Directors Report of Hindustan Dorr-Oliver Ltd.

Mar 31, 2016

To,

The members

The Directors take pleasure in presenting the 41st Annual Report together with the Audited Financial Statements for the financial year ended March 31, 2016.

Financial Results

The financial performance of the Company for the year ended March 31, 2016 is summarized below:

(Rs. in million)

Particulars	For the year ended March 31, 2016	For the year ended March 31, 2015
Net Sales	2053.82	3483.02
Other Income	39.21	156.82
Total Income	2093.03	3639.84
Profit/(Loss) from Ordinary Activities	(1618.99)	(4618.79)
Exceptional Item	-	2011.16
Profit/(Loss) after Exceptional Items	(1618.99)	(6629.95)
Provision for taxation	13.63	1101.60
Profit/ (Loss) after taxation	(1632.62)	(7731.55)
Balance brought forward from previous year	(9410.61)	(1678.17)
Depreciation adjustment	-	(0.89)
Balance available for appropriation	(11043.23)	(9410.61)
Retained Profits carried forward to Balance Sheet	(11043.23)	(9410.61)

DIVIDEND

In view of the loss incurred by the Company, your Directors regret and express their inability to recommend dividend for the financial year ended March 31, 2016.

PERFORMANCE

Your Company achieved a gross turnover of Rs. 2,053.82 million for the year ended March 31, 2016 as against Rs. 3,483.02 million for the previous year ended March 31, 2015. On an annualized basis, turnover for the current year ended March 31, 2016 decreased by 41.03 percent as compared to the previous period.

FUTURE OUTLOOK

The Government of India has started taking several remedial measures for the infrastructure and engineering sector which are facing acute finance and business related problems. Your Directors are hopeful that they will be able to get new investments into the company and revive the business.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2016 was Rs. 144.01 million. During the year under review the Company has not issued any shares or any convertible instruments.

SUBSIDIARIES

The Consolidated Financial Statements prepared by the Company include the financial information of subsidiary companies, namely HDO Technologies Limited and DavyMarkham India Private Limited.

Pursuant to Section 136(1) of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the said subsidiary companies are required to be annexed to the accounts of the holding Company. The Companies Act, 2013 had granted general exemption for listed companies from complying with the provisions of section 136 of the Companies Act, 2013 subject to certain conditions being fulfilled by the Company. Accordingly, the Balance Sheet, Profit and loss account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. A statement containing the brief details of financials of subsidiary companies for the year ended March 31, 2016 is enclosed in the Annual Report. The annual accounts of the said subsidiary companies and relevant information shall be made available to the shareholders who seek such information and are also available for inspection by any shareholder at the Registered Office of the Company, on any working day during business hours. Copy of the said details will be provided upon receipt of written request from the shareholders.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, Consolidated Financial Statements of the Company prepared in accordance with Accounting Standards issued by Institute of Chartered Accountants of India, are attached and forms part of the Annual Report.

PUBLIC DEPOSITS

The Company did not accept any deposits from public during the year. There are no unclaimed deposits as on March 31, 2016.

CORPORATE GOVERNANCE

Your Company is committed to adhere to the standards of Corporate Governance as set out by the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 (SEBI LODR Regulations). Detailed Report on Corporate Governance as stipulated under Schedule V of SEBI LODR Regulations is provided under separate section and forms part of this Report.

The requisite certificate from Practicing Company Secretaries, confirming the compliance of the conditions stipulated under SEBI LODR Regulations is attached to the Report on Corporate Governance.

TRANSFER OF UNCLAIMED / UNPAID AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend relating to the financial year 20082009 is due for remittance to the Investor Education and Protection Fund established by the Central Government in the month of October, 2016.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 the Report on Management Discussion and Analysis is annexed to this report and forms part of the Annual Report.

BOARD OF DIRECTORS

Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr. S C Sekaran (DIN: 00334115), Executive Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

During the year under review, Mr. Vivek Wahi was appointed as Nominee Director on behalf of Bank of India w.e.f. April 28, 2016.

All the Independent Directors of the company have given declarations to the Company that they meet the criteria of independence as specified under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transaction with the Company other than sitting fee for attending the Board and Committee meetings.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of your Company are Mr. S C Sekaran, Executive Director, Mr. S C Mundhekar, Chief Financial Officer and Mr. G Ramakrishna, Company Secretary.

MEETINGS

During the financial year under review, four Board Meetings and one independent directors’ meeting was held. The details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings.

BOARD COMMITTEES

The Board has constituted various committees viz Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Executive Committee etc., to enable better management of the affairs of the Company, with terms of reference in line with provisions of Companies Act, 2013 and SEBI LODR Regulations. The details of composition of the committees are disclosed in Corporate Governance Report, which forms part of this report.

BOARD EVALUATION

Pursuant to provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Nomination and Remuneration Committee laid down the criteria for performance evaluation of the Individual Directors, the Board and its Committees. Accordingly, the Board of Directors has carried out an annual evaluation of its own performance, its committees and individual directors.

The performance of the Board was evaluated through a structured questionnaire which provides a powerful and valuable feedback for improving the board effectiveness, maximizing strengths and highlighting areas for further development.

The performance of the Committees was evaluated by the Board through a structured questionnaire, by considering the effective recommendations made by the Committees, from time to time, to the Board of the Directors of the Company and effectiveness of Committee meetings etc.

The Board evaluated the performance of the individual directors by considering the contribution of the individual directors to the Board and Committee meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, relationship with fellow board members, willing to devote time and effort to understand the Company and its business etc through a structured questionnaire.

As per Schedule IV of the Act, Independent Directors of the Company at a separate meeting, evaluated the performance of non-independent directors, the Board as a whole and the Chairman of the company taking into account the views of executive and non-executive directors. Independent Directors also reviewed the quality, quantity and timeliness of flow of information between management of the Company and the Board, for the effective performance of the board. Evaluation of performance of Independent Directors was done by the entire board, excluding the independent director being evaluated.

VIGIL MECHANISM

Your Company has established a Vigil Mechanism policy for your Directors and employees to safeguard against victimization of persons who use vigil mechanism and report genuine concerns. The Audit Committee shall oversee the vigil mechanism.

STATUTORY AUDITORS

M/s Chaturvedi & Partners, Chartered Accountants, New Delhi, were appointed as Statutory Auditors of the Company, to hold office until the conclusion of the ensuing Annual General Meeting for the financial year 2016-2017, pursuant to the approval of the members at the 41st Annual General Meeting.

It is proposed to ratify their appointment as Statutory Auditors for the financial year 2016-2017 at the ensuing Annual General Meeting.

INTERNAL AUDITORS

During the year under review, M/s Dipan Patel & Associates, Chartered Accountants were appointed as Internal Auditors of the Company in place of M/s. VCG & Co., Chartered Accountants and they monitor the internal control system of the Company at its works and at the Mumbai office. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. Even through this non-production period the Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Mr. K Narasimhulu, Company Secretary in Practice to undertake the Secretarial Audit of your Company. The Secretarial Audit Report for the financial year 2015-2016 forms part of the Annual Report as Annexure “A” to the Board’s Report.

The Secretarial Audit Report does not contain any adverse remarks or qualifications.

SIGNIFICANT AND MATERIAL ORDERS

Certain Creditors have filed winding up petitions against the Company under Section 433 and Section 439 of the Companies Act, 1956, before the Hon’ble High Court of Mumbai. The Company is taking necessary steps including signing of Memorandum of Understandings and or filing the consent terms in the High Court with the creditors for withdrawal of such petitions. The matter is sub judice and outcome of which is subject to the company fulfilling the payment conditions of Memorandum of Understandings/consent terms.

EXPLANATION TO STATUTORY AUDITORS QUALIFICATIONS IN INDEPENDENT AUDITORS’ REPORT FOR 2015-2016:

With reference to observations made in Auditor’s report, the notes of account is self-explanatory and therefore do not call for any further comments. The results for the year ended March 31, 2016 have been subjected to an audit by the Statutory Auditors of the Company and a qualified report has been issued by them thereon.

1. With respect to Company’s ability to continue as going concern.

The group is confident of implementing the business plan and meeting its obligations in due course of time. Accordingly financial statements have been prepared as a Going Concern.

2. With respect to material uncertainties over the reliability of bank guarantees encashed by the customers , unbilled revenue, trade receivables etc.

The management of the Company is confident of positive outcome of the negotiations and recovering the aforesaid dues.

3. With respect of invocation of corporate guarantee executed for one of our subsidiary and initiation of recovery actions against the company.

The management is in engagement with the lender to resolve the matter and the respective liability is appearing in the books of subsidiary Company.

4. With respect to provision for diminution/bad debts in the value of investment/advances in our Indian subsidiary.

Considering the long term investment, no provision for diminution/bad debts in value of investment/advances is considered necessary by the management.

5. With respect to trade receivables and unbilled revenue of certain projects

The management of the Company is in continuous engagement with respective contractee/clients including initiation of legal proceedings confident of positive outcome of the negotiations and recovering the aforesaid dues.

6. With respect to one lender initiated recovery proceedings against the company.

The company is in process of reconciling the difference.

7. With respect to the non-availability of confirmation of balances from trade receivables/trade payables and one of the lenders.

The management is of the opinion that these accounts will not require any material adjustment upon receipt of balance confirmation.

RELATED PARTY TRANSACTIONS

As per the requirement of provisions of the Act and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Company has formulated a policy on Related party transactions to ensure the transparency in transactions between the company and related parties. The said RTP Policy is also available at Company’s website/www.hdo.in.

All Related Party Transactions entered by the Company during the year under review were in ordinary course of business and on Arm’s length basis. There were no materially significant related party transactions entered by the company during year under review.

Since all the related party transactions entered into by the Company, were in ordinary course of business and were on Arm’s length basis, disclosure in form AOC-2 as required under Section 134(3)(h) of the Act is not applicable.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, investments made and guarantees issued under Section 186 of the Act, during year under review, are provided in notes to financial statements, which forms part of this report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION ETC.

Due to the de-merger of the Manufacturing Division with effect from April 01, 2011 already approved by the Hon’ble Bombay High Court vide their orders date July 18, 2012, the Company has nothing to report under this head specifically. However, the Company is conscious of its responsibility in respect of energy conservation and technology absorption and adopts suitable measures towards this end from time to time.

The foreign exchange earnings for the year ended March 31, 2016 stands at Rs. Nil million. The amount spent on account of expenditure in foreign currency stands at Rs.42.60 million.

PARTICULARS OF EMPLOYEES

The information 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:

a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

S. No.	Non-Executive Directors	Ratio to median remuneration
1	Mr. P R Tripathi (Sitting Fees)	0.49
2.	Mr. Ramendra Gupta (Sitting Fees)	0.30
3.	Mrs. Hima Bindu Myneni (Sitting Fees)	0.15
S. No.	Executive Director	Ratio to median remuneration
1	Mr. S C Sekaran	3.35

b) The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial year	% increase in remuneration in the financial year
NIL	NIL

c) The percentage increase in the median remuneration of employees in the financial year: NIL

d) The number of permanent employees on the rolls of the Company: 305

e) The explanation on the relationship between average increase in remuneration and Company performance.

The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects Company performance, the performance pay is also linked to organization performance, apart from an individual’s performance.

f) Comparison of the remuneration of the key managerial personnel against the performance of the Company:

g) There are no employees of the Company drawing remuneration in excess of Rs.60 lakhs p.a. or Rs. 5 lakhs per month during the financial year 2015-2016.

Aggregate remuneration of key managerial personnel (KMP) in FY 2016 (Rs. million)	1.39
Revenue (Rs. million)	2093.03
Remuneration of KMPs (as % of revenue)	0.066 percent
Profit before Tax (PBT) (Rs. million)	—
Remuneration of KMP (as % of PBT)	—

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure “B” in the prescribed Form MGT- 9 which forms part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013, the Directors confirm in respect of the audited annual accounts for the year ended March 31, 2016:

a) In the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) 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 as at March 31, 2016 and of the profit /loss of the Company for that period;

c) 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) Prepared the annual accounts on a going concern basis;

e) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

f) Laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

There were no cases of sexual harassment of women reported in the company during the financial year 2015-2016. INDUSTRIAL RELATIONS

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the Company continued to have cordial and harmonious relations with its employees.

HEALTH, SAFETY AND ENVIRONMENT

In line with our Corporate vision to improve the safety and quality of life of employees and to mitigate the risks of Health, Safety and Environment (HSE), the Company is actively involved in design and engineering of its projects through the nonpolluting manufacturing processes, scrupulous compliance with environment norms and development of environmental products.

Reinforcing our commitment to high levels of Quality and best-in -class services to customers, the company has Integrated Management System (IMS) consisting of ISO 9001: 2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across the organization inclusive of project sites accredited by M/s International Standards Body, Australia.

The Company is committed to progressively maintaining the best in class standards of HSE care for its people, practices, processes and services. The Company also promotes active participation of its employees and contractors to mange HSE risks with a goal to preventing accidents, injuries and occupational illness. The Company conducts on-going safety awareness programmes which together with safety audits and continual safety training strengthens the processes and systems in this area. The Company also conducts continuous training of the staff at all levels regarding HSE issues, with experts being invited to train the senior management.

Up gradation of safety procedures at project sites and training has been of prime importance as a part of workplace safety.

As a part of its commitment to environment, which has always been in the forefront, your Company has taken up several environmental management initiatives and remains committed to clean environment.

As a leader in environment and waste management technology market, HDO provides complete solutions for waste reduction and water conservation for broad spectrum of industries like refineries, minerals, pulp and paper, sugar, etc.

CORPORATE SOCIAL RESPONSIBILITY

As per the Companies Act, 2013, all companies having net worth of Rs. 500 Crore or more, or turnover of Rs.1,000 Crore or more or a net profit of Rs. 5 Crore or more during any financial year will be required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising three or more directors, at least one of whom will be an Independent Director.

CSR activities, as per the provisions of the Companies Act, 2013, could not be undertaken by the Company in view of the losses incurred by the Company during the current financial year.

ACKNOWLEDGEMENT

The Directors would like to express their appreciation for support and cooperation received from the holding company, bankers, financial institutions, suppliers, associate sub-contractors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services provided by the executives, staff and workers of the Company. The Board of Directors also thank all the employees for their contribution and continued cooperation throughout the year and is confident of improving the stakeholder value in the Company.

For and on Behalf of the Board of Directors

For Hindustan Dorr-Oliver Limited

S.C. Sekaran R.Balarami Reddy

Executive Director Director

(DIN:00334115) (DIN: 00022176)

Hyderabad May 30, 2016

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 40th Annual Report and the audited accounts for the year ended March 31, 2015, Financial Results

The financial performance of the Company for the year ended March 31, 2015 is summarised below

(Rs in millions)

For the For the year ended year ended Particulars March 31, March 31, 2015 2014

Net Sales 3483.02 2551.99

Other income 156.82 216.22

Total Income 3639.84 2768.21

Profit/ (Loss) from (4618.79) (1374.31) Ordinary Activities

Exceptional Item 2011.16 -

Profit / ( Loss ) after (6629.95) (374.31) Exceptional Items

Provision for taxation 1101.60 (359.27)

Profit/(Loss) after taxation (7731.55) (1015.04)

Balance brought forward from (1678.17) (663.13) previous year

Depreciation adjustment (0.89) -

Balance available for appropriation (9410.61) (1678.17)

Retained profits carried forward (9410.61) (1678.17) to Balance Sheet

DIVIDEND

in view of the loss incurred by the Company, your Directors regret and express their inability to recommend dividend for the financial year ended March 31, 2015.

PERFORMANCE

Your Company achieved a gross turnover of Rs. 3483.02 million for the year ended March 31, 2015 as against Rs.2551.99 million for the previous year ended March 31, 2014. On an annualised basis, turnover for the current year ended March 31, 2015 increased by 36.48 percent as compared to the previous year.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2015 was Rs.144.01 million. During the year under review the company has not issued any shares or any convertible instruments.

FUTURE OUTLOOK

The negative effects of global recessionary conditions are being attenuated by various countries through huge investments in infrastructure and India is no exception in this regard. Your directors are confident that the present environment of investments in infrastructure by the State and Central Governments assures growth of operations of your Company.

SUBSIDIARIES

The Consolidated Financial Statements prepared by the Company include the financial information of subsidiary companies, namely HDO Technologies Limited and Davy Markham (India) Private Limited.

Pursuant to Section 136(1) of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the said subsidiary companies are required to be annexed to the accounts of the holding Company. The Companies Act, 2013 had granted general exemption for listed companies from complying with the provisions of section 136 of the Companies Act, 2013 subject to certain conditions being fulfilled by the Company. Accordingly, the Balance Sheet, Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. A statement containing the brief details of financials of subsidiary companies for the year ended March 31, 2015 is enclosed in the Annual Report. The annual accounts of the said subsidiary companies and relevant information shall be made available to the shareholders who seek such information and are also available for inspection by any shareholder at the Registered Office of the Company, on any working day during business hours. Copy of the saio details will be provided upon receipt of written request from the shareholders.

PUBLIC DEPOSITS

The Company did not accept any deposits from public during the year. There are no unclaimed deposits as on March 31, 2015.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The Report on Corporate Governance regarding compliance with conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchanges forms part of the Annual Report.

The declaration regarding compliance with Code of Business Conduct anc Ethics for Directors and Senior Management forms part of the Report on Corporate Governance.

TRANSFER OF UNCLAIMED / UNPAID AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend relating to the financial year 2007- 2008 is due for remittance to the Investor Education and Protection Fund established by the Central Government in the month of October, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing

Agreement with the Stock Exchanges in India, in a separate section forming a part of the Annual Report.

BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013, Mr. R. Balarami Reddy {DIN: 00022176), Director of the Company retires at the ensuing annual general meeting of the company and, being eligible, offered himself for re-appointment.

During the year under review, Mr. M. L. Majumdar (DIN: 00926724) and Mr. S.D. Kapoor (DIN: 00043634), Independent Directors, resigned as Directors of the company with effect from August 13, 2014 and August 16, 2014 respectively. Further, Mr. Ramendra Gupta (DIN: 00306663) was appointed as Independent Director w.e.f. November 13, 2014.

To comply with the provisions of Section 149 (1) of the Companies Act, your company has appointed Mrs. Hima Bindu Myneni (DIN: 07120807) as Independent Women Director w.e.f. March 31,2015, subject to approval of the members at the ensuing Annual General Meeting.

Accordingly, it is proposed to appoint Mrs. Hima Bindu Myneni as Independent Directors for a term of 5 consecutive years whose office is not liable to retire by rotation.

All independent directors have given a declaration stating that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of listing agreement.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of your Company are Mr. S.C. Sekaran, Executive Director, Mr. S.C. Mundhekar, Chief Financial Officer and Mr Hemish Purushottam, Company Secretary.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination and Remuneration and Stakeholder committee.

MEETINGS

During the financial year under review, five Board Meetings and one independent directors' meeting was held. The Details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings

VIGIL MECHANISM

Your Company has established a Vigil Mechanism Policy for your Directors arid employees to safeguard against victimisation of persons who use vigil mechanism and report genuine concerns. The Audi: Committee shall oversee the vigil mechanism.

STATUTORY AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, New Delhi, the Statutory Auditors of the Company, hold office until the conclusion of the Annual General Meeting for the financial year 2016-2017 pursuant to the approval of the members at the 39th Annual General Meeting.

It is proposed to ratify their appointment as Statutory Auditors for the financial year 2015-2016 at the ensuing Annual General Meeting.

INTERNAL AUDITORS

M/s V. C. G. & Co., Chartered Accountants, are the Internal Auditors of the Company and they monitor the internal control system of the Company at its works and at the Mumbai office. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. Even through this non-production period the Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed K. Narasimhulu, Company Secretary in Practice to undertake the Secretarial Audit of your Company. The Secretarial Audit Report for the financial year 2014-2015 forms part of the Annual Report as Annexure "A" to the Board's report.

SIGNIFICANT AND MATERIAL ORDERS

Certain Creditors have filed winding up petitions against the Company under Section 433 and Section 439 of the Companies Act, 1956, before the Hon 'ble High Court of Mumbai. The Company is taking necessary steps including signing of Memorandum of Understandings and or filing the consent terms in the High Court with the creditors for withdrawal of such petitions. The matter is sub judice and outcome of which is subject to the company fulfilling the payment conditions of Memorandum of Understandings/consent terms.

EXPLANATION TO STATUTORY AUDITORS QUALIFICATIONS IN INDEPENDENT AUDITORS' REPORT FOR 2014-2015

With regard to note No 31 to the financial statements regarding preparation of financial statements of the Company on a going concern basis - the management is taking all possible steps to increase and improve the operations of the company for generation of profits. Also steps are being initiated to look for strategic investors and to infuse additional capital into the business.

With regard to Note 32 regarding investments in its Indian subsidiary having book value aggregating to Rs. 1,538 million - in view of future prospects of business, value of properties and increased operations, the company does not envisage any diminution in value of investments.

With regard to Note 35 the Company has considered Trade Receivables and other receivable amounting to Rs. 534.93 million in respect of certain projects, as good and fully recoverable the amounts are considered realizable based on favourable developments arising out of continuous contract management steps taken and continuous engagement with the customers for realisation of dues by the company. The Board of Directors is of the view that the receivable covered in the Auditors Report are good and fully recoverable.

With regard to Note 36 to the financial statement regarding Unbilled Revenue of Rs. 839.60 million in respect of certain projects where progress is insignificant during the year and the billing is pending for a longer period have been considered good and fully recoverable. The Board of Directors is of the view that since these are milestone billings as per Contract these will get converted into actual billings once the milestone is completed.

With regard to Note 34 in respect of trade receivables, mobilization advances, retention money, trade payables and certain bank balances, external confirmations of the balance not available.The company had made an effort to obtain confirmation of balances from the Debtors. However the confirmations were not received by the company. The Board of Directors is of the view that the receivable amount covered in the Auditors Report are good and fully recoverable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Your Company has established a Policy for determining related party transactions. The Audit Committee oversees the related party transactions. The Related Party Transaction Policy is available on the website of your Company. None of the transactions with any of related parties were in conflict with your Company 's interest. Attention of members is drawn to the disclosure of transactions with related parties set out in note no. 44.2 of the Standalone Financial Statements, forming part of the Annual Report. Your Company 's major related party transactions are generally with its holding, subsidiaries and associates. The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialisation and your Company 's long-term strategy and capital resources of subsidiaries and associates. All related party transactions are negotiated on arm's length basis and are intended to further your Company 's interest.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

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

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION ETC.

Due to the de-merger of the Manufacturing Division with effect from April 1, 2011 already approved by the Hon 'ble High Court of Mumbai vide their orders dated July 18, 2012, the Company has nothing to report under this head specifically. However, the Company is conscious of its responsibility in respect of energy conservation and technology absorption and adopts suitable measures towards this end from time to time.

The foreign exchange earnings for the year ended March 31,2015 stands at Rs. 0.75 million. The amount spent on account of expenditure in foreign currency stands at Rs.0.082 million.

PARTICULARS OF EMPLOYEES

The information 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:

a, The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

SI. No. Non-executive directors Ratio to median remuneration

1 P.R. Tripathi (Sitting Fees) 0.47

2 M.L. Majumdar (Sitting Fees ) 0.18

3 S.D. Kapoor (Sitting Fees) 0.18

4 Ramendra Gupta ( Sitting Fees) 0.11

SI.No. Executive directors Ratio to median remuneration

1 S.C. Sekaran 13.25

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Director, Chief Executive Officer, % increase in remuneration Chief Financial Officer, in the financial year Company Secretary in the financial year

NIL NIL

c The percentage increase in the median remuneration of employees in 'he financial year: NIL.

d. The number of permanent employees on the rolls of Company: 378

e. The explanation on the relationship between average increase in remuneration and Company performance:

The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects Company performance, the performance pay is also linked to organization performance, apart from an individual's performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

g. There are no employees of the Company drawing remuneration in excess of Rs. 60 lakh p.a. or Rs. 5 lakh per month during financial year 2014-2015.

Aggregate remuneration of key managerial personnel (KMP) in FY 2015 (Rs. million) 5.50

Revenue (Rs. million) 3,483.02

Remuneration of KMPs (as % of revenue) 0.16 percent

Profit before Tax (PBT) (Rs.million) -

Remuneration of KMP (as % of PBT) -

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure "B" in the prescribed Form MGT- 9, which forms part of this report.

DIRECTORS ' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act. 2013, the Directors confirm in respect of the audited annual accounts for the year ended March 31, 2015:

a) In the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures:

b) 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 as at March 31,2015 and of the profit /loss of the Company for that period;

c) 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) Prepared the annual accounts on a going concern basis.

e) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

f) Laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

There were no cases of sexual harassment of women reported in the company during the financial year 2014-2015. INDUSTRIAL RELATIONS

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the Company continued to have cordial and harmonious relations with its employees.

HEALTH, SAFETY AND ENVIRONMENT

In line with our Corporate vision to improve the safety and quality of life of employees and to mitigate the risks of Health, Safety and Environment (HSE), the Company is actively involved in design and engineering of its projects through the non-polluting manufacturing processes, scrupulous compliance with environment norms and development of environmental products.

Reinforcing our commitment to high levels of Quality and best-in -class services to customers, the company has Integrated Management System (IMS) consisting of ISO 9001; 2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across the organisation inclusive of project sites accredited by M/s International Standards Body, Australia.

The Company is committed to progressively maintaining the best in class standards of HSE care for its people, practices, processes and services. The Company also promotes active participation of its employees and contractors to mange HSE risks with a goal to preventing accidents, injuries and occupational illness. The Company conducts on-going safety awareness programmes which together with safety audits and continual safety training strengthens the processes and systems in this area. The Company also conducts continuous training of the staff at all levels regarding HSE issues, with experts being invited to train the senior management.

Upgradation of safety procedures at project sites and training has been of prime importance as a part of workplace safety.

As a part of its commitment to environment, which has always been in the forefront, your Company has taken up several environmental management initiatives and remains committed to clean environment.

As a leader in environment and waste management technology market, HDO provides complete solutions for waste reduction and water conservation for broad spectrum of industries like refineries, minerals, pulp and paper, sugar, etc.

CORPORATE SOCIAL RESPONSIBILITY

As per the Companies Act, 2013, all companies having net worth of Rs.500 Crore or more, or turnover of Rs.1,000 Crore or more or a net profit of Rs.5 Crore or more during any financial year will be required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising three or more directors, at least one of whom will be an Independent Director.

CSR activities, as per the provisions of the Companies Act, 2013, could not be undertaken by the Company in view of the losses incurred by the Company during the current financial year.

ACKNOWLEDGEMENT

The Directors would like to express their appreciation for support and cooperation received from the holding company, bankers, financial institutions, suppliers, associate sub-contractors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services provided by the executives, staff and workers of the Company. The Board of Directors also thank all the employees for their contribution and continued cooperation throughout the year and is confident that new heights can be reached in improving the stakeholder value in the Company.

For and on Behalf of the Board of Directors

S.C. Sekaran R.Balarami Reddy Executive Director Director Hyderabad May 30, 2015

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Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 39th Annual Report and the audited accounts for the year ended March 31, 2014.

Financial Results

The financial performance of the Company for the year ended March 31, 2014 is summarised below

(Rs In millions)

Particulars For the For the Year ended Period ended March 31, 2014 March 31, 2013

Net Sales 2551.99 2402.47

Other Income 216.22 34.92

Total Income 2768.21 2437.39

Profit/ (Loss) from (1374.31) (1785.06) Ordinary Activities before Tax

Provision for taxation (359.27) (575.63)

Profit/ (Loss) after (1015.04) (1209.43) taxation

Balance brought forward (663.13) 546.30 from previous year

Balance available for (1678.17) (663.13) appropriation

Retained profits carried (1678.17) (663.13) forward to Balance Sheet

DIVIDEND

In view of the loss incurred by the Company, your Directors regret and express their inability to recommend dividend for the year ended March 31, 2014.

PERFORMANCE

Your Company achieved a gross turnover of Rs 2551.99 million for the year ended March 31, 2014 as against Rs 2402.47 million for the previous nine months period ended March 31, 2013. On an annualised basis, turnover for the current year ended March 31, 2014 increased by 6.22 percent as compared to the previous period.

FUTURE OUTLOOK

The negative effects of global recessionary conditions are being attenuated by various countries through huge investments in infrastructure and India is no exception in this regard. Your directors are confident that the present environment of investments in infrastructure by the State and Central Governments assures growth of operations of your Company.

SUBSIDIARIES

The Consolidated Financial Statements prepared by the Company include the financial information of subsidiary companies, namely HDO Technologies Limited and DavyMarkham India Private Limited.

Pursuant to Section 212 of the Companies Act, 1956, the Audited Balance Sheet, Statement of Profit and Loss and other documents of the said subsidiary companies are required to be annexed to the accounts of the holding Company. Ministry of Corporate Affairs vide its General Circular dated February 8, 2011 had granted general exemption for companies from complying with the provisions of section 212 of the Companies Act, 1956 subject to certain conditions being fulfilled by the Company. Accordingly, the Balance Sheet, Profit and loss account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. A statement containing the brief details of financials of subsidiary companies for the year ended March 31, 2014 is enclosed in the Annual Report. The annual accounts of the said subsidiary companies and relevant information shall be made available to the shareholders who seek such information and are also available for inspection by any shareholder at the Registered Office of the Company, on any working day during business hours. Copy of the said details will be provided upon receipt of written request from the shareholders.

PUBLIC DEPOSITS

The Company did not accept any deposits from public during the year. T 0.01 million was unclaimed deposit as on March 31, 2014.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The report on Corporate Governance and a certificate from the Company Secretary in whole-time-practice regarding compliance with conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchanges forms part of the Annual Report.

The declaration regarding compliance with Code of Business Conduct and Ethics for Directors and Senior Management forms part of the Report on Corporate Governance.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A (5) of the Companies Act, 1956, relevant amounts which remained unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management''s Discussion & Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges ion India, in a separate section forming a part of the Annual Report.

BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013, Mr. E. Sudhir Reddy, Vice Chairman of the Company retires at the AGM and, being eligible, offered himself for re-appointment.

Mr. P. R. Tripathi, Chairman of the Company, Mr. S. D. Kapoor and Mr. M. L. Majumdar, Directors of the Company are the existing Independent Directors appointed earlier as Directors, liable to retire by rotation but are not due to retire at the Annual General Meeting and their existing term did not end as at the AGM under the applicable provisions of the erstwhile Companies Act, 1956. Pursuant to the provisions of Section 149 of the Companies Act, 2013, (the Act), the Independent Directors are to be appointed for a term upto five consecutive years and they are not liable to retire by rotation. The present tenure of the Independent Directors on the date of commencement of the Act shall not be counted as a term under Section 149 of the Act. It is therefore proposed to appoint Mr. P. R. Tripathi, Mr. S. D. Kapoor and Mr. M. L. Majumdar as Independent Directors for a term of five consecutive years and not liable to retire by rotation.

Mr. M. L. Majumdar and Mr. S. D. Kapoor have since resigned as Independent Directors from August 13, 2014 and August 16, 2014 and hence no resolutions appointing them have been placed for the consideration of the members. The Board places on record its appreciation of the valueable services rendered by them during their tenure as Directors.

STATUTORY AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, New Delhi, the Statutory Auditors of the Company, hold office until the conclusion of the ensuring Annual General Meeting and are eligible for re-appointment in the transitional period of three years from this AGM for 2013-2014 as provided in Section 139(2) (a)(ii) of the Companies Act, 2013.

The company has received a letter from them to the effect that their appointment, if made, would be within the prescribed limits including transitional period under Section 139(1) of the Companies Act, 2013 and that they are not disqualified for reappointment within the meaning of Section 139(9) of the Companies act, 2013.

INTERNAL AUDITORS

M/s V. C. G. & Co., Chartered Accountants, are the Internal Auditors of the Company and they monitor the internal control system of the Company at its works and at the Mumbai office.

AUDITOR''S REPORT

With regard to Note 32 to the financial statements regarding preparation of financial statements of the Company on going concern basis - the management is taking steps to increase the operations of the company mutually for generation of profits. Also steps are being initiated to infuse additional capital into the business.

With regard to Note 33 regarding further investments - In view of future prospects properties and increased operations, the company does not envisage any dimunition in the value of investments.

With regard to Note 34 regarding investments in its foreign subsidiary and loans and advances receivable - the foreign subsidiary has obtained and in the process of obtaining good orders for execution and increased operations. Steps are being initiated to infuse additional capital into the business.

With regard to Note 35 of financial statements wherein deferred tax assets on business losses - the difference tax amount has already been written off in the current financial year.

With regard to Note 37 of the financial statements regarding trade receivables and other receivables amounting to Rs 515.30 million in respect of certain projects, as good and fully recoverable - the amounts are considered realizable based on favourable developments arising out of continuous contract management steps taken and continuous engagement with the customers for realization of dues by the Company. The Board of Directors is of the view that the receivables amount covered in the Auditors report are good and fully recoverable.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, has not been enclosed for the year ended March 31, 2014 in view of the de-merger of the Manufacturing Division with effect from April 01, 2011 as already approved by the Hon''ble High Court of Bombay, vide their orders date July 18, 2012 and the Company has nothing to report under this head specifically. However, the Company is conscious of its responsibility in respect of energy conservation and technology absorption and adopts suitable measures towards this end from time to time. The foreign exchange earnings for the year ended 31st March, 2014 stands at Rs 90.44 million. The amount spent on account of expenditure in foreign currency stands at Rs 21.29 million.

GREEN INITIATIVE IN CORPORATE GOVERNANCE BY HON''BLE MINISTRY OF CORPORATE AFFAIRS

The Ministry of Corporate Affairs (MCA) has taken a green initiative in Corporate Governance by allowing paperless compliances by the Companies and permitted the service of Annual Reports and documents to the shareholders through electronic mode subject to certain conditions.

Your Company appreciates the initiative taken by MCA as it strongly believes in the green environment. This initiative also helps in prompt receipt of communication, apart from avoiding losses/delays in postal transit. The Notice of Annual General Meeting, full Annual Reports and all communications hitherto were sent to the members in electronic form at the e-mail address registered with Depositories and the Registrars & Transfer Agents of the Company. The Annual Reports will be sent by post physically to the members, whose e-mail addresses are not registered. Members can also have access to the documents through the Company''s website. The documents will also be available to the Members for inspection at the Registered Office of the Company during the office hours.

Members are also entitled to be furnished with hard copies of full Annual Reports, free of cost, upon receipt of requisition by the Company at any point of time.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is provided in Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm in respect of the audited annual accounts for the year ended March 31, 2014:

(i) That in the preparation of the annual accounts, the applicable accounting standards had been followed;

(ii) The accounting policies framed in accordance with the guidelines of the Institute of Chartered Accountants of India had been applied;

(iii) Reasonable and prudent judgement and estimates had made so as to give a true and fair view of the state of affairs of the Company at the end of the year ended on March 31, 2014;

(iv) Proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(v) The annual accounts had prepared on a going concern basis.

INDUSTRIAL RELATIONS

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by the The Company continued to have cordial and harmonious relations with its employees.

HEALTH, SAFETY & ENVIRONMENT

In line with our Corporate vision to improve the safety and quality of life of employees and to mitigate the risks of Health, Safety and Environment (HSE), the Company is actively involved in design and engineering of its projects through the nonpolluting manufacturing processes, scrupulous compliance with environment norms and development of environmental products.

Reinforcing our commitment to high levels of Quality and best-in-class services to customers, the company has integrated Management system (IMS) consisting of ISO 9001: 2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across the organisation inclusive of project sites accredited by M/s International Standards Body, Australia.

The Company is committed to progressively maintaining the best-in-class standards of HSE care for its people, practices, processes and services. The Company also promotes active participation of its employees and contractors to mange HSE risks with a goal to preventing accidents, injuries and occupational illness. The Company conducts on-going safety awareness programmes which together with safety audits and continual safety training strengthens the processes and systems in this area. The Company also conducts continuous training of the staff at all levels regarding HSE issues, with experts being invited to train the senior management.

Upgradation of safety procedures at project sites and training has been of prime importance as a part of workplace safety.

As a part of its commitment to environment, which has always been in the forefront, your Company has taken up several environmental management initiatives and remains committed to clean environment.

As a leader in environment and waste management technology market, HDOL provides complete solutions for waste reduction and water conservation for broad spectrum of industries like refineries, minerals, pulp and paper, sugar, etc.

CORPORATE SOCIAL RESPONSIBILITY

As per the Companies Act, 2013, all companies having net worth of Rs 500 Crore or more, or turnover of Rs 1,000 Crore or more or a net profit of Rs 5 Crore or more during any financial year will be required to constitute a corporate social responsibility (CSR) committee of the Board of Directors comprising three or more directors, at least one of whom will be an Independent Director.

CSR activities, as per the provisions of the Companies Act, 2013, could not be undertaken by the Company in view of the losses incurred by the Company during the current financial year.

ACKNOWLEDGEMENT

The Directors would like to express their appreciation for support and co-operation received from the holding company, bankers, financial institutions, suppliers, associate sub-contractors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services provided by the executives, staff and workers of the Company. The Board of Directors also thank all the employees for their contribution and continued co-operation throughout the year and is confident that new heights can be reached in improving the stakeholder value in the Company.

For and on Behalf of the Board of the Directors

Hyderabad S.C. Sekaran R.Balarami Reddy August 19, 2014 Executive Director Director

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Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 38th Annual Report and the audited accounts for the nine months period ended March 31, 2013.

Financial Results

The financial performance of the Company for the nine months period ended March 31, 2013 is summarised below

(Rs.In Million) Particulars Nine Months Fifteen Months period ended period ended March 31, 2013 June 30, 2012

Net Sales 2402.47 7187.53

Other Income 34.92 105.52

Total Income 2437.39 7293.05

Profit/ (Loss) from Ordinary Activities before Tax (1785.06) (462.83)

Provision for taxation (575.63) (159.51)

Profit/ (Loss) after taxation (1209.43) (303.32)

Balance brought forward from previous year 546.30 849.62

Balance available for appropriation (663.13) 546.30

Retained profits carried forward to Balance Sheet (663.13) 546.30

DIVIDEND

In view of the loss incurred by the Company, your Directors regret and express their inability to recommend dividend for the nine months period ended March 31, 2013.

PERFORMANCE

Your Company achieved a gross turnover of T2,402.47 Million for the nine months period ended March 31, 2013 as against T .7,187.53 Million for the previous fifteen months period ended June 30, 2012. On an annualised basis, turnover for the current period ended March 31, 2013 reduced by 44.29% as compared to the previous period.

FUTURE OUTLOOK

The negative effects of global recessionary conditions are being attenuated by various countries through huge investments in infrastructure and India is no exception in this regard. Your directors are confident that the present environment of investments in infrastructure by the State and Central Governments assures growth of operations of your Company.

SUBSIDIARIES

The Consolidated Financial Statements prepared by the Company include the financial information of subsidiary companies, namely HDO Technologies Limited, HDO (UK) Limited, HDO Zambia Limited and Davy Markham (India) Private Limited.

Pursuant to Section 212 of the Companies Act, 1956, the Audited Balance Sheet, Statement of Profit and Loss and other documents of the said subsidiary companies are required to be annexed to the accounts of the holding company. Ministry of Corporate Affairs vide its General Circular dated February 8, 2011 had granted general exemption for companies from complying with the provisions of section 212 of the Companies Act, 1956 subject to certain conditions being fulfilled by the Company. Accordingly, the Balance Sheet, Profit and loss account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. A statement containing the brief details of financials of subsidiary companies for the period ended March 31, 2013 is enclosed in the Annual Report. The annual accounts of the said subsidiary companies and relevant information shall be made available to the shareholders who seek such information and are also available for inspection by any shareholder at the Registered Office of the Company, on any working day during business hours. Copy of the said details will be provided upon receipt of written request from the shareholders.

DE-MERGER OF MANUFACTURING DIVISION

The Hon''ble High Court of Bombay had approved the Scheme of Arrangement which inter-alia provided for, demerger of manufacturing undertaking of your Company into its subsidiary HDO Technologies Limited – A Wholly owned subsidiary of the Company effective April 01, 2011 and the said order was received by the Company from the Hon''ble High Court of Bombay on July 18, 2012.

PUBLIC DEPOSITS

The Company did not accept any deposits from public during the period. Rs. 0.06 Million was unclaimed deposit as on March 31, 2013.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The Report on Corporate Governance and Auditors'' Certificate regarding compliance with conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchanges forms part of the Annual Report.

The declaration regarding compliance with Code of Business Conduct and Ethics for Directors and Senior Management forms part of the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion & Analysis Report for the period under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented separately in the Annual Report.

BOARD OF DIRECTORS

During the period under review Mr. P. R. Tripathi and Mr. M. L. Majumdar, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

STATUTORY AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, Statutory Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a confirmation from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

INTERNAL AUDITORS

M/s V. C. G. & Co., Chartered Accountants, are the Internal Auditors of the Company and they monitor the internal control system of the Company at its works and also at Mumbai office.

AUDITORS'' REPORTS

With regard to Note 13 of the financial statements (Deferred tax assets on business losses aggregating to Rs. 730.28 million) the Statutory Auditors have qualified their report with a remark that "In absense of virtual certainity supported by convincing evidence that sufficient future taxable income will be available against which the deferred tax assets can be realized, we are unable to form an opinion on the extent to which such deferred tax assets can be realized." The opinion of the Directors on the aforesaid observation of Auditors is furnished below :

The Board of Directors of the Company is of the opinion that on the basis of the business plan prepared by the management sufficient future taxable income will be available against which the deferred tax assets can be realized.

[CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION ETC.

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, has not been enclosed for the period ended March 31, 2013 in view of the de- merger of the Manufacturing Division with effect from April 01, 2011 as already approved by the Hon''ble High Court of Bombay, the Company has nothing to report under this head specifically. However, generally the Company is quite conscious of its responsibility in respect of energy conservation and technology absorption and adopts suitable measures towards this end from time to time.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is provided in Annexure forming part of the

Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm in respect of the audited annual accounts for the nine months period ended March 31, 2013:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed;

(ii) that they had 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 nine months period ended on March 31, 2013 and of Profit /Loss of the Company for the nine months period ended on that date;

(iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that they had prepared the annual accounts on a going concern basis.

INDUSTRIAL RELATIONS

The Company continued to have cordial and harmonious relations with its employees.

HEALTH, SAFETY & ENVIRONMENT

In line with our Corporate vision to improve the safety and quality of life of employees and to mitigate the risks of Health, Safety and Environment (HSE), the Company is actively involved in design and engineering of its projects through the non- polluting manufacturing processes, scrupulous compliance with environment norms and development of environmental products.

Reinforcing our commitment to high levels of Quality and best-in-class services to customers, the company has integrated Management system (IMS) consisting of ISO 9001: 2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across the organization inclusive of project sites accredited by M/s International Standards Body, Australia.

The Company is committed to progressively maintaining the best-in-class standards of HSE care for its people, practices, processes and services. The Company also promotes active participation of its employees and contractors to mange HSE risks with a goal to preventing accidents, injuries and occupational illness. The Company conducts on-going safety awareness programmes which together with safety audits and continual safety training strengthens the processes and systems in this area. The Company also conducts continuous training of the staff at all levels regarding HSE issues, with experts being invited to train the senior management.

Upgradation of safety procedures at project sites and training has been of prime importance as a part of workplace safety.

As a part of its commitment to environment, which has always been in the forefront, your Company has taken up several environmental management initiatives and remains committed to clean environment.

As a leader in environment and waste management technology market, your company provides complete solutions for waste reduction and water conservation for broad spectrum of industries like refineries, minerals, pulp and paper, sugar, etc.

ACKNOWLEDGEMENT

The Directors would like to express their appreciation for support and co-operation received from the holding company, bankers, financial institutions, suppliers, associate sub-contractors and members during the period under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services provided by the executives, staff and workers of the Company. The Board of Directors also thank all the employees for their contribution and continued co-operation throughout the period and is confident that new heights can be reached in improving the stakeholder''s value in the Company.

For and on Behalf of the Board of Directors

S.C. Sekaran R.Balarami Reddy

Executive Director Director

Hyderabad May 30, 2013

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Mar 31, 2010

The Directors are pleased to present the 35th Annual Report and the audited accounts for the financial year ended March 31,2010.

FINANCIAL RESULTS

The financial performance of the Company for the financial year ended March 31,2010 is summarised below

(Rs.in lacs)

Particulaes Year ended Year ended March 31,2010 March 31.2009

Net Sales 86,311.22 51,530.81

Other Income 596.01 696.41

Total Income 86,907.23 52,227.22

Profit from Ordinary Activities before Tax 8,373.90 4,668.29

Provision for taxation 2,623.95 1,617.49

Tax adjustments for earlier years 198.26 34.83

Profit after taxation 5,551.69 3,015.97

Balance brought forward from previous year 3,410.34 2,615.59

Balance available for appropriation 8,962.03 5,631.56

Appropriations

Proposed dividend for the financial year at the rate of

40% @ Rs. 0.80 per share 576.05 360.03

Corporate Dividend Tax 95.67 61.19

Transfer to General Reserve 2500.00 1,800.00

Retained profits carried forward to Balance Sheet 5790.31 3,410.34

PERFORMANCE

Your Company delivered another year of splendid performance despite a very difficult market scenario that was characterised by extremely volatile financial, commodity and consumer markets.

Your Company, by maintaining its strong leadership position in proven fields, achieved the turnover of Rs. 86,311.22 lacs (previous year Rs. 51,530.81 lacs). This was due to robust business traction across the EPC and manufacturing divisions. Further, the year ended with an impressive all around operational performance with Profit before Tax at Rs. 8373.90 lacs (previous year Rs. 4,668.29 lacs), a healthy rise of 79.38 % over the previous year, whereas Profit after Tax increased by 84.08 %.

These results were achieved through a focussed strategy of leveraging upon our strong presence in the existing industry verticals and at the same time, by tapping the opportunity presented by a growing economy.

During the year, one of the prestigious projects bagged by the company includes a complete water management system project for HMEL-Guru Gobind Singh Refinery of 9 MMTPA capacity coming up at Bhatinda, Punjab at a value of more than Rs. 300 crores. The complete package comprised Raw Water Treatment facility, DM/RO Plant and Effluent Treatment with modern eco-friendly technologies. This has given us the confidence that going forward, HDO can look at complete water management in the petroleum refineries.

The manufacturing facility has achieved another milestone of manufacturing a Huge Pressure Vessel called Autoclave which is the most critical equipment in Uranium ore Processing. This equipment was manufactured under stringent quality checks and inspection by Llyods and Bateman of South Africa. Our manufacturing facility has been upgraded with latest fabrication equipments like CNC tube sheet drilling machine, plasma cutting machine, plate bending machine and gearability machine at our factory premises.

Engineers India Ltd has accredited HDO with higher fabrication of stainless steel and carbon steel -Pressure Vessels from 30 MT weight to 100 MT and tubesheet thickness from 100 mm to 240 mm and for critical metallurgy like low temperature steel non-ferrous metal and clad construction equipment.

DIVIDEND

The company aims at wealth creation for shareholders. Towards this end, the dividend policy has been structured with a view towards effective balancing of the twin objectives of appropriately rewarding shareholders with cash dividend and ploughing back a portion of the earnings to meet the companys future investment requirements.

Keeping in view the overall performance of your Company, your Directors are pleased to recommend a dividend of Rs. 0.80 per Equity Share on face value of Rs.2/- each for the year 2009-10. (2008-09: @ Rs. 1.00 per equity share) on the enhanced share capital after the bonus issue in the ratio of 1:1.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 2500 lacs to the General Reserve out of the amount available for appropriations, and an amount of Rs. 2379.97 lacs is proposed to be retained in the Prof it & Loss Account.

ACQUISITION OF DAVYMARKHAM

The Company continues to pursue the strategy of acquiring companies , globally, which complement our capabilities, provide access to niche skill sets and expand our presence in select geographies.

Hindustan Dorr-Oliver has acquired a 100% stake in Sheffield, UK based DavyMarkham through its wholy owned subsidiary IMCO (22010) Ltd in UK. The acquisition has been funded entirely through the companys internal accruals as well as short term debt from banks.

DavyMarkham Ltd. is a 180 year old manufacturing company involved in the design, manufacture and assembly of large equipment used in mining, quarrying, power generation, oil, gas and nuclear sectors. DavyMarkham Ltd. provides total engineering capability for extremely large turnkey projects, and manages the project throughout the whole process from engineering design, fabrication, machining to installation and commissioning of heavy and complex components and assemblies.

HDO intends to utilise DavyMarkhams presence and contacts along with its Engineering Capabilities in the oil, gas and power transmission markets in the Indian Market.

FUTURE PROSPECTS

The companys efforts are consistently directed towards the upgradation of its strategic capability to effectively address the challenge of growth in an increasingly competitive market scenario. The vision of becoming a global corporate entity through world-class performance has been put into action through creation of multiple business drivers of growth which has synergies with existing skill and competency.

HDO continues to tap opportunities in emerging as well as existing industry verticals some of which include

a) Material Handling systems

b) Iron Ore Beneficiation and Pelletization

c) Nuclear Power Plant: Component/Manufacture

d) Coal Washeries

e) Power Sector

f) Hydrocarbon sector

Material Handling Systems

Material handling is an important aspect of all process industries. Material handling equipment like long distance Belt Conveyors, Rapid loading systems. Belt trippers, Screw Conveyors, Stackers, Reclaimer, etc. are required for the transfer of mined ore to Process plant areas. HDO has a technical tie up with FMC Technologies Limited Inc., a US based leading global player in this area and has also bid for material handling systems for BCCL, CCL and Jindal Steel tenders.

Iron OreBeneficiation and Pelletization

The natural mineral resource Iron Ore has become the focus point due to rapid growth in Indian Infrastructure industry and rapid urbanization. Demand of steel is increasing day by day and Indian Industry is seriously exploring options to benef iciate Iron ore fines, which are being exported to global market.

The process of converting Iron ore fines into uniform size iron ore pellets is called pelletization and these can be in blast furnace or in DRI Kiln. The pelletization plants are a highly profitable proposition for India as we need not dispose them at throw away price. Instead, they can be converted into pellets and sold at a premium value.

HDO has already tied up with the world leader for Technology of pelletization and has bid for jobs with NMDC/JSPL.

Nuclear Power Plant: Component/Manufacture

After signing the Nuclear Policy with Super Powers, Nuclear Power Plants has become a potential area of growth. Large global technology players have ventured into India to erect nuclear power plants in the country. HDO manufacturing facility is being upgraded with U-2/U-3 certifications from ASME-USA and NQA-1 certification to undertake nuclear component manufacturing. Moreover, the experience of Davy Markham shall also find effective utilisation at our manufacturing works in the accomplishment of this task.

CoalWasheries

India is endowed with 253 billion tons of Coal Reserves and the proven reserves stand at about 98 billion tons, corresponding to 10% of worlds total proven reserves. Indian Coals are low in sulphur, however they have very high Ash Content (30% to 45%), compared to Ash in coal at developed countries (15 to 20%). The coal washeries help reduce ash content by 7-8 per cent in the coal and improve its calorific value translating to further benefits such as improvement in thermal efficiency, plant load factor, savings in freight, savings in ash re-handling and land and reduction in operation & maintenance cost. As per the Economic Survey report: CIL has envisaged setting up new coal washeries with an estimated investment of about Rs 2,500 crores and CIL wants the private sector Indian and foreign companies to set up non-coking coal washeries, on "Build, Own and Operate" basis. HDO is well geared up to take up this challenge, and has tied up with MsTangshan Guohua Technology Company Ltd., China as their technology partners to bid for the coal washeries.

Power sector

HDO has excellent engineering and execution skills to provide the complete utilities package for Power plants. Our capabilities include:

- Water Management systems

- Cooling Towers

- Ash Handing system

- Coal Handling system

- HVAC

- Fire Fighting system

- Associated Electrical and Control systems

- Civil and Structural works for all the above systems

Hydrocarbon Sector

The hydrocarbon sector in India has seen rapid growth in the past few years, and has been a focus area for HDO. We supply a wide range of high pressure equipments to the hydrocarbon industry which demands high level of engineering and manufacturing skill. We provide pressure vessels, heat exchangers, tankages, spheres, indirect fired heaters, pressure parts for boilers, instrumentation and piping packages.

We have a highly skilled in-house engineering team and a world class manufacturing facility at Vatva, Ahmedabad. We also have an excellent Testing facility, with R&D lab which ensures quality of all equipments shipped out of the factory. We are certified by all major consultants like EIL, UDHE, Samsung, PDIL, Toyo, Linde, Jacobs, etc. Our clients include both government entities and private players, such as Reliance Industries (RIL), Indian Oil Corporation (IOCL), Oil and Natural Gas Corporation (ONGC), Gas Authority of India (GAIL) and Hindustan Petroleum, etc.

ALTERATION IN OBJECT CLAUSE-ENTERING INTO NEW AREAS OF BUSINESS

The Company is planning to make a foray into the area of power plants and various related areas like nuclear, hydro-electric, thermal, wind and other power projects using conventional or non-conventional sources of energy which may be conveniently or advantageously combined with the existing business of the Company. Accordingly the Object Clause of the Company has been altered and has been approved by the Registrar of Companies on April 20,2010.

BONUSSHARES

3,60,02,904 (Three Crores Sixty Lacs Two Thousand Nine Hundred Four Only) no. of equity shares of Rs. 21- each fully paid-up, were issued as Bonus shares in the ratio of one bonus share for every one equity share held.

Consequently, the paid-up Share Capital of your Company as on March 31, 2010 stands increased to Rs. 14,40,11,616/- (Fourteen Crores Forty Lacs Eleven Thousand Six Hundred Sixteen Only) divided into 7,20,05,808 (Seven Crores Twenty Lacs Five Thousand EightHundred Eight Only) no. of equity shares of Rs. 2/-each.

FURTHER ISSUE OF CAPITAL

To finance growth plans, the Board of Directors have received Members approval to raise monies upto50 million USD, by way of issue of further shares and/or issue of any convertible instruments either through preferential issue and /or qualified institutional placement and/or private placement/public offering or any combination thereof.

EMPLOYEE STOCK OPTION SCHEME

Pursuant to the applicable requirements of the Securities & Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the SEBI guidelines"), your Company had framed and instituted HDO: ESOP-2005 to attract, retain, motivate and reward its employees and to enable them to participate in the growth, development and success of the Company.

The following table sets forth the particulars of stock options granted under HDO: ESOP-2005 to permanent employees and employees of its subsidiary.

Particulars HDO: ESOP 2005

Options granted 2,52,000*

Pricing formula The exercise price is 50% of the latest available closing market price at National Stock Exchange Limited on the date prior to the option grant.

Options Vested Nil

Options exercised Nil

The total number of equity shares arising as Nil

a result of exercise of options

Options lapsed/forfeited/ expired Nil

Variation of terms of options Nil

Money realized by exercise of options Nil

Total number of options in force 2,52,000*

Details of options granted to Employee:

(I) Senior Managerial Personnel

Mr. P. K. Mishra 4000

Mr. A. K. Gupta 3000

Mr. V. R. Oza 3000

Mr. D. R. Char 3000

Mr. P. D. Nathani 2500

Mr, M. G. Sahani 2500

Mr. Girish B. Dave 2000

Mr. Subodh Bhel 1500

Mr. Jaideep N. Parekh 1000

Mr. S. Jawahar 1000

Mr. Niraj Narayan 1000

Mr. SaketBhatt 1000

(ii) Any other employee receiving a grant in any one Nil year of options amounting to 5% or more of the options granted during that year

(iii) Identified employees who were granted options, Nil during any one year, equal to or exceeding 1 % of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

Diluted Earnings Per Share (EPS) pursuant to issue of Rs. 7.69 shares on exercise of options calculated in accordance with Accounting Standard (AS 20 Earning Per Share)

Difference, if any, between the employees compensation Rs. 32,78,720

cost calculated using the intrinsic value of stock options Rs. 21,64,283

and the employee compensation cost recognized, Rs. 0.04 if the fair value of the options had been used and the

* Shall be adjusted for bonus issue

SUBSIDIARIES

In compliance with the provisions of Section 212 of the Companies Act, 1956, copies of the Balance Sheet, Profit & Loss Accounts, Reports of the Directors and Auditors and other relevant statements in respect of subsidiaries of the Company - HDO Technologies Limited are attached to the Balance Sheet of your Company as on March 31,2010.

The IMCO (22010) Limited, UK became the subsidiary with effect from February 28, 2010 and therefore the Balance Sheet, Profit & Loss Account, Report of the Directors and Auditors and other relevant statements of IMCO (22010) Limited are not attached to the Balance Sheet of our Company.

PUBLIC DEPOSITS

The Company did not accept any deposits from public during the year. Eleven depositors of previous years had not claimed their deposits amounting to Rs. 2.00 lacs as on March 31,2010.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The Report on Corporate Governance and Auditors Certificate regarding compliance with conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchanges forms part of the Annual Report.

The declaration regarding compliance with Code of Business Conduct and Ethics for Directors and Senior Management forms part of the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion & Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented separately in the Annual Report.

BOARD OF DIRECTORS

Mr. S. D. Kapoor was co-opted as Additional Director on the Board with effect from October 30, 2010 and is eligible for appointment at the ensuing Annual General Meeting.

Mr. Prabhakar Ram Tripathi and Mr. T N. Chaturvedi retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

STATUTORY AUDITORS

M/s. Chaturvedi & Partners, Chartered Accountants, Statutory Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a confirmation from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224( 1B) of the Companies Act, 1956.

INTERNAL AUDITORS

M/s V. C. G. & Co., Chartered Accountants, are the Internal Auditors of the Company and they monitor the internal control system of the Company at its works at Vatwa, Ahmedabad and Mumbai office.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION ETC.

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed to this report marked Annexure I.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is given in Annexure-1! to the Directors Report.

DIRECTORSRESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm in respect of the audited annual accounts for the year ended March 31,2010:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed;

(ii) that they had 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 ended on March 31,2010 and of the profit of the Company for that year;

(iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) thatthey had prepared the annual accounts on a going concern basis.

INDUSTRIAL RELATIONS

The Company continued to have cordial and harmonious relations with its employees.

HEALTH, SAFETY & ENVIRONMENT

In line with our Corporate vision to improve the safety and quality of life of employees and to mitigate the risks of Health, Safety and Environment (HSE), the Company is actively involved in design and engineering of its projects through the non-polluting manufacturing processes, scrupulous compliance with environment norms and development of environmental products.

Reinforcing our commitment to high levels of Quality and best-in -class services to customers, the company has integrated Management system (IMS) consisting of ISO 9001: 2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across the organisation inclusive of project sites accredited by M/s International Standards Body, Australia.

The Company is committed to progressively maintaining the best in class standards of HSE care for its people, practices, processes and services. The Company also promotes active participation of its employees and contractors to mange HSE risks with a goal to preventing accidents, injuries and occupational illness. The Company conducts on-going safety awareness programmes which together with safety audits and continual safety training strengthens the processes and systems in this area. The Company also conducts continuous training of the staff at all levels regarding HSE issues, with experts being invited to train the senior management.

Upgradation of safety procedures at project sites and training has been of prime importance as a part of workplace safety.

As a part of its commitment to environment, which has always been in the forefront, your Company has taken up several environmental management initiatives and remains committed to clean environment.

As a leader in environment and waste management technology market, HDO provides complete solutions for waste reduction and water conservation for broad spectrum of industries like refineries, minerals, pulp and paper, sugar, etc.

ACKNOWLEDGEMENT

The Directors would like to express their appreciation for support and cooperation received from the holding company, bankers, financial institutions, suppliers, associate sub-contractors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services provided by the executives, staff and workers of the Company. The Board of Directors also thank all the employees for their contribution and continued cooperation throughout the year and is confident that new heights can be reached in improving the stakeholdervalue in the Company.

On behalf of the Board of Directors

E . Sunil Reddy S.C. Sekaran

Managing Director Executive Director

Hyderabad

May 7, 2010.