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Directors Report of Moser Baer India Ltd.

Mar 31, 2016

Dear Shareholders,

The Directors have pleasure in presenting their 33rd Annual Report on the business and operations of the Company together with the Audited Financial Statement for fifteen months period ended 31st March, 2016.

Financial Results (Standalone Operations)

(Rupees in Millions)

Period ended March 31, 2016 (Fifteen Months)

Year ended December 31, 2014 (Twelve months)

Gross Sales, Service Income and other Income

7,804

10,106

Profit /(Loss) before Depreciation, Interest and Tax but after Prior Period Items

(700)

(702)

Depreciation / Amortization

1,061

1,809

Interest and Finance Charges

2,744

2,123

Profit / (Loss) before Exceptional Items and Tax

(4,505)

(4,634)

Exceptional Gain / (Loss)

(2,532)

(2,449)

Profit / (Loss) before Tax

(7,037)

(7,083)

Tax Expenses

-

-

Profit / (Loss) after Tax

(7,037)

(7,083)

Profit / (Loss) Carried Forward from Last Year

(16,457)

(9,374)

Depreciation adjustment against reserves

(111)

-

Profit/(Loss) Carried forward to Balance Sheet

(23,605)

(16,457)

Operations

Gross Revenues for fifteen months period ended March 31, 2016 stood at INR 7,804 million, Loss before depreciation, interest, exceptional items and tax stood at INR (700) million.

Market Environment and Outlook

Storage Media Business

During the financial period ended March 31, 2016, despite liquidity challenges, volumes and margins were on the path of restoration. Company''s subsidiary has entered into an exclusive distribution agreement with Verbatim (a long term customer of the Company) for sale of Verbatim branded Storage Media and LED products in India. While Average Selling Prices (ASPs) were impacted as compared to the previous year with changing product mix, inputs costs have remained stable. However the Company has been consistently working on improving cost efficiencies across the entire value chain.

Regulatory action by the Government of India against dumping of USB drives by players from select countries has allowed Moser Baer the opportunity to recover its market share in this segment through sale of the Moser Baer and other OEM branded products.

Moser Baer continues to remain one of the leading players in the global Storage Media industry both in terms of low cost mass manufacturing and in offering a wide range of high quality products. Our strong focus on quality and service has resulted in continued business alliances with leading OEMs across the world.

During the period, the Company undertook several steps aimed at lowering the overheads and aligning resources with current levels of operations. Further consolidation in Greater Noida facility is being executed which will result in lower power consumption and lower fixed overheads. The company continued to right size its employee base to current level of operations. These steps are expected to positively impact the company''s operations in the near to medium term.

We are aggressively pursuing new geographies like Africa and several countries in Latin America for incremental markets and customer acquisition and expect our Non- OEM market share to increase in the coming quarters.

In the medium term, the Optical Media industry is expected to continue to witness overall volume decline globally. The trend is more accelerated in the developed economies. However, emerging markets such as Africa, Eastern Europe and parts of Asia would continue to remain stable with pockets of growth in DVD and Blu-ray formats.

In the near future, the Solid State Media segment will continue to show healthy growth, given the market demand, regulatory action against predatory imports, strong relationships with OEM customers and strong brand equity of Moser Baer in India and is limited only by liquidity constraints.

The Company continues to focus on product innovation, upholding of its high quality standards, increase in its cost competitiveness and on widening of its distribution network.

Solid State Lighting

The company had chosen the Solid State Lighting business some time ago as a strategic area to build a potential new growth business by leveraging its existing manufacturing facilities and capabilities. During the period, the Company moved towards establishing itself as a key player in the Indian LED market, with a large number of B2B clients and an initial foray into the B2C segment.

We have commenced production of LED lighting products in our manufacturing facility (with imported LED Chips and some other components), leveraging our existing asset and skill base. We will however continue to use outsourced contract manufacturers also to manufacture select LED products designed by Moser Baer as per our quality specifications.

The company is scaling up operations in LED lighting space by leveraging its brand strength and expanding its distribution network nationally

Photo Voltaic Business

In the Solar PV segment, the global solar industry witnessed installations of 50.6 GW during 2015 while the home market added more than 2 GW capacity in 2015 to reach a cumulative capacity of 5.6 GW by the end of the year.

To take advantage of opportunity due to the Domestic Content Regulations in the solar sector, Moser Baer''s PV subsidiary had initially re-started its cell manufacturing operations in the early part of 2015 but was hampered by employee unrest and volatility of DCR demand thereafter.

During the period, liquidity pressures continued to persist and have been critically impacting our ability to enhance manufacturing operations and capacity utilization levels. However, the positive global macro sector environment along with a high potential domestic market provides opportunity to us to benefit from these segments, given that we are the largest integrated PV manufacturer in India, and we begin the FY 2016-17 period with a 45 MW order under implementation.

Dividend

Considering the operating performance for the financial period ended on March 31, 2016, your Directors do not recommend any dividend for the period.

Reserves

During the period, considering the operating performance of the Company, the Company has not transferred any amount in General Reserve.

Fixed deposits

During the period under review, your Company has not accepted any deposit under Section 73 of the Companies Act, 2013 and rules made there under.

Share Capital

The Company has allotted 9,879 Equity Shares of Rs. 10/- each pursuant to conversion request received from a Foreign Currency Convertible Bond holder during the period.

Further, pursuant to a scheme of Corporate Debt Restructuring, notified by Reserve Bank of India, the Company has issued and allotted 13,450,000 equity shares to Promoter Group, which was approved by a Special Resolution passed by the shareholders through Postal Ballot.

These shares have been listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited. Financial Year

The Company closed its financial year on March 31, 2016 for a period of 15 months to align with the requirements of Companies Act, 2013. The next financial year i.e. 2016-17 shall be for a period of 12 months.

Consolidated Financial Statement

Your Company is also presenting the audited consolidated financial statements prepared in accordance with the Accounting Standard 21 issued by the Institute of Chartered Accountants of India. Further, pursuant to the provisions of Section 129(3) read with Rule 5 of Companies (Accounts) Rules, 2014, statement containing salient features of the financial statements of subsidiary companies is disclosed separately and forms part of the annual report

Board of Directors and its meetings

During the period under review, Mr. Samrish Bhanja, has been appointed as Additional Director on the Board with effect from June 22, 2015. Further, M/s. Electra Parters Mauritus Limited withdrew its nominee Mr. John Levack from the Board of Directors with effect from November 09, 2015. He was associated with the Company since 2003. The Board places on record its appreciation for the contribution during his tenure as Director of the Company.

In terms of the provisions of Section 152 of the Companies Act, 2013, Mrs. Nita Puri, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

During the period under review, the Company conducted eight Board Meetings i.e. February 26, 2015, May 11, 2015, June

2, 2015, August 13, 2015, September 24, 2015, November 11, 2015, January 7, 2016 and February 11, 2016.

The details of Directors being recommended for appointment or re-appointment pursuant to Regulation 33(3) of the Listing Regulations are contained in the accompanying Notice of the ensuing Annual General Meeting.

All new independent directors inducted into the Board are provided with various materials on the Company and updated from time to time. They are also issued formal letter of appointment outlining his/her role, function, duties and responsibilities.

The Company has constituted various committees of the Board of Directors, details whereof are given in Corporate Governance Report.

Appointment and declaration of Independent Directors

The Company has received a declaration of independence from all Independent Directors under Section 149(6) of Companies Act, 2013 and rules made there under. This is also in compliance of regulation 25(2) of SEBI (LODR) Regulation, 2015.

Key Managerial Personnel

Mr. Yogesh Bahadur Mathur, Group President - Moser Baer & Group Chief Financial Officer of Moser Baer Group was nominated as Chief Financial Officer of the Company under the Companies Act, 2013 during the period under review.

Subsidiary and Associate Companies

As on March 31, 2016, the Company had 21 subsidiaries including indirect subsidiaries. All these companies are 100% beneficially owned by Moser Baer India Limited. The Company regularly monitors the performance of such companies. Details of subsidiaries including subsidiaries liquidated/closed is given in one of the Annexure to this report.

The Company shall make available the annual accounts of the subsidiary companies to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered office of the Company and respective subsidiary companies. Further, the annual accounts of the subsidiaries are also available on the website of the Company viz. www.moserbaer.com. The consolidated financial statements presented by the Company include the financial results of its subsidiary companies.

Policy on director''s appointment and remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its function of governance and management. As on March 31, 2016, the Board consist of five members, two of whom are executive/whole-time directors, remaining three are independent directors.

The policy of the Company on director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is appended as Annexure 1 to the Board''s report. We affirm that the remuneration paid to the director is as per the terms laid out in the nomination and remuneration policy of the Company.

Circulation of Audited Financial Statements

In terms of the provisions of section 136 of the Companies Act, 2013, the Board of Directors have decided to circulate the abridged Annual Report containing salient features of the Balance Sheet and statement of Profit & Loss to the shareholders for the financial period ended on 31st March, 2016. Full version of the Annual Report will be available on Company''s website www.moserbaer.com and will also be made available to shareholders upon request.

As in the previous year, this financial period too, the Company is publishing statutory information in the print version of the annual report. However, we shall be sending full Annual Report through email to those shareholders who have registered their email id with their Depository Participant/Company''s Registrar & Share Transfer Agent. In case a shareholder wishes to receive a printed copy, he/she may please send a request to the company, which will send the Annual Report to the shareholder. For members who have not provided their email ids, physical copy is being sent in permitted mode.

Auditors & Auditor''s Report

At the Annual General Meeting of the Company held on 30th June, 2015, M/s. Walker, Chandiok & Co. LLP (Firm Regn. No. 001076N/N500013), chartered accountants, statutory auditors of the Company, were appointed to hold office until the conclusion of 37th Annual General Meeting. Further, as per Section 139 of the Companies Act, 2013, their appointment shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Walker, Chandiok & Co. LLP is placed for ratification by the shareholders.

The Audit Committee at its meeting held on August 11, 2016 has recommended to ratify the appointment of M/s. Walker, Chandiok & Co. LLP as statutory auditors of the Company.

Auditors'' report is self-explanatory and therefore does not require further comments and explanation.

There was no matter to be reported by the Auditors/Board of Directors as per requirements of Section 143(12) or Section 134(3)(ca) of the Companies Act, 2013.

Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- We 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 as on March 31, 2016 and of the loss for the period ended on that date;

- We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- We have prepared the annual accounts on a going concern basis.

- We have laid down internal financial controls to be followed by the company and that such financial controls are adequate and were operating effectively.

- We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Stock Option Plan

Your Company was having Stock Option Plan(s) for its Non-Executive Directors i.e. Directors Stock Option Plan - 2005 ("DSOP-2005") and for its employees i.e. Employees Stock Option Plan-2004 and Stock options plan 2009 ("ESOP - 2009"). During the last annual general Meeting, the Shareholders approved termination of these plans. All the outstanding Stock Options vested and in force at the beginning of the Financial Period were cancelled or surrendered and no options were exercised during the period.

The Shareholders further approved in the last annual General Meeting of the Company - Stock Option Plan 2015 for employees of the Company and its subsidiaries.

During the period under review, the Nomination and Remuneration Committee of the Board of Directors has not granted any new options to employees of the Company under any of the above Schemes.

Restructuring of Outstanding Foreign Currency Convertible Bonds (FCCB)

Your Company had issued US$ 75mn Zero Coupon Tranche A Convertible Bonds and US$ 75mn Zero Coupon Tranche B Convertible Bonds (the "Bonds") in June 2007 with a tenure of 5 years. Since then, your Company bought back outstanding Bonds with a face value amounting to US$ 61.5mn. The conversion price of these Bonds has been significantly higher than the market price of the Equity Shares of the Company at the relevant times and the Bonds were not converted into equity shares. The Company''s foreign currency convertible bonds (FCCBs) were due for redemption on 21 June 2012. During the period Jan''15-Mar''16, FCCBs of the face value of $0.1mn were converted into equity shares as per the terms of the FCCBs.

The financial statements for the period ending March 31, 2016 reflect outstanding FCCBs at their face value of $ 88.4 mn (equivalent to Rs 5,857 million), along with premium on redemption. As at 31 March 2016, such accrual for premium on FCCB aggregates Rs 4,983.9 million. The company is in the process of negotiation with the bondholders to re-structure the terms of these bonds; these negotiations have progressed and the Company has applied to the RBI, lender banks and CDR-EG for requisite approvals. Lender support continues to be crucial/ on critical path to successful completion of the restructuring and the Company is in active discussion with the lenders on this issue

Debt Restructuring

The Corporate Debt Restructuring (CDR) schemes of the Company, as well as of its subsidiary PV companies were earlier approved in FY 2012-13 and were under implementation. A debt of INR 23,700 million for the company, INR 8,650 million for Helios Photo Voltaic Ltd. and of INR 9,560 million for Moser Baer Solar Ltd. was conclusively restructured, additional funds provided and interest funded. After execution of the Master Restructuring Agreement and other key documentation, the respective schemes have been under implementation.

The Company however continued to face severe liquidity issues primarily resulting from non-release of sanctioned working capital limits and refunds due to the Company. As a result, the Company has been unable to comply with repayment terms of its borrowing arrangement with secured lenders as agreed in the CDR package approved in year ended March 31, 2013. Meanwhile, the Company had approached the lender consortium for a revised debt restructuring plan, which included deferment of debt and interest repayment, disposal of surplus assets and infusion of fresh capital by the promoters. The banks instituted a TEV study which was conducted by a reputed professional agency appointed by bank and which has since submitted its report to the lenders. During the period, some of the Banks have issued notices for Loan Recall and Wilful Default to which the Company has duly responded to under legal advice. None of these notices have impacted the operations of the Company.

In a recent meeting, the lenders have indicated their intention to exit from the CDR and initiate legal proceedings against the company subject to approval of their competent authorities. Some lender banks have submitted approval from their competent authorities to exit from CDR. However, in the absence of requisite mandate, no decision was taken and the matter of exit from CDR was deferred to a subsequent CDR EG meeting. Meanwhile, the lender banks have allowed the Company to continue to operate through TRA with 6% tagging progressively to be increased to 9% by September 2016. The Company continues to engage with management of banks towards resolution of the debt.

In March 2016, one of the lender banks assigned its outstanding dues in favor of an Asset Reconstruction Company.

The company has been operating at suboptimal levels due to working capital constraints, resulting in adverse impact on cash flow from operations. With progressive restoration of OEM Optical Media business, expected generation of funds through sale of surplus assets and promoter contribution, accompanied by satisfactory resolution of debt from banks, the company expects to achieve better utilization of its manufacturing facilities and consequently, generate positive cash flow from operations.

PV Subsidiaries

During FY 2012-13, Secured Lenders (Banks) had approved the Corporate Debt Restructuring of Helios Photovoltaic Limited ("HPVL"), one of the subsidiary companies. The CDR was not fully implemented and HPVL was unable to service the repayments/ payments of loan/ interest in accordance with CDR which resulted in HPVL''s debt becoming a non-performing asset with all the banks.

Consequently, the Monitoring Institution made a recommendation to the CDR Empowered Group along with approval of majority secured lenders to seek exit of HPVL''s account from CDR and the CDR EG approved this exit on 28th October

2015. The management continues to engage with lender banks for resolution of the debt and has further submitted a plan for revival of the company.

In respect of Moser Baer Solar Limited (MBSL), another subsidiary company, implementation of the CDR Scheme was impacted by factors such as delay in receipt of SIPS Capital Subsidy from the Govt and non release of working capital limits and refunds by lenders. This resulted in severe liquidity crunch due to which, it was unable to comply with repayment terms of its borrowing arrangements with secured lenders as agreed in the CDR package approved in FY 2012-13. MBSL accordingly approached these lenders for a revised debt restructuring plan. The Monitoring Institution of MBSL instituted a TEV study which was conducted by a reputed professional agency which has submitted its report to the lenders. The TEV report is under consideration of the lender Banks.

Some of the lender banks have also issued letters/ notices for Loan Recall, Willful Default and under SARFAESI Act against the PV subsidiaries to which the subsidiaries have suitably responded to under legal advice. None of these notices however have impacted the operations of the PV Subsidiaries

Fortunately, the domestic industry environment in Solar has turned extremely positive in the recent past following the thrust on ''Make in India'' and the announcement of a slew of initiatives supporting solar manufacturing. These companies have been operating at sub optimal levels despite the improved market environment, due to working capital constraints. Release of funds under the Special Incentive Package Scheme (SIPS), continuation of Govt measures supporting manufacturing, additional promoters'' contribution and reduction in redundant fixed costs are expected to provide improved liquidity, better utilization of its manufacturing facilities and positive operating cash flows.

The Company continues to engage in constructive discussions with lenders for the satisfactory resolution of the debt of the company and its solar subsidiaries.

BIFR Registration

Pursuant to the erosion of its net worth, the company had filed a reference and was registered before The Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act (SICA) in September 2014. Further, HPVL and MBSL, the PV subsidiaries were also registered with BIFR in September 2014 and June 2015 respectively. The proceedings are currently under progress before BIFR in respect of the Company and the PV subsidiaries.

Particulars of Loans, guarantees or investments

Details of loans, guarantees or investments have been disclosed in the financial statements. The Company has complied with the provisions of Section 186 of the Companies Act, 2013 in relation to loan, investments and guarantees given by the Company. The loans and guarantees etc. were utilized by the recipients for the business purposes.

Human Resources and Industrial Relations

As Moser Baer continued to witness financial constraints and internal challenges that impacted its performance, HR is being stretched to every possible way to make difficult decisions to remain viable and competitive within resource constraints.

In an era where business must do more with less, it is critical that our workforce is performing at its highest level, now more than ever. HR has been constantly working on consolidation measures, cost containment, restructuring of operations, aligning priorities and at the same time maintaining stellar performance level.

With effective and transparent communication with employees and well-structured HR strategies, the organization peacefully managed to consolidate Manpower in terms of business requirement. Moser Baer group closed the period ending March 31, 2016 with 3,021 employees as compared to 3,441 employees at the end of last financial year.

On part of Industrial Relations at the manufacturing locations, we have been largely peaceful since the day we had reached three years wage settlement with workers in April 2015. Although, there have been some IR disturbances in vicinity industrial area, the HR is expectedly playing vital role in maintaining harmonious relations with employees and is watchful for possible preventive measures.

Pursuant to the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 read with Rules there under, it is reported that your Company has not received any complaint of sexual harassment during the period under review.

Particulars of employees

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in the Annexure 2 to this report.

Further any member interested in information as per Rule 5.2 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, may write to the Company Secretary at the Registered Office. The said information is also available for inspection at the Registered Office during working hours up to the date of the Annual General Meeting. Annual Report excluding the aforesaid information is being sent to all shareholders of the Company.

Risk Management

The Board of Directors is overall responsible for identifying, evaluating and managing all significant risks faced by the Company. The Board formed Risk Management Committee which establishes the guiding principles by which key risks are managed across the organization.

Vigil Mechanism

The Company has in place a Vigil Mechanism Policy, to support the Code of Business Ethics in compliance with the requirements of the Companies Act, 2013 and Listing Regulations. This policy documents the Company''s commitment to maintain an open work environment in which employees, consultants and contractors are able to report instances of unethical or undesirable conduct, actual or suspected fraud or any violation of Company''s Code of Business Ethics at a significantly senior level without fear of intimidation or retaliation.

The Vigil Mechanism structure involves the Company Secretary, Head of SPAD and Chairman of Audit Committee. They are authorized by the Board of Directors of the Company for the purpose of receiving all complaints under the policy and in ensuring appropriate action. The concern can be reported by sending an e-mail message at the dedicated address viz. firstinfor@moserbaer.in.

Individuals can raise their concerns directly to the Company Secretary and for any serious matters to the chairman of the Audit Committee of the Company. There is proper framework to investigate allegations and to deal effectively. All the Company personnel have access to the Audit Committee in consultation with the Company Secretary.

The details of establishment of vigil mechanism for Directors & employees to report genuine concerns are available at the website of the Company.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134 of the Companies Act, 2013 and the rules made there under is given as per Annexure 3 and forms part of this Report.

Reconciliation of Share Capital Audit

As directed by Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit is being carried out at the specified periodicity by M/s. SGS Associates, Company Secretaries, Secretarial Auditors of the Company.

Secretarial Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s. SGS Associates, Company Secretaries in practice, to undertake the Secretarial Audit of the Company for the Financial Period 2015-16. The report of the Secretarial Audit is annexed to this report as Annexure 4. Secretarial Auditors'' report is self-explanatory and therefore does not require further comments and explanation.

Formal Annual Evaluation

The company has devised a framework for performance evaluation of independent Directors, Board, Committees and other Directors. The framework includes various parameters of evaluation such as information flows, decision making, Board dynamics, Company performance etc. SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 requires that the Board shall monitor and review the Board evaluation framework. As per the requirements of the Companies Act, 2013 and Schedule IV thereof a formal annual evaluation was made by the Board of its own performance and that of its committees and individual directors.

Corporate governance

Your Company strives to ensure that best corporate governance practices are identified, adopted and consistently followed. Your Company believes that good governance is the basis for sustainable growth of the business and for enhancement of stakeholder value.

A separate section on Corporate Governance forming a part of the Directors'' Report and the certificate from M/s. SGS Associates, Company Secretaries, Secretarial Auditors of the Company confirming compliance of conditions on Corporate Governance as stipulated in Schedule II of SEBI (LODR) Regulations, 2015 is included in this Report. The Managing Director and Group Chief Financial Officer of the Company have issued necessary certificate to the Board in terms of Regulation 17(8) of SEBI (LODR) Regulations, 2015 with Stock Exchanges for the financial period ended on March 31, 2016. However, in terms of the provision of Section 136 (1) of the Companies Act, 2013, the abridged Annual Report will be sent to the members of the Company excluding this report.

Related Party Transactions

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed form AOC-2 is appended as Annexure 5 to the Board''s Report

Significant and Material Orders and Material changes

No such significant and material orders passed by the regulators or courts or tribunal impacting the going concern status and company''s operations in future.

There are no material changes and commitments which affect the financial position of the company, which occurred between the end of the financial period and the date of this report.

Internal Financial Controls

The Company maintains adequate systems of internal control commensurate with its size, nature of business and complexity of operations. Over the years, formal and independent exercises for evaluation of internal controls and initiatives for further strengthening them have resulted in a robust framework for Internal Controls. These systems provide a reasonable assurance in respect of maintaining financial and operational information, monitoring of operations, compliance with applicable statutes and corporate policies and safeguarding of the assets of the company from unauthorized use or losses.

Further details are given in Management''s Discussion and Analysis Report.

Management Discussion and Analysis Report

Management''s Discussion and Analysis Report (MD&A) for the period under review, as stipulated under Regulation 34(3) and Schedule V of the Listing Regulations , is presented in a separate section forming part of this Report.

Extract of the Annual Return

The extract of the Annual Return in Form No. MGT - 9 is appended as Annexure 6 and is a part of the Board''s Report. Listing at Stock Exchanges

The Shares of the Company continue to be listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The annual listing fees for the year 2016-17 have been paid to the Stock Exchanges.

Conclusion

Your Company continues to maintain its leadership position in its various businesses by providing innovative differentiated products and services in high growth technology manufacturing markets to its customers globally.

Your Company has always focused on creating new values to increase customer and stakeholder delight. We continue to meet leading international quality benchmarks through our strong focus on Internal Quality Management processes. This, indeed, is how your Directors propose to drive the business endeavors, as we face the future with optimism and confidence.

Your Directors place on record their appreciation for the continued co-operation and assistance received from investors, customers, employees, business associates, bankers, vendors as well as regulatory and government authorities.

For and on behalf of the Board of Directors

Moser Baer India Limited

Place: New Delhi Mr. Sanjay Jain Mr. Vineet Sharma

Date: August 11, 2016 Director Director


Dec 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting their 32ndAnnual Report on the business and operations of the Company together with the Audited Financial Statement for the financial year ended 31st December, 2014.

Financial Results (Standalone Operations)

Particulars (Rupees in Million) Year ended Period ended December 31, 2014 December 31, 2013 (Twelve Months) (Nine months)

Gross Sales, Service Income and other Income 10,106 10,058

Profit /(Loss) before Depreciation, Interest and Tax but after Prior Period Items (702) 706

Depreciation / Amortization 1,809 1,543

Interest and Finance Charges 2,123 1,575

Profit / (Loss) before Exceptional Items and Tax (4,634) (2,412)

Exceptional Gain / (Loss) (2,449) (2,055)

Profit / (Loss) before Tax (7,083) (4,467) Tax Expenses

Profit / (Loss) after Tax (7,083) (4,467)

Profit / (Loss) Carried Forward from Last Year (9,374) (4,907)

Profit/(Loss) Carried to Balance Sheet (16,457) (9,374)

Operations

Total Revenues for financial year ended 31stDecember 2014 stood at INR 10,106 million, profit/(Loss) before depreciation, interest, exceptional items and tax stood at INR (702) million.

Market environment and outlook

Storage Media Business

During the financial year ended 31st December, 2014, demand for Optical Media products declined in the developed markets, while the Asia Pacific, Africa, Middle East and Latin America regions continued to be relatively stable demand centers. The supply rationalization in the Optical Media industry continued during the period, however, supply demand mismatch is still not resolved. It is expected that more manufacturers will exit and curtail manufacturing capacities in the near future.

Demand for new generation Optical Media products like Blu-ray in mature markets such as Japan, USA and Europe has been stable. Emerging Markets on the other hand continued to show higher preference for DVDs and also witnessed marginal increase in demand for Blu-ray products.

In India, the Storage Media business, which includes optical and Solid State Media segment (Flash Drives, SD and Micro SD cards) has witnessed growth and continues to witness an increase in popularity globally due to ease of use and declining per unit costs. Demand is shifting to higher memory capacity.

Moser Baer continues to remain one of the leading players in the global Storage Media industry both in terms of low cost mass manufacturing and in offering a wide range of high quality products. Our strong focus on quality and service has resulted in continued business alliances with leading OEMs across the world. The company supplies products in over 95 countries globally.

During the year, the Company undertook several steps aimed at lowering the overheads and aligning resources with current levels of operations. After the company consolidated all its manufacturing facilities to cut down on overheads and to extract supply chain synergies last year, this year the focus has been to ramp-up capacity utilization at Greater Noida. Further consolidation in Greater Noida facility is being executed which will result in lower power consumption and lower fixed overheads. The company continued to right size its employee base to current level of operations. These steps are expected to positively impact the company''s operations in the near to medium term.

We are aggressively pursuing new geographies like Africa and several countries in Latin America for incremental markets and customer acquisition and expect our Non- OEM market share to increase in the coming quarters.

In the medium term, the Optical Media industry within the developed markets is expected to witness decline in demand for the first generation products like CDs/DVDs. The company''s strategy is to gain higher market share to offset decline in demand. In this regard, significant progress has been made in Europe, USA and Mexico markets.

Operations within our Solid State Media (SSM) segment were affected due to financial constraints during the year. However, the demand for company''s products remains robust and we expect an upswing in the coming years.

In the near future, the Solid State Media segment is expected to be a key growth driver for the business on account of rapid penetration of personal computing devices in the developing markets and robust increase in demand for smart phones globally.

The Company continues to focus on product innovation, upholding of its high quality standards, increase in its cost competitiveness and on widening of its distribution network.

Solid State Lighting

The company had chosen the Solid State Lighting business some time ago as a strategic area to build a potential new growth business by leveraging its existing manufacturing facilities and capabilities. Following extensive pilot trial work and successful penetration of the professional segment in LED lighting, the company has finalized and is now pursuing the implementation of strategic plans to ramp up business in the LED lighting segment with the accompanying scaling up of distribution channels nationally. This involves both B to B and B to G business models, using both direct and channel partner sales and distribution and also includes plans to leverage the company''s brand strength in technology based products.

The company has successfully entered the professional segment of the LED lighting industry with a marquee list of customers/installation across segments and established Moser Baer as a competitive player in this product category. We have commenced production of LED lighting products in our manufacturing facility, leveraging our existing asset and skill base (with imported LED Chips and some other components). The company recently commenced implementation of plans to scale up operations in LED lighting products, leverage its brand strength and expand its distribution network nationally.

Photo Voltaic Business

In the solar PV segment, during 2014 the global industry grew at a slower pace than originally envisaged. The estimates for 2014 installations range from 40-45 GW with China, Japan and USA leading the space.

Moreover, 2014 was a landmark year for the solar sector in India, with the revision of the solar target to 100 GW from 20 GW by 2022. However, the market is still to take off. During CY 2014, the Indian market achived 883MW of solar PV installations compared to 1,004 MW in CY 2013 (according to Mercom Capital). Given the government''s focus on renewable energy and ''Make in India'' initiative, the medium to long term outlook of the Indian market is very strong. However, it is important that the government makes timely and favourable policy announcements for sustainable growth in the sector and continues to support domestic manufacturing.

During the year, liquidity pressures continued to persist and have been critically impacting our ability to enhance manufacturing operations and capacity utilization levels. However, the positive global macro environment along with a high potential domestic market provides opportunity to us to benefit from these segments, given that we are the largest integrated PV manufacturer in India. We are currently focusing on high margin markets such as Japan and are poised to tap the emerging opportunities in the domestic and other export markets. Moser Baer commenced operations of its upgraded solar PV crystalline silicon Cell line in January 2015 to cater to the Domestic Content Requirement market.

Moser Baer''s PV Business continues to maintain its leadership position in the Indian solar EPC market with over 310 MW of projects installed till date. With an 11.5% market share on cumulative basis, Moser Baer Solar continued to be adjudged as India''s largest solar EPC player for the second consecutive year by Bridge to India

Dividend

Considering the operating performance for the financial year ended on 31st December, 2014, your Directors do not recommend any dividend for the year.

Reserves

During the year, considering the operating performance of the Company, the Company has not transferred any amount in General Reserve.

Fixed deposits

During the year under review, your Company has not accepted any deposit under Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975/Section 73 of the Companies Act, 2013 and rules made there under.

Share Capital

The Company has issued and allotted Equity Shares pursuant to Corporate Debt Restructuring on preferential basis to the promoter/promoter group as per following details:

e$ 10,000,000 Equity Shares of Rs 10 each on 28th February,2014.

x 13,450,000 Equity Shares of Rs. 10 each on 31st March,2015

These shares have been/are being listed at National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Financial Year

The Company closed its financial year on 31st December, 2014 for a period of 12 months to facilitate restructuring of FCCBs. The next financial year i.e. 2015-16 shall commence on 1st January, 2015 and end on 31st March, 2016 for a period of 15 months to align with the requirements of Companies Act, 2013. As the Financial year of the company commenced before 1st April, 2014, as required, the disclosures have been made in compliance with provisions of Companies Act, 1956. However, the reference to relevant provisions in the report have either been made to Companies Act, 1956 or to Companies Act, 2013.

Board of Directors

During the year under review, Mr. Bernhard Gallus, the Independent Non-Executive Director of the Company, passed away on August 10, 2014 after a brief illness. He was associated with the Company since 1987. Mr. Franck E. Dangeard ceased to be Director w.e.f. April 01, 2014 and EXIM Bank withdrew its nominee director Mr. K Ajit Kumar w.e.f. November 28, 2014. The Board places on record its appreciation for their contribution during their tenure as Directors of the Company.

In terms of the provisions of Section 152 of the Companies Act, 2013, Mr. Deepak Puri, Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Further, Mr. Deepak Puri has been re-appointed as a Managing Director for a further period of 3 years w.e.f. September 01, 2014 and Mrs. Nita Puri re-appointed as Whole Time Director for a further period of 3 years w.e.f. December 01, 2014.

The Company has received a declaration of independence from Mr. Sanjay Jain and Mr. Vineet Sharma, Independent Directors under Section 149(6) of Companies Act, 2013 and rules made there under. This is also in compliance of Clause 49 of the Listing Agreement.

During the year under review, the Company conducted six Board Meetings i.e. February 28, 2014, May 14, 2014, May 22, 2014, August 14, 2014, September 24, 2014 and November 13, 2014.

The details of Directors being recommended for appointment or re-appointment pursuant to Clause 49 of the Listing Agreement are contained in the accompanying Notice of the ensuing Annual General Meeting.

Subsidiary Companies

As per section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Balance Sheet and Statement of Profit & loss of its subsidiaries. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in Annual Report. Accordingly, the Annual Report for the financial year ended on December 31, 2014 does not contain the financial statements of our subsidiaries. The annual audited accounts and related information of our subsidiaries, where applicable, will be made available upon request.

The annual accounts of the subsidiary companies will also be kept for inspection by any member of the company at its Registered Office and Corporate / Head Office located at 43B, Okhla Industrial Estate, Phase III, New Delhi - 110 020. The same will also be published on our website, www.moserbaer.com.

Abridged Financial Statements

In terms of the provisions of section 136 of the Companies Act, 2013, the Board of Directors have decided to circulate the abridged Annual Report containing salient features of the Balance Sheet and statement of Profit & Loss to the shareholders for the financial year ended on 31st December,2014. Full version of the Annual Report will be available on Company''s website www.moserbaer.com and will also be made available to shareholders upon request.

In support of the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send the Annual Report through email to those shareholders who have registered their email id with their Depository Participant/Company''s Registrar & Share Transfer Agent. In case a shareholder wishes to receive a printed copy, he/she may please send a request to the company, which will send the Annual Report to the shareholder.

Auditors

Your Company''s Statutory Auditors, M/s. Walker, Chandiok & Co. LLP (formerly Walker Chandiok & Co.) (Firm Regn.No. 001076N/N500013), Chartered Accountants, holds office until the conclusion of ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 139 of the Companies Act, 2013

Auditors'' Report

The observations made in the Auditors'' Report are self- explanatory and therefore, do not call for any further comments. However attention is drawn to the "Emphasis of Matter" stated in para 7 & 8 of the Auditors'' Report.

Directors'' Responsibility Statement

As required under Section 217(2AA) of the Companies Act 1956, your Directors state that:

1) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2) We 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 as on 31st December,2014 and of the loss for the year ended on that date;

3) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4) We have prepared the annual accounts on a going concern basis.

Related Party Transactions

All contracts/arrangements/transactions entered into by the Company during the financial year with the related parties were in the ordinary course of business and on an arm''s length basis. The policy on Related Party Transactions as approved by the Board is available on the Company''s website : www.moserbaer.com Related Party Transactions have been circulated as note no. 39/41 to the Standalone /Consolidated financial statements respectively.

Stock Option Plan

Your Company had introduced a Stock Option Plan for its Non-Executive Directors i.e. Directors Stock Option Plan - 2005 ("DSOP-2005") and for its employees i.e. Employees stock Option Plan-2004.

The company has further introduced Stock options plan for its employees ("ESOP - 2009") by the resolution passed in the meeting of the Board of Directors on the 30th July, 2009 and subsequently, approved by the shareholders of the company in their Annual General Meeting held on 8th day of September 2009. The plan came into force on 29th day of January 2010, being the date of first offer of ESOPs to the employees under ESOP Plan 2009.

During the year under review, the Nomination and Remuneration Committee of the Board of Directors has not granted any new options to employees/directors of the Company under any of ESOP/DSOP Schemes. The particulars of options issued under the said Plan as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as Annexure A and forms part of this report.

The existing ESOP plan is under review pursuant to changes in regulatory provisions as well as prevailing market conditions and for achieving flexibility in implementation.

Restructuring of Outstanding Foreign Currency Convertible Bonds (FCCB)

Reasons for Non Redemption of FCCB

Your Company had issued US$ 75mn Zero Coupon Tranche A Convertible Bonds and US$ 75mn Zero Coupon Tranche B Convertible Bonds (the "Bonds") in June 2007 with a tenure of 5 years. Since then, your Company bought back outstanding Bonds with a face value amounting to US$ 61.5mn. The conversion price of these Bonds has been significantly higher than the market price of the Equity Shares of the Company at the relevant times and the Bonds were not converted into equity shares.

The Company''s foreign currency convertible bonds (FCCBs) were due for redemption on 21 June 2012. The financial statements for the year ending December 31, 2014 reflect outstanding FCCBs at their face value of $ 88.5 mn (equivalent to Rs 5,579 million), along with premium on redemption. As at 31 December 2014, such accrual for premium on FCCB aggregates Rs 3,879.4 million. The Company has received approval from RBI for extension of redemption date of bonds and is in the process of discussions with the bondholders to re-structure the terms of these bonds.

Pursuant to registration of the reference filed by the Company under SICA, the petition under section 434 of the Companies Act, 1956, filed by the trustee on behalf of certain bondholders with the Hon''ble High Court of Delhi, has been disposed off by the Hon''ble High Court of Delhi giving liberty to the petitioner to revive the petition upon termination of proceedings under SICA

Debt Restructuring

The Corporate Debt Restructuring (CDR)scheme of the Company as well as of its subsidiary PV companies were earlier approved in FY 2012-13 and were under implementation. A debt of INR 23,700 million for the company, INR 8,650 million for Helios Photo Voltaic Ltd. and of INR 9,560 million for Moser Baer Solar Ltd. was conclusively restructured, additional funds provided and interest funded.

After execution of the Master Restructuring Agreement and other key documentation, the respective schemes have been under implementation. The company has made significant progress on perfection of security and is also ensuring compliance with other CDR conditions.

The implementation of the Scheme however faced challenges with regard to the release of sanctioned working capital by select lenders; thereby resulting in adverse impact to other lenders apart from depriving the company of cash generation opportunities. Consequentially, the constrained liquidity forced the company to operate at sub optimal levels of production and sales despite having a healthy order book. After repeated discussion, lenders took cognisance of the issues being faced by the company and provided holding on operations. The fresh restructuring envisages generation of funds through sale of surplus assets, promoters contribution and reduction in redundant fixed costs, accompanied by deferment of debt and funding of interest. The company expects to achieve better utilisation of its manufacturing facilities as well as capture business opportunities in Solid State Lighting and Solid State Media to generate positive operating cash flows.

Furthermore, the respective consortium of banks of Helios Photo Voltaic Limited (HPVL) & Moser Baer Solar Limited (MBSL), the subsidiaries of the company, continue to implement their respective CDR Schemes in the current financial period. However, implementation of these Schemes was impacted by factors such as delays in receipt of Capital Subsidy from the Govt. against eligible investment in fixed assets, non assessment/non release of working capital limits by lenders and the slow pace of implementation relating to Domestic Content Regulations and other related measures. Also, certain banks initiated enforcement actions against the PV subsidiaries to which the subsidiaries have suitably responded. Furthermore, the PV subsidiaries have submitted revised debt restructuring proposals to their respective lenders consortiums and these are under discussion.

Fortunately, the domestic industry environment in Solar has turned extremely positive in the recent past following the thrust on ''Make in India'' and the announcement of a slew of initiatives supporting solar manufacturing. These companies have been operating at sub optimal levels despite the improved market environment, due to working capital constraints. Release of funds under the Special Incentive Package Scheme (SIPS), continuation of government measures supporting manufacturing, additional promoters'' contribution, sale of surplus assets and reduction in redundant fixed costs are expected to provide improved liquidity, better utilisation of its manufacturing facilities and positive operating cash flows.

The business plans of the company and its subsidiaries are subject to third party validation and the requisite approval process of banks. However, the management believes that with the implementation of measures envisaged for improvement in liquidity accompanied by the updated business plans and the improved operating environment it will be able to work amicably with its lenders for approval and implementation of its plans.

The outstanding foreign currency convertible bonds (FCCBs) aggregating to a principal value of US $ 88.5 million which matured in June 2012, were claimed by the trustee on behalf of bondholders. In 2012, the Trustee on behalf of these bondholders had filed a petition under section 434 of the Companies Act 1956, which was thereafter admitted. During the last financial year, this petition was disposed off by the Hon''ble High Court.

The company has received approval from the RBI for extension of redemption of these bonds and intends to continue discussion with bondholders to restructure these bonds.

Material and significant order passed by the Regulators or Tribunals or Courts impacting the going concern status and Company''s operation in future.

Pursuant to the erosion of its net worth as at the end of the previous financial period ended on 31st December 2013, the company had filed the requisite reference and was subsequently registered under the Sick Industrial Companies (Special Provisions) Act (SICA). Also as a result of erosion of their net worth, the solar subsidiaries (HPVL and MBSL) respectively filed the requisite references under SICA; registration was obtained in respect of HPVL while the reference in respect of MBSL is under consideration.

However, management continues to ensure that financial restructuring continues to be lead by constructive discussions with the respective CDR lenders.

Human Resources and Industrial Relations

The recent times have been witness to major challenges, both at the global and domestic levels. Industries across sectors are fighting recession to stay afloat. Realigning the focus of the company strategy during such periods of turbulence involved enormous efforts.

Employees are typically aware of the uncertainties and ambiguities that arise due to global business challenges. However, efficient communication measures and well-constructed HR strategies for driving employee commitments when anxieties are high, helped us to overcome challenges from time to time.

While the Industrial Relations environment at the manufacturing locations were largely peaceful and cordial during the year, the factory operations at the company and its PV subsidiaries were affected towards end February,2015 when the workers at the Greater Noida Plant went on unjustified stoppage of work with unreasonable demands relating to wage settlement. However, with the support of the concerned government and administrative authorities, the Company reached an amicable three year wage settlement with the workers and all operations were restored to normalcy by early April 2015. The settlement with workers has now added stability to the Company''s and its subsidiaries'' manufacturing operations.

Particulars of employees

As per Rule 13.5.2 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, any members interested in obtaining such information may write to the Company Secretary at the Registered Office. The said information is also available for inspection at the Registered Office during working hours up to the date of the Annual General Meeting. Annual Report excluding the aforesaid information is being sent to all shareholders of the Company.

Reconciliation of Share Capital Audit

As directed by Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit is being carried out at the specified periodicity by M/s. SGS Associates, Company Secretaries, the Secretarial Auditors of the Company.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134 of the Companies Act, 2013 and the rules made there under is given as per Annexure ''B'' and forms part of this Report.

Secretarial Report

As required under Section 204 of the Companies Act, 2013 and the rules made there under, the Company has appointed M/s. SGS Associates, Company Secretaries as the Secretarial Auditors of the Company.

The Secretarial report is annexed as Annexure - C and the observations made in the report are self-explanatory and therefore, do not call for any further comments.

Formal Annual Evaluation

The company has devised a policy for performance evaluation of independent Directors, Board, Committees and other Directors. Accordingly, the process of evaluation will be followed by the board for its own performance and that of its committees and individual directors periodically.

Corporate governance

Moser Baer believes that "Corporate Governance" refers to the processes and structure by which the business and affairs of the Company are directed and managed, in order to enhance long term shareholder value through enhancing corporate performance and accountability, whilst taking into account the interests of all stakeholders.

A separate section on Corporate Governance forming a part of the Directors'' Report and the certificate from M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors of the Company confirming compliance of conditions on Corporate Governance as stipulated in Clause 49 of the Listing Agreement is included in this Report. The Managing Director and Group Chief Financial Officer of the Company have issued necessary certificate to the Board in terms of Clause 49(IX) of Listing Agreement with Stock Exchanges for the financial year ended on December 31, 2014. However, in terms of the provision of Section 136 (1) of the Companies Act, 2013, the abridged Annual Report has been sent to the members of the Company excluding this report.

Management Discussion and Analysis Report

Management''s Discussion and Analysis Report (MD&A) for the year under review, as stipulated under Clause 49 of the Listing Agreement with stock exchanges in India, is presented in a separate section forming part of the Report.

Listing at Stock Exchanges

The Shares of the Company continue to be listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The annual listing fees for the year 2015-2016 has been paid to the Stock Exchanges.

Conclusion

Your Company continues to maintain its leadership position in its various businesses by providing innovative differentiated products and services in high growth technology manufacturing markets to its customers globally.

Your Company has always focused on creating new values to increase customer and stakeholder delight. We continue to meet leading international quality benchmarks through our strong focus on Internal Quality Management processes. This, indeed, is how your Directors propose to drive the business endeavors, as we face the future with optimism and confidence.

Your Directors place on record their appreciation for the continued co-operation and assistance received from investors, customers, employees, business associates, bankers, vendors as well as regulatory and government authorities.

For and on behalf of the Board of Directors Moser Baer India Limited

Place: New Delhi Deepak Puri Date: May 11, 2015 Chairman & Managing Director


Mar 31, 2012

Dear Shareholder,

The Directors take pleasure in presenting their 29th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2012.

Financial Results

(Rs. in Million)

Particulars Year ended Year ended March 31, 2012 March 31, 2011

Gross sales, service income and other income 21,283 19,111

Profit before depreciation, interest and tax but after prior period items 2,954 1,786

Depreciation / amortization 3,758 3,856

Interest and finance charges 2,390 1,903

Profit before exceptional items and tax (3,194) (3,973)

Exceptional gain - (34)

Profit before tax (3,194) (4,007)

Tax expenses - -

Profit after tax (3,194) (4,007)

Profit carried forward from last year - -

Profit available for appropriation (3,194) (4,007)

Appropriations:

Dividend (proposed) Nil Nil

Provision for tax on proposed dividend Nil Nil

Transfer to general reserve account (2,878) (4,007)

Operations

Revenue for Financial Year 2012 stood at Rs 21,283 million, profit before depreciation, interest, exceptional items and tax stood at Rs 2,954 million. During the year, operating margins recovered significantly following improvement in market equilibrium that led to better pricing and volumes of optical media products.

Market Development Market Environment and Outlook

Storage Media Business

The overall Optical Media Industry is witnessing shrinkage in the global demand. However supply rationalization and growing demand in emerging markets have resulted in improvement in the market environment leading to better overall volumes and pricing during the year.

During the financial year, the trend of increasing demand for new generation optical media products like Blu-ray in mature markets such as the US and Europe was reinforced with simultaneous softening of demand for the first generation products (CDs and DVDs). Given that the technology is new, the margins in the segment are higher. However, as this technology also approaches maturity, the margins are expected to stablize at lower levels.

Moser Baer continues to be in a leadership position in the storage media market both in terms of low cost mass manufacturing and in offering a wide range of high quality innovative products. Our unrelenting focus on quality and service has resulted in our continued business alliances with leading OEMs across the world. We supply products to over 90 countries globally. We continue to focus on exploring and developing new demand centers and Non OEM markets to diversify our revenue streams.

However, as a result of the difficult business conditions witnessed over the past 2-3 years, the company faced liquidity constraints during the period that affected its ability to optimally benefit from the improving market dynamics in the global storage media. In the medium term, the storage media market is expected to remain stable on the back of higher traction generated by the advanced formats such as Blu-ray discs in the developed markets of the US and Europe and stable demand for DVDs in emerging markets. As per Futuresource's forecasts global production of Blu-ray discs will increase to 500 million discs per year by 2014 driven by the emergence of new technologies such as Blu-ray 3D.

In the long term, the CD/DVD market is likely to witness a decline, resulting from shift in preference for advanced storage media products, leading to shrinkage in volumes in these product categories. However, the company is expected to maintain its leadership position in the global markets as some of the fringe players are expected to exit the market.

Solid State Media Segment is expected to be a key growth driver driven by increasing usage of computers/laptops and high penetration of mobile phones in India. As per Futuresource Consulting, global shipments of solid state media are likely to reach 937 million units in 2014 from 688 million units in 2010.

With the increased liquidity on account of extension of repayment period, post the completion of the debt restructuring process, the company is expected to benefit by way of increasing its capacity utilization and addressing the ongoing demand in the market.

Photo Voltaic Business

Global PV installations displayed remarkable growth during 2011-12 with 29.7 GW capacity installed during the year, representing a 75% y-o-y growth. However, in spite of the strong volume increase, the global PV industry remained challenged on account of huge over capacity created by Chinese manufacturers, resulting in significant price declines across the value chain.

On the domestic front, India emerged as a strong market with various projects shaping well under the National Solar Mission and State Level Policies. Moser Baer's Solar business made significant progress with about 110 MW of Solar EPC Projects executed during the year across technologies and regions. Another 40 MW of projects were executed during April-May 2012.

During the year, Moser Baer provided Project Management Services for the 30 MW plant in Gujarat (the largest solar project in Asia at the time of commissioning), which was commissioned in October 2011. In the immediate short term, capacity utilization levels during the year were significantly low, on account of dumping of panels at extremely low prices by Chinese and other players, similar to the situation faced by all domestic manufacturers.

Your directors are happy to share that Moser Baer has emerged as the only Solar Company in the world to be awarded the prestigious 5 Star rating by TOV Rheinland for quality management systems, for the third consecutive year in a row. The company continues to focus on innovation, efficiency improvement and cost competitiveness to offer high quality value added products and service delivery to our customers globally.

During 2011-12, impacted by the severe crisis in the global PV industry that affected manufacturers across regions, Moser Baer PV subsidiaries 'Moser Baer's Photo Voltaic Limited' and 'Moser Baer Solar Limited' decided to restructure their debt obligations aimed at optimizing their current resources and aligning their expected future cash flows with current debt obligations, and accordingly approached the CDR cell for restructuring of their debt obligations under the CDR mechanism.

Your Directors are currently working on our strategy to leverage our existing infrastructure and assets through upgrades/ partnerships and on device efficiency improvements.

Your Directors are confident of turnaround in our solar businesses on the back of our future business strategy, strong R&D capabilities, presence across the solar value chain, experience in the fast growing Indian PV market and broad geographical presence. Restructuring of our debt obligations under the CDR mechanism and policy support to stimulate PV manufacturing industry in India would further support our growth strategy.

Home Entertainment Business

In 2011, The Indian Media & Entertainment (M&E) Industry witnessed growth of 12% y-o-y to reach INR 728 billion on account of strong consumption in Tier 2 and Tier 3 cities, continued growth of regional media and rapidly increasing new media business.

Moser Baer's Entertainment business continues to dominate the home entertainment space with large number of titles in most Indian languages and a unique business model of providing high quality large variety content at reasonable prices to the Indian consumer. The company has created a wide distribution set-up aimed at making its entertainment offerings available across the country.

However, the wide availability of pirated content at low prices in target markets poses risks to the growth potential of the organized players in the Home Entertainment industry.

Moser Baer Entertainment Limited (MBEL) is planning to provide its content offerings for sale to the parent company (MBIL), for the latter to offer content loaded storage media products to end consumers. This would enable MBEL to access a stable revenue stream source at the same time providing MBIL access to a fast growing market.

In view of the current difficult business environment, the company has limited its investments in the 'Entertainment Business' in the near future. However, the company continues to look at strategic leverages owing to its significant presence in the market to enhance the value of its Home Entertainment business.

Subsidiary Companies

As per section 212 of the Companies Act, 1956, The company is required to attach the Directors' Report, Balance Sheet and Profit & loss Account of its subsidiaries. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in Annual Report. Accordingly, the Annual Report 2011-12 does not contain the financial statements of our subsidiaries. The annual audited accounts and related information of our subsidiaries, where applicable, will be made available upon request.

The annual accounts of the subsidiary companies will also be kept for inspection by any member of the company at its Registered Office and Corporate / Head Office located at 43B, Okhla Industrial Estate, Phase III, New Delhi - 110 020. The same will also be published on our website www.moserbaer.com

Abridged Financial Statements

In terms of the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Board of Directors have decided to circulate the abridged annual report containing salient features of the balance sheet and statement of profit & loss to the shareholders for the financial year 2011-12. The full version of the annual report will be available on the Company's website www.moserbaer.com and will also be made available to investors upon request.

In support of the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send the annual report through email to those shareholders who have registered their email id with their depository participant/ Company's registrar & share transfer agent. In case a shareholder wishes to receive a printed copy, he/she may please send a request to the company, which will send the annual report to the shareholder.

Dividend

With regard to the operating performance for the year 2011-12, your directors do not recommended any dividend for the year. Directors

Mr. Vinod K Bakshi, was co-opted as Additional Director with effect from 17th October, 2011 to hold the office up to the date of the ensuing Annual General Meeting in terms of the provisions of Section 260 of the Companies Act, 1956. The Company has received a notice under Section 257 of the Companies Act, 1956, proposing the candidature of Mr. Vinod K Bakshi as Director of the Company.

In terms of the provisions of Section 255 and 256 of the Companies Act, 1956, Mr. Bernard Gallus, Mr. Ratul Puri and Dr. Vinayshil Gautam (Directors) retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Auditors

Your Company's Statutory Auditors, M/s Walker, Chandiok & Co. (FRN No. 001076N), Chartered Accountants, holds office until the conclusion of ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1B) of the Companies Act, 1956.

Auditors' Report

The observations made in the Auditors' Report are self- explanatory and therefore, do not call for any further comments. Stock Option Plan

Your Company had introduced a Stock Option Plan for its Non-Executive Directors i.e. Directors Stock Option Plan - 2005 ("DSOP-2005") and for its employees i.e. Employees Stock Option Plan-2004.

The company has further introduced Stock options plan for its employees ("ESOP - 2009") by the resolution passed in the meeting of the Board of Directors on the 30th July, 2009 and subsequently, approved by the shareholders of the company in their Annual General Meeting held on 8th day of September 2009. The plan came into force on 29th day of January 2010, being the date of first offer of ESOPs to the employees under ESOP Plan 2009.

During the year under review, the Compensation Committee of the Board of Directors has not granted any new options to employees of the Company under any of ESOP Schemes. The particulars of options issued under the said Plan as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as 'Annexure A' and forms part of this report.

Restructuring of Outstanding Foreign Currency Convertible Bonds (FCCB)

Your Company had issued US$75,000,000 Zero Coupon Tranche A Convertible Bonds and US$75,000,000 Zero Coupon Tranche B Convertible Bonds (the "Bonds") in June 2007 with a tenure of 5 years. Since then, your Company bought back outstanding Bonds amounting to USD 61.1 million. The conversion price of these Bonds have been significantly higher than the market price of the Equity Shares of the Company at the relevant times and the Bonds were not converted into equity shares.

The Company's foreign currency convertible bonds (FCCBs) having face value of Rs. 46,786 lacs (equivalent to USD 88.5 million) were due for redemption on 21 June 2012, along with the premium on redemption of Rs. 20,959 lacs. The Company is in the process of re-structuring these FCCBs and has accordingly, received approval from the Reserve Bank of India (RBI) to extend the term of these FCCBs up to 20 Dec 2012, subject to the consent of bond holders. The Company is in discussions with the FCCB holders to restructure its obligation (both the face value and the premium) along with certain terms inter-alia, exchange of old bonds with new bonds, maturity of new bonds, redemption premium and conversion option.

Debt Restructuring and Business Strategy

(a) During the year the Company applied for Corporate debt restructuring (CDR) to re-structure its existing debt obligations. The Company received the final Letter of Approval (LoA) dated October 22, 2012 from the Corporate Debt Restructuring Empowered Group (CDR-EG) to re-structure existing debt obligations, including interest, additional funding and other terms (hereafter referred to as "the CDR Scheme"). The board of directors of the Company at their meeting held on November 09, 2012 approved the terms of the CDR Scheme for implementation. The effect of the CDR Scheme has not been given in the financial results of the Company as of March 31, 2012, since the execution of the Master Restructuring Agreement (MRA) by all the lenders is pending and the Company in the process of complying with the conditions precedent to the implementation of the CDR Scheme.

(b) A subsidiary of the Company, Moser Baer Solar Limited (MBSL) and its subsidiary Moser Baer Photovoltaic Limited (MBPV) were also referred for debt restructuring with the Corporate Debt Restructuring Cell (CDR cell). MBPV received the final letter of approval dated September 27, 2012 to re-structure existing debt obligations, including interest, additional funding and other terms. The debt re-structuring proposal of Moser Baer Solar Limited (MBSL) is under discussion amongst its lenders. In anticipation of the successful implementation of the CDR scheme, the financial statements of MBSL have been prepared on a going concern basis. Further, the management of these subsidiaries has obtained business valuations as of March 31, 2012 by an independent valuer, with the information and projections used for Techno Economic Viability (TEV) assessment by the consortium of banks participating in the CDR schemes of the respective subsidiaries. The aforementioned business valuation has been done using the discounted cash flows method with significant underlying assumptions, including, conclusion of Corporate Debt Restructuring in the terms proposed or accepted by CDREG, as the case may be, implementation of regulatory measures by the appropriate authority and successful implementation of new technologies by these companies.

Based on the business valuations, the Company has concluded that no adjustments to either the carrying values of debt obligations or the carrying values of underlying fixed assets aggregating Rs. 134,476 lacs is necessary to be made in the consolidated financial results for year ended March 31, 2012 or to the underlying investments in and advances to these subsidiaries aggregating to Rs.71,892 lacs, in the standalone financial results for year ended March 31, 2012.

The Company has an investment in and certain amounts recoverable from another subsidiary, Moser Baer Entertainment Limited (MBEL) amounting to Rs 14,822 lacs as at March 31, 2012. A business valuation of MBEL has been carried out by an external valuer based on Company's business plans, which include new initiatives to be undertaken by the Company and MBEL to leverage the market. Based on this valuation, no provision for impairment of either the investment or amounts recoverable has been made in the stand alone financial statements of the Company as at March 31, 2012.

Particulars of employees

Particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this report. However, in pursuance of Section 219(1) (b)(iv) of the Companies Act, 1956, this report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are made available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Reconcilation of Share Capital Audit

As directed by Securities and Exchange Board of India (SEBI) Reconcilation of Share Capital Audit is being carried out at the specified periodicity by M/s. Deloitte Haskins and Sells, the Secretarial Auditors of the Company.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is given as per Annexure 'B' and forms part of this Report.

Fixed deposits

During the year under review, your Company has not accepted any deposit under Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975.

Corporate governance

The Company is committed to maintain the higher standard of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India's Corporate Governance Practice and have implemented all the stipulation prescribed.

A detailed report on Corporate Governance pursuant to the requirement of clause 49 of the listing agreement forms part of the annual report. However, in terms of the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the abridged annual report has been sent to the members of the company excluding this report. A certificate from the auditor of the Company M/s Walker, Chandiok & Co., Chartered Accountants, confirming compliance of conditions of corporate governance as stipulated under clause 49 is annexed to the report.

Listing at Stock Exchanges

The Shares of the Company continue to be listed on the Bombay Stock Exchange and National Stock Exchange. The annual listing fees for the year 2012-2013 have been paid to the Stock Exchanges.

Directors' Responsibility Statement

As required under Section 217(2AA) of the Companies Act, 1956 your Directors state:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that we 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 as at 31st March 2012 and its profit for the year ended on that date;

c) that we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that we have prepared the annual accounts on a going concern basis.

Conclusion

Your company continues to maintain its leadership position in its various businesses by providing innovative differentiated products and services to its customers.

Your Company has always focused on creating new values to increase customer and stakeholders' delight. Your company has outperformed the industry in a challenging year and continues to maintain its leadership position. We have also met leading international quality benchmarks through our strong focus on internal Quality Management processes. This, indeed, is how your Directors propose to drive the business endeavours, as we face the future with great optimism and confidence.

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from investors, customers, employees, business associates, bankers, vendors, as well as regulatory and government authorities.

For and on behalf of the Board of Directors

Moser Baer India Limited

Sd/-

Place: New Delhi Deepak Puri

Date: 9th November, 2012 Chairman & Managing Director


Mar 31, 2011

Dear Shareholder,

The Directors take pleasure in presenting their 28th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2011.

Financial Results

(Rupees in Million)

Particulars Year ended Year ended

March 31, 2011 March 31, 2010

Gross Sales, Service Income and Other Income 19675.4 23403.1

Profit before Depreciation, Interest and Tax but after prior period items 1902.6 6260.4

Depreciation / Amortization 3855.8 4918.9

Interest and Finance Charges 2019.6 1868.3

Profit before Exceptional Items and Tax -3972.8 -526.8

Exceptional Gain -34.3 88.2

Profit Before Tax -4007.1 -438.6

Tax Expenses Nil -76.5

Profit after Tax -4007.1 -362.1

Profit carried forward from Last year Nil Nil

Profit available for appropriation -4007.1 -362.1

Appropriations:

Dividend (Proposed) Nil 100.9

Provision for Tax on Proposed Dividend Nil 16.8

Transfer to General Reserve Account -4007.1 -479.8

Operations

Revenues for Financial Year 2011 stood at INR 19111.3 million with a profit before depreciation, interest, exceptional items and tax at INR 1902.6 million. During the year, operating margins were affected by increases in raw material costs and have recovered significantly following improvement in market equilibrium and increase in growth especially in advanced formats.

Market Development

Market environment and outlook

Moser Baer continues to be the market leader in optical media both in terms of low cost mass manufacturing and our R&D capabilities. Our products are sold in over 90 countries and we have developed strong strategic alliances and partnerships with leading global OEMs.

In our optical media business, over supply of products along with higher input cost of raw materials during the year had impacted the margins. The industry however, is continuously moving towards consolidation; and Moser Baer being at a leadership position is poised to capture a larger global market share. Moser Baer's solid state media and consumer electronics businesses are making significant progress, as we continue to launch new products and consolidate our brand.

Moreover, the momentum towards advanced media formats will intensify as prices of BluRay drive declined from their present levels. Moser Baer is continuously moving existing production lines to DVDs and advanced formats at low incremental costs, significantly raising our capacity to produce according to market demand.

Moser Baer is rigorously working with its OEM customers on technology transfers/ qualifications of its Blu Ray products, with a clear intent to take a leadership position in this format with strong cost advantages. Moser Baer's optical media production lines will continue to move existing production lines to advanced formats, significantly raising our capacity to produce media that support the emerging High Definition format.

Your directors are pleased to inform you that the overall OEM business is expected to remain stable with a clear upside coming from new business acquired during the year and growth in emerging formats. In addition the Company expects to gain from leveraging domestic distribution synergies.

Photo Voltaic Business

In the solar photovoltaic business, the industry witnessed robust growth during the year. India emerged as a strong market with various projects shaping up under the National Solar Mission and State Level Policies. Moser Baer's Solar Photovoltaic business has also made significant progress and has crossed numerous milestones. Our robust 'quality systems' and cutting edge technology, backed by focussed marketing helped us penetrate nine additional markets globally during the year, thereby expanding our presence to more than 35 countries. We have emerged as the first Solar PV Company from India to have achieved 100 MW of installations globally under our own brand.

Your directors are happy to share that Moser Baer's Subsidiary Moser Baer Solar Ltd. has emerged as the only Solar Company in the world to be awarded the prestigious 5 Star rating by TÜV Rheinland for quality systems, for two consecutive years. The sales for the business crossed the Rs. 8,500 million mark and shipments of approximately 100MW across technologies were recorded, establishing our leadership position in India. The entity continues to focus on innovation, efficiency improvement and cost competitiveness to offer high quality value added products and service delivery to esteemed customers in India and across the globe.

The business group has successfully commissioned India's first - 5 MW solar farm in Sivaganga, Tamil Nadu. This solar farm is a significant landmark not only for the Company but also the Nation as this demonstrates strong EPC capabilities and quality manufacturing available domestically. We installed India's first Building Integrated PV (BIPV) Thin Film Installation (BIPV) at in Hyderabad showcasing our innovativeness in finding solutions to our customer requirements.The PV business is working on plans to build both scale and efficiency which include:

- Commissioning the high efficiency SE line with a capacity of 100 MW of modules along with 90 MW of cells;

- Upgrading the existing thin film facility from single junction to tandem junction resulting in cost competitiveness and capacity upgradation; and

- Upgrading the existing crystalline silicon cell line to higher efficiency to reap the benefits of higher module wattage.

Also, the PV system business is poised for significant growth with a strong project pipeline covering both EPC and Project services.

Home Entertainment Business

The year 2010 was a challenging one for the home video market given the reduction in time gap between release of movies in theaters and their premier on television, increased level of piracy and high cost of content purchase. The home video market was estimated at Rs. 2.3 bn in 2010. The high cost of movie acquisition coupled with declining unit sale put pressure on recovery and profitability. As a result, in 2010, 30-40% of the movies rights available were not bought. This led to rationalization in film acquisition costs towards end of calendar year 2010.

After dominating the catalogue category, the entertainment business is increasingly focusing on the new film business and non-film content to capture the audience of all ages. With over 8,000 tiles, superior quality and delightful pricing we have become the market leaders and are taking initiatives to grow this segment.

Moser Baer is releasing video content in the DVD, VCD and Super DVD/Nice (DVD with multiple films) formts using Moser Baer's proprietary technology that ensures the highest quality standards while providing affordable prices.

With the rise in disposable incomes, increased affordability of DVD players the market for home video is expected to show exponential growth.

Subsidiary Companies

As per section 212 of the Companies Act, 1956, the Company is required to attach the Directors' Report, Balance Sheet and Profit & Loss Account of its subsidiaries. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in Annual Report. Accordingly, the Annual Report 2010-11 does not contain the financial statements of our subsidiaries. The annual audited accounts and related information of our subsidiaries, where applicable, will be made available upon request.

The annual accounts of the subsidiary companies will also be kept for inspection by any member of the company at its Registered Office and Corporate / Head Office located at 43B, Okhla Industrial Estate, Phase III, New Delhi - 110 020.

Dividend

Having regard to the operating performance for the year 2010-11, your Directors do not recommended any dividend for the year.

Directors

Mr. Vineet Sharma, was co-opted as Additional Director w.e.f. 31st March, 2011 to hold the office up to the date of the ensuing Annual General Meeting in terms of the provisions of Section 260 of the Companies Act, 1956. The Company has received a notice under Section 257 of the Companies Act, 1956, proposing the candidature of Mr. Vineet Sharma as Director of the Company.

In terms of the provisions of Section 255 and 256 of the Companies Act, 1956, Mr. Frank E. Dangeard and Mr. V.N. Koura and Mr. Prakash Karnik, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Auditors

M/s Price Waterhouse are the Statutory Auditor of the Company since F. Y 2004-05. The Audit Committee and the Board of Directors in order to adhere to the best Corporate Governance Practices the Statutory Auditor should be changed periodically on rotational basis. The Company has received a special notice pursuant to Section 225 of the Companies Act, 1956, from a member proposing to move a resolution for the appointment of Walker, Chandiok & Co., Chartered Accountants, as Statutory Auditors of the Company in place of the retiring Auditors, M/s Price Waterhouse at the ensuing Annual General Meeting.

Your Directors proposed the appointment of Walker, Chandiok & Co., Chartered Accountants, as Statutory Auditors of the Company at the ensuing Annual General Meeting.

Walker, Chandiok & Co., have access to large international network through member firms of Grant Thornton International all over the world and would be helpful and useful to the Company in managing its international operations. they have representations on various Accounting Boards & Committees in India and cater to leading Companies.

Auditors' Report

The observations made in the Auditors' Report are self- explanatory and therefore, do not call for any further comments.

Stock Option Plan

Your Company had introduced a Stock Option Plan for its Non-Executive Directors i.e. Directors Stock Option Plan - 2005 ("DSOP-2005") and for its employees i.e. Employees Stock Option Plan-2004.

The Company has further introduced Stock Options plan for its employees ("ESOP - 2009") by the resolution passed in the meeting of the Board of Directors on the 30th July, 2009 and subsequently, approved by the shareholders of the Company in their Annual General Meeting held on 8th day of September 2009. The plan came into force on 29th day of January 2010, being the date of first offer of ESOPs to the employees under ESOP Plan 2009.

During the year under review, the Compensation Committee of the Board of Directors granted new options to employees of the Company in terms of its ESOP Scheme - 2009. The particulars of options issued under the said Plan as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as 'Annexure A' and forms part of this report.

Foreign Currency Convertible Bonds (FCCB)

Your Company has issued in 2007 Foreign Currency Convertible Bonds in Tranche A being US$ 75 million and in Tranche B being US$ 75 million with tenure of five years.

During the financial year ended 31st March, 2011, your Company has not bought back any Foreign Currency Convertible Bond.

Particulars of employees

Particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this report. However, in pursuance of Section 219(1)(b)(iv) of the Companies Act, 1956, this report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are made available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Secretarial Audit

As directed by Securities and Exchange Board of India (SEBI) secretarial audit is being carried out at the specified periodicity by M/s. Deloitte Haskins and Sells, the Secretarial Auditors of the Company.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is given as per Annexure 'B' and forms part of the this Report.

Fixed deposits

During the year under review, your Company has not accepted any deposit under Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975.

Corporate Governance

It has always been the Company's endeavour to excel through better Corporate Governance and fair and transparent practices, many of which have already been in place even before they were mandated by the law of the land. The Company complies with all the provisions of revised Clause 49 of the Listing Agreement. A separate report on Corporate Governance compliance is included as a part of the Annual Report along with the reports on Management Discussion and Analysis and Additional Shareholder Information.

The certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with stock exchanges is annexed to this report as Annexure 1.

The Group Chief Financial Officer (CFO) and Chairman Managing Director have certified to the Board in regards to the financial statements and other matters as required in Clause 49 of the Listing Agreement and the said certificate is annexed to this report as Annexure 2.

In compliance with the Corporate Governance requirements, the Company has formulated and implemented a Code of Conduct for all its Board members and for the senior management of the Company. The said Codes of Conduct have been posted on the Company's website. All Board members and senior management personnel have affirmed compliance with the Code of Conduct for the year 2010-11. A declaration to this effect signed by the Managing Director of the Company forms part of this report.

Listing at Stock Exchanges

The Shares of the Company continue to be listed on the Bombay Stock Exchange and National Stock Exchange. The annual listing fees for the year 2011-2012 have been paid to the Stock Exchanges.

Directors' Responsibility Statement

As required under Section 217(2AA) of the Companies Act, 1956 your Directors state:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that we 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 as at 31st March 2011 and its profit for the year ended on that date;

c) that we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that we have prepared the annual accounts on a going concern basis.

Conclusion

Your Company continues to maintain its leader position in its various businesses through value addition to its products and services.

Your Company has always focused on creating the new values to increase the customer and stakeholders delight. Your Company has outperformed the industry in a challenging year and continues to maintain its leadership position. It has also been surpassing all international quality and cost benchmarks and continues to build shareholder's value. This, indeed, is how your Directors propose to drive the business endeavours, as we face the future with great optimism and confidence.

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from investors, customers, employees, business associates, bankers, vendors, as well as regulatory and government authorities.

For and on behalf of the Board of Directors

Moser Baer India Limited.

Sd/-

Place : New Delhi Deepak Puri

Date : September 03, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors take pleasure in presenting their 27th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31s1 March, 2010.

Financial Results

(Rupees in Million)

Particulars Year ended Year ended

March 31, 2010 March 31, 2009

Gross Sales, Service Income and Other Income 23403.1 23924.4

Profit before Depreciation, Interest and Tax but after prior period items 6260.4 4439.3

Depreciation/Amortization 4918.9 4971.40

Interest and Finance Charges 1868.3 2053.20

Profit before Exceptional Items and Tax -526.8 -2585.3

Exceptional Gain 88.2 1001.3

Profit Before Tax -438.6 -1584.0

Tax Expenses -76.5 -75.3

Prof it after Tax -362.1 -1508.7

Profit carried forward from Last year nil 260.1

Profit available for appropriation -362.1 -1248.6

Appropriations:

Dividend (Proposed) 100.9 101.1

Provision for Tax on Proposed Dividend 16.8 17.2

Transfer to General Reserve Account -479.8 -1366.8



Operations

Revenues for Financial Year 2010 stood at INR 20,518 million, profit before depreciation, interest, exceptional items and tax stood at INR 6260.4 million. During the year, operating margins recovered significantly following improvement in market equilibrium and increase in growth especially in advanced formats. Interest costs reduced on account of lower average interest rate and repayment of debt.

Market Development

Market environment and outlook

Moser Baer continues to be the market leader in optical media both in terms of low cost mass manufacturing and our R&D capabilities. Our products are sold in over 90 countries and we have developed strong strategic alliances and partnerships with leading global OEMs.

With DVD-R slowly but steadily taking over CD-R volumes at retail and its significant growth in some of the emerging markets, it is poised to become the major format in optical media for 2010. CD-R continues to remain the key format in niche high end professional segment. Moreover, the momentum towards advanced media formats will intensify once prices of Blu Ray drive climbs down from their present levels. Moser Baer is continuously moving existing production lines to DVDs and advanced formats at low incremental costs, significantly raising our capacity to produce according to market demand.

We have received encouraging volume growth in blank optical media in emerging markets like China, India and Latin America and are constantly expanding into further geographies. Moser Baer is rigorously working with its OEM customers on technology transfers/qualifications of its BluRay products, with a clear intent to take a leadership position in this format with strong cost advantages. Moser Baers optical media production lines will continue to move existing production lines to advanced formats, significantly raising our capacity to produce media that support the emerging High Definition format.

Your directors are pleased to inform you that the overall OEM business is expected to remain stable with a clear upside coming from new business acquired during the year and growth in emerging formats.

Photo Voltaic Business

Moser Baers photovoltaic business achieved key milestones during the year further strengthening our position in the global photovoltaic market. Global shipments reached approximately 50MW for the year. Significant traction was seen in both the showcase technologies of Moser Baer- Crystalline Silicon and Thin Film. We have now reached a total capacity of 140MW in both the technologies combined placing us as one of the largest PV players in India.

Moser Baer Photo Voltaic Ltd has been awarded the prestigious 5 Star Rating Certificate by TOV Rheinland in recognition to the highest standards of Quality adopted in our business operations.

In addition, our process team has effectively achieved worlds highest single junction thin-film module efficiency of 7.3% and an efficiency of 15.2% for Crystalline Silicon on the existing production lines with process re-engineering. Due to our strong efficiency improvements we have been able to de-bottleneck and successfully increase our production capacities to 90MW in crystalline silicon cell manufacturing and 50MW in Thin Film in our Greater Noida Plant.

With our strong technology and quality, aggressive sales and marketing initiatives, service levels and cost competitiveness, we are on the path of establishing ourselves as a preferred vendor with top tier integrators, distributors and EPC players in large PV markets and have successfully managed to distribute products in a total of 25 countries.

Within India, we have developed complete systems capability from concept to commissioning. The group has successfully commissioned the largest of its kind thin film project in India - 1MW solar project in Chandrapur, Maharashtra. This solar farm is a significant landmark for the company as it not only demonstrates our strong EPC capabilities but also serves as an exemplary project providing Moser Baer the opportunity to play a pivotal role in Indias ambitious National Solar Mission. The group is also in the process of executing the 5MWTamil Nadu Project. With this, the company has gained the experience of executing large sized solar projects.

Home Entertainment Business

Moser Baer is today Indias largest home entertainment player with rights to more than 10,000 titles and video content offerings in every popular language in India. We are a one-stop shop for home entertainment with pan India presence. We have a unique business model of high quality and large variety content, at reasonable prices for Indian consumer. With effect from March 31, 2010, the entertainment business has been hived off as a separate, wholly-owned, subsidiary - Moser Baer Entertainment Ltd.

Moser Baer is releasing video content in the DVD, VCD and Super DVD (DVD with the multiple films) formats using our proprietary and patented technology that ensures quality and affordable prices for the masses and premium content and prices for the higher end of customers. We have also begun releasing new films in Blu-Ray format, which is fast catching up attention of the high-end consumers in India.

During the financial year, we acquired the rights and released 30 new films in Hindi including successful films like Delhi 6, Kaminey, All the Best, Blue and London Dreams, which have achieved over 100,000 unit sales. Moser Baer has also acquired the rights for over 50 films in Malayalam and other regional languages and achieved significant success in Malayalam with films Twenty-20, 2 Harihar Nagar, Bhagyadevata, Kaana Kanmani, Crazy Gopalan, Magante Achan and Brahmaram. In Tamil, Moser Baer achieved significant success with films like Yavarum Nalam, Subramaniapuram.Santosh Subramaniam and Pasanga. Buoyed by this success, Moser Baer is determined to continue the domination in new films in most key languages by acquiring more content. Moreover, our new pricing model for new films is enabling us to achieve better profitability and recovery in most languages.

The business has also produced and released films in Hindi, Tamil and Malayalam during the year. In Hindi, Sankat City and Hide & Seek were released during the year. Both have earned critical acclaim. In Tamil, Moser Baer produced and released Kanden Kadhalai and Aval Peyar Tamilarasi during the year. While the first one achieved both box office success and critical acclaim, the second one earned critical acclaim. In Malayalam, Kaana Kanmani was produced and released, which was highlyappreciated.Afew more films are getting ready for release in Hindi and Tamil.

We have also introduced Direct to DVD1 release - a new concept attempted in Hindi with Phir Khabi film, which is a first Direct to DVD film in Hindi cinema.

Moser Baer plans to continuously increase its market share in the Home Entertainment business through new initiatives and innovations to sustain and improve our performance in the year ahead.

Subsidiary Companies

The company has received an exemption from the Ministry of Corporate Affairs, Government of India, vide order No 47/ 240/2010-CL -III Dated 11/06/2010 under section 212(8) of the Companies Act, 1956 with regard to attaching the various documents in respect of the subsidiaries for the year 2009-10. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information upon request of any member of the Company and its subsidiaries who may be interested in obtaining the same.

The annual accounts of the subsidiary companies will also be kept for inspection by any member of the company at its Registered Office and Corporate/Head Office located at 43B, Okhla Industrial Estate, Phase III, New Delhi-110020.

Dividend

Your Directors are pleased to recommend payment of a dividend of Re. 0.60 per share (6 %) for the year ended 31s March, 2010. The total cash outflow on account of Equity dividend payments, including distribution tax and surcharge, will be Rs. 117,755,786/-.

Directors

Mr. Rajesh Khanna, was co-opted as Additional Director at the meeting of the Board of Directors held on 31st March, 2010 to hold the office up to the date of the ensuing Annual General Meeting in terms of the provisions of Section 260 of the Companies Act, 1956. The Company has received a notice under Section 257 of the Companies Act, 1956, proposing the candidature of Mr. Rajesh Khanna as Director of the Company.

In terms of the provisions of Section 255 and 256 of the Companies Act, 1956, Mr. Vinayshil Gautam and Mr. Ratul Puri, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

Auditors

M/s Price Waterhouse (FRN No. 007568S), Chartered Accountants, who are the Statutory Auditors of the Company, hold office, in accordance with the provisions of the Companies Act, 1956 (the Act), upto the conclusion of the forthcoming Annual General Meeting (AGM). They have not offered themselves for re-appointment as Auditors of the Company for the financial year 2010-11. Special notice has been received from a member proposing the appointment of M/s Price Waterhouse (FRN No. 012754N), Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of the forthcoming AGM until the conclusion of the next AGM, in place of M/s Price Waterhouse (FRN No. 007568S), the retiring Auditors of the Company.

M/s Price Waterhouse (FRN No. 012754N), Chartered Accountants, have expressed their willingness for appointment as the Statutory Auditors and confirmed that their appointment, if made, will be within the prescribed limits under Section 224 (1B)of the Companies Act, 1956, and they are not disqualified for appointment within the meaning of Section 226 of the said Act.

Auditors Report

The observations made in the Auditors Report are self- explanatory and therefore, do not call for any further comments.

Stock Option Plan

Your Company had introduced a Stock Option Plan for its Non-Executive Directors i.e. Directors Stock Option Plan - 2005 ("DSOP-2005") and for its employees i.e. Employees Stock Option Plan-2004("ESOP-2004").

The Company has further introduced Stock option plan for its employees ("ESOP - 2009") by the resolution passed in the meeting of the Board of Directors held on the 30* July, 2009 and subsequently, approved by the shareholders of the company in their Annual General Meeting held on 8lh day of September 2009. The plan came into force on 28" day of January 2010, being the date of first offer of ESOPs to the employees under ESOP Plan 2009.

The particulars of options issued under the said Plans as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are appended as Annexure A and forms part of this report.

Foreign Currency Convertible Bonds (FCCB)

Your Company has issued the Foreign Currency Convertible Bonds in Tranche A being US$ 75 million and in Tranche B being US$75 million with tenure of five years.

RBI vide its letter RBI/2008-09/317 dated 8th December, 2008 liberalized the guidelines for the Buyback of the Foreign Currency Convertible Bonds and allowed the Indian Companies to complete the procedure of buy back of its FCCB till 31s1 March, 2009, without taking approval of the RBI. RBI vide its further Notification RBI/2008-09/411 dated 13th March, 2009 extended the said time limit till 31st December, 2009, under approval route. However, RBI further vide its notification RBI/2009-10/367 dated 29th March, 2010 extended the said time limit till 30th June, 2010. During the financial year ended 31st March, 2010, your Company bought back US$3.5 million of face value of Bonds of Tranche A and US$7.0 million of face value of Bonds of Tranche B at a discount to the face value. The consequent reduction in debt and reversal of redemption premium accrual from share premium account.

Particulars of employees

Particulars of employees, as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, form part of this report. However, in pursuance of Section 219(1 )(b)(iv) of the Companies Act, 1956, this report is being sent to all shareholders of the Company, excluding the aforesaid information and the said particulars are made available at the Registered Office of the Company. The members interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Secretarial Audit

As directed by Securities and Exchange Board of India (SEBI), secretarial audit is being carried out at the specified periodicity by M/s. Deloitte Haskins and Sells, the Secretarial Auditors of the Company.

Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given as per Annexure B and forms part of this Report.

Fixed deposits

During the year under review, your Company has not accepted any deposit under Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975.

Corporate governance

It has always been the Companys endeavour to excel through better Corporate Governance and fair and transparent practices, many of which have already been in place even before they were mandated by the law of the land. The Company complies with all the provisions of revised Clause 49 of the Listing Agreement. A separate report on Corporate Governance compliance is included as a part of the Annual Report along with the reports on Management Discussion and Analysis and Additional Shareholder Information.

The certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges is annexed to this report.

The Group Chief Financial Officer (GCFO) and Chairman & Managing Director (CM D) have certified to the Board in regard to the financial statements and other matters as required in Clause 49 of the listing agreement and the said certificate is annexed to this report.

In compliance with the Corporate Governance requirements, the Company has formulated and implemented a Code of Conduct for all its Board members and for the senior management of the Company. The said Codes of Conduct have been posted on the Companys website. All Board members and senior management personnel have affirmed compliance with the Code of Conduct for the year 2009-10. A declaration to this effect signed by the Managing Director of the Company forms part of this report.

Listing At Stock Exchanges

The Shares of the Company continue to be listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The annual listing fees forthe year 2010-2011 have been paid to the Stock Exchanges.

Directors Responsibility Statement

As required under Section 217(2AA) of the Companies Act, 1956, your Directors state:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that we 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 as at 31st March 2010 and its profit for the year ended on that date;

c) that we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) that we have prepared the annual accounts on a going concern basis.

Conclusion

Your company continues to maintain its leadership position in its various businesses through value addition to its products and services.

Your Company has always focused on creating the new values to increase customer and stakeholder delight. Your Company has outperformed the industry in a challenging year and continues to maintain its leadership position. It has also been surpassing all international quality and cost benchmarks and continues to build shareholders value. This, indeed, is how your Directors propose to drive the business endeavours, as we face the future with great optimism and confidence.

Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from investors, customers, employees, business associates, bankers, vendors, as well as regulatory and government authorities.

For and on behalf of the Board of Directors

Moser Baer India Limited.

Sd/-

Place : New Delhi Deepak Puri

Date : 12th July, 2010 Chairman and Managing Director

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