BOARD'S REPORT

The Directors present herewith their Report and the Audited Financial Statements for the year ended 31st December, 2015

DIVIDEND

The Board of Directors do not recommend any dividend for the year 31st December, 2015 in view of the loss incurred by the Company during the year.

TRANSFER TO RESERVE

The Company has not transferred any amount to the reserves during the current financial year.

REVIEW OF OPERATIONS

Revenue from standalone operations for the year at Rs.273,609  Lakh has increased by Rs.138,368 Lakh, from Rs.135,241 Lakh in the year 2014, an increase of about 102% over the previous year. Consolidated revenue for the year at Rs.306,870 Lakh has increased by Rs.135,628 Lakh, from Rs.171,242 Lakh in the year 2014, an increase of about 79% over the previous year.

During the year under report, the Company and National Highways Authority of India (NHAI) agreed on a one time final settlement (OTS) of all awards received, claims under consideration at various forums, pending disputes and amounts outstanding in the Company's and Joint Venture's (comprising of the Company and Italian-Thai Development

Public Company Limited) books of account under trade receivables and unbilled work-in-progress in respect of all the contracts executed by the Company and the Joint Venture. This settlement with NHAI has resulted in a loss of Rs.12,397 Lakh, which has been written off as an exceptional item in the profit and loss account by the Company and the Joint Venture. (2014 - Nil).

The Company incurred a loss before tax but after exceptional item of Rs.8,875 Lakh compared to a profit before tax of Rs.2,795 Lakh (after write back of depreciation) for the year 2014.

The Consolidated loss before tax but after exceptional item was Rs.8,459 Lakh compared to profit before tax of Rs.2,689 Lakh (after write back of depreciation) for the year 2014.

On a review of the position of outstanding debts, there are no write off of bad debts during the year (2014- Nil) except as stated above.

Total value of new contracts secured during the year aggregated Rs.296,875 Lakh (2014 - Rs.254,061 Lakh). Major contracts include-

• Dredging and reclamation works for development of 4th container terminal in Jawaharlal Nehru Port (JNP)-Phase-1, Navi Mumbai.

• Engineering, Procurement & Construction (EPC) Contract For Container Terminal 5 at Mundra, Gujarat.

• Development of West Quay North (WQ 7 & WQ 8) Berth In Inner Harbour of Visakhapatnam Port ( Left Over Works) for Visakhapatnam Port Trust.

• Providing and laying 1400mm dia / 1800mm dia. RCC NP4 class drainage gravity line on BPC Road , by micro-tunneling method for Vadodara Mahanagar Seva Sadan.

• Designing, Providing, Constructing, Erecting, Testing & Commissioning of Intake Channel, Jackwell & Pump House, Approach Bridge, Break Pressure Tank, Raw Water Pumping Machinery With Transformer Substation & Power Connection to Head Works for Bhama Askhed Water Supply Scheme for Pune Municipal Corporation.

During the year under report, a number of contracts were completed including-

• Total Civil Construction job for ION Exchange (India) Ltd. for India Bulls Project at Nasik, Maharashtra.

• Construction of North Cargo Berth II at VOC Port, Tuticorin, Tamil Nadu.

• Design and Construction of Wharf Structure at Nhava Sheva Gateway Terminal at JNP, Navi Mumbai.

• Various Piling and Civil Works in Gujarat, Maharashtra, Andhra Pradesh, Orissa, West Bengal, Madhya Pradesh, Haryana, Tamil Nadu, etc.

PERFORMANCE AND FINANCIAL POSITION OF  SUBSIDIARY AND JOINT VENTURES

As required under Regulation 36 of the Securities and Exchange Board of India ( Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 'Listing Regulations, 2015') and Section 129 of the Companies Act, 2013 (hereinafter referred to as the 'Act'), the Consolidated Financial Statements, which have been prepared by the Company in accordance with the applicable provisions of the Act and the applicable Accounting Standards, form part of this Annual Report

A statement containing the salient features of the performance and financial position of the said Subsidiary and Joint Ventures as required under Rule 5 of the Companies (Accounts) Rules, 2014 is provided in Form AOC-1 - marked Annexure 1 and forms part of the Consolidated Financial Statements.

The Annual Accounts of the Subsidiary Company will be made available to any Member of the Company seeking such information at any point of time and are also available for inspection by any Member of the Company at the Registered Office of the Company on any working day during business hours up to the date of the Annual General Meeting.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE  EARNINGS AND OUTGO

The Company lays significant emphasis on improvements in methods and processes in its areas of construction and operations. The Research & Development division of the Company continues to enjoy recognition by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. The primary focus of research is to continually refine the frequently used systems at our project sites to derive optimization, reduction in the breakdowns, improve effectiveness and efficiency of use and hence provide a competitive edge for any project. Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith and marked Annexure 2.

STATUTORY AUDITORS

M/s Walker Chandiok & Co LLP, Chartered Accountants, Mumbai (Firm Regn. No. 001076N/ N500013) were appointed as the Statutory Auditors of the Company at the last Annual General Meeting held on 13th May, 2015 to hold office for a term of two years, i.e. till the conclusion of the 39th Annual General Meeting, subject to ratification of their appointment at the next following Annual General Meeting. As required under the provisions of Section 139(1) of the Act, the Company has received written consent from Walker Chandiok & Co LLP, Chartered Accountants, Mumbai, informing that their appointment, if made, would be in accordance with the provisions of the Act, read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014 and that they satisfy the criteria provided in Section 141 of the  Act.

AUDITORS' REPORT

With regard to paragraph 8 of the Auditors' Report your Directors state that:

Trade receivables and Unbilled Work-in-progress as at 31st December, 2015 include amounts aggregating H3,033 Lakh and H479 Lakh respectively, which have been outstanding for a substantial period of time. The Company has been actively negotiating for recovery and also pursuing legal action of the balance receivables. In view thereof, the management is reasonably confident of their recovery.

DIRECTORS AND KEY MANAGERIAL  PERSONNEL

a) Key Managerial Personnel (KMP)

b) Directors

Mr. Pathai Chakornbundit will retire by rotation and, being eligible, offers himself for re-appointment.

At a meeting of the Board of Directors held on 5th August, 2015, Mr. Piyachai Karnasuta was appointed as an Additional Director of the Company with effect from 5th August, 2015, liable to retire by rotation.

Mr. Piyachai Karnasuta holds office as Additional Director upto the date of this Annual General Meeting and, is eligible for appointment.

The Board of Directors at its meeting held on 5th November, 2015 has re-appointed Mr Adun Saraban as the Managing Director of the Company for a period of 3 years w.e.f. 1st January, 2016, subject to approval of the Members of the Company. The terms and conditions of his re-appointment and remuneration have been provided in the Notice convening the 38th Annual General Meeting.

c) Declarations by Independent Directors

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Act confirming that they meet with the criteria of independence as laid down in Section 149(6) of the Act.

d) Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p),  Section149(8) and Schedule IV of the Act, Clause 49 of the  Listing Agreement and corresponding Listing Regulations, 2015, Annual Performance Evaluation of the Board, the Directors as well as Committees of the Board has been carried out.

The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors.

During the year the Independent Directors of the Company met on 5th November, 2015.

e) Number of Meetings of Board of Directors

8 meetings of Board of Directors were held during the year under report. For details of the Meetings of the Board, please refer to the Report on Corporate Governance, which forms part of this Report.

REMUNERATION OF DIRECTORS AND KMPs

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

The Initial Public offer was made by the Company in the year 1979 and the issue was for 3,02,000 Ordinary Shares of Rs.10 each, at par. The shares of the Company were first listed on BSE Limited in the year 1980. The closing share price of the Company at BSE Limited on 31st December, 2015 was Rs.109.80 per equity share of face value of Rs.1 each indicating a Compounded Annual Growth Rate of 17.68%. This is after giving effect to the subdivision of face value of shares from Rs.10 to Rs.1 and benefit on account of shares issued by way of  Bonus but excluding the dividend accrued.

(h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

(j) The key parameters for any variable component of remuneration availed by the directors:

The key parameters for the variable component of remuneration availed by the Directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Policy for Remuneration of the Directors, Key Managerial Personnel and other Employees.

(k) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: None.

(l) Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirms that:

• in the preparation of the annual accounts for the financial year ended 31st December, 2015, the applicable accounting standards have been followed and there have been no material departures;

• 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 financial year and of the loss of the Company for that period;

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

• they have prepared the annual accounts on an on- going concern basis;

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

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

AUDIT COMMITTEE

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

During the year under review, there was no instance wherein the Board had not accepted any recommendation of the Audit Committee

VIGIL MECHANISM FOR DIRECTORS AND  EMPLOYEES

The Company has formulated and published a Whistle Blowing and Prevention of Sexual Harassment Policy to deal with instances of harassment, victimization and discrimination, if any. This Policy has adequate safeguards against victimization of the whistle blower and ensures protection of the whistle blower's identity.

INTERNAL FINANCIAL CONTROLS

The Company has an internal control system commensurate with the size, scale and complexity of its operations. In order to enhance controls and governance standards, the Company has adopted Standard Operating Procedures which ensure that robust internal financial controls exist in relation to operations, financial reporting and compliance. In addition, the Internal Audit function monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations. Periodical reports on the same are also presented to the Audit Committee.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans, guarantees and investments as required under the provisions of Section 186 of the Act have been given in the Financial Statements.

PARTICULARS OF CONTRACTS OR  ARRANGEMENTS WITH RELATED PARTIES

None of the transaction with related parties falls within the scope of Section 188(1) of the Act.

Pursuant to Clause 49 of the Listing Agreement and corresponding Regulation 23 of the Listing Regulations, 2015, all the related party transactions received the approval of the Audit Committee.

The related party disclosures as specified in Para A of Schedule V read with Regulation 34(3) and 53(f) of the Listing Regulations, 2015 are given in the Financial Statements.

There were no material transactions with the related parties during the year. In view of this, disclosure in form AOC-2 is not required.

A policy governing the related party transactions has been adopted and the same has been uploaded on the Company's website.

RISK MANAGEMENT

As required under Clause 49 of the Listing Agreement and corresponding Regulation 21 of the Listing Regulation, 2015, the Company has constituted a Risk Management Committee comprising Mr. Per Hofvander, Mr. Adun Saraban and Mr. B. K. Saha, Senior Executive Vice President of the Company. Mr. Per Hofvander is the Chairman of this Committee.

The Company has adopted a risk management policy and has in place a mechanism to inform the Audit / Board Members about risk assessment and minimization procedures and its periodical review.

More details in respect to the risk management are given in Management Discussion and Analysis (MD&A).

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board of Directors has constituted a CSR Committee comprising Mr. Per Hofvander, Mr. Pathai Chakornbundit and Mr. Adun Saraban. Mr. Per Hofvander is the Chairman of this Committee.

The Company has adopted the CSR Policy and the same has been uploaded on the Company's website.

In accordance with the CSR Policy, the Company had spent H19.74 Lakh on CSR activities for the year 2015 on 3 Projects.

The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are in Annexure 3 and forms part of this Report.

NOMINATION AND REMUNERATION COMMITTEE

The details pertaining to the composition of the Nomination and Remuneration Committee are included in the Report on Corporate Governance, which forms part of this Report.

The Nomination and Remuneration Policy on Directors' appointment and remuneration is given in Annexure 4 and forms part of this Report.

The Company has adopted the Nomination and Remuneration Policy and the same has been uploaded on the Company's website.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Particulars of employees as required under Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Board's Report and marked Annexure 5. In accordance with the provisions of Section 136 of the Act, the Annual Report and Accounts are being sent to all the Members of the Company excluding the aforesaid information and the said particulars will be made available on request and also made available for inspection at theRegistered Office of the Company. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act, read with the Rules therein, the Secretarial Audit Report issued by M/s P. N. Parikh Associates, Practicing Company Secretaries is attached and marked Annexure 6 to this Report.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) and Section 134 (3)(a) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the annual Return in Form MGT-9 is attached and marked Annexure 7 to this Report.

DEPOSITS

The Company has not accepted any deposit from the public falling under Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the Listing Agreement and corresponding Listing Regulations, 2015, the Management Discussion and Analysis is attached hereto and marked Annexure 8 and forms part of this Report

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement and corresponding Listing Regulation, 2015, the Report on Corporate Governance alongwith a certificate of compliance from the Auditors are attached hereto and marked Annexure 9 and form part of this Report.

SUB DIVISION OF SHARES

With effect from 24th August, 2015 every equity share in the Company of face value of H10/- each was sub divided into ten equity shares of having a face value of H1/- each.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year under review and the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, there were no significant and material orders passed by any regulator or court or tribunal, impacting the going concern status of the Company and its future operations.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under.

REPORTING OF FRAUD

The Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Act. ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007

The Company has an established Integrated Management System comprising of Quality Management System conforming to ISO 9001:2008, Environmental Management System (EMS) conforming to ISO 14001: 2004 and Occupational Health and Safety Management System conforming to OHSAS 18001:2007 at all offices, project sites and depots. During the year, the Company's accreditation has been audited and compliance to the requirements of the International Standards has been confirmed by DNV GL-Business Assurance (DNV GL- BA).

The Company is amongst the few construction companies who have established an Integrated Management System and are maintaining the system with proper customer satisfaction, compliance to legal and non-regulatory requirements as per the Standards along with continual improvements to the system.

OUTLOOK

A number of factors are supporting the general feeling that an industrial recovery is not far ahead. Besides, the government's focus on 'Make in India' and improving the 'Ease of Doing Business', the signs of a revival in investment/ consumption cycle coupled with a fall in inflation/interest rates are expected to drive the manufacturing sector growth. Moreover, various announcements made in the FY15 and FY16 budgets to address the structural issues plaguing the industrial and infrastructure sectors are gradually gaining traction on the ground.

The Wholesale Price Index (WPI) and Consumer Price Index (CPI)-based inflation to come in at 2.7% and 4.9%, respectively, in FY17, assuming a normal monsoon, a moderate hike in procurement prices, benign global commodity prices and some weakness in the rupee.

The recovery in the construction sector is expected to be gradual and would be linked with on-ground impact of the policy measures as well as availability of funding. With high leverage, ability to raise funds via stake sale in subsidiaries, monetization of assets, or dilution of equity will be key in improving liquidity and capital structure of construction companies that have been aggressive in the BOT space in the past.

The reversal in the interest rate cycle and lowering of interest rates will help ease the debt servicing burden. However, this alone will not be sufficient for improving credit metrics. Any significant improvement in liquidity profile and credit metrics of construction companies will take time and will be contingent on improvement in working capital cycle (by way of faster execution and release of stuck receivables/ retention money), improvement in pace of execution and ability to raise long term funds by way of stake sale or equity placements.

The Company has maintained its focus on project selection for bidding after due evaluation of risks, profitability and project cash flow and has been able to build a strong and diverse order book worth H520,434 lakh as on 31st December, 2015. The Company is also in the L1 status on a couple of large contracts amounting to over H240,000 lakh, which are likely to be converted into firm contracts. The Company is confident of improving its performance in the coming year, although executional challenges will continue to exert pressure on profit margins for the next couple of quarters.

PARENT COMPANY

Italian-Thai Development Public Company Limited (ITD) is engaged in the business of civil engineering and infrastructure construction and development and has been a major builder of Thailand's infrastructure for over 50 years. ITD achieved an annual consolidated revenue for the year 2014 of approximately Baht 49,160 million (about

Rs.9,438 crore) which puts it in the lead position amongst contractors in Thailand. In 2014, ITD had a skilled work force of over 28,200 employees, including around 1,660 qualified engineers. An experienced in-house training division provides its employees with continuous training in safety and construction skills. The business operations of ITD are in eleven major categories namely: buildings; expressways, highways, railways and bridges; airports; industrial plants; mining; pipelines and utility works; ports, jetties, river protection, dredging & reclamation and marine works; dams and hydroelectric power; mass rapid transit systems; steel fabrication; and telecommunications.

DEPOSITORY SYSTEM

It is mandatory that the shares of the Company are traded in electronic form. The Company has entered into Agreements with both the depositories ie. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). FINANCIAL YEAR Pursuant to Section 2(41) of the Act, the Company had submitted a petition to the Company Law Board for continuing its financial year January to December. Pursuant to the said petition, the Company Law Board, New Delhi granted permission to follow the financial year 1st January to 31st December.

INDUSTRIAL RELATIONS

Relations with staff and labour remained peaceful and cordial during the year under review.

ACKNOWLEDGEMENT

The Directors thank ITD for the continued support extended by it and the guidance provided to your Company.  The Directors thank all employees for their contribution and the shareholders, customers and bankers for their continued support.

For and on behalf of the Board

Premchai Karnasuta

Chairman  

Date : 24th February, 2016