Forbes & Company Ltd Directors Report.

Dear Members,

The Board of Directors (hereinafter referred to as "the Board") hereby submit the report of the business and operations of the Company along with the Audited Financial Statements of the Company for the Financial Year (FY) ended March 31, 2019. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

Financial Results and Highlights of Performance

The Companys performance, as per Indian Accounting Standards (IND AS), during the FY under review is summarized as follows:

Rs in Lakhs




FY 18-19* FY 17-18# FY 18-19* FY 17-18
Revenue and Other Income (Total Income) 24,538.81 30,497.89 2,89,107.92 2,85,775.18
Earnings before Finance Cost, Depreciation, Share of Net Profit of Joint ventures Exceptional Item & Tax 4,157.46 6,575.63 18,041.65 15,908.04
Share of Net Profit of joint venture - - 721.30 940.66
Profit / (Loss) after Finance Cost, Depreciation, Share of Net profit of Joint ventures and before Exceptional Items & Tax 2009.73 4,606.97 2,120.70 (411.83)
Exceptional Items - Income/(Expense) (970.92) - (970.92) -
Profit before Tax (PBT) 1,038.81 4,606.97 1,149.78 (411.83)
Profit/(loss) for the year 1,027.19 4,090.01 (298.48) (3,220.88)
Other Comprehensive Income/(Loss) 0.64 2.74 297.40 2,719.00
Total Comprehensive Income 1,027.83 4,092.75 (1.08) (501.88)
Earnings Per Share - Basic and Diluted (?) 7.96 31.71 5.47 (15.27)

Note: The above figures are extracted from Standalone and Consolidated Financial Statements as per Indian Accounting Standard ("IND AS") and are prepared in accordance with the principles stated therein as prescribed by the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013 ("Act") read with relevant rules issued therein.

*These figures have to be read along with the rules of Ind AS 115 "Revenue from Contracts with Customers" which is an accounting standard notified by the Ministry of Corporate Affairs (MCA) effective from April 1, 2018. The application of Ind AS 115 has a substantial bearing on the Companys accounting for recognition of revenue from real estate development projects. This revised standard has no significant impact on the engineering business of the Company.

The Company has applied the modified retrospective approach as on April 1,2018 and has recorded an opening impact in retained earnings towards the reversal of profits aggregating Rs 5,083.12 Lakhs (net of tax) in Standalone Financial Statements and Rs 5,161.67 Lakhs (net of tax) in Consolidated Financial Statements mainly due to real estate project under development. The comparatives have not been restated and hence, the current period figures are not comparable with the previous period figures.

Had the company continued application of earlier standards instead of Ind AS 115, the following line items for FY 2018-19 would have been higher as follows:

(Rs in Lakhs)

Particulars Standalone Consolidated
March 31, 2019 March 31, 2019
Revenue 8,880.18 9,880.84
Changes in inventories of finished goods, work-in progress and stock in trade (5,195.81) (5,716.69)
Other Expenses - (447.81)
Profit before Tax (3,684.37) (3,716.30)
Net Profit after Tax (2,370.55) (2,402.49)

Certain indirect costs (e.g. Selling expenses, commission and brokerage, Advertisement and sales promotion, depreciation and other administrative expenses) pertaining to real estate development project for the year ended March 31, 2019 aggregating Rs 1,200.54 Lakhs has been recognized as an expense in the Statement of Profit and Loss.

The EPS for Standalone pre Ind AS 115 impact would have been Rs 26.34 per share and for Consolidated would have been Rs 24.34 per share.

# As per IND AS 18/115 on Revenue and the Schedule III of the Companies Act, 2013, revenues from operations for the period July 1, 2017 to March 31, 2018 does not include Goods and Service Tax ("GST"). However, revenues from operations till June 30,2018 included GST. In view of aforesaid restructuring of indirect taxes, revenues from operations for year ended March 31, 2018 are not comparable.

Management Discussion & Analysis of Financial Conditions, Results of Operations and State of Company Affairs

General Outlook

Forbes is into precision tooling and an engineering services with a wide product portfolio supported by strong brands like TOTEM and BRADMA. We have an attractive customer base who are few of the worlds large businesses in their transformational journeys for the last many decades. We are now developing our global presence, deep domain expertise in new industry verticals and a complete portfolio of offerings in the products and services we offer.

The Company leverages all these and its deep contextual knowledge of its customers businesses to craft unique, high quality, high impact solutions. We are also simultaneously expanding our global footprint further in Eastern and West Europe, few countries in North America and South East Asia.

We are into building our expertise across industries beyond our existing areas of expertise through multiple high quality tooling products and our Industrial Automation service offerings in the areas of assembly lines incorporating technologies for pick and place, lasers, sensors, camera and robotics build on relevant new capabilities through organic talent development. We believe in the philosophy of engaging with customer continually by deeper engagements and we continuously strive to improve our agility and adaptability to change in line with customer expectations. We have been fairly successful in expansion of customer relationships in terms of the products delivered and services consumed.

Our focus on the customers with a clear execution strategy have resulted in high satisfaction levels and long, enduring customer relationships. This has been the cornerstone of our ability and hence we have been able to participate in our customers growth and transformation initiatives in recent years.

As per various research reports, Global growth is expected to remain at around 3 per cent in the years 2019 and 2020, however, the steady pace of expansion in the global economy masks an increase in downside risks that could potentially exacerbate development challenges in many parts of the world, according to the UN World Economic Situation and Prospects 2019. The global economy is facing a confluence of risks, which could severely disrupt economic activity and inflict significant damage on long-term development prospects. These risks include an escalation of trade disputes, an abrupt tightening of global financial conditions, and intensifying climate risks. In many developed countries, growth rates have risen close to their potential, while unemployment rates have dropped to historical lows. Among the developing economies, the East and South Asia regions remain on a relatively strong growth trajectory, amid robust domestic demand conditions. Beneath the strong global headline figures, however, economic progress has been highly uneven across regions.

Even among the economies that are experiencing strong per capita income growth, economic activity is often driven by core industrial and urban regions, leaving peripheral and rural areas behind.

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Indias GDP is estimated to be in the range of 7 to 7.5 % over the next few years.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group (BCG) report; is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2050, according to a report by Pricewaterhouse Coopers.

India presently is going through a very interesting phase in the political and economic scenario. The political stability now established since May 23, 2019 and given the stated intent, we believe that the Government will now strongly focus on economic development starting with Infrastructure development and India manufacturing focus, thereby creating employment and excellent business opportunities.

As regards Realty division, we expect the Realty sector to grow at faster rate over the next decade. The robust demand due to increasing incomes, urbanization and economic growth are driving residential and commercial realty demand in India. Government of Indias aim for "Housing for all by 2022" is driving residential activity, while Real Estate (Regulation and Development) Act, 2016 (RERA) has altered the realty sector that was opaque and oblivious to customer interest and is making this sector more transparent. While RERA has done commendable work in the area of consumer rights protection, it still has a long way to go.

Water Purifiers

The global water purifier market is estimated to register 9.50% CAGR during the forecast period (2018-2025) owing to the escalating issues of contamination according to Market Research Future. Water purifiers are majorly used in the developed regions, while rural areas and semi urban areas still remain untapped. Water purifiers have become a primary necessity for the urban consumers in the developing economies owing to the increased level of water pollution. Moreover, with the increasing level of water pollution along with rapid urbanization & industrialization, the segment is likely to flourish.

As per TechSci Research report, "India Water Purifiers Market Forecast and Opportunities, 2020", underground water in India contains high quantity of dissolved solids and various bacteria and viruses, which render the water unfit for drinking, thus steering demand for water purifiers in the country. Growth in India water purifiers market is anticipated on account of continuous deterioration in water quality, rising health concerns, increasing discretionary income and growing adoption of different water purification technologies.

The report reveals that majority of the demand for water purifiers in India emanates from northern and western regions of the country, owing to high penetration of water purifiers in urban as well as rural parts of these regions. In terms of the technology used, majority of the households in India use gravity based water purifiers. However, due to the rising amount of dissolved solids in the water supply, and expanding middle class population, consumers are graduating to other purification technologies. As a result, the preference for RO purifiers, and combination systems which include more than one technology for water purification is growing.

Company Outlook and Performance

The Company has a tradition of excellence and total customer delight as its singular aim. The main businesses of the Company is Engineering and Realty and through its subsidiaries Transaction Management Solutions, Water Purification, Transportation of Chemical through its owned Ships etc.

The Companys flagship brand, TOTEM positioned as a High Quality Performance Tool Manufacturer competes with multi-nationals and overseas market. Significant investments over the year in strengthening, innovation design and development has started paying off and created impact in domestic and overseas market. Industrial Automation business has ambitious plans for introducing new technologies in line with digital manufacturing and Industry 4.0 solutions

Engineering Division

Precision Tools Group (PTG)

PTG is on aggressive growth path and have delivered profitable 18% Year on Year (YOY) growth. Custom tools & application specific High performance tool portfolio continue to show decent growth and been preferred by many Original Equipment Manufactures (OEMs).

PTG continued to invest in technology and design development with infusion of talent and advance fully automated precision machines. PTG strengthened its carbide tools portfolio for non-automotive segment particularly in aerospace and mining. PTG introduced carbide Taps solution for the first time by any Indian company. PTG introduced many new product lines to expand portfolio to meet international requirement and to be a complete tooling solution company. Tool holders, Nib Taps, Hand tools, HSS drills are new introduction to the tooling portfolio. PTG product development in Solid carbide tools, HSS Taps and Tungsten rotary burrs is focused on Aerospace, Defence, Medical & Oil and Gas segment so as to de-risk from Auto sector.

Export market has been identified as growth driver of PTG & initiated business development in focused geographies which includes Europe, Gulf Co-operation Council (GCC), South East Asia, China, Japan, Israel and North America. Engineering Division participated in international trade shows in USA, Russia, Thailand, Vietnam, Mexico as part of brand building and business development efforts which has given us recognition as high performance tooling company in Aerospace, Power and Railways segments.

Domestic market coverage through distribution has helped PTGs growth across India. Engineering Division participated in many Domestic trade exhibitions, IMTEX (Indian Metal Cutting Tools Exhibitions) and some other regional events to showcase our capabilities.

Margins were under pressure but with kaizen implementation & cost reduction initiative resulted in improved contribution margin. General price increase has been announced in January 2019 for all products except Carbide tools to cover prices escalation of raw materials in international markets increase, which have been accepted by the market.

PTG will continue to invest in capacity augmentation to meet increased market demand. Initiatives during the year included investment and capacity enhancement in manufacturing HSS drills, HSS Taps & Solid Carbide tools which helped in building volume. Engineering Division initiated to strengthen Supply chain function to create better customer experience and capacity augmentation for standard product portfolio.

Engineering business is now re-certified for ISO 9001-2015 & IATF certification awarded for Spring washer business. TOTEM been recognized as preferred cutting tool Brand By Times Group.

Industrial Automation and Coding Business Group (CBG)

Industrial Automation business has delivered 25% Year on Year (YOY) & could make inroads to non-auto sector automation projects. Large-value automation orders from big non-automotive OEM companies are one of the significant achievements in FY19 for projects business. The sales funnel is attractive in this area.

Automation business has ambitious growth plan in scaling up existing solution and introducing new technologies in line with digital manufacturing and Industry 4.0 solutions. Engineering Division created design centre in Pune to augment design and technical proposal capabilities. Main focus for FY 19 was organization building in sales, business development, design and project management to support aggressive growth plans for this business.

CBG has built capability to deliver complete Robotic automation cell for machine tending and pick and place. It introduced High speed lasers for non-metal application which created inroads to FMCG sector. Talent attraction and on-boarding are key success factors for automation business and all efforts are on to strengthen this area.

The Engineering division continued to be committed towards Employee development and engagement initiatives, safety and well being through its various initiatives, operations by complying all environmental and safety regulations.

ACE (Adapt Change Excel) change management program will continue to set directions to achieve our vision of being market leader by providing innovative solution. Two elements to ACE initiative Speed and Lean were added which will provide growth and sustenance. We added agility for current year which will build organization capability to suit economic environment.

Consolidation of products portfolio will help company to achieve cost advantages and better customer service.

Project Vicinia, Chandivali

The Company believes that the demand for Real Estate in our country would remain strong. Project Vicinia being the first venture of the Company in Realty Segment has received good response. The real estate development under "Project Vicinia" at Chandivali, Mumbai were carried as per the terms of the development agreement between the Company and Videocon Realty and Infrastructure Limited ("VRIL") forming part of the consent terms filed with the Honble Bombay High Court in 2011.

During the current year, VRIL delayed payments to vendors for Project Vicinia and to protect the interests of all stakeholders including the Company and purchasers of individual flats, the Company terminated the aforesaid development agreement. Consequently the matter was referred to arbitration and vide the arbitration award dated February 25, 2019, the Company was directed to pay an amount of Rs 15,300 Lakhs to VRIL for restitution and the aforesaid amount was paid on March 2, 2019.

The Company entered into a Business Transfer Agreement ("BTA") with Paikar Real Estates Private Limited (a fellow subsidiary) dated February 27, 2019 to transfer 50% interest in the aforesaid real estate development project (which the Company got through restitution), by way of slump sale on an as-is-where-is basis as a going concern for Rs 15,500 Lakhs. The aforesaid transaction was approved by the shareholders at Extra Ordinary General Meeting held on March 29, 2019.

The real estate development of Project Vicinia at Chandivali is registered under Maharashtra Real Estate Regulatory Authority and is expected to be completed by June 2021.

Eureka Forbes Limited & its Subsidiaries (Collectively ‘EFL)

EFL has been a trend setter and leader in all its businesses. In a year that witnessed its fair share of highs and lows, EFL continued to lead within its categories across channels. This competitive spirit will continue to increase and as leaders, EFL will continue to anticipate, innovate and stay ahead of its competition.

Key Priorities:

- Customer-centric Organization

- Omni-Channel presence mirroring customer journeys

- Agile, Responsive, fit for purpose organization

- Employer of Choice

- Step jump in capabilities: Digital, Analytics, GTM, Sourcing

- Category leadership in large, profitable spaces, 2-3 bets in fast growing spaces

- Go-to-Market effectiveness

- Lean Organization Structure

- Higher share of sales from referrals, with end to end tracking of leads and referrals

- Increased average value Realization, with value based pay for performance

- Performance oriented organization with best in class span of control

- Partner channel engine for growth

- Execution rigour and data driven decisions, coupled with right capabilities to drive growth

Armed with the state-of-the-art products for all brands, EFL continued to steer its actions to fall in line with its principles of competitiveness, growth and profitability. EFL sustained to drive innovation across brands, categories, operations and adapted the go- to-market strategies, taking into account the diversity, market needs, and the evolving channels of distribution.

EFL is harnessing technology, mobile connectivity to build leading edge operational and marketing capabilities. It is indeed helping EFL to engage and be in constant touch with its people on real time basis through mediums such as ‘Eureka TV and ‘Microsoft Kaizala. EFL continued to lead the digital transformation within and leveraged its Direct Sales capabilities to drive competitive advantage. EFL grew in the fast emerging e-commerce channel supported by Eurochamps and its Retail and Institutional efforts to assist the customers across the length and breadth of India continued.

Most importantly, EFLs brands and operations continued to be held together by its firm belief/ purpose to be ‘Friend for Life. EFL takes pride in sharing few achievements of its community fulfilment division which has been working relentlessly and has successfully executed 101 projects which are serving communities with a beneficiary base of over 90,000 people across India.

Forbes Technosys Limited (FTL)

During the year under review, FTL focused on consolidation and re-organisation and on creating a foundation that will make FTL fit for scale and set the stage to embark on the path of profitable and sustainable growth. There were pressures on revenue growth during the year due to stress and muted demand in some of the key sectors that FTL has been traditionally dependent on, such as banking and telecom. Heightened competition and entry of several local players in the e-payments space put pressures on margin as well.

The FY 2018-19 was a year of rationalization for FTL across its business verticals and product range in a challenging business environment. Business from key verticals such as Banking, Telecom and Government slowed down as these segments faced challenges of their own, such as NPAs, non-availability of capital and slow progress on key initiatives.

However, there are other segments such as retail, healthcare and hospitality that are under penetrated and have significant potential for FTL product offerings.

Forbes Xpress, FTLs e-payments services platform, continued to grow both in terms of scale, franchisee numbers and geographic presence. During the year, several measures were initiated on the technology and service basket fronts, to make the platform even more robust, scalable and differentiated from competition.

FTL has also chosen to embrace design-led product innovation for entering new market segments, in addition to realizing production and service efficiencies through standardization and modular designs. These investments will help FTL in addressing emerging opportunities in domestic and international markets in the near future.

The self-service automation market in India is expected to grow at a rapid pace in the next 3-5 years, across various verticals such as BFSI, Retail, Transport Hospitality and Government. Many of these segments are highly under penetrated and highly fragmented.

In the banking segment, kiosk banking is being made an integral part of the banks digital programs. Given the nation-wide push for providing insurance and financial services to all citizens, the insurance and mutual fund segments have already started either implementing or exploring kiosks as a means to expand presence and reaching the last mile.

Self-service kiosks are also an integral part of several Government initiatives such as smart cities and delivery of Government to Citizen services under Digital India program.

The retail segment is increasingly looking at ways and means to attract customers, through enhanced user experiences delivered via innovative technologies such as Augmented Reality and Virtual Reality enabled self-service platforms.

The transit segment also is showing a lot of potential for self-service ticketing systems, on the back of the new metro rail projects being implemented across the country and the modernization program of traditional railways.

In the e-Payments business, FTL is already in the process of adding several additional services, such as Aadhaar enabled payment system (AEPS), micro-insurance, micro-credit, ticketing for state road transport etc.

There is also a pressing need for cash collection points for segments such as BFSI and e-Commerce, where the companys franchisee network can serve as the extended arm of organizations, especially in remote areas. Not only will these additional services give a significant boost to transaction volumes, but will also enhance franchisee stickiness. The franchisee network has also grown rapidly and FTL plans to expand the network significantly in the tier 2 cities and beyond in the coming year.

With the combination of positive market developments and initiatives that FTL has taken, the business is poised for profitable growth across all segments in the coming years.

Shapoorji Pallonji Forbes Shipping Limited (SPFSL, formerly SCI Forbes Limited)

SPFSL currently owns 5 specialized chemical tankers with a total dwt capacity of 73,424 mt. These 5 vessels are foreign going Indian flag ships making SPFSL the only company in India that owns chemical tankers. SPFSL is committed to the safe and efficient transportation of chemical cargoes for all its customers and partners. All the five vessels maintain approvals from Oil Majors including Shell, Exxon, Chevron, BP and Total for carrying their products.

Earnings in FY 2018-19 were affected adversely due to increase in supply of ships, increase in fuel prices and uncertainty in geopolitical scenario. The fleet grew by about 3% in 2018 whereas the seaborne trade continued to grow at 4% y-o-y. Poor market of bigger vessels also had a cascading effect on smaller tonnage however, the volatility in the chemical trade remained low.

With a sharp decline in the new build deliveries in 2019 onwards and continued growth in seaborne chemicals trade, the markets are expected to tighten up and give potential rise to the freight earnings.

Forbes Bumi Armada Limited (FBAL)

FBAL maintains qualified and experienced manpower which continues to provide quality manning services to Floating Production Storage and Offloading (FPSO) Business located in Mumbai High. The manning team has brought laurels to the Company by maintaining both the FPSO with zero loss time injury (LTI) and 100% commercial uptime. Manpower resource of company are delivering international standard services to client maintaining top notch Health Safety and Environment (HSE) records.

Assets of The Svadeshi Mills Company Limited (Svadeshi)

The Assets of Svadeshi continue to be in the hands of the Official Liquidator, High Court, Bombay. The Company is exploring options available.

Financial Performance

The Consolidated Financial Statements of the Company and its subsidiaries, its joint ventures and associate companies are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Companies Act, 2013. The Notes to Consolidated Financial Statements are disclosed and forms part of the Consolidated Financial Statements.

Segment wise performance

The summarized performance of segment revenues and segment results is as under:

Rs in Lakhs


Segment Revenue

Segment Results

FY 18-19 FY 17-18 FY 18-19 FY 17-18
Health, Hygiene, Safety Products and its services 2,38,843 2,31,771 5,754 2,940
Engineering 20,913 18,597 2,673 2,357
Real Estate 1,919 11,247 333 4,557
IT Enabled Services and Products 12,385 13,161 4,838 101
Shipping and Logistics Services 11,414 8,103 207 24
Others 33 102 (31) (95)

Key Financial performance, Operational Information and Ratio Analysis

Key Ratios/ Indicators


Explanation for change of 25% or more
FY 2018 -19 FY 2017-18
Debtors Turnover (in days) 66 47 The increase in days is mainly due to inclusion of revenues of Project Vicinia and its early collection in the FY 2017-18. For the current year, this represents the debtors other than Project Vicinia. This change was required due to implementation of IND AS 115.
Inventory Turnover * (times) 5 3
Current Ratio 0.78 1.27 Increase in Current Liabilities on account of Current Maturities of Long term borrowings
Debt Equity Ratio 0.50 0.36 Reduction in equity of 5083.10 Lakhs from opening reserves due to implementation of IND AS 115.
Interest Coverage Ratio 2.82 4.51 The change is due to inclusion of profit of Project Vicinia in the FY 2017-18. For the current year, this represents the profit other than Project Vicinia. This change was required due to implementation of IND AS 115.
Operating Profit Margin % 6% 17%
Net Profit Margin % 5% 14%
AO/„ 1 GO A

* Inventory excludes Real Estate Inventory, as corresponding revenue is accounted as per IND AS 115 in the FY 2018-19.

Key Ratios/ Indicators


Explanation for change of 25% or more
FY 2018 -19 FY 2017-18
Operating Profit Margin % 2% 2% Increase in profit of Health, Hygiene and Safety Segment.
Net Profit Margin % 0% -1%
Return on Net Worth -1% -7%


During the year, standalone revenues decreased to Rs 22,727.58 Lakhs (previous year Rs 29,743.91 Lakhs) mainly due to reduction in Real Estate segment revenue due to adoption of IND AS 115. Consolidated revenues increased to Rs 2,85,341.89 Lakhs (previous year Rs 2,82,770.94 Lakhs) mainly due to increase in revenue from Health, Hygiene, Safety segment.

Earnings Before Interest, Depreciation, Taxation and Amortization ("EBIDTA")

During the year, standalone EBIDTA decreased to Rs 3,186.54 Lakhs (previous year Rs 6,575.63 Lakhs) mainly due to reduction in Real Estate segment earnings due to adoption of IND AS 115. Consolidated EBIDTA increased to Rs 17,792.03 Lakhs (previous year Rs 16,848.70Lakhs) mainly due to increase in earnings of Health, Hygiene, Safety segment.

Profit Before Tax ("PBT")

During the year, standalone PBT decreased to Rs 1,038.81 Lakhs (previous year Rs 4,606.97 Lakhs) mainly due to reduction in Real Estate segment profit due to adoption of IND AS 115. Consolidated PBT increased to Rs 1,149.78 Lakhs (previousyear (411.83) Lakhs) mainly due to increase in profit of Health, Hygiene, Safety segment.

Fixed Assets

The standalone year-end Gross Block increased to Rs 11,409.50 Lakhs (previous year Rs 10,010.93 Lakhs) mainly due to additions to property, plant and equipments. The consolidated year-end Gross Block increased to Rs 96,278.32 Lakhs (previousyear 92,710.55 Lakhs) mainly due to additions to intangible assets computer softwares for IT Enabled Segment.


During the year, standalone profit decreased to Rs 1,027.19 Lakhs (previous year Rs 4,090.01 Lakhs) mainly due to reduction in Real Estate segment profit due to adoption of IND AS 115. Consolidated loss decreased to Rs (298.47) Lakhs (previousyear (3,220.88) Lakhs) mainly due to increase in Health, Hygiene, Safety segment profit.

Current Liabilities

The standalone current liabilities increased to Rs 44,190.39 Lakhs (previous year Rs 15,973.00 Lakhs) primarily due to Advance from Customer of Real Estate - IND AS 115 impact. The consolidated current liabilities increased to Rs 1,74,541.85 Lakhs (previous year Rs 1,40,539.59 Lakhs) primarily due to Advance from Customer of Real Estate - IND AS 115 impact.

Loan Funds

During the year, standalone loan funds increased to Rs 17,002.19 Lakhs (previous year Rs 16,869.91 Lakhs) registering marginal increase in long term borrowings and consolidated loan funds decreased to Rs 1,06,949.46 Lakhs (previous year Rs 1,18,944.36 Lakhs) primarily on account of repayment of borrowings by EFL.

Opportunities and Risks

Our success as an organization depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the key risks, anticipated impact on the Company and mitigation strategy is as follows:

• Market Development

Your Company monitors external market trends and collates consumer insights to develop category and brand strategies.

The Company actively searches for ways to translate the trends in consumer preferences and tastes into new technologies for incorporation into future products. We develop product ideas both in-house and with selected partners to enable us to respond to rapidly changing consumer trends with speed.

• Political and Global Uncertainty

Political uncertainty or volatile economic uncertainty may adversely affect the reduced demand and could restrict revenue growth opportunities.

The Company has broad based diversified businesses catering to various industry segments and diverse markets and hence may not get affected by these uncertainties.

• Legal and Regulatory

Compliance with laws and regulations is an essential part of your Companys business operations. We are subject to laws and regulations in diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes.

Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance.

We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.

• Systems and Information

Your Companys operations are increasingly dependent on IT systems and the management of information.

Increasing digital interactions with customers, suppliers and consumers place even greater emphasis on the need for secure and reliable IT systems and infrastructure, and careful management of the information that is in our possession.

The cyber-attack threat of unauthorised access and misuse of sensitive information or disruption to operations continues to increase.

To reduce the impact of external cyber-attacks impacting our business, we have firewalls and threat monitoring systems in place, complete with immediate response capabilities to mitigate identified threats. Our employees are trained to understand these requirements.

Internal control systems and their adequacy

The Company has an internal control system, which ensures that all transactions are recorded satisfactorily and reported and that all assets are protected against loss from unauthorized use or otherwise. The internal control systems are supplemented by an internal audit system carried out by a team under the direct supervision of the Head of Internal Audit. The findings of such internal audits are periodically reviewed by the management and suitable actions taken to address the gaps, if any. The Audit Committee of the Board meets at regular intervals and addresses significant issues raised by both the Internal Auditors and the Statutory Auditors. The process of internal control and systems, statutory compliance, information technology, risk analysis and risk management are inter-woven to provide a meaningful support to the management of the business.

Price Waterhouse Chartered Accountants LLP, the statutory auditors of the Company have audited the financial statements included in this annual report and have issued a report on our internal financial controls over financial reporting as defined in Section 143 of the Act.

Material Development in Human Resources and Industrial Relations

The major thrust during the year was in Talent Acquisition, Talent Management, Performance Management and helping the business drive performance, Identifying and nurturing high potential talent from a Career Management, Succession perspective and Training Interventions - both in technical and behavioural domains. The talent acquisitions were to bolster Companys expansion plans in the Automation business, Engineering Capabilities like Design and new areas like Hand Tools. A major Training intervention was commenced for ‘Value Selling covering the entire Sales, Marketing and Project Staff which will continue over different modules in the new year.

Employee Relations continued to be harmonious with the Long Term Settlement discussions in progress with the union at Waluj, the major focus of which is increase in productivity and efficient practices.

Investment in Subsidiaries

During the year under review, the Company invested Rs 1,000 Lakhs in Preference Shares of Forbes Technosys Limited, a wholly owned subsidiary of the Company. The Company has also invested 2,505 Lakhs during the year in equity shares of Eureka Forbes Limited, a wholly owned Subsidiary of the Company.

Subsidiaries/ Associates /Joint Ventures

During FY 2018-19 the following companies have become or ceased to be subsidiaries, joint ventures or associates.

Name of Company Nature of Relationship
Aquaignis Technologies Pvt. Ltd An Joint Venture of Eureka Forbes Limited has become a wholly owned subsidiary of Eureka Forbes Limited with effect from June 13, 2018.
Aquadiagnostics Water Research & Technology Centre Ltd Forbes G4S Solutions Pvt Ltd A wholly owned subsidiary of Eureka Forbes Limited ceased to be a subsidiary with effect from June 25, 2018. Ceased to be Joint Venture of Eureka Forbes Limited with effect from May 10, 2018.
Forbes International AG A wholly owned subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) merged with Lux International AG with effect from March 23, 2018.
Lux Professional International Gmbh Awholly owned subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) merged with Lux International AG with effect from March 23, 2018.
Lux Aqua Czech s.r.o Ceased to be subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited ) with effect from April 30, 2018.
Lux Aqua Hungary KFT Ceased to be subsidiary of Lux International AG (a step down subsidiary of Eureka Forbes Limited) with effect from April 30, 2018.

Details of subsidiaries, associate companies and joint venture companies are set out in the statement in Form AOC-1, pursuant to Section 129 of the Companies Act, 2013 ("Act") and, is attached, herewith, as Annexure "I". Financial Statements of these subsidiaries are available for inspection at the registered office of the Company and that of the subsidiary company concerned and the same would be also available on the website of the Company,

Dividend and Transfer to Reserves

Your Directors are pleased to recommend for the approval of the Members a dividend of Rs 2.50 per equity shares (previous year: Rs 2.50) and an additional Special Centenary Year Dividend of Rs 2.50 (25%) per equity share. The dividend, if approved by the Members would involve a cash outflow of Rs 777.50 lakhs including dividend tax (Previous Year Rs 388.75 lakhs). In accordance with SEBI (Listing Obligations and Disclosure Regulations), 2015, the Board ofDirectors of the Company has adopted a Dividend Distribution Policy, which is annexed as Annexure "II". The policy is also available on the website of the Company,

The Company proposes to retain the entire balance amount of Rs 3,433.25 Lakhs (Previous Year Rs 7,877.29 lakhs) in the Profit & Loss Account.

Share Capital

The paid up Equity Share Capital of the Company as on March 31, 2019 was 1,289.86 Lakhs. During the year under review, the Company has not issued any shares with differential voting rights or ‘sweat equity shares and has not granted any stock options. As on March 31, 2019 none of the Directors of the Company hold shares or convertible instruments of the Company.


The Company continues to focus on judicious management of its working capital. Relentless focus on receivables, inventories, strict cost control and, use of alternative borrowing instruments has helped in keeping the borrowings and effective interest cost under control.

• Redeemable Non-convertible Debentures

The Non- Convertible Redeemable Debentures (NCDs) aggregating to 4,000 Lakhs were outstanding during the year ended March 31, 2019.

• Deposits

The Company has not accepted deposits from public falling within the ambit of Section 73 of the Act and The Companies (Acceptance of Deposits) Rules, 2014. Unclaimed matured deposits were transferred to Investor Education and Protection Fund as per the provisions of the Companies Act, 1956 / 2013.

Particulars of loans, guarantees and investments

Particulars of Loans, Guarantees and Investments covered under provisions of section 186 of the Act are given in the notes to the Financial Statements.

Related Party Transactions

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of business. There were no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of a foreseen and repetitive nature. The transactions entered pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis. Form AOC-2 is annexed as Annexure ‘HI to this report, pursuant to Section 188 of the Act. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website.

Vigil Mechanism/Whistle Blower Policy

The Company has Whistle Blower Policy/Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The Policy is also available on the website of the Company.

Internal Complaints Committee

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace as per with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Internal Compliants & Committee (ICC) has been setup to redress complaints received regarding sexual harassment as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the ICC includes external member. During FY 2018-19, no complaints on sexual harassment were received.

Corporate Governance and Management Discussion and Analysis

The guiding principle of the Code of Corporate Governance is ‘harmony i.e. balancing the need for transparency with the need to protect the interest of the Company and balancing the need for empowerment at all levels with the need for accountability. A detailed report on Corporate Governance forms part of Annual Report. The ‘Management Discussion and Analysis forms part of this report.

Corporate Social Responsibility (CSR)

The Company is committed to its stakeholders to conduct business in an economically, socially and environmentally sustainable manner that is transparent and ethical.

The Company is committed to inclusive, sustainable development and contributing to building and sustaining economic, social and environmental capital and to pursue CSR projects, as and when required, that are replicable, scalable and sustainable with a significant multiplier impact on sustainable livelihood creation and environmental replenishment.

The Company during the FY 2018-19 undertook infrastructure funding project and committed and earmarked funds for partial reconstruction of school building. The said projects undertaken by the Company are in accordance with Schedule VII of the Companies Act, 2013.

The Report on CSR activities, in terms of Section 135 of the Companies Act, 2013, is annexed as Annexure IV to this report.

Risk Management

The Board of Directors of the Company has formed a Risk Management Committee for identification, evaluation and mitigation of external and internal material risks. The Committee shall establish a framework for the companys risk management process and to ensure its implementation. The Committee shall periodically review the risk management processes and practices of the Company and establish procedures to mitigate risks on a continuing basis.

Significant and Material Orders Passed By the Regulators or Courts

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

Directors and Key Managerial Personnel

As per provisions of Section 152(6) of the Act, Mr. Shapoor P. Mistry is due to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board of Directors recommend his re-appointment as Director of the Company.

Ms. Aslesha A. Gowariker, an Independent Director of the Company on account of her other professional commitments tendered her resignation with effect from June 12, 2018.

Ms. Rani Ajit Jadhav was appointed as an Independent Director of the Company for a period of three years with effect from September 1, 2019.

Mr. Kaiwan D. Kalyaniwalla, an Independent Director ofthe Company on account of his other professional commitments tendered his resignation with effect from the close of business hours of March 31,2019.

Mr. Nikhil Bhatia has been appointed as an Additional and Independent Director ofthe Company with effect from May 16, 2019. The appointment is for a period of 5 years subject to approval of Shareholders, which is being sought through Postal Ballot.

Based on the recommendations of the Nomination and Remuneration Committee and subject to approval of the shareholders, the Board of Director approved the re-appointment of Mr. D Sivanandhan as an Independent Director for second term of 5 years commencing from August 6, 2019.

The Board places on record its appreciation for the invaluable services rendered by Ms. Gowariker and Mr. Kalyaniwalla to the Board and the Company during their tenure as Members of the Board/Committees of the Board.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under the Act and SEBI (LODR), 2015 and there has been no change in the circumstances which may affect their status as Independent Directors during the year.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for attending meetings of Board/ Committee of the Company.

Independent Directors are familiarized with their roles, rights and responsibilities in the Company through induction programmes at the time of their appointment as Directors and through presentations made to them from time to time. The details of familiarization programmes conducted have been hosted on the website of the Company and can be accessed at

Audit Committee of the Board of Directors

The details pertaining to the composition of the Audit Committee of the Board of Directors are included in the Corporate Governance Report which forms part of this report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR), 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as, the evaluation of the working of its Audit, Nomination and Remuneration, Stakeholders Relationship Committees.

The performance ofthe Board was evaluated by the Board after seeking feedback from all the Directors on the basis of the parameters/criteria, such as, degree of fulfillment of key responsibility by the Board, Board Structures and Composition, establishment and delineation of responsibilities to the Committees, effectiveness of Board processes, information and functioning, Board culture and dynamics and quality of relationship between the Board and the Management.

The performance ofthe committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility and Stakeholders Relationship Committee was evaluated by the Board after seeking feedback from Committee members on the basis of parameters/criteria such as degree of fulfillment of key responsibilities, adequacy of committee composition, effectiveness of meetings, committee dynamics and, quality of relationship of the committee with the Board and the Management.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of self- assessment questionnaire and feedback/inputs from other Directors (without the concerned director being present).

In a separate meeting of Independent Directors, the performance of Non-Independent Directors of the Board as a whole and the performance of the Chairman were evaluated.

Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, senior management personnel and their remuneration. Remuneration Policy of the Company acts as a guideline for determining, inter alia, qualification, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of the performance of the Director, Key Managerial Personnel and senior managerial personnel. Nomination and Remuneration Policy is annexed as Annexure "V" to this report.

Disclosure as required under Section 197 (12) of Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure ‘VI to this Report.

Meetings of the Board

The Board met at least once in each quarter and 8 meetings of the Board were held during the year and the maximum time gap between two Board meetings did not exceed the time limit prescribed in the Act. The details have been provided in the Corporate Governance Report.

Directors Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Act, the Directors, based on the representations received from the operating management, confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the FY and of the profit or loss of the Company for that period;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Auditors and Audit Report

Statutory Auditors

Pursuant to the provisions of section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Price Waterhouse Chartered Accountants LLP (PWC) (ICAI Firm Registration No.012754N/N500016) were appointed as the Statutory Auditors of the Company for a term of 5 years till the conclusion of 103rd Annual General Meeting of the Company.

The Audit Report forms part of the Annual Report. The Auditors have referred to certain matters in their report on Financial Statements to the shareholders, which read with relevant notes forming part of the accounts, is self - explanatory.

Cost Auditors

As per the requirements of Section 148 of the Act read with The Companies (Cost Records and Audit) Rules, 2014, the cost accounts of the Engineering Division and Project Vicinia of the Company are required to be audited by a Cost Accountant. The Board of Directors of the Company have, on the recommendation of the Audit Committee, appointed Kishore Bhatia & Associates, Cost Accountants, as Cost Auditors for the FY 2019-20 on a remuneration of 4.50 Lakhs plus out of pocket expenses. As required under the Companies Act,

2013, necessary resolution seeking members ratification for the remuneration to the Cost Auditor is included in the Notice convening the Hundredth Annual General Meeting of the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014, the Company has appointed Makarand M. Joshi & Co, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed herewith as Annexure ‘VII.

The Secretarial Audit Report Does not Contain any qualification, reservation or adversed remark or disclaimer.

The Secretarial Audit of Eureka Forbes Limited, (Material Subsidiary) for the FY 2018-19 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Report of the Secretarial Auditor of Eureka Forbes Limited does not contain any qualification, reservation or adverse remark or disclaimer.

Particulars of Employees and Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

(a) The information required pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

(b) Information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as Annexure ‘VIII.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9, as per the provisions of the Companies Act, 2013 and Rules thereto is annexed herewith as Annexure ‘IX and forms part of this Report. The said extract is also available on the website of the Company viz. .

Business Responsibility Report

A separate section on Business Responsibility Report forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

Cautionary Statement

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply, input costs, availability, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.


Your Directors acknowledge and thank all stakeholders of the Company viz. customers, members, employees, dealers, vendors, banks and other business partners for their valuable sustained support and encouragement. Your Directors look forward to receiving similar support and encouragement from all stakeholders in the years ahead.

For and on behalf of the Board
Shapoor P. Mistry
DIN: 00010114
Mumbai, May 30, 2019