Moser Baer (India)

The Directors are pleased to present the 25th Annual Report and
 Audited Accounts for the financial year ended March 31, 2008. This is a
 milestone year for Moser Baer being the 25th year since the founding of
 the Company in 1983.
 
 Financial Results
 
                                              (Rupees in Million)
 Particulars                                  Year ended March 31,
                                           2008                 2007
 
 Gross sales and other income             20,873.1           21,533.7
 
 Profit before depreciation,               5,339.8            6,022.1
 interest and tax but after prior
 period items
 
 Depreciation                              4,315.9            3,578.7
 
 Interest and finance charges              1,793.6            1,244.9
 
 Profit/(Loss) before tax                   (769.6)           1,198.5
 
 Tax expenses                                 19.4              100.6
 
 Profit/(Loss) after tax                    (789.1)           1,097.9
 
 Profit/(Loss) carried forward
 from last year                            1,246.3              399.6
 
 Profit/(Loss) available for
 appropriation                               457.2            1,497.5
 
 Appropriations:
 
 Transfer to profit and loss account         260.1            1,301.6
 
 Dividend (proposed)%                           10                 15
 
 Operations
 
 Revenues for FY 08 stood at 20,873.1 million, Profit before
 depreciation, interest and tax stood at Rs. 5,339.8 million, and Loss
 after tax was Rs. 789.1 million. Turnover was impacted during the year
 by the strengthing of rupee and difficult business environment.
 Aggressive pricing and flat sales volumes were the two major
 contributory factors affecting the bottom line. However, net operating
 cash flow continues to be strong at Rs. 3,062.8 million on the back of
 judicious capex spends and working capital control.
 
 Industry consolidation and increasing demand traction in Blu-Ray are
 the positive hues to an otherwise sedate industry environment in near
 to medium term. Long term variables still remain healthy as need for
 storage and consumer demand continues to grow.
 
 Market Development
 
 Your Company continues its strategy to straddle the value chain, using
 innovation and product development to develop new markets. The success
 of this strategy has been reflected in the increase in market share
 with retail private labels and other select distribution channels. This
 has been accompanied by development of new products and product
 variants as specials and value-added products.
 
 New Products
 
 During the year, your Company introduced a number of new Products,
 including BDR 1X-6X, DVDR 8X Dual Layer, Double sided recordable discs,
 Diamond CDR and Archival Media. The Companys in-house product
 development team successfully created new products for specialized
 customers.  The Company launched Professional Select Media, developed
 for the professional duplication market and CPRM Media with content
 protection for the Japanese Market.
 
 Acquisitions
 
 Last years acquisition of OM&T (an erstwhile subsidiary of Philips)
 has added significant value to your Companys position. It has enabled
 us to emerge as a frontrunner in the next generation BDR formats, given
 OM&Ts pioneering R&D work in the Blu-ray disc technology.
 
 Photo Voltaic Project
 
 Moser Baer Photo Voltaic Limited (MBPV) is moving towards technological
 leadership and sustainable competitive edge in this industry by
 investing in disruptive technologies. The Company has placed itself in
 a vantage position by spreading itself across the value chain and by
 developing expertise across multiple existing and future technologies.
 The global photovoltaic market is on a high growth curve and experts
 expect it to be worth US$ 40 billion by 2010.
 
 MBPV achieved revenues of US$ 42.2 million in FY08.The 40 MW
 crystalline silicon line is being expanded to 80 MW, as planned, by the
 end of 2008. The production capacity of solar modules has been expanded
 to 40 MW.
 
 MBPV has tied up significant customer orders and MoUs, including two
 solar farms in Rajasthan and Punjab. The Company is aggressively
 pursuing tie-ups in several states to drive grid-connected solar farms
 to demonstrate their techno-economic viability and attractive returns
 as a source of green peaking power. The company is on track to ramp up
 the crystalline silicon cell line capacity to 180 MW in FY09 and is
 tying up equipment for the 600 MW expansion of thin film capacity. The
 thin film project facility is nearing completion with commencement of
 mechanical trials expected in early May 2008.
 
 Content Business
 
 During the financial year, the Companys entertainment business
 achieved break-even and has registered revenues of US$ 38.5 million for
 FY07. Your Company released Shaurya, its first Hindi feature film, and
 Vellitharai, its first Tamil film, in theatres across India. Emphasis
 on acquiring new title releases should give further impetus to the
 growth of the business, which remains on track to achieve revenues in
 excess of US$ 200 million by 2010.
 
 Consumer Electronics
 
 The Company is entering high growth areas in consumer electronics and
 launching multiple products. Your Company offers the best quality
 products, which are available at all major retail counters and major
 large format retail chains like Croma, Reliance, Jumbo, etc. Your
 Company has got a very god response for DVD Players and digital photo
 frames.
 
 Your Company has launched the following products under its own brand
 name:
 
 - Four models of DVD players
 
 - A model of home theatre system
 
 - A model of Digital Photo Frame (DPF).
 
 Further, your company is in the process of launching the following
 products:
 
 - Eight models of LCD TVs
 
 - MP3 and MP4 players - More DPF models
 
 - More DVD players.
 
 Subsidiary Companies
 
 Under the provisions of Section 212(8) of the Companies Act, 1956, the
 Ministry of Corporate Affairs vide its letters dated 13/03/2008 and
 27/05/2008 granted the exemption under Section 212(8) of the Companies
 Act, 1956 from attaching the documents required under Section 212 of
 the Companies Act, 1956. The information required to be published in
 terms of the provisions of Section 212(1) of the Companies Act, 1956 is
 available for inspection by the investors of the holding Company and
 the subsidiary Companies at the registered office of the Company
 located at 43B, Okhla Industrial Estate, Phase III, New Delhi - 110
 020.
 
 Dividend
 
 Your Directors are pleased to recommend a dividend @ 10% on the paid-up
 Equity Share Capital of the Company for the financial year 2007-08. The
 total payout will be Rs. 19.7crore, inclusive of dividend tax and
 surcharge thereon.
 
 Directors
 
 In terms of the provisions of Sections 255 and 256 of the Companies
 Act, 1956 and the Articles of Association of the Company, Mr. Arun
 Bharat Ram (Director) and Mr. Bernard Gallus (Director), retire at the
 ensuing Annual General Meeting and being eligible, have offered
 themselves for re-appointment.
 
 Auditors
 
 Price Waterhouse, Chartered Accountants, hold office until the
 conclusion of forthcoming Annual General Meeting and, being eligible,
 offer themselves for reappointment. The Company has received intimation
 to the effect that their reappointment, if done, will be within the
 limits laid down under Section 224(1 B) of the Companies Act, 1956.
 
 Bonus Issue
 
 During the Financial Year 2007-08, your Company announced an issue of
 Bonus Equity Shares in the ratio of 1:2 (one share for every two shares
 held) by capitalizing the reserves. As a result 56,077,035 Bonus Equity
 Shares were issued to the shareholders who were members or beneficial
 shareholders at the close of business hours on the record date i.e.
 July 18, 2007.
 
 Stock Options Plans
 
 The shareholders of the Company at the Annual General Meeting held on
 June 15,2007, gave their approval to amend the Directors Stock Option
 Plan (DSOP-2005) to increase the number of Equity Shares to be issued
 under DSOP-2005 from 450,000 to 1,000,000 and each Non-Executive
 Director is now entitled to receive a maximum of 100,000 stock options.
 Thus, 300,000 additional stock options were granted to the
 Non-Executive Directors of the Company. Further, pursuant to the
 declaration of the Bonus Equity Shares, the Compensation Committee of
 the Board of Directors decided to extend the benefit of the bonus issue
 to the employees and Non-Executive Directors who have the outstanding
 stock options under Employees Stock Option Plan (ESOP-2004) and
 Directors Stock Option Plan (DSOP-2005). Thus, each employee and
 Non-Executive Directors holding outstanding stock options on the record
 date of bonus issue were granted bonus stock option in the ratio of
 1:2, i.e. one bonus stock option for every two stock options held.
 
 Foreign Currency Convertible Bonds (FCCB)
 
 Pursuant to approval of the shareholders in the Annual General Meeting
 held on June 15, 2007, your Company raised US$ 150 million through
 issue of Foreign Currency Convertible Bonds (FCCBs) with tenure of five
 years from their allotment. The issue received overwhelming response
 from the investor community and was oversubscribed by 2.25 times the
 issue size. The FCCB was issued in two tranches, with Tranche A being
 US$ 75 million and having a yield to maturity of 6.10% and a conversion
 premium of 25% over the closing price of Rs. 436.75 on the Bombay Stock
 Exchange (BSE) on June 4, 2007 and Tranche B being US$ 75 million with
 a yield to maturity of 6.75% and a conversion premium of 40% over the
 BSE closing price of Rs. 436.75 on June 4, 2007. The bonds are listed
 on the Singapore Exchange Securities Trading Limited.
 
 Particulars of Employees
 
 Particulars of employees, as required under Section 217(2A) of the
 Companies Act, 1956, read with the Companies (Particulars of Employees)
 Rules, 1975, as amended, form part of this report. However, in
 pursuance of Section 219(1 )(b)(iv) of the Companies Act, 1956, this
 report is being sent to all shareholders of the Company, excluding the
 aforesaid information and the said particulars are made available at
 the Registered Office of the Company. The members interested in
 obtaining such particulars may write to the Company Secretary at the
 Registered Office of the Company.
 
 Conservation of energy, research and development, technology
 absorption, foreign exchange earnings and outgo
 
 The information pertaining to conservation of energy, technology
 absorption, foreign exchange earnings and outgo, as required under
 Section 217(1)(e) of the Companies Act, 1956, read with the Companies
 (Disclosure of particulars in the report of the Board of Directors)
 Rules, 1988 is given as per Annexure B and forms part of the
 Directors Report.
 
 Fixed Deposits
 
 During the year under review, your Company has not accepted any deposit
 under Section 58A of the Companies Act, 1956, read with Companies
 (Acceptance of Deposits) Rules, 1975.
 
 Corporate Governance
 
 A report on Corporate Governance, along with a certificate from the
 Statutory Auditors and a certificate from the Managing Director and
 Group CFO, have been included in the Annual Report, detailing the
 compliances of Corporate Governance norms as enumerated in Clause 49 of
 the Listing Agreements with the stock exchanges.
 
 Management Discussion and Analysis
 
 The Management Discussion and Analysis Report is attached and forms
 part of the Directors Report.
 
 Directors Responsibility Statement
 
 Your Directors state:
 
 I.  That in the preparation of the annual accounts, the applicable
 accounting standards have been followed;
 
 II.  That we have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the financial year 2007-2008 and of the
 profit of the Company for that year;
 
 III.  That we 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
 
 IV. That we have prepared the annual accounts on a going concern basis.
 
 Conclusion
 
 Your Company has outperformed the industry in a challenging year and
 continues to maintain its leadership position. It has also been
 surpassing all international quality and cost benchmarks and continues
 to build shareholder value. Your Directors look to the future with
 confidence. Your Directors place on record their appreciation for the
 overwhelming cooperation and assistance received from investors,
 customers, business associates, bankers, vendors, as well as regulatory
 and government authorities. Your Directors also thank the employees at
 all levels, who, through their dedication, cooperation, support and
 smart work, have enabled the Company to achieve rapid growth.
 
 
 
                           For and on behalf of the Board of Directors
 
                                           Sd/-
 Place: New Delhi                     Deepak Puri
 Date : 22.05.2008               Chairman & Managing Director