Videocon Industries

The Board of Directors of your Company are delighted to present the
 Nineteenth Annual Report together with the Audited Accounts, Auditors
 Report and the Audited Consolidated
 
 Financial Statements for the year ended September 30,
 2007.
 
 FINANCIAL RESULTS
 
 The ptterformance of the Company, on standalone basis, for the
 financial year ended September 30, is as summarized below:
 
                                                    Rs. Millions
 
 Particulars                          Year ended      Year ended
                                      30.09.2007      30.09.2006
 Net Sales                             82,854.24       72,188.17
 Other Income                           1,863.62        1,654.44
 Total Income                          84,517.86       73,842.61
 Profit before Interest, Depreciation
 and Tax                               18,119.35       14,750.93
 Interest & Finance charges             3,106.51        2,258.80
 Depreciation                           4,183.88        3,355.47
 Profit before Tax                     10,828.96        9,136.66
 Provision for Taxation                 2,276.77          951.64
 Profit after Tax                       8,552.19fsfs        8,185.02
 
 
 The Topline of the Company increased from Rs. 72,188.17 Million as on
 September 30, 2006 to Rs. 82,854.24 Million representing an increase of
 14.78% over the previous financial year. Similarly, Profit after Tax
 increased from Rs. 8,185.02 Million as on September 30, 2006 to
 Rs.8,552.19 Million for the year under review, representing an increase
 of 4.49% over the previous financial year.  Highlights on the
 performance of the Company, during the year under review i.e., upto
 Balance Sheet Date and material developments after the year under
 review, i.e., after Balance Sheet Date are summarized hereunder:
 
 During the year, with a view to diversify its activities in order to
 derisk the business model, the Company identified power generation;
 trading and dealing in various minerals including coal required for
 electricity/power generation; and telecommunication, as emerging
 business for expansion(s) and diversification(s), while retaining the
 focus on its prime business segments viz., Consumer Electronics Goods
 and Home Appliances and Exploration of Oil and Natural Gas. The
 Shareholders of the Company accorded their consent for altering the
 Memorandum of Association by passing special resolution by Postal
 Ballot so as to enable the Company to undertake diverse activities, as
 aforesaid.
 
 During the year, the Company continued its growth path in the Consumer
 Electronics & Home Appliances Business. The business acquired from
 Electrolux pursuant to the amalgamation of EKL Appliances Limited with
 the Company started yielding its result by improving the Companys
 market share in the Household segment.
 
 As the members are aware, the Company has participating interests in
 Oil & Gas exploration activities in Australia, Timor Sea and Oman. You
 are also aware that your Company, jointly with Bharat Petroleum
 Corporation Limited, has signed an agreement with Encana, Canada for
 buying Encanas participating interest in Brazil exploration
 activitiestExploration activities are on as per the agreed exploratio
 programmesat the respective oil fields and the results are expected in
 the comingyear or so.
 
 With a view to enable the Company to tap the global equity market, as
 and when, the first exploration exercise gets converted into a proven
 field, it is decided to compile all the global exploration activities
 into an Offshore Company. This Offshore Company is proposed to be
 listed on London Stock Exchange at AIMs.  The Company, through one of
 its subsidiaries, has been granted a Letter of Intent for providing
 mobile phone services on Pan India basis. The subsidiary has made
 requisite payments of Rs.1650 crores and provided requisite guarantee
 of Rs.850 crores to Government of India as the licence fees. The
 license agreement and the spectrum allotment are expected to be
 completed in due course of time. The Company is now engaged in drawing
 up business plans for launch of mobile phone services on Pan India
 basis as and when the spectrum release in various circles takes place.
 
 Issue/Allotment of Securities:
 
 During the year, under review, the Company allotted 416 equity shares
 to the shareholders of erstwhile EKL Appliances Limited, pursuant to
 scheme of amalgamation of EKL Appliances Limited with the Company.
 During the year, under review, in accordance with the terms and
 conditions of Issue of Foreign Currency Convertible Bonds, the Company
 allotted 107,452 equity shares, pursuant to the Conversion of Foreign
 Currency Convertible Bonds, as under: Conversion of FCCBs of US,000
 each, due on March 07,2011, at a conversion price of Rs. 448.59 per
 equity share:
 
 S.No.  Date of Allotment       Number of
                                Bonds Converted
 
 1      May 29, 2007            500
 2      June 23,2007            500
 
 Amount of             Number of
 Bonds Converted       Equity Shares
 US$)                  allotted pursuant
                       to conversion
 500,000               49,204
 500,000               49,204
 
 2.  Conversion of FCCBs of US,000 each, due on July 25, 2011, at a
 conversion price of Rs.507.00 per equity share:
 
 S.No.  Date of Allotment        Number of
                                 Bonds Converted
 
 1     June 23, 2007              99
 Amount of             Number of
 Bonds Converted       Equity Shares
 (US$)                 allotted pursuant
                       to conversion
 
 99,000                    9,044
 
 Allotment of Securities after Balance Sheet Date:
 
 Subsequent to the Balance Sheet Date, in accordance with the terms and
 conditions of Issue of Foreign Currency Convertible Bonds, the Company
 allotted 8,339,350 equity shares, pursuant to the Conversion of Foreign
 Currency Convertible Bonds, as under:
 
 1.  Conversion of FCCBs of US,000 each, due on March 07.2011, at a
 conversion price of Re 477.59 per sharp
 
 S.No Date of Allotment             Number of
                                    Bonds Converted
 
 1    December 17,2007             10.350
 2    January 10, 2008             26,150
 3    January 30, 2008             10.500
 
 Amount of             Number of
 Bonds Converted      Equity Shares
 (US$)               allotted pursuant
                     to conversion
 
 10.350,000          1,018,523
 26.150.000          2.573,371
 10,500,000          1,033,286
 
 2.  Conversiont of FCCBs of US,000 each, due on July 25, 2011, at a
 conversion price of Rs 477 06.per shnrp
 
 S.No Date of Allotment             Number of
                                    Bonds Converted
 
 1     December 17,2007             13,900
 2     January  10,2008             22,500
 3     January  30,2008             1,850 
 
 Amount of             Number of
 Bonds Converted      Equity Shares
 (US$)                allotted pursuant
                      to conversion
 
 13,900,000           1,349,726
 22,500,000           2,184,805
 1,850,000              179,639
 
 APPROPRIATIONS
 
 DIVIDEND:
 
 In accordance with the Companys policy of balancing dividend pay-out
 with the requirement of deployment of internal accruals for its growth
 plans, your directors have pleasure in recommending a dividend of 35%
 (Rs. 3.50 per share) on equity shares for the financial year ended on
 September 30. 2007, subject to approval by shareholders at the
 Nineteenth Annual General Meeting. The dividend on equity capital,
 including dividend on shares issued pursuant to conversion of FCCBs,
 amounting to Rs. 803.02 Million, if approved by the members at the
 ensuing Annual General Meeting, would be paid out of the profits for
 the year. The dividend is free .of tax in the hands of the
 shareholders.
 
  TRANSFER~TO RESERVES
 
 Your Board proposes to transfer Rs. 2,000 Million to the General
 Reserve. After appropriations, the balance amount of Rs. 14,516.42
 Million (Previous year 8,380.87 Million) is proposed to be carried to
 Balance Sheet.
 
 TRANSFER InVESTOR EDUCATION & PROTECTION FUND
 
 The Company has transferred a sum of Rs. 52,12,108 /- in respect of
 unclaimed/unpaid dividend for 1999-2000 and Rs. 31,19,526/- in respect
 of unclaimed/unpaid debenture redemption amount, to Investor Education
 & Protection Fund, since the amount was due & payable and remained
 unclaimed and upaid for a period of seven years, in terms of Section
 205A(5) of the Companies Act, 1956.
 
 FIXED DEPOSITS 
 
 The Company has not accepted any deposit within the meaning of Section
 58A of the Companies Act, 1956.
 
 CONSERVATION OFENERGY
 
 The Company continues to emphases on conservation of energy, power and
 other energy sources. As a part of continuous efforts, your Company has
 taken the following steps:
 
 * All the new manufacturing facilities of the Company are equipped with
 hi-tech energy monitoring and conservation systems to monitor usage,
 minimize wastage and increase overall efficiency at every stage of
 power consumption.
 
 * Use of energy saving lighting arrangement in shop floor and on roads
 inside manufacturing facilities.
 
 * Utilization of unconventional energy source such as Solar Energy.
 
 * Timely maintenance & up-gradation of machinery & equipments to ensure
 that theenergy consumption is as minimal as possible.
 
 * The Company has formed a team of the expert engineers engaged in the
 production activity for taking up detailed study under guidance of
 management, by attending seminars, obtaining expert opinion, research,
 on the possibilities of use of various methods of optimum use of energy
 without affecting the productivity and educating the production team
 members as well as whole of the staff to conserve energy.  The Company
 takes environment conservation seriously. It is working to equip its
 facilities with methods that help recycle CRT glass, curb carbon
 emissions and other pollutants. The Company at Bharuch glass plant has
 supported plantation of over 2,00,000 teak trees.
 
 RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
 
 The Company is committed to introduce new products and improve existing
 products to meet the ever-increasing demands of the consumers by fully
 exploring technological options and advancements. The Company gives
 utmost importance to the Research & Development activities.  The R&D
 activities are carried out at in-house R&D Centre of the Company
 located in Aurangabad.
 
 The focus is on developing new products in line with market demand,
 improving production efficiency and lowering the cost of production.
 
 1.  Specific areas in which R&D carried out by the Company:
 
 The Company has carried out Research and Development in the following
 areas:
 
 - Development of new products; application and innovative equipments.
 - Improvement in operating efficiencies.
 - Reduction in manufacturing cost.
 - Improvement in the quality of products.
 
 2.  Benefits derived as a result of the above R&D:
 The Company has derived the following benefits as-a result of Research
 and Development:
 
 * Superior range of components viz., panels and funnels to meet the
 demand for large-size flat and slim CRT display products.
 
 *  Innovation of CRT Glass that intercepts harmful x-rays and conforms
 to healthregulation world wide.
 
 * Reduction in cost i.e., cost savings.
 
 * Highest Value to the Customers.
 
 * Quality, reliability, durability, improvement and performance of the
 products have increased thereby resulting in more acceptance of the
 products.
 
 * Launch of new models with latest technology.
 
 3.  Future plan of action:
 
 In the coming days, the Company is aiming to achieve development in the
 following areas through Research and Development:
 
 * Continuous up-gradation of R&D centre facilities to world class
 levels.
 
 * Launching of New Brands under Videocon umbrella.
 
 * Reducing the electricity consumption for consumer electronics and
 home appliances.
 
 * To bring in features of various products together.
 
 * Development of latest technologies like Super True Flat CPT, Extra
 Slim CPT; HD 16:9 format CPT.During the year under review, Company has
 incurred revenue expenditureof Rs. 0.95 million (0.001% of the turnover
 on Research & Development.  Your Company is using the latest advances
 in technology for production.  Taking into consideration the
 advancements in technology, the Company continues to upgrade its
 technical base to meet the needs of the consumers.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 During the year under review, the earnings in Foreign Exchange amounted
 to Rs. 4,381.24 Million (previous year Rs. 4,578.32 Million) and outgo
 in Foreign Exchange was Rs. 10,136.77 Million (previous year 12,119.92
 Million).
 
 INFORMATION TECHNOLOGY
 
 Your Company believes that Information Technology is the backbone of
 any industry in todays environment. The Company has taken it as a tool
 to improve productivity, efficiency and reliability.  As such, mySAP, a
 Customized ERP Module, has already been substantially implemented at
 manufacturing facilities and branches of the Company, in India and
 foreign operations.
 
 HEALTH, SAFETY ANDENVIRONMENT
 
 Your Company recognizes its role in health and safety, as well as its
 responsibility towards environment and society. The health and medical
 services are accessible to all employees through well-equipped
 occupational health centers at all manufacturing facilities. Safety and
 security of the personnel, assets and environmental protection are also
 on top of the agenda of the Company at its manufacturing facilities.
 
 Clean environment and sustainable development integrated with the
 business objective is the focus of operations of the Company. The
 projects and activities are planned and designed with environment
 protection as an integral part to ensure a safe and clean environment
 for sustainable development.
 
 APPOINTMENT/RE-APPOINTMENT OF DIRECTORS
 
 During the year under review, Mr. Sanjiv Krishnaji Shelgikar and Mr.
 Ciaes John Bygge resigned from the office of the Board of Directors of
 the Company. The Board places on record its sincere appreciation for
 the valuable guidance received from them during their tenure as members
 of the Board of Directors of the Company.
 
 During the year under review, Mr. Karun Chandra Srivastava was
 appointed as an additional director. In terms of the provisions of
 Section 260 of the Companies Act, 1956.  Mr. Karun Chandra Srivastava
 holds office upto the date of ensuing Annual General Meeting.  The
 Company has received a notice in writing from a member alongwith a
 deposit of Rs. 500/- proposing the candidature of Mr. Karun Chandra
 Srivastava for the office of the Board of Directors of the Company
 under the provisions of Section 257 of the Companies Act, 1956. The
 Board recommends appointment of Mr. Karun Chandra Srivastava.  in terms
 of the provisions of Section 255, 256 of the Companies Act.  1956, the
 Articles of Association of the Company, Mr. DidierTrutt, Mr.  Satyapal
 Talwar and Mr. Arun Laxman Bongirwar are liable to retire by rotation
 at the ensuing Annual General Meeting and, being eligible, they have
 offered themselves for re-appointment The Board recommends their
 re-appointment(s).
 
 The brief profiles of directors being appointed/re-appointed at the
 ensuing Annual General Meeting forms part of notice of the ensuing
 Annual General Meeting.  The details of employees drawing remuneration
 in excess of the monetary ceiling prescribed under Section 217(2A) of
 the Companies Act, 1956, read with the Companies (Particulars of
 Employees) Rules, 1975, during the financial year 2006-2007 is annexed
 to this report.
 
 LlSTING 
 
 The Equity Shares of the Company are listed on the Bombay Stock
 Exchange Limited and National Stock Exchange of India Limited. The
 Global Depository Receipts are listed on The Luxembourg Stock Exchange.
 The Foreign Currency Convertible Bonds are listed on Singapore Exchange
 Trading Securities Limited
 
  SUBSIDIARY COMPANIES 
 
 During the year under review, Sky Billion Trading Limited, Global
 Energy Inc.. and Videocon Display Research Company Limited became
 subsidiaries of the Company. Further, Mars Overseas Limited and Gajanan
 Electronics and Supply Private Limited ceased to be subsidiaries of the
 Company.  As such, as on 30th September 2007, the Company had 12
 subsidiaries viz., Paramount Global Limited, Middle East Appliances
 LLC, Videocon Global Limited, Powerking Corporation Limited, Godavari
 Consumer Electronics Appliances Private Limited, Mayur Household
 Electronics Appliances Private Limited, Videocon (Mauritius)
 Infrastructure Ventures Limited, Eagle Corporation Limited, Venus
 Corporation Limited, Sky Billion Trading Limited, Global Energy Inc.,
 and Videocon Display Research Company Limited.
 
 The Company has received an exemption from the Central Government u/s
 212(8) of the Companies Act, 1956 with regard to attaching of the
 balance sheet, profit and loss account and other documents of the
 subsidiaries for the year 2006-2007.
 
 The Company undertakes that:
 
 1.  The Annual Accounts of the subsidiary companies and the related
 detailed information will be made available to any member seeking such
 information, on free of cost basis, at any point of time upon receipt
 of request for the same.
 
 2.  The Annual Accounts of the subsidiary companies will also be kept
 for inspection by any investor at the Registered Office of the Company
 and at the Registered Office of the Subsidiary Company also.  A summary
 of the key financials of the Companys subsidiaries is included in this
 report.
 
 CONSOLIDATED FINANCIAL STATEMENTS 
 
 The Directors present the consolidated financial statements, duly
 incorporating the Companys 100% ownership interest in Paramount Global
 Limited, Middle East Appliances LLC, Mars Overseas Limited (Upto 26th
 September 2007), Videocon Global Limited, Powerking Corporation
 Limited, Gajanan Electronics Supply Private Limited (Upto 26th
 September 2007 ), Mayur Household Electronics Private Limited, Godavari
 Consumer Electronics Appliances Private Limited, Eagle Corporation
 Limited, Venus Corporation Limited, Videocon (Mauritius)
 Infrastructures Ventures Limited, Sky Billion Trading Limited (w.e.f.,
 21st November 2006), Global Energy Inc (W.e.f.. 10th October 2006) and
 Videocon Display Restarch Company Limited (w.e.f., 09th March 2007).
 
 The Consolidated financial results also includes interest through Eagle
 Corporation Limited (subsidiary) in Technologies Display Americas LLC,
 Technologies Displays Mexicana S.A. de.  CV, TTD International S.A, TDP
 Spzoo, TTD International Limited, TGDC Guangdong Displays Company
 Limited, Thomson Display Technology Research & Company Limited, VDC
 Technologies S.P.A, VDC Technologies Deutschland Gmbh (w.e.f. 14th
 September 2007).
 
 The Company holds 41.67% equity interest in Evans Fraser & Co (India)
 Ltd. The same has been accounted in the consolidation.  The Financial
 statements also includes the effects of Companys interest in various
 Joint Ventures. The details on Joint ventures and Companies interest
 are given in the Note No. 10 of Schedule 15(B) to the Accounts.
 
 The Consolidated financial results have been prepared in line with the
 requirements of Accounting Standard 21 Consolidated Financial
 Statements, Accounting Standard 27 - Financial Reporting of Interests
 in Joint Ventures and Accounting Standard 23 - Accounting for
 Investments in Associates in Consolidated Financial Statements.
 
 CASH FLOW STATEMENT
 
 As required under Clause 32 of the Listing Agreement with the Stock
 Exchanges, in India, a Cash Flow Statement, as prepared in accordance
 with the Accounting Standard on Cash Flow Statement (AS 3) issued by
 the Institute of Chartered Accountants of India, is given along with
 Balance Sheet and Profit and Loss Account.
 
 AUDITORS REPORT
 
 The Auditors Report is unqualified. The notes to the Accounts referred
 to in the Auditors Report are self explanatory and therefore do not
 call for any further clarifications under Section 217(3) of the
 Companies Act, 1956.
 
 AUDITORS
 
 M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai and IWs.
 Kadam S Co.. Chartered Accountants, Ahmednagar, Statutory Auditors of
 the Company hold office until the conclusion of the ensuing Annual
 General Meeting. The Company has received certificates from these
 Statutory Auditors to the effect that their re-appointment, if made,
 would be within the prescribed limit under Section 224(1-B) of the
 Companies Act, 1956.  The Board recommends their re-appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 In terms of Section 217(2AA) read with Section 292A of the Companies
 Act, 1956. we, the directors of VIDEOCOIM INDUSTRIES LIMITED, state in
 respect of Financial Year 2006-07 that:
 
 a) in the preparation of annual accounts, the applicable Accounting
 Standards have been folowed along with proper explanation relating to
 material departures;
 
 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 at the end of the financial year and of the profit of
 the Company for that period;
 
 c) the directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 d) the directors have prepared the annual accounts on a going concern
 basis;
 
 e) the Board has constituted an Audit Committee comprising of 3 (three)
 independent directors;
 
 f) The Audit Committee has also been delegated with authority for
 investigation and access for full information and external professional
 advice for discharge of the functions delegated to it by the Board;
 
 g) the Board agrees that the recommendations of the Audit Committee on
 any matter relating to finance and management including the audit
 report would be binding on the Board; and
 
 h) based on the above and the Internal Audit System, the Audit
 Committee, the Board opines that the Company has internal control
 system commensurate with the size of the Company and the nature of its
 business.
 
 ACKNOWLEDGEMENT
 
 The directors would like to express their grateful appreciation for the
 assistance and co- operation received from the Financial Institutions,
 Banks and Government Authorities.  The directors are happy to place on
 record their gratitude to the employees at all levels for their
 commitment and dedicated efforts.  The directors are also thankful to
 the shareholders for their continued support to the Company.
 
                                               For and on Behalf of the
                                               Board of Directors
 
                                                    V.N.DHOOT
                                            Chairman & Managing Director
 
 Place: Mumbai
 Date : February 25, 2008