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GTL Infrastructure Ltd.

BSE: 532775 Sector: Telecom
NSE: GTLINFRA ISIN Code: INE221H01019
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OPEN 1.90
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VOLUME 58666278
52-Week high 4.90
52-Week low 0.65
P/E
Mkt Cap.(Rs cr) 2,625
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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GTL Infrastructure Ltd. (GTLINFRA) - Director Report

Company director report

To

The Members

Your Directors are pleased to present their Seventeenth Annual Reporttogether with the Audited Financial Statements for the year ended March 312020.

1. STATE OF COMPANY'S AFFAIRS Financial Highlights:

(Rs. in Lakhs)

Particulars FY2019-20 FY2018-19
Revenue from Operations 141694 150021
Other Income 2029 1197
Total Revenue 143723 151218
Profit / (Loss) before Depreciation & Amortization Expenses Finance Costs Exceptional Item & Tax 28258 19459
Less: Depreciation & Amortization Expenses 63444 62355
Profit / (Loss) before Finance Costs Exceptional Item & Tax (35186) (42896)
Less: Finance Costs 66222 53343
Profit / (Loss) before Exceptional Items & Tax (101408) (96239)
Less: Exceptional Items 84946 57701
Profit / (Loss) before Tax (186354) (153940)
Less: Tax Expenses - -
Profit / (Loss) (186354) (153940)
Other Comprehensive Income (26) (60)
Total Comprehensive Income (186380) (154000)

Figures regrouped / reclassified wherever necessary to make themcomparable.

Results of Operations

Key Highlights of the Company for the financial year ended March312020 are as under:

• Total Revenue from Operations for current financial year standsat Rs.141694 Lakhs as against Rs.150021 Lakhs for theprevious financial year.

• Normalized EBITDA for current financial year stands at Rs.19825Lakhs as against Rs.24811 Lakhs for the previous financial year.

Telecom Sector Developments and its impact

The Company has from time to time informed about various developmentsin Indian Telecom Sector which were beyond the control of the Company and the management.These forced consolidation and exits in the telecom sector has resulted in the number oftelecom operators reducing from 18 to 4.

All of these factors have had a material adverse effect on the Companyand its future business prospects. The table below clearly highlights the impact oftenancy loss the Company faced over the last decade despite having long term bindingcontracts with the telecom operators:

Sr. No. Events of Tenancy Loss No. of Tenancy Period Comments
1. Cancellation of 2G licenses 4319 February 2012 Supreme Court Judgement on cancellation of 122 2G telecom licenses
2. Aircel default of ROFR commitment 15200 May 2014 Legal and financial issues
3. Slower 3G/BWA growth 4750

Since April 2013

Industry slowdown following the Supreme Court verdict
4. Exits during business course with various reasons 2966
5. Operator scale back due to auction 3500
6. Aircel filing of bankruptcy 23727 February 2018 Unsustainable business due to competition
7. RCom shutdown of wireless business 1386 August & September 2017
8. Tata exit from wireless business 2888 Since December 2017
9. Merger of Vodafone and Idea 2718 Since September 2018 Forced industry consolidation due to competition
10. Consolidation of Telenor with Airtel 1395 During FY 2018-19
Aggregate tenancy loss from 2012 to 2020 62849

The telecom sector has yet again witnessed another devastating blowwhen the Hon'ble Supreme Court on October 24 2019 in its landmark judgement upheldDepartment of Telecommunications contention and definition of Gross Revenue / AdjustedGross Revenue (AGR) as per the License Agreements which was agreed accepted and signed byTelecom Service Providers (TSP) the licensees and further ordered TSPs to make paymentof all outstanding dues of License Fees and spectrum usage surcharge (including interestand penalties) to DoT within 3 months. Further vide its order dated February 14 2020the Supreme Court denied any relief to the telecom operators and demanded payment of AGRdues of ' 147000 Crore immediately. This in turn has also resulted inpossible existential situation for telecom operators and therefore for tower companieslike us.

Additionally the business of the Company also impacted due to variousnatural calamities such as Jammu & Kashmir floods Chennai floods Karnataka floodsCyclone Fani in Odisha Vayu Cyclone in Gujarat Bulbul Cyclone in Odisha etc. Shutdown inJammu & Kashmir also impacted the business of the Company.

Shut down and exit of telecom operators or downsizing of theiroperations has already resulted in the Company being saddled with the operational cost ofnon-occupied towers and the unsustainable debt level of the Company as a result of revisedcash flow.

Despite above the Company continues its efforts towards recovering itscontractual claims of approx ' 1520650 Lakhs from its customers who haveeither closed down their business or have got merged with other Telecom operators or evenexited their tenancies much ahead of their respective contract terms.

The Company has envisaged restructuring of its debt to sustainablelevel as well as curtailing its operating expenditures such as diesel cost EB costO&M Cost security cost wages vendor cost statutory payments such as taxes whichenables the Company to continue to maintain network uptime for its occupied towers.

However recent unilateral appropriation of ' 32000Lakhs by Edelweiss Asset Reconstruction Company Limited ("EARC") consortiumwithout implementing Resolution Plan and without taking in to account statutory andoperational liabilities including contingent liabilities and not giving consent forcompleting insourcing of OME business from GTL Limited has frustrated efforts of themanagement to revive and stabilize the Company. However the management continues toengage with lenders consortium for completing restructuring process.

Going Concern

Considering the proposed realignment of debt in accordance with cashflow and various resource optimization initiatives undertaken by the Company which canlead to stabilization and revival the Company continues to prepare the financialstatements on a going concern basis.

2. RECENT DEVELOPMENTS AT MACRO AND MICRO ECONOMIC LEVEL

The details in respect of recent developments at macro and microeconomic level are covered under Management Discussion and Analysis (MD&A) Reportwhich forms part of the Annual Report.

3. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year underreview as stipulated under Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (the "Listing Regulations") ispresented in a separate section forming part of the Annual Report.

4. DEBT RESTRUCTURING

The details in respect of debt resolution plan are provided in separatesection under the heading "Debt Resolution Plan" under MD&A Report whichforms part of the Annual Report.

5. TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve forthe financial year ended March 312020.

6. DIVIDEND

Since your Company has posted losses for the current financial yearyour Directors express their inability to recommend any dividend on the paid up EquityShare Capital of the Company for the financial year ended March 312020.

7. SHARE CAPITAL

a. The movement of Equity shares due to allotment of shares is asunder:

Particulars No. of Equity Shares
Equity Shares as on April 12019 12319097031
Add: Allotments of Equity Shares to Bond Holders upon conversion of Bonds during year -
Equity Shares as on March 312020 12319097031
Add: Allotments of Equity Shares to Bond Holders upon conversion of Bonds post March 31 2020 87865456
Equity Shares as on September 4 2020 12406962487

The Company has only one class of equity shares and it has not issuedequity shares with differential rights or sweat equity shares.

Further to information furnished in the Directors' Report for financialyear 2018-19 94843348 equity shares allotted to Trust are yet to be listed due topending receipt of requisite details from Bondholders.

b. Foreign Currency Convertible Bonds (FCCBs)

The details of outstanding Foreign Currency Convertible Bonds are asfollows:

Particulars No. of Series B1 Bonds (of US$ 1000 each) No. of Series B2 Bonds (of US$ 1000 each) No. of Series B3 Bonds (of US$ 1000 each) Total No. of Bonds (of US$ 1000 each) No. of Equity Shares upon conversion
FCCBs allotted 80745 86417 30078 197240 -
Converted till date 29397 13489 17267 60153 391828212
Balance as September 4 2020 51348 72928 12811 137087 -

If bonds are converted into equity shares of the Company the number ofequity shares would go up by 892965525.

8. FIXED DEPOSITS

During the year under review the Company has not accepted any publicdeposits under chapter V of the Companies Act 2013 (the "Act") from public orfrom its members.

9. MATERIAL CHANGES AND COMMITMENTS

Save and except as discussed in this Annual Report no material changeshave occurred and no commitments were given by the Company thereby affecting its financialposition between the end of the financial year to which these financial statements relateand the date of this report.

10. PROMOTER GROUP

The Company was promoted by GTL Limited ("GTL"). The membersmay note that the Promoter Group comprises of Global Holding Corporation Private Limitedand such other persons as defined under the Listing Regulations. Post invocation of pledgeof GTL's holding in the Company by secured lenders of GTL the Promoter Group shareholdingin the Company stands at 3.39% as on September 4 2020. The Company is taking advice toassess if they continue to be promoter.

11. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act2013 the Board of Directors to the best of their knowledge and ability in respect offinancial year ended March 312020 confirm that:

i. in the preparation of the annual accounts the applicable accountingstandards had been followed and there were no material departures;

ii. they had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss of the Company for that period;

iii. they had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. they had prepared the annual accounts on a going concern basis;

v. they had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

vi. they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

The term of Mr. Milind K. Naik (DIN: 00276884) as Whole-time Directorand Key Managerial Personnel of the Company expired on July 20 2020 post which hedecided not to offer himself for re-appointment. Further Mr. Manoj G. Tirodkar (DIN:00298407) retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment subject to receipt of requisite consent from certainlenders who had converted debt into equity shares under Corporate Debt Restructuring andStrategic Debt Restructuring Scheme and lenders of GTL Limited who have invoked pledgeover shareholding of GTL Limited in the Company.

During the year Mr. Vijay Vij (DIN: 02245470) who was associated withthe Company as Independent Director of the Company ceased to be director with effect fromMay 9 2019. The Board places on record its deep appreciation and respect for the valuableadvice and guidance received from Mr. Vij and Mr. Naik during their respective tenure as aDirectors of the Company.

Pursuant to the provisions of Section 203 of the Act currently Mr.Bhupendra J. Kiny - Chief Financial Officer and Mr. Nitesh A. Mhatre - Company Secretaryare the Key Managerial Personnel of the Company.

13. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company have furnished adeclaration to the effect that they meet the criteria of independence as provided inSection 149(6) of the Act.

14. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met Seven (7) times during the financial yearthe details of which are given in Corporate Governance Report that forms part of thisReport.

15. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its ownperformance Board Committees and individual directors pursuant to the provisions of theAct and Corporate Governance requirements as prescribed by the Listing Regulations.

The performance of the Board and its Committees was evaluated by theBoard after seeking inputs from all the Board / Committee members on the basis of thecriteria such as composition of the Board / Committee and structure effectiveness ofBoard / Committee processes providing of information and functioning etc. The Board andthe Nomination and Remuneration Committee also reviewed the performance of the individualdirectors on the basis of the criteria such as attendance in Board / Committee meetingscontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed etc.

In a separate meeting of Independent Directors performance ofnon-independent directors performance of Board as a whole and performance of the Chairmanwere evaluated taking into account the views of executive directors and non-executivedirectors.

16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHERDETAILS

The Company has put in place appropriate policy on Directors'Appointment and remuneration and other matters as required by Section 178(3) of the Actwhich is provided in the Policy Dossier that has been uploaded on the Company's website www.gtlinfra.com. Further salient features of the Company's Policy on Directors'remuneration have been disclosed in the Corporate Governance Report which forms part ofthis Report.

17. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The information required under Section 197(12) of the Act read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended is given below:

i. The ratio of the remuneration of each director to the medianremuneration of the employees of the Company for the financial year and the percentageincrease in remuneration of each director chief financial officer company secretary ormanager if any in the financial year:

Executive Directors Ratio to median remuneration % increase in remuneration in the financial year
Mr. Milind K. Naik* 31.11 Nil
Non-executive Directors**

Ratio to median remuneration

% increase in remuneration in the financial year

(sitting fees only)
Mr. Manoj G. Tirodkar N.A. N.A.
Mr. N. Balasubramanian N.A. N.A.
Dr. Anand P. Patkar N.A. N.A.
Mr. Charudatta K. Naik N.A. N.A.
Mr. Vinod B. Agarwala N.A. N.A.
Mr. Vijay M. Vij*** N.A. N.A.
Mrs. Sunali Chaudhry N.A. N.A.
Chief Financial Officer
Mr. Bhupendra J. Kiny - 5%#
Company Secretary
Mr. Nitesh A. Mhatre - 7.5%*

* The term of Mr. Milind K. Naik as Whole-time Director expired on July20 2020 post which he decided not to offer himself for re-appointment.

** Since Non-executive Directors received no remuneration exceptsitting fee for attending Board / Committee meetings the required

details are not applicable.

*** Relinquished the post of Independent Director w.e.f. May 9 2019

# Retention / Loyalty bonus paid during the year not considered.

ii. The percentage increase / (decrease) in the median remuneration ofemployees in the financial year: (9.13%)

iii. The number of permanent employees on the rolls of the Company :641

iv. Average percentage increase already made in the salaries ofemployees other than the managerial personnel in last financial year and its comparisonwith the percentage increase in the managerial remuneration and justification thereof andpoint out if there are any exceptional circumstances for increase in the managerialremuneration:

The average annual increase in salaries of employees is 7.7%. Duringthe year upon receipt of requisite clarification from Ministry of Corporate Affairsapproval from lenders and subsequent ratification by shareholders the Company has paidremuneration to Mr. Naik as per his appointment terms.

v. Affirmation that the remuneration is as per the remuneration policyof the Company:

The Company affirms that the remuneration is as per the remunerationpolicy of the Company.

18. INTERNAL FINANCIAL CONTROL SYSTEMS

The details in respect of adequacy of internal financial controls withreference to the Financial Statements are included in the MD&A Report which formspart of the Annual Report.

19. AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are includedin the Corporate Governance Report which forms part of this report.

20. AUDITORS AND AUDITORS' REPORT

M/s Pathak H.D. & Associates LLP (FRN: 107783W / W100593)Chartered Accountants Mumbai were appointed as an Auditor of the Company at the fifteenth(15th) AGM to hold office from conclusion of the fifteenth (15th) AGM till conclusion oftwentieth (20th) AGM to be held in calendar year 2023.

For the FY 2019-20 the Auditor of the Company have issued modifiedopinion w.r.t. the Company's inability to quantify the amount of property tax on itstelecom towers to be ultimately borne by it due to petition pending before the appropriateCourts non-receipt of property tax demands in respect of majority of telecom towers andCompany's contractual rights to recover such property tax from its customers. In thisregard the Company has given appropriate explanation in its Note No. 40 of Notes to theFinancial Statements. Further as regards the Auditors opinion regarding materialuncertainty related to Going Concern and emphasis of matters the Company has furnishedrequired details / explanations in Note nos. 58 and 20.1 of Notes to the FinancialStatements.

21. COST AUDIT

In terms of Section 148 (1) of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended since the Company's business (InfrastructureProvider Category - I) is not included in the list of industries to which these rules areapplicable the Company is not required to maintain cost records.

22. SECRETARIAL AUDITORS' REPORT

The Secretarial Audit Report is given in Annexure A (Form No. MR-3)forming part of this report.

As regards to the observation in previous year's Secretarial AuditReport w.r.t inadvertent non-filing of Form MGT-14 for filing of Board Resolution withRegistrar of Companies it is to be noted that based on the order of the Ministry ofCorporate Affairs (MCA) for condoning the delay in filing the Board resolution has beenfiled in Form MGT-14 with Registrar of Companies and accordingly the said observation hasgot closed.

Further as regards the observation in current year on non-filing ofreport under Regulation 74(5) of SEBI (Depositories and Participants) Regulations 2018for the quarter ended March 312019 due to non-receipt of Certificate from RTA it is tobe noted that the necessary action is being taken for filing the same after receipt of thesaid certificate from RTA.

Further in terms of Regulation 24A of the Listing Regulations aSecretarial Compliance Audit Report given by Mr. Chetan A. Joshi Practicing CompanySecretary is annexed as Annexure B to this Report.

23. COMPLIANCE WITH SECRETARIAL STANDARD

The Company has complied with applicable secretarial standards asprescribed by the Institute of Company Secretary of India.

24. RISKS

A separate section on risks and their management is provided in theMD&A Report forming part of this Report. The Audit Committee monitors the riskmanagement plan and ensures its effectiveness. It is important for members and investorsto be aware of the risks that are inherent in the Company's businesses. The major risksfaced by the Company have been outlined in this section to allow members and prospectiveinvestors to take an independent view. The Company strongly urges Shareowners/ Investorsto read and analyze these risks before investing in the Company.

25. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

During the year under review the Company has not provided anycorporate guarantees. The particulars of loans and investments have been disclosed in theNote nos. 6 & 14 and 4 & 10 of Notes to the Financial Statements respectively.

26. PARTICULARS OF RELATED PARTY TRANSACTION

For the reasons stated below the statement pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 giving theparticulars of contracts or arrangements with related parties referred to in section 188(1) of the Act is not enclosed as a part of this Report:

a. The Company has not entered into any contracts or arrangements ortransactions not at arm's length basis; and

b. Pursuant to GTL ceasing to be a related party of the Company w.e.f.March 28 2019 post invocation of pledge of shares of the Company held by GTL by CDRLenders of GTL the material contracts or arrangement or transactions at arm's lengthbasis entered with GTL ceased to be a related party transactions..

27. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have Subsidiary or Joint Venture Company.Accordingly a statement pursuant to provisions of Section 129(3) of the Act in Form No.AOC-1 is not required to be furnished.

28. CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) Policyof the Company and other details are furnished in Annexure 'C' of this Report in theformat prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014.For CSR initiatives undertaken by Global Foundation please refer to MD&A Report underthe caption "Corporate Social Responsibility". The CSR Policy is available onthe Company's website www.gtlinfra.com.

29. ANNUAL RETURN AS ON MARCH 312020

As per requirements of Section 92(3) of the Act and the Companies(Management and Administration) Rules 2014 the extracts of Annual Return as on March312020 is annexed as Annexure 'D' (Form MGT-9) to this report. The Company has placed acopy of the same on its website at www.gtlinfra.com.

30. CORPORATE GOVERNANCE AND VIGIL MECHANISM

The Company has complied with the Regulations 17 to 27 and clauses (b)to (i) of sub-regulation (2) of the Regulation 46 of the Listing Regulations. A separateReport on Corporate Governance along with the Certificate of the Auditor M/s Pathak H.D.& Associates LLP Chartered Accountants Mumbai confirming compliance of conditions ofCorporate Governance as required under Regulation 34(3) of the Listing Regulations formspart of this Report.

The Company has formulated and published a Whistle Blower Policydetails of which are furnished in the Corporate Governance section thereby establishing avigil mechanism for directors and permanent employees for reporting genuine concerns ifany.

31. BUSINESS RESPONSIBILITY REPORT

Regulation 34(2) of the Listing Regulations as amended interalia provides that the Annual Report of the top 1000 listed entities based onmarket capitalization (calculated as on 31st March of every Financial Year)shall include a Business Responsibility Report (BR Report). Your Company is in the top1000 listed entities as on March 312020. The Company has presented its BR Report for theFinancial Year 2019-20 which is part of this Annual Report as Annexure 'E'.

32. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

a. Conservation of Energy:

During the year the Company continued its efforts towards conservationof energy by way of reduction of diesel consumption at telecom tower sites through severalinitiatives of energy efficiency and fuel savings as under:

i) the steps taken or impact on conservation of energy:

a. Close monitoring of Energy cycle of EB availability DieselGenerator run hours and Battery Bank run hrs site wise to operate sites at optimumenergy consumption without impacting operational availability of network

b. Holistic approach to site up gradation with an eye on energyconservation when finalizing the site design of various network elements for capexinvestment eliminating sub optimal operation and thus sweating capex to correctoperational capacity with minimal increase in energy consumption.

c. Adopting non conventional approach to design Integrated AMP panelswith Voltage sensing feature as against time based feature thus reducing unnecessary fuelburn or avoid battery bank discharge under normal conditions.

d. Proactive re sizing of sanctioned load of EB connections thusreducing wastage of Energy and expenses thereof

e. Conversion of Non Eb sites with EB connections thus not onlyimproving the network availability but also drastically reducing additional fuel burn onthe site.

f. Operating high EB availability sites with optimal fuel stock thusreducing wastage as well as making sites Fuel Free. A total of 2886 sites are operating asDG free sites.

g. Sustained efforts to reduce potential pilferage of fuel andelectricity at site through a strong governance mechanism in the field.

ii) the steps taken by the Company for utilizing alternate source ofenergy:

Augmentation of Battery capacities implementing new solutions likeDeep Discharge Batteries and active consideration of other alternate sources to dependenceon Fuel like Li On technology are some of the steps Company continues to evaluate forongoing basis.

iii) the capital investment on energy conservation equipment:

Not Applicable

b. Technology Absorption:

1. Efforts made towards technology absorption
2. The benefits derived like product improvement cost : reduction product development or import substitution
3. In case of imported technology (imported during last 3 : years reckoned from the beginning of the financial year) following information may be furnished. Tile Company lias not absoibed adopted and innovated any new technology. Hence the details relating to technology absorption are not furnished
a. the details of technology imported
b. the year of import
c. whether the technology been fully absorbed?
d. if not fully absorbed the areas where absorption has : not taken place reasons thereof
4. the expenditure incurred on Research and Development No expenditures were incurred during the year.

c. Foreign Exchange Earnings and Outgo:

During the year under review the inflow and outgo of foreign exchangein actual terms were ? Nil and ? 38.07 Lakhs respectively.

33. HUMAN RESOURCE

The associate base of the Company as on March 31 2020 stood at 681.For full details / disclosures refer to the Human Resources section in the MDA Reportwhich forms part of the Annual Report.

34. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read withsub-rules 2 &3 of Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended names and other particulars of the top ten employeesin terms of remuneration drawn and the name of every employee who is in receipt of suchremuneration as stipulated in said Rules are required to be set out in a statement to thisReport. This Report is being sent to the Members excluding the aforesaid statement. Interms of Section 136 of the Act the said statement is open for inspection at theRegistered Office of the Company. Any Member interested in obtaining a copy of the samemay write to the Company Secretary at the Registered Office of the Company. None of theemployees listed in the said statement is related to any Director of the Company.

35. ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation andacknowledge with gratitude the support and cooperation extended by the customersemployees vendors bankers financial institutions investors media and both the Centraland State Governments and their Agencies particularly during the NCOVID 19 and lookforward to their continued support.

On behalf of the Board of Directors
Mumbai Manoj G. Tirodkar
September 4 2020 Chairman

.