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47 TH ANNUAL REPORT 2011 -2012

1 Consolidated Financial Statements

2

(` in Lakhs)

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

Revenue Account

Net Sales 80,952.67 1,04,946.98 97,855.32 99,625.77 94,425.33

EBIDTA 7,981.09 (274.32) 23,797.26 13,826.96 12,902.22

Profit Before Tax(PBT) 914.90 (6,561.14) 18,328.97 8,037.32 9,521.06

Taxation 108.55 (2,137.87) 4,949.31 2,727.24 3,076.44

Profit After Tax(PAT) 806.35 (4,423.27) 13,379.66 5,310.08 6,444.62

Capital Account

Share Capital 1,302.74 1,302.74 1,238.54 1,176.74 1,176.74

Share Warrants - - 497.55 1,955.00 1,955.00

Reserves & Surplus 55,017.75 54,353.23 56,998.56 40,824.22 36,477.85

Shareholders’ Fund 56,320.49 55,655.97 58,734.65 43,955.96 39,609.59

Borrowings 42,674.90 36,178.57 25,990.16 35,614.41 30,836.07

Financial Ratios

EBIDTA to Sales (%) 9.86% -0.26% 24.32% 13.88% 13.66%

PBT to Sales (%) 1.13% -6.25% 18.73% 8.07% 10.08%

PAT to Sales (%) 1.00% -4.21% 13.67% 5.33% 6.83%

Book Value (Face value Rupees 2 per share)

86.46 85.44 94.85 74.71 67.32

Debt Equity Ratio 0.76 0.65 0.44 0.81 0.78

EPS (Rupees)- Basic 1.24 (7.05) 22.72 9.03 11.14

Dividend % 10% 10% 70% 70% 70%

FINANCIAL HIGHLIGHTS


3


5


7 Directors’ Report

DIRECTORS’ REPORT

To,

The Members of EMCO Limited,

Your Directors take pleasure in presenting their 47th Annual Report on the business and operations of the Company and statement of accounts for the year ended 31st March 2012.

Financial Results

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

(` in Lakhs)

ParticularsCurrent Year

2011-12Previous Year

2010-11Total Income 80,991.85 105,106.90Profit Before Taxation 914.90 (6,561.14)Less: Provision for Tax – Current NIL NIL Deferred Tax 108.55 (2,114.57) Earlier Year Tax NIL (23.30)Profit After Taxation 806.35 (4,423.27)Add: Balance brought forward from previous year 19,543.28 24,114.61 Profit Available For Appropriation 20,349.63 19,691.34APPROPRIATIONS:Proposed Dividend 130.27 130.27Tax on Proposed Dividend 21.13 17.79Balance carried to Balance Sheet 20,198.23 19,543.28 TOTAL APPROPRIATION: 20,349.63 19,691.34

Review of Operations

During the year under review, Income from Sales and Services was ` 80,953 lakhs against ` 104,947 lakhs in the previous year.

The Company has earned a net profit of ` 806 lakhs in the current financial year against the net loss of ` 4,423 lakhs in the previous financial year.

Dividend

Considering the past performance of the Company and to maintain the consistent track record of dividend, your Directors are pleased to recommend for your approval a dividend of 10% i.e. ` 0.20 per share (previous year 10% i.e. ` 0.20 per share) on face value of ` 2 each for the financial year 2011-12 out of the current year’s profit.

Subsidiaries

The Company had three direct subsidiaries in the year under review, namely:-

a. EMCO Power Limited,

b. EMCO Renewable Energy Limited,

c. EMCO Overseas Pte Limited, Singapore

And four step-down subsidiaries, namely:-

a. East West Power Generation Company Limited

b. EMCO Infrastructure Limited

c. EMCO Edison Transformer (Pty) Limited, South Africa

d. PT Setenco Investa Niaga, Indonesia

8Directors’ Report

In terms of general circular issued by the Ministry of Corporate Affairs, Government of India under section 212 (8) of the Companies Act, 1956, a copy of Statement of Accounts along with the reports of the Board of Directors and Auditors Report of the above subsidiary companies are not being attached with the Annual Report of the Company.

The Company will make available Annual Accounts of the subsidiary companies and related information to any members who may be interested in obtaining the same. The Annual Accounts of subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies between 10.00 A.M. and 12.00 Noon on any working day of the Company and its subsidiaries.

The Consolidated Financial Statements presented by the Company includes the financial results of the subsidiary companies.

Fixed Deposits

During the year under review the Company has neither invited nor accepted any fixed deposits from the public.

Directors

Mr. Sanjay Bhatnagar was appointed as Non - executive Director by the Members of the Company at their Annual General Meeting held on 20th September 2011.

Further in the same meeting Mr. Rajesh S. Jain and Mr. Shailesh S. Jain were reappointed as Whole Time Director designated as Chairman and Vice Chairman for a period of three years with effect from 20th October 2011 and 19th October 2011 respectively.

Mr. Ajay Kumar Dhagat ceased to be Managing Director and Director of the Company with effect from 4th November 2011. The Board places on record its appreciation for the contribution made by Mr Ajay Kumar Dhagat during his tenure as Managing Director of the Company.

Pursuant to section 256 of the Companies Act, 1956 Mr. K N Shenoy and Mr. T N V Ayyar who retire by rotation and being eligible for reappointment, offer themselves for reappointment at the ensuing Annual General Meeting.

The above appointments/re-appointments forms part of the notice convening 47th Annual General Meeting. The profile of these Directors as required under Clause 49 of the Listing Agreement entered with the Stock Exchange(s), are given in the notice convening 47th Annual General Meeting.

Management Discussion and Analysis

The Management Discussion and Analysis forms part of the Directors’ Report is annexed hereto.

Corporate Governance Report

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

Directors’ Responsibility Statement

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, with respect to the Directors’ Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the accounts for the financial year ended on 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012 and of the profit/ loss of the Company for the year ended on that date;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Directors had prepared the accounts for the financial year ended on 31st March 2012 on a ‘going concern’ basis.



Employees Stock Option Scheme (ESOS)

Your Company has always worked on the idea that the greatest strength is its human resources and it is this resource, which makes your Company a force to reckon with in the highly competitive environment. With this view your Company has an Employee Stock Option Scheme 2006 and Employee Stock Option Scheme 2011 for the employees. The details of options under the said Schemes as required under ESOP Disclosures to be made under Clause 12.1 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are given below:

Sr No. Particulars ESOS 2006 ESOS 2011a. Options Granted 3,99,850 options 13,90,000 optionsb. Pricing formula Options have been granted at the

closing market price of the Equity Shares of the Company one day prior to the date of grant.

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

c. Option vested 2,21,225 Options Nild. Option exercised 38,000 Options Nile. Total number of Ordinary shares arising

out of the Options1,90,000 Shares Nil

f. Options lapsed 3,23,850 Options 7,25,000 Optionsg. Variation of terms of Options N.A. N.A.h. Money realized by exercise of the Options ` 171 lakhs Nil

i. Total number of options in force 38,000 Options 665,000 Optionsj (i) Detail of option granted to: senior

management personnelMary Mody : 8,000

Neeraj Yadav: 8,000

N.K.Mukherjee : 14,000

Ashok Bhambhani : 8,000

B.J.Amritkar: 75,000

Ganesh Tawari: 40,000

Deepak Khandelwal: 75,000

N K Mukherjee: 5,000

Ram Mundra: 40,000

Kishor Patel: 40,000

Ratnakar Wagh: 40,000

Anagha Dixit: 40,000

N K Paramal: 40,000

Mahesh Jagiasi: 40,000

Prashant Sahasrabudhe: 40,000

K P Singh: 75,000

R P Singh: 40,000

Kailash Agarwal: 75,000(ii) Any employee who receives in any one

year of grant of options amounting to 5% or more of options granted during the year (2011-12)

Mary Mody

Neeraj Yadav

N.K.Mukherjee

Ashok Bhambhani

B.J.Amritkar

Deepak Khandelwal

K P Singh

Kailash Agarwal(iii) Employees who were granted options

during any one year, equal to or exceeding 1% of the issued capital of the Company at the time of the grant.

Nil Nil

k. Diluted EPS calculated in accordance with Accounting Standard 20 issued by ICAI for the year ended 31st March 2012

1.24 1.24

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

Intrinsic Value Intrinsic Value

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

NA NA


Sr No. Particulars ESOS 2006 ESOS 2011(iii) The impact of the difference on profits

and EPS of the Company for the year ended 31st March, 2012 had fair value of options had been used for accounting employee Options.

NA NA

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

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

NA NA

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

(i) Risk Free Interest Rate

(ii) Expected Life

(iii) Expected volatility

(iv) Expected Dividends

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

NA NA

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

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are required to be set out in the annexure to the Directors’ Report. However as per the provisions of section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary.

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

Information as required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed to and forms part of this report.

Auditors

The Company’s Auditors, M/s. P. Raj & Co., and M/s Chaturvedi & Shah Chartered Accountants (Joint Statutory Auditors) hold office up to the conclusion of the forthcoming 47th Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received letter from them giving their consent to act as Auditors of the Company and stating that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956. Your Directors recommend their re-appointment.

Cost Auditors

The Board of Directors pursuant to order issued by the Central Government under section 233B of the Companies Act, 1956 have appointed M/s Kishore Bhatia & Associates, Cost Accountants for the conducting the audit of the cost accounting records maintained by the company in respect of manufacture of power transformers, transmission towers, electronic energy meters and generation of electricity from Wind Mill and Solar farm (Power). The due date for submission of the Report is 27th September 2012.



Insurance

All the assets of the Company are adequately insured.

Acknowledgement

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

On behalf of the Board of DirectorsFor EMCO LIMITED

sd/- Rajesh S. Jain

Chairman

Mumbai15th May 2012

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE

REPORT OF BOARD OF DIRECTORS) RULES, 1988

(A) CONSERVATION OF ENERGY

I. Energy conservation measures taken:

Under ISO 14001: Environmental Management System (EMS), following major initiatives were taken in the areas of energy savings.

1. Provision of a partition wall in Winding Hall to reduce the energy loss by 50% by curtailing the use of 2 Nos. 40 HP motors of Air Handling Unit.

2. Overhauling of VPD & VPI ovens improved the average drying cycle time of transformers by 10%.

3. Installed a new small capacity 5 T Crane (having 9 kW motor) in Tanking area, eliminating the need for use of a larger capacity 25 T Crane (having 36 kW motor) for handling light weight accessories, thereby reducing energy consumption.

4. Installed Hydraulic Bridge in VPD Plant-I to have smooth trolley movement, resulting in reduction in the oven heat loss and in turn improving the oven efficiency.

5. Installed Dry Air Generator for filling of air in the transformer during transportation, instead of inert Nitrogen Gas, which is hazardous for health.

6. Improved efficiency of TFH by overhauling the chimney, thereby reducing energy consumption.

7. 120 Nos. conventional desk tops replaced with All-in-One (AIO) desk tops, thereby reducing the energy consumption by 50%.

8. 130 Nos. CRT monitors are replaced with LCD monitors, thereby reducing the energy consumption by 60%.

9. 6 Nos. physical servers replaced by 1 No. Server based on visualization technology, resulting in saving power to the tune of 2700 W.

10. Changed pneumatic screwdrivers with electric screwdrivers thereby reducing compressor loading, noise pollution and also resulting in power saves.

11. APFC panel installed to maintain unity Power Factor.

12. Excess waste heat of Quenching Water utilized for heating Galvanizing flux solution through Stainless Steel heat exchanger.

13. FO based furnaces and galvanizing kettle converted to Piped natural gas resulting in better efficiency and cleaner environment.

14. Installed transparent sheets in Fabrication and Galvanizing shed for better illumination and no use of lights during day time.


15. Installed Galvanized Bus-bar throughout the galvanizing shop resulting in zero breakdown of electrical bus-bar problems and increasing the life of Bus-bars.

II. Proposals under implementation for reduction of energy consumption:

1. Conversion of TFH system from LDO to PNG for fuel saving.

2. Effective insulation of chilling pipeline to improve Chilling Plant efficiency.

3. Replacement of 150W MH Lamps by 30W LED Street lamps in factory premises.

4. Modification of air pipeline to improve the efficiency of Air Compressor.

5. Installation of energy monitoring system software

III. Impact of measures (I) & (II) above for reduction of energy consumption and consequent impact on cost of production of goods.

(B) TECHNOLOGY ABSORPTION, ADOPTION & INNOVATION

1. Development of Yoke shunt technology of large 400 kV 3 phase transformers.

2. Validation of 315 MVA 400 kV ICT design through dynamic short circuit test at KEMA Netherlands.

3. Design data digitization for retrieval of reference data.

4. Published two technical papers at National and International conferences.

5. Adaptation of inter-operatable communication protocol (DLMS) for Energy Meters.

6. Integration of Radio communication module “Zigbee” with energy meters to assist deployment of Advance Metering Infrastructure.

II) Research & Development (R & D)

The Company has a Government approved in-house R&D Centre. Emerging market challenges always prevail as the key driver for technology advancements. A team of R&D Engineers is constantly engaged in development activities supporting product innovation and technology improvements towards enhancing reliability and competitiveness. Besides consolidating gains of recently developed technologies, there is also a thrust on design development projects related to special application transformers like, Furnace, Rectifier, and Traction transformers.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

a. Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans:

The Company has made direct exports of Transformers to International customers and also supplied to internationally aided projects which are considered as deemed exports. Overall growth prospect for exports is encouraging.

b. Total Foreign Exchange Earnings and Expenditure:

Details concerning Foreign Exchange Earnings and Expenditure have been given under Note no 37 and 36 of the Notes to the Accounts respectively.

On behalf of the Board of DirectorsFor EMCO LIMITED

Sd/-Rajesh S. Jain

Chairman

Mumbai15th May 2012


13 CORPORATE GOVERNANCE REPORT

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

1. Corporate Governance Philosophy

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

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

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

• Customer Centric:

Customer would be the reason for Company’s existence.

• Reliability:

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

• Trust and Integrity:

The Company shall endeavour continuously to build trust in its dealings with all its stakeholders and perceived as a Company with people of high integrity.

• Openness and Transparency:

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

• Ownership:

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

• Result Orientation:

The Company shall achieve its results with utmost grit and determination against all odds.

2. Board of Directors

A) Composition

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

The Board of the Company is a balanced Board, comprising of Executive and Non-executive Directors. The Executive Directors include Chairman and Vice-Chairman. Majority of the board members are Non-executive Directors and Independent Professionals.

The following is the composition of the Board as on 31st March 2012:-

Category Number of DirectorsPercentage of Total Number of Directors

Executive Directors 2 28.57Non-executive, Independent Directors 5 71.43Total 7 100.00

Further, the Chairman of the Company is an Executive Director and Promoter. Thus, the Company has complied with the requirement of having atleast half of the Board members comprising of Independent and Non-executive Directors.

14CORPORATE GOVERNANCE REPORT

Director Designation Category

Particulars of other Directorship, Committee Memberships/ Chairmanships

*Other Directorships

#Committee Memberships

#Committee Chairmanships

Executive Directors

Mr. Rajesh S. Jain (1) Chairman Promoter 8 Nil Nil

Mr. Shailesh S. Jain (1) Vice Chairman Promoter 8 1 Nil

Mr.Ajay Kumar Dhagat (2) Managing Director Non-Promoter Nil 1 Nil

Non-executive Directors

Mr. K.N. Shenoy Director Independent 4 1 1

Mr. S. V. Deo Director Independent Nil 1 Nil

Mr. T. N. V. Ayyar Director Independent 3 2 2

Mr.Bheru Choudhary Director Independent Nil 1 1

Mr. Sanjay Bhatnagar (3) Director Independent 1 1 Nil

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

# Committee includes Audit Committee, Shareholders/Investor’s Grievance Committee. It also includes Membership/Chairmanship of EMCO Limited.

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

(2) Mr. Ajay Kumar Dhagat ceased to be Managing Director of the Company w.e.f. 4th November 2011

(3) Mr. Sanjay Bhatnagar was appointed as Non-executive Director w.e.f. 20th September 2011

B) Meetings and Attendance:

During the financial year ended 31st March 2012, 4 meetings were held as follows and gap between two meetings were well within the 4 months limit;

Sr. No. Date Board Strength Number of Directors Present1 30th May 2011 7 72 4th August 2011 7 73 4th November 2011 7 74 14th February 2012 7 6

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

Sr. No. DirectorNumber of Board Meetings

attendedAttendance at the last AGM

1 Mr. Rajesh S. Jain 4 Yes2 Mr. Shailesh S. Jain 4 No3 Mr. Ajay Kumar Dhagat* 2 No4 Mr. K.N. Shenoy 4 No5 Mr. S. V. Deo 4 No6 Mr. T. N. V. Ayyar 4 Yes7 Mr. Bheru Choudhary 3 No8 Mr. Sanjay Bhatnagar** 2 No

* Mr. Ajay Kumar Dhagat ceased to be Managing Director of the Company w.e.f. 4th November 2011.

** Mr. Sanjay Bhatnagar was appointed as Non-executive Director of the Company w.e.f. 20th September 2011.

C) Non-executive Directors’ Compensation and Disclosures:

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

i) Audit,

ii) Shareholder/Investors Grievance,



iii) Remuneration, Nomination and Selection,

iv) ESOP and

v) Finance and Administrative

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

Name Sitting Fees (`)

Mr. Bheru Choudhary 1,65,000

Mr. S. V. Deo 1,25,000

Mr. T. N. V. Ayyar 1,45,000

Mr. K.N. Shenoy 1,25,000

Mr. Sanjay Bhatnagar 40,000

Total 6,00,000

D) Code of Conduct

The Company has laid down a Code of Conduct for Board Members and Senior Management Personnel of the Company, which has also been posted on the web site www.emcoindia.com. The Company has received from all its Directors and Senior Management personnel affirmation of compliance with the Code of Conduct for the year ended 31st March 2012.

Declaration by Chief Executive Officer (CEO)

I, Shailesh S Jain, Vice Chairman of the EMCO Limited hereby declare that all the Board members and Senior Managerial Personnel have affirmed for the year ended 31st March 2012 compliance with the Code of Conduct of the Company laid down for them pursuant to clause 49(I)(D) of the Listing Agreement with stock exchange(s).

Mumbai Sd/- 15th May 2012 Shailesh S Jain

Vice Chairman

3. COMMITTEES OF THE BOARD

Currently, there are five Committees of the Board- Audit Committee, Shareholder/Investors Grievance Committee, Remuneration, Nomination and Selection Committee, ESOP Committee and Finance and Administrative Committee. The terms of reference to the Board Committees are determined by the Board from time to time. Meetings of each Board Committee are convened by the respective Committee Chairman. The minutes of the Board Committee meetings are placed for information and noting of the Board.

A. Audit Committee

(i) Brief description of Terms of Reference:

The roles, powers and functions of Audit Committee specified by the Board are in conformity with the requirements of clause 49 of the Listing Agreement as well as Section 292A of the Companies Act, 1956. Terms of reference of the Committee includes inter alia;

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

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

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

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

y Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956.

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

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


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

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

y Draft Directors’ Report and annexure thereto (including Corporate Governance Report and Management Discussion & Analysis Report)

y Disclosure of any related party transactions.

y Qualifications in the draft audit report.

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

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

7. Reviewing with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

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

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

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

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

12. To look into the reasons of default in specified areas, reviewing progress made in implementation of auditors’ recommendations, making recommendations for improvement in the internal control systems.

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

14. Reviewing issues related to risk management and compliances.

15. Reviewing financial statements, including Investments by subsidiary Companies.

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

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

The Audit Committee comprises of four Non-Executive Directors, all of whom are Independent Directors. The Chairman of the Committee is a qualified Chartered Accountant with a sound knowledge of Finance, Accounting and Law. Besides, all other members are financially literate. Composition of the Audit Committee during the year 2011-12 and status of the attendance of the members was as follows:

Name of the Director PositionNo. of Meetings held

during the yearNo. of Meetings

attended

Mr. T. N. V. Ayyar Chairman 4 4Mr. Bheru Choudhary Member 4 3Mr. S. V. Deo Member 4 4Mr. K.N. Shenoy Member 4 4

iii) Meetings of the Audit Committee:

The Audit Committee met four times during the financial year 2011-12 on 30th May 2011, 4th August 2011, 4th November 2011 and 14th February 2012. The maximum time gap between two meetings was not more than four months. Necessary quorum was present at all the meetings of the Committee held during the year under review.

The Chairman of the Audit Committee Mr. T.N.V. Ayyar, was present at the 46th Annual General Meeting, and replied to the shareholder’s queries. The Company Secretary has acted as the Secretary of the Committee. The representatives of Internal Auditor and Statutory Auditors have attended the meetings as invitee.

B) Remuneration, Nomination and Selection Committee

Remuneration, Nomination and Selection Committee is constituted pursuant to Section 314 and Schedule XIII to the Companies Act, 1956 and Clause 49 of the Listing Agreement with Stock Exchanges, to fix compensation / remuneration



for Managing / Whole-time Directors and relative of Directors.

i) Terms of Reference:

The Remuneration, Nomination and Selection Committee is empowered to determine the Company’s policy on specific remuneration packages for Executive Directors and other compensation related matters and issues within the framework of the provisions and enactments governing the same. It also performs the role prescribed under Sec. 314 of the Companies Act, 1956.

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

Remuneration, Nomination and Selection Committee comprises of four Directors. The Chairman of the Committee is a Non –executive, Independent Director. The details of names of members and Chairman of the Remuneration, Nomination and Selection Committee and status of their attendance at the meetings held during the financial year 2011-12 are as under:

Name of the Directors PositionNo. of Meetings

held during the yearNo. of Meetings

attended

Mr. Bheru Choudhary Chairman 1 1

Mr. Rajesh S. Jain Member 1 1

Mr. T. N. V. Ayyar Member 1 1

Mr. S. V. Deo Member 1 1

The Committee met one time during the financial year 2011-12 that is on 30th May 2011 for the re-appointment of Mr. Rajesh S. Jain, Chairman and Mr. Shailesh S. Jain, Vice Chairman of the Company.

iii) Remuneration Policy:

The remuneration policy of the Company has been designed in order to match the trends of the Industry in which the Company operates. The Company has made adequate disclosures to members on the remuneration paid to Directors from time to time. The remuneration / commission payable to Directors are determined by the contributions made by respective Directors for the betterment of the Company.

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

Rajesh S Jain Shailesh S JainAjay Kumar Dhagat***

Salary 3,213,254 3,482,965 1,377,239

Perquisite* 1,527,272 1,257,562 439,761

Stock Option NIL NIL 25,000

Commencement Date** 20.10.2011 19.10.2011 19.04.2010

Cessation Date 19.10.2014 18.10.2014 04.11.2011

Notice Period 6 month 6 month 1 year

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

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

***Mr. Ajay Kumar Dhagat ceased to be Managing Director of the Company w.e.f. 4th November 2011.

(C) Shareholders’ / Investors’ Grievances Committee

i) Composition and Status of the Attendance:

The Company has a Shareholders’/Investors’ Grievances Committee. The Committee is headed by Mr. Bheru Choudhary, an Independent, Non-Executive Director and comprises of the following members in the financial year 2011-12:

Name of the Directors PositionNo. of Meeting held

during the yearNo. of Meeting

attended

Mr. Bheru Choudhary Chairman 5 5Mr. Shailesh S. Jain Member (Executive Director) 5 4Mr. Ajay Kumar Dhagat* Member (Executive Director) 5 2

* Mr. Ajay Kumar Dhagat ceased to be Managing Director of the Company w.e.f. 4th November 2011


(ii) Name and designation of Compliance Officer:

Mr. Praveen Kumar, Company Secretary has been appointed as Compliance Officer and can be contacted on the following address:

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

91-22- 40404500 91-22- 25830571 [email protected] [email protected] [email protected]

(iii) Terms of Reference:

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

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

(iv) Complaints / request received from Shareholders during the period 1st April 2011 to 31st March 2012 and its status:

During the year 7 Complaints were received from the shareholders and all of which were resolved to the satisfaction of shareholders. No Complaint was pending at the end of the year. Break-up of requests / complaints received during the year are as under:

Sr. No

Nature of ComplaintsOpening Balance

Received ResolvedClosing Balance

1. Non-receipt of Certificate 0 0 0 02. Non-receipt of Dividend 0 4 4 03. Non-receipt of Demat credit 0 1 1 04. Non-receipt of rejected Demat Request Form 0 0 0 0

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

TOTAL 0 7 7 0

(D) Other Functional Committees

Besides the above-referred Committees, the Company has also the following committees of Directors:

1. ESOP Committee (Compensation Committee) of Directors that is administering and implementing the Employee Stock Option Scheme and allotment of shares on preferential basis.

2. Finance and Administrative Committee.

4. SUBSIDIARY COMPANIES:

1. The Company has two Indian subsidiaries viz. EMCO Power Limited and EMCO Renewable Energy Limited (Formerly known as EMCO Power Infrastructure Limited) and one Foreign Subsidiary EMCO Overseas Pte Limited (Singapore).

2. The Company also has two steps down Indian subsidiaries through its wholly owned subsidiary EMCO Power Limited viz. East West Power Generation Company Limited and EMCO Infrastructure Limited which are not “material non-listed Indian Subsidiary and two foreign step down subsidiary through EMCO Overseas Pte Limited (Singapore) viz. EMCO Edison Transformers Pty Ltd (South Africa) and PT Setenco Investa Niaga (Indonesia).

3. The Audit Committee of the Company reviews, periodically the financial statements made by its subsidiary companies.

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



5. DISCLOSURES:

(a) Disclosure on Related Party Transactions:

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

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

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

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

The provisions relating to Whistle Blower Policy being non-mandatory in nature, have not been adopted by the Company. However, no personnel of the Company have been denied access to the Audit Committee on any issue.

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

The Company has complied with all the mandatory requirements as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges. The Chairman of the Audit Committee Mr. T.N.V. Ayyar, was present at the 46th Annual General Meeting, and replied to the shareholder’s queries. Further the Company has adopted non-mandatory requirement of Clause 49 of the listing agreement relating to constitution of the Remuneration Committee of Directors, details of which have already been given in earlier para of this report.

(e) Board Disclosures- Risk Management:

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

(f) Proceeds from public issues, right issues, preferential issues etc:

During the year the Company has not raised fund from Public issue, rights issue, preferential issue etc.

6. GENERAL BODY MEETINGS

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

AGM Year Day & Date Time Special Resolution passed

44th 2008-09 Tuesday, 25th August 2009 11.30 a.m. No Special Resolution was passed at this meeting.

45th 2009-10 Wednesday, 25th August 2010 11.30 a.m. No Special Resolution was passed at this meeting.

46th 2010-11 Tuesday, 20th September 2011 11.30 a.m. Yes: for approval of (1) terms of re-appointment and Remuneration to be paid to Mr. Rajesh S Jain and Mr. Shailesh S Jain (2) Alteration of terms of appointment of Mr. Ajay Kumar Dhagat.

No resolution was passed through postal ballot last year.

At the ensuing Annual General Meeting, there are no Special Resolutions for which Clause 49 of the Listing Agreement or Section 192A of the Companies Act, 1956 has recommended / mandated postal ballot.


7. MEANS OF COMMUNICATION

1. The quarterly, half-yearly and annual financial results of the Company are sent to the Stock Exchanges immediately after they are approved by the Board of Directors. The results were published in the newspaper ‘Business Standard’ and ‘Lokmat’- Jalgaon Edition and are also posted on Company’s website www.emcoindia.com. They are also uploaded on Corporate Filing and Dissemination System website www.corpfiling.co.in. The Annual report is also posted to all shareholders.

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

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

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

8. GENERAL SHAREHOLDERS’ INFORMATION

(a) Appointment/Re-appointment of Directors:

Pursuant to section 257 of the Companies Act, 1956 Mr. Sanjay Bhatnagar was appointed as Non-executive Director at the Annual General Meeting held on 20th September 2011.

Pursuant to section 269 and other applicable provisions of the Companies Act, 1956 Mr. Rajesh S Jain and Mr. Shailesh S Jain were reappointed as Whole Time Director designated as Chairman and Vice Chairman respectively.

Further pursuant to section 256 of the Companies Act, 1956 Mr. K N Shenoy and Mr. T N V Ayyar retire by rotation and being eligible, offer themselves for re-appointment.

The brief profiles of all the above Directors are given in the Notice convening Annual General Meeting in this Annual Report.

(b) Particulars of ensuing Annual General Meeting:

Venue N-104, MIDC Area, Jalgaon-4250003

Time 11.30 A.M.

Day Friday

Date 21st September 2012

Financial Year ended 31st March 2012

Book Closure Dates 10th -21st September 2012

Dividend Payment Date On or before October 1st 2012

(c) Financial calendar (tentative):

Annual General Meeting 21st September 2012

1st Quarter Results for quarter ending 30th June 2012

Before 15th August 2012

2nd Quarter Results for quarter ending 30th September 2012

Before 15th November 2012

3rd Quarter Results for quarter ending 31st December 2012

Before 15th February 2013

4th Quarter Results for quarter ending 31st March 2013

By 15th May 2013 (if unaudited) or by 30th May 2013 (if audited)



(d) Stock Exchanges where shares are listed:

Name and address of the stock exchange Stock Code/SymbolBombay Stock Exchange Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai- 400 001

504008

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

EMCO

ISIN No.: INE078A01026

The Company has issued Non Convertible Debentures on Private Placement basis which are listed on Bombay Stock Exchange Ltd.

Code No 946054

ISIN No.: INE078A07015 (Debentures)

(e) Status of Listing Fees:

The Company has paid Listing fees to Bombay Stock Exchange Limited and National Stock Exchange of India Limited within the prescribed time limit. It has also paid within prescribed time limit, the Custodian Fees payable to NSDL and CDSL.

(f) Stock Market data:

(i) Monthly high and low quotations of the Company’s shares on BSE during the financial year 2011-2012 are as follows.

Month BSE Monthly Price (`)High Low

April, 2011 69.85 64.80

May, 2011 67.55 58.05

June, 2011 57.60 47.65

July, 2011 54.00 49.35

August, 2011 51.65 38.50

September, 2011 54.20 45.15

October, 2011 53.70 49.60

November, 2011 48.55 34.35

December, 2011 35.80 28.50

January, 2012 35.85 27.55

February, 2012 41.70 31.75

March , 2012 35.25 28.80

(Source: www.bseindia.com)


(ii) Monthly high and low quotations of the Company’s shares on NSE during the financial year 2011-2012 are as follows.

Month NSE Monthly Price (`)

High Low

April, 2011 70.00 65.05

May, 2011 67.40 57.90

June, 2011 57.40 47.65

July, 2011 54.20 49.20

August, 2011 51.70 38.25

September, 2011 54.35 45.45

October, 2011 53.75 49.55

November, 2011 48.75 34.30

December, 2011 35.95 28.40

January, 2012 35.80 27.55

February, 2012 41.65 31.80

March , 2012 35.30 28.90

(Source: www.nseindia.com)

20000

18000

16000

14000

12000

10000

SEN

SEX

8000

6000

4000

2000

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

MONTHS

SENSEXShare Price

CLO

SIN

G S

HA

RE

PR

ICE

Performance of EMCO Shares on BSE

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

0

80

70

60

50

40

30

20

10

0

(Source: www.bseindia.com)



10000

9000

8000

7000

6000

5000

NIF

TY

4000

3000

2000

1000

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

MONTHS

NIFTYShare Price

CLO

SIN

G S

HA

RE

PR

ICE

Performance of EMCO Shares on NSE

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

0

80

70

60

50

40

30

20

10

0

(Source: www.nseindia.com)

(g) Registrar and Transfer Agents:

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

(h) Share Transfer System:

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

(i) Distribution of Shareholding as on 31st March 2012:

RangeNumber of

Holders% to Total Holders

Shareholding (Shares)

% to Total Capital

1 - 5,000 23,532 98.23 8,926,867 13.705,001 - 10,000 218 0.91 1,654,767 2.5410,001 - 20,000 95 0.40 1,380,619 2.1220,001 - 30,000 33 0.14 793,714 1.2230,001 - 40,000 14 0.06 484,896 0.7440,001 - 50,000 6 0.03 279,974 0.4350,001 - 1,00,000 18 0.08 1,242,278 1.911,00,001 and above 41 0.17 50,373,745 77.34Total 23957 100 65,136,860 100.00


Shareholding Pattern as on 31-March-2012

24.96%

Promoters Private Corporate Bodies Indain public & Others

Mutual Fund Foreign Holdings Banks/Fl’s/Insurance

23.91%

5.47%

1.57%

43.42%

0.88%

CategoryNo. of Shares

Held Percentage of Shareholding

A Promoter’s holding1 Promoters - Indian Promoters 28,281,973 43.42 - Foreign Promoters - -2 Person acting in concert - -

Sub-Total 28,281,973 43.42B Non-Promoter’s holding

Institutional Investorsa. Mutual Funds and UTI 3,560,900 5.47b. Banks, Financial Institutions, 574,320 0.88 Insurance Companies (Central/ - - State Govt. Institutions/Non- - - government institutions) - -c. FII’s / Foreign Mutual Fund 347,869 0.53

Sub-Total 4,483,009 6.88C Othersa. Private Corporate Bodies 16,255,639 24.96b. Indian Public and HUF 15,112,250 23.20c. NRIs / OCBs 678,310 1.04d. Any other (please specify) Clearing Member 261,774 0.40 Directors and their relatives 62,975 0.10

Trust 850 0.00Sub-Total 32,371,798 49.70GRAND TOTAL 65,136,860 100.00



(j) Dematerialisation of shares:

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

99.52% of the Company’s shares have been dematerialised upto 31st March 2012. 100% of the holding of the Promoters and Promoters Group are in Dematerialised Form.

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

No GDR/ ADR are outstanding as at 31st March 2012.

No warrants are outstanding as at 31st March 2012.

(l) Plant Locations are as under:

Thane Plot No. F – 5, Road No. 28, Wagle Industrial Estate, Thane – 400 604, Maharashtra Jalgaon Unit I - N-104, MIDC Area, Jalgaon – 425 003, Maharashtra

Unit II - Gate No. 114, Umala, Taluka & District Jalgaon, MaharashtraDadra Survey no.57/2, Sanjay Industrial Estate, Building no.B-3, Gala no.1 to 8,

Wagdhara Road, Dadra 396 230 (Union Territory)Vadodara Plot No.519-521, Asoj Village, Halol Highway, Dist: Vadodara, Gujarat - 391510

(m)Address for Investor Correspondence:

Sr. No. For Shares held in Physical Form For Shares held in Demat Form

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

To respective Depository Participant

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

(n) CEO/CFO certification:

In terms of the Clause 49 of the Listing Agreement, the certification by the CEO (Vice Chairman) and CFO (Finance Head) of the Company on the financial statements and internal control relating to financial reporting has been obtained by the Board of Directors.

On behalf of the Board of Directors

For EMCO LIMITED

Sd/-Rajesh S Jain

Chairman

Mumbai 15th May 2012


AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To

The Members of Emco Limited

We have examined the compliance of conditions of Corporate Governance procedure implemented by Emco Limited for the year ended on 31st March 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.

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

In our opinion and to the best of our information and according to the explanations provided to us and the representations made by the Directors and the Management, we certify that the Company has complied with all the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We state that no investor grievance is pending against the Company as at 31st March 2012, as per the records maintained by the Shareholders’ / Investors’ Grievance Committee.

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

For P. RAJ & CO. Chartered Accountants Firm Registration No. 108310W

For CHATURVEDI & SHAHChartered Accountants

Firm Registration No. 101720W

Sd/- Sd/-P. S. Shah PartnerMembership No. 44611 Mumbai, 15th May 2012

Amit ChaturvediPartner

Membership No. 103141Mumbai, 15th May 2012


27 MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

Overview of Power Sector

Indian Power Sector is witnessing major changes. Growth of Power Sector in India since its Independence has been noteworthy. However, the demand for power has been outstripping the growth of availability. Substantial peak and energy shortages prevail in the country. This is due to inadequacies in generation, transmission & distribution as well as inefficient use of electricity.

The Economic Survey indicates that Power sector requires whopping investment in next five years to achieve the targeted capacity addition. In order to achieve the projected capacity addition of 103,300 MW and build commensurate transmission and distributions capacity investment to the tune of ̀ 11.18 lakh crores would be needed in the 12th Plan.

Power Generation Scenario in India

The total installed capacity of the country has crossed 200,000 MW with a record capacity addition of 54,964 MW in 11th Plan (about two & half times the capacity added in the 10th Plan). In fact more than 20,000 MW was added in last fiscal which was the highest for any year and is close to 21,180 MW added in whole of 10th Plan Period.

On a positive note better execution capabilities of Private Players came forth in the last plan. More than 18,000 MW of capacity was added by the Private sector, in addition to captive & renewable projects developed by these players. The working group envisages more than 40,000 MW capacity addition by private players in the 12th plan.

Power Transmission and Distribution scenario in India

With the restructuring and liberalization of power sector, advent of new regulations, open access, power exchange etc and increasing share of short term transactions and renewable generation, it has become necessary to design and operate Indian grid as a Smart National Grid. In order to facilitate optimal utilization of unevenly distributed energy resources, strengthening of regional grids through inter-State/regional system is being taking place continuously. Out of the five (5) regional grids, four (4) grids viz Northern, Western, Eastern and North-Eastern regions with capacity of about 1,33,000 MW have been synchronized with one another while the remaining Southern grid (49,000 MW) is expected to be synchronized with these grids by 2014. Total capacity of the integrated all-India grid is expected to be of the order of 300,000 MW including about 40 – 50,000 MW of renewable generation in next 5 to 6 years.

28MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

During 12th Plan about 27000 ckm of 765kV lines and 149000 MVA transformation capacity is expected to be added. This huge increase in the 765kV system is due to a number of pooling and de-pooling 765/400kV stations that have been planned to evacuate power from cluster of generation projects mainly from pit-head and coastal areas and transfer their power through long distance transmission lines up to load centers in the country. In addition to above, 400kV lines of 38000 ckm, 220kV lines of 35000 ckm and transformation capacity of 45000 MVA and 76000 MVA, respectively is estimated to be added during 12th Plan period.

The most notable and challenging issue the transmission sector is facing today is the Right of Way (ROW) and improvement of operational efficiency. In the transmission sector, IPTC is rapidly gaining popularity and this trend will increase.

In the distribution segment, the main theme will continue to be reduction of losses, automation and supervisory control remotely, which will lead the technology drive. Franchise model for distribution is evolving with modest success.

BUSINESS WISE REVIEW

Transformer Business

There has been remarkable improvement in shop-floor productivity done by this business, as margins continuing to be under pressure. This business has achieved a physical growth in MVA of 20% in Power transformer & 25% in Distribution transformer over the previous year, and is positioned as one of leading player for supply of large rating Generator transformer in the Industry. It recently bagged prestigious order from NTPC to supply 35 nos. of transformers which include 14 nos. 260MVA, 400kV, Single phase large size Generator Transformers for Mouda & Solapur Power stations.

This business has taken up a number of projects to increase efficiency of Transformers and also make them more reliable, control cost, enhance skill level of Shop-floor Emcoites and automate various processes.

Project Business

Your company has positioned itself as a leading player in transmission of power. The synergy is achieved through two SBUs within our project business – Substations SBU and Transmission Lines SBU.

Sub- Station (SBU)

This Business is executing a number of 400/220/132 kV AIS (Air Insulated Sub-station) as well as GIS (Gas Insulated Sub-station) projects for various utilities across the country.

During the year, this Business has commissioned 12 projects across the country of 400 kV / 220 kV / 132 kV Class for MSETCL, DTL, KPTCL, CSPTCL, WBSETCL, HVPNL etc.

They have also carved out their own space in the fast growing GIS business after completing the 220 kV GIS Sub- Station for MSETCL.

This business is now gearing up to enter in the 765kV market for substations as this segment is expected to grow rapidly in the coming years.

Transmission Lines (SBU)

During the financial year 2011-12 this SBU has successfully commissioned its first two lines of 765kV. It also completed its first 400kV D/C Quad Transmission Line during the year.

This SBU is presently executing 3 nos. 765 kV lines of PGCIL, 3 nos 400kV lines of RRVPNL and for a private customer, amongst other lines.

Having successfully commissioned 2 nos. 765 kV lines, this SBU has all the requisite technical Pre Qualifications to now participate in most of the tenders of all Indian utilities. It is expected that this Business will be the growth engine for your Company in the years to come.



Meter Division

This business has invested in developing smart electricity meters equipped with latest communication technology such as low power radio frequency and GSM/GPRS as well as inter-operable communications protocol such as DLM and Zigbee. They have planned to roll-out variants of these smart meters in the following years and expect to play a larger role in the energy meter market in India

International Business

International Business offers single point access to all its customers across the globe supplying transformers that meet various international standards like IEC, ANSI, DIN, SANS. Consistently meeting International quality standards, your company has exported its products and solutions to more than 45 countries including Americas, Europe, Middle east, Africa, and Asia Pacific. Your Company has an impressive international clientele that ranges from power utilities, oil and gas sector, mining, EPC contractors and Industries.

Coal Mine-Indonesia

Your company has invested in a Coal Mine in Indonesia. We are very happy to inform you that the JORC study of the mine has been completed and the total resources estimates of the coal mine is around 167 million tones. This is significantly higher than the anticipated 100 million tones, when your Company had invested in it. During the year the coal mining operation has picked up and last year they were able to ship 8,00,000 tonnes of coal. This was mostly exported to India. In the current year, the mine expects to ship more than 1 million tonne of coal.

Renewable Energy

Your Company has commissioned its 5 MW Photovoltaic Solar Power Plant at Village Fatepur in Surendranagar district of Gujarat state. This project is based on the crystalline-silicon photovoltaic technology. The plant will generate sufficient green energy, so as to avoid 7,500 MT of Carbon emission per annum.

The said project is commissioned under Solar Power Policy -2009 of the Government of Gujarat and power generated from the Project will be supplied to Gujarat Urja Vikas Nigam Limited (GUVNL) through a long term power purchase agreement of 25 years.

With the commissioning of this 5 MW Solar Power Project, EMCO has now a total installed capacity of 15.50 MW from the renewable energy sources.

Internal Control

The Company has in place effective systems for internal control ensuring accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the Company and ensuring compliance with laws and regulations. The Company has an exhaustive budgetary control system and the management regularly reviews the actual performance. The Company has also put in place a well-defined organizational structure, clear authority levels and detailed internal guidelines for conducting the business transactions.

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

Human Resource

Human Resource function at EMCO is making significant changes based on the business requirements. The focus was on optimizing and rebalancing the manpower to wholly utilize the strength and knowledge of each Emcoite.

Being innovative is the way to climb the ladder faster, hence various initiatives across functions have been taken to promote teamwork and motivate Emcoites.

A few initiatives to name are;

a. Promoting a culture of appreciation across the organization.

b. Formation of Shadow board to identify, develop and groom future leaders.

30MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

c. Continues engagement of employees in various initiatives, activities and celebrations to promote fun at work.

d. Focus on In-house training programmes on product knowledge and functional knowledge.

e. Re-inforcement of core values like Team Work and Ownership through In-house magazine “GLOW”.

f. Automate HR processes to make it Emcoite- friendly.

With the above initiatives and many more being rolled out, team EMCO is continuously working towards making EMCO a ‘Great Place To work’.

Environment and Safety:

Being a responsible corporate citizen an effective environment and safety management system exists in your Company. All manufacturing units of the company are certified with ISO 9001: 2008 for Quality Management System, ISO 14001 : 2004 for Environment Management System and BS OHSAS 18001 : 2007 for Occupational Health and Safety. The certification is accredited to UKAS & NABCB.

Your company is committed to safety at work place, which was also acknowledged by the National Safety Counsel of India (NSCI). NSCI has invited your company to participate in a prestigious international project on Safety and Health titled “Return on Prevention” (ROP).

During the year, your company has participated in “NSCI Safety Awards - 2012”. Under the manufacturing sector, the Transformer Manufacturing Unit Jalgaon has achieved continuous 430 accident free days in safety implementation and under constructional sector, for the successful execution of the turnkey project of 220kv GIS Substation for MSETCL at Bhandup by achieving Zero fatality till project execution and handover to client.

Your Company through its CSR arms EMCO Foundation has under taken the projects for the protection of environment and promoting healthcare;

CSR - Initiatives towards Corporate Social Responsibility:

Your Company has taken various initiatives towards the Corporate Social Responsibility through its extended arm EMCO Foundation. EMCO Foundation (EF) was established to promote sustainability and welfare of humanity with a vision “To transform lives through sustainable development involving stakeholders.” Since inception EF have transformed lives of more than 30,700 people through our initiatives In Education (Akshar), Environment (Ankur and Roshni) and Healthcare (Jeevan)

Environment (ANKUR, & ROSHNI):

Under our ‘Ankur’ project, with the support from Municipal Corporations, local community, school children and EMCOites we have so far planted 760 saplings in Jalgaon, Thane, Dadra and Vadodra, besides distributing seeds as a corporate gift to encourage more people participation.

Solar lamp distribution to tribal school

Under project “Roshni” with an objective to promote clean energy and support BPL families of Jalgaon and tribal areas of Wada taluka of Thane 400 solar lanterns were distributed, which benefitted more than 2000 people.

Healthcare (JEEVAN):

Every year, blood donation camps are organized under project Jeevan. And so far we have collected 1018 units of bloods with the help of well known blood banks to meet the need of people in emergencies.

Blood donation camp at Thane

Education (AKSHAR):

Keeping in mind our government’s policy of Right to education (RTE) we have designed our initiatives under “Akshar” through three pronged approaches for the under privileged poor children from slums living in Mumbai and Jalgaon, Maharashtra

Firstly, through’ “Shiksha” we cover children aged 6 to 14 years with an objective to create interest in education and reduce dropouts by impressing the parents to educate their child and send them to schools. For this EF has adopted 70 slums in Thane and beyond and 20 slums in and around Jalgaon. More than 6500 slum children have benefited in English, Arithmetic and Marathi thro special teaching methods designed by Pratham.



Shiksha classes at Thane

Secondly, our flagship program ‘Parivartan’ is benefiting Municipal School children of Thane and Jalgaon and Maharana Pratap School in Jalgaon by enhancing their soft skills, personality development and English Speaking capabilities. This project has benefited so far 12422 students of 8th, 9th and 10th Std. and this number is increasing every year.

Parivartan convocation at Thane

Lastly under “Yashasvi” these well groomed children from municipal schools are given the required financial support to continue their studies up to graduation through reward and scholarships, and so far 212 scholars have been supported. First set of Yashasvi graduates will be passing out in June’12.

Yashasvi scholarship distribution at Thane

Forward Looking Statements

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

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

On behalf of the Board of Directors

For EMCO Limited Sd/-

Rajesh S. JainChairman

Mumbai15th May 2012

AUDITORS’ REPORT

TO THE MEMBERS OF

EMCO LIMITED

1. We have audited the attached Balance Sheet of Emco Limited as at 31st March 2012, the Statement of Profit and Loss and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that

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

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

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

d. In our opinion, the Balance Sheet, the Statement Profit and Loss and the Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. In our opinion, and to the best of our information and according to the explanations provided to us, the said financial statements read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

ii. in the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. in case of the Cash Flow Statement, of the cash flows for the year ended on that date.







32Standalone Financial Statements


Annexure referred to the Auditors’ Report (Referred to in paragraph 3 of our report of even date)

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

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

In our opinion, the Company has not disposed off a substantial part of fixed assets during the year and going concern status of the Company is not affected.

2. The management has conducted physical verification of inventories at reasonable intervals. In respect of stocks lying with the third parties, confirmation for most of the stocks has been received.

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

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

3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a. According to the information and explanations provided to us and as per the records examined by us, as at 31st March 2012, Company has granted unsecured loans to two of its wholly owned subsidiaries covered in the register maintained under section 301 of the Companies Act, 1956. The maximum balance outstanding at any time during the year was ` 15,243.60 lakhs and the year-end balance is ` 11,964.54 lakhs.

b. In our opinion and according to the information and explanations given to us, the rate of interest, other terms and conditions of such loan are prima facie not prejudicial to the interest of the Company.

c. As per information and explanations provided to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.

4. In our opinion and according to the information and explanations provided to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventories, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls in respect of these areas.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that all the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

In our opinion and according to the information and explanations provided to us, the transactions made in pursuance of such contracts or arrangements have been made at reasonable prices having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations provided to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. In our opinion the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) and are of the opinion that prima facie the prescribed records have been made and maintained. We have however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. According to the information and explanations provided to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income-tax, Customs Duty, Wealth Tax, Service Tax, Value Added Tax, Excise Duty, Cess, Investor Education and Protection Fund and other material statutory dues during the year with the appropriate authorities. As on 31st March 2012, there are no undisputed dues payable for a period of more than six months from the date they became payable.

33 Standalone Financial Statements

As at 31st March 2012, according to the records of the Company and the information and explanations given to us, disputed dues on account of Income Tax, Sales Tax, Service Tax, Excise Duty and other material statutory taxes that have not been deposited before appropriate authorities are as under:

(All amount in ` lakhs, unless otherwise stated)

Name of Statute Nature of Dues Amount Period to which the

amount relates Forum where the dispute is pending

Sales Tax Act Levy of Sales Tax on Excise Duty on Deemed Export

18.53 1992-93 Assistant Commissioner of Sales Tax

Sales Tax Act Non Deduction of TDS on Works contract

137.51 2006-08 The Appellate Deputy Commissioner

Sales Tax Act Non Deduction of TDS on Works contract

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

Sales Tax Act Non submission of Declaration Forms

9.87 2007-08 Deputy Commissioner of Commercial Tax

Central Excise Act Additions made in Assessable Value

141.32 1996-01 Supreme Court

Central Excise Act Additions made in Assessable Value

4.69 2000-03 CESTAT

Central Excise Act Penalty Proceeding 1.51 2002-05 CESTATCentral Excise Act Interest on Differential Duty 15.94 2004-09 High CourtCentral Excise Act Additions made in

Assessable Value3.14 2008-09 CESTAT

Central Excise Act Interest on Differential Duty 5.73 2009-10 CESTATService Tax Service Tax on Erection &

Commissioning and Penalty thereon

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

Service Tax Disallowance of Input Service Credit

12.02 2006-09 CESTAT

Service Tax Service Tax on Testing Charges

5.86 2010-11 Commissioner (Appeals), Central Excise and Customs

Income Tax Act Disallowance of Expenses 0.73 2006-07 Commissioner of Income Tax-(Appeal)

Income Tax Act Disallowance of Expenses 47.72 2006-07 ITAT

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses in current financial year, but had incurred cash losses in the immediately preceding financial year.

11. Based on our audit procedures and as per the information and explanations provided by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to any financial institution or bank or to debenture holders as at the Balance Sheet date.

12. Based on our audit procedures and according to the information and explanations provided to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

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

16. The Company has raised term loans during the year. According to the information and explanations provided to us and the records examined by us, we are of opinion that the term loans outstanding at the beginning of the year and those raised during the year have been applied by the Company for the purpose for which they were obtained.

17. According to the information and explanations provided to us and on an overall examination of the balance sheet and cash flow statement of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.



18. According to the information and explanations provided to us and on the basis of records examined by us, during the year Company has not made a preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations provided to us and the records examined by us, the Company has created security and charge in respect of debentures issued.

20. The Company has not raised any money through a public issue during the year.

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








Balance Sheet as at 31st March 2012

(All amount in ` lakhs, unless otherwise stated) Note 2012 2011

I. EQUITY AND LIABILITIES SHAREHOLDERS’ FUNDS Share Capital 2 1,302.74 1,302.74 Reserves and Surplus 3 55,017.75 54,353.23

56,320.49 55,655.97 NON-CURRENT LIABILITIES Long Term Borrowings 4 5,666.73 4,869.60 Deferred Tax Liability (net) 5 474.45 365.91 Long Term Provisions 6 132.73 147.88

6,273.91 5,383.39 CURRENT LIABILITIES Short Term Borrowings 7 34,434.36 28,727.23 Trade Payables 8 37,183.50 32,061.80 Other Current Liabilities 9 8,859.84 16,271.94 Short Term Provisions 10 1,118.08 776.06

81,595.78 77,837.03 1,44,190.18 1,38,876.39

II. ASSETS NON-CURRENT ASSETS Fixed Assets Tangible Assets 11 28,277.13 22,042.39 Intangible Assets 11 1,005.93 206.18 Capital Work-in-Progress 403.55 691.20 Intangible Assets Under Development 188.19 1,005.06

29,874.80 23,944.83

Non Current Investments 12 961.72 961.72 Long Term Loans and Advances 13 6,185.08 2,977.71 Other Non Current Assets 14 184.79 1.74

7,331.59 3,941.17 CURRENT ASSETS Inventories 15 16,476.69 15,345.02 Trade Receivables 16 64,467.13 59,211.72 Cash and Bank Balances 17 793.69 15,539.37 Short Term Loans and Advances 18 25,246.28 20,894.28

1,06,983.79 1,10,990.39 1,44,190.18 1,38,876.39

Significant accounting policies and notes on financial statements 1 to 44

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

Sd/- Sd/- For P. RAJ & CO. For CHATURVEDI & SHAH R. S. Jain S. S. Jain Chartered Accountants Chartered Accountants Chairman Vice Chairman Firm Registration No. 108310W Firm Registration No. 101720W

Sd/- Sd/- Sd/- Sd/- P. S. Shah Amit Chaturvedi T. N. V. Ayyar Praveen Kumar Partner Partner Director Company Secretary Membership No. 44611 Membership No. 103141 Mumbai, 15th May 2012 Mumbai, 15th May 2012






Statement of Profit and Loss for the year ended 31st March 2012


INCOME

Revenue from operations (gross) 19 86,086.45 1,10,178.48

Less : Excise Duty 5,133.78 5,231.50

Revenue from operations (net) 80,952.67 1,04,946.98

Other Income 20 39.18 159.92

Total Revenue 80,991.85 1,05,106.90

EXPENDITURE

Cost of materials consumed 21 62,405.87 90,967.57

Changes in inventories of finished goods and work-in-progress 22 (1,349.18) (940.43)

Employee benefit expense 23 5,646.56 5,673.37

Other expenses 24 6,307.51 9,549.41

Finance costs (net) 25 5,040.26 4,543.15

Depreciation and amortisation 11 2,025.93 1,874.97

Total Expenses 80,076.95 1,11,668.04

Profit / (Loss) Before Tax 914.90 (6,561.14)

Tax expense

Current Tax 183.05 -

Deferred Tax 108.55 (2,114.57)

Earlier Years Tax - (23.30)

MAT Credit Entitlement (183.05) -

Profit / (Loss) for the year 806.35 (4,423.27)

Basic and diluted earnings per share in ` on share of ` 2 fully paid up 30 1.24 (7.05)



Cash Flow Statement for the year ended 31st March 2012

(All amount in ` lakhs, unless otherwise stated) 2012 2011

A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax 914.90 (6,561.14)Adjustments for Depreciation and Amortisation 2,025.93 1,874.97 Interest Expenses (net) 5,040.26 4,543.15 Sundry Balance Written Off (net) (526.16) 205.29 Provision for liquidated damages 300.00 - Employee stock compensation expense 9.57 - (Profit) / Loss on Disposal of Fixed Assets (net) 18.81 13.00 Dividend Income - (3.92) Profit on disposal of Investments (net) - (138.37)Operating Profit before Working Capital Changes 7,783.31 (67.02)Adjustments for Trade and other payables (1,471.62) 12,634.87 Trade and other receivables (8,130.29) (13,336.72) Inventory (1,131.67) (88.19)Cash generated from Operations (2,950.27) (857.06) Direct Taxes paid (510.44) (579.24)Net Cash Inflow / (Outflow) from Operating Activities (3,460.71) (1,436.30)

B. CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of Fixed Assets / Capital Work in Progress (CWIP) (7,535.47) (4,948.10) Sale proceeds of Fixed Assets 27.78 10.82 Other Bank Balances 2,368.15 (1.29) (Acquisition) / Disposal of Investments (net) - 209.71 Movement in Advance to Subsidiaries and JV’s (4,129.56) (2,194.95) Interest Income from related parties (994.55) - Dividend Received - 3.92 Net Cash inflow / (outflow) from Investing Activities (10,263.65) (6,919.89)

C. CASH FLOW FROM FINANCING ACTIVITIES Increase in Share Capital (including premium) - 1,492.65 Increase / (Decrease) in Secured Loans 6,505.30 10,188.41 Interest Expense (net) (5,007.17) (4,523.41) Dividend paid during the year including Dividend Tax (151.30) (1,007.61)Net Cash inflow / (outflow) from Financing Activities 1,346.83 6,150.04

Net increase in Cash and Cash Equivalents (12,377.53) (2,206.15)Cash and Cash Equivalents at the beginning of the year (Refer Note 17) 12,843.46 15,049.61 Cash and Cash Equivalents at the end of the year (Refer Note 17) 465.93 12,843.46





Notes to Financial Statements as at 31st March 2012


39 Standalone Financial Statements 2011-12


1. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 1956. The significant accounting policies are as follows

A. Basis of Accounting

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

B. Use of Estimates

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

C. Fixed Assets / Capital Work in Progress

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

D. Depreciation / Amortisation

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of the Companies Act, 1956, as under:

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, except following assets which are depreciated over period of its estimated useful life:

Asset Estimated Useful LifePorta cabin 5 yearsForm box 5 yearsTemplates 5 years

b. The Company provides 100% depreciation on fixed assets with value less than or equal to ` 0.05 lakhs as per the provisions of Schedule XIV of the Companies Act 1956.

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

II. Intangible Assets

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

b. Deferred Revenue Expenditure is written off in the year of expenditure.

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

E. Investments

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

F. Valuation of Inventories

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

G. Revenue Recognition

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

II. Revenue from long term contracts are recognized on the percentage of completion method, in proportion that the contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. Contract revenue

Notes to Financial Statements as at 31st March 2012Notes to Financial Statements as at 31st March 2012

earned in excess of billing has been reflected under “Other Current Assets” and billing in excess of contract revenue has been reflected under “Current Liabilities” in the balance sheet. Full provision is made for any loss in the year in which it is first foreseen.

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

H. Foreign Exchange Transactions

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

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

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

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

I. Derivative instruments (Commodity derivatives)

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

J. Export Obligations / Entitlements / Incentives

Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

K. Employee Benefits

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

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

L. Operating Lease

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

M. Stock Based Compensation

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

N. Taxation

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

b. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws





that have been enacted as on the Balance Sheet Date.

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

O. Impairment of Assets

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

P. Borrowing Costs

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

Q. Provisions for contingencies

A provision is recognised when:

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

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

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

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

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

R. Research and Development

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

2. SHARE CAPITAL

(All amount in ` lakhs, unless otherwise stated)2012 2011

Authorised

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

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

2,000.00 2,000.00 Issued, Subscribed and Paid up

6,51,36,860 (6,51,36,860) Equity Shares of ` 2 each 1,302.74 1,302.74

1,302.74 1,302.74

(Of the above 61,00,000 Shares represent shares which were issued as fully paid up to shareholders of the erstwhile India Energy Investments Private Limited on its amalgamation with the Company for consideration other than cash.)

a) Reconciliation of the number of shares outstanding is set out below

As at 31st March 2012 As at 31st March 2011 No. of Shares Amount No. of Shares Amount

At the beginning of the year 6,51,36,860 1,302.74 6,19,26,860 1,238.54 Issued during the year - - 32,10,000 64.20 Outstanding at the end of the year 6,51,36,860 1,302.74 6,51,36,860 1,302.74



b) Details of shareholders holding more than 5% shares

Name of the shareholder As at 31st March, 2012 As at 31st March,2011No. of Shares % held No. of Shares % held

Rajesh S. Jain 95,99,345 14.74 95,99,345 14.74 Shailesh Jain 62,99,340 9.67 62,99,340 9.67 EMCO Investments Private Limited* 59,16,833 9.08 35,92,310 5.52 Ratna Jain 43,54,255 6.68 43,54,255 6.68 ICICI Prudential Life Insurance Company Limited 41,55,995 6.38 41,55,995 6.38 Reliance Capital Trustee Co. Limited A/C Reliance Diversified Power Sector Fund 33,65,855 5.17 33,65,855 5.17

* Formerly known as Purna Properties Investment Private Limited

c) Money received against Share Warrants


As per last Balance Sheet - 497.55 Add: Money Received - 1,492.65

- 1,990.20 Less: Subscription of fully paid shares against warrant - 1,990.20

- -

In the Extra Ordinary General Meeting of the Members of the Company held on 22nd June 2009, the members had approved the issuance of warrants to the Promoter / Promoter Group, entitling the warrant holders to apply from time to time for equity shares of the company in one or more tranches on preferential basis not exceeding 63,00,000 fully paid-up equity shares of the face value of ` 2 each. During the year, One of the Promoter has applied for conversion of balance Nil (32,10,000) warrants applied in previous year into equivalent number of equity shares and the company has allotted Nil (32,10,000) equity shares to One of the Promoter @ ` Nil (` 62) per shares (including premium of ` Nil (` 60) per share).

d) Employee Stock Option Scheme (ESOS)

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

Particulars of Options

Price for Shares

` Particulars

Outstanding at the

beginning of the year

(Nos.)

Granted during the year (Nos.)

Exercised during the year (Nos.)

Lapsed During the year (Nos.)

Outstanding at the end of the year

(Nos.)

ESOP-2006 # *

Option VII 150.00 Employees 19 NIL NIL 19 NIL Option 23,700 NIL NIL 23,700 NIL

Option VIII 109.00 Employees 1 NIL NIL 1 NIL Option 500 NIL NIL 500 NIL

Option IX 63.00 Employees 1 NIL NIL 1 NIL Option 5,000 NIL NIL 5,000 NIL

Option X 62.25 Employees 1 NIL NIL 1 NIL Option 10,000 NIL NIL 10,000 NIL

Option XI 63.00 Employees 1 NIL NIL 1 NIL Option 5,000 NIL NIL 5,000 NIL

Option XII 59.49 Employees NIL 8 NIL 4 4 Option NIL 74,000 NIL 36,000 38,000

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

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




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


Price for Shares

` Particulars

Outstanding at the

beginning of the year

(Nos.)





(Nos.)

ESOP-2011 ## *

Option I 56.16

Employees NIL 2 NIL NIL 2 Option NIL 45,000 NIL NIL 45,000

62.40 Employees NIL 19 NIL 11 8 Option NIL 10,40,000 NIL 6,50,000 3,90,000

Option II 49.50

Employees NIL 2 NIL 1 1 Option NIL 1,50,000 NIL 75,000 75,000

44.55 Employees NIL 1 NIL NIL 1 Option NIL 40,000 NIL NIL 40,000

Option III 52.05 Employees NIL 1 NIL NIL 1 Option NIL 75,000 NIL NIL 75,000

Option IV 51.05 Employees NIL 1 NIL NIL 1 Option NIL 40,000 NIL NIL 40,000

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


3. RESERVES AND SURPLUS


Capital Reserve

As per last Balance Sheet 1,988.93 1,988.93

Capital Redemption Reserve

As per last Balance Sheet 4.50 4.50

Securities Premium Account

As per last Balance Sheet 27,661.55 25,735.55 Additions during the year - 1,926.00

27,661.55 27,661.55 Debenture Redemption Reserve

As per last Balance Sheet 834.66 834.66

Employee stock options outstanding

Gross compensation for options granted during the year 17.35 - Less : Deferred employee stock compensation 7.78 -

9.57 - General Reserve

As per last Balance Sheet 4,320.31 4,320.31

Surplus

As per last Balance Sheet 19,543.28 24,114.61 Add : Profit / (Loss) for the year 806.35 (4,423.27)Less: Approprations

Proposed Dividend (Dividend Per share ` 0.20 (` 0.20)) 130.27 130.27

Tax on Proposed Dividend 21.13 17.79 20,198.23 19,543.28 55,017.75 54,353.23



4. LONG TERM BORROWINGS(All amount in ` lakhs, unless otherwise stated)

Non Current Portions Current Maturities

2012 2011 2012 2011SECURED LOANSa) 12.50% Non Convertible Debentures 1,666.67 3,333.33 1,666.67 1,666.67 b) Vehicle Loans 3.81 27.07 23.26 22.22 c) Term Loans from Banks i) Rupee Loan 646.80 1,509.20 862.40 862.40 ii) Foreign currency Loan 3,349.45 - - -

5,666.73 4,869.60 2,552.33 2,551.29 Amount disclosed under ‘Other Current Liabilities’ (Refer Note 9) - - (2,552.33) (2,551.29)

5,666.73 4,869.60 - -

TERMS OF SECURED LOANa. 500 (500) - 12.50% Non Convertible Debentures (NCD) of ` 6.67 lakhs (` 10.00 lakhs) each are secured on first charge

(pari passu) by way of mortgage on building situated at MIDC-Thane, Umala-Jalgaon and on land and building situated at MIDC-Jalgaon and hypothecation on plant and machinery, furniture, electrical and other installations, office equipments & air conditioners situated at MIDC-Thane, MIDC-Jalgaon, Umala-Jalgaon and Dadra.

b. Vehicle Loans are secured by way of charge of respective vehicles financed.

c. Term loan from banks referred in (c) (i) above loan amounting to ` 1,509.20 lakhs (` 2,371.60 lakhs) is secured by exclusive first charge by way of mortgage on the specific land on which the windmills are installed in Maharashtra and exclusive first charge by way of hypothecation on movable fixed assets (plant, machinery equipments) pertaining to windmills.

d. Term loan from banks referred in (c) (ii) above loan amounting to ` 3,349.45 lakhs (Nil) is secured on first charge by way of mortgage on Solar Project’s all immovable properties, present and future and a first charge by way of hypothecation on project’s all movable, present and future, all book debts, operating cash flows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.

e. Maturity Profile of secured loans1-2 Years 2-3 years 3-4 years Beyond 4

years Debentures 1,666.67 - - - Vehicle Loans 3.81 - - - Term Loans from Bank 1,065.48 418.68 418.68 2,093.41

2012 20115. DEFERRED TAX LIABILITY (NET)

Deferred Tax Liability Arising on account of timing difference in - Depreciation 3,060.37 2,877.51 Deferred Tax Assets Arising on account of timing difference in - Expenses & Others (2,585.92) (2,511.60)NET DEFERRED TAX LIABILITY 474.45 365.91

6 LONG TERM PROVISIONS Provision for employee benefits a) Provision for leave benefits (Refer Note 23) 118.77 133.88 b) Provision for gratuity (Refer Note 23) 13.96 14.00

132.73 147.88





7. SHORT TERM BORROWINGSLoan repayable on demandFrom Banks Secured a) Working Capital Term Loan 2,500.00 2,500.00 b) Working Capital Demand Loan 4,902.90 13,311.87 c) Foreign Currency Demand Loan 5,059.65 2,531.57 d) Cash Credit / Packing Credit 21,971.81 10,383.79

34,434.36 28,727.23

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

b Working Capital Loans from banks referred in (b), (c) and (d) above are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as Raw Materials, Stocks-in-process, Finished Goods, Consumable Stores and Spares, Book Debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on first charge basis (pari passu) by way of registered mortgage on the Movable and Immovable Properties situated at Vadodara (Gujarat) Silvassa (UT-Dadara & Nagar Haveli) and Second Charge by way of registered mortgage on the Company’s all movable fixed assets and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon and Umala-Jalgaon.

8. TRADE PAYABLESAcceptances 19,368.97 20,197.01 Others 17,814.53 11,864.79

37,183.50 32,061.80

Disclosures required for Micro and Small Enterprises has been determined on the basis of information available with the company.1 The principal amount remaining unpaid to supplier as at the end of accounting

year 52.01 20.25 2 The interest due thereon remaining unpaid to supplier as at the end of accounting

year. 0.36 0.19 3 The amount of interest paid in terms of section 16, along with the amounts of

the payment made to the supplier beyond the appointed day during the year. NIL NIL 4 The amount of interest due and payable for the period of delay in making

payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act. NIL NIL

5 The amount of interest accrued during the year and remaining unpaid at the end of the accounting year. 0.36 0.19

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

9. OTHER CURRENT LIABILITIESCurrent Maturities of Long Term Borrowings (Refer Note 4) 2,552.33 2,551.29 Interest accrued but not due 61.81 19.75 Interest accrued and due 21.48 30.46 Statutory Liabilities 152.59 160.83 Advance received against order from customers 1,798.86 4,504.68 Billing in Excess of Contract Revenue 1,098.00 3,508.43 Unclaimed Dividends # 11.14 11.03 Security Deposits 4.52 4.52 Other Payables 3,159.11 5,480.95

8,859.84 16,271.94

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




10. SHORT TERM PROVISIONS a) Provision for gratuity(Refer note 23) 25.30 45.04 b) Provision for leave benefits (Refer Note 23) 45.10 8.30 c) Proposed Dividend (Refer Note 3) 130.27 130.27 d) Provision for tax on proposed dividend (Refer Note 3) 21.13 21.13 e) Other Provision (Refer Note 27) 896.28 571.32

1,118.08 776.06


47 TH ANNUAL REPORT 2011 -2012N

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ked

Liab

ilities

.



12. NON CURRENT INVESTMENTS

(A) TRADE INVESTMENTSInvestment in Equity Instrument (Unquoted)Investment In Subsidiary 10 (10) Ordinary Shares of SGD 1 each of EMCO Overseas Pte Limited * ** ` 282 (` 282)50,000 (50,000) Equity Shares of ` 10 each of EMCO Power Limited 5.00 5.00 (Out of the above, 6 Equity Shares are held in the name of others as nominees on behalf and ownership of the Company) 50,000 (50,000) Equity Shares of ` 10 each of EMCO Renewable Energy Limited (Formerly Known as EMCO Power Infrastructure Limited) 5.00 5.00 (Out of the above, 6 Equity Shares are held in the name of others as nominees on behalf and ownership of the Company)

(B) OTHER INVESTMENTS (i) Investment in Equity Instrument (Quoted) 3,600 (3,600) Equity Shares of ` 10 each fully paid up in Morarka Finance

Limited 0.36 0.36 (ii) Investment in Equity Instrument (Unquoted) 1,667 (1,667) Equity Shares of ` 10 each of Cozy Properties Private Limited 116.76 116.76 (iii) Investment in Preference Shares (Unquoted) 8,346 (8,346) Non-Cumulative Preference Shares of ` 10 each of Cozy

Properties Private Limited 834.60 834.60 961.72 961.72

Aggregate Amount of Quoted Investment 0.36 0.36 Aggregate Market Value of Quoted Investment 0.36 0.36 Aggregate Amount of Unquoted Investment 961.36 961.36

13. LONG-TERM LOANS AND ADVANCES(Unsecured, considered good)Capital Advances 104.31 678.50 Security Deposits 389.78 369.34 Loans and Advances to Related Parties* (Refer Note 31 ) 5,389.84 1,623.76 Prepaid Expenses 35.06 38.48 Rent Deposits 266.09 267.63

6,185.08 2,977.71

* Loans and Advances to related parties includes due from subsidiaries in which two directors of the company are directors.

Disclosure as required by Accounting Standard 19 ‘Leases’

Operating Lease

a. Building includes Commercial / Residential premises given on operating lease having original cost of ` 89.84 lakhs (` 23.44 lakhs) and accumulated depreciation of ` 24.68 lakhs (` 7.36 lakhs) as at 31st March 2012. Depreciation on the above assets for the current year is ` 1.46 lakhs ( ` 0.38 lakhs). In respect of the above arrangements, lease rent receivable are recognised in the Statement of Profit and Loss for the year and included under Other Income.

b. The Company’s significant leasing arrangements are in respect of premises taken on lease. The arrangements are generally from 1 month to 60 months. Under these agreements, generally refundable interest-free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the year and included under Rent and Compensation (Refer Note 24).

c. Minimum lease payment for non cancellable lease period


2012 2011

Not later than one year 110.87 244.54

Later than one year and not later than five years 61.37 269.77

Later than five years NIL NIL





2012 2011

14. OTHER NON CURRENT ASSETSMat Credit Entitlement 183.05 - Other 1.74 1.74

184.79 1.74

15. INVENTORIES (As taken, valued and certified by Management) Raw Materials 6,698.26 7,820.16 Work-in-progress 8,040.16 6,503.45 Finished Goods 246.78 434.31 Stock in Transit 649.58 221.75 Store, Spares and Packing Material 841.91 365.35

16,476.69 15,345.02

16. TRADE RECEIVABLES (Unsecured and considered good) Outstandings for a period exceeding six months from the date that are due for payments 15,928.30 12,006.09 Other Debts 48,538.83 47,205.63

64,467.13 59,211.72

17. CASH AND BANK BALANCES Cash and Cash Equivalents a) Balance with Banks In Current Account 91.28 170.38 In deposit accounts with original maturity less than 3 months - 9,000.00 b) Cheques, Drafts on hand 361.27 3,655.49 c) Cash on hand 13.38 17.59

465.93 12,843.46 Other Bank Balances a) Deposits with original maturity for more than 3 months less than 12 months 190.00 2,500.00 b) Deposits with original maturity for more than 12 months 8.49 183.07 c) Margin Money Deposit / Security against borrowings 118.13 1.81 d) Unclaimed Dividend Account 11.14 11.03

327.76 2,695.91 793.69 15,539.37

18. SHORT TERM LOANS AND ADVANCES (Unsecured, considered good)a) Loans and Advances to Related Parties* (Refer Note 31 ) 6,574.70 5,216.67 b) Income Tax (net of provision) 1,239.30 911.91 c) Advance to Suppliers 5,351.04 7,087.61 d) Indirect Tax Receivable 3,097.47 2,480.96 e) Earnest Money Deposits 288.14 232.11 f) Prepaid Expenses 1,862.13 2,460.32 g) Inter Corporate Deposits 819.75 750.00 h) Contract Revenue in Excess of Billing 4,114.40 1,397.73 i) Other amounts recoverable in cash or kind for value to be received. 1,899.35 356.97

25,246.28 20,894.28

* Loans and Advances to related parties includes due from Subsidiaries in which two directors of the company are directors.


Notes to Financial Statements for the year ended 31st March 2012


2012 2011

19. REVENUE FROM OPERATIONS (GROSS)(Refer Note 39)Sale of products 84,432.99 1,08,564.83 Sale of services 471.05 629.76 Other operating revenue 1,182.41 983.89

86,086.45 1,10,178.48

20. OTHER INCOME Dividend income from non current investments - 3.92 Other non operating income 39.18 17.63 Profit on disposal of investment (net) - 138.37

39.18 159.92

21. COST OF RAW MATERIAL CONSUMED (Refer Note 34)Inventory at the beginning of the year 8,041.91 9,179.43 Add : Purchases and other related expenses 61,711.80 89,830.05

69,753.71 99,009.48 Less : Inventory at the end of the year 7,347.84 8,041.91

62,405.87 90,967.57

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

Work - in - progress 8,040.16 6,503.45

Finished goods 246.78 434.31

8286.94 6937.76

Inventories at the beginning of the year

Work - in - progress 6,503.45 5,997.33

Finished goods 434.31 -

6,937.76 5,997.33

(1,349.18) (940.43)

23. EMPLOYEE BENEFIT EXPENSES Salaries and Wages 5,045.05 5,140.48

Contribution to Provident and other funds 380.52 357.07

Employee stock option scheme 9.57 -

Staff Welfare expenses 211.42 175.82

5,646.56 5,673.37

Disclosure pursuant to Accounting Standard – 15 (revised) ‘Employee Benefits’

Contribution to Defined Contribution Plans, recognised as expense for the year is as under

Employer’s Contribution to Provident Fund 215.15 159.96

Employer’s Contribution to Pension 73.03 73.65

Employer’s Contribution to E.S.I.C 26.11 23.67

Defined Benefit Plans

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





Gratuity (funded)

Leave Encashment (unfunded)

Gratuity (funded)

Leave Encashment (unfunded)

I Change in Defined Benefit obligation(D.B.O)

Opening Defined Benefit Obligation 265.68 142.18 203.53 113.71 Service cost for the Year 53.60 41.03 54.66 54.85 Interest cost for the year on opening DBO 20.42 8.09 15.54 7.09 Actuarial Losses (gains) (28.46) 45.51 22.22 22.17 Benefit Paid (39.29) (89.52) (30.27) (55.64)Closing defined benefit Obligation 271.95 147.29 265.68 142.18

II Fair Value of Plan Asset

Opening fair value of Plan Assets 203.65 NIL 186.59 NIL Expected return on Plan Assets 19.82 NIL 17.21 NIL Actuarial gains and (losses) 2.04 NIL 0.93 NIL Contribution by employer 60.43 89.52 29.19 55.64 Benefit Paid (39.29) (89.52) (30.27) (55.64)Closing balance of fair value of plan assets 246.65 NIL 203.65 NIL

III Actual Return on Plan Asset

Expected return on Plan Assets 19.82 NIL 17.21 NIL Actuarial gains and (losses) 2.04 NIL 0.93 NIL Actual Return on Plan Asset 21.86 NIL 18.14 NIL

IV Amount Recognised in Balance SheetLiability at the end of Year 271.95 147.29 265.68 142.18 Fair Value of Plan Assets at the end of the Year 246.65 NIL 203.65 NIL Difference 25.30 147.29 62.03 142.18 Unrecognised Past Service Cost NIL NIL NIL NIL Amount Recognised in Balance Sheet 25.30 147.29 62.03 142.18 Current Liability 28.52 28.52 62.03 8.30 Non Current Liability 118.77 118.77 NIL 133.88

V Amount Recognised in Income StatementCurrent Service Cost 53.60 41.03 54.66 54.85 Interest on Obligation 20.42 8.09 15.54 7.09 Expected return on Plan Assets (19.82) NIL (17.21) NIL Net actuarial losses (gains) recognized (30.50) 45.51 21.29 22.17 Expenses Recognised in Profit and Loss 23.70 94.63 74.28 84.11

VI Balance Sheet ReconciliationOpening Net Liability 62.03 142.18 16.94 113.71 Expenses as Above 23.70 94.63 74.28 84.11 Contribution to LIC/Claims Paid (60.43) (89.52) (29.19) (55.64)Amount Recognised in Balance Sheet 25.30 147.29 62.03 142.18

VII Actuarial Assumptions for the YearDiscount Rate 8.50% 8.50% 8.30% 8.30%Expected Return on plan Assets 9.25% NIL 9.25% NIL

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




General Description of significant defined plans

I Gratuity Plan Gratuity is payable to all eligible employees of the Company on death, resignation after five completed year of service, retirement or permanent disablement.

Broad Category of plan assets relating to Gratuity as a percentage of total plan assets.

Government of India Securities NIL High Quality Corporate bonds NIL Equity Shares of Listed Companies NIL Property NIL Policy of Insurance 100%

100%

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


2012 2011

24. a) OTHER EXPENSES

Stores and Packing Materials Consumed 163.14 253.78

Power and Fuel 678.52 629.95

Repair and Maintenance

Machinery 128.73 205.96

Buildings 205.20 138.24

Others 141.77 162.64

Rent and Compensation 272.76 203.19

Insurance Charges (net) 152.08 288.50

Rates and Taxes 170.22 119.82

Travelling and Conveyance 1,262.08 1,266.10

Freight (net) 122.15 322.16

Advertisement 15.21 12.74

Commission on Sales 994.63 1,827.45

Sales Promotion Expenses 193.47 244.59

Legal and Professional Fees 778.13 692.11

Auditors Remuneration 48.37 46.97

Postage, Telephone and Fax 156.50 153.96

Printing and Stationery 90.39 105.40

Vehicle Expenses 206.86 170.20

Director’s Sitting Fees 6.00 6.25




25. FINANCE COST (net)Interest CostOn Debentures 571.92 625.00 On Term Loans 216.45 304.26 On Working Capital 5,013.91 3,027.88 To Others 775.21 936.88 Other Borrowing Cost 155.42 131.30

6,732.91 5,025.32 Less:Interest from bank and others 698.10 482.17 Interest from Related Parties (Refer Note 31) 994.55 -

1,692.65 482.17 5,040.26 4,543.15

26. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF 1. a) Bank Guarantees outstanding as at the year end (gross) –(Secured) 67,058.78 70,062.51 b) Letters of Credit outstanding (net) as at the year end (Secured) 8,818.85 9,284.84 c) Guarantee for Subsidiary Company Nil 5,307.60 d) Disputed amount of Sales Tax. 230.54 93.54 e) Claim made by workmen for re-instatement, Matter Subjudice. Amount Not Ascertainable f) Disputed amount of Income Tax. 27.79 590.13 g) Disputed amount of Excise duty and Service tax. 2,869.86 2,336.80 h) Claims against Company not acknowledged as debt 151.18 153.01

2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to ` 98.87 lakhs (` 8,055.69 lakhs)


2012 2011Membership and Subscription 33.02 29.09

Bank Charges, Guarantee Commission and Other Charges 872.23 842.49

(Profit) / Loss on Disposal of Fixed Assets (net) 18.81 13.00

Warranty and After Sales Expenses 641.44 1,081.67

Donation 21.66 70.78

Miscellaneous Expenses 82.67 87.31

Staff Training and Recruitment 68.62 105.37

Security Charges 334.56 275.33

Testing Charges 39.72 44.59

Net (Gain) / Loss from foreign currency transactions and translations (768.55) 96.35

Sundry Balance Written Off (net) (526.16) 205.29

Provision for liquidated damages 300.00 -

Prior Period Expenses 4.14 0.12

Less: Recovery of Overheads from Related Parties (Refer Note 31) (600.86) (151.99)

6,307.51 9,549.41

b) PAYMENT TO AUDITORS’ (net of service tax)

Audit Fees 35.00 35.00

Tax Audit Fees 3.00 3.00

Certification and other matter 10.27 8.84

Out of pocket expenses 0.10 0.13

48.37 46.97




27. a. OTHER PROVISIONWarranty ProvisionOpening Balance 571.32 330.00Provision for the year 666.40 1,323.00Expenses during the year 641.44 1,081.68Closing Balance 596.28 571.32

Claims for Liquidated Damages against the company are recognised in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly provision of ` 300.00 lakhs has been made to meet the future probable losses on this account.

b. Trade receivable includes contractual retention amounts billed to customers of ` 22,468.62 lakhs (` 23,174.30 lakhs) Management expect to collect retentions in respect of running contracts on completion of contract. In respect of completed contract, management is confident of realising dues based on past experience and on going correspondence with the customers.

28. CHANGE IN PRESENTATION AND DISCLOSURES OF FINANCIAL STATEMENTS

During the year ended 31st March 2012, the revised schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statement. However, it has significant impact on presentation and disclosure made in financial statements. The company has also reclassified the previous year figures in accordance with the requirement applicable in current year.

29. The company has opted to avail the choice provided under paragraph 46A of AS 11: “Accounting for the effects of changes in the foreign exchange rates” as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monitory items relating to depreciable assets, is adjusted in carrying cost of depreciable assets, which would be depreciated over the balance life of assets.


2012 2011

30. EARNING PER SHAREProfit after tax as per statement of profit and loss 806.35 (4,423.27)

Weighted average number of equity shares for basic EPS 6,51,36,860 6,27,53,545

Weighted average number of equity shares for diluted EPS 6,51,36,860 6,27,53,545

Face value of equity share (` ) 2 2

Basic earnings per share (` ) 1.24 (7.05)

Diluted earnings per share (` ) 1.24 (7.05)

31. RELATED PARTY DISCLOSURE A. List of Related Parties with whom the Company had transactions

(i) Key Management Personnel and their Relatives Mr. Rajesh S. Jain

Mr. Shailesh S. Jain Mr. Ajay K. Dhagat (up to 4th November 2011) Mr. R. S. Shah (up to 19th April 2010) Ms. Meenakshi Jain Ms. Ratna S. Jain Ms. Urmila R. Shah (up to 19th April 2010)

(ii) Entities where Key Management Personnel have Significant Influence EMCO Foundation EMCO Power Quality Solutions Limited




(iii) Subsidiaries EMCO Power Limited EMCO Renewable Energy Limited EMCO Infrastructure Limited East West Power Generation Limited EMCO Overseas Pte. Limited EMCO Edison Transformer Pty. Limted PT Setenco Investa Niaga

(iv) Joint Ventures PT Vardhaman Logistics PT Vardhaman Mining Services Rabaan (s) Pte. Limited Shyam EMCO Infrastructure Limited Kalinga Energy and Power Limited PT Bina Insan Sukses Mandiri

(v) Association of Persons Arki Aviation


2012 2011 B. Transactions during the Year with Related Parties Mentioned Above

Nature of Relationship and Nature of Transactions

Key Management Personnel and their relatives Remuneration paid 118.98 79.99 Salary Paid 33.65 33.65 Rent Expense 25.63 24.80

Entities where Key Management Personnel have Significant Influence Rent Recovered 0.38 0.37 Expenses incurred and recovered 9.79 NIL Donation 20.00 63.20

Subsidiaries Business Advance given 6,425.78 2,045.02 Business Advance Received Back 2,849.36 2.05 Recovery of Overheads 600.86 151.99 Expenses Incurred 0.84 NIL Interest Recovered 994.55 NIL

Association of Person Advance Given NIL 85.03 Share of Expenses 60.47 62.29

C. Balance Outstanding at the Year-end with Related Parties mentioned above Nature of Relationship and Nature of Transactions Key Management Personnel and their relatives Deposit given 100.00 100.00

Subsidiaries Business Advance given 11,964.54 6,840.43

Association of Person Payable to AOP 30.47 31.57 Advance Given NIL NIL



D. Disclosure with respect to Related Party Transaction 1) Key Management Personnel and their relatives

a) Remuneration Paid to Key Management Personnel and their relative : ` 118.98 lakhs (` 79.99 lakhs) includes Remuneration paid to Mr. Rajesh Jain ` 47.41 lakhs (` 24.00 lakhs), Mr. Shailesh Jain ` 47.40 lakhs (` 24.00 lakhs) , Mr. Ajay Kumar Dhagat ` 18.17 lakhs (` 22.80 lakhs), Mr. R S Shah Nil (` 2.94 lakhs).

b) Salary paid to Key Management Personnel and their relative : ` 33.65 lakhs (` 33.65 lakhs) paid to Ms. Meenakshi Jain.

c) Rent Expenses paid to Key Management Personnel and their relative : ` 25.63 lakhs (` 24.80 lakhs) paid to Ms. Ratna S Jain.

2) Entities where Key Management Personnel have Significant Influence a) Rent recovered from EMCO Power Quality Solutions Private Limited : ` 0.38 lakhs (` 0.37 lakhs). b) Expenses incurred and recovered from EMCO Foundation : ` 9.79 lakhs (Nil) c) Donation given to EMCO Foundation ` 20.00 lakhs (` 63.20 lakhs)

3) Transaction with Subsidiaries a) Business Advance Given to Subsidiaries ` 6,425.78 lakhs (` 2,045.02 lakhs) includes EMCO Overseas Pte

Limited (Singapore) ` 3,690.06 lakhs (` 948.62 lakhs), EMCO Power Ltd ` 2,735.72 lakhs (` 1,094.35 lakhs), East West Power Generation Co Limited Nil (` 1.81 lakhs), EMCO Power Infrastructure Limited Nil (` 0.14 lakhs) and EMCO Infrastructures Limited Nil (` 0.10 lakhs).

b) Business Advance Received Back from EMCO Overseas Pte Limited (Singapore) ` 2,849.36 lakhs (` 2.05 lakhs)

c) Recovery of Overheads from EMCO Power Limited ` 600.86 lakhs (` 151.99 lakhs). d) Expenses incurred on behalf of Subsidiaries ` 0.84 lakhs (Nil) includes EMCO Infrastructure Limited ` 0.06

lakhs (Nil), EMCO Renewable Energy Limited ` 0.06 lakhs (Nil), East West Power Generation Co Limited ` 0.72 lakhs (Nil)

e) Interest Accrued on Loan of Subsidiaries ` 994.55 lakhs (Nil) includes EMCO Overseas Pte Limited (Singapore) ` 517.33 lakhs (Nil), EMCO Power Limited ` 477.22 lakhs (Nil).

4) Association of Person a) Advance given to Arki Aviation Nil (` 85.03 lakhs). b) Share of Flying and Maintenance Expenses to Arki Aviation ` 60.47 lakhs (` 62.29 lakhs).

32. DISCLOSURE AS PER CLAUSE 32 OF LISTING AGREEMENT Loans and Advance in the nature of loan given to subsidiary


Name of Related Party

2012 2011

Closing Balance

Maximum Balance during

the year

Closing Balance

Maximum Balance during

the year EMCO Overseas Pte. Limited* 6,574.70 9,853.68 5,216.67 5,216.67 EMCO Power Limited** 5,389.84 5,389.92 1,623.76 1,623.76

* Loans and advances shown above fall under the category of “Short term loans and advances” in the nature of loans and is repayble on demand.

** Loans and advances shown above fall under the category of “Long term loans and advances” in the nature of loans and is repayble within 5 to 7 years.

Investment by the lonee in the shares of the CompanyNone of the lonnes and lonees of subsidiary companies have, per se, made investments in shares of the Company.

33. DISCLOSURE UNDER ACCOUNTING STANDARD - 7 ‘CONSTRUCTION CONTRACTS’ (All amount in ` lakhs, unless otherwise stated)

2012 2011Contract Revenue recognised as revenue for the year ended 31st March 32,821.72 65,437.39 Aggregate amount of contract costs incurred and recognised profits (less sum of recognised losses and progress billings ) up to 31st March for all the contracts in progress as at 31st March 1,84,643.02 1,52,819.26 The amount of customer advances outstanding for contracts in progress as at 31st March 273.63 1,647.13 The amount of retentions due from customers for contracts in progress as at 31st March 18,164.12 19,146.33





2012 2011

34. a) RAW MATERIAL CONSUMED

Copper 11,960.05 10,431.46 Lamination 6,370.81 6,095.24 Steel 7,494.70 11,904.24 Other 36,580.31 62,536.63

62,405.87 90,967.57

Other Items include equipments and other miscellaneous items meant for execution of projects.

b) CONSUMPTION OF RAW MATERIALS, COMPONENTS AND SPARE PARTS AND ITS PERCENTAGE TO TOTAL

Description For the year ended as on

31st March 2012 For the year ended as on

31st March 2011 Amount Percentage Amount Percentage

Raw Materials and Components Imported 2,843.91 4.56% 6,987.46 7.68%Indigenous 59,561.96 95.44% 83,980.11 92.32%Spare Parts Indigenous 163.14 100.00% 253.78 100.00%

2012 2011

35. VALUE OF IMPORTS ON C. I. F. BASIS Raw Materials / Spare Parts 2,983.08 6,525.62 Capital Goods 5.20 1,384.90

36. EXPENDITURE IN FOREIGN CURRENCYTravelling 196.69 207.21 Professional Charges 146.13 17.34 Interest 46.16 47.30 Others (net of taxes) 275.53 574.62

37. EARNINGS IN FOREIGN CURRENCY Direct Export 2,895.01 5,075.10 Other Recovery 35.36 0.25 Deemed Exports (including Local Currency) 4,714.42 5,118.57 Interest Income 517.33 -

38. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE Forward Contract outstanding

Currency Purpose 2012 2011Sell USD Hedge of Receivables NIL 11,23,272 Buy USD Hedge of Payable 5,14,095 78,79,757 Buy EURO Hedge of Payable 10,43,945 13,18,508 Buy USD Hedge of Loan 1,00,00,000 NIL Buy GBP Hedge of Loan NIL 34,49,703



Unhedged foreign currency exposureNature of Transaction Currency 2012 2011Payable EURO 77,172 3,42,588 Payable USD 41,18,585 7,48,397 Payable GBP 3,680 3,680Payable RMB NIL 1,901Secured Loan USD 87,97,965 3,56,069 Receivable USD 10,26,126 6,68,107 Receivable EURO 1,28,159 2,66,752 Receivable RMB 925 NIL Advance to subsidiary USD 1,28,60,675 1,16,75,500Advance to subsidiary SGD 8,690 8,690


2012 2011

39. PRODUCT WISE BREAK UP OF REVENUE FROM OPERATIONS (GROSS)Transformer 50,892.74 46,352.65 Electronic Energy Meters 2,743.13 3,056.15 Projects, Towers & Structures 31,581.13 60,062.80 Others 869.45 706.88

86,086.45 1,10,178.48

40. Company has incurred total expenditure of ` 425.05 lakhs (` 42.07 lakhs) on Research and Development activities.

41. The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector

42. Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of account and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

43. The company’s normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

44. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.





Auditor’s Report on Consolidated Financial Statements

TO THE BOARD OF DIRECTORS OF

EMCO LIMITED

We have audited the attached Consolidated Balance Sheet of EMCO Limited, (the “Company”), its Subsidiaries and Joint Ventures (collectively, “the Group”) as at 31st March 2012, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The Consolidated Financial Statements include the Group’s share of Total Assets of ̀ 2,138.19 lakhs as at 31st March 2012, Profit of ` NIL and Net Cash outflows of ` 1.56 lakhs for the year ended on that date of four subsidiaries, which have been audited by P. RAJ & CO., Chartered Accountants, one of the joint auditors of the Company.

We did not audit the financial statements of two Subsidiaries and three Joint Ventures, which have been audited by other auditors and their reports have been furnished to us. The Group’s share of total assets as at 31st March 2012, Loss and Net Cash outflows for the year ended 31st March 2012 in said Subsidiaries and Joint Ventures are ` 3,431.61 lakhs, ` 1,354.31 lakhs and ` 33.16 lakhs respectively. We have placed reliance on the said reports for the purpose of our opinion on the Consolidated Financial Statements.

In addition to above, the consolidated financial statements include the financial statements of one subsidiary and three joint ventures, which we did not audit and the said financial statements are prepared on the basis of audited financial statements for the year ended 31st December 2011 and the reviewed financial statements for the quarter ended 31st March 2012. These financial statements reflect the Group’s share of total assets as at 31st March 2012, Profit and Net Cash flows for the year ended 31st March 2012 of ` 3,537.26 lakhs, ` 52.51 lakhs and ` 106.38 lakhs respectively. We have placed reliance on the said reports for the purpose of our opinion on the Consolidated Financial Statements.

1. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21, “Consolidated Financial Statements” and Accounting Standard 27 “Financial Reporting of Interest in Joint Ventures” issued by the Institute of Chartered Accountants of India on the basis of separate audited financial statements of EMCO Limited, its Subsidiaries and Joint Ventures Companies included in the Consolidated Financial Statements.

2. In our opinion and to the best of our information and according to the explanations given to us and on the basis of consideration of separate audit reports on individual audited financial statements, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Consolidated Balance Sheet, of the state of affairs of the EMCO Group as at 31st March 2012;

ii. in the case of Consolidated Statement of Profit and Loss, Loss for the year ended on that date; and

iii. in the case of Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.








Consolidated Balance Sheet as at 31st March 2012


I. EQUITY AND LIABILITIES SHAREHOLDERS’ FUNDS Share Capital 2 1,302.74 1,302.74 Reserves and Surplus 3 49,919.25 52,811.08

51,221.99 54,113.82 Share of Minority Interest (197.38) (169.02)

NON-CURRENT LIABILITIES Long Term Borrowings 4 5,675.59 8,462.82 Deferred Tax Liability (net) 5 375.11 301.93 Long Term Provisions 6 132.73 147.88

6,183.43 8,912.63

CURRENT LIABILITIES Short Term Borrowings 7 44,145.82 30,995.28 Trade Payables 8 37,267.95 32,147.31 Other Current Liabilities 9 10,487.84 17,894.97 Short Term Provisions 10 1,118.08 776.06

93,019.69 81,813.62 1,50,227.73 1,44,671.05

II. ASSETS NON-CURRENT ASSETS Fixed Assets Tangible Assets 11 28,490.32 22,119.00 Intangible Assets 11 8,972.02 7,871.55 Capital Work-in-Progress 4,378.79 1,715.86 Intangible Assets Under Development 188.19 1,005.07

42,029.32 32,711.48

Non Current Investments 12 952.38 952.31 Long Term Loans and Advances 13 3,818.68 2,936.58 Other Non Current Assets 14 189.84 3.65

4,960.90 3,892.54

CURRENT ASSETS Inventories 15 16,753.22 15,345.02 Trade Receivables 16 65,618.65 59,250.47 Cash and Bank Balances 17 990.30 15,728.73 Short Term Loans and Advances 18 19,875.34 17,742.81

1,03,237.51 1,08,067.03 1,50,227.73 1,44,671.05





60Consolidated Financial Statements


Consolidated Statement of Profit and Loss for the year ended 31st March 2012


Note 2012 2011INCOME

Revenue from operations (gross) 19 91,017.14 1,11,416.28

Less : Excise Duty 5,133.78 5,231.50

Revenue from operations (net) 85,883.36 1,06,184.78

Other Income 20 39.18 159.92

Total Revenue 85,922.54 1,06,344.70

EXPENDITURE

Cost of materials consumed 21 66,629.78 91,801.36

Changes in inventories of finished goods and work-in-progress 22 (1,349.18) (940.43)

Employee benefit expense 23 5,874.30 5,820.14

Other expenses 24 7,826.41 10,401.35

Finance costs (net) 25 6,348.45 4,910.61

Depreciation and amortisation 11 2,065.51 1,902.49

Total Expenses 87,395.27 1,13,895.52

Profit / (Loss) Before Tax (1,472.73) (7,550.82)

Tax expense

Current Tax 183.05 0.30

Deferred Tax 102.36 (2,049.33)

Earlier Years tax - (23.30)

MAT Credit Entitlement (183.05) -

Profit / (Loss) for the year before adjustment for Minority interest and Pre-acquistion profit (1,575.09) (5,478.49)

Share of Minority (16.02) (15.51)

Profit / (Loss) after Minority Interest and before Pre-acquisisition profit (1,559.07) (5,462.98)

Less: Pre-acquisition Profit/(Loss) - 375.90

Profit / (Loss) for the year (1,559.07) (5,838.88)

Basic and Diluted earnings per share in ` on share of ` 2 fully paid up 30 (2.39) (9.30)






Consolidated Cash Flow Statement for the year ended 31st March 2012

(All amount in ` lakhs, unless otherwise stated) 2012 2011

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax (1,472.73) (7,550.82)Adjustments for Depreciation and amortisation 2,065.51 1,902.49 Interest expenses (net) 6,348.45 4,910.61 Sundry Balance Written Off (net) (526.16) 205.29 Provision for liquidated damages 300.00 - Employee stock compensation expense 9.57 - (Profit) / Loss on Disposal of Fixed Assets (net) 18.81 15.35 Dividend Income - (3.92) Profit on Disposal of Investments (net) - (138.37) Impairment of Investment / Loans (26.57) 676.95 Pre-acquisition (Profit) / Loss - (375.90)Operating Profit before Working Capital Changes 6,716.88 (358.32)Adjustments for Trade and other payables (31.77) 12,551.97 Trade and other receivables (7,706.28) (7,471.42) Unrealized foreign exchange Loss / (Gain) (1,203.35) 428.05 Inventory (1,408.20) (86.56)Cash generated from Operations (3,632.72) 5,063.72 Direct Taxes paid (510.57) (627.70)Net Cash Inflow / (Outflow) from Operating Activities (4,143.29) 4,436.02

B. CASH FLOW FROM INVESTING ACTIVITIES

Acquisition of Fixed Assets / Capital Work in Progress (CWIP) (13,078.94) (5,719.74) Sale proceeds of Fixed Assets 27.78 23.05 (Acquisition) / Disposal of Investments (net) - 209.22 Acquisition of Subsidiary (net of cash and bank acquired) - (24.92) Preliminary and Pre-operative Expenses (3.14) (0.08) Other Bank Balances 2,358.77 (1.29) Dividend Received - 3.92

Net Cash inflow / (outflow) from Investing Activities (10,695.53) (5,509.84)

C. CASH FLOW FROM FINANCING ACTIVITIES Increase in Share Capital (including premium) - 1,492.65 Increase / (Decrease) in Secured Loans 3,016.69 10,084.83 Increase / (Decrease) in Un-secured Loans 5,898.75 (6,656.38) Interest Expenses (net) (6,304.98) (4,937.34) Dividend paid during the year including Dividend Tax (151.30) (1,007.61)

Net Cash inflow / (outflow) from Financing Activities 2,459.16 (1,023.85)

Net increase in Cash and Cash Equivalents (12,379.66) (2,097.67) Cash and Cash Equivalents at the beginning of the year (Refer Note 17) 13,032.82 15,130.49 Cash and Cash Equivalents at the end of the year (Refer Note 17) 653.16 13,032.82






Notes to Consolidated Financial Statements as at 31st March 2012

1. SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared to comply in all material aspects with the applicable accounting principles in India, the Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 and the relevant provisions of the Companies Act, 1956. The significant accounting policies are as follows

A. Basis of Accounting

(i) The financial statements of the subsidiaries and joint ventures used in the consolidation are drawn up to the same reporting date as that of the Parent Company, i.e. year ended 31st March 2012.

(ii) The financial statements have been prepared under the historical cost convention and on the accrual basis of accounting. The accounts of the Parent Company, the Subsidiary Companies and the Joint Venture Companies have been prepared in accordance with the Accounting Standard 21 “Consolidated Financial Statements” and Accounting Standard 27 “Financial Reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India.

B. Principles of Consolidation

The consolidated financial statements include the financial statement of EMCO Limited (the “Company”), the parent Company and all its subsidiaries and Joint Ventures (collectively referred to as the “EMCO Group”)

The consolidated financial statements have been prepared on the following basis

Subsidiaries

a. The financial statements of the Subsidiary Companies have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits and losses, if any.

b. In case of foreign subsidiaries, being non-integral foreign operations, the assets and liabilities are translated at the closing rate and the revenue items are consolidated at the average rates prevailing during the year. Any exchange difference arising on consolidation is recognised in the foreign currency translation reserve.

c. The excess of cost to the Company of its investments, if any in the Subsidiary over the Company’s portion of equity of the Subsidiary is recognised in the financial statements as Goodwill which is tested for impairment, if any, at balance sheet date.

d. The excess, if any of Company’s portion of equity of the Subsidiary as at the date of its investment is treated as Capital Reserve.

e. Minority interest in the Net Assets of consolidated Subsidiary consist of

1. the amount of equity attributable to minority shareholders at the date on which investment in a Subsidiary is made; and

2. the minority shareholders’ share of movements in equity since, the date the parent Subsidiary relationship came into existence.

Joint Ventures

a. The financial statements of the Joint venture Companies have been combined using Proportionate consolidation method as stated in Accounting standard 27 “Financial Reporting of Interests in Joint Ventures”. Inter-company transactions and balances are eliminated to the extent of the company’s interest in the joint ventures. Unrealized losses are not eliminated to the extent the cost of the transferred asset cannot be recovered.

b. In case of foreign Joint ventures, being non-integral foreign operations, the assets and liabilities are translated at the closing rate and the revenue items are consolidated at the average rates prevailing during the year. Any exchange difference arising on consolidation is recognised in the foreign currency translation reserve.

c. The excess of cost to the ventures of its interest in a jointly controlled entity over its share of net assets of the jointly controlled entity, at the date on which interest in the jointly controlled entity was acquired, is recognised in the financial statements as Goodwill, which is tested for impairment , if any at balance sheet date.

d. The excess, if any of share of the jointly controlled entity’s portion of net asset as at the date on which interest in the jointly controlled entity was acquired, is treated as Capital Reserve.

e. As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the company’s separate financial statements.



Description of the EMCO Group

The Group Subsidiaries, Step Down Subsidiaries and Joint Ventures are set out below

Name of the Company Country of IncorporationProportion of ownership interest

either directly or through subsidiarySubsidiariesEMCO Power Limited India 100%EMCO Renewable Energy Limited (Formerly known as EMCO Power Infrastructure Limited) India 100%EMCO Overseas Pte Limited Singapore 100%EMCO Infrastructure Limited India 100%East West Power Generation Company Limited India 100%PT Setenco Investa Niaga * Indonesia 98.80%EMCO Edison Transformer Pty. Limited South Africa 51%Joint Ventures Through SubsidiaryShyam EMCO Infrastructure Limited India 50%Kalinga Energy and Power Limited India 50%PT Bina Insan Sukses Mandiri * Indonesia 37.36%Rabaan (S) Pte. Limited Singapore 37.35%PT Vardhaman Mining Services * Indonesia 37.35%PT Vardhaman Logistics * Indonesia 21%

*Subsidiaries and Joint Ventures have reporting accounting year ending 31st December. However, for the purpose of consolidation, the accounts for the year ended 31st March are prepared, the accounts for the reporting accounting year ended 31st December are audited and the three months period ended 31st March are reviewed by the respective auditors of Subsidiaries and Joint Ventures.

C. Use of Estimates

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

D. Fixed Assets / Capital Work in Progress

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

E. Depreciation / Amortisation

Indian Companies

I. Tangible Assets

Depreciation has been calculated in accordance with Section 205(2) (b) of The Companies Act, 1956, as under:

a. The depreciation is provided from the date the assets are put to use, on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, except following assets which are depreciated over period of its estimated useful life:

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

b. The Company provides 100% depreciation on fixed assets with value less than or equal to ` 0.05 lakhs as per the provisions of Schedule XIV of the Companies Act 1956.

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




II. Intangible Assets

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

b. Deferred Revenue Expenditure is written off in the year of expenditure.

c. Development rights (intangible assets) in respect of Coal production activities are amortised based on percentage of the total production during the year compared to the total potential reserve and expenses incurred before the start of production.

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

Foreign Companies

In case of foreign companies, depreciation on fixed assets has been provided at the rates required / permissible by the GAAPs of the respective countries and such depreciation rates are higher than the rates specified in the Schedule XIV to the Companies Act, 1956.

F. Investments

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

G. Valuation of Inventories

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

H. Revenue Recognition

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

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

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

I. Foreign Exchange Transactions

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

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

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

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

J. Derivative instruments (Commodity Derivatives)

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



K. Export Obligations / Entitlements / Incentives

Benefit / (Obligation) on account of entitlement on export or deemed export orders, to import duty-free raw materials, under the various Exim Schemes are estimated and accounted in the year in which the export / deemed export orders are executed.

L. Employee Benefits

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

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

M. Operating Lease

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

N. Stock Based Compensation

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

O. Taxation

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

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

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

P. Impairment of Assets

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

Q. Borrowing Costs

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

R. Provisions for contingencies

A provision is recognised when:

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

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

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

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

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




be incurred over the contractual warranty period.

S. Research and Development

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

2. SHARE CAPITAL


Authorised


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

2,000.00 2,000.00 Issued, Subscribed and Paid up


1,302.74 1,302.74

(Of the above 61,00,000 shares represent shares which were issued as fully paid up to shareholders of the erstwhile India Energy Investments Private Limited on its amalgamation with the Company for consideration other than cash.)

a) Reconciliation of the number of shares outstanding is set out below As at 31st March 2012 As at 31st March 2011

No. of Shares Amount No. of Shares Amount

At the beginning of the year 6,51,36,860 1,302.74 6,19,26,860 1,238.54 Issued during the year - - 32,10,000 64.20 Outstanding at the end of the year 6,51,36,860 1,302.74 6,51,36,860 1,302.74

b) Details of shareholders holding more than 5% shares

Name of the shareholder As at 31st March 2012 As at 31st March 2011No. of Shares % held No. of Shares % held

Rajesh Jain 95,99,345 14.74 95,99,345 14.74 Shailesh Jain 62,99,340 9.67 62,99,340 9.67 EMCO Investments Private Limited* 59,16,833 9.08 35,92,310 5.52 Ratna Jain 43,54,255 6.68 43,54,255 6.68 ICICI Prudential Life Insurance Company Limited 41,55,995 6.38 41,55,995 6.38 Reliance Capital Trustee Co. Limited A/C Reliance Diversified Power Sector Fund 33,65,855 5.17 33,65,855 5.17

* Formerly known as Purna Properties Investment Private Limited

c) Money received against Share Warrants 2012 2011

As per last Balance Sheet - 497.55 Add: Money Received - 1,492.65

- 1,990.20 Less: Subscription of fully paid Shares against Warrant - 1,990.20

- -

In the Extra Ordinary General Meeting of the Members of the Company held on 22nd June 2009, the members had approved



the issuance of warrants to the Promoter / Promoter Group, entitling the warrant holders to apply from time to time for equity shares of the company in one or more tranches on preferential basis not exceeding 63,00,000 fully paid-up equity shares of the face value of ` 2 each. During the year, One of Promoter has applied for conversion of balance Nil (32,10,000) warrants applied in previous year into equivalent number of equity shares and the company has allotted Nil (32,10,000) equity shares to One of Promoter @ ` Nil (` 62) per share (including premium of ` Nil (` 60) per share).

d) Employee Stock Option Scheme (ESOS)

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


Price for Shares

` Particulars

Outstanding at the beginning

of the year (Nos.)





(Nos.) ESOP-2006 # *

Option VII 150.00 Employees 19 NIL NIL 19 NIL Option 23,700 NIL NIL 23,700 NIL

Option VIII 109.00 Employees 1 NIL NIL 1 NIL Option 500 NIL NIL 500 NIL

Option IX 63.00 Employees 1 NIL NIL 1 NIL Option 5,000 NIL NIL 5,000 NIL

Option X 62.25 Employees 1 NIL NIL 1 NIL Option 10,000 NIL NIL 10,000 NIL

Option XI 63.00 Employees 1 NIL NIL 1 NIL Option 5,000 NIL NIL 5,000 NIL

Option XII 59.49 Employees NIL 8 NIL 4 4 Option NIL 74,000 NIL 36,000 38,000

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


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


Price for Shares

` Particulars

Outstanding at the beginning

of the year (Nos.)





(Nos.) ESOP-2011 ## *

Option I 56.16

Employees NIL 2 NIL NIL 2 Option NIL 45,000 NIL NIL 45,000

62.40 Employees NIL 19 NIL 11 8 Option NIL 10,40,000 NIL 6,50,000 3,90,000

Option II 49.50

Employees NIL 2 NIL 1 1 Option NIL 1,50,000 NIL 75,000 75,000

44.55 Employees NIL 1 NIL NIL 1 Option NIL 40,000 NIL NIL 40,000

Option III 52.05 Employees NIL 1 NIL NIL 1 Option NIL 75,000 NIL NIL 75,000

Option IV 51.05 Employees NIL 1 NIL NIL 1 Option NIL 40,000 NIL NIL 40,000

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





3. RESERVES AND SURPLUS(All amount in ` lakhs, unless otherwise stated)

2012 2011Capital Reserve As per last Balance Sheet 1,988.93 1,988.93

Capital Redemption Reserve As per last Balance Sheet 4.50 4.50

Securities Premium AccountAs per last Balance Sheet 27,661.55 25,735.55 Additions during the year - 1,926.00

27,661.55 27,661.55

Debenture Redemption ReserveAs per last Balance Sheet 834.66 834.66

Employee Stock Options outstandingGross compensation for options granted during the year 17.35 - Less : Deferred employee stock compensation 7.78 -

9.57 -

General ReserveAs per last Balance Sheet 4,320.31 4,320.31

Foreign Currency Translation ReserveAs per last Balance Sheet 527.79 86.72 Addition / (Deduction) during the year (1,190.93) 441.07

(663.14) 527.79 SurplusAs per last Balance Sheet 17,473.34 23,460.28Add : Profit / (Loss) for the year (1,559.07) (5,838.88)Less: ApproprationsProposed Dividend (Dividend Per share ` 0.20 (` 0.20)) 130.27 130.27 Tax on Proposed Dividend 21.13 17.79

15,762.87 17,473.34

49,919.25 52,811.08

4. LONG TERM BORROWINGS


2012 2011 2012 2011

SECURED LOANS

a) 12.50% Non Convertible Debentures 1,666.67 3,333.33 1,666.67 1,666.67

b) Vehicle Loans 3.81 27.07 23.26 23.37

c) Term Loans from Banks

i) Rupee Loan 646.80 1,509.20 862.40 862.40

ii) Foreign Currency Loan 3,349.45 2,948.67 - 1,474.33

5,666.73 7,818.27 2,552.33 4,026.77

Amount disclosed under ‘Other Current Liabilities’ (Refer Note 9) - - (2,552.33) (4,026.77)

5,666.73 7,818.27 - -





2012 2011 2012 2011

UN-SECURED LOANS

a) Long Term Borrowings from Related Parties (Refer Note 31) - 8.55 - -

b) From Others 8.86 636.00 - -

8.86 644.55 - -

5,675.59 8,462.82 - -

TERMS OF SECURED LOANS

a. 500 (500) - 12.50% Non Convertible Debentures (NCD) of ` 6.67 lakhs (` 10.00 lakhs) each are secured on first charge (pari passu) by way of mortgage on building situated at MIDC-Thane, Umala-Jalgaon and on land and building situated at MIDC-Jalgaon and hypothecation on plant & machinery, furniture, electrical & other installations, office equipments & air conditioners situated at MIDC-Thane, MIDC-Jalgaon, Umala-Jalgaon and Dadra.

b. Vehicle loans are secured by way of charge of respective vehicles financed.

c. Term loan from banks referred in (c) (i) above loan amounting to ` 1,509.20 lakhs (` 2,371.60 lakhs) is secured by exclusive first charge by way of mortgage on the specific land on which the windmills are installed in Maharashtra and exclusive first charge by way of hypothecation on movable fixed assets (plant, machinery equipments) pertaining to windmills.

d. Out of the Term loan from banks referred in (c) (ii) above loan amounting to ` 3,349.45 lakhs (Nil) is secured on first charge by way of mortgage on Solar Project’s all immovable properties, present and future and a first charge by way of hypothecation on project’s all movable, present and future, all book debts, operating cash flows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.

e. Out of the Term loan from banks referred in (c) (ii) above loan amounting to ` Nil (` 4,423.00 lakhs) is secured by

1) Pledge over the Subsidiary Company interest / shareholding in

(i) Rabaan (S) Pte. Limited,

(ii) PT Vardhaman Logistics,

(iii) PT Vardhaman Mining Services,

(iv) PT Setenco Investga Niaga and

(v) PT Bina Insan Sukses Mandiri.

Out of the above mentioned companies, the Bank would have second rank pledge of shares in PT Setenco Investga Niaga and PT Bina Insan Sukses Mandiri. However, the Bank shall have first right to appropriate proceeds of any share sale;

2) Corporate guarantee from PT Setenco Investga Niaga;

3) Singapore Law debenture on cash and receivables of the subsidiary company related to Indonesian coal mining business; and

4) Corporate guarantee by the holding company, EMCO Limited covering all obligations of the subsidiary company under the loan facility.

2012 2011

5 DEFERRED TAX LIABILITY (NET)

Deferred Tax Liability Arising on account of timing difference in - Depreciation 3,060.37 2,877.51 Deferred Tax Assets Arising on account of timing difference in - Expenses & Others (2,685.26) (2,575.58) NET DEFERRED TAX LIABILITY 375.11 301.93





2012 2011

6 LONG TERM PROVISIONS

Provision for employee benefits a) Provision for leave benefits 118.77 133.88 b) Provision for gratuity 13.96 14.00

132.73 147.88

7. SHORT TERM BORROWINGSLoan repayable on demandFrom Banks Secured

a) Working Capital Term Loan 2,500.00 2,500.00 b) Working Capital Demand Loan 4,902.91 13,311.88 c) Foreign Currency Demand Loan 5,059.65 2,531.56 d) Cash Credit / Packing Credit 21,971.80 10,383.78 e) Working Capital Foreign Currency Loan 935.54 -

35,369.90 28,727.22 Un Secured

f) Foreign Currency Demand Loan 6,650.80 - 6,650.80 -

From Others Un Secured

Short Term Borrowings from Related Parties (Refer Note 31)

913.26 394.11

Others 1,211.86 1,873.95 2,125.12 2,268.06

44,145.82 30,995.28

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

b. Working Capital Loan from banks referred in (b), (c) and (d) above are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as Raw Materials, Stocks-in-process, Finished Goods, Consumable Stores and Spares, Book Debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on first charge basis (pari passu) by way of registered mortgage on the Movable and Immovable Properties situated at Vadodara (Gujarat), Silvassa (UT-Dadara & Nagar Haveli) and Second Charge by way of registered mortgage on the Company’s all movable fixed assets and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon and Umala-Jalgaon.

c. Working Capital Loan from banks referred in (e) above are secured against First charge on all current assets of the company including hypothecation of book debts and stock present and future and is furhter secured by way of personal guarantee of the Directors.

d. Unsecured Foreign Currency Demand Loans from banks referred in (f) above is secured by the personal guarantee of a



director.


2012 2011

8 TRADE PAYABLES Acceptances 19,368.98 20,197.01 Others 17,898.97 11,950.30

37,267.95 32,147.31

9 OTHER CURRENT LIABILITIES Current Maturities of Long Term Borrwings (Refer Note 4) 2,552.33 4,026.77 Interest accrued but not due 61.81 39.40 Interest accrued and due 51.51 30.46 Statutory Liabilities 215.70 163.42 Advance received against order from customers 2,008.97 4,545.59 Billing in Excess of Contract Revenue 1,098.00 3,508.43 Unclaimed Dividends # 11.14 11.03 Security Deposits 4.52 4.52 Other Payables 4,483.86 5,565.35

10,487.84 17,894.97

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

10 SHORT TERM PROVISIONS a) Provision for gratuity 25.30 45.04 b) Provision for leave benefits 45.10 8.30 c) Proposed Dividend (Refer Note 3) 130.27 130.27 d) Provision for tax on proposed dividend (Refer Note 3) 21.13 21.13 e) Other Provision (Refer Note 27) 896.28 571.32

1,118.08 776.06


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12 NON CURRENT INVESTMENTS (A) TRADE INVESTMENTS

Investment in Equity Instrument (Unquoted)

Nil (15,00,000) Nos. of Preferred Stock of US$ 1 each of Signet Solar Inc. * *

* Nil (` 442)

20 (20) shares of Indonesian Rupaiah 5,00,000 each of PT Sanmati Natural Resources 0.56 0.49 (B) OTHER INVESTMENTS

(i) Investment in Equity Instrument (Quoted)

3,600 (3,600) Equity Shares of ` 10 each fully paid up in Morarka Finance Limited 0.36 0.36

(ii) Investment in Equity Instrument (Unquoted)

1,667 (1,667) Equity Shares of ` 10 each of Cozy Properties Private Limited 116.76 116.76

2,000 (2,000) Fully Paid-up Equity Shares of ` 10 each in Ribhoi Engineering Company Private Limited

0.10 0.10 (iii) Investment in Preference Shares (Unquoted)

8,346 (8,346) Non-Cumulative Preference Shares of ` 10 each of Cozy Properties Private Limited

834.60 834.60 952.38 952.31

Aggregate Amount of Quoted Investment 0.36 0.36 Aggregate Market Value of Quoted Investment 0.36 0.36 Aggregate Amount of Unquoted Investment 952.02 951.95

13 LONG-TERM LOANS AND ADVANCES (Unsecured, considered good) Capital Advances 3,013.15 1,608.34 Security Deposits 416.16 373.14 Loans and Advances to Related Parties (Refer Note 31) 15.66 648.99 Prepaid Expenses 35.06 38.48 Rent Deposit 266.09 267.63 Others 72.56 -

3,818.68 2,936.58

Disclosure as required by Accounting Standard 19 ‘Leases’

Operating Lease

a. Building includes Commercial / Residential premises given on operating lease having original cost of ` 89.84 lakhs (` 23.44 lakhs) and accumulated depreciation of ` 24.68 lakhs (` 7.36 lakhs) as at 31st March 2012. Depreciation on the above assets for the current year is ` 1.46 lakhs ( ` 0.38 lakhs). In respect of the above arrangements, lease rent receivable are recognised in the Statement of Profit and Loss for the year and included under Other Income.

b. The Company’s significant leasing arrangements are in respect of premises taken on lease. The arrangements are generally from 1 month to 60 months. Under these agreements, generally refundable interest-free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the year and included under Rent and Compensation (Refer Note 24).

c. Minimum lease payment for non cancellable lease period


Not later than one year 206.48 311.07 Later than one year and not later than five years 61.37 269.77 Later than five years NIL NIL





14 OTHER NON CURRENT ASSETS Mat Credit Entitlement 183.05 - Other 6.79 3.65

189.84 3.65

15 INVENTORIES (As taken, valued and certified by Management) Raw Materials 6,974.79 7,820.16 Work-in-progress 8,040.16 6,503.45 Finished Goods 246.78 434.31 Stock in Transit 649.58 221.75 Store, Spares and Packing Material 841.91 365.35

16,753.22 15,345.02

16 TRADE RECEIVABLES (Unsecured and considered good) Outstandings for a period exceeding six months from the date that are due for payments 15,928.30 12,006.09 Other Debts 49,690.35 47,244.38

65,618.65 59,250.47

17 CASH AND BANK BALANCES Cash and Cash Equivalents a) Balance with Banks In Current Account 276.26 272.28 In deposit accounts with original maturity less than 3 months - 9,085.42 b) Cheques, Drafts on hand 361.27 3,655.49 c) Cash on hand 15.63 19.63

653.16 13,032.82 Other Bank Balances a) Deposits with original maturity for more than 3 months less than 12 months 194.62 2,500.00 b) Deposits with original maturity for more than 12 months 13.26 183.07 c) Margin Money Deposit / Security against borrowings 118.12 1.81 d) Unclaimed Dividend Account 11.14 11.03

337.14 2,695.91 990.30 15,728.73

18 SHORT TERM LOANS AND ADVANCES (Unsecured, considered good) a) Loans and Advances to Related Parties (Refer Note 31) 702.25 1,386.28 b) Income Tax (net of provision) 1,239.17 911.65 c) Advance to Suppliers 5,445.26 7,234.76 d) Indirect Tax Receivable 3,109.66 2,493.05 e) Earnest Money Deposits 288.14 232.11 f) Prepaid Expenses 1,878.28 2,472.98 g) Inter Corporate Deposits 819.75 750.00 h) Contract Revenue in Excess of Billing 4,114.40 1,397.73 i) Other amounts recoverable in cash or kind for value to be received. 2,278.43 864.25

19,875.34 17,742.81


Notes to Consolidated Financial Statements for the year ended 31st March 2012


2012 2011

19. REVENUE FROM OPERATIONS (GROSS)

(Refer Note 33)

Sale of products 89,363.68 109,802.63

Sale of services 471.05 629.76

Other operating revenue 1,182.41 983.89

91,017.14 111,416.28

20. OTHER INCOME

Dividend income from non current investments - 3.92

Other non operating income 39.18 17.63

Profit on disposal of investment (net) - 138.37

39.18 159.92

21. COST OF RAW MATERIAL CONSUMED

Inventory at the beginning of the year 8,041.91 9,179.43

Add : Purchases and other related expenses 66,212.24 90,663.84

74,254.15 99,843.27

Less : Inventory at the end of the year 7,624.37 8,041.91

66,629.78 91,801.36

22. CHANGE IN INVENTORY OF FINISHED GOODS AND WORK IN PROGRESS

Inventories at the end of the year

Work - in - progress 8,040.16 6,503.45

Finished goods 246.78 434.31

8,286.94 6,937.76

Inventories at the beginning of the year

Work - in - progress 6,503.45 5,997.33

Finished goods 434.31 -

6,937.76 5,997.33

(1,349.18) (940.43)

23. EMPLOYEE BENEFIT EXPENSES

Salaries and Wages 5,190.50 5,264.65

Contribution to Provident and other funds 380.52 357.07

Employee stock option scheme 9.57 -

Staff Welfare expenses 293.71 198.42

5,874.30 5,820.14





24. OTHER EXPENSESStores and Packing Materials Consumed 163.14 253.78 Power and Fuel 680.92 631.72 Repair and Maintenance Machinery 128.73 205.96 Buildings 206.57 138.92 Others 142.65 162.99 Rent and Compensation 301.52 230.27 Insurance Charges (net) 152.57 289.20 Rates and Taxes 198.06 119.86 Travelling and Conveyance 1,317.02 1,293.40 Freight (net) 134.65 327.87 Advertisement 15.42 15.85 Commission on Sales 1,031.96 1,863.29 Sales Promotion Expenses 192.14 251.47 Legal and Professional Fees 1,119.88 757.47 Auditors Remuneration 53.22 52.35 Postage, Telephone and Fax 165.59 160.26 Printing and Stationery 93.10 106.72 Vehicle Expenses 216.83 177.77 Director’s Sitting Fees 24.05 38.64 Membership and Subscription 33.89 30.22 Bank Charges, Guarantee Commission and Other Charges 1,044.64 846.46 (Profit) / Loss on Disposal of Fixed Assets (net) 18.81 15.35 Warranty and After Sales Expenses 641.44 1,095.32 Donation 21.84 71.01 Miscellaneous Expenses 137.51 112.03 Staff Training and Recruitment 64.10 122.12 Security Charges 332.98 276.80 Testing Charges 39.72 44.59 Net (Gain) / Loss from foreign currency transactions and translations (594.16) (134.12)Sundry Balance Written Off (net) (526.16) 205.29 Provision for liquidated damages 300.00 - Impairment of investment / Loans (26.57) 676.95 Prior Period Expenses 0.35 (38.46)

7,826.41 10,401.35

25. FINANCE COST (net)Interest CostOn Debentures 571.92 625.00 On Term Loans 450.34 672.84 On Working Capital 5,055.75 3,027.88 To Others 813.12 936.74 Other Borrowing Cost 155.42 131.31

7,046.55 5,393.77 Less:Interest from bank and Others 698.10 483.16

698.10 483.16

6,348.45 4,910.61




26 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF1. a) Bank Guarantees outstanding as at the year end (gross) –(Secured) 67,058.78 70,062.51

b) Letters of Credit outstanding (net) as at the year end (Secured) 8,818.85 9,284.84 c) Guarantee for Subsidiary Company Nil 5,307.60 d) Guarantee by Subsidiary Company for its Holding Company Nil 4,423.00 e) Disputed amount of Sales Tax. 230.54 93.54 f) Claim made by workmen for re-instatement, Matter Subjudice. Amount Not Ascertainable g) Disputed amount of Income Tax. 27.79 590.13 h) Disputed amount of Excise duty and Service tax. 2,869.86 2,336.80

i) Claims against Company not acknowledged as debt 151.18 153.01

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to ` 1,284.83 lakhs (` 8,441.03 lakhs)

27 a. OTHER PROVISIONWarranty ProvisionOpening Balance 571.32 330.00Provision for the year 666.40 1,323.00Expenses during the year 641.44 1,081.68Closing Balance 596.28 571.32

Claims for Liquidated Damages against the company are recognised in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly provision of ` 300.00 lakhs has been made to meet the future probable losses on this account.

b. Trade receivable includes contractual retention amounts billed to customers of ` 22,468.62 lakhs (` 23,174.30 lakhs). Management expect to collect retentions in respect of running contracts on completion of contract. In respect of completed contract, management is confident of realising dues based on past experience and on going correspondence with the customers.

28 CHANGE IN PRESENTATION AND DISCLOSURES OF FINANCIAL STATEMENTSDuring the year ended 31st March 2012, the revised schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statement. However, it has significant impact on presentation and disclosure made in financial statements. The company has also reclassified the previous year figures in accordance with the requirement applicable in current year.

29 The company has opted to avail the choice provided under paragraph 46A of AS 11: “Accounting for the effects of changes in the foreign exchange rates” as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monitory items relating to depreciable assets, is adjusted in carrying cost of depreciable assets, which would be depreciated over the balance life of assets.

30 EARNING PER SHAREProfit after tax as per statement of profit and loss (1,559.07) (5,838.88)Weighted average number of equity shares for basic EPS 6,51,36,860 6,27,53,545 Weighted average number of equity shares for diluted EPS 6,51,36,860 6,27,53,545 Face value of equity share (` ) 2 2

Basic earnings per share (` ) (2.39) (9.30)

Diluted earnings per share (` ) (2.39) (9.30)




31 RELATED PARTY DISCLOSURE A. List of Related Parties with whom the Company had transactions

(i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain

Mr. Shailesh S. Jain

Mr. Ajay K. Dhagat (up to 4th November 2011)

Mr. R. S. Shah (up to 19th April 2010)

Ms. Meenakshi Jain

Ms. Ratna S. Jain

Ms. Urmila R. Shah (up to 19th April 2010)

(ii) Entities where Key Management Personnel have Significant Influence

EMCO Foundation

EMCO Power Quality Solutions Limited

(iii) Joint Ventures

PT Vardhaman Logistics

PT Vardhaman Mining Services

Rabaan (s) Pte. Limited.

Shyam EMCO Infrastructure Limited

Kalinga Energy and Power Limited

PT Bina Insan Sukses Mandiri

(iv) Association of Persons

Arki Aviation


B. Transactions during the Year with Related Parties Mentioned Above Nature of Relationship and Nature of Transactions

Key Management Personnel and their relatives Remuneration paid 241.76 152.20 Salary Paid 33.65 33.65 Rent Expense 25.63 24.80

Entities where Key Management Personnel have Significant Influence Rent Recovered 0.38 0.37 Expenses incurred and recovered 9.79 NILDonation 20.00 63.20

Association of Person Advance Given NIL 85.03 Share of Expenses 60.47 62.29

Joint VenturesNet Advance Given 1,134.67 498.08




C. Balance Outstanding at the Year-end with Related Parties mentioned above Nature of Relationship and Nature of Transactions

Key Management Personnel and their relatives Deposit given 100.00 100.00

Association of Person Payable to AOP 30.47 31.57

Joint Ventures Advance Given 717.91 2,032.28

Disclosure with respect to Related Party Transaction

1) Key Management Personnel and their relatives

a) Remuneration Paid to Key Management Personnel and their relative : ` 241.76 lakhs (` 152.20 lakhs) includes Remuneration paid to Mr. Rajesh Jain ` 47.41 lakhs (` 24.00 lakhs) , Mr. Shailesh Jain ` 47.40 lakhs (` 24.00 lakhs), Mr. Harsh Vardhan Sethi ` 122.78 lakhs (` 72.21 lakhs) , Mr. Ajay Kumar Dhagat ` 18.17 lakhs (` 22.80 lakhs) , Mr. R S Shah Nil (` 2.94 lakhs).

b) Salary paid to Key Management Personnel and their relative : ` 33.65 lakhs (` 33.65 lakhs) paid to Ms. Meenakshi Jain.

c) Rent Expenses paid to Key Management Personnel and their relative : ` 25.63 lakhs (` 24.80 lakhs) paid to Ms. Ratna S Jain.

2 Entities where Key Management Personnel have Significant Influence

a) Rent recovered from EMCO Power Quality Solutions Pvt Ltd : `0.38 lakhs (`0.37 lakhs)

b) Expenses incurred and recovered from EMCO Foundation : ` 9.79 lakhs (Nil)

c) Donation given to EMCO Foundation ` 20.00 lakhs (` 63.20 lakhs)

3) Advance Given and Received back from Joint Venture

a) Advance given to Shyam EMCO Infrastructure Limited `993.98 lakhs (` 473.39 lakhs)

4) Association of person

a) Advance given to Arki Aviation Nil (`85.03 lakhs)

b) Share of Flying and Maintenance Expenses to Arki Aviation ` 60.47 lakhs (` 62.29 lakhs)

32. DISCLOSURE UNDER ACCOUNTING STANDARD - 7 ‘CONSTRUCTION CONTRACTS’

Contract Revenue recognised as revenue for the year ended 31st March 32,821.72 65,437.39

Aggregate amount of contract costs incurred and recognised profits (less sum of recognised losses and progress billings ) up to 31st March for all the contracts in progress as at 31st March 1,84,643.02 1,52,819.26

The amount of customer advances outstanding for contracts in progress as at 31st March 273.63 1,647.13

The amount of retentions due from customers for contracts in progress as at 31st March 18,164.12 19,146.33

33. PRODUCT WISE BREAK UP OF REVENUE FROM OPERATIONS (GROSS) Transformer 50,892.74 46,352.65 Electronic Energy Meters 2,743.13 3,056.15 Projects, Towers & Structures 31,581.13 60,062.81 Others 5,800.14 1,944.67

91,017.14 1,11,416.28




34. Company has incurred total expenditure of ` 425.05 lakhs (` 42.08 lakhs) on Research and Development activities.

35. The Group has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector

36. Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of accounts and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

37. The company’s normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.





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AGM Notice 201201

NOTICENOTICE is hereby given that the Forty-Seventh Annual General Meeting of the Members of EMCO Limited will be held on Friday, 21st day of September , 2012 at N-104, M.I.D.C. Area, Jalgaon – 425 003 at 11.30 A.M. to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2012, the Statement of Profit and Loss for the year ended on that date and the Report of the Board of Directors and Auditors thereon.

2. To declare Dividend on equity shares for the financial year ended 31st March 2012.

3. To appoint a Director in place of Mr. K N Shenoy, who retires by rotation and being eligible, offers himself for re-appointment.

4. To appoint a Director in place of Mr. T N V Ayyar, who retires by rotation and being eligible, offers himself for re-appointment.

5. To appoint M/s P. Raj & Co. Chartered Accountants, Mumbai and M/s Chaturvedi & Shah, Chartered Accountants, Mumbai (the retiring auditors), as Joint Statutory Auditors of the Company and to 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 section 224, 225 of the Companies Act, 1956, M/s P. Raj & Co. Chartered Accountants, registered firm of Institute of Chartered Accountants of India, having firm registration number 108310W and M/s. Chaturvedi & Shah, Chartered Accountants, registered firm of Institute of Chartered Accountants of India, having firm registration number 101720W (the retiring auditors), be and are hereby appointed as Joint Statutory Auditors of the Company, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting of the Company on a remuneration as may be decided by the Board of Directors in consultation with the Joint Statutory Auditors.

RESOLVED FURTHER THAT any one of the Directors and the Company Secretary of the Company be and are hereby severally authorized to do such other acts, deeds and things as are necessary to give effect to the above resolution.”

SPECIAL BUSINESS:

6. To consider and if thought fit, to pass with or without modifications, the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to Section 314(1B), Director’s Relatives (Office or Place of Profit) Rules, 2003 and all other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modifications and re-enactments thereof, for the time being in force) and subject to the approval of the Central Government and all such other authorities, if any required and subject to such conditions as may be prescribed by them while granting the approval as the case may be, Ms. Meenakshi Jain, be and is hereby re-appointed as President – Corporate Affairs with effect from 24th September 2012 for a period of 3 years to hold an office of profit in the Company at a remuneration upto Rs. 3,00,000/- p.m. on the terms and conditions mentioned in the draft agreement as placed before this meeting, with a liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee of the Board of Directors for the time being authorized by the Board of Directors) to alter and vary the terms and conditions of the said appointment and/or agreements, so as not to exceed the limits specified in the approval of the Central Government, and any amendments thereof, or any amendments and/or modification that may hereafter be made thereto by the Central Government or as may be agreed between the Board and Ms. Meenakshi Jain.

RESOLVED FURTHER THAT any one of the Directors and the Company Secretary be and is hereby authorized to do all such acts, deeds and things as may be necessary to give effect to this resolution.”

By order of the Board of DirectorsFor EMCO LIMITED

Sd/-Praveen Kumar

Company Secretary

Place: MumbaiDate: 15th May 2012

EMCO Limited 02

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. The instrument of proxy, in order to be effective, must be deposited at the Registered Office of the Company not later than 48 hours before the commencement of the meeting.

2. Members are requested to bring their copy of Annual Report to the meeting.

3. Members/Proxies should bring the Attendance Slip enclosed herewith duly filled in, for attending the Meeting.

4. Corporate Members intending to send their authorized representatives are requested to send a duly certified copy of the Board Resolution authorizing their representatives to attend and vote at the Annual General Meeting.

5. Members holding shares in physical mode are requested to address all correspondences, including dividend matters, quoting their Folio Number to the Company’s Registrar and Transfer Agents, M/s. Link Intime India Pvt. Limited. Members holding shares of the Company in demat form are requested to inform to their Depository Participants about any change in their address and updations of bank accounts details and not to the Company or the Registrar and Transfer Agents.

6. The Register of Members and Share Transfer Register of the Company will remain closed from 10th day of September , 2012 to 21st day of September , 2012 (both days inclusive) to decide the entitlement of shareholders for the payment of dividend. In respect of shares held in electronic form, the dividend will be paid on the basis of particulars of beneficial ownership as per the data made available by the Depositories as of the close of the business hours on 7th day of September, 2012.

7. In case of declaration of dividend the Bank Details given by the Members at the time of opening of Depository Account will be used by the Company for printing on Dividend Warrant or other convertible instruments. For the safety and interest of the Members, it is important that bank details are correctly provided to the Depository Participants. The bank mandate, if any, for shares held in physical form cannot be applied for shares held in electronic form.

8. Dividend, if declared, shall be paid/dispatched to the members of the Company on or before 1st October 2012.

9. The Company has already transferred, all unclaimed dividend declared up to the financial year ended 31st March, 1995 to the General Revenue Account of the Central Government as required by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Government) Rules, 1978. Those shareholders, who have so far not claimed or collected their dividend up to the aforesaid financial year, may claim their dividend from the Registrar of Companies, Maharashtra, Everest Bldg, Marine Lines, Mumbai 400 020, in the prescribed manner.

10. Members are requested to note that the Company has transferred the unclaimed dividend declared for the year 1995-96, 1996-97, 1997-98, 1998-99, 1999-2000, 2000-2001, 2002-2003, 2003-04 to Investors Education and Protection Fund. The unclaimed dividend for the year 2004-05 and onwards can be claimed by members by corresponding the same to Corporate office or the office of the Registrar & Transfer Agent of the Company. Members are requested to note that dividends not encashed or claimed within 7 years from the date of transfer to the Company’s unpaid dividend account will, as per Section 205A of the Companies Act, 1956, be transferred to the Investors Education and Protection Fund and no claim shall lie against the Company or the said Fund in respect of any amounts, which were unclaimed and unpaid for a period of seven years from the dates they first became due for payment and no payment shall be made in respect of any such claims.

11. Mr. K N Shenoy and Mr. T N V Ayyar, Directors, who retire by rotation at ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. A brief profile of these Directors, nature of their expertise in specific functional areas and name of the Companies in which they hold directorship and membership / chairmanship of the Board Committee as stipulated under clause 49 of the Listing Agreement with Stock Exchanges in India, is enclosed. The Board of Directors of the Company recommends their respective re- appointment.

12. This notice and Annual Report have been sent electronically to the members (other than those who has requested for physical copy) to their email address as registered with their depository participant and made available to the Company by depositories. The copy of notice and annual report each also available on company’s website-www.emcoindia.com. Members may download the same from the said website.

13. Members, who have not registered their email address so far, are requested to register the same with their DP, if shares are held in dematerialized form. Members holding shares in physical form are requested to register their email address with the Company or Share Transfer Agents, viz, M/s Link Intime India Pvt. Ltd. By quoting their folio numbers(s).

14. The relevant explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of business set out under item no. 6 of the notice is annexed hereto and forms part of this notice.

AGM Notice 201203

ITEM NO. 6

EXPLANATORY STATEMENT PURSUANT TO THE PROVISIONS OF SECTION 173(2) OF THE COMPANIES ACT, 1956

Ms. Meenakshi Jain is being re-appointed as President – Corporate Affairs of the Company to render advice and oversee the Administrative and Human Resource operations of the Company. Ms. Meenakshi Jain has around 20 years of rich experience in the field of Human Resource Management, Administration, Marketing and Business Development in India and USA. She is a Post Graduate in Manufacturing Management from New York, USA. She is actively involved in formulating policies for Administration and Human Resource Department for the Company. Further she is also be taking part in the day-to-day operations and ensure smooth functioning of these departments. She has been awarded “Women at Work Leadership Award” in 20th Global HR Excellence Awards Ceremony organised by World HRD Congress.

Pursuant to the provisions of Section 314 (2A) of the Companies Act, 1956, the Company has received a declaration in writing from Ms. Meenakshi Jain that she is related to Mr. Rajesh S Jain and Mr. Shailesh S Jain, Director(s) of the Company, being her brothers.

Accordingly, the Special Resolution as set out under Item No. 6 of the Notice is submitted to the meeting for the approval of the shareholders. The copy of the agreement proposed to be entered by the Company containing the terms and conditions are available for inspection at the Registered Office of the Company on any working day except Saturday and Sunday between 11.00 a.m. and 1.00 p.m.

In respect of this resolution Mr. Rajesh S Jain and Mr. Shailesh S Jain, Director(s) are interested and concerned being related to Ms. Meenakshi Jain as brothers.

None of the other Directors are or deemed to be concerned or interested in the resolution.

The Directors recommend this resolution for your approval.

By order of the Board of DirectorsFor EMCO LIMITED

Sd/-Praveen Kumar

Company Secretary

Place: MumbaiDate: 15th May 2012

Brief profile of Directors seeking appointment/re-appointment at the 47th Annual General Meeting (Pursuant to clause 49 of the listing agreement)

Name Mr. T N V Ayyar Mr. K N ShenoyDate of Birth 21st April 1961 26th April 1931Date of Appointment 16th November 1996 20th January 2006Qualifications B.Com, FCA BE (Electricals), Fellow Member of Institution of

Engineers and National Academy of Engineers and Business Management at IMD, Lausanne.

No. of Shares of EMCO held Nil NilExperience He has a vast experience in the field

of finance, banking, accounts, audit, taxation, project, general management and commercial matters.

He is the ex-Chairman of Asea Brown Boveri Limited (ABB) and was associated with ABB for 40 years. He is on the Board of several companies. He is also past President of CII, IEEMA & ERDA.

Other Directorship Tata Ceramics Limited Prime Global Advisory Services Pvt. Limited Creast Animation Studio Limited Apcotex Industries Limited Mandakini Estates (P) Limited

GVK Power & Infrastructure Limited GVK Energy Limited Triveni Engineering & Industries Limited Sobis Software (India) Private Limited Sobis Teksoft Private Limited Shelk Software Private Limited

Chairmanship/Membership of Committees across all Public Companies

EMCO Ltd: Audit Committee Remuneration, Nomination & Selection Committee ESOP Committee

EMCO Ltd: Audit Committee ESOP Committee

EMCO LIMITED

PROXY FORM

DP-ID Client-ID

Folio No. No. of Shares

I/We s/o, w/o, d/o residing at

being a Member(s) of the above named Company hereby appoint

Mr./Ms. residing at , or

failing him/her Mr./Ms. residing at

, as my/our proxy to vote for me/us and on my/our behalf at the Forty Seventh

Annual General Meeting of the Company to be held on 21st day of September, 2012 at 11.30 a.m. at

N-104, M. I. D. C. Area, Jalgaon – 425 003 and at any adjournment(s) thereof.

Signed this day of , 2012.

Signature (Please sign across the Stamp)

Note: This form in order to be effective should be duly stamped, completed and signed and must reach at the

ATTENDANCE SLIP

DP-ID Client-ID

Folio No. No. of Shares

I certify that I am a member/ proxy for the member of the Company. I hereby record my presence at the

Forty Sixth Annual General Meeting of the Company held on , the 21st day of September, 2012 at 11.30

a.m. at N-104, M. I. D. C. Area, Jalgaon – 425 003.

Member’s / Proxy’s name in BLOCK letters Member’s / Proxy’s Signature

Signature

Notes: Members attending the meeting in person or by proxy are requested to complete the attendance slip and hand over the same at the entrance of the meeting hall.

` 1/-

Revenue Stamp

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