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Himatsingka Seide Ltd.

BSE: 514043 Sector: Industrials
NSE: HIMATSEIDE ISIN Code: INE049A01027
BSE 00:00 | 17 Jan 144.85 6.70
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NSE 00:00 | 17 Jan 144.85 6.55
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OPEN 138.85
PREVIOUS CLOSE 138.15
VOLUME 78459
52-Week high 241.00
52-Week low 118.65
P/E 5.99
Mkt Cap.(Rs cr) 1,426
Buy Price 144.85
Buy Qty 1917.00
Sell Price 144.85
Sell Qty 81.00
OPEN 138.85
CLOSE 138.15
VOLUME 78459
52-Week high 241.00
52-Week low 118.65
P/E 5.99
Mkt Cap.(Rs cr) 1,426
Buy Price 144.85
Buy Qty 1917.00
Sell Price 144.85
Sell Qty 81.00

Himatsingka Seide Ltd. (HIMATSEIDE) - Director Report

Company director report

Your Directors are pleased to present the Thirty Fourth Annual Report on the operationsand performance of your Company together with Audited Financial Statements and Auditors'Report for the year ended March 312019.

1. FINANCIAL HIGHLIGHTS

The financial highlights for the year under review are given below:

(Rs. Lacs)
Particulars

Standalone

Consolidated

2018-19 2017-18 Change % 2018-19 2017-18 Change %
Revenue from Operations 174526 161665 7.96% 261765 224906 16.39%
Other Income 6776 3670 84.63% 3661 1763 107.66%
Total Revenue 181302 165335 9.66% 265426 226669 17.10%
EBITDA 54649 41628 31.28% 57993 46623 24.39%
EBITDA Margin (%) 31.31% 25.75% 21.61% 22.15% 20.73% 6.87%
EBIT 46105 35993 28.09% 47116 39428 19.50%
Profit before exceptional items 34969 29157 19.93% 30804 29048 6.05%
Profit before tax 34969 28882 21.08% 30804 29048 6.05%
Tax Expense 11365 7384 53.91% 11120 8884 25.17%
Profit after tax 23604 21498 9.80% 19684 20164 -2.38%

2. BUSINESS HIGHLIGHTS

In the Fiscal year 2018-19 the Consolidated Total Revenue increased by 17.10% to Rs.265426 lacs and the Consolidated EBITDA grew by 24.39% to Rs. 57993 lacs. During theyear the Company made significant progress on various initiatives across its businesses.Some key highlights of FY19 are as follows:

• Completed the construction of our greenfield integrated Terry Towel Project.Trial run have commenced and Commercial production is expected to begin by end of H1 2020.

• Entered into licensing agreement with the Iconix Brand Group Inc. for the RoyalVelvet brand. The exclusive licensing rights to the brand is for the territory of NorthAmerica.

• Revenue from brands stood at Rs. 225500 lacs compared to ^161000 lacs in FY18.

• Stabilised the operating performance of our new spinning facility.

• Completed the integration of our newly acquired licensed Brand portfolioincluding iconic Tommy Hilfiger Home brand.

3. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of Business carried out by the Company during theperiod under review.

4. SHARE CAPITAL

The Company during the period under review has not issued and/or allotted any shareswith/ without differential voting rights as per Section 43 of Companies Act 2013 readwith Rule 4(4) of the Companies (Share Capital and Debentures) Rules 2014.

The Authorized Share Capital of the Company is Rs. 670000000 divided into134000000 Equity Shares of Rs. 5 /- each and the Paid-up Capital of the Company is Rs.492285800/- divided into 98457160 Equity Shares of Rs. 5 each.

5. DIVIDEND

Your Directors in their meeting held on May 28 2019 have recommended a dividend of100 % (Rs. 5.00 per equity share including ^1.50 per equity share as one time specialdividend) for the financial year ended March 312019 subject to the approval by theshareholders at the ensuing Annual General Meeting.

6. TRANSFER TO RESERVES

During the year the Company has not transferred any amount to reserves.

7. SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES AND CHANGES THEREON

As on March 312019 the Company had the following subsidiaries Joint Ventures andassociate companies:

Subsidiaries

• Himatsingka Wovens Private Limited

• Himatsingka Holdings NA Inc

• Himatsingka America Inc.

• Himatsingka Europe Limited

Joint Venture

• Twill & Oxford LLC.

Associate Company

• Himatsingka Energy Private Limited

During the year under review Himatsingka Singapore Pte Ltd a step down wholly ownedsubsidiary of the Company through Himatsingka Wovens Private Limited has been struck offunder the laws of Singapore w.e.f March 08 2019 and Giuseppe Bellora LLC has been mergedwith Himatsingka America Inc. w.e.f March 26 2019.

Re-organisation of European Operations

With a view to consolidate retail distribution business and to create a seamlessinternational distribution arm the Company undertook an initiative to reorganise itsEuropean operations. As a result of the reorganization the Company entered into a SharePurchase agreement with Himatsingka Holdings NA Inc. USA a wholly owned subsidiary andsold 100% stake in Himatsingka Europe Limited a wholly owned subsidiary of the Company.

Further Giuseppe Bellora Srl Italy a 100% a wholly owned subsidiary ofHimatsingkaEurope Limited after shifting its seat of incorporation from Italy to USA was mergedwith Himatsingka America Inc USA. Himatsingka America Inc USA is a wholly ownedsubsidiary of Himatsingka Holdings NA Inc. USA.

Consolidated Financial Statements

As required under section 129(3) the Company has prepared consolidated financialstatements which form a part of the Annual Report.

The consolidated financial statements presented by the Company include the financialresults of its subsidiary companies. Further a statement containing the salient featuresof the financial statements of its subsidiaries in form AOC-1 is annexed to this report asAnnexure-1.

Pursuant to section 136 of the Companies Act 2013 the audited financial statements ofthe subsidiaries are available on the Company's website athttp://www.himatsingka.com/financial-information.html. The Balance Sheet StatementofProfit and Loss and other documents of the subsidiary companies are kept for inspectionat the Registered Office of the Company and the Company will make available separateaudited and unaudited financial statement as the case may be of the subsidiary companiesand the related information to any member of the Company who may be interested inobtaining it.

8. EXTRACT OF ANNUAL RETURN

The extract of Annual Return has been disclosed on the Company websitehttps://himatsingka.com/anual-report.html.

9. PUBLIC DEPOSITS

The Company has not accepted any deposits from the public during the year within themeaning of the Companies Act 2013.

10. BOARD OF DIRECTORS AND COMMITTEES Composition of Board and changes thereto

The Board of the Company comprises of 7 (Seven) Directors of which 4 (Four) areIndependent Directors 2 (Two) are Promoter Executive Directors and 1 (One) isNon-Promoter Executive Director. During the year Mr. Pradeep Bhargava (DIN: 00525234) wasappointed as an Independent Director of the Company.

Board Meetings

The Board met 8 (Eight) times during the year under review and the intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013 andSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 ("ListingRegulations"). The details of the meetings and attendance thereof are provided in theCorporate Governance Report forming part of the Annual Report.

The details pertaining to the composition of Board Committees are included in theCorporate Governance Report which is part of the Annual Report.

The details of the Composition of CSR Committee the CSR Policy and the CSR spendinghave been elaborated in the Annexure-2 to this report.

Re-appointment of Director retiring by rotation

In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. D. K. Himatsingka Executive Chairman (DIN: 00139516)retires by rotation and being eligible offers himself for re-appointment. Hisre-appointment will be taken up at the ensuing Annual General Meeting for seeking approvalof shareholders.

Appointment of Independent Director

In accordance with the provisions of the Companies Act 2013 the Board appointed Mr.Pradeep Bhargava (DIN: 00525234) as an Additional Director (Independent) on the Board ofthe Company effective September 22 2018 for a period of five years. Pursuant to therelevant provisions of the Companies Act 2013 the same has to be approved by theshareholders in the ensuing Annual General Meeting

Declaration by Independent Directors

The Company has received from each of its Independent Directors the declaration asstipulated under Section 149(7) of the Companies Act 2013 and Regulation 25(8) of ListingRegulations confirming that the Director meets the criteria of independence as laid downunder section 149(6) of the Companies Act 2013 and Regulation 16(b) of ListingRegulations.

Directors' Responsibility Statement

As required by the provisions of Section 134(3)(c) of the Companies Act 2013 we theDirectors of Himatsingka Seide Limited confirm the following:

a) in the preparation of the Annual Financial Statements for the year ended March312019 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;

b) the Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year 2018-19and of the profit of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) the Annual Financial Statements have been prepared on a Going Concern basis;

e) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively; and

f) the Directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial Controls are adequate and were operatingeffectively.

Key Managerial Personnel

There was no change in the Key Managerial Personnel during the year under review.

Board Performance Evaluation

The Company has during the year conducted an evaluation of the Board as a whole itsCommittees and the individual Directors including the Independent Directors as stipulatedin the Nomination and Remuneration Policy adopted by the Company. The evaluation wascarried out through different evaluation forms which covered among others the evaluationof the composition of the Board/ committee its effectiveness activities governance andwith respect to the Chairman and the individual Directors their participation integrityindependence knowledge impact and influence on the Board.

The Independent Directors of the Company also convened a separate meeting and evaluatedthe performance of the Board the NonIndependent Directors and the Chairman. Details ofthe meetings are provided in Corporate Governance Report which forms part of the AnnualReport.

11. AUDITORS AND AUDITORS' REPORTS

a) Statutory Audit

The report of Statutory Auditors M/s. BSR and Co. LLP Chartered Accountants forFY-2018-19 (appearing elsewhere in the Annual Report) does not have any qualificationreservation or adverse remarks.

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereafter M/s. BSR and Co. LLP Chartered Accountants were appointed asstatutory auditors of the Company and are to hold office until the conclusion of the 37thAnnual General Meeting of the Company.

b) Secretarial Audit

The Company has appointed Mr. Vivek Bhat Company Secretary in Practice Bengaluru toconduct the secretarial audit as required under Section 204 of the Companies Act 2013.The Secretarial Audit Report given by Mr. Vivek Bhat is appended as Annexure-3 to theBoard's Report.

In the above mentioned report Mr. Vivek Bhat has made the following comment:

"The Company could not spend the eligible profit on Corporate SocialResponsibility measures. However the Company has constituted the CSR Committee and itsconstitution was as per the regulation".

Boards Response to Comments of Secretarial Auditor

During the previous year the Company had registered "HimatsingkaFoundation" a charitable trust to undertake various CSR initiatives including ruraldevelopment education and other community development programs. In line with the plansthe Company during the current financial year has contributed Rs. 2 crores to thefoundation and the funds have been earmarked for spending for the CSR initiatives.

The Company is in a definitive phase of drawing up concrete plans for firming up theCSR spending during the next financial year.

As per the provisions the total amount to be spent by the Company on CSR activitiesfor the FY 2018-19 was Rs. 5.01 Crores. During the year an amount of ^ 2.18 Crores wasspent by the Company.

c) Secretarial Compliance Report

In view of the amended Listing Regulations the Company is required submit an AnnualSecretarial Compliance Report made by a practicing Company Secretary to the stockexchanges within 60 days from the end of the financial year. The Company has appointed Mr.Vivek Bhat for the purpose of issuance of Annual Secretarial Compliance Report underRegulation 24A of Listing Regulations which is appended as Annexure-4 to the Board'sReport.

d) Cost Auditors

Since the Company's export revenue in foreign exchange for the financial year 2018-19was greater than 75% (seventy five percent) of the total revenue of the Company theCompany falls within the exemption specified in Clause 4(3) of The Companies (Cost Recordsand Audit) Rules 2014. In view of this there is no requirement to furnish cost audit ofcost records of the Company for its units at Hassan and Doddaballapur.

e) Internal Financial Controls

The Board reviews the effectiveness of controls documented as part of IFC frameworkand take necessary corrective actions where weaknesses are identified as a result of suchreviews. This review covers entity level controls process level controls fraud riskcontrols and Information Technology environment.

Based on this evaluation no significant events had come to notice during the year thathave materially affected or are reasonably likely to materially affect our IFC. Themanagement has also come to a conclusion that the IFC and other financial reporting waseffective during the year and is adequate considering the business operations of theCompany.

The Statutory Auditors of the Company has audited the IFC over Financial Reporting andtheir Audit Report is annexed as Annexure-A to the Independent Auditors' Report underStandalone Financial Statements and Consolidated Financial Statements.

f) Fraud Reporting

There have been no instances of fraud reported by Auditors under section 143(12) of theCompanies Act 2013 and Rules framed thereunder either to the Company or to the CentralGovernment.

12. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES MADE

The particulars of loans made guarantees given investments made and securitiesprovided as per the provisions of Section186 of the Companies Act 2013 and the relevantrules made thereunder are given in the notes to the standalone financial statements.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into by the Company with its related parties are at arm'slength and in the ordinary course of business. However the list of material related partytransactions as per the Company's policy on related party transactions as required underrule 8(2) of Companies (Account) Rules 2014 is annexed to the Board's Report asAnnexure-5.

14. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS/ COURTS Scheme of Arrangementbetween the Company and Himatsingka Wovens Private Limited:

Through the Scheme of Arrangement demerger of the retail business division ofHimatsingka Wovens Private Limited wholly owned subsidiary with the Company wasenvisaged. Pursuant to applications submitted to the Office of Regional Director (SouthEast Region) Ministry of Corporate Affairs Hyderabad the same has been approved and thedivision has been duly vested with the Company and the same have been reflected in thebooks of accounts.

15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE

A statement containing the necessary information on Conservation of energy Technologyabsorption and Foreign exchange earnings and outgo stipulated under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 isannexed to this report as Annexure-6.

16. RISK MANAGEMENT

The Company has developed and implemented a comprehensive Risk Management Policy andframework to counter and mitigate the various risks encountered by the Company. In termsof the provisions of Section 134 of the Companies Act 2013 a Risk Management Report isset out elsewhere in this Annual Report.

17. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Details of Directors' remuneration

(Rs. Lacs)
Director DIN Sitting Fees Salaries and perquisites Commission Total Ratio to Median Remunatation of Employees Percentage Increase over previous year
Mr. D.K. Himatsingka 00139516 - 194.42 650.00 844.42 462.34:1 1.89
Mr. Shrikant Himatsingka 00122103 - 191.34 650.00 841.34 460.66:1 2.02
Mr. Vasudevan V 07521742 - 156.94 57.04 213.98 117.16:1 7.61
Dr. K.R.S Murthy 00167877 3.20 - 18.00 21.20 11.61:1 47.22
Mr. Rajiv Khaitan 00071487 3.10 - 20.00 23.10 12.65:1 62.68
Mrs. Sangeeta Kulkarni 01690333 2.40 - 18.00 20.20 11.06:1 43.26
Mr. Pradeep Bhargava * 00525234 0.60 - 9.00 9.60 5.26:1 N.A

* w.e.f. September 22 2018

In the remuneration mentioned above the sitting fees salaries and perquisites formthe fixed component of the total remuneration and the commission is a variable componentlinked to the performance of the Company.

b) Details of the Remuneration of the Key Managerial Personnel (other than Directorsmentioned above)

KMP Designation Total Remuneration (Rs. Lacs) %age Increase Over FY18
Mr. K.P. Rangaraj President - Finance and Group CFO 151.10 5.9%
Mr. Ashok Sharma SVP-Finance & CFO (Strategic Finance) & Company Secretary 101.13 13.77%

c) The percentage increase in median remuneration of the employees is 18.38%

d) The number of permanent employees in the rolls of the Company is 5468

e) The average increase in the salaries of managerial personnel during the year was3.85% and the average decrease in the salaries of employees other than managerialpersonnel was 6.60%. The increase in the remuneration of managerial personnel is incorrelation to their individual performance and to the performance of the Company.

f) The key parameters for the variable component of remuneration availed by thedirectors are the amount of responsibilities taken performance of the business specificcontribution made by the director to the overall performance of the Company.

g) During the year there were no employees whose remuneration was higher than that ofthe highest paid director.

h) It is hereby affirmed that the remuneration paid during the year is as per theRemuneration Policy of the Company.

i) Information as per rule 5(2) of the Companies (Appointment and Remuneration) Rules2014:

The Statement containing names of top ten employees in terms of remuneration drawn andparticulars of employees as required under Section 197(12) of the Act read with Rule 5(2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isprovided in a separate Annexure forming part of this report. Further the report and theaccounts are being sent to the members excluding the aforesaid annexure in terms ofSection 136 of the Act the said annexure is open for inspection at the Registered Officeof the Company. Any shareholder interested in obtaining a copy of the same may write tothe Company Secretary.

18. INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaidor unclaimed dividends are required to be transferred by the Company to the IEPFestablished by the Government of India after the completion of seven years. Furtheraccording to the Rules the shares on which dividend has not been paid or claimed by theshareholders for seven consecutive years or more shall also be transferred to the demataccount of the IEPF Authority. The Company has not transferred any unclaimed and unpaiddividend or shares to IEPF during the year under review as the Company had not declaredany dividend in the financial year 2010-2011.

19. INSURANCE

The Company's assets are prone to risks/ peril and are adequately insured.

In line with the Listing Regulations the Company has undertaken Directors &Officers Liability Insurance and the coverage extends to all Directors and officers of theCompany and its subsidiaries. The policy is in subsistence.

20. POLICIES

a) Vigil Mechanism

As a conscious and vigilant organization Himatsingka Seide Limited believes in theconduct of the affairs of its constituents in a fair and transparent manner by adoptingthe highest standards of professionalism honesty integrity and ethical behavior.

In its endeavor to provide its employee a secure and a fearless working environmentthe Company has established a "Whistle Blower Policy" as required under theCompanies Act 2013 and Listing Regulations and the same is also available in theCompany's website at http://www.himatsingka.com/corporate-governance.html.

Mr. Ashok Sharma Company Secretary has been designated as the Chief ComplianceOfficer under the policy and the employees can report any instance of unethical behavioractual or suspected fraud or violation of the Company's code of conduct or ethics policyto him.

In exceptional cases where the Whistle Blower is not satisfied with the outcome of theinvestigation and the decision she/he can make a direct appeal to the Chairman of theAudit Committee and the contact details of the Chairman is also given in the Policy.

During the year no complaints were received under this mechanism.

b) Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

The Company is committed to provide a healthy environment to all its employees. Henceit does not tolerate any discrimination and/or harassment in any form. The Company has inplace a Prevention of Sexual Harassment Policy and an Internal Complaints Committee as perthe requirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

The Company has not received any complaint during the year.

c) Nomination and Remuneration Policy

The Company has formed a Nomination and Remuneration Committee as required underSection 178 of the Companies Act 2013 and Regulation 19 of Listing Regulations. TheCommittee has formulated a policy as required under Section 178(3) of Companies Act 2013and Regulation 19 read with Schedule II to the Listing Regulations stipulating thecriteria for determining qualifications positive attributes and independence of adirector and also the criteria relating to the remuneration for the directors keymanagerial personnel and other employees and their performance evaluation. Pursuant to theproviso of sub-section (4) of Section 178 of the Companies Act 2013 the aforesaid policyis available on the Company's website athttp://www.himatsingka.com/corporate-governance.html.

d) Dividend Distribution Policy

The Board of Directors of the Company have adopted a Dividend Distribution Policy asrequired under Regulation 43A of Listing Regulations. The policy is attached asAnnexure-7.

e) Policy for determining material subsidiaries

As required under Regulation 24 of Listing Regulations the Company has adopted apolicy for determining material subsidiaries. The policy has been disclosed in theCompany's website and can be found athttp://www.himatsingka.com/corporate-governance.html.

f) Policy on Related Party Transactions:

The Company has also formulated a policy on dealing with Related Party Transactions asrequired under Regulation 23 of Listing Regulations. The same is available in theCompany's website at http://www.himatsingka.com/corporate-governance.html.

21. CORPORATE GOVERNANCE

We comply with the corporate governance code as prescribed by the stock exchanges andSEBI. You will find a detailed report on corporate governance as part of this AnnualReport. The Corporate Governance Report along with the Auditors Certificate on compliancewith the mandatory recommendations on corporate governance is available elsewhere in theAnnual Report as a separate section.

22. MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

In terms of Regulation 34 of Listing Regulations the Management Discussion andAnalysis Report (MDA) forms part of the Annual Report. The details of operatingperformance state of affairs and key changes in the operating environment have been speltout in the MDA.

23. BUSINESS RESPONSIBILITY REPORTING

As per the market capitalization based on March 312019 the Company is outside thepurview of top 500 companies. However as a matter of good governance and for maintainingcontinuity a Business Responsibility Report is attached and forms part of this AnnualReport.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation of the continuous effortsmade by all employees in ensuring excellent all-round operational performance. We alsowish to thank our Customers Vendors Shareholders and Bankers for their continuedsupport. Your Directors would like to express their grateful appreciation to the CentralGovernment and Government of Karnataka for their continued co-operation and assistance.

For and on behalf of the Board
Place: Bengaluru D.K.Himatsingka
Date: August 9 2019 (Executive Chairman)

ANNEXURES TO THE BOARD'S REPORT

Annexure - 1 Statement regarding subsidiary companies as of March 312019

Pursuant to Section 129 of the Companies Act 2013 read with Rule 5 of Companies(Accounts) Rules 2014-Form AOC-1 Part "A" Subsidiaries

Sl. No. Name of the subsidiary T&O HWPL HHNA HIMA HEL
1 Capital 56.46 1750.00 57709.07 51896.46 8806.70
2 Reserves (604.14) 365.84 (2294.99) (3109.86) (460.23)
3 Total Assets 180.08 2412.63 100509.34 139210.62 8401.69
4 Total Liabilities a 727.75 297.79 45095.26 90424.03 55.22
5 Investments* - - 650.22 19.75 -
6 Turnover 474.32 176.32 25180.12 216680.60 810.20
7 Profit / (Loss) Before Tax (115.21) 166.19 (2891.59) 810.44 (475.27)
8 Provision for Taxation - 1.81 (796.97) 669.74 7.42
9 Profit / (Loss) After Tax (115.21) 164.38 (2094.62) 140.69 (482.69)
10 Proposed Dividend - - - - -
11 Closing exchange rate AED/18.821 Rs./1.00 USD/69.1375 USD/69.1375 GBP/90.328
12 Average exchange rate AED/19.18 Rs./1.00 USD/70.42 USD/70.42 GBP/91.74

T&O = Twill & Oxford LLC HWPL = Himatsingka Wovens Private Limited HHNA =Himatsingka Holdings NA Inc. HIMA = Himatsingka America Inc. HEL = Himatsingka EuropeLtd.

A excluding Capital and reserves and including current liabilities andprovisions.

*Other than in subsidiaries

All subsidiaries above have their reporting period as March 312019.

Part "B" Associate

Sl. No. Name of the Associate

Shares of Associate/held by the Company on the Year ended

Profit/Loss for the Year

Latest Audited Balance sheet No. Amount of Investment in associates Extent of Holding % Description of how there is significant influence Reason why the associate is not consolidated Net worth attributable to Shareholding as per latest audited balance sheet Considered in consolidation Not considered in consolidation
Himatsingka Energy Pvt. Ltd. 31.03.2019 2600 0.26 26% N.A N.A (7.58) (0.533) (1.517)

For and on behalf of the Board of Directors

D. K. Himatsingka Shrikant Himatsingka K. P. Rangaraj Ashok Sharma
(Executive Chairman) (Managing Director & CEO) (Chief Financial Officer) (Company Secretary)
Place: Bengaluru
Date: August 9 2019

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES ANNEXURE - 2

1. Brief Outline: Corporate Social Responsibility (CSR) is central to the operatingphilosophy of the Company as it is the Company's constant endeavour to ensure that itsbusinesses uphold the highest standards of governance and compliance. The Company proposesto engage in one or more CSR activities falling under the list prescribed under theschedule VII of the Companies Act 2013. The Company has adopted a CSR policy and the sameis available at its website at www.himatsingka.com.

2. The Composition of the CSR Committee is as below:

Sl. No. Name of the Director Position
1 Dr. K.R.S. Murthy Chairman
2 Mr. D.K. Himatsingka Member
3 Mr. Shrikant Himatsingka Member
4 Mrs. Sangeeta Kulkarni Member

3. Average net profits of the Company for the last three financial years is Rs. 25063lakhs.

4. The prescribed CSR expenditure for the year is Rs. 501.24 lakhs taken at 2% of theabovementioned average net profits.

5. Details of CSR spent during the financial year 2018 -19

Total amount to be spent for the financial year Rs. 501.24 lacs
Amount unspent at the end of the year Rs. 282.67 lacs

Manner in which the amount was spent for the financial year as detailed below:

(1) (2) (3) (4) (5) (6) (7) (8)
Sl. No. CSR Project or activity identified Sectors in which the project is covered Location of projects or programs Amount outlay (budget) project or program wise ( * ) Amount spent on the projects or programs ( * ) Cumulative expenditure upto the reporting period ( * ) Manner of spending
1 Training to Promote Olympic Sports Clause vii of Schedule VII Bangalore India 300000 300000 300000 Direct
2 Donation for Literature Festivals Clause v of Schedule VII Bangalore India 250000 250000 250000 Direct
3 Providing lunch to school students Clause i of Schedule VII Karnataka India 8400 8400 8400 Direct
4 Imparting skills training Clause ii of Schedule VII Karnataka India 11441 11441 11441 Direct
5 Transfer to Foundation for undertaking CSR Rule 4(2) of CSR Rules Anywhere in India 20000000 20000000 20000000 Transfer to Himatsingka Foundation
6 CSR Administrative Expenses Rule 4 of CSR Rules Karnataka India 1287996 1287996 1287996 Direct
Total 21857837 21857837 21857837

6. The remaining amount has not been spent. The same has been explained in the Boards'Report.

7. The implementation and monitoring of CSR Activities are in compliance with the CSRobjectives and policy of the Company.

Dr. K.R.S. Murthy Shrikant Himatsingka
(Chairman CSR Committee) (Managing Director & CEO)