AFFLUENCE

DIRECTOR'S REPORT

To
The Members of
 INOX India Private Limited

Your Directors have pleasure in presenting their Annual Report of the Company together with the Audited Statements of Accounts for the Financial Year ended on 31st March, 2017.

1. FINANCIAL HIGHLIGHTS:

 Particulars 2016-17
[Rs.in lacs]   2015-16
[Rs.in lacs]
Income from Operation 29,695.38 32,057.89
Other Income 503.49 997.30
Total Revenue 30,198.87 33,055.19
Operating Profit before Interest and Depreciation 3,778.99 6,024.13
Less:  Finance Cost  2,576.45 2,024.22
Profit before Depreciation 1,202.54 3,999.91
Less: Depreciation 948.94 1,021.05
Profit before tax and Exceptional  Items 253.60 2,978.86
Less: Provision for Impairment of Investment in Subsidiary  0 7,777.07
Profit (Loss)  before Tax and after Exceptional Items                             253.60 (4,798.22)
Less: Tax Expenses (124.39) 769.45
Profit (Loss)  after Tax 377.99 (5,567.67)
Add:  Balance of Profit brought forward 15,939.68 21,423.75
Amount available for Appropriation 16,317.67 15,856.08
Appropriations  
Adjustment on account of carrying amount of fixed assets as on 1st April 2015 0 5.21
Proposed Dividend on Class 'A' Equity Shares 0 (90.76)
Proposed dividend on compulsorily convertible preference shares 0 (5.66)
Tax on Dividend 0 (19.63)
Capital Redemption Reserve 29.34 27.25
Balance of Profit carried to Balance Sheet 16,288.33 15,939.68
  16,317.67 15,856.08

2. REVIEW OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS:
Your company's Indian operations have achieved total revenue of Rs.301.99 Crs. compared to Rs. 330.55 Crs. for the previous year.     

The Company has achieved Net profit before tax and exceptional items of Rs. 2.54 Crs. compared to Rs 29.79 Crs. in previous year.  Reason for lower profitability in current year is due to write-off of interest receivable of Rs 28.24 cr. (upto the period 31.03.16) from its US Subsidiary on loan given and on overdue trade receivable. Also in current year, no interest has been charged on outstanding loan amount and on overdue trade receivable from its US Subsidiary due to restructuring of loans by converting Loans into Optionally Convertible Preference Shares ( OCPS) w.e.f. 01.04.16 for which necessary approval from RBI has been received.
During this period, Industrial gas activities in India have remained depressed with practically no new industrial gas production capacities coming on stream, Steel industry also remained depressed 

While LNG industry opportunities continue to grow, initial phase of implementation is still challenging due to new regulatory being set globally 

Cryoscientific Division has completed major part of engineering and analysis during the current year. This project shall provide continued business over next few years.

Your Company take this opportunity to compliment the INOXCVA team who have put sustained efforts in creating new opportunities of growth.

With the unique combination of latest technology, global manufacturing locations for supply, and with credible track record, we hope that your company will achieve recognition as a global player in this specialized field.

PERFORMANCE OF SUBSIDIARY, ASSOCIATES AND JOINT VENTURE COMPANIES:

In 2009, your company had acquired 70% Equity Shares of Cryogenic Vessel Alternatives Inc (CVA Inc),  USA with their two 100% Subsidiary Companies namely CVA Canada Inc and CVA China LLC. On 22nd July 2015 your company had further acquired 10% Equity Shares of CVA Inc,  USA.  On 8th Feb, 2017 your Company has further acquired 20% equity shares of CVA Inc., USA. Total holding in CVA Inc. USA is 100% as on 31-03-2017.The consolidated performance for 12 months ended on March, 2017 in revenue is USD 19.65 mn

In 2012, your company had started service unit at Indaiatuba at Sao Paulo at Brazil in the name of INOXCVA Comercio E Industria De Equipamentos Criogenicos Ltd. As on 31.03.2017, your company is holding 99.97% stake in the said company. Performance of 2016 in revenue is BRL 5.78 mn

In 2014, your company had started Trading set up of INOX Goods in Netherland, Europe by establishing a new company INOXCVA Europe B.V. As on 31.03.2017, your company is holding 100% stake in the said company.  Performance of 2016-17 in revenue is EURO 1.31 mn

INVESTMENT BY PRIVATE EQUITY AND THEIR SUBSEQUENT EXIT:

In 2012-13, your company had raised funds for the company's present operations and its future capital requirements from M/s Standard Chartered Private Equity (Mauritius).However due to falling out on certain terms with the Strategic Investors they were given an exit as mutually decided. The Company has paid an initial amount of Rs 100 Crs. in the year 2013-14, Rs. 32.37 Crs in the year 2014-15, Rs. 32.50 Crs in the year 2015-16 and Rs 32.50 Crs. during the current year, in accordance with the exit plan.

3. CHANGE IN NATURE OF BUSINESS, IF ANY:

There is no change in nature of business during financial year 2016-17

4. DIVIDENDS:

Your Directors not recommended any dividend on equity share for the financial year ended 31st March, 2017.

5. DIRECTORS:
Mr. Ronal Sullam resigned and ceased to be a Director of the company w.e.f. 14/09/2016.

6. AUDITORS:
(a) Statutory Auditors: M/s K C Mehta and Co., Chartered Accountants, Auditors of the Company, were appointed as the auditors of the company, at the Annual General Meeting of the company held on 16th December, 2014 for a period of five consecutive years, subject to ratification by members every year in the Annual General Meeting. Based upon the declaration to their eligibility, consent and terms of engagement, your directors  proposes their ratification in the ensuing AGM.

(b) Cost Auditors: Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Costs Records and Audit) Amendment Rules, 2014. M/s. Amruta Thapa and Associates, Cost Accountants, were appointed as Cost Auditor of the company to carry out the audit of cost records of the Company for the Financial Year ended 31st March, 2017. Based upon the declaration on their eligibility, consent and terms of engagement, your directors have appointed them and recommend the ratification of remuneration to be paid to the Cost Auditors for the financial year 2017-18.

7. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013, the Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the accounting policies have been selected and applied consistently, and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit/loss of the Company for that period.

(c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis.

(e) Company being unlisted sub clause (e) of section 134(3) is not applicable.

(f) Proper system has been devised to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

8. CORPORATE SOCIAL RESPONSIBILITY:
The Corporate Social Responsibility (CSR) Committee of the Company comprises of Mr. P.K. Jain,  Director, Mr. Siddharth Jain, Executive Director and Mr. P.P. Kulkarni, Wholetime Director and CEO of the Company. The CSR Policy of the Company is disclosed on the website of the Company which can be viewed at http://www.inoxindia.com/inoxindia/pdf/PolicyOnCorporate.pdf.The report on CSR activities as per Companies (Corporate Social Responsibility) Rules, 2014 is annexed to this Report as Annexure I.

9. DETAILS OF DEPOSITS:
During the year no deposits were accepted, remained unpaid or unclaimed at the end of the year and also no default has been made in repayment of deposits as well as interest amount.

10. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
No significant and material orders have been passed impacting the going concern status and company's operations in future.

11. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

12. EXTRACT OF ANNUAL RETURN IN FORM MGT-9 (Sec 92 (3))OF THE COMPANIES ACT 2013:
Extract of Annual Return of the Company is annexed herewith as Annexure "II" to this Report.

13. NUMBER OF THE MEETINGS OF THE BOARD: (5/4/16, 11/7/16, 3/9/16, 15/11/16, 10/1/17, 8/2/17, 8/3/17, 9/3/17, 28/3/17)
During the year 9 board meetings were convened and held,the details of which is mentioned below:

Sr. No  Name of Directors  Designation Present (No. of Meeting) Absent (No. of Meeting)
1. Devendra Kumar Jain Director 1 8
2. Vivek Kumar Jain Director 1 8
3. Pavan Kumar Jain Director 9 0
4. Siddharth Jain Executive Director 9 0
5. Parag Padmakar Kulkarni Wholetime Director and CEO 9 0
6. Ronaldo Sullam Director 0 3

14. DECLARATION GIVEN BY INDEPENDENT DIRECTOR UNDER SECTION 149(6):
Our Company is Private Limited Company hence the provision is not applicable to our Company.

15. EXPLANATIONS OR COMMENTS BY THE BOARD ON AUDITORS REPORT:
There was no qualification, reservation or adverse remark made either by the Auditors in their respective reports.
 
16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Particulars of loans given, investments made,guarantees given and securities provided along with the purpose for which the  loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (please refer to Notes to the standalone financial statements.)

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1):
All contracts/agreements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract/arrangement/transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
 
Your Directors draw attention of the members to Notes to the standalone financial statements which set our related party disclosures.

18. AMOUNT, IF ANY, WHICH IS PROPOSED TO CARRY TO ANY RESERVES:
During the year no amount is proposed by the Board to carry to any reserves, out of the profits of the financial year ending on 31st March, 2017.

19. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL
STATEMENT RELATEAND THE DATE OF REPORT:

No material changes and commitments affecting the financial position of the Company
occurred between the end of the financial year to which this financial statement relate on the date of this
report.

20. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE :

The Company has in place a policy on Prevention of Sexual Harassment at workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial year 2016-17, no complaints were received by the Company related to sexual harassment.

21. A STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY FOR THE COMPANY INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK, IF ANY WHICH IN THE OPINION OF THE BOARD MAY THREATEN THE EXISTENCE OF THE COMPANY:
The Company's management system, organizational structures, process, standards, code of conduct etc governs how the company conducts the business of the Company and manages associates risks. The risk is minimized by way of exercising adequate internal control, internal audit methodologies and process.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules,2014, Particulars of Energy Conservation, Technology absorption and Foreign exchange earnings and outgo required under the Companies (Accounts) Rules 2014.

1) CONSERVATION OF ENERGY:
Energy conservation with more focus is continuous process through improved maintenance practices.

Continuous measures are being adapted in the Company for energy conservation. Usage of more LED lights for future requirements has been planned. Efforts are being taken to explore each and every possibility of further reduction in energy consumption.

2) TECHNOLOGY ABSORPTION:

(I) Research and Development
a) Specific Area in which R and D carried out by the Company :
The Company has been carrying out in-house Research and Development activities in the area of New product development, New process development, New Production process development, energy conservation and cost reduction.

b) Benefits derived as a result of R and D:
It has resulted in the improvement of quality of the products and reduction in operational cost. Upgradation of products to the new requirements has been possible because of RandD.

c) Future plan of action: Future R and D efforts will include -
 (a) Development of new products
 (b) Reduction of product cost
(c) Undertake the RandD innovation in other diverse segments.

     (d)  Expenditure on R and D:
In pursuit of R and D endeavors the company is continuously incurring R and D expenditure which are included in respective expenditure heads.

(II) Technology absorption, adaptation and innovation:
The technologies so far imported by the Company have been absorbed and adapted/innovated to suit our conditions by the active involvement of our R and D Department.

3) FOREIGN EXCHANGE EARNINGS AND OUTGO:

  Foreign Exchange Earned                            Please Refer to Notes to the
  Foreign Exchange Outgo                             Standalone financial statements.

23. ACKNOWLEDGEMENT:
Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

For and on Behalf of the Board

________
Chairman
Date: 21st Aug, 2017.

Place: Mumbai