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SORIL Infra Resources Ltd.

BSE: 532679 Sector: Others
NSE: SORILINFRA ISIN Code: INE034H01016
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OPEN 109.80
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VOLUME 17421
52-Week high 227.35
52-Week low 68.25
P/E 169.37
Mkt Cap.(Rs cr) 336
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 109.80
CLOSE 111.45
VOLUME 17421
52-Week high 227.35
52-Week low 68.25
P/E 169.37
Mkt Cap.(Rs cr) 336
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SORIL Infra Resources Ltd. (SORILINFRA) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the Fifteenth Annual Report together withaudited financial statement of SORIL Infra Resources Limited ("the Company") forthe financial year ended March 31 2020.

The financial year 2019-20 saw the COVID-19 pandemic further add to the economicheadwinds that the Indian economy has been facing. The pandemic is expected tosubstantially impact domestic and global growth and worsen geopolitical uncertainties.

FINANCIAL HIGHLIGHTS

The highlights of the financial results of the Company for the financial year endedMarch 31 2020 are as under:

Particulars For the Financial Year ended March 31 2020 For the Financial Year ended March 31 2019
Profit before tax and depreciation 189984338 347053297
Less: Depreciation and amortisation 238839922 196485247
(Loss)/Profit before tax (48855584) 150568050
Less: Prior period tax adjustments - -
Less: Current period tax adjustments - 465732
(Loss)/Profit after tax (48855584) 150102318
Add: Other Comprehensive Income 2257038 6544805
Add: Adjustment of transition of Ind AS 116 1512715 -
Add: Brought forward Losses (1344224166) (1497645103)
Amount available for appropriation (1389309997) (1340997980)
Less: Appropriations:
Proposed dividend on preference shares 2676105 2676105
Corporate dividend tax thereon 550081 550081
Balance carried forward to Balance Sheet (1392536183) (1344224166)

The Board has not proposed to transfer any amount to any reserve(s).

BUSINESS OVERVIEW

The Company endeavours to create sustainable business for the benefit of itsstakeholders. Currently directly and through its subsidiaries the Company is engaged inthe businesses of equipment renting services LED lighting financing & relatedactivities management and maintenance services etc.

During the year under review business operations of the Company were progressive. TheCompany established distribution channels of LED Lighting business across the countrycompleted the first full year of operations of the financial services business andperformed reasonably well in equipment renting services during a tough year for the realestate and infrastructure sectors inflicted by the credit crisis.

Your Directors believe that all these businesses have huge potential and the Companyshall focus on two core aspects of its businesses as we sail through these unprecedentedtimes:

1) Ensuring that all business operations are gradually restored while supporting allstakeholders - employees supply chain partners and customers.

2) Focusing on triggering the next wave of business growth through an innovative andcompetitive approach towards products and services.

The Board has geared itself to navigate the challenges posed by Covid-19. The Companyis focused in capital preservation balance sheet protection and operating expensesmanagement.

The Company has made a detailed impact assessment of the pandemic based on internal andexternal information available (up to the date of approval of financial results) of itsliquidity position recoverability and carrying values of receivables and other assetsincluding financial assets. It has accordingly made provisions or impaired assets whereverrequired and accounted for it in the financial books. The impact assessment of Covid-19 isan on-going process and the Company will continue to monitor any material changes.

The management teams of the respective businesses regularly assess policy and programsof the economy to evaluate the impacts on income operating costs productivitycompetitiveness and sustainability.

SEGMENT WISE BUSINESS REVIEW

Equipment renting services branded as "Indiabulls Store One" The Company ispioneer in the field of equipment rental solutions in India. Primary equipment in therental fleet are tower cranes passenger hoists piling rigs excavators dozers motorgraders wheel loaders mobile boom placers transit mixers dumpers steel stir-upmachines concrete batching plants. All equipment is of reputed international & Indianmanufactures.

Indiabulls store one is working with most of the reputed corporate infrastructurecompanies and providing them end to end solutions in operations and maintenance of rentalequipment. The business operates from offices in Mumbai Gurgaon Kolkata HyderabadBangalore Ahmedabad Pune and Chennai. Its pan India presence helps to provide seamlessservices to customers and gives competitive advantage in the market. The professional teammanaging the business has vast experience and is committed to providing the best customerservice.

Renting division started with sales and service of aerial work platform in financialyear 2020 and received encouraging orders from eclectic customers. We are initiallytrading in electric scissor lifts diesel scissor lifts articulated boom lifts andtelescopic booms. We shall be gradually adding more variants of machines required by theconstruction and infrastructure sector. Aerial work platform equipment segment has hugepotential in manufacturing warehousing airports power ports and metro. The productsoffered by the Company are of highest safety standards and comply with European standards.

We are currently serving industry segments such as real estate precastinfrastructure metro cement mining petroleum refinery piling industrial and road.Our endeavour is to expand the customer base into new segments such as airports steelpower and ports. This will further strengthen our position as a leading equipmentsolution provider in the country.

During the year end the renting division had a revenue of Rs 75.37 crores which is adecrease of 11.32% in reference to the previous year primarily due to management adoptingstricter credit controls policy in view of the liquidity position in the market.

We continue to pursue excellence in following areas:

• Customised leasing and rental solutions

• Ability to swiftly mobilise and execute projects across the country

• Design and execution capabilities to handle complex projects

• Professional team to manage O&M activities at project sites

• Highest safety standards

• Higher availability and reliability of rental machines which helps customers toexecute projects faster

Your company is fully poised to take advantage of government investment in theinfrastructure sector. In Union Budget 2020-21 the Government has given a massive push tothe infrastructure sector by allocating Rs 1.82 lacs crore (US$ 24.27 billion) to enhancethe transport infrastructure. The logistics sector in India is growing at 10.5% annuallyand is expected to reach Rs 16.13 lacs crores (US$ 215 billion) in 2020.

India is expected to become the third largest construction market globally by 2022.India has a investment requirement of Rs 58.32 lacs crores (US$ 777.73 billion) towardsinfrastructure by 2022 for a sustainable development in the country.

In April 2020 the government set a target of constructing roads worth Rs 15.96 lakhcrore (US$ 212.80 billion) in the next two years. Rs 2.39 lacs crores ( US $ 31.81billion)will be invested in smart cities mission.

We are optimistic that the pandemic will prove to be a watershed moment in equipmentrenting demand as the government will be compelled to work on a very strict monitoringmechanism of infrastructure projects implementation to restore the GDP growth of at least9% in the near future.

LED lighting branded as "Ib LED"

Indiabulls LED has created an exciting story in institutional and consumer LED Lightingsegments in India with primary focus to provide reliable sustainable and technologicallyadvanced LED lighting products to Indian consumers and institutional buyers. All productsare designed developed and manufactured in India.

Having successfully positioned itself in the first two years of operations IndiabullsLED completed the third year with a comprehensive product range creating reach andpresence in pan India markets. The revenue of Rs 68.24 crores in the current year is anincrease by 46.72% as compared to the previous year.

Business strategy has been to establish the distribution network across the country.The vision of the Company is to establish itself in the consumer product segments throughLED Lights and scale up the operations to other products at the appropriate time.

The lighting division possesses one of the best talent pools in the LED Industry inR&D development design supply chain management and sales functions. We aredetermined to offer appropriate lighting solutions with an underlying emphasis on"Lights that understand you"

The Company has state of the art contract manufacturing facilities located in Mumbairegion Daman Hyderabad Baddi and Bangalore and has set up a technologically advancedLighting Innovation Centre in Mumbai which aspires to be the best in class in theindustry.

Our growth drivers:

• Very active centre of excellence in product innovation adapting newtechnologies and providing cost effective LED lighting solutions to customers.

• Presence in over 150 town/cities of India through 300 channel partners and morethan 9000 retailer points for customers and consumers.

• Consistency of quality. We shall continue to adopt the best practices forproduct reliability. We are an ISO 9001:2015 certified Company.

• Delivering on customer service as per promise.

Customers

In the previous year the team had many celebrations on winning prestigious accounts.We shall strive to grow further in IT / ITES banking and financial institutions realestate manufacturing pharmaceutical industries and infrastructure project space in theinstitutional LED segment and service residential consumers through the consumer LEDsegment.

Financing & related activities branded as "Indiabulls Rural Finance"

The Company forayed into financial services business in financial year 2019 byacquiring 100% stake in Littleman Fiscal Services Limited a Non-Banking Finance Companyregistered with RBI. Subsequently the name of the company was changed to Indiabulls RuralFinance Private Limited on 24th April 2019.

The NBFC was acquired on 25th January 2019. Upon acquisition we started operations andin a short span of time the management proved its profound capabilities by establishing24 branches; recruiting 285 employees; implementing new age loan origination andmanagement system; and building a loan portfolio of Rs 235.45 crores comprising 3200clients with very insignificant NNPA. We had above average profitability in first year ofoperations. The Company has a capital adequacy ratio of 59.88% and networth of Rs 123.96crores as on March 20.

The Company shall continue to perform and transform credit delivery by virtue of itspeople technology and understanding of customer profile.

The Company is focused on providing largely secured term loans to MSME small businessand traders for business purposes. We will also offer home loans in affordable and lowticket size categories largely to the MSME sector employees and business owners in TierII and Tier III cities who are drivers of economic growth in the country.

Brief overview of MSME sector:

The Micro Small and Medium Enterprises (MSMEs) Sector contributes significantly to theIndian Economy in terms of GDP in exports and generating employment.

MSME Units (#) Jobs created Contribution to exports % of GDP
6.34 crores 12 crores 48.10% of total exports 30.74% of the GDP

The MSME sector has consistently maintained a growth rate of over 10%. About 20% of theMSMEs are based in rural areas which indicates a significant rural workforce in the MSMEsector and exhibits the importance of these enterprises in promoting sustainable andinclusive development. (Source: CII Website)

Particulars Micro Small Medium Total
Debt demand 1332000 2457000 375000 4164000
Debt Supply 1168000 1168000
Debt gap 2996000 2996000
Debt Demand Growth Debt Demand- sector wise
21% CAGR 47% Manufacturing
53% service sector

(Data Source: marketreportsonindia.com)

The Company shall pursue the above opportunity and is confident in ability tocapitalise on the present NBFC environment through its approach to business and abrestnesson governance of rural economies and MSME credit policies.

Management and maintenance services:

The Company has developed expertise in all avenues of management and maintenance ofproperties. The Company currently manages and maintains residential properties in Mumbaiand NCR for which the revenue was Rs 24.76 crores.

To streamline the operations and ownership structure of the Company in a mannerleading to maximization of stakeholders' value and diversification of shareholders'portfolio by providing them direct ownership in each business segments the Board ofDirectors of the Company has approved the composite Scheme of Arrangement amongst theCompany its holding company Indiabulls Integrated Services Limited ("IBULISL")and their subsidiaries (viz Albasta Wholesale Services Limited Sentia PropertiesLimited Lucina Infrastructure Limited Ashva Stud and Agricultural Farms LimitedMahabala Infracon Private Limited Store One Infra Resources Limited IndiabullsEnterprises Limited and Indiabulls Pharmacare Limited) and Indiabulls PharmaceuticalsLimited and their respective shareholders and creditors ("Scheme"). Pursuant tothe Scheme the shareholders of the Company will get shares of Indiabulls EnterprisesLimited free of any cost in lieu of their shareholding in the Company. The publicshareholders of the Company in lieu of their shareholding in the Company will also getthe benefit of having the direct ownership in the life and non-life insurance businessesbeing carried out under IBULISL.

Pursuant to the Scheme the public shareholders of the Company will get extra shares ofIBULISL free of any cost in lieu of their shareholding in the Company. With this posteffectiveness of the Scheme they will have shares of two listed entities -

(1) IBULISL shares of which are listed on NSE and BSE focusing on insurance andrelated businesses and

(2) Indiabulls Enterprises Limited shares of which will be listed on NSE and BSEfocusing on non-insurance businesses of the Company and of IBULISL and their subsidiaries(including proposed pharma business and rural finance business).

Your directors are pleased to inform that during FY 2019-20 the Company had receivedNOCs (observation letters) from the National Stock Exchange of India Limited and BSELimited and have filed the Scheme and Company Application under Section 230 to 232 ofthe Companies Act 2013 and Companies (Compromises Arrangements and Amalgamations) Rules2016 before jurisdictional bench of NCLT.

DIVIDEND

In view of the accumulated losses and for business requirements of the Company yourDirectors do not recommend any dividend for the FY 2019-20.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the FY 2019-20 in compliance with the applicable provisions of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 Mrs. SupriyaBhatnagar (DIN: 08731453) was appointed as an Non-executive Independent Woman Director(Additional Director) on the Board of the Company for a period of two years w.e.f. March31 2020.

Further subsequent to the year end w.e.f. August 28 2020 Mr. Munish Taneja (DIN:08851660) has been appointed as Whole-time Director (Additional Director) and KeyManagerial Personnel of the Company designated as Executive Director for a period offive years on such remuneration as detailed in the Notice convening the 15th AnnualGeneral Meeting of the Company.

Being Additional Directors Mr. Munish Taneja and Mrs. Supriya Bhatnagar hold officeas such upto the date of ensuing Annual General Meeting. Keeping in view their skill setsunique planning execution management and administration capabilities the Boardrecommends appointment of

(a) Mr. Munish Taneja as Whole-time Director and Key Managerial Personnel of theCompany designated as Executive Director liable to retire by rotation for a period offive years w.e.f. August 28 2020;

(b) Mrs. Supriya Bhatnagar as an Independent Director of the Company not liable toretire by rotation for a term of two years w.e.f. March 31 2020. In the opinion of theBoard they are persons of integrity and possess requisite skills for discharging theirduties as such. Keeping in view the experience and knowledge of Mr. Taneja and Mrs.Bhatnagar the Board is of the view that their appointment as such will be in the interestof the Company.

Upon getting approval of the shareholders for appointment of Mrs. Bhatnagar as anIndependent Director her appointment shall be formalized by issuing a letter ofappointment to her which shall be open for inspection by the members at the registeredoffice of the Company in terms of applicable provisions of the Companies Act 2013.

Further Mr. Divyesh Bharatkumar Shah Non-executive Director (DIN: 00010933) resignedfrom the directorship of the Company w.e.f. August 28 2020. The Board places on recordits appreciation for the contribution made by him during his tenure on the Board of theCompany.

In accordance with Section 152 of the Companies Act 2013 and rules framed thereunderand in terms of the Articles of Association of the Company Mrs. Sargam Kataria (DIN:07133394) Non-Executive Director retire by rotation and being eligible offer herselffor re-appointment at the ensuing the Annual General Meeting. The Board of Directorsrecommends her re-appointment.

The matter relating to appointment/ re-appointment of aforementioned directors havebeen included in the Notice convening the 15th Annual General Meeting of the Company. Thebrief resume of the Directors proposed to be appointed/ reappointed nature of theirexpertise in specific functional areas and name of the Companies in which they holddirectorships and memberships/chairmanships of Board Committees and other requisiteinformation are provided in the Notice convening the 15th Annual General Meeting of theCompany.

All the present Independent Directors of the Company have given declaration that theymeet the Criteria of Independence laid down under Section 149(6) of the Companies Act2013.

SHARE CAPITAL/ STOCK OPTIONS

The paid up equity share capital of the Company as on March 31 2020 was Rs315000000 comprising of 31500000 equity shares of Rs 10/- each. An aggregate of4500000 stock options granted under Company's ESOP Schemes were in force as on March31 2020 which shall be exercisable as per the vesting schedule of respective ESOPSchemes. Presently stock options granted to the employees operate under the schemesnamely; 'SORIL Infra Resources Limited Employee Stock Option Scheme - 2009' and 'SORILInfra Resources Limited Employee Stock Option Scheme - 2009(II)' (hereinafter individuallyand/or collectively referred to as the "Scheme(s)").

Further pursuant to and in terms of shareholders' authorization dated February 5 2020the Company in accordance with Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 as amended from time to time (hereinafter referredto as "SBEB Regulations") has set up an employees welfare trust titled"SORIL Infra Resources Limited- Employees Welfare Trust" (the "Trust")to efficiently manage the "Scheme(s)" and to acquire purchase hold and deal infully paid-up equity shares of the Company from the secondary market for the purpose ofadministration and implementation of the Scheme as may be permissible under the SBEBRegulations. Since shares issued on account of exercise of options granted/to be grantedunder the Scheme will be out of those purchased by the Trust from the secondary marketthere will be no dilution in shareholding.

The disclosures required to be made under Securities and Exchange Board of India (ShareBased Employee Benefits) Regulation 2014 and the Companies Act 2013 read with Rule 12 ofthe Companies (Share Capital and Debentures) Rules 2014 in respect of Schemes of theCompany have been placed on the website of the Company www.sorilinfraresources. com.

PUBLIC DEPOSITS

During the year under review the Company has not accepted any deposits from thepublic falling within the ambit of Chapter V of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 therefore the disclosures required in terms of Rule8 of the Companies (Accounts) Rules 2014 are not required to be given.

LISTING WITH STOCK EXCHANGES

The Equity Shares (ISIN:INE034H01016) of the Company continue to remain listed at BSELimited and National Stock Exchange of India Limited. The listing fees payable to both theexchanges for the financial year 2020-21 have been paid.

AUDITORS

(a) Statutory Auditors

M/s Agarwal Prakash & Co. (Firm Registration No. 005975N) the Statutory Auditorsof the Company were re-appointed by the members at their Fourteenth Annual GeneralMeeting held on September 30 2019 for a period of five years i.e. until the conclusionof the Nineteenth Annual General Meeting of the Company. The Ministry of Corporate Affairs(MCA) vide its notification no. S.O. 1833(E) dated May 7 2018 has done away with therequirement of getting the appointment of the Statutory Auditors ratified at every AnnualGeneral Meeting and therefore no such ratification is being sought at ensuing AnnualGeneral Meeting of the Company The Auditors' Report forming part of this Annual Report isself-explanatory and therefore do not call for any further explanation. The Auditors'Report does not contain any qualification reservation adverse remark or disclaimer. Nofrauds have been reported by the Auditors of the Company in terms of the provisions ofSection 143(12) of the Companies Act 2013 and Rules framed thereunder.

(b) Secretarial Auditors & Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theRules made thereunder the Company has appointed M/s NP Gupta & Associates a firm ofCompany Secretaries in practice as its Secretarial Auditors to conduct the secretarialaudit of the Company for the Financial Year 2019-20. The Company has provided allassistance facilities documents records and clarifications etc. to the SecretarialAuditors for conducting their audit. The Secretarial Audit Report along with SecretarialCompliance Report as prescribed by SEBI for the Financial Year 2019-20 are annexed asAnnexure 1(i) and Annexure 1(ii) respectively and forms part of this Report. The Reportsare self - explanatory and therefore do not call for any further explanation. TheSecretarial Audit Report of the unlisted material subsidiary is annexed as Annexure 2. TheSecretarial Audit Report of the Company and this subsidiary does not contain anyqualification reservation or adverse remark or disclaimer.

CORPORATE SOCIAL RESPONSIBILITY

As part of its initiatives under "Corporate Social Responsibility (CSR)" theCompany has undertaken projects as per its CSR Policy (available on Company's website atweb-link: https://www.sorilinfraresources.com/files/1575020422.pdf) and the details arecontained in the Annual Report on CSR Activities given in Annexure 3 forming part of thisReport. These projects are in accordance with Schedule VII of the Companies Act 2013read with the relevant rules.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the SEBI LODR Management Discussion and Analysis Reportfor the year under review is presented in a separate section forming part of this AnnualReport.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 of the SEBI LODR a separate section on Corporate Governancepractices followed by the Company together with a certificate from a Practicing CompanySecretary confirming compliance is presented in a separate section forming part of thisAnnual Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013:

a) that in the preparation of the annual financial statements for the year ended March31 2020 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;

b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2020 and the profit and loss of the Company for the yearended on that date;

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

d) the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls are in place and that such financialcontrols are adequate and are operating effectively; and

f) that systems to ensure compliance with the provisions of all applicable laws are inplace and are adequate and operating effectively.

EXTRACT OF ANNUAL RETURN

In terms of Sections 92(3) and 134(3) of the Companies Act 2013 and rules framedthereunder Extract of the Annual Return for the Financial Year ended 31st March 2020 isannexed as Annexure 4 forming part of this Report and is also available at website of theCompany at web-link: https://www.sorilinfraresources.com/files/157502020.pdf

BOARD MEETINGS

During the FY 2019-20 4 (Four) Board Meetings were convened and held. The details ofsuch meetings are given in Corporate Governance Report forming part of this Annual Report.The intervening gap between these meetings was within the period prescribed under theCompanies Act 2013. The notice and agenda including all material information and minimuminformation required to be made available to the Board under Regulation 17 read withSchedule II Part A of the SEBI LODR were circulated to all directors well within theprescribed time before the meeting or placed at the meeting with the consent of majorityof Directors (including one Independent Director). During the year separate meeting ofthe Independent Directors was held on February 14 2020 without the presence ofNon-Independent Directors and the members of the Company Management.

PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND DIRECTORS

The Nomination & Remuneration Committee (NRC) of the Board reassessed theframework methodology and criteria for evaluating the performance of the Board as awhole including Board committee(s) as well as performance of each director(s) andconfirms that the existing evaluation parameters are in compliance with the requirementsas per SEBI guidance note dated January 5 2017 on Board evaluation. The existingparameters includes effectiveness of the Board and its committees decision makingprocess Directors/members participation governance independence quality and content ofagenda papers team work frequency of meetings discussions at meetings corporateculture contribution and management of conflict of interest. Basis these parameters theNRC had reviewed at length the performance of each director individually and expressedsatisfaction on the process of evaluation and the performance of each Director. Theperformance evaluation of the Board as a whole and its committees as well as theperformance of each director individually was carried out by the entire Board ofDirectors. The performance evaluation of the Non-Independent Directors and the Board ofDirectors as a whole was carried out by the Independent Directors in their meeting heldon February 14 2020. The Directors expressed their satisfaction with the evaluationprocess.

Also the Executive Director of the Company on a periodic basis has had one-to-onediscussion with the directors for their views on the functioning of the Board and theCompany including discussions on level of engagement and contribution independence ofjudgment safeguarding the interest of the Company and its minority shareholders andimplementation of the suggestions offered by Directors either individually or collectivelyduring different board/ committee meetings.

REMUNERATION POLICY

The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration on recommendation of Nomination and RemunerationCommittee. The Remuneration Policy is briefly stated in the Corporate Governance Reportforming part of this Annual Report and is also available at the website of the Company atweb-link: https://www.sorilinfraresources.com/files/1575020280.pdf

LOANS GUARANTEES OR INVESTMENTS

During the FY 2019-20 in terms of the provisions of Section 186(1) of the CompaniesAct 2013 the Company did not make any investments through more than two layers ofinvestment companies.

The Company's investment/loans/guarantees during FY 2019-20 were in compliance with theprovisions of Section 186 of the Companies Act 2013 particulars of which are captured infinancial statements of the Company forming part of this Annual Report.

RELATED PARTY TRANSACTIONS

During the year no materially significant related party transaction was entered by theCompany with its Promoters Key Managerial Personnel or other designated persons which mayhave potential conflict with the interest of the Company at large. Details of all relatedparty transactions are disclosed in the financial statement of the Company forming part ofthis Annual Report. None of the transactions with related parties is material transactionand/or transaction which is not at Arm's length requiring disclosure pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.Therefore the information required in prescribed form AOC - 2 is not applicable. ThePolicy on materiality of Related Party Transactions and also on dealing with suchtransactions is available on the website of the Company at web-link:https://www.sorilinfraresources.com/files/1589435017.pdf

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an elaborate system of internal controls commensurate with the sizescale and complexity of its operations; it also covers areas like financial reportingfraud control compliance with applicable laws and regulations etc. Regular internalaudits are conducted to check and to ensure that responsibilities are dischargedeffectively. The Internal Audit Department monitors and evaluates the efficacy andadequacy of internal control systems in the Company its compliance with regulatorydirectives efficacy of its operating systems adherence to the accounting procedures andpolicies. Wherever required the internal audit efforts are supplemented by auditsconducted by specialized consultants/audit firms. Based on the reports of the InternalAuditors process owners undertake corrective actions in their respective areas andthereby strengthen the controls.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed in this report there are no material changes and commitmentsaffecting the financial position of the Company which has occurred between the end of theFinancial Year of the Company i.e. March 31 2020 and the date of this Report.

Further no significant and material orders were passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo is as under:

A. Conservation of Energy

The Company operations do not account for substantial energy consumption. However theCompany is taking all possible measures to conserve energy.

As an ongoing process the followings are

(i) the steps taken or impact on conservation of energy;

(ii) the steps taken by the company for utilising alternate sources of energy; and

(iii) the capital investment on energy conservation equipment:

The Company continues to explore collaboration with contractors/partners that ensureconservation of energy and resources. The Company also undertake all necessary steps toconserve energy at its offices and business operations / projects / sites etc. The Companyhas been able to reduce energy consumption by using star rated appliances where possibleand also through the replacement of CFL lights with LED lights. Some of the stepsundertaken for the conservation of energy are

(a) using energy saving LED light fixtures at all of its offices/sites etc by replacinglighting system with LEDs

(b) installation of star energy conservation air conditioning systems

(c) installation of automatic power controllers to save maximum demand charges andenergy

(d) installation of TFT monitors that saves power

(e) usage of advance latest technology products machines equipment techniques and

(f) periodic training sessions for employees on ways to conserve energy in theirindividual roles.

The Company continuously aims to reduce the impact on environment by optimizing theusage of various resources. The Company will explore solar energy as alternate source ofenergy to meet the energy demands wherever possible.

B. Technology Absorption

The Company has implemented best of the class infrastructure to manage its businessprocesses to achieve higher efficiency. It has helped it in implementing best businesspractices and customer services at reduced operational costs.

I. The efforts made towards technology absorption:

The Company is investing in cutting edge technologies to upgrade its infrastructure setup and innovative technical solutions thereby increasing customer satisfaction &employee efficiency. The Company's endeavored is to use upgraded advance and latesttechnology machines equipment etc which improves customer delight and employeeefficiency. Deployment of upgraded / advanced machines equipment etc to substitute manualwork partly or fully using LED lighting in our office buildings using timers forexternal lighting and basement lighting for switching lights on/off as per peak andnon-peak hours are some further steps towards optimizing the usage of various resources byadopting technology. The Company promotes the use of electronic means of communicationwith its shareholders by sending electronic communication for confirmation of payments andother similar purposes. The Company also encourages the use of electronic mode ofcommunications to and from all its stakeholders. Soft copies of the annual report(s) alongwith the notice convening the Annual General Meeting(s) were sent to its shareholders soas to minimize the usage of paper.

Company's LED business has created an exciting story in institutional and consumer LEDLighting segments in India with primary focus to provide reliable sustainable andtechnologically advanced LED lighting products to Indian consumers and institutionalbuyers. All products are designed developed and manufactured in India. The Company hasstate of the art contract manufacturing facilities located in Mumbai region DamanHyderabad Baddi and Bangalore and has set up a technologically advanced LightingInnovation Centre in Mumbai which aspires to be the best in class in the industry.

Company's equipment renting business also continuously adopt new technologies toachieve better productivity in project execution space.

II. The benefits derived like product improvement cost reduction product developmentor import substitution:

The Company's investment in technology has improved customer services reducedoperational cost and development of new business opportunities. Also there is costreduction in the administration and business operations expense through utilization ofscheduling and planning efficient practices usage of improved advanced and latesttechnology machines equipment etc. Some of the initiatives are: In-depth planningorganising/ scheduling/ structuring the work in tandem with job descriptions to ensureefficiency engaging specialized contractors/ consultants to complete tasks efficientlyintroducing rules and regulations based on national and international standards andinternal classifications monitoring performance at projects and administrative offices.

III. Information regarding imported technology (imported during last 3 years) andExpenditure incurred on Research & Development:

Not Applicable since the Company has not imported any technology or incurred expensesof Research & Development during such period.

C. Foreign Exchange Earnings and Outgo

There were no earnings in the foreign exchange during the year under review theforeign exchange outgo is given in the table below:

Particulars For the year ended March 31 2020 For the year ended March 31 2019
Foreign Exchange Outgo
Purchase of fixed assets and spares and services 6653679 224875730
Purchase of inventory of LED 29098417 16046953
Travelling and conveyance - 654452
Foreign Exchange Earnings
Export sale of LED Lighting - 501840

BUSINESS RISK MANAGEMENT

Pursuant to the applicable provisions of the Companies Act 2013 the Company hasformulated robust Business Risk Management policy to identify and evaluate business risksand opportunities. This policy seeks to create transparency minimize adverse impact onits business objectives and enhance its competitive advantage. It defines the riskmanagement approach across the Company at various levels including the documentation andreporting. At present the Company has not identified any element of risk which maythreaten its existence. The requirement of constituting Risk Management Committee in termsof SEBI LODR is not applicable to the Company.

PARTICULARS OF EMPLOYEES

Pursuant to the applicable provisions of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 disclosures onManagerial Remuneration are provided in Annexure 5 forming part of this Report. In termsof the provisions of Section 136(1) of the Companies Act 2013 read with the said rulesthe Board's Report is being sent to all the shareholders of the Company excluding theannexure on the names and other particulars of employees required in accordance with Rule5(2) of said rules which is available for inspection by the members subject to theirspecific written request in advance to the Company Secretary. The inspection is to becarried out at the Company's Registered Office or at its Corporate Office at Gurugramduring business hours on working days of the Company up to date of ensuing Annual GeneralMeeting.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

Independent Directors are familiarized with their roles rights and responsibilities inthe Company as well as with the nature of industry and business model of the Companythrough presentations about the Company's strategy business model product and serviceofferings customers' & shareholders' profile financial details human resourcestechnology facilities internal controls and risk management their roles rights andresponsibilities in the Company.

The Board is also periodically briefed on the various changes if any in theregulations governing the conduct of Independent Directors. The details of thefamiliarization programs have been hosted on the website of the Company at web-link:https:// www.sorilinfraresources.com/files/1575019101.pdf

SUBSIDIARY COMPANIES

Pursuant to Section 129 of the Companies Act 2013 the Company has prepared itsConsolidated Financial Statements along with its subsidiaries in the same form andmanner as that of the Company which shall be laid before its Fifteenth Annual GeneralMeeting along with its Standalone Financial Statements. The Consolidated FinancialStatements of the Company along with its subsidiaries for the year ended March 31 2020forms part of this Annual Report.

For the performance and financial position of the subsidiaries of the Company alongwith other related information required pursuant to Rule 8(5)(iv) of the Companies(Accounts) Rules 2014 the Members are requested to refer to the Financial Statements ofthe Company. Further pursuant to the provisions of Section 136 of the Act the financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited accounts in respect of subsidiaries are also available on thewebsite of the Company. Shareholders may write to the Company for the annual financialstatements and detailed information on subsidiary companies. Further the documents shallalso be available for inspection by the shareholders at the registered office of theCompany.

NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES OR ASSOCIATECOMPANIES

During the FY 2019-20 none of the companies became or ceased to be the subsidiaries orassociate of the Company.

COMMITTEES OF THE BOARD

The Company has following Board constituted committees which have been established as apart of the best corporate governance practices and are in compliance with therequirements of the relevant provisions of applicable laws and statutes:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholders Relationship Committee

d) Corporate Social Responsibility Committee

The details with respect to composition power role terms of reference etc. of eachof these committees are given in the Corporate Governance Report forming part of thisAnnual Report.

Apart from the above the Board has also constituted Compensation Committee foradministration of stock option scheme(s) Management Committee for operational mattersIssuance Committee for considering issuance of securities and Reorganization Committee foron-going Scheme and reorganization plans.

SECRETARIAL STANDARDS

The Board of Directors state that the Company has complied with the applicableSecretarial Standards (SS-1 and SS-2) respectively relating to Meetings of the Board itsCommittees and the General Meetings as issued by the Institute of Company Secretaries ofIndia.

NUMBER OF CASES FILED IF ANY AND THEIR DISPOSAL UNDER SECTION 22 OF THE SEXUALHARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has zero tolerance towards harassment at the workplace and has compliedwith the provisions and constituted an Internal Complaints Committee and also adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under.

During the financial year 2019-20 no cases of sexual harassment were reported.

APPLICABILITY OF MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013.

VIGIL MECHANISM

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of its business operations. To maintain these standards the Company hasimplemented the Whistle Blower Policy ("the Policy") to provide an avenue foremployees to report matters without the risk of subsequent victimization discriminationor disadvantage. The Policy applies to all employees of the Company. Pursuant to thePolicy the whistle blowers can raise concerns relating to matters such as breach ofCompany's Code of Conduct fraud bribery corruption employee misconduct illegalitymisappropriation of Company's funds / assets etc. A whistle-blowing or reportingmechanism as set out in the Policy invites all employees to act responsibly to upholdthe reputation of the Company. The Policy aims to ensure that serious concerns areproperly raised and addressed and are recognized as an enabling factor in administeringgood governance practices. The details of the Whistle Blower Policy are available on thewebsite: www.sorilinfraresources.com of the Company. The Audit committee set by the Boardconstitutes a vital component of the whistle blower mechanism and instances of financialmisconduct if any are reported to the Audit committee. No employee is denied access tothe Audit Committee.

GREEN INITIATIVES

In terms of General Circular No. 14/2020 dated 8th April 2020 17/2020 dated 13thApril 2020 22/2020 dated 15th June 2020 issued by Ministry of Corporate Affairs andCircular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May 2020 issued by SEBI("Circulars") Electronic copies of the Annual Report 2019-20 and Notice of the15th AGM are being sent to all

the members whose email addresses are registered with the Company / DepositoryParticipant(s). For members who have not registered their email addresses are requested tofollow procedure specified in the AGM Notice to receive soft copies of the Annual Report2019-20 and Notice of the 15th AGM through e-mail.

The Company is providing e-voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice of the 15th AGM. This ispursuant to section 108 of the Companies Act 2013 read with applicable Rules and inaccordance with the SEBI LODR Regulations. The instructions for e-voting are provided inthe AGM Notice. Additionally Insta-poll facility will also be provided to Members at AGMby KFintech to enable casting of vote by such members who have not utilized e-votingmechanism.

ACKNOWLEDGEMENT

Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functional areasand the efficient utilization of all its resources for sustainable and profitable growth.Your Directors wish to place on record their appreciation of the contributions made andcommitted services rendered by the employees of the Company at various levels. YourDirectors also wish to express their gratitude for the continuous assistance and supportreceived from the investors clients bankers regulatory and government authoritiesduring the year.

For and on behalf of the Board of Directors
Anil Malhan Sargam Kataria
Date: October 13 2020 Executive Director Director
Place: Gurugram DIN:01542646 DIN:07133394

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