2007, 29th August 2007 and 17th September 2007.

Details of number of Board meetings held during the year, number of meeting(s) attended by each director, attendance of directors at last Annual General Meeting, number of other

directorship/committee membership held by each of them are as hereunder:

Sl. No. Name of Director Whether attended Attendance in Other Board

AGM held on Board Meetings

30.03. 2007 held during the year/tenure

Total Attended Directorship** Committee Committee

Chairmanship*** Membership***

1 Mr. Venugopal N. Dhoot No 16 15 14 1 1

2. Mr. Pradipkumar N. Dhoot Yes 16 12* 14 Nil 2

3 Mr. Sanjiv K. Shelgikar+ No 5 4 1 Nil Nil

4 Mr. Kuldeep Drabu No 16 3 3 1 1

5 Mr. S. Padmanabhan No 16 11 14 Nil 8

6 Maj. Gen. S. C. N. Jatar No 16 5 1 Nil 1

7 Mr. Satya Pal Talwar Yes 16 11 10 2 6

8. Mr. Arun Laxman Bongirwar No 16 8* 3 Nil 1

9 Mr. Ajay Saraf No 16 3 3 Nil 3

10 Mr. Didier Trutt No 16 4* Nil Nil Nil

11 Mr. Johan Fant# No 11 2 Nil Nil Nil

12 Mr. B. Ravindranath No 16 4 1 Nil Nil

13 Mr. Claes Johan Bygge# N.A 5 1 Nil Nil Nil

14 Mr. Karun Chandra Srivastava@ N.A 11 1 1 Nil Nil


7

# Mr. Johan Fant was nominated by AB Electrolux (Publ) in substitution of Mr. Claes Johan Bygge. On January 31, 2007 the Board took on record the withdrawal of nomination of Mr.

Claes Johan Bygge and nomination of Mr. Johan Fant.

+ Mr. Sanjiv Krishnaji Shelgikar resigned from the Office of the Board of Directors of the Company. His resignation was accepted on April 9, 2007.

@ Mr. Karun Chandra Srivastava was appointed as an additional director on April 9, 2007.

* Includes meeting(s) participated through audio conferencing.

** Directorship held by directors as above, do not include any alternate directorships if held, directorships in Foreign Companies, Section 25 Companies and Private Limited Companies.

*** As per Clause 49 of the Listing Agreement, Membership/Chairmanships of only the Audit Committee and Shareholder/Investors’ Grievance Committee of Public Limited Companies

have been considered.

i. Discussion with external auditors before the audit commences on nature and scope

of audit as well as have post-audit discussion to ascertain any area of concern.

j. Reviewing the company’s financial and risk management policies.

k. To look into the reasons for substantial defaults, if any, in the payment to the

depositors, debenture holders, shareholders (in case of non-payment of

declared dividends) and creditors.

l. Financial Statements and Investments made by Subsidiaries.

m. To review the functioning of Whistle Blower Mechanism, if any.

The Audit Committee also reviews:

� Management discussion and analysis of financial conditions and results of

operations.

� Statement of significant related party transactions, if any.

� Management Letters/Letters of internal control weaknesses issued by the

Statutory Auditors.

� Internal Audit Reports relating to internal control weaknesses, and

� The appointment, removal and terms of remuneration of the Chief Internal

Auditor.

1.3 Meetings and Attendance:

During the financial year under consideration, four meetings of the Committee were

held on: October 31, 2006, January 31, 2007, April 27, 2007 and July 31, 2007.

Name of the Category Meetings Meetings

Member held during attended

the year

Maj. Gen. S. C. N. Jatar Independent 4 4

Mr. Arun Laxman Bongirwar Independent 4 4*

Mr. Satya Pal Talwar Independent 4 4

*One meeting participated through audio conferencing.

The Statutory Auditors, Cost Auditors and the Head of Internal Audit attended and

participated in the meetings, on invitation. The Company Secretary is the de-facto

Secretary of the Committee.

2. REMUNERATION COMMITTEE:

2.1 The Composition of Remuneration Committee as on 30th September 2007 was as

under:

Name of the Member Category

Major Gen. S. C. N. Jatar - Chairman Independent

Mr. Satya Pal Talwar Independent

Mr. Arun Laxman Bongirwar Independent

2.2 Scope of Remuneration Committee:

The following matters are referred to the Remuneration Committee:

� Fixing the remuneration payable to the Directors;

� Determining the remuneration policy of the Company; and

� Reviewing the performance of employees and their compensation.

2.3 Directors’ Remuneration:

(a) The Promoter Directors, Executive Directors, Non Executive Non Independent

Directors, Nominees of AB Electrolux (publ) and Thomson S.A are not paid

any sitting fees. Mr. V. N. Dhoot and Mr. P. N. Dhoot appointed as Chairman &

Managing Director and Whole Time Director respectively are entitled for

remuneration as per their terms of appointment, however, they are not drawing

any remuneration.

(b) The independent directors are paid only sitting fees for attending Board/

Committee meetings. The details of payment of sitting fee during the year

under review are as follows:

4. Brief Details of Directors seeking appointment/re-appointment:

The brief details of directors retiring by rotation and seeking re-appointment and

persons seeking appointment u/s. 257 of the Companies Act, 1956, is appended to

the Notice convening the Nineteenth Annual General Meeting.

BOARD COMMITTEES

The Board has constituted three committees:

a. Audit Committee.

b. Shareholders/Investors’ Grievance Committee.

c. Remuneration Committee.

1. AUDIT COMMITTEE:

1.1 The Composition of Audit Committee as on September 30, 2007 was as under:


Mr. Satya Pal Talwar - Chairman Independent

Mr. Arun Laxman Bongirwar Independent

Maj. Gen. S. C. N. Jatar Independent

The Audit Committee comprises of independent directors and financial literate persons

having vast experience in the area of finance and accounts. The Chairman of the

Audit Committee is a person with financial expertise.

1.2 Scope of Audit Committee:

The terms of reference are broadly as under:

a. Overall assessment of the Company’s financial reporting process and the

disclosure of its financial information to ensure that the financial statement is

correct, sufficient and credible.

b. Recommending the appointment of external auditor, fixation of audit fee and

also approval for payment for any other services rendered by the Auditors.

c. Reviewing with management the annual financial statements before submission

to the board, focusing primarily on;

� Matters required to be included in the Director’s Responsibility Statement

to be included in the Board’s report in terms of Clause (2AA) of section

217 of the Companies Act, 1956.

� Changes, if any, in accounting policies and practices.

� Major accounting entries based on exercise of judgment by management.

� Observations if any, in draft audit report.

� Significant changes/amendments, if any, arising out of audit.

� The going concern assumption.

� Compliance with accounting standards.

� Qualification in the draft audit report, if any

� Compliance with stock exchange and legal requirements concerning

financial statements.

� Any related party transactions i.e., transactions of the Company of

material nature, with promoters or the management, their subsidiaries

or relatives etc., that may have potential conflict with the interests of

Company at large.

d. Review of quarterly unaudited financial results before submission to the Auditors

and the Board.

e. Reviewing with the management, external and internal auditors the adequacy

of internal control systems.

f. Reviewing the adequacy of internal audit function, including the structure of

the internal audit department, staffing and seniority of the official heading the

department, reporting structure coverage and frequency of internal audit.

g. Discussion with internal auditors any significant findings and follow up there on.

h. Reviewing the findings, if any, of any internal investigations by the internal

auditors into matters where there is suspected fraud or irregularity or a failure

of internal control systems of a material nature and reporting the matter to the

board.

8


Name of Director Sitting fee (Rs)

Mr. S. Padmanabhan 2,60,000

Major Gen. S. C. N. Jatar 2,10,000

Mr. Satya Pal Talwar 2,90,000

Mr. Arun Laxman Bongirwar 2,30,000

Mr. Ajay Saraf (favouring:ICICI Limited) 60,000

Mr. B. Ravindranath (favouring: IDBI Limited) 80,000

Mr. Karun Chandra Srivastava 50,000

2.4 Meetings and Attendance, in Remuneration Committee:

During the year under review, three meeting of remuneration committee were held

on November 6, 2006, April 3, 2007 and August 3, 2007.

Name of the Member Meetings held Meetings attended

Maj. Gen. S. C. N. Jatar 3 3

Mr. Satya Pal Talwar 3 3

Mr. Arun Laxman Bongirwar 3 3

2.5 Stock Options:

The Company has not issued any stock options.

3. SHAREHOLDERS/INVESTORS’ GRIEVANCE COMMITTEE:

3.1 The Composition of Shareholders/Investors’ Grievance Committee as on September

30, 2007 was as under:


Maj. Gen. S. C. N. Jatar - Chairman Independent

Mr. S. Padmanabhan Independent

Mr. Karun Chandra Srivastava Independent

Mr. Sanjiv Krishnaji Shelgikar ceased to be member of shareholders/investors’

grievance committee with effect from April 9, 2007 and Mr. Karun Chandra Srivastava

was appointed as a member of the Committee on the same date.

The committee met on November 6, 2006, January 30, 2007, April 30, 2007 and

August 3, 2007. Details of attendance is as under:

Name of the Member Meetings held Meetings attended

Maj. Gen. S. C. N. Jatar 4 4

Mr. S. Padmanabhan 4 4

Mr. Karun Chandra Srivastava 2 1

Mr. Sanjiv Krishnaji Shelgikar 2 2

3.2 Scope of Shareholders/Investors’ grievance Committee:

The Committee administers the following activities:

� Transfer of Shares.

� Transmission of shares.

� Issue of Duplicate Share Certificates.

� Change of Status.

� Change of Name.

� Transposition of Shares.

� Sub-division of Shares.

� Consolidation of Folios.

� Shareholders requests for Dematerialisation / Rematerialisation of shares, and

� Allotment of Equity Shares.

The Board has delegated the power of Share Transfer to Registrar & Share Transfer

Agents, who process the transfers. The Committee also looks after Redressal of Investors’

Grievances and performance of the Registrar and Transfer Agents of the Company.

In addition to the aforesaid, the committee closely monitors violations of the code of

conduct for prevention of insider trading.

3.3 Compliance Officer:

Mr. Vinod Kumar Bohra, Company Secretary is the Compliance Officer.

3.4 Share Transfer Details:

The number of Shares transferred during the year under review is given below:

Equity

a Number of transfers 5,110

b Average Number of Transfers per month 426

c Number of Shares Transferred 55,409

3.5 Demat/Remat of Shares:

Details of Shares Dematerialised/ Rematerialised during the year under review is

given below:

a Number of Demat Transfers approved 12,933

b Number of Sub-committee Meetings held 34

c Number of Shares Dematerialised 180,626

d Percentage of Shares Dematerialised 0.08

e Number of Rematerialisation requests approved 15

f Number of Shares Rematerialised 530

3.6 Details of complaints received and redressed during the year 2006 – 07:

Sl. Particulars Received Redressed Pending

No. as on

30.09.2007

a Non receipt of refund orders - - -

b Non receipt of div/int/red warrants 510 510 -

c Non receipt of share certificates 2,014 2,014 -

d Others 86 86 -

Total 2,610 2,610 -

Note: Representatives of the company are in constant touch with MCS Limited, Share

Transfer Agents of the Company, and review periodically the outstanding complaints.

GENERAL MEETING(S)

1) Details of location, time and date of last three AGMs:

AGM AGM Date Location Time No of Special

Resolutions

Passed

16th AGM 31.03.2005 Auto Cars Compound, 9.30 A.M Nil

Adalat Road, Aurangabad

17th AGM 31.03.2006 Auto Cars Compound, 9.30 A.M 3


18th AGM 30.03.2007 Auto Cars Compound, 9.30 A.M Nil


2) Postal Ballot:

During the year under review and after the year, following special resolution(s) were

transacted through Postal Ballot:

1. To shift the Registered Office of the Company from Auto Cars Compound,

Adalat Road, Aurangabad – 431005 to 14 K.M. Stone, Aurangabad – Paithan

Road, Village Chittegaon, Taluka-Paithan, Aurangabad – 431105.Maharashtra.

2. To alter the Main Object Clause of Memorandum of Association of the Company

by inserting additional clause(s) relating to:

a. carrying on business of generation and supply of Power; and

b. carrying on business of minerals and fuels and source of minerals and

fuel, including mining block or mining rights for mining of minerals,

including coal or other substance.

3. To alter the Main Object Clause of Memorandum of Association of the Company

by inserting additional clause(s) relating to Telecommunications.

In terms of the provisions of Rule 5(b) of The Companies (Passing of the Resolution

by Postal Ballot) Rules 2001, Mr. Sheetal Kumar Dak, Practicing Company Secretary,

was appointed as Scrutinizer for conducting the Postal Ballot.

Notice of the Postal Ballot along with Explanatory Statement, Postal Ballot Form and

Self Addressed (postage to be paid by addressee) Envelope were sent to all the

Shareholders of the Company and all other persons who were entitled to receive the

same by under certificate of posting.

The Postal Ballot Forms received upto close of Working hours on Friday, August 10,

2007, considered for determining the votes for S.No.1 and 2, as aforesaid, and the

Postal Ballot Forms received upto close of Working hours on Wednesday, December

19, 2007, were considered for determining the Votes for S.No.3, hereinabove.

The results of the Postal Ballot for S.No.1 & 2 were announced by the Company

Secretary of the Company at Auto Cars Compound, Adalat Road, Aurangabad – 431005

on Saturday, August 11, 2007 and for S.No.3 was announced on December 26, 2007

and the said dates of declaration of result of Postal Ballot has been taken as date of

passing of the Resolution.


9

1 Total No. of PBF Received 2,726 2,726 3,005

2 No of Shares 145,251,255 145,251,255 101,095,458

3 % to total equity shares 65.6967 65.6967 45.2406

4 No. of Invalid/Rejected PBF 425 425 1,189

5 No of Shares 344 344 92,806

6 % to Total PBF Received 0.0002 0.0002 00.0918

7 Total No. of Valid PBF Received 2,301* 2,301** 1,816

8 Total No. of Shares 145,250,911* 145,250,911** 101,002,652

9 % to Total PBF Received 65.6965* 65.6965** 99.9082

10 Total No. of PBF in Favour 2,250 2,208 1,799

11 Total No. of Votes Casted in Favour 145,250,088 145,249,495 101,002,246

12 % of Shares to Receipt 99.9995 99.9991 99.9996

13 Total No. of PBF Against 46 79 17

14 Total No. of Votes Cased Against 753 1,342 406

15 % of Shares to Receipt 0.0005 0.0009 0.0004

* 5 Shareholders holding 70 Equity Shares have not exercised any voting option.

** 14 Shareholders holding 74 Equity Shares have not exercised any voting option.

At present, the Company is not proposing to conduct any resolution through postal ballot.

Resolution declared as Passed

on 11th August 2007

Special Resolution in terms of the

provisions of Section 146 of the

Companies Act, 1956 for shifting of the

Registered Office of the Company from

Auto Cars Compound, Adalat Road,

Aurangabad - 431005 to 14 K.M. Stone,

Aurangabad - Paithan Road, Village

Chittegaon, Taluka Paithan, Dist.

Aurangabad - 431105. Maharashtra.


on 11th August 2007


provisions of Section 17 of the

Companies Act, 1956 for alteration of

Main Object Clause No ‘III A’ titled THE

MAIN OBJECTS OF THE COMPANY TO

BE PURSUED BY THE COMPANY ON ITS

INCORPORATION’ of Memorandum of

Association of the Company by inserting

new Clause(s) No. 3 & 4 after existing

Clause 2 to enable Company to:

a. carry on business of generation and

supply of Power; and

b. carry on business of minerals and

fuels including coal and source of

minerals and fuel, including mining

block or mining rights for mining of

minerals, including coal or other

substance.


on 26th December 2007


provisions of Section 16, 17 of the

Companies Act, 1956 for alteration of

Main Object Clause No ‘III A’ titled ‘THE

MAIN OBJECTS OF THE COMPANY TO

BE PURSUED BY THE COMPANY ON ITS

INCORPORATION’ of Memorandum of

Association of the Company by inserting

new Clause 5 after existing Clause 4 to

enable Company to carry on business

of Telecommunication.

ParticularsSr. No.

VOTING PATTERN OF POSTAL BALLOTS IS AS HEREUNDER:

OTHER DISCLOSURES

The Company is in Compliance with the provisions of Clause 40A of the Listing Agreement.

MEANS OF COMMUNICATION

(i) The Company regularly intimates its un-audited as well as audited financial results to

the Stock Exchanges, as soon as these are taken on record/approved. These financial

results are published in either of Free Press Journal (English) / Economic Times /

Times of India and Navshakti (Marathi) dailies having wide circulation. The results

are also displayed on the website of the Company www.videoconindustries.com.

The official news releases and the presentations, if any, made from time to time to

investors and financial analysts at investors’ meets are also displayed on the

Company’s website. The results are not sent individually to the shareholders.

(ii) Management Discussion and Analysis Report forms part of Directors’ Report.

GENERAL SHAREHOLDER INFORMATION

1. Annual General Meeting:

The 19th Annual General Meeting will be held on:

Day Monday

Date March 31, 2008

Time 09.30 A.M.

Venue Registered Office of the Company at 14 KM Stone, Aurangabad-Paithan

Road, Village Chittegaon, Taluka Paithan, Dist. Aurangabad. 431 105

(Maharashtra)

DISCLOSURES

1. Materially significant related party transactions i.e. transactions of the company of material

nature, with its promoters, the directors or the management, their subsidiaries or relatives,

etc. that may have potential conflict with the interests of the company at large:

There are no transactions, which may have potential conflicts with the interests of

company at large. Transactions with related parties are disclosed in Note No. B-22 of

Schedule 15 to the Accounts in the Annual Report.

2. Non-compliance by the company, penalties, strictures imposed on the Company

by Stock Exchange or SEBI or any statutory authority, on any matter related to

capital markets, during the last three years:

NIL

3. Whistle Blower Policy and affirmation that no personnel have been denied access

to the audit committee:

The Company has implemented Whistle Blower Policy and no personnel have been

denied access to the Audit Committee.

4. Details of Compliance with mandatory requirements and adoption of the non

mandatory requirements of this clause:

The Company has complied with mandatory requirements and adopted the following

non mandatory requirements:

i) The Company has constituted a remuneration committee.

ii) Whistle Blower Policy.

10


2. Financial Calendar for 2007-2008:

Financial Year October 01, 2007 to September 30, 2008

First Quarterly Result On or before January 31, 2008

Second Quarterly Result On or before April 30, 2008

Third Quarterly Result On or before July 31, 2008

Fourth Quarterly Result On or before October 31, 2008

Annual General Meeting for

Financial year to be ended on

September 30, 2008 On or before March 31, 2009

3. Date of Book Closure:

Tuesday, March 18, 2008 to Monday, March 31, 2008 (both days inclusive)

4. Dividend Payment Date:

Dividend, if declared at Annual General Meeting, is proposed to be paid on or around

April 10, 2008.

5. Listing on Stock Exchanges

The equity shares of your Company are listed on Bombay Stock Exchange Limited

and National Stock Exchange of India Limited. The Company has paid Listing Fees

upto March 31, 2008.

The names and addresses of the respective stock exchanges are given below:

Sl. No. Name and Address of the Stock Exchange Stock Code

1 Bombay Stock Exchange Limited (BSE) 511389

Phiroze Jeejeebhoy Towers,

Dalal Street, Mumbai – 400 001.

Web: www.bseindia.com

2 National Stock Exchange of India Ltd (NSE) VIDEOIND

Exchange Plaza, Bandra Kurla Complex,

Bandra East,Mumbai – 400 051

Web: www.nseindia.com

Global Depository Receipt of the Company are listed on:

Luxembourg Stock Exchange

11, Avenue, de la, Porte Neuve L-2227, Luxembourg

Foreign Currency Convertible Bonds of the Company are listed on:

The Stock Exchange of Singapore

2, Shanton Way, # 19-00, SGX Centre 1,

Singapore 068804

6. Market Price Data

Average monthly High and Low prices at BSE and NSE are given below:

Month BSE NSE

High Low High Low

October 2006 509.10 412.00 509.40 410.10

November 2006 460.00 417.00 459.25 401.05

December 2006 462.85 410.05 462.90 401.30

January 2007 478.00 433.30 474.70 435.00

February 2007 462.00 420.10 462.25 412.20

March 2007 459.75 416.00 460.00 415.30

April 2007 472.00 392.00 499.00 393.30

May 2007 503.00 402.10 505.00 405.00

June 2007 500.00 414.00 500.00 414.65

July 2007 427.00 369.10 428.00 350.55

August 2007 384.00 336.25 425.00 335.00

September 2007 396.00 352.30 394.90 337.70

7. Registrar and Transfer Agent MCS Limited

Harmony, 1st Floor, Sector 1, Khanda,

New Panvel (West) 410 206

Dist: Raigad (Maharashtra)

Tel : 022 – 27492003

Fax : 022- 27492005

8. Share Transfer System Applications for transfer of shares held in

physical form are received at the office of the

Registrar and Share Transfer Agent of the

Company. All valid transfers are processed

within 15 days from the date of receipt.

9. a) Shareholding Pattern as on 30.09.2007 was as under:

Category Category of Number Total Number Total shareholding

code Shareholder of Share Number of Shares as a Percentage

holder of in Demat of total Number

Shares Form of Shares

As a As a

per- per-

centage centage

of (A+B) of

(A+B+C)

(A) Share holding of Promoter

and Promoter Group

1 Indian

(a) Individuals / Hindu Undivided

family 13 1,619,838 1,292,950 0.87 0.73

(b) Central Govt./ State Govt.(s)

(c) Bodies Corporate 44 153,823,583 152,711,452 82.60 69.57

(d) Financial Institutions/ Banks - - - - -

(e) Any Other - - - - -

(specify)

Sub - Total (A) (1) 57 155,443,421 154,004,402 83.47 70.31

(2) Foreign

(a) Individuals (Non-Resident Individuals/ - - - - -

Foreign Individuals)

(b) Bodies Corporate - - - - -

(c) Institutions - - - - -

(d) Any Other (specify) - - - - -

Sub - Total (A) (2) - - - - -

Total Share holding of Promoter

and Promoter Group

(A) = (A)(1)+(A)(2) 57 155,443,421 154,004,402 83.47 70.31

(B) Public Share holding

(1) Institutions

(a) Mutual Funds / UTI 21 36,571 35,228 0.02 0.02

(b) Financial Institutions/Banks 36 304,403 291,166 0.16 0.14

(c) Central Govt./ State Govt.(s) - - -

(d) Venture Capital Funds - - -

(e) Insurance Companies 5 5,600,352 5,599,752 3.01 2.53

(f) Foreign Institutional Investors 95 13,467,563 12,706,367 7.23 6.09

(g) Foreign Venture Capital Investors - - -

(h) Any Other( specify) - - -

Sub - Total (B) (1) 157 19,408,889 18,632,513 10.42 8.78

(2) Non- Institutions

(a) Bodies Corporate 1,927 5,516,620 4,962,476 2.96 2.50

(b) Individuals

i. Indvidual Shareholders holding

nominal share capital up to

Rs. 1 Lakh 342,862 4,685,290 2,998,613 2.52 2.12

ii. Above Rs 1 Lakh 19 1,171,618 1,171,618 0.63 0.53

(c) Any Other( specify)

Sub - Total (B) (2) 344,808 11,373,528 9,132,707 6.11 5.14

Total Public Share holding

B= (B)(1)+(B)(2) 344,965 30,782,417 27,765,220 16.53 13.92

TOTAL (A) + (B) 345,022 186,225,838 181,769,622 100.00 84.23

(C) Shares held by Custodians and

against which Depository Receipt

have been issued 2 34,867,863 34,862,403 *** 15.77

GRAND TOTAL (A)+(B)+(C) 345,024 221,093,701 216,632,025 *** 100.00

VINL HIGH Vs SENSEX HIGH

0

100

200

300

400

500

600

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

MONTHS

VINL

STO

CK P

RICE

S

02000400060008000100001200014000160001800020000

SENS

EX

BSE VINL SENSEX


11

b) Distribution of Shareholding as on 30.09.2007 is given below:

Share Holding of Number of % to Total No. of Shares Amount in Rs. % to Total

Nominal Value of Rs. Shareholders

Up to 5,000 344,002 99.7 4,096,711 40,967,110 1.85

5,001 to 10,000 472 0.14 353,958 3,539,580 0.16

10,001 to 20,000 181 0.05 264,970 2,649,700 0.12

20,001 to 30,000 82 0.02 207,239 2,072,390 0.09

30,001 to 40,000 39 0.01 132,825 1,328,250 0.06

40,001 to 50,000 22 0.01 102,604 1,026,040 0.05

50,001 to 1,00,000 49 0.01 353,812 3,538,120 0.16

1,00,001 and above 177 0.05 215,581,582 2,155,815,820 97.51

Total 345,024 100 221,093,701 2,210,937,010 100

10. Dematerialization of Shares and liquidity:

The Securities and Exchange Board of India (SEBI), through a notification has made

it mandatory that any delivery in the Company’s shares against stock exchange trades

shall be in demat form. As on 30.09.2007, 216,632,025 equity shares (97.98% of

the total number of shares) have been dematerialized.

11. Outstanding GDRs/ ADRs/ Warrants or Conversion Instruments, Conversion date

and like impact on equity (30.09.2007):

As on 30th September 2007, 34,867,863 GDRs were outstanding. Each GDR

represents one equity share of the Company.

During the financial year ended on 30th September 2006, the Company issued Foreign

Currency Convertible Bonds in two tranches i.e., of US$ 90,000,000 Million and US$

105,000,000. The details of Conversions and likely impact on the equity is tabulated

hereunder:

1 Principal Value of FCCBs Issued US$90,000,000 US$105,000,000

2 Principal Value of FCCBs converted US$1,000,000 US$99,000

into equity (from 01st October 2006

to 30th September 2007)

3 Principal Value of Bonds US$89,000,000 US$104,901,000

outstanding as at

30th September 2007

4 Underlying Equity Shares issued 98,408 9,044

pursuant to conversion of FCCBs

as referred in S.No. 2, hereinabove

5 Underlying Equity Shares which may 8,758,342 10,186,173

be issued upon conversion of FCCBs

as referred in S.No.3 hereinabove

12. Plant locations:

1 14 Km. Stone, Village Chittegaon, Taluka Paithan, Dist. Aurangabad. 431 105

Maharashtra

2 Village Chavaj, Via Society Area, Taluka & Dist. Bharuch – 392 002.Gujarat

3 Plot No.10, Udyog Vihar Industrial Area, Gautam Budh Nagar, Greater Noida,

Uttar Pradesh

4 Plot No. 28, Khasra No.293, Industrial Area,Selakul, Vikasnagar, Dehradun,

Uttaranchal

5 Village Majara, Taluka Warora, District, Chandrapur, Maharashtra

6 Vigyan Nagar, RICO Industrial Area, Shahjanpur, District Alwar, Rajasthan

7 A-32, Butibori Industrial Area, Village Ruikhiri, Nagpur

13. Address for Correspondence:

14 Km. Stone, Village Chittegaon, Taluka Paithan,

Dist. Aurangabad. 431 105 Maharashtra

Tel : 02431 – 251501

Fax : 02431 – 251551

Email : [email protected]

The correspondence address for shareholders in respect of their queries is:

MCS Limited

Harmony, 1st Floor, Sector 1, Khanda, New Panvel (West) 410 206

Dist: Raigad (Maharashtra)

Tel : 022 – 27492003

Fax : 022- 27492005

COMPLIANCE CERTIFICATE OF THE AUDITORS

A certificate from the auditors of the Company regarding compliance of conditions of

Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached

to this report.

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

To,

The Members of


We have examined the compliance of conditions of Corporate Governance by Videocon Industries Limited,

for the year ended on 30th September, 2007, as stipulated in Clause 49 of the Listing Agreement of the

said Company with the Stock Exchanges.

The Compliance of Conditions of Corporate Governance is the responsibility of the Management. Our

examination was limited to a review of the procedures and implementations thereof adopted by the

Company for ensuring the compliance of the condition of the corporate governance as stipulated in the

said clause. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the

representations made by the Directors and the management, we certify that the Company has complied

with the condition of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing

Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company

nor of the efficiency or effectiveness with which the management has conducted the affairs of the

Company.

For KHANDELWAL JAIN & CO. For KADAM & CO.

Chartered Accountants Chartered Accountants

SHIVRATAN AGARWAL U. S. KADAM

Partner Partner

Membership No.104180 Membership No.31055

Place: Mumbai

Date : February 25, 2008

DECLARATION

The Board has laid down a code of conduct for all Board Members and Senior Management

of the Company, which is posted on the Website of the Company. The Board Members

and Senior Management have affirmed compliance with the code of conduct.

For VIDEOCON INDUSTRIES LIMITED

CHAIRMAN & MANAGING DIRECTOR

CMD/CFO CERTIFICATION

We, Chairman and Managing Director appointed in terms of the Companies Act, 1956

and the Chief Financial Officer, certify to the Board that:

a) The Financial Statements and the Cash Flow Statements for the year have been

reviewed and to the best of our knowledge and belief are true and present a true and

fair view of the affairs of the Company.

b) To the best of our knowledge and belief, no transactions entered are fraudulent,

illegal or violate the Company’s Code of Conduct.

c) We accept the responsibility for establishing and maintaining internal controls,

evaluate the effectiveness, disclosing the deficiencies to the Auditors & the Audit

Committee and take steps or propose to take steps to rectify these deficiencies.

d) We have indicated to the Auditors and the Audit Committee:

i) Significant changes in Internal Control processes during the year,

ii) Significant changes in Accounting Policies; and

iii) Instances of significant fraud of which we have become aware.

Chief Financial Officer Chairman and Managing Director

12


MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and analysis report has been included in adherence to the spirit enunciated in

the code of Corporate Governance approved by the Securities and Exchange Board of India. The Management

presents herein the Industry Overview, Opportunities and Threats, Initiatives by the Company and overall

strategy of the Company and its outlook for the future. This outlook is based on assessment of the current

business environment it may vary due to future economic and other developments both in India and abroad.

Statement in this Management Discussion and Analysis of Financial Condition and Results of Operation of

the Company describing the Company’s objectives, expectations or predictions may be forward looking

within the meaning of applicable securities laws and regulations. Forward Looking statements are based

on certain assumptions and expectations of future events. Actual results could differ materially from those

expressed or implied. Important factors that could make a difference to the Company’s operation include

economic conditions affecting demand/supply and price conditions in the domestic and overseas markets

in which the Company operates, changes in the Government regulations, tax laws and other statutes and

other incidental factors. Further, the discussion following herein reflects the perceptions on major issues

as on date and the opinions expressed here are subject to change without notice. The Company undertakes

no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in

this report, consequent to new information, future events, or otherwise.

INDUSTRY, STRUCTURE AND DEVELOPMENTS

Consumer Electronics & Home Appliances:

The Consumer electronics products and household appliances industry can be broadly categorized into

two segments:

1. Consumer Electronics Products; and

2. House Hold Appliances.

The consumer electronic products segment includes products such as Televisions, video products and

home entertainment products and the household appliances segment includes products such as

refrigerators, washing machines, air conditioners, microwave ovens, vacuum cleaners, dishwashers and

small appliances such as irons, heaters, vacuum cleaners, fans, mixers and water purifiers.

Colour Televisions

Colour Televisions is the dominant product in the consumer electronics and house hold segment, both by

volume and by value. As per the Company’s estimates for year ended March 2007, colour television sales

accounted for an estimated Rs.110 billion with a growth of 12.7%, representing approximately 53% of the

total turnover of the consumer electronics products and household appliances market.

Market demand for colour televisions have increased by around 12.7% in the year ending March, 2007.

With the upgradation in technology, there has been a shift from conventional TVs to Flat TVs and from Flat

TVs to Slim and Ultra Slim TVs. The Flat TV segment constituted 55% of the overall CTV market. It has

grown from 5 million units to 6.6 million units in the year ended March 2007, an increase of 30%. The

conventional segment has de-grown by 5% over the previous year. The growth in demand in Flat TVs has

been driven by a reduction in the price differential between conventional color television and flat color

television, and increasing consumer preference for flat color televisions.

With the technology changing day by day, the new trends in television industry is Flat Panel Display (FPD).

Undergoing metamorphosis, FPD market is turning from low volume, high pricing and low consumer awareness

to affordable pricing and desire for enhanced technology and cinematic viewing experience. It comprises of

liquid Crystal Display (LCD) TV and Plasma TV. The market for FPD in 2006-07 has grown at an exponential

rate of 430%. LCD TVs currently constitute the bulk of high-end TV sales.

Sales of FPD are no loner solely restricted to the metros, consumers in tier-2 cities seem to be as evolved

in lifestyle needs. Higher disposable incomes, greater aspirations, and a younger demographic consumer,

have increased demands for the latest technology high-end television market. Plasma TV is finding more

popularity among corporate buyers, shopping malls and airports, where there is public viewing. The leading

players in CTV market are Videocon, Sansui, LG, Samsung, Akai and Onida.

The key growth drivers of CTV business in India are likely to be:

� Electrification in rural India and increasing aspirations of people in rural India.

� Low penetration levels- The penetration level of CRT TVs in India is more lower when compared to

other countries, worldwide.

� Multiple TV demand from Middle and high income categories.

� Price erosion and easy and inexpensive finance availability.

� Sports events/festivals.

� Product innovations.

Refrigerators

It is expected that for the year ended March 2007, refrigerator sales accounted for an estimated Rs. 30

billion on sales with a growth of approximately 5.4%. The leading brands in the refrigerator market are

Videocon, LG, Whirlpool, Electrolux, Samsung, Kelvinator, and Godrej.

Sales of Frost Free Refrigerators grew by approximately 13% for period ended March 2007 where as the

direct cool segment grew by approximately 3.7 % in the same period. In direct cool refrigerator, 165 – 200

litres segment is the major contributor where as in frost free refrigerator, 201 – 250 liter segment is the

major contributor. The Frost Free segment accounts for more than 30% of the total refrigerator market.

Air Conditioners

For the year ended March 2007, air conditioners sales are estimated at Rs. 25 Billion, representing growth

of 24% over the previous year. The leading brands in the AC market are LG, Samsung, Videocon, Onida,

Voltas, Electrolux and Godrej.

According to industry sources, the demand for split air conditioners has increased considerably in the year

ended March 2007, due to a reduction in the price differential between split and window air conditioners,

increased affordability and because split air conditioners require less space, have low noise levels and is

better looking than window air conditioners. With the growing number of three-four rooms apartment in

Tier I, II and III cities, a new trend has started emerging whereby customers, instead of one AC, have

religiously started buying two to three ACs.

The Company has identified the air conditioner market as a high growth market. As consumers become

more affluent, they are likely to increase the number of air conditioners in their homes. The Company

expects a further shift in demand towards higher value split air conditioners. At present, the penetration

level in the domestic market for air conditioners in India is extremely low.

Increasing affordability, acceptance of air conditioners as a utility product rather than a luxury item, easy

availability of finance schemes, and historic low penetration. The institutional sale is also contributing to

the growth of this category. In air conditioners, per Capita consumption is higher for this category as it is

used by the same individual in different parts of his home and workplace.

Washing Machines

Washing machine sales accounted for the year ended March 2007 are estimated at Rs. 16.4 billion

representing growth of 12.5% over the previous year. The leading brands in the washing machine market

are Videocon, LG, Whirlpool, Electrolux, Samsung and Onida.

The semi automatic segment has been key contributor with 70% share to this category. The fully automatic

segment has grown at a rate of 34%. Repeat buyers upgrading to Fully Automatic. Also, the shift is from semi

automatic to fully automatic due to diminishing price differential. Although demand for washing machines has

exhibited very low price elasticity, intense competition between players has motivated moderate price cuts in

recent years. Price cuts in other market segments have also led to reduction in prices in this segment. Stiff

competition has resulted in technologically superior products at competitive prices. The industry is also moving

beyond the concept of clean wash to the concept of pure, bacteria free, odour free wash.

Growth in the demand for washing machines in India continues to be limited by a public perception that

they are of low utility because of (i) the availability of cheap manual labour and (ii) intermittent water and

power supply in many parts of the country.

Microwave oven

Microwave oven sales for year ended March 2007 are estimated at Rs. 5.9 billion resulting the growth of

48.5% over the previous year. The leading brands in the Microwave Oven market are LG, Samsung,

Videocon, Kenstar, Electrolux, IFB, and Kelvinator.

The grill and convection segment contributed 41% and 31% respectively. With the solo category growing

at a rate of 22 per cent, grill growing at 36 per cent and convection model growing at 71 per cent over the

last year. Microwave oven segment is becoming aesthetic driven. Players are differentiating themselves

on sleek design which can be placed in small countertops. The companies are using health as a diffentiator

to sell their product range and this has found great acceptance among Indian consumers.

Low penetration level, changing life style is creating a set of opportunity for the market which will lead to

high growth in this category.

Lack of time, coupled with changing eating habits is creating another set of opportunity.

Glass shells

Glass Shells (glass panels and funnels), account for nearly 60% of CRT costs. The manufacturing process for

glass shells is capital-intensive. Videocon is one of the major players in the glass shell business in India.

One of the significant developments in the industry has been the enforcement of energy efficiency regulation

laid by Bureau of Energy Efficiency, Ministry of Power.

INDIAN OIL AND GAS INDUSTRY

Per capita consumption of primary energy and hydrocarbons of India is among the lowest in the world.

Demand for crude oil is derived from the demand for petroleum products, which is largely determined by

the growth in the economy. High speed diesel oil, motorspirit, liquefied petroleum gas, naphtha and fuel

oil account for the bulk of the consumption of petroleum products in India. While domestic production of

crude oil and natural gas has increased over the past decade, it has not kept pace with growth in domestic

consumption over the same period. As the gap between demand and production continues to widen, India

has increasingly become a significant net importer of crude oil. It is against this background that the

Government of India has stressed the importance of exploration of hydrocarbons in India.

The Government of India, under the National Common Minimum Programme, has placed greater emphasis

on increasing indigenous production. The government is planning to increase indigenous production through

the accelerated domestic exploration of oil and gas, through improved oil recovery from existing fields and

diversification of the fuel base with an increased reliance on gas. Natural gas has gained tremendous importance,

both as a fuel and a feedstock over the past 20 years. Natural gas is used as a feedstock in fertilizer and

petrochemical units. It is also used as a fuel in power plants using combined cycle technology, and in other

industries such as glass, ceramics, sponge iron and tea estates.

India today remains one of the lesser explored regions in the world with well density per thousand sq. km.

being among the lowest.

OPPORTUNITIES AND THREATS

STRENGTHS

� There are opportunities to further expand manufacturing bases, both internationally and domestically.

� There are opportunities to expand the range of Components so as to reduce cost of products.

� There are opportunities to increase brand portfolio by introducing new brands and/or by acquiring

the existing premium brands from the market.

� There are opportunities to increase the sales of different range of products manufactured by Company

by way of association/tie-up with retail outlets; Super Market; Hyper Marts etc.,

� There are opportunities to increase penetration in the Indian consumer electronic products and

household appliances market. This can be achieved through growth of customer base and enlargement

of the Company’s product portfolio.

� There are opportunities to improve level of service to network of dealers and distributors for example

by providing more frequent deliveries in order to reduce the dealers inventory levels and therefore

costs. The Large scale operations can improve the margins of the Company.

13


� There are opportunities to outperform in Domestic Market with Innovative Products such as Slim

Televisions. LCDs & PDPs etc.,

� There is scope to identify additional oil and glass blocks that are suitable for exploration and have

potential for production. The Company plans to bid for the rights to exploit the hydrocarbons blocks,

which shall be open for bidding in future.

THREATS:

� The Cost of marketing, advertising and after sale services are increasing tremendously.

� Due to stiff competition, prices are continuously reducing. If the costs are not controlled then it may

prove to be a threat and margins will be under pressure.

� The Cost and interest rates continue to be the key issues that are likely to shape the growth rates of

the Industry. Any increase in the interest will have impact on the profitability of the Company.

SEGMENT -WISE PERFORMANCE

The Company has prepared the consolidated Financial Statements as per Accounting Standard 21

“Consolidated Financial Statements”, Accounting Standard 27 “Financial Reporting of Interests in Joint

Venture”, Accounting Standard 23 “Accounting for investments in Associates in Consolidated Financial

Statements” and accordingly the segment information as per Accounting Stantdard-17 “Segment Reporting”

has been presented in consolidated financial statements and accordingly the segment wise turnover are as

under:

(Rs. Millions)

Segment Current year ended Previous year ended

30.09.2007 30.09.2006

Consumer Electronics and Home Appliances 14,101.91 14,394.14

Crude Oil and Natural Gas 111,869.39 115,239.57

Total 125,971.30 129,633.71

OUTLOOK

� The consumer electronics sector is undergoing a major transformation. The analog technologies are

giving way to digital technologies. Digitalization in turn is leading to convergence of consumer, computer,

communication, broadcast cable technologies and the contents. A digital signal can be far more easily

processed than an analog one. The Company is planning to tap this.

� The Company has adopted the best and the most sophisticated technology to suit Indian needs. The

Company as a part of global diversification has been planning international forays in the same industry

and has successfully forayed into international market either directly or indirectly.

� The Company as a part of reducing manufacturing cost of products has explored the possibility of

manufacturing various components at the in-house facility by setting up standalone facilities.

RISKS AND CONCERNS

Risks associated with Consumer Electronics & Home Appliances Business

� There is risk of non adjustment of product mix in line with market demand or keep pace with

technological changes.

� There is risk of drop in CRT prices due to International Competition.

� There is risk of non adoption / availability of Technology.

� There is risk of inability to keep pace with the changes in product design and features.

� There is risk of slowdown in the overall Indian and Global economy thereby effecting demand for the

Company’s products.

Risks associated with the Oil and Gas Business

� There is risk of variation in the prices of oil and gas.

� There is risk of exploration blocks not yielding the expected results.

� There is risk on account of natural disasters or which are beyond control such as labor unrests,

earthquakes, flooding and extended interruptions due to hazardous weather conditions, explosions

and other accidents.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system commensurate with its size and nature of business, which

provides for:

� Transactions being accurately recorded, cross verified and promptly reported.

� Adherence to applicable accounting standards and policies.

� Information technology system which include controls for facilitating the above.

� Efficient use and safeguarding of resources.

� Accurate recording and custody of assets.

� Compliance with applicable statutes, policies procedures, listing requirements, management

guidelines and circulars in all the Countries where the Company operates.

Internal checks and controls are exercised by strictly adhering to the various procedures laid at the time of

delegation of authorities and other Procedures. The delegation clearly indicates the powers along with the

monetary limits, wherever necessary, that can be exercised by various levels of the Managers in the Company.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Comparative Performance of Company on Stand alone Basis

Fixed Assets

The Gross Block of Company as on 30th September, 2007 was Rs. 86,310.84 million which includes

revaluation of assets to the extent of Rs. 9,244.75 million. The Net Block as on that date was Rs. 53,194.72

million. During the year, there were additions to gross block of fixed assets to the extent of Rs. 8,948.74

million.

Sales

During the year under consideration, the Company achieved a turnover of Rs. 87,102.58 million as against

Rs. 75,803.32 million during the previous year ended on 30th September 2006, thereby recording an

increase of 14.91% in turnover as compared to previous year. Turnover comprised of sales from the

‘Consumer Electronics and Home Appliances’ segment to the extent of Rs. 73,000.67 million as against

Rs. 61,409.18 million for the previous year, Oil & Gas segment to the extent of Rs. 14,101.91 million as

against Rs. 14,394.14 million for the previous year ended on 30th September, 2006.

Other Income

Other income for the year was Rs. 1,663.62 million as against Rs. 1,654.44 million during the previous

year ended on 30th September, 2006, representing an increase of 0.55% as compared to previous year.

Other income comprises of Income from Investment & Securities Division, Exchange Rate Fluctuation,

Insurance claim received, Interest and Miscellaneous Income.

Expenditure

Cost of Goods Consumed

Cost of Goods Consumed stood at Rs. 48,981.34 million as against Rs. 41,627.44 million during the

previous year ended on 30th September 2006.

Production & Exploration Expenses for Oil & Gas

During the year under review the production and exploration expenses for oil and gas were Rs. 9,549.81

million as against Rs. 9,583.21 million during the previous year ended on 30th September, 2006 representing

a marginal decrease of 0.35% as compared to previous year.

Salaries, Wages and Employees Benefits

During the year under review the Salary and Wages stood at Rs. 1,053.48 million as against Rs. 946.96

million for the previous year ended on 30th September, 2006 representing an increase of 11.25% as

compared to previous year.

Manufacturing and Other Expenses

During the year under review the manufacturing and other expenses were Rs. 6,813.88 million as against

Rs. 6,934.07 million for the previous year ended on 30th September, 2006 representing decrease of

1.73% as compared to previous year.

Interest & Finance Charges

For the year ended 30th September 2007, Interest and Finance charges amounted to Rs. 3,106.51 million

as against Rs. 2,258.80 million for the previous year ended on 30th September, 2006 thereby recording an

increase of 37.53% compared to previous year. The increase is mainly on account of increase in interest

rate and increase in total Borrowings.

Depreciation

Net Depreciation (excluding depreciation on revalued assets) amounted to Rs. 4,183.88 million as against

Rs. 3,355.47 million for the previous year ended on 30th September, 2006 thereby recording an increase

of 24.69% as compared to previous year. The increase in depreciation is on account of additions of fixed

assets.

Profit Before Tax

As a result of the foregoing, the profit before tax was Rs. 10,828.96 million for the year ended 30th

September 2007 as against Rs. 9,136.66 million for the previous year ended on 30th September, 2006

there by recording an increase of 18.52% in profit before tax.

Provision for Taxation

Provision for Taxation includes Provision for Current Tax, Deferred Tax and Fringe Benefit Tax. During the

year under review, the Company has provided Rs. 1,232.70 million for Current Tax, Rs. 1,020.18 million

for Deferred Tax and Rs. 23.89 million for Fringe Benefit Tax as against Rs. 819.00 million for Current Tax,

Rs. 117.23 million for deferred tax and Rs. 15.41 million for Fringe Benefit Tax for the previous year ended

on 30th September, 2006.

Net Profit

Net Profit of the Company increased to Rs. 8,552.19 million from Rs. 8,185.02 million for the previous

year ended 30th September, 2006 representing an increase of 4.49% in Net profit.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING

NUMBER OF PEOPLE EMPLOYED

The Company continues to improve daily living and to create a workplace where every person can reach

his or her full potential. The work environment gives employees the freedom to make the most of them.

Learning and relevance are key principles at the Company. The Company believes in talent acquisition and

retention, to augment its plan of making its presence more prominent to global markets. The Company

has developed a HRD Plan with the parameters to achieve Excellent Results. The steps have been taken to

create a sense of belongingness in the minds of the employees, which in turn gives maximum contribution

per employee while gearing them to face the challenges in the competitive business environment and

achieve the desired goals.

The Company is poised to take on the challenges with its work force of around 8,500 employees/workers

in the business environment and march towards achieving its mission with success.

14


AUDITORS’ REPORT

To

The Members of


1. We have audited the attached Balance Sheet of VIDEOCON INDUSTRIES LIMITED, as at 30th September 2007, Profit and Loss Account and also the Cash Flow Statement of

the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express

an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and

disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the

overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, on the basis of such

checks as considered appropriate and according to the information and explanations given to us during the course of the audit, we give in the Annexure hereto a statement on

the matters specified in Paragraphs 4 and 5 of the said Order.

4. Attention is invited to Note No. B-10 of Schedule 15 regarding incorporation of the Company’s share, in the operations of the joint venture based on the statements received

from the Operator. The Company has received from the Operator the audited financial statements for the period upto 31st

March 2007 and un-audited financial statements for

the period 1st April 2007 to 30th September 2007, on which we have placed reliance. We have also placed reliance on technical / commercial evaluation by the management

in respect of allocation of development cost to producing properties depletion of producing properties, on the basis of proved remaining reserves and liability for abandonment

costs.

5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books. Proper returns

adequate for the purpose of our audit have been received from branches not visited by us. The branch Auditor’s Reports have been forwarded to us and have been

appropriately dealt with.

c) The Balance Sheet, Profit and Loss account and the Cash Flow Statement dealt with by the report are in agreement with the books of account and with the audited returns

from the foreign branches.

d) In our opinion, the Balance Sheet, Profit and Loss Account, and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in

Section 211(3C) of the Companies Act, 1956.

e) According to the information and explanations given to us and on the basis of written representations received from the directors as on 30th September 2007 and taken

on record by the Board of Directors, we report that none of the directors is disqualified as on 30th September 2007 from being appointed as a director in terms of Section

274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to explanations given to us, the said financial statements, read together with the significant accounting

policies, paragraph 4 above and notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 30th September 2007;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date, and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.



SHIVRATAN AGARWAL U.S.KADAM

Partner Partner

Membership No.: 104180 Membership No.: 31055

Place : Mumbai

Date : 25th February, 2008

ANNEXURE REFERRED TO THE AUDITORS’ REPORT

Statement referred to in paragraph 3 of the Auditors’ Report of even date to the Members of VIDEOCON INDUSTRIES LIMITED on the financial statements for the year ended 30th

September 2007.

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

(b) As per the information and explanations given to us, physical verification of fixed assets, other than those under joint venture, has been carried out in terms of the

phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification

is reasonable, having regard to the size of the Company and nature of its business.

(c) In our opinion, during the year the Company has not disposed off a substantial part of fixed assets.

(ii) (a) As per the information furnished, the inventories (excluding stock of crude oil lying at extraction site with the Operator) have been physically verified during the year

by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management, are

reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. As per the information and explanations given to us the discrepancies noticed on physical verification of

stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a) As per the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured, to/from Companies, firms or other parties

covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) As the Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under

Section 301 of the Companies Act, 1956, sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

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

the nature of its business with regard to purchases of inventory and fixed assets and for the sales of goods. During the course of our audit, we have not observed any

continuing failure to correct the major weakness in the internal controls systems.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars

of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register

maintained under Section 301 of the Companies Act 1956 and exceeding the value of Rupees Five lakh, in respect of any party during the year, have been made at

prices which are reasonable having regard to prevailing market price at the relevant time.

15


(vi) The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A and 58AA or any other relevant provision of the Companies

Act, 1956 and rules made there under.

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

(viii) The Central Government has prescribed maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Company’s products. As per

the information and explanations provided to us, we are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made

a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities

undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax, Service

tax, Custom duty, Excise duty, Cess and other material statutory dues wherever applicable. According to the information and explanations given to us, no undisputed

arrears of statutory dues were outstanding as on 30th September 2007 for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and information and explanations given to us, the particulars of dues of Sales tax, Income tax, Wealth tax,

Service tax, Custom duty, Excise duty, Cess which have not been deposited on account of disputes, are given below:

S.No. Name of the Statute Nature of the Dues Amount Rs. in million Forum where dispute is pending

1. Customs Act, 1962 Customs Penalty 0.85 Commissioner

11.00 Supreme Court

Customs Duty 55.14 Asst. Commissioner

17.18 Deputy Commissioner

0.72 Commissioner

5.48 Commissioner (Appeals)

13.53 CESTAT

3.51 Supreme Court

2. Central Excise Act, 1944 Excise Penalty 0.01 Tribunal


Service Tax Demand 1.78 Joint Commissioner (P&V)

0.14 Asst. Commissioner

4.02 CEGAT

Excise Duty Demand 2.81 Asst. Commissioner

0.57 Addl. Commissioner

16.46 Dy. Commissioner

91.43 Commissioner


8.61 Tribunal

4.18 CESTAT

8.15 High Court

3. Central Sales Tax Act, 1956 and Sales Tax Demands 97.22 Asst. Commissioner

Sales Tax Acts of various states 11.90 Deputy Commissioner

28.69 Deputy Commissioner (Appeals)

14.21 Tribunal

18.97 High Court

4. Income Tax Act, 1961 Income Tax Demand 5.57 Income Tax Appellate Tribunal

5. Industrial Dispute Act Labour Cases & Other 4.72 Labour Court

6. Foreign Exchange Management Act Other 46.70 Supreme Court

(x) There are no accumulated losses as at 30th September 2007. The Company has not incurred any cash losses during the year covered by our audit and the immediately

preceding financial year.

(xi) Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues

to a financial institution, bank or to debenture holders during the year.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security

by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit fund Company or nidhi/mutual benefit fund/society. Therefore the Clause (xiii) of paragraph 4 of the Order is not applicable to the

Company.

(xiv) The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments and those

timely entries have generally been made therein. All shares, debentures and other securities have been held by the Company in its own name except to the extent of the

exemption granted under Section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the terms and conditions of guarantees given by the Company for loans taken by others from banks or financial

institutions are, prima facie, not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the term loans raised during the year were applied, on an overall basis, for the purposes for which the loans were

obtained.

(xvii) According to the information and explanations given to us and on our overall examination of the balance sheet of the Company, we report that the Company has not used funds

raised on short term basis for long term investments.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the

Companies Act. 1956.

(xix) The Company has not issued any secured debentures during the year. The Company has created security in respect of debentures issued in earlier years.

(xx) During the year, the Company has not raised any money by way of public issue. The Company has however issued 107,452 Equity Shares on conversion of 1,099 Foreign

Currency Convertible Bonds (FCCBs) of US$ 1,000 each (inclusive of premium).

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.




Partner Partner


Place : Mumbai


16


Particulars Schedule As at As at

No. 30th Sept., 2007 30th Sept., 2006

( Rupees in Million) ( Rupees in Million)

I. SOURCES OF FUNDS

1. Share Holders’ Funds

a. Share Capital 1 2,669.54 2,668.46

b. Share Capital Suspense 1A – 0.004

c. Reserves & Surplus 2 54,114.27 47,722.06

2. Deferred Tax Liability ( Net ) 2,579.00 1,596.86

3. Loan Funds

a. Secured Loans 3 33,435.01 36,083.89

b. Unsecured Loans 4 19,161.35 13,528.05

TOTAL 111,959.17 101,599.32

II. APPLICATION OF FUNDS

1. Fixed Assets 5

a. Gross Block 86,310.84 77,362.11

b. Less : Depreciation 33,766.67 28,470.91

c. Net Block 52,544.17 48,891.20

d. Producing Properties (Net) 650.54 505.17

53,194.71 49,396.37

2. Investments 6 20,924.97 17,811.68

3. Current Assets, Loans & Advances 7

a. Inventories 13,936.44 12,998.62

b. Sundry Debtors 13,142.54 11,172.85

c. Cash and Bank Balances 8,891.08 11,362.55

d. Other Current Assets 227.06 551.05

e. Loans and Advances 12,514.13 7,664.39

48,711.25 43,749.46

Less : Current Liabilities & Provisions 8

a. Current Liabilities 7,939.54 7,670.15

b. Provisions 2,932.22 1,688.04

10,871.76 9,358.19

Net Current Assets 37,839.49 34,391.27

Significant Accounting Policies and Notes to Accounts 15

TOTAL 111,959.17 101,599.32

BALANCE SHEET AS AT 30TH SEPTEMBER, 2007

For KADAM & CO. For and on behalf of the board


U. S. KADAM V. N. DHOOT S. PADMANABHAN

Partner Managing Director Director

Membership No. 31055

VINOD KUMAR BOHRA

Company Secretary

As per our report of even date

For KHANDELWAL JAIN & CO.


SHIVRATAN AGARWAL

Partner

Membership No.104180

Place : Mumbai


17


Particulars Schedule Year ended on Year ended on

No. 30th Sept., 2007 30th Sept., 2006

(Rupees in Million) (Rupees in Million)

I. INCOME

Sales / Income from Operations 87,102.58 75,803.32

Less : Excise Duty 4,248.34 3,615.15

Net Sales 82,854.24 72,188.17

Other Income 9 1,663.62 1,654.44

TOTAL 84,517.86 73,842.61

II. EXPENDITURE

Cost of Goods Consumed/Sold 10 48,981.34 41,627.44

Production & Exploration Expenses 11 9,549.81 9,583.21

Salaries, Wages & Employees’ Benefits 12 1,053.48 946.96

Manufacturing & Other Expenses 13 6,813.88 6,934.07

Interest & Finance Charges 14 3,106.51 2,258.80

Depreciation / Amortisation 5 5,354.59 4,839.99

Less : Transferred from General Reserve – 1,484.52

Less : Transferred from Revaluation Reserve 1,170.71 –

(Refer Note No B-4 of Schedule No.15) 4,183.88 3,355.47

TOTAL 73,688.90 64,705.95

III. Profit before Tax 10,828.96 9,136.66


Current Tax 1,232.70 819.00

Deferred Tax 1,020.18 117.23

Fringe Benefit Tax 23.89 15.41

IV. Profit for the Year 8,552.19 8,185.02

Excess provision for Income Tax for earlier years written back 35.37 3.02

Balance brought forward 8,380.87 4,389.14

Add : Transferred from Debenture/Bonds Redemption Reserve 530.55 –

Addition/Adjustment on amalgamation – (1,763.16)

V. Balance available for appropriation 17,498.98 10,814.02

VI. APPROPRIATIONS

Debenture Redemption Reserve – 12.60

Proposed Dividend - Equity 803.02 773.45

Proposed Dividend - Preference 36.81 33.87

Corporate Tax on Proposed Dividend 142.73 113.23

Transfer to General Reserve 2,000.00 1,500.00

Balance Carried to Balance Sheet 14,516.42 8,380.87

TOTAL 17,498.98 10,814.02

Basic Earnings per Share (Nominal Value Rs.10/- per share) Rs. 38.66 Rs. 36.88

Diluted Earnings per Share (Nominal Value Rs.10/- per share) Rs. 35.70 Rs. 36.88

(Refer Note No.B-13 of Schedule No. 15)


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH SEPTEMBER, 2007






VINOD KUMAR BOHRA

Company Secretary




SHIVRATAN AGARWAL

Partner


Place : Mumbai


18


Year ended on Year ended on

Particulars 30th Sept., 2007 30th Sept., 2006


A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax 10,828.96 9,136.67

Add:

a) Depreciation / Amortisation 4,183.88 3,355.47

b) Interest and Finance Charges 3,106.51 2,258.80

c) Producing Properties written off 833.95 177.36

d) Provision for Leave Encashment 6.83 4.28

e) Provision for Warranty and Maintenance Expenses 20.09 266.54

f) Provision for Gratuity 6.58 28.48

g) Provision for Exchange Rate Fluctuation 1,023.92 -

h) Diminution in value of Investment 40.30 12.34

i) Loss on Sale of Fixed Asset 1.45 17.39

(A) 20,052.47 15,257.33

Less:

a) Interest Received 211.84 276.87

b) Income from Investments and Securities Division 246.06 467.08

(B) 457.90 743.95

Cash flow from Operating Activities before

Working Capital changes (A-B) 19,594.57 14,513.38

Adjustments (including on amalgamation) :

a) Inventories (937.82) (4,268.41)

b) Sundry Debtors (1,969.68) (1,201.66)

c) Other Current Assets 323.99 (360.69)

d) Loans & Advances (4,849.72) 4,111.43

e) Current Liabilities 271.98 1,191.22

Cash flow from Operating Activities (C) 12,433.32 13,985.27

Less: Income Tax Paid 1,072.57 450.67

Less: Fringe Benefit Tax Paid 23.91 17.43

Net Cash flow from Operating Activities (D) 11,336.84 13,517.17

B. CASH FLOW FROM INVESTING ACTIVITIES

Sale of Fixed Assets (Net) 48.95 86.80

Interest Received 211.84 276.87

Income from Investments and Securities Division 246.06 467.08

(E) 506.85 830.75

Less:

Increase in Fixed Assets including Captial Work-in-progress 9,058.96 14,776.86

(including net additions on amalgamation)

Increase in Producing Properties 979.32 103.50

Increase in Investments (Net) 3,153.59 14,389.80

(F) 13,191.87 29,270.16

Net Cash flow from Investing Activities (E-F) (G) (12,685.02) (28,439.41)

C. CASH FLOW FROM FINANCING ACTIVITIES

Increase in Share Capital including on account of amalgamation 1.08 603.20

Increase in Share Capital Suspense on amalgamation - 0.004

Increase in Reserves on amalgamation - 1.50

Securities Premium Received and addition on amalgamation 47.66 93.42

Increase in Secured Term Loans from Banks - 10,134.75

Increase in Unsecured Loans 5,633.31 8,793.37

Increase in Working Capital Loans from Banks 951.48 66.93

(H) 6,633.53 19,693.17

Less:

Decrease in Share Capital Suspense including

on account of amalgamation 0.004 556.83

Amalgamation Adjustment Account - 1,763.17

Decrease in Secured Term Loans from Banks 1,971.42 -

Redemption of Secured Non Convertible Debentures 1,628.94 1,878.79

Decrease in Share Application Money - 95.59

Decrease in Securities Premium on account of

Share issue expenses and premium on convertible bonds 126.80 145.22

Payment of Dividend 809.92 587.75

Corporate Tax on Dividend 113.23 82.35

Interest and Finance Charges Paid 3,106.51 2,258.80

(I) 7,756.82 7,368.50

Net Cash flow from Financing Activities (H-I) (J) (1,123.29) 12,324.67

Net Change in Cash and Cash Equivalents (D+G+J) (2,471.47) (2,597.57)

Opening Balance of Cash and Cash Equivalents 11,362.55 13,960.12

Closing Balance of Cash and Cash Equivalent 8,891.08 11,362.55

CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH SEPT., 2007






VINOD KUMAR BOHRA

Company Secretary




SHIVRATAN AGARWAL

Partner


Place : Mumbai


19


SCHEDULES TO BALANCE SHEET

SCHEDULE - 1 : SHARE CAPITAL

Authorised :

500,000,000 (Previous year 500,000,000) 5,000.00 5,000.00

Equity Shares of Rs. 10/- each

10,000,000(Previous year 10,000,000) 1,000.00 1,000.00

Redeemable Preference Shares of Rs. 100/- each

6,000.00 6,000.00

Issued, Subscribed and Paid-up:

Equity Shares:

221,093,701 (Previous year 220,985,833) Equity Shares

of Rs. 10/- each fully paid up 2,210.94 2,209.86

Of the above:

a) 95,078 (Previous year 95,078) Equity Shares of

Rs.10/- each have been issued on conversion of

Unsecured Optionally Convertible Debentures.

b) 156,438,326 (Previous year 156,437,910) Equity

Shares of Rs.10/- each were allotted pursuant to

amalgamations without payments being received in

cash.

c) 45,777,345 (Previous year 45,777,345) Equity

Shares of Rs.10/- each were issued by way of Euro

issues represented by Global Depository Receipts

(GDR) at a price of US$ 10.00 per share (inclusive

of premium).

d) 107,452 (Previous year NIL) Equity Shares of Rs.10/-

each have been issued on conversion of 1,099

Foreign Currency Convertible Bonds of US$ 1000

each (inclusive of premium )

Less : Calls in Arrears - by others 1.49 1.49

(A) 2,209.45 2,208.37

Preference Shares:

4,523,990 (Previous year 4,523,990) 8% Redeemable 452.40 452.40

Preference Shares of Rs.100/- each fully paid up,

redeemable at par in 3 equal installments on 1st October

2011, 1st October 2012 and 1st October 2013.

76,870 (Previous year 76,870) 8% Redeemable 7.69 7.69


redeemable at par in 3 equal installments on 1st February

2012, 1st February 2013 and 1st February 2014.

(B) 460.09 460.09

Total (A+B) 2,669.54 2,668.46

SCHEDULE - 1A : SHARE CAPITAL SUSPENSE

Equity Shares - 0.004

NIL (Previous year 416) Equity Shares of Rs.10/- each to

be allotted to the shareholders of erstwhile EKL

Appliances Limited pursuant to its amalgamation with

the Company.

Total - 0.004

SCHEDULE - 2 : RESERVES & SURPLUS

Revaluation Reserve

As per last Balance Sheet 9,245.73 9,518.45

Less : Deduction on account of Disposal/

Sale of Revalued Assets 0.98 13.64

Less : Transferred to General Reserve 7,538.89 259.08

Less : Transferred to Profit & Loss Account 1,170.71 -


(A) 535.15 9,245.73

As at As at

30th Sept., 2007 30th Sept., 2006


Capital Subsidy

As per last Balance Sheet 5.50 5.50

(B) 5.50 5.50

Securities Premium Account


Add : Adjusted during the year 47.66 93.42

Less : Share Issue Expenses - 4.90

Less : Premium payable on Redemption

of Convertible Bonds 88.76 98.23

25,523.96 25,565.06

Less : Call and / or allotment money in arrears - by others 16.90 16.90

(C) 25,507.06 25,548.16

Capital Redemption Reserve


(D) 537.50 537.50

Debenture/Bonds Redemption Reserve


Add/(Less) : Transferred from/(to) Profit & Loss Account (530.55) 12.60

(E) 1,812.50 2,343.05

Capital Reserve


Add : Additions on Amalgamation - 1.50

(F) 1.53 1.53

General Reserve

As per Last Balance Sheet 1,659.72 1,385.16

Add : Transferred from Revaluation Reserve 7,538.89 259.08

Add : Transferred from Profit & Loss Account. 2,000.00 1,500.00

Less : Transferred to Profit & Loss Account - 1,484.52

(G) 11,198.61 1,659.72

Profit & Loss Account

As per Account annexed 14,516.42 8,380.87

(H) 14,516.42 8,380.87

Total (A to H) 54,114.27 47,722.06

SCHEDULE - 3 : SECURED LOANS

A. Non-Convertible Debentures 2,356.24 3,985.18

B. Term Loans

i. Rupee Loans from Banks &

Financial Institutions 24,117.33 28,035.06

ii. FCNR-B Loan from Banks 374.92 428.24

C. External Commercial Borrowings 3,803.80 1,662.12

D. Corporate Loan from Banks 82.23 215.01

E. Vehicle Loans from Banks 12.24 21.51

F. Working Capital Loans From Banks 2,688.25 1,736.77

Total 33,435.01 36,083.89

As at As at

30th Sept., 2007 30th Sept., 2006


20


A. Non Convertible Debentures:

Out of the Non Convertible Debentures, those to the extent of :

i. Rs. 613.73 million (Previous year Rs.920.18 million) are secured by Assignment

of / fixed and floating charge on all moneys received/to be received by the Company

in relation to and from the Ravva Joint Venture, including all receivables of the

Company, subject to the charge in favour of the Joint Ventures in terms of the

Production Sharing Contract/Joint Operating Agreement in respect of Ravva Joint

Venture, to the extent necessary.

ii. Rs.640.81 million (Previous year Rs.933.10 million) are secured by first charge

on immovable and movable properties, both present and future, subject to prior

charge on specified movables created/to be created in favour of Company’s Bankers

for securing borrowings for working capital requirements, and ranking pari passu

with the charge created/to be created in favour of Financial Institutions/Banks in

respect of their existing and future financial assistance. Also guaranteed by Mr.

V. N. Dhoot and Mr. P. N. Dhoot.

iii. Rs.211.70 million (Previous year Rs.361.90 million) are secured by way of a first

charge on the entire immovable and movable properties of the Company ranking

pari passu with existing charge holders except prior charge on specified movables

created in favour of Company’s bankers for borrowings of working capital and

exclusive charge created on specific machinery financed/to be financed by the

banker/s and/or financial institution/s and the personal guarantee of Mr. V.N.Dhoot.

iv. Rs.890.00 million (Previous year Rs.1,350.00 million) are secured by unconditional

and irrevocable guarantee given by IDBI (for principle and interest). The said

guarantee assistance, provided by IDBI, is secured by a first charge in favour of

the guarantor, of all the immovable properties, both present & future, and a first

charge by way of hypothecation of all the movables, present & future ranking

pari-passu with existing charge holders, subject to charges created / to be created

in favour of the Bankers on the specified current assets for securing borrowings

for working capital loans. These debentures are also guaranteed by

Mr. V. N. Dhoot.

v. Rs.NIL (Previous year Rs.420.00 million) were secured by third charge on the

properties of the Company. This charge was subject to and subservient to the

mortgages and charges created/to be created in favour of Financial Institutions/

Debentures Trustees/Banks.

The Debenture referred to in (i) to (iv) above are redeemable at par, in one or more

installments on various dates with the earliest redemption being on 15th October,

2007 and last date being 1st January, 2012. These debentures are redeemable as

follows , Rs.1,107.96 million in financial year 2007-08, Rs.732.15 million in financial

year 2008-09, Rs.386.56 million in financial year 2009-10, Rs.86.38 million in

financial year 2010-11, Rs.43.19 million in financial year 2011-12.

B. Term Loans : -

The Term Loans are secured by mortgage of existing and future assets of the Company

and a floating charge on all movables assets, present and future (except book debts),

subject to prior charge of the Bankers on stock of raw materials, finished, semi finished

goods and other movables, for securing working capital loans in the ordinary course of

business, and exclusive charge created on specific items of machinery financed by the

respective lenders. The above charges rank pari passu inter-se for all intents and

purposes. The above loans are guaranteed by Mr. V. N. Dhoot and Mr. P. N. Dhoot. In

addition to the above, a part of term loan from State Bank of India is further secured by

way of pledge of shares of Kitchen Appliances India Ltd. and Applicomp (India) Ltd.

belonging to and held by the Company. A part of loans from banks are secured by the

assignment of fixed and floating charge on all moneys received/to be received by the

Company in relation to and from the Ravva Joint Venture, including all receivables of the

As at As at

30th Sept., 2007 30th Sept., 2006


SCHEDULE - 4 : UNSECURED LOANS

A. From Banks and Financial Institutions

i. Rupee Loan 10,819.99 3,070.50

ii. Foreign Currency Loan 208.59 1,220.91

B. Foreign Currency Convertible Bonds 7,763.80 9,003.15

C. Premium Payable on Redemption on

Foreign Currency Convertible Bonds 267.13 140.33

D. From Others - 0.10

E. Sales Tax Deferral 101.84 93.06

TOTAL 19,161.35 13,528.05

Notes :-

1. Refer Note no. B-7 of Schedule 15.

2. The Company has availed interest free Sales Tax Deferral under Special Incentive

to Prestigious Unit (modified) Scheme. The Rs.93.06 million is repayable in six

equal annual installments commencing from 30th May, 2008. and the balance in

two quarterly installments commencing from 31st December, 2009.

Company, subject to the extent necessary, to the charge in favour of the Joint Venture in

terms of the Production Sharing Contract / Joint Operating Agreement in respect of

Ravva Joint Venture; and the assignment / fixed and floating charge of all the right, title

and interest into and under all project documents, including but not limited to all contracts,

agreements or arrangements which the Company is a part to, and all leases, licenses,

consents, approvals related to the Ravva Joint Venture, insurance policies in the name

of the Company, in a form and manner satisfactory to Trustee.

C. External Commercial Borrowings :-

External Commercial Borrowings are secured by a first charge ranking pari-passu over

all the present and future movable and immovable fixed assets. The loan is further secured

by personal guarantee of Mr. V. N. Dhoot and Mr. P. N. Dhoot in favour of security

trustee.

D. Corporate Loan from Banks : -

Corporate Loan from Banks are partially secured by first charge, partially by second

charge, ranking pari-passu, and the balance by second subservient charge, on the

immovable and movable assets, both present and furture, of the Company. These are

further secured by personal guarantee of Mr. V. N. Dhoot.

E. Vehicle Loans from Banks : -

Vehicle Loans from Banks are secured by way of hypothecation of Vehicles acquired out

of the said loan. The loans are also guaranteed by personal guarantee of Mr. V. N. Dhoot.

F. Working Capital Loans From Banks : -

Working Capital Loans from Banks are secured by hypothecation of the Company’s stock

of raw materials, packing materials, stock-in-process, finished goods, stores and spares,

book debts of Glass Shell Division only and all other current assets of the Company and

personal guarantee of Mr. V. N. Dhoot and Mr. P. N. Dhoot.

Installments of loans from banks and financial institutions falling due within one year

Rs. 4,470.61 million (Previous Year Rs. 3,871.81 million)

SCHEDULE - 5 : FIXED ASSETS (Rupees in Million)

PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

As at Addition on Additions Deduction As at Upto Addition on For the Deduction/ Upto As at As at

30.09.2006 Amalgamation During During 30.09.2007 30.09.2006 Amalgamation Year Adjustment 30.09.2007 30.09.2007 30.09.2006

the Year the Year

TANGIBLE ASSETS

Freehold Land 120.49 - - - 120.49 - - - - - 120.49 120.49

Leasehold Land 47.82 - 0.23 - 48.05 6.70 - 0.97 - 7.67 40.38 41.12

Building 6,896.43 - 278.44 - 7,174.87 1,420.84 - 218.00 - 1,638.84 5,536.03 5,475.59

Leasehold Improvements 38.91 - 0.41 - 39.32 37.43 - 0.95 - 38.38 0.94 1.48

Plant & Machinery* 60,510.05 - 9,136.66 104.04 69,542.67 24,823.61 - 4,638.68 54.44 29,407.85 40,134.82 35,686.44

Furnace 1,992.46 - 2.81 - 1,995.27 1,113.25 - 351.98 - 1,465.23 530.04 879.21

Electrical Installation 138.06 - 11.73 - 149.79 64.57 - 7.90 - 72.47 77.32 73.49

Office Equipments 235.09 - 13.22 1.44 246.87 146.86 - 15.30 0.80 161.36 85.51 88.23

Computer Systems 378.51 - 34.33 1.89 410.95 245.62 - 41.57 1.57 285.62 125.33 132.89

Furniture & Fixtures 156.03 - 6.43 0.85 161.61 89.88 - 8.37 0.52 97.73 63.88 66.15

Vehicles 457.62 - 78.25 2.00 533.87 265.38 - 37.27 1.50 301.15 232.72 192.24

LEASED ASSETS

Computer Systems 6.27 - - - 6.27 4.96 - 1.11 - 6.07 0.20 1.31

INTANGIBLE ASSETS

Goodwill (on amalgamation) 235.98 - - - 235.98 235.98 - - - 235.98 - -

Computer Software 65.62 - 100.00 - 165.62 15.83 - 32.49 - 48.32 117.30 49.79

TOTAL 71,279.34 - 9,662.51 110.22 80,831.63 28,470.91 - 5,354.59 58.83 33,766.67 47,064.96 42,808.43

Capital Work-in-Progress 6,082.77 5,479.21 5,479.21 6,082.77

TOTAL 77,362.11 - 9,662.51 110.22 86,310.84 28,470.91 - 5,354.59 58.83 33,766.67 52,544.17 48,891.20

As at 30th September, 2006 55,786.19 2,432.14 13,687.43 626.42 71,279.34 22,867.70 1,271.80 4,839.99 508.58 28,470.91 42,808.43 -

Capital Work-in-Progress 6,153.68 6,082.77 6,082.77 -

Total as at

30th September, 2006 61,939.87 2,432.14 13,687.43 626.42 77,362.11 22,867.70 1,271.80 4,839.99 508.58 28,470.91 48,891.20 -

*Gross Block of Plant and Machinery includes Rs. 9244.75 million (Previous Year Rs.9,245.73 million) on account of the amount added on revaluation on 01.04.1998 and 01.10.2002.

21


SCHEDULE - 6 INVESTMENTS

FaceAs at 30th September, 2007 As at 30th September, 2006

Value Nos (Rupees in Million) Nos (Rupees in Million)

LONG TERM INVESTMENTS

IN GOVERNMENT & TRUST SECURITIES

Master Gain 32,200 0.41 32,200 0.41

0.41 0.41

QUOTED

IN EQUITY SHARES (Fully Paid up) - TRADE

Trend Electronics Ltd. 10 1,408,800 25.41 1,608,800 29.02

(Formerly Videocon Communications Ltd)

Videocon Appliances Ltd. 10 1,811,748 51.00 1,811,748 66.67

Samtel Electronics Devices Ltd 10 82,000 1.95 82,000 3.14

78.36 98.83

IN EQUITY SHARES (Fully Paid up) - OTHERS

Allahabad Bank 10 643,343 27.46 1,178,409 50.31

Alok industries Ltd. 10 16,750 1.19 - -

Aptech Ltd. 10 14,300 4.93 - -

Arvind Mills Ltd. 10 98,900 4.89 - -

Ashapura Minechem Ltd. 2 9,050 3.34 - -

Crompton Greaves Limited 2 - - 10,000 2.46

Dena Bank 10 - - 129,889 3.51

Indusind Bank Limited 10 125,000 6.55 75,000 3.79

Punjab National Bank Limited 10 7,200 3.81 23,538 9.17

Geekay Exim India Ltd. 10 80,000 0.08 80,000 0.08

Deccan Cement Ltd. 10 189,400 17.99 189,400 17.99

Good Value Marketing Ltd. 10 25,000 0.03 25,000 0.03

Indian Overseas Bank 10 - - 180,400 1.80

Industrial Finance Corpn. Of India Ltd. 10 41,800 2.80 41,800 0.41

Jayaswal Neco Ltd. 10 210,000 6.18 210,000 2.96

Siris Infotech Ltd. 10 13,200 0.01 13,200 0.01

Siemens Ltd. 2 3,130 0.13 3,130 0.13

ICICI Bank Ltd. 10 104,293 98.39 50,381 8.06

Axis Bank Ltd (UTI Bank Ltd.) 10 - - 166,200 3.49

Adlabs Films Ltd. 5 - - 82,500 28.29

Anantraj Industries Ltd. 10 5,000 1.63 5,000 1.63

Asian Electronics Ltd. 10 - - 53,000 28.17

Asian Electronics Ltd. 5 20,000 10.98 - -

Asian Granito India Ltd. 10 100,000 10.58 - -

Bajaj Hindustan Ltd. 1 30,000 5.13 10,000 3.05

Balrampur Chini Mills Ltd. 1 9,600 0.72 - -

BF Utilities Ltd. 5 36,985 88.91 - -

Bharat Earth Movers Ltd. 10 - - 20,500 19.15

Cairn India Ltd. 10 6,372,976 1,019.68 - -

Central Bank of India 10 120,284 12.27 - -

Century Textiles & Industries Ltd. 10 2,975 2.39 - -

GAIL India Ltd. 10 6,000 2.22 - -

Gemini Communication Ltd. 5 10,000 2.22 - -

Gesco Corporation 10 - - 4,000 3.23

Gujrat Ambuja Cement Ltd. 2 - - 19,000 2.12

Gujrat Ambuja Exports Ltd. 2 25,000 0.86 - -

Gujarat Heavy Chemicals Ltd. 10 255,494 38.48 - -

Hindalco Ltd. 1 100,000 17.22 100,000 17.13

Hindustan Construction Company Ltd. 1 1,400 0.19 - -

Hindustan Zinc Ltd 10 2,000 1.34 - -

India Cements Ltd. 10 5,800 1.46 - -

India Infoline Ltd. 10 4,000 3.23 - -

IOL Broadband Ltd 10 12,500 5.61 - -

Infrastructure Development Finance Corp. Ltd. 10 - - 200,000 13.54

ITC Limited 1 100,000 18.98 100,000 18.77

IVR PRIME Urban Developers Ltd. 2 20,000 8.92 - -

J.M.Financial Services Ltd. 10 - - 7,000 5.49

Karnataka Bank Ltd. 10 27,500 5.53 - -

Kotak Mahindra Bank Ltd. 10 8,250 7.37 - -

KPIT Cummins Infosystems Ltd. 10 45,000 5.40 - -

Lanco Infratech Ltd. 10 15,300 4.69 - -

Laxmi Vilas Bank Ltd. 10 15,100 1.37 - -

Lok Housing & Construction Ltd. 10 5,000 0.72 - -

Lumax Industries Ltd. 10 22,990 10.46 - -

Mahindra Gesco Ltd. 10 7,000 4.33 - -

Matrix Labs Ltd 2 174,057 40.59 395,000 104.42

Mindtree Consulting Ltd. 10 2,000 1.02 - -

N.T.P.C. Ltd. 10 100,000 13.53 100,000 13.02

NIIT Technologies Ltd. 10 10,800 3.83 - -

ONGC Ltd. 10 7,500 5.33 5,000 5.33

Parsvnath Developers Ltd. 10 20,000 6.77 - -

Polaris Software Lab Ltd. 5 2,800 0.34 - -

Prithvi Information Solutions Ltd. 10 5,000 1.40 - -

22


Provogue (India) Ltd. 10 238,550 147.42 10,000 3.15

Rallis India Ltd. 10 - - 5,000 1.48

Reliance Energy Ltd. 10 5,000 5.85 50,000 24.18

Reliance Industries Ltd. 10 2,850 6.48 - -

Reliance Petroleum Ltd. 10 230,079 13.80 560,079 33.60

Reliance Natural Resources Ltd. 5 78,650 6.14 - -

Sasken Communication Technologies Ltd. 10 5,000 1.67 - -

Satyam Computer Services Ltd. 2 9,000 4.02 - -

Sriram Urban Infrastructure Ltd. 10 50,000 16.20 - -

S.Kumars Nationwide Ltd. 10 - - 50,000 3.78

SRF Limited 10 51,000 7.41 10,000 2.37

Shree Renuka Sugars Ltd 10 - - 8,000 5.18

State Bank of India 10 4,000 6.53 - -

Steel Authority of India Ltd. 10 32,400 5.39 - -

Tata Iron and Steel Ltd. 10 - - 100,000 53.57

Voltas Co. Ltd. 1 - - 40,000 4.12

Welspun Gujarat Stahi Rohren Ltd. 5 15,200 3.69 - -

Wire & Wireless (India) Ltd. 1 10,000 0.45 - -

Yes Bank Ltd. 10 27,500 5.26 - -

Maharashtra Seamless Ltd. 5 - - 5,000 1.89

Madras Alluminium Ltd. 10 - - 10,000 3.69

Nirlon Ltd. 10 - - 87,500 1.76

Sterlite Industries Ltd. 2 - - 20,000 8.32

1,779.79 514.63

IN MUTUAL FUNDS UNITS

BOI Units 10 1,000,000 10.00 1,000,000 10.00

10.00 10.00

UNQUOTED

1. IN EQUITY SHARES (Fully Paid up) - TRADE

Applicomp (India) Ltd. 10 17,023,500 170.23 17,023,500 170.23

Indian Refrigeration Co. Ltd. 10 1,990,000 19.90 1,990,000 19.90

Kitchen Appliances (India) Ltd. 10 1,156,000 18.27 1,156,000 18.27

Millennium Appliances India Ltd. 10 4,750,000 95.00 4,750,000 95.00

Akai Consumer Electronics India Ltd. 10 35,000 0.35 35,000 0.35

Next Retail India Ltd. 10 10,036,000 100.36 36,000 0.36

(Formerly E-Mart India Ltd.)

Plug-In Sales Ltd. 100 1,900 0.19 - -

TekCare India Pvt.Ltd. 10 1,900 0.02 1,900 0.02

(Formerly Macotax Consultants Pvt.Ltd )

Kentosh Electronics India Pvt. Ltd. 10 1,720 0.02 1,720 0.02

Hyundai Electronics India Ltd. 10 9,500 0.09 9,500 0.09

404.43 304.24

2. IN EQUITY SHARES (Fully Paid up) - OTHERS

Ease Finance Limited 10 4,800 0.96 4,800 0.96

Evans Fraser & Co. (India) Limited 100 6,250 40.63 6,250 40.63

Holzmann Videocon Engineers Limited 10 990,600 - 990,600 0.99

Kay Kay Construction Limited 10 4,500 0.90 4,500 0.90

Bolton Properties Limited 10 112,500 13.66 112,500 13.66

Worli Infrastructures & Developers Private Limited 10 45,000 0.45 45,000 0.45

Videocon SEZ Infrastructures Limited 10 2,500 0.03 - -

Videocon SEZ Infrastructures (Aurangabad) Limited 10 2,500 0.03 - -

Videocon SEZ Infrastructures (West Bengal) Limited 10 2,500 0.02 - -

Videocon SEZ Infrastructures (Pune) Limited 10 2,500 0.02 - -

Videocon Realty Limited 10 2,500 0.02 - -

Kores India Ltd. 10 1,170,000 1.17 - -

Gayatri Projects Ltd. 10 - - 950,000 -

Goa Energy Pvt. Ltd. 10 1,000 0.01 1,000 0.01

The Banaras State Bank Ltd. 100 25,000 0.02 25,000 0.02

Digital Display Devices S.p.a. Euro 1 36,000 1.96 36,000 1.96

Deve Sugars Ltd. 10 125,000 0.12 125,000 0.12

60.00 59.70

3. IN EQUITY SHARES OF SUBSIDIARIES

(Fully Paid up)

Videocon (Mauritius) Infrastructure Ventures Ltd. US$ 1 530,000 22.58 530,000 22.58

Paramount Global Ltd. US$ 1 12,800,000 562.12 12,800,000 562.12

Videocon Global Ltd. US$ 1 2,500 0.12 2,500 0.12

Mars Overseas Ltd. US$ 1 - - 1,000,000 46.33

Sky Billon Trading Ltd. US$ 1 1,072,000 49.61 - -

Eagle Corporation Ltd. US$ 1 1,000 0.05 1,000 0.05

Powerking Corporation Ltd. US$ 1 2,711 0.12 2,711 0.12

Global Energy Inc. US$ 1 1,000 0.04 - -

Venus Corporation Ltd. US$ 1 2,982 0.14 2,982 0.14

Middle East Appliances LLC. RO 1 2,251,800 270.14 2,251,800 270.14

Videocon Display Research Co. Ltd. JPY 50000 1,200 22.98 - -

SCHEDULE - 6 INVESTMENTS (Contd.)



23


Gajanan Electronics & Home Appliances Pvt. Ltd. 10 - - 10,000 0.10

Godavari Consumer Electronics Appliances Pvt. Ltd. 10 10,000 0.10 10,000 0.10

Mayur Household Electronics Pvt. Ltd. 10 10,000 0.10 10,000 0.10

928.10 901.90

4. IN PREFERENCE SHARES (Fully Paid up)

Plug-In Sales Ltd. 100 3,800 0.38 - -

0.38 -

IN DEBENTURES

7.75% Non Convertible Debentures of 100000 100 10.00 100 10.00

Oriental Bank of Commerce

Redeemable Non Convertible Debentures of 1000000 50 50.00 - -

Citi Corp Finance (India) Ltd.

60.00 10.00

OTHER INVESTMENTS

A. In Shares of Co-operative Bank

Bombay Mercantile Co-Op. Bank Ltd. 4,166 0.04 4,166 0.04

The Saraswat Co-Operative Bank Ltd. 1,000 0.01 1,000 0.01

A’nagar Dist. Urban Central Co-Op Bank Ltd. 10 0.001 10 0.001

Janta Sahakari Bank Ltd. 857 0.09 857 0.09

Bharati Sahakari Bank Ltd. 7,670 0.38 7,670 0.38

0.52 0.52

B. In Shares of Co-operative Society 31 0.002 31 0.002

0.52 0.52

SHARE APPLICATION MONEY PENDING ALLOTMENT

A. SUBSIDIARIES

Global Energy Inc. 13.04 -

Eagle Corporation Ltd. 13,575.65 13,575.65

13,588.69 13,575.65

B. OTHERS

Techno Electronics Ltd. 201.18 -

Next Retail India Ltd. 1,000.00 449.64

(Formerly E-Mart India Ltd.)

Kitchen Appliances (India) Ltd. 650.00 -

Sky Appliances Ltd. 150.00 -

Videocon Realty and Infrastructures Ltd. 1,000.00 -

Goa Energy Pvt. Ltd. 300.00 -

3,301.18 449.64

APPLICATION MONEY (UNITS)

LICMF Systematic Asset Allocation Fund 50.00 -

Prudential ICICI Asia Equity Fund 50.00 -

100.00 -

CURRENT INVESTMENTS

UNQUOTED

IN BONDS

8.90% Citi Financial 2009 Bonds 1000000 - - 1,000 1,000.98

- 1,000.98

IN UNITS OF MUTUAL FUNDS

Prudential ICICI Fusion Fund-Growth 10 - - 100,000 1.00

Standard Chartered Enterprises Equity Fund-Growth 10 - - 50,000,000 500.00

Canmulticap Growth Plan 10 5,000,000 50.00 - -

J M Contra Fund-Dividend Plan (243) 10 5,000,000 50.00 - -

LICMF India Vision Fund 10 10,000,000 100.00 - -

L.I.C.Mutual Fund ( Liquid ) 10 - - 19,105,846.389 250.00

L.I.C.Mutual Fund ( Growth ) 10 - - 5,617,409.475 50.00

Principal Cash Management Fund Liquid Option

Insti.Premium Plan - Growth 10 17,404,438 210.83 7,491,346.46 82.69

Principal Floating Rate Fund Fmp Instl.Option Growth Plan 10 2,527,030 30.28 - -

Principal PNB Long Term Equity Fund 3 year Plan Series I 10 200,000 2.00 - -

Principal PNB Long Term Equity Fund 3 year Plan Siries II 10 500,000 5.00 - -

FUIG ICICI Prudential Fusion Fund-Growth 10 5,000,000 50.00 - -

Reliance Long Term Equity Fund-Growth 10 10,000,000 100.00 - -

UTI Wealth Builder Fund-Growth 10 100,000 1.00 - -

Optimix Dynamic Multi-Manager FoF Scheme-Growth 10 2,000,000 20.00 - -

Kotak Mahindra Lifestyle-Growth 10 - - 150,000 1.49

619.11 885.18

TOTAL INVESTMENTS 20,924.97 17,811.68

Aggregate Book Value of quoted Investments 1,862.56 623.87

Aggregate market value of quoted Investments 2,303.83 941.30

Aggregate Book Value of unquoted Investments

/ Application Money 19,062.41 17,187.81




24



Details of Investments acquired and sold/redeemed during the year:

Particulars Qty. Cost

(Rupees in Million)

LICMF Liquid Fund-Growth 396,090,118 5,350.00

Principal Cash Management Fund

Liquid Option Instl. Plan - Growth 724,350,733 8,435.70

ING Vysya Liquid Fund Super Inst.-Growth 27,812,801 300.00

SBI Mutual Fund 8,125,700 95.00

Principal Income Fund Short Term-Inst. Plan-Growth 6,944,207 84.42

Lotus India Liquid Fund-Inst Plus Growth 19,918,175 200.00

Reliance Liquid Fund Cash Plan-Growth 46,187,222 550.00

Kotak Liquid (Institutional Premium)-Growth 5,774,057 86.50

Dbs Chola Short Term Floating Rate-Cumulative 27,079,112 302.00

SBI Magnum Insta Cash Fund 1,793,443 30.00

HSBC Cash Fund Instl Plus-Growth 5,505,861 65.00

Reliance Floating Rate Fund-Growth Plan 20,928,739 250.00

Srei Insfrastructure Finance Ltd.12% 1 0.91

Principal PNB Maturity Plan (FMP-38) 3,027,963 30.28

Principal Floating Rate Fund-SMP 13,406,510 160.00

HSBC Unique Opportunities Fund 500,000 5.00

J M Contra Fund 5,000,000 50.00

UTI Liquid Cash Plan Inst.-Growth 314,077.165 400.00

3i Infotech Ltd. 16,000 4.12

Aarvee Denims & Exports Ltd. 110,673 10.61

Aban Offshore Ltd. 79,189 93.83

Adani Enterprises Ltd. 18,700 5.51

Aditya Birla Nuvo Ltd. 7,000 7.76

Adlabs Films Ltd. 273 0.12

Ai Champdany Industries Ltd. 1,619 0.15

Allsec Technologies Ltd. 5,000 1.33

Alok Industries Ltd. 30,150 2.13

Alstom Projects India Ltd. 10,000 4.52

Ansal Prop & Infrastructure Ltd. 9,000 8.50

Apollo Hospitals Enterprise Ltd. 2,000 1.01

Arvind Mills Ltd. 8,600 0.43

Ashapura Minechem Ltd. 16,000 5.38

Asian Electronics Ltd. 70,459 35.05

Balaji Telefilms Ltd . 5,000 0.77

BF Utilities Ltd. 7,590 22.11

Bharat Forge Ltd. 19,000 5.20

Biocon Ltd. 5,000 2.35

Blue Star Ltd. 13,917 2.38

Bombay Dyeing Ltd. 20,500 13.92

Century Textiles Ltd. 10,000 5.91

Champagne Indage Ltd. 562 0.38

Cmc Ltd. 1,000 1.25

Dish TV India Ltd. 10,000 1.18

Elecon Engineering Co. Ltd. 21,000 6.34

Esab India Ltd. 1,000 0.42

Ess Dee Alum Ltd. 5,000 1.39

Everest Kant Ltd. 25,000 16.72

Gateway Distriparks Ltd. 10,000 1.80

Gayatri Projects Ltd. 952 0.37

Gemini Communications Ltd. 15,000 6.31

Gitanjali Gems Ltd. 10,000 2.47

Great Offshore Ltd. 5,000 3.98

Gujarat Apollo Industries Ltd. 5,000 0.97

Gujarat Heavy Chemicals Ltd. 359,506 64.48

Hindustan Construction Company Ltd. 5,000 0.68

Hindustan Zinc Ltd. 18,500 14.51

Housing Development & Infrastructure Ltd. 5,000 2.93

ICICI Bank Ltd. 239,394 223.56

Ind Bank Merchant Banking Services 47,000 0.98

Indiabulls Real Estate Ltd. 20,000 8.63

Indian Bank 15,400 2.35

IOL Broadband Ltd. 64,490 17.89

Industrial Finance Corporation of India Ltd. 131,450 8.81

Infrastructure Development Finance Company Ltd. 30,000 3.03

Inox Leisure Ltd. 16,000 2.67

IT People India Ltd. 50,000 1.45

J M Financial Services Ltd. 35 0.03

Jai Corp Ltd. 5,819 15.01

Jaiprakash Associates Ltd. 5,000 3.14

Jyoti Structures Ltd. 5,000 0.65

Jyoti Structures Ltd. 25,000 3.23

Kalyani Steels Ltd. 2,560 1.12

Kilburn Engineering Ltd. 10,000 0.88

Kirloskar Electric Co. Ltd. 15,000 1.37

KLG Systel Ltd. 25,000 8.09

Kotak Mahindra Bank 1,749 1.56

KPIT Cummins Infosystems Ltd. 20,000 3.19

Lanco Infratech Ltd. 2,000 0.52

Laxmi Vilas Bank 5,000 0.58

Lok Housing & Construction Ltd. 9,000 3.07

Lumax Industries Ltd. 6,692 2.85

Madras Alluminium Ltd. 1,000 0.56

Mahindra & Mahindra Ltd. 1,248 0.89

Maruti Udyog Ltd. 2,800 2.48

Maxwell Industires Ltd. 313,208 16.45

McNally Bharat Engineering Co. Ltd. 2,755 0.40

Mercator Lines Ltd. 30,000 1.29

Mindtree Consulting Ltd. 2,000 1.65

Nahar Spinning Mills Ltd. 5,000 1.41

Nirlon Ltd. 1,411,750 104.86

OPTO Circuites India Ltd. 30,000 9.17

Orchid Chemicals Ltd. 1,050 0.22

Provogue India Ltd. 357,553 216.49

R. Systems International Ltd. 6,000 1.22

Raban Sun Optics India Ltd. 5,000 0.47

Reliance Capital Ltd. 10,000 6.29

Reliance Communication Ltd. 5,000 2.06

Reliance Energy Ltd. 5,000 5.85

Reliance Industries Ltd. 3,000 6.96

S Kumar Synfab 16,000 1.29

S Kumars Nationwide Ltd. 10,000 0.76

SAK Soft Ltd. 40,000 5.78

Sandesh Ltd. 37,743 8.14

Sasken Communication Technologies Ltd. 11,343 5.23

Shree Renuka Sugars Ltd. 17,000 10.23

Spicejet Ltd. 20,000 1.14

SRF Ltd. 6,000 1.26

Tata Sponge Iron Ltd. 10,000 1.16

Tata Steel Ltd. 153,775 72.69

Tech Mahindra Ltd. 4,000 7.10

Texmaco Ltd. 3,200 2.79

Thermax Ltd. 5,000 1.57

Union Bank of India 14,700 2.13

United Spirits Ltd.(Mcdowell & Co.) 5,000 3.13

Unity Infraprojects Ltd. 11,126 6.18

Vimal Oil & Foods Ltd. 65,327 3.03

Visualsoft Technologies Ltd. 50,000 4.38

Voltamp Transformers Ltd. 26,104 17.81

Voltas India Ltd. 36,079 3.77

Welspun Gujarat Stahi Rohren Ltd. 24,000 3.39

Zee Entertainment Enterprises Ltd. 3,500 1.09

Particulars Qty. Cost

(Rupees in Million)

SCHEDULE - 7 : CURRENT ASSETS,

LOANS & ADVANCES

A. Inventories

(As taken, valued and certified by the Management)

Raw Materials including Consumables,

Stores & Spares 8,119.11 7,359.11

Work in Process 988.43 831.47

Finished Goods 3,172.89 3,015.01

Material in Transit and in Bonded warehouse 1,361.29 1,481.67

Drilling and Production Materials 206.29 226.83

Crude Oil 88.43 84.53

(A) 13,936.44 12,998.62

B. Sundry Debtors (Unsecured)

Outstanding for a period exceeding six months

Considered Good 93.65 104.05

Considered Doubtful 410.96 384.94

504.61 488.99

Less : Provision for doubtful debts 410.96 384.94

93.65 104.05

Others - Considered Good 13,048.89 11,068.80

(B) 13,142.54 11,172.85

C. Cash & Bank Balances

Cash on hand 13.64 10.49

Cheque/Drafts on hand /in Transit 410.38 161.58

Balance With Scheduled Bank

In Current Accounts 1,243.76 733.02

In Fixed Deposits 7,184.74 10,416.26

In Dividend/Interest Warrant Account (Per Contra) 38.10 40.69

Balances with Non-Scheduled Bank in Current Accounts

Agricultural Bank of China - 0.51

(Maximum Balance Outstanding during the year

Rs. 0.51 million, Previous year Rs.3.18 million)

China Merchants Bank 0.46 -

(Maximum Balance Outstanding during the year

Rs.4.99 million, Previous year Rs. NIL)

(C) 8,891.08 11,362.55

D. Other Current Assets

Interest Accrued 59.67 58.48

Insurance Claim Receivable 36.08 31.54

Other Receivable 131.31 459.12

Duty Drawback Receivable - 1.91

(D) 227.06 551.05

E. Loans & Advances (Unsecured, considered good)

Advances to Subsidiary Companies 2,298.16 1,272.48

Advances recoverable in Cash or in kind

or for value to be received 9,786.09 5,683.50

Balance with Central Excise / Customs Department 150.50 531.76

Advance Fringe Benefit Tax (Net of Provision) 0.02 -

Other Deposits 279.36 176.65

(E) 12,514.13 7,664.39

TOTAL( A to E) 48,711.25 43,749.46

As at As at

30th Sept., 2007 30th Sept., 2006


25


As at As at

30th Sept., 2007 30th Sept., 2006



30th Sept., 2007 30th Sept., 2006


SCHEDULE - 8 : CURRENT LIABILITIES & PROVISIONS

A. Current Liabilities

Sundry Creditors * 5,953.76 5,059.50

Bank Overdraft as per books 15.12 55.25

Interest Accrued but not due 293.82 246.71

Other Liabilities 1,638.74 2,268.00

Unclaimed Dividend/Interest (Per Contra) 38.10 40.69

* Including Acceptance of Rs.2,845.28 million

(Previous year Rs. 3,288.49 million) (A) 7,939.54 7,670.15

B. Provisions

Provision for Income Tax (Net of Advance Tax) 472.39 347.63



Provision for Corporate Tax on Proposed Dividend 142.73 113.23

Provision for Warranty and Maintenance Expenses 380.64 360.55

Provision for Exchange Rate Fluctuation 1,023.91 -

Provision for Leave Encashment 37.66 30.83

Provision for Gratuity 35.06 28.48

(B) 2,932.22 1,688.04

TOTAL (A + B) 10,871.76 9,358.19

SCHEDULES TO PROFIT AND LOSS ACCOUNT


30th Sept., 2007 30th Sept., 2006


SCHEDULE - 9 : OTHER INCOME

Interest Income 211.64 276.87

(TDS Rs.3.88 million Previous year Rs.8.59 million)

Income From Investments & Securities Division 205.76 454.73

(TDS Rs.43.24 million, Previous year Rs.56.04 million)


Insurance Claim Received 64.93 49.97

Exchange Rate Fluctuation 883.23 175.00

Miscellaneous Income 297.86 697.87

(TDS Rs.0.02 million Previous year Rs.NIL)

TOTAL 1,663.62 1,654.44

SCHEDULE - 10 : COST OF GOODS CONSUMED/SOLD

A. Material and Components Consumed

Opening Stock 7,359.11 4,862.94

Add : Addition on Amalgamation - 262.73

Add : Purchases 50,060.08 44,894.18

57,419.19 50,019.85

Less : Closing Stock 8,119.11 7,359.11

(A) 49,300.08 42,660.74

B. (Increase)/Decrease in Stock

Closing Stock :



4,249.75 3,931.01

Opening Stock :



3,099.54 2,268.09



831.47 629.62

3,931.01 2,897.71

(B) (318.74) (1,033.30)

TOTAL (A+B) 48,981.34 41,627.44

SCHEDULE - 11 : PRODUCTION &

EXPLORATION EXPENSES - OIL & GAS

Production Expenses 358.41 241.92

Royalty 384.83 393.96

Cess 566.53 543.25

Production Bonus 107.80 191.87

Government Share in Profit Petroleum 6,763.18 7,861.84

Abandonment Costs 47.64 61.24

Producing Properties Written Off 833.95 177.36

Exploration Expenses 487.47 111.77

TOTAL 9,549.81 9,583.21

SCHEDULE - 12 : SALARY, WAGES &

EMPLOYEES’ BENEFITS

Salary, Wages & Other Benefits 882.85 799.69

Contribution to Provident and other Funds 72.80 57.58

Staff Welfare 97.83 89.69

TOTAL 1,053.48 946.96

SCHEDULE - 13 : MANUFACTURING & OTHER EXPENSES

Power, Fuel & Water 731.61 668.12

Freight & Forwarding 958.76 758.52

Rent 135.23 45.54

Rates & Taxes 129.74 138.63

Repairs to Building 31.74 27.23

Repairs to Plant & Machinery 95.24 66.06

Repairs & Maintenance-others 54.37 47.60

Insurance Expenses 107.90 147.37

Advertisement & Publicity 965.46 1,064.58

Sales Promotion Expenses 190.11 167.09

Discount & Incentive Schemes 1,990.38 2,131.02

Bank Charges 265.21 288.72

Auditiors’ Remuneration 8.33 7.76

Donation 71.58 71.40

(Includes Amount Paid to Rashtriya Janata Dal

Rs. 5.00 million (Previous year Rs.5.00 million to

Nationalist Congress Party, Rs.5.00 million to

Rashtriya Janata Dal and Rs.20.00 million to

All India Congress Committee )

Directors’ Sitting Fees 1.18 0.73

Legal & Professional Charges 128.09 245.46

Royalty 72.14 80.00

Printing & Stationery 21.96 33.29

Warranty and Maintenance Expenses 581.48 540.67

Loss on Sale of Fixed Assets 1.45 17.39

Bad Debts Written off 27.73 32.24

Technical Know-How Fees - 8.71

Miscellaneous Expenses 244.19 345.94

TOTAL 6,813.88 6,934.07

SCHEDULE - 14 : INTEREST & FINANCE CHARGES

On Fixed Period Borrowings 2,709.99 1,745.22

On Others 396.52 513.58

TOTAL 3,106.51 2,258.80

SCHEDULE - 15 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A] SIGNIFICANT ACCOUNTING POLICIES :-

1. Basis of Accounting:

a) The financial statements are prepared under historical cost convention, except for

certain Fixed Assets which are revalued, using the accrual system of accounting in

accordance with the accounting Principles Generally Accepted in India (Indian GAAP)

and the requirements of the Companies Act, 1956, including the mandatory Accounting

Standards issued by the Institute of Chartered Accountants of India, as referred to in

Section 211 (3C) of the Companies Act, 1956.

b) Use of Estimates

The preparation of financial statements requires the management of the Company to

make estimates and assumptions that affect the reported balances of assets and

liabilities and disclosures relating to the contingent liabilities as at the date of the

financial statements and reported amounts of income and expenses during the year.

Example of such estimates include provisions for doubtful debts, employee retirement

benefits plans, provision for income tax, accounting for contract costs expected to

be incurred to complete software development and the useful lives of fixed assets.

2. Fixed Assets:

a) Fixed Assets are stated at actual cost, except for certain fixed assets which have

been stated at revalued amounts, less accumulated depreciation / amortisation and

impairment loss, if any. The actual cost is inclusive of freight, installation cost, duties,

taxes, financing cost and other incidental expenses but net of Modvat/Cenvat/Value

added tax. Exchange difference, if any, in respect of liabilities incurred to acquire

fixed assets is adjusted to the carrying amount of respective fixed assets.

b) Capital Work in Progress is carried at cost, comprising of direct cost, attributable

interest and related incidental expenditure. The advances given for acquiring fixed

assets are shown under Capital Work in Progress.

3. Joint Ventures for Oil and Gas Fields:

In respect of joint ventures in the nature of Production Sharing Contracts (PSC) entered

into by the Company for oil and gas exploration and production activities, the Company’s

share in the assets and liabilities as well as income and expenditure of Joint Venture

Operations are accounted for according to the Participating Interest of the Company as per

the PSC and the Joint Operating Agreements on a line-by-line basis in the Company’s

Financial Statements.

4. Exploration, Development and Production Costs:

The Company follows the “Successful Efforts Method” of accounting for oil and gas

exploration, development and production activities as explained below:

a) Exploration and production cost are expensed in the year/period in which these are

incurred.

b) Development costs are capitalised and reflected as “Producing Properties”. Costs

include recharges to the Joint Venture by the Operator/Affiliate in respect of the

actual cost incurred and as set out in the Production Sharing Contract (PSC).

Producing Properties are depleted using the “Unit of Production Method”.

5. Abandonment Costs:

Abandonment Costs relating to dismantling, abandoning and restoring offshore well sites

and allied facilities are provided for on the basis of “Unit of Production Method”. Aggregate

26


abandonment costs to be incurred are estimated based on technical evaluation by experts.

6. Depreciation and Amortisation:

The Company provides depreciation on fixed assets held in India on written down value

method in the manner and at the rates specified in the Schedule XIV to the Companies Act,

1956 except a) on Fixed Assets of Consumer Electronics Divisions other than Glass Shell

Division and; b) on office buildings acquired after 01.04.2000, on which depreciation is

provided on straight line method at the rates specified in the said Schedule. Depreciation

on fixed assets held outside India is calculated on straight line method at the rates prescribed

in the aforesaid Schedule or based on useful life of assets whichever is higher. Producing

Properties are depleted using the “Unit of Production Method”. Leasehold Land is amortised

over the period of lease.

The depreciation on revised carrying amount of fixed assets arising on account of translation

of Foreign Currency Loans availed in respect of the Fixed Assets and on revaluation of

assets is provided as aforesaid over the residual useful life of the respective assets.

Intangibles: Intangible assets are amortised over a period of five years.

7. Impairment of Assets :

The Fixed Assets or a group of assets (Cash generating unit) and Producing Properties are

reviewed for impairment at each Balance Sheet date. In case of any such indication, the

recoverable amount of these assets or group of assets is determined, and if such recoverable

amount of the asset or cash generating unit to which the asset belongs is less than its

carrying amount, the impairment loss is recognised by writing down such assets to their

recoverable amount. An impairment loss is reversed if there is change in the recoverable

amount and such loss either no longer exists or has decreased.

8. Investments:

a) Current Investments : Current Investments are carried at lower of cost or quoted/fair

value.

b) Long Term Investments : Quoted Investments are valued at cost or market value

whichever is lower. Unquoted Investments are stated at cost. The decline in the

value of the unquoted investment, other than temporary, is provided for.

Cost is inclusive of brokerage, fees and duties but excludes Securities Transaction Tax.

9. Inventories:

Inventories including crude oil stocks are valued at cost or net realisable value whichever

is lower. Cost of inventories comprises all costs of purchase, conversion and other costs

incurred in bringing the inventories to their present location and condition. Cost is

determined on Weighted Average basis.

10. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production

of an qualifying asset are capitalised as part of the cost of that asset. Other borrowing

costs are recognised as an expense in the period in which they are incurred.

11. Excise and Customs Duty:

Excise Duty in respect of finished goods lying in factory premises and Customs Duty on

goods lying in customs bonded warehouse are provided for and included in the valuation

of inventory.

12. MODVAT/ CENVAT/Value Added Tax:

Modvat/Cenvat/Value Added Tax Benefit is accounted for by reducing the purchase cost of

the materials/fixed assets.

13. Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of

ownership.

b) Sale of Crude Oil and Natural Gas are exclusive of Sales Tax. Other Sales/turnover

includes sales value of goods, services, excise duty, duty drawback and other

recoveries such as insurance, transportation and packing charges but excludes sales

tax and recovery of financial and discounting charges.

c) Insurance, duty drawback and other claims are accounted for as and when admitted

by the appropriate authorities.

14. Foreign Currency Transactions:

a) Transactions in foreign currencies are recorded at the exchange rate prevailing on

the date of transactions. Current Assets and Current Liabilities are translated at the

year end rate. The difference between the rate prevailing on the date of transaction

and on the date of settlement as also on translation of Current Assets and Current

Liabilities at the end of the year is recognised, as the case may be, as income or

expense for the year.

b) Foreign Currency liabilities in respect of loans availed for fixed assets and outstanding

on the last day of the financial year are translated at the exchange rate prevailing on

that day and any loss or gain arising out of such translation is adjusted to the cost of

the fixed assets and depreciation is also charged/adjusted on such differences.

15. Translation of the financial statements of foreign branch:

a) Revenue items are translated at average rates.

b) Opening and closing inventories are translated at the rate prevalent at the

commencement and close, respectively, of the accounting year.

c) Fixed assets are translated at the exchange rate as on the date of the transaction.

Depreciation on fixed assets is translated at the rates used for translation of the

value of the assets to which it relates.

d) Other current assets and current liabilities are translated at the closing rate.

16. Retirement Benefits:

a) Contributions to Provident Fund and Family Pension Scheme are accounted for on

accrual basis and charged to Profit & Loss Account.

b) The Company’s employees, except for employees of units at Shahjahanpur, Dist.

Alwar, Rajasthan and at Butibori Dist. Nagpur, Maharashtra, are covered under the

Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation

of India. The Company accounts for gratuity liability equivalent to the premium amount

payable to Life Insurance Corporation of India every year, which is based on actuarial

valuation. The liability with respect to the gratuity for the employees of units at

Shahjahanpur, Dist: Alwar, Rajasthan and at Butibori Dist: Nagpur, Maharashtra are

accounted/ provided for on the basis of actuarial valuation at year end.

c) Liability on account of leave encashment in respect of employees of Glass Shell unit

at village Chhavaj, Dist.Bharuch, Gujrat, unit at Shahjahanpur Dist. Alwar, Rajasthan,

and unit at Butibori Dist. Nagpur, Maharashtra, is provided for on actuarial valuation

basis and in respect of other employees to the extent encashable as at the end of the

financial year as per rules of the Company.

17. Taxation:

Income tax comprises of current tax, deferred tax and Fringe Benefit tax. Provision for

current income tax and fringe benefit tax is made on the assessable income/benefits at the

rate applicable to relevant assessment year. Deferred tax assets and liabilities are recognised

for the future tax consequences of timing differences, subject to the consideration of

prudence. Deferred tax assets and liabilities are measured using the tax rates enacted or

substantively enacted by the balance sheet date. The carrying amount of deferred tax asset/

liability are reviewed at each Balance Sheet date and recognised and carried forward only

to the extent that there is a reasonable certainty that the asset will be realised in future.

18. Share Issue Expenses:

Share issue expenses are written off to Securities Premium Account.

19. Premium on Redemption of Bonds / Debentures:

Premium on Redemption of Bonds / Debentures are written off to Securities Premium

Account.

20. Research and Development:

Revenue expenditure pertaining to Research and Development is charged to revenue under

the respective heads of account in the period in which it is incurred. Capital expenditure, if

any, on Research and Development is shown as an addition to Fixed Assets under the

respective heads.

21. Accounting for Leases:

Where the company is lessee

a) Operating Leases : Rentals in respect of all operating leases are charged to Profit &

Loss Account.

b) Finance Leases :

(i) Rentals in respect of all finance leases entered before 1st April, 2001 are charged

to Profit & Loss Account.

(ii) In accordance with Accounting Standard - 19 on “Accounting for Leases” issued

by the Institute of Chartered Accountants of India, assets acquired under finance

lease on or after 1st April, 2001, are capitalised at the lower of their fair value

and present value of the minimum lease payments and are disclosed as “Leased

Assets”.

22. Warranty:

Provision for the estimated liability in respect of warranty on sale of consumer electronics

and home appliances products is made in the year in which the revenues are recognised,

based on technical evaluation and past experience.

23. Prior Period Items:

Prior period items are included in the respective heads of accounts and material items are

disclosed by way of notes to accounts.

24. Provision, Contingent Liabilities and Contingent Assets:

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised

when there is a present obligation as a result of past events and it is probable that there will

be an outflow of resources.

Contingent Liabilities are disclosed by way of Notes to Accounts. Disputed demands in

respect of Central Excise, Customs, Income tax and Sales Tax are disclosed as contingent

liabilities. Payment in respect of such demands, if any, is shown as an advance, till the final

outcome of the matter.

Contingent assets are not recognised in the financial statements.

25. Other Accounting Policies:

These are consistent with the generally accepted accounting practices.

B] NOTES TO ACCOUNTS :-

As at As at

30th Sept., 2007 30th Sept., 2006

(Rs. In Million) (Rs. In Million)

1. Contingent Liabilities not provided for:

a) Letters of Guarantees 30,905.62 25,189.10

Includes Bank Guarantees given to Sales

Tax Department Rs. 8.21 million (Previous year

Rs. 12.55 million) against demand stated in ‘g’ below

b) Letters of Credit opened 3,593.37 1,288.86

c) Customs Penalty - Stayed by High Court 11.85 11.85

d) Customs Duty demands under dispute 95.96 94.42

[Amount paid under protest Rs. 0.40 million

(Previous year Rs. 3.94 million)]

e) Income Tax demands under dispute 102.16 100.25

[Amount paid under protest Rs.102.16 million

(Previous year Rs.100.25 million)]

f) Excise Duty and Service Tax demand under dispute 221.81 387.17

[Amount paid under protest Rs.49.21 million


g) Sales Tax demands under dispute 213.41 243.74

[Amount paid under protest Rs. 42.42 million


h) Others 51.42 47.91

i) Disputed Income Tax demand amounting to Rs. 22.29 million in respect of certain payment

made by Ravva Oil & Gas Field Joint Venture is currently pending before the Income Tax

Appellate Tribunal. The ultimate outcome of the matter cannot presently be determined

and no provision for any liability that may result has been made in the accounts as the

same is subject to agreement by the members of the Joint Venture. Should it ultimately

become payable, the Company’s share as per the participating interest would be upto Rs.

5.57 million.

2. a) There was a dispute regarding (i) deductibility of Oil and Natural Gas Corporation Ltd.

(ONGC) Carry while computing the Post Tax Rate of Return (PTRR) under the Ravva

Production Sharing Contract (PSC); (ii) deductibility of provision of Site Restoration Costs

27


for computation of Cost Petroleum and PTRR; (iii) deductibility of inventory purchased for

computation of Cost Petroleum and PTRR; (iv) deductibility of Notional Dividend Distribution

Tax under the Income-tax Act, 1961 for computation of PTRR; and (v) deductibility of

Deposits, Advances and Pre-payments made for the purpose of Petroleum Operations in

the business of Ravva Oil & Gas Field for computation of Cost Petroleum and PTRR. The

Dispute was referred to an International Arbitration in accordance with the provisions of

the Ravva PSC. Vide the interim award dated 31st March 2005, the Tribunal has upheld the

Company’s claims stated in (i) and (v) above whereas the claim of the Company stated in

(ii), (iii) and (iv) above were rejected by the Tribunal.

While accepting the Interim Award, the Company computed and submitted the calculation

on 31st May 2005 to Government of India (GOI) indicating the amount payable by the

Company after applying the said Arbitration Award at US$ 27.02 million equivalent to Rs.

1,081.88 million, which was not accepted by GOI and it claimed that the Company needs to

pay US$ 43.72 million equivalent to Rs. 1,750.55 million and interest thereon applying the

same Arbitration Award. The Company filed a supplementary application on 7th July 2005

followed by an amendment application on 8th August 2005 with the Arbitration Tribunal

with a prayer to determine the correct amount payable to GOI as well as to determine the

interest, if any, payable on the same to GOI. Pending the final decision of the Hon’ble

Arbitral Tribunal, the Company has accounted for and paid the sum of US$ 43.72 million

equivalent to Rs. 1,750.55 million to GOI on ad hoc basis.

The GOI has further filed an affidavit on 10th May 2005 before the Kuala Lumpur High

Court in Malaysia challenging the Arbitration Award and praying for setting aside the Partial

Award dated 31st March 2005 only in respect of ONGC Carry Issue whereas the Company

has challenged the jurisdiction of the Kuala Lumpur High Court and therefore the

maintainability of such an appeal at that Court.

b) There is a dispute between the Company and GOI with regard to the computation of interest

on delayed payment of profit petroleum to the extent of US$ 67,636 equivalent to Rs. 2.71

million. The Company has filed an Interim Application on 7th July 2005 before the Hon’ble

Arbitral Tribunal for final determination of such amount, pending which no provision has

been made by the Company.

c) There is a dispute regarding the rate of conversion from US$ into Indian rupees applicable

to the Nominees of the GOI for the purpose of payment of amount of the invoices for sale

of the Crude Oil by the Company under the Ravva PSC. The dispute was referred to an

International Arbitration in accordance with the provisions of the Ravva PSC. Vide the

interim award dated 31st March 2005, the Tribunal has partly upheld the Company’s claim.

While accepting the Award, the Company has worked out and submitted a computation on

30th June 2005 to GOI indicating the amount receivable at Rs.121.43 million being the

amount short paid by GOI nominees up to June 19, 2005 and interest thereon also calculated

up to 19th June 2005.The Company further vide its letter dated 22nd August 2005 updated

its claim indicating the total amount receivable from GOI Nominees at Rs.124.42 million

being the amount short paid by GOI nominees up to 31st July 2005 and interest thereon

also calculated up to 31st July 2005. However, GOI and the nominees of GOI have rejected

the computation and claim made by the Company. The Company has filed a supplementary

application on 7th July 2005 and an amendment application on 8th August 2005 with the

Arbitration Tribunal with a prayer to determine the correct amount payable by GOI/its

Nominees as well as to determine the interest, if any, payable on the same. The GOI has

filed an Original Miscellaneous Petition (OMP) 329 of 2006 dated 20th July 2006 before

Hon’ble Delhi High Court challenging the award in respect of this Dispute. Another OMP

223 of 2006 dated 9th May 2006 has been filed by GOI’s nominees HPCL and BRPL in the

Hon’ble Delhi High Court challenging the Partial Award dated 31st March 2005 in respect

of Conversion/Exchange Rate Matter. Both OMP 223 of 2006 are presently sub-judice

before the Hon’ble Delhi High Court. The GOI nominees continue to make payments at the

exchange rate without considering directive from the Hon’ble Arbitral Tribunal in this regard.

d) GOI has filed OMP 255 of 2006 dated 30th May 2006 before the Hon’ble Delhi High Court

under section 9 of the Arbitration and Conciliation Act for change of situs of arbitration

from London (U.K.) to Kuala-Lumpur (Malaysia). GOI has challenged London as the

permanent seat of arbitration for resolution of disputes under the Ravva PSC and has

claimed for declaration of Kuala-Lumpur as the permanent seat of arbitration whereas the

Company honours the award dated 15th November 2003 of the Hon’ble Arbitral Tribunal,

passed with mutual consent of both the GOI and the Company, permanently fixing the seat

of Arbitration at London in respect of disputes stated in (a),(b), and (c) above. The Hon’ble

Arbitral Tribunal vide its letter dated 28th March 2007 has indicated that it shall contiune

with the arbitration proceedings, in respect of the disputes referred above, after receiving

the judgement of the Hon’ble Delhi Court in OMP 255 of 2006.

e) In respect of the Disputes stated in (i) and (ii) of (a) above, the GOI has vide its letter dated

3rd November 2006 now raised a collective demand of Rs. 334.13 Million on account of

additional profit petroleum payable and interest on delayed payments of profit petroleum

calculated up to 30th September 2006 pursuant to the Partial Arbitral Award dated 31st

March 2005 in the Dispute stated above at (a) and Interim Award dated 12th February

2004 and Partial Award dated 23rd December 2004 in the Dispute stated above at (b). The

Company has disputed such demand and is instead seeking refund of USD 16.70 Million

equivalent to Rs. 668.67 million excess paid by the Company to the GOI with interest

thereon.

Any further sum required to be paid or returnable in respect of dispute above at (a) to (e)

in accordance with the determination of the amount by Hon’ble Arbitral Tribunal/High

Courts in this behalf shall be accounted for on the final outcome in this regard.

3. Estimated amount of contracts remaining to be executed on Capital account and not provided for

(net of advances) Rs.623.50 million (Previous year Rs. 37.80 million).

4. The gross block of fixed assets includes Rs.9,244.75 million (Previous year Rs. 9,245.73 million)

on account of revaluation of fixed assets carried out in the past on 1st April 1998 and 1st October

2002. The additional depreciation consequent upon revaluation of fixed assets is being charged

to Profit and Loss account. Hitherto, an amount equivalent to the said additional depreciation

was being withdrawn from General Reserve and credited to Profit and Loss Account. From this

year, the Company has changed this accounting policy and the amount equivalent to the such

additional depreciation is being withdrawn from Revaluation Reserve and credited to the Profit

and Loss Account.

Consequent to this change in policy the cumulative amount transferred from General Reserve on

account of additional depreciation relating to revaluation of fixed assets upto 30th September

2006 amounting to Rs.7,538.89 million has been transferred from Revaluation Reserve Account

to General Reserve Account.

This change in Accounting Policy has no impact on the Profit for the Year.

5. During the year certain revalued assets have been disposed off. As required by Accounting

Standard - 10 “Accounting for Fixed Asset”, loss on disposal of such assets to the extent of

Rs.0.98 million (Previous year Rs.13.64 million) is directly charged to Revaluation Reserve relating

to the increase which was previously recorded as a credit to Revaluation Reserve.

6. Capital Work in Progress includes advances for capital assets Rs.646.40 million (Previous year

Rs. 145.58 million), Interest and other finance charges capitalised during the year Rs.582.23

million (Previous year Rs. 408.81 million) and is net of decrease in rupee liability due to Fluctuation

in Exchange Rate Rs 678.89 million (Previous year Rs. 69.64 million).

7. A) The Company had, during the year 2006, issued

a) 90,000 Foreign Currency Convertible Bonds of US$ 1000 each (Bonds) due on 7th March,

2011 [outstanding Bonds 89,000 (Previous year 90,000)].

i The bonds are convertible at the option of the bondholders at any time on and after

20th March 2006 upto the close of business on 28th February, 2011 at a fixed

exchange rate of Rs.44.145 per 1 US$ and at initial conversion price of Rs.545.24

per share being at premium of 15% over the reference share price. The conversion

price shall be adjusted downwards in the event that the average closing price of

shares for 15 consecutive trading days immediately prior to the reset date is less

than conversion price, subject to a floor price of Rs. 410/- as adjusted in accordance

with the anti-dilution provisions.

ii The Bonds are redeemable in whole but not in part at the option of the company on

or after 7th February, 2009 but prior to 28th February, 2011 if aggregate value on

each of 30 consecutive trading days ending not earlier than 14 days prior to the date

upon which notice of such redemption is given was at least 130% of the accreted

principal amount.

iii The Bonds are redeemable at maturity date on 7th March, 2011 at 116.738% of its

principal amount, if not redeemed or converted earlier.

b) 105,000 Foreign Currency Convertible Bonds of US$ 1000 each (Bonds) due on 25th July

2011.[outstanding Bonds 104,901 (Previous year 105,000).]

i The bonds are convertible at the option of the bondholders at any time on or after

2nd September 2006 until 18th July 2011 except for certain closed periods, at a

fixed exchange rate of Rs.46.318 per 1 US$ and at initial conversion price of Rs.511.18

per share being at premium of 22% over reference share price. The conversion price

shall be adjusted downwards in the event that the average closing price of shares for

15 consecutive trading days immediately prior to the reset date is less than conversion

price, subject to a floor price of Rs. 410/- as adjusted in accordance with the anti-

dilution provisions.

ii Redeemable in whole but not in part at the option of the Company on or after 24th

August 2009, if aggregate value on each of 30 consecutive trading days ending not

earlier than 14 days prior to the date upon which notice of such redemption is given

was at least 130% of the accreted principal amount.

iii Redeemable at maturity date on 25th July, 2011 at 127.65% of its principle amount,

if not redeemed or converted earlier.

B) During the year, the holders of 1099 Bonds have exercised their option and have converted

the Bonds into Equity Shares at the fixed rate of exchange. In view of the above and

considering the uncertainty of the number of bond holders exercising the option of

conversion at the fixed exchange rate and uncertainity of foreign exchange rate prevailing

on the dates of redemption, a provision of Rs 1,023.91 million being the amount of foreign

exchange fluctuation gain on FCCB during the year, has been made in the accounts in

accordance with the requirement of Accounting Standard 29-Provisions, Contingent

Liabilities and Contingent Assets.

C) Subsequent to the year end, 85,250 Bonds have been converted into 8,339,350 equity

shares of Rs.10/- each on exercise of the option by the bond holders.

8. The Company has made a provision of Rs.1,231.70 million (Previous year Rs.818.00 million)

towards Current Income Tax, after taking into consideration, the benefits admissible under the

provisions of the Income Tax Act,1961 and the same is, in the opinion of the Management,

adequate. The Company has also made a provision of Rs. 1.00 million (Previous year Rs.1.00

million) towards Wealth Tax.

As at As at

30th Sept., 2007 30th Sept., 2006


9. The major components of deferred tax liabilities/

assets are as under:

A. Deferred Tax Liabilities

Related to Depreciation on Fixed

Assets & amortisation 5,292.65 2,798.13

5,292.65 2,798.13

B. Deferred Tax Assets

i) Related to Unabsorbed Depreciation and

Business Loss 651.73 1,139.23

ii) Expenses charged in the financial

statements but allowable as deduction in

future years under the Income Tax Act, 1961 19.63 21.30

iii) Diminution in value of investments charged

in Profit & Loss Account 54.84 40.74

iv) Tax credit available u/s 115JAA 1,011.88 -

v) Other 975.57 -

2,713.65 1,201.27

Net Deferred Tax Liability 2,579.00 1,596.86

28


10. Joint Venture Disclosure:

Unincorporated Joint Venture

a) Ravva Oil & Gas Field:

The Production Sharing Contract (PSC) in respect of Ravva Oil and Gas Field was entered

into on 28th October 1994 (Effective Date) between the President of India on behalf of the

Government of India and contractor parties viz. Oil and Natural Gas Corporation Ltd, erstwhile

Petrocon India Limited (now amalgamated with the Company), Cairn Energy India Pty

Limited and Ravva Oil (Singapore) Pte. Ltd. The contractor parties have pursuant to the

PSC, entered into a Joint Operating Agreement on the Effective Date. Cairn Energy India

Pty Ltd. is the Operator. The participating interest of the Company in the said PSC is 25%.

b) The Consortium comprising the Company, Oilex NL Australia, GAIL India Ltd., Hindustan

Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. has been awarded the

Block #56, on the Eastern Plank of the Central Salt Producing Oil Field in Oman. The

Exploration Production Sharing Agreement and Joint Operating Agreement has been

executed on 28th June, 2006. The exploration drilling would be commenced after the

acquisition of additional seismic data. The Participating interest of the Company in the said

venture is 25%. The Capital Commitments of the Company based on estimated minimum

work programme for first exploration period of three years in relation to its participating

interest is Rs. 251.04 million (Previous year Rs.344.43 million).

c) Great Artesian Oil and Gas Ltd (GOG) holds 100% of EPP 27 offshore Otway Basin, South

Australia which is in year 6 of the permit term. The Company, Oilex NL, Gujarat State

Petroleum Corporation Ltd. and GOG have entered into Farm-in agreement and Joint

Operating Agreement in February, 2006.The acquisition of 2D Seismic Data and drilling of

one exploration well is in progress. The participating interest of the Company is 20%. The

minimum work programme proposed in the bid application for seismic survey, data

processing and drilling of one exploration well involves capital commitment in relation to

its participating interest of Rs. 171.64 million (Previous year Rs.194.53 million).

d) The Consortium comprising the Company, Oilex NL, Australia, Gujarat State Petroleum

Corporation Ltd, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation

Ltd. has been awarded a Block WA-388-P for a term of 6 years from Government of Western

Australia. Joint Operating Agreement has been signed by all of Joint venture parties in

March 2007. The acquisition of Seismic Data is in progress. The participating interest of

the Company is 20%. The Capital Committments of the Company based on six year work

program in relation to its participating interest is Rs.163.30 million (Previous year

Rs. NIL).

e) The Consortium comprising the Company and Bharat Petro Resources Limited (BPRL), a

wholly owned subsidiary of Bharat Petroleum Limited, have entered into an agreement

with EnCana Corporation and 749739 Alberta Limited (“Vendors”) for purchase from

Vendors, 100% equity of EnCana Brasil Petróleo Limitada, (EBPL) for a consideration of

approximately US$ 165 million. The effective date of the agreement has been agreed to be

January 01, 2007. Closing of the transaction is subject to normal closing conditions and

regulatory approvals. EBPL has interests in four concessions with ten deep water offshore

exploration blocks in Brazil. The Company and BPRL are equal partners in the consortium.

At present the regulatory authorities in Brasil are reviewing the application of EBPL for

granting its approval for change of control of EBPL.”

The Financial Statements reflect the share of the Company in the assets and the liabilities

as well as the income and the expenditure of Joint Venture Operations on a line by line

basis. The Company incorporates its share in the operations of the Joint Venture based on

statements of account received from the Operator. The Company has, in terms of Accounting

Policy No. A-7 above, recognised abondonment costs based on the latest technical

assessment of current costs available with the Company as cost of producing properties

and has been providing Depletion thereon under ‘Unit of Production’ method as part of

Producing Properties in line with Guidance Note on Accounting of Oil and Gas Producing

Activities issued by the Institute of Chartered Accountants of India.

11. The company has kept the investment activities separate and distinct from the normal business.

Consequently, all the income and expenditure pertaining to investment activities have been

allocated to the Investments & Securities Division and the income/loss after netting off the related

expenditure has been shown as “Income/(Loss) from Investments & Securities Division” under

“Other Income”.

For the For the

year ended year ended

30th Sept., 2007 30th Sept., 2006


12. The Income from Investments and Securities

Division includes:

i. Dividends:

on Long Term Investments 15.71 15.35

on Current Investments 1.28 -

ii. Debenture/Bond - Interest/Premium:

on Long Term Investments (TDS Rs.0.17

million (Previous year Rs.3.19 million)) 8.03 14.20

iii. Gain / (Loss) on Sale of Investment:

Long Term 492.11 172.12

Current 254.78 (14.77)

13. Earnings Per Share:

i. Net Profit attributable to Equity Shareholders

Net Profit as per Profit & Loss Account 8,552.19 8,185.02

Add: Excess provision of Income Tax for

earlier year written back 35.37 3.02

8,587.56 8,188.04

Less : Dividend on Preference Shares

including Tax on the same 43.06 38.62

Net Profit attributable to Equity Shareholders 8,544.50 8,149.42

including exceptional Items

Less : Exceptional Items - -

For the For the


30th Sep, 2007 30th Sep, 2006


Net Profit attributable to Equity Shareholders 8,544.50 8,149.42

excluding exceptional Items

Add : Changes (net) Related to FCCBs 22.30 -

Adjusted Net Profit for Diluted EPS 8,566.80 8,149.42

ii. Weighted Average number of equity shares

for Basic EPS 221,019,058 220,986,249

Weighted Average number of equity shares

for Diluted EPS 239,963,551 220,986,249

iii. Basic Earnings per Share before &

after exceptional items Rs. 38.66 Rs. 36.88

Diluted Earnings per Share before &

aftter exceptional items Rs. 35.70 Rs. 36.88

iv. Reconciliation of weighted average Numbers of

Equity Shares outstanding during the period

For Basic Earning Per Share 221,019,058 220,986,249

Add : Adjustment on account of FCCBS 18,944,493 -

For Diluted Earning Per Share 239,963,551 220,986,249

14. The Company has invested an amount of Rs. 719.11 million in units of mutual funds out of which

investments to the extent of Rs. 550.20 million have been earmarked against provision for

abandonment cost included under the head ‘Other Liabilities’ in Schedule 8.

15. a) The Financial Institutions have a right to convert, at their option, the whole outstanding amount

of term loans or a part not exceeding 20% of defaulted amount of loan, whichever is lower,

into fully paid up equity shares of the Company at par on default in payments / repayments of

three consecutive installments of principal and / or interest thereon or on mismanagement of

the affairs of the Company.

b) The Financial Institutions have a right to convert at their option the whole or a part of

outstanding amount of Preference Shares, into fully paid up equity shares of the Company as

per SEBI guidelines, on default in payment of dividend or a default in redemption of Preference

Shares or any combination thereof.

16. The Balances of some of the Debtors, Creditors, Deposits, Advances and Other Current Assets are

subject to confirmation.

17. Funds mobilised by issue of Foreign Currency Convertible Bonds have been utilised for the object

of the issue i.e. for expansion of glass shell manufacturing facilities, expansion of consumer

electronics and household appliances business and global CPT business.

18. In the opinion of the Board, the value of realisation of Current Assets, Loans and Advances in the

ordinary course of the business would not be less than the amount at which they are stated in the

Balance Sheet and the provision for all known and determined liabilities is adequate and not in

excess of the amount reasonably required.

For the For the


30th Sept., 2007 30th Sept., 2006


19. Auditors’ Remuneration: (Including Service Tax)

a) Audit Fees 5.06 4.77

b) Tax Audit Fees 1.24 1.12

c) Out of Pocket Expenses 0.18 0.18

d) Other Services 1.85 1.68

8.33 7.75

20. a) Sundry Creditors include Rs. 62.51 million (previous year Rs.76.88 million) due to Small

Scale Industrial undertakings to the extent such parties have been identified from available

information. The names of small scale industrial undertakings to whom amounts payable are

outstanding for more than 30 days are -

Able Moulders, Abs Electroplaters Pvt. Ltd, Acropolis Industries, Aditya Air Products, Advance

Marks & Labels Pvt. Ltd, Akanksha Packs, Akshay Flexi Hoses, Akshay Industries, Akshay

Udyog, Amitron, Amtex Industries, Annpurna Electronics &Services Ltd, Any Graphics Pvt.

Ltd, Arasana Industries, Arihant Industries, Atul Fasteners Ltd, Aurangabad Plastics Pvt Ltd,

Auto Strap India, Belting Enterprises Pvt Ltd, Blue Star Engineers, Box Boarad Packaging,

Chirag Plast, Clad Metal India Pvt Ltd, Combined Engineers, Crystal India, Dhiraj Industries,

Dolsun Containers Pvt. Ltd, Ellora Rubber, Essdee Industries, Gujarat Engineering Works,

Gujarat Industries, Gurudatta Industries, H V Equipments Pvt Ltd, Harsh Packaging, Hemant

Mechanical Industries, Heritage Rubbers, Ideal Sealtape Pvt. Ltd, Indira Damper Industries,

Kaithi Plastic, Komal Enterprises, Labddhi Polyplast Engineers, Machhar Packging Services

Pvt. Ltd., Merrygold Enterprises, Metronics India, Minerva Engg.Tools Company, Mittal

Pigments Pvt. Ltd.,, Multicolor Steels (India) Pvt Ltd, Noida Electronics, Novel Packaging

Industrie, Nutech Sintered Products, Om Sai Decoplast Pvt. Ltd, P.R.Packing Service, P.Yesh

Industries, Packprint Carton Industries, Paper Combines, Patkar Extrusions Ltd, Patrikar &

Sons Auto, Plasto Pack (India), Popular Engineering Works, Positronics Control Systems

Pvt Ltd, Precision Metal Plast, Premier Seals(India) Pvt., Progressive Polymers, R.P.

Engineers, Raiyani Technofab, Rajeshwari Enterprises, Rajmudra Offset, Royal Pack

Industries,, S. V. S. Wire Pvt. Ltd., Saikrupa Enterprises, Sapna Packaging, Saptagiri Industries,

Sara Industries, Savera Press Comps Pvt Ltd (Jw), Selwel Enterprises P. Ltd., Servilink

Engineers Pvt Ltd, Shardul Fasteners., Shital Tyre Retraders, Shree Ashapuri Saw Mill, Shree

Udyog, Silverline Metal Engg. Pvt Ltd-A, Sjs Plastiblends Pvt.Ltd., Sudarshan Plast, Sun

Graphics, Sun Polymers, Supreme Enterprises, Surya Springs Private Ltd, Svs Wires Private

Limited,Unit-Ii, Swaroop Decore, Swaroop Techno Components Pvt. Ltd, Technoseal Rubber

, Technova Tapes (I) P, Ultima Plastic Industries, Vabros (I) Pvt. Ltd., Vinod Engineers, Vishwas

Moulders,, Vrc Plastomould(I) P, Wendt (India) Limited, Yash Industries, Yashoda Industries.

b) The Company is in the process of compiling the additional information required to be disclosed

under the Micro, Small Enterprises Development Act 2006. The management does not envisage

any material impact on the financial statement in this regard which has been relied upon by

the auditors.

21. There are no amounts due to be credited to Investor Education & Protection Fund.

29


22. Related Party Disclosures:

As required under Accounting Standard 18 on “Related Party Disclosure”, the disclosure of

transaction with related parties as defined in the Accounting Standard are given below:

a) List of Related Parties:

i) Subsidiary Companies:

- Paramount Global Limited

- Videocon Global Limited

- Mars Overseas Limited (up to 26th September 2007)

- Sky Billion Trading Limited (w.e.f.21st November 2006)

- Videocon (Mauritius) Infrastructure Ventures Limited

- Middle East Appliances LLC

- Powerking Corporation Limited

- Gajanan Electronics & Home Appliances Private Limited (up to 26th September 2007)

- Mayur Household Electronics Private Limited

- Godavari Consumer Electronics Appliances Private Limited

- Venus Corporation Limited

- Eagle Corporation Limited

- Global Energy Inc (w.e.f.10th October 2006)

- Videocon Display Research Co.Ltd. (w.e.f.9th March 2007)

- Technologies Display Americas LLC *

- Technologies Displays Mexicana S.A. de.CV * ( Formerly Thomson Display Mexicana

S.A. de.CV)

- VDC Technologies S.P.A. *

- TTD International S. A. (Formerly Thomson Tubes & Displays S.A.) *

- TDP S.P.z.o.o (Formerly Thomson Displays Polska S.P.z.o.o.) *

- TTD International Ltd ( w.e.f.30th January 2007 ) *

- TGDC Guandong Displays Co. Ltd.* (Formerly Thomson Guandong Displays Co. Ltd.)

- Thomson Display Technology Research & Development Co. Ltd.*

- VDC Technologies Deutschland GmbH ** (w.e.f. 14th September 2007)

* Subsidiaries of Eagle Corporation Ltd.

** Subsidiary of VDC Technologies SPA

ii) Associate and Joint Venture:

- Ravva Oil & Gas Field (unincorporated) Joint Venture - Participating Interest 25%

-WA-388-P Joint Venture - Participating Interest 20%

-Block 56 Venture Oman - Participating Interest 25%

-EPP27 Joint Venture - Participating Interest 20%

-Evans Fraser & Co. (India) Limited - Associate

iii) Key Management Personnel:

- Mr. Venugopal N. Dhoot - Chairman & Managing Director

- Mr. Pradeepkumar N. Dhoot - Whole Time Director

b) Transactions/outstanding balances with Related Parties:

The company has entered into transactions with certain related parties as listed below. The

Board considers such transactions to be in normal course of business:

(Rs. In Million)

Subsidiary Associates/ Key Management

Nature of Transaction Companies Joint Venture Personnel

Sale of Goods 27,085.95

(18,844.06)

Purchase of Goods 702.24

(608.39)

Interest Received 15.70

(-)

Investments /Share Application Money

During the year 85.66

(13,575.75)

Advances/Loans given 2,039.45 -

(421.44)

Advances/Loans paid -

(1,582.36)

Transaction with Joint Venture

- Contribution towards share of expenditure 1,735.31

(470.21)

Outstanding as at 30.09.2007

Trade Receivables 7,490.12

(2,769.79)

Trade Payables 583.39

(345.86)

Advances/Loans given / (returned) (Net) 2,298.16 52.55

(1,272.48) (74.59)

Investments/Share Application Money 14,516.78 40.63

(14,477.55) (40.63)

Receivable from unincorporated Joint Venture 35.11

(2.18)

Payable to unincorporated Joint Venture 2.14

(0.29)

23. The Company has prepared the Consolidated Financial Statements as per Accounting Standard

(AS) 21 and accordingly the segment information as per AS-17 “Segment Reporting” has been

presented in the Consolidated Financial Statements.

24. Loans and Advances in the nature of Loans given to Subsidiaries and Associate etc.

A. Loans and Advances in the nature of Loans :

(Rs. in Million)

Sr. Name of the 30.09.2007 30.09.2006 Maximum Balance

No. Company During the year

1 Paramount Global Ltd. Subsidiary 1,467.61 828.61 2,157.85

2 Eagle Corporation Subsidiary 830.55 - 850.55

3 Videocon Global Ltd. Subsidiary - 443.87 443.87

Total 2,298.16 1,272.48

Notes :-

1. Loans and Advances shown above, to subsidiaries fall under the category of ‘Loans &

Advances in nature of Loans where there is no repayment schedule’.

2. No interest is chargeable on Loans and Advances to above Subsidiaries, except Videocon

Global Ltd.

B. Investment by the loanee in the shares of the Company.

None of the loanees have made investments in the shares of the Company.

25. Reserves:

Share of the Company in Ravva Oil & Gas field (Unincorporated) Joint Venture remaining reserves

on proved and probable basis (as per Operator’s estimates)

Particulars Unit of measurement As on As on

30.09.2007 30.09.2006

Crude Oil Million Metric Tonnes 2.19 2.77

Natural Gas Million Cubic Metres 490.81 678.36

26. As required by Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent Assets”

issued by Institute of Chartared Accountants of India, the disclosure with respect to provisions

are as follows:

As on 30.09.2007

Exchange Rate Warranty &

Fluctuation Expenses Maintenance

Expenses

(Rs. in Million) (Rs. in Million)

a) Amount at the beginning of the year - 360.55

b) Additional provision made during the year 1,023.91 371.23

c) Amount used - 351.14

d) Unused amount reversed during the year - -

e) Amount at the end of the year 1,023.91 380.64

27. i) Future obligation of the Company for assets taken on all leases entered into before 1st

April 2001 is Rs. Nil

ii) Subsequent to 1st April, 2001 the Company has entered into operating lease agreements

for “Cars” to be used by employees for a period of 4 years. The lease rentals charged

during the year are Rs. 1.70 million.

iii) The maximum obligation on long-term non-cancellable operating leases entered on or

after April 1 , 2001 payable as per the rentals stated in respective agreements are as follows:

( Rs. in Million)

Minimum Lease Payments As at 30.09.07

Not later than 1 year 1.02

Later than 1 year and not later than 5 years 0.03

More than 5 year NIL

Total 1.05

30


30th Sept., 2007 30th Sept., 2006

Rs. In Million Rs. In Million

VIII. CIF Value of Imports, Expenditure and Earning in Foreign Exchange:

a) C.I.F. Value of Imports

Raw Materials 7,152.70 9,231.95

Capital Goods (including advances) 590.20 1,535.75

b) Expenditure incurred in Foreign Currency: (on payment basis)

for Cash Call paid to the Operator for the project 1,340.57 280.90

Technical Know How Fees - 6.74

Interest & Bank Charges 743.42 391.40

Royalty 63.25 103.64

Travelling 32.72 43.49

Dividend- 631 shareholders holding 49,346,401 Shares

(Previous year – 760 shareholders holding 49,206,206 shares) 172.71 123.02

Others 41.20 403.03

c) Other Earning/Receipts in Foreign Currency:

F.O.B. Value of exports (on receipt basis) 4,364.32 4,292.02

Interest 16.92 234.51

Others - 51.79

29. Figures in respect of previous year have been regrouped and recasted wherever necessary to make them comparable with those of current year.

30th Sept., 2007 30th Sept., 2006

Unit Quantity Rs. In Million Quantity Rs. In Million

28. Additional Information pursuant to the provisions of paragraphs

3,4C,4D of part II of Schedule VI to the Companies Act,1956.

QUANTITATIVE INFORMATION:

I. Production:

(Including Goods Manufactured through third parties and excluding

goods manufactured for others on job basis)

a) Crude Oil MT 602,649 610,942

b) Natural Gas Cu.Mtr 199,822,632 214,142,431

c) TV Sets including Assemblies and sub assemblies thereof and Glass Shells Nos 31,011,900 27,919,267

d) Audio, Video and other Electricals and Electronic Appliances,

including Assemblies and Sub-Assemblies thereof Nos 4,803,885 4,022,326

e) Air Conditioners Nos 359,375 304,370

II. Stocks of Finished Goods at Close:

a) Crude Oil MT 19,342 88.43 29,569 84.53

b) Natural Gas Cu.Mtr - - - -

c) TV Sets including Asemblies and sub assemblies thereof and Glass Shells Nos 985,691 1,483.76 1,346,583 1,985.83


including Assemblies and Sub-Assemblies thereof Nos 238,247 1,173.25 226,214 748.33

e) Air Conditioners Nos 39,072 515.88 23,221 280.85

TOTAL 3,261.32 3,099.54

III. Stocks of Finished Goods at Beginning: (including addition on Amalgamation)

a) Crude Oil MT 29,569 84.53 10,411 27.57

b) Natural Gas Cu.Mtr. - - - -

c) TV Sets including Asemblies and sub assemblies thereof and Glass Shells Nos 1,346,583 1,985.83 958,394 1,378.25


including Assemblies and Sub-Assemblies thereof Nos. 226,214 748.33 266,301 804.48

e) Air Conditioners Nos 23,221 280.85 4,506 57.79

TOTAL 3,099.54 2,268.09

IV. Sales/Services Rendered (Including Duty Drawback and

Cash Compensatory support )

a) Crude Oil MT 612,876 13,056.67 591,784 13,299.91

b) Natural Gas Cu.Mtr. 181,991,600 1,045.24 196,648,932 1,094.23

c) TV Sets including Asemblies and sub assemblies thereof and Glass Shells Nos 31,372,792 45,608.49 27,531,078 39,472.36


including Assemblies and Sub-Assemblies thereof Nos 4,791,852 21,275.12 4,062,413 17,561.73

e) Air Conditioners Nos 343,524 5,560.21 285,655 4,324.78

f) Other Sales & Service Income 556.85 50.31

TOTAL 87,102.58 75,803.32

V. Flared/Consumed/Normal Loss

a) Natural Gas Cu.Mtr. 17,831,032 17,493,499 -

VI. Raw Material Components and Spares Consumption including for

products manufactured through third parties

a) Printed Circuit Board (All types) Nos 7,540,602 5,823.81 7,103,567 5,039.51

b) Active & Passive Components */** 14,910.42 12,902.40

c) Plastic and Wooden Parts Nos 9,341,424 20,121.92 9,159,303 17,412.05

d) Other Raw Materials ** 8,443.92 7,306.78

TOTAL 49,300.08 42,660.74

* Inclusive of job charges paid

** It is not practicable to furnish quantitative information of components consumed in view of considerable number of items, of diverse in size & number

Note: The industrial licensing has been abolished in respect of the products of the Company.

30th Sept., 2007 30th Sept., 2006

Percentage Rs. In Million Percentage Rs. In Million

VII. Value of Imported and Indigenous

Raw Materials, Components and Spares Consumed *

a) Imported 19.26 9,495.19 16.47 7,027.05

b) Indigenous 80.74 39,804.89 83.53 35,633.69

TOTAL 49,300.08 42,660.74

* Includes job charges paid

31


32. Balance Sheet Abstract and Company’s General Business Profile:

I. Registration Details

Registration No. 103624

Balance Sheet Date 30.09.2007

State Code 11

II. Capital Raised During the year (Amounts Rs. in Thousand)

Public Issue -

Rights Issue -

Bonus Issue -

Private Placement 46,371

Amalgamation 4

Share Application Money -

III. Position of Mobilisation & Deployment of Funds

(Amounts Rs. in Thousand)

Total Liabilities 111,959,174

Total Assets 111,959,174

Sources of Funds

Paid-up Capital 2,669,538

Share Capital Suspense -

Reserves & Surplus 54,114,272

Deferred Tax Liability (Net) 2,578,996

Secured Loans 33,435,014

Unsecured Loans 19,161,354

Application of Funds

Net Fixed Assets 53,194,718

Investments 20,924,970

Net Current Assets 37,839,486

IV. Performance of Company (Amounts Rs. in Thousand)

Turnover 84,517,865

Total Expenditure 73,688,908

Profit Before Tax 10,828,956

Profit After Tax 8,552,193

Earnings Per Share in Rs. Rs. 38.66

Dividend Rate % 35%

V. Generic Names of Three Principal Products of the Company

(As per monetary terms)

a) Item Code No. (ITC Code) 2709.00

Product Description Crude Oil and Natural Gas

b) Item Code No. (ITC Code) 8528.00

Product Description Television

c) Item Code No. (ITC Code) 8520.00

Product Description Tape Recorder

d) Item Code No. (ITC Code) 85281008

Product Description Glass Shell Panels & Funnels for

C.P.T.






VINOD KUMAR BOHRA

Company Secretary




SHIVRATAN AGARWAL

Partner


Place : Mumbai


32


1N

am

e o

f S

ub

isd

iary

Gajan

an

Mayu

rG

od

avari

Param

ou

nt

Mid

dle E

ast

Glo

bal

Vid

eo

co

nS

ky B

illio

nM

ars

Vid

eo

co

nV

en

us

P

ow

erkin

g V

id

eo

co

nE

ag

le

E

lectro

nics

Ho

useh

old

C

on

su

mer

Glo

bal L

td

.A

pp

lian

ces

E

nerg

yD

isp

lay

Trad

in

gO

verseas

G

lo

bal

Co

rp

oratio

nC

orp

oratio

n(M

au

ritiu

s)

Co

rp

oratio

n

& S

up

ply

E

lectro

nics

Electro

nics

LL

cR

esearch

Co

. L

td

.L

td

.L

td

. (u

p to

Ltd

.L

td

.L

td

.In

frastru

ctu

re

Ltd

. (o

n

Pvt. L

td

.A

pp

lian

ces

A

pp

lian

ces

In

c(w

.e.f 9

th

(w

.e.f 2

1st

2

6th

S

ep

t.,

Ven

tu

res L

td

.C

on

so

lid

ated

(U

p to

2

6th

P

vt.L

td

.P

vt.L

td

.(w

.e.f. 1

0th

M

arch

0

7)

No

v., 0

60

7)

Basis)

Sep

t., 2

00

7)

O

ct. 0

6)

2T

he fin

an

cial year o

f th

e S

ub

sid

iary

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

30

th

S

ep

t.,

Co

mp

an

ies en

ded

o

n2

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

72

00

7

3H

old

in

g C

om

pan

y’s In

terest

No

. o

f S

hares h

eld

b

y V

id

eo

co

n In

du

stries L

td

.1

0,0

00

E

qu

ity

10

,0

00

E

qu

ity

10

,0

00

E

qu

ity

12

,8

00

,0

00

2

,2

51

,8

00

1,0

00

1,2

00

1,0

72

,0

00

1,0

00

,0

00

2,5

00

2,9

82

2,7

11

53

0,0

00

1,0

00

with

its n

om

in

ees in

th

e su

bsid

iaries at th

e en

dS

hares o

f th

eS

hares o

fS

hares o

fS

hares o

fS

hares o

fS

hares o

fS

hares o

fS

hares o

fS

hares o

f S

hares o

fS

hares o

f S

hares o

fS

hares o

fS

hares o

f

of th

e fin

an

cial year o

f th

e S

ub

sid

iary

face valu

e o

fth

e face

th

e face

th

e face

th

e face

th

e face

the face value

th

e face

th

e face

th

e face

th

e face

th

e face

th

e face

th

e face

Co

mp

an

ies

Rs.1

0/- each

valu

e o

f valu

e o

f valu

e o

fvalu

e o

fvalu

e o

f o

f JP

Yvalu

e o

f valu

e o

f valu

e o

fvalu

e o

fvalu

e o

f valu

e o

f valu

e o

f

fu

lly p

aid

.R

s.1

0/- each

R

s.1

0/- each

US

$1

.0

0 each

Om

an

R

iyal

U

S$

1.0

0 5

00

00

US

$1

.0

0 U

S$

1.0

0U

S$

1.0

0U

S$

1.0

0 U

S$

1.0

0U

S$

1.0

0 U

S$

1.0

0

fu

lly p

aid

. fu

lly p

aid

. fu

lly p

aid

1.0

0 each

each

fu

lly

each

fu

lly

each

fu

lly

each

fu

lly

each

fu

lly

each

fu

lly

each

fu

lly

each

fu

lly

each

fu

lly

fu

lly p

aid

paid

p

aid

paid

p

aid

p

aid

paid

paid

p

aid

paid

Exten

t o

f th

e in

terest o

f H

old

in

g C

om

pan

y at th

e

en

d o

f fin

an

cial year o

f th

e S

ub

sid

ary C

om

pan

ies

Nil

10

0%

10

0%

10

0%

10

0%

10

0%

10

0%

10

0%

Nil

10

0%

10

0%

10

0%

10

0%

10

0%

4T

he n

et ag

greg

ate am

ou

nt o

f th

e S

ub

sid

iary

Co

mp

an

ies P

ro

fit/(L

oss) so

far as it co

ncern

s th

e

mem

bers o

f th

e H

old

in

g C

om

pan

y

aN

ot d

ealt w

ith

in

th

e H

old

in

g C

om

pan

y’s acco

un

ts :

iFo

r th

e cu

rren

t fin

an

cial p

erio

d en

ded

Rs.

Rs.

Rs.

US

$(U

S$1,0

36,3

76)

US

$1

2,5

83

/-

(U

S$

74

9,8

38

)U

S$

56

,4

42

/-

US

$1

0,1

06

US

$U

S$

74

,1

96

/-

US

$5

,5

41

,6

54

/-

(U

S$

7

47

6/-)

(U

S$

61

,2

12

,0

32

/-)

27

7,1

57

/-

3,4

25

,6

25

/-

1,6

34

,5

74

/-

42

6,1

46

/- in

(In

R

s.

In

R

s.

(In

R

s.

In

R

s.

In

R

s.

15

,8

52

,3

44

/-

In

R

s.

In

R

s.

(in

R

s.

(In

R

s.

Rs.1

8,1

16

,1

99

/-

44

,0

58

,1

10

/-)

53

4,7

88

/-

3,9

11

,0

91

/-)

2,2

84

,8

59

/-

42

9,6

13

/-

in

R

s.

3,1

54

,2

01

/-

23

5,5

85

,1

15

/-

31

7,8

17

/-)

2,6

02

,2

27

,5

32

/-)

67

3,9

10

,0

84

/-

ii

Fo

r th

e p

revio

us fin

an

cial years o

f th

eR

s. 2

35

,5

61

/-

Rs.2

,6

21

,7

04

/-

Rs.1

,1

80

,5

97

/-

US

$7

95

,3

10

/-

93

3/-

Nil

Nil

Nil

(U

S$

US

$(U

S$

3,

(U

S$

9,4

06

,0

93

/-)

(U

S$

6

,6

78

/-)

(U

S$

11

,

Su

bsid

iary C

om

pan

ies sin

ce th

ey b

ecam

ein

R

s.

in

R

s.

46

37

5/-)

9,6

31

,7

48

/-

18

9,0

80

/-)

(in

R

s.

(in

R

s.

56

8,5

35

/-)

th

e H

old

in

g C

om

pan

y’s su

bsid

iaries

3

6,7

19

,4

63

/-

11

2,1

84

/-

(in

R

s.

in

R

s.

(in

R

s.

43

4,2

79

,3

14

/-)

30

8,3

23

/-)

(in

R

s.

2,1

41

,1

34

/-)

444,697,805/-

147,239,824/-)

53

4,1

19

,2

61

/-)

bD

ealt w

ith

in

H

old

in

g C

om

pan

y’s acco

un

ts :

iFo

r th

e cu

rren

t fin

an

cial p

erio

d en

ded

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

ii

Fo

r th

e p

revio

us fin

an

cial years o

f th

eN

il

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Nil

Su

bsid

iary C

om

pan

ies sin

ce th

ey b

ecam

e

th

e H

old

in

g C

om

pan

y’s su

bsid

iaries

ST

AT

EM

EN

T P

UR

SU

AN

T T

O S

EC

TIO

N 2

12

O

F T

HE

C

OM

PA

NIE

S A

CT

, 1

95

6, R

EL

AT

IIN

G T

O C

OM

PA

NY

’S

IN

TE

RE

ST

IN

S

UB

SID

IA

RY

C

OM

PA

NIE

S

Sta

te

me

nt o

f S

ub

sid

ia

rie

s o

f V

id

eo

co

n In

du

strie

s L

td

.

33


(R

s.in

M

illio

n)

Sr.N

o.

Na

me

o

f th

eR

ep

ortin

gE

xch

an

ge

Capital

Share

Reserves

Total

Total

In

ve

stm

en

tTotal

Pro

fit

Pro

visio

nP

ro

fit A

fte

rP

ro

po

se

dC

ou

ntry

Su

bsid

ia

ry C

om

pa

ny

Cu

rre

ncy

Rate

Ap

plica

tio

nA

sse

ts

Liabilities

Oth

er th

an

In

co

me

Be

fo

re

Fo

rT

axa

tio

nD

ivid

en

d

Mo

ne

yIn

ve

stm

en

tT

axa

tio

nT

axa

tio

n

in

S

ub

sid

ia

ry

1G

ajan

an

E

lectro

nics &

S

up

ply P

vt.L

td

.

(U

p to

2

6th

S

ep

t.2

00

7)

IN

R1

.0

00

.1

0-

1.2

94

68

.6

54

67

.2

7-

27

05

.4

20

.4

00

.1

20

.2

8-

IN

DIA

2M

ayu

r H

ou

seh

old

E

lectro

nics

Ap

plian

ces P

vt.L

td

.IN

R1

.0

00

.1

0-

9.7

65

,9

00

.8

65

,8

90

.9

9-

19

,1

43

.4

84

.9

91

.5

63

.4

3-

IN

DIA

3G

od

avari C

on

su

mer E

lectro

nics

Ap

plian

ces P

vt.L

td

.IN

R1

.0

00

.1

01

.5

54

.4

34

,0

70

.3

74

,0

64

.3

0-

13

,4

45

.5

02

.3

70

.7

31

.6

3-

IN

DIA

4P

aram

ou

nt G

lo

bal L

td

.U

SD

40

.0

45

12

.5

1-

(1

50

.8

8)

9,4

51

.8

39

,0

90

.2

0-

67

.0

31

8.1

2-

18

.1

2-

HO

NG

KO

NG

5M

id

dle E

ast A

pp

lian

ces L

Lc

RO

10

4.7

92

35

.9

6-

(4

5.1

2)

69

2.6

15

01

.7

65

28

.6

8(4

4.0

6)

-(4

4.0

6)

-S

UL

TA

NA

TE

OF O

MA

N

6G

lo

bal E

nerg

y In

c (w

.e.f.1

0th

O

ct. 2

00

6)

US

D4

0.0

40

.0

41

1.9

7(5

.5

8)

21

.2

31

4.8

0-

20

.7

80

.5

3-

0.5

3-

CA

YM

AN

IS

LA

ND

S

7V

id

eo

co

n D

isp

lay R

esearch

C

o.L

td

.1

00

(w

.e.f. 9

th

M

arch

2

00

7)

JY

P3

4.8

02

0.9

0-

(3

.8

1)

16

8.3

81

51

.2

9-

15

6.0

0(2

.0

5)

1.8

6(3

.9

1)

-JA

PA

N

8S

ky B

illio

n T

rad

in

g L

td

. (w

.e.f. 21st N

ov.2006)

US

D4

0.0

44

2.9

2-

(1

3.3

6)

3,0

85

.3

93

,0

55

.8

2-

18

0.1

72

.3

8-

2.3

8-

HO

NG

KO

NG

9M

ars O

verseas L

td

. (u

p to

2

6th

S

ep

t. 2

00

7)

US

D4

0.0

4-

--

--

-1

0.3

20

.4

3-

0.4

3-

CA

YM

AN

IS

LA

ND

S

10

Vid

eo

co

n G

lo

bal L

td

.U

SD

40

.0

40

.1

0-

1,0

30

.1

35

,7

89

.5

54

,7

59

.3

2-

1,5

74

.0

66

73

.9

1-

67

3.9

1-

BR

IT

IS

H

VIR

GIN

IS

LA

ND

S

11

Ven

us C

orp

oratio

n L

td

.U

SD

40

.0

40

.1

2-

(1

24

.7

2)

1,9

03

.5

02

,0

28

.1

0-

20

4.2

33

.1

5-

3.1

5-

CA

YM

AN

IS

LA

ND

S

12

Po

werkin

g C

orp

oratio

n L

td

.U

SD

40

.0

40

.1

1-

(2

55

.4

2)

3,0

54

.9

33

,3

10

.2

4-

64

4.3

92

35

.5

9-

23

5.5

9-

CA

YM

AN

IS

LA

ND

S

13

Vid

eo

co

n (M

au

ritiu

s) In

frastru

ctu

re

Ven

tu

res L

td

.U

SD

40

.0

42

1.2

2-

(1

.6

9)

89

.6

17

0.1

50

.0

7-

(0

.3

2)

-(0

.3

2)

-M

AU

RIT

IU

S

14

Eag

le C

orp

oratio

n L

td

.

( O

n C

on

so

lid

ated

B

asis)

US

D4

0.0

40

.0

41

3,9

57

.7

11

7,6

11

.1

34

9,2

59

.7

11

7,7

13

.3

52

2.5

23

1,3

62

.7

2(2

,4

91

.1

5)

11

1.0

8(2

,6

02

.2

3)

-C

AY

MA

N

IS

LA

ND

S

Sta

te

me

nt p

ursu

an

t to

e

xe

mp

tio

n re

ce

ive

d fro

m M

in

istry o

f C

om

pa

ny A

ffa

irs,u

nd

er S

ectio

n 2

12

(8

) o

f th

e C

om

pa

nie

s A

ct,1

95

6 re

la

tin

g to

S

ub

sid

ia

ry C

om

pa

nie

s

34


AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

To

The Board of Directors


We have audited the attached consolidated Balance Sheet of Videocon Industries Limited (the Company) and its subsidiaries as at 30th September, 2007 and

the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These consolidated

financial statements are the responsibility of the Company’s management and have been prepared by them on the basis of separate financial statements and

other financial information regarding components. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in India. These Standards require that we plan and perform the audit to obtain

reasonable assurance whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting frame work

and are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall

consolidated financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We did not jointly audit the financial statements of the Subsidiaries, whose financial statements reflect total assets of Rs. 46,243.83 million as at 30th

September 2007 and total revenues of Rs. 69,886.79 million and cash flows amounting Rs. 1,712.98 million for the year ended on that date. These financial

statements have been audited by either of us singly or by other auditors whose reports have been furnished to us and our opinion, in so far as it relates to the

amounts included in respect of these entities, is based solely on the reports of those respective auditors.

We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of the Accounting Standard (AS)

21 on “Consolidated Financial Statements”, Accounting Standard (AS) 23 on “Accounting for Investments in Associates” and Accounting Standard (AS) 27

“Financial Reporting of Interest in Joint Ventures” issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial

statements of the Company, and its subsidiaries included in Consolidated Financial Statements.

On the basis of the information and explanations given to us and on the consideration of the separate audit report on individual audited financial statements of

the Company and its subsidiaries, we are of the opinion that the attached consolidated financial statements, read with the notes and the significant accounting

policies thereon, give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Consolidated Balance Sheet, of the state of affairs of the Company and its subsidiaries as at 30th

September 2007;

b. in the case of the Consolidated Profit and Loss Account, of the consolidated results of operations of the Company and its subsidiaries for the year ended

on that date; and

c. in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the company and its subsidiaries for the year ended on that date.




Partner Partner


Place: Mumbai


35


Particulars Schedule As at As at

No. 30th Sept., 2007 30th Sept., 2006


I. SOURCES OF FUNDS

1. Share Holders’ Funds

a. Share Capital 1 2,669.54 2,668.46

b. Share Capital Suspense 1A – 0.004

c. Reserves & Surplus 2 51,187.97 47,293.91

d. Capital Reserve on Consolidation 15,486.57 15,578.90

2. Minority Interest 296.73 443.02

3. Share Application Money Pending Allotment 2,081.46 1.55

4. Deferred Tax Liability ( Net ) 2,579.13 1,531.46

5. Loan Funds

a. Secured Loans 3 45,090.45 46,294.35

b. Unsecured Loans 4 24,437.05 15,721.76

TOTAL 143,828.90 129,533.41

II. APPLICATION OF FUNDS

1. Fixed Assets 5

a. Gross Block 130,315.08 137,175.28

b. Less : Depreciation 55,823.92 67,459.08

c. Net Block 74,491.16 69,716.20

d. Producing Properties (Net) 650.55 505.17

75,141.71 70,221.37

2. Investments 6 6,525.13 3,398.82

3. Current Assets, Loans & Advances 7

a. Inventories 21,362.59 20,456.79

b. Sundry Debtors 26,095.37 33,748.08

c. Cash and Bank Balances 19,212.16 19,970.65

d. Other Current Assets 227.06 555.75

e. Loans and Advances 21,883.66 14,671.81

88,780.84 89,403.08

Less : Current Liabilities & Provisions 8

a. Current Liabilities 22,395.35 29,898.37

b. Provisions 4,223.43 3,591.54

26,618.78 33,489.91

Net Current Assets 62,162.06 55,913.17

4. Miscellaneous Expenditure 9 – 0.05

(To the extent not written off or adjusted)


TOTAL 143,828.90 129,533.41

CONSOLIDATED BALANCE SHEET AS AT 30TH SEPTEMBER, 2007






VINOD KUMAR BOHRA

Company Secretary




SHIVRATAN AGARWAL

Partner


Place : Mumbai


36


Particulars Schedule Year ended on Year ended on

No. 30th Sept., 2007 30th Sept., 2006


I. INCOME

Sales / Income from Operations 125,971.29 129,633.71

Less : Excise Duty 4,249.40 3,617.97

Net Sales 121,721.89 126,015.74

Other Income 10 4,887.85 4,829.64

TOTAL 126,609.74 130,845.38

II. EXPENDITURE

Cost of Goods Consumed/Sold 11 77,065.08 81,657.38

Production & Exploration Expenses 12 9,569.75 9,583.21

Salaries, Wages & Employees’ Benefits 13 6,083.13 7,344.90

Manufacturing & Other Expenses 14 14,341.87 15,914.96

Interest & Finance Charges 15 4,565.37 3,414.46

Depreciation / Amortisation 6,921.99 5,965.04

Less : Transferred from General Reserve – 1,484.52

Less : Transferred from Revaluation Reserve 1,170.71 –

(Refer Note No B-3 of Schedule No.16) 5,751.28 4,480.52

TOTAL 117,376.48 122,395.43

III. Profit before Exceptional Items and Taxation 9,233.26 8,449.95

Add/(Less): Exceptional Items – 131.35

Add : Adjustment on disposal of Subsidiaries 18.01 147.09


Current Tax 1,282.77 916.72

Deferred Tax 1,085.70 51.02

Fringe Benefit Tax 23.89 15.41

IV. Profit before Minority Interest and Share of Profit in Associate 6,858.91 7,745.24

Share of Profit in associate company 31.18 23.43

Minority Interest 100.77 (156.67)

Excess provision for Income Tax for earlier years written back 68.08 3.95

Add: Prior Period Adjustments – 307.43

V. Profit for the year 7,058.94 7,923.38

Balance brought forward 7,615.16 3,888.10

Add: Transferred from Debenture/Bonds Redemption Reserve 530.55 -

Addition/Adjustment on amalgamation – (1,763.16)

V. Balance available for appropriation 15,204.65 10,048.32

VI. APPROPRIATIONS

Debenture Redemption Reserve – 12.60



Corporate Tax on Proposed Dividend 142.73 113.23

Transfer to General Reserve 2,000.00 1,500.00

Transfer to Legal Reserve – 0.01

Balance Carried to Balance Sheet 12,222.09 7,615.16

TOTAL 15,204.65 10,048.32

Basic Earnings per Share (Nominal Value Rs.10/- per share) Rs. 31.75 Rs. 35.68

Diluted Earnings per Share (Nominal Value Rs.10/- per share) Rs. 29.33 Rs. 35.68



CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH SEPTEMBER, 2007






VINOD KUMAR BOHRA

Company Secretary




SHIVRATAN AGARWAL

Partner


Place : Mumbai


37


A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax 9,233.26 8,449.95

Add:

a) Depreciation / Amortisation 5,751.28 4,480.52

b) Interest and Finance Charges 4,565.37 3,414.46

c) Producing Properties written off 833.95 177.36

d) Provision for Leave Encashment 13.51 78.86

e) Provision for Warranty and

Maintenance Expenses 15.39 296.09

f) Provision for Retirement Benefits (550.96) 1,612.03

g) Provision for Restructuring Cost 17.63 62.26

h) Provision for Contingencies (60.19) 132.64

i) Provision for Exchange Rate Fluctuation 1,023.91 -

j) Miscellaneous Expenditure written off 0.05 0.02

k) Prior Period Adjustment - 307.44

l) Diminution in value of Investment 40.30 12.34

m) Share of Profit in Associate company 31.18 23.43

n) Minority Interest for the year 100.77 (156.67)

(A) 21,015.45 18,890.73

Less:

a) Interest Received 551.24 599.32

b) Write back of Diminution

in value of Investment - 234.55

c) Income from Investment and

Securities Division 246.06 467.08

d) Exceptional Items - (131.35)

e) Profit on Sale of Fixed Asset 1,294.54 2,248.65

(B) 2,091.84 3,418.25

Cash flow from Operating Activities before

Working Capital changes (A-B) 18,923.61 15,472.48

Adjustments (including on amalgamation) :

a) Inventories (905.80) (11,609.46)

b) Sundry Debtors 7,652.71 (8,516.99)

c) Other Current Assets 328.69 (362.67)

d) Loans & Advances (7,211.82) 3,535.35

e) Current Liabilities (7,500.43) 8,645.09

Cash flow from Operating Activities (C) 11,286.96 7,163.80

Less : Income Tax Paid 1,104.10 531.74

Less : Fringe Benefit Tax Paid 23.92 17.43

Net Cash flow from Operating Activities (D) 10,158.94 6,614.63

B. CASH FLOW FROM INVESTING ACTIVITIES

Sale of Fixed Assets (Net) 3,204.60 3,025.68

Interest Received 551.24 599.32

Adjustment on Disposal of Subsidiaries 18.01 147.09

Income from Investment and Securities Division 246.06 467.08

(E) 4,019.91 4,239.17

Less:

Increase in Fixed Assets including

Captial Work-in-progress 13,607.99 37,046.25

(including net additions on amalgamation)

Increase in Producing Properties 979.33 103.50

Increase in Investments (Net) 3,166.61 771.61

(F) 17,753.93 37,921.36

Net Cash flow from Investing Activities G=(E-F) (13,734.02) (33,682.19)

C. CASH FLOW FROM FINANCING ACTIVITIES

Increase in Share Capital including

on account of amalgamation 1.08 603.20

Increase in Share Capital Suspense on amalgamation - 0.004

Increase in Share Application Money 2,079.91 (94.04)

Increase in Reserves on amalgamation - 1.50

Securities Premium Received and

addition on amalgamation 47.66 93.42

Increase in Capital Reserve on Consolidation (92.33) 15,578.90

Increase in Goodwill on Consolidation - 79.90

Transfer of Deferred Tax Liabilities on amalgamation - 0.50

Increase in Secured Term Loans from Banks (287.75) 8,647.23

Increase in Unsecured Loans 8,715.29 12,757.87

Increase in Working Capital Loans from Banks 712.79 305.63

Increase in Revaluation Reserve - Associate Equity - 39.78

Increase in Revaluation Reserve 118.75 -

(H) 11,295.40 38,013.89

Less:

Decrease in Share Capital Suspense

including on account of amalgamation 0.004 556.83

Decrease In Minority Interest 146.29 (443.02)

Decrease In Foreign Currency

Translation Reserve on Consolidation 1,088.28 (201.68)

Earlier period Loss of Subsidiary - 1.24

Amalgamation Adjustment Account - 1,763.17

Redemption of Secured Non Convertible Debentures 1,628.94 1,878.79

Decrease in Securities Premium on account of

Share issue expenses and premium on

convertible bonds 126.79 145.23

Payment of Dividend 809.91 587.75

Corporate Tax on Dividend 113.23 82.35

Interest and Finance Charges Paid 4,565.37 3,414.46

(I) 8,478.81 7,785.12

Net Cash flow from Financing Activities (J=H-I) 2,816.59 30,228.77

Net Change in Cash and Cash Equivalents (D+G+J) (758.49) 3,161.21

Opening Balance of Cash and Cash Equivalents 19,970.65 16,809.44

Closing Balance of Cash and Cash Equivalents 19,212.16 19,970.65

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH

SEPTEMBER, 2007

Particulars As at As at

30th Sept., 2007 30th Sept., 2006


Particulars As at As at

30th Sept., 2007 30th Sept., 2006







VINOD KUMAR BOHRA

Company Secretary




SHIVRATAN AGARWAL

Partner


Place : Mumbai


38


SCHEDULES TO BALANCE SHEET

SCHEDULE - 1 : SHARE CAPITAL

Authorised :

500,000,000 (Previous year 500,000,000) 5,000.00 5,000.00

Equity Shares of Rs. 10/- each

10,000,000 (Previous year 10,000,000) 1,000.00 1,000.00

Redeemable Preference Shares of Rs. 100/- each

6,000.00 6,000.00

Issued, Subscribed and Paid-up:

Equity Shares:

221,093,701 (Previous year 220,985,833)

Equity Shares of Rs. 10/- each fully paid up 2,210.94 2,209.86

Of the above:

a) 95,078 (Previous year 95,078) Equity Shares of


Unsecured Optionally Convertible Debentures.

b) 156,438,326 (Previous year 156,437,910) Equity

Shares of Rs.10/- each were allotted pursuant to

amalgamations without payments being received

in cash.

c) 45,777,345 (Previous year 45,777,345) Equity

Shares of Rs.10/- each were issued by way of Euro

issues represented by Global Depository Receipts

(GDR) at a price of US$ 10.00 per share (inclusive

of premium).

d) 107,452 (Previous year NIL) Equity Shares of


1,099 Foreign Currency Convertible Bonds of US$

1000 each (inclusive of premium)

Less : Calls in Arrears - by others 1.49 1.49

(A) 2,209.45 2,208.37

Preference Shares:

4,523,990 (Previous year 4,523,990) 8% Redeemable


redeemable at par in 3 equal installments on 1st October

2011, 1st October 2012 and 1st October 2013. 452.40 452.40

76,870 (Previous year 76,870) 8% Redeemable


redeemable at par in 3 equal installments on 1st February

2012, 1st February 2013 and 1st February 2014. 7.69 7.69

(B) 460.09 460.09

TOTAL (A+B) 2,669.54 2,668.46

SCHEDULE - 1A : SHARE CAPITAL SUSPENSE

Equity Shares - 0.004

NIL (Previous year 416) Equity Shares of Rs.10/- each

to be allotted to the shareholders of erstwhile EKL

Appliances Limited pursuant to its amalgamation with

the Company.

TOTAL - 0.004

SCHEDULE - 2 : RESERVES & SURPLUS

Revaluation Reserve


Add : Addition during the year 118.75 -

Add : Adjustment for change in associate’s equity - 39.79

Less : Deduction on account of Disposal/

Sale of Revalued Assets. 0.98 13.64

Less : Transferred to General Reserve 7,538.89 259.08

Less : Transferred to Profit & Loss Account 1,170.71 -


(A) 693.69 9,285.52

As at As at

30th Sept., 2007 30th Sept., 2006


Capital Subsidy


(B) 5.50 5.50

Securities Premium Account


Add : Adjusted during the year 47.66 93.42

Less : Share Issue Expenses - 4.90

Less : Premium payable on Redemption

of Convertible Bonds 88.76 98.23

25,523.96 25,565.06

Less : Call and/or allotment money in arrears - by others 16.90 16.90

(C) 25,507.06 25,548.16

Capital Redemption Reserve


(D) 537.50 537.50

Debenture/Bonds Redemption Reserve


Add/(Less) : Transferred from/(to) Profit & Loss Account (530.55) 12.60

(E) 1,812.50 2,343.05

Legal Reserve

As per last Balance Sheet 0.01 -

Add : Transferred from Profit and Loss Account - 0.01

(F) 0.01 0.01

Capital Reserve


Add : Additions on Amalgamation - 1.50

(G) 1.52 1.52

Foreign Currency Translation Reserve


Add/(Less) during the year (1,088.28) 201.67

(H) (790.51) 297.77

General Reserve

As per Last Balance Sheet 1,659.72 1,385.16

Add : Transferred from Revaluation Reserve 7,538.89 259.08

Add : Transferred from Profit & Loss Account 2,000.00 1,500.00

Less : Transferred to Profit & Loss Account - 1,484.52

(I) 11,198.61 1,659.72

Profit & Loss Account

As per Account annexed 12,222.09 7,615.16

(J) 12,222.09 7,615.16

TOTAL (A to J) 51,187.97 47,293.91

As at As at

30th Sept., 2007 30th Sept., 2006


39


SCHEDULE - 3 : SECURED LOANS

A. Non-Convertible Debentures 2,356.24 3,985.18

B. Term Loans from Banks & Financial Institutions 36,100.02 38,434.98

C. External Commercial Borrowings 3,803.80 1,662.12

D. Corporate Loan from Banks 82.23 215.02

E. Vehicle Loans from Banks 12.24 21.58

F. Finance Lease 47.66 -

G. Working Capital Loans From Banks 2,688.26 1,975.47

TOTAL 45,090.45 46,294.35

A. Non Convertible Debentures:-

Out of the Non Convertible Debentures, those to the extent of :

i. Rs. 613.73 million (Previous year Rs.920.18 million) are secured by assignment

of / fixed and floating charge on all moneys received/to be received by the

Company in relation to and from the Ravva Joint Venture, including all

receivables of the Company, subject to the charge in favour of the Joint Ventures

in terms of the Production Sharing Contract/Joint Operating Agreement in

respect of Ravva Joint Venture, to the extent necessary.

ii. Rs.640.81 million (Previous year Rs.933.10 million) are secured by first charge

on immovable and movable properties, both present and future, subject to

prior charge on specified movables created/to be created in favour of Company’s

Bankers for securing borrowings for working capital requirements, and ranking

pari passu with the charge created/to be created in favour of Financial

Institutions/Banks in respect of their existing and future financial assistance.

Also guaranteed by Mr. V. N. Dhoot and Mr. P. N. Dhoot.

iii. Rs.211.70 million (Previous year Rs.361.90 million) are secured by way of a

first charge on the entire immovable and movable properties of the Company

ranking pari passu with existing charge holders except prior charge on specified

movables created in favour of Company’s bankers for borrowings of working

capital and exclusive charge created on specific machinery financed/to be

financed by the banker/s and/or financial institution/s and the personal guarantee

of Mr. V.N.Dhoot.

iv. Rs.890.00 million (Previous year Rs.1,350.00 million) are secured by

unconditional and irrevocable guarantee given by IDBI (for principle and

interest). The said guarantee assistance, provided by IDBI, is secured by a first

charge in favour of the guarantor, of all the immovable properties, both present

& future, and a first charge by way of hypothecation of all the movables, present

& future, ranking pari passu with existing charge holders, subject to charges

created/to be created in favour of the Bankers on the specified current assets

for securing borrowings for working capital loans. These debentures are also

guaranteed by Mr. V. N. Dhoot.

v. Rs.NIL (Previous year Rs.420.00 million) were secured by third charge on the

properties of the Company. This charge was subject to and subservient to the

mortgages and charges created/to be created in favour of Financial Institutions/

Debentures Trustees/Banks.

The Debenture referred to in (i) to (iv) above are redeemable at par, in one or

more installments on various dates with the earliest redemption being on 15th

October, 2007 and last date being 1st January, 2012. These debentures are

redeemable as follows , Rs.1,107.96 million in financial year 2007-08, Rs.732.15

million in financial year 2008-09, Rs.386.56 million in financial year 2009-10,

Rs.86.38 million in financial year 2010-11 and Rs.43.19 million in financial

year 2011-12.

B. Term Loans :-

The Term Loans are secured by mortgage of existing and future assets of the Company

and a floating charge on all movables assets, present and future (except book debts),

subject to prior charge of the Bankers on stock of raw materials, finished, semi

finished goods and other movables, for securing working capital loans in the ordinary

course of business, and exclusive charge created on specific items of machinery

financed by the respective lenders. The above charges rank pari passu inter-se for all

intents and purposes. The above loans are guaranteed by Mr. V. N. Dhoot and

Mr. P. N. Dhoot.

In addition to the above, a part of term loan from State Bank of India is further

secured by way of pledge of shares of Kitchen Appliances India Ltd. and Applicomp

(India) Ltd. belonging to and held by the Company. A part of loans from banks are

secured by the assignment of fixed and floating charge on all moneys received/to be

received by the Company in relation to and from the Ravva Joint Venture, including

all receivables of the Company, subject to the extent necessary, to the charge in

favour of the Joint Ventures in terms of the Production Sharing Contract/Joint

Operating Agreement in respect of Ravva Joint Venture; and the assignment/fixed

and floating charge of all the right, title and interest into and under all project

documents, including but not limited to all contracts, agreements or arrangements

which the Company is a part to, and all leases, licenses, consents, approvals related

to the Ravva Joint Venture, insurance policies in the name of the Company, in a form

and manner satisfactory to Trustee.

The term loans aggregating to Rs. 13,504.96 million availed by foreign subsidiaries

are secured by way of charge on present and future assets of the respective companies,

Corporate Guarantee from the Parent Company and by way of charge/hypothecation

of receivables of fellow subsidiaries/group companies.

The Term Loan includes short term loan aggregating to Rs.726.07 million availed by

foreign subsidiaries, of which Rs.215.71 million are secured by spare letter of credit

given as surety and Rs.510.36 million are secured by charge on property held by

subsidiary and guaranteed by parent company.

C. External Commercial Borrowings :-

External Commercial Borrowings are secured by a first charge ranking parri-passu

over all the present and future movable and immovable fixed assets. The loan is

further secured by personal guarantee of Mr. V. N. Dhoot and Mr. P. N. Dhoot.

D. Corporate Loan from Banks : -

Corporate Loan from Banks are partially secured by first charge, partially by second

charge, ranking parri-passu, and the balance by second subservient charge, on the

immovable and movable assets, both present and furture, of the Company. These

are further secured by personal guarantee of Mr. V. N. Dhoot.

E. Vehicle Loans from Banks : -

Vehicle Loans from Banks are secured by way of hypothecation of Vehicles acquired

out of the said loan. The loans are also secured by personal guarantee of Mr. V. N.

Dhoot.

G. Working Capital Loans From Banks : -

Working Capital Loans from Banks are secured by hypothecation of the Company’s

stock of raw materials, packing materials, stock-in-process, finished goods, stores

and spares, book debts of Glass Shell Division only and all other current assets of the

Company and personal guarantee of Mr. V. N. Dhoot and Mr. P. N. Dhoot.

Installments of loans from banks and financial institutions falling due within one year

Rs. 5246.60 million (Previous Year Rs. 4,805.69 million)

As at As at

30th Sept., 2007 30th Sept., 2006


As at As at

30th Sept., 2007 30th Sept., 2006


SCHEDULE - 4 : UNSECURED LOANS

A. From Banks and Financial Institutions 15,623.08 5,788.79

B. Foreign Currency Convertible Bonds 7,763.79 9,003.15

C. Premium Payable on Redemption on

Foreign Currency Convertible Bonds 267.13 140.34

(Refer Note no. B-5 of Schedule 16.) - -

D. From Others 681.21 696.42

E. Sales Tax Deferral 101.84 93.06

Total 24,437.05 15,721.76

Note :-

The Company has availed interest free Sales Tax Deferral under Special Incentive to

Prestigious Unit (modified) Scheme. Out of total outstanding, Rs.93.06 million is repayable

in six equal annual installments commencing from 30th May, 2008 and the balance in two

quarterly installments commencing from 31st December, 2009.

40


SC

HED

ULE - 5 : FIX

ED

A

SS

ETS

(R

upees in

M

illion)

PA

RT

IC

UL

AR

SG

RO

SS

B

LO

CK

DEP

REC

IA

TIO

N / A

MO

RTIS

ATIO

NN

ET B

LO

CK

As at

Addition

Additions

Deduction

Currency

As at

Up

to

Addition

For the

Deduction/

Im

pairm

ent

Cu

rre

ncy

Up

to

As at

As at

30.09.2006

on A

malga-

During the

During the

Transla-

30.09.2007

30.09.2006

on A

malga-

Year

Adjustm

ent

Transla-

30.09.2007

30.09.2007

30.09.2006

mation/

Year

Year

tion

mation/

tion

Acquisition

Adjustm

ent

Acquisition

Adjustm

ent

TA

NG

IB

LE

A

SS

ET

S

Freehold

Land

1,675.57

-105.27

-(21.24)

1,759.60

13

.5

1-

-1

1.7

2-

(1

.7

9)

-1,759.60

1,662.06

Leasehold

Land

47.82

-15.62

--

63.44

6.70

-2.47

--

-9.17

54.27

41.12

Buildin

g **

10,744.82

-1,302.90

7.18

(266.46)

11,774.08

3,175.88

-329.68

1.96

-(91.35)

3,412.25

8,361.83

7,568.94

Leasehold

Im

provem

ent

38.91

-0.41

--

39.32

37.43

-0.95

--

-38.38

0.94

1.48

Pla

nt &

M

achin

ery *

103,009.11

-12,087.01

17,096.99

(3,142.53)

94,856.60

58

,2

90

.4

1-

5,6

73

.7

21

5,6

99

.9

6-

(2

,5

98

.1

3)

45,666.04

49,190.56

44

,7

18

.7

0

Furnace

1,992.46

-2.81

--

1,995.27

1,113.26

-351.98

--

-1,465.24

530.03

879.20

Ele

ctric

al Installatio

n2,521.77

-256.58

2.18

(76.65)

2,699.52

2,098.20

-82.94

2.18

-(65.39)

2,113.57

585.95

423.57

Offic

e Equip

ments

483.62

-26.46

1.66

(21.56)

486.86

25

2.7

1-

35

.6

30

.8

5-

(9

.1

8)

278.31

208.55

230.91

Com

puter S

ystem

s379.10

-34.33

1.89

-411.54

245.79

-41.66

1.57

--

285.88

125.66

133.31

Furniture &

Fix

tures

330.67

-70.68

2.34

(4.07)

394.94

145.39

-35.92

0.80

-16.52

197.03

197.91

185.28

Vehic

les

500.78

-91.96

2.70

(2.01)

588.03

29

0.2

4-

42

.7

41

.6

0-

(1

.2

6)

330.12

257.91

210.54

Oth

er

370.86

-294.02

278.54

(4.59)

381.75

2.86

-5

.24

3.48

-(0.25)

4.37

377.38

368.00

LEA

SED

A

SS

ETS

Com

puter S

ystem

s6.27

--

--

6.27

4.96

-1.11

--

-6.07

0.20

1.31

IN

TA

NG

IB

LE

A

SS

ET

S

Goodw

ill (on am

alg

am

atio

n)

235.98

--

--

235.98

235.98

--

--

-235.98

--

Com

puter S

oftw

are

418.86

-188.75

2.32

(19.51)

585.78

308.52

-64.57

0.49

-(15.61)

356.99

228.79

110.34

Oth

er

2,392.14

-242.04

239.85

(170.88)

2,223.45

1,2

37

.2

4-

23

7.9

7-

-(5

0.6

9)

1,424.52

798.93

1,154.90

TO

TA

L125,148.74

-14,718.84

17,635.65

(3,729.50)

118,502.43

67,459.08

-6,906.58

15,724.61

-(2,817.13)

55,823.92

62,678.51

57,689.66

Capital

Work-in

-P

rogress

12,026.54

11,812.65

11,812.65

12,026.54

As at 30th

Septem

ber, 2

007

137,175.28

-14,718.84

17,635.65

(3,729.50)

130,315.08

67

,4

59

.0

8-

6,9

06

.5

81

5,7

24

.6

1-

(2

,8

17

.1

3)

55

,8

23

.9

274,491.16

69,716.20

As at 30th S

eptem

ber, 2006

55,809.80

54,393.39

16,853.25

1,908.81

1.11

125,148.74

22,875.01

39,703.07

5,920.59

1,118.15

44.45

34.11

67,459.08

57,689.66

-

Capital

Work-in

-P

rogress

6,490.85

3,647.14

--

-12,026.54

12,026.54

-

Total A

s at

30th S

eptem

ber, 2006

62,300.65

58,040.53

16,853.25

1,908.81

1.11

137,175.28

22,875.01

39,703.07

5,920.59

1,118.15

44.45

34.11

67,459.08

69,716.20

-

*G

ross B

lock of P

lant and M

achin

ery in

clu

des R

s. 9,245.73 m

illion (P

revio

us year R

s.9,518.45 m

illion) bein

g the am

ount added on

revalu

atio

n on 01.08.1998 and 01.10.2002 by erstw

hile V

ideocon Internatio

nal Ltd., am

alg

am

ated w

ith the com

pany.

**G

ross B

lock of B

uildin

g in

clu

des R

s. 118.75 m

illion (P

revio

us year R

s.N

IL) bein

g the am

ount added on revalu

atio

n on 30.09.200

7 by subsid

iary Technolo

gie

s D

ispla

ys M

exic

ana S

.A

. de.C

V.

41


As at As at

30th Sept., 2007 30th Sept., 2006


As at As at

30th Sept., 2007 30th Sept., 2006



30th Sept., 2007 30th Sept., 2006


SCHEDULE - 10 : OTHER INCOME

Service Charges Received 101.55 -

Interest Income (TDS Rs.3.88 million

Previous year Rs.8.59 million) 551.24 599.32

Income From Investments & Securities Division 205.76 454.74

(TDS Rs.43.24 million, Previous year Rs.56.04 million)

(Refer Note No.B-8 and 9 of Schedule No. 16)

Insurance Claim Received 64.93 49.97

Exchange Rate Fluctuation 1,054.83 53.17

Profit on Sale of Fixed Assets 1,294.54 2,248.65

Write back against dimunition in

Value of Quoted Investments - 234.55

Miscellaneous Income 1,615.00 1,189.24

(TDS Rs. 0.02 million Previous year Rs.NIL)

TOTAL 4,887.85 4,829.64

SCHEDULE - 11 : COST OF GOODS CONSUMED/SOLD

A. Material and Components Consumed

Opening Stock 9,558.40 7,344.36


Add : Purchases 79,313.10 85,253.10

88,871.50 92,860.19

Less : Closing Stock 12,830.07 9,558.40

(A) 76,041.43 83,301.79

SCHEDULE - 6 : INVESTMENTS

LONG TERM INVESTMENTS

IN GOVERNMENT & TRUST SECURITIES 0.41 0.41

QUOTED

IN EQUITY SHARES (Fully Paid up) - TRADE 78.36 98.83

IN EQUITY SHARES (Fully Paid up) - OTHERS 1,773.79 514.63

IN MUTUAL FUNDS UNITS 10.00 10.00

UNQUOTED

IN EQUITY SHARES (Fully Paid up)-TRADE 404.43 304.24

IN EQUITY SHARES (Fully Paid up)-OTHERS 176.95 124.39

IN PREFERENCE SHARES (Fully Paid up) 0.38 -

IN DEBENTURES 60.00 10.00

OTHER INVESTMENTS 0.52 0.52

SHARE APPLICATION MONEY PENDING

ALLOTMENT (OTHERS) 3,301.18 449.64

APPLICATION MONEY (UNITS) 100.00 -

CURRENT INVESTMENTS

UNQUOTED

IN BONDS - 1,000.98

IN UNITS OF MUTUAL FUNDS 619.11 885.18

TOTAL INVESTMENTS 6,525.13 3,398.82

Aggregate Book Value of quoted Investments 1,862.56 623.87

Aggregate Market Value of quoted Investments 2,303.83 941.30

Aggregate Book Value of unquoted Investments/

Application Money 4,662.57 2,774.95

SCHEDULE - 7 : CURRENT ASSETS, LOANS & ADVANCES

A. Inventories

(As taken, valued and certified by the Management)

Raw Materials including Consumables,

Stores & Spares 12,830.07 9,877.19

Work in Process 1,769.55 1,515.40


Material in Transit and in Bonded warehouse 1,559.47 2,351.84

Drilling and Production Materials 206.29 226.83

Crude Oil 88.43 84.53

(A) 21,362.59 20,456.79

B. Sundry Debtors (Unsecured)

Outstanding for a period exceeding six months

Considered Good 806.00 1,428.79

Considered Doubtful 865.27 808.69

1,671.27 2,237.48

Less : Provision for doubtful debts 846.88 789.70

824.39 1,447.78

Others - Considered Good 25,270.98 32,300.30

(B) 26,095.37 33,748.08

C. Cash & Bank Balances

Cash on hand 16.14 16.05

Cheque/Drafts on hand /in Transit 466.55 161.58

Balances With Bank

In Current Accounts 4,552.75 3,530.18

In Fixed Deposits 14,135.02 16,222.15

In Margin Money 3.60 -

In Dividend/Interest Warrant Account (Per Contra) 38.10 40.69

(C) 19,212.16 19,970.65

D. Other Current Assets

Interest Accrued 59.67 58.48

Insurance Claim Receivable 36.08 31.54

Duty Drawback Receivable - 1.91

Other Receivable 131.31 463.82

(D) 227.06 555.75

E. Loans & Advances (Unsecured, considered good)

Advances recoverable in Cash or in

kind or for value to be received 21,434.06 13,958.24

Balance with Central Excise / Customs Department 150.50 531.75

Advance Fringe Benefit Tax ( Net of Provision) 0.03 -

Other Deposits 299.07 181.82

(E) 21,883.66 14,671.81

TOTAL( A to E ) 88,780.84 89,403.08

SCHEDULE - 8 : CURRENT LIABILITIES & PROVISIONS

A. Current Liabilities

Sundry Creditors * 15,858.23 21,610.66

Advance from Customers 100.51 -

Bank Overdraft as per books 1,177.63 355.93

Income Received in Advance 1.64 78.96

Interest Accrued but not due 464.70 441.96

Other Liabilities 4,754.54 7,370.17

Unclaimed Dividend/Interest (Per Contra) 38.10 40.69

* Including Acceptance of Rs.4,077.12 million

(Previous year Rs. 3,085.77 million)

(A) 22,395.35 29,898.37

B. Provisions

Provision for Income Tax (Net of Advance Tax) 479.12 368.53



Provision for Corporate Tax on Proposed Dividend 142.73 113.23

Provision for Warranty and Maintenance Expenses 405.49 390.10

Provision for Leave Encashment 118.93 105.42

Provision for Retirement Benefits 1,061.08 1,612.04

Provision for Restructuring cost 79.89 62.26

Provision for Contingencies / other provisions 72.45 132.64

Provision for Exchange Rate Fluctuation 1,023.91 -

(B) 4,223.43 3,591.54

TOTAL (A + B) 26,618.78 33,489.91

SCHEDULE - 9 : MISCELLANEOUS EXPENDITURE

(To the extent not written off or adjusted)

Preliminary Expenses

As per Last Balance Sheet 0.05 0.07

Less : Written off during the year 0.05 0.02

TOTAL - 0.05

SCHEDULES TO PROFIT AND LOSS ACCOUNT

42


B. (Increase)/Decrease in Stock

Closing Stock :


Work in Process 1,769.55 1,487.45

6,766.76 7,790.41

Opening Stock :



6,302.96 4,430.63

Work in Process 1,487.45 1,709.78


1,487.45 1,715.37

7,790.41 6,146.00

(B) 1,023.65 (1,644.41)

TOTAL (A+B) 77,065.08 81,657.38

SCHEDULE - 12 :PRODUCTION & EXPLORATION

EXPENSES - OIL & GAS

Production Expenses 358.41 241.93

Royalty 384.83 393.96

Cess 566.53 543.25

Production Bonus 107.80 191.87

Government Share in Profit - Petroleum 6,763.18 7,861.84

Abandonment Costs 47.64 61.24

Producing Properties Written Off 833.95 177.36

Exploration Expenses 507.41 111.76

TOTAL 9,569.75 9,583.21

SCHEDULE - 13 :SALARY, WAGES &

EMPLOYEES’ BENEFITS

Salary, Wages & Other Benefits 4,741.26 6,429.35

Contribution to Provident and other Funds 1,074.14 667.31

Staff Welfare 267.73 248.24

TOTAL 6,083.13 7,344.90


30th Sept., 2007 30th Sept., 2006


SCHEDULE - 14 :MANUFACTURING &

OTHER EXPENSES

Rent,Rates & Taxes 891.04 810.44

Power, Fuel & Water 2,918.86 3,395.34

Repairs to Building 38.41 35.94

Repairs to Plant & Machinery 95.68 66.06

Repairs & Maintenance-others 397.81 546.84

Bank Charges 379.33 320.83

Directors’ Sitting Fees 1.22 0.78

Royalty 108.96 212.17

Printing & Stationery 22.47 36.04

Freight & Forwarding 1,988.66 2,192.41

Advertisement & Publicity 974.20 1,068.13

Sales Promotion expenses 330.37 544.37

Discount & Incentive Schemes 2,346.57 2,802.97

Legal & Professional Charges 479.18 422.84

Donation 71.86 71.59

Insurance Expenses 485.07 565.59

Auditiors’ Remuneration 49.81 60.42

Bad Debts Written off 56.23 41.73

Warranty and Maintenance Expenses 585.23 540.67

Miscellaneous Expenditure written off 0.05 0.02

Technical Know-How Fees - 8.71

Restructuring Cost 483.13 -

Product Development 0.59 -

Diminution in Value of Investments - -

Miscellaneous Expenses 1,637.14 2,171.07

TOTAL 14,341.87 15,914.96

SCHEDULE - 15 : INTEREST & FINANCE CHARGES

On Fixed Period Borrowings 3,723.30 2,662.36

On Others 842.07 752.10

TOTAL 4,565.37 3,414.46


30th Sept., 2007 30th Sept., 2006


SCHEDULE - 16 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A ) SIGNIFICANT ACCOUNTING POLICIES:

1. Basis of Consolidation

a) The Consolidated financial statements (CFS) relate to Videocon Industries Limited (“the Company” or “the Parent Company”) and its subsidiary companies “collectively referred to as “the

Group”.

b) The financial statements of the subsidiary companies used in the preparation of the Consolidated Financial Statement are drawn upto the same reporting date as that of the Company i.e.

30th September, 2007.

c) The CFS have been prepared in accordance with the Accounting Standard 21 “Consolidated Financial Statements”, Accounting Standard 27 “Financial Reporting of Interests in Joint

Venture” and Accounting Standard 23 “Accounting for investments in Associates in Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India.

d) Principles of Consolidation:

The CFS have been prepared on the following basis:

i) The financial statements of the Company, its subsidiary companies and jointly controlled entities have been consolidated on a line-by-line basis by adding together the book values

of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances /transactions and unrealised profits or losses.

ii) All separate financial statements of subsidiaries, originally presented in currencies different from the Group’s presentation currency, have been converted into Indian Rupees (INR)

which is the functional currency of the parent company. In case of foreign subsidiaries, revenue items have been consolidated at the average of the rates prevailing during the year.

All assets and liabilities are translated at rates prevailing at the balance sheet date. The exchange difference arising on the translation is debited or credited to Foreign Currency

Translation Reserve.

iii) The CFS have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the

Company’s separate financial statements except in respect of depreciation and retirement benefits,where it was not practicable to use uniform accounting policies in case of certain

foreign subsidiaries. However, the amount of impact of these differences is not material.

iv) The excess of the cost to the company of its investment in subsidiary over the Company’s share of equity of the subsidiary as at the date on which investment in subsidiary is made,

is recognised in the financial statement as Goodwill. The excess of Company’s share of equity and reserve of the subsidiary Company over the cost of acquisition is treated as Capital

Reserve.

v) The difference between the proceeds from disposal of investment in a Subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognised in the

Consolidated Statement of Profit and Loss Account as the profit or loss on disposal of Investment in Subsidiary.

vi) Minority interest in the net assets of Consolidated Subsidiary consists of (a) The amount of equity attributable to minorities at the date on which investment in a subsidiary is made

and (b) The minorities share of movements in equity since the date the Parent subsidiary relationship came into existence.

vii) Investments in entities in which the company or any of its subsidiaries has significant influence but not a controlling interest, are reported according to the equity method. The

carrying amount of the investment is adjusted for the post acquisition change in the investor’s share of net assets of the investee. The consolidated profit and loss account includes

the company’s share of the results of the operations of the investee.

43


e) The companies which are included in the consolidation with their respective countries of incorporation and the percentage of ownership interest therein of the Company as on 30th

September, 2007 are as under:

Name of the subsidiary Country of incorporation Percentage of Holding As at

30th Sept., 2007 30th Sept.,2006

Paramount Global Ltd. Hong Kong 100% 100%

Middle East Appliances LLc Sultanate of Oman 100% 100%

Global Energy Inc Cayman Islands 100% NIL

(w.e.f 10th October 2006))

Videocon Display Research Co. Ltd. Japan 100% NIL

(w.e.f. 9th March 2007)

Sky Billion Trading Ltd. Hong Kong 100% NIL

(w.e.f 21st November 2006)

Mars Overseas Ltd. Cayman Islands NIL 100%

(up to 26th September 2007)

Videocon Global Ltd. British Virgin Islands 100% 100%

Venus Corporation Ltd. Cayman Islands 100% 100%

Powerking Corporation Ltd. Cayman Islands 100% 100%

Videocon (Mauritius) Infrastructure Ventures Ltd. Mauritius 100% 100%

Gajanan Electronics and Home Appliances Pvt. Ltd. India NIL 100%

(Up to 26th September 2007)

Mayur Household Electronics Appliances Pvt. Ltd. India 100% 100%

Godavari Consumer Electronics Appliances Pvt. Ltd. India 100% 100%

Eagle Corporation Ltd. Cayman Islands 100% 100%

Technologies Displays Americas LLC * State of Delaware 100% 100%

(Formerly Thomson Displays Americas LLC)

Technologies Displays Mexicana S.A. de.CV *

(Formerly Thomson Display Mexicana S.A. de.CV ) Mexico 100% 100%

VDC Technologies S.P.A. * Italy 100% 100%

TTD International S.A. * France 100% 100%

(Formerly Thomson Tubes & Displays S.A. )

TDP S.P.z.o.o.* Poland 100% 100%

(Formerly Thomson Displays Polska S.P.z.o.o. )

TTD International Ltd.* Hongkong 100% NIL

(w.e.f. 30th January 2007)

TGDC Guandong Displays Co. Ltd.*

( Formerly Thomson Guandong Displays Co. Ltd. ) China 91.3% 91.3%

Thomson Display Technology Research & Development Co. Ltd.* China 100% 100%

VDC Technologies Deutschland GmbH ** Germany 100% NIL

(w.e.f. 14th September 2007)

* Subsidiaries of Eagle Corporation Ltd.

** Subsidiary of VDC Technologies S.P.A.

Name of the Associate Country of incorporation Percentage of Holding As at

30th Sept., 2007

Evans Fraser & Co. (India) Ltd. India 41.67%

2. Basis of Accounting:

a) The financial statements are prepared under historical cost convention, except for

certain Fixed Assets which are revalued, using the accrual system of accounting in

accordance with the accounting principles generally accepted in India (Indian GAAP)

and the requirements of the Companies Act, 1956, including the mandatory

Accounting Standards issued by the Institute of Chartered Accountants of India, as

referred to in Section 211 (3C) of the Companies Act, 1956.

b) Use of Estimates

The preparation of financial statements requires the management of the Company to

make estimates and assumptions that affect the reported balances of assets and

liabilities and disclosures relating to the contingent liabilities as at the date of the

financial statements and reported amounts of income and expenses during the year.

Example of such estimates include provisions for doubtful debts, employee retirement

benefits plans, provision for income tax, accounting for contract costs expected to

be incurred to complete software development and the useful lives of fixed assets.

3. Fixed Assets:

a) Fixed Assets are stated at actual cost, except for certain fixed assets which have

been stated at revalued amounts, less accumulated depreciation / amortisation and

impairment loss, if any. The actual cost is inclusive of freight, installation cost, duties,

taxes, financing cost and other incidental expenses but net of Modvat/Cenvat/Value

added tax. Exchange difference, if any, in respect of liabilities incurred to acquire

fixed assets is adjusted to the carrying amount of respective fixed assets.

b) Capital Work in Progress is carried at cost, comprising of direct cost, attributable

interest and related incidental expenditure. The advances given for acquiring fixed

assets are shown under Capital Work in Progress.

4. Joint Ventures for Oil and Gas Fields:

In respect of joint ventures in the nature of Production Sharing Contracts (PSC) entered

into by the Company for oil and gas exploration and production activities, the Company’s

share in the assets and liabilities as well as income and expenditure of Joint Venture

Operations are accounted for according to the Participating Interest of the Company as per

the PSC and the Joint Operating Agreements on a line-by-line basis in the Company’s

Financial Statements.

5. Exploration, Development and Production Costs:

The Company follows the “Successful Efforts Method” of accounting for oil and gas

exploration, development and production activities as explained below:

a) Exploration and production cost are expensed in the year/period in which these are

incurred.

b) Development costs are capitalised and reflected as “Producing Properties”. Costs

include recharges to the Joint Venture by the Operator/Affiliate in respect of the

actual cost incurred and as set out in the Production Sharing Contract (PSC).

Producing Properties are depleted using the “Unit of Production Method”.

44


6. Abandonment Costs:

Abandonment Costs relating to dismantling, abandoning and restoring offshore well sites

and allied facilities are provided for on the basis of “Unit of Production Method”. Aggregate

abandonment costs to be incurred are estimated based on technical evaluation by experts.

7. Depreciation and Amortisation:

i) The Parent Company and Indian Subsidiary Companies provide depreciation on fixed

assets held in India on written down value method in the manner and at the rates

specified in the Schedule XIV to the Companies Act, 1956 except a) on Fixed Assets

of Consumer Electronics Division except Glass Shell Division and; b) on office

buildings acquired after 01.04.2000, on which depreciation is provided on straight

line method at the rates specified in the said Schedule. Depreciation on fixed assets

held outside India is calculated on straight line method at the rates prescribed in the

aforesaid Schedule or based on useful life of assets whichever is higher. Producing

Properties are depleted using the “Unit of Production Method”. Leasehold Land is

amortised over the period of lease.

The depreciation on revised carrying amount of fixed assets arising on account of

translation of Foreign Currency Loans availed in respect of the Fixed Assets and on

revaluation of assets is provided as aforesaid over the residual useful life of the

respective assets.

Intangibles: Intangible assets are amortised over a period of five years.

ii) In case of foreign subsidiaries, depreciation is charged to the income statement on

a straight line basis over the estimated remaining useful life of the Assets. Leasehold

land is amortised on straight line method over the period of lease.

8. Impairment of Assets:

The Fixed Assets or a group of assets (Cash generating unit) and Producing Properties are

reviewed for impairment at each Balance Sheet date. In case of any such indication, the

recoverable amount of these assets or group of assets is determined, and if such recoverable

amount of the asset or cash generating unit to which the asset belongs is less than it’s

carrying amount, the impairment loss is recognised by writing down such assets to their

recoverable amount. An impairment loss is reversed if there is change in the recoverable

amount and such loss either no longer exists or has decreased.

9. Investments:

a) Current Investments : Current Investments are carried at lower of cost and quoted/

fair value.

b) Long Term Investments : Quoted Investments are valued at cost or market value

whichever is lower. Unquoted Investments are stated at cost. The decline in the

value of the unquoted investment, other than temporary, is provided for.

Cost is inclusive of brokerage, fees and duties but excludes Securities Transaction

Tax.

10. Inventories:

Inventories including crude oil stocks are valued at cost or net realisable value whichever is

lower. Cost of inventories comprises all costs of purchase, conversion and other costs

incurred in bringing the inventories to their present location and condition. Cost is determined

on Weighted Average Basis.

11. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production

of an qualifying asset are capitalised as part of the cost of that asset. Other borrowing costs

are recognised as an expense in the period in which they are incurred.

12. Excise and Customs Duty:

Excise Duty in respect of finished goods lying in factory premises and Customs Duty on

goods lying in customs bonded warehouse are provided for and included in the valuation of

inventory.

13. MODVAT/ CENVAT/ Value Added Tax:

MODVAT/ CENVAT / Value Added Tax Benefit is accounted for by reducing the purchase

cost of the materials/fixed assets.

14. Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in repect of

ownership.

b) Sale of Crude Oil and Natural Gas are exclusive of Sales Tax. Other sales/turnover

includes sales value of goods, services, excise duty, duty drawback and other

recoveries such as insurance, transportation and packing charges but excludes sale

tax and recovery of financial and discounting charges.

c) Insurance, duty drawback and other claims are accounted for as and when admitted

by the appropriate authorities.

15. Foreign Currency Transactions:

a) Transactions in foreign currencies are recorded at the exchange rate prevailing on

the date of transactions. Current Assets and Current Liabilities are translated at the

year end rate. The difference between the rate prevailing on the date of transaction

and on the date of settlement as also on translation of Current Assets and Current

Liabilities at the end of the year is recognised, as the case may be, as income or

expense for the year.

b) Foreign Currency liabilities in respect of loans availed for fixed assets and outstanding

on the last day of the financial year are translated at the exchange rate prevailing on

that day and any loss or gain arising out of such translation is adjusted to the cost of

the fixed assets and depreciation is also charged/adjusted on such differences.

16. Translation of the financial statements of foreign branch which are integral foreign

operations:

a) Revenue items are translated at average rates.

b) Opening and closing inventories are translated at the rate prevalent at the

commencement and close, respectively, of the accounting year.

c) Fixed assets are translated at the exchange rate as on the date of the transaction.

Depreciation on fixed assets is translated at the rates used for translation of the

value of the assets to which it relates.

d) Other current assets and current liabilities are translated at the closing rate.

17. Retirement Benefits:

a) Contributions to Provident Fund and Family Pension Scheme are accounted for on

accrual basis and charged to Profit & Loss Account.

b) The Company’s employees, except for employees of units at Shahjahanpur, Dist.

Alwar, Rajasthan and at Butibori Dist. Nagpur, Maharashtra, are covered under the

Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation

of India. The Company accounts for gratuity liability equivalent to the premium amount

payable to Life Insurance Corporation of India every year, which is based on actuarial

valuation. The liability with respect to the gratuity for the employees of units at

Shahjahanpur, Dist: Alwar, Rajasthan and at Butibori Dist: Nagpur, Maharashtra are

accounted/ provided for on the basis of acturial valuation at year end.

c) Liability on account of leave encashment in respect of employees of Glass Shell unit

at village Chhavaj, Dist.Bharuch, Gujrat, unit at Shahjahanpur Dist. Alwar, Rajasthan,

and unit at Butibori Dist. Nagpur, Maharashtra, is provided for on actuarial valuation

basis and in respect of other employees to the extent encashable as at the end of the

financial year as per rules of the Company.

d) In case of foreign subsidiaries retirement benefits are recognised as per the respective

local laws.

18. Taxation:

Income tax comprises of Current Tax, Deferred Tax and Fringe Benefit Tax.

Current Tax :

Provision for Current Tax and Fringe Benefit Tax is calculated on the basis of the provisions

of local laws of respective entity.

Deferred Tax :

Deferred tax assets and liabilities are recognised for the future tax consequences of timing

differences, subject to the consideration of prudence. Deferred tax assets and liabilities are

measured using the tax rates enacted or substantively enacted by the balance sheet date.

The carrying amount of deferred tax asset/liability are reviewed at each Balance Sheet date.

19. Share Issue Expenses:

Share issue expenses are written off to Securities Premium Account.

20. Premium on Redemption of Bonds / Debentures:

Premium on Redemption of Bonds / Debentures are written off to Securities Premium

Account.

21. Research and Development:

Revenue expenditure pertaining to Research and Development is charged to revenue under

the respective heads of account in the period in which it is incurred. Capital expenditure, if

any, on Research and Development is shown as an addition to Fixed Assets under the

respective heads.

22. Accounting for Leases:

Where the company is lessee

a) Operating Leases: Rentals in respect of all operating leases are charged to Profit &

Loss Account.

b) Finance Leases:

(i) Rentals in respect of all finance leases entered before 1st April, 2001 are

charged to Profit & Loss Account.

(ii) In accordance with Accounting Standard - 19 on “Accounting for Leases”

issued by the Institute of Chartered Accountants of India, assets acquired

under finance lease on or after 1st April, 2001, are capitalised at the lower of

their fair value and present value of the minimum lease payments and are

disclosed as “Leased Assets”.

23. Warranty:

Provision for the estimated liability in respect of warranty on sale of consumer elecrtonics

and Home Appliances product is made in the year in which the revenues are recognised,

based on technical evaluation and past experience.

45


24. Prior Period Items:

Prior period items are included in the respective heads of accounts and material items are

disclosed by way of notes to accounts.

25. Provision, Contingent Liabilities and Contingent Assets:

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised

when there is a present obligation as a result of past events and it is probable that there will

be an outflow of resources.

Contingent Liabilities are disclosed by way of Notes to Accounts. Disputed demands in

respect of Central Excise, Customs, Income tax and Sales Tax are disclosed as contingent

liabilities. Payment in respect of such demands, if any, is shown as an advance, till the final

outcome of the matter.

Contingent assets are not recognised in the financial statements.

26. Other Accounting Policies:

These are consistent with the generally accepted accounting practices.

B] NOTES TO ACCOUNTS: As at As at

30th Sept., 2007 30th Sept., 2006


1. Contingent Liabilities not provided for:

a) Letters of Guarantees 13,064.44 13,924.04

Includes Bank Guarantees given to Sales

Tax Department Rs.8.21 million

(Previous year Rs. 869.12 million)

against demand stated in ‘g’ below

b) Letters of Credit opened 5,552.55 4,216.09

c) Customs Penalty - Stayed by High Court 11.85 11.85

d) Customs Duty demands under dispute 95.96 94.42

[Amount paid under protest

Rs. 0.40 million (Previous year

Rs. 3.94 million)]

e) Income Tax demands under dispute 102.16 100.25



Rs. 100.25 million)]

f) Excise Duty and Service Tax

demand under dispute 221.81 387.17



Rs. 2.43 million)]

g) Sales Tax demands under dispute 213.41 243.74



Rs. 34.20 million)]

h) Others 51.42 47.91

i) Disputed Income Tax demand amounting to Rs. 22.29 million in respect of

certain payment made by Ravva Oil & Gas Field Joint Venture is currently

pending before the Income Tax Appellate Tribunal. The ultimate outcome of

the matter cannot presently be determined and no provision for any liability

that may result has been made in the accounts as the same is subject to

agreement by the members of the Joint Venture. Should it ultimately become

payable, the Company’s share as per the participating interest would be upto

Rs. 5.57 million.

2. a) There was a dispute regarding (i) deductibility of Oil and Natural Gas Corporation

Ltd. (ONGC) Carry while computing the Post Tax Rate of Return (PTRR) under the

Ravva Production Sharing Contract (PSC); (ii) deductibility of provision of Site

Restoration Costs for computation of Cost Petroleum and PTRR; (iii) deductibility of

inventory purchased for computation of Cost Petroleum and PTRR; (iv) deductibility

of Notional Dividend Distribution Tax under the Income-tax Act, 1961 for computation

of PTRR; and (v) deductibility of Deposits, Advances and Pre-payments made for

the purpose of Petroleum Operations in the business of Ravva Oil & Gas Field for

computation of Cost Petroleum and PTRR. The Dispute was referred to an

International Arbitration in accordance with the provisions of the Ravva PSC. Vide

the interim award dated 31st March 2005, the Tribunal has upheld the Company’s

claims stated in (i) and (v) above whereas the claim of the Company stated in (ii),

(iii) and (iv) above were rejected by the Tribunal.

While accepting the Interim Award, the Company computed and submitted the

calculation on 31st May 2005 to Government of India (GOI) indicating the amount

payable by the Company after applying the said Arbitration Award at US$ 27.02

million equivalent to Rs. 1,081.88 million, which was not accepted by GOI and it

claimed that the Company needs to pay US$ 43.72 million equivalent to Rs. 1,750.55

million and interest thereon applying the same Arbitration Award. The Company

filed a supplementary application on 7th July 2005 followed by an amendment

application on 8th August 2005 with the Arbitration Tribunal with a prayer to determine

the correct amount payable to GOI as well as to determine the interest, if any, payable

on the same to GOI. Pending the final decision of the Hon’ble Arbitral Tribunal, the

Company has accounted for and paid the sum of US$ 43.72 million equivalent to Rs.

1,750.55 million to GOI on ad hoc basis.

The GOI has further filed an affidavit on 10th May 2005 before the Kuala Lumpur

High Court in Malaysia challenging the Arbitration Award and praying for setting

aside the Partial Award dated 31st March 2005 only in respect of ONGC Carry Issue

whereas the Company has challenged the jurisdiction of the Kuala Lumpur High

Court and therefore the maintainability of such an appeal at that Court.

b) There is a dispute between the Company and GOI with regard to the computation of

interest on delayed payment of profit petroleum to the extent of US$ 67,636 equivalent

to Rs. 2.71 million. The Company has filed an Interim Application on 7th July 2005

before the Hon’ble Arbitral Tribunal for final determination of such amount, pending

which no provision has been made by the Company.

c) There is a dispute regarding the rate of conversion from US$ into Indian rupees

applicable to the Nominees of the GOI for the purpose of payment of amount of the

invoices for sale of the Crude Oil by the Company under the Ravva PSC. The dispute

was referred to an International Arbitration in accordance with the provisions of the

Ravva PSC. Vide the interim award dated 31st March 2005, the Tribunal has partly

upheld the Company’s claim. While accepting the Award, the Company has worked

out and submitted a computation on 30th June 2005 to GOI indicating the amount

receivable at Rs.121.43 million being the amount short paid by GOI nominees up to

19th June, 2005 and interest thereon also calculated up to 19th June 2005.The

Company further vide its letter dated 22nd August 2005 updated its claim indicating

the total amount receivable from GOI Nominees at Rs.124.42 million being the amount

short paid by GOI nominees up to 31st July 2005 and interest thereon also calculated

up to 31st July 2005. However, GOI and the nominee of the GOI have rejected the

computation and claim made by the Company.

The Company has filed a supplementary application on 7th July 2005 and an

amendment application on 8th August 2005 with the Arbitration Tribunal with a prayer

to determine the correct amount payable by GOI/its Nominees as well as to determine

the interest, if any, payable on the same. The GOI has filed an Original Miscellaneous

Petition (OMP) 329 of 2006 dated 20th July 2006 before Hon’ble Delhi High Court

challenging the award in respect of this Dispute. Another OMP 223 of 2006 dated

9th May 2006 has been filed by GOI’s nominees HPCL and BRPL in the Hon’ble Delhi

High Court challenging the Partial Award dated 31st March 2005 in respect of

Conversion/Exchange Rate Matter. Both OMP 223 of 2006 are presently sub-judice

before the Hon’ble Delhi High Court. The GOI nominees continue to make payments

at the exchange rate without considering directive from the Hon’ble Arbitral Tribunal

in this regard.

d) GOI has filed OMP 255 of 2006 dated 30th May 2006 before the Hon’ble Delhi High

Court under section 9 of the Arbitration and Conciliation Act for change of situs of

arbitration from London (U.K.) to Kuala-Lumpur (Malaysia). GOI has challenged

London as the permanent seat of arbitration for resolution of disputes under the

Ravva PSC and has claimed for declaration of Kuala-Lumpur as the permanent seat

of arbitration whereas the Company honours the award dated 15th November 2003

of the Hon’ble Arbitral Tribunal, passed with mutual consent of both the GOI and the

Company, permanently fixing the seat of Arbitration at London in respect of disputes

stated in (a),(b), and (c) above. The Hon’ble Arbitral Tribunal vide its letter dated

28th March 2007 has indicated that it shall contiune with the arbitration proceedings,

in respect of the disputes referred above, after receiving the judgement of the Hon’ble

Delhi Court in OMP 255 of 2006.

e) In respect of the Disputes stated in (i) and (ii) of (a) above, the GOI has vide its letter

dated 3rd November 2006 now raised a collective demand of Rs. 334.13 Million on

account of additional profit petroleum payable and interest on delayed payments of

profit petroleum calculated up to 30th September 2006 pursuant to the Partial Arbitral

Award dated 31st March 2005 in the Dispute stated above at (a) and Interim Award

dated 12th February 2004 and Partial Award dated 23rd December 2004 in the Dispute

stated above at (b). The Company has disputed such demand and is instead seeking

refund of US$ 16.70 Million equivalent to Rs. 668.67 million excess paid by the

Company to the GOI with interest thereon.

Any further sum required to be paid or returnable in respect of dispute above at (a)

to (e) in accordance with the determination of the amount by Hon’ble Arbitral Tribunal/

High Courts in this behalf shall be accounted for on the final outcome in this regard.

3. In case of parent company, the gross block of fixed assets includes Rs.9,244.75 million

(Previous year Rs. 9,245.73 million ) on account of revaluation of fixed assets carried out

in the past on 1st April 1998 and 1st October 2002. The additional depreciation consequent

46


upon revaluation of fixed assets is being charged to Profit and Loss account. Hitherto, an

amount equivalent to the said additional depreciation was being withdrawn from General

Reserve and credited to Profit and Loss Account. From this year, the Company has changed

this accounting policy and the amount equivalent to the such additional depreciation is

being withdrawn from Revaluation Reserve and credited to the Profit and Loss Account.

Consequent to this change in policy the cumulative amount transferred from General Reserve

on account of additional depreciation relating to revaluation of fixed assets upto 30th

September 2006 amounting to Rs.7,538.89 million has been transferred from Revaluation

Reserve Account to General Reserve Account.

This change in Accounting Policy has no impact on the Profit for the Year.

4. During the year certain revalued assets have been disposed off. As required by Accounting

Standard - 10 “Accounting for Fixed Asset”, loss on disposal of such assets to the extent of

Rs.0.98 million (Previous year Rs.13.64 million) is directly charged to Revaluation Reserve

relating to the increase which was previously recorded as a credit to Revaluation Reserve.

5. A) The Company had, during the year 2006, issued

a) 90,000 Foreign Currency Convertible Bonds of US$ 1000 each (Bonds) due on 7th

March, 2011 [outstanding Bonds 89,000 (Previous year 90,000)].

i The bonds are convertible at the option of the bondholders at any time on and

after 20th March 2006 upto the close of business on 28th February, 2011 at a

fixed exchange rate of Rs.44.145 per 1 US$ and at initial conversion price of

Rs.545.24 per share being at premium of 15% over the reference share price.

The conversion price shall be adjusted downwards in the event that the average

closing price of shares for 15 consecutive trading days immediately prior to

the reset date is less than conversion price, subject to a floor price of

Rs. 410/- as adjusted in accordance with the anti-dilution provisions.

ii The Bonds are redeemable in whole but not in part at the option of the company

on or after 7th February, 2009 but prior to 28th February, 2011 if aggregate

value on each of 30 consecutive trading days ending not earlier than 14 days

prior to the date upon which notice of such redemption is given was at least

130% of the accreted principal amount.

iii The Bonds are redeemable at maturity date on 7th March, 2011 at 116.738%

of its principal amount, if not redeemed or converted earlier.

b) 105,000 Foreign Currency Convertible Bonds of US$ 1000 each (Bonds) due on

25th July 2011.[outstanding Bonds 104,901 (Previous year 105,000).]

i The bonds are convertible at the option of the bondholders at any time on or

after 2nd September 2006 until 18th July 2011 except for certain closed

periods, at a fixed exchange rate of Rs.46.318 per 1 US$ and at initial

conversion price of Rs.511.18 per share being at premium of 22% over

reference share price. The conversion price shall be adjusted downwards in

the event that the average closing price of shares for 15 consecutive trading

days immediately prior to the reset date is less than conversion price, subject

to a floor price of Rs. 410/- as adjusted in accordance with the anti-dilution

provisions.

ii Redeemable in whole but not in part at the option of the Company on or after

24th August 2009, if aggregate value on each of 30 consecutive trading days

ending not earlier than 14 days prior to the date upon which notice of such

redemption is given was at least 130% of the accreted principal amount.

iii Redeemable at maturity date on 25th July, 2011 at 127.65% of its principle

amount, if not redeemed or converted earlier.

B) During the year, the holders of 1099 Bonds have exercised their option and have

converted the Bonds into Equity Shares at the fixed rate of exchange. In view of the

above and considering the uncertainity of the number of bond holders exercising the

option of conversion at the fixed exchange rate and uncertainty of foreign exchange

rate prevailing on the dates of redemption, a provision of Rs 1,023.91 million being

the amount of foreign exchange fluctuation gain on FCCB during the year, has been

made in the accounts in accordance with the requirement of Accounting Standard

29-Provisions, Contingent Liabilities and Contingent Assets.

C) Subsequent to the year end, 85,250 Bonds have been converted into 8,339,350 equity

shares of Rs.10/- each on exercise of the option by the bond holders.

As at As at

30th Sept., 2007 30th Sept., 2006


6. The major components of deferred tax liabilities/

assets are as under:

a) Deferred Tax Liabilities

Related to Depreciation on Fixed Assets &

amortisation 5,292.78 2,798.24

5,292.78 2,798.24

b) Deferred Tax Assets

i) Related to Unabsorbed Depreciation

and Business Loss 651.73 1,139.23

ii) Expenses charged in the financial statements

but allowable as deduction in future years

under the Income Tax Act, 1961 19.63 21.30

iii) Diminution in value of investments charged

in Profit & Loss Account 54.84 40.74

iv) Tax Credit available U/S 115 JAA 1,011.88 -

v) Other 975.57 65.51

2,713.65 1,266.78

Net Deferred Tax Liability 2,579.13 1,531.46

7. Joint Venture Disclosure:

Unincorporated Joint Venture

a) Ravva Oil & Gas Field:

The Production Sharing Contract (PSC) in respect of Ravva Oil and Gas Field was

entered into on 28th October 1994 (Effective Date) between the President of India on

behalf of the Government of India and contractor parties viz. Oil and Natural Gas

Corporation Ltd, erstwhile Petrocon India Limited (now amalgamated with the

Company), Cairn Energy India Pty Limited and Ravva Oil (Singapore) Pte. Ltd. The

contractor parties have persuant to the PSC, entered into a Joint Operating Agreement

on the Effective Date. Cairn Energy India Pty Ltd. is the Operator. The participating

interest of the Company in the said PSC is 25%.

b) The Consortium comprising the Company, Oilex NL Australia, GAIL India Ltd.,

Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. has

been awarded the Block #56, on the Eastern Plank of the Central Salt Producing Oil

Field in Oman. The Exploration Production Sharing Agreement and Joint Operating

Agreement has been executed on 28th June, 2006. The exploration drilling would be

commenced after the aquisition of additional seismic data. The Participating interest

of the Company in the said venture is 25%. The Capital Commitments of the Company

based on estimated minimum work programme for first exploration period of three

years in relation to its participating interest is Rs. 251.04 (Previous year Rs.344.43)

million.

c) Great Artesian Oil and Gas Ltd (GOG) holds 100% of EPP 27 offshore Otway Basin,

South Australia which is in year 6 of the permit term. The Company, Oilex NL, Gujarat

State Petroleum Corporation Ltd. and GOG have entered into Farm-in agreement and

Joint Operating Agreement in February, 2006.The acquisition of 2D Seismic Data

and drilling of one exploration well is in progress. The participating interest of the

Company is 20%. The minimum work programme proposed in the bid application

for seismic survey, data processing and drilling of one exploration well involves

capital commitment in relation to its participating interest of Rs. 171.64 (Previous

year Rs.194.53) million.

d) The Consortium comprising the Company, Oilex NL, Australia, Gujarat State Petroleum

Corporation Ltd, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum

Corporation Ltd. has been awarded a Block WA-388-P for a term of 6 years from

Government of Western Australia. Joint operating Agreement has been signed by all

of Joint venture parties in March 2007. The acquisition of Seismic Data is in progress.

The participating interest of the Company is 20%. The Capital Committments of the

Company based on six year work program in relation to its participating interest is

Rs.163.30 million (Previous year Rs. NIL).

e) The consortium comprising the Company and Bharat PetroResources Limited (BPRL),

a wholly owned subsidiary of Bharat Petroleum Limited, have entered into an

agreement with EnCana Corporation and 749739 Alberta Limited (“Vendors”) for

purchase from Vendors, 100% equity of EnCana Brasil Petróleo Limitada, (EBPL)

for a consideration of approximately US$ 165 million. The effective date of the

agreement has been agreed to be January 01, 2007. Closing of the transaction is

subject to normal closing conditions and regulatory approvals. EBPL has interests

in four concessions with ten deep water offshore exploration blocks in Brazil. The

Company and BPRL are equal partners in the consortium. At present the regulatory

authorities in Brasil are reviewing the application of EBPL for granting its approval

for change of control of EBPL.

f) The consortium, comprising the subsidiary (Special Purpose Vehicle) of the Company,

Global Energy Inc. Oilex (JPDA 06-103) Limited, GSPC (JPDA) Limited and Bharat

Petro Resources JPDA Limited, has been awarded block JPDA 06-103 situated within

the Bonaparte Basin, East Timor. The PSC has been signed on 15th November, 2006

and Joint Operating Agreement has been signed on 5th January, 2007. The

participating interest of Global Energy Inc. is 25%. Contract for 3D Seicmic Data has

been awarded. The capital commitments based on committed minimum work

programme for five years period in relation to participating interest of Global Energy

Inc is Rs.716.72 million. (Previous Year Rs.NIL).

The Financial Statements reflect the share of the Company in the assets and the

liabilities as well as the income and the expenditure of Joint Venture Operations on a

line by line basis. The Company incorporates its share in the operations of the Joint

Venture based on statements of account received from the Operator. The Company

47


has, in terms of Accounting Policy No. A-7 above, recognised abondonment costs

based on the latest technical assessment of current costs available with the Company

as cost of producing properties and has been providing Depletion thereon under

‘Unit of Production’ method as part of Producing Properties in line with Guidance

Note on Accounting of Oil and Gas Producing Activities issued by the Institute of

Chartered Accountants of India.

8. The company has kept the investment activities separate and distinct from the normal

business. Consequently, all the income and expenditure pertaining to investment activities

have been allocated to the Investments & Securities Division and the income/loss after

netting off the related expenditure has been shown as “Income/(Loss) from Investments &

Securities Division” under “Other Income”.

For the year For the year

ended ended

30th Sept., 2007 30th Sept., 2006


9. The Income from Investments and

Securities Division includes:

i. Dividends:

on Long Term Investments 15.71 15.35

on Current Investments 1.28 -

ii. Debenture/Bond - Interest/Premium:

on Long Term Investments (TDS Rs. 0.17

million (Previous year Rs.3.19 million)) 8.03 14.20

iii. Gain / (Loss) on Sale of Investment:

Long Term 492.11 172.12

Current 254.78 (14.77)

10. Earnings Per Share:

i. Net Profit attributable to Equity Shareholders

Net Profit as per Profit & Loss Account 7,058.95 7,923.37

Less : Dividend on Preference Shares including

Tax on the same 41.97 38.62

Net Profit attributable to Equity Shareholders

including exceptional Items 7,016.98 7,884.75

Add/(Less): Exceptional Items (net of taxes) - (131.35)

Net Profit attributable to Equity Shareholders

excluding exceptional Items 7,016.98 7,753.41

Add : Changes (net) related to FCCBs 22.30 -

Adjusted Net Profit for Diluted EPS 7,039.28 7,753.41

ii. Weighted Average number of equity shares for

Basic EPS 221,019,058 220,986,249

Weighted Average number of equity shares for

Diluted EPS 239,963,551 220,986,249

iii. Basic Earnings per Share including exceptional items Rs. 31.75 Rs. 35.68

Diluted Earnings per Share including exceptional items Rs. 29.33 Rs. 35.68

Basic Earnings per Share excluding exceptional items Rs. 31.75 Rs. 35.09

Diluted Earnings per Share excluding exceptional items Rs. 29.33 Rs. 35.09

iv. Reconciliation of weighted average numbers of

Equity Shares outstanding during the year

For Basic Earning Per Share 221,019,058 220,986,249

Add : Adjustment on account of FCCBS 18,944,493 -

For Diluted Earning Per Share 239,963,551 220,986,249

11. The Company has invested an amount of Rs. 719.11 million (Net of diminution) in units of

mutual funds out of which investments to the extent of Rs. 550.20 million have been

earmarked against provision for abandonment cost included under the head ‘Other Liabilities’

in Schedule 8.

12. Related Party Disclosures

As required under Accounting Standard 18 on “Related Party Disclosure”, the disclosure of

transaction with related parties as defined in the Accounting Standard are given below.

a) List of Related Parties

i) Associate and Joint Venture

- Ravva Oil & Gas Field (unincorporated) Joint Venture - Participating Interest 25%

- Evans Fraser & Co. (India) Ltd.- Associate

- WA - 388-P Joint Venture - participating interest 20%

- Block 56 Joint Venture - Oman - participating interest 25%

- EPP 27 Joint Venture - participating interest 25%

ii) Key Management Personnel

- Mr. Venugopal N. Dhoot - Chairman & Managing Director

- Mr. Pradipkumar N. Dhoot - Whole time Director

- Mr. Henke Dieter

- Mr. Pradzynski Michal

- Mr. Albino Bessa

- Mr. Neeraj Kumar

- Mr. Marco Padela

- Mr. Sanjay Karwa

- Mr. Toshihiro Ueki

b) Transactions/outstanding Balances with Related Parties :

The company has entered into transactions with certain related parties as listed below.

The Board considers such transactions to be in normal course of business.

(Rs. Million)

Nature of Transaction Associates/ Key Management

Joint Venture Personnel

Contribution towards share of expenditure 1735.31

(470.21)

Remuneration 53.52

(64.27)

Outstanding as at 30th September 2007

Receivable from unincorporated Joint Venture 35.11

(2.18)

Payable to unincorporated Joint Venture 2.14

(0.29)

13. Funds mobilised by issue of Foreign Currency Convertible Bonds have been utilised for the

object of the issue i.e. for expansion of glass shell manufacturing facilities, expansion of

consumer electronics and household appliances business and global CPT business.

14. Reserves:

Share of the Company in Ravva Oil & Gas field (Unincorporated) Joint Venture remaining

reserves on proved and probable basis (as per Operator’s estimates)

Particulars Unit of measurement As on As on

30.09.2007 30.09.2006

Crude Oil Million Metric Tonnes 2.19 2.77

Natural Gas Million Cubic Metres 490.81 678.36

15. As required by Accounting Standard 29 “Provisions, Contingent Liabilities and Contingent

Assets” issued by Institute of Chartared Accountants of India the disclosure with respect to

provisions are as follows:

As on 30.09.2007

Exchange Rate Warranty &

Fluctuation Maintenance

Expenses

(Rs. in Million) (Rs. in Million)

a) Amount at the beginning of the year - 390.10

b) Additional provision made during the year 1,023.91 393.83

c) Amount used - 378.44

d) Unused amount reversed during the year - -

e) Amount at the end of the year 1,023.91 405.48

16. A. Operating Lease

i) Future obligation of the Company for assets taken on all leases entered into before

1st April 2001 is Rs. Nil.

ii) Subsequent to 1st April, 2001 the Company has entered into operating lease

agreements for Cars, Buildings and equipments. The lease rentals charged during

the year are Rs. 174.50 million.

iii) The maximum obligation on long-term non-cancellable operating leases entered on

or after 1st April , 2001 payable as per the rentals stated in respective agreements

are as follows:

Minimum Lease Payments As at 30.09.07 (Rs. in Million)

Not later than 1 year 227.98

Later than 1 year and not later than 5 years 949.64

More than 5 year 1,864.47

TOTAL 3,042.09

B. Finance Lease

i. Reconciliation between minimum lease payment at Balance Sheet date and

its Present Value.

(Rs. In Million)

a. Total of minimum Lease Payment at the

Balance Sheet date 48.69

b. Less : Finance Charge 3.34

Total present value of minimum lease payments 45.35

(Rs. Million)

ii. Total of minimum Lease Payment at the Balance Sheet date

Minimum lease Present value of

payment minimum lease

payment

a. Payable not later than one year 15.00 13.29

b. Payable later than 1 year and

not later than 5 years 33.69 32.06

48


17. Segment Information

i) The Company and its subsidiaries have identified two reportable segments viz. Crude Oil & Natural Gas and Consumer Electronics & Home Appliances. Segments have been identified and

reported taking into account nature of products and services, the differing risks and return.

a) Segment revenue and expenses include the respective amounts identifiable to each of the segments on the basis of relationship to operating activities of the segment as also

amounts allocated on a reasonable basis. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed

as “Unallocable”

b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other corporate assets and liabilities that cannot

be allocated between the segment are disclosed as “Unallocable”.

c) Primary Segment Information - Business segment:

(Rs. In Million)

Crude Oil & Natural Gas Consumer Electronics & Others Total

Particulars Home Appliances

30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept.,

2007 2006 2007 2006 2007 2006 2007 2006

1. Segment Revenue

- External 14,101.91 14,394.14 111,869.39 115,239.57 - - 125,971.30 129,633.71

- Inter Segment - - - - - - -

Total Segment 14,101.91 14,394.14 111,869.39 115,239.57 - - 125,971.30 129,633.71

2. Segment Result before Interest 4,427.70 4,824.34 6,415.19 4,999.65 - - 10,842.89 9,823.99

Less: Interest Expenses - - - - - - 4,565.37 3,414.46

Add/(Less) Other Unallocable - - - - - - 2,955.74 2,040.42

Profit before Exceptional Items, Minority Interest, Share of Profit

of Associate and Taxation - - - - - - 9,233.26 8,449.95

Add/(Less) : Exceptional Items - - - - - - - 131.35

Add: Adjustment on Disposal of Subsidiaries - - - - - - 18.01 147.09

Less : Provision for Current Tax - - - - - - 1,282.77 916.72

Less : Provision for Deferred Tax - - - - - - 1,085.70 51.02

Less : Provision for Fringe Benefit Tax - - - - - - 23.89 15.41

Profit for the year before Minority Interest and Share of Profit of

Associate - - - - - - 6,858.91 7,745.24

Share of Profit in Associate Company - - - - - - 31.18 23.43

Minority Interest - - - - - - 100.77 (156.67)

Excess provision for Income Tax for earlier years written back - - - - - - 68.08 3.95

Prior Period Adjustments - - - - - - - 307.43

Net Profit for the year - - - - - - 7,058.94 7,923.38

Crude Oil & Natural Gas Consumer Electronics & Unallocable Total

Particulars Home Appliances

30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept., 30th Sept.,

2007 2006 2007 2006 2007 2006 2007 2006

3. Other Information

Segment Assets 3,630.22 3,502.87 147,959.68 147,726.32 18,857.77 11,794.13 170,447.68 163,023.32

Segment Liabilities 1,655.69 1,809.15 86,440.28 92,567.18 13,007.63 3,105.73 101,103.60 97,482.06

Capital Expenditure 4.75 22.26 14,638.42 16,804.89 75.67 26.10 14,718.84 16,853.25

Depreciation 80.02 106.08 5,604.97 4,288.33 66.29 86.12 5,751.28 4,480.53

Non Cash Expenses other than depreciation 833.95 177.36 - - 0.05 0.02 833.99 177.38

ii) Secondary Segment Information

(Rs. In Million)

Particulars Within India Outside India Total

a. Segment Revenue - External Turnover 99,418.69 26,552.61 125,971.30

b. Segment Assets 127,002.19 43,445.49 170,447.68

c. Segment Liabilties 70,116.47 30,987.13 101,103.60

d. Capital Expenditure 9,662.44 5,056.40 14,718.84

As per Accounting Standard 17 on segment reporting (AS-17) issued by the Institute of Chartered Accountants of India, the Company has reported segement information on consolidated basis

including the business conducted through it’s subsidiaries.

18. Capital Reserve on consolidation is net of Goodwill on consolidation of Rs. 93.27 million.

19. Figures in respect of previous year have been regrouped and recasted wherever necessary to make them comparable with those of current year.

Corrigendum The following are the typesetting errors in the printed Annual Report of the year 2006-2007:

Page. No of Annual

Report

Nature of typesetting error To be read as

13 The segment wise turnover of the Consumer Electronics & Home Appliances segment wrongly printed under the segment "Crude Oil & Natural Gas" and vice-versa.

(Rs. Millions)

Segment Current Year ended 30.09.2007

Previous year ended 30.09.2006

Consumer Electronics and Home Appliances

111,869.39 115,239.57

Crude Oil and Natural Gas

14,101.91 14,394.14

22 Schedule 6 i.e., Investment Schedule (In Equity Shares (Fully Paid up)) – Others, printed wrongly as 1,779.79 Million

Rs. 1,773 .79 Million

32 Under serial no. 4(a) Sky Billion Trading Limited. Amount wrongly printed as Rs. 2,284,859/-.

Rs. 2,384,859/-

40 In the note with * the amount wrongly printed as Rs. 9,245.73 million (Previous year Rs. 9,518.45 million)

Gross Block of Plant and Machinery includes Rs. 9,244.75 Million (Previous Year Rs. 9,245.73 Million) being the amount added on revaluation on 01.08.1998 and 01.10.2002.

This Corrigendum is being attached to the Annual Report of the Company for the year 2006-07 and is an integral part of the same.

Regd. Folio No./Client ID No. ..................................................................

I/We .............................................................................................................................................................................................. of

............................................................................................................................................................................... in the district of

........................................................................................................................................ being a Member / Members of the above

named Company hereby appoint .................................................................................................................................................. of

..................................................................... in the district of .............................................................................. or falling him/her

.......................................................................................... of ................................................................................................ in the

district of ................................................................................................................... as my/our proxy to vote for me/our behalf at

the 19th ANNUAL GENERAL MEETING of the Company to be held on Monday, 31st day of March, 2008 at 9.30 A.M. at Registered

Office of the Company at 14 KM Stone, Aurangabad-Paithan Road, Taluka Paithan, Dist. Aurangabad - 431 105, (Maharashtra) and

at any adjournment thereof.

Signed ..............................................this day of ..........................................2008.

NOTE: This form duly completed and signed should be desposited at the Registered Office of the Company not less than 48 hours

before the time of commencement of the Meeting.

PROXY FORM

VIDEOCON INDUSTRIES LIMITEDRegd. Office : 14 KM Stone, Aurangabad-Paithan Road, Village Chittegaon, Taluka Paithan, Dist. Aurangabad - 431 105, (Maharashtra)

ATTENDANCE SLIP

VIDEOCON INDUSTRIES LIMITEDRegd. Office : 14 KM Stone, Aurangabad-Paithan Road, Village Chittegaon, Taluka Paithan, Dist. Aurangabad - 431 105, (Maharashtra)

Regd. Folio No./Client ID No.: ........................................... No. of Shares held .............................................................................

I certify that I am a registered Shareholder/Proxy for the registered Shareholder of the Company.

I hereby record my presence at the 19th ANNUAL GENERAL MEETING of the Company held on Monday, 31st day of March, 2008

at 9.30 A.M. at the Registered Office of the Company at 14 KM Stone, Aurangabad-Paithan Road, Taluka Paithan,

Dist. Aurangabad - 431 105, (Maharashtra)

................................................................................................... ...........................................................................

Member’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. Please read errata for type

setting matter.

Affix

Rupee 1/-

Revenue

Stamp

��

BOOK-POST

If undelivered, please return to :

MCS LIMITED

Unit : VIDEOCON INDUSTRIES LIMITED

Harmony, 1st Floor, Sector 1,

Khanda, New Panvel (West) - 410 206,

District - Raigad (Maharashtra)

Documents

Videocon Industries Ltd_2007