videocon industries ltd Management discussions

The management discussion and analysis report has been included in adherence to the spirit enunciated in the code of Corporate Governance approved by the Securities and Exchange Board of India (SEBI).

The Management Discussion and Analysis presented in this Annual Report focuses on reviewing the performance of the Company.

CONSUMER ELECTRONICS

INDUSTRY STRUCTURE AND DEVELOPMENT

The consumer durables industry is one of the most dynamic and fastest growing industries in India and is considered to be one of the largest in the world. The Indian government has announced the National Electronics Policy, 2019, which is expected to promote ease of doing business. The policy also intends to encourage the international brands to set up facilities in India and provide various ancilliary support to them. The policy initiatives take by Government of India such as "Make in India" drives the domestic manufacturing and as a result many manufacturers are planning to build their own manufacturing base in India owing to the availability of low cost labour in the country.

As per the management estimate, Indian appliances and consumer electronics market is estimated to increase at around 8-9.5 per cent CAGR to reach above Rs. 3 Trillion in 2021-2022.

As the LEDs attract import duty, it is expected that various international manufacturers shall set up manufacturing facilities in India under the theme of "make in India" and/or have alternative tie-ups with domestic manufacturers.

The Company expect the consumer durables market to register a growth of about 8 to 10% on back of improvement in overall consumption in domestic market.

The proposed increase in government expenditure on overall welfare and on rural programmes, rising average dual-household incomes, growing awareness amongst the customers, affordable pricing, improved standard of living, more purchasing power, nuclear families, higher disposable incomes, changing lifestyles, value for money, up-gradation of existing appliances with newer technological appliances, easy availabiity of finance are some of the major driving forces. Further, rapid proliferation of e-commerce and online retaining and other retail marketing initiatives such as exchange program, bundled offers, attractive discounts, freebies and extended warranties are also driving the overall demand. The Governments focus on rural electrification, housing for all so as to make affordable housing and power available to all the citizens of India and facilitate round the clock availability of power are expected to be major key factors for strong growth in the consumer electronics and home appliances market.With an affluent middle class and the countrys economic growth being on a rapid track, the consumer electronics industry has never before witnessed such amazing growth. With the Internet of Things (IoT) becoming a way of life, smaller, real-world devices such as home appliances, sensors, consumer electronic devices, etc. are getting connected to the Internet. The Internet of Things (IoT) is bringing billions of things into the digital fold, which will make the IoT a growing industry in India.

This sector comprises three segments viz., white goods, brown goods and consumer electronics/durables. Consumer durables is one of the fastest growing industry segments in India.

a. White Goods: Air conditioners, Washing Machines and Refrigerators

b. Brown Goods: Mixer Grinders, Microwave ovens, Cooking range, Juicers, Irons, Toasters, Electric fans, Vacuum Cleaners, Dishwashers, Water Purifiers, Dryers etc.,

c. Consumer Electronics: Television, Computers, Mobile Phones, Laptops, Gaming Consoles, Audio and Video systems, Home systems etc.,

The company is engaged in the manufacture and wholesale and retail trade of consumer electronics and home appliances items.

The Company engages in the manufacture, sales and service of the following types of products:

- Television

- Refrigerators

- Washing Machines

- Air Conditioners

There has been sharp decline in the manufacturing of the consumer electronics goods due to lack of demand on account of uncertainty in services; and cash crunch situation.

Televisions:

With the advancing technology, there is growing preference for smart offices and smart homes, where smart TV is an important part of it. Smart TV serves multifold purposes such as entertainment, music player and running internet based applications i.e. transforming it into a computer such as streaming videos from Amazon TV, Netflix and Google play store.

Rising disposable income of the people of consumer electronics and their shift in preferences towards smart homes and smart offices environment, average dual-household incomes, growing awareness amongst the customers, affordable pricing, improved standard of living, more purchasing power, nuclear families, higher disposable incomes, changing lifestyles, value for money, up-gradation of existing TVs with newer technological appliances are thus majorly driving the growth of the market.

With smart TV functions, the screen size, display type and resolution are also vital factors impacting the sales of smart TVs. High end TV still has to go long to have larger market share in India. The 4K TV is a trend India but soon the trend will change and upgrade as per the developed technology across the globe.

The contribution of smart TVs to overall sales has gone upto significantly over last few years and the share is expected to move up. Smart TVs market in India registered robust growth in 2018-19 attributed to a sharp drop in the prices of the Smart TVs as well as rising penetration of Smart TV vendors.

With the increasing innovation and technological improvements in the consumer electronics industry, the cost of Smart TVs is expected to see a downward trend in future as well. Factoring these, we can say that Smart TVs are well on their way to become one of the preferred mainstream products in India.

Smart TV could play an important part in the overall Smart city initiative of the Government. Being embedded in the government systems, it can be an important element of the Information & Communication Technologies (ICT). TVs equipped with technologically advanced and smart features can support the initiative, by enabling users to keep a watch on the streets for suspicious activities or to warn people who litter the streets. Smart TVs could also download important announcements/videos which could be circulated by the municipal and governing bodies of various regions.

The Videocon LEDs has many advanced features. Some of the many advanced features of Videocons high-end TVs include Ai Smart TV (understands your preference of viewing, favourite choices, order of priority and provides you with a customized viewing experience by organizing and programming as per your preferences and is powered with android operating system); Liquid Luminous Display (enables the TV screen to reproduce up to 95% of the visualization capability of the human eye, whereas conventional LED screens are able to deliver only up to 72% in this regard); 4K Ultra HD (best in class display with crystal clear picture), Wireless display connectivity (Screen Mirroring without use of HDMI or VGA cables) and Star rated ("Go Green" initiative for power saving in compliance with BEE norms).

Refrigerators:

The Indian refrigerators market is categorized into two product types

i.e. direct cool refrigerators and frost free refrigerators. Frost free refrigerators do not require manual defrosting and on the contrary in direct cool refrigerators manual defrosting is needed. The frost free refrigerator market of India is gaining massive popularity and momentum over traditional refrigerator models. Direct cool refrigerators dominate in the Indian market whereas frost free refrigerators are becoming popular among urban households.

Energy star rating, Rising household income, Improving living standards, Rapid urbanization, Increasing number of nuclear families, Large untapped market, Environmental changes, Warranties, Discounts, Incentives, Easy cleaning facilities are major growth drivers for the refrigerator industry. The efforts of players to offer affordable and eco-friendly variants and strategies to penetrate into smaller towns are acting as a driving force for the industry. Further, rising per capita income, increasing role of the government to support FDI in India and easy availability of financing will also drive the industry. New lifestyles where food is kept for longer after cooking is also driving up demand for refrigerators. Penetration of electricity and affordable housing offer the space and possibility of buying a fridge to those who would not be able to use one earlier. The major players are cutting their prices and launching the new models with advanced features and new designs. With the rising per capita income levels, declining prices and consumer finance the refrigerator market is expected to grow in future years. The utility and the need of refrigerator is felt 365 days in a year, and hence has become an indispensable item of every household. Moreover, due to the hot and humid weather conditions in the country, the necessity of the product has increased manifolds.

Videocons refrigerators are designed keeping the Indian consumers needs and choices in mind. Apart from the high quality in design and manufacturing, they also carry the signs of innovativeness that distinguish the companys other products inter-alia including Most energy Efficient (certified by Bureau of Energy Efficiency); Varied power rating to suit your electricity consumption tolerance, with up to 5 star rating in direct cool category; Highly durable compressor; Humidity Control; Photosis Fresh (technology that helps to keep the fruits and vegetables breathing inside the refrigerator); Active air-flow; Wine rack; Cool booster pack with a lower melting point than ice; Toughened glass; Chiller tray with bottle storage for beverages best served chilled and PCM/VCM finish doors with high gloss and designer patterns for greater aesthetic appeal.

Washing Machines:

Growing disposable income and easy financing options have led to shortened replacement cycles whereas rising influence of modern lifestyle has perceived products such washing machines as utility items rather than luxury goods.

In the current scenario washing machines are no more a privilege. It has become an essential item in every house making the practice of washing clothes more intelligent, personalised and time saving. New technologies include Smart features washing machines along with the reduction in water usage.

Videocon expanded its product portfolio to Fully Automatic Top loading and Fully Automatic Front loading in sizes ranging from 5.5 Kg to 10Kg. Videocon fully automatic washing machines has vibrant colours and aesthetically superior looks, water saver function, multiple wash selection option, lesser water consumption and higher performance continues to be a popular series. In Semi-Automatic Category, development with vibrant colours and aesthetically superior looks and multiple wash selection option was done across the models.

Air Conditioner:

The market of air conditioners in India has been on a steady growth. The market is all set to undergo a phenomenal upheaval in the next 5 years. Factors such as changing consumer lifestyle, awareness about green and energy efficient products, raising per capita income and extremely hot and humid climate through most part of the year are playing a crucial role.

Owing to BEE guidelines and power savings, consumers have developed a major preference for energy efficient models towards 5 Star rating and Inverter ACs. BEEs star labelling norms have become more stringent with its introduction of ISEER rating according to which a 5 star Model in 201718 would be a 3 star model soon.

Increasing demand by the residential sector owing to reduction in prices has instigated the manufacturers to aim for a higher market share in the highly potential market of air conditioners in India. The demand from the commercial segment is catching up fast with the increasing number of commercial offices, stores and business apartments being set up, as compared to the demand from the residential segment.

Videocon Air conditioners has best of features and includes Non CFC - Refrigerant AC development with Ozone friendly refrigerant R410a development for environment protection against Global warming and Ozone layer depletion; Inverter AC development i.e. Energy efficient Air-conditioner, Energy consumption reduction and better comfort for customer due to variable speed compressor running through DC Inverter Technology; G mark and CB approved air-conditioner models for export; and Energy efficient AC development as per the new ISEER rating norms by BEE.

INDUSTRY STRUCTURE & DEVELOPMENT INDIAN OIL & GAS INDUSTRY

The oil and gas sector is among the eight core industries in India and plays a major role in influencing decision making for all the other important sections of the economy. Indias economic growth is closely related to energy demand; therefore the need for oil and gas is projected to grow more, thereby making the sector quite conducive for investment. The Government of India has adopted several policies to fulfil the increasing demand. The government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products, and refineries, among others.

As per the media source, the Government of India has taken various initiatives to promote oil and gas sector which inter-alia include:

• The Government of India is planning to set up around 5,000 compressed bio gas (CBG) plants by 2023.

• Government of India is planning to invest Rs. 70,000 crore (US$ 9.97 billion) to expand the gas pipeline network across the country.

• In September 2018, Government of India approved fiscal incentives to attract investments and technology to improve recovery from oil fields which is expected to lead to hydrocarbon production worth Rs. 50 lakh crore (US$ 745.82 billion) in the next twenty years.

• The Oil Ministry plans to set up bio-CNG (compressed natural gas) plants and allied infrastructure at a cost of Rs. 7,000 crore (US$ 1.10 billion) to promote the use of clean fuel.

Road Ahead

Energy demand of India is anticipated to grow faster than energy demand of all major economies, on the back of continuous robust economic growth.

OIL & GAS - SEGMENT OF VIDEOCON

The Company has established its presence in Oil and Gas business in India and Overseas, directly and through its subsidiaries/joint ventures. The interest in the domestic Ravva block is directly held by Videocon Industries Limited while the Participating Interest in the overseas oil and gas assets is held through subsidiaries/joint ventures.

The original term of the Ravva product sharing contract was due to expire on October 27, 2019. After the balance sheet date, the production sharing contract was extended and, accordingly, the production sharing contract (PSC) is now valid effective 28th October, 2019, for the next 10 years. The extension will enable the joint venture partners to recover about 13 million barrels of oil equivalent (boe) of oil.

In case of the Brazil assets, the Participating Interest is held by a company named IBV Brazil PetroleoLimitada, which is a50:50 JV of Videocon Energy Brazil Limited (a 100%subsidiary of VHHL) and BPRL Ventures BV ("a wholly owned subsidiary of BPRL International BV, Netherlands).

Over the years, Videocon has also acquired technical capabilities for prospecting and playing an effective supporting role for development of its oil and gas assets.

Domestic Asset

Videocon has a participating interest of 25% in the Ravva block. Cairn India Ltd. is the operator of the block. The Ravva block is a mature shallow water asset (depth 5 to 40 meters) located in Krishna Godavari Basin, off the Andhra Pradesh coast. The block was discovered in 1987 by ONGC and the block began production in 1993. Government of India (GOI) made the Ravva field (along with several other fields) available for foreign investment in 1994 in an effort to increase the countrys oil and gas production and also to bring in best of class technologies. The production sharing contract for the block was signed in October 1994 for a period of 25 years and is valid till October 2019. Cairn India Ltd. is the operator of the block. Apart from Videocon with a 25% PI, the other members of the consortium are ONGC (40%), Vedanta Ltd (22.50%), Ravva Oil (Signapore) Pte Ltd (12.50%).

The original term of the Ravva product sharing contract was due to expire on October 27, 2019. After the balance sheet date, the production sharing contract was extended and, accordingly, the production sharing contract (PSC) is now valid effective 28th October, 2019, for the next 10 years. The extension will enable the joint venture partners to recover about 13 million barrels of oil equivalent (boe) of oil.

Overseas Assets

Videocon through its subsidiaries has participating interest in 8 overseas oil & gas blocks, of which 7 are in Brazil and one in Indonesia. Over the years, Videocon has also acquired technical capabilities for prospecting and playing an effective supporting role for development of its oil and gas assets. Videocon has partnered with leading international oil and gas companies like BP, Total and Anadarko, one of the worlds largest independent E&P companies in Campos Basin in Brazil, PT Pertaminathe National Oil Company of Indonesia while it has partnered with Petrobras a semi-public Brazilian multinational corporation in the petroleum industry in the Sergipe Basin containing the Barra, Farfan&Cumbe Oil and Gas Discoveries. These blocks are estimated to hold significant oil and gas reserves and major discoveries have been announced.

Assets in Brazil

i) BM SEAL-11 Concession

The BM-SEAL-11 Concession comprises of four (4) ultra-deep water blocks viz. SEAL-M-426, SEAL-M-349, SEAL-M-497 and SEAL-M- 569,in north eastern Brazil located in the Sergipe-Alagoas basin. Petrobrasis the operator of the concession. The group holds 20% PI in the concession via IBV Brazil PetroleoLimitada, a 50-50 JV Company with Bharat Petro Resources Ltd. (BPRL) - a wholly owned subsidiary of Bharat Petroleum Corporation Ltd. (BPCL). In BM-SEAL-11 concession Five Appraisal Plans viz. Barra, Farfan, Cumbe, Papangu and Poco Verde structures, with various timelines, have witnessed significant hydrocarbon discoveries which are all in different stages of appraisal/ evaluation phases along with neighbouring Joint Venturers in a unitization proposal and the same are heading towards commercialization. JV has approved Extended Well Test (EWT) in the Farfan Field.

ii) BMC-30 Concession

The BMC-30 Concession in the Campos Basin is located offshore to theRio de Janeiro and Espirito Santo States. Wahoo is a major oil discovery made in this concession. Anadarko, one of the worlds largest independent E&P company, is the operator of this Concession. Meanwhile, as a part of Anadarkos worldwide corporate strategy, conveyed its decision to resign as operator and exit BMC30, on March 15, 2018. The remaining partners BP, Total and IBV have consented to continue in the JV. The JV Parties have approved BPs nomination to succeed Anadarko as Operator of the BM-C-30 Concession.

The group has 12.50% Participating Interest (PI) in the concession which is held through IBV BrasilPetroleoLimitada, a 50-50 JV Company with BPRL.

iii) BM-POT-16 Potiguar Basin Concession

Videocon has participating interest in two blocks in Potiguar Basin Concession. Potiguar Concession Contract POT-M-16 was signed on January 12, 2006 in the Seventh Round of Bidding, comprising of Blocks POT-M-663, POT-M-760 and covers an area of 1,535 sq. km. Petrobras is the Operator with 30%. The group has a 10% participating interest in the Concession, which is held through IBV BrasilPetroleoLtda, a 50 : 50 JV Company with BPRL. Well Ararauna, was drilled which discovered thin oil bearing sands

inAlbian/Cenomanian age and Discovery Assessment Plan(PAD) was approved by ANP to further appraisal. All the other activities, including G&G studies, are going on as scheduled in the latest Appraisal Plan approved by ANP. Multi-client 3D seismic surveys, totalling 2158 Km2, planned to cover blocks 663 and 760 in POT- 16 concession. The surveys by M/s PGS started in the last quarter of 2017 and completed by March 2018. Interpretation of the newly acquired seismic 3D data is expected to help finalize the firm well location to be drilled in the 4th quarter of 2019.

Assets in Indonesia:

The Nunukan block in Indonesia is located in the Tarakan Basin on the continental shelf of northeast Kalimantan, which is in the prolific oil & gas producing Kutei Basin. Hydrocarbon exploration activities in Nunukan area were concentrated mainly onshore before the end of 19th century. Tarakan Basin is aproducing field having more than 10 discoveries which went into production. PT Pertamina (PHENC),the national oil company of Indonesia, is the operator. Consequent to JV Partner PT Medco exiting from the PSC, Videocon Indonesia NunukanInc (VINI) and Pertamina (Operator) the consenting partners picked up its 40% participating interest share on prorate basis, with BPRL abstaining. SKK Migas conveyed its formal approval on September 18, 2015 for the same, resulting in increase of VINIs participating interest from12.50% to 23.00% without cost. In Nunukan Block successful oil and gas discoveries are announced in Badik Field in three wells and the West Badik Field in one well. Subsequent drilling of Parang Well has discovered Oil & Gas in Nunukan Block has been ranked as one of the top ten discoveries of the world for the year

2017. Government has approved Plan of Development (POD-1) of Badik- West Badik Discoveries. The integrated development concept envisages 3 platform seach in Badik-West Badik and Parang Fields, while 2 platforms are planned for Keris Field. Keris prospect is proximally located on the flank of Bunyu structure which is a producing field and share the same trend with Badik - West Badik - Parang structures.

OPPORTUNITIES AND THREATS

Opportunities: Consumer Electronics & Home Appliances Sector

• The Indian government has announced the National Electronics Policy, 2019, which is expected to promote ease of doing business. The policy also intends to encourage the international brands to set up facilities in India and provide various ancillary support to them.

• The policy initiatives take by Government of India such as "Make in India" drives the domestic manufacturing and as a result many manufacturers are planning to build their own manufacturing base in India owing to the availability of low cost labour in the country.

• It is expected that various international manufacturers shall set up manufacturing facilities in India under the theme of "make in India" and/or have alternative tie-ups with domestic manufacturers.

• Huge domestic demand to be an influence in attracting investments.

• With rise in income level of the customers and availability of easy finance, the discretionary spending has become important. As a result, the durable goods which were earlier considered to be luxury are now being considered as a necessity.

• Internet subscribers in India have increased significantly in last few years and it is expected to grow further. This could be a driving factor for innovation in the Smart TVs and other consumer durables.

• Increase in the awareness about Smart TVs is a significant factor which could be driving the growth in sales of Smart TVs in India.

• Rapid urbanization is helping in the growth of consumer electronics and home appliances industry. There has been a paradigm shift of the Indian population in terms of rural-urban divide. The aspiration of higher income, higher standard of living have drawn more and more people from villages to settle in towns and cities. This transition has led to an increase in the demand for goods.

• The growing use of credit and debit card and easy availability of credit has resulted in the increase in spending inter-alia including on purchases of consumer electronics and home appliances thereby fuelling the demand in the durables sector.

• The growth of mediums such as e-commerce and m-commerce has provided retailers to stay in touch with consumers via various mediums and thus increase on their sales by constant promotion of products. Further, the incentives such as cash-back, discounts, freebies offered through e-commerce has huge positive impact on sales of consumer electronics and home appliances and the demand is further expected to boost over the years.

• The rapid growth of population, affordable housings, opportunities in the semi-urban and urban areas have led to growth of nuclear families. This has pushed the demand for consumer electronics and home appliances.

• The growing number in dual income families (both husband and wife earning) has given greater purchasing power and willingness to spend to them which has pushed familys focus towards luxury/ semi-luxury products resulting into higher demand for consumer electronics and home appliances.

• With the development of the communication channel and the rise of Information, Communication and Technology Industry, a rise in media across the world is seen. Number of people with internet access has increased drastically and it has thus created a new opportunity for companies to position/market their products in a better way using improved and more efficient marketing channels. Social media too is playing vital role in shaping the position of the product.

Opportunities: Oil and Gas Sector

• Extension of Ravva PSC period.

• Additional exploration over and above proposed development in Brazil and Indonesia to further augment petroleum reserve base.

Threats: Consumer Electronics & Home Appliances Sector

• The Industry is highly capital intensive and the Company is having fund constraints.

• Brand Loyalty is moderate

Due to the high marketing spends of multinational companies (MNCs) and new brands entering in India, the company faces the threat of a preference developing among consumers for foreign brands.

• The rise of modern trade retail chains of various hues leads to the risk of concentration of the sales to a few large customers. This is a threat to the margins of the company. It can be countered by enhancing the pull factors that drive sales through brand building measures at the corporate level.

Threats Oil and Gas Sector:

• Long gestation period of development and production of oil and gas projects in deep water;

• Huge up and downs in oil prices.

SEGMENT-WISE PERFORMANCE

The segment-wise turnover on consolidated basis is as under:

		(Rs. in Million)
Segment	Year ended on 31st March, 2019	Year ended on 31st March 2018
Consumer Electronics and Home Appliances	2,813.01	23,222.12
Crude Oil and Natural Gas	6,286.86	5,275.65
Telecommunication	10.39	1,577.82
Total	9,110.26	30,075.59

RISK & CONCERNS

Risks relating to Consumer Electronics & Home Appliances Business:

• Rising input prices such as the selling, general & administrative expense along with the cost of goods sold is difficult to control and thus a reduction in profit margin is seen.

• International manufactures are now partnering with e-retailers to promote sales and increase penetration in the Indian market.

• These days setting up a manufacturing facility or expanding the product line is very capital intensive.

• Non availability of adequate working capital is a great concern.

INTERNAL CONTROL SYSTEMS AND ACCURACY

Internal control is all of the policies and procedures management uses to achieve the following goals.

• Promote efficient and effective operations - Internal controls provide an environment in which managers and staff can maximize the efficiency and effectiveness of their operations.

• Safeguard assets - well designed internal controls protect assets from accidental loss or loss from fraud.

• Ensure the reliability and integrity of financial information - Internal controls ensure that management has accurate, timely and complete information, including accounting records, in order to plan, monitor and report business operations.

• Ensure compliance - Internal controls help to ensure that company is in compliance with the many federal, state and local laws and regulations affecting the operations of our business.

• Accomplishment of goals and objectives - Internal controls system provide a mechanism for management to monitor the achievement of operational goals and objectives.

Internal Control Activities and Best Practices

Internal control activities are the policies and procedures as well as the daily activities that occur within an internal control system. A good internal control system should include the control activities listed below. These activities generally fit into two types of activities.

1. Preventive: Preventive control activities aim to deter the instance of errors or fraud. Preventive activities include thorough documentation and authorization practices. Preventive control activities prevent undesirable "activities" from happening, thus require well thought out processes and risk identification.

2. Detective: Detective control activities identify undesirable "occurrences" after the fact. The most obvious detective control activity is reconciliation.

With a good internal control system in place, other considerations to keep in mind include:

Regularly communicate updates and reminders of policies and procedures to staff through emails, staff meetings and other communication methods.

Periodically assess risks and the level of internal control required to protect organization assets and records related to those risks. Document the process for review, including when it will take place.

Management is responsible for making sure that all staff are familiar with company policies and changes in those policies.

DISCUSSION ON FINANCIAL PERFORMANCE

Comparative performance of the Company on Standalone Basis is set out hereunder:

Fixed Assets:

The Net block of the Company including Capital Wbrk in progress and Other intangible Assets as on 31st March, 2019 was Rs. 55,851.61 Million and against the net block including Capital Work in progress and Other intangible for the period ended on 31st March, 2018 was Rs. 61,085.13 Million.

Income:

Revenue from Operations

During the year ended 31st March, 2019 the Company achieved gross Revenue from Operations of Rs. 9,065.97 Million as against Rs. 28,398.61 Million for the period ended 31st March, 2018.

Other Income

Other income for the year ended 31st March, 2019 amounted to Rs. 1,560.16 Million as against Rs. 5,840.46 Million for the year ended 31st March, 2018. Other income comprises of income from investments and securities division, profit on sale of fixed assets, insurance claim received, Exchange rate fluctuation, interest and other non-operating income.

Expenditure

Cost of Goods Consumed/Sold

During the year ended 31st March, 2019 Cost of Goods Consumed/ Sold stood at Rs. 13,300.53 Million as against Rs. 35,292.07 Million for the year ended 31st March, 2018.

Production and Exploration Expenses for Oil and Gas

During the year ended 31st March, 2019 the production and exploration expenses for oil and gas were Rs. 4,209.99 Million as against Rs. 3,361.65 Million for the year ended 31st March, 2018.

Employee Benefits Expense

During the year ended 31st March, 2019, the employee benefits expense stood at Rs. 1,187.88 Million as against Rs. 2,170.77 Million for the year ended 31st March, 2018.

Other Expenses

During the year ended 31st March, 2019, the other expenses were Rs. 3,904.27 Million as against Rs. 8,419.67 Million for the year ended 31st March, 2018.

Finance Costs

For the year ended 31st March, 2019, Finance costs amounted to Rs. 37,749.00 Million as against Rs. 28,310.02 Million for the year ended 31st March, 2018.

Depreciation, Amortisation and Impairment

Depreciation for the year ended 31st March, 2019 amounted to Rs. 5,255.10 Million as against Rs. 8,148.45 Million for the year ended 31st March, 2018.

Profit/Loss Before Tax

The loss before tax stood at 69,114.09 Million for the year ended 31st March, 2019, as against loss of Rs. 58,401.55 Million for the year ended 31st March, 2018.

Tax Expenses

Tax Expenses includes Deferred Tax. For the year ended 31st March, 2019, the tax expenses amounted to Rs. (1,506.54) Million as against Rs. (5,761.18) Million for the year ended 31st March, 2018.

Net Profit/Loss

Net loss for the year ended 31st March, 2019, is Rs. 67,607.55 Million as against net loss of Rs. 52,640.37 Million for the year ended 31st March,

2018.

Details of significant changes (i.e change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation thereof, including:

S. No	Nature of Ratio	Percent change	Reason
1	Debtor Turnover	0.70	There has been a significant change in all the key financial ratios on account of overall impact on the operations of the Company.
2	Inventory Turnover	1.58
3	Interest Coverage Ratio	(0.83)
4	Current Ratio	0.14	The operations were impacted on account of the referral and consequently the commencement of Corporate Insolvency Resolution Process.
5	Debt Equity Ratio	(10.84)
6	Operating Profit Margin (%)	(328.76)
7	Net Profit Margin (%)	(745.14)

Similarly, the change in Return on Net Worth as compared to the immediately previous financial year was on account of significant losses and provisioning.

OUTLOOK

The medium to long term, the view is positive, giving the rise in affordability levels (combination of increasing disposable incomes and the trend of reducing prices), and the existing low household penetration base for consumer durables. The growth prospects for individual items would, however, depend on specific demand drivers. The Company has adopted the best and the most sophisticated technology to suit Indian needs. The Company has been planning international forays in the same industry and has successfully forayed into international market either directly or indirectly.

The company focuses on Ingenious Strategy, Improved Technology, Innovative Products, Inspired Thinking and Insightful Marketing. Company focuses on Customer and his needs and is committed to delight and deliver beyond what is expected.

The aim of the Company is to serve consumers domestically as well as internationally by creating technologically path breaking products through constant innovation. The Company as a part of reducing manufacturing cost of products has explored the possibility of manufacturing various components at the in-house facility by setting by standalone facilities.

MATERIAL DEVELOPMENTS ON HUMAN RESOURCE

The Human Resource function of your Company plays a critical role in realizing business objectives by leading organizational change and effectively mobilizing talent to sustain the organizations competitive age.

The Company believes in building performance driven organization characterized by performance, pride and happiness. The Company conducts employee engagement surveys through expert agencies to identify the areas to improve upon for building a motivated and productive workforce.

The total manpower strength of the Company for the financial year ended 31st March, 2019, is around 1,528.

Industrial relations remained cordial during the period under review.

CAUTIONARY STATEMENT

Statements in this report describe the Companys objectives, projections, estimates, expectations and predictions, may be ‘forward looking statements within the meaning of applicable securities, laws and regulations. Actual results could differ materially from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise. These statements doesnt guarantee future performance and are subject to known and unknown risks, uncertainties and other factors such as change in the government regulations, tax laws, economic conditions and other incidental factors.