AMARA RAJA POWER SYSTEMS LIMITED ANNUAL REPORT 2016 … · Amara Raja Power Systems Limited NOTICE is hereby given that the 32nd Annual General Meeting of the members of Amara Raja

AMARA RAJA POWER SYSTEMS LIMITED ANNUAL REPORT 2016-17

VISION 2025

“Through the Amara Raja Way, we will be a dominant player in providing integrated solutions in

conversion and management of electrical power by leveraging sustainable technologies.

The focus would be on creating value in energy infrastructure sector by offering knowledge

based products and services, nurturing talent & technology”.

AMARA RAJA WAY

VALUES COLOR ELEMENT MIND STATE

INNOVATION BURGUNDY SPACE SYNTHESISING

EXCELLENCE MAGENTA WIND DISCIPLINED

ENTREPRENEURSHIP ORANGE FIRE CREATIVE

EXPERIENCES BLUE WATER SPIRITUAL

RESPONSIBILITY GREEN EARTH RESPECTFUL AND ETHICAL

AMARA RAJA POWER SYSTEMS LIMITED

Annual Report 2016-17

CORPORATE INFORMATION

Board of Directors Dr Ramachandra N Galla (DIN: 00133761) Chairman Mr Jayadev Galla (DIN: 00143610) Vice Chairman Mr Vikramadithya Gourineni (DIN: 03167659) Managing Director

(w.e.f. April 3, 2017) Dr G Ramadevi (DIN: 01347211) Non-Executive Director

(upto May 31, 2017) Dr Upendranath Nimmagadda (DIN: 00613289) Non-Executive Director Mr M Narasimhappa (DIN: 03319847) Non-Executive Independent Director Mr Ajay Kumar Dhagat (DIN: 00250792) Non-Executive Independent Director Mr Siddharth Galla (DIN: 07342402) Additional Director

(w.e.f. May 25, 2017) Management Team

Mr S Vijayanand Chief Executive Officer (upto March 31, 2017)

Mr M M Venkata Krishna VP – Business Development (w.e.f. February10, 2017)

Mr Srinivasa Venu VP –EPC Projects (w.e.f. February10, 2017)

Mr. Chandramouleeswaran DGM – Finance & Accounts (upto May 26, 2017)

Company Secretary Mr D Chiranjeevi Raju w.e.f. May 25, 2017

Statutory Auditor Cost Auditor

M/s Sagar & Associates M/s Nageswara Rao & Co Chartered Accountants Cost Accountants H.No.6-3-244/5, Sarada Devi Street H.No.30-1569/2 (Plot No.35) Prem Nagar Ananta Nagar Colony, Neredmet Hyderabad – 500004 Secunderabad -500056 Secretarial Auditor V Suresh Associates Practising Company Secretaries #28, Ganapathy Colony III Street Teynampet, Chennai -600 018 Bankers

State Bank of India, Settipalli, Tirupati, Andhra Pradesh Andhra Bank, Main Branch, Tirupati, Andhra Pradesh

Corporate Identification Number (CIN):U31102AP1984PLC005165

Corporate Operations Office Registered Office:

Terminal A Renigunta-Cuddapah Road

1-18/1/AMR/NR Karakambadi, Tirupati,

Nanakramguda, Gachibowli Andhra Pradesh – 517520

Hyderabad – 500032 Tel: 91(877) 226 5000

Tel: 040-23139000 Fax: 91(877) 228 5600

Website: www.amararajapowersystems.com


Annual Report 2016-17

CONTENTS Page No.

Notice of Annual General Meeting 01

Directors’ Report to the Shareholders 12

Independent Auditors’ Report 45

Balance Sheet 54

Statement of Profit and Loss 55

Cash Flow Statement 56

Notes forming part of the Financial Statements 57

1

NOTICE OF THE ANNUAL GENERAL MEETING

To the Members of Amara Raja Power Systems Limited NOTICE is hereby given that the 32nd Annual General Meeting of the members of Amara Raja Power Systems Limited will be held on Monday, September 25, 2017 at 10.30 A.M. IST at the Registered Office of the Company situated at Renigunta – Cuddapah Road, Karakambadi – 517 520, Tirupati, Andhra Pradesh, to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited financial statements of the Company for the financial year ended March 31, 2017 together with the reports of the Board of Directors’ and Auditors’ thereon.

2. To declare dividend on the equity shares of the Company for the financial year ended March 31, 2017.

3. To appoint a director in place of Dr.Upendranath Nimmagadda (DIN: 00613289), who retires by rotation in terms of Article 122 of the Articles of Association of the Company at this Annual General Meeting and being eligible offers himself for re-appointment.

4. To ratify the appointment of M/s. Sagar & Associates as Auditors for the period from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and fix their remuneration and in this regard to consider, and if thought fit, to pass, with or without modification(s), the following resolution, as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and other Rules framed thereunder, as amended from time to time, the appointment of M/s. Sagar & Associates, Chartered Accountants, Hyderabad, (Firm Registration No. 003510S) as Auditors of the Company for a period of 5 consecutive years, made at the 30th Annual General Meeting (AGM) held on September 15, 2015 be and is hereby ratified to hold office for the period from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting on a remuneration of Rs.3,00,000/- per annum (Rupees Three lakhs only) plus reimbursement of out of pocket expenses and applicable taxes and the Board of Directors of the Company be and they are hereby authorised to pay such increased audit fees as they may deem fit.”

SPECIAL BUSINESS

5. To appoint Mr. Vikramadithya Gourineni (DIN: 03167659) as a Director and in this regard to consider, and if thought fit to pass, with or without modification(s), the following resolution as an Ordinary Resolution.

2

“RESOLVED THAT pursuant to the provisions of Section 152 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended from time to time (“Act”), Mr Vikramadithya Gourineni (DIN: 03167659) who was appointed as an Additional Director of the Company with effect from April 3, 2017 by the Board of Directors, who holds office upto the date of this Annual General Meeting under Section 161 of the Act and Article 107 of the Articles of Association of the Company, being eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160 of the Act from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, not liable to retire by rotation.”

6. To appoint Mr. Vikramadithya Gourineni (DIN: 03167659) as a Managing Director and in this regard

to consider, and if thought fit to pass, with or without modification(s), the following resolution as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provisions of Section 196, 197 and other applicable provisions, if any, of the Companies Act, 2013, (the Act) read with Schedule V of the Act and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), and all applicable guidelines issued by the Central Government from time to time and subject to such other approvals, as may be necessary, consent of the Members be and is hereby accorded to the appointment of Mr. Vikramadithya Gourineni (DIN: 03167659) as the Managing Director of the Company for a period of five years with effect from April 3, 2017 till April 2, 2022 on the terms and conditions including remuneration as detailed herein below:

1. The Managing Director shall, subject to the supervision and control of the Board of Directors; carry out such duties as may be entrusted to him by the directors and shall exercise such powers as are delegated to him by the Board of Directors.

2. Period of Agreement: 5 years from April 1, 2017 to March 31, 2022

3. Remuneration:

Salary: Rs. 6,45,000/- per month (Rupees Six lakhs forty five thousand only)

Variable Performance Pay (VPP): Rs.19,00,000/- per annum (Rupees Nineteen lakhs only). VPP will be an annual payment based on the actual level of achievement on the Business /Company performance and individual performance, based on the overall objectives and criteria decided by the Board.

Commission: Such amount as may be approved by the Board or Nomination & Remuneration Committee of the Board based on the performance of the Company for each of the year.

4. Perquisites/Benefits:

House Rent Allowance / Accommodation:

3

House Rent Allowance as may be applicable to the employees of the Company or provision of furnished accommodation.

Medical Reimbursement:

Reimbursement of medical expenses incurred for self and family and dependent parents, subject to a ceiling of one month’s salary per year.

Leave Travel Concession:

Leave Travel Concession for self and family to and from any place in India, once in a year in accordance with the rules of the Company.

Provident Fund:

Contribution to Provident Fund, Superannuation Fund or Annuity Fund to the extent these, either singly or put together, are not taxable under the Income Tax Act, 1961.

Leave Encashment:

Encashment of leave at the end of tenure as per the rules of the Company

Gratuity:

Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service.

Car: Company’s car with driver for business purposes.

Telephone:

Telephone / Communication facilities at residence for business purposes

Club Fee:

Club fees are subject to a maximum of two clubs. No admission and life membership fee will be paid.

5. Overall Remuneration:

The aggregate of salary, variable performance pay, commission and perquisites in any financial year shall not exceed the limits prescribed from time to time under Sections 196, 197 and other applicable provisions of the Companies Act, 2013 including any statutory modifications or re-enactment thereof, read with Schedule V to the said Act, as may, for the time being, be in force.

6. Minimum Remuneration:

Notwithstanding anything to the contrary contained herein, where, in any financial year during the currency of the tenure of Mr. Vikramadithya Gourineni, the Company has no profits or its profits are inadequate, the Company will pay remuneration to the maximum as laid down in Section II of Part II of Schedule V to the Companies Act, 2013 as minimum remuneration.

4

7. The Managing Director shall be entitled to reimbursement of all actual expenses or charges including travel, entertainment or other out-of-pocket expenses incurred by him for and on behalf of the Company, in furtherance of its business.

8. The terms and conditions of the said appointment and/or agreement may be altered, enhanced or varied from time to time by the board as it may, in its discretion, deem fit.

9. The agreement may be terminated by either party after giving the other party three (3) months’ notice.

10. The Managing Director shall not be entitled to receive any fees for attending Meetings of the

Board/committee.

RESOLVED FURTHER that the Board of Directors (hereinafter referred to as “the Board” ) be and is hereby authorised to alter and vary the terms and conditions of the said appointment and remuneration including authority to determine/ vary from time to time the amount of salary, perquisites, other benefits and allowances and commission payable as recommended by the Nomination and Remuneration Committee from time to time as may be considered appropriate, subject to the overall limits specified by this resolution and the Companies Act, 2013, to Mr. Vikramadithya Gourineni (DIN: 03167659), in such manner as may be agreed between the Board and Mr. Vikramadithya Gourineni (DIN: 03167659), subject to the total remuneration not exceeding five percent (5%) of the net profits of the Company per annum and to do all such acts, deeds, matters and things as it may, in its sole and absolute discretion deem necessary, expedient, usual or proper to give effect to this resolution.”

7. To appoint Mr. Siddharth Galla (DIN: 07342402) as a Director and in this regard to consider, and if thought fit to pass, with or without modification(s), the following resolution as an Ordinary Resolution.

“RESOLVED that pursuant to the provisions of Section 152 and all other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended from time to time (“Act”), Mr. Siddharth Galla (DIN: 07342402) who was appointed as an Additional Director of the Company with effect from May 25, 2017 by the Board of Directors, who holds office upto the date of this Annual General Meeting under Section 161 of the Act and Article 107 of the Articles of Association of the Company, being eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160 of the Act from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”

8. To ratify the remuneration of the Cost Auditors for the financial year 2017-18 and in this regard, to

consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisions, if any, of the Companies Act, 2013 (Act) and the Companies (Audit and Auditors) Rules, 2014 as amended from time to time, M/s Nageswara Rao & Co, Cost Accountants, Hyderabad, Firm

5

Registration No. 000332, appointed by the Board of Directors as Cost Auditors to conduct the audit of the cost records of the Company for the financial year 2017-18, at a remuneration of Rs.80,000/- per annum (Rupees Eighty thousand only) plus reimbursement of out of pocket expenses and applicable taxes be and is hereby ratified.

RESOLVED FURTHER THAT the Board of Directors and Mr. D. Chiranjeevi Raju, Company Secretary of the Company be and they are hereby severally authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.”

By Order of the Board For Amara Raja Power Systems Limited

Dr. Ramachandra N Galla Date: May 25, 2017 Chairman Place: Hyderabad (DIN: 00133761)

Corporate Identification Number (CIN): U31102AP1984PLC005165 Registered Office:

Renigunta-Cuddapah Road Karakambadi, Tirupati – 517520 Andhra Pradesh Tel: 91(877) 226 5000 / Fax: 91(877) 228 5600 Website:www.amararajapowersystems.com

NOTES: 1. A Member entitled to attend and vote at the Annual General Meeting (the “meeting”) is

entitled to appoint a proxy to attend and vote on a poll, instead of himself / herself and the Proxy so appointed need not be a Member of the Company.

2. A person can act as proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as proxy for any other person or shareholder.

The proxy form in order to be effective must be deposited at the registered office of the Company not less than 48 hours before the commencement of the meeting.

6

3. The explanatory statement pursuant to Section 102(1) of the Companies Act, 2013, which sets out details relating to the special business to be transacted at the meeting, is annexed hereto.

4. The registers i.e. Register of Directors and Register of Contracts or Arrangements maintained under Section 170 and Section 189 of the Companies Act, 2013 will be available for inspection to the members at the meeting.

5. The register of members and share transfer books of the Company will remain closed from Tuesday, September 19, 2017 to Monday, September 25, 2017 (both days inclusive), for the purpose of determining the entitlement of member to the dividend for the financial year 2016-17, if declared at the meeting.

6. The dividend, if declared, shall be paid on or before October 24, 2017 to those members whose

name appear in the register of members as of the close of business hours on September 19, 2017 and in case of shares held in dematerialised form to the beneficiaries as of the close of business hours on September 19, 2017 as per details furnished by the Depositories.

7. The copies of the Annual Report 2016-17 including the notice of the 32nd Annual General Meeting of

the Company, attendance slip and proxy form are being sent by electronic mode to all the members whose e-mail address are registered with the Company/Depositories for communication purposes. For members who have not registered their e-mail address, the aforesaid documents are being sent in the permitted mode.

8. Members may also note that the notice of the 32nd annual general meeting, proxy form and the

Annual Report 2016-17 shall be placed on the Company’s website www.amararajapowersystems.com. The physical copies will also be available at the registered office of the Company for inspection during normal business hours on working days.

9. The route map to the venue of the meeting is furnished herewith and forms part of the Notice.

10. Members holding shares in physical form are requested to advise any change in their address immediately.

11. Members seeking any information with regard to the financial statements are requested to write to the Company atleast 7 days before the meeting so as to enable the management to keep the information ready at the meeting.

12. Members are requested to handover the attendance slip, duly signed in accordance with their

specimen signature(s) registered with the Company for admission to the meeting hall.

7

Statement pursuant to Section 102 (1) of the Companies Act, 2013 (Act)

The following statement sets out all material facts relating to special business mentioned in the accompanying notice dated May 25, 2017 and shall be taken as forming part of the notice.

Item No.5 & 6

Mr Vikramadithya Gourineni (DIN: 03167659) was appointed as an Additional Director and Managing Director of the Company by the Board of Directors for a period of five years with effect from April 3, 2017, pursuant to the provisions of Section 161 and Section 196 respectively of the Companies Act, 2013 (Act) based on the recommendation of the Nomination & Remuneration Committee and on the terms of appointment and remuneration payable as are specified in the draft agreement to be executed between Mr. Vikramadithya gourineni and the Company, a copy of which (as has also been duly approved by the Board) will be placed before the meeting and is subject to the approval of the shareholders and other approvals, if any, as may be necessary. In terms of Section 161 of the Act, Mr Vikramadithya Gourineni holds office only upto the date of the ensuing Annual General Meeting of the Company, and is eligible for appointment as Director. The Company has received a notice in writing under the provisions of Section 160 (1) of the Act, from a member proposing his candidature for the office of Director under Section 152 of the Act, along with the requisite deposit. The Company has received from Mr Vikramadithya Gourineni the requisite disclosures/declarations pursuant to the provisions of the Act. Mr Vikramadithya Gourineni is interested in the resolution as set out at item no.5 & 6 of this notice with regard to his appointment as a Director and Managing Director.

The principal terms of appointment and remuneration of Mr. Vikramadithya Gourineni (DIN: 03167659) as Managing Director are as follows: Remuneration:

Salary: Rs. 6,45,000/- per month (Rupees Six lakhs forty five thousand only)

Variable Performance Pay (VPP): Rs.19,00,000/- per annum (Rupees Nineteen lakhs only). VPP will be an annual payment based on the actual level of achievement on the Business/Company performance and individual performance, based on the overall objectives and criteria decided by the Board.

Commission: Such amount as may be approved by the Board or Nomination & Remuneration Committee of the Board based on the performance of the Company for each of the year.

Notwithstanding anything to the contrary herein contained, where in any financial year, the Company has no profits or its profits are inadequate, the Company will pay Mr. Vikramadithya Gourineni (DIN: 03167659), the Managing Director of the Company, the remuneration by way of salary, perquisites and allowances as specified above subject to the approval of the Central Government, where required.

8

The Managing Director shall also be entitled to reimbursement of expenses actually incurred by him for the business of the Company. He shall not be paid any sitting fees for attending meetings of the Board or Committee thereof. Mr. Vikramadithya Gourineni satisfy all the conditions set out in Part-I of Schedule V to the Companies Act, 2013 as also conditions set out under sub-section (3) of Section 196 of the Act for being eligible for his appointment. He is not disqualified from being appointed as Director in terms of Section 164 of the Act. A brief resume of Mr Vikramadithya Gourineni, as required under Secretarial Standard-2, forms part of this Notice as Annexure I. Mr. Vikramadithya Gourineni belong to the promoter’s family and he is not related to any other director of the Company in terms of Section 2(77) of the Companies Act, 2013. Mr. Vikramadithya Gourineni (DIN: 03167659), Managing Director shall not be liable to retire by rotation. The resolution is recommended for your approval. The copy of resolution passed by the Board of Directors of the Company in its meeting held on April 3, 2017 approving the aforesaid proposal along with other documents is available for inspection by the members at its registered office and corporate office between 9.15 a.m. to 05.45 p.m. on any working day prior to the date of the meeting. Save and except the above, Dr Ramachandra N Galla, Mr Jayadev Galla and Mr Siddharth Galla Directors of the Company are concerned or interested, financially or otherwise, in this resolution. But they are not relatives as per Section 2(77) of the Companies Act, 2013. The Board recommends the Ordinary Resolution set out at Item No.5&6 of the Notice for approval by the shareholders. Item No.7

Mr Siddharth Galla was appointed as an Additional Director of the Company by the Board of Directors with effect from May 25, 2017, pursuant to the provisions of Section 161 of the Companies Act, 2013 (Act) based on the recommendation of the Nomination & Remuneration Committee. In terms of Section 161 of the Act, Mr Siddharth Galla holds office only upto the date of the ensuing Annual General Meeting of the Company, and is eligible for appointment as Director. The Company has received a notice in writing under the provisions of Section 160 (1) of the Act, from a member proposing his candidature for the office of Director under Section 152 of the Act, along with the requisite deposit. The Company has received from Mr Siddharth Galla the requisite disclosures/declarations pursuant to the provisions of the Act. A brief resume of Mr Siddharth Galla, as required under Secretarial Standard-2, forms part of this Notice as Annexure I.

9

Mr Siddharth Galla and Mr Jayadev Galla is interested in the resolution as set out at item no. 7 of this notice with regard to his appointment as a Director.

The Board recommends the Ordinary Resolution set out at Item No. 7 for approval by the shareholders. Item No.8

The Board of Directors at their meeting held on May 25, 2017 on recommendation of the Audit Committee, approved the appointment of M/s Nageswara Rao & Co, Cost Accountants, Hyderabad as cost auditors of the Company to conduct the audit of the cost records of the Company across various segments, for the financial year 2017-18 on a remuneration of Rs.80,000/- per annum (Rupees Eighty thousand only) plus reimbursement of out of pocket expenses and applicable taxes.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, consent of the Members is sought by way of ordinary resolution as set out at item no.8 of the notice ratifying the remuneration payable to the Cost Auditors for the financial year 2017-18

By Order of the Board

For Amara Raja Power Systems Limited Place: Hyderabad Dr. Ramachandra N Galla Date: May 25, 2017 Chairman

(DIN: 00133761)

10

Annexure 1

DETAILS OF DIRECTORS SEEKING APPOINTMENT AND RE-APPOINTMENT IN ANNUAL GENERAL MEETING FIXED FOR SEPTEMBER 25, 2017 Name of the Director Dr.Upendranath

Nimmagadda Mr.Vikramadithya Gourineni

Mr.Siddharth Galla

Director`s Identification Number (DIN)

00613289

03167659 07342402

Date of birth 01/09/1942 24/11/1989 23/08/1994 Date of appointment August 16, 2006 April 3, 2017 May 25, 2017 Qualification B.Sc, M.B.B.S, MD,

FACS,FRCS

Bachelor of Science-Natural Sciences, University of Wisconsin

ISH Diploma (ISH diploma is equivalent to American High School Diploma)

Experience & Expertise in specific functional area

He is a Surgeon by profession, was associated with North Suburban Clinic, IIIinios, USA during the period 1973 to 1999. He is a Fellow member of American College of Surgeons, Royal College of Surgeons, India Medical Association of IIIinois, Association of American Physicians of India. He is presently on the teaching staff at IIIinois Masonic Medical Center, Chicago. He is also associated with Banking Industry. He is the Chairman of the Executives committees of National Republic Bank of Chicago, IIIinois, USA, which he co-founded in 1984.

Worked as a Management Trainee at Leprino Foods in Lemoore, California and Worked as a Management Trainee at Amara Raja Batteries Limited.

Terms & Conditions of Appointment or re-appointment

As per Company’s Policy on Appointment of Board Members

As mentioned in the Explanatory Statement attached to this Notice

As mentioned in the Explanatory Statement attached to this Notice

Remuneration last Nil Nil Nil

11

drawn Shareholding in the Company as on 31.03.2017

674850 338219 338219

Relationship with other directors and KMPs of the Company

Nil Dr Ramachandra N Galla Grandfather, Mr Jayadev Galla, Uncle and Mr Siddharth Galla, Cousin

Dr Ramachandra N Galla Grandfather, Mr Jayadev Galla, Father and Mr Vikramadithya Gourineni, Cousin

No. of Meetings of the Board attended during the year

3 Nil Nil

List of Companies* in which outside directorship held

Micro Energy (India) Limited

Fine-Line Circuits Limited

Arista Power Private Limited

Sandhya Hotels (west) Private Limited

Pithalla Estates Private Limited

Kavi Resorts Private Limited

3NRI Institute of Medical Science and Research Center Private Limited

Three Seasons Exim Limited

Amara Raja Electronics Limited

Amara Raja Infra Private Limited

Amara Raja Media and Entertainment Private Limited

Amara Raja Industrial Services Private Limited


Amara Raja Media and Entertainment Private Limited

Chairman/Member of the Committees* of Board of Directors of Indian Companies

Chairman at Microenergy India, Amara Raja Power Systems Limited & Fine Line Circuits – NRC# member

Nil Nil

* includes directorship/ committee positions in other Indian companies.

# NRC – Nomination & Remuneration Committee

12

DIRECTORS' REPORT To The Members Amara Raja Power Systems Limited Tirupati, Andhra Pradesh Your Directors have pleasure in presenting their report together with the audited financial statements for the financial year ended March 31, 2017. FINANCIAL HIGHLIGHTS

The highlights of the performance of the Company for the year ended March 31, 2017 is summarized below:

(Rs. in Lakhs)

Particulars For the year ended

March 31, 2017 March 31, 2016

Net Sales (excluding other income) 308,36.92 204,00.26

Other Income 84.11 61.43 Total Revenue 309,21.03 204,61.69 Total expenses 279,39.58 191,12.53 Profit/(Loss) after tax 19,85.36 9,10.81 Add: Profit brought forward from last year 27,18.58 18,07.76 Profit available for appropriation 47,03.94 27,18.58 Appropriation 3,64.12 - Surplus carried to balance sheet 43,39.81 27,18.58

OPERATIONS AND BUSINESS PERFORMANCE During the financial year 2016-17, both Products and EPC projects business has helped the Company achieve overall revenue growth of 51%. While the products business had a growth of 8% and EPC business had a growth of 112%. The Product and Project revenue mix has been 41:59 during FY17. In products the business mix has changed favorably with 35% of the revenue coming from panels and new business opportunities. This compliments the vision of the Company in building new businesses in the areas of Panel products systems, Integration solutions and EPC projects. The PBT has grown more than 2 times from Rs 135 mn to Rs 298 mn validating the measures we have taken to grow the business profitably. Further, the Company successfully completed its rights issue of Rs 280 mn with the existing shareholders, with the proceeds being used to repay certain interest bearing loans and fund infrastructure expansion.

Despite the increase in revenue by 51%, due to efficient cash flow management, reduction in certain interest bearing loans out of partial proceeds of rights issue and leveraging on financing schemes, we have been able to keep interest costs down at Rs.41 mn in FY17 as against Rs 43 mn in FY16.

During the year under review, emphasis has been on scaling up EPC projects business and diversifying the products business by tapping emerging solar market for Panel Business, System Integrated Package solutions for utilities. The Railway business continues to be stable helping us maintain required contribution and maintain significant market share.

13

The Service Segment poised to enter into the next phase of Business Growth by venturing into Sub-Station O& M Business and further scouting for opportunities in Solar. We recently backed an O&M order for Rs 25 mn for 2 substations at Kurnool.

During the year under review, we have further consolidated our position as an emerging and prominent EPC player in the Solar Power Evacuation by bagging order for four 220KV S/s at Pavagada in Karnataka and two 220KV s/s at Kurnool in Andhra Pradesh, which has further strengthen the EPC business and technical qualification requirements. We continue to engage with MSETCL, KPTCL and OPTCL with ongoing implementation of project and scouting for opportunities to bid for future projects selectively. As we are working closely with PGCIL for an entry into Transmission Business, we have got an opportunity for 765 KV Vemagiri Expansion Project, as a sub–Contractor, which will help us gain the experience.

During the year, the commissioning of Two no’s 220 KV /33 KV Solar power evacuation substation projects at Kurnool ahead of time (3.5 months as against normal practice of 8 months), has impressed APTRANSCO and other stake holders i.e APSPCL,SECI and Solar Developers , which will fetch us future Business opportunities in Solar Parks.

The Bays were commissioned within 12 months at our first 400KV Sub-Station project at Dindi, which has been recognized and appreciated by TSTRANSCO.

Our company received “Silver award” from “India rooftop solar congress 2017” under the category of “Solar Rooftop EPC Company of the year” for executing 1.2 MW Solar Rooftop at Amara Raja Batteries Limited, ARGC, Chittoor.

During the year, Solar Rooftop business has enhanced by bagging an order of 1.4 MW from MESCOM, Karnataka. We have also successfully commissioned 1.38 MW of Solar Roof Top plant at Amara Raja Batteries, ARGC, Chittoor.

We are working towards enhancing our capabilities to obtain credentials for Qualification for entry into new diversified projects like UG cabling and GIS substations through project specific JV Partnership and had an opportunity to participate in the tenders

We are closely monitoring opportunities to work on Indoor Distribution s/s, UG cable Works with DISCOM’s for further foray into Distribution Infrastructure of Smart City networks and Storage Solutions.

The Company made a breakthrough business in the solar segment by bagging an order for 149 no’s of MV panels from M/S ACME for AP, TS and KA Solar Projects.

The Company has also bagged two high value Package orders from OPTCL and JUSNL of Rs 239 Mn, which includes first automation order for 132 KV Sub-station.

We are closely working with railways to promote New Generation IPS to strengthen the Railway Business. The Overall Railway business was encouraging for the year under review, as Indian Railways planned for the augmentation in the Signaling area and New Projects being implemented through Rail Vikas Nigam Ltd (RVNL) and Central Organisation for Railway Electrification (CORE).

The Solar Rooftop business (DSS -Distributed Solar solutions) has been merged with ARPSL to give more focus into the segment which caters to less than 50 KW in Residential, Commercial, Industrial and Govt. Sectors both in Off-Grid and Grid tie systems.

14

OUTLOOK

The utility electricity sector in India has a National Grid with an installed capacity of 330 GW (as of 30 April 2017). Renewable power plants (Including Hydro plants) constitute 31% of total installed capacity. The electricity generation target for the year 2016-17 was fixed as 1178 Billion Unit (BU). i.e. growth of around 6.38% over actual generation of 1108 BU for the previous year (2015-16). The generation during 2015-16 was 1108 BU as compared to 1049 BU generated during 2014-15, representing a growth of about 5.64%.

India is the world's third largest producer and fourth largest consumer of electricity. Electric energy consumption in agriculture was recorded highest (17.89%) among all countries. The per capita electricity consumption is low compared to many countries despite cheaper electricity tariff in India.

In order to address the lack of adequate electricity availability to all the people in the country by March 2019, the Government of India (GoI) launched a scheme called "Power for All". This scheme will ensure continuous and uninterrupted electricity supply to all households, industries and commercial establishments by creating and improving necessary infrastructure. It’s a joint collaboration of GoI with states to share funding and create overall economic growth.

India has a huge hydro power potential of 148 GW, out of which only 42 G has been realized till date. Steps have been taken to attract investments into the hydro sector. Government is planning Hydropower Purchase Obligation (HPO), which will obligate the power distribution companies to purchase power from hydro power plants.

India’s solar market expected to grow by 90% during FY18:

We look at key anticipated themes and developments for FY18. We start the year with a pipeline of around 14 GW of utility scale projects, out of which 7.7 GW is expected to be commissioned in the year (growth of around 90% over last year). Combined with 1.1 GW of expected rooftop solar capacity, India should add a total of 8.8 GW in 2017-18, ranking it amongst the top three global markets after China and USA.

Despite concerns about weak power demand growth and growing incidence of grid curtailment, solar power outlook in India remains very strong;

2017 is expected to be a bumper year for the sector in India with total installed capacity reaching around 18 GW by the end of the year;

There has been some concern about weak power demand growth in India and growing incidence of grid curtailment and what it means for growth of solar power. But we believe that continuing reduction in module prices and downward trend in domestic interest rates will provide strong ongoing demand impetus to the market. Solar tariffs have fallen below INR 2.50 / kWh mark making solar power the cheapest new source of power. At the same time, improving financial health of power distribution companies due to Ujwal DISCOM Assurance Yojana (UDAY) implementation will also help in sustaining renewable energy demand in particular. We expect sustainable demand of 6-8 GW for utility scale solar in the coming years.

As the Indian market ramps up, it will become a key pillar for demand growth when demand in other leading countries including China, Japan and even possibly USA is expected to slow down. We already see leading international equipment suppliers paying more attention to this market and developing specific pricing and product strategies for India.

15

However, we are still unsure if improving domestic demand will lead to large-scale investments in Greenfield manufacturing capacity. Notwithstanding the Indian government’s keenness to support domestic manufacturing as part of ‘Make in India’ campaign, the competitive dynamics are stacked against this sector.

Implementation of Goods and Services Tax (GST) during the year will lead to marginal cost increases and may create uncertainty for developers and contractors although there is a widespread expectation that any adverse impact will be passed through to the distribution companies.

Rooftop solar will also continue its spectacular growth trajectory in 2017. We expect around 1.1 GW of rooftop solar capacity to be added in 2017, up 75% from 2016, driven by capital subsidies and substantial demand from public sector.

SHARE CAPITAL

During the year under review, 46,68,542 equity shares of Rs.10/- each were offered and allotted to the existing shareholders on Rights basis. Consequent to the allotment, the paid-up equity share capital of the Company as at March 31, 2017 stood at Rs.9.33 crores comprising of 93,37,084 equity shares of Rs.10/- each.

DIVIDEND The Directors recommend a dividend of Rs.3.25/- (representing 32.5%) per equity share of Rs.10/- each for the financial year 2016-2017, subject to the approval of the shareholders. The dividend, if approved, would involve a cash outflow of Rs.3.03 Crores (excluding corporate dividend tax). TRANSFER TO RESERVES

Your directors have proposed to retain a surplus amount of Rs.47,03,94,795/- in the statement of Profit and Loss and not to transfer to the general reserves.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr M.Narasimhappa and Mr.Ajay Kumar Dhagat are the present Independent Directors of the Company appointed pursuant to the provisions of Section 149 of the Companies Act, 2013 (Act). They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as an Independent Director during the year. During the year, Mr M.Narasimhappa and Mr.Ajay Kumar Dhagat, Independent Directors had met separately on March 18, 2017 without the attendance of non-independent directors and members of the management and reviewed the performance of the Non-Executive Directors and Board as a whole.

16

In accordance with the provisions of Section 152 of the Companies Act, 2013, Dr.Upendranath Nimmagadda (DIN: 00613289) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

In order to provide an opportunity to the next generation to lead the businesses, Dr. Ramachandra N Galla, Chairman and Managing Director of the Company stepped down from the position of Managing Director and continue as Non-Executive Chairman. The Board placed on record their sincere appreciation for the valuable services rendered by him during his tenure as a Managing Director of the Company. Further Mr.Vikramadithya Gourineni (DIN: 03167659) was appointed as an Additional Director and Managing Director on the Board with effect from April 3, 2017, who holds office upto the date of the ensuing Annual General Meeting.

Mr.Siddharth Galla (DIN: 07342402) was appointed as an Additional Director on the Board with effect from May 25, 2017, who holds office upto the date of the ensuing Annual General Meeting.

The Company has received notices in writing under Section 160 of the Act proposing the appointment of Mr. Vikramadithya Gourineni and Mr. Siddharth Galla as Directors. The resolutions seeking members approval for the re-appointment of Dr. Upendranath Nimmagadda, Director and appointment of Mr. Vikramadithya Gourineni and Mr. Siddharth Galla as Directors are included in the notice of the ensuing annual general meeting along with the brief details about them. Dr Ramadevi Gourineni, Non-Executive Director, (DIN: 01347211) resigned from the office of Directorship with effect from May 31, 2017. The Board wishes to place on record their sincere appreciation for the valuable services rendered by her during her tenure as a Director of the Company. Mr S Vijayanand relinquished from the position of Chief Executive Officer (CEO) with effect from March 31, 2017. The Board placed on record its sincere appreciation for the valuable services rendered by him during his tenure as CEO of the Company and wished him the best in his new role.

The Board of Directors appointed Mr. D Chiranjeevi Raju as a Company Secretary (FCS7793) of the Company with effect from May 25, 2017.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Company is not required to appoint Key Managerial Personnel for the financial year 2016-17, as the Company is not fulfilling the criteria.

AUDITORS

M/s. Sagar & Associates, Chartered Accountants, Hyderabad were appointed as the statutory auditors for a term of five (5) years from the conclusion of the 30th annual general meeting till the conclusion of the 35th annual general meeting. As required under the provisions of Section 139 of the Companies Act, 2013 a resolution for the yearly ratification of their appointment is being placed before the shareholders for their approval. In this regard, the Company has received a certificate from the auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Auditors Report does not contain any qualification, reservation or adverse remark.

17

As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules as amended from time to time, the cost records are required to be audited. Based on the recommendation of the Audit Committee, your Board has appointed M/s. Nageswara Rao & Co., Cost Accountants, Hyderabad as cost auditors for the financial year 2017-18. Necessary resolution for ratification of their remuneration is being placed before the shareholders for their approval. Pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr.V.Suresh, Practising Company Secretary (C.P.No-6032) to undertake the secretarial audit of the Company for the financial year 2016-17. The Secretarial Audit Report in Form No.MR-3 from them is annexed herewith as Annexure I. The Secretarial Auditors’ Report does not contain any qualifications, reservations or adverse remarks.

DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Companies Act, 2013, the Board of Directors of the Company confirm to the best of their knowledge and belief that in the preparation of the statement of profit and loss for the financial year ended March 31, 2017 and the balance sheet as at that date (“financial statements”). The directors confirm that: i) in the preparation of the annual accounts for the financial year ended March 31, 2017, the

applicable accounting standards have been followed;

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

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. To ensure this, the Company has established internal control systems, consistent with its size and nature of operations, subject to the inherent limitations that should be recognized in weighing the assurance provided by any such system of internal controls. These systems are reviewed and updated on an on-going basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The audit committee meets at regular intervals to review the internal audit function;

iv) the financial statements have been prepared on a going concern basis.

v) the proper internal financial controls are in place and that such internal financial controls were adequate and were operating effectively

vi) the systems to ensure compliance with the provisions of all applicable laws are in place and were

adequate and operating effectively.

18

INFORMATION AND DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND THE SECRETARIAL STANDARDS NOTIFIED BY THE CENTRAL GOVERNMENT

EXTRACT OF ANNUAL RETURN The extracts of Annual Return is prepared in Form MGT-9 as per the provisions of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, which forms part of this report and the same is enclosed as an Annexure II.

NUMBER OF MEETINGS OF THE BOARD AND THE ATTENDANCE OF THE DIRECTORS

During the year four meetings of the Board of Directors of the Company were convened and held in accordance with the provisions of the Act. The meetings of the Board were held on July 07, 2016, September 20, 2016, October 27, 2016 and February 10, 2017. The details of attendance of each director at the meetings held during the year are as follows:

Name & Designation of the Directors No. of Board Meetings held

No. of Board Meetings attended

Dr. Ramachandra N Galla Chairman and Managing Director

4 4

Mr. Jayadev Galla Vice Chairman

4 2

Dr. Ramadevi Gourineni Non-Executive Director

4 3

Dr Upendranath Nimmagadda Non-Executive Director

4 3

Mr. M Narasimhappa Non-Executive Independent Director

4 3

Mr. Ajay Kumar Dhagat Non-Executive Independent Director

4 4

COMMITTEES OF THE BOARD

In compliance with the provisions of Sections 135, 177 and 178 of the Companies Act, 2013, the Board constituted Corporate Social Responsibility Committee, Audit Committee and Nomination and Remuneration Committee. The details of composition of the Committees, their meeting and attendance of the members are given below:

AUDIT COMMITTEE

During the year three meetings of the Audit committee of the Board of Directors were convened and held in accordance with the provisions of the Act. The meetings of the Committee were held on July 07, 2016, October 27, 2016 and February 10, 2017. The details of attendance of each director at the meetings held during the year are as follows:

19

S.No. Name & Designation of the members

No. of Audit Committee Meetings held

No. of Audit Committee Meetings attended

1 Mr M Narasimhappa, Chairman 3 3 2 Mr. Ajay Kumar Dhagat, Member 3 3 3 Dr Ramachandra N Galla, Member 3 3

NOMINATION AND REMUNERATION (N&R) COMMITTEE

The constitution and terms of reference of the Nomination and Remuneration Committee are in accordance with and covers all the matters specified under Section 178 of the Companies Act, 2013 During the year the committee met once i.e. on July 07, 2016. The composition of the Nomination and Remuneration Committee and attendance of members are given below: S.No. Name & Designation of the

members No. of N&R Committee Meetings held

No. of N&R Committee Meetings attended

1 Mr Ajay Kumar Dhagat, Chairman 1 1 2 Mr M Narasimhappa, Member 1 1 3 Dr Upendranath Nimmagadda, Member 1 1

NOMINATION AND REMUNERATION POLICY The Board has on the recommendation of Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Nomination and Remuneration Policy adopted by the Board is available on the company’s website: www.amararajapowersystems .com and given as Annexure III. REMUNERATION TO DIRECTORS

The remuneration structure of Managing Director/Executive Director comprises of basic salary, commission, perquisites and allowances, contribution to provident fund etc. The remuneration is determined considering various factors such as qualification, experience, expertise, prevailing remuneration in the industry and the financial position of the Company.

All Non-Executive Directors except Galla family are entitled to sitting fee for attending the Board/Committee meetings and also for reimbursement of out of pocket expenses for attending the meetings. A sitting fee of Rs. 10,000/- for attending each meeting of the Board, sitting fee of Rs. 5,000/- for attending each meeting of the Committee(s) of the Board was paid to the directors during the year under review. Further shareholders had given their approval at the 30th AGM of the Company to pay Commission of Rs.1,00,000/- p.a. each (Rupees one lakh only) to the Non-Executive Independent Directors for a period of five financial years commencing from FY 2014-15. BOARD EVALUATION Pursuant to the provisions of Section 134(3)(p) of the Companies Act, 2013 the Board Evaluation is not applicable to the Company, as the paid-up share capital does not fulfill the criteria.

20

CORPORATE SOCIAL RESPONSBILITY COMMITTEE During the year the committee met once i.e. on July 07, 2016 and recommended to the Board the Annual Budgeted Expenditure for financial year 2016-17 in accordance with Section 135 and as per Schedule VII of the Companies Act, 2013. The details of attendance of each director at the meeting held during the year are as follows:

S.No. Name & Designation of the members

No. of CSR Committee Meetings held

No. of CSR Committee Meetings attended

1 Dr Ramachandra N Galla, Chairman 1 1 2 Mr M Narasimhappa, Member 1 1 3 Mr. Ajay Kumar Dhagat, Member 1 1

CORPORATE SOCIAL RESPONSIBILITIES

As part of “Corporate Social Responsibility (CSR) initiatives, the Company had undertook in the areas of Education, Environment, Health, water and Sanitation. The CSR initiatives are largely in accordance with Schedule VII of the Companies Act, 2013.

The Company undertakes Corporate Social Responsibility activities through Rajanna Trust. The Corporate Social Responsibility Policy established by the Board is available on the Company’s website: www.amararajapowersystems.com. The Annual Report on CSR activities in annexed herewith as Annexure-IV.

LOAN AND INVESTMENT (L&I) COMMITTEE

During the year the committee met once i.e. on September 02, 2016 and passed the resolution to avail vehicle loan from ICICI Bank Limited. The details of attendance of each director at the meeting held during the year are as follows:

S.No. Name & Designation of the

members No. of L&I Committee Meetings held

No. of L&I Committee Meetings attended

1 Mr M Narasimhappa, Chairman 1 1 2 Dr Ramachandra N Galla, Member 1 1 3 Mr. Jayadev Galla, Member 1 0

WHISTLE BLOWER /VIGIL MECHANISM

The Company has established a whistle blower/vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it and also for appointment of an Ombudsperson who will deal with the complaints received. The policy also lays down the process to be followed for dealing with complaints and in exceptional cases, also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company’s website: www.amararajapowersystems .com

21

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act). An Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All women employees are covered under this Policy. During the year 2016-17, there were no complaints received by the ICC. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans, guarantees or security covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by the Company are given in the notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the financial year 2016-17 were on arm’s length basis and were in the ordinary course of business. During the financial year 2016-17, there were no materially significant transactions with the related parties which might be deemed to have had a potential material conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for transaction with related parties which are of a foreseen and repetitive in nature. The summary statement of transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee on a regular basis. The summary statements are supported by an independent audit report certifying that the transactions are at an arm’s length basis and in the ordinary course of business. As all the transactions with related parties are on Arm’s length basis and there are no material related party transactions as per the policy adopted by the Company, the particulars of contracts or arrangements with related parties under Section 188 in Form AOC-2 is not required and it is not enclosed herewith.

INTERNAL CONTROLS

The Company has in place adequate system of internal controls commensurate with its size and nature of its operations. The Company’s internal control system covers the following aspects:

Financial propriety of business transactions Safeguarding the assets of the Company Compliance with prevalent statues, management authorisation, policies and procedures of the

Company

22

INTERNAL FINANCIAL CONTROLS The Internal Financial Controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Financial Statements. The Management assessed the effectiveness of the Internal Financial Controls over financial reporting as of March 31, 2017, and the Board believes that the controls are adequate.

RISK MANAGEMENT

The Board discusses the significant business risks and the mitigation steps/action plan to mitigate the same, while reviewing the performance of the Company. In the opinion of the Board, there are no major elements of risk which has the potential of threatening the existence of the Company.

The Company is in the process of development and implementation of a risk management policy.

REPORTING OF FRAUDS There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made thereunder. REGULATORY ORDERS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposit) Rules, 2014 during the year under review. There are no outstanding deposits as on March 31, 2017. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed hereto as Annexure V and forms part of this report.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

There are no subsidiaries, associates and joint venture companies. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

23

ACKNOWLEDGEMENT The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by its customers, vendors, business associates, banks, Government authorities and employees. Place : Hyderabad Date : May 25, 2017

On behalf of the Board

Dr. Ramachandra N Galla Chairman

(DIN: 00133761)

24

ANNEXURE-I

Form No. MR-3 SECRETARIAL AUDIT REPORT For the Financial Year 2016-17

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To The Members of M/s. AMARA RAJA POWER SYSTEMS LIMITED

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. AMARA RAJA POWER SYSTEMS LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on my verification of M/s. AMARA RAJA POWER SYSTEMS LIMITED 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, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended 31st March 2017, 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:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by M/s. AMARA RAJA POWER SYSTEMS LIMITED (“the Company”) for the financial year ended on 31st March 2017 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; (NOT APPLICABLE)

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; (NOT APPLICABLE)

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings.

(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; (NOT APPLICABLE)

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (NOT APPLICABLE)

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (NOT APPLICABLE)

25

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (NOT APPLICABLE)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (NOT APPLICABLE)

(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; (NOT APPLICABLE)

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (NOT APPLICABLE)

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (NOT APPLICABLE)

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

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Listing Agreements entered into by the Company. (NOT APPLICABLE)

I further report that the Board of Directors of the Company is constituted with Executive Directors, Non-Executive Directors, Independent Directors and a Women Director. 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, which is sent at least seven days 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.

I 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.

Place: Hyderabad V Suresh Date: 25.05.2017 Practising Company Secretary

FCS No. 2969 C.P.No. 6032

26

ANNEXURE-II

Form No. MGT-9 EXTRACT OF ANNUAL RETURN

as on the financial year ended on March 31, 2017 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the

Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

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 D C Power / Railways 27900 20.64

2 Panels 27104 / 27900 14.50

3 EPC 42202 58.62

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.

Name and Address of the Company

CIN/GLN Holding/ Subsidiary/Associate

% of Shares Held

Applicable Section

Not Applicable

1 CIN U31102AP1984PLC005165

2 Registration Date 06.12.1984

3 Name of the Company Amara Raja Power Systems Limited

4 Address of the Registered office and contact details

Renigunta-Cuddapah Road, Karakambadi, Tirupati -517520

5 Category / Sub-Category of the Company Company having share capital

6 Whether listed company No

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

Not applicable

27

IV. SHAREHOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP PERCENTAGE OF TOTAL EQUITY)

i) Category-wise Shareholding

Category of

Shareholders Shareholding at the beginning of the year Shareholding at the end of the year % Change

during the year Demat Physical Total % of Total

Shares Demat Physical Total % of Total

Shares

A. Promoters

(1) Indian

a. Individual/ HUF - 3164325 3164325 67.78 - - - - -

b. Central Government - - - - - - - - -

c. State Government - - - - - - - - -

d. Bodies Corporate - - - - - - - - -

e. Banks / FI - - - - - - - - -

f. others (Partners of RNGalla Family & Co.)

- - - - 6742388 - 6742388 72.21 -

Sub-total (A) (1): - 3164325 3164325 67.78 6742388 - 6742388 72.21 4.43

(2) Foreign - - - - - - - - -

a) NRIs - Individuals - - - - - - - - -

b) Other - Individuals - - - - - - - - -

c) Bodies Corporate - - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any Other…. - - - - - - - - -

Sub-total (A) (2): - - - - - - - - -

28

Total shareholding of Promoter (A) = (A)(1)+(A)(2)

- 3164325 3164325 67.78 6742388 - 6742388 72.21 4.43

B. Public Shareholding

1. Institutions

a) Mutual Funds -

-

-

- - - -

- -

b) Banks / FI -

-

-

- - - -

- -

c) Central Government -

-

-

- - - -

- -

d) State Government -

-

-

- - - -

- -

e) Venture Capital Funds -

-

-

-

-

- -

- -

f) Insurance Companies -

-

-

-

-

- -

- -

g) FIIs -

-

-

-

-

- -

- -

h) Foreign Venture Capital Funds

-

-

-

-

-

- -

- -

i) Others (specify) -

-

-

-

-

- -

- -

Foreign Portfolio Investor (Corporate) Category I

-

-

-

-

-

- -

- -

Foreign Portfolio Investor (Corporate) Category II

-

-

-

-

-

- -

- -

Sub-total (B)(1): -

-

-

-

-

- -

- -

2. Non-Institutions

a) Bodies Corporate

29

i) Indian -

-

-

-

-

- -

- -

ii) Overseas -

-

-

-

-

- -

- -

b) Individuals -

-

-

-

-

- -

- -

i) Individual shareholders holding nominal share capital upto Rs. 1 lakh

-

4500 4500 0.1 -

4500 4500 0.05 0.05

i) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

-

482950 482950 10.34 -

849666 849666 9.1 1.24

c) Others (specify) -

-

-

-

-

- -

- -

Clearing members -

-

-

-

-

- -

- -

Directors and their relatives

-

-

-

-

-

- -

- -

Foreign nationals -

-

-

-

-

- -

- -

Hindu Undivided Families -

-

-

-

-

- -

- -

Non Resident Indians -

1016767 1016767 21.78 -

1740530 1740530 18.64 3.14

Others - Unclaimed suspense account

-

-

-

-

-

- -

- -

Trusts -

-

-

-

-

- -

- -

Sub-total (B)(2): -

-

-

-

-

- -

- -

Total Public Shareholding (B)=(B)(1)+(B)(2)

-

1504217 1504217 32.22 -

2594696 2594696 27.79 4.43

30

C. Shares held by Custodian for GDRs & ADRs

-

-

-

-

- -

-

- -

Grand Total (A+B+C) - 4668542 4668542 100.00 6742388 2594696 9337084 100.00 -

ii) Shareholding of Promoters

Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change in shareholding during the year

No. of Shares % of total shares of the Company

% of Shares Pledged / encumbered to total shares

No. of Shares

%of total share of the Company

% of Shares Pledged / encumbered to total shares

Dr. Ramachandra N Galla 1232175 26.39 - 1708775 18.30 - 8.09

Mrs. Amara Kumari Galla 256575 5.50 - 513150 5.50 - -

Dr. Ramadevi G 471075 10.09 - 942150 10.09 - -

Dr. G.V.R.K. Prasad 82500 1.77 - 165000 1.77 - -

Mr. Vikramadithya 82500 1.77 - 338219 3.62 - 1.85

Mr. Harshavardhana 82500 1.77 - 338219 3.62 - 1.85

Mr. Jayadev Galla 957000 20.50 - 2060437 22.07 - 1.57

Mr. Ashok Galla - - - 338219 3.62 - 3.62

Mr. Siddharth Galla - - - 338219 3.62 - 3.62

Total 3164325 67.78 - 6742388 72.21 - 4.43

31

iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Shareholders Name At the beginning of the year Cumulative shareholding during the year

No. of shares

% of total Shares of the

Company

No. of shares % of total Shares of the Company

Dr. Ramachandra N Galla

1232175 26.39 1708775* 18.30

Mrs. Amara Kumari Galla 256575 5.50 513150* 5.50

Dr. Ramadevi G 471075 10.09 942150* 10.09

Dr. G.V.R.K. Prasad 82500 1.77 165000* 1.77

Mr. Vikramadithya 82500 1.77 338219* 3.62

Mr. Harshavardhana 82500 1.77 338219* 3.62

Mr. Jayadev Galla 957000 20.50 2060437* 22.07

Mr. Ashok Galla - - 338219* 3.62

Mr. Siddharth Galla - - 338219* 3.62

Total 3164325 67.78 6742388 72.21

Note: *Change in Promoter’s shareholding due to allotment of shares on Rights basis.

As on March 31, 2017 the beneficial interest of above shares is being held by M/s. RNGalla Family & Co. a Partnership firm.

32

v) 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

At the beginning of the year

Cumulative shareholding during the year

No. of shares

% of total Shares of the Company

No. of shares


1. Dr. Upendranath Nimmagadda

At the beginning of the year 337425 7.23 - -

At the end of the year - - 674850 7.23

2. Mrs. Usharani Nimmagadda



3. Devarajulu N. Katta & Aruna N. Katta



4. Dr.Krishnaradha Chunduri



5. Mrs.Chunduri Durgarani



6. Dr.Chunduri Satyananda Sinha



7. G. N. Naidu


33


8. Damodara Naidu Athuluru and Padmini Naidu Athuluru



9. Damodara Naidu Athuluru



10. Dr.Krishna P. Reddy



v) Shareholding of Directors:

Sl No.

For each of the Directors At the beginning of the year

Cumulative shareholding during the year

No. of shares


No. of shares


1 Dr. Ramachandra N Galla 1232175 26.39 1708775 18.30

2 Mr. Jayadev Galla 957000 20.50 2060437 22.07

3 Dr. Ramadevi G 471075 10.09 942150 10.09

4 Dr. Upendranath Nimmagadda 337425 7.23 674850 7.23

5 Mr M Narasimhappa - - - -

6 Mr. Ajay Kumar Dhagat - - - -

34

V. INDEBTEDNESS

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

Amount in Rs.

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 377,704,238 110,000,000 - 487,704,238

ii) Interest due but not paid

- - - -

iii) Interest accrued but not due

- - - -

Total (i+ii+iii) 377,704,238 110,000,000 - 487,704,238

Change in Indebtedness during the financial year

Addition - - - -

Reduction (250,967,061) (110,000,000) - (360,967,061)

Net Change (250,967,061) (110,000,000) - (360,967,061)

Indebtedness at the end of the financial year

i) Principal Amount 126,737,177 - - 126,737,177

ii) Interest due but not paid

- - - -

iii) Interest accrued but not due

- - - -

Total (i+ii+iii) 126,737,177 - - 126,737,177

35

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and / or Manager:

Sl. no.

Particulars of Remuneration Name of MD/WTD/ Manager

Total Amount

Dr.Ramachandra N Galla

1 Gross salary 2,00,000 24,00,000

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

- -

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

- -

(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 - 1,23,87,185

- others, specify - -

5 Others, please specify - -

Total (A) 2,00,000 1,47,87,185

Ceiling as per the Act - Shall not exceed 5% of the net profits of the Company calculated under Section 198 of the Companies Act, 2013

1,49,07,185

36

B. Remuneration to other directors:

Sl. no.

Name of the Director Particulars of Remuneration

Fees for attending board /

committee meetings

Commission Others, please specify

Total Amount

1. Independent Directors

Mr M Narasimhappa 55,000 1,00,000# - 1,55,000

Mr Ajay Kumar Dhagat 65,000 1,00,000# - 1,65,000

Total (1) 1,20,000 2,00,000 - 3,20,000

2. Other Non-Executive Directors

Mr. Jayadev Galla - - - -

Dr. Ramadevi Gourineni - - - -

Mr. Vikramadithya Gourineni, Alternate Director to Dr. Ramadevi Gourineni

- - - -

Dr Upendranath Nimmagadda 35,000 - - 35,000

Total (2) 35,000 - - 35,000

Total (B)= (1+2) 1,550,000 2,00,000 - 3,55,000

Total Managerial Remuneration

Ceiling as per the Act i.e 1% of the net profits calculated under Section 198 of the Companies Act, 2013

29,81,437

# The shareholders at their meeting held on September 15, 2015 approved payment of Rs.1,00,000/- (Rupees One Lakh only) per annum as Commission each to Mr. M. Narasimhappa and Mr. Ajay Kumar Dhagat Non-Executive Independent Directors of the Company for a period of five financial years commencing from financial year 2014-15.

C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD:

Not Applicable VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no penalties, punishment or compounding of offences during the year ended March 31, 2017.

37

Annexure- III

NOMINATION AND REMUNERATION POLICY

1. Preamble This Nomination and Remuneration Policy provides the framework defining the criteria with regard to qualifications, attributes of a person to be appointed as a Director and also on remuneration of members of the Board of Directors, Key Managerial Personnel and other senior management personnel of the Company. This Policy is guided by the principles and objectives as enumerated in Section 178 of the Companies Act, 2013 to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources, a clear relationship of remuneration to performance and a balance between rewarding short and long-term performance of the Company.

This policy reflects the remuneration philosophy and principles of the Amara Raja Group and considers the pay and employment conditions with peers / competitive market to ensure that pay structures are appropriately aligned.

2. Definitions “Senior Management Personnel” means personnel of the Company who are members of the core management team excluding the Board and Directors including functional heads. The words and expressions used and not defined in this policy but defined in the Companies Act shall have the meanings respectively assigned to them in the Act/Rules and Regulations.

3. Policy for appointment and removal of Director, KMP and Senior Management Personnel a. Appointment criteria and qualifications

i. The Nomination and Remuneration Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as a Director, KMP or at Senior Management Personnel position in the Company and recommend to the Board his / her appointment to the respective positions.

ii. A person should possess adequate qualification, expertise and experience for the position he /she is considered for appointment to the concerned position. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

iii. The Nomination and Remuneration Committee shall ensure the Board diversity policy of the Company is adhered to and also ensure an optimum and balanced members of the Board with varied experience to have an effective Board.

38

b. Term / Tenure

The term and tenure of the appointment of Executive Directors and Independent Directors shall be as per the applicable provisions of the Companies Act, 2013. For the KMP and senior management personnel the Company’s HR Policies would be applicable as amended from time to time.

c. Evaluation The Nomination and Remuneration Committee shall carry out evaluation of performance of every Director at regular interval (yearly).

d. Removal Due to reasons for any disqualifications mentioned in the Companies Act, 2013 or any other applicable act, rules and regulation thereunder, the Nomination and Remuneration Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, subject to the Compliance of the said Act, rules and regulations. The removal of the KMP and Senior Management Personnel shall be in accordance with company’s HR policies as amended from time to time.

e. Retirement The KMP and Senior Management Personnel shall retire as per and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

4. Policy relating to the Remuneration of Non-Executive Directors, Managing Director, Key

Managerial Personnel and Senior Managerial Personnel a. Remuneration of Non-Executive Directors

i. Non-Executive Directors (“NEDs”) are entitled to remuneration by way of Sitting Fees and

Commission as per the applicable provisions of the Companies Act, 2013.

ii. The sitting fee payable to the NEDs for attending the Board and Committee meetings is fixed subject to the statutory ceiling.

iii. The NEDs from Galla Family are not entitled for any sitting fees and/or commission.

39

b. Remuneration of Managing Director

i. The compensation paid to the Managing Director is within the scale approved by the Shareholders. The elements of the total compensation are approved by the Nomination and Remuneration Committee within the overall limits specified under the Companies Act, 2013.

ii. The elements of compensation of the Managing Director include salary, perquisites and

commission.

iii. In case of inadequacy of profit in any financial year, the remuneration payable to the Managing Director shall be further subject to the relevant provisions of the Companies Act, 2013.

iv. Executive Directors will not be paid sitting fees for any Board/ Committee meetings attended by them.

c. Remuneration to Key Managerial Personnel except Managing Director and Senior

Management Personnel

i. The Company’s total compensation for Key Managerial Personnel / other employees consists of: fixed compensation variable compensation in the form of Variable Performance Pay benefits work related facilities and perquisites

ii. Fixed compensation is determined on the basis of size and scope of the job typically as reflected

by the level or grade of the job, trends in the market value of the job and the skills, experience and performance of the employee. Fixed compensation broadly includes Basic Salary, Housing Allowance, Leave Travel Allowance and special allowance.

iii. The Annual Variable Performance Pay (VPP) of Senior Management Personnel is linked directly to

the performance of the Business Unit/ Company in accordance with the VPP Scheme of the Company and individual performance.

iv. Based on the grade and seniority of employees, Benefits for employees include:

Health-Related:

a. Health (hospitalization) insurance b. Accident and Life insurance

40

Retirement-Related:

a. Contribution to a Superannuation Fund (in addition to statutory benefits such as Provident Fund account, Gratuity etc)

v. Employees are also eligible for work related facilities and perquisites as may be determined

through HR policies issued from time to time based on the Grade of the employee.

vi. A formal annual performance management process is applicable to all employees, including senior executives. Annual increases in fixed and variable compensation of individual executives are directly linked to the performance ratings of individual employee.

vii. Overall compensation shall be subject to periodic reviews which takes into account data from compensation surveys conducted by specialist firms, as well as factors such as affordability based on the Company’s performance and the economic environment.

viii. Employees may be eligible for severance payments in accordance with the termination clause in their employment agreement subject to applicable regulatory requirements

5. Adoption, Changes and Disclosure of Information

i. This Nomination and Remuneration Policy and any changes thereof are approved by the Board of Directors based on the recommendation(s) of the Nomination and Remuneration Committee.

ii. The policy may be reviewed at such intervals as the Board or Nomination and remuneration

Committee may deem necessary.

iii. Such disclosures of this Remuneration Policy as may be required under the Companies Act, 2013 may be made.

41

ANNEXURE-IV

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. A brief outline of the Company’s CSR policy, including overview of projects or

programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes.

The broad focus areas of the Company are as follows:

a. Education b. Health c. Environment d. Rural Development

The activities under the Education include primary, secondary and higher education, skill development of rural youth, providing scholarships to meritorious students of underprivileged and promoting preventive healthcare activities such as providing safe and healthy drinking water, aiding hospitals etc.

Web link: www.amararajapowersystems.com

2. Composition of the CSR Committee:

Name Category

Dr.Ramachandra N Galla, Chairman Non-Executive Director

Mr.Narasimhappa, Member Non-Executive and Independent Director

Mr.Ajay Kumar Dhagat, Member Non-Executive and Independent Director

3. Prescribed CSR Expenditure (0.2% of the Net Sales): Rs. 61,65,098/-

4. Details of CSR spend for the financial year:

a. Total amount spent for the financial year : Rs. 61,65,098/- b. Amount unspent, if any : NIL c. Manner in which the amount spent during the financial year is detailed below:

42

CSR project or activity identified

Sector

in

which

the

Project

is covered

Projects or programs

(1) Local area or other

(2) Specify the State and district where projects or programs was undertaken

Amount outlay (budget) project or programs wise

Amount spent on the projects or programs

Sub – heads:

(1) Direct expenditure on projects or programs

(2) Overheads

Cumulative expenditure upto to the reporting period

Amount spent : Direct or through

implementing agency*

Providing Utilities like Drinking water, External water supply Sewage landscaping water lines and Play ground facilities in Mangal Vidyalayam and Mangal Junior college educational Complex at Petamitta

Education Chittoor District ,Andhra Pradesh

Rs. 76.52 lacs/-

Rs. 61.65 lacs - Implementing Agency

Rajanna Trust

On behalf of the board Place: Hyderabad Dr.Ramachandra N Galla Date: May 25, 2017 Chairman (DIN: 00133761)

43

ANNEXURE-V

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

(A) CONSERVATION OF ENERGY (i) the steps taken or impact on conservation of energy

Lighting system of ground floor production has been changed from florescent lamps to LED lighting which has reduced the power consumption.

(ii) the steps taken by the company for utilising alternate sources of energy

5KW solar system with on-grid inverter has been installed at ARPSL rooftop for R&D study and for In-house consumption. This system is generating on an average 20 units per day and thereby giving the net saving of Rs.50,249/- for last 12 months with estimated Rs.50,000/- savings per annum.

(iii) the capital investment on energy conservation equipment’s

Not Applicable (B) TECHNOLOGY ABSORPTION

(i) the efforts made towards technology absorption

Not Applicable (ii) the benefits derived like product improvement, cost reduction, product development

or import substitution

Designed, Manufactured and successfully installed & commissioned 33kV/420V, 1.35MVA Medium Voltage Compact substation for evacuating rooftop solar power plant at ABD2. Design, development and commissioning of Remote Terminal Unit (RTU) for 33/11KV substations at Mangal Industries Limited. Implemented firmware coding standards which results portability, consistency, easy maintainability, more efficiency, easy understanding and easy up gradation for future requirements. Implemented MODBUS protocol in i-Swift chargers as an additional feature which helps to integrate with SCADA and thereby enabling the remote operation. ARPSL has received order for providing Substation Automation solution for 132/33KV Grid Substation for JUSNL. This involves providing Remote Terminal Unit (RTU) along with

44

Substation Automation System for about 5 substations which are technically cleared and to be executed

(iii) in case of imported technology (imported during the last three years reckoned from

the beginning of the financial year) - Not Applicable

(iv) expenditure incurred on Research and Development

(Rs. in Lakhs) Particulars 2016-17 2015-16

a) Capital Nil Nil

b) Recurring 59.26 43.95

c) Total 59.26 43.95

d) Total expenditure as a % on Total Turnover 0.19 0.22

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. in Lakhs)

Particulars 2016-17 2015-16

Foreign exchange used 14.47 5.44

Foreign exchange earned 39.17 163.09

Place : Hyderabad Dated : May 25, 2017

On behalf of the Board

Dr. Ramachandra N Galla Chairman (DIN: 00133761)

45

INDEPENDENT AUDITOR’S REPORT

To The Members of M/s. Amara Raja Power Systems Limited

Report on the Financial Statements

We have audited the accompanying financial statements of M/s. Amara Raja Power Systems Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss for the year and the cash flow statement then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these 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 the 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 the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, 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 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 disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, 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 true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors, as well as evaluating the overall presentation of the financial statements.

46

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017; and

b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date. c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that

date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“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” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 purpose 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, Statement of Profit and Loss and Cash Flow Statement dealt with by

this Report are in agreement with the books of accounts. d) in our opinion, the aforesaid financial statements comply with the Accounting Standards

specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) on the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate report in “Annexure B” and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 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 did not have any pending litigations which would impact on its financial position.

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

iii. There were no amounts which were required to be transferred to the Investor

Education and Protection Fund by the Company.

47

iv. The Company had provided requisite disclosures in Note No.34 as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and are in agreement with the books of accounts maintained by the company.

For Sagar and Associates Chartered Accountants FRN: 003510S V. Vidyasagar Babu Partner Membership No. : 027357

Place: Hyderabad Date: May 25, 2017

48

“ANNEXURE – A” TO AUDITORS’ REPORT IN TERMS OF CARO-2016 ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2017 0F AMARA RAJA POWER SYSTEMS LIMITED

i. a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) Fixed assets of the company have been physically verified by the management during the year as per the programme designed by the management, which in our opinion is reasonable having regard to the size of the company and nature of its assets. Discrepancies noticed on physical verification by the management, which are not material, have been properly dealt with in the books of accounts of the company.

c) As per information and explanation provided to audit, the title deeds of the immovable properties are held in the name of the company.

ii. The inventory has been physically verified by the management at reasonable intervals. Discrepancies noticed on physical verification by the management, which are not material, have been properly dealt with in the books of accounts of the company.

iii. The company has not granted any loans secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of clause (iii) (a), (b) and (c) of the Order are not applicable to the company and hence not commented upon.

iv. The company has not provided/made any loans, investments, guarantees and securities under the provisions of Section 185 and 186 of the Companies Act, 2013.

v. The company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

vi. We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

vii. a) According to information and explanation given to us, undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues as applicable have been regularly deposited with the appropriate authorities in all cases. According to information and explanation given to us, there are no undisputed dues outstanding as at 31st March 2017 for a period of more than six months from the date they became payable. b) As per information and explanation given to audit, there are no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any dispute. However, according to information and explanation given to us dues of disputed tax and cess not being paid/partly paid under protest vis-a-vis forum where such disputes are pending is given under:

49

S. No State Tax Year Forum Issue

involved

Amount disputed (Rs.)

Status

Total Tax Paid under

protest Not paid

1

Kerala CST 2006-07 Tribunal

CST levied on value of defective

spares sent to Tiruapti factory for

repair.

4,06,622 3,03,857 1,02,765

Pending before

Tribunal

Kerala CST 2007-08 Tribunal 1,76,620 1,31,850 44,770

Kerala CST 2008-09 Tribunal 1,20,990

94,326

26,664

Kerala CST 2009-10 Tribunal 12,760

11,221

1,539


3,54,870

1,87,292


1,68,768

89,072


1,24,715

65,821

Kerala CST 2009-10 Tribunal 22,220

14,689

7,531

2 AP CST 2012-13 ADC Kurnool

CST levied at higher rate on

interstate sales for

non submission of C forms

etc.

25,55,078

5,62,595

19,92,483

Pending before ADC

3 AP VAT 2012-14 ADC Kurnool

VAT Input credit

denied on Industrial

Gas

4,34,489

54,261

3,80,228

Pending before ADC

4

AP Excise 2006-11 Tribunal

Non -Inclusion of

cost of tranportation amount in

the Assessable

value

64,62,808

30,81,404

33,81,404

Pending before

Tribunal

AP Excise 2011-12 Tribunal 12,92,606

64,630

12,27,976

Pending before

Tribunal

AP Excise 2012-13 Tribunal 8,51,418

42,571

8,08,847

Pending before

Tribunal

AP Excise 2013-14 Comsnr Appeal Guntur

5,30,870

32,315

4,98,555

Pending before

commissioner

AP Excise 2014-15 Comsnr Appeal Guntur

7,78,670

90,838

6,87,832

Pending before

commissioner

5 AP Ser Tax 2007-11 Tribunal Issue

relates to input

82,53,624

41,26,812

41,26,812

pending before

Tribunal

50

AP Ser Tax 2011-12 Tribunal Service Tax

Credit availed on Branches Common Sharing Servies

18,06,498

-

18,06,498

pending before

Tribunal

AP Ser Tax 2012-13 Comsnr Appeal Guntur

20,11,246

-

20,11,246

Pending before

commissioner


10,40,597

70,545

9,70,052

Pending before

commissioner


12,11,170

58,400

11,52,770

Pending before

commissioner

Total 2,89,58,82

4 93,88,66

7 1,95,70,1

57

viii. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks or financial institutions. The company has not taken any loans or borrowing from the Government and has not issued any debenture holders.

ix. As per information and explanation provided to audit, the company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) and term loans. Accordingly, the provisions of clause (ix) of the Order are not applicable to the company and hence not commented upon.

x. According to the information and explanations given to us, based on the examination of books & records of the company and in accordance with the generally accepted auditing practices in India, no fraud by the company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

xii. In our opinion, the company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the CARO, 2016 are not applicable to the company.

xiii. According to the information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

51

xv. According to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. The provisions of clause 3 (xvi) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon

For Sagar & Associates Chartered Accountants FRNo: 003510S (V. Vidyasagar Babu) Partner Membership No: 027357 Place: Hyderabad Date: May 25, 2017.

52

ANNEXURE -B TO THE INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Amara Raja Power Systems Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considered the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors’ Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by ICAI and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

53

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI. For Sagar & Associates Chartered Accountants FRNo: 003510S (V. Vidyasagar Babu) Partner Membership No: 027357 Place: Hyderabad Date: May 25, 2017.

Particulars Note No.EQUITY AND LIABILITIES

Shareholders' funds Share capital 2 93,370,840 46,685,420 Reserves and surplus 3 786,232,007 354,268,044

879,602,847 400,953,465 Non-current liabilities Long-term borrowings 4 2,189,182 1,349,023 Long-term provisions 5 139,391,949 51,615,712

141,581,131 52,964,735 Current liabilities Short-term borrowings 6 123,047,022 485,535,806 Trade payables 7 823,214,028 480,112,806 Other current liabilities 8 158,000,739 202,900,121 Short-term provisions 5 55,092,870 15,173,556

1,159,354,660 1,183,722,290 Total 2,180,538,638 1,637,640,490

ASSETS

Non-current assets Fixed assets 9 Tangible assets 103,976,782 109,546,836 Intangible assets 913,874 1,269,343 Good will -A/c 5,488,071 8,232,101 Capital Work-in-progress 23,164,741 -

133,543,468 119,048,279 Non-current investments 10 456,000 456,000 Deferred tax asset 11 23,015,805 5,785,829

157,015,272 125,290,108 Current assets Inventories 12 189,173,945 164,270,897 Trade receivables 13 1,343,454,229 1,124,193,660 Cash and bank balances 14 121,427,689 49,843,299 Short-term loans and advances 15 343,056,197 152,015,512 Other current assets 16 26,411,310 22,027,016

2,023,523,366 1,512,350,382 Total 2,180,538,638 1,637,640,490

For Sagar and AssociatesChartered AccountantsFirm Registration No.003510S Jayadev Galla

Chairman Vice Chairman

V.Vidyasagar BabuPartner(Membership No.027357) Vikramadithya Gourineni

Managing Director

D.Chiranjeevi RajuCompany Secretary

Place : HyderabadDate : May 25 , 2017

54


For and on behalf of the Board

The accompanying notes are an integral part of the financial statements

As per our report of even date attached

Chandramouleeswaran.SDGM - Finance & Accounts


BALANCE SHEET AS AT MARCH 31, 2017Amount in Rs.

As at March 31,2016As at March 31,2017

Amount in Rs.Year ended Year ended

March 31,2017 March 31,2016REVENUE

Revenue from operations 3,215,662,264 2,161,518,400 Less : Excise duty 131,970,372 121,492,452

Net revenue from operations 17 3,083,691,892 2,040,025,948 Other income 18 8,410,682 6,142,569

TOTAL REVENUE 3,092,102,574 2,046,168,517

EXPENSES

Cost of materials consumed 19 2,282,809,169 1,532,219,185 Changes in inventories of finished goods, work-in-process 20 579,854 (11,954,765) Employee benefits expense 21 235,398,265 187,197,502 Finance costs 22 41,409,080 42,805,549 Depreciation and amortisation expense 23 13,209,317 13,176,061 Other expenses 24 220,553,180 147,809,410

TOTAL EXPENSES 2,793,958,865 1,911,252,942

Profit before tax 298,143,709 134,915,575 Less : Tax expense

i) Current taxProvision for Tax 116,836,823 40,203,274 Less : MAT Credit entitlementNet Current Tax 116,836,823 40,203,274

ii (DTA )/DTL (17,229,971) 3,631,306 iii) Earlier year's excess (Short) provision - -

Profit for the year 198,536,857 91,080,994 Basic EPS 32 34.02 19.51



V.Vidya Sagar BabuPartner(Membership No.027357) Vikramadithya Gourineni Managing Director

D.Chiranjeevi Raju Company Secretary


55



The accompanying Notes are an integral part of the financial statements

Dr.Ramachandra N Galla


STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2017

Particulars Note No.

Chandramouleeswaran.S DGM - Finance & Accounts

ParticularsI. CASH FLOW FROM OPERATING ACTIVITIESProfit before tax from continuing operations 298,143,709 134,915,575 Add/Less: Adjustments for:a. Depreciation 13,209,317 13,176,061 b. Loss on sales of tangible fixed assets 446,580 - c. Interest (Including interest on Trade payables) 40,644,972 54,397,166 d. Bad debts written off 8,713,000 - e. Provision for doubtful debts 34,262,876 - f. Exchange (gain)/loss on restatement 3,125,814 (493,456) g. Provision for leave encashment 8,411,417 1,573,928 h. Provision for gratuity 1,447,311 (323,819) j. Provision for warranty 1,000,000 2,041,434 k. Dividend received (22,800) (91,200) l. Interest received (6,092,392) (4,250,888) m. Insurance laim received (858,392) n. Provision for doubt ful debts written Back (556,392) (8,825) o. Provision for loss on projects 4,658,699 1,293,895 p. Credit Balances written back (1,721,947) (933,264) q. Fixed Assets writte off 1,257,581 1,472,576

108,784,036 66,995,216 Operating profit before working capital changes 406,927,745 201,910,791 Add/Less: Adjustments for working capital changesa. Decrease/(increase) in inventories (24,903,048) (32,178,777) b. Decrease/(increase) in trade receivables (261,680,053) (73,545,416) c. Decrease/(increase) in loans and advances (212,654,956) (75,080,365) d. Increase/(decrease) in trade and other payables 408,976,097 (50,007,977)

(90,261,960) (230,812,534) Cash generated from operations 316,665,786 (28,901,743) Less : 1. Income tax paid 99,606,852 40,203,274.43

- Net cash from operating activities - A 217,058,933 (69,105,017)

II. CASH FLOW FROM INVESTING ACTIVITIESa. Purchase of tangible fixed assets (6,722,449) (2,608,968) b. (Increase)/decrease in capital work in progress (23,164,741) - c. Sales of tangible fixed assets 478,532 - d. Investment in Partnerhip firm - - d. Interest received on bank and other deposits 6,092,392 4,250,888 e. Dividend received 22,800 91,200 Net Cash from investing activities - B (23,293,467) 1,733,121

III. CASH FLOW FROM FINANCING ACTIVITIESa. Increase/(decrease) in borrowings (361,648,625) 120,032,311 b. Interest paid (40,644,972) (54,397,166) c. Increase in Share capital 280,112,520 Net cash from financing activities - C (122,181,077) 65,635,145 Net cash flow from all activities (A+B+C) 71,584,390 (1,736,752)

Opening cash and bank balances 49,843,299 51,580,051 Add: Net increase/(decrease) in cash & cash equivalents 71,584,390 (1,736,752) Closing cash and bank balances 121,427,689 49,843,299



Vice Chairman

V.Vidya Sagar BabuPartner Vikramadithya Gourineni Chandramouleeswaran.S(Membership No.027357) Managing Director

D.Chiranjeevi RajuCompany Secretary

Place : HyderabadDate : May 25 , 2017 56

M/s Amara Raja Power Systems LimitedCash Flow Statement for the year ended March 31, 2017

Amount in RsYear ended 31.03.2017 Year ended 31.03.2016


Dr. Ramachandra N GallaChairman

DGM -Finance & Accounts

57

AMARA RAJA POWER SYSTEMS LIMITED NOTES FORMING PART OF THE FINANCIAL STATEMENTS Note 1: Significant Accounting Policies A. Basis of Preparation of Financial Statements The financial statements are prepared under historical cost convention on accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles in India. The financial statements are prepared to comply in all material respects with the Accounting Standards notified under Section 133 of the Companies Act, 2013, to the extent applicable, other pronouncements of the Institute of Chartered Accountants of India and the provisions of Companies Act, 2013. B. Use of Estimates The preparation of financial statements requires the management of the Company to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures relating to the contingent liabilities and commitments. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. The judgments, estimates and underlying assumptions are made with the management’s best knowledge of the business environment and are reviewed on an ongoing basis. However results could vary from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods. C. Fixed Assets Fixed assets are stated at cost of acquisition less accumulated depreciation. The cost of acquisition of fixed assets is inclusive of freight, duties and taxes, interest, if any, on specific borrowings utilised for financing the assets upto the date of commissioning, the cost of installation/erection and other incidental expenses but exclusive of duties and taxes subsequently recoverable from taxing authorities. D. Depreciation and Amortisation Depreciation is charged in line with the useful life of the asset as prescribed in Schedule II of the Companies Act 2013. In the event of useful life estimated to be lower than that prescribed in Schedule II, depreciation will be charged based on the lower useful life estimated. E. Impairment of Assets The carrying amounts of assets are reviewed by the Company at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amount of the Company’s assets. If any indication exists, an asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of the asset exceeds the recoverable amount. Where it is not possible to estimate the recoverable amount of individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. As per the assessment conducted by the Company at March 31, 2014, there were no indications that the fixed assets have suffered an impairment loss. F. Borrowing Costs Borrowing costs, that are directly attributable to the acquisition or construction of assets, that necessarily take a substantial period of time to get ready for its intended use, are capitalised as part of the cost of qualifying asset when it is possible that they will result in future economic benefits and the cost can be

58

measured reliably. Other borrowing costs are recognised as an expense in the period in which they are incurred. G. Investments Long-term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in nature. H. Inventories (i) Inventories are valued at the lower of cost and net realisable value. (ii) In respect of raw materials, bought-out items, consumables and stores and spares, cost is ascertained on a weighted average basis. Cost also includes all taxes and duties, but excludes duties and taxes that are subsequently recoverable from taxing authorities. (iii) In respect of work-in-process and finished goods, cost includes all direct costs and applicable production overheads incurred in bringing such inventories to their present location and condition. In respect of finished goods, cost includes excise duty also. (iv) Scrap is valued at an estimated net realisable value. (v)Provision for obsolescence is made wherever necessary. I. Revenue recognition (i) Revenue from sale is recognised when risks and rewards of ownership are transferred to the buyer under the terms of the contract. Revenue in respect of products is recognised on dispatch of goods to the customer or when they are unconditionally appropriated to the contract. (ii) Sales include excise duty, insurance, octroi and service charges recovered and are stated net of sales returns. (iii) Revenue from services rendered is booked based on agreements/arrangements with the concerned parties. Generally all services are recognised on completed contract basis unless the agreement otherwise provides. (iv) Revenue from Contracts : Contract revenue associated with projects is recognised as revenue by reference to the stage of completion of the project at the balance sheet date. The stage of completion of project is determined by the proportion that the contract cost incurred for work performed up to the balance sheet date bear to the estimated total contract costs as assessed by project managers and the management. Materials purchased specifically for the projects and identified to the project are considered as part of the contract costs in accordance with the AS 7 “Construction Contracts”. If it is expected that a contract will make a loss, the estimated loss is provided in the books of accounts. (v) Interest on investments is booked on a time proportion basis taking into account the amounts invested and the rate of interest. (vi) Dividend income is accounted for in the year in which the right to receive the payment is established. J. Employee benefits I) Defined Contribution Plans a) Company’s contribution to Employees Provident Fund and Employees State Insurance are made under a Defined Contribution Plan and are accounted for at actual cost in the year of accrual. Provident Fund contributions are made to the Government administered Provident Fund towards which the Company has no further obligations beyond its monthly contributions. b) Company’s contribution to the Superannuation fund in respect of employees who are members are made under a defined contribution plan, being administrated by the Life Insurance Corporation of India

59

and are recognised in the statement of profit and loss at predetermined rates in the year in which employee has rendered service. The Company has no further obligations beyond its monthly contributions. II) Defined Benefit Plans a) Company’s liability to Gratuity on retirement of its eligible employees is funded and is being administrated by the Life Insurance Corporation of India. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognised and recognised in the statement of profit and loss in the year in which the employee has rendered service. b) Expenses on account of unutilised leave is unfunded and is arrived at as per actuarial valuation and is recognised and recognised in the statement of profit and loss in the year in which employee has rendered services in lieu of such leave. c) Gains/Losses arrived at in the above actuarial valuations are recognised in the statement of profit and loss, in the year in which they arise. K. Research and Development Expenses Capital expenditure on Research and Development is classified under tangible/intangible Assets and depreciated in accordance with the Company policy mentioned above.Research costs are charged to revenue as and when incurred. Development expenditure incurred on an individual project is recognised as an intangible asset when the capitalisation criterion is met. Other development costs are recognised in the statement of profit and loss as and when incurred. Development expenditure as capitalised above is amortised over the estimated period of useful life or economic benefits not exceeding ten years. L. Foreign Currency Transactions a) The reporting currency of the Company is Indian Rupees b) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of transaction, and charged to revenue with the difference in the rate of exchange arising on actual receipt/payment during the year. c) At each Balance Sheet date: Foreign currency monetary items are reported using the rate of exchange on that date. Foreign currency non-monetary items are reported using the exchange rate at which they were initially recognised. M. Product Warranties The Company provides for the estimated liability for product warranties when products are sold. These estimates are established using historical information on the nature, frequency of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary based on the actual warranty claims. N. Taxation Income tax expense comprises current and deferred taxes. Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised under the liability method, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

60

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realise such losses. Deferred tax assets and liabilities are measured based on the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date. O. Provisions, Contingent Liabilities and Contingent Assets Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised. P. Leases The Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss as per the applicable lease terms. Q. Segment Reporting The Company is engaged in the manufacture of Industrial chargers and also into the business of transmission and distribution projects. These, in the context of Accounting Standard 17 on Segment Reporting, as specified in the Companies (Accounting Standards) Rules, 2006, are considered to constitute two primary segments. Further, there is no reportable secondary segment i.e. Geographical Segment.

As at As at31.3.2017 31.3.2016

Equity share capitalAuthorised10,000,000 Equity shares of Rs.10/ each 100,000,000 50,000,000 Issued capital93,37,084 Equity Shares of Rs.10/-Each 93,370,840 46,685,420 Subscribed and paid up capital93,37,084 Equity Shares of Rs.10/-Each 93,370,840 46,685,420 Total 93,370,840 46,685,420

No. of Shares Amount No. of Shares Amount

4,668,542 46,685,420 4,668,542 46,685,420 4,668,542 46,685,420 - -

- - - - 9,337,084 93,370,840 4,668,542 46,685,420

No. of shares held % holding No. of shares held % holding1,708,775 * 18.30 1,232,175 26.39

Mr. Jayadev Galla 2,060,437 * 22.07 957,000 20.50 Dr. G Ramadevi 942,150 * 10.09 471,075 10.09 Mrs. Amara Kumari Galla 513,150 * 5.50 256,575 5.50

674,850 7.23 337,425 7.23 509,850 5.46 254,925 5.46

* The beneficial interest of above shares is being held by M/s. RNGalla Family & Co. a Partnership firm. 61

NOTES FORMING PART OF THE FINANCIAL STATEMENTSAMARA RAJA POWER SYSTEMS LIMITED


Note 2 : Share Capital (Amount in Rs.)

Particulars

Equity share capitalShares outstanding at the beginning of the year Shares issued during the year

Particulars

b) Rights, preferences and restrictions attached to equity shares

Name of shareholder

a) Reconciliation of number of shares outstanding at the beginning and end of the year

Shares outstanding at the end of the year

(Amount in Rs.)31.3.2017

c) Shareholders holding more than 5% of shares in the Company

31.3.2016

The Company has one class of equity shares having a face value of Rs.10/- each. Each holder of equity share is eligible for one vote per share held. Any dividend proposed by the Board of Directors is subject to approval of theshareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the holders of equity share will be entitled to receive the remaining assets of the Company after distribution of allpreferential amounts, in proportion to their shareholding.

Shares bought back during the year

As at 31.3.2016As at 31.3.2017

Dr. Upendranath NimmagaddaMrs. Usharani Nimmagadda

Note 3 : Reserves and Surplus ( Amount in Rs.)

292,141,940 58,714,840

23,695,266 23,695,266

23,695,266 23,695,266

271,857,938 180,776,943 198,536,857 91,080,995 470,394,795 271,857,938

- - 470,394,795 - 271,857,938

Total 786,232,001 354,268,044

As at 31.3.2017 As at 31.3.2016 As at 31.3.2017 As at 31.3.2016

From Others : Car loan from Kotak Mahindra Prime Limited 420,567 1,349,023 908,541 819,409 From Others : Car loan from ICICI Bank Ltd 1,768,615 592,432

Total 2,189,182 1,349,023 1,500,973 819,409

(Amount in Rs.)One loan

amounting to Rs.22,85,000

One loan amounting to Rs.8,68,000




10.20% 9.96% 9.98% 9.50% 9.75%60 60 60 48 48

48853 18,440 17,585 42,590 23,53018 Months 20 Months 20 Months 42 Months 43 Months

As at As at As at As at31.3.2017 31.3.2016 31.3.2017 31.3.2016

13,983,969 11,646,884 546,701 126,184 14,513,576 13,623,802 546,701 126,184

(529,607) (1,976,918) - - 18,057,901 9,669,322 1,220,779 1,197,941

116,836,823 40,203,274 52,872,091 12,668,816 5,026,831 3,720,033 1,000,000 1,306,798

139,391,948 51,615,711 55,092,870 15,173,555

62

As per last Balance sheet

Securities premium accountGeneral reserve

a) Income tax

Surplus in the Statement of Profit and LossAs per last Balance Sheet

b)Terms loansThe term loans from Kotak Mahindra Prime Limited and ICICI Bank are secured by hypothecation of Cars purchased under the loan.The terms of repayment are as follows.

As at 31.3.2017

Particulars

Employee benefitsa) Gratuity

2) Number of installments3) Amount of each installment4) Period of maturity from the balance sheet date

Totalb) Product warranty

Less: Fund with Life Insurance Corporation of India

Particulars

Others

Short-term

Note 5 : Provisions

Long-term( Amount in Rs)

As at 31.3.2016Particulars

Particulars

Add: Profit for the yearAmount available for appropriation

Add: Transfer from surplus in the statement of profit and loss A/c

Less: Appropriations

b) Leave encashment (Unfunded)

Transfer to general reserve

Current maturities( Amount in Rs.)

Non-current portion

Note 4 : Long-Term Borrowings

a)Term Loan : Secured

1) Interest rate

( Amount in Rs)Year ended 31.03.2017

Year ended 31.3.2016

3,899,163 3,278,097 1,149,102 903,398 4,094,175 3,390,711

(Amount in Rs)

Gratuity Earned Leave Gratuity Earned Leave11,773,068 10,867,264 11,318,539 9,293,336

930,969 1,472,263 817,140 1,472,263 941,846 803,556 971,045 719,257

(379,973) (191,483) (1,497,480) (605,246) 1,264,760 6,327,081 163,824 (12,346)

14,530,670 19,278,681 11,773,068 10,867,264

(Amount in Rs)

Gratuity Earned Leave Gratuity Earned Leave930,969 1,472,263 882,702 1,472,263 941,846 719,257 905,483 719,257

(1,136,767) - (1,126,605) - 1,264,760 (12,346) 163,824 (12,346)

2,000,808 2,179,174 825,404 2,179,174

(Amount in Rs)

Gratuity Earned Leave Gratuity Earned Leave13,756,782 - 14,001,472 -

546,701 - 126,184 - 1,136,767 - 1,126,606 - (379,973) (191,483) (1,497,480) (605,246)

Fund transferred (Net) - - 15,060,277 - 13,678,440 -

(787,269) 19,278,681 (1,976,918) 10,867,264 (787,269) 19,278,681 (1,976,918) 10,867,264

2016 - 17 2015 - 16100% 100%

63

Employee benefits (Disclosure required by AS-15)

2. Defined Benefits Plans

Particulars

Particulars

Interest cost

a) Reconciliation for changes in present value of defined benefits obligationsYear ended 31.03.2017

Actual return

Current service cost

Actual return on plan assetsBenefits paid

Net expenses recognised in the statement of profit and lossNet actuarial gain

Particulars

Particulars

c) Reconciliation for change in fair value of plan assets

Year ended 31.03.2017 Year ended 31.03.2016

Net liability recognised in the balance sheetPresent value of unfunded obligations

d) The major categories of plan assets as a percentage of total plan (Gratuity only)

b) Expenses recognised in the statement of profit and loss account

Present value of obligations at beginning of the year

Contributions

ParticularsQualifying Insurance Policy

Present value of obligations at end of the year

Fair value of plan assets at year beginning

Fair value of plan assets at year end

Net actuarial gain

1. Defined Contribution Plans

Employer's contribution to Employees State Insurance

During the year as per AS 15 the Company has recognised the following contribution amounts in the statement of profit and loss

Current service cost


Employer's contribution to Provident Fund

Interest costBenefits paid


Employer's contribution to Superannuation fund


Gratuity Earned Leave Gratuity Earned Leave8.00% 8.00% 8.00% 8.00%9.00% NA 9.00% NA8.00% 9.00% 8.00% 9.00%7.00% 10.00% 7.00% 7.00%

IALM(2006-08)Ult IALM(2006-08)Ult

1) Gratuity (Funded) (Amount in Rs)2016-17 2015-16 2014-15 2013-14 2012-13

14,530,670 11,635,244 11,289,097 10,437,006 9,512,082 15,060,277 13,678,440 13,990,737 12,461,222 10,963,434

(529,607) (2,043,196) (2,701,640) (2,024,216) (1,451,352)

2) Encashment of earned leave - (Un funded) (Amount in Rs)2016-17 2015-16 2014-15 2013-14 2012-13

19,278,681 10,867,264 9,293,336 8,069,851 8,826,503 19,278,681 10,867,264 9,293,336 8,069,851 8,826,503 6,327,081 (12,346) (1,597,684) (2,826,031) (854,941)

3) Details of provision for warranty expense (Amount in Rs.)Year ended Year ended31.03.2017 31.03.2016

5,028,239 2,986,805 1,000,000 2,041,434

- - 6,028,239 5,028,239

As at As at31.03.2017 31.03.2016

Cash Credit16,908,621 60,938,476 46,568,200 314,597,330 59,570,201 -

Kotak Mahindra Investments Ltd - 50,000,000 Loans and advances from related parties (Unsecured)

Dr.Ramachandra N Galla - 60,000,000

123,047,022 485,535,806

64

Provision made for the year

1) Present value of defined benefit obligation2) Fair value of plan assets

(Amount in Rs)

3) Deficit/(Surplus) in the plan

Particulars

1) Present value of defined benefit obligation


b) Return on plan asset

(ii) From Others -Unsecured

(i) From banks (Secured)

e) Mortality

Particulars

2) Deficit in the plan3) Experience adjustment on plan liabilities (expressed as amounts)

Loans repayable on demand

Withdrawn/reversed during the yearProvision at the end of the year

State Bank of India

Particulars

Grand Total

e) Actuarial AssumptionsYear ended 31.03.2016

Particulars

Note 6 : Short-term borrowings

Kotak Mahindra Bank Ltd

c) Employee turnover rate

a) Discount rate

Provision at the beginning of the year

Andhra Bank

d) Salary escalation rate

f) Amounts for the current and previous four years are as follows

Particulars

a) Andhra Bank :

As at As at31.03.2017 31.03.2016

i) Dues to Micro, Small and Medium Enterprises 125,139 1,296,842 ii) Others 823,088,889 478,815,964

823,214,028 480,112,806

Year ended 31.03.2017 Year ended 31.03.2016Amount Amount

125,139 1,296,842 837 38,507

II. Amount of interest along with the principal payment made beyond the appointed date during the year - -- --- -- -

Amount in Rs.As at 31.03.2017 As at 31.03.2016

Amount Amount

a) Advances from customers 10,038,373 6,223,037 b) Employee related & other payables 35,967,050 30,975,742 c) Outstanding liabilities 99,850,777 152,231,603 d) Excise Duty/Service tax payable 664,029 1,571,658 e) Other non-trade Payable 1,797,359 2,030,909 f) Sales tax payable 2,358,163 6,984,786 g) TDS/TCS payable 5,824,014 2,062,976

156,499,765 202,080,711

Secured 1,500,973 819,409 Unsecured - - Total 158,000,738 202,900,120

65

Particulars

I. Amounts due as at the date of balance sheet.

c) Kotak Mahindra Bank Ltd :

Particulars

IV. The amount of interest accrued and remaining unpaid as at the date of balance sheet

a) Note forming part of accounts in relation to Micro, Small and Medium Enterprises

Total

III. Amount of interest due and payable for the period of delay in making payments of principal during the year beyond the appointed date

a) Principal amount

a) Trade payables

Based on, and to the extent of information received from the suppliers with regard to their status under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), on which the auditors have relied, the disclosure requirements of Schedule VI to the Companies Act, 1956 with regard to the payments made/due to Micro, Small and Medium Enterprises are given below:

( Amount in Rs.)Note 7 : Trade payables (unsecured)

Primary security : For all fund & non fund based facilities are secured by hypothecation of stocks and receivables and all chargeable current assets of company - secured by way of first charge on fixed assets of the Company and guaranteed by Dr.Ramachandra N.Galla and Mr.Jayadev Galla.

b) State Bank of India :

Working capital facilities are secured by hypothecation of all current assets of the Company both present and future and include Pari passu charge on Fixed assets and Personal guarantee of R.N.Galla

( Amount in Rs.)

Working capital facilities are secured by hypothecation of all current assets of the Company both present and future – First charge on current assets of the company on pari-passu basis . Non fund based limits pertaining to LCs are secured by way of stocks received under LCs and Bank Guarantees are secured by charge on entire current assets of the Company and Counter Guarantee of the Company

1.Cash Credits:- Secured Loans

Collateral Security : Entire fiaxed assests of the company ( land & building ,plant & machinery )

Other payables

Add: Current maturities of long term borrowings (Ref Note 4) Sub Total

V. The amount of further interest remaining due and payable in succeeding year

Note 8 : Other Current liabilities (unsecured)

b) Interest thereon

Particulars

Note 9

AS AT MARCH 31, 2016

ADDITIONS DUERING THE

YEAR

DELETIONS DUERING THE

YEAR

AS AT MAR, 2017

AS AT MARCH 31,

2016

FOR THE YEAR

ON DELETIONS

AS AT MAR, 2017

AS AT MAR, 2017

AS AT MARCH 31, 2016

1 LAND & LAND DEVELOPMENT 127,621 - - 127,621 - - - - 127,621 127,621

2 BUILDINGS 93,900,852 - - 93,900,852 19,158,079 3,251,385 - 22,409,464 71,491,387 74,742,772

3 R&D BUILDINGS 255,910 - - 255,910 135,947 7,712 - 143,659 112,251 119,963

4 PLANT & MACHINERY 27,299,225 647,904 3,417,723 24,529,406 13,675,456 1,800,590 2,423,146 13,052,900 11,476,506 13,623,769

5 R&D PLANT & MACHINERY 1,903,996 - 640,046 1,263,950 1,081,588 87,590 604,094 565,084 698,866 822,408

6 ELECTRICAL INSTALLATIONS 11,950,257 - 1,066,518 10,883,739 4,490,716 1,411,337 928,145 4,973,908 5,909,831 7,459,541

7 FURNITURE & FIXTURES 7,823,921 - 217,255 7,606,666 4,046,093 949,467 167,392 4,828,169 2,778,497 3,777,828

8 VEHICLES 11,011,352 3,198,418 3,010,840 11,198,930 4,313,887 1,293,490 2,050,988 3,556,389 7,642,541 6,697,465

9 IT EQUIPMENT 2,966,654 2,426,405 71,560 5,321,499 1,114,299 1,108,632 67,982 2,154,949 3,166,550 1,852,354

10 OFFICE EQUIPMENT 898,850 356,476 9,800 1,245,527 575,736 106,370 9,310 672,795 572,731 323,115

11 INTANGIBLE ASSETS 3,549,262 93,246 - 3,642,508 2,279,919 448,715 - 2,728,634 913,874 1,269,343

TOTAL 161,687,899 6,722,449 8,433,742 159,976,606 50,871,721 10,465,287 6,251,058 55,085,950 104,890,656 110,816,178 PREVIOUS YEAR 188,530,456 2,608,968 29,451,525 161,687,899 68,418,641 10,432,028 27,978,949 50,871,721 110,816,178 120,111,815

66


FIXED ASSETS & DEPRECIATION - FINANCIAL YEAR - 2016-17 (AMOUNT IN RUPEES)

S.NO PARTICULARS

GROSS BLOCK DEPRECIATION BLOCK NET BLOCK

Amount in Rs.As at 31.03.2017 As at 31.03.2016

Amount Amount

A. Investment in equity instruments (Quoted) - (Non - Trade) 45,600 Fully paid up equity shares of Rs.10/- each in Andhra Bank 456,000 456,000

Total of Non-Current Investments 456,000 456,000

B. Aggregate amount of i) quoted investments 456,000 456,000 C. Market value of quoted investments as on march 31st,2017 is Rs.57.95 /- 2,642,520 2,384,880

As at As atMarch 31,2017 March 31,2016

(5,785,834) (9,417,140) (17,229,971) 3,631,306

(23,015,805) (5,785,834)

Assets Liabilities Assets Liabilities- 1,116,404 - 8,862,604

Gratuity - 183,286 684,172 6,671,966 - 3,760,942 -

Provision for doubtful debtors 11,857,696 - - - 18,529,662 1,299,691 3,760,942 9,546,776

Amount in Rs. Amount in Rs. Amount in Rs. Amount in Rs.84,230,143 69,574,227 53,643,612 28,160,710

137,873,755 97,734,937 45,286,904 52,261,838 5,976,259 14,144,920

37,027 129,202

189,173,945 164,270,897

67

Total

Particulars

Note 12 : Inventories (valued at lower of cost or net realisable value)

Total Raw materialsWork-in-process

As at 31.03.2016

As at March 31,2016

a) Major components of deferred tax assets and liabilities as at the end of the year arising on timing differences(Amount in Rs)

Amounts disallowed under Section 43B(Net) of the Income Tax Act

Particulars

As at March 31,2017

Add/(Less): Liability / (Asset) Expenses for the year

(Amount in Rs)Note 11 : Deferred Tax (Asset) /laibility net

Note 10 : Non Current Investments

Particulars

As per previous year balance sheet

Deferred tax (asset)/liablity net

Depreciation

Finished goods

Total

As at 31.03.2017Particulars

Raw materials

Stores & Spares/Loose Tools

Add: Raw materials in transit

Amount in Rs. Amount in Rs. Amount in Rs. Amount in Rs.

280,677,722 287,277,261 59,212,957 24,950,081

339,890,679 312,227,342 59,212,957 280,677,722 24,950,081 287,277,261

111,558,139 59,900,928

951,218,369 777,015,471 1,343,454,229 1,124,193,660

Year ended Year ended31.03.2017 31.03.2016

24,950,081 26,625,884 34,262,876 24,950,081

- 26,625,884 59,212,957 24,950,081


49,693,217 7,254,061 809,607 50,502,824 355,602 7,609,663

70,924,865 42,233,636 121,427,689 49,843,299

24,149,417 27,311,945

98,120,257 26,490,480 36,135,166 25,885,118 10,364,231 9,388,668

174,287,126 318,906,780 62,939,301 124,703,567 343,056,197 152,015,512

As at As at31.03.2017 31.03.2016

11,819,558 8,478,048 14,591,752 13,548,968

26,411,310 22,027,016

68

Refundable depositsOther loans and advances

Short-term

c) Excise duty and VAT paid under protest

in current accounts

(Amount in Rs)Short-term

As at 31.03.2017

Total

b) Excise duty, service tax and VAT paid in advance

d) Income tax paid in advance and TDS receivables

Note 16 : Other assets (unsecured and considered good)

Interest accruedPrepaid expenses

Particulars

Total

Deposits placed as margin money for the working capital limits

Particulars

Total

a) Material and other advances

(Amount in Rs)

As at 31.03.2016

Note 15 : Loans and advances (unsecured and considered good)

Particulars

(Amount in Rs.)

Provision at the beginning of the year

Particulars As at 31.03.2016(Amount in Rs)

As at 31.03.2016

Provision at the end of the year

i) Considered goodii) Considered doubtful

As at 31.03.2017

i) Considered good

Note 14 : Cash and bank balances

b) Other Bank Balancesii) Cash on hand

As at 31.03.2017

Written off during the year

b) Debts due from companies in which Director(s) and their relatives are interested

Provision made for the year

Less : Provision for bad debts

a) Trade receivables outstanding for a period exceeding 6 months

Particulars

c) Other debts

a) Cash and cash equivalentsi) Balances with banks

Total

Movement of provision for doubtful debts

Note 13 : Trade receivables (unsecured)


1,255,375,046 1,177,070,906 1,812,445,954 870,065,112

147,841,264 114,382,382 3,215,662,264 2,161,518,400

Less: Excise duty 131,970,372 121,492,452 3,083,691,892 2,040,025,948


6,092,392 4,250,888 22,800 91,200

2,278,339 942,089 17,151 858,392

8,410,682 6,142,569

Amount in Rs. Amount in Rs. Amount in Rs. Amount in Rs.46,620,734 66,609,640

819,138,092 751,113,370 865,758,827 817,723,010 48,535,490 46,620,734

817,223,337 771,102,276


141,750,165 202,756,506 Copper 16,392,887 36,553,142 PCB's 16,639,812 80,556,796

642,440,473 451,235,832 817,223,337 771,102,276

Amount in Rs. Amount in Rs. Amount in Rs. Amount in Rs.23,082,695 17,294,604

1,478,234,817 766,905,000 1,501,317,512 784,199,604

35,731,680 23,082,695 1,465,585,832 761,116,909


1,465,585,832 761,116,909 1,465,585,832 761,116,909

69

ProjectsTotal

Particulars

Batteries

OthersTotal

(ii)Projects(Amount in Rs.)

Particulars Year ended 31.03.2017 Year ended 31.03.2016

Opening stock

Sub-totalLess: Closing stockTotal

Particulars

a) Sale of Products

Miscelleneous incomes

Note 18 : Other income

Interest income

(Amount in Rs.)

Add: Purchases

Less: Closing stock

Particulars Year ended 31.03.2017 Year ended 31.03.2016

Opening stockAdd: PurchasesSub-total

Gross revenue from operations

Dividend income from non-trade investment

(i)Products

Total

Particulars

Total

c) Revenue from Services

(Amount in Rs)Note 17 : Revenue from operations

Note 19 : Cost of materials consumed

TotalInsurance claims

b) Execution of Projects

Particulars

(Amount in Rs.)


52,261,838 24,951,322 14,144,920 15,299,856

Inventory 69,703,429 136,110,187 83,904,244 124,155,422

45,286,904 52,261,838 5,976,259 14,144,920

Inventory 84,267,170 135,530,333 69,703,429 136,110,187 Increase/(Decrease) in inventories 579,854 (11,954,765)

- - 579,854 (11,954,765)


Panels 9,730,181 7,425,777 4,414,739 7,874,079

Total of opening stock 14,144,920 15,299,856

Panels 2,911,811 9,730,181 3,064,448 4,414,739

Total of closing stock 5,976,259 14,144,920

Note 21 : Employee benefits expense (Amount in Rs.)Year ended Year ended31.03.2017 31.03.2016

210,975,783 167,792,499 10,864,390 8,452,134 13,558,092 12,496,723

235,398,265 188,741,356


306,364 326,045 33,467,549 40,692,604

33,773,913 41,018,649

Others 7,635,167 7,635,167 1,786,900 1,786,900 41,409,080 42,805,549


10,016,573 9,957,095 448,715 474,933

Amortization of Goodwill ( Revenue from MEC acquisition /goodwill started in 2015 -16 and decided to written off in 4 years) 2,744,030 2,744,033 13,209,317 13,176,061

70

Battery chargers

Note 20 : Changes in inventories in work-in-process, finished goods and stock-in-trade

Particulars



Finished goods

Opening stocks

Year ended 31.03.2017Particulars

Net Increase in inventories

Demand loans

Interest expenses

Finished goods

(Amount in Rs.)

( Amount in Rs.)

Battery chargers

Particulars Year ended 31.03.2016

Particulars

Less: Closing stocks

Opening stock

Work-in-process

Total

Work-in-process

Note 22 : Finance costs

Other borrowing costs

Term loans

Particulars

Amortisation

Opening and closing stock of finished goods

Excise duty on finished goods

Contribution to provident and other funds

Depreciation

Salaries and wages

Staff welfare expensesTotal

(Amount in Rs.)Note 23 : Depreciation and amortisation expenseTotal

Closing stock


Power and fuel 4,740,089 4,781,047 Insurance - 208,872 Repairs and maintenance to:

1,136,975 954,557 27,220 1,164,195 1,040 955,597

4,599,186 4,313,206 Total (A) 10,503,470 10,258,722

- 443,222 7,990,475 4,952,328 6,747,602 14,724,254 1,634,300 4,523,161

16,372,377 24,642,965

3,942,401 4,822,403 155,000 115,000

Donations and Contributions 897,974 225,000 CSR Expenses 6,165,098 4,000,000

446,580 - 18,795,444 12,851,513

Statutory Audit fee 300,000 300,000 Cost Audit fee 110,450 80,000 -Tax Audit fee 75,000 75,000 Internal Audit fee 360,450 360,000 Swachh bharat cess on audit fees 4,175 845,900 4,175 819,175

1,432,491 1,221,024 20,204,233 5,209,748

256,552 217,965 8,731,661 7,162,204 2,405,512 2,093,581

25,864,360 18,266,142 9,362,877 7,614,139

10,080,304 13,303,511 109,586,387 77,921,405

34,262,876 - 3,125,814 (493,456) 6,871,059 13,378,517

Fixes Assets- Writte Off 1,257,581 1,472,576 1,420,822

10,151,441 7,671,966 Less: Provision for doubtful debts written back - 10,151,441 - 7,671,966

57,089,593 22,029,603

15,716,527 4,923,985 11,284,826 6,488,876

27,001,353 11,412,861 220,553,180 146,265,556

71

Freight outward

Misc administration expenses

Note 24 : Other expenses

Printing & stationary

Total (B)

Particulars

Advertisement and promotion

Loss on Fixed Asset

Auditor fees

Interest paid on trade payable

E. Rates and taxes (excluding income tax)


Service outsouring and other sales expenses

Foreign exchange loss

Office maintenance

C. Administrative expensesBusiness promotion

Warranty


Other manufacturing expenses

i) Machinery

Directors sitting fee

R & D expensesRent Telephone expenses

Provision for doubtful debts

Total (D)

Grand Total (A+B+C+D+E)Total (E)

Bad debts and irrecoverable advances written offInventory write-off

Rates, taxes and licenses

Travelling expenses

D. Other expensesTotal (C)

Duties and taxes (indirect taxes)

Bank charges

Consultancy & professional charges

A. Manufacturing expenses

ii) Buildings

B. Selling expenses


300,000 300,000 75,000 75,000

375,000 375,000

Amount in Rs. % Amount in Rs. %31,262,963 1% 67,349 0%

2,238,403,287 99% 1,546,911,091 100%2,269,666,250 100% 1,546,978,440 100%


- - 31,262,963 67,349

31,262,963 67,349


1,447,070 544,693 - -

1,447,070 544,693


3,917,061 16,309,115

72

Note 26 : Value of imports made during the year by the Company calculated on CIF basis

Note 28 : FOB value of exports

Tax audit fee

Particulars

Note : Remunaration to Statutory Auditors

Year ended 31.03.2016Year ended 31.03.2017Particulars

Statutory Audit fee

Raw material and components

Particulars

Imported

Total

i. Raw materials, stores and spares

Particulars

(Amount in Rs.)

Capital goods

Indigenous

TOTAL

Note 25 : Comparison between consumption of imported and indigenous raw materials, stores and spares

Total

Total

Sales

(Amount in Rs.)

Note 27 : Expenditure incurred in foreign currency

Others

(Amount in Rs.)

Foreign travel expenses (exclusive of tickets purchased in rupees)

Particulars

Note 29 : Segment Reporting

The Company is engaged in the business of manufacturing Industrial chargers and execution of transmission and distribution projects. The two lines of business constitute the two business segments of the Company. There are no secondary segments i.e geographical segments. The disclosure with respect to the primary business segments as laid out in Accounting Standard 17 are as follows.

Manufacturing Division Projects Division Total Manufacturing Division Projects Division Total

1 Segment revenueNet sales 1,275,495,071 1,808,196,821 3,083,691,892 1,187,574,192 852,451,746 2,040,025,938

2 Segment resultsSegment results 213,205,772 169,495,986 382,701,758 151,990,140 41,480,840 193,470,980 Less: Unallocable net expenditure 84,558,049 58,555,404 Profit before tax 298,143,709 134,915,576 Less: Taxes 99,606,852 43,834,581 Net profit 198,536,856 91,080,995

3 Segment assetsSegment assets 886,852,033 1,098,321,309 1,985,173,342 686,615,525 867,176,783 1,553,792,308 Unallocated assets 195,365,301 91,918,187 Total assets 2,180,538,638 1,645,710,491

4 Segment liabilitiesSegment liabilities 215,077,419 758,854,179 973,931,598 216,022,347 475,068,002 691,090,349 Unallocated liabilities 1,206,607,034 954,620,142 Total liabilities 2,180,538,638 1,645,710,491

5 Capital expenditureSegment capital expenditure 647,904 3,796,102 4,444,006 1,180,294 1,092,340 2,272,634 Add: Unallocated capital expenditure - - 2,278,443 336,334 Total capital expenditure - - 6,722,449 2,608,968

6 DepreciationSegment depreciation 7,508,081 596,799 8,104,880 7,823,227 122,384 7,945,611 Add: Unallocated depreciation - - 2,360,408 2,486,417 Total depreciation - - 10,465,287 10,432,028

73

(Amount in Rs.)2015-16

Sl.No Particulars2016-17

Note 30 : Related party transactions

2016-17 2015-16

2,400,000 2,400,000

12,387,185 4,200,000

4,263,561 5,303,834 2,024,799 6,304,185

660,335 1,723,210 880,998 3,157,748

Reimbursement of expenses charged by the Company - TranscationsAmara Raja Batteries Limited 114,545 1,231,465

14,727,955 12,879,198 Amara Raja Electronics Limited - 47,044 Amara Raja Industrial Services Private Limited 40,611 5,891 Galla Foods - 28,124 Amara Raja Infra Private Limited 1,186,744 75,345 Reimbursement of expenses charged on the Company - TranscationsAmara Raja Batteries Limited 47,357,626 42,447,352 Amara Raja Electronics Limited - - Mangal Industries Limited 2,017 - Amara Raja Infra Private Limited - - Amara Raja Industrial Services Private Limited - 130,012 Sale of Goods and Services -TranscationsAmara Raja Batteries Limited 157,834,961 108,813,133 Amara Raja Infra Private Limited 184,122,031 162,290,022 Amara Raja Electronics Limited 685,622 2,229,413 Mangal Industries Limited 23,683,714 10,787,602 Purchase of goods/services -TranscationsAmara Raja Batteries Limited 127,543,919 146,449,543 Amara Raja Electronics Limited 128,542,777 83,447,418 Mangal Industries Limited 92,980,370 70,730,131 Amara Raja Infra Private Limited 317,245,384 102,096,341 Amara Raja Industrial Services Private Limited 10,826,765 4,408,988

Amara Raja Batteries Limited 94,036 228,196 Amara Raja Electronics Limited 26,333 60,982 Mangal Industries Limited 194,118 28,747

74

1. Key management personnel

Mr. G. Harshavardhana

2. Relatives of key management personnel

Related parties particulars pursuant to “Accounting Standard –18”



Amara Raja Infra Private Limited

Wife of Mr. Jayadev GallaDr. G Ramadevi

A) List of related parties

Daughter of Dr. Ramachandra N Galla

Mr. Jayadev Galla

ParticularsAmount in Rs.




Mangal Industries Limited

Amara Raja Batteries Limited

Amara Raja Industrial Services Private Limited

Wife of Dr. Ramachandra N Galla


GrandSon of Dr. Ramachandra N Galla

Mrs. Amara Kumari Galla

Mr. G. Vikramadithya GrandSon of Dr. Ramachandra N Galla3. Enterprises over which key management personnel and / or their relatives exercise significant influence

Mrs. Padmavathi Galla

Amara Raja Batteries Limited

I. Transactions during the year 2016-17 (previous year 2015-16)

Amara Raja Electronics LimitedMangal Industries Limited

B) Transactions with the related parties

Commission to Directors

Interest Income - Transcations

Remuneration -TransactionsRPT-Transactions

Interest Expenses - Transactions

2016-17 2015-16

Amara Raja Batteries Limited 8,201 -

Amara Raja Electronics Limited 372,610 - Mangal Industries Limited 65,803 -

Payables

12,525,385 4,200,000

- - 37,905 - 4,702 -

38,971 -

Amara Raja Batteries Limited 5,577,449 1,490,215 Amara Raja Electronics Limited - - Mangal Industries Limited - - Amara Raja Infra Private Limited - - Amara Raja Industrial Services Private Limited - 130,012 Outstanding Payables

Amara Raja Batteries Limited 40,167,180 38,591,128 Amara Raja Electronics Limited 40,955,928 31,870,834 Mangal Industries Limited 19,987,723 20,783,607 Amara Raja Infra Private Limited 131,424,454 45,939,627 Amara Raja Industrial Services Private Limited 3,331,083 -

ReceivablesReimbursement of expenses charged by the Company ReceivablesAmara Raja Batteries Limited -

1,296,945 Amara Raja Electronics Limited - 47,044 Amara Raja Industrial Services Private Limited 40,611 5,891 Galla Foods - - Amara Raja Infra Private Limited 104,006 75,345 Outstanding ReceivablesAmara Raja Batteries Limited 38,782,492 42,972,554 Amara Raja Infra Private Limited 69,259,185 15,416,014 Amara Raja Electronics Limited 186,345 728,461 Mangal Industries Limited 3,330,117 783,899

Amara Raja Batteries Limited - 188 Amara Raja Electronics Limited 498 3,914 Mangal Industries Limited - -

Dr. Ramachandra N Galla 17,087,750 12,321,750 Mrs. Amara Kumari Galla 5,131,500 2,565,750 Mr. Jayadev Galla 20,604,370 9,570,000 Dr. G Ramadevi 9,421,500 4,710,750 Mr. G. Harshavardhana 3,382,190 825,000 Mr. G. Vikramadithya 3,382,190 825,000

Dr. Ramachandra N Galla - 60,000,000 75

Share Capital

Loan outstanding (liability)

Interest Receivables


Dr. Ramachandra N GallaInterest payableDr. Ramachandra N GallaAmara Raja Batteries LimitedAmara Raja Electronics Limited

Bill Discount charges-Transactions

Cash discounting /Income-Transactions


Reimbursement of expenses charged on the Company payable

Remuneration & Commission payable

Amount in Rs.Particulars

As at As at31.03.2017 31.03.2016

10,866,102 9,916,372 14,323,135 14,323,135 4,784,129 4,719,317 4,478,033 4,478,033

68,110,032 Nil


198,536,857 91,080,995 10 10

5,835,678 4,668,542 34.02 19.51

(Amount in Rs.)Year ended Year ended31.03.2017 31.03.2016

354,974,186 238,092,108

Contract revenue recognised 816,568,768 509,318,742 Contract costs incurred 843,010,768 451,539,069

335,564,758 180,903,905 2,502,031 17,767,477

c. Gross amounts due from customers for contract works 33,450,035 19,677,920 d. Gross amounts due to customers for contract work 14,892,060 5,038,957

76

a. Contract revenue recognised as revenue b. In respect of contracts in progress

Retention money

Par value of each equity share (Rs.)Profit after taxation

Note 33 : Disclosures as per Accounting Standard 7

Particulars

iii) Sales tax ( 27,31,486 /- was paid under protest ) iv) Others

Note 32 : Earnings per share(Amount in Rs.)

Weighted average number of shares outstandingEarning per share - basic and diluted (Rs.)

B. Commitments

Particulars

A. Contingent liabilities

i) Excise duty ( 33,44,550/- was paid under protest )

Advance received from customers

a) Estimated amount of contracts remaining to be executed on capital account and not provided for

Note 31 : Contingent liabilities and commitments

ii) Service tax ( 42,88,195 /- was paid under protest )

Particulars

a) Claims against the Company not acknowledged as debts

Specified Bank Notes (Rs 500 & Rs 1000)

Other Denominations Total

188,500 5,197 193,697 0 610,593 610,593 0 385,307 385,307

188,500 188,500 - 230,483 230,483

Rs. 61,65,098/-.

37.In the opinion of Board of Directors the assets other than fixed assets and non-current investments are expected to realise the value stated in the accounts, in the ordinary course of business.

For Sagar and AssociatesChartered AccountantsFirm Registration No.003510S Dr. Ramachandra N Galla Jayadev Galla


V.Vidya Sagar BabuPartner(Membership No.027357) Vikramadithya Gourineni

Managing Director

D.Chiranjeevi Raju Company Secretary


77

35.The Board of Directors proposed a dividend of Rs. 3.25/- per share having face value of Rs.10/-, where total dividend amounts to 3,65,23,157/- including corporate dividend tax of Rs. 61,77,634./-

Chandramouleeswaran.S

Particulars

Less: amount deposited in banksClosing cash balance as on 30th Dec 2016

Note No 34 : Note on Specified Bank Notes (SBN)

Closing cash balance as on 8th Nov 2016Add: permitted receiptsless: permitted payments

38.Figures have been rounded off to the nearest Rupee.

36. Expenses incurred on Corporate Social Responsibility (CSR) programs under secion 135 of the Companies Act, 2013 are charged to Statement of Profit and Loss under "Other Expenses" [Note 24] aggregating to

39.Previous year figures are regrouped and reclassified whereever necessary

As per our report of even date attached For and on behalf of the Board

DGM - Finance & Accounts

78

Amara Raja Power Systems Limited Corporate Identification Number (CIN): U31102AP1984PLC005165

Registered Office: Renigunta-Cuddapah Road, Karakambadi, Tirupati – 517520,Andhra Pradesh Tel: 91(877) 226 5000 / Fax: 91(877) 228 5600

Website:www.amararajapowersystems.com

Proxy Form -Form MGT-11

[Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]

32nd Annual General Meeting – September 25, 2017 at 10.30 a.m. IST

Name of the Member(s)

Registered Address

E-mail Id Folio No /Client ID DP ID

I/We, being the member(s) holding ____________shares of the Amara Raja Power Systems Limited, hereby appoint

Name : E-mail Id:

Address:

Signature , or failing him

Name : E-mail Id:

Address:


Name : E-mail Id:

Address:


as my/ our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 32nd Annual General Meeting of the company, to be held on Monday, September 25, 2017 at 10.30 a.m. at the Registered office situated at Renigunta - Cuddapah Road, Karakambadi, Tirupati – 517520, Andhra Pradesh and at any adjournment thereof in respect of such resolutions as are indicated below:

79

Resolution No.

Subject matter of the resolution Vote

For Against Abstain

Ordinary business

1. Adoption of the audited financial statements for the financial year ended March 31, 2017 together with the reports of the Board of Directors’ and Auditors’ thereon.

2. Declaration of dividend on the equity shares of the Company for the financial year 2016-17.

3. Appointment of Dr.Upendranath Nimmagadda (DIN: 00613289) as Director of the Company

4. Ratification of appointment of M/s. Sagar & Associates, Chartered Accountants as Statutory Auditors of the Company

Special business

5. Appointment of Mr. Vikramadithya Gourineni (DIN: 03167659) as Director of the Company.

6. Appointment of Mr. Vikramadithya Gourineni (DIN: 03167659) as Managing Director of the Company.

7. Appointment of Mr. Siddharth Galla (DIN: 07342402) as Director of the Company

8. Ratification of the remuneration to be paid to the Cost Auditors of the Company for the financial year 2017-18

Signed this _____day of _____2017 Signature of the shareholder across Revenue Stamp

Signature of Shareholder Signature of Proxy holder

Notes: The proxy form to be effective should be duly stamped, completed, signed and must be returned so as to reach the Registered Office of the Company, not less than 48 hours before the time for holding the aforesaid meeting. The Proxy need not be a member of the company.

Affix Revenue Stamp of Re.1/-

80

Amara Raja Power Systems Limited Corporate Identification Number (CIN): U31102AP1984PLC005165

Registered Office: Renigunta-Cuddapah Road, Karakambadi, Tirupati – 517520,Andhra Pradesh Tel: 91(877) 226 5000 / Fax: 91(877) 228 5600

Website:www.amararajapowersystems.com

32nd Annual General Meeting – September 25, 2017 at 10.30 a.m.

ATTENDANCE SLIP

Registered Folio no./ DP ID no./Client ID no:

Number of Shares held:

I certify that I am a member/proxy/authorized representative for the member of the Company. I hereby record my presence at the 32nd Annual General Meeting of the Company at the Renigunta-Cuddapah Road, Karakambadi, Tirupati – 517520, Andhra Pradesh, India, on Monday, September 25, 2017, at 10.30 a.m. IST.

……………………………………. ……………………………………. Name of the member/proxy Signature of the member / proxy

(In BLOCK letters)

Note: Please fill up this attendance slip and hand it over at the entrance of the meeting hall. Members are requested to bring their copies of the Annual Report to the AGM.

81

Route Map to the AGM Venue

Venue: Registered Office situated at Renigunta-Cuddapah Road, Karakambadi, Tirupati - 517520

Distance from Tirupati Railway Station : 14.50 Kms (Via Karakambadi Road)

Distance from Renigunta Railway Station : 6.75 Kms

Amara Raja Power Systems Limited

Amara Raja Power Systems LimitedCIN: U31102AP1984PLC005165

Registered office: Renigunta – Cuddapah Road, KarakambadiTirupati – 517520, Andhra Pradesh

Corporate Office: Terminal A, 1-18/1/AMR/NR, Nanakramguda Gachibowli, Hyderabad – 500032

Tel: 91 (40) 23139000 Fax: 91 (40) 23139001email: [email protected] | www.amararjapowersystems.com

Documents

AMARA RAJA POWER SYSTEMS LIMITED ANNUAL REPORT 2016 … · Amara Raja Power Systems Limited NOTICE is hereby given that the 32nd Annual General Meeting of the members of Amara Raja