videocon industries limited - Domain-b

Dear Shareholders,
The Board of Directors of your Company are pleased to present the Twentieth Annual
Report together with the Audited Accounts and Auditors’ Report for the year ended
September 30, 2008.
FINANCIAL RESULTS
The performance of the Company, on standalone basis, for the financial year ended
September 30, 2008 is as summarized below:
(Rs. Millions)
Particulars
Year ended Year ended
30.09.2008 30.09.2007
Net Sales 97,536.54 82,854.24
Other Income 288.22 1,663.62
Total Income 97,824.76 84,517.86
Profit before Interest, Depreciation, Exceptional Items 23,560.88 18,953.30
and Tax
Interest & Finance charges 4,011.03 3,106.51
Depreciation 6,602.07 5,017.83
Exceptional Items 1,278.10 -
Profit before Tax 11,669.68 10,828.96
Provision for Taxation 3,126.73 2,276.77
Profit after Tax 8,542.95 8,552.19
The Net Sales of the Company increased from Rs. 82,854.24 Million as on September
30, 2007 to Rs. 97,536.54 Million representing an increase of 17.72% over the previous
financial year. Profit after Tax amounted to Rs. 8,542.95 Million as against Rs. 8,552.19
Million for the previous financial year.
OPERATIONS
The financial year 2007-2008 is yet another year of significant growth for your Company.
Highlights on the performance of the Company during the year under review are
summarized hereunder:
CONSUMER ELECTRONICS & HOME APPLIANCES:
The Company consolidated its position in the Business of Consumer Electronics and
Home Appliances. The Company continued to focus on its growth path in the Consumer
Electronics & Home Appliances Business. During the year under review, the Company
made several path breaking changes, with consolidation of all brands of the Group. Inspite
of economic slowdown, your Company registered a satisfactory performance riding on
new technology introduction, concerted promotional strategy and focused penetration in
key markets.
OIL & GAS:
During the year, the Company strengthened its’ portfolio in oil and gas sector with continuing
exploration activities in the concession areas in Australia, Timor Leste and Oman coupled
with acquisition of further interesting prospects in Brazil and Mozambique.
The Company, jointly with Bharat Petroleum Corporation Limited, had signed on September
8, 2007 an agreement with EnCana Corporation and 749739 Alberta Limited for buying its’
stake in IBV Brasil Petróleo Limitada (formerly EnCana Brasil Petróleo Limitada) which
had participating interests in four deep water Brazilian Exploration Concession Areas,
namely, Campos, Espirito Santos, Sergipe Alagoas and Potiguar Basin encompassing
ten (10) different exploration blocks. The Company successfully completed the said
acquisition after receiving the approval of the Agência Nacional do Petróleo, Gás Natural
e Biocombustíveis, the regulatory authority for oil & gas sector in Brazil. On September
30, 2008, the Operator for the Campos Basin announced pre-salt discovery at the Wahoo
prospect in the Campos Basin.
The Company also acquired ten (10) percent participating interest in Rovuma Offshore
Area 1 Block in Mozambique from Anadarko Petroleum Corporation, USA. The Rovuma
Basin, is located in the northern offshore of Mozambique in the Mozambique Channel
between the island of Madagascar and the East African coast covering about 1.3 million
km2. The first impression of the exploration potential in the Area 1 concession in the
Rovuma Basin is positive.
JV Partners in both the above acquisitions comprise of leading E&P Companies from all
over the world. Exploration activities are continuing in the above Concession Areas and the
Company is hopeful of striking fruitful discoveries in the near future.
Meanwhile, the Company continues to reap dividends from its oil & gas exploration in
Ravva Oil & Gas Field in India.
DIRECTORS’ REPORT
3
TELECOM:
During the year, the Company, through one of its subsidiaries, executed Licence
Agreements with the Department of Telecommunications (the “DOT”) wherein it was
granted the licence to provide unified access services on Pan India basis. The Company
has since been granted spectrum in twenty one (21) circles and the Company has drawn
up a comprehensive plan to meet the financial requirement of its telecom operations. The
Company is in the advanced stage of launching its mobile phone services on Pan India
basis.
The Company intends to diversify into telecom infrastructure to support its telecom
operations and has already drawn up business plan for the same.
POWER:
Pipavav Energy Private Limited, a Wholly Owned Subsidiary of the Company is setting up
a super critical thermal power generation facility in the State of Gujarat. The project is in
preparatory stage and the land has been acquired for the project.
ISSUES/ALLOTMENT OF SECURITIES
During the year, under review, in accordance with the terms and conditions of Issue of
Foreign Currency Convertible Bonds, some of the Foreign Currency Convertible Bonds
holders exercised conversion option. Accordingly, the Company allotted 8,357,063 equity
shares, pursuant to the conversion of Foreign Currency Convertible Bonds holders, as
under:
1. Conversion of FCCBs of US$1,000 each, due on March 07, 2011, at a conversion
price of Rs. 448.59 per equity share:
Sr.
No.
Date of
Allotment
No. of Bonds
Converted
Amount of Bonds
Converted (US$)
No. of Shares
Issued
1 17-Dec-07 10,350 10,350,000 1,018,523
2 10-Jan-08 26,150 26,150,000 2,573,371
3 30-Jan-08 10,500 10,500,000 1,033,286
4 3-Mar-08 180 180,000 17,713
TOTAL 47,180 47,180,000 4,642,893
2. Conversion of FCCBs of US$1,000 each, due on July 25, 2011, at a conversion price
of Rs. 477.00 per equity share:
Sr.
No.
Date of
Allotment
No. of Bonds
Converted
Amount of Bonds
Converted (US$)
No. of Shares
Issued
1 17-Dec-07 13,900 13,900,000 1,349,726
2 10-Jan-08 22,500 22,500,000 2,184,805
3 30-Jan-08 1,850 1,850,000 179,639
TOTAL 38,250 38,250,000 3,714,170
After annual reset the conversion price stands at Rs. 410/- per share.
APPROPRIATIONS
DIVIDEND:
Your directors are pleased to recommend a dividend of Re. 1/- (Rupee One only) per share
for the financial year ended on September 30, 2008, subject to approval by shareholders
at the Twentieth Annual General Meeting. The dividend on equity amounting to Rs. 229.45
Million, and Dividend distribution tax of Rs. 45.25 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.
The dividend payout as proposed is in accordance with the Company’s policy to pay
sustainable dividend besides keeping in view the Company’s need for capital, its growth
plans and the intent to finance such plans through internal accruals.
TRANSFER TO RESERVES:
Your directors propose to transfer Rs. 2,000.00 Million to the General Reserve. After
appropriations, the balance amount of Rs. 20,619.94 Million (Previous year Rs. 14,516.42
Million) is proposed to be carried to Balance Sheet.
TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND
The Company has transferred an amount of Rs. 3.41 million in respect of unclaimed/unpaid
dividend for financial year 2000-2001, to Investor Education & Protection Fund, since the
amount was due & payable and remained unclaimed and unpaid for a period of seven
years, in terms of Section 205 A(5) of the Companies Act, 1956.