MANAGEMENT DISCUSSION AND ANALYSIS

INDIAN ECONOMY

Indian economy has showed signs of revival during FY14-15. The new government revised the base year for calculation of economic growth from FY04-05 to FY11-12 and also introduced the concept of Gross Value Added at the aggregate and sector levels apart from revising industry groups. With the revised set, it is estimated that Indian economy grew by more than 8% in FY15-16. As per IMF estimates, Indian economy grew at 5.8% during 2014 against 5% during 2013. It expects the economic growth to exceed 7% in next couple of years. It is widely expected that Indian economy would grow faster if the brsent government carries on with its growth agenda and reforms.

INDUSTRY OVERVIEW

POWER GENERATION

The power sector in India is mainly governed by the Ministry of Power. There are three major pillars of power sector  these are Generation, Transmission, and Distribution. As far as generation is concerned it is mainly divided into three  sectors these are Central Sector, State Sector, and Private Sector.

As on 31st March, 2015 the installed capacity of Renewable Energy in India was 35776.96 MW in which Wind Power comprised of 65.52 % (i.e. 23444 MW) of the total renewable energy.

As of 31 March 2015 the installed capacity of wind power in India mainly sbrad across Tamil Nadu (7,253 MW), Gujarat (3,093 MW), Maharashtra (2,976 MW), Karnataka (2,113 MW), Rajasthan (2,355 MW), Madhya Pradesh (386 MW), Andhra Pradesh (916 MW), Kerala (35.1 MW),etc.

The MNRE has set a target for Wind Power generation capacity by the year 2022 at 60,000 MW

The development of wind power in India began in the 1990s, and has progressed steadily in the last few years. The short gestation periods for installing wind turbines, and the increasing reliability and performance of wind energy machines have made wind power a favoured choice for capacity addition in India.

METERS

India is currently witnessing a revolution in the field of electricity metering, where electronic meters are fast replacing the  conventional meters. Energy metering is essential at all places where electricity is consumed i.e. at homes, offices, shops, farms, workshops, factories etc. The most important customer group for these meters is the State Electricity

Board (SEBs) and private electricity supplying companies.

Electronic meters have a very good potential in the country. This is primarily due to drivers such as rural electrification, power sector reforms, the formation of privately owned distribution companies with a mandate to improve revenues and efficiency in system operations, and to improve customer satisfaction.

India has large electricity customer base with about 120 million consumers - approximately 90 million domestic, 13 million agricultural, 12 million commercial, 3 million others ( public lighting, water works etc.)

With the Central Electricity Authority mandating the use of static meters, the Indian energy meter market has shifted largely to static meters from earlier electronic mechanical meters. With this shift, India is expected to install 130 million smart /static meters by the year 2021.

ENERGYAUDIT

The primary energy demand in India has grown from about 450 million tons of oil equivalent (toe) in 2000 to about 770 million toe in 2012. This is expected to increase to about 1250 (estimated by International Energy Agency) to 1500 (estimated in the Integrated Energy Policy Report) million toe in 2030. This increase is driven by a number of factors, the most important of which are increasing incomes and economic growth which lead to greater demand for energy services  such as lighting, cooking, space cooling, mobility, industrial production, office automation, etc. This growth is also  reflective of the current very low level of energy supply in India: the average annual energy supply in India in 2011 was only 0.6 toe per capital; whereas the global average was 1.88 toe per capital.

The gap of power supply & demand may be reduced by demand side power management i.e. Energy Conservation and Energy Efficiency improvement. The cost of Energy is increasingly substantial and energy efficiency is the only solution.

OPPORTUNITIES AND THREATS

The opportunities that are available to the company are foraying into development of new products, expanding it's area of  operation pan India and achieving higher growth in the energy business that helps in the reduction of energy consumption. The threats faced by the company would emanate from competition from local players and regulatory changes.

COMPANY OVERVIEW

The Company is in the business of Power Generation through renewable resources wind and solar, manufacture of  energy meters and energy audit business. During the last three years of it's commercial production, the company has been able to create a niche for itself in the fields of meters and energy audit.

Power Generation

During the year under review, the wind mills of your company continued to be plagued by thefts and maintenance issues and the performance remained almost the same as that of the brvious year. However, the current year has witnessed better security arrangements aided by the State Government and the maintenance issues have also reduced drastically. The current year would show better results depending upon favourable the wind fluctuations.

Your company has also set up a number of small solar plants during the year under review. The business of setting up of Solar plants would show increased activity in the coming years.

Meters

The Meter Division continues to show an upward trend. During the year under review, the revenues generated from the sale of meters etc increased to Rs.1048.94 lacs. The backward integration programme for the manufacture of plastic components and electronic components required for the manufacture of meters and othe devices will go to reduce the  cost of manufacture of the meters, increasing the profitability and reducing the dependence on others for the timely  supply of quality components.

Energy Audit

With the experience of undertaking energy audits of sectors ranging from Steel, Hospitality, FMCG, Textile and

Automotive, coupled with the thrust of the Government of India mandating energy audit in some sectors, the contribution to the bottom line is bound to be significant in the time to come.

RISK AND CONCERNS

Opportunity brings with itself competition. The company faces different levels of competition in each business segment. The company has however established a strong brand goodwill and is in the process of establishing a strong foot hold in  the meter and energy audit businesses. The company can counter this risk with technically advanced products and  customer- centric approach coupled with prudent financial management and better control over costs.

INTERNAL CONTROL SYSTEM

The company is equipped with proper and adequate system of internal controls commensurate with its size to ensure that-: All the assets are safeguarded and protected against loss from unauthorized use or disposition, All the transactions are authorized, recorded and reported correctly, There is proper compliance of legal and statuary requirements, there is accuracy and timeliness of financial reporting, there is effective and efficient use of resources of the Company, etc.

The internal control system is designed to ensure that all financial and other records are reliable for brparing financial statements and for maintaining accountability of assets. The audit committee of the board of directors of the company periodically reviews the functionality and the adequacy of the internal control system.

HUMAN RESOURCES

Our employees are our most important assets. We believe that the quality and level of service that our employees deliver are among the highest in the industry.  As at March 31, 2015, the company has employed more than 200 employees.

Your Company undertook intensive training programmes through a combination of face-to-face and virtual learning approaches.

The Company has a favorable work atmosphere and there is constant effort to improve the same, thus encouraging  innovation and productivity. The Company has the policy that attracts high-skilled employees from the Industry and also retains them by realizing their dreams of growth and work satisfaction.

CAUTIONARY STATEMENT

The statements made in this Report describing the Company's objectives, projections, estimates, expectations are the forward-looking statements within the meaning of applicable securities laws and regulations and are subject to certain risks and uncertainties like regulatory changes, local, political and economic developments and other factors.