THE DIRECTORS ARE PLEASED TO PRESENT THE NINETEENTH ANNUAL REPORT OF THE COMPANY TOGETHER WITH THE AUDITED FINANCIAL RESULTS FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2017.

Financial Results

The Financial Performance of the Company for the financial year ended on 31st March, 2017 is summarized below:

(Rs. in Lacs)

Operational Review

Your Company has achieved net turnover of Rs. 2,09,118.54 lacs for the financial year ended 31st March, 2017 as against Rs. 182,752.13 lacs in the previous financial year, thereby registered a growth of 14.43% over the last year's turnover. The operating profit of your company for the financial year ended 31st March, 2017 is Rs. 19,170.54 lacs, whereas it was Rs. 19,080.27 lacs during the last financial year, thereby registered a growth of 0.5% over the last year's operating profit.

Currently your Company is operating in project related activities which includes Project execution, Overhauling & Maintenance, Fabrication and Erection of structural works, Erection, Testing and Commissioning of boilers and its auxiliaries, Transmission & Distribution and EPC contract, Roads and Bridges, Civil construction,

Solar Energy projects, Waste Management projects.

To name a few, the following are some of the projects running presently:

1. Rehabilitation & Upgradation of Parli-Pimpla-Dahiguda Road from existing Ch. km 0.000 to 18.495 (SH-64) (Design Ch. Km 0.000 to km 18.440) to two/four lane with paved shoulder (length-18.44 km) in Maharashtra on EPC basis from Public Works Department (PWD), Maharashtra.

2. Rehabilitation & Augmentation of four laning of Kutchery Chowk- Ranchi-Piska More-Biju Para section from km 0.000 to 34.000) of NH-75 in the state of Jharkhand on EPC mode from National Highway Authority of India (NHAI).

3. Rehabilitation & Upgradation of Ajanta-Buldhana-Khamgaon-Shegaon-Deori Road (Ajanta to Buldhana section) length-49.13 km in Maharashtra on EPC basis from Public Works Department (PWD), Maharashtra

4. Rehabilitation & Upgradation ofNanded-Bhokar-Himayatnagar-Kinwat-Sarkhani-Mahur-Arni-Road (Sarsam-Himayatnagar-Kothar Package-II) km 33.00 to km 90.00 to two-lanes with paved shoulders in Maharashtra on EPC basis from Public Works Department (PWD), Maharashtra.

5. Construct and widen the existing 2-lane Bodhre to Dhule road section of NH-211 to four/six lane configuration in the State of Maharashtra on Hybrid annuity Model (HAM).

6. Two laning of Existing Hunli-Anini Road on EPC Basis from Design KM 53.500 to KM 92.500 (Existing KM 56.320 to KM 97.650) in the State of Arunachal Pradesh Under SARDP-NE for National Highways & Infrastructure Development Corporation Limited. This project is in JV with PCL-Eagle Infra India Limited.

7. Ash Dyke Package and Boiler erection package for Kudgi Super Thermal Power Project, Bijapur, Karnataka.

8. Erection, Testing and Commissioning of Boiler Unit-2, 2X800 MW for NTPC, Lara Super Thermal Power Project, at Lara Dist. Raigarh, Chattisgarh.

9. CW System and Make up Water System Civil Works Package for NTPC Lara Super Thermal Power Project, Stage-I 2x800 MW at Lara, District. Raigarh, Chattisgarh.

10. CW System and Make up Water System Civil Works Package for Meja Thermal Power Project, 2x660 MW at Meja, P.O. Kohdar, Tehsil-Meja Dist. Allahabad, Uttar Pradesh.

11. Construction of 490 Nos. M.C. Type of Quarters (35 blocks, each block of 14 units) Storied Buildings (G 1type) at 2x600 MW STPP and Construction of 1 No. GM Bungalow, 10 Nos. MA type of Quarters and 192 Nos. MB type of Quarters (16 blocks, each block of 12 units) Storied Buildings (G 1 type) at 2 x 600 MW STPP Jaipur Mandal, Adilabad Dist. Telangana State.

12. CW System and Make up Water System Civil Works Package for Darlipali Super Thermal Power Project, Stage-I 2x800 MW at Darlipali, Dist. Sundargarh, Odisha.

13. Development of Regional (MSW) Municipal Solid Waste to Energy (Electricity) and Scientific Landfill Facility in Patna on PPP.

14. Design, Engineering, Manufacture, Assembly, Testing at Works, Supply of the Equipments, Mandatory Spares, Cement, Reinforcement Steel, Structural Steel for Civil Works as well as Structural Works, Architectural Works, Transportation & Delivery to Site of all the Equipments & Mandatory Spares including Special Tools & Tackles, if any, for the Balance of Plant Package for Parli TPS Project Units, 1X250 MW.

15. Rehabilitation and Upgrading to 2 lanes/2 lane with Paved Shoulders Configuration and Strengthening of Madhugiri Mulbagal Section (km 343.800 to km 483.151) of NH-234 in the State of Karnataka (Package No. NHIIP-KA-234-10) for Lot-I- km 343.800 to km 400.330 under Phase-I of National Highways Inter-connectivity Improvement Projects (NHIIP).

16. Engineering, Procurement and Construction of Rehabilitation and Upgrading to 2 lanes/2 lane with Paved Shoulders Configuration and Strengthening of Bankura-Purulia Section (km 0.0 to km 84.0) of NH-60A in the State of West Bengal under Phase-I of National Highways Interconnectivity Improvement Projects (NHIIP).

17. Rehabilitation and Upgrading to 2 lanes/2 lane with Paved Shoulders Configuration and Strengthening of Sitamarhi-Jaynagar-Narahia Section (km 40 to km 219.945) of NH-104 in the State of Bihar for Lot-I km 40.00 to km 79.40, under Phase-I of National Highways Inter-connectivity Improvement Projects (NHIIP-BR-104-11).

18. Rehabilitation and Upgrading to 2 lanes/2 lane with Paved Shoulders Configuration and Strengthening of Sitamarhi-Jaynagar-Narahia Section (km 40 to km 219.945) of NH-104 in the State of Bihar for Lot-II km 79.40 to km 156.50, under Phase-I of National Highways Inter-connectivity Improvement Projects (NHIIP-BR-104-11).

19. Construction of Medical College, Firozabad for UPRNNL.

20. Package-A Civil, Structural and Architectural Works Etc of BTG Area for Unit#1 & 3 for 3x660MW NTPC North Karanpura STPP, Jharkhand.

In addition to the above, your company is executing various prestigious projects related to Design, Supply, Test, Transport, Construction, Erection, Testing and Commissioning of Distribution Lines, Power Sub Stations etc. and also Overhauling & Maintenance of various systems for Power Stations like Koradi, Khaperkheda, Chandrapur, Bhusawal, Sarni, Korba, Parli, Talcher, Wanakbori etc.

Furthermore your company is engaged in the prestigious Civil Construction projects like Design and Engineering, Supply, Marketing & Civil Construction of Residential Complex of Green Project, Goa and Construction of houses for Kanpur Development Authority, Kanpur.

Your Company has successfully commissioned 5 MW Solar PV Capacity project awarded by JNNSM Phase-2 Batch-1 at Karajgi, Solapur.

Your Company has not gone through any operational discontinuation during the reporting period.

Future Prospects

Infrastructure

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling India's overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. The Government has announced its target of H25 trillion (US$ 376.53 billion) investment in infrastructure over a period of three years, which will include H8 trillion (US$ 120.49 billion) for developing 27 industrial clusters and an additional H5 trillion (US$ 75.30 billion) for road, railway and port connectivity projects. Infrastructure sector includes power, bridges, dams, roads and urban infrastructure development. In 2016, India jumped 19 places in World Bank's Logistics Performance Index (LPI) 2016, to rank 35th amongst 160 countries.

India's core sector growth rose 3.4 per cent in January 2017, on the back of robust natural gas and steel output, which recorded a year-on-year growth of 11.9 per cent and 11.4 per cent respectively, according to data from the Ministry of Commerce & Industry.

In the Union Budget 2017-18, the Government of India has taken the following measures for the development of infrastructure.

- Increased total infrastructure outlay and defence capital expenditure by 10 per cent and 20.6 per cent to Rs. 3,96,135 crore (US$ 59.18 billion) and Rs. 86,488 crore (US$ 13.1 billion) respectively, over FY17 revised estimate.

- Railway expenditure allocation has increased by 8 per cent to Rs. 1,31,000 crore (US$ 19.58 billion) for laying down 3,500 km of railway lines in 2017-18.

- Affordable housing has been given infrastructure status.

- Lock-in period for long-term capital gains on land and buildings has been reduced from three to two years.

Power Sector

With a production of 1108 TW, India is the world's fifth largest producer and consumer of electricity with a total demand of 1905 TW expected by 2022. The power sector accounts for almost a quarter of the projected investments amongst all the infrastructure sectors between 2012-17. A Total Thermal Installed Capacity of 211.67 GW as of May, 2016.

The Government has set a generation capacity addition target of 88.5 GW during 2012-17. Against this, generation capacity addition of 101.64 GW is likely to be achieved during 2012-17. The generation capacity addition during 2017-22 is being worked out considering the likely generation capacity addition of 101.64 GW during 2012-17.The revised tariff policy 2016 ensures adequate return on investment to companies engaged in power generation, transmission and distribution and ensures financial viability of the sector in order to attract investments by companies."

Government of India through Ministry of Power launched the initiative of Ultra Mega Power Projects (UMPPs) i.e. 4,000 MW super thermal power projects (both pit head and imported coal based) in November 2005 with the objective to develop large capacity power projects in India. Power Finance Corporation Ltd (PFC) has been appointed as the Nodal Agency to facilitate the development of these projects. Various inputs for the UMPPs are tied up by the Special Purpose Vehicle (SPV) with assistance of Ministry of Power & Central Electricity Authority (CEA). CEA is involved in selection of sites for these UMPPs.

Ministry of Power is finalizing the guidelines for determination of tariff through transparent process of bidding for procurement of power from UMPPs based on allocated domestic captive coal blocks and to be set up on Build, Own and Operate (BOO) basis" (the Guidelines). To carry out the bidding process expeditiously, the bid documentation shall be as per the Request for Qualification (RFQ), Request for Proposal (RFP) and the Power Purchase Agreement (PPA) (collectively the "Standard Bidding Documents"(SBDs)) issued by the Central Government in Terms of these Guidelines.

Road Sector

India has the second largest road network in the world, spanning a total of 4.87 million kilometres (kms). Roads in India transport over 60 per cent of all goods and 85 per cent of total passenger traffic. The roads and bridge infrastructure industry is expected to be worth USD 19.2 billion by FY17.

The National Highways account for 1.9 per cent of the total road network in India and are expected to reach 100,000 kms by the end of the 2017 from 97,135 kms in FY15. The Government of India has formulated a seven-phase programme, 'National Highway Development Project (NHDP), vested with National Highways Authority of India (NHAI), for the development of National Highways in the country.

The private sector has emerged as a key player in the development of road infrastructure in India. Increased industrial activities, along with increasing number of two and four wheelers have supported the growth in the road transport infrastructure projects. The government's policy to increase private sector participation has proved to be a boon for the infrastructure industry with a large number of private players entering the business through the public-private partnership (PPP) model.

With the Government permitting 100 percent foreign direct investment (FDI) in the road sector, several foreign companies have formed partnerships with Indian players to capitalise on the sector's growth.

The NHAI has invited bids for the preparation of detailed project reports for 44 freight corridors, inter-corridors and feeder routes to reduce the cost and time of the freight movement across the country, under the Ministry of Roads Logistic Efficiency Enhancement Programme (LEEP).

Three memorandum of understanding (MOUs) were signed between National Green Highways Mission (NGHM) and ITC Ltd, Yes Bank Ltd and Teri for setting up a Centre for Innovations in Green Pathways in order to enhance research and innovations in the field.

Renewable Energy Sector

India has the fifth largest power generation portfolio in the world and its current renewable energy contribution stands at 44.812 GW which includes 27.441 GW of Wind power and 8.062 GW of Solar power installed capacity in the country. (As on 31.07.2016).

India is fourth largest installed capacity of wind power and third largest installed capacity of concentrated solar power (CSP) Renewable energy contributes 14.7% of the total installed capacity in the country as on 31.07.2016. Ambitious target of 175 GW of renewable power by 2022 which will include 100 GW of Solar power, 60 GW from wind power, 10 GW from biomass power and 5 GW from small hydro power.

The target of National Solar Mission has been up scaled to 100 GW from 20 GW of grid connected solar power by 2022, which creates a positive environment among investors keen to tap into India's renewable energy potential. Government of India has a target of adding 175 GW of renewable power in the country by 2022, which will offer massive investment opportunities across the value chain.

1. India is the fourth largest importer of oil and the 15th largest importer of petroleum products and Liquefied Natural Gas (LNG) globally. The increased use of indigenous renewable resources is expected to reduce India's dependence on expensive imported fossil fuels.

2. The government of India through Ministry of New and Renewable Energy (MNRE) is playing a proactive role in promoting the adoption of renewable energy resources by offering various incentives such as generation based incentives (GBIs), capital and interest subsidies, viability gap funding (VGF), concessional finance, fiscal incentives etc.

The National Solar Mission aims to promote the development and use of solar energy for power generation and other uses, with the ultimate objective of making solar energy compete with fossil based energy options.

The objective of the National Solar Mission is to reduce the cost of solar power generation in the country through long term policy, large scale deployment goals, aggressive R&D and the domestic production of critical raw materials, components and products.

The government has created a liberal environment for foreign investment in renewable energy projects. The establishment of a dedicated financial institution - the Indian Renewable Energy Development Agency (IREDA), makes for renewed impetus on the promotion, development and extension of financial assistance for renewable energy and energy efficiency/ conservation projects.

3. Renewable energy is becoming increasingly cost competitive as compared to fossil fuel based generation, like the prices of solar modules have declined by almost 80% since 2008.

4. Reserve Bank of India (RBI) has revised the guidelines for all scheduled commercial banks including renewable energy in the categories priority sector, in addition to existing categories making significant inroads for renewable energy in the priority sector lending, also bank loans for solar rooftop systems to be treated as a part of home loan/ home improvement loan with subsequent tax benefits.

5. Focus on skill development of workforce: "Suryamitra Scheme" launched in May 2015 to create 0.05 million trained personnel within a period of 5 years (201516 to 201920).

Dividend

Your Directors are pleased to recommend 7.5% dividend, i.e. Re.0.075 per equity share of Re. 1/- each (previous year Rs. 1.50 per equity share of Rs. 10/- each) for the financial year ended 31st March, 2017. The final dividend on equity shares, if approved by the members would involve a cash outflow of Rs. 3.40 crore, including dividend tax.

Public Deposits

During the year ended 31st March, 2017, your Company has not accepted any deposits from the public. There is no deposit remained unpaid/unclaimed at the end of the financial year.

Particulars of Loans, Guarantees or Investments

The particulars of loans, guarantees, and investments have been disclosed in the financial statements.

Management Discussion and Analysis Report

The Management Discussion and Analysis as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, forms part of this Report.

Corporate Governance Report

A Corporate Governance Report in the format given in Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with Auditor's Certificate thereon, forms part of this report.

Consolidated Accounts

As required under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Consolidated Financial Statements of the Company and its subsidiaries and associates have been attached with the annual accounts of the Company.

Sub-division of face value of the equity share

Pursuant to the ordinary resolution passed by the members of the Company at the 18th annual general meeting held on 22nd September, 2016, the face value of the equity shares of the Company is sub-divided from Rs. 10/- each to Re. 1/- each. 3rd December, 2016 was decided as a record date for the purpose of sub-division of the equity shares i.e. members holding equity shares of the Company as on record date were entitled for receipt of equity shares with new face value of Re. 1/- each in lieu of existing equity shares of Rs. 10/- each.

Allotment of Equity Shares

During the Financial year 2016-17, the Company allotted 50,50,000 warrants convertible into equity shares to the promoter group companies. Out of said 50,50,000, Warrants aggregating to 15,75,000 were converted into equity shares of Rs. 10/- each on 27th September, 2016.

During the Financial year 2016-17, the Company has issued and allotted 189001600 bonus equity shares of H1/- each to the members of the Company in the ratio 1:1. Members holding shares on record date 3rd December 2016 were entitled for receipt of bonus equity shares.

Directors and key managerial personnel

As per Article 150 read with Article 149 of Articles of Association of the Company and Section 152 (6) of the Companies Act, 2013 ('Act') Mr. Vijay R. Gutte (DIN-01179049) Whole-time Director of the Company is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. The Board of Directors recommends his reappointment at the forthcoming Annual General Meeting of the Company.

During the financial year 2016-17 there were following changes in the Board of Directors of the company:

a. Mr. Ratnakar M. Gutte, Chairman has opted for retirement w.e.f. 25th January, 2017.

b. Mr. Anupam Dhiman, Whole-time Director has resigned w.e.f. 16th January, 2017.

c. Change in designation of Mrs. Sudhamati R. Gutte from Executive Director to Non-executive Director w.e.f. 25th January, 2017.

d. Mr. Vijay R. Gutte re-appointed as Whole-time Director of the Company w.e.f. 29th May, 2017 for a period of five years by way of postal ballot.

There is no any other change in the Board of Directors except mentioned hereinabove.

Pursuant to the provisions of Section 149 of the Act, all Independent Directors have submitted a declaration that each of them meet the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as an independent director during the year.

Director's Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) in the preparation of annual accounts for the financial year ended on 31st March, 2017, the applicable accounting standards have been followed along with proper explanation to material departures;

b) 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 & fair view of the state of affairs of the Company at the end of the financial year 2016-17, and of the profit of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts of the Company on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and operating efficiently.

Company's Policy on Director's Appointment and Remuneration

Policy on Director's Appointment

a. The Nomination and Remuneration Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend his /her appointment, as per Company's Policy.

b. A person should possess adequate qualification, expertise and experience for the position he/she is considered for appointment. The Committee has authority to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the position.

c. The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution.

Policy on Directors' Remuneration

1. Remuneration to Managing/ Whole-time/ Executive Director, KMP and Senior Management Personnel:

a. The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.

b. The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.

2. Remuneration to Non-Executive/Independent Director:

a. The Non-Executive/Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.

b. All the remuneration of the Non- Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.

c. An Independent Director shall not be eligible to get Stock Options and also shall not be eligible to participate in any share based payment schemes of the Company.

d. Any remuneration paid to Non- Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied:

i. The Services are rendered by such Director in his capacity as the professional; and

ii. In the opinion of the Committee, the director possesses the requisite qualification for the practice of that profession.

3. Remuneration to Key Managerial Personnel and Senior Management:

a. The remuneration to Key Managerial Personnel and Senior Management shall consist of fixed pay and may include incentive pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with the Company's Policy.

b. The Fixed pay shall include monthly remuneration, employer's contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from to time.

c. The Incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management, to be decided annually or at such intervals as may be considered appropriate.

Remuneration Ratio of the Directors/Key Managerial Personnel (KMP)/Employees:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished hereunder:

*Remuneration of Mr. Ratnakar M. Gutte is mentioned up to date of cessation i.e. 25th January 2017.

*Remuneration of Mr. Anupam Dhiman is mentioned upto date of cessation i.e. 16th January 2017.

Note:

1. There is 7.42% increase in the median remuneration of employees in the financial year 2016-17.

2. There are 859 permanent employees on the rolls of company.

3. 8% average percentile increase was made in the salaries of employees other than managerial personnel in the last financial year as compared to 9% increase in overall managerial remuneration and PBT of the Company has increased by 31% in that financial year.

4. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

Number of Board Meetings held

Six meetings of the board were held during the year. For details of meetings of the board, please refer to the Corporate Governance Report, which forms a part of this report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its committees. The evaluation was done on parameters such as attendance at board meetings and general meetings, level of active participation at the board deliberations, strategy formulation and execution, resource management, contribution and independence of judgment thereby safeguarding the interest of the company, etc. and such other suggested parameters.

The board also carried out annual performance evaluation of the working of its Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee and Corporate Social Responsibility Committee on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Nomination and Remuneration Committee also carried out the performance evaluation of the Board on the criteria such as attendance at board meetings and general meetings, level of active participation at the board deliberations, strategy formulation and execution, resource management, contribution and independence of judgment thereby safeguarding the interest of the company, etc.

In a separate meeting of independent directors, performance ofnon-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

The Directors expressed their satisfaction with the evaluation process.

Development and Implementation of Risk Management Policy

The Board of Directors of the Company has adopted Risk Management Policy the main objective of this Policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the Company's business. In order to achieve the key objective, this Policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

It has set out risk factors which inter-alia includes External Factors such as Economic Environment and Market conditions, Political Environment, Competition, Revenue Concentration and liquidity aspects, Inflation and Cost structure, Technology Obsolescence, Legal, Fluctuations in Foreign Exchange, etc. and Internal Risk Factors such as Project Execution, Contractual Compliance, Operational Efficiency, Hurdles in optimum use of resources, Quality Assurance, Environmental Management, Human Resource Management, Culture and values, etc. detailed framework to deal with key areas of risks encompassing project execution risk, regulatory risk, inflation risk, risk specific to the company, etc.

All the Senior Executives under the guidance of Managing Director and Board of Directors has the responsibility for over viewing management's processes and results in identifying, assessing and monitoring risk associated with Organisation's business operations and the implementation and maintenance of policies and control procedures to give adequate protection against key risk.

Vigil Mechanism:

In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism has been uploaded on the website of the Company at www.sunilhitech.com.

Anti-Sexual Harassment Policy

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaint on sexual harassment was received during the 2016-17.

Corporate Social Responsibility (CSR)

The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-A of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this report. CSR policy of the Company is available on the website of the Company www.sunilhitech.com

Audit Observations

(i) Statutory Auditor's Observation:

The statutory auditor has not reported any observations in their report for the financial year 2016-17.

(ii) Secretarial Auditor's Observation:

The Company has delayed in allotment of bonus shares, filing e-forms with ROC; TDS, VAT, IT and Service Tax Returns with concerned authorities. Management's Reply:

The Company has delayed in allotment of bonus shares due to delay in obtaining listing approval for shares allotted upon conversion of warrants and filing various e-forms with ROC; TDS, VAT, IT and Service Tax returns due to administrative reasons.

Auditors

i) Statutory Auditors:

The Statutory Auditors of the Company M/s. V. Sankar Aiyar & Co., Chartered Accountants has expressed their unwillingness to continue as statutory auditors of the company from the conclusion of the ensuing annual general meeting of the Company.

The Board of Directors has recommended appointing M/s. K.K. Mankeshwar & Co., Chartered Accountants as statutory auditors of the Company for a period of five years from the conclusion of ensuing annual general meeting of the company up to the conclusion of 24th Annual General Meeting of the Company.

ii) Cost Auditors

The Board of Directors of the Company has appointed M/s. Ujwal P. Loya & Co., Cost Accountants as Cost Auditor of the Company for the financial year 2017-18. The Board seeks ratification by members for payment of remuneration of Rs.1 lac plus service tax and reimbursement of out of popcket expenses at the forthcoming annual general meeting of the Company.

iii) Secretarial Audit

According to the provision of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Company Secretary in Practice enclosed as a part of this report in Annexure-B.

Related Party Transactions

The company's related party transactions are entered with its group companies, firms and individuals. The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialization and the Company's long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of group companies and business efficiencies. All related party transactions are negotiated on an arms-length basis, and are intended to further the Company's interests. A policy on related party transactions is posted on the website of the company at www.sunilhitech.com. No Material Related Party Transaction(s), i.e. transaction(s) with a related party exceeding ten percent of the annual consolidated turnover as per the last audited financial statements were entered during the year by your Company. Accordingly, the disclosure of Related Party Transaction(s) as required under Section 134(3) (h) of the Companies Act, 2013 in form AOC 2 is not applicable.

Extract of the annual return

As provided under Section 92(3) of the Act, the extract of the annual return in prescribed Form MGT-9, enclosed as a part of this report in Annexure-C.

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

Disclosure pursuant to Section 134(3)(M) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts), Rules 2014, is enclosed as Annexure-D.

Acknowledgement

Your Directors take this opportunity to express their gratitude for the valuable support extended by the customers, banks, financial institutions, investors, business associates, central & state government authorities. Your Directors also appreciate the employees at all levels for their continued support to the Company. Your Directors believe that with the whole hearted support of employees, stakeholders, bankers and our valuable customers, we will continuously excel in the path of success and growth.

By the order of the Board

For Sunil Hitech Engineers Limited

Sunil Ratnakar Gutte Vijay Ratnakar Gutte

Managing Director Whole-time Director

Place: Mumbai

Date: 19th May, 2017