Q4 AGENDA for CHANGE (part-a) Strategic Financial issues the company faces:

Strong competitive pressure Slow down in spending on defencebased components Lack of spending on R&D/investment in new projects (lowest level since 1930)/ AMT Lack of accountability of managers / poor pay Poor nature of company buildings Risk of hostile bid being carried out by one of our competitors No CSR environmental issues financial & reputational impact

Alternatives to pursue:

1.

Obtaining R & D expertise (via acquisition) may take years to develop ourselves

Do have cash/resources to acquire another competitor with a strong R&D division

This would reduce competition and increase market share.

2.

Adopt AMT should lead to operational efficiency, reduced costs & hence increase in profits

3.

Motivating managers/incentives Improve pay/conditions:

Introduce Share options linked to performance, more equity participation

4.

Return cash to Shareholders if no investment opportunities

Special dividend or Share buybacks

Share buybacks maybe more beneficial as it does not tie up the company to make increased payouts in future

5.

Update company buildings / infrastructure

6.

CSR to protect environment

7.

Carry out Post Completion Audit (PCA) to ensure projects dont overrun, managers accountability