Management Discussion & Analysis Consumer Durables

Index

1. BLUE STAR LIMITED2. WHIRLPOOL OF INDIA LIMITED3. BAJAJ ELECTRICALS LIMITED4. TTK PRESTIGE LIMITED 5. SYMPHONY LIMITED6. IFB INDUSTRIES LIMITED7. HITACHI HOME AND LIFE SOLUTIONS (INDIA) LIMITED8. MIRC ELECTRONICS LIMITED9. PANASONIC HOME APPLIANCES INDIA COMPANY LIMITED

BLUE STAR LIMITED Back

ANNUAL REPORT 2009-2010

MANAGEMENT DISCUSSION AND ANALYSIS

INTRODUCTION:

Blue Star is India's leading central airconditioning and commercial refrigeration company, fulfilling the cooling requirements of a large number of corporate and commercial customers. It also offers expertise in allied contracting activities such as electrical, plumbing and fire fighting services. Blue Star's other businesses include marketing and maintenance of imported professional electronic and industrial systems and execution of industrial projects.

Blue Star's business model of providing end-to-end solutions as a manufacturer, contractor and after-sales service provider coupled with differentiated products and expert solutions have contributed to sustained growth and leadership.

BUSINESS SEGMENTS:

Blue Star primarily focuses on the corporate and commercial markets. These include institutional, industrial and government organizations as well as commercial establishments such as malls, multiplexes, hotels, hospitals, showrooms, restaurants and boutiques. In accordance with the nature of products and markets, business drivers, and competitive positioning, the lines of business of Blue Star can be segmented as follows:

ELECTRO MECHANICAL PROJECTS AND PACKAGED AIRCONDITIONING SYSTEMS:

This business segment covers the design, manufacturing, installation, commissioning and maintenance of central airconditioning plants, packaged/ducted systems and VRF systems, as well as contracting services in electrification, plumbing and fire fighting. After-sales services such as

revamp, retrofit and upgrades as well as energy management and green building services are also included in this segment.

COOLING PRODUCTS:

Blue Star offers a wide variety of contemporary and differentiated room airconditioners. It also manufactures and markets a comprehensive range of commercial refrigeration products and cold chain equipment.

PROFESSIONAL ELECTRONICS AND INDUSTRIAL SYSTEMS:

For over five decades, Blue Star has been the exclusive distributor in India for many internationally renowned manufacturers of professional electronic equipment and services, as well as industrial products and systems. The Company is also in the business of specialized industrial projects for the steel industry.

FINANCIAL HIGHLIGHTS:

In spite of a subdued economic environment, Blue Star performed reasonably well, mainly due to effective cost control and favourable input costs. Total Income was Rs.2556.11 crores for the year ended March 31, 2010, compared to Rs. 2524.38 crores in FY09. Profit Before Tax (excluding exceptional items) grew 10% to Rs. 262.66 crores. Net Profit at Rs. 211.49 crores registered an increase of 17% over last year. Earnings per share for FY10 (Face value of Rs. 2.00) stood at Rs. 23.52 vis-a-vis Rs.20.05 in the previous year. Return on Capital Employed (ROCE) declined to 55.3% from 60.3%, while Return on Shareholders' Funds was 43.0% compared to last year's figure of 49.1%.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

AIRCONDITIONING:

In 2009-10, the estimated total market size for airconditioning in India was around Rs. 10750 crores. Of this, the market for central airconditioning, including central plants, packaged/ ducted systems and VRF

systems was about Rs. 5250 crores, while the market for room airconditioners comprised the balance Rs. 5500 crores.

During the year, the economic slowdown continued to affect certain segments such as retail and builders. Project expansion plans in the IT/ITES segment were also delayed mainly due to the impact of the US recession on this segment. However, the airconditioning marketwitnessed significant growth in segments such as healthcare, hospitality, data centres and education. In addition, infrastructure segments such as airports, power plants, steel and metro rail were unaffected by the economic downturn and project plans were largely on track.

COMMERCIAL REFRIGERATION:

The commercial refrigeration segment includes a wide range of products such as cold storages, water coolers, bottled water dispensers, deep freezers, milk coolers, bottle coolers and ice cubers.

The Indian food and grocery vertical is one of the fastest growing segments. This largely comprises fruits and vegetables, dairy and milk products and aqua and marine products. The distribution and storage of perishable commodities require the application of various temperatures and humidity levels from the farm to the final consumption point.

India is the largest producer of fruits and second largest producer of vegetables in the world. The wastages due to inadequacy in the cold chain has been felt by the policy makers as well as the private sector, in the context of food security concerns experienced across the globe. In the present scenario, the cold chain infrastructure is characterised by long and fragmented supply lines leading to high wastage. The major constraints on the development of the cold chain industry are high capital cost and electricity bills coupled with low rental revenues and inadequate availability of concessional finance.

The Ministry of Agriculture in co-ordination with CII has constituted a Task Force, comprising experts from all stakeholders and a realistic target for developing a cold chain has been mapped out. The Task Force has proposed the creation of a 'National Green Grid' to develop a seamless cold chain network to balance demand and supply issues with remunerative price to farmers and to deliver quality produce in the hands of consumers.

In addition, the Government of India has announced several incentives like capital subsidy, project import status for private investments and schemes like Rashtriya Krishi Vikas Yojana for various state initiatives. It is expected that in the coming years, a significant amount of private and public investments will flow into this segment.

SEGMENT-WISE ANALYSIS:

The revenue and results break-up in terms of business segments were as follows:

ELECTRO MECHANICAL PROJECTS AND PACKAGED AIRCONDITIONING SYSTEMS:

The electro mechanical projects and packaged airconditioning business continued to be the largest segment accounting for 71 % of the Company's Total Revenue. While the demand from the ITATES, retail and builder segment was muted, the Company received several orders from the healthcare, hospitality, education and infrastructure segment including airports, power plants and metro rail.

In the central plant equipment segment, the Company offers a range of screw and scroll chillers in both air cooled and water cooled versions as well as air distribution products such as air handling units and fan coil units. The year under review saw significant demand for the Company's eco-friendly, next-generation and ASHRAE / ECBC-compliant range of screw chillers incorporating R134a refrigerant. Encouraged with the response, the Company plans to set up a Euroventcertified test lab, a first-of-its-kind in India, to test these chillers locally.

During the review period, the Company won a prestigious Rs. 172 crores integrated MEP order for the proposed Delhi Airport Metro Express Line. This line is envisaged to be a 23 km long underground/ at grade/ elevated high speed rail corridor which will connect New Delhi International Airport to various metro stations. The rail corridor is being developed with state-of-the-art technology and will be comparable to the world's best airport link expresses such as the ones in Heathrow and Hong Kong. Blue Star's scope covers design, supply, fabrication, erection, testing, inspection and commissioning of HVAC, Electrical, Fire Fighting, Plumbing, Station Management System, Access System and Track Side Auxiliary System for the entire project. The project is expected to be completed before the 2010 Commonwealth Games.

The Company strengthened its foothold in the healthcare segment during the year with several prestigious orders including orders from Bangalore Medical College; ESIC hospitals at Jaipur, Bengaluru, Manesar and Mumbai; Narayana Hrudayalaya, Hyderabad and Jaipur; Apollo Hospitals, Karaikudi; Rockland Hospital, Manesar; Sadar Hospital, Ranchi and numerous other hospitals.

The Company also booked some notable orders from power sector majors such as NTPC, Vindhyachal, Rihand and Nabinagar; Reliance Infrastructure, Raghunathpur; Essar, Mahan and Salaya; and Adani, Tiroda, amongst others. From the steel sector, the Company received notable orders from IISCO, Bokaro and Rourkela, and Jindal, Angul.

The Company continued to aggressively pursue business from the Government of India and won prestigious orders from CPWD and several other Government/PPP agencies. It also executed a project for the recently inaugurated state-of-the-art Tamil Nadu State Legislative Assembly Complex. The Company was responsible for providing turnkey airconditioning and

electrical services for Circle 1 & 2, which houses the Chief Minister's office.

Other prestigious business booked by the Company during the year include orders from Wipro Data Centre, Greater Noida; Hewlett Packard, Mumbai; CA India Technologies, Hyderabad; Synthesis Business Park, Kolkata; Infosys, Mysore and Pune; National Centre for Biological Sciences, Hyderabad; Indiabulls Real Estate Company, Mumbai; Sheth Developers, Mumbai; Vrindavan Techvillage Ph-II, Bengaluru; Boomerang IT Campus, Mumbai; C-DAC Innovation Park, Pune; Sirifort Training Centre, Delhi; Jaypee Greens Hotels & Resort, Greater Noida; Shangri-La Hotel, Mumbai; IBM-Airtel Data Centre, Bhubaneswar; Kohinoor City, Mumbai; DLF Magnolias, Gurgaon; RBS Corporate Office, New Delhi; Inorbit Mall, Bengaluru; HBN Commercial Centre, Bathinda; Mariott, Bengaluru and many more.

Blue Star's ducted systems range comprises packaged airconditioners as well as ducted split airconditioners. The Company also offers VRF systems; precision control packaged airconditioners for applications where accurate control of temperature is critical; as well as telepacs for telecom applications. Thus, Blue Star provides the widest range, and meets every conceivable customer requirement.

In the ducted systems segment, traditional segments such as manufacturing, educational institutions, offices and Government took the lead in an otherwise subdued market. There was a sharp decline in the IT/ITES and retail segments due to deferment of fresh investment plans. While business from big metros declined, share of business from Tier II / III towns increased steadily, thereby contributing to a larger share of the overall pie.

Blue Star's precision control packaged airconditioners continued to perform well with fast growing demand from data centres, banking and telecom

segments. The Company also sustained its leadership position in the telecom segment with its customised array of telepac airconditioners, especially designed for the telecom industry. During the year, the Company introduced a new range of emergency free cooling telepacs and battery coolers which were designed as operating cost saving solutions through joint innovation programmes with customers. The Company also performed well in the high technology VRF airconditioning systems business, during the year.

The newly formed electrical projects business performed impressively by cross-selling its services to existing HVAC customers as well as acquiring stand-alone orders. Some of the prestigious orders won during the year include TCS, Secunderabad; Shangri-La Hotel, Mumbai; Inorbit Mall, Bengaluru; Nokia Siemens, Bengaluru; Paradise Mall, Delhi; Wipro Data Centre, Delhi; Brigade Sheraton, Bengaluru; Park Hyatt, Chennai; Gulmarg Hotel, Srinagar and Main Mall, Pune. The Company also entered the Extra High Voltage (EHV) 132 kV business domain for the first time with two prestigious orders of substations and transmission lines at Discencherla and Chintal, Andhra Pradesh from Aptransco. These substations are expected to be operational by October 2010 and will supply power to the rural Nalgonda and the urban Ranga Reddy Districts of Andhra Pradesh.

Blue Star has also been offering plumbing and fire fighting services in order to offer a single window, turnkey Mechanical, Electrical & Plumbing (MEP) solution to customers. The Company won several orders for plumbing and fire fighting services during the year, most of which were bundled with airconditioning and electrical contracting orders.

COOLING PRODUCTS:

This business segment includes room airconditioners apart from commercial refrigeration products and systems.

During the year,the Company launched a new range of energy labeled (star-

rated) room airconditioners. These airconditioners are available in a wide range of 2, 3 & 5 star ratings and in multiple capacities. The Bureau of Energy Efficiency (Ministry of Power, Govt. of India) has made energy labeling mandatory with effect from January 7, 2010.

With the legislation finally getting implemented, Blue Star has spruced up its product portfolio and has launched a comprehensive range of star-rated window and wall mounted split airconditioners to meet a wide range of requirements. The energy savings is expected to be a minimum 12% for 2-star and goes up to 25% in the case of 5-star. The Company has also improved the range of commercial split airconditioners by introducing flat paneled mega split airconditioners apart from energy efficient scroll compressor-fitted cassette and vertical split airconditioners.

Owing to the onset of early summer in the West and South, there was enhanced demand for room airconditioners from the residential segment. Focus on educational institutes yielded good business from schools, professional colleges, universities and coaching centres. The National Accounts Cell won several orders from key customers, especially banks, ATM infrastructure providers, financial service providers and telecom players.

In the commercial refrigeration products segment, sales of chest freezers grew well with enhanced demand from ice cream manufacturers and unorganised grocery stores. The Company tied up with key accounts in ice cream and dairy segments such as Amul, Havmor, Shital, Dinshaws, Vadilal, Ramani, Lazza, Dairy Classic, Hatsun Agro, Vijaya Dairy and Milma Dairy, amongst others, supplying significant quantities of freezers to them. Bottled water dispenser sales recorded high growth driven by demand from small offices, shops and residential customers. Storage water coolers registered modest growth driven by the manufacturing sector, educational institutes, offices and Government establishments.

In the cold chain segment, Blue Star offers a wide range of equipment across the chain from the farm to the fork. During the year, Rajasthan State Agriculture Marketing Board placed an Rs. 8 crores order on Blue Star for storage of fruits and vegetables at three locations. The scope involves civil, structural, electrical and refrigeration. In addition, Gujarat Agro placed an order valued at Rs. 9 crores for potato storage. The Company also booked a prestigious order valued at Rs. 8.5 crores from the Ministry of Health and Family Welfare for vaccine storage across the country. This project is funded by World Bank.

The Cold Chain Task Force, constituted by CII and Department of Agriculture and Co-operation, where Blue Star is also an active participant, is working on creating an economically sustainable cold chain model through Government subsidy in the areas of integrated packhouses, ripening chambers, bulk cold storages, controlled atmosphere chambers and transport refrigeration. The cold chain is expected to handle 15% of fruits and vegetables in a time span of 3-4 years and 40% in the time span of 5-6 years. This would mean an investment of Rs. 22000 crores to handle 15% of the fruits and vegetables production and Rs. 55000 crores to handle 40% of the fruits and vegetables production in India at the current leveI. These investments would throw up an enormous opportunity for Blue Star to aggressively pursue various cold chain components like farm-end packhouses, multi commodity cold storages, centres for perishable cargo and distribution centres for logistics, amongst others.

PROFESSIONAL ELECTRONICS AND INDUSTRIAL SYSTEMS:

Over the years, the Company has changed its business model from being only a distributor of leading global manufacturers to that of a system integrator and value added reseller, thereby moving up the value chain. The Company has the expertise to build a complete system around the products

offered, thereby offering a comprehensive single window, turnkey solution.

In 2009-10, the Segment continued to contribute significantly to the overall performance of the Company. It is comprised of several strategic business units namely Industrial Projects, Industrial Products and Systems, Material Testing Equipment and Systems (Destructive / Non Destructive), Data Communication Products & Services, Test and Measuring Instruments, Analytical Instruments and Medical Diagnostic Equipment.

During the year, the Industrial Projects business performed exceedingly well. The Company won a Rs. 45 crores order from SAIL-IISCO Steel Plant, Burnpur for compressed air station. The plant is undergoing an expansion of 2.5 MTPA with a new blast furnace. The centralised compressed air station will provide required dry compressed air for various industrial services as well as instruments. Blue Star's scope includes all civil, structural work and technological structures; compressor building; handling and hoisting equipment including electricals; illumination; C&I; water system; compressed air pipelines; fire protection and detection systems; roads and drainage. The Company also won prestigious orders from other steel majors such as Vizag Steel Plant, Rourkela Steel Plant, Tata Blue Scope and Tinplate, during the review period.

The destructive and non-destructive testing machines business had a relatively slow year. However, during the last quarter, there was enhanced demand, especially from automobiles, pipes and allied industries.

MANUFACTURING FACILITIES:

Blue Star has five modern, state-of-the-art manufacturing facilities at Thane, Bharuch, Dadra, Himachal and recently, Wada.

Thane, which is the oldest manufacturing facility in Blue Star, primarily manufactures a range of screw and scroll chillers. It also manufactures special chillers for the process industry. During the year, the main

emphasis was on quality and consistency through robust manufacturing processes. Process improvements coupled with TPM initiatives helped in reducing the throughput time thereby resulting in lower lead times. It also helped in ramping up of production capacity by about 25% in both screw as well as scroll chillers. The screw chiller testing facility is being modernized with the help of DMT Germany which will help in getting the chillers certified from ARI/Eurovent. While the lab upgradation has been completed, the certification will be carried out during the first quarter of FY11.

The Dadra plant is regarded as one of the best manufacturing facilities in the country for high quality airconditioning products for domestic as well as export markets. The product range includes packaged/ducted split airconditioners, VRF systems, precision control packaged airconditioners and telepacs for the telecom sector. Despite slackened demand, the plant was able to maintain profitability by stringent control on operating expenses coupled with prudent inventory management and enhanced productivity. There was focus on energy management, enhancing safety practices, value engineering and TPM, during the review period. Six sigma and quality circle initiatives are actively practiced at the plant.

Over the last few years, the Bharuch plant has been focusing on the refrigeration products and cold chain business and has invested in developing modern manufacturing facilities for polyurethane sandwich panels which has resulted in significant growth in capacity of panel production. During the review period, layout changes were carried out in the deep freezer assembly, resulting in enhanced deep freezer volumes. The implementation of TPM for manufacturing excellence resulted in higher productivity. The safety initiatives during the year enabled the plant in receiving the safety award for 'Exhibiting excellent safety measures in factory premises' by Gujarat Gas Ltd, for the second consecutive year.

The Himachal plant manufactures window and split airconditioners. During the year, a new range of upgraded products was introduced to meet the now mandatory energy labeling programme initiated by BEE (Bureau of Energy Efficiency). The manufacturing processes, reliability lab and online run-test setup was upgraded in line with the stringent BEE regulations. All the star-rated models have been tested at an independent Intertek Lab. The new initiatives including ISO, six sigma and TPM are being pursued enthusiastically at the plant, resulting in higher operational efficiency.

This was the second full year of operation of Blue Star's latest state-of-the-art manufacturing facility at Wada. The plant manufactures the entire range of air handling units and specialized airconditioners for the telecom industry. The plant is equipped with modern manufacturing facilities with complete vertical integration. An Export Oriented Unit (EOU) is also housed within the main plant. The EOU is capable of manufacturing air handling units, storage water coolers and packaged airconditioning equipment. During the year, there was proactive participation at all levels for various initiatives such as TPM, SGA and Kaizen. The plant has also been certified for deployment of quality management systems (ISO 9001: Version 2008) by Underwriters Labs, USA. Vendor assessment audits for the factory conducted by multinationals such as Danfoss and Nokia Siemens resulted in immediate approvals.

RESEARCH & DEVELOPMENT:

Blue Star invested Rs. 9.7 crores on research and development during the year. The Company has invested in modern product development facilities as well as sophisticated test laboratories.

The year under review saw the development and launch of several new products as well as entire product lines. These included a new range of

star-rated room airconditioners under the mandatory BEE energy labeling programme. The existing air handling units range was also redesigned and a new range was developed incorporating heat pipes and heat recovery wheels. A few models of ducted/packaged airconditioners with a 15% improvement in energy efficiency for green building applications were also developed. Further, a new range of VRF systems was also introduced in capacities from 6 HP to 12 HP Specific models were developed for the exports market including roof top and top discharge split units and heat recovery units for fresh air applications.

The team has also initiated work on some technology projects including phasing out of non eco-friendly refrigerants and replacing them with ozone friendlyones; identifying an alternative to copper in heat exchangers; and

integrating components such as drives and DC motors in products to improve energy efficiency.

EXPORTS:

On the product export front, the Company offers products such as chillers, air handling units, fan coil units and roof top units apart from traditional cooling products like water coolers, ducted systems and room airconditioners. These products, which compete with global brands, enjoy a good reputation in the Middle East market.

The product export business saw a drop in revenues during the year due to the slack demand. The global economic slowdown adversely affected Dubai and several other Middle East nations, with the real estate business severely impacted. However, towards the end of the year, there was a slow recovery in some segments. The export business registered an overall increase in profitability due to a shift in product mix towards engineered and niche products which enjoy higher margins. During the year, the Company signed two MOUs - with Triangle Co., Syria and Alenaire Airconditioning Phil.

Inc., Philippines as business partners. This appointment is expected to strengthen Blue Star's presence in West Asian and South East Asian regions.

As far as international projects are concerned, the Company has joint ventures in Qatar as well as in Malaysia. During the year, the Company continued to be selective in pursuing only projects with reasonable margins.

AIRCONOITIOIG AID REFRIGERATION SERVICE:

Blue Star continues to retain its eminent position in the market place as a superior value added service provider. The total tonnage maintained under various categories of after-sales solutions make the Company the largest after-sales service provider in the country. While the customary warranty and annual maintenance services continues to be the mainstay, the Company's focus into the service parts and accessories arena has resulted in increased responsiveness and easy availability of genuine parts. In addition, a variety of value added services in the areas of energy, air and water management as well as Green Building certification and consultancy have been widely accepted. The Company has begun to provide Total Facility Management solutions and has built the required infrastructure to meet the requirements of large sized industries, IT/ITES campuses and commercial / public utilities.

As a result of Blue Star's Energy Audit recommendations - carried out by a strong 30-member team of BEE accredited Energy Auditors and Managers, many customers are opting for revamp or retrofit solutions and upgrading to more energy efficient systems. Green Building consultancy services are offered for both new construction and existing buildings. The team comprises 3 US Green Building Council (USGBC) certified Leadership in Energy and Environmental Design (LEED) Accredited Professionals. In addition, its NEBB certified personnel make Blue Star the only company in India to offer TAB

(testing, adjusting and balancing of air and hydronic systems) services to HVAC customers.

The Company continued to focus on enhancing the quality of service delivery, during the year. Towards this end, several developmental programmes were implemented including certification and training of dealers and business associates; monitoring of service delivery quality through a Service Quality Assurance Group; and the handling of high-end technical problems through a Service Specialists' Group. The Commissioning Services Group which was constituted to handle commissioning services in line with international practices resulted in higher customer satisfaction and lower warranty expenses.

SUPPLY CHAIN MANAGEMENT:

With a significant amount being spent on outside goods, the Company has an agile and adaptable supply chain incorporating modern procurement practices

such as long term contracts, e-procurement, time-based competition, hedging and managing risk. During the year, the Company reduced the primary transportation spend by better indent management and volume consolidation. With GST expected to come in effect from April 2011, the Company is already working out a new network design based on the hub and spoke model for distribution, which will help it quickly migrate to the GST environment.

CHANNEL DEVELOPMENT:

The Company has a Channel Management Centre, which is the overall custodian of Blue Star channel partners and a single point contact for all channel development and channel conflict resolution initiatives. Blue Star has 215 systems dealers who exclusively deal in the Company's systems businesses comprising packaged airconditioning and cold rooms and 720 dealers to sell room airconditioners and refrigeration products.

On the channel development front, the Company implemented several

developmental and motivational programmes for its channel partners, including trips abroad for high performing dealers. An important initiative was in the area of site safety. A comprehensive 'Safety Policy and Manual for Business Partners' was created and distributed to all channel partners apart from imparting several training programmes on safety. The Company put up 4 more Product Display Areas (PDAs) in association with its leading dealers during the year, taking the total number of PDAs in the country to 44. The PDAs aim to provide customers with a pleasant, standardised shopping experience, apart from the comprehensive product information that Blue Star dealers are known for.

FINANCIAL PERFORMANCE:

The analysis of the financial year performance for the year ended March 31, 2010 in comparison to the previous year is as under:

1. INCOME:

Total Income (net of excise duty) and before profit from sale of investments (exceptional item) for the year at Rs. 2556.11 crores increased marginally by 1.3% over Rs. 2524.38 crores in the previous year.

2. COST OF SALES, WORK BIDS ADD SERVICES:

The cost of sales, work bills and services during the year was Rs. 1882.08 crores and was 74.5% of the revenue from sales, work bills and commission as compared to 74.9% in the previous year. Despite an increase in the cost of materials due to higher commodity prices for part of the year, the cost of sales for the year was contained due to significant savings as a result of value engineering, aided by the appreciation of the rupee in the latter part of the year.

3. EMPLOYEE REMUNERATION AD BENEFITS:

Employee cost increased by 1% from Rs. 182.25 crores to Rs. 184.87 crores. The employee cost was 7.2% of the Total Income at the same level as previous year.

4. OPERATING AND GENERAL EXPENSE:

Operating and General expenses amounted to Rs. 183.32 crores, reflecting a reduction of 2% over the previous year. As a percentage of Total Income, the Operating and General expenses for the year were at 7.1% compared to 7.4% in the previous year.

S. FINANCIAL EXPENSES:

Financial cost at Rs. 8.45 crores for the year was significantly lower than Rs. 17.25 crores incurred in the previous year, primarily due to better cash management and reduction in bank interest rates during the year. Interest cost for the year was 0.33% of the Total Income as compared to 0.68% in the previous year.

6. DEPRECIATION:

Depreciation charge for the year was significantly higher at Rs. 34.73 crores compared to Rs. 25.88 crores in the previous year, mainly due to capitalisation of SAP ERP and additional facilities at the manufacturing plant at Wada.

7. TAXATION:

Provision for taxation for the year was Rs. 65.13 crores which is 23.5% of the Profit before tax, as compared to 24.3% in the previous year. The decrease was mainly due to higher tax depreciation on account of significantly higher additions of fixed assets during the year and the increase in the quantum of profits of the Himachal factory which are eligible for tax holiday.

8. EXCEPTIONAL ITEM:

During the year, the Company realized a profit of Rs. 13.96 crores on the sale of its shareholding in Rolastar Pvt Ltd and Ravistar India Pvt Ltd.

9. NET PROFIT:

Net profit after tax for the year was Rs. 211.49 crores as compared to Rs.

180.29 crores in the previous year, representing an increase of 17%. Profit before Tax and Exceptional items for the year at Rs. 262.66 crores, recorded a growth of 10.2% over the Profit before Tax of Rs. 238.33 crores in the previous year. Including the Exceptional item, the Profit before Tax for the year was Rs. 276.62 crores as compared to Rs. 238.22 crores in the previous year.

10. CAPITAL EXPENDITURE:

During the year, the Company incurred capital expenditure of Rs. 47.47 crores as compared to Rs. 80.06 crores in the previous year. This includes capital expenditure incurred for the SAP ERP package implemented in the financial year and. additional investments in the manufacturing facility at Wada.

11. ADJUSTMENTS AGAINST GENERAL RESERVE IN ACCORDANCE WITH THE SCHEME OF ARRANGEMENT PERTAINING TO THE ACQUISITION CAF THE ELECTRICAL CONTRACTING BUSINESS OF NASEER ELECTRICAL PRIVATE LIMITED:

The Company had in January 2008 acquired the electrical contracting business of Naseer Electricals Private Limited (NEPL) under a Business Purchase Agreement on a slump sale basis for Rs. 48.10 crores, including a sum of Rs. 5 crores held in Escrow account till the conditions stipulated in the said Agreement were fulfilled. In accordance with a Scheme of Arrangement approved by the shareholders and sanctioned by the Hon'ble High Court at Bombay in April 2008, the goodwill arising on the acquisition had been adjusted against the General Reserve of the Company. Consequent upon final settlement with NEPL, a sum of Rs. 2.22 crores was received back by the Company from the amount held in the Escrow account and the same has been credited to the General Reserve of the Company.

Further, in accordance with the said Scheme of Arrangement, fees and bonus of Rs.5.26 crores paid during the year to the consultants in terms of the

said Agreement has been adjusted against the General Reserve of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company remains committed to ensure the prevalence of an effective internal control environment that provides reliable financial and operational information, ensures compliance of corporate policies and applicable statutory regulations and safeguards company assets.

The in-house Internal Audit Department is ISO 9001:2000 certified and carries out internal audits covering all significant areas of the Company's operations in accordance with the annual Internal Audit plan approved by the Audit Committee. The Internal Audit Department is supported and supplemented by external firms which carry out internal audits at the regions and factories. The Audit Committee of the Board periodically meets the Internal Auditors and reviews the internal audit recommendations, auditee responses and monitors the remedial action taken.

With the successful implementation of SAP, the Company has in place a highly integrated ERP system which has resulted in more effective and efficient reporting and further strengthening of internal controls.

RISKS AND CONCERNS:

The Company has in place an effective Risk Management framework under which all internal and external risks across the various businesses and functions are periodically identified, assessed and acted upon by designated risk owners to minimise and mitigate their impact. These risks and the risk management process are also periodically reviewed by the senior management and the Board to ensure their effectiveness.

The Company continues to satisfactorily address the various financial risks relating to exchange rates, interest rates and credit risks as well as operating risks arising out of high input costs, changes in technology,

changes in the global scenario, customer preferences, increasing size and complexity of contracts and competitive pressures.

The strong fundamentals of the Company and its sound financial base have placed it in a strong position to face the vagaries of the market. The uncertain global economic scenario could affect the Indian economy. This could impact the growth of the Company to some extent. The Company will continue to remain vigilant and will proactively take steps to mitigate the adverse impact, if any, arising out of these concerns.

HUMAN RESOURCES:

During the review period, the Company reduced its total head count marginally from 2620 as on March 31, 2009 to 2603 on March 31, 2010. The focus of the function was to control costs and yet maintain a high degree of productivity. The Company released modest increases in salaries which helped maintain productivity and employee morale during the year. The Company saw harmonious industrial relations and the Company signed a short term settlement with the Union during the course of the year.

A Central Technical Training Organisation (CTTO) was formed a few years back to handle all the technical trainings for the Company's AC&R businesses. In all, the CTTO delivered about 8400 man days of training for employees as well as channel partners during the year.

ENVIRONMENT, HEALTH & SAFETY

During the year, the Environment, Health and Safety (EHS) function further enhanced safety awareness among the employees and business partners. Over 4000 employees and technicians/workers of business partners were covered under safety training. Safety systems and processes were developed for project sites / factories and the same were implemented, creating a safe work place for all stakeholders. Safety audits were conducted engaging external agencies like Central Labour Institute, Mumbai as well as internal

safety professionals to measure safety compliance. Based on the findings, necessary corrective and preventive measures were undertaken on a priority basis. There was a 42% drop in the reported accidents in the organization during the year compared to the previous year. The EHS function was further strengthened by employing more safety professionals.

INFORMATION TECHNOLOGY:

The year witnessed the culmination of the largest ever IT project implementation in the Company with the big-bang 'Go-Live' solution of SAP ECC 6.0. Through the year, the solution achieved stability and is now seamlessly operating across all business divisions and all locations. The MIS reporting has also gained steam and almost all reports are now generated from the SAP platform. A dedicated team of over 70 professionals from the Company and its partners are involved in supporting the SAP solution. The solution has helped the Company achieve uniformity in its business processes across its divisions; automating and streamlining operational processes; increasing productivity in operations with a role-based solution and centralized information; extending collaboration to all value chain partners; and improving operational performance with strategic business insight.

BRAND EQUITY:

The Company has made substantial investments in building brand equity over the last few years. During the year under review, as a measure of economy, there was a moderate reduction in advertising. During the latter part of the year, the Company launched a new TV commercial on room airconditioners with the value proposition of 'Get office-like cooling at home' which has met with a good response.

Apart from the mass media, the Company also made affordable investments in field marketing. These include participation in trade exhibitions,

sponsorships of events by CII and others, IDEAC (Interior Designers, Architects and Consultants) relationship management, customer events and public relations through the Press. These field activities are critical and have gone along way in complementing mass media campaigns and strengthening brand equity.

CORPORATE SOCIAL RESPONSIBILITY:

Blue Star's Corporate Social Responsibility (CSR) philosophy is built on three pillars namely Environment protection, Energy conservation and Community development around our facilities.

The Company is highly committed to the cause of protecting the environment. Energy efficiency of its products remains a corner-stone of its research and development efforts. Air, water and energy management services as well as LEED consultancy for Green Buildings have been part of its business and practices. The Company has also been contributing in the technical domain through the use of eco-friendly refrigerants in its products.

Energy Conservation goes beyond using efficient products. A huge amount of energy is wasted nationally due to sheer ignorance and lack of awareness. The Company is helping deserving institutions such as hospitals and colleges to save power by conducting free walk-through energy audits. In its efforts towards community development around the Company's facilities, the Company continues to sponsor the vocational training courses offered by an NGO, Kherwadi Social Welfare Association (KSWA), in Wada. This centre has been set up to support a vocational training initiative for school and college dropouts to make them employable contributing members of their families and communities. Regular visits by the Company's employees have aided in technical support to KSWA for conducting the courses.

In addition to the above CSR efforts, the Company continued to sponsor various philanthropic causes through its charitable Trust, Blue Star

Foundation, which has been supporting activities in the areas of education and healthcare, apart from relief measures in national calamities.

CORPORATE OUTLOOK:

In spite of the weak economic environment that led to a slow start last year, Blue Star's profits continued to grow due to effective cost control and favourable input costs, with the year ending on an encouraging note. The worst of the slowdown seems to be behind us and considering the healthy carry forward order book coupled with Blue Star's expertise, leadership and credentials, the Company is confident of better business prospects in the year ahead.

WHIRLPOOL OF INDIA LIMITED Back



Industry Structure and Developments:

Market growth was modest in the first quarter of the financial year 2009-2010 but picked up as the year progressed. The General Elections saw the ruling alliance return to power, signaling political stability at the centre. Strong GDP growth in the face of a contracting global economy infused confidence in business; the fiscal stimulus provided relief from inflationary pressures; and implementation of the 6th Pay Commission stimulated consumer purchase. All these combined to change the consumer sentiment from apprehension during the last two quarters of 2008-2009 to positive as the new financial year progressed. The home appliance industry in particular was among the first to witness revival of growth.

Overall, the home appliance industry, comprising Refrigerators, Washing Machines, Microwaves and Air Conditioners, grew by 15-20%. Our estimate of category growth is 15-20% for Refrigerators and Microwaves and 20-25% for Washing Machines and Air Conditioners. Some developments that can be seen in the appliance industry are:

* There is distinct preference for high-end products. For example fully automatic washing machines and split air conditioners are growing faster than the category average.

* There is higher demand for large capacity products driven by changing lifestyles, e.g. weekly vs. daily shopping and infrequent heavy-load washing vs. daily light-load washing. This is fuelling demand for large capacity refrigerators and washing machines respectively.

* Energy consciousness is increasing and is becoming an important purchase criterion, especially in Air Conditioners.

* Consumers are paying greater attention to design and aesthetics while choosing a brand.

* Health and wellness trends have resulted in demand for health-related features in home appliances. For instance, Water Purification products are increasingly being seen as a necessity.

* Barriers to owning a washing machine (availability of laundry, 'dhobi', and domestic help) are coming down. This segment has seen high growth over the recent past.

* Emergence of modular kitchens has given birth to a new genre of appliances called Built-In appliances where the products (Ovens, Dishwashers, Hoods, etc.) integrate with the cabinetry of the kitchen.

* Trade expectations have changed. The emergence of 'modern trade' has thrown up the necessity for Trade Marketing and Key Account Management practices as well as improving customer management practices.

Outlook And Opportunities

Penetration of home appliances is still very low and the long term growth opportunity for this industry is very attractive. Out of every 100 consumers living in urban India, only 33 own a refrigerator and 13 a washing machine and these numbers are miniscule in rural areas. Penetration of air conditioners, microwaves and electrical water purifiers is even lower. Hence, the industry can be expected to see sustained growth in all categories for many years to come and the government focus on infrastructure development - electricity in particular -will accelerate demand.

Growth is expected at both ends of the market. Growth of entry level products will be stimulated by first time buyers while the sophisticated products will be fuelled by the replacement market, new housing and modular kitchens. Within the home appliance industry, categories/ segments that are

expected to grow ahead of the industry average are washing machines, microwaves and air conditioners.

Outlook on Threats, Risks and Concerns

Demand is likely to be robust in the next financial year. However, competitive activity is also likely to rise and a number of existing competitors have announced investments in new plants and expansion into new categories and brands. New players are also entering the country, lured by the attractiveness of the market. These will impose pressure on market share and advertising and promotion budgets will need to be increased to maintain brand saliency. Distribution expansion and efficiency will also be a key driver to stay ahead of competition. Cost pressures will continue to be a concern: on one hand, the increase in demand drives inflation of material costs and on the other, regulations on energy and sustainability will add cost to our products.

The lack of a well developed supply base of components and materials necessitates imports and thus there is consequential risk arising from currency fluctuations.

Segment wise Performance, Internal Controls and Financial Performance

The company operates in only one segment of White Goods. Domestic sales in value terms grew by 30% and overall sales grew by 28%.

Internal Control Systems and Adequacy

The Company has in place adequate internal control systems and procedures commensurate with the size and nature of business. These procedures are designed to ensure that:

* all assets and resources are acquired economically, used efficiently and are adequately protected;

* significant financial, managerial and operating information is accurate, reliable and is provided timely; and

* all internal policies and statutory guidelines are complied with.

The composition and competencies of the audit team and effectiveness of internal controls is continuously reviewed by the Audit Committee.

The scope of internal audit extends to all functions and locations of the company. The Company has also complied with the revised clause 49 of the listing agreement.

BAJAJ ELECTRICALS LIMITED Back



The Management Discussion and Analysis presented in this Annual Report focuses on reviewing the performance of the Company in the past year and the current year theme 'Transform 2010', a Company-wide initiative to move ahead in various areas of operations. A good beginning has been achieved with the successful implementation of ORACLE ERP. Now, the agenda is to leverage the capability of the ERP and improve the operating performance across the organization. Various initiatives have been discussed in the planning meets of each of the Strategic Business Unit, Support functions and Corporate functions like Branch Sales Support, Customer Care, CSD, etc.

Overall Review:

Bajaj Electricals Limited is a 72-year-old diversified Company, with interests in Lighting, Luminaires, Appliances, Fans, and Engineering & Projects. In the financial year 2009-10, overall profitability of the Company has improved mainly due to the better sales performance of all the BU's excluding Luminaires BU. An improved product mix, value engineering and the ability to pass on a part of the steep increase in input costs to customers, favourable forex movement and reduction in interest costs are also amongst the major reasons for the better performance of the Company.

The gross turnover of the Company has increased to Rs.2252.27 crore as against Rs.1794.13 crore last year, registering a growth of 25.5%. The industry continued to witness intense fluctuations in raw material costs, high levels of competition and consequent pressures on margins.

The Company, in order to negate the impact of the intense competition and

to be on the path of growth, continued its focus on enhancing revenue growth through introduction of new products, expansion of the dealer and retailer network along with good brand building efforts in addition to the various other actions for effective cost control, value engineering, competitive sourcing and improving credit discipline. The market also witnessed a slowing down in construction activity and lower spends on Infrastructure / Industrial Investments.

However, India continues to be on a growth trajectory and the Company has positioned itself to reap the benefits of future investments in demand conditions and infrastructure expansion.

Business Review:

Engineering & Projects Business Unit (E&P BU):

E&P BU has doubled its turnover in the last 2 years and achieved a record turnover of Rs.755 crore with a growth of 39% and a CAGR of 40% in the year under review. The order book of the BU as on 1st April, 2010 stood at around Rs.750 crore.

The TLT Division has clocked a turnover of Rs.280 crore with 62% growth, whereas Special Projects Division has clocked a turnover of Rs.265 crore with 64% growth.

Despite increasing levels of competition due to the entry of many new players in the Highmast and Street Lighting domain, we have been able to sell nearly 4,450 Highmasts and over 35,000 poles of different varieties during the year.

The Ranjangaon Unit has achieved the highest tonnage of over 35,000 MT which includes over 25,000 MT of Transmission Line Towers. This Unit was commissioned in April, 2001 and since then has made a steady progress to achieve near 90% capacity utilization.

The noteworthy achievements for the E&P BU for the year gone by are:

(i) the design, development, supply, installation and commission of tallest flag post of 63 m height in Kaithal, Kurukshetra District of Haryana, hoisting largest flag of 14 x 22 m which has already entered the LIMCA Book of records 2010-11;

(ii) the illumination of the Bandra Worli Sea Link bridge, which has become a new land mark of the city of Mumbai;

(iii) the order for the execution of Flood Lighting of Wankhede Stadium, Mumbai to host the World Cup Cricket finals 2011.

Our thrust and diversification into the Rural Electrification business is also giving good results and currently we have seven projects under execution through National Electric Supply Company Limited (NESCL), National Hydro Power Corporation (NHPC) and Madhya Pradesh Poorva Kshetra Vidyut Vitran Company Limited (MPPKVVCL), Jabalpur. Once completed, Bajaj Electricals would be associated with providing electricity connections of over 8 lakh BPL households in the country.

Our Transmission Line Division is executing EPC orders for important customers like Power Grid Corporation of India Ltd. (PGCIL), Damodar Valley Corporation (DVC), Gujarat Electricity Transmission Company Limited (GETCO), Andhra Pradesh Transmission Corporation (APTransco), Tamilnadu Electricity Board (TNEB), Power Koldam Transmission Company Limited (PKTCL), Maharasthra State Electricity Transmission Company Ltd.(MSETCL), etc. The E& P BU is working on various system improvement exercises to take on the increased competition, bring down the working capital requirements and also prepare for higher volume business which is expected from the infrastructure boom in the country.

Appliances BU:

Appliances BU offers a wide range of Domestic Appliances including Water Heaters, Mixers, Food Processors, Microwave Ovens, Air Coolers, Steam and

Dry Irons, Electric Kettles, Water Filters, Toasters, Rice Cookers, Oven-Toaster-Grillers, Microwave Ovens, Juicer-Mixer-Grinders, Hair Dryers, Chimneys, Gas Stoves, Hobs, Room Heaters, Home UPS etc.

The Appliances BU continues to be on the path of aggressive growth and has achieved a turnover of Rs.505 crore with a growth of 25% and CAGR of 26% to remain a dominant No.1 player in Small Appliances Industry, nearly double the size of its closest competitor.

This BU has sold nearly 5.2 million pieces in FY 2009-10, which means nearly one piece is sold in every 4 seconds (considering 12 hours a day), with 24 lacs Irons, 3.2 lacs Water Heaters, thus regaining the No. 1 position in water heaters.

This BU has also entered the Modern Retail Format and Corporate Sales in a big way with a dedicated team focused on this business.

Morphy Richards (MR) has achieved sales of Rs.73 crore inspite of intense competition from international premium brands. MR brand has emerged as a fastest growing and leading brand in the premium segment of 'Small Domestic Appliances' industry with a growth of 33% and CAGR of 26%. It has a strong presence in modern retail formats, CSD and in premium trade outlets.

Fans BU:

The Fans BU has an attractive range of ceiling, table, pedestal, wall mounted, exhaust and fresh air fans, in various sizes and colours, manufactured in plants having ISO 9001 / 9002 quality certifications.

The BU has done exceedingly well by achieving a turnover of around Rs.379 crore with a growth of 28% and a CAGR of 24% - with a market share of around 16%. The BU has many successes to its credit in terms of introduction of new models, gains in market and shop shares in key counters, improved rural penetration, etc. Today, the most talked about CRM initiative in the Fan industry is the highly appreciated Bajaj Fans

Privilege Club and the Bajaj Fans Star Club programs with nearly 400 dealers qualifying as members to these prestigious Clubs.

Bajaj Fans introduced Star Rated decorative Fans, New Models under the kids fan category with Bajaj-Disney Brand, besides introducing many new models. The year gone by also saw the introduction of many new models of Air-circulators and a wide range of industrial exhaust fans, Cooler-kits, Pumps & motors.

Bajaj fans are sold in almost 50,000 outlets across the country - of which around 18% are in rural areas and small towns with below 50,000 population. With an aggressive marketing and promotional strategy the BU is poised to take advantage of its unique position in the industry in the coming years too.

Chakan Unit of the Company has produced over 3,50,000 fans for the BU and has done innovative work on new product development, value engineering initiatives, quality improvement efforts, etc. during the year.

Luminaires BU:

The Luminaires BU markets a comprehensive range of luminaires (light fittings) covering, commercial, industrial, flood lighting, street lighting, post-top lighting luminaires besides special luminaires for flame proof and increased safety applications. This BU is certified for ISO 9001 while the various products are manufactured in plants conforming to ISO 9002 requirements. The luminaires are offered to suit a wide variety of light sources ranging from CFL, FTL to HID lamps of various types and ratings. The BU has a Lighting Development Centre and LDMS to carry out scientific illumination layouts for various applications and a well-equipped laboratory approved by the Department of Science & Technology. At present, this BU is developing a new generation of energy saving luminaires with LEDs.

The Luminaries BU has achieved a turnover of Rs.275 crore with a CAGR of 9%. The entire Luminaires industry in India went through a de-growth, primarily due to the slow down in key sectors like IT, Retail, Construction and Manufacturing. Also, the parliamentary elections in the beginning of 2009-10 and the assembly elections resulted in postponement of major buying decision by the governmental undertakings.

The BU has signed an agreement with Ruud Lighting Inc. of USA for distributing their LED range of products in SAARC countries and also acquired rights to manufacture the Ruud Lighting (BETA LED) range of products in India. This will be an important part of our strategy for LED products.

The BU has identified 'Green Building Technologies Solutions' as one of its major initiatives to promote new products such as LED, Induction Lamps, Trilux, IBMS, etc. It has conducted panel discussions in mega cities like Delhi, Mumbai & Hyderabad and got an encouraging response to its Green Buildings initiatives.

Photolux application design software has been developed by the BU for lighting professionals. It empowers them to make illumination designs accurately and with a speed. The BU continues to promote the premium end Trilux Luminaires. Trilux business was very successful last year with major orders from Delhi PWD for street lighting for the Common Wealth games, Volkswagen factory, TCS Chennai, etc.

In keeping with Company's commitment to protect the environment, the BU has assisted its major vendors in obtaining ISO 14001 certification.

As a part of the strategic diversification in product lines, the BU has entered into a new business line i.e. IIBMS (Integrated Intelligent Building Management Systems). This covers HVAC Controls, Fire Alarms, Access and Security controls, managed by a BMS. The BU has tied up with two

major partners i.e. Securiton of Switzerland and Delta Controls of Canada to offer cutting edge BACNET Technology to its institutional customers. This venture will provide a competitive edge to the Company and the Company will now be looked upon by customers for end-to-end solutions in total energy management, lighting and controls of Buildings and facilities.

Lighting BU:

The Lighting BU markets a wide range of Light Sources and Domestic Luminaires. The Light Sources include General Lighting Service (GLS) lamps, Fluorescent Tube Lights (FTL), Compact Fluorescent Lamps (CFL), special purpose lamps, etc. Keeping in line with the objective of the company to

lay special emphasis on the Green, Environment - friendly technologies and products, the BU is planning a major foray in LED based products. The entry into LED portable lights is a step in that direction. A strong distribution network exists for marketing these products both in urban and rural areas.

The manufacturing of GLS and FTL lamps is undertaken at Hind lamps, an associate company of BEL, located in U.P. The equity investment in Starlite Lighting, a CFL manufacturer has added to the CFL marketing strength. The Starlite plant makes world class products on one of its kind Swiss `Falma' machines. The roll out of the T3 CFLs is also underway on the world's fastest GE chain which has been recently installed.

The Lighting BU has done well despite intense competition and rapidly changing market dynamics. It has achieved a turnover of Rs.261 crore with a growth of 26% and a CAGR of 21%. The CFL segment continues to register a strong growth due to greater adoption of energy saving lamps by individuals and the Government bodies. The CFL sales, as a product segment, have touched Rs.150 crore mark in 2009-10. The BU has bagged prestigious orders from both Government undertakings and private bodies in 2009-10 in the CFL category.

The BU has continued to improve its retail presence by expanding its network and reaching to over 3,00,000 outlets. The Super Distributor strategy to increase the reach in Tier III & Tier IV towns has paid good dividends and the pan-India rollover is in progress.

The BU's dealer-customer relationship management program 'JOSH' is being carried forward to ensure a very strong and healthy relationship with its top channel partners. The Lighting BU with its improved distribution network, wide product range, and efficient sourcing strategies is poised for improved growth in the future.

Financial Performance:

Rs. Crore

2009-10 2008-09

Gross Sales Turnover and Other Income 2252.27 1794.13PBDIT 246.27 185.54Cash Profit 214.82 148.57Net Profit 117.10 89.13Net Profit excluding exceptional items 130.28 89.34

Financial Review:

The Company delivered superior financial performance with improvements across key parameters and has become a company with solid fundamentals. The Company raised capital of Rs.160.79 crore through the QIP route in the third quarter of the financial year under reporting. The Company went from being over leveraged 5 years back, to a low debt to equity ratio of around 0.31 in the year under reporting.

The gross turnover and other income achieved for the year ended 31st March, 2010 was Rs.2252.27 crore, a growth of 25.53% over the previous year.

PBDIT (excluding exceptional items) increased by 32.73% from Rs. 185.54 crore to Rs. 246.27 crore.

The net profit after tax at Rs.117.10 crore was 5.20 % as compared to 4.97% in the previous year.

Interest cost was lower by 14.93% at Rs.31.45 crore on account repayment of debts out of QIP proceeds and interest rate reduction.

Profit after tax, including exceptional item, was Rs.117.10 crore as against Rs.89.13 crore for the previous year, an increase of 31.38%. Profit after tax, excluding impact of exceptional item was Rs. 130.28 crore, representing an increase of 45.82%.

Earning Per Share (EPS) for the year was Rs.13.01.

The Company expects to retain its focus on Profitable Growth in the year 2010-11 also.

Transform 2010:

Last year, Team Bajaj had embarked on a journey called `CHALLENGE 2009', a major step towards achieving a target turnover of Rs.2001 crore in FY 2009-10 which has been a huge success. The Company achieved a sales turnover of Rs.2252.27 crore with a growth of 25.5% over the previous year and a CAGR of 26.5%. The Company has chosen the theme 'Transform 2010' as it's motivating and guiding factor in the current year, to continue to remain on the growth path and to achieve superior business performance driven by continuous improvements in products & processes, widening of the product range and entering new categories and geographies. Simultaneously, there will be a strong focus on cost reduction, improving margins and reducing working capital deployment.

Opportunities:

The Indian economy is likely to see an improvement in GDP growth to around 8% and a return of the feel good factor. It is expected that the government

will focus more strongly on the reforms agenda and take stronger economic action aimed at spurring consumption, building infrastructure and stimulating economic growth. Rural India is expected to boom with favorable monsoon and appropriate government policy. Infrastructure sector offers a huge opportunity in both urban and rural India. The construction sector and the housing sector are showing strong signs of revival.

All of these developments provide a significant opportunity to Bajaj Electricals in its consumer facing businesses as well as industrial / infrastructure facing businesses.

Challenges:

The Global economy, it appears will take around 12 to 18 months to recover from its past upheavals. The developments in Europe may be a cause for future concern. The commodity prices continue to behave erratically. The export oriented industries are still on the recovery path except for IT which appears to be back on a growth path. Poor infrastructure and the pace of pushing the reforms agenda are impacting the overall economic growth. Inflation is raring its head time and again. We expect to meet these challenges with better customer relationships, focused demand generation efforts and a strong business focus by the Company.

Future Outlook:

We are confident that Indian GDP growth will see an improvement to about 8%. The Indian economy being a domestic consumption led economy with a large infrastructure spends has indeed bounced back faster. The Company will continue its focus on 'Transformation' through better cost management, improving margins, reducing inefficiency, improving supply chain and improving productivity so that it can continue to gain market share and improve its operating performance. The Company has a balanced business portfolio, which is both consumer centric and infrastructure oriented and

spread across various seasons. The strong distribution network, a powerful brand, wide product portfolio, large service infrastructure, excellent vendor base and dedicated employees along with excellent channel partners continue to be the major areas of strength for the Company. With the successful implementation of the new Oracle ERP package the Company will further improve its processes, systems and controls. This gives us reasons to be optimistic about the future success of the Company.

Internal Control Systems and their Adequacies:

In any industry, the processes and internal control systems play a critical role in the health of a company. The Company's well defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies, applicable laws, regulations and protection of resources. Moreover, the Company continuously upgrades these systems in line with the best available practices. The internal control system is supplemented by extensive internal audits, regular reviews by management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data. The Management Information System provides timely and accurate information for effective control. Oracle based ERP has been implemented to further strengthen the Company's internal systems. Thorough business planning as well as expense, capital and manpower budgeting processes ensure that progress is monitored against targets, and control is exercised on all major expenses, so that actual spending is in accordance with the budgets.

Material Developments in Human Resources (HR):

Human resources are an integral and important part of any organization. The Company recognizes the importance of human capital and values it highly. The Company has put in place sound policies for the growth and progress of

its employees. Individual Performance Appraisal Systems have been implemented to encourage merit and enhance innovative thinking. Roles and Responsibilities are clearly defined at all levels. The Company, with an aim to become a preferred employer has a well drawn recruitment policy and a performance-based compensation policy including an 'Employee Stock Option Plan', which enables the employees to develop a sense of ownership with the organization. The Company recognizes the importance of providing training and development opportunities to its people to enhance their skills and experience, which in turn enables the Company to achieve its business objectives. Training programmes are aimed at developing industry specific knowledge, management development and competency enhancement as well as general corporate and soft skills.

Social Responsibility:

The Bajaj Group and Bajaj Electricals continue to play a meaningful role in a large number of areas relating to education, rural development, environment protection and social upliftment. Many of the initiatives mentioned in previous annual reports such as IMC Ladies Wing - Jankidevi Bajaj Puraskar, BMA Management Woman Achiever of the Year Award and Paryavaran Mitra - Friends of Environment continue to receive the support of the Company. The employees of the Company play an important role in their personal capacity for various laudable causes.

Cautionary Statement:

Statements in the Management Discussion and Analysis, describing the Company's objectives, projections, estimates and expectations may constitute `forward-looking statements' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied, depending upon economic conditions, Government policies, regulations, tax laws and other incidental factors.

For and on behalf of the Board of Directors

Shekhar BajajPlace : Mumbai, Chairman & Managing Director

Date : May 26, 2010

TTK PRESTIGE LIMITED Back



A. ECONOMY /INDUSTRY SCENARIO

Financial year 2009-10 started with a lot of apprehensions as the global as well as Indian economy was suffering from the impact of immediate recessionary past. The situation improved during second half of 2009-10. The Indian economy grew by 7.1% as compared to 6.7% in the previous year. Some of the key domestic markets were affected due to deficit rainfall as well as local social and political disturbances. Exports from India were significantly affected due to continuing recessionary trends in Western countries. Against this backdrop your Company was able to achieve a growth of 26% in the domestic market, which more than compensated for the drop in export sales.

Your Company operates in the kitchen appliances segment with a wide range of product categories consisting of Pressure Cookers, Non-stick Cookware, Gas Stoves and Domestic Kitchen Electrical Appliances. Pressure Cooker is the key product category of your Company. The market for Pressure Cookers is shared amongst organized national branded players, regional players and unorganized players. Till the last couple of years, the share of the unorganized players was very large. The market is gradually shifting to branded players and the current market share of the organized brands is slightly more than 50% of the total market. In the other product categories also the market structure is similar but the share and role of regional brands and unorganized players are very significant.

B. OPPORTUNITIES, THREATS AND COMPANY'S RESPONSE

Your Company's growth is steadily built on its core strengths of brand, manufacturing, design, distribution, sourcing and service capabilities.

The strategy to focus on the `Total Kitchen Solution' has been creating new opportunities for your Company to expand its product base. This in turn is creating opportunities for expanding the market base. Your Company's focus on offering new improved products both in the traditional product category as well as new product category is opening up opportunities in North and East markets where your Company is yet to become dominant.

Products like Induction Cook Tops, Induction compatible range of pressure cookers and cookware, Apple range of Inner-lid pressure cookers, Microwave Pressure Cookers etc are a few examples of products which are designed to enable your Company to penetrate into all geographies and income segments.

The Government scheme for rural employment guarantee is creating purchasing power in semi- urban and rural markets which in itself is providing opportunities for growth.

Taking advantage of all the above opportunities requires a focused attention on various distributional channels consisting of direct dealers, authorized redistributors, large format stores, institutions and exclusive retail network. Your Company is continuously increasing its distribution width and enjoys a good franchise with the entire distribution network.

Your Company's retail formats `Prestige Smart Kitchen', `Prestige Kitchen Boutique' and `Prestige Life Style Store' are well supporting your Company's vision of dominating the kitchen.

The threat in the domestic market continues from the unorganized players and regional brands who compete with unviable low pricing strategies. Your Company has been adopting the strategy of continuously offering innovative, newer and improved products as well as marketing strategies to stay above competition whether organized or unorganized. With the result your Company is growing at a faster rate than the general industry average.

As regards export opportunities it appears that the export markets are gradually coming out of recession and somegrowth can be expected from exports in the future. Further the Company's launch of Microwave Pressure Cookers is likely to offer export opportunities. Your Company's export strategy will continue to be tactical balancing the needs of domestic market, comparative margins and optimum capacity utilization.

C. ANALYSIS OF PERFORMANCE :

1. Kitchen Appliances :

The products include Pressure Cookers, Non-stick Cookware, Kitchen Electrical Appliances and Gas Stoves. The turnover of these product categories is given in the following table:

(In Rupees Lakhs) 2009-10 2008-09 Domestic Export Total Domestic Export Total

Pressure Cookers 22515 1551 24066 20061 1973 22034Non-stickCookware 8714 11 8725 6311 45 6356Kitchen ElectricAppliances 10372 - 10372 7096 - 7096Gas Stoves 6106 - 6106 3999 - 3999Others 2362 49 2411 2133 3 2136Total 50069 1611 51680 39600 2021 41621

a. Domestic Sales registered a growth of 26.4% while exports declined by 20% due to economic crisis in Middle East and Sri Lanka.

b. The traditional product categories, namely, Pressure cookers and Cookware registered a growth of over 12% and 37% respectively in domestic market.

c. The growth in non-traditional product lines like gas stoves and kitchen electrical appliances has been very impressive at 46% and 53% respectively.

d. The growth is driven predominantly by volume expansion and introduction of new models and products. With respect to certain product categories the growth can also be attributed to sales mix consisting more of value added items and improved market penetration.

e. Operating EBIDTA/ Gross Sales ratio improved significantly from 9.16% to 14.74%. Material consumption as percentage of gross sales dropped by 2 percentage points and the other overheads by 3.6%.The composite margin of your Company is the average of the margins of the Pressure Cookers and Cookware category on the one hand and Stoves & Kitchen Electrical appliances category on the other. Thus various operating ratios are unique to your Company and are not strictly comparable to other players whose composition of business is not similar to your Company.

f. Your Company continues to maintain strict control over working capital management and in fact further improved the inventory and receivables turnover ratios. This has enabled your Company to generate significant free cash flows as detailed elsewhere in this report.

g. Many new products and models were introduced during the year to make the range contemporary and competitive. Towards the end of the financial year your Company launched a new range of Induction Cook Tops, a whole new range of Pressure Cookers and Cookware with induction compatible base, Microwave Pressure Cookers and Apple Range of `inner lid' pressure cookers.

h. The Prestige Smart Kitchen retail net work was consolidated and improvised as per plans. While new outlets were opened, some trimming was also done by discontinuing a few non-viable outlets. The number of outlets as at 31.3.2010 was 228. The network now covers 19 States and 136 towns.

i. The number of outlets of Prestige Kitchen Boutique' and `Prestige Life Style' continues at 9 and 2 respectively. The performance of these outlets are satisfactory and this network will be expanded step by step as the

nature of these outlets is one of delivery of service rather than sale of appliances in packed form.

2. Properties & Investment :

As mentioned in the last report your Company granted possession to the Developer for the purpose of development towards the end of the financial year 2007-08. Pending receipt of the necessary sanctions large portions of old structures have been demolished leaving a part of the structure for administrative and business requirements.

The original plan was to develop a Mall which would give recurring income stream of rentals. Due to change in market conditions the developer has suggested a mixed development of residential and office space. The developer has informed us that they are in the advanced stage of getting sanctions for the revised plans and that the construction can commence during the first half of the financial year 2010-11. Based on the revised plans for development the company expects to have both lump sum as well as recurring rent as and when the project is complete. The developer has estimated that the project can be completed within a period of 30 months from the date of commencement of construction.

D. OUTLOOK

Both global and Indian economies are on the path of recovery. However, persistent high level of inflation in the long run can impact the disposable income and hence the purchasing power. However, the overall market sentiment is positive and your Company expects to maintain its growth rates aided by the new range of products, barring unforeseen circumstances.

E. RISKS AND CONCERNS

The overall inflationary trend in general and the food inflation in particular are causes of concern. The significant and steady increase of

key metal prices is a matter of concern which may have some impact on margins of your Company if it is not in a position to pass on the increase in input costs to the customers. However, with improved efficiencies and economies of scale your Company is hopeful of maintaining a healthy margin and return on capital employed. Your Company will not compromise on the objective of improving market share and dominance for the sake of short-term profits.

F. RISK MANAGEMENT

Your Company has a risk identification and management frame work appropriate to the size of your Company and the environment under which it operates.

The risks are identified in relation to the following areas:

a. Business risks - arising out of general economy, government policy, industry to which the Company belongs , markets in which the company operates and life-cycle of company's products.

b. Strategic Risks - arising out of policies relating to company's marketing, manufacturing, expansion of market/capacity, technology , new products and human resource and industrial relations.

c. Safety of Properties including intellectual properties and People.

d. Operational and Transactional Risks including foreign currency risks.

e. Statutory Compliances and legal and contractual obligations.

f. Financial Reporting.

g. Frauds and Misappropriation.

h. Information technology systems including disaster recovery.

Reasonable internal control, internal audit and safety audit systems are in place to mitigate or minimize risks in the areas `c' to `h'. The other two areas relating to Business and Strategy are assessed and addressed through periodical business review meetings.

Your Company is working towards putting in place an improved dynamic process for identification of key risks and evaluation of risks as low, medium and high in the critical areas so as to devise risk mitigation plans without losing much time.

G. FINANCES

Your Company has generated Post tax operational free cash flows of more than Rs.60 Crores during 2009-10, out of which Rs.18 crores have been applied to discharge borrowings from Banks. After spending significant amounts on capital expenditure your Company carries a free cash balance of Rs.30 crores besides normal operating cash float of Rs. 11 Crores. Your Company continues to maintain unutilized funded credit lines of Rs.30 crores. Thus your Company has adequate cash resources to aggressively look for further long-term investments in the kitchen appliances segment.

H. INVESTMENTS

There was no change in investments during the year.

I. INTERNAL CONTROL SYSTEMS

Your Company is continuously improving the internal control systems in all the areas of operation. Your Company uses both internal and external agencies for internal audit on a continuous basis. Based on audit feedback the systems are updated. Your Company is effectively using SAP processes and this has lead to further improvements in the internal control systems.

J. DEVELOPMENTS IN HUMAN RESOURCES

The direct employment strength stood at 913 as compared to 877 in the previous year. Your Company has a structured policy in training and development.

SYMPHONY LIMITED Back(FORMERLY KNOWN AS SYMPHONY COMFORT SYSTEMS LIMITED)



1] Industry structure and development:

The air cooler industry in India is mainly controlled by the unorganised sector. Your Company is a pioneer in the manufacturing of air coolers in organised sector. Earlier, air coolers were available in metal/ wooden body, which had its own problems like rusting, noise etc. Your Company has made a dent in the market by bringing ABS plastic body air coolers in the market. At present, the Company is the world's largest manufacturer of portable air coolers. The Company has developed various models of air coolers over a period of time to suit the requirements of customers. Your Company is focusing on the constant improvement in the products to facilitate the end user.

2] Opportunities and threats

Opportunities:

The market dynamics transforms into the following sets of opportunities

* Having well established brand 'Symphony' in air coolers market, distribution network in domestic and export markets, the Company is poised to exponential growth.

* The air cooler is an environment friendly, energy efficient product requiring low capital and revenue expenditure. There is tremendous local and export potential.

* Due to globalisation, increased opportunity to tap export market

* Huge potential in domestic market considering population of the country and increased awareness about quality among customers

* Various applications of air coolers

Threats:

* Heavy competition from local and unorganised sector

* Fluctuation in oil prices and consequent fluctuation in raw material prices

* Demand for air coolers is subject to vagaries of summer

3] Outlook:

The Company is conscious of the need for continuous product innovation and strengthening marketing and distribution net work. The Company carries out continuous value engineering in products with an aim to improve product performance, quality and reduce costs.

The Company is exploring the possibility of expanding the base for air coolers' sales in domestic as well as international market. The various models have got 'CE' mark which is a pre-requisite for exports to European countries. The Company has also got 'ETL' listing which is essential for the US market.

4] Internal control systems and adequacy:

Your Company has adequate internal control procedures commensurate with the size and nature of business. The Company has deployed a strong system of internal controls to allow optimal use and protection of assets, facilitate accurate and timely compilation of financial statements and management reports and ensure compliance with statutory laws, regulations and management policies. The Company has also devised an extensive monitoring and review mechanism, whereby the management regularly reviews actual performance with reference to business plans-both financial and operational.

The functional heads are responsible for performing regular internal assurance reviews to ensure adequacy of the internal controls systems and adherence to management policies and statutory requirements. The functional heads deploy an annual internal assurance plan based on assessment of major

risks in each of the businesses. Risk assessment helps in identifying and focusing on all high-risk areas. The reviews cover all the business critical functions, such as revenue assurance, collection, credit and risk, MIS and information technology and network security, procurement and financial reporting.

The Board Audit Committee periodically reviews the audit plans, audit observations of both internal and external audits, risk assessment and adequacy of internal controls.

5] Human resources:

The Company recognises that its personnel are one of the most important pillars of the organisation. A major exercise in training and development of employees has been undertaken at all levels. The Company gives a lot of importance to the human resources activities. These activities have helped to retain and motivate employees of the company even during difficult period. With their support we can look forward to a bright future for the Company.

6] Cautionary statement:

Estimates and expectations stated in this management discussion and analysis may be forward looking statement within the meaning of applicable securities, laws, and regulation. Actual result could defer materially from those expressed or implied. Important factors that could make a difference to your Company's operations includes favourable summer season with high temperature, price condition in the domestic and international markets, changes in the government regulations, tax laws, other statutes and other incidental factors.

An evaporative air coolers is a low cost, low energy and an environment friendly alternative to an air conditioner. Unlike conventional air conditioners, evaporative coolers require fresh air and work best with open

windows and doors. Evaporative air coolers are extremely simple to use, cooling the air through an evaporation process, which reduces room temperature, whilst delivering a constant flow of fresh, healthy natural air. They also filter dust and dirt without drying the air.

Evaporative air cooling is natural cooling by means of water evaporation. When water evaporates, its molecules mix with air. The energy required for evaporation is drawn from air molecules, reducing the actual air temperature. Hence, breeze from the air coolers helps reduce ambient temperature. Besides, they consume significantly less electricity and do not release dangerous emissions.

They are best suited for residences, showrooms, shops, places of work especially where doors are opened and closed frequently - a major advantage over conventional air-conditioners. More importantly, they are perfect humidifiers for the dry months, making them ideal for year-round application.

Air coolers V/s air conditioner:

Air coolers use 100% fresh Air conditioners re-circulate the same dry and natural air for cooling. air for cooling.

For cooling a room of 750 For cooling a similar sized area, an AC sq. ft size, a Symphony air consumes approximately 5.5 units of energy cooler consumes only 0.18 per hour.units of energy per hour.

Air coolers use water as a Air conditioners uses and generates harmful refrigerant which is gases such as CFCs, HFCs, HCFCs and other recycled into the air. ozone-depleting gases.It does not use or even generate harmful gases.

Air coolers can be used Air conditioners are effective for closed anywhere in open spaces areas only.and in a closed environment.

Air coolers are largely Air conditioners require additional plug-and-play equipment investment in infrastructurerequiring no additional (additional power arrangement - meter infrastructure. capacity upgradation, high capacity electricity lines and switches, among

others) for installation.

Light and portable: can be Air conditioners are fixed in a particular used in multiple points. place, which restrict their application and They can replace, complement benefits, and operate in addition to air conditioners.

Air coolers are less Air conditioners are effective in humid effective in humid climate.climate.

Global warming:

The greenhouse effect has resulted in global warming, rising planet temperatures and erratic climatic patterns reflected in increased hurricanes and drought, longer spells of dry heat and intense rain, colder weather in Northern Europe as well as water scarcity in South Asia owing to the retreating Himalayan glaciers. The first four months of 2010 were the hottest on record while March, 2010 was recorded as the warmest month in the last 60 years in North India (Source.-National Oceanic and Atmospheric Administration). The average global temperature of 13.3 degree Celsius (January-April) was 0.69 degrees above the average recorded since 1880.

Income increase:

India's per capita income grew 10.5% from Rs. 40,141 in 2008-09 to Rs. 44,345 in 2009-10 (Source: Economic Times). In terms of GDP, many Indian cities are expected to become larger than some countries. For instance, the GDP of Mumbai Metropolitan region is projected at US$265 billion by 2030, larger than the GDP of countries like Malaysia, Portugal and Columbia.

Middle-class:

India's middle-class is expected to account for 85% of urban households and 70% of consumption by 2015; the upper-class will account for 7% of households and 28% of consumption. World Bank estimates that the country's middle-class is likely to grow from 430 million in 2000 to 1.2 billion in 2030, defining the middle-class as earners making US$10-20 a day. The

National Council for Applied Economic Research in August 2010 claimed that in 2001-02, India had 13.8 million households with incomes in excess of US$4,000 per year and in 2009-10, the number - at constant prices - had risen to 46.7 million, representing a population of about 200 million individuals. The number of middle-class households (households with US$4,500-22,000 annual income) in India rose from 10.7 million in 2001-02 to 28.4 million in 2009-10. Around 170 people join the country's middle-class every minute.

Urbanisation:

India's urban population grew from 290 million, as reported in the 2001 census, to 340 million in 2008 and a projected 590 million by 2030. Urban India accounts for 30% of its population and 52% of GDP. According to McKinsey, urban India will account for two-thirds of incremental consumption, driven by population and urbanisation growth. By 2030, India will have 68 cities with a population of more than one million, 13 cities with more than 4 million people and six mega cities with a population of ten million or more.

Rural growth:

Aggregate rural consumption expenditure in India is around 30% more than aggregate urban consumption expenditure. NREGA spend in rural India is set to jump from US$1.9 billion in 200607 to around US$8 billion in 2009-10 and almost treble from there by 2012-13. India's per capita rural incomes are expected to increase from Rs. 7,335 in 1981 toRs. 15,396 in 2011 (Source: India Today).

Working population:

India has a young and rapidly growing population. India will have the largest growing workforce for the next 20 years as 270 million Indians join the net working age population till 2030. Moreover, cities will account for

70% of all the new jobs created (Source: Mckinsey). The domestic consumption expenditure too is set to triple by 2020 from Rs. 30 lacs crore in 2009 to Rs. 113 lacs crore in 2020. Across 2010-20, India will add 120 million people in the working age-group seeking employment, making India's global working population 28%. China, on the other hand, is expected to add only 19 million people in the same period, contributing 5% to the global working population.

Nuclear families:

According to estimates, around 1.5-2% of joint families go nuclear every year. The rise in the number of nuclear families will result in a higher retail spending. It is also estimated that nuclearisation will account for a 3-4% increase in aggregate spending over 2007-12.

Growth drivers for industrial segment

Power deficit:

India is the world's sixth-largest energy consumer with an installed capacity of 159,398.49 MW (as on March 31, 2010). The country accounted for about 3.5% of the world's total annual energy consumption but a low per capita consumption of about a fourth of the 2,873 kwh world consumption in 2009-10.

According to the CEA, peak-hour deficit increased from 11.9% in 2008-09 to 13.3% in 2009-10. Experts believe that pent-up demand may be higher than the projected 11%, worsening the situation.

With the rising mercury column, demand-availability gap in power supply also started widening in most parts of the country. Peak deficit and energy shortage - the key parameters that indicate how well the generation stations are able to cope with the stresses of high demand - recorded a significant upsurge during April 2010. The deficit increased from 13.3% in March 2010 to 15.1% during the fourth month of the calendar year.

Similarly, energy shortage increased to 14.6% for the same period, from 11.7% registered a month earlier. However, total energy deficit declined from 11.1% in 2008-09 to 10.1% in 2009-10.

Retail growth:

The Indian retail market is one of the world's largest, estimated at US$450 billion ( Rs. 20,25,000 crore) and expected to more than double to about US$900 billion ( Rs. 40,50,000 crore) by 2015. Organised retail is expected to grow from the present 5% to 10.4% of the retail market by 2012 (Source: KPMG). Around 100 new malls and 30 million square feet of rental space are expected to be commissioned between 2009 and the end of this year. Much of this new space will be occupied by leading organised retail companies (Source: South Asia Monitor, January 6, 2010).

Hospitality sector:

As India emerges as a preferred tourist destination, the number of branded hotel rooms is expected to double in three years. The demand for travel and tourism in India is expected to grow 8.2% between 2010 and 2019, making India the third fastest growing in this segment. Capital investment in India's travel and tourism sector is expected to grow 8.8% between 2010 and 2019 (Source: IBEF). Also, revenues from the Indian travel and tourism industry are expected to increase from US$100 billion in 2008 to US$276 billion in 2018.

Commercial space:

The IT and ITeS sectors require 150 million sq. ft of office space across urban India by end 2010. The organised retail industry is likely to require an additional 220 million sq. ft by end 2010. The commercial market (including IT/ITeS, BPO, banking and financial services, pharmaceutical and telecom) in India is expected to grow at 20-22% over the next five years (Source: Cushman & Wakefield report) in cities like Delhi, Bangalore, Mumbai, Chennai and Hyderabad, among others.

Management discussion and analysis

Business Drivers:

1. Design and products:-

Symphony's design and feature development starts with feedback assimilation and analysis. The Company focuses on minimising variables that could lead to additional procurement.

Product development:

The Company's mind-to-market cycle of an average nine months in 2008-09 declined through the following initiatives:

* Replaced conventional equipment with laser technology to create the design prototype

* Identified diversified sources for moulds and reduced sourcing time

During the year, the Company developed more than 200 moulds leading to faster product development.

Product launches:

In 2009-10, the Company launched four new models - three models of the Diet Cooler and one in the Ice Cube category.

The Company launched a new category of air coolers, the world's first air coolers with a fan in the personal category, suitable for smaller places like shops on account of lower noise and multiple applications (fan and cooler).

The Company introduced the slim and lean Diet Cooler, designed to occupy less space than conventional air-coolers and consume significantly lower electricity.

The Company introduced new features in existing products, including remote controlled coolers for export.

Going ahead, the Company plans to launch six products in 2010-11 against four in 2009-10, expected to accelerate business growth.

2. Operations:

The Company controls quality and product manufacturing standards at the component and finished product factories. The proximity of the units to ports helped the Company reduce logistic costs related to exports.

The Company has a team of executives to control product and raw material quality. The Company designed the assembly line and selected vendors. An ongoing check at each production stage helped maintain material efficiency. Quality was established through specific tests.

Highlights, 2009-10:

* The Company invested in testing panels that 'locked' data, reducing the need for additional people resources.

* The Company's air cooler production increased from 242 thousand units in 2008-09 to 420 thousand units a year in 2009-10.

* The Company altered some components, reduced the number of components needed and standardised a few to ensure use across all models.

* The Company shifted from manual assembly to a conveyorised line for its assembly line (two more under way). The Company added new capacity lines to its manufacturing facilities.

* The Company outsourced pumps, a key cooler component, from large international suppliers.

* The Company appointed personnel to appraise product quality. Internal rejections declined from 5% to less than 1% across three years.

* The Company demonstrated that its air cooler could operate without water in adverse situations, owing to innovations related to the thermal overload protector.

* The Company eliminated the odour of gum from the cooling pad following the cooler being switched on.

* The Company moved towards an automated packaging system, reducing production tenure.

Outlook:

The Company is moving towards a zero-defect status for components following improvements in automation, planning and quality. Going ahead, the Company intends to reduce components by 15-18% during the year.

3. Marketing:

An efficient marketing and distribution network is critical for a company whose principal product enjoys pan-Indian and pan-global demand. The Company enjoys a diversified Indian presence through 37 branches, each with territory sales executives and branch heads for dedicated territories. Symphony's products have been exported to 54 countries.

Symphony has a significant presence in Large Format Stores (LFS) through renowned chains namely Croma, Reliance Mart and Vijay Sales, among others. Going forward, this LFS channel will play a vital role in Symphony's growth.

Based on a region's potential, prospective distributors are appointed. The Company's personnel are in constant touch with its distributor and dealer network. Documented policies define guidelines; the web-based ERP system provides real-time communication with distributors and dealers on product launches, their accounts with the Company and other policies, schemes and promotional offers announced by the Company.

Customers are provided with after-sales service through service providers - third-party multi-brand franchisees - across

the country. The marketing team plays an essential role in strategic decision making by providing essential inputs such as customer feedback on product and service, evolving trends and regional demand dynamics, among others, which facilitate informed decision-making.

Highlights, 2009-10:

* The Company classified its product range across three segments - Mobile

range, Power saver range and Diet range - resulting in customised marketing and distribution.

* The Company introduced the cash-and-carry concept to circumvent overstocking and accelerate revenue inflow.

* The Company embarked on consumer segmentation; it introduced customised products keeping specific consumers in mind.

* The Company introduced a small fanlike cooler targeted at small traders with storage space constraints

* The Company launched Diet Coolers in three models, occupying half the space of conventional coolers

* The Company strengthened sales promotions and launched an advertisement campaign called 'First-Summer' from September 2010 to October 2010, encouraging the use of coolers as round-the-year products.

* The Company instituted 26 stock points across India, even as product manufacture was concentrated in west India.

* The Company appointed marketing personnel in Saudi Arabia, who were well-versed in the local language and culture. It also entered into brand-building for the Middle Eastern markets.

* The Company concentrated on increasing market share of water heaters in select cities.

Outlook:

* The Company intends to shift from a census-based dealer presence to a pin code-based presence, widening the network.

* The Company plans to employ locals in prospective markets to strengthen its presence.

* The Company plans to increase the number of carrying-and-forwarding agents (CFA) across India.

* The Company is contemplating to introduce exclusive showrooms -Symphony Shoppe - in major cities across India.

Internal control systems and adequacy:

Your Company has adequate internal control procedures commensurate with the size and nature of business. The Company possesses a strong internal control system facilitating in the optimal use and protection of assets, accurate and timely compilation of financial statements and management reports and ensure compliance with statutory laws, regulations and management policies. The Company devised an extensive monitoring and review mechanism, which allows the management review actual performance with business plans - financial and operational.

The functional heads deploy an annual internal assurance plan based on the assessment of major risks in each of the businesses. The Board's Audit Committee periodically reviews the audit plans, audit observation of both internal and external audits, risk assessment and adequacy of internal controls.

Finance review

Cool Numbers:

The Company recorded an improved performance in 2009-10 largely driven by higher volumes and value-engineering through responsible vendor support. Consequently, the growth was visible in absolute numbers and key ratios.

Profit and loss account:

Net sales:-

This increased 53% from Rs. 12,422 lacs in 2008-09 to Rs. 18,977 lacs in 2009-10, consequent to a 61% increase in sales volume from 2,62,067 units to 4,21,355 units. Domestic sales accounted for Rs. 15,875 lacs, up from Rs. 9,833 lacs in 2008-09 - a 61% growth. This was largely owing to two factors - a stronger distribution network which enabled the Company to cater to a larger market opportunity, and the introduction of niche products with attractive customer acceptance. International business grew

from Rs. 2,589 lacs in 2008-09 to Rs. 3,102 lacs in 2009-10 as the Company extended its presence to 54 geographies till 2009- 10.

Other income: Treasury income increased 49% from Rs. 256 lacs in 2008-09 to Rs. 381 lacs in 2009-10, largely owing to investable surplus from operation.

Operating expenses:

In keeping with increased volumes, total operating costs increased from Rs. 8,780 lacs in 2008-09 to Rs. 13,673 lacs in 2009-10, owing to the following:

* Increase in material costs (largely plastics), dovetailed with the movement in crude prices

* Increase in VAT which was not passed on to the end consumer

* No increase in sales prices in 2009-10

Material cost:

This was the largest cost component and constituted about 63% of the total operating cost. In 2009-10, the increase in material cost was largely owing to a growth in volumes (from the domestic market and exports) and material costs (owing to the northward movement in crude prices). The Company managed the latter largely through value engineering, which optimised the use of components in products.

Employee costs:

An increase in scale necessitated an increase in team size - the Company added 42 members (net) in 2009-10, adding to its wage bill. Besides, the team's annual salary increase also contributed to the 34% increase in employee expenses from Rs. 567 lacs in 2008-09 to Rs. 760 lacs in 2009-10. However, the increase in employee cost yielded significant returns as revenue per employee grew 27% from Rs. 61 lacs in 2008-09 to Til lacs in 2009-10 and EBIDTA grew 40% from Rs. 4,077 lacs to Rs. 5,721 lacs over the same period.

Operational cost over the years (Rs. in lacs) 2007-08 2008-09 2009-10

Material cost 3,315 5,289 8,636

Employee expenses 359 567 760

Sales and administration expenses 748 1,023 1,363

Other expenses 1484 1,722 2,879

Depreciation 93 115 131

Interest 8 16 57

Sales expenses: Expenses under this head (advertisement and sales promotion, freight and forwarding, sales commission and warehousing charges) increased 33% from Rs. 1,023 lacs in 2008-09 to Rs. 1,363 lacs in 2009-10, in keeping with the Company's focus on strengthening its marketing reach globally and distribution effectiveness domestically. This was reflected in a sizeable increase in travelling expenses.

Margins:

EBIDTA increased 40% from Rs. 4,077 lacs in 2008-09 to Rs. 5721 lacs in 2009-10 but increase in material cost dented profitability margins - EBIDTA margin declined from 32% in 2008-09 to 30% in 2009-10. Net profit (excluding the exceptional item) grew 29% from Rs. 2,857 lacs in 2008-09 to Rs. 3,693 lacs in 2009-10.

Taxation:

The Company's tax provision increased 15% from Rs. 1,598 lacs in 2008-09 to Rs. 1840 lacs in 2009-10 primarily owing to an increase in taxable profitability. The Company did not enjoy any tax shield. Its average tax rate stood at 33% calculated on profit before tax.

Balance Sheet:

Capital employed:-

Capital employed in the business increased 67% owing to an increase in

accruals (operational surplus being ploughed back into the business). Capital employed grew from Rs. 5,161 lacs as on June 30, 2009, to Rs.8,630 lacs as on June 30, 2010. Return on capital employed (ROCE) stood at 43% in 2009-10 against 84% in 2008-09.

Sources of funds:

The Company's net worth increased 68% to Rs. 8,620 lacs as on June 30, 2010, from Rs. 5,131 lacs as on June 30, 2009, owing to increased reserves. Consequently, book value per share increased from Rs. 73 as on June 30, 2009, to Rs. 123 as on June 30, 2010. Return on net worth stood at 43% in 2009-10 against 84% in 2008-09.

Equity capital:

Equity share capital comprised 69,95,700 equity shares with a face value of Rs. 10 each as on June 30, 2010. It remained unchanged during 2009-10.

External funds:

The Company achieved zero-debt status as on June 30, 2010, its only unsecured loan being a Rs. 10 lacs sales tax deferment loan. The Company did not avail any working capital limits and managed its daily operations through positive working capital cycle.

Application of funds:

Fixed assets: The Company's gross block increased 52% from Rs.1,286 lacs as on June 30, 2009, to Rs. 1,958 lacs as on June 30, 2010, owing to the purchase of freehold land ( Rs. 566 lacs) and the addition of high-quality moulds which increased air cooler manufacturing capacity. The Company added Rs. 87 lacs to its plant and machinery account in 2009-10. As there is no debt on the Company's books, all assets are free from any encumbrances - a unique advantage.

Investments:

The Company's investments increased 70% from Rs. 3,138 lacs as on June 30, 2009, to Rs. 5,349 lacs as on June 30, 2010.

Managing Risks:

1. Risks external to the business:

A downturn in the economy or the air cooler sector could impact business growth:-

* The Indian economy continued to remain the second-fastest growing in the world despite a global meltdown, reflecting its resilience. Credible estimates suggest that India's GDP will grow at 9%-plus across the Eleventh Plan.

* The consumer durables segment is expected to grow at about 17-18% annually to reach the Rs. 60,000-crore mark within five years (Source: Crisil).

* For 2010-11, the Centre for Monitoring Indian Economy (CMIE) expects the sales of air conditioners and refrigerators to grow 24% against 19% in 2009-10.

* Air coolers, a cost-effective cooling option for all social classes, finds more applications than air-conditioners and this is expected to generate faster growth.

* Significant rural income growth, increasing land prices and higher prices of agricultural produce fixed by the government, among other factors, are expected to translate into an unprecedented demand for air coolers.

Seasonality in demand (concentrated in the summer months) could lead to unproductive operations during other months:-

* The Company converted this risk into an opportunity through its 'First-Summer' advertisement campaign - a first in the Indian air cooler market _ positioning the months from September to October as summer.

* The Company established a foothold in diverse international markets with varied seasonal patterns, extending product demand for more months and minimising seasonality.

* The Company focused energies on a new business - water heaters -complementing its existing product line in terms of seasonality.

Increasing competition from unorganised segment players could hamper growth:

* The Company continued to grow its presence in the air cooler market through a stronger pan-India presence of more than 450 distributors and 6,500 dealers.

* The Company's products were accorded respect-enhancing global certifications that translated into growing offtake and a higher premium than competing products.

* The Company, recognised for its innovation, grew market share and market size. The 'Ice Cube' range (the only cooler which works as a fan and cooler) is proof.

Sale volumes grew at a 54% CAGR over the three years leading to 2009-10.

2. Risks internal to the business:

Growth could lead to complacence:-

* The Company's management recognised an important reality - that it is a small company that has much to achieve.

* The Company's top management recognised the painstaking team effort to create an unbeatable value proposition of products and services.

* The Company continued to be respected for innovative productisation.

Inability to imbibe cutting-edge technology could result in reduced product acceptance:-

* The Company was the only one in the air cooler field to periodically launch new products with unique features.

* The Company periodically imbibed new technologies that reduced the mind-to-market cycle, optimised the use of components, reduced costs and enhanced the proportion of value-added products.

* The Company partly automated its assembly line leading to enhanced productivity, a first among Indian cooler manufacturers.

* The Company invested substantially in technology upgradation and development in the five years leading to 2009-10.

Inconsistent product quality could lead to customer attrition:-

* The Company possessed stringent global quality certifications, namely, CE, SONCAP, SASO and ASHRAE.

* The Company invested in, end-to-end testing facilities; it conducted product tests at renowned third-party test laboratories in Singapore and Hong Kong.

* The Company conducted multiple quality tests across all process stages and a stringent end product audit.

Inadequate reach could impact the Company's brand positioning as a reputed global air cooler brand:-

* The Company's robust distribution network enabled it to capture more than 45% market share in India.

* The Company's strong presence in the global air cooler market is reflected in its presence across over 54 nations.

* The Company's quality certifications provide an edge over competing local

players.

IFB INDUSTRIES LIMITED Back



A) Industry Structure & Developments:

With market liberalisation, increasing consumerism and the entry of more foreign players, Indian markets are exhibiting revolutionary changes. The Indian consumer is rapidly evolving and is exposing the consumer to a host of new choices by international brands selling their products at competitive prices. According to a study by the Mckinsey Global Institute (MCI), released in May 2007, India's middle class will swell by more than ten times- from 50 million in 2007 to 583 million people by 2025. By 2025, India will also become the 5th largest consumer market, surpassing Germany, moving up from the 12th position it occupied in 2007.

The Indian auto component industry is one of India's sunrise industries with tremendous growth prospects. From a low-key supplier providing components to domestic market alone, the industry has emerged as one of the key auto components centres in Asia and is today seen as a significant player in the global automotive supply chain.

B) Opportunities & Threats:

There is scope for growth opportunity of our white goods in the rural market. Over and above our presence in Metros, we are now working on strengthening our distribution system in group 2&3 towns and focussing on marketing programmes for semi-urban markets.

According to the Investment Commission of India, India is among the most competitive manufacturers of auto components in the world. India is also becoming a global hub for research and development (R&D). Companies like Daimler Chrysler, Suzuki, Johnson Controls etc have set up development centres in India. Many international autocomponent majors including Delphi, Visteon etc. have set up operations in India. Auto manufacturers including GM, Ford, Toyota, etc. as well as auto component manufacturers have set up

International Purchasing Offices (IPOs) in India to source for their global operations. In the changed scenario the opportunity for growth of the Company has increased manifold.

It is fair to say that India is now firmly on a higher growth trajectory. With the accelerated reforms, India is expected to achieve 8 percent growth over the next four to five years.

The greatest opportunity of the Company is its brand equity, product quality, latest technical know how and last but not the least is the trust in Company's products by the valued customers. The Company has built up brand image through close liaison with its valued customers during the past years . The threats facing the Company however are:

* Threats from the competitors in the area of pricing.

* Significant rise in material cost and exchange fluctuation that drastically impacts margins.

* Growth of the Indian economy together with the reduction of import duties makes India increasingly a target market for many MNCs and therefore, competitive pressure on the domestic market will continue to grow. In particular, imports from low labour cost countries will increase and will lead to increase price pressure. Over the last couple of years the MNCs have eaten up the share of other brand owners and have been consolidating their presence in the market. Today consumers are increasingly looking for price competitive and feature led products.

C) Segment wise performance:

The Home Appliance Division has improved its turnover and profitability as compared to last year. The profitability of the division has grown due to growth in volume and value as also reduction in freight cost and material cost. Introduction of new models in washing machine and microwave oven category at competitive prices has enabled good growth.

Cost reduction has been a major focus area for the plant keeping in mind competition. Cost reduction on plastic tubs, new programmer etc resulted in good savings. Cost reduction has been a major focus area for the plant keeping in mind competition. The company is adopting various cost control measures but a lot more need to be done in the areas of cost control. All our product categories have performed above industry average. To give more focus to Micro wave ovens, dishwasher and dryers independent managers have been given the responsibility for these product categories. The company has entered the commercial laundry equipment business & has launched the same pan India. Sales/ Enquiry of this segment has been very encouraging and the company expects good sales from these two categories going forward. The Company has also entered kitchen appliances and modular kitchen business.

The Engineering Division also recorded outstanding growth in sales and profitability. Operations team took special drive for work simplification and process improvements. Process improvements helped in fatigue reduction and productivity improvement

D) Outlook:

The overall economic outlook seems to be favourable for recovery in the global economic environment and the Indian economy is also poised to grow. According to most indications, industrial growth will be over 15%0 and the GDP growth will be over 8%. The automobile sector led by passenger cars should grow by over 25% and the two-wheeler industry should grow by about 30%.

IFB has invested in its Fine Blanking operations in order to meet the growing demands of the Indian automobile industry. However, we have also de-risked by marketing our fine blanked products to other industries which are also high growth. We are focusing on domestic demand and have built up capacities to meet the same. We will look at exports at a later date as the

long working capital cycle is not suitable for us.

We have decided to invest in modernizing our Tool Room to international standards and we will add new fine blanking presses as well as modernize the old ones. This jump in investments will, we hope, ensure doubling of our sales by 31st March, 2012.

With the expected GDP growth, we expect Appliances growth in our product categories to be robust and thus we would expect 20%+ sales growth. Our focus would be to improve our service function as well as to invest in technology to improve visibility across the company - we are thus implementing SAP and this will help us to bring down inventory as well as to react faster to market needs apart from bringing about other improvements. Our focus would also be to improve our distribution channel by penetrating deeper into smaller towns.

The other area of focus would be to complete the expansion-cum-modernization of our washing machine factory - we expect the same to be completed by end October' 2010. This expansion would ensure state-of-theart new generation washing machines of higher capacities and the excess capacity we would use to market for OEM sales to buyers in Europe, Africa, Asian countries, etc.

We would also like to strengthen our direct sales channel as well as our customer retention programs in order to sell more IFB products to the same customer leading to more business per customer on a recurring basis due to recurring service income via AMC's as well as sale of additives, etc.

Thus for the year we expect more working capital requirements and for that purpose we may use banking facilities from Standard Chartered Bank from time-totime. However, at this point in time, the company continues to be completely 'zero' debt.

E) Concerns:

Our concern in the Fine Blanking business is pressure for price reduction from customers' end as well as pressure for higher material costs due to upward revision of commodity prices from time-to-time.

Our major concern in Appliances is the same apart from HR challenges which is, however, a concern for every growing company.

To overcome the same, we have substantially increased our investment in training and we hope to increase the same further as well as bring in better HR practices in order to reduce attrition. We, however, feel that at the Senior Management level, more face-to-face contacts with others working in IFB and solving their problems will lead to lowering of the attrition rate.

G) Internal Control Systems and their adequacy:

The Company has adequate system of internal controls and checks and balances to ensure that its assets are safeguarded and protected against loss from unauthorized use. The strength of these systems is continuously being monitored by the internal auditors and the findings of these audits are reported to the Audit Committee of the Board and also to the Board of Directors. The adequacy of the internal control system has also been examined by the statutory auditors and the Company has not received any adverse comments from them on the adequacy of internal control system.

H) Human Resources:

IFB is a knowledge-driven organization and its greatest asset is the experience and skill of its employees. Recognizing that the workforce will provide critical competitive edge in its growth endeavor, IFB has laid major emphasis on acquiring, maintaining and developing its human asset base. We offer wide range of career development programs including on the job training, job rotation etc. Our belief is that by investing in these programs we will have a highly motivated work force. During the year the

Company also offered shares to eligible employees under Employees Stock Purchase Scheme. Due to changes in H.R Policy the attrition rate of the executives of the company has been reduced to minimum.

As a result of focused attention the employees at all levels have actively participated in the effort to sustain and improve the performance of the Company even in the most difficult times. The Company had 986 nos. employees at the end of March 2010. As in the past, industrial relations continued to remain cordial at all locations of the Company.

I) Risk Management:

The Company is exposed to several risks. They can be categorised as operational risks and strategic risks.

Some of the major risks in each category are described below. There are other risks that could have a material effect on the Company's performance and financial position. The Company has taken several mitigating actions, applied many strategies and introduced control and reporting systems to reduce and mitigate these risks.

OPERATIONAL RISKS

Environmental issue:

The company has no pending material environment related issues. Since most of the Company's manufac-Luring process consist of the assembly of components, the environmental impact from the company's plants are remote.

However, environmental requirements are complex and tend to become more stringent with time & the Company will constantly innovate to keep up with requirements as per law.

Product warranty and recalls:

It has become almost mandatory to incorporate such clause in International contracts. However, the Company has so far not accepted any contract with such draconian clause but in the event the company accepts contracts with

such clause, the company is exposed to product liability and warranty clause in the event our product fails to perform as expected. A recall claim or a product liability claim brought against the Company in excess of the Company's coverage may have a material adverse effect on the Company's business.

STRATEGIC RISKS

Dependence on supplier:

The company largely depends on vendors in order to meet its delivery commitments. Consequently, there is a risk that disruption in supply chain could lead to the company not being able to meet its delivery commitments and as a consequence to incur extra costs. The Company's strategy is to reduce this risk by maintaining two suppliers in all significant component areas.

Patent & Proprietary Technology:

The Company's strategy is to protect its innovations with patents and to vigorously defend its trademarks and knowhow against infringements and unauthorized use. There can be no assurance that any patent now owned by the company will have protection against competitor that develop similar technology.

CAUTIONARY STATEMENT:

Statement in this Management discussion and Analysis describing the Company's objectives, projection, estimates and expectations may be' forward looking statement' within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the company's operations include market competition, significant change in political & economic environment in India, litigation, exchange rate

fluctuation, change in interest rates etc.

HITACHI HOME AND LIFE SOLUTIONS (INDIA) LIMITED Back



Industry Structure & Developments:

Consumer Appliances Industry:

The Indian consumer durable industry is estimated to be in the range of Rs.350,000 Mn. The home appliances industry (products that your Company deals in) is estimated to be around Rs.55000 Mn. Room Air conditioners contribute to the largest share of this at around Rs. 50,000 Mn. followed by Refrigerators at around Rs. 5,000 Mn. (This size of Rs. 5,000 Mn. is for the Frost Free Refrigerators above 300 Ltrs. capacity).

Air conditioning Industry:

Our estimate of the industry performance during FY 2009-10 is given below:

Total Industry Sales (in Mn.) Category 2009-10 2008-09 Growth

Room Air conditioners (in Units) 2.51 2.01 25%Ductable Air conditioners (in Tr.) 0.33 0.37 -11%

Air conditioner is now much more than a cooling appliance. Its image has transformed to being a stylish and intelligent indoor Air conditioning system. The customer's now look for various other features like aesthetics, comfort features, designs, colours, latest technologies, higher energy efficiency and better service. Split Air conditioners are fuelling the growth of the industry with design innovations, elegant looks in a feature packed indoor unit.

Room Air conditioners:

The Room Air conditioner category consists of both the Window and Split Air conditioners for the use in residential and commercial spaces.

The Room Air conditioning industry experienced a growth rate of close to 25% in 2009-10 in comparison to about 7% growth in 2008-09. However penetration of Room Air conditioners in India is still low at around 3% only.

The demand of Split Air conditioners is continuously increasing. The market share of Split Air conditioners is more than 65%, because Split Air conditioners are more elegant in looks, produce much lesser noise and are more energy efficient. Your Company has constantly formulated its strategies to garner more share in this segment which has helped to achieve a growth of over 52% in Split Air Conditioner category. Your company has introduced a new range of Split Air conditioners to further strengthen its position in this segment.

Your Company offers a wide range of Room Air conditioners. Through its extensive research and development, your Company has remained at the forefront of the Air conditioning industry. New technological breakthroughs allow Hitachi to provide high quality, efficient and reliable Air conditioning solutions.

Your company has grown @ 46% over the last year with 1.58 lac units against 1.08 lac units in last financial year in Room Air conditioners segment.

Your Company has launched a new range of Split Air conditioners 'i-TEC (Inverter AC, Available in 1.5Tr.) and upgraded 'ACE Followme' (Tr. 0.9, 1.2, 1.5 & 2.0). These new Air conditioners, equipped with Direct Efficient Technology are a perfect blend of absolute comfort, silence, durability and elegant design. They ensure consistent cooling and are highly energy efficient as well. This year we have also launched another Split Air conditioner range 'KAZE' for Tier II Cities. We have done media launch of 'KAZE' in 31 towns and received comprehensive & positive coverage in all leading media. Other ranges of Split Air conditioner are Atom Square', Ace

Cutout', 'Star', Atom XL', and 'Logicool' to cater to the specialized need of specific segments. In Window Air conditioner segment 'Quadricool TM' & 'Quadricool SM' are available in Tr. 1.1, 1.5 & 2.0.

This year, the BEE (Bureau of Energy Efficiency, A Government enterprise under the Ministry of Power) has made Energy Star labeling for Room Air conditioners mandatory from January 2010. Your Company had adopted voluntarily the scheme of Star Labeling last year hence the customers were able to choose the Hitachi brand star rated Split Air conditioners. Your Company's star rated Air Conditioners have been received very well in the market. Last year 79% of Hitachi Split Air conditioners sold were having 5 star rating.

Ductable Range of Air conditioners:

The spread of the global economic downturn significantly affected business environment in India as well. Your Company also faced similar pressure in Commercial AC business. Because of restricted investment in infrastructure, retail and IT & ITES, the Commercial AC business was affected. Your Company has had a de-growth in the last financial year in the Ductable Split range and Chillers. However, in the Telecom Air conditioner category your Company continued and strengthen its leadership position.

In Commercial Air conditioning business, in the first half of financial year market was sluggish due to global slow down impact, while from second half of the year market started positive movement. In first half of year, your Company de-grew but lower than the market de-growth rate, while in second half of the year, your Company registered higher growth than the market, which helped us to restrict de-growth lower than the market. Your Company gained around 1% in market share in year 2009-10.

Your Company has the Takumi range of Ductable Air conditioners, which is the emergence of Hitachi's engineered system to create One-of-a-kind

solution to Air conditioning industry. Its unique energy efficient engineering design and flexibility in application provides pragmatic solutions to suit best for cooling requirements. The range of these products available is from 3.0 Tr. to 16.5 Tr. which are highly appreciated and well received in the market. The customer of this segment comprises of Retail Chains, MNCs, IT/ITES sectors, BPOs, Call Centers, Institutes, Malls, etc.

Telecom Air conditioners:

This cutting edge Air conditioning system is specially designed for unmanned Telecom Shelters/ Telecom BTS sites. Our specialized & unique product, Spacemaker comes with higher cooling capacity, unique safety features, lower power consumption and lower operating costs. Market share of your Company in this segment is above 32%. Looking to the future growth of the telecom industry, it is expected that we shall maintain our share in this segment.

Refrigerators:

Your Company offers a wide range of stylish & premium refrigerators available in 2-Door, 3-Door and Big French (4-Door) models. Range of refrigerators not only adds depth and character to the consumer's kitchen but also compliments with the strong cutting-edge technology to make beautiful solutions for household needs.

The refrigerators are differentiated on account of their innovative functionality, style and utility intertwined with the advanced features. The Minus Zero Cooling, New Front Jet Freezing, Electronic Temperature Control, Nano Titanium Filter Treatment and Digital Control Panel features allow the food to stay fresh and healthy for longer periods. The advanced Minus Zero Cooling mode preserves the nutritional value and the moisture in the food stored and the Digital Control Panel helps in controlling the

temperature inside the refrigerator without opening the doors, thereby saving energy consumption.

Your Company has grown by over 4% against last year. New models have been introduced in 2-door & big French category. It is expected that your Company will perform better in coming years in this category.

Set up of New Air conditioner Manufacturing Facility

Your company has inaugurated new Air conditioner manufacturing facility in August 2009. This facility is one of the largest Air conditioner manufacturing facilities in India and also one of the largest Air conditioner manufacturing facilities of Hitachi in the world. The new facility is adjoining the old plant, was built in a record time of 7!4 months. The plant is state of art and equipped with advanced machinery. With this new plant the annual production capacity has increased to 2.30 Lac units in single shift working. The new facility would manufacture Room & Commercial Air conditioners including Ductable Air conditioners and Telecom Air conditioners. The Chiller manufacturing will start in the next financial year.

Set up of Hitachi Customer Satisfaction Centers:

During the year under review, your Company has set up its own Service Centers. These centers will be entirely owned & operated by your Company, thereby assuring better & personalized service to every customer. In the

first phase, Company has opened Service Centers, in the major cities. Gradually this concept will be expanded to smaller towns across the country.

Future Outlook: Opportunities, Threats, Risks and Concerns Opportunities:

Growth in Smaller Towns:

Smaller towns are showing encouraging growth. These towns are very

critical, as the next round of growth will come from them. The relevant consumer base is large and growing, as are affluence levels, which will result in augmentation of purchasing power and branded product consumption.

Increased Affordability of Products:

Air conditioners are now affordable both in terms of initial investment and running cost and are now treated as a necessity rather than a luxury item. The reduction of the price gap between the Split Air conditioner and Window Air conditioner has fuelled the growth of the Split Air conditioner segment. With the emergence of the apartment culture in metros and non

metros the need of below 1.0 Tr. and between 1 Tr. and 1.5 Tr. capacities has emerged. Understanding that need of the market your Company has extended 'ACE Followme' range to 0.9, 1.2, 1.5 & 2.0 Tr. and other models 'KAZE' & 'Ace Cutout' also have the same tonnage class.

Increase in Income Levels:

Increasing affluence levels across the country will lead to increase in consumption growth. Growing middle class with increasing disposable income supported with robust economic growth are good signs for the industry. Retailers are marketing their goods more aggressively by providing easy financing options to the consumers by partnering with banks.

Increasing Share of Organised Retail:

The Indian retail market, which is the fifth largest retail destination globally, has been ranked as the most attractive emerging market for investment in the retail sector. The organised retail sector is all set to witness maximum number of large format malls and branded retail stores in the next two years. Tier II cities are emerging as the favoured destinations for the retail sector with their huge growth potential. Shopping malls are becoming increasingly common in Indian cities. This will

have a positive impact on the consumer durable industry, as organised retailing would not only streamline the supply chain, but also facilitate increased demand, especially for high-end and branded products.

Threats, Risks and Concerns:

1. During last one year the cost of steel, copper & plastic have been rising sharply. Energy labeling initiated by the government is also adding to the input cost of product.

2. Banks / NBFCs are tightening their consumer finances. In view of problems at the world level in the banking sector, the funding options have minimized. Inventory funding is also very tight, which is not a good situation for dealers to run their operations.

3. Excise duty has gone upto 10% in the last union budget. Some of the states have also increased VAT additionally upto 2.5%.

4. High electricity cost & quality of power supply remain a hindrance in the growth of business. Long power cuts and voltage fluctuations may affect the pace of industry growth.'

5. The import of low cost products from neighboring countries continues to be a threat to the consumer durable industry.

Human Resources:

The total strength of employees (staff and operators) of your company was 557 as on March 31, 2010.

Hitachi Customer Satisfaction (HCS) was formed as a new Process at HHLI for enhancing the service delivery to customers. A pool of Service Engineers has been inducted into the System at 19 HCS centers.

In order to streamline the Customer Complaints redressal, the National Service Centre (NSC) was strengthened with deployment of 25 Engineers alongwith regular Customer Service Executives to centrally handle customer's issues at Head Office level. It is handling regular customer

issues as well as Institutional Customers service co-ordination. Re-Modeling of Compensation Structure was done with a uniform step wise structure of Position Classes during the annual appraisal. Variable Salary limits were also enhanced at all levels.

A unique team building programme was organised for all employees in which each employee got an opportunity to visit and learn about the new State of Art Plant at Kadi and then participate in the Out Bound Training (OBT) with a cross-functional groups. This programme educated our employees about the growth plans of the Company for 2010-11, the challenges to be taken and the team work and passion required to take it forward.

Forty eight Graduate Engineer Trainees (GETs) were recruited. After the intensive Plant Training, the GETs were assigned specific On the Job Training (OJT) in various departments in Plant and Field under senior staff for guiding and mentoring them.

The Central Air-conditioning business team is being continuously strengthened with addition of manpower in areas of Project Design, Estimation, Execution and Commercial for handling Central AC Projects.

Internal Control and Systems:

Company has adequate system of internal control to ensure that all the assets pertaining to Company are safeguarded and protected. Internal Audit has also been done through external Auditors at Plants as well as at all the branches of the Company as per the detailed scope defined and approved by the Audit Committee. The Internal Audit is planned to substantiate and review the adequacy of controls and laid down procedures & systems.

Observations of Internal Auditors and the detailed plan of action is reviewed and discussed at the meetings of the Audit Committee.

MIRC ELECTRONICS LIMITED Back



The management has pleasure in presenting this report in adherence to the Code of Corporate Governance enacted by the Securities and Exchange Board of India under Clause 49 of the Listing agreement.

Economic Review:

Having withered the global recession India's economy is poised for growth at a faster pace in 2010-11 than earlier expected, supported by a global recovery, domestic demand and a double-digit expansion in factory output.

Such expansion is expected to generate greater inflation than previously expected, requiring a steady series of rate rises from the Reserve Bank of India. Asia's third-biggest economy is expected to grow at annual rates above 8 per cent in coming quarters.

According to a study by the McKinsey Global Institute (MGI), `Bird of Gold': The Rise of India's Consumer Market', Indian incomes are likely to grow three-fold over the next two decades and India will become the world's fifth largest consumer market by 2025.

I. Industry structure and developments

The consumer durables industry consists of durable goods used for domestic purposes such as televisions, LCD TVs, air conditioners, DVD players, washing machines, refrigerators, microwave ovens etc. The growth in the consumer durables sector has been driven primarily by factors such as boom in the real estate/housing industry, higher disposable income, emergence of the retail industry in a big way coupled with rising affluence levels of a large section of the population.

A shift in consumer preferences towards higher-end, technologically

advanced branded products has been quite discernable. This shift can be explained by narrowing differentials between the prices of branded and unbranded products added with the high quality of after sales service provided by the branded players. The shift has also been triggered by the availability of foreign branded products in India owing to lower import duties coupled with other liberal measures as introduced by the government.

A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing have been instrumental in changing the pattern and amount of consumer expenditure leading to strong growth in the consumer durables industry.

Consumer durables grew at a robust rate of 31.6 percent in January 2010 as against a nominal 2.1 percent posted in the same time last year. In fact, along with the manufacturing sector for capital goods, the manufacturing sector for consumerdurables were prime contributors to the robust growth in the Index of Industrial Production (IIP), which grew by 16.7 percent in January 2010.

II. Opportunities and Threats

The key growth drivers for the Indian consumer durables industry:

* Rise in the share of organised retail: Approximately 315 hypermarkets are expected to come into existence in Tier-I and Tier-II cities across India by the end of 2011, according to a joint study by consultancy firm KPMG and industry body ASSOCHAM named `Reinventing India's Retail Sector'. Consultancy firm Technopak has said that the organised modern retail segment in India will grow by over three times during the next five years (from 2010), to reach a figure of US$ 80 billion. Hence there is great opportunity for growth in this sector in view of the positivedevelopments in organized retail sector.

* Availability of newer variants of a product: Consumers are spoilt for

choice when it comes to choosing products. Newer variants of a product help a company in gettingthe attention of consumers who look for innovation in products.

* Rise in disposable income: The demand for consumer electronics has been rising with the increase in disposable income coupled with more and more consumers falling under the double income families. The growing Indian middle class is an attraction for companies who are out to woo them.

* Product pricing: The consumer durables industry is highly price sensitive, making price the determining factor in increasing volumes, at least for lower range consumers. For middle and upper range consumers, it is the brand name, technology and product features that are important.

* Availability of financing schemes: Availability of credit and the structure of the loan determine the affordability of the product. Sale of a particular product is determined by the cost of credit as much as the flexibility of the scheme.

* Innovative advertising and brand promotion: Sales promotion measures such as discounts, free gifts and exchange offers help a company in distinguishing itself from others.

* Festive season sales: Demand for colour TVs usually pick up during the festive seasons. As a result most companies come out with offers during this period to cash in on the festive mood. This period will continue to be the growth driver for consumer durable companies.

* Emergence of nuclear families.

* Growth of entertainment and Media and the flurry of television channels and the rising penetration of cinemas.

* Electrification in rural India and increasing aspirations of people in rural India.

The consumer durables market in India has seen a proliferation of brands

and product categories in recent years. All the major international brands from Japan, Korea, US, Europe and China have launched in India with varying degrees of success. Most brands are still trying to build a pan-India dealer network.

In the times to come the Consumer durables sector is poised for a quantum leap due to technological improvements, falling prices due to competition, aggressive marketing and declining import tariffs.

The changing dynamics of consumer behaviour indicate that luxury goods are now being perceived as necessities with higher disposable incomes being spent on lifestyle products.

In response to the aforesaid opportunities the Company expanded its scope from a single product to a multi-product portfolio, resulting in enhanced possibility to occupy a larger shelf space. It prudently invested its resources to drive its innovation and promote its products.

Threats

* With stiff competition, the consumer durables industry faces a persistent pressure on margins due to its inability to pass on input cost rises to consumers. Hence, thecompany's future profitability may come under pressure.

* Rising inputs costs of raw materials viz. copper and steel will put huge pressure on the margins. Further with the recent increase in excise duties the pressure will be on manufacturers to pass on the burden to consumers which may lead to reduced demand.

* Exchange schemes and pricing could have a negative industry impact.

* The entry of cheap Chinese products through organized retail continues to be a threat to the domestic players like ONIDA. Amid hyped media reports on the invasion of Chinese goods, the consumer is likely to get confused thereby resulting in temporary loss of market share and revenues. However,

brand building continues to be the competitive edge in which the Chinese products seem to lag behind. They don't have much experience in brand building, especially in the international context. Therefore, their entry into India as brands have been very diffident and that hasn't worked in the extremely competitive market like India.

* The focus of consumers is shifting to energy efficient appliances and providing such appliances at a competitive price will be a challenge.

* Margins are under pressure in view of increase in cost of marketing, advertising and after-sales services.

* Cyclicality has triggerred an industry recession.

* The Company faces stiff competition from South Korean companies like LG and Samsung. In last few years, they have been increasing their market share in India. Going forward, they are expected to give tough competition to Indian manufacturers with newer high-end technologies.

III. Product-wise performance

There was 11% growth in sale of Onida Air-conditioners during the year under review. The sale of Washing machines registered a growth of 5% and the sale of Microwave ovens registered a growth of 8%. The sale of Mobile registered a growth of 26% and the sale of other electronics products registered a growth of 11%. During the year under review, the Company witnessed a moderate de-growth in sales of Colour Televisions and LCDs of 2%. The performance in Mobiles, Air Conditioners and Washing Machine segments marks the advancement of the Company towards becoming a complete home solutions provider.

IV. Outlook

In the times to come, Brand strength, product mix, a well-established distribution network, after-sales service, and technological superiority would be factors which will determine the competitive advantage of industry

players. Market shares are expected to consolidate; however, the pace of consolidation would decline. While major industry players would continue to focus on prices in the low-medium range, advertising and promotional spends would continue to be an integral part of the players' expenses.

The Company has extended its offerings under the Onida brand across products as well as geographical boundaries.The Company expects to increase its presence in these products and emerge as a leading solutions provider for electronic home improvement goods. The Company has also positioned an exclusive brand `IGO' for the rural market to capture the potential demand from the rural areas, which is growing aggressively.

On the export front the Company intends to aggressively capitalize its export potential and has invested considerably in research and development initiatives to create products for diverse geographies. Over the time the management expects Onida to emerge as a global brand in the consumer durables industry in India as well as internationally.

V. Risks and concerns

At MIRC, we have recognized that managing business risk is an integral part of generating substantial and sustainable shareholder value. This positive interpretation of risk reflects the new understanding of the connection between well-managed risk and improved performance. That is, where the management seeks to mobilize the linkage between risk management, achievement of corporate goals and reduced volatility of outcomes. A more dynamic approach to risk management is critical to deliver superior performance and superior returns to shareholders. To this end, the management has always been proactive on risk identification and mitigation.

As part of a comprehensive de-risking strategy, the Company initiated an organized system of forecasting and cost budgeting leading to an optimal utilization of resources. The Company expects to enhance its global

presence to rationalize its significant dependence on the Indian geography.

VI. Internal control systems and their adequacy

The management periodically reviews the internal control systems and procedures leading to the orderly and efficient conduct of its business. The internal control structure is adequately designed to ensure effectiveness of its operations in the utilization of funds, safeguarding of assets against unauthorized use or disposition, true and fair reporting and compliance with all the applicable regulatory laws and company rules.

Internal Audit is conducted on a regular basis by external auditors to monitor and report on the effectiveness of the internal control in the organization.

Significant findings of the Internal Audit are brought to the notice of the Audit Committee as well as to the Board of Directors of the Company and corrective measures recommended for implementation. Reports of the Internal Auditor are also continuously reviewed by the management and corrective action initiated to strengthen the controls and enhance the effectiveness of the existing systems.

VII. Operational and financial performance

During the year under review the turnover of the Company increased from Rs.1517.72 crores to Rs.1568.35 crores. The Profit before tax increased from Rs. 10.15 crores to Rs.22.65 crores registering an increase of 123% and the Profit after tax increased from Rs.8.95 crores to Rs.18.37 crores registering an increase of 105%.

VIII. Material developments in Human Resources/ Industrial Relations front, including number of people employed

At MIRC, human capital is considered to be the most valuable resource, since people deliver results. People are nurtured, developed, motivated and

rewarded to ensure business growth. The H.R. Cell ensures that the Company attracts right competency, develop them continuously, and keep its employees motivated through implementation of various HR processes.

The objective of the Human resource initiative at Mirc is that all ONIDIANS shall collectively perform to realize the goals of the company and catapult the organization to the elite league of companies which grace the hall of fame of the corporate world.

The Company's H.R. Cell takes a proactive role in responding to genuine grievances of employees to foster a warm positive relationship between the management and employees, increase job satisfaction and ensure that employees can add value to their lives.

The Human resource approach of the Company embodies the following:

* Empowering our employees to innovate in an open, informed and challenging work place. Encouraging the richness of ideas, approaches and points of view within a work environment conducive to both superior performance and personal fulfillment.

* Conducting and facilitating need-based training empowered by structured career plans that optimize individual potential.

* A unique variable pay plan linked to company's profitability for executives.

* A highly conducive and enabling work atmosphere. A well-designed safe campus

* Stress upon lateral thinking across all levels.

The management is continuously working on the development of human capital to enhance responsiveness, efficiency and effectiveness in an ever-changing business environment. Employee performance is continuously evaluated against agreed KRAs as well as feedback on behavioral competencies. The company had about 1858 employees on its roll as on 31st March, 2010.

IX. Material financial and commercial transactions involving Senior management

The Company has in place a Code of Corporate Governance which stipulates that senior management personnel shall make disclosures to the Board of Directors regarding any material financial and/or commercial transactions in which they are interested which may have a potential conflict with the interest of the Company. In terms of the said Code senior management personnel have confirmed to the Board that they had no such dealings/transactions with the Company during the financial year ended 31st March, 2010.

X. Cautionary Statement

The Statements made in this report describing the Company's projections, expectations and estimations may be forward looking within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectation of future events. The actual results may differ from those expressed or implied in this report due to the influence of external and internal factors beyond the control of the Company.

The Company assumes no responsibility in respect of forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

On behalf of the Board of Directors

Date : 3rd May, 2010 Gulu L. MirchandaniPlace : Mumbai Chairman and Managing Director

PANASONIC HOME APPLIANCES INDIA COMPANY LIMITED Back



INDUSTRIAL REVIEW:

The global economy continues to recover amidst ongoing policy support and improving financial market conditions. India's GDP stood at 7.4 per cent in the year 2009-10 as compared to 6.7% in the previous year. The Government estimates the economy to grow at a rate of 8.5 per cent in 2010-11 driven by better farm output and a global recovery. The industrial sector recovery is increasingly becoming broad-based and is expected to take firmer hold going forward on the back of rising domestic and external demand. The improved performance of the industrial sector is also reflected in the improved profitability in the corporate sector.

Driven by a young population with access to disposable incomes and easy finance options, the Indian consumer market has been growing very fast. The Indian consumer durables segment can be segregated into consumer electronics viz., TVs, VCD players and audio systems and consumer appliances like refrigerators, washing machines, air conditioners, microwave ovens, vacuum cleaners etc.,. Most of the segments in this sector are characterized by intense competition consequent to the re-entry of many Multinational Companies (MNCs) into the Indian consumer market introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment.

Your Company continued to sustain its predominant position in the Electric Cooker segment. Quality of the product continues to be the strength of the Company to secure maximum customer satisfaction. During the year, your

Company has successfully launched the mechanical Jar Cooker, a new product from its manufacturing stable besides revamping some of its current offerings to better suit consumer tastes. The ongoing capacity expansion program to increase the manufacturing capacity of Electric Cooker to 10 lakhs numbers is progressing as scheduled and is expected to be completed during the first half of the current financial year. The investment requirements for the ongoing expansion program and for the development of new models of electric cooker and mixer grinder are being met through a combination of internal accruals and Bank borrowings.

ANALYSIS OF FINANCIAL CONDITION AND RESULTS:

During the year under review your Company has registered an impressive growth in its sales where the gross sales increased to Rs.144.66 Crore from Rs.109.86 Crore in the previous year registering a growth rate of 31.68%. Your Company has registered a profit before tax of Rs.299.50 Lakhs as against Rs. 258.84 Lakhs, in the previous year. The profit after tax of your Company stood at Rs.193.40 Lakhs as against Rs. 141.68 Lakhs in the previous year.

OUTLOOK ON OPPORTUNITIES, THREATS, RISKS AND CONCERNS:

The demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Apart from steady income gains, consumer financing has become a major driver in the consumer durables industry. The other factor for surging demand for consumer goods is the phenomenal growth of media in India. The flurry of television channels and the rising penetration of cinemas will continue to spread awareness of products in the remotest of markets.

The consumers will increase their spending owing to improving economic conditions. A large number of hypermarkets are expected to come into

existence in tier-I and tier-II cities across India within two years to capitalize the boom in organized retail sector. Approximately 315 hypermarkets are expected to come into existence in Tier-I and Tier-II cities across India by the end of 2011, according to a joint study by consultancy firm KPMG and industry body ASSOCHAM named `Reinventing India's Retail Sector'. Consultancy firm Technopak has opined that the organised modern retail segment in India will grow by over three times during the next five years (from 2010), to reach a figure of US$ 80 billion.

Your Company with the support of technical collaborator has developed Electric Cookers meeting the IEC standards to cater to the export market. With the manufacture of Electric Cooker and Mixer Grinder meeting the international IEC standard, your Company expects to increase the exports sales substantially in the coming years. Your Company has successfully launched the mechanical jar cooker during the year. With the launch of mechanical jar cooker, your Company has added one more product to its manufacturing portfolio. Throughout the year, the Company had continuous price-down negotiations with suppliers and resorted to localisation of imported material parts in order to achieve cost reduction targets. In addition, the Company implemented some in-house production of components to achieve greater cost efficiency and to improve quality of products.

Overall the sector promises significant growth opportunities. Strong distribution network, own manufacturing facility, market positioning and branding coupled with product technology that benefit the customer through low power consumption, low service requirement and low cost of operation are the factors which strengthen your Company.

Entry of new players both MNCs and domestic companies in the industry, unbranded products and cheaper imports are the main causes of concern at this stage. The increase in prices of key raw materials and persistent

power shortage are also a matter of concern which may negatively impact the margins of your Company as it would not be able to pass on the increase in input costs to the customers.

RISK MANAGEMENT:

Risk refers to events which hinder the achievement of business objectives the occurrence of which is uncertain, and Risk Management refers to a series of measures to recognize, confirm, evaluate and prioritize risks and, by establishing measures to respond to such risks in advance, to prevent the occurrence of or reduce such risks, or to minimize the damage caused when such risks occur. Your Company follows the risk management policy globally adopted by all Panasonic companies where it is committed to ensuring the achievement of its business plans by adequately promoting risk management and appropriately responding to risks that could impede the accomplishment of its business goals, with the aim of achieving the sustainable and steady growth of business.

INTERNAL CONTROL SYSTEMS AND ADEQUACY:

Your Company has a proper and adequate system of internal controls to ensure that its assets are safeguarded and protected against loss and from unauthorized use and to ensure that transactions are authorized, recorded, and reported correctly. The internal control systems are supplemented by internal audits by an external auditor and periodic reviews by management. The adequacy of the internal control systems are regularly tested by the Statutory as well as Internal Auditors. The systems and procedures are constantly upgraded to suit the requirements.

HUMAN RESOURCES:

Human Resource Management, work place safety and employee welfare have always been given utmost importance in your Company. The Company will continue to strengthen employer-employee relationship by providing a

conducive working environment and offering a competitive compensation package. Imparting adequate HR training programmes and specialized trainings to the employees of the Company is an on going exercise. The industrial relations in your Company continued to be cordial. The attrition rate for the year stood at 4%. The Company has 252 number of employees as on 31st March 2010.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis Report describing the Company's objectives, expectations or predictions may be forward looking within the meaning of applicable Securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could affect and influence Company's operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country

and other factors such as litigation and industrial relations.

Management Discussion & Analysis Consumer Durables

Documents

Transcript of Management Discussion & Analysis Consumer Durables