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Shriram EPC Ltd.

BSE: 532945 Sector: Engineering
NSE: SHRIRAMEPC ISIN Code: INE964H01014
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VOLUME 17413
52-Week high 35.95
52-Week low 17.20
P/E
Mkt Cap.(Rs cr) 1,899
Buy Price 19.55
Buy Qty 3.00
Sell Price 0.00
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OPEN 19.75
CLOSE 20.00
VOLUME 17413
52-Week high 35.95
52-Week low 17.20
P/E
Mkt Cap.(Rs cr) 1,899
Buy Price 19.55
Buy Qty 3.00
Sell Price 0.00
Sell Qty 0.00

Shriram EPC Ltd. (SHRIRAMEPC) - Director Report

Company director report

Dear Shareholder

Your Directors present the Seventeenth Annual Report together with the AuditedFinancial Statements of your Company for the financial year ended 31 st March 2017.

FINANCIAL RESULTS

(Rs. in Lakhs)

Consolidated Consolidated Standalone Standalone
(12 months) (12 months) (12 months) (12 months)
2016-17 2015-16 2016-17 2015-16
Total Income 74422.23 54759.98 51968.59 54759.98
Profit before Interest Depreciation tax and extra-ordinary items 2207.72 2173.77 1888.77 13484.34
Interest & depreciation 25266.16 27823.42 25261.96 27823.42
Profit before tax & before extra-ordinary items -21418.79 -13697.08 -22766.02 -13688.47
Provision for taxation
Profit after tax & extra-ordinary items -21826.35 -20404.46 -23173.58 -24403.07
Balance brought forward from last year -103857.64 -83453.18 -99065.56 -74662.49
Profit available for appropriation -21826.35 -20404.46 -23173.58 -24403.07
Transfer to general reserves
Surplus carried forward -125683.99 -103857.64 -122239.14 -99065.56

OPERATING RESULTS & PERFORMANCE

During the financial year ended March 31 2017 the Company had recorded a total incomeat Rs. 519.69 crores as against Rs.547.60 crores in the previous year on a standalonebasis. Loss before tax and extraordinary items was at Rs.227.66 crores.

Loss after tax was at Rs.231.73 crores compared to a loss in the previous year of Rs.244.03 crores.

BUSINESS HIGHLIGHTS

During the past year the operations of the Company continued to be under some stressprimarily due to delays in approval and release of enhanced limits from Banks affected theoperations and the cash flows. Payment and approval delays from customers also contributedto the slower progress in terms of turnover as well.

Bank conversion of their Working Capital Term loan (WCTL) into equity and promoterscontribution

During the year the Company submitted a Corrective Action Plan (CAP) to the jointlenders detailing the growth plan of the Company for the next 5 years and the futureprospects. CDR EG reviewed the CAP of the Company for the next 5 years and the growth planand also the banker’s decision to support the Company by converting their Workingcapital term loan (WCTL) of Rs 1282 crore into equity shares and the promoter’sdecision also to infuse Rs.265 crores. After receiving the lenders majority for theconversion of the

WCTL the Company went ahead in allotting shares. By March 2017 Rs.1205 crores(approx.) of WCTL has been converted to equity shares with the Banks holding at 67.41% inthe equity capital of the Company. The promoters also infused Rs.265 crores into theCompany in February 2017. This conversion of the WCTL will enable the Company to saveapprox. Rs.150 crs p.a on interest from the coming financial year 2017-18 and help theCompany in its cash flows.

During the year your Company was awarded domestic orders worth over Rs.211.24 croresand overseas orders worth Rs.1707crs.Significantorders include the following:

Domestic orders

Water and Infrastructure projects

Rs. In crs

a. Karnataka Urban Water Supply and Drainage Board Bengaluru
- Providing Water Supply Scheme to Tiptur City 75.66
b. Karnataka Urban Water Supply and Drainage Board Bengaluru
- Providing Water Supply Scheme to Robertsonpet (KGF) City under AMRUT 61.32

 

c. CMWSSB Chennai
Providing Comprehensive Water
Supply Scheme to Pallikaranai and Mugalivakkam in Chennai City. 74.26
Overseas orders
a. Overseas contract for constructing
Balance of Plant (BoP) for 1.2 MTPA
Mini Mill Project in Sohar Sultanate of Oman through its 100 % subsidiary 1530 .00
SHRIRAM EPC FZE SHARJAH
b. Overseas contract for the extension of Water transmission pipeline from the Lake Victoria Water supply scheme to Tabora Nzega and Igunga 177.00
Towns (Package II) an amount of 107760000 USD to be executed in JV with Larsen & Toubro out of which SEPC share will be 25%

Company’s Standalone Order Book was over Rs.1952.36 crores as at March 31 2017and the Consolidated Order Book is Rs.3422.67 crores.

BUSINESS RISK MANAGEMENT

Pursuant to the requirement of Regulation 21 of SEBI

(Listing Obligations And Disclosure Requirements)

Regulations 2015 the Company has constituted Business Risk Management Committee. Thedetails of Committee and its terms of reference are set out in the Corporate GovernanceReport forming part of the Board’s Report. The Company has a robust Business RiskManagement (BRM) framework to identify evaluate treat and Report business risks. Thisframework seeks to create transparency minimize adverse impact on the business objectivesand enhance the Company’s competitive advantage. The business risk framework definesthe risk management approach across the enterprise at various levels includingdocumentation and reporting. The framework has different risk models which help inidentifying risks trend exposure and potential impact analysis at a Company level as wellas business segments and its mitigation plans. The business risks identified by theCompany and its mitigation plans are as under:

Project Risks:

In the context of the projects being executed the Company reviews the risks associatedwith a project in all the following aspects but not restricted to:

• Client related details such as financial closure of the project creditworthiness and reputation of the client before even signing of the contract.

• Estimation risk like price and quantity variances contingency provision forexfluctuation on a periodic basis.

• Commercial risks like taxes and duties payment terms bank guaranteerequirements

• Organisational risks like availability of technical and managerial resourcesgap funding needs consortium partners roles and responsibilities.

Performance risk like achievability of guarantee parameters time schedule warrantyand defect liability obligations.

• Interfacing risks like coordination with multiple agencies for approvals andclearance.

• Geographic risks like unfavourable weather conditions earth quake floods etc.

The above key risks are closely tracked for timely mitigation.

Competition Risks:

The Infrastructure Industry is intensely competitive. To mitigate this risk theCompany is leveraging on its expertise experience to increase market share enhance brandequity/ visibility and enlarge product portfolio and service offerings.

Occupational Health & Safety (OHS) Risks:

Safety of employees and workers is of utmost importance to the Company. To reinforcethe safety culture in the

Company it has identified occupational health & safety as one of its focus areas.Various training programmes have been conducted at the sites such as behaviour basedsafety training program visible safety leadership program logistics safety program etc.

ECONOMIC SCENARIO AND OUTLOOK

According to The World Bank the Indian economy is likely to grow at 7.6 % in 2017-18and 7.8 % in 2018-19 and is expected to retain its tag of being the fastest growing majoreconomy shrugging off any concerns of slowdown caused by government’s demonetizationprogram. The economy is expected to revert to its historical growth rate on the back ofstructural reforms being undertaken supported by an anticipated rebound in consumption.Early signs of revival are getting visible in the form of uptick in industrial output anddeclining unemployment rate.

BUSINESS OVERVIEW

Your Company operates in two main segments; turnkey contracts and wind turbines. Abrief review of the business in these segments is given below.

The turnkey contracts segment represents the Company’s engineering procurementand construction projects business which include renewable energy projects likebiomass-based power plants metallurgical and process plant projects and municipalservices projects like water and wastewater treatment plants water and sewerinfrastructure and pipe rehabilitation.

The order backlog was Rs.3422.67 crores as on March 31 2017.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced aGreen initiative in Corporate Governance that allows Companies to send notices/ documentsto shareholders electronically. The Green Initiative endeavors to reduce consumption ofpaper in turn preventing deforestation and contributes towards a green and cleanenvironment. In support of the initiative announced by MCA your Company will send noticesconvening Annual General Meeting Audited Financial Statements Directors Report andAuditors’ Report etc in electronic form in the current financial year. Your Companywould like to continue the Green Initiative further and requests all shareholders to optfor electronic documents.

However on request by any member of the Company/ Statutory Authority interested inobtaining full text of the financialstatements these documents will be made available forexamination at its registered office. On personal request by any shareholder a physicalcopy of the Annual Accounts need to be provided. Pursuant to this a statement summarizingthe financial results of the Subsidiary is attached to the Consolidated FinancialStatement.

SUBSIDIARY

SHRIRAM EPC FZE SHARJAH

During the year the Company was awarded a contract for an amount of 230 Mil USD (Rs1530 Cr) for constructing Balance of Plant (BoP) for 1.2 MTPA Mini Mill Project in SoharSultanate of Oman . The project execution period will be 32 months. Further Shriram EPC(FZE) Sharjah has decided to establish and incorporate a Limited Liability Company (LLC)in Sultanate of Oman named Shriram EPC Arkan LLC with a Capital of OMR 150000 dividedinto 150000 shares of OMR 1 per share in a JV with Arkan Group LLC. Shriram EPC (FZE)Sharjah will hold 70% in the Capital of Shriram EPC Arkan LLC. This new Company will nowbecome a step down subsidiary.

ASSOCIATES

HALDIA COKE & CHEMICALS PVT. LTD (HCCL)

HCCL is engaged in the business of manufacturing processing importing exportingtrading buying selling stocking and distributing coke.

There was no activity in the Company last year.

During the year 2016-17 HCCL recorded a NIL turnover compared to Rs. 39.66 crores in2015-16.

The management of HCCL is working on revival plans for the Company.

DIVIDEND

Since the Company has made a loss for the year the Board has decided not to recommenda Dividend.

SHARE CAPITAL

The authorized and paid-up capital of your Company is Rs.1000 crs and Rs.936.97 croresrespectively.

During the year under review the bankers have converted their Working Capital TermLoan (WCTL) of Rs 1205 Crs into Equity. The promoters M/s SVL Ltd. (SVL) formerly M/sShriram Industrial Holdings Ltd the holding Company have infused Rs.265 crores. Theshareholding pattern as on 31st March 2017 will be as under:

Sl Shareholders % holding
1 SVL Ltd(promoters) 29.82
2 Bankers 67.41

The total networth of the Company as at 31st March 2017 was Rs.1577.78 crores.

DETAILS OF DEPOSITS

The Company has not accepted any Deposits covered under Section 73 of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

In addition to the Internal Controls on Operations the Board has laid emphasis onadequate internal financial controls to ensure that the financial affairs of the Companyare carried out with due diligence. Apart from Internal Audit function which scrutinizesall the financial transactions there are also processes laid down leading to CFO/CEOcertification to Board on the adequacy of Internal Financial Controls as well as internalcontrols over financial reporting.

APPOINTMENT OF DIRECTORS

Mr. M Amjat Shariff (DIN 00009562) will retire by rotation pursuant to Section 152(6)of the Companies Act 2013 at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.

EVALUATION OF BOARD’S PERFORMANCE

As per the provisions of Section 134(3) (p) of the Companies

Act 2013 and SEBI (Listing Obligations and Disclosure

Requirements) Regulations 2015 the Board has carried out an annual performanceevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Committee Nomination & Remuneration Committee and RiskManagement Committee and Stakeholders Relationship Committee. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of familiarization programmes for Independent Directors of the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company at the following link:http://www.shriramepc.com/Companies-Act-2013-Compliance.aspx.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 (Act) stating that the IndependentDirectors of the Company met with the criteria of Independence laid down in Section 149(6)of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

REMUNERATION POLICY

Pursuant to Section 178(3) of the Companies Act 2013 the Board on the recommendationof the Nomination & Remuneration Committee framed a policy for selection andappointment of Directors Key Managerial Personnel and other employees and theirremuneration.

The details of the Remuneration Policy are stated in the Corporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD

The Board had met Eight (8) times during the financial year ended 31st March 2017 on23rd May 2016 11th July 2016 12th August 2016 15th September 2016 9th November 201619th January 2017 8th February 2017 and 24th March 2017. The Audit Committee had metFour (4) times on 23rd May 2016 12th August 2016 9th November 2016 and 8th February2017. The details of the said meetings are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:.

a. that in the preparation of the annual accounts for the year ended March 31 2017the applicable accounting standards had been followed along with proper explanationrelating to material departures if any;

b. that the Directors had selected such accounting policies as mentioned in Note No: 2of the Financial Statements and applied them consistently and judgement and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2017 and of the loss of the Company for the year ended on thatdate;

c. that the Directors had taken proper and sufficientcare for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. that the Directors had prepared the annual accounts on a going concern basis;

e. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onan arm’s length basis and were in the ordinary course of business. There were nomaterially significant related party transactions made by the Company with promotersdirectors key managerial personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. None of the Directors had anypecuniary relationships or transactions vis--vis the Company other than sitting fees andreimbursement of expenses incurred if any for attending the Board meetings. All relatedparty transactions are placed before the audit committee for review and approval as perterms of the Policy for dealing with related parties. Prior omnibus approval of the AuditCommittee is obtained on a quarterly basis for the transactions which are of a foreseenand repetitive nature. The transactions entered into pursuant to the omnibus approval sogranted are audited and a statement giving details of all related party transactions isplaced before the audit committee and the board of directors for their approval on aquarterly basis. The policy on related party transactions as approved by the board isuploaded on the Company’s website at the following link.http://www.shriramepc.com/Companies-Act-2013-Compliance.aspx

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMER MADE BY THE STATUTORY AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIRREPORT

The explanations/comments made by the Board relating to qualification reservations oradverse remarks made by the Statutory Auditors and the Practicing Company Secretary intheir respective reports are furnished below:

QUALIFICATIONS OF STATUTORY AUDITORS

Management’s response to Auditors qualification. Point no.4

The Company has taken recourse for recovery of amount spent on the project throughlegal diplomatic and claim under credit insurance with ECGC Further Company`s petitionfor award of compensation for the quantum of work done is pending with the Appellate Courtin Iraq. In view of the above Company is confident of recovering the amount spent on theproject hence no provision was made.

Point no.5

The related party is in advanced stage of negotiating with their bankers forrestructuring its debts and with the business environment looking up the Company isconfident of recovering the advance & trade receivable from the related party.

Qualifications by the Secretarial Auditors

1. The Company had not complied with Regulation 46 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 relating to Website Disclosures due tonon-display of criteria for board nominations in the Website.

Management response:

The Company has since updated its website.

2. The Scrutinizer Report received from Practicing Company Secretary dated 23rdFebruary 2017 has not complied Section 110 of the Companies Act2013 read with Rule 22 ofthe Companies (Management and Administration) Rules 2014

Management response:

The erroneous omission noticed subsequently. Revised certificate received from thescrutiniser.

3. The Company has not filed Form MGT-14 for the resolution passed at the board meetingheld on 11.07.2016 for enhancement of Credit facilities from IDBI Bank Ltd. from Rs.62.87crores to Rs.79.53.

Management response:

The Company has already filed necessary application for the condonation of delay infiling the form.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OFTHE FINANCIAL YEAR AND THE DATE OF THE REPORT

There are no material changes or commitments affecting the financial position of thefinancial year and the date of this report.

COMPOSITION OF AUDIT COMMITTEE

Pursuant to Section 177 of the Companies Act 2013 during the year the AuditCommittee was reconstituted by the Board of Directors which consists of the followingmembers:

1. Mr. S.R. Ramakrishnan - Chairman

2. Mr. R. Sundararajan - Member

3. Mr. S Krishnamurthy - Member

4. Mr. S Bapu - Member

5. Mr. P D Karandikar - Member

6. Ms. Chandra Ramesh - Member

The Board has accepted the recommendations of the Audit Committee and there were noincidences of deviation from such recommendations during the financial year under review.

VIGIL MECHANISM

The Company has devised a vigil mechanism in pursuance of provisions of Section 177(10)of the Companies Act 2013 for Directors and employees to report genuine concerns orgrievances to the Audit Committee in this regard and details whereof are available on theCompany’s website.

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to Section 178 of the Companies Act 2013 during the year the Board hadreconstituted the Nomination and Remuneration Committee consisting of the followingmembers:

1. Ms. Chandra Ramesh - Chairman

2. Mr. S.R. Ramakrishnan - Member

3. Mr. R. Sundararajan - Member

The said committee has been empowered and authorized to exercise powers as entrustedunder the provisions of Section 178 of the Companies Act 2013. The Company had laid outthe policy on director’s appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under sub section 3 of Section 178 of the Companies Act 2013.

Policy on Criteria for Board Nomination and Remuneration is available in the website ofthe Company under the link http:// www.shriramepc.com/Companies-Act-2013-Compliance. aspx

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has been incurring losses for the last 5 years. Hence Corporate SocialResponsibility Committee has not been formed and no initiatives have been taken by theCompany on CSR as per the Companies (Corporate Social Responsibility Policy) Rules2014.The Company shall comply with this requirement once the operations improve and theapplicability of this provision comes into force.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE theCompanybetween the end of REGULATORS

The Company has not received any significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and Company’soperations in future.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI) on 2nd September 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effectivefrom 1st December 2015 and accordingly all listed entities were required to enter intothe listing agreement within six months from the effective date. The Company entered intoListing Agreements with BSE Limited and National Stock Exchange of India Limited duringDecember 2015.

AUDITORS

The Company’s auditors Messrs Deloitte Haskins & Sells CharteredAccountants Chennai hold office only till the ensuing Annual General Meeting of theCompany and are not eligible for reappointment from the financial year 2017-18 as theyhave completed their term of 10 years. M/s MSKA & Associates (formerly known as MZSKAnd Associates) Chartered Accountants Firm Registration

Number 105047W have given their consent to be appointed as Statutory Auditors of theCompany for a period of 5 years from the ensuing Annual General Meeting in place of theretiring Auditors.

COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 (Act) read with Rule 14 of Companies(Audit and Auditors) Rules 2014 (Rules) Mr. G Sundaresan CMA (Membership No:11733) wasappointed as Cost Auditor of the Company for the financial year 2017-18 on a remunerationof Rs.50000/-. In terms of the Act and Rules referred above the remuneration payable tothe cost auditor is required to be placed before the members in a general meeting fortheir ratification.

Accordingly a resolution seeking member’s ratification for the remunerationpayable to Mr. G Sundaresan CMA Cost Auditor is included at Item No.4 of the noticeconvening the Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Messrs R Sridharan & Associates a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company. The Report of the SecretarialAuditor is annexed herewith.

As required under the Companies Act 2013 the remuneration of Rs.1 lac payable to theSecretarial Auditor is required to be placed before the members in a general meeting fortheir ratification.

Accordingly a Resolution seekingmember’sratification for the remuneration payableto Messrs R Sridharan & Associates a firm of Company Secretaries in Practice isincluded at Item No.6 of the notice convening the Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report highlighting the business details isattached and forms part of this report.

CORPORATE GOVERNANCE

All material information was circulated to the directors before the meeting or placedat the meeting including minimum information required to be made available to the Boardas prescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of theListing Regulations.

In terms of Regulation 34 of the Securities and Exchange

Board of India (Listing Obligations and Disclosure

Requirements) Regulations 2015 a Report on Corporate

Governance along with a Certificate from the Practicing Company Secretary confirmingthecompliance with the conditions of Corporate Governance as stipulated under

Part E of Schedule V of Sub- Regulation 34(3) of the Listing Regulations is attached tothis report.

PROTECTION OF WOMEN AT WORK PLACE

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual

Harassment of Women at the workplace (PreventionProhibition & Redressal) Act2013.

Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed offduring the year 2016-17.

No. of complaints received – Nil

No. of complaints disposed off – Not Applicable

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of The Companies (Accounts) Rules 2014 is given below: Earnings in ForeignCurrency: Nil Expenditure in Foreign Currency: Rs. 290.93 lakhs

Rs. In Lakhs
Traveling and conveyance 70.15
Professional and consultation fees 41.24
Erection Construction & Operation
157.84
Expenses
Others 21.70
Total 290.93

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in the prescribed form MGT9 as per Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 is annexed to and forms part of this Report.

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 of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 is annexedto and forms part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance withSection 129(3) of the Companies Act 2013 and relevant Accounting Standards (AS) viz. AS21 AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part ofthis Annual Report. Further a statement containing the salient features of the financialstatement of the subsidiary in the prescribed format AOC-1 is appended to the DirectorsReport. The statement also provides the details of performance and financial position ofthe subsidiary.

APPRECIATION & ACKNOWLEDGMENTS

The Directors wish to thank the bankers for their continued and unstinted support.Further the Directors also wish to thank the Shareholders of the Company for theircontinued support even during these testing period and also the customers and suppliersfor their continued cooperation.

Lastly the Directors also places on record their appreciation to all employees at alllevels for their commitment and their contribution.

For and on behalf of the Board
T Shivaraman R Sundararajan
Managing Director & CEO Director
30th May 2017
Chennai