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RPP Infra Projects Ltd.

BSE: 533284 Sector: Infrastructure
NSE: RPPINFRA ISIN Code: INE324L01013
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VOLUME 626
52-Week high 325.30
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P/E 38.59
Mkt Cap.(Rs cr) 520
Buy Price 229.00
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Sell Price 230.00
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OPEN 232.90
CLOSE 232.90
VOLUME 626
52-Week high 325.30
52-Week low 191.00
P/E 38.59
Mkt Cap.(Rs cr) 520
Buy Price 229.00
Buy Qty 10.00
Sell Price 230.00
Sell Qty 1.00

RPP Infra Projects Ltd. (RPPINFRA) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting their 22ndAnnual Report on the business and operations of the Company together with the AuditedStatement of Accounts for the year ended 31st March 2017.

1. Financial highlights (standalone and consolidated)

During the year under review your Company'sstandalone and the Group's consolidated results are as under:

(H crore)

Particulars

Year ended

31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16

Standalone results

Consolidated results

Turnover 366.34 314.69 367.23 314.69
Profit/(Loss) before taxation 31.55 27.81 30.43 26.34
Less : Tax expense 7.69 7.15 7.69 7.15
Profit/(Loss) after tax 23.86 20.67 22.74 19.19
Add: Balance B/F from the previous year 86.36 66.99 100.31 82.42
Balance Profit/(Loss) C/F to the next year 110.22 87.66 123.05 101.61

Operational and performance review

Standalone results

During the year under review on standalone basisrevenue from operations increased to H366 crore from H315 crore in the previous year.Profit after tax was H23.86 crore as against H20.67 crore for the previous year. TheCompany's net worth touched H1 73.50 crore as on 31st March 2017 from H151 crore as on31st March 2016.

Consolidated results

Consolidated revenues for the year under review wereH367 crore as against H315 crore in the previous year recording a growth or 16.70%.Consolidated profit after tax was H22.74

crore. The Company's consolidated net worth increasedto H207.52 crore as on 31st March 2017 from H186.90 crore as on 31st March 2016.

In accordance with the Accounting Standard AS-21 onconsolidated financial statements the audited consolidated financial statements are alsoprovided along with standalone financial statements in the Annual report.

2. Company's affairs and future outlook

Your Directors are pleased to inform that during theyear your Company has made significant developments. The overall strategy of the Companyto be in the fastest growing spaces in the fastest growing states and with the safestcustomer

has together resulted in the most profitableproposition.

Your Company is focused on the four Indian states ofAndhra Pradesh Madhya Pradesh Karnataka and Telangana besides Tamil Nadu. These statesare focusing on the creation of infrastructure with renewed vigour and your Company hasalready made strong inroads into all these states. Further the focus of the Board to be afrontrunner in irrigation and water supply projects civil construction works nationalhighways rural roads and other infrastructure contracts has given a distinct advantage tothe Company.

Your Company has received two international contractsduring the year. Your Company received a contract in Sri Lanka to construct a culturalcenter in Jaffna which is being implemented by the High Commission of India in Colombofor USD 9.84 million. Further your Company thorough a consortium agreement with SiemensLtd has received a contract in Bangladesh pursuant to a joint bid to Power Grid Companyof Bangladesh in respect of design supply erection testing and commissioning of 230 kVand 132 kV substations on turnkey basis. Under the said bid your Company will executecivil works worth about H970 million.

Your Company received the following major contractsduring the financial year 2016-17 and in the current financial year till the date of thisreport:

• Order from Container Corporation of India Ltdfor the construction of a pre-engineered warehouse for H112 million.

• Order from the state of Madhya Pradesh for theconstruction of roads worth H454 million.

• Work order for the construction of a culturalcentre in Jaffna being executed by the High Commission of India Colombo for USD 9.84million.

• Order from Tamil Nadu Civil SuppliesCorporation for the construction of a scientific storage godown at Kodavasal Village andTaluk in Thiruvarur district for H254 million.

• Order from Tamil Nadu Civil SuppliesCorporation for the construction of one more scientific storage godown at KodavasalVillage and Taluk in Thiruvarur district for H150 million.

• Order from Kamarajar Port Ltd for theconstruction of a

container pre-stacking yard and other ancillaryfacilities worth H242 million.

• Work order to construct integrated storm waterdrains in Virugambakkam and Arumbakkam for Chennai Corporation from Annai Infra DevelopersPvt Ltd worth H300 million.

• Order from Karnataka Slum Development Board forthe construction of dwelling units including infrastructure at slums of Krishnaraja inMysore worth H456 million.

• Order from Power Grid Company of Bangladesh injoint bid with Siemens in respect of design supply erection testing and commissioningof 230 kV and 132 kV substations on turnkey basis of which civil works approx H97 crorewill be executed by your Company.

• Order from Transmission Corporation ofTelangana Ltd for civil works worth approx H33 crore at Tukkapur jointly with Siemens.

The total value of works in hand as on 31st March2017 was H786.25 crore.

The Company has a robust business model and is focusedon widening its services by venturing into niche areas/new sectors/geographies/segmentsand expanding market reach. The Company emphasises on ensuring cost competitiveness soundexecution strategies managing volatility controlling working capital and strengtheningcontract management efficiency thereby ensuring improved operational efficiency.

Your Company engages in strengthening its projectportfolio by adding new projects on a continuous basis. Your Company endeavors to encashall opportunities available both in domestic and/or international markets. Theprogressive revival of the Indian economy is indicative of better opportunities emergingin the short-term. For the purpose of undertaking new projects your Company may need toaugment longterm financial resources. Even the current projects may require furtherlong-term resources for execution. Any such requirements will be assessed by the Board ofDirectors and accordingly such decisions including the mode of fund raising will also bedecided by the Board.

Details of the Company's performance and the outlookis provided in the Management Discussion and Analysis Report which forms a part of thisreport.

3. Change in the nature of the business

There was no change in the nature of the business ofthe Company and its subsidiaries during the year.

4. Dividend and amounts transferred to reserves

Your Directors are pleased to recommend a dividend of5%

i.e. Re. 0.50 per equity share of face value of H10/-each for the financial year 2016-17 subject to the approval of the members of theCompany. The dividend on approval of the shareholders will be paid to eligible members.The equity dividend outgo for the financial year 2016-17 would absorb a sum of H1.13crore. The balance profits of H22.50 crore after provision for dividend and dividenddistribution tax is proposed to be retained in the Statement of Profit and Loss. Hence noamount is proposed to be transferred to reserves.

5. Extract of annual return

The extract of Annual Return in form MGT-9 for thefinancial year 2016-17 has been enclosed in this report as Annexure-1.

6. Board of Directors and meetings of the Board

The Board is adequately constituted with anappropriate mix of executive non-executive and independent directors to maintain theindependence of the Board and to separate the Board functions of governance andmanagement.

The Board is adequately constituted in compliance withSection 149 of the Companies Act 2013 and Regulation 17 of SEBI (LODR) Regulations. Thetotal strength of the Board is presently six Directors comprising of two ExecutivePromoter Directors one Non-Executive Director and three Independent Directors with oneWomen Director on the Board. More details about the Board including the profile of theDirectors are provided in the Corporate Governance Report forming a part of the BoardReport.

During the financial year 2016-17 four Board meetingswere held on 27th May 2016 13th August 2016 14th November 2016 and 11th February 2017.

The attendance of the Directors in the Board meetingis provided below:

Name of the Director No. of No. of
meetings meetings
held attended
Mr. P Arulsundaram 4 4
Mrs. A Nithya 4 4
Mr. P Muralidasan 4 4
Mr. A P C Krisshnamoorthy 1 1
Mr. S Swaminathan 3 2
Mr. K Natarajan 3 3
Mr. K Rangasamy 2 2
Mr. P R Sundararajan 2 2
Mr. K Ravi 2 2

7. Loans guarantees and investments under Section 186

During the financial year 2016-17 the Company has notgranted any loan or extended any guarantee or provided any security in connection with theloans to other companies or made any investments under Section 186 of the Companies Act2013 and hence no disclosure is required to be made.

Please refer to note no. 12 of Notes to Accounts fordetails of all investments made by the Company earlier.

8. Contracts or arrangements with related parties

The particulars of contracts or arrangements withrelated parties referred to in Section 188(1) of the Companies Act 2013 for thefinancial year 2016-17 in the prescribed format AOC-2 has been enclosed with this reportas Annexure - 2.

9. Material Changes Affecting the Financial Positionof the Company

There are no material changes affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany i.e. 31st March 2017 and the date of the Directors' Report.

10. Conservation of energy technology absorption andforeign exchange earnings and outgo

Information as per Section 134 (3) (m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts)

Rules 2014 relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo has been enclosed with thisreport as Annexure - 3.

ll.Subsidiaries joint ventures and associates

The Company has a total of seven subsidiaries out ofwhich five are subsidiaries and two are step-down subsidiaries. The Company does not haveany joint venture or associate Company though it has entered into arrangements for quotingfor projects or undertaking projects as provided elsewhere in this report. During theyear no changes have taken place as regards to the position of the subsidiaries orinvestments in them.

A brief of the subsidiaries is provided below for yourinformation.

R.P.P Infra Projects (Lanka) Limited Sri Lanka

R.P.P Infra Projects (Lanka) Limited is a wholly-ownedsubsidiary of your Company based in Sri Lanka. The Company during 2014-15 successfullycompleted a housing project for the internally-displaced people of Sri Lanka's NorthernProvince for which Hindustan Prefab Limited was the project consultant.

The Company has not taken up any new project duringthe year under review and has no operating revenues during the financial year ended 31stMarch 2017. The Company recorded a net loss of H0.13 crore for the year ended 31st March2017.

R.PP Infra Overseas PLC Mauritius

R.PP Infra Overseas PLC is a wholly-owned subsidiaryof your Company based in Mauritius. The principal activity of the Company is to provideinfrastructure project-related consultancy services.

The company had no operating revenues during thefinancial year ended 31st March 2017. The company recorded a net loss of H0.88 crore.

R.PP Infra Projects Gabon SA Gabon R.PP InfraProjects Gabon SA Gabon is a wholly-owned subsidiary of RPP Infra Overseas PLCMauritius and a step- down subsidiary of the Company. It was incorporated to execute themass housing project awarded by the Republic of Gabon a West African country in 2011.However due to a change in the political situation an increase in the work specificationswithout an appropriate compensation for the change in work the Company withdrew from theproject and the contract has been terminated. The Company is looking at new opportunitiesin this geography.

The Company had no operational revenues during theyear ended 31st March 2017.

R.PP Energy Systems Private Limited India

R.PP Energy Systems Private Limited a wholly-ownedsubsidiary of your Company was incorporated mainly to venture into the power segmentviz. to procure sell and supply electricity from various sources including bio-fuels suchas bio-mass bio-gas etc. and from coal and thermal energy. The other objectives of theCompany are to generate and sell power from all sources including non-conventionalsources such as solar system wind farms wind mills etc. The operations of thissubsidiary have not yet commenced during the period under review.

The Company had no revenues from operations during theyear ended 31st March 2017 and had a relatively minor net loss of H9 lakh for the year.

Sanskar Dealcom Private Limited India

Sanskar Dealcom Private Limited a wholly-ownedsubsidiary of your Company is a company engaged in activities that include beingdistributors agents traders merchants contractors brokers and otherwise deal inmerchandise and articles of all kinds including clearing agents freight contractorsforwarding agents licensing agents general brokers and to carry any kind of commercialbusiness.

The Company had no operational revenues during theyear ended 31st March 2017 and had a very insignificant net loss for the year.

Greatful Mercantile Private Limited India

Greatful Mercantile Private Limited a wholly ownedsubsidiary of your Company is a company engaged in activities that include beingdistributors agents traders merchants contractors brokers and otherwise deal inmerchandise and articles of all kinds including clearing agents freight contractorsforwarding agents licensing agents general brokers and to carry any kind of commercialbusiness.

The Company had no revenues from operations during theyear ended 31st March 2017 and had a very insignificant net loss for the year.

Lunkar Finance Private Limited

Lunkar Finance Private Limited is a step-downsubsidiary of your Company. Sanskar Dealcom Private Limited and Greatful MercantilePrivate Limited hold the entire paid-up capital of this company and hence is a step-downsubsidiary of your Company. It is a non-deposit taking NBFC which is involved ininvestment activities.

The Company had no operational revenues during theyear ended 31st March 2017 and had a very insignificant net loss for the year.

The Company has kept the financial statements alongwith the audit reports of all these subsidiaries open for inspection at the registeredoffice of the Company. Further the Company will provide a copy of the financialstatements to any shareholder who asks for it.

As required under the Section 129(3) of Companies Act2013 and Regulation 34(2) of SEBI (LODR) Regulation 2015 consolidated financialstatements along with the Audit Report of the Statutory Auditors forms a part of thefinancial statements. Further statements pursuant to Section 129(3) of the Companies Act2013 read with rule 5 of Companies (Accounts) Rules 2014 containing the brieffinancials of the subsidiaries in form AOC-1 is attached with this report as Annexure - 4.

At present none of the subsidiaries are materialsubsidiaries. A copy of the policy determining 'material' subsidiaries has been hosted onthe website of the Company at the web link: http://www.rppipl.com/ .

12.Risk Management policy

Risk management is an integral part of the business.The risk management process inter alia provides for a review of the risk assessment andmitigation procedures with timely reporting to the management and review of the identifiedrisks at periodic intervals to assess the progress of the control measures.

The Audit committee of the Board reviews the riskmanagement efforts periodically. The Board has also constituted a Risk

Management Committee. The committee had formulated aRisk Management policy that outlines the different kinds of risks and risk mitigatingmeasures. The major risks are reviewed for the change in their nature and extent since thelast assessment. It also provides control measures for risks and future action plans. YourBoard is satisfied that there are adequate systems and procedures in place to identifyassess monitor and manage risks. The Company believes that the overall risk exposure ofpresent and future risks remains within the risk capacity.

The details about the composition of the RiskManagement Committee policy and its terms of reference have been provided in theCorporate Governance report.

13. Directors and Key Managerial Personnel

Your Board has presently six directors. Detailsincluding profile of the Directors are provided in the Corporate Governance report whichforms a part of the Board report.

During the year three directors resigned from officeand three directors joined the Board. Mr. APC Krisshnamoorthy Independent Directorresigned from the Board w.e.f. 10th August 2017 and Mr. S Swaminathan IndependentDirector and Mr. K. Natarajan Independent Director resigned from the Board w.e.f. 14thNovember 2016. The Board places on record its appreciation for the guidance and servicesprovided by them to the Company.

Mr. K Ranganathan Mr. P R Sundararajan and Mr. K Ravihave been appointed as Independent Directors by the Board for a period of five yearsw.e.f. 14th November 2016. Their appointment is subject to approval of the shareholders atthe forthcoming Annual General Meeting.

Mr. P Arulsundaram (DIN 00125403) Chairman andManaging Director of the Company has been appointed for a period of three years and histerm comes to end on 31st March 2017. The Board on recommendation of the Nomination andRemuneration Committee has appointed him as Chairman and Managing Director of the Companyfor three years w.e.f. 1st April 2017 subject to approval of the members. The remunerationand other terms and conditions would be provided for approval of the members. During histenure he will not be liable to retire by rotation.

Mrs. A Nithya (DIN 00125357) Whole-Time Director andChief

Financial Officer of the Company has been appointedfor a period of three years and her term comes to end on 31st March 2017. The Board onrecommendation of the Nomination and Remuneration Committee has appointed her asWhole-Time Director and Chief Financial Officer of the Company for three years w.e.f. 1stApril 2017 subject to approval of the members. The remuneration and other terms andconditions would be provided for approval of the members. During her tenure she will beliable to retire by rotation.

14. Significant and material orders passed by theregulators courts or tribunals

There are no significant material orders passed by theRegulators/Courts/Tribunals which impact the going concern status of the Company and itsfuture operations.

15. Statement in respect of adequacy of internalfinancial controls with reference to the financial statements

Internal controls

A robust system of internal controls commensuratewith the size and nature of its business forms an integral part of the Company'scorporate governance policies. Internal Audit has been conducted by qualified externalinternal auditors. Findings of the internal audit report are reviewed by the managementand the report of internal auditor is placed before the Audit Committee and properfollow-up action are ensured wherever required. The Statutory Auditors have evaluated thesystem of internal controls of the Company and have reported that the same are adequateand commensurate with the size of the Company and nature of its business.

Internal financial controls

As per Section 134(5)(e) of the Companies Act 2013the Directors have an overall responsibility for ensuring that the Company has implementedrobust systems and frameworks of internal financial controls.

These include those policies and procedures that:

i. Pertain to the maintenance of records which inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the Company.

ii. Provide reasonable assurance that transactions are

recorded as necessary to permit the preparation of thefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures are being made only in accordance with authorizations of themanagement and the Directors of the Company and

iii. Provide reasonable assurance regarding preventionor timely detection of unauthorized acquisitions use or disposition of assets that canhave a material effect on the financial statements.

This provides the Directors reasonable assuranceregarding the adequacy and operating effectiveness of controls with regards to reportingoperational and compliance risks to enable them to meet these responsibilities. TheCompany has devised appropriate systems and frameworks including proper delegation ofauthority policies and procedures effective IT systems aligned with businessrequirements internal audit frameworks risk management frameworks and whistle blowermechanisms.

The Audit committee regularly reviews the internalcontrol system to ensure that it remains effective and aligned with business requirementswhere weaknesses are identified as a result of the reviews and new procedures are put inplace to strengthen controls. These are in turn reviewed at regular intervals.

The Company has developed a framework for designingand assessing effectiveness of internal controls over financial reporting and has alreadylaid down entity-level policies and process-level standard operating procedures.

The entity-level policies comprise anti-fraud policies(code of conduct including conflict of interest confidentiality and whistle blowerpolicy) and other policies (organizational structure roles and responsibilities insidertrading policy related party policy prevention of sexual harassment policy riskmanagement policy policy for materiality of information or events and policy forpreservation of documents). The Company has also prepared standard operating practices foreach of its processes of revenue to receive procure to pay hire to retire finance andaccounts fixed assets treasury inventory operations and administrative expenses.

The management assessed the effectiveness of theinternal financial controls over the financial reporting as of 31st March

2017 and the Board believes that the controls areadequate.

16. Deposits

The Company has not accepted any deposits from membersor the public in terms of Section 73 or Section 76 of the Companies Act 2013.

17. Declaration by Independent Director

The Independent Directors have submitted thedeclaration of independence stating that they meet the criteria of independence asprovided under Section 149(6) of the Companies Act 2013.

18. Receipt of any commission by ManagingDirector/Whole-Time Director from the Company or receipt of commission/ remuneration fromsubsidiary

The Managing Director/Whole-Time Director are not inreceipt of any commission from the Company or any commission/ remuneration from anysubsidiary.

19. Independent Auditor

The shareholders of the Company at the Annual GeneralMeeting held on 9th September 2016 appointed M/s. Sundaram & Narayanan CharteredAccountants (ICAI Firm Regn. No. 004204S) as Statutory Auditors of the Company for aperiod of five years and their term of office is till the conclusion of the 26th AGM in2021. Based on the recommendation of the Audit Committee the Board places a ratificationof appointment of M/s. Sundaram & Narayanan Chartered Accountants at the ensuingAnnual General Meeting.

20. Cost Auditor

As per the requirement of Section 148 of the CompaniesAct 2013 the Board of Directors on the recommendation of the Audit Committee hasappointed Mr. R Gopal Cost Accountant as Cost Auditor to audit the cost accounts of theCompany for the financial year 2016-17 at a remuneration of H350000/- (Rupees three lakhfifty thousand) plus service tax applicable and reimbursement of out-of-pocket expenses.As required under the Companies Act 2013 a resolution seeking member's approval for theremuneration payable to the Cost Auditor forms a part of the Notice convening the AnnualGeneral Meeting.

21. Secretarial Audit report

As per the provisions of Section 204 of the CompaniesAct 2013 the Board of Directors has appointed Mr. Gouri Shanker Mishra PracticingCompany Secretary (C.P. No: 13581) as Secretarial Auditor to conduct the SecretarialAudit of the Company for the financial year ended on 31st March 2017.

The Secretarial Audit report issued by Mr. GouriShanker Mishra Practicing Company Secretary in form MR-3 pursuant to Section 204(1) ofthe Companies Act 2013 and Rule 9 of the Companies (Appointment and RemunerationPersonnel) Rules 2014 has been enclosed with this report as Annexure - 5.

There were no qualifications reservations or adverseremarks made by the Secretarial Auditor in the Secretarial Audit report.

22. Auditors' report

The Auditor's report is attached with the financialstatements of the Company both standalone and consolidated. There are no qualificationsor reservations or remarks made by the Statutory Auditors in their Standalone Auditreport. Further there are no qualifications or reservations or remarks made by theAuditors in their Consolidated Audit report. However the Auditor has made a disclaimerthat out of the five subsidiaries and one branch the interim financial statements andother financial information of only three subsidiaries have been audited by otherauditors whose reports have been derived from such interim financial statements and arebased solely on the report of such other auditors. The same is self-explanatory. Thereport further contains a disclaimer that in respect of the financial statements of twooverseas subsidiaries R.P.P Infra Overseas PLC Mauritius and R.P.P Infra Projects(Lanka) Limited and one branch of R.PP Infra Projects Limited in Sri Lanka the auditedstatements were not made available at the time of consolidation and reliance has beenentirely placed by them on the certificate by the management. Your Board would like toclarify that the accounts of both overseas subsidiaries and the branch in Sri Lanka havebeen audited and does not contain any qualification/reservation. Due to some logisticsproblem the same could not be provided to the Statutory Auditor at the time of the audit.

23. Audit committee

As required under Section 177 of Companies Act 2013and

SEBI (LODR) Regulations 2015 the Company hasconstituted an Audit committee. The details about composition of the Audit committee andits terms of reference have been provided in the Corporate Governance report.

There were no such incidences where the Board has notaccepted the recommendations of the Audit committee during the year.

24. Corporate Social Responsibility (CSR) policy

The Board of Directors of the Company have constituteda Corporate Social Responsibility committee and adopted a policy for Corporate SocialResponsibility. The committee defines the parameters and would observe them for theeffective discharge of social responsibilities of your Company.

A report on Corporate Social Responsibility includingdetails as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014is enclosed with this report as Annexure - 6.

25. Nomination and Remuneration committee

The Company strongly believes that its human resourcehas infinite potential and therefore their development is the key to organizationaleffectiveness. We commit ourselves to integrate human resources with organizational growthand development for mutual benefit. The Nomination and Remuneration policy has beenformulated in compliance with Section 178 and other applicable provisions of the CompaniesAct 2013 read with the applicable rules thereto and the provisions of SEBI (LODR)Regulations 2015.

The details about the composition of the Nominationand Remuneration Committee Nomination and Remuneration Policy and other terms andconditions as required under Section 178 including its terms of reference have beenprovided in the Corporate Governance report forming a part of the Directors' report.

26. Performance evaluation

Pursuant to provisions of the Companies Act 2013 andSEBI (LODR) Regulations 2015 the Board has carried out an annual performance evaluationof its own performance the Directors individually including Independent Directors aswell as the evaluation of the working of its committees i.e. Audit

and Nomination & Remuneration committees.

A structured format was prepared to rate after takinginto consideration inputs received from Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its committees Boardculture and execution and performance of specific duties obligations and governance.

A separate exercise was carried out to evaluate theperformance of Independent Directors. The performance evaluation of Independent Directorswas carried out by the entire Board. The performance evaluation of the Chairman and theNon-Independent Directors was carried out by the Independent Directors.

The mechanism for the evaluation of the Board is givenin detail in the Corporate Governance report.

27. Disclosure on establishment of a vigil mechanism

The Board of Directors has adopted a Whistle Blowerpolicy. The policy aims for conducting the affairs in a fair and transparent manner byadopting the highest standards of professionalism honesty integrity and ethicalbehaviour. Directors and all permanent employees of the Company are covered under theWhistle Blower policy. A mechanism has been established for Directors/employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of the code ofconduct and ethics. It also provides for adequate safeguards against the victimization ofDirectors/employees who avail of the mechanism and allows direct access to the Chairpersonof the Audit committee in exceptional cases. A copy of the Whistle Blower policy is alsohosted on the website of the Company.

28. Corporate Governance

As per Schedule V of SEBI (LODR) Regulations 2015 aseparate section on corporate governance practices followed by the Company report onCorporate Governance together with a certificate confirming compliance and CEO/CFOcertificate by the Managing Director and Chief Financial Officer forms an integral part ofthis Directors' Report.

29. Managerial remuneration

Disclosures pursuant to Rule 5 of Companies(Appointment

and Remuneration of Managerial Personnel) Rules 2014have been enclosed with this report as Annexure - 7.

30. Disclosures under Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013

The Company has adopted a policy on prevention ofsexual harassment of women at the workplace in accordance with the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and has also createdan Internal Complaints Committee headed by Mrs. A Nithya Whole Time Director and ChiefFinancial Officer of the Company who directly reports to the Chairman & ManagingDirector. During the financial year ended 31st March 2017 the Company has not receivedany complaints pertaining to sexual harassment. A copy of the policy on sexual harassmentis also hosted on the website of the Company.

31. Management Discussion and Analysis report

As per Regulation 34(3) and Schedule V of SEBI (LODR)Regulations 2015 a separate section on Management Discussion and Analysis report formsan internal part of the Directors' Report.

32. Directors responsibility statement

In accordance with the provisions of Section 134(5) ofthe Companies Act 2013 your Directors confirm that:

a) In the preparation of the annual accounts for thefinancial year ended 31st March 2017 the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;

b) The Directors had selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at31st March 2017 and of the profit/loss of the Company for that period;

c) The Directors had taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthe Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on agoing concern basis;

e) The Directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.

f) The Directors had laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively.

33. Transfer to Investor Education and Protection Fund

The Company does not have any dividend remainingunclaimed by the members of the Company for a period exceeding 7 years. Hence no amountwas transferrable to the Investor Education and Protection Fund.

34. Acknowledgment

Your Directors take this opportunity to offer theirsincere thanks to all stakeholders including the various departments of the central andstate governments government agencies banks financial institutions shareholderscustomers and employees who through their continued support and cooperation have helped inyour Company's progress.

For and on behalf of the Board of Directors

P Arulsundaram
Place: Erode Chairman & Managing Director
Date: 29th May 2017 DIN 00125403