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Directors Report of Videocon Industries Ltd.

Dec 31, 2014

Dear Shareholders,

The Directors take pleasure in presenting the Twenty-Fifth Annual Report together with the Audited Accounts and Auditors'' Report for the financial period ended on 31st December, 2014.

PERFORMANCE REVIEW

The performance of the Company, on standalone basis, for the financial period ended on 31st December, 2014, is summarized below:

(Rs. in Million)

Period Ended Period Ended 31st December, 30th lune, Farticulars 2014 2013 (18 months) (18 months)

Net Revenue from Operations 189,676.03 181,572.75

Other Income 11,651.42 4,182.66

Total Income 201,327.45 185,755.41

Profit Before Finance Costs, 45,093.02 34,246.52

Depreciation and Tax Finance Costs 35,188.96 27,148.18

Depreciation and Amortisation 9,858.11 8,243.50

Profit /(Loss) Before Tax 45.95 (1,145.16)

Tax Expenses 15.55 (428.84)

Profit/(Loss) for the Period 30.40 (716.32)

The financial year of the Company was extended by a period of six months. Accordingly, the financial year under review comprises of a period of eighteen months commencing from 1 st July, 2013 to 31st December, 2014.

OPERATIONS

CONSUMER ELECTRONICS & HOME APPLIANCES

The period brought delight to Consumer Electronics & Home Appliances Industry which saw signs of recovery after a very rough patch. Despite challenges in both internal and external environment, Consumer Electronics & Home Appliances Industry has shown growth in technically innovative products. Cashing on correct anticipation of consumer needs and innovative R&D and marketing, your Company was able to deliver a stable performance.

OIL & GAS

The Company continues to remain actively involved in Exploration & Production activities. The Company is exploring more and more opportunities in Oil and Gas sector. During the year under review, Videocon Mauritius Energy Limited has sold its 100% stake in Videocon Mozambique Rovuma 1 Limited ("VMRL") for a consideration of US$ 2,475.00 Million. VMRL held 10% participating in the offshore Area 1 in Rovuma Basin in Mozambique (the "Offshore Area 1"), which has series of sizable natural gas discoveries.

During the period under review, the Company has announced various discoveries and explorations made by its wholly owned subsidiaries and/or joint ventures thereby adding to the hydrocarbon resources already established in these blocks. The details of discoveries are:

- August, 2013 - Petrobras, the Operator of the BM SEAL - 11, has confirmed the presence of light hydrocarbons in the Appraisal Well, drilled in Farfan Discovery Area. The consortium will carry on the operations in the area to confirm the extent of hydrocarbons in place and characteristic of the reservoir conditions encountered.

- October, 2013 - Petrobras, the Operator of the BM SEAL - 11 announced that it has completed the formation test in Well (3-SES -176D), informally known as Farfan 1 #. The test evaluated 30 meters of turbidite sandstones formation and confirmed good reservoir characteristics featuring excellent productivity of good quality oil.

- November, 2013 - Anadarko, the Operator of BM - C- 30 Concession that Wahoo - 5 appraisal well has encountered more than 200 net feet of high quality pay in pre-salt reservoir.

Afterthe balance sheet date, the following discoveries were announced:

- January, 2015 - Petrobras, the Operator of the BM SEAL - 11 announced the discovery of new oil accumulation in Farfan area in the Sergipe basin. The results confirmed the light oil and gas discovery in Farfan area and presented the excellent permoporosity conditions in the turbidities reservoirs with 54 meters thickness.

- February, 2015 - Petrobras, the Operator of the BM SEAL - 11 announced the drilling results of the third appraisal well 3-SES- 186, located 103 km from the city of Aracaju and about 10 km from the discovery well "Farfan". The results confirmed the extension of the light oil reservoirs. In addition the well found presence of a new oil accumulation with a total thickness of 68 meters in shallower reservoirs.

- April, 2015 - Petrobras, the Operator of the BM SEAL - 11 completed the formation test of well 3-BSRA-1286-SES located in BM SEAL - 11 concession in the SEAL - M- 426 Block in ultra- deep waters of the Sergipe Alagoas Basin. The results confirmed the presence of light oil and good productivity of reservoirs. This drilling identified two reservoir intervals of light oil and gas -the top thickness of 44 meters and the bottom 11 meters thick. The bottom zone is the new discovery of the area.

TELECOM

Videocon Telecommunications Limited (VTL), a subsidiary of the Company, is an Indian cellular service provider that offers GSM mobile services in India.

On 3rd March, 2013, VTL was awarded the Unified Licenses Access Services for six circles, namely, Bihar, Gujarat, Haryana, Madhya Pradesh & Chhattisgarh, Uttar Pradesh (East) and Uttar Pradesh (West) effective 16th February 201 3, which are valid for a period of 20 years. VTL has also been allotted 5Mhz spectrum in 1,800 Mhz category in each of these six circles. VTL is providing commercial services.

POWER

The Company has commissioned three solar power projects viz., 5.75 MW solar Photovoltaic Power Project in Village Majra, District Warora, Maharashtra; 5.75 MW solar PV power project in Village Betwasiya, District Jodhpur, Rajasthan has been commissioned by the Company through its step down subsidiary, Comet Power Private Limited; and 5.5 MW solar PV power project in Gujarat has been commissioned by the Company through Unity Power Private Limited (26% equity stake held by the Company). These solar projects are operating at full capacities and are generating electricity.

The Company''s thermal power business consists of two 1,200 MW coal-fired thermal electricity power projects under construction, the Power Project in the state of Gujarat and the Power Project in the state of Chhattisgarh. These power projects are being undertaken by Pipavav Energy Private Limited and Chhattisgarh Power Ventures Private Limited respectively. These power projects are not yet commissioned.

INSURANCE

The Company entered into a joint venture with Liberty Mutual Group to setup a non-life insurance company, Liberty Videocon General Insurance Company Limited, on 16th December, 2010. Liberty Videocon General Insurance Company Limited is in the business of non-life insurance and providing insurance coverages for auto, fire, marine, engineering, liability & health. The Company currently holds 81.91% stake in the joint venture and the remaining equity is owned by Liberty Mutual Group.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 2.00 per equity share, to the Non-Promoter Shareholders (Public Shareholders). The equity dividend, if approved, by the shareholders, will entail a payout of Rs. 230.14 Million and dividend distribution tax of Rs. 46.02 Million.

Further, your Directors recommend dividend of 8% on the preference shares.

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

TRANSFER TO RESERVES

Your Directors propose to transfer Rs. 300.00 Million to the General Reserve, Rs. 153.30 Million to Capital Redemption Reserve and Rs. 2,054.24 Million to Bond/Debenture Redemption Reserve.

FORFEITURE OF EQUITY SHARES

During the period under review, the Company has forfeited 12,794 partly paid equity shares which were allotted pursuant to the Rights Issue made in April, 2010.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs. 2.67 Million in respect of unpaid /unclaimed dividend for the Financial Year 2006-07 to the Investor Education And Protection Fund (IEPF).

Dividend for the financial year ended 2007-08 and thereafter, which remain unclaimed for a period of seven years will be transferred to the IEPF. Members who have not encashed dividend warrant(s)/ instrument^) for the said years are requested to obtain duplicate warrant(s)/demand drafts by writing to the Company''s Registrar and Transfer Agent.

ISSUES/ALLOTMENT

During the period under review, the Company has allotted 15,700,000 underlying equity shares of face value of Rs. 10/- each, represented by 15,700,000 Global Depository Receipts (GDRs) at a price of US$ 2.88 per GDR, equivalent to Rs. 181.61 per equity share, aggregating to US$ 45.216 Million to LLIC S.a.r.l., on a private placement basis.

FIXED DEPOSITS

Your Company has not accepted/renewed any Fixed Deposit within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

PERSONNEL

A statement of the particulars of employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is annexed and forms part of this Report.

CONSERVATION OF ENERGY

The greenest power is the power one doesn''t have to produce. Your Company strongly believes that half the solution to conserve the energy is the smart use of power. Your Company has taken several steps to conserve energy through its "Sustainability" initiatives. The Company strongly and religiously follows and practices the principle of 3Rs- Reduce, Reuse and Recycle. Being a large and responsible conglomerate, your Company has taken considerable steps to imbibe the practice of energy conservation and energy efficiency at all levels of management and has made a core part of the business strategy that takes accountability for every dimension of social, cultural, economic and environmental governance, creating sustainable value for all its stakeholders.

The move is consistent with energy conservation plans, and your Company believes it is the right way to go in achieving energy efficiency. Some of the specific measures undertaken are:

- Use of energy saving lighting arrangement in shop floor & on roads inside the manufacturing facilities by using LED lamps, Electronics Ballets, CFL lamps, installation of transparent sheet which utilizes natural illumination and usage of more star rating equipment to save more energy

- Use of motion sensors, pull chord switches and daily/weekly timer for better lighting control for stores, offices, washrooms and street lights.

- Use of natural air-ventilators which does not consume power.

- Usage of treated water from effluent generation for developing garden & plantation of trees at all the manufacturing units.

- Use of energy efficient submersible pump motors at all the manufacturing units.

- Improvement of per hour production to reduce power burning hours for the same production quantity.

- Awareness programs of energy savings & utilization of natural resources.

- Conducting energy saving training sessions for employees at all levels.

- Reduction in power consumption by taking opportunities of switching off during idle production hours i.e. tea & lunch timings etc.

- Replacement of pneumatic tools & equipments by energy efficient electrical tools & equipments and converted continuous power to intermittent power consumption.

- Usage of innovation tools, proper scheduling of preventive maintenance of machinery & equipments.

- Continuous monitoring of power usage throughout the year.

- Power Cost Optimization by Power Trading through Indian Energy Exchange.

The adoption of the above energy conservation measures have helped to curtail the proportionate increase in total energy usage consequent to overall increase in production. This has made it possible to maintain cost of production at optimum levels.

During the period under review:

- Your Company has been awarded prestigious National Energy Conservation Award for 2013 by the Bureau of Energy Efficiency (BEE), a part of the Central Electricity Authority, Ministry of Power. The award for 2013 was given by Honorable President of India. The award has been given in appreciation of the Company''s continuous efforts in R& D and product up-gradation by implying new and innovative energy saving practices resulting to achievement in Energy Conservation in the category of BEE Star Labelled Appliances (Refrigerator) for strict adherence to the BEE standards set up by the Bureau of Energy Efficiency

- Aurangabad unit has been awarded State level Award for Excellence in energy conservation and Management organised by MEDA (Maharashtra Energy Development Agency) in the year 2013.

RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Research is to see what everybody else has seen, and to think what nobody else has thought. Every year, the Company invests significantly in research and development. The Research and Development (R & D) of the Company focuses on developing and commercializing the technologies of its businesses which are of strategic importance for future growth.

The Business is committed to achieve world benchmark quality besides expanding new product offerings by expediting R&D products. Further, the Company will continue to focus on improving its cost competitive position.

The Company''s R & D is aligned towards developing and acquiring the technology, core competence and skill sets required for robust and timely delivery of the envisaged future product portfolio with leading product attributes across the range of Consumer Electronic & Home Appliances (CE & HA). For the CE & HA product range, the focus is on 1) stunning design 2) rich features and 3) energy efficient, which is value for money. All the R&D activities are undertaken taking into account the current and likely future regulatory norms while ensuring adherence to the prescribed energy regulations.

Your Company maintains the R&D facilities in India and China. The prime focus of Company''s R& D is on developing existing technologies and product engineering innovation together with production efficiency and cost reduction. The Company''s domestic technology center is located in Aurangabad, Maharashtra. The Company also seeks assistance from external research agencies, from time to time.

Your Company has launched number of products in Consumer Electronics Industry with a wide range of Refrigerators, Washing Machines, Air Conditioners, Televisions, etc.,

The R&D activities of the Company are focused towards:

- Maximizing value;

- Increasing productivity;

- Cost reduction; and

- Creating a high performance environmentto promote innovation.

R&D activities carried out in various consumer electronics products and benefits derived from these activities:

- Introduction of new technology called 4K2K smart TV with gesture control, 3D Gaming, WiFi and N screen. With this introduction customer can experience gaming console, TV and internet on a single display unit.

- Introduction of large screen 85" 4K2K Smart TV

- Introduction of various other segments of 4K2K smart TV sets.

- Addition of MHL - Mobile High Definition Link feature: This feature enables customer mirror MHL enabled mobile to TV and experience mobile screen on TV big screen.

- Addition of ARC -Audio Return Channel Feature: This feature enables customer to connect TV to Home theatre for enhanced digital audio experience through single HDMI Cable.

- Introduction of Super Narrow Bezel LED TV with colour options viz. Green/Orange/Red in 20"/24"/32"/40" Screen Size.

- Addition of N speaker feature: This enables customers to experience personalized audio of TV on mobile wirelessly

- Introduction of India''s 1st "5 Star (7 Star Level) BEE Rating Refrigerator". This DC refrigerator has lowest energy consumption.

- Introduction of India''s 1st "Photosis Fresh" technology Refrigerator for keeping foods fresh for longer time.

- Introduction of widest range of Semi Automatic Machines in Industry from 6.0 kg to 9.0 kg capacity to cater to the needs of various segments of market and fulfilling requirements of wide spectrum of the consumers.

- Introduction of wide range of Fully Automatic & Front Load Machines from 5.5 kg to 7.8 kg capacity to meet the market requirements.

Future plan of action:

In near future, the Company shall continue to focus on environment friendly products and also focus efforts on new technologies which could offer better products in the domestic as well as international market. The Company has the following plans through R&D:

- Introducing of 4K2K Smart Curve TV with a screen size of 55765".

- Adding a V Green feature - This features helps customer to reduce the power consumption as well as protect eye sight based on ambient light conditions automatically.

- Adding new back light and processor technology for the natural colour reproduction.

- Adding a PVR - Personal Video Recorder feature in DDB platform -This feature will enable customer to record favourite program of d2h and can be watched at his/her convenient time.

- Increase in the market share and enhance the Brand Value.

- Bring in best features of various products together.

- Introduction of washing machines which are contemporary, user friendly, energy efficient, use lesser water and detergents and value for money.

Duringthe period under review, the Company has incurred an amount of Rs. 53.66 Million, representing 0.03 % of the turnover, towards recurring R&D expenses.

HEALTH & SAFETY

The Company provides a safe and healthy workplace for its employees by establishing the right safety culture across the organisation. The senior leadership is fully committed to the ultimate goal of zero injury to its employees and all stakeholders who are associated with the Company''s operations. Emphasis is laid on creating a participatory safety governance model.

Some of the measures and initiatives undertaken by the Company are:

- Release of Videocon Industries Safety Booklet for methodology for usage of Personal Protective Equipments while working in critical areas for e.g. Height Work, Hot Work, Electrical Work, Hazardous Chemical Unloading work, Confined space Work in Campus.

- Accident Monitoring Boards Display in each department, main entrance and maintenance of data of Accident for each department in Accident Status Matrix.

- Procurement of new fire extinguisher to replace Hydraulic Pressure testing.

- Installed Emergency Siren in each department and in the campus area.

- Installed Blowing Light Indicator with Siren for Electric Overhead Travelling Crane operation in Molding Shop & Tool Room in Campus.

- Stage wise Safety Posters Display in local language on shop floor for prevention of Accident.

- Renewal of fire NOC for Company''s campus.

- Procurement of Safety equipments in campus like LPG gas detector, Road Convex Mirror, Fire blanket, Fire Bucket, First aid box & Breathing Apparatus set.

- Implementations of work permit system with availability of security guard for close monitoring.

- Periodic refreshertraining conducted for security guard regarding fire prevention & control for to enhance competency level.

- Conducting regular safety audit & mock drill as per calendar in the campus.

- Incident /Accidents investigation and reporting with root cause, corrective and preventive actions.

- Installation of first aid box & fire blanket at security check point for every department.

- Provide fire point at high hazardous area (Zone-0).

- Carried out HPT (Hydraulic Pressure Testing) of pressurized extinguisher as per Maharashtra Fire Prevention & Life Safety Measures Act.

- To speed up response time & handle emergency situation displayed list of onsite & offsite contact numbers at conspicuous places in plant.

- Displayed cautionary signs at high hazardous area to warn workers about imminent hazard dealt at site.

- Enhance road safety- displayed road convex mirror, speed limit board & guide lines for visitors.

- Regular training programs to all levels for on the job & off the job.

- At the entrance of the building display of emergency evacuation plans with location of fire extinguisher.

- Visualisation in the campus to access assembly point, first aid box & emergency exit door.

- Displayed MSDS (Material Safety Data Sheet) at chemical storage area as per rule 73-M from MFR 1963.

- Displayed UN classification boards at Zone - 0 areas.

- 100 % compliance with legal requirement of MPCB (Maharashtra Pollution Control Board), DISH (Directorate of Industrial Safety & Health) and Chief Fire Office & CCOE Chief Controller of Explosives (Diesel, FO Storage).

- Celebration of Safety promotional activities like - National safety week & fire service week to create awareness among the workers.

- Conducting the Safety Committee Meetings (SCM) in every month to strengthen the Safety norms.

- Availability of fire officer round the clock in the campus to handle the Emergency.

- Availability of Fire Blankets in the shop floor to handle the fire emergency.

- Availability of well-equipped Occupational Health Center (OHC) & ambulance with all medical devices, in case of emergency.

ENVIRONMENTAL PROTECTION

Your Company truly believes that environmental care is the most profitable investment. During manufacturing process, the process causes noise pollution and discharges waste water, exhaust gas, dust and solid wastes. In orderto comply with Indian laws and regulations in respect of environmental protection, the Company has implied internal environmental protection control and monitoring measures.

The Company has established an internal environmental management system. The industrial water and solid wastes (slurry) emitted during the manufacturing processes are recycled and are utilised to make bricks, which are then used in building construction.

The Company has also formed environmental protection committee at its glass shell manufacturing facility in Bharuch and has planted teak and mahogany plants around the glass shell manufacturing facility in order to improve the environment, reducing dust and improving air quality The Company has set up a number of specialized environmental protection management divisions and environment monitoring teams in its various manufacturing units and offices. The Company also practices the concept of ''Resource Productivity''. The Company aims at drive-down of costs by reducing waste and pollution and by creating opportunities for growth through process and product innovations. The following are some of the continuous measures taken by the Company for environment protection:

- Installation of New ETP Plant (3M3/Day) in AC Paint shop area to utilize paint shop water for gardening.

- Received all Local NOCs requirements of C5 Project for CCOE Approvals.

- Installed Fiber Roof Sheet on shop floor for use of natural light in shop floor.

- Change Old Manifest System in LPG gas bank in canteen area to reduce LPG consumption in Canteen.

- Repaired old Solar System in canteen & use of solar water for Rice cooking & Tea making.

- Boiler blow down water collected in Tank and connection of ETP for treatment & treated water use for gardening in campus.

- Renewal of contract of Hazardous Waste Disposal of the Company with Maharashtra Enviro Power Limited (MEPL).

- Implementation of 3R system - Reduce, Reuse & Recycle.

- Certification of ISO - 14001 for Environmental Management System.

- Tree plantation done on different events in Campus.

- Regular Air & Water Monitoring as per (NAAQS -2010) Standards.

- Celebration of world environment day, to increase the mass awareness among the employees.

- Maintain ETP STP outlet water parameter within limit as per CPCB (Central Pollution Control Board).

- Disposal of Hazardous & Non-Hazardous waste to the authorized agency (Authorized by pollution control authority) as per statutory requirements.

- Conducting ISO, SGS Sustainability audit periodically.

- Arrangement of PUC Camp in the campus to increase the awareness among the employees.

- Arrangements of Separate Location in scrap yard for Disposal of Hazardous Waste & Display Category board of Hazardous Waste area.

The Company has formed ''Quality Circles'' and ''Team of Experts'' selected from the employees, who are engaged in the manufacturing activities, for time and motion study of the overall manufacturing process and who give suggestions on ways and means for conservation of energy and power and environment protection.

As a result of the same, there is an overall improvement in efficiency. The Company has also been able to reduce energy costs. However, the beneficial impact of the same on the cost cannot be quantified.

INFORMATION TECHNOLOGY

Information Technology (IT) is vital and integral part of your Company. We have evolved our IT strategy and roadmap in line with our business strategy. Usage of IT is revolutionising the rules of business, resulting in structural transformation across enterprise.

We are continuously upgrading our infrastructure by replacing old/obsolete Desktops/ Laptops/ Servers etc and also upgrading the connectivity backbone across enterprise. The robust infrastructure is the essential component of an enterprise and our management has given due focus towards this.

We have initiated business process transformation program in direct coordination with our senior leadership team. This exercise is transforming our processes as per the Industry''s best business practices and helping us in strengthening our existing processes across the organisation.

We as an enterprise are fully focused on leveraging complete advantage of our SAP system. We are continuously auditing our existing processes mapped in SAR identifying the gaps and fulfilling the same across our organization. We are also using IT to the optimum benefits of our MIS users and decision makers. This whole exercise is helping us to be the leader in our space and helping us in reducing the cost, increasing our profit margins, bringing efficiency in our operations, building controls etc.

The digital revolution has entered into a new age that presents unprecedented challenges as well as tremendous business opportunities. We are continuously exploring new ways to deal with digital disruption and preparing a digital transformation strategy for our enterprise. We are transforming our customer''s experience and operations to be the digital leader in our space. Your Company has revamped many of its existing infrastructure facilities and websites and also implemented many mobile apps to support its digital strategy. In addition to this, your Company has also made its strong presence felt on Social Media platforms.

Your Company has matured Sales Transformation & Enhancement Program (STEP) application, an innovative & customised in-house developed sales tool for providing day to day information required by sales force on the field. This tool helps in improving efficiency, enhance ability & productivity of sales force, leading to long-term business sustainability and customer delight.

Your Company is building excellent relationship with Suppliers. It has implemented Supplier Communication Portal for direct communication with its suppliers as per the business needs.

Your Company is riding on the technology wave and improving IT systems in complete sync with organization''s goals.

CORPORATE SOCIAL RESPONSIBILITY

Your Company believes that the business existence comes from society therefore it is important "To improve the quality of life of the communities we serve through long-term stakeholder value creation". The Company takes on Corporate Social Responsibility (CSR) as part of its business viz. health, education, sports, sustainable livelihoods, drinking water, renewable energy (solar street lights), employability training and ethnicity.

The Company is keen to play "Save the environment" responsibility and to fulfill this responsibility it prorogates, consumer awareness to dispose of E-Waste through proper re-cycler channel.

The Company has taken this responsibility by participating in school and enriching students'' talents in many competitive activities.

Another common approach towards social responsibility is community based development where the Company is committed to provide safe /energy efficient and environment friendly product.

The Company has constituted CSR Committee which shall monitor the Corporate Social Responsibility Policy. Other details of the Committee are given in the Corporate Governance Report.

BOARD OF DIRECTORS

During the period under review, Mr. S. P Talwar ceased to be the Director of the Company w.e.f. 9th August, 201 3, on account of his sad demise. The Board would like to express its deep condolence towards the sad demise of Mr. S. P Talwar, and also expresses its heartfelt gratitude towards the contribution made by Mr. S. P Talwar during his tenure.

Further, Mr. S. Padmanabhan, Director of the Company resigned from the Board of the Company w.e.f. 25th March, 2014 and Mr. Ravindranath Bannanje - Nominee of IDBI Bank Limited ceased to be the Director of the Company w.e.f. 26th August, 2014, consequent to withdrawal of his nomination by IDBI Bank Limited.

The Board places its sincere appreciation towards the valuable contribution received from Mr. S. Padmanabhan and Mr. Ravindranath Bannanje, during their tenure as the Directors of the Company.

During the period under review, Mr. Subroto Gupta was co-opted as a Nominee Director of IDBI Bank Limited on the Board of the Company we.f.14th November, 2014.

In terms of the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, read with the Rules made thereunder, every listed company shall have at least one-third of the total number of directors as independent directors. Further, in terms of the provisions of Clause 49 (II) (A) (2) of the Listing Agreement where the Chairman of the Board is a non-executive director, at least one-third of the Board should comprise independent directors and in case the company does not have a regular non-executive Chairman, at least half of the Board should comprise independent directors.

Therefore, with a view to comply with the requirements of the provisions of Section 149 of the Companies Act, 2013 and the provisions of Clause 49 of the Listing Agreement, the Board thought it fit to appoint Mr. Radheyshyam Dalchand Agarwal, Maj. Gen. Sudhir Chintamani Nilkanthjatarand Mr. Aniljoshi as Independent Directors) for a period of five years. Accordingly, the Board of Directors of the Company at its meeting held on 14th August, 2014, have approved and made to continue appointment of Mr. Radheyshyam Dalchand Agarwal, Maj. Gen. Sudhir Chintamani Nilkanth Jatar and Mr. Anil Joshi as Independent Directors to hold office uptoaterm of five consecutive years from 14th August, 2014, not liable to retire by rotation.

The Company has received from Mr. Radheyshyam Dalchand Agarwal, Maj. Gen. Sudhir Chintamani Nilkanth Jatar and Mr. Anil Joshi (1) consent in writing to act as Director in Form DIR-2 pursuant to Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014, (2) intimation in Form DIR-8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that they are not disqualified under Sub-section (2) of Section 164 of the Companies Act, 2013 and (3) a declaration to the effect that he meets the criteria of independence as provided in Sub-section (6) of Section 149 of the Companies Act, 201 3.

The Company has also received a notice in writing along with requisite deposit, from a member under Section 160 of the Companies Act, 2013, signifying its intention to propose candidature of each of Mr. Radheyshyam Dalchand Agarwal, Maj. Gen. Sudhir Chintamani Nilkanth Jatar and Mr. Anil Joshi for the office of Directors of the Company.

In the opinion of the Board of Directors, Mr. Radheyshyam Dalchand Agarwal, Maj. Gen. Sudhir Chintamani Nilkanth Jatar and Mr. Anil Joshi, the Independent Directors, fulfills the conditions specified in the Companies Act, 2013 and the Rules made thereunder and they are independent of the Management.

The Board considers that their continued association would be of immense benefit to the Company and it is desirable to continue to avail the services of Mr. Radheyshyam Dalchand Agarwal, Maj. Gen. Sudhir Chintamani Nilkanth Jatar and Mr. Anil Joshi as Independent Directors and accordingly recommend their appointment/confirmation.

Changes after the balance sheet date: Pursuant to the provisions of Section 149 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mrs. Ramabai Venugopal Dhoot was appointed as an Additional Director (Promoter, Non-Executive) of the Company w.e.f. 28th February, 2015.

The Company has also received a notice in writing along with requisite deposit, from a member under Section 160 of the Companies Act, 2013, signifying its intention to propose candidature of Mrs. Ramabai Venugopal Dhoot for the office of Director of the Company. The Board recommends her appointment.

A brief profile of Mr. Radheyshyam Dalchand Agarwal, Maj. Gen Sudhir Chintamani Nilkanth Jatar, Mr. Anil Joshi and Mrs. Ramabai V Dhoot, nature of expertise in specific functional area, name of other public companies in which they hold directorship and membership/ chairmanship of the committees of the Board of Directors and the particulars of the shareholding as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is appended to the Notice.

LISTING

The equity shares of your Company are listed on the BSE Limited and The National Stock Exchange of India Limited. The Global Depository Receipts and Foreign Currency Convertible Bonds issued by your Company are listed on the Bourse de Luxembourg and Singapore Exchange Securities Trading Limited, respectively

SUBSIDIARY COMPANIES

During the period under review, Videocon Estelle Limited, Videocon Ivory Limited, Videocon Mozambique Rovuma 1 Limited and Unity Power Private Limited ceased to be the subsidiaries of the Company.

As on 31st December, 2014, your Company had 25 subsidiaries (including step down subsidiaries) viz. Applied Energy Private Limited, Chhattisgarh Power Ventures Private Limited, Comet Power Private Limited, Datacom Telecommunications Private Limited, Indigo Energy Private Limited, Jumbo Techno Services Private Limited, Liberty Videocon General Insurance Company Limited, Middle East Appliances LLC, Percept Energy Private Limited, Pipavav Energy Private Limited, Proficient Energy Private Limited, Prosperous Energy Private Limited, Senior Consulting Private Limited, Videocon Australia WA-388-P Limited, Videocon Electronics (Shenzhen) Limited, Videocon Energy Limited, Videocon Energy Brazil Limited, Videocon Global Limited, Videocon Hydrocarbon Holdings Limited, Videocon Indonesia Nunukan Inc., Videocon International Electronics Limited, Videocon JPDA 06-103 Limited, Videocon Mauritius Energy Limited, Videocon Oil Ventures Limited and Videocon Telecommunications Limited.

Ministry of Corporate Affairs, Government of India, vide its General Circular No(s). 2/2011 and 3/2011 dated 8th February, 2011 and 21 st February, 2011, respectively, has granted exemption from attaching the Annual Accounts and other documents of the subsidiary companies with the Balance Sheet of the holding company, subject to fulfillment of certain conditions stipulated therein. The Board of Directors have accorded their consent for not attaching the Balance Sheet of the subsidiary companies. The consolidated financial statements of the Company and all subsidiaries duly audited by its statutory auditors are presented in the Annual Report. The consolidated financial statements have been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement, as prescribed by the Securities and Exchange Board of India.

Further, the following information in aggregate for each subsidiary including subsidiaries of the subsidiaries has been annexed to the consolidated balance sheet:-

(a) capital (b) reserves (c) total assets (d) total liabilities (e) investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation and (j) proposed dividend.

The Company undertakes that the Annual Accounts of the subsidiary companies and the related detailed information of the subsidiary companies shall be made available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. The Annual Accounts of the subsidiary companies shall also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements, based on the Financial Statements received from the subsidiaries, associates and joint ventures, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard 21 on "Consolidated Financial Statements", Accounting Standard 27 on "Financial Reporting of Interests in Joint Ventures" and Accounting Standard 23 on "Accounting for Investments in Associates in Consolidated Financial Statements."

CASH FLOW STATEMENT

The Cash Flow Statement for the period ended 31 st December, 2014, in conformity with the provisions of Clause 32 of the Listing Agreement entered with the Stock Exchanges, is annexed hereto.

AUDITORS

In terms of Section 139 of the Companies Act, 2013 read with the Rules made thereunder, a company can appoint or re-appoint an audit firm as an Auditor of the Company for a maximum of two terms of five consecutive years.

As per Rule 6 of Companies (Audit and Auditors) Rules, 2014 the term for which the Auditors have already acted as Auditors shall be taken into account for calculating tenure of maximum ten years.

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai (Firm Registration No. 105049W) and M/s. Kadam & Co., Chartered Accountants, Ahmednagar (Firm Registration No. 104542W), have completed more than ten years of their appointment as the Auditors of the Company. Therefore, in terms of the provisions of Section 139 of the Companies Act, 2013 read with the Rules made thereunder, M/s. Khandelwal Jain & Co., and M/s. Kadam & Co., can be re-appointed as the Auditors of the Company for a further period of three years, i.e., from the conclusion of this Annual General Meeting i.e. the 25th Annual General Meeting until the conclusion of the 28th Annual General Meeting.

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, have confirmed their eligibility and willingness to accept the office.

The Board recommends their re-appointment for a term of three years from the conclusion of this Annual General Meeting i.e. the 25th Annual General Meeting until the conclusion of the 28th Annual General Meeting (subject to ratification of the appointment by the Members at every Annual General Meeting held after this Annual General Meeting) on such remuneration as may be fixed by the Board of Directors of the Company.

AUDITORS'' REPORT

The Statutory Auditors of the Company have submitted Auditors'' Report, which have certain Qualifications on the Standalone Financial Statements for the period ended on 31st December, 2014.

Management''s Explanation to the Auditors'' Qualifications:

a) In respect of Point No. 4 of the Auditor''s Report on Standalone Financial Statements for the period ended 31st December, 2014,

regarding the extent of realisability of investments made in and advances given to Videocon Telecommunications Limited (VTL), the subsidiary and the consequential effect of the above on assets and liablities as at 31st December, 2014, the explanation of management is as under:

As mentioned in Note No. 40, to the financial statements, the Company has, directly and through its subsidiaries, made investments aggregating to Rs. 65,002.03 Million and also given advances of Rs. 340.46 Million to Videocon Telecommunications Limited (VTL), the subsidiary. The licenses awarded by the Department of Telecommunications (DoT) to VTL to provide Unified Access Services (UAS) in 21 circles in India w.e.f. 25th January, 2008, were quashed by the Hon''ble Supreme Court of India, vide its order and judgment dated 2nd February, 2012. Subsequently, VTL participated in the auction conducted by DoT and has been awarded the Unified Licenses (Access Services) for 6 circles with effect from 16th February, 2013, which are valid for a period of 20 years. VTL has also been allotted spectrum in these 6 circles. VTL is continuing its commercial operations.

VTL has been continuously incurring losses and has huge accumulated losses as at 31st December, 2014. The ability of VTL to continue as a going concern is substantially dependent on its ability to fund its operating and capital expenditure requirements. The management is confident of mobilizing the necessary resources for continuing the operations of VTL as per the business plan.

COST AUDITOR

The Central Government has directed, vide various Orders to conduct a Cost Audit in respect of the specified products viz.,

1. Electrical and Electronic Equipments or Appliances;

2. Machinery and Mechanical Appliances;

3. Glass and Glass Product;

4. Electrical Energy

5. Petroleum Oils - Crude; and

6. Petroleum Gases.

The Board of Directors of the Company have accorded its approval for appointment of Mr. Jayant B. Galande, Cost Accountant in Whole-Time Practice, Aurangabad (Membership Number 5255) as the Cost Auditor of the Company, to conduct Audit of the Cost Accounting Records maintained by the Company for the financial year commencing on 1 st January, 2015 and ending on 3 I st December, 2015, subject to the approval of Central Government.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company. Accordingly, consent of the Members is sought by way of an Ordinary Resolution for ratification of the remuneration amounting to Rs. 1,00,000/- (Rupees One Lac Only) plus applicable service tax and out of pocket expenses payable to the Cost Auditors for financial year commencing on 1 st January, 2015.

In compliance with the provisions of The Companies (Cost Audit Report) Rules, 2011 and General Circular No. 15/2011 issued by Government of India, Ministry of Corporate Affairs, Cost Audit Branch, we hereby submit that the Company has filed the Cost Audit Report for the financial period ended 30th June, 2013 on 24th December, 2013 (due date 27th December, 201 3). As regards financial period ended on 31st December, 2014, the due date for filing the Cost Audit Report is 29th June, 2015 and the Company shall file the same on or before due date.

COMMITTEES OF THE BOARD

Pursuant to the provisions of the Companies Act, 201 3 and provisions of the Listing Agreement, the Company has constituted following Committees:

Audit Committe Nomination and Remuneration Committee Stakeholders'' Relationship Committee Corporate Social Responsibility Committee

Risk Management Committee

The composition, scope and powers of the aforementioned Committees together with details of meetings held during the period under review, forms part of Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report, highlighting the performance and prospects of the Company''s business, forms part of the Annual Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement entered with the Stock Exchanges, Corporate Governance Report forms part of this Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is appended to the Report on Corporate Governance.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the Annual Accounts for the period ended 31st December, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st December, 2014 and of the profit of the Company for the period ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

ACKNOWLEDGEMENT

The Board of Directors would like to thank the Customers, Vendors, Investors, Financial Institutions, Bankers, Business Partners and Government Authorities for their continued support. The Board of Directors also appreciate the contribution made by the employees at all levels for their hard work, dedication, co-operation and support for the growth of the Company

The Board of Directors would also like to thank all stakeholders for the continued confidence and trust placed by them with the Company.

For and on behalf of the Board of Directors of VIDEOCON INDUSTRIES LIMITED

VENUGOPAL N. DHOOT CHAIRMAN & MANAGING DIRECTOR DIN:00092450

Place: Mumbai Date: 15th May, 2015


Jun 30, 2013

Dear Shareholders,

The Directors take pleasure in presenting the Twenty-Fourth Annual Report together with the Audited Accounts and Auditors'' Report for the financial period ended on 30th June, 2013.

PERFORMANCE REVIEW

The performance of the Company, on standalone basis, for the financial period ended on 30th June, 2013, is summarized below:

(Rs.in Million)

Period Ended Year Ended 31st Particulars 30th June, 2013 December, 2011 (18 months) (12 months)

Net Revenue from Operations 181,572.75 126,502.22

Other Income 4,182.66 1,063.12

Total Income 185,755.41 127,565.34

Profit Before Finance Costs, 34,246.52 23,587.25

Depreciation and Tax

Finance Costs 27,148.18 9,777.89

Depreciation and Amortization 8,243.50 6,075.64

Profit/(Loss) Before Tax (1,145.16) 7,733.72

Taxation Expenses (428.84) 2,334 61

Profit/(Loss) for the Period (716.32) 5,399.11

The financial year of the Company was extended by a period of 6 months. The financial year under review accordingly comprises of a period of 18 months commencing from 1st January, 2012 to 30th June, 2013. The figures for the current period are for 18 months as against 12 months in the previous year and hence, are not comparable.

OPERATIONS

CONSUMER ELECTRONICS & HOME APPLIANCES:

The period was a very tough period marked by challenges in both internal and external environment and the Consumer Electronics & Home Appliances Industry was not an exception to this. The performance of the Company was affected due to economic slowdown, which resulted in lower business volumes. Even through thick and thin, the Company was able to deliver a stable performance.

OIL & GAS:

During the period under review, the wholly owned Mauritius based subsidiary named Videocon Mauritius Energy Limited has on 25th June, 2013 executed at Singapore, a Share Sale & Purchase Agreement with ONGC Videsh Limited and Oil India Limited for sale of its 100% stake in Videocon Mozambique Rovuma 1 Limited ("VMRL") for a consideration of US$ 2.475 billion. VMRL holds 10% participating interest in the offshore Area 1 Block in Rovuma Basin in Mozambique (the "Offshore Area 1"), which has series of sizable natural gas discoveries. However, the financial results of the Company for the period do not include any revenue in respect of the same as the said transaction has not been yet consummated.

The Company continues to explore more opportunities in oil and gas sector in pursuance to its corporate objective and strategy to remain actively involved in E&P activities worldwide. The various discoveries and explorations made by the Company and through its wholly owned subsidiaries and/or joint ventures during the period under review have further added to the hydrocarbon resources already established in these Blocks.

BRAZIL

During the period under review, Petroleo Brasileiro SA, the Operator for Sergipe, Espirito Santos and Potiguar concessions, announced various discoveries in these Concessions. These discoveries and explorations further establishes and increases the prospectivity of various basins in which IBV Brasil Petroieo Limitada, a 50:50 joint venture of the Company, through its wholly owned subsidiary Videocon Energy Brazil Limited, with BPRL Ventures B.V., have concessions, adding to the discoveries already established. This further underlines our efforts in Brazil.

During the period under review, the exploration program in ES-M-661 block, BM-ES-24-A concession, in the Espirito Santo Basin, offshore Brazil was successfully completed. Exploration Well 1-ESS-209, known as "Grana Padano" was successfully drilled upto a depth of 2961 meters, in a water depth of 1208 meters by the consortium. Further, drilling of the second well in the area of Barra in the deep waters of the Sergipe-Alagoas Basin was also completed.

During the period under review, the existence of light hydrocarbons in the concession BM-SEAL-11, in ultradeep waters of the Sergipe- Alagoas basin offshore was discovered. This discovery was made during drilling of well 1-BRSA-1083-SES (1-SES-167) informally known as ''Farfan'', situated in a water depth of 2720m, located 109 km from the city of Aracaju, located in ultra deep waters of Sergipe Alagoas Basin. The well proved presence of sandstone reservoirs saturated with light hydrocarbons in the Maastrichtian and Campanian sections with gross pay thickness of 98m in intervals of 4578m to 4605m (net pay of 17 m) and 5321 to 5365m (net pay of 24m) respectively.

After the Balance Sheet date:

Petroleo Brasileiro SA ("Petrobras"), the Operator, confirmed the existence of light hydrocarbons in the Appraisal Well currently drilled in the ''Farfan Discovery Area'', in Concession BM-SEAL-11, in ultradeep waters of the Sergipe-Alagoas basin Offshore. Further, formation test in Well (3-SES-176D) informally known as Farfan#1, the first to evaluate the production capacity of the accumulation located in the concession area BM-SEAL-11, Block SEAL-M-426 in ultra deep waters of the Sergipe-Alagoas basin offshore was completed. Petrobras further confirmed that the test evaluated 30 meters of turbidite sandstones formation and confirmed good reservoir characteristics featuring excellent productivity of good quality oil.

Further, the Wahoo-5 appraisal well in BM-C-30 Concession, wherein Anadarko Petroleum Corporation, USA, through its Brazilian subsidiary, is acting as the Operator, drilled in the eastern flank of the Wahoo structure and encountered more than 200 net feet of high-quality pay in a pre-salt reservoir, with a total hydrocarbon column now established at 460 feet. The drilling result of the well has proved beyond doubt the extent of the Upper Sag pay towards the NE of the Wahoo main structure. During drilling, oil and gas shows have been reported within the Coquina section, below the upper sag.

MOZAMBIQUE

During the period under review, Anadarko Petroleum Corporation, USA ("Anadarko") announced its seventh well in the discovery area offshore Mozambique successfully appraised previous discoveries at Lagosta and Camarao. The Lagosta-2 appraisal well, located about 4.4 miles north of the Lagosta discovery and 5.3 miles south of the Camarao well, encountered 777 total net feet (237 meters) of natural gas pay in multiple zones.

Further, Anadarko also announced the results of its first flow test offshore Mozambique. The Barquentine-2 well flowed at an equipment-constrained rate of 90 to 100 million cubic feet of gas per day (MMcf/d), with minimal pressure drawdown, providing confidence in well designs that are capable of 100 to 200 MMcf/d.

During the period under review, Barquentine-4 well encountered approximately 160 net meters of natural gas pay. The Barquentine-4 well is the ninth successful well in the complex that includes the earlier Windjammer, Barquentine, Lagosta and Camarao discoveries and the five subsequent appraisal wells in the block.

During the period under review, the Golfinho exploration well discovered a new, major natural gas accumulation nearly 20 miles northwest of its Prosperidade complex within the Offshore Area 1 of the Rovuma Basin. The Golfinho discovery well encountered more than 193 net feet (59 net meters) of natural gas pay in two high-quality Oligocene fan system. Further, the Atum exploration well discovered another significant natural gas accumulation within the Offshore Area 1 of the Rovuma Basin. The Atum discovery well encountered more than 300 net feet (92 meters) of natural gas pay in two high-quality Oligocene fan systems. Similarly, The Orca-1 discovery well encountered approximately 190 net feet (58 meters) of natural gas pay in a Paleocene fan system.

After the Balance Sheet date:

Espadarte Well encountered approximately 280 net feet of natural gas pay in Oligocene and Miocene sands.

Also, Golfinho-5 and Golfinho-6 wells drilled in Mozambique during the third quarter 2013, encountered approximately 330 net feet and approximately 240 net feet pay of natural gas pay, respectively.

TELECOM:

Videocon Telecommunications Limited (VTL), a subsidiary of the Company had been awarded licenses by the Department of Telecommunications ("DoT") to provide Unified Access Services ("UAS") in 21 telecom circles in India with effect from 25th January, 2008 which were valid for a period of 20 years. VTL had also been allocated spectrum in 20 circles and had launched its commercial operations in 17 circles.

The Hon''ble Supreme Court of India, vide its order and judgment dated 2nd February, 2012 ("Judgment") in two separate writ petitions, quashed the UAS licenses granted on or after 10th January, 2008 pursuant to two press releases issued on 10th January, 2008 and the subsequent allocation of spectrum to

licensees which included the 21 UAS licenses issued and allocation of spectrum to VTL. The Hon''ble Supreme Court of India''s judgment reasoned that the allocation of 2G spectrum pursuant to the UAS License was unconstitutional and arbitrary. The order quashing the UAS licenses and the allocation of spectrum was to be operative after four months from the date of the Judgment. By subsequent orders dated 24th April, 2012 and 27th August, 2012, the Hon''ble Supreme Court directed that the licensees whose licenses had been cancelled were to continue their operations until 18th January 2013. This order was modified by a subsequent order dated 15th February 2013, whereby it was directed that the licensees have to stop operations with immediate effect.

The Hon''ble Supreme Court of India vide its Judgment had also directed the Central Government to grant fresh UAS licenses and spectrum allocation by auction. The DoT, had issued a Notice Inviting Applications (bearing file no. 3-16/2012- Fin./Auction) dated 28th September, 2012 for auction of spectrum in 1800 MHz and 800 MHz bands.

VTL participated in the aforesaid auction and was declared as a successful bidder of spectrum in six circles in 1800 MHz, namely, Bihar, Gujarat, Haryana, Madhya Pradesh, Uttar Pradesh (East) and Uttar Pradesh (West). On 3rd March, 2013, VTL was awarded the Unified Licenses (Access Services) for these six circles with effect from 16th February, 2013 which are valid for a period of 20 years. VTL has also been allotted 5Mhz spectrum in 1800Mhz category in each of these 6 circles out of which, VTL is already providing its commercial services in 3 circles i.e. Gujarat, Haryana and Madhya Pradesh.

By the order dated 15th February, 2013, the Hon''ble Supreme Court of India has, inter-alia, held that the successful applicants in the auction should be allowed to operate in those circles in which they have been successful. VTL is continuing its commercial operations in 3 circles viz. Gujarat, Haryana and Madhya Pradesh. VTL shall be launching, subject to receipt of the necessary approvals from DoT, its commercial operations in remaining 3 circles viz. Bihar, Uttar Pradesh (East) and Uttar Pradesh (West) shortly.

POWER:

5.75 MWp Solar Photovoltaic Power Project commissioned by the Company in October, 2011 at Village: Majra, Taluka: Warora, Dist.: Chandrapur, Maharashtra; 5.75 MWp Solar Photovoltaic Power Project commissioned by Comet Power Private Limited, a step down subsidiary of the Company; and 5.50 MWp Solar Photovoltaic Power Project commissioned by Unity Power Private Limited, a step down subsidiary of the Company; are operating at full capacities and are generating electricity.

There are two 1,200 MW coal-fired thermal electricity power projects which are under development. These projects are being undertaken by Pipavav Energy Private Limited and Chhattisgarh Power Ventures Private Limited, the subsidiaries of the Company in the state of Gujarat and Chhattisgarh respectively.

INSURANCE:

Your Company has entered into a joint venture with USA headquatered global insurance company, Liberty Mutual Insurance Group to setup a non-life insurance business in India. As per prevailing FDI Guidelines for the Insurance sector in India, Liberty

Mutual Insurance Group will for the present hold a maximum of 26.0% of the equity interest in the new joint venture and our Company will hold a minimum of 74.0%. The Joint Venture Company, Liberty Videocon General Insurance Company Limited, has received the Certificate of Registration to operate as a General Insurance Company from the Insurance Regulatory and Development Authority (IRDA), under Section 3 of the Insurance Act, 1938, in July, 2012.

Currently, our Company is holding 77.90% equity stake in the Joint Venture Company.

Post receipt of the necessary license from IRDA to commence its operations and after the requisite set up of manpower, technology, distribution arrangements & product approvals from IRDA, the Joint Venture Company has launched the Non-Life Insurance business in India in January, 2013. It has now commenced business operations from 8 branches across India and plans to expand its product suite and geographical presence nationally.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 21- (Rupees Two only) per equity share, to the Non-Promoter Shareholders (Public Shareholders).

The dividend, if approved, by the shareholders, will entail a payout of Rs. 232.55 Million including dividend distribution tax of Rs. 33.78 Million.

Your Directors recommend 8% dividend on the preference shares for the period ended 30th June, 2013.

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

TRANSFER TO RESERVES

Your Directors propose to transfer Rs. 300.00 Million to the General Reserve, Rs. 155.96 Million to Capital Redemption Reserve and Rs. 1,909.34 Million to Bond/Debenture Redemption Reserve.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs. 15.39 Million in respect of unpaid /unclaimed dividend for the Financial Year 2004-05 to the Investor Education And Protection Fund.

ISSUES/ALLOTME

During the period under review, the Company has allotted 15,750,000 equity shares of face value of Rs.10/- each, represented by the issue of 15,750,000 Global Depository Receipts at a price of US$ 3.2395 per GDR, equivalent to Rs. 174/- per equity share, aggregating to US$ 51.02 Million to LLIC S.a.r.l., on a private placement basis.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposit within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

ERSONNEL

A statement of the particulars of employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is annexed and forms part of this Report.

CONSERVATION OF ENERGY

Sustainable development is an integral part what your Company does. Your Company''s commitment to sustainable development is reflected in its ambitious targets to reduce consumption footprints in energy, water and waste. Your Company has shifted energy management parameters from the ''can do'' alternative to the ''must do''. It strives to conserve energy on a perpetual basis in order to meet the future demands.

Your Company is striving continuously to conserve energy by adopting innovative measures to reduce wastage and optimize consumption. Some of the specific measures undertaken are:

- Mutual utilization of energy among adjacent factories and workplaces/inter-industry collaboration;

- Development of practical application of technologies to rationalize energy utilization;

- Lighting energy savers have been installed at various units which have led to significant savings in power usage;

- Installation of astronomical digital timers, occupancy sensors for better lighting control;

- Use of natural air ventilators which does not consume power;

- Induction of Energy Audit at the manufacturing facilities;

- Rain water harvesting to reduce water consumption at factory;

- Installation of Energy Efficient Motors at all the manufacturing units;

- Introduction of additional machinery with improved technology which results in reducing the cycle time and power saving;

- Increased awareness among the employees through visual management;

- Conducting energy saving training sessions;

- Replacement of pneumatic tools by energy efficient electrical tools and converted continuous power to intermittent power consumption; and

- Use of hi-tech energy monitoring appliances and conservation systems to monitor usage, minimize wastage and increase overall efficiency at every stage of power consumption.

The adoption of the above energy conservation measures have helped to curtail the proportionate increase in total energy usage consequent to overall increase in production. This has made it possible to maintain cost of production at optimum levels.

During the period under review:

- Your Company was conferred with the prestigious National Energy Conservation Award for 2011 by the Bureau of Energy Efficiency (BEE), a part of the Central Electricity Authority, Ministry of Power, Government of India.

- Your Company has been awarded the first prize in the Manufacturers of BEE Star Labeled Appliances (Refrigerator) sector for strict adherence to the BEE standards set up by the Bureau of Energy Efficiency. The Award for 2011 was given by honorable Union Minister for Power.

RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Research & Development (R & D) is a scientific investigation that explores the development of new goods and services, new inputs into production, new methods of producing goods and services, or new ways of operating and managing organizations.

"Research" aims to generate knowledge in the hope that it will help create or improve a product, process or service. "Development" converts research findings or other knowledge into a new or improved product, process or service.

In concrete terms, R&D brings new knowledge and processes to a business, the new higher value-added products, processes and services that company needs in order to thrive in a knowledge intensive market.

R&D allows your Company to participate in new markets and industries and offer their customers new or improved products, processes and services.

In order to compete with the ever changing market and to fetch the benefits of technological advancement, your Company has set up a dynamic and active R&D Centre. The R&D Centre has qualified staff working continuously on new products, process etc.

Your Company has launched number of products in Consumer Electronics Industry with a wide range of Refrigerators, Washing Machines, Air Conditioners, Televisions, etc.

R&D involves constant revitalization of knowledge and expertise, and could result in developments such as:

- New / Improved products;

- Improved operational process;

- Meeting the changing requirements of customers;

- Cost reduction;

- Meeting the changing social and environmental needs; and

- Maintenance of quality.

R&D activities carried out in various consumer electronics products and benefits derived from these activities:

- Development and production of Digital Direct Broadcast (DDB) technology in India with a broader convergence of TV, D2H, Internet and Cloud Computing.

- DDB TV with single chip solution with built in DTH facility having MPEG4 DVB-S2 digital signal. Customer can enjoy the unmatched picture & audio quality of LCD/LED TV. This product has various features such as Dual Core Processor, 14-Bit Video Processor, Faroudja Video and Audit Optimization, 10-Band Graphics Equalizer, STRATA certified audio, Flicker Free 3D, 2D to 3D conversion, Internet etc.

- The large screen LED TVs i.e. 80", 65", 58", 55" LED TVs have been launched with the incredible DDB Technology.

- 58" cinema scope TV having an aspect ratio of 21:9 which is altogether a different segment than the conventional LED TVs. It enables users to experience a theatre like environment at home.

- Your Company has set a platform for "Internet TV" based on Android Operating System having DTH facility. This advancement completes the need of today with digital signal reception and internet accessibility. This platform gives freedom for live chatting, video conferencing, browsing, email accessing etc.

- PIXUS LED is again advancement in display technology which has direct LEDs in it instead of complete display unit. This integrated module is a revolutionary product which has more colours, vivid pictures and.better viewing angle. The in-house designed audio system "BOOM BOX" adds much value to this TV.

- Metallica Series: As aesthetical advancement in display technology, the real metal finish LED has altogether a sophisticated look with advance TV algorithms for vivid picture and sound. The lustrous look and slim design has made them pioneers in market.

- Introduction of Digi Gracia Series of 6.5kg, 6.0kg, 5.5kg FA Washing Machines with 10 Wash Programs, 10 Water levels, rinse hold feature resulting in less water consumption.

- Introduction of Digi Rio series of 6.5kg FA Machines with 8 Wash Programs, 8 Water levels, Child lock feature and Special Air Dry feature.

- Introduced Digi Pearl series of 6.5kg FA Machines with 10 Wash Programs, 10 Water levels, Air Dry features, Eco wash program.

- Introduction of designer series in Semi Auto and Fully automatic washing machines with blazing colour in the Semi auto & fully auto category.

- Introduced India''s first 9 Wash and 9 Spin Program in Semi- Automatic Washing Machine.

- Introduced India''s first 4 Wash Program Semi-Automatic Washing Machine.

- Introduced various Air Conditioners with various features viz, auto clean function, introduction of PFC or MC condenser. Vita Air Technology, Vitamin C Filters, Gold and Blue Fin evaporator etc.

- Launched various models of refrigerators with smart features such as digital sensor, electronic display control, new looks etc.

Future plan of action:

In near future, the Company shall focus on environment friendly products and also focus efforts on new technologies which could offer better products in the domestic as well as international market. The Company has the following plans through R&D:

- Introducing new technology called 4K2K or Ultra HD TV. 4K2K in short is 4 times High Definition pixel image and the term 4K refers to the horizontal resolution of formats which are all on the order 4,000 pixels;

- Increase in the market share and enhance the Brand Value; and

- Bring in best features of various products together.

During the period under review, the Company has incurred Rs. 155.46 Million, representing 0.08% of the turnover towards recurring R&D expenses.

HEALTH & SAFETY

Safety is an area of paramount Importance in your Company. A well defined occupational health and safety management system is in place to ensure the safety of employees, workforce as well as equipment and machinery. Your Company continues to exhibit a robust assurance towards Safety, Health and Environment during the period under review. Some of the initiatives, measures taken by your Company for building healthy work culture are:

- Recognition of its human capital by opting for life insurance cover, medical and other welfare covers for the employees that it has purchased to protect its employees against various risks - those of health, disability, accident etc;

- Use of guards and engineering solutions wherever possible instead of relying on PPE (Personal Protective Equipments);

- Provision of health and medical services to all the employees at all levels through well- equipped health centers located at all manufacturing plants;

- Implementation of Human Injury Reporting System to report all types of human injury and to find out the root cause;

- Introduction of new materials and equipments to eliminate various hazards at workplace;

- Regular counseling and medical checkups to ensure fitness of its employees;

- Arranging different seminars and events at workplace to create awareness among the employees for hygiene and cleanliness;

- Displaying of notices and information on the Notice Boards at all work stations for information and awareness of employees;

- Introduction of Basic First Aid Course and demonstration of Fire Extinguisher Courses conducted for the employees and security guards;

- Installation of fire blankets at security check point for every department;

- Provision of emergency exit door on all shop floor areas so as to reach safe assembly points in case of emergency;

- Provision of such information, instruction, training and supervision as necessary to ensure the health and safety of all workers at work;

- Arrangements at manufacturing plants for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances;

- Provision and maintenance of effective drainage system;

- Effective and suitable provision in every workroom for securing and maintaining the adequate ventilation by circulation of fresh air;

- Provision of vaccination facilities for contagious diseases;

- Display of emergency evacuation plans with location of fire extinguisher;

- Provision of modern amenities at manufacturing units to meet strict requirements of efficient servicing and smooth functioning at all times;

- Compliance with the legal requirement of Directorate of Industrial Safety & Health (DISH), Chief Fire Office etc.;

- Night Manager concept for vigilance of the overall campus; and

- Conducting Safety Committee Meeting to strengthen the safety.

ENVIRONMENTAL PROTECTION

Environmental protection is an increasingly vital issue all over the world. Ozone depletion, green house effect, global climate changes or global warming, etc, are the main issues in environment. Your Company believes that it is the responsibility of the Company to maintain ecological balance for sustainable development.

Your Company is committed to Green Initiative wherein it has established a green management goal for significantly reducing greenhouse gases and launching eco friendly products.

Your Company continues to strive to address matters related to Environmental Protection through a variety of initiatives like:

- Preparation of manual, codes and guides relating to prevention, control or abatement of environmental pollution;

- Collection and dissemination of information among employees in respect of matters relating to environmental pollution;

- Implementation of 3R System - Reduce, Reuse and Recycle for the optimum utilization of natural resources;

- Examination of manufacturing processes, materials and substances and replacement thereof, if any, that are likely to cause environmental pollution;

- Emission of pollution as per the standards prescribed by Central Pollution Control Board (CPCB);

- Celebration of Vanamohatsava (Annual Festival for Tree Plantation) and World Environment Day to increase mass awareness among the employees;

- Adoption of Industrial Waste Management Program and Pollution Under Control (PUC) camps for the benefit of the environment;

- Manufacturing facilities at various plants are certified to ISO 14001 standards;

- Organizing various events and seminars for environmental awareness; and

- Upgradation of automated sewage treatment and effluent treatment plants.

Your Company is in compliance of e-waste rules and guidelines and has a tie up on all India basis, with authorized recycler for collection and disposal of e-waste products. The Company has taken the initiative to spread awareness regarding e-waste management and its handling and disposal through print media, social sites, advertisement campaign by way of putting standee-educating the dealers and the end consumers.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of Foreign Exchange Earnings and Outgo during the financial period ended on 30th June, 2013 are set out hereunder:

(Rs. In Million)

Period ended Year ended

Particulars 30th June, 2013 31st December, 2011

(18 months) (12 months)

Foreign Exchange Earnings 9,851.76 3,840.53

Foreign Exchange Outgo 26,193.13 16,745.84

INFORMATION TECHNOLOGY

Your Company continues to invest in Information Technology (IT) leveraging it as a source of competitive advantage.

A good IT infrastructure in the Company is absolutely necessary for complying with the regulatory or safety norms, to improve performance and quality via real-time process monitoring, and finally, improve reliability via appropriate maintenance, driven by up-to-date information on equipment status.

The Company has adopted "Digital Nervous System" for sustaining the cut throat competition for the "Numero Uno" position in any sector of economy. Your Company has upgraded its existing facilities with improved technology for customers like call centers, connect through SMS, Websites so on to have best and speedy customer interaction. Your Company has put in place an enabled Consumer Interaction Centre for addressing complaints and suggestions from consumers, retailers and distributors.

Through the latest version of SAP Solutions your Company has leveraged the benefits like accelerate innovation, produce high- quality products at high profit margins, reduce the cost and effort of compliance, integration in business operations, optimization of enterprise resources, standardized business processes and standard operating practices with well established controls.

Your Company has introduced Sales Transformation & Enhancement Program (STEP), an innovative & customized in- house developed sales tool for providing day to day information required by sales force on the field.

This tool helps improving efficiency, enhance ability & productivity of sales force, leading to long term business sustainability and customer delight.

GPS Tracker, an integral part of STEP tool, uses strength of Android GPS technology GPRS coverage to deliver a high performance enable tool for the sales force. This gives visibility of Sales force on ground, dealer network etc.

CORPORATE SOCIAL RESPONSIBILITY

Contribution to Society is one of the core values of the Company. Corporate Social Responsibility (CSR) encompasses within itself sustainability which means creating an awareness of climate change and social imbalance and demands suitable actions for its enhancement. The Company is continuously reviewing its efforts towards improving the quality of life of the communities it serves.

It is not only important for organizations to formulate CSR strategies but also important to make the employees adapt the same. The human resource department and corporate social responsibility are closely interrelated with each other.

Your Company believes that while profit is important for all businesses, profit cannot be the only reason for the existence. Profits help to achieve mission while contributing to the society. Your Company conducts its business in a sustainable and socially responsible manner. This principal is an integral part of your Company''s corporate values. The Company continues to impact the lives of people through relentless CSR initiatives. Your Company has put in place the strategy including CSR priorities and actions for improvement everywhere in the organization.

Your Company ensures to remain in a constant dialogue with customers, suppliers and other parties which enable the Company to explore new business opportunities and it shall continue to discharge its CSR in the best possible manner.

APPOINTMENT AND RE-APPOINTMENT OF DIRECTORS

During the period under review, Mr. Karun Chandra Srivastava, Director of the Company resigned from the Board of the Company w.e.f 1st February, 2012. Mr. Girish K. Nayak - Nominee of ICICI Bank Limited ceased to be the Director of the Company w.e.f. 14th February, 2012, consequent to withdrawal of his nomination by ICICI Bank Limited. Further, during the period, Mr. Pradipkumar N. Dhoot, Whole-Time Director of the Company resigned from the Board of the Company w.e.f. 14th August, 2012.

The Board places its sincere appreciation towards the valued contribution received from Mr. Karun Chandra Srivastava, Mr. Girish K. Nayak and Mr. Pradipkumar N. Dhoot, during their tenure as the Directors of the Company.

During the period under review, Mr. S. Ananthakrishnan was co- opted as a Nominee Director of IDBI Bank Limited on the Board of the Company w.e.f 29th February, 2012. However, Mr. S. Ananthakrishnan, ceased to be the Director of the Company w.e.f 13th June, 2013, consequent to withdrawal of nomination by IDBI Bank Limited. Mr. B. Ravindranath was nominated in place of Mr. S. Ananthakrishnan.

Changes after the Balancesheet Date:

Mr. S. P. Talwar ceased to be the Director of the Company w.e.f 9th August, 2013, on account of his sad demise. The Board would like to express its deep condolence towards the sad demise of Mr. S. P. Talwar, and also expresses its heartfelt gratitude towards the contribution made by Mr. S. P. Talwar during his tenure.

Pursuant to the provisions of Section 255, 256 of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Mr. Anil G. Joshi and Mr. S. Padmanabhan are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. The Board recommends their re-appointment.

Brief profiles of Mr. Anil G. Joshi and Mr. S. Padmanabhan, specifying their expertise in specific functional area, other public companies in which they hold directorships and committee positions, is annexed to the Notice and forms part thereof.

LISTING

The equity shares of your Company are listed on the BSE Limited (Formerly: the Bombay Stock Exchange Limited) and The National Stock Exchange of India Limited (NSE). The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed on the Bourse de Luxembourg and Singapore Exchange Securities Trading Limited respectively.

SUBSIDIARY COMPANIES

As on 30th June, 2013, your Company had 29 subsidiaries (including step down subsidiaries) viz. Applied Energy Private Limited, Chhattisgarh Power Ventures Private Limited, Comet Power Private Limited, Datacom Telecommunications Private Limited, Indigo Energy Private Limited, Jumbo Techno Services Private Limited, Liberty Videocon General Insurance Company Limited, Middle East Appliances LLC, Percept Energy Private Limited, Pipavav Energy Private Limited, Proficient Energy Private Limited, Prosperous Energy Private Limited, Senior Consulting Private Limited, Unity Power Private Limited, Videocon Australia WA- 388-P Limited, Videocon Electronics (Shenzhen) Limited, Videocon Energy Limited, Videocon Energy Brazil Limited, Videocon Estelle Limited, Videocon Global Limited, Videocon Hydrocarbon Holdings Limited, Videocon Indonesia Nunukan Inc., Videocon Ivory Limited, Videocon International Electronics Limited, Videocon JPDA 06-103 Limited, Videocon Mauritius Energy Limited, Videocon Mozambique Rovuma 1 Limited, Videocon Oil Ventures Limited and Videocon Telecommunications Limited.

Ministry of Corporate Affairs, Government of India, vide its General Circular No(s). 2/2011 and 3/2011 dated 8th February, 2011 and 21st February, 2011, respectively, has granted exemption from attaching the Annual Accounts and other documents of the subsidiary companies with the Balance Sheet of the holding company, subject to fulfillment of certain conditions stipulated therein. The Board of Directors have accorded their consent for not attaching the Balance Sheet of the subsidiary companies. The consolidated financial statements of the Company and all subsidiaries duly audited by its statutory auditors are presented in the Annual Report. The consolidated financial statements have been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India.

Further, the following information in aggregate for each subsidiary including subsidiaries of the subsidiaries has been annexed to the consolidated balance sheet:-

(a) capital (b) reserves (c) total assets (d) total liabilities (e) investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation and (j) proposed dividend.

The Company undertakes that the Annual Accounts of the subsidiary companies and the related detailed information of the subsidiary companies shall be made available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. The Annual Accounts of the subsidiary companies shall also be kept open for inspection by any shareholder at the Registered Office of the Company and that of the respective subsidiary companies. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements, based on the Financial Statements received from the subsidiaries, associates and joint ventures, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard 21 on "Consolidated Financial Statements", Accounting Standard 27 on "Financial Reporting of Interests in Joint Ventures" and Accounting Standard 23 on "Accounting for Investments in Associates in Consolidated Financial Statements."

CASH FLOW STATEMENT

The Cash Flow Statement for the period ended 30th June, 2013, in conformity with the provisions of Clause 32 of the Listing Agreement with the Stock Exchanges in India, is annexed hereto.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, Statutory Auditors of the Company, retire at the conclusion of ensuing Annual General Meeting and have confirmed eligibility and willingness to accept office, if re-appointed. The Company has received certificates from the said Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDITORS'' REPORT

The Statutory Auditors of the Company have submitted Auditors'' Report, which have certain Qualifications on the Standalone and Consolidated Financial Statements for the period ended on 30th June, 2013.

Management''s Explanation to the Auditors'' Qualifications:

a) In respect of Point No. 4(f) of the Auditor''s Report on Standalone Financial Statement for the period ended 30th June, 2013, regarding the extent of realisability of investments made in and advances given to Videocon Telecommunications Limited (VTL), the subsidiary, the explanation of management is as under:

The Company has, directly and through its subsidiaries, made investments aggregating to Rs. 49,337.50 Million and also given advances of Rs. 782.74 Million to Videocon Telecommunications Limited (VTL), the subsidiary. VTL was granted the license for providing Unified Access Services (UAS) in 21 circles by the Department of Telecommunications, Government of India (DoT) in 2008 and was also allotted spectrum in 20 circles. The Hon''ble Supreme Court of India, vide its judgment dated 2nd February, 2012, quashed all the UAS licenses granted on or after 10th January, 2008 and the subsequent allocation of spectrum to these licensees, which also include the 21 UAS licenses granted to VTL and the spectrum allotted to it. The Hon''ble Supreme Court of India, also directed the Telecom Regulatory Authority of India (TRAI) to make fresh recommendations for grant of licenses and allocation of spectrum and the Central Government to grant fresh licenses and allocation of spectrum by auction thereafter.

The Central Government conducted the auction of spectrum in November, 2012. VTL participated in the auction and has been declared as a successful bidder in 6 circles and has been awarded spectrum in these circles. VTL is continuing its business as a going concern. As VTL has huge accumulated losses, its ability to continue as going concern is dependent on its ability to fund its operating requirements. VTL is confident of mobilizing necessary resources for continuing its operations as per the business plan. Accordingly, in the opinion of the management, no provision is required for diminution in the value of aforesaid investments and advances to VTL.

b) In respect of Point No. 6 of Auditors'' Report on Consolidated Financial Statement regarding the recognisation of Deferred Tax Assets by the Subsidiary VTL, the explanation of management is as under:

The Subsidiary, VTL has evaluated its future taxable income after it has been awarded the Unified Licenses (Access services) in six circles with effect from 16th February 2013 which are valid for a period of 20 years and also been allotted 5Mhz spectrum in 1800 Mhz category in each of these six circles. The management is of the opinion that there is a virtual certainty, based on the future business plan, estimated increase in subscribers base and considering additional capital infusion into the Company which would restrict further borrowings and related costs, that sufficient future taxable income will be available against which the deferred tax assets can be realized. Accordingly, the Subsidiary VTL has recognized net deferred tax assets of Rs. 11,583.48 Million on the unabsorbed depreciation and business losses.

COST AUDITOR

The Central Government has directed, vide various Orders to conduct a Cost Audit in respect of the specified products viz.,

1. Refrigerator;

2. Petroleum Products - Oils & Gas;

3. Electrical Energy; and

4. Glass and Glass Product.

The Board has accorded its approval for the re-appointment of Mr. Sudhir C. Sant, Cost Accountant in Whole-Time Practice, Pune, having Membership Number 7836, as the Cost Auditor of the Company, to conduct Audit of the Cost Accounting Records maintained by the Company for the financial year 2013-14, subject to the approval of Central Government.

In accordance with the provisions of The Companies (Cost Audit Report) Rules, 2011 and General Circular No. 15/2011 issued by Government of India, Ministry of Corporate Affairs, we hereby submit that the Company has filed the Cost Audit Report for the financial year ended 31st December, 2011 on 30th January, 2013 (due date 28th February, 2013).

As regards filing of the Cost Audit Report for the financial period ended on 30th June, 2013, the due date for filing the Cost Audit Report is 27th December, 2013 and the Company shall file the same on or before due date.

AUDIT COMMITTEE

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of the Audit Committee together with details of meetings held during the period under review, forms part of Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report, highlighting the performance and prospects of the Company''s business, forms part of the Annual Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report forms part of this Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is appended to the Report on Corporate Governance.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that;

a) in the preparation of the Annual Accounts for the period ended 30th June 2013, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2013 and of the loss of the Company for the period ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

ACKNOWLEDGEMENT

The Board of Directors would like to thank the Customers, Vendors, Investors, Financial Institutions, Bankers, Business Partners and Government Authorities for their continued support. The Board of Directors also appreciate the contribution made by the employees at all levels for their hard work, dedication, co-operation and support for the growth of the Company.

The Board of Directors would also like to thank all stakeholders for the continued confidence and trust placed by them with the Company. For and on Behalf of the Board of Directors of

VIDEOCON INDUSTRIES LIMITED

VENUGOPAL N. DHOOT

CHAIRMAN & MANAGING DIRECTOR

Place : Mumbai

Date : 29th November, 2013


Dec 31, 2011

The Directors take pleasure in presenting the Twenty-Third Annual Report together with the Audited Accounts and Auditors' Report for the financial year ended on 31st December, 2011.

PERFORMANCE REVIEW

The performance of the Company, on standalone basis, for the financial year ended on 31st December, 2011, is summarized below:

(Rs in Million) Year ended Period ended Particulars 31st Dec., 2011 31st Dec., 2010 (12 Months) (15 Months)

Net Sales 126,502.22 144,096.91

Other Income 1,063.12 429.86

Total Income 127,565.34 144,526.77

Profit before Interest, 23,587.25 26,565.60 Depreciation and Tax

Interest and Finance charges 9,777.89 8,931.56

Depreciation, Amortization and 6,075.64 7,129.62 Impairment

Profit Before Tax 7,733.72 10,504.42

Provision for Taxation 2,278.14 3,057.48

Profit after Tax 5,455.58 7,446.94

The figures for the current year are for a period of 12 months as against 15 months in the previous period and hence, are not comparable.

OPERATIONS CONSUMER ELECTRONICS & HOME APPLIANCES

During the year under review, your Company was able to post a stable performance in the consumer electronics and home appliances segment. However, the margins were under pressure in view of increase in the cost of raw materials and components and intense competition.

OIL & GAS

Your Company intensified its exploratory efforts. These efforts paid good dividends in terms of new discoveries and reserve accretion.

BRAZIL

21st September, 2011

Petrobras, the Operator of the BM-SEAL- 11 Concession in the Sergipe Basin announced that the presence of oil and gas accumulations, confirmed after completing the drilling, logging, sampling fluid in a formation testing operations at Barra well (1-SES-158) with the presence of excellent reservoirs with good porosities and permeabilities at several depths.

MOZAMBIQUE

7th February, 2011

Anadarko announced the latest in a string of major deepwater natural gas discoveries off the coast of Mozambique. The Tubarao discovery well encountered more than 110 net feet of natural gas pay.

22nd August, 2011

Anadarko announced that the Barquetine - 2 appraisal well, located in Mozambique's Offshore Area 1 of the Rovuma Basin, encountered more than 230 net feet (70 meters) of natural gas pay in high quality Oligocene- age reservoirs. Barquetine - 2 was the first appraisal well in the Windjammer, Barquentine and Lagosta complex, which is estimated to hold a minimum of 6 trillion cubic feet (Tcf) of recoverable natural gas resources.

5th October, 2011

Anadarko announced that the appraisal section of most recent exploration well at the Camarao prospect encountered approximately 240 net feet (73 meters) of natural gas pay in an excellent quality reservoir and confirmed static pressure connectivity with the partnerships' previously announced Windjammer and Lagosta discoveries. In addition, the Camarao well discovered approximately 140 net feet (43 meters) of natural gas pay in shallower Miocene and Oligocene sand packages not encountered in previous wells.

28th November, 2011

Barquetine-3 appraisal well encounters more than 662 net feet (202 meters) of natural gas pay in two high-quality Oligocene-aged fan systems, significantly expanding the estimated recoverable resource range to 15 to 30 trillion cubic feet (Tcf) of natural gas, with an estimated 30 to 50 Tcf of natural gas in place.

Post Balance Sheet date

17th January, 2012

Anadarko announced its seventh well in the discovery area offshore Mozambique successfully appraised previous discoveries at Lagosta and Camarao. The Lagosta-2 appraisal well, located about 4.4 miles (7 kilometers) north of the Lagosta discovery and 5.3 miles (8.5 kilometers) south of the Camarao well, encountered 777 total net feet (237 meters) of natural gas pay in multiple zones.

12th March, 2012

Anadarko announced the results of its first flow test offshore Mozambique. The Barquentine-2 well flowed at an equipment - constrained rate of 90 to 100 Million cubic feet per day (MMcf/d), with minimal pressure drawdown, providing confidence in well designs that are capable of 100 to 200 MMcf/d.

4th April, 2012

Anadarko announced the success of the Barquentine-4 appraisal well which encountered approximately 160 net meters of natural gas pay.

15th May, 2012

Anadarko announced that Golfinho exploration well discovered a new, major natural gas accumulation nearly 20 miles (32 kilometers) northwest of its Properidade complex within the Offshore Area 1 of the Rovuma Basin. The Golfinho discovery well encountered more than 193 net feet (59 net meters) of natural gas pay in two high-quality Oligocene fan systems that are age- equivalent to, but geologically distinct from, the previous discoveries in the Prosperidade complex.

TELECOM

Videocon Telecommunications Limited (VTL), a subsidiary of the Company, was granted Unified Access Services (UAS) Licenses in 21 circles and had also been allotted spectrum in 20 circles out of which it has launched its services in 16 circles.

The Hon'ble Supreme Court of India, vide its judgment dated 2nd February, 2012, in two separate writ petitions filed by Centre for Public Interest Litigations and by another, has quashed all the UAS Licenses granted on or after 10th January, 2008, pursuant to two press releases issued on 10th January, 2008 and the subsequent allocation of spectrum to the licencees. This includes 21 Licenses issued to the VTL and the spectrum allotted to it in 20 circles. The Hon'ble Supreme Court of India further directed that its Order of quashing the Telecom Licenses and the allocation of the spectrum shall be operative after four months from 2nd February, 2012. On 24th April, 2012, the Hon'ble Supreme Court of India modified its Order and postponed the operation of its Order of quashing of the Telecom Licenses and the allocation of the spectrum to 7th September, 2012. The Hon'ble Supreme Court of India had also directed, in its Judgement of 2nd February, 2012, Telecom Regulatory Authority of India (TRAI) to make fresh recommendations for grant of Licences and allocation of spectrum (TRAI has since issued its recommendations on 23rd April, 2012) and the Central Government to grant fresh Licenses and allocation of spectrum by auction thereafter. The Central Government has announced that it will complete the auction of Licenses and allocation of spectrum on or before 31st August, 2012. VTL has decided to participate in such auction.

POWER

The Company commissioned 5.75 MWp Solar Photovoltaic Power Project at Village Majra, District Warora, Maharashtra, in the month of October 2011.

Comet Power Private Limited, a step down subsidiary of the Company, commissioned 5.75 MWp Solar Photovoltaic Power Project at Village Betwasiya, Osiyan, District Jodhpur, Rajasthan, in the month of October 2011.

Unity Power Private Limited, a step down subsidiary of the Company, commissioned 5.50 MWp Solar Photovoltaic Power Project in the State of Gujarat, in the month of January, 2012.

There are two 1,200 MW coal-fired thermal electricity power projects which are under development. These projects are being undertaken by Pipavav Energy Private Limited and Chhattisgarh Power Ventures Private Limited, the subsidiaries of the Company in the state of Gujarat and Chhattisgarh respectively.

INSURANCE

Your Company has entered into a joint venture with USA headquartered Liberty Mutual Insurance Group to setup a non-life insurance business in India. As per prevailing FDI Guidelines for the Insurance sector in India, Liberty Mutual Insurance Group will for the present hold a maximum of 26.0% of the equity interest in the Joint Venture Company and our Company will hold a minimum of 74.0%. The Joint Venture Company, Liberty Videocon General Insurance Company Limited, has received the Certificate of Registration as a General Insurance Company from the Insurance Regulatory and Development Authority (IRDA), under Section 3 of the Insurance Act, 1938.

As on the Balance Sheet date, the Joint Venture Company, was a wholly owned subsidiary of the Company. However, currently, the Company is holding 79.41% equity stake in the Joint Venture Company.

ISSUES / ALLOTMENT

During the year under review, the Company has allotted 1,058,035 equity shares of Rs 10/- each at a conversion price of Rs 239.5265 per equity share, upon conversion of Foreign Currency Convertible Bonds. The details of conversion are set out hereunder:

Sr. Date of Allotment No. of equity Principal Amount No shares allotted (US $)

1. 27th July, 2011 491,230 2.6 Million

2. 22nd August, 2011 188,935 1.0 Million

3. 31st October, 2011 377,870 2.0 Million

Material changes Post Balance Sheet date:

On 22nd May, 2012, the Company has allotted 15,750,000 equity shares of face value of Rs 10/- each, represented by the issue of 15,750,000 Global Depository Receipts at a price of US $ 3.2395 per GDR, equivalent to Rs 174/- per equity share, aggregating to US $ 51.02 Million to LLIC S.a.r.l., on a private placement basis.

DIVIDEND

Your Company follows a dividend policy by harmonizing the needs of the Company as well as the shareholders. Your Directors are pleased to recommend a dividend of Rs 0.50 (Fifty paisa only) per equity share for the financial year ended on 31st December, 2011.

The dividend, if approved, by the shareholders, will entail a payout of Rs 185.24 Million including dividend distribution tax of Rs 25.85 Million.

Your Directors recommend 8% dividend on the preference shares for the year ended 31st December, 2011.

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

TRANSFER TO RESERVES

Your Directors propose to transfer Rs 1,000 Million to the General Reserve and Rs 150.83 Million to Capital Redemption Reserve. An amount of Rs 34,680.55 Million is proposed to be retained in the Profit and Loss Account.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum of Rs 2.91 Million in respect of unpaid/ unclaimed dividend for the Financial Year 2003-04 to the Investor Education and Protection Fund.

FIXED DEPOSITS

Your Company has not accepted any Fixed Deposit within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

PERSONNEL

Human Capital is an important asset for the Company and the Company has taken and shall continue to take adequate steps towards education and enrichment of the human capital.

A Statement of the Particulars of Employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is annexed and forms part of this Report.

CONSERVATION OF ENERGY

Energy can neither be created nor destroyed by itself; it can only be transformed. The conservation of energy is a need of the day. Your Company believes in the conservation of energy to meet the future demands. Your Company has made different policies and rules to save the energy and make optimum utilization of natural resources.

The Company has taken following key initiatives for conservation of energy:

- Use of hi-tech energy monitoring appliances and conservation systems to monitor usage, minimize wastage and increase overall efficiency at every stage of power consumption;

- Installation of energy saving lights;

- Reduction of energy consumption via behavioural modification of facility occupants, i.e. turning off lights, personal computers and other electronic equipments, when not in use;

- Installation of astronomical digital timers, occupancy sensors for better lighting control;

- Based on the outdoor temperature raising the air handler, supply air temperature to prevent over cooling and reduce the cooling coil load;

- Timely maintenance and up-gradation of machinery & equipments;

- Auto shut-off of air conditioners and other equipments during lunch breaks and during shift change;

- Plantation of trees at all the manufacturing facilities;

- Awareness programs towards optimum utilization of natural resources at managerial as well as employee level;

- Reduction in power consumption by taking opportunities of idle production hours, tea and lunch timings etc.; and

- Use of energy saving lighting arrangement on shop floors and on roads, inside the manufacturing facilities by using Electronics Ballet and CFL lamps.

To make available the resources for future generation is the ultimate responsibility of today's generation. Hence, your Company continues to lay emphasis on conservation of energy, power and other energy resources. Such measures for conservation of energy will ultimately reduce the cost of production by reducing maintenance cost and efficient use of resources.

RESEARCH AND DEVELOPMENT (R & D) AND TECHNOLOGY ABSORPTION

The consumer electronics industry is one of the most dynamic industries in the world, undergoing seemingly continual change with changing lifestyle of the people thereby creating demand for meaningful innovations based on unique insights of the customers.

Technolgy and R & D go hand in hand. To compete with ever changing market conditions and fetch the technological advancement, your Company has set up a very dynamic and active R & D center. Your Company has built up strong R & D centers, having qualified staff working continuously for betterment of product and services. Our R & D team continuously does market research as well as customer survey to understand the needs and requirements of the consumers.

Your Company has launched variety of products in consumer electronics industry including wide range of Refrigerators, Washing Machines, Televisions, Air-Conditioners, Microwave Ovens etc. Your Company is committed towards introducing new models and improving existing products to meet the ever-increasing demands of the consumers by fully exploring technological options and advancements.

R & D centers are operated for the following activities:

- To conduct market survey and ascertain the new trend;

- To foresight the consumer needs and modify the products to suit the consumer demands;

- To bring variety of products at an affordable price level;

- To generate new technologies and make adequate use of the same;

- To improve operational efficiency;

- To reduce cost of production;

- To improve quality of product; and

- To supply value-for-money products in the market with best aesthetics and advanced features.

Benefits derived from the R & D activities:

- Maintenance of quality;

- Innovations in product designs and outlook;

- Efficient use of technological advancement;

- Cost reduction; and

- Optimum utilization of resources.

R & D activities carried out in various consumer electronics products and benefits derived from these activities: Televisions:

Consumer electronics market is majorly influenced by technology which is changing day by day with many innovations and continuous R & D. In this dynamic world, the Company is launching LED TVs, 3D TVs, DTH LED TVs, Internet TVs etc. with attractive designs and aesthetics, using latest technologies, to delight Indian consumers with wide range of products. These products will not only be technologically advanced but also be connected with consumers in their everyday lives.

Your Company has also introduced many unique selling propositions like models with brush and metal finish, slim TVs etc. Some of the unique models introduced are as follows :

- Integrated Digital TV with single chip solution with a built in DTH (Direct to Home) facility having MPEG 4 DVB-S2 Digital signal. Customer can enjoy the unmatched picture & audio quality of LCD TV & LED TV. This product has the following unique features:

- MPEG-4 DVB-S2: Single Chip iDTV Solution with second generation MPEG- 4 DVB-S2 technology for enhanced picture quality.

- FULL HD (1920 x 1080P): 100% Full HD Reception which improves the picture & sound quality.

- H.264 Video Decoder: Excellent video quality across entire Bandwidth Spectrum as H.264 decoder is inside the single chip.

- CPU Performance: Dual core CPU with 450MHz which is controlled by Linux Operating System. It leads to high system performance with greater operational speed.

- Internal RAM: 48-Bit DDR2/3 (384MB) Local Memory interfacing with the high speed accessing capability up to 1066Mbps (533MHz clock rate) for better frame rate performance.

- MADi Technology for Motion Control: Crystal clear rendering on Full HD (1080p) displays using advanced motion control algorithms such as MADi technology inside.

- Advanced Video Post Processing: Video is optimized with 14 - Bit Colour processing which leads high depth in picture, true colour enhancement with natural skin tone.

- Digital Noise reduction with 3D Comb filter: Better noise reduction and signal conditioning using built-in 3D/TNR noise suppression, cross colour suppression, media noise suppression which includes 'Block noise' and 'Mosquito noise' reduction.

- Enriched Graphic On Screen Display (OSD): Enriched & Animated Graphical OSD with WXGA resolution, Unique OSD for both in Analog & Digital with 14 Multi-Regional Languages.

- Silicon Hybrid Tuner: As using Silicon Hybrid Tuner which is giving better picture, sound quality and high performance as compared to Dual Tuner and in the Dual Tuner insertion loss will be around 8~10dB.

- Unique "Android TV" - Videocon has set a platform for "Internet TV" to enjoy the live chatting, browsing, video conferencing, email access and enabling the customers to download and play lot of applications from Google Apps Market. Customer can download and store his preferred applications in TV memory. This product has various unique capability such as Android Market; Flicker Free 3D; QWERTY Remote; Web Browser; Facebook; You Tube/Picasa; Skype/Horoscope; Maps/Weather Updates; App Installer; Inbuilt Wi-Fi and Games.

- Uhe new "DVBS (Digital Video Boosting Station) LED" series with Faroudja engine which brings life to every color with 120Hz refresh rate and FULL HD 1080P resolution with built in DTH service.

- "Persistence" (LED) TV with FULL HD 1080p resolution. It has a unique feature of MJC (Motion Judder Compensation). With this unique picture quality improvement algorithm, it reproduces e 1 Billion display colour for more natural, vivid and true to life colours.

Refrigerators:

Your Company has variety of models in double door and single door refrigerators.

With the help of R & D, the Company was able to introduce various models having the following features:

- High End Frost Free (FF) and Direct Cool (DC) range of refrigerators from 50L to 610L;

- High glass designer exterior panels in both DC and FF;

- Introduction of designer models like Lily, Rose, Bird in DC and Orion and Creeper series in FF;

- First time introduction of night vision FF refrigerator with ambient light sensing LED illumination in door handle;

- Introduction of very unique USPs like digital watch, crisper separator, cosmetic box in FF refrigerator;

- Developed & launched Side By Side refrigerator to enter into super luxury refrigerator segment;

- Introduction of FM radio in refrigerators;

- Introduction of new Metallic robust Bar handle for DC & FF refrigerators;

- Introduction of toughened glass shelves for DC refrigerators, which strengthened our market position in DC range;

- LED light implementation in both DC & FF refrigerators, which ultimately shows our commitment towards energy saving and new innovation;

- Introduction of the products on health platform with Deodorizer, which gives the solution to remove the odour created by rotten vegetables and fruits; and

- Introduction of high glass pre-coated material with new designs and attractive colours across refrigerator range for luxurious look.

Washing Machines:

The following new models and technologies were introduced:

- Introduced five star rated models in top loading and four star rated models in front loading washing machines;

- Front loading machines with memory back up and "do it yourself' mechanism;

- Attractive design with 3 auxiliary programs i.e. pre-wash, eco wash and intensive wash technology;

- 15 degree tilted drum in Front loading machines for easy loading of clothes;

- Introduced dual element heater in dryer with drying efficiency greater than 97%;

- Introduced toughened glass tops, in semi automatic washing machine with floral printing and matching body graphics;

- Launched new variants with cosmetic changes including new vibrant colours, body graphics, chrome knobs, etc.; and

- Added air dry function in semi automatic washing machine to increase the drying efficiency.

Air Conditioners:

Your Company has developed and improved its product range by introducing the following new technologies:

- Introduction of Videocon Copper Plus series which are equipped with 100% copper condenser which has inner grooved copper pipes;

- New models of Air Conditioners which are equipped with auto cleaning technology for the consumers' ease;

- Introduced PFC coil in AC Outdoor Unit. PFC technology is far better than conventional Cu-Al fin tube heat exchanger in terms of performance. Because of its high efficiency, PFC is 30% smaller in size (when compared to conventional condenser) and hence can be easily accommodated in smaller chassis. Overall size and weight of outdoor unit is reduced substantially. Being an all aluminum condenser, it gives better resistance to galvanic corrosion and is cost competitive and is able to meet revised energy star rating norms;

- Introduced new range and new indoor unit looks and upgraded all models by one step up to match new BEE (Bureau of Energy Efficiency) star rating norms to compete in revised market scenario;

- Introduced another variant of highly technological DC inverter AC, which has efficiency better than even revised 5 star rating norms. It moderates the compressor performance as per need and adjusts compressor rotation to operate with minimum power input and saves more than 40% power when compared to the conventional AC;

- Developed the AC with Vitamin C filter. This filter dispenses Vitamin C charged ions with the cool air, thereby boosts immunity, keeps skin glowing with its anti oxidant property hence keeps the user fresh and vibrant; and

- Added the Gold, Blue and Green Fin Evaporator for enhanced reliability and durability of AC. The Indoor unit cooling coil is coated with Gold anti corrosive agent which keeps the cooling coil in excellent and efficient working condition for a long time.

Microwave Ovens:

Your Company has made innovations in number of products to suit the market demand. Products contain innovative technologies like:

- Auto Deodorizer which helps in removing odour vapours, leftover oil and food particles immediately by just pressing a button providing ease and convenience of cleaning and maintaining the machine;

- Anti Bacterial Coating which helps to reduce bacterial growth inside the microwave up to 99.99%;

- Lemon Clean Function which helps to remove leftover oil, odour and food particles from microwave cavity;

- Express cooking which helps to heat-up the food quickly; to prepare it faster and ultimately saves time;

- Multi-Stage Cooking which allows cooking food at different heat levels ensuring preparation of delicious dishes;

- Clock Setting Timer which allows setting the desired cooking times as per the requirement;

- Enhanced Auto Cook Recipe to customize 251 functions with categorization like sweets, beverages, snacks, meal, child favourite etc. Special focus is being given to Indian dishes covering major parts of India;

- Introduced Tandoori heater, which intelligently adjusts the cycle time of grill operation to give a flavour of grilling like in Indian tandoor;

- Developed special coating to prevent bacterial growth and is applied to cavity to retard the growth of bacteria and make food healthy to eat. Even if some food particle is left over in Microwave Oven, no microbial growth sustain due to anti bacterial cavity;

- Modified the software program & introduced one touch Indian Preset Menu which cooks the food more efficiently and retains the nutritive value;

- Developed the timers and preset timer to help the customer to cook as per their convenience even if they are away; and

- Models revamped with new floral design on glass and control panel aesthetics.

Future plan of action:

Your Company is committed to provide variety of products at an affordable prices. Your Company is looking forward to take an advantage of technological changes and compete efficiently with multinational players.

The future plan of action includes:

- Introduction of new models in LED and LCD TV. "Elena" model in LED TV is coming up with 2D to 3D conversion, Flicker Free 3D, Full HD services. "Smart TV" model in LCD TV is coming up with full fledge high speed internet, Skype, Twitter, You Tube, Picasa etc.;

- Implementation of new technology;

- Making variations in designs and making the product attractive; and

- Manufacturing of environmental friendly products keeping in mind the green initiative steps taken by the Company.

During the year under review, the Company has incurred Rs 86.67 Million, representing 0.07% of the turnover towards recurring R & D expenses.

INFORMATION TECHNOLOGY

Information Technology and Business are becoming inextricably interwoven. Nobody can meaningfully talk about one without talking about the other. Indeed, the growing influence of Information Technology as an enabler of business in today's time has made use of Information Technology indispensible. Information Technology, having made inroads into major industries, has left no aspect of our business and life untouched. Your Company firmly believes that an organization needs to have a "Digital Nervous System" for sustaining the cut-throat competition and for acheiving the "Numero Uno" status in any sector of economy.

In due recognition of the key role played by Information Technology in revolutionizing the world, your Company has re-engineered its processes by leveraging Information Technology for building, sustaining and expanding its competitive edge.

Your Company has designed and implemented web based Customer Relationship Management (CRM) application. The robust and stable CRM application with comprehensive support enables handling of larger call volumes resulting into speedy response and prompt resolving of customer queries. This is tightly integrated with all other systems like Enterprise Resource Planning (ERP), Business Intelligence (BI) and so on to have one consolidated system.

Your Company has established facilities for customers such as call centres, connect through SMS, websites etc., to provide speedy customer services.

SAP Solution has enabled your Company to leverage the benefits of integration in business operations, optimization of enterprise resources, standardized business processes, thereby enabling standard operating practices with well-established controls. This has enabled the Company to adopt best and standardized business processes across the functions. It has also benefited the management at all levels with business information which is available online and reliable to control the business operations in a well informed manner.

Recently, Company has upgraded SAP from ECC 5.0 to ECC 6.0 to get benefits of technology and processes which are new in ECC 6.0. This upgradation of SAP will give immense benefits to the Company leading into more stringent business processes and practices.

Your Company has scale-up data center infrastructure to cater the business requirements. During the year under review, SAP BI Tool was upgraded from 3.5 to 7 for providing intelligent and advance reporting functionality. There is secured and point to point Vitual Private Network (VPN) connectivity in most of the branches and warehouses of the Company.

Your Company has bagged SAP ACE Award, twice in a row for "Best Consumer Sector Implementation" and "Excellence in Implementation of various SAP Modules".

Your Company has also implemented couple of sales automation system which are mobile based application which helps sales force to enter dealer, distributor, sub dealer grievances / requirements from the dealer shop and also enables real time tracking of information.

Your Company has also implemented couple of strong system like VQINS which helps in production defect analysis and helps to increase quality of product.

Your Company has always focused all its Information Technology system to help its employees to maximize their productivity for enhancing quality and higher customer satisfaction.

HEALTH AND SAFETY

The safety and security of the workers are important things for building healthy work environment. Your Company has taken effective measures in the field of healthcare and safety. Your Company has conducted following activities for building healthy work culture:

- Regular medical checkups;

- Medical aid facility for the workers and their family members and placement of First-Aid boxes at several places;

- Ensuring safety of the workers by displaying signs, cautionary boards, emergency phone calling system;

- Vaccination facility for contagious diseases;

- Conducting training programs for all employees on the job and off the job;

- Conducting lectures and seminars to create awareness for hygiene and cleanliness;

- Implementation of night manager concept;

- Conducting regular safety audit & mock drill;

- Doing "HIRA" (Hazard Identification Risk Assessments) of the critical activity to eliminate the risk;

- Availability of occupational health centre and ambulance with all medical devices, in case of emergency;

- Fire tender modified from water monitor to multipurpose use (water and foam), to handle the situation in case of emergency;

- Training given to fire marshals and display their contact number at various locations; and

- MSDS (Material Safety Data Sheet) displayed at chemical storage places.

Your Company believes that healthy and happy working environment is the fundamental right of every employee and to provide the same is a duty of the Company. Your Company is committed towards providing a healthy working environment in every possible way.

ENVIRONMENTAL PROTECTION

With the increase in awareness of global warming, consumers are becoming more and more conscious about the energy efficiency of the products they use. Consumers in India are taking lead in prompting the manufacturers to adopt technologies to manufacture eco-friendly products. There is an increase in consumer preference towards environment friendly products.

Your Company believes that clean surrounding and healthy environment adds to the efficiency of workers. Your Company believes that it is the responsibility of the Company to maintain the ecological balance for sustainable development. Your Company aims towards maintaining the harmony and rhythm of the eco-system.

The eco friendly initiatives adopted by your Company include:

- Optimum use of natural resources;

- Implementing the 3R system - Reduce, Reuse & Recycle;

- Tree plantation campaigns;

- Upgradation of effluent treatment and sewage treatment plants from manual to automation;

- Regular internal environmental check;

- Reduction in process waste;

- Storage and disposal of hazardous waste as per statutory requirements;

- Celebration of world environment day, to increase the awareness among the employees;

- Follows National Ambient Air Quality Standards - 2010 (NAAQS - 2010 standards) for checking of stack emission and ambient air monitoring;

- Certification of ISO-14001, for environment management system; and

- Conduct sustainability audit from SGS.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is not a new concept in India. The only new is that the focus has been shifted from making profits to meeting societal challenges.

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Your Company is dedicated to serve the society at large. Commitment towards health, safety and environment protection are the core values of the Company. The Company is continuously making efforts to preserve the environment by undertaking various measures such as plantation of trees, encouraging paperless transactions, optimum use of natural resources etc..

Your Company shall continue to undertake more activities and initiatives to improve the quality of life and society at large.

APPOINTMENT/ RE-APPOINTMENT OF DIRECTORS

During the year, Mr. Sushil Muhnot, Nominee of IDBI Bank Limited, on the Board of Directors of the Company, resigned from the Board of the Company consequent to his appointment as Chairman & Managing Director of Small Industries Development Bank of India (SIDBI) by Government of India.

Mr. Arun L. Bongirwar resigned from the Board of Directors of the Company w.e.f. 1st November, 2011. Also, during the year, ICICI Bank Limited substituted its nominee on the Board of Directors of the Company. Mr. Girish Nayak was nominated in place of Mr. Ajay Saraf. Accordingly, Mr. Ajay Saraf ceased to be a Director and Mr. Girish Nayak was co-opted as a Nominee - ICICI Bank Limited on the Board of Directors of the Company w.e.f. 26th May, 2011.

Ms. Gunilla Nordstrom did not offer herself for re-appointment at the Annual General Meeting held on 29th June, 2011, therefore, ceased to be the Director on the Board of Directors of the Company.

The Board places its sincere appreciation for the valuable guidance received from Mr. Sushil Muhnot, Mr. Ajay Saraf, Mr. Arun L. Bongirwar and Ms. Gunilla Nordstrom, during their tenure as the Directors of the Company.

Also, Mr. Anil G. Joshi was appointed as a Director on the Board of Directors of the Company w.e.f. 29th June, 2011.

Changes after the Balance Sheet date:

Mr. K. C. Srivastava, Director of the Company resigned from the Board of the Company w.e.f. 1st February, 2012. Mr. Girish Nayak - Nominee of ICICI Bank Limited ceased to be the Director of the Company w.e.f. 14th February, 2012, consequent to withdrawal of nomination by ICICI Bank Limited.

The Board expresses its sincere gratitude towards the valued contribution received from Mr. K. C. Srivastava and Mr. Girish Nayak, during their tenure as the Directors.

IDBI Bank Limited nominated Mr. S. Ananthakrishnan as its nominee on the Board of Directors of the Company. He is an Executive Director at IDBI Bank Limited. He was co-opted as a Nominee of IDBI Bank Limited on the Board of Directors of the Company w.e.f. 29th February, 2012.

Pursuant to the provisions of Section 255, 256 of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Mr. Pradipkumar N. Dhoot and Maj. Gen. S.C.N. Jatar are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

The Board recommends their re-appointment. Brief profiles of Mr. Pradipkumar N. Dhoot and Maj. Gen. S.C.N. Jatar, specifying their expertise in specific functional areas, other public companies in which they hold directorships and committee positions, is annexed to the Notice and form part thereof.

LISTING

The equity shares of your Company are listed on BSE Limited (Formerly: the Bombay Stock Exchange Limited) and The National Stock Exchange of India Limited (NSE). The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed on the Bourse de Luxembourg and Singapore Exchange Securities Trading Limited respectively.

SUBSIDIARY COMPANIES

As on 31st December, 2011, your Company had 30 subsidiaries (including step down subsidiaries) viz., Pipavav Energy Private Limited, Videocon International Electronics Limited, Chhattisgarh Power Ventures Private Limited, Videocon Energy Limited, Prosperous Energy Private Limited, Videocon Oil Ventures Limited, Liberty Videocon General Insurance Company Limited, Videocon Telecommunications Limited, Datacom Telecommunications Private Limited, Jumbo Techno Services Private Limited, Senior Consulting Private Limited,

Proficient Energy Private Limited, Applied Energy Private Limited, Comet Power Private Limited, Unity Power Private Limited, Middle East Appliances LLC, Videocon Global Limited, Videocon Electronics (Shenzhen) Limited, Eagle ECorp Limited, Videocon Energy Ventures Limited, Videocon Hydrocarbon Holdings Limited, Videocon Oman 56 Limited, Videocon JPDA 06-103 Limited, Videocon Mozambique Rovuma 1 Limited, Videocon Energy Brazil Limited, Videocon Indonesia Nunukan Inc., Videocon Australia WA-388-P Limited, Oil Services International S.A.S, Videocon Estelle Limited and Videocon Ivory Limited.

Ministry of Corporate Affairs, Government of India, vide its General Circular No(s). 2/2011 and 3/2011 dated 8th February, 2011 and 21st February, 2011, respectively, has granted general exemption from attaching the Annual Accounts and other documents of the subsidiary companies to the Balance Sheet of the holding company, subject to the fulfilment of certain conditions stipulated therein. The Board of Directors have accorded their consent for not attaching the Balance Sheet of the subsidiary companies. The consolidated financial statements of the Company and all subsidiaries duly audited by its statutory auditors are presented in the Annual Report. The consolidated financial statements have been prepared in strict compliance with applicable Accounting Standards and, where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India.

Further, the following information in aggregate for each subsidiary including subsidiaries of the subsidiaries has been annexed to the consolidated balance sheet:

(a) capital (b) reserves (c) total assets (d) total liabilities (e) investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation and (j) proposed dividend.

The Company undertakes that the Annual Accounts of the subsidiary companies and the related detailed information of the subsidiary companies shall be made available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. The Annual Accounts of the subsidiary companies shall also be kept open for inspection by any shareholder at the Registered Office of the Company and that of the respective subsidiary companies. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements, based on the Financial Statements received from the subsidiaries, associates and joint ventures, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard 21 on "Consolidated Financial Statements", Accounting Standard 27 on "Financial Reporting of Interests in Joint Ventures" and Accounting Standard 23 on "Accounting for Investments in Associates in Consolidated Financial Statements".

CASH FLOW STATEMENT

The Cash Flow Statement for the financial year ended 31st December, 2011, in conformity with the provisions of Clause 32 of the Listing Agreement with the Stock Exchanges in India, is annexed hereto.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed. The Company has received certificates from the said Auditors to the effect that their re- appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDITORS' REPORT

The Statutory Auditors of the Company have submitted Auditors' Report, which have certain Qualifications/ Observations on Standalone and Consolidated Financial Statements for the year ended on 31st December, 2011.

Management's Explanation to the Auditors' Qualifications/ Observations:

a) In respect of Point No. 4(f) of the Auditors' Report on Standalone Financial Statement and Point No. 5(a) of Auditors' Report on Consolidated Financial Statement for the year ended 31st December, 2011, regarding the extent of realisability of the investments made in and the share application money and advances given to Videocon Telecommunications Limited (VTL), the subsidiary, and the financial statements of VTL being prepared on going concern basis, the explanation of management is as under:

The Company has, directly and through its subsidiaries, made investments of Rs 15,000.00 Million, given share application money of Rs 5,000.00 Million and advanced loans of Rs 19,620.84 Million to Videocon Telecommunications Limited (VTL), the subsidiary. VTL was granted Unified Access Services (UAS) Licenses in 21 circles on 10th January, 2008 and had also been allotted spectrum in 20 circles out of which it has launched its services in 16 circles.

The Hon'ble Supreme Court of India, vide its judgment dated 2nd February, 2012 in two separate writ petitions filed by Centre for Public Interest Litigation and by another, has quashed all the UAS licenses granted on or after 10th January, 2008 and the subsequent allocation of spectrum to these licencees. This includes the 21 licenses issued to VTL and the spectrum allotted to it in 20 circles.

The Hon'ble Supreme Court of India had directed that its aforesaid order shall be operative after four months from 2nd February, 2012. On 24th April, 2012, the Hon'ble Supreme Court of India modified its order and postponed the operation of its order of quashing the Telecom Licenses and related allocation of spectrum to 7th September, 2012. The Hon'ble Supreme Court of India has, vide order dated 2nd February, 2012, also directed TRAI to make fresh recommendations for grant of licenses and allocation of spectrum and the Central Government to grant fresh licenses and allocation of spectrum by auction thereafter. The Central Government has announced that it will complete the auction of licenses and related spectrum on or before 31st August, 2012.

Pending the fresh auction as mentioned above, VTL is continuing its business. It proposes to participate in such fresh auction and is hopeful of continuing the business thereafter. Accordingly, in the opinion of the management, no provision is required for diminution in the value of aforesaid investments, share application money and advances.

b) In respect of Point No. 5(b) of Auditors' Report on Consolidated Financial Statement for the year ended 31st December, 2011, regarding the ability of VTL to continue as going concern due to erosion of its networth, the explanation of management is as under:

The management is confident of mobilizing the necessary resources for continuing the operations of VTL as per the business plan, as may evolve. Accordingly, the financial statements of VTL have been prepared on a going concern basis.

COST AUDITOR

Mr. Sudhir Chintaman Sant, Cost Accountant in Whole-Time Practice, Pune, has been appointed as the Cost Auditor for conducting cost audit of Refrigerators, Petroleum products i.e. Oil & Gas and Glass Shells for the financial year 2012.

AUDIT COMMITTEE

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of the Audit Committee together with details of meetings held during the year under review, forms part of Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

'Management Discussion and Analysis Report', highlighting the performance and prospects of the Company's business, forms part of the Annual Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report forms part of this Report. Your Company is in full compliance with the requirements and disclosures that have to be made in this regard. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is appended to the Report on Corporate Governance.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the Annual Accounts for the financial year ended 31st December, 2011, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgements 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 December, 2011 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

ACKNOWLEDGEMENT

The Board of Directors would like to thank the Customers, Vendors, Investors, Financial Institutions, Bankers, Business Partners and Government Authorities for their continued support. The Board of Directors also appreciate the contribution made by the employees at all levels for their hard work, dedication, co-operation and support for the growth of the Company.

The Board of Directors would also like to thank all stakeholders for the continued confidence and trust placed by them with the Company.



For and on Behalf of the Board of Directors of

VIDEOCON INDUSTRIES LIMITED

VENUGOPAL N. DHOOT

Chairman & Managing Director



Place : Mumbai

Date : 26th May, 2012


Dec 31, 2010

The Directors take pleasure in presenting the Twenty Second Annual Report together with the Audited Accounts and Auditors’ Report of your Company for the period ended 31st December, 2010.

PERFORMANCE REVIEW

A snapshot of the performance of the Company, on standalone basis, for the period ended on 31st December, 2010, is summarized below:

(Rs. Million) Particulars Period Ended Year Ended 31st December, 2010 30th September,2009

Net Sales 144,096.91 91,630.41

Other Income 429.86 340.15

Total Income 144,526.77 91,970.56

Profit before Interest, 26,565.60 17,918.57 Depreciation and Taxation

Interest and Finance Charges 8,931.56 6,363.61

Depreciation, Amortisation 7,129.62 5,771.52 and Impairment

Profit Before Tax 10,504.42 5,783.44

Provision for Taxation 3,057.48 1,776.82

Profit after Tax 7,446.94 4,006.62

The Financial Year of the Company was extended by a period of three months. The Financial Year under review accordingly comprises of a period of 15 months commencing from 1st October, 2009 and ended on 31st December, 2010. Subsequent Financial Years shall be from 1st January to 31st December.

OPERATIONS

CONSUMER ELECTRONICS & HOME APPLIANCES [CE&HA]:

The global economic recovery and improved markets were the welcome signs in the second half of the period under review. Your Company continued its growth in CE&HA Business backed by ongoing in-house technological advancement; aggressive marketing, distribution and advertising strategies with focused penetration in the key markets.

OIL & GAS:

Your Company intensifed its exploratory efforts both in domestic and overseas basins to identify new oil and gas assets. These efforts paid good dividends in terms of new discoveries and reserve accretion.

MOZAMBIQUE

February 2010: Anadarko Mozambique announced a discovery in the exploration well, Windjammer. The drilling was completed in the first quarter of 2010 and reached an intermediate casing point encountering more than 480 net feet of natural gas pay in high-quality reservoir sands with a gross column of more than 1,200 feet.

March 2010: Anadarko Mozambique announced that it had encountered an additional 75 net feet of natural gas pay. The additional pay intersected in the deeper objective brings the total net feet of natural gas pay in Windjammar to more than 555 feet.

October 2010: Anadarko Mozambique announced a further discovery in the Barquentine exploration well, encountering a total of more than 416 net feet of natural gas in multiple high-quality sands.

November 2010: Anadarko Mozambique announced a discovery of natural gas of more than 550 net pay feet in multiple high quality sands in Lagosta exploration well, approximately 16 miles to the south of the Barquentine discovery. After this discovery, Anadarko Mozambique estimates that there is adequate gas which has been discovered in the Rovuma Block to support a viable LNG facility.

BRAZIL

November 2009: Anadarko, the Operator of block BM-C-30 offshore Brazil in the Campos Basin has announced the Wahoo #2(also called Wahoo North) exploration well in the Campos Basin, offshore Brazil, has encountered more than 90 feet of high quality net oil pay in the same pre-salt interval, as the original Wahoo discovery. The Wahoo #2 is located in block BM-C- 30 five miles to the north and down-dip from the original Wahoo Discovery well, which encountered more than 195 feet of net pay.

April 2010: Anadarko, the Operator of block BM-C-30 offshore Brazil in the Campos Basin, has announced the results of the Wahoo-1 drillstem test in the Wahoo field, located in block BM-C-30, in the deepwater Campos Basin offshore Brazil. The Wahoo-1 well flowed at a test rate of approximately 7500 barrels per day of 31-degree API gravity crude oil and approximately 4 million cubic feet per day of associated natural gas.

October 2010: PETROBRAS, the Operator of the BM-SEAL-11 Concession Block in the Sergipe-Alagos Basin of the Brazilian Offshore,announced that the drilling of first ultra deep water (2321m) well,designated as 1-SES- 158,on "Barra" structure, located 58 km off theCoast of Brazil and 90 km from city Aracaju, in Atlantic Ocean,discovered hydrocarbon in Cretaceous turbidite fan system.

INDONESIA

November 2010: Anadarko, the Operator, announced the Badik Discovery located in the Tarakan Basin of Indonesia. The well encountered approximately 133 net feet of oil and gas pay.

These world-class finds have positioned your Company as one of the most successful private Indian explorer globally.

TELECOM

Videocon Telecommunications Limited ("VTL"), a subisidiary of the Company, has been awarded licences to provide Unified Access Services in 21 circles in India with effect from January 25, 2008 which is valid for 20 years. VTL has been allotted spectrum in 20 circles and has launched its services in 16 circles as on the Balance Sheet Date.

POWER

Pipavav Energy Private Limited ("PEPL") and Chhattisgarh Power Ventures Private Limited ("CPVPL"), subsidiaries of the Company are assigned to implement Power Projects in the State of Gujarat and Chhattisgarh respectively. Status brief of these projects:

Pipavav Energy The Power Project in Gujarat is a thermal power project Private Limited: with a capacity of 1,200 MW comprising of two units of 600 MW each based on sub-critical technology. PEPL has signed the necessary Memorandum of Understanding with the Government of Gujarat and has also obtained necessary approvals to commence construction including the environmental clearances from Gujarat Pollution Control Board and the Ministry of Environment and Forests. Notice to Proceed has already been issued to BHEL, the BTG Contractor.

Chhattisgarh The Chhattisgarh Power Project is also a thermal

Power Ventures power project with a capacity of 1,200 MW and is Private Limited: located in District Champa- Janjgir in Chhattisgarh. It will consist of two units of 600 MW each . The Company has signed an Implementation Agreement with the Government of Chhattisgarh with respect to the said project. The Government of Chhattisgarh has agreed to facilitate the process of obtaining statutory clearances as well as help in acquisition of land for setting up the Chhattisgarh Power Project and provide the incentives available under the industrial policy of Chhattisgarh for similar projects. The Company has already obtained coal linkage from the Ministry of Coal for 600 MW whereas an application seeking coal linkage for the balance quantity has already been fled.

Further, your Company has also undertaken few solar power projects in the other parts of the country through step-down subsidiaries.

ISSUES / ALLOTMENT

9th December, 2009: The Company issued and allotted 1,858,275 Equity Shares, on preferential basis, at a price of Rs. 242.16 per Equity Share inclusive of a premium of Rs. 232.16 per Equity Share to Infotel Telecom Infrastructure Private Limited.

22nd April, 2010: The Company allotted 51,392,243 partly paid Equity Shares of Rs. 10/- each at Rs. 225/- consisting of premium of Rs. 215/- per Equity Share,aggregating to Rs. 1,156.33 Crores, on rights basis, to the successful applicants. As per the terms of the rights issue, an amount of Rs. 112.50 per Equity Share was payable on application; and the balance on the first and the final call. The first and the final call was made; and was payable by 15th June, 2010.Subsequently, the Company sent the reminders to the shareholders who failed to make payment by the due date. As on 31st December, 2010, the Company received the first and the final call money in respect of 51,361,328 Equity Shares which were confirmed as fully paid whereas 30,915 partly paid Equity Shares remained outstanding as on the same date.

7th July, 2010: The Company issued and allotted 7,541,300 Equity Shares, on preferential basis, at a price of Rs. 211.96 per Equity Share inclusive of a premium of Rs. 201.96 per Equity Share to IDBIBank Limited, ING Vysya Bank Limited, Oriental Bank of Commerce Limited, State Bank of Patiala and Life Insurance Corporation of India.

7th December,2010: The Company allotted 11,765,000 equity shares, at a price of Rs. 170/- per Equity Share, to Bennett, Coleman & Company Ltd.("BCCL") pursuant to option exercised by BCCL to subscribe to 1 (One) Equity Share of the Company per warrant. These warrants were allotted on preferential basis on 1st June, 2009.

15th December,2010: The Company issued Foreign Currency Convertible Bonds (the "FCCBs") amounting to USD 200 Million. These FCCBs are convertible, by the exercise of option by Bondholders, into fully paid equity shares of the Company at any time between 25th January, 2011 to 7 days before maturity date i.e. 16th December, 2015. The initial conversion price is Rs. 239.5265 per Equity Share.

DIVIDEND

Your Company follows a policy to pay sustainable dividend considering its projected growth plans; internal accruals, the potential requirements of funds for capex and working capital and the existing financial arrangements.

Your directors are pleased to recommend a Dividend of Re. 1/- (Rupee One only) per equity share for the period ended on 31st December, 2010.

The dividend, if approved by the shareholders in the Annual General Meeting shall entail a payout of ? 352.13 million including dividend distribution tax of ? 50.16 million. The dividend is free of tax in the hands of the shareholders.

TRANSFER TO GENERAL RESERVE

Your directors propose to transfer Rs. 1,000.00 million to the General Reserve. An amount of Rs. 28,680.29 million is proposed to be retained in the Profit and Loss Account accordingly.

TRANSFER TO INVESTOR EDUCATION AND PROVIDENT FUND

The Company has transferred a sum of Rs. 3.58 Million in respect of unpaid/ unclaimed dividend for the Financial Year 2002-03 to Investor Education Protection Fund.

PERSONNEL

A Statement of the 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 is annexed and forms part of this Report.

Effective development of Human Resources is key to several learning processes and initiatives have been designed and delivered in this area keeping in view the need to cultivate a workforce that offers true competitive advantage.

CONSERVATION OF ENERGY

Your Company believes in sustainable consumption of natural resources. Conservation of Energy is a focus area. Some of the energy conservation initiatives adopted by the Company are as under:

1. Process improvement to eliminate/minimize the aging process of CTV Line leading to reduction in power consumption during aging.

2. Energy checks performed at all manufacturing units ensuring efficient energy management.

3. Replacement of electrical tools by pneumatic tools and conversion of continuous power to intermittent power consumption.

4. Automation to stop freewheeling of machines during no production / less production hours. Servo controlled mechanisms and parts are being used and replaced in older machines to get better energy efficiencies.

5. Improvement of per hour production to reduce power burning hours for the same production quantity.

6. Improve process to reduce freewheeling of machines due to waiting time at work stations.

7. Awareness programs of energy savings; and utilization of natural resources.

8. Implementation of advance technology; and continuous innovations at manufacturing processes /plants in the form of energy efficient equipments.

9. Improved awareness amongst employees by effective communications and trainings.

10. Increased usage of energy saving lighting arrangement in shop floor and on roads inside the facilities by using Electronics Ballets and CFL lamps.

11. Plantation of trees at all the manufacturing plants.

Further, the Company has formed "Quality Circles" and "Team of Experts" comprising of selected employees engaged in manufacturing activities to perform time and motion study of the overall manufacturing process and recommend ways and means for conservation of energy and power.

The noted initiatives leading to optimal consumption of resources have resulted in an overall improvement in efficiency.

RESEARCH & DEVELOPMENT [R & D]

The Company aims to inspire consumers around the world with innovation and fun through its unique combination of technology and entertainment based on its consumer electronics and home appliances businesses.

The Company continues to give utmost importance to R & D. Our focus on developing existing technologies and product engineering innovation, aimed at improving production efficiency leading to lowering cost of production. The Company has R & D centres located at Aurangabad, Gurgaon; and in China with skilled engineers/experts working continuously on new products development. With the R & D centres working non-stop, your Company launched several products in CTVs, FPDs, refrigerators and fully automatic washing machines.

R & D activities include:

- Market Trend analysis;

- Study/Analyse Customer’s demands and changing needs; and

- Design/Develop products suitable for Indian climatic conditions as well as same for Export market.

Benefits derived from the R & D Activities:

- Development of high end products;

- Introduction of Integrated Digital TV ( iDTV) with a built in DTH facility with MPEG 4 DVB-S2 Digital signal;

- Introduction of LED TV with "Nano Pixels" for immense picture performance and razor slim design; and

- Introduction of unique "SMART TV" with a platform for "Internet TV" to enjoy Live Chatting, Browsing , Video Conferencing , Email Access , Blue Tooth Connectivity and many more applications to make LCD TV a real "SMART TV".

To align the Global needs and Company’s Vision of being committed to "Eco Logic": Technology for Sustainable Life, R&D has developed:

- Star Rated Products in Consumer Electronics and Home Appliances: This technology offers energy savings of 15 % of power consumption approximately to the benefit of consumers; and leading to effective utilization of power resources.

- Introduction of further paint less product with a unique Hot and Cold Technology for moulding of part: This helps to reduce pollution generated due to hazardous chemicals used in plastic paints and its process. Customer can enjoy the high glossy finish with ultimate scratch resistance.

- State of art technology LED illumination in Refrigerators: This gives better illumination with lowest energy consumption.

- New concept for PCM (Pre-Coated Material) finish with floral design for Refrigerators.

- Introduction of State of Art technology – Ioniser in Refrigerators: It is a first time introduction in Indian market to kill the bacteria and offer hygienic fruits and vegetables.

- "Centre Water Fall Technology" for Dolphin washing machine: This technology saves water when directed to spin side.

- "UV cleaning" technique eliminates any bacteria contents in clothes.

R & D activities carried out in various consumer electronic products and benefits derived from these activities:

Televisions:

- Introduced new "Titanium LED" Series with NANOPIX Engine with 120Hz refresh rate and FULL HD 1080P resolution.

- Introduced "3D LED TV" which enhances the viewing experience.

- Introduced "Titanium", "Hurricane" and "Tornado" Series of LCD TV with FULL HD 1080p resolution: It has a unique feature of DCRe (Digital Cinema Reality Engine). With this unique picture quality improvement algorithm, it reproduces 1 Billion display colour for more natural, vivid and true to life colours. "Titanium" series of LCD TV has a DVBS (Digital Video Boosting Station) with 1,00,000: 1 Super Contrast Ratio to give crisper image and dramatic picture quality. It has an advance function of "Energy Meter" for efficient energy utilization while viewing. Its 10 Bit advanced Scalar Video Data processing gives the flicker free images & optimal video fidelity to provide most natural and Cinema Quality Video Images. With boot capture logo function user can view his family photo every time when TV is switched on. With the multimedia port user can watch photos/movies/ songs stored in USB device. With Multi Function Monitor concept in LCD TV and USB / Multi Media connectivity the viewer can enjoy maximum connectivity to the Digital World. Its Natural Easy View Panel provides ultra wide viewing angle with enhanced picture quality and antireflective coating to make black more darker with low refection for very clear images. PIP (Picture in Picture) feature enables the user to watch TV programme and movie simultaneously.

- Introduction of Blue Tooth Function in TV enables a user to transfer photos/songs stored on his mobile to TV sets wirelessly.

- Introduced unique RF remote control technology in its product where customer can operate TV from any angle (360 degree). Conventional remote operates only when it is keep in line with TV sets (+/- 30 Degree).

- Introduced touch control function in CRT TV segment.

- Introduced "Hot and Cold" moulding technology in TV.

- Introduced SRS technology in LED Series to improve the acoustic performance of sets.

- Introduced "MAGNNUM" LCD Series with unique metallic finish and glass front.

- Introduced "Titanium iye" LCD series with brush finish.

- Introduced new segment of 14" Ultra Slim TV in market.

- Introduced new range of products viz : Universal Media player, Solar Mobile Charger, High End Home Theatre and new range of LCD TV’s.

Refrigerators:

- Developed new range of Direct Cool as well as Frost Free refrigerators like Ecocool, Ecocool Plus, Ecofresh, Deofresh, Nutricool, Nutricool Plus, Powercool.

- Developed 4 & 5 Star Rated refrigerators with new exterior finish i.e. PCM.

- Introduction of new base stand with smart VEGI TRAY which is unique and give convenience to customer in day to day usage.

- Introduction of new looks of refrigerators, which strengthen our market position in Direct Cool range.

- Introduction of new economic series of Direct Cool Refrigerator as "Bharat Series", which has given cutting edge solution for the competitors on the price factor.

- Introduction of the products on health platform with Deodorizer which gives the solution to remove the odour created by rotten vegetables and fruits.

- Enhanced Frost Free refrigerator series with introduction of LED & LEDi technology.

- Introduction of 3 & 4 Star Rated Refrigerators, with high energy efficient compressors.

To enhance the brand image, the Company re-engineered number of models with new packing design such as:

- 50 Powder coated models with catchy & smooth colours; and

- Introduction of Black colour refrigerators.

Washing Machines:

- Developed higher capacity Washing Machines to be offered to Indian market with Hand Wash and UV light technology.

- Digi-Aqua and Digi-Pacifc series of 5.5 kg Fully Automatic (FA) Washing Machines with 8 Wash Programs, 8 Water levels, Child lock feature resulting in less water consumption.

- Introduced Digi-Wave and Digi-Atlantic series of 6.0kg FA Machines with 8 Wash Programs, 8 Water levels, Child lock feature and Special Air Dry features.

- Introduced India’s first UV light technology Washing Machine, Digi- Marine and Digi-Ocean. This has other features like Hand Wash, LCD Display, Delay Time setting etc. for user convenience.

- Developed 6kg Semi Automatic (SA) Washing Machine "Aqua and Pacifc".

- Developed Dolphin, Atlantic, Marine series of 7.0kg SA Washing Machines with Gear Drive for improved wash ability and efficiency.

- Introduced SA 7.0kg Spring with Decorative Transparent Panels, Roller Coster Pulsator, centre water fall & Chrome Knobs. Delight to watch and efficient in use.

- Centre Water Fall Technology for Dolphin which saves water when directed to spin side.

- Features like Magic Filter for Dolphin and Atlantic series, which are better lint collectors and user friendly.

- Introduction of designer Floral patterns with blazing top colours which will give attractive look to Washing Machine in the 6kg & above FA category.

- Focusing on Environmental friendly technologies: R&D is working on series of FA & SA machines which are energy efficient, use lesser water and detergents.

- Introduced Digi Dolphin Dlx with Direct Drive technology along with enhanced features like "Do It Yourself" program. This has multi spin speed, 8 Water levels and dynamic soak features.

- Developed 6.5Kg FA TILT Drum Careen Plus with Direct Drive Motor: This has advanced features like Sterilization program, Aero Wash technology and self cleaning of Tub.

Air Conditioners:

- Introduced highly technological AC DC inverter AC: This has efficiency better than even current 5 star as stated and set by Bureau of Energy Efficiency (BEE). It moderates the compressor performance as per need and adjusts compressor rotation to operate with minimum power input, hereby saving more than 40% power saving than the conventional AC.

- Introduced Vitamin C filter: This Filter dispenses Vitamin C charged ions with the cool air. Thereby boosts immunity, keeps skin glowing with its antioxidant property hence keeps the user fresh and vibrant.

- Added the Gold Fin Evaporator for enhanced reliability and durability of Air Conditioner. The indoor unit cooling coil is coated with Gold anti corrosive agent which keeps the cooling coil in excellent and efficient working condition for a long time.

- Developed multi utility Universal Remote: This remote can operate AC (Videocon brand) and CE products like LCD/LED TV, Set top box, DVD player etc (LG/SS/Philips/Videocon/Akai etc) thereby providing multiple solutions with a single remote.

Microwave Ovens:

- Introduction of Auto Cook Recipe Function with categorization like Sweets, Beverages, Snacks, Meals, etc. For the ease of cooking, pre- programmed menu enables microwave to do all the functions with a single touch.

- Developed Sensi Grill Function which senses the cooking cycle in between of cycle to turn over and give a home cooking taste. This function gives an alarm after completion of half cycle to turn your food in Grill Model.

- Added Deodorizer feature which helps in removing post cooking odour from microwave. This way the odour does not mix with next recipe and makes it healthy and tasty.

- Introduced Lemon Clean feature to remove all odour after cooking. With this all the oil and food particles can be cleaned easily.

- Developed an Anti Bacterial Cavity to retard the growth of bacteria and make your food healthy to eat. Even if some food particle is left over in Microwave Oven no microbial growth sustains due to anti bacterial cavity.

- Developed a range of touch screen microwaves which cooks better keeping food nutrients intact with multi stage & express cooking.

Future Plan of Action:

In near future, the Company shall continue to focus on all the areas mentioned earlier and also aims to offer new technologies and processes to provide better products at affordable prices to the customers.

The Company proposes the following R & D activities in near future:

- To bring in features of various products together;

- Continuous upgradation of technologies for better features, better quality and improved reliability for reduced/low prices; and

- Reducing the electricity consumption for consumer electronics and home appliances.

R & D Expenditure:

During the period, your Company has incurred an expenditure of Rs. 120.50 Million representing 0.08% of the turnover towards R & D, to enhance the competitiveness of our core business and develop tomorrow’s technologies.

Recognitions:

- Integrated Digital TV (iDTV) product with a built in DTH facility having MPEG 4 DVB-S2 Digital Signal has been awarded as "Product of the Year 2011" by Nelson Survey. Your Company being the first company to launch this patented product in Indian market.

- 6kg SA Washing Machine "Aqua and Pacific" is judged as the best drying machine in its category by Consumer’s Voice.

- The Company has received 5-star BEE rating for its top loading model Digi Dolphin Dlx Washing Machine.

- The Company has received 4-star BEE rating for Careen Plus washing machine which comes with tilt drum.

FOREIGN EXCHANGE INFLOW & OUTGO

The particulars of Foreign Exchange Earnings and Outgo during the period are set out as under:

(Rs. Million) Particulars For the period ended For the year ended 31st December, 2010 30th September, 2009

Foreign Exchange Earned 5,240.64 5,226.24

Foreign Exchange Used 23,721.69 13,922.44

The Company has undertaken various initiatives for exports and development of export markets for Consumer Electronics and Home Appliances to increase its Foreign Exchange Earnings.

INFORMATION TECHNOLOGY

Information technology and Business are becoming inextricably interwoven. The growing influence of information technology as an enabler of business in today’s time has made use of information technology indispensible. Information technology, having made inroads into major industries, has left no aspect of our business and life untouched. Your Company firmly believes that an organization needs to have a "Digital Nervous System" for sustaining the cut-throat competition for the "Numero Uno" position in any sector of economy.

In due recognition of the key role played by information technology in revolutionizing the world, your company has re-engineered its processes by leveraging information technology with an eye building, sustaining and expanding its competitive edge.

Your Company has designed and implemented web based CRM application using ASP.Net 3.5 and SQL server 2005. The robust and stable CRM application with comprehensive support enables handling of larger call volumes resulting into speedy response and prompt resolution of customers’ queries.

Company has established facilities for customers like call center, connect through SMS, Web-sites so on to have best and speedy customer interaction.

SAP Solutions have enabled your Company to leverage the benefits of integration in business operations, optimization of enterprise resources, standardized business processes and standard operating practices with well-established controls. This has enabled the Company to adopt best and standardized business processes across the functions. It has also benefited the management at all levels with on-line reliable business information to control the business operations in a well-informed manner. Your Company has scale-up data center infrastructure to cater to the business requirements. There is secured as well as point to point VPN connectivity in most of its branches and warehouses.

HEALTH AND SAFETY

The Company is committed towards health and safety of the employees at all levels. Healthy atmosphere and safe working conditions increases employee’s motivation and satisfaction thereby contributing significantly to productivity. Key initiatives taken by your Company in this area are summarized as under:

- Conducting regular safety checks;

- Regular on the job and off-line training programs for all employees;

- Conducting mock drill as per calendar in the campus and training given to fire marshals;

- Fire tender modified from water monitor to multipurpose use (Water & Foam), to handle the situation in case of emergency;

- Providing emergency exit door and display of evacuation plans at various locations to reach the assembly point, in case of emergency;

- Organising different events in the campus to increase the awareness among the employees;

- Display of signs, cautionary boards, emergency telephone numbers etc., at various locations for information and awareness of the employees;

- MSDS (Material Safety Data Sheet) display at chemical storage places;

- Implementation of night manager concept;

- Conducting "HIRA"(Hazard Identifcation Risk Assessments) of the critical activity, to eliminate the risk;

- Accessibility health and medical services to all the employees at all levels through well- equipped health centers located at all manufacturing plants;

- Placement of First-Aid boxes at several places for employees;

- Regular medical check-up to ensure fitness of its employees;

- Implementation of Human Injury Reporting System to report all types of human injury and to find out the root cause; and

- Cleanliness and timely disposal of waste and scrap is ensured at the entire premises.

ENVIRONMENTAL PROTECTION

Your Company being a good corporate citizen assumes its responsibility towards conservation of environment. A clean environment at the workplace and in its surroundings is our main focus and objective for sustainable development and business growth.

In order to comply with Indian laws and regulations in respect of environmental protection, the Company has taken internal environmental protection control and monitoring measures.

The Company extracts maximum value from available resources, making the best use of renewable resources and minimizing waste produced. This concept is called "Resource Productivity". The Company aims at drive-down of costs by reducing waste and pollution; and by creating opportunities for growth through process and product innovations.

The eco friendly initiatives adopted by the Company include:

- Efficient use of natural resources by Implementing the 3R system – Reduce, Reuse & Recycle;

- Tree plantation campaigns;

- Following National Ambient Air Quality Standards (NAAQS) – 2010, for checking of stack emission & ambient air monitoring;

- Up gradation of effluent treatment & sewage treatment plants from manual to automation;

- Regular internal environmental audit;

- Arrangement of Pollution Under Control (PUC) camps;

- Certification of ISO – 14001, for environment management system;

- Effective Storage and Disposal of Hazardous Waste as per statutory requirements; and

- Celebration of World Environment Day to increase the awareness among the employees.

APPOINTMENT / RE-APOINTMENT OF DIRECTOR

During the period under review, Mr. Sushil Muhnot was appointed as a Nominee of IDBI Bank Limited in place of Dr. Birendra Narain Singh. The Board places on record its sincere appreciation for the valuable guidance received from Dr. Birendra Narain Singh, during his tenure as Director of the Company.

At the Twenty First Annual General Meeting held on 30th March, 2010. Mr. Venugopal N. Dhoot was re-appointed to the office of Managing Director for a period of 5 years with effect from 1st September, 2010 to 31st August, 2015.

Further, at the Extra-Ordinary General Meeting held on 22nd June, 2010, Mr. Pradipkumar N Dhoot was re-appointed to the office of Whole Time Director for a period of 5 years with effect from 20th November, 2010 to 19th November, 2015.

Pursuant to the provisions of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Mr. Satya Pal Talwar, Mr. Radhey Shyam Agarwal and Ms. Gunilla Nordstrom are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, Mr. Satya Pal Talwar and Mr. Radhey Shyam Agarwal have offered themselves for re-appointment. Ms. Gunilla Nordstrom has not offered herself for re-appointment and accordingly shall retire at the ensuing Annual General Meeting.

The Board of Directors have recommended appointment of Mr. Anil G. Joshi in place of Ms. Gunilla Nordstrom. The Company has received due notice under Section 257 of the Companies Act, 1956.

The Board recommends re-appointment of Mr. Satya Pal Talwar and Mr. Radhey Shyam Agarwal; and recommends appointment of Mr. Anil G. Joshi as Directors of the Company. Brief profiles of each of these directors, specifying their expertise in specific functional areas, public companies in which they hold Directorships and Committee positions, are annexed to the Notice and forms part thereof.

Changes after the Balance Sheet Date:

Government of India has appointed Mr. Sushil Muhnot as Chairman & Managing Director of Small Industries Development Bank of India (SIDBI). Consequent to the said appointment, he has resigned from IDBI Bank Limited and also from the Board of Directors of the Company. Accordingly, Mr. Muhnot ceased to be the Director of the Company.

ICICI Bank Limited substituted its nominee on the Board. Mr. Girish Nayak was nominated in place of Mr. Ajay Saraf. Accordingly, Mr. Ajay Saraf ceased to be a director and Mr. Girish Nayak was co opted as a Nominee on the Board of Directors of the Company. The Board places on record its sincere appreciation for the valuable guidance received from Mr. Sushil Muhnot and Mr. Ajay Saraf during their tenure as Directors of the Company.

LISTING

The Equity Shares of your Company are listed on the Bombay Stock Exchange Limited and The National Stock Exchange of India Limited.

The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed on the Bourse de Luxembourg and Singapore Exchange Securities Trading Limited respectively.

SUBSIDIARY COMPANIES

During the period under review, Chhattisgarh Power Ventures Private Limited, Triumph Energy Private Limited, Videocon Energy Limited, Videocon Hydrocarbon Holdings Limited and Senator Energy Private Limited became the wholly-owned subsidiaries of the Company.

Videocon Oil Ventures Limited, Videocon Power Ventures Limited, Marvel Energy Private Limited, Aim Energy Private Limited, Viable Energy Private Limited, Vital Power Private Limited, Proficient Energy Private Limited, Orchid Energy Private Limited, Applied Energy Private Limited, Instant Energy Private Limited, Comet Power Private Limited, Unity Power Private Limited, Percept Energy Private Limited, Galaxy Power Private Limited, Videocon Australia WA-388-P Limited, Oil Services International S.A.S, Videocon Energy Brazil Limited, Videocon Indonesia Nunukan Inc, Videocon Mozambique Rovuma 1 Limited (Formerly: Videocon Energy Resources Limited) and Videocon JPDA 06-103 Limited (Formerly: Global Energy Inc) became the step down subsidiaries of the Company.

During the period under review, Godavari Consumer Electronics Appliances Private Limited, Mayur Household Electronics Appliances Private Limited, Sky Billion Trading Limited, Paramount Global Limited, Powerking Corporation Limited and Venus Corporation Limited ceased to be the subsidiaries of the Company and Videocon Display Research Company Limited got voluntarily liquidated.

As such as on 31st December, 2010, your Company had 37 subsidiaries (including step-down subsidiaries) viz. Pipavav Energy Private Limited, Videocon International Electronics Limited, Chhattisgarh Power Ventures Private Limited, Triumph Energy Private Limited, Videocon Energy Limited, Senator Energy Private Limited, Datacom Telecommunications Private Limited, Videocon Telecommunications Limited, Jumbo Techno Services Private Limited, Senior Consulting Private Limited, Videocon Oil Ventures Limited, Videocon Power Ventures Limited, Marvel Energy Private Limited, Aim Energy Private Limited, Viable Energy Private Limited, Vital Power Private Limited, Proficient Energy Private Limited, Orchid Energy Private Limited, Applied Energy Private Limited, Instant Energy Private Limited, Comet Power Private Limited, Unity Power Private Limited, Percept Energy Private Limited, Galaxy Power Private Limited, Middle East Appliances LLC, Videocon Global Limited, Videocon Electronic (Shenzhen) Limited, Eagle ECorp Limited, Videocon Energy Ventures Limited, Videocon Hydrocarbon Holdings Limited, Videocon Oman 56 Limited (Formerly: Videocon Hydrocarbon Holdings Limited), Videocon JPDA 06-103 Limited (Formerly: Global Energy Inc), Videocon Mozambique Rovuma 1 Limited (Formerly: Videocon Energy Resources Limited), Videocon Energy Brazil Limited (Formerly: Videocon Global Energy Holdings Limited), Videocon Indonesia Nunukan Inc (Formerly: Spectrum Overseas Inc), Videocon Australia WA-388-P Limited and Oil Services International S.A.S.

Ministry of Corporate Affairs, Government of India has granted its approval under Section 212(8) of the Companies Act, 1956 and accordingly the provisions contained in sub-section (1) of Section 212 of the Companies Act, 1956 shall not be applicable in respect of the Balance Sheet etc. of the aforesaid 37 subsidiaries which are required to be attached to the Company’s accounts for the financial period ended on 31st December, 2010. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies as specified in sub-section (1) of Section 212 of the Companies Act, 1956 are not being attached with the Balance Sheet of the Company.

Financial information of the subsidiary companies, as required by the said approval, is disclosed in the Annual Report. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies, joint ventures and associates, in accordance with relevant Accounting Standards issued by the Institute Chartered Accountants of India.

The Company undertakes that the annual accounts of the subsidiary companies and the related detailed information, including hard copy of the accounts of the subsidiaries, will be made available to the investors/ shareholders of holding and subsidiary companies seeking such information at any point of time and the annual accounts of the subsidiary companies will also be kept available for inspection by any investor at the Registered Office of the Company as well as the respective Registered Offices of Subsidiary Companies.

Further, the summarized financial information of the subsidiary companies is also available on the website of the Company viz., www.videoconworld.com

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements, basis the Financial Statements received from the subsidiaries, associates and joint ventures, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard 21 on "Consolidated Financial Statements", Accounting Standard 27 of "Financial Reporting of Interests in Joint Ventures" and Accounting Standard 23 on "Accounting for Investments in Associates in Consolidated Financial Statements."

CASH FLOW STATEMENT

The Cash flow Statement for the period ended 31st December, 2010, inconformity with the provisions of Clause 32 of the Listing Agreement with the Stock Exchanges in India, is annexed hereto.

AUDITORS’ REPORT

The Auditors’ Report is unqualified. The observations made in the Auditors’ Report, read together with the relevant notes thereon, are self-explanatory and hence, do not call for any comments under Section 217 of the Companies Act, 1956.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed. The Company has received certificates from the said Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956.

The Board recommends their re-appointment.

AUDIT COMMITTEE

The Company has constituted the Audit Committee, pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement. The composition, scope and powers of Audit Committee together with details of meetings held during the period under review forms part of Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report, highlighting the performance and prospects of the Company’s business, forms part of the Annual Report.

CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report forms part of the Annual Report. Your Company is in full compliance with the requirements and disclosures as stated therein. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is appended to the Report on Corporate Governance.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

a) In the preparation of the annual accounts for the period ended 31st December, 2010, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st December, 2010 and of the profit of the Company for the period ended on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) The Directors have prepared the annual accounts of the Company on a ‘going concern’ basis.

ACKNOWLEDGEMENT

The Board would like to express their heartfelt gratitude for the assistance and co-operation received from the Financial Institutions, Government Authorities and Banks.

The Board would also like to place on record its sincere thanks and appreciation for the continuing support of the dealers, vendors, business associates and employees.

The Board is also grateful to you for your support and look forward for your continued support in future as well.

For and behalf of the Board of Directors of VIDEOCON INDUSTRIES LIMITED

VENUGOPAL N. DHOOT

Chairman & Managing Director

Place : Mumbai Date : 26th May, 2011


Sep 30, 2009

The Directors take pleasure in presenting the Twenty-first Annual Report together with the Audited Accounts and Auditors Report of your Company for the year ended 30th September, 2009.

PERFORMANCE REVIEW

The performance of the Company, on standalone basis, for the financial year ended 30th September, 2009 is as summarized below:

(Rs. in Million)

Particulars Year ended Year ended 30th Sept., 2009 30th Sept., 2008

Net Sales 91,630.41 97,536.54

Other Income 340.15 288.22

Total Income 91,970.56 97,824.76

Profit before Interest, Depreciation, 17,918.57 23,560.88

Exceptional Items and Tax

Interest and Finance charges 6,363.61 4,011.03

Depreciation 5,771.52 6,602.07

Exceptional Items - 1,278.10

Profit before Tax 6,783.44 11,669.68

Provision for Taxation 1,776.82 3,126.73

Profit after Tax 4,006.62 8,542.95

OPERATIONS

Highlights on the performance of the Company during the year under review are summarized hereunder:

CONSUMER ELECTRONICS & HOME APPLIANCES:

Undeterred by the economic uncertainties looming large over the global horizon, your Company has made positive strides in its Consumer Electronics & Home Appliances Business and Company has posted a stable performance thanks to the technological up-gradation; multi-brand strategy; aggressive marketing; launch of new logo; and focused penetration in the key markets.

OIL & GAS:

The Company, through its wholly owned subsidiaries and / or joint ventures is carrying on the exploration activities in the oil and gas fields in Brazil, Mozambique, East Timor, Oman, and Australia.

As a part of Companys overall plans of acquiring further interests in oil and gas fields worldwide, the Company, through one of its subsidiaries, acquired a 12.5% participating interest in Production Sharing Contract, covering the area referred to as Nunukan Block, located offshore Indonesia.

During the year under review a pre-salt discovery was announced in the Wahoo prospect offshore Brazil block in the Campos basin wherein VB Brazil Petroleo Private Limitada, a joint venture company of the Company with Bharat PetroResources Limited, through its wholly owned subsidiary, holds, a 25% participating interest.

Subsequent to the balance sheet date, more than 480 net feet of natural gas pay in high quality reservoir sands with a gross column of more than 1,200 feet was encountered in Rovuma Basin, Area 1, offshore Mozambique, wherein one of the subsidiaries of the Company holds 10% participating interest.

Meanwhile, the Company continues to reap dividends from its oil & gas venture in Rawa Oil & Gas Field in India.

TELECOM

Videocon Telecommuncations Limited ("VTL"), (formerly Datacom Solutions Limited), one of the subsidiaries of the Company, has been awarded License to provide Unified Access Services in 21 local service areas and has also been allotted spectrum in 20 of these local service areas.

VTL is in process of launching the mobile services and has substantially completed creation of the basic infrastructure for the same. VTL has signed interconnect and roaming agreements with various operators and has entered into long term master service agreements with various reputed infrastructure providers for usage of their passive telecom infrastructure services. VTL plans to roll out its mobile services commercially in six circles by March 2010 and will be present in 11 Circles by June 2010. VTL plans to roll out the mobile services commercially in rest of the telecom service areas where spectrum has been allotted, by December 2010.

POWER

One of the subsidiaries of the Company, Pipavav Energy Private Limited ("PEPL") is implementing a Power project in Gujarat, near Pipavav port, Village Bherai, Taluka Rajula, Dist. Amreli, Gujarat. This will be a thermal power plant with a capacity of 1,200 MW and the same will be completed in two phases. PEPL has signed necessary Memorandum of Understanding with the Govt, of Gujarat whereby the Govt of Gujarat has agreed to provide all required support to the project. PEPL has obtained necessary environmental clearances from Gujarat Pollution Control Board for constructing the power plant and has also obtained CRZ clearance from State Department of Environment & Forest. Acquisition of the necessary land required for the first phase of the project has been substantially completed and PEPL has invited bids for key equipments and necessary civil work and bathymetric survey work.

The Company is also considering power projects in the other parts of the country and also evaluating alternate technologies for the same.

ISSUES/ALLOTMENT & FORFEITURE OF SECURITIES

During the year under review, 1,17,65,000 warrants were allotted at a price of Rs. 42.50 per warrant, on preferential basis, to Bennett, Coleman & Company Limited with an option to subscribe to 1,17,65,000 equity shares at a price of Rs. 170.00 per equity share inclusive of a premium of Rs. 160.00 per equity share, within a period of 18 months from the date of allotment.

Forfeiture of Equity Shares

The Board of Directors of the Company at its meeting held on 31st July, 2009, approved the forfeiture of 43,948 equity shares of face value of Rs 10/- each and cancelled the shares. These shares were allotted pursuant to the amalgamation of erstwhile Videocon International Limited with the Company and in respect of which the allotment/call money were due and unpaid.

MATERIAL EVENTS AFTER BALANCE SHEET DATE:

Post balance sheet date, 1,858,275 equity shares were allotted, on preferential basis, to Infotel Telecom Infrastructure Private Limited at a price of Rs. 242.16 per equity share inclusive of a premium of Rs. 232.16 per equity share.

Further, post balance sheet date, the Board of Directors of the Company approved in-principle issue of equity shares, on rights basis, for an amount not exceeding Rs. 1,200 Crores. The Company has filed Draft Letter of Offer with the Securities & Exchange Board of India.

APPROPRIATIONS

DIVIDEND:

Your directors are pleased to recommend a dividend of Rs. 21- (Rupees Two only) per equity share for the financial year ended on 30th September, 2009.

The dividend, if approved by the shareholders, will entail a payout of Rs. 541.14 million including dividend distribution tax of Rs. 78.61 million. The dividend is free of tax in the hands of the shareholders.

The dividend payout, as proposed, is in accordance with the Companys policy to pay sustainable dividend besides keeping in view the Companys need for capital, its growth plans and the intent to finance such plans through internal accruals.

TRANSFER TO GENERAL RESERVE:

Your directors propose to transfer Rs. 1,000.00 million to the General Reserve. An amount of Rs. 22,438.44 million is proposed to be retained in the profit and loss account.

FIXED DEPOSITS

The Company has never accepted any fixed deposit within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principle or interest was outstanding as of the Balance Sheet date.

PERSONNEL

A statement of the Particulars of Employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is annexed and forms part of this Report.

Your Company has an environment which is empowered, inclusive, driven by performance yet fun-filled with a diversified talent base.

- Creativity and Autonomy:

An individuals creativity is the basis for value creation. Your Company respects diversity and autonomy allowing each of its employees to exercise their creativity to the fullest.

- Emphasis on Competence:

Competence is the basis for performance. Your Company eyes competence as the most important factor in its personnel decisions.

- Equal Opportunities:

Equal opportunities build trust among people. Your Company ensures equal opportunities to all regardless of gender, race, age, religion or nationality.

- Long-Term Perspective:

Maintaining a long-term perspective is the foundation for your Companys Human Resource policies. Human Resource programmes are designed with a long-term perspective and implemented with dedication and persistence.

- Training:

Your Company offers diverse training programmes to its employees according to position to encourage learning and development. This is done by equipping them with the professional capabilities and enabling them to apply the latest technologies at work.

- Rewards:

Your Company offers its employees a competitive, unique rewards system which motivates employees to perform better by helping them to enhance their quality of life.

CONSERVATION OF ENERGY

"Energy saved is energy generated." Your Company strives for sustainable consumption of natural resources. The thrust of your Companys strategy Is to save energy through application of various efficiency measures.

During the year, the efforts of your Company maneuvered to innovation and improvement so as to further reduce energy consumption. A novel concept nomenclatured as "Resource Productivity" was coined by the management of your Company as a golden means to attain optimum utilization of available resources, especially renewable resources. Implementation of the said concept has led to improvement in over-all efficiency. The same was implemented at all the manufacturing facilities.

Better controls are planned to achieve further reduction in energy consumption. The manufacturing facilities of the Company are equipped with hi-tech energy monitoring and conservation systems to monitor usage, minimise wastage and increase overall efficiency at every stage of power consumption.

Some of the measures being undertaken by the Company in its endeavor to conserve energy are enumerated hereunder:

- Energy auditing at the manufacturing units;

- Improvement in power factors by installation of Capacitors;

- Use of advanced technology at manufacturing plants in the form of energy efficient equipments;

- Use of unconventional energy sources like solar energy in the form of solar water heater plant;

- Timely maintenance of machinery and equipments;

- On-the-job and off-the-job training for employees at all levels;

- Use of energy saving lighting arrangement in shop floor and on roads inside the facilities by using Electronics Ballast and CFL lamps;

- Reduction in power consumption;

- Display of Notice Boards and Information Boards at all work stations for information and awareness of the employees;

- Awareness programmes towards optimum utilization of natural resources; and

- Plantation of trees at all the manufacturing units. RESEARCH, DEVELOPMENT AND TECHNOLOGY ABSORPTION

Technology and Research & Development (R&D) go hand in hand. Your Company firmly believes that a sound R&D programme is a forte of every flourishing organisation and a well-planned R&D acts as a catalyst to foster innovation and enhance the interfaces in both, conventional and emerging technological arenas.

Accordingly, an in-house R&D team comprising of over 200 skilled engineers/experts in varied fields has been formed to keep pace with the rapid technological changes in the industry. The Company has Research and Development centre located in China, Aurangabad, Japan and Gurgaon.

Your Company is determined to develop its own technologies in select areas besides being an efficient user and customiser of available technologies. R&D and technology development are integral to your Companys innovation agenda for achieving growth, business profitability, sustainability and rural transformation.

The main thrust of the Companys R&D activities is upon strengthening of the current portfolio of products, looking for new concepts and product platforms, development of new technological platforms to support the consumer needs more effectively and introduction of a number of novel technologies in Consumer Electronics & Home Appliances. R&D work is in progress in the areas of basic technology, manufacturing skills, performance, quality, design and standardisation.

The Companys customer-oriented performance is backed by R&D activities. The Company has reinforced activities in advanced digital technology to deliver smart products which simplify life.

During the year under review, your Company has explored R&D avenues in an array of areas, some of them being:

- Home theaters - High-end models and HTIB Models.

- Larger Screen Television i.e. 32 inch and 38inch.

- True Flat Televisions. LCD TVs.

- Plasma Televisions.

- Cosmetic design and new out look to the TVs.

- Manufacturing of components for CTV, Refrigerators and Air conditioners.

- Developed high-end products to be offered to Indian market.

- Efforts to reduce power consumption of all its final products.

- Development of products suitable for Indian climate conditions, as well as same for export market.

- Introduction of TV with immense picture performance and razor slim design.

The Companys ongoing commitment to technology leadership coupled with its cutting-edge R&D capabilities has enabled it to consistently deliver innovative products that enhance and enrich life. In a nutshell, during the year, your Company was able to cash in on the following benefits:

- Developed new design in products and launched various new models.

- Developed high-end products to be offered to Indian market.

- Introduced Integrated Digital TV (iDTV) with a built-in digital decoder having MPEG 4 DVB-S2 Digital signal; Introduced LED TV with "Nano Pixels" for immense picture performance and Razor slim design; Introduced Unique "SMART TV, which set a platform for Internet TV" to enjoy the Live Chatting, Browsing, Video conferencing, email access, Blu Tooth connectivity etc.; and various other ranges/series of LCD TV with Full HD 1080p resolution.

- Introduced Star Rated Products in Consumer Electronics and Home appliances. With this technology, the customer can have benefit of saving approximately 15% of power consumption, resulting into effective utilization of power resources in the nation.

- Introduced paint less product with a unique Hot and Cold Technology for moulding of parts. This helps to reduce pollution generated due to hazardous chemicals used in plastic paints and its process. Customer can enjoy the high glossy finish with ultimate scratch resistance.

- Developed new ranges of Direct Cool as well as Frost Free refrigerators like Ecocool, Ecocool Plus, Ecofresh, Deofresh, Nutricool, Nutricool Plus, Powercool. Developed 4 & 5 Star rated refrigerators with new exterior finish i.e. PCM-Pre-coated material.

- Introduced new base stand with smart VEGI TRAY, which is unique and give convenience to customer in day to day usage.

- Introduced new economic series of Direct cool refrigerator as "Bharat series", to cater to each and every Indian family. This has given cutting edge solution for the competitors on the price factor.

- Introduction of the products on health platform with Deodorizer, which gives the solution to remove the odour created by rotten vegetables and fruits.

- Enhanced Frost Free refrigerator series with introduction of LED & LEDi technology.

- Increase in Productivity.

In near future, the Company is proposing to concentrate on all the areas mentioned earlier, hereinbefore and to focus efforts on new technologies which could offer better products in the domestic market. The Company aims to achieve R&D in the following areas:

- Manufacturing of components for consumer Electronics Products.

- Various models of Multimedia TV; iDTV; LCDTVs; LED & LEDi

- Plasma Televisions.

- Composite Home Entertainment system with internet adaptability.

- Better features, better quality & improved reliability with reduced/low prices.

During the year, your Company has incurred Rs. 92.76 million representing 0.10% of the turnover towards R&D, to enhance the competitiveness of our core business and develop tomorrows technologies.

As the management continues to expand its investment in core technologies and cutting-edge growth businesses, your Company ensures that its technology leadership, in India and abroad, grows stronger with every passing year.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars of Foreign Exchange Earnings and Outgo during the year are as set out hereunder:

(Rs. in Million)

Particulars For the year ended For the year ended 30th Sept., 2009 30th Sept., 2008

Foreign Exchange Earned 5,226.24 6,080.77

Foreign Exchange Used 13,962.01 14,113.62

The Company has taken various initiatives for exports and development of export markets for Consumer Electronics and Home Appliances to increase its foreign exchange earnings.

INFORMATION TECHNOLOGY

Information Technology and business are becoming inextricably interwoven. Nobody can meaningfully talk about one without talking about the other. Indeed, the growing influence of Information Technology as an enabler of business in todays time has made use of Information Technology indispensable. Information Technology, having made inroads into major industries, has left no aspect of our business and life untouched. Your Company firmly believes that an organization needs to have a digital nervous system for sustaining the cut-throat competition for the Numero Uno position in any sector of economy.

In due recognition of the key role played by Information Technology in revolutionizing the world, your Company has re-engineered its processes by leveraging Information Technology with an eye to building, sustaining and expanding its competitive edge.

Your Company has designed and implemented web based CRM application using ASP.NET 3.5 and SQL Server 2005. The robust and stable CRM application with comprehensive support enables handling of larger call volumes resulting into speedy response and prompt resolution of customers queries.

SAP Solutions have enabled your Company to leverage the benefits of integration in business operations, optimization of enterprise resources, standardized business processes thereby enabling standard operating practices with well established controls. This has enabled the Company to adopt best and standardized business processes across the functions. It has also benefited the management at all levels with business information which is on-line and reliable to control the business operations in a well- informed manner. Your Company has a scale-up data centre infrastructure to cater to the business requirements. During the year under review, SAP Bl Tool (Business Intelligence) was upgraded from 3.5 to 7 for providing intelligent and advance reporting functionality. There is secured and point-to-point VPN connectivity in its most of the branches and warehouses.

The Company has bagged SAP ACE Award, twice in a row, for "Best Consumer Sector Implementation" and "Excellence in Implementation of Various SAP Modules".

HEALTH AND SAFETY

Safety of persons overrides all Production targets - bearing this safety motto in mind, every business issue in your Company is discussed and every solution complies with the safety policy of your Company. The management of your Company believes that the employees are the heart and soul of the organization and hence, considers health and safety of its employees as its prime responsibility.

The health and safety platform of your Company is well supported by the safety management team which comprises of employee and management representatives. The team studies a plethora of health, safety and environment related issues at manufacturing plants and reports the observations along with requisite correctives measures, if any, to the management for necessary action. The Company arranges for and takes various measures to prevent occurrence of accidents on job. There is regular interaction between Corporate and the manufacturing units on the health and safety policy.

The health and safety initiatives adopted by the Company include:

- Conduct of safety audits.

- Accessibility of health and medical services to all employees through well equipped health centres at all manufacturing facilities.

- Medical camps, at regular intervals, to ensure fitness of its employees.

- Availability of ambulance, incase of emergency.

- On-the-job and off-the-job training programmes at regular intervals for upgradation of employees on awareness front.

- Display of evacuation plans at various locations to reach assembly point.

- Display of cautionary boards, notice boards and information boards at work stations for information and awareness of the employees.

- Close monitoring of health and safety activities to ensure maintenance of adequate standards.

ENVIRONMENT

Your Company is committed to sustainable development, for meeting the needs of the present without jeopardizing the welfare of future generations. The Companys business strategies consciously factor environment conservation as a major principle. The Company is continously looking for new ways to preserve the environment and manage resources responsibly. Your Company endeavours to be as eco-efficient as possible are unrelenting.

For your Company, economic, social and environmental responsibilities forms an integral part of its business. The eco-friendly initiatives adopted by the Company includes:

- setting new targets for energy efficiency.

- reducing the use of natural resources.

- promoting the use of alternative fuels and materials.

- re-engineering the processes and products to reduce energy consumption.

- tree-plantation campaigns.

- awareness programmes for employees at all levels.

The Company adopt clean technologies and processes that combine both economic progress and sustainable environment.

APPOINTMENT/RE-APPOINTMENT OF DIRECTORS

During the year under review, Dr. Birendra Narain Singh was appointed as a Nominee of IDBI Limited in substitution of Mr. B. Ravindranath. Further, Thomson S.A, withdrew its nomination of Mr. Didier Trutt from the Board of the Company. Also, AB Electrolux (Publ) substituted their nominee on the Board of the Company. Ms. Gunilla Nordstrom was nominated on the Board in place of Mr. Johan Fant.

At the Twentieth Annual General Meeting held on 30th March, 2009, Ms. Gunilla Nordstrom and Mr. Radhey Shyam Agarwal were appointed as Directors and Mr. Kuldeep Drabu retired at the said Annual General Meeting, since not offered himself for re-appointment.

Pursuant to the provisions of the Companies Act, 1956 and in terms of the Articles of Association of the Company, Mr. S. Padmanabhan, Mr. Karun Chandra Srivastava and Mr. Arun L. Bongirwar are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

Mr. Venugopal N. Dhoot was appointed to the office of Managing Director for a period of 5 years with effect from 01st September, 2005. The tenure of Mr. Venugopal N. Dhoot as Managing Director of the Company ends on 31st August, 2010. The Board of Directors of the Company has approved re-appointment of Mr. Venugopal N. Dhoot as Managing Director of the Company subject to the approval of shareholders at the ensuing Annual General Meeting.

The Board recommends re-appointment of Mr. S. Padmanabhan, Mr. Karun Chandra Srivastava, Mr. Arun L. Bongirwar as Director and Mr. Venugopal N. Dhoot as Managing Director. Brief profiles of each of these Directors, specifying their expertise in specific functional areas, public companies in which they hold Directorship and Committee Positions, is annexed to the Notice and forms part thereof.

LISTING

The equity shares of your Company are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Global Depository Receipts (GDR) and Foreign Currency Convertible Bonds (FCCB) issued by your Company are listed on the Luxembourg Stock Exchange and Singapore Exchange Trading Securities Limited respectively.

SUBSIDIARY COMPANIES

During the year under review, Videocon Indonesia Nunukan Inc., Senior Consulting Private Limited and Jumbo Techno Services Private Limited became subsidiaries of the Company whereas Videocon (Mauritius) Infrastructure Ventures Limited and consequently Investcon Singapore Holdings Limited ceased to be the subsidiaries of the Company.

As such, as on 30th September, 2009, your Company had 23 (Twenty- three) subsidiaries (including step-down subsidiaries) viz.. Datacom Telecommunications Private Limited; Eagle Ecorp Limited; Videocon JPDA 06-103 Limited (formerly, Global Energy Inc.); Godavari Consumer Electronics Appliances Private Limited; Jumbo Techno Services Private Limited; Mayur Household Electronics Appliances Private Limited; Middle East Appliances LLc; Paramount Global Limited; Pipavav Energy Private Limited; Powerking Corporation Limited; Senior Consulting Private Limited; Sky Billion Trading Limited;Venus Corporation Limited; Videocon Displays Research Company Limited; Videocon Energy Brazil Limited (formerly: Videocon Global Energy Holdings Limited); Videocon Global Limited; Videocon Indonesia Nunukan Inc. (formerly: Spectrum Overseas Inc.); Videocon International Electronics Limited; Videocon Mozambique Rovuma 1 Limited (formerly: Videocon Energy Resources Limited); Videocon Energy Ventures Limited; Videocon Oman 56 Limited (formerly: Videocon Hydrocarbon Holdings Limited); Videocon Telecommunications Limited (formerly: Datacom Solutions Limited); and Wei You Kang Electronic (Shenzhen) Limited.

Ministry of Corporate Affairs, Government of India has granted approval that the requirement to attach various documents in respect of subsidiary companies, as set out in sub-section (1) of Section 212 of the Companies Act, 1956, shall not apply to the Company. 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. Financial information of the subsidiary companies, as required by the said approval, is disclosed in the Annual Report. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies, joint ventures and associates, in accordance with relevant Accounting Standards of the Institute of Chartered Accountants of India.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies investors seeking such information at any point of time and the annual accounts of the subsidiary companies will also be kept for inspection by any investor at the Registered Office of the Company as well as the respective Registered Offices of subsidiary companies. Further, the summarized financial information of the subsidiary companies is also available on the website of the Company viz., www.videoconworld.com

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements, based on the Financial Statements received from the subsidiaries, associates and joint ventures, as approved by their respective Board of Directors, have been prepared in accordance with the requirements of Accounting Standard 21 on Consolidated Financial Statements, Accounting Standard 27 of Financial Reporting of Interests in Joint Ventures and Accounting Standard 23 on Accounting for Investments in Associates in Consolidated Financial Statements.

CASH FLOW STATEMENT

The Cash flow Statement for the year ended 30th September, 2009, in conformity with the provisions of Clause 32 of the Listing Agreement with the Stock Exchanges in India, is annexed hereto.

AUDITORS REPORT

The Auditors Report is unqualified. The observations made in the Auditors Report, read together with the relevant notes thereon, are self-explanatory and hence, do not call for any comments under section 217 of the Companies Act, 1956.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and M/s. Kadam & Co., Chartered Accountants, Ahmednagar, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed eligibility and willingness to accept office, if re-appointed. The Company has received certificates from the said Auditors to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224( 1B) of the Companies Act, 1956.

The Board recommends their re-appointment.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report, highlighting the performance and prospects of the Companys business, forms part of the Annual Report.

CORPORATE GOVERNANCE¦

It has been the endeavour of your Company to follow and implement best practices in corporate governance, in letter and spirit. Your Company is committed to maintain the highest standards of Corporate Governance.

The Directors adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India and have implemented all the stipulations prescribed.

A detailed Corporate Governance Report is included in the Annual Report. A certificate from the Auditors of the Company regarding compliance with the conditions of corporate governance as required under Clause 49 of the Listing Agreement with the Stock Exchanges in India, forms part of the said report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) In the preparation of the annual accounts for the year ended 30th September, 2009, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th September, 2009 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts of the Company on a going concern basis.

TOKEN OF APPRECIATION

The Board applauds its employees of the Company for their alacrity and dedication to stabilize the companys operations in the tough market conditions.

The Board places on record its sincere thanks and appreciation for the continuing support of the dealers, vendors, business associates and employees in ensuring an excellent all-round operational performance. Your Directors also place on record their heartfelt gratitude to the Government Authorities, Banks and Financial Institutions for their support and guidance in navigating the Company through thick and thin.

The Board is also grateful to you for your support, especially during the challenging times. The Company salutes its shareholders for their undeterred faith in the credentials of the Company.

Your Directors look forward to their continued support in the future as well.

For and on Behalf of the Board of Directors of VIDEOCON INDUSTRIES LIMITED

Venugopal N. Dhoot Chairman & Managing Director

Place: Mumbai

Date: 27th February, 2010