Dear Members

Your Directors take pleasure in presenting the 30th Annual Report for the financial year ended on March 31, 2016. The financial performance is presented below (stand-alone basis).

(Rs. In Lakhs)
Particulars 2015-16 2014-15
1 Net sales 1,28,835.87 1,33,007.03
2 Other income 1,208.05 1,660.52
3 Total income 1,30,043.92 1,34,667.55
4 Total expenditure 1,15,646.67 1,18,462.24
5 Profit before interest, depreciation and tax (PBIDT) 14,397.25 16,205.31
6 Finance cost 5,264.70 7,066.02
7 Depreciation & amortisation expenses 4,958.96 5,103.85
8 Profit before exceptional items and tax 4,173.59 4,035.44
9 Exceptional items - Income/(expenses) (896.16) (1,503.82)
10 Profit Before Tax (PBT) 3,277.43 2,531.62
11 Provision for tax & tax adjustment 1,334.44 1,069.55
12 Profit After Tax (PAT) 1,942.99 1,462.07
13 Transfer to General Reserve 105.35 500.00
14 Earnings Per Share (H) 0.77 0.58
15 Proposed dividend (on share of RS.1/- each) 25% 20%

Performance review: 2015-16

Financial Year (FY) 2015-16 has been a challenging year for the Company. The overall economic environment remained weak through the year 2015-16, than was anticipated at the beginning of the year. Growth momentum remained modest during most part of the year with general demand in the major telecom segment remaining sluggish. Your Company has continued the steady strengthening of internal efficiencies to achieve external competitiveness. Focus on cost, design optimisation and diversified marketing approaches, amongst others, aided the Company in improving the margins. Despite operating in an increasingly competitive business environment, your Company demonstrated a creditable performance. While your Company witnessed a reasonable growth in certain business segments, the aggregate turn-over for the year registered a marginal decline over FY 2014-15; the bottom-line, however, registered substantial improvement by 32.9% at PAT.

Greater emphasis was laid on cost and operational efficiencies, resulting in Profit after Tax (PAT) at Rs.1,942.99 lakhs compared to H1,462.07 lakhs for the previous year.

Current years performance:

During the current year, a stream of opportunities is expected to open up in the traditional as well as new areas of business, which shall enable your Company to regain the growth trajectory. Make- in-India initiative by the Government of India provides a potential platform to some of the business segments to charter higher growth vistas. Your Company is a leading manufacturer of a variety of industrial batteries and niche engineering products and meets the demand of major industries. Your Company has been adept at aligning itself to the market requirements. Delays in Railway and Defence business segments can have an effect on your Companys performance. Considering all the factors, in line with the management thoughts placed in the Management Discussion

Analysis last year, the Company is expected to perform better on the profitability this year also, for a given business environment, while consolidating the topline. Your Directors have factored these effects and have been taking necessary corrective steps; barring unforeseen circumstances, performance of the Company in the coming years (from FY18) is expected to be highly encouraging. The Management Discussion and Analysis section of the Annual Report presents a detailed business review of the Company.

Dividend

Your Directors are pleased to recommend 25% dividend - Rs.0.25 per equity share of HI/- fully paid up (Previous Year 20%) for the Financial Year 2015-16, subject to approval of the members at the ensuing Annual General Meeting. The proposed dividend including dividend tax will absorb H761.26 lakhs.

Transfer to reserves

The Company proposes to transfer H105.35 lakhs to the General Reserve out of the amount available for appropriation from current year profits.

Subsidiary companies

The consolidated financial statements of the Company and its subsidiaries prepared in accordance with the Companies Act, 2013 and applicable accounting standards, forms part of this annual report. The consolidated financial statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Company has four subsidiaries as on March 31,2016, namely,

HBL America Inc.

HBL Germany GmbH, Germany SCIL Infracon Private Limited HBL Suntech LLP

The Company has two associate companies namely Naval Systems and Technologies Private Limited (NSTL) and Kairos Engineering Limited (KEL) within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"); and one joint venture company namely Gulf Batteries Co. Ltd (JV in the Kingdom of Saudi Arabia - KSA).

There has been no material change in the nature of the business of the subsidiaries. Pursuant to the provisions of Section 129(3) of the

Act, a table containing salient features of the financial statements of the Companys subsidiaries in Form AOC-1 is attached.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are placed on the website of the Company.

Highlights of performance of subsidiaries, associates and joint venture companies and their contribution on overall performance of the Company.

As per the notification issued by the Ministry of Corporate Affairs on July 27, 2016 with regard to Companies (Accounts) Amendment Rules, 2016, the report of the Board shall contain highlights of performance of subsidiaries, associates and joint venture companies and their contribution on overall performance of the Company. Accordingly, we hereby furnish the following:

Subsidiaries

HBL Germany GmbH (HBLG)

HBL Germany is our base for selling in Europe - and continues efforts to build key relationships with major German engineering companies and our global customers where they have offices in Europe. HBL Germany offers our customers in the Euro-Zone the convenience of dealing with HBL locally and avoiding having to manage long distance trading. This is especially valuable for smaller customers who may be adverse to international risks. HBL-G has continued to grow with further success at major power systems OEMs in Europe and a healthy backlog has been built for FY2017.

HBL America Inc. (HBLA)

HBL America had a challenging year - especially in the oil and gas sector and South America - however the pipeline of projects is growing and key approval work is underway. New approvals in the rail and aviation sector in particular will increase sales in the near term. FAA approval of certain aviation products is expected in FY17 and this will have a marked impact on revenues. Significant orders were obtained from Central America while Brazil saw a dramatic drop as our main end user - Petrobras - suffered fallout from the political situation.

SCIL Infracon Private Limited (SIPL)

Shareholders are already aware that SIPL is not in operation since a few years. As already reported elsewhere, the proposal of merger of SIPL with the Company which was envisaged earlier was dropped, after re-considering the benefits of such an action. Some of the assets of SIPL were disposed off during the year to pay off the liabilities. The loss reported in the year was mainly due to depreciation and amortisation of assets and loss on sale of such assets.

HBL Suntech LLP

HBL Suntech LLP was incorporated in 2011 to take up trading and sale of monoblock batteries. However, due to continuous losses and unviable business outlook, operations of HBL Suntech LLP were discontinued with effect from 1 April 2014. Only administrative procedures related to closure of business, follow up on certain statutory matters and realisation of old book debts were conducted in the year under review.

Joint Ventures and Associates

Gulf Batteries Company Limited (JV in the Kingdom of Saudi Arabia)

Your Company is a 40% stake holder in the JV. Due to low oil prices most of the oil companies reduced their capex requirements and deferred some of the major anticipated orders. Due to overall economic and business scenario in KSA, operations were below breakeven level.

Naval Systems and Technologies Limited (NSTL)

NSTL is an associate Company of HBL. NSTL is a service provider to foreign Original Equipment Manufacturers (OEMs) mainly operating in the field of marine equipment in Indian Navy. The services provided include installation, trials and commissioning of various equipment, annual maintenance, specialised documentation etc. NSTL has proven expertise in providing technical support, conducting feasibility studies for complex systems, market research and software support. FY 2015-16 was an all time record performance year for NSTL with an income of H1280.42 lakhs and a PBT of H290.79 lakhs. Your Directors believe that NSTL will continue to grow into different niche areas, and maintain its profitability.

Kairos Engineering Limited (KEL)

KEL was primarily engaged in software solution for railway monitoring controls. Some of the products developed earlier are yet to get due recognition from Railways for commercial implementation. As result of such delays during the year KEL did not receive any new orders and there was no operational income from sales or service.

Highlights of financial performance and impact of the contribution of subsidiaries, associates and joint venture companies on overall performance of your Company are presented in the Consolidated Financial Statements, Annexure 37.3 in Notes on accounts. The overall consolidated profit for the year was Rs.2,598.71 lakhs and an EPS of Rs.1.03 per share were reported, with a moderate increase.

Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the auditors in their reports

The Board has considered the observations/ queries as raised by the statutory auditors and the explanations are as under.

Comments of the auditors:

Annexure B to the Independent Auditors report on standalone financials statements.

According to the information and explanations given to us and based on our audit we are of the opinion that, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 2016, 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 Institute of Chartered Accountants of India, and except for the possible effects of the material weaknesses in the operating effectiveness of controls described below on the achievement of the objectives of the control criteria, the Companys internal financial controls over financial reporting were operating effectively as of March 31,2016.

a) During the year the Company had migrated from its existing ERP package to SAP which is in its final implementation stage. The Companys internal financial controls implemented through Information Technology Controls and General IT Controls are yet to be fully implemented which may lead to a failure of the Companys control procedures to prevent or detect a misstatement of an account balance or disclosure.

b) Control Documents evidencing the operating effectiveness of controls are not signed off appropriately, resulting in nonidentification of deviations from the approved delegation of authority & responsibility, companys controls & procedures. In as much, effecting the assessment of risks associated and determining the effect of the deviations of the control being tested and the evidence to be obtained, as well as forming an opinion on the operating effectiveness of the controls.

A material weaknessis a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 financial statements of the Company, and these material weaknesses do not affect our opinion on the standalone financial statements of the Company.

Annexure A to the Independent Auditors report on consolidated financial statements

According to the information and explanations given to us and based on our audit we are of the opinion that, the Holding Company and its subsidiary companies incorporated in India, have in all material respects, maintained adequate internal financial controls over financial reporting as of March 31,2016, based on the internal control over financial reporting criteria established by the Holding Company, its subsidiary companies, considering 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, and except for the possible effects of the material weaknesses in the operating effectiveness of controls in the Holding Company described below on the achievement of the objectives of the control criteria, the Companys internal financial controls over financial reporting were operating effectively as of March 31,2016.

a) During the year the Holding Company had migrated from its existing ERP package to SAP which is in its final implementation stage. The Companys internal financial controls implemented through Information Technology Controls and General IT Controls are yet to be fully implemented which may lead to a failure of the Companys control procedures to prevent or detect a misstatement of an account balance or disclosure.

b) Control Documents in the Holding Company evidencing the operating effectiveness of controls are not signed off appropriately, resulting in non-identification of deviations from the approved delegation of authority & responsibility, companys controls & procedures. In as much, effecting the assessment of risks associated and determining the effect of the deviations of the control being tested and the evidence to be obtained, as well as forming an opinion on the operating effectiveness of the controls.

A material weaknessis a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a timely basis.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 Consolidated Financial Statements, and these material weaknesses do not affect our opinion on the Consolidated Financial Statements of the Holding Company and its subsidiary companies and the jointly controlled entity.

Boards reply

The process of phase wise migration of the existing ERP system with SAP platform is at an advanced stage and Communication and IT controls are in the process of being established. This will be completed in the current financial year. We are informed such transitional issues are not unusual, especially when a migration happens as is in many similar cases elsewhere. Further, auditors have stated that these weaknesses do not affect their opinion on the standalone financial statement of the Company.

Scheme of arrangement and amalgamation between Beaver Engineering and Holdings Private Limited and the Company

The Board of Directors of your Company, at a meeting held on March 23, 2016, have approved the Scheme of Arrangement and Amalgamation of Beaver Engineering and Holdings Private Limited (Beaver or Transferor Company) with HBL Power Systems Limited (HBL or the Transferee Company) and their respective shareholders and creditors (herein referred to as the Scheme) after taking into consideration, inter alia, an independent valuation report and a fairness opinion. The Scheme shall be subject to the approval/sanction by the Honble High Court at Hyderabad and/or such other competent authority as may be necessary. Proposed Appointed Date for the amalgamation is April 1,2016. Necessary approvals have been received from BSE and NSE. The Company has filed necessary application to the Honble High Court.

The Board recommended the following share exchange/share entitlement ratio

i) 3,883 fully paid up Equity Shares of HI/- each of the Transferee Company shall be issued and allotted as fully paid up for every 10 Equity Shares of H10/- each fully paid up held in the Transferor Company.

ii) 3,753 fully paid up Equity Shares of RS.1/- each of the Transferee Company shall be issued and allotted as fully paid up for every 10 Compulsorily Convertible Preference Shares of Rs.10/- each fully paid up held in the Transferor Company.

iii) 3,901 fully paid up Equity Shares of Rs.1/- each of the Transferee Company shall be issued and allotted as fully paid up for every 10 Optionally Convertible Redeemable Preference Shares of Rs.20/- each fully paid up held in the Transferor Company.

Beaver Engineering and Holdings Private Limited is the holding company for HBL Power Systems Ltd. Beaver is also engaged in the business of providing engineering know-how and services; sales of engineered products; developing as a center of competence for engineering knowledge and skill, in all branches of engineering and technology. The proposed merger shall allow the shareholders of the Transferor Company viz. the promoters and the investors to directly hold shares in the listed company. This will result in benefits to the Companies and their respective shareholders and stakeholders, such as:

• Improved debt equity ratio for Transferee Company Increase in public float of the Transferee Company.

• This will in turn increase trading stock and positively impact the liquidity of shares of the Transferee Company.

• Simplification of group structure.

Updates on merger of SCIL Infracon Private Limited

With regard to the proposal of merger of SCIL Infracon Private Limited with the Company as envisaged earlier, considering the priorities in merger proposal of Beaver Engineering and Holdings Private Limited with the Company, no formal application was made during the year to the Honble High Court of Andhra Pradesh and Telangana though the proposal has been cleared by the BSE Limited and the National Stock Exchange of India Limited.

Material changes and commitments:

No material changes and commitments have occurred after the closure of Financial Year 2015-16 till the date of this Report which would affect the financial position of your Company.

Directors responsibility statement:

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

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

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

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls were adequate and operating effectively;

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 201516 except to the extent of possible insignificant effects on internal controls due to stage wise migration of existing ERP system to SAP, which is at its final stage. However, such migration will not have any material impact on the overall internal controls and reporting established by the Company as stated in the Guidance Note issued by the Institute of Chartered Accountants of India.

Directors and key managerial personnel

Mr. Sanjiv Singhal has resigned from the Board with effect from March 23, 2016. Your Board conveys sincere appreciation for his advice during his tenure as a Director.

Mr. Mitin Jain has been appointed as a director in the vacancy caused by Mr. Sanjiv Singhal with effect from March 23, 2016. Your Board welcomes him.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company. There was no change in key management personnel.

Mr. MSS Srinath retires by rotation and is eligible for re-appointment. Your Board recommends his reappointment.

Number of meetings of the Board

Five meetings of the Board were held during the year. For details of the meetings of the Board, please refer to the corporate governance report, which forms part of this report.

Board evaluation

Pursuant to the provisions of the Companies Act and the Corporate Governance requirements prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the annual evaluation of the Board, Committees of the Board and the individual Directors was carried out.

Necessary inputs were obtained from all the directors on the Board and members of the respective Committees to evaluate the performance of the Board and the Committees as a whole on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") while reviewing the performance of the individual directors considered the contribution of the individual director to the Board and Committee meetings on the basis of the criteria such as preparedness on the issues circulated in agenda, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent directors, performance of nonindependent directors, performance of the Board as a whole and performance of the Chairman was evaluated taking into account the views of executive directors and non-executive directors.

Policy on Directors appointment and remuneration and other details

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Directors report.

Audit committee

The details pertaining to composition of audit committee are included in the Report on Corporate Governance, which forms part of this report. The Board of Directors has accepted all the recommendations of the audit committee.

Statutory auditors

M/s Rao & Kumar, Chartered Accountants (FRN 03089S) Visakhapatnam who are the statutory auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. Your directors recommend their reappointment.

Risk management

The Company has deployed a comprehensive framework to identify, monitor and take all necessary steps towards mitigation of various risk elements which can impact the existence of the Company, on a periodic basis. All the identified risks are managed through continuous review of business parameters by the Management and the Board of Directors are also informed of the risks and concerns.

Internal financial controls

Pursuant to Section 134 of the Companies Act 2013, the Directors state that the Board, through the operating management, has laid down internal financial controls to be followed by the Company. To the best of their knowledge and ability and inputs provided by various assurance providers confirm that such financial controls are adequate with reference to the size and operations of the Company. It is pertinent to note that the Company is in the final stage of phase wise migration to SAP platform. The migration from ERP system would certainly have transitional effects on the internal controls. The effect of such migration will be insignificant in nature on the entire internal controls. The Internal controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Particulars of loans, guarantees and investments

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

Transactions with related parties

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure I in Form AOC-2 and the same forms part of this report. Related party transactions are in the ordinary course of business and on arms length basis.

Corporate social responsibility

The Company has a Board-level committee that supervises its Corporate Social Responsibility (CSR) activities. The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure II of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Extract of annual return

Pursuant to Section 92(3) of the Act, the extract of annual return is given in Annexure III in the prescribed Form MGT-9, which forms part of this report.

Particulars of employees

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

1. Employee name Mr. Suresh Kalyan
2. Total remuneration CTC (H lakhs) H 121.50 lakhs
3. Designation and nature of duties Chief Operating Officer (COO)
4. Qualification BSc. Chartered Accountant
5. Exp.(Year) 26
6. Date of commencement of employment 17.11.2014
7. Age 52
8. Last employment held before joining the Company Amara Raja Batteries Limited, Hyderabad, as President - Finance

a. The ratio of the remuneration of each non-executive director to the median remuneration of the employees of the Company for the financial year: Not Applicable as none of the non-executive director was paid any remuneration.

b. The percentage increase in remuneration of each Director, finance head and Company Secretary in the financial year:

Name of the Directors/Key Managerial Personnel % increase in remuneration in the financial year
Dr. A J Prasad, Chairman and Managing Director 62.80 (excluding commission)
Mr. MSS Srinath, Whole-Time Director 98.50

At the AGM held on September 29, 2015, shareholders have approved Increased remuneration to Dr. A J Prasad and Mr. MSS Srinath w.e.f. October 1,2015 and September 1,2015 respectively.

c. The percentage increase in the median remuneration of employees in the financial year: 15.7%

d. There are 2197 permanent employees on the rolls of Company as at March 31,2016

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 15.7%. The individual increments varied from 8% to 20%, based on individual performance. As per the remuneration policy of your Company, employees are compensated broadly in comparison with the median of the comparator basket, on the basis of performance, potential and criticality for achieving competitive advantage in the business. Salary increases during the year were in line with your Companys performance as well as per inflation and motivational factors.

f. Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the Company:

Aggregate remuneration of KMP in FY2015-16 (H lakhs) 304.26
Revenue (H lakhs) 1,28,835.87
Profit before Tax (PBT) 3277.43
Remuneration of KMPs (as % of revenue) 0.24
Remuneration of KMP (as % of PBT) 9.28

g. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31,2016 March 31,2015 % Change
Market capitalisation (H crores) 919.65 1290.30 (28.73)
Price Earnings Ratio 47.20 87.93 (46.32)

h. Comparison of each remuneration of the key managerial personnel against the performance of the Company:

(Rs. In Lakhs)
Particulars Dr. AJ Prasad Mr. MSS Srinath Mrs. Kavita Prasad Mr. MVSS Kumar Mr. K Mahidhar
Designation CMD Executive Director Executive Director (Non-Board) Company Secretary Vice President Finance
Remuneration in FY 2015-16 67.20 36.45 16.92 23.00 30.92
Commission on profit 129.77 - - - -
Revenue (net) 1,28,835.87 1,28,835.87 1,28,835.87 1,28,835.87 1,28,835.87
Profit before Tax (PBT) 3,277.43 3,277.43 3,277.43 3,277.43 3,277.43
Remuneration as % of Revenue 0.15 0.03 0.01 0.02 0.02
Remuneration (as % of PBT) 6.01 1.11 0.52 0.72 0.94

i. The key parameters for any variable component of remuneration availed by the directors:

Only commission on net profits was paid to Chairman and Managing Director in addition to the monthly remuneration. The remuneration paid to Dr. A J Prasad, Chairman and Managing Director is restricted to aggregate of basic pay of H60 lakhs plus perquisites, benefits and allowances as approved by the members in their meeting held on September 29, 2015.

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

Disclosure requirements

As required under SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, report on corporate governance and auditors certificate thereon and management discussion and analysis are attached, which form part of this report.

The Company has formulated and published a whistle blower policy to provide a vigil mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015.

Deposits from public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

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

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in the Annexure hereto.

Corporate governance:

Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, a separate section titled "Report on Corporate Governance" is attached to the annual report.

Cost auditors:

Your Board has appointed M/s K. Narashima Murthy & Co., Cost Accountants, Hyderabad, as cost auditors of the Company for conducting the audit of cost records of the Company for the financial year 2015-16. Your Board proposes to re-appoint them as cost auditors for 2016-17 subject to the approval from the Central Government.

Secretarial auditor:

Your Board has appointed Mr. CN Kranthi Kumar (CP No: 13889), Practicing Company Secretary, as a secretarial auditor for the financial year 2015-16 and his secretarial audit report is attached to this report as Annexure IV.

Acknowledgements:

Your Board of Directors places on record its sincere appreciation towards the Companys valued customers and esteemed shareholders for the support and confidence reposed by them in the management of the Company and look forward to continuance of this mutually supportive relationship in future.

Your Directors take this opportunity to thank all the Companys Bankers and Financial Institutions, the concerned Central and State Government Departments and Agencies for their support and cooperation to the Company.

The Board has special appreciation for the employees for their dedicated services and their ability to deliver good results.

For and on behalf of the Board
Place: Hyderabad Dr. A J Prasad
Date : August 11,2016 Chairman and Managing Director

ANNEXURE TO THE DIRECTORS REPORT FOR THE YEAR 2015-16

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

A. Conservation of Energy: Energy saving devices such as re-cycling of heat and use of alternate sources of energy like solar energy/fuel oil are being implemented wherever possible.

B. Technology Absorption: We have in-house R&D facilities. We may avail the consultancy services from overseas experts for strengthening our technology, as and when needed. We are in the process of absorbing the technology so developed and improved further.

C. Foreign Exchange Earnings and Outgo:

(Rs. In Lakhs)
Particulars 2015-16 2014-15
1 Value of imports (on CIF basis)
Raw materials, components & spares 17,825.07 22,479.84
Capital items/ equipment - 21.34
2 Expenditure in foreign currency
Commission 263.90 166.40
Traveling expenses 162.83 52.84
Professional charges 94.52 21.48
Marketing expenses 467.13 314.03
Others 374.24 37.43
3 Investment in subsidiary 99.03 -
4 Foreign exchange earnings
Export sales (on FOB basis) 17,323.37 17,812.24
Services 44.80 77.72

 

For and on behalf of the Board
Place: Hyderabad Dr. A J Prasad
Date : August 11,2016 Chairman and Managing Director

   

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