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Kiri Industries Ltd.

BSE: 532967 Sector: Industrials
NSE: KIRIINDUS ISIN Code: INE415I01015
BSE 16:01 | 23 Oct 446.20 0.45
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NSE 15:57 | 23 Oct 446.70 1.20
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OPEN 448.35
PREVIOUS CLOSE 445.75
VOLUME 1255
52-Week high 612.40
52-Week low 188.10
P/E
Mkt Cap.(Rs cr) 1,500
Buy Price 445.00
Buy Qty 1.00
Sell Price 446.75
Sell Qty 5.00
OPEN 448.35
CLOSE 445.75
VOLUME 1255
52-Week high 612.40
52-Week low 188.10
P/E
Mkt Cap.(Rs cr) 1,500
Buy Price 445.00
Buy Qty 1.00
Sell Price 446.75
Sell Qty 5.00

Kiri Industries Ltd. (KIRIINDUS) - Director Report

Company director report

To

The Members Kiri Industries Limited

Your Board of Directors are pleased to present the 21st Annual Report together withAudited Financial Statements of the Company for the Financial Year ended on March 312019.

Standalone Performance:

The highlights of Company's financial performance for the year ended March 31 2019are as under:

(INR in Crore)
Particulars 2018-19 2017-18
Total Revenue 1064.69 904.59
Earning Before Finance Cost Depreciation and Tax (EBITDA) 159.23 133.41
Less: Finance Cost 4.39 1.65
Depreciation 28.50 25.05
Earning before taxation 126.34 106.71
Less: Current Tax 28.00 22.77
Deferred Tax (21.70) (18.60)
Other Comprehensive Income (0.21) 0.07
Earnings After Tax 119.83 102.60

Highlights of Standalone Operations

• Total Revenue:

During the year under review the total revenue of the Company is increased by 18%. TheCompany has reported a total revenue of INR 1064.69 Crore for the FY 2018-19 as comparedto INR 904.59 Crore in FY 2017-18 with support of export increase by 28% as compared tothe previous financial year. The revenue of the Company is increased due to volume growthof dyes by 19% dyes intermediates by 10% and basic chemicals by 10% coupled with betteraverage realization by around 12%.

• Earnings before Interest Depreciation and Tax (EBITDA):

During the year under review Earning(s) before Interest Depreciation and Tax hasincreased by 19% from INR 133.41 Crore to INR 159.23 Crore. The increase in EBITDA ismainly on account of increase in turnover and marginal decrease in fixed overhead ascompared to previous year.

• Finance Cost and Depreciation:

During the year finance cost increased from INR 1.65 Crore to INR 4.39 Crore which dueto increase in bank charges of letter of credit. Similarly depreciation has been increasedfrom INR 25.05 Crore to INR 28.50 Crore mainly on account of commencement of ThionylChloride project Zero liquid discharge project and disperse dyes project during thecurrent financial year.

• Earnings After Tax:

During the financial year 2018-19 Earning after Tax (EAT) has increased by around 17%from INR 102.60 Crore to INR 119.83 Crore. The rise of EAT is backed with increase inrevenue and decrease in overheads during the current financial year.

Highlights of Consolidated Performance

The highlights of Company's consolidated financial performance for the year endedMarch 31 2019 are as under:

(INR in Crore)

Particulars FY 2018-19 FY 2017-18
Total Revenue 1396.50 1136.76
Earnings before Interest Depreciation and Tax (EBITDA) 233.70 182.52
Less: Finance cost 5.08 3.48
Depreciation 37.56 34.07
Earnings Before Tax 191.06 144.97
Taxes 33.43 18.30
Other Comprehensive Income (0.21) 0.07
Earnings After Tax (Before Share of Profit of Associates) 157.42 126.75
Share of Profit of Associates 6.49 231.35
Earnings After Tax 163.91 358.09

Highlights of Consolidated Operations

• Total Revenue:

During the year under review total revenue has increased by 23% from INR 1136.76 Croreto INR 1396.50 Crore. Increase in revenue is due to the combination of volume growthbetter price realization and positive contribution in term of revenue increase by theJoint Venture Company i.e. Lonsen Kiri Chemical Industries Limited.

• Earnings before Interest Depreciation and Tax (EBITDA):

Earnings before interest depreciation and tax (EBITDA) has been increased by 28% inFY2018-19 as compared to previous year. During the year EBITDA was increase to INR 233.70Crore as compared to INR 182.52 Crore that of previous Financial Year. Increase in EBITDAis due to increase in volume and better price realization as compared to previous year.

• Earnings After Tax:

During the year Earnings After Tax (before share of profit of associates) has beenincreased from INR 126.75 Crore to INR 157.42 Crore which is increased by 24% as comparedto previous Financial Year. Share of profit of associates sharply decreased from INR231.35 Crore to INR 6.49 Crore on account of disputed provision in books of DyStar. Afteradding back of the disputed exceptional write-downs /exceptional provisions the EarningsAfter Tax would amount to INR 444.25 Crore. Earning after tax including shares of profitof associates and disputed provisions by DyStar amounting to INR 163.91 Crore as comparedto INR 358.09 Crore of previous financial year.

Dividend

• Dividend on Cumulative Redeemable Preference Shares:

Your Directors have recommended dividend of INR 0.015/- (@ 0.15%) per share on4333500 Cumulative Redeemable Preference Shares (Preference Shares) of INR 10.00 eachfor the year ended March 31 2019. The aggregate amount of the dividend is INR 78368/-including dividend distribution tax amounting to INR 13365/-.

• Dividend on Equity Shares:

Your directors are pleased to recommend a dividend of INR 2.00/- (@ 20%) per share ofINR 10/- each for the year ended March 31 2019. The final dividend on equity shares ifapproved by the members of the Company at the ensuing 21st Annual General Meetingscheduled to be held on September 27 2019 would involve a total cash outflow of INR755.77 lakhs including Dividend Distribution tax (DDT) of INR 128.89 lakhs will be paidout of the profits of the Company. The dividend payout is as per the Company's DividendDistribution Policy which is available on the website of the Company i.e.www.kiriindustries.com .

• Transfer of Unclaimed Dividend to Investor Education and Protection Fund:

During the year 2018-19 unclaimed dividend of the Financial Year 2010-11 amounting toINR 34597/- was transferred to the Investor Education and Protection Fund (IEPF) asrequired under the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016.

Further there was no other amount under any other heads as prescribed under Section125 (2) of the Companies Act 2013 which shall required to be transferred to InvestorEducation and Protection Fund (IEPF) during the year. Further there were no shares whichwere required to be transferred to the Investor Education and Protection Fund (IEPF)during the year under review.

Subsidiaries and Consolidated Financial Statements

The Company has prepared Consolidated Financial Statements in accordance with theIndian Accounting Standards (Ind AS). The Company has also presented financial statementsas per Schedule III to the Companies Act 2013. Except where otherwise stated theaccounting policies are consistently applied.

The Board has reviewed the affairs of the Company's subsidiaries during the year atregular intervals. In accordance with section 129(3) of the Companies Act 2013 theCompany has prepared Consolidated Financial Statements of the Company and itssubsidiary/Associates and Joint Venture which forms part of this Annual Report. Astatement containing salient features of the financial statements of the subsidiarycompanies/Joint Ventures/Associates in Form AOC- 1 is provided as Annexure A which formspart of the Directors Report of the Company. During the year under review there were noCompanies which have become or ceased to become subsidiary associate or joint venture ofyour Company.

In accordance with third proviso to Section 136 of the Companies Act 2013 the AnnualReport of your Company contains inter alia the audited Standalone and ConsolidatedFinancial Statements.

Your Company has also implemented Policy for determining Material Subsidiary as per therequirements under regulation 16 of the Listing Regulations. The said policy is availableon the website of the Company i.e. www.kiriindustries.com .

Directors and Key managerial Personnel

During the year under review there is no change in composition of Board of Directorsof the Company.

Mr. Mukesh Desai (DIN: 00089598) and Mr. Keyoor Bakshi (DIN: 00133588) were appointedas Independent Directors of the Company at the 16th Annual General Meeting of the Companyheld on September 26 2014 and they hold office as Independent Directors upto September25 2019.

It is proposed to reappoint Mr. Mukesh Desai and Mr. Keyoor Bakshi as IndependentDirectors of the Company for another term of 5 (Five) years at the ensuing Annual GeneralMeeting. They have offered themselves for re-appointment for a second term of five years.

Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act read with Rules framed thereunder and Regulation 16(1)(b) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations"). There has been no change in thecircumstances affecting their status as independent directors of the Company.

Further Mr. Manish Kiri Managing Director (DIN-00198284) of the Company retires byrotation at the ensuing AGM and being eligible offers himself for re-appointment.

Auditors

• Statutory Auditors:

M/s. Pramodkumar Dad & Associates Chartered Accountants Ahmedabad were appointedas Statutory Auditors of the Company at the 19th Annual General Meeting of the Company fora term of 5 (Five) consecutive years and they shall hold the office upto 24th AnnualGeneral Meeting of the Company to be held in year 2022. They have confirmed that they arenot disqualified for continuing as Auditors of the Company.

The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.

• Cost Auditors:

Based on recommendation of the Audit Committee of the Company Board of Directors attheir meeting held on August 10 2018 has appointed M/s. V. H. Savaliya & AssociatesCost Accountants Ahmedabad as cost Auditor of the Company for the financial year2018-19.

Your Company has maintained the cost records as prescribed under Section 148 of theCompanies Act 2013 and rules made thereunder.

The Cost Audit Report for the financial year 201819 issued by M/s. V. H. Savaliya& Associates Cost

Accountants Ahmedabad does not contain any qualification reservation adverse remarkor disclaimer.

• Secretarial Auditors:

The Board of Directors of the Company at their meeting held on August 10 2018 hasappointed M/s Kashyap R. Mehta & Associates Practicing Company Secretaries Ahmedabadto conduct Secretarial Audit of the Company for the Financial Year 2018-19. Thesecretarial audit report in the prescribed form MR-3 is attached herewith as"Annexure B"

Certain remarks in the Secretarial Audit Report do not have material impact onfinancial performance of the Company. The views of the Management on each such remark aregiven hereunder:

1. Ownership of an agricultural land intended for industrial purpose will betransferred in the name of the company upon receiving necessary approval for conversioninto non agriculture land.

The land is acquired for future expansion of the Company. Since a Company cannot holdagriculture land it is initially acquired in the name of Chairman of the Company and thesame would be transferred in the name of the Company after its conversion intonon-agriculture land.

2. The Company has filed all due ECB-2 returns for the financial year under review inrespect of FCCB with some delays for certain months.

There was some delay in filing of ECB-2 returns for reporting under Foreign ExchangeManagement Act 1999 and ECB guidelines with respect to reporting of Foreign CurrencyConvertible Bonds ("FCCBs") which do not have material impact on financialperformance of the Company.

Declaration by Independent Directors and statement on compliance of Code of Conduct

During the year under review all Independent Directors have given their declarationsstating that they meet the criteria of independence as prescribed under Section 149(6) ofthe Companies Act 2013 and Listing Regulations and have also complied the Code forIndependent Directors as prescribed in Schedule IV of the Companies Act 2013. In opinionof the Board they fulfill the conditions of independence as specified in the CompaniesAct 2013 and Rules made thereunder.

In terms of provisions of Listing Regulations the Board of Directors of the Companyhave laid down a Code of Conduct ("Code") for all Board Members and SeniorManagement Personnel of the Company. The Board Members and Senior

Management Personnel of the Company have affirmed compliance with the Code. TheManaging Director of the Company has given a declaration to the Company that all the BoardMembers and Senior Management Personnel of the Company have affirmed compliance with theCode. Code of Conduct for Directors and senior management personnel is available on thewebsite of the Company at www.kiriindustries . com

Meetings of the Board Committees & Compliance to Secretarial Standards:

During the year under review 5 (Five) Meetings of Board of Directors were held as perdetails given below:

Sr. No. Date of Board Meeting
1. April 02 2018
2. May 29 2018
3. August 10 2018
4. November 12 2018
5. February 13 2019

Pursuant to the requirements of Schedule IV to the Companies Act 2013 and regulation25(2) of the Listing Regulations a separate Meeting of the Independent Directors of theCompany was held on March 30 2019.

Details Compositions and meeting of various committees during the year are given inCorporate Governance Report.

During the year under the review the Company has complied with the provisions ofSecretarial Standard 1 (relating to meeting of the Board of Directors) and SecretarialStandard 2 (relating to General meetings).

Listing Fees

The Equity Shares of your Company are listed and actively traded on the BSE Limited(BSE) and the National Stock Exchange of India Limited (NSE). The Company had paid AnnualListing fees to both the stock exchanges for the Financial Year 2019-20 within thestipulated time.

Changes in Capital Structure

• Allotment of Equity Shares:

During the year under review the Board of Directors of the Company at their meetingheld on April 02 2018 allotted 1100000 Equity Shares to M/s. Equinaire Chemtech LLPPromoter group upon conversion of warrants issued on preferential basis. Thereforeissued subscribed and paid up Equity Share Capital of the Company is increased from INR30.24 Crore to INR 31.34 Crore.

• Employee Stock Option Scheme

In order to motivate incentivise and reward employees your Company has institutedemployee stock options plan. The Board of Directors and Nomination and RemunerationCommittee administers this plan. The stock option plan is in compliance with Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014("Employee Benefits Regulations") and there have been no material changes tothis plan during the financial year. Disclosures on ESOP plan details of options grantedshares transferred to employee through Kiri Employee Stock Option Trust ("ESOPTrust") upon exercise etc. as required under the Employee Benefits Regulations readwith Securities and Exchange Board of India circular no. CIR/CFD/POLICY CELL/2/2015 datedJune 16 2015 are available on the Company's website at www.kiriindustries.com .

During the year eligible employees have exercised their 200000 options granted andvested to them and ESOP trust has transferred equal number of equity shares to respectiveemployees. As on March 31 2019 there are 425000 options outstanding. No employee wasissued stock option during the year equal to or exceeding 1% of the issued capital of theCompany at the time of grant. Kiri Employee Stock Option Trust is an ESOP Trust set up byyour Company pursuant to approval by the shareholders at their Annual General Meeting heldon 26th September 2014 the ESOP Trust is authorized to transfer shares from the Trustaccount to employees on exercise of vested options.

Board Evaluation

The Nomination and Remuneration Committee and the Board of Directors of the Company hadlaid down the process and criteria for annual performance evaluation of the Board itsCommittees and individual directors. The Board of Directors have carried out an evaluationof its own performance its Committees and that of its individual directors in compliancewith the provisions of the Act and Listing Regulations.

The evaluation process covered aspects such as Board structure and compositionfrequency of Board Meetings participation in the long term strategic planningcontribution to and monitoring of corporate governance practices and the fulfilment ofDirectors' obligation and fiduciary responsibilities including but not limited to activeparticipation at the Board and Committee meetings. The Board has reviewed the performanceof the Board as a whole its Committees and individual Directors taking into accountfeedback of the Nomination and Remuneration Committee and the Independent Directors whichincludes the evaluation of the Chairman and Non- Independent Directors of the Company.

Particulars of Employees

A Statement pursuant to section 197 of the Companies Act 2013 read with Rule 5 ofCompanies (Appointment & remuneration of

Managerial Personnel) Rules 2014 have been attached hereto as "Annexure C"

Policy on Directors' Appointment and Remuneration

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and is also available on Company's website i.e.www. kiriindustries.com.

Familiarisation Programme for Directors

The Company believes that a Board which is adequately informed/familiarised with theCompany and its affairs can contribute significantly to effectively discharge itsfiduciary duty as director of the company and that fulfils stakeholders' aspirations andsocietal expectations. In this regard the Directors of the Company are updated on changes/ developments in the domestic / global industry scenario in the sector which affect thebusiness of the Company to enable them to take well informed and timely decisions. Thedetails of such familiarization programmes have been disclosed on the Company's websitei.e. www.kiriindustries.com .

Directors Responsibility Statement

Pursuant to the provisions of Section 134 (5) of the Companies Act 2013 with respectto Directors' Responsibility Statement it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors had 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 and ofthe profit of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts for the year ended March 31 2019 ona ‘going concern' basis;

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

f) they have devised proper systems to ensure compliance with

the provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during FY 2018 - 19.

Internal Control Systems and their Adequacy

The Company has an Internal Control System commensurate with the size and nature ofits business operations. The Company has appointed an external audit firm for internalaudit of the Company. The Internal Auditor reviews the adequacy of internal control systemin the Company its compliance with operating systems and laid down policies andprocedures. Based on the report of internal auditor the account department undertakecorrective actions in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee on quarterly basis.

The details in respect of internal financial control and their adequacy are alsoincluded in the Management Discussion and Analysis which is a part of this report.

Deposits from public

During the year under review the Company has not accepted any deposits from publicwithin the meaning of provisions of Section 73 to 76 or any other provisions of theCompanies Act 2013 the Companies (Acceptance of Deposits by Companies) Rules 2014 orany other applicable rules (subject to modification or reenactment thereof from time totime).

Details of Loans Investments and Guarantees

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are provided in the notes to the Financial Statements ofthe Company for the year ended March 31 2019.

Related Party Transactions

During the year under review all the related party transactions are entered on arm'slength basis in the ordinary course of business and are in compliance with the applicableprovisions of the Companies Act 2013 and the Listing Regulations. There are no materiallysignificant related party transactions made by the Company with Promoters Directors orKey Managerial

Personnel etc. which may have potential conflict with the interest of the Company atlarge or which requires the approval of the shareholders. Since all Related PartyTransactions entered into by the Company were in ordinary course of business and were onarms' length basis Form AOC-2 is not applicable to the Company. The details of thetransactions with Related Party are provided in the Company's audited financial statementsin accordance with the Accounting Standards.

All Related Party Transactions are placed before the Audit Committee and the Board inevery quarter. Omnibus approval of audit committee and board are obtained for thetransactions which are forecasted and are repetitive in nature. An abridged policy onrelated party transactions is available on the website of the Company i.e.www.kiriindustries.com .

Conservation of energy research and development technology absorptions and foreignexchange earnings and outgo

The relevant information on conservation of energy technology absorption foreignexchange earnings & outgo as required to be disclosed in term of Section 134(3)(m) ofthe Companies Act 2013 together with the Companies (Accounts of Companies) Rules 2014 isannexed to this report as "Annexure D"

Risk Management

The Company has a Risk Management framework in place to identify assess monitor andmitigate various risks to the business. This framework seeks to minimize adverse impact onthe business objectives and enhance the Company's competitive advantage. The frameworkalso defines the risk management approach across the company at various levels. RiskManagement Committee reviews the process of risk management. The details of the Committeeand its terms of reference are provided in the Corporate Governance Report forming part ofthe Board's Report. The Risk Management policy of the Company is available on website ofthe Company www.kiriindustries.com.

Vigil Mechanism process (Whistle Blower Policy)

As per the provisions of Section 177 of the Companies Act 2013 ("the Act")and Regulation 22 of the Listing Regulations the Company has devised a vigil mechanismnamed Whistle Blower Policy for escalating system of ethical concerns etc. and to dealwith instances of fraud and mismanagement if any. The details of the Whistle BlowerPolicy are available on the website of the Company at www.kiriindustries.com and alsoexplained in the Corporate Governance Report.

Significant and Material orders passed by the Regulators or Courts

During the financial year under review no significant or material orders were passedby any Regulatory/ Statutory Authorities or the Courts which would impact the goingconcern status of the Company and its future operations. During the year the Company haspaid settlement amount of INR 288682 to SEBI towards settlement of delay in disclosureby the Company with respect to acquisition of shares by promoter group throughpreferential allotment. Upon payment of settlement amount adjudication officer has passedorder on October 12 2018.

Details in respect of frauds reported by Auditors other than those which are reportableto the Central Government

During the year under review the Statutory Auditors Cost Auditors or SecretarialAuditors of the Company have not reported any frauds to the Audit Committee or to theBoard of Directors as prescribed under Section 143(12) of the Companies Act 2013 andrules made thereunder.

Extract of annual return

In accordance with Section 134(3)(a) and Section 92(3) of the Companies Act 2013 anextract of the annual return is available on the website of the Company i.e.www.kiriindustries.com .

Composition of Committees

Currently there are 5 (Five) Committees namely Audit Committee Nomination andRemuneration Committee Corporate Social Responsibility Committee StakeholdersRelationship Committee and Risk Management Committee. A detailed note on the compositionof the board and other Committees are provided in the Corporate Governance Report whichis forming part of this report.

Audit Committee

As required under section 177 (8) of the Companies Act 2013 and regulations 18 ofListing Regulations the composition of the Audit Committee is mentioned herein below:

Name of Members Designation
Mr. Keyoor Bakshi Chairman to the Committee
Mr. Manish Kiri Member
Mr. Mukesh Desai Member
Mrs. Veena Padia Member

During the year under review all the recommendations made by the Audit Committee wereaccepted by the Board.

Corporate Social Responsibility Committee

Pursuant to Section 135 of Companies Act 2013 the Company has constituted CorporateSocial Responsibility Committee (CSR Committee) comprising of following members

Name of Members Designation
Mrs. Veena Padia Chairman to the Committee
Mr. Pravin Kiri Member
Mr. Manish Kiri Member
Mr. Mukesh Desai Member

Your Company has always been committed to the cause of social service and hasrepeatedly channelized its resources and activities which positively affects the societysocially ethically and also environmentally. Your Company has taken up various CorporateSocial Responsibility ("CSR") initiatives and enhanced value in the society.

Your Company has formulated CSR Policy which encompasses its philosophy and guides itssustained efforts for undertaking and supporting socially useful programs for the welfare& sustainable development of the society.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year underreview are set out in "Annexure E" of this report in the format prescribed inthe Companies (Corporate Social Responsibility Policy) Rules 2014. For further detailsregarding the CSR Committee please refer to the Corporate Governance Report which formspart of this report. The CSR policy is available on the website of the Company i.e.www.kiriindustries.com.

Nomination and Remuneration Policy of Directors Key Managerial Personnel and OtherEmployees

As prescribed under section 178 of the Companies Act 2013 ("the Act") andregulation 19 of Listing Regulations your Company has adopted Nomination and Remunerationpolicy of Directors appointment and remuneration including criteria for determiningqualifications positive attributes independence of a Director and the same is availableon the website of the Company i.e. www.kiriindustries.com . The relevant information asper Regulation 19 of the Listing Regulations is available in the Corporate Governancereport.

Human Resource Development

The Company believes that Human Resources play a vital role in achieving its corporategoal. Hence the Company continues to invest on hiring the best talent from otherindustries developing and retaining the available talent to ensure a sustainable talentsupply within the organisation. The Company provides various opportunities to theemployees to develop their skills to take up higher responsibilities in the organisation.

Corporate Governance & Management Discussion and Analysis Report

As prescribed under Regulation 34 (3) read with Schedule V of the Listing Regulationsa separate section on corporate governance practices implemented by the Company alongwith the Compliance Certificate from the Secretarial Auditors regarding compliance ofconditions of corporate governance as stipulated in Listing Regulations is attached tothis Annual report.

The Management Discussion and Analysis Report on the Industry and business operationsof the Company as required under Listing Regulations is provided in a separate sectionand forms an integral part of this Report.

Disclosure

As per Regulation 43A of the Listing Regulations the Dividend Distribution Policy isdisclosed in the Corporate Governance Report and is available on the Company's websitei.e. www. kiriindustries.com.

The details in respect of compliances with provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules madethereunder are included in Corporate Governance Report and is available on the Company'swebsite i.e. www.kiriindustries.com .

The Company has adopted a Code of Conduct to regulate monitor and report trading byinsiders inter alia which prohibits trading in securities of the Company by Directorsand employees while in possession of Unpublished Price Sensitive Information in relationto the Company. The said code is available on the website of the Company atwww.kiriindustries.com .

During the Year under review company has complied with Secretarial Standards asapplicable to the company.

Material Changes

During the year under review there has been no material changes and commitmentsaffecting the financial position of the Company.

Updates on court case in Singapore

The Court of Appeal (Supreme Court) Singapore pronounced judgment on 29th May 2019upholding the earlier SICC decision and dismissed the appeal with cost filed by Senda.Hence Kiri's minority oppression suit and original judgment of SICC dated 3rd July 2018has been upheld and maintained by the court of Appeal in the Supreme Court of Singapore intheir judgment.

Senda International Capital Limited ("Senda") a Longsheng Group Companybeing majority shareholder of DyStar Global Holdings Singapore Pte Ltd("DyStar") had filed an appeal with Court of Appeal against the SingaporeInternational Commercial Court ("SICC") judgment dated 3rd July 2018 issued infavour of Kiri Industries Limited ("Kiri"). The SICC had found Senda committednumerous acts of minority oppression against the Company and had ordered a buy-out ofKiri's 37.57% stake in DyStar.

Senda had also appealed against the dismissal of part of the counterclaims against Kiriand alleged breaches of non-compete and non-solicitation clauses in a Share Subscriptionand Shareholders Agreement ("SSSA"). DyStar had also appealed against thedismissal of a part of the claim for breaches of noncompete and non-solicitation clausesof SSSA.

Senda and DyStar have confined their appeals in relation to counterclaim and claims onKiri's and Manish Kiri's liability in respect of Kiri's offer and/or sale of products toDyStar customers in Sri Lanka and Japan.

As per the directions of SICC Kiri and Senda shall submit their respective valuationsof DyStar. The parties shall thereafter file their responses on such valuations. The SICCis expected to hear the matter of valuation and assessment of damages during 14th to 17thOctober 2019.

Acknowledgement:

The Board takes this opportunity to sincerely thank all its stakeholders namelyshareholders customers suppliers/ contractors bankers employees Government agencieslocal authorities and the immediate society for their un-stinted support and co-operationduring the year.

For and on behalf of Board of Directors
Date: August 12 2019 Pravin Kiri
Place: Ahmedabad Chairman

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