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Directors Report of KEC International Ltd.

Mar 31, 2016

The Directors have pleasure in presenting the Eleventh Annual Report along with the Consolidated and Standalone Audited Financial Statements of the Company for the financial year ended on March 31, 2016.

1. FINANCIAL RESULTS

(Rs. in Crore)

Particulars Consolidated Standalone

FY FY FY FY 2015-16 2014-15 2015-16 2014-15

Net Revenue from Operations 8,516.33 8,467.80 6,463.61 6,592.09

EBITDA 679.29 511.80 448.31 327.46

Finance Cost 277.43 308.86 231.26 252.13

Depreciation & Amortisation 87.56 88.11 69.96 70.40

Profit Before Tax 324.56 261.06 259.13 182.34

Tax Expenses 133.06 100.08 101.12 71.61

Profit After Tax 191.52 160.99 158.01 110.74

Dividend on equity shares * 30.89 27.85 30.89 27.85 (including tax on dividend)

Transfer to General Reserve 15.80 11.07 15.80 11.07

*Interim Dividend declared on March 14, 2016.

2. PERFORMANCE

Financial Performance

In FY 2015-16, several measures were taken for improving the financial performance of the Company which yielded positive results.

On a consolidated basis, the net revenue from operations for FY 2015-16 was Rs. 8,516 Crore, a marginal growth over FY 2014-15. Revenue growth was flat primarily on account of soft commodity prices, significant depreciation of Brazilian Real and delay in conversion of some large lowest bidder (L1) positions into orders. EBITDA for FY 2015-16 was Rs. 679 Crore, a strong growth of 33 percent over FY 2014-15. EBITDA margin expanded by 200 bps in FY 2015-16. The net profit excluding the impact of asset sale in FY 2015-16 increased to Rs. 186 Crore, a strong growth of 168 percent over FY 2014-15. The net profit including the impact of sale of the asset in FY 2015-16 increased to

Rs. 192 Crore, a growth of 19 percent over FY 2014-15. On a standalone basis, the net revenue from operations was Rs. 6,464 Crore and the net profit was Rs. 158 Crore, including profit on sale of Telecom Towers'' business of Rs. 5 Crore.

The Company secured orders of Rs. 8,714 Crore in FY 2015-16, an increase of 6 percent over the previous year. This is notwithstanding the impact of soft commodity prices and adverse currency movement in the Company''s key market Brazil. The closing order book position was at Rs. 9,449 Crore. The Company is expecting to receive significant orders in near term as it already has one of the highest L1 pipeline.

During the year under review, the Company saw a very significant improvement in the profitability. The transmission business continues to perform well both in terms of revenue and profitability. The Company''s wholly owned subsidiary, SAE Towers, has turned around this year to make a profit. The Company also took necessary and rigorous steps for closing old projects in its Railway and Water businesses. However, the profitability of the Railways and Water businesses were impacted due to costs associated with project closures. The soft commodity prices resulted in under absorption of fixed costs in the Company''s Cables business.

Operational highlights

The key highlights of the Company''s various businesses are as follows:

Power Transmission & Distribution – This is the Company''s largest business vertical which provides end- to-end solutions for power evacuation from generating stations to consumer distribution points. During the year under review, the Company has expanded its presence into underground cabling and Substation business internationally.

The Company secured orders for Rs. 7,329 Crore in this division during the year across India, MENA, Africa, Asia and the Americas. The orders include largest ever single order in transmission business from Power Grid Corporation of India Limited (PGCIL) and one of the largest orders in Africa from Ghana Grid Company.

Building on to its business transformation exercise which the Company completed last year, it has maintained the pace of implementation in line with changing client requirements.

The successful implementation of the transformation exercise has led to reduction in execution cycles for projects across the Company''s businesses and the Company has also completed some of the projects ahead of schedule. In recognition, the Company had received an appreciation letter from PGCIL for completing the Indo Bangladesh cross border line 5 months ahead of schedule. PGCIL also appreciated the Company''s work by conferring upon it three of its most coveted awards for FY 2015-16 - Best Transmission Line Contractors award, award for Institutionalizing Best Safety Practices and an award for Overall Performance Demonstrated. The Company also won the Outstanding Quality award for a National Grid project in Saudi Arabia.

Last year the Company had strengthened its presence in domestic Substation business by securing large and prestigious orders for the establishment of various Gas Insulated Substations (GIS). This year the Company has further expanded this business in international markets by securing orders in Saudi Arabia, Bhutan and Afghanistan.

The Company has also started expanding on cabling projects with orders in Saudi Arabia.

The Company has also expanded its strong global EPC expertise in Americas through its wholly owned subsidiary SAE Towers. In addition to the 5 (Five) EPC projects secured earlier in Brazil, this year the Company secured one more such order.

Cables – The Cables business secured orders of Rs. 967 Crore in FY 2015-16. Cable being a commodity driven business, the impact of significant deceleration in prices of Copper and other metals impacted the revenue and the order values. The Cables business has now received complete approval for 220 kV Cables from KEMA, Netherlands which will help in expansion of the EHV Cables portfolio in international markets.

Railways – The Company secured a composite order of Rs. 288 Crore for electrification, civil works, track laying, signaling and telecommunication works in Madhya Pradesh from Rail Vikas Nigam Limited. The order sizes in traditional rail businesses have started to increase and the Company intends to participate in these projects going forward. The reduction in timelines to award a project and a strong tender pipeline is expected to drive growth in this business.

Renewables – During the year, the Company ramped up its presence in the renewables business by securing orders of Rs. 130 Crore. These orders are mainly for EPC work of Solar PV power plants.

Water – This year the Company''s focus has been on completing or closing the balance Water Resource Management (WRM) projects. The Company has managed to complete most of the projects this year and remaining projects are expected to be completed in FY 2016-17. The technology projects like Waste Water Treatment (WWT) are under execution and the Company has selectively bid for these projects.

During the year under review, there was no change in the nature of business of the Company.

3. DIVIDEND

The Board of Directors had during the year, approved payment of interim dividend at the rate of Rs. 1/- (Rupee One only) per equity share, of face value of Rs. 2/- each, to the Members of the Company as at the closing hours on March 24, 2016, being the record date fixed by the Board of Directors for this purpose. Interim Dividend was paid on March 29, 2016. With a view to conserve the resources for future expansion and business growth, the Board does not recommend any further dividend and that the interim dividend be considered as final dividend for the financial year ended on March 31, 2016.

4. GENERAL RESERVE

The Board of Directors proposes to transfer an amount of Rs. 15.80 Crore to the General Reserve.

5. SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31, 2016 was Rs. 51.42 Crore and remained unchanged during the financial year under review.

6. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of sub-section (31) of Section 2 and Section 73 of the Companies Act, 2013 (hereinafter referred to as "the Act") and the Rules framed thereunder.

7. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The loans given, investments made and guarantees and securities provided during the year under review, are in compliance with the provisions of the Act and Rules made thereunder and details thereof are given in the Notes to the Standalone Financial Statements.

8. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

In terms of Clause 49 of the erstwhile Listing Agreement and Regulation 34 of the Securities and Exchange

Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "the Listing Regulations"), a separate section on Management Discussion and Analysis and Corporate Governance Report together with a certificate from the Company''s Statutory Auditors confirming compliance with Corporate Governance clauses of erstwhile Listing Agreement and Listing Regulations, are set out and forms part of this Annual Report.

9. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provision of sub-section(3) of Section 129 of the Act and the Listing Regulations, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards prescribed under Section 133 of the Act.

10. SUBSIDIARY COMPANIES

The Company has twenty one subsidiary companies which includes step down subsidiaries as well.

During the year under review, the Company had incorporated a subsidiary Company namely KEC Bikaner Sikar Transmission Private Limited as a Special Purpose Vehicle (SPV), to execute a project awarded to the Company by Rajasthan Rajya Vidyut Prasaran Nigam Limited in the state of Rajasthan.

Jay Railway Projects Private Limited, a wholly owned subsidiary of the Company, merged with the Company on December 30, 2015, with appointed date of April 01, 2014. Further, during the year under review, SAE Towers Panama Holdings LLC and SAE Towers Panama S de RL Panama, step down subsidiaries, were dissolved.

Pursuant to the provision of sub-section (3) of Section 129 of the Act read with Rule 5 of Companies (Accounts) Rules, 2014, the salient features of the Financial Statements of each of the subsidiaries, associate and joint venture companies are set out in the prescribed Form AOC-1, which forms part of the Annual Report. The Financial Statements of these subsidiaries are uploaded on the website of the Company i.e. www.kecrpg.com under ''Investors'' tab and the same shall also be made available for inspection by any Member at the Registered Offce of the Company on all working days (except Saturdays) during business hours till the date of Annual General Meeting. A copy of these Financial Statements shall be provided to any Member of the Company, upon receipt of a written request for the same.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Act, the Board of Directors of the Company hereby state and confirm that:

1. in the preparation of the annual accounts for the financial year ended on March 31, 2016, applicable accounting standards have been followed and no material departures have been made from the same;

2. we have selected such accounting policies and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;

3. we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. we have prepared the annual accounts for the financial year ended on March 31, 2016 on a going concern basis;

5. we have laid down internal financial controls and the same have been followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

12.1 Directors

Pursuant to the provisions of Section 152 of the Act, Mr. R. D. Chandak, Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Further during the year, the Board of Directors had appointed Mr. Vimal Kejriwal as an Additional Director. Pursuant to Section 161 of the Act and Article 124 of the Articles of Association of the Company, Mr. Vimal Kejriwal holds office up to the date of the ensuing Annual General Meeting of the Company. The Company has received a notice from a Member of the Company under Section 160 of the Act, proposing the candidature of Mr. Vimal Kejriwal as Director of the Company.

In compliance with Regulation 36(3) of the Listing Regulations, brief resume, expertise and other details of all the Directors proposed to be appointed/reappointed are given in the Notice convening the ensuing Annual General Meeting.

The Board recommends the aforesaid appointment/ reappointment of the Directors.

12.2 Key Managerial Personnel (KMP)

Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act read with the Rules framed thereunder, the following are Key Managerial Personnel of the Company:- 1. Mr. Vimal Kejriwal, Managing Director & CEO;

2. Mr. R. D. Chandak, Managing Director*;

3. Mr. Rajeev Aggarwal, Chief Financial officer; and

4. Mr. Ch. V. Jagannadha Rao, Vice President-Legal and Company Secretary.

* Retired from the close of business hours on April 01, 2015.

12.3 Declaration by Independent Directors

Pursuant to provision of sub-section (6) of Section 149 of the Act and Regulation 17 of the Listing Regulations, each of the Independent Directors of the Company namely Mr. A. T. Vaswani, Mr. D. G. Piramal, Mr. G. L. Mirchandani, Ms. Nirupama Rao, Mr. S. M. Kulkarni, Mr. S. M. Trehan, Mr. S. S. Thakur and Mr. Vinayak Chatterjee have submitted a declaration that each of them continues to meet the criteria of independence as provided in the Act and Listing Regulations.

12.4 Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, the Directors individually and also of all the Committees of the Board. The Directors were provided with an electronic platform to record their views. The reports generated out of the evaluation process were placed before the Board at its Meeting and noted by the Directors.

The performance of the Board and its Committees was evaluated by the Board after seeking inputs from the Directors on the basis of criteria such as Board composition, strategy, performance management, risk management etc. The performance of the Committees was evaluated using parameters like composition, frequency of meetings, level of participation and effectiveness of the Committees etc.

A meeting of Independent Directors was held in terms of requirement of Schedule IV of the Act and the Listing Regulations. The Directors present reviewed the performance of Non-Independent Directors, Chairman of the Company and the performance of the Board as a whole. The Directors also discussed the quality, quantity and timeliness of flow of information between the Company management and the Board, which is necessary for the Board to effectively and reasonably perform their duties. The feedback of the meeting was shared with the Chairman of the Company.

12.5 Policy on Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel

In terms of the provision of sub-section (3) of Section 178 of the Act, the Board of Directors has adopted a Nomination and Remuneration Policy on appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The policy covers the appointment, including criteria for determining qualifications, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The said Policy is annexed to this Report as Annexure ''A''.

12.6 Meetings of the Board of Directors

During the year under review, 5 (Five) meetings of the Board of Directors were held, the details of which are given in the Corporate Governance Report.

12.7 Meetings of Audit Committee

During the year under review, 9 (Nine) meetings of the Audit Committee were held. The details of the meetings and the composition of the Committee are given in the Corporate Governance Report. All the recommendations of the Audit Committee were accepted by the Board.

13. AUDITORS

13.1 Statutory Auditors

M/s. Deloitte Haskins & Sells ("DHS"), Chartered Accountants (Firm''s Registration No.: 117365W) were appointed as the Statutory Auditors of the Company, to hold office from the conclusion of the Ninth Annual General Meeting until the conclusion of the Twelfth Annual General Meeting, subject to ratification by the Members at every Annual General Meeting. The Board of Directors recommends to the Members to pass the resolution ratifying the appointment of DHS as the Statutory Auditors of the Company as stated in Item No. 4 of the Notice convening the ensuing Annual General Meeting.

The Statutory Auditors'' Report does not contain any qualifications, reservations or adverse remarks.

13.2 Branch Auditors

In terms of the provision of sub-section (8) of Section 143 of the Act read with Rule 12 of the Companies (Audit and Auditors) Rules, 2014, the audit of the accounts of the branch offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors in accordance with laws of that country. Approval of the Members is sought to authorise the Board of Directors/Audit Committee to appoint Branch Auditors in consultation with the Statutory Auditors for the branch offices of the Company and also to fix their remuneration. The Board of Directors recommends to the Members to pass the resolution, as stated in Item No. 5 of the Notice convening the ensuing Annual General Meeting.

13.3 Cost Auditors

Pursuant to the provisions of Section 148 of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the cost records, in respect of manufacturing of Steel towers and Cables, need to be audited. The Board of Directors, upon the recommendation of the Audit Committee, had appointed M/s. Kirit Mehta and Associates, Cost Accountants (Firm''s Registration No.: 000353) to conduct audit of the cost records of the Company for the financial years 2015-16 & 2016-17. In terms of the above provisions, the remuneration payable to the Cost Auditor is required to be ratified by the Members. Accordingly, the Board of Directors recommends the Members to pass the resolution, as stated in Item No. 7 of the Notice convening the ensuing Annual General Meeting.

The Company has fled the Cost Audit Reports for the financial year 2014-15 with the Ministry of Corporate Affairs on September 30, 2015.

13.4 Secretarial Auditors

In terms of the provisions of Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Parikh Parekh & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report in the prescribed Form MR-3 is annexed to this report as Annexure ''B''. The said Secretarial Audit Report doesn''t contain any qualifications, reservations, adverse remarks by the Secretarial Auditors.

14. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 read with Schedule VII of the Act, the Company, as a part of its Corporate Social Responsibility ("CSR") initiative, has adopted a CSR Policy outlining various CSR activities to be undertaken by the Company in the area of health, water, sanitation, promoting education, skill development etc. The CSR policy of the Company is available on the Company''s website i.e. www.kecrpg.com under ''Investors'' tab.

During the year under review, even though the Company was not mandatorily required to spend any amount on CSR activities, it has spent Rs. 93 Lacs on CSR activities. The Board has constituted a CSR Committee inter alia to recommend on the CSR projects/programs, recommend the amount on each CSR activity and to monitor such CSR activities, being undertaken by the Company. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure ''C''.

15. POLICY ON CODE OF CONDUCT AND ETHICS

The Company has laid down a Code of Conduct and Ethics ("Code") applicable to all the Directors and employees of the Company. The Code provides for the matters related to governance, compliance, ethics and other matters. The Code also includes the policy on prevention, prohibition and redressal of sexual harassment of women at workplace in accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to effectively promote gender sensitive safe spaces and remove underlying factors that contribute towards a hostile work environment against women.

During the year, no complaints of any nature were received under the provisions of Sexual Harassment of Women at Workplace Act.

16. WHISTLE BLOWER POLICY

Pursuant to the provisions of sub-section (9) of Section 177 of the Act and the Listing Regulations, the Company has established a vigil mechanism ("Whistle Blower Policy") to facilitate its employees and Directors to voice their concerns or observations without fear, or raise reports of instance of any unethical or unacceptable business practice or event of misconduct/unethical behavior, actual or suspected fraud and violation of Company''s Code of Conduct etc. to the Corporate Ethics and Governance Committee. The Policy provides for adequate safeguards to those persons who use such mechanism and also have the provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Policy can be accessed on the Company''s website i.e. www.kecrpg.com under ''Investors'' tab.

17. RISK MANAGEMENT POLICY

The Company has formulated a Risk Management Policy, which reflects the overall risk management philosophy, the Company''s overall approach to risk management and the role and responsibilities for risk management. Risk management forms an integral part of the business planning and review cycle of the Company. The Company''s Risk Management Policy is designed to provide reasonable assurances that objectives are met by integrating management control into daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the Company''s financial reporting and its related disclosures. The identification, analysis and putting in place the process for mitigation of these risks is an ongoing process. The risks faced by the Company and the measures taken by the Company to mitigate those risks are detailed in Management Discussion and Analysis section.

18. INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis section.

19. RELATED PARTY TRANSACTIONS

All transactions entered into by the Company with related parties were in the ordinary course of business and at arm''s length basis. The Audit Committee has reviewed and approved the related party transactions undertaken by the Company during the financial year. Disclosures as required under AS-18 have been made in Note No. 35 to the Standalone Financial Statements.

There are no materially significant related party transactions entered into by the Company with its Directors/Key Management Personnel or their respective relatives, the Company''s Promoter(s), its subsidiaries/joint ventures/associate or any other related party, that may have a potential conflict with the interest of the Company at large. The policy on related party transactions, as formulated by the Board is available on the Company''s website i.e. www.kecrpg.com under ''Investors'' tab.

20. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return as on March 31, 2016 in the prescribed Form MGT-9 is enclosed as Annexure ''D''.

21. ENVIRONMENT HEALTH AND SAFETY (EHS)

It has always been the Company''s endeavor to achieve the EHS objective of accident free workplace. In order to ensure that our employees become more safety conscious and to improve the organization''s approach towards prevention of loss, the Company has undertaken various EHS management processes and deployed methodologies and implemented them under the EHS system.

The Company has imparted EHS industry specific training for employees and workmen. The Company has also made improvements in reporting of unsafe acts/ conditions & its closure. These robust EHS management processes helped the Company in preventing loss of life and property damage incidents.

The Company has bagged various EHS awards and appreciation from our prestigious customers and independent agencies. The awards include "Greentech Safety Awards 2015" for its stringent Safety Standards & Credibility.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under clause (m) of sub-section (3) of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in the prescribed format and is enclosed as Annexure ''E''.

23. PARTICULARS OF EMPLOYEES

Disclosures pertaining to the remuneration and other details as required under sub-section (12) of Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, are given in Annexure ''F''.

Disclosure about the information and other details on employees, as required in terms of Rule 5(2) & (3), who were in receipt of remuneration of not less than Rs. 60 Lacs during the year or Rs. 5 Lacs per month during any part of the year, forms part of this Report. In terms of Section 136 of the Act, this report is being sent to the Members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the Members at the Registered Office of the Company during business hours on all working days (except Saturdays) upto the date of the ensuing Annual General Meeting. The said information shall also be provided to any Member of the Company, who sends a written request to the Company Secretary.

24. HUMAN RESOURCE/INDUSTRIAL RELATIONS

The Company understands that employees are vital and valuable assets. The Company recognises people as the primary source of its competitiveness and continues its focus on people development by leveraging technology and developing a continuously learning human resource base to unleash their potential and fulfill their aspirations. The strategic thrust of Human Resource has been on improvement of the performance of employees through training & development and also to identify outperformers who have potential for taking higher responsibilities.

The employee relations remained cordial throughout the year. The Company had 4,104 permanent employees on its rolls as on March 31, 2016. The Board places on record its sincere appreciation for the valuable contribution made by employees across all levels whose enthusiasm, team efforts, devotion and sense of belonging has made this Company proud.

25. OTHER DISCLOSURES

Your Directors state that no disclosures or reporting is required in respect of the following items, as the same is either not applicable to the Company or relevant transactions/events have not taken place during the year under review.

a. The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

b. The Company has not issued shares (including sweat equity shares) to employees under any scheme.

c. The Managing Director & CEO of the Company did not receive any remuneration or commission from any of its subsidiaries.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

26. ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the Central and State Government Departments, Organizations and Agencies for their continued support and co-operation. The Directors are also thankful to all valuable stakeholders viz., customers, vendors, suppliers, banks, financial institutions, joint venture partners and other business associates for their continued co-operation and excellent support provided to the Company during the year. The Directors acknowledge the unstinted commitment and valuable contribution of all employees of the Company.

Your Directors also appreciate and value the trust reposed in them by Members of the Company.

27. ANNEXURES

The following annexures enclosed, form part of this Report:

a. Nomination and Remuneration Policy - Annexure ''A''

b. Secretarial Audit Report in Form MR-3 - Annexure ''B''

c. Annual Report on Corporate Social Responsibility - Annexure ''C''

d. Extract of Annual Return in Form MGT-9 - Annexure ''D''

e. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo - Annexure ''E''

f. Information under rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Annexure ''F''

For and on behalf of the Board of Directors

H. V. Goenka

Chairman

(DIN: 00026726)

Place: Mumbai

Date: May 06, 2016


Mar 31, 2014

To the Members of KEC International Limited

The Directors have pleasure in presenting the Ninth Annual Report, along with the audited accounts of the Company, for the year ended March 31, 2014.

1. Financial Results

Rs. in crore

Particulars Consolidated Standalone FY14 FY13 FY14 FY13

Net Revenue from Operations 7901.83 6,979.49 6,558.77 5,592.08

EBITDA 493.27 381.40 372.89 231.09

Finance Cost 263.27 194.40 231.42 164.81

Depreciation & Amortisation 70.52 56.08 55.42 43.05

Profit Before Tax 155.10 146.83 150.86 43.74

Tax Expenses 88.34 81.79 65.27 39.18

Profit After Tax 66.75 65.04 85.59 4.56

Proposed Dividend on equity shares 18.05 15.22 18.05 15.03 (including tax on dividend)

Transfer to General Reserve 8.56 0.45 8.56 0.45

2. Dividend

The Board of Directors has recommended a dividend of Rs. 0.60 per equity share of Rs. 2 each for the year ended March 31, 2014, on the equity share capital of the Company, aggregating to Rs. 15,42,53,022 (Rupees Fifteen Crore Forty Two Lacs Fifty Three Thousand Twenty Two only). The dividend on equity shares is subject to the approval of the members at the ensuing Annual General Meeting. Further the Board of Directors proposes to transfer an amount of Rs. 8.56 crore to the General Reserve.

3. Performance

Financial Performance

On a consolidated basis, the net revenue from operations increased by 13.21% to Rs. 7,901.83 crore. The net profit increased by 2.6% to Rs. 66.75 crore. On a standalone basis, the net revenue from operations increased by 1729% to Rs. 6,558.77 crore, while the net profit was Rs. 85.59 crore in FY14, as compared to Rs. 4.56 crore in FY13.

During the year under review, several measures have been taken for improving the performance of the Company and to secure new orders across various businesses and geographies. The order intake for the year increased by 13.34% to Rs. 8,482 crore. The closing order book has increased by 77% to Rs. 10,200 crore by FY14 end.

While the transmission business continued to perform well both in terms of revenue and profitability, the overall profitability of the Company on consolidated basis was impacted due to revenue de-growth in the wholly owned subsidiary SAE Towers. It was also impacted due to time and cost overruns in Railways, Power Systems and Water businesses. In the Cables business profitability was impacted due to pricing pressure as also higher costs at the new manufacturing facility established at Vadodara.

Operational highlights

The key highlights for the Company''s various businesses are as follows:

Power Transmission & Distribution: This is the Company''s largest business vertical which provides end- to-end solutions for power evacuation from generating stations to consumer distribution points.

The order intake for the business increased by 12.1% to Rs. 6,951 crore. The orders came from across all the regions. These also include large value orders from Tanzania (Rs. 772 crore), Saudi Arabia (Rs. 708 crore) and Afghanistan (Rs. 590 crore).

The Company is also leveraging its strong global EPC expertise along with a local foothold in American market through SAE Towers. During FY14, SAE towers entered in EPC business and secured two transmission line EPC orders in Brazil. These orders were of approx. Rs. 94 crore.

The Company also expanded its international presence in Substation space by securing orders in Laos, Philippines, Malaysia, Saudi Arabia and Afghanistan during the year. Further, the Company has increased its presence in Gas Insulated Substations (GIS) by securing a Rs. 102 crore order in Bihar.

SAE Towers completed expansion of its pole production capacity at its existing facility in Mexico from 5,000 MTs to 12,000 MTs per annum. In addition to this, the Company has also completed expansion of its tower manufacturing capacity at its existing facilities in Jaipur, Jabalpur and Nagpur from 1,74,000 MTs to 2,11,200 MTs per annum.

Cables: Consequent upon the commencement of the new plant at Vadodara, the manufacturing facility at Thane has been closed down and the Company has entered into an agreement for sale of this land. The complete range of products manufactured at Thane plant are now being manufactured at the Vadodara plant. The annual order intake for the business increased by 26.5% to Rs. 855 crore in FY14.

Railways: The Company has secured a large composite order from the Rail Vikas Nigam Limited, India. The order includes electrification, civil works, signalling and telecommunication works in the state of Uttar Pradesh and the order value is Rs. 228 crore. The Company also intends to target projects related to Metro and dedicated freight corridors in partnerships with other Indian and foreign players.

Water: The Company secured two Sewage Treatment orders in Bengaluru and Uttarakhand of total Rs. 205 crore. In addition to this, it secured its first ever Dam construction order in Madhya Pradesh of Rs. 99 crore. Further, it also secured Canal construction orders in Madhya Pradesh of Rs. 75 crore. Based on orders in hand and execution in FY14, the Company is also building its pre-qualification base in this business.

4. Listing

The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited. Further during the year the Company has listed its equity shares on MCX Stock Exchange Limited. The stipulated listing fees for FY15 have been paid to all the above Stock Exchanges.

5. Fixed Deposits

The Company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act, 1956, and the Rules framed there under and any re-enactments thereof.

6. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the prescribed format as an annexure to this Report.

7. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate section on Management Discussion and Analysis, as approved by the Board of Directors, which includes details on the state of affairs of the Company as required to be disclosed in the Directors'' Report forms a part of this Annual Report. Further, the Corporate Governance Report, duly approved by the Board of Directors, together with a certificate from the Statutory Auditors confirming the compliance with the requirements of Clause 49, also forms a part of this Annual Report.

8. Subsidiary Companies

At the beginning of FY14, the Company had twenty two direct and step down subsidiary companies. One step down subsidiary company has been incorporated in Mexico to explore the business opportunities in EPC business. Accordingly, the number of direct and step down subsidiaries of the Company stands increased to twenty three as on the date of this Report. The details pertaining to subsidiaries are mentioned under the statement made pursuant to Section 212 of the Companies Act, 1956, which forms a part of this Annual Report.

Ministry of Corporate Affairs vide Circular No: 02 / 2011 dated February 08, 2011, has, subject to compliance with certain conditions, granted general exemption to the companies from applicability of Section 212 of the Companies Act, 1956. As per the general exemption, a statement containing brief financial details of the Company''s subsidiaries for the year ended March 31, 2014, is included in this Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company / its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company / its subsidiary(ies) at the Registered Office of the Company / its subsidiary(ies).

9. Consolidated Financial Statements

In accordance with Clause 32 of the Listing Agreement entered into with the Stock Exchanges, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms part of this Annual Report. The consolidated Financial Statements have been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

10. Directors

In accordance with the provisions of the Companies Act, 2013, Mr. H. V. Goenka and Mr. A.T . Vaswani, are liable to retire by rotation and eligible for re-appointment at the ensuing Annual General Meeting. Further the Board of Directors has appointed Mr. Vinayak Chatterjee as an Additional Director w.e.f. April 30, 2014. Pursuant to Section 161 of the Companies Act, 2013, and Article 124 of the Articles of Association of the Company, Mr. Vinayak Chatterjee holds Office upto the date of the ensuing Annual General Meeting of the Company and is eligible for appointment as Director. Further as per the provisions of the Companies Act, 2013, the independent directors of the Company will have to be appointed by the members for a term upto five years, and no independent director shall be liable to retire by rotation. Further Mr. S. S. Thakur, Mr. G. L. Mirchandani, Mr. D. G. Piramal, Mr. S. M. Kulkarni, Mr. S. M. Trehan and Mr. Vinayak Chatterjee have given declaration to the Company under Section 149(6) of the Companies Act, 2013, that they qualify the criteria of independence mentioned under that sub-section. Accordingly it is proposed to appoint them as independent directors not liable to retire by rotation for a term of five years from the enabling Annual General Meeting.

Further in view of the provisions of Section 165 of the Companies Act, 2013, which restricts the directorship of a director in ten public limited companies and the proposed amendment to the Listing Agreement entered into with the Stock Exchanges, which restricts the directorships of independent directors to seven listed companies only, Mr. M. K. Sharma, who was a director of the Company resigned from his Office w.e.f. March 31, 2014. The Board places on record its sincere appreciation for the valuable services rendered by Mr. M. K. Sharma during his tenure as the Member of the Board.

In compliance with Clause 49 IV (G) of the Listing Agreement, brief resume, expertise and other details of all the directors proposed to be appointed / re-appointed are attached to the Notice of the ensuing Annual General Meeting.

The Board of Directors recommends to the members the appointment of the above referred independent directors and the re-appointment of Mr. H. V. Goenka and Mr. A. T. Vaswani as the directors of the Company.

11. Auditors

Statutory Auditors

In view of the provisions of Section 139 of the Companies Act, 2013, and the Rules made there under, a listed company cannot appoint an audit firm as the Auditors of the Company for more than two terms of five consecutive years and which shall be subject to ratification by the members at every Annual General Meeting. For reckoning this term, the period already served by the firm as auditors shall be counted. According to the Illustration 2 appended to sub- rule 3 of Rule 6 of the Companies (Audit and Auditors) Rules, 2014, every firm of the Auditors who has completed 7 or more years as an Auditor of the prescribed classes of companies (including listed companies), can be appointed as an Auditor for a further period upto three years only Accordingly Delloitte Haskins & Sells (DHS) is entitled to be appointed as Statutory Auditors of the Company for a further period upto three years. In view of the same it is proposed to appoint DHS as the Statutory Auditors of the Company to hold Office from the conclusion of the ensuing Annual General Meeting until the conclusion of the Twelfth Annual General Meeting and to authorise the Board of Directors to fix their remuneration. The Company has received a letter from DHS to the effect that their appointment, if made, would be within the limits prescribed under the provisions of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of the said Act. The Board of Directors recommends the appointment of DHS as the Statutory Auditors of the Company for a period of three years.

Branch Auditors

In terms of Section 143(8) of the Companies Act, 2013, the audit of the accounts of the branch Offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors. The Board of Directors recommends to the members to pass the resolution, as stated in Item No.6 of the Notice, convening the ensuing Annual General Meeting.

Cost Auditors

The Central Government has approved the appointment of M/s. Kirit Mehta & Co., Cost Accountants, Mumbai, as Cost Auditors, for conducting Cost Audit in relation to Electrical Cables and Conductors and Steel Towers manufactured by the Company for FY14 under The Companies (Cost Accounting Records) Rules, 2011. The Cost Audit Report and the Compliance Report for FY13 was fled by the Cost Auditors with the Ministry of Corporate Affairs on September 30, 2013.

12. Policy on Code of Conduct and Ethics

The RPG Group has laid down a Code of Conduct and Ethics (Code) applicable to all the employees in RPG Group companies. The Code provides for the matters related to governance, compliance, ethics and other matters within the RPG Group companies. The Code also includes the policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

13. Awards Received During the Year

For FY 14 the Company was conferred with the ''Utkrishta Puraskar'' i.e. Best Transmission Line Company Award and ''Sahbhagita Puraskar'' i.e. Support Outside Line of Duty Award from Power Grid Corporation of India Limited. Further the Company also won the prestigious, "Best Employer Award, 2013" by Aon Hewitt and the "Indo- American Corporate Excellence Award" by the Indo- American Chambers of Commerce for best Indian company operating in US. The details of these Awards & Recognition are mentioned on page 18 & 19 of this Annual Report

14. Directors'' Responsibility Statement

The Board of Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable Accounting Standards have been followed;

(ii) such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts for the financial year ended March 31, 2014, have been prepared on a going concern basis.

15. Particulars of Employees

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information, is being sent to all the members of the Company and others entitled thereto. Members who are desirous of obtaining such particulars are requested to write to the Company Secretary of the Company.

16. Acknowledgement

Your Directors take this opportunity to thank the Customers, Vendors, Financial Institutions, Banks and all other stakeholders for their continued co-operation and support to the Company. Further the Directors would also like to thank the Central and State Government authorities and Regulatory authorities for their support.

Your Directors appreciate and value the trust reposed and faith shown by every shareholder of the Company.

Last but not least the Board wishes to place on record its deep gratitude to all its employees whose enthusiasm, team efforts, devotion and sense of belongingness has made this Company proud.

For and on behalf of the Board of Directors

H. V. Goenka

Chairman

Place: Mumbai

Date: April 30, 2014


Mar 31, 2013

To the Members of KEC international Limited

The Directors have pleasure in presenting the Eighth Annual Report, along with the audited accounts of the Company, for the year ended March 31, 2013.

1. FINANCIAL RESULTS

Rs. in crore

Particulars Consolidated Standalone

FY 13 FY 12 FY 13 FY 12

Net Revenue from Operations 6,979.49 5,814.74 5,592.08 4,604.33

EBiTDA 381.40 471.32 231.09 340.42

Finance Cost 194.40 159.74 164.81 133.71

Depreciation & Amortisation 56.08 47.92 43.05 36.05

Profit Before Tax 146.83 324.31 43.74 254.81

Tax Expenses 81.79 115.01 39.18 72.98

Profit After Tax 65.04 209.30 4.56 181.84

Proposed Dividend on equity 15.22 35.86 15.03 35.86 shares (including tax on dividend)

Transfer to General Reserve 4.56 18.18 4.56 18.18

2. DIVIDEND

The Board of Directors has recommended a dividend of Rs. 0.5 per equity share of Rs. 2 each for the year ended March 31, 2013, on the equity share capital of the Company, aggregating to Rs. 12,85,44,185 (Rupees twelve crore eighty five lacs forty four thousand one hundred and eighty five only). The dividend on equity shares is subject to the approval of the members at the ensuing Annual General Meeting.

3. PERFORMANCE

Financial Performance

On a consolidated basis, the net revenue from operations increased by 20.03% to Rs. 6,979.49 crore. The net profit decreased by 68.92% to Rs. 65.04 crore. On a standalone basis, the net revenue from operations increased by 21.45% to Rs. 5,592.08 crore, while the net profit was Rs. 4.56 crore in FY 13, as compared to Rs. 181.84 crore in FY 12.

The drop in profit was the result of a combination of factors, including a challenging business environment in all key markets of the Company. The infrastructure sector saw muted investment, mainly due to environmental clearances and land acquisition issues. in power sector, the slowdown continued due to ongoing fuel linkage issues. The other major challenges faced by the Company include weakening of indian rupee, political turmoil in some of the markets where the Company operates, right-of-way issues, high interest rates, commodity price fluctuations and cost & time overruns in some of the projects. The new businesses of Railways and Water are in a nascent stage and hence, absorbed developmental costs leading to negative margins. In Power Systems, profits were also impacted due to poor margins in the sector. All these factors affected the Company''s margins during the year.

During the year under review, several measures have been taken for better management of working capital and to secure new orders across various businesses and geographies. The order intake for the year increased by 20% to Rs. 7,484 crore. The closing order book has increased by 10.48% to Rs. 9,470 crore by FY 13 end.

Operational highlights

The key highlights for the Company''s various businesses are as follows:

Power Transmission - This continues to be the Company''s largest business division with operations spanning across most regions of the world. The division undertakes turnkey Engineering, Procurement and Construction (EPC) projects involving design, manufacture, test, supply and erection of transmission lines upto 1,200 kV. it has an in-house design and engineering team, tower manufacturing and testing facilities spread in india and the Americas.

During the year, the Company completed many projects. Among them, those in india, Egypt, Georgia and Nigeria were successfully executed despite diverse and challenging terrains and difficult climatic conditions. The Company has also increased its market share in india. The total order intake for the year from this business has increased from approximately Rs. 4,400 crore to Rs. 5,564 crore.

Power systems - The division offers complete turnkey solutions, from concept to commissioning, for air-insulated and gas-insulated substations and distribution lines.

This business has expanded its international presence by securing orders in Kenya, Uganda, The Philippines and Nepal. The Company had earlier secured a large project in Kazakhstan and achieved significant progress during the year. Further, it also secured first 765 kV gas-insulated substation project in india.

Cables - The Company has commenced commercial production of High Tension (upto 33 kV) and Extra High

Voltage (upto 220 kV) power cables at its greenfield manufacturing facility in Vadodara, Gujarat. it is a world class manufacturing facility with state-of-the-art equipments matching global standards. Consequent upon the commencement of the new plant, production at the Thane unit has been scaled down. The complete range of products manufactured at Thane plant is now being manufactured at the Vadodara plant.

Telecom - Installation of optical fiber networks and telecom towers drive the Company''s telecom business. it receives majority of its business from india. Telecom sector in the country continues to witness lower demand for new telecom towers. However, during the year, the division secured projects for establishing telecom cables networks in india.

Railways - Presently, the Company''s business comes mainly from conventional railway projects. The Company is an integrated player that undertakes projects related to civil and track works, electrification and signalling works.

The Company marked its entry in Turkmenistan by securing an order worth Rs. 192 crore. This was the largest ever order in this business. Besides, it also secured Rs. 162 crore order in india. Presently, two dedicated freight corridors are being developed in India. The Company is pre-qualified in various portions of these projects and is further looking to contribute in nation building by actively participating in this opportunity.

Water - india''s water sector is experiencing strong demand drivers. The Government of india allocates funds for developing water-related infrastructure projects in two areas viz. water resource management, and water and wastewater treatment. The Company focuses on opportunities in both the areas. The division secured its first sewage treatment project worth Rs. 194 crore during the year. it is already executing various projects related to canal construction.

Expanding Capacities

SAE Towers, the US-based wholly owned subsidiary, is expanding its pole production capacity at its existing facility in Mexico from 5,000 MTs to 12,000 MTs per annum. The main objective of this expansion is to cater to the increasing demand for poles in North America. in addition to this, the Company is also increasing its tower manufacturing capacity at its existing facilities in Jaipur, Jabalpur and Nagpur from 1,74,000 MTs to 2,11,200 MTs per annum.

Exploring new opportunities

The Company is looking for relevant opportunities in Solar and Wind EPC space. Globally, there is an increasing focus on power generation through renewable energy and currently, it is the fastest growing source of energy consumption. The Company is well poised to leverage its global network and strong EPC experience in power infrastructure to make a successful entry.

4. LISTING

The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of india Limited and the stipulated listing fees for FY 14 have been paid to both the Stock Exchanges.

5. FIXED DEPOSITS

The Company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act, 1956, and the Rules framed there under.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the prescribed format as an annexure to this Report.

7. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

in compliance with Clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate section on Management Discussion and Analysis, as approved by the Board of Directors, which includes details on the state of affairs of the Company as required to be disclosed in the Directors'' Report forms a part of this Annual Report. Further, the Corporate Governance Report, duly approved by the Board of Directors, together with a certificate from the Statutory Auditors confirming the compliance with the requirements of Clause 49, also forms a part of this Annual Report.

8. SUBSIDIARY COMPANIES

At the beginning of FY 13, the Company had twenty direct and step down subsidiary companies. Two step down subsidiary companies, one in Brazil and one in Malaysia, have been incorporated to explore the business opportunities in EPC business. Accordingly, the number of direct and step down subsidiaries of the Company stands increased to twenty two as on the date of this Report. The details pertaining to subsidiaries are mentioned under the statement made pursuant to Section 212 of the Companies Act, 1956, which forms a part of this Annual Report.

Ministry of Corporate Affairs vide Circular No: 02/ 2011 dated February 08, 2011, has, subject to compliance with certain conditions, granted general exemption to the companies from applicability of Section 212 of the Companies Act, 1956. As per the general exemption, a statement containing brief financial details of the Company''s subsidiaries for the year ended March 31, 2013, is included in this Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company/its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company/its subsidiary(ies) at the Registered Office of the Company/ its subsidiaries.

9. CONSOLIDATED FINANCIAL STATEMENTS

in accordance with Clause 32 of the Listing Agreement entered into with the Stock Exchanges, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms part of this Annual Report. The consolidated Financial Statements have been prepared in accordance with the Accounting Standards issued by the institute of Chartered Accountants of india.

10. DIRECTORS

in accordance with the provisions of the Companies Act, 1956, Mr. S. M. Kulkarni, Mr. J. M. Kothary and Mr. P A. Makwana retire by rotation and are eligible for re-appointment at the ensuing Annual General Meeting. Mr. Kulkarni has offered himself for re-appointment. However, Mr. Kothary and Mr. Makwana have expressed their inability to stand for re-appointment. The Board of Directors does not recommend for the time being filling up the vacancy caused due to the retirement of Mr. Kothary and Mr. Makwana. The Board places on record its sincere appreciation for the valuable services rendered by Mr. Kothary and Mr. Makwana during their tenure as the Members of the Board.

The Board of Directors has appointed Mr. S. M. Trehan as an Additional Director w.e.f. October 30, 2012. Pursuant to Section 260 of the Companies Act, 1956, and Article 124 of the Articles of Association of the Company, Mr. S. M. Trehan holds office upto the date of the ensuing Annual General Meeting of the Company and is eligible for appointment as Director. The Company has received a notice under Section 257 of the Companies Act, 1956, proposing the appointment of Mr. Trehan as a Director of the Company, who will be liable to retire by rotation.

In compliance with Clause 49 IV (G) of the Listing Agreement, brief resume, expertise and other details of Directors proposed to be appointed/ re-appointed are attached along with the Notice to the ensuing Annual General Meeting.

The Board of Directors recommends to the members the appointment of Mr. S. M. Trehan and re-appointment of Mr. S. M. Kulkarni as Directors.

11. AUDITORS

Statutory Auditors

M/s. Deloitte Haskins & Sells, Chartered Accountants were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting. it is proposed to re-appoint Deloitte Haskins & Sells as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting and to authorise the Board of Directors to fix their remuneration. The Company has received a letter from Deloitte Haskins & Sells to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act. The Board of Directors recommends the re-appointment of Deloitte Haskins & Sells as the Statutory Auditors of the Company.

Branch Auditors

in terms of Section 228 of the Companies Act, 1956, the audit of the accounts of the branch offices of the Company is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors. The Board of Directors recommends to the members to pass the resolution, as stated in item No. 7 of the Notice, convening the ensuing Annual General Meeting.

Cost Auditors

The Central Government has approved the appointment of Kirit Mehta & Co., Cost Accountants, Mumbai, as Cost Auditors, for conducting Cost Audit in relation to Electrical Cables and Conductors and Steel Towers manufactured by the Company for FY 13 under The Companies (Cost Accounting Records) Rules, 2011. The Cost Audit Report and the Compliance Report for FY 12 was filed by the Cost Auditors with the Ministry of Corporate Affairs on February 04, 2013 within the stipulated time period of February 28, 2013.

12 EXPLANATION RELATING TO EMPHASIS OF MATTER IN AUDITORS'' REPORT

The Auditors of the Company, without qualifying their Report, have drawn the attention of the members as "Emphasis of Matter" in respect of provisions made in the books of accounts of the Company for payment of Commission to Non-Executive Directors exceeding 1% of net profits and payment of excess remuneration for FY 13 to the Managing Director. The Board of Directors of the Company clarifies as under:

(i) Pursuant to the approval accorded by the members of the Company vide their resolution dated July 05, 2011, the Company had made a provision of Rs. 97.55 lacs for FY 13 (previous year Rs. 880 lacs) towards payment of commission to its Non-Executive Directors, which is within the approved limit of 5% of the net profits of the Company. No payments have been made pending receipt of the approval of the Central Government.

(ii) The members of the Company, vide their resolution dated December 20, 2010, passed through Postal Ballot, approved the payment of remuneration upto maximum of 5% of the net profit of the Company. After finalisation of accounts for the FY 13, the remuneration of Rs. 180.19 lacs paid to the Managing Director was found to be in excess of the limits specified by the Companies Act, 1956. The excess payment is as a result of lower profit for the year. An application has been made to the Central Government under Section 309 (5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending such approval the Managing Director holds the excess remuneration paid in trust for the Company.

13. POLICY ON CODE OF CONDUCT AND ETHICS

The RPG Group has laid down a Code of Conduct and Ethics (Code) applicable to all the employees in RPG Group companies. The Code provides for the matters related to governance, compliance, ethics and code of conduct within the RPG Group companies. The Code, inter alia, lays down the policies on investor relations, which should be ethical, professional, transparent and investor friendly.

14. AWARDS RECEIVED DURING THE YEAR

During the year, the Company won several awards, which include the prestigious ''Top Exporter Award for the Year 2011-12'' in the Merchant Exporter category from Engineering Export Promotion Council and National Award for ''innovative Talent Development Practices'' from indian Society for Training and Development (iSTD). Details of all the Awards & Recognition received during FY 13 are mentioned on page 18 & 19 of this annual report.

15. DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2013, the applicable Accounting Standards have been followed;

(ii) such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts for the financial year ended March 31, 2013, have been prepared on a going concern basis.

16. PARTICULARS OF EMPLOYEES

in terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information, is being sent to all the members of the Company and others entitled thereto. Members who are desirous of obtaining such particulars are requested to write to the Company Secretary of the Company.

17. ACKNOWLEDGEMENT

Your Directors express their grateful appreciation for the support and cooperation received from the customers, government authorities, banks and vendors during the financial year.

Your Directors appreciate and value the trust reposed and faith shown by every shareholder of the Company.

Your Directors would also like to place on record their appreciation to the employees who, through their dedication, cooperation and support, have enabled the Company to move towards achieving its objectives.

For and on behalf of the Board of Directors

H.V. Goenka

Chairman

Place: Mumbai

Date: May 08, 2013

 
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