Kinetic Motor Company

Chairman's Message
 
 Dear Shareholders
 
 Last year was a year of revelation for us. We had taken for ourselves a
 mandate that we will successfully launch and showcase our company's
 product development skills in scooters. With this in mind, we had
 identified two important areas of growth, four stroke modern scooters,
 and entry- level scooterettes for the college going youth of the
 country. It is indeed a matter of pride for us that we achieved our
 goal with remarkable success.  Last year, we launched a four stroke
 scooter Kinetic Nova and our scooterette Kinetic Zing and I am happy to
 say that both were received enthusiastically by the market. They were
 successful in the market as well as received critical acclaim.
 
 The Nova won both the Scooter of the Year awards this year from
 eminent automobile magazines Business Standard Motoring and Overdrive.
 The Nova also won the award for design excellence in automobile design
 from prestigious National Institute of Design (NID) and leading
 business magazine Businessworld. These three simultaneous feathers in
 our cap is a rare and exceptional feat for any product manufacturer and
 I think we should be proud of our company and its product development
 capabilities. The Kinetic Zing also received much critical acclaim and
 had made quick and successful inroads into the important and growing
 scooterette market.
 
 We now have a very strong range of products in the modern scooters
 segment with the Nova. Zing and our classic Zoom which remains India's
 most loved scooter. My expectation of the modern scooters segment is
 that it will continue to grow and thrive, and to take away numbers from
 the declining traditional scooter segment. The basic proposition of
 modern scooters remains very strong in urban areas with congested
 traffic conditions, the comfort and convenience of electric start and
 variomatic transmission is a real blessing to the harried commuter.
 Additional appeal comes from the usage universality that the modern
 scooter is a product suitable for everyone across all genders, age and
 income distribution. This makes it the ideal vehicle of choice for
 modern families. With the Nova and Zing, we have achieved breakthrough
 in mileage delivery, style statement and utility of storage space. I
 believe that our products are better than any others the Indian market
 has seen, and will continue to capture market share.
 
 In addition, this year, we revamped our distribution network by 430
 numbers. Significant cost reduction was achieved through a series of
 cost cutting measures including vendor base rationalization and
 renegotiation of our debt.
 
 I believe that with this groundwork laid out, our company is now ready
 to emerge as a strong player in the scooters industry. As we know,
 India is the second largest two wheeler market in the world -1 believe
 that this is a very good industry to be present in today. And I am
 confident that next year, we will see ample growth and success in this
 segment.
 
 Thank you,
 
 Arun Firodia,
 Chairman