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Directors Report of Technofab Engineering Ltd.

Mar 31, 2018

The Directors have pleasure in presenting the Forty Sixth Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31 March 2018.

FINANCIAL HIGHLIGHTS

The financial results of the Company for the year ended 31 March 2018 are summarized below:

(Rs. in Million)

Particulars	2017-18	2016-17
Revenue From Operations	4348.50	4021.71
Other Income	23.57	13.35
Total revenue	4372.07	4035.06
Earnings before Interest (Finance Costs), Tax, Depreciation and Amortisation (EBITDA)	546.59	395.07
Less: Finance costs	295.83	204.44
Profit/ (Loss) before Tax, Depreciation and Amortisation	250.76	190.63
Less: Depreciation and Amortisation expenses	41.43	49.27
Profit/ (Loss) before Tax (PBT)	209.33	141.36
Less: Tax expenses [net of deferred tax effect and Tax adjustment for Earlier years (net)]	73.83	52.80
Profit/ (Loss) after taxation (PAT)	135.50	88.56
Other Comprehensive Income for the year	1.75	1.19
Total Comprehensive Income for the year	137.25	89.75
Retained Earnings- Opening Balance	1063.33	999.77
Add: Profit for the Year	135.50	88.56
Less: Transferred to General Reserve	40.00	25.00
Retained Earnings- Closing Balance	1158.83	1063.33

DIVIDEND & APPROPRIATIONS

Your Directors are pleased to recommend a dividend of Rs. 2/- per equity share (i.e. @ 20%) on the Equity Shares of face value of Rs.10/- each for the Financial Year ended March 31, 2018, subject to the approval of shareholders at the ensuing Annual General Meeting which would result in cash outflow of Rs.25.25 Million as mentioned below:

(Rs. in Million)

Particulars	Amount
Proposed Dividend on Equity Shares	20.98
Dividend Distribution Tax (Including	4.27
Surcharge and Education Cess) on Proposed
Dividend
Total Cash Outflow	25.25

REVIEW OF BUSINESS OPERATIONS

Your Company is focussed on improving operational efficiencies and these efforts have started to reap in the benefits. During the current year, the Company clock an operational profit (EBITDA) of Rs.54.66 crore compared to that of Rs.39.51 crore reported in previous year and the revenues also grew by 8.35% to Rs.437.21 crore and this trend is expected to continue and gradually accelerate in years to come. The profit after tax in the period under review was Rs.135.50 Million as compared to Rs.88.56 Million in the previous year, which represents an excellent growth of 53% as compared to the previous year. The Sectoral wise business review/operational performance are detailed in Management Discussion & Analysis.

The net worth of the Company, which has been steadily increasing, stands at Rs.278 Crore as on 31st March 2018.

SUBSIDIARIES

The Company has three subsidiaries viz. Arihant Flour Mills Private Limited, Woodlands Instruments Private Limited and Rivu Infrastructural Developers Private Limited which are wholly owned by the Company. These companies are much smaller and they don''t come under the category material subsidiary.

The financial statements of the subsidiaries and related information are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company. (www.technofabengineering.com).

As required under the provisions of Section 129 of the Companies Act, 2013, a statement containing the salient features of financial statements of all subsidiaries in Form AOC-1 is annexed with the financial statements as "Annexure [A]" and forms part of this Report which covers the performance and financial position of the subsidiary companies.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements for the financial year 2017-18 have been prepared on the basis of audited financial statements of the Company and its subsidiaries, as approved by their respective Board of Directors keeping in view the provisions of Section 129 of the Companies Act, 2013, applicable Accounting Standards and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (the "Listing Regulations").

RESERVES

During the year, the Board of Directors of your Company has decided to transfer Rs.40 Million which amounts to 29.52 % of the profits after tax, to the General Reserves of the Company.

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

No material changes and commitments affecting the financial position of the Company between the end of financial year viz. 31 March 2018 and the date of this Report have occurred.

CHANGE IN NATURE OF BUSINESS

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

CHANGES IN SHARE CAPITAL

During the year under review, there was no change in the total share capital of the Company.

UNPAID / UNCLAIMED DIvIDEND

Pursuant to the circular issued by Ministry of Corporate Affairs (MCA) with respect to Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with the Companies) Rules, 2012 vide G.S.R. 342 (E) dated May 10, 2012, your Company has uploaded on its website www.technofabengineering.com under Investor Relation Section as well as on the Ministry''s website the information regarding Unpaid / Unclaimed Dividend amount lying with the Company as on 29 September, 2017 (date of last Annual General Meeting).

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year under review, your Company was not required to transfer unclaimed / unpaid dividend to the Investor Education and Protection Fund (IEPF) established by the Central Government, pursuant to the provisions of Section 125 of the Companies Act, 2013

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of Directors and its composition

During the year under review, there is no change in the Board of Directors of the Company except resignation of Mr. Nakul Gupta w.e.f. closing hours of 8th March 2018. As on date, the Company has five Directors with an Executive Chairman. Of the 5 Directors, 2 are Executive Directors and 3 are Non-Executive Independent Directors including one Woman Director. The Composition of the Board is in conformity with the provisions of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

None of the Director on the Board is a Director in more than 10 Public Companies or a member of more than 10 Committees or a Chairman of more than 5 Committees across all listed companies in which he/she is a Director. Necessary disclosures regarding Committee positions in other Public Limited Companies as on 31st March, 2018 have been made by all the Directors of the Company.

None of the Company''s Directors are disqualified from being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013.

Directors liable to retire by rotation

As per the provisions of the Companies Act, 2013, Mr. Avinash C Gupta retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment in the ensuing Annual General Meeting.

The details of Director being recommended for reappointment as required under Regulation 36 of Listing Regulations is contained in the accompanying Notice convening ensuing Annual General Meeting of the Company.

Key Managerial Persons (KMPs)

In terms of the provisions of Section 203 of the Act, Mr. Avinash C. Gupta, Managing Director; Mr. Arjun Gupta, Whole-time Director, Mr. Sandeep Kumar Vij, Chief Financial Officer and Mr. Suman Kumar Verma, Company Secretary are the Key Managerial Personnel of your Company.

During the period under review, there is no change in the Key Managerial Personnel (KMP) except resignation of Mr. Nakul Gupta from the office of Whole-time Director.

None of the Whole-time Key Managerial Personnel (KMP) of the Company is holding office in any other Company as a Key Managerial Personnel.

Further, none of the Directors / KMP of the Company is disqualified under any of the provisions of the Companies Act, 2013 and relevant Regulations of Listing Regulations

Declaration by Independent Directors

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Act confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) and Regulation 25 of the Listing Regulations.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. Arun Mitter, Mr. Pawan Chopra, Ms. Anju Banerjee, and Mr. Arjun Gupta. The Committee comprises of three of Independent Directors and one Executive Director with Mr. Arun Mitter as the Chairman. The Chief Financial Officer and the Auditors of the Company are the permanent invitees of the Committee.

Further details relating to the Audit Committee are provided in the Corporate Governance Report, forming part of this Annual Report. During the year under review, all recommendations made by the Audit Committee were accepted by the Board.

QUALITY (QMS) , HEALTH, SAFETY AND ENVIRONMENT (HSE)

The Company believes that "Quality is a state of mind" and is committed to a continuous ongoing initiative in this direction and is committed "To provide and maintain safe and healthy work environment for all personnel within the organization and to continually improve in safe working conditions to make incident free work zone" Accordingly the Company has always laid emphasis on HSE and made efforts to evolve this as a critical brand differentiator for the Company in the market place. This has been possible due to the dedicated work put in by the team members and support provided by all the employees of the organization. The Company is committed towards ensuring safe working and eliminating hazards and in protecting the environment including reduction in paper & power consumption and proper disposal of construction & electronic waste.

The Company is accredited to ISO 9001:2004 and ISO 14001:2004 for Health, Safety and Environment and OHSAS 18001:2007 for Occupational Health and Safety Assessment series. The Company is in the process of merging these three standards into single document i.e. IMS (Integrated Management System) that will combine all the three standards into single standard based on the latest revisions of 2015 standards.

MANAGEMENT DISCUSSION AND ANALYSIS INCLUDING BUSINESS REVIEW

As stipulated under Regulation 34 of the Listing Regulations, the Management Discussion and Analysis for the period under review has been given separately and forms an integral part of this Report which includes a detailed business review of the Company.

PUBLIC DEPOSITS

During the financial year 2017-18, the Company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE REPORT

In compliance with the provisions specified in the Listing Regulations, a separate report on Corporate Governance along with the requisite certificate from the Statutory Auditors confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid regulations forms an integral part of this Report. The Auditors'' Certificate does not contain any qualification, reservation and adverse remark.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued there under and Part D of Schedule II as specified in the Listing Regulations, the Board of Directors has formulated the Nomination and Remuneration Policy of the Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a Director and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

The Managing Director/Whole-time Directors of the Company do not receive remuneration from any of the subsidiaries of the Company.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of the Company is set out in "Annexure [B]". In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms are set out in "Annexure [B]" which forms part of this Report.

However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of your Company.

ANNUAL PERFORMANCE EVALUATION OF BOARD AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations including circular issued by SEBI, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors including Independent Directors. The framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee based on need and new compliance requirements.

In line with the abovementioned framework, the Independent Directors at their separate meeting held on 28 February 2018 without participation of the Non-Independent Directors and Management, have considered and evaluated the Boards'' performance and performance of the Chairman, Non-Independent Directors and the Board as a whole. The Independent Directors in the said meeting have also assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board.

During the period under review, the Board in its meeting held on 20 May 2017, have evaluated the performance of each of the Independent Directors without participation of the Director who was subject to evaluation.

The details of evaluation process of the Board, its Committees, Chairman and individual Directors, including Independent Directors have been provided under the Corporate Governance Report which forms part of this Report.

MEETINGS OF THE BOARD AND AUDIT COMMITTEE

During the year, six (6) Board Meetings and five (5) Audit Committee meetings were held and the dates of the Board Meetings are 20 May 2017, 29 August 2017, 14 September 2017, 13 October 2017, 12 December 2017 and 9 February 2018. The details of Board Meetings including other Committee Meetings are provided in the Corporate Governance Report which forms part of this Annual Report. The maximum interval between the two Board Meetings/ Audit Committee Meetings did not exceed 120 days as prescribed under the Companies Act, 2013 and the Listing Regulations.

The Board of Directors have accepted all the recommendations made by the Audit Committee.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. The Internal Complaint Committee ("ICC") has been set up to redress complaints received regarding sexual harassment. During the period under review, no complaint was received by the ICC.

COMPLIANCE WITH THE SECRETARIAL STANDARDS

The Company is in absolute compliance with all notified Secretarial Standards as issued by the Institute of Company Secretaries of India (including amendment(s) and subsequent modification(s) therein).

COMPLIANCE WITH THE LISTING AGREEMENT

The Company has listed its securities on both Bombay Stock Exchange ("BSE") and National Stock Exchange ("NSE"). The Company is in compliance with the Regulations of SEBI (LODR) Regulations, 2015 applicable to the Company in accordance with the listing agreements entered with both the Stock Exchanges.

DIRECTORS'' RESPONSIBILITY STATEMENT

The audited accounts for the year under review are in conformity with the requirements of the Act and the applicable Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations. Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31 March 2018, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b) the Directors have 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 as at 31 March 2018 and of the profit and loss of the Company for the financial year ended 31 March 2018;

c) 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) the annual accounts have been prepared on a ''going concern'' basis;

e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) 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.

AUDITORS AND AUDITORS'' REPORT:

I. Statutory Auditors

At the Forty Sixth Annual General Meeting ("AGM") of the Company held on 29 September 2017, M/s. G.C. Agarwal & Associates, Chartered Accountants (Firm Registration No. 017851N) were appointed as the Statutory Auditors of the Company to hold office for a period of five (5) consecutive years commencing from the financial year 2017-18 subject to ratification at every AGM on a remunerations including terms of payment to be fixed by the Board of Directors on the recommendation of the Audit Committee. However as per the provisions of Section 40 Companies (Amendment) Act, 2017 which is now in force vide MCA notification No. S.O. 1833 (E) dated 7 May 2018, first proviso of Section 139(1) of the Companies Act, 2013 with respect to ratification of appointment of Statutory Auditors at every AGM has been done away with. In view of the fact that the appointment of auditors in the forty sixth annual general meeting was subject to ratification at every AGM, a resolution is proposed to be passed at the ensuing Forty Seventh AGM to the effect that no further ratification in any forthcoming AGM is required for continuation of his office during the remaining period of his tenure apart from ratification of his appointment in this AGM.

The Auditors'' Report for the financial year 2017-18, does not contain any qualification, reservation, adverse remark or disclaimer.

II. 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 M/s Naresh Verma & Associates, Company Secretaries to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure [C]" to this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark except following three observations. The explanation/ comments by the Board are mentioned hereunder against each of the observations:

Sl. No.	Observation of Secretarial Auditors	Explanation/ Comments of the Board
1.	The expenditure made by the company towards CSR activities during the year ended 31.03.2018 was less than the prescribed amount.	The Company expenditure under CSR has been deferred because of tightness of cash flows and resultant stretched liquidity.
2.	There was delay in filing particulars of satisfaction of charge which was condoned by office of Regional Director, Northern Region during the year and cost of Rs. 12800 each imposed by said office was duly paid by the company.	The documents with respect to satisfaction of charge was provided very late by the Bank.
3.	Mr Arjun Gupta, Director was disqualified under section 164(2)(a) of the Companies Act, 2013 for part of the year due to his name being published in the List notified by Ministry of Corporate Affairs and his DIN was deactivated. The disqualification was stayed vide Hon''ble High Court Order dated 24.10.2017 and 01.11.2017 in Writ Petition WP(C) No. 9278/2017. Based on the said Order, the DIN of Mr Arjun Gupta was reactivated by the Registrar of Companies.	The publication of the name of Mr. Arjun Gupta in the list of disqualified Directors was erroneous interpretation of Section 164 and 167 of the Act and was violation of principle of natural justice, Article 14 and19 of Constitution of India. In view of the foregoing, the Writ filed by Mr. Arjun Gupta and others (the "Petitioners") was allowed by Hon''ble High Court of Delhi in favour of the Petitioner.

III. Cost Auditors

The Company is not engaged in the production of such goods or services which are prescribed by the Central Government, for this reason the Company is not required to maintain cost records specified under sub section (1) of section 148 of the Companies Act, 2013 and to appoint Cost Auditors.

REPORTING OF FRAUDS

There have been no instances of fraud reported by the Statutory Auditors and/or Secretarial Auditors of the Company under Section 143(12) of the Companies Act,2013 and the rules framed thereunder either to the Company or to the Central Government.

DISCLOSURES BY SENIOR MANAGEMENT

Senior Management have made disclosures of interest to the Board relating to all material Financial & Commercial transactions entered between Company and third parties. None of the Senior Managers have been found to be interested in such transactions.

ANNUAL RETURN OF THE COMPANY

In terms of the provisions of Section 92 (3) of the Act read with the Companies (Management and Administration) Rules,2014, an extract of the Annual Return of your Company for the financial year ended 31st March, 2018 is given in "Annexure- [D]" and can also be viewed on at www.technofabengineering.com

RELATED PARTY TRANSACTIONS

The Company has formulated a Related Party Transactions Policy, which has been uploaded on its website at (www.technofabengineering.com). It has been the endeavor of the Company to enter into related party transaction on commercial and arms'' length basis with a view to optimize the overall resources of the group. All transaction entered into with Related Parties during the year were in the ordinary course of business of the Company and at arms'' length basis. The Company has not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the Policy of the Company on the materiality of related party transactions.

The details of the related party transactions as required under IND AS-24 read with the provisions of Listing Regulations, are set out in Note 46 to the standalone financial statements forming part of this Annual Report.

In accordance with Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 the particulars of contract or arrangements with related parties, referred to in Section 188 of the Act, if any, in the prescribed Form AOC-2 are attached with this report as "Annexure-[E]"

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

In accordance with Section 134(3)(g) of the Companies Act, 2013, the particulars 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.

RISK MANAGEMENT

The Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Through the periodical risk report processes which are based upon Business Environment, Operational Controls and Compliance Procedures, the Company aims to assess and prioritise risks according to their significance and likelihood. The risk assessment is not limited to threat analysis, but also identifies potential opportunities. The report also assess the cost of treating risks and risk treatment plans are incorporated in strategy, business and operational plans of the Company.

The Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors.

The Board of Directors have already approved and periodically reviews the risk management policy and the risk appetite for the Company. There are no risks which in the opinion of the Board threaten the existence of the Company.

INTERNAL FINANCIAL CONTROLS

In order to align with the requirement of Section 134(5) (e) of the Companies Act, 2013, the Company has in place adequate internal financial controls which provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements.

In particular, it ensures adequate operating controls, clear policies and detailed procedures of operations, delegation of authorities, safeguarding of assets, prevention and detection of frauds and errors, financial controls on financial reporting and timely preparation of reliable financial information. Systems and procedures are periodically reviewed to keep pace with the growth and complexity of the Company''s operations. Upon review, no material reportable weaknesses were observed during the financial year 2017-18.

Nonetheless your Company recognizes that any Internal control framework, no matter how well designed has inherent limitations and accordingly it is ensured that systems are reinforced on ongoing basis.

WHISTLE BLOWER POLICY (VIGIL MECHANISM)

The Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy (Vigil Mechanism) which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and the Listing Regulations. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the Vigil Mechanism and the Whistle Blower Policy of the Company have been outlined in the Corporate Governance Report which forms part of this Annual Report. It is practice of Company to ensure that no employee is victimized for bringing such incident to attention of Management. Directors have not received any complaint regarding harassement, discrimination, violation of Company''s Code of Conduct or any other unfair practice during the period under review. The vigil mechanism is available on your Company''s website viz. www.technofabengineering.com

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVE

The Company has formed a CSR Committee comprising of Mr. Avinash C Gupta, Mr. Arjun Gupta, Mr. Pawan Chopra and Ms. Anju Banerjee. The Said Committee has developed a Policy on CSR which was subsequently approved by the Board.

Based on the recommendations of the CSR Committee of the Board, the Company has incurred expenditure on this head. In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Report is attached with report as "Annexure-[F]"

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out hereunder:

I. Conservation of energy

Though the operations of the Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. The Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. Technology absorption

The Company being engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. Foreign exchange earnings and outgo

Foreign Exchange Earnings - Rs.1263 Mn

Foreign Exchange Outgo - Rs.504 Mn

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

OTHER DISCLOSURES

a) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and

b) The Company does not have any ESOP scheme for its employees/Directors and no Sweat Equity Shares has been issued.

c) There was no revision in the financial statements.

INDUSTRIAL RELATIONS

Your Company''s human resources is the strong foundation for creating possibilities for its business. The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

APPRECIATION

The Directors wish to express their sincere appreciation to the Banks, Central and State Governments, Public and Private Sector Customers in India and abroad and the Company''s valued shareholders for their continued co-operation and support. The Directors particularly wish to thank all the employees of the Company whose enthusiasm, vitality and application have been vital to the Company''s business performance.

For and on behalf of Board of Directors

Place : Faridabad Avinash C Gupta

Date : 13 August 2018 Chairman

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the Forty Fifth Annual Report on the business and operations of your Company along with the audited statement of accounts for the financial year ended 31^st March 2016.

FINANCIAL HIGHLIGHTS

The financial results of the Company for the year ended 31^st March 2016 are summarized below:

(Rs, in Millions)

Particulars 1	2015-16 1	1 2014-15
Revenue from Operations (Including Other Income)	4651.77	4221.12
Profit before Interest, depreciation and Tax (EBIDTA)	391.67	316.59
Less: Interest & finance charge	180.02	149.86
Less: Depreciation	50.19	44.73
Profit before Tax	161.46	122.00
Less: Tax Expense	46.00	37.55
Profit after Tax	115.46	84.45
Balance Brought Forward	650.97	586.52
Amount Available for appropriation	766.43	670.97
Transfer to General Reserve	25.00	20.00
Closing Balance in Statement of Profit & Loss	741.43	650.97

BUSINESS OVERVIEW AND FINANCIAL PERFORMANCE

A brief overview of the Company''s business is given hereunder:

I. SECTORAL OVERVIEW

Though the Company has capabilities to undertake turnkey EPC Services across diverse sectors and geographies, two sectors have contributed to the vast majority of business and revenue, viz. the Water Sector and the Electrical Sector. The other sectors viz. the Thermal Power, Nuclear Power, Industrial, Oil & Gas had relatively low contribution.

This is merely a reflection of the continuing lack of investments in these sectors, a reversal of which would go a long way in enabling the Company to grow in a manner seen in the period 2008 to 2013.

Major customers during the year included, North Bihar Power Distribution Company, West Bengal State Electricity Distribution Company, Ministry of Water, Tanzania and South Bihar Power Distribution Company.

II. GEOGRAPHICAL SPREAD

The Company has continued to maintain a strong focus on geographical diversity. Apart from Sub Saharan Africa, the other geographies of interest are in Fiji and closer home in South Asia. During the year your Company continued to execute business secured in Ghana, Kenya, Liberia, Tanzania and Zimbabwe. Around a fifth of the Company''s revenue came from overseas assignments.

Work on the project in Liberia which had to be suspended in August 2014 due to outbreak of Ebola resumed during the year and is progressing well.

One of the important multi laterally funded projects in the Water Sector being executed for the Ministry of Water, Tanzania has been completed and handed over to the Customer. Likewise another set of three funded projects through Crown Agents U K, spread over multiple locations in Zimbabwe have been completed and handed over.

At the same time the Company has recently commenced work on yet another multilaterally funded project in the Water sector in Uganda.

III. FRESH BUSINESS SECURED

The company continued to put great emphasis on securing new business from existing as well as new customers and new geographies. The business conditions have been very difficult. In the first half of 2015-2016 there was a relative paucity of enquiries. In the later part of 2015-2016 there was a significant pick up. Though the Company could make substantial fresh bids, many customers have taken unusually long time in finalizing orders. The Company could secure fresh business of around Rs, 3305 Million during the year, and while this is clearly inadequate, the Company is well placed to benefit from the increased enquiries as well as the spillover of non finalized bids. The largest share of orders were received from the Electrical Sector followed by the Industrial and Water sector. There was no fresh business from the traditional Power Sector.

At present, the Company has outstanding proposals worth over Rs, 55 billion, 60% of which pertain to domestic business and the remaining overseas.

IV. ECONOMIC AND BUSINESS OUTLOOK

For the fifth year in a row, the economic and business outlook in the country, for the sectors we serve, has been gloomy. Many of the customers continue to be financially stressed. Not only is there a delay in receiving payments, the standstill or slowdown on many of the projects means that retention money which is linked to project completion continues to pile up.

Concurrently the project pipeline in the Power, Nuclear and Industrial Sectors continues to be seriously impaired. As a result, the slowdown in enquiries and longer than normal gestation in converting enquiries to orders and orders to revenue, continue unabated.

Over a year ago there was an improvement in sentiment. However this improvement in sentiment has begun to translate into opportunities only in the second half of the year. Virtually all these opportunities arise out of government funding and is for investment in the Electrical and Water sectors, and private investment continues to be in the doldrums.

As far as the overseas market is concerned, the Company continues to maintain a strong focus particularly in sub Saharan Africa. While the Company largely pursues funded projects mainly in the water infrastructure, non funded projects are also pursued though with a degree of caution.

V. STRATEGIC INITIATIVES

The Company continues to work on its ongoing strategic initiatives viz:

- Focus on improving efficiency through use of technology and organizational development;

- Focus on Quality;

- Employee welfare along with Training and development and

- Market diversity.

While continuing to adhere to its traditional practices, viz:

- the philosophy of "keep it simple";

- to retain a lean, non hierarchical structure with an effective but simple, no frills office culture and

- maintain an informal, achievement oriented, merit and loyalty rewarding work atmosphere.

During the year, the Company set up a dedicated team focused purely on closing out a large number of older projects which had been substantially completed and in operation by the respective Customers, but which lacked formal closure for a variety of reasons.

QUALITY UP GRADATION

The Company secured ISO 9001 accreditation in 2007. This was a first milestone towards continuous quality enhancement. The Company believes that "Quality is a state of mind âand is committed to a continuous ongoing initiative in this direction. Internal audits are carried out regularly.

During the year the Company has been awarded the coveted ISO 14001 and OHSAS 18001 accreditation. The Company is committed "To provide and maintain safe and healthy work environment for all personnel within the organization and to continually improve in safe working conditions to make incident free work zone". This has been possible due to the dedicated work put in by the team members and support provided by all the employees of the organization. The Company has a bigger responsibility in ensuring safe working, eliminating hazards and in protecting the environment including reduction in Power and Paper consumption and managing proper disposal of construction and electronic wastes.

FINANCIALS

On the financial front, the Company achieved a total revenue of Rs, 4,652 Million for the year ended 31^st March,2016 as against Rs, 4,221 Million for the previous financial year. This amounts to 10.21% increase over the previous year. The EBIDTA at Rs, 390 Million increased by 23.7 % in comparison to the previous year. The profit after tax in the period under review was Rs, 115.46 Million as compared to Rs, 84.45 Million in the previous year, representing an increase of 36.72%.

The net worth of your Company, which has been steadily increasing, stands at over Rs, 2315 million as on 31^st March 2016.

The financial results represent a satisfactory and steady acceleration of the positive trend seen in the previous year and, as in the previous year, has been achieved in the face of a continuing unfavorable business environment.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements for the financial year 2015-16 have been prepared on the basis of audited financial statements of the Company and its subsidiary companies, as approved by their respective Board of Directors keeping in view the provisions of Section 129 of the Companies Act, 2013, Accounting Standards and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

SUBSIDIARIES

As required under the first proviso to sub-section (3) of Section 129 of the Companies Act, 2013, a separate statement containing the salient features of financial statements of all subsidiaries in Form AOC-1 is annexed with the financial statements and forms part of the Annual Report which covers the performance and financial position of the subsidiary companies.

The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of your Company (www.technofabengineering.com).

The financial performance of each of the subsidiaries included in the consolidated financial statements of your Company is set out in the "Annexure [A]" to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated under Listing Regulations, the Management Discussion and Analysis for the period under review has been given separately and forms an integral part of this Report.

DIVIDEND

The Board of Directors of the Company believe that the Company and investors long term interests are better served by conserving cash and recycling it in operations. Hence they have recommended that there be no dividend this year. The money so preserved would assist in ongoing operations.

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

No material changes and commitments affecting the financial position of the Company between the date of end of Financial Year and the date of Report have occurred between 31^st March, 2016 as on the date of the report.

TRANSFER TO RESERVES

It is proposed to transfer Rs, 25 Million which amounts to 21.66 % of the profits after tax, to the General Reserves of the Company.

PUBLIC DEPOSITS

During the financial year 2015-16, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

CORPORATE GOVERNANCE REPORT

In compliance with the provisions specified in Listing Regulations, a separate report on Corporate Governance along with the requisite certificate from the Statutory Auditors confirming compliance with the conditions of

Corporate Governance as stipulated under the aforesaid regulations forms an integral part of this Report.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued there under and Part D of Schedule II as specified in the Listing Regulations, the Board of Directors has formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a Director and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

The Managing Director of your Company does not receive remuneration from any of the subsidiaries of your Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors

There is no change in the Board of Directors of the Company during the period under review.

Re-appointment

As per the provisions of the Companies Act, 2013, Mr. Nakul Gupta retires by rotation at the ensuing Annual General Meeting and being eligible seeks re-appointment. The Board recommends his reappointment.

Resignation

Mr. Ashish Kapil had resigned from the office of Company Secretary and Compliance Officer of the Company with effect from 31^st October, 2015.

Induction

The Board on recommendations of the Nomination and Remuneration Committee appointed Mr. Suman Kumar Verma as Company Secretary and Compliance Officer of the Company w.e.f. 1^st November 2015.

ANNUAL PERFORMANCE EVALUATION OF BOARD AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder and Listing Regulations, the Independent Directors at their separate meeting held on 17^th March 2016 without participation of the Non-Independent Directors and Management, have considered and evaluated the Board''s performance, performance of the Chairman and that of Non-Independent Directors. The Independent Directors in the said meeting have also assessed the quality, quantity and timeliness of the flow of information between the Company Management and the Board.

The Board in its meeting held on 27^th May, 2016 have evaluated the performance of each of the Independent Directors without participation of the Director who was subject to evaluation.

The criteria for performance evaluation have been detailed in the Corporate Governance Report.

MEETINGS OF THE BOARD AND AUDIT COMMITTEE

The details of the number of Board and Audit Committee meetings of your Company are mentioned in the Corporate Governance Report which forms part of this Report.

The Board of Directors have accepted all the recommendations made by the Audit Committee.

DECLARATION BY INDEPENDENT DIRECTORS

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

a) in the preparation of the annual accounts for the financial year ended 31^st March, 2016, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

b) the Directors have 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 your Company as at 31^st March, 2016 and of the profit and loss of the Company for the financial year ended 31^st March, 2016;

d) the annual accounts have been prepared on a going concern basis;

e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) 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.

AUDITORS AND AUDITORS'' REPORT: I. Statutory Auditors

At the Forty Fourth Annual General Meeting (AGM) of the Company held on 25^th September 2015, M/s. Rajesh Suresh Jain & Associates, Chartered Accountants (Firm Registration No. 017163N) were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the Forty Fifth AGM of the Company.

M/s. Rajesh Suresh Jain & Associates, Chartered Accountants, who retire at the ensuing AGM of the Company are eligible for re-appointment. The Company has received written consent and a certificate stating that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued there under.

The Audit Committee and the Board of Directors recommend the appointment of M/s. Rajesh Suresh Jain & Associates, Chartered Accountants, as the Statutory Auditors of the Company for the financial year 2016- 17 till the conclusion of the next AGM.

The Auditors'' Report for the financial year 2015-16, does not contain any qualification, reservation or adverse remark.

II. Secretarial Audit

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013 an extract of the Annual Return in the prescribed format is annexed with this report and marked as "Annexure [D]" to this report.

RELATED PARTY TRANSACTIONS

During the financial year 2015-16, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms'' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under.

The details of the related party transactions as required under Accounting Standard-18 read with Listing Regulations are set out in Note 2.26 to the standalone financial statements forming part of this Annual Report.

In accordance with Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC-2 are attached as "Annexure [E]" to the Board''s Report.

LOANS AND INVESTMENTS

RISK MANAGEMENT

The Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans.

The Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors.

WHISTLE BLOWER POLICY (VIGIL MECHANISM)

The Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy (Vigil Mechanism) which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulation 2015. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of the Company have been outlined in the Corporate Governance Report which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has from time to time spending some money on social purposes on a voluntary basis. However from 1^st April 2014 the Companies Act has made it mandatory for the Company to allocate 2% of the net average domestic profits for the last three years on social issues.

For this purpose your Company has constituted a subcommittee of the Board to approve the Corporate CSR policy and to oversee the expenditure. The Board of Directors approved the Corporate Social Responsibility (CSR) Policy for your Company Pursuant to the Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, on the recommendations of the CSR Committee, The CSR Policy outlines the CSR vision of your Company and is set out herewith as "Annexure [F]" to this Report.

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

I. Conservation of energy

Though the operations of your Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. The Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. Technology absorption

The company being engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. Foreign exchange earnings and outgo

Foreign Exchange Earnings - Rs, 1142.82 Mn Foreign Exchange Outgo - Rs, 653.93 Mn

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

The Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,

2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

GENERAL

a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and

b) Your Company does not have any ESOP scheme for its employees/Directors.

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the

Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

APPRECIATION

The Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. They sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of Board of Directors

Avinash C Gupta

Chairman & Managing Director

Place : New Delhi

Dated : 8^th August 2016

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their 43rd Annual Report on the business and operations of your Company along with the audited statement of accounts for the year ended 31st March, 2014.

THE FINANCIAL HIGHLIGHTS ARE SET OUT BELOW

Year ended Year ended March 31, 2014 March 31, 2014 (Rs. in Million) (Rs. in Million)

Turnover (from operations incl. export incentives) 4072.37 4263.01

Other Income 40.81 19.33

Total Income 4113.18 4282.34

Total Expenditure 3822.45 3701.78

Profit before Interest, depreciation and Tax (EBIDTA) 290.73 580.56

Less: Interest & finance charge 119.63 73.28

Less: Depreciation 63.07 35.47

Profit before Tax 108.03 471.81

Less: Provision for Tax- current tax 33.50 137.50

Less: Wealth Tax 0.40 0.35

Profit before Deferred Tax 74.13 333.96

Add/(Less): Deferred Tax Credit/(Debit) 0.02 (7.04)

Profit after Tax 74.15 326.92

Add/(Less): Income Tax for earlier years (5.09) (1.58)

Profit Available for Appropriation 69.06 325.34

Proposed Dividend including Dividend Tax - 30.68

Transfer to General Reserve 20.00 150.00

Profit After Appropriation 49.06 144.66

Balance Brought Forward From Last Year 537.46 392.80

Profit & Loss Account balance 586.52 537.46

REVIEW OF OPERATIONS

Financial Highlights

Your company has achieved a gross operating turnover of Rs. 4072 Million for the year ended 31st March, 2014 as against Rs. 4263 Million for the previous financial year. This amounts to a 4.5% decrease over the previous year. The EBIDTA at Rs. 290.73 Million decreased by 49.92% in comparison to the previous year. The profit after tax in the period under review was Rs. 74 Million as compared to Rs. 326.9 Million in the previous year.

The net worth of your Company, which has been steadily increasing, stands at over Rs. 2095 million as on 31st March 2014.

The growth momentum created in the period 2006 to 2011 had been sustained, though at a more moderate rate, till FY 2013, despite the severe slowdown in the investment cycle in the country. The slight fall in turnover and the severe decrease in the profitability have been mainly due to a one of reason which has been covered in the Management Discussion and Analysis accompanying this Report.

Sectoral Overview

Your Company has in recent years developed capabilities to undertake turnkey EPC Services across diverse sectors and geographies. The contribution of various sectors towards the Company''s business is therefore continuosly varying. In the previous year, the water sector had the maximum contribution at 40% followed by the power sector at 27% and by the Oil & Gas Sector which contributed 13%. In the year under review the Water Sector''s contribution got further enhanced to 58%, whereas the power sector''s contribution remained steady at 25%. These two sectors accounted for around three quarter of the Company'' turnover.

Major customers during the year included Ministry of Water, Zimbabwe, West Bengal State Electricity Distribution Company, Ministry of Water, Tanzania, South Bihar Power Distribution Company and Government of Liberia.

Geographical Spread

Your Company has continued to maintain a strong focus on geographical diversity. Apart from sub Saharan Africa, the other geographies of interest are in Fiji and closer home in South Asia. During the year your Company continued to execute business secured in Ethiopia, Fiji, Ghana, Kenya, Liberia Mozambique and Tanzania. Slightly over half of the Company''s revenue came from overseas assignments.

Fresh business Secured

Your company continued to put great emphasis on securing new business from existing as well as new customers and new geographies. During the year, the Company secured fresh business of around Rs. 8630 Million. The largest share of orders were received from the domestic water Sector followed by the Rural Electrification Sector. The traditional Power and Industrial Sectors did not contribute any fresh business and this is a reflection of the severe impairment of the project investment cycle in our country.

At present your Company has outstanding proposals worth over Rs. 40 billion, 60% of which pertain to domestic business and the remaining overseas.

ECONOMIC AND BUSINESS OUTLOOK

For the third year in a row, the economic and business outlook in the country has been gloomy. The economic growth has dipped below 5%, and a turnaround cannot yet be seen. Reproduced below (in italics) is a paragraph from last year''s Annual Report:

The previous year had seen a dip in confidence of our country''s economic outlook, and this has deepened. Investment in the main sectors that are crucial to us viz. the thermal power, nuclear power and the industrial sectors is reduced to a bare trickle. Even though there is no dearth of viable projects, several factors which are not in the control of project developers have resulted in many of these projects coming to a virtual standstill. With the project investment pipeline thus severely impaired, the outlook is compounded by the absence of any realistic hopes of an upturn during the current fiscal year.

The scenario is adversely impacted by many factors, which are well known. There seems to be no end to the uncertainties faced on fuel for power plants, the difficulties in obtaining environmental clearances and in land acquisition. The continuous high fiscal and balance of payments deficits have caused a severe denting of confidence apart from the steady erosion in the value of the rupee.

As a result, the slowdown in enquiries and longer than normal gestation in converting enquiries to orders and orders to revenue, which was visible last year has continued unabated.

The foregoing continues to be valid a year later. Many of our customers continue to be financially stressed. Not only is there a delay in receiving payments, the standstill or slowdown on many of our projects means that retention money which is linked to project completion continues to pile up. Of course there has recently been a significant improvement in sentiment. However this is yet to translate into any movement on the ground in terms of resumption of stalled projects or fresh enquiries. Having said that, we are happy to convey that early in FY 2015 the Company has received one modest order from the Thermal Power Sector (after a gap of over 30 months).

As far as the overseas market is concerned, your Company continues to maintain a strong focus particularly in sub Saharan Africa. While the Company largely pursues funded projects mainly in the water infrastructure, non funded projects are also pursued though with a degree of caution. In fact during the year the Company has dropped two fairly large private overseas projects from its order book, as they did not seem to have any prospect of achieving financial closure.

Even in this market there has been a significant increase in competition, as competitors facing dwindling orders in home countries try to make up by targeting projects in Africa, which being mainly linked with basic social issues and/ or funded have not been so adversely affected by the general economic slowdown.

The combination of a significant decrease in bidding opportunities and increase in competition, both domestically, and to a lesser extent, in the overseas markets has had the inevitable impact of adversely affecting margins. The fact that the Company still has a decent order book, is on account of its strategy of diversying its customer base by targeting newer sectors and geographies, whilst sticking to its domain competence of undertaking turnkey EPC Projects. This has helped us to cope with the slowdown in the traditional Power and Industrial Sectors. As a result we continue to remain in decent shape and revenue for next two years is visible from existing orders. Hence your Company is expected to be in a healthy shape to take advantage of the upturn which hopefully should occur by FY 2016.

STRATEGIC INITIATIVES

Your Company continues to work on its ongoing strategic initiatives viz:

* Focus on improving efficiency through use of technology and organizational development

* Focus on Quality

* Employee welfare along with Training and development

* Market diversity

While continuing to adhere to its traditional practices, viz:

* the philosophy of "keep it simple".

* to retain a lean, non hierarchical structure with an effective but simple, no frills office culture, and

Your Company secured ISO 9001 accredition in 2007. This was a first milestone towards continuous quality enhancement. The Company believes that "Quality is a state of mind"and is committed to a continuous ongoing initiative in this direction. Internal audits are carried out regularly and recently our external auditors have conducted a surveillance and reconfirmed our ISO 9001 accredition.

DIVIDEND

Your Directors have, taking into account the business situation/ outlook and the dip in profits, decided to recommend that there be no dividend this year. The money so preserved would assist in ongoing operations.

RESERVES

It is proposed to transfer Rs. 20.00 Million which amounts to 27% of the profits after tax, to the General Reserves of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. The Directors have selected such appropriate accounting policies and applied them consistently and have 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 the period;

iii. The Directors have 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 of fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going-concern basis.

PARTICULARS OF EMPLOYEES

None of the employees during the year under review was in receipt of remuneration in excess of the limits prescribed under Section of 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended.

SUBSIDIARY COMPANIES

In accordance with the requirements of Accounting Standards AS 21, issued by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are a part of this Annual Report.

A statement pursuant to section 212(3) of the Companies Act, 1956 relating to subsidiary company is attached.

In terms of the General Circular No. 2/2011 dated 8th February 2011, issued by the Government of India, Ministry of Corporate Affairs, the Annual Reports of the subsidiary Companies are not Annexed to this Report. Members desiring to have a copy of audited Annual Accounts and the related detailed information of the subsidiaries may write to the Company Secretary at the Registered Office of the Company and they will be provided with the same upon such a request. Annual Accounts of these subsidiary Companies will will also be kept for inspection at the Registered Office of the Company as well as at the offices of the subsidiary Companies

PUBLIC DEPOSITS:

The Company has not accepted any deposit in the year under review.

CORPORATE GOVERNANCE REPORT

Your Company has fully complied with the requirements and disclosures that have to be made under the Code of Corporate Governance as required under Clause 49 of the Listing Agreement entered into with the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) (the "Stock Exchanges"). As a listed company, necessary measures are taken to comply with the Listing Agreements with the Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Statutory Auditors, forms part of this Annual Report. The Chairman & Managing Directors'' declaration regarding compliance with Code of Conduct for Board Members and Senior Management is attached to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri. Arjun Gupta is liable to retire by rotation and is eligible for re-appointment. Pursuant to the provisions of Section149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. Pawan Chopra, Mr. Viresh Shankar Mathur and Mr. Arun Mitter as an Independent Directors for a period of five years with effect from the conclusion of the forthcoming Annual General Meeting. The particulars of Directors proposed to be appointed/re-appointed, as the case may be, are given in the Corporate Governance Report of this Annual Report.

AUDITORS

The Auditors Rajesh Suresh Jain & Associates, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received a letter pursuant to Section 139 and 141 of the Companies Act, 2013 from Messrs Rajesh Suresh Jain & Associates, Chartered Accountants, regarding their eligibility for re-appointment as Auditors of the Company.

AUDITORS'' REPORT

The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.

PARTICULARS UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988:

I. Conservation of energy

Though the operations of your Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. Technology absorption

The company being engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. Foreign exchange earnings and outgo

Foreign Exchange Earnings - Rs. 1822,885,353/-

Foreign Exchange Outgo - Rs. 1542,714,592/-

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciation to the Banks, Central and State Governments, Public and Private Sector Customers in India and abroad and the Company''s valued shareholders for their continued co-operation and support. Your Directors particularly wish to thank all the employees of the Company whose enthusiasm, vitality and application have been vital to the Company''s business performance.

On Behalf of the Board of Directors Avinash C Gupta Chairman & Managing Director New Delhi, August 08, 2014

Mar 31, 2013

To the Members

The Directors have pleasure in presenting their Annual Report on the business and operations of your Company along with the audited statement of accounts for the year ended 31st March, 2013.

THE FINANCIAL HIGHLIGHTS ARE SET OUT BELOW

Year ended Year ended March 31, 2013 March 31, 2012 (Rs. In Million) (Rs. In Million)

Turnover (from operations incl. export incentives) 4263.01 3773.32

Other Income 19.33 43.33

Total Income 4282.34 3816.65

Total Expenditure 3701.78 3264.77

Profit before Interest, depreciation and Tax (EBIDTA) 580.56 551.88

Less: Interest & finance charge 73.28 37.13

Less: Depreciation 35.47 21.15

Profit before Tax 471.81 493.60

Less: Provision for Tax- current tax 137.50 149.00

Less: Wealth Tax 0.35 0.27

Profit before Deferred Tax 333.96 344.33

Add/(Less): Deferred Tax Credit/(Debit) (7.04) (2.27)

Profit after Tax 326.92 342.06

Add/(Less): Income Tax for earlier years (1.58) (0.40)

Profit Available for Appropriation 325.34 341.67

Proposed Dividend including Dividend Tax 30.68 24.38

Transfer to General Reserve 150.00 150.00

Profit After Appropriation 144.66 167.28

Balance Brought Forward From Last Year 392.80 225.52

Profit & Loss Account balance 537.46 392.80

REVIEW OF OPERATIONS

Financial Highlights

The financial year 2012-13 has seen your Company successfully protect the momentum that it had created since 2005-2006. Your company achieved a gross operating turnover of Rs. 4263.01 Million for the year ended 31st March, 2013 as against Rs. 3773.32 Million for the previous financial year. Th is amounts to a 12.98% growth over the previous year.The EBIDTA at Rs. 580.56 Million increased by 5.19 % in comparision to the previous year.

The EBIDTA margin stood at 13.62%, as against 14.63% during the previous year and compares well with those of peers in the sector in which your Company operates. The profit after tax in the period under review was 325.34 Million as compared to " 341.67 Million in the previous year.

The net worth of your Company, which has been steadily increasing, stands at over " 2025 million as on 31st March 2013.

Sectoral Overview

Your Company''s capabilities to undertake turnkey EPC Services has been deployed across diverse sectors. Whereas, till 2006, over 90% of the Company''s business accrued from the Power Sector, in recent years your Company has been successful in diversifying across other sectors. As a result the relative contribution of various sectors has seen a continuous churning. Whereas in the previous year, Power and Industrial sectors had the highest contribution to the turnover (at 28% and 27% respectively), during the year under review the water sector had the maximum contribution at 40% follo wed by the Power sector at 27%. This was followed by the Oil & Gas Sector which contributed 13%.

Major customers during the year included MCA, Mozambiqu e; Fuel Trade, Ghana; Water Authority, Fiji; West Bengal State Electrical Development Corporation, National Thermal Power Corporation and HINDALCO. For the first time in the Company''s history the top three revenue earners were overseas projects.

Geographical Spread

Your Company has continued to maintain a strong focus on geographical diversity. Apart from sub Saharan Africa, the other geographies of interest are in Fiji and closer home in South Asia. During the year your Company continued to execute business secured in Ethopia , Fiji, Ghana, Kenya, Malawi and Mozambique. The geographical spread was further increased to cover Lib eria, Tanzania and Zimbabwe. Slightly over half of the Company''s revenue came from overseas assignments.

Fresh business Secured

Your company continued to put great emphasis on securing new business from existing as well as new customers and new geographies. During the year, the Company secured fresh business of around " 4800 Million, of which a substantial portion was from overseas . The largest share of orders were received from the Water sector followed by the Electrical Distribution/ Rural Electrification sectors. The Company did not see much activity in the Thermal Power, Nuclear Power and Industrial sectors.

At present your Company has outstanding proposals wor th over " 40 billion, 60% of which pertain to domestic business and the remaining overseas.

ECONOMIC AND BUSINESS OUTLOOK

The previous year had seen a dip in confidence of our country''s economic outlook, and this has deepened. Investment in the main sectors that are crucial to us viz. the thermal power, nuclear power and the industrial sectors is reduced to a bare trickle. Even though there is no dearth of viable projects, several factors which are not in the control of project developers have resulted in many of these projects coming to a virtual standstill. With the project investment pipeline thus been severely impaired, the outlook is compounded by the absence of any realistic hopes of an upturn during the current fiscal year.

The scenario is adversely impacted by many factors, which a re well known. There seems to be no end to the uncertainties faced on fuel for power plants, the difficulties in obtaining environmental clearances and in land acquisition. The continuous high fiscal and balance of payments deficits have caused a severe denting of confidence apart from the steady erosion in the value of the rupee.

As a result, the slowdown in enquiries and longer than normal gestation in converting enquiries to order s and orders to revenue, which was visible last year has continued unabated.

The worldwide economic scene also does not offer any encouragement. While your Company is not directly impacted by the crisis in Europe, the slowdown in China, and slow recovery and the imminent withdrawal of quantitative easing in USA, it does have indirect adverse impact on our business.

The fact that the Company still has a decent order book, along with its proven ability to target multiple sectors and geographies should hopefully help it tide over these concerns and be in a healthy shape to take advantage of the upturn which should be happening sooner rather than later. The steps taken by the government in aligning fuel prices with the international market, the small initial steps towards reduction of interest rates taken by RBI, the prospects of increase in gas prices, and decrease of deficits both fiscal and on Current account can undoubtedly be seen as early green shoots. The critical administrative issues that are holding up the project pipeline will hopefully now be addressed.

The overseas markets continue to present a reasonably good promise and we have further increased our marketing efforts by going into new countries in Africa and closer home in South Asia. During the year we could enter three new countries and are now working in 9 countries abroad. At the same time, fresh business opportunities are being pursued in a few other countries both in Africa and in South Asia. We are largely focused on developing countries where the basic demand on infrastructure and urban development remains very strong. To a great extent the projects your Company aims at, are not profit oriented or privately financed being more likely to be the subject of developmental finance, whether governmental or from multilateral development banks/bodies, hence these are not so strongly impacted by market related issues.

Both domestically and in the overseas markets there are strong signs of increased competition which in turn has the potential of affecting margins.

While we are confident that the Company will be able to cope with the present gloomy scene, your Company believes it will be unrealistic to expect the growth over the next 1-2 years to be significantly better than what has been achieved in 2012-2013 and to be ready to face a slight dip in margins due to pressures of competition in a slowing market.

STRATEGIC INITIATIVES

Being in the Service sector, the Company''s success has been founded on Customer satisfaction. Achieving Customer Satisfaction through Excellence in Project Management has been and will continue to remain the cornerstone of your Company''s business philosophy. In recent years this has been accompanied by a strong initiative to diversify the market, both in terms of newer sectors and newer geographies. Initiatives aimed at enhancing business and improving our internal environment and processes are an ongoing feature. Briefly these include:

Focus on improving efficiency

Since inception the Company has largely adhered to the mantra "keep it simple". Notwithstanding the inherent complexities of our business and the environment in whic h we operate, we continue to have faith in and abide by this mantra. It is important however to make full use of the opportunities available by advances in IT to efficiently cope with the growth pangs that are an integral accompaniment to the rapid increase in business volume. To this end the Company has greatly enhanced its in house IT capability and is well on the way to develop its own ERP systems, the first few modules of which have been rolled out.

With larger size jobs being taken up, the Company has considerably strengthened its senior management levels in project execution. The Company has appointed a Chief Financial Officer during the year.

Focus on HR

During the year employee strength crossed the 370 mark. The Company faces challenges on the manpower front, in terms of attracting, retaining and providing appropriate training to its employees. The Company HR policies and practices are geared to meet these challenges.

The Company maintains an informal, achievement oriented, merit and loyalty rewarding work atmosphere. As a result it has been able to develop a loyal workforce and keep attrition levels under control.

The Company continues to retain a lean, non hierarchical structure with an effective but simple, no frills office culture.

Marketing initiatives

The Company''s recent rapid growth has been built around its core competence of providing turnkey electro mechanical EPC services. All recent diversification has been achieved around this core competence and no unrelated diversification has either been done or is planned.

The Company intends to continue with this market divers ification strategy. This has been yielding good results as borne out by the fact that the Company has secured fresh orders last year in sectors and geographies where it had little presence till recently. As a result the Company has been able to sustain its order book despite the complete absence of fresh orders from sectors like thermal power, nuclear power and industrial, which together had been the mainstays of Company''s business in recent years. Simultaneously the Company has in recent years been gravitating toward higher value jobs and this trend has accelerated during the year. Pre qualification issues have now become more important and the Company is suitably addressing this issue through tie ups and partnerships.

The Company had previously created new specialized groups to secure jobs in sectors like Electrical Distribution/ Rural Electrification, Water and Waste Water treatment/infrastructure and Oil & Gas and is achieving the benefits of these initiatives. The diversification into Africa continues to be spearheaded by one of the Company''s full time Directors.

While the Company continues to look at the consolidated Mechanical, Electrical and Public Health services (MEP) Sector from the future perspective, it sees little scope in the near future.

Quality upgradation

Your Company secured ISO 9001 accredition in 2007. This was a first milestone towards continuous quality enhancement. The Company believes that "Quality is a state of mind" and is committed to a continuous ongoing initiative in this direction. Internal audits a re carried out regularly. Recently our external audito rs have conducted a rigorous audit and recertified our ISO 9001 accredition.

DIVIDEND

Your Directors have pleasure in recommending an increased dividend of 25% i.e." 2.50 per share of " 10/- each on 10,490,000 equity shares of " 10/- each for the financial year ended 31st March, 2013, which, if approved at the ensuing Annual General Meeting, will be paid to all those members whose names appear in the Register of members as on the close of business hours on a book closure date that shall be separately identified. The dividend payable will result in an outgo of" 30.7 Million.

The Directors are aware that many investors have been seeking a higher dividend but have deliberately chosen to follow a cautious and conservative path on account of the uncertain outlook and to facilitate growth and sustainability. This will reflect in incremental steps towards dividend enhancement and in line with this approach, dividend has been increased despite a very slight dip in after tax profit.

RESERVES

It is proposed to transfer" 150.00 Million to the Gen eral Reserves of the Company, constituting 45.88% of the profits after tax made during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. The Directors have selected such appropriate accounting policies and applied them consistently and have 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 the period;

iii. The Directors have 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 of fraud and other irregularities;

iv The Annual Accounts have been prepared on a going concern basis.

SUBSIDIARY COMPANIES

In accordance with the requirements of Accounting Standards AS 21, issued by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries are a part of this Annual Report.

A statement pursuant to Section 212(3) of the Companies Act, 1956 relating to subsidiary company is attached.

In terms of the General Circular No. 2/2011 dated 8th February 2011, issued by the Government of India, Ministry of Corporate Affairs, the Annual Reports of the subsidiary Companies are not Annexed to this Report . Members desiring to have a copy of audited Annual Accounts and the related detailed information of the subsidiaries may write to the Company Secretary at the Registered Office of the Company and they will be provided with the same upon such a request. Annual Accou nts of these subsidiary Companies will also be kept for inspection at the Registered Office of the Company as well as at the offices of the subsidiary Companies

PUBLIC DEPOSITS:

The Company has not accepted any deposit in the year under review.

CORPORATE GOVERNANCE REPORT

The corporate governance philosophy of your Company is driven by the interests of the stakeholders and business needs of the Company Therefore, enhancing corp orate governance is on our highest priority in order to keep the trust of the shareholders and to fullfill Our social responsibilities as a Company. The Directors adhere to the Corporate Governance requirements set o ut by the Securities and Exchange Board of India and your Company has implemented all the stipulations prescribed by SEBI.

MANAGEMENT DISCUSSION AND ANALYSIS

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report.

DIRECTORS

Mr. Nakul Gupta and Mr Pawan Chopra will retire by rotation at the ensuing AGM and they have offered themselves for reappointment.

AUDITORS

The Auditors Rajesh Suresh Jain & Associates, Chartered Accountants , retire at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received confirmation that their appointment, if made, would be within the limits prescribed under Sec. 224(1 B) of the Companies Act, 1956.

AUDITORS'' REPORT

The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.

PARTICULARS UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988:

I. Conservation of energy

Though the operations of your Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. Technology absorption

The company being a engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. Foreign exchange earnings and outgo

Foreign Exchange Earnings - " 1,29,34,99,988

Foreign Exchange Outgo - " 94,82,71,285

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciatio n to the Banks, Central and State Governments, Public and Private Sector Customers in India and abroad and th e Company''s valued shareholders for their continued co-operation and support. Your Directors particularly wish to thank all the employees of the Company whose enthusiasm, vitality and application have been vital to the Company''s business performance.

BY ORDER OF THE BAORD

AVINASH C GUPTA

CHAIRMAN & MANAGING DIRECTOR

Place : New Delhi.

Dated : 13.08.2013

Mar 31, 2012

The Directors have pleasure in presenting their Annual Report on the business and operations of you Company along with the audited statement of accounts for the year ended 31st March, 2012.

THE FINANCIAL HIGHLIGHTS ARE SET OUT BELOW

Year ended Year ended March 31,2012 March 31,2011 (Rs.in Millions) (Rs.in Millions)

Turnover (from operations incl. export incentives) 3,773.32 2,900.79

Other Income 43.33 13.13

Total Income 3,816.65 2,913.92

Total Expenditure 3,264.77 2,483.61

Profit before Interest, depreciation and Tax (EBIDTA) 551.88 430.31

Less: Interest & finance charge 37.13 33.38

Less: Depreciation 21.15 11.58

Profit before Tax 493.60 385.35

Less: Provision for Tax-current tax 149.00 120.00

Less: Wealth Tax 0.27 0.13

Profit before Deferred Tax 344.33 265.22

Add/(Less): Deferred Tax Credit/(Debit) (2.27) (3.22)

Profit after Tax 342.06 262.00

Add/(Less): Income Tax for earlier years (0.40) (1 74)

Profit Available for Appropriation 341.66 260.26

Proposed Dividend including Dividend Tax 24.38 18.29

Transfer to General Reserve 150.00 150.00

Profit After Appropriation 167.28 91.97

Balance Brought Forward From Last Year 225.52 133.55

Profit & Loss Account balance 392.80 225.52

Financial Highlights

The financial year 2011-12 has seen your Company build upon the momentum that it had created since 2005- 2006. Your company achieved a gross operating turnover of Rs. 3773.32 Million for the year ended 31st March, 2012 as against Rs. 2900.78 Million for the previous financial year registering an incremental turnover of Rs. 832.53 Million and recording a growth rate of 28.7% over the previous year. The EBIDTA at Rs. 551.88 Million increased by 22% in comparison to the previous year. This rate of gross profit compares well with those of peers in the sector in which your Company operates. The profit after tax in the period under review increased by 31% to Rs. 341.67 Million as compared to Rs. 260.25 Million in the previous year.

The net worth of your Company, which has been steadily increasing, stands at over Rs. 1730 million as on 31st March, 2012.

Sectoral Overview

Your Company's capabilities to undertake turnkey EPC Services has been deployed across diverse sectors. Whereas over 90% of the Company's business traditionally accrued from the Power Sector, in recent years your Company has been successful in diversifying across other sectors. As a result the relative contribution of various sectors has seen a continuous churning. Whereas in the previous year, the Industrial sector had the highest contribution to the turnover (49%) , the thermal power sector has, during the year, regained its position as the highest contributor to your Company's turnover, with the sector contributing around 33% of the total turnover. This was followed by the Industrial and the Oil & Gas Sectors. The Water & Waste Water infrastructure/treatment sector contributed about the same as in the previous year and is expected to significantly increase its contribution during 2012-2013.

Major customers during the year included HINDALCO, Fuel Trade, Ghana, National Thermal Power Corporation, Lanco and Wonji Showa sugar factory in Ethiopia.

Geographical Spread

Your Company has strongly strived to secure and execute business in overseas markets particularly in Africa. During the year your Company continued to execute business secured in Ethiopia, Kenya, Fiji and Ghana. The geographical spread was further increased to cover Malawi, Mozambique and Bangladesh. Around one third of the Company's revenue came from overseas assignments.

Overseas Branch Offices

Your company continued to operate overseas branch offices in Fiji, Ethiopia and Kenya with the permission of RBI to cater to the needs of overseas projects.

Fresh Business Secured

Your company continued to put great emphasis on securing new business from existing as well as new customers and new geographies. As a result of sustained marketing efforts your Company secured new business aggregating over Rs. 7500 Million, of which a substantial portion was from overseas. The quantum of fresh business secured during the year represents a 65% increase over the previous year. The largest share of orders were received from the Water sector followed by the Thermal Power sector.

At present your Company has outstanding proposals worth over Rs. 40 billion. Several involve integrated BoP scope (as distinct from smaller individual BoP packages) where individual order sizes are much larger. The single largest outstanding bid is of the order of Rs. 5 billion.

ECONOMIC AND BUSINESS OUTLOOK

The previous year had seen a return of confidence as the effects of the international financial crisis began to wear out and global recovery commenced. This confidence has proved to be short lived. In the first half of the year itself, clear indications of growth slippages had become evident and, as the year progressed the outlook has turned distinctly gloomy. Not only has there been a continuous downwards trend in India's rate of economic growth, the short and medium term scenario in our country is not at all encouraging. Even though our countries developmental needs in the power, urban development and related infrastructure sectors, which directly concern us, are immense and there is no dearth of viable projects, several factors which are not in the control of project developers have resulted in many of these projects coming to a virtual standstill. The macro scenario is adversely impacted by many factors. The obvious contradiction between the requirements to control inflation on the one hand and loosening of monetary policy to spur resumption of a higher growth trajectory, is just one of the many significant issues that our country faces. The uncertainties on coal mining, increased difficulties in obtaining environmental clearances and land acquisition for power and industrial projects continues to have an adverse effect. Perhaps most importantly, the continuous high fiscal and balance of payments deficits have caused a severe denting of confidence apart from the steady erosion in the value of the rupee. A slowdown in enquiries and longer than normal gestation in converting enquiries to orders and orders to revenue is visible. While the Company's decent order book will hold us in good stead, we cannot but help being concerned on the future .The Company's proven ability to target multiple sectors and geographies will hopefully help it tide over these concerns.

The overseas markets continue to present a reasonably good promise and we have further increased our marketing efforts by going into new countries in Africa and closer home in Bangladesh. We are largely focused on developing countries where the basic demand on infrastructure and urban development remains very strong. To a great extent the projects your Company aims at, are not profit oriented or privately financed, being more likely to be the subject of developmental finance, whether governmental or from multilateral development banks/bodies, hence these are not so strongly impacted by market related issues.

Both domestically and in the overseas markets there are strong signs of increased competition which in turn has the potential of affecting margins.

While we are confident that the strategic initiatives undertaken by the Company will greatly help us cope with the present gloomy scene, your Company believes it will be realistic to prune growth expectations which may now be in the 20-25% range and to be ready to face a slight dip in margins due to pressures of competition in a slowing market.

STRATEGIC INITIATIVES

Being in the Service sector, the Company's success has been founded on Customer satisfaction. Achieving Customer Satisfaction through Excellence in Project Management has been and will continue to remain the cornerstone of your Company's business philosophy. In recent years this has been accompanied by a strong initiative to diversify the market, both in terms of newer sectors and newer geographies. Initiatives aimed at enhancing business and improving our internal environment and processes are an ongoing feature. Briefly these include:

Focus on Improving Efficiency

Since inception the Company has largely adhered to the mantra "keep it simple". Notwithstanding the inherent complexities of our business and the environment in which we operate, we continue to have faith in and abide by this mantra. It is important however to make full use of the opportunities available by advances in IT to efficiently cope with the growth pangs that are an integral accompaniment to the rapid increase in our business volume. To this end the Company has greatly enhanced its in house IT capability and is well on the way to set up and utilize ERP systems.

Focus on HR

During the year employee strength crossed the 350 mark. The biggest challenges your Company faces are on the manpower front, in terms of attracting, retaining and providing appropriate training to its employees. The Company has been able to strengthen the entire gamut of HR functions from recruitment through training, performance related rewards, employee welfare, and enhancing overall employee satisfaction.

Your Company has always prided itself on its relatively high employee retention which in turn is largely on account of the informal, achievement oriented, merit and loyalty rewarding work atmosphere that the Company provides.

The Company continues to retain a lean, non hierarchical structure with an effective but simple, no frills office culture.

Marketing Initiatives

The Company's recent rapid growth has been built around its core competence of providing turnkey electro mechanical EPC services. All recent diversification has been achieved around this core competence and no unrelated diversification is planned unless there is a strong strategic fit. The Company is able to serve virtually all infrastructure and industrial sectors and it is no longer dependent on the thermal power sector as was the case a few years ago. Simultaneously the Company has targeted the overseas market and as the result of the success of these endeavors, the Company has been able to grow in a profitable manner. Not only does this protect the Company from slowdowns in any particular sector, it also results in the Company's revenue mix and major customers changing from year to year.

The Company intends to continue with this market diversification strategy. In fact the recent deterioration in the overall economic scene has made it imperative for us to redouble our marketing efforts as the strike rate is expected to go down.

Simultaneously the Company has been gravitating toward higher value jobs which is essential to sustain growth. This has made pre qualification issues ever more important and the Company is addressing this issue through suitable tie ups and partnerships.

Your Company has created new specialized groups to secure jobs in specialized sectors like Water and Waste Water treatment/infrastructure and Oil & Gas apart from the previously established group for Electrical Distribution and Rural Electrification.

As before, the Company continues to look at the consolidated Mechanical, Electrical and Public Health services (MEP) Sector which is expected to provide opportunities sometimes in the near future.

Quality Up gradation

Your Company secured ISO 9001 accreditation in 2007. This was a first milestone towards continuous quality enhancement. Your company is totally committed to a continuous ongoing initiative in this direction. Internal audits are carried out regularly. Recently our external auditors have conducted a rigorous audit and recertified our ISO 9001 accreditation.

DIVIDEND

Your Directors have pleasure in recommending an increased dividend of 20% i.e. Rs. 2/ per share of Rs. 10/- each on 10,490,000 equity shares of Rs.10/- each for the financial year ended 31st March, 2012, which, if approved at the ensuing Annual General Meeting, will be paid to all those members whose names appear in the Register of members as on the close of business hours on a book closure date that shall be separately identified. The dividend payable will result in an outgo of Rs. 24.38 Million.

The Directors are aware that the good financial results could have supported a higher dividend but have deliberately chosen to follow a cautious and conservative path on account of the uncertain outlook and to facilitate growth and sustainability

RESERVES

It is proposed to transfer Rs. 150.00 Million to the General Reserves of the Company, constituting 43.85% of the profits after tax made during the year.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956,the Board of Directors of the Company hereby state and confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. The Directors have selected such appropriate accounting policies and applied them consistently and have 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 the period.

iii. The Directors have 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 of fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going-concern basis.

PARTICULARS OF EMPLOYEES

Details of employees who were in receipt of remuneration in terms of the provisions of Section of 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given below

(Rs. in Millions)

Name of the Employee Designation Remuneration received during FY 2011-12

Mr Avinash C Gupta Chairman & Managing Director 14.63

INVESTMENT IN SUBSIDIARY COMPANY

During the period under review, your Company has acquired 58228 fully paid up equity shares constituting 100% shareholding of Arihant Flour Mills Pvt. Ltd. by way of purchasing the same from its erstwhile promoters; thereby making Arihant Flour Mills Pvt. Ltd. its Wholly Owned Subsidiary Company.

The facilities of the Company are suitable for setting up our facility for refurbishment / temporary storage of our construction equipment

A statement pursuant to section 212(3) of the Companies Act, 1956 relating to subsidiary company is attached.

The Annual Accounts of subsidiary company and the detailed information are available for inspection by the shareholders at the registered office of the Company and at the office of the subsidiary company.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Accounting Standards AS-21 of the Institute of Chartered Accountants of India, the consolidated financial statements have been prepared on the basis of the financial statements of the company and its subsidiary.

PUBLIC DEPOSITS

The Company has not accepted any deposit in the year under review.

CORPORATE GOVERNANCE REPORT

The corporate governance philosophy of your Company is driven by the interest of stakeholders and business needs of the Company. Therefore, enhancing corporate governance is on our highest priority in order to keep the trust of the shareholders and to fulfill our social responsibilities as a Company. The Directors adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India and your Company has implemented all the stipulations prescribed by SEBI.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report.

DIRECTORS

Mr. Arjun Gupta and Mr Arun Mitter being longest in office will retire at the ensuing AGM and they have offered themselves for reappointment.

AUDITORS

The Auditors Rajesh Suresh Jain & Associates, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received confirmation that their appointment, if made, would be within the limits prescribed under Sec. 224(1B) of the Companies Act, 1956.

AUDITORS' REPORT

The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments

I. Conservation of Energy

Though the operations of your Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. Technology Absorption

The company being a engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. Foreign Exchange Earnings & Outgo

Foreign Exchange Earnings - Rs. 1,12,69,93,670

Foreign Exchange Outgo - Rs. 42,46,10,966

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciation to the Banks, Central and State Governments, Public and Private Sector Customers in India and abroad and the Company's valued shareholders for their continued co-operation and support. Your Directors particularly wish to thank all the employees of the Company whose enthusiasm, vitality and application have been vital to the Company's business performance.

BY ORDER OF THE BOARD

AVINASH C GUPTA

Chairman & Managing Director

Place : New Delhi

Dated : 01-08-2012

Mar 31, 2011

To the Members

The Directors have pleasure in presenting their Annual Report on the business and operations of your Company along with the audited statement of accounts for the year ended 31 st March, 2011.

THE FINANCIAL HIGHLIGHTS ARE SET OUT BELOW

Year ended Year ended March 31, 2011 March 31, 2010 (Rs. in Million) (Rs. in Million)

Turnover (from operations incl export incentives) 2900.79 2003.70

Other Income 15.94 1.11

Total Income 2916.73 2004.82

Total Expenditure 2487.15 1667.14

Profit before Interest, depreciation and Tax (EBIDTA) 429.58 337.68

Less: Interest & finance charge 32.65 31.66

Less: Depreciation 11.58 13.53

Profit before Tax 385.35 292.48

Less: Provision for Tax-current tax 120.00 100.00

Less: Wealth Tax 0.13 0.09

Profit before Deferred Tax 265.22 192.39

Add/(Less): Deferred Tax Credit/(Debit) (3.22) (1.49)

Profit after Tax 262.00 190.90

Add/(Less): Income Tax for earlier years (1.74) -

Profit Available for Appropriation 260.26 190.90

Proposed Dividend including Dividend Tax 18.29 13.11

Transfer to General Reserve 150.00 150.00

Profit After Appropriation 91.97 27.79

Balance Brought Forward From Last Year 133.55 105.76

Profit & Loss Account balance 225.52 133.55

REVIEW OF OPERATIONS

Financial Highlights

The financial year 2010-11 has seen your Company sustain the growth momentum that it had built up in recent years. Your company achieved a gross operating turnover of Rs. 2900.79 Million for the year ended 31 st March, 2011 as against Rs. 2003.70 Million for the previous financial year registering an incremental turnover of Rs.897.09 Million and recording a growth rate of 45% over the previous year. The EBIDTA at Rs. 429.58 Million increased by 27.2% in comparision to the previous year. This rate of gross profit compares well with those of peers in the sector in which your Company operates. The profit after tax in the period under review increased by 37.82% to Rs. 262.00 Million as compared to Rs. 190.09 Million in the previous year.

The net worth of your Company as on 31 march 2011 was over Rs 1411 million

Sectoral Overview

Your Company's capabilities to undertake turnkey EPC Services has been deployed across diverse sectors. Whereas over 90% of the Company's business traditionally accrued from the Power Sector, in recent years your Company has been successful in diversifying across other sectors. In the year 2010-2011, for the first time the Industrial sector had the highest contribution to the turnover (48 %) with the Power Sector in second position at 30% (one third of which was from the Nuclear Power Sector). Our major customers include HINDALCO, Nuclear Power Corporation of India (NPCIL), Rashtriya Ispat Nigam Ltd (RINL), National Thermal Power Corporation (NTPC) and Wonji Showa sugar factory in Ethiopia.

The Water & Waste Water Infrastructure/Treatment Sector contributed around 12% of the years turnover.

The Electrical Substation & Distribution business for which a separate line of business was recently established contributed 8 % of the years turnover.

The Oil and Gas Sector contributed 3% of the years turnover.

Geographical Spread

Your Company has always strived to secure business in overseas markets particularly in Africa. During the year your Company continued to execute business secured in Ethiopia, Kenya, Fiji and Ghana. Around 21% of the Company's revenue came from overseas assignments.

Overseas Branch Offices

Your company continued to operate overseas branch offices in Fiji, Ethiopia and Kenya with the permission of RBI to cater to the needs of overseas projects.

Fresh business Secured

During the year under review your company intensified its strong marketing endeavors to secure business from existing as well as new customers. As a result your Company secured new business aggregating over Rs 4520 Million, of which over a third was from overseas. The quantum of fresh business secured during the year was an all time high and represented a 45% increase over the previous year. The largest share of orders were received from the Thermal Power sector (42%), followed by the Oil and Gas Sector(27%) and the Industrial and Infrastructure sectors(25%)

At present we have outstanding proposals worth over Rs 25 billion. Several involve integrated BoP scope(as distinct from smaller individual BoP packages) where individual order sizes may go up to Rs 2 billion.

ECONOMIC AND BUSINESS OUTLOOK

The year under review started with steady growth and increased confidence as the effects of the international financial crisis began to wear out and global recovery commenced. The long term scenario in our country in the areas in which we operate have been largely encouraging. The country's developmental needs in the power,

urban development and related infrastructure sectors are immense. Our governments focus on development in these areas is ensuring that our addressable market will remain robust. However towards the end of the year worrisome signs have appeared on the overall picture and are a cause of some concern. The macro scenario is adversely impacted by the governments attempts to control inflation. The increase in interest rates, the uncertainties on coal mining, increased difficulties in obtaining environmental clearances and land acquisition for power and industrial projects of interest to us is causing us concern. While the Company's ongoing business is not particularly impacted, there are concerns on the possible impact of an overall slowdown adversely affecting future business. The Company's proven ability to target multiple sectors and geographies will hopefully help it tide over these concerns.

The overseas markets continue to present good promise. Focused as we are largely on developing countries, the basic demand on infrastructure and urban development remains very strong. To some extent the projects we aim at are not profit oriented or privately financed, being more likely to be the subject of developmental finance, whether governmental or from multilateral development banks/bodies.

Both domestically and in the overseas markets there are strong signs of increased competition which in turn has the potential of affecting margins.

Nevertheless, your company believes that the overall business scenario continues to be encouraging, and, along with the strategic initiatives undertaken, be sufficient to sustain a robust growth. In the medium term, your Company expects, barring unforeseen circumstances, to be able to sustain a 30% or better growth rate.

STRATEGIC INITIATIVES

Being in the Service sector, the Company's success has been founded on achieving Customer Satisfaction. Achieving Customer Satisfaction through Excellence in Project Management has been and will continue to remain the cornerstone of your Company's business philosophy. In recent years this has been accompanied by a strong initiative to diversify the market, both in terms of newer sectors and newer geographies. Your Company has undertaken several strategic initiatives, governed in large part by this philosophy. Briefly, these include:

Enhanced Focus on HR

Your Company has always prided itself on its relatively high employee retention which in turn is largely on account of the informal, achievement oriented, merit and loyalty rewarding work atmosphere that the Company provides. With the recent substantial growth in business, the employee strength has also grown. During the year, employee strength crossed the 300 mark. The biggest challenge your Company faces is on the manpower front, both in terms of attracting and retaining fresh talent. It has become imperative to ensure appropriate training to our employees at all levels. The Company is now well on the way to achieve its objective of having an in house training facility. Apart from this your Company is progressing well in its endeavour to strengthen the entire gamut of HR functions from recruitment through training, performance related rewards, employee welfare, and enhancing overall employee satisfaction.

Marketing Initiatives

The Company's core competence of providing turnkey EPC services enabled it to serve virtually all infrastructure and industrial sectors and it is no longer dependent on the thermal power sector as was the case till recently. Apart from providing increased growth avenues, it also protects the Company from slowdowns in any particular sector. The company's revenue mix and major customers therefore keeps changing from year to year.

Your Company recoginises that sustaining the growth momentum built up in recent years will call for our business to gravitate toward higher value jobs. Furthermore it will be necessary to address pre qualification issues by forging suitable tie-ups. Your company is working along these lines and expects to be making several bids in the plus one billion rupees region in the coming months, both in India and overseas. These larger bids will be in the areas of Water and Waste Water Treatment/Infrastructure, Oil & Gas, as well as in comprehensive Balance of Plant packages in the Thermal Power Sector.

Your Company has created new specialized groups to secure jobs in specialised sectors like Water and Waste Water Treatment/Infrastructure and Oil & Gas apart from the previously established group for Electrical Distribution and Rural Electrification.

Your Company continues to look at the consolidated Mechanical, Electrical and Public Health services (MEP) Sector which is expected to grow in volume substantially. However the market for MEP services is still somewhat nascent and is expected to take off only when the real estate sector emerges out of its current travails.

Traditionally your Company has been doing civil construction only to the extent required as a part of its predominantly electro-mechanical contracts. One of your Company's recent assignments in the Nuclear Power Sector involved significant and highly specialized civil works. In another assignment involving a turnkey tank farm fuel terminal, the scope begins from a virgin site and the Company's responsibilities include complete site development and civil and structural works. With substantial civil experience having now being gained the Company has begun to look even at stand alone civil works particularly in overseas markets.

Quality Upgradation

Your Company secured ISO 9001 accredition in 2007. This was a first milestone towards continuous quality enhancement.. Your company is totally committed to a continuous ongoing initiative in this direction. During the year external auditors have conducted a rigorous audit and recertified our ISO 9001 accredition. Internal audits are carried out regularly.

INITIAL PUBLIC OFFER OF EQUITY SHARES OF THE COMPANY

During the year under review, your Company successfully made an Initial Public Offering of 29,90,000 equity shares (including 50,000 equity shares to eligible employees) of Rs. 10/- each constituting 28.50% of the post issue share capital of the Company at a premium of Rs. 230/- per equity share (Rs. 210/- per equity shares to eligible employees) and aggregating Rs. 71,66,24,000/-. The issue was opened for subscription to public on June 29, 2010 and closed on July 2, 2010. Your Company's issue received a tremendous response from the investors. The issue was oversubscribed by 13 times on overall basis. The Equity Shares of the Company got listed on National Stock Exchange and Bombay Stock Exchange. The trading in the fully paid shares of the Company commenced on July 16,2010 at BSE and NSE.

The funds raised are to be used for meeting working capital needs, procurement of construction equipment/maintenance facilities and general corporate purposes including training centre. By march 31, 2011 over 40% of the funds had been utilized for the purposes envisaged. This was lower than envisaged due to lesser construction equipment being procured due to slower start of some of the projects and inability to acquire suitable land for the maintenance facility (this has now been acquired in the first quarter of the current fiscal). Lesser funds were needed for working capital due to the same reason and also due to better cash flow management. Most of the remaining unutilized funds are expected to be utilized by the end of the current fiscal year.

DIVIDEND

Your Directors have pleasure in recommending a dividend of 15% i.e. Rs. 1.50/- per share of Rs. 10/- each on 10,490,000 equity shares of Rs. 10/- each for the financial year ended 31st March, 2011, which, if approved at the ensuing Annual General Meeting, will be paid to all those members whose names appear in the Register of members as on the close of business hours on August 4, 2011. The dividend payable will result in an outgo of Rs. 18.29 Million including the corporate dividend tax of Rs. 2.55 Million. The dividend pay out for the year under review is keeping in view the growth plans of the Company and is in accordance with the Company's policy and intent of meeting the need for capital to finance such plans through internal accruals to the maximum.

RESERVES

It is proposed to transfer Rs. 150.00 Million to the General Reserves of the Company, constituting 57.69% of the profits made during the year.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. The Directors have selected such appropriate accounting policies and applied them consistently and have 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 the period;

iii. The Directors have 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 of fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going-concern basis.

PARTICULARS OF EMPLOYEES

Details of employees who were in receipt of remuneration in terms of the provisions of Section of 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given below.

(Rs. in million)

Name of Employee Designation Remuneration Received during FY 2010-11

Mr Avinash C Gupta Chairman & 10.52 Managing Director

INVESTMENT IN SUBSIDIARY COMPANY

During the period under review, your Company has acquired 373,000 fully paid up equity shares constituting 100% shareholding of Woodlands Instruments Pvt. Ltd. by way of purchasing the same from its erstwhile promoters; thereby making Woodlands Instruments Pvt. Ltd. its Wholly Owned Subsidiary Company.

A statement pursuant to section 212(3) of the Companies Act, 1956 relating to subsidiary company is attached.

The Annual Accounts of subsidiary company and the detailed information are available for inspection by the shareholders at the registered office of the Company and at the office of the subsidiary company.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Accounting Standards AS-21 of the Institute of Chartered Accountants of India, the consolidated financial statements have been prepared on the basis of the financial statements of the company and its subsidiary.

PUBLIC DEPOSITS:

The Company has not accepted any deposit in the year under review.

CORPORATE GOVERNANCE REPORT

The corporate governance philosophy of your Company is driven by the interest of stakeholders and business needs of the Company. Therefore, enhancing corporate governance is on our highest priority in order to keep the trust of the shareholders and to fulfill our social responsibilities as a Company. The Directors adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India and your Company has implemented all the stipulations prescribed by SEBI.

The Board of Directors of the Company had also evolved and adopted a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. The Code is available on the website of the Company www.technofabengineering.com.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from Auditors, M/s Rajesh Suresh Jain & Associates confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report.

DIRECTORS

Mr. Pawan Chopra and Mr. V S Mathur being longest in office will retire at the ensuing AGM and they have offered themselves for reappointment. During the year Dr. Nitish Kumar Sengupta, director of the Company has resigned. The Board places on record its sincere thanks to the contribution made by him.

AUDITORS

The Auditors Rajesh Suresh Jain & Associates, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received confirmation that their appointment, if made, would be within the limits prescribed under Sec. 224(1B) of the Companies Act, 1956.

AUDITORS' REPORT

The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments.

PARTICULARS UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988:

I.CONSERVATION OF ENERGY

Though the operations of your Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. TECHNOLOGY ABSORPTION

The company being engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. FOREIGN EXCHANGE EARNINGS & OUTGO

Foreign Exchange Earnings - Rs. 70,71,52,934.55

Foreign Exchange Outgo - Rs. 25,46,46,615.59

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciation to the Banks, Central and State Governments, Private Sector Organizations and the Company's valued shareholders for their continued co-operation and support. Your Directors particularly wish to thank all the employees of the Company whose enthusiasm, vitality and application have been vital to the Company's business performance.

BY ORDER OF THE BOARD

AVINASH C GUPTA Chairman & Managing Director

Place : New Delhi. Dated : 02.07.2011

Mar 31, 2009

The Directors have pleasure in presenting their Annual Report on the business and operations of your Company along with the audited statement of accounts for the year ended 31 st March, 2009.

THE FINANCIAL HIGHLIGHTS ARE SET OUT BELOW

Year ended Year ended March 31, 2009 March 31, 2008 (Rs. in Million) (Rs. in Million)

Turnover (from operations incl 1493.06 809.95 export incentives)

Other Income 2.61 6.36

Total Income 1495.67 816.31

Total Expenditure 1277.12 718.81

Profit before Interest, depreciation and Tax (EBIDTA) 218.55 97.50

Less: Interest & finance charge 28.23 14.80

Less: Depreciation 10.19 2.60

Profit before Tax 180.13 80.10

Less: Provision for Tax- current tax 61.00 25.00

Less: Provision for Fringe Benefit Tax 0.95 0.63

Less: Wealth Tax 0.04 0.01

Profit before Deferred Tax 118.14 54.46

Add/(Less): Deferred Tax Credit/(Debit) <0.83> <1.62>

Profit after Tax 117.31 52.84

Add/(Less): Income Tax for earlier years <0.44> 0.23

Profit Available for Appropriation 116.87 53.07

Proposed Dividend including Dividend Tax 8.77 4.39

Transfer to General Reserve 50.00 20.00

Profit After Appropriation 58.09 28.68

Balance Brought Forward From Last Year 47.67 18.99

Profit & Loss Account balance 105.76 47.67

REVIEW OF OPERATIONS

Financial Highlights

The financial year 2008-09 has been a good year in terms of growth achieved by the Company. Your company achieved a gross operating turnover of Rs. 1493.06 Million for the year ended 31st March, 2009 as against Rs. 809.95 Million for the previous financial year registering an incremental turnover of Rs. 683.11 Million and recording a growth rate of 84.34% over the previous year. The EBIDTAat Rs. 218.55 Million is 14.64% of the Gross Turnover for the year under review as against 12.04% for the previous financial year. This rate of gross profit compares well with those of peers in the sector in which your Company operates. The profit after tax in the period under review increased by 120.21 % to Rs. 116.87 Million as compared to Rs. 53.07 Million in the previous year.

Sectoral Overview

The Power Sector continued, as before, to be the most important line of our business operations, contributing around 43% of the operating revenue of your Company. What was significant was the increasing contribution of nuclear power to this sector, which at 21 % is running virtually neck to neck with conventional thermal power. Our major customers in this sector includes LANCO and Gammon in the private sector and BHEL, GEB, MPSEB and PSEB in the Public Sector apart from Nuclear Power Corporation of India.

Our turnover from the water & waste water treatment section saw a major upward jump during the year, contributing 36.5% of our aggregate turnover. Alarge part of this was from overseas customers.

The Oil and Gas sector and the steel sector were the other significant contributors to the Companys business. The Electrical Substation & Distribution business for which a separate line of business was recently established also achieved success. A good volume of business was booked during the latter part of the year which would translate into revenue in the current year.

Geographical Spread

Your Company has always strived to secure business in new markets. During the year your Company continued to execute business secured in Ghana and Ethiopia. What was significant was that the export market contributed an all time high of Rs. 600 Million, i.e. around 40% of your Companys total turnover.

Overseas Branch Offices

Your company continued to operate overseas branch offices in Ghana and Ethiopia with the permission of RBI to cater to the needs of overseas projects in West and East Africa. A new branch office was recently established in Kenya.

Fresh Business Secured

During the year under review your company intensified its strong marketing endeavours to secure business from existing as well as new customers. As a result your Company secured new business aggregating over Rs 2700 Million, around 30% of which was from overseas.

The newly established "Electrical Sub Station and Distribution" Business unit succeeded in securing business worth around Rs 880 Million. This includes a significant order for electrical works for a sugar factory in Africa. The Power sector (including nuclear power) and the industrial infrastructure sectors accounted for your Companys new business in almost equal measure .While new orders were secured from our traditional customers like Lanco and BHEL, a breakthrough was made with the steel sector where orders were secured from Rashtriya Ispat Nigam Ltd Vizag, SAILand NMDC.

Several of our proposals continue to remain pending , in part due to deferment of some projects in the prevailing politico-economic scenario wherein customers are approaching their new investments with considerable caution. A large part of investments in the Power sector involves NTPC as the owner who directly handles all their contract awards and BHEL as a EPC contractor, who sub contracts many Balance of Plant Packages which are of interest to your Company. These two organizations along with Nuclear power Corporation of India are seen as key customers and your Company has several proposals pending or in the pipeline. A mega order for Civil works for a Exim Bank financed sugar factory in Africa has been delayed on account of legal issues which do not involve your Company. The establishment of a new stabler government and the apparent improvement of the economic scenario makes us hopeful of a good flow of new orders and robust growth in our new business.

ECONOMIC AND BUSINESS OUTLOOK

The year under review has been in an overall sense a bit of a rollercoaster. It started well, carrying forward the momentum built up on the back of sustained global growth. The subsequent events originating in the sub prime crisis and the subsequent worldwide economic slowdown cast a huge shadow on the overall economic scene. Notwithstanding these adverse developments, the long term scenario in our country in the areas in which we operate is still encouraging. The countrys developmental needs in the power, urban development and related infrastructure sectors are immense. Our governments focus on development in these areas is ensuring that our addressable market will remain robust. Political stability and steady albeit slow structural reforms should hopefully ensure the climate and liquidity necessary for major investments in these areas notwithstanding the less than encouraging global scene.

Even in our overseas markets a similar perspective prevails. Focused as we are largely on developing countries, the basic demand on infrastructure and urban development remains very strong. To a large extent the projects we aim at are not profit oriented or privately financed, being more likely to be the subject of developmental finance, whether governmental orfrom multilateral development banks/bodies.

Overall, your company believes that the business scenario continues to be encouraging, and, along with the strategic initiatives undertaken, be sufficient to sustain a robust growth. In the medium term, your Company expects, barring unforeseen circumstances, to be able to sustain a 25% growth rate.

STRATEGIC INITIATIVES

Being in the Service sector, our success has been founded on achieving Customer satisfaction. Achieving Customer Satisfaction through Excellence in Project Management has been and will continue to remain the cornerstone of your Companys business philosophy. Your Company has undertaken several strategic initiatives, governed in large part by this philosophy. Briefly, these include:

Enhanced Focus on HR

Your Company has always prided itself on its relatively high employee retention which in turn is largely on account of the informal, achievement oriented, merit and loyalty rewarding work atmosphere that the Company provides. With the recent substantial growth in business, our employee strength has also grown. This year we plan to cross the 200 mark. Your Company recognizes the necessity of evolving and implementing effective processes without compromising its existing strengths. The entire gamut of our HR functions from recruitment through training, performance related rewards and measurement of employee satisfaction are being strengthened and made more effective. Several employee welfare measures have also been put in place.

Marketing Initiatives

Sustaining growth calls for securing higher levels of business. This calls for developing newer customers, newer areas of work, as well as newer geographies. Our Marketing functions have been consolidated and strengthened with special focus on overseas business. As a result your Company could make several first time bids in the Asia Pacific, West and South East Asia and, Francophone West Africa. Early in the current year we have secured a medium sized contract in east Africa and are hopeful of a good order from the Pacific region.

Balance of Plant

Your Company, based on a mutual understanding is now co-bidding for gas based power plants in a joint venture with a partner. While the partner is responsible for design engineering and the core power plant, your Company takes on all residual responsibility of balance of plant including full responsibility for all site works.

Beyond Balance of Plant

While in the past your Company has executed a few contracts in water intake pipelines and treatment, the entire "Water" area is now the focus of our enhanced attention. Your Company is on the lookout for technology tie ups including outright purchase where a strategic fit is seen.

In time to come customers developing Malls, Hospitals, Large building complexes are expected to demand high end consolidated Mechanical, Electrical and Public Health services (MEP) instead of the current practice of employing contractors on a fragmented basis. This has already become an established practice in most places abroad. Your Company is looking closely at addressing this need and already has an MOU in place with an Italian Company for a tie up to facilitate entry in this field which may be slower in coming than earlier expected due to the recent slowdown in the realty and institutional sector.

Traditionally your Company has been doing Civil construction only to the extent required as a part of our predominantly electro-mechanical contracts. We are now bidding not only for contracts where Civil Works are the predominant component but also for stand alone civil works

QUALITY UPGRADATION

Your Company secured ISO 9001 accredition in 2007. This was a first step towards continuous quality enhancement. The subsequent acceptance of our credentials by Nuclear Power Corporation of India which was after a critical evaluation of our quality procedures has been the second major milestone in this direction. Your company is totally committed to a continuous ongoing initiative in this direction.

DIVIDEND

Your Directors have pleasure in recommending a dividend of 10% i.e. Re.1/-per share of Rs. 10/-each on 7,500,000 equity shares of Rs. 10/- each for the financial year ended 31 st March, 2009, which, if approved at the ensuing Annual General Meeting, will be paid to all those members whose names appear in the Register of members as on the close of business hours on July 4,2009. The dividend payable will result in an outgo of Rs.8.77 Million including the corporate dividend tax of Rs. 1.27 Million. The dividend pay out for the year under review is keeping in view the growth plans of the Company and is in accordance with the Companys policy and intent of meeting the need for capital to finance such plans through internal accruals to the maximum.

RESERVES

It is proposed to transfer Rs.50.00 Million to the General Reserves of the Company, constituting 42.78% of the profits made during the year.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956,the Board of Directors of the Company hereby state and confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. The Directors have selected such appropriate accounting policies and applied them consistently and have 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 the period;

iii. The Directors have 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 of fraud and other irregularities;

iv. The Annual Accounts have been prepared on a going-concern basis.

PARTICULARS OF EMPLOYEES

Details of employees who were in receipt of remuneration in terms of the provisions of Section of 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is given below.

Name of the Designation Remuneration received Employee during FY 2008-09

MrAvinash C Gupta Chairman & Managing Director Rs. 42,29,972/-

PUBLIC DEPOSITS

The Company has not accepted any deposit in the year under review.

DIRECTORS

Mr Pawan Chopra, MrArun Mitterand MrV.S. Mathur have been appointed as Additional Directors of the Company w.e.f. 08.06.2009 by the Board of Directors in terms of Section 260 of the Companies Act, 1956 . They are further proposed to be appointed as regular directors in the ensuing Annual General Meeting. Mr R. L. Telang and Dr. Nitish Sengupta being longest in office will retire at the ensuing AGM and they have offered themselves for reappointment.

AUDITORS

The Auditors Rajesh Suresh Jain & Associates, Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. The Company has received confirmation that their appointment, if made, would be within the limits prescribed under Sec. 224(1 B) of the Companies Act, 1956.

AUDITORS REPORT

The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments.

PARTICULARS UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES. 1988:

I. CONSERVATION OF ENERGY

Though the operations of your Company do not consume high level of energy, adequate measures have been taken by the management to conserve energy to the extent possible through conservation measures. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by the Company forms a very small portion of the total cost, the impact of change in energy cost on total cost is insignificant.

II. TECHNOLOGYABSORPTION

The company being a engaged in the business of providing complete engineering, procurement and construction services for auxiliary / balance of plant systems on a complete turnkey basis, constant efforts are made to develop new products/systems to give trouble free service in its line of activities.

III. FOREIGN EXCHANGE EARNINGS & OUTGO

Foreign Exchange Earnings - Rs. 455,089,351

Foreign Exchange Outgo - Rs.176,776,414

INDUSTRIAL RELATIONS

The Company enjoyed cordial relations with the employees during the year under review and the Management appreciates the efforts and dedication shown by all employees of the Company in offering their support and expects their continued support for achieving higher level of productivity to enable meeting the targets set for the future.

ACKNOWLEDGEMENT

Your Directors wish to express their sincere appreciation to the Banks, Central and State Governments, Private Sector Organizations and the Companys valued shareholders for their continued co-operation and support. Your Directors particularly wish to thank all the employees of the Company whose enthusiasm, vitality and application have been vital to the Companys business performance.

BY ORDER OF THE BOARD

AVINASH C. GUPTA CHAIRMAN & MANAGING DIRECTOR

Place : New Delhi. Dated : June 08,2009

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