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Directors Report of SEPC Ltd.

Mar 31, 2017

Dear Shareholder,

The Directors present the Seventeenth Annual Report together with the Audited Financial Statements of your Company for the financial year ended 31^st March, 2017.

FINANCIAL RESULTS (Rs, in Lakhs)

	Consolidated (12 months)	Consolidated (12 months)	Standalone (12 months)	Standalone (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 income at Rs. 519.69 crores as against Rs.547.60 crores in the previous year on a standalone basis. 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 stress primarily due to delays in approval and release of enhanced limits from Banks affected the operations and the cash flows. Payment and approval delays from customers also contributed to the slower progress in terms of turnover as well.

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

During the year the Company submitted a Corrective Action Plan (CAP) to the joint lenders detailing the growth plan of the Company for the next 5 years and the future prospects.

CDR EG reviewed the CAP of the Company for the next 5 years and the growth plan and also the bankerâs decision to support the Company by converting their Working capital term loan (WCTL) of Rs 1,282 crore into equity shares and the promoterâs decision also to infuse Rs.265 crores. After receiving the lenders majority for the conversion 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% in the equity capital of the Company. The promoters also infused Rs.265 crores into the Company in February 2017. This conversion of the WCTL will enable the Company to save approx. Rs.150 crs p.a on interest from the coming financial year 2017-18 and help the Company in its cash flows.

During the year, your Company was awarded domestic orders worth over Rs.211.24 crores and overseas orders worth Rs.1707 crs. Significant orders 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	74.26
	Mugalivakkam in Chennai City.

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, SHRIRAM EPC FZE, SHARJAH	1530 .00
b.	Overseas contract for the extension of Water transmission pipeline from the Lake Victoria Water supply scheme to Tabora, Nzega and Igunga Towns (Package II) an amount of 107,760,000 USD to be executed in JV with Larsen & Toubro out of which SEPC share will be 25%	177.00

Companyâs Standalone Order Book was over Rs.1952.36 crores as at March 31, 2017 and 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. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boardâs Report.

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate, treat and Report business risks. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as well as business segments and its mitigation plans.

The business risks identified by the Company and its mitigation plans are as under:

Project Risks:

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

- Client related details such as financial closure of the project, credit worthiness and reputation of the client before even signing of the contract.

- Estimation risk like price and quantity variances, contingency provision, forex fluctuation on a periodic basis.

- Commercial risks like taxes and duties, payment terms, bank guarantee requirements

- Organizational risks like availability of technical and managerial resources, gap funding needs, consortium partners roles and responsibilities.

- Performance risk like achievability of guarantee parameters, time schedule, warranty and defect liability obligations.

- Interfacing risks like coordination with multiple agencies for approvals and clearance.

- Geographic risks like unfavorable 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, the Company is leveraging on its expertise, experience to increase market share, enhance brand equity/ 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 reinforce the 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 behavior based safety 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 2017-18 and 7.8 % in 2018-19 and is expected to retain its tag of being the fastest growing major economy shrugging off any concerns of slowdown caused by governmentâs demonetization program. The economy is expected to revert to its historical growth rate on the back of structural 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 and declining unemployment rate.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Companyâs engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and wastewater treatment plants, water and sewer infrastructure 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 a Green initiative in Corporate

Governance that allows Companies to send notices/ documents to shareholders electronically. The Green Initiative endeavors to reduce consumption of paper, in turn preventing deforestation and contributes towards a green and clean environment. In support of the initiative announced by MCA, your Company will send notices convening Annual General Meeting, Audited Financial Statements, Directors Report and Auditorsâ Report etc in electronic form in the current financial year. Your Company would like to continue the Green Initiative further and requests all shareholders to opt for electronic documents.

However, on request by any member of the Company/ Statutory Authority interested in obtaining full text of the financial statements, these documents will be made available for examination, at its registered office. On personal request by any shareholder, a physical copy of the Annual Accounts need to be provided. Pursuant to this, a statement summarizing the financial results of the Subsidiary is attached to the Consolidated Financial Statement.

SUBSIDIARY

SHRIRAM EPC FZE, SHARJAH

During the year, the Company was awarded a contract for an amount of 230 Mil USD (Rs 1530 Cr) for constructing Balance of Plant (BoP) for 1.2 MTPA Mini Mill Project in Sohar, Sultanate 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 150,000 divided into 150,000 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 now become a step down subsidiary.

ASSOCIATES

HALDIA COKE & CHEMICALS PVT. LTD (HCCL)

HCCL is engaged in the business of manufacturing, processing, importing, exporting, trading, 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 in 2015-16.

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 recommend a Dividend.

SHARE CAPITAL

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

During the year under review, the bankers have converted their Working Capital Term Loan (WCTL) of Rs 1,205 Crs into Equity. The promoters, M/s SVL Ltd. (SVL) formerly M/s Shriram Industrial Holdings Ltd, the holding Company have infused Rs.265 crores. The shareholding pattern as on 31^st March 2017 will be as under:

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

The total net worth of the Company as at 31^st March, 2017 was Rs.1577.78 crores.

DETAILS OF DEPOSITS

The Company has not accepted any Deposits covered under Section 73 of the Companies Act, 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 of Section 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 on adequate internal financial controls to ensure that the financial affairs of the Company are carried out with due diligence. Apart from Internal Audit function which scrutinizes all the financial transactions, there are also processes laid down, leading to CFO/CEO certification to Board on the adequacy of Internal Financial Controls as well as internal controls 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 eligible, offers himself for re-appointment.

EVALUATION OF BOARDâS 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 performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Risk Management Committee and Stakeholders Relationship Committee. The manner in which the evaluation 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 Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website 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 the Company under Section 149(7) of the Companies Act, 2013 (Act) stating that the Independent Directors 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 recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and other employees and their remuneration.

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 31^st March, 2017 on 23^rd May 2016, 11^th July 2016, 12^th August 2016, 15^th September, 2016, 9^th November 2016, 19^th January 2017, 8^th February 2017, and 24^th March 2017. The Audit Committee had met Four (4) times on 23^rd May 2016, 12^th August 2016, 9^th November 2016 and 8^th February 2017. The details of the said meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORSâ RESPONSIBILITY STATEMENT

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

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

b. that the Directors had selected such accounting policies as mentioned in Note No: 2 of the Financial Statements and applied them consistently and 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, 2017 and of the loss of the Company for the year ended on that date;

c. that the Directors had 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;

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 the Company and that such internal financial controls are adequate and were operating effectively.

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

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. None of the Directors had any pecuniary relationships or transactions vis-a-vis the Company other than sitting fees and reimbursement of expenses incurred, if any, for attending the Board meetings.

All related party transactions are placed before the audit committee for review and approval as per terms of the Policy for dealing with related parties. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the audit committee and the board of directors for their approval on a quarterly basis.

The policy on related party transactions as approved by the board is uploaded on the Companyâs website at the following link. http://www.shriramepc.com/Companies-Act-2013-Compliance.aspx

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMER MADE BY THE STATUTORY AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORT

The explanations/comments made by the Board relating to qualification, reservations or adverse remarks made by the Statutory Auditors and the Practicing Company Secretary in their respective reports are furnished below:

QUALIFICATIONS OF STATUTORY AUDITORS Managementâs response to Auditors qualification. Point no.4

The Company has taken recourse for recovery of amount spent on the project through legal, diplomatic and claim under credit insurance with ECGC, Further Company''s petition for award of compensation for the quantum of work done is pending with the Appellate Court in Iraq. In view of the above, Company is confident of recovering the amount spent on the project, hence no provision was made.

Point no.5

The related party is in advanced stage of negotiating with their bankers for restructuring its debts and with the business environment looking up, the Company is confident 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 and Disclosure Requirements) Regulations, 2015 relating to Website Disclosures due to non-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 23^rd February 2017 has not complied Section 110 of the Companies Act,2013 read with Rule 22 of the Companies (Management and Administration) Rules, 2014

Management response:

The erroneous omission noticed subsequently. Revised certificate received from the scrutinizer.

3. The Company has not filed Form MGT-14 for the resolution passed at the board meeting held on

11.07.2016 for enhancement of Credit facilities from IDBI Bank Ltd. from Rs.62.87 crores to Rs.79.53.

Management response:

The Company has already filed necessary application for the condo nation of delay in filing the form.

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

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

COMPOSITION OF AUDIT COMMITTEE

Pursuant to Section 177 of the Companies Act, 2013, during the year, the Audit Committee was reconstituted by the Board of Directors which consists of the following members:

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 no incidences 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 or grievances to the Audit Committee in this regard and details whereof are available on the Companyâs website.

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to Section 178 of the Companies Act, 2013, during the year, the Board had reconstituted the Nomination and Remuneration Committee consisting of the following members:

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 entrusted under the provisions of Section 178 of the Companies Act, 2013. The Company had laid out the policy on directorâs appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters 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 of the 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 Social Responsibility Committee has not been formed and no initiatives have been taken by the Company on CSR as per the Companies (Corporate Social Responsibility Policy) Rules, 2014.The Company shall comply with this requirement once the operations improve and the applicability of this provision comes into force.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

The Company has not received any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

LISTING AGREEMENT

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

AUDITORS

The Companyâs auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai hold office only till the ensuing Annual General Meeting of the Company and are not eligible for reappointment from the financial year 2017-18 as they have completed their term of 10 years.

M/s MSKA & Associates (formerly known as MZSK And Associates), Chartered Accountants, Firm Registration Number 105047W have given their consent to be appointed as Statutory Auditors of the Company for a period of 5 years from the ensuing Annual General Meeting in place of the retiring 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) was appointed as Cost Auditor of the Company for the financial year 2017-18 on a remuneration of Rs.50,000/-. In terms of the Act and Rules referred above the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification.

Accordingly, a resolution seeking memberâs ratification for the remuneration payable to Mr. G Sundaresan, CMA, Cost Auditor is included at Item No.4 of the notice convening the Annual General Meeting.

Secretarial Audit

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

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

Accordingly, a Resolution seeking memberâs ratification for the remuneration payable to Messrs R Sridharan & Associates, a firm of Company Secretaries in Practice is included 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, is attached and forms part of this report.

CORPORATE GOVERNANCE

All material information was circulated to the directors before the meeting or placed at the meeting, including minimum information required to be made available to the Board as prescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of the Listing 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 confirming the compliance 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 to this report.

PROTECTION OF WOMEN AT WORK PLACE

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed off during 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 exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act,

2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014, is given below:

Earnings in Foreign Currency: 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 Expenses	157.84
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 MGT 9 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 employeesâ remuneration as per Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed to and forms part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with Section 129(3) of the Companies Act, 2013 and relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report. Further, a statement containing the salient features of the financial statement of the subsidiary in the prescribed format AOC-1 is appended to the Directors Report. The statement also provides the details of performance and financial position of the 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 their continued support even during these testing period and also the customers and suppliers for their continued cooperation. Lastly, the Directors also places on record their appreciation to all employees at all levels for their commitment and their contribution.

For and on behalf of the Board

T Shivaraman R Sundararajan

Managing Director & CEO Director

30^th May 2017 Chennai

Mar 31, 2016

Dear Shareholder,

The Directors present the Sixteenth Annual Report together with the Audited Financial statements of your Company for the Financial Year ended 31^st March 2016.

FINANCIAL RESULTS

Rs.in Lakhs

	Consolidated (12 months)	Consolidated (12 months)	Standalone (12 months)	Standalone (12 months)
	2015-16	2014-15	2015-16	2014-15
Total Income	66,062.84	66,900.47	66,062.84	66,900.81
Profit before Interest, Depreciation, tax and extraordinary items	14,126.34	5,403.63	14,134.95	5,427.60
Interest & depreciation	27,823.42	30,689.16	27,823.42	30,689.16
Profit before tax & before extraordinary items	(13,697.08)	(25,285.53)	(13,688.47)	(25,261.56)
Provision for taxation	-	23.61	-	23.61
Profit after tax & extraordinary items	(20,404.46)	(25,309.14)	(24,403.07)	(25,285.17)
Balance brought forward from last year	(8,3453.18)	(56,842.34)	(74,662.49)	(49,331.46)
Profit available for appropriation	(20,404.46)	(26,519.11)	(24,403.07)	(25,239.31)
Transfer to general reserves	-	-	-	-
Surplus carried forward	(1,03,857.64)	(83453.18)	(99,065.56)	(74,662.49)

OPERATING RESULTS & PERFORMANCE

During the Financial Year ended March 31, 2016 the Company had recorded a total income at Rs.660.62 crores as against Rs. 669 crores in the previous year on a standalone basis. Loss before tax and extraordinary items was at Rs. 136.88 crores.

Loss after tax was at Rs.244.03 crores compared to a loss in the previous year of Rs. 252.85 crores.

BUSINESS HIGHLIGHTS

During the past year, the operations of the Company continued to be under some stress due to the business environment. Payment and approval delays from customers as well as delays in approval and release of enhanced limits from Banks affected the operations and the cash flows.

CAPITAL INFUSION

During the year, as a part of the Corporate Debt Restructuring scheme, the lenders had opted to convert their Funded Interest Term Loan and their Sacrifice amount into Equity Shares. Consequently, the Bankers'' shareholding in the Company had increased to 42% of the outstanding equity as on 31^st March, 2016. The promoters have also infused Rs.389 crores as equity into the Company. This was used for redemption of preference shares and repayment of unsecured loan of Rs.89 crores. The promoter''s shareholding as on 31^st March, 2016 was 50.03%.

A few banks converted a part of their WCTL into equity before March 2016 and other bankers are also approaching their sanctioning authorities for approval of the same.

During the year, your Company was awarded orders worth over Rs.1100 crores. Water and Infrastructure division received orders for Rs. 668 crores and Process & Metallurgy division Rs.350 crores. Significant orders include the following:

Process & Metallurgy

Rs. in crs

Supply, Erection, Testing and Commissioning of
Steel Melt Shop and Continuous Casting Shop to	352.00
produce 615000 TPA capacity of Steel Billets at	352.00
New Gummidipoondi, Chennai

Water and Infrastructure projects
a. Rehabilitation of Trunk Sewer in Varanasi by Trenchless Technology	83.68
b. Supply and installation of the Zero Liquid Discharge Effluent Treatment Plant at Ennore	28.42
c. Providing UGD facilities to further extension of Anjanapura, BDA Layout.	14.61
d. Design and Construction of Intake Wells and Water Distribution System for Rural Water Supply in Districts, Jharkand	137.47
e. Design, Build and Operate Sewerage Network and Sewage Treatment Plant for Byadgi Town, Municipality in Karnataka	64.49
f. Road Work of NH-43 Kanker to Bedma Section in the State of Chhattisgarh under NHDP - IV on EPC basis	308.77

Company''s Standalone order book was over Rs.2298 crores as at March 31, 2016.

BUSINESS RISK MANAGEMENT

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate, treat and Report business risks. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as well as business segments and its mitigation plans.

The business risks identified by the Company and its mitigation plans are as under:

Project Risks:

In the context of the projects being executed, the Company reviews the risks associated with 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.

- Estimation risks like price and quantity variances, contingency provision, forex fluctuation on a periodic basis.

- Commercial risks like taxes and duties, payment terms, bank guarantee requirements

- Organizational risks like availability of technical and managerial resources, gap funding needs, consortium partners roles and responsibilities.

- Performance risk like achievability of guarantee parameters, time schedule, warranty and defect liability obligations.

- Interfacing risks like coordination with multiple agencies for approvals and clearances.

- Geographic risks like unfavorable weather conditions, earth quake, floods etc.

Above key risks are closely tracked for timely mitigation.

Competition Risks:

The Infrastructure Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience to increase market share, enhance brand equity / visibility and enlarge product portfolio and service offerings.

Occupational Health & Safety (OHS) Risks:

ECONOMIC SCENARIO AND OUTLOOK

Global growth disappointed again in 2015, slowing to 2.4 percent, and is expected to recover at a slower pace than previously envisioned. The GDP (Gross Domestic Product) growth in India dipped marginally this year as expansion in public investment weakened under fiscal constraints. Private corporations continuing to deleverage. Private sector capex continued to be very limited. The weak balance sheets of public sector banks hampered lending and growth prospects.

The medium term to long term growth prospects look positive in view of the Government of India taking significant initiatives to boost the infrastructure sector. The Government of India planning to launch the National Infrastructure Investment Fund (NIFF) is a big step forward.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Company''s engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and wastewater treatment plants, water and sewer infrastructure and pipe rehabilitation.

The order backlog was over Rs.2298 crores as on March 31, 2016.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced a Green initiative in Corporate Governance that allows Companies to send notices/documents to shareholders electronically. The Green Initiative endeavors to reduce consumption of paper, in turn preventing deforestation and contributes towards a green and clean environment. In support of the initiative announced by MCA, your Company will send notices convening Annual General Meeting, Audited Financial Statements, Directors Report and Auditors'' Report etc in electronic form in the current Financial Year. Your Company would like to continue the Green Initiative further and requests all shareholders to opt for electronic documents.

However, on request by any member of the Company/Statutory Authority interested in obtaining full text of the financial statements, these documents will be made available for examination, at its registered office. On personal request by any shareholder, a physical copy of the Annual Accounts need to be provided. Pursuant to this, a statement summarizing the financial results of the Subsidiary is attached to the Consolidated Financial Statement.

SUBSIDIARY SHRIRAM EPC FZE, SHARJAH

The Company had formed a 100% subsidiary in the name of Shriram EPC FZE, Sharjah at Sharjah Airport International Free Zone, which will facilitate the Company in procuring overseas contracts in the Middle East & Africa. This is in line with the management''s strategy to embark into overseas market.

The Company is hopeful of increasing the business activity in the said subsidiary in the coming years.

ASSOCIATES

HALDIA COKE & CHEMICALS PVT. Limited (HCCL)

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

The last year for HCCL continued to be extremely tough due to the general economic scenario.

During the year 2015-16, HCCL recorded a turnover of Rs 39.66 crores compared to Rs 545.92 crores in 2014-15.

DIVIDEND

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

SHARE CAPITAL

The paid up Equity Share Capital as on March, 31 2016 was Rs.330.62 Crores. During the year under review, M/s SVL Limited. (SVL) formerly M/s Shriram Industrial Holdings Limited, the holding Company infused Rs.389 crores, which was used for redeeming the Preference shares of Rs.300 crores and the balance to repay the unsecured loan in the Company. As per one of the clauses in the CDR scheme, majority of the banks opted to convert their Funded Interest Term Loan (FITL) and Sacrifice amount into equity at Rs.32.98 per share and Rs.40.05 per share respectively. Further, in the later part of the year, some bankers also decided to convert a portion of their Working Capital Term Loan (WCTL) into equity, which was at Rs.32.98 per equity share, allotment of which was completed before March, 31 2016. The shareholding of the Company as on 31^st March, 2016 is promoters holding at 50.03% and the bankers holding at 42.1%. The total net worth of the Company as at 31^st March, 2016 was Rs.456.88 crores.

DETAILS OF DEPOSITS

The Company has not accepted any Deposits covered under Section 73 of the Companies Act, 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 of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

APPOINTMENT OF DIRECTORS

Mr. R. Sundararajan, Director (DIN: 00498404) will retire by rotation pursuant to Section 152(6) of the Companies Act, 2013 at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

RESIGNATION OF DIRECTORS

During the year, Mr. Vishal Vijay Gupta, Director (DIN: 01913013) and Mr. S. Srinivasan, Vice Chairman (DIN: 00014652) had resigned from the Board of Directors and the same was accepted by the Board with effect from 30^th July, 2015 and 13^th January, 2016 respectively.

Your Directors place on record their grateful appreciation of the valuable services rendered and contributions made by Mr. Vishal Vijay Gupta (DIN: 01913013) and Mr.S.Srinivasan (DIN: 00014652), during their tenure of office as Directors of the Company.

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 performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Risk Management Committee and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

DECLARATION BY INDEPENDENT DIRECTORS

REMUNERATION POLICY

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

NUMBER OF THE MEETINGS OF THE BOARD

The Board had met Thirteen (13) times during the Financial Year ended 31^st March, 2016 on 10^th April, 2015, 28^th May, 2015, 25^th June, 2015, 26^th June, 2015, 9^th July, 2015, 31^st July, 2015, 11^th August, 2015, 26^th August, 2015, 24^th September, 2015, 30^th September, 2015, 4^th November, 2015, 18^th December, 2015 and 11^th February, 2016. The Audit Committee had met Four (4) times on 28^th May, 2015, 11^th August, 2015, 4^th November, 2015 and 11^th February, 2015. The details of the said meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS'' RESPONSIBILITY STATEMENT

a. that in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b. that the Directors had selected such accounting policies as mentioned in Note No : 2 of the Financial Statements and applied them consistently and judgment 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 loss of the Company for the year ended on that date;

c. that the Directors had taken that 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;

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 the Company and that such internal financial controls are adequate and were operating effectively.

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

RELATED PARTY TRANSACTIONS

All related party transactions that were entered during the Financial Year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with promoters, Directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company other than sitting fees and reimbursement of expenses incurred, if any, for attending the Board meetings.

All related party transactions are placed before the audit committee for review and approval as per terms of the Policy for dealing with related parties Prior omnibus approval of the audit committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the audit committee and the board of Directors for their approval on a quarterly basis.

The policy on related party transactions as approved by the board is uploaded 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 OR DISCLAIMER MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORT

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

QUALIFICATIONS OF STATUTORY AUDITORS Management''s response to Statutory Auditors qualification.

The Company has taken recourse for recovery of amount spent on the project through legal, diplomatic and claim under credit insurance with ECGC, in addition to, injunction in force against invocation of Performance Bank Guarantee issued in favour of Governorate of Basra in Iraqi Court as well as High Court of Chennai, India. Further Company''s petition for award of compensation for the quantum of work done is pending with the Appellate Court in Iraq. In view of the above, Company is confident of recovering the amount spent on the project, hence no provision was made.

QUALIFICATIONS BY THE SECRETARIAL AUDITORS

1. The Company has not filed Form 5 INV and not disclosed the same on the website of the Company as per the provisions of Section 205C of the Companies Act,1956.

Management''s response

The Company shall undertake to file Form 5 INV once the new form is made available in the MCA website

2. The Company has not forwarded the Annual General Meeting Proceedings to the stock exchanges for the AGM held on 24.09.2015 and hence Clause 31 of the Listing Agreement has not been complied with.

Management''s response

The Company has noted the same and shall ensure in future that clause 31 of the listing agreement is complied with.

3. The Company has filed certain PAS-3 forms wrongly mentioning the number of shares, subsequently revised PAS-3 forms were filed by the Company.

Management''s response

The Company had filed a PAS 3 for allotment of shares and by oversight had mentioned the number of shares wrongly, which was duly rectified immediately by filing the revised form. The Company had also subsequently got the listing & trading approvals for the said allotment.

4. As per Regulation 108(2) of SEBI (Listing Obligations And Disclosure Requirements) Regulation, 2015 the issuer or issuing Company, as the case may be, shall make an application for listing, within twenty days from the date of allotment, but the Company has filed few Listing Applications to stock exchanges beyond the 20 days'' time limit.

Management response

The Company had filed a particular listing application with the Stock Exchange beyond the statutory limit. However, the Company had provided a proper explanation for the delay in filing the listing application to the Stock Exchanges. The Company had also subsequently got the listing and trading approvals for the said applications.

MATERIALCHANGESAND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There are no material changes or commitments affecting the financial position of the Company between the end of the Financial Year and the date of this report.

COMPOSITION OF AUDIT COMMITTEE

Pursuant to Section 177 of the Companies Act, 2013, the Audit Committee was reconstituted by the Board of Directors and consists of the following members:

1. Mr S.R. Ramakrishnan (DIN:00015839) - Chairman

2. Mr R. Sundararajan (DIN: 00498404) - Member

3. Mr. S Krishnamurthy (DIN:00140414) - Member

4. Mr. S Bapu (DIN:02541697) - Member

5. Mr. P D Karandikar (DIN:02142050) - Member

6. Ms. Chandra Ramesh (DIN:00938694) - Member

The Board has accepted the recommendations of the Audit Committee and there were no incidences of deviation from such recommendations during the Financial Year under review.

VIGIL MECHANISM

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to Section 178 of the Companies Act, 2013, the Board has constituted a Nomination and Remuneration Committee consisting of the following members:

1. Ms. Chandra Ramesh (DIN:0098694) - Chairman

2. Mr S.R. Ramakrishnan (DIN:00015839) - Member

3. Mr R. Sundararajan (DIN:00498404) - Member

The said committee has been empowered and authorized to exercise powers as entrusted under the provisions of Section 178 of the Companies Act, 2013. The Company had laid out the policy on director''s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub section 3 of Section 178 of the Companies Act, 2013.

Policy on Criteria for Board Nomination and Remuneration policy is available in the website of the 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 3 years. Hence, Corporate Social Responsibility Committee has not been formed and no initiatives have been taken by the Company on CSR as per the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company shall comply with this requirement once the operations improve and the applicability of this provision comes into force.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

The Company has not received any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

LISTING AGREEMENT

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

AUDITORS

The Company''s Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the rules framed there under for reappointment as Auditors of the Company. As required under Regulations 33(1) (d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the peer review board of the Institute of Chartered Accountants of India.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 Companies (Audit and Auditor''s Rules) Mr. G Sundaresan, CMA (Membership No: 11733) was appointed as Cost Auditor of the Company for the Financial Year 2016-17 on a remuneration of Rs.50000. In terms of the Act and Rules referred above, the remuneration payable to the Cost Auditor is required to be placed before the members in a General Meeting for their ratification.

Accordingly, a resolution seeking member''s ratification for the remuneration payable to Mr. G Sundaresan, CMA, Cost Auditor is included at Item No.4 of the notice convening the Annual General Meeting.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act,

2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs R Sridharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith.

As required under the Companies Act, 2013, the remuneration of Rs.1,00,000 payable to the Secretarial Auditor is required to be placed before the members in a General Meeting for their ratification.

Accordingly, a resolution seeking member''s ratification for the remuneration payable to Messrs R Sridharan & Associates, a firm of Company Secretaries in Practice is included 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, is attached and forms part of this report.

CORPORATE GOVERNANCE

All material information was circulated to the Directors before the meeting or placed at the meeting, including minimum information required to be made available to the Board as prescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of the Listing Regulations.

PROTECTION OF WOMEN AT WORKPLACE

The Company has formulated an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

The following is the summary of sexual harassment complaints received and disposed off during the year 2015-16.

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 exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014, is given below:

Earnings in Foreign Currency: Nil

Expenditure in Foreign Currency: Rs. 735.70 lakhs

Rs. in lakhs

Travelling and Conveyance	41.53
Professional and Consultation Fees	508.26
Erection, Construction & Operation Expenses	28.32
Others	157.59
Total	735.70

EXTRACT OF ANNUAL RETURN

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 the Companies (Appointment & Remuneration of Managerial Personnel) Rules,

2014 is annexed to and forms part of this report.

CONSOLIDATED FINANCIAL STATEMENTS

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the Company for their continued support even during these testing period. Further the Directors also wish to thank the customers and suppliers for their continued cooperation and support. The Directors further wishes to place on record their appreciation to all employees at all levels for their commitment and their contribution.

For and on behalf of the Board

Place: Chennai S R Ramakrishnan

Date: 23^rd May 2016 (DIN:00015839) Chairman

Mar 31, 2015

Dear Shareholder,

The Directors present the Fifteenth Annual Report together with the accounts of your Company for the financial year ended 31st March 2015.

FINANCIAL RESULTS

Rs,in Lakhs

Consolidated Consolidated Standalone Standalone (12 months) (9 months) (12 months) (9 months) 2014-15 2013-14 2014-15 2013-14

Total Income 55,868.64 52,186.72 55,868.64 52,186.72

Profit before Interest, Depreciation, tax (5628.20) (23,089.68) (5604.57) (23031.41) and extraor- dinary items

Interest & depreciation 19,657.33 19,512.87 19,656.99 19,512.71

Profit before tax & before extra- (25,285.53) (42,602.55) (25,261.56) (42,544.12) ordinary items

Provision for taxation 23.61 1,392.84 23.61 1,392.84

Profit after tax & extraor dinary items (25309.14) (43,995.39) (25,285.17) (43,936.96)

Balance brought forward from last (56,864.34) (7447.38) (49331.46) (5,394.50)

year Profit available for appropri ation (26,519.11) (51,863.16) (25,239.31) (49,331.46)

Transfer to general reserves -

Surplus carried forward (83,453.17) (56,864.34) (74,662.49) (49,331.46)

OPERATING RESULTS & PERFORMANCE

Your Directors report that during the financial year ended 31st March 2015 the Company recorded a total income at Rs. 55,868.64 Crores (12 months) as against Rs.52,186.72 Crores in the previous year (9 months) on a standalone basis. Loss before tax and extraordinary items was at Rs.25,261.56 crores.

Loss after tax was at Rs.25,285.17 crores compared to a loss in the previous year of Rs.43,936.96 crores. The last 2 years figures cannot be compared directly as the current financial year is for a period of 12 months and the figure last year was for a period of 9 months.

Your Company's Standalone Order Book was Rs.1600.32 crores as at March 31, 2015.

BUSINESS HIGHLIGHTS

Your Directors state that last year the Company had undergone difficult times due to the business environment, cash flows, delay from customers in terms of receiving payments. In view of this, the Company had approached the bankers for restructuring its debts. The Corporate Debt Restructuring Group had also accorded approval for the Company to restructure its debts by providing 2 years moratorium and the loan to be repaid in 8 years. This process had taken the entire first half of the financial year which greatly affected the business and turnover of the Company.

During the year, your Company was awarded projects primarily in water worth more than Rs.96 crs and these are from:

1. M/s.City Municipal Council, Harihar- Execution of the Expansion of Sewerage system in Harihara City- Rs.62.75 crs

2. M/s.Kerala Feeds Ltd., Kerala- Design and Engineering/ Supply/ Erection, Testing and Commissioning of all Structural, Mechanical, Electrical and Instrumentation equipments / works for 500 TPD Cattle Feed Plant at Thodupuzha, Idukki. -Rs.33.33 crs

ASSOCIATES

HALDIA COKE & CHEMICALS PVT. LTD (HCCL)

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

The last year for HCCL has also been tough due to the general economic scenario. However, the operations at various plants have almost stabilized and we expect things to improve in the coming months.

During the year 2014-15, HCCL recorded a turnover of Rs.1045.65 crs compared to Rs.454.96 crs in 2013-14.

SHARE CAPITAL

The paid up Equity Share Capital as on March, 2015 was Rs.86.3 Crores. During the year under review, M/s Shriram Industrial Holdings Ltd (SIHL), the holding Company infused Rs.210 crs into the Company by way of equity. As per the CDR directive, the promoters had to infuse Rs.160 crs as equity capital and the same was infused by SIHL at Rs.50/- per share inspite of the market price being Rs.33/- per share. Further an additional Rs.50 crs was infused by the promoters to repay an unsecured loan, which enabled the Company to shore up its net worth. This infusion of the promoters resulted in their holding going to 69.87% on the enlarged equity share capital of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

ECONOMIC SCENARIO AND OUTLOOK

Indian economic growth in 2014 rose to ~5.2% from 4.7% last year as a result of the improving macro-economic situation. The wholesale and consumer price inflation has fallen to ~4.2% and 7.4% from last year's 6.3% and 10.1% on the back of a strong base effect. Falling oil prices, lower food and commodity prices and the proactive measures taken by the Government helped in containing inflation in 2014. Contrary to expectations, agricultural growth was strong at ~4.5% in 2014. However, the slow pace of reforms, lack of impetus for infrastructure projects, high interest rates and tightening of fiscal policies adversely impacted the capital goods sector. Industrial production / output was also sluggish.

The low economic growth appears to have bottomed out and a gradual increase in economic activity is expected in 2015. The medium term to long term growth prospects look positive in view of the Government's determination to bring in reforms. For the year 2015, the economy is expected to grow at a higher rate than in 2014. The long term prospects for the economy is optimistic.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Company's engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and wastewater treatment plants, water and sewer infrastructure and pipe rehabilitation.

The order book was Rs.1600.32 crores as on March 31, 2015.

DIVIDEND

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

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced a Green initiative in Corporate

Governance that allows Companies to send notices/documents to shareholders electronically. The Green Initiative endeavors to reduce consumption of paper, in turn preventing deforestation and contributes towards a green and clean environment. In support of the initiative announced by MCA, your Company will send notices convening Annual General Meeting, Audited Financial Statements, Directors Report and Auditors' Report etc in electronic form in the current financial year. Your Company would like to continue the Green Initiative further and requests all shareholders to opt for electronic documents.

However, on request by any member of the Company/ Statutory Authority interested in obtaining full text of the financial statement, these documents will be made available for examination, at its registered office. Pursuant to this, a statement summarizing the financial results of the Subsidiary is attached to the Consolidated Financial Statement.

ESOPs

The details required to be provided in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme- 2006 and the Shriram EPC Employee Stock Option Scheme- 2007 are given below:

Sl No Particulars ESOP Scheme 2006 ESOP Scheme 2007 Date of Grant 22-11-2006 22-11-2007

1 Total number of options granted 1640161 180000

2 Exercise price Rs,10/- Rs,10/-

3 Number of options vested 142309 48700

4 Number of options exercised 66885 15000

5 Total number of shares arising as a result of exercise of options

6 Number of options lapsed 3219 6600

7 Number of options forfeited

8 Variation in terms of options

9 Money realized by exercise of options

10 Total number of options in force as on 31st March 2015 - 250

11 Grant to Senior Management - - Number of options

Vesting period

12 Any other employee who - - received a grant in any one year of options amounting to 5% or more of options granted during the year

Identified employees who were granted options, during any one year

13 equal to or exceeding 1% - - of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

No further shares were issued pursuant to exercise of options under the Shriram EPC Employee Stock Option Schemes and consequently there is no dilution of EPS during the period under consideration.

DIRECTORS

Mr. S Krishnamurthy, Mr. S Bapu and Mr. P D Karandikar Independent Directors are seeking election for a consecutive period of 5 years at the ensuing Annual General Meeting.

The Company has appointed Ms. Chandra Ramesh on 23rd March 2015 as an additional Director to hold office till the ensuing Annual General Meeting.

Ms. Chandra Ramesh being an Independent Director will seek election for a consecutive period of 5 years at the Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

RE - APPOINTMENT OF MANAGING DIRECTOR & CEO AND JOINT MANAGING DIRECTOR

The Board at its Meeting held on 11th August 2015 had approved, subject to the approval of shareholders, the reappointment of Mr. T Shivaraman as the Managing Director & CEO and Mr. Amjat Shariff as the Joint Managing Director of the Company for a further period of 3 years from 20th September 2015. The shareholders' approval will be sought in the ensuing Annual General Meeting for their re-appointment on the same terms and conditions of remuneration as was paid to them earlier. The necessary Resolution for the approval of the same will be covered in the Notice convening the forthcoming Annual General Meeting.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

REMUNERATION Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Remuneration Policy is stated in the Corporate Governance Report.

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 9 Board Meetings and 4 Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD AUDIT COMMITTEE

The Company has constituted an Audit Committee as per the provisions of the Companies Amendment Act, 2000 and under Section 292 A of the Companies Act, 1956 at the Board Meeting held on 5th June 2002. The present members of the Committee are as follows:

1. Mr S.R. Ramakrishnan

2. Mr R. Sundararajan

3. Mr. S Krishnamurthy

4. Mr. S Bapu

The Committee has met 4 times during the year.

HUMAN RESOURCES

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

The Company's HR processes are systemized such as hiring and on-boarding, fair transparent online performance evaluation and talent management process, state-of-the-art workmen development process, and market aligned policies.

BUSINESS RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.

The key business risks identified by the Company and its mitigation plans are as under:

Project Risks:

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

- Client related details like financial closure of the project, creditworthiness and reputation of the client etc before even signing of the Contract.

- Estimation risk like Price and quantity variances, contingency provision, forex fluctuation etc on a periodic basis.

- Commercial Risks like Taxes and duties, Payment terms, Bank Guarantee requirements etc

- Organizational Risks like availability of Quality technical Managerial resources, Gap funding needs, Consortium partners roles and responsibilities , etc

- Performance Risk like clarity about scope of work, applicable standards of performance, Meeting the time schedule, LD clauses, Warranty and defect liability obligations etc,

- Interfacing Risks like coordination with multiple Agencies for approval clearance etc from Design stage to Commissioning stage.

- Geographical related risks like unfavorable conditions of weather, Earth quake, and Floods.

Competition Risks:

The Infrastructure Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience to increase market share, enhance brand equity / 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 reinforce the 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 behavior based safety training program, Visible Safety Leadership program, Logistics Safety program etc.

INTERNAL CONTROL Systems AND THEIR Adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

RELATED Party TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval if necessary, of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a certificate from the MD & CEO and the CFO. The Company has developed a Related Party Transactions policy for purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

None of the Directors has any pecuniary relationships or transactions vis-Ã -vis the Company.

AUDITORS Statutory Auditors

The Company's Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai who retire at the ensuing Annual General Meeting of the Company are eligible for re-appointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Members' attention is invited to the observation made by the Auditors under "Emphasis of Matter" appearing in the Auditors Reports.

Your Directors had, on the recommendation of the Audit Committee, appointed Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai to audit the accounts of the Company for the financial year 2015 on a remuneration of Rs.35 lakhs p.a. As required under the Companies Act, 2013, the remuneration payable to the statutory auditor is required to be placed before the Members in General Meeting for their ratification.

Accordingly, a Resolution seeking Member's ratification for the remuneration payable to Messrs Deloitte Haskins & Sells, Chartered Accountants, Chennai, Statutory Auditors is included at Item No.2 of the Notice convening the Annual General Meeting.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Mr. G Sundaresan, CMA to audit the cost accounts of the Company for the financial year 2015 on a remuneration of Rs.50000 p.a. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a General Meeting for their ratification.

Accordingly, a Resolution seeking Member's ratification for the remuneration payable to Mr. G Sundaresan, CMA, Cost Auditor is included at Item No.7 of the Notice convening the Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs R Sridharan & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith.

There were 4 observations made by the secretarial auditors in their aforementioned report in terms of certain procedures not followed by the Company based on the new Companies Act 2013. The management has ensured that these procedures have been complied with from the 2nd quarter of 2014-15 itself and the earlier lapses was due to ambiguity and uncertainty of the applicability of the new Companies Act provisions.

As required under the Companies Act, 2013, the remuneration of Rs.1 lakh p.a. payable to the secretarial auditor is required to be placed before the Members in a General Meeting for their ratification.

Accordingly, a Resolution seeking Member's ratification for the remuneration payable to Messrs R Sridharan & Associates, a firm of Company Secretaries in Practice is included at Item No.8 of the Notice convening the Annual General Meeting.

DIRECTORS' Responsibility STATEMENT

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

a. that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2015 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken 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;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Limited

Subramanian Building, V Floor

No. 1, Club House Road

Chennai 600 002, India

Tel: (91 44) 2846 0390, Fax: (91 44) 2846 0129

Email: [email protected]

Website: www.cameoindia.com

Contact Person: Mr. R.D. Ramasamy, Director

SEBI Registration Number: INR000003753

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Secretarial Auditors confirming compliance forms an integral part of this Report.

BUSINESS Responsibility REPORTING

As per Clause 55 of the Listing Agreement with the Stock Exchanges, a separate section on Business Responsibility Reporting forms an integral part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

Energy CONSERVATION, Technology ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is given below:

Earnings in Foreign Currency: Rs.10. 35 lakhs

Expenditure in Foreign Currency: Rs.11.97 crores

Travelling and Conveyance 25.23

Professional and Consultation

151.93 Fees

Erection, Construction & E 294.44

Operation expenses

Others 725.67

Total 1,197.27

CORPORATE SOCIAL Responsibility (CSR)

The Company has been incurring losses for the last 3 years. Hence, the Corporate Social Responsibility Committee has not been formed and no initiatives have been taken by the Company on CSR as per the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company shall comply with this requirement once this provision comes into force.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith.

PARTICULARS OF Employees

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the Company for their continued support even during these testing period. Further the Directors also wish to thank the customers and suppliers for their continued cooperation and support. The Directors further wishes to place on record their appreciation to all employees at all levels for their commitment and their contribution.

For and on behalf of the Board

Place: Chennai S. R. Ramakrishnan

Date : 28th May, 2015 Chairman

Mar 31, 2014

Dear Shareholders,

The Directors present herewith the Fourteenth Annual Report together with the accounts of your Company for the 9 months ended 31st March, 2014.

FINANCIAL RESULTS

Rs. in Lakhs

Consolidated (9 Consolidated (15 months) months)

2013-14 2012-13

Total Income 52,186.72 1,96,906.00

Profit/(Loss) before Interest, Depreciation, tax and (23,089.68) 31,642.50 extraordinary items

Interest & depreciation 19,512.87 47,110.23

Profit/(Loss) before tax & before (42,602.55) (15,467.73) extraordinary items

Provision for taxation 1,392.84 (4,265.63)

Profit/(Loss) after tax & (50,629.21) (26,881.60) extraordinary items

Balance brought forward from (5,394.49) 21,487.11 last year

Profit available for appropriation (50,629.21) (26,881.60)

Transfer to general reserves - -

Surplus carried forward (56,023.70) (5,394.49)

Standalone Standalone (9 months) (15 months)

2013-14 2012-13

Total Income 52,186.72 1,76,547.76

Profit/(Loss) before Interest, (23,031.41) 32,138.95 Depreciation, tax and extraordinary items Interest & depreciation 19,512.71 42,521.36

Profit/(Loss) before tax (42,544.12) (10,382.41) & before extraordinary items

Provision for taxation 1,392.84 (4,228.82)

Profit/(Loss) after tax & (43,936.96) (26,286.12) extraordinary items

Balance brought forward from (5,394.49) 20,891.62 last year

Profit available for (43,936.96) (26,286.11) appropriation

Surplus carried forward (49,331.45) (5,394.49)

OPERATING RESULTS & PERFORMANCE

Your Directors report that during the 9 months period (July-March) the company recorded a total income at Rs. 521.87 crores as compared to Rs. 1,765.48 crores in the previous year (15 months) on a standalone basis. Loss before tax and extraordinary items was at Rs. 425.44 crores as compared to Rs. 103.82 crores in the previous year.

Loss after tax was at Rs. 439.37 crores as compared to a loss in the previous year of Rs. 262.86 crores. The last 2 years figures cannot be compared as the current financial year is for a period of 9 months and the figures last year was for a period of 15 months.

Your Company''s Standalone order book was at Rs. 2,156 crores as at 31st March, 2014.

BUSINESS HIGHLIGHTS

Your Directors state that last year the Company had undergone tough times due to the business environment, cash flows, delay from customers in terms receiving payments. However, during the period your company was awarded contracts primarily in water projects, worth more than Rs. 800 crores from prestigious clients besides repeat orders. Some of the project awards are as under:

* PHED, Rajasthan Rs. 92 crores -Work of Regional Water Supply Scheme for 44 villages from Sepau (Dist-Dholpur) HW under Chambal Dholpur Bharatpur Project with O&M for 10 years on Single Point Responsibility Turnkey Basis

* PHED, Kota-Rajasthan Rs. 4 7crores - Execution of the work of Intake Pumping Station, Raw Water Main, Treatment plant, 11/0.44KV sub station, Clear Water Reservoir, Clear water main, Pumping station, cluster rising mains, cluster distribution mains, cluster ESR''s with associated civil, electrical and mechanical works, village distribution system, IEC activities etc. for Shaygarh Water Supply Project on single responsibility turn key basis with 10 year O&M, District Baran.

* TWAD-Madurai Rs. 1 87crores- Providing Pumping Main of 750mm dia CI LA class pipe from the Main Pumping Station at Beach road to the Sewage Treatment Plant at Tharuvaikulam for UGSS to Thoothukudi Corporation in Thoothukudi Dist. etc

* Chennai Metropolitan Water Supply and Sewerage Board, Chennai-Rs. 87 crores- Providing Water Supply Improvement Scheme to Pallavaram Municipality covering head works, Feeder Main, UGT/OHT and Distribution System in Zones 9 to 16 (Package-II) and also Providing Water Supply Improvement Scheme to Pammal Municipality covering head works, Feeder Main, OHT and Distribution System.

* Bharath Petroleum Corporation Limited, (Kochi Refinery)- Rs. 157 crores - Civil, Structural & Underground Piping Works of FCCU for Integrated Refinery Expansion Project (IREP) of BPCL-Kochi Refinery.

* Municipal Corporation Of Brihanmumbai (Sewerage Operations Department), Mumbai- Rs. 57 crores - Rehabilitation of Sewer Lines by GRP Lines Using Trenchless Technology for Slice A and Rehabilitation of Sewer Lines by GRP Lines Using Trenchless Technology for Slice B.

* Rashtriya Ispat Nigam Limited, Visakhapatnam Steel Plant, AdministrativeBuildingVisakhapatnam- Rs. 182 crores - Sinter Machine - 1 Revamping

& Upgradation and Phase - 1 of Sinter Machine -2 Revamping & Upgradation at RINL/Vizag.

SUBSIDIARY SHRIRAM EPC FZE (SEF)

The Company had floated a 100% Subsidiary in UAE in April 2013, to explore opportunities in the overseas EPC Market.

ASSOCIATES HALDIA COKE AND CHEMICALS PVT. LTD (HCCL)

HCCL is engaged in the business of inter alia, manufacturing, processing, importing, exporting, trading, buying, selling, stocking, distributing coke (carbon), coal, and supplying to manufacturing industries like steel, copper, aluminium and to carry on the business of managing, owning, controlling, erecting, commissioning, operating plants for the above and also to act as engineering procurement and construction contractors in connection with engineering.

During the last couple of years HCCL has been going through tough times and the Company has been supporting whenever necessary. We expect the operations to stabilize in the coming years.

During the year 2013-14, HCCL recorded a turnover of Rs. 471.88 crores compared to Rs. 502.35 crores in 2012-13.

PREFERENTIAL ISSUE

During the year M/s Shriram Industrial Holdings Ltd, the holding Company infused Rs. 300 crores into the Company by way of Cumulative Redeemable Preference Shares to shore up the networth of the Company.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Company''s engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and wastewater treatment plants, water and sewer infrastructure and pipe rehabilitation.

The order book was Rs. 2,156 crores as on March 31, 2014.

DIVIDEND

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

CAPITAL STRUCTURE

During the period under review, equity share capital of your Company remained unchanged as there was no new allotment of Equity Shares under ESOP 2006 & 2007 schemes.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced a Green initiative in Corporate Governance that allows Companies to send notices/documents to shareholders electronically. The Green Initiative endeavors to reduce consumption of paper, in turn preventing deforestation and contributes towards a green and clean environment. In support of the initiative announced by MCA, your Company will send notices convening Annual General Meeting, Audited Financial Statements, Directors Report and Auditors'' Report etc in electronic form during this financial period also. Your Company would like to continue the Green Initiative further and requests all shareholders to opt for electronic documents.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement presented by the Company include the financial information of all its Subsidiary Companies prepared in accordance with the Accounting Standard (AS 21) issued by the Institute of Chartered Accountants of India.

The Government of India, Ministry of Corporate Affairs, under Section 212(8) of the Companies Act, 1956 vide Letter Ref.51/12/2007-CL-III dated 8th February, 2011 have granted exemption to all Companies from attaching the full text of the financial statements of the company''s aforesaid Subsidiaries along with the Company''s accounts from the year ended 31st March, 2011. Necessary disclosures will be made in respect of the said Subsidiary in this Annual Report apart from the statement pursuant to Section 212 of the Companies Act, 1956.

However, on request by any member of the Company/ Statutory Authority interested in obtaining full text of the financial statement, these documents will be made available for examination, at its registered office. Pursuant to this, a statement summarizing the financial results of the Subsidiary is attached to the Consolidated Financial Statement.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and outlook of the company and its business is given in the Management Discussion and Analysis Report, which forms a part of this report.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the Code of Corporate Governance as required under Clause 49 of the Listing Agreements with the Stock Exchanges. A report on Corporate Governance along with a certificate from the Auditors forms a part of this report.

ESOPs

The details required to be provided in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme- 2006 and the Shriram EPC Employee Stock Option Scheme- 2007 are given below:

Sl Particulars ESOP Scheme ESOP Scheme No 2006 2007

Date of Grant 22-11-2006 22-11-2007

1 Total number of options granted 1640161 180000

2 Exercise price Rs. 10/- Rs. 10/-

3 Number of options vested 0 0

4 Number of options exercised 0 0

5 Total number of shares arising as - - a result of exercise of options 6 Number of options lapsed 72,205 45, 650

7 Number of options forfeited - -

8 Variation in terms of options - -

9 Money realised by exercise of options - -

10 Total number of options in force as on 3,219 6,850 31st March 2014

11 Grant to Senior Management - -

Number of options - -

Vesting period - -

12 Any other employee who received a grant in - - any one year of options amounting to 5% or more of options granted during the year

13 Identified employees who were granted - - options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

No further shares were issued pursuant to exercise of options under the Shriram EPC Employee Stock Option Schemes and consequently there is no dilution of EPS during the period under consideration.

DIRECTORS

Mr. S R Ramakrishnan and Mr. R. Sundararajan, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for election for a period of 5 years.

COMMITTEES OF THE BOARD AUDIT COMMITTEE

The Company has constituted an Audit Committee as per the provisions of the Companies Amendment Act, 2000 and under Section 292 A of the Companies Act, 1956 at the Board Meeting held on 05th June 2002. The present members of the Committee are as follows:

1. Mr S.R. Ramakrishnan

2. Mr R. Sundararajan

3. Mr. S. Krishnamurthy

4. Mr. S. Bapu

The Committee has met three times during the 9 months period.

PARTICULARS OF EMPLOYEES

In terms 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 employees or set out in the Annexure to this Report. However having regard to 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. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm:

* That in the preparation of the annual accounts, the applicable accounting standards have been followed;

* That they had selected such accounting policies and applied them 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 at the end of the financial year and the profit of the

company for that period;

* That they had taken proper and sufficient care 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; and

* That they had prepared the annual accounts on a going concern.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Limited Subramanian Building, V Floor No. 1, Club House Road Chennai 600 002 India Tel: (91 44) 2846 0390 Fax: (91 44) 2846 0129 Email: [email protected] Website: www.cameoindia.com Contact Person: Mr. R.D. Ramasamy, Director SEBI Registration Number: INR000003753

AUDITORS

M/s Deloitte Haskins and Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the company for their continued support even in this global recession. Further the Directors also wish to thank the customers and suppliers for their continued co-operation and support. The Directors further wishes to place on record their appreciation to all employees at all levels for their commitment and their contribution.

For and on behalf of the Board Chennai R Sundararajan

27th May, 2014 Director

Jun 30, 2013

Dear Shareholder,

The Directors have pleasure in presenting the Thirteenth Annual Report together with the accounts of your company for the 15 months ended June 30, 2013.

FINANCIAL RESULTS

Rs.in Lakhs

Consolidated Consolidated Standalone Standalone (15 months) (12 months) (15 months) (12 months) 2012-13 2011-12 2012-13 2011-12

Total Income 1,96,906.00 1,89,118.86 1,76,547.76 1,40,788.59

Profit before interest, depreciation, 31,642.50 27,412.52 32,138.95 24,815.80 tax and extraordinary items

Interest & depreciation 47,110.23 24,633.30 42,521.36 20,902.51

Profit before Tax & before (15,467.73) 2,779.22 (10,382.41) 3,913.29 extra ordinary items

Provision for taxation (4,265.63) 1,487.15 (4228.82) 1362.57

Profit aftertax & extraordinary items

Balance brought forward from last 20,425.18 20,425.11 20,891.62 19,023.79 year

Profit available for appropriation (5,394.52) 23,895.58 (5,394.50) 21,574.51

Transfer to general reserves 174.05 63.77

Surplus carried forward 20,425.18 20,425.18 (5,394.50) 20,891.60

OPERATING RESULTS & PERFORMANCE

Your Directors are pleased to report that during the year (15 months) your company recorded a total income at Rs.1,765.48 crores from Rs.1407.89 crores in the previous year on a standalone basis. Loss before tax and extraordinary items was at Rs.103.82 crores.

Loss after tax was at Rs.262.86 crores compared to a profit in the previous year of Rs.25.51 crores. The last 2 years figures cannot be compared directly as the current financial year is for a period of 15 months. In addition the current year had substantial extraordinary items that are discussed in greater detail in the Management Discussion & Analysis Report.

Your Company''s Standalone Order Book was at Rs.4,060 crores as at June 30, 2013.

DIVIDEND

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

CAPITAL STRUCTURE

During the year under review, the share capital of your Company was changed/ altered as follows:

Allotment of 13,900 Equity shares of Rs.10 each fully paid up under ESOP 2006 & 2007 schemes.

ABRIDGED ACCOUNTS

SEBI has vide its Circular no. SEBI/CFD/DIL/LA/2/2007/26/4 dated 26.4.2007 allowed listed Companies to send Abridged Annual Report to the shareholders in line with the requirement stipulated under Section 219(l)(b)(iv) of the Companies Act, 1956. Accordingly, an abridged balance sheet is sent to the shareholders of the Company. Any shareholder interested in having a copy of the complete and full Balance Sheet and Statement of Profit and Loss may write to the Company Secretary at the Registered Office of the Company. The detailed Balance Sheet and Statement of Profit and Loss will also be available for inspection at the Registered Office of the Company during working hours of the Company and also on the website of the Company (www.shriramepc.com).

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced a Green initiative in

Corporate Governance that allows Companies to send notices/documents to shareholders electronically. The Green Initiative endeavours to reduce consumption of paper, in turn preventing deforestation and contributes towards a green and clean environment. In support of the initiative announced by MCA, your Company will send notices convening Annual General Meeting, Audited Financial Statements, Directors Report and Auditors'' Report etc in electronic form from the current financial year. Your Company would like to continue the Green Initiative further and requests all shareholders to opt for electronic documents.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement presented by the Company include the financial information of all its Subsidiary Companies prepared in accordance with the Accounting Standard (AS 21) issued by the Institute of Chartered Accountants of India.

The Government of India, Ministry of Corporate Affairs, under Section 212(8) of the Companies Act, 1 956 vide Letter Ref.51 /12/2007-CL-lll dated 8th February 2011 have granted exemption to all Companies from attaching the full text of the financial statements of the company''s aforesaid Subsidiaries along with the Company''s accounts from the year ended 31st March 2011.

Necessary disclosures will be made in respect of the said Subsidiaries in this Annual Report apart from the statement pursuant to Section 212 of the Companies Act, 1 956.

However, on request by any member of the Company/ Statutory Authority interested in obtaining full text of the financial statement, these documents will be made available for examination, at its registered office. Pursuant to this, a statement summarizing the financial results of a II the Subsidiaries is attached to the Consolidated Financial Statement.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and outlook of the company and its business is given in the Management Discussion and Analysis Report, which forms a part of this report.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the Code of Corporate Governance as required under Clause 49 of the Listing Agreements with the Stock Exchanges. A report on Corporate Governance along with a certificate from the Auditors forms a part of this report.

ESOPs

The details required to be provided in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme- 2006 and the Shriram EPC Employee Stock Option Scheme- 2007 are given below:

12 Any other employee who received a grant in any one year of options amounting to 5% or more of options granted during the year

13 Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

The number of shares issued pursuant to exercise of options under the Shriram EPC Employee Stock Option Schemes amounted to 13,900 shares, resulting in dilution of EPS by 0.002.

DIRECTORS

During the year Mr. Arun Duggal resigned as Director & Chairman of the Company due to his pre-occupations. The Board placed on record its appreciation for the invaluable services rendered by Mr. Arun Duggal during his tenure from 2008.

Mr. S.R. Ramakrishnan was appointed as the Chairman of your Company.

Mr. S. Srinivasan was appointed as an Additional Director on 12th February, 2013, to hold office till the ensuing Annual General Meeting.

Notice under Section 257 of the Companies Act, 1956 has been received from a member of the Company together with a deposit of Rs.500/- proposing the appointment of Mr. S. Srinivasan (Liable to Retire by Rotation) as Director of the Company.

Mr. S Bapu and Mr. P D Karandikar retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

COMMITTEES OF THE BOARD AUDIT COMMITTEE

The Company has constituted an Audit Committee as per the provisions of the Companies Amendment Act, 2000 and under Section 292 A of the Companies Act, 1956 at the Board Meeting held on 05th June 2002. The present members of the Committee are as follows:

1. Mr S.R. Ramakrishnan

2. Mr R. Sundararajan

3. Mr. S Krishnamurthy

4. Mr. S Bapu

The Committee has met five times during the year.

PARTICULARS OF EMPLOYEES

In terms of Section 21 7 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees or set out in the Annexure to this Report. However having regard to the provisions of Section 21 9(l)(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. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm:

- That in the preparation of the annual accounts, the applicable accounting standards have been followed;

- That they had selected such accounting policies and applied them 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 at the end of the financial year and the profit of the company for that period;

- That they had taken proper and sufficient care 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; and

- That they had prepared the annual accounts on a going concern.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Limited

Subramanian Building, V Floor

No. 1, Club House Road

Chennai 600 002

India

Tel: (91 44) 2846 0390

Fax: (91 44)2846 0129

Email: [email protected]

Website: www.cameoindia.com

Contact Person: Mr. R.D. Ramasamy, Director

SEBI Registration Number: INR000003753

AUDITORS

M/s Deloitte Haskins and Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the company for their continued support even in this global recession. Further the Directors also wish to thank the customers and suppliers for their continued cooperation and support. The Directors further wishes to place on record their appreciation to all employees at. all levels for their commitment and their contribution.

For and on behalf of the Board

Chennai S. R. Ramakrishanan

29th August 2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting the Twelfth Annual Report together with the accounts of your Company for the year ended 31 st March, 201 2.

FINANCIAL RESULTS RS in Lakh Consolidated Standalone

Particulars 2011-12 2010-11 2011 -12 2010-11

Total Income 1,89,118.86 1,68,741.94 1,40,788.59 1,32,523.09

Profit before interest, depreciation, tax and exceptional items 27,412.52 23,821.63 24,815.83 20,951.76

Interest & depreciation 24,633.30 16,058.01 20,902.51 13,805.28

Profit before tax & before exceptional items 2,779.22 7,763.62 3,913.32 7,146.48

Provision for taxation 1,487.15 2,791.16 1,362.57 2,521.51

Profit after tax 1,292.07 7,012.96 2,550.75 6,961.25

Balance brought forward from last year 20,425.17 13,802.01 19,023.79 12,856.72

Profit available for appropriation 24,578.50 21,219.35 21,574.54 19,817.97

Transfer to general reserves 63.77 174.05 63.77 174.05

Surplus carried forward 23,895.58 20,425.17 20,891.62 19,023.79

OPERATING RESULTS & PERFORMANCE

Your Directors are pleased to report that during the year your Company recorded a 6.24% growth in total income at Rs.1 407.89 crores from Rs.1 325.23 crores in the previous year on a standalone basis. Profit before tax at Rs.39.13 crores.

Profit after tax was at Rs.25.50 crores compared to the previous year figure of Rs.69.61 crores. The last 2 years' figures cannot be compared as we had an exceptional income of Rs.23.36 crores by sale of shares related to the restructuring of our investments in the Coke business - Ennore Coke Limited and Haldia Coke and Chemicals Pvt. Limited in the year 201 0-1 1.

Earnings per share (EPS) was at Rs.5.75 compared to Rs.1 5.80 in the previous year.

Your Company's standalone order book was Rs.2,924.1 5 crores as at 31 st March ,2012.

CAPITAL STRUCTURE

During the year under review, the share capital of your Company was changed/ altered as follows:

Allotment of 81,885 Equity shares of Rs.1 0 each fully paid up under ESOP 2006 & 2007 scheme.

BUSINESS HIGHLIGHTS

Your Directors are pleased to state that during the year your Company was awarded several prestigious projects. Some of these projects and other business initiatives taken by your Board to position the Company in its growth path as a key player in the EPC business and as a manufacturer of wind turbines are as under:

During the year the Company received the following maiororders:

1. Order from Surya Dev Steels for Unit 2 of their 2X80 MW Captive Power Plant valued atRs.362 crores.

2. An order from Abhijeet Projects Ltd. for the construction of a 50MW Solar Thermal Power Plant in Rajasthan. Your Company will execute the EPC work for the project with technical support from Ener-T International Ltd. The order is valued at Rs.640 crores and marks our entry into the emerging Solar Power market.

3. Order from Hindustan Copper Ltd. for work on the Surda Mine Project. Your Company will lead the consortium to undertake the project, which is valued at Rs.206.34 crores. This marks our entry into the Mining and Minerals sector.

4. Order for the installation of a Coke oven by-product Complex including at the 3.0 MTPA Steel Plant of NMDC at Nagarnar in Chattisgarh. The value of the order is Rs.41 1.60 crores of which the scope for your Company is Rs.260 crores.

5. Orders in the Municipal Services Segment from the Kerala Water Authority / Kerala Sustainable Urban Development / TWAD / MCGM valued at over Rs.150 crores.

The Company's Joint venture, Hamon Shriram Cottrell Pvt. Limited has an order backlog as of 31 st March, 201 2 of Rs.348.32 crores. Major orders include GAIL (India) Limited, Pata.

The Company's other Joint Venture, Leitner Shriram Manufacturing Ltd. has an order backlog as of 31 st March, 2012 of Rs.524.98 crores.

SIGNIFICANT DEVELOPMENTS

SREE JAYAJOTHI CEMENTS LTD. (SJCL)

As you are all aware the Company had undertaken an EPC Contract for Sree Jayajothi Cements Ltd. (SJCL) for setting up a 3.2 MTPA Cement Plant at Kurnool District in Andhra Pradesh. The plant has been in commercial production for the past one year and has ended this financial year with a total cement production of over 1 million tonne. The total outstanding from SJCL is approximately Rs.305 crores (Outstanding Dues). Based on an analysis of the cement industry, the Company had decided to participate in the investment potential in the cement industry and hence, with a view, to improve the SJCL's financial condition and recover its dues, the Company has converted a part of its outstanding dues into equity shares / equity linked instruments with a direct equity stake of upto an aggregate of 18.76%. An additional 49% is held by Spark Environmental Technology Limited.

The shareholders of the Company have accorded approval forthis investmentthrough a Postal Ballot

The necessary acceptance by SJCL's bankers has also been obtained.

PROPOSED RIGHTS ISSUE

During the forthcoming year, your Company is planning to raise fresh capital. The structure & nature of the capital raise is being analysed and we will keep the shareholders informed once the structure isfinalised.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Company's engineering, procurement and construction projects business, which include renewable energy projects like Biomass-based power plants, Metallurgical and Process plant projects and Municipal services projects like Water and Waste-water treatment plants, Water and Sewer infrastructure and Pipe rehabilitation.

The Standalone order book was Rs.2,924.15 crores as on 31 st March, 201 2.

Overall revenues from turnkey contracts increased by 33.73%, from Rs.957.84 crores in FY

2011 to Rs.1,280.98 crores in FY 2012 (standalone).

Your Company's Wind turbine business comprises of sale and services of 250 kw class wind turbine generators to clients.

The Wind turbine business revenue was at Rs. 113.20 crores in FY 2012 compared to Rs.1 92.61 crores in FY 2011.

The order book for the turnkey contracts as on 31 st March, 201 2 is Rs.2,772.86 crores.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statement presented by the Company includes the financial information of all its subsidiary companies prepared in accordance with the Accounting Standard (AS 21) notified by Central Government under Companies (Accounting Standards) Rules, 2006.

The Government of India, Ministry of Corporate Affairs, under Section 212(8) of the Companies Act, 1956 vide letter ref.51/12/2007-CL-lll dated 8th February 201 1 have granted exemption to all Companies from attaching the full text of the financial statements of the Company's aforesaid Subsidiaries along with the Company's accounts from the year ended 31st March, 2011.

Necessary disclosures will be made in respect of the said subsidiaries in this Annual Report apart from the statement pursuant to Section 21 2 of the Companies Act, 1956.

However, on request by any member of the Company / statutory authority interested in obtaining them, these documents will be made available for examination, at its Registered Office. Pursuant to this, a statement summarizing the financial results of all the subsidiaries is attached to the consolidated financial statement.

DIVIDEND

The Board of Directors have recommended a dividend of Rs.1.20 per share. This translates into a payout of tb. 1 9 crores including an amount of Rs.86 lakhs as Dividend Distribution Tax.

SUBSIDIARY COMPANIES AND JOINT VENTURES

SUBSIDIARIES SHRIRAM EPC (SINGAPORE) PTE. LTD.

Shriram EPC (Singapore) Pte. Ltd. is a 1 00% subsidiary of your Company.

The audited financial results of SEPC Singapore for Fiscal 2012, are set forth beiow:

(In USD, except per share data) Fiscal 2012

Sales and other income -

Profit / (Loss) after tax (106,884)

Equity capital 20,210,013

Reserves and Surplus (excluding revaluation reserves) (286,625)

Earnings / (Loss) per share (diluted) (SGD) (0.00)

Earnings / (Loss) per share (basic) (SGD) (0.00)

Net asset value 19,923,388

During the year Shriram EPC (Singapore) Pte. Ltd. has made a loss of US dollars 1 06,884.

BLACK STONE GROUP TECHNOLOGIES PVT. LTD. (BGT)

BGT which had been set up as an engineering outsourcing outfit in Chennai in 1 993 acts as Engineering outfit of the Group with 200 strong technical staff.

The Company holds 55% in the equity stake of BGT.

BGT along with its subsidiary has reported a consolidated turnoverof Rs.1 8.72 crores in the year201 1-12 compared to Rs. 1 3.1 0 crores in the previous year 201 0-11. During last year, BGT saw the beginning of a recovery in its main market for engineering services - the USA. This has resulted in a modest increase in order inflows and corresponding increase in margins. We look forward to continue this trend in this year also.

JOINT VENTURES HAMON SHRIRAM COTTRELL PRIVATE LIMITED (HSCL)

The Company's joint venture Company, HSCL has reported significant growth. The turnover of HSCL has increased from Rs.158.00 crores in 2011 to Rs.21 7 crores in 201 2, an increase of 37 %.

The major orders received by HSCL during the year are:

GAIL (India) Limited, PATA - 1- Utility Cooling Tower & Cooling Tower Water Treatment Plant

for GAIL Petrochemical. Rs.75 crores

GAIL (India) Limited, PATA - 2 Rs.35 crores

Reliance Industries Limited Rs.1 0 crores

In the year under review, HSCL decided to exit the Air Pollution Control business and focus on the market for Cooling Systems.

In order to reflect the joint venture status of HSCL, your Company is consolidating HSCL on a proportionate basis as a JV.

LEITNER SHRIRAM MANUFACTURING LIMITED (LSML)

LSML is a joint venture focussed on the manufacture and installation of wind turbines.

This year has been a very difficult year for LSML due to a dramatic increase in the price of Neodynium magnets which are a critical component of the generators. The price increase was to the extent of 300% due to supply constraints from the only source - China. This significantly affected margins and forced the Company to reduce its output and decline contracts that were not viable at these prices. Magnet prices have subsequently corrected and new sources should shortly enterthe market.

LSML has also started operations in the States of Maharashtra & AP and we are confident that LSML during the coming year will perform better with increased order book and newer products, which are undertesting.

MAJOR ACHIEVEMENTS DURING THE YEAR

- Successfully completed the first major export order to Sri Lanka for 1 0.5 MW to Power Gen Lanka P Ltd. - USD 1 2.90 million.

- Commenced execution of 93.6 MW order from Beta Wind farms at Tadipatri with the new WEG model LTW 80 1.8.

- Successfully completed erection and commissioning WEG for 100 MW in India since inception.

- Prototype for a new variant of the 1.5 MW turbine as well as a 2MW turbine were installed at Sivagnanapuram, Tamil Nadu, and are undertesting forcertification.

- Blade Plant expansion for doubling capacity for production of rotor blades is completed.

LSML order book position from various clients like PPS Enviro, TVH, Power Gen Lanka and OGPL is Rs.524.98 Crores.

During the year under review, LSML has reported a turnover of Rs.721 crores as compared to Rs.550 crores during the year 2010-1 1 with a loss of Rs.28.75 crores as compared to a profit of Rs.4.20 crores during the year201 0-11.

ASSOCIATES HALDIA COKE & CHEMICALS PVT. LTD. (HCCL)

HCCL is engaged in the business of inter alia, manufacturing, processing, importing, exporting, trading, buying, selling, stocking, distributing coke (carbon), coal and supplying to manufacturing industries like steel, copper, aluminium and to carry on the business of managing, owning, controlling, erecting, commissioning, operating plants for the above and al so to act as engineering procurement and construction contractors in connection with engineering.

During the year under review, HCCL has reported a turnover of Rs.1 479.67 crores with a profit after tax of Rs.1 23.38 crores.

SHRIRAM SEPL COMPOSITES PVT. LTD. (SSEPL)

SSEPL is an associate for manufacture of specialised GRP pipes and liners. SSEPL had received significant orders during the year with an order from Hinduja National Power Corporation Limited for a total order value of Rs.23 crores. The order backlog as on March 2012 is over Rs.45 crores.

The turnover during the current year was relatively stagnant since the new orders were received only in the second half of the year. We expect a significant increase in turnover during the forthcoming year.

The consolidated turnover of SSEPL during the current financial year has been Rs.7.17 crores against the previous year figure of Rs.9.20 crores and a loss of t7.1 0 crores against the previous yearfigure of loss of (Rs.8.1 9 crores).

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and outlook of the Company and its business is given in the Management Discussion and Analysis report, which forms a part of this report.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the Code of Corporate Governance as required under Clause 49 of the Listing Agreement with the Stock Exchanges. A report on Corporate Governance along with a certificate from the Auditors forms a part of this report.

ESOPs

The details required to be provided in terms ofthe Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1 999 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme - 2006 and the Shriram EPC Employee Stock Option Scheme - 2007 are given below:

SI. ESOP Scheme ESOP Scheme No. Particulars 2006 2007

Date of Grant 22-11-2006 22-11-2007

1 Total number of options granted 16,40,161 5,00,000

2 Exercise price Rs10/- Rs10/-

3 Number of options vested 1,42,309 48,700

4 Number of options exercised 66,885 15,000

5 Total number of shares arising as a result 66,885 15,000 of exercise of options

6 Number of options lapsed - -

7 Number of options forfeited - -

8 Variation in terms of options - -

9 Money realised by exercise of options 6,68,850 1.50,000

10 Total number of options in force as on March 31, 2012 75,424 58,400

11 Grant to Senior Management - -

- Number of options

- Vesting period

12 Any other employee who received a - - grant in any one year of options amounting to 5% or more of options granted during the year

13 Identified employees who were - -

granted options, during any one year equal to or exceeding 1 % of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

The number of shares issued during the year pursuant to exercise of options under the Shriram EPC Employee Stock Option Schemes amounted to 81,885 shares, resulting in dilution of EPS by 0.01 %

CORPORATE SOCIAL RESPONSIBILITY

Your Company has sponsored a comprehensive training programme for school teachers being conducted in Vishakhapatnam by The Launch Pad, an organisation devoted to enhancing the teaching methodology of school teachers. The first of such programmes concluded with the training of teachers at the Chaitanya Public School, Ukkumagaran. This programme will now be conducted in many more such schools.

Your Company further provides financial assistance to the spouses of deceased employees on a case to case basis. Further, the Company also lends financial support for education of employees' children at the graduation level on a case to case basis.

DIRECTORS

During the year Mrs. Vathsala Ranganathan, resigned as a Director of the Company due to her pre-occupation. The Board placed on record their appreciation for the invaluable services rendered by Mrs. Vathsala Ranganathan during hertenure of office.

Mr. Sunil Varma, resigned as a Director of the Company on 16th May, 2012 due to his pre- occupation. The Board placed on record their appreciation forthe invaluable services rendered by Mr. Sunil Varma from 2008 during his tenure.

Mr. R. S. Chandra the nominee Director of Bessemer Venture Partners Trust stepped down on 30th May, 2012 and in his place Mr. Vishal Vijay Gupta joined the Board as a non-executive and non-rotational director on 30th May, 201 2.

Mr. Vishal Vijay Gupta was appointed as an Additional Director on 30th May, 201 2, to hold office till the ensuing Annual General Meeting.

Notice under Section 257 of the Companies Act,

1 956 has been received from a member of the Company together with a deposit of Rs.500/- proposing the appointment of Mr. Vishal Vijay

Gupta (not liable to retire by rotation) as Director of the Company.

Mr. R. Sundararajan and Mr. S. Krishnamurthy retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

COMMITTEES OF THE BOARD AUDIT COMMITTEE

The Company has constituted an Audit Committee as per the provisions of the Companies Amendment Act, 2000 and under Section 292 Aofthe Companies Act, 1956 at the Board Meeting held on June 5, 2002. The present members of the Committee are as follows:

1. Mr. S. R. Ramakrishnan

2. Mr. R. Sundararajan

3. Mr. Sunil Varma - resigned on 1 6th May, 201 2

4. Mr. S. Krishnamurthy

5. Mr. S. Bapu- appointed on 30th May, 2012

The Committee has met so far four times during the year.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 21 7 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, and the Companies (Particulars of Employees) Amendment Rules, 2011, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However having regard to the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1 956, the Annual report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT Yourdirectors confirm:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. That they had selected such accounting policies and applied them consistently and made judgements and estimates 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 the profit ofthe companyforthat period;

3. That they had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions ofthe Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. That they had prepared the annual accounts on a going concern basis.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Limited Subramanian Building, V Floor No. 1, Club House Road Chennai - 600 002 India

Tel: (91 44)2846 0390-394

Fax: (91 44)2846 0129

Email: [email protected]

Website: www.cameoindia.com

Contact Person: Mr. R. D. Ramaswamy, Director

SEBI Registration Number: INR000003753

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment.

As regards the observations of auditors in Para 4 of their report, the Company confirms that out of the total receivables of Rs.60,636.62 lakhs , from Sree Jayajothi Cements Limited (SJCL), Rs.9,323.45 Lakhs has been directly converted into Equity and Rs.25,676.56 Lakhs have been converted into Equity Linked Instruments in Spark Environmental Technology Limited (a fellow shareholder in SJCL), in April 2012. The Company has appointed its representative as a member on the Board of Directors in SJCL, to monitor the operations of the company and to ensure recovery of its dues, over a period of time. The Company is convinced about the viability of cement vertical and accordingly, the Company is confident of recovering all the amounts due to it and does not expect any shortfall in the recovery of the dues. With respect to the investment, the management is ofthe view that there is significant upside potential in the business and as the investment is of long term nature, the diminution in the value of investment is not otherthan temporary in nature.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish tothankthe bankers fortheircontinued assistance and support. The Directors also wish to thank the Shareholders of the Company for their continued support even in this global recession. Furtherthe Directors also wish to thank the customers and suppliers for their continued cooperation and support. The Directors further wish to place on record their appreciation of employees at all levels for their commitment and their contribution.

For and on behalf of the Board

Place : Chennai Arun Duggal

Date :30th May 201 2 Chairman

Mar 31, 2011

Dear Shareholder,

The Directors have pleasure in presenting the Eleventh Annual Report together with the accounts of your company for the year ended March 31, 2011.

FINANCIAL RESULTS Rs. in Lakhs

Consolidated Standalone 2010-11 2009-10 2010-2011 2009-10

Total Income 1,68,691.57 1,37,719.55 1,32,523.09 1,12,254.23

Profit before interest, depreciation, tax and extra -ordinary items 19,675.79 13,897.24 16,918.80 11,918.11

Interest & depreciation 11,912.17 6,868.16 9,772.28 5,206.09

Profit before tax & before ', extraordinary items 7,763.62 7,029.08 7,146.52 6,712.02

Provision for taxation 2,791.16 2,450.78 2,521.51 2,245.99

Profit after tax & extraordinary items 9,053.47 4,578.30 9,297.57 4,466.03

Balance brought forward from last year 13,802.01 9,853.42 12,856.72 9,117.82

Profit available for appropriation 21,219.36 14,529.14 19,818.01 13,583.85

Transfer to general reserves 174.05 111.65 174.05 1111.65

Surplus carried forward 20,425.18 13,802.01 19,023.831 12,856.72

OPERATING RESULTS & PERFORMANCE

Your directors are pleased to report that during the year the company recorded a 18% growth in total income on a standalone basis at Rs. 325.23 crores from Rs.1122.54 crores in the previous year. Profit before tax and extraordinary items at Rs.71.47 crores recorded a growth of 6.48% over the previous year (Rs.67.12 crores).

Profit after tax at Rs.69.61 crores recorded a growth of 56% over the previous year's figure of Rs.44.66 crores. Earnings per share (EPS) grew from Rs.0.26 to Rs.5.80.

Your Company's order book was Rs.3191.30 crores as at March 31, 2011.

CAPITAL STRUCTURE

During the year under review, the share capital of your Company was changed/ altered as follows:

Allotment of 3,48,622 Equity shares of Rs.10 each fully paid up under ESOP 2006 and 2007 schemes.

BUSINESS HIGHLIGHTS

Your Directors are pleased to state that during the year the Company was awarded several prestigious projects. Some of these projects and other business initiatives taken by your Board to position the Company in its growth path as a key player in the EPC business and as a manufacturer of wind turbines are as under:

1. Multiple orders from Steel Authority of India Ltd. totalling to Rs.175.82 crores.

2. An order over Rs.100 crores from Blue Diamond Australia Pty. Ltd., Australia, for setting up Tank Storage Facility in Queensland, Australia.

3. Orders from multiple Municipal services customers totalling Rs.237 crores.

4. An order from Prakash Industries for a material handling project for Rs.60.24 crores.

5. An order from Bharat Coal & Chemicals for relocation of Ammonia & Coal Gasification plant Rs.237.99 crores

6. An order Suryadev Alloys and Power P Ltd. for 80MW Captive Power Plant for Rs.354 crores.

7. An order GMR Chhattisgarh Energy Private Ltd. Bangalore for Water Intake package for 2 x 685 MW Thermal Power Plant for Rs.64.62 crores.

The Company's Joint venture, Hamon Shriram Cottrel Ltd Order has a backlog as of 31st March 2011 of Rs.454 crores.

The Company's other Joint Venture, Leitner Shriram Manufacturing Ltd has a back log as of 31st March 2011 of Rs. 1054 crores.

Your Company's associate, Orient Green Power Company Limited (OGPL) raised money by way of IPO in September 2010 for Rs.900 crores to finance expansion of its business.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Company's engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and wastewater treatment plants, water and sewer infrastructure and pipe rehabilitation.

The Standalone order book was Rs.3191.30 crores (approx) on March 31, 2011 and the Consolidated Order Book was Rs.5485.20 crores (approx) on the same date.

The Board of Directors have recommended a dividend of Rs.1.20 per share. This translates into a payout of Rs.6.19 crores including an amount of Rs.0.88 crores as Dividend Distribution Tax.

Overall revenues from turnkey contracts was Rs.941.72 crores in FY 2011.

The Company's wind turbine business comprises of sale and services of 250 KW class wind turbine generators to clients.

The wind turbine business revenue was Rs.69.57 crores in FY 2010 as compared to Rs. 92.61 crores in FY 2011.

The order book for the turnkey contracts as on March 31,2011 is Rs.2974.65 crores.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement presented by the Company include the financial information of all its subsidiary companies prepared in accordance with the Accounting Standard (AS 21).

The Government of India, Ministry of Corporate Affairs, under Section 21 2(8) of the Companies Act, 1956 vide letter ref.51/12/2007-CL-lll dated 8th February 2011 have granted exemption from attaching the full text of the financial statements of the company's aforesaid Subsidiaries along with the company's accounts for the year ended 31st,March2011.

Necessary disclosures will be made in respect of the said subsidiaries in this Annual Report apart from the statement pursuant to Section 212 of the Companies Act, 1956.

However, on request by any member of the company/statutory authority interested in obtaining them, these documents will be made available for examination, at its registered office. Pursuant to this, a statement summarizing the financial results of all the subsidiaries is attached to the consolidated financial statement.

DIVIDEND

With a view to augment resources for growth, the Directors have recommended 12% dividend for the year.

SUBSIDIARY COMPANIES AND JOINT VENTURES

Subsidiaries

Shriram EPC (Singapore) Pte. Ltd.

Shriram EPC (Singapore) Pte Ltd. is a 100% subsidiary of your company.

The audited financial results of SEPC Singapore for Fiscals 2011, are set forth below:

(In USD, except per share data)

Fiscal 2011

Sales and other income 43500

Profit/ (Loss) after tax (188,772)

Equity capital 20,210,013

Reserves and Surplus (excluding revaluation reserves) (1) 15,57,418

Earnings/ (Loss) per share (diluted) (SGD) (2) (0.00)

Earnings/ (Loss) per share (basic) (SGD) (0.00)

Net asset value (2) 21,767,431

During the year Shriram EPC (Singapore) Pte Ltd has made a loss of US dollars (188772).

BLACK STONE GROUP TECHNOLOGIES PVT. LTD.(BGT)

BGT which had been set up as an engineering outsourcing outfit in Chennai in 1993 acts as Engineering outfit of the Group with 200 strong technical staff.

The Company holds 55% in the equity stake of BGT.

BGT along with its subsidiary has reported a consolidated turnover of Rs.12.13 crores in the year 2010-11 compared to Rs.9.28 crores in the previous year 2009-10. The Company has identified newer business opportunities to increase its presence.

JOINT VENTURES

HAMON SHRIRAM COTTRELL PRIVATE LIMITED (HSC)

The Company's joint venture Company, HSC in the field of heat exchangers, cooling towers and air pollution control systems have reported significant growth. The turnover of the Company has increased from Rs.110.56 crores in 2009-10 to Rs.158.00 crores for 2010-11.The profit before tax was 10.50 crores for 2010- 11 as compared to 11.75 crores for 2009-10.

The major milestones achieved by the Company during the year:

- Major contracts worth Rs.300 crores from Reliance Infra (Sasan UMPP, Samalkot Gas Based and Krishnapatnam UMPP), World's largest FRP Cooling Towers.

- First Natural Draft Cooling Tower with Lanco Infratech for Koradi 3x 660MW.

- First break through order with Hindalco for Aditya Aluminium 6x1 50MW with civil for Rs.50 crores.

- Successful performance testing of ESP for JSPL,Barbil with emission of less than 30mg/m .

- In order to reflect the joint venture status of HSC, your Company is consolidating HSC on a line by line basis as a JV and not as a subsidiary.

LEITNER SHRIRAM MANUFACTURING LIMITED (LSML)

LSML set up an art of facility at Gummidipoondi for the manufacture of wind turbines and the trial production commenced in March 2009, and this yearthey have had a full year of operation.

MAJOR ACHIEVEMENTS DURING THE YEAR

- Manufactured & Dispatched 100 sets of Active Parts

- LSML awarded Star Export House status

- Construction of substations at Koodangulam (50MW) and Gujarat (25MW)

- Setting up of blade manufacturing facility

- Prototype for LTW 80 1.8 MW WEG & 250KWH50

- Installation of 1.5MW WEG in Thailand - First WEG outside India

The Company's order book position from various clients like PPS Enviro, TVH, Power Gen Lanka and OGPL is approx Rs.1054 crores.

During the year under review, LSML has reported a turnover of Rs.546 crores as compared to Rs.367.35 crores during the year 2009-10 with a profit of Rs.2 crores as compared to a loss of Rs.3.50 crores during the year2009-10.

ASSOCIATES

HALDIA COKE & CHEMICALS PVT. LTD (HCCL)

During the year the Company sold its entire investments in Ennore Coke Ltd to HCCL. The Company has a 48.48% equity stake in Haldia Coke & Chemicals Pvt. Ltd, which in turn holds 60.86% equity stake in Ennore Coke Ltd.

During the year under review, HCCL has reported a consolidated turnover of Rs. 854.76 crores with a profit aftertax of Rs.20.92 crores.

SHRIRAM SEPL COMPOSITES LIMITED (SSEPL)

SSEPL is a joint venture for manufacture of specialised GRP pipes and liners. SSEPL has had a mediocre year in terms of turnover due to the new manufacturing set-up near Chennai, which got operational only by the 3rd quarter of the current financial year.

The consolidated turnover of SSEPL during the current financial year has been Rs.9.17 crores against the previous year figure of Rs.29.80 crores and a loss of Rs.6.46 crores against the previous year figure of Rs.6.29crores.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this report.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the Code of Corporate Governance as required under Clause 49 of the Listing Agreements with the stock exchanges. A report on Corporate Governance along with a Certificate from the Auditors forms a part of this report.

ESOPs

The details required to be provided in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme- 2006 and the Shriram EPC Employee Stock Option Scheme-2007 are given below:

SI Particulars ESOP Scheme ESOP Scheme No 2006 2007 Date of Grant 22-11-2006 22-11-2007

1 Total number of options granted 1640161 500000

2 Exercise price Rs.10/- Rs.10/-

3 Number of options vested 1,45,943 63,950

4| Number of options exercised 3,36,122 12,500

5 Total number of shares arising as a result 3,36,122 12,500 of exercise of options

6 Number of options lapsed 37,822 11,500

7 Number of options forfeited 105753 1500

8 Variation in terms of options - -

9 Money realised by exercise of options Rs.33,61,220 Rs.1,25,000

10 Total number of options in force as on 31st 1,42,309 68,400 March, 2011

11 Grant to Senior Management - -

-Number of options

-Vesting period

12 Any other employee who - - received a grant in any one year of options amounting to 5% or more of options granted during the year

13 Identified employees who were - - granted options, during any one year equal to or exceeding 1 % of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

The number of shares issued during the year pursuant to exercise of options under the Shriram EPC Employee Stock Option Schemes amounted to 348622 shares, resulting in dilution of EPS by 0.46%.

DIRECTORS

During the year, Mr. K Madhava Sarma, Director passed away after a brief illness. The board recorded its appreciation for the valuable services rendered by Mr. K. Madhava Sarma during his tenure of office from 2006.

During the year Mr. P D Karandikar & Mr. S Bapu were appointed as Additional Directors of the Company to hold office till the ensuing Annual General Meeting.

Mr. M. Amjad Shariff and Mr. S R Ramakrishnan retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

PARTICULARS OF EMPLOYEES

As required under the provisions of Section 217 (2A) of the Companies Act, 1 956 read with the Companies (particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are nor set out in the Report as there are no employees who are covered under this section. Having regard to 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. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. That they had selected such accounting policies and applied them 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 at the end of the financial year and the profit of the company for that period;

3. That they had taken proper and sufficient care 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; and

4. That they had prepared the annual accounts on a going concern.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Limited Subramanian Building, V Floor No. 1, Club House Road Chennai 600 002 India Tel: (91 44)2846 0390 Fax: (91 44)2846 0129 Email: [email protected] Website: www.cameoindia.com Contact Person: Mr. R.D. Ramasamy SEBI Registration Number: INR000003753

AUDITORS

Mr. Deloitte Haskins and Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the Company for their continued support even in this global recession. Further the Directors also wish to thank the customers and suppliers for their continued cooperation and support The Directors further wish to place on record their appreciation of employees at all levels for their Commitment and their Contribution.

For and on behalf of the Board

Chairman

Chennai May 25, 2011

Mar 31, 2010

The Directors have pleasure in presenting the Tenth Annual Report together with the accounts of your Company for the year ended March 31, 2010.

FINANCIAL RESULTS Rupees in lakh

Consolidated Standalone

2009-10 2008-09 2009-10 2008-09

Total Income 1,37,646.66 1,01,086.79 1,12,173.23 92,395.42

Profit before interest, depreciation, tax and extraordinary items 13,897.25 8,492.48 11,918.11 8,008.63

Interest & depreciation 6,868.17 2,036.79 5,206.09 1,715.52

Profit before tax & before extraordinary items 7,029.08 6,455.69 6,712.02 6,293.11

Provision for taxation 2,450.78 2,325.57 2,245.99 2,291.43

Profit after tax & extraordinary items 4,578.29 4,130.12 4,466.03 4,001.68

Balance brought forward from last year 9,853.42 5,810.53 9,117.82 5,824.84

Profit available for appropriation 14,529.13 10,562.12 13,583.85 9,826.52

Transfer to general reserves 111.65 100.10 111.65 100.10

Surplus carried forward 13,802.01 9,853.42 12,856.72 9,117.82

OPERATING RESULTS & PERFORMANCE

Your Directors are pleased to report that during the year the Company recorded a 21.41% growth in total income at Rs.1,12,173.23 lakhs from Rs 92,395.42 lakhs in the previous year. Profit before tax and extraordinary items at Rs 6,712.02 lakhs recorded a growth of 7.5% over the previous year (Rs.6,293 lakhs).

Profit after tax at Rs 4,466.03 lakhs recorded a growth of 11.6 % over the previous year figure of Rs 4,001.68 lakhs. Earnings per share (EPS) grew from Rs 9.25 to Rs.10.26.

Your Companys order book was Rs.11,918 lakhs as at March 31, 2010.

CAPITAL STRUCTURE

During the year under review, the share capital of your Company was changed/ altered as follows:

Allotment of 564922 Equity shares of Rs 10 each fully paid up under ESOP 06 & 07 scheme.

BUSINESS HIGHLIGHTS

Your Directors are pleased to state that during the year the Company was awarded several prestigious projects. Some of these projects and other business initiatives taken by your Board to position the Company in its growth path as a key player in the EPC business and as a manufacturer of wind turbines are as under:

1. The Company is on SAP software.

2. Inauguration of the Gummidipoondi facility for manufacture of megawatt (MW) class Wind Turbines took place in September 2009, by the Companys Associate Company - Leitner Shriram Manufacturing Ltd. (LSML). Further LSML was awarded orders for 45 MW of wind turbines.

3. The Company has signed an MoU with China based North West Electric Power Design Institute (ÃNWEPDIÃ) to form a consortium for the execution of thermal power projects to be implemented on an EPC basis in India. Your Company will be the lead partner in this consortium.

4. The Companys subsidiary, Hamon Shriram Cottrell Pvt. Ltd. has bagged an order of Rs.90 crores from Mangalore Refinery and Petrochemicals Ltd. for setting up a Cooling Tower and cooling water treatment plant for phase III of the refinery project at Mangalore, Karnataka. This is a breakthrough order for the Cooling Tower business.

5. During the year, due to the synergies in the business, better banking and operational facilities, the Company has merged its subsidiary Shriram Leitwind Ltd. with the Companys associate Company, Leitner Shriram Manufacturing Ltd.

6. Your Companys Associate Company, Orient Green Power Company Ltd. (OGPL) finalised plans for an Initial Public Offer (IPO) to raise, subject to market & regulatory approvals around Rs.900 crores to finance expansion of its business.

OGPL filed a Draft Red Herring Prospectus (DRHP) in April, 2010 with SEBI, for its proposed IPO. As on date your Company holds a 35.8% stake in OGPL. The rest of the stake is held by two PE Investors - Bessemer Venture Partners (BVP) and Olympus Capital.

BUSINESS OVERVIEW

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

The turnkey contracts segment represents the Companys engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and waste water treatment plants, water and sewer infrastructure and pipe rehabilitation.

The Standalone order book was Rs.1,19,180 lakhs on March 31, 2010 and the Consolidated Order Book was Rs.3,22,130 lakhs on the same date. The Consolidated order book includes the following orders :

- An order from M/s PPS Enviro Power for installing WTGs of a capacity of 15 MW (1.5 MW * 10) in Tamil Nadu.

- An order from M/s T.S. Wind Power Developers, a Pvt. wind park developer based out of Satara, Maharashtra for the installation of 30 MW of wind turbines.

- The unexecuted portion of the order amounting to Rs.1,73,000 lakhs from Bharat Wind Farms Ltd., a subsidiary of the Companys Associate - Orient Green Power Company Ltd.

The Board of Directors have recommended a dividend of Rs.1.20 per share. This translates into a payout of Rs.610 lakhs including an amount of Rs.87.50 lakhs as Dividend Distribution Tax.

Overall revenues from turnkey contracts increased by 21%, from Rs.86,846.52 lakhs in FY 2009 to Rs.1,04,094.14 lakhs in FY 2010.

The Companys Wind Turbine business comprises of sales and services of 250 kw class wind turbine generators to clients.

The wind turbine business revenue was Rs.5,030.03 lakhs in FY 2009 as compared to Rs.6,957.62 lakhs in FY 2010.

The order book for the turnkey contracts as on March 31, 2010 is Rs.1,03,191lakhs.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement presented by the Company includes the financial information of all its subsidiary companies prepared in accordance with the Accounting Standard (AS 21) issued by the Institute of Chartered Accountants of India.

Your Company has received approval No.47/390/2010-CL III dated 11.05.2010 from the Government of India, Ministry of Corporate Affairs, under Section 212(8) of the Companies Act, 1956 for the exemption from attaching the full text of the financial statements of the Companys aforesaid Subsidiaries along with the Companys accounts for the year ended 31st March 2010.

Necessary disclosures will be made in respect of the said subsidiaries in this Annual Report apart from the statement pursuant to Section 212 of the Companies Act, 1956.

However, on request by any member of the Company/ statutory authority interested in obtaining them, these documents will be made available for examination, at its registered office. Pursuant to the approval, a statement summarizing the financial results of all the subsidiaries is attached to the consolidated financial statement.

DIVIDEND

With a view to augment resources for growth, the Directors have recommended 12% dividend for the year.

SUBSIDIARY COMPANIES AND JOINT VENTURES

Subsidiaries

SHRIRAM EPC (SINGAPORE) PTE. LTD. (SEPC SINGAPORE)

SEPC SINGAPORE is a 100% subsidiary of your Company.

The audited financial results of SEPC SINGAPORE for Fiscal 2010 is given below:

(In SGD, except per share data)

Fiscal 2010

Sales and other income 11,52,750

Profit/ (Loss) after tax 19,458

Equity capital 20,210,013

Reserves and Surplus (excluding revaluation reserves) (10,07,358)

Earnings/ (Loss) per share (diluted) (SGD) (0.00)

Earnings/ (Loss) per share (basic) (SGD) (0.00)

Net asset value 2,12,17,371 During the year SEPC SINGAPORE has made a Profit of US dollars 19,458 (Rs 9.22 lakhs).

BLACK STONE GROUP TECHNOLOGIES PVT. LTD. (BGT)

BGT had been set up as an engineering company in Chennai in 1993. BGT acts as an Engineering outfit of the Group with 200 strong technical staff.

Your Company holds 55% in the equity stake of BGT. BGT has reported a turnover of Rs. 928.79 lakhs in the year 2009-10 compared to Rs.1082.80 lakhs in the previous year 2008-09. The lower turnover is on account of the slow down of the US market, where predominantly the Company has its business coming from. The Company has started looking into other countries for newer business opportunities.

CHEMPROJECT CONSULTING PVT. LTD. (CHEMPROJECT):

CHEMPROJECT is in the business of consultancy in Engineering Services Sector. During the year, due to synergy in area of Engineering consultancy, Black Stone Group Technologies Pvt. Ltd. (BGT) had picked up 7,500 equity shares i.e. 60% in the equity capital of Chemprojects, whereby it has become a subsidiary of BGT and thereby of our Company from 1.1.2010.

The turnover of the Company during the year 2009-10 was Rs.344.44 lakhs compared to Rs.169.18 lakhs in the previous year 2008-09.

JOINT VENTURES

HAMON SHRIRAM COTTRELL PVT. LTD. (HSC)

The Companys joint venture HSC in the field of heat exchangers, cooling towers and air pollution control systems have reported significant growth. The turnover of the Company has increased from Rs 7,930.29 lakhs to Rs. 11,056.36 lakhs, an increase of 39.42 %.

The Company has bagged an order of Rs.90 crores from Mangalore Refinery and Petrochemicals Ltd for setting up a Cooling Tower and cooling water treatment plant for phase III of the refinery project at Mangalore, Karnataka. This is by far the largest single order for the Company.

In order to reflect the joint venture status of HSC, your Company is consolidating HSC on a line by line basis as a JV and not as a subsidiary.

LEITNER SHRIRAM MANUFACTURING LTD. (LSML)

During the year, due to the synergies in the business, better banking and operational facilities, the Company has merged the business of the marketing Company, Shriram Leitwind Ltd with LSML.

LSML set up an art of facility at Gummidipoondi for the manufacture of the wind turbines and the trial production commenced in March 2009, with the formal inauguration taking place in September 2009.

During the year the Company was awarded orders for 45 MW of wind turbines worth Rs.23,000 lakhs.

During the year under review, LSML has reported a turnover of Rs 36,735 lakhs as compared to Rs 4,996.85 lakhs during the year 2009 with a loss of Rs 349.88 lakhs as compared to Rs 146.55 lakhs during the year 2009.

ENNORE COKE LIMITED (ECL):

Your Company also holds 31.7% stake in ECL, a listed Company that is engaged in setting up at Haldia a plant to

manufacture metallurgical coke and also a thermal power plant to convert the process heat into energy.

During the year ECL continued the implementation of Co generation Power Plant of 12MW capacity at Haldia and also continues the implementation of the coke project. The Coke project has now commenced operation on two thirds of its capacity and is expected to achieve full capacity by the forthcoming year. ECL has already signed a Power Purchase agreement with West Bengal State Electricity Board. ECL has successfully started utilizing four more third party manufacturing units in the states of Gujarat / West Bengal/ Orissa / Jharkhand.

During the year, ECL had carried out significant volume of Exports to Pakistan and Durban as also USA. ECL has also commenced direct supplies to end users prominent amongst them are Tata Metalicks, Tata Steels, IDCOL, Kalinga, Narasingh Ispat, Maheswari Ispat and also foundries at Coimbatore and Belgaum.

ECL has shifted its registered office from Mumbai to Chennai after receiving all the statutory approvals.

During the year under review, ECL has reported a turnover of Rs 37,280.07 lakhs with a Profit after tax of Rs 923.95 lakhs, as compared to Rs.10,105.07 lakhs with a Profit after tax of Rs.7.81 lakhs during the year 2009.

SHRIRAM SEPL COMPOSITES PVT. LTD. (SSEPL):

As you are aware, your Company had entered into a MoU with certain specialists in the field to form SSEPL as a joint venture with your Company as the majority owner with a view to exploit opportunities in the area of manufacture of specialised GRP pipes and liners.

During the year under Review SSEPL reported a satisfactory turnover of Rs. 2,980.34 lakhs as against the previous year figure of Rs. 124.78 lakhs and a profit/loss of Rs. 629 lakhs against the previous year figure (Rs.18.87 lakhs).

MANAGEMENT DISCUSSION & ANALYSIS

A detailed review of the operations, performance and outlook of the Company and its business is given in the Management Discussion and Analysis report, which forms a part of this report.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the Code of Corporate Governance as required under Clause 49 of the listing agreement with the stock exchanges. A report on Corporate Governance along with a certificate from the Auditors form a part of this report.

ESOPS

The details required to be provided in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme- 2006 and the Shriram EPC Employee Stock Option Scheme- 2007 are given below:

Sl No Particulars ESOP Scheme 2006

31.03.2010 31.03.2009

1 Total number of options granted 16,40,161

2 Date of Grant 22-11-2006

3 Options at the begining of the year 14,93,640 15,34,408

4 Number of options vested 3,81,476 3,82,218

5 Number of options exercised 5,22,618 5,06,542

6 Total number of shares arising as a result of exercise of options 5,22,618 5,06,542

7 Granted during the year - -

8 Forfeited during the year - 40,768

9 Exercise price Rs.10 Rs.10

10 Expried during the year - -

11.Options outstanding at the end of the year 14,93,640 14,93,640

12.Exercisable at the end of the year 1,45,953 2,78,902

13 Money realised by exercise of options Rs..52,26,180 Rs.50,65,420

14 Grant to Senior Management - -

- Number of options - - - Vesting period - -

15 Any other employee who received a grant in any one year of options amounting to 5% or more of options granted during the year - -

16 Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - -

Sl No Particulars ESOP Scheme 2007

31.03.2010 31.03.2009

1 Total number of options granted 5,00,000

2 Date of Grant 22-11-2007

3 Options at the begining of the year 1,47,000 1,50,000

4 Number of options vested 12,900 62,900

5 Number of options exercised 65,400 6,900

6 Total number of shares arising as a result of exercise of options 65,400 6,900

7 Granted during the year 20,000 20,000

8 Forfeited during the year - 3,000

9 Exercise price Rs.10 Rs.10

10 Expried during the year - -

11. Options outstanding at the end of the year 1,67,000 1,67,000

12. Exercisable at the end of the year 41,500 55,400

13 Money realised by exercise of options Rs..6,54,000 Rs.69,000

14 Grant to Senior Management - -

- Number of options - -

- Vesting period - -

15 Any other employee who received a grant in any one year of options amounting to 5% or more of options granted during the year - -

16 Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - -

The number of shares issued pursuant to exercise of options under the Shriram EPC Employee Stock Option Schemes amounted to 4,81,065 shares, resulting in dilution of EPS by Rs.0.80.

DIRECTORS

During the year, Mr. K E C Rajakumar the nominee Director of Unit Trust of India Investment Advisory Services Ltd., stepped down and in his place Mr. Sunil K Kolangara joined the Board as a non-executive and non-rotational director, to hold office till the ensuing Annual General Meeting.

During the year, Mr. N Rangachary and Mr. S Krishnamurthy were appointed as Additional Directors of the Company to hold office till the ensuing Annual General Meeting.

However due to pre-occupations Mr. N Rangachary resigned from the Board effective 1.4.2010.

Notice under Section 257 of the Companies Act, 1956, has been received from a member of the Company together with a deposit of Rs.500 each proposing the appointments of Mr. Sunil K Kolangara (not liable to retire by rotation) and Mr. S Krishnamurthy (liable to retire by rotation at the ensuing Annual General Meeting) as Directors of the Company.

Mr. K Madhava Sarma, Mr. Sunil Varma and Mr. Arun Duggal retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

The Company has constituted an Audit Committee as per the provisions of the Companies Amendment Act, 2000 and under Section 292 A of the Companies Act, 1956 at the Board Meeting held on 05th June 2002. The present members of the Committee are as follows:

1. Mr. S.R. Ramakrishnan

2. Mr. R. Sundararajan

3. Mr. K. Madhava Sarma

4. Mr. Sunil Varma

The Committee has met so far five times during the year.

PARTICULARS OF EMPLOYEES

As required under the 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 employees are set out in the Annexure to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. That they had selected such accounting policies and applied them 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 at the end of the financial year and the profit of the Company for that period;

3. That they had taken proper and sufficient care 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; and

4. That they had prepared the annual accounts on a going concern.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Ltd.

Subramanian Building

V Floor, No. 1, Club House Road

Chennai 600 002, India.

Tel: (91 44) 2846 0390.

Fax: (91 44) 2846 0129.

Email: [email protected].

Website: www.cameoindia.com

Contact Person: Mr. R.D. Ramasamy.

SEBI Registration Number: INR000003753

AUDITORS

M/s. Deloitte Haskins and Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the Company for their continued support. Further the Directors also wish to thank the customers and suppliers for their continued cooperation and support. The Directors further wish to place on record their appreciation of employees at all levels for their commitment and their contribution.

For and on behalf of the Board

Arun Duggal

Chairman Place : Chennai

Date : May 24, 2010

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