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Suprajit Engineering Ltd.

BSE: 532509 Sector: Auto
NSE: SUPRAJIT ISIN Code: INE399C01030
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VOLUME 2385
52-Week high 297.85
52-Week low 176.00
P/E 22.62
Mkt Cap.(Rs cr) 2,642
Buy Price 185.00
Buy Qty 40.00
Sell Price 195.00
Sell Qty 125.00
OPEN 188.00
CLOSE 187.40
VOLUME 2385
52-Week high 297.85
52-Week low 176.00
P/E 22.62
Mkt Cap.(Rs cr) 2,642
Buy Price 185.00
Buy Qty 40.00
Sell Price 195.00
Sell Qty 125.00

Suprajit Engineering Ltd. (SUPRAJIT) - Director Report

Company director report

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Your Directors have pleasure in presenting their Thirty Third Annual Report and theAudited Financial Statements for the financial year ended March 312018 together with theIndependent Auditor's Report.

STANDALONE FINANCIAL RESULTS:

Particulars 2017-18 2016-17
Total Income 10107.36 9595.80
Profit before tax 1589.89 1234.87
Less: Provision for taxation 519.26 381.11
Profit after tax before prior period adjustment 1070.63 853.76
Current Tax relation to prior year 24.22 -3.09
Profit after tax 1046.41 856.85
Add: Surplus from last year 1447.47 1255.48
Add: Other Comprehensive income -5.04 -2.07
Profit available for appropriation after adjustments prior period taxes 2488.84 2110.26
APPROPRIATIONS:
1 Final Dividend for 2016-17 - 60% (last year 55%) 83.92 76.93
2 Interim Dividend 60% for 2017-18 (last year interim 50% ) 83.92 69.94
3 Tax on Dividend 22.04 15.92
4 Transfer to General Reserve 700.00 500.00
5 Balance carried to Balance Sheet 1598.96 1447.47

TRANSFER TO RESERVES

During the financial year the Company has transferred an amount of 700 Million toGeneral Reserves.

DIVIDEND:

An Interim Dividend of Re. 0.60 per share of Re. 1/ -each (60%) was declared and paidduring the year under report. In view of the satisfactory financial performance of yourCompany your Directors have pleasure in recommending a Final Dividend of Re. 0.80 perShare of Re. 1/- each ( 80%). The total outgo considering the interim dividend andproposed final dividend including taxation will be Rs 240.64 millions as against Rs186.86 million during the last year.

PARTICULARS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED / RESIGNED DURING THEFINACIAL YEAR ENDED MARCH 31 2018:

The composition of the Board of Directors of the Company is in conformity with theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. During the year there were no changes in the Board of Directors.

The composition of the Board of Directors as on March 312018 is as below:

1 Mr. K. Ajith Kumar Rai - Chairman & Managing Director

2 Mr. Mohan Srinivasan Nagamangala - Director & CEO

3 Mr. Babugowda Sanganagowda Patil (Retd. IAS) - Independent Director

4 Mr. Ian Williamson - Independent Director

5 Mr. Mundaje Jayarama Shetty - Independent Director

6 Mr. Suresh Shetty - Independent Director

7 Mr. Diwakar Sanku Shetty - Independent Director

8 Mrs. Supriya Ajith Rai - Non Executive Director

SHARE CAPITAL:

During the financial year the Authorized Share Capital of the Company was increasedfrom Rs 150000000 (Rupees Fifteen Crores Only) to Rs 85 0000000 (Rupees Eighty FiveCrores) pursuant to the Scheme of Amalgamation approved by the Hon'ble National CompanyLaw Tribunal Bengaluru Bench vide its Order dated August 112017.

Also the Company has issued and allotted 8533699 Equity Shares of Re. 1/- each tothe minority Shareholders of erstwhile Phoenix Lamps Limited as a result of Amalgamation.Hence there was a change in the Paid up Share Capital of the Company to the extent ofShares issued as mentioned above.

As on March 312018 the Paid up Share Capital of the Company was Rs 139872473/-(Rupees Thirteen Crores Ninety Eight Lakhs Seventy Two Thousand Four Hundred Seventy Threeonly).

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS

During the year under review the Company has not issued any Shares with Differentialvoting Rights.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES:

During the year under review the Company has not issued any Sweat Equity Shares.

CHANGE IN NATURE OF BUSINESS:

There were no changes in the nature of business during the financial year.

OPERATIONS -MANAGEMENT DISCUSSION AND ANALYSIS:

The Indian Automotive industry grew at 14.48% as against 5.1% previous year showinggood growth. Your Company on a standalone basis recorded an operational income of Rs9648.21 million during the year 2017-18 as against Rs 8513.04 millions during thefinancial year 2016-17 recording a growth of 13.33% The Profit after Tax was Rs 1046.41millions during the financial year 2017-18 as against the Profit after Tax of Rs 856.85millions during the financial year 2016-17 recording a growth of 22.12%. The consolidatedGroup operational income was Rs 14310.60 Millions for the financial year 2017-18 againstRs 12028.41 Millions for the year 2016-17 recording a growth of 18.97 %. Theconsolidated Profit After Tax was Rs 1384.83 millions during the financial year 2017-18as against Rs 1137.39 millions during the financial year 2016-17 a growth of 21.75%. Theperformance of your Company has been satisfactory.

The first half of the year witnessed certain disruptions due to introduction of GST.However second half fared much better giving an overall satisfactory performance.

Introduction of GST is expected to have continued positive impact on overall economicgrowth of the country and will help organized manufacturers like your Company to performwell in the years ahead. In view of the positive growth expectation your Company hasdecided to enhance the overall annual cable capacity from the current 250 million to 300million cables in the coming years.

Domestic Cable Division (DCD) :

The overall performance of the DCD was ahead of the industry growth. Consideringincreased utilisation and requirement for the next 2-3 years a capacity expansion plan atvarious plants of the division will be undertaken during the current year to increase thecapacity of from 250 million cables to 300 million cables per annum. This will include anew Greenfield manufacturing plant for Suprajit Automotive Private Limited atDoddaballapur Industrial Area Bangalore. A support unit for the domestic cable divisionat Narsapura Bangalore will also be built. The outlook for the current year appears to besatisfactory.

Phoenix Lamps Division (PLD):

The overall growth of PLD was slightly muted largely due to under performance of theEuropean subsidiaries. The domestic business grew in line with the industry. Your Companyis taking effective steps to increase the capacity utilisation of new H7 line and to bringin new business for this new capacity. The outlook for the current year appears to besatisfactory with an expected growth in business.

WHOLLY OWNED SUBSIDIARIES:

The wholly owned cable subsidiaries namely Suprajit Automotive Private Limited andSuprajit Europe Limited focussed on automotive business have performed well during theyear gone by.

The consolidated sales of the subsidiaries were Rs 1356.35 millions against Rs 1147.31millions previous year an increase of 18.22%. The EBIDTA was t 294.89 millionsagainst t 289.54 millions previous year. The Profit before Tax was Rs 261.01millions against Rs 256.96 millions previous year.. The Profit after Tax was Rs 180.02millions against Rs 193.28 millions previous year.

Wescon Controls 100% owned subsidiary of your Company focussed on non-automotivebusiness had a satisfactory year. The sales were Rs 2562.51 millions against Rs 1471.26millions previous year an increase of 74.17%. The EBIDTA was Rs 356.35 millions againstRs 235.86 millions previous year an increase of 51.09%. The Profit before Tax was Rs118.99 millions against Rs 101.99 millions previous year an increase of 16.67%. The ProfitAfter Tax was Rs 205.03 millions against Rs 67.29 millions previous year an increase of204.69%.

Wescon has launched new strategy -SENA (Suprajit Engineering Non Automotive)showcasing a 3 plant strategy Wichita (Kansas) Juarez (Mexico) and Bangalore (India).Wescon will aim to capture new segments within the non-automotive business.

All cable subsidiaries are expected to perform satisfactorily.

Trifa and Luxlite:

Trifa and Luxlite the 100% owned subsidiaries relating to PLD had a challenging year.The combined sales decreased to Rs 1452.14 millions (Euro 19.25 millions) against Rs1770.09 millions (Euro 24.05 millions) previous year EBIDTA to Rs 11.05 millions (Euro0.15 millions) against Rs 38.37 millions (Euro 0.52 millions) previous year

It may be noted that Trifa and Luxlite are marketing and business development arm forPLD and as such the performance should be seen with the consolidated performance of PLD.PLD has shown a steady growth in the EBIDTA margins from 11% in the year 2015 when it wasacquired to 14% currently. It is expected that PLD on a consolidated basis with Trifaand Luxlite will grow in the current financial year.

CURRENT YEAR:

Indian economy is expected to grow at 7% in the current financial year. Withstreamlining of GST a normal monsoon continued lower interest rates and low inflationthere is an overall expectation of good year ahead. The global uncertainties exist and oil/ commodity prices are high. However the

3 brand strategy Suprajit for automotive cables Phoenix for Halogen Lamps and Wesconfor non-automotive cables along with multiple brand specific strategies and plans yourDirectors are confident that the current year is expected to be satisfactory.

A separate statement in Form AOC-1 is given as Annexure-VIII which containsthe salient features of the financial statement of subsidiaries has been attached alongwith the financials of the Company. The Annual Accounts and related documents of theSubsidiary Companies shall be kept open for inspection at the Registered Office of theCompany. The aforesaid documents will also be made available to the Members of the Companyupon receipt of written request from them.

CREDIT RATING:

The Company's financial discipline and prudence are reflected in the strong creditratings ascribed by rating agencies as exhibited below:

Instrument Rating Agency Rating Outlook
Long Term Debt CRISIL AA- Positive
Long Term Debt ICRA AA Stable
Long Term Debt India Ratings & Research AA- Stable
Short Term CRISIL A1 + Stable
Short Term ICRA A1 + Stable
Short Term India Ratings & Research A1 + Stable
Term Deposit Indian Ratings & Research tAA Stable

FRAUD REPORTED BY THE AUDITORS DURING THE YEAR:

Not applicable as there were no such instances during the year.

DEPOSITS:

The approval of the Shareholders was accorded to accept and renew the Fixed Depositspursuant to the provisions of Sections 73 and 76 of the Companies Act 2013 andaccordingly the Company has accepted / renewed deposits pursuant to the provisions of thesaid Sections read with the Companies (Acceptance of Deposits) Rules 2014 during thefinancial year. The details of the same are as below:

(a) Accepted/renewed during the year - Rs 3.75 Million

(b) remained unpaid or unclaimed as at the end of the year - Nil

(c) whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved-

(i) At the beginning of the year - NA

(ii) Maximum during the year - NA

(iii) At the end of the year- NA

MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There were no material changes and commitments between the end of the financial yearand the date of the Report which affect the financial position of the Company.

EXTRACT OF THE ANNUAL RETURN:

The extract of the annual return in Form MGT-9 is enclosed as a part of this report incompliance with Section 134 (3) of the Companies Act 2013 "Annexure -I".

PARTICULARS OF LOANS INVESTMENTS GUARANTEES GIVEN OR SECURITY PROVIDED BY THECOMPANY:

During the year the Company has not provided any loan/ guarantee / security which fallunder the provisions of Section 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION188(1) OF THE COMPANIES ACT 2013:

All related party transactions which were entered into during the financial year wereon at arm's length basis and were in the ordinary course of business and with the omnibusapproval of the Audit Committee. There are no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large.

All related party transactions wherever applicable are placed before the AuditCommittee. The quarterly disclosures of transactions with related parties are made to theAudit Committee. In compliance with the provisions of Section 134(3) of the Companies Act2013 particulars of contracts or arrangements with related parties referred to in theprovisions of Section 188(1) of the Companies Act 2013 are enclosed in the Form AOC-2as part of this report as "Annexure-II".

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

Meetings of the Board are held at regular intervals with a time gap of not more than120 days between two consecutive Meetings. During the financial year 4 (Four) Meetingswere held on May 29 2017 September 13 2017 November 11 2017 and February 12 2018.

Agenda of the Meeting is circulated to the Directors in advance. Minutes of theMeetings of the Board of Directors are circulated amongst the Members of the Board fortheir perusal.

DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 134 (3) (c) of the Companies Act 2013 the Board of Directorsof the Company confirms and submits that:

i. in the preparation of the annual accounts the applicable Accounting Standards havebeen followed and there have been no material departure;

ii. the selected accounting policies were applied consistently and the judgments andestimates made are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2018 and of the profits of the Company for theyear ended on that date;

iii. 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;

iv. the annual accounts have been prepared on a 'going concern' basis;

v. adequate system of internal financial controls has been laid down and the saidsystem is operating effectively; and

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

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT:

Being a Listed Company necessary measures are taken to comply with SEBI ListingObligations and Disclosure Requirements) Regulations 2015 (LODR). A report on CorporateGovernance along with a certificate of compliance from a Practising Company Secretaryforms part of this report.

During the year the Company has adopted various policies as required under LODR. Thesame are available on Company's website at www.suprajit.com(http://www.suprajit.com/Governance-and-Compliance). The Business Responsibility Report as required to be annexedto this report is annexed as Annexure - III.

DIVIDEND DISTRIBUTION POLICY:

During the year under review the Board has adopted a Dividend Distribution Policywhich is available on the website of the Company at www.suprajit.com (http://www.suprajit.com/Governance-and-Compliance) and also annexed as Annexure -IV.

RISK MANAGEMENT POLICY:

The Company has Risk Management Policy in place. The Audit Committee has additionaloversight in the area of financial risks and controls. Major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis.

The development and implementation of Risk Management Policy has been covered in themanagement discussion and analysis which forms part of this report. The Company has takenDirectors' and Officers' Liability Insurance Policy.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has been active in CSR activities through Suprajit Foundation for the last7 years. The Companies Act 2013 based on the prescribed criteria mandates the companiesto contribute 2% on CSR. During the year your Company has paid 21.27 millions. AlsoSuprajit Automotive a Wholly Owned Subsidiary of your Company has paid 2.52 millions toSuprajit Foundation for various activities undertaken by the said Foundation. The detailedactivities of Suprajit Foundation have been provided in Annexure - V to thisreport.

The copy of the CSR Policy is available on the website of the Company atwww.suprajit.com(http://www.suprajit.com/ Governance-and-Compliance).

EMPLOYEES STOCK OPTIONS DETAILS:

The Shareholders of the Company have approved 'SEL Employee Stock Appreciation RightsPlan 2017' ("ESAR 2017") at the 32nd Annual General Meeting of theCompany held on November 11 2017. Necessary steps are being taken to implement the same.

CONSERVATION OF ENERGY:

Conservation of energy is one of the highest priority measures directly supervised bythe senior management of the Company.

As and when new plants are getting added by the Company the management ensures thatvarious measures like rainwater harvesting STP water usage control planting of treesdiscarding of old gen-sets and minimum usage of lighting power during day time are welladopted from day one.

In addition the following new initiatives have been undertaken during the financialyear at various plants:

a) Company has installed 100 kWp solar capacity as the first pilot project in the year2016 to assess the use of solar energy for the operational requirements of the Company.The Company will monitor the performance of this project and based on the success willconsider deploying such projects at various units.

b) Various plants have started using LED lamp to reduce power consumption.

c) Additional facilities have been fitted with Automatic Water Level Controllers alongwith the water pumps which are used for pumping water to the storage tanks.

d) Electrical systems in all the new plants have been provided with individual controlsso that the user can select particular fan light etc. depending upon requirement at thatparticular point of time. This avoids indiscriminate bulk selection of electrical systems.

e) Additional facilities Shop floors having roofing sheets with thermal vents on topof the roofing sheets (circulating fans operating with wind) in order to reduce the heateffect in summer and also to reduce usage of electrically operated fans in the shop floor.

f) Rain water harvesting has been modified to properly channelize the rain water intoearth in manner bore well gets adequate water for its re-generation.

g) Efforts made to improve power factors by installing additional active capacitors

h) Continuous efforts in reduction of power load by replacing DC drive to AC drive.

i) Compressor room temperature reduction for reducing maintenance cost.

RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION ADAPTATION & INNOVATION:

a) Research and Development (R&D):

1. The Company has set up a centralized Suprajit Tech Centre (STC) at Bengaluru. STChas Engineers for R&D testing and validation teams to products as per customers'requirements. The Group also has tech centers at Tamworth U.K (Suprajit Europe Limited)and Wichita USA (Wescon).

2. The Company has product & process patents which are deployed commercially. TheCompany's R&D has developed many specialized cables lamps and other products forCustomers as per the end user requirements. This is being successfully deployed by thecustomer with significant cost savings.

3. Development cells in respective units have been upgraded with more Engineers andlatest equipments.

4. The Company has developed many types of equipments and automation specialized forcable and lamps with significant energy savings and increased productivity.

5. "Product Life Cycle Management"-software has been implemented to enhancestandardization of new product launch and change management.

6. Launch of RGL and C program to enhance robustness geometry tolerances and life ofthe halogen bulbs has led to significant improvements in quality cost and productivityat Phoenix Lamps Division.

b) Expenditure on Research and Development:

Particulars 2017-18 2016-17
Salaries & Wages 12.29 16.54
Material Consumables & Stores 3.27 4.83
Other Direct Expenditures 5.06 4.46
TOTAL 20.62 25.83

c) Technology Absorption Adaptation Innovation and particulars of importedtechnology:

1) The Company has not imported any technology during the financial year.

2) The Company has developed innovative and pathbreaking products and processes forboth lamps and Cables for which patents are pending.

3) The Company has successfully adapted customer's designs for new types of cableshalogen lamps and also other products.

GREEN INITIATIVES:

The Company has initiated a sustainability initiative with the aim of going green andminimizing our impact on the environment. Like the previous years this year too theCompany is publishing only the statutory disclosures in the print version of the AnnualReport.

FOREIGN EXCHANGE EARNINGS AND OUTFLOW:

The Company earned Rs 1285.78 Millions and expended Rs 1226.60 Millions during thefinancial year under review. It may be noted that at the consolidated level the Companyis a net forex earner.

INDUSTRIAL RELATIONS:

Industrial relations have been cordial and constructive which have helped your Companyto achieve production targets.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declarations from each Independent Directorspursuant to the provisions of Section 149(7) of the Companies Act 2013 that he meets thecriteria of Independence laid down in the provisions of Section 149(6) of the CompaniesAct 2013.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its Audit Nomination and Remuneration and ComplianceCommittees.

FAMILIARISATION PROGRAMMES OF INDEPENDENT DIRECTORS:

Every new Independent Directors of the Board attends an orientation program. Tofamiliarize the new inductees with the strategy operations and functions of the Companythe Executive Directors / Senior Managerial Personnel make presentations to the inducteesabout the Company's strategy operations product and service offerings marketsorganization structure finance human resources technology quality facilities and riskmanagement. The copy of Familiarization Programme of Independent Directors is available onthe website of the Company at www.suprajit.com(http://www.suprajit.com/Governance-and-Compliance).

NOMINATION AND REMUNERATION POLICY:

Your Company has adopted a Nomination and Remuneration Policy on Directors' Appointmentand Remuneration including criteria for determining qualifications positive attributesindependence of a Director and other matters as provided under the provisions of Section178(3) of the Companies Act 2013. The Policy is enclosed as a part of this report incompliance with Section 134(3) of the Companies Act 2013. The same is enclosed as "Annexure-VI'to this Report.

COMPOSITION OF AUDIT COMMITTEE:

Your Company has an Audit Committee comprising of Mr. Diwakar S Shetty as Chairman ofthe Committee Mr. M Jayarama Shetty and Mr. Suresh Shetty as other Members of theCommittee. The composition of the Committee is in compliance with the provisions ofSection 177 of the Companies Act 2013.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Your Company has formulated the Whistle Blower Policy with a view to provide amechanism for Employees and Directors of the Company to approach the Whistle BlowerCompliance Officers/ the Audit Committee of the Company in compliance with Section 177(9)of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Details of the Whistle Blower Policy are explained in the Report onCorporate Governance and Whistle Blower Policy of the Company is available on the websiteof the Company at www.suprajit.com (http://www.suprajit.com/Governance-and-Compliance).

AUDITORS:

i. Statutory Auditors:

The Members of the Company at the 32nd Annual General Meeting of the Company haveappointed Messrs S. R. Batliboi & Associates LLP Chartered Accountants (FirmRegistration No. 101049W/E300004) as Statutory Auditors of the Company for a period of 5(Five) years.

As per the Companies (Amendment) Act 2017 and rules made there under with effect fromMay 7 2018 the Central Government notified the omission of the requirement related toratification of appointment of auditors by members at every Annual General Meeting.Accordingly the resolution for ratification has not been placed before the members.

ii. Cost Auditors:

Messrs G N V Associates Cost Accountants had been appointed as the Cost Auditors ofyour Company for the financial year 2017-18. The cost audit report for the previous yearhas been filed with Registrar of Companies Karnataka within due date.

iii. Secretarial Auditor:

The Board has appointed Mr. Parameshwar G. Bhat a Practising Company Secretary(Membership No. FCS-8860) as the Secretarial Auditor as per the provisions of Section 204of the Companies Act 2013 for the financial year 201718. The Secretarial Audit Reportissued by him is enclosed as "Annexure-VN" to this Report.

QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE STATUTORYAUDITORS

There are no qualifications or adverse remarks in the Statutory Auditors' Report whichrequire any explanation from the Board of Directors. The Statutory Auditors have expressedan unmodified opinion in the audit reports in respect of the Audited Financial Statementsfor the financial year ended March 312018.

Further there are also no qualifications reservations or adverse remarks ordisclaimers made by Secretarial Auditor in his Secretarial Audit Report.

REGULATORY / COURT ORDERS:

There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status of the Company and its future operations.

SUPRAJIT FOUNDATION:

The Suprajit Foundation was established in 2011 as a not-for- profit Trust to conductsocial welfare activities. Over the years the Foundation has initiated guided andconducted several programs in education healthcare and rural development.

Your Directors would like to thank the honorary Trustees of the Foundation whocontinue to devote their valuable time and energy in planning directing and monitoringits activities.

HEALTH SAFETY AND ENVIRONMENTAL PROTECTION (HSE):

The Company's efforts towards reinforcing a positive safety culture have resulted inreduction of total lost time due to Injuries this year. Similarly the lost Time InjuryFrequency Rate reduced from a year ago.

Further during the financial year no occupational illness case was reported. Due tocontinued efforts to conserve water and energy specific water and energy consumption alsogot reduced.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

The Company has in place a Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this Policy.

Summary of sexual harassment complaints received and disposed off during the financialyear 2017-18:

No. of complaints received : NIL
No. of complaints disposed off : NA

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by theMembers at the Registered Office of the Company during business hours on working days ofthe Company up to the date of the ensuing Annual General Meeting. If any Member isinterested in obtaining a copy thereof such member may write to the Company Secretary inthis regard.

The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are forming part of this report as "Annexure - IX".

CAUTIONARY NOTE:

Management Discussion and Analysis forming part of this Report is in compliance withCorporate Governance Standards SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with Stock Exchanges and such statements may be "forwardlooking" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's operations include economic conditions affectingdemand/supply and price conditions in the domestic and overseas markets/currencyfluctuations in which the Company operates changes in the Government regulations taxlaws and other statutes and other incidental factors.

ACKNOWLEDGEMENT:

The Directors place on record their appreciation for valuable contribution made byemployees at all levels active support and encouragement received from variousGovernmental agencies Company's Bankers Customers vendors distributors BusinessAssociates and other Acquaintances.

Your Directors recognize the continued support extended by all the Shareholders andgratefully acknowledge with a firm belief that the support and trust will continue in thefuture.

For and on behalf of the Board
K. Ajith Kumar Rai
Place : Bengaluru Chairman & Managing Director
Date : May 29 2018 (DIN: 01160327)

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