DIRECTORS' REPORT Your Directors are pleased to present the sixtieth Annual Report together with the Audited financial statements of the Company for the financial year ended March 31, 2016. DIVIDEND Your Directors take pleasure in recommending a dividend of 90% (Rs. 1.80 per share) for every equity share of face value of Rs. 2/- each, for the financial year ended March 31, 2016. PERFORMANCE REVIEW SUSTAINED PERFORMANCE AND STRONG EXECUTION IN A CHALLENGING MARKET ENVIRONMENT During the year under review General Electric acquired the Alstom's global power and grid businesses. After prolonged 18 months period, the completion of the transaction on November 2, 2015 followed various regulatory/competition commission approvals of the deal in various countries and regions. During this critical period your Company made exceptional efforts to retain critical talents and resources, its valuable customers and partners in the market place. It continued to deliver customers' projects in a seamless manner, as before. While India's overall GDP growth at 7.4% was among the leading countries of the world, the growth in Industry and I nfrastructure was not adequate to create new Capex demands. Thus the Capital Goods sector, where your Company operates, witnessed a negative growth. Asset quality of public sector banks remained a concern as the Non-Performing Assets (NPAs) of the listed banks in the country surged to Rs. 4.38 trillion, as of December 2015. The key reasons being huge increase in stalled projects, sluggishness in economic growth in past years, frozen credit and over leveraged balance sheets of India's corporate sector. This rapid increase in NPAs has led to significant reduction in sectoral lending to power and infrastructure sector throughout the year. One group of Power Gencos is struggling with stranded capacities and delay due to cancellation/ subsequent auction of coal mines. The other group of Gencos is suffering due to backing down of power demand by the Discoms in the States. The State Electricity Boards and the Discoms are struggling with huge financial losses aggregating to over Rs. 4 trillion (US$ 60 billion) and are neither able to purchase power nor able to pay Gencos and equipment suppliers. This is impacting fresh investments in the State T&D sector and thereby creating T&D grid network congestion at the State level. All the above factors have led to fall in the T&D and Power equipment market size deeply impacting the market price due to demand/supply mismatch. Due to fall in market prices, your Company had to be cautious in order selection process. A part of the backlog or the order book was impacted due to stalled customer projects which resulted in fall in Revenue. Overall, your Company successfully achieved a balanced portfolio of orders, resulting in sustained leadership and improved overall performance. In addition, your Company ensured a healthy backlog of orders, equivalent of 18 - 24 months of work load. LEADING THE DIGITAL GRID JOURNEY During the year, your Company was selected to lead the Smart Grids pilot project by Himachal Pradesh State Electricity Board for Kala Amb industrial area. This will be one of the fourteen projects under the Indian Ministry of Power's flagship "Smart Grid Pilot" programme. The Kala Amb smart grid pilot project will act as a proof of concept to further strengthen the Information Technology system in place, to make the distribution grid cost-effective, responsive and better engineered for reliability and self-healing operations. Your company will be designing, implementing and integrating smart grid applications targeting power quality issues, managing peak demand, power outages and limiting violations at distribution network nodes. Your Company has already established a benchmark in field of VIRTUAL MANNING through the prestigious National Transmission Asset Management Centre (NTAMC) project by completing the phase -1 of the project consisting of 120 Extra High Voltage substations of Power Grid Corporation of India Limited (PowerGrid) from a single location i.e. at NTAMC, Manesar in Haryana. As a part of project the Company has also deployed advance automation system including SCADA, Automated Fault Analysis System, Remote Access of Protection Relay Data, and Video Surveillance at the Substations thereby effectively and efficiently managing the operation of these substations from centralized control centre. Your Company has also successfully upgraded the existing SCADA/EMS system at Southern Regional Load Dispatch Centre of PowerGrid and constituent utilities. The project includes supply, installation, testing and commissioning of 7 control centres, 25 numbers of Data Concentrators, integration of data from 258 RTUs spread across the southern regional grid of India. Meanwhile, e-terra platform software solution analyses the data to help grid operators take decisions in real-time, and enhance grid security. The SRLDC system operators are now well versed in handling real time evaluation of impact of possible contingencies on the system, dynamic planning for reliable grid operation as well as anticipate abnormalities and prevent costly shutdown of the network. strengthening the indian grid across central and state transmission network During the year, your Company has been awarded a contract worth approximately Rs. 2266 million (US$ 34 million) by PowerGrid to supply two Gas-Insulated Substations (GIS). These two substations will be located at Betul in Madhya Pradesh and Navsari in Gujarat. The first 400/220kV GIS substation constructed at Betul will transmit power generated from the Mouda Super Thermal Power Plant - II. The second installation at Navsari, will carry power generated at the Kakrapar Atomic Power Station. Both substations will feed power to the national grid. The contract scope includes design, engineering, manufacturing, installation and commissioning of the GIS at Betul including supply and erection of two 400/220/33kV, 315 MVA auto transformers The Company secured a contract from PowerGrid, for approximately Rs.1380 million (US$ 21 million) to supply transformers and reactors for the expansion of 400/220kV grid substations across southern India. The project is part of Power Grid's System Strengthening Scheme to boost power handling capacity of substations, and stabilizing the transmission infrastructure in southern India. Under this new contract, your Company will supply six units of 400/220kV, 500 MVA transformers and two units of 420kV, 125 MVA shunt reactors. Your Company also secured three new contracts worth Rs. 2317 million (US$ 35 million) from PowerGrid to supply transformers and shunt reactors for 765/400kV substation situated at Agra in Uttar Pradesh and spare units of 765kV transformers and reactors as part of Eastern and Southern Region Strengthening Schemes. The products for all these contracts will be delivered from your Company's world class factory at Vadodara in India. Once commissioned, these substations at Agra will help transmit power from the Lalitpur Thermal Power Plant to meet the growing demand for electricity in the northern region of the country. Your Company has been awarded a contract worth approximately Rs. 1088 million (US$ 16 million) by PowerGrid to supply ten 765kV 500 MVA single phase auto transformers. These will be installed at two locations, the 765kV GIS substation situated at Vemagiri, Andhra Pradesh and 765 kV Air Insulated substation (AIS) at Vindhyachal, Uttar Pradesh. All equipments will be manufactured and supplied from your Company's world class manufacturing facility at Vadodara. India's southern grid has been facing significant power shortages over the last few years due to inadequate transmission capacity from the rest of the grid. The transformers located at Vindhyachal will help transmit power from the surplus energy in the northern region to southern region. In addition, the transformers installed at Vemagiri will strengthen the transmission system of the southern grid. Your Company was also awarded orders by Power Grid for 765kV transformers and reactors for Orai and Jabalpur substations. It also won orders from Power Grid to supply 400/220kV extension AIS and GIS substations at Bongaigaon and Salakati, respectively, both situated in the state of Assam. Your Company has won three orders worth approximately Rs. 2202 million (US$ 33 million) to build two 220kV and four 132kV air insulated substations (AIS) for Bihar State Power Transmission Company Limited (BSPTCL). These substations will strengthen the transmission network at 220kV level with a potential to be further upgraded to 400kV in future. Your Company will construct the 220/132/33 kV turnkey substations as well as the two units of associated 132 kV bay extension in Supaul. The Company will provide control and relay panel along with the SCADA system, for 16 units of 220kV bays, 39 units of 132kV bays plus 52 units of 33kV bays and other auxiliary equipment. Your Company has also secured an order from Odissa Power Transmission Company Ltd. to supply a 145kV GIS at Mancheshwar in Odisha. FIRST CHOICE OF CUSTOMERS ACROSS THE ENERGY CHAIN Your Company has been awarded once more a contract by Essar Projects India Limited worth close to Rs. 800 million (US$ 12 million) to supply transformers package for Neyveli New Thermal Power (NNTP) project located in the state of Tamil Nadu in India. The 1000 MW greenfield NNTP project, being developed by Neyveli Lignite Corporation Limited, will be the first lignite-fired 2X500 MW power plant in the country and shall be the major source of power to the energy deficient southern states. Under the scope of the contract, the Company will be engaged in designing, engineering, manufacturing, testing, installation and commissioning of a set of generator transformers, inter-connecting transformers, station transformers up to 200MVA, 80 MVAR reactor along with other associated equipment. All the equipment will be engineered and manufactured in your Company's world class facilities in India. DELIVERING THE FIRST IN SERIES OF INDIA'S FIRST 'MADE IN INDIA' 800KV HVDC TRANSFORMER In 2014-15, a historical milestone was achieved with the flagoff of the first "Made in India" 800 kV HVDC convertor transformer from the world-class power transformer manufacturing facility at Vadodara, in the state of Gujarat The transformer was flagged-off by Hon'ble Chief Minister of Gujarat, Smt. Anandiben Patel, in the presence of eminent dignitaries from Power Grid, various central utilities, state utilities and private customers. In a record time, the Company successfully manufactured and delivered The convertor transformer, part of PowerGrid's 3000 MW, 800kV Champa-Kurukshetra UHVDC Phase 1 link that connects the power station of Central India near Champa to the demand centre, 1365 kms away in Northern India at Kurukshetra SETTING NEW MANUFACTURING RECORDS FROM OUR LOCALISED FOOTPRINT During the year, your company sets a new record in India with the 200th unit of the 765kV transformer and reactor manufactured from its world class transformer facility at Vadodara in Gujarat. Transformers are integral components of an electrical grid, and essential for the efficient and safe conversion of electricity between diverse voltage systems. During the year, your company achieved a new milestone by delivering 100th unit of 765kV Shunt Reactor for PowerGrid Varanasi site. The 100 MVAR reactor unit was the result of indigenous technology and technical expertise of Vadodara facility. Demonstrating a strong commitment towards "Make in India" and "One Nation One Grid", your Company delivered the 1000th 800kV Current Transformer manufactured from its unit at Hosur, Tamilnadu. This success was achieved through high quality workmanship and innate focus within the state of the art manufacturing unit at Hosur. TECHNOLOGY EVOLUTION THROUGH CUSTOMER CONNECT In December 2015, your Company organized 'Technical Days 2015' - a two day technical event on the current and future scenario of the Transmission & Distribution industry in the country. This was the 8th edition of the much awaited annual event which enhances the dialogue between technocrats across developers, customers and planners on the latest technologies and trends in the power sector enabling stakeholders to jointly work together in this sphere. This also helps your Company to understand customer's technical expectations and adapt accordingly to further strengthen Company's technical prowess. The event was attended by more than 200 customer delegates from various organizations across India. The event was inaugurated by Mr. A.K Jha, then acting Chairman and Managing Director of NTPC Limited. The Inaugural session was attended by leading State Utility CEOs/ Members who interacted with the participants on the evolution of the technical demands of their respective State T&D grid networks. This year's conference was themed 'Future Evolution of India's Transmission Grid' enabling discussions on the future Grid challenges and technologies like Forecasting & Integration of Renewable Energy in the Grid, Grid Stability Solutions - STATCOM, Life Cycle Asset Management, Smart Substation deployment, Energy Storage Solutions and Smart GIS solutions. In addition to the technical event, your Company showcased a number of technologies and innovations at ELECRAMA 2016 event, world's largest exhibition on new technologies in power transmission, distribution, smart grid and communications. At this event, the Company showcased its new extended product portfolio coming from various GE business. These include monitoring and diagnostic equipment, Distribution Automation products, Geospatial Information solutions. Apart from these, your Company showcased its latest "localised" innovations including T210-Gas insulated substation; Asset condition monitoring and asset management - MS3000 & e-terraassetcare; RPH3 controlled switching device for circuit- breakers; Smart grid solutions, Digital substations and eco-efficient green transformers. services: enhanced capabilities for managing ageing grid assets During the financial year a number of transformers of various categories and makes have been repaired in the workshop and subsequently commissioned at customer sites. This has helped the Company customers to extend the life of their transformers and save on the capital expenditure. The customers confirmed their trust on your Company by awarding repeat contracts for long term operation & maintenance of their key substations, including at key airports and a UMPP. Online condition monitoring and Asset management are increasingly being adopted by various utilities across the globe, including in India. Service business, with expertize on site services and on maintenance of Grid equipment, is the ideal vehicle to provide such solutions to Company's customers. Service business won several orders delivering 50% year-on-year growth. The growth came primarily from the brown field project activities apart from the conventional service activities. Such projects included extension, renovation and modernization (R&M) of existing substations where customers preferred to work with original equipment manufacturers having complete knowledge of the domain. Becoming part of larger GE family, brought in additional product offerings and solutions in various service offerings, including in the field of technical training and energy consulting. These services continue to grow, helping our customers to plan and maintain their networks and assets in the most optimal manner operational excellence Continuing its efforts to create differentiation through Operational Excellence, your Company has once again reached major landmarks in execution of product and project portfolio in 2015-16. During the year, your Company demonstrated its expertise in execution of turnkey projects by commissioning 40 numbers of AIS and GIS substations. The first 765kV substation of Maharashtra, MSETCL at Aurangabad was commissioned by your Company during the year. Apart from this large number of turnkey projects were also executed and commissioned for Company's major customers: Power Grid, MSETCL, WBSETCL, GETCO, APTRANSCO and Megha Infrastructure. Service business under took more than 100 major retrofit jobs of circuit breakers, disconnectors and current transformers. It also continued to execute five major Annual Maintenance Contracts including Delhi and Chennai Airport's power distribution systems. Your Company's transformer factory in Vadodara commissioned 29 units of 765kV ICT/GTs along with 28 units of 765 kV Shunt Reactors. The transformer factory at Naini delivered and commissioned more than 40 units of Transformers & Reactors to more than 20 customers. Throughout the year, your Company's automation unit at Pallavaram has commissioned more than 900 bays of new and retrofit Automation Substation systems from 33kV to 765kV. All your Company's operations in India, be it in manufacturing, projects, services and automation, continue to be certified for IMS (ISO 9000, ISO 14000 and OHSAS 1800). This reinforces the quality of the processes of the Company and compliance to the same. ENVIRONMENT HEALTH AND SAFETY The Company's Environment, Health, Safety (EHS] Department is responsible for defining environment, health and working safety policy. It is supported in its mission by the EHS managers to ensure deployment of the policy. It is part of being compliant and it is part of our operating rhythm, and fundamental to how we do work. Your Company follows "Zero Deviation Plan" to ensure its employees, suppliers and contractors, involved in contract execution has the best protection and understanding regarding safety and health. A particular attention is given to high risk activities performed by employees, suppliers or contractors during contracts execution. This plan launched in June 2012 in order to reduce the number of severe accidents from various activities had a strong effect on the reduction in the number of severe accidents. Experts from different business regularly perform audits on self-evaluation done by Site Operational and EHS Managers. During the year 2015-16, four factories and four customer sites have been audited by an independent third party. Occupational injury frequency rate remained below the target level during the year under review. No severe accident was recorded for your Company employees. Your Company has conducted EHS Connect Program with customers like Kerala State Electricity Board Limited, West Bengal State Electricity Transmission Company and PowerGrid. The Company has received appreciations from many customers such as Reliance Power, Ultra tech, Rajasthan Rajya Vidyut Prasaran Nigam Limited, Maharashtra State Electricity Transmission Company Limited, Kerala State Electricity Board Limited, Tamil Nadu Transmission Corporation Limited, M.P. Power Generating Company Limited, etc. HUMAN RESOURCES Human Resource (HR) of your Company aligns its actions with business strategy to support the organization in achieving its goals. During the year, after the completion of the acquisition process, GE ALSTOM alliance necessitated a culture founded on the GE beliefs. It was a priority action which was launched through customized New Employee Orientation (NEO) programmes. The HR team of your Company has always strived to build strong performance oriented culture. Keeping the volatility and delay of customer projects, your Company has adopted effective mix for direct recruitment as well as contract professionals. Talent Management remains the key focus area of your Company. Performance Development (PD) is one of the steps in this direction. It is an inclusive, real time process to align individual priorities with organizational vision and mission. During the year, employee relations at all the Units remained cordial. This has helped your Company to build a healthy relationship and promulgate a culture of trust and increased productivity with the employees. Your Company, realizes the importance of gender diversity and gender sensitivity to keep a safe and secured working environment for women. The Company has a Policy on "Prevention of Sexual Harassment of Women" at all Sites. Adherence to this policy is mandatory for all employees and no incident was reported during the year. Mandatory awareness programs were conducted by external trainers on the various policy provisions regularly. Your Company also has Women's Network to provide the desired platform for exchange of views and ignite the power of women by supporting their causes. The Company's rewards and recognition programme, ALSTARS was implemented to promote recognition culture, contribute to overall employee engagement. As part of Technical Experts Program, 75 professionals of your Company were conferred upon certification under different categories Your Company also undertook several social and cultural activities like musical competition, Winter Games, etc. Under its Annual Health Check-up programme, your Company stressed upon the periodic health check-up of its employees. The Company's ongoing employee engagement initiative SPARK was used to identify talented young managers through impactful deliberations on contemporary business challenges. One of our young managers, Ms. Jyothi Setharaman was awarded the "Sir Padampat Singhania Award for Best Young Manager" by All India Management Association (AIMA) - 41st National Competition for Young Managers. Your Company also conducted a creative pathways workshop for retiring employees to reflect & action on managing their retirement effectively. The Company is well placed to handle the human resource challenges of the decade. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility (CSR) Committee, chaired by Mr. Chandan Roy recommends to the Board, the CSR projects/activities to be undertaken by the Company, plans for CSR expenditure, monitors the implementation of the CSR Policy and reports to the Board of Directors. The CSR Policy of the Company can be accessed at the web-link: <http://www.alstomindiainvestorrelations.com>. During the financial year 2015-16, the Company embarked on CSR activities in the following locations: • Pallavaram, Padappai and Hosur (Tamil Nadu] • Naini (Uttar Pradesh] • Vadodara (Gujarat] Projects undertaken were a combination of direct implementation through the committed volunteers and by leveraging the specific expertise of non-governmental organizations (NGOs). A brief of the projects undertaken during the year are presented here. CHILDREN AND EDUCATION The Company has undertaken a vast school support programme across the locations of Pallavaram, Padappai and Hosur. Your Company's comprehensive support has resulted in: • Clean drinking water in schools and villages • Increasing water availability and water storage • Sanitation and hygiene • Classroom benches • Improved facilities for persons with disabilities • Improved facilities for patients in hospitals • Renovation of schools infrastructure • Renovations of angawandi centres • Nutrition for school children • Basic healthcare • Livelihoods and income-generation • Women empowerment village adoption As part of its CSR initiative, your Company started development activities in five villages near its transformers factory at Vadodara (Gujarat) comprising cross-cutting themes such as renovations of anganwadi centres, strengthening the village milk centre, introduction of LED for energy saving, pest control to prevent vector-borne diseases, tree plantation, health initiatives, women's group, farm and non-farm skill building, financial literacy. The village adoption project is a combination of direct work by our employees and the appointed NGO. In addition, the Company is also supporting mid-day meals in 17 schools through Akshaya Patra Foundation. preventive healthcare Chennai and surrounding areas suffered severely during November-December 2015 period due to heavy rains. Focusing primarily on addressing the health of the people affected by the floods, the Pallavaram and Padappai units of the Company reached out to beneficiaries near their locations with health kits and health camps. The goal, under promoting healthcare initiative, was to provide basic health check, medicines and referral to beneficiaries. In the first phase at least 660 families benefited from the project. Diagnosis and administration of treatment benefited 229 people. All the CSR programmes are monitored to ensure that these are long-lasting and has sustained gains in the lives of the beneficiaries. The details on CSR activities is annexed as "Annexure A" to the Directors' Report. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility (CSR) Committee, chaired by Mr. Chandan Roy recommends to the Board, the CSR projects/activities to be undertaken by the Company, plans for CSR expenditure, monitors the implementation of the CSR Policy and reports to the Board of Directors. The CSR Policy of the Company can be accessed at the web-link: <http://www.alstomindiainvestorrelations.com>. During the financial year 2015-16, the Company embarked on CSR activities in the following locations: • Pallavaram, Padappai and Hosur (Tamil Nadu) • Naini (Uttar Pradesh) • Vadodara (Gujarat) Projects undertaken were a combination of direct implementation through the committed volunteers and by leveraging the specific expertise of non-governmental organizations (NGOs). A brief of the projects undertaken during the year are presented here. CHILDREN AND EDUCATION The Company has undertaken a vast school support programme across the locations of Pallavaram, Padappai and Hosur. Your Company's comprehensive support has resulted in: • Clean drinking water in schools and villages • Increasing water availability and water storage • Sanitation and hygiene • Classroom benches • Improved facilities for persons with disabilities • Improved facilities for patients in hospitals • Renovation of schools infrastructure • Renovations of angawandi centres • Nutrition for school children • Basic healthcare • Livelihoods and income-generation • Women empowerment VILLAGE ADOPTION As part of its CSR initiative, your Company started development activities in five villages near its transformers factory at Vadodara (Gujarat) comprising cross-cutting themes such as renovations of anganwadi centres, strengthening the village milk centre, introduction of LED for energy saving, pest control to prevent vector-borne diseases, tree plantation, health initiatives, women's group, farm and non-farm skill building, financial literacy. The village adoption project is a combination of direct work by our employees and the appointed NGO. In addition, the Company is also supporting mid-day meals in 17 schools through Akshaya Patra Foundation. PREVENTIVE HEALTHCARE Chennai and surrounding areas suffered severely during November-December 2015 period due to heavy rains. Focusing primarily on addressing the health of the people affected by the floods, the Pallavaram and Padappai units of the Company reached out to beneficiaries near their locations with health kits and health camps. The goal, under promoting healthcare initiative, was to provide basic health check, medicines and referral to beneficiaries. In the first phase at least 660 families benefited from the project. Diagnosis and administration of treatment benefited 229 people. All the CSR programmes are monitored to ensure that these are long-lasting and has sustained gains in the lives of the beneficiaries. The details on CSR activities is annexed as "Annexure A" to the Directors' Report. QUALITY AND CONTINUOUS IMPROVEMENT During the year under review, deployment of Quality and Continuous Improvement initiatives has progressed well significantly contributing to business results. Your Company is committed to continuous improvement towards industrial excellence. The success of any Continuous Improvement initiative is dependent on the engagement of employees. Following are a few of the achievements/key actions realized through the whole hearted participation of your Company's employees at all levels: 1. Twenty Process improvement projects executed leading to significant operational performance improvement; 2. Advanced Production System (APS), the global Industrial excellence model has continued to progress quite well in all manufacturing units in line with global targets. APS model provides the necessary road maps and standards to improve and sustain Safety, Quality, Cost and Delivery (SQCD) performance and measure progress towards industrial excellence; 3. Two Innovation projects submitted under Innovative processes and Green innovation categories were among the 52 projects shortlisted from 755 submissions for the finalist selection for ALSTOM Global Innovation Awards 2015; 4. Enhancing competencies of employees at all levels is one of the key success factors for Continuous Improvement. In line with this need, APS operator training was continued to be deployed in the units to the operations personnel (including operators and supervisors) on the shop floor. Over thousand participants across the units have been trained till date. On-line Basic problem solving tools training has also been initiated to enhance basic problem solving skills at different levels in the organization; 5.Quality & Continuous Improvement (Q&CI) conference 2016 held on 4th March 2016 provided a platform for networking, sharing and recognizing best practices. This is an Annual Event which is being practiced by your Company over last 10 years. Thirty six best practices posters of Continuous Improvement (CI) projects including Lean, Lean 6 Sigma and EHS were displayed. Mr. K. Rajaram, Vice President & Head of EHV SS Systems & Power Distribution Business from L&T, was the Guest of Honour. The Quality and Continuous Improvement team presented the Continuous Improvement Gallery to the GE Energy connections/Grid solutions top management including Russell Stokes, President and CEO, GE Energy Connections and Reinaldo Garcia, President CEO, GE Grid solutions during their visit to India in March 2016. The Galleries presented Improvement initiatives, deployment results and successful Continuous Improvement projects executed across the units in the country, which were well appreciated by the high level dignitaries; 6. EHV Transformer Manufacturing factory located at Vadodara received GREENTECH GOLD Safety Award-2015" in Engineering - Manufacturing sector for its outstanding achievement in safety management by Greentech foundation of USA; 7. The turnkey business unit of your Company received the Best contractor award for safety performance from L&T Bangladesh; 8. All business and manufacturing units have certified Management systems for Quality and EHS with periodic recertification; 9. The instrument transformer factory located at Hosur produced its 1000th Current Transformer at 765 kV rating in March 2016. No other company in India has reached this level of manufacturing expertise; 10. Implementation of Common Production Concept (CPC) with an objective to standardize the production process across Power Transformer business globally have also progressed well in India. information systems and technology Your Company uses latest Information Systems and Technology facilitating business performance and improve the operational excellence. The Company has in place state-of-the-art IT infrastructure and implements effective IT policies, supported by tools like Smart Cards, Single Sign-On, My IT Portal, Box, etc. It is ensured that IT environment continuously improves, to meet ever growing business needs, by investing in technology upgrades in IT/PC Hardware, Software, Network including video conferencing facilities such as Telepresence, Skype business, etc. To enhance the employees' efficiency and business productivity collaborative solutions like Unified Communication have been implemented. Your Company has ERP system, which improves performance of the business through information sharing and integration. In addition, best-in-class information systems are used in the business processes such as Sales and Marketing, Design and Engineering, Project Management, Human Resources, etc. directors' responsibility statement In compliance with section 134(5) of the Companies Act, 2013, the Directors of your Company confirm: • that the applicable Accounting Standards have been followed in the preparation of annual accounts and that there are no material departures; • that such accounting policies have been selected and applied consistently and the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2016 and of the profit of your Company for the year ended on that date; • that proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of your Company for preventing and detecting fraud and other irregularities; • that the annual accounts have been prepared on a going concern basis; • that the internal financial controls to be followed by the Company have been laid down and such internal financial controls are adequate and were operating effectively; and • that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively. directors During the year under review, your Company appointed Mr. Rakesh Nath as Independent Director with effect from June 1, 2015 for a period of five years. Mr. Rathindra Nath Basu was re-appointed as Managing Director of the Company for a further term of two years with effect from February 1, 2016,. Your Company also re-appointed Mr. S. M. Momaya as Whole-time Director & Chief Financial Officer for a term of two years with effect from September 1, 2015. Thereafter, he has superannuated from services of the Company and accordingly cease to be a Whole-time Director & Chief Financial Officer and director of the Company with effect from close of business hours on May 31, 2016. Your Company has appointed Mr. Gaurav Manoher Negi as Chief Financial Officer of the Company with effect from June 1, 2016. Mr. Ravi Kumar Krishnamurthy is an Alternate Director to Mr. Michel Augonnet. Due to Mr. Augonnet's presence in India at various times, Mr. Krishnamurthy ceased to be an Alternate Director for short spells of time and was intermittently re-appointed as an Alternate Director to Mr. Michel Augonnet from time to time. In terms of section 152 of the Companies Act, 2013 and Articles 104 and 105 of Articles of Association of the Company, Mr. Michel Augonnet, Director of the Company retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-election. The Board commends re-appointment of Mr. Michel Augonnet as Director. Necessary resolutions for the appointment/ re-appointment, etc. of the directors have been included in the notice convening the ensuing AGM. Your directors commend their appointment/re-appointment. DECLARATION BY INDEPENDENT DIRECTORS All the Independent Directors of your Company have made declaration to the Company that they meet all the criteria of independence laid down under section 149(6) of Companies Act, 2013 and regulation 16(1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS Your Company under 'Familarisation Programme for Independent Directors', familiarises independent directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. Your Company aims to provide its Independent Directors, insight into the Company enabling them to contribute effectively. The details of familiarisation programmes may be accessed under the Corporate Governance section of the website <http://www.alstomindiainvestorrelations.com>. During the year under review, Independent Directors were apprised on an ongoing basis in the various Board/ Committee meetings on macro-economic environment, Industry developments, regulatory updates, business overview, operations, financial statements, update on statutory compliances for Board members, etc. In this respect, presentations were made to Independent Directors by the Managing Director, Whole-time Director & CFO and other management personnel. Apart from this, two familiarization programs namely 'Company's complete Business Portfolio' and 'Insider Trading' were conducted in the financial year 2015-16, which were attended by all the Independent Directors. Total number of hours spent by each Independent Director in these programs was five hours. AUDIT COMMITTEE The audit committee of your Company comprises of Mr. Chandan Roy as the Chairman and Mr. Bhanu Bhushan and Ms. Isabelle Compain-Gerlier as other members. Details in respect of the audit committee are provided in Corporate Governance Report forming part of the Directors' Report WHISTLE BLOWER POLICY/ VIGIL MECHANISM Your Company has an "ALSTOM T&D India Limited - Vigil Mechanism (Ombuds & Open Reporting Procedure)" to provide an avenue to stakeholders, including employees and directors, to report concerns related to any actual or potential violation of law and 'The Spirit & The Letter Policies' including unethical practices, incorrect or misrepresentation of any financial statements and reports, any claim of theft or fraud, conflicts of interest and any claim of unfair employment practices. Through this procedure employees are encouraged to raise integrity concerns and feel confident that they can do so without any fear of retaliation. The said policy may be accessed under the Corporate Governance section of the website <http://www>. alstomindiainvestorrelations.com <http://alstomindiainvestorrelations.com>. NOMINATION AND REMUNERATION POLICY In terms of the section 178 of the Companies Act, 2013 and Part D of Schedule II of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 your Company has a Nomination and Remuneration Policy. The aforesaid policy of the Company on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters is annexed as "Annexure B". PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS Pursuant to the provisions of the Companies Act, 2013 and regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Directors individually including Independent Directors, Board as a whole and of its various committees, on parameters such as skills, knowledge, participation in meetings, contribution towards corporate governance practices, compliance with code of ethics, etc. Independent Directors in terms of Companies Act, 2013 and regulation 25(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, carried out performance evaluation of non-independent directors, Chairman of the Board and Board as a whole with respect to knowledge to perform the role, time and level of participation, performance of duties and level of oversight and professional conduct and independence. The Directors expressed their satisfaction with the evaluation process PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Details as required under section 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure C". A statement showing the names of employees drawing remuneration in excess of the limits as set out in section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure D". EXTRACT OF ANNUAL RETURN The extract of the Annual Return is detailed in form MGT.9 annexed as "Annexure E". NUMBER OF MEETINGS OF THE BOARD During the year under review, ten meetings of the Board of Directors were held, details of which are provided in Corporate Governance Report forming part of the Directors' Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Particulars of investment made are detailed in Note 12 to the financial statements forming part of the Annual Report. Your Company has not provided any loan, guarantee or securities under section 186 of the Companies Act, 2013. RELATED PARTY TRANSACTIONS In terms of Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has a Related Party Transactions Policy on dealing with Related Party Transactions. The policy may be accessed under the Corporate Governance section of the website <http://> www.alstomindiainvestorrelations.com All related party transactions during the year underreview were on arm's length basis and in the ordinary course of business. There were no material related party transactions made by the Company which could be considered material in accordance with Related Party Transactions Policy of the Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars, as prescribed under sub-section 3(m) of section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are provided in "Annexure F", which forms part of this report. RISK MANAGEMENT The Board of Directors of your Company has laid down a Risk Management Policy for the Company. It identifies elements of risks inherent to the business pertaining to tender and contract execution, operational and financial, environment, health and safety, reputation and image, currency fluctuation, compliance, etc. It also contains a control matrix in respect of sources and consequences of above risks and control measures to help manage them. Every unit and function is required to deploy the control measures and ensure timely reporting. In the opinion of the Board, none of the above mentioned risks threaten the existence of the Company. INTERNAL FINANCIAL CONTROL The Board of Directors of your Company is satisfied with the Internal Finance Control process. Internal control environment of the Company is reliable with well documented framework to mitigate risks. A detailed analysis is provided in the Management Discussion and Analysis Report forming part of the Directors' Report. CORPORATE GOVERNANCE The Company is committed to maintain and adhere to the highest standards of Corporate Governance practices. Pursuant to regulation 34 (3) read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Reports on Management Discussion and Analysis and on Corporate Governance have been included elsewhere in this Report as separate sections. A certificate from M/s S. N. Dhawan & Co, Chartered Accountants regarding compliance of conditions of Corporate Governance as stipulated in regulation 34 (3) read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has also been included in the Annual Report. GLOBAL ACQUISITION OF ALSTOM ENERGY BUSINESS BY GE On April 30, 2014, General Electric Company ("GE") and ALSTOM announced that GE had made a unilateral binding offer to acquire the ALSTOM Power and Grid Business. Accordingly, as reported in last Directors' Report of your Company, GE Energy Europe B.V. ("Acquirer") along with certain persons acting in concert had made a Public Announcement under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SEBI (SAST) Regulations") for the Open offer (the "Offer") for acquisition of up to 64,011,639 shares in the Company from public shareholders representing 25% of the total paid-up equity share capital of the Company at an offer price of Rs. 261.25 per share. As per Announcement, the Acquirer was to proceed with Offer, only if the underlying transaction to the Offer was consummated. The Offer was a mandatory open offer in compliance with Regulation 3(1), Regulation 4 and Regulation 5(1) of the SEBI (SAST) Regulations pursuant to the indirect acquisition of the voting rights and control of the Target Company. GE and ALSTOM later entered into a Master Agreement on November 4, 2014, to establish, at closing of the Primary Acquisition of Energy Business of ALSTOM, inter-alia formation of joint venture on a global level consisting of the grid business of ALSTOM and digital energy business of GE. The completion of the Primary Acquisition on November 2, 2015 resulted in an indirect acquisition of control of the Company by GE. Thereafter, the offer was completed in February 2016 and in terms of the same, of the 43,439 equity shares tendered by the shareholders of the Company, 42,570 equity shares were acquired by the Acquirer at an Offer price of Rs. 300.98 per share . As a result, the shareholding in the Company of the Acquirer/Promoter Group, has increased to 75.02% from 75.00%, as heitherto. In terms of regulation 7(4) of SEBI (SAST) Regulations read with rule 19A of Securities Contracts (Regulation) Rules, 1957, the Company/ Promoters have one year time from completion of open offer to comply with minimum public shareholding requirement. STATUTORY AUDITORS The Company has received a letter from M/s. S.N. Dhawan & Co., Chartered Accountants, the Auditors of the Company, that they do not offer themselves to be considered for re-appointment as the Statutory Auditors of the Company at the ensuing Annual General Meeting. M/s. B S R & Associates LLP, Chartered Accountants, who have given their consent for appointment, are proposed to be appointed statutory Auditors from conclusion of ensuing 60th Annual General Meeting till the conclusion of 65th Annual General Meeting in terms of section 139 of the Companies Act, 2013. M/s. B S R & Associates LLP, Chartered Accountants, have confirmed that their appointment, if made, would be within the limits prescribed under the Companies Act, 2013 and that they are not disqualified for the proposed appointment. COST AUDITORS M/s. Shome & Banerjee, Cost Accountants and M/s. Jugal K Puri & Associates, Cost Accountants, were appointed as cost auditors of your Company for the financial year ended March 31, 2016 with M/s. Shome & Banerjee, Cost Accountants being the Lead Cost Auditor. The Cost Audit Report for financial year ended March 31, 2015, of the Company was filed on September 29, 2015, well within the specified time under applicable Companies (Cost Audit Report) Rules, 2011. In terms of the Companies (Cost Records and Audit) Rules, 2014, your Company has appointed M/s. Shome & Banerjee, Cost Accountants and M/s. Jugal K Puri & Associates, Cost Accountants, as cost auditors of the Company for the financial year ending March 31, 2017 to audit the cost records of the Company related to the applicable products manufactured at its manufacturing facilities. M/s. Shome & Banerjee, Cost Accountants shall be the Lead Cost Auditor. Their remuneration approved by the Board, is recommended for ratification by the members at the ensuing AGM. SECRETARIAL AUDITORS As per section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed M/s. V. K. Chaudhary & Co., Company Secretaries, as Secretarial Auditor of the Company for the financial year ended March 31, 2016. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed as "Annexure G". ACKNOWLEDGMENTS The Directors sincerely appreciate the employees of the Company for their commitment, dedication and support in fulfilling Company's commitments to its customers and contributing to the performance of the Company. They would also like to express their gratitude to various Government/ Regulatory authorities, customers, vendors, Banks, and shareholders for their continued understanding and support during the financial year ended March 31, 2016 and look forward for the same in the years to come. For and on behalf of the Board Rathindra Nath Basu Managing Director Rakesh Nath Director Place : Chennai Date : June 10, 2016 |