Question

Wind turbine maker Leone Energy posted a net loss of Rs. 250 crore for the fourth quarter ended March 31, 2010 as against a net profit of Rs. 350 crore in the same quarter a year ago. In the financial year 2009–10, the company clocked a gross income of Rs. 6,517 crore, as against Rs. 9,778 crore in the previous year. Leone Energy clocked a loss of Rs. 1,100 crore in 2009–10, as against a net profit of Rs. 2,300 crore in 2008–09. The sales revenue stood at Rs. 22,400 crore for the year, approximately 21% less than Rs. 28,350 crore last year. For the financial year ending March 31, 2010, Leone Energy’s sales volume (in terms of capacity of projects executed) was 4,560 MW from 2,935 MW a year ago.
The CEO of Leone Energy in his message to shareholders suggested that the poor performance of the company was the result of adverse economic conditions during the year ended March 31, 2010. You are a shareholder owning 5% of the shares of Leone Energy, have seen the stock price decline by more than 50% during the year 2009–10, and are quite upset with the way the management has been handling the business. You have decided to confront the management at the next shareholders’ meeting and have chosen the following 5 points to argue against the CEO’s version of the story.
Select the most appropriate order of these 5 statements that you, as a disappointed shareholder, should adopt as a strong and robust preface in your case against the management in front of the management and other shareholders:
a. The management is not doing its best to maintain the profitability of the company.
b. The company has actually increased its sales volume during the year under consideration.
c. The adverse economic conditions have led to a worldwide increase in the adoption of alternative energy sources, reflecting in all-time highest profits for wind turbine makers in both developed and developing countries.
d. The management has been lax with its employees as the management enjoys a large set of benefits from the company that they would have to forgo if they became strict with employees.
e. The company is trying to increase sales by charging lower, unprofitable prices.

• A. b, c, a
• B. a, c, b
• C. b, e, c
• D. c, b, e
• E. e, b, c

Hint:

When rebutting management claims, always begin with external facts (global industry), then move to company-specific performance, and finally strike with the internal strategic flaw (pricing, costs).

Answer 1

The Correct Option is D

Step 1: Identify the CEO’s claim.
The CEO blames “adverse economic conditions” for the poor performance. The counterargument must show that global conditions were actually favorable, and that Leone’s poor results were due to internal management issues.

Step 2: Logical sequence of rebuttal.
- (c) First, show that globally, wind turbine makers prospered despite economic conditions. This discredits the CEO’s external-blame argument. ✓
- (b) Next, highlight that Leone itself increased its sales volume — meaning demand and production were not the issue. ✓
- (e) Finally, emphasize that the problem lies in pricing strategy — selling at lower, unprofitable rates despite higher volumes, which directly led to losses. ✓

Step 3: Eliminate irrelevant points.
- (a) Too generic and does not directly counter the CEO’s reasoning. ✗
- (d) Employee laxity and perks are secondary issues, not central to profitability. ✗

Step 4: Conclude.
The strongest and most structured preface is: \[ \text{(c) } \rightarrow \text{(b) } \rightarrow \text{(e)} \] \[ \boxed{\text{c, b, e}} \]