Innoventive Industries Limited · The Saraswat Co-op Bank Limited UCO Bank United Bank of India Bank of Maharashtra ... INNOVENTIVE I N D U S T R I E S CIN L29309PN1991PLC063045 2

Innoventive Industries Limited

23rd Annual Report | 2013-14

INNOVENTIVE I N D U S T R I E S CIN L29309PN1991PLC063045

1 Annual Report 2013-2014

Corporate Information

(As on June 12, 2015) Mr. Chandu Chavan Mr. Ravindra Katre Mr. Pradeep Tupe Mrs. Pournima Gadiya Dr. Rajendra Jagdale Mr. Sanjay Asher Mr. Laxman Sankade Mr. Sanjay Waghulade Mr. Ramprasad Joshi Mr. Yashpaul Gupta Mrs. Deepali Agrawal STATUTORY AUDITORS B. K. Khare & Co., Chartered Accountants, Pune

Chairman & Managing Director Whole-time Director Independent Director Independent Director (Resigned on 14.08.14) (Resigned on 30.09.14) (Resigned on 15.10.13) (Resigned on 13.09.13) (Resigned on 20.10.13) (Resigned on 20.10.13) (Appointed as Nominee Director on 15.03.2014 and Resigned on 01.12.14)

BANKERS Allahabad Bank Axis Bank Limited Bank of Baroda Bank of India Central Bank of India Export Import Bank of India ICICI Bank Limited IDBI Bank Limited Indian Overseas Bank State Bank of Bikaner & Jaipur State Bank of India The Saraswat Co-op Bank Limited UCO Bank United Bank of India Bank of Maharashtra DBS Bank Limited The Ratnakar Bank Limited

PLANTS Unit I: GAT No. 1261, Sanaswadi, Pune Nagar Road, Tal. Shirur, Pune - 412208 Unit II: Gat No. 56/3/4/5, Pimple Jagtap, Tal. Shirur, Dist. Pune – 412208

CORPORATE OFFICE 601 & 602, Nucleus Mall, 1 Church Road, Camp, Pune – 411001.

REGISTERED OFFICE Gat No. 56/4/5, Pimple Jagtap, Taluka: Shirur, District: Pune – 412208.

Forward Looking Statement In this Annual Report, we have disclosed forward-looking statements to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward looking statements will be realized, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

BOARD OF DIRECTORS



Overview

Vision & Mission Statement About the Group Chairman’s Message Corporate Social Responsibility

Statutory Reports

Notice convening 23rd AGM Directors’ Report Management Discussion & Analysis Report on Corporate Governance



CONTENTS Standalone Financials

Auditors’ Report Balance Sheet Statement of Profit & Loss Cash Flow Statement Notes to Accounts

Consolidated Financials

Auditors’ Report Balance Sheet Statement of Profit & Loss Cash Flow Statement Notes to Accounts



Vision & Mission Statement

Our Vision

To evolve globally as value creator for customers by specializing in Total Engineering Solutions and Supply Chain Management.

Our Mission To instill the core values of Excellence, Freedom, Integrity, Respect and Harmony.



Overview Vision & Mission Statement About The Group

Message From The Chairman Corporate Social Responsibility

Our Evolution

2002

• Commenced manufacturing of ERW and CEW tubes

2006

• Commenced manufacturing of auto components

2007

2008

• Was awarded ‘Mega Project’ status by the GoM 3

for our Unit II project • Raised equity stake in Sankalp Engineering to 51% • Kavos Capital acquired 5% stake in our Company

• Acquired majority stake in Saicon Steels1

• Acquired 26% equity stake in Sankalap Engineering 2

2009

• Was converted into a public limited company • Received Eligibility Certificate under the Package

Scheme of Incentives 2007 4

2010

• Change of Company‘s name to Innoventive Industries Limited

2011 • Raised ₹ 350 mn of equity from Kavos Capital

• Raised ₹ 304 mn from Standard Chartered Private Equity under

Pre-IPO Placement of equity shares • Was listed on NSE and BSE with a

successful IPO

2012 • Was awarded the patent for innovative,

energy efficient cold pilgering technology • Acquired 85% equity stake in Salem Steel 5

to gain a foothold in the US market • Acquired a 51% stake in Innovative

Technomics 6

1. Saicon Steels Private Limited is engaged in converting hot rolled coils to cold rolled coils and manufactures a wide range of low and medium grade carbon and special grade CR products.

2. Sankalp Engineering & Services Private Limited caters to the oil and gas industry and manufactures oil well drilling couplings, cas ing couplings, pup-joints, cross-overs, etc.

3. Government of Maharashtra 4. The Eligibility Certificate under the Package Scheme of Incentives 2007 is granted for recognition of ‘Mega Project’ status. 5. Salem Steel NA, LLC is a global distributor of ERW, DOM and seamless tubing. 6. Innovative Technomics Private Limited, is a leading manufacturer of FCMA soft starters and testing equipment's for water pumping & irrigation, sugar,

steel and various industries.



Automotive Swing Arm Assembly, Trailing Arm Assembly, Engine Mounting Brackets, Stands, Foot-steps

Oil & Gas Machined Tubing, Couplings,Casing Couplings, Pup joints, Crossovers

Our Presence, Products & User Industries

• Our exports primarily comprise of Tube Products and Oil & Gas Components.

• Established presence in key strategic markets of the Middle East by setting up a subsidiary.

• Acquisition and business integration of Salem Steel North America, LLC has further enhanced our reach in North America.



PowerMembran Boilers an

e d

Panel SHeat ex

Mining, Construction Equipment, General Engineering ERW Tubes, DOM/CEW Tubes, Hydraulic Cylinder Tubes, FCMA Soft Starters, Other Machined Components

Overview Vision & Mission Statement About The Group

Message From The Chairman Corporate Social Responsibility

Americas • Brazil • Canada • Mexico • USA

Europe • France • Germany • Romania • UK

East

Asia • India

Middle East • Oman • UAE

Shaded region represents our current export markets.



Overview Vision & Mission Statement Message From The Chairman About The Group Corporate Social Responsibility

Message From The Chairman

Dear Shareholders,

It gives me pleasure to present the Company’s 23rd Annual Report for the financial year ending March 31, 2014 to you. I take this opportunity to address the concerns you may have regarding the present status and future opportunities for Company. I would also like to outline our strategy to grow our enterprise and enhance shareholder value going forward. I am confident that Company will recoup its past glory, but it will take time. We have assimilated the learning of the past and created a blueprint, which, we are confident, will enable us, reach, our goal. We are optimistic about Company’s long-term prospects. We believe the Company has the dynamism, the resources, the know-how and the motivation to not only drive growth in the future, but also to development in a few selected domain technology areas. Our continuous ability to innovate enables us to enhance our execution and service delivery. The growing level of dedication and passion to excel gives us the confidence to meet our desired growth objectives. In addition, we will fulfill our obligations to all our stakeholders, customers and employees as well as the nation and the larger society, providing all of them with industry-leading values through

advanced and responsible management. The Company is planning to consolidate and optimise the existing resources in the best possible way. We shall be focusing on stabilizing our operations to achieve our goal. We are further focusing on improving our efficiencies at all the levels. We expect the steel demand in India to pick up gradually. The current economic environment in combination with growth ambitions carries with it an evolving set of risks. Your company, recognizes that these risk need to be managed to protect its customers, employees, shareholders and other stakeholders to achieve its business objective and enable sustainable growth. Your company, realises its responsibility towards the society in which it operates and contributes towards the society and environment. An integrated system of risk management and internal controls framework has been deployed taking into account various factors such as size and nature of the inherent risk and the regulatory environment. With a 3.3% increase in demand in 2014, followed by an even better 4.5% in 2015 citing expectations of reforms implemented by a new government. Management appreciates dedication and commitment of Company’s team and is confident that they will guide the company through uncertain times and unforeseen challenges. The Innoventive team continues to work diligently at



sustaining operational excellence and remains resolved to manage any challenges and seize every opportunity that may arise. We see a team with greater determination to succeed and an unrelenting commitment to provide exceptional customer service. These together with the passion to pursue knowledge and courage to make a difference will enable the Company to achieve its long-term operational and financial priorities and goals. Future opportunities & challenges have been analyzed and addressed. That is how we ensure that your company can maneuver its growth potential. We seek and shall rely on your continued support in pursuit of these objectives. We would like to thank all our business partners for preserving their confidence in us during tough business environment like this and we express our gratitude towards the employees, who are the driving force behind the success of this organization over the years. Management is committed to the growth and development of its employees, which will ensure the continued success of this company. Taking in view the current business scenario and need for cash to be deployed in the business in the near future, the Board and management shall be cautious with respect to the use of funds.

On behalf of the Board of Directors, I express my sincere gratitude to the Central and State Governments, financial institutions, public and private sector banks, Government agencies and Non-government institutions for reposing their faith in the management. I am also thankful to our valued stakeholders, namely vendors, customers, strategic alliance partners and business associates for supporting our vision and business strategies. I also acknowledge the vital role played by our valued employees in our corporate evolution. Finally, I am grateful to our community of shareholders for their confidence and continued support in the management team which has helped in steering the Company through challenging times.

Yours sincerely,

Chandu Chavan Chairman & Managing Director



Overview Vision & Mission Message From The Chairman Statement About The Group Corporate Social responsibility

Corporate Social Responsibility (CSR) Swayamsiddha Mahila Utkarsh Foundation Swayamsiddha is a Sec. 25 company (NGO) from Pune, working primarily towards women empowerment and social entrepreneurship development. Swayamsiddha is trying to address society’s challenges such as Water, Health and Sanitation, Rural Development and Social Productivity. Swayamsiddha has undertaken a number of projects since its incorporation to further the cause of women empowerment. It has worked with 30 villages in Shirur taluka to issue low cost health insurance policies and supply low cost sanitary napkins. JALDOOT Project With a strong pro-poor and non-charity focus, Swayamsiddha with the help of Innoventive Group has developed JALDOOT, a socio-economic business model, which addresses issues of economic development of rural Maharashtra through women empowerment, rural employment and social entrepreneurship development. Jaldoot - ‘the water messenger ’ is a highly scalable and a sustainable safe drinking water delivery model, which attempts to address the challenges in the drinking water sector. In addition to filtering water, ‘Jaldoot’ involves the distribution of the safe drinking water to people at an affordable price. It is based on the unique idea of using ‘mobile filtration vehicles’ which can filter water on-the-go and deliver safe drinking water at the doorstep of consumers. In addition to delivering safe potable water, ‘Jaldoot’ also helps create rural employment opportunities for the local population, primarily for women, and helps develop social entrepreneurship. Pilot Project and Further Expansion A pilot project to assess the scalability and sustainability of the model was initiated in 2009 in Koregaon Bhima village in Shirur taluka in Pune with just 3 vehicles, which has now grown to 25 vehicles. Buoyed by the success of the pilot project, Swayamsiddha has expanded to 10 more distribution

centres within Pune District. With intent of expanding across Maharashtra, Swayamsiddha has already begun expanding in Vidarbha and Marathwada. As of August 2013, 50 entrepreneurs have been trained in Shikrapur Village of Pune District. 25 new distribution centers have been operationalized and next 25 are on their way of being rolled out. JALDOOT has a long-term plan of growing Jaldoot project to 400 Distribution Centers across Maharashtra.

6 1 4

2 13

11 5 3 9

12 8

10 1. Amravat i 8. Latur 2. Aurangabad 9. Nanded 3. Beed 10. Osmanabad 4. Bhandara 11. Parbhani 5. Hingoli 12. Pune 6. Jalgaon 13. Yawatmal 7. Jalna

Socio-Economic Impact of JALDOOT • Access to safe drinking water: The ‘Jaldoot 400’

mission is expected to benefit almost 7%-10% of the total rural households in Maharashtra.

• Reduction in medical expenses: Annual medical expenses per household served will be lower by about ₹ 2,000 per annum.

• Sustainable rural employment: Employment for more than 10,000 locals will be generated, thus increasing their standard of living.

• Social entrepreneurship Development: Training and support to 400 rural entrepreneurs, channelizing their passion and commitment towards bringing about a change in society into structured and profitable ventures.

• Increased productivity: By relieving the women from travelling and fetching water daily, additional income generation opportunities will be created.

• Women empowerment: Women empowerment is expected to get a major boost as majority of the entrepreneurs as well as Jaldoot vehicle drivers (about 8,000 in number) are targeted to be women.



Statutory Reports

Notice

Directors’ Report

Management Discussion & Analysis Corporate Governance

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Statutory Reports Notice Management Discussion & Analysis Directors’ Report Corporate Governance

Notice

NOTICE is hereby given that the 23rd Annual General Meeting of Innoventive Industries Limited will be held on Wednesday, the 15th day of July, 2015 at 9:30 a.m. at the Registered office of the Company at Gat No. 56/4/5, Pimple Jagtap, Taluka- Shirur, District Pune- 412 208 Maharashtra, India to transact the following business:

ORDINARY BUSINESS: 1. Adoption of Financial Statements

To receive, consider and adopt the financial statements of the Company including the audited Balance Sheet as at March 31, 2014, the Statement of Profit and Loss for the year ended on that date and the reports of the Board of Directors and Auditors thereon.

2. Reappointment of Mr. Ravindra Katre

To appoint a Director in place of Mr. Ravindra Katre (DIN 00035125) who retires by rotation and being eligible offers himself for re-appointment.

3. Appointment of Auditor

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

“RESOLVED THAT pursuant to the provisions of section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules framed thereunder, as amended from time to time, MGM & Company, Pune Chartered Accountants (Firm Registration No. 117963W), be and is hereby appointed as Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the 28th AGM of the Company (subject to ratification of their appointment at every AGM), at such remuneration plus service tax, out-of-pocket, travelling and living expenses, etc., as may be mutually agreed between the Board of Directors of the Company and the Auditors.”

SPECIAL BUSINESS:

4. Appointment of Mrs. Pournima Gadiya as an Independent Director

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

“RESOLVED THAT pursuant to the provisions of Section 149, 152, 161 read with Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force) and Clause 49 of the Listing Agreement, Mrs. Pournima Gadiya (DIN 06941211), who was appointed as an Additional Director of the Company by the Board of Directors with effect from November 14, 2014 and who holds office up to the date of this Annual General meeting and in respect of whom the Company has received a notice pursuant to Section 160 of the Companies Act, 2013, in writing, proposing her candidature for the office of the Director of the Company, be and is hereby elected and appointed as an Independent Non-Executive Director, not liable to retire by rotation and to hold office for a term of 5 (five) consecutive years.

RESOLVED FURTHER THAT the Board (which includes its Working Group Committee) be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this Resolution”

By Order of the Board For Innoventive Industries Limited

Chandu Chavan Pune, 12th June, 2015 Chairman & Managing Director Registered Office: Gat No. 56/4/5, Pimple Jagtap, Taluka- Shirur, District Pune- 412208 Maharashtra, India

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Notice NOTES: 1. The relative Statement pursuant to section 102 of the Companies Act, 2013 (Act) in respect of the business under Item No. 4

of the Notice, is annexed hereto. The relevant details as required under clause 49 of the Listing Agreements entered into with the Stock Exchanges, of persons seeking appointment/re-appointment as Directors under Item Nos. 2 & 4 of the Notice, are also annexed.

2. A Member entitled to attend and vote at the Annual General Meeting (AGM) is entitled to appoint a proxy to attend and

vote instead of himself and the proxy need not be a Member of the Company. The instrument appointing the proxy, in order to be effective, must be deposited at the Company’s Registered Office, duly completed and signed, not less than FORTY-EIGHT HOURS before the meeting. Proxies submitted on behalf of limited companies, societies, etc., must be supported by appropriate resolutions/authority, as applicable. A person can act as proxy on behalf of Members not exceeding fifty (50) and holding in the aggregate not more than 10% of the total share capital of the Company. In case a proxy is proposed to be appointed by a Member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder.

3. B.K. Khare & Co., Chartered Accountants, Pune retire at the ensuing Annual General Meeting; have not offered themselves for

appointment. The Directors propose to appoint MGM & Company,Pune, Chartered Accountants (FRN 117963W) as auditors of the Company who have conveyed their willingness for being appointed as auditors of the Company in the ensuing Annual General Meeting. The Company has received a certificate from them under section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 that if appointed, their appointment will be within the limits.

4. The Register of Members and Transfer Books of the Company will be closed from Thursday, 9th July, 2015 to Wednesday 15th

July, 2015; both days inclusive. 5. Members holding shares in dematerialized form are requested to intimate all changes pertaining to their bank details,

National Electronic Clearing Service (NECS), Electronic Clearing Service (ECS), mandates, nominations, power of attorney, change of address, change of name, e-mail address, contact numbers, etc., to their Depository Participant (DP). Changes intimated to the DP will then be automatically reflected in the Company’s records which will help the Company and the Company’s Registrars and Transfer Agents Karvy Computershare Private Limited (Karvy) to provide efficient and better services. Members holding shares in physical form are requested to intimate such changes to Karvy.

6. Members holding shares in physical form are requested to consider converting their holding to dematerialized form to

eliminate all risks associated with physical shares and for ease of portfolio management. Members can contact the Company or Karvy for assistance in this regard.

7. Members holding shares in physical form in identical order of names in more than one folio are requested to send to the

Company or Karvy, the details of such folios together with the share certificates for consolidating their holding in one folio. A consolidated share certificate will be returned to such Members after making requisite changes thereon.

8. In case of joint holders attending the meeting, the Member whose name appears as the first holder in the order of names as

per the Register of Members of the Company will be entitled to vote. 9. Members seeking any information with regard to the financial statements are requested to write to the Company at an early

date, so as to enable the management to keep the information ready at the meeting. 10. The Notice of the AGM along with the Annual Report 2013-14 is being sent by electronic mode to those Members whose e-

mail addresses are registered with the Company/Depositories as on 12th June, 2015, unless any Member as on the said date has requested for a physical copy of the same. For Members who have not registered their e-mail addresses, physical copies are being sent by the permitted mode.

11. To support the ‘Green Initiative’, the Members who have not registered their e-mail addresses are requested to register the

same with Karvy/Depositories.

12. In compliance with the provisions of section 108 of the Act and the Rules framed there under, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by Karvy Computershare Private Limited (Karvy), on all resolutions set forth in this Notice.

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Notice The instructions for e-voting are as under: In case a Member receives an e-mail from Karvy [for Members whose e-mail addresses are registered with the Company/Depository Participant(s)]:

a. Open the e-mail and also open PDF file namely “IIL e-voting.pdf” with your Client ID or Folio No. as password. The said

PDF file contains your user ID and password for e-voting. Please note that the password is an initial password.

b. Open the internet browser during the voting period and navigate to following URL: https://evoting.karvy.com

c. If you are holding shares in demat form and had logged on to https://evoting.karvy.com and had cast your vote earlier for any company, then your existing login ID and password are to be used.

d. If you are logging in for the first time, please enter the login credentials (i.e. user ID, password & captcha) as given below:

i. User Id:- For shareholders holding shares in physical form, event number followed by folio number registered with the

Company for shareholders holding shares in demat form: -NSDL- 8 character DP ID followed by 8 Digit Client ID -CDSL- 16 digit beneficiary ID

ii. Password: The unique password as printed on the postal ballot form forwarded through the electronic notice. iii. Captcha: Enter the verification code i.e. enter the alphabets and numbers in the exact way as they are displayed on the

screen.

e. After entering these details appropriately, click on ‘LOGIN’

f. Shareholders will then reach the “Password Change” menu wherein they are required to mandatorily change their login password in the new password field. The new password has to be minimum eight characters consisting of atleast one upper case (A-Z), one lower case (a-z), one numeric value (0-9) and a special character. Kindly note that the Shareholders holding shares in demat form would be able to use the user ID and password for voting on resolutions of any other Company, on which they are eligible to vote, provided that the Company opts for e-voting through Karvy Computershare Private Limited e-Voting platform. Systems will prompt you to update any contact details like mobile number, email ID, etc. On 1st login. You may also enter the Secret Question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

g. You need to login again with the new credentials.

h. On successful login, system will prompt to select the “Event” i.e. Innoventive Industries Limited.

i. On the voting page, you will see the description of the resolution along with the option ‘FOR/ AGAINST/ ABSTAIN’ for

voting. Enter the number of shares (which represents number of votes) under ‘FOR/ AGAINST/ ABSTAIN’ or alternatively you may partially enter any votes in ‘FOR’ and partially in ‘AGAINST’, such that the total number of shares in ‘FOR/ AGAINST’ taken together should not exceed your total shareholding. If the shareholder do not want to cast, select ‘ABSTAIN’

j. After selecting the resolution you have decided to vote on, click on “SUBMIT” button. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

k. Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

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l. Corporates/ Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF format) of the relevant Board Resolution/Authority letter etc., together with attested specimen signature(s) of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to [email protected] with a copy marked to [email protected]. The file with the scanned image of the Board Resolution should be in the naming format “Corporate Name_Event no.”

m. The Members can opt for only one mode of voting i.e. either through e-voting or by Ballot. If a Member casts votes by both modes, then voting done through e-voting shall prevail and Ballot shall be treated as invalid.

n. Shareholders can cast their vote online till such time they have voted on all the resolutions or till the end of the voting period i.e. the last date of receipt of the postal ballot form, whichever is earlier.

o. In case a person has become the Member of the Company after the dispatch of Notice but on or before the cut-off date i.e. 9th July, 2015 , may write to the Karvy on the email Id: [email protected] or contact to Mr. P.A. Varghese on Contact No. 040-33215424, at [Unit: Innoventive Industries Limited] Karvy Computershare Private Limited, Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032, requesting for the User ID and Password. After receipt of the above credentials, please follow all the steps from Sr. No. a. to n. as mentioned above, to cast the vote.

p. In case a Member receives physical copy of the Notice of AGM (for Members whose email addresses are not registered with the Company/Depositories): Members will receive a Ballot Form along with the Annual Report. They have two options: i. To opt for e-voting by using the initial password that is provided in the enclosed Ballot Form. Follow all steps as given in Sr. No. a. to Sr. No. n. above, to cast your vote. OR ii. To opt for casting your vote in physical form, fill in the Ballot Form and post it to the address mentioned in the enclosed Business Reply Envelope.

q. Other Instructions:

i. The e-voting period commences on Sunday, 12th July, 2015 (9.00 a.m. IST) and ends on Tuesday, 14th July, 2015 (5.00 p.m. IST). During this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on 9th July 2015, may cast their vote electronically. The e-voting module shall be disabled by Karvy for voting thereafter. Once the vote on a resolution is cast by the Member, he shall not be allowed to change it subsequently.

ii. The voting rights of Members shall be in proportion to their shares of the paid up equity share capital of the Company as on 9th July, 2015.

iii. Mr. Manoj Soni, Practicing Company Secretary (Membership No. FCS 6434), partner of M/s MRV Associates,

Company Secretaries, Pune; has been appointed as the Scrutinizer to scrutinize the e-voting process (including the Ballot Form received from the Members who do not have access to the e-voting process) in a fair and transparent manner.

iv. The Scrutinizer shall, within a period not exceeding three working days from the conclusion of the e-voting

period, unblock the votes in the presence of at least two witnesses (not in the employment of the Company) and make a Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.



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v. Members who do not have access to e-voting facility may send duly completed Ballot Form (enclosed with the Annual Report) so as to reach the Scrutinizer appointed by the Board of Directors of the Company, Mr. Manoj Soni, Practicing Company Secretary, (Membership No. FCS 6434), partner of M/s MRV Associates, Company Secretaries, Pune; at the Registered Office of the Company not later than Tuesday, 14th July, 2015 (5.00 p.m. IST).

vi. Members have the option to request for physical copy of the Ballot Form by sending an e-mail to [email protected] by mentioning their Folio No./ DP ID and Client ID No. However, the duly completed Ballot Forms should reach the Registered Office of the Company not later than Tuesday, 14th July, 2015 (5.00 p.m. IST).

vii. Ballot Forms received after this date will be treated as invalid.

viii. The results declared along with the Scrutinizer’s Report shall be placed on the Company’s website

http://www.innoventive.in/and on the website of Karvy: www.karvy.com within two days of the passing of the resolutions at the 23rd AGM of the Company on 15th July, 2015 and communicated to the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, where the shares of the Company are listed.


Chandu Chavan Pune, 12th June, 2015 Chairman & Managing Director Registered Office: Gat No. 56/4/5, Pimple Jagtap, Taluka- Shirur, District Pune- 412208 Maharashtra, India

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Notice

STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 As required by section 102 of the Companies Act, 2013 (Act), the following statement sets out all material facts relating to the business mentioned under Item No. 4 of the accompanying Notice: Item No. 4 The Company had, pursuant to the provisions of Section 161 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of the Listing Agreements entered with the Stock Exchanges, appointed Mrs. Pournima Gadiya (DIN 06941211), as an additional director of the Company who holds office up to the date of this AGM. Further, Mrs. Pournima Gadiya, qualifies for being appointed as an Independent Director of the Company pursuant to Section 149 read with Schedule IV of the Companies Act, 2013. The Company has received a notice in writing pursuant to Section 160 of the Companies Act, 2013, proposing her candidature for the office of the Director of the Company, therefore, approval of the members is required for appointing her as an Independent Director, not liable to retire by rotation and to hold office for a term of 5 (five) consecutive years. A brief profile of Mrs. Pournima Gadiya is given below: Mrs. Pournima Gadiya is a renowned social worker having rich experience of 20 years in the said field. She has completed her graduation in Home Science (Child Development) from SNDT University and her masters in Social Service from Karve Institute of Social Sciences affiliated to the Pune University. She has established voluntary organisations named Disha Institute and Disha Mahila Vikas Sahakari Sewa Society. She is also associated as a counselor with Aga Khan Foundation, International Agency. The Board of Directors accordingly recommends the resolution as set out in Item no. 4 of the Notice for approval of Members. None of the Directors or Key Managerial Personnel or their relatives are in any way concerned/ interested in the above resolution.


Chandu Chavan

Pune, 12th June, 2015 Chairman & Managing Director Registered Office: Gat No. 56/4/5, Pimple Jagtap, Taluka- Shirur, District Pune- 412208 Maharashtra, India

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ANNEXURE PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT WITH THE STOCK EXCHANGES, INFORMATION ABOUT THE DIRECTOR PROPOSED TO BE RE-APPOINTED IS FURNISHED BELOW:

RAVINDRA KATRE

Profile:

Mr. Ravindra Katre, aged 48 years, completed his Diploma in Mechanical Engineering from Cusrow Wadia Institute of Technology, Pune, in 1984. Mr. Katre is a post graduate in Management Sciences from the University of Pune. He joined BAL in 1985, where he handled the materials department for a period of 14 years. He joined M/s. Phoenix Enterprises in 1999. Mr. Katre joined the Board of Directors of our Company on November 1, 2002; and has since been an integral part of our Company’s management team. Broadly, Mr. Katre oversees raw material procurement and supervises the operations of sheet division of our Company.

Public Companies (other than Innoventive Industries Limited) in which Mr. Ravindra Katre hold directorships and committee memberships.

Directorships Nil

Chairman of Board Committees Nil

Member of Board Committees Nil

Mr. Ravindra Katre holds 38,24,437 equity shares of the Company.

He is not related to any other director on the Board of the Company as per Section 6 of the Companies Act, 1956.

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Directors’ Report To The Members Innoventive Industries Limited Pune We are delighted to present the report on our business and operations for the year ended 31st March, 2014. Following are the financial highlights of the year under review: FINANCIAL HIGHLIGHTS: Particulars Turnover / Income (Gross) Turnover / Income (Net) Other Income Total Expenditures (Including Interest & Depreciation) Profit Before Tax Provision for Tax

Current Deferred MAT ( Credit ) Tax for Earlier Period

Profit After Tax Balance Brought forward from last year Profit Available for Appropriation Appropriations

Reversal/ Proposed Dividend on Equity Reversal/ Dividend Distribution Tax

General Reserve Surplus Carried over to Balance sheet EPS (Face value - ₹ 10/- per equity share)

Year Ended March 31, 2014

(₹ In Lacs except per share data)

41,388.03 38,646.51 11,274.49

93,809.56

(43,888.56)

- (5,137.14)

4,700.96 13.25

(43,465.63)

15,029.25 -

565.52 96.11

- (27,774.75)

(72.88)


(₹ In Lacs except per share data)

68,972.24 63,849.73

3,899.66

60,420.72

7,328.67

1,571.60 1,216.35

(1,367.00) 255.68

5,652.04

10,640.41 16,292.45

-

596.44 101.36 565.40

15,029.25 9.48

Note: Figures of previous year have been regrouped wherever necessary.

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Statutory Reports Notice Management Discussion & Analysis Directors’ Report Corporate Governance Directors’ Report SUBSIDIARIES AND STEP-DOWN SUBSIDIARIES The business of your Company is spread across various engineering sectors through its subsidiaries as detailed below:


Sankalp Engineering & Services

Private Limited

Innovative Technomics

Private Limited

Saicon Steels

Private Limited

Seven Star Electrodes

Private Limited

Arihant Steel and

Metal Wires Private Limited

Arihant Auto

Components Private Limited

Innoventive Americas,

INC.

Innoventive Industries UK Limited

Sankalp Americas,

INC. Sankalp

Middle East, FZE

Salem Steel NA, LLC

FINANCIAL STATEMENTS OF THE SUBSIDIARY COMPANIES A company having subsidiaries is required to attach to the Directors’ Report, Balance Sheet and Statement of Profit & Loss of its subsidiaries pursuant to Section 212 of the Companies Act, 1956. However, if such companies publish the audited consolidated financial statement in the Annual Report, they get exemption from complying with the Section 212 vide General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India. In view of the above, Annual Report 2013-14 of your Company does not contain the annual reports of its subsidiaries. A statement containing summarized financials which includes reserves, total assets, total liabilities, investments, total sales, profit before tax etc. of all subsidiaries is included in this report. The audited annual accounts and related information of subsidiaries will be made available upon request. These documents will also be available for inspection during business hours at registered office of the Company. DIVIDEND Your Directors have not recommended any dividend for financial year ended 31st March, 2014. DEPOSITS Your Company has not accepted any public deposits during the year under review.

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Directors’ Report

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 and the Companies (Particulars of Employees) Amendment Rules, 2011, the name and other particulars of employees are set out below. Particulars Name & Designation Qualification Age Date of Joining Experience (Years) Gross Remuneration (₹ In Lacs) Previous Employment Designation Details of Shareholding

Details Ravindra Katre, Whole-time Director Post Graduate in Management Science and Diploma in Mechanical Engineering. 48 years 01.11.2002 28 60.00 Phoenix Enterprises - Head Commercial 38,24,437 equity shares are held in his name

DIRECTORS In terms of the Companies Act, 2013; Mr. Ravindra Katre (DIN 00035125) retires at the ensuing Annual General Meeting. Further, being eligible, he offers himself for reappointment. During the year, Mrs. Deepali Agrawal (DIN 05103218), nominee of Export-Import Bank of India, was appointed on the Board of Directors of the Company with effect from 15th March, 2014. Following directors stepped down from the Board of the Company:

Name of the director DIN Date of Cessation Mr. Sanjay Waghulade 00193404 13.09.2013 Mr. Laxman Sankade 01748185 15.10.2013 Mr. Yashpaul Gupta 02971635 20.10.2013 Mr. Rajendra Jagdale 02700270 14.08.2014

The Board places on record its appreciation for the services rendered by the aforesaid directors during their respective tenure as directors of the Company. At present, your Company has 3 (Three) Non-Executive Directors who are Independent Directors pursuant to the provisions of the Clause 49 of the Listing Agreement. Pursuant to Section 149 of the Companies Act, 2013, every listed company shall have at least one-third of its total strength of the Board of Directors as Independent Directors. Based on the present composition of the Board of Directors and the number of Independent Directors, the Company complies with this requirement.

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Directors’ Report AUDITORS B.K. Khare & Co., Chartered Accountants, Pune retire at the ensuing Annual General Meeting. The said auditors shall be re-appointed in the forthcoming Annual General Meeting subject to their willingness and eligibility. COST AUDIT The Company had appointed M/s. A. J. Paranjape & Co, Cost Management Accountant for conducting the audit of cost records of the Company for the financial year 2013-14. The due date for submission of the Cost Audit Report to the Central Government is 27th September, 2014.

CORPORATE SOCIAL RESPONSIBILITY (CSR) Your Company is committed to improve the quality of life of the work force and their families and also the community. Further, the Company believes that undertaking activities in such a manner that promote the interest of all stake holders and society will help overall development of the society.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION This information pursuant to the provision 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 included in this report as Annexure A. This includes information in relation to energy conservation and research and development activities undertaken by the Company. FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign exchange earnings (FOB Value of exports) - ₹ 3,256.04 Lacs (previous year ₹ 4,785.19 Lacs) Foreign exchange outgo - ₹ 238.83 Lacs (previous year ₹ 1,342.43 Lacs)

DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act 1956, with respect to the Directors’ Responsibility Statement, it is hereby confirmed: 1. that in the preparation of the annual accounts for the financial year ended on 31

st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. that the Directors have selected such accounting policies and applied them consistently and made judgments and

estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Loss of the Company for the year under review;

3. that the Directors have 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;

4. that the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a `Going Concern basis’.

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Directors’ Report

CAUTIONARY STATEMENT Your Company has taken due caution while preparing this Annual Report (‘the Report’). The Report may contain futuristic or forward looking statements, which the management believes to be true to the best of their knowledge. However, actual results may differ from those mentioned in the Report.

ACKNOWLEDGEMENT Your Directors express their grateful thanks and appreciation for the assistance and co-operation received from the investors, shareholders, bankers, government authorities and business associates during the year under review. Your Directors also wish to place on record their appreciation for the excellent performance and contribution of the employees to the Company’s progress during the year under review.

For and on behalf of the Board of Directors Innoventive Industries Limited

Place: Pune Date: 14th August, 2014

Chandu Chavan Chairman & Managing Director

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Statutory Reports Notice Management Discussion & Analysis Directors’ Report Corporate Governance Directors’ Report

ANNEXURE ‘A’ Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of Directors’ Report.

(A) Power and Fuel Consumption

Sr. No. Particulars

1. Electricity & Fuel Consumption Total Amount Rate/Unit (₹ ) for electricity Avg. Rate/Unit (₹ ) for fuel Generation

2. Coal:

3. Other/Internal Generation:


564.90 7.03

43 N. A.

NIL

NIL


1065.99 7.03

43 N. A.

NIL

NIL

(B) Consumption per Unit of Production

In view of the heterogeneous product mix the consumption per unit of product has not been indicated for the various products/units. However the efforts are being made to arrive at such figures in the years to come.

Conservation of Energy Company makes evaluation on a continuous basis to explore new technologies and techniques to make the operations of pilgering machine and other manufacturing activities more energy efficient. This includes regular maintenance of machineries and regular check-up of energy consuming devices. Technology Absorption, Adaptation, Innovation and Research & Development Your Company has regularly carried out research and development on its own to make manufacturing process more efficient and broaden its product range. Moreover, in-house R&D efforts have helped the Company to develop processes, and technology to make manufacturing process more efficient and broaden its product range.

For and on behalf of the Board of Directors Innoventive Industries Limited

Place: Pune Date: 14th August, 2014

Chandu Chavan

C Chairman & Managing Director

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Statement Pursuant to Section 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES

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Management Discussion & Analysis I. MACRO-ECONOMIC OVERVIEW

Financial Year 2013-2014 was a challenging year for the global economy, and in particular, for India. At present global steel demand recovery continues but growth is stabilizing at a lower rate with continued volatility and uncertainty in the many emerging economies leading to a challenging environment for steel companies. Hence demand slowdown from key consuming industries, affected sales volumes and also led to a softening in overall sales realization. On the other hand, input costs remained at high levels, notwithstanding a moderation in international prices, leading to a reduction in the operating profitability of steel players in the sector. The emerging economy however continues to struggle with structural issues and financial market volatility. The global economic growth was adversely impacted in 2013-14 by sluggish economic performance in the advanced economies. The emerging market and developing economies, as a group, registered a marked decline in growth rates. The global growth is projected to record strong numbers during the next couple of years. This growth will be mainly from market expansion in leading emerging nations. There continues to be inherent uncertainty across many regions but despite the rough industrial tide, developed markets are expected to inch towards greater stability while emerging markets are expected to rediscover growth momentum in 2015.

II. INDIAN ECONOMY

The reason for the sluggishness in the domestic economy could be attributed mainly to bottlenecks in infrastructure, inadequacy of fuel supply linkages, especially domestic coal as well as restrictions on mining in previously allocated coal blocks and slower capital investment owing to government indecisiveness. Also cost increases which are difficult to be passed on to customers have eroded profitability and to that extent adversely impacted newer investment prospects.

III. OUTLOOK-INNOVENTIVE INDUSTRIES LTD. (IIL) IIL is a multi-product engineering company manufacturing precision steel tubes, membrane panel strips, auto components, oil well drilling couplings, pup joints, high voltage soft starters and other steel products catering to applications in diverse sectors such as transportation, power, oil & gas and general engineering, etc. Business Review: FY 2013-14 has been a challenging year for the Company as growth has been sluggish owing to a weak business sentiment. Your Company acquired a 51% stake in Innovative Technomics Pvt. Ltd in last year which manufactures high voltage soft starters and testing equipment for domestic and global markets. We believe this acquisition can enable our transformation into a diversified engineering company. As you all are aware company is going through many financial challenges, we will hereby provide a summary of the challenges and opportunities before your Company, against the backdrop of the current business scenario. In addition to the global economic slowdown company had some major problems which resulted in to the financial pressure. Downtrend in end user industries The Company’s Tube & Auto division largely caters to the “Automobile Components” segment. The Auto & Auto Components sectors in India have been facing a slowdown in the last few years. With the adverse currency movement and increasing fuel prices, automobile sales have been reducing.

As a result, the demand for the Company’s product as well as selling prices has been adversely impacted in the last few months of the past year and the current year till date. The Company’s Membrane division services the “Power Equipment” & “Oil & Gas” segments.

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Management Discussion & Analysis The stalemate in coal policy has severely impacted this division as they make membrane strips used by boiler industry. With the delay in setting up of Power Projects in India, the boiler business has suffered. As a result the division was not able to stabilize production and hence operating at sub optimal capacity. The revenue generated is therefore not adequate to meet costs, thus resulting in lower margins. Changes in Product Mix During FY 2013-14, the Company had decided to focus on lower margin products and increase outlay on new product development Above measure have reduced the Company’s margins, which coupled with the current adverse economic scenario have impacted the liquidity position of the Company severely. Strike at Bajaj Auto Ltd. There was a prolonged strike in Bajaj, Pune unit, to which the Company’s Auto Division is a major supplier. The strike continued for almost 50 days from 26th June 2013 to 14th August 2013.Over 85-90% of the revenues of the Auto Division are from Bajaj. Increase in low margin trading activity This strike impacted the Company’s revenues and together with the lower offtake of tubes in the domestic market, the Company had to resort to trading activities to supplement its operations The margins in trading are small and this has resulted in the company reporting lower margins as compared to the past.

Stretching of Working Capital Due to the economic slowdown and recession in the auto industry some of the Company’s customers are facing liquidity issues and are delaying payments /defaulting on bills acceptances. This has affected the liquidity of company. Regardless, the company met all its financial commitments like L/C retirements, Interest on term loans and working capital and instalments of term loans till June 2013. Part of the interest for July had also been funded. However, since then it became extremely difficult and the company started defaulting on L/C commitments and interest. Working limits were drawn in full and so banks stopped providing further assistance. Post referral to CDR the company had been functioning at a low capacity with the help from creditors and advance from export customers. Most of the production (tubes) at present is for Exports and auto components to meet the requirements of Bajaj Auto.

Since, the working capital limits were fully overdrawn, there was an urgent need to infuse some working capital to enable the company to carry on the production uninterrupted. This became very relevant, since the demand seemed to be picking up. In spite of the above mentioned problems due to slowdown in the economy our company managed to sustain. The plants at the factory operated and the Company achieved average sales turnover. The Reserves and Surplus of the Company were completely exhausted due to adverse business, financial and economic circumstances and resulted in a negative balance of ₹ 7. 06 Cr.

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Management Discussion & Analysis

IV APPROVAL FOR CORPORATE DEBT RESTRUCTURING (CDR) In order to rebuild its operations strongly, Company initiated a process of restructuring its debt and accordingly made a reference to the Corporate Debt Restructuring (CDR) cell. The Company had approached its lead banker and lender, i.e., Central Bank of India and Bank of Maharashtra for restructuring of its debt under CDR mechanism, and accordingly, the lead banker referred the matter to CDR Empowered Group and subsequently the case of the Company was admitted under CDR and the CDR scheme was discussed and approved in the meeting held on 28th June, 2014 and the same was informed to the Company vide letter of approval [BY.CDR(SSA)/No.236/2014-15] dated 30th June, 2014. Upon completion of the CDR process, your Company’s liquidity position is expected to improve, supported by rescheduled loan repayments, funding of working capital interest for one year and long term loan interest for twenty months by lenders and reduction in rate of interest. This would also help in improving your Company’s performance in the quarters to come. V. FINANCIAL REVIEW The Company delivered a moderate performance in revenues; with a Loss of Rs. 438.88 crores as against a profit of Rs. 73.28 crores in the previous year. A) Profit and loss account Revenue decreased from ₹ 638.50 crores in the year 2012- 13 to ₹ 386.47 crores in 2013-14. After providing tax expense, PAT (Loss) stood at ₹ 434.65 crores for 2013-2014 as compared to PAT (Profit) of ₹ 56.52 crores for the previous financial year. This loss was due to lesser capacity utilization on account of Working Capital constraints and higher interest costs. Expenditure: Total operational costs were ₹ 938.10 crores in 2013-14. B) Balance sheet During the year, we have received a VAT refund of

₹ 32.41 crore for FY14 from the Directorate of Industries, Government of Maharashtra (GoM). V I SEGMENT WISE BUSINESS PERFORMANCE

A. PRECISION TUBE SEGMENT

Business Performance: In F Y 13-14 revenue for this division was at ₹ 110.17crores. We employ our patented cold pilgering process and to manufacture CEW/DOM tubes which significantly reduces cost and improves our margins for these tubes which sell in lower volumes but enjoy higher realisations. Membrane Panel Strips is an import substitute product and also contributes to the sales of this division. However there has been significant impact on the sales of Membrane Panel Strips due to unclear Government policy on Coal Distribution, adversely affecting the under development and upcoming power projects.

B. AUTO COMPONENTS SEGMENT

Business Performance: Revenue from this segment grew for the year was flat at ₹ 185.48 crore versus ₹ 174.13 crore in FY13. The Company manufactures various products for this segment from its precision steel tubes, sheets and different raw materials. During the year we have undertaken commercial trials and sales for bearing spacers. Bajaj Auto continues to be one of our oldest clients for this division and continues to stand by our manufacturing capabilities.

C. COLD ROLLED COILS & OTHER PRODUCTS SEGMENT

Business Performance: In FY14 revenue for this division was grew at ₹ 90.81 crore in comparison to ₹ 64.70 crore in FY 13. The Company and its subsidiaries manufactures Cold Rolled (CR) Coils, Cold Rolled Sheets Strips, Metal Wires, Laminates and Stampings, etc.

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Statutory Reports Statutory Report Notice Management Discussion & Analysis Directors’ Report Corporate Governance

Management Discussion & Analysis

Given the current pressures in industry, demand for these products has been sluggish from the various end-user industries.

V I I PERFORMANCE ANALYSIS

A. STRENGTHS Diversified Operations: A diverse range of products manufactured by IIL finds application in several sectors. The Company services customers in the power, automobiles, oil & gas, farm equipment and general engineering segments. Process ‘Engineering’ Expertise: IIL has developed a proprietary ‘cold pilgering’ process which was granted a patent and valid for 20 years effective April 24, 2009 to manufacture CEW (Cold drawn electric welded) / DOM (drawn over mandrel) tubes. Utilisation of this process helps in significantly reducing the requirement of resources like material, labour, electricity when compared to the conventional draw bench process. Apart from savings in cost, the end product is augmented in characteristics through better surface finish, higher tensile strength and improved quality. IIL is employing its process expertise to manufacture a wider range of products. This process has helped the Company remain cost competitive in manufacturing on a global scale. Strong Leadership Team: IIL is led by a team of experienced technocrats and well qualified professionals.

Many of its employees and management personnel have several years of experience in the industry and possess relevant industry knowledge and expertise, including the ability to improve operational performance of acquired assets. Through this team IIL enjoys deep and relevant expertise in the sector which positions it well to establish global operations. Customer Base: The Company through its consistent delivery of quality products has built long standing relationships with a host of companies. Some of its direct & indirect clients include international companies like Shell, Saudi Aramco, Arcelor Mittal, as well as leading domestic companies like BHEL, Bajaj Auto, and Thermax to name a few.

Regulatory Incentives: Under the Industrial Promotional Subsidy (IPS) scheme Unit II of the company has been awarded a ‘mega project’ status under which it is eligible for VAT/CST refund for sales undertaken from this unit. Further this tenure has been increased by 2 years till FY2018 and the amount has been capped at INR 562 crore. This has greatlyreduced the capital outlay in seting up capacity. We have availed of Government incentives which help ease the burden of capital outlay and entered into negotiations with suppliers, banks and customers to effectively manage our working capital requirements. Barriers to entry: Your Company enjoys several advantages including proprietary technologies, robust track record, rich customer base and API Certifications which act as a barrier to entry. The API (American Petroleum Institute) certification is an industry standard for manufacturers aiming to cater to the oil & gas exploration sector. WEAKNESSES

Financial Position: Your Company has a very challenging year with very high debt levels due to slowdown in infrastructural sector demand and high interest rates. Delay in project execution due to external reasons, hardening of interest rates and extended working capital cycle affected the profitability.

Capacity Utilisation: Our business being capital intensive is sensitive to a drop in capacity utilization which could put significant pressure on our breakeven point. A significant underutilization may lead to under absorption of fixed costs. Raw Materials: Our supply contracts have clauses to pass on increase in raw materials at periodic intervals but any unforeseen or unexpected rise in the price of raw materials in a short period of time may adversely impact our operations. Susceptible to delays: We are susceptible to delays in seting up new capacity or delay in timely procurement of raw materials. Requirement of special grade raw materials for our special products, accentuates the procurement delays.

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Management Discussion & Analysis Further, we may face delays owing to business in new markets. These delays or cost escalations may impact our profitability. Capital Intensity: The nature of our business has requirements for both capital outlay as well as working capital. In order to set up capacities significant investments are required in land, building, plant & machinery prior to commencing operations. Similarly, working capital investments in materials, resources, labour, machine implements, tools and dies are also fairly significant.

C. OPPORTUNITIES Research & Development: The in-house R&D setup has helped the company to develop processes, tools & technology to make its manufacturing process more efficient and broaden its product range. Further, initiatives are underway to explore improvements to manufacturing processes of synergistic products and to discover new applications for existing expertise. Improving product mix: Our product portfolio is constantly enhanced with newer products as well as improved processes for products which have been in existence for several years. Further, the industries that we cater to are at different phases of growth and our customers have varying requirements. The margins on our products vary and some of our niche products which require higher manufacturing complexity enjoy better margins. Additionally, some of our newly launched products are unique (e.g. bimetallic tubes) with specific applications. There is an opportunity for us to alter the product mix to increase the share of niche, high value products which will result in an improvement in blended margins at the company level. New Industries: While IIL currently caters primarily to the precision tubes, automobile components oil & gas, general engineering segments there are several other industries which may require similar products or whose manufacturing processes are synergistic to ours. In order to enhance its capabilities and strengthen its business model, the company will look to broaden its product range to cater to newer industries which demonstrate significant potential. New Markets: IIL manufacturing capabilities are highly competitive and it aims to leverage its process expertise to exploit cost arbitrage in several markets. The company

is currently focused on enhancing and expanding its global reach and distribution network to allow it to access a wider customer base by entering newer markets and regions. D) THREATS Economic Slowdown: The continued listless performance of the domestic economy could further dampen the growth of our business. Macro-economic issues such as sustained-high inflation, continued high interest rates, declining currency value and policy paralysis pose a threat to reviving GDP growth. Regulatory and Political Risks: Any measures adopted by the government to regulate the industries we serve or specific to our industry can impact our progress. An increase in regulation or the incidence of increase levy and charges could also hamper profitability. A premature withdrawal of subsidies and incentives granted to us can alter expected returns. The uncertain political environment resulting in policy flip flops can have an adverse effect on aggregate demand for our products.

Currency Fluctuation: Rupee has fallen and depreciated considerably against the USD over Statutory Reports recent months. As a result this shall increase the future cash outflows towards loan repayments to be made for the outstanding External Commercial Borrowings (ECBs) and other foreign currency loans of the Company.

Disruptive technologies: The pace of technological change has increased and industries can be impacted by disruptive technology. Any new technologies that impact our customers industries could also affect the requirement for our products catering to those industries. Increasing Competition: The size and scale of the manufacturing sector in India and its increasing popularity on a global scale as well as the healthy demand for our products may attract more players resulting in intensifying competition. This may result in re-pricing of products as well as competition for resources like labour, materials and suitable operating sites which are in limited supply. All of these factors could have a bearing on growth and performance of our business.

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Management Discussion & Analysis VIII. INTERNAL CONTROLS The Company and its management have implemented comprehensive systems and processes commensurate with the Company’s size to ensure the highest level of internal controls. These ensure that its assets and interests are carefully protected; checks and balances are in place to determine the accuracy and reliability of accounting data. Well documented processes have been implemented throughout the organization to ensure that policies are promoted and adhered to. There are clear demarcation of roles and responsibilities at various levels of operations. The Internal Control system aims to make sure that the business operations function eficiently, applicable laws, rules, regulations, policies of the Company are followed and the reliability of financial reporting. The Finance Department implements and monitors the internal control environment and compliance with statutory requirements. IX.HUMAN RESOURCES Your Company understands the value of a talented work force and keeping this in mind has put various talent retention policies in place. During the year, the Company has entered into a wage settlement agreement with workers’. In its endeavor to retain its staff, the Company has also undertaken a salary revision for its staff. It has combined the experience and expertise of seasoned professionals with the rich skills of its mid-management team and fresh energetic talent. The Company has worked towards building a more effective organizational structure across all business verticals and creating a leadership pipeline. At the same time there is considerable effort towards imbibing core values such as integrity, teamwork, accountability and respect for individual talent. The result is focus and delivery. Active employee engagement in the business, strong employee oriented HR policies and competitive compensation have helped in enhancing the productivity of the workforce. Periodically, various training programs have been conducted to improve both their professional and personal lives, thereby improving individual growth and achieving the organizational goals. As per recognised industry standards various safety and health measures have been initiated.

X. RISK MANAGEMENT Your Company recognizes the importance of risk management as a constituent of business strategy and a key ingredient for long-term sustainability. It strongly believes that robust processes provide a safety net for our global operations and that customers and stakeholders can be secure in the knowledge that the sustainability and continuity of its business is assured. It has a well-structured risk mitigation framework covering key elements of its global operations. The Management periodically reviews the risk assessment procedure and risk mitigation procedures laid down by the Company. XI.CAUTIONARY STATEMENT Statements in the Management Discussion and Analysis describing the Company’s objectives, expectations, predictions and assumptions may be ‘forward looking’ within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed herein, important factors that could influence the Company’s operations include global and domestic economic conditions affecting demand, supply, price conditions, change in Government’s regulations, tax regimes and other factors such as litigation and industrial relations.

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Statutory Reports Notice Management Discussion & Analysis Directors’ Report Corporate Governance Report On Corporate Governance

1. PHILOSOPHY ON CODE OF GOVERNANCE

Corporate Governance is a set of systems which ensure that the affairs of the Company are being managed to maximize stakeholders’ value. The Company has inherited legacy of social responsibility to all stakeholders of the Company. Further, it is committed to implement sound corporate governance practices to ensure transparency in its operations and maximize stakeholders’ value. Through the Governance mechanism in the Company, the Board along with its Committees undertakes its fiduciary responsibilities to all its stakeholders by ensuring transparency and independence in its decision making. The Company has complied with the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. The disclosure requirements of Clause 49 of the Listing Agreement are given in this report.

2. THE BOARD OF DIRECTORS The Board of Directors has a combination of Executive, Non-Executive and Independent Directors. Independent Directors help to maintain the independence of the Board and separate the Board functions of governance and management.

The Board consists of five Directors consisting of two Executive Directors and three Independent Directors. The Chairman of the Board is an Executive Director. No member of the Board is member of more than ten Committees or Chairman of more than five Committees. Further, no Director is related to each other.

There were 5(five) Board meetings held during the year. The gap between any two Board Meetings does not exceed four months. Following are the details of Directors, their attendance at Board Meetings, Committee Meetings and last Annual General Meeting.

Name of the Category Director

No. of Board Meetings

attended in the FY 2013-14

Attendance at the last

AGM Directorships in Public Companies including

our Company* Chairman Member

Committee positions in Public Companies

including our Company**

Chairman Member

No. of equity

shares held as on

31.03.2014

Mr. Chandu Chavan (Promoter)

Mr. Ravindra Katre (Promoter)

Mr. Sanjay Waghulade (Promoter)

Mr. Ramprasad Joshi

Mr. Yashpaul Gupta

Mr. Pradeep Tupe

Dr. Rajendra

Jagdale

Chairman & 5 Managing Director Whole time 5 Director Whole-time 2 Director Independent 2Director Independent 2 Director Independent 5 Director Independent 0 Director

Yes 1 1 1 2 Yes 0 1 0 2 Yes 0 1 0 2 No 0 3 3 4 Yes 0 1 1 1 Yes 0 3 3 4 No 0 2 0 0

13278700 3824437

3142601

Nil

Nil

Nil

Nil

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Name of the Category Director

No. of Board Meetings

attended in the Financial Year2013-14

Attendance at the last

AGM Directorships in Public Companies including

our Company* Chairman Member

Committee positions in Public Companies

including our Company**

Chairman Member

No. of equity

shares held as on

31.03.2014

Mr. Sanjay Asher

Mrs. Deepali Manish Agrawal

Mr. Laxman Nathuji Sankade Mr. Ramarathnam Kovathakudi

Mr. Rahul Raisurana Mr. William Sovak

Ms. Bhagyam

Ramani

Independent 5Director Nominee Director 0

Independent Director 0 Whole-Time Director 0 Nominee Director 0 Nominee Director 0 Independent 0

Director

Yes 0 16## 5 11# Nil

No 0 1 0 0 Nil No 0 0 0 0 Nil No 0 0 0 0 Nil No 0 0 0 0 Nil

No 7 0 0 0 Nil No 9 - - - Nil

* It does not include: a) Private Company including Private Company which is a subsidiary of a Public Company b) Company formed or

incorporated under section 25 of the Companies Act, 1956 and c) Body Corporate / Company / Entity incorporated / established outside India d) LLPs

** It includes other Committees in addition to a) Audit Committee & b) Shareholders’ / Investors’ Grievance, Share Allotment and Share

Transfer Committee.

# As per clause 49 of the Listing Agreement, Chairmanship/ membership of the Audit Committee and the Shareholders’ Grievance Committee alone shall be considered. The director is not a member of more than 10 Committees as mentioned in clause 49 of the Listing Agreement.

## Alternate Director in 16th company.

Note: Information disclosed in above table has been taken from latest Form 24AA submitted by the Directors to the Board under Section

299 of the Companies Act, 1956.

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2. THE BOARD OF DIRECTORS

Compensation paid to directors in FY 2013-14

Following are the details of compensation paid to Directors during the financial year ending on March 31, 2014.

Name of the Director

Mr. Chandu Chavan

Mr. Ravindra Katre

Mr. Sanjay

Waghulade

Basic Salary

20.00

60.00

8.30

House Rent Allowance

-

-

-

Conveyance Allowance

-

-

-

Book Allowance

-

-

-

Education Allowance

-

-

-

Siting Perquisites Others Total Fees

- - - 20.00

- - 5.00 65.00

- - - 8.30

Mr. K. V. 35.10 - - - - - - - 35.10 Ramarathnam

Mr. - - - -Ramprasad Joshi

Mr. Yashpaul - - - -Gupta

Mr. Pradeep - - - -Tupe

Dr. Rajendra - - - -Jagdale

Mr. William - - - -Sean Sovak

Mr. Sanjay - - - -Asher

Mr. Rahul - - - -Raisurana

Ms. - - - -B h a g y a m Ramani

Mrs. Deepali Agrawal - - - - Mr. Laxman Nathuji - - - - Sankhade

- 0.60 - - 0.60 - 0.90 - - 0.90 - 1.50 - - 1.50 - - - - - - - - - - - 1.50 - - 1.50 - - - - - - - - - -

- - - - - - - -

Code of Conduct The Company has adopted a Code of Conduct for the Board and Senior Management pursuant to Clause 49 of the Listing Agreement. The Company has obtained declaration from Directors and Senior Management Personnel(s) affirming their compliance to the Code of Conduct for the current year. The Chairman has affirmed to the Board of Directors that this Code of Conduct has been complied with by the Board Members and Senior Management Personnel(s) and a declaration to that effect forms part of this report.

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3. THE COMMITTEES OF THE BOARD

The Board has constituted following committees.

Mandatory Committees: • Audit Committee • Shareholders’/ Investors’ Grievance, Share Allotment and Share Transfer Committee

Non - mandatory Committees • Working Group Committee

A. Audit Committee

The Audit Committee comprises of two Independent Directors and one Executive Director. The Chairman of the Committee is an Independent Director. There were 5 (five) meetings of the Committee held during the year.

The terms of reference of the Audit Committee include ensuring compliance with statutory and regulatory provisions, discussions on quarterly, half yearly and annual financial results, interaction with senior management, statutory and internal auditors, recommendation for re-appointment of auditors etc.

The details of the composition of the committee and attendance at its meetings are set out in the following table:


Mr. Pradeep Tupe Mr. Ramprasad Joshi Mr. Chandu Chavan

Designation in the Committee Member Member Chairman Member

Nature of Directorship in the Company Independent Director Independent Director Chairman & Managing Director

No. of Meetings Attended During the Year 5 2 5

B. Shareholders’/ Investors’ Grievance, Share Allotment and Share Transfer Committee

The Shareholders’/Investors’ Grievance Share Allotment and Share Transfer Committee consists of three Directors. It includes two Independent Directors and one Executive Director. The main function of the Committee is to look into the redressal of shareholders grievances.

Following are the details of composition of the Shareholders’/Investors’ Grievance Share Allotment and Share Transfer Committee.


Mr. Pradeep Tupe Mr. Ramprasad Joshi Mr. Chandu Chavan

Designation in the Committee Chairman Member Member

Nature of Directorship in the Company Independent Director Independent Director Chairman & Managing Director

During the Financial Year 2013-14 there were 12 complaints received from the Shareholders and these complaints were satisfactorily resolved by the Company.

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Report On Corporate Governance

C. Working Group Committee

The Working Group Committee comprises of three Directors. Two members of the Committee are Executive Directors of the Company and one is Independent Director. The primary function of the Working Group Committee includes reviewing ongoing operations of the Company, to carry such business as has been delegated by the Board. There were Sixteen (16) meetings held during the year. Following are the details of the meeting:


Mr. Chandu Chavan

Mr. Ravindra Katre Mr. Pradeep Tupe

Designation in the Committee Chairman Member Member

Nature of Directorship in the Company Chairman & Managing Director Whole time Director Independant Director

No. of Meetings Attended During the Year 16 16 5

4. GENERAL BODY MEETINGS

A. The details of last three years Annual General Meetings (AGMs) held are as below:

Financial Year

2012-13

2011-12

2010-11

Date & Time of Meeting 30/09/2013 10.30 A. M. 28/09/2012 10.30 A.M. 26/09/2011 10.30 A.M.

Details of Location Gat No. 56/4/5,

Pimple Jagtap, Taluka- Shirur, District Pune 412208. ‘Krishnaleela Garden’,

Plot No. 147, Opp: Duro Socks Co., Pune – Nagar Road, Sanaswadi, Pune 412208. ‘Krishnaleela Garden’,

Plot No. 147, Opp: Duro Socks Co., Pune – Nagar Road, Sanaswadi, Pune 412208. .

B. At the AGM held on 30th September, 2013; no special resolution was passed.

C. At the AGM held on 28th September, 2012 one Special Resolution was passed to make alteration, subject to the

approval of central government, in the Articles of Association of the Company authorizing the Company to increase the maximum number of Directors that can be appointed on the Board from 12 (twelve) to 14 (fourteen).

D. At the AGM held on 26th September, 2011 one Special Resolution was passed to alter the Articles of Association of

the Company for deleting Part B and permitting the Company to conduct meetings, send documents to members & directors, maintenance of records etc. through electronic mode.

E. There were no Postal Ballots conducted during the financial year 2013-2014

5. DISCLOSURES

i. There are no materially significant related party transactions which have potential conflict with the interest of the Company at large.

ii. No penalties or strictures have been imposed on the Company by the Stock Exchanges, SEBI or other statutory

authorities, on any matter related to capital markets.

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iii. The Company has not adopted any Whistle Blower Policy. However employees can raise their concern regarding any instance of unethical behavior to the attention of their immediate reporting authority, who is required to report the same to the Head of the concerned Department. Further, no person is denied an access to the management for unsolved issues.

iv. Clause 49 of the Listing Agreement mandates the company to obtain a certificate from either the auditors or

practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in the Clause. We have obtained a certificate to this effect and the same is included in this Annual Report. Further, the Company has not complied with non-mandatory requirements as prescribed in Annexure 1D to Clause 49.

v. The Chairman of the Company has certified to the Board, the specified matters, as required under Clause 49V of the

Listing Agreement.

6. MEANS OF COMMUNICATION

The quarterly, half-yearly and yearly results of the Company are published in the newspapers which includes Financial Express, Loksatta and Economic Times. The results of the Company are also posted on the website of the Company. The Company’s website www.innoventive.in provides various comprehensive information about the Company to the public.

The Annual Report of the Company covers Management Discussion & Analysis. It contains various matters such as global economy, Indian economy, segment wise revenue, business performance of the Company, industry overview, operational view etc.

7. GENERAL SHAREHOLDER INFORMATION

A. Annual General Meeting (Date, Time & Venue)

Date 15th July, 2015

Time 9:30 A.M.

Venue At Gat No. 56/4/5, Pimple Jagtap, Taluka- Shirur District Pune- 412 208, Maharashtra, India

B. Financial Year

01st April, 2013 to 31st March 2014

C. Date of Book Closure

From 9th July, 2015 to 15th July, 2015 (Both days inclusive)

D. Dividend Payment Date : N.A.

E. Listing on Stock Exchanges The equity shares of the Company are listed on the following two exchanges.

Name & Address of Stock Exchanges

Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001

National Stock Exchange of India Limited "Exchange Plaza" Bandra-Kurla Complex,

Bandra (East), Mumbai - 400 051

Stock Code 533402 INNOIND (Series EQ)

The ISIN of the Company is INE549I01011. The shares of the Company are traded in dematerialized form. The Company has connectivity with both the Depositories i.e. Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL).The Company has paid the Annual Listing Fees to both the Exchanges on time.

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7. GENERAL SHAREHOLDER INFORMATION

F. Shareholding Pattern

The Shareholding Pattern as on 31st March, 2014 of the Company is as mentioned below:

Sr. No Category of Shareholder

1. Promoters & Promoter Group 2. Foreign Bodies 3. Foreign Institutional Investor 4. Banks & FI 5. Clearing Members

6. Foreign Venture Capital Investor 7. Bodies Corporate

8. Mutual Funds

9. Non Resident Indians 10. Individual Holding

Total

No. of Shares Held

2,70,75,73280,38,632 84,87,225 14,82,803

56,224 41,63,223 19,61,538 30,00,000

3,28,893 50,49,729

59643999

Percentage of total Shareholding

45.40 13.48 14.23

2.49 0.09 6.98 3.29 5.03 0.55 8.47

100.00

G. Investor Correspondence

A shareholder/investor can forward complaints or queries to the following address for timely redressal of their queries:

Company Secretary Innoventive Industries Limited

Registrar & Share Transfer Agent Karvy Computershare Private Limited

Corporate Ofice No. 601 & 602, Nucleus Mall, 1 Church Road, Camp, Pune 411001. Tel No. +91-020-66203549, Fax No. +91-020-66203549 Email: [email protected] 17-24, Vittal Rao Nagar, Madhapur, Hyderabad – 500081. Andhra Pradesh, India. Tel No. +091-40-44655265 Fax No. +91-40-2331 1968

In terms of Clause 47 of the Listing Agreement, the designated email address for investor complaints is investor.grievance@ innoventive.in

I. Green Initiative

Company has already taken keen initiative to send notices, annual reports etc. to the shareholders at their email address as registered with Depositary Participants (DPs)/ Registrar & Transfer Agent. This is in pursuance of circular issued by Ministry of Corporate Affairs which allows to companies to send notices to shareholders through electronic mode. Shareholders are requested to register/update their e-mail address with their concerns DPs.

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Chairman’s Certificate

Declaration under Clause 49 I(D)(ii) by the Chairman & Managing Director of affirmation by the Board of Directors & Senior Management of Compliance with the Code of Conduct To The Members I, Chandu Chavan, Chairman & Managing Director of the Company, do hereby declare that all Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for Board of Directors and Senior Management of Innoventive Industries Limited for the financial year 2013-14. Chandu Chavan Chairman & Managing Director

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Certificate on Corporate Governance

To The Members of Innoventive Industries Limited We have examined the compliance of conditions of Corporate Governance by Innoventive Industries Limited for the year ended on March 31,2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the management .Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. 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 given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement. 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 APTE JOSHI AND ASSOCIATES Company Secretaries R. J. JOSHI Partner Membership No: FCS 4478 C PNo: 8774 Date: May 29, 2014 Place: Pune

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Standalone Financials

Auditors’ Report Balance Sheet

Statement of Profit & Loss Cash Flow Statement Notes



Standalone Financials Auditors’ Report Cash Flow Statement Balance Sheet Notes Statement of Profit & Loss

Auditors’ Report

To the Members of Innoventive Industries Limited Report on the Financial Statements 1. We have audited the accompanying financial statements of Innoventive Industries Limited (“the Company”), which comprise

the Balance Sheet as at March 31, 2014, and the Statements of Profit and Loss and Cash Flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements 2. The Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of

the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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




Auditors’ Report

Opinion 6. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give

the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by section 227(3) of the Act, 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 purpose of our audit;

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

c. the Balance Sheet, the Statement of Profit and Loss and Cash Flow dealt with by this Report are in agreement with the

books of account;

d. In our opinion, the Balance Sheet, the Statements of Profit and Loss and Cash Flow dealt with by this report, comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the

Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For B. K. Khare & Co. Chartered Accountants Firm’s Registration Number 105102W Prasad V. Paranjape Partner M.No.047296 Pune, May 29, 2014



Standalone Financials Auditors’ Report Balance Sheet Cash Flow Statement Statement of Profit & Loss Notes

Auditors’ Report

Annexure referred to in paragraph 7 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date

(i) (a) The Company is in the process of updating the fixed asset register to show full particulars, including quantitative details and situation of fixed assets.

(b) Fixed assets are physically verified by the management once in three years in accordance with a planned programme, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. However during the year the fixed assets have not been physically verified by the Company.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and appropriate adjustments have been made in the books for discrepancies noticed during physical verification.

(iii) (a) As informed, 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. Accordingly, provisions of the clause 4 (iii) (e), (f) and (g) of the Companies (Auditor's Report) Order, 2003 are not applicable and hence not commented upon.

The Company has granted an interest free unsecured loan to a company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1,420/- Lacs and the year-end balance to this party is Rs. 1,420/- Lacs.

(b) In our opinion and according to the information and explanation given to us, the other terms and conditions of loans granted by the company, secured or unsecured, are prima facie not prejudicial to the interest of the company.

(c) As informed by the Company, the aforesaid loan is repayable on demand. The Company has not demanded repayment

of the said loan during the year, thus, there is no default on the part of the party to whom the money has been lent.

(d) There is no overdue amount of loans granted to any company, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, the internal control system needs to be strengthened to make it commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

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Auditors’ Report

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

(b) ln our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public. Therefore, the provisions of section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 and rules framed thereunder are not applicable.

(vii) During the year, the Company did not have an internal audit system.

(viii) We have broadly reviewed the books of accounts maintained by the Company in respect of products where pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We however have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) Undisputed Statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues have not been regularly deposited with appropriate authorities and there have been delays in large number of cases.

(b) According to the information and explanations given to us, except for Income Tax, Maharashtra Value Added Tax, Central Sales Tax and Employees’ State Insurance Amounting to Rs. 1,167.54/- Lacs, Rs 78.10/- Lacs, 15.23/- Lacs, Rs. 0.05/- Lacs respectively, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute.

(x) The Company has an accumulated loss of Rs. 27,774.75/- Lacs at the end of the financial year and it has incurred cash losses

of Rs. 27,207.57/- Lacs in the current year and Rs. Nil in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has delayed in certain repayment of dues (including interest) to the financial institutions and banks. The delayed principal amount aggregates to Rs. 5,658.94/- Lacs (delays ranging from 1 to 274 days). The amount is outstanding at the balance sheet date.

(xii) According to the information and explanations given to us and based on the documents and records produced 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.




Auditors’ Report

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, we report that the Company has not used any funds raised on Short Term basis for Long Term Investment Purposes.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) 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 given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For B. K. Khare & Co. Chartered Accountants Firm registration number: 105102W

Prasad Paranjape Partner M. No.: 047296 Pune, May 29, 2014



Standalone Financials Auditors’ Report Cash flow Statement Balance Sheet Notes Statement of Profit & Loss

Balance Sheet As at 31st Match, 2014 (All amounts are in Indian Rupees Lacs unless otherwise stated)

Particulars Note No. 31 March 2014 31 March 2013 EQUITY AND LIABILITIES

Shareholders' Funds Share Capital 3 5,964.40 5,964.40 Reserves & Surplus 4 (706.30) 42,097.70 5,258.10 48,062.10 Non Current Liabilities Long Term Borrowings 5 17,648.44 20,282.35 Deferred Tax Liability (net) 6 665.72 5,802.87 Other Long Term Liabilities 7 345.04 150.46 18,659.20 26,235.68 Current Liabilities Short Term Borrowings 8 65,731.78 55,304.57 Trade Payables 9 7,613.86 4,499.26 Other Current Liabilities 9 13,841.05 10,743.56 Short Term Provisions 10 2,504.47 2,753.02 89,691.16 73,300.41 TOTAL 113,608.46 147,598.19 ASSETS

Non-Current Assets Fixed Assets

Tangible Assets 11 52,260.87 47,567.94 Intangible Assets 11 8,113.90 2,369.11 Capital Work in Progress 11 7,469.34 7,127.45 Intangible Assets Under Development 11 - 3,798.71

Non Current Investments 12 5,924.41 6,213.41 Long Term Loans and Advances 13 11,601.00 9,919.54 Other Non Current Assets 14 561.62 4,903.53 85,931.14 81,899.68 Current Assets Inventories 15 5,734.43 19,045.76 Trade Receivables 16 13,428.59 26,504.15 Cash & Bank Balances 17 1,934.77 2,298.46 Short Term Loans & Advances 18 1,964.65 5,617.19 Other Current Assets 19 4,614.88 12,232.95

27,677.32 65,698.51

TOTAL 113,608.46 147,598.19 Nature of business and Significant accounting policies 1 & 2 The accompanying notes are an integral part of the financial statements

As per our Report of even date For and on behalf of Board of Directors For B. K. Khare & Co of Innoventive Industries Limited Chartered Accountants Firm Regn No. 105102W Prasad Paranjape Chandu Chavan Ravindra Katre Partner Chairman & Managing Director Whole Time Director Pune May 29, 2014 Pune May 29, 2014




Auditors’ Report Balance Sheet Cash Flow Statement Statement of Profit & Loss Notes

Statement of Profit & Loss For The Year Ended March 31, 2014 (All amounts are in Indian Rupees Lacs unless otherwise stated)

As per our Report of even date For and on behalf of Board of Directors For B. K. Khare & Co of Innoventive Industries Limited Chartered Accountants Firm Regn No. 105102W

Prasad Paranjape Chandu Chavan Ravindra Katre Partner Chairman & Managing Director Whole Time Director Pune, May 29, 2014 Pune, May 29, 2014

Particulars Note

No. Current

Year Previous

Year Income Revenue from Operations (Gross) 20 41,388.03 68,972.24 Less: Excise Duty 2,741.52 5,122.50 Revenue from Operations (Net) 38,646.51 63,849.74 Other Income 21 11,274.49 3,899.65 Total Revenue 49,921.00 67,749.39 Expenses Cost of Material and components Consumed 22 35,506.77 42,439.29 Purchase of Stock in Trade 22 218.87 - (Increase)/Decrease in Inventories 22 9,983.64 (5,542.02) Employee Benefit Expenses 23 2,925.53 3,030.37 Manufacturing and Other Expenses 24 31,306.08 7,855.15 Finance Cost 25 10,259.66 9,071.82 Depreciation and Amortization 11 3,609.01 3,566.12 93,809.56 60,420.72 Profit / (Loss) Before Exceptional Items and Tax (43,888.56) 7,328.67 Profit / (Loss) Before Tax (43,888.56) 7,328.67 Tax Expenses - Current Tax - 1,571.60 - Deferred Tax Charge/(Credit) (5,137.14) 1,216.35 - MAT Charge/ (Credit) 4,700.96 (1,367.00) - Tax for Earlier Years 13.25 255.68 Profit / (Loss) After Tax (43,465.63) 5,652.04 Earning per share 31 Rs. (72.88) Rs. 9.48 Basic and Diluted [Nominal value of Rs. 10/- each (March 31, 2013 Rs.10/- )] Nature of business and Significant accounting policies The accompanying notes are an integral part of the financial statements

1 & 2




Cash Flow Statement For The Year Ended March 31, 2014 (All amounts are in Indian Rupees Lacs unless otherwise stated)

Particulars March 31, 2014 March 31,2013

Cash flows from Operating activities

(Loss)/Profit before tax from operations (43,888.56) 7,328.67

Non-cash adjustment to reconcile profit before tax to net cash flows

Depreciation/amortization 3,609.01 3,566.12

Loss on sale or write off of fixed assets 1,741.61 -

Unrealized foreign exchange loss/(gain) (0.92) 210.08

Interest expense 10,259.66 9,071.82

Dividend income - -

Provision for doubtful debts written back (453.79) -

Sundry balances written back (9,699.68) 139.59

Provision for doubtful debts 17,808.76 56.77

Diminution in value of Long term investment 289.00 -

Profit on sale on fixed assets - (0.12)

Bad debts written off 3,428.52 3.22

Interest Income (290.28) (2,474.43)

Operating profit before working capital changes (17,196.67) 17,901.72

Movements in working capital :

Increase/(decrease) in trade payables 12,814.28 13,940.20

Increase/(decrease) in other current liabilities 3,139.00 1,758.47

Increase/(decrease) in short term provisions Increase/(decrease) in other non current liabilities

478.39 194.58

- 1216.35

Decrease/(increase) in trade receivables 3,328.67 (30,996.12) Decrease/(increase) in inventories 13,311.33 (5,691.37)

Decrease / (increase) in short-term loans and advances 2,137.72 (1,063.13)

Decrease/(increase) in other current assets (1,903.71) (787.55)

Decrease / (increase) in long-term loans and advances (1,681.46) (15,676.55)

Cash generated from /(used in) operations 14,622.12 -19,397.98

Direct taxes paid (net of refunds) 78.56 1,043.55

Net cash flow from/ (used in) operating activities (A) 14,543.56 (20,441.53)

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Cash Flow Statement

For the Year Ended March 31, 2014 (All amounts are in Indian Rupees Lacs unless otherwise stated) Particulars March 31, 2014 March 31,2013

Cash flows from investing activities

Purchase of fixed assets, including intangible assets, CWIP and capital advances (12,346.91) (8,644.15)

Proceeds from sale of fixed assets 16.31 1,204.82

Interest received 290.28 2,474.43

Investment in Subsidiaries - (1,214.00)

Dividends received - -

Decrease / (Increase) Investments in bank deposits and margin money 182.94 (582.23)

Net cash flow from/(used in) investing activities (B) (11,857.38) (6,761.13)

Cash flows from financing activities:

Repayment of Long-term borrowings (5,133.93) (8,797.66)

Proceeds from Long-term borrowings 2,500.02 4,431.60

Proceeds of Short-term borrowings 10,427.21 43,209.34

Interest paid (10,301.18) (9,017.29)

Dividend Paid (Including Dividend Distribution Tax) - (2,079.64)

Net cash flow from/(used in) in financing activities (C) (2,507.88) 27,746.35

Net increase/(decrease) in cash and cash equivalents (A + B + C) 178.30 543.69

Cash and cash equivalents at the beginning of the year 1,688.47 1,144.78

Cash and cash equivalents at the end of the year 1,866.77 1,688.47

Components of cash and cash equivalents

Cash on hand 10.13 3.12

With banks- on current account

- On Current Accounts 1,856.36 1,685.03

- On Unpaid Dividend Accounts* 0.28 0.32

Total cash and cash equivalents (Note 17) 1,866.77 1,688.47

* The company can utilise these balances only towards settlement of the respective unpaid dividend As per our Report of even date For and on behalf of Board of Directors For B. K. Khare & Co of Innoventive Industries Limited Chartered Accountants Firm Regn No. 105102W

Prasad Paranjape Chandu Chavan Ravindra Katre Partner Chairman & Managing Director Whole Time Director Pune, May 29, 2014 Pune, May 29, 2014

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Notes To The Financial Statements

1. Nature of business Innoventive Industries Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company manufactures precision steel tubes, membrane panel strips, auto components and other steel products catering to industries in automobiles, boilers and heat exchangers, energy, oil & gas, farm equipment & general engineering etc. The Company caters to both domestic and international markets.

2. Significant accounting policies

2.1 Basis of preparation of financial statements The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.2 Use of estimates The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

2.3 Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year and are recorded inclusive of incentives received from State Government, excise duty, net of trade discounts, rebates, price adjustments, rejections and shortage in transit.

Dividends are recorded when the right to receive is established.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

Export benefits are accrued when it is reasonably certain that those will get realised.

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2.4 Tangible assets Tangible assets are stated at historical cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable costs of bringing the asset to its working condition for the intended use. Trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing tangible assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

2.5 Capitalisation of foreign exchange In accordance with MCA notification on Accounting Standard (AS 11), in respect of long term foreign currency loan taken for acquisition of assets, the exchange difference arising on reporting of said loan is adjusted to the cost of the assets, which was earlier been recognised as income or expense in the statement of Profit and Loss. (Also refer note 36 below.)

2.6 Depreciation Depreciation on tangible assets except items mentioned below is provided on the straight line method, pro-rata to the period of use. The rates of depreciation prescribed in Schedule XIV to the Companies Act, 1956 have been adopted by the Company, which in view of the management reflect the useful lives of related fixed assets.

In case of the Auto Division, accelerated rates of depreciation have been adopted by the Company as the management is of the view that the same reflects the useful life of certain fixed assets.

Asset Rates as per Schedule XIV Depreciation Rate Used

Plant & Machinery 10.34% 14.28%

Electrification 4.75% 14.28%

Assets costing individually, Rs. 5,000 or less are depreciated at the rate of 100%.

Capital work-in-progress includes the cost of fixed assets that are not ready for intended use as at the Balance Sheet date.

Building and other constructions on leasehold land are depreciated over the lease term or the useful life, whichever is shorter.

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2.7 Intangible assets and amortisation Intangible assets are recognised when the asset is identifiable, is within the control of the Company, it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.

The Company acquired intangible assets consisting of technical know-how, patents and software, which are recorded at acquisition cost and amortised on straight-line basis based on the following useful lives, which in management’s estimate represents the period during which economic benefits will be derived from their use.

Software is to be amortised over the period 5 years.

Pilgering Process Patent is to be amortised over a period of 10 years.

Product development Costs are to be amortised over a period of 10 years.

Patent and Trademark Costs are to be amortised over a period of 10 years.

2.8 Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

2.9 Impairment of tangible and intangible assets

The carrying amounts of the Company’s assets including intangible assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reinstated at the recoverable amount subject to a maximum of depreciable historical cost.

2.10 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

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2.11 Inventories Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components and stores and spares is determined on a weighted average basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty and is determined on a weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

2.12 Foreign currency transactions

Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the period.

2.13 Leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight line basis over the lease term.

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2.14 Employee benefits a) Contribution to Provident Fund Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to the provident fund.

b) Gratuity The company has gratuity as a defined benefit liability. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out using the projected unit credit method. Actuarial gains and losses for defined benefit plan are recognized in full in the period in which they occur in the statement of profit and loss.

c) Leave encashment Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

2.15 Income taxes Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

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At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement.” The company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

2.16 Cash and cash equivalents Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

2.17 Government Grants and Subsidies Revenue grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

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2.18 Identification of segments The company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

I. The nature of the products, II. The related risk and returns, and III. The internal financial reporting systems.

The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

Allocation of common costs Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

2.19 Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

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2.20 Provisions:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

2.21 Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

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Standalone Financials Auditors’ Report Balance Sheet Statement of Profit & Loss

Cash Flow Statement Notes


b) Terms/ Rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each share holder of the equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2014, the amount of per share dividend recognised as distributed to equity shareholders was Rs. Nil.

(March 31, 2013 Rs. 0.1). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distributing all preferential amounts.

c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates:

The company does not have any holding or ultimate holding Company.

(All amounts are in Indian Rupees Lacs unless otherwise stated)

3 Share Capital 31 March 2014 31 March 2013

Authorized 75,000,000 (March 2013: 75,000,000) Equity Shares of Rs. 10/- each 7,500.00

7,500.00

7,500.00 7,500.00 Issued, Subscribed & Fully Paid - Up 59,643,999 (March 2013: 59,643,999) Equity Shares of Rs. 10/- each fully paid - up 5,964.40 5,964.40 Total

5,964.40 5,964.40

a Reconciliation of equity shares outstanding at the beginning and at the end of the reporting period:

Particulars 31 March 2014 31 March 2013 No. of Shares Amount

(in Lacs) No. of Shares Amount

(in Lacs)

At the beginning of the period 59,643,999 5,964.40 59,643,999 5,964.40 Equity shares issued during the period Bonus Issue of equity shares 1 and 2 - - - -

Preferential Allotment of equity shares - - - - Initial Public Offer of equity shares - - - - Outstanding at the end of the period 59,643,999 5,964.40 59,643,999 5,964.40






Notes:

1 Bonus Issue of 3,04,49,360 equity shares in the ratio of five shares for every share held in the Company as on the record date, i.e. September 18, 2010.

2 Bonus Issue of 379,280 equity shares only to Kavos Capital Limited in the ratio of 1.51712 shares for every single share on their existing holding of 250,000 equity shares as on the record date, i.e. July 30, 2010 in compliance with Section 205 (3) of the Companies Act, 1956.

d Details of shareholders holding more than 5% shares in the company:

Name of the Shareholder 31 March 2014 31 March 2013 No. of Shares Percentage No. of Shares Percentage

Chandu Laxman Chavan (Promoter) 13,278,700 22.26% 13,278,700 22.26% Ravindra Waman Katre (Promoter) 3,824,437 6.41% 2,102,500 3.53% Sanjay Waghulade (Promoter) 3,142,601 5.27% 3,130,601 5.25% Kavos Capital Limited 8,038,632 13.48% 8,038,632 13.48% Standard Chartered Private Equity (Mauritius) Limited 4,206,441 7.05% 4,206,441 7.05% Reliance Capital Trustee Co. Ltd. A/C-Reliance Regular Savings Fund-

Equity Option 3,000,000 5.03% 3,000,000 5.03%

e Aggregate number of bonus shares issued / bought back during the period of five years immediately preceding the reporting

date:

Particulars 31 March 2014 31 March 2013 Equity shares allotted as fully paid bonus shares by capitalisation of Reserve & Surplus (Refer Note No. 1

below) 30,449,360 30,449,360

Equity shares allotted as fully paid bonus shares by capitalisation of Capital Redemption Reserve (Refer Note No. 2 below)

379,280 379,280

Equity shares allotted as fully paid up pursuant to contracts for consideration other than cash - -

Equity shares bought back by the company - -




Notes to Financial Statements (All amounts are in Indian Rupees Lacs unless otherwise stated)

4 Reserves & Surplus 31 March 2014 31 March 2013

Revaluation Reserve 65.64 65.64 Capital Redemption Reserve 362.07 362.07 Securities Premium 24,163.68 24,163.68 General Reserve

Balance as per last financials 2,477.06 1,799.72 Add : Adjustment on account of exchange fluctuation capitalised (net) - 111.94

Add : Transferred from profit & loss account - 565.40

2,477.06 2,477.06 Profit and Loss Balance Balance as per last financials 15,029.25 10,640.41

Add : Profit for the year as per statement of profit or loss (43,465.63) 5,652.04 Add : Reversal of Proposed Dividend on Equity Shares 565.52 -

Add : Reversal of Dividend Distribution Tax 96.11 - Less : Proposed Dividend on Equity Shares - 596.44

Less : Dividend Distribution Tax - 101.36 Less : Transfer to General Reserve - 565.40

Less: Utilisation for Issue of Bonus Shares - -

(27,774.75) 15,029.25

Total (706.30) 42,097.70

5 Long Term Borrowings (Refer Note No. 42) 31 March 2014

31 March 2013

Term loans from banks (Secured) 16,877.51 18,587.27 Term loans from Financial Institution (Unsecured) 748.98 1,655.99 Vehicle Loans (Secured) 21.95 39.09 Total 17,648.44 20,282.35 Note: For details of rate of interest, security and repayment schedule to

banks, financial institutions and vehicle loans (Refer Note No. 34)






6 Deferred tax liability (net) 31 March 2014 31 March 2013

Deferred tax liability: Difference between tax depreciation and depreciation/ amortisation charged for

financial reporting 8,143.00 6,321.42

8,143.00 6,321.42 Deferred tax assets (Refer Note No. 37) Provision for bad and doubtful debts 6,051.11 147.23 Employee Benefits 62.55 46.87 Unabsorbed depreciation 1,108.66 - Others 254.96 324.45 7,477.28 518.55 Deferred Tax Liability (net)

665.72 5,802.87

7

Other Long Term Liabilities

31 March 2014

31 March 2013

Creditors for Capital Expenses (Refer Note. No. 35) 345.04 150.46 Total

345.04 150.46

8 Short Term Borrowings (Refer Note No. 42)

31 March 2014 31 March 2013

Cash credits from banks (Secured)* 42,577.54 27,544.21 Short term loans from Banks/ Financial Institutions (Secured)* 22,435.61 27,580.00 Inter Corporate Loan from Related Party (Unsecured) 693.65 180.36 Loan from Key Management Personnel (Unsecured) 24.98 - Total 65,731.78 55,304.57

Cash credit and demand loans are secured by first pari passu charge by way of hypothecation on all current assets, both present & future and second pari passu charge by way of hypothecation on all fixed assets, both present & future and having interest rate between 11% to 13% pa.






9 Trade payables and Other Current Liabilities

31 March 2014

31 March 2013

i) Trade Payables (Refer Note. No. 35)* 7,613.86 4,499.26 Total 7,613.86 4,499.26 ii) Other Current Liabilities: Current maturities of long term bank borrowings (Secured)* 11,450.44 5,945.93 Current maturities of long term bank borrowings vehicle loan (Secured)* 28.74 53.03 Current maturities of long term financial Institutions borrowings (Unsecured)* 1,168.53 1,008.35 Interest accrued but not due 10.99 52.50 Unclaimed dividend 0.28 0.34 Other Payables (Refer Note. No. 41) 1,182.07 3,683.41 Total 13,841.05 10,743.56

*(Also Refer Note Nos. 35 & 44)

10 Short Term provisions

31 March 2014

31 March 2013

Proposed Dividend on Equity Shares - 596.44 Provision for Tax on Dividend Distribution - 101.36 Income Tax Provision (net of Advance tax Rs.55/- lacs(31 March 2013 Rs.1,775.27/- lacs) Inc

x 1,074.23 1,139.54

Wealth Tax Provision 1.75 1.75 Provision for Gratuity ( Refer Note No. 32) 16.82 17.54 Provision for Leave Encashment 167.60 121.24 Provision for Expenses 1,244.07 775.15

Total 2,504.47 2,753.02






11 Fixed Assets Descriptions Gross Block Depreciation Net Block As At

01.04.2013 Additions during the

year

Deletion As At 31.03.2014 As At 01.04.2013

For the year

Deletion As At 31.03.2014

As At 31.03.2014

As At 31.03.2013

TANGIBLE ASSETS Free Hold Land 2,788.44 - - 2,788.44 - - - 2,788.44 2,788.44 Leasehold Land 0.11 - - 0.11 - - - 0.11 0.11 Building 11,878.89 363.51 - 12,242.40 1,050.03 391.68 1,441.71 10,800.69 10,828.86 Plant & Machinery (Refer Note No. 42) 25,872.42 3,415.71 - 29,288.13 5,889.96 1,749.66 7,639.62 21,648.51 19,982.46 Computers 233.81 2.64 - 236.45 158.02 19.85 177.87 58.58 75.79 Tools & Dies 17,576.02 5,886.78 4,085.61 19,377.19 4,074.52 1,013.67 2,359.51 2,728.68 16,648.51 13,501.50 Furniture & Fixtures 135.80 0.08 - 135.88 37.39 7.25 44.64 91.24 98.41 Vehicles 380.92 - 46.17 334.75 88.55 35.76 14.35 109.96 224.79 292.37 TOTAL TANGIBLE ASSETS 58,866.41 9,668.72 4,131.78 64,403.35 11,298.47 3,217.87 2,373.86 12,142.48 52,260.87 47,567.94 PREVIOUS YEAR 54,284.92 5,810.14 1,228.65 58,866.41 8,062.13 3,260.29 23.95 11,298.47 INTANGIBLE ASSETS Software 529.55 1.86 - 531.41 310.46 82.01 - 392.47 138.94 219.09 Research and Development Assets I) Pilgering Process Patent 1,950.84 - - 1,950.84 114.71 195.08 - 309.79 1,641.05 1,836.13 II) Product Development Cost 336.71 4,396.63 - 4,733.34 22.82 114.05 - 136.87 4,596.47 313.90 III) Patent and Trademark - 1,737.44 - 1,737.44 - - - - 1,737.44 - TOTAL INTANGIBLE ASSETS 2,817.10 6,135.93 - 8,953.03 447.99 391.14 - 839.13 8,113.90 2,369.11 PREVIOUS YEAR 489.03 2,328.07 - 2,817.10 142.15 305.83 - 447.99 Descriptions Gross Block Depreciation Net Block As At 01.04.2013 Additions

during the year

Deletion/ Capitalisa

tion

As At 31.03.2014

As At 01.04.2013

For the year

Deletion/ Capitalisatio

n

As At 31.03.2014

As At 31.03.2014

As At 31.03.2013

CAPITAL WORK IN PROGRESS Building 341.42 34.73 324.69 51.46 - - - - 51.46 341.42 Plant & Machinery (Refer Note No. 42) 6,228.11 1,189.77 - 7,417.88 - - - - 7,417.88 6,228.11 Tools & Dies 557.92 - 557.92 - - - - - - 557.92 TOTAL CAPITAL WORK IN PROGRESS No. 42) 7,127.45 1,224.50 882.61 7,469.34 - - - - 7,469.34 7,127.45 PREVIOUS YEAR 5,394.02 1,733.41 - 7,127.45 - - - - INTANGIBLE ASSETS UNDER DEVELOPMENT Research and Development 2,838.86 - 2,838.86 - - - - - - 2,838.86 Patent and Trademark 959.85 - 959.85 - - - - - - 959.85 TOTAL INTANGIBLE ASSETS UNDER DEVELOPMENT

3,798.71 - 3,798.71 - - - - - - 3,798.71

PREVIOUS YEAR 4,348.39 - 549.70 3,798.71 - - - - TOTAL 67,844.11 60,863.20 Notes : 1 Amount of borrowing cost capitalised during the period is as under Particulars March 31,2014 March 31,2013 Interest charges - 359.22 Other charges - Total - 359.22 Amount of exchange fluctuation loss capitalised during the current year is Rs. 1,099.57/- Lacs of which Rs. 363.35/- Lacs (Previous Year Rs. 134.22/- Lacs) is capitalised on Buildings and Rs. 736.22/- Lacs (Previous Year Rs. 271.95/- Lacs is on Plant & Machinery (Refer Note No. 36). 2 Pilgering patent process have remaining useful life of 8 years and balance carrying value of Rs. 1,641.05/- Lacs. (Previous Year Rs. 1,836.13/- Lacs) 3 Opening Product development cost and current year additions to the same have remaining remaining useful life of 8 years and 10 years respectively the balance carrying value of Rs. 4596.47/- Lacs.(Previous Year Rs. 313.90/- Lacs) 4Patent and Trademark expenses have remaining useful life of 10 years and balance carrying value of Rs. 1,737.44/- Lacs.(Previous Year Rs. Nil) 5 During the year, the company has written off the Tools & Dies capitalised in the earlier years. As a result of the same Tools & Dies amounting to Rs 4,085/- Lacs (Gross Block) and Accumulated Depreciation of Rs 2,359.51/- Lacs has been written off and loss of Rs 1,726.10/- Lacs has been accounted for in the books (Refer Note No. 24)






12 Non Current Investments ( At cost unless stated otherwise)

31 March 2014 31 March 2013

Long Term Investment Trade Investments Unquoted Equity Investments - In Subsidiaries 223,907 (March 2013: 223,907) Equity Shares of Rs. 10/- each fully paid-up

of Sankalp Engineering & Services Private Limited (erstwhile Sankalp Forging Private Limited)

210001

978.49 978.49

2,269,499 (March 2013: 2,269,499) Equity Shares of Rs. 10/- each fully paid - up of Saicon Steels Private Limited

2122

0.51 0.51

399,999 (March 2013: 399,999) Equity Shares of Rs. 10/- each fully paid - up of Seven Star Electrodes Private Limited

212

1,200.00 1,200.00

Less : Provision for diminution in value of Investments (19.00) - 1,181.00 1,200.00 1,899,999 (March 2013: 1,899,999) Equity Shares of Rs. 10/- each fully paid

- up of Arihant Auto Components Private Limited 2111

190.00 190.00

Less : Provision for diminution in value of Investments (190.00) - - 190.00 799,999 (March 2013: 799,999) Equity Shares of Rs. 10/- each fully paid - up

of Arihant Steel and Metal Wire Private Limited 2002

80.00 80.00

Less : Provision for diminution in value of Investments (80.00) - - 80.00 100 (March 2013: 100) Equity Shares of 0.1 USD each of Innoventive

Americas Inc. 2000

3

2,545.35 2,545.35

100 (March 2013: 100) Equity Shares 1 GBP each of Innoventive Industries UK Ltd

3000

4

0.81 0.81

254,745 (March 2013: 254,745) Equity Shares of Rs. 10/- each fully paid - up of Innovative Technomics Private Limited

3000

5

1,214.00 1,214.00

5,920.16 6,209.16 Non Trade Quoted Investments In Mutual Funds 40,000 Units (March 2013: 40,000 Units) UTI-India Lifestyle Fund - Growth

Plan 0001

4.00 4.00

Unquoted Investments 2500 ( March 2013: 250 )Equity Shares of Rs. 10/- each fully paid - up of The

Saraswat Co-operative Bank Limited 0003

0.25 0.25

Total 5,924.41 6,213.41 Aggregate value of unquoted investments (Gross of provision for Dimunition) 6,209.41 6,209.41 Aggregate of Provision for Dimunition 289.00 - Aggregate value of unquoted investments (Net of provision for dimunition) 5,920.41 6,209.41 Aggregate market value of quoted investments 4.00 4.00 Aggregate value of unquoted investments 0.25 0.25






13 Long Term Loans & Advances (Unsecured)

31 March 2014 31 March 2013

Capital Advances 4,055.80 4,403.26 Security Deposit 162.84 186.66 Loans And Advances to Related Parties (Refer Note. No. 39(I)) 1,891.16 1,481.05 Other Loans And Advances (Refer Note. No. 39(II)) 5,491.20 3,848.56

Total 11,601.00 9,919.54 *( Also Refer Note No. 44) 14 Other Non Current Assets 31 March 2014 31 March 2013 Other Bank Balances (Refer Note Nos. 17 & 42) 561.62 202.57 MAT Credit Entitlement - 4,700.96

Total 561.62 4,903.53 15 Inventories

(valued at lower of cost or net realizable value)* 31 March 2014 31 March 2013

Raw Materials & Components 1,022.21 4,247.23 Stores, Spares, Consumable etc. 201.59 308.39 Work in Progress 1.41 2,032.18 Semi Finished & Finished goods 4,447.00 12,399.87 Scrap 62.22 58.09 Total 5,734.43 19,045.76

* Details of Inventory (a) Raw Materials & Components Steel 740.84 3,078.17 ERW & CRW Tubes 137.60 571.74 CR & HR Coils 113.40 471.15 Bars 30.37 126.17 1,022.21 4,247.23 (b) Work in Progress CRW & ERW 1.05 1,509.39 PILGER 0.36 522.79

1.41 2,032.18 (c) Semi Finished & Finished goods Auto Parts 1,375.43 3,835.20 Tubes 2,598.09 7,244.42 Others 473.48 1,320.25

4,447.00 12,399.87






16

Trade Receivables (Unsecured ) (Refer Note No. 44)

31 March 2014

31 March 2013

- Outstanding for a period exceeding six months Considered Good 9,456.85 14,426.70 Considered Doubtful 6,290.64 453.79 - Others Considered Good 3,992.74 12,077.45 Considered Doubtful 460.52 - 20,200.75 26,957.94 Less - Provision for doubtful debts 6,772.16 453.79 Total 13,428.59 26,504.15

17 Cash and Bank Balances (Refer Note No. 42)

Cash and Cash Equivalent Balances with Banks - Current Accounts 1,856.36 1,685.03 - Unclaimed dividend 0.28 0.32 Cash on Hand 10.13 3.12 1,866.77 1,688.47 Other Bank Balances - Margin money deposits with maturity more than 3 months and less than 12 months 68.00 609.99 - Margin money deposits with maturity more than 12 months 561.62 202.57 629.62 812.56 Amount disclosed under Other non-current assets (Refer Note No. 14) 561.62 202.57 Total 1,934.77 2,298.46

18 Short Term Loans and Advances (Unsecured)

Loans & Advances from Related Party - - Others (Refer Note. No. 40) Considered Good 1,964.65 5,617.19 Considered Doubtful 1,514.82 - 3,479.47 5,617.19 Provision for Doubtful Advances 1,514.82 - 1,964.65 5,617.19 Total 1,964.65 5,617.19

19 Other Current Assets (Unsecured)

Export benefits receivable 457.30 674.33 Industrial Promotion Subsidy receivable 2,744.99 3,772.94 Others Considered Good 1,412.59 7,785.68 Considered Doubtful 9,521.78 - 10,934.37 7,785.68 Provision for doubtful Receivables 9,521.78 - Total 4,614.88 12,232.95






20 Revenue From Operations Current Year Previous Year

Sale of Products Sale of Manufactured Goods 39,717.91 67,162.87 Sale of Traded Goods 218.87 -

39,936.78 67,162.87 Other Operating Revenue - Sale of scrap 1,164.49 1,579.89 - Export Benefits 286.76 229.48 Revenue From Operations (Gross) 41,388.03 68,972.24 Less: Excise Duty 2,741.52 5,122.50

Total 38,646.51 63,849.73

Details of Manufactured Goods sold: - Tubes & related products 9,901.44 39,629.26 - MV parts 18,389.22 17,412.51 - Others 11,427.25 10,121.10

Total 39,717.91 67,162.87

Details of Traded Goods sold: - Water Tanks/Coolers/Hose 109.61 - ETP 15.00 - Open Type Fermenter 11.21 - Clamps/Valves & Panels 9.99 - Air Compressors/ Filters & Other Equipment 5.07 - Voltage Stabiliser 3.54 - Others 64.45 -

Total 218.87 -

21 Other Income Current Year Previous Year

Discount Received 15.03 36.75 Sundry balances written back (Refer Note No. 44) 9,699.68 139.59 Provision for doubtful debts written back 453.79 - Miscellaneous income 815.61 30.70 Interest income 290.38 2,474.42 Benefit on Sales Tax Deferral prepayments (Refer Note No. 39) - 1,109.07 Royalty - 109.00 Profit on sale of assets - 0.12

Total 11,274.39 3,899.66



Standalone Financials Auditors’ Report Cash Flow Statement Balance Sheet Notes Statement of Profit & Loss Notes To The Financial Statements (All amounts are in Indian Rupees Lacs unless otherwise stated)

22 Cost of Raw Materials and Components Consumed (Refer Note No. 43) Current Year Previous Year Inventory at the beginning of the year 4,247.23 4,163.35 Add: Purchases 32,281.75 42,523.17 Less: inventory at the end of the year 1,022.21 4,247.23 Cost of Raw Material consumed (Refer Note No. 33 a) 35,506.77 42,439.29 Purchase of Traded Goods 218.87 - (Increase)/decrease in inventories Inventories at the end of the year Work-in-progress 1.41 2,032.18 Semi finished and finished goods 4,447.00 12,399.87 Less: Inventories at the beginning of the year Work-in-progress 2,032.18 1,918.59 Semi finished and finished goods 12,399.87 6,971.45 Net (Increase)/Decrease in Inventories Work-in-progress 2,030.77 (113.60) Semi finished and finished goods 7,952.87 (5,428.43) 9,983.64 (5,542.02)

23 Employee Benefit Expenses

Current Year

Previous Year

Salaries, Wages & Bonus 2,471.99 2,349.04 Contribution to Provident and Other Funds (Refer Note No. 33.2) 176.90 173.19 Staff Welfare Expenses 257.29 395.16 Gratuity Expense (Refer Note No. 32 (I) ) 19.35 112.98 Total 2,925.53 3,030.37

24 Manufacturing and Other Expenses

Current Year

Previous Year

Consumption of Stores, Spares & Consumables 709.10 947.80 Power & Fuel 564.90 1,065.99 Rent (Refer Note No. 31) 71.27 70.43 Labour Charges 1,503.76 1,980.99 Repairs & Maintenance - Plant & Machinery 130.04 204.51 - Building 17.37 42.31 - Other Assets 67.93 119.75 Insurance 38.42 132.18 Rates & Taxes 206.83 13.10 Other Manufacturing Expenses 466.50 464.35 Freight & Packing 450.51 790.57 Printing and Stationery 45.25 129.69 Telephone Expenses 21.80 33.50 Travelling & Conveyance 422.57 501.44 Loss on sale / write-off of Fixed Assets 1,741.61 - Provision for Doubtful Debts* 17,808.76 56.77 Bad debts 3,428.52 3.22 Auditors Remuneration (Refer Note No. 38) - For Audit Services 15.00 15.00 - Tax Audit Fees - - - Other Services 11.00 11.00 - Reimbursement of Out-of- Pocket Expenses 1.21 0.75 Legal, Professional & Consultancy fees 585.16 522.08 Other Selling & Distribution Expenses 92.75 208.34 Provision for diminution in long term Investment 289.00 - Foreign Exchange loss/(gain) 2,126.64 29.70 Office & Other Expenses 490.18 511.68 Total 31,306.08 7,855.15

* The provision for doubtful debts includes provision taken against doubtful trade receivables Rs 6,772.16/- Lacs, Other Current Assets Rs 9,521.78/- lacs and Short Term Loans & Advances Rs 1,514.82/- lacs .



Standalone Financials Auditors’ Report Cash Flow Statement Balance Sheet Notes Statement of Profit & Loss Notes To The Financial Statements (All amounts are in Indian Rupees Lacs unless otherwise stated)

25 Finance Cost Current Year Previous Year Interest on Loans 9,780.96 8,415.86 Other Borrowing Cost Bank Charges 239.70 500.63 Processing Fees 239.00 92.40 Foreign Exchange loss/(gain) on restatement - 62.92 Total 10,259.66 9,071.82

26 Related party transactions I Parties where control exists : Subsidiaries - Arihant Steel and Metal Wires Private Limited - Arihant Auto Components Private Limited - Sankalp Engineering & Services Private Limited (erstwhile Sankalp Forgings Private Limited.) - Saicon Steels Private Limited - Seven Star Electrodes Private Limited - Innoventive Americas, INC. - Innoventive Industries UK Limited - Innovative Technomics Private Limited Step-Down Subsidiaries - Salem Steel NA, LLC - Sankalp Americas Inc. - Sankalp Middle East FZE

II Key management personnel and their relatives (KMP) Mr. Chandu L. Chavan Chairman & Managing Director Mr. Ravindra W. Katre Whole Time Director Mr. Sanjay H. Waghulade (Upto September 2013) Whole Time Director Mr. K V Ramarathnam (Upto August 2013) Whole Time Director Mr. Sanjay T. Bhade Promoter Group Mr. Parag M. Mulye Promoter Group Mr. Shivaji R Katke Promoter Group Relatives of Key management personnel (Relative of KMP) Dr. Shubhangi Jadhav Mrs. Mrunal Katre Mrs. Vishakha Bhade Mrs. Kavita Dhupkar Mrs. Smita Katke Enterprise over which the key management personnel or their relatives exercise control/significant influence (Other related

concerns) Name of the Enterprise Yashoday Engineers Private Limited (Upto September 2013) Keytool Engineering Solutions Private Limited (Upto September 2013) Opal Luxury Time Products Limited Gargi Bio Tek Private Limited Membrane Filters (India) Private Limited (Upto October 2013) Aim Filtertech Private Limited (Upto February 2014) M/s. Saptashrungi Engineering Works Sourcegenie Insurance Broking Private Limited Source Genie Consulting Private Limited Swayamsiddha Mahila Utkarsh Foundation Innoventive Venture Limited Highbrow Investments Private Limited



Standalone Financials Auditors’ Report Cash Flow Statement Balance Sheet Notes Statement of Profit & Loss Notes To The Financial Statements

(All amounts are in Indian Rupees Lacs unless otherwise stated) Transactions and balances with related parties have been set out below: Particulars Relationship 31 March 2014 31 March 2013

Sale of Goods Saicon Steels Private Limited Subsidiary 405.36 2,478.26 Sankalp Engineering & Services Private Limited Subsidiary 64.26 3,627.98 Salem Steels NA, LLC Subsidiary 2,827.90 4,474.97 Innovative Technomics Private Limited Subsidiary 23.78 5.23 Opal Luxury Time Products Limited Other related concern 41.66 - Swayamsiddha Mahila Utkarsh Foundation Other related concern 97.06 - Total 3,460.02 10,586.44 Royalty Income Salem Steels NA, LLC Subsidiary - 109.00 Total - 109.00 Interest Income Salem Steels NA, LLC Subsidiary - 77.26 Total - 77.26 Rent Income Innovative Technomics Private Limited Subsidiary 2.16 0.60 Total 2.16 0.60 Reimbursement of Expenses Given Arihant Auto Components Private Limited Subsidiary - 21.59 Total - 21.59 Interest on Deposit Innovative Technomics Private Limited Subsidiary 21.40 7.90 Total 21.40 7.90 Inter Corporate Loan Received Innovative Technomics Private Limited Subsidiary 917.29 270.00 Total 917.29 270.00 Inter Corporate Loan Repaid Innovative Technomics Private Limited Subsidiary 404.00 - Total 404.00 - Purchase of Raw Material Saicon Steels Private limited Subsidiary 133.82 117.81 Sankalp Engineering & Services Private Limited (erstwhile

Sankalp Forgings Private Limited.) Subsidiary 2.81

Others Other related concern 0.82 0.28 Total 137.45 118.09 Purchase of Fixed Assets Arihant Steels and Metal wires Private Limited Subsidiary - 629.69 Seven Star Electrodes Private Limited Subsidiary - 40.84 Sankalp Engineering & Services Private Limited Subsidiary - 308.46 Total - 978.99 Purchase of Services Swayamsidha Mahila Utkarsh Foundation Other related concern 10.45 1.19 Saicon Steels Private Limited Subsidiary - 0.06 Total 10.45 1.25 Loans And Advances Given Membrane Filters (India) Pvt Ltd Other Related Concern 350.00 Yashoday Engineers Pvt. Ltd. Other Related Concern 182.31 Gargi Bio Tek Pvt Ltd (Fully Provided) Other Related Concern 89.56 Total 621.87 -





Particulars Loans Received From Key Management Personnel

Relationship 31st March 2014

31st March 2013

Mr. Chandu Chavan KMP 24.98 - Total 24.98 - Managerial Remuneration Mr. Chandu Chavan KMP 20.00 30.00 Mr. Ravindra Katre KMP 65.00 68.50 Mr. Sanjay Waghulade KMP 8.30 22.80 Mr. K V Ramarathnam KMP 35.10 65.86 Mr. Sanjay Bhade KMP 13.70 59.05 Mr. Shivaji Katke KMP 10.00 15.40 Total 152.10 261.61

Dividend Paid

Mr. Chandu Chavan KMP - 394.70 Mr. Ravindra Katre KMP - 63.08 Mr. Sanjay Waghulade KMP - 93.92 Mr. Sanjay Bhade KMP - 36.91 Mr. Shivaji Katke KMP - 29.92 Mr. Parag Mulye KMP - 36.91 Dr. Shubhangi Jadhav Relative of KMP - 80.97 Mrs. Mrunal Katre Relative of KMP - 51.46 Mrs. Vishakha Bhade Relative of KMP - 3.75 Mrs. Kavita Dhupkar Relative of KMP - 3.75 Mrs. Smita Katke Relative of KMP - 2.85 Total - 798.22

Outstanding

- Receivables Saicon Steels Private Limited Subsidiary 4,408.58 518.63 Sankalp Engineering and Services Private Limited Subsidiary 558.97 689.18 Seven Star Electrodes Private Limited Subsidiary 145.47 145.47 Arihant Auto Components Private Limited Subsidiary - 0.98 Salem Steel NA, LLC Subsidiary 696.27 1,180.37 Source Genie Consulting Private Limited Other related concern 23.93 23.93 Yashoday Engineers Pvt. Ltd. Other related concern 626.12 443.81 Opal Luxury Time Products Pvt. Ltd. Other related concern 196.66 338.10 Membrane Filters (India) Pvt Ltd Other related concern 354.18 35.00 Aim Filtertech Pvt Ltd Other related concern 12.12 12.11 M/s. Saptashrungi Engineering Works Other related concern 26.19 26.19 Swayamsiddha Mahila Utkarsh Foundation Other related concern 99.01 - Gargi Bio Tek Pvt Ltd Other related concern 89.46 - Total 7,236.97 3,413.77

- Payables

Arihant Steel and Metal Wires Private Limited Subsidiary - 254.01 Innovative Technomics Private Limited Subsidiary 693.65 180.36 Innoventive Americas, INC. Subsidiary - 2,628.11 Swayamsiddha Mahila Utkarsh Foundation Other related concern - 0.45 Gargi Bio Tek Pvt Ltd Other related concern - 0.10 Sourcegenie Insurance Broking Pvt Ltd Other related concern 3.62 36.24 Mr. Chandu Chavan KMP 24.98 - Total 722.25 3,099.27






27 Capital commitments and contingent liabilities and secured loans Particulars 31 March

2014 31 March

2013 Capital commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances). 1,677.46 789.58 Contingent liabilities Claims against Company not acknowledged as debts 416.04 501.54 Income Tax Cases - 421.54 Unfulfilled Export Obligations under EPCG scheme to be fulfilled over 8 years. Duty liability on non-fulfilment of

above obligation is Rs. 1,492.30/- Lacs (Rs. 1,012.53/- Lacs) 2,290.01 2,198.19

Unfulfilled Export Obligations under Advance Authorization. Duty liability on non-fulfilment of above obligation is Rs. Nil Lacs (Rs. 175.26/- Lacs)

- 1,233.68

28 Segment reporting I Primary Segment Based on the guiding principles given in the Accounting Standard – 17 “Segment Reporting” issued by the Institute of Chartered Accountants of India,

the Company’s primary segments are Motor Vehicle Parts, Tubes & Others.

Description MV Parts Tubes and Products

Others Total

Total Revenue CY 18,548.35 11,016.79 9,081.37 38,646.51 (Including Export benefits) PY 17,412.51 39,967.74 6,469.48 63,849.73 Segment Result CY (7,143.38) (6,064.24) (10,169.49) (23,377.11) PY 3,396.03 8,760.19 404.59 12,560.81 Unallocable Expenses (Net of Income) CY 10,251.79 PY 3,839.67 Interest CY 10,259.66 PY 9,071.82 Profit / (Loss) Before Taxes CY (43,888.56) PY 7,328.67 Tax (Including tax for earlier years) CY (422.94) PY 1,676.63 Profit / (Loss) After Taxes CY (43,465.63) PY 5,652.04 Segment Assets CY 12,000.89 68,125.10 14,369.22 94,495.21 PY 15,550.73 71,345.02 7,422.62 94,318.37 Unallocable Assets CY 19,113.25 PY 53,279.82 Segment Liabilities CY 966.98 726.24 7,574.05 9,267.27 PY 5,235.58 1,851.83 470.06 7,557.47 Unallocable Liabilities CY 104,341.19 PY 140,040.72 Capital Expenditure CY 1,983.50 9,944.39 419.02 12,346.91 PY 240.55 8,877.45 (473.85) 8,644.15 Depreciation CY 469.17 3,018.26 121.58 3,609.01 PY 545.28 2,928.24 92.60 3,566.12 II Secondary Segment The company has identified geographical segment as secondary segment. Based on risk and rewards, the segments are as follows- Particulars In India Outside

India Total

Segmental Revenues (Including Export benefits CY 35,467.88 3,178.63 38,646.51 PY 58,835.06 5,014.67 63,849.73 Segment Asset CY 93,321.60 1,173.61 94,495.21 PY 93,165.39 1,152.98 94,318.37 Capital Expenditure CY 12,346.91 - 12,346.91 PY 8,644.15 - 8,644.15





Revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under “Unallocated Expenses.” Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under “Unallocated Assets/Liabilities.” 29 Unhedged foreign Currency Balances

The company has Outstanding forward contract as of March 31st, 2014 USD Nil (March 31st, 2013 USD 10,00,000) The details of foreign currency balances which are not hedged as at the balance sheet date are as below:

Category Currency 31 March 2014

31 March 2013

Trade Receivables EURO 225.75 41.80 GBP 31.20 28.21 USD 696.61 6,008.49 Other Receivables EURO 7.31 USD 85.33 188.14 GBP 0.10 - Trade Payables EURO 46.41 10.67 USD - 80.88 Other Payable EURO 8.44 - RMB 1.20 - JPY 0.03 - Capital Advance USD 180.16 2,628.11 Short Term Borrowings from Banks USD–PS/

Export Finance*

161.44 601.38

USD – PS/PCFC 2,345.88 3,312.96 GBP – WCDL - 905.53 USD – WCDL - 1,871.43 Long Term Borrowings from Banks USD 11,556.45 15,820.09 Bank Balances USD - 108.77 30 Leases

Lease payments debited to the statement of profit and loss and the future minimum lease payments for non cencellable operating lease arrangements are summarised below:

Particulars 31 March 2014

31 March 2013

Lease payments debited to the Statement of Profit and loss - 51.00 Future minimum lease payments in respect of leases - amount due within one year from the Balance sheet date - 26.85 - amount due in the period between one year and five years - 32.33 - amount due after five years - - 31 Earning Per Share Particulars 31 March

2014 31 March

2013 Reconciliation of basic and diluted shares used in computing

earnings per share

Number of shares considered as basic weighted average shares outstanding for computing basic earnings per share 59,643,999 59,643,999 Add: effect of dilutive issue of shares / options - - Number of shares considered as weighted average shares and potential shares outstanding for computing diluted

earnings per share 59,643,999 59,643,999

Computation of basic and diluted earnings per share Net profit after tax attributable to equity shareholders (In Lacs) (43,465.63) 5,652.04 Basic earning per equity share Rs. (72.88) Rs. 9.48 Diluted earning per equity share Rs. (72.88) Rs. 9.48 Face value per share Rs. 10 Rs. 10





32 Employee benefits I Defined contribution Plan (Gratuity)

a. Reconciliation of opening and closing balance of obligation The following table sets out the status of the Gratuity Plan as required under AS 15 (Revised):

Particulars 31 March 2014 31 March 2013 Liability at the beginning of the Period 202.54 86.68 Interest Cost 16.20 7.37 Current Service Cost 49.16 25.53 Benefits Paid (38.82) (16.80) Actuarial (Gain)/Loss on obligation (28.56) 99.76 Liability at the end of the period 200.52 202.54

b. Reconciliation of opening and closing balance of Fair Value of Plan Assets Particulars 31 March 2014 31 March 2013 Fair Value of Plan Assets at the beginning of the Period 185.00 108.81 Expected Return on Plan Assets 16.10 9.25 Contributions 20.07 73.31 Benefit Paid (38.82) (16.80) Actuarial gain/(loss) on Plan Assets 1.35 10.43 Fair Value of Plan Assets at the end of the Period 183.70 185.00 Total Actuarial Gain/(Loss) To Be Recognised (29.91) 89.33

c. Expenses Recognised in Profit and Loss Account Particulars 31 March 2014 31 March 2013 Current Service Cost 49.16 25.53 Interest Cost 16.20 7.37 Expected Return on Plan Assets (16.10) (9.25) Net Actuarial (Gain)/Loss To Be Recognised (29.91) 89.33 Expense Recognised in Profit & Loss account 19.35 112.98

d. Amount Recognised in the Balance Sheet Particulars 31 March 2014 31 March 2013 Fair value of plan assets at the end of the period 183.70 185.00 (Present value of benefit obligation as at the end of the period) (200.52) (202.54) Funded status (16.82) (17.54) Unrecognized past service cost at the end of the period - - Unrecognized transitional liability at the end of the period - - Net (liability)/asset recognized in the balance sheet (16.82) (17.54)

e. Balance Sheet Reconciliation

Particulars 31 March 2014 31 March 2013 Opening net liability 17.54 (22.13) Expense as above 19.35 112.98 Employers Contribution paid 20.07 73.31 Closing net Liability/ (Asset) 16.82 17.54





f. Actual Return on Plan Assets Particulars 31 March 2014 31 March 2013 Expected Return on Plan Assets 16.10 9.25 Actuarial gain/(loss) on Plan Assets 1.35 10.43 Actual Return on Plan Assets 17.45 19.68

g. Principal Actuarial Assumptions for Defined Benefit Plans Particulars 31 March 2014 31 March 2013 Discount Rate 9.31% 8.00% Rate of Return on Plan Assets 9.31% 8.70% Salary Escalation 6.00% 5.00%

h. Composition of plan assets Particulars 31 March 2014

( % ) 31 March 2013

( % ) Insured Managed Funds 100% 100%

i. Experience Adjustment Particulars 31 March 2014

( in Lacs) 31 March

2013 ( in Lacs)

31 March 2012 ( in lacs)

31 March 2011 ( in lacs)

On Plan Liability (Gain) / Losses (-15.43) 74.95 86.68 67.53 On Plan Assets Gain / (Losses) 1.35 10.43 (-4.12) 92.42 Notes: Expected rate of return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the fund

during the estimated term of the obligations. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors on long term

basis. Expected contribution during next 12 months Rs. 52.94/- Lacs (Previous Year Rs 41.05/- Lacs)

II Defined contribution Particulars 31 March 2014 31 March 2013 Employers contributions to Provident fund 110.53 159.90 Employers Contribution to ESIC 66.37 0.88






33. Other Notes

a. Details of raw material consumed

Particulars 31 March

2014 31 March

2013 ERW & CRW Tubes 5,923.99 7,080.62

CR & HR Coils 10,153.12 12,135.47

Bought out 5,399.23 6,453.41

Slit 4,377.63 5,232.34

Others

9,652.80 11,537.46

Total 35,506.77 42,439.29

b. Details of Traded Goods Purchased


2014 31 March

2013 Water Tanks/Coolers/Hose 109.61 ETP 15.00 Open Type Fermenter 11.21 Clamps/Valves & Panels

9.99

Air Compressors/ Filters & Other Equipment 5.07 Voltage Stabiliser 3.54 Others

64.47 -

Total 218.89 - c. Value of Materials and Components Consumed :

Particulars 31 March 2014 31 March 2013

Amount % Amount %

Indigenous 35,506.77 100.00% 42,078.56 99.15%

Imported - 0.00%

360.73 0.85%

Total 35,506.77 100.00% 42,439.29 100.00%






d. Value of Stores, Spares, Consumables:


Amount % Amount %

Indigenous 706.52 99.64% 946.27 99.84% Imported 2.58 0.36% 1.53 0.16% Total 709.10 100.00% 947.80 100.00%

e. Value of imports on CIF basis:

Particulars

31 March 2014

31 March 2013

Raw Materials - 359.65

Stores and Spares - 36.56

Capital Goods

1,185.97 873.77

Total 1,185.97 910.33

f. Earnings in foreign currency:


31 March 2013

Exports (F.O.B. Value without Deemed Export) 3,256.04 4,785.19

Royalty -

109.00

Interest -

77.27

Total

3,256.04

4,971.46

g. Expenditure in foreign currency:


2014 31 March

2013 Foreign Travel

29.06 58.85

Interest

185.59 1,252.06

Commission

24.18 31.52

Total 238.83 1,342.43






34. Long term borrowings

I. Details of repayment of loans & charges created on assets for borrowing-

Name of Bank / Financial Institution Date of first

instalment Rate of Interest Repayment

Schedule

Security

Allahabad Bank 07/05/2012 6m LIBOR + 500 bps 60 Monthly 1st Pari passu charge on all

Fixed Assets of the Company and 2nd Pari

passu charge on Current Assets

of the Company and Personal

Guarantees by Managing

Directors and other Directors.

Axis Bank Ltd 30/09/2011 6m LIBOR + 250 bps 60 Monthly

State Bank of Bikaner & Jaipur 11/04/2012 6m LIBOR + 400 bps 10

Quarterly

State Bank of India 02/05/2012 6m LIBOR + 525 bps 30 Monthly

Central Bank of India 13/04/2012 6m LIBOR + 500 bps 16 Quarterly

Export Import Bank of India 01/03/2012 Exim LTMR + 300bps 24 Quarterly

Bank Of India 31/03/2012 OBR+300 bps 16 Quarterly

UCO Bank 26/06/2010 base+375 bps 20 Quarterly

Bank of India (London) 13/03/2013 6M LIBOR + 460 bps 28 Quarterly

BANK OF BARODA -(Singapore) 01/05/2012 6M LIBOR + 475 bps 24 Quarterly

ICICI Bank Ltd (Bahrain) 18/12/2012 6M LIBOR + 500 bps 30 Quarterly

Ratnakar Bank 31/07/2013 base + 200 bps 36 Monthly

ICICI Bank Ltd 02/04/2013 10.14% 36 Monthly

Hypothecation of car

HDFC Bank 07/07/2011 10.25% 36 Monthly



Kotak Mahindra Bank 10/06/2011 10.90% 48 Monthly





ICICI Bank 04/03/2013 10.41% 36 Monthly

Bajaj Finance Ltd. 01/05/2012 12.50% 24 monthly Unsecured




Auditors’ Report Balance Sheet Cash Flow Statement of Profit & Loss Notes



II. Details of repayment of long term secured & unsecured borrowings are as follows-


31 March 2013

Within one year 12,658.70 7,007.31

Two to five years 15,713.74 18,347.65

More than five years 1,934.70 1,934.70

Total 30,307.14 27,289.66

III. Details of default on account of repayment of loans and interest theron are as follows:

Particulars Period of Default 31 March 2014

31 March 2013

Long term borrowings

Secured

Allahabad Bank 8 Months 359.72 Nil

Axis Bank 8 Months 200.00 Nil

State Bank of Bikaner & Jaipur 8 Months 607.00 Nil

State Bank of India 8 Months 1,200.00 Nil

Central Bank of India 8 Months 645.00 Nil

Export Import Bank of India 8 Months 289.20 Nil

Bank Of India 8 Months 266.67 Nil

UCO Bank 8 Months 150.67 Nil

Bank of India (London) 8 Months 144.81 Nil

BANK OF BARODA -(Singapore) 8 Months 8.76 Nil

ICICI Bank Ltd (Bahrain) 8 Months 124.13 Nil

Ratnakar Bank 8 Months 416.67 Nil

Unsecured

Bajaj Finance 8 Months 411.11 Nil

Short term borrowings

Indian Overseas Banks 8 Months 293.75 Nil


Saraswat Bank 8 Months 384.48 Nil

Total 5,658.95 Nil

Stan

dalo

ne F

inan

cial

s




Auditors’ Report Balance Sheet Cash Flow Statement Statement of Profit & Loss Notes

Notes To The Financial Statements (All amounts are in Indian Rupees Lacs unless otherwise stated)

35. Micro, Small & Medium Enterprise Development Act, 2006 Suppliers covered under Micro, Small & Medium Enterprise Development Act, 2006, have not furnished required information regarding filing of necessary memorandum with appointed authority. In view of this, information under Section 22 of the said Act is not given. 36. Foreign Exchange difference on long term foreign currency borrowings

Pursuant to notification dated 29th December, 2011 issued by Ministry of Corporate Affairs, Government of India in respect of changes to Accounting Standard 11, the company has exercised the option of capitalising exchange differences arising on reporting of long term foreign currency loans in so far as they relate to the acquisition of depreciable capital assets. Accordingly, in the current financial year, an amount of Rs. 1,099.57/- lacs (March 31, 2013 Rs. 406.17/- lacs) has been capitalized 37. The company has recognised deferred tax asset since the management believes that the reversal of timing difference on account of depreciation would result in sufficient future taxable income against which the said deffered tax asset can be realised. 38. Payments to auditors


31 March 2013

As auditor

Statutory audit 15.00 15.00

Tax Audit

- -

Certification & Other Services 11.00 11.00

Reimbursement of expenses

1.21 0.75

TOTAL 27.21 26.75

39. Long Term Loans & Advances

I. Loans And Advances to Related Parties


2014 31 March

2013 Advance For Purchase of Material

1,792.16 1481.50

Advance for CSR Activities 99.01 -

Total 1,891.16 1481.05

II. Other Loans And Advances


31 March 2013

Share Application Money 870.03 570.03

Loan for Business Purposes 2,954.34 357.72

Other Advances for Business Purposes 1,666.83 2,920.81

Total - 5,491.20 3,848.56




Notes To The Financial Statements (All amounts are in Indian Rupees Lacs unless otherwise stated)

40. Short Term Loans And Advances


2014 31 March

2013

Advances recoverable in cash or in kind or for value to be received

Advances to Suppliers

Considered Good

941.89 1,461.95

Considered Doubtful

1,514.82 -

Others

738.89 3,300.99

3,195.59 4,762.94

Provision for Advances

1,514.82 -

1,680.78 4,762.94

Balance with Central Excise, Customs & VAT etc.

283.87 854.25

Total 1,964.65 5,617.19

41. Other Payables


2014 31 March

2013

Statutory Dues

510.16 518.14

Deposits 10.00 10.00

Advances from customers 428.29 2,736.34

Others 233.61 418.93

Total 1,182.06 3,683.41

42. Corporate Debt Restructuring

The Company has filed an application with the Corporate Debt Restructuring (CDR) Cell in September, 2013 for restructuring of its debts. The application was admitted by the CDR Cell on September 26, 2013 and is in the process of approval. Pending the approval of the application, borrowings and other balances with banks reflected in the Notes and interest thereon is recognised in the books as per the original terms of sanction and/or as per bank statements received and is subject to adjustments which may arise on approval of CDR scheme and reconciliations of the said balances with the banks.





43. Cost of Material and Components Consumed & (Increase)/Decrease in Inventories of Finished Goods and Work-in-progress During the year, the operations of the Company were adversely impacted by the downturn in Autocomponents and slowdown in demand from Power Sector due to various problems such as coal linkages, etc. Accordingly the company has made reassessment of inventory held and made provision/write down of Rs. 13,039.55/- lacs in value of inventories on account of slow and non moving inventory, reassessment of net realisable value and consumption norms.

44. Based on the reassessment of realisation of Debtors and Loans and Advances, the Company has made a Provision of Doubtful Debts/ Advances and Other Current Assets of Rs. 17,808.76 /- Lacs (Previous year Rs 56.77/- Lacs) and written off Bad Debts amounting to Rs. 3,428.52/- Lacs. Further, the credit balances which are considered as not payable by the management amounting to Rs. 9,699.68/- Lacs and provisions no longer payable amounting to Rs. 453.79/- Lacs have been written back and shown in Note No. 21 - Other Income.

45.Prior year comparatives Previous year figures have been regrouped/ reclassified wherever necessary.

For B. K. Khare & Co For and on behalf of Board of Directors Chartered Accountants of Innoventive Industries Limited Firm Regn No. 105102W

Prasad Paranjape Chandu Chavan Ravindra Katre Partner Chairman & Managing Director Whole Time Director Membership No. 047296 Pune May 29, 2014 Pune May 29, 2014

INNOVENTIVE I N D U S T R I E SCIN L29309PN1991PLC063045

84 Annual Report 2013‐2014


Auditors’ Report Balance Sheet Statement of Profit & Loss Cash Flow Statement Note

Consolidated Financials Auditors’ Report Cash Flow Statement

Balance Sheet Notes Statement of Profit & Loss

Independent Auditors’ Report

85

INDEPENDENT AUDITOR’S REPORT To the Members of Innoventive Industries Limited

1. We have audited the accompanying consolidated financial statements of Innoventive Industries Limited (“the Company”) and its subsidiaries, hereinafter referred to as the “Group” which comprise the consolidated Balance Sheet as at March 31, 2014, and the consolidated Statement of Profit and Loss and consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

2. The Company’s Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with accounting principles generally accepted in India; this includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.



Independent Auditors’ Report

86

Opinion

6. In our opinion the consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of the Accounting Standards (AS) 21‐ Consolidated Financial Statements notified under Section 211(3C) of the Companies Act 1956.

7. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries as noted below, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Company as at

March 31, 2014; (b) in the case of the consolidated statement of Profit and Loss, of the profit for the year ended

on that date; and (c) in the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on

that date.

Other Matters

7. We did not audit the financial statements of Arihant Steel and Metal Wires Private Limited, Arihant Auto Components Private Limited, Saicon Steels Private Limited, Sevenstar Electrodes Private Limited, Sankalp Engineering and Services Private Limited, Innovative Technomics Private Limited, Innoventive Americas Inc. and Innoventive Industries UK Limited included in the consolidated financial statements, whose financial statements reflect total assets of Rs. 31,981.06 lacs as at March 31, 2014, total revenues of Rs. 21,437.34 lacs and cash inflows of Rs. 815.84 lacs for the year then ended. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion is based solely on the reports of the other auditors. Our opinion is not qualified in respect of this matter.

For B. K. Khare & Co. Chartered Accountants Firm’s Registration Number 105102W Prasad Paranjape Partner Membership Number: 47296 Place: Pune Date: May 29, 2014

Consolidated Financial Statements

Auditors Report

Balance Sheet

Statement of Profit and Loss

Cash Flow Statement

Notes

Consolidated Balance Sheet as at 31 March 2014(All amounts are in Indian Rupees Lacs unless otherwise stated)

EQUITY AND LIABILITIES

Shareholders' FundsShare Capital 3 5,964.40 5,964.40 Reserves & Surplus 4 (1,978.17) 45,060.03

3,986.23 51,024.43

Minority Interest 2,414.62 4,745.81

Non Current LiabilitiesLong Term Borrowings 5 22,589.44 22,828.53 Deferred Tax Liability (net) 6 744.71 6,626.92 Other Long Term Liabilities 7 372.82 192.94 Long Term Provision 8 107.77 102.21

23,814.74 29,750.60 Current Liabilities

Short Term Borrowings 9 74,529.66 69,596.92 Trade Payables 10 10,734.16 5,906.61 Other Current Liabilities 10 15,625.52 12,405.15 Short Term Provisions 11 2,903.76 3,207.94

1,03,793.10 91,116.62

TOTAL 1,34,008.69 1,76,637.46

ASSETS

Non Current AssetsFixed Assets

Tangible Assets 12 63,232.71 58,253.65 Intangible Assets 12 9,670.57 3,737.40 Capital Work in Progress 12 7,512.99 7,737.59 Intangible Assets Under Development 12 ‐ 3,798.71 Goodwill on Consolidation 838.12 838.12 Non Current Investments 13 17.04 17.04 Long Term Loans and Advances 14 10,785.37 9,435.12 Other Non Current Assets 15 585.95 4,995.04

92,642.75 88,812.67 Current Assets

Inventories 16 14,545.34 33,113.59 Trade Receivables 17 14,784.34 30,697.64 Cash & Bank Balances 18 3,482.12 3,029.97 Short Term Loans & Advances 19 3,595.85 8,116.79 Other Current Assets 20 4,958.30 12,866.80

41,365.95 87,824.79

TOTAL 1,34,008.69 1,76,637.46

Nature of business and Significant accounting policies 1 & 2The accompanying notes are an integral part of the financial statementsAs per our Report of even dateFor B. K. KHARE & Co. For and on behalf of Board of Directors ofChartered Accountants Innoventive Industries LimitedFirm Registration No. 105102W

Prasad Paranjape Chandu Chavan Ravindra Katre

Partner Chairman and Whole Time DirectorMembership No.: 047296 Managing Director

Pune, May 29, 2014 Pune, May 29, 2014

Particulars Note No.

87

March 31, 2014 March 31, 2013


Auditors Report

Balance Sheet


Cash Flow Statement

Notes

Consolidated Statement of Profit or Loss For The Year Ended March 31, 2014


INCOME Revenue From Operations (Gross) 21 59,221.34 88,162.08 Less: Excise Duty 3,375.92 5,300.09 Revenue From Operations (Net) 55,845.42 82,861.99 Other Income 22 11,711.07 4,295.67

Total Revenue 67,556.49 87,157.66

EXPENDITURECost of Material and components Consumed 23 46,974.36 54,390.83 Purchase of Stock in Trade 23 218.87 ‐ (Increase)/Decrease in Inventories 23 14,497.71 (8,750.47) Employee Benefit Expenses 24 5,483.26 5,170.75 Manufacturing and Other Expenses 25 34,861.23 10,976.94 Finance Cost 26 12,339.49 11,386.31 Depreciation and Amortization 12 4,505.65 4,284.99

Total Expenditure 1,18,880.57 77,459.35

Profit Before Tax (51,324.08) 9,698.31

Tax Expenses‐ Current Tax 175.98 2,169.30 ‐ Deferred Tax Charge/(Credit) (5,882.21) 1,537.99 ‐ MAT Charge/ (Credit) 4,750.74 (1,377.69) ‐ Tax for Earlier Years 13.25 323.96

Total Tax Expenses (50,381.84) 7,044.75

Less: Share of Minorty Interest (2,339.45) 689.78

Profit/ (Loss) for the year (48,042.39) 6,354.97

Earning Per Share (EPS) Basic and Diluted [Nominal value of Rs. 10/‐ each (March 31, 2013 Rs.10/‐ )] Rs. (80.55) Rs. 10.65

Nature of business and Significant accounting policies 1 & 2The accompanying notes are an integral part of the financial statementsAs per our Report of even dateFor B. K. KHARE & Co. For and on behalf of Board of Directors ofChartered Accountants Innoventive Industries LimitedFirm Registration No. 105102W


Partner Chairman and Whole Time DirectorMembership No.: 047296 Managing Director

Pune, May 29, 2014 Pune, May 29, 201488

Particulars Note No. March 31, 2014 March 31, 2013


Auditors Report

Balance Sheet


Cash Flow Statement

Notes

Consolidated Cash Flow For the Year Ended March 31, 2014(All amounts are in Indian Rupees Lacs unless otherwise stated)

March 31, 2014 March 31, 2013

Cash flow from operating activitiesProfit / (Loss) before tax from operations (51,324.08) 9,698.31

Non‐cash adjustment to reconcile profit before tax to net cash flowsDepreciation / Amortization 4,505.65 4,284.99 Loss / (Profit) on Sale or Write off of Fixed Assets 1,741.61 14.91 Unrealized foreign exchange loss/(gain) (234.98) (255.94) Interest expense 12,339.49 8,098.56 Dividend income ‐ ‐ Provision for doubtful debts written back (453.79) (257.07) Sundry balances written back (9,702.26) ‐ Provision for doubtful debts 17,808.76 56.77 Dimunition in value of Long term investment ‐ ‐ Profit on sale on fixed assets (275.72) ‐ Bad debts written off 4,237.28 58.10 Sundry balances written off 174.82 ‐ Interest Income (365.94) ‐

Operating Profit Before Working Capital Changes (21,549.16) 21,698.64

Movements in working capital :Increase/(decrease) in trade payables 14,529.81 (4,791.64) Increase/(decrease) in other current liabilities 3,263.84 3,359.85 Increase/(decrease) in provisions 556.55 250.90 Increase/(decrease) in other non current liabilities 179.88 55.13 Decrease/(increase) in trade receivables 5,357.66 1,183.34 Decrease/(increase) in inventories 18,568.24 (10,011.50) Decrease / (increase) in short‐term loans and advances 3,006.12 (105.52) Decrease/(increase) in other current assets (1,788.10) (1,215.35) Decrease / (increase) in long‐term loans and advances (1,350.25) (1,590.50) Change in Foreign Currency Translation Reserve 342.56 ‐

Cash Generated from / (used in) Operations 21,117.14 8,833.35

Direct Taxes Paid (Net of Refunds), Deferred Tax 382.77 1,869.02 Net Cash Flow from / (used in) Operating Activities (A) 20,734.37 6,964.32

Cash Flows from Investing ActivitiesPurchase of fixed assets, including intangible assets, CWIP and capital advances (12,959.76) (13,443.04) Proceeds from sale of fixed assets 342.57 1,739.09 (Increase)/Decrease in Investment ‐ (5.00) Interest received 365.94 ‐ Dividends received ‐ ‐ Decrease / (Increase) Investments in bank deposits and margin money (655.51) (1,090.07)

Net cash flow from / (used in) investing activities (B) (12,906.77) (12,799.02)

Cash flows from financing activities:Repayment of Long‐term borrowings (2,739.09) (7,448.57) Proceeds from Long‐term borrowings 2,500.00 ‐ Proceeds of Short‐term borrowings 4,932.74 19,609.16 Interest paid (12,382.97) (3,921.40) Dividend Paid (Including Dividend Distribution Tax) ‐ (2,079.64)

Net Cash Flow from / (used in) in Financing Activities (C) (7,689.32) 6,159.55

Net Increase / (Decrease) in Cash and Cash Equivalents (A + B + C) 138.28 324.86

Cash and Cash Equivalents at the Beginning of the Year 2,030.94 1,706.09 Cash and Cash Equivalents at the End of the Year 2,169.23 2,030.95

Components of Cash and Cash Equivalents Cash on Hand 25.48 40.06 With banks‐ on current account 3.68 1.56 ‐ On Current Accounts 2,139.79 1,989.00 ‐ On Unpaid Dividend Accounts* 0.28 0.32

Total Cash and Cash Equivalents (Note 18) 2,169.23 2,030.94 * The company can utilise these balances only towards settlement of the respective unpaid dividend

As per our Report of even date

For B. K. KHARE & Co. For and on behalf of Board of Directors of

Chartered Accountants Innoventive Industries Limited

Firm Registration No. 105102W


Partner Chairman and Whole Time Director

Membership No.: 047296 Managing Director

Pune, May 29, 2014 Pune, May 29, 2014

Particulars

89



Notes to the financial statements

90

1. Nature of Business:

Innoventive Industries Limited (‘IIL’ or ‘the Company’) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (‘the Act’). The company manufactures precision steel tubes, membrane panel strips, auto components and other steel products catering to industries in automobiles, boilers and heat exchangers, energy, oil & gas, farm equipment & general engineering etc. The Company caters to both domestic and international markets.

2. Significant Accounting Policies

2.1 Basis of Preparation:

The consolidated financial statements comprise the financial statements of Innoventive Industries

Limited (‘IIL’ or ‘the Company’) and its subsidiaries, (together referred to as ‘Innoventive’ or ‘the

Group’). The consolidated financial statements are prepared under the historical cost convention, on

accrual basis and comply in all material respects, with the mandatory accounting standards as notified

by the Companies (Accounting Standards) Rules, 2006 as amended ('the Rules') and the relevant

provisions of the Companies Act, 1956 (‘the Act’). The accounting policies have been consistently

applied by the Group; and the accounting policies not referred to otherwise, are in conformity with

Indian Generally Accepted Accounting Principles (‘Indian GAAP’).

2.2 Principles of consolidation

A) The Consolidated Financial Statements are based on the audited Financial Statements of the Subsidiaries and are prepared in accordance with Accounting Standard 21 – ‘Consolidated Financial Statements’ as notified by the Rules.

B) The Financial Statements of the Holding Company and its Subsidiaries have been combined on a line‐by‐line basis by adding together the like items of assets, liabilities, income and expenses, after eliminating intra group balances and intra group transactions. The unrealised profits or losses resulting from the intra group transactions have been eliminated.

C) The Consolidated Financial Statements have been prepared using uniform accounting policies for the transactions and events in similar circumstances and are presented, to the extent possible, in the same manner as the Company’s standalone financial statements.




91

D) Following subsidiaries are included in consolidation:

* Became a Subsidiary w. e. f October 1st, 2012

2.3 Use of estimates The preparation of financial statements in conformity with Indian GAAP requires the management to

make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses,

assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period.

Although these estimates are based on the management’s best knowledge of current events and

actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a

material adjustment to the carrying amounts of assets or liabilities in future periods.

2.4 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the

company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of

the goods have been passed to the buyer, usually on delivery of the goods. Excise duty deducted from

revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of

liability arising during the year and are recorded inclusive of incentives received from State

Government, excise duty, net of trade discounts, rebates, price adjustments, rejections and shortage

in transit.

Dividends are recorded when the right to receive is established.

Interest income is recognized on a time proportion basis taking into account the amount outstanding

and the applicable interest rate.

Export benefits are accrued when it is reasonably certain that those will get realised.

Name of the subsidiary Relationship 2013‐2014 2012‐2013

Sankalp Forgings Private Limited Subsidiary 51% 51%

Saicon Steels Private Limited Subsidiary 51% 51%

Sevenstar Electrodes Private Limited Subsidiary 100% 100%

Arihant Auto Components Private Limited Subsidiary 100% 100%

Arihant Steel & Metal Wires Private Limited Subsidiary 100% 100%

Innoventive Americas, INC. Subsidiary 100% 100%

Innoventive Industries UK Limited Subsidiary 100% 100%

Innovative Technomics Private Limited* Subsidiary 51% 51%

Sankalp Middle East FZE Fellow Subsidiary 100% 100%

Sankalp America INC Fellow Subsidiary 100% 100%

Salem Steels NA LLC Fellow Subsidiary 85% 85%




92

2.5 Tangible assets

Tangible assets are stated at historical cost, net of accumulated depreciation and accumulated

impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria

are met and directly attributable costs of bringing the asset to its working condition for the intended

use. Trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of tangible asset is added to its book value only if it

increases the future benefits from the existing asset beyond its previously assessed standard of

performance. All other expenses on existing tangible assets, including day‐to‐day repair and

maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss

for the period during which such expenses are incurred.

Gains or losses arising from de‐recognition of fixed assets are measured as the difference between the

net disposal proceeds and the carrying amount of the asset and are recognized in the statement of

profit and loss when the asset is derecognized.

2.6 Depreciation

Depreciation on tangible assets except items mentioned below is provided on the straight line method,

pro‐rata to the period of use. The rates of depreciation prescribed in Schedule XIV to the Companies

Act, 1956 have been adopted by the Company, which in view of the management reflect the useful

lives of related fixed assets.

In case of the Auto Division, accelerated rates of depreciation have been adopted by the Company as

the management is of the view that the same reflects the useful life of certain fixed assets.

Asset Rates as per Schedule XIV Depreciation Rate Used

Plant & Machinery 10.34% 14.28%

Electrification 4.75% 14.28%

Assets costing individually, Rs. 5,000 or less are depreciated at the rate of 100%.




93

Capital work‐in‐progress includes the cost of fixed assets that are not ready for intended use as at the

Balance Sheet date.

Building and other constructions on leasehold land are depreciated over the lease term or the useful

life, whichever is shorter.

2.7 Intangible assets and amortization Intangible assets are recognised when the asset is identifiable, is within the control of the Group, it is

probable that the future economic benefits that are attributable to the asset will flow to the Company

and cost of the asset can be reliably measured.

Intangible assets consisting of technical know‐how, patents and software, are recorded at acquisition

cost and amortised on straight‐line basis based on the following useful lives, which in management’s

estimate represents the period during which economic benefits will be derived from their use.

Software is to be amortised over the period 5 years.

Pilgering Process Patent is to be amortized over a period of 10 Years.

Product development Expense is amortised over the period of 10 years.

Patent Trademark Costs are to be amortised over a period of 10 years.

2.8 Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the

arrangement of borrowings and exchange differences arising from foreign currency borrowings to the

extent they are regarded as an adjustment to the interest cost. Borrowing costs directly attributable

to the acquisition, construction or production of an asset that necessarily takes a substantial period of

time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset.

All other borrowing costs are expensed in the period they occur.

2.9 Capitalisation of foreign exchange

In accordance with MCA notification on Accounting Standard (AS 11), in respect of long term

foreign currency loan taken for acquisition of assets, the exchange difference arising on

reporting of said loan is adjusted to the cost of the assets, which was earlier been recognised

as income or expense in the statement of Profit and Loss. (Also refer note 36 below.)




94

2.10 Impairment of assets

The carrying amounts of the Group’s assets including intangible assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indications exist, the assets recoverable amount is estimated, as the higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reinstated at the recoverable amount subject to a maximum of depreciable historical cost.

2.11 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the

date on which such investments are made, are classified as current investments. All other investments

are classified as long‐term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and

directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined

on an individual investment basis. Long‐term investments are carried at cost. However, provision for

diminution in value is made to recognize a decline other than temporary in the value of the

investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds

is charged or credited to the statement of profit and loss.

2.12 Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value.

However, materials and other items held for use in the production of inventories are not written down

below cost if the finished products in which they will be incorporated are expected to be sold at or

above cost. Cost of raw materials, components and stores and spares is determined on a weighted

average basis.

Work‐in‐progress and finished goods are valued at lower of cost and net realizable value. Cost includes

direct materials and labour and a proportion of manufacturing overheads based on normal operating

capacity. Cost of finished goods includes excise duty and is determined on a weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated

costs of completion and estimated costs necessary to make the sale.




95

2.13 Foreign currency transactions

Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign

currency amount the exchange rate between the reporting currency and the foreign currency at the

date of the transaction.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting

date. Non‐monetary items, which are measured in terms of historical cost denominated in a foreign

currency, are reported using the exchange rate at the date of the transaction. Non‐monetary items,

which are measured at fair value or other similar valuation denominated in a foreign currency, are

translated using the exchange rate at the date when such value was determined.

The premium or discount arising at the inception of forward exchange contract is amortized and

recognized as an expense/income over the life of the contract. Any profit or loss arising on cancellation

or renewal of such forward exchange contract is also recognized as income or as expense for the

period.

2.14 Leases

Leases, where the lessor effectively retains, substantially, all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight line basis over the lease term.

2.15 Employee benefits

a) Contribution to Provident Fund Retirement benefit in the form of provident fund is a defined contribution scheme. The

contributions to the provident fund are charged to the statement of profit and loss for the year

when the contributions are due. The company has no obligation, other than the contribution

payable to the provident fund.

b) Gratuity The company has gratuity as a defined benefit liability. The cost of providing benefits under this

plan is determined on the basis of actuarial valuation at each year‐end. Actuarial valuation is carried




96

out using the projected unit credit method. Actuarial gains and losses for defined benefit plan are

recognized in full in the period in which they occur in the statement of profit and loss.

c) Leave encashment Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short‐

term employee benefit. The company measures the expected cost of such absences as the

additional amount that it expects to pay as a result of the unused entitlement that has accumulated

at the reporting date.

The company treats accumulated leave expected to be carried forward beyond twelve months, as

long‐term employee benefit for measurement purposes. Such long‐term compensated absences

are provided for based on the actuarial valuation using the projected unit credit method at the

year‐end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are

not deferred.

2.16 Provisions and Contingencies

A provision is recognised when the Company has present obligation as a result of past event and it is

probable that an outflow of resources will be required to settle the obligation, in respect of which

reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its

present value and are determined based on the best estimate required to settle the obligation at the

Balance Sheet date.

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. When there is a possible obligation

or a present obligation in respect of which the likelihood of outflow of resources is remote, no

provision or disclosure is made.

Contingent assets are neither recognized nor disclosed in the financial statements.

2.17 Income taxes

Tax expense comprises current and deferred tax. Current income‐tax is measured at the amount

expected to be paid to the tax authorities in accordance with the Income‐tax Act, 1961.




97

Deferred income taxes reflect the impact of timing differences between taxable income and

accounting income originating during the current year and reversal of timing differences for the earlier

years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted

at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized

in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are

recognized for deductible timing differences only to the extent that there is reasonable certainty that

sufficient future taxable income will be available against which such deferred tax assets can be

realized. In situations where the company has unabsorbed depreciation or carry forward tax losses,

all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence

that they can be realized against future taxable profits.

At each reporting date, the company re‐assesses unrecognized deferred tax assets. It recognizes

unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain,

as the case may be, that sufficient future taxable income will be available against which such deferred

tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes‐

down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or

virtually certain, as the case may be, that sufficient future taxable income will be available against

which deferred tax asset can be realized. Any such write‐down is reversed to the extent that it becomes

reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be

available

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set‐off

current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate

to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current

tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing

evidence that the company will pay normal income tax during the specified period, i.e., the period for

which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT

credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect

of Minimum Alternative Tax under the Income‐tax Act, 1961, the said asset is created by way of credit

to the statement of profit and loss and shown as “MAT Credit Entitlement.” The company reviews the

“MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the

company does not have convincing evidence that it will pay normal tax during the specified period.




98

2.18 Earning per share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to

equity shareholders by the weighted average number of equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the period is adjusted for events

such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation

of shares) that have changed the number of equity shares outstanding, without a corresponding

change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period

attributable to equity shareholders and the weighted average number of shares outstanding during

the period are adjusted for the effects of all dilutive potential equity shares.

2.19 Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand

and short‐term investments with an original maturity of three months or less.

2.20 Government Grants and Subsidies

Revenue grants and subsidies from the government are recognized when there is reasonable

assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

2.21 Identification of segments

The company’s operating businesses are organized and managed separately according to the nature

of products and services provided, with each segment representing a strategic business unit that offers

different products and serves different markets. The analysis of geographical segments is based on the

areas in which major operating divisions of the company operate.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each

segment to the total common costs.




99

Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any

business segment.

Segment accounting policies

The company prepares its segment information in conformity with the accounting policies adopted for

preparing and presenting the financial statements of the company as a whole.


Auditors Report

Balance Sheet


Cash Flow Statement

Notes

Notes to Consolidated Financial Statement for the year ended March 31, 2014


Authorized

75,000,000 (March 2013: 75,000,000) Equity Shares of Rs. 10/‐ each 7,500.00 7,500.00

Issued, Subscribed & Fully Paid Up59,643,999 (March 2013: 59,643,999) Equity Shares of Rs. 10/‐ each fully paid ‐ up 5,964.40 5,964.40

Total 5,964.40 5,964.40

a) Reconciliation of shares outstanding at the beginning and at the end of the reporting period:

No. of Shares Amount No. of Shares AmountAt the beginning of the period 5,96,43,999 5,964.40 5,96,43,999 5,964.40 Shares issued during the period ‐ ‐ ‐ ‐

Bonus Issue of equity shares 1 and 2 ‐ ‐

Preferential Allotment of equity shares ‐ ‐ Initial Public Offer of equity shares ‐ ‐ Outstanding at the end of the period 5,96,43,999 5,964.40 5,96,43,999 5,964.40

b) Terms/ Rights attached to equity shares:

c) Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates:The company does not have any holding or ultimate holding company.

d) Details of shareholders holding more than 5% shares in the company:

Name of the ShareholdersNo. of Shares Percentage No. of Shares Percentage

Chandu Laxman Chavan (Promoter) 1,32,78,700 22.26% 1,32,78,700 22.26%Ravindra Waman Katre (Promoter) 38,24,437 6.41% 21,02,500 3.53%Sanjay Waghulade (Promoter) 31,42,601 5.27% 31,30,601 5.25%Kavos Capital Limited 80,38,632 13.48% 80,38,632 13.48%Standard Chartered Private Equity (Mauritius) Limit 42,06,441 7.05% 42,06,441 7.05%Reliance Capital Trustee Co. Ltd. A/C‐Reliance Regu 30,00,000 5.03% 30,00,000 5.03%

e)

Name of the Shareholders March 31, 2014 March 31, 20133,04,49,360 3,04,49,360

3,79,280 3,79,280 ‐ ‐

Equity shares bought back by the company ‐ ‐

Notes:

1

2

3 Share Capital March 31, 2014 March 31, 2013

ParticularsMarch 31,2014 March 31,2013

Equity shares allotted as fully paid bonus shares by capitalisation of Capital Redemption Equity shares allotted as fully paid up pursuant to contracts for consideration other than

Bonus Issue of 3,04,49,360 equity shares in the ratio of five shares for every share held in the Company as on the record date, i.e.

September 18, 2010.

Bonus Issue of 379,280 equity shares only to Kavos Capital Limited in the ratio of 1.51712 shares for every single share on their existing

holding of 250,000 equity shares as on the record date, i.e. July 30, 2010 in compliance with Section 205 (3) of the Companies Act,

1956.

100Annual Report 2013 ‐ 2014

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of the equity shares is entitled for one vote

per share.

During the year ended March 31, 2014, the amount of per share dividend recognised as distributed to equity shareholders was Rs. Nil. (March

March 31,2014 March 31,2013

Aggregate number of bonus shares issued / bought back during the period of five years immediately preceding the reporting date:

Equity shares allotted as fully paid bonus shares by capitalisation of Reserve & Surplus


Auditors Report

Balance Sheet


Cash Flow Statement

Notes



Revaluation Reserve 65.64 65.64 Capital Redemption Reserve 362.07 362.07 Capital Reserve 149.76 149.76 Securities Premium 26,683.30 26,683.30

General ReserveBalance as per last financials 2,486.76 1,772.20 Add : Adjustment on account of exchange fluctuation capitalised (net) ‐ 111.94 Add : Transferred from profit & loss account ‐ 602.62

2,486.76 2,486.76

Foreign Exchange Translation ReserveBalance as per last financials 141.28 4.11 Add : Transferred during the year 342.56 137.17

483.84 141.28

Profit and Loss AccountBalance as per last financials 15,171.22 10,116.67 Add : Profit for the year as per statement of profit or loss (48,042.39) 6,354.97 Add : Reversal of Proposed Dividend on Equity Shares 565.52 ‐ Add : Reversal of Dividend Distribution Tax 96.11 ‐ Less : Proposed Dividend on Equity Shares ‐ 596.44 Less : Dividend Distribution Tax ‐ 101.36 Less : Transfer to General Reserve ‐ 602.62 Less: Utilisation for Issue of Bonus Shares ‐ ‐

(32,209.54) 15,171.22

Total (1,978.17) 45,060.03

Long Term Borrowings (Refer Note No. 42)

Term loans from banks (Secured)* 20,626.16 19,448.50 Term loans from banks (Unsecured)* 1.08 11.93 Term loans from Financial Institution (Secured)* 222.54 221.81 Term loans from Financial Institution (Unsecured)* 811.02 1,742.23 Finance Lease * 35.00 49.56 Vehicle Loans (Secured)* 21.95 41.55 Loan from Holding Company ‐ ‐ Loan from Related Parties ‐ ‐ Loan from Other Parties (Unsecured) 851.27 1,292.53 Sales Tax Deferal Term Loan 20.42 20.42

Total 22,589.44 22,828.53

Deferred tax liabilityDifference between tax depreciation and depreciation/amortization 8,221.99 7,194.94 as per financial reporting

8,221.99 7,194.94 Deferred tax assets (Refer Note No. 37)Provision for bad and doubtful debts 6,051.11 147.23 Employee Benefits 62.55 96.34 Unabsorbed depreciation 1,108.66 ‐ Others 254.96 324.45

7,477.28 568.02

Deferred Tax Liability (net) 744.71 6,626.92

* Notes: For details of rate of interest, security and repayment schedule to banks / financial

institutions Refer Note No. 34(I) (II) (III)

6 Deferred Tax Liability (Net) March 31, 2014 March 31, 2013

101

4 Reserves & Surplus March 31, 2014 March 31, 2013

5 March 31, 2014 March 31, 2013

Annual Report 2013 ‐ 2014


Auditors Report

Balance Sheet


Cash Flow Statement

Notes



Creditors for Capital Expenses (Refer Note. No. 35) 372.82 192.94

Total 372.82 192.94

Provision for Employee BenefitGratuity 50.43 69.18 Leave Encashment 26.96 12.61

Provision for Warranty 30.38 20.42

Total 107.77 102.21

Cash credits from banks (Secured)* 49,068.12 36,029.59 Short term loans from Banks/ Financial Institutions (Secured)* 25,436.56 33,567.33 Loan from Key Management Personnel (Unsecured) 24.98 ‐

Total 74,529.66 69,596.92 * Notes: For details of interest ranges and security Refer Note No. 34(IV)

i) Trade Payables:Sundry Creditors 10,734.16 5,906.61

10,734.16 5,906.61 ii) Other current liabilities:

Current maturities of long term bank borrowings (Secured)* 12,223.25 6,809.67 Current maturities of long term bank borrowings vehicle loan (Secured)* 28.74 53.03 Current maturities of long term financial Institutions borrowings (Unsecured)* 1,168.53 1,008.35 Interest accrued but not due 18.42 61.89 Unclaimed dividend 0.28 0.34 Other Payables (Refer Note. No. 40) 2,186.30 4,471.87

15,625.52 12,405.15

Total 26,359.68 18,311.76 *(Also Refer Note Nos. 35 & 44)

Proposed Dividend on Equity Shares ‐ 596.44 Provision for Tax on Dividend Distribution ‐ 101.36 Income Tax Provision 1,349.62 1,543.16 Wealth Tax Provision 1.75 1.75 Provision for Gratuity ( Refer Note No. 33) 42.69 27.69 Provision for Leave Encashment 177.70 123.74 Provision for Director's Remuneration 3.74 ‐ Provision for Expenses 1,328.26 813.80

Total 2,903.76 3,207.94

7 Other Long Term Liabilities March 31, 2014 March 31, 2013

8 Long Term Provisions March 31, 2014 March 31, 2013

11 Short Term Provisions March 31, 2014 March 31, 2013

( This space is intentionly left blank )102

9 Short Term Borrowings (Refer Note No. 42) March 31, 2014 March 31, 2013

10 Trade payables and other current liabilities March 31, 2014 March 31, 2013


Innoventive Industries LimitedNotes to Consolidated Financial Statement for the year March 31, 2014(All amounts are in Indian Rupees Lacs unless otherwise stated)

12 Fixed Assets

TANGIBLE ASSETS1 Free Hold Land 2,989.38 ‐ 24.76 2,964.62 ‐ ‐ ‐ ‐ ‐ ‐ 2,964.62 2,989.38 2 Leasehold Land 0.11 ‐ ‐ 0.11 ‐ ‐ ‐ ‐ ‐ ‐ 0.11 0.11 3 Building 14,604.74 426.49 34.60 14,996.63 1,472.88 529.77 11.61 1,991.04 ‐ ‐ 13,005.59 13,131.86 4 Plant & Machinery 34,932.57 4,498.06 ‐ 39,430.63 7,390.94 2,375.80 ‐ 9,766.74 5.15 26.41 29,690.30 27,546.78 5 Computers 530.67 3.27 ‐ 533.94 324.63 62.14 ‐ 386.77 ‐ ‐ 147.17 206.04 6 Tools & Dies 17,612.04 5,886.78 4,085.61 19,413.21 4,081.26 1,015.06 2,359.51 2,736.81 ‐ ‐ 16,676.40 13,530.78 7 Furniture & Fixtures 464.59 0.61 9.91 455.29 121.30 36.37 9.04 148.63 ‐ 4.55 311.21 343.29 8 Office Equipment 143.58 1.14 ‐ 144.72 45.46 7.87 ‐ 53.33 ‐ ‐ 91.39 98.12 9 Vehicles 550.65 26.68 50.13 527.20 143.36 54.33 16.41 181.28 ‐ ‐ 345.92 407.29

TOTAL TANGIBLE ASSETS 71,828.33 10,843.03 4,205.01 78,466.35 13,579.83 4,081.34 2,396.57 15,264.60 5.15 30.96 63,232.71 58,253.65 PREVIOUS YEAR 64,264.74 9,676.96 2,113.37 71,828.33 9,995.76 3,943.40 359.33 13,579.83 ‐ 5.15

INTANGIBLE ASSETS10 Goodwill 1,313.05 ‐ ‐ 1,313.05 ‐ ‐ ‐ ‐ ‐ 216.44 1,529.49 1,313.05 11 Software 678.17 5.48 ‐ 683.65 403.84 115.15 ‐ 518.99 ‐ 1.00 165.66 274.33 12 Research and Development Assets

I) Pilgering Process Patent 1,950.84 4,396.63 ‐ 6,347.47 114.71 275.46 ‐ 390.17 ‐ ‐ 5,957.30 1,836.13 II) Product Development Cost 336.71 ‐ ‐ 336.71 22.82 33.67 ‐ 56.49 ‐ ‐ 280.22 313.89 III) Patent and Trademark ‐ 1,737.93 ‐ 1,737.93 ‐ 0.03 ‐ 0.03 ‐ ‐ 1,737.90 ‐

TOTAL INTANGIBLE ASSETS 4,278.77 6,140.04 ‐ 10,418.81 541.37 424.31 ‐ 965.68 ‐ 217.44 9,670.57 3,737.40 PREVIOUS YEAR 1,895.25 2,383.52 ‐ 4,278.77 199.78 341.59 ‐ 541.37 ‐ ‐

CAPITAL WORK IN PROGRESS13 Building 346.94 35.40 324.69 57.65 ‐ ‐ ‐ ‐ ‐ ‐ 57.65 346.94 14 Plant & Machinery 6,832.73 1,334.21 711.60 7,455.34 ‐ ‐ ‐ ‐ ‐ ‐ 7,455.34 6,832.73 15 Tools & Dies 557.92 ‐ 557.92 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 557.92

TOTAL CAPITAL WORK IN PROGRESS 7,737.59 1,369.61 1,594.21 7,512.99 ‐ ‐ ‐ ‐ ‐ ‐ 7,512.99 7,737.59

PREVIOUS YEAR 6,487.34 1,733.40 483.15 7,737.59 ‐ ‐ ‐ ‐ ‐ ‐ ‐

INTANGIBLE ASSETS UNDER DEVELOPMENT16 Research and Development 2,838.86 ‐ 2,838.86 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 2,838.86 17 Patent and Trademark 959.85 ‐ 959.85 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 959.85

‐ ‐ TOTAL INTANGIBLE ASSETS UNDER

DEVELOPMENT3,798.71 ‐ 3,798.71 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,798.71

PREVIOUS YEAR 4,348.39 ‐ 549.68 3,798.71 ‐ ‐ ‐ ‐ ‐ ‐ Total 87,643.40 18,352.68 9,597.93 96,398.15 14,121.20 4,505.65 2,396.57 16,230.28 5.15 248.40 80,416.27 73,527.35

Notes :1 Amount of borrowing cost capitalised during the period is as underParticulars March 31,2014 March 31,2013Interest charges ‐ 359.22 Other charges ‐ Total ‐ 359.22

Amount of exchange fluctuation loss capitalised during the current year is Rs. 1,099.57/‐ Lacs of which Rs. 363.35/‐ Lacs (Previous Year Rs. 134.22/‐ Lacs) is capitalised on Buildings and Rs. 736.22/‐ Lacs (Previous Year Rs. 271.95/‐ Lacsis on Plant & Machinery (Refer Note No. 36).

2 Pilgering patent process have remaining useful life of 8 years and balance carrying value of Rs. 1,641.05/‐ Lacs. (Previous Year Rs. 1,836.13/‐ Lacs)3 Opening Product development costs and current year additions to the same have remaining useful life of 8 years and 10 years respectively. The balance carrying value is Rs 4,596.47/‐ Lacs (Previous Year Rs. 313.90/‐ Lacs)4 Patent and Trademark costs have remaining useful life of 10 years and balance carrying value of Rs. 1,737.44/‐ Lacs.(Previous Year Rs. Nil)5 During the year, the company has written off the Tools & Dies capitalised in the earlier years. As a result of the same Tools & Dies amounting to Rs 4,085/‐ Lacs (Gross Block) and Accumulated Depreciation of Rs 2,359.51/‐ Lacs has been written off and loss of Rs 1,726.10/‐ Lacs has been accounted for in the books (Refer Note No. 25)


DEPRECIATION

On Deduction / sale

Accumulated

Depreciation as on

31.03.2014

for the Year

Net Block

As At 31.03.2014 As At 31.03.2013

Foreign Exchange Difference on

Consolidation

As at 31.03.2013 As at 31.03.2014

103

Opening Balance

01.04.2013

Sr.

No.Particulars

GROSS BLOCK

Opening as on

01.04.2013

Additions during the

year Deduction

Closing as on

31.03.2014


Auditors Report

Balance Sheet


Cash Flow Statement

Notes



Non Current Investments (At cost unless stated otherwise)

Non Trade

Quoted InvestmentsIn Mutual Funds

4.00 4.00

Unquoted Investments The Saraswat Co‐operative Bank Limited 0.75 0.75 2500 ( March 2013: 250 )Equity Shares of Rs. 10/‐ each fully paid ‐ upThe Thane Janata Sahkari Bank

5.00 5.00 2.29 2.29

New India Co‐operative Bank 5.00 5.00 (8,499 Shares of Face Value of Rs.10 Each)Total 17.04 17.04

Aggregate value of quoted investments 4.00 4.00 Aggregate value of unquoted investments 13.04 13.04

Long Term Loans & Advances(Unsecured)

Capital Advances 4,055.80 4,620.60 Security Deposit 397.69 434.11 Loans And Advances to Related Parties (Refer Note. No. 38(I)) 477.12 60.56 Other Loans And Advances (Refer Note. No. 38(II)) 5,854.76 4,319.85

Total 10,785.37 9,435.12

Other Bank Balances (Refer Note No. 18 & 42) 576.25 234.60 MAT Credit Entitlement 9.70 4,760.44

Total 585.95 4,995.04

Inventories [valued at lower of cost and net realizable value]*

Raw Materials & Components 1,938.36 5,760.73 Stores, Spares, Consumable etc. 275.62 419.70 Work in Progress 2,808.33 8,063.80 Semi Finished & Finished goods 9,456.98 18,798.71 Scrap 66.05 70.65

Total 14,545.34 33,113.59

Trade Receivables (Unsecured) (Refer Note No. 44)

‐ Outstanding for a period exceeding six monthsConsidered Good 8,320.68 13,813.14 Considered Doubtful 6,290.64 453.79

‐ Others Considered Good 6,484.66 16,884.50 Considered Doubtful 460.52 ‐

21,556.50 31,151.43

Less ‐ Provision for doubtful debts 6,772.16 453.79

Total 14,784.34 30,697.64

22,905 equity shares ( March 2013: 22,905 ) of Rs. 10/‐ each of The Thane Janta Sahakari

14 March 31, 2014 March 31, 2013

15 Other Non Current Assets March 31, 2014 March 31, 2013

13 March 31, 2014 March 31, 2013

40,000 Units (March 2013: 40,000 Units) UTI‐India Lifestyle Fund ‐ Growth Plan

50,000 equity shares ( March 2013: 50,000 ) of Rs. 10/‐ each of Thane Janta Sahkari Bank


16 March 31, 2014 March 31, 2013

17 March 31, 2014 March 31, 2013


Auditors Report

Balance Sheet


Cash Flow Statement

Notes



Cash and Cash EquivalentBalances with Bank

‐ Current Accounts INR 2,139.79 1,989.00 ‐ Unclaimed dividend 0.28 0.32

Cash on Hand 25.48 40.06 Foreign Currency on Hand 3.68 1.56

2,169.23 2,030.94 Other Bank Balances

‐ Margin money deposits with maturity more than 3 months and less than 12 month 1,312.89 999.03 ‐ Margin money deposits with maturity more than 12 months 576.25 234.60

1,889.14 1,233.63 Amount disclosed under Other non current assets (Refer Note No. 14) 576.25 234.60

Total 3,482.12 3,029.97

Short Term Loans and Advances(Unsecured)

Loans & Advances from Related Party ‐ ‐ Others (Refer Note. No. 39) ‐ ‐ Considered Good 3,595.85 8,116.79 Considered Doubtful 1,514.82 ‐

5,110.67 8,116.79 Provision for Doubtful Advances 1,514.82 ‐

Total 3,595.85 8,116.79

Other Current Assets(Unsecured )

Export benefits receivable 696.99 991.19 Industrial Promotion Subsidy receivable 2,744.99 3,772.94 Considered Good 1,516.32 8,102.67 Considered Doubtful 9,521.78 ‐

11,038.10 8,102.67 Provision for doubtful Receivables 9,521.78 ‐

Total 4,958.30 12,866.80

Sale of Products‐ Sale of Manufactured Goods 47,225.71 85,431.54 ‐ Sale of Traded Goods 10,091.80 ‐

57,317.51 85,431.54

Other Operating Revenue‐ Sale of Services 78.08 49.84 ‐ Sale of scrap 1,458.31 2,191.59 ‐ Export Benefits 367.30 489.11 ‐ Others 0.14 ‐

Revenue From Operations (Gross) 59,221.34 88,162.08 Less: Excise Duty 3,375.92 5,300.09

Total 55,845.42 82,861.99

21 Revenue From OperationsFor the Year ended on

March 31, 2014

For the Year ended on

March 31, 2013


19 March 31, 2014 March 31, 2013

20 March 31, 2014 March 31, 2013

18 Cash and Bank Balances (Refer Note No. 42) March 31, 2014 March 31, 2013


Auditors Report

Balance Sheet


Cash Flow Statement

Notes



Discount Received 15.05 60.24 Sundry balances written back (Refer Note No. 44) 9,702.26 257.07 Provision for doubtful debts written back 453.79 ‐ Miscellaneous income 869.66 223.26 Interest income 365.94 2,562.06 Exchange Fluctuation (Gain) ‐ 79.21 Gratuity 28.65 ‐ Profit on sale of assets 275.72 4.76 Royalty ‐ ‐ Benefit on Sales Tax Deferral prepayments ‐ 1,109.07

Total 11,711.07 4,295.67

Cost of Raw Materials and Components Consumed(Refer Note No. 43)

Inventory at the beginning of the year 5,831.38 5,837.02 Add: Purchases 43,081.34 54,385.19 Less: Inventory at the end of the year 1,938.36 5,831.38 Cost of Raw Material consumed 46,974.36 54,390.83

Purchase of Traded Goods 218.87 ‐

(Increase)/decrease in inventoriesInventories at the end of the yearWork‐in‐progress 2,808.33 8,063.80 Semi finished and finished goods 9,556.47 18,798.71 Less: Inventories at the beginning of the yearWork‐in‐progress 8,063.80 5,455.03 Semi finished and finished goods 18,798.71 12,657.07 Net (Increase)/Decrease in InventoriesWork‐in‐progress 5,255.47 (2,608.77) Semi finished and finished goods 9,242.24 (6,141.70)

Salaries, Wages & Bonus 4,720.19 4,224.70 Contribution to Provident and Other Funds 254.80 178.74 Staff Welfare Expenses 420.34 558.87 Director's Remuneration 15.23 ‐ Gratuity Expense (Refer Note No. 33(I) ) 56.28 208.44 Leave Encashment Expense 16.42 ‐

Total 5,483.26 5,170.75

24 Employee Benefit ExpensesFor the Year ended on

March 31, 2014


March 31, 2013


22 Other IncomeFor the Year ended on

March 31, 2014


March 31, 2013

23For the Year ended on

March 31, 2014


March 31, 2013


Auditors Report

Balance Sheet


Cash Flow Statement

Notes



Consumption of Stores, Spares & Consumables 736.92 947.80 Power & Fuel 834.08 1,319.78 Rent (Refer Note No. 31) 293.68 309.33 Labour Charges 1,738.01 2,126.83 Repairs & Maintenance‐ Plant & Machinery 147.76 264.98 ‐ Building 23.36 102.52 ‐ Other Assets 101.21 130.80 Insurance 191.69 242.85 Rates & Taxes 218.64 ‐ Other Manufacturing Expenses 509.84 742.81 Freight & Packing 1,225.91 1,566.11 Printing and Stationery 55.98 145.25 Telephone Expenses 62.10 68.92 Water Charges ‐ 4.08 Travelling & Conveyance 578.58 734.37 Loss on sale / write‐off of Fixed Assets 1,741.61 14.91 Provision for Doubtful Debts* 17,808.76 56.77 Bad debts 4,237.28 58.10 Sundry Balances Written off 174.82 ‐ Auditors Remuneration ‐ For Audit Services 21.50 20.68 ‐ Tax Audit Fees 1.06 ‐ ‐ Other Services 11.56 12.75 ‐ Reimbursement of Out‐of‐ Pocket Expenses 1.21 0.75 Legal, Professional & Consultancy fees 999.85 780.44 Other Selling & Distribution Expenses 600.00 555.81 Foreign Exchange loss/(gain) 1,806.28 ‐ Office & Other Expenses 739.54 770.30

Total 34,861.23 10,976.94

*

Interest on Loans 11,659.23 10,660.62

Other Borrowing CostBank Charges 332.60 725.69 Processing Fees 347.66 ‐

Total 12,339.49 11,386.31


25 Manufacturing and Other ExpensesFor the Year ended on

March 31, 2014


March 31, 2013

The provision for doubtful debts relates to provision taken against doubtful trade

receivables Rs 6,772.16/‐ Lacs, Other Current Assets Rs 9,521.78/‐ lacs and Short Term

Loans & Advances Rs 1,514.82/‐ lacs .

26 Finance CostFor the Year ended on

March 31, 2014


March 31, 2013


Notes to Consolidated Financial Statement


27 Related party transactions

I Key management personnel and their relatives (KMP)

Mr. Chandu L. Chavan Chairman & Managing Director

Mr. Ravindra W. Katre Whole Time Director

Mr. Sanjay H. Waghulade Whole Time Director of Innoventive Industries Limited (upto September 2013)

Director of Seven Star Electrodes Pvt. Ltd.

Director of Arihant Auto Components Pvt. Ltd.

Mr. K V Ramarathnam Whole Time Director (Upto August 2013)

Mr. Sanjay T. Bhade Promoter Group of Innoventive Industries Limited (upto October 31, 2013)

Director of Arihant Steel & Metal Wires Pvt. Ltd.


Director of Innovative Technomics Pvt. Ltd.

Mr. Parag M. Mulye Promoter Group for Innoventive Industries Limited

Director of Innoventive America Inc.

Mr. Shivaji R Katke Promoter Group for Innoventive Industries Limited (Upto October 31, 2013)

Director of Arihant Steel & Metal Wires Pvt. Ltd.


G Balasubramaniun Managing Director of Sankalp Engineering & Services Pvt. Ltd..

Vasant Illawe Executive Chairman of Sankalp Engineering & Services Pvt. Ltd..

Bhaskar Gawade Whole time Director of Sankalp Engineering & Services Pvt. Ltd..

Mr. Jitendra Palande Managing Director of Innovative Technomics Pvt. Ltd..

Shyamsunder Agarwal Managing Director of Saicon Steels Pvt. Ltd.

Ronald Herman President Salem Steel NA, LLC

Mr. Rajendra Gaikwad Additional Director of Innovative Technomics Pvt. Ltd..

Mr. Prabhakar Salunke Additional Director of Innovative Technomics Pvt. Ltd..

Mr. Ramprasad Joshi Director of Saicon Steels from 1 October , 2013

Mr. Kishor Deshpande Director of Saicon Steels from 1 October , 2013

Mr. Ramprasad Joshi Director of Arihant Auto Components Pvt. Ltd.

Relatives of Key management personnel (Relative of KMP)

Dr. Shubhangi Jadhav

Mrs. Mrunal Katre

Mrs. Vishakha Bhade

Mrs. Kavita Dhupkar

Mrs. Smita Katke

Name of the Enterprise

Yashoday Engineers Private Limited (Upto September 2013)

Keytool Engineering Solutions Private Limited (Upto September 2013)

Opal Luxury Time Products Limited

Phoenix Erectors Private Limited

Gargi Bio Tek Private Limited

Membrane Filters (India) Private Limited (Upto October 2013)

Aim Filtertech Private Limited (Upto February 2014)

M/s. Saptashrungi Engineering Works

Sourcegenie Insurance Broking Private Limited

Source Genie Consulting Private Limited

Swayamsiddha Mahila Utkarsh Foundation

Innoventive Venture Limited

Highbrow Investments Private Limited

M/s Saptashrungi Engineering Works

New Tradelink Impex Pvt Ltd

Gunjan Steel Corporation

Dehu Engineering (India) Private Limited

Sumit Facilities Pvt Ltd

Superb Unishoe Pvt Ltd

Unique Delta force Security Pvt Ltd

Sumit Infotech Pvt Ltd

Delta4 Facility Pvt Ltd

Unique Delta force E Security Pvt Ltd

Sumeet Laserfabtech Pvt Ltd

Eagle Industrial Services Pvt Ltd

Unique Delta Technologies Private Limited

Konzept Energy Engineering Private Limited

Mastermind Engineering Private Limited

Enterprise over which the key management personnel or their relatives exercise control/significant influence (Other related concerns)

108





Particulars Relationship 31 March 2014 31 March 2013

Sale of Goods

Opal Luxury Time Products Limited Other related concern 41.66 ‐

New Tradelink Impex Private limited Other related concern 154.98 375.79

Swayamsiddha Mahila Utkarsh Foundation Other related concern 97.06 ‐

Total 293.70 375.79

Purchase of Raw Material

New Tradelink Impex Private limited Subsidiary 187.42 364.54

Opal Luxury Time Products Limited Subsidiary 2.81 0.28

Others Other related concern 0.82 ‐

Konzept Energy Engineering Private Limited Other related concern 1.42 ‐

Mastermind Engineering Private Limited Other related concern 3.31 ‐

Total 195.78 364.82

Purchase of Services

Gunjan Steel Corporation Other related concern 10.69 27.58

Swayamsidha Mahila Utkarsh Foundation Other related concern 10.45 1.19

Parag Mulye KMP ‐ 22.80

Dehu Engineering (India) Private Limited Other related concern 1.24 ‐

Total 22.38 51.57

Loans And Advances Given

Membrane Filters (India) Pvt Ltd Other Related

Concern 350.00 ‐

Yashoday Engineers Pvt. Ltd. Other Related

Concern 182.31 ‐

Gargi Bio Tek Pvt Ltd Other Related

Concern 89.56 ‐

Phoenix Erectors Private Limited Other Related

Concern 46.14 ‐

Mr. Sanjay Bhade KMP 0.41 ‐

Mr Jitendra Palande KMP 25.50 ‐

Total 693.92 ‐

Loans Received From Key Management Personnel

Mr. Chandu Chavan KMP 24.98 ‐

Total 24.98 ‐

Managerial Remuneration

Mr. Chandu Chavan KMP 20.00 30.00

Mr. Ravindra Katre KMP 65.00 68.50

Mr. Sanjay Waghulade KMP 8.30 22.80

Mr. K V Ramarathnam KMP 35.10 65.86

Mr. Sanjay Bhade KMP 28.93 59.05

Mr. Shivaji Katke KMP 10.00 15.40

Mr. Vasant G. Ilawe KMP 30.00 32.00

Mr. G Balasubramanian KMP 36.00 32.00

Mr. Bhaskar K. Gawade KMP 30.00 32.00

Mr. Shyam Agarwal KMP ‐ 15.00

Total 263.33 372.61

Transactions and balances with related parties have been set out below:

109





Dividend Paid

Mr. Chandu Chavan KMP ‐ 394.70

Mr. Ravindra Katre KMP ‐ 63.08

Mr. Sanjay Waghulade KMP ‐ 93.92

Mr. Sanjay Bhade KMP ‐ 36.91

Mr. Shivaji Katke KMP ‐ 29.92

Mr. Parag Mulye KMP ‐ 36.91

Dr. Shubhangi Jadhav Relative of KMP ‐ 80.97

Mrs. Mrunal Katre Relative of KMP ‐ 51.46

Mrs. Vishakha Bhade Relative of KMP ‐ 3.75

Mrs. Kavita Dhupkar Relative of KMP ‐ 3.75

Mrs. Smita Katke Relative of KMP ‐ 2.85

Total ‐ 798.22

Outstanding

‐ Receivables

Source Genie Consulting Private Limited Other related concern 23.93 ‐

Yashoday Engineers Pvt. Ltd. Other related concern 626.12 443.81

Opal Luxury Time Products Pvt. Ltd. Other related concern 196.66 338.10

Membrane Filters (India) Pvt Ltd Other related concern 354.18 35.00

Aim Filtertech Pvt Ltd Other related concern 12.12 12.11

M/s. Saptashrungi Engineering Works Other related concern 26.19 26.19

Swayamsiddha Mahila Utkarsh Foundation Other related concern 99.01 ‐

Gargi Bio Tek Pvt Ltd Other related concern 89.46 ‐

Labatt Power Equipments Other related concern 259.00 ‐

Phoenix Erectors Private Limited Other related concern 46.14 ‐

New Tradelink Impex Pvt Ltd Other related concern 123.53 ‐

Gunjan Steel Corporation Other related concern 23.89 ‐

Others ‐ 13.50

Total 1,880.23 868.71

‐ Payables

Swayamsiddha Mahila Utkarsh Foundation Other related concern ‐ 0.45

Gargi Bio Tek Pvt Ltd Other related concern ‐ 0.10

Sourcegenie Insurance Broking Pvt Ltd Other related concern 3.62 36.24

Seven Star Electrodes Private Limited Subsidiary ‐

Aim Filtertech Private Limited Other related concern ‐ ‐

Mr. Chandu Chavan KMP 24.98 ‐

Mr. Parag Mulye KMP 3.74

Total 32.34 36.79

110




Auditor's Report

Balance Sheet


Cash Flow Statements

Notes



28 Capital commitments and contingent liabilities and secured loans


Capital commitments

1,677.46 789.58

416.04 501.54

366.70 366.70

83.30 504.84

‐ 1,233.68

Insurance backed factoring 146.98 455.82

29 Segment reporting

I Primary Segment

Description MV Parts Tubes and

Products OCTG HR & CR COIL Others Total

Total Revenue CY 18,548.35 11,016.79 5,753.40 1,949.91 18,576.97 55,845.42

(Including Export benefits) PY 17,412.51 39,967.74 11,216.02 5,734.70 8,531.02 82,861.99

Segment Result CY (7,143.38) (6,064.24) (2,642.01) (2,999.61) (9,625.34) (28,474.81)

PY 3,396.03 10,578.11 2,260.43 1,025.76 (356.51) 16,903.82

Unallocable Expenses (Net of Income) CY 10,509.78

PY (4,180.80)

Interest CY 12,339.49

PY 11,386.31

Profit / (Loss) Before Taxes CY (51,324.08)

PY 9,698.31

Tax (Including tax for earlier years) CY (942.24)

PY 2,653.56

Profit / (Loss) After Taxes before Minority Interest CY (50,381.84)

PY 7,044.75

Segment Assets CY 12,000.89 68,125.10 12,380.20 5,366.24 17,022.99 1,14,895.42

PY 15,550.73 71,345.02 15,796.17 8,064.12 12,601.60 1,23,357.64

Unallocable Assets CY 19,113.27

PY 53,279.82

Segment Liabilities CY 966.98 726.24 12,380.20 5,366.24 10,227.93 29,667.59

PY 5,235.38 1,851.83 815.12 1,944.67 26,749.73 36,596.73

Unallocable Liabilities CY 1,04,341.10

PY 1,40,040.73

Capital Expenditure CY 1,983.50 9,944.39 271.01 92.58 668.30 12,959.76

PY 240.55 8,984.03 1,714.64 849.75 972.06 13,443.04

Depreciation CY 469.17 3,018.26 502.56 203.72 311.94 4,505.65

PY 545.28 2,928.24 426.70 148.48 236.29 4,284.99

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances).

Contingent liabilities

Claims against Company not acknowledged as debts

Sales Tax Cases

Income Tax Cases

2,290.01 2,198.19

Based on the guiding principles given in the Accounting Standard – 17 “Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company’s primary segments are Motor Vehicle Parts, Tubes &

Others.

111


Unfulfilled Export Obligations under Advance Authorization. Duty liability on non‐fulfilment of above obligation is Rs. Nil Lacs (Rs. 175.26/‐ Lacs)

Unfulfilled Export Obligations under EPCG scheme to be fulfilled over 8 years. Duty liability on non‐fulfilment of above obligation is Rs. 1,492.30/‐ Lacs

(Rs. 1,012.53/‐ Lacs)



Auditor's Report

Balance Sheet



Notes



II Secondary Segment

Particulars In India Outside India Total

40,288.46 15,556.96 55,845.42

58,944.06 22,565.72 82,861.99

Segment Asset 1,08,428.25 6,467.17 1,14,895.42

93,165.39 10,691.56 1,23,357.64

Capital Expenditure 12,737.62 222.14 12,959.76

8,644.14 ‐ 13,443.04

1 Figures below the respective amounts pertains to previous year.

2

30 Unhedged foreign Currency Balances

Category Currency 31 March 2014 31 March 2013

EURO 225.75 41.80

GBP 31.20 28.21

USD ‐ 6,008.49

Other Receivables EURO 7.31 ‐

USD 85.33 188.14

GBP 0.10 ‐

EURO 46.41 10.67

USD ‐ 80.88

Other Payable EURO 8.44 ‐

RMB 1.20 ‐

JPY 0.03 ‐

USD 180.16 2,628.11

USD–PS/ Export

Finance* 161.44 601.38

USD – PS/PCFC 2,345.88 3,312.96

GBP – WCDL ‐ 905.53

USD – WCDL ‐ 1,871.43

USD 11,556.45 15,820.09

USD ‐ 108.77

31 Leases


Lease payments debited to the Statement of Profit and loss 200.48 160.62

Future minimum lease payments in respect of leases

‐ amount due within one year from the Balance sheet date 153.90 161.00

‐ amount due in the period between one year and five years 298.71 447.23

‐ amount due after five years ‐ ‐

32 Earning Per Share


5,96,43,999 5,96,43,999

Add: effect of dilutive issue of shares / options ‐ ‐

5,96,43,999 5,96,43,999

Computation of basic and diluted earnings per share

Net profit after tax attributable to equity shareholders (Rs. In Lacs) (48,042.39) 6,354.97

Basic earning per equity share Rs. (80.55) Rs. 10.65

Diluted earning per equity share Rs. (80.55) Rs. 10.65

Face value per share Rs. 10 Rs. 10

The details of foreign currency balances which are not hedged as at the balance sheet date are as below:

Segmental Revenues (Including Export benefits)

Revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to

segments on a reasonable basis, have been included under “Unallocated Expenses.” Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been

included under “Unallocated Assets/Liabilities.”

The company has Outstanding forward contract as of March 31st, 2014 USD Nil (March 31st, 2013 USD 10,00,000)

Trade Receivables

Trade Payables

Capital Advance

Short Term Borrowings from Banks

Long Term Borrowings from Banks

Bank Balances

112


Lease payments debited to the statement of profit and loss and the future minimum lease payments for non cencellable operating lease arrangements are summarised below:

Reconciliation of basic and diluted shares used in computing earnings per share

Number of shares considered as basic weighted average shares outstanding for computing basic earnings per share

Number of shares considered as weighted average shares and potential shares outstanding for computing diluted earnings per share

The company has identified geographical segment as secondary segment. Based on risk and rewards, the segments are as follows‐



Auditor's Report

Balance Sheet



Notes



33 Employee benefits

I Defined contribution Plan (Gratuity)

a. Reconciliation of opening and closing balance of obligation

The following table sets out the status of the Gratuity Plan as required under AS 15 (Revised):


Liability at the beginning of the Period 202.54 86.68

Interest Cost 16.20 7.37

Current Service Cost 49.16 25.53

Benefits Paid (38.82) (16.80)

Actuarial (Gain)/Loss on obligation (28.56) 99.76

Liability at the end of the period 200.52 202.54

b. Reconciliation of opening and closing balance of Fair Value of Plan Assets


Fair Value of Plan Assets at the beginning of the Period 185.00 108.81

Expected Return on Plan Assets 16.10 9.25

Contributions 20.07 73.31

Benefit Paid (38.82) (16.80)

Actuarial gain/(loss) on Plan Assets 1.35 10.43

Fair Value of Plan Assets at the end of the Period 183.70 185.00

Total Actuarial Gain/(Loss) To Be Recognised (29.91) 89.33

c. Expenses Recognised in Profit and Loss Account


Current Service Cost 49.16 25.53

Interest Cost 16.20 7.37

Expected Return on Plan Assets (16.10) (9.25)

Net Actuarial (Gain)/Loss To Be Recognised (29.91) 89.33

Expense Recognised in Profit & Loss account 19.35 112.98

d. Amount Recognised in the Balance Sheet


Fair value of plan assets at the end of the period 183.70 185.00

(Present value of benefit obligation as at the end of the period) (200.52) (202.54)

Funded status (16.82) (17.54)

Unrecognized past service cost at the end of the period ‐ ‐

Unrecognized transitional liability at the end of the period ‐ ‐

Net (liability)/asset recognized in the balance sheet (16.82) (17.54)

e. Balance Sheet Reconciliation


Opening net liability 17.54 (22.13)

Expense as above 19.35 112.98

Employers Contribution paid 20.07 73.31

Closing net Liability/ (Asset) 16.82 17.54

f. Actual Return on Plan Assets


Expected Return on Plan Assets 16.10 9.25

Actuarial gain/(loss) on Plan Assets 1.35 10.43

Actual Return on Plan Assets 17.45 19.68


113



Auditor's Report

Balance Sheet



Notes



g. Principal Actuarial Assumptions for Defined Benefit Plans


Discount Rate 9.31% 8.00%

Rate of Return on Plan Assets 9.31% 8.70%

Salary Escalation 6.00% 5.00%

h. Composition of plan assets


( % )

31 March 2013

( % )

Insured Managed Funds 100% 100%

i. Experience Adjustment

Particulars 31 March 2014 31 March 2013 31 March 2012 31 March 2011

On Plan Liability (Gain) / Losses (15.43) 74.95 86.68 67.53

On Plan Assets Gain / (Losses) 1.35 10.43 (4.12) 92.42

Notes:

II Defined contribution


Employers contributions to Provident fund 142.06 175.37

Employers Contribution to ESIC 66.50 3.37

Others 46.24 0.00

114


Gratuity is provided for on the basis of Acturial Valuation only in case of Innoventive Industries Limited. The other subsidiaries have provided for gratuity as well as leave encashment on an actual basis and have not

conducted an acturial valuation. Hence the same has not been included in the above note.

The expense so recognised in the Statement of Profit & Loss on an actual basis is Rs. 36.93/‐ Lakhs (March 31, 2013 Rs.82.83/‐ Lakhs) for Gratuity and Rs. 16.42/‐ Lakhs (March 31, 2013 Rs. 12.61/‐ Lakhs) for Leave

Encashment.

Expected rate of return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors on long term basis.

Expected contribution during next 12 months Rs. 52.94/‐ Lacs (Previous Year Rs 41.05/‐ Lacs)

No gratuity is provided for in case of Seven Star Electrodes Pvt Ltd., Arihant Steel and Metal Wires Pvt. Ltd., Arihant Autocomponenets Pvt. Ltd., Innoventive Industries UK Ltd. and Innoventive Americas Inc. as the same is

not applicable as per AS 15



Auditor's Report

Balance Sheet



Notes



34 Borrowings

I Details of repayment of loans & charges created on assets for borrowing‐

Allahabad Bank 07/05/2012 6m LIBOR + 500 bps 60 Monthly

Axis Bank Ltd 30/09/2011 6m LIBOR + 250 bps 60 Monthly

State Bank of Bikaner & Jaipur 11/04/2012 6m LIBOR + 400 bps 10 Quarterly

State Bank of India 02/05/2012 6m LIBOR + 525 bps 30 Monthly

Central Bank of India 13/04/2012 6m LIBOR + 500 bps 16 Quarterly

Export Import Bank of India 01/03/2012 Exim LTMR + 300bps 24 Quarterly

Bank Of India 31/03/2012 OBR+300 bps 16 Quarterly

UCO Bank 26/06/2010 base+375 bps 20 Quarterly

Bank of India (London) 13/03/2013 6M LIBOR + 460 bps 28 Quarterly

BANK OF BARODA ‐(Singapore) 01/05/2012 6M LIBOR + 475 bps 24 Quarterly

ICICI Bank Ltd (Bahrain) 18/12/2012 6M LIBOR + 500 bps 30 Quarterly

Ratnakar Bank 31/07/2013 base + 200 bps 36 Monthly

TD Bank, USA 01/01/2014 LIBOR + 50 bps 48 Monthly

Inventories &

receivables of

Salem Steel NA,

LLC

Canara Bank 27/09/2011 base+475 bps 60 Monthly

State Bank of India 10/01/2015 base + 520 bps 72 Monthly

Ratnakar Bank 30/04/2014

Base Rate + 2% p.a.

(current base rate

11% pa) 48 Monthly

Land & Building,

Stock of

Innovative

Technomics

Private Limited

Ratnakar Bank 30/09/2014

Base Rate + 2% p.a.

(current base rate

11% pa) 45 Monthly

Land & Building,

Stock of

Innovative

Technomics

Private Limited

ICICI Bank Ltd 02/04/2013 10.14% 36 Monthly









ICICI Bank 04/03/2013 10.41% 36 Monthly

115


Name of Bank / Financial InstitutionDate of first

instalmentRate of Interest

Repayment

ScheduleSecurity

1st Pari passu

charge on all

Fixed Assets of

the Company and

2nd Pari passu

charge on

Current Assets of

the Company.

1st Pari passu

charge on all

Fixed Assets of

Sankalp

Engineering &

services Pvt. Ltd.

and Pari passu

charge on EM RM

Land at GAT No.

1018 village

Karandi, taluka

Shirur, AM/RM

of residential

Bangalow owned

by Mr. V.G.Illawe

& Mrs. Smita

Illawe at Nigdi

Pradikaran &

Personal

Guarantee of Mr.

V.G. Illawe, Mr.

B.K. Gawade, G.

Balasubramanian,

Mrs. Smita Illawe

& Sankalp

Industries

Hypothecation of

car



Auditor's Report

Balance Sheet



Notes



Canara Bank 28/08/2009 14.50% 65 Months

Canara Bank 27/09/2010 12.75% 20 Quarterly

Dhanlakshmi Bank Ltd. 01/04/2013 20.00% 36 Monthly Unsecured

Eletronica Finance Ltd. 15/04/2012 13.93% 48 Monthly





Religare Finserve Ltd. 04/09/2012 19.02% 24 monthly

Magma Fincorp Pvt. Ltd. 07/04/2012 19.00% 33 Monthly

Bajaj Finserve Ltd. 05/05/2013 18.99% 36 Monthly

Intec Capital 01/01/2013 14.05% 60 Monthly

Charge on

machine of model

Hyundai Wia CNC

Turning Lathe

L280 & L210A


Charge on

machine of model

Hwacheon


Charge on

machine of model

Tussor

Bajaj Finance Ltd. 01/05/2012 12.50% 24 monthly Unsecured

Tata Capital Ltd 01/01/2013 13.99% 48 monthly Unsecured

S E Investments 11/02/2012 9.75% 44 monthly Unsecured

First Leasing Company of India Ltd. 25/10/2012 14.11% 48 Monthly

First Leasing Company of India Ltd. 04/01/2012 48 Monthly



II Details of repayment of long term secured & unsecured borrowings are as follows‐


Within one year 13,438.94 7,932.94

Two to five years 19,216.41 20,893.82

More than five years 3,373.03 1,934.71

Total 36,028.38 30,761.47

Name of Bank / Financial InstitutionDate of first

instalmentRate of Interest

Repayment

ScheduleSecurity

116


Charge on

specific Plant &

Machinery

Rate ranging

between 11% to

16%

Personal

Guarantee of Mr.

G

Balasubramanian,

Mr. B. K. Gawade

and Mr. V. G.

Illawe

Hypothecation of

all fixed assets of

Saicon Steels

Private Limited &

personal

guarantee of

director Mr.

Shyam Agarwal

Charge on

specific Plant &

Machinery



Auditor's Report

Balance Sheet



Notes



III Details of default on account of repayment of loans and interest theron are as follows:

Particulars Period of Default 31 March 2014 31 March 2013

Long term borrowings

Secured

Allahabad Bank 8 Months 359.72 Nil

Axis Bank 8 Months 200.00 Nil


State Bank of India 8 Months 1,200.00 Nil

Central Bank of India 8 Months 645.00 Nil

Export Import Bank of India 8 Months 289.20 Nil

Bank Of India 8 Months 266.67 Nil

UCO Bank 8 Months 150.67 Nil

Bank of India (London) 8 Months 144.81 Nil

Bank Of Baroda‐(Singapore) 8 Months 8.76 Nil

ICICI Bank Ltd (Bahrain) 8 Months 124.13 Nil

Ratnakar Bank 8 Months 416.67 Nil

Canara Bank 3 Quarters 77.16 Nil

Canara Bank 8 Months 53.54 Nil

Unsecured

Bajaj Finance 8 Months 411.11 Nil

Short term borrowings

Indian Overseas Banks 8 Months 293.75 Nil


Saraswat Bank 8 Months 384.48 Nil

Total 5,789.64 Nil

IV Interest Range and Security on Cash Credit Accounts

Interest Range

Innoventive Industries Limited 11% ‐ 13%

Sankalp Forgings Private Limited 13% ‐ 14%

Saicon Steels Private Limited

BR+4%

(14.75%PA)

Innovative Technomics Pvt Ltd 13.00%

Innoventive Americas, Inc, State of Delaware USA LIBOR + 2.5%

Security

First pari passu charge by way of hypothecation on all

current assets, both present & future and second pari

passu charge by way of hypothecation on all fixed assets,

both present & future.

117


First Pari Passu charge on entire current assets of the

company and Second Pari Passu charge on EM RM land at

Gat No 1018 , Village Karandi, Taluka Shirur, EM/RM of

Residential Bungalow Owned by Mr. V G Illawe, co‐owned

by Mrs. Smita Illawe at Nigdi Pradhikaran and Personal

Guarantee of Mr. V. G. Illave, Mr,. B. K. Gawade, Mr G

Balasubramanian, Managing Director, Mrs Smita Illawe

and Sankalp Industries.


company and Second Pari Passu charge on EM Plot GM

No 725 & 727, Behind Reliance Plant, Velu, Tal. Bhor, Dist ‐

Pune, and Plot No 114/2, B‐G Block, Pimpri Industrial

Area, MIDC Bhosari, Tal. Haveli, Dist. Pune and Personal

Guarantee of Mr Chandu Chavan

The Loan is taken by Salem Steel NA, LLC and is

guaranteed by Innoventive Americas Inc, an 85% owner of

the Company and secured by substantially all the assets

of the Company


company and Second Pari Passu charge on EMT of

Freehold Factory Land & Building and of the Company at

375/1 & 375/2, Village Golanda Silvasa, Kilawani Road,

Dadra and Nagar Haveli, Silvasa (UT)



Auditor's Report

Balance Sheet



Notes



35 Micro, Small & Medium Enterprise Development Act, 2006

36 Foreign Exchange difference on long term foreign currency borrowings

37

38 Long Term Loans & Advances (Unsecured)

I Loans And Advances to Related Parties


Advance For Purchase of Material 378.11 60.56

Advance for CSR Activities 99.01 ‐

Total 477.12 60.56

II Other Loans And Advances


Share Application Money 870.03 570.03

Loan for Business Purposes 2,954.34 357.72

Other Advances for Business Purposes 1,666.83 2,920.81

Balance with Income Tax, VAT Authorities etc. 83.05

Others 363.36 388.24

Total 5,854.56 4,319.85

39 Short Term Loans And Advances


Advances recoverable in cash or in kind or for value to be received

Advances to Suppliers

Considered Good 1,104.26 1,616.81

Considered Doubtful 1,514.82 ‐

Others 930.44 4,237.05

3,549.52 5,853.86

Provision for Advances 1,514.82 ‐

2,034.71 5,853.86

Balance with Central Excise, Customs & VAT etc. 1,561.15 2,262.92

Total 3,595.86 8,116.78

40 Other Payables


Statutory Dues 905.95 668.19

Deposits 10.00 10.00

Advances from customers 457.60 2,805.51

Others 812.75 988.17

Total 2,186.30 4,471.87

118


Suppliers covered under Micro, Small & Medium Enterprise Development Act, 2006, have not furnished required information regarding filing of necessary memorandum with appointed authority. In view of this,

information under Section 22 of the said Act is not given.

Pursuant to notification dated 29th December, 2011 issued by Ministry of Corporate Affairs, Government of India in respect of changes to Accounting Standard 11, the company has exercised the option of capitalising

exchange differences arising on reporting of long term foreign currency loans in so far as they relate to the acquisition of depreciable capital assets. Accordingly, in the current financial year, an amount of Rs. 1,099.57/‐ lacs

(March 31, 2013 Rs. 406.17/‐ lacs) has been capitalised in Innoventive Industries Ltd.

The company has recognised deferred tax assets since the management believes that the reversal of timing difference on account of depreciation would result in sufficient future taxable income against which the said

deferred tax assets can be realised.



Auditor's Report

Balance Sheet



Notes



42 Corporate Debt Restructuring

43 Cost of Material and Components Consumed & (Increase)/Decrease in Inventories of Finished Goods and Work‐in‐progress

44

45 Prior year comparatives

Previous year figures have been regrouped/reclassified wherever necessary.

For B. K. KHARE & Co. For and on behalf of Board of Directors of

Chartered Accountants Innoventive Industries Limited

Firm Registration No. 105102W


Partner Chairman and Whole Time Director

Membership No.: 047296 Managing Director

Pune, May 29, 2014 Pune, May 29, 2014

119


During the year, the operations of the Company were adversely impacted by the downturn in Autocomponents and slowdown in demand from Power Sector due to various problems such as coal linkages, etc. Accordingly

the company has made reassessment of inventory held and made provision/write down of Rs. 13,039.55/‐ lacs in value of inventories on account of slow and non moving inventory, reassessment of net realisable value

and consumption norms.

Based on the reassessment of realisation of Debtors and Loans and Advances, the Company has made a Provision of Doubtful Debts/ Advances and Other Current Assets of Rs. 17,808.76 /‐ Lacs (Previous year Rs 56.77/‐

Lacs) and written off Bad Debts amounting to Rs. 4,237.28/‐ Lacs (Previous year Rs 60.98/‐ Lacs) have been shown in Note No. 25. Further, the credit balances which are considered as not payable by the management

amounting to Rs. 9,702.26/‐ Lacs (Previous Year Rs 286.17/‐ Lacs) and provisions no longer payable amounting to Rs. 453.79/‐ Lacs (Previous Year Nil) have been written back and shown in Note No. 22 ‐ Other Income.

The Company has filed an application with the Corporate Debt Restructuring (CDR) Cell in September, 2013 for restructuring of its debts. The application was admitted by the CDR Cell on September 26, 2013 and is in the

process of approval. Pending the approval of the application, borrowings and other balances with banks reflected in the Notes and interest thereon is recognised in the books as per the original terms of sanction and/or as

per bank statements received and is subject to adjustments which may arise on approval of CDR scheme and reconciliations of the said balances with the banks.


120

Annual Report 2013‐2014

INNOVENTIVE INDUSTRIES LIMITED

Regd. Ofice: Gat No. 56/4/5, Pimple Jagtap, Taluka: Shirur, District: Pune 412208. Shareholders attending the Meeting in person or by Proxy are requested to complete the attendance slip and hand it over at the entrance of the meeting hall.

Attendance Slip

I hereby record my presence at the 23nd ANNUAL GENERAL MEETING of the Company at registered ofice of the Company at Gat No. 56/4/5, Pimpale Jagtap, Taluka – Shirur, District – Pune 412208 at 9.30 a.m. on Wednesday, the 15th Day of July, 2015. ................................................................................................................. Full name of the Shareholder (In block capitals)

..................................................... Signature

Folio No. / DP ID No.*

................................................................................... ...................................................................................

& Client ID No.* ................................................................................... *Applicable for members holding shares in electronic form. No. of Shares:

NOTE: Shareholder/Proxy holder desiring to attend the meeting should bring his copy of the Annual Report for reference at the meeting.


121


Form No. MGT‐11

Proxy form [Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies Management and Administration) Rules,

2014]

CIN: L29309PN1991PLC063045 Name of the company: INNOVENTIVE INDUSTRIES LIMITED Registered office: Gat No. 56/4/5, Pimple Jagtap, Taluka: Shirur, Pune‐ 412208

Name of the member(s) : Registered address: E‐mail Id: Folio No/ Client Id: DP ID :

I/We, being the member (s) of …………. shares of the above named company, hereby appoint Name: …………………… Address: E‐mail Id: Signature: ……………., or failing him Name: …………………… Address: E‐mail Id: Signature: ……………., or failing him Name: …………………… Address: E‐mail Id: Signature:

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 23rd Annual general meeting of the company, to be held on Wednesday, the 15th day of July, 2015 at 9:30 a.m. at Gat No. 56/4/5, Pimple Jagtap, Taluka: Shirur, Pune‐ 412208 and at any adjournment thereof in respect of such resolutions as are indicated below:

Resolution No. Resolutions Vote (Optional)*

For Against Abstain

Ordinary Business

Adoption of Financial Statements

Reappointment of Mr. Ravindra Katre (DIN 00035125)

Appointment of Auditor

Special Business

Appointment of Ms. Pournima Gadiya (DIN 06941211) as an Independent Director

Signed this…… day of……… 2015 Signature of shareholder (s) ………………………………………. Signature of Proxy holder(s) …………………………………. NOTES: (i) This form must be returned so as to reach the Registered Office of the Company, not less than FORTY‐EIGHT HOURS before

the time for holding the aforesaid meeting. (ii) Those members who have multiple folios with different joint holders may use copies of this Attendance Slip/Proxy.

Shareholder/Proxy holder desiring to attend the meeting should bring his copy of the Annual Report for reference at the meeting.

Affix Revenue Stamp


122


Corporate Office Office No. 601 & 602, Nucleus Mall, 1 Church Road, Camp, Pune - 411001

Registered Office Gat No. 56/4/5, Pimple Jagtap, Taluka Shirur, District Pune - 412208

Documents

Innoventive Industries Limited · The Saraswat Co-op Bank Limited UCO Bank United Bank of India Bank of Maharashtra ... INNOVENTIVE I N D U S T R I E S CIN L29309PN1991PLC063045 2