Cover page (EMCO AR 2014-15)21-08- · PDF file50th Annual Report 2014-15 EMCO LIMITED 50th...

50 Annual Report 2014-15th

EMCO LIMITED


EMCO LIMITED

1

OUR VISIONTO BUILD A WORLD CLASS COMPANY THROUGH RELIABILITY ANDBE A GREAT PLACE TO WORK

OUR VALUES

` CUSTOMER CENTRIC

` RELIABILITY

` OWNERSHIP

` RESULT ORIENTATION

` TRUST & INTEGRITY

` OPENNESS & TRANSPARENCY

We believe that our value system inspires us to realize our goals. As we are all set to surge higher, our values fuel our aspirations to accomplish our vision.

At EMCO, our values and decisions are in unison, which strengthens us to consistently deliver excellent products and services, and also nurtures a culture that instills responsibility, reliability and growth.


EMCO LIMITED


EMCO LIMITED


EMCO LIMITED


EMCO LIMITED


EMCO LIMITED

1

CONTENTS

Financial Highlights 02

Directors’ Report 03

Statement pursuant to section 129 of the companies Act, 2013 10

Management Discussion & Analysis 15

Corporate Governance Report 31

Auditors’ Report 47

Balance Sheet 52

Statement of Profit & Loss 53

Cash Flow Statement 54

Note to Financial Statements 55

Auditors’ Report on Consolidated Financial Statements 78

Consolidated Annual Accounts 84


EMCO LIMITED


EMCO LIMITED

2

(All amounts in ` Lakhs, unless otherwise stated)

Particulars 2014-15 2013-14 2012-13 2011-12 2010-11

Revenue Account

Net Sales 91,223.28 83,067.93 66,880.96 80,952.67 104,946.98

EBIDTA 9,253.60 8,913.83 7,608.28 7,981.09 (274.32)

Profit Before Tax(PBT) 607.02 1,082.98 556.21 914.90 (6,561.14)

Taxation 281.57 376.13 267.76 108.55 (2,137.87)

Profit After Tax(PAT) 325.45 706.85 288.45 806.35 (4,423.27)

Capital Account

Share Capital 1,351.52 1,302.74 1,302.74 1,302.74 1,302.74

Share Warrants - - - - -

Reserves & Surplus 56,837.42 55,784.48 55,154.85 55,017.75 54,353.23

Shareholders' Fund 58,188.93 57,087.22 56,457.59 56,320.49 55,655.97

Borrowings 57,739.53 48,678.08 42,343.52 42,674.90 36,178.57

Financial Ratios

EBIDTA to Sales (%) 10.14% 10.73% 11.38% 9.86% -0.26%

PBT to Sales (%) 0.67% 1.30% 0.83% 1.13% -6.25%

PAT to Sales (%) 0.36% 0.85% 0.43% 1.00% -4.21%

Book Value (Face value ` 2 per share)

86.11 87.64 86.68 86.46 85.44

Debt Equity Ratio 0.99 0.85 0.75 0.76 0.65

EPS (`)- Basic 0.50 1.09 0.44 1.24 (7.05)

Dividend % 5% 5% 10% 10% 10%

FINANCIAL HIGHLIGHTS


EMCO LIMITED


EMCO LIMITED

3

DIRECTORS’ REPORT To,

The Members of EMCO Limited,

Your Directors take immense pleasure in presenting their 50th Annual Report on the business and operations of the Company and statement of accounts for the year ended 31st March 2015.

Financial Summary/Highlights

During the financial year, the performance of the Company is as under:

(Amounts in ` Lakhs)

Particulars Standalone2014-15 2013-14

Total Income 91,243.29 83,825.75Profit Before Taxation 607.02 1,082.98Less: Provision for Tax – Current 179.57 61.58

Deferred Tax 263.31 376.13Earlier Year Tax 18.26 -MAT Credit Entitlement (179.57) (61.58)

Profit After Taxation 325.45 706.85Add: Balance brought forward from previous year 20,964.90 20,334.26Profit Available For Appropriation 21,290.35 21,041.11APPROPRIATIONS:Proposed Dividend 67.58 65.14Tax on Proposed Dividend 13.76 11.07Balance carried to Balance Sheet 21,209.01 20,964.90TOTAL APPROPRIATION: 21,290.35 21,041.11

Overview of Company’s Financial Performance

During the year under review, Income from Sales and Services was ` 91,243 Lakhs against ` 83,826 Lakhs in the previous year.

The Company has earned a net profit of ` 325 Lakhs in the current financial year against the net profit of ` 707 Lakhs in the previous financial year.

Transfer to reserves

During the financial year, the Company did not transfer any amount to reserve.

Dividend

Considering the past performance of the Company and to maintain the consistent track record of dividend, your Directors are pleased to recommend for your approval a dividend of 10 paisa per equity share of ` 2/- each for the financial year 2014-2015 out of the current year’s profit.

Change in the nature of business

There was no change in the nature of business of the Company during the financial year.

Public Deposits

During the financial year 2014-15, 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.

Subsidiaries and Joint venture Companies

Pursuant to Section 136 of the Companies Act, 2013, the audited accounts of each of the Company’s subsidiaries are placed on the website of the Company. If any Member of the Company so desires, the Company will be happy to make available the Annual Accounts of the subsidiaries to him/her, on request. The physical copies of the aforesaid documents will also be available at the Company’s Registered Office for inspection during normal business hours on all working days, excluding Saturdays.


EMCO LIMITED

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Consolidation of Accounts

The performance and financial position of each of the subsidiaries, associates and joint venture companies are detailed in ‘Statement containing salient features of the financial statement of subsidiaries/associate companies/ joint ventures’ in form AOC I pursuant to Section 129 of the Companies Act, 2013 and given in ‘Annexure A’ to this report.

Directors and Key Managerial Personnel

During the financial year, Mr. Rajesh S. Jain (DIN: 00005829), Whole Time Director (WTD) designated as Chairman of the Company was going to be ceased his term as WTD on October 19, 2014.

The Nomination and Remuneration Committee of the Board of Directors had recommended to the Board for re-appointment of Mr. Rajesh S. Jain as WTD for the period of 3 years. The Board on recommendation of said committee had approved the same and recommended to the Members for their approval. Accordingly, the Members at their Annual General Meeting held on August 08, 2014 accorded their approval for such appointment.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with the Articles of Association of the Company, Mr. Rajesh S. Jain, WTD of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

During the year under review, on account of health issues Mr. K. N. Shenoy (DIN:00021373), Independent Director, resigned on May 14, 2014 from the Board of the Company. Further, the Board at their meeting held on October 17, 2014 appointed Mr. Amit Sudhakar as the Chief Financial Officer (CFO) of the Company in place of Mr. Ram Mundra who resigned as CFO on September 29, 2014.

Mr. Ganesh Tawari was appointed as the Company Secretary of the Company on February 26, 2015 in place of Mr. Pravin Kumar who resigned as Company Secretary on August 30, 2014.

Mr. K. N. Shenoy, Independent Director of the Company expired on August 18, 2014. The Board has placed on record it appreciation for the valuable contribution made and support extended by Mr. K. N. Shenoy during his tenure.

The Board has placed on record its appreciation for the valuable contribution made and support extended by Mr. Ram Mundra and Mr. Pravin Kumar during their respective tenure.

Pursuant to the provisions of Sections 149, 152 and 161 of the Companies Act, 2013, Mrs. Priyamvada Bhumkar (DIN: 00726138) was appointed as an Additional Director (Woman – Independent Director) of the Company. The Company has received a notice in writing from a member along with requisite deposit under Section 160 of the Companies Act, 2013, proposing her candidature for the office of Director. Your Directors recommend her appointment for a term of 5 (five) years.

Re-appointment of Independent Directors

Pursuant to Section 149 and other applicable provisions, if any, of the Companies Act, 2013 and rules framed there under, Mr. S. V. Deo (DIN:00210554), Mr. Bherulal Choudhary (DIN:00011905) and Mr. Sanjay Bhatnagar (DIN:00867848), Independent Directors of the Company will be completing their first term of appointment on the Board at the ensuing Annual General Meeting of the Company. The Company has received notices in writing from a member along with requisite deposit under Section 160 of the Act, proposing their candidatures for the office of Director. Your Directors recommend their re-appointment for a next term of 5 (five) years by passing a special resolution separately for each one of them.

The brief profiles of the Directors as required under Clause 49 of the Listing Agreement entered with the Stock Exchange(s) are disclosed in the notice convening 50th Annual General Meeting.

Declaration by independent directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

During the financial year, there were no such orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.


EMCO LIMITED


EMCO LIMITED

5

Adequacy of Internal Financial Control

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding the assets, the prevention and detention of frauds and errors, the accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosure.

Composition of Audit Committee

The Audit Committee comprises of three Non-Executive Directors, all of whom are Independent Directors. The Chairman and other Members of the Committee are having ability to read and understand financial statement. Besides, all members have knowledge of finance, accounting and law. Composition of the Audit Committee during the financial year 2014-2015 is as follows:

Sr. No. Name of the Committee Members Designation

1 Mr. Sanjay Bhatnagar Chairman

2 Mr. Bheru Choudhary Member

3 Mr. S. V. Deo Member

There were no matters during the financial year 2014-2015, wherein the Board did not accept recommendations given by the Audit Committee.

Establishment of Vigil Mechanism

The Company has established and adopted Vigil Mechanism and the policy thereof for directors and employees of the Company in accordance with the provisions of the Companies Act, 2013 as well as listing agreement. During the year under review, no personnel of the Company approached the Audit Committee on any issue falling under the said policy.

The vigil mechanism policy is available on the website of the company at link: http://www.emco.co.in/pdf/policy/Vigil%20Mechanism%20Policy.pdf

Particulars of remuneration to employees

The particulars of remuneration to directors and employees and other related information required to be disclosed under Section 197 (12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules are given in ‘Annexure B’ to this Report.

Management Discussion and Analysis

The Management Discussion and Analysis forms part of the Directors’ Report is annexed herewith as ‘Annexure C’.

Auditors

a) Statutory Auditors

The Company’s Auditors, M/s. P. Raj & Co.(FRN:108310W), and M/s. Chaturvedi & Shah (FRN:101720W), Chartered Accountants, Statutory Auditors hold office up to the conclusion of the forthcoming 50th Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received letter from them giving their consent to act as Auditors of the Company and stating that their re-appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013. Your Directors recommend their re-appointment for the second term of 2 years and 5 years respectively.

b) Secretarial Auditors

Makarand M. Joshi & Co., Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-2015, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for financial year 2014-2015 forms part of the Directors Report as ‘Annexure D’ to the Board’s report.

c) Cost Auditors

The Company has appointed M/s. Kishore Bhatia & Associates (FRN:00294), Cost Accountants, as Cost Auditors of the Company for the financial year 31st March, 2015 at a remuneration of ` 1 Lac. The Company maintains cost accounting records as required under Section 148 (1) of the Act. The Compliance certificate in this regard to be obtained from the Cost Accountants for the year ended 31st March 2015. Your Directors recommend to ratify remuneration payable to him for the year ended 31st March 2015 and 31st March 2016.


EMCO LIMITED

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d) Internal Auditors

M/s. Rahul Birla & Company (FRN:122589W), Chartered Accountants, were appointed the Internal Auditors of the Company for the financial year 2014-15. Based on the recommendation of the Audit Committee of the Company, the Board of Directors has appointed M/s. Rahul Birla & Company, Chartered Accountants as the Internal Auditors of the Company for the financial year 2015-16.

Explanations by the Board on qualification, reservation or adverse remark or disclaimer made by the

• Auditors in their report

There were no qualification, reservation, disclaimer and adverse remarks made by the Auditors of the Company in their audit report.

• Company Secretary in practice in his secretarial audit report

The qualification given by the Company Secretary in practice in his secretarial audit report:

Sr. No.

Observation Reply to the observation

1. The Company has made delay in filling of FORM–APR with respect to Overseas Direct Investment.

The delay in filing of Form- APR was inadvertent on the part of the Company.

Employees Stock Option Scheme (ESOS)

Your Company has always worked on the idea that the greatest strength is its human resources and it is this resource, which makes your Company a force to reckon with in the highly competitive environment. With this view your Company has Employee Stock Option Scheme 2006, Employee Stock Option Scheme 2011 and newly introduced Employee Stock Option Scheme 2015 for the employees. The details of options under the said Schemes as on 31st March, 2015 pursuant to the provision of SEBI (Share Based Employee Benefits) Regulations, 2014 as amended are given below:

Sr No. Particulars ESOS 2006 ESOS 2011

a. Options Granted 3,99,850 options 25,90,000 options

b. Pricing formula Options have been granted at the closing market price of the Equity Shares of the Company one day prior to the date of grant.

Options have been granted at the closing market price of the Equity Shares of the Company one day prior to the date of grant.

c. Option vested 16,000 Options 3,50,000 Options

d. Option exercised 38,000 Options -

e. Total number of Ordinary shares arising out of the Options

1,90,000 Shares -

f. Options lapsed 3,45,850 Options 12,40,000 Options

g. Variation of terms of Options N.A. N.A.

h. Money realized by exercise of the Options `171 Lakhs -

i. Total number of options in force 16,000 Options 13,50,000 Options

j (i) Detail of option granted to: senior management personnel

Name of employees are not disclosed in view of sensitivity involved.

Name of employees are not disclosed in view of sensitivity involved.

(ii) Any employee who receives in any one year of grant of options amounting to 5% or more of options granted during the year (2014-15)

N.A N.A

(iii) Employees who were granted options during any one year, equal to or exceeding 1% of the issued capital of the Company at the time of the grant.

- -

k. Diluted EPS calculated in accordance with Accounting Standard 20 issued by ICAI for the year ended 31st March 2015

- 0.50

l. (i) Method of calculation of employee compensation Cost. Intrinsic Value Intrinsic Value


EMCO LIMITED


EMCO LIMITED

7

(ii) Difference between the employee compensation cost so compared at (i) above and the employee compensation cost that shall have been recognised if fair value of options had been used.

NA NA

(iii) The impact of the difference on profits and EPS of the Company for the year ended 31st March, 2015 had fair value of options had been used for accounting employee Options.

NA NA

m. Weighted average exercise price and weighted average fair value of options granted during the year whose exercise price equals market price of stock on the grant date.

(there are no options granted whose exercise price either exceeds or less than the market price of the stock on the date of grant).

NA NA

n. A description of the method and significant assumptions used to estimate the fair values of options, including the following weighted average information:

i. Risk Free Interest Rate

ii. Expected Life

iii. Expected volatility

iv. Expected Dividends

The Price of the underlying share in market at the time of option granted

NA NA

Note: In view of the Sub division of the shares and in terms with the relevant provisions of ESOS – 2006 the Options stand adjusted along with entitlement to apply for 5 equity share of ` 2 each instead of one Equity shares of ` 10 each.

The Employee Stock Option Scheme 2015 was approved by the Members of the Company at their Extra Ordinary General Meeting held on 22nd January, 2015. However, the Company is yet to grant options out of this Scheme.

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 herewith as ‘Annexure E ’ to the Board’s report.

Number of Meetings of the Board

During the financial year, 9 (Nine) Board Meetings and 5 (Five) Audit Committee Meetings were held. The details of which are given in the Corporate Governance Report forming part of the Annual Report.

Directors’ Responsibility Statement

Pursuant to the requirement of Section 134(3)(c) of the Companies Act 2013, with respect to the Directors’ Responsibility Statement, it is hereby confirmed:

a) that in the preparation of the accounts for the financial year ended on 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit/ loss of the Company for the year ended on that date;

c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the Directors had prepared the accounts for the financial year ended on 31st March, 2015 on a ‘going concern’ basis.

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


EMCO LIMITED

8

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

Policy on directors’ appointment and remuneration

Policy for Selection and Appointment of Directors and their Remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is given in the Corporate Governance Report forming part of this report.

Particulars of loans, guarantees or investments under Section 186

Your Company being engaged in providing infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 with regards to loan made, guarantee given or security provided is not applicable. Whereas investment made during the year has been disclosed in notes to accounts of the Financial Statement.

Particulars of contracts or arrangements made with related parties

There were no new contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act 2013 during the financial year 2014-2015. Hence, particulars of related party contracts or arrangements in form AOC - 2 is not applicable

Corporate Governance Report

As required by clause 49 of the Listing Agreement with the Stock Exchange(s), a report on Corporate Governance and a certificate confirming compliance with requirement of Corporate Governance forms part of this Annual Report.

Training to Independent Directors

The Company had arranged a presentation on rights, duties and responsibilities of Independent Directors brought by the Companies Act, 2013 and listing agreement. The Independent directors of the Company attended the said presentation given by a practicing company secretary. The details of presentation is available at web link http://www.emco.co.in/other-information.html

Preferential allotment

The Members at their Extraordinary General Meeting held on 22nd January, 2015 passed a special resolution according their consent to the Board for issue and allotment of 24,39,025 equity shares of ` 2/- each at a premium of ` 39/- per share to EMCO Investments Private Limited, a promoter group company, on preferential allotment basis. Accordingly, the Board allotted EMCO Investments Private Limited 11,00,000 equity shares on 26th February, 2015 and 13,39,025 equity shares on 4th March, 2015. The Company has complied with all applicable provisions of the Companies Act, 2013, listing agreement and SEBI regulation.

Material changes and commitments affecting financial position between the end of the financial year and date of report

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

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are enclosed as ‘Annexure F’ to the Board’s report.

Risk Management Policy and Compliance Framework

The Board at their Meeting held on 17th October, 2014 constituted the Risk Management Committee and adopted the Risk Management Policy with a majority of Board Members, the details of which are as follows:

Sr. No. Name of the Committee Members Designation

1 Mr. Rajesh Jain, Chairman

2 Mr. Shailesh Jain Member

3 Mr. Shyam Sunder Deo Member

4 Mr. Amit Sudhakar, Chief Financial Officer Member

5 Mr. Ganesh Tawari, Company Secretary / Compliance Officer Member

The Company is mainly engaged in the Engineering Procurement and Construction (EPC) projects and Transformer business. The Company continuously identifies and mitigates the arising risks through a robust risk identification and management system.


EMCO LIMITED


EMCO LIMITED

9

Details of some of the risks involved in the business are discuss below:

1) Commodity Risk

The Company deals with various commodities, such as steel, zinc, copper and aluminium. Fixed price contracts can have a negative impact if input costs rise, if it is not appropriately hedged in time. By adding price escalation clause in most of the contracts, the Company passes off such negative impacts to its client, partially or completely.

2) Currency Risk

The Company is exposed to the risk of currency fluctuations, if any exposure remains open. The Company believes in keeping its currency exposures hedged. It measures and manages these risks centrally and carries out periodic reviews of these risks; whenever required external experts are also consulted.

3) Execution Risk

Execution delay may results in cost overruns and may also negatively impact company’s reputation. EPC projects could face delays due to external factors like Right of Way issues, manpower shortages, etc. The Company deploys a well-defined standard operating procedure (SOP) – from project planning to completion. It keeps a close watch and review these risks periodically and take timely course corrections.

Corporate Social Responsibility (CSR)

Detailed Information as required pursuant to the provisions of Section 134 of the Companies Act 2013, and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed herewith as ‘Annexure G ’ forming part of this report.

Board Evaluation

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the corporate governance report section in this Annual Report.

Insurance

All the assets of the Company are adequately insured.

Acknowledgment

Your Directors would like to express their grateful appreciation for the assistance, support and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors would also like to take this opportunity to express their appreciation to the dedicated and committed EMCOites for the contribution in trying to achieve the Company’s vision to “To Build A World Class Company Through Reliability and Be A Great Place To Work”.

On behalf of the Board of Directors For EMCO LIMITED Sd/-Place: Mumbai Rajesh S. Jain Date: 29th May, 2015 Chairman (DIN:00005829)


EMCO LIMITED

10

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EMCO LIMITED


EMCO LIMITED

11

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EMCO LIMITED

12

ANNEXURE BREMUNERATION DETAILS

[Pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

I. Information as per Rule 5(1) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-2015:

Sr. No. Particulars Ratio1. Mr. Rajesh S. Jain 8x

Apart from the above, none of the other Directors is paid remuneration in any form other than sitting fees.

2. Percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer and Company Secretary in the financial year 2014-2015:

Sr. No. Particulars % Increase1. Director (Mr. Rajesh Jain) There was no increase2. Chief Financial Officer

There was no increaseMr. Ram Mundra up to Sept. 2014)Mr Amit Sudhakar* w.e.f. 17.10.2014

3. Chief Executive Officer N.A.4. Company Secretary

Mr. Pravin Kumar up to August 2014There was no increase

Mr. Ganesh Tawari* w.e.f. 28.02.2015

* Percentage increase in remuneration will come in the next financial year.

3. Percentage increase in the median remuneration of employees in the financial year 2014-2015: There is no increase during the year.

4. The number of permanent employees on the rolls of the Company: 588 as on March 31, 2015

5. The explanation on the relationship between average increase in remuneration and Company Performance:

There is no increase in remuneration to employees as there is no growth in profitability of the company. The Company Inter alia considers following factors for deciding upon the increase in the remuneration of the employees:

(a) Individual performance/contribution of the Employee vis-à-vis Company Performance;

(b) Industry Benchmark

(c) Balance between fixed and incentive pay reflecting short and long term performance objective

6. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

The average increase in the remuneration of the KMPs was NIL % in the fiscal 2015 over the fiscal 2014, whereas the PAT growth of the Company during fiscal 2015 over fiscal 2014 was – 53.96%.

7. Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies.

The market capitalization of the Company has increased from ` 164.47 Crores as of March 31, 2014 to ` 225.03 Crores as of March 31, 2015 Hence there is increase in market capitalization of 36.82%. Over the same period, the price earnings ratio moved from 23.17 to 66.60 and Price Earnings Ratio has increased by 187.44%.

The closing price of the Company’s equity shares on the NSE and BSE as of March 31, 2015 was ` 33.05 and ` 33.30 respectively, representing a 72.46% (BSE) and 72.25% (NSE) decrease over the IPO price (Qualified Institutional Placement - ` 120)


EMCO LIMITED


EMCO LIMITED

13

8. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

Sr. No. Particulars % Increase1. Average percentile increase in the salary of employees other than managerial personnel There was no increase2. Average percentile increase in the salary of the managerial personnel There was no increase

9. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company :

Sr. No. Particulars % of PAT1. Mr. Rajesh Jain, Chairman and Managing Director 9.52%2. Mr. Ram Mundra, CFO (up to Sept.2014) 6.05%3. Mr. Amit Sudhakar, CFO ( w.e.f. 17.10.2014) 4.11%4. Mr. Praveen Kumar ( up to August 2014) 1.08%5 Mr. Ganesh Tawari (w.e.f. 28.02.2015 ) 0.54%

10. The key parameters for any variable component of remuneration availed of by the Directors:

There is no variable component in the remuneration of the Executive Directors. The Non-Executive Directors are not entitled to remuneration in any form other than the sitting fees for the meetings attended by them.

11. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year.

Following are the Executives who are not directors but receive remuneration in excess of the highest paid director during the year:

Particulars Ratio(Salary of Employee

to Highest paid Director)

Employed for the full financial year 2014-15

Mr. Akshaykumar Mathur 1.15x

Mr. B. J. Amritkar 1.95x

Mr. Deepak Khandelwal 1.67x

Ms. Meenakshi Jain 1.07x

Mr. Kishore Patel 1.05x

12. The Remuneration paid to all Directors is as per the Remuneration Policy of the Company.

II. Information as per Rule 5(2) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. Following are the employees who were employed throughout the financial year, and were in receipt of remuneration for not less than ` 60 lakh:

1. Mr. Bapu AmritkarDesignation President – Sales & MarketingRemuneration received ` 60,59,331/-Qualifications Diploma in Engineering ( Production )Age 51 YearsExperience 24 YearsDate of joining 2 November 2006Previous employment and designation Planet Power Tools FZE, Vice President - MarketingPercentage of equity shares held NilWhether relative of director or manager of the Company, if so, name of such director or manager

N.A.


EMCO LIMITED

14

2. Following are the employees who were employed throughout the financial year and were in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than ` 5 lakh per month:

Not applicable

3. Following are the employees who were employed throughout the financial year or part thereof and were in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company:

Not Applicable

On behalf of the Board of Directors For EMCO LIMITED Sd/- Place: Mumbai Rajesh S. Jain Date: 29.05.2015 Chairman (DIN:00005829)


EMCO LIMITED


EMCO LIMITED

15

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT ANNEXURE C

executing EPC works in the transmission sector, both for Substation and Transmission Lines. Repeat business from Central Utilities is a testimony to its excellence in execution of EPC contracts.

Your Company has successfully tested & commissioned more than 1000 KM EHV Transmission lines of voltage class up to 765KV on turnkey basis during last 5 years.

While the execution of 800KV HVDC Transmission Line is progressing well, your Company has received new orders from PGCIL for 765KV D/C Hyderabad-Wardha Transmission line and 765KV D/C Orai-Aligarh Transmission line. With a healthy order book position, the Transmission Lines business continues to be the growth engine of your Company and is now scouting for opportunities in select international markets to further fuel this growth. Your Company achieved significant improvement in productivity at its Vadodara Tower Steel Plant. It has also successfully executed its maiden order of Transmission Line Towers to Middle East and is now looking forward to growing in the International markets.

The Sub-Station business in India continues to be subdued due to low industrial growth. Our focus continuous to be on the closure of existing Projects and recovery of retention money.

Your Company has successfully executed its maiden International order for a Sub-station Project, on EPC basis for one 330KV and one 132KV substation in Africa.

During the year, your Company has received Sahbhagita Samman Award for assisting PGCIL for executing various delayed Transmission Line Projects of other companies and getting them completed and Vishesh Samman Award for Outstanding performance during emergency restoration of Transmission Lines for Delhi Transmission Limited, which had caused major power crisis in Delhi region.

Meter Business

Meters Business is also currently undergoing huge margin pressure and hence your Company is very selective in booking new orders. Currently, the Business is focusing on closing old issues and recovery of old payments.

International Business

International Business offers single point access to all its customers worldwide supplying Products and Solutions that meet various International standards like IEC, ANSI,, DIN, SANS.

Consistently meeting International quality standards, your Company has exported its Products and solutions to countries in Middle East, Africa and Asia Pacific. Its impressive International clientele ranges from Power Utilities, Oil and gas companies, Mining companies, and EPC companies.

In the current year, your Company registered year on year growth of more than 110% in International sales and 56% in International Order Booking.

Economy and Market Overview

The Indian economy grew at 7.3% in 2014-15 as compared to 6.9% in 2013-14. This improvement was accompanied by lower inflation, reduced current account deficit and higher foreign portfolio flows, indicating improved macro-economic stability.

Power sector in India

The Power sector in India continues to be bedeviled by structural issues ranging from fuel shortages, precarious financial health of State Power Distribution Companies and numerous regulatory challenges involving tariff fixation, land acquisition, environmental approvals etc. This along with inadequate or half-hearted pricing reforms have forced the Central and the State Governments to extend periodic fiscal bailouts to State Distribution Companies, thereby perpetuating the structural inefficiencies of the sector.

The new Government that came to power in May 2014 has taken some steps to address these structural challenges; auction of coal mines and increase in production from Coal India Limited, being two notable examples, but the situation is far from satisfactory. Aggressive bidding by Private players in coal auction has also raised concerns regarding the commercial viability of existing and upcoming thermal generation plants, with analysts projecting significant under-recoveries in fuel costs.

As such, the demand for power in India will continue to grow with increasing industrialization and faster urbanization, given the structural problems of the sector combined with very high levels of bad debts in the books of Public Sector Banks, an early revival of Investment cycle in the sector seems unlikely; notwithstanding early signs of a potential economic recovery.

Transformer Business

The Transformer business in India is under a lot of margin pressure due to low demand and excess capacity in the industry. While the low rate of industrial growth has kept the demand low, addition of new transformer manufacturing capacity has further worsened the situation. However, the silver lining for the Transformer business of your Company is that it has an order book of more than one year, with a healthy mix of domestic and international orders. One of the prestigious orders won by your Company is, supply of 15 nos. of 500 MVA 400 kV transformers to PGCIL during the next financial year. A feather was added in your Company’s cap when during the current year, a 200MVA 400 KV auto transformer successfully passed the short-circuit test at KEMA, Netherlands, yet again proving the technical strength of your Company.

Project Business

Your Company has consolidated its Project business resources by merging common functions of the Sub-Station and Transmission Lines businesses, helping it achieve significant reduction in costs. It takes pride in being one of the uniquely positioned companies in the country which is capable of


EMCO LIMITED

16

Going forward with a healthy order book position and good references, your Company is confident of substantially increasing the share of International Business in the overall business of the Company. This growth will be fuelled through a healthy mix of regions and customers across all product segments without excessive dependence on any specific product or Market.

Coal Mine-Indonesia

This was another difficult year for global coal markets, amidst a backdrop of collapsing energy prices, a strengthening US dollar, generally falling commodity prices and below-trend economic growth.

Production level of coal mines in Indonesia was exceeding 1.20 million tons during the year. In the short term, coal prices are expected to be under pressure due to global economic slowdown and sluggish growth of Power Generation in India.

Renewable Energy

Power generation from 10.5 MW Wind and 5 MW Solar installations were satisfactory during the current year and the trend is expected to continue during the next financial year. These two initiatives have helped reduce the carbon emissions thereby contributing to the ‘Green Cause’.

IPTC Project

In a highly volatile world, your Company wishes to have some portion of its income coming from fixed sources, which will provide stable cash flows and long term profitability to the Company.

With this objective the Company had participated in the PPP (Public-Private Partnership) opportunity opened in the transmission sector and won 3 projects; involving setting up 220KV/400 KV transmission line and sub-stations on BOOM (Build Own Operate Maintain) basis for 25/35 years.

In one of the projects, the Company has already signed the TSA (Transmission Supply Agreement), obtained Transmission License and all statutory approvals in the name of its wholly owned subsidiary; Shekhawati Transmission Service Company Ltd (STSCL). The project execution is now in progress. It is likely that one more project will be awarded to the Company in current financial year. The third award has been re-tendered by the utility due to their internal issues.

It is expected that the Company would invest in these projects, build and operate them for 25/35 years, and receive fixed annuity like income in the form of transmission charges from the users of transmission line (the distribution companies). These projects are with secure payment terms.

Internal Control

The Company has in place effective systems for internal control ensuring accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the Company and ensuring compliance with laws and

regulations. The Company has an exhaustive budgetary control system and the management regularly reviews the actual performance. The Company has also put in place a well-defined organizational structure, clear authority levels and detailed internal guidelines for conducting the business transactions.

The exposure in foreign currency transactions of the Company both in terms of import, export and exposure in overseas investments in subsidiaries have increased over the years. To mitigate the risks associated with the fluctuations in the foreign exchange, the Company is taking adequate measures, however, risk associated with mark to market concept remains.

Human Resource

Human Resource (HR) function at EMCO continues to partner the Business and provides important support during these challenging times. According to the need of hour, HR has come out with best possible initiatives to keep the momentum going. HR has been catering to various needs by effective talent acquisition, management and development activities. Our vision “To be a world class company through reliability and be a great place to work” has been central to these efforts .

Some of the Key initiatives; highly appreciated by Stake Holders are:

a) We continued with our initiatives towards Organisation Development and Change Management. Top Management Team has been role modeling by actively participating in the Change Management Programs like Personal Growth Laboratory, Empathetic Communication and Dream Matrix. In line with our Value of ‘Openess and Transparency” exchange of feedback among Top Management and their direct reportees took place in “Dream Matrix”. This initiative enhanced mutual respect and feeling of togetherness. In order to sharpen Leadership skills, members of top management are also undergoing “Leadership Coaching”.

b) In the competitive edge, training remains a vital tool to ensure competitiveness of the EMCOites. HR focused on technical training for skill enhancement, wherein the top management also actively shared their knowledge and key insights.

c) EMCOite engagement is one more key theme and HR continued its endeavours to create a highly engaged workforce by organising various events such as outbound activities, EMCO Premier League, Participation in badminton tournament, Celebration of Women’s Day, Gudi Padwa and other festivals.

d) During the year the Transformer Plant in Thane also signed a 3-year wage settlement agreement with the worker with improved productivity targets.

Environment and Safety:

In the journey of continual improvement and to make your Company safe and healthy, the following initiatives were implemented in the current financial year


EMCO LIMITED


EMCO LIMITED

17

1. Re- cascading the Innovative way used for communicating importance of safety for individual, for company and for society, Video on safety anthem name “Vada Suraksha” was developed. Audio for the same was inaugurated during 44th National Safety Day / Week Campaign 2014.

2. Your Company enthusiastically celebrated 44th National Safety Week across its all location and sites. This included live safety demonstration, health check-up, PPE exhibition, Yoga camp, CNG gas awareness, various safety competitions to motivate EMCOites, etc.

3. World Environment day was celebrated across all locations of your Company on 5th of June “World Environment Day”, thereby reiterating its commitment for environment protection.

4. Your Company undertook a ‘Tree Plantation Drive’ to demonstrate our Gratitude toward “Mother Earth”

5. Health camp and Yoga Awareness Programme were conducted to emphasise the importance of good health during the year.

CSR - Initiatives towards Corporate Social Responsibility:

Your Company has taken various initiatives towards the Corporate Social Responsibility through its extended arm EMCO Foundation. EMCO Foundation (EF) has been established to promote sustainability and welfare of humanity with a vision “To transform lives through sustainable development involving stakeholders.” Since inception EF has transformed more than 60,000 lives through initiatives in Education (Akshar), Environment (Ankur and Roshni) and Healthcare (Jeevan).

Education (AKSHAR):

With faith that education can change lives, EF has designed its umbrella program “Akshar” through three pronged approaches for under privileged school going children.

Firstly, through’ “Shiksha” project an initiative of creating interest among under privileged slum children of age group 6-14 years for education and motivating parents to enroll them for mainstream education.

Secondly flagship program Parivartan - a soft skill development initiative to transform lives.

Lastly under “Yashasvi” project your Foundation supports needy students of Municipal schools and Trust run school with scholarship support for continuing their education up to graduation.

Environment (ANKUR):

Under our ‘Ankur’ project we planted 200 trees. Your foundation has also done the awareness among EMCOites on preservation and promotion of good environment by planting trees and use ECO friendly product in day to day life. So far your foundation has planted 2260 trees.

Healthcare (JEEVAN):

Like earlier years, the blood donation camps were organized under project Jeevan. EMCOites participated enthusiastically and contributed in the noble cause of saving someone’s life.

Joy of Giving week (JOGW)

EF organizes JOGW every year at all its premises. This year too it was organized from 2nd to 9th October 2014. Our EMCOites and other stakeholders have donated various old useful articles and same was further handed over to NGO for distribution to the poor and needy persons.

Forward Looking Statements

Certain statements in the Management’s Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that those assumptions and expectations are accurate or will be realized. Actual results could differ from those expressed or implied. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

On behalf of the Board of Directors For EMCO Limited Sd/-Mumbai Rajesh S. JainMay 29, 2015 Chairman (DIN:00005829)


EMCO LIMITED

18

FORM NO. MR.3 ANNEXURE DSECRETARIAL AUDIT REPORT

For The Financial Year Ended 31st March, 2015[Pursuant to section 204(1) of the Companies Act, 2013 and rule 9 of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,The Members,EMCO LIMITEDN-104, MIDC Area,Jalgaon - 425003

We have conducted the Secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by EMCO LIMITED (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2015 (‘Audit Period’) complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under Foreign Direct Investment, Overseas direct Investment and External Commercial Borrowing (Foreign Direct Investment not applicable during the audit period)

(v) The Following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 notified on 28th October, 2014

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not Applicable during the audit period)

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client.

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not Applicable during the audit period) and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not Applicable during the audit period);

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India (Not notified during the audit period and hence not applicable to the Company).

(ii) The Listing Agreements entered into by the Company with stock exchanges.


EMCO LIMITED


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19

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except the Company has made delay in filling of FORM–APR with respect to Overseas Direct Investment.

We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes.

All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period;

• The Company has issued and allotted 24,39,025 Equity Shares having Face Value of `2/- each at a premium of ` 39/- each aggregating to ` 1,000,000,25/- on Preferential Allotment and Private Placement Basis.

• The Members of the Company had accorded their consent at the 49th Annual General Meeting of the Company under section 180(1)(a) and 180(1)(c) of the Act for the sum not exceeding of ` 2000/- Crores.

For Makarand M. Joshi & Co. Sd/- Makarand Joshi PartnerPlace: Mumbai FCS No. 5533 Date: 29-05-2015 CP No. 3662


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20

Form No. MGT-9 ANNEXURE EEXTRACT OF ANNUAL RETURN

as on the financial year ended on 31st March 2015

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of theCompanies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN L31102MH1964PLC013011

ii) Registration Date 19/09/1964

iii) Name of the Company EMCO LIMITED

iv) Category / Sub-Category of the Company Company having share capital

v) Address of the Registered office and contact details

N-104, MIDC Area, Jalgaon425003, Maharashtra

vi) Whether listed company Yes

vii) Name, Address and Contact details of Registrar and Transfer Agent,if any

Link Intime India Private Limited,C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhadup (W), Mumbai- 400 078. Tel No. 022 2594 6970

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. No.

Name and Description of main products/ services

NIC Code of the Product/ service % to total turnover of the company

1 Power Transformers 271 40%2 Transmission Line and sub-station 422 58%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES–

SR. N0

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY/ ASSOCIATE

%OF SHARES HELD

APPLICABLE SECTION

1 EMCO Power LimitedPlot no. F-5, Road No.28 Wagle Industrial Estate, Thane-400604 Maharashtra.

U40101MH2008PLC182215 Subsidiary 100% 2(87)

2 Shekhawati Transmission Service Company LimitedPlot No. C-97, 2nd floor Jan Path, Lalkothi Scheme, Jaipur-302015 Rajasthan.

U40109RJ2009SGC029173 Subsidiary 100% 2(87)

3 EMCO Renewable Energy LimitedPlot no. F-5, Road No.28 Wagle Industrial Estate, Thane-400604 Maharashtra.


4 EMCO Infrastructure LimitedPlot no. F-5, Road No.28Wagle Industrial Estate, Thane-400604 Maharashtra.



EMCO LIMITED


EMCO LIMITED

21

5 EMCO Transmission Networks LimitedPlot no. F-5, Road No.28Wagle Industrial Estate, Thane-400604 Maharashtra.

U40108MH2008PLC182186 Subsidiary 75.12% 2(87)

6 EMCO Overseas Pte. Limited80, Reflles Place, #25-01, UOB Plaza, Singapore (048624)

Foreign Company Subsidiary 100% 2(87)

7 PT Sentnco Investa NiagaMenara Prima Lantai 26 Unit A, JiLingkar Mega Kuningan, Jakarata 12950Indonesia

Foreign Company Subsidiary 98.80% 2(87)

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

Category ofShareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during

the year

Demat Physical Total% of Total

SharesDemat Physical Total

% of Total

Shares

A. Promoters(1) Indiana) Individual/ HUF 22365140 - 22365140 34.34 22365140 - 22365140 33.10 -1.24b) Central Govt. - - - - - - -c) State Govt.(s) - - - - - - -d) Bodies Corporate 5916833 - 5916833 9.08 8355858 - 8355858 12.37 3.65e) Banks / FI - - - - - - - -f) Any other.. - - - - - - - -Sub- Total (A) (1): 28281973 - 28281973 43.42 30720998 - 30720998 45.46 2.04(2) Foreigna) NRIs – Individuals - - - - - - - -b) Other – Individuals - - - - - - - -c) Bodies Corporate - - - - - - - -d) Banks / FI - - - - - - - -e) Any Other… - - - - - - - -Sub-Total (A) (2) - - - - - - - -Total Shareholding of Promoters (A) =(A)(1)+(A)(2)

28281973 - 28281973 43.42 30720998 - 30720998 45.46 2.04

B. Public Shareholding(1) Institutions - - - - - - - -a) Mutual Funds / UTI 3229500 2000 3231500 4.96 3229500 2000 3231500 4.78 -0.18b) Banks/ FI 300 - 300 0.00 205009 - 205009 0.30 0.30c) Central Govt. - - - - - - - -d) State Govt.(s) - - - - - - - -e) Venture Capital

Funds- - - - - - - -

f) Insurance Companies

574320 - 574320 0.88 384838 - 384838 0.57 -0.31

g) FIIs 136839 4500 141339 0.22 50000 4500 54500 0.08 -0.14


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22

h) Foreign Venture Capital Funds

- - - - - - - -

i) Others (specify) - - - - - - - -Sub-Total (B)(1): 3940959 6500 3947459 6.06 3869347 6500 3875847 5.74 -0.32(2) Non-Institutionsa) Bodies Corporate 12689822 2675 12692497 19.49 11611713 2675 11614388 17.19 -2.30 i) Indian - - - - - - - - ii) Overseas - - - - - - - -b) Individuals - - - - - - - -i) Individual

shareholders holding nominal share capital upto`1 lakh

12729431 237516 12966947 19.91 14063911 229516 14293427 21.15 1.24

ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

5620176 55000 5675176 8.71 5940878 - 5940878 8.79 0.08

c) Others (specify)i) Shares held by

Pakistani citizens vested with the Custodian of Enemy Property

- - - - - - - -

ii) Other Foreign Nationals

- - - - - - - -

iii) Foreign Bodies - - - - - - - -iv) NRI/ OCBs 740218 - 740218 1.14 799900 - 799900 1.19 0.05v) Clearing Members/

Clearing House693103 - 693103 1.06 202517 - 202517 0.30 -0.76

vi) Trusts 450 - 450 0.00 450 - 450 0.00 0.00vii) Limited Liability

Partnership- - - - - - - -

viii) Foreign Portfolio Investor (corpo-rate)

- - - - - - - -

ix) Qualified Foreign Investor

- - - - - - - -

x) Directors/ Relatives 62975 - 62975 0.10 62975 - 62975 0.09 -0.01xi) HUF 76057 5 76062 0.12 64500 5 64505 0.10 -0.2Sub- Total (B) (2) 32612232 295196 32907428 50.53 32746844 232196 32979040 48.80 -1.73Total Public Sharehold-ing (B)=(B)(1)+ (B)(2)

36553191 301696 36854887 56.58 36616191 238696 36854887 54.54 -2.04

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - -

Grand Total (A+B+C) 64835164 301696 65136860 100.00 36616191 238696 67575885 100.00 0.00


EMCO LIMITED


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23

(ii) Shareholding of PromotersSl. No.

Shareholder’s Name

Shareholding at the beginning of the year Shareholding at the end of the year % change in share holding

during the year

No. of Shares %of total Shares of the

company

%of Shares Pledged /

encumbered to total shares

No. of Shares %of total Shares of the

company

%of Shares Pledged /

encumbered to total shares

1. EMCO Investments Private Limited

5916833 9.08 94.52 8355858 12.37 0 3.29

2. Triptee R Jain 1362200 2.09 - 1362200 2.02 0 -0.073. Shailesh Jain 6299340 9.67 100.00 6299340 9.32 0 -0.354. Rajesh Jain 9599345 14.74 65.62 9599345 14.21 0 -0.535. Ratna Jain 4354255 6.68 71.39 4354255 6.44 0 -0.246. Yachana S Jain 750000 1.15 - 750000 1.11 0 -0.04

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)Shareholding at the beginning of the year Cumulative Shareholding during the year

No. of shares %of total shares of the company


EMCO INVESTMENTS PRIVATE LIMITEDAt the beginning of the year 5916833 9.08 28281973 43.42Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/ decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

1100000 & 1339025 Equity Shares were allotted on preferential basis on 26.02.2015 & 04.03.2015 respectively

3.29 1100000 & 1339025 Equity Shares were allotted on preferential basis on 26.02.2015 & 04.03.2015 respectively

2.04

At the end of the year 8355858 12.37 30720998 45.46

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sl. No.

For Each of the Top 10 Shareholders Shareholding at the beginning of the year

Shareholding at the end the year

No. of shares %of total shares of the

company


1 RELIANCE CAPITAL TRUSTEE CO. LTD. A/C RELIANCE DIVERSIFIED POWER SECTOR FUND

3056455 4.69 3056455 4.52

2 ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD 3074222 4.72 2988922 4.423 RELIANCE CAPITAL LIMITED 1943000 2.98 1943000 2.884 SAMEER SHANTILAL MUTTHA 900240 1.38 900240 1.335 A E SECURITIES & INVESTMENTS PVT LTD 900000 1.38 900000 1.336 FARIDA ASIF PETIWALA 827873 1.27 822390 1.227 MAHIMA STOCKS PRIVATE LIMITED 822315 1.26 771199 1.148 LATA BHANSHALI 600000 0.92 -- --9 AADI FINANCIAL ADVISORS LLP 579585 0.89 579585 0.86

10 THE ORIENTAL INSURANCE COMPANY LIMITED 574320 0.88 384838 0.5711 VALLABH ROOPCHAND BHANSHALI -- -- 393200 0.58


EMCO LIMITED

24

(v) Shareholding of Directors and Key Managerial Personnel:Sl. No.

For Each of the Directors and KMP Shareholding at the beginning of the year

Cumulative Shareholding During the year



Rajesh S. Jain - (Whole Time Director)At the beginning of the year 9599345 14.74 15901685 24.41Date wise Increase / Decrease in Shareholding During the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

No change during the year No change during the year

At the End of the year 9599345 14.21 15901685 23.53Shailesh S. Jain (Non Executive Director)At the beginning of the year 6299340 9.67 15901685 24.41Date wise Increase / Decrease in Shareholding During the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc):


At the End of the year 6299340 9.32 15901685 23.53Bherulal Choudhary – Independent DirectorShyam Sunder Deo - Independent DirectorSanjay Bhatnagar - Independent DirectorAt the beginning of the year

None of the Directors hold shares in the CompanyDate wise Increase / Decrease in Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc):At the End of the yearAmit Sudhakar (Chief Financial Officer)At the beginning of the year 3000 0.00 15901685 24.41Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc):


At the End of the year 3000 0.00 15901685 23.53Ganesh Tawari (Company Secretary)At the beginning of the year

NIL

Date wise Increase / Decrease in ShareholdingDuring the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc):At the End of the year


EMCO LIMITED


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25

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 486,78,07,646 - - 486,78,07,646

ii) Interest due but not paid 3,91,918 - - 3,91,918

iii) Interest accrued but not due 69,40,163 - - 69,40,163

Total (i+ii+iii) 487,51,39,727 - - 487,51,39,727

Change in Indebtedness during the financial year

• Addition 1,09,87,77,696 - - 1,09,87,77,696

• Reduction 19,26,32,230 - - 19,26,32,230

Net Change 90,61,45,466 - - 90,61,45,466

Indebtedness at the end of the financial year

i) Principal Amount 5,77,39,53,112 - - 5,77,39,53,112

ii) Interest due but not paid 30,735 - - 30,735

iii) Interest accrued but not due 111,44,245 - - 111,44,245

Total (i+ii+iii) 5,78,51,28,092 - - 5,78,51,28,092

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director or Whole-time Directors and/or Manager:Sl. no.

Particulars of Remuneration Mr. Rajesh Suresh Jain, Whole Time Director

Total Amount (In `)

1. Gross salary(a) Salary as per provisions contained in section17(1) of the Income-tax Act,

196112,93,182 12,93,182

(b) Value of perquisites u/s17(2) Income-tax Act,1961 18,06,818 18,06,818(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - -

2. Stock Option - -3. Sweat Equity - -4. Commission - -

As % of profit - -others, specify…. - -

5. Others, please specify - -Total (A) 31,00,000 31,00,000Ceiling as per the Act 31,00,000 31,00,000


EMCO LIMITED

26

B. Remuneration to the directors:Sl. No.

Particulars of Remuneration Name of Directors Total Amount in `

Mr. S. V. Deo Mr. B. Choudhary Mr. S. Bhatnagar3. Independent Directors • Fee for attending board committee meetings 225000 300000 100000 625000 • Commission - - - • Others, please specify - - -Total (1) 225000 300000 100000 6250004. Other Non-Executive Directors Mr. Shailesh S. Jain

• Fee for attending board committee meetings 155000 - - 155000• Commission - - - -• Others, please specify - - - -

Total (2) 155000 - - 155000Total (B)=(1+2) 380000 300000 100000 780000

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTDSl. No. Particulars of Remuneration Key Managerial Personnel

Company Secretary CFOMr. Pravin Kumar

(April 2014 to Aug. 2014)Mr. Ram Mundra

(April 2014 to Sept 2014)Gross salary(a) Salary as per provisions contained in section 17(1) of

the Income-tax Act, 19613,34,276 19,48,044

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 16,500 19,800(c) Profits in lieu of salary under section 17(3) Income-tax Act,

19612. Stock Option - -3. Sweat Equity - -4. Commission

- as %of profit- others, specify…

5. Others, please specify - -Total 3,50,776 19,67,844

Mr. Ganesh Tawari (w.e.f.28.02.2015)

Mr. Amit Sudhakar (w.e.f. 17.10.2014)

Gross salary(a) Salary as per provisions contained in section 17(1) of the

Income-tax Act, 19611,72,161 13,18,037

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 3,300 19,800(c) Profits in lieu of salary under section 17(3) Income-tax Act,

19612. Stock Option - -3. Sweat Equity -4. Commission

- as %of profit- others, specify…

5. Others, please specify -Total 1,75,461 13,37,837


EMCO LIMITED


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27

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:Type Section of the

Companies ActBrief Description Details of Penalty

/ Punishment / Compounding fees

imposed

Authority (RD / NCLT Punishment/

Court)

Appeal made, Com-pounding if any

(give Details)

A. COMPANYPenalty

NONEPunishmentCompounding

B. DIRECTORSPenalty


C. OTHEROFFICERSIN DEFAULTPenalty



EMCO LIMITED

28

ANNEXURE F(A) CONSERVATION OF ENERGY - (i) the steps taken or impact on conservation of energy: 1. High bay light 250W MH replaced by 120W LED high bay light in the Tanking and Testing area, which saved 720

units of energy per month. 2. Maintained the power factor to 0.99 by adding adequate capacitor bank as per demand. 3. Converted the fuel of thermic fluid heater from LDO to PNG, which provides pollution-free environment and results

in reduced operating cost. 4. Optimized utilization of centralized air conditioners and lighting system to reduce energy consumption. 5. Utilization of DG set as per required load, helps to reduce the fuel and operational expenses. 6. Reduced average zinc consumption from 5% to 4.45%, resulting in conservation of precious natural resource.

Overall, a saving of 93.7 MT of zinc achieved, amounting to a saving of INR 1.55 Cr. 7. Replaced 75 HP compressor with a 20 HP screw compressor, resulting in to reduction of electricity consumption by

50,892 units. 8. Switched over to 11 kV express feeder from the rural feeder, obviating the need for standby generation of DG

power by 11,600 units. II. Proposals under implementation for reduction of energy consumption: 1. Replacement of 250W/150W street metal halide lamps by energy-efficient 100W LED lamps. 2. Insulation of chilling pipeline to enhance the Chilling Plant efficiency. 3. Modification of air pipeline to improve the efficiency of Air Compressor. 4. To maximize the use of cheaper source of energy, i.e. thermic-fluid, for heating of ovens, thereby saving the costlier

electrical power consumption As a result of energy conservation initiatives taken by the Company during the year 2014-15, there was considerable

saving of power consumption over the previous year. (ii) the steps taken by the Company for utilizing alternate sources of energy; Conversion of the thermic-fluid fuel from LDO to PNG for pollution-free environment and reduced operating cost. (iii) the capital investment on energy conservation equipments; 20 HP screw compressor - INR 4.26 Lakhs 11 Kv express feeder - INR 7.36 Lakhs(B) TECHNOLOGY ABSORPTION - (i) the efforts made towards technology absorption; • Development of Furnace Transformer Technology • Development of 260MVA, 400kV, 1-phase GT with single-wound-limb construction • Use of Yoke Shunt Technology for reduction of stray losses and formulation of design guidelines (ii) the benefits derived like product improvement, cost reduction, product development or import substitution: • Reliable and optimized design duly validated by advanced software; • Economical and Compact design due to adoption of single-wound-limb construction • Development of energy- efficient low loss transformer design technology (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the

financial year) (a) the details of technology imported-NIL (b) the year of import-NIL (c) whether the technology been fully absorbed-NIL (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof-NIL and (iv) the expenditure incurred on Research and Development. ` 78.79 Lakhs(C) Foreign exchange earnings and Outgo The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year

in terms of actual outflows. A. Foreign Exchange Earning= ` 279.97 Crores B. Foreign Exchange Outgo = ` 212.36 Crores


EMCO LIMITED


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29

Report on CSR Activities ANNEXURE GEstablished in the year 2007 in Thane, EMCO Foundation (EF) the CSR arm of EMCO Ltd is a registered Public Charitable Trust with a vision “To transform lives through sustainable development involving stakeholders” in India. EF is engaged in a variety of people-centric, social development projects aiming at transforming lives of communities with whom it is involved.

The Foundation works with both urban as well as rural communities. Thrust areas of EF are as follows:-

1. Educational Development

2. Environmental Conservation

3. Health Care

More details are available about these projects on our website:- www.emcofoundation.com

Through these projects, EF has so far reached 61,898 people and transformed their lives.

The Web-Link to the CSR Policy is given below, where the CSR Policy is available in detail.http://www.emco.co.in/pdf/policy/CSR%20Policy.pdf

1. CSR Expenditure and Monitoring of Programs:

A board level committee as constituted pursuant to the provision of Section 135 (1) of the Companies Act 2013 and Rules made there under shall recommend the yearly budget of CSR programs to be undertaken by the company by itself or though implementing agency(ies). The Board of Directors shall allocate requisite fund out of profits earned by the company for the execution of CSR Programs.

CSR Committee of the Board shall directly monitor CSR programs carried by the Company itself or through implementing agencies and report to the Board. Detail report on CSR shall also be reported in the Directors’ Report and published in Annual Report of the Company and will be made available on Company’s website.

2. The composition of CSR Committee.

• S. V. Deo - Chairman

• Bheru Choudhary - Member

• Sanjay Bhatnagar - Member

3. Average Net Profit of the company for the last three financial year: ` 691 Lakhs

4. Prescribed CSR expenditure (two percent of the amount as in item 3 above): ` 13.82 Lakhs

5. Detail of CSR spent during the financial year ;

a) Total Amount spent for the financial year : ` 23.50 Lakhs

b) Amount unspent, if any: Nil


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30

(All amounts in ` Lakhs, unless otherwise stated)(1) (2) (3) (4) (5) (6) (7) (8)Sl. No.

CSR Project or Activity Identified

Sector in which the Project is Covered

Projects or Programs Amount Outlay

(budget) Project

or Program

wise

Amount Spent on Projects or Programs

Cumulative Expenditure

up to the reporting

period

Amount Spent: Direct or through

implementing agency

Local Area or Other

Specify the state

and district where

projects or programs

were undertaken

Direct Expenses

Overheads

1 Project Yashasvi Education Thane, Jalgaon, Vadodara

“Thane-Maharashtra Jalgaon-Maharashtra Vadodara-Gujarat”

7.50 7.67 0.21 7.88 Direct: EMCO Foundation

2 Project Parivartan Education Thane, Jalgaon “Thane-Maharashtra Jalgaon-Maharashtra”

9.50 8.27 1.23 9.50 EMCO Foundation with NGO: ZEP Social Action & Trust

3 Project Shiksha Education Thane, Jalgaon “Thane-Maharashtra Jalgaon-Maharashtra”

6.00 5.95 0.11 6.06 EMCO Foundation with NGO: Pratham Mumbai Education Initiative

4 Project Jeevan Health Care Thane, Jalgaon, Vadodara


0.30 0.02 - 0.02 “EMCO Foundation with Kai. Wamanrao Oak Raktpedhi, Thane. Indian Red Cross Society Blood Bank, Jalgaon. Madhavrao Golwarkar Swayamsevi Blood Bank, Jalgaon. Indu Blood Bank, Vadodara.”

5 Project Ankur Environment Thane Thane-Maharashtra

0.20 0.02 - 0.02 EMCO Foundation with NGO: Hariyali

6 Daan Utsav Other Thane, Jalgaon, Vadodara


- 0.02 - 0.02 EMCO Foundation with NGO: GOONJ

Total 23.50 21.95 1.55 23.50 We hereby declare that the implementation and monitoring of the CSR Policy are in compliance with the CSR Objectives and Policies of the Company.


EMCO LIMITED


EMCO LIMITED

31

CORPORATE GOVERNANCE REPORT(Pursuant to Clause 49 of the Listing Agreement)

1. Corporate Governance Philosophy

Corporate Governance is a system by which an organization is managed and controlled within the parameters laid down by regulatory bodies. The Company is committed to good Corporate Governance and to be an active and responsible corporate citizen wherever it does business. The Company fully understands that Corporate Governance is a key element in enhancing overall stakeholders’ value. The Company continuously strives to achieve business excellence and reach higher standards in conducting its corporate and business affairs through transparency, accountability, empowerment and integrity, keeping in mind the interest of all stakeholders. The Company makes continuous efforts to adopt the best Corporate Governance practice which goes beyond the regulatory framework.

The Company has articulated and implemented its corporate values across all its business establishments and continuously monitors its effectiveness through various processes, apart from initiating the process of Corporate Governance in compliance with Clause 49 of the Listing Agreement with Stock Exchange(s) by implementing not only the mandatory items but also non mandatory items, details of which are enumerated in the paragraph here-in-below.

The Company has adopted the six core values to shape the Company’s thinking and conduct. These Corporate values are briefly described below:

a) Customer Centric: Customer would be the reason for Company’s existence.

b) Reliability: The Company shall make sure that the products and services it offers and the commitment it makes to stakeholders are most reliable.

c) Ownership: Every employee working on any business process works like an owner of that process i.e. having feeling for its success and failure, bearing responsibility for the process and doing best of his ability.

d) Result Orientation: The Company shall achieve its results with utmost grit and determination against all odds.

e) Trust and Integrity: The Company shall endeavor continuously to build trust in its dealings with all its stakeholders and perceived as a Company with people of high integrity.

f) Openness and Transparency: The Company shall create a work culture where openness to dialogue, expressing one’s point of view frankly is encouraged and shall be transparent in providing reliable and pertinent information.

2. Board of Directors

A) Composition:

In terms of the Company’s Corporate Governance Policy, all statutory and other significant material information are placed before the Board to enable it to discharge its responsibility of strategic supervision of the Company.

The Board of the Company is a balanced Board, comprising of Executive and Non-Executive Directors. The Executive Director of the Company is the Chairman of the Board. Whereas majority of the board members are Non-executive Directors and Independent Professionals.

The Board of Directors in their meeting held on 31.03.2015 appointed Mrs. Priyamvada Ashesh Bhumkar (DIN:00726138) as Woman (Non- Executive & Independent) Director of the Company w.e.f. 1st April, 2015.

The following is the composition of the Board as on 31st March 2015:-

Category Number of Directors Percentage of Total Number of Directors

Executive Director 1 20

Non-executive Director 1 20

Independent Director 3 60

Total 5 100

The Company has thus complied with the requirement of having at least half of the Board members comprising of Independent and Non-executive Directors.


EMCO LIMITED

32

Director Designation Category Particulars of other Directorship, Committee Memberships/ Chairmanships

*Other Direc-torships

#Committee Memberships

#Committee Chairmanships

Executive DirectorsMr. Rajesh S. Jain (1) Chairman Promoter 7 - -Non-Executive DirectorsMr. Shailesh S. Jain (1) Vice Chairman Promoter 7 2 -Mr. S. V. Deo Director Independent - 2 -Mr. Bheru Choudhary Director Independent 1 3 2Mr. Sanjay Bhatnagar Director Independent - 1 1

* Excludes Directorship held in Private Companies, Foreign Companies, Companies formed under Section 25 of the Companies Act, 1956 & 2013 and Directorship held as an alternate Director.

# Committee includes Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Com-mittee. It also includes Membership/Chairmanship of EMCO Limited.

(1) Mr. Rajesh S. Jain and Mr. Shailesh S. Jain are related to each other as brothers.

- Mr. K. N. Shenoy has resigned from the position of independent director w.e.f. May 14, 2014

B) Meetings and Attendance:

During the financial year ending on 31st March 2015, 9 meetings of the Board of Directors were held as follows and gap between two meetings were well within a period of 120 days :-

Sr. No. Date of Board Meeting Board Strength Number of Directors Present1 25th April 2014 6 52 23rd July 2014 5 53 17th October 2014 5 34 19th December 2014 5 35 21st January 2015 5 56 24th February 2015 5 37 26th February 2015 5 38 4th March 2015 5 39 31st March 2015 5 4

The attendance at the Board Meetings and at the Annual General Meeting (AGM) during the financial year is as follows:-

Sr. No.

Name of Director Number of Board Meetings attended

Attendance at the last AGM

1 Mr. Rajesh S. Jain 8 No2 Mr. Shailesh S. Jain 5 Yes 3 Mr. K. N. Shenoy* 0 No4 Mr. S. V. Deo 8 Yes5 Mr. Bheru Choudhary 9 No6 Mr. Sanjay Bhatnagar 4 No

* Mr. K. N. Shenoy has resigned from the position of independent director w.e.f. May 14, 2014

C) Non-executive Directors’ Compensation and Disclosures:

The Non-executive Directors were paid sitting fees for attending the meetings of Board and for attending the meetings of the Board Committees, namely

i) Audit,

ii) Stakeholders Relationship,

iii) Nomination & Remuneration,


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iv) ESOP and

v) Finance and Administrative

All such fees/compensation paid/payable to Non-executive Directors (i.e. other than Whole-time Director) of the Company is fixed by the Board of Directors within the limit approved by the Shareholders. The Company has not been paying any other remuneration to Non-executive Directors (including Independent Directors), which requires previous approval from the Shareholders. During the financial year the Company did not have any material pecuniary relationship or transactions with any of the Non-executive Directors.

Name Sitting Fees (`)

Mr. Shailesh S. Jain 155000

Mr. Bheru Choudhary 300000

Mr. S. V. Deo 225000

Mr. K. N. Shenoy* -

Mr. Sanjay Bhatnagar 100000

Total 780000

*Mr. K. N. Shenoy has resigned from the position of independent director w.e.f. May 14, 2014.

D) Code of Conduct

The Company has laid down a Code of Conduct for Board Members and Senior Management Personnel of the Company, which has also been posted on the web site www.emco.co.in. The Company has received from all its Directors and Senior Management personnel affirmation of compliance with the Code of Conduct for the year ended 31st March 2015 .

Duties of Independent Directors:

The duties of Independent Directors of the Company, as laid down under Schedule IV to the Companies Act, 2013, are incorporated herein pursuant to Clause 49 of the Listing Agreement with Stock Exchanges. It shall be the duty of Independent Directors to:

• undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company;

• seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the Company;

• strive to attend all meetings of the Board of Directors and of the Board Committees of which they are a member;

• participate constructively and actively in the Board Committees in which they are chairpersons or members;

• strive to attend the general meetings of the Company;

• ensure, where they have concerns about the running of the Company or a proposed action, that these are addressed by the Board of Directors;

• keep themselves well informed about the Company and the external environment in which it operates;

• not to unfairly obstruct the functioning of an otherwise proper Board or Board Committee;

• pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the Company;

• ascertain and ensure that the Company has an adequate and functional vigil mechanism and ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use;

• report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct;

• act within their authority and assist in protecting the legitimate interests of the Company, shareholders and its employees;

• not to disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans and unpublished price sensitive information, unless such disclosure is expressly approved by the Board of Directors or required by law.


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Declaration by Chief Executive Officer (CEO)

I, Rajesh S Jain, Chairman of the EMCO Limited hereby declare that all the Board members and Senior Managerial Personnel have affirmed for the year ended 31st March 2015 compliance with the Code of Conduct of the Company laid down for them pursuant to clause 49(II)(E) of the Listing Agreement with stock exchange(s).

Mumbai, Sd/-May 29, 2015 Rajesh S. Jain Chairman

3. COMMITTEES OF THE BOARD

Currently, there are Seven Committees of the Board such as Audit Committee, Stakeholders Relationship Committee, Nomination & Remuneration Committee, ESOP Committee, CSR Committee, Finance and Administrative Committee and Risk Management Committee. The terms of reference to the Board Committees are determined by the Board from time to time. Meetings of each Board Committee are convened by the respective Committee Chairman. The minutes of the Board Committee meetings are placed for information and noting of the Board.

A. Audit Committee

(i) Brief description of Terms of Reference:

The roles, powers and functions of Audit Committee specified by the Board are in conformity with the requirements of clause 49 of the Listing Agreement as well as Section 177 of the Companies Act, 2013. Terms of reference of the Committee includes inter alia;

1. Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure correctness, sufficiency and credibility of the Company’s Financial Statements.

2. Recommending to the Board, the appointment and removal of external and internal auditors and fixation of their remuneration.

3. Approving the payments to statutory auditors for other services rendered by them.

4. Reviewing with the management and external auditors, annual financial statements and results and auditors’ report thereon before submission to the Board for approval, with particular reference to:

• Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of section 134 of the Companies Act, 2013 .

• Changes, if any, in accounting policies and practices and reasons for the same.

• Major accounting entries involving estimates based on the exercise of judgment by management.

• Significant adjustments made in the financial statements arising out of audit findings.

• Compliance with listing and other legal requirements relating to financial statements.

• Disclosure of any related party transactions.

• Qualifications in the draft audit report.

5. Reviewing the adequacy of internal control systems with the management, discussion with internal auditors, significant findings and follow up on them.

6. Reviewing with the management, the quarterly financial statements before submission to the Board for approval.

7. Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency

monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

8. Review and monitor the independence and performance and effectiveness of audit process.

9. Approval or any subsequent modification of transactions of the company with related parties.

10. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.


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11. Reviewing findings of internal investigations by the Internal Auditors into matters like suspected frauds / irregularities / failures of internal control systems of material nature and reporting to the Board thereon.

12. Discussing pre audit discussion about nature and scope of statutory audit and post audit discussion on areas of concern.

13. Discuss with Internal Auditors any significant finding and follow up thereon.

14. To look into the reasons for substantial defaults in the payment to the debenture holders, shareholders ( in case of non –payment of declared dividends ) and creditors. .

15. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.

16. Reviewing issues related to risk management and compliances.

17. Reviewing financial statements, including Investments in subsidiary Companies.

18. Reviewing the functions of the Whistle Blower mechanism.

19. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

20. Scrutiny of Inter-Corporate loans & investments.

ii) Composition of the Committee, Name of the members and the Chairman and Attendance:

The Audit Committee comprises of three Non-Executive Directors, all of whom are Independent Directors. The Chairman and other Members of the Committee are having ability to read and understand financial statement. Besides, all members have knowledge of finance, accounting and law. Composition of the Audit Committee during the year 2014-15 and status of the attendance of the members was as follows:

Name of the Director Position No. of Meetings held during the year

No. of Meetings attended

Mr. Sanjay Bhatnagar Chairman 5 2Mr. Bheru Choudhary Member 5 5 Mr. S.V.Deo Member 5 4

iii) Meetings of the Audit Committee :

The Audit Committee met five times during the financial year 2014-15 i.e. on 25th April 2014, 23rd July 2014, 17th October 2014, 21st January 2015 and 31st March, 2015. The maximum time gap between two meetings was not more than 120 days. Necessary quorum was present at all the meetings of the Committee held during the year under review.

The former Chairman of the Audit Committee Mr. S. V. Deo, was present at the 49th Annual General Meeting, and replied to the shareholder’s queries. The Company Secretary has acted as the Secretary of the Committee. The representatives of Internal Auditor and Statutory Auditors have attended the meetings as invitee.

B) Nomination and Remuneration Committee:

The Nomination and Remuneration Committee is constituted pursuant to Section 178 of Companies Act, 2013 and Clause 49 of the Listing Agreement with Stock Exchanges, to fix compensation / remuneration for Managing / Whole-time Directors, KMP and relative of Directors.

i) Terms of Reference:

The Nomination and Remuneration Committee is empowered to determine, inter-alia, include the following:

1. Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management employees and their remuneration.

2. Identifying and selection of candidates for appointment as Directors / Independent Directors based on certain laid down criteria

3. Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions

4. Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board.


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ii) Composition, Name of the Member, Chairperson and Attendance at Meetings:

The Nomination and Remuneration Committee comprises of three Directors. The Chairman of the Committee is a Non-Executive and Independent Director. The details of names of members and Chairman of the Nomination and Remuneration Committee along with status of attendance are as under:

Name of the Directors Position No. of Meetings held during the year


Mr. Bheru Choudhary (Non Executive - Independent Director)

Chairman 4 4

Mr. Shailesh S. Jain (Non Executive Director)

Member 4 3

Mr. S. V. Deo (Non Executive - Independent Director)

Member 4 4

The Committee met four times during the financial year 2014-15 on 25th April 2014, 4th September 2014, 26th February 2015 & 31st March 2015.

iii) POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Nomination and Remuneration (N&R) Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors and WTD and their remuneration. This Policy is accordingly derived from the said Charter.

1. Criteria of selection of Non Executive Directors a. The Non Executive Directors shall be of high integrity with relevant expertise and experience so as to have a

diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

b. In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the independent nature of the Directors vis-à-vis the Company so as to enable the Board to discharge its function and duties effectively.

c. The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.

d. The N&R Committee shall consider the following attributes / criteria, while recommending to the Board the candidature for appointment as Director.

i. Qualification, expertise and experience of the Directors in their respective fields;

ii. Personal, Professional or business standing;

iii. Diversity of the Board.

e. In case of re-appointment of Non Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.

REMUNERATION POLICY

The Remuneration Policy of EMCO Ltd. (“the Company”) is designed to attract, motivate, improve productivity and retain manpower, encouraging initiatives, personal growth and team work and inculcating a sense of belonging and involvement. The policy reflects the Company’s objectives for good corporate governance as well as sustained long term value creation for shareholders.

This Remuneration Policy applies to directors, senior management including its Key Managerial Personnel (KMP) .

1. Remuneration to Managing/Whole-time / Executive / Managing Director, KMP and Senior Management Personnel:

a. The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.

b. The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.

2. Remuneration to Non- Executive / Independent Director: a. The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible


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under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors

b. All the remuneration of the Non- Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.

c. An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company.

d. Any remuneration paid to Non- Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied:

i. The Services are rendered by such Director in his capacity as the professional; and

ii. In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.

3. Remuneration to Key Managerial Personnel and Senior Management:

a. The remuneration to Key Managerial Personnel and Senior Management shall consist of fixed pay and may include incentive pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with the Company’s Policy.

b. The Fixed pay shall include monthly remuneration, employer’s contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from to time.

c. The Incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management, to be decided annually or at such intervals as may be considered appropriate.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

iv) Details of Remuneration to Executive/ Whole-time Directors: (Amount in `)

Rajesh S. Jain (WTD)Salary 12,93,182Perquisite* 18,06,818Stock Option -Commencement Date** 20.10.2014Cessation Date 19.10.2017Notice Period 6 months

* Perquisites include Gratuity, Provident fund, Medical Reimbursement, Leave Travel Concession, etc.

** Commencement dates are the re-appointment/appointment of respective Whole Time Directors.


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(C) Stakeholders Relationship Committee

(i) Composition and Status of the Attendance:

The Company has a Stakeholders Relationship Committee. The Committee is headed by Mr. Bheru Choudhary, an Independent - Non-Executive Director and comprises of the following members in the financial year 2014-15 :

Name of the Directors

Position No. of Meeting held during the year

No. of Meeting attended

Mr. Bheru Choudhary Chairman 4 4Mr. Shailesh S. Jain Member (Non-Executive Director) 4 4

The Committee met four times during the financial year 2014-15 on 25th April, 2014, 23rd July, 2014, 17th October, 2014 and 21st January, 2015 .

(ii) Name and designation of Compliance Officer:

Mr. Ganesh Tawari, has been appointed as Compliance Officer and can be contacted on the following address:

Address Telephone Number Fax Number Email-id.Plot No. F-5, Road No. 28, Wagle Industrial Estate, Thane-400604. Maharashtra, India

91-22- 4040 4646 91-22-2582 0571 [email protected]@emco.co.in [email protected]

(iii) Terms of Reference:

This Committee looks into issue of duplicate share certificates, split, consolidation and subdivision of share certificates, re-materialisation of shares and investors grievances.

The Committee has formed a Sub–Committee titled “Share Transfer Committee” to look into the matter related to Transfers / Transmissions / Dematerialisation of shares. The Committee has delegated the authority for approving transfers/transmission of shares besides taking note of beneficiary position under the demat mode. Approvals are done on a fortnightly basis. The minutes of Share Transfer Committees are periodically placed before the Investors/Grievances Committee.

(iv) Complaints/request received from Shareholders during the period 1st April 2014 to 31st March 2015 and its status:

During the financial year 39 Complaints were received from the shareholders and all of which were resolved to the satisfaction of shareholders. No Complaint was pending at the end of the year. Break-up of requests /complaints received during the year are as under:

Sr. No

Nature of Complaints Opening Balance Received Resolved Closing Balance

1. Non-receipt of Certificate 0 0 0 02. Non-receipt of Dividend 0 20 20 03. Non-receipt of Demat credit 0 0 0 04. Non-receipt of rejected Demat

Request Form0 0 0 0

5. Non-receipt of Annual Report 0 5 5 06. Others 2 14 16 0

TOTAL 2 39 41 0D) CSR Committee:(i) Brief description of Terms of Reference:

The CSR Committee constituted by the Board pursuant to the provisions of section 135 of the Companies Act, 2013 and rules made thereunder.

The Committee shall, (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the

activities to be undertaken by the company as specified in Schedule VII; (b) recommend the amount of expenditure to be incurred on CSR activities and (c) monitor the Corporate Social Responsibility Policy of the company from time to time.


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ii) Composition of the Committee, Name of the members and the Chairman and Attendance:

The CSR Committee comprises of three Non-Executive Directors, all of whom are Independent Directors. Composition of the CSR Committee during the year 2014-15 and status of the attendance of the members was as follows:

Name of the Director Position No. of Meetings held during the year


Mr. S. V. Deo Chairman 1 1Mr. Bheru Choudhary Member 1 1 Mr. Sanjay Bhatnagar Member 1 0

E) Risk Management Committee

In terms of Clause 49 of the Listing Agreement, the Board constituted a Risk Management Committee on 17th October, 2014.

The terms of reference of the Risk Management Committee includes the following:

• Identify and manage existing and new risks in a planned and coordinated manner with minimum amount of disruption and cost.

• Develop a “risk” culture that encourages all staff to identify risks and associated opportunities and to respond to them with effective actions

To realize the risk management objective, the company aims to ensure that: • The identification and management of risk is integrated in the day to day management of business; • Risks are identified, assessed in the context of the company’s appetite for risk and their potential impact on the

achievement of objectives, continuously monitored and managed to an acceptable level; • The escalation of risk information is timely, accurate and gives complete information on the risks to support

decision making at all management levels; • Risk is primarily managed by the business function transacting the business which gives rise to the risk; and • All employees actively engage in risk management within their own areas of responsibility

Composition of the Risk Management Committee:

Name of Members Position No. of Meetings held during the year


Mr. Rajesh S. Jain Chairman 1 1Mr. Shailesh S. Jain Member 1 1 Mr. Shyam Sunder Deo Member 1 1Mr. Amit Sudhakar, CFO Member 1 1Mr. Ganesh Tawari, Company Secretary and Compliance Officer

Member 1 1

F) Other Functional Committees

Besides the above-referred Committees, the Company has also the following committees of Directors: 1. ESOP Committee (Compensation Committee) of Directors that is administering and implementing the Employee

Stock Option Scheme and allotment of shares on preferential basis. 2. Finance and Administrative Committee.

4. SUBSIDIARY COMPANIES: 1. The Company has following Non-material unlisted subsidiaries: A. Direct Subsidiaries : I. Indian : • EMCO Power Limited • EMCO Renewable Energy Limited • Shekhawati Transmission Service Company Limited • EMCO Infrastructure Limited II. Foreign :

• EMCO Overseas Pte Limited (Singapore)


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B. Step Down Subsidiaries : I. Indian : • EMCO Transmission Networks Limited II. Foreign : • PT Setenco Investa Niaga (Indonesia)

C. Joint Venture Companies: • Shyam EMCO Infrastructure Ltd

• Kalinga Energy and Power Ltd.

2. The Audit Committee of the Company reviews, periodically the financial statements of its subsidiary companies.

3. The Minutes of the Board of Directors of subsidiary companies are placed at the Board meeting of the Company. All significant transactions and arrangements entered into by the subsidiary companies have been brought to the attention of the Board of Directors of the Company.

5. DISCLOSURES:

(a) Disclosure on Related Party Transactions:

Related Party transactions during the year have been disclosed vide Note No. 31. in Notes forming Part of financial statement as per the requirements of “Accounting Standard 18 – Related Party Disclosure” issued by the Institute of Chartered Accountants of India. The same were placed before the Audit Committee from time to time as required. None of these transactions have any potential conflict with the interests of the Company. No related party transaction was outside the normal course of business of the Company and all related party transactions were entered on arms length basis.

(b) Details of non-compliance by the Company, penalties and strictures imposed on the Company by the Stock Exchanges or SEBI or any statutory authorities or any matter related to capital markets during the last three years:

The Company has complied with the statutory provisions, rules and regulations relating to the capital markets and no penalties have been levied or strictures have been imposed by the Stock Exchanges, SEBI or any statutory authority on matters relating to capital markets during the last three years.

(c) Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:

The Company has adopted the Whistle Blower Policy and placed it on the website of the Company. During the period under review, no personnel of the Company approached the Audit Committee on any issue falling under the said policy.

(d) Details of compliance with the mandatory requirements and adoption of the non-mandatory requirements of this clause:

The Company has complied with all the mandatory requirements as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges. The former Chairman of the Audit Committee Mr. S. V. Deo, was present at the 49th Annual General Meeting, and replied to the shareholder’s queries. Further the Company has adopted non-mandatory requirement of Clause 49 of the listing agreement relating to constitution of the Remuneration Committee of Directors, details of which have already been given in earlier para of this report.

(e) Board Disclosures- Risk Management:

The General aim of the Company’s risk management policy is to maximize opportunities and minimize losses, which is closely aligned to improving safety not only to physical risk perspective of the employees but also including finance, assets and property of the Company. In line with this general aim of risk management, the Company has evolved a comprehensive risk management policy to identify, assess and mitigate all foreseeable areas of risks. As a policy, risks associated with the business of the Company generally and risk specific to the Company are periodically brought to the attention of the Board. The same are reviewed and assessed and suitable risk mitigation procedures are laid down by the Board and implemented.

(f) Proceeds from public issues, right issues, preferential issues etc: During the year the Company has raised fund from preferential issue by way of issuing and allotting 24,39,025

equity shares of `2/- each at a premium of `39/- each to EMCO Investments Pvt. Ltd. , a promoter group company.


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6. GENERAL BODY MEETINGS

The Annual General Meetings (AGMs) of the Company have been held at the registered office of the Company at N – 104, MIDC Area, Jalgaon – 425 003 in the last three years at the time and date given below:

AGM Year Day & Date Time Special Resolution passed

47th 2011-12 Friday, September 21, 2012

11.30 a.m. Yes: for re-appointment and remuneration of director’s relatives (Office or Place of Profit) Ms. Meenakshi Jain w.e.f. 24.09.2012

48th 2012-13 Wednesday, September 25, 2013

11.30 a.m. No Special Resolution was passed at this meeting.

49th 2013-14 Friday, August 8, 2014

11.30 a.m. Yes.1. For creating a charge on movable and immovable

properties of the company pursuant to Section 180(1) (a) of the Companies Act, 2013

2. For borrowing money with the money already borrowed but not exceeding `2000 Crores.

No resolution was passed through postal ballot last year.

Extra Ordinary General Meeting (EGM):

The Company held an EGM on 22.01.2015 and Members present thereat passed Special resolutions for a) alteration of articles of association of the company b) approval to ESOS Scheme 2015 for the eligible persons of the Company c) Approval to ESOS Scheme 2015 for the eligible persons of Subsidiaries and/or Associates Companies of the Company and d) issue of shares to promoters group company on a preferential basis

As required, a poll (electronically and by physical ballot) was conducted for all the aforesaid resolutions and the same were passed with requisite majority.

7. MEANS OF COMMUNICATION

1. The quarterly, half-yearly and annual financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board of Directors through online compliance dissemination portals being mandated by Stock Exchanges. The result(s) were published in ‘Business Standard’ and ‘Lokmat’- Jalgaon Edition and is also displayed on Company’s website www.emco.co.in. The Annual report is also posted to all shareholders.

2. The official news releases whenever made by the Company are immediately forwarded to stock exchanges before publication. They are also displayed on the website of the Company.

3. The Company holds press/analyst meets and makes necessary presentation to apprise and make public the information relating to the Company’s working and future outlook and are also put on the Company’s website.

4. In compliance of Clause 47 (f) of the listing agreement the Company has created e- mail id [email protected]/ [email protected] exclusively to redress investors/shareholders grievances and maintain relationship with them.

8. GENERAL SHAREHOLDERS’ INFORMATION

(a) Appointment/Re-appointment of Directors:

Pursuant to Section 152 of the Companies Act, 2013 and any enactment thereto Mr. Rajesh S. Jain (DIN:00005829) retire by rotation and being eligible, offer himself for re-appointment.

Pursuant to Sections 149 and 160 of the Companies Act,2013 and rules made thereunder, Mrs. Priyamvada A. Bhumkar (DIN:00726138) who was appointed as an additional Director (Woman- Independent Director) in respect of which a notice in writing received from member along with requisite deposit as per Section 160 of the Companies Act, 2013 proposing her candidature for the office of Director, subject to the approval of members at the ensuing AGM.

Further pursuant to Section 149 and other applicable provisions, if any, of the Companies Act, 2013 (“Act”) and rules framed there under, Mr. S. V. Deo (DIN:00210554), Mr. Bheru Choudhary (DIN:00011905) and Mr. Sanjay Bhatnagar (DIN:00867848), Independent Directors of the Company who will be completing their first term on the Board at the ensuing Annual General Meeting of the Company. The Company has received notices in writing from


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members along with requisite deposit under Section 160 of the Companies Act, 2013, proposing their candidatures for the office of Director. Your Directors recommend their re-appointment for a next term of 5 years by passing special resolutions.

The brief profiles of the above Directors are given in the Notice convening 50th Annual General Meeting.

(b) Particulars of ensuing Annual General Meeting:

Venue N-104, MIDC Area, Jalgaon-425003Time 11.30 A.M.Day FridayDate 25.09.2015Financial Year ended 31st March 2015Book Closure Dates 18.09.2015 to 25.09.2015Dividend Payment Date On or before 24.10.2015

(c) Financial calendar (tentative):

Annual General Meeting

1st Quarter Results for quarter ending 30th June 2015 Before 15th August 2015

2nd Quarter Results for quarter ending 30th September 2015

Before 15th November 2015

3rd Quarter Results for quarter ending 31st December 2015

Before 15th February 2015

4th Quarter Results for quarter ending 31st March 2016

By 15th May 2016 (if unaudited)

or by 30th May 2016 (if audited)

(d) Stock Exchanges where shares are listed:

Name and address of the stock exchange Stock Code/Symbol

BSE Limited (BSE)Phiroze Jeejeebhoy Towers,Dalal Street, Fort,Mumbai- 400 001

504008

National Stock Exchange of India Limited (NSE)Exchange Plaza, Bandra Kurla Complex, Bandra (East)Mumbai – 400 051

EMCO

(e) Status of Listing Fees:

The Company has paid Listing fees to BSE Limited and National Stock Exchange of India Limited within the prescribed time limit. The Custodian Fees payable to NSDL and CDSL will be paid as and when bills are received from NSDL and CDSL.


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(f) Stock Market data:

(i) Monthly high and low quotations of the Company’s shares on BSE & NSE during the financial year 2014-2015 are as follows.

Month BSE Monthly Price (`) NSE Monthly Price (`)High Low High Low

April,2014 36.85 26.05 36.85 26.15

May, 2014 39.60 29.00 39.65 28.85

June, 2014 50.35 36.55 50.25 36.40

July, 2014 46.60 37.95 46.50 37.65

August, 2014 43.15 36.15 42.90 36.00

September, 2014 43.15 36.45 43.25 36.55

October, 2014 41.45 35.20 41.50 35.00

November, 2014 44.80 39.65 44.70 39.60

December, 2014 42.55 35.25 42.50 35.30

January,2015 44.00 38.05 44.10 38.35

February, 2015 39.85 37.45 39.85 37.40

March , 2015 39.05 30.85 39.15 30.85

(Source: www.bseindia.com & www.nseindia.com)

(Source: www.bseindia.com) (Source: www.nseindia.com)

(g) Registrar and Transfer Agents: M/s. Link Intime India Pvt Ltd.C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup West, Mumbai – 400 078Tel: +91 22 25946970 Fax: +9122 2594 6969 E-mail: [email protected]

(h) Share Transfer System:

The Company’s shares being in compulsory demat mode are transferable through the depository system. Shares in physical form lodged for transfer with the Company and Company’s Registrar & Share Transfer Agent are normally processed within 15 days from the date of lodgement, if the documents are clear in all respects and put up for approval before the Share Transfer Committee/Stakeholders Relationship Committee.

Performance of EMCO Shares on BSE

MONTHSShare Price

Apr

-14

May

14

Jun-

14

Jul-1

4

Aug

-14

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

Sensex

CLO

SIN

G S

HA

RE

PR

ICE

SEN

SEX

50

40

30

20

10

-

30,000

25,000

20,000

15,000

10,000

5,000

-

Performance of EMCO Shares on NSE

MONTHSShare Price Nifty

CLO

SIN

G S

HA

RE

PR

ICE

NIF

TY

50

40

30

20

10

-

10,000

8,000

6,000

4,000

2,000

-

Apr

-14

May

14

Jun-

14

Jul-1

4

Aug

-14

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15


EMCO LIMITED

44

(i) Distribution of Shareholding as on 31st March 2015 :Range Number of

Holders% to Total Holders

Shareholding (Shares)

% to Total Capital

1 - 5,000 23476 97.64 10777232 15.955,001 - 10,000 306 1.27 2320891 3.4310,001 - 20,000 125 0.52 1782353 2.6420,001 - 30,000 37 0.15 914501 1.3530,001 - 40,000 18 0.08 632773 0.9440,001 - 50,000 13 0.05 604330 0.8950,001 - 1,00,000 26 0.11 1939638 2.871,00,001 and above 43 0.18 48604167 71.93TOTAL 24044 100 67575885 100

Shareholding pattern as on 31st March 2015

Categories of Shareholding as on 31st March 2015Category No. of Shares Held Percentage of Shareholding

A Promoter’s holding 1 Promoters - Indian Promoters 3,07,20,998 45.46 - Foreign Promoters - -2 Person acting in concert - -

Sub-Total 3,07,20,998 45.46B Non-Promoters Holding

Institutional Investorsa. Mutual Funds and UTI 32,31,500 4.78 b. Banks, Financial Institutions, 5,89,847 0.87 Insurance Companies (Central/ State Govt. Institutions/Non- government institutions)c. FII’s / Foreign Mutual Fund 54,500 0.08

Sub-Total 38,75,847 5.73 C Others

a. Private Corporate Bodies 1,16,14,388 17.19b. Indian Public and HUF 2,02,98,810 30.04c. NRIs / OCBs 7,99,900 1.19d. Any other (please specify)

Clearing Member 2,02,517 0.30 Directors and their relatives 62,975 0.09

Trust 450 0.00 Sub-Total 3,29,79,040 48.81 GRAND TOTAL 6,75,75,885 100.00

45.46%

17.19%

30.43%

4.78%

1.19% 0.95%

Promoters Private Corporate Bodies Indian Public & OthersMutual Fund Foreign Holdings Banks/FI's/Insurance


EMCO LIMITED


EMCO LIMITED

45

(j) Dematerialisation of shares:

The shares of the Company are in compulsory dematerialised segment and are available for trading system of both the depositories. All requests for Dematerialisation of shares are processed and confirmed to depositories, NSDL and CDSL, within 21 days from the date of lodgement with the Company’s Registrar & Share Transfer Agent.

96.03% of the Company’s shares have been dematerialised upto 31st March, 2015. 100% of the holding of the Promoters and Promoters Group are in Dematerialised Form.

(k) Outstanding GDR / ADR / Warrants, Convertible Bonds and any other Convertible Instruments, conversion dates and its likely impact on the equity:

No GDR/ ADR are outstanding as at 31st March 2015.

No warrants are outstanding as at 31st March 2015.

(l) Plant Locations are as under:

Thane Plot No. F – 5, Road No. 28, Wagle Industrial Estate, Thane – 400 604, MaharashtraJalgaon Unit I

N-104, MIDC Area, Jalgaon – 425 003 MaharashtraUnit IIGate No. 114, Umala, Taluka & District Jalgaon, Maharashtra

Vadodara Plot No.519-521, Asoj Village, Halol Highway, Dist: Vadodara, Gujarat – 391510

(m) Address for Investor Correspondence:

Sr. No. For Shares held in Physical Form For Shares held in Demat Form1. Registrar & Transfer Agents :

M/s. Link Intime India Pvt Ltd,C-13, Pannalal Silk Mills Compound,L. B. S. Marg, Bhandup West,Mumbai – 400 078Tel: +91 22 25946970Fax: +91 22 25946969E-mail: [email protected]

To respective Depository Participant

2. Corporate Office:EMCO Limited, Plot No. F – 5, Road No. 28,Wagle Industrial Estate, Thane – 400 604Tel: +91-22- 40404500Fax: +91-22-25820571Email [email protected]

(n) CEO/CFO certification:

We the undersigned, in our capacities as Whole Time Director and Chief Financial Officer of the Company certify that:

a) We have reviewed financial statements and the cash flow statement for the year ended 31.03.2015 and that to the best of our knowledge and belief:

i) These statements do not contain any materially untrue statement or omit any material fact or contain statements fact or contain statements that might be misleading;

ii) These statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.


EMCO LIMITED

46

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evalu-ated the effectiveness of the internal control systems of the company pertaining to financial reporting and we have dis-closed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d) We have indicated to the auditors and the Audit Committee:

i) Significant changes in internal control over financial reporting during the year;

ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the manage-ment or an employee having a significant role in the company’s internal control system over financial reporting.

On behalf of the Board of Directors

For EMCO LIMITED Sd/-Mumbai Rajesh S JainMay 29, 2015 Chairman (DIN: 00005829)

AUDITORS’ CERTIFICATE

To,The Members of EMCO LIMITED

We have examined the compliance of conditions of Corporate Governance by EMCO LIMITED (“the Company”), for the year ended on 31st March 2015, as stipulated in Clause 49 of the Listing Agreement of the Company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipu-lated in Clause 49 of the abovementioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or ef-fectiveness with which the Management has conducted the affairs of the Company.

For P. RAJ & CO. For Chaturvedi & ShahChartered Accountants Chartered AccountantsFirm Registration No. 108310W Firm Registration No. 101720W

Sd/- Sd/-S. V. Chheda Amit ChaturvediPartner PartnerMembership No. 103938 Membership No. 103141Mumbai, May 29, 2015 Mumbai, May 29, 2015


EMCO LIMITED


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47

INDEPENDENT AUDITOR’S REPORTTo the Members of EMCO Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of EMCO Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

1. We refer to note 28 of the accompanying financial statement regarding the Investments and loan aggregating to ` 9341.04 Lacs into its wholly owned subsidiary EMCO Power Limited (EPL), which is setting up power projects in the state of Chhattisgarh and Odisha through joint venture companies. There has been temporary suspension of work on these projects by the management for the reasons stated therein. In the event, prolong delay, carrying value of the said investment will require to be adjusted for impairment.

2. We refer to note 27(b) of the accompanying financial statement regarding the liquidated damages/deduction made by customers aggregating to ` 5805 lacs, which are carried as Trade Receivables. The company has or is in the process of


EMCO LIMITED

48

taking legal action for recovery of the same. Pending outcome of the matters which are presently unascertainable, no adjustments have been made in the accompanying financial statements.

Our opinion is not qualified in these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the other matters to be included in the Auditor’s Report in accordance with Rules 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 26 (II) to the financial statements.

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring required amount to the Investor Education and Protection Fund by the Company.




EMCO LIMITED


EMCO LIMITED

49

Annexure referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date i. a. The Company has maintained proper records showing full particulars including quantitative details and situation

of fixed assets.

b. The fixed assets have been physically verified by the management as per a phased programme of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on verification were not material and have been properly dealt with in the books of account.

ii. a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. The Company has not granted any unsecured loans to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchases of fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v. The Company has not accepted any deposits from public.

vi. To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (Cost Records and Audit) Rules, 2014 issued under sub section (1) of Section 148 of the Act, in respect of Company’s product to which the said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

vii. a. There have been delays in depositing undisputed statutory dues of provident fund, employees state insurance, service tax, value added tax, sales tax, WCT and Tax deducted at source with the appropriate authorities. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company is regular in depositing undisputed statutory dues of income tax, wealth tax, custom duty, and other material statutory dues during the year with the appropriate authorities. As on March 31, 2015, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

b. As at 31st March, 2015 according to the records of the Company and the information and explanations given to us disputed dues on account of Income Tax, Sales Tax, Service Tax, Excise Duty, Custom Duty, Value added Tax or Cess (as applicable) that have not been deposited before appropriate authorities are as under:-


EMCO LIMITED

50

Name of Statute

Nature of Dues Amount in ` Lakhs

Period to which the amount relates

Forum where the dispute is pending

Sales Tax Act

West Bengal VAT 42.91 2007-08 West Bengal Commercial Taxes Appellate and Revision Board

Sales Tax Act

West Bengal VAT 44.83 2009-10 Joint Commissioner of Sales Tax

Sales Tax Act

Jharkhand VAT 4.24 2008-09 Deputy Commissioner of Commercial Tax

Sales Tax Act

Jharkhand VAT 24.60 2010-11 Deputy Commissioner of Commercial Tax

Sales Tax Act

Rajasthan VAT 347.23 2011-12 Asst. Commissioner

Central Excise Act

Short Payment of Duty

6.98 2007-08 Customs, Excise and Service Tax Appellate

Central Excise Act

Excise Duty 5.86 2007-08 Additional Commissioner Central Excise & Customs

Central Excise Act

Excise Duty 37.00 2011-12 Commissioner (Appeals)

Central Excise Act

Excise Duty 48.22 2012-13 Additional Commissioner Central Excise & Customs

Central Excise Act

Excise Duty 76.40 2005-11 Commissioner (Appeals)

Central Excise Act

Excise Duty 106.33 Oct 2013 to May 2014

Customs, Excise and Service Tax Appellate

Central Excise Act

Excise Duty 383.85 April 2009- Sept 2013

Commissioner of central excise & Customs

Central Excise Act

Excise Duty 5.89 March 2007 to June 2008

Customs, Excise and Service Tax Appellate, Jalgaon

Service Tax Service Tax and Penalty

88.57 2004-07 Commissioner (Appeals), Central Excise and Customs, Vadodra

Service Tax Service Tax, Interest and Penalty

130.83 April 2007 – March 2008

Commissioner (Appeals), Central Excise, Mumbai Zone

In the following matters, the department has preferred appeals at higher levels:

Name of the Statute

Nature of Dues Amount in ` Lakhs

Financial Year to which the amount

relates

Forum where dispute is pending

Sales Tax Act

Rajasthan VAT 6.38 2008-10 Commercial Tax Officer

Central Excise Act

Excise Duty 141.32 1996-01 Supreme Court

Central Excise Act

Excise Duty 4.10 1993-98 High Court

Central Excise Act

Excise Duty 3.14 2008-09 Customs, Excise and Service Tax Appellate

c. The amount required to be transferred to investor education and protection fund in accordance with the provisions of the Companies Act, 2013 and rules made there under has been transferred to such fund within time.


EMCO LIMITED


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51

viii. The Company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial year

ix. Based on our audit procedures and as per the information and explanations provided by the management, we are of the opinion that Company has not defaulted in repayment of dues to banks and debentures holders except during the year there has been overdrawn in working capital facilities from banks. The details of such overdrawn during the year and as at year end are as under:

Nature of Dues Overdrawn Range (Amount in `)

Overdrawn Range (in no. of days)

Working Capital / Cash Credit / Packing Credits / Other fund based working capital facilities*

` 2,000 lakhs to ` 7,000 lakhs Up to 89 days

* Aggregate principal amount overdrawn as at 31.3.2015 – ` 3,300 lakhs

x. According to the information and explanations provided to us and the records examined by us, the Company has given guarantee for loan taken by its wholly owned subsidiary from bank. According to information and explanation given to us, we are of the opinion that terms and conditions of guarantee given is not prejudicial to the interest of the Company.

xi. In our opinion and according to the information and explanations given to us, term loan taken during the year have been applied for the purpose for which they were obtained.

xii. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations provided by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.




EMCO LIMITED

52

Balance Sheet As At 31st March 2015 (All amounts in ` Lakhs, unless otherwise stated)

Note As At 31st March 2015

As At 31st March 2014

I EQUITY AND LIABILITIES SHAREHOLDERS’ FUNDS Share Capital 2 1,351.52 1,302.74 Reserves and Surplus 3 56,837.42 55,784.48

58,188.94 57,087.22 NON-CURRENT LIABILITIES Long Term Borrowings 4 13,051.49 5,570.23 Deferred Tax Liability (net) 5 1,313.19 1,118.34 Long Term Provisions 6 98.91 129.68

14,463.59 6,818.25 CURRENT LIABILITIES Short Term Borrowings 7 41,413.76 42,340.10 Trade Payables 8 34,535.49 37,555.49 Other Current Liabilities 9 14,917.65 14,889.76 Short Term Provisions 10 2,436.93 2,076.83

93,303.83 96,862.18 1,65,956.36 1,60,767.65

II ASSETS NON-CURRENT ASSETS Fixed Assets

Tangible Assets 11 27,149.16 28,182.21 Intangible Assets 11 1,711.29 1,304.11 Capital Work-in-Progress 105.16 103.12

28,965.61 29,589.44

Non Current Investments 12 8,522.72 997.72 Long Term Loans and Advances 13 2,566.70 8,409.82 Other Non Current Assets 14 424.20 244.62

11,513.62 9,652.16 CURRENT ASSETS Inventories 15 20,238.77 24,190.86 Trade Receivables 16 60,241.59 57,445.69 Cash and Bank Balances 17 2,460.21 1,547.54 Short Term Loans and Advances 18 42,536.56 38,341.96

1,25,477.13 121,526.05 1,65,956.36 160,767.65

Significant accounting policies and notes on financial statements 1 to 46The accompanying notes form an integral part of financial statementsAs per our report of even date For and on behalf of Board

Sd/- Sd/-For P. RAJ & CO. For CHATURVEDI & SHAH R. S. Jain S. S. Jain Chartered Accountants Chartered Accountants Chairman Vice Chairman Firm Registration No. 108310W

Firm Registration No. 101720W DIN:00005829 DIN:00006180

Sd/- Sd/- Sd/- Sd/-S. V. Chheda Amit Chaturvedi Amit Sudhakar Ganesh Tawari Partner Partner Chief Financial Officer Company Secretary Membership No. 103938 Membership No. 103141 PAN:-AGLPS9163K Membership No:- A12896 Mumbai, 29th May, 2015 Mumbai, 29th May, 2015


EMCO LIMITED


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53





Statement of Profit & Loss for the Year ended 31st March 2015 (All amounts in ` Lakhs, unless otherwise stated)

Note Year ended 31st March 2015

Year ended 31st March 2014

INCOMERevenue from operations (gross) 19 94,877.67 87,196.89

Less : Excise Duty 3,654.39 3,966.40

Revenue from operations (net) 91,223.28 83,230.49

Other Income 20 20.01 595.26

Total Revenue 91,243.29 83,825.75

EXPENDITURECost of materials and Components consumed and bought outs 21 59,202.74 62,472.17

Purchases of Stock in Trade 21 8,483.10 -

Changes in inventories of finished goods and work-in-progress 22 2,145.94 (1,577.79)

Employee benefit expense 23 3,977.53 4,879.35

Other expenses 24 8,180.37 9,138.19

Finance costs (net) 25 6,687.85 5,833.07

Depreciation and amortisation 11 1,958.74 1,997.78

Total Expenses 90,636.27 82,742.77

Profit before tax 607.02 1,082.98

Tax ExpenseCurrent Tax 179.57 61.58

Deferred Tax 263.31 376.13

Earlier Years tax 18.26 -

MAT Credit Entitlement (179.57) (61.58)

Profit for the year 325.45 706.85

Basic earnings per share in ` on share of face value ` 2 fully paid up 30 0.50 1.09

Diluted earnings per share in ` on share of face value ` 2 fully paid up 0.50 1.08


EMCO LIMITED

54

CASH FLOW STATEMENT for the year ended 31st March, 2015(All amounts in ` Lakhs, unless otherwise stated)



A. CASH FLOW FROM OPERATING ACTIVITIES :Profit before tax 607.02 1,082.98 Adjustments forDepreciation and amortisation 1,958.74 1,997.78 Unrealised foreign exchange Loss /(Gain) (171.79) (551.77)Interest expenses 9,466.74 7,493.83 Interest Income (2,778.89) (1,660.76)Sundry balance written-off / (back) (net) (140.97) 638.95 Provision for liquidated damages and others 290.48 736.34 Provision for Warranty 688.26 623.92 Employee stock compensation expense 0.13 (1.01)(Gain)/Loss on sale of fixed assets (net)Loss on sale of fixed assets (net) 38.68 (518.59)Operating Profit before Working Capital Changes 9,958.40 9,841.67 Adjustments forTrade and other payables (4,727.06) (5,241.25)Trade and other receivables (9,461.77) 5,679.88 Inventory 3,952.09 (5,687.94)Cash generated from Operations (278.34) 4,592.36 Direct taxes paid (146.44) 547.15 Net Cash Inflow / (Outflow) from Operating Activities (424.78) 5,139.51

B. CASH FLOW FROM INVESTING ACTIVITIES :Acquisition of fixed assets / capital work in progress (CWIP) (1,641.01) (1,498.70)Sale proceeds of fixed assets 56.43 548.12 Movement in other bank balances 899.52 (946.70)Purchase of Investments (7,525.01) (10.00)Sale of Investments 0.01 - Movement in advance to subsidiaries & JV’s 6,907.76 (2,705.13)Interest income from related parties 1,596.12 1,447.54 Net Cash inflow / (outflow) from Investing Activities 293.82 (3,164.87)

C. CASH FLOW FROM FINANCING ACTIVITIES :Proceeds from Issue of Share Capital 48.78 - Share Premium on Issue of Share Capital 951.22 - Proceeds of Long term borrowings 10,796.88 2,742.10 Repayment of Long term borrowings (809.10) (2,560.72)Increase/(decrease) in short term borrowings (722.32) 5,684.20 Interest expense (8,245.53) (7,324.68)Dividend paid during the year including dividend tax (76.78) (152.66)Net Cash inflow / (outflow) from Financing Activities 1,943.15 (1,611.76)Net increase in Cash and Cash Equivalents 1,812.19 362.88 Cash and Cash Equivalents at the beginning of the year (Refer Note 17) 571.79 208.91 Cash and Cash Equivalents at the end of the year (Refer Note 17) 2,383.98 571.79 Reconciliation of the Cash & BankCash and Bank Balances (As per Note 17) 2,460.21 1,547.54 Less- Margin Money Deposit against BG 65.72 964.68 Less- Unclaimed Dividend Account 10.51 11.07 Cash and Cash Equivalents at the end of the year 2,383.98 571.79

As per our report of even date For and on behalf of BoardSd/- Sd/-

For P. RAJ & CO. For CHATURVEDI & SHAH R. S. Jain S. S. Jain Chartered Accountants Chartered Accountants Chairman Vice Chairman Firm Registration No. 108310W




EMCO LIMITED


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55

1. Nature of Operation:

The Company is primarily engaged in the power industry, the company manufactures range of transformers. The Company’s products include transformers, energy metering system, substation and transmission towers and lines which constitutes of generation, transmission, distribution and manufacture of power equipment viz Generation Equipment and T&D Equipment.

Significant Accounting Policies

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India and the relevant provisions of the Companies Act, 2013. The significant accounting policies are as follows

A. Basis of Accounting

The financial statements are prepared in accordance with the historical cost convention.

B. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

C. Fixed Assets / Capital Work in Progress

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Statement of profit and loss. Projects under commissioning and other Capital Work-in-Progress are carried at costs, comprising direct cost, related incidental expenses and interest on borrowings.

D. Depreciation / Amortisation:

I Tangible Assets

a. Depreciation is provided from the date the assets are put to use and has been calculated on straight line method as per the useful life prescribed under Schedule II of the Companies Act, 2013, except following assets which are depreciated over period of its estimated useful life

Asset Estimated Useful LifePorta Cabin 5 yearsForm Box 5 yearsTemplates 5 years

b. For following class of assets where the useful life is estimated based on technical advice and the management believes that such useful lives best represent the period over which the assets will be used.

Asset-Plant & Machinery Estimated Useful LifeSolar Plant 25 yearsCNC Machines 25 yearsCranes 25 yearsFabrication Machines 25 yearsOvens 25 yearsTesting Equipments 25 yearsWinding 25 years

c. Leasehold Improvements are amortised over the primary lease period.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding five years.

b. Development costs for new design is amortised over a period of 5 years

III. Leasehold land, which are given by Central / State Government authorities are not amortised in view of the long tenure of the lease.

Notes to Financial Statements as at 31st March 2015


EMCO LIMITED

56

E Investments

Long term investments are stated at cost less permanent diminution in value, if any.

F Valuation of Inventories

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Net Realisable Value, whichever is less. Cost is determined on a Moving Weighted Average basis. Excise duty is included in the value of finished goods.

G Revenue Recognition

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat, Returns, Trade Discounts and incentives.

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under “Other Current Assets” and billing in excess of contract revenue has been reflected under “Current Liabilities” in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

III. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

H Foreign Exchange Transactions Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions.

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non – Monetary foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Statement of profit and loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted in carrying cost of fixed assets.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the statement of profit and loss for the year in which it occurs. The premium or discount on such contracts is recognised in the statement of profit and loss over the period of the contract.

Loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the statement of profit and loss for the year in which it occurs.

I Derivative instruments (Commodity derivatives) In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as

forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

J Export Obligations / Entitlements / Incentives Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials,

under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

K Employee Benefits Short term employee benefits are recognised as an expense at un-discounted amount in the statement of profit and

loss of the year in which services are rendered. Provision for gratuity and other long term employee benefits- leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the statement of profit and loss during the year.

Actuarial gains and losses are recognised immediately in the statement of profit and loss.

L Operating Lease

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.



EMCO LIMITED


EMCO LIMITED

57

M Stock Based Compensation

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight-line basis over the vesting period.

N Taxation

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

d. Minimum Alternate Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit available in respect of Minimum Alternate Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement”. The Company reviews the “MAT Credit Entitlement” asset at each reporting date and writes down the extent the Company does not have convincing evidence that it will be able to utilise the MAT Credit Entitlement within the period specified under the Income-tax Act, 1961.

O Impairment of Assets

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

P Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of profit and loss.

Q Provisions for contingencies

A provision is recognised when:

• The Company has a present obligation as a result of a past event;

• It is probable that an outflow of resources embodying economic benefits which will be required to settle the obligation; and

• A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

R Research & Development

All revenue expenses pertaining to research are charged to the statement of profit and loss in the year in which they are incurred and development expenditure of capital nature is capitalised as fixed assets and depreciated as per the company’s policy.



EMCO LIMITED

58

2 SHARE CAPITAL




Authorised

7,50,00,000 (7,50,00,000) Equity Shares of ` 2 each. 1,500.00 1,500.00

5,00,000 (5,00,000) Cumulative Redeemable Preference Shares of ` 100 each. 500.00 500.00

2,000.00 2,000.00

Issued, Subscribed and Paid up

6,75,75,885 (6,51,36,860) Equity Shares of ` 2 each issued at the end of Year 1,351.52 1,302.74

1,351.52 1,302.74

a) As approved by the Members at their Extra Ordinary General Meeting held on 22.01.2015, the Board of Directors have allotted 24,39,025 fully paid equity shares of the Company of ` 2/- each at a price of ` 41/- per equity share (including share premium of ` 39/- per equity share) under preferential allotment, to one of Promoter Group entity, as per the applicable provisions of the SEBI (ICDR) Regulations.

b) Reconciliation of the number of shares

As At 31st March 2015 As At 31st March 2014

Number of Shares

Amount Number of Shares

Amount

Balance as at the beginning of the year 6,51,36,860 1,302.74 6,51,36,860 1,302.74

Add : Issued during the year 2,439,025 48.78 - -

Balance as at the end of the year 6,75,75,885 1,351.52 6,51,36,860 1,302.74

c) Details of shareholders holding shares more than 5% of issued share capital

Name of the shareholder


Number of Equity Shares

Held

% of Equity Shares held

Rajesh Jain 95,99,345 14.21

Shailesh Jain 62,99,340 9.32

EMCO Investments Private Limited 83,55,858 12.37

Ratna Jain 43,54,255 6.44




Held


Rajesh Jain 95,99,345 14.74



Ratna Jain 43,54,255 6.68



EMCO LIMITED


EMCO LIMITED

59

d) Employee Stock Option Scheme (ESOS)

i. 1,90,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2006. During the year Nil Equity Shares have been issued and allotted to the Employees / Director against exercise of Options under ESOS 2006. Details of which are given as under :

Particulars of Options

“Price for

Shares `”

Particulars Outstanding at the

beginning of the year

(Nos.)

Granted during the year (Nos.)

Exercised during the year (Nos.)

Lapsed During the year (Nos.)

Outstanding at the end of the year

(Nos.)

ESOP-2006 # * Option XII 59.49 Employees 2 - - - 2

Option 16,000 - - - 16,000

# Against above option the eligible employee is entitled to acquire five equity share of ` 2 each of the Company.* The option would vest over a maximum period of three years from the date of grant.

ii. 30,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2011. During the year 1,00,000 Equity Shares have been issued and allotted to the Employees / Director against exercise of Options under ESOS 2011. Details of which are given as under :


“Price for Shares

`”


beginning of the year (Nos.)





(Nos.) ESOP-2011 ## * Option I 56.16 Employees 1 - - - 1

Option 40,000 - - - 40,000 62.40 Employees 4 - - 1 3

Option 1,95,000 - - 75,000 1,20,000 Option II 49.50 Employees 1 - - - 1

Option 75,000 - - - 75,000 44.55 Employees 1 - - - 1

Option 40,000 - - - 40,000 Option III 52.05 Employees 1 - - - 1

Option 75,000 - - - 75,000 Option IV 51.05 Employees 1 - - 1 -

Option 40,000 - - 40,000 - Option V 16.00 Employees 11 - - 2 9

Option 11,00,000 - - 2,00,000 9,00,000 Option VI 43.25 Employees - 1 - - 1

Option - 1,00,000 - - 1,00,000

## Against each of the above option the eligible employee is entitled to acquire one equity share of ` 2 each of the Company.

* The options would vest over a maximum period of three years from the date of grant.



EMCO LIMITED

60

(All amounts in ` Lakhs, unless otherwise stated)Particulars As At 31st March 2015 As At 31st March 2014

3 RESERVES & SURPLUSCapital ReserveBalance as at the beginning and at the end of the year 1,988.94 1,988.94 Capital Redemption ReserveBalance as at the beginning and at the end of the year 4.50 4.50 Securities Premium AccountBalance as at the beginning of the year 27,661.54 27,661.54 Add: Received during the year 951.22 -Balance at the end of the year 28,612.76 27,661.54 Debenture Redemption Reserve Balance as at the beginning of the year - 834.66 Less: Transfer to General Reserve - 834.66 Balance at the end of the year - Stock options outstanding Employee stock options outstanding at the beginning of the year 9.63 9.76 Less : Deferred employee compensation outstanding (0.13) 0.13 Closing Balance at the end of the year 9.76 9.63 General Reserve Balance as at the beginning of the year 5,154.97 4,320.31 Less : Adjustment of Depreciation as per transitional provision of

Part C paragraph 7 (b) of Schedule II of the Companies Act, 2013 (Refer Note 11(4))

142.54 -

Add: Transfer from Debenture Redemption Reserve - 834.66 Balance at the end of the year 5,012.43 5,154.97 Surplus Balance as at the beginning of the year 20,964.90 20,334.26 Add : Profit for the year 325.45 706.85 Less: AppropriationsProposed Dividend (Dividend Per share ` 0.10 (` 0.10)) 67.58 65.14 Tax on Proposed Dividend 13.76 11.07 Balance at the end of the year 21,209.01 20,964.90

56,837.42 55,784.48

Non Current Portions Current Maturities As At 31st March

2015As At 31st March

2014 As At 31st

March 2015 As At 31st March

2014 4 LONG TERM BORROWINGS

SECURED LOANSa) Vehicle Loans 26.23 11.34 20.47 6.27 b) Term Loans from Banks

i) Rupee Loan 10,463.45 2,610.00 2,869.54 270.00 ii) Foreign currency Loan 2,561.81 2,948.89 384.27 491.48

13,051.49 5,570.23 3,274.28 767.75 Amount disclosed under ‘Other Current Liabilities’ (Refer Note 9)

- - (3,274.28) (767.75)

13,051.49 5,570.23 - - Nature of Security and Repayment Terms a) Vehicle Loans are secured by way of hypothecation on respective vehicles financed. b) Term loan from banks referred in (b) (i) above Includes ` 2,578.59 Lakhs (`2,880.00 Lakhs) loan which is secured

by exclusive first charge by way of mortgage on the specific land on which the windmills are installed in Maharashtra and exclusive first charge by way of hypothecation on current assets and movable fixed assets (plant, machinery equipments) pertaining to windmills.



EMCO LIMITED


EMCO LIMITED

61

c) Term loan from banks referred in (b) (i) above includes ` 8,850.00 Lakhs (` NIL) loan which is secured by first charge basis (pari passu) by way of registered mortgage on Company’s immovable and movable property situated at MIDC-Thane, MIDC- Jalgaon, Umala- Jalgoan, Vadodara (Gujarat) and Silvassa except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm and second charge (pari passu) by way of hypothecation on the Company’s movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm. Further out of this working capital term loan ` 7,350.00 Lakhs(` Nil) is secured by personal guarantee of promoter directors.

d) Term loan from banks referred above in (b) (i) includes ` 1,904.40 Lakhs(` NIL) loan which is secured by bank guarantee.

e) Term loan from banks referred in (b) (ii) above is secured on first charge basis by way of equitable mortgage on Solar Project’s land and all other immovable properties, present and future and also by way of hypothecation on solar project’s all movable, present and future, all book debts, operating cash flows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.

f) Maturity Profile of Long Term Borrowings (All amounts in ` Lakhs, unless otherwise stated)

1 - 2 Years 2-3 years 3-4 years Beyond 4 yearsLong Term Borrowings 4,511.29 2,806.86 2,874.86 2,858.48

5 DEFERRED TAX LIABILITY (NET)As At 31st

March 2015 As At 31st

March 2014 Deferred Tax LiabilityArising on account of timing difference in - Depreciation 3,734.99 3,921.11 Deferred Tax Assets Arising on account of timing difference in - Expenses & Others (2,421.80) (2,802.77)

1,313.19 1,118.34

6 LONG TERM PROVISIONSProvision for employee benefitsProvision for leave benefits (Refer Note 23) 98.91 129.68

98.91 129.68

7 SHORT TERM BORROWINGSLoan repayable on demandFrom BanksSecureda) Working Capital Term Loan - 2,500.00 b) Working Capital Demand Loan 500.00 500.00 c) Cash Credit / Packing Credit 40,913.76 39,340.10

41,413.76 42,340.10

a) Working Capital Term Loan referred in (a) above is secured on first charge basis (pari passu) by way of equitable mortgage on Company’s immovable properties situated at MIDC-Thane and MIDC-Jalgaon both present or future. Further the said working capital term loan is secured on second charge (pari passu) by way of hypothecation on the Company’s movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm.

b) Working Capital Loans from banks referred in (b) and (c) above and bank facilities mentioned in Note 26 (I) (a) and (b) are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as raw Materials, stocks-in-process, finished goods, consumable stores and spares, book debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on second charge ) by way of registered mortgage on Company’s immovable and movable property situated at MIDC-Thane, MIDC- Jalgaon, Umala- Jalgoan, Vadodara (Gujarat) and Silvassa except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm.

c) Working capital referred in (c ) above is overdrawn by ` 3,324 Lakhs (` 3,356 lakhs) as at year end.



EMCO LIMITED

62

8 TRADE PAYABLES (All amounts in ` Lakhs, unless otherwise stated) As At 31st March 2015 As At 31st March 2014

Acceptances 18,074.94 16,822.24 Others* 16,460.55 20,733.25

34,535.49 37,555.49

* Includes buyer’s credit of ` 1,684.63 lakhs (` 3,807.51 lakhs)

Following disclosures required for Micro and Small Enterprises has been determined on the basis of information available with the company.

1 The principal amount remaining unpaid to supplier as at the end of accounting year

341.32 321.10

2 The interest due thereon remaining unpaid to supplier as at the end of accounting year.

14.01 9.25

3 The amount of interest paid in terms of section 16, along with the amounts of the payment made to the supplier beyond the appointed day during the year.

- -

4 The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act.

- -

5 The amount of interest accrued during the year and remaining unpaid at the end of the accounting year.

14.01 9.25

6 The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure.

- -

9 OTHER CURRENT LIABILITIESCurrent Maturities of Long Term Borrowings (Refer Note No.4) 3,274.28 767.75 Interest accrued but not due 111.44 69.40Interest accrued and due 0.31 3.92 Statutory Liabilities 342.93 193.51 Advance received against order from customers 5,088.75 4,413.61 Billing in Excess of Contract Revenue 176.16 784.40 Unclaimed Dividends # 10.51 11.08 Security Deposits 5.75 2.75 Other Current Liabilities* 5,907.52 8,643.33

14,917.65 14,889.75

# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.

*Includes Advance from Joint Venture (Refer Note 31), Outstanding Liabilities and Other Payables

10 SHORT TERM PROVISIONSa) Provision for gratuity (Refer Note 23 ) 32.34 24.07 b) Provision for leave benefits (Refer Note 23 ) 29.53 34.13 c) Proposed Dividend (Refer Note 3 ) 67.58 65.14 d) Provision for tax on proposed dividend (Refer Note 3 ) 13.76 11.07 e) Provision for warranties and liquidated damages (Refer Note 27 ) 2,293.72 1,739.47 f) Other provisions - 202.95

2,436.93 2,076.83



EMCO LIMITED


EMCO LIMITED

63

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EMCO LIMITED

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11 Disclosure as required by Accounting Standard 19 ‘Leases’Operating Leasea) Residential given on operating lease

Building includes Commercial / Residential premises on operating leaseGross Block 56.94 88.33 Accumulated Depreciation 18.40 26.85 Depreciation and amortisation 0.87 1.44

In respect of the above arrangements, lease rent receivable are recognised in the Statement of Profit and Loss for the year and are credited to Rent & Compensation (Refer Note 24).b) Asset taken on leaseThe Company’s significant leasing arrangements are generally from 1 month to 60 months. Under these agreements, generally refundable interest-free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the year and included under Rent and Compensation (Refer Note 24). Minimum lease payment for non cancellable lease periodNot later than one year 94.76 181.97 Later than one year and not later than five years 35.03 242.96 Later than five years - -

12 NON CURRENT INVESTMENTS(A) TRADE INVESTMENTSNumber Face

ValueInvestment in Equity Instrument (Unquoted)

per unit Investment In Subsidiary10 (10) SGD 1 EMCO Overseas Pte Limited - * - *79,80,235 (50,000) ` 10 EMCO Power Limited 7,530.00 5.00

(Out of the above, 6 Equity Shares are held in the name of others as nominees on behalf and ownership of the Company)

50,000 (50,000) ` 10 EMCO Renewable Energy Limited (Formerly Known as EMCO Power Infrastructure Limited)

5.00 5.00

(Out of the above, 6 Equity shares are held in the name of others as nominees on behalf and ownership of the Company)

49,950 (50,000) ` 10 EMCO Infrastructure Limited 5.00 5.00 (Out of the above, 6 Equity shares are held in the name of others as nominees on behalf and ownership of the Company)

50,000 (50,000) ` 10 Shekhawati Transmission Services Company Limited 20.00 20.00(Out of the above, 6 Equity shares are held in the name of others as nominees on behalf and ownership of the Company)

* `282 (`282)

Notes to Financial Statements as at 31st March 2015 (All amounts in ` Lakhs, unless otherwise stated)


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NON CURRENT INVESTMENTS(B) OTHER INVESTMENTS Number Face

Valueper unit

3,600 (3,600) ` 10 (i) Investment in Equity Instrument (Quoted)Morarka Finance Limited 0.36 0.36

1,667 (1,667) ` 10 (ii) Investment in Equity Instrument (Unquoted)Cozy Properties Private Limited 116.76 116.76

(iii) Investment in Non-Cumulative Preference Shares (Unquoted)

8,406 (8,406) ` 10 Cozy Properties Private Limited 840.60 840.60 50,000 (50,000) ` 10 (iv) Investment in Mutual Fund (Quoted)

Union KBC Capital Protection Oriented Fund 5.00 5.00 8,522.72 997.72

Aggregate Amount of Quoted Investment 5.36 5.36 Aggregate Market Value of Quoted Investment 6.48 5.43 Aggregate Amount of Unquoted Investment 8,517.36 992.36



13 LONG-TERM LOANS AND ADVANCES(Unsecured, considered good)

Capital Advances 63.21 63.21 Security Deposits 42.54 103.73 Loans and Advances to Related Parties (Refer Note 31 ) 2,125.00 7,788.58 Prepaid Expenses 109.84 224.31 Rent Deposit

- To Related Party (Refer Note 31) 100.00 100.00 - To Others 126.11 129.99

2,566.70 8,409.82

14 OTHER NON CURRENT ASSETSMat Credit Entitlement 424.20 244.62

424.20 244.62

15 INVENTORIES (As taken, valued and certified by Management) Raw Materials & Components 10,135.35 12,339.16 Work-in-progress 7,286.85 9,529.22 Finished Goods 328.61 232.18 Stock in Transit 378.52 84.00 Store, Spares and Packing Material 2,109.44 2,006.30

20,238.77 24,190.86



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16 TRADE RECEIVABLES (Unsecured and considered good)

Outstanding for a period exceeding six months from the date that are due for payments

17,401.87 14,539.48

Other Debts 42,839.72 42,906.21 60,241.59 57,445.69

17 CASH AND BANK BALANCES a) Balance with Banks

In Current Account 2,360.21 563.58 b) Cheques, Drafts on hand 10.11 - c) Cash on hand 13.66 8.21

2,383.98 571.79

Other Bank Balances Margin Money Deposit (Given as security for Bank Guarantee & Borrowings) 65.72 964.67 Unclaimed Dividend Account 10.51 11.08

76.23 975.75 2,460.21 1,547.54

18 SHORT TERM LOANS AND ADVANCES (Unsecured, considered good) a) Loans and Advances to Related Parties (Refer Note 31 ) 8,700.41 7,196.48 b) Income Tax (net of provision) 1,185.30 1,057.13 c) Advance to Suppliers 6,567.55 3,216.25 d) Indirect Tax Receivable 4,414.14 4,499.34 e) Earnest Money Deposit 56.17 264.37 f) Prepaid Expenses 2,650.08 3,579.27 g) Inter Corporate Deposits 1,098.12 995.12 h) Contract Revenue in Excess of Billing 11,621.25 10,648.15 i) Other amounts recoverable in cash or kind for value to be received. 6,243.54 6,885.85

42,536.56 38,341.96



19 REVENUE FROM OPERATIONS (GROSS)(Refer Note 39)Sale of products 92,483.96 85,148.59 Sale of services 235.44 527.12 Other operating revenue 2,158.27 1,521.18

94,877.67 87,196.89

20 OTHER INCOME Other operating revenue 20.01 595.26

20.01 595.26



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21 COST OF RAW MATERIAL CONSUMED (Refer Note 34 ) Inventory at the beginning of the year 12,423.16 8,808.12 Add : Purchases and other related expenses 57,293.46 66,087.21 Add : Purchases of Stock in Trade 8,483.10 -

78,199.72 74,895.33

Less: Inventory at the end of the year 10,513.88 12,423.16 67,685.84 62,472.17

22 CHANGE IN INVENTORY OF FINISHED GOODS AND WORK IN PROCESS Inventories at the end of the year

Work - in - process 7,286.85 9,529.22 Finished goods 328.61 232.18

7,615.46 9,761.40

Inventories at the beginning of the year Work - in - process 9,529.22 8,078.94 Finished goods 232.18 104.67

9,761.40 8,183.61 2,145.94 (1,577.79)

23 EMPLOYEE BENEFIT EXPENSES Salaries and Wages 3,569.33 4,362.12 Contribution to Provident and other funds 231.28 297.74 Employee stock option scheme 0.13 (1.01) Staff Welfare expenses 176.79 220.50

3,977.53 4,879.35

Disclosure pursuant to Accounting Standard – 15 (revised) ‘Employee Benefits’Contribution to Defined Contribution Plans, recognised as expense for the year is as underEmployer’s Contribution to Provident Fund 108.25 148.97 Employer’s Contribution to Pension 69.43 60.92 Employer’s Contribution to E.S.I.C 14.84 16.75

Defined Benefit PlansThe employees’ gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.



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As At 31st March 2015 As At 31st March 2014 Gratuity (funded)

Leave Encashment (unfunded)

Gratuity (funded)

Leave Encash-ment (unfund-

ed) I Change in Defined Benefit Obligation(D.B.O)

Opening Defined Benefit Obligation 351.14 138.73 333.93 149.53 Service cost for the Year 45.57 65.31 50.62 71.10 Interest cost for the year on opening DBO 29.52 10.83 25.07 10.06 Actuarial Loss/(gain) (30.72) (68.31) (13.57) (42.78)Benefit Paid (57.00) (40.77) (44.92) (49.16)Closing defined benefit Obligation 338.51 105.79 351.13 138.75

II Fair Value of Plan Asset Opening fair value of Plan Assets 327.08 - 288.28 - Adjustment to Opening Fair Value of Plan Assets 6.44 - - -Expected return on Plan Assets 28.35 - 27.81 - Actuarial gain /(loss) (1.69) - (13.72) - Contribution by employer 2.99 40.77 69.65 49.16 Benefit Paid (57.00) (40.77) (44.92) (49.16)Closing balance of fair value of plan assets 306.19 - 327.10 -

III Actual Return on Plan AssetExpected return on Plan Assets 28.35 - 27.81 - Experience gain / (loss) (1.69) - (13.72) - Actual Return on Plan Asset 26.66 - 14.09 -

IV Amount Recognised in Balance SheetLiability at the end of Year 338.51 105.79 351.13 138.75 Fair Value of Plan Assets at the end of the Year 306.19 - 327.10 - Difference 32.32 105.79 24.03 138.75 Unrecognised Past Service Cost - - - - Amount Recognised in Balance Sheet 32.32 105.79 24.03 138.75 Current Liability 32.34 6.88 24.03 9.04 Non Current Liability (0.02) 98.91 - 129.71

V Amount Recognised in Income StatementCurrent Service Cost 45.57 65.31 50.62 71.10 Interest on Obligation 29.52 10.83 25.07 10.06 Expected return on Plan Assets (28.35) - (27.81) - Net actuarial loss/ (gain) recognized (29.03) (68.31) 0.15 (42.78)Expenses Recognised in Profit and Loss 17.71 7.83 48.03 38.38

VI Balance Sheet ReconciliationOpening Net Liability 24.07 138.73 45.65 149.53 Adjustment to Opening Fair Value of Plan Assets (6.44) - - -Expenses as Above 17.71 7.83 48.03 38.38 Contribution to LIC/Claims Paid (2.99) (40.77) (69.65) (49.16)Amount Recognised in Balance Sheet 32.35 105.79 24.03 138.75

VII Actuarial Assumptions for the YearDiscount Rate 7.80% 7.80% 9.15% 9.15%Expected Return on plan Assets 9.25% - 9.25% -

The estimates of future salary increase, considered in actuarial valuation, has been made after taking into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.



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General Description of significant defined plansI Gratuity Plan

Gratuity is payable to all eligible employees of the Company on death, resignation after five completed year of service, retirement or permanent disablement.Broad Category of plan assets relating to Gratuity as a percentage of total plan assets.Government of India Securities -High Quality Corporate bonds - Equity Shares of Listed Companies - Property - Policy of Insurance 100%

100%II Leave PlanLeaves standing at the end of the calendar year are carried forward in the next calendar year. Eligible employees will get encashment of their unutilized leaves beyond the threshold limit, in the month of April every year. In case of death, permanent disablement and resignation, the employees will get encashment of their unutilized leaves forthwith.




24 a) OTHER EXPENSES Stores and Packing Materials Consumed 1,038.48 212.20 Power and Fuel 614.25 639.14 Repair and Maintenance - Machinery 225.95 258.68 - Buildings 128.50 129.49 Rent and Compensation 264.76 272.80 Insurance Charges (Net) 329.44 336.95 Rates and Taxes 183.17 134.46 Travelling and Conveyance 746.29 885.67 Freight (Net) 401.78 277.43 Commission on Sales 1,931.87 1,652.15 Legal and Professional Fees 651.60 549.93 Auditors Remuneration 70.35 51.96 Director’s Sitting Fees 7.75 5.50 Bank Charges, Guarantee Commission and Other Charges 1,585.89 1,228.70 (Profit)/Loss on Disposal of Fixed Assets (Net) 38.68 - Warranty and After Sales Expenses 627.45 623.92 Miscellaneous Expenses 92.14 76.11 Other Establishment Expenses 986.67 1,090.05 Net (Gain) / Loss from foreign currency transactions and translations (386.32) 1,201.98 Sundry Balance Written Off (Net) (140.97) 638.95 Provision for liquidated damages and others 290.48 736.34 Less: Expenses/Overhead recovered/to be recovered (1,507.84) (1,864.22)

8,180.37 9,138.19 b) PAYMENT TO AUDITORS’ (net of service tax):

Audit Fees 50.80 40.80 Tax Audit Fees 3.00 3.00 Certification and other matter 15.10 7.00 Out of pocket expenses 1.45 1.16

70.35 51.96



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25 FINANCE COST (net)Interest Cost

On Debentures - 152.40 On Term Loans 1,041.53 341.31 On Working Capital 7,076.64 5,985.04 To Others 1,103.96 816.65 Other Borrowing Cost 244.61 198.43

9,466.74 7,493.83

Less:Interest from bank and others 1,182.77 213.22 Interest from Related Parties (Refer Note 31) 1,596.12 1,447.54

2,778.89 1,660.76

6,687.85 5,833.07



26 CONTINGENT LIABILITIES AND COMMITMENTS I) Contingent Liabilities (to the extent not provided for) a) Bank Guarantees outstanding as at the year end (gross) –(Secured) 69,472.33 77,302.11 b) Letters of Credit outstanding as at the year end (Secured) 4,994.92 3,204.85 c) Guarantee for Subsidiary Company 8,088.60 7,715.50 d) Assignment of Debtors 2,000.00 - II) Legal Disputes a) Disputed amount of Sales Tax. 784.01 120.53 b) Claim made by workmen for re-instatement. Matter Subjudice. Amount not ascertainable c) Disputed amount of Income Tax. 117.44 306.88 d) Disputed amount of Excise duty 2,773.40 2,591.66 e) Disputed amount of Service tax. 238.80 314.00 f) Claims against Company not acknowledged as debt 857.51 126.37 III) Other Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

97.65 95.82

27 a PROVISION FOR WARRANTIES AND LIQUIDATED DAMAGES Warranty Provision

Opening Balance 507.82 424.90 Provision for the year 688.26 623.92 Expenses during the year 627.45 541.00 Closing Balance 568.63 507.82

“Claims for Liquidated Damages against the company are recognised in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly additional provision of ̀ 493.44 lakhs (` 638.22 lakhs) has been made to meet the future probable losses on this account and cumulative provision as at year end ` 1,725.09 lakhs (` 1,231.66 lakhs). “



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b In respect of certain trade receivables, the customers have deducted amounts aggregating to ` 5,805 Lakhs on account of liquidated damages and other deductions. The Company has or is in the process of taking legal action for recovery of above amounts. Management considers these amounts as good of recovery and on the basis of legal advice, no provision has been made on the same.

c Trade receivable includes contractual retention amounts billed to customers and Liquidated Damages withheld by customer aggregating to ` 30,373 lakhs (` 28,762 lakhs). Management expect to collect retentions as and when due. Management is confident of realising liquidated damages based on past experience and ongoing correspondence with the customers.

28. Company has made Investment and loans aggregating to ` 9,341.04 Lakhs into its wholly owned subsidiary EMCO Power Limited, which is setting up power projects in the state of Chhattisgarh and Odisha through joint venture companies. Said Investment has been utilised towards project development expenditure like feasibility studies, acquisition of land, allocation of water, EIA studies and other pre-operative expenses. The work on these projects has been temporarily suspended by the management due to unfavourable economic scenario and uncertainties, specially in power sector. Looking at the stage of the project, management is of view that impairment of investment and loan aggregating to ` 9,341.04 Lakhs is not necessary.

29. The company has opted to avail the choice provided under paragraph 46A of AS 11: “Accounting for the effects of changes in the foreign exchange rates” as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monetary items relating to depreciable assets, is adjusted in carrying cost of depreciable assets.

(All amounts in ` Lakhs, unless otherwise stated) As At 31st March


2014 30 EARNING PER SHARE

Profit after tax as per statement of profit and loss 325.45 706.84 Weighted average number of equity shares for basic EPS 6,53,42,045 6,51,36,860 Add:- Dilutive shares on account of ESOP 5,28,195 1,19,186Weighted average number of equity shares for diluted EPS 6,58,70,240 6,52,56,046 Face value of equity share (`) 2.00 2.00 Basic earnings per share (`) 0.50 1.09 Diluted earnings per share (`) 0.50 1.08

31 RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD - 18 A List of Related Parties over which control exists

Subsidiaries EMCO Power Limited EMCO Renewable Energy Limited EMCO Infrastructure Limited EMCO Transmission Networks LimitedEMCO Overseas Pte. Limited PT Setenco Investa Niaga Shekhawati Transmission Service Company Limited



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B Name of the associates and joint ventures with whom transactions were carried out during the year

(i) Joint Ventures

PT Vardhaman Logistics

PT Vardhaman Mining Services

Rabaan (s) Pte. Limited.

Shyam EMCO Infrastructure Limited

Kalinga Energy & Power Limited

PT Bina Insan Sukses Mandiri

(ii) Association of Persons

Arki Aviation

C Name of the associate & joint ventures with whom transactions were carried out during the year

(i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain

Mr. Shailesh S. Jain

Ms. Meenakshi Jain

Ms. Ratna S. Jain

(ii) Entities where Key Management Personnel have Significant Influence

EMCO Foundation

EMCO Investments Private Limited



D Balance Outstanding at the Year-end

Nature of relationship / transaction

Key Management Personnel and their relatives:

Deposit given 100.00 100.00

Subsidiaries:

Business Advance given 10,825.41 12,381.08

Other Receivables 589.15 3,373.23

Corporate Gurantee (USD 13,000,000 (USD 13,000,000)) 8,088.60 7,715.50

Stores, Spares & Packing Material Supplied 608.45 403.70

Association of Person:

Payable to AOP 22.64 32.76

Joint Venture:

Business Advance Received 1,995.00 3,990.00



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E Details of major transactions with related parties

1) (a) Remuneration

Mr. Rajesh Jain 31.00 48.00

(b) Director Sitting Fees

Mr. Shailesh Jain 1.75 0.90

2) Salary

Ms Meenakshi Jain 33.26 33.26

Mr. Amit Sudhakar 13.38 -

Mr. Ganesh Tawari 1.75 -

Mr. Ram Mundra 19.68 -

Mr. Praveen Kumar 3.51 -

3) Rent Given

a) Ms Ratna S Jain 29.66 28.25

4) Expenses / Overheads incurred / recovered

EMCO Foundation - 1.70

EMCO Power Limited - 561.80

PT Bina Insan Suskes Mandiri 22.23 11.25

5) Donations

EMCO Foundation 23.50 19.00

6) Loan

a) Given

EMCO Overseas Pte. Limited 998.56 297.30

EMCO Power Limited 2,107.72 1,889.40

Shekhawati Transmission Services Company Limited 197.59 58.15

EMCO Infrastructure Limited - 5.00

EMCO Investments Private Limited 1,000.00 -

b) Received

EMCO Overseas Pte. Limited 82.05 73.31

EMCO Infrastructure Limited - -

EMCO Power Limited 10,409.89 1,500.00

EMCO Investments Private Limited 1,000.00 -



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74



7) Business Advance a) ReceivedShyam EMCO Infrastructure Limited - 3,990.00 b) RepaidShyam EMCO Infrastructure Limited 1,995.00 -

8) Other ReceivableShekhawati Transmission Services Company Limited 37.75 86.20

9) Interest RecoveredEMCO Overseas Pte. Limited 546.97 488.77 EMCO Power Limited 1,048.44 958.54 EMCO Infrastructure Limited 0.71 0.24

10) Share of ExpensesArki Aviation 47.64 16.87

11) Guarantee Commission RecoveredEMCO Overseas Pte. Limited 40.44 39.61

12) Investments in EMCO Infrastructure Limited - 5.00 EMCO Power Limited 7,525.00 -

13) Investments in Share Capital byEMCO Invesments Private Limited 1,000.00 -

14) Stores, Spares & Packing Material SuppliedShekhawati Transmission Services Company Limited 204.75 403.70

15) Business Expenses ReimbursedShailesh Jain 32.94 -

32 DISCLOSURE AS PER CLAUSE 32 OF LISTING AGREEMENTLoans and Advance in the nature of loan given to subsidiary during the year

Name of Related Party As At 31st March 2015


Closing Balance Closing Balance Maximum Balance during the year

EMCO Overseas Pte. Limited* 8,700.41 7,196.48 7,433.19 EMCO Power Limited** 1,811.00 7,672.84 7,672.84Shekhawati Transmission Services Company Limited* 308.00 110.52 110.52EMCO Infrastructure Limited *** 5.85 5.21 5.21

* Loans and advances shown above fall under the category of “Short term loans and advances” in the nature of loans and is repay-able on demand.** Loans and advances shown above fall under the category of “Long term loans and advances” in the nature of loans and is repayable within 5 to 7 years.*** Loans and advances shown above fall under the category of “Long term loans and advances” in the nature of loans.# EMCO has not charged interest on Shekhawati Transmission Services Company Limited



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Investment by the loanee in the shares of the Companya None of the loannes and/or subsidiary companies of loanee have, per se, made investments in shares of the Company.b Investment by EMCO Infrastructure Ltd. in Equity Shares of Subsidiaries

Name of The Company No of SharesEMCO Transmission Networks Limited 37,560

c Investment by EMCO Oversease Pte Limited in Equity Shares of SubsidiariesName of The Company No of SharesPT Setenco Investa Niaga 988

(All amounts in ` Lakhs, unless otherwise stated)As At 31st March


201433 DISCLOSURE UNDER ACCOUNTING STANDARD - 7 ‘CONSTRUCTION CONTRACTS

Contract Revenue recognised as revenue for the year ended 31st March 50,056.51 42,397.68 Aggregate amount of contract costs incurred and recognised profits (less sum of recognised losses and progress billings ) up to 31st March for all the con-tracts in progress as at 31st March

2,33,388.79 2,33,787.24

The amount of customer advances outstanding for contracts in progress as at 31st March

1,945.58 1,247.95

The amount of retentions due from customers for contracts in progress as at 31st March

17,142.55 16,514.91

34 a) RAW MATERIAL CONSUMED Copper 8,378.25 10,223.35 Lamination 4,959.65 4,710.20 Steel 9,579.46 10,384.07 Other 44,768.48 37,154.55

67,685.84 62,472.17

35 VALUE OF IMPORTS ON CIF BASIS Raw Materials / Spare Parts 6,570.20 8,294.00 Capital Goods - 446.00

Other Items include equipments and other miscellaneous items meant for execution of projects.b) CONSUMPTION OF RAW MATERIALS, COMPONENTS AND SPARE PARTSDescription For the year ended

as on 31st March 2015For the year ended

as on 31st March 2014Amount Percentage Amount Percentage

Raw Materials and ComponentsImported 6,339.14 9% 8,137.15 13%Indigenous 61,346.70 91% 54,335.02 87%Spare PartsImported - 0% - 0%Indigenous 1,038.48 100% 212.20 100%



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36 EXPENDITURE IN FOREIGN CURRENCY Travelling 85.11 111.09 Professional Charges 93.81 19.41 Interest 258.48 176.54 After Sale Expenses 192.75 389.54 Sales Promotion 695.61 401.23 New product design and development - 161.12 Carriage Outward and Freight Expenses 976.25 - Others 51.07 64.07

37 EARNINGS IN FOREIGN CURRENCY i) Direct Export 22,601.25 25,380.38 ii) Other Recovery 40.44 39.61 iii) Interest Income 546.97 488.77

38 DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE Forward Contract outstanding

As At 31st March 2015 As At 31st March 2014

Buy Sell Buy SellUSD 31,64,413 1,31,43,414 80,17,260 36,56,564 EURO 9,10,414 7,05,500 10,86,267 - CHF - - 2,40,000 -

Unhedged foreign currency exposureNature of Transaction Currency As At 31st March


2014Payable EURO 32,001 1,18,177

USD 24,63,454 22,91,230 CHF 875 2,500 ZMK 26,24,926 7,68,912 GBP 3,680 12,493

Secured Loan USD 86,55,752 87,47,314Receivable USD 18,05,155 47,55,061

EURO 2,132 1,45,710 ZMK 38,96,107 6,16,913 RMB - 640

Advance to subsidiary USD 1,38,97,358 1,20,35,132 SGD 8,690 -

39 PRODUCT WISE BREAK UP OF REVENUE FROM OPERATIONS (GROSS) Transformer 38,044.16 39,746.04 Projects, Towers & Structures 54,766.50 44,903.15 Others 2,067.01 2,547.70

94,877.67 87,196.89



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40 Company has incurred total expenditure of ` 78.79 Lakhs (` 87.47 Lakhs) on Research and Development activities.

41 The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector.

42 The figure for the corresponding previous year have been restated / regrouped where ever necessary to make them comparable with the current period.

43 As approved by the Members at their Extra Ordinary General Meeting held on 22.01.2015, the Board of Directors have allotted 24,39,025 fully paid equity shares of the Company of ` 2/- each at a price of ` 41/- per equity share (including share premium of ` 39/- per equity share) under preferential allotment, to one of Promoter Group entity, as per the applicable provisions of the SEBI (ICDR) Regulations.

44 Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of account and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

45 The company’s normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

46 As per Section 135 of the companies act 2013, out of total expenditure of ` 13.82 Lakhs which was to be incurred on corporate social responsibility activity, the company has spent ` 23.50 Lakhs during the year.







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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS of EMCO LIMITED

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of EMCO Limited (“the Holding Company”), its subsidiaries and its joint ventures (collectively referred to as “the Group”) which comprise the Consolidated Balance Sheet as at 31st March, 2015, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

Management’s Responsibility for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which has been used for the purpose of preparation of preparation of the consolidated financial statements by the Directors of the Holding Company as aforesaid.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of other auditors, on the financial statements/ consolidated financial statements of the subsidiaries and joint ventures noted below, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2015, and its consolidated loss and its consolidated cash flows for the year ended on that date.


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Emphasis of Matter

1. We refer to Note 28 of the accompanying consolidated financial statement regarding a sum of ̀ 9,341.04 Lakhs incurred for setting up power projects in the state of Chhattisgarh and Odisha in joint ventures. There has been temporary suspension of work on these projects by the management for the reasons stated therein. In the event, prolong delay, carrying value of the said sum of ` 9,341.04 Lakhs will require to be adjusted for impairment.

2. We draw attention to Note 29 to the consolidated financial statements which described that one of the joint venture of the company engaged in mining operation in Indonesia is facing dispute arising out of shareholder’s agreement with minority shareholders; however the mining operations are unaffected. Company has invoked arbitration clause under the master share sale purchase agreement and have initiated arbitration proceedings at Singapore International Arbitration Centre (SIAC) forum. Further the minority shareholders have not confirmed their receivable/payable balances and their share of capital composition in respective subsidiary / Joint Ventures. The matter is subjudiced.

Our Opinion is not qualified in respect of the same.

Other Matters

1. 1. Financial statements of five subsidiaries, which reflect total assets of ` 10,954.15 lakhs as at March 31, 2015, total revenue of ` 0.46 lakhs and net cash outflows amounting to ` 9.98 lakhs for the year then ended, have been audited by P. Raj & Co., Chartered Accountants, one of the joint auditors of the Company.

2. We did not audit the financial statements of one subsidiary and five joint venture, whose financial statement reflect total assets of ` 6,799.21 lakhs as at March 31,2015, total revenue of ` 5,598.58 lakhs and net cash outflows of ` 38.12 lakhs for the year then ended, as considered in the consolidated financial statements whose financial statements / financial information have not been audited by us. This financial statement and other financial information have been audited by other auditor whose report has been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of this subsidiary and jointly controlled entities, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, insofar as it relates to the aforesaid subsidiaries and jointly controlled entities, is based solely on the reports of the other auditors.

3. We did not audit the financial statements of one subsidiaries and one joint venture, whose financial statement reflect total assets of ` 9,985.56 lakhs as at March 31,2015, total revenue of ` Nil Lakhs and net cash inflows of ` 8.71 lakhs for the year then ended, as considered in the consolidated financial statements. Whose financial statements / financial information have not been audited by us. These financial statements / financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of this subsidiary and jointly controlled entity, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries and jointly controlled entities, is based solely on such unaudited financial statements / financial information.

Our opinion on the consolidated financial statements and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matter with respect to our reliance on the work done, the reports of the other auditors and the financial statements / financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, based on the comments in the auditors’ reports of the Holding Company, subsidiary companies and jointly controlled companies incorporated in India, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.


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(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the report of the statutory auditor of subsidiary companies and jointly controlled companies incorporated in India, none of the directors of its subsidiary companies and jointly controlled companies incorporated in India is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group as referred to in Note 26(II) to the financial statements.

ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts.

iii. There has been no delay in transferring required amount to the Investor Education and Protection Fund by the Company.




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Annexure to Independent Auditors’ Report

Referred to in Paragraph 1 under the heading of “report on other legal and regulatory requirements” of our report of even date

i) In respect of the fixed assets of the Holding Company, subsidiary company and jointly controlled companies incorporated in India:

a) The respective entities have maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The fixed assets were physically verified during the year by the Management of the respective entities in accordance with a phased periodical programme of verification which, in our opinion and the opinion of the other auditors, is reasonable. According to the information and explanation given to us and the other auditors, no material discrepancies were noticed on such verification.

ii) In respect of the inventories of the Holding Company and a subsidiary company incorporated in India:

a) As explained to us and the other auditors, the inventories were physically verified during the year by the Management of the respective entities at reasonable intervals.

b) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the procedures of physical verification of inventories followed by the Management of the respective entities were reasonable and adequate in relation to the size of the respective entities and the nature of their business.

c) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the respective entities have maintained proper records of their inventories and no material discrepancies were noticed on physical verification.

iii) The subsidiary companies incorporated in India have granted interest free unsecured loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013:

a) The terms of the arrangements do not stipulate any repayment schedule and the loans are repayable on demand.

b) There are no overdue amounts in excess of ̀ 1 lakh in respect of loans granted to companies, firms or other parties covered in the Register maintained under Section 189 of the Act.

iv) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, there is an adequate internal control system in the Holding Company, subsidiary companies and jointly controlled companies incorporated in India, commensurate with the size of the respective entities and the nature of their business for the purchase of inventory and fixed assets and for the sale of goods and during the course of our and the other auditors audit no continuing failure to correct major weaknesses in such internal control system has been observed..

v) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the Holding Company, subsidiary companies and jointly controlled companies incorporated in India has not accepted any deposit within the meaning of provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Holding Company, subsidiary companies and jointly controlled companies incorporated in India

vi) According to the information and explanations given to us and the other auditors, in our opinion and the opinion of the other auditors, the Holding Company, subsidiary companies and jointly controlled companies incorporated in India have, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, wherever applicable. Neither we nor the other auditors have, however, made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) According to the records of the Company and the information and explanations given to us and other auditors, in respect of statutory dues of the Holding Company, subsidiary companies and jointly controlled companies incorporated in India:

a) The respective entities have generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues applicable to the respective entities with the appropriate authorities except in case of Holding Company and a subsidiary company were there were delays in depositing undisputed statutory dues of provident fund, employees state insurance, service tax, value added tax, sales tax, WCT and Tax deducted at source with


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the appropriate authorities. There were no material undisputed amounts payable by the respective entities in respect of such dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

b) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess which have not been deposited as on March 31, 2015 on account of disputes by the holding company are given below:

Name of Statute Nature of Dues Amount ` Lakhs

Period to which the amount relates

Forum where the dispute is pending

Sales Tax Act West Bengal VAT 42.91 2007-08 West Bengal Commercial Taxes Appellate and Revision Board

Sales Tax Act West Bengal VAT 44.83 2009-10 Joint Commissioner of Sales TaxSales Tax Act Jharkhand VAT 4.24 2008-09 Deputy Commissioner of

Commercial TaxSales Tax Act Jharkhand VAT 24.60 2010-11 Deputy Commissioner of

Commercial TaxSales Tax Act Rajasthan VAT 347.23 2011-12 Asst. Commissioner Central Excise Act Short Payment of Duty 6.98 2007-08 Customs, Excise and Service Tax

AppellateCentral Excise Act Excise Duty 5.86 2007-08 Additional Commissioner Central

Excise & CustomsCentral Excise Act Excise Duty 37.00 2011-12 Commissioner (Appeals)Central Excise Act Excise Duty 48.22 2012-13 Additional Commissioner Central

Excise & CustomsCentral Excise Act Excise Duty 76.40 2005-11 Commissioner (Appeals)Central Excise Act Excise Duty 106.33 Oct 2013 to

May 2014Customs, Excise and Service Tax Appellate

Central Excise Act Excise Duty 383.85 April 2009 Sept 2013

Commissioner of central excise & Customs

Central Excise Act Excise Duty 5.89 March 2007 to June 2008

Customs, Excise and Service Tax Appellate, Jalgaon

Service Tax Service Tax and Penalty 88.57 2004-07 Commissioner (Appeals), Central Excise and Customs, Vadodra

Service Tax Service Tax, Interest and Penalty

130.83 April 2007 – March 2008

Commissioner (Appeals), Central Excise, Mumbai Zone

In the following matters, the department has preferred appeals at higher levels:

Name of the Statute

Nature of Dues Amount ` Lakhs

Financial Year to which the amount

relates

Forum where dispute is pending

Sales Tax Act Rajasthan VAT 6.38 2008-10 Commercial Tax OfficerCentral Excise Act Excise Duty 141.32 1996-01 Supreme CourtCentral Excise Act Excise Duty 4.10 1993-98 High CourtCentral Excise Act Excise Duty 3.14 2008-09 Customs, Excise and Service Tax

Appellate

c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time for the respective entities.

viii) The Holding Company, subsidiary companies and jointly controlled companies incorporated in India do not have consolidated accumulated losses at the end of the financial year nor have they incurred cash losses, on a consolidated basis, during the financial year covered by our audit and in the immediately preceding financial year.


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ix) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the Holding Company, subsidiary companies and jointly controlled companies incorporated in India have not defaulted in the repayment of dues to financial institutions, banks and debenture holders except in case of Holding Company where during the year there has been overdrawn in working capital facilities from banks. The details of such overdrawn during the year and as at year end are as under:

Nature of Dues Overdrawn Range (Amount in Rs.) Overdrawn Range (in no. of days)Working Capital / Cash Credit / Packing Credits / Other fund based working capital facilities*

` 2,000 lakhs to ` 7,000 lakhs Up to 89 days

* Aggregate principal amount overdrawn as at 31.3.2015 – ` 3,300 lakhs

x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Holding Company for loan taken by its wholly owned subsidiary from bank are not prejudicial to the interests of the Holding company.

xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Holding Company for the purposes for which they were obtained.

xii) To the best of our knowledge and according to the information and explanations given to us and the other auditors, no fraud by the Holding Company, its subsidiary companies and jointly controlled companies incorporated in India and no material fraud on the Holding Company, its subsidiary companies, and jointly controlled companies incorporated in India has been noticed or reported during the year.




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Consolidated Balance Sheet as at 31st March, 2015 (All amounts in ` Lakhs, unless otherwise stated)

Note As At 31st March 2015


I EQUITY AND LIABILITIES SHAREHOLDERS’ FUNDS Share Capital 2 1,351.52 1,302.74 Reserves and Surplus 3 45,800.32 46,768.04

47,151.84 48,070.78

Share of Minority Interest 2.94 0.87

NON-CURRENT LIABILITIES Long Term Borrowings 4 18,957.97 10,876.03 Deferred Tax Liability (net) 5 1,313.19 1,118.34 Long Term Provisions 6 135.47 156.34

20,406.63 12,150.71 CURRENT LIABILITIES Short Term Borrowings 7 44,691.50 45,574.81 Trade Payables 8 35,070.67 37,941.45 Other Current Liabilities 9 17,622.90 15,751.65 Short Term Provisions 10 2,436.93 2,076.84

99,822.00 1,01,344.75 1,67,383.41 1,61,567.11

II ASSETS NON-CURRENT ASSETS Fixed Assets

Tangible Assets 11 27,574.54 28,596.11 Intangible Assets 11 9,466.98 9,155.33 Capital Work-in-Progress 8,228.86 6,482.08

45,270.38 44,233.52

Non Current Investments 12 963.81 963.77 Long Term Loans and Advances 13 1,633.25 1,959.07 Other Non Current Assets 14 430.56 250.35

3,027.62 3,173.19 CURRENT ASSETS Inventories 15 21,099.45 24,988.40 Trade Receivables 16 60,752.16 58,598.24 Cash and Bank Balances 17 2,598.25 1,724.96 Short Term Loans and Advances 18 34,635.55 28,848.80

1,19,085.41 1,14,160.40 1,67,383.41 1,61,567.11






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Consolidated Statement of Profit & Loss for the year ended 31st March, 2015 (All amounts in ` Lakhs, unless otherwise stated)

Note Year ended 31st March 2015


INCOMERevenue from operations (gross) 19 1,00,742.51 93,701.64 Less : Excise Duty 3,654.39 3,966.40 Revenue from operations (net) 97,088.12 89,735.24 Other Income 20 60.73 629.13 Total Revenue 97,148.85 90,364.37 EXPENDITURECost of materials and Components consumed and bought outs 21 64,464.35 67,859.63 Purchases of Stock in Trade 21 8,483.10 -Changes in inventories of finished goods and work-in-progress 22 1,919.17 (1,749.22)Employee benefit expense 23 4,265.11 5,240.09 Other expenses 24 9,049.68 10,052.51 Finance costs (net) 25 7,695.20 6,735.44 Depreciation and amortisation 11 2,171.33 2,279.11 Total Expenses 98,047.94 90,417.56

Loss Before Tax (899.09) (53.19)

Tax ExpenseCurrent Tax 179.61 61.58 Deferred Tax 263.30 376.13 Earlier Years tax (0.15) (3.76)MAT Credit Entitlement (179.57) (61.58)Loss for the year (1,162.28) (425.56)Share of Minority (5.18) (2.53)Loss after Minority Interest (1,157.10) (423.03)

Loss for the year (1,157.10) (423.03)

Basic earnings per share in ` on share of face value ` 2 fully paid up 30 (1.77) (0.65)Diluted earnings per share in ` on share of face value ` 2 fully paid up (1.76) (0.65)


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Consolidated CASH FLOW STATEMENT for the year ended 31st March, 2015(All amounts in ` Lakhs, unless otherwise stated)



A. CASH FLOW FROM OPERATING ACTIVITIES :Profit before tax (899.08) (53.19)Adjustments forDepreciation and amortisation 2,179.45 2,279.11 Unrealized foreign exchange Loss / (Gain) 2,253.73 (842.23)Interest expenses 9,927.12 7,907.44 Interest Income (2,231.92) (1,172.00)Sundry balance written-off / (back) (93.45) 639.01 Provision for liquidated damages and others 290.50 736.34 Provision for Warranty 688.26 623.92 Employee stock compensation expense 0.13 (1.01)(Gain)/ Loss on sale of fixed assets 38.68 (518.56)Minority Interest 7.25 7.50 Operating Profit before Working Capital Changes 12,160.66 9,606.33Adjustments forTrade and other payables (4,426.04) 4,719.81 Trade and other receivables (10,882.68) (4,736.70)Inventory 3,888.95 (6,330.02)Cash generated from Operations 740.89 3,259.42 Direct taxes paid (128.05) 314.09 Net Cash Inflow / (Outflow) from Operating Activities 612.84 3,573.51

B. CASH FLOW FROM INVESTING ACTIVITIES :Acquisition of fixed assets / capital work in progress (CWIP) (3,408.16) (1,740.23)Sale proceeds of fixed assets 56.45 569.42 Movement in other bank balances 904.43 (947.63)Increase in investments - (5.30)Movement in advance to subsidiaries & JV's - - Interest income from related parties 1,049.15 958.78 Net Cash inflow / (outflow) from Investing Activities 1,398.13 (1,164.96)

C. CASH FLOW FROM FINANCING ACTIVITIES :Proceeds of Issue of Share Capital 48.78 - Share Premium on issue of Share Capital 951.22 - Increase/(decrease) in long term borrowings 11,079.57 733.94 Increase/(decrease) in short term borrowings (844.23) 5,156.18 Interest expense (8,595.55) (7,779.64)Dividend paid during the year including dividend tax (76.78) (152.65)Net Cash inflow / (outflow) from Financing Activities 2,563.01 (2,042.17)Net increase in Cash and Cash Equivalents 1,777.72 366.38 Cash and Cash Equivalents at the beginning of the year (Refer Note 17) 734.47 368.09 Cash and Cash Equivalents at the end of the year (Refer Note 17) 2,512.19 734.47 Reconciliation of the Cash & BankCash and Bank Balances (As per Note 17) 2,598.25 1,724.96 Less- Margin Money Deposit against BG 75.55 979.41 Less- Unclaimed Dividend Account 10.51 11.08 Cash and Cash Equivalents at the end of the year 2,512.19 734.47






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1. Nature of Operation:

The Company is primarily engaged in the power industry, the company manufactures range of transformers. The Company’s products include transformers, energy metering system, substation and transmission towers and lines which constitutes of generation, transmission, distribution and manufacture of power equipment viz Generation Equipment and T&D Equipment.

Significant Accounting Policies

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 2013. The significant accounting policies are as follows

A. Basis of Accounting

(i) The financial statements of the subsidiaries and joint ventures used in the consolidation are drawn up to the same reporting date as that of the Parent Company, i. e. year ended 31st March 2015.

(ii) The financial statements have been prepared under the historical cost convention and on the accrual basis of accounting. The accounts of the Parent Company, the Subsidiary Companies and the Joint Venture Companies have been prepared in accordance with the Accounting Standard 21 “Consolidated Financial Statements” and Accounting Standard 27 “Financial Reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India.

B. Principles of Consolidation

The consolidated financial statements include the financial statement of EMCO Limited (the “Company”), the parent Company and all its subsidiaries and Joint Ventures (collectively referred to as the “EMCO Group”)

The consolidated financial statements have been prepared on the following basis

Subsidiaries a) The financial statements of the Subsidiary Companies have been combined on a line by line basis by adding

together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits and losses, if any.

b) In case of foreign subsidiaries, being non-integral foreign operations, the assets and liabilities are translated at the closing rate and the revenue items are consolidated at the average rates prevailing during the year. Any exchange difference arising on consolidation is recognised in the foreign currency translation reserve.

c) The excess of cost to the Company of its investments, if any in the Subsidiary over the Company’s portion of equity of the Subsidiary is recognised in the financial statements as Goodwill which is tested for impairment, if any, at balance sheet date.

d) The excess, if any of Company’s portion of equity of the Subsidiary as at the date of its investment is treated as Capital Reserve.

e) Minority interest in the Net Assets of consolidated Subsidiary consist of

1. The amount of equity attributable to minority shareholders at the date on which investment in a Subsidiary is made; and

2. The minority shareholders’ share of movements in equity since the date the parent Subsidiary relationship came into existence.

Joint Ventures

a) The financial statements of the Joint venture Companies have been combined using Proportionate consolidation method as stated in Accounting standard 27 “Financial Reporting of Interests in Joint Ventures”. Inter-company transactions and balances are eliminated to the extent of the company’s interest in the joint ventures. Unrealized losses are not eliminated to the extent the cost of the transferred asset cannot be recovered.

b) In case of foreign Joint ventures, being non-integral foreign operations, the assets and liabilities are translated at the closing rate and the revenue items are consolidated at the average rates prevailing during the year. Any ex-change difference arising on consolidation is recognised in the foreign currency translation reserve.

Notes to Consolidated Financial Statements as at 31st March 2015


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c) The excess of cost to the ventures of its interest in a jointly controlled entity over its share of net assets of the jointly controlled entity, at the date on which interest in the jointly controlled entity was acquired, is recognised in the financial statements as Goodwill, which is tested for impairment, if any at balance sheet date.

d) The excess, if any of share of the jointly controlled entity’s portion of net asset as at the date on which interest in the jointly controlled entity was acquired, is treated as Capital Reserve.

e) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the company’s separate financial statements.

Description of the EMCO Group

The Group Subsidiaries, Step Down Subsidiaries and Joint Ventures are set out below

Name of the Company Country of Incorporation

Proportion of ownership interest

either directly or through subsidiary

SubsidiariesEMCO Power Limited India 100%EMCO Renewable Energy Limited (Formerly known as EMCO Power Infrastructure Limited)

India 100%

EMCO Overseas Pte Limited Singapore 100%EMCO Infrastructure Limited India 100%EMCO Transmission Networks Limited (Formerly known as East West Power Generation Company Limited.)

India 75.12%

PT Setenco Investa Niaga * Indonesia 98.80%Shekhawati Transmission Service Company Limited (wef 01.02.2013) India 100%Joint Ventures Through SubsidiaryShyam EMCO Infrastructure Limited India 50%Kalinga Energy and Power Limited India 50%PT Bina Insan Sukses Mandiri * Indonesia 37.36%Rabaan (S) Pte. Ltd Singapore 37.35%PT Vardhaman Mining Services * Indonesia 37.35%PT Vardhaman Logistics * Indonesia 22.50%

* Subsidiaries and Joint Ventures have reporting accounting year ending 31st December. However, for the purpose of consolidation, the accounts for the year ended 31st March are prepared, the accounts for the reporting accounting year ended 31st December are audited and the three months period ended 31st March are reviewed by the respective auditors of Subsidiaries and Joint Ventures.

C. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent amounts as at the date of the financial state-ments and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively when revised.

D. Fixed Assets / Capital Work in Progress

Expenditure, which is of capital nature, is capitalised. Such expenditure includes purchase price, import duties, levies, and attributable cost of bringing the asset to its operating condition. The assets acquired on Hire Purchase basis have been capitalised at the gross value and interest thereon is charged to Statement of profit and loss. Pro-jects under commissioning and other Capital Work-in-Progress are carried at costs; comprising direct cost, related incidental expenses and interest on borrowings.



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E. Depreciation / Amortisation

Indian Companies

I. Tangible Assets

Depreciation has been calculated in accordance with Section 123 of The Companies Act, 2013, as under

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule II of the Companies Act, 2013, except following Assets which are depreciated over period of its estimated useful life

Asset Estimated Useful LifePorta Cabin 5 yearsForm Box 5 yearsTemplates 5 years

b. For these classes of assets, based on technical advice, the management believes that the useful lives of follow-ing assets best represent the period over which management expects to use these assets. Hence the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Compa-nies Act 2013.

Asset-Plant & Machinery Estimated Useful LifeSolar Plant 25 yearsCNC Machines 25 yearsCranes 25 yearsFabrication Machines 25 yearsOvens 25 yearsTesting Equipments 25 yearsWinding 25 years

c. Leasehold Improvements are amortised over the primary lease period.

II. Intangible Assets

a. These are amortised over their useful life, not exceeding five years.

b. Development rights (intangible assets) in respect of Coal production activities are amortised based on percentage of the total production during the year compared to the total potential reserve and expenses incurred before the start of production.

c. Development costs for new design is amortised over a period of 5 years.

III. Leasehold land, which are given by Central / State Government authorities are not amortised in view of the long tenure of the lease.

Foreign CompaniesIn case of foreign companies, depreciation on fixed assets has been provided at the rates required / permissible by the GAAPs of the respective countries and such depreciation rates are higher than the rates specified in the Schedule II to the Companies Act, 2013.

F. Investments

Long term investments are stated at cost less permanent diminution in value, if any.

G. Valuation of Inventories

Raw Materials, Stock in Process, Stores and Spares are valued at cost and net of credits under the scheme of Cenvat Rules and VAT Rules. Finished goods are valued at cost, or Market Value / Net Realisable Value, whichever is less. Cost is determined on a Moving Weighted Average basis. Excise duty is included in the value of finished goods.

H. Revenue Recognition

I. Sales are inclusive of Excise Duty, Duty Drawback but net of Sales Tax, Vat , Returns, Trade Discounts and incentives.



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90

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue earned in excess of billing has been reflected under “Other Current Assets” and billing in excess of contract revenue has been reflected under “Current Liabilities” in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

III. Dividend Income is recognised when the right to receive dividend is established. Interest Income is recognized on time proportion basis.

I. Foreign Exchange Transactions

Foreign Currency transactions are recorded at exchange rates prevailing on the date of respective transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates. Non – Monetary foreign currency items are carried at cost. The differences in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Statement of profit and loss. Statement of profit and loss, except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted in carrying cost of fixed assets.

The Company uses derivative financial instruments such as forward exchange contracts to hedge its risks associated with foreign currency fluctuation.

Gain or loss on restatement of forward exchange contracts for hedging underlying outstanding at the balance sheet date are recognised in the statement of profit and loss for the year in which it occurs. The premium or discount on such contracts is recognised in the statement of profit and loss over the period of the contract.

Loss on fair valuation of forward exchange contracts and embedded derivative contracts for hedging highly forecasted transaction are recognised in the statement of profit and loss for the year in which it occurs.

J. Derivative instruments (Commodity derivatives)

In order to hedge its exposure to commodity price risk, the Company enters into non speculative hedges, such as forward, option or swap contracts and other appropriate derivative instruments. These instruments are used only for the purpose of managing the exposure to commodity price risk and not for speculative purposes. The premium and gains / losses arising from settled derivative contracts, and mark to market (MTM) losses in respect of outstanding derivative contracts as at balance sheet date are credited for gains or charged for losses to the raw material consumed in so far as it relates to the derivative instruments taken to hedge risk of movement in price of Raw Material, the net MTM gains in respect of outstanding derivatives contracts are not recognized on conservative basis.

K. Export Obligations / Entitlements / Incentives

Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

L. Employee Benefits

Short term employee benefits are recognised as an expense at un-discounted amount in the Statement of Profit and Loss of the year in which services are rendered. Provision for gratuity and other long term employee benefits- leave, defined benefit schemes, are made on the basis of actuarial valuations made at the end of each financial year are charged to the Statement of Profit and Loss during the year.

Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

M. Operating Lease

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.



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N. Stock Based Compensation

In accordance with the Employee Stock Option Scheme (ESOS), the Company recognises the excess, if any, of the market price of the options granted as on the date of the grant over the exercise price of the options, and amortises it on a straight-line basis over the vesting period.

O. Taxation

a. Provision for Income Tax is made under the liability method after availing exemptions and deductions at the rates applicable under the Income Tax Act, 1961.

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet Date.

c. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable cer-tainty of realisation.

d. Minimum Alternate Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit available in respect of Minimum Alternate Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement”. The Company reviews the “MAT Credit Entitlement” asset at each reporting date and writes down the extent the Company does not have convincing evidence that it will be able to utilise the MAT Credit Entitlement within the period specified under the Income-tax Act, 1961.

P. Impairment of Assets

The carrying amount of assets is reviewed periodically for any indication of impairment based on internal / exter-nal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

Q. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to the Statement of Profit and Loss.

R. Provisions for contingencies:

A provision is recognised when

• The Company has a present obligation as a result of a past event;

• It is probable that an outflow of resources embodying economic benefits which will be required to settle the obligation; and

• A reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

The Company provides for warranty cost based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

S. Research & Development

All revenue expenses pertaining to research are charged to the Statement of Profit and Loss in the year in which they are incurred and development expenditure of capital nature is capitalised as fixed assets and depreciated as per the company’s policy.



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2 SHARE CAPITAL (All amounts in ` Lakhs, unless otherwise stated)



Authorised 7,50,00,000 (7,50,00,000) Equity Shares of ` 2 each. 1,500.00 1,500.00 5,00,000 (5,00,000) Cumulative Redeemable Preference Shares of ` 100 each. 500.00 500.00

2,000.00 2,000.00 Issued, Subscribed and Paid up6,75,75,885 (6,51,36,860) Equity Shares of ` 2 each issued at the end of Year 1,351.52 1,302.74

1,351.52 1,302.74

a) As approved by the Members at their Extra Ordinary General Meeting held on 22.01.2015, the Board of Directors have allotted 24,39,025 fully paid equity shares of the Company of ` 2/- each at a price of ` 41/- per equity share (including share premium of ` 39/- per equity share) under preferential allotment, to one of Promoter Group entity, as per the applicable provisions of the SEBI (ICDR) Regulations.

b) Reconciliation of the number of shares

As At 31st March 2015 As At 31st March 2014 Number of

Shares Amount Number of

Shares Amount

Balance as at the beginning of the year 6,51,36,860 1,302.74 6,51,36,860 1,302.74 Add : Issued during the year 24,39,025 48.78 - - Balance as at the end of the year 6,75,75,885 1,351.52 6,51,36,860 1,302.74

c) Details of shareholders holding shares more than 5% of issued share capital


As At 31st March 2015Number of

Equity Shares Held


Rajesh Jain 95,99,345 14.21 Shailesh Jain 62,99,340 9.32 EMCO Investments Private Limited 83,55,858 12.37 Ratna Jain 43,54,255 6.44




Held


Rajesh Jain 95,99,345 14.74



Ratna Jain 43,54,255 6.68



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93

d) Employee Stock Option Scheme (ESOS)

i. 1,90,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2006. During the year Nil Equity Shares have been issued and allotted to the Employees / Director against exercise of Options under ESOS 2006. Details of which are given as under :


“Price for

Shares `”


beginning of the year

(Nos.)





(Nos.)

ESOP-2006 # * Option XII 59.49 Employees 2 - - - 2

Option 16,000 - - - 16,000

# Against above option the eligible employee is entitled to acquire five equity share of ` 2 each of the Company.* The option would vest over a maximum period of three years from the date of grant.

ii. 30,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2011. Out of this 1,00,000 Equity Shares have been issued and allotted to the Employees / Director against exercise of Options under ESOS 2011. Details of which are given as under :


“Price for Shares

`”


beginning of the year (Nos.)





(Nos.) ESOP-2011 ## * Option I 56.16 Employees 1 - - - 1

Option 40,000 - - - 40,000 62.40 Employees 4 - - 1 3

Option 1,95,000 - - 75,000 1,20,000 Option II 49.50 Employees 1 - - - 1

Option 75,000 - - - 75,000 44.55 Employees 1 - - - 1

Option 40,000 - - - 40,000 Option III 52.05 Employees 1 - - - 1

Option 75,000 - - - 75,000 Option IV 51.05 Employees 1 - - 1 -

Option 40,000 - - 40,000 - Option V 16.00 Employees 11 - - 2 9

Option 11,00,000 - - 2,00,000 9,00,000 Option VI 43.25 Employees - 1 - - 1

Option - 1,00,000 - - 1,00,000

## Against each of the above option the eligible employee is entitled to acquire one equity share of ` 2 each of the Company.

* The options would vest over a maximum period of three years from the date of grant.



EMCO LIMITED

94

(All amounts in ` Lakhs, unless otherwise stated)Particulars As At 31st March 2015 As At 31st March 2014

3 RESERVES & SURPLUSCapital ReserveBalance as at the beginning and at the end of the year 1,988.94 1,988.94 Capital Redemption ReserveBalance as at the beginning and at the end of the year 4.50 4.50 Securities Premium AccountBalance as at the beginning of the year 27,661.54 27,661.54 Add: Received during the year 951.22 -Balance at the end of the year 28,612.76 27,661.54 Debenture Redemption Reserve Balance as at the beginning of the year - 834.66 Less: Transfer to General Reserve - 834.66 Balance at the end of the year - - Stock options outstanding Employee stock options outstanding at the beginning of the year 9.63 9.76 Less : Deferred employee compensation outstanding (0.13) 0.13 Closing Balance at the end of the year 9.76 9.63 General Reserve Balance as at the beginning of the year 5,154.97 4,320.31 Less : Adjustment of Depreciation as per transitional provision of

Part C paragraph 7 (b) of Schedule II of the Companies Act, 2013 (Refer Note 11(5))

142.86 -

Add: Transfer from Debenture Redemption Reserve - 834.66 5,012.11 5,154.97

Foreign Currency Translation ReserveBalance as at the beginning of the year (2,261.62) (1,293.04)Addition / (Deduction) during the year (537.78) (968.58)Balance at the end of the year (2,799.40) (2,261.62)Surplus Balance as at the beginning of the year 14,210.08 14,709.32 Add : Profit / (Loss) for the year (1,157.10) (423.03)Less: AppropriationsProposed Dividend (Dividend Per share ` 0.10 (` 0.10)) 67.58 65.14 Tax on Proposed Dividend 13.76 11.07Balance at the end of the year 12,971.64 14,210.08

45,800.32 46,768.04

Non Current Portions Current Maturities As At 31st March

2015As At 31st



March 2014 4 LONG TERM BORROWINGS

SECURED LOANSa) Vehicle Loans 26.23 11.34 20.47 6.27 b) Term Loans from Banks

i) Rupee Loan 10,463.45 2,610.00 2,869.54 270.00 ii) Foreign currency Loan 7,443.89 8,231.04 2,418.47 2,034.58

17,933.57 10,852.38 5,308.48 2,310.85 Amount disclosed under ‘Other Current Liabilities’ (Refer Note 9)

- - (5,308.48) (2,310.85)

17,933.57 10,852.38 - -Unsecured LoansFrom Related Parties - - - -From Others 1,024.40 23.65 - -

1,024.40 23.65 - -18,957.97 10,876.03 - -



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95

Nature of Security and Repayment Terms a) Vehicle Loans are secured by way of hypothecation on respective vehicles financed. b) Term loan from banks referred in (b) (i) above Includes ̀ 2,578.59 Lakhs (`2,880.00 Lakhs) loan which is secured by exclusive

first charge by way of mortgage on the specific land on which the windmills are installed in Maharashtra and exclusive first charge by way of hypothecation on current assets and movable fixed assets (plant, machinery equipments) pertaining to windmills.

c) Term loan from banks referred in (b) (i) above includes ` 8,850.00 Lakhs (` NIL) loan which is secured by first charge basis (pari passu) by way of registered mortgage on Company’s immovable and movable property situated at MIDC-Thane, MIDC- Jalgaon, Umala- Jalgoan, Vadodara (Gujarat) and Silvassa except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm and second charge (pari passu) by way of hypothecation on the Company’s movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm. Further out of this working capital term loan ` 7,350.00 Lakhs(` Nil) is secured by personal guarantee of promoter directors.

d) Term loan from banks referred above in (b) (i) includes ` 1,904.40 Lakhs(` NIL) loan which is secured by bank guarantee. e) Term loan from banks referred in (b) (ii) above loan amounting to ` 2,946.08 Lakhs (` 3,440.37 Lakhs) is secured on first

charge basis by way of equitable mortgage on Solar Project’s land and all other immovable properties, present and future and also by way of hypothecation on project’s all movable, present and future, all book debts, operating cash flows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.

f) Out of the Term loan from banks referred in b (ii) above loan amounting to ` 6,916.28 (` 6,825.25 Lakhs) is secured by: 1) Pledge of shares of Pt. Setenco Investa Niaga held in Coal Mines Company (PT Bina Insan Sukses Mandiri) . 2) First charges on all assets of the Company (EMCO Overseas Pte Limited) including hypothecation of Book Debt and Stock

present and future. 3) Corporate guarantee by the holding company, EMCO Limited. (Refer Note 26 (I) (c)) 4) Personal guarantee of one of the director of the Company.

1 - 2 Years 2-3 years 3-4 years Beyond 4 yearsLong Term Borrowings 6,138.65 4,434.22 4,502.22 2,858.48

(All amounts in ` Lakhs, unless otherwise stated)As At 31st


March 2014

5 DEFERRED TAX LIABILITY (NET) Deferred Tax LiabilityArising on account of timing difference in - Depreciation 3,734.99 3,921.11 Deferred Tax Assets Arising on account of timing difference in - Expenses & Others (2,421.80) (2,802.77)

1,313.19 1,118.34

6 LONG TERM PROVISIONSProvision for employee benefitsa) Provision for leave benefits 98.91 129.68 b) Provision for gratuity 36.56 26.66

135.47 156.34

7 SHORT TERM BORROWINGS Loan repayable on demandFrom BanksSecureda) Working Capital Term Loan - 2,500.00 b) Working Capital Demand Loan 500.00 500.00 c) Cash Credit / Packing Credit 40,913.76 39,340.09 d) Working Capital Foreign Currency Loan 1,871.05 1,774.17

43,284.81 44,114.26 From Others

UnsecuredOthers 1,406.69 1,460.55

1,406.69 1,460.5544,691.50 45,574.81



EMCO LIMITED

96

a) Working Capital Term Loan referred in (a) above is secured on first charge basis (pari passu) by way of equitable mortgage on Company’s immovable properties situated at MIDC-Thane and MIDC-Jalgaon both present or future. Further the said working capital term loan is secured on second charge (pari passu) by way of hypothecation on the Company’s movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm.

b) Working Capital Loans from banks referred in (b) and (c) above and bank facilities mentioned in Note 26 (I) (a) and (b) are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as raw Materials, stocks-in-process, finished goods, consumable stores and spares, book debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on second charge ) by way of registered mortgage on Company’s immovable and movable property situated at MIDC-Thane, MIDC- Jalgaon, Umala- Jalgoan, Vadodara (Gujarat) and Silvassa except assets exclusively financed by other lenders i.e. Wind Mill and Solar farm.

c) Working Capital Loan from banks referred in (d ) above are secured against First charge on all current assets of the company including hypothecation of book debts and stock present and future and is further secured by way of personal guarantee of the Directors.

d) Working capital referred in (c ) above is overdrawn by ` 3,324 Lakhs (` 3,356 lakhs) as at year end.

(All amounts in ` Lakhs, unless otherwise stated) As At 31st


March 2014 8 TRADE PAYABLES

Acceptances 18,074.94 16,822.24 Others* 16,995.73 21,119.21

35,070.67 37,941.45 * Includes buyer’s credit of ` 1,684.63 lakhs (` 3,807.51 lakhs)

9 OTHER CURRENT LIABILITIESCurrent Maturities of Long Term Borrowings (Refer Note No.4) 5,308.48 2,310.85 Interest accrued but not due 168.18 119.58 Interest accrued and due 104.12 3.92 Statutory Liabilities 597.78 386.09 Advance received against order from customers 5,088.75 4,413.61 Billing in Excess of Contract Revenue 176.16 784.40 Unclaimed Dividends # 10.51 11.08 Security Deposits 5.75 2.75 Other Current Liabilities* 6,163.17 7,719.37

17,622.90 15,751.65 # These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund. *Includes Advance from Joint Venture (Refer Note 31), Outstanding Liabilities and Other Payables

10 SHORT TERM PROVISIONSa) Provision for gratuity 32.34 24.07 b) Provision for leave benefits 29.53 34.13 c) Proposed Dividend (Refer Note 3) 67.58 65.14 d) Provision for tax on proposed dividend (Refer Note 3) 13.76 11.07 e) Provision for warranties and liquidated damages (Refer Note 27) 2,293.72 1,739.48 f) Other provisions - 202.95

2,436.93 2,076.84



EMCO LIMITED


EMCO LIMITED

97

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EMCO LIMITED

98

(All amounts in ` Lakhs, unless otherwise stated)As At 31st March

2015 As At 31st March

2014 11 Disclosure as required by Accounting Standard 19 ‘Leases’

Operating Leasea) Residential given on operating lease

Building includes Commercial / Residential premises on operating leaseGross Block 56.94 88.33 Accumulated Depreciation 18.40 26.85 Depreciation and amortisation 0.87 1.44

In respect of the above arrangements, lease rent receivable are recognised in the Statement of Profit and Loss for the year and are credited to Rent & Compensation (Refer Note 24).b) Asset taken on leaseThe Company’s significant leasing arrangements are generally from 1 month to 60 months. Under these agreements, generally refundable interest-free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the year and included under Rent and Compensation (Refer Note 24). Minimum lease payment for non cancellable lease periodNot later than one year 105.67 185.74Later than one year and not later than five years 35.03 242.96 Later than five years - -

12 NON CURRENT INVESTMENTS(A) TRADE INVESTMENTSInvestment in Equity Instrument (Unquoted) Investment in Equity Instrument (Unquoted)Number Rupaiah Face Value

per unit 20 (20) 500,000 PT Sanmati Natural Resources 0.69 0.65 (B) OTHER INVESTMENTS Number Face Value

per unit(i) Investment in Equity Instrument

(Quoted) 3,600 (3,600) ` 10 Morarka Finance Limited 0.36 0.36

(ii) Investment in Equity Instrument (Un-Quoted)

1,667 (1,667) ` 10 Cozy Properties Private Limited 116.76 116.76 2,000 (2,000) ` 10 Ribhoi Engineering Company Private

Limited 0.10 0.10

(iii) Investment in Preference Shares (Un-Quoted)

8,406 (8,406) ` 10 Cozy Properties Private Limited 840.60 840.60 (iv) Investment in Mutual Fund (Quoted)

50,000 (50,000) ` 10 Union KBC Capital Protection Oriented Fund

5.00 5.00

(v) Other Investment (Un-Quoted)Investment in National Saving Certificate 0.30 0.30

963.81 963.77

Aggregate Amount of Quoted Investment 5.36 5.36 Aggregate Market Value of Quoted Investment 6.48 5.43 Aggregate Amount of Un-Quoted Investment 958.45 958.41



EMCO LIMITED


EMCO LIMITED

99



2014 13 LONG-TERM LOANS AND ADVANCES

(Unsecured, considered good)Capital Advances 756.90 976.07 Security Deposits 191.39 234.08 Prepaid Expenses 109.84 224.30 Rent Deposit Others 129.25 232.78 Rent Deposit to Related Party (Refer Note 31) 100.00 100.00 Others 345.87 191.84

1,633.25 1,959.07

14 OTHER NON CURRENT ASSETSMat Credit Entitlement 424.20 244.63 Other 6.36 5.72

430.56 250.35

15 INVENTORIES (As taken, valued and certified by Management) Raw Materials & Components 10,135.36 12,339.16 Work-in-progress 7,665.03 9,762.07 Finished Goods 462.79 385.49 Stock in Transit 378.52 84.00 Store, Spares and Packing Material 2,457.75 2,417.68

21,099.45 24,988.40

16 TRADE RECEIVABLES (Unsecured and considered good)

Outstanding for a period exceeding six months from the date that are due for payments

17,401.87 14,539.49

Other Debts 43,350.29 44,058.75 60,752.16 58,598.24

17 CASH AND BANK BALANCES a) Balance with Banks

In Current Account 2,485.40 721.01 b) Cheques, Drafts on hand 10.11 - c) Cash on hand 16.68 13.46

2,512.19 734.47

Other Bank Balances a) Deposits with original maturity for more than 12 months 9.83 9.41

b) Margin Money Deposit (Given as security for Bank Guarantee & Borrowings) 65.72 970.00 c) Unclaimed Dividend Account 10.51 11.08

86.06 990.49 2,598.25 1,724.96



EMCO LIMITED

100



2014 18 SHORT TERM LOANS AND ADVANCES

(Unsecured, considered good) a) Income Tax (net of provision) 1,185.30 1,057.13 b) Advance to Suppliers 7,512.67 3,216.25 c) Indirect Tax Receivable 4,424.24 4,510.32d) Earnest Money Deposit 56.17 264.37 e) Prepaid Expenses 2,650.08 3,597.92 f) Inter Corporate Deposits 1,098.12 995.12 g) Contract Revenue in Excess of Billing 11,621.25 10,648.15 h) Other amounts recoverable in cash or kind for value to be received. 6,087.72 4,559.54

34,635.55 28,848.80

19 REVENUE FROM OPERATIONS (GROSS)(Refer Note 34)Sale of products 98,348.80 91,653.34 Sale of services 235.44 527.12 Other operating revenue 2,158.27 1,521.18

1,00,742.51 93,701.64

20 OTHER INCOME Other operating revenue 60.73 629.13

60.73 629.13

21 COST OF RAW MATERIAL CONSUMED Inventory at the beginning of the year 12,423.16 8,808.12 Add : Purchases and other related expenses 62,555.07 71,474.67 Add : Purchases of Stock in Trade 8,483.10 -

83,461.33 80,282.79

Less : Inventory at the end of the year 10,513.88 12,423.16 72,947.45 67,859.63

22 CHANGE IN INVENTORY OF FINISHED GOODS AND WORK IN PROCESS Inventories at the end of the year

Work - in - process 7,685.73 9,680.52 Finished goods 470.14 394.52

8,155.87 10,075.04

Inventories at the beginning of the year Work - in - process 9,680.52 8,078.94 Finished goods 394.52 246.88

10,075.04 8,325.82 1,919.17 (1,749.22)

23 EMPLOYEE BENEFIT EXPENSES Salaries and Wages 3,782.63 4,584.97 Contribution to Provident and other funds 231.28 297.74 Employee stock option scheme 0.13 (1.01) Staff Welfare expenses 251.07 358.39

4,265.11 5,240.09



EMCO LIMITED


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24 OTHER EXPENSESStores and Packing Materials Consumed 1,038.48 212.20 Power and Fuel 615.55 641.26 Repair and Maintenance - Machinery 230.26 258.68 - Buildings 128.82 129.69 Rent and Compensation 287.57 302.63 Insurance Charges (Net) 342.98 351.33 Rates and Taxes 244.79 217.54 Travelling and Conveyance 788.15 927.26 Freight (Net) 408.16 288.54 Commission on Sales 1,946.76 1,668.88 Legal and Professional Fees 723.76 602.81 Auditors Remuneration 70.64 52.12 Director's Sitting Fees 7.75 5.50 Bank Charges, Guarantee Commission and Other Charges 1,643.22 1,272.75 Loss on Disposal of Fixed Assets (Net) 38.68 0.03 Warranty and After Sales Expenses 627.45 623.92 Miscellaneous Expenses 100.03 87.81 Other Establishment Expenses 1,008.77 1,120.53 Net (Gain) / Loss from foreign currency transactions and translations 108.64 1,777.90 Sundry Balance Written Off (Net) (93.45) 639.01Provision for liquidated damages and others 290.51 736.34 "Less: Expenses/Overhead recovered/to be recovered" (1,507.84) (1,864.22)

9,049.68 10,052.51

25 FINANCE COST (net)Interest Cost

On Debentures - 152.40 On Term Loans 1,452.39 592.29 On Working Capital 7,188.12 6,102.83 To Others 1,042.00 861.48 Other Borrowing Cost 244.61 198.44

9,927.12 7,907.44

Less:Interest from bank and others 1,182.77 213.22 Interest from Related Parties (Refer Note 31 ) 1,049.15 958.78

2,231.92 1,172.00

7,695.20 6,735.44



EMCO LIMITED

102



2014

26 CONTINGENT LIABILITIES AND COMMITMENTS I) Contingent Liabilities (to the extent not provided for) a) Bank Guarantees outstanding as at the year end (gross) –(Secured) 69,472.33 77,302.11 b) Letters of Credit outstanding as at the year end (Secured) 4,994.92 3,204.85 c) Guarantee for Subsidiary Company 8,088.60 7,715.50 d) Assignment of Debtors 2,000.00 - II) Legal Disputes a) Disputed amount of Sales Tax. 784.01 120.53 b) Claim made by workmen for re-instatement. Matter Subjudice. Amount not ascertainable c) Disputed amount of Income Tax. 117.44 306.88 d) Disputed amount of Excise duty 2,773.40 2,591.66 e) Disputed amount of Service tax. 238.80 314.00 f) Claims against Company not acknowledged as debt 857.51 126.37 III) Other Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

1,115.66 1,203.32

27 a PROVISION FOR WARRANTIES AND LIQUIDATED DAMAGES Warranty Provision

Opening Balance 507.82 424.90 Provision for the year 688.26 623.92 Expenses during the year 627.45 541.00 Closing Balance 568.63 507.82

“Claims for Liquidated Damages against the company are recognised in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly additional provision of ` 493.44 lakhs ( ` 638.22 lakhs) has been made to meet the future probable losses on this account and cumulative provision as at year end ` 1,725.09 lakhs (` 1,231.66 lakhs). “

b In respect of certain trade receivables, the customers have deducted amounts aggregating to ` 5,805 Lakhs on account of liquidated damages and other deductions. The Company has or is in the process of taking legal action for recovery of above amounts. Management considers these amounts as good of recovery and on the basis of legal advice, no provision has been made on the same.

c Trade receivable includes contractual retention amounts billed to customers and Liquidated Damages withheld by customer aggregating to ` 30,373 lakhs (` 28,762 lakhs). Management expect to collect retentions as and when due. Management is confident of realising liquidated damages based on past experience and ongoing correspondence with the customers.

28. Company has made Investment and loans aggregating to ` 9,341.04 Lakhs into its wholly owned subsidiary EMCO Power Limited, which is setting up power projects in the state of Chhattisgarh and Odisha through joint venture companies. Said Investment has been utilised towards project development expenditure like feasibility studies, acquisition of land, allocation of water, EIA studies and other pre-operative expenses. The work on these projects has been temporarily suspended by the management due to unfavourable economic scenario and uncertainties, specially in power sector. Looking at the stage of the project, management is of view that impairment of investment and loan aggregating to ` 9,341.04 Lakhs is not necessary.

29. One of the joint venture of the company engaged in mining operation in Indonesia is facing dispute arising out of shareholder’s agreement with minority shareholders; however the mining operations are unaffected. Company has invoked arbitration clause under the master share sale purchase agreement and have initiated arbitration proceedings at Singapore International Arbitration Centre (SIAC) forum. Further the minority shareholders have not confirmed their receivable/payable balances and their share of capital composition in respective subsidiary / Joint Ventures. The matter is subjudiced.



EMCO LIMITED


EMCO LIMITED

103



2014 30 EARNING PER SHARE

Profit after tax as per statement of profit and loss (1,157.10) (423.03)Weighted average number of equity shares for basic EPS 6,53,42,000 6,51,36,860 Add:- Dilutive shares on account of ESOP 5,28,000 1,19,186 Weighted average number of equity shares for diluted EPS 6,58,70,000 6,52,56,046 Face value of equity share (`) 2,00 2.00 Basic earnings per share (`) (1.77) (0.65)Diluted earnings per share (`) (1.76) (0.65)

31 RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD - 18 A Name of the related parties with whom transactions were carried out during the year

(i) Joint VenturesShyam EMCO Infrastructure LimitedKalinga Energy & Power LimitedPT Vardhaman LogisticsPT Vardhaman Mining ServicesRabaan (s) Pte. Limited.PT Bina Insan Sukses Mandiri

(ii) Association of PersonsArki Aviation

B Name of the key management personnel and their relatives with whom transactions were carried out during the year. (i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain Mr. Shailesh S. Jain Ms. Meenakshi Jain Ms. Ratna S. Jain

(ii) Entities where Key Management Personnel have Significant Influence: EMCO Foundation EMCO Investments Private Limited

C Balance Outstanding at the Year-endNature of relationship / transactionKey Management Personnel and their relatives: Deposit given 100.00 100.00 Association of Person:Payable to AOP 22.64 32.76 Joint Ventures:Net Advance Given/ (Received) 1,167.94 (1,696.68)



EMCO LIMITED

104




D Details of Transactions with related parties1) (a) Remuneration Mr. Rajesh Jain 31.00 48.00

(b) Director Sitting Fees Mr. Shailesh Jain 1.75 0.902) Salary

Ms Meenakshi Jain 33.26 33.26 3) Rent Given

Ms Ratna S Jain 29.66 28.25 4) Expenses / Overheads incurred / recovered

EMCO Foundation - 1.70 5) Donations

EMCO Foundation 23.50 19.00 6) Business Advance

a) Given Shyam EMCO Infrastructure Limited 997.50 - b) Received Shyam EMCO Infrastructure Limited - 1,995.00

7) Loana) Given EMCO Investments Private Limited 1,000.00 - b) Received EMCO Investments Private Limited 1,000.00 -

8) Investments in Share Capital by EMCO Invesments Private Limited 1,000.00 -

9) Share of Expenses Arki Aviation 47.64 16.87

10) Business Expenses Reimbursed Shailesh Jain 32.94 -

32 a) Interest in Joint Ventures

The Company has set up Joint Ventures through its Subsidiaries holding interest in Joint ventures as follows:

Name of the Joint Venture Company Country of Incorporation Proportion of ownership interest either directly or through subsidiary

Shyam EMCO Infrastructure Limited India 50.00%

Kalinga Energy and Power Limited India 50.00%

PT Bina Insan Sukses Mandiri Indonesia 37.36%

Rabaan (S) Pte. Limited Singapore 37.35%

PT Vardhaman Mining Services Indonesia 37.35%

PT Vardhaman Logistics Indonesia 22.50%

The company’s share of the assets, liabilities, income and expenses of the jointly controlled entities are as follows:

Libilities 6,157.71 7,620.25

Assets 6,402.26 8,172.41

Income 5,598.58 6,174.91

Operating Expenses 5,885.15 6,195.80

Profit / (Loss) Before Tax (286.57) (20.89)



EMCO LIMITED


EMCO LIMITED

105

32 b) Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements to Schedule III to the 2013 Act

Sr.no Name of Subsidary Company Net Assets i.e total Assets minus total Liabilities

Share in Profit or Loss

As % of Consolidated

net Assets

Amount (` in Lakhs)

As % of Consolidated Profit or Loss

Amount (` in Lakhs)

A Parent

EMCO Limited 123.40% 58,188.93 -28.13% 325.45

B Subsidaries

(i) Indian

1 EMCO Power Limited -2.61% (1,230.07) 0.00% -

2 Shekhawati Transmission Service Company Limited 0.00% (0.79) 0.01% (0.17)

3 EMCO Renewable Energy Limited 0.00% 0.08 -0.01% 0.08

4 EMCO Infrastructure Limited 0.00% - 0.00% -

5 EMCO Transmission Networks Limited 0.00% - 0.00% -

(ii) Foreign

1 EMCO Overseas Pte. Limited (Refer Note 1) -15.53% (7,320.98) 81.83% (946.80)

2 PT Setenco Investa Niaga* -5.10% (2,403.34) 20.44% (236.47)

C Associates (Investment as per Equity Method)

(i) Foreign

1 PT Vardhaman Logistics* -0.02% (10.71) -0.66% 7.65

2 PT Vardhaman Mining Services* -0.88% (415.49) 5.57% (64.47)

3 Rabaan (s) Pte. Limited. (Refer Note 1) -0.06% (28.29) 0.33% (3.87)

4 PT Bina Insan Sukses Mandiri* 0.90% 422.64 16.94% (196.05)

D Joint Venture

(i) Indian

1 Shyam EMCO Infrastructure Limited 0.00% (1.69) 0.01% (0.08)

2 Kalinga Energy & Power Limited -0.10% (48.47) 4.11% (47.56)

E Minority Interest in all Subsidiaries 0.01% 2.94 -0.45% 5.18

100.00% 47,154.78 100.00% (1,157.09)

Notes:

* Subsidiary and Associates have reporting accounting year ending 31st December. However, for the purpose of consolidation and for the purpose of giving above information, the accounts for the year ended 31st March are prepared, the accounts for the reporting accounting year ended 31st December are audited and the three months period ended 31st March are reviewed by the auditor of subsidiary and associates.

1 Financial Information is based on Unaudited Financials (Management Represented Financials).



EMCO LIMITED

106








33 DISCLOSURE UNDER ACCOUNTING STANDARD - 7 ‘CONSTRUCTION CONTRACTS’ Contract Revenue recognised as revenue for the year ended 31st March 50,056.51 42,397.68 Aggregate amount of contract costs incurred and recognised profits (less sum of recognised losses and progress billings ) up to 31st March for all the contracts in progress as at 31st March

2,33,388.79 2,33,787.24

The amount of customer advances outstanding for contracts in progress as at 31st March

1,945.58 1,247.95

The amount of retentions due from customers for contracts in progress as at 31st March

17,142.55 16,514.91

34 PRODUCT WISE BREAK UP OF GROSS SALE Transformer 38,044.16 39,583.49 Projects, Towers & Structures 54,766.50 44,903.15 Others 7,931.85 9,215.00

1,00,742.51 93,701.64

35 Company has incurred total expenditure of ` 78.79 Lakhs (` 87.47 Lakhs) on Research and Development activities.36 The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector 37

The company has opted to avail the choice provided under paragraph 46A of AS 11: “Accounting for the effects of changes in the foreign exchange rates” as amended by notification no.: G.S.R. 914(E) dated 29th December, 2011. Accordingly, the foreign exchange difference on long term foreign currency monetary items relating to depreciable assets, is adjusted in carrying cost of depreciable assets.

38 The figures for the corresponding previous year have been restated / regrouped where ever necessary to make them comparable with the current period.

39 As approved by the Members at their Extra Ordinary General Meeting held on 22.01.2015, the Board of Directors have allotted 24,39,025 fully paid equity shares of the Company of ` 2/- each at a price of ` 41/- per equity share (including share premium of ` 39/- per equity share) under preferential allotment, to one of Promoter Group entity, as per the applicable provisions of the SEBI (ICDR) Regulations.

40 Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of accounts and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

41 The company’s normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on 12 months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

42 As per section 135 of the companies act 2013, out of total expenditure of `13.82 Lakhs which was to be incurred on corporate social responsibility activity, the company has spent ` 23.50 Lakhs during the year.


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