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Golden Capital Services Ltd.

BSE: 539853 Sector: Financials
NSE: N.A. ISIN Code: INE135D01010
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VOLUME 1000
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P/E 151.32
Mkt Cap.(Rs cr) 9
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Sell Price 28.75
Sell Qty 120.00
OPEN 28.80
CLOSE 29.00
VOLUME 1000
52-Week high 45.00
52-Week low 26.20
P/E 151.32
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 28.75
Sell Qty 120.00

Golden Capital Services Ltd. (GOLDENCAPITAL) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the 21st Annual Report of the Company togetherwith the Audited Financial Statements for the year ended March 31 2016.

Financial summary

Your Company’s nancial performance for the year ended March 31 2016 is summarisedbelow:

(Rs. in Lakhs)

Particulars Standalone Consolidated
2015-16 2014-15 2015-16 2014-15
Gross turnover 151343 123336 254857 243515
Pro t before interest tax & depreciation (EBITDA) 20607 14926 22465 20947
Net pro t before tax 17853 13601 16172 16710
Provision for tax (6110) (4560) (6890) (5664)
Net pro t after tax 11743 9041 9282 11046
Proposed dividend on equity shares (2180) (2176) (2180) (2176)
Tax on proposed dividend (456) (443) (456) (443)
Retained pro t carried forward to the following year 46008 36901 49730 43302

Business environment

The global business environment during the year was subdued and witnessed slow growthacross geographies. The oil price crisis in Middle East dominated throughout the year andhad its effects spread across the world. The currency devaluation by China and theslowdown in this region witnessed tremendous volatility in the major currencies andcommodities. Despite the global turmoil Indian economy remained fairly stable but thegrowth momentum which was expected during the year did not happen on the back of slowdecision making and lead up to various state elections held in May 2016.

Forecasting these developments to an extent your Company had proactively spread itswings in the international emerging geographies where better visibility was seen in termsof new projects in the water treatment space. The focused approach of the businessdevelopment and sales team helped your company in garnering good order intake in MalaysiaBahrain Sri Lanka Nigeria and Saudi Arabia. Towards the end of the year your companyalso bagged a big ticket tertiary treatment order in Chennai India. The strategy ofdiversifying into targeted geographies for newer opportunities helped the Company secureits biggest ever order intake in a single nancial year and thereby helped in navigatingyour Company safely amidst tough macro-economic conditions.

State of affairs

In the nancial year 2015-16 your Company continued its growth momentum on keyparameters. During the year your company recorded order intake of Rs. 5140 Crore whichhelped your Company to close the year with a strong order book of Rs. 7308 Crore as onMarch 31 2016. Your Company’s consolidated turnover stood at Rs. 2549 Crorecompared to previous year’s turnover of Rs. 2435 Crore recording a growth of 5%. Thestandalone turnover stood at Rs. 1513 Crore an increase of 23% compared to previousyear’s turnover of Rs. 1233 Crore. The consolidated EBITDA increased to Rs. 225Crore in FY 2015-16 as against Rs. 209 Crore in the previous year registering a growth of8% over previous year. On a standalone basis the EBITDA stood at Rs. 206 Crore in FY2015-16 as against the previous year’s EBITDA of Rs. 149 Crore. The consolidated PATstood at Rs. 92 Crore as against Rs. 110 Crore in the previous year. The increase inworking capital due to the liquidity stress in the market impacted the Company’sbottom-line adversely. The consolidated EPS was at Rs. 16.95 for the year ended March 312016 as against Rs. 20.39 in the previous year.

Dividend

Your directors are pleased to recommend a nal dividend of Rs. 4/- per equity share onthe face value of Rs. 2/- per equity share for the nancial year ended March 31 2016amounting to Rs. 26.36 Crore (inclusive of tax Rs. 4.56 Crore). The dividend payoutis subject to approval of members at the ensuing Annual General Meeting (AGM).

The dividend will be paid to members whose names appear in the Register of members ason July 15 2016 in respect of shares held in dematerialised form it will be paid tomembers whose names are furnished by National Securities Depository Limited and CentralDepository Services (India) Limited as bene cial owners as on that date.

Management’s discussion and analysis

In terms of the provisions of Regulation 34 of the SEBI Listing Obligations AndDisclosures Requirements Regulation SEBI LODR) 2015 the Management’s discussion andanalysis is set out in this Annual Report.

Key projects updates

PETRONAS RAPID ETP PROJECT Malaysia

During the year Malaysia’s National Oil and Gas company Petroliam NasionalBerhad (PETRONAS) through its subsidiary under the PETRONAS Group PRPC Utilities andFacilities Sdn. Bhd. (PRPC UF) signed a contract with VA Tech Wabag Limited and MuhibbahEngineering (M) Bhd for the ReFEED and Engineering Procurement Construction andCommissioning of the Effluent Treatment Plant (ETP) for PETRONAS’ Re nery andPetrochemicals Integrated Development (RAPID) Project in Pengerang Johor. The project isbeing executed by Wabag-Muhibbah JV Sdn. Bhd. a JV company incorporated in Malaysia. Thecontract’s scope covers RAPID Complex’seffluent and waste water treatment tobelow the regulatory discharge limits with a state-of-the-art water treatment system. Theproject is progressing as per schedule. The ReFEED Engineering approval has been obtainedwhile the detailed engineering procurement and construction activities are progressing asplanned.

AMAS STP PROJECT Bahrain

The year 2015-16 saw your Company winning a large EPC order from the Kingdom ofBahrain to Design and Build a Sewage Treatment Plant (STP) for Al Madina Al Shamaliya(AMAS) the new town being developed in Bahrain. The project is funded by Abu Dhabi Fundfor Development (ADFD). WABAG is partnering with Belhasa Projects LLC UAE for executingthis project. AMAS is a mixed used new town on reclaimed land off the north coast of theKingdom of Bahrain. With a total land area of approximately 750ha over 13 islands AMASshall be developed for Housing Recreational and Business activities purpose which willprovide approximately 15000 dwelling units. The STP plant with tertiary treatment willcater to the entire irrigation water requirements of all the 13 islands. The client hasapproved the basic engineering; the civil work has commenced and the detailed engineeringand procurement is at an advanced stage.

DANGOTE RWTP PROJECT Nigeria

WABAG is designing and building a Raw Water Treatment plant for Dangote Fertilizer Ltda Company forming part of the Dangote Group one of Africa’s most diversi ed businessgroups. The green eld integrated fertiliser and re nery complex will be located nearLagos Nigeria’s largest city and will be the largest of its kind in Africa. 60 MLDof raw water from the lagoon will be processed using a combination of ultraltration/reverse osmosis. The scope of the contract includes design engineering andsupply of raw water treatment plant as well as supervision of installation andcommissioning. The project is progressing well and reached the nal stages of engineeringcompletion.

AL GHUBRAH DESALINATION PROJECT Oman

During the year the 191 MLD Al Ghubrah Desalination Project was completed and handedover to the client. The project was executed by International Water Treatment LLC (IWT) aSPV incorporated in Muscat Oman with the Company holding 32.5% stake and the other jointventure partners of the SPV being Cadagua SA Spain (37.5%) and Galfar Engineering &Contracting SAOG Oman (30%). The plant has an innovative design that provides it with acompact footprint and employs technology that includes a two-pass reverse osmosis systemwith pre-treatment using dissolved air flotation (DAF) and dual media lters. The Projectsuffered a time over-run which led to delay in the overall commissioning of the plant thathas eroded the expected margins on the Project. As per terms of the contract the SPV isliable to pay liquidated damages (LD) to the client. The Company’s share of theliquidated damages would amount to 32.5% of the overall liquidated damages that could belevied. The SPV has initiated arbitration proceedings with the client on the extent ofliquidated damages and the matter is sub judice. Although the Project suffered losses thestate-of-the-art Plant is a good reference for the Company which will enable it to winlarge projects in Desalination space.

APGENCO KAKATIYA and RAYALASEEMA THERMAL POWER PROJECT India

Andhra Pradesh Power Gen. Co. Ltd. had placed orders for two 600 MW Thermal PowerPlants – one at Warangal and another at Cuddapah. The orders were placed on aconsortium in which WABAG was joint partner along with two more contractors.

WABAG was initially responsible for Water Systems Package. Due to nancial issues on thepart of the Consortium leader WABAG had to take lead of the consortium from mid-2014 andtook over the overall responsibility of completing the entire balance of plant for the 600MW Power plant. For the rst time WABAG ventured into the construction of the full Balanceof Plant package.

The rst of the 600 MW Kakatiya Thermal Power projects was completed successfully andthe Plant was inaugurated by the Chief Minister of Telengana in the Month of January 2016.The other 600 MW Rayalaseema Thermal Power plant is under construction and the plant is inprogress as per schedule for completion.

Corporate governance

Your Company is committed to maintain the highest standards of corporate governance. Webelieve sound corporate governance is critical to enhance and retain investor trust. Ourdisclosures seek to attain the best practices in corporate governance as prevalentglobally. We have implemented several best corporate governance practices in the Companyto enhance long-term shareholder value and respect minority rights in all our businessdecisions. Our corporate governance report for FY 2015-16 forms part of this AnnualReport. The requisite certi cate from the auditors of the Company con rming compliancewith the conditions of corporate governance as stipulated under SEBI LODR is annexed tothe corporate governance report.

Directors & Key managerial personnel

Rajiv Mittal was appointed as the Managing Director & Group CEO for a period of 5years the members at the 20th AGM held on July 27 2015. The members at the said AGM alsoappointed S Varadarajan as a Director of the Company liable to retire by rotation andMalay Mukherjee as an Independent Director for a period of 3 consecutive years for a termup to the conclusion of the 23rd AGM of the Company in the calendar year 2018. We thankthe members for their support in con rming the above- mentioned appointments.

The board on the recommendation of the Nomination and Remuneration Committeeappointed Parthasarathy Gopalan as the Chief Financial Officer (CFO) effective November 72015 in place of S Varadarajan who relinquished his post as the CFO of the Company. Theboard places on record its appreciation for the services rendered by S Varadarajan duringhis tenure as CFO with the Company. Further based on the recommendation of the Nominationand Remuneration Committee S Varadarajan was designated as the Director & ChiefGrowthOfficerof the Company effective November 7 2015.

As per the provisions of the Companies Act 2013 S Varadarajan retires by rotation atthe ensuing annual general meeting and being eligible seeks re-appointment. A brief prole of S Varadarajan is given in the notice dated May 26 2016 convening the AGM of theCompany. The board recommends his re-appointment.

Declaration by independent directors

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI LODR.

Board diversity

The Company recognises the importance of a diverse board for its success and believesthat a diverse board will leverage inter alia differences in thought knowledge skillsregional and industry experience cultural and geographical background which in the longrun will enhance shareholder value. The Nomination and Remuneration Committee sets out theapproach to diversity of the board of directors.

Board evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 19 of SEBI LODRthe board has carried out the annual performance evaluation of its ownOctober12015by performance the directors individually as well as the evaluationof the working of its Audit Nomination and Remuneration Stakeholders RelationshipCorporate Social Responsibility Monitoring & Overseas Investment Committee. Astructured questionnaire was prepared after taking into consideration inputs received fromthe directors covering various aspects of the board’s functioning such as adequacyof the composition of the board and its Committees Board culture execution andperformance of speci c duties obligations and governance.

A separate exercise was carried out to evaluate the performance of individual directorsincluding the Chairman of the board who were evaluated on parameters such asparticipation and contribution by a director commitment including guidance provided tothe senior management outside of board / committee meetings effective deployment ofknowledge and expertise effective management of relationship with various stakeholdersindependence of behavior and judgment etc. The performance evaluation of the IndependentDirectors was carried out by the entire board. The performance evaluation of the Chairmanand Managing Director were carried out by the Independent Directors. The board alsoreviewed the performance of the Chief Financial Offi cer Company Secretary and othersenior managerial personnel. The evaluation process has been explained in the corporategovernance report. The board approved the evaluation results as collated by the Nominationand Remuneration Committee.

Policy on directors appointment and remuneration

The Company’s current policy is to have an appropriate mix of Executive andIndependent Directors to maintain the independence of the board and separate its functionsof governance and management. As on March 31 2016 the board consists of 7 Directorsmajority of them being independent directors. Besides the Chairman who is an independentdirector the board comprises the managing director and an executive director both beingpromoters and 4 independent directors. The board periodically evaluates the need forchange in its composition and size.

The policy of the Company on director’s appointment and remuneration includingcriteria for determining quali cations positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 are formulated by the Nomination and Remuneration Committee and is outlined in theNomination Evaluation & Remuneration policy of the Company.

Number of meetings of the board

The board met four times during the nancial year the details of which are given in thecorporate governance report. The maximum interval between any two meetings did not exceed120 days as prescribed in the Companies Act 2013.

Committees of the board

Currently the board has six Committees: the Audit Committee the Nomination andRemuneration Committee the Corporate Social Responsibility Committee the StakeholdersRelationship Committee the Monitoring Committee and the Overseas Investment Committee. Asrequired under section 177 (8) of the Companies Act 2013 the composition of the AuditCommittee is disclosed as under:

B D Narang Chairman of the Committee Jaithirth Rao Malay Mukherjee and SumitChandwani.

A detailed note on the composition of the board and other committees is provided in thecorporate governance report section of this annual report.

Induction & training of board members

On appointment the concerned director is issued a letter of appointment setting out indetail the terms of appointment duties responsibilities and expected time commitments.Each newly appointed/ designated independent director is taken through a formal inductionprogram including the presentation from the managing director & group CEO on theCompany’s operations marketing nance and other important functions. The companysecretary briefs the director about their legal and regulatory responsibilities as adirector. The induction for independent directors include interactive sessions withexecutive committee members business and functional heads visit to the plant site etc.The above initiatives help the director to understand the Company its business and theregulatory framework in which the Company operates and equips him/ her to effectively fulll his role as a director of the Company.

Periodic presentations are also made at the board and committee meetings on businessand performance updates of the Company global business environment business strategy andrisks involved.

Director’s responsibility statement

Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 yourdirectors con rm that:

• in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;

• they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the nancial year and of the prot and loss of the Company for that period;

• they have taken proper and the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; they have prepared the annualaccounts on a going concern basis;

• they have laid down internal nancial controls which were adequate and areoperating effectively; and

• they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.

Remuneration policy

The Company’s remuneration policy is driven by the success and performance of theindividual employee and the Company. Through its compensation programme your Companyendeavors to attract retain develop and motivate a high performance workforce. TheCompany follows a compensation mix of xed pay bene ts and performance based variable pay.Individual performance pay is determined by business performance and the performance ofthe individuals are measured through quarterly & annual appraisal process.

The primary objective of the remuneration policy is to formulate the criteria fordetermining quali cations competencies positive attributes and independence for theappointment of a director and recommend to the board policies relating to the remunerationof the directors KMPs and other employees. This includes reviewing and approvingcorporate goals and objectives relevant to the compensation of the executive directorsevaluating executive directors’ performance in the light of those goals andobjectives and either as a committee or together with the other independent directors (asdirected by the board) determine and approve the executive directors’ compensationlevel based on this evaluation and making recommendations to the board with respect to keymanagerial personnel’s (KMPs) compensation performance incentives and equity basedplans that are subject to the board’s approval.

The purpose of the policy is also to assess the effectiveness of the board as a wholecommittees of the board and individual directors on regular basis through the Nominationand Remuneration Committee of the board. The policy also addresses board diversity andoutlines remuneration principles for directors KMP’s and other employees based onvarious evaluation criteria determined by the Nomination and Remunerationcare towardsCommittee including measuring their performance and achievement against the Company’sgoals.

Employees’ stock option scheme

Nomination and Remuneration Committee of the Board of directors of the Company interalia administers and monitors the Company’s employees’ stock option scheme (ESOPScheme) in accordance with the applicable SEBI Regulations. During the year ended March31 2016 a total of 211911 shares were allotted to eligible employees under theCompany’s prevailing ESOP scheme. During the year ended March 31 2016 there has beenno material change in the Company’s existing ESOS and the scheme is in compliancewith the applicable Regulations. The details of the scheme as required under SEBIRegulations is available on the Company’s website www. wabag.com.

The applicable disclosures as stipulated under the SEBI Regulations as on March 312016 is enclosed herewith as Annexure I to the Board’s report. TheCompany has received a certi cate from the statutory auditors that the scheme has beenimplemented in accordance with the SEBI Regulations and the resolutions passed by theshareholders. The certi cate would be placed at the AGM for inspection by the members.

Particulars of employees

The ratio of remuneration of each director to the median of employees’remuneration as per Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and astatement containing the names of every employee employed throughout the nancial year andin receipt of remuneration of Rs. 60 Lakhs or more or employed for part of the year andin receipt of Rs. 5 Lakhs or more a month under Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is enclosed herewith as AnnexureII to the Board’s report.

Equal opportunity

The Company has always provided a congenial atmosphere for work to all employees thatis free from discrimination of any kind. It has provided equal opportunities of employmentto all without regard to the nationality religion caste color language marital statusand sex. The Company has also framed a policy on ‘Prevention of SexualHarassment’ (POSH) at the workplace. We follow a gender-neutral approach in handlingcomplaints of sexual harassment and we are compliant with the law of the land wherever weoperate. We have also constituted an Internal Complaints Committee to consider and addresssexual harassment complaints. The details of issues raised and resolved regarding sexualharassment of women at the workplace is available in the human resources section whichforms part of this annual report.

Auditors

Statutory auditors

At the AGM held on July 27 2015 Walker Chandiok & Co. LLP Chartered Accountantswere appointed as statutory auditors of the Company to hold office till the conclusion ofAGM to be held in the calendar year 2018. In terms of the rst proviso to Section 139 ofthe Companies Act 2013 the appointment of the auditors shall be placed for rati cationat every AGM. Accordingly the appointment of Walker Chandiok & Co. LLP CharteredAccountants as statutory auditors of the Company is placed for rati cation by theshareholders.

The auditors’ report for FY 2015-16 does not contain any quali cation reservationor adverse remark. The auditors’ report is enclosed with the nancial statements inthis annual report.

Cost auditor

Section 148 of the Companies Act 2013 pertaining to audit of cost records isapplicable to the Company. Based on the recommendation of the Audit Committee the boardhas appointed S Chandrasekaran Practicing Cost Accountant (Membership No.4784) to auditthe cost accounts of the Company for the nancial year ended March 31 2016 and endingMarch 31 2017 on a remuneration of Rs. 5 Lakhs per year. As per the provisions of Section148 of the Companies Act 2013 the remuneration payable to the cost auditor is requiredto be rati ed by the members. Accordingly the remuneration payable to S ChandrasekaranPracticing Cost Accountant cost auditors of the Company is placed for rati cation by theshareholders.

Secretarial auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rulesthereunder M.Damodaran (Membership No. 5837) of M.Damodaran & Associates PracticingCompany Secretaries was appointed to conduct the secretarial audit of the Company for theFY 2015-16. The secretarial audit Report for FY 2015-16 is enclosed herewith as AnnexureIII to the Board’s report. The secretarial audit Report does not contain anyquali cation reservation or adverse remark.

The board has appointed M. Damodaran of M. Damodaran & Associates PracticingCompany Secretaries as secretarial auditor of the Company for the FY 2016-17.

ODI in Subsidiaries joint ventures and associate companies

WABAG over the years has expanded its global reach through Overseas Direct Investments(ODI) either through subsidiaries joint venture or associate companies. As of March2016 the aggregate nancial investments in such ODIs amount to Rs. 1192.20 Crore. Out ofsuch overseas investments a very substantial component of investment comprises ofguarantees or non-funded exposure for various projects which as of March 2016 amounted toRs. 1149.18 Crore (96.40% of total nancial exposure). The funded exposure of the Companyin ODI for the same period consists of equity Rs. 29.50 Crore (2.47% of total nancialexposure) and loans Rs. 13.52 Crore (1.13% of total nancial exposure).

The Company has immensely bene ted from these ODI as its standalone revenue fromoverseas operations as of March 2016 amounted to Rs. 538 Crore while consolidatedoverseas revenue less inter-segment revenue amounted to Rs. 1039 Crore out of itsconsolidated revenue of Rs. 2542 Crore. In all during the nancial year 2015-16 theaggregate revenue from ODI is Rs.1577 Crore (i.e. Rs. 538 crore + Rs. 1039 crore) whichaccounted for about 62 % of the consolidated revenue of Rs. 2542 crore considering itsrelative meager nancial exposure to ODI as stated above.

The consolidated nancial statements of the Company and all its subsidiaries which formpart of the annual report have been prepared in accordance with Section 129(3) of theCompanies Act 2013 and regulation 33 of SEBI LODR. Further a statement containing thesalient features of the nancial statement of our subsidiaries joint ventures andassociates in the prescribed format AOC-1 is enclosed herewith as Annexure IV to theBoard’s report. The statement also provides the details of performance andnancial position of each of the subsidiaries joint ventures and associates.

During the year WABAG MUHIBBAH JV SDN BHD was incorporated in MALAYSIA as asubsidiary to carry out the RAPID Project. WABAG BELHASA JV WLL was incorporated inBAHRAIN as a subsidiary to carry out AMAS Project. VA TECH WABAG EGYPT LIMITED EGYPTceases to be a step down subsidiary of the Company since the Company was liquidated in themonth of February 2016. Your Company had 21 subsidiaries as on March 31 2016. BEIJING VATECH WABAG WATER TREATMENT TECHNOLOGY CO. LTD ceases to be a step down subsidiary of theCompany since the Company was liquidated in the month of April 2016. There has been nochange in the nature of business of the subsidiaries during the year. During the year theboard of directors reviewed the affairs of the subsidiary Companies. Details of majorsubsidiaries of the Company and their business operations during the year under review arecovered in the management’s discussion and analysis report.

In accordance with Section 136 of the Companies Act 2013 the audited nancialstatements including the consolidated nancial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on ourCompany’s website www.wabag.com.These documents will also be available forinspection during business hours at our registeredoffi ce in Chennai India.

Corporate social responsibility

As per the provisions of the Companies Act 2013 all Companies having a net worth ofRs. 500 Crore or more or turnover of Rs. 1000 Crore or more or a net pro t of Rs. 5Crore or more during any nancial year are required to constitute a Corporate SocialResponsibility (CSR) Committee of the board of directors comprising three or moredirectors atleast one of whom should be an independent director. All such Companies arerequired to spend atleast 2% of the average net pro ts of their three immediatelypreceding nancial years on CSR-related activities. Accordingly the Company was requiredto spend Rs. 2.50 Crore towards CSR activities during the year. The Company spent Rs.96.54 Lakhs during the FY 2015-16 towards various CSR initiatives. Further a capitalcommitment of Rs. 97 Lakhs was made in the month of March 2016 towards CSR programimplementation on watershed development in partnership with NABARD. The implementingagency is National Agro Foundation founded by late C Subramanian. Since the roll out ofCSR program effective April 2014 the Company has been making a slow and steady progress.The CSR Committee has laid emphasis on outcome & impact than merely on expenditurebeing met during the year. Secondly the Committee took extra time & caution inselecting the right NGO’s as well as focused on projects in our area of expertisethat is water and waste water.

During FY 2015-16 we completed three projects – (1) Augmentation of waterresources; (2) Sewage treatment plant for Cancer Institute Adyar Chennai and (3)Drinking water ltration solution and sanitation for the Govt. High School KodungaiyurChennai. One of the project identi ed i.e. Capacity Building for wetlands management couldnot be completed on account of apprehension by the intended participants and largely dueto Chennai floods. This project is being implemented by an external agency Care EarthTrust which has sought extension of time till September 2016.

Your Company’s CSR Committee comprises Revathi Kasturi (Chairperson) Rajiv Mittaland S Varadarajan. The Committee is responsible for formulating and monitoring the CSRpolicy of the Company.

The annual report on our CSR activities is enclosed herewith as Annexure V to theBoard’s report.

Deposits

Your Company has not accepted any deposit and as such no amount of principal andinterest were outstanding as of the Balance Sheet date.

Particulars of loans guarantees or investments

Details of loans guarantees and investments covered under the provisions of section186 of the Companies Act 2013 form part of the notes to the nancial statements.

Internal financial control and its adequacy

The board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company’s policies safeguardingof its assets prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and timely preparation of reliable nancialdisclosures.

Risk management policy

Details on the Company’s risk management framework risk identi cation riskevaluation mitigation measures and monitoring mechanism forms part of themanagement’s discussion and analysis section of this annual report.

Particulars of contracts or arrangements made with related parties

Particulars of contracts or arrangements with related parties referred to in Section188 (1) of the Companies Act 2013 in the prescribed Form AOC 2 is enclosed herewith as

Annexure VI to the Board’s report.

Significant and material orders

There are no signi cant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company’s operations in future.

Extract of annual return

In accordance with section 134(3) (a) of the Companies Act 2013 an extract of theannual return in the prescribed format is enclosed herewith as Annexure VII to theBoard’s report.

Conservation of energy technology absorption foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3) (m) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 is enclosed herewith as Annexure VIII tothe Board’s report.

Sustainability initiatives

Your Company is in the space of providing solutions in the realm of water and wastewater treatment. Sustainability runs through the Company in all its operations andfunctions. Your Company continuously focuses on solutions which have low carbon footprintand that are sustainable. Globally your Company is actively involved in providingsolutions that are eco-friendly and renewable in nature. Your Company’s contributiontowards sustainability is continuous in nature as is reflected throughout this report andforms an integral part of our business.

Acknowledgments

We place on record our appreciation for the committed services from every member of theWABAG family globally. We thank our customers vendors investors banks various nancialinstitutions government/regulatory authorities and members for their continued assistanceand cooperation received during the year.

For and on behalf of the Board of Directors
Bucharest Romania B D Narang Rajiv Mittal
May 26 2016 Chairman Managing Director
& Group CEO