PERSEVERANCE IS THE SECRET OF SUCCESS
Dear Fellow Shareholders
During the year under review your Company has weathered through the extraordinarilydifficult legal and regulatory environment. The year gone by witnessed a paradigm shift inIndian indirect taxation system as the nation migrated to the goods and services tax(GST') regime effective from July 01 2017.
Under the erstwhile system the solar power generating systems were exempt from thewhole of excise duty and most state VAT laws provided merit rate of tax thereon. It isperhaps considering this rate structure that renewable energy devices and parts thereofincluding solar power-based devices solar power generating systems solar lantern/solarlamp have been made subject to GST at the rate of 5%. In earlier regime the execution ofturn key projects were treated either in supply plus service tax criterion or sometimes inworks contracts where there is only a single price and absence of cost of service part.The rate of GST on works contract is 18%.
Hence post GST this confusion created a lot of lost opportunity. The difference is of13% is a sunk cost for purchaser as final produce Power is out of GST purview.
Despite representations no clarity has yet been announced to bring every one on onepage. Hence solar sector is under shadow of clouds of non-clarity.
Your company operates in Solar Park business various states have slapped additionalcross subsidy charges for the Open Access power customers this make investment in SolarPark under OA supply difficult hence this business also took the hit.
Due to the above-mentioned regulatory changes the growth of your company is hamperedand it resulted in a downfall of 28.88% in its annual turnover at Rs. 334.17 Crore for thefiscal year 2018 in comparison to that of Rs. 486.34 Crore in the previous fiscal year2017.
The Profit after tax is Rs. 17.01 Crore for the fiscal year 2018 in comparison to thatof Rs. 35.93 Crore in fiscal year 2017. Every business faces down cycle and your companyis also facing a similar cycle but Your Company is looking on various opportunities togrow in Energy space. We are toying up with new ideas to create value for allstakeholders.
I would like to take this opportunity to thank our Board of Directors employees andpartners for being an integral part of this journey. Our shareholders too have been aconstant source of support as have been the governments and other institutions that weengage and interact with. I would again like to repeat that "PERSEVERANCE IS THESECRET OF SUCCESS" We remain committed to our strategy and vision and are confidentof the continued support of all our stakeholders and well-wishers.
With Best Wishes
Shyamsunder Mundra Chairman & Managing