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Indian Hume Pipe Company Ltd.

BSE: 504741 Sector: Infrastructure
NSE: INDIANHUME ISIN Code: INE323C01030
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OPEN 210.00
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VOLUME 715
52-Week high 334.40
52-Week low 193.05
P/E 13.41
Mkt Cap.(Rs cr) 1,032
Buy Price 212.10
Buy Qty 1.00
Sell Price 212.90
Sell Qty 16.00
OPEN 210.00
CLOSE 214.25
VOLUME 715
52-Week high 334.40
52-Week low 193.05
P/E 13.41
Mkt Cap.(Rs cr) 1,032
Buy Price 212.10
Buy Qty 1.00
Sell Price 212.90
Sell Qty 16.00

Indian Hume Pipe Company Ltd. (INDIANHUME) - Director Report

Company director report

TO

THE MEMBERS

Your Directors are pleased to present to you the Annual Report on the businessoperations of the Company together with the Audited Financial Statements of Accounts forthe Financial Year ended 31st March 2019.

FINANCIAL RESULTS:

(As per Ind AS)

(' in Lakhs)

Year Ended 31-03-2019 Year Ended 31-03-2018
Revenue from Operations 164552.77 155138.25
Profit Before Finance Cost Depreciation & Amortisation & Tax 19757.64 15410.80
Less: Finance Costs 5357.55 4288.46
Depreciation & Amortisation 1173.34 1084.13
Profit Before Tax 13226.75 10038.21
Less: Provision for Taxation 4595.51 3431.94
Net Profit After Tax 8631.24 6606.27
Add/(Less): Other Comprehensive Income 5.42 91.91
Total Comprehensive Income carried out to Other Equity 8636.66 6698.18

PERFORMANCE REVIEW:

Your Company's operations of its various projects under execution continued to beprofitable with continued efforts to reduce costs and improve yield as also bettering theproductivity levels.

During the year 2018-19 under review the Revenue from Operations was र 164552.77Lakhs as compared to र 155138.25 Lakhs of the previous year. The profit before tax forthe year at र 13226.75 Lakhs as compared to र 10038.21 Lakhs of the previous year. Theprofit after tax for the year at र 8631.24 Lakhs as compared to र 6606.27 Lakhs of theprevious year.

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this Report.

DIVIDEND:

Your Directors are pleased to recommend a Dividend of र 3.60 per equity share of facevalue of र 2/- each (180%) for the financial year ended 31st March 2019 onpaid-up share capital of the Company as against र 3.40 per equity share of face value of र2/- each for the previous financial year ended 31st March 2018. The Dividendsubject to the approval of the Members at the 93rd Annual General Meetingconvened on 26th July 2019 will be paid on or after 31st July 2019to those Members whose names appears in the Register of Members as on the date of BookClosure i.e. Tuesday 16th July 2019. The Dividend of र 3.60 per equity shareof र 2/- each together with Dividend Distribution Tax will amount to र 2102.60 Lakhs.

TRANSFER TO RESERVES:

The Company do not propose to transfer any amount to General Reserve.

FINANCE:

During the year under review liquidity position of your Company was maintainedsatisfactorily and optimum utilization of financial resources was achieved.

The Company had a cordial relationship with its Bankers and trade creditors and hasbeen prompt in meeting obligations towards them.

The Company continued to enjoy good credit rating from the Credit Rating Agency andBanks during the year under review.

INCOME TAX ASSESSMENT:

The income tax assessment of your company has been completed till assessment year2016-17. The appeals filed by your Company against the assessment orders for variousfinancial years are pending with the Income Tax Appellate Authorities and Bombay HighCourt. The amount of disallowance involved in various appeals is र 22196.46 Lakhs. Out ofthis amount the major disputed amount of र 21813.44 Lakhs pertains to claim of section80IA regarding eligibility of deduction/exemption of profit earned from execution ofinfrastructure project. The balance amount of र 383.02 Lakhs pertains to other items ofdisallowance such as Section 14A disallowance land valuation of Wadala property. Howevernecessary provision for tax of र 7542.91 Lakhs has been already made in accounts exceptfor the disallowance made u/s 14A as the same disallowance has been deleted in theprevious years by the First and Second Appellate Authority.

The appeal filed by the Income Tax Department is pending in the Bombay High Court forA.Y 2003-04. The issue involved in A.Y 2003-04 is regarding claim of deduction u/s 80IAallowed by the Income Tax Appellate Tribunal amounting to र 1068.27 Lakhs. However dueto subsequent retrospective amendment made to Section 80IA by Finance Act 2009 as anabundant

caution provision for the basic tax liability of र 392.59 Lakhs on the claim of र1068.27 Lakhs has been made in the accounts.

Another appeals for AY 2008-09 & AY 2010-11 filed by I.T Department were pendingin the High Court of Bombay. The issue involved for these years is with regards to thedisallowance of expenses u/s 14A of the I.T Act 1961. The Income Tax Appellate Tribunalhad deleted the disallowance made u/s 14A of the I.T Act 1961. The total tax amountinvolved in these appeals is below the threshold limit as prescribed by the CBDT videits circular no. 21/2015 dated 10/12/2015 for the maintainability of appeals in HighCourt. Therefore the appeals of the I.T. Department for these years has been dismissed bythe Hon'ble High Court of Bombay.

FACTORIES:

The total number of factories of the Company as at the end of the year stands at 20.The Company is setting up a new pipe manufacturing factory at Walwa Maharashtra.

DEVELOPMENT OF LAND:

The development of Company's land at Hadapsar (Pune) Wadala (Mumbai) and Badarpur (NewDelhi) are at initial stages of obtaining development related approvals from the variousAuthorities. During the year the Company has signed MOU with Kalpataru Gardens PrivateLimited a Kalpataru Group Company for development of Company's land at Vadgaon Pune.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

The Company has implemented procedures and adopted practices in conformity with thecode of Corporate Governance under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations). The Company has implemented Code of Conduct forall its Executive Directors and Senior Management Personnel Non-Executive Non-IndependentDirectors and Independent Directors who have affirmed compliance thereto. The said Codesof Conduct have been posted on the website of the Company. The Management Discussion andAnalysis Report and Corporate Governance Report appearing elsewhere in this Annual Reportforms part of the Board's Report. A certificate from the Statutory Auditors of the Companycertifying the compliance of conditions of Corporate Governance is also annexed hereto.

PUBLIC DEPOSITS:

The Company had terminated its Fixed Deposits Schemes w.e.f. 28th July 2009and stopped accepting / renewing deposits since then. Accordingly the Company has repaidall those deposits together with interest thereon as and when they had matured on theirrespective due dates on fixed deposit holders claiming the same.

An aggregate amount of र 0.65 Lakhs representing 3 fixed deposits that had matured thelast one being matured in February 2012 and all these 3 fixed deposits which had remainedunclaimed had been transferred to IEPF during 2018-19 on the due dates. There are nounclaimed deposits pending with the Company as at 31st March 2019.

CREDIT RATINGS

During the year CARE Ratings Limited has re-affirmed its rating for Long term bankfacilities (Term Loan) as CARE A+;Stable Long term Bank facilities (Fund based) as CAREA+ ‘Stable Short term Bank Facilities (Non-fund based) as CARE A1+ and Longterms/Short terms Bank Facilities (Nonfund based) as CARE A+;Stable/CARE A+ as Assigned.

The details of Credit Ratings assigned to the Company are uploaded on website of theCompany at https://www.indianhumepipe.com

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Financial Statements for the year ended 31stMarch 2019.

CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility (CSR) Policy of the Company and the CSRprograms/activities undertaken during the financial year 2018-19 are set out in"Annexure A" and forms part of the Board's Report. For other details of the CSRCommittee please refer to Corporate Governance Report which forms part of this report.The policy is available on the website of the Company www.indianhumepipe.com

In accordance with Section 135 of the Companies Act 2013 and the Rules thereunder theCompany has incurred CSR expenditure of र 214 Lakhs for the financial year 2018-19 by wayof corpus donation to Ratanchand Hirachand Foundation the Implementing Agency which hadcarried out CSR activities on behalf of Company as set out in Annexure A.

DONATIONS:

In addition to the above CSR expenditure the Company has given following donations:

र 10 Lakhs to Swachh Bharat Kosh set-up by the Central Government for the promotion ofsanitation and र 6.80 Lakhs to Rotary Foundation Charitable Organisation.

RISK MANAGEMENT:

The Company has constituted a Risk Management Committee. The details of Committee andits terms of reference are set out in the Corporate Governance Report forming part of theBoard's Report. The Company has a Risk Management Policy to identify evaluate monitorand mitigate risks. The risk framework defines the risk management approach across theenterprise at various levels including documentation and reporting.

INTERNAL CONTROL SYSTEMS AND ITS ADEOUACY:

The Company has an Internal Audit Department headed by Chief Internal Auditor. TheInternal Audit Department monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function the Management undertake corrective action in their respective areas andthereby strengthen the controls.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS:

The Company has in place adequate internal financial controls with reference to theFinancial Statements to provide reasonable assurances with regard to recording andproviding financial information complying with the applicable accounting standards.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has Vigil Mechanism administered by the Audit Committee. The VigilMechanism policy is posted on the Company's website.

CHANGE IN THE NATURE OF BUSINESS IF ANY:

There is no change in the nature of business during the year under review.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS/ TRIBUNALS IF ANY:

There are no significant material orders passed by the Regulators/Courts/ Tribunalswhich would impact the going concern status of your Company and its future operations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 149 of the Act all the Independent Directors ofthe Company have submitted a declaration that each of them meets the criteria ofindependence as per provisions of the Companies Act 2013 rules thereunder SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) and therehas been no change in the circumstances which may affect their status as IndependentDirectors during the year. In the opinion of the Board of Directors all the IndependentDirectors fulfil the criteria of independence as provided under the Act rules madethereunder and the Listing Regulations and that they are independent of the management.

Pursuant to the provisions of the Companies Act 2013 the Members at the 88thAnnual General Meeting of the Company held on 25th July 2014 had appointed Mr.Rajendra M. Gandhi Mr. Rameshwar D. Sarda and Mr. Vijay Kumar Jatia as an IndependentNon-Executive Directors of the Company to hold office for five consecutive years from 25thJuly 2014 to 24th July 2019. Mr. Rajendra M. Gandhi Mr. Rameshwar D. Sardaand Mr. Vijay Kumar Jatia are eligible for re-appointment as an Independent Non-ExecutiveDirectors for a second term.

Pursuant to the provisions of the Act based on the recommendation of Nomination andRemuneration Committee the Board recommends for the approval of the Members through aSpecial Resolution at the ensuing 93rd Annual General Meeting of the Companythe re-appointment of Mr. Rajendra M. Gandhi Mr. Rameshwar D. Sarda and Mr. Vijay KumarJatia as an Independent Non-Executive Directors for a second term from 25thJuly 2019 till the date of holding 98th Annual General Meeting of the Companyor 24th July 2024 whichever is earlier in respect of Mr. Rajendra M. Gandhiand Mr. Vijay Kumar Jatia and from 25th July 2019 till the date of holding of97th Annual General Meeting of the Company in the year 2023 in respect of Mr.Rameshwar D. Sarda. The Board feels their continuation as an Independent Directors of theCompany will be in the interest of the Company.

The Board of Directors has re-appointed Mr. Mayur R. Doshi as Executive Director of theCompany from 1st July 2019 to 30th June 2022.

Mr. Mayur R. Doshi Executive Director of the Company retire by rotation at theensuring 93rd Annual General Meeting and offers himself for re-appointment. Hisbrief resume and other details as required under the Act and the Listing Regulations forhis re-appointment as Director are provided in the Notes to the Notice of 93rdAnnual General Meeting of the Company.

Details of the proposal for appointment/re-appointment are mentioned in the Notes ofthe Notice of AGM and Explanatory Statement u/s 102 of the Companies Act 2013 of theNotice of the 93rd Annual General Meeting of the Company.

During the year Mr. Ajit Gulabchand Independent Director of the Company had resignedwith effect from 30th September 2018. The Board place on record theirappreciation of services rendered by Mr. Gulabchand during his tenure.

There is no change in Key Managerial Personnel (KMP).

Remuneration and other details of the KMP of the Company for the financial year ended31st March 2019 are provided in the Extract of the Annual Return forming partof this report.

BOARD COMMITTEES:

The Board of Directors of your Company had constituted various Committees and approvedtheir terms of reference/role in compliance with the provisions of the Companies Act 2013and Listing Regulations viz. Audit Committee Nomination and Remuneration CommitteeStakeholders Relationship Committee CSR Committee and Risk Management Committee.

The composition of the Audit Committee as given in the Corporate Governance Report isin accordance with Section 177 of the Companies Act 2013 Rules thereunder and ListingRegulations. The members of the Audit Committee are financial literate and have experiencein financial management. All the recommendations made by the Audit Committee have beenaccepted by the Board of Directors.

PERFORMANCE EVALUATION:

Pursuant to the provisions of Section 134(3)(p) 149(8) Schedule IV of the CompaniesAct 2013 SEBI (LODR) Regulations 2015 and the circular dated 5th January2017 issued by SEBI with respect to Guidance Note on Board Evaluation annual performanceevaluation of the Board as well as of the Committees of the Board and individual Directorshave been carried out by the Board.

The performance evaluation of the Independent Directors was carried out by the entireBoard and the performance evaluation of the Chairman Non-Independent Directors and Boardwas carried out by the Independent Directors.

INDEPENDENT DIRECTORS’ MEETING:

In terms of Section 149 Schedule IV of the Companies Act 2013 and SEBI (LODR)Regulations 2015 the Independent Directors met on 25th March 2019 without theattendance of Non-Independent Directors and Members of Management of the Company andreviewed the:

i) performance of Non-Independent Directors and the Board of Directors of the Companyas a whole;

ii) performance of the Chairman of the Company taking into account the views ofExecutive and Non-Executive Directors;

iii) assessed the quality quantity and timeliness of flow of information between theManagement and the Board that is necessary for the Board to effectively and reasonablyperform their duties.

All the Independent Directors except Mr. P. D. Kelkar were present at the meeting.

FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS:

In compliance with the requirements of SEBI (LODR) Regulations 2015 the Company hasput in place a familiarization program for Independent Directors to familiarize them withtheir role rights and responsibilities as Directors the operations of the Companybusiness overview etc.

The details of the familiarization program is explained in the Corporate GovernanceReport and the same is also available on the website of the Company.

REMUNERATION POLICY:

The Board on the recommendation of the Nomination & Remuneration Committee hadformulated and adopted the Remuneration policy for selection and appointment of DirectorsSenior Management and their remuneration. The Remuneration Policy is annexed as"Annexure B".

NUMBER OF MEETINGS:

Annual programme of Board and Committee meetings is circulated in advance to theDirectors.

During the year five Board Meetings were held i.e. on 23rd May 2018 2ndJune 2018 8th August 2018 2nd November 2018 and 6thFebruary 2019 and six Audit Committee meetings were held i.e. on 25th April2018 23rd May 2018 2nd June 2018 8th August 2018 2ndNovember 2018 and 6th February 2019

The Composition of Audit Committee is as under:

Sr. No. Name of the Member Category
1 Mr. Rajendra M. Gandhi Chairman
2 Mr. Rameshwar D. Sarda Member
3 Mr. Vijay Kumar Jatia Member
4 Mr. P D. Kelkar* Member

* Upto 29th May 2019

Further one meeting each of Nomination & Remuneration Committee and StakeholdersRelationship Committee and two meetings of Corporate Social Responsibility Committee wereheld the details of which are given in the Corporate Governance Report. The maximum gapbetween any two consecutive meetings of the Board did not exceed one hundred and twentydays.

DIRECTORS’ RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 of the Companies Act 2013 theDirectors state that:

a) in the preparation of the Annual Accounts for the financial year ended 31stMarch 2019 the applicable Accounting Standards and Schedule III of the Companies Act2013 have been followed along with proper explanation relating to material departures ifany.

b) appropriate accounting policies have been selected and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2019 and of theprofit of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Annual Accounts have been prepared on a going concern basis;

e) internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws havebeen devised and such systems are adequate and operating effectively.

STATUTORY AUDITORS:

The Auditors' Report to the Members on the Financial Statements of the Company for thefinancial year ended 31st March 2019 is a part of the Annual Report. TheAuditors Report for the financial year 31st March 2019 does not contain anyqualification reservation or adverse remark. During the financial year 2018-19 theAuditors had not reported any matter u/s 143 (12) of the Act therefore no detail isrequired to be disclosed u/s 134 (3) (ca) of the Act.

The Members of the Company had at the 91st AGM held on 10th July2017 appointed M/s. Deloitte Haskins & Sells LLP Chartered Accountants Mumbaibearing ICAI Firm Registration No.117366W/W-100018 as Statutory Auditors of the Companyto hold office from the conclusion of 91st Annual General Meeting (aGm) tillthe conclusion of 96th Annual General Meeting (subject to ratification of theappointment by the Members at every AGM held after the aforesaid AGM if so required underthe Act). The requirement to place the matter relating to such appointment forratification by Members at every Annual General Meeting has been omitted with effect from7th May 2018.

COST AUDITOR:

In terms of Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audits) Rules 2014 and in pursuance of the recommendation of the Audit Committee theBoard of Directors have appointed Mr. Vikas Vinayak Deodhar Cost Accountant MumbaiMembership No. 3813 as Cost Auditor of the Company for the financial year 2019-20 toconduct the audit of the cost records of applicable products of the Company on aremuneration of र 120000 /- in addition payment of GST as applicable and reimbursementof out of pocket expenses and/or travelling expenses as may be incurred by him subject toratification and confirmation of remuneration by the Shareholders at the ensuing AGM. TheCompany has received written consent from the Cost Auditor stating that the appointmentwill be in accordance with the applicable provisions of the Act and the Rules thereunder.

During the financial year 2018-19 the Cost Auditor had not reported any matter u/s143(12) of the Act therefore no detail is required to be disclosed u/s 134(3) (ca) of theAct.

SECRETARIAL AUDITORS AND SECRETARIAL STANDARDS:

Secretarial Audit for the financial year 2018-19 was conducted by M/s. JHR &Associates Company Secretaries pursuant to the provisions of Section 204 of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The Report of the Secretarial Auditors is annexed as"Annexure C".

The Board of Directors has appointed M/s. JHR & Associates Company Secretaries asthe Secretarial Auditors to conduct Audit of secretarial records of the Company for thefinancial year 2019-20. The Company has received written consent from them stating thatthe appointment will be in accordance with the applicable provisions of the Act and theRules thereunder.

During the financial year 2018-19 the Secretarial Auditors had not reported any matteru/s 143(12) of the Act therefore no detail is required to be disclosed u/s 134(3) (ca) ofthe Act.

In accordance with SEBI Circular no. CIR/CFD/CMD1/27/2019 dated February 08 2019 theCompany has obtained Annual Secretarial Compliance Report from the Secretarial Auditor ofthe Company and has been submitted the same to the Stock Exchanges.

During the year 2018-19 the Company has complied with applicable Secretarial Standardsissued by the Institute of the Company Secretaries of India.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is annexed as "Annexure D".

RELATED PARTY TRANSACTIONS:

The Company has formulated a policy on Related Party Transaction which is uploaded onthe Company's website. The policy deals with review and approval of related partytransactions. The Board of Directors have approved the criteria for making the omnibusapproval by the Audit Committee within the overall frame work of the policy on relatedparty transactions. Omnibus approval is obtained for related party transactions which areof repetitive nature and entered in the ordinary course of business and on arm's lengthbasis.

All related party transactions are placed before the Audit Committee for review andapproval. Mr. Rajas R. Doshi Chairman and Managing Director and Mr. Mayur R. DoshiExecutive Director are having credit balances with the Company in current account of र0.88 Lakhs and र 0.50 Lakhs respectively as of 31st March 2019.

All related party transactions entered into during the financial year were in theordinary course of business and on an arm's length basis except the transaction(s) withMs. Anima B. Kapadia Director and Sole Proprietor of Daphtary Ferreira & DivanSolicitors and Advocates of the Company for rendering legal services to the Company whichwas approved by the Audit Committee and Board.

The details are given in Form AOC-2 which is annexed as "Annexure E". Thereare no material related party transactions entered into during the financial year 2018-19by the Company.

The disclosure of transactions including with related party belonging to thePromoter/Promoter Group which holds 10% or more shareholding in the Company as per formatprescribed in the Accounting Standards for annual results is given in note No. 2.34 to theNotes to Accounts.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return as on 31stMarch 2019 in Form MGT-9 is annexed herewith as "Annexure F" and also availableon the website of the Company at link http://www.indianhumepipe.com/portals/0/images/pdf/annual_report/AnnexF1819.pdf

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 read with Section 197 of the Act is attached as"Annexure G".

INDUSTRIAL RELATIONS:

The Company is having total strength of 1597 permanent employees as on 31stMarch 2019 working at various locations such as Factories / Projects/ ProjectsOffices/Head Office and Research & Development Department Mumbai.

Industrial relations with the workmen at various units of the Company were by and largeremained peaceful and cordial.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE:

During the year under review there were no complaints filed pursuant to The SexualHarassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013(the Act) and the Rules thereunder. Internal Committees have been set up under the Act toredress complaint(s) regarding sexual harassment.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

During the year under review the Company has transferred र 477620/- towardsunclaimed dividend for the financial year 2010-11 to IEPF. In terms of Section 124(6) andIEPF Rules 2016 of the Companies Act 2013 the Company has transferred 7751 EquityShares to IEPF Authority of those shareholders who did not claim dividend for sevenconsecutive years. Further unclaimed matured fixed deposit(s) and unclaimed interest of र101828/- on fixed deposits were also transferred to Investor Education and ProtectionFund in compliance with the provisions of Section 125 of the Companies Act 2013 whichremained unclaimed by the fixed deposit holders of the Company for a period of 7 yearsfrom the date they became due for payment.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company. TheCompany does not have ESOS/ESOP Scheme for its employees/Directors.

3. No fraud has been reported by the auditors to the Audit Committee or the Board.

4. The Company does not have any scheme or provision of money for the purchase of itsown shares by employees / Directors or by trustees for the benefit of the employees orDirectors.

ACKNOWLEDGEMENTS:

Your Directors record their gratitude to the Shareholders Customers BankersGovernment Departments Vendors Sub-contractors and all other Stakeholders for theircontinued support and co-operation during the year.

Your Directors also wish to place on record their appreciation of the services renderedby the employees of the Company.

Wishing you all good health wealth and prosperity.

For and on behalf of the Board of Directors

Rajas R. Doshi

Chairman & Managing Director

Registered Office:

Construction House 2nd floor

5 Walchand Hirachand Road

Ballard Estate Mumbai - 400 001

Date : 29th May 2019

ANNEXURE ‘A’ TO Board’s REPORT

CSR POLICY

Introduction:-

A. In line with Section 135 of the Act and Companies (Corporate Social ResponsibilityPolicy) Rules 2014 read with Schedule VII to the Act the Company has formulated itsCorporate Social Responsibility Policy (CSR Policy) for continuing its charitableactivities. The Company undertakes its CSR activities programmes etc. through RatanchandHirachand Foundation (the Foundation) and /or any other Trust / Section 8 Company and/ oron its own. The Company's CSR activities are independent of the normal conduct of itsbusiness. The CSR programs projects and activities to be carried out in this regard bythe Company through Ratanchand Hirachand Foundation and / or any other Trust / Section 8Company and / or on its own are enumerated as under:

B. 1. Providing educational grant / aid to needy students and

institutions funding salaries of teachers medical aid to the patients as well as toHospitals Charitable Trusts Institutions NGOs and donations of costly medicalequipments to Municipal/Public Hospitals across the country.

2. Promoting education including special education and employment enhancement vocationskills especially among children women elderly and differently abled and livelihoodenhancement projects.

3. Promoting preventive health care safe drinking water sanitation etc.

4. Ensuring environmental sustainability ecological balance and conservation ofnatural resources use of solar energy rain water harvesting etc.

5. Undertaking all other activities projects and programs as per Section 135Companies (CSR) Rules 2014 and the Schedule VII of the Act as amended from time to time.

The CSR Committee and the Board of Directors will monitor the programs / projects andactivities undertaken through the above Foundation on behalf of the Company and / or onits own. Further the surplus arising out of the CSR programs or projects or activitiesshall not form part of the business profit of the Company.

C. 1. The CSR activities does not include the activities undertaken

in pursuance of normal course of business of the Company.

2. The surplus arising out of the CSR projects or programs or activities shall not formpart of the business profit of the Company.

3. The CSR projects or programs or activities that benefit only the employees of theCompany and their families shall not be considered as CSR activities in accordance withSection 135 of the Act.

4. Companies may build CSR capacities of their own personnel as well as those of theirImplementing agencies through Institutions with established track records of at leastthree financial years but such expenditure shall not exceed five percent of total CSRexpenditure of the Company in one financial year.

D. Expenditure:-

CSR expenditure shall include all expenditure including contribution to corpus or onprojects or programs relating to CSR activities approved by the Board on therecommendation of CSR Committee in line with the activities programs and projects withinthe purview of the Act Rules thereon and the Schedule VII. A specific budget would beallocated to the projects to be undertaken for each financial year. These projects /activities will include educational grants / aid preventive health care financial aid topatients donations of costly medical equipments to Municipal / Public Hospitals. Furtherestablished Trusts Institutions NGOs etc. may be given donation financial aids supportfor undertaking CSR activities after taking into consideration various key parameters liketheir credibility capacity past performances established track records etc. TheCompany would endeavour to spend in every financial year atleast 2% of the average netprofit through the Foundation.

E. Reporting:-

The Board's report will include all activities programs and projects on CSR containingparticulars specified in the Annexure to the said CSR Rules 2014.

F. Management Commitment:-

The Board of Directors Management and all the employees would subscribe to thephilosophy of concern and care. We believe that we have a mission to walk on the path ofgenerosity and compassion in order to make a difference in the lives of the poor andsociety at large. This would be the cornerstone of our CSR Policy.

G. Display of CSR activities on Company's website:-

The Company will disclose contents of its CSR Policy in the Annual

Report and also display it on the website of the Company.