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Genus Power Infrastructures Ltd.

BSE: 530343 Sector: Engineering
NSE: GENUSPOWER ISIN Code: INE955D01029
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OPEN 72.90
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VOLUME 144165
52-Week high 75.65
52-Week low 36.50
P/E 36.98
Mkt Cap.(Rs cr) 1,845
Buy Price 71.75
Buy Qty 450.00
Sell Price 0.00
Sell Qty 0.00
OPEN 72.90
CLOSE 72.30
VOLUME 144165
52-Week high 75.65
52-Week low 36.50
P/E 36.98
Mkt Cap.(Rs cr) 1,845
Buy Price 71.75
Buy Qty 450.00
Sell Price 0.00
Sell Qty 0.00

Genus Power Infrastructures Ltd. (GENUSPOWER) - Director Report

Company director report

Directors' Report

Dear Shareholders

Your Directors have pleasure in presenting the 24th Annual Report together with theaudited financial statement of the Company for the financial year ended March 31 2016.

FINANCIAL RESULTS

The financial performance of the Company for the financial year ended March 31 2016 isas under:

(Rs. in lacs except per share data)
Standalone Consolidated
Particulars Year ended March 31 2015 Year ended March 31 2016 Year ended March 31 2016
Revenue from operations (gross) 92393.53 86923.96 86923.96
Total income from operations (net) 92736.47 87179.22 87179.22
Total expenses (excluding interest depreciation and amortization) 79221.02 73338.12 73338.12
Earnings before interest depreciation and amortization 13515.45 13841.10 13841.10
Less: Interest depreciation and amortization expenses 4933.29 4286.61 4286.61
Profit before exceptional and extraordinary items 8582.16 9554.49 9554.49
Add/(Less): Exceptional items (1743.58) 235.86 235.86
Profit before tax and extraordinary items 6838.58 9790.35 9790.35
Add/(Less): Extraordinary items 240.86 - -
Profit before tax 7079.44 9790.35 9790.35
(Less): Tax expenses (including MAT credit) (1767.10) (1945.29) (1945.29)
Profit after tax (PAT) 5312.34 7845.06 7850.50
Earnings per share (after extraordinary items) (Basic) (Rs.) 2.07 3.06 3.06
Earnings per share (after extraordinary items) (Diluted) (Rs.) 2.06 3.04 3.04

REVIEW OF FINANCIAL PERFORMANCE AND THE STATE OFFICOMPANY’S AFFAIRS

Your Company performed well in Financial Year (FY) 2015-16 with a highest ever madeoperating Profit and net Profit. Your Company demonstrated a strong financial performanceon the back of financial discipline domain pro ciency and in-house innovationcapabilities.

The key performance highlights are as under:

The revenue from operations decreased by 5.92% to Rs.86923.96 lacs from Rs.92393.53lacs reported in the previous year. However post adjustment of power backup solutionsbusiness (discontinued with effect from April 01 2015) the revenue from operations(‘Adjusted Sales’) increased by 5.77% to Rs.86923.96 lacs from Rs.82184.70 lacsin the previous year. This was the result of our increased market share in the arena ofsmart metering and power infrastructure on the strength of our in-house innovation andengineering capabilities with constant cost discipline. The present government’sincreased thrust on revival of power utilities/discoms through smart grid and smartmetering mainly to improve their financial health by stoppage of power transmission anddistribution losses has helped the Company in increasing its market share in the arena ofsmart metering and power infrastructure.

Earnings before interest tax depreciation and amortization (Operating Profit)increased by 2.41% to Rs.13841.10 lacs from Rs.13515.45 lacs in previous year as a resultof the higher adjusted sales improved cost discipline and effective material management.

Finance cost reduced to Rs.2887.51 lacs from Rs.3323.93 lacs in the previous year onaccount of effective utilisation of available funds and reduction in the higher-costdebts. Further the gross debts decreased by 35% to Rs.23303.88 lacs from Rs.36056.65 lacsin the previous year.

Profit before exceptional and extraordinary items raised by 11% to Rs.9554.49 lacs fromRs.8582.16 lacs in the previous year.

Exceptional items of Rs.235.86 lacs for the year ended March 31 2016 represent gain ondisposal of its power backup solutions business. Exceptional items of Rs.1743.58 lacs forthe year ended March 31 2015 pertain to provision for diminution in value of investmentin Genus SA Brazil. In the best interest of the Company in longer perspective the Boardof Directors of the Company has approved the disinvestment through transfer by way of saleof shares of the joint venture namely Genus S.A. Brazil or disinvestment through otherlegitimate procedures/ways involving write-off of the investment (or financial commitment)of Rs.1743.58 lacs in ‘Genus SA’ Brazil from the books of accounts of theCompany under automatic route/general permission of the Reserve Bank of India as perRegulation 16 and Regulation 16(1A) of FEMA 120 amended/inserted in the Foreign Exchange

Management (Transfer or Issue of Any Foreign Security) (Amendment) Regulations 2004vide the Foreign Exchange Management (Transfer or Issue of any Foreign Security) (FourthAmendment) Regulations 2013 (Noti cation No.277/2013-RB dated May 08 2013).

Extraordinary items during the year ended March 31 2015 amounting to Rs. 240.86 lacsrelates to relief received from IOCL through RIICO Limited against damages claimed by theCompany towards IOCL re accident in year 2009.

Net Profit increased by 47.68% to Rs.7845.06 lacs from Rs.5312.34 lacs in the previousyear mainly due to reduction in finance cost gain on disposal of its power backupsolutions business and due to provision for diminution in value of investment in Genus SABrazil in the previous year.

Earnings per share (Basic) (after extraordinary items) for the year ended March 312016 stood at Rs.3.06. Earnings per share (diluted) (after extraordinary items) for theyear ended March 31 2016 stood at Rs.3.04.

The Company has written-off liquidated damages and bad debts of Rs.1351.99 lacs whichmainly represented liquidated damages and deductions by indenting agencies as per theterms of the contracts of supplies.

Net worth of the Company as at March 31 2016 climbed to Rs.65659.76 lacs fromRs.48431.25 lacs as at March 31 2015. During the year under review GenusShareholders’ Trust has sold 20000000 equity shares of the Company and in linewith the purpose of the trust remitted the proceeds to the Company. The surplus arisingon such distribution of Rs.10051.55 lacs and the amounts received towards dividend onshares of the Company held by the trust of Rs.95.00 lacs have been recognised directly inthe reserves as such amounts have arisen on shares of the Company.

Debt-to-equity ratio is 0.35 as against 0.74 in the previous year.

For concentrating on core areas of bigger potentials the Company had entered into anagreement with Genus Innovation Limited on February 17 2015 for disposal of its powerbackup solutions business and complete range of Inverters/UPS Solar PCU and Batterieswith effect from April 1 2015. The Company has completed the transaction and suchtransaction has resulted in a gain of Rs.235.86 lacs which has been disclosed asexceptional item. The income and expenses in respect of the activities attributable toabove discontinued operations included in the working results are as follows:

(Rs. in lacs)
Particulars For Year ended March 31 2015 For Year ended March 31 2016
Total income 10208.83 -
Total expenses 9971.63 -
Profit before tax 237.20 -
Tax expenses 49.81 -
Profit after tax 187.39 -

 

The carrying amount related to above business is as follows: (Rs. in lacs)
Particulars As at March 31 2015 As at March 31 2016
Total assets 5127.37 -
Total liabilities 445.23 -
Net assets 4682.14 -

OPERATIONS AND BUSINESS PERFORMANCE

The operational and business performances of the Company have been appropriatelydescribed in the report on ‘Management Discussion and Analysis’ which form partof the Directors’ Report.

CHANGE IN THE NATURE OF BUSINESS IF ANY

During the financial year under review there was no change in the nature of businessof the Company.

DIVIDEND

Your Company is gratifying the shareholders by way Officonsecutive cash dividendsconsidering its consistent financial performance and promising future prospects whileretaining capital to support future growth. In view of the strong financial performance ofthe Company and in continuance of the earlier trend of dividends your Directors haverecommended a dividend of Re.0.25 (i.e. 25%) per equity share on equity shares of the facevalue of Re.1 each for the financial year ended March 31 2016 (Last Year: 20% i.e.Re.0.20 per equity share of face value of Re.1 each). The proposed dividend of 25% ifapproved by the members at the forthcoming Annual General Meeting will result in the outflow of Rs.642.02 lacs in addition to Rs.130.70 lacs by way dividend distribution tax. Thedividend distribution policy has been formulated by the Company which is available on thewebsite of the Company.

SHARE CAPITAL

The paid up equity share capital of the Company has increased to Rs.2568.08 lacsconsisting of 256807850 equity shares of Re.1 each from Rs.2566.61 lacs consisting of256660921 equity shares of Re.1 each post exercise of employee stock options duringthe FY 2015-16. During the year under review the Company issued 146929 equity shares ofRe.1 per equity share upon exercise of stock options under the Employees’ StockOption Scheme-2012 (ESOS-2012) of the Company.

The Company has neither issued shares with differential voting rights nor issued sweatequity shares.

TRANSFER TO RESERVES

During the year under review Genus Shareholders’ Trust (the ‘Trust’)has sold 20000000 equity shares of the Company and in line with the purpose of theTrust remitted the proceeds to the Company. The surplus arising on such distribution ofRs.10051.55 lacs and the amounts received towards dividend on shares of the Company heldby the Trust of Rs.95.00 lacs have been recognised directly in the General Reserve as suchamounts have arisen on shares of the Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Loans guarantees and investments made by the Company during the year which are coveredunder section 186 of the Companies Act 2013 form part of the financial statementsprovided in the Annual Report.

FIXED DEPOSITS

During the year under review your Company has not accepted any deposits within themeaning of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.

EMPLOYEES’ STOCK OPTION SCHEME

Your Company has introduced the Employees’ Stock Option Scheme-2012 (ESOS-2012)(‘ESOP Scheme’) to enable its employees to take part in the Company’sfuture growth and financial discipline. Your Company rewards its employees through StockOptions for participating in signi cant decision making and inspiring long-term commitmenttowards future growth of the Company. The ESOP Scheme also enabled the Company to hire andretain the best talent for its senior management and key positions.

The ESOP Scheme is administered by the Nomination and Remuneration Committee of theBoard of Directors of the Company in accordance with the applicable SEBIGuidelines/Regulations.

The applicable disclosures as stipulated under the SEBI Guidelines/Regulations as onMarch 31 2016 with regard to the ESOS-2012 are provided in ‘Annexure-A’ to thisReport.

The issue of equity shares pursuant to exercise of options does not affect theStatement of Profit and Loss of the Company as the exercise is made at the market priceprevailing as on the date of the grant plus taxes as applicable. Voting rights on theshares issued to employees under the ESOS are either exercised by them directly or throughtheir appointed proxy.

The Company has received a certi cate from the Auditors of the Company that the Schemehas been implemented in accordance with the SEBI Guidelines/Regulations and the resolutionpassed by the shareholders. The certi cate would be placed at the forthcoming AnnualGeneral Meeting for inspection by shareholders.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company and thedate of this Report.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

As on March 31 2016 the Company has no subsidiary company. During the year underreview no company has become or ceased to be an associate or subsidiary of the Company.

However the Board of Directors of the Company has approved the disinvestment throughtransfer by way of sale of shares of the joint venture namely Genus S.A. Brazil ordisinvestment through other legitimate procedures/ways involving write-off of theinvestment (or financial commitment) in ‘Genus SA’ Brazil from the books ofaccounts of the Company under automatic route/general permission of the Reserve Bank ofIndia as per Regulation 16 and Regulation 16(1A) of FEMA 120 amended/inserted in theForeign Exchange Management (Transfer or Issue of Any Foreign Security) (Amendment)Regulations 2004 vide the Foreign Exchange Management (Transfer or Issue of any ForeignSecurity) (Fourth Amendment) Regulations 2013 (Noti cation No.277/2013-RB dated May 082013).

As on March 31 2016 the Company has the following associates:

1. Greentech Mega Food Park Private Limited; and

2. M.K.J. Manufacturing Pvt. Ltd.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining performance & salient features of the financial statementsOfficompany’s subsidiaries/associate/joint venture companies in the prescribed FormAOC-1 is attached as ‘Annexure-A-1’ to this Report.

The Policy for determining material subsidiaries as approved may be accessed on theCompany’s website at the link “http://genuspower.com/pdf/Material%20Subsidiaries%20Policy_1.pdf”.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the Companies Act 2013 and Accounting Standard (AS) - 21 onConsolidated Financial Statements read with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the audited consolidated financial statement is providedin the Annual Report.

A statement containing the salient feature of the financial statements of each of thesubsidiary/associates/joint venture in the prescribed Form AOC-1 is attached as‘Annexure-A-1’ to this Report.

Pursuant to Section 136 of the Companies Act 2013 the financial statements of thesubsidiary/associates/joint venture companies are kept for inspection by the shareholdersat the Registered Office of the Company. The Company shall provide free Officost the copyof the financial statements of its subsidiary/associates/joint venture companies to theshareholders upon their request. The statements are also available on the website of theCompany 'www.genuspower.com'/ 'www.genus.in'. The consolidated net Profit of the Companyand its subsidiary/ associates/joint venture companies amounted to Rs.7850.50 lacs for thefinancial year under review.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered into by the Company during thefinancial year under review with related parties were in the ordinary course of businessand on an arm’s length basis. There were no materially signi cant related partytransactions made by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential con ict with interest of the Company atlarge. Since all related party transactions entered into by the Company were in theordinary course of business and on an arm’s length basis form AOC-2 is notapplicable to the Company.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board can be accessed on the Company’s website at thelink - “http://genuspower.com/pdf/Related%20Party%20Transaction%20Policy_0.pdf”. For further details please refer toNote 40 to the standalone financial statement which set out related party disclosures.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has establishedCorporate Social Responsibility (CSR) Committee. The CSR Committee has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) whichindicates the activities to be undertaken by the Company in line with the activities specied in Schedule VII of the Companies Act 2013. The Board has approved the CSR Policy. TheCSR Policy is uploaded on the Company’s website and the link is“http://genuspower.com/pdf/ CSR%20Policy_Genus.pdf”.

During the year under review the Company has spent Rs.116.98 lacs (which is more than2% of the average net Profits of last three financial years adjusted for merger anddemerger under the scheme of arrangement duly approved by Hon’ble High Court on29.10.2013 effective from the Appointed Date of April 01 2011) on CSR activities. Thestatutory disclosures with respect to the CSR Committee and an Annual Report on CSRactivities form part of this Report as ‘Annexure-B’.

RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL SYSTEMS

Your Directors have formed a Risk Management Committee. The Committee has reviewed andapproved a ‘Risk Management Policy’ which lays down procedures about the riskassessment and risk minimization. The details of the Committee Risk Management Policy andInternal Financial Control Systems are set out in the report on ‘ManagementDiscussion and Analysis’ and the ‘Report on Corporate Governance’ formingpart of this report.

INSURANCE

During the year under review the Company’s assets and projects were adequatelyinsured against various risks such as re earthquake storm tempest ood inundationriot strike malicious damage etc. Some of the key insurance policies taken by theCompany are as follows:

‘Consequential Loss (Fire) Policy’ to insure the Profit affected during theinterruption/cessation of the business operations due to exigency.

Group Gratuity Insurance Scheme under which a sum equal to gratuity payable in respectof the entire service (actual and future) is paid in the event of premature/unfortunatedeath of employee.

Group Mediclaim Policy for its permanent employees covering their spouse and dependentchildren.

‘Personal Accident Policy (Group)’ for insuring its employees and givingcoverage like disability cover permanent disability cover and death cover due toaccident.

CREDIT RATING

During the year under review India Ratings & Research Private Limited (Ind-Ra) hasupgraded the ratings of the Company as follow:-

Long-Term Issuer Rating : ‘IND A‘; Outlook ‘Stable’
INR 2280m fund-based Limits : ‘IND A/Stable’ and 'IND A1‘
INR 6530m non-fund based Limits : ‘IND A / Stable’ and 'IND A1’

The Outlook is Stable.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated under Regulation 34(2) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a detailed report on ‘Management Discussion andAnalysis’ is annexed herewith as ‘Annexure-C’.

CODE OFFICONDUCT

All board members and senior management personnel have af rmed compliance with the CodeOfficonduct of the board of directors and senior management of the Company on annualbasis pursuant to Regulation 26(3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Code Officonduct is also placed on Company’swebsite ‘www.genuspower.com’ / ‘www.genus.in’.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good corporate governance and isadhering to highest standards Officorporate governance. A detailed report on corporategovernance which forms part of this Report is set out as ‘Annexure-D’ togetherwith Certi cate of the Auditors of the Company regarding compliance with the provisionsOfficorporate Governance as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

WHISTLEBLOWER POLICY AND VIGILANCE MECHANISM

Your Company has established a Whistleblower Policy and Vigilance Mechanism for itsdirectors and employees to report genuine concern of unethical behaviour actual orsuspected fraud or violation of the Company’s code Officonduct. Appropriate actionsare taken against the Officer whose actions are found to violate the Code or any otherpolicy of the Company after giving him a reasonable opportunity of being heard. Thefunctioning of the vigil mechanism is reviewed by the Audit Committee from time to time.During the year under review no whistle blower was denied access to the Audit Committee.The Whistleblower Policy and Vigilance Mechanism can be accessed on the Company’swebsite at the link “http://genuspower.com/pdf/Whistle%20Blower%20Policy%20and%20Vigil%20Mechanism_0.pdf”.

PREVENTION OF INSIDER TRADING

Based on the requirements under the SEBI (Prohibition of Insider Trading) Regulations2015 and to prevent Insiders from procuring communicating providing or allowing accessto unpublished price sensitive information unless required for discharge of duties thecode Officonduct for regulating monitoring and reporting of trading by insiders(“the Code”) has been adopted by the Board of Directors of the

Company with effect from May 15 2015. The objective of this Code is to protect theinterest of bona de investors at large.

The Code prohibits the insider to trade in securities when in possession ofunpublished price sensitive information and during the period when the Trading Window isclosed. However an insider is entitled to formulate a trading plan for dealing insecurities of the Company in line with the provisions of the SEBI (Prohibition of InsiderTrading) Regulations 2015 and present it to the Compliance Officer for approval andpublic disclosure pursuant to which trades may be carried out on his behalf in accordancewith such plan and the applicable SEBI Regulations.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2016 forms part of thisreport as ‘Annexure-E’.

DIRECTORS

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Rajendra Kumar Agarwal and Mr. Jitendra Kumar AgarwalDirectors of the Company retire by rotation at the ensuing Annual General Meeting andthey being eligible have offered themselves for re-appointment.

Mr. Satya Narayan Vijayvergiya who was appointed as an Executive Director of theCompany with effect from November 14 2014 resigned with effect from December 03 2015and Mr. Naveen Gupta who was appointed as an Independent Director of the Company witheffect from April 01 2014 resigned with effect from February 03 2016. The Board ofDirectors of your Company places on record their deep appreciation to Mr. Satya NarayanVijayvergiya and Mr. Naveen Gupta and wishes them a good career in their futureendeavours. The members at its Meeting held on September 26 2015 appointed Smt. SharmilaAgarwal Additional Director of the Company as Woman Director of the Company.

Further the Board has approved the re-appointment of Shri Rajendra Kumar Agarwal asManaging Director (MD) and Chief Executive Officer (CEO) of the Company for a period ofthree years with effect from May 29 2016 on remuneration and such other terms andconditions mentioned in the notice of Annual General Meeting subject to consent ofshareholders in general meeting.

The Company has received the declarations from all Independent Directors of the Companycon rming that they meet the criteria of independence as prescribed under section 149(6)of the Companies Act 2013.

Familiarization programmes

During the financial year your Company had conducted various sessions to familiarizeIndependent Directors with the Company their roles rights & responsibilities in theCompany nature of industry business model risk management system and technology adoptedin the Company. Further the Directors are encouraged to attend the training programmesbeing organized by various regulators/bodies/ institutions on above matters. The detailsof such familiarization programmes are uploaded on the website of the Company at the link:

“http://genuspower.com/pdf/Familarisation%20Programme. pdf”; and

“http://genuspower.com/pdf/Details%20of%20Familiarisation%20Programmes_.pdf”.

Policy on directors’ appointment and remuneration and other details

In terms of the provisions of Section 134(3)(e) read with sub-section (1) of section178 of the Companies Act 2013 the following policies/documents of the Company relatingto directors’ appointment and remuneration are annexed herewith:

(a) Policy for selection of Directors and determining Directors independence (Criteriafor Board Membership) (as ‘Annexure-F’).

(b) Remuneration Policy for Directors Key Managerial Personnel and other employees (as‘Annexure-G’).

For further details relating to directors please refer to the report on CorporateGovernance which forms part of this Report.

BOARD EVALUATION

The Board of Directors of the Company is the core of the corporate governancepractices. The Board is ultimately responsible for ensuring compliance of variousapplicable laws in the best interests of stakeholders. Board behavior and effectivenessare of the utmost importance for the overall growth of a Company and also to protect thelong term interests of all its stakeholders. The investors repose con dence on the Boardof Directors as their representatives for conducting and monitoring the affairs of thecompany. Hence the regular Board evaluations is the core driver to achieve businesstargets while implementing the best corporate governance practices in the Company.

The Nomination and Remuneration Committee of the Board of Directors of the Company hadlaid down criteria for performance evaluation of Directors Chairperson Board LevelCommittees and Board as a whole and also the evaluation process for the same. Genus’sBoard evaluation process comprise of both assessment and review. This includes analysis ofhow the Board and its Committees are functioning the time spent by the Board consideringmatters and whether the terms of reference of the Board’s committees have been metbesides compliance of the applicable laws.

Pursuant to the provisions of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the Companies Act 2013 the Board has carried out aformal annual evaluation of its flown performance the working of its Committees andindividual Directors (without participation of the relevant Director). The Nomination andRemuneration Committee also reviewed the performance of the individual directors (withoutparticipation of the relevant Director). In a separate meeting of independent Directorsperformance of non-independent directors performance of the board as a whole andperformance of the Chairman were evaluated.

Board Evaluation Process

Each director was given a copy of the form for assessing the overall performance ofBoard / Committees / Directors / Chairperson as the case may be suf ciently in advance.The forms which included a set of questions contained a rating mechanism or subjectivequestions which were analysed by the Nomination & Remuneration Committee. TheNomination & Remuneration Committee compiled the feedback and comments in theevaluation forms and appropriately reviewed the same. Thereafter the consolidated feedbackand comments along with its recommendation placed before the Board. After the completionof evaluation directors were encouraged to formally recognize the results and enablefollow-up activities. Follow up included developing a plan of action for addressing pointsthat arise from the discussion and assigning follow-up responsibilities.

KEY MANAGERIAL PERSONNEL

Mr. Rajendra Kumar Agarwal Managing Director & Chief Executive Officer (MD &CEO) Mr. Jitendra Kumar Agarwal Joint Managing Director (JMD) Mr. Rakesh Kumar AgarwalChief Financial Officer (CFO) and Mr. Ankit Jhanjhari Company Secretary (CS) of theCompany are the Key Managerial Personnel as per the provisions of the Companies Act 2013.

MEETINGS OF THE BOARD

During the year under review six meetings of the Board of Directors were held. Forfurther details please refer to the report on Corporate Governance which forms part ofthis Report.

COMMITTEES OF THE BOARD

The Company has the following Committees of the Board: (a) Audit Committee (b)Nomination and Remuneration Committee (c) Stakeholders’ Relationship Committee (d)Risk Management Committee (e) Corporate Social Responsibility Committee (f) FinanceCommittee (g) Sales Committee

During the year under review the Board dissolved the Restructuring Committee as theCommittee accomplished its task.

The details with respect to the compositions powers roles terms of reference etc.of the above committees are given in the report on Corporate Governance which forms partof this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 (the “Act”) yourDirectors con rm that:

(a) in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of the Profit ofthe Company for the year ended on that date;

(c) the Directors have taken proper and suf cient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a ‘going concern’basis;

(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

AUDITORS AND AUDITORS’ REPORT

Statutory Auditors

M/s. S. R. Batliboi & Associates LLP Chartered Accountants and M/s. D. Khanna& Associates Chartered Accountants were appointed as statutory auditors of theCompany at the annual general meeting held on September 29 2014 for a term of veconsecutive years. As per the provisions of Section 139 of the Companies Act 2013 theappointment of auditors is required to be rati ed by members at every annual generalmeeting. Accordingly the appointment of M/s. S. R. Batliboi & Associates LLPChartered Accountants and M/s. D. Khanna & Associates Chartered Accountants asStatutory Auditors of the Company is placed for rati cation by the shareholders of theCompany. The Company has received a letter from each of them to the effect that if theirappointment is rati ed it would be in accordance with the provisions of Section 141 ofthe Companies Act 2013.

The auditors’ report does not contain any quali cation reservation or adverseremark.

Cost Auditors

The Board of Directors had appointed M/s. K. G. Goyal & Associates CostAccountants as the Cost Auditors for conducting cost audit Officost records of theCompany for the financial year 2015-2016.

Secretarial Auditor and Secretarial Audit Report

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 secretarial audit ofthe Company for the financial year ended March 31 2016 has been carried out by M/s. C. M.Bindal & Company Company Secretaries & Corporate Consultant and its report isannexed herewith as ‘Annexure-H’. The report of secretarial auditors does notcontain any quali cation reservation or adverse remark.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed in terms of Section 134(3)(m) ofthe Companies Act 2013 read with rule (8)(3) of the Companies (Accounts) Rules 2014are provided in ‘Annexure-I’ to this Report.

PARTICULARS OF EMPLOYEES AND OTHER RELATED DISCLOSURES

Information as required under the provisions of Section 197 of the Companies Act 2013read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company will be provided upon request. Interms of the provisions of the rst proviso to Section 136(1) of the Companies Act 2013the Annual Report excluding the aforesaid information is being sent to the Shareholdersand others entitled thereto. The said information is available for inspection by theShareholders at the Registered Office of the Company during business hours on working daysof the Company up to the date of ensuing Annual General Meeting.

BUSINESS RESPONSIBILITY REPORT

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 read with SEBI Noti cation dated December 22 2015 the BusinessResponsibility Report describing the initiatives taken by the Company from environmentalsocial and governance perspective is attached as ‘Annexure-J’ to this Report.

OTHER DISCLOSURES

Your Directors state that during the year under review:

(a) no signi cant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

(b) there were no cases led pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

The Company has in place a de ned policy in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013.Your Company has also set up an internal committee (which includes a woman member also) tomonitor the behavior of all employees at work place and to redress complaints receivedregarding sexual harassment.

(c) Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiary/associate/joint venture.

ACKNOWLEDGEMENTS

The Board places on record their deep sense of appreciation to all the staff for theirunrelenting dedication and working spirit. The Board also immensely thanks all theshareholders vendors service providers bankers and all other stakeholders for theircontinued support to the Company during the year under review. Your Directors would liketo make a special mention of the support extended by the Government of India StateGovernments and its agencies Tax Authorities Reserve Bank of India MinistryOfficorporate Affairs Ministry of Power Ministry of Finance Customs and ExciseDepartments State Electricity Boards SEBI BSE NSE Depositories and other connectedauthorities/ departments and look forward to their continued support in all futureendeavors.

For and on behalf of the Board of Directors

Ishwar Chand Agarwal

Chairman

DIN: 00011152

Jaipur July 29 2016