SURYA ROSHNI LIMITED A,, ,S ISO 9001 A., IS ISO 1400' & IS 18D01 Company CIN -L31501HR1973PLC007543 2Nd Floor, Padma Tower-1

1�M� l��I GJ&rind11nSmt �< I L----� SURYA ROSHNI LIMITED A,, ,S ISO 9001 A., IS ISO 1400' & IS 18D01 Company CIN -L31501HR1973PLC007543 2nd Floor, Padma Tower-1. Rajendra Place, New Delht-110 008 Ph.: +91-11-25810093-96, 47108000 Fax: +91-11-25789560 E-mail : cs@surya in Website : www surya co ,n SRL/18-19/ 26 August 29, 2018

The Secretary The Manager (Listing Department) The Stock Exchange, Mumbai The National stock Exchange of India Ltd New Trading Ring, 14th Floor, Exchange Plaza, 5th floor, Plot No. C/1, Rotunda Building, P.J.Towers, G Bpock, Bandra Kurla Complex Dalal Street, Fort, Bandar (E) MUMBAI - 400 001 Mumbai - 400 051 Scrip Code : 500336 NSE Symbol : SURY AROSNI

SUBJECT : 45th ANNUAL GENERAL MEETING NOTICE

DearSir,

Pursuant to Regulation 30 read with Para A (12) of Part A of Schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 hereinafter referred to as the Listing Regulations with the Stock Exchange, please findenclosed herewith, softcopy of the 45th Annual General Meeting Notice of our company.

Kindly take the same in your records.

Thankingyou,

�...,."'"'¥·· GAL ··& COMPANY SECRETARY

Enclosed: as above.

• Regd. Office : Prakash Nagar, Bahadurgarh, Haryana - 124507, Ph : 01276-241540-41 SURYA ROSHNI LIMITED Regd. Ofﬁ ce: Prakash Nagar, Sankhol, Bahadurgarh – 124507 (Haryana) Corporate Identity Number (CIN) – L31501HR1973PLC007543 Phone: +91-1276- 241540 Fax No. +91-1276-241886 Website: www.surya.co.in, Email id: [email protected] NOTICE

Notice is hereby given that the Forty fi fth (45th) Annual present and future held prior to merger with erstwhile General Meeting of the members of SURYA ROSHNI Surya Global Steel Tubes Limited (e-SGSTL) The LIMITED will be held on Friday, the 28th September, 2018 details are as under: at 11.00 A.M., at the Registered Offi ce of the Company at (` in Lakh) Prakash Nagar, Sankhol, Bahadurgarh 124 507 (Haryana) to transact the following business: S. Existing Term Loans from Banks Sanctioned No. Amount 1 State Bank of India 6,000 ORDINARY BUSINESS 2 State Bank of India 2,500 1. To receive, consider and adopt the Audited Financial 3 State Bank of India 5,000 Statements of the Company for the fi nancial year 4 State Bank of India 3,000 ended 31 March, 2018 and the Reports of the Board 5 State Bank of India 5,000 of Directors and the Auditors thereon. 6 Export -Import Bank of India 3,000 2. To declare dividend on equity shares. 7 Export -Import Bank of India 3,000 8 Canara Bank 2,500 3. To appoint a Director in place of Shri Raju Bista Total 30,000 (Director Identifi cation No. – 01299297) who retires by rotation and, being eligible, offers himself for re- e) Existing term loan(s) of ` 5000 Lakh (Rupees fi ve appointment. thousand Lakh only) lent and advanced by State Bank of India (SBI) and DCB Bank Limited (DCB) has SPECIAL BUSINESS been sanctioned to the erstwhile Surya Global Steel Tubes Limited (e-SGSTL) which were secured by 4. To consider and, if thought fi t, to pass with or without way of charge on its entire immovable and movable modifi cation(s), the following resolution as a Special properties both present and future held prior to Resolution: merger with the Company. The details are as under: “RESOLVED THAT the consent of the Company be and is (` in Lakh) hereby accorded in terms of Section 180(1)(a) and other S. Existing Term Loans from Banks Sanctioned applicable provisions, if any, of the Companies Act, 2013 to No. Amount mortgaging and/or charging by the Board of Directors of the 1 State Bank of India 2,500 Company of all the immovable and movable properties of the 2 DCB Bank Limited 2,500 Company where so ever situated, present and future and the TOTAL 5,000 whole of the undertaking of the Company in favour of IDBI Bank Limited and / or Punjab National Bank, acting for itself f) The Working Capital Limits including CEL Limits for and as an agent of Banks / Financial Institutions to secure: forward cover of ` 195832 Lakh, secured on Second Charge basis, lent and advanced/agreed to be lent a) Term Loan of ` 2500 Lakh (Rupees Two thousand fi ve and advanced by State Bank of India, Punjab National hundred Lakh only) lent and advanced by Export – Bank, IDBI Bank Ltd., Canara Bank, HDFC Bank Import Bank of India (EXIM) to the Company. Limited, Bank of Baroda and DCB Bank Limited to the b) Term Loan of ` 6500 Lakh (Rupees Six thousand fi ve Company. The details are as under; hundred Lakh only) lent and advanced by HDFC Bank S. Consortium Banks (` in Lakh) Limited (HDFC) to the Company. No. c) Term Loan of ` 4900 Lakh (Rupees Four thousand 1 State Bank of India 79466 nine hundred Lakh only) lent and advanced by HDFC 2 Punjab National Bank 38266 3 IDBI Bank Ltd. 9300 Bank Limited (HDFC) to the Company for setting up of 4 Canara Bank 22000 3LPE coating unit at Anjar Kutch 5 HDFC Bank Limited 23100 d) Existing term loan(s) of ` 30,000 Lakh (Rupees thirty 6 Bank of Baroda 18800 thousand Lakh only) lent and advanced by State Bank 7 DCB Bank Limited 4900 of India (SBI), Export-Import Bank of India (EXIM) and Total 195832 Canara Bank has been sanctioned to the Company together with interest thereon at the respective which were secured by way of charge on Company’s agreed rates, interest tax, compound interest, entire immovable and movable properties both additional interest, liquidated damages, commitment

45TH AGM NOTICE 1 SURYA ROSHNI LIMITED

charges, premia on prepayment or on redemption, of remuneration , perquisites, benefi ts and amenities costs, charges, expenses and other monies payable payable to Shri Jai Prakash Agarwal in the light of by the Company to State Bank of India, Punjab the further progress of the Company which revision National Bank, IDBI Bank Ltd., Canara Bank, HDFC should be in conformity with any amendments to the Bank Limited, Bank of Baroda, DCB Bank Limited and relevant provisions of the Act and /or the rules and Export Import Bank of India under Loan Agreements regulations made there under and/or such guidelines entered into/to be entered into by the Company in as may be announced by the Central Government respect of the aforesaid loans. from time to time. RESOLVED FURTHER THAT the Board of Directors of RESOLVED FURTHER THAT the Board of Directors be the Company or a Committee of Directors authorized and are hereby authorised to do all such acts, deeds by the Board in this behalf be and is hereby authorised and things as may be considered necessary to give to fi nalise all agreement(s) for creating mortgage effect to the aforesaid resolution.” and/or charge as aforesaid and to do all such acts, 6. To consider and, if thought fi t, to pass with or without deeds and matter as may be necessary or expedient modifi cation(s), the following resolution as a Special for giving effect to the above resolution.” Resolution: 5. To consider and, if thought fi t, to pass with or without “RESOLVED THAT in accordance with the provisions modifi cation(s), the following resolution as a Special of Section 196, 197, 198, 200, 203 and Schedule Resolution: V and such other applicable provisions, if any, of “RESOLVED THAT in accordance with the provisions the Companies Act, 2013, (the Act) including any of Section 196,197,198,200, 203 and Schedule V statutory modifi cation or any amendment or any and such other applicable provisions, if any, of substitution or re-enactment thereof for the time the Companies Act, 2013, (the Act) including any being in force and as recommended by Nomination statutory modifi cation or any amendment or any and Remuneration Committee (NRC), approval of the substitution or re-enactment thereof for the time members of the Company be and is hereby accorded being in force and as recommended by Nomination to increase the remuneration paid to Shri Raju Bista and Remuneration Committee (NRC), approval of the having Director Identifi cation No. (DIN – 01299297) members of the Company be and is hereby accorded as the Managing Director of the Company by paying in to increase the remuneration paid to Shri Jai Prakash addition to Salary, 1% commission of the Profi t before Agarwal, Executive Chairman of the Company, having tax (PBT) of the fi nancial year derived on the basis of Director Identifi cation No. (DIN – 00041119) by Audited Financial Statements of the Company for the paying in addition to Salary, 1.5% commission of the concerned fi nancial year 2017-18 and onwards for Profi t before tax (PBT) of the fi nancial year derived the rest of his tenure, as set out in the Supplementary on the basis of Audited Financial Statements of the Agreement executed on 20th March, 2018 between Company for the concerned fi nancial year 2017-18 the Company and Shri Raju Bista, and as set out in the and onwards for the rest of his tenure, as set out in explanatory statement, with authority to the Board of the Supplementary Agreement executed on 20th Directors of the Company to alter and /or vary the March, 2018 between the Company and Shri Jai remuneration within the limits, if any, prescribed in Prakash Agarwal, and as set out in the explanatory the Act and / or any schedules thereto. statement, with authority to the Board of Directors of RESOLVED FURTHER THAT in the event of loss or the Company to alter and /or vary the remuneration inadequacy of profi ts in any fi nancial year during the within the limits, if any, prescribed in the Act and / or aforesaid period, the company will pay Shri Raju Bista any schedules thereto. remuneration, perquisites , benefi ts and amenities not RESOLVED FURTHER THAT in the event of loss or exceeding the ceiling laid down in Section II of Part II inadequacy of profi ts in any fi nancial year during of Schedule V of the Companies Act, 2013, as may be the aforesaid period, the company will pay Shri Jai decided by the Board of Directors. Prakash Agarwal remuneration, perquisites , benefi ts RESOLVED FURTHER THAT the Board of Directors and amenities not exceeding the ceiling laid down in of the Company be and are hereby authorized to Section II of Part II of Schedule V of the Companies enhance, enlarge , alter or vary the scope and quantum Act, 2013, as may be decided by the Board of Directors. of remuneration , perquisites, benefi ts and amenities RESOLVED FURTHER THAT the Board of Directors payable to Shri Raju Bista in the light of the further of the Company be and are hereby authorized to progress of the Company which revision should be enhance, enlarge , alter or vary the scope and quantum in conformity with any amendments to the relevant

2 45TH AGM NOTICE SURYA ROSHNI LIMITED

provisions of the Act and /or the rules and regulations 9. To consider and, if thought fi t, to pass with or without made there under and/or such guidelines as may be modifi cation(s), the following resolution as an announced by the Central Government from time to Ordinary Resolution: time. “RESOLVED THAT in accordance with the provisions RESOLVED FURTHER THAT the Board of Directors be of Section 152, 160, 161 and such other applicable and are hereby authorised to do all such acts, deeds and things as may be considered necessary to give provisions, if any, of the Companies Act, 2013, effect to the aforesaid resolution.” (the Act) including any statutory modifi cation or any amendment or any substitution or re- 7. To consider and, if thought fi t, to pass with or without enactment thereof for the time being in force read modifi cation(s), the following resolution as an Ordinary Resolution: with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 referred to as the “RESOLVED THAT pursuant to the provisions of Listing Regulations, approval of the members of the Section 148 and such other applicable provisions, if Company be and is hereby accorded to appoint Shri any, of the Companies Act, 2013, (the Act) and the Vinay Surya having Director Identifi cation No. (DIN) – Companies (Audit and Auditors) Rules, 2014, including any statutory modifi cation or any amendment or any 00515803 as Director of the Company liable to retire substitution or re-enactment thereof for the time by rotation.” being in force, the Cost Auditor M/s R J Goel & Co. (a 10. To consider and, if thought fi t, to pass with or without Cost Audit fi rm) appointed by the Board of directors of modifi cation(s), the following resolution as a Special the Company to conduct the audit of its cost records for the fi nancial year ending 31st March, 2019 be Resolution: paid a remuneration of ` 4,75,000 (Rupees Four Lakh “RESOLVED THAT in accordance with the provisions of seventy fi ve thousand only).” Section 196,197,198,200, 203 and Schedule V and such “RESOLVED FURTHER THAT the Board be and is other applicable provisions, if any, of the Companies Act, hereby authorized to do all such acts, deeds, matters, 2013, (the Act) including any statutory modifi cation or things and take all such steps as may be necessary any amendment or any substitution or re-enactment desirable or expedient to give effect to this resolution.” thereof for the time being in force , approval of the 8. To consider and, if thought fi t, to pass with or without members of the Company be and is hereby accorded to modifi cation(s), the following resolution as an the appointment of, including remuneration, perquisites, Ordinary Resolution: benefi ts and amenities payable to Shri Vinay Surya “RESOLVED THAT in accordance with the provisions having Director Identifi cation No. (DIN) – 00515803 as of Section 149, 150 , 152, 160, 161 and Schedule IV the Whole-time Director of the Company for a period and such other applicable provisions, if any, of the Companies Act, 2013, (the Act) and the Companies of fi ve years commencing from 18th May, 2018 to (Appointment and Qualifi cation of Directors) Rules, 17th May, 2023, as set out in the Agreement executed 2014 including any statutory modifi cation or any between the Company and Shri Vinay Surya, the main amendment or any substitution or re-enactment terms of which are set out in the explanatory statement, thereof for the time being in force read with SEBI which agreement is hereby specifi cally approved with (Listing Obligations and Disclosure Requirements) authority to the Board of Directors of the Company to Regulations, 2015 (referred to as the Listing alter and / or vary the terms and conditions of the said Regulations), approval of the members of the Company be and is hereby accorded to appoint appointment within the limits, if any, prescribed in the Sh. Sunil Sikka having Director Identifi cation No. Act and / or any schedules thereto. (DIN) – 08063385 as an Independent Director for a period of fi ve years from 28th September, 2018 to RESOLVED FURTHER THAT in the event of loss or 27th September, 2023. inadequacy of profi ts in any fi nancial year during the aforesaid period, the company will pay Shri RESOLVED FURTHER THAT Sh. Sunil Sikka meets Vinay Surya remuneration, perquisites , benefi ts and criteria of independence as required u/s 149(6) of the Companies Act, 2013 and further furnished to the Board amenities not exceeding the ceiling laid down in a declaration of his independence for being appointed section II of Part II of Schedule V of the Companies Act, as an independent Director of the Company. 2013, as may be decided by the Board of Directors. RESOLVED FURTHER THAT the Board of Directors be RESOLVED FURTHER THAT the Board of Directors and are hereby authorised to do all such acts, deeds of the Company be and are hereby authorized to and things as may be considered necessary to give enhance, enlarge , alter or vary the scope and quantum effect to the aforesaid resolution.” of remuneration , perquisites, benefi ts and amenities

45TH AGM NOTICE 3 SURYA ROSHNI LIMITED

payable to Shri Vinay Surya in the light of the further “RESOLVED THAT pursuant to the provisions of Section progress of the Company which revision should be 62(1)(b) and all other applicable provisions, if any, in conformity with any amendments to the relevant of the Companies Act, 2013 (including any statutory provisions of the Act and /or the rules and regulations modifi cation(s) or re-enactment thereof), Securities made there under and/or such guidelines as may be and Exchange Board of India (Share Based Employee announced by the Central Government from time to Benefi ts) Regulations, 2014 (“SEBI Regulations”), time. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, RESOLVED FURTHER THAT the Board of Directors be 2015 (“Listing Regulations”), the Memorandum of and are hereby authorised to do all such acts, deeds Association and Articles of Association of the Company and things as may be considered necessary to give and any other applicable and prevailing statutory effect to the aforesaid resolution.” Guidelines/ Circulars in that behalf and subject to 11. To Consider and, if thought fi t, to pass with or without such other approval(s), consent(s), permission(s), and modifi cation(s), the following resolution as a Special sanction(s) as may be necessary from the appropriate Resolution: regulatory authority(ies)/ institution(s) and such conditions and modifi cations as may be prescribed/ “RESOLVED THAT in supersession of the resolution imposed by the appropriate regulatory authority(ies)/ passed under section 180(1)(c) of the Companies Act, institution(s) while granting such approval(s), consent(s), 2013 by the members of the Company in their meeting permission(s) and/or sanction(s), the consent of the held on 5th September, 2014, in relation to the exercise members of the Company be and is hereby accorded for of borrowing power , consent of the Company be and is approval of SRL Employee Stock Option Scheme – 2018 hereby accorded, under the said provisions and Articles (“scheme”) through Trust Route and the Board to create, of the Company and all other applicable provisions, grant, offer, issue and allot under the scheme, in one if any of the Companies Act, 2013 and subject to or more tranches, a maximum of 8,00,000 (Eight Lakh) compliance with all applicable laws and regulations, options (or such other adjusted fi gure for any bonus, to the Board of Directors of the Company (hereinafter stock splits or consolidations or other reorganization referred to as “ the Board “ which term shall be deemed of the capital structure of the Company as may be to include any Committee thereof) to borrow any sum or applicable from time to time) exercisable into 8,00,000 sums of money in any manner, from time to time, with (Eight Lakh) equity shares of face value ` 10/- each or without security and upon such terms and conditions (or such other adjusted fi gure for any bonus, stock as they deem appropriate, notwithstanding that the splits or consolidations or other reorganization of the aggregate of moneys to be borrowed together with the capital structure of the Company as may be applicable moneys already borrowed by the Company (apart from from time to time) to or for the benefi t of permanent temporary loans obtained from the Company bankers employees whether working in India or outside India in the ordinary course of business) may exceed the and directors whether a whole-time director or not aggregate of the paid-up share capital of the Company (other than promoters of the Company, Independent and its free reserves, from time to time , that is to say, Directors and Directors holding directly or indirectly reserves not set apart for any specifi c purpose; Provided more than 10% of the outstanding Equity Shares of the however that the total amount up to which monies may Company) of the Company in a manner, during such be borrowed by the Board (apart from temporary loans period in one or more tranches and on such other terms obtained from the Company’s bankers in the ordinary and conditions as to be decided in accordance with the course of business) shall not exceed at any given point extant regulations or other provisions of the law as may of time the sum of ` 3000 Crore (Rupees Three thousand be prevailing at the relevant time”. Crore only).” RESOLVED THAT subject to the applicable laws, “RESOLVED FURTHER THAT for the purpose of consent of the member(s) of the Company be and is giving effect to this resolution, the Board be and is hereby accorded to the Board of Directors including hereby authorized to do all such acts, deeds, matters the Nomination and Remuneration Committee (NRC) and things as it may deem necessary desirable or to implement the Scheme through trust namely Surya expedient to give effect to this resolution.” Roshni Limited Employees Welfare Trust. 12. To Consider and, if thought fi t, to pass with or without RESOLVED FURTHER THAT in compliance with section modifi cation(s), the following resolution as a Special 62 (1)(b) and applicable provisions of the Companies Resolution: Act, 2013 and other applicable laws including but not

4 45TH AGM NOTICE SURYA ROSHNI LIMITED

limited to Indian Trust Act, 1882, the Board including may, in its absolute discretion deem necessary including any committee thereof be is hereby authorized to allot but not limited to appoint Advisors, Merchant Bankers, the fresh Equity Shares upto 8,00,000 (Eight Lakh) of Consultants or Representatives, being incidental for ` 10/- each of the company (or such other adjusted the effective implementation and administration of the fi gure for any bonus, stock splits or consolidations Scheme and to make applications to the appropriate or other reorganization of the capital structure of the Authorities, for their requisite approvals and take all Company as may be applicable for time to time), to necessary actions and to settle all such questions, “Surya Roshni Limited Employees Welfare Trust” for diffi culties or doubts whatsoever that may arise while the purpose of implementation of the scheme which implementing this resolution.” will subsequently be transferred to the Employees as 13. To Consider and, if thought fi t, to pass with or without and when options are exercised. modifi cation(s), the following resolution as a Special RESOLVED FURTHER THAT the new Equity Shares to Resolution: be issued and allotted by the Company in the manner “RESOLVED THAT pursuant to the applicable aforesaid shall rank pari passu in all respects with the provisions, of the Companies Act, 2013 read with then existing Equity Shares of the Company. Rules framed there under (including any statutory RESOLVED FURTHER THAT the Company shall modifi cation(s) or re-enactment(s) thereof for the conform to the applicable Accounting Policies, time being in force), the Memorandum of Association Guidelines or Accounting Standards as may be and Articles of Association, Securities and Exchange applicable from time to time, including the disclosure Board of India (Share Based Employee Benefi ts) requirements prescribed therein. Regulations, 2014, as amended from time to time (hereinafter referred to as “SEBI SBEB Regulations”) RESOLVED FURTHER THAT Nomination and and subject to such other approvals, permissions and Remuneration Committee (‘Committee’) be and is sanctions as may be necessary and subject to such hereby designated as compensation Committee conditions and modifi cations as may be prescribed or pursuant to SEBI Regulations for administration and imposed while granting such approvals, permissions superintendence of the scheme. and sanctions, which may be accepted by the Board RESOLVED FURTHER THAT the Board of the Company, of Directors of the Company (hereinafter referred subject to compliance of the applicable laws and to as the “Board” which term shall be deemed to regulations, be and is hereby authorized to modify, include any Committee, including the Nomination change, vary, alter, amend, suspend or terminate the and Remuneration Committee, which the Board has scheme not prejudicial to the interests of the Identifi ed constituted to exercise its powers, including the Employees and to do all such acts, deeds, matters powers, conferred by this resolution), approval and and things as it may in its absolute discretion deems consent of the Shareholder of the Company be and is fi t for such purpose and also to settle any issues, hereby accorded for secondary acquisition of shares questions, diffi culties or doubts that may arise in for implementation of SRL Employee stock option this regard without being required to seek any further Scheme upto the fullest extent of limits prescribed consent or approval of the members and to execute all hereunder and those under the SEBI SBEB Regulations such documents, writings and to give such directions as may be decided solely by the Board under the and/or instructions as may be necessary or expedient Plan, exercisable into not more than 8,00,000 (Eight to give effect to such modifi cation, change, variation, Lakh) fully paid-up equity shares in the Company in alteration, amendment, suspension or termination of aggregate of face value of ` 10/- (Rupees Ten) each, the Scheme and do all other things incidental to and through Surya Roshni Limited Employees Welfare ancillary thereof. Trust (“Trust”) to be set-up by the Company, at such price or prices, in one or more tranches and on such RESOLVED FURTHER THAT The Board be and is hereby terms and conditions, as may be determined by the authorized to take necessary steps for listing of the Board subject however that secondary acquisition Securities allotted under the scheme on the Stock by the trust in any fi nancial year shall not exceed two Exchanges, where the equity shares of the Company are percent of the paid-up capital as at the end of the listed as per the provisions of the Listing Regulations respective previous fi nancial year, more particularly and other applicable laws, rules and regulations; in accordance with the provisions of the Plan, SEBI RESOLVED FURTHER THAT the Board be and is hereby SBEB Regulations and in due compliance with other authorized to do all such acts, deeds, and things, as it applicable laws and regulations.

45TH AGM NOTICE 5 SURYA ROSHNI LIMITED

RESOLVED FURTHER THAT the Board be and is hereby under and in due compliance with the provisions of the authorized to do all such acts, deeds, and things, as it SEBI SBEB Regulations, the Companies Rules and other may, in its absolute discretion deem necessary including applicable laws and regulations. but not limited to appoint Advisors, Merchant Bankers, RESOLVED FURTHER THAT any loan provided by the Consultants or Representatives, being incidental for Company shall be repayable to and recoverable by the effective implementation and administration of the the Company from time to time during the term of the Scheme and to make applications to the appropriate scheme and/or Employee Benefi t Plans, as the case Authorities, for their requisite approvals and take all may be, subject to exercise price being paid by the necessary actions and to settle all such questions, employees on exercise of Employee Stock Options diffi culties or doubts whatsoever that may arise while under the respective Employee Benefi t Plan. implementing this resolution.” RESOLVED FURTHER THAT the Trust shall not deal 14. To Consider and, if thought fi t, to pass with or without in derivatives and shall undertake transactions as modifi cation(s), the following resolution as a Special permitted by SEBI SBEB Regulations. Resolution: RESOLVED FURTHER THAT the Trustees of the Trust “RESOLVED THAT pursuant to the provisions of Section shall not vote in respect of the shares held by such 62(1)(b), 67, Rule 16 of the Companies (Share Capital Trust. and Debentures) Rules, 2015 and all other applicable provisions, if any, of the Companies Act, 2013 read RESOLVED FURTHER THAT for the purposes of with Rules framed thereunder (including any statutory disclosures to the stock exchange, the shareholding modifi cation(s) or re-enactment(s) thereof for the time of the Trust shall be shown as non-promoter and being in force), the Memorandum of Association and non-public shareholding. Articles of Association, Securities and Exchange Board RESOLVED FURTHER THAT the Trustees of the Trust of India (Share Based Employee Benefi ts) Regulations, shall ensure compliance of the provisions of the SEBI 2014 as amended from time to time (hereinafter SBEB Regulations, Companies Rules and all other referred to as “SEBI SBEB Regulations”), and subject applicable laws at all times in connection with dealing to such other approvals, permissions and sanctions as with the shares of the Company including but not may be necessary and subject to such conditions and limited to maintenance of proper books of account, modifi cations as may be prescribed or imposed while records and documents as prescribed. granting such approvals, permissions and sanctions, which may be accepted by the Board of Directors of RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as the “Board” the Company be and is hereby authorized to comply which term shall be deemed to include any Committee, with the legal provisions and do all ancillary and including the Nomination and Remuneration Committee consequential matters and to take such steps and to which the Board has constituted to exercise its powers, do such acts, deeds, matters and things as they may including the powers, conferred by this resolution), deem proper and give/send such notices, directions consent of the Shareholders of the Company be and is as may be necessary to give effect to the above hereby accorded to the Board to grant loan, to provide resolution.” guarantee or security in connection with a loan granted 15. To Consider and, if thought fi t, to pass with or without or to be granted to, the Surya Roshni Limited Employees modifi cation(s), the following resolution as a Special Welfare Trust (hereinafter referred to as “Trust”) set-up Resolution: or to be set up by the Company in one or more tranches not exceeding 5% (Five percent) of the aggregate of the “RESOLVED THAT in accordance with the provisions paid-up share capital and Free Reserves for the purpose of Section 149, 150 , 152, 160 and Schedule IV and of subscription and/or purchase of equity shares of the such other applicable provisions, if any, of the Company by the Trust/ Trustees, in one or more tranches, Companies Act, 2013, (the Act) and the Companies subject to the ceiling of equity shares as may be (Appointment and Qualifi cation of Directors) Rules, prescribed under “SRL Employee Stock Option Scheme 2014 including any statutory modifi cation or any – 2018” (“Scheme”) or any other share based employee amendment or any substitution or re-enactment benefi t plan which may be introduced by the Company thereof for the time being in force read with Securities from time to time (hereinafter referred to as “Employee Exchange Board of India (Listing Obligations and Benefi t Plan(s)”) from time to time, with a view to deal in Disclosure Requirements) Regulations, 2015 and such equity shares in line with contemplated objectives in compliance of SEBI (Listing Obligations and of the Plan or for any other purpose(s) as permitted Disclosure Requirements) (Amendment) Regulations,

6 45TH AGM NOTICE SURYA ROSHNI LIMITED

2018 dated 9th May, 2018 which will come into force Regulations, 2015 referred to as the Listing with effect from 1st April, 2019, members of the Regulations, approval of the members of the Company Company be and is hereby accorded their assent be and is hereby accorded to appoint Shri Kaustubh to continue Sh. Ravinder Kumar Narang having Narsinh Karmarkar having Director Identifi cation No. Director Identifi cation No. (DIN) – 02318041 as Non- (DIN) – 00288642 as Director of the Company liable executive; Independent Director on or after 1st April, to retire by rotation.” 2019 even on attaining the age of 75 years for the 18. To consider and, if thought fi t, to pass with or without remaining term of his Independent Director. modifi cation(s), the following resolution as a Special RESOLVED FURTHER THAT the Board of Directors be Resolution: and are hereby authorised to do all such acts, deeds “RESOLVED THAT in accordance with the provisions and things as may be considered necessary to give of Section 196,197,198,200, 203 and Schedule V effect to the aforesaid resolution.” and such other applicable provisions, if any, of the 16. To Consider and, if thought fi t, to pass with or without Companies Act, 2013, (the Act) including any statutory modifi cation(s), the following resolution as a Special modifi cation or any amendment or any substitution Resolution: or re-enactment thereof for the time being in force, approval of the members of the Company be and is “RESOLVED THAT in accordance with the provisions of hereby accorded to the appointment of, including Section 149, 150 , 152, 160 and Schedule IV and such remuneration, perquisites, benefi ts and amenities other applicable provisions, if any, of the Companies payable to Shri Kaustubh Narsinh Karmarkar having Act, 2013, (the Act) and the Companies (Appointment Director Identifi cation No. (DIN – 00288642) as the and Qualifi cation of Directors) Rules, 2014 including Whole-time Director of the Company for a period any statutory modifi cation or any amendment or of fi ve years commencing from 10th August, 2018 any substitution or re-enactment thereof for the to 09th August, 2023, as set out in the Agreement time being in force read with Securities Exchange executed / to be executed between the Company and Board of India (Listing Obligations and Disclosure Shri Kaustubh Narsinh Karmarkar, the main terms Requirements) Regulations, 2015 and in compliance of which are set out in the explanatory statement, of SEBI (Listing Obligations and Disclosure which agreement is hereby specifi cally approved with Requirements) (Amendment) Regulations, 2018 dated authority to the Board of Directors of the Company 9th May, 2018 which will come into force with effect to alter and / or vary the terms and conditions of the from 1st April, 2019, members of the Company be said appointment within the limits, if any, prescribed and is hereby accorded their assent to continue Sh. in the Act and / or any schedules thereto. Krishan Kumar Narula having Director Identifi cation No. (DIN) – 00098124 as Non-executive; independent RESOLVED FURTHER THAT in the event of loss or Director on or after 1st April, 2019 even on attaining inadequacy of profi ts in any fi nancial year during the the age of 75 years for the remaining term of his aforesaid period, the company will pay Shri Kaustubh Independent Director. Narsinh Karmarkar remuneration, perquisites, benefi ts and amenities not exceeding the ceiling RESOLVED FURTHER THAT the Board of Directors be laid down in section II of Part II of Schedule V of the and are hereby authorised to do all such acts, deeds Companies Act, 2013, as may be decided by the Board and things as may be considered necessary to give of Directors. effect to the aforesaid resolution.” RESOLVED FURTHER THAT the Board of Directors 17. To Consider and, if thought fi t, to pass with or without of the Company be and are hereby authorized to modifi cation(s), the following resolution as an enhance , enlarge , alter or vary the scope and Ordinary Resolution: quantum of remuneration , perquisites, benefi ts “RESOLVED THAT in accordance with the provisions and amenities payable to Shri Kaustubh Narsinh of Section 152, 160, 161 and such other applicable Karmarkar in the light of the further progress of the provisions, if any, of the Companies Act, 2013, (the Company which revision should be in conformity with Act) including any statutory modifi cation or any any amendments to the relevant provisions of the Act amendment or any substitution or re-enactment and /or the rules and regulations made there under thereof for the time being in force read with SEBI and/or such guidelines as may be announced by the (Listing Obligations and Disclosure Requirements) Central Government from time to time.

45TH AGM NOTICE 7 SURYA ROSHNI LIMITED

RESOLVED FURTHER THAT the Board of Directors be may be required or suggested by the Registrar of and are hereby authorised to do all such acts, deeds Companies and any other appropriate authorities, and things as may be considered necessary to give replacement and substitution of the existing Articles effect to the aforesaid resolution.” of Association of the Company with the Articles of Association as submitted to this meeting which are 19. To Consider and, if thought fi t, to pass with or without in conformity with the provisions of Companies Act modifi cation(s), the following resolution as a Special 2013, be and is hereby approved, and the substituted Resolution: Articles be adopted as the Articles of Association of “RESOLVED THAT pursuant to the provisions of the Company. Section 14 and all other applicable provisions of RESOLVED FURTHER THAT the Board of Directors of the Companies Act, 2013, read with the Companies the Company (including any committee thereof) be (Incorporation) Rules, 2014 (including any statutory and is hereby authorised to do all acts, deeds and modifi cation(s) or re-enactment thereof, for things and take all such steps as may be necessary, the time being in force), subject to such terms, proper or expedient to give effect to this resolution.” conditions, amendments or modifi cations if any, as

By order of the Board

Registered Ofﬁ ce: Prakash Nagar, Sankhol, Bahadurgarh – 124 507 (Haryana) B. B. SINGAL Dated: 10th August, 2018 SR. V.P & COMPANY SECRETARY

NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THIS Annual General Meeting (“meeting”) of the Company ANNUAL GENERAL MEETING MAY APPOINT A PROXY scheduled to be held on Friday, 28th September, 2018 TO ATTEND AND VOTE ON A POLL ON HIS BEHALF. A at the Registered offi ce of the Company Prakash PROXY NEED NOT BE A MEMBER OF THE COMPANY. Nagar Sankhol, Bahadurgarh -124507 (Haryana). The members may cast their votes using an electronic A person can act as a proxy on behalf of members voting system from a place other than the venue of not exceeding fi fty and holding in the aggregate not the meeting (remote e-voting). The Company has more than ten percent of the total share capital of the engaged National Securities Depository Limited company carrying voting rights. A member holding (NSDL) to provide e-voting platform to members. The more than ten percent of the total share capital of the process of remote e-voting shall be as follows : company carrying voting rights may appoint a single person as proxy and such person shall not act as a (A) In case of members receiving e-mail (For those proxy for any other person or shareholder. members whose e-mail addresses are registered with the Company) Proxies, in order to be effective, must be received i) Open email and open attached PDF fi le at 2nd floor, Padma Tower-I, 5 Rajendra Place, New “e-Voting.pdf” giving your Client ID (in case Delhi – 110 008 or at Registered Offi ce, not less than you are holding shares in demat mode) or forty-eight hours before the commencement of this Folio No. (In case you are holding shares Annual General Meeting i.e. before 11.00 a.m. on 26th in physical mode) as password, which September, 2018. Proxies submitted on behalf of the contains your “USER ID” and “Password for companies, societies etc., must be supported by an e-voting”. Please note that the password is appropriate resolution/authority, as applicable. an initial password. You will not receive this 2. In terms of the provisions of Section 108 of the PDF fi le if you are already registered with Companies Act, 2013 (the Act) read with Rule 20 of NSDL for e-voting. the Companies (Management and Administration) ii) If you are holding shares in demat form Rules, 2014 (the Rules), as amended and Regulation and had logged on to www.evoting.nsdl. 44 of SEBI (Listing Obligations and Disclosure com and voted on an earlier voting of any Requirements) Regulation 2015, the Company is company, then your existing password is to providing its members facility to exercise their right to be used. If you forget your password, you vote on the Items of Business given in the AGM Notice can reset your password by using “Forgot dated 10th August, 2018 proposed to be passed in the

8 45TH AGM NOTICE SURYA ROSHNI LIMITED

User Details / Password ?” or “Physical are not registered with the Company / depository User Reset Password ?” option available on participant(s) or requesting physical copy). www.evoting.nsdl.com or contact NSDL at a) Initial Password is provided in the box toll free No. 1800-222-990 b) Please follow all steps from sl. no. (ii) to sl. iii) Launch internet browser by typing the no. (xiv) above to cast vote. following URL : https://www.evoting.nsdl. com/ General Instructions: a) The remote e-voting period begins on iv) Click on “Shareholders – Login Tuesday, 25th September, 2018 at 9.00 v) Put User ID and Password as initial password a.m (IST) and ends on Thursday, 27th noted in step (i) above. Click Login. September, 2018 at 5.00 p.m (IST). During this period shareholders’ of the Company, vi) Password change menu appears. Change holding shares either in physical form or in the password with new password of your dematerialized form, as on the cut-off date choice with minimum 8 digits/ characters or (record date) of 21st September, 2018, may combination thereof. Note New Password. cast their vote electronically. The remote It is strongly recommended not to share e-voting module shall be disabled by NSDL your password with any other person and for voting thereafter. take utmost care to keep your password confi dential. b) A person, whose name appears in the register of Members / Benefi cial owners as on cut-off vii) Home page of remote e-voting opens. Click date i.e 21st September, 2018, only shall be on remote e-voting Active Voting Cycles. entitled to avail the facility of remote e-voting viii) Select “EVEN” (e-voting event number) of as well as voting at the meeting. “Surya Roshni Limited”. c) Any person who becomes members of the ix) Now, you are ready for remote e-voting as Company after dispatch of the Notice of Cast Vote page opens. the meeting and holding shares as on the cut–off date i.e 21st September, 2018, may x) After selecting the resolution you have obtain the login ID and password by sending decided to vote on, click on “SUBMIT”. A a request at [email protected] or to the confi rmation box will be displayed. If you wish Company Registrar - MAS Services Limited to confi rm your vote, click on “CONFIRM”, at [email protected]. If the member is else to change your vote, click on “BACK” and already registered with NSDL than he can accordingly modify your vote. use his/her existing user ID and password xi) Upon confi rmation, the message “Vote cast to cast the vote through remote e-voting. successfully” will be displayed. d) In case you have any queries or issues xii) Once you “CONFIRM” your vote on the regarding remote e-voting, you may refer resolution, you will not be allowed to modify the Frequently Asked Questions (“FAQs”) your vote. and remote e-voting manual available at www.evoting.nsdl.com or call on toll free xiii) You can also take out print of the voting no. 1800-222-990. done by you by clicking on “click here to print” option on the voting page. e) The voting rights of shareholders shall be in proportion to their shares of the paid-up xiv) Institutional shareholders (i.e. other than equity share capital of the company as on Individuals, HUF, NRI etc.) are required to the cut-off date of 21st September, 2018, send a scanned copy (PDF /JPG Format) of the Board Resolution /Authority Letter f) Members can also download the notice / Power of Attorney (POA) etc. together of the meeting at www.surya.co.in for with attested specimen signature of exercising their e-voting rights. the authorized signatory(ies) who are g) Members who have cast their vote through authorized to vote, to the Scrutinizer remote e-voting prior to the meeting may through e-mail to [email protected] with attend the meeting but shall not be allowed a copy marked to [email protected] to cast their vote again. (B) In case of members receiving the physical copy h) The Board of Directors has appointed SGS of Notice of AGM (for members whose e-mail IDs Associates (Company Secretaries Firm) 14,

45TH AGM NOTICE 9 SURYA ROSHNI LIMITED

First floor, Rani Jhansi Road, New Delhi – including 9 digit MICR number appearing on the 110055 as Scrutinizer for conducting the cheque pertaining to the respective bank account to e-voting process . facilitate distribution of dividend through Electronic i) At the end of the Annual General Meeting Clearing Service (ECS) to the Company / Registrar voting exercise, Scrutinizer will download and Transfer Agent – MAS Services Ltd., T- 34, 2nd the entire voting data using its scrutinizer floor, Okhla Industrial Area, Phase II, New Delhi – 110 login. 020, in respect of Shares held in physical form and to their respective Depository Participants if the shares j) The Scrutinizer will submit his fi nal report are held in electronic form. after the conclusion of voting at the Annual General Meeting but not later than closing 6. Relevant documents referred to in the Notice of the business hours on 29th September, or in the accompanying Statement are open 2018. for inspection to the Members at the registered offi ce of the Company during business hours on k) The Chairman of the meeting shall announce all working days up to the date of Annual General the result of voting on the resolutions taken up at the 45th Annual General Meeting on Meeting. or after submission of fi nal report by the 7. Pursuant to the provisions of Section 124(5) Scrutinizer. and (6) of the Companies Act, 2013, Ministry of Important Note: Corporate Affairs (MCA) vide notifi cation dated February 28, 2017 and 16th October, 2017 has As Surya Roshni Limited, being a listed Company notifi ed Investor Education and Protection Fund and having more than 1000 shareholders, is compulsorily required to provide e-voting facility Authority (Accounting, Audit, Transfer and Refund) to members in terms of Section 108 of the Act Rules 2017 (‘IEPF Rules’) and inter-alia specifi ed read with Rule 20 of Companies (Management the manner for transfer of Unclaimed Dividend and Administration) Amendment Rules, 2015 along with the shares, in respect of which dividend and regulation 44 of SEBI (Listing Obligations is unpaid or unclaimed for a period of seven years, and Disclosure Requirements) Regulations, 2015, to Investor Education and Protection Fund (IEPF) voting by show of hands will not be available to established by the Central Government. During the the members at the 45th Annual General Meeting year, the Company has transferred 1,49,513 equity in view of the further provisions of Section 107 shares to IEPF Suspense Account as tabulated read with Section 114 of the Act. below in respect of which dividend stands 3. A statement pursuant to Section 102(1) of the unclaimed for a continuous period of seven years Companies Act, 2013, in respect of item no. 4 to starting from F.Y - 2008-09 onwards. 19 are annexed hereto. Disclosure with respect to transfer of shares to 4. The Register of Members and Share Transfer IEPF suspense account as per the provisions of books of the Company will remain closed from section 124(6) of the Companies Act, 2013 read 11.09.2018 to 14.09.2018 (both days inclusive). with the Investor Education and Protection Fund Authority ( Accounting, Audit, Transfer and Refund) 5. Members are requested to forward their change of address notifi cations, Bank Account details Rules, 2016.

Year Total No. Outstanding Total No. of Total No. Total No. No. of Outstand- Voting of Share- Shares in Sharehold- of Shares of Share- Shares ing Shares Rights holders at IEPF demat ers whose trans- holders who Trans- in demat Frozen the begin- suspense shares ferred approached ferred suspense ac- ning of the account at are trans- to IEPF the company from IEPF count lying year the begin- ferred to suspense for transfer of Suspense at the end of ning of the IEPF demat account shares from Account the year. year suspense ac- during the IEPF suspense during the count during year account during year the year the year 2008-09 Nil Nil 1187 132101 2 Nil 132101 Yes 2009-10 Nil Nil 142 17412 1 Nil 17412 Yes Total Nil Nil 1329 149513 3 Nil 149513

10 45TH AGM NOTICE SURYA ROSHNI LIMITED

The Company has uploaded full details of such comprising 1599 equity shares stands in the shareholders and shares transferred to IEPF suspense account as on 31st March, 2018. Suspense Account on its website www.surya.co.in. No shareholders whose shares are lying in the Any future dividend / benefi ts, if any, in respect of above mentioned escrow account have claimed shares so transferred shall also be credited to the their shares during the Financial Year 2017-18. IEPF Fund. After the shares are transferred to the Members who have not claimed their shares lying IEPF Suspense Account, the claimant can claim in Unclaimed Suspense Account are requested to those shares in accordance with the procedure and address their claim with supporting documents to on submission of necessary forms and documents Registrar & Transfer Agent - MAS Services Limited to the IEPF Authority. (Unit Surya Roshni Limited) T- 34, 2nd floor, Okhla Industrial Area, Phase II, New Delhi – 110 020 or 8. Pursuant to the provisions of Section 125 of the to the Company at 2nd floor, Padma Tower-I, 5 Companies Act, 2013, dividend, which remains Rajendra Place, New Delhi - 110 008. unpaid or unclaimed for a period of seven years will be transferred to the Investor Education & 10. In compliance to Section 20 of the Companies Protection Fund of the Central Govt. Members who Act, 2013 & SEBI (Listing Obligations and have not en-cashed their dividend warrant so far Disclosure Requirements) Regulation 2015, for the fi nancial year ended 31st March, 2011, or Ministry of Corporate Affairs permits service any subsequent fi nancial year(s), the details of of documents by electronic mode to members which are available at the following link. http:// / shareholders. Members wish to avail this www.surya.co.in/wp-content/uploads/2016/04/ service register their e-mail address with the IEPF-Report-29.12.2017.pdf and are requested to Company by sending a consent letter to Sr. V.P address their claim with supporting documents to & Company Secretary, Padma Tower – 1, 2nd Registrar & Transfer Agent - MAS Services Limited floor, 5 Rajendra Place, New Delhi – 110008 / (Unit Surya Roshni Limited) T- 34, 2nd floor, Okhla Registrar and Transfer Agent – MAS Services Industrial Area, Phase II, New Delhi – 110 020 or Limited, T-34, 2nd floor, Okhla Industrial Area, to the Company at 2nd floor, Padma Tower-I, 5 Phase – II, New Delhi -110020. Rajendra Place, New Delhi - 110 008. 11. Pursuant to SEBI Circular SEBI/HO/MIRSD/DOP1/ 9. Pursuant to Regulation 39(4) read with Schedule CIR/P/2018/73 dated April 20, 2018 in regard to VI of SEBI (Listing Obligations and Disclosure Strengthening the guidelines and Raising Industry Requirement) Regulations 2015, and in compliance Standards for RTA, Issuer Companies and Bankers with the provisions of Section 124(5) and (6) of the to an Issue, the provision has been made with Companies Act, 2013 read with Investor Education regard to payment of Dividend through electronic and Protection Fund Authority (Accounting, Audit, channels. Members who have not yet registered Transfer and Refund) Rules 2017 (‘IEPF Rules’) their Bank Details / Change in Bank Account the Company out of unclaimed equity shares Details, are requested to submit the bank details of 146 shareholders comprising 10263 equity along with the cancelled cheque which bears shares lying in the escrow account titled “Surya the name of the securities holder either with the Roshni Limited – Unclaimed Suspense Account” Company Registrar and Transfer Agent – MAS maintained with National Securities Depository Services Limited, T-34, 2nd floor, Okhla Industrial Limited has transferred shares of 134 shareholders Area, Phase – II, New Delhi -110020 or with their comprising 8664 equity shares to IEPF Authority concerned depository (if shares are held in demat Suspense Account and balance 12 shareholders form).

45TH AGM NOTICE 11 SURYA ROSHNI LIMITED

EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013 (“THE ACT”)

ITEM NO. 4 f) The working Capital Limits including CEL Limits for The Company has been sanctioned the Term Loans from forward cover of ` 195832 Lakh, secured on Second Export – Import Bank of India and HDFC Bank Limited and Charge basis, lent and advanced/agreed to be lent has the existing term loans lent and advanced by State and advanced by State Bank of India, Punjab National Bank of India, Export-Import Bank of India, Canara Bank Bank, IDBI Bank Ltd., Canara Bank, HDFC Bank and DCB Bank Limited to the Company and erstwhile Surya Limited, Bank of Baroda and DCB Bank Limited to the Global Steel Tubes Limited (e-SGSTL merged with the Company. The details are as under; Company), working capital limits from consortium Banks i.e. State Bank of India, Punjab National Bank IDBI Bank S. Consortium Banks (` In Lakh) Ltd., Canara Bank, HDFC Bank Limited, Bank of Baroda and No. DCB Bank Limited for its Steel Pipes & Strips and Lighting 1 State Bank of India 79,466 Segments. The details are as under: 2 Punjab National Bank 38,266 3 IDBI Bank Ltd. 9,300 a) Term Loan of ` 2500 Lakh (Rupees Two thousand fi ve 4 Canara Bank 22,000 hundred Lakh only) lent and advanced by Export – 5 HDFC Bank Limited 23,100 Import Bank of India (EXIM) to the Company. 6 Bank of Baroda 18,800 b) Term Loan of ` 6500 Lakh (Rupees Six thousand fi ve 7 DCB Bank Limited 4,900 hundred Lakh only) lent and advanced by HDFC Bank Total 1,95,832 Limited (HDFC) to the Company. the fi nancial assistance together with interest thereon at c) Term Loan of ` 4900 Lakh (Rupees Four thousand the respective agreed rates, interest tax, compound interest, nine hundred Lakh only) lent and advanced by HDFC additional interest, liquidated damages, commitment Bank Limited (HDFC) to the Company for setting up of charges, premia on prepayment or on redemption, costs, 3LPE coating unit at Anjar Kutch. charges, expenses and other monies payable by the d) Existing term loan(s) of ` 30,000 Lakh (Rupees thirty Company to State Bank of India, Punjab National Bank, thousand Lakh only) lent and advanced by State Bank IDBI Bank Ltd, Canara Bank, HDFC Bank Limited, Bank of of India (SBI), Export-Import Bank of India (EXIM) and Baroda, DCB Bank Limited and Export - Import Bank of Canara Bank has been sanctioned to the Company India under Loan Agreements entered into/to be entered which were secured by way of charge on Company’s into by the Company in respect of the aforesaid loans have entire immovable and movable properties both present and future held prior to merger with erstwhile to be secured by a joint mortgage of all the immovable and Surya Global Steel Tubes Limited (e-SGSTL) The movable properties of the Company, present and future. details are as under: Section 180(1)(a) of the Companies Act, 2013 provides (` In Lakh) inter alia that the Board of Directors of a Public Company S. Existing Term Loans from Banks Sanctioned shall not, without the consent of shareholders of such No. Amount Public Company in General Meeting, sell, lease or otherwise 1 State Bank of India 6,000 dispose of the whole or substantially the whole of the 2 State Bank of India 2,500 3 State Bank of India 5,000 undertaking of the Company, or where the Company owns 4 State Bank of India 3,000 more than one undertaking, of the whole or substantially 5 State Bank of India 5,000 the whole of any such undertaking. Since the mortgage 6 Export -Import Bank of India 3,000 by the Company of its immovable and movable properties 7 Export -Import Bank of India 3,000 as aforesaid in favour of the Lenders may be regarded as 8 Canara Bank 2,500 disposal of the Company’s properties/undertakings, it is Total 30,000 necessary for the members to pass a Special Resolution e) Existing term loan(s) of ` 5000 Lakh (Rupees fi ve under Section 180(1)(a) of the Companies Act, 2013, thousand Lakh only) lent and advanced by State before creation of the said mortgage/charge. Bank of India (SBI) and DCB Bank Limited (DCB) has been sanctioned to the erstwhile Surya Global Steel Copy of the Loan Agreement(s) executed between Tubes Limited which were secured by way of charge the Company and Lenders and copies of the relevant on its entire immovable and movable properties documents / correspondence between the said Lenders both present and future held prior to merger with the and the Company are open for inspection at the Registered Company. The details are as under: Offi ce of the Company during business hours on any working day prior to the date of meeting. (` In Lakh) S. Existing Term Loans from Banks Sanctioned None of the Directors, Key Managerial Personnel or No. Amount relatives of Directors or Key Managerial personnel have 1 State Bank of India 2,500 any interest fi nancial or otherwise in the said resolution. 2 DCB Bank Limited 2,500 Total

12 45TH AGM NOTICE SURYA ROSHNI LIMITED

ITEM NO. 5 2. Leave Travel : For self and family once in a year The Shareholders of the Company at the Annual General Concession incurred with the rules specifi ed by Meeting held on 29.12.2017 had approved the appointment the Company. of Shri Jai Prakash Agarwal as Whole-time Director of the Company for a period of 5 years from 1st January, 2017 to 3. Club Fees : Fees of clubs subject to a maximum 31st December, 2021. of two clubs. Admission and life membership fees shall not be The Shareholders are aware that since Shri Jai Prakash allowed. Agarwal, assumed the offi ce of Whole-time Director of the 4. Personal : Premium not to exceed ` 4000/-per Company, the Company has made all-round progress. The Accident month. Company rather owes its present stature and position to Insurance his guidance and foresight. His unshakable determination along with a vast experience has helped the Company scale PART-B new heights year after the other. Under the management The following perquisites shall not be included in the control and guidance Shri Jai Prakash Agarwal, Whole- computation of the ceiling on remuneration specifi ed time Director, the Company has consistently maintained in Paragraph I of Section IV of part II of Schedule V of growth in sales and profi tability. the Companies Act, 2013. Furthermore, seeing the vast duties and responsibilities 1) Gratuity payable shall not exceed a half months’s to be performed by Executive Chairman, and after taking salary for each completed year of service. into account the Industry Standard’s remuneration paid 2) Encashment of leave at the end of the tenure. to Whole-time Director(s) and on the recommendation PART-C of Nomination and Remuneration Committee , the Board The Company shall provide a car with driver and telephone of Directors in its meeting held on 12th February, 2018 facility at the residence of the Chairman. Provision of car increase the remuneration paid to Shri Jai Prakash Agarwal with driver for use of Company’s business and telephone having DIN -00041119 as Whole-time Director (Executive facility at the residence will not be considered as perquisites. Chairman) of the Company by paying in addition to Salary Personal long distance calls on telephone and use of car and perquisites, 1.5% commission of the Profi t before tax for private purpose shall be billed by the Company on the (PBT) of the fi nancial year derived on the basis of Audited Whole-Time Director (Executive Chairman). Financial Statements of the Company for the concerned The aforesaid remuneration shall be subject to the limit of fi nancial year 2017-18 and onwards for the rest of his tenure 5% of the net profi ts as laid down under sub-section (1) of of services, as set out in the Supplementary Agreement section 197 of the Companies Act, 2013. executed on 20th March, 2018 between the Company and If the Company has no profi ts or the profi ts are inadequate in Shri Jai Prakash Agarwal subject to the approval of the any fi nancial year during the terms of his offi ce as the Whole- Members, and other concerned authority(ies), if necessary time Director, Sh. Jai Prakash Agarwal will be entitled to at the following terms : receive the above remuneration and perquisites as minimum SALARY : ` 30 Lakh per month w.e.f 1st July, 2017 remuneration , provided that the total remuneration, of salary, perquisites and any other allowances shall not exceed the COMMISSION : 1.5% of the Profi t before tax (PBT) of the ceiling as provided in section II of the Part II of Schedule fi nancial year derived on the basis of Audited V of the Companies Act, 2013 or such other amount and Financial Statements of the Company and perquisites as/is may be provided in the said schedule V will be due and paid on or after the approval as may be amended from time to time or any equivalent of Audited Financial Statements by the statutory re-enactment(s) thereof. Board of Directors of the Company for the concerned fi nancial year per annum basis The Board of Directors recommends the resolution(s) as for the period served under the agreement. set out in item No.5 for the approval of the shareholders as a Special Resolution. PERQUISITES : Perquisites will be allowed in addition Copy of the Supplementary agreement dated 20th March, to salary. For this purpose unless the 2018 executed between the Company and Shri Jai Prakash context otherwise requires , perquisites Agarwal along with other relevant documents related to his are classifi ed into three categories: Parts appointment as Whole-time Director are open for inspection A, B and C and the ceiling shall apply at the Registered offi ce of the Company during business only to Part-A. hours on any working day prior to the date of meeting. PART-A None of the Directors except Sh. Jai Prakash Agarwal, Smt. 1. Medical Reimbursement : Expenses incurred for Urmil Agarwal and Shri Vinay Surya (whose interest is only self and family subject to to the extent of increase in remuneration as Whole-time a ceiling of one month’s Director and their respective shareholding), Key Managerial salary per year or three Personnel or relatives of Directors or Key Managerial month’s salary in a period personnel have any interest fi nancial or otherwise in the of three years. said resolution.

45TH AGM NOTICE 13 SURYA ROSHNI LIMITED

Name of Director Date of Qualiﬁ cation Nature of Name of The number Name of (DIN) Birth (No. (Relationship with Expertise Companies of meetings Committees of of Equity other Directors) in which of the Board the Companies Shares held) he holds attended of which he holds Directorship during the Membership/ year Chairmanship Jai Prakash 10-07-1951 B.Com from He is an He is not 5 meetings of He is not holding Agarwal Calcutta University. Industrialist by holding the Company any Committee (No. of occupation. It is Directorship Board membership / (DIN – 00041119) Shares (No Inter-se his managerial in any attended chairmanship held in the relations with other skills that Company during the FY- except Company – Directors except transform a except Surya 2017-18 membership in 17,61,723) Smt. Urmil Agarwal small steel Roshni Ltd. Corporate Social and Shri Vinay unit into a Responsibility Surya) Conglomerate Committee (CSR) that recognized of Surya Roshni today as one Limited of the top Steel Pipes & Strips and Lighting & Consumer Durables Company of India ITEM NO. 6

The Shareholders of the Company at the Annual General year derived on the basis of Audited Financial Statements Meeting held on 05-09-2014 had approved the re- of the Company for the concerned fi nancial year 2017-18 appointment of Shri Raju Bista as Managing Director of the and onwards for the rest of his tenure of services, as set out Company for a period of fi ve years from 18th June,2014 to in the Supplementary Agreement executed on 20th March, 17th June, 2019. 2018 between the Company and Shri Raju Bista subject to the approval of the Members, and other concerned The Shareholders are aware that since Shri Raju Bista authority (ies), if necessary at the following terms : assumed the offi ce of Managing Director of the Company, the Company has made all-round progress. The Company SALARY : ` 15 Lakh per month w.e.f 1st April, 2016 rather owes its present stature and position to his guidance with an annual increment of ` 1.00 Lakh and foresight. His unshakable determination along with per month. a vast experience has helped the Company scale new COMMISSION : 1% of the Profi t before tax (PBT) of the heights year after the other. Under the management fi nancial year derived on the basis of control and guidance, Shri Raju Bista, Managing Director, Audited Financial Statements of the the Company’s Lighting Division set new bench marks and Company and will be due and paid on archived new milestones of sales. or after the approval of Audited Financial Furthermore, seeing the vast duties and responsibilities Statements by the Board of Directors of to be performed by Managing Director, and after taking the Company for the concerned fi nancial into account the Industry Standard’s remuneration paid year per annum basis for the period to Managing Director(s) and on the recommendation of served under the agreement. Nomination and Remuneration Committee, the Board PERQUISITES : Perquisites will be allowed in addition of Directors in its meeting held on 12th February, 2018 to salary. For this purpose unless the increase the remuneration paid to Shri Raju Bista having context otherwise requires, perquisites are DIN -01299297 as Managing Director of the Company classifi ed into two categories : Parts A and by paying in addition to Salary and perquisites, 1% B. commission of the Profi t before tax (PBT) of the fi nancial

14 45TH AGM NOTICE SURYA ROSHNI LIMITED

PART-A salary , perquisites and any other allowances shall not The following perquisites shall not be included in the exceed the ceiling as provided in section II of the Part II computation of the ceiling on remuneration specifi ed in in Schedule V of the Companies Act, 2013 or such other Section I of Part II in Schedule V of the Companies Act, amount and perquisites as/is may be provided in the said 2013: schedule V as may be amended from time to time or any equivalent statutory re-enactment(s) thereof. 1. Contribution to provident fund to the extent the same is not taxable under the Income Tax Act. Apart from the aforesaid remuneration, Shri Raju Bista will be entitled to reimbursement of expenses incurred in 2. Gratuity payable shall not exceed half a month’s connection with the business of the Company. salary for each completed year of service. 3. Encashment of leave at the end of the tenure. No sitting fees will be paid to him for attending the meetings of the Board of Directors of the Company or PART-B Committees thereof. The Company shall provide a car with driver and telephone facility at the residence of the Managing Director. Provision The Board of Directors recommends the resolution set of car with driver for use of Company’s business and out in item No.6 for the approval of the shareholders as a telephone facility at the residence will not be considered Special Resolution as perquisites. Personal long distance calls on telephone Copy of the Supplementary Agreement dated 20th March, and use of car for private purpose shall be billed by the 2018 executed between the Company and Shri Raju Company on the Managing Director. Bista along with other relevant documents related to his The aforesaid remuneration shall be subject to the limit of appointment as Managing Director are open for inspection 5% of the net profi ts as laid down under sub-section (I) of at the Registered offi ce of the Company during business section 197 of the Companies Act, 2013. hours on any working day prior to the date of meeting. If the Company has no profi ts or the profi ts are inadequate None of the Directors except Sh. Raju Bista (whose in any fi nancial year during the terms of `his offi ce as the interest is only to the extent of increase in remuneration as Managing Director, Shri Raju Bista will be entitled to receive Managing Director), Key Managerial Personnel or relatives the above remuneration and perquisites as minimum of Directors or Key Managerial personnel have any interest remuneration , provided that the total remuneration , of fi nancial or otherwise in the said resolution.

45TH AGM NOTICE 15 SURYA ROSHNI LIMITED

ITEM NO. 7 Section 149 of the Act inter alia stipulates the criteria of The Board of Directors of the Company, on the independence, should a company propose to appoint an recommendation of the Audit Committee in their meeting independent director on its Board. As per the said Section held on 17th May, 2018 approved the, appointment of 149, an independent director can hold offi ce for a term up M/s R J Goel & Company (a Cost auditor fi rm) as Cost to 5 (fi ve) consecutive years on the board of a company and Auditors to conduct the Audit of the cost records of the he shall not be included in the total number of directors for Company for the fi nancial year ending 31st March, 2019 at retirement of rotation. a remuneration of ` 4,75,000/-. Shri Sunil Sikka aged about 62 years, has an illustrious In accordance with the provisions of Section 148 of the career of 4 decades and served Havells and Bajaj Companies Act, 2013 read with Companies (Audit and Electricals at top positions. He has also been the president Auditors) Rules, 2014, the remuneration payable to Cost of ELCOMA. During his tenure, he led multiple initiatives to Auditor has to be ratifi ed by the shareholders of the Company. accelerate growth in marketing of consumer electrical and lighting in India Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out in Item No. 7 of the Notice On the basis of his long experience and positions held at for ratifi cation of the remuneration payable to M/s R J Goel & various levels, the Board of Directors is of the opinion that Company (a Cost auditor fi rm) for the fi nancial year ending he possesses appropriate balance of skills, experience and March 31, 2019. knowledge for being appointed as an independent director on the Board of the Company and enable the Board to The Board of Directors recommends the resolution set out discharge its function and duties effectively. in item No.7 for the approval of the shareholders as an Ordinary Resolution. Further, Sunil Sikka (Director Identifi cation No. (DIN) - 08063385), holds directorship in Sudhir Power Ltd. Further Copy of the resolution(s) and relevant documents (if any) as on the date of the notice, he is holding 14300 equity are open for inspection at the Registered Offi ce of the shares of the Company. Company during business hours on any working day prior to the date of the meeting. Shri Sunil Sikka is not disqualifi ed from being appointed as Director in terms of Section 164 and has given a None of the Directors, Key Managerial Personnel or declaration that he meets the criteria of Independence as relatives of Directors or Key Managerial personnel have provided in Section 149(6) of the Companies Act, 2013 to any interest fi nancial or otherwise in the said resolution. act as an Independent Director of the Company. ITEM NO. 8 Further in the opinion of the Board Sh. Sunil Sikka proposed The Board of Directors of the company on the recommendation to be appointed fulfi ls the conditions specifi ed in the Act of Nomination and Remuneration Committee (NRC) and the rules made there under and that the proposed appointed pursuant to the provisions of Section 161(1) of director is independent of the management. the Companies Act, 2013 and the Articles of Association of The Board of Directors recommends the resolution set out the Company Sh. Sunil Sikka as an Additional Independent in item No.8 for the approval of the shareholders as an Director of the Company with effect from 12th February Ordinary Resolution. 2018. In terms of the provisions of Section 161(1) of the Act, Sh. Sunil Sikka holds offi ce only up to the date of ensuing Copy of the consent letter, Schedule IV Part IV of the Code Annual General Meeting of the Company. for Independence Directors and other relevant documents are open for inspection at the Registered Offi ce of the Pursuant to Section 149, 150, 152 160 and Schedule IV Company during business hours on any working day prior (Code for Independent Directors) of the Companies Act, to the date of the meeting. 2013, and the Articles of Association of the Company and all other relevant provisions and that of listing agreement, None of the Directors except Shri Sunil Sikka, Key Board of Directors of the Company recommended the name Managerial Personnel or relatives of Directors or Key of Shri Sunil Sikka for appointment as an Independent Managerial personnel have any interest fi nancial or Director of the Company for a period of fi ve years from otherwise in the said resolution. 28th September, 2018 to 27th September, 2023 for its fi rst term not liable to retire by rotation.

16 45TH AGM NOTICE SURYA ROSHNI LIMITED

DETAILS PURSUANT TO REGULATION 36 OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND SECRETARIAL STANDARD 2 ISSUED BY ICSI, INFORMATION ABOUT THE DIRECTOR PROPOSED TO BE APPOINTED IS FURNISHED BELOW: Name of Director Date of Qualifi cation Nature of Expertise Name of The number Name of (DIN) Birth (No. (Relationship Companies of meetings Committees of of Equity with other in which he/ of the Board the Companies Shares held) Directors) she holds attended of which Directorship during the he holds year Membership/ Chairmanship Sunil Sikka 16-09-1955 B.E (Mech.)(No Possess vast He is holding 1 meeting of He is not Inter-se relations experience of 4 decades Directorship in the Company holding any (DIN – 08063385) (No. of with other and served Havells and Sudhir Power Board Committee Shares Directors.) Bajaj Electricals at top Limited and attended membership / held in the positions and has also Surya Roshni during the chairmanship Company – been the president of Ltd. FY-2017-18 except 14,300) ELCOMA. During his as he was membership tenure, he led multiple appointed in Committee initiatives to accelerate w.e.f. 12th of Directors of growth in marketing of February, Surya Roshni consumer electrical and 2018 Limited lighting in India ITEM NO. 9 & 10 are classifi ed into three categories: Parts In view of increasing the operations of the Company and to A, B and C and the ceiling shall apply only to Part-A. further strengthen the Board, Shri Vinay Surya, Executive Director of the Company was co-opted as an Additional PART-A Director of the Company with effect from 18th May, 2018. 1. Medical Reimbursement : Expenses incurred for self and Pursuant to the provisions of Section 161(1) and other family subject to a ceiling of applicable provisions of the Companies Act, 2013 and in one month’s salary per year compliance to SEBI (Listing Obligations and Disclosure or three month’s salary in a Requirements) Regulations, 2015 referred to as “Listing period of three years. Regulations” and SEBI Circular and the Articles of Association of the Company, Vinay Surya (having DIN – 00515803) holds offi ce only up to the date of ensuing Annual General Meeting 2. Leave Travel Concession : For self and family once in a year incurred with of the Company. In accordance with the provisions of Section the rules specifi ed by the 152, the Board of Directors proposed his appointment as Company Director liable to retire by rotation. 3. Club Fees : Fees of clubs subject Shri Vinay Surya being in the whole – time employment, to a maximum of two termed as Whole-Time Director of the Company and has clubs. Admission and been appointed on the recommendation of Nomination and life membership fees shall not be allowed. Remuneration Committee (NRC) by the Board of Directors 4. Personal Accident Insurance : Premium not to exceed ` of the Company, in their meeting held on 18th May, 2018 as 4000/-per month. Whole-Time Director for a period of fi ve years w.e.f.. 18th May, PART-B 2018 to 17th May, 2023 on the terms and conditions as set out in the Agreement executed on 22nd May, 2018 between The following perquisites shall not be included in the computation of the ceiling on remuneration specifi ed in the Company and Shri Vinay Surya, subject to the approval of Paragraph I of Section IV of part II of Schedule V of the Members , and other concerned authority , if necessary at the Companies Act, 2013. following terms : 1) Contribution to provident fund to the extent that is not SALARY : taxable under the Income Tax Act. Basic Salary of ` 13,40,000/- per month w.e.f 18th May, 2018 2) Gratuity payable shall not exceed a half month’s salary for each completed year of service. (CTC of ` 15,00,800/- per month including Employer’s 3) Encashment of leave at the end of the tenure. share of Provident Fund.) PART-C PERQUISITES : Perquisites will be allowed in addition The Company shall provide a car with driver and telephone to salary. For this purpose unless the facility at the residence of the Whole - time Director. context otherwise requires , perquisites Provision of car with driver for use of Companys business 45TH AGM NOTICE 17 SURYA ROSHNI LIMITED

and telephone facility at the residence will not be The Board of Directors recommends the resolution as set considered as perquisites. Personal long distance calls out in item No.9 for the approval of the shareholders as an on telephone and use of car for private purpose shall be Ordinary Resolution & resolution as set out in item No 10 billed by the Company on the Whole-Time Director as a Special Resolution. The aforesaid remuneration shall be subject to the limit of Copy of the Agreement dated 22nd May, 2018 executed 5% of the net profi ts as laid down under sub-section (1) of between the Company and Shri Vinay Surya along with section 197 of the Companies Act, 2013. other relevant documents related to his appointment If the Company has no profi ts or the profi ts are inadequate as Whole-time Director are open for inspection at the in any fi nancial year during the terms of his offi ce as the Registered offi ce of the Company during business hours Whole-time Director, Sh. Vinay Surya will be entitled to on any working day prior to the date of meeting. receive the above remuneration and perquisites as minimum remuneration, provided that the total remuneration , of salary, None of the Directors except Sh. Vinay Surya, Sh. Jai Prakash perquisites and any other allowances shall not exceed the Agarwal and Smt. Urmil Agarwal (whose interest is only to ceiling as provided in section II of the Part II of Schedule the extent of appointment as Whole-time Director and their V of the Companies Act, 2013 or such other amount and respective shareholding), Key Managerial Personnel or perquisites as/is may be provided in the said schedule V relatives of Directors or Key Managerial personnel have any as may be amended from time to time or any equivalent interest fi nancial or otherwise in the said resolution. statutory re-enactment(s) thereof.

ITEM NO. 11 course of the business of the Company. The members of the Company vide the Special Resolution As per the provisions of Section 180(1)( c) of the Companies passed at the forty fi rst Annual General Meeting of the Act, 2013, the Board of Directors cannot, except, with the Company held on 5th September, 2014 have accorded consent of the company in general meeting , borrow monies, their consent to the Board for borrowing up to the extent of apart from temporary loans obtained from the company’s ` 2,000 Crore (Rupees Two thousand Crore). bankers in the ordinary course of business , in excess of the With a view to have greater flexibility of funds as aggregate of its paid – up Share Capital and Free Reserves erstwhile Surya Global Steel Tubes Limited (e-SGSTL) viz. reserves not set aside for any specifi c purposes. has been merged with the Company and to meet fi nancial The Board of Directors recommends the resolution set requirements it is proposed to increase the borrowing limit to out in item No. 11 for the approval of the shareholders as ` 3,000 Crore (Rupees Three thousand Crore only) from Special Resolution. ` 2,000 Crore as previously approved by members. ITEM NO. 12 and 13 The funds as above would be used for expansion, acquisition, modernization, normal capital expenditure, general corporate In the present competitive scenario, the Board of Directors purposes and working capital requirements and such other of the Company (hereinafter referred to as the “Board”) has purpose permitted under respective regulations, during the identifi ed the need to enhance the employee engagement,

18 45TH AGM NOTICE SURYA ROSHNI LIMITED

to reward the employees for their association and 2. Total number of Options to be granted under the performance as well as to motivate them to contribute to Scheme. the growth and profi tability of the Company and to create a The maximum number of options to be granted under sense of ownership and participation amongst them. Scheme shall not exceed 8,00,000 (Eight Lakh) options In view of this, the Board has formulated a draft of the convertible into equal number of Equity Shares of the “SRL Employee Stock Option Scheme – 2018” (hereinafter Company of face value ` 10/- each. referred to as ‘Scheme’) for the present and/or future 3. Identi fi cation of classes of employees entitled to permanent employees of the Company (hereinafter referred participate and be benefi ciaries in Scheme. to as ‘employees’ or ‘said employees’) in accordance with  a permanent employee of the company who has the applicable laws. been working in India or outside India; or Hence, in terms of the provisions of Securities and Exchange  a director of the company, whether a whole time Board of India (Share Based Employee Benefi ts) Regulations, director or not but excluding an independent 2014 and Section 62 and other applicable provisions of the director; or but does not include— Companies Act, 2013, issue of Shares to persons other than the existing Members of the Company requires an approval   an employee who is a promoter or a person of the existing Members by way of a Special Resolution and belonging to the promoter group; or accordingly, the Special Resolution at Item No. 12 seeks your   a director who either himself or through approval for the issue of further Equity Shares under the SRL his relative or through any body corporate, Employee Stock Option Scheme – 2018 (“Scheme”), to the directly or indirectly, holds more than ten employees of the Company, as may be determined by the per cent of the outstanding equity shares of Compensation Committee. the company; The Scheme shall be undertaken by Trust Route wherein 4. Requirement of Vesting and period of Vesting the Trust shall acquire the shares of the Company by fresh allotment and/or by secondary acquisition. The scheme The options granted under Scheme shall vest based will be administered by the Compensation Committee upon the performance of the Employee, subject to (hereinafter referred to as “Committee”) of the company. completion of minimum 1 (One) year from the date of Grant and as may be decided by the Committee Further as per Regulation 6(3)(a) of the Securities and subject to maximum period of 3 (Three) years. Exchange Board of India (Share Based Employee Benefi ts) Regulations, 2014 approval of the shareholders by The specifi c Vesting schedule and Vesting conditions way of separate Special Resolution is also required for subject to which Vesting would take place would be secondary acquisition of shares by the Trust for proper outlined in the document given to the Option Grantee implementation of the scheme and accordingly, Special at the time of Grant of Options. Resolutions set out at Item No. 13 is seeking your approval 5. Maximum period within which the options shall be for the said purposes respectively. vested The main features and other details of the Scheme as per The options granted under Scheme shall vest as may Regulation 6(2) of SEBI (SBEB) Regulations, 2014, are as be decided by the Committee subject to maximum under: period of 3 (Three) years. Vesting of Options would be subject to continued employment with the Company, 1. Brief description of the Scheme or as the case may be, on the date of vesting. The Scheme shall be called as the “SRL Employee Stock Option Scheme – 2018” or “the scheme” and 6. Exercise Price or Pricing Formula: shall extend its benefi ts to the present and/or future The Exercise Price shall be based on the Market Price permanent employees of the Company, in accordance of the Company which shall mean the latest closing with the applicable laws. price on a recognised stock exchange on which the shares of the company are listed on the date The Scheme shall be undertaken by Trust Route immediately prior to the date of meeting of committee wherein the Trust shall acquire the shares of the on which grant is to be made. Company by fresh allotment and/or by secondary acquisition which will subsequently be transferred As the shares of the Company are listed on more than to employees upon valid exercise of Options under one stock exchange, then the closing price on the the scheme. The scheme will be administered by the stock exchange having higher trading volume shall Compensation Committee (hereinafter referred to as be considered as the market price. The Committee “Committee”) of the company. has a power to provide suitable discount or charge premium on such price as arrived above. However, in

45TH AGM NOTICE 19 SURYA ROSHNI LIMITED

any case the Exercise Price shall not go below the par 10. The Maximum quantum of benefi ts to be provided per value of Equity Share of the Company. Employee under the scheme 7. Exercise period and process of Exercise: The maximum quantum of benefi t that will be provided to every eligible Employee under the Scheme The Employee Stock Options granted may be will be the difference between the Market value of exercised by the Option Grantee within a maximum Company’s Share on the Stock Exchange as on the period of 3 (three) Years from the date of vesting of date of exercise of options and the Exercise Price paid the respective Options. by the employee to the Company The mode and manner of the Exercise of the Options 11. Implementation and administration of the scheme shall be communicated to the employees individually. On exercise of the Options, the employee shall forthwith The scheme shall be implemented by Trust Route and pay to the Company the price which includes the grant administered by the Compensation Committee of the price and applicable taxes. The options shall lapse if not Company. exercised within the specifi ed exercise period. 12. Whether the scheme involves new issue of shares by 8. Appraisal process for determining the eligibility of the the company or secondary acquisition by the Trust or Employees to Scheme: both The appraisal process for determining the eligibility of The scheme is implemented by Trust route, wherein the employees will be in accordance with the Scheme the Trust can acquire shares from the Company by or as may be determined by the Committee at its sole fresh allotment and/or from the market by secondary discretion. acquisition. The shares so acquired will be transferred to the Employees by the Trust who successfully The employees would be granted options under the exercised their vested options. Scheme based on various parameters including but not limited to: 13. The amount of loan to be provided for implementation of the scheme by the company to the trust, its tenure, i) Loyalty: It will be determined on the basis of utilization, repayment terms, etc.; tenure of employment of an Employee in the The amount of loan to be provided for implementation Company. of the scheme by the Company to the Trust Shall ii) Performance: Employee’s performance during not exceed 5% of the paid up equity capital and the fi nancial year on the basis of the parameters free reserves as provided in companies Act, 2013. decided by the management. The tenure of such loan shall be the point where the objects of the Trust are accomplished or the iii) Designation: Employee’s designation in the repayment of loan is made, whichever is earlier. The Career Group as per the HR Policy of the utilization of such loan shall be for the objects of the Company. Trust as mentioned in the Trust Deed including the iv) The present and potential contribution of the implementation of the scheme. The Trust shall repay Employee to the success of the Company. the loan to the company by utilising the proceeds realised from exercise of Options by the Employees. v) High market value/diffi culty in replacing the Employee and 14. The Maximum percentage of secondary acquisition (subject to limits specifi ed under the regulations) that vi) High risk of losing the Employee to competition. can be made by the trust for the purposes of the scheme. vii) Value addition by the new entrant if any. Secondary acquisition in a fi nancial year by the trust 9. The Maximum number of Options to be granted per shall not exceed two per cent of the paid up equity employee and in aggregate capital as at the end of the previous fi nancial year. The total number of shares under secondary acquisition The maximum number of Options that can be granted held by the trust shall at no time exceed 5% of the paid to any eligible employee during any one-year shall up equity capital as at the end of the fi nancial year not equal or exceed 1% of the issued capital of the immediately prior to the year in which the shareholder Company at the time of grant of options unless approval is obtained for such secondary acquisition. otherwise approved by the shareholders. 15. Disclosure and accounting policies: The maximum number of options to be granted under this scheme shall not exceed 8,00,000 (Eight Lakh). The Company shall comply with the disclosures requirements and the accounting policies prescribed under Regulation 15 of the Securities and Exchange

20 45TH AGM NOTICE SURYA ROSHNI LIMITED

Board of India (Share Based Employee Benefi ts) In terms of Section 62 of the Companies Act, 2013 and Regulations, 2014 or as may be prescribed by Regulation 6(1) of Securities and Exchange Board of regulatory authorities from time to time. India (Share Based Employee Benefi ts) Regulations, 16. The method which the Company shall use to value its 2014, the approval of the Shareholders is sought Options. by way of Special Resolution for the approval of the Fair Value Method “SRL Employee Stock Option Scheme – 2018” and issuance of shares under this Scheme. 17. Statement with regard to Disclosure in Director’s Report As the company is adopting fair value method, presently Therefore, your Directors recommend the resolutions there is no requirement for disclosure in director’s report. as set out at item no. 12 and 13 for your approval as However, if in future, the Company opts for expensing of Special Resolutions. share based employee benefi ts using the intrinsic value, None of the Directors, Manager, Key Managerial then the difference between the employee compensation Personnel of the Company, and any relatives of such cost so computed and the employee compensation cost Director, Manager, Key Managerial Personnel are that shall have been recognized if it had used the fair in anyway concerned or interested in the resolution value, shall be disclosed in the Directors’ report and the except to the extent of Equity Shares held by them in impact of this difference on profi ts and on earnings per share (“EPS”) of the company shall also be disclosed in the Company or the options may be granted under the the Directors’ report.’ Scheme.

ITEM NO. 14 In order to execute SRL Employee Stock Option Scheme – 2018 through trust route, the company need to make provisioning of funds to the trust so as to enable it to subscribe to the shares of the company. Accordingly Item No 14 which is proposed for approval of the Shareholders are set out in this Notice. The disclosures as per Rule 16 of the Chapter IV of the Companies Act, 2013, are as under:

1. The class of employees for whose beneﬁ t Employees who are the permanent Employees, including Executive Directors the scheme is being implemented and and Whole-time Directors, of the company, its holding and its subsidiary(ies) money is being provided for purchase or as may be decided by the Board/ Committee from time to time on such of or subscription to shares parameters as may be decided by the Board/Committee at its discretion. 2. The particulars of the trustee or Name of the Trustees:- employees in whose favor such shares 1. Mr. Mukesh Tripathi are to be registered 2. Brig. Dinesh Chandra Pant 3. Particulars of trust Name of the Trust: Surya Roshni Limited Employees Welfare Trust Address: 204, Padma Tower-1, 5 Rajendra Place, New Delhi- 110008 4. Name, Address, Occupation and 1. Name : Shri Mukesh Tripathi nationality of trustees Address : 18/75, First Floor, West Punjabi Bagh, New Delhi – 110026 Occupation : Service Nationality : Indian 2. Name : Brig. Dinesh Chandra Pant Address : 223, 2nd floor, Green Tower Apartments, Plot No. 7C, Sector 23, Dwaraka, New Delhi – 110075 Occupation : Retired Nationality : Indian 5. Relationship of trustees with promoters, None directors or key managerial personnel, if any 6. Any interest of key managerial The Key Managerial personnel and Directors are interested in the SRL personnel, directors or promoters in Employee Stock Option Scheme – 2018 only to the extent, to the options such scheme or trust and effect thereof may be granted to them if any, under the scheme.

45TH AGM NOTICE 21 SURYA ROSHNI LIMITED

7. The detailed particulars of beneﬁ ts a) To recognize and reward the efforts of employees and their continued which will accrue to the employees association with the Company. from the implementation of the scheme b) To introduce an objective component of employee compensation which would provide a direct linkage to the efforts of the employees with a measurable and widely accepted criterion i.e. the share price of the Company. The Board envisages this to act as a motivational tool for the employees of the Company. c) To keep long association with the Company. d) Employee participation in shareholding of the Company e) To provide an opportunity to the employees to develop a sense of ownership of the Company through their shareholding. f) To provide the employees an incentive to continue and strengthen their association with the Company so as to result in long term beneﬁ ts to the Company as well as the employee – shareowner. g) Bring long-term value to the shareholders. Motivate senior employees to better the Company’s performance continuously. 8. The details about who would exercise The Trust would be considered as the registered shareholder of the company and how the voting rights in respect till the date of transfer of shares to the Employees. However, the Trustees will of the shares to be purchased or not have any right to vote on the Equity Shares held by the Trust. subscribed under the scheme would be Once the shares are transferred to the Employees upon their Exercise, then exercised the Employees will be treated as the shareholder of the company and shall exercise the right to vote in respect of such shares.

In terms of the Companies Act, 2013, read with Rule 16 fi eld of Operations, Project Development and marketing of Chapter IV of the Companies Act, 2013, the approval of Network. Under his guidance the Company has achieved the Shareholders is sought by way of Special Resolution new heights and emerged as the leading organization for the approval for the provisioning of money to the Trust in the Steel Pipes and Lighting Industry. The Board has to fulfi l the requirements of SRL Employee Stock Option benefi tted from his relevant specialization and expertise. Scheme - 2018, therefore, your Directors recommend the Details on his attendance of various Board Meetings held Resolution as set out at item no.14 for your approval by during the last fi nancial year are included in the Corporate way of Special Resolution. Governance Report of the Annual Report. None of the Directors and any relatives of such director, However, in view of the amended regulation 17(1A) of the key managerial personnel are in anyway concerned or SEBI (Listing Obligations and Disclosure Requirements) interested in the resolution except to the extent of Equity Regulations, which will come into force with effect from 1st Shares held by them in the Company. However, Key April, 2019, no listed entity can continue the directorship of Managerial Personnel may be deemed as interested up to any person as a non-executive director who has attained the the amount of options/ shares that may be granted to them age of 75 (seventy fi ve) years unless a special resolution is under the SRL Employee Stock Option Scheme – 2018. passed to that effect.

ITEM NO. 15 The Board upon the recommendation of the Nomination and Remuneration Committee, in its Meeting held on 10th August, Shri Ravinder Kumar Narang having DIN -02318041 was 2018, has approved to continue to act of Shri Ravinder last appointed as Non-Executive; Independent Director of the Company for a period of 5 years from 5th September, Kumar Narang w.e.f 1st April, 2019 onwards as a Non- 2014 to 4th September, 2019 by the Shareholders in the Executive; Independent Director for the remaining period of 41st Annual General Meeting (AGM) of the Company held his tenure and recommends the same for the approval by the on 5th September, 2014. shareholders of the Company as a Special Resolution as set out at item no. 15. Shri Ravinder Kumar Narang, aged about 79 years, has been Director on the Company board since June, 2009. Except Shri Ravinder Kumar Narang, no other Director(s) and He is also a member of the Stakeholder’s Relationship Key Managerial Personnel of the Company and their relatives Committee and Remuneration Committee in the Company. is concerned or interested, ﬁ nancial or otherwise, in the said He is an Ex-Chairman of IOCL with vast experience in the Resolution.

22 45TH AGM NOTICE SURYA ROSHNI LIMITED

DETAILS PURSUANT TO REGULATION 36 OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND SECRETARIAL STANDARD 2 ISSUED BY ICSI, INFORMATION ABOUT THE DIRECTOR IS FURNISHED BELOW: Name of Director Date of Qualifi cation Nature of Name of The number Name of Committees of (DIN) Birth (No. (Relationship Expertise Companies of meetings the Companies of which of Equity with other in which he/ of the Board he/ she holds Membership/ Shares Directors) she holds attended Chairmanship held) Directorship during the year Ravinder Kumar 21-01-1939 B.E (Mech.) Possess vast He is not 4 meetings of He is not holding any Narang experience holding the Company Committee membership (No. of (No Inter-se in the fi eld of Directorship in Board / chairmanship (DIN – Shares relations Operations, any Company attended except membership in 02318041) held in the with other Project except Surya during the Stakeholder’s Relationship Company – Directors.) Development Roshni Ltd. FY-2017-18 Committee and Nomination Nil) and Marketing & Remuneration Committee Network of Surya Roshni Limited ITEM NO. 16 Shri Krishan Kumar Narula having DIN -00098124 was last However, in view of the amended regulation 17(1A) of the appointed as Non-Executive; Independent Director of the SEBI (Listing Obligations and Disclosure Requirements) Company for a period of 5 years from 5th September, 2014 Regulations, which will come into force with effect from 1st to 4th September, 2019 by the Shareholders in the 41st April, 2019, no listed entity can continue the directorship of Annual General Meeting (AGM) of the Company held on 5th any person as a non-executive director who has attained the September, 2014. age of 75 (seventy fi ve) years unless a special resolution is Shri Krishan Kumar Narula, aged about 79 years, is an passed to that effect. industry veteran and has been Director on the board of the The Board upon the recommendation of the Nomination and Company since, March 2000. He has 53 years of prolifi c Remuneration Committee, in its Meeting held on 10th August, experience in the fi eld of Banking and Finance. He is the Chairman of the Company’s Audit Committee He is an Ex- 2018, has approved to continue to act of Shri Krishan Kumar Chief General Manager from SBI Chandigarh (LHO) and is Narula w.e.f 1st April, 2019 onwards as a Non-Executive; currently working as Banking and Management Consultant. Independent Director for the remaining period of his tenure and Under his guidance the Company has achieved higher growth recommends the same for the approval by the shareholders of and emerged today as the leading organization in the Steel the Company as a Special Resolution as set out at item no. 16. Pipes and Lighting Industry. The Board has benefi tted from Except Shri Krishan Kumar Narula, no other Director(s) and his relevant specialization and expertise. Details on his attendance of various Board Meetings held during the last Key Managerial Personnel of the Company and their relatives fi nancial year are included in the Corporate Governance is concerned or interested, fi nancial or otherwise, in the said Report of the Annual Report. Resolution. DETAILS PURSUANT TO REGULATION 36 OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND SECRETARIAL STANDARD 2 ISSUED BY ICSI, INFORMATION ABOUT THE DIRECTOR IS FURNISHED BELOW:

Name of Director Date of Birth Qualifi cation Nature of Name of The number Name of Committees (DIN) (Relationship Expertise Companies of meetings of the Companies (No. of with other in which he/ of the Board of which he/ she Equity Directors) she holds attended holds Membership/ Shares held) Directorship during the Chairmanship year Krishan Kumar 01-04-1939 Masters in Prolifi c He is not 5 meetings of He is not holding any Narula Commerce experience holding the Company Committee membership (Shares from D.U in the fi eld of Directorship in Board / chairmanship (DIN -00098124) held in the & Certifi ed Banking and any Company attended except chairmanship Company – Associate of Finance except Surya during the of Audit Committee, Nil) Indian Institute Roshni Limited FY-2017-18 Stakeholder’s Relationship of Bankers Committee, Nomination & (CAIIB). Remuneration Committee and Corporate Social (No Inter- Responsibility of Surya se relations Roshni Limited with other Directors.)

45TH AGM NOTICE 23 SURYA ROSHNI LIMITED

ITEM NO. 17 & 18 1) Contribution to Provident Fund to the extent that is In view of increasing the operations of the Company and not taxable under the Income Tax Act. to further strengthen the Board, Shri. Kaustubh Narsinh 2) Gratuity payable shall not exceed a half months’s Karmarkar, was co-opted as an Additional Director of the salary for each completed year of service. Company with effect from 10th August, 2018. 3) Encashment of leave at the end of the tenure. Pursuant to the provisions of Section 161(1) and other PART-B applicable provisions of the Companies Act, 2013 and in compliance to SEBI (Listing Obligations and Disclosure The Company shall provide a car with driver and Requirements) Regulations, 2015 referred to as “Listing telephone facility at the residence of the Whole - time Regulations” and SEBI Circular and the Articles of Director. Provision of car with driver for use of Company’s Association of the Company, Kaustubh Narsinh Karmarkar business and telephone facility at the residence will not be (having DIN – 00288642) holds offi ce only up to the date considered as perquisites. Personal long distance calls of ensuing Annual General Meeting of the Company. In on telephone and use of car for private purpose shall be accordance with the provisions of Section 152, the Board billed by the Company on the Whole-Time Director of Directors proposed his appointment as Director liable to The aforesaid remuneration shall be subject to the limit of retire by rotation. 5% of the net profi ts as laid down under sub-section (1) of Shri Kaustubh Narsinh Karmarkar being in the whole – time section 197 of the Companies Act, 2013. employment, termed as Whole-Time Director and designated If the Company has no profi ts or the profi ts are inadequate as Director -HR of the Company, has been appointed on in any fi nancial year during the terms of his offi ce as the the recommendation of Nomination and Remuneration Whole-time Director, Sh. Kaustubh Narsinh Karmarkar will be Committee (NRC) by the Board of Directors of the Company, entitled to receive the above remuneration and perquisites as in their meeting held on 10th August, 2018 as Whole-Time minimum remuneration , provided that the total remuneration, Director for a period of fi ve years w.e.f 10th August, 2018 to of salary , perquisites and any other allowances shall not 09th August, 2023 on the terms and conditions as set out in the Agreement executed / to be executed between the exceed the ceiling as provided in section II of the Part II of Company and Shri Kaustubh Narsinh Karmarkar, subject to Schedule V of the Companies Act, 2013 or such other amount the approval of Members , and other concerned authority(ies), and perquisites as/is may be provided in the said schedule if necessary at the following terms : V as may be amended from time to time or any equivalent SALARY : ` 9,82,143/- per month w.e.f 10th statutory re-enactment(s) thereof. August, 2018 The Board of Directors recommends the resolution as set (CTC of ` 11,00,000 per month upto 31st out in item No.17 for the approval of the shareholders as March, 2019 with an annual increment an Ordinary Resolution and resolution as set out in item of ` 50,000 p.m in CTC w.ef. 1st April of No.18 as Special Resolution. every fi nancial year. Copy of the Agreement executed / to be executed between PERQUISITES : Perquisites will be allowed in addition the Company and Shri Kaustubh Narsinh Karmarkar along to salary. For this purpose unless the with other relevant documents related to his appointment context otherwise requires , perquisites as Whole-time Director are open for inspection at the are classifi ed into two categories: Parts Registered offi ce of the Company during business hours A and B. on any working day prior to the date of meeting. PART-A None of the Directors except Shri Kaustubh Narsinh The following perquisites shall not be included in the Karmarkar, Key Managerial Personnel or relatives of computation of the ceiling on remuneration specifi ed in Directors or Key Managerial personnel have any interest Paragraph I of Section IV of part II of Schedule V of the fi nancial or otherwise in the said resolution. Companies Act, 2013. DETAILS PURSUANT TO REGULATION 36 OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND SECRETARIAL STANDARD 2 ISSUED BY ICSI, INFORMATION ABOUT THE DIRECTOR PROPOSED TO BE APPOINTED IS FURNISHED BELOW: Name of Director Date of Qualifi cation Nature of Name of The number Name of Committees of (DIN) Birth (No. (Relationship Expertise Companies in of meetings the Companies of which of Equity with other which he holds of the Board he holds Membership/ Shares Directors) Directorship attended Chairmanship held) during the year Kaustubh Narsinh 07-02-1979 Commerce Possess vast He is holding Appointed He is not holding any Karmarkar Graduate from experience Directorship w.e.f 10th company committee (No. of Delhi University of 20 years in Gagandeep August, 2018 membership/ (DIN – 00288642) Shares in the fi eld of Services as Whole- chairmanship held in the (No Inter- Management, Limited and time Director Company – se relations Human Surya Roshni on the Nil) with other Resources and Ltd. Board of the Directors.) Planning. Company.

24 45TH AGM NOTICE SURYA ROSHNI LIMITED

ITEM NO. 19 substitution and entire exclusion of existing Articles of Pursuant to the provisions of Section 14 and all other Association of the Company applicable provisions of the Companies Act, 2013, read with The Board of Directors recommends the resolution(s) as the Companies (Incorporation) Rules, 2014 replacement set out in item No.19 for the approval of the shareholders and substitution of the existing Articles of Association of as a Special Resolution. the Company with the Articles of Association as approved Copy of the Articles of Association to be adopted are open by the Board of Directors at their meeting are in conformity for inspection at the Registered ofﬁ ce of the Company with the provisions of Companies Act 2013, during business hours on any working day prior to the date Adoption of new set of Articles of Association of of meeting. the Company in accordance with the requirement of None of the Directors, Key Managerial Personnel or Companies Act, 2013 will subject to the approval of the relatives of Directors or Key Managerial personnel have members of the Company. The same shall be adopted in any interest ﬁ nancial or otherwise in the said resolution.

By order of the Board

Registered Ofﬁ ce: Prakash Nagar, Sankhol, Bahadurgarh – 124 507 (Haryana) B. B. SINGAL Dated: 10th August, 2018 SR. V.P & COMPANY SECRETARY

45TH AGM NOTICE 25 SURYA ROSHNI LIMITED

ROUTE MAP OF THE VENUE OF 45TH ANNUAL GENERAL MEETING (AGM) OF EQUITY SHARE HOLDERS OF SURYA ROSHNI LIMITED AT BAHADURGARH (HARYANA)

Parle limited Haryana Delhi To Rohtak Surya Roshni Ltd Sankhol Village City Park Metro Station Metro Station

Mundka Metro Station By-pass Road By-pass Nangloi Rohtak Road Bahadurgarh Tikri Border NH 9 Peera Garhi Chowk By-pass Road

SURYA ROSHNI LIMITED Regd. Ofﬁ ce : Prakash Nagar, Sankhol, Bahadurgarh – 124507 (Haryana) Corporate Identity Number (CIN) – L31501HR1973PLC007543 Email : [email protected] Website : www.surya.co.in Phone : 01276-241540, Fax : 01276-241886

ATTENDANCE SLIP

Member’s Name (In Block Letters) ...... I hereby record my presence at the Forty Fifth (45th) Annual General Meeting of Surya Roshni Limited being held at Prakash Nagar, Sankhol, Bahadurgarh – 124507 (Haryana) on Friday, the 28th September, 2018.

Folio/Client ID & DP ID No ......

No. of Shares held ......

Name of Proxy (If attending for Member) ......

...... Signature of the Member/Proxy

1. Members/Proxies are requested to bring the DULY SIGNED Attendance Slip to the Meeting and hand it over at the entrance. 2. For the convenience of Members, persons other than Members/Proxies WILL NOT BE ADMITTED.

26 45TH AGM ATTENDENCE SLIP SURYA ROSHNI LIMITED

FORM NO. MGT. 11 PROXY FORM

(Pursuant to the provisions of Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014)

Name of the Member(s) : ......

Registered Address : ......

E-mail ID : ......

Folio No. / DPID & Client ID: ......

I / We being the Member(s) of ______equity shares of ` 10/- each of Surya Roshni Limited hereby appoint:

1. Name : ......

Address : ......

E-mail ID : ...... Signature : ...... or failing him / her

2. Name : ......

Address : ......

E-mail ID : ...... Signature : ...... or failing him / her

2. Name : ......

Address : ......

E-mail ID : ...... Signature : ......

45TH AGM NOTICE 27 SURYA ROSHNI LIMITED

As my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the forty ﬁ fth (45th) Annual General Meeting of the Company, to be held on Friday, 28th September, 2018 at Prakash Nagar, Sankhol, Bahadurgarh – 124507 (Haryana) and at any adjournment(s) thereof in respect of the resolutions, as indicated below :

Item Nos. Description of the Resolution ORDINARY BUSINESS 1. Adoption of Audited Financial Statements of the Company for the year ended 31st March, 2018 and the Report of Directors’ and Auditors thereon. 2. Declaration of Equity Dividend. 3. Re-Appointment of Sh. Raju Bista (holding DIN – 01299297) who retires by rotation. SPECIAL BUSINESS 4. Consent for Mortgage of Properties for Loan and Working Capital limit u/s 180(1)(a) of the Companies Act, 2013. 5. Increase in Remuneration of Shri Jai Prakash Agarwal (DIN – 00041119) as whole-time Director for the rest of his tenure in compliance with the provisions of the Companies Act, 2013. 6. Increase in Remuneration of Shri Raju Bista (DIN – 01299297) as Managing Director for the rest of his tenure in compliance with the provisions of the Companies Act, 2013. 7. Ratifi cation of Remuneration of Cost Auditors M/s R J Goel & Co. for the F.Y – 2018-19, in compliance to the the provisions of the Companies Act, 2013. 8. Appointment of Shri Sunil Sikka (DIN – 08063385) as an Independent Director of the Company for a period of fi ve years as per the provisions of the Companies Act, 2013. 9. Appointment of Shri Vinay Surya (DIN – 00515803) as Director of the Company liable to retire by rotation as per the provisions of Section 152 of the Companies Act, 2013. 10. Appointment and remuneration of Shri Vinay Surya (DIN – 00515803) as Whole-time Director for a period of fi ve years as per the provisions of the Companies Act, 2013. 11. Approval for increase in borrowing limits u/s 180(1)( c) of the Companies Act, 2013. 12. Approval of Stock Option Scheme for issue of ESOPs to employees of the Company as per the provisions of the Companies Act, 2013. 13. Approval for creation of Trust namely Surya Roshni Limited Employees Welfare Trust. 14. Approval for funding to Surya Roshni Limited Employees Welfare Trust for implementation of SRL Employee Stock Options Scheme -2018 as per the provisions of the Companies Act, 2013. 15. Approval for continuance to act as an Independent Director on or after 1st April, 2019 of Shri Ravinder Kumar Narang (DIN – 02318041) on attaining the age of 75 years or more as per the provisions of the Companies Act, 2013 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. 16. Approval for continuance to act as an Independent Director on or after 1st April, 2019 of Shri Krishan Kumar Narula (DIN – 00098124)on attaining the age of 75 years or more as per the provisions of the Companies Act, 2013 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. 17. Appointment of Shri Kaustubh Narsinh Karmarkar (DIN – 00288642) as Director liable to retire by rotation as per the provisions of the Companies Act, 2013. 18. Appointment and remuneration of Shri Kaustubh Narsinh Karmarkar (DIN – 00288642)as Whole-time Director for a period of fi ve years as per the provisions of the Companies Act, 2013. 19. Approval for Adoption of new set of Articles of Association of the Company in substitution of existing Articles of Association of the Company as per the provisions of the Companies Act, 2013.

Signed this ...... day of ...... 2018 Afﬁ x Re.1/- Revenue Signature of the Member(s) : ...... Stamp Signature of Proxy holder(s): ...... Stamp

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Ofﬁ ce of the Company, not less than 48 hours before the commencement of the meeting.

28 45TH AGM NOTICE Future Perfect!

SURYA ROSHNI LIMITED Annual Report 2017-18 You will come across…

Statutory Reports Management Discussion and Analysis 25 | Board’s Report 41 | Corporate Governance Report 75

For online version of this annual report, visit: Investor Information www.surya.co.in/annual-report/ Or simply scan: Market capitalisation as on March 31st, 2018: ` 2,076 crore

BSE Code: 500336

NSE Symbol: SURYAROSNI

Forward looking statement This report contains forward-looking statements about the business, financial Dividend for 2017-18: performance, skills and prospects of the Company. Statements about the plans, intentions, expectations, beliefs, estimates, predictions or similar expressions for ` 2.00 per Equity Share future are forward-looking statements. Forward-looking statements should be viewed in the context of many risk issues and events that could cause the actual performance to be different from that contemplated in the Directors’ Report and AGM Date: 28th September, 2018 Management Discussions and Analysis Report, including but not limited to, the impact of changes in oil, steel prices worldwide, technological obsolescence and domestic, economic and political conditions. We cannot assure that outcome of AGM Venue: Regd. Office: Prakash Nagar, this forward-looking statements will be realised. The Company disclaims any duty to update the information given in the aforesaid reports. Sankhol, Bahadurgarh – 124507 (Haryana) With improved business environment and upbeat consumer sentiments, the nation is on track to achieve a sustainable growth going ahead.

Prudent macroeconomic policies, a new inflation-targeting framework, energy subsidy reforms, fiscal consolidation, higher quality of public expenditure and a stable balance of payment situation are some of the measures that have strengthened the country’s responsiveness to uncertainties.

Amidst this backdrop, Surya Roshni is perfectly positioned to leverage the future growth potential. GST implementation has further strengthened its presence being in the organised space. The Company’s business segments – Steel Pipes & Strips and Lighting & Consumer Durables – will largely benefit from the strong macroeconomic indicators. Both the segments are heading towards accomplishing a business model that is capable of generating sustainable individual values.

Strong infrastructural and housing opportunities, favourable Government initiatives like National Steel Policy 2017, ‘Housing for All’, ‘Make In India’, Smart Cities, railways & airport modernisation, coupled with expansions across oil and gas pipelines, city gas distribution and water transportation will drive strong demand for the Company’s steel pipes & strips segment.

The future potential of the lighting segment is equally strong. Government’s increasing awareness drive about replacing the 14 Million conventional street lights with energy efficient LEDs along with its ambitious plans of electrifying 40 Million households across rural and urban India through initiatives like Saubhagya Yojna (Bijli Har Ghar) will drive strong future LED demand. Besides, higher disposable incomes and customer aspirations also play a key role in generating demand for the Company’s lighting & consumer durable products. The Company’s completely backward integrated facilities will be crucial in playing a key role in this segment.

Promising industrial optimism along with the Company’s readiness to embrace the hidden opportunities, leveraging its key USP of providing quality and value for money, gives a visibility of a strong and vibrant future going ahead.

`3,617 crore `1,395 crore Gross revenues from steel Gross revenues from lighting pipes and strips segment & consumer durable segment

Infrastructure Housing Urban Railway Airport Agriculture Water Transportation City Gas Oil and Gas Transportation Fire Fighting Smart City Street Lighting Strong foundation for a sustainable future

Malanpur Plant, Gwalior (M.P.) R&D Centre, STIC (Noida)

Anjar Plant, Kutchh (Gujarat) In lighting & consumer durable segment, Surya Roshni Limited is engaged in manufacturing of energy-efficient LED lights, conventional lighting, fittings, fans and home appliances products. In steel pipes & strips segment, the Company manufactures ERW Steel Pipes (GI, Black, Hollow section), API & Welded Spiral Pipes, 3LPE Coated Pipes and CR sheets.

Established in 1973, the Company has spearheaded the steel tube & pipe industry, catering to the need of diverse technological revolution and evolved as one of the fully industries such as agriculture, infrastructure, oil & gas and integrated steel pipes, lighting and consumer durable construction sectors. It is India’s largest manufacturer of conglomerate with over ` 5,000 crore turnover. The ERW GI Pipes and largest exporter of ERW Pipes. The steel Company’s brands – ‘Prakash Surya’ and ‘Surya’ are ranked pipe products for oil & gas sector are also approved by the as one of the most respected and trusted brands for steel reputed API (American Petroleum Institute). In 1984, Surya Roshni ventured into lighting operations and seamlessly pipes and lighting products in India and are exported across transitioned from being a leader of conventional lamps 50 countries globally. It has gained strong market reputation manufacturer to one of the leading LED brands in the with best-in-class quality offerings across the Company’s lighting industry. It is working in tandem with the India’s businesses. sustainable and economic goal of lighting every house with The Company is amongst India’s market leaders in the ERW low cost and energy-efficient lights.

50+ 3,614 100% 5 years+ `5,012 crore Export across Employees as on Backward integrated Association with Revenue from countries globally 31st March, 2018 over 50% of lighting operations distributors

2 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

In 2014-15, Surya Roshni strategically forayed into The Company has a state-of-the-art manufacturing related products like fans and home appliances with large facilities across the states of Haryana, Madhya range of quality product offerings at affordable selling Pradesh, Andhra Pradesh, Gujarat and Uttarakhand. prices, providing smart and user-friendly interface. The Besides, it also has an advanced lighting research widespread marketing network of 2,500 distributors and and development centre (R&D), Surya Technology and 2.5 lakh retailers / dealers has allowed to mark a Pan-India Innovation Centre (STIC) at Noida (NCR). presence.

7Ps that make the Company Future Perfect!

Professionalism Vision Validation of promise and delivery, driving the Committed towards a better Company to become better each day. tomorrow

Product Development “To be the largest global enterprise Deliver innovative and energy-efficient offering which delivers optimised solutions to customers. to its consumers and value to its stakeholders. To provide the Productivity and Perfection best steel pipe, CR strip, lighting Efficient to deliver more with better capacity utilisation and perfection with higher & consumer durable products and economies of scale. technology for markets across the world.” Promotions Enhance branding and visibility of the Company’s brands ‘Prakash Surya’ and ‘Surya’.

Performance Evaluation Mission Regularly monitor the outcomes and evaluate the strategies for a sustainable future. Energising lives and beyond “To be a leader by consistently Payback exceeding the consumer demands, Ensure faster ROI on capex through capacity rationalisation and enhanced shareholders’ upgrading technology, making value-creation. quality products, building long-term relationships with all our customers, Profitable Growth partners, associates and employees.” Strengthen revenues, optimise cost with higher EBITDA, ROE and ROCE.

`349 crore `243 crore `108 crore 12.54% 10.81% EBITDA Cash Profit PAT ROCE ROE

EBITDA: Earnings before Interest, Tax, Depreciation and Amortization | PAT: Profit After Taxes | ROCE: Return on Capital Employed | ROE: Return on Equity

ANNUAL REPORT 2017-18 3 Diversified product offering At Surya Roshni, the Company’s product offerings across both the segments that find its applications across the areas having strong future growth potential. Lighting

4 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Consumer (Trade) Luminaire Business Group (LBG)

LED lamps Indoor commercial series

LED downlighters Industrial series

LED fittings Roadway lighting series

FTL fittings Flood lighting series

CFL Landscape lighting series

GLS lamps Solar lighting series

Value-added offerings like colour-changers Accessories and auto-dimming HID lamps

Light sources

ANNUAL REPORT 2017-18 5 Fans

Ceiling fans (includes value-added products like dust-free and energy-efficient BLDC fans)

Table, pedestal and wall fans (TPW)

Domestic & Industrial exhaust fans

6 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Home Appliances

Food preparation & cooking

Juicer, mixer & grinder

Max chop chopper

Glass cooktop

Induction cooktop

Sandwich maker/toaster

Pop-up toaster

Garment care

Dry iron

Steam iron

Heating appliances

Storage water heater

Instant water heater

Immersion water heater

Climate control

Air cooler

Oil filled radiator

Heat convector

Halogen heater

Quartz heater

ANNUAL REPORT 2017-18 7 Steel pipes and strips

ERW Steel Pipes (GI, Black, Hollow section)

Applications:

Plumbing, irrigation and agriculture Fire-fighting applications Water transportation pipelines Casing and tubing Industrial applications Power plants (ash and water handling systems) Scaffolding and structural purposes Urban development like airport terminals, metro stations and railway stations Construction – buildings and stadiums Electric pole and telecom towers Green houses Building material Engineering and architectural structures

API & Welded Spiral and 3 LPE Coated Pipes

Applications:

Natural gas, oil pipelines Crude refinery - cross country pipelines Oil well casing City gas distribution Water pipelines – mains, sewerage, industrial water lines and plant piping Piping pile foundation for high-rise buildings

CR Sheets / Strips

Applications:

Auto components Motor stamping Furniture and fittings Domestic appliances Drums and barrels Cycle rims Umbrella tubes and rips Engineering applications

8 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Reaching out to the lighting customers

Strong marketing and secondary sales network that ensures effective promotions Distribution network backed by wide product range, strong R&D and quality management teams to develop in-house solutions for specific micro-markets and resolve issues in a timely manner Decentralised branch and depot networks that helps in quick logistics movement, prompt delivery and customer satisfaction Strong trade network and retail outlets supports enriching product baskets and scaling up of revenues 300+ 2,500+ 2,50,000

RTFs Distributors Retailers / Dealers

Distribution penetration Revenue by region

Rural 53% East 17% West 25% Tier II 29% North 28% Metro cities 18% South 30%

ANNUAL REPORT 2017-18 9 Pan-India presence

Branch Network

North Zone

Dehradun Delhi Ghaziabad Jaipur Lucknow Ambala Corporate Office, Varanasi Zirakpur New Delhi

R&D Centre STIC, East Zone Noida Bhubaneshwar Guwahati Kolkata Patna Ranchi Siliguri Steel Pipe & Strips Plants – Bahadurgarh (Haryana) West and Central Zone – Malanpur, Gwalior (M.P.) Ahmedabad Indore Mumbai – Hindupur (A.P.) Jabalpur Nagpur Pune Raipur – Anjar, Kutchh (Gujarat) South Zone Lighting Plants Bengaluru Chennai Coimbatore – Kashipur (Uttarakhand) Hubli Kochi Madurai Vizag – Malanpur, Gwalior (M.P.) Secunderabad Vijayawada

10 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Milestones of success 2018 2017 Completed merger of associate company Commissioned New Steel Pipe Plant at Hindupur Surya Global Steel Tubes Limited (SGSTL) (A.P.) in March 2017; Expanded further to 1,50,000 with Surya Roshni Limited MT in December 2017

2015 2014 Launched Surya Home Appliances Launched Surya Fans Commenced production of LED products at the Kashipur plant 2012 2010 Commenced operations at the STIC (R&D) Set up of Steel pipe Plant at Malanpur, Gwalior (MP) centre at Noida for energy efficient LED A new world-class pipe unit started production at lights Anjar (Kutchh), Gujarat (e-SGSTL Unit) PVC plant became operational

2006 1998 Installed CFL unit at Malanpur, Gwalior (MP) Asia’s largest ribbon glass plant started with annual capacity of 400 Million GLS and 25 Million FTL shells

1994 1992 Started the new modern glass plant Started commercial operations of the second lighting plant at Gwalior (MP), production of filament for GLS and FTL commenced

1991 1989 Commenced production of CR strips Commenced production of HPSVL and energy- efficient 26mm FTL

1984 1980 Started the first lighting plant at Kashipur Started the Galvanizing plant

1973 Set up steel pipes plant at Bahadurgarh

ANNUAL REPORT 2017-18 11 Financial performance snapshot

Revenues From EBITDA PBDT – Cash Profit Operations (` Crore) (` Crore) (` Crore)

5,011.76 348.59 243.43 313.90 201.18 4,181.03

244.23 3,196.50 226.82 3,070.84 147.80

117.82

2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18

PAT EPS Net Worth (` Crore) (`) (` Crore)

19.86 108.04 1,047.32 950.92 86.28 15.86 14.40

12.34 691.46 63.10 635.02 54.09

2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18

12 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Lighting and Interest Coverage ROE Consumer Durables: Ratio (%) Product-wise revenue

1.66 10.81 1.50 9.61 9.63 8.86

1.14 1.18

LED Lighting 49% Conventional Lighting 33% Consumer Durables/PVC 18%

2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18

Debt Equity Dividend Steel Pipes and Strips: (`) Product-wise revenue

2.00 1.49

1.29

1.13 1.50 1.05

1.00 1.00

GI Pipes 35% Structural Pipes 27% CR Sheets 14% Black Round Pipes 13% API & Spiral Pipes 11% 2014-15 2015-16 2016-17 2017-18 2014-15 2015-16 2016-17 2017-18

Notes: 1. Figures of FY 2018 and FY 2017 are of merged entity 2. Revenue from operation under IND AS for FY 2018, FY 2017 and FY 2016 are net off discount, rebate and allowances and under IGAAP for FY 2015 were before discount, rebate and allowances, hence to the extent not comparable. 3. As per requirement of IND AS Revenue for the period(s) up to 30th June, 2017 were reported inclusive of Excise Duty and the revenue from the 1st July, 2017 onwards are reported net of GST.

ANNUAL REPORT 2017-18 13 Chairman’s message

With a vision to emerge Dear Shareholders, Warm greetings to all of you! as a value-creator, I am always amazed by the speed of innovation and firmly believe that change is the only constant. Yet each year, the pace of change we are significantly only accelerates. As we get into this new financial year, let me briefly share with you how Surya Roshni as an organisation is evolving by improving our perfecting its strategies for the great future ahead. Over the years, we have continually displayed our allegiance to the nation and supported products and process its ongoing needs, while also laying foundations and strategies in line with the nation’s long-term vision, backed by resilience and a excellence. preparedness for every contingency. Favourable macro-economic factors The Indian growth story has never been so exciting. Our economy retained its recognition as ‘the fastest growing major economies’ by registering 6.7% GDP in 2017-18. The resilience to change is clearly reflected in this growth, as the country successfully overcame the temporary slowdown phase post-demonetisation and Goods and Service Tax (GST) implementation. Today, the Indian economy is at a stage of maintaining a steady 7-8% growth and is on course towards becoming the world’s third largest economy by 2030 with GDP worth USD 10 Trillion.

Good days are ahead and lot of good work is happening in the country. The Government is actively supporting the domestic manufacturing industry through its support to the home-grown companies by way of implementing favourable business policies. Strategic initiatives such as the implementation of National Steel Policy 2017 and ‘Make In India’ initiative will provide impetus to the overall economic growth and development. The GST implementation will further negate

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competition from unorganised players in the steel sector team at Surya Technology & Innovation Centre(STIC) at and lighting segment. This initiative will help us in leveraging Noida – an advanced state-of-the-art lighting laboratory upon the additional business share from unorganised and research centre. This would drive the values. players as well as strengthen the industry operations. Care for people Favourable industry dynamics The passion and commitment of our people are key enablers Our optimism is further driven by the opportunities from our of our success. Our team strength is magnified by the end-use industries. Our steel tubes and pipes segment is experience of our leadership teams and their daily execution expected to reap rich benefits from the Government’s vision of our plans. The combined excellence of our people and our of increasing the natural gas usage in households from 6.5% world-class operating platform enables us to fully invest to 25% in the next ten years. Besides, several new tenders are in our strong brands and product innovation pipeline. The in pipeline to build over 12,000 kms of pipelines across the resulting combination of brand strength, product innovation nation. Rapid construction activities, revival in the real estate and best cost structure is a winning formula which has segment and affordable housing, shall further contribute helped us deliver consistent performance over the years. towards the demand of our products. And lastly, but most importantly, is the demand from the rural segment. With Care for community Government’s rural-centric policies in the recent budget, lots As a responsible corporate, community development is of activities in the areas of irrigation and construction will be inherited in our core value system. We have been an active driving the demand for our tubes and pipes. contributor in the social and economic development of the weaker communities through various community building The Indian lighting industry is expected to witness a CAGR programmes in the field of health, skill development and of 17% by FY 2020. The industry has evolved rapidly, moving education through our CSR arm – Surya Foundation. We from using conventional lighting products to LEDs. This have been committed towards creating a developed yet transition is driven by an increasing number of government sustainable world through conscious efforts in elevating the initiatives for energy conservation, 100% rural electrification level of weaker sections of the society. We have also enabled through EESL, rising consumer awareness about energy- preservation of the scarce energy resource as a commitment efficient LEDs and innovative products offered by the industry to give back to the society, hence the entire range of our that are in sync with the overall trend of digitisation. All the products is energy efficient and manufactures using world’s conventional products such as lamps, tubes, downlighters, best technology. Further, we are committed to empower the street lights, outdoor lighting products are being changed lives of as many underprivileged people through our health- to LED-based lighting products. Most importantly, the based and other social initiatives. prices have settled in 2017-18, which are now more or less stabilised. The important thing to note here is the change in Care for stakeholders - framework for long-term value the customer perception about lighting. It has now become creation more of a designer product. Higher disposable incomes Our long-term value creation framework is built upon a strong have further led to increase in number of points per home. foundation. We are a consistent dividend-paying company The shift in perception will create more value for the lighting with a vision to emerge as a global value-creator. We are industry. significantly improving our products and process excellence. Our preparedness The result is business resilience, strong efficiencies, high customer satisfaction and loyalty. We remain confident in As one of India’s most respected and trusted brands for our ability to effectively manage our business regardless of steel pipe and lighting products, we are making rapid strides in line with the ‘Make In India’ vision of the Government. the operating environment and expect to continue delivering We have been consistently meeting the customer’s long-term value for all of our shareholders. expectations through our world-class quality products. As we look beyond, we are all set to explore the multiple An innovation-driven approach has enriched our product avenues for profitable growth. portfolio, enhanced our clientele, strengthened our brands In closing, I express deep appreciation for our Company’s across diverse industries and de-risked our business model. Board of Directors and professional & committed workforce. We have already built up sufficient capacities across both our businesses that allow us to play the volume game. The I also extend my sincere gratitude towards our stakeholders, upcoming 3LPE coated pipe manufacturing unit at Anjar, bankers and customers for the deep faith they have imposed for pipe size between 4” to 64”, shall further strengthen on us. I look forward towards your continuous association our positioning in the oil and gas segment. We have the in the forthcoming years and co-create a sustainable future. advantage of being backward integrated in lighting as all Best Wishes, the key components and assemblies are manufactured in-house. We have the desired capabilities and capacities in place to meet the volumes. Our smart and innovative Jai Prakash Agarwal products are a result of the continuous efforts of our R&D Chairman

ANNUAL REPORT 2017-18 15 From the Managing Director’s desk

Dear Shareholders,

Each year we leave behind an important demonstration of our success story. A company with solid capabilities, right capacities and a sound strategic direction – is Surya Roshni of today, the largest GI Pipe manufacturer and the second largest lighting products manufacturer. We are evenly poised to leverage the future opportunities and drive positive outcome for our organisation, customer satisfaction and stakeholders’ value-creation.

Performance to ponder In the year gone by, your company demonstrated resilient performance despite market challenges from demonetisation and GST implementation. We maintained our strong balance sheet through our disciplined and conservative financial policies and our efficiency measures. We are happy to report that our gross revenues crossed ` 5,000 crore landmark during the year.

Our operational revenues from steel pipes and strips segment reported 36% growth, with 20% YoY increase in volumes. Cash profits and pre- tax profit increased 31% and 74%, respectively. The growth was largely driven by our commercial operations of Hindupur plant, operational efficiencies, supply to oil and gas sectors, strong brand premium as well as the merger of e-SGSTL (an associate company) which led to enhancement of our steel and pipes business. It is interesting to note that our newly set-up state-of-the-art ERW pipe manufacturing unit at Hindupur (for production of GI, black and section pipes) started yielding positive results from the very first year itself. We achieved economies of scale at lower capital cost, savings in logistics We are evenly poised cost and improved our market share in the premium market of South India. Looking at this to leverage the future success, we have initiated a further expansion of 1,50,000 MT in this unit. Our Anjar unit opportunities and successfully supplied 3LPE coated API pipes of ` 174 crore against the order of ` 314 crore drive positive outcome (excluding taxes) to IOCL. Besides, there has been a satisfactory progress in setting up of our for our organisation, captive 3LPE coated API pipe manufacturing unit and are all set to commence with the commercial customer satisfaction and production during the second quarter of 2018-19. This will also lead to higher capacity utilisation stakeholders’ value-creation. of spiral and API pipe mills in the coming years.

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Our growth in the lighting and consumer durable segment ` 18,000 crore and over the next 5 years, it is expected rebounded during the last quarter of FY 2017-18. The GST to reach ` 40,000 crore; thanks to the dynamic and disruption led to de-stocking by several dealers across quick transformation of conventional lighting source the country. We supported our trade partners by implying to LED owing to its energy efficiency quotient. Besides, training and consultation to bring the sales back on track. the Government’s thrust on electrification, ‘Bijli Har As such, we ended the year with 8% increase in revenues Ghar Yojna’ to electrify over 40 Million families across from operations, 11% increase in cash profits and 14% rural and urban areas and ‘Smart Cities’ project will increase in pre-tax profits. During the year, we launched continue to drive demand for LED street lights, bulbs several innovative LEDs like dynamic colour changing and lighting products. I am happy to share that we lamps, app-controlled lights, dimming lights, motion- have been procuring significant orders from EESL, sensors and solar lights, among others. Besides, we were which is the biggest testimony of our quality and very much prepared for the price erosion in LED and have abilities; there are several EESL tenders in the pipeline built sufficient capacities for the volume play going ahead. which will come up in the second quarter of 2018-19 During the year, we augmented our fans portfolio by Our fans and appliances business has been launching higher premium fans range with automatic colour strategically leveraging our electrical outlet network changing LED Lights, electroplated finish, aero-dynamically of over 250,000 counters, leading to good results designed blades and wood-finish aluminium blades. We over the past two years; these are the ‘fast moving also introduced fans with anti-dust technology, which electrical goods’ and hence promotional expenses attract 50% less dust than a regular fan and also developed are increased by 5-10% annually; we will also explore a 32W super-efficient BLDC fan, which saves around 60% new business segments such as Canteen Stores energy as compared to conventional fan. We have also Department, Central Police Canteen, E-commerce and introduced new models of energy-efficient and BEE five- Modern Retail format star rated fans. The Company is gradually adding different types of consumer durables to its existing product basket The value-creation strategies which gives a competitive advantage and provide one-stop solution to the customers. We have introduced many new Going ahead we aim to create value by doubling our products under the Home Appliances segment, with special revenues and EBITDA for both the segments. These focus on glass cooktops, water heaters, mixer grinders, would be achieved through: juicers and irons. Full capacity utilisation of our existing capacities and the future capacities post expansion; no further major Bullish on opportunities capex is needed At Surya Roshni, we are extremely bullish about the future Upgrade technology, focus on modernisation and industry potential that will drive revenues across both our automation to enhance efficiencies, de-bottlenecking business segments. Consider the following facts: the capacities In the oil and gas segment there is an investment Continue to be a low-cost producer which will lead to opportunity of ` 1 lakh crore for the expansion of API strengthening of ROCE, ROE, overall profitability and cross country line; out of these, 50% is for the pipeline asset utilisation augmentation Manage and expand our existing dealer and distributor This will be followed by city gas pipelines, necessitating network to under-penetrated areas the need for smaller pipe for interconnectivity There is a tremendous scope for diverting water from We now have a strong foundation and are well-poised rivers and canals to the dry interior areas which will to achieve the new heights with healthy growth. We necessitate the demand for water pipelines will continue to leverage our global operating platform, Our upcoming 3LPE coating unit will enhance our market consumer-relevant innovations and unmatched brand share in oil and gas pipelines and strengthen our exports portfolio. Thank you for your continued support and Strong growth in the automobiles segment, will continue your investments in our company. We look forward to to drive demand for our CR strips furthering our legacy of long-term value creation for our shareholders while improving the lives of consumers Low per capita steel consumption of 61 Kg in India, as throughout the world. compared to world average of 208 Kg, will gradually improve owing to Government’s increasing thrust Best wishes, towards the country’s infrastructural development, leading to demand for pipes Raju Bista The LED industry size is at present estimated to be Managing Director

ANNUAL REPORT 2017-18 17 Leading the way Board of Directors

Shri Jai Prakash Agarwal Executive Chairman

An industry veteran, Shri Jai Prakash Agarwal has been the Promoter and Executive Chairman of the Company since inception. He is a graduate from the University of Calcutta. He inherits the excellent entrepreneurship skills form his father Shri B. D. Agarwal (Former Chairman) and his exceptional managerial skills have helped the Company in transforming from a small steel unit into one of the most reputed and successful business conglomerate of the country today.

Shri Raju Bista Managing Director

Shri Raju Bista is the young and dynamic Managing Director of the Company. He has done Executive Masters Programme in Business Administration with specialisation in Marketing Management from National Institute of Business Management. He has been the driving force for propelling the growth engine and yielding profitable results for the Company. Under his dynamic leadership, Surya Roshni has successfully forayed into the fans and home appliances segment. His discipline, dedication, visionary power and relentless efforts have helped in achieving the holistic growth and development of the Company. He is also the Vice President of ELCOMA.

Smt. Urmil Agarwal Woman Director

Smt. Urmil Agarwal, wife of Shri Jai Prakash Agarwal (Executive Chairman) holds the position as Woman Director in the Company. She has been providing her valuable assistance in the business from past 39 years. She is having sound business acumen and understanding of both the businesses of the Company.

Vinay Surya Whole-time Director

Shri Vinay Surya is an additional whole-time director appointed on the Company board w.e.f. 18th May, 2018. He possesses vast experience of over 20 years in marketing, export, commercial, financial and operational fields. He has done an MBA from Swinburn University, Australia.

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T S Bhattacharya Independent Director

Shri T S Bhattacharya is a Director on the Company Board since 2011. He is an M.Sc in Nuclear Physics and holds PG Diploma in Management Science from Jamnalal Bajaj Institute of Management, Mumbai. In his illustrious professional career of 45 years, he has served significant management positions like the MD of SBI and many more. He is also onthe Board of Directors of Jindal Stainless Limited, IDFC Securities Limited, IDFC Projects Limited, Nandan Denim Limited, Uflex Limited, Bajaj Energy Limited and Sharven Consultancy Pvt. Limited. Further, he is also holding the position of Associate at Indian Institute of Bankers.

Ravinder Kumar Narang Independent Director

Shri Ravinder Kumar Narang has been a Director on the Company Board since June, 2009. He is also a member of the Remuneration Committee in the Company. He had completed his B.E (Mech) from the University of Roorkee. Presently, he is a Distinguished Fellow of The Energy & Resources Institute (TERI) and extending his expertise in the areas of Sustainable Development Outreach, Corporate Social Responsibility & Environment. He has vast experience of over 57 years in the field of Operations, Project Development and Marketing Network. He has also served as a full-time Director in the Reliance Petroleum Limited and as an Advisor, post the merger of Reliance Petroleum with Reliance Industries Limited. He has also acted as an Advisor of established groups for the feasibility study and project development in the area of Coal Bed Methane, Refinery, Liquefied Natural Gas (LNG) terminal and development of marketing network. He is an Ex-Chairman of the Indian Oil Corporation Limited, Indo-Mobil Limited and Indian Oil Tanking including many others.

K.K. Narula Independent Director

Shri K.K. Narula is an industry veteran and has been a Director on the Board of the Company since March 2000. He has done M.Com from the University of Delhi and also a Certified Associate of Indian Institute of Bankers (CAIIB). He has 54 years of prolific experience in the field of Banking and Finance. He is also the Chairman of the Company’s Audit Committee. He is retired as the Chief General Manager from SBI Chandigarh (LHO) and is currently working as Banking and Management Consultant.

Sunil Sikka Independent Director

Shri Sunil Sikka, a post graduate in Management (FMS-Delhi) and an Ex-President of Havells (India) Limited and ELCOMA. He has been appointed as an additional independent Director on the Board of the Company w.e.f. 12th February, 2018. During his illustrious career he led multiple initiatives to accelerate growth in marketing of consumer electrical and lighting in India. He is also a Director in Sudhir Power Limited.

ANNUAL REPORT 2017-18 19 Board of Directors (contd...)

Sudhanshu Kumar Awasthi Independent Director

Shri Awasthi has been appointed as an Independent Director of the Company in September, 2014. He has a degree in Business Administration from Lucknow and has also completed PG Diploma in Bank Management from the National Institute of Bank Management (NIBM), Pune. He is also a Certified Associate of the Indian Institute of Bankers, Mumbai (CAIIB). His illustrious professional experience of 52 years includes serving the key positions like General Manager of Punjab National Bank and Managing Director of PNB Capital Services Limited. Deputed as Senior General Manager in PNB Core Management team, he headed functions such as HR, IT, Credit, Treasury, Internal Audit, Priority Sector and Management Advisory Services.

Surendra Singh Khurana Independent Director

Shri Khurana is an engineering graduate BE (Mech.) from Roorkee and also holds diploma in Advance Leadership Programme from the Stern Business School, New York, US. He has also completed Management Development Programme from IIM Ahmedabad. He is a Fellow member of the Institute of Engineers, Life member of the Institute of Rail Transport, Life Member of AI MA, Senior Member of IEEE /USA, Life member of the Institute of Railway Electrical Engineers (IREE) and member of the Indian National Academy of Engineers (INAE). He has 41 years of experience in Administrative, Corporate, Managerial and Technical domains in the Indian Railways. He has also served the key positions of Indian Railways such as Chairman of Railway Board and Ex-officio Principal Secretary to the Government of India, Chairman of IRCON International Limited, Chairman of Dedicated Freight Corporation of India Limited (DFCCIL), General Manager of Eastern Railway & East Coast Railway. He is awarded with the Life Time Achievement Awards from Institution of Engineers, Distinguished Alumnus Award 2009 from IIT Roorkee and Eminent Engineers Award from IET/UK.

Shivani Singla Director

Smt. Shivani Singla, positioned as a General Manager in IDBI Bank Limited, was nominated as Director from 11th December, 2017. She has done her Masters in Management studies from BITS, Pilani. Her prolific career of 20 years includes hands on experience and in depth knowledge of Corporate finance and SME financing.

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Key management personnel

Shri R. N. Maloo Executive Director & Group CFO

A qualified Chartered Accountant with 32 years of experience in Corporate Affairs, Finance, Commercial and Taxation. Before joining Surya, he has also held CFO position in various large corporates and has partnered reputed CA Firm.

Shri Tarun Baldua CEO – Steel Operations

A qualified Chartered Accountant with over 32 years of experience in Commercial, Operations and Administration of various businesses across industries.

Shri Ramanjit Singh CEO – Lighting Operations

A qualified MBA with 31 years of experience in operational expertise. He has served on the post of Sr. Director at Philips India. He led multiple initiatives to accelerate innovation and growth in lighting industry.

Shri B. B. Singal Sr. Vice President & Company Secretary

A qualified Chartered Accountant, Company Secretary and Cost Accountant having a rich experience of over 23 years in Secretarial Function, Corporate Laws, Accounts, Direct Tax & Investor Relationships.

ANNUAL REPORT 2017-18 21 Caring for the future of the community

The Company lives by its core values of improving the quality of life for the communities and building trust. It is of the opinion that there is an underlying connect that binds all of us, beyond business. This community connect is central to the Company’s corporate philosophy and operational ethos. Nurturing this connect remains high on the Company’s progressive agenda, on translating its CSR agenda into on-ground programs and initiatives. While corporate social responsibility is an ongoing campaign, the Company continues to strengthen its community connect through proactive measures year after year. Upholding the legacy of Surya Group, the Company has invested in varied community development programmes across its operations and is largely focussing on the fields of health, skill development and education. The responsibilities are discharged through the Surya Foundation.

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Projects: Adarsh Gram Yojna The Company has established “Bal Vikas Kendras” in the remote and far-flung interior rural villages across 15 states in India. These centres focus on imparting moral education and values and train the young school going children and drop outs. They teach yoga and meditation and inculcate the spirit of patriotism in them to develop them into responsible citizens of the country.

Within a short duration, massive improvement has been observed in the overall behaviour of the children They are doing extremely well in their exams with overall improvement in their conduct and behaviour. Surya feels proud to be a part of this endeavour.

Development of preventive and cost-effective health systems of naturopathy and yoga Promoting good health is the need of the day. We understand this reality, and have been extremely proactive in promoting naturopathy and yoga through naturopathy wing, the International Naturopathy Organization (INO) across India. In pursuance of same, the Foundation has organised various Naturopathy awareness camps and seminars throughout the year across various Indian states. The foundation also conducts Naturopathy Doctors and Management Training Programme for practitioners from India as well as abroad.

Ideal Village Projects with emphasis on Literacy and Personality Development of Youth Youth is the foundation of a nation’s future. We are engaged in developing the overall personality of youth through various personality development programmes. The regular training sessions on personality development has initiated remarkable changes in the behaviour of youth.

`2.04 crore

CSR spends in 2017-18

ANNUAL REPORT 2017-18 23 Corporate information

Registered Office STATUTORY AUDITORS Surya Roshni Limited Ashok Kumar Goyal & Company Prakash Nagar, Sankhol, Chartered Accountants Bahadurgarh - 124507 (Haryana) Corporate Identity Number COST AUDITORS (CIN ) - L31501HR1973PLC007543 R. J. Goel & Co. Website : www.surya.co.in Phone : 01276 - 241540 BANKERS Fax : 01276 - 241886 1. State Bank of India 2. HDFC Bank Limited HEAD OFFICE 3. Bank of Baroda Padma Tower - 1, 2nd Floor, 4. Canara Bank 5 Rajendra Place, New Delhi - 110008 5. Punjab National Bank email : [email protected] 6. IDBI Bank Limited 7. DCB Bank Limited REGISTERED OFFICE AND WORKS - STEEL DIVISION 8. Export-Import Bank (EXIM) Rohtak Road, Sankhol Bahadurgarh -124507 (Haryana) Audit Committee email : [email protected] Shri Krishan Kumar Narula, Chairman Shri Tara Sankar Bhattacharya, Member WORKS - STEEL DIVISIONS Shri Surendra Singh Khurana, Member Plot No. P-1 to P-20, Ghirongi Industrial Area, Malanpur, District Bhind (Madhya Pradesh) Stakeholder’s Relationship Committee 57, Golapuram Industrial Area, Hindupur, Shri Krishan Kumar Narula, Chairman Dist. Ananthapuram (A.P.) - 515201 Shri Ravinder Kumar Narang, Member Shri Raju Bista, Member Survey No. 188,189 & 190/1, Village Bhuvad Taluka –Anjar, Distt-Kutchh Corporate Social Responsibility Committee Anjar – (Kutchh) Gujarat - 370130 Shri Krishan Kumar Narula, Chairman WORKS - LIGHTING DIVISION Shri Jai Prakash Agarwal, Member 7k.m. Stone, Kashipur - Moradabad Road Shri Raju Bista, Member District Udham Singh Nagar, Nomination and Remuneration Committee Kashipur - 244713 (Uttarakhand) Shri Krishan Kumar Narula, Chairman J - 7, 8 & 9 Malanpur Industrial Area Shri Ravinder Kumar Narang, Member Malanpur, District Bhind (Madhya Pradesh) Shri Surendra Singh Khurana, Member Plot No. 9-13, Balaji Industrial Estate, Mahuakheraganj, Kashipur, Committee of Directors District U.S. Nagar, Uttarakhand Shri Krishan Kumar Narula, Chairman Shri Raju Bista, Member Shri Sunil Sikka, Member

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Management Discussions and Analysis

Section A: Company review the world’s countries have experienced a positive growth. The Global growth accelerated to 3.7% in 2017, supported Surya Roshni has emerged as a reputed manufacturing by a broad-based recovery across advanced economies conglomerate, catering to diverse consumer need in both and emerging market and developing economies (EMDEs). domestic and industrial categories. Established in 1973, The World Economic Outlook projects the global economic the Company has evolved and manifested, not just a strong growth to further touch 3.9% in 2018. brand image, but also an irreplaceable mark onto the minds and consideration of customers. Today, it is considered However, over the medium term, this growth will remain flat amongst reputed manufacturing conglomerate and is India’s as global slack dissipates, trade and investment moderate largest exporter of ERW pipes and producer of ERW GI Pipes and financing conditions tighten. The advanced economies and the second largest manufacturer of lighting goods. growth is further forecasted to edge down as monetary policy is normalised and the effects of U.S. fiscal stimulus The Company operates across two business segments – wane. The possibility of financial market stress, escalating Steel Pipes and Strips, and Lighting and Consumer Durables. trade protectionism and heightened geopolitical tensions Both the segments are poised to grow owing to the positive continue to cloud the global economic growth prospects developments in the end-user industry. The future growth going forward. will be supported by the Company’s strong brand presence for both the businesses in the organised segment, its In the emerging market and developing economies (EMDEs), locational advantage, strong distribution capabilities and a cyclical recovery is underway in most of the regions. With innovative product offerings. strong market sentiments, EMDEs are expected to grow by 4.5 % and 4.7% in 2018 and 2019, respectively. The upturn Section B: Economic review in these regions is expected to mature, as commodity prices plateau. Robust economic activity in EMDE regions 1. Global economy with large number of commodity importers is forecasted to The global economy seems to be leaving the legacy of the continue. However, risks to the growth outlook continue to global financial crisis of the past decade behind, as about half tilt to the downside in many regions.

ANNUAL REPORT 2017-18 25 Stronger economic activity, expectations of more robust The Indian Government has taken various initiatives to global demand, reduced deflationary pressures and strengthen policy reforms and improve the ease of doing optimistic financial markets are all upside indicators. business. These include implementation of Insolvency and However, structural impediments to a stronger recovery Bankruptcy Code (IBC), Real Estate Regulation Act (RERA) and a balance of risks that remains tilted to the downside, and Goods and Services Tax (GST).The impact of sustained especially over the medium term, remain important structural reforms is now being felt on the ground as a mammoth economy is turning around. GST, India’s biggest challenges to be met in the coming years. indirect tax reform, created a temporary disruption at the Global Economic Growth (%) time of implementation. However, the teething problems got a quick response from the Government, leading to relatively smooth transition.

4.5 EMDEs Businesses have now settled down and there is a strong broad-based recovery in the investments and consumption. 4.0 Furthermore, with the elimination of inter-state barriers and 3.5 implementation of e-way bill system, transport and logistics

3.0 World have become more competitive and less expensive. The impact of this seminal tax is now being felt in formalisation 2.5 of enterprises, wider tax base and higher tax revenues. Advanced The Government’s flagship project, ‘Make in India’ also 2.0 Economies continued to gain momentum, attracting added investments 2014 2015 2016 2017 2018 from global MNCs. The Government has further avoided slippage in the Source: World Bank fiscal deficit despite the rise in oil prices and has also 2. Indian economy undertaken continuous measures to keep the inflation in check. The Union Budget further stressed on improving The Indian economy witnessed a GDP of 6.7% during 2017- country’s infrastructural growth, agricultural activities 18 and emerged as the fastest growing economy. The and strengthening the MSMEs. As such, businesses country became the sixth largest global economy, surpassing across several key sectors are experiencing firm growth France, with a gross domestic product of $2.59 Trillion. The indicating better capacity utilisation and higher investment economic fundamentals continued to remain positive during expectations. With strong economic sentiments, IMF the year with Index of Industrial Production (IIP) touching forecasts India’s growth to rise to 7.3% in 2018 (2018-19) 4.3% and core sectors showing a satisfactory growth. and 7.5% in 2019 (2019-20).

GDP in 2017 ($ Trillion) Indian economic growth forecasts for 2018-19 (%)

19.4 7-7.5 7.3 7.3 7.3 7.3 12.2

4.87

3.67

2.62 2.59 2.58

U.S China Japan Germany U.K. India France Economic International World Asian Moody’s Survey Monetary Bank Development Investors Source: World Bank Fund Bank

26 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Section C: Industry review ensure high quality steel production and create a technologically advanced and globally competitive steel 1. Steel industry. Some of the key elements of this policy include:

Increase consumption of steel across major segments of infrastructure, automobiles and housing, resulting in a potential rise in per capita steel consumption to 160 kg by 2030 from ~61 kg at present

Achieve 300 MT of steel-making capacity by 2030 through additional investments of ` 10 lakh crore by 2030-31

Domestically produce steel for high-end applications - electrical steel (CRGO), special steel and alloys for power equipment, aerospace, defence and nuclear applications

Reduce reliance on imports to nil and export ~24 MT of Steel is one of the world’s most essential materials. It is steel by 2030 fundamental to every aspect of our lives. From construction, industrial machinery to consumer products, steel finds its Several Indian companies have undertaken capacity way into a wide variety of applications. It is one of the most expansions to achieve the targets. Besides, the acquisition important products of the modern world and is of strategic of debt-laden steel companies will further reduce time for importance to any industrial nation. It is also an industry ramping up existing capacities. With the Government’s with diverse technologies based on the nature and extent of extension of anti-dumping duty on steel and imposition use of raw materials. of quality standards, it is likely that India will be on a fast track growth path in steel production going ahead. Besides, Excess steel capacity was found to be the single phenomenon Government programs such as Smart Cities, Skill India, damaging the interests of the global steel producers during Renewal and revival of road / rail infrastructure projects will 2014-2017 in terms of lowering the prices and thereby the further provide a big boost to the steel demand. The demand profitability of the industry. China, having accounted for drivers of the steel segment will also lead to positive nearly 50% of the estimated surplus steel capacities, had to developments in the steel pipe sector. assure the outside world that its commitment to bring down the carbon footprint would entail elimination of some of the 2. Steel tubes and pipes polluting units in steel, coal and cement. This has provided an interesting opportunity to the steel players across the world, especially India.

India is currently the second largest steel producer after China. Besides, the Government of India has proactively addressed the issues faced by the domestic steel makers and has proactively safeguarded the interest of the industry. There is significant potential for growth given the low per capita steel consumption of 61 Kg in India, as compared to world average of 208 Kg. India’s crude steel production and consumption (MT) India is amongst the fastest growing steel tubes and pipe Production FY14 FY15 FY16 FY17 FY18 manufacturers globally with production estimated at about Public Sector 16.8 17.2 17.9 18.5 19.8 10 million tons a year. Over the years, India has emerged as Private Sector 64.9 71.8 71.9 79.5 82.5 the global pipe manufacturing hub owing to its best quality offerings at lower cost and geographical advantages. The Total 81.7 89.0 89.8 98.0 102.3 global accreditations and certifications owned by the Indian companies have further made them preferred suppliers Consumption FY14 FY15 FY16 FY17 FY18 for many leading oil and gas companies in the world and particularly those in the Middle East, North America and 74.1 77.0 81.5 84.0 90.7 Europe. (Source: Joint Planning Commission) The steel pipes demand has been increasing on a steady The Union Cabinet approved the National Steel Policy (NSP) basis owing to requirements from the sectors like water with a long-term vision to give thrust to the domestic steel transportation, agriculture, boring, fire-fighting and most sector. It seeks to enhance domestic steel consumption, importantly infrastructure for oil and gas. It is interesting

ANNUAL REPORT 2017-18 27 to note that India is currently under-invested in the pipeline of which the Western and Northern markets currently have infrastructure with only 1/3rd of the petroleum products the highest consumption due to better pipeline connectivity. moving through the pipeline which is the most efficient However, with the increasing coverage and reach of natural mode of transport for fluids. gas infrastructure in India, this regional imbalance is expected to get corrected. Gong ahead, the pipeline network The Government has ambitious plans to improve network is expected to expand to around 32,000 Kms with a total of oil and gas pipelines across the nation. Recently, tenders design capacity of around 815 MMSCMD by 2030, putting in for construction of over 12,000 kms of pipelines have been place most of the National Gas Grid that would connect all floated by several oil and gas companies for the mammoth major demand and supply centre in India. expansion plans over the next five years. Besides, rapid industrialisation in the country and real estate demand Planned additions to the pipeline infrastructure from affordable housing and ‘Housing for All’ schemes will Pipelines Design Capacity Length lead to increasing investments in building and construction (mmscmd) (kms) activities. This will necessitate strong requirements of steel Existing till 2012 306 12,144 tubes and pipes. Expected addition in the 416 15,928 River water transportation system is another key area of 12th plan growth. Several areas in India either suffer from drought or excessive flooding owing to uneven distribution of river Expected addition in the 60 3,360 water. Around 5 lakh tonnes of large diameter pipes were 13th plan required for connecting rivers for water transportation in the Capacity addition 33 1,295 State of Gujarat alone. The same model is anticipated to be MBBVPL/MBPL/Surat deployed across other states in India, which will necessitate Paradip/pipelines the demand for large diameter pipes. And lastly, but most beyond 13th plan and till importantly, is the demand from the rural segment. With thr 2030 Government’s rural-centric policies in the recent budget, lots Total 815 32,727 of activities in the areas of irrigation and construction will be driving the demand for steel tubes and pipes going ahead. (Source: ‘Vision 2030’, Natural Gas Infrastructure in India, Report by Industry Group For Petroleum & Natural Gas 3. Gas transmission Regulatory Board)

4. City gas distribution

India at present, has a network of about 13,000 km of natural gas transmission pipelines with a design capacity of around 337 MMSCMD. The natural gas demand has increased In India, the Petroleum and Natural Gas Regulatory Board significantly owing to its higher availability, development (PNGRB) is the regulatory body for City Gas Distribution of transmission and distribution infrastructure, the savings (CGD), responsible for authorising new areas to set up from the usage of natural gas in place of alternate fuels, infrastructure amongst interested players. India’s CGD the environment friendly characteristics of natural gas as a sector has seen rapid growth in recent years and consumes fuel and the overall favourable economics of supplying gas approx.13.6 MMSCMD of natural gas. There are 15.22 at reasonable prices to end consumers. India has six major lakh domestic connections, 10,631commercial customers regional natural gas markets namely Northern, Western, and 2,974 industrial customers at present in India.The Central, Southern, Eastern and North-Eastern market, out Government’s intent to establish a gas-based economy is

28 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

a good strategic move and hence the CGD segment appears year ago, it gained popularity in the Indian market. The LEDs to be positive for its future prospects. To align with the goal are highly beneficial in terms of longer life, higher energy of reducing the carbon footprints the Government has set a efficiencies, environmental-friendliness and durability. target of connecting 1 Crore households with PNG by 2019, Besides, these lights require a low voltage power supply the introduction of stringent emission levels for vehicles and as compared to the traditional conventional lights. It is the proposal to develop green corridors. reported that 20% of the total electricity produced globally, Surya Roshni is evenly poised to respond to the industrial is consumed by domestic lighting users. The outdated opportunities stated above through its best-in-class quality incandescent, halogen and fluorescent lamps are swiftly offerings in its steel pipes and strips segment. The Company being replaced with the modern LED lights which will further is geared up to achieve its business goals through adoption lead to a reduction in the electricity consumption to the level of latest technology, achieving operational efficiencies, of 4% from 20%. providing excellent customer services and launching The Indian LED lighting market in precedent years has been innovative and diversified products and retain its prominent witnessing tremendous growth in terms of value as well as position in the Indian steel pipes Industry. volume. The Government has been taking continuous efforts to promote LEDs through various schemes. According to a 5. Lighting Press Information Bureau (PIB) announcement, by 2019, 770 million LED bulbs and 35 million LED streetlights will be deployed to replace conventional lights. Under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), around 27.3 million LED bulbs will be distributed to the BPL households.

Currently, the demand for street lighting application, accounts for the major opportunity in the Indian LED lighting market. Over 2.1 million conventional streetlights have already been replaced with LED streetlights across the country, under the Street Lighting National Programme (SLNP). Energy Efficiency Services Limited (EESL), a public energy services company under the administration of the Ministry of Power, Government of India (GoI) is the implementing agency for SLNP. The installation of LED streetlights has resulted in annual energy savings of 295 million kWh, avoided capacity The Lighting Industry in India can be broadly categorised usage of over 73MW and reduced carbon emissions by into three segments: 230,000 million tonnes annually. The project has been implemented across 23 states and union territories LED Bulbs, LED Street Lights, Down Lighters and Luminaries The other factors which have made this significant impact Conventional Lamps such as General Lighting Service are the promotions towards increasing LED lights awareness (GLS), Fluorescent Tube Lights (FTL), Incandescent Bulbs amongst the people as well as the new architectural designs (ICL) and Compact Fluorescent Lamp (CFL) and others which has boost up the growth of LED Panels and down Accessories, Components and Control gears (ACCs) lighters. According, to The Electric Lamp and Component Manufacturers Association of India (ELCOMA), the LED Until a decade ago, India’s lighting segment was traditionally market in India is expected to grow to ` 216 billion by 2020. dominated by FTLs and ICLs, largely owing to economical cost, easy availability and effortless installation as against This leap will result in the LED market accounting for about other lighting products. However, these lighting sources 60% of India’s total lighting industry (approximately ` 376 were high on energy consumption. The Indian Government billion) in 2020. Rising consumer awareness about the cost- identified this drawback and started promoting the energy effectiveness, enhanced life, better efficiency and inherent efficient sources of lighting across the country. This led to the eco-friendly nature of LED lights will continue to drive advent of CFLs. Initially they were quite expensive. However, volume sales from the industrial, residential and commercial rising demand and high economies of scale led to the fall sectors. in prices. With the advancement of technology, superior Surya Roshni, being the pioneer of technological acceptance sources of lighting, such as LEDs flocked the lighting market. in lighting industry, remains committed to offer best quality LEDs are solid state semiconductor device which are in products and maintain a sustainable leadership in the existence for over three decades. However, its until a few segment.

ANNUAL REPORT 2017-18 29 6. Consumer durables working-class population with busy schedules leaving less a) Fans time for traditional cooking. This is leading to the growing demand for appliances for easy and fast cooking.

Besides that, Indian consumers remained optimistic about their personal finance spending capacities. During the year, the customer confidence was further boosted by controlled inflation and falling cost of consumer credit. India’s consumer disposable income grew by 11% upto Jan 2018 which also aided in a relatively strong demand for consumer appliances. Besides, changing lifestyle towards premiumisation has led to higher growth in premium segment. India is a tropical country with warm summers lasting for According to PWC, the market is expected to witness 10% a prolonged period. Hence, fans are a must have for every CAGR till 2022, with the country having the potential to be home. Even though air conditioners and coolers have one of fastest growing markets in the world in terms of become a preferred source of maintaining a comfortable consumption, manufacturing and job creation. Factors temperature, the age old reliable and affordable fans continue like emerging middle class, rising disposable incomes and to remain in fashion as well. India’s electric fan industry is progressive Government reforms such as ‘Digital India’ will well-established and has grown significantly over the years. further drive this growth. The industry is divided into product types like ceiling fans, table fans, pedestal fans, wall fans and others (industrial, exhaust, multi-utility, tower and bladeless, among others). Indian fan industry dynamics

Key Particulars Figures

Number of households (2011) ~250 million

Market size ~55 million units

Organised (%) >70%

Organised (units) ~40 million units

Average replacement cycle 10 years

Replacement demand ~90%

Fresh demand ~10% (Source: Ambit Capital Research) Section D: Operational review There are large number of players in both organised and 1. Steel Pipes and Strips unorganised market, however, much of the growth has been through organised players as consumers move towards Key Particulars 2016-17 2017-18 branded and more technologically efficient fans. The above Contribution to total exhibit clearly reflects the large proportion of demand 68 72 coming from the replacement market. It is interesting to note revenues (%) that the large part of this replacement demand will be driven Net revenues by value-added and premium categories of fans. 2,605 3,555 (` crore) Higher disposable incomes, increased availability of Cash profit 100 131 continuous power and a faster shift to the organised sector is (` crore) further propelling the electric fan market in India. A concerted EBITDA move has been seen towards widening distribution reach 176 211 ` and improving rural penetration by the organised segment. ( crore) PBT (` crore) 37 64 B) HOME appliances The domestic home appliances market growth in India is A) Products driven by the continuous expansion in the middle and affluent ERW Steel Pipes (GI, Black and Hollow Section) class, growing working class population (especially women) The Company manufactures ERW Steel pipes in the range and improving lifestyles, growing, young and ambitious of 1⁄2” to 104” diameter. These pipes find its extensive

30 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

application across agriculture, industry and construction largely find applications across drinking water pipe lines, oil activities like scaffolding and casing in bore wells. and gas pipelines and plant process water applications. The spiral welded pipes are manufactured in the range of 18” to 105” with maximum thickness of 1’ (25.4 mm).

Cold rolled strips and sheets

These pipes are the mediums of transporting water, gas, crude oil and chemicals at varying pressures and densities over long distances. The pipes manufactured by Surya Roshni have the capabilities to meet the challenging requirements Cold rolled strips and sheets serve as critical inputs across of the industry and delivers high standard products of both range of applications in a wide spectrum of industries like national and international specifications. auto components, motor stamping, furniture and fittings, API & Welded Spiral, 3LPE Coated Pipes domestic appliances, drums and barrels, cycle rims, umbrella tubes and rips and engineering applications. Owing to the sophisticated requirements across these applications, the steel strips possess inherent quality standards, surface finish and close tolerance on dimensions. The Company is fully geared to meet the demanding needs of high value- added segment of CR steel market through its cold rolled plant which was established in 1991 at Bahadurgarh (NCR) and later modernised in the year 2008. The plant serves NCR and adjacent markets of north India, specially focusing on the automotive sector with an installed plant capacity of 1,15,000 MT per annum.

The pipe manufacturing units are located in Haryana, The Company maintains its supremacy in the domestic Madhya Pradesh, Gujarat and Andhra Pradesh. All the plants market and is now at par with all the leading global pipe are equipped with state-of-the-art machines, slitting lines, manufacturers in terms of supplying high quality of API pipe mills, galvanizing units, finishing machines and fail- line pipes with internal & external coating. Different types safe, high pressure hydro testing machines. The plant also of coating like 3LPE, 3LPP, FBE (single & dual layer) and has sufficient handling facilities. These pipes are sold under internal epoxy coating are carried to safeguard the pipe the brand ‘Prakash Surya’. The ERW & Spiral welded pipes as from rusting and also increases the life of the pipe. These well as API pipes are exported and well accepted across 50 pipes are produced to meet high standards of specification countries across the globe. for both national and international markets, including that B) Highlights 2017-18 of American Petroleum Institute (API). Different other pipes specifications such as EN, BS, AUSTRALIA & ASTRA GRADE Increased capacities of the new manufacturing unit for are also manufactured by the Company. The API pipes ERW Black and GI Pipes of the Hindupur unit (Andhra

STEEL PIPES AND STRIPS CAPACITIES 9,00,000 MT ERW pipes includes 2,00,000 MT 1,15,000 MT 12,15,000 MT 2,50,000 MT Spiral (including offline) CR Sheets Total capacities GI pipes

ANNUAL REPORT 2017-18 31 Pradesh) to 1,50,000 MTPA from the initial 90,000 MTPA Government has also emphasised the need to have CGD in which was during the commencement of the plant in all Smart Cities, which will further augment the demand for March 2017 pipes.

Achieved economies of scale with larger and stronger Rural India: The Government’s rural-centric budget and pipes, fetched good premium, as well as witnessed policies like Food for Work Programme (FWP), Indira Awaas significant savings in logistic cost from the above plant Yojna and Pradhan Mantri Gram Sadak Yojna, will lead to agro-based economic growth and higher consumption of Introduced galvanised pipes (GP pipes) and pre- tubes and pipes in this region. galvanised sheet pipes (PPGI) at the Malanpur, Hindupur and Bhuj facilities Automobiles: The automotive mission plan envisages the industry to be among the top three in the world in Introduced infrastructural pipes for solar panel engineering, manufacturing and exporting of vehicles and (galvanised structural steel) auto components. This will lead to larger demand for CR Increased brand visibility and promotional expenses strips going ahead. The Company’s Bahadurgarh plant is in through consistent rise in annual advertising and proximity to several automotive players, which will allow the publicity budget Company to cater to this demand.

C) Opportunities and demand drivers International Events: The ‘Prakash Surya’ brand is well City Gas Distribution: The Government is highly focused established across the global markets. The Company will on reducing pollution in the cities. Research has found stand to benefit form the major upcoming events like Expo Compressed Natural Gas as the best alternative fuel for 2020 in Dubai and FIFA 2022 at Qatar. vehicles. Hence, the Government has placed City Gas Distribution (CGD) companies on top priority for domestic low-cost natural gas. In order to increase the usage of natural gas in the Indian households from the present of 6.5% to 25% over a decade and to take the Gas Distribution Network across India, PNGRB is coming up with 9th CGD bidding round which is a significant initiative to leapfrog to higher gas usage and address urban population across the country. It also opens new avenues for Oil and Gas sector and provide ample scope of growth for Steel Pipes manufacturing units. The Company will reap benefits from its newly set up 3 LPE Coating Pipe manufacturing unit at Anjar - Kutchh (Gujarat) and tap the unexplored potential. Jewel of the Creek, UAE Interlinking of Rivers: The Government aims at constructing 30 major canals stretching over around 15,000 kms, including 3,000 small and large reservoirs. The project will also enhance irrigation, control flood damage and increase water supply eventually creating massive business opportunity for the pipes requirement for the segment. Hence, river water distribution system has enormous scope across India and will generate higher demand for larger diameter pipes.

Housing for All: The Central Government has launched a ‘Housing for all’ scheme to provide houses to the Lusail Iconic Stadium, Qatar economically weaker sections and provide assistance in building close to 3 crore homes. This will boost the D) Outlook construction industry and generate demand for water and On account of the Government’s emphasis through the sewage pipes. National Steel Policy for increasing the capacity of steel Smart Cities: Under this initiative, the Government wants to sector, generating solar power, wind power, improving road develop 100 smart cities with better urban infrastructure. infrastructure, ‘Housing for All’, elevated tracks for railways, This will attract investments for new infrastructure as well city gas projects etc. and increasing infrastructure spending as projects seeking to upgrade existing infrastructure, will accelerate the steel pipes business as the requirements leading to a greater demand for pipes and structures. The of diverse variety of pipes with different needs will grow

32 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

manifold in near future. The strategic plant locations will advancements and developing products that are not only provide savings in logistics cost and help the Company energy efficient but also environment-friendly. Surya in catering the customer demand swiftly. Besides, the LED is amongst the luminaries of the future, driving the Company is geared up through adoption of latest technology, transformation in the lighting industry in India. operational efficiency, excellent customer service and launch The Company has completely backward integrated of innovative and diversified products in the market. business model through its state-of-the-art plants in 2. Lighting and Consumer Durables Kashipur (Uttarakhand) and Malanpur, near Gwalior (M.P.) for manufacturing LED lights (lamps, streetlights and Key Particulars 2016-17 2017-18 downlighters) and conventional lights (GLS, FTL and CFL), respectively. A Compulsory Registration Scheme (CRS) Contribution to total 32 28 of Deity/BIS for LED products has been introduced in revenues (%) the industry to keep a check on safety standards of LED products. The Company’s manufacturing plants have CRS Net revenues 1,282 1,383 approval from the Bureau of Energy Efficiency (BIS). It also (` crore) provided star rating plan for LED lamps which will further EBITDA 137 138 enhance the luminous efficacy of lamps. (` crore) The product development is being supported by its advanced Cash profit 101 112 lighting research and development centre, STIC at Noida. (` crore) The key focus of the research centre is to develop new PBT (` crore) 81 92 LED products further augmenting the Company’s product portfolio. A) Lighting Highlights 2017-18 Achieved 45% growth in LED lighting which contributes 49% of the total lighting turnover

Launched premium LED lighting range of LED bulbs, down lighters, battens, lamps, street lights, flood lights and decorative luminaries

Bagged EESL orders to the tune of ` 210 crore from EESL for LED bulbs and streetlights Overview The Company’s supply to EESL augurs well for our Surya Roshni is amongst India’s second largest sustainability, plant utilisation and the resources created for manufacturers of lighting products and the most trusted LED production in our Kashipur (Uttarakhand) and Malanpur brands for quality in the lighting industry space. Being a (Gwalior) plants. For 2018-19, the Company is estimating pioneer in introducing energy-efficient lighting solutions, EESL orders to the tune of ` 250 crore. Surya Roshni has been providing innovative and safe lighting to its customers. The Company has large domestic presence Going ahead, the Company targets to sell 60 million LED with a network of over 2,500 dealers and 2.50 lakh Pan India Lamps in 2018-19 and achieve a sales target of ` 900 crore, retailers. It also exports to over 40 countries, including the i.e. approx. 55% of the total lighting turnover. Further, the Middle East and U.K (GE, Osram & Tungsrum). Besides, the Company is also strategically planning to increase Surya’s Company has dedicatedly worked towards technological market share through low cost products with high quality.

LIGHTING CAPACITIES

72 3.60 200 60 10 Million pieces Million pieces Million pieces Million pieces Million pieces LED bulbs LED street lights GLS FTL LED tubes and fittings

ANNUAL REPORT 2017-18 33 Re-inventing the future of lighting Brushless Direct Current (BLDC) Fans The past two years have witnessed radical – a game changer changes through de-growth in conventional Surya’s SS-32 BLDC super energy-efficient ceiling lighting products, stabilisation in LED prices and fan has a uniquely designed motor, which has fast phasing out of CFL, leading to exponential a structural element with permanent magnets growth in LED Lighting. The Company’s R&D centre, mounted on rotor rings. An electronic controller STIC, is one of the best lighting R&D Centres in provides pulses of the current to the stator copper Asia that delivers innovation and best-in-class winding that control the speed and torque of the environmental friendly LEDs. The centre is equipped motor. It results in upto 60% savings in power with with Mirror Gonio-photometer from LMT-Germany, increased efficiencies, reliability and lower noise used for developing new generation energy saving levels and better longevity of the fan. luminaries. In addition, the Company also provides Photometric Optical Testing facility for all kinds Surya BLDC Fan consumes mere 32 Watt at of luminaries. Some of the innovative offerings full speed and saves a substantial 60% power, include: when compared to 80 Watt that a conventional High-beam angle LED lamps fan consumes. Colour changer LED lamps Launched new range of higher premium energy efficient New range downlighters and LED battens fans range designed with automatic colour changing LED Torch with dry cell battery &rechargeable LED Lights with electroplated finish, aero dynamically Rechargeable lantern designed blades and wood finish aluminium blades Solar LEDs Offered premium range of fans, such as Plated fans, Kids Spot lights fans, Under-lite fans, Ventura, Metallica and more than 15 variants of fans with LED All its fans have a premium LED wall lights plated finish, providing an edge to its products Smart Motion-sensor LEDs Launched remote control equipped fans with LED and Auto-dimming LEDs fans with under light chandelier option, another unique premium offering B) FANS Launched anti-dust fan with that attracts 50% less dust than a regular fan Developed a 32W super-efficient BLDC fans, which saves around 60% energy as compared to conventional fans; the fan has the tendency to consume power as per its speed Introduced new models of energy efficient and BEE five- star rated fans; this enabled the Company to participate in the Government tenders Going ahead, the Company is going to capture the strong growth, helping boost its overall fan sales in the coming years. The Company plans to enhance our reach to 50,000 Overview counters with specific focus on new launches planned and Surya Fans has emerged as one of the fastest growing with new technologies in the near term. brands in India through its continuous innovation. The Company commenced the fans business in FY2014.Within a The Company is fully geared up to increase its share from short span of 4 years, the Company has achieved No.6 slot the present level to capture about 6% of the fan market with in the fan market. It provides wide categories of designer and its state of-the art offerings by 2020. colourful range of ceiling, table, pedestal and wall mounting fans, along with a wide range of domestic exhaust fans. C) Home Appliances Over 85% of the Company’s products are sold through large Overview chain of dealers and distributors. Balance is consumed in The Company introduced the category of home appliances Government institutions (EESL) and public sector units. as a new business segment, post its success in the fans. Highlights 2017-18 Over the span of three years, the division has offered feature- Achieved sales of ` 172 crore rich, contemporary range of electrical home appliances like

34 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

products. This will significantly curb the unorganised sector leading to better demand prospects for the organised sector.

Growing Awareness: LED lamps have low energy consumption and longer life. With the growing awareness amongst customers, the demand for LED would further grow.

Growing Housing Segment: With the implementation of RERA and Government’s initiative for ‘Housing for All’ as well as smart cities, the real estate sector is poised for a stronger growth ahead. This will drive demand for energy-efficient LEDs and electrical appliances. electrical storage water heaters, room heaters, dry irons, Demographics: India’s half of its population is under the steam irons and immersion heater and kitchen appliances age of 25. Two-thirds are less than 35. Besides that, India like mixer grinder, induction cookers and toasters, among is likely to have the world’s largest workforce by 2027, with others. a billion people aged between 15 and 64. This would lead Highlights 2017-18 to aspirational demand for fans and home appliances going Achieved sales of ` 45 crore ahead. Introduced several products largely focussing on water Energy Efficiency and Premiumisation: With rising electricity heaters product group including the new Qubo & Arctic cost, more and more consumers are opting for energy series of energy efficient and glass line tank water heaters efficient solutions. Besides, rising income levels are driving Introduced new range of room coolers the demand for more value-added products across product categories. This is driving the overall trend of premiumisation The Company has been following the strategy of leveraging in most relevant product markets. Energy efficiency is higher its vast distribution network and the brand equity of ‘Surya’ in consumer’s purchase criteria, as the life-cycle costs for the growth of its new business segments. The key become more salient differentiators of the products offered by the Company are efficiency and modern design. Going ahead, it targets to Rural India: The rural India is witnessing a stupendous mark further inroads into fast moving electrical appliances. turnaround with better income of the customers, greater accessibility to the products and availability of electricity D) Opportunities and demand drivers with the help of rural electrification. The Company will Favourable Macro-economic Trends: With a sustained witness strong growth from this segment with strong economic growth coupled with the Government’s impetus demand for high-end/premium fans, which otherwise were on improving infrastructure and housing, combined with dominated by urban markets. self-sufficiency of electricity, the electrical space is poised E) Outlook to grow in the coming years. The LED technology will continue to grow and dominate Government Initiatives: The Government has been strongly the lighting segment. It will account for increasing share promoting the importance of energy efficient LED lights. It of revenue within the Lighting segment. Low cost and aims to change approximately 40 million street lights to LEDs, the Government’s push for LED lamps will account for a along with commercial buildings. The ‘Bijli Har Ghar Yojna’ higher share of volume growth in 2017-18. The pricing as (Saubhagya) focuses on electrifying 40 million families well as the introduction of solutions-based products in a across rural and urban areas, which will further necessitate competitive market will have a bearing on the growth of the the demand for LEDs. The Unnat Jyoti by Affordable LEDs overall lighting market. for All (UJALA) Scheme through EESL is already under The Company has the desired synergies to diversify into execution. Under this scheme, the Government has planned consumer durables segment with the launch of high efficiency to make LED lamps available at subsidised rates and to BLDC fans and other home appliances. The designing of distribute close to 770 million such lamps. all the products are based on energy efficiency and cost Organised Sector Growth: With implementation of GST, savings. Looking at the increasing benefits of low cost & there has been an increasing focus on the reliability of the high efficiency products, consumer demand is increasingly organised players. The Government’s initiatives towards shifting towards these products. Surya has well-trained formalisation of economy will play a key role in driving efficient pool of qualified professionals to handle today’s revenues across our lighting, fans and home appliances smart consumers, aligned to its brand promise with right division. Besides, Compulsory Registration Scheme (CRS) delivery in product performance and service. The Company of Deity/BIS for LED products has been introduced in the is making every effort to ensure that the customer demands industry, to keep a check on the safety standards of LED are met seamlessly.

ANNUAL REPORT 2017-18 35 Section E: Value drivers plant is centrally located, serving UP, MP, Rajasthan and Chhattisgarh markets. Brand Quality ‘Surya Roshni’ is one of the most reputed and trusted brand in both domestic and international markets. The ‘Prakash Surya’ brand holds a prominent position in The Company has accredited quality the Steel Pipes and Strips segment. Whereas ‘Surya’ brand prominently caters certifications from the leading to its lighting and consumer durables segment. With such strong brand equity, international agencies and has a long the Company is well poised to capitalise on the opportunities unfolding across successful track record of scheduled both the business segment. Moreover, with GST rolling in, there would be more deliveries. Its commitment to deliver preference towards organised segment. Besides, established brands will also world-class solutions to its clients in the allow the Company to fetch higher premiums on the value-added offerings. shortest time and quick after sales service has enabled it to build robust customer Locational advantage relationships. With ISO9002:2008, ISO14001:2004&OHSAS18001:2007 The strategically located manufacturing facilities play a key role in reaching out certifications under its belt, the Company to its end customers across all the regions of our country. The Bahadurgarh stands tall on its commitment to deliver plant serves NCR and adjacent markets of North India, largely to the auto- eco-friendly and quality products. components segment. The Anjar plant, largely caters to the export orders owing to the proximity to ports. The Hindupur plant has proximity to the South Capacities Indian markets, savings in logistics cost, improving market share and fetching The Company has already built capacities higher premium on its products besides receiving tax incentives. The Gwalior and is strongly positioned to leverage the industrial opportunities. With no further major capex in site, the benefits derived Kashipur Plant, Uttarakhand out of the new business will strengthen the bottom line. Distribution The Company leverages the benefits of a strong and extensive Pan India dealers and retailers network, with more than 2,50,000 retailers. The Company is competitively positioned today over its rivals and has become a prominent brand in the consumer market. Besides, most of the dealers are located across tier II and tier III segments, thus giving the Company an advantage to reach out to the interiors of India, including the rural areas. Raw materials Bahadurgarh Plant, NCR The Company procures best quality raw material procure from SAIL, JSW, Hindustan Zinc, Tata Steel and Essar Steel. The Company also imports HR Coils in super EDD grade & higher elongation from Posco, Angang, Sngang and Zaporzhstal, as per the requirement of the prestigious customers. Experience The Company’s management has more than four decades of experience in the Steel Pipe industry and nearly three decades of experience in the Lighting industry.

36 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Section F: Financial review During the year, the Scheme of Amalgamation between Surya Roshni Limited and its associate Financial summary/highlights, operations, state of Surya Global Steel Tubes Limited got sanctioned affairs by the Hon’ble National Company Law Tribunal, (` in Crores) Chandigarh Bench (NCLT) and was made Particulars 2017-2018 2016-2017 effective from 11th January, 2018 by filing of form No INC 28 with MCA and consequently Revenue from Operations 5011.76 4181.03 business of SGSTL has been transferred to Other Income 2.66 0.88 the Company w.e.f. 1st April 2016 being the Total Revenue 5014.42 4181.91 appointed date as per the scheme. Accordingly, EBITDA 348.59 313.90 the aforesaid results have been prepared of the Finance costs 105.16 112.72 merged entity. Cash Profit 243.43 201.18 The Company maintained its leadership in the Depreciation and amortisation expenses 87.31 83.61 manufacturing of ERW GI Steel Pipes & Strips Net Profit Before Tax 156.12 117.57 and continued to be a strong contender in the Lighting industry. In the fiscal year under review: Tax Expenses 48.08 31.29 The gross revenue from the Company’s Net Profit After Tax 108.04 86.28 operations registered an increase of 19.86% Other Comprehensive Income (3.72) (3.34) and was reported at ` 5,011.76 crore as Total Comprehensive Income 104.32 82.94 compared to ` 4,181.03 crore in the previous year

Hindupur Plant, Andhra Pradesh Cash Profits increased 21% to ` 243.43 crore as compared to ` 201.18 crore in the previous year Profit before tax increased 32.78% to ` 156.12 crore as compared to ` 117.57 crore in the previous year Profit after tax increased 25.22% to ` 108.04 crore as compared to ` 86.28 crore in the previous year

The overall performance is the result of operational excellence, merger of e-SGSTL and rebounding of the performance of Steel Pipe and Strips segment which also improved ROCE and ROE. Credit Ratings Gwalior Plant, Madhya Pradesh The Company’s credit rating has improved consistently over the past few years and at present has A+ rating for long-term bank facilities. Considering the ample liquidity conditions, thrust of the Government for borrowings from Bond market and the related lower borrowing cost, the company increases its borrowings through Commercial Papers (CP) and obtained rating for enhanced amount of ` 350 crore from ICRA during the year under review. The CP rating of the company (A1+SO) reflects relatively stronger credit quality and higher degree of safety regarding timely payment of financial obligations.

ANNUAL REPORT 2017-18 37 Section G: Risk management consistently over the last three years, the impact will be restricted. The Company has always been exploring cheaper Like any other business organisation, the Company is financial products like commercial papers, WCDL, Export exposed to internal as well as external risks, categorised Packing Credit, Foreign Currency Loan at lower spread (Fully into operational, financial, regulatory etc. The Company’s Hedged), to keep the cost of funds to minimum level. robust Risk Management Policy is adopted to build a strong mitigation network. The key objective of the policy is to Business Competition Risk: Both business segments face ensure sustainable business growth with stability and to competition in the market from many established as well as promote an upbeat approach towards risk management and unorganised players. mitigation. The key objectives include: Mitigation: Excellent brand reputation and launch of innovative Identification of the current and future material risk and reliable products help the Company to sustain competition exposures of the Company and ensure they are from peer companies. Besides, strong distribution network, appropriately mitigated, minimised and managed. advertisement and backward integration give a strong Protecting brand value through strategic control and competitive advantage. With GST implementation, the threat operational policies of unorganised segment is nearly wiped out and the preference for branded products is seen increasing. With manufacturing Establishing framework for the Company’s risk facility in South already established, the logistics cost will management process and to ensure company-wide further be reduced. implementation Ensuring systematic and uniform assessment of risks Operational Risk: Price fluctuation in HR Coils may lead to loss related to different functions of the Company in value of inventory held. Reduction in prices of LED lamps may Enabling compliance with appropriate regulations, lead to loss of inventory valuation. wherever applicable, through the adoption of best Mitigation: The inventory levels are monitored continuously practices by the top management and actions are taken as per the The Company has laid down a strong foundation for a requirement. The Company strikes a balance in keeping successful risk management process. The key roles and adequate inventory so that no business is lost, besides keeping a responsibilities around major business processes are close watch on movement of steel prices and imports. Similarly, assigned to process owners. The major steps in the Risk inventory levels are adequately planned for LED considering the framework are (a) identification of risks under various market requirements and price movement. The Company also categories like operational, financial, regulatory, technological monitors global inter-linkages/dynamics and stress testing and related to human resources (b) assessment of risks in ensuring preparedness for unknown eventualities. terms of severity of impact and likelihood of occurrence, (c) Regulatory Risk: Non-compliance to stringent regulatory and assignment of responsibilities, (d) development of mitigation environment norms may result in liabilities and loss of brand plans which create value for business and (e) monitoring and reputation. reporting. Mitigation: The Company strictly complies with all statutes The Board of the Company periodically reviews and applicable to its operations. There are trained staff members evaluates the risk management system of the Company so entrusted with regulatory responsibilities which are monitored that the management controls the risks through a properly and reported at the highest levels. The Company also uses defined network. The Head of the Departments shall be services of legal and regulatory consultants. responsible for implementation of the risk management system as may be applicable to their respective areas of Forex Fluctuation Risk: The Company deals in exports /imports functioning and report to the Board and Audit Committee. of products in business and borrowings which are subjected to No risks threatening the existence of the organization have currency fluctuations. been identified. However, there are other risks against which Mitigation: To counter exposure to foreign exchange volatility, adequate mitigation plans are prepared. Following are some the Company has formulated foreign exchange hedging policy risks and their mitigation measures: to protect the trading and manufacturing margins by 100% Technology Risk: The ever-evolving technology with hedging against forex. continuous updation may lead to product obsolescence, if Human Resources Risk: The Company needs adequate talent to not addressed regularly. run the business. There is a risk labour unrest and maintaining Mitigation: The Company makes all efforts in innovating good industrial relations. and staying abreast with the best technological know- Mitigation: The Company has developed and acquired trained how and development of new products. The Company has manpower to run its operations. The company periodically state-of-the-art R&D facilities in Lighting segment. In Steel reviews its senior management team to ensure continuity in business, the experienced team of technical staff takes care leadership. The HR policies ensure to attract and retain the of development of products. Regular updation takes place best talents and maintain attrition at low level. The industrial in both businesses to achieve best quality at competitive relations are managed through incentivising, training and costing. counselling of labour. The Company Board has also approved Financial Risk: The policy rates have started showing ESOP scheme. increasing trend in view of inflationary pressures, which may Commodity Price Risk: Company sources several commodities impact profitability. for use as inputs in its businesses and their price fluctuations Mitigation: As the credit rating of the Company has improved may lead to losses.

38 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Mitigation: In order to manage the Commodity Price Risk,company has a contribution made by the employees, comprehensive risk assessment framework to manage the risks arising out of collectively called “SURYA PARIVAR” at all the inherent price volatility associated with commodities. This includes robust levels of the organization. The Company’s mechanisms for monitoring market dynamics on an ongoing basis towards industrial relations continue to be making informed sourcing decisions and continuous tracking of positions. harmonious during the year under review. Further, the Company has in place a mechanism whereby the Audit Committee The number of personnel directly employed of the Board defines risk exposures, measuring them and defining appropriate by the company was 3614 as on 31 March, actions to control the risk. 2018. Section H: Internal control systems Section J: Corporate Social The Company has a proper and adequate system of internal control system Responsibility commensurate with the size and nature of business. It is an integral component of the Company’s corporate governance. The Company has in place a strong The CSR movement in Surya Roshni is based and independent Internal Audit Department responsible for assessing and on the core belief of compliance of social and improving the effectiveness of internal control and governance. Internal ecological responsibilities. Corporate social Audit focuses on operational as well as systems audit. The function is also responsibility is basically a continuous strengthened by hiring the expert professionals. ongoing process whereby the Company contributes to the betterment of society and To maintain its objectivity and independence, the Internal Audit function reports a cleaner and greener environment. to the Chairman of the Audit Committee. Extensive programme of risk and transaction based internal audits cover all divisions, plants, branches and the The key objectives of Surya Roshni CSR different areas of operations. policy are mentioned in Annexure IV to The Audit Committee of the Board is updated periodically on major internal Board’s Report. To attain the Company’s audit observations, compliances with accounting standards, risk management Corporate Social Responsibility objectives and control systems. The Audit Committee assesses the adequacy and in a professional and integrated manner, effectiveness of inputs given by the internal audit and suggests improvement the Company discharged its responsibilities for strengthening the control systems. Further, the Company has an extensive through the Surya Foundation. In pursuance budgetary control system, which is regularly examined by the management. of this objective, the Foundation is working Surya Roshni has well defined Management Information System with clear in the areas of Adarsh Gram Yojana, organizational structures and authorization levels for business transactions. development of preventive and cost- effective health systems of naturopathy The Company’s internal financial controls are adequate and operate effectively and yoga and Ideal Village Projects with which ensures orderly and efficient conduct of its business, including adherence emphasis on Literacy and Personality to its policies, safeguard its assets, prevent and detect frauds & errors, maintain Development of Youth. accuracy and completeness of its accounting records and further enable it in the timely preparation of reliable financial information. Surya also undertakes During the year under review, the Company external audit for efficient audit and control for its branches and depots and on consolidated basis spent ` 2.04 Crore also for specialized functions like taxation. on corporate social activities, being two percent of the average net profits of the Section I: Material developments in human company made during the three immediately preceding financial years. resources/industrial relations Surya Roshni is committed to create open and transparent HR policies that are Cautionary Statement focused on people and their capabilities. These policies foster an environment This report contains forward-looking and enable them to deliver superior performance. Attracting quality talent and statements about the business, financial focusing on their development through training sessions help them improve performance, skills and prospects of the their performance. The Company also motivates the employees to perform Company. Statements about the plans, better. Talent recognition and retention has been the top priority. intentions, expectations, beliefs, estimates, The Management wishes to place on record the excellent co-operation and predictions or similar expressions for future are forward-looking statements. Forward-looking statements should be viewed in the context of many risk issues and events that could cause the actual performance to be different from that contemplated in the Directors’ Report and Management Discussions and Analysis Report, including, but not limited to, the impact of changes in oil, steel prices worldwide, technological obsolescence and domestic, economic and political conditions. The Company cannot assure that the outcome of these forward-looking statements will be realized. The Company disclaims any duty to update the information given in the aforesaid reports.

ANNUAL REPORT 2017-18 39 Mr. Raju Bista, Managing Director (standing second from the left) with the German delegates at the Steel Tubes & Pipes Exhibition at Dusseldorf, Germany, held in April 2018

40 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

BOARD’S REPORT

To the Members, ` 350 crore from ICRA during the year under review. Your Directors have pleasure in presenting the Forty Fifth The CP rating of the company (A1+SO) reflects Annual Report of the Company for the year ended 31st relatively stronger credit quality and higher degree March, 2018. of safety regarding timely payment of financial obligations. 1 FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STEEL PIPES & STRIPS SEGMENT STATE OF AFFAIRS: Steel Industry has witnessed stupendous (` in crore) performance during the year world-wide. In India, Particulars 2017-2018 2016-2017 Steel consumption significantly depends on the Revenue from Operations 5011.76 4181.03 overall performance of the economy (GDP) and more Other Income 2.66 0.88 specifically on investments made in fixed assets such Total Revenue 5014.42 4181.91 as housing, infrastructure like railways, ports, roads, EBITDA 348.59 313.90 Finance costs 105.16 112.72 airports, etc. Anticipated increase in GDP will result in Cash Profit 243.43 201.18 higher consumption and demand of steel products. Depreciation and 87.31 83.61 Surya being the largest exporter of ERW pipes amortisation and largest producer of ERW GI Pipes in India, Net Profit Before Tax 156.12 117.57 manufactures ERW Steel pipes (GI Black, Hollow Tax Expenses 48.08 31.29 section), API & Welded pipes, Spiral, 3LPE Coated pipes Net Profit After Tax 108.04 86.28 & CR strips having wide applications of its products in Other Comprehensive Income (3.72) (3.34) Total Comprehensive Income 104.32 82.94 agriculture, infrastructure, oil & gas and construction sectors. Company products are approved by API During the year under review the Scheme of (American Petroleum Institute) for Oil & Gas sector. Amalgamation amongst Surya Roshni Limited and During the year, the steps taken by the company for its associate Surya Global Steel Tubes Limited new products development has further strengthened (SGSTL)sanctioned by the Hon’ble National Company its operations resulted into increased volume of steel Law Tribunal, Chandigarh Bench (NCLT) and made pipes. During the year under review, the gross revenue effective from 11th January, 2018 by filing of Form from operations of the divisions stood at ` 3623.40 No. INC 28 with MCA and consequently, business of crore as compared to ` 2835.59 crore last year, SGSTL has been transferred to the Company w.e.f. registered an increase of 27.78% (volume increased 1st April, 2016, being the appointed date as per the by 20%), Cash Profit to ` 130.99 crore from ` 100.07 scheme. Accordingly the aforesaid financial has been crore (an increase of 30.89%) and Profit before tax prepared of the merged entity. (PBT) increased by 74.06% to ` 64.44 crore from In the fiscal year under review, the Gross revenue ` 37.02 crore from the corresponding period last year. from operations of the Company is ` 5011.76 crore The better performance of the segment is derived on as compared to ` 4181.03 crore last year register an account of set-up of Hindupur plant at A.P, savings increase of 19.86%, Cash Profit to` 243.43 crore from in logistic costs, operational efficiencies, supply to oil 201.18 crore register an increase of 21%, Profit before and gas sector, better negotiations, increasing share tax stands at ` 156.12 crore as compared to ` 117.57 of organized sector and above all merger of e-SGSTL crore last year, registered an increase of 32.78% and which leads to creation of a larger and stronger Profit after tax stood at` 108.04 crore as compared to steel pipes business of the company at economy of ` 86.28 crore last year, registered an increase of scale and overall improved scenario of Steel Pipes 25.22%. The overall performance is the result of business. Operational excellence, merger of e-SGSTL and NEWLY SET-UP STEEL PIPE PLANT AT HINDUPUR (A.P) rebounding of the performance of Steel Pipe and Hindupur (A.P) plant which was established in March Strips Segment which also improved ROCE and ROE. 2017 for manufacture of ERW (GI, Black, Section) Considering the ample liquidity conditions, thrust of pipes has expanded its production capacity to the Government for borrowings from Bond market 1,50,000 M.T per annum in November, 2017. The full and the related lower borrowing cost, the company benefits of operations of expanded capacities will be increases its borrowings through Commercial Papers derived from the current year. Plant is in proximity with (CP) and obtained rating for enhanced amount of premium market of South India resulting in savings

ANNUAL REPORT 2017-18 41 of logistic cost, increasing market share and overall The wide acceptance of Company’s steel pipe strengthening the Steel Pipes & Strips business. products are evident with its expanding market Above all, being a plant set-up at notified backward share and brand preference. As world-class quality area in the State of Andhra Pradesh, is eligible for products of the Company are being sold by 250 State incentives of VAT, Electricity etc. as per the dealers and 21000 retailers across India and are also investment policy of the State Government of A.P. being exported to more than 50 countries across the globe namely UAE, Australia, Egypt, EU, Canada, US ANJAR (KUTCHH) UNIT etc. Surya Steel Pipes and Strips segment is further Upbeat by Government policies at the centre and in strengthened on account of merger of erstwhile particular its recent National Steel Policy 2017, will -Surya Global Steel Tubes Limited (e-SGSTL) effective further boost sentiments of steel pipe sector in a big from 11th January, 2018 having its appointed date way. Government programs such as Development of as 1st April, 2016 as per the approved Scheme of 100 Smart Cities, Skill India, Renewal and revival of Amalgamation by Hon’ble National Company Law road / rail infrastructure projects will further provide a Tribunal, Chandigarh Bench vide its Orders dated big boost to the Company’s Steel segment in times to 11th December, 2017. come. The recent merger of e-SGSTL with the Company LIGHTING & CONSUMER DURABLES SEGMENT would bring in economy of scale and also open additional avenues of growth in terms of volume, new The segment rebounds during the fourth quarter of the reported financial year and delivered much products, improved profitability and edge of doing improved performance after GST-led disruption business. This would also lead to the consolidation easing and increasing sales of LED lights resulted into of steel pipes business leading to optimal utilization an increase of 15.30% in Revenue from Operations of resources and bringing the benefits of overall (net of taxes) to ` 398.93 crore from ` 345.99 crore, synergy, common management, reduced finance Cash Profit increased by 34.98% to` 36.73 crore from cost, improved credit rating and other benefit of ` 27.21 crore and Profit Before tax (PBT) increased integration. by 42.64% to ` 31.31 crore from ` 21.95 crore during Established in the year 2010 on 92 Acres which is in the fourth quarter of the reported financial over the close proximity to two major Kandla and Mundra port corresponding quarter of the last year. The improved gives strategic advantage in exports and imports. performance of the fourth quarter also resulted into The unit has successfully manufactured API 5L X – an overall increase in Revenue from Operations by 70 PSL2 Grade pipe for Oil & Gas Industry. Climbing 7.88% to ` 1383.29 crore from ` 1282.24 crore, Cash the ladder of success very fast, the company has Profit by 11.20% to ` 112.44 crore from ` 101.11 ` received prestigious order of 314 crore from IOCL crore and PBT by 13.81% to ` 91.68 crore from ` for API Grade pipes which is under execution as per 80.55 crore during the corresponding last year. schedule. Ranked as one of the most respectful and trusted Company is also establishing world’s one of the best brand for lighting product in India, Surya, manufacture 3LPE Coating facility having latest technology from all the LED products in-house, backed by strategic Selmer, Netherlands at its Anjar (Kutchh) plant, which marketing initiatives and strong trade channel will add significant value to existing products basket. followed by orders of Street lights received from Company, continue to maintain its supremacy in the EESL, Company posted a growth of 45% in LED lights domestic market and is now at par with all the leading during the year. To further accelerate the growth, the global pipe manufacturers in terms of supplying Company has introduced more premium range of LED high quality of API line pipes with internal & external Down-lighters, Battens, Lamps, Street Lights, Flood coating. Different types of coating like 3LPE, 3LPP, Lights, other decorative luminaries and will continue FBE (single & dual layer) and internal epoxy coating to participate aggressively in the tendering of Street are carried to safeguard the pipe from rusting and Lights orders of EESL. also increases the life of the pipe. Different other pipes Company became the first lighting company in India specifications such as EN, BS, AUSTRALIA & ASTRA to introduce energy-efficient lighting solutions. GRADE are also manufactured by the Company. Today, Surya ranked as one of the most respected Anjar (Kutchh) Plant being situated at coastal and trusted brand in India for its Lighting products. location with nearby two major ports, exports 70% of Surya, offers wide range of LED products ranging its production as it is having strategic advantage in from 0.5w to 25w Lamps, Down-lighters, LED exports and imports. Panels, LED Street lights & LED Hi-bays for Indoor,

42 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Commercial and Industrial Lighting sectors which are the sectors like water transportation, agriculture, produced in-house after extensive R&D at its Noida boring, fire fighting, Infrastructure and Oil & Gas based Centre to suit Indian conditions. Many new sector. Government has ambitious plans to improve products such as High Beam Angle LED Lamps, Color network of Gas & oil pipe lines all over India. About 7 Change LED Lamps, New Range Down lighters, LED lakh tonnes of API line pipe orders are in the pipeline Torch with Dry Cell Battery Rechargeable etc. will also for the next two years’ time. Like this about 5 lakh be introduced in near future to cater to the growing tonnes of large dia pipes required for connecting demand of the customers. This gives Surya an edge rivers for water transportation in the State of Gujarat over its competitors. alone which is also to be supplied during next one The LED products add a great amount of colour & year time. River water transportation system has class as well as complimenting the existing range enormous scope all over India. of company products which include CFL, Tube Light, In order to increase the usage of natural gas in Indian GLS, Luminaries and Accessories, High Mast Lighting households from the present of 6.5% to 25% over a Systems, Lighting Poles etc. decade and to take the Gas Distribution Network Company’s Lighting and Consumer Durables across India, Government of India through Petroleum Segment is not limited to Lighting Products only but and Natural Gas Regulatory (PNGRB) focuses on also includes Fans, Home Appliance and Consumer revised bidding process for City Gas Distribution Durables in its segment. The acceptance of the brand licenses, which opens new avenues for Oil and Gas Surya fans, Home Appliances and Consumer Durables sector and provide ample scope of growth for Steel was overwhelming amongst distributors, retailers Pipes manufacturing units. Company will reap as well as customers. During the year under review, benefits of the same as Setting-up of 3 LPE Coating Company achieved a sales of ` 172 crore through Pipe manufacturing unit with an installed capacity of fans and a sales of ` 45 crore from Home Appliances 18,50,000 square meter external coating and 11,00,000 Business. Turning energy into happiness Surya, square meter internal coating for the pipes having added value added and premium range of fans such diameter between 4” to 64” at its existing campus of as Plated fans, Kids fans, Under-lite fans, Ventura, Anjar - Bhuj (Gujarat) is progressing well. With the Metallica all in premium Plated finish and even fans proposed coating facilities, the Company’s presence with LED in more than 15 designs during the year. in supply of pipes in Oil & Gas Sector increases which Further, Surya ventured into Room Coolers and sold will also lead to higher capacity utilization of API & decent quantity, totally against advance payment. Spiral pipes in times to come. With government initiatives like building smart India has become the global pipe manufacturing hub cities across India and structural shift in the lighting primarily due to the benefits of its lower cost, high industry towards LEDs the company is poised to grow quality and geographical advantages. The global by leaps and bounds in years to come. accreditations and certifications that the Indian FUTURE PROSPECTS companies possess have made them preferred STEEL PIPES & STRIPS SEGMENT suppliers for many leading oil and gas companies in the world and particularly those in Middle East, Development of India is closely linked to the growth North America and Europe. Since the global economy of its Steel Industry. Steel plays a vital role in the returned to sustained growth, the domestic pipe development of modern economy and consumption industry is expected to accelerate into high growth of steel widely taken to be an indicator of economic trajectory. development. India has become the world’s 2nd largest Steel producer surpassing Japan. Steel Surya is the largest ERW GI pipe manufacturer Pipe Industry continues to have a strong demand in and the largest exporter of ERW pipes in India. traditional sectors such as construction, housing, Surya continuously assess the requirement of its transportation, agriculture, boring, fire-fighting, customers and develop the products accordingly. Infrastructure, Oil & Gas sector and river interlinking Surya developed and supplied GI pipe up to 24” dia etc. The industry will serve as the backbone of pipe during the year. Surya also has good presence industrialization of our country. The benefits of in Fire Fighting, Agriculture, Section and API pipe having a functional steel industry will translate to a required for infrastructure, household, plumbing uses functional country. Drastic steps have been taken by and Oil & Gas sector. the Govt. of India to improve overall steel production, Looking to the brand image of “Prakash Surya”, the consumption and exports. demand & supply scenario in South Indian market, Demand of steel pipes has been increased all around the Company’s newly set-up state of the art ERW Pipe

ANNUAL REPORT 2017-18 43 Manufacturing Mill at Hindupur (A.P) for production of finished products cost effective, making the of Black, Section and GI pipes which is functional Company highly competitive; from last year starts yielding results. However, 4. Benefit of availability of modern facility with actual realization will be derived once the plant runs newer technologies such as variety of coatings, throughout the year with production capacity of as per the demands of international customers; 1,50,000 MT per annum. Further, company derives 5. Optimal utilization of resources of the two benefits of economies of scale at lower capital cost companies and taking the advantage of and increased market share in the premium market operational synergies. of South India, leading to savings in logistic cost and • Overheads Reduction and lower Logistic Cost. strengthening the overall Steel Pipe business of the Company. • NCLT Orders on defaulted companies on account of tightening from Banks Further, in order to meet the growing demand of Large Diameter Pipes (SAWH), Company completed merger • Increased Government Spending on Infrastructure of e-SGSTL situated in west coast of India at Anjar- and other related projects Bhuj (Gujarat) near International sea port. The Anjar • Approved manufacturer of API pipes by American unit of the company is engaged in manufacturing Petroleum Institute and produces API pipes for of Spiral Welded Pipes and ERW, API pipes and due India as well as export market. to its world-class machines and strategic location With emphasis through the National Steel Policy,for in close proximity to Kandla and Mundra Port, it increasing the capacity of steel sector, improving majorly caters to the export business and exporting road infrastructure, housing for all, Elevated tracks to over 50 countries across the Globe resulting into for Railways and redevelopment of railway stations, further improve profitability & product range of your city gas projects,development of smart cities and company. with Union Budget 2018 focuses on strengthening The entire turnaround story of Steel Pipes and Strips agricultural and rural economy of the Country Segment of the Company which provide an edge over through various schemes such as Bharat Mala its peers is on account of below mentioned features : Pariyojana,, Awas Yojna (building 1 crore houses), Ujjawala Yojana (providing LPG Connections to 8 • Better Capacity Utilisation – With four plants crore women), substantial demand will be generated operating at 4 different locations -North, Centre, for the Steel Pipe products of the Company. West & South of India, capacity utilisation will be better. LIGHTING & CONSUMER DURABLES SEGMENT • Newly set-up Hindupur Plant – Company’s Indian Lighting Industry mainly consist of newly steel pipe plant which was established in Conventional and LED products. The total size of ` March, 2017 for manufacture of ERW (GI, Black, industry is expected to grow to 28,500 Crore by Section) pipes has expanded its production 2020. The growth in the lighting industry will be fueled by LED products due to numerous advantages capacity to 1,50,000 M.T.P.A. in November, LED technology have over conventional lighting 2017. With the start of the art plant and in close technology and they have swiftly gained prominence proximity with premium market of South India, it in the Indian lighting market. Although Indian LED resulting in savings in logistic cost, increasing lighting market is at a nascent stage, it offers market share and overall strengthening the innumerable opportunities for growth over the next Steel Pipes & Steel business. few decades. • Merger of e-Surya Global Steel Tubes Limited LED lights are becoming the major source of with the Company – Major benefits derived on energy efficient lighting in India. LED products are account of amalgamation of e-SGSTL with the becoming the part of mainstream of the market Company are: - owing to government initiatives and increasing public 1. Creation of a larger and stronger steel pipes awareness about benefits of using LED lights. business with economies of scale; India’s LED Lighting market is projected to grow at 2. Providing geographical reach in all major parts a CAGR of 26.6% during 2017-23. The Government of the country; of India launched an initiative in 2016 to replace 3. Availability of plant at Bhuj in Gujarat having conventional lights by LED lights by deploying 770 proximity to two major ports which makes million bulbs and 35 million street lights by 2019. both import of raw material as well as export Further, under Deen Dayal Upadhyaya Gram Jyoti

44 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Yojana (DDUGJY), 273 lakhs LED bulbs have to be with orders of Street lights received from EESL. distributed to BPL households. The Government has A total of ` 216 crore turnover was realized through a target of 100 per cent electrification of villages EESL’s (Energy Efficiency Services Limited) LED to be achieved by 2019 & houses for all by 2022. Street Lighting upgradation program. Today BU has Government drives to build Smart Cities will provide completed illumination projects in Outdoor street further opportunities for growth. lighting & Indoor LED retrofits in PSUs & Semi Govt. We, at Surya Roshni, manufacture all the LED Institutes. Our projects business has successfully products in-house. The LEDs manufactured at its executed LED Retrofitting of Border Flood lighting fully integrated plants in Kashipur (Uttarakhand) along Indo-Pak border in Rajasthan sector. We have and Gwalior (Madhya Pradesh), supported by Surya also made in-roads in prestigious projects like Smart Technology & Innovation Centre (STIC) at Noida – Cities, Metros and Airports. an advanced state-of-the-art lighting and research LED Business continues to contribute 49% of total centre with specific focus on LED ensure products are turnover of the lighting & consumer durables segment energy-efficient with extremely lower maintenance and with new range of Architectural Façade Lighting, cost, high brightness, soothing light effect, high- Decorative Indoor, Industrial and Stadium Lighting power factor, and wide operating voltage range, luminaire range promises to add a vertical growth operation in extreme temperatures – which ensure from specifiers and architect segment. energy savings and comes with the facilitation of a Surya, being only lighting company which provide remarkable lifespan. The group, manufactures quality basic lighting to sophisticated lighting products LED products with a world class manufacturing in India with strong presence in Tier II and Tier III infrastructure. cities will expect to reap benefits due to shift of The LED lamps assembly process is equipped with demand to organized space post GST, The future automatic head assembly machines at Kashipur of the segment is bright on account of operational and Gwalior Plants. These machines are developed efficiencies, increase in marketing network, brand in-house by competent team members with an building, effective plant locations and professional innovative approach. It is the most production friendly management, Company will deliver all round progress and deliver the best quality of products. Surya Roshni both top line and bottom line in times to come which established PCB Assembly Unit at Gwalior & Kashipur shall result into improving the ROCE and ROE. plants with state-of-the-art automatic component With Company’s continuous focus and energized insertion machines for both types of Axial and SMD teams along with its established dealer & service components. We have a world class setup having network, we are well poised to achieve new heights Surface Mount Technology (SMT)/AI machines of with healthy growth in top line and bottom line. FUJI/JUKI/Yamaha for assembly of driver/MCPCBs for LED lamps/T-8 LED Tube Lights and Street Lights. RESEARCH AND DEVELOPMENT CENTRE All the SMT machines are fine pitch machines being Surya Roshni is amongst the market leader in Lighting used to insert chip components of all packages using Industry in India. This has been possible partly due SMT. These machines are used for mounting chip to the strong focus on development of new LED components for CFL and LED driver/MCPCBs. We products and technologies. Surya Technology and are adhering to the best quality practices to deliver Innovation Centre (STIC) is at the heart of this growth a zero defect product so as to meet our customer’s and has contributed immensely towards achieving expectation. the position presently enjoyed by the company. The segment rebounds during the fourth quarter and For the last few years STIC has been involved in the delivered much improved performance after GST-led research and development of LED Luminaries with disruption easing and increasing sales of LED lights several unique and first-in-class features. STIC resulted into an increase in Revenue from Operations has invested in various resources required for the by 8% to ` 1383 crore from ` 1282 crore, Cash Profit mechanical, electronics and optical development. by 11% to ` 112 crore from ` 101 crore and PBT by Company experienced mechanical engineers 14% to ` 92 crore from ` 81 crore during the year. equipped with CAD workstation take every care to Ranked as one of the most respectful and trusted design new lights to ensure that the lights meet the brand for lighting product in India, Surya, manufacture best manufacturing and quality standards. Thermal all the LED products in-house, backed by strategic simulations ensure that the thermal management is marketing initiatives and strong trade channel along optimum for the long life of the LED luminaries.

ANNUAL REPORT 2017-18 45 We design and develop our own electronic drivers 18 despite of entire fans industry has registered for use in vast range of LED lights. High quality and marginal growth. reliability of the drivers is ensured right from the Company has expanded its presence across the design stage. Advanced features of our drivers ensure Segment in Domestic customers, CSD –CPC and that we remain at the forefront of LED technology. Government institutions and further exploring Thermal, mechanical and environmental tests are presence in export markets. performed on the Luminaries during development. Surya newly launched Super energy efficient BLDC All kinds of electrical and safety tests are available Ceiling fan is the biggest success in its journey and and are performed on the products to ensure their creating awareness amongst the customers as functioning during the most adverse conditions. the most power saving fan with just 32 Watt power STIC houses the most advanced Photometric consumption with higher air delivery and other value Laboratory in India with a High speed Mirror Gonio added features. photometer (Type C) from LMT, Germany – the best Surya Premium Ceiling fan range with unique Anti equipment available for measurement of luminous dust technology offers the variety of choices for output and intensity distributions of light sources, customer with different color combinations and luminaries and for testing of optical design of lighting unique decoration to suits the interior of home. system. The centre is also equipped with a 2m HOME APPLIANCES AND CONSUMER DURABLES Integrating sphere. To carry out measurements for light distribution pattern, illuminance, luminous flux, Surya’s entry in to the Small Domestic Appliances chromaticity, color temperature, color rendering index industry in last 2 years have been an important of light sources and luminaries. The Photometric inflexion point in the brand’s journey to further Testing Laboratory is also NABL accredited. strengthen the consumer relationship as it offers wide spectrum of innovative, premium quality, Kitchen STIC has been recognized as an R & D Centre by and Domestic Appliances. In the FY 2018, many new DSIR (Department of Scientific & Industrial Research, products had been launched with special focus on Ministry of Science & Technology). It has been Water Heaters product group, Qubo, designer storage also listed as one of the best testing R & D Centre water heaters were marketed and promoted with in India by BEE (Bureau of Energy Efficiency), for a brand new TVC campaign and Ignito, Gas Water the measurement of complying BIS Standard/ Heaters were launched which were received by the International standards of LED Lighting systems. consumers with enthusiasm and vigor. These new Thus, STIC is actively enabling Surya Roshni to products were appreciated and received very well by provide the most energy efficient, safe, reliable and the consumers, a sizeable number of Water Heaters environment-friendly lighting products with its were sold during last year and plan to grow this ability to do the best-in-class research, design and segment further in FY 2019. development and thus contributing towards Green Room coolers range was expanded last year with India. addition in personal coolers range with 25 Liters & FAN DIVISION 50 Liters, with focus on design and higher cooling Saving energy is the mantra for today as the nation efficiency and with multiple tank capacities, market requires power for development and energy saved is responded to the Room coolers enthusiastically and energy generated. Energy efficient fans are the order this product segment was again sold on advance of day today. Surya, is the name reckoned for energy payment, Room coolers shall be contributing 30000 efficient domestic and commercial fan solution units in FY 2019. market. Surya is going to launch the Glass Cooktop (Gas Surya Fans is one of the fastest growing brand in Stoves) range in the FY 2019, which marks the entry Indian fans Industry. Being associated member of the brand further into the kitchen appliances, these of India Fans Manufacturers Association (IFMA), Glass Cooktops have been the best of material and Company has achieved Sales of ` 172 crore by selling design, which enhances the looks and convenience over 20 Lacs fans units in 2017-18. for the consumers, making their cooking a pleasure and enjoyable. Since the business in the year 2017-18 was affected by India’s most Tax Structure reformation by Goods Surya’s envisages to further leverage and strengthen and Service Tax (GST), the Business Growth was the distribution in e- commerce, as initiated last year not as expected as planned by the organization. and also electrical channel by offering new products Although we have registered positive growth in 2017- in the Mixer Grinders like Royale 600 Watts and Royale

46 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

750 Watts, Dry & Steam Irons, Electric Kettles, Toasters, two meetings to consider amongst other business, Induction Cook tops and shall strive to remain one the quarterly performance of the company and of the most competitive brands in its segment by financial results. offering superior value through innovative products in During the last financial year, our Board met five design, workmanship, efficiency and durability. This times, on 30th May, 2017; 11th August, 2017; 13th business segment achieved a turnover of ` 45 crores November, 2017; 25th January, 2018 and 12th in FY 2018 and aims to generate sales of over ` 75 February, 2018. crores in the FY 2019 .The customer care team is also 6 DIRECTORS AND KEY MANANGERIAL PERSONNEL : well established, with a pan India network of service As per Article 101 of the Articles of Association of the franchises in order to provide impeccable service Company, Shri Raju Bista retire by rotation and, being experience, should the product requires after sales eligible, offer himself for reappointment. service. Change in Directorship During the year, under review Smt. Shivani Singla 2 EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL has been substituted as a Nominee Director of IDBI STATEMENTS: Bank Ltd w. e. f 11th December, 2017 in place of Sh. As per the provisions of Section 134(3)(i) of the Rajeev Kumar Sinha on the Board of the Company. Companies Act, 2013, no material changes or Your Directors welcome Smt. Shivani Singla and commitment affecting the financial position have at the same time placed on record the high sense been occurred between the end of the financial year of appreciation for the wise counsel and valuable of the Company to which the financial statements services rendered by Sh. Rajeev Kumar Sinha during relates to the date of the report. his tenure on the Board. Appointment of Director 3 CHANGE IN THE NATURE OF BUSINESS , IF ANY : The Board of Directors on the recommendation of There was no change in the nature of business of the Nomination and Remuneration Committee (NRC) at Company during the year under review. its meeting has appointed Shri Sunil Sikka having DIN – 08063385 as an Additional Independent Director 4 DIVIDEND: of the Company w.e.f 12th February, 2018 as per the The Board considering the Company’s performance provisions of Section 161 of the Companies Act, 2013 and financial position for the year under review, read with SEBI (Listing Obligations and Disclosure recommended a dividend pay-out of ` 2.00 per equity Requirements) Regulations, 2015. share on the enhanced equity share capital (allotment Appointment of Key Managerial Personnel (KMPs) of equity shares to the shareholders of e-SGSTL as per As per the provisions of section 203 of the Companies the sanctioned scheme of amalgamation approved by Act, 2013, following officials as named below are Key Hon’ble NCLT, Chandigarh Bench) of the company for Managerial personnel of the company during the year the year ended 2017-18 subject to approval from the under review. shareholders at the ensuing AGM. Name of the official(s) Key Managerial Personnel Together, with Corporate tax on dividend, the total (KMPs) outflow on account of equity dividend will be ` 13.12 crore. Sh. Raju Bista Managing Director

The dividend on equity shares, if approved at the ED & Group Chief Financial Annual General Meeting, will be payable to those Sh. R N Maloo Officer shareholders whose names appear on the Company’s Sh. Tarun Baldua C.E.O – Steel Operations register of members on 14th September, 2018. In Sh. Ramanjit Singh C.E.O – Lighting Operations respect of shares held in de-materialised form, the dividend shall be payable on the basis of beneficial Sr. V.P & Company ownership as at the end of 10th September, 2018, Sh. B B Singal Secretary as per the details furnished by National Securities During the year, under review, there was no change Depository Ltd./ Central Depository Services (India) in Key Managerial Personnel of the Company. Ltd. for the purpose, as on that date. 7. DECLARATION FROM INDEPENDENT DIRECTORS ON 5 BOARD MEETINGS: ANNUAL BASIS Under the Law, the Board of Directors must meet at least once in a calendar quarter and four times a year, The Company has received necessary declaration with a maximum time gap of 120 days between any from each Independent Director of the Company

ANNUAL REPORT 2017-18 47 under Section 149(7) of the Companies Act, 2013 that as formed above meet the criteria as provided in the Independent Directors of the Company meet with Regulation 18 read with Part C of Schedule II of SEBI the criteria of their Independence laid down in Section (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also meet the provisions of 149(6) of the Companies Act, 2013. Section 177 of the Companies Act, 2013. FAMILIARISE PROGRAMME FOR INDEPENDENT The Audit Committee is responsible for overseeing of DIRECTORS the company’s financial reporting process, reviewing In view of the provisions of Regulation 25(7) of SEBI the quarterly/half-yearly/ annual financial statements, reviewing with the management on the financial (Listing Obligations and Disclosure Requirements) statements and adequacy of internal audit function, Regulations, 2015 and Companies Act, 2013, a recommending the appointment / re-appointment of familiarise programme for Independent Directors was statutory auditors and fixation of audit fees along with organised during the year to make them update the reviewing and monitoring the auditor’s independence recent amendments in the provisions of the Companies and performance, reviewing the significant internal audit findings / related party transactions, reviewing Act, 2013. A detailed familiarisation programme was the Management Discussion and Analysis of financial presented by Secretarial team of the Company which condition and result of operation. Matters to be was keenly participated by every Independent Director included in Director’s Responsibility Statement form on the Board of the Company and express happiness part of the Board Report, compliance with listing over the same. The detailed familiarisation programme and other legal requirements relating to financial for Independent Directors was uploaded on the website statements, scrutiny of inter-corporate loans and investments, valuation of undertaking or assets of of the company at the following link :http://www.surya. the company. The Committee acts as a link between co.in/familiarization-programme-for-independent- the management, external and internal auditors directors/ and the Board of Directors of the Company. The Committee discussed with the external auditors their 8. COMPOSITION OF AUDIT & OTHER COMMITTEES audit methodology, audit planning and significant observations / suggestions made by them. The The Audit Committee comprises of four Directors. Committee also discussed major issues related to The names along with categories of the members at risk management and compliances and review the the meeting was as follows : functioning of Whistle Blower mechanism. Names of the Director Category As per Rule 6A of the Companies (Meeting of Board Members Identification and its Powers) Rules, 2014 and in compliance No. to regulation 23(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Sh. K. K. Narula 00098124 Chairman ; committee to recommend to grant Omnibus approval Independent – Director for proposed related party transactions which are foreseen and for unforeseen transactions as per the Sh.Tara Sankar 00157305 Member ; framed specified criteria on an annual basis Bhattacharya Independent – In addition, the Committee has discharged such other Director role/function as envisaged under Part C of Schedule Sh. Utpal K 02766045 Member ; II of SEBI (Listing Obligations and Disclosure Mukhopadhyay Independent – Requirements) Regulations, 2015 (referred to as Director ‘Listing Regulations’ with the Stock Exchange ) and the provisions of Section 177(4) of the Companies Sh. Mukesh 01951272 Member ; Non Act, 2013.Audit Committee of the Company Tripathi Independent – discharged its role and duties with great commitment Director and further any recommendations made by the All members of audit committee are financially Audit committee within the terms of its reference is literate and Shri K K Narula, Shri T S Bhattacharya and considered and approved by the Board accordingly. Shri U K Mukhopadhyay have accounting and related No recommendation of the Audit Committee is turned financial management expertise. Audit Committee down during the year under review.

48 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Nomination and Remuneration Committee their merits and achievements and promotes The composition of the Committee is as follows : excellence in their performance; d. ensure a transparent nomination process Names of the DIN Position Category Members for directors with the diversity of thought, Shri K K Narula 00098124 Chairman Non- experience, knowledge, perspective , excellence Executive, in their performance; Independent e. fulfil the Company’s objectives and goals, Shri Ravinder 02318041 Member Non- including in relation to good corporate Kumar Narang Executive, governance transparency and sustained long Independent term value creation for its stakeholders. Shri Surendra 02126149 Member Non- Singh Khurana Executive, EVALUATION CRITERIA * Independent As per the provisions of section 178(2) of the Shri Mukesh 01951272 Member Executive, Companies Act, 2013 and Clause VII & VIII of Schedule Tripathi # Non- IV of the Act read with SEBI (Listing Obligations Independent and Disclosure Requirements) 2015, Nomination * Inducted by re-constitution of the Committee by and Remuneration committee carried out annual Board of Directors w.e.f 25th January, 2018 performance evaluation of Director’s according to #Not qualified to hold membership on becoming their roles and duties on the Board of the Company Executive ; Non- Independent director on account of and in particular considered the following aspects merger of e-Surya Global steel tubes limited with the a. The skills, relevant experience, expertise and Company w.e.f. 11th January, 2018 personal qualities that will best complement The Nomination and Remuneration Committee is the position; responsible for- b. Potential conflicts of interest, and independence; • Appointment of the directors and key managerial c. Detailed background information and personnel of the Company performance track record; • Fixation of the remuneration of the directors, d. the ability to exercise sound business judgment; key managerial personnel (KMP’s) and one level e. availability to attend Board and Committee below the KMPs. meetings; and In addition, the Committee discharged such other f. appropriate experience and/or professional role/function as envisaged under Regulation 19 qualifications. read with Part D clause A of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Stakeholder’s Relationship Committee Regulations, 2015 and as per the provisions of Composition / name of members and chairperson Section 178 of the Companies Act, 2013. The Committee headed by Shri K K Narula (Non- Remuneration Policy executive – Independent Director) has the mandate Remuneration Policy as framed by the Committee to review and redress stakeholder grievances. The and approved by the Board keeping in view the Composition of the committee is as follows : provisions of Section 178 of the Companies Act, Names of the DIN Position Category 2013 and Regulation 19 read with Part D clause Members A of Schedule II of SEBI (Listing Obligations and Shri K K Narula 00098124 Chairman Non- Disclosure Requirements) Regulations, 2015. The Executive, Independent policy inter alia provides for the following : Shri Ravinder 02318041 Member Non- a. attract, recruit and retain good and exceptional Kumar Narang Executive, talent; Independent Shri Raju Bista 01299297 Member Executive, b. list down the criteria for determining the Non- qualifications, positive attributes and Independent independence of the directors of the Company; c. ensure that the remuneration of the directors, key 9. WHISTLE BLOWER POLICY (VIGIL MECHANISM) : managerial personnel and other employees is As per the provisions of Section 177(9) & (10) of the performance driven , motivates them, recognizes Companies Act, 2013, Company promotes ethical

ANNUAL REPORT 2017-18 49 behaviour in all its business activities and has put in reported by the Statutory Auditors to the Audit place a mechanism of reporting illegal or unethical Committee or the Board under section 143(12) of the behaviour. The Company has a Whistle Blower Companies Act, 2013. Policy (Vigil mechanism) wherein the directors and 11 INFORMATION ABOUT THE FINANCIAL employees are free to report violations of laws, rules, PERFORMANCE / FINANCIAL POSITION OF THE regulations or unethical conduct, actual or suspected ASSOCIATE COMPANY fraud or violation of the company’s code of conduct or ethics policy to the nodal officer. The confidentiality During the year under review, no company has become of those reporting violations is maintained and they or ceased to be its Subsidiaries, Joint Ventures or are not subjected to any discriminatory practice. The Associate Company except Surya Global Steel Tubes Company will oversee the mechanism through the Limited (an associate Company) which was merged Audit Committee and no personnel have been denied from appointed date 1st April, 2016 with the Company access to the Audit Committee. The Whistle Blower as per NCLT, Chandigarh Bench Order effective from policy of the Company may be assessed on the 11th January, 2018. website of the company at the following link:http:// www.surya.co.in/wp-content/uploads/2016/04/ 12. EXTRACT OF ANNUAL RETURN: whistle-blower-policy.pdf As per the provisions of section 92(3) of the Companies Act,2013 and rule 12(1) of the 10. DIRECTOR’S RESPONSIBILITY STATEMENT: Companies(Management and Administration) Rules, In pursuance of section 134 (5) of the Companies Act, 2014, an extract of annual return in MGT 9 as per 2013 Annexure – 1 forms part of this Board Report. The Board of Directors of the Company confirm: i. that in the preparation of the annual accounts, 13 AUDITORS AND AUDIT REPORT: the applicable accounting standards had been STATUTORY AUDITOR: followed along with proper explanations relating Pursuant to the provisions of section 139 of the Companies to material departures; Act, 2013, the members at the Annual General Meeting ii. that the Directors had selected such accounting of the Company held on 29th December 2017 appointed policies and applied them consistently and made M/s Ashok Kumar Goyal & Co, Chartered Accountants judgements and estimates that are reasonable (firm registration No. – 002777N) as Statutory Auditors of and prudent so as to give a true and fair view of the Company from the conclusion of 44th Annual General the state of affairs of the Company at the end Meeting till the conclusion of 49th Annual General Meeting, of the financial year and of the profit ofthe covering one term of five consecutive years, subject to Company for that period; ratification by the members at each intervening annual iii. that the Directors had taken proper and sufficient general meeting. care for the maintenance of adequate accounting In view of the amendment to the said section 139 through records in accordance with the provisions of this the Companies (Amendment) Act, 2017 notified on 7 May Act for safeguarding the assets of the Company 2018, ratification of auditors’ appointment is no longer and for preventing and detecting fraud and other irregularities; required. However, under section 142 of the Companies Act, 2013, a proposal is put up for approval of members for iv. that the Directors had prepared the annual authorising the Board of Directors of the Company to fix accounts on a “going concern” basis; Auditors’ remuneration for the year 2018-19 and thereafter. v. the directors, had laid down internal financial The members are requested to approve the same. controls to be followed by the company and that such internal financial controls are adequate and The Statutory Audit Report for the year 2017-18 does not were operating effectively; contain any qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors. vi. the directors had devised proper systems to ensure compliance with the provisions of all APPOINTMENT OF OTHER AUDITORS applicable laws and that such systems were COST AUDITOR adequate and operating effectively. The Board has appointed M/s R J Goel & Company Details in respect of frauds reported by auditors under (a Cost auditor firm) as Cost Auditors for conducting section 143(12) of the Companies Act, 2013 the audit of the cost records of the Company for the Dur ing the year under review, there were no frauds financial year 2017-18.

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SECRETARIAL AUDITOR: material weakness in the design or operation were Pursuant to the provisions of Section 204 of observed. the Companies Act, 2013 and the Companies The company has in place a strong and independent (Appointment and Remuneration of Managerial Internal Audit Department responsible for assessing Personnel) Rules, 2014, the Board has appointed and improving the effectiveness of internal financial Messrs S G S Associates, a firm of Company control with reference to financial statements Secretaries in Practice,to conduct Secretarial Audit of the Company for the financial year 2017-18. and governance. To maintain its objectivity and The Secretarial Audit Report for the financial year independence, the Internal Audit function reports to ended 31st March, 2018is annexed herewith and the Chairman of the Audit Committee. marked as Annexure II to this report. The Secretarial 18 PARTICULARS OF LOANS, GUARANTEES OR Audit Report(s) does not contain any qualification, INVESTMENTS: reservation or adverse remark. As per the provisions of section 186(4) read with 14. CONSERVATION OF ENERGY, TECHNOLOGY Rule 11 of the Companies (Meetings of Board and its ABSORPTION AND FOREIGN EXCHANGE OUTGO: Powers) Rules, 2014 Company has not granted any Information on Conservation of Energy, technology loan, Guarantee provided or made any investments absorption, foreign exchange earnings and outgo, is required to be given pursuant to the provisions of during the year under review. section 134 of the Companies Act, 2013, read with 19 RISK MANAGEMENT POLICY : the Companies (Accounts) Rules, 2014 are annexed In line with the provisions of Section 134(3)(n) of the hereto and marked as Annexure – III and form part of Companies Act, 2013 and Regulation 17(9) of SEBI this report. (Listing Obligations and Disclosure Requirements) 15 DETAILS RELATING TO DEPOSITS: Regulations, 2015, Company have developed a Risk As per the provisions of section 74(1) of the Companies Management Policy for ensuring sustainable business Act, 2013, Company had made prepayments, expansion with stability and to promote an upbeat repayments or outstanding unclaimed deposits on or approach towards risk mitigation and minimization. before 31st March, 2015 to all the public depositors of the Company. The main objectives of the Risk Management Policy are: At the close of the year 35 depositors aggregating to ` 13.98 lakh to whom cheques were issued but not • To ensure that all the current and future material cleared. risk exposures of the Company are identified, 16 SIGNIFICANT & MATERIAL ORDERS PASSED BY THE assessed, quantified, appropriately mitigated, REGULATORS: minimized and managed.;

During the year under review, there were no significant • To protect brand value through strategic control and material orders passed by the regulators or courts and operational policies; or Tribunals, which may impact the going concern • To establish a framework for the Company’s risk status of the Company and its operations in future. management process and to ensure company- 17 INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS wide implementation; SURYA, Internal financial controls with reference to • To ensure systematic and uniform assessment the financial statements are adequate and operate of risks related with different functions of the effectively and ensures orderly and efficient conduct Company; of its business including adherence to its policies, • To enable compliance with appropriate safeguard its assets, prevent and detect frauds and regulations, wherever applicable, through the errors, maintain accuracy and completeness of its adoption of best practices. accounting records and further enable it in timely preparation of reliable financial information. During Board assess several types of risks which the company is the year, such controls were tested and no reportable exposed to from time to time which include the following:

ANNUAL REPORT 2017-18 51 A. Technology Risk: The ever-evolving technology 20 CORPORATE SOCIAL RESPONSIBILITY POLICY : with continuous updation may lead to product To attain Company’s Corporate Social Responsibility obsolescence, if not addressed regularly. objective, Board has constituted Corporate Social B. Financial Risk: The policy rates have started Responsibility Committee (referred to as “CSR showing increasing trend in view of inflationary Committee”) as per the provisions of Section 135 of pressures, which may impact profitability. the Companies Act, 2013. C. Business Competition Risk: Both business Composition / Category / name of members and segments face competition in the market from chairperson many established as well as unorganised players. The Corporate Social Committee comprises of four D. Operational Risk: Price fluctuation in HR Coils Directors. The names along with categories of the may lead to loss in value of inventory held. members at the meeting was as follows : Reduction in prices of LED lamps may lead to loss S. Name of the DIN Category of inventory valuation. No. Member E. Regulatory Risk: Non-compliance to stringent 1 Shri Jai Prakash 00041119 Member regulatory and environment norms may result in Agarwal liabilities and loss of brand reputation. 2 Shri Raju Bista 01299297 Member 3 Shri K K Narula 00098124 Chairman F. Forex Fluctuation Risk: The Company deals in 4 Shri Mukesh 01951272 Member exports /imports of products in business and Tripathi borrowings which are subjected to currency During the last financial year four CSR Committee fluctuations. meetings were held on 30th May, 2017, 11th August G. Human Resources Risk: The Company needs 2017, 13th November, 2017 and 12th February, 2018. adequate talent to run the business. There To attain the objectives of Corporate Social is a risk labour unrest and maintaining good Responsibility in a professional and integrated industrial relations. manner CSR Committee framed the Corporate Social Adequate Mitigation plans are prepared in respect Responsibility Policy of the Company (referred to as of above stated risk and are not threatening the “CSR Policy”). existence of the organisation. “Surya Roshni Limited CSR Policy” framed as per the At Surya, the Risk Management is being integrated provisions of Section 135 and Schedule VII of the with setting of Business Strategies. Risk management Companies Act, 2013 , describes and contains the is managing all material risks in an appropriate Company’s philosophy for delivering its responsibility manner by designing and implementation of policies as a corporate citizen and lays down the guidelines, and systems around major business processes process and mechanisms for undertaking socially and assigning roles and responsibilities to process useful programmes for welfare and sustainable owners. Major steps in the framework are as under : development of the community at large. The key a. Planning & Strategizing objective is to eradicating hunger, poverty and b. Identification of Major Risks malnutrition; Promoting health care; making available safe drinking water & Sanitation; Promoting c. Assessment of Risks and Assignment of education; enhancing vocational skills & livelihood Responsibilities enhancement projects; Women empowerment; d. Development of Mitigation Plans Promoting of home and hostels for women and e. Monitoring & Reporting orphans; Reducing inequality faced by socially and The Board of the Company periodically review economically backward groups; Animal welfare / and evaluate the risk management system of the animal care; Promoting Art & Culture; Contribution Company so that the management controls the to Prime Minister Relief Fund; Rural development risks through properly defined network. Head of projects; and addressing environmental issues. Departments shall be responsible for implementation Company discharged its responsibilities through of the risk management system as may be applicable Surya Foundation a social NGO established in 1992 to their respective areas of functioning and report to with established track record of more than 25 years, the Board and Audit Committee. to undertake CSR related activities and further is an

52 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

eligible implementing agency in accordance with on arm’s length basis. During the year, the Company the provisions of section 135 of the Companies Act, had not entered into any contract / arrangement 2013 read with the Companies (Corporate Social / transaction with related parties which could be Responsibility Policy) Rules, 2014. considered material in accordance with the policy The CSR projects or programs or activities undertaken of the Company on materiality of related party by the Company as per the Company’s CSR Policy transactions. in India only, which includes Adarsh Gram Yojana, The policy on materiality of related party transactions Naturopathy, Health Camps. The Company prefer to and dealing with related party transactions as take up projects for spending the amount earmarked approved by the Board may be accessed on the for CSR at local areas and regions where the Company Company’s website at the following link: operates. http://www.surya.co.in/wp-content/ During the year under review, Company on consolidated uploads/2016/04/RPT-Policy.pdf basis spends ` 2.04 crore in which an amount of Your Directors draw attention of the members to ` 1.64 crore is spend by the company and ` 0.40 crore Note No. 48 to the financial statement which sets out is spend by e-SGSTL on corporate social activities related party disclosures. being two percent of the average net profits of the 22 ANNUAL EVALUATION OF DIRECTORS AND BOARD company(s) made during the three immediately AS A WHOLE: preceding financial years as required under the provisions of Section 135(5) of the Companies Act, Pursuant to the provisions of Section 178 of the 2013. No amount was left unspent during the year Companies Act, 2013 and Clause VII of Schedule under review on corporate social responsibility IV of the Act and in compliance with SEBI (Listing activities. Annual Report on CSR activities is annexed Obligations & Disclosure Requirements) Regulations, as Annexure IV to the Board’s Report. 2015 and other applicable regulations referred All expenses and contributions for CSR activities to as “Listing Regulations”, Nomination and are made after approval from the Chairman of the Remuneration Committee (“the Committee”) has CSR Committee, which are placed before the CSR formulated “Nomination and Remuneration Policy” committee. The Chairman ensures that the expenses/ for performance evaluation of Independent Directors, contribution made are in compliance with the CSR Board, Committees and other Individual Directors Policy. On the basis of the recommendation received 21 RELATED PARTY TRANSACTIONS : from Nomination and Remuneration Committee in regard to performance evaluation of Non- executive No contracts or arrangements or transactions not on Directors including the chairman of the Company and an arm’s length basis with Related parties referred to the Board as a whole, Independent directors at its in Section 188(1) is made during the year under review meeting review the - as provided in Form AOC-2 marked as Annexure V to the Board’s Report.  Evaluation of the Performance of the Non – Independent Directors and the Board as a Whole. As per the requirements of section 188 of the Companies Act, 2013 read with Rule 15 of the  Evaluation of the performance of the Board Companies (Meetings of Board and its Powers) Committees including Audit Committee, Rules, 2014 read with Rule 6A of the Companies Nomination and Remuneration Committee, (Meeting of Board and its Powers) Rules, 2014 and Corporate Social Responsibility Committee and Regulation 23 of SEBI (Listing Obligations and Stakeholders Relationship Committee. Disclosure Requirements) Regulations, 2015, Board  Evaluation of the Performance of the Chairman has framed Policy on Materiality of Related Party of the Company taking into account the views of Transactions and also on dealing with Related Party Executives and Non-Executive Directors. Transaction, to ensure the proper approval and  Evaluation of the quality, content and timelines reporting of transactions between the Company and of flow of information between the Management its Related Parties. and the Board that is necessary for the Board to All contracts / arrangements / transactions-entered effectively and reasonably perform its duties. by the Company during the financial year with related A separate exercise was carried out to evaluate the parties were in the ordinary course of business and performance of individual director including the

ANNUAL REPORT 2017-18 53 Chairman and Independent Directors and evaluate the read with rule 5 of the Companies (Appointment Boards Performance, Board Committees performance and Remuneration of Managerial Personnel) Rules, by the Nomination and Remuneration Committee 2014 in respect of employees of the Company, will and submit its recommendation for review at the be provided on request. In terms of Section 136 of Independent Directors meeting. the Act, the Report and Accounts are being sent to Based on the recommendations of the Nomination the Members and others entitled thereto, excluding and Remuneration Committee, Independent directors the information on employees’ particulars which at their meeting held on 28th March, 2018 review is available for inspection by the Members at the and evaluate the performance of Non-Independent Registered office of the Company during business Directors including the Chairman and further hours on all working days of the Company up to the review and evaluate the Boards Performance, Board date of the ensuing Annual General Meeting. If any Committees performance and submit its report to the member is interested in obtaining the copy thereof, Chairman of the Company for assessment. such Member may write to the Company Secretary in this regard. The performance evaluation as carried out by the Nomination and Remuneration committee and 24 LISTING WITH STOCK EXCHANGES: Independent Directors at their respective meetings The equity shares of the company were listed on the were based on Feed – back form received from following Stock Exchanges during the financial year Directors. Feed-back form carried a structured 2017-18: questionnaire prepared after taking into consideration BSE Limited The National Stock various aspects of the Board’s functioning and submit Exchange of India Ltd. their report accordingly. Rotunda Building, Dalal Exchange Plaza, Bandra- Pursuant to the provisions Section 134(3)(p) and Street, Fort, Mumbai – Kurla Complex, Bandra, Clause VIII of Schedule IV of the Companies Act, 400 001. Mumbai – 400 051. 2013 other applicable provisions of the Act and Stock Code in compliance with the provisions of Regulation 17(10), 19 and 25(4) read with Part D of Schedule National Bombay Stock ISIN II of SEBI (Listing Obligations and Disclosure Stock Exchange Requirements) Regulations, 2015 referred to as the Exchange Listing Regulations read with SEBI Circular No. SEBI/ Equity SURYAROSNI 500336 INE335A01012 HO/CFD/CMD/CIR/P/2017/004 dated 5th January, Shares- (Dematerialised) 2017on Guidance Note on Board evaluation, formal Symbol 336 (Physical) annual evaluation has been made by the Board after / Code reviewing each and every parameter of Performance evaluation of Board as a whole, its Committees The company has paid the Annual Listing Fees to both and that of every individual director (including the Stock Exchanges for the Financial Year 2017-18 Independent Directors) in detail and after taking and 2018-19. into consideration the report submitted by NRC and Independent Directors on performance evaluation, 25 CORPORATE GOVERNANCE AND SHAREHOLDERS collectively submit Comprehensive Annual Evaluation INFORMATION Performance Report in regard to its own performance, Company has taken adequate steps to adhere to all its Committees viz. Audit Committee, Nomination & the stipulations laid down in Clause 17 to 27 read with Remuneration Committee, Stakeholder’s Relationship Schedules of SEBI (Listing Obligations and Disclosure Committee, Corporate Social Responsibility Requirements) Regulations, 2015 “Listing Regulations”. A Committee and other Compliance Committees and report on Corporate Governance is provided in Annexure –VI that of individual directors including its Chairperson, and form part of this Report. Managing Director, Independent Directors and Certificate from the Statutory Auditors of the company Non-independent directors accordingly Directors confirming the compliance with the conditions of Corporate expressed deep satisfaction with the entire Governance as stipulated under Regulations read with performance evaluation process. Schedules of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report. 23 PARTICULARS OF EMPLOYEES : Company believes that its Members are among its most The information required pursuant to Section 197

54 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

important stakeholders. Accordingly your Company’s ii. As per SEBI (Listing Obligations and Disclosure operations are committed to the pursuit of achieving high Requirements) Regulations, 2015 referred to as levels of operating performance and cost competitiveness, the Listing Regulation with the Stock Exchanges, consolidating and building for growth, enhancing the the compliance certificate from Chairman, productive assets and resource base and nurturing overall Managing Director and Executive Director & corporate reputation. Your Company is also committed in Group CFO is given as Annexure – VII to the creating values for its other stakeholders by ensuing that its report. corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable 27 ACKNOWLEDGEMENTS growth and development. The Board places on record their appreciation for BOARD DIVERSITY the continued support from Financial Institutions, The Company recognises and embraces the importance Bankers, Central and State Government Bodies, of a diverse Board in its success. We believe that a Legal Advisers, Consultants, Dealers, Retailers, other truly diverse board will leverage differences in thought, Business Constituents and Investing Public. perspective, knowledge, skill, industrial experience, age, The Board also wish to place on record once again, ethnicity, gender which will help us to retain our their appreciation for the contribution made by the competitive advantage. The Board as recommended by Nomination and Remuneration Committee has workers, staff and executives at all levels, to the adopted the Board Diversity Policy which set out the continued growth and prosperity of the Company. The approach to diversity of the Board of Directors. overall industrial relations remained cordial at all the 26 GENERAL establishments. i. Your Directors state that during the year under for and on behalf of the Board of Directors review, there was no cases filed pursuant to Sexual Harassment of Women at Workplace J P AGARWAL (Prevention, Prohibition and Redressal) Act, Place: New Delhi CHAIRMAN 2013. Dated:18th May, 2018 DIN- 00041119

ANNUAL REPORT 2017-18 55 ANNEXURE – I TO BOARD’S REPORT

EXTRACT OF ANNUAL RETURN as on the financial year ended on 31st March, 2018 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN L31501HR1973PLC007543 ii) Registration Date 17th October, 1973 iii) Name of the Company SURYA ROSHNI LIMITED iv) Category / Sub-Category of the Company Manufacturing v) Address of the Registered office and contact details Prakash Nagar, Sankhol, Bahadurgarh – 124507 Haryana vi) Whether listed company Yes vii) Name, Address and Contact details of Registrar and Mas Services Limited Transfer Agent, if any T- 34, 2nd floor Okhla Industrial Area, Phase – II, New Delhi – 110020 Tel No. – (011) 26387281 /82 /83 Email : [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- SI. No. Name and Description of main NIC Code of the Product/ service % to total turnover of the company products / services 1 Pipes & Tubes 24106 59.19% 2 CR Strips 24105 13.11% 3 Lighting Products 27400 27.70%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –

SI. No. Name and address of the CIN Holding/Subsidiary % of Share Held Applicable Section Company /Associate

Nil

IV. ShareHOLDING pattern (equity share capital breakup as percentage of total equity) – I) Category wise Share Holding

Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Shareholders change during the year Deemed to be allotted Opening Balance on Total Opening Holding pursuant to Scheme Total Closing Holding Post approved pursuant to Scheme of Standalone basis of Merger as at 31.03.2017 Scheme of Merger as at 31.03.2018 Merger % of % of Total Total Demat Physical Demat Physical Demat Physical Total Shares Demat Physical Total Shares A. Promoters (1) Indian (a) Individuals/ HUF 22,16,383 - 4,66,307 - 26,82,690 - 26,82,690 4.931 26,82,690 - 26,82,690 4.931 -

56 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Shareholders change during the year Deemed to be allotted Opening Balance on Total Opening Holding pursuant to Scheme Total Closing Holding Post approved pursuant to Scheme of Standalone basis of Merger as at 31.03.2017 Scheme of Merger as at 31.03.2018 Merger % of % of Total Total Demat Physical Demat Physical Demat Physical Total Shares Demat Physical Total Shares (b) Central Government ------c) State Government ------d) Bodies Corporate 2,55,38,343 - 60,02,711 - 3,15,41,054 - 3,15,41,054 57.970 3,15,41,054 - 3,15,41,054 57.970 - e) Banks / Financial Institutions ------f) Any other (specify) ------Sub-Total (A) (1) 2,77,54,726 - 64,69,018 - 3,42,23,744 - 3,42,23,744 62.901 3,42,23,744 - 3,42,23,744 62.901 -

(2) Foreign a) NRIs - Individuals ------b) Other Individuals ------c) Bodies Corporate ------d) Banks / Financial Institutions ------e) Any other (specify) ------Sub-Total (A) (2) ------Total Shareholding of Promoter (A) = (A)(1)+(A) (2) 2,77,54,726 - 64,69,018 - 3,42,23,744 - 3,42,23,744 62.901 3,42,23,744 3,42,23,744 62.901 - (B) Public shareholding (1) Institutions a) Mutual Funds 5,27,051 886 - - 5,27,051 886 5,27,937 0.970 495 875 1,370 0.003 (0.968) b) Alternate Investment

Funds ------11,59,522 - 11,59,522 2.131 2.131 c) Banks / Financial

Institutions 30,069 1,328 - - 30,069 1,328 31,397 0.058 37,112 1,050 38,162 0.070 0.012 d) Central

Government(s) ------e) State

Government(s) ------f) Venture

Capital Funds ------

ANNUAL REPORT 2017-18 57 Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Shareholders change during the year Deemed to be allotted Opening Balance on Total Opening Holding pursuant to Scheme Total Closing Holding Post approved pursuant to Scheme of Standalone basis of Merger as at 31.03.2017 Scheme of Merger as at 31.03.2018 Merger % of % of Total Total Demat Physical Demat Physical Demat Physical Total Shares Demat Physical Total Shares g) Insurance

Companies - 3,000 - - - 3,000 3,000 0.006 - 3,000 3,000 0.006 - h) Foreign Institutional

Investors 12,13,690 - - - 12,13,690 - 12,13,690 2.231 6,09,656 - 6,09,656 1.121 (1.110) i) Foreign Venture Capital

Funds ------j) Any other (specify) : Foreign Institutional

Investors 80,281 250 - - 80,281 250 80,531 0.148 6,500 250 6,750 0.012 (0.136) Sub-Total

(B) (1) 18,51,091 5,464 18,51,091 5,464 18,56,555 3.412 18,13,285 5,175 18,18,460 3.342 (0.070)

(2) Non- institutions (a) Bodies Corporate

i) Indian 56,26,245 4,014 41,08,706 - 97,34,951 4,014 97,38,965 17.900 83,01,216 2,634 83,03,850 15.262 (2.638)

ii) Overseas ------b) Individuals - i) Individual shareholders holding nominal share capital upto

` 1 lakh 53,11,943 7,41,129 - - 53,11,943 7,41,129 60,53,072 11.125 57,80,367 5,63,489 63,43,856 11.660 0.534 ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh 19,05,090 - - - 19,05,090 - 19,05,090 3.501 30,23,211 - 30,23,211 5.556 2.055 c) Any other (specify)

58 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NRIs/OCB 3,26,995 6,251 - - 3,26,995 6,251 3,33,246 0.612 3,30,430 5,027 3,35,457 0.617 0.004 Clearing

Members 2,68,602 - - - 2,68,602 - 2,68,602 0.494 1,24,709 - 1,24,709 0.229 (0.264)

Trust 29,700 - - - 29,700 - 29,700 0.055 15,200 - 15,200 0.028 (0.027) Unclaimed Suspense or Escrow Account ------1,49,513 - 1,49,513 0.275 0.275 Sub-Total (B)

(2) 1,34,68,575 7,51,394 41,08,706 - 1,75,77,281 7,51,394 1,83,28,675 33.687 1,77,95,620 5,71,150 1,83,66,770 33.757 0.070 Total Public Shareholding (B) = (B)(1)+(B)

(2) 1,53,19,666 7,56,858 41,08,706 - 1,94,28,372 7,56,858 2,01,85,230 37.099 1,96,08,905 5,76,325 2,01,85,230 37.099 - (C) Shares held by Custodians for GDRs & ADRs ------

GRAND TOTAL

(A)+(B)+(C) 4,30,74,392 7,56,858 1,05,77,724 - 5,36,52,116 7,56,858 5,44,08,974 100.00 5,38,32,649 5,76,325 5,44,08,974 100.00 - (II) Shareholding of Promoters Sl. No Shareholders Name Shareholding at the beginning of the year Shareholding at the end of the year No. of Shares Shares Total No. % of total % of shares Total No. of % of total % of shares % change in before deemed to of shares shares of the pledged/ shares shares pledged/ shareholding Scheme of be alloted pursuant to company encumbered of the encumbered during the Amalgamation the scheme to total company to total shares year of Merger shares 1 Jai Prakash Agarwal 18,39,416 4,66,307 23,05,723 4.24 0.004 23,05,723 4.24 0.004 - 2 Urmil Agarwal 2,10,431 - 2,10,431 0.39 - 2,10,431 0.39 - - 3 Vinay Surya 1,66,536 - 1,66,536 0.31 - 1,66,536 0.31 - - 4 Pankaj Investments 9,69,348 - 9,69,348 1.78 - 9,69,348 1.78 - - Limited 5 Goel Die Cast Limited 18,80,729 47,233 19,27,962 3.54 - 19,27,962 3.54 - - 6 Viksit Trading & Holding Pvt Ltd 2,37,346 - 2,37,346 0.44 - 2,37,346 0.44 - - 7 Gargiya Finance & Investment Pvt. Ltd 5,22,487 - 5,22,487 0.96 - 5,22,487 0.96 - - 8 Lustre Merchants Pvt. Ltd. 72,394 - 72,394 0.13 - 72,394 0.13 - - 9 Sahaj Tie-up Pvt. Limited 31,16,250 8,837 31,25,087 5.74 3.492 31,25,087 5.74 3.492 -

ANNUAL REPORT 2017-18 59 Sl. No Shareholders Name Shareholding at the beginning of the year Shareholding at the end of the year No. of Shares Shares Total No. % of total % of shares Total No. of % of total % of shares % change in before deemed to of shares shares of the pledged/ shares shares pledged/ shareholding Scheme of be alloted pursuant to company encumbered of the encumbered during the Amalgamation the scheme to total company to total shares year of Merger shares 10 Shirin Commodeal Pvt Ltd 20,98,750 17,439 21,16,189 3.89 3.775 21,16,189 3.89 3.775 - 11 S M Vyapaar Private Limited 19,70,000 13,920 19,83,920 3.65 2.206 19,83,920 3.65 2.206 - 12 Diwakar Marketing 56,37,500 - 56,37,500 10.36 8.730 56,37,500 10.36 5.514 - Private Limited 13 Shreyansh Mercantile 31,78,000 - 31,78,000 5.84 - 31,78,000 5.84 - - Private Limited 14 Cubitex Marketing 48,61,000 - 48,61,000 8.93 - 48,61,000 8.93 - - Private Limited 15 Jits Courier & Finance 9,94,539 6,960 10,01,499 1.84 - 10,01,499 1.84 - - Private Limited 16 Dicord Commodeal - 22,65,610 22,65,610 4.16 - 22,65,610 4.16 - - Pvt. Ltd. 17 ZatcoVyapar Pvt. Ltd. - 14,03,455 14,03,455 2.58 - 14,03,455 2.58 - - 18 SadabaharTradecomm - 12,78,179 12,78,179 2.35 - 12,78,179 2.35 - - Pvt. Ltd. 19 B M Graphics Pvt. Ltd. - 9,61,078 9,61,078 1.77 - 9,61,078 1.77 - - TOTAL 2,77,54,726 64,69,018 3,42,23,744 62.901 18.207 3,42,23,744 62.901 14.991 -

(iii) Change in Promoters’ Shareholding (please specify, if there is no change) Sl. No Name of the Promoter Shareholding at the beginning of the year Date wise Increase / Cumulative Shareholding during the / Promoter Group Decrease in Share holding year (01-04-2017 to 31-03-2018) during the year specifying the reasons for increase / decrease (e.g allotment / transfer/bonus/ sweat equity etc.) No. of Shares Total % of total Date Increase / Reason No. of % of total Shares at the deemed Shares post shares Decrease in Shares shares of the beginning to be Scheme of of the shareholding company (01-04- allotted on Merger company 2017) pre 01.04.2016 issue Promoter Holding as 2,77,54,726 64,69,018 3,42,23,744 62.901 - - 3,42,23,744 62.901 at 01-04-2017 * Shares are allotted pursuant to approved Scheme of Merger by Hon’ble NCLT, Chandigarh Bench. No CHANGE Total Promoter 3,42,23,744 62.901 - - - 3,42,23,744 62.901 Holding as at 31-03- 2018 (iv) Shareholding Pattern of Top 10 Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

60 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Sl. No Name of the top 10 Shareholding at the beginning of the year Date wise Increase / Decrease Cumulative Shareholding during the shareholders in Shareholding during the year year (01-04-2017 to 31-03-2018) specifying the reasons for increase / decrease (e.g allotment / transfer/bonus/ sweat equity etc.) No. of Shares at the % of total Date Increase / Reason No. of % of total beginning (01-04- shares of the Decrease in Shares shares of the 2017) and end of the company shareholding company year (31-03-2018) 2 Lush Traders Private Ltd 5,69,400 1.047 1-Apr-2017 - - 5,69,400 1.047 - - 12-May-2017 (77,039) Transfer 4,92,361 0.905 19-May-2017 (21,082) Transfer 4,71,279 0.866 2-Jun-2017 (32,282) Transfer 4,38,997 0.807 9-Jun-2017 (1,06,218) Transfer 3,32,779 0.612 16-Jun-2017 (10,000) Transfer 3,22,779 0.593 23-Jun-2017 (61,757) Transfer 2,61,022 0.480 4-Aug-2017 (13,726) Transfer 2,47,296 0.455 1-Sep-2017 (66,919) Transfer 1,80,377 0.332 Date of 1,80,377 0.332 1-Sep-2017 Separation 1,80,377 0.332 3 DSP Blackrock 3 Year 4,66,505 0.857 1-Apr-2017 - - 4,66,505 0.857 Close Ended Equity 28-Apr-2017 (53,181) Transfer 4,13,324 0.760 Fund 5-May-2017 (2,59,206) Transfer 1,54,118 0.283 Date of 1,54,118 0.283 5-May-2017 Separation 1,54,118 0.283 4 Swadeshi Mercantile 4,63,048 0.851 1-Apr-2017 - - 4,63,048 0.851 Private Ltd 28-Apr-2017 (4,63,048) Transfer - - 5 Jasmine Ispat Private 4,35,527 0.800 1-Apr-2017 - - 4,35,527 0.800 Ltd 12-May-2017 (24,712) Transfer 4,10,815 0.755 19-May-2017 (27,933) Transfer 3,82,882 0.704 2-Jun-2017 (32,200) Transfer 3,50,682 0.645 9-Jun-2017 (1,03,789) Transfer 2,46,893 0.454 16-Jun-2017 (2,723) Transfer 2,44,170 0.449 23-Jun-2017 (59,757) Transfer 1,84,413 0.339 Date of 1,84,413 0.339 23-Jun-2017 Separation 1,84,413 0.339 6 Prakash Castings 4,29,002 0.788 1-Apr-2017 - - 4,29,002 0.788 private Limited 15-Sep-2017 (9,500) Transfer 4,19,502 0.771 22-Sep-2017 (61,639) Transfer 3,57,863 0.658 13-Oct-2017 (77,758) Transfer 2,80,105 0.515 20-Oct-2017 (54,500) Transfer 2,25,605 0.415 27-Oct-2017 (88,495) Transfer 1,37,110 0.252 Date of 1,37,110 0.252 27-Oct-2017 - Separation 1,37,110 0.252

7 Vikas Vijaykumar Khemani 3,11,192 0.572 1-Apr-2017 - - 3,11,192 0.572 No Movement during the year - - - 3,11,192 0.572 31-Mar-2018 - - 3,11,192 0.572 8 Mahesh DinkarVaze 2,73,000 0.502 1-Apr-2017 - - 2,73,000 0.502 12-May-2017 1,00,000 Transfer 3,73,000 0.686 11-Aug-2017 (73,000) Transfer 3,00,000 0.551 3-Nov-2017 50,000 Transfer 3,50,000 0.643 17-Nov-2017 29,000 Transfer 3,79,000 0.697 24-Nov-2017 2,000 Transfer 3,81,000 0.700 9-Feb-2018 (2,27,000) Transfer 1,54,000 0.283 Date of 1,54,000 0.283 9-Feb-2018 Separation 1,54,000 0.283 9 Swati Merchants Private Limited 2,56,500 0.471 1-Apr-17 - - 2,56,500 0.471 27-Oct-2017 (13,541) Transfer 2,42,959 0.447 3-Nov-2017 (19,435) Transfer 2,23,524 0.411 10-Nov-2017 (65) Transfer 2,23,459 0.411 24-Nov-2017 (37,303) Transfer 1,86,156 0.342

ANNUAL REPORT 2017-18 61 Sl. No Name of the top 10 Shareholding at the beginning of the year Date wise Increase / Decrease Cumulative Shareholding during the shareholders in Shareholding during the year year (01-04-2017 to 31-03-2018) specifying the reasons for increase / decrease (e.g allotment / transfer/bonus/ sweat equity etc.) No. of Shares at the % of total Date Increase / Reason No. of % of total beginning (01-04- shares of the Decrease in Shares shares of the 2017) and end of the company shareholding company year (31-03-2018) 29-Dec-2017 (21,500) Transfer 1,64,656 0.303 Date of 1,64,656 0.303 29-Dec-17 - Separation 1,64,656 0.303 10 Gryffin Advisory Services Private Limited 2,55,000 0.469 1-Apr-2017 - - 2,55,000 0.469 30-Jun-2017 70,000 Transfer 3,25,000 0.597 5-Jan-2018 (70,000) Transfer 2,55,000 0.469 Date of 2,55,000 0.469 25-Jan-2018 - Separation 2,55,000 0.469 11 SS Corporate Scurities Limited* - 1-Apr-2017 - - - - 28-Apr-2017 4,20,486 Transfer 4,20,486 0.773 5-May-2017 (3,47,333) Transfer 73,153 0.134 Date of 73,153 0.134 5-May-2017 - Separation 73,153 0.134 12 Bharat Taparia* 1,50,792 0.277 1-Apr-17 - - 1,50,792 0.277 7-Apr-2017 59,000 Transfer 2,09,792 0.386 28-Apr-2017 54,390 Transfer 2,64,182 0.486 5-May-2017 7,000 Transfer 2,71,182 0.498 23-Jun-2017 255 Transfer 2,71,437 0.499 18-Aug-2017 24,774 Transfer 2,96,211 0.544 25-Aug-2017 27,000 Transfer 3,23,211 0.594 1-Sep-2017 32,094 Transfer 3,55,305 0.653 22-Dec-2017 14,156 Transfer 3,69,461 0.679 3,69,461 0.679 31-Mar-18 - 3,69,461 0.679 13 India Whizdom Fund* - 1-Apr-2017 - - - - 5-May-2017 6,10,540 Transfer 6,10,540 1.122 12-May-2017 2,00,000 Transfer 8,10,540 1.490 19-May-2017 6,452 Transfer 8,16,992 1.502 26-May-2017 70,089 Transfer 8,87,081 1.630 9-Jun-2017 1,42,584 Transfer 10,29,665 1.892 1-Sep-2017 84,140 Transfer 11,13,805 2.047 15-Sep-2017 10,000 Transfer 11,23,805 2.065 30-Sep-2017 15,987 Transfer 11,39,792 2.095 20-Oct-2017 216 Transfer 11,40,008 2.095 27-Oct-2017 19,514 Transfer 11,59,522 2.131 11,59,522 2.131 31-Mar-2018 - - 11,59,522 2.131 14 Edelweiss Broking Limited* 2,28,998 0.421 1-Apr-2017 - - 2,28,998 0.421 7-Apr-2017 4,687 Transfer 2,33,685 0.429 14-Apr-2017 10,033 Transfer 2,43,718 0.448 21-Apr-2017 (23,417) Transfer 2,20,301 0.405 28-Apr-2017 20,765 Transfer 2,41,066 0.443 5-May-2017 62,658 Transfer 3,03,724 0.558 12-May-2017 (30,650) Transfer 2,73,074 0.502 19-May-2017 (24,686) Transfer 2,48,388 0.457 26-May-2017 (28,261) Transfer 2,20,127 0.405 2-Jun-2017 19,284 Transfer 2,39,411 0.440 9-Jun-2017 (12,540) Transfer 2,26,871 0.417 16-Jun-2017 (6,424) Transfer 2,20,447 0.405 23-Jun-2017 26,899 Transfer 2,47,346 0.455 30-Jun-2017 (18,959) Transfer 2,28,387 0.420 7-Jul-2017 577 Transfer 2,28,964 0.421 14-Jul-2017 37,054 Transfer 2,66,018 0.489 21-Jul-2017 (48,758) Transfer 2,17,260 0.399

28-Jul-2017 (5,469) Transfer 2,11,791 0.389

62 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Sl. No Name of the top 10 Shareholding at the beginning of the year Date wise Increase / Decrease Cumulative Shareholding during the shareholders in Shareholding during the year year (01-04-2017 to 31-03-2018) specifying the reasons for increase / decrease (e.g allotment / transfer/bonus/ sweat equity etc.) No. of Shares at the % of total Date Increase / Reason No. of % of total beginning (01-04- shares of the Decrease in Shares shares of the 2017) and end of the company shareholding company year (31-03-2018) Date of 2,11,791 0.389 28-Jul-2017 - Separation 2,11,791 0.389 15 Soyuz Trading Company Limited* 1,62,686 0.299 1-Apr-2017 - - 1,62,686 0.299 5-May-2017 (81,500) Transfer 81,186 0.149 16-Jun-2017 24,987 Transfer 1,06,173 0.195 23-Jun-2017 16,716 Transfer 1,22,889 0.226 30-Jun-2017 96,648 Transfer 2,19,537 0.403 28-Jul-2017 45,129 Transfer 2,64,666 0.486 4-Aug-2017 93,764 Transfer 3,58,430 0.659 15-Dec-2017 (1,545) Transfer 3,56,885 0.656 19-Jan-2018 1,11,977 Transfer 4,68,862 0.862 4,68,862 0.862 31-Mar-2018 - - 4,68,862 0.862 16 Khemani Distributors and Marketing Ltd. - 1-Apr-2017 - - - - 4-Aug-2017 2,08,600 Transfer 2,08,600 0.383 8-Sep-2017 (4,705) Transfer 2,03,895 0.375 20-Oct-2017 4,705 Transfer 2,08,600 0.383 8-Dec-2017 (31,827) Transfer 1,76,773 0.325 15-Dec-2017 (9,924) Transfer 1,66,849 0.307 5-Jan-2017 41,751 Transfer 2,08,600 0.383 Date of 2,08,600 0.383 25-Jan-2018 - Separation 2,08,600 0.383 17 Vibgyor Investors and - 1-Apr-2017 - - - - Developers Pvt Ltd* 8-Sep-2017 4,00,000 Transfer 4,00,000 0.735 4,00,000 0.735 31-Mar-2018 - - 4,00,000 0.735 18 Pramod Chimmanlal - 1-Apr-2017 - - - - Gupta* 24-Nov-2017 1,53,000 Transfer 1,53,000 0.281 8-Dec-2017 51,000 Transfer 2,04,000 0.375 Date of 2,04,000 0.375 25-Jan-2018 - Separation 2,04,000 0.375 19 Raxon Motor Finance - 1-Apr-2017 - - - - Private Limited* Scheme of 25-Jan-2018 15,37,959 Merger 15,37,959 2.827 31-Mar-2018 (1,000) Transfer 15,36,959 2.825 15,36,959 2.825 31-Mar-2018 - - 15,36,959 2.825 20 Henco Commercials - 1-Apr-2017 - - - - Private Limited* Scheme of 25-Jan-2017 14,71,020 Merger 14,71,020 2.704 23-Feb-2018 18,626 Transfer 14,89,646 2.738 23-Mar-2018 (1,000) Transfer 14,88,646 2.736 14,88,646 2.736 31-Mar-2018 - - 14,88,646 2.736 21 Prajin Barter Private - 1-Apr-2017 - - - - Limited* Scheme of 25-Jan-2018 7,05,599 Merger 7,05,599 1.297 7,05,599 1.297 31-Mar-2018 - - 7,05,599 1.297 22 Ashika Credit Capital Limited* - 1-Apr-2017 - - - -

9-Feb-2018 3,00,000 Transfer 3,00,000 0.551 16-Feb-2018 1,00,000 Transfer 4,00,000 0.735 9-Mar-2018 19,600 Transfer 4,19,600 0.771 4,19,600 0.771 31-Mar-2018 - - 4,19,600 0.771 * Not in the list of Top 10 shareholders as on 01-04-2017. The same has been reflected above since the shareholder was one of the Top 10 shareholders during the year ended 31st March, 2018

ANNUAL REPORT 2017-18 63 v) Shareholding of Directors and Key Managerial personnel

Sr. No Name of the Directors and KMP Director Shareholding at the beginning of the year as at Shareholding at the end of % change in Identification 01.04.2017 the year as at 31.03.2018 shareholding No. (DIN) No. of Shares Shares % of total Total No. of % of total during the Shares deemed to deemed to shares shares shares year before be alloted be alloted of the of the Scheme of pursuant to pursuant to company company Merger Scheme of Scheme of Merger Merger Directors 1 Jai Prakash Agarwal (Executive Chairman 00041119 18,39,416 4,66,307 23,05,723 4.24 23,05,723 4.24 - ) 2 Raju Bista (Managing Director) 01299297 - - - - 3 Urmil Agarwal 00053809 2,10,431 - 2,10,431 0.39 2,10,431 0.39 - 4 Ravinder Kumar Narang 02318041 ------5 Krishan Kumar Narula 00098124 ------6 Utpal Kumar Mukhopadhyay 02766045 ------7 Tara Sankar Bhattacharya 00157305 ------8 Sudhanshu Kumar Awasthi 02162923 ------9 Surendra Singh Khurana 02126149 - - - - 40 0.00 0.00 10 Shivani Singla * 07715894 ------11 Rajeev Kumar Sinha* 01334549 ------12 Sunil Sikka 08063385 - - - - 12,500 0.02 0.02 13 Mukesh Tripathi 01951272 ------Key Managerial Personnel (KMPs) a R N Maloo (ED & Group CFO) ------b Ramanjit Singh (CEO- Lighting & ------Consumer Durables Segment) c Tarun Baldua (CEO- Steel Pipes & Strips ------Segment) d B B Singal ( Sr. V.P & Company Secretary) ------*Withdrawal of Nomination of Mr. Rajeev Kumar Sinha by substitution of the Nominee Director Smt. Shivani Singla on the Board w.e.f 11th December, 2017 V. INDEBTEDNESS Indebtedness of the Company holding interest outstanding / accrued but not due for payment (` iin crore) Secured Loans Unsecured Loans Deposits Total Indebtedness excluding deposits Indebtedness at the beginning of the financial year i) Principal Amount 1070.90 - - 1070.90 ii) Interest due but not paid - - - - iii)Interest accrued but not 4.32 - - 4.32 due Total (i+ ii+iii) 1075.22 - - 1075.22 Change in Indebtedness during the financial year Addition 113.71 - - 113.71 Reduction 88.43 - - 88.43 Net Change 25.28 - - 25.28 Indebtedness at the end of the financial year i) Principal Amount 1097.39 - - 1097.39 ii) Interest due but not paid - - - - iii)Interest accrued but not 3.11 - - 3.11 due Total (i+ ii+iii) 1100.50 - - 1100.50

64 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Directors , Whole Time Director and / or Manager (` iin crore) Sl. No Particulars of the Remuneration Name of MD/WTD / Manager Total Amount Jai Prakash Agarwal Raju Bista Mukesh Tripathi # 1 Gross Salary Executive Chairman Managing Director Whole-time Director (a) Salary as per the provisions contained in section 17(1) of the 3.30 1.92 0.98 6.20 Income Tax Act, 1961 (b) Value of perquisites u/s 17(2) - - - - Income Tax Act, 1961 (c)Profits in lieu of salary under - - section 17(3) Income Tax Act, 1961 2 Stock Option - - - - 3 Sweat Equity - - - - 4 Commission - as % of profit (to be paid in FY 2.34 1.56 - 3.90 2018-19) - others, specify - - - -

5 Others, please specify - - - Total (A) 5.64 3.48 0.98 10.10 Ceiling as per Act 15.62 # Mukesh Tripathi is becoming Executive Non-Independent Director on account of merger of e-Surya Global Steel Tubes Limited (SGSTL) w.e.f 11th January, 2018 as per approved scheme of Merger by Hon’ble NCLT Chandigarh Bench and draws Salary of `. 0.98 crore during the financial year ended 31st March, 2018 of which` . 0.76 crore is drawn by him from e-SGSTL upto the effective date of merger i.e 11th January, 2018 B. Remuneration to Other Directors (` iin crore) Sl. No Particulars of the Remuneration Name of Directors Total Amount Krishan Ravinder Utpal Kumar Tara Sankar Sudhanshu Surendra Sunil IDBI Urmil Kumar Kumar Mukhopadhyay Bhattacharya Kumar Singh Sikka* Nominee Agarwal Narula Narang Awasthi Khurana Independent Directors 0.0565 0.0270 0.0150 0.0220 0.0200 0.0220 0.0080 - - 0.1705 Fees for attending board / committee meetings Commission ------Others ------Total (1) 0.0565 0.0270 0.0150 0.0220 0.0200 0.0220 0.0080 - - 0.1705 Other Non Executive Directors ------0.0100 0.0090 0.0190 Fees for attending board / committee meetings Commission ------Others ------Total (2) ------0.0100 0.0090 0.0190 Total (B) = (1+2) 0.0565 0.0270 0.0150 0.0220 0.0200 0.0220 0.0080 0.0100 0.0090 0.1895 Total Managerial Remuneration 0.1895 (Sitting Fees) Overall Ceiling as per the Act NIL * Appointed as Additional Independent Director on the Board of the Company w.e.f 12th February, 2018

ANNUAL REPORT 2017-18 65 C. Remuneration to Key Managerial Personnel other than MD/ Manager/WTD (` iin crore) Sr. No Particulars of Remuneration Key Managerial Personnel Total R N Maloo Ramanjit Singh Tarun Baldua B B Singal ED & GCFO CEO-Lighting CEO-Steel Sr. V.P & Company Operations Operations Secretary 1 Gross Salary a) Salary as per the provisions contained in 0.70 1.18 0.89 0.34 3.11 section 17(1) of the Income Tax Act, 1961 - - - - - b) Value of perquisites u/s 17(2) Income Tax Act, 1961 - c) Profits in lieu of salary under section 17(3) Income Tax Act, 1961 - - - - 2 Stock Option - - - - - 3 Sweat Equity - - - - - 4 Commission ------as % of profit ------others, specify 5 Others - - - - - Total (C) 0.70 1.18 0.89 0.34 3.11 VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES. There are no penalties, punishment or compounding of offences during the year ended 31st March, 2018.

for and on behalf of the Board of Directors

J P AGARWAL Place: New Delhi CHAIRMAN Dated:18th May, 2018 DIN- 00041119

66 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

ANNEXURE – II TO BOARD’S REPORT

Form No. MR-3 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

TO Takeovers) Regulations,2011 THE MEMBERS (b) The Securities and Exchange Board of India SURYA ROSHNI LIMITED (Prohibition of Insider Trading ) Regulations, 2015; PRAKASH NAGAR, SANKHOL (c) The Securities and Exchange Board of India BAHADURGARH, HARYANA-124507 (Issue of Capital and Disclosure Requirements) We have conducted the secretarial audit of the compliance Regulations ,2009 (Not applicable to the of applicable statutory provisions and the adherence to Company during the Audit Period); good corporate practices by M/S SURYA ROSHNI LIMITED (d) The Securities and Exchange Board of India (hereinafter called the Company). Secretarial Audit was (Employee Stock Option Scheme and Employee conducted in a manner that provided us a reasonable Stock Purchase Scheme) Guidelines, 1999 (Not basis for evaluating the corporate conducts/statutory applicable to the Company during the Audit compliances and expressing our opinion thereon. Period) Based on our verification of the company’s books, papers, (e) The Securities and Exchange Board of India minute books, forms and returns filed and other records (Issue and Listing of Debt Securities) Regulations, maintained by the company and also the information 2008;(Not applicable to the Company during the provided by the Company, its officers, agents and authorised Audit Period) representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during (f) The Securities and Exchange Board of India the audit period covering the financial year ended on 31st (Registrars to an Issue and Share Transfer March, 2018 (“audit period”) complied with the statutory Agents) Regulations,1993 regarding the provisions listed hereunder and also that the Company Companies Act and dealing with client; has proper Board-processes and compliance-mechanism (g) The Securities and Exchange Board of India in place to the extent, in the manner and subject to the (Delisting of Equity Shares) Regulations,2009 reporting made hereinafter: (Not applicable to the Company during the Audit We have examined the books, papers, minute books, forms Period);and and returns filed and other records maintained by the (h) The Securities and Exchange Board of India Company for the financial year ended on 31st March,2018 (Buy back of Securities) Regulations, 1998 (Not according to the provisions of: applicable to the Company during the Audit (i) The Companies Act, 2013 (the Act) and the rules Period). made thereunder; We have also examined compliance with the applicable (ii) The Securities Contracts (Regulation) Act, 1956 clauses of the following: (‘SCRA’) and the rules made thereunder; (i) Secretarial Standards issued by The Institute of (iii) The Depositories Act, 1996 and the Regulations and Company Secretaries of India. Bye-laws framed thereunder; (ii) The Listing Regulations, as applicable entered into (iv) Foreign Exchange Management Act, 1999 and by the Company with Stock Exchanges as per SEBI the rules and regulations made there under to the (Listing Obligations and Disclosure Requirements) extent of Foreign Direct Investment, Overseas Direct Regulations, 2015 Investment and External commercial Borrowings; During the period under review the Company has complied (v) The Following regulations and guidelines prescribed with the provisions of the Act, Rules, Regulations, under the Securities and Exchange Board of India Act, Guidelines, Standards, etc. as mentioned above. 1992. We further report that, having regard to the compliance (a) The Securities and Exchange Board of India system prevailing in the Company and on examination of (Substantial Acquisition of Shares and the relevant documents and records in pursuance thereof,

ANNUAL REPORT 2017-18 67 on test-check basis, the Company has complied with the company’s affairs in pursuance of the above referred laws, following laws applicable specifically to the Company: rules, regulations, guidelines, standards, etc; (a) The Explosives Act 1. The Company has merged e-Surya Global Steel (b) The Indian Boilers Act Tubes Limited (SGSTL) as per sanctioned Scheme of Arrangement for Amalgamation by Hon’ble National We further report that the Board of Directors of the Company Company Law Tribunal (NCLT) Chandigarh Bench is duly constituted with proper balance of Executive vide its Order dated 11th December, 2017 and the said Directors, Non-Executive Directors and Independent merger is effective from 11th January, 2018 having Directors. The changes in the composition of the Board of its Appointed date 1st April, 2016 and accordingly Directors that took place during the period under review for compiling our report to our satisfaction we have were carried out in compliance with the provisions of the examined books / records / registers of the transferor Act. Company maintained for the FY 2017-18 prior to the Adequate notice is given to all directors to schedule the date of merger. Board Meetings, agenda and detailed notes on agenda 2. 1,05,77,724 Equity Shares are allotted by the Board of were sent at least seven days in advance and a system Directors on 25th January, 2018 to the shareholders exists for seeking and obtaining further information and of e-Surya Global Steel Tubes Limited (Transferor clarifications on the agenda items before the meeting and Company) on merger with the Company as per for meaningful participation at the meeting. Scheme of Amalgamation approved by Hon’ble NCLT. All decisions at Board Meetings and Committee Meetings Chandigarh Bench vide its order dated 11th December, are carried out unanimously as recorded in the minutes of 2017. Accordingly, Issued and Listed Capital of the the meetings of the Board of Directors or Committee of the Company increased to 5,44,08,974 from 4,38,31,250 Board, as the case may be. of `. 10/- each and the listing & trading approval of We further report that there are adequate systems and the same has been received on 12th February, 2018 processes in the Company commensurate with the size from BSE and NSE. and operations of the Company to monitor and ensure For SGS ASSOCIATES compliance with applicable laws, rules, regulations and Company Secretaries guidelines. D.P. Gupta We further report that during the audit period the Company Date: 18th May, 2018 M N FCS 2411 has following major events having a major bearing on Place: New Delhi C P No. 1509

68 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

ANNEXURE III TO BOARD’S REPORT

Particulars of Energy Conservation, Technology Absorption - Control the air conditioner units (a.c.) by and Foreign Exchange Earnings and Outgo as per Section control the a.c. unit running hours. 134(3)(m) read with Companies(Accounts) Rules 2014and - Control high-low water level of ETP water forming part of the Directors’ Report for the year ended tank by providing wireless water level 31st March, 2018. controller. I. CONSERVATION OF ENERGY At Malanpur Unit of Lighting Division : Energy conservation dictates how efficiently a - To control the speed of Vitrite glass Crusher company can conduct its operations. Surya Roshni In batch House of Cap plant, drive to half Limited has recognised the importance of energy frequency is used resulted in saving of conservation in decreasing the deleterious effects of energy. global warming and climate change. The Company - Cap Plant- In Hockley Machine Dryer Speed has undertaken various energy efficient steps that Increased with the Help of Drive, thus strengthen the Company’s commitment towards increased the Production Capacity of the becoming an environment friendly organisation. Hockley Machine and also energy of 3.5kw a) Energy conservation measures taken : is saved. At Steel Pipes & Strips Segment, Bahadurgarh - Replacement of hopper Limit Switch from Unit: Limit Switch with the Probe Type Sensor at - Installation of Solar Based Energy reduces Cap Plant -in Pinning Machines resulted in purchase of 25000 units p.m. (approx.) saving of energy. from market and thus saves energy cost. At Kashipur Unit of Lighting Division : - Saving of energy is achieved by replacement - Saving of energy by installing 11 kw Kaeser of Cutting DC Motor with normal motor with compressor ( 71 cfm ) in place of 25 kw drive at mill no.5. (161 cfm )in PVC plant. - Saving of energy is achieved by installation - Saving of energy by weekly maintenance of of PLC, Motor at Mill No.2 Air cooling plant. - Replacement of Conventional lights with - Saving of energy through Improvement in LED helps in saving of energy. insulation of hot air ducting for TL- coating At Steel Pipe Unit, Hindupur : drying chamber - State of the art-technological plant having - Modification of GE Baker to fixed bed baker the inverter technology in all the pipe mills, (26 MM DIA) and thus saves energy. which itself good enough to save power b) Steps taken by the Company for utilising consumption in pipe mill. alternate source of energy : - Highly efficient IE-3 grade motors are used Company is exploring options to use Solar Based which are more efficient and power saving. Energy as an alternate source of energy in future. - Illumination system of LED is used in the c) The Capital Investment on energy conservation plant resulted in saving of power equipment’s : At Steel Pipe Unit, Anjar (Kutchh- Gujarat): No investment on energy conservation equipment’s are made by the company during - Purchase the power through open access the year by power trading to reduce the energy cost. II. TECHNOLOGY ABSORPTION - Provide the VFD for High pressure pump at Hydro tester-8 to control the motor speed Efforts made in technology absorption as per Rules : in ideal time. 1. Research and Development (R&D) - Provide the LED lights to reduce the lighting a) Specific areas in which R&D carried out by consumption and maintenance cost. the company : - Plugging of leakages of compressed air in During the year under review, development/ ERW, Spiral and GI plant. completion of products,/projects in the field

ANNUAL REPORT 2017-18 69 of energy efficient Light Sources and b) Benefits derived as a result of the above Luminaries & its application including LED efforts, e.g. product improvement, cost Lighting System has been carried out. reduction, product development, import substitution etc. : b) Benefits derived as a result of above R&D : There were various benefits derived as a Developed / modified energy efficient result of the efforts listed above, some environment friendly lighting products. of them included better utilisation of the c) Future Plan of action : available resources, product improvement Research and Development activities in and development, cost reduction, better future at a modern, world-class, in-house overall efficiency. Research & Development centre in Noida is c) In case of imported technology (imported in the field of energy efficient Light Sources during the last 3 years reckoned from the and Luminaries & its application including beginning of the financial year) : Nil LED Lighting System. III. FOREIGN EXCHANGE EARNINGS AND OUTGO d) Expenditure on R&D : a) Activities relating to exports, initiatives taken to Capital as well as Revenue expenditure made increase export, development of new markets on R&D. Capital Expenditure during the year for products and services and export plans : is `. 0.05 crore and Revenue Expenditure is Major initiatives were taken to boost the exports `. 3.36 Crore of the company. Some of them included: 2. Technology absorption, adaptation & innovation: - Emphasis has been given on Foreign Traveling of Export Executives and Directors a) Efforts, in brief, made towards technology for development of new markets. absorption, adaptation & innovation : - The Company has participated in the Major initiatives are being taken to conferences and exhibitions organised in upgrade the various processes by making various foreign countries. use of latest and better techniques. b) Total foreign exchange used and earned (` in Efforts are constantly being made to Crore) make the maximum use of the available Used : 324.22 Earned: 704.06 infrastructure, at the same time innovating new techniques to bring about efficiency for and on behalf of the Board of Directors as well as economy in different areas. Employees are given appropriate training of J P AGARWAL and on the job, to enable them to achieve Date: 18th May, 2018 CHAIRMAN the planned performance. Place: New Delhi DIN – 00041119

70 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

ANNEXURE –IV TO BOARD’S REPORT

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITIES (CSR) ACTIVITIES FOR THE FINANCIAL YEAR 2017-18 “Surya Roshni Limited CSR Policy”describes and contains empowerment;Promoting of home and hostels for women the Company’s philosophy for delivering its responsibility and orphans;Reducing inequality faced by socially and as a corporate citizen and lays down the guidelines, economically backward groups;Animal welfare /animal process and mechanisms for undertaking socially useful care;Promoting Art & Culture;Contribution to Prime programmes for welfare and sustainable development Minister Relief Fund;Rural development projects; and of the community at large. The key objective is to addressing environmental issues. The detailed Corporate eradicating hunger, poverty and malnutrition;Promoting Social Responsibility Policy of the Company is available at the following link health care; making available safe drinking water & Sanitation;Promoting education; enhancing vocational http://www.surya.co.in/wp-content/uploads/2016/04/ skills & livelihood enhancement projects;Women CSR-POLICY.pdf

Composition: The Corporate Social Responsibility Committee shall consist of four directors amongst whom, one shall be an Independent Director. S. No. Name Category Designation 1 Shri Jai Prakash Agarwal Member Chairman & Whole-time Director 2 Shri Raju Bista Member Managing Director 3 Shri K K Narula Member Independent Director 4 Shri Mukesh Tripathi Member Non-Independent Director

(` in crore) Average Net Profit of the Company for last three financial years 79.87 Prescribe Amount of CSR expenditure (2% of Average) 1.60 On account of merger of e-Surya Global Steel Tubes Limited (e-SGSTL) with the Company as per approved Scheme of Amalgamation by Hon’ble NCLT, Chandigarh Bench vide its Order dated 11th December, 2017, the said merger is completed and effective from 11th January, 2018 having its appointed date 1st April, 2016. Accordingly, the prescribed amount of expenditure to be incurred by e-SGSTL on CSR activities for the FY 2017-18 and the amount spend by it up to the date of effective merger is as follows : (` in crore) Average Net Profit of e-SGSTL for last three financial years 21.88 Prescribe Amount of CSR expenditure (2% of Average) 0.44 As the merger of e-SGSTL with the Company having its appointed dated 1st April, 2016, hence the amount to be spent by the Company on Consolidated Basis for the FY – 2017-18 is as follows: (` in crore) Average Net Profit of the Company (Post merger of e-SGSTL) for last three financial years 101.78 Prescribe Amount of CSR expenditure (2% of Average) 2.04 Details of CSR Spent during the financial year 2.04 Total Amount to be spent for the financial year 2.04 Amount unspent if any Nil Manner in which amount spent during the financial year As Mentioned below

ANNUAL REPORT 2017-18 71 Details of Amount Spent on CSR Activities during the Financial Year 2017-18 in respect of Surya Roshni Limited (` in crore) (1) (2) (3) (4) (5) (6) (7) (8) Sr. CSR project or Sector in which Projects or programs Amount outlay Amount spent Cumulative Amount spent: No activity the Project is (1) Local area or other (budget) on the projects expenditure Direct or covered identified (2) Specify the State and project or or Programs upto to the through district where projects or programs Sub heads: reporting implementing programs was undertaken wise (1)Direct period agency expenditure on projects or programs. (2) Overheads: 1 ADARSH GRAM PROMOTING HARYANA- 1.83 1.83 1.83 Implementing YOJNA (RURAL EDUCATION Agency- DEVELOPMENT) BAHADURGARH, JHAHHAR, & RURAL ROHTAK, SONIPAT, SURYA DEVELOPMENT FOUNDATION HISSAR, & YOUTH UTTRAKHAND- DEVELOPMENT, PERSONALITY KASHIPUR, UDHAM SINGH DEVELOPMENT NAGAR, & CHARACTER MADHYA PRADESH- BUILDING BHIND, VIDISHA, RISEN, OF YOUTH, GWALIOR SHIVPURI, IMPROVING SIHORE,,INDORE,MALANPUR THE LITERACY GUJARAT- RATE, HELPING THEM IN KUTCHH, ARRVALI, DEVELOPMENT MANIPUR- OF THEIR BISHNUPUR, KAKCHING VILLAGE, RAJASTHAN PROMOTE BIKANER, JAIPUR,JODHPUR RURAL SPORTS ETC BIHAR EAST CHAMPARAN MAHARASHTRA- NAGPUR, AMRAVATI ,RAIGARH, AHMEDNAGAR ,RAMTEK CHATTISGARH-, KAWARDHA, RAJNANDGAON RAIPUR , ORISSA- GANJAM JHARKHAND KHUNTI, RAMGARH, JAMSEDPUR, BIRSANAGAR

72 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

(` in crore) (1) (2) (3) (4) (5) (6) (7) (8) Sr. CSR project or Sector in which Projects or programs Amount outlay Amount spent Cumulative Amount spent: No activity the Project is (1) Local area or other (budget) on the projects expenditure Direct or covered identified (2) Specify the State and project or or Programs upto to the through district where projects or programs Sub heads: reporting implementing programs was undertaken wise (1)Direct period agency expenditure on projects or programs. (2) Overheads: UTTAR PRADESH AMETHAI, , BARABANKI, BAREILLY, , FATEHPUR, GAUTAM BUDH NAGAR , GONDA, GORAKHPUR, HAMIRPUR,, MATHURA LAKHIMPUR KHERI, HARDOI LUCKNOW, MEERUT, KANPUR, MORADABAD, SAMLI, VARANASI, KAUSHMBI BIJNORE,PILIBHET

2. NATUROPATHY PROMOTING Implementing NATUROPATHY WORKSHOP EXPENSES PREVENTIVE Agency- &INTERNATIONAL DAY OF 0.14 0.14 0.14 HEALTH CARE, SURYA YOGA PROMOTE YOGA FOUNDATION 3. OTHER Implementing ADMINISTRATION Agency- DELHI 0.07 0.07 0.07 EXPENSES SURYA FOUNDATION Total 2.04 2.04 2. Company had spent during the year the an amount of ` 2.04 crore on corporate social activities being not less than two percent of the average net profits of the Company made during the three immediately preceding financial years as required under the provisions of section 135(5) of the Companies Act, 2013. No amount was left unspent during the year under review on corporate social responsibility activities. 3. The responsibility statement of the Corporate Social Responsibility (CSR) committee of the Board of Directors of the Company is reproduced below : “The implementation and monitoring of Corporate Social Responsibility (CSR) policy is in compliance with CSR objectives and Policy of the Company.”

K K Narula Raju Bista Chairman – CSR Committee Managing Director (DIN – 00098124) (DIN – 01299297)

for and on behalf of the Board of Directors J P Agarwal Place : New Delhi Chairman Dated : 18th May, 2018 DIN-00041119

ANNUAL REPORT 2017-18 73 ANNEXURE -V TO BOARD’S REPORT

FORM NO. AOC - 2 Disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso there to (Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014) 1. Details of contracts or arrangements or transactions not at arm's length basis (a) Name(s) of the related party and nature of relationship: Nil (b) Nature of contracts/arrangements/transactions : Nil (c) Duration of the contracts/arrangements/transactions : Nil (d) Salient terms of the contracts or arrangements or transactions including the value, if any: Nil (e) Justification for entering into such contracts or arrangements or transactions :N.A (f) Date(s) of approval by the Board : N.A (g) Amount paid as advances, if any: Nil (h) Date on which the special resolution was passed in general meeting as required under first provision to section 188 :N.A 2 Details of material contracts or arrangement or transactions at arm's length basis (a) Name(s) of the related party and nature of relationship : Nil (b) Nature of contracts/arrangements/transactions : N.A (c) Duration of the contracts/arrangements/transactions : N.A (d) Salient terms of the contracts or arrangements or transactions including the value, if any : N.A (e) Date(s) of approval by the Board, if any : NA (f) Amount paid as advances, if any : NIL

for and on behalf of the Board of Directors J P Agarwal Place : New Delhi Chairman Dated : 18th May, 2018 DIN-00041119

74 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

ANNEXURE – VI TO BOARD’S REPORT ON CORPORATE GOVERNANCE

1. Corporate Governance Philosophy Executive – Non Independent Directors. Chairman is The Company is committed to good Corporate an Executive Director and the number of Independent Governance. The Company fully realizes the rights of Non-Executive Directors on the Board is more or equal its shareholders to information on the performance to 50% of the Board strength at any point of time. All of the Company and considers itself a trustee of Independent Non-Executive Directors possess the its shareholders. The Company provides detailed requisite qualification and are very experienced in information on various issues concerning the their respective fields and further comply with the Company’s business and financial performance, to legal requirements for being “independent”. Neither its shareholders. The basic philosophy of Corporate Independent Directors nor their relatives do not Governance in the Company is to achieve the have any pecuniary relationships or transactions business excellence and dedicate itself for increasing either with the Company or its associate or with long term shareholder value, keeping in view the the promoters/management that may affect needs and interests of its stakeholders. The Company their judgment in any manner. The non-executive is committed to transparency in all its dealings and independent directors of the Company satisfied the places emphasis on business ethics. This chapter definition of independent directors as provided in constitutes your Company’s compliance under Section 149(6) of the Companies Act, 2013 read with Regulation 17 to 27 read with clause C of schedule Regulation 16(1)(b) SEBI (Listing Obligations and V of SEBI (Listing Obligations and Disclosure Disclosure Requirements) Regulations, 2015. Requirements) Regulations, 2015. The Composition of the Directors on the Board, are 2. Board of Directors summarised as below: a. Composition and Category of Directors as on 31st Total No. of Directors 12 March, 2018 Sh. Jai Prakash Executive Chairman Agarwal The Board consists of 12 Directors as on 31st Managing Director Sh. Raju Bista March, 2018. The composition of the Board is in No. of Independent 7 (> 50% of Board conformity with Regulation 17 read with clause C(2) Directors Strength (a) of Schedule V of SEBI (Listing Obligations and (Chairman being Executive) Disclosure Requirements) Regulations, 2015. The day No. of Non-Executive 9 ( > 50% of Board to day management of the company was carried by 3 Directors Strength)

The names along with categories of the Directors on the Board, are given below : Name of the Directors Director Identification No. (DIN) Category of Directors Sh. Jai Prakash Agarwal 00041119 Promoter; Executive; Non-Independent (Executive Chairman ) Sh Raju Bista 01299297 Executive; Non-Independent (Managing Director) Smt. Urmil Agarwal 00053809 Non-Executive; Non-Independent Sh. Krishan Kumar Narula 00098124 Non-Executive – Independent Sh. Ravinder Kumar Narang 02318041 Non-Executive Independent Sh. Utpal K Mukhopadhyay 02766045 Non-Executive Independent Sh. Tara Sankar Bhattacharya 00157305 Non-Executive Independent Sh. Sudhanshu Kumar Awasthi 02162923 Non-Executive Independent Sh. Surendra Singh Khurana 02126149 Non-Executive Independent Sh. Rajeev Kumar Sinha* 01334549 Non-Executive; Non-Independent (IDBI Nominee in the capacity as lender) Smt. Shivani Singla * 07715894 Non-Executive; Non-Independent (IDBI Nominee in the capacity as lender) Sh. Sunil Sikka $ 08063385 Non-Executive; Independent Sh Mukesh Tripathi # 01951272 Executive; Non-Independent * Withdrawal of Nomination of Shri Rajeev Kumar Sinha by IDBI Bank Limited by substitution of the Nominee Director Smt. Shivani Singla on the Board of the Company w.e.f 11th December, 2017 $ Appointed as Additional Independent Director on the Board of the Company w.e.f 2th February, 2018

ANNUAL REPORT 2017-18 75 # Becoming Executive; Non- Independent director on account of merger of e-Surya Global Steel Tubes Limited with the Company w.e.f. 11th January, 2018 as per approved scheme of amalgamation by Hon’ble NCLT Chandigarh Bench. b. Attendance of each Director at Board Meetings held during the year 2017-18 and last AGM The names of the Directors on the Board and their attendance at Board meetings during the year 2017-18 and at the last AGM are as under : Name of the Directors Director Identification No. No. of Board Meetings Last AGM attendance (DIN) attended during 2017-18 As on 29.12.2017 Sh. Jai Prakash Agarwal 00041119 5 NO (Executive Chairman ) Sh Raju Bista 01299297 5 YES (Managing Director) Smt. Urmil Agarwal 00053809 3 NO Sh. Krishan Kumar Narula 00098124 5 YES Sh. Ravinder Kumar Narang 02318041 4 NO Sh. Utpal K Mukhopadhyay 02766045 2 NO Sh. Tara Sankar Bhattacharya 00157305 3 NO Sh. Sudhanshu Kumar Awasthi 02162923 5 NO Sh. Surendra Singh Khurana 02126149 5 NO Sh. Rajeev Kumar Sinha* 01334549 2 NO (IDBI Nominee in the capacity as lender) NO Smt. Shivani Singla * 07715894 1 NO (IDBI Nominee in the capacity as lender) NO Sh. Sunil Sikka $ 08063385 1 NO Sh Mukesh Tripathi 01951272 4 NO * Withdrawal of Nomination of Shri Rajeev Kumar Sinha by IDBI Bank Limited by substitution of the Nominee Director Smt. Shivani Singla on the Board of the Company w.e.f 11th December, 2017 $ Appointed as Additional Independent Director on the Board of the Company w.e.f 12th February, 2018 Information supplied to the Board In advance of each meeting, the Board is presented with relevant information on various matters related to the working of the Company, especially those that require deliberation at the highest level. Presentations are also made to the Board by different functional heads on important matters from time to time. Directors have separate and independent access to the officers of the Company. In addition to items required to be placed before the Board for its noting and/or approval, information is provided on various significant items. In terms of quality and importance, the information supplied by the Management to the Board of the Company is far ahead of the list mandated under regulation 17(7) read with Part A of Schedule II to the SEBI Listing Regulations, 2015. As stated elsewhere, the independent directors of the Company at their meeting held on 28th March, 2018 expressed satisfaction on the quality, quantity and timeliness of flow of information between the Management and the Board, that is necessary for the Board to effectively and reasonably perform their duties. Orderly succession to Board and Senior Management The Board of the Company has satisfied itself that plans are in place for orderly succession for appointments to the Board and to Senior Management.

76 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

c. Directorships and Committee Memberships in other companies as on 31st March, 2018 The names of the Directors and the details of chairmanship / directorships and committee memberships of each director in other companies as on 31st March, 2018 is given below: Name of the Director Director Identification No. (DIN) No. of Directorships held in No. of committee positions held other companies in other companies Chairman Director Chairman Member Sh. Jai Prakash Agarwal 00041119 - - - - (Executive Chairman ) Sh Raju Bista 01299297 - - - - (Managing Director) Smt. Urmil Agarwal 00053809 - 1 - - Sh. Krishan Kumar Narula 00098124 - - - - Sh. Ravinder Kumar Narang 02318041 - - - - Sh. Utpal K Mukhopadhyay 02766045 - 5 1 2 Sh. Tara Sankar Bhattacharya 00157305 - 7 - 4 Sh. Sudhanshu Kumar Awasthi 02162923 - - - - Sh. Surendra Singh Khurana 02126149 - - - - Sh Rajeev Kumar Sinha * 01334549 - - - - (IDBI Nominee) Smt. Shivani Singla * 07715894 - 2 - - (IDBI Nominee in the capacity as lender) Sh. Sunil Sikka $ 08063385 - - - - Sh Mukesh Tripathi 01951272 - 3 - - * W ithdrawal of Nomination of Shri Rajeev Kumar Sinha by IDBI Bank Limited by substitution of the Nominee Director Smt. Shivani Singla on the Board of the Company w.e.f 11th December, 2017 $ Appointed as Additional Independent Director on the Board of the Company w.e.f 12th February, 2018 None of the - • Independent Directors of the Company serves as an independent director in more than 7 listed companies • Whole-time Directors of the Company serves as an independent director in more than 3 listed entities. • Directors of the Company were members in more than 10 committees or acted as Chairman of more than five committees across all companies in which they were Directors d. No. of Board Meetings held in the financial year 2017-2018 and dates on which held Under the Law, the Board of Directors must meet at least once in a quarter and four times a year, with a maximum time gap of 120 days between any two meetings to consider amongst other business, the quarterly performance of the Company and financial results. During the last financial year, Board met five times, on 30th May, 2017; 11th August, 2017; 13th November, 2017; 25th January, 2018 and 12th February, 2018. e. Disclosure of relationship between directors inter se. None of the Directors of the Company except Shri J P Agarwal and Smt. Urmil Agarwal have any inter-se relationship with other directors of the Company. f. Number of shares and convertible instruments held by Non- Executive Directors No shares or convertible instrument are held by any Non- Executive Director(s) of the Company during the Financial Year 2017-18 except Sh. Sunil Sikka who is holding 12,500 equity shares on the date of appointment i.e 12th February, 2018 and is holding the same number of shares as at 31st March, 2018. g. Web link where details of familiarisation programmes imparted to Independent Directors is disclosed A familiarisation programme for Independent Directors was organised during the year to make them update on the recent amendments in the provisions of the Companies Act, 2013. A detailed familiarisation programme was presented by Secretarial team of the Company which was keenly participated by every Independent Director on the Board of the Company and express happiness over the same. The detailed familiarisation programme for Independent Directors was uploaded on the website of the company at the following link :http://www.surya.co.in/familiarization-programme-for- independent-directors/

ANNUAL REPORT 2017-18 77 3. Audit Committee i. Terms of Reference The Audit Committee is responsible for overseeing of the company’s financial reporting process, reviewing the quarterly/ half-yearly/ annual financial statements, reviewing with the management on the financial statements and adequacy of internal audit function, recommending the appointment / re-appointment of statutory auditors and fixation of audit fees along with reviewing and monitoring the auditor’s independence and performance, reviewing the significant internal audit findings / related party transactions, reviewing the Management Discussion and Analysis of financial condition and result of operation. Matters to be included in Director’s Responsibility Statement form part of the Board Report, compliance with listing and other legal requirements relating to financial statements, scrutiny of inter-corporate loans and investments, valuation of undertaking or assets of the company. The Committee acts as a link between the management, external and internal auditors and the Board of Directors of the Company. The Committee discussed with the external auditors their audit methodology, audit planning and significant observations / suggestions made by them. The Committee also discussed major issues related to risk management and compliances and review the functioning of Whistle Blower mechanism. As per Rule 6A of the Companies (Meeting of Board and its Powers) Rules, 2014 and in compliance to regulation 23(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.committee to recommend to grant Omnibus approval for proposed related party transactions which are foreseen and for unforeseen transactions as per the framed specified criteria on an annual basis In addition, the Committee has discharged such other role/function as envisaged under Part C of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (referred to as ‘Listing Regulations’ with the Stock Exchanges) and the provisions of Section 177(4) of the Companies Act, 2013. ii. Composition / Category / name of members and chairperson The Audit Committee comprises of four Directors. The names along with categories of the members at the meeting was as follows : Name of the Directors Director Identification No. Category Sh. K. K. Narula 00098124 Chairman; Independent – Director Sh.Tara Sankar Bhattacharya 00157305 Member; Independent – Director Sh. Utpal K Mukhopadhyay 02766045 Member; Independent – Director Sh. Mukesh Tripathi # 01951272 Member; Non Independent – Director # Becoming Executive; Non- Independent director on account of merger of e-Surya Global Steel Tubes Limited with the Company w.e.f. 11th January, 2018 as per approved scheme of amalgamation by Hon’ble NCLT Chandigarh Bench All the members except Sh. Mukesh Tripathi have extensive financial and accounting knowledge and background. The terms of reference of the Audit Committee are in line with Regulation 18 read with Part C of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The quorum for the Committee is two independent members. The Audit Committee meetings were attended by the heads of Finance and Internal Audit and the Auditors (including Cost Auditors) as invitees. The members held discussions with the Auditors during the meetings and the Committee reviewed the periodic unaudited and audited results of the company before being considered and approved by the Board of Directors. Sh. B.B. Singal, Sr. V.P & Company Secretary, acts as the Secretary to the Committee. iii. No. of Audit Committee Meetings and dates on which held / Attendance at Meetings. During the financial year 2017-18, Audit Committee meetings were held on 29th May, 2017 ; 11th August, 2017; 13th November, 2017 and 12th February, 2018. The names along with categories of the members and the attendance of members at the meeting was as follows: No. of Meetings Name of the Directors Director Identification No. Category Attended Sh. K. K. Narula 00098124 Chairman; Independent – Director 4 Sh.Tara Sankar Bhattacharya 00157305 Member; Independent – Director 3 Sh. Utpal K Mukhopadhyay 02766045 Member; Independent – Director 3 Sh. Mukesh Tripathi # 01951272 Member; Non Independent – Director 4 # Becoming Executive; Non- Independent director on account of merger of e-Surya Global Steel Tubes Limited with the Company w.e.f. 11th January, 2018 as per approved scheme of amalgamation by Hon’ble NCLT Chandigarh, bench

78 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

4. Nomination and Remuneration Committee i. Terms of Reference The Nomination and Remuneration Committee is responsible for • Appointment of the directors and key managerial personnel of the Company and • Fixation of the remuneration of the directors, key managerial personnel (KMP’s) and one level below the KMPs. In addition, the Committee has discharged such other role/function as envisaged under Regulation 19 read with Part D clause A of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the provisions of Section 178 of the Companies Act, 2013 ii. Composition / name of members and chairperson The composition of the Committee is as follows : Name DIN Position Category Shri K K Narula 00098124 Chairman Non-Executive, Independent Shri Ravinder Kumar Narang 02318041 Member Non-Executive, Independent Shri Surendra Singh Khurana * 02126149 Member Non-Executive, Independent Shri Mukesh Tripathi # 01951272 Member Executive, Non-Independent * Inducted by re-constitution of the Committee by Board of Directors w.e.f 25th January, 2018 # Not qualified to hold membership on becoming Executive ; Non- Independent director on account of merger of e-Surya Global Steel Tubes Limited with the Company w.e.f. 11th January, 2018 The scope of the Remuneration Committee includes finalising the remuneration packages of KMPs and Executive Director(s) of the Company. Sh. B. B. Singal, Sr. V.P & Company Secretary, acts as the Secretary to the committee. iii. Meetings and Attendance during the year During the financial year 2017-18, three meetings was held on 1st May, 2017; 13th November, 2017 and 12th February, 2018. The attendance of the members at the meeting was as follows: Name DIN Position Category No. of Meetings Attended Shri K K Narula 00098124 Chairman Non-Executive, Independent 3 Shri Ravinder Kumar Narang 02318041 Member Non-Executive, Independent 3 Shri Surendra Singh Khurana * 02126149 Member Non-Executive, Independent 1 Shri Mukesh Tripathi # 01951272 Member Executive, Non-Independent 2 * Inducted by reconstitution of the Committee by Board of Directors w.e.f 25th January, 2018 # Not qualified to hold membership on becoming Executive ; Non- Independent director on account of merger of e-Surya Global Steel Tubes Limited with the Company w.e.f. 11th January, 2018 iv. Performance evaluation criteria for Independent Directors As per the provisions of section 178(2) of the Companies Act, 2013 and Clause VII & VIII of Schedule IV of the Act read with SEBI (Listing Obligations and Disclosure Requirements) 2015, Nomination and Remuneration committee carried out annual performance evaluation of Independent Director’s according to their roles and duties on the Board of the Company and in particular considered whether Independent Directors shall 1. help in bringing an independent judgment to bear on the Board’s deliberations especially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct; 2. bring an objective view in the evaluation of the performance of board and management; 3. scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; 4. satisfy themselves on the integrity of financial information and that financial controls and the systems of risk management are robust and defensible; 5. safeguard the interests of all stakeholders, particularly the minority shareholders; 6. balance the conflicting interest of the stakeholders;

ANNUAL REPORT 2017-18 79 7. determine appropriate levels of remuneration of executive directors, key managerial personnel and senior management and have a prime role in appointing and where necessary recommend removal of executive directors, key managerial personnel and senior management; 8. moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management and shareholder’s interest. 9. undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the company; 10. seek appropriate clarification or amplification of information and, where necessary, take and follow appropriate professional advice and opinion of outside experts at the expense of the company; 11. strive to attend all meetings of the Board of Directors and of the Board committees of which he is a member; 12. participate constructively and actively in the committees of the Board in which they are chairpersons or members: 13. strive to attend the general meetings of the company; 14. where they have concerns about the running of the company or a proposed action, ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that their concerns are recorded in the minutes of the Board meeting; 15. keep themselves well informed about the company and the external environment in which it operates; 16. not to unfairly obstruct the functioning of an otherwise proper Board or committee of the Board; 17. pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the company; 18. ascertain and ensure that the company has an adequate and functional vigil mechanism and to ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use; 19. report concerns about unethical behavior, actual or suspected fraud or violation of the company’s code of conduct or ethics policy; 20. not disclose confidential information, including commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law. and based on the structured questionnaire as tabulated below to rate on a scale of 1 to 5 by every director of the company in accordance with their respective functions and duties and accordingly submit its report to the Chairman of the Company. Rating (on a Sl. No Topics and Statements scale of 1-5, 5 is highest) 1 Attends and participate in Board and Committee meetings regularly. 2 Prepares adequately / or add values on the Agenda for the Board / Committee Meetings. 3 Has a good understanding of the organisation’s strategy and risk environment. 4 Participate in meetings in an open and constructive manner. 5 Brings his / her experience and credibility to bear on the critical areas of the performance of the organisation. 6 Represents the interests of shareholders and focuses on enhancing shareholder value. 7 Gives fair chance to other members to contribute, participate actively in the discussion and is consensus oriented. 8 Provide Feedback and guidance to top management on areas of business strategy, governance and risk. 9 Sufficiently Challenges management to set and achieve stretch goals. 10 Maintain effective and successful relationship with fellow Board members and senior management. The Nomination and Remuneration Committee Chairman Sh. K K Narula was present in the Annual General Meeting of the Company held on 29th December, 2017

80 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

PERFORMANCE EVALUATION: As per the provisions Section 134(3)(p) read with Clause VIII of Schedule IV of the Companies Act, 2013 and other applicable provisions of the Act and in compliance with the provisions of Regulation 17(10), 19 and 25(4) read with Part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 referred to as the Listing Regulations read with SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January, 2017 on Guidance Note on Board evaluation, formal annual evaluation has been made by the Board after reviewing each and every parameter of Performance evaluation of Board as a whole, its Committees and that of every individual director (including Independent Directors) in detail and after taking into consideration the report submitted by NRC and Independent Directors on performance evaluation, collectively submit Comprehensive Annual Evaluation Performance Report in regard to its own performance, its Committees viz. Audit Committee, Nomination & Remuneration Committee, Stakeholder’s Relationship Committee, Corporate Social Responsibility Committee and other Compliance Committees and that of individual directors including its Chairperson, M.D , Independent Directors and Non-independent directors accordingly and express deep satisfaction. Under the law, as per the report of performance evaluation, the Board shall determine, inter alia, whether to continue the term of appointment of the independent director(s). During the year under review, there was no occasion to decide on the continuance of the term of appointment of any of the independent directors and hence, the question of taking a decision on their re-appointment did not arise. 5. Details of Remuneration to all Directors a. Pecuniary Relationships: None of the Non-Executive Directors of the Company have any pecuniary relationship or transactions with the Company except for sitting fees paid to them for attending Board meetings or Committee meetings thereof. b. The details of remuneration / sitting fees paid to the Executive Directors / Non Executive Directors during the financial year 2017-2018 are as under: Name Director Salary Perquisites & Commission* Bonuses, Sitting Fees Identification Allowances Stock (excluding No. (DIN) Options, service tax) Pensions Sh. J P Agarwal (Executive Chairman) 00041119 3.30 Nil 2.34 Nil N .A. Sh. Raju Bista (Managing Director) 01299297 1.92 Nil 1.56 Nil N.A. Sh. Mukesh Tripathi # 01951272 0.98 Nil Nil Nil Nil Smt.Urmil Agarwal 00053809 Nil Nil Nil Nil 0.0090 Sh. K.K.Narula 00098124 Nil Nil Nil Nil 0.0565 Sh. Ravinder Kumar Narang 02318041 Nil Nil Nil Nil 0.0270 Sh. U K Mukhopadhyay 02766045 Nil Nil Nil Nil 0.0150 Sh. Tarasankar Bhattacharya 00157305 Nil Nil Nil Nil 0.0220 Sh. Sudhanshu Kumar 02162923 Nil Nil Nil Nil 0.0200 Awasthi Sh. Surendra Singh Khurana 02126149 Nil Nil Nil Nil 0.0220 Sh. Sunil Sikka $ 08063385 Nil Nil Nil Nil 0.0080 IDBI Bank (Nominee Director) Nil Nil Nil Nil 0.0100 $ Appointed as Additional Independent Director on the Board of the Company w.e.f 12th February, 2018 # Becoming Executive; Non- Independent director on account of merger of e-Surya Global Steel Tubes Limited with the Company w.e.f. 11th January, 2018 as per approved scheme of amalgamation by Hon’ble NCLT Chandigarh Bench and out of the above mentioned drawn salary of `.0.98 crore he draws salary of `.0.76 crore from e-SGSTL upto the date of effective merger i.e 11th January, 2018. * To be paid in the financial year 2018-19

ANNUAL REPORT 2017-18 81 Name Director Performance Performance Service Contracts Notice Period Severance Identification Linked Criteria Fees No. (DIN) Incentives Sh. J P Agarwal 00041119 N.A N.A 5 years from 1st January, 6 Months Nil (Executive Chairman) 2017 (i.e. upto 31st December, 2021) Sh. Raju Bista 01299297 N.A N.A 5 years from 18th June, 3 Months Nil (Managing Director) 2014 (i.e. upto 17th June, 2019) The Company has not issued Stock options (ESOPs) to any of its Directors. Number of Shares held by Non-Executive Directors: Shri Sunil Sikka holds 12,500 equity shares on date of appointment w.e.f. 12th February, 2018 and the same number of shares is held by him as at 31st March, 2018. 6. Stakeholder’s Grievance Committee i. Composition / name of members and chairperson The Committee headed by Shri K K Narula (Non-executive – Independent Director) has the mandate to review and redress shareholder grievances. The Committee met 4 times during the year on 29.04.2017, 24.07.2017, 27.10.2017 and 25.01.2018, and the attendance of Members at the Meeting was as follows: Names of the Members Director Identification No. Position No. of Meetings Attended Sh. K K Narula 00098124 Chairman 4 Sh. R K Narang 02318041 Member 2 Sh. Raju Bista 01299297 Member 4 The quorum for the Committee is two members. The minutes of the Committee were placed before the Board. ii. Name & Designation of Compliance Officer : Sh. B.B.Singal (Sr.V.P &Company Secretary) iii. Number of shareholders’ complaints received upto 31st March, 2018 : 02 iv. Number of complaints not solved to the satisfaction of the shareholders : Nil v. Number of pending complaints : Nil

7. General Body Meetings i. Location and Time , where last three Annual General Meetings held The last three Annual General Meetings were held on the following dates : 11.09.2015 ; 23.09.2016 ; 29.12.2017 at the Registered Office of the Company at Prakash Nagar, Sankhol, Bahadurgarh–124 507 at 11:00 a.m ii. Special Resolutions passed in the previous three Annual General Meetings Two Special Resolutions were passed in the Annual General Meeting held on 11th September, 2015, two Special Resolution were passed in the Annual General Meeting held on 23rd September, 2016 and one Special Resolution were passed in the AGM held on 29th December, 2017. iii. Special Resolutions passed last year through Postal Ballot – Details of Voting Pattern One Special resolution was passed through postal ballot last year as per the Order passed by the Hon’ble National Company Law Tribunal, Chandigarh Bench on 31/05/2017 in C.A.(CAA) NO. 15(Pb) / 2017 RT No. 119/Chd/ Hry/2017 whereby the Hon’ble NCLT Chandigarh Bench appointed Prince Chadha, Company Secretary in practice (ACS:32856, CP. NO. 12409) having its office at No. 48, Sector 41-A , Chandigarh as the Scrutinizer in respect for the meeting of Equity shareholders of SURYA ROSHNI LIMITED held on Saturday, the 22nd day of July, 2017 at 2.30 P.M then adjourned to 3:00 P.M. at Prakash Nagar, Sankhol, Bahadurgarh, Rohtak Road, Jhajjar, Haryana – 124507 for seeking their approval on the Scheme of Amalgamation of Surya Global Steel Tubes Limited with Surya Roshni Limited under the provisions of Section 230 to 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements, and Amalgamations), Rules, 2016 and other applicable provisions of the Companies Act 2013.

82 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

The Summary of the result in terms of number of votes (shares) cast “For” and Against” by Postal Ballot, E-Voting and by Poll at meeting out of Total number of votes (shares) through valid votes are given as under:

(a) The Result of the Postal Ballot / Poll and E-voting are as under :

(b) The Summary of the results in terms of number of votes (shares) cast ‘For’ and ‘Against’ out of Total number of votes (Shares) through valid votes is given below :

IN CASE F PUBLIC SHAREHOLDING (a) The Result of the Postal Ballot / Poll and E-voting are as under :

Resolution No. of Members who cast their Votes No. of Valid Poll Papers No. of Invalid Poll Papers No. either by Postal Ballot/ e-voting and Poll in the meeting Postal Postal Postal Poll E-Voting Total Poll E-Voting Total Poll E-Voting Total Ballot Ballot Ballot 1 47 19 145 211 42 18 145 205 5 1 0 6 (b) The Summary of the results in terms of number of votes (shares) cast ‘For’ and ‘Against’ out of Total number of votes (Shares) through valid votes of Public is given below :

Resolution No. of Members who cast their Votes No. of Votes (Shares) cast'Against' through Total No. of Assent Dissent% Resolution No. either by Postal Ballot/ e-voting and Poll valid votes Votes(Shares) % (AGAINST) Passed in the meeting cast through (FOR) / Not Postal Postal valid votes Passed Poll E-Voting Total Poll E-Voting Total Ballot Ballot 1 9683 21767 5348732 5380182 1750 0 1854 3604 5383786 99.93% 0.07% PASSED iv. Person who conducted the Postal Ballot exercise : Hon’ble NCLT Chandigarh Bench appointed Prince Chadha, Company Secretary in practice (ACS:32856, CP. NO. 12409) having its office at No. 48, Sector 41-A , Chandigarh as the Scrutinizer. v. Whether any Special Resolution is proposed to be conducted through Postal Ballot – NIL vi. Procedure for Postal Ballot – As per the Order of Hon’ble NCLT, Chandigarh Bench dated 30.05.2017 and in compliance with the provisions of the Companies Act, 2013 or rules made thereunder. 8. Means of Communication i. Quarterly results sent to each shareholders residence No ii Newspapers in which quarterly results normally published : Business Standard iii Website where results or official news are displayed : www.surya.co.in iv Whether it also displays official news releases : Yes (if any) v Whether it also displays presentations made to institutional investors or to the : Yes (if any) analysts

ANNUAL REPORT 2017-18 83 9. General Shareholder Information i. AGM : Date Time and Venue : 28th September, 2018 at 11:00 a.m Prakash Nagar, Sankhol, Bahadurgarh, Haryana -124507 ii Financial Year : 1st April to 31st March iii. Dividend payment date : - 5th October, 2018 iv. Listing on Stock Exchanges : The securities of the Company were listed on the following Stock Exchanges during the financial year 2017-18 The Stock Exchange, Mumbai The National Stock Exchange of India Ltd Rotunda Building, Dalal Street, Exchange Plaza, Bandra- Kurla Fort, Mumbai – 400 001 Complex, Bandra, Mumbai – 400 051.

The Company has paid the Annual Listing Fees to the Stock Exchanges for the Financial Year 2017-18 and 2018-19 v. Stock Code National Stock Exchange Bombay Stock Exchange ISIN Equity Shares- Symbol / Code SURYAROSNI 500336 (Dematerialised) INE335A01012 336 (Physical) vi. Market Price Data MONTH NSE BSE HIGH (`) LOW (`) HIGH (`) LOW (`) April, 2017 280.80 204.50 280.00 206.00 May, 2017 299.80 257.00 299.20 257.10 June, 2017 307.35 279.90 306.90 280.00 July, 2017 298.50 275.30 297.80 276.00 August, 2017 297.00 236.30 296.00 239.30 September, 2017 327.90 284.05 328.00 285.20 October, 2017 391.60 291.65 391.80 292.00 November, 2017 410.40 342.00 409.30 341.35 December, 2017 406.00 358.00 405.90 358.00 January, 2018 467.80 377.55 465.45 377.45 February, 2018 520.85 346.90 522.35 345.95 March, 2018 454.45 362.95 454.00 362.55 vii. Performance in comparison to BSE SENSEX

450.00 36000 35000 400.00 34000 33000 350.00 32000 300.00 31000 30000 250.00 29000 Apr 17 17 May Jun 17 Jul 17 17 Aug Sep 17 Oct 17 17 Nov Dec 17 Jan 18 18 Feb Mar 18

Surya Sensex

84 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

viii. Suspension of trading during the year (if any) : NIL ix. Registrar : MAS Services Limited (Common for both Physical and T-34, 2nd Floor, Okhla Industrial Area, Electronic share registry) Phase – II , New Delhi – 110 020 Tel. : (011) 2638 7281/ 82 / 83 Fax : (011) 2638 7384 E-Mail : [email protected] x. Share Transfer System The Company’s share transfers are handled by MAS Services Ltd., Registrar and Transfer Agents(RTA). The shares received in physical mode by the Company/RTA are transferred expeditiously provided the documents are complete and shares under transfer are not under dispute. Confirmation in respect of the request for dematerialisation of shares is sent to the respective depositories – National Securities Depository Limited / Central Depository Services (India) Limited within 15 days. None of the transfer was pending for more than a fortnight as on 31st March, 2018. xi. Distribution of Shareholding

Share Holding of Nominal Value Shareholders Shares* of Rs.. Number % of Total Number % of Total 1 - 5000 19729 86.683 23,93,475 4.399 5001 - 10000 1514 6.652 11,43,429 2.102 10001- 20000 759 3.335 11,18,623 2.056 20001- 30000 246 1.081 6,21,110 1.142 30001- 40000 123 0.540 4,36,838 0.803 40001- 50000 85 0.374 4,00,165 0.735 50001- 100000 148 0.650 10,80,801 1.986 100001 & Above 156 0.685 4,72,14,533 86.777 TOTAL 22760 100.000 5,44,08,974 100.000 • 1,05,77,724 Equity Shares are allotted by the Board of Directors on 25th January, 2018 to the shareholders of e-Surya Global Steel Tubes Limited (Transferor Company) on merger with the Company as per Scheme of Amalgamation approved by Hon’ble NCLT. Chandigarh Bench vide its order dated 11th December, 2017. Accordingly, Issued and Listed Capital of the Company increased to 5,44,08,974 from 4,38,31,250 and the listing & trading approval has been received on 12th February, 2018 from BSE limited and NSE. Shareholding Pattern as at 31.03.2018

xii. Category No. of Shares held % age of Paid-up Capital Promoters (including Persons Acting in Concert) 3,42,23,744 62.901 Institutional Investors 18,18,460 3.342 Bodies Corporate 83,03,850 15.262 Individuals 93,67,067 17.216 NRIs and OCBs 3,35,457 0.617 Others - Clearing Members 1,24,709 0.229 NBFCs Registered with RBI 70,974 0.130 Trust 15,200 0.028 Unclaimed or Suspense or Escrow A/c 1,49,513 0.275 TOTAL 5,44,08,974 100.00

ANNUAL REPORT 2017-18 85 Graphical Representation of the Shareholding Pattern

0.617 0.662

Promoters (Including Per- 17.216 sons Acting in Concert) Institutional Investors Bodies Corporate 15.262 62.901 Individuals NRIS and OCBs 3.342 Others (Clearing Members, NBFCs, Trust, Unclaimed Suspense A/c)

xii. Dematerialisation of Shares & Liquidity : The Company has obtained electronic connectivity with the National Securities Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL) for demat facility (ISIN: INE335A01012). As on 31st March, 2018, 5,38,32,649 equity shares, being 98.94% of the Company’s total paid-up equity shares had been dematerialised. The shares of the Company are regularly traded at the NSE and BSE.

xiii. Outstanding GDRs /ADRs /Warrants or any Convertible : Nil instruments, conversio date & likely impact on equity xiv. Commodity price risk or Foreign Exchange risk and : Please refer to Management Discussion and Analysis hedging activities Report for the same. Report for the same. xv. Plant Locations Steel Pipes & Strips Units• Prakash Nagar, Sankhol, Bahadurgarh Haryana – 124 507. • Plot No.P-1 to P-20, Ghirongi Industrial Area Malanpur Dist. Bhind (M.P) • Golapuram Industrial Area, Hindupur, Dist. Anantpur (A.P.) • Survey No. 188,189 & 190/1 Village- Bhuvad Taluka –Anjar, Dist.-Kutchh Gujarat -370130

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Lighting Units• 7 km Stone, Kashipur-Moradabad Road, Kashipur – 244 713 (Uttarakhand) • Plot No. 9-13, Balaji Industrial Estate Mahuakherganj, Kashipur, District U.S. Nagar, Uttarakhand •J-7,8 & 9, Malanpur Industrial Area, Malanpur, Distt.Bhind (M.P).

xvi. Address for correspondence : SR. V.P. & Company Secretary Surya Roshni Limited Padma Tower –I, 5 Rajendra Place, New Delhi – 110 008. Tel. - (011) 47108000 Fax - (011) 25789560 E-Mail - [email protected]; [email protected] [email protected]

10. Disclosures a) The senior management has made disclosures to the board relating to all material financial and commercial transactions. There are no materially significant related party transactions that may have potential conflict with the interest of the Company at large. The Company has formulated a policy on dealing with the Related Party transactions for determining the Material Related Party Transactions and necessary approval of the Audit Committee and the Board of Directors were taken whenever required in accordance with the policy. b) The Company has complied with all applicable requirements prescribed by the regulatory and statutory authorities including Stock Exchanges and SEBI during the preceding three financial years on all matters related to capital market and no penalties / strictures in this respect have been imposed on the Company. c) Personnel of the Company have direct access to the management as the company has established Vigil Mechanism for directors and employees to report concerns about unethical behaviour , actual fraud or suspected fraud or violation of the Company’s code of conduct or ethics policy. No personnel has been denied access to the Audit Committee. The Whistle Blower Policy was duly posted on the Website of the Company at the following link : http://www.surya.co.in/wp-content/uploads/2016/04/whistle-blower-policy.pdf d) The Company has complied with all mandatory requirements. e) Web link where policy for determining ‘material’ subsidiaries is disclosed: Company has no subsidiaries hence Not Applicable f) Web link where policy on dealing with related party transactions: The Company has formulated a policy on dealing with the Related Party transactions for determining the Material Related Party Transactions and necessary approval of the audit committee and the Board of Directors were taken whenever required in accordance with the policy. The details of Related Party Transaction Policy are disseminated in the website at the following link : http://www.surya.co.in/wp-content/uploads/2016/04/RPT-Policy.pdf g) Commodity price risks and commodity hedging activities.: Please refer to Management Discussion and Analysis report for the same.

ANNUAL REPORT 2017-18 87 11. Compliances of Corporate Governance Requirements Company has complied all the mandatory requirements of Corporate Governance Report as envisaged in sub-paras (2) to (10) of Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2017-18.

12. Adoption of Corporate Governance Discretionary Requirements

Company has adopted the following Discretionary Requirements of Corporate Governance as specified in Part E of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2017-18.

• Separate Posts of Chairman and Managing Director • Reporting of Internal Auditor 13. Disclosure of Compliances of Corporate Governance Requirements Company has complied all the mandatory requirements of Corporate Governance Report (tabulated below) as specified in Regulation 17 to 27 and clause (b) to (i) of sub regulation (2) of Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2017-18. I. Disclosure of Website in terms of Listing Agreement Items Compliance status (Yes /No / N.A) Terms and conditions of appointment of independent directors Yes Composition of various committees of board of directors Yes Code of conduct of board of directors and senior management personnel Yes Details of establishment of vigil mechanism/ Whistle Blower policy Yes Criteria of making payments to non-executive directors Yes Policy on dealing with related party transactions Yes Policy for determining ‘material’ subsidiaries Not Applicable Details of familiarisation programmes imparted to independent directors Yes . II. Annual affirmation Particulars Regulation Number Compliance status (Yes/No/NA Independent director(s) have been appointed in terms of specified 16(1)(b) & 25(6) Yes criteria of ‘independence’ and/or ‘eligibility’ Board composition 17(1) Yes Meeting of Board of directors 17(2) Yes Review of Compliance Reports 17(3) Yes Plans for orderly succession for appointments 17(4) Yes Code of Conduct 17(5) Yes Fees/compensation 17(6) Yes Minimum Information 17(7) Yes Compliance Certificate 17(8) Yes Risk Assessment & Management 17(9) Yes Performance Evaluation of Independent Directors 17(10) Yes Composition of Audit Committee 18(1) Yes Meeting of Audit Committee 18(2) Yes Role of the Audit Committee and the information to be reviewed 18(3) Yes Composition and role of nomination & remuneration committee 19(1),(2) & (4) Yes Presence of Chairperson of Nomination and Remuneration Committee 19(3) Yes at Company AGM Composition and role of Stakeholder Relationship Committee 21(1),(2),(3),(4) Yes Composition & role of risk management committee & applicability 21(1),(2),(3),(4) & (5) Not Applicable Vigil Mechanism 22(1) & (2) Yes Policy for related party Transaction 23(1),(5),(6),(7) & (8) Yes

88 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Particulars Regulation Number Compliance status (Yes/No/NA Prior or Omnibus approval of Audit Committee for all related party 23(2), (3) Yes transactions Approval for material related party transactions 23(4) Yes Composition of Board of Directors of unlisted material Subsidiary 24(1) Not Applicable Other Corporate Governance requirements with respect to subsidiary of 24(2),(3),(4),(5) (6),(7) Not Applicable listed entity & (8) Maximum Directorship & Tenure 25(1) & (2) Yes Meeting of independent directors 25(3) & (4) Yes Independent Directors Accountability 25(5) Yes Resignation or Removal of Independent Directors 25(6) Not Applicable Familiarisation of independent directors 25(7) Yes Memberships in Committees 26(1) Yes Affirmation with compliance to code of conduct from members of Board 26(3) Yes of Directors and Senior management personnel Disclosure of Shareholding by Non- Executive Directors 26(4) Yes Policy with respect to Obligations of directors and senior management 26(2) & 26(5) Yes Adoption of Corporate Governance Discretionary Requirements 27(1) Yes Submission of Quarterly Compliance Report on Corporate Governance 27(2) Yes to the Stock Exchanges within 15 days from the close of the respective quarter. Disclosure with respect to transfer of shares to IEPF suspense account as per the provisions of section 124(6) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority ( Accounting, Audit, Transfer and Refund) Rules, 2016 . Year Total No. of Outstanding Total No. of Total No. Total No. of No. of Outstanding Voting Shareholders Shares in Shareholders of Shares Shareholders Shares Shares Rights at the IEPF demat whose transferred who Transferred in demat Frozen beginning of suspense shares are to IEPF approached from IEPF suspense the year account transferred suspense the Company Suspense account at the to IEPF account for transfer Account lying at the beginning of demat during the of shares during the end of the the year suspense year from IEPF year year. account suspense during the account year during the year 2008- 09 Nil Nil 1187 132101 2 Nil 132101 Yes 2009- Yes 10 Nil Nil 142 17412 1 Nil 17412 Total Nil Nil 1329 149513 3 Nil 149513 Disclosure with respect to demat suspense account / unclaimed suspense account Aggregate Outstanding No. of No. of Aggregate Outstanding Voting Rights No. of Shares in demat Shareholders Shareholders No. of Shares in demat Frozen Shareholders suspense who approached to whom Shareholders suspense at the account at the the Company for shares were lying at the account lying beginning of beginning of the transfer of shares transferred end of the at the end of the year year from suspense from suspense year* the year account during the account during year the year

146 10263 Nil NIL 12 1599 Yes

ANNUAL REPORT 2017-18 89 • 134 cases comprising 8664 shares are transferred to IEPF Authority Dealing with Corporate Benefits (in terms of securities accruing) and otingV Rights on such Unclaimed Shares : Any corporate benefits in terms of securities accruing on such shares viz. bonus shares, split etc., shall also be credited to demat suspense account or unclaimed suspense account, as applicable for a period of seven years and thereafter shall be transferred in accordance with provisions of Section 124(5) and 124 (6) of the Companies Act, 2013 and rules made thereunder. Surya Code of Conduct The Board Members and Senior Management personnel have affirmed their compliance with the code of conduct. The Code of Conduct has already been posted on the website of the Company. The Chairman, Managing Director and CEOs has certified that the Board Members and senior management personnel have complied with the code of conduct and the same is placed before the Board. The declaration to this effect signed by the Chairman, Managing Director and CEOs is attached to this report.

DECLARATION We hereby confirm that all the Board Members and senior management personnel of the Company have affirmed their compliance of the ‘Code of Conduct for Members of the Board and Senior Management’ for the year ended 31st March 2018 in terms of clause D of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations ,2015 with the Stock Exchanges.

Jai Prakash Agarwal Raju Bista Tarun Baldua Ramanjit Singh Place : New Delhi Chairman Managing Director CEO CEO Dated : 18th May, 2018 DIN: 00041119 DIN -01299297 (Steel Operations) (Lighting Operations)

90 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

ANNEXURE -VII TO BOARD’S REPORT

Certification by Chairman, Managing Director and Executive Director &Group Chief Financial Officer (GCFO) of the Company A. We hereby certify that for the financial year ending 31st March, 2018 on the basis of the review of the financial statements and the cash flow statement and to the best of our knowledge and belief that : 1) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading. 2) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations. B. There are, to the best of our knowledge and belief, no transactions entered into by the company during the 2017-2018 which are fraudulent, illegal or violative of the Company’s Code of Conduct. C. We accept the responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the Company pertaining to the financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of the internal controls, if any, of which we are aware,and that we have taken the required steps to rectify these deficiencies. D. We have indicated to the auditors and the Audit Committee that : 1) There have been no significant changes in internal control over financial reporting during this year. 2) There have been no significant changes in accounting policies during this year. 3) There have been no instances of significant fraud of which we have become aware and the involvement therein, of management or an employee having a significant role in the Company’s internal control system over financial reporting.

J P Agarwal Raju Bista R N Maloo Place : New Delhi Chairman Managing Director ED & Group CFO Dated : 18th May, 2018 DIN-00041119 DIN- 01299297

CERTIFICATE ON COMPLIANCE WITH CONDITIONS OF CORPORATE GOVERNANCE

Independent Auditor’s Certificate Independent Auditors’ Certificate on compliance with the conditions of Corporate Governance as per provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 To the Members Surya Roshni Limited 1. The Corporate Governance Report prepared by Surya Roshni Limited (“the Company”), contains details as stipulated in Regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ( ‘the Listing Regulations’)(‘applicable criteria’) with respect to Corporate Governance for the year ended March 31, 2018. This certificate is required by the Company for annual submission to the Stock exchange and to be sent to the shareholders of the Company.

Management’s Responsibility

2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company including the preparation and maintenance of all relevant supporting records and documents. This responsibility also includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Corporate Governance Report.

3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies with the conditions of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities and Exchange Board of India.

ANNUAL REPORT 2017-18 91 Auditor’s Responsibility

4. Our responsibility is to provide a reasonable assurance that the Company has complied with the conditions of Corporate Governance, as stipulated in the Listing Regulations.

5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on Reports or Certificate for Special Purposes and the Guidance Note on Certification of Corporate Governance both issued by the Institute of Chartered Accountants of India (“ICAI”) . The Guidance Note on Reports or Certificates for Special Purposes requires that we comply with the ethical requirements of the Code of Ethics issued by ICAI.

6. The procedures selected depend on the auditors’ judgement, including the assessment of the risks associated in compliance of the Corporate Governance Report with the applicable criteria. The procedures includes, but not limited to, verification of secretarial records and financial information of the Company and obtained necessary representations and declarations from directors including independent directors of the Company.

7. The procedures also include examining evidence supporting the particulars in the Corporate Governance Report on a test basis. Further, our scope of work under this report did not involve us performing audit tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the financial statements of the Company taken as a whole.

Opinion

8. Based on the procedures performed by us as referred in paragraph 6 and 7 and according to the information and explanations given to us, we are of the opinion that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Regulations, as applicable for the year ended March 31, 2018, referred to in paragraph 1 above.

Other Matters and Restriction on Use

9. This certificate 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.

10. This certificate is addressed to and provided to the members of the Company solely for the purpose of enabling it to comply with its obligations under the Listing Regulations and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other Party to whom it is shown or into whose hands it may come without our prior consent in writing. We have no responsibility to update this certificate for events and circumstances occurring after the date of this certificate

For Ashok Kumar Goyal & Co. Chartered Accountants Firm Registration No. 002777N

Ashok Kumar Goyal Partner, FCA Place : New Delhi Membership No. 017644 Dated : 18th May, 2018

92 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Details pertaining to Remuneration as required under Section 197(12) of the Companies Act, 2013 read with rule (5) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (i) The Percentage increase in remuneration of each Director, Chief Financial officer and Company Secretary during the financial year 2017-18, ratio of remuneration of each director to the median remuneration of the employees of the Company for the financial year 2017-18. S.No Name of the Director / Remuneration of Director / % increase in Ratio of remuneration of KMP and Designation KMP for the financial year Remuneration in the each Director / to median 2017-18 (` in Crore) Financial year 2017-18 remuneration of employees 1 Jai Prakash Agarwal 5.64 135.00 178.01 (Executive Chairman) 2 Raju Bista 3.48 93.33 109.84 (Managing Director) 3. MukeshTripathi# 0.98 # # (Whole-time Director) 4 Tarun Baldua 0.89 12.66 Not Applicable (CEO – Steel Operations) 5 Ramanjit Singh 1.18 31.11 Not Applicable (CEO–Lighting Operations) 6 R N Maloo 0.70 32.08 Not Applicable (ED & Group CFO) 7 B B Singal 0.34 36.00 Not Applicable (Sr. V.P & C.S) # MukeshTripathi is becoming an Whole-time Director on account of merger of e-Surya Global Steel Tubes Limited(SGSTL) w.e.f 11th January, 2018 as per approved scheme of Merger by Hon’ble NCLT Chandigarh Bench and draws Salary of Rs. 0.98 crore during the financial year ended 31st March, 2018 of which ` 0.76 crore is drawn by him from e-SGSTL upto the effective date of merger i.e 11th January, 2018, hence the figures are not comparable. (ii) In the financial year, there was an increase of 12.64 % in the median remuneration of employees; (iii) There were 3614 number of permanent employees on the rolls of company; (iv) average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year i.e 2017-18 was 11.57 % whereas increase in the managerial remuneration#117.14%.and justification for increase in the managerial remuneration was that on the recommendations by Nomination and Remuneration Committee (NRC) and subject to the approval of shareholders at the ensuing AGM, Board of Directors on seeing the vast responsibilities performed by Executive Chairman Sh. Jai Prakash Agarwal and Managing Director Sh. Raju Bista and after taking into account the Industry Standard’s remuneration payable to Executive Chairman and Managing Director has approved to pay commission @1.5% to Shri Jai Prakash Agarwal (Executive Chairman) and @ 1% to Raju Bista(Managing Director)of the Profit before tax (PBT) of the financial year 2017-18 onwards derived on the basis of Audited Financial Statements of the Company for the concerned financial year per annum basis for the period served under the agreement. (v) We affirmed that the remuneration paid / payable is as per remuneration policy of the Company.

STATEMENT SHOWING DETAILS OF EMPLOYEES OF THE COMPANY:

(i) Designation of the employee; Sh. Jai Prakash Agarwal Sh. Raju Bista – Sh. Ramanjit Singh CEO- – Chairman Managing Director Lighting Operations (ii) Remuneration received; (` in crore) 5.64 3.48 1.18 (iii) Nature of employment, whether Executive Chairman Managing Director CEO- Lighting contractual or otherwise; (Whole-time Director) Operations (v) Date of commencement of employment; 01.04.1986 01.08.2004 13-08-2015

ANNUAL REPORT 2017-18 93 (vi) The age of such employee; 67 years 31 years 57 years (vii) Jindal Industries Not Applicable Philips India Limited The last employment held by such Limited (Executive employee before joining the company; Director) (viii) The percentage of equity shares held 4.24% Not Applicable Not Applicable by the employee in the company within the meaning of clause (iii) of sub-rule (2) above; and (ix) Whether any such employee is a Smt. Urmil Agarwal Not Applicable Not Applicable relative of any director or manager of the company and if so, name of such director or manager: The employee, if employed throughout Sh. Jai Prakash Agarwal Sh. Raju Bista – Sh. Ramanjit Singh – the financial year, was in receipt of – Employed throughout Employed throughout Employed throughout remuneration for that year which, in the the Financial Year the Financial Year the Financial Year aggregate, was not less than One crore 2017-18 Salary -` 5.64 2017-18 2017-18 two lakh rupees; crore Salary -` 3.48 crore Salary - ` 1.18 crore The employee, if employed for a part Not Applicable Not Applicable Not Applicable of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than Eight lakh fifty thousand rupees per month; The employee, if employed throughout Not Applicable Not Applicable Not Applicable the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole- time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

94 ANNUAL REPORT 2017-18 FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT to the members of Surya Roshni Limited

Report on the Ind AS Financial Statements AS financial statements. The procedures selected depend We have audited the accompanying Ind AS financial on the auditor’s judgment, including the assessment of statements of SURYA ROSHNI LIMITED (“the Company”), the risks of material misstatement of the Ind AS financial which comprise the Balance Sheet as at 31st March, statements, whether due to fraud or error. In making those 2018, the Statement of Profit and Loss (including other risk assessments, the auditor considers internal financial comprehensive income), the Statement of cash flows and control relevant to the Company’s preparation of the Ind the statement of changes in equity for the year then ended AS financial statements that give a true and fair view in and a summary of the significant accounting policies and order to design audit procedures that are appropriate in other explanatory information (hereinafter referred to as the circumstances. An audit also includes evaluating the Ind AS financial statements) appropriateness of the accounting policies used and the Management’s Responsibility for the Ind AS reasonableness of the accounting estimates made by the Financial Statements Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, We believe that the audit evidence we have obtained is 2013 (“the Act”) with respect to the preparation of these sufficient and appropriate to provide a basis for our audit Ind AS financial statements that give a true and fair view opinion on the Ind AS financial statements. of the financial position, financial performance including Opinion other comprehensive income, cash flows and changes in In our opinion and to the best of our information and equity of the Company in accordance with the accounting according to the explanations given to us, the aforesaid principles generally accepted in India, including the Indian standalone Ind AS financial statements give the Accounting Standards (Ind AS) specified under Section information required by the Act in the manner so required 133 of the Act, read with relevant rules issued thereunder. and give a true and fair view in conformity with the This responsibility also includes maintenance of adequate accounting principles generally accepted in India including accounting records in accordance with the provisions of the Ind AS, of the financial position of the Company as at the Act for safeguarding of the assets of the Company 31st March, 2018, and its financial performance including and for preventing and detecting frauds and other other comprehensive income, its cash flows and changes irregularities; selection and application of appropriate in equity for the year ended on that date. accounting policies; making judgments and estimates that Report on Other Legal and Regulatory are reasonable and prudent; and design, implementation Requirements and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy 1. As required by the Companies (Auditor’s Report) Order, and completeness of the accounting records, relevant to 2016 (“the Order”) issued by the Central Government the preparation and presentation of the Ind AS financial of India in terms of Section 143(11) of the Act, we statements that give a true and fair view and are free from give in the “Annexure A” a statement on the matters material misstatement, whether due to fraud or error. specified in paragraphs 3 and 4 of the Order. Auditor’s Responsibility 2. As required by Section 143 (3) of the Act, we report Our responsibility is to express an opinion on these Ind AS that: financial statements based on our audit. a) We have sought and obtained all the information We have taken into account the provisions of the Act, the and explanations which to the best of our accounting and auditing standards and matters which knowledge and belief were necessary for the are required to be included in the audit report under the purposes of our audit; provisions of the Act and the Rules made thereunder. b) In our opinion, proper books of account as We conducted our audit in accordance with the Standards required by law have been kept by the Company on Auditing specified under Section 143(10) of the Act. so far as it appears from our examination of Those Standards require that we comply with ethical those books; requirements and plan and perform the audit to obtain c) The Balance Sheet, the Statement of Profit reasonable assurance about whether the Ind AS financial and Loss, the Statement of Cash Flow and the statements are free from material misstatement. statement of changes in equity dealt with by An audit involves performing procedures to obtain audit this Report are in agreement with the books of evidence about the amounts and the disclosures in the Ind account;

96 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

d) In our opinion, the aforesaid Ind AS financial pending litigations on its financial position statements comply with the Accounting in its Ind AS financial statements – Refer Standards specified under Section 133 of the Act, Note No.(s) 41 & 42 to the Ind AS financial read with Rule 7 of the Companies (Accounts) statements. Rules, 2014; ii. The Company has made provision, e) On the basis of the written representations as required under the applicable law received from the directors as on 31st March, or accounting standards, for material 2018 taken on record by the Board of Directors, foreseeable losses, if any, on long-term none of the directors is disqualified as on 31st contracts. The Company did not have any March, 2018 from being appointed as a director long term derivative contracts. in terms of Section 164 (2) of the Act; iii. There has been no delay and in transferring f) With respect to the adequacy of the internal amounts, required to be transferred, to the financial controls over financial reporting of the Investor Education and Protection Fund by Company and the operating effectiveness of such the Company. controls, refer to our separate Report in “Annexure B” for and on behalf of the Board of Directors g) With respect to the other matters to be included in the Auditor’s Report in accordance with For Ashok Kumar Goyal & Co. Rule 11 of the Companies (Audit and Auditors) Chartered Accountants (Firm Registration – 002777N) Rules, 2014, in our opinion and to the best of our information and according to the explanations (CA. Ashok Kumar Goyal) given to us: Place: New Delhi Partner, F.C.A i. The company has disclosed the impact of Dated:18th May, 2018 Membership No. 017644

Annexure A

The Annexure as referred in paragraph (1) ‘Report on Other ii. We have been explained by the management that the Legal and Regulatory Requirements of our Independent inventory have been physically verified at reasonable Auditors’ Report to the members of SURYA ROSHNI intervals during the year. As far as we could ascertain LIMITED the financial statements for the year ended 31st and according to information and explanations given March, 2018, we report that to us, no material discrepancies were noticed between i. (a) The Company has maintained proper records showing full particulars including quantitative the physical stock and the book records. details and situation of fixed assets. iii. According to the information and explanations given (b) The Company has a phased programme of to us and on the basis of our examination of the physical verification of its fixed assets which records of the Company, the Company has not granted in our opinion, is reasonable having regard to any loans, secured or unsecured to companies, firms, the size of the Company and the nature of its Limited Liability partnerships or other parties covered fixed assets. In accordance with this program, certain fixed assets were physically verified by in the Register maintained under section 189 of the the Management during the year and no material Act. Accordingly, the provisions of clause 3 (iii) (a) to discrepancies were noticed on such verification (c) of the Order are not applicable to the Company. as compared to the books of accounts iv. According to the information and explanations given (c) According to the information and explanations to us, the Company has complied with the provisions given to us and on the basis of our examination of the records of the Company, the title deeds of of section 185 and section I86 of the Companies immovable properties are held in the name of the Act, 2013 with respect to the loans, investments, Company. guarantees, security provided.

ANNUAL REPORT 2017-18 97 v. According to the information and explanations with the generally accepted auditing practices in given to us, during the year, the Company has not India, we have neither come across any instance accepted any deposits from the public. Accordingly, of fraud on or by the Company, noticed or reported the provisions of clause 3 (v) of the Order are not during the year, nor have we been informed of such applicable to the Company case by the Management. vi. We have broadly reviewed the books of account xi. According to the information and explanations given maintained by the Company pursuant to the rules to us and based on our examination of the records prescribed by the Central Government of India for the of the Company, the Company has paid/ provided maintenance of cost records under sub-section 1 of for managerial remuneration in accordance with the Section 148 of the Companies Act, 2013 and are of the requisite approvals mandated by the provisions of opinion that, prima facie, the prescribed records and section 197 read with Schedule V to the Companies accounts have been made and maintained. However, Act. we have not carried out a detailed examination of xii. In our opinion and according to the information and such records with a view to determining whether they explanations given to us, the Company is not a Nidhi are accurate or complete. Company. Accordingly, clause 3(xii) of the Order is not vii. (a) According to the information and explanations applicable. given to us and on the basis of examination xiii. According to the information and explanations given of the records of the Company, the company to us and based on our examination of the record of is generally regular in depositing undisputed the company, transactions with the related parties are statutory dues including provident fund, in compliance with section 177 and 188 of Companies employees’ state insurance, sales-tax, income Act, 2013 where applicable and details of such tax, service tax, custom duty, excise duty, value transactions have been disclosed in the Financial added tax, Goods and Service Tax (GST), Cess Statements as required by the applicable accounting and any other material statutory dues with the standards. appropriate authorities to the extent applicable xiv. According to the information and explanations give and further, there are no undisputed statutory to us and based on our examination of the records dues payable for a period of more than six of the Company, the Company has not made any months from the date they become payable as preferential allotment or private placement of shares at 31st March, 2018. or fully or partly convertible debentures during the (b) According to the records and information and year. Accordingly, clause 3(xiv) of the Order is not explanations given to us, there are no dues in applicable. respect of income tax, sales tax, service tax, duty xv. According to the information and explanations given of excise, duty of custom, or value added tax, to us and based on our examination of the records Goods and Service Tax (GST), Cess which have of the Company, the Company has not entered into not been deposited on account of any dispute. non-cash transactions with directors or persons viii. In our opinion, on the basis of audit procedures and connected with him. Accordingly, clause 3(xv) of the according to the information and explanations given Order is not applicable. to us, the Company has not defaulted in repayment of xvi. The Company is not required to be registered under loan or borrowing to any banks. The Company has not Section 45-IA of the Reserve Bank of India Act, obtained any loans from debenture holders, financial 1934. Accordingly, clause 3(xvi) of the Order is not institution and government. applicable. ix. According to the information and explanations given to us, the company has not raised moneys by way of initial public offer or further public offer (including For Ashok Kumar Goyal & Co. Chartered Accountants debt instruments) during the year. The term loans (Firm Registration – 002777N) have been applied for the purpose for which they were raised. (CA. Ashok Kumar Goyal) x. During the course of our examination of the books Place: New Delhi Partner, F.C.A and records of the Company carried out in accordance Dated:18th May, 2018 Membership No. 017644

98 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Annexure B to the Independent Auditor’s Report of even date on the Ind AS Financial Statements of Surya Roshni Limited.

Report on the Internal Financial Controls under over financial reporting. Clause (i) of Sub-section 3 of Section 143 of the Meaning of Internal Financial Controls over Companies Act, 2013 (“the Act”) as referred to Financial Reporting in paragraph 2(f) of ‘Report on Other Legal and A company's internal financial control over financial reporting Regulatory Requirements’ section is a process designed to provide reasonable assurance We have audited the internal financial controls over financial regarding the reliability of financial reporting and the reporting of SURYA ROSHNI LIMITED (“the Company”) as of preparation of financial statements for external purposes in 31st March, 2018 in conjunction with our audit of the Ind AS accordance with generally accepted accounting principles. A financial statements of the Company for the year ended on company's internal financial control over financial reporting that date. includes those policies and procedures that Management’s Responsibility for Internal (1) pertain to the maintenance of records that, in Financial Controls reasonable detail, accurately and fairly reflect the The Company’s management is responsible for establishing transactions and dispositions of the assets of the and maintaining internal financial controls based on the company; internal control over financial reporting criteria established (2) provide reasonable assurance that transactions by the Company considering the essential components are recorded as necessary to permit preparation of of internal control stated in the Guidance Note on Audit of financial statements in accordance with generally Internal Financial Controls over Financial Reporting issued accepted accounting principles, and that receipts and by the Institute of Chartered Accountants of India. These expenditures of the company are being made only in responsibilities include the design, implementation and accordance with authorisations of management and maintenance of adequate internal financial controls that directors of the company; and were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to (3) provide reasonable assurance regarding prevention company’s policies, the safeguarding of its assets, the or timely detection of unauthorised acquisition, use, prevention and detection of frauds and errors, the accuracy or disposition of the company's assets that could and completeness of the accounting records, and the timely have a material effect on the financial statements. preparation of reliable financial information, as required Inherent Limitations of Internal Financial under the Companies Act, 2013. Controls over Financial Reporting Auditors’ Responsibility Because of the inherent limitations of internal financial Our responsibility is to express an opinion on the Company's controls over financial reporting, including the possibility internal financial controls over financial reporting based of collusion or improper management override of controls, on our audit. We conducted our audit in accordance with material misstatements due to error or fraud may occur the Guidance Note on Audit of Internal Financial Controls and not be detected. Also, projections of any evaluation Over Financial Reporting (the “Guidance Note”) issued of the internal financial controls over financial reporting by the Institute of Chartered Accountants of India and the to future periods are subject to the risk that the internal Standards on Auditing, prescribed under section 143(10) financial control over financial reporting may become of the Companies Act, 2013, to the extent applicable to an inadequate because of changes in conditions, or that the audit of internal financial controls. Those Standards and degree of compliance with the policies or procedures may the Guidance Note require that we comply with ethical deteriorate. requirements and plan and perform the audit to obtain Opinion reasonable assurance about whether adequate internal In our opinion, the Company has, in all material respects, financial controls over financial reporting was established an adequate internal financial controls system over and maintained and if such controls operated effectively in financial reporting and such internal financial controls over all material respects. financial reporting were operating effectively as at 31st Our audit involves performing procedures to obtain audit March, 2018, based on the internal control over financial evidence about the adequacy of the internal financial reporting criteria established by the Company considering controls system over financial reporting and their operating the essential components of internal control stated in the effectiveness. Our audit of internal financial controls over Guidance Note on Audit of Internal Financial Controls Over financial reporting included obtaining an understanding of Financial Reporting issued by the Institute of Chartered internal financial controls over financial reporting, assessing Accountants of India. the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures For Ashok Kumar Goyal & Co. selected depend on the auditor’s judgement, including the Chartered Accountants assessment of the risks of material misstatement of the (Firm Registration – 002777N) financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is (CA. Ashok Kumar Goyal) sufficient and appropriate to provide a basis for our audit Place: New Delhi Partner, F.C.A opinion on the Company’s internal financial controls system Dated:18th May, 2018 Membership No. 017644

ANNUAL REPORT 2017-18 99 Balance Sheet As At 31st March, 2018

(` in crore) Particulars Note As at As at No. 31st March, 2018 31st March, 2017 I ASSETS 1 Non-current assets a Property, plant and equipment 5 1,071.92 1,100.79 b Capital work-in-progress 5 21.91 15.55 c Financial assets i Other financial assets 6 9.39 9.37 d Other non-current assets 7 6.67 2.18 1,109.89 1,127.89 2 Current assets a Inventories 8 828.57 654.95 b Financial assets i Trade receivables 9 712.59 631.81 ii Cash and cash equivalents 10 24.12 20.36 iii Bank balances other than (ii) above 11 0.40 1.94 iv Other financial assets 12 46.20 47.15 c Current tax assets (net) 13 2.39 2.43 d Other current assets 14 131.24 129.67 1,745.51 1,488.31 Total Assets 2,855.40 2,616.20 II EQUITY AND LIABILITIES Equity Equity share capital 15 54.41 54.41 Other equity 16 992.91 896.51 1,047.32 950.92 LIABILITIES 1 Non-current liabilities a Financial liabilities i Borrowings 17 354.38 400.61 ii Other financial liabilities 18 10.27 8.93 b Provisions 19 45.53 34.46 c Deferred tax liabilities (net) 20 83.51 76.25 493.69 520.25 2 Current liabilities a Financial liabilities i Borrowings 21 717.05 630.76 ii Trade payables 22 408.35 341.01 iii Other financial liabilities 23 120.41 103.84 b Other current liabilities 24 31.92 47.60 c Provisions 25 30.98 19.98 d Current tax liabilities (net) 26 5.68 1.84 1,314.39 1,145.03 Total Equity and liabilities 2,855.40 2,616.20 See accompanying notes to the financial statements

As per our report of even date For Ashok Kumar Goyal & Co. Chartered Accountants J P Agarwal Raju Bista Urmil Agarwal (Firm Registration No.ICAI: 02777N) Chairman Managing Director Director DIN: 00041119 DIN: 01299297 DIN: 00053809

CA. Ashok Kumar Goyal T.S.Bhattacharya Ravinder K Narang K K Narula Partner FCA Director Director Director Membership no. 17644 DIN: 00157305 DIN: 02318041 DIN: 00098124

B B Singal Shivani Singla Sunil Sikka Sr. V.P. & Director Director Company Secretary DIN: 07715894 DIN: 08063385

R N Maloo Ramanjit Singh Tarun Baldua Place : New Delhi Executive Director & Group Chief CEO (Lighting Operations) CEO (Steel Operations) Dated : 18th May, 2018 Financial Officer

100 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132 statement of Profit And Loss for the year ended 31st MARCH, 2018

(` in crore ) Particulars Note For the year ended For the year ended No. 31st March, 2018 31st March, 2017 I Revenue from Operations 28 5,011.76 4,181.03 II Other Income 29 2.66 0.88 III Total revenue (I+II) 5,014.42 4,181.91 IV Expenses Cost of materials consumed 30 3,607.03 2,632.32 Purchases of stock-in-trade 31 291.21 344.64 Changes in inventories of finished goods, stock-in -trade 32 (84.07) (82.83) and work-in-progress Excise duty 80.60 297.50 Employee benefits expense 33 268.86 235.54 Finance costs 34 105.16 112.72 Depreciation and amortisation expense 35 87.31 83.61 Other expenses 36 502.20 440.84 Total Expenses 4,858.30 4,064.34 V Profit before tax (III-IV) 156.12 117.57 VITax expense Current tax 27 38.85 19.11 Deferred tax 20 9.23 12.18 VII Profit/(loss) for the period 108.04 86.28 VIII Other comprehensive income 37 (i) Items that will not be reclassified to profit or loss (5.69) (5.11) (ii) Income tax relating to items that will not be reclassified 1.97 1.77 to profit or loss Total other comprehensive income (3.72) (3.34) IX Total Comprehensive Income(VII+VIII) 104.32 82.94 Earnings per equity shares (face value of ` 10/-each) 38 1) Basic (in `) 19.86 15.86 2) Diluted (in `) 19.86 15.86 See accompanying notes to the financial statements

CA. Ashok Kumar Goyal T.S.Bhattacharya Ravinder K Narang K K Narula Partner FCA Director Director Director Membership no. 17644 DIN: 00157305 DIN: 02318041 DIN: 00098124

B B Singal Shivani Singla Sunil Sikka Sr. V.P. & Director Director Company Secretary DIN: 07715894 DIN: 08063385

R N Maloo Ramanjit Singh Tarun Baldua Place : New Delhi Executive Director & Group Chief CEO (Lighting Operations) CEO (Steel Operations) Dated : 18th May, 2018 Financial Officer

ANNUAL REPORT 2017-18 101 Cash Flow Statement for the year ended 31st MARCH, 2018

(` in crore) Particulars Year ended Year ended 31st March, 2018 31st March, 2017 A. Cash Flow From Operating Activities Net operating profit before tax 156.12 117.57 Adjustment for : Re-measurement gain / loss on defined benefit plans routed through OCI (5.69) (5.11) Depreciation and amortisation of Property, Plant and Equipment 87.31 83.61 (Profit)/Loss on Sale/Retirement of Property Plant and Equipment (Net) 0.10 (0.05) Allowance for doubtful debts / bad debts W/off 7.14 1.73 Interest Expenses 105.16 112.72 Operating profit before Working Capital changes 350.14 310.47 Adjustment for : (Increase) / Decrease in Trade receivables (87.92) (21.73) (Increase) / Decrease in Other financial assets 0.93 (13.96) (Increase) / Decrease in Other assets (6.06) (3.13) (Increase)/Decrease in Inventories (173.62) (81.40) Increase / (Decrease) in Trade payables/ provisions 89.41 81.99 Increase / (Decrease) in Other financial liabilities 32.69 4.90 Increase / (Decrease) in Other liabilities (15.68) 5.59 Cash generated from Operations before tax 189.89 282.73 Net Direct Taxes paid (34.97) (26.47) Net cash flow from operating activities 154.92 256.26 B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Property, Plant and Equipment. (66.62) (100.03) Sale of Property, Plant and Equipment 1.72 1.32 Fixed deposits due to mature within 12 months of reporting date 1.53 (1.47) Net cash flow used in investing activities (63.37) (100.18) Net cash from operating and investing activities 91.55 156.08 C. CASH FLOW FROM FINANCING ACTIVITIES Repayment of non current borrowings ( including current maturities) (78.55) (112.44) Proceeds from non current borrowings 18.75 44.43 Short term borrowings repaid during the year (net) 86.29 28.44 Payment of dividend (6.57) (4.38) Payment of dividend distribution tax (1.35) (0.90) Interest paid (106.36) (117.74) Net cash used in financing activities (87.79) (162.59) Net cash (used) in/from operating, investing and financing activities 3.76 (6.51) Net increase/(decrease) in Cash & Cash equivalent 3.76 (6.51) Opening balance 20.36 26.84 Acquired pursuant to Scheme of arrangement (Refer Note No.45) - 0.03 Closing balance of Cash & Cash equivalent (Refer Note no. 10) 24.12 20.36

CA. Ashok Kumar Goyal T.S.Bhattacharya Ravinder K Narang K K Narula Partner FCA Director Director Director Membership no. 17644 DIN: 00157305 DIN: 02318041 DIN: 00098124

B B Singal Shivani Singla Sunil Sikka Sr. V.P. & Director Director Company Secretary DIN: 07715894 DIN: 08063385

R N Maloo Ramanjit Singh Tarun Baldua Place : New Delhi Executive Director & Group Chief CEO (Lighting Operations) CEO (Steel Operations) Dated : 18th May, 2018 Financial Officer

102 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

Statement of changes in equity for the year ended 31st MARCH, 2018

A. Equity share capital (` in crore ) Particulars As at 31st March,2018 As at 31st March, 2017 No. of Shares Amount No. of Shares Amount Balance at the beginning of the reporting period 5,44,08,974 54.41 4,38,31,250 43.83 Issued on Business Combination - - 1,05,77,724 10.58 Balance at the end of the reporting period 5,44,08,974 54.41 5,44,08,974 54.41

B. Other equity Particulars Reserves and surplus Total Forfeiture Securities Capital Capital General Retained Other reserve premium redemption reserve reserve earnings comprehensive Account reserve income Balance as at 1st April, 2016 17.63 140.95 3.00 - 54.36 433.08 (1.39) 647.63 Business Combination (Refer Note No.45) 1.76 124.69 45.00 (0.23) 171.22 Profit for the year 86.28 (3.34) 82.94 Total comprehensive income for the year - 1.76 - 124.69 - 131.28 (3.57) 254.16 Payment of dividend (including dividend distribution tax) (5.28) (5.28) Transfer of profit of the year to General reserve 6.00 (6.00) - - Balance as at 31st March, 2017 17.63 142.71 3.00 124.69 60.36 553.09 (4.97) 896.51 Profit for the year 108.04 (3.72) 104.32 Total comprehensive income for the year - - - - - 108.04 (3.72) 104.32 Payment of dividend (including dividend distribution tax) (7.92) (7.92) Transfer of profit of the year to General reserve 11.00 (11.00) - Balance at 31st March, 2018 17.63 142.71 3.00 124.69 71.36 642.21 (8.69) 992.91

CA. Ashok Kumar Goyal T.S.Bhattacharya Ravinder K Narang K K Narula Partner FCA Director Director Director Membership no. 17644 DIN: 00157305 DIN: 02318041 DIN: 00098124

B B Singal Shivani Singla Sunil Sikka Sr. V.P. & Director Director Company Secretary DIN: 07715894 DIN: 08063385

R N Maloo Ramanjit Singh Tarun Baldua Place : New Delhi Executive Director & Group Chief CEO (Lighting Operations) CEO (Steel Operations) Dated : 18th May, 2018 Financial Officer

ANNUAL REPORT 2017-18 103 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018

1 Corporate and general information 2.3 use of estimates Surya Roshni Limited (“SRL” or ‘’the Company’’) The preparation of the financial statements in is domiciled and incorporated in India and its conformity with Ind AS requires the Management shares are publicly traded on the National Stock to make estimates, judgements and assumptions. Exchange (‘NSE’) and the BSE Limited (‘BSE’), in These estimate, judgements and assumptions India. The registered office of SRL is situated at affect the application of accounting policies and Prakash Nagar, Sankhol, Rohtak Road, Bahadurgarh the reported balances of assets and liabilities, the – 124507 (Haryana) India. Company is the largest disclosures of contingent assets and liabilities at GI Steel Pipe Manufacturer and the second largest the date of the financial statements and reported in lighting products in India. The Corporate amounts of revenues and expenses during the Identification Number (CIN) of the Company is period. Estimates and underlying assumptions L31501HR1973PLC007543 are reviewed on an ongoing basis. Revision to SRL is more than four decade old manufacturing accounting estimates are recognised in the period in conglomerate with business interest spanning Steel which the estimates are revised and future periods Pipes and Strips, Lightings, LED street light and are affected. other lighting product, Fans, electric Appliances, Key sources of estimations of uncertainty at the PVC pipes etc. Besides enjoying market presence date of the financial statements, which may cause across the length and breadth of India, it also export a material adjustments to the carrying amount of products to more than 50 countries globally. assets and liabilities in the next financial years; During the year pursuant to Scheme of Arrangement are in respect of useful life of PPE, provision for amongst Surya Roshni Limited and its associate warranties, recognition of claim receivables and Surya Global Steel Tubes Limited manufacturer of estimations of contingent assets and liabilities. ERW, API, Spiral welded steel Pipes under section 3 Significant accounting policies 230 to 232 of the Companies Act, 2013 sanctioned 3.1 basis of Measurement by the Hon’ble National Company law Tribunal, These financial statements have been prepared Chandigarh Bench (NCLT) vide its Order dated under the historical cost except for certain financial 11th December, 2017, made effective from 11th assets and liabilities which have been measured at January, 2018 by filing of form No INC 28 with fair value: MCA and consequently business of SGSTL has been transferred to the Company w.e.f. 1st April, The financial statements are presented in Indian 2016 being the appointed date as per the scheme, Rupees (`), which is the Company’s functional and accordingly the figures for the previous year have presentation currency and all amounts are rounded been updated. to the nearest Crore and two decimals thereof, except as stated otherwise. 2 bASIS of preparation of financial statements and Use of estimates 3.2 property, Plant and Equipment (PPE) 2.1 Basis of preparation of financial statements Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated These financial statements are prepared in impairment losses, if any. Cost comprises of the accordance with Indian Accounting Standards purchase price (net of GST/ CENVAT / duty credits (Ind AS) under the historical cost convention wherever applicable) and all direct costs attributable on the accrual basis except for certain financial to bringing the asset to its working condition for instruments which are measured at fair values. intended use and includes the borrowing costs for The Ind AS are prescribed under Section 133 of qualifying assets if the recognition criteria’s are the Companies Act, 2013.Accounting policies have met. All other repair and maintenance costs are been consistently applied except where a newly- recognised in the statement of profit and loss as issued accounting standard is initially adopted or a incurred. revision to an existing accounting standard requires a change in the accounting policy hitherto in use. An item of property, plant and equipment is de- recognised upon disposal or when no future 2.2 Statement of compliance economic benefits are expected from its use or The financial statements have been prepared in disposal. The gain or loss arising on the disposal accordance with Indian Accounting Standards or retirement of an item of property, plant and (‘Ind AS’) notified under the Companies (Indian equipment is determined as the difference between Accounting Standards) Rules, 2015 read with the sales proceeds and the carrying amount of the Section 133 of the Companies Act, 2013. asset and is recognised in the Statement of Profit

104 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

and Loss on the date of disposal or retirement. 3.4 Impairment of PPE and other non-financial assets Capital work-in-progress includes cost of property, Property, plant and equipment and other non- plant and equipment under installation as at the financial assets are evaluated for recoverability balance sheet date and the cost of Property, Plant whenever events or changes in circumstances and Equipment not put to use are disclosed under indicate that their carrying amounts may not be ‘Capital work-in-progress’. Advances paid towards recoverable. For the purpose of impairment testing, the acquisition of property, plant and equipment the recoverable amount (i.e. the higher of the fair outstanding at each balance sheet date is classified value less cost to sell and the value-in-use) is as capital advances under other non-current assets determined on an individual asset basis unless 3.3 depreciation and Amortisation the asset does not generate cash flows that are largely independent of those from other assets. In i Depreciation on the property, plant and such cases, the recoverable amount is determined equipment is provided over the useful life of for the Cash Generating Unit (CGU) to which the assets which is coincide with the life specified asset belongs. If such assets are considered to in Schedule II to the Companies Act, 2013. The be impaired, the impairment to be recognised in range of useful lives of the Property, Plant and the Statement of Profit and Loss is measured Equipment are as follows: by the amount by which the carrying value of the (Amount in `) assets exceeds the estimated recoverable amount Property, plant and equipment Useful life in of the asset. An impairment loss is reversed in Years the statement of profit and loss if there has been Plant and equipments 8 – 15 a change in the estimates used to determine the Buildings 05-60 recoverable amount. The carrying amount of Office equipments 05 Vehicles 08 the asset is increased to its revised recoverable Furniture and fixtures 10 amount, provided that this amount does not Computers 3 – 6 exceed the carrying amount that would have been However, in case of the following category determined (net of any accumulated amortization of plant and equipments, the depreciation or depreciation) had no impairment loss been has been provided, based on the technical recognised for the asset in prior years. A reversal evaluation of the remaining useful life as under of impairment loss is recognised immediately in :- Statement of Profit and Loss. 3.5 Cash and cash equivalents Plant and Equipments - Pipe 25 years Mills & CR Plant of Steel Cash and cash equivalents includes cash in hand Division and Cheques / drafts in hand, balances with banks, The useful lives of assets as mentioned above deposits held at call with banks, other short-term is on their single shift basis, if an asset is used highly liquid investments with original maturities for any time during the year for double shift, the of three months or less that are readily convertible depreciation will increase by 50% for that period to a known amount of cash and are subject to and in case of triple shift the depreciation will an insignificant risk of changes in value and are increase by 100% for that period. held for the purpose of meeting short-term cash commitments. The cash flow statement has been ii Property, plant and equipment (PPE) which prepared under the indirect method as set out in are added/ disposed- of during the year, Indian Accounting Standard (IND AS ) 7 statement depreciation is provided on pro-rata basis from of cash flows. (up- to) the date on which the PPE is available for use (disposed-of). 3.6 Inventories Inventories are carried in the balance sheet as follows: iii The residual values and useful lives of PPE are reviewed in every financial year considering At lower of cost or net realisable the physical condition, benchmarking analysis Raw material value or indicators for review of residual value and At lower of cost or net realisable Work-in Progress value useful life of the respective assets and the At lower of cost or net realisable same is adjusted prospectively. Lease hold Finished Goods value land is amortised over the period of lease. Stores, spares At lower of cost or net realisable iv Free-hold land are not subject to amortisation. and consumable value

ANNUAL REPORT 2017-18 105 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

The cost of inventories comprises of cost of absences, a defined benefit scheme, is made on purchase, cost of conversion and other related the basis of actuarial valuation at the end of each costs incurred in bringing the inventories to their financial year and are charged to the statement respective present location and condition. Net of profit and loss. All actuarial gains or losses are realisable value is the estimated selling price in the recognised immediately in the statement of profit ordinary course of business, less estimated costs and loss. of completion and the estimated costs necessary to d) Other Short-term employee benefits: All employee make the sale. benefits payable wholly within twelve months 3.7 Employee benefits rendering services are classified as short term Expenses and liabilities in respect of employee employee benefits. Benefits such as salaries, wages, benefits are recorded in accordance with Ind-AS 19 short-term compensated absences, performance – Employee Benefits. incentives etc. and the expected cost of bonus, ex- gratia are recognised during the period in which the a) Defined contribution plan employee renders related service. i Provident Fund: Contribution to the provident 3.8 Foreign currency reinstatement and translation fund with the government at pre-determined rates is a defined contribution scheme and is a) Functional and presentation currency charged to the statement of Profit and Loss The financial statements have been presented in when employees have rendered services Indian Rupees (`), which is the Company’s functional entitling them to such benefit. and presentation currency. ii National pension scheme : Contribution to b) Transactions and balances national pension scheme with the at pre- Transactions in currencies other than the entity’s determined rates is a defined contribution functional currency (foreign currencies) are scheme and is charged to the statement of recognised at the rates of exchange prevailing at Profit and Loss when employees have rendered the dates of the transactions. At the end of each services entitling them to such benefit. reporting period, monetary items denominated b) Defined benefit plan in foreign currencies are translated at the rates Gratuity : The Company provides for gratuity, a prevailing on the balance sheet date and exchange defined benefit retirement plan (‘the Gratuity Plan’) gain and losses arising on settlement and covering eligible employees. The Gratuity Plan restatement are recognised in statement of profit provides a lump-sum payment to vested employees and loss. Non-monetary items are measured in at retirement, death, or termination of employment, terms of historical cost in foreign currencies and are of an amount based on the respective employee’s therefore not retranslated. salary and the tenure of employment with the 3.9 Financial instruments – Company. Initial recognition: The Company recognises financial Liabilities with regard to the Gratuity Plan are assets and financial liabilities when it becomes a determined by actuarial valuation, performed by an party to the contractual provisions of the instrument. independent actuary, at each balance sheet date All financial assets and liabilities are recognised at using the projected unit credit method. fair value on initial recognition. Transaction costs that The company recognizes the net obligation of are directly attributable to the acquisition or issue of a defined benefit plan in its balance sheet asan financial assets and financial liabilities that are not asset or liability. Gains and losses through re- at fair value through profit or loss, are added to or measurements of the net defined benefit liability/ deducted from the fair value on initial recognition. (asset) are recognised in other comprehensive Subsequent measurement: income. The actual return of the portfolio of i Financial assets carried at amortised cost: A plan assets, in excess of the yields computed by financial asset is subsequently measured at applying the discount rate used to measure the amortised cost if it is held within a business defined benefit obligations is recognised in Other model whose objective is to hold the asset in Comprehensive Income. The effect of any plan order to collect contractual cash flows and the amendments are recognised in net profits in the contractual terms of the financial asset give Statement of Profit and Loss. rise on specified dates to cash flows that are c) Long term employee benefits: Provisions for solely payments of principal and interest on the other long term employee benefits-compensated principal amount outstanding.

106 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

ii Financial assets carried at fair value through 3.11 Borrowing costs other comprehensive income: A financial asset a) Borrowing costs that are attributable to the is subsequently measured at fair value through acquisition, construction, or production of a other comprehensive income if it is held within qualifying asset are capitalised as a part of the a business model whose objective is achieved cost of such asset till such time the asset is by both collecting contractual cash flows and ready for its intended use or sale. A qualifying selling financial assets and the contractual asset is an asset that necessarily requires a terms of the financial asset give rise on specified substantial period of time to get ready for its dates to cash flows that are solely payments of intended use or sale. principal and interest on the principal amount b) All other borrowing costs are recognised outstanding. as expense in the period in which they are iii Financial assets at fair value through profit incurred. or loss: A financial asset which is not 3.12 Taxation classified in any of (i) & (ii) above categories Income tax expense represents the sum of current are subsequently fair valued through profit or tax and deferred tax. Tax is recognised in the loss. Statement of Profit and Loss, except to the extent iv Financial Liabilities: Financial liabilities are that it relates to items recognised directly in equity subsequently carried at amortized cost using or other comprehensive income. the effective interest method. For trade and Current Tax other payables maturing within one year from i Current tax provision is computed on Income the balance sheet date, the carrying amounts calculated after considering allowances approximate fair value due to the short maturity and exemptions under the provisions of the of these instruments. applicable Income Tax Laws. De-recognition ii Provision for current income taxes and advance The company de-recognises of financial assets when taxes paid are presented in the balance sheet the contractual rights to receive cash flows from the after offsetting them on an assessment year financial asset expire or transfer the financial asset basis. and transfer qualifies for de-recognition under IND AS deferred Tax 109. Deferred tax is recognised on differences between A financial liability is de-recognised when the the carrying amounts of assets and liabilities in obligation under the liability is discharged or the Balance sheet and the corresponding tax bases cancelled or expired. The difference between the used in the computation of taxable profit and are carrying amount of a financial liability that has been accounted for using the Balance Sheet approach extinguished is recognised in profit or loss as other for all taxable temporary differences to the extent income. that it is probable that future taxable profits will be available. Deferred tax assets and liabilities Offsetting of financial instruments are measured at the applicable tax rates and tax Financial assets and financial liabilities are offset laws those are enacted or substantively enacted. and the net amount is reported in the balance sheet Deferred tax assets and deferred tax liabilities are if there is a currently enforceable legal right to offset set-off, and presented on net basis. The carrying the recognised amounts and there is an intention to amount of deferred tax is reviewed at each balance settle on a net basis, to realise the assets and settle sheet date. The measurement of deferred tax the liabilities simultaneously. liabilities and assets reflects the tax consequences 3.10 Derivative financial instruments: that would follow from the manner in which the Company expects, at the end of the reporting period, The Company uses derivative financial instruments, to recover or settle the carrying amount of its assets such as forward contracts to hedge its foreign and liabilities. currency exposure. The recognizing of the resulting gain or loss depends on whether the derivative is 3.13 Revenue recognition and other income designated as a hedging instrument, and if so, on the Revenue from the sale of goods and services are nature of the item being hedged. Any gains or losses measured at the fair value of the consideration arising from changes in the fair value of derivatives received or receivable, net of returns and allowances, are taken directly to profit or loss. trade discounts, rebates and incentives etc. Sales

ANNUAL REPORT 2017-18 107 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

include excise duty but exclude GST / Value added tax the asset or transfer the liability takes place either: and service tax. In the principal market for the asset or liability, or a) Sale of Product / Goods In the absence of a principal market, in the most Revenue from the sale of goods is recognised, advantageous market for the asset or liability when all the significant risks and rewards of The principal or the most advantageous market must ownership of the goods have passed to the buyer, be accessible by the Company. The fair value of an the amount of revenue can be measured reliably asset or a liability is measured using the assumptions and no significant uncertainty exists regarding that market participants would use when pricing the the amount of Consideration that will be derived asset or liability, assuming that market participants act from the sales of goods. in their economic best interest. Export benefits are accounted for in the year of A fair value measurement of a non-financial asset takes exports based on eligibility and when there is into account a market participant’s ability to generate no uncertainty in receiving the same and there economic benefits by using the asset in its highest and is reasonable assurance that the Company best use or by selling it to another market participant will comply with the conditions attached to that would use the asset in its highest and best use. them. The Company uses valuation techniques that are b) Rendering of Service appropriate in the circumstances and for which Revenue from Services is recognised as per sufficient data are available to measure fair value, terms of the contract with customers based on maximising the use of relevant observable inputs and stage of completion when the outcome of the minimising the use of unobservable inputs. transaction involving rendering of services can All assets and liabilities for which fair value is measured be estimated reliably. or disclosed in the financial statements are categorised c) Other Income within the fair value hierarchy, described as follows, Interest income is recognised on a time based on the lowest level input that is significant to the proportion basis taking into account the amount fair value measurement as a whole: outstanding and the rate applicable. Level 1: Quoted (unadjusted) prices in active markets 3.14 Government grants / Assistance for identical assets and liabilities Government grants/Assistance recognised where Level 2: Other techniques for which all inputs which there is reasonable assurance that the same will have a significant effect on the recorded fair value are be received and the eligibility criteria is met out. observable either directly or indirectly Government grants/Assistance are recognised in Level 3: Techniques which use inputs that have a profit and loss account on a systematic basis over the significant effect on the recorded fair value that are not period in which the Company, recognises as expenses based on observable market data. the related cost for which the grants are intended to For assets and liabilities that are recognised in the compensate. financial statements on a recurring basis, the Company 3.15 Dividend Distribution determines whether transfers have occurred between Annual dividend distribution to the shareholders is levels in the hierarchy by re-assessing categorisation recognised as a liability in the period in which the (based on the lowest level input that is significant to the dividends are approved by the shareholders. Any interim fair value measurement as a whole) at the end of each dividend paid is recognised on approval by Board of reporting period. Directors. Dividend payable and corresponding tax on For the purpose of fair value disclosures, the Company dividend distribution is recognised directly in equity. has determined classes of assets & liabilities on the 3.16 Fair Value measurement basis of the nature, characteristics and the risks of the The Company measures financial instruments at fair asset or liability and the level of the fair value hierarchy value at each balance sheet date. as explained above. Fair value is the price that would be received to sell 3.17 Earnings per share an asset or paid to transfer a liability in an orderly Basic earnings per equity share is computed by dividing transaction between market participants at the the net profit attributable to the equity holders of the measurement date. The fair value measurement is company by the weighted average number of equity based on the presumption that the transaction to sell shares outstanding during the year.

108 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

Diluted earnings per equity share is computed by e) The ability to measure reliably the expenditure dividing the net profit attributable to the equity holders during development of the company by the weighted average number of Following initial recognition of the development equity shares considered for deriving basic earnings expenditure as an asset, the asset is carried at cost per equity share and also the weighted average number less any accumulated amortisation and accumulated of equity shares that could have been issued upon impairment losses. Amortisation of the asset begins conversion of all dilutive potential equity shares. when development is complete and the asset is 3.18 Provisions available for use. It is amortised over the period of a) Provisions expected future benefit. Amortisation expense is recognised in the statement of profit and loss unless Provisions (excluding employee benefits) are recognised when the Company has a present such expenditure forms part of carrying value of obligation (legal or constructive) as a result of a another asset. past event and it is probable that an outflow of 4 Critical accounting estimates,assumptions resources embodying economic benefits will be and judgements required to settle the obligation and a reliable estimate can be made of the amount of the In the process of applying the Company’s accounting obligation. If the effect of the time value of money policies, management has made the following is material, provisions are discounted using estimates, assumptions and judgements, which have equivalent period government securities interest significant effect on the amounts recognised in the rate. Provisions are reviewed at each balance financial statement: sheet date and are adjusted to reflect the current a) p roperty, plant and equipment - Useful lives of assets best estimate. The Company reviews the useful life of assets at the b) Contingencies end of each reporting period. This reassessment may Contingent liabilities are disclosed when there is result in change in depreciation expenses in future a possible obligation arising from past events, periods. the existence of which will be confirmed only by b) Warranties the occurrence or non-occurrence of one or more The Company generally offers Warranties for its uncertain future events not wholly within the consumer products and the liability towards warranty- control of the Company or a present obligation related costs are recognized in the year of sales or that arises from past events where it is either service provided to the customers. Management not probable that an outflow of resources will ascertain and measure the liability for warranty be required to settle or a reliable estimate of claims based on historical experience and trend. The the amount cannot be made. Information on assumptions made in relation to current year are contingent liability is disclosed in the Notes to the consistent of those are in prior years. Financial Statements. c) provision and Contingencies Contingent assets are not recognised. However, when the realisation of income is virtually certain, A provision is recognised when the Company has a it is recognised as an asset. present obligation as a result of past events and it is probable that an outflow of resources will be required 3.19 Research and development costs to settle the obligation in respect of which a reliable Research costs are expensed as incurred. Development estimate can be made. expenditures on an individual project are recognised Contingent liabilities are disclosed when there is as an intangible asset when the Company can a possible obligation arising from past events, the demonstrate: existence of which will be confirmed only by occurrence a) The technical feasibility of completing the or non-occurrence of one or more uncertain future intangible asset so that the asset will be available events not wholly within the control of the Company or for use or sale a present obligation that arises from past events where b) Its intention to complete and its ability and it is either not probable that an outflow of resources will intention to use or sell the asset be required to settle or a reliable estimate of the amount c) How the asset will generate future economic cannot be made. Contingent liabilities are disclosed in benefits the notes. Contingent assets are not recognised in the d) The availability of resources to complete the asset financial statements.

ANNUAL REPORT 2017-18 109 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

------89.40 92.22 21.55 27.91 15.55 18.37 15.55 21.91 21.91 ` in crore) ( in progress Capital work Total 2.17 5.31 0.89 3.49 60.26 32.09 83.61 87.31 57.54 359.72 104.61 810.98 172.35 256.17 1,100.79 1,273.14 1,328.09 1,071.92 - - 0.91 0.57 0.01 0.78 0.42 1.02 0.01 0.61 1.41 2.42 3.89 4.67 1.05 2.48 3.09 1.58 Computers

- - 8.81 4.51 0.01 1.90 0.02 1.32 1.98 2.35 2.98 1.09 4.39 6.74 Office 11.90 16.29 18.17 11.43 Equipment's 0.88 0.96 0.55 2.11 0.27 0.16 1.07 0.23 0.92 0.13 3.24 3.38 4.67 6.51 0.43 1.43 2.22 4.29 ehicles V

- - - - 0.92 0.65 0.60 0.15 0.70 0.78 3.81 3.69 5.26 5.86 0.60 1.45 2.23 3.63 Fixtures Furniture and Furniture

1.60 4.61 0.65 3.16 72.47 45.35 27.33 71.45 74.69 49.53 268.77 871.89 679.91 147.66 219.19 841.10 P lant and 1,019.55 1,060.29 Equipment - - 9.33 0.31 2.71 7.04 7.61 0.20 4.50 73.33 19.70 14.25 21.66 178.85 100.07 193.10 202.12 180.46 B uildings ------0.35 0.35 0.34 0.69 1.04 9.93 Land- 10.28 10.97 10.97 10.97 Leasehold ------6.10 5.75 0.19 0.10 7.56 Land- 19.41 19.41 19.50 19.50 Freehold u e al u e al y in g v y in g v Refer Note No.45 Refer i pm ent an d Equ Plant y, The above property plant and equipment are under charge as security against borrowing see note no.17 & 21 as security against borrowing under charge and equipment are property plant The above articulars P Business Combination $ Gross carr 2016 As at 1st April, Additions Disposals arch, 2017 As at 31st M arch, arch, 2018 As at 31st M arch, Additions De p reciation 2016 As at 1st April, Deletion / adjustments Business Combination $ Depreciation for the year Depreciation Disposals arch, 2017 As at 31st M arch, Depreciation for the year Depreciation arch, 2018 As at 31st M arch, Deletion / adjustments N et carr 2017 As at 31st March, arch, 2018 As at 31st M arch, Explanatory Notes: Explanatory i 5 pRO p ert $

110 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

6 Other financial assets (Non current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Unsecured, considered good Security deposits 9.39 9.37 9.39 9.37 7 Other non current assets (` in crore) As at As at 31st March, 2018 31st March, 2017 Capital advances 6.67 2.18 6.67 2.18 8 Inventories (Current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Raw materials 296.32 188.19 Work-in-progress 102.82 82.96 Finished goods 401.91 357.43 Stores, spares and consumable 27.52 26.37 828.57 654.95 The mode of valuation has been stated in note no.3.6 Inventories are hypothecated as security against borrowings see note no.17 & 21

9 Trade receivables (current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Unsecured, considered good 712.59 631.81 Doubtful 7.08 3.16 719.67 634.97 Allowance for doubtful debts 7.08 3.16 712.59 631.81 The Company exposure to credit risk is influenced mainly by individual characteristic of each customers. However the Company also considers the factors that may influence the credit risk of its customer’s base including the default risk associated with the industry. The company reviews the credit risk of each customer individually .The company review includes external ratings, if available, financial statements, industry information, trading history with the Company, information available in public domain and existence of the previous financial difficulties. An impairment analysis is performed at each reporting date on an individual customer basis. The concentration of credit risk is limited due to the fact that customer base is large and unrelated. At every reporting date, the historical observed default rates and changes in the forward-looking estimates are reviewed / analysed. The ageing of trade receivable is as below: (` in crore) As at As at 31st March, 2018 31st March, 2017 Within the credit period 584.53 523.73 1-180 days past due 92.23 75.05 181-365 days past due 14.82 9.37 More than one year 21.01 23.66 Balance at the end of the year 712.59 631.81

ANNUAL REPORT 2017-18 111 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

10 Cash and cash equivalents (` in crore) As at As at 31st March, 2018 31st March, 2017 a. Balance with banks In Current Accounts 0.57 1.64 b. Cheques, drafts on hand 23.13 18.28 c. Cash on hand 0.42 0.44 Cash and cash equivalents as per statement of cash flow 24.12 20.36 11 bANK Balances other than cash and cash equivalents (` in crore) As at As at 31st March, 2018 31st March, 2017 Other bank balances Fixed deposits due to mature within 12 months of reporting date - 1.53 Balance with banks Unpaid dividend ( Earmarked against the corresponding provision refer note no.23) 0.40 0.41

12 Other financial assets (current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Receivables from vendors 46.20 47.15 46.20 47.15

13 Current Tax Assets ( Net) (` in crore) As at As at 31st March, 2018 31st March, 2017 Current Tax asset (net) 2.39 2.43 2.39 2.43

14 Other current assets (` in crore) As at As at 31st March, 2018 31st March, 2017 Considered good, unless otherwise stated MAT Receivable 45.44 51.69 Recoverable from government authorities 55.59 43.93 Balances with statutory authorities 11.90 12.60 Prepaid expenses 4.01 5.56 Advances recoverable 14.30 15.89 131.24 129.67

15 Share capital (` in crore) As at As at 31st March, 2018 31st March, 2017 I Equity Share Capital Authorised 26,13,00,000 (previous year 26,13,00,000) Equity Shares of ` 10/- each 261.30 261.30 with voting rights Issued, subscirbed and fully paid up Equity share capital 5,44,08,974 (previous year 5,44,08,974) Equity Shares of ` 10/- each 54.41 54.41 with voting rights 54.41 54.41

112 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

(` in crore) As at As at 31st March, 2018 31st March, 2017 Movement of Equity Shares Balance at the beginning of the reporting period 5,44,08,974 4,38,31,250 Issued during the year - 1,05,77,724 Balance at the end of the reporting period 5,44,08,974 5,44,08,974 Increase in Authorised and Issued Share Capital are deemed to be for the year ended 31st March, 2017 pursuant to Scheme of Arrangement and there have been deemed movement of 1,05,77,724 equity shares in previous year. (` in crore) As at As at 31st March, 2018 31st March, 2017 II Preference share capital Authorised 6,20,000 (previous year 6,20,000) Preference shares of ` 100/- each 6.20 6.20 There are no issued, subscribed and fully paid up preference share capital therefore not disclosed.

III Terms / rights attached to equity shares The company has one class of equity shares having a par value of `10 per share. Each shareholder is eligible for one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. Iv details of shares held by each shareholder holding more than 5% shares: As at As at Names 31st March, 2018 31st March, 2017 Number of % holding Number of % holding in shares held in that class shares held that class of shares of shares Diwakar Marketing Private Limited 56,37,500 10.36 56,37,500 10.36 Cubitex Marketing Private Limited 48,61,000 8.93 48,61,000 8.93 Shreyansh Mercantile Private Limited 31,78,000 5.84 31,78,000 5.84 Sahaj Tie-Up Private Limited 31,25,087 5.74 31,25,087 5.74

16 Other Equity (` in crore) As at As at 31st March, 2018 31st March, 2017 a. Capital redemption reserve 3.00 3.00 b. Capital Reserve Balance at the beginning of the financial year 124.69 - Add: Due to Business Combination (Refer Note No.45) - 124.69 Balance at the end of the financial year 124.69 124.69 c. Securities premium account 142.71 140.95 Add: Due to Business Combination (Refer Note No.45) - 1.76 Balance at the end of the financial year 142.71 142.71 d. Forfeiture reserve 17.63 17.63 e. General reserve Balance at the beginning of the financial year 60.36 54.36 Add: transferred during the financial year 11.00 6.00 Balance at the end of the financial year 71.36 60.36 f. Surplus in the statement of profit and loss Balance at the beginning of the financial year 553.09 433.09 Add: Due to Business Combination (Refer Note No.45) - 45.00 Addition during the financial year 108.04 86.28 661.13 564.37

ANNUAL REPORT 2017-18 113 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

(` in crore) As at As at 31st March, 2018 31st March, 2017 Transfer to General reserves (11.00) (6.00) Dividend of previous years (6.57) (4.38) Dividend distribution tax (1.35) (0.90) (18.92) (11.28) Balance at the end of financial year 642.21 553.09 g. Other comprehensive income / (Loss) for the year Balance at the beginning of the financial year (4.97) (1.40) Add: Due to Business Combination (Refer Note No.45) - (0.23) Reassessment of defined benefit liabilities (3.72) (3.34) Balance at the end of the financial year (8.69) (4.97) Total 992.91 896.51 Notes : a. Capital Redemption Reserve Capital Redemption Reserve was created on redemption of preference share capital. The Company may issue fully paid-up bonus share to it’s members out of the capital redemption reserve account. b. Capital Reserve Capital reserve has been created on Business Combination on appointed date i.e.1st April, 2016 Pursuant to the Scheme of Arrangement (refer note no.45). c. Securities premium account Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act. d. Forfeiture reserve Forfeiture Reserve represents the forfeiture of amount of consideration received on allotment of warrants of the cases where option to take equity shares were not exercised within the prescribed time in accordance with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. e. General reserve The general reserve is used time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by transfer from one component of equity to another equity, hence items included in general reserve will not be reclassified subsequently to profit and loss. f. Dividend The Dividend of ` 10.88 crores for the Year 2017-18 ( ` 6.57 crores for the Year 2016-17) is accounted for in the year in which dividends are approved by the shareholders as per IND AS.

17 Borrowings (` in crore) As at As at 31st March, 2018 31st March, 2017 Secured measured at amortised cost Term loans from banks Rupee loans 220.61 60.22 Foreign currency loans 103.59 318.26 Term loans from financial institutions Rupee loans - 42.66 Foreign currency loans 56.14 19.00 380.34 440.14 Less : Loan repayment within one year 25.96 39.53 25.96 39.53 354.38 400.61

114 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

A Term loan availed by the Company (except erstwhile Surya Global Steel Tubes Limited) Term Loans of ` 301.77 crore (` 340.11 crore as at 31st March 2017) are secured by way of first pari-passu charge on all fixed Assets (except relating to erstwhile Surya Global Steel Tubes Limited) including equitable mortgage of Land and Building and further secured by way of second pari-passu charge on Company’s entire (except relating to erstwhile Global Steel Tubes Limited) Current Assets both present and future and personal guarantee of the Chairman of the Company. a Rupee Term Loans from banks aggregating to ` 159.74 crore (` 39.35 crore as at 31st March 2017) are payable in 28 (maximum) quarterly instalments, with last repayment date of 30th September, 2025, carrying floating interest rate linked with MCLR of respective banks ranging from MCLR to 150 bps spread with periodical interest reset. b Rupee term loans from financial institutions of ` Nil (` 42.66 crore as at 31st March 2017) c Foreign Currency Term Loan from banks aggregating to ` 85.89 crore (` 258.10 crore as at 31st March 2017) are payable in 28 (maximum) quarterly instalments, with last repayment date of 30th September, 2025, carrying floating interest rate LIBOR + 200 bps spread with periodical interest reset. d Foreign Currency Term Loan from financial institution aggregating to ` 56.14 crore (` Nil as at 31st March 2017) are payable in 29 (maximum) quarterly instalments, with last repayment date of 1st October, 2026, carrying floating interest rate LIBOR + 225 bps spread with periodical interest reset. b Term Loan availed by erstwhile Surya Global Steel Tubes Limited Term Loans of ` 78.57 crore (` 100.03 crore as at 31st March 2017) are secured by way of first pari-passu charge on all fixed Assets (relating to erstwhile Surya Global Steel Tubes Limited) including equitable mortgage of Land and Building and further secured by way of second pari-passu charge on Company’s entire (relating to erstwhile Surya Global Steel Tubes Limited) Current Assets both present and future and personal guarantee of the Chairman of the Company. a Rupee Term Loans from banks aggregating to ` 60.87 crore (` 20.87 crore as at 31st March, 2017) are repayable in 21 (maximum) quarterly instalments, with last repayment date of 1st April, 2024, carrying floating interest rate linked with MCLR of respective banks ranging from MCLR + 05 bps to 125 bps spread with periodical interest reset. b. Foreign Currency Term Loan from banks aggregating to ` 17.70 crore (` 60.16 crore as at 31st March 2017) are repayable in 13 (maximum) quarterly instalments, with last repayment date of 30th June, 2022 March,2022, carrying floating interest rate LIBOR + 250 bps with periodical interest reset. c. Foreign Currency Term Loan from financial institutions aggregating to ` Nil (` 19.00 crore as at 31st March 2017)

18 Others financial liabilities (Non current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Security deposit 10.27 8.93 10.27 8.93

19 pROvision (Non current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Provision for employee benefits Gratuity (refer note 47) 35.38 27.33 Compensated absences (refer note 47) 10.15 7.13 45.53 34.46

ANNUAL REPORT 2017-18 115 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

20 dEFERREd tax liabilities (` in crore) As at As at 31st March, Recognized Recognized 31st March, 2017 in P & L in OCI 2018 Deferred tax liabilities / assets are attributable to the following items; Deferred tax liabilities Property, plant and equipment 89.55 13.74 103.29 Sub- (a) 89.55 13.74 - 103.29 Deferred tax assets Provision for employee benefit 13.30 2.06 1.97 17.33 Allowance for doubtful debts - 2.45 2.45 Sub- (b) 13.30 4.51 1.97 19.78 Net deferred tax liability (a-b) 76.25 9.23 (1.97) 83.51

(` in crore) As at As at 1st April, Business Recognized Recognized 31st March, Deferred tax liabilities 2016 Combination in P & L in OCI 2017 Deferred tax liabilities / assets are attributable to the following items; Deferred tax liabilities Property, plant and equipment 61.43 14.08 14.04 89.55 Sub- (a) 61.43 14.08 14.04 - 89.55 Deferred tax assets Provision for employee benefit 9.08 0.59 1.86 1.77 13.30 Sub- (b) 9.08 0.59 1.86 1.77 13.30 Net deferred tax liability (a-b) 52.35 13.49 12.18 (1.77) 76.25

21 bORROwings (current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Secured measured at amortised cost Loans repayable on demand From banks Rupee loans 365.25 317.16 Foreign currency loans 181.80 118.60 Commercial paper 170.00 195.00 717.05 630.76 Working Capital Loans of ` 575.27 crore are secured against current assets (except relating to erstwhile Surya Global Steel Tubes Limited) both present and future and further secured by way of second charge on all Fixed Assets (except relating to erstwhile Surya Global Steel Tubes Limited) including equitable mortgage of Land and Building and personal guarantee of the Chairman of the Company. The rupee loans linked with MCLR of respective banks ranging from MCLR to 90 bps spread over MCLR, commercial paper(s) carrying interest rate 7.75% and foreign currency loan from LIBOR + 200 to 225 bps spread.

Working Capital Loans of ` 141.78 crore are secured against current assets (relating to erstwhile Surya Global Steel Tubes Limited) both present and future and further secured by way of second charge on all Fixed Assets (relating to erstwhile Surya Global Steel Tubes Limited) including equitable mortgage of Land and Building and personal guarantee of the Chairman of the Company. The rupee loans linked with MCLR of respective banks ranging from MCLR to 100 bps spread over MCLR.

116 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

22 Trade payables (` in crore) As at As at 31st March, 2018 31st March, 2017 outstanding dues of micro enterprises and small enterprises 14.52 6.87 outstanding dues other than micro enterprises and small enterprises 393.83 334.14 408.35 341.01 I The details of amounts outstanding to Micro, Small and Medium Enterprises based on available information I The Principal amount and the interest due thereon remaining unpaid to any supplier. information Principal Amount : 14.52 6.87 Interest : Nil Nil ii The amount of interest paid by the Company along with the amounts of the payment made to the supplier beyond the appointed day for the year ending. Nil Nil iii The amount of interest due and payable for the period of delay in making payment (beyond the appointed day during the year) Nil Nil iv The amount of interest accrued and remaining unpaid for the year ending. Nil Nil v The amount of further interest remaining due and payable for the earlier years. Nil Nil The Information has been given in respect of such suppliers to the extant they could be identified as “Micro and Small” enterprises on the basis of information available with the Company.

23 Other financial liabilities (Current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Current maturities of long-term borrowings (refer note 17) 25.96 39.53 Interest accrued but not due on borrowings 3.12 4.32 Unpaid dividends* (Refer Note No.11) 0.40 0.41 Payable to employees 30.76 23.85 Expenses Payable 60.17 35.73 120.41 103.84 * There are no amounts due and outstanding to be credited to the Investor Education & Protection Fund as at 31st March 2018.

24 Other liabilities (Current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Advances from customers 16.04 10.60 Duties and taxes payable 15.88 24.05 Excise duty on closing stock - 12.95 31.92 47.60 25 pROvisions (Current) (` in crore) As at As at 31st March, 2018 31st March, 2017 Provision for employee benefits Gratuity (refer note 47) 3.22 2.54 Compensated absences (refer note 47) 1.32 1.08 4.54 3.62 Other payables Warranty payable (refer note 43) 26.44 16.36 26.44 16.36 30.98 19.98

ANNUAL REPORT 2017-18 117 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

26 Current tax liabilities (` in crore) As at As at 31st March, 2018 31st March, 2017 Current tax liability (net) 5.68 1.84 5.68 1.84

27 Income tax (` in crore) As at As at 31st March, 2018 31st March, 2017 a Income tax recognized in profit or loss Current tax expense 38.85 19.11 Deferred tax expense Origination and reversal of temporary differences 9.23 12.18 Total tax expenses 48.08 31.29 b Reconciliation of effective tax rate Profit before tax 156.12 117.57 Domestic tax rate 34.608% 34.608% Tax using the Company’s domestic tax rate 54.03 40.68 Increase / reduction in Taxes on account of Income not taxable / exempt from tax (6.65) (9.89) Other non deductible expenses 0.70 0.50 Income tax expenses charged to statement of profit and loss 48.08 31.29 The gross movement in the current income tax asset/ (liability) for the year ended 31st March, 2018 and March 31, 2017 is as follows: During the year ended 31st March, 2018 and 31st March, 2017, company has taken deduction/ availed exemption; a) under section 80-IC of the Income-Tax Act on 30% Profits of eligible industrial undertakings at Kashipur, Uttarakhand b) under section 32AD of the Income-Tax Act, 1961 @ 15% on the Plant & Machinery installed at newly set-up unit at Hindupur in the notified backward area of the state of Andhra Pradesh. c) Research and development expenditure @ 150% (previous year @200%) in accordance with the provisions of Section 35(2AB) of the Income-Tax Act, 1961. d) under section 32AC of the Income-Tax Act, 1961 ,deduction @ 15% on Plant & Machinery installed by the company during the year ended 31st March, 2017 28 Revenue from operations (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Sale of goods (including excise duty); i. Steel pipe and strips 3,581.81 2,822.85 ii. Lighting and consumer durables 1,375.34 1,332.36 4,957.15 4,155.21 Less Inter Segment Sales 6.65 3.63 4,950.50 4,151.58 b. Other operating revenue; i. Investment promotion assistance ( refer note no.44) 19.05 11.76 ii. Export incentives and claims 33.45 7.89 52.50 19.65 c. Sale of services 8.76 9.80 8.76 9.80 5,011.76 4,181.03 Note: As per the requirement of Ind AS Revenue for the period(s) up to 30th June 2017 were reported inclusive of Excise Duty of ` 80.60 crores (previous year `297.50 crores). The Government of India has implemented Goods and Service Tax (“GST”) from 1st July 2017 replacing Excise Duty, Service Tax and various other indirect taxes. As per Ind AS 18 the revenue from the 1st July 2017 of the current year is reported net of GST.

118 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

29 Other income (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Interest Income from financial assets measured at amortised cost 2.52 0.51 b. Profit on sale of property, plant and equipment 0.05 0.10 c. Miscellaneous income 0.09 0.27 2.66 0.88 30 Cost of materials consumed (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Raw materials (Imported) 225.33 366.77 b. Raw materials (Indigenous) 3,338.13 2,224.58 c. Packing materials consumed 43.57 40.97 3,607.03 2,632.32 31 purchase of stock in trade (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Purchase / outsourced materials 291.21 344.64 32 Changes in inventories of finished goods, stock-in-trade and work-in-progress (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 Inventories at the end of the year Finished goods 401.91 357.43 Work in Progress 102.82 82.96 504.73 440.39 Inventories at the beginning of the year Finished goods 357.43 281.62 Less : Excise Duty on opening stock 19.73 - Finished goods (Net) 337.70 281.62 Work in Progress 82.96 54.88 420.66 336.50 Add : Inventories from trial run operations (refer note : 46) - 21.06 (84.07) (82.83) 33 Employee benefit expenses (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Salaries, wages and bonus 249.99 219.77 b. Contribution to provident and other funds (Refer Note 47) 12.78 10.90 c. Staff welfare expenses 6.09 4.87 268.86 235.54

34 Finance cost (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Interest expenses on financial liabilities at amortised cost 97.93 104.14 b. Other borrowing cost 7.23 8.58 105.16 112.72

ANNUAL REPORT 2017-18 119 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

35 dEpreciation and amortisation expenses (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Depreciation on tangible assets (Refer Note 5) 87.31 83.61 87.31 83.61

36 Other expenses (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 a. Consumption of stores and spares 31.47 27.46 b. Power and fuel (Refer Note 44 (b)) 79.27 74.10 c. Water charges 0.80 0.81 d. Repairs and maintenance : - plant and machinery 1.70 2.29 - buildings 0.48 0.45 - others 1.31 0.63 e. Warranty cost (Refer note 43) 60.98 45.32 f. Commission on sales 11.70 9.96 g. Advertisement and publicity 15.91 11.82 h. Outward freight charges 150.12 128.68 i. Allowance for doubtful debts / bad debts W/off 7.14 1.73 j. Foreign currency fluctuations - 0.32 k. Rent 9.91 8.78 l. Rates and taxes 0.40 0.74 m. Insurance 2.19 2.04 n. Postage, telegraph and telephone 2.59 2.79 o. Printing and stationery 1.77 1.53 p. Travelling and conveyance 21.25 19.77 q. Staff recruitment and training expenses 0.14 0.15 r. Loss on discard / disposal of property, plant and equipment 0.15 0.05 s. Corporate social responsibility expenses (refer note 40) 2.04 1.76 t. Auditor's remuneration ( excluding GST / service tax input credit) for audit 0.11 0.11 for tax audit 0.04 0.03 for certification work 0.01 0.01 for reimbursement of out of pocket expenses 0.03 0.02 u. Miscellaneous expenses 100.69 99.49 502.20 440.84

37 Other comprehensive income (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 Items that will not be reclassified to profit or loss i. Remeasurements of the defined benefit plans (5.69) (5.11) Income tax relating to items that will not be reclassified to profit or ii loss - Related to remeasurements of the defined benefit plans 1.97 1.77 (3.72) (3.34)

120 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

38 Earning Per Share (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share: A Issued equity shares No's 5,44,08,974 5,44,08,974 B Weighted average equity shares outstanding - Basic and Diluted No's 5,44,08,974 5,44,08,974 C Net profit after tax 108.04 86.28 Basic Earning per equity share ( C/B) Per / ` 19.86 15.86 Diluted Earning per equity share ( C/B) Per / ` 19.86 15.86 Face Value per Equity Share ` 10.00 10.00

39 Leases The company have leasing arrangements in the nature of operating leases for premises (offices / godown etc.). These leasing arrangements are usually renewable by mutual consent or cancelable on mutually agreeable terms. The aggregate lease rentals payable are charged as rent in the statement of profit and loss.

40 Expenditure incurred on Corporate Social Responsibility Details of expenditure on Corporate Social Responsibility Activities as per Section 135 of the Companies Act, 2013 read with schedule III are as below: (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 A Gross amount required to be spent by the Company during the year 2.04 1.76 B Amount spent during the year i Construction/ acquisition of asset NIL NIL ii On purpose other than (i) above – (a) Rural Development 1.83 1.57 (b) Naturopathy 0.14 0.10 (c) Other administrative expenses 0.07 0.09 2.04 1.76 Out of the above amount, spent through Surya Foundation ` 2.04 crores (previous year of ` 1.73 crore)

41 Contingent Liabilities (` in crore) As at As at 31st March, 2018 31st March, 2017 I Guarantees Bank Guarantees issued by banks for which counter guarantee given by the Company 266.74 178.46 II Other contingent liabilities Export obligation under EPCG Scheme a) Bonds Executed by the Company to Custom Department 17.31 18.69 b) Duty involved on EPCG License 7.98 8.56 c) Estimated amount of contract remaining to be executed on capital account (Property, Plant and Equipment) and not provided for 31.93 7.58 Claims against the company not acknowledged as debt 2.05 1.90

ANNUAL REPORT 2017-18 121 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

Entry of Goods into Local Area Act, 2008 : The Haryana Government levied Local Area Development Tax (The LADT Act) w.e.f. 5th May, 2000, which was declared ultra vires by the Hon’ble Punjab & Haryana High Court on 14th March, 2007. Later on, the Haryana Government has repealed the LADT Act w.e.f. 8th April, 2008 and introduced in its place ‘The Haryana Tax on Entry of Goods in to Local Areas Act, 2008’ (Rules not notified), which was also held ultra vires by the Hon’ble High Court on 1st October, 2008. Subsequently, on the SLP of the Haryana Government, the Hon’ble Supreme Court Constitutional Bench vide its judgement dated 11th November, 2016 held the applicability of entry tax valid on compensatory ground. However, directed its Divisional Bench for examining the provisions on the issue of discrimination & local area. The Divisional Bench remanded back the matters to the Hon’ble Punjab & Haryana High Court on 21st March, 2017 with a direction to file fresh writ petitions. Accordingly the Company has filed fresh writ petition on 27-05-2017 and the Hon’ble High Court issued order for stay of demand on 31-05-2017 and proceedings are undergoing with the Hon’ble High Court. In view of above, a sum of ` 33.97 crore (` 33.20 crore as on 31st March, 2017) without interest has been considered as contingent liability, based on the facts of our case and consultations made by the Company. Accordingly no provision has been made in accounts. 42 Income Tax act. In respect of Income-tax assessments of the Company (for the year 2009-10,2010-11 & 2012-13) demand of ` 56.34 cr. were raised wherein, Company had appealed and the case were decided in favour of the Company by CIT (A). Revenue has preferred an appeal before ITAT. But based on the decision in favour of the company, interpretations and decisions of appellate authorities and Courts in similar cases and as per the consultations made, the Company is not liable for such tax and accordingly no provision has been made. 43 mOvement in warranty provision (` in crore) As at As at 31st March, 2018 31st March, 2017 Movement in warranty provision during the financial year are provided below: As at beginning of the year 16.36 7.16 Arising During the Year 60.98 45.32 Utilised during the year 50.90 36.12 Closing balances as at 26.44 16.36 44 gOvernment Grant (Investment promotion assistance) a madhya Pradesh Industrial Investment Promotion Assistance Scheme- 2004 & 2010 The Company has made investment of ` 122.11 Crores and ` 79.86 Crores for establishing manufacturing facilities at Malanpur, a notified backward district of Madhya Pradesh in the eligible investment period as per the provisions of Madhya Pradesh Industrial Investment Promotion Assistance Scheme- 2004 and 2010 respectively. The Company has been eligible for capital grant to the extent of aforesaid investment by way of 75% assistance of VAT/ CST deposited for 10 Years up to 27th March, 2020 & 1st March, 2025 respectively and further the company has exemption from entry tax for an initial period of 5 years as per the said scheme only on satisfying the conditions mentioned under the respective schemes. On implementation of GST, Company is eligible for the similar benefits by way of refunds for which representations have also been made to the state Government. The State Government is in the process of announcing the revised mechanism for refunds and accordingly, the Company has recognised grants of ` 12.83 Crores during the current year, ` 11.63 crores during the previous year and cumulative ` 52.26 Crores up to 31st March, 2018 under both the regimes. b Andhra Pradesh Industrial Investment Policy (IDP) 2015-2020 The Company has made an investment of ` 62.64 Crores for the establishing manufacturing facilities at Hindupur a notified backward district of Andhra Pradesh, during the eligible investment period, as per the provisions of Andhra Pradesh Industrial Investment Policy (IDP) 2015-2020. The Company has been eligible for Capital grant to the extent of aforesaid investment by way of 50% Reimbursement of VAT/CST/SGST deposited for 7 Years and Partial re-imbursement of power cost @ Re 1.00 per unit for a period of 5 years from 1st March, 2017, on satisfying the conditions mentioned under the scheme. The Company has recognised grants of ` 3.22 Crores (including ` 0.59 Crores towards re-imbursement of power cost) during the current year, ` 0.17 crore (including ` 0.04 Crores towards re-imbursement of power cost) during the previous year and Cumulative ` 3.39 Crores (including ` 0.63 Crores towards re-imbursement of power cost) up to 31st March, 2018.

122 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

c Lighting Unit in Uttarakhand The company’s manufacturing unit at Mahuakheraganj, Uttarakhand was entitled for excise exemption under area based excise exemption scheme vide erstwhile Notification No.50/2003 Dated.10.06.2003 for the period up to 31st March 2020. Accordingly, the products manufactured by the Company were exempted from the payment of excise duty up to 30th June, 2017. On implementation of GST w.e.f 1st July, 2017, Company is eligible for the identical grant by way of partial refunds of GST for which representations have been made to the Governments. Considering the refund entitlements, the Company has recognised benefits of ` 3.59 Crores during the current year towards refund of GST paid by the unit.

45 Combination of Business - Composite Scheme of Arrangement A Scheme of Arrangement (hereinafter referred to as ‘Scheme’) amongst Surya Roshni Limited (Company) and its associate Surya Global Steel Tubes Limited ( eSGSTL) and their respective shareholders and creditors under section 230 to 232 of the Companies Act, 2013 has been sanctioned by the Hon’ble National Company Law Tribunal, Chandigarh Bench (NCLT) vide its Order dated 11th December, 2017 (made effective from 11th January,2018) and consequently business of Surya Global Steel Tubes Limited has been transferred to the Company and as per the scheme figures of previous year have been restated wherein the Company has recorded the assets and liabilities of eSGSTL at their respective book values as on the appointed date i.e. 1st April, 2016.

46 pRE-operative expenses capitalised during the year: The Company has incurred capital expenditure at Hindupur for ERW steel pipes manufacturing unit and at Anjar unit for 3 LPE coating plant facilities, wherein following pre-operative expenses are capitalised (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 Raw materials consumed - 31.77 Employee benefits 0.15 2.18 Borrowing cost - 1.76 Other expenses Power charges 0.16 0.55 Outward freight - 0.94 Others 0.08 2.50 Total 0.39 39.70 Less: recoveries net of excise (including stock on the date of commencement of operations) - 35.66 Total 0.39 4.04

47 Employee Benefits Expense recognised for defined contribution plan and included in employee benefit expenses: The principal actuarial assumptions used for estimating the Company’s defined benefit obligations are set out below: Valuation as at 31st March, 2018 31st March, 2017 Attrition rate for various ages in % 1.00 to 5.00 1.00 to 3.00 Discount Rate in % 7.73 7.50 Expected Rate of increase in salary in % 5.75 4.00 Mortality rate "100% of Indian "100% of Indian Assured Lives Mortality Assured Lives Mortality (2006-08)" (2006-08)" Expected Average remaining working lives of employees (years) 16.47 17.33 The assumption of future salary increase takes into account the inflation, seniority, promotion and other relevant factors such as supply and demand in employment market.

ANNUAL REPORT 2017-18 123 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

Amount recognised in the statement of Profit and Loss: (` in crore) Particulars For the year ended For the year ended 31st March, 2018 31st March, 2017 Gratuity Compensated Gratuity Compensated absences absences Current Service cost 3.30 1.54 2.32 1.27 Interest cost 2.24 0.61 1.78 0.43 Remeasurement - Actuarial loss/(gain) - 2.47 - 1.92 Expenses recognised in the statement of Profit and Loss 5.54 4.62 4.10 3.62 Component of defined benefit costs recognised in other comprehensive income (` in crore) Gratuity For the year ended For the year ended 31st March, 2018 31st March, 2017 Actuarial loss / (gain) arising from changes in demographic assumptions 0.01 - Actuarial loss / (gain) arising from changes in Financial assumptions 4.56 3.71 Actuarial loss / (gain) arising from experience adjustment 1.12 1.40 Actuarial loss / (gain) arising on plan asset - - Component of defined benefit costs recognised in other comprehensive 5.69 5.11 income Note: The current service cost and the net interest expense for the year are included in the ‘Employee benefit expense’ line item in the statement of profit and loss. The remeasurement of the net defined benefit liability is included in other comprehensive income. Current and non-current provision for Gratuity and Compensated absences

(` in crore) As at As at Particulars 31st March, 2018 31st March, 2017 Gratuity Compensated Gratuity Compensated absences absences Current provision 3.22 1.32 2.54 1.08 Non-current provision 35.38 10.15 27.33 7.13 Total provision 38.60 11.47 29.87 8.21

Movement in Obligation (` in crore) Particulars For the year ended For the year ended 31st March, 2018 31st March, 2017 Gratuity Compensated Gratuity Compensated (partly absences (partly absences funded) (Unfunded) funded) (Unfunded) Present value of obligation as at the beginning of the period 29.87 8.21 21.13 4.79 Business Combination - - 1.17 0.57 Service cost 2.87 1.54 2.32 1.27 Past Service Cost including curtailment Gain/Losses 0.43 - - - Interest cost 2.24 0.61 1.78 0.43 Benefits paid (2.50) (1.37) (1.64) (0.77) Actuarial loss / (gain) arising from changes in Demographic assumptions 0.01 0.01 - - Actuarial loss / (gain) arising from changes in Financial assumptions 4.56 1.59 3.71 1.04 Actuarial loss / (gain) arising from experience adjustment 1.12 0.88 1.40 0.88 Present value of obligation as at the end of the period 38.60 11.47 29.87 8.21

124 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

movements in the fair value of the plan assets are as follows: (` in crore) Particulars For the year ended For the year ended 31st March, 2018 31st March, 2017 Opening fair value of plan assets 0.02 0.02 Interest income - - Return on plan assets (excluding amounts included in net interest - - expenses) Benefits paid - - Closing fair value of the plan assets 0.02 0.02 Note: The Company has invested the plan assets in India only and closing value of the plan assets are the fair value of plan assets Sensitivity Analysis: Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and withdrawal rate. The sensitivity analyses below have been determined based on reasonably possible changes of respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. (` in crore) Particulars For the year ended For the year ended 31st March, 2018 31st March, 2017 Effect on Effect on Effect on Effect on Gratuity Compensated Gratuity Compensated Obligation absences Obligation absences Obligation Obligation One percentage point increase in discount rate (3.09) (1.05) (2.47) (0.76) One percentage point decrease in discount rate 3.55 1.23 2.67 0.82 One percentage point increase in salary growth rate 3.47 1.24 2.74 0.85 One percentage point decrease in salary growth rate (3.08) (1.08) (2.56) (0.79) One percentage point increase in attrition rate 0.86 0.31 0.72 0.25 One percentage point decrease in attrition rate (0.81) (0.35) (0.97) (0.29) Note : The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. Their was no change in the method and assumptions used in preparing the sensitivity analysis from prior years. Maturity profile of Defined Benefit Obligation As at March, 2018 (` in crore) Particulars As at 31st March 2018 As at 31st March 2017 Gratuity Compensated Gratuity Compensated absences absences 0 to 1 Year 3.22 1.32 2.53 1.08 1 to 2 Years 1.30 0.65 0.46 0.29 2 to 3 Years 1.71 0.54 0.64 0.48 3 to 4 Years 1.89 0.53 1.14 0.41 4 to 5 Years 1.87 0.42 1.38 0.36 5 to 6 Years 1.74 0.48 1.52 0.31 6 Year Onwards 26.90 7.54 22.20 5.28

48 Related party transactions In accordance with the requirements of IND AS 24, on related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are:

ANNUAL REPORT 2017-18 125 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

List of related parties 1 Key Management Personnel S.No. Name Designation 1 Mr. Jai Prakash Agarwal Chairman 2 Mr. Raju Bista Managing Director 3 Mr. Vinay Surya Executive Director 4 Mr. Mukesh Tripathi Whole-time Director 5 Mr. R.N. Maloo ED & Group CFO 6 Mr. Ramanjit Singh CEO-Lighting Operations 7 Mr. Tarun Baldua CEO-Steel Operations 8 Mr. B B Singal Sr. VP & Company Secretary 2 Relatives of key management personnel where transactions have taken place S.No. Name of Relatives Relationship 1 Mrs. Urmil Agarwal Spouse of Mr. Jai Prakash Agarwal 2 Mrs. Puja Surya Spouse of Mr. Vinay Surya 3 Mr. Rajesh Bista Brother of Mr. Raju Bista 3 The following transactions were carried out with the related parties in the ordinary course of business (` in crore) S.No. Nature of transaction/ relationship Year ended Year ended 31st March, 2018 31st March, 2017 i Payment of Salaries, commission and perquisites Mr. Jai Prakash Agarwal 3.30 2.40 Mr. Raju Bista 1.92 1.80 Mr. Vinay Surya ( Joined on 1st January 2018) 0.20 - Mr. Mukesh Tripathi # 0.98 1.25 Mr. R.N. Maloo 0.70 0.53 Mr. Ramanjit Singh 1.18 0.90 Mr. Tarun Baldua 0.89 0.79 Mr. B B Singal 0.34 0.25

# In the previous year and upto 11th January, 2018 in the current year ` 0.76 crore managerial remuneration drawn from the SGSTL amalgamating company Compensation of Key Management Personnel of the Company (` in crore) S.No. Nature of transaction/ relationship Year ended Year ended 31st March, 2018 31st March, 2017 ii Short-Term benefits (see notes below) 9.51 7.92 Total 9.51 7.92 Notes: A. Short-term benefits comprises the expenses recorded under the head employee benefit expenses (eg. Salary and wages, contribution to provident and other funds and staff welfare expenses). B. The liability for gratuity and compensated absences are provided on actuarial basis for the Company as a whole, amounts accrued pertaining to key managerial personnel are not included above. C. The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. (` in crore) S.No. Nature of transaction/ relationship Year ended Year ended 31st March, 2018 31st March, 2017 iii Payment of Salaries and perquisites to relatives of KMP 1 Mrs. Puja Surya 0.19 - 2 Mr. Rajesh Bista 0.08 0.07

126 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

(` in crore) S.No. Nature of transaction/ relationship Year ended Year ended 31st March, 2018 31st March, 2017 iv Director sitting Fee's Mrs. Urmil Agarwal 0.01 0.03 Krishan Kumar Narula 0.06 0.05 Ravinder Kumar Narang 0.03 0.03 Utpal Kumar Mukhopadhyay 0.02 0.03 Tara shankar Bhattacharya 0.02 0.02 Sudhanshu Kumar Awasthi 0.02 0.01 Surendra Singh Khurana 0.02 0.01 Rajeev Kumar Sinha (IDBI Nominee) - 0.01 Shivani Singla (IDBI Nominee) 0.01 - Sunil Sikka 0.01 - Dr. Salila Tewari # - 0.02 # Resigned from the Board of the company on March 27, 2017

49 Segment information description of segments and principal activities The Chief operational decision makers (CODM) monitor the operating results of its Business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segments have been identified on the basis of the nature of products/ services and have been identified as per the quantitative criteria specified in the Ind AS. Specifically, the Company’s reportable segments under Ind AS are as follows: 1 Steel Pipe and Strips (comprises Steel pipes and cold rolled strips) 2 Lighting and consumer durables (comprises Lamps, fittings, fans, steel light, electric appliances and allied items)

Identification of Segments: For financial statements presentation purposes, these individual operating segments have been aggregated intoa singal operating segment after taking into consideration the similar nature of the products, production processes and other risk factors. For financial statements presentation purposes, these individual operating segment’s have been aggregated into a single operating segment taking into account the following factors: i. These operating segments have similar long-term gross profit margins; ii. The nature of the products and production processes are similar; and iii. The methods used to distribute the products to the customer are same The additional factors taken into consideration for aggregation into a single operating segment are as follows: i. Operating revenues and expenses related to both third party and inter-segment transactions are included in determining the segment results of each respective segment. ii. Finance income earned and finance expense incurred are not allocated to individual segment and the same has been reflected at the Company level for segment reporting. iii. The total assets disclosed for each segment represent assets directly managed by each segment, and primarily include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances, inter-segment assets and exclude derivative financial assets, deferred tax assets and income tax recoverable. iv. Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred tax liabilities and derivative financial liabilities. v. Segment capital expenditure comprises additions to property, plant and equipment and intangible assets (net of rebates, where applicable). vi. unallocated expenses/ results, assets and liabilities include expenses/ results, assets and liabilities (including inter-segment assets and liabilities) and other activities not allocated to the operating segments. These also include current taxes, deferred taxes and certain financial assets and liabilities not allocated to the operating segments.

ANNUAL REPORT 2017-18 127 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

I. Segment revenues and results (` in crore) Particulars For the year ended For the year ended 31st March, 2018 31st March, 2017 Segment revenue Steel Pipe and 3,623.40 2,835.59 Strips Lighting and 1,395.01 1,349.07 consumer durables 5,018.41 4,184.66 Less : Inter Segment revenue 6.65 3.63 5,011.76 4,181.03 Segment profit (earning before interest Steel Pipe and Strips 143.60 113.48 and taxes) Lighting and 117.68 116.81 consumer durables 261.28 230.29 Finance costs 105.16 112.72 Profit before tax 156.12 117.57 Tax expense 48.08 31.29 Profit after tax 108.04 86.28 II. Segment Assets and Liabilities (` in crore) Particulars As at As at 31st March, 2018 31st March, 2017 Segment assets Steel Pipe and Strips 1,812.19 1,650.33 Lighting and consumer durables 995.38 911.75 Total Segment assets 2,807.57 2,562.08 Unallocated 47.83 54.12 2,855.40 2,616.20 Segment liabilities Steel Pipe and Strips 345.79 310.73 Lighting and consumer durables 275.71 205.56 Total Segment Liabilities 621.50 516.29 Unallocated 1,186.58 1,148.99 1,808.08 1,665.28 Notes : I Unallocated assets are comprises of MAT and income tax refundable. II Unallocated liabilities are comprises borrowings, provision for income tax, deferred tax etc. III. Other segment information (` in crore) Particulars As at As at 31st March, 2018 31st March, 2017 Cost incurred on acquisition Steel Pipe and Strips 56.59 86.52 of tangible assets Lighting and consumer durables 10.03 15.27 66.62 101.79 Depreciation and Steel Pipe and Strips 66.55 63.05 amortisation expense Lighting and consumer durables 20.76 20.56 87.31 83.61 IV. geographical information The Company operates in seven geographical areas: India (country of domicile), Asia, Africa, North-America, Central America, South-America and Europe. The Company’s revenue from operations from customers by location of operations and information about its non- current assets by location of assets are detailed below:

128 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

a. Revenue from external customers (` in crore) For the year ended For the year ended 31st March, 2018 31st March, 2017 India 4,307.54 3,445.51 Outside India 704.22 735.52 Total 5,011.76 4,181.03 b. Non-current assets (` in crore) Particulars As at As at 31st March, 2018 31st March, 2017 Non-Current Assets Within India 1,109.89 1,127.89 Outside India Nil Nil 1,109.89 1,127.89 v. Information about major customers Company has no single customer from whom the revenue is not less than 10 % of the revenue from external customers of the company 50 Events occurring after the Balance Sheet date

(` in crore) Particulars As at As at 31st March, 2018 31st March, 2017 Dividend proposed for Equity shareholders @ ` 2.00 per share 10.88 6.57 (previous year ` 1.50 per share) There are no other significant subsequent event items which require an adjustment

51 FINANCIAL INSTRUMENTS Fair value of financial assets and liabilities The carrying value and fair value of financial instruments by categories as of 31st March, 2018 were as follows: (` in crore) S. Particulars Amortised cost Fair value * Total carrying value Total fair value No. Assets: i Cash and cash equivalents 24.12 - 24.12 24.12 Bank Balances other than (ii) - 0.40 0.40 ii above 0.40 iii Trade receivables 712.59 - 712.59 712.59 iv Other financial assets 55.59 - 55.59 55.59 Total 792.70 - 792.70 792.70 Liabilities: i Non Current Borrowings 380.34 - 380.34 380.34 ii Current Borrowings 717.05 - 717.05 717.05 iii Trade payables 408.35 - 408.35 408.35 iv Other financial liabilities 99.38 5.34 104.72 104.72 Total 1,605.12 5.34 1,610.46 1,610.46 * Amount carried at forward contract rate / prevailing exchange rate at year end classified in fair value hierarchy Level 2 The carrying value and fair value of financial instruments by categories as of 31st March, 2017 were as follows: (` in crore) S . Particulars Amortised cost Fair value * Total carrying value Total fair value No. Assets: i Cash and cash equivalents 20.36 - 20.36 20.36 ii Bank Balances other than (ii) above 1.94 - 1.94 1.94 iii Trade receivables 580.11 51.70 631.81 631.81 iv Other financial assets 56.52 56.52 56.52 Total 658.93 51.70 710.63 710.63

ANNUAL REPORT 2017-18 129 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

(` in crore) S. Particulars Amortised cost Fair value * Total carrying value Total fair value No. Liabilities: i Non Current Borrowings 102.88 337.26 440.14 440.14 ii Current Borrowings 512.16 118.60 630.76 630.76 iii Trade payables 157.74 183.27 341.01 341.01 iv Other financial liabilities 73.24 - 73.24 73.24 Total 846.02 639.13 1,485.15 1,485.15 * Amount carried at forward contract rate / prevailing exchange rate at year end classified in fair value hierarchy Level 2 The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable either directly or indirectly Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

52 Financial risk management Objectives and Policies The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s principal financial liabilities (other than derivatives), comprise borrowings, trade and other payables. Likewise the financial assets consist of trade, other receivables, cash, short term deposits etc. . The financial liabilities and assets are arising due to borrowings and from its operations which are subject to financial risk. Financial Market risk Financial market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of financial instrument. The value of a financial instrument may change as a result of change in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency trade receivables, trade payables and borrowings. The Company manages financial market risk through treasury department, which evaluates and apply the risk mitigation strategy as approved by Audit Committee. The means of cash resources, implementing hedging strategies for foreign currency exposure, borrowing strategies, and ensuring compliance with market risks limits and policies are also monitored. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. In order to optimize the Company’s position with regards to interest and to manage the interest rate risk, finance department performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate with reset clause and floating rate financial instruments in its total portfolio. The borrowings of the company are on floating interest rate along with periodical interest reset. The Company is not exposed to significant interest rate risk at the respective reporting dates. With all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings are taken. (` in crore) Interest rate sensitivity Effect on profit before tax Decrease by Increase by 50 basis point 50 basis point For the year ended 31st March, 2018 5.49 (5.49) For the year ended 31st March, 2017 5.35 (5.35) Foreign currency risk The Company transacts business primarily in Indian Rupee, USD and Pound sterling (GBP). The Company has taken foreign currency loans and has trade payables as well as receivables in foreign currency. The Company evaluates foreign currency exposure time to time and follows established risk management policies by taking foreign exchange forward contracts to hedge exposure of foreign currency risk and also some of the foreign currency exposure remains naturally hedged. The net exposure of foreign currency receivable in USD stand ` 11.50 crore as on 31st March 2018 (previous year ` 44.70 crore) after considering forwarding contracts taken by the company.

130 ANNUAL REPORT 2017-18 CORPORATE OVERVIEW 01- 24 STATUTORY REPORTS 25 - 94 FINANCIAL SECTION 95 - 132

NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

The particulars of forward contract taken are given below Type No.of Contract US$ Equivalent (` In Crore) (Million) As at 31st March 2018 Sell 12 9.44 62.58 Buy 123 79.54 517.64 As at 31st March 2017 Sell 5 1.08 7.00 Buy 107 98.09 636.00 Credit risk The Company is exposed to credit risk from its operating activities (primarily trade receivables). Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk, the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forward-looking information. Cash and Cash Equivalents, Deposit in Banks and other Financial instruments The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than those required for its day to day operations. For other financial assets the company monitors ratings, credit spreads and financial strengths of its counterparties. Based on its ongoing assessment of the counter party’s risk, the company adjust its exposures to various counter parties. Based on the assessment there is no impairment in other financial assets. Commodity price risk The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company enter into contracts for procurement of material, and sale of it’s products as per the prevailing practice in the industry. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. Liquidity risk Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s finance department manage the liquidity by mix of borrowing to meet fund requirements. The current committed borrowing limit are sufficient to meet its requirement. The Company monitor rolling forecast for its liquidity requirements. Maturity profile of financial liabilities The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date. (` in crore) As at 31st March 2018 Less than Above Total 1 year 1 year Non Current Borrowings 25.96 354.38 380.34 Current Borrowings 717.05 - 717.05 Trade payables 408.35 - 408.35 Other financial liabilities 104.72 - 104.72 Total 1,256.08 354.38 1,610.46 As at 31st March 2017 Non Current Borrowings 39.53 400.61 440.14 Current Borrowings 630.76 - 630.76 Trade payables 341.01 - 341.01 Other financial liabilities 73.24 - 73.24 Total 1,084.54 400.61 1,485.15

ANNUAL REPORT 2017-18 131 NOTES TO FINANCIAL STATEMENTS for the year ended 31st MARCH, 2018 (Contd.)

53 Capital risk management For the purposes of the Company’s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company’s Capital Management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants. In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. Therehave been no breaches of the financial covenants of any interest bearing loans and borrowing for reported periods.

Further the company monitors capital using gearing ratio, which is total debt divided by total capital plus debt. as under :- (` in crore) Particulars As at As at 31st March 2018 31st March 2017 Debts 1,097.39 1,070.90 Equity 1,047.32 950.92 Capital and net debt 2,144.71 2,021.82 Gearing ratio in % 51.17% 52.97% Debts consist of long term and short term borrowings (refer note 17 and 21)

54 Expenditure on R&D Company has made Capital and Revenue expenditure from the financial year 2011-12 to 2017-18 in respect of itsU nit : Surya Technology & Innovation Centre (R&D LAB) D-63, Hosiery Complex, Phase – II, Noida (U.P)as tabulated below : Capital & Revenue Expenditure Break-Up Financial Year Wise (` in crore) Financial Year Capital Expenditure "Revenue Total Expenditure Expenditure incurred during the year 2011 – 2012 11.18 0.04 11.22 2012 – 2013 0.02 1.47 1.49 2013 – 2014 0.05 1.70 1.75 2014 – 2015 0.30 2.39 2.69 2015 – 2016 0.14 2.99 3.13 2016 – 2017 0.23 3.14 3.37 2017 – 2018 0.05 3.36 3.41 Further, the capital and revenue expenditure as stated above of respective financial years of the above mentioned R & D Centre is reflected and forms part of the Fixed Assets (in case of capital expenditure) and Employee benefit expenses, Administrative expenses and other revenue expenses (in case of revenue expenditure) were grouped under relevant Notes / Schedules of the financial statements / Annual Accounts of respective financial years of the company. Development cost on intangible assets are Nil (previous year-Nil) during the year. 55 The Company has perpetual system of balance confirmation and reconciliation of Trade receivables and Trade payables, however at year end some of the balances remain subject to confirmation and reconciliation 56 The previous year figures have been reclassified to confirm to Ind AS presentation required for this note (also refer note no.45)

132 ANNUAL REPORT 2017-18

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SURYA ROSHNI LIMITED Padma Tower - 1, Rajendra Place, 2nd Floor New Delhi - 110008 (INDIA) CIN: L31501HR1973PLC007543 Tel.: +91-11-47108000, 25810093 Fax: +01-11-25789560 E-mail: [email protected] Website: www.surya.co.in