Forbes & Company Ltd Management Discussions.

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


The Indian economy ended the fiscal year 2016-17 with a moderate growth. The current financial year was a rather eventful year. Against the backdrop of robust macro-economic stability, the year was marked by two major domestic policy developments, the passage of the Constitutional Amendment, paving the way for implementing the transformational Goods and Services Tax (GST), and the action to demonetise the two highest denomination currency notes.

The GST will create a common Indian market, improve tax compliance and governance, and boost investment and growth; it is also a bold new experiment in the governance of Indias cooperative federalism. Demonetisation has had short-term costs but holds the potential for long term benefits. Prompt actions allow growth to return to trend in 2017-18, following a temporary blip in activity in second half of FY 2016-17. This in the long run is expected to result in significant benefits in the form of transition towards a cashless economy, expansion of digital financial systems and extension of the tax net.

Looking further ahead, societal shift in ideas and narratives will be needed to overcome three long-standing meta-challenges: inefficient redistribution, ambivalence about the private sector and property rights, and improving but still-challenged state capacity. In the aftermath of demonetisation, and at a time of gathering gloom about globalisation, articulating and embracing those ideational shifts will be critical to ensuring that Indias sweet spot is enduring not evanescent.

Coming back to Indian economy, this was a year of moderate growth with a decline in the industrial sector growth, even as the agrarian and rural sector benefited from a good monsoon after two successive failed monsoons. Industrial activity picked up pace in January2017 with industrial production registering growth on account of improvement in the manufacturing and capital goods sector output.

The FY 2017-18 is expected to be a good year for the Indian economy. The benefits of the important reforms to be implemented during FY 2017-18 will be seen during the year. The Union Budget for FY 2017-18 provides for development in infrastructure, housing, rural sector and a boost to the overall investment climate. The performance of the global economy is also expected to improve with the International Monetory Fund forecasting a rise in global GDP growth from 3.1 % in 2016 to 3.4% in 2017 and 3.6% in 2018.

Business Review Precision Tools Group (PTG)

Flagship brand of Precision Tools Group is Totem which is being re-positioned as a High Quality Performance Tool Manufacturer to compete against multi-nationals in India and overseas markets. High Performance Tool revenue streams have shown decent growth. We have done relevant significant investment in strengthening, Innovation, Design & Development and Quality assurance function by high end software and latest equipment.

Inspite of challenging market scenarios in automotive sector which is a major market segment for PTG and de-monetization, PTG managed a profitable top-line growth of 6%.

PTG continued efforts to introduce new products to the market in Carbide Raw Material, Expansion of High Performance Taps product portfolio, introduction of Solid Carbide Long Series Drills and expansion of HSS drill range.

New dealers introduction, a strong initiative taken in FY 2016-17, has been made across the country and continues to be an ongoing process to expand reach and growth in the business. This is an investment in the channel and will yield good results in the current year. Efforts to improve revenue share from export market has shown Year on Year (YoY) growth of 23%. Middle East, South East Asia, Europe and Latin America have been focus markets.

Introduction of New Technologies in the field of Heat Treatment, Geometric measurements and Edge preparation in manufacturing has led to product quality enhancement to compete against best in class.

Substantial investments were made in Waluj Facility and we hope to continue the investment trend in this business in the current financial year, thereby ensuring that we consolidate our operations and hope to achieve better synergies and efficiencies in all the activities in Waluj in the time to come.

Innovation, Speed of Change, Product Development along with People Skill Enhancement, Training & Development are the main focus for business requirement which has been implemented on an on-going basis.

Coding Business Group (CBG)

Though low in volume presently, CBG has shown 46% YoY growth with significant growth in profit margins. FY 2016-17 was the year of consolidation for automation business.

CBG introduced integrated marking solutions with software, coding & decoding, scanning/ Vision systems. During this year, we were able to provide automation system as an Import substitute to one of the leading two-wheeler manufacturer and achieved success by exporting a fully integrated system to Egypt, which was also a first for us.

CBG started assembly of laser optics in Waluj Factory with its own system controls. Industry 4.0 solution was implemented for automotive industry which is going to be one of the future revenue stream.

CBG has executed Automation projects and going forward will be a major revenue source. CBG has built capabilities in industry 3.0 and 4.0 solutions. Currently Coding business has capabilities of marking and traceability, material handling, RFID, Lasers for Metal & Non-metal and Integrated solutions.

The division continued with its Adapt, Change, Excel (ACE) program- to be nimble and swift in business execution from product selling company to solution provider. Employee engagement program for nurturing talent and succession planning is also being put in place.

Project Vicinia, Chandivali

As per the terms of out-of-court settlement of the dispute set out in consent terms filed with Honble Bombay High Court relating to development of plot of land at Chandivali, the Company and Videocon Realty and Infrastructure Limited (Videocon), each, are entitled to 50% of the saleable area of Project. Videocon has been allocated 50% of the rights in the permissible Floor Space Index (FSI) of the specified land to be developed by Company, as two independent projects of Company and Videocon concurrently with a specific flatwise allocation of built up area of apartments. The Company has received bookings for 102 flats for its share. The Project is expected to be fully executed and sold by June 2021.

Investment in Subsidiaries/Joint Ventures

During FY 2016-17, Lux Professional GmbH, Lux Osterreich Professional GmbH, Lux Aqua Paraguay SA, Lux Aqua Czech s.r.o, Lux Waterline GmbH and Brightclean (Spain) S.L were incorporated/have become wholly owned subsidiaries of Lux Professional International GmbH.

Subsidiaries/ Associates /Joint Ventures

During FY 2016-17 the following companies have become or ceased to be subsidiaries, joint ventures or associates.

Name of Company Nature of Relationship
Lux Waterline GmbH A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) with effect from April 29, 2016
Lux Aqua Czech s.r.o Incorporated as a wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) with effect from May 6, 2016
Brightyclean (Spain) S.L A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) with effect from August 10, 2016
Forbes Container Line Pte Ltd., Singapore Under Creditors Winding up since May 2016.
Forbes Bumi Armada Offshore Limited Ceased to be a subsidiary company with effect from October 12, 2016
Lux Aqua Paraguay SA A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) with effect from December 1,2016
Lux Osterreich Professional GmbH A wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) with effect from December 15, 2016
Lux Professional GmbH Incorporated as a wholly owned subsidiary of Lux Professional International GmbH (a step down subsidiary of Eureka Forbes Limited) with effect from December 22, 2016
Forbes Edumetry Limited Under Voluntary Winding up

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,

Eureka Forbes Limited & its Subsidiaries (Collectively EFL Group)

"I cant change the direction of the wind, but I can adjust my sails to always reach my destination", said Jimmy Dean and this is characteristic of EFL Group.

A year that held change as the mantra for the corporates and the nation at large, a year which experienced digitisation of businesses and a way to connect with consumers driven by none other than the Government of India, demonetization was the word that swayed the fortunes of corporations and the sentiments of the consuming class. While the year saw the changing political landscape in India, the approach to development, the new growth opportunities thanks to SMART Cities, Digital India and our role as a nation in the emerging world order led to our turn to transform.

EFL has its presence across the country in various products/segments such as water purifiers, vacuum cleaners, air purifiers and home security solutions with the brands such as Aquaguard, AquaSure, EuroClean, Aeroguard and EuroVigil. EFL has its presence in European, ASEAN and UAE countries under the brand Lux.

The complexion of the business within EFL is changing and moving towards the retail sale and digital through the web from a direct selling business. This evolution from Direct Sales to Retail Sale and Sale on a digital platform over the last few years has been brought with successfully and by retaining or even improving our own addressable market share. In the last three-four years competition in the water purifier space has increased and a number of players of international repute have entered the market. EFL has taken an aggressive target of regaining and retaining the market share of electric water purifiers. This entails a significant investment in the market in the form of advertisement and sales promotion which resulted in regaining a 12% market share in the financial year 2015-16 taking EFL market share to 67% and retaining the same in the financial year 2016-17.

During the year, EFL had set key priorities in terms of (a) Project Everest: Leading the water purification market to dominate with 67% share, (b) Enhance focus on Air, Cleaning & Security to build a 2nd category, (c) Build digital capability for a greater connect with employees and customers, (d) Measure & Build Customer loyalty and leverage the brand value of EFL and brands and (e) Diversity of people and businesses to build a future proof EFL. And in each one of them, as a team dedicated to building a tandarust - healthy organisation, EFL rose to the occasion.

While the demonetisation, though a highly well-intentioned move for the medium to long run, created an impact in the market with the last 4 month offtake reducing by 20-30% vis-a-vis the corresponding year for EFL as well as competing brands, however, EFL was able to retain the 67% (value) share of the domestic electric water purification market in-spite of the drop in sales. The year also witnessed the business composition change where the Retail Channel (Consumer Division) and Partner Channels (Franchise Direct Operators & Franchise Business Partners in Direct Sales) grew while the one time core business of Customer Response Centre (CRC business of Direct Sales) de-grew marginally vis-a-vis last year, this was mainly due to unbudgeted increase in wage bill.

On the second priority, the first Made in India for the world Air Purifier Aeroguard 4S was launched. The category grew to over 42% of the domestic market and EFL plans focusing on this growing segment in the years ahead. In cleaning the indomitable 79% share of the market remained untouched with a refreshed product portfolio.

The focus on digitisation resulted in fruits with over 350,000 validated leads and Rs.1000 Millions turnover from digital platform resulted in a quantum growth over previous year. Unlike the e-com wave of discounts EFL held the price and strategic partnership with Google helped EFL dominate in the space with over 70% Share of Voice in the categories EFL has been present in. Additionally mobility both in Sales & Service began to show early benefits.

The Employee diversity ratio moved from 7% to 12% with Direct Sales leading the way with 16% Lady Eurochamps. EFL was also able to improve the retention in performers by 10% over the previous year.

One of the significant achievements by the EFL team was the improvement in the NPS (Net Promoter Score) - measured across 5 touchpoints in the relationship of a customer with EFL. Across all the five touch points the team registered more than 25% improvement over the previous financial year with post sales service team topping the charts in both mandatory service as well as complaint management.

Consolidation of manufacturing facilities has improved productivity at factories.

The social initiative of Eureka Forbes, Jal Daan resulted in an unprecedented 32,00,000 pledges and massive interactions on the Social Media thereby over 22 plants benefiting over 20,00,000 individuals who otherwise lacked access to safe drinking water. The result, one amongst, 6 Honourees in the World and the 1st Indian, Mr. Suresh L. Goklaney of Eureka Forbes was honoured with the Rotary Responsible Business Award 2016 by Rotary International on Rotary Day at the United Nations (UN), November 12, 2016.

The institutional business, Forbes Pro, to transition from products to services with integration of sales and service. Key Account Management System and a digital push would enable growth in this business.

On the international front, opening of business to business segment, new channels i.e. Retail, e-tail and party plans together with opening of 10 new markets, re-organisation of operations, cost-optimisation drive, elimination of non value adding services, focus on core business and a new category of mattresses had been the thrust during year gone by.

A positive growth of 4% over the previous year and retaining the profitability therefore in a tormentors year was a respectable performance by EFL. EFL plans to introduce newer technologies that would give an edge for EFL in the market place to improve the business.

Forbes Technosys Limited (FTL)

During the year under review FTL continued its growth across multiple sectors and dimensions, albeit with pressures on revenue growth.

The FY 2016-17 was a year of consolidation for FTL across its business verticals and product range in a challenging business environment. The FY 2015-16 and the current Financial Year proved to be a difficult one for the ATM, Cash deposit and Recycler, Sorter and Coin Vending business segment as Banks had put on hold procurement plans due to the withdrawal of subsidies by RBI in the first half of FY 2016-17. The subsidy which was introduced in the previous year incentivized and partially reimbursed banks for purchasing and deploying these machines. This withdrawal negatively impacted the sale volumes of these products and thereby profitability of the company.

The second half of FY 2016-17 was impacted by the Demonetization drive of the Government. FTLs major customer being Banks, this impacted the sale of all banking equipment and given the predominance of banking in FTLs business portfolio, this caused a sharp impact on sales during the second half of the year as FTLs key customers were focused on addressing the public needs arising out of Demoetization. Demonetization, a well- intentioned move for the medium to long run as the Government is trying to move directly to pure digital channels by reducing cash, though cash usage cannot be fully eliminated, this itself has created different set of opportunities which are being evaluated. Consequently, as cash is gradually returning into the ecosystem, there is also a realization that intermediate cash deposit mechanisms will continue to play an important part in the near future along with other opportunities being identified. In the long term, FTLs business is well poised to capitalize on this opportunity.

Sales of Forbes Xpress offerings were also adversely affected due to non/limited availability of cash during the months from November 2016 to March 2017. The entry of a major telecom player, who offered free services from October 2016 to March 2017, impacted other Telecom players whose prepaid pack business was impacted and therefore FTLs business was impacted with them.

All the above factors not only impacted FTLs performance but also of its competitors in the same industry, in addition to causing a sudden reduction in overall demand.

Therefore, FTL had to shift focus on generating margins from Services, as other revenue streams were impacted. Services showed over 100% increase in revenues over the previous year and helped improve profitability.

FTL also had an impressive foray into the Insurance sector, with the introduction of self-service solutions for the same. New services via Forbes Xpress are also being planned for insurance and micro-loans.

FTLs "Bill Payments business" case study has been ranked amongst the top 10 cases in the "ISB-Ivey Global Case Competition 2016" ( This case study was related to the transformation of FTLs Bill Payments business from a Capex/Opex intensive business model to a highly scalable Low Capex/Low Opex model. This case study competition is conducted jointly by Indian School of Business (ISB) and Ivey Business School, Western University, Ontario, Canada. The competitions objective is to identify and publish the best India-centric business cases from around the world. The response to this years ISB-Ivey Global Case Competition was overwhelming with intents to participate coming in from across the globe. Besides most major business schools in India, participants from

institutions in Malaysia, Botswana, the United Arab Emirates, Canada, the Netherlands, and the United States also evinced interest in the competition.

FTL was awarded the Solution of the year 2016 by Posiflex, a global leader in POS solutions, for Airport Retailing Solution which comprised of E-POS Solution at Duty Free Shops of 15 International Airports in India.

FTL continues to make investments in new services such as Domestic Money Transfer, infrastructure creation, expansion of office and service network, new product development and exports. These investments will help us in addressing emerging opportunities in domestic and international markets in the near future.

The year saw continued growth of the Domestic Money Transfer Business of Forbes Xpress, which operates through a network of franchisees who also provide other services like Recharge, Bill Payments and Ticketing.

Future plans and strategy includes the creation of new products and solutions for long term profitable growth such as:

• Account opening/eKYC kiosks: For Banking, Telecom and Insurance segments;

• 7/12 ATM: Installed at collectorate offices, this kiosk provides information pertaining to land ownership records to citizens for a nominal fee. This enables transparent and instant access to land record information to all citizens. This kiosk is the first of its kind in the world;

• SIM & Card Dispensing kiosks;

• Internet of Things: Remote Management Solutions for non-kiosk devices and equipment; and

• Integration with Bharat Bill Payment System, being piloted by National Payments Corporation of India.

In the long term FTL will benefit from Government programs such as digitalization of payment systems, Digital India and Make in India, Smart Cities etc. which are expected to create demand for industry and for the companys specialized products and services.

FTL also undertakes periodic review of the existing business models in the context of current business/market/regulatory/technology environments and make necessary course corrections to adapt to the changing environment as required.

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

With a fleet of four ships and a total capacity of 52000 DWT, SPFSL is one of the largest chemical tanker owners in India. SPFSL is committed to the safe and efficient transport of chemical cargoes for all its customers and partners. All the four vessels maintain qualification of atleast five Oil Majors including Shell, Exxon, Chevron, BP and Total for carrying their products. The ship operations are handled through a pool.

Earnings in FY 2016-17 were affected adversely due to increase in supply of ships and increase in fuel prices. A total of 190 new build ships joined the chemical tanker fleet in the year 2016. The increase in fuel oil prices resulted in reduction in the net voyage earnings.

The average earnings per day per ship were down to USD 9,992 as compared to USD 10,493 per day per ship during previous year. The average down time for the year has been 1.75 days per ship.

Seaborne chemicals trade grew by about 4% YoY in 2016 but the freight rates remained subdued due to increase in supply. As per an estimate, about 190 new building ships joined the chemical tanker fleet in 2016.

The effect of Brexit was clearly visible by slowdown in Europe. After a lacklustre 2016, the global economic activity is set to pick up from mid 2018. Advanced economies are projected to make small steps while growth in emerging market and developing economies continue to drive the global growth projections.

The widely-expected continuation of the low energy price environment in the short-term is expected to support healthy expansion in seaborne chemical trade, although subdued economic growth in some regions could hold back the pace of demand growth. Nevertheless, growth in chemicals tonne-mile trade is expected to outpace expansion in supply this year, partly driven by firm growth in long-haul US-Far East trade, particularly in methanol. Middle Eastern petrochemical capacity is also expected to increase, which should support exports from the region in coming years. However, growing Middle Eastern demand may limit the extent of this expansion to some extent. Meanwhile, rising chemical demand in Asia is expected to be a key driver of global demand growth going forward

Forbes Bumi Armada Limited (FBAL)

FBAL has successfully established their manning services in India. FBAL is currently providing specialised manning services to FPSOs located in Mumbai High.

Restructuring of Portfolio

In sync with the long term strategy of the Company to exit those businesses which were not a strategic fit with the long term vision of Company and in a manner that optimizes value, the Company has during the FY 2016-17, exited its Container Freight Stations and Logistics businesses and received a consideration ofRs. 963 millions.

The Company also sold its entire shareholding (50.001%) in Forbes Bumi Armada Offshore Limited, a joint venture with Bumi Armada Berhad to Shapoorji Pallonji Oil and Gas Private Limited at a consideration of Rs. 125 millions.

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 had filed a Review Petition against the dismissal of Special Leave Petition before the Honble Supreme Court (SC) which has been dismissed. The Company is exploring options available.

Dividend & Transfer to Reserves

Your Directors are pleased to recommend for the approval of the Members a dividend of Rs. 2.50 per equity shares (previousyear: Nil). The dividend, if approved by the Members would involve a cash outflow of Rs. 38.8 millions including dividend tax. In accordance with SEBI (Listing Obligations and Disclosure Regulations), 2015, the Board of Directors 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. 417.3 millions (Previous Year Rs. (544.5) millions) in the Profit & Loss Account.

Share Capital

The paid up Equity Share Capital of the Company as on March 31, 2017 was Rs.128.99 millions. 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, 2017 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 Rs.1000 millions were outstanding during the year ended March 31,2017.

• 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 III 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 Controls and Systems

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.

Deloitte Haskins & Sells LLP, the statutory auditors of the Company has audited the financial statements included in this annual report and has issued a report on our internal financial controls over financial reporting as defined in Section 143 of the Act.

Statutory Compliances

The Company ensures compliance of applicable laws. 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 in line 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. During FY 2016-17, 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 provisions of the Act relating to Corporate Social Responsibility were not applicable to the Company for the FY 2016-17. The Board of Directors of the Company has, however, voluntarily constituted a Corporate Social Responsibility Committee in compliance with Section 135 ofthe Act.

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.

Risk Management

Risk management process includes identification of risk, its underlying dynamics, mitigation mechanism, prioritization of risk, measurement of key indicators and establishing a monitoring system. A Company-wide awareness of risk management policies and practices are being inculcated to minimize the adverse effect of risks on the operating results and the subject of management of risks is being approached in a planned and coordinated manner. Elucidation of role clarity, understanding of level of authority and reporting system is expected to help this process significantly. It is realized that this is a continuous process, requiring continued updating, based on changing business conditions and that risk management and performance improvement will go hand in hand.

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.

Mr. Ashok Barat ceased to be director and Managing Director of the Company with effect from April 27, 2016. Ms. Ameeta Chatteijee, Mr. T. R. Doongaji, and Mr. Kannan Dasaratharaman, Independent Directors of the Company resigned due to other personal and professional commitments with effect from April 1, 2016, May 4, 2016 and May 6, 2016 respectively. Ms. Sunetra Ganesan resigned as Chief Financial Officer of the Company with effect from April 30, 2016.

The Board of Directors place on record their sincere appreciation for the valuable services rendered by Ms. Ameeta Chatterjee, Mr. T. R. Doongaji, Mr. Kannan Dasaratharaman and Mr. Ashok Barat to the Board and to the Company and Ms. Sunetra Ganesan as Chief Financial Officer of the Company.

Ms. Aslesha Gowariker was appointed as an Additional Director of the Company w.e.f. June 30, 2016. She was appointed as an Independent Director of the Company for a term of 5 (five) consecutive years with effect from June 30, 2016 by the shareholders of the Company at the AGM held on August 24, 2016.

Mr. Mahesh Tahilyani was appointed as Managing Director of the Company with effect from April 28, 2016. Mr. Nirmal Jagawat was appointed Chief Financial Officer of the Company with effect from September 30, 2016.

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.

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

Human Resources Development and Industrial Relations

The year saw a major rationalization of manpower on account of divestment of Logistics & Shipping and Container Freight Station Businesses. The same was handled professionally and compassionately with reasonable compensation through Voluntary Retirement Scheme and/or ex-gratia payments. Post divestment, consolidation of various functions was undertaken for a leaner and an effective organisation. On the Human Resource Front, we continue with the implementation of Performance Management System, capturing Key Result Areas and Key Performance Indicators for linking reward to performance and variable.

HR function continues to partner the business for talent infusion, learning and development, leadership development and talent management. A major intervention/training pertaining to Value Selling was done for all sales and marketing personnel of Engineering business. The training and development interventions for the identified Talent Pool of executives continued in collaboration with CII (Confederation of Indian Industries).Employee engagement and moral was kept high through various cultural and other events including participation in social causes such as Daan Utsav/Joy of Giving week which the Company has been doing for the last few years. Industrial Relations, by and large, with the unit unions continued to be cordial.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT- 9 is annexed herewith as Annexure VIII and forms part of this Report.

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.