To

The Members of

HEC Infra Projects Limited

The Directors have pleasure in presenting the 13th Annual Report of HEC Infra Projects Limited for the financial year ended 31st March, 2018.

1. Financial Results and Appropriations :

Financial Results of the Company for the year under review along with the figures for the previous year is as follows:

(Rs. in Lakhs Except per Share data)

* Since the payment of dividend is subject to the declaration at the ensuing annual general meeting the amount is not shown in the appropriation.

The Financial Results for the Half year ended and year ended are available on the company website of the company www.hecprojects.in

2. State of Company’s Affairs:

The Company has earned revenue from operation of Rs. 8263.49 Lacs during the year ended on 31st March, 2018 as against Rs. 8399.70 Lacs earned during the previous year ended on 31st March, 2017, with a fall of 1.62 % as compared to previous year. The Company has also earned other income of Rs. 77.91 Lacs during the year under review as against Rs. 70.81 Lacs earned during the previous year, with an increase in 10.03 % as Compared to previous year.

The Company earned Profit Before Tax (PBT) of Rs. 493.24 Lacs and Profit After Tax (PAT) of Rs. 334.13 Lacs during the year ended on 31st March, 2018 as compared to previous year ended on 31st March, 2017 Rs. 484.36 Lacs and Rs. 316.29 Lacs respectively, showing a rise of 1.83 % in Profit Before Tax and 5.64 % in Profit After Tax (PAT).

Some of the major factors which have impacted the revenue as well as profit of the Company are as under:

a. During the year under review there was implementation of Goods and Services Tax. There were issues requiring certain clarification over the Credit of GST. The delay in clarifications have impacted the revenue of the Company.

b. Bank of India from which the Company continues to avail Credit facility has been put under Prompt Corrective Action. Due to this the Company faced the difficulty in getting the bank guarantee and thus the Company cannot apply for big tenders.

3. Change in Nature of Business:

During the year under review, there has been no change in the nature of business of the Company.

4. Material Changes and Commitment affecting financial position:

There is no material change and commitments affecting the financial position of the Company, which has occurred during the financial year 2017-18 and till the date of this Board’s Report.

5. Reserves and Surplus:

The Opening Balance of Surplus of Profit and Loss as shown in the Reserves and Surplus is Rs. 1340.57 Lacs. The whole of net profit for the year of Rs. 334.13 Lacs is transferred to Surplus of Profit and Loss as shown in the Reserves and Surplus. The Closing Balance of Surplus of Profit and Loss as shown in the Reserves and Surplus is Rs. 1674.70 Lacs. The Opening and Closing Balance of Securities Premium stands at Rs. 741.03 Lacs. The Opening and Closing Balance of General Reserves stands at Rs. 10 Lacs.

6. Dividend:

The Board of Directors has recommended a final dividend of Rs. 1/- per Equity Share of Rs. 10/- each (previous year Rs. 1/- per equity Share of Rs. 10/- Each) for the financial year ended 31st March, 2018 amounting to Rs. 24.40 lakhs (inclusive of Dividend Distribution Tax of Rs. 4.13 Lakh). The dividend payment is subject to approval of Shareholders at the ensuring Annual General Meeting of the company.

7. Deposits:

The Company does not invited and accepts any such deposit under clause V of the companies Act, 2013 during the year ended 31st March, 2018.

8. Subsidiary, Associate and Joint Venture:

During the year under review, no company has become or ceased to be subsidiary, joint venture or associate of the Company.

9. Particulars of Loans given, Investments made, Guarantees given and Securities provided:

The company has not given any loans, guarantee or investments made covered under the provisions of section 186 of the Companies Act, 2013.

10. Conservation of energy, technology absorption, foreign exchange earnings and outgo:

Particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts), 2014 are not applicable to HEC Infra Projects Limited (“the company”) and the Company does not have any foreign exchange earnings and expenditure.

11. Director’s Responsibility Statement:

As required under the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(i) in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

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

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

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

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

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

12. Particulars of Employees:

During the year under review, there was no employee who has drawn remuneration in excess of the limits set out under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosure pertaining to Remuneration and other details as required under Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rule, 2014 is attached as Annexure- A.

13. Directors and Key Managerial Personnel:

Director:

Your Board Comprised of 5 (Five) Directors which includes 1 (One) Managing Director, 1 (One) Executive Director and 3 (Three) Non-Executive Independent Directors. Your Directors on the Board possess experience, competency and are renowned in their respective fields. All Directors are liable to retire by rotation except independent Directors.

In accordance with the provision of Section 152(6) of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Rupal Gaurang Shah, retires by rotation and being eligible, has offered herself for re-appointment. Item seeking your approval on the above re-appointment is included in the Notice convening the Annual General Meeting.

During the year, there is no change in the Board of Directors, none of the Directors have been appointed and resigned.

Key Managerial Personnel:

During the year under review, there was no change in the Key Managerial Personnel of the Company for the financial year ended 31st March, 2018.

14. Declaration by Independent Director:

Pursuant to Section 149(7) of the Companies Act, 2013 read with the schedules and Rules issued thereunder as well as Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independent as prescribed under Section 149(6) of the companies Act, 2013 and SEBI Listing Regulations.

15. Annual Performance Evaluation:

The Company has in place a criteria for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include performance evaluation of the nonexecutive directors and executive directors.

Pursuant to the provisions of Section 134(3)(p), 149 (8) and Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Independent directors was carried out by the entire Board and the performance Evaluation of the Board, its Chairman, Non-Independent Directors and working of Committees was carried out by the Independent Directors.

16. Extract of Annual Return:

Pursuant to the provisions of Section 134(3) (a) of the Companies Act, 2013, the extract of Annual Return in prescribed format form part of the Board’s Report as Annexure-B.

17. Auditors and Auditor’s Report:

Statutory Auditor & Audit Report:

M/s. Parth P. Shah & Co., Chartered Accountants (Firm Registration Number: 141540W) were appointed as the Statutory Auditor of the Company to hold office for the period of 5 (five) consecutive years, at the Extraordinary General Meeting held on 16th December, 2015 till the 15th Annual General Meeting of the company (for the financial year 2020) subject to ratification by the members at every Annual General Meeting.

In accordance with the companies Amendment Act, 2017 enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of statutory Auditors is not required to be ratified at every Annual General Meeting. Accordingly, the 13th Annual General Meeting Notice does not carry any resolution on ratification of appointment of Statutory Auditors.

Further, they have confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limits under the act and that they are not disqualified for the appointment.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditor’s Report for the financial year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark. The Auditor’s Report is enclosed with the financial statements in this Annual Report.

Secretarial Auditor and Secretarial Audit Report:

Pursuant to provision of Section 204 of the Companies Act, 2013, the Board of Directors of the Company appointed M/s. Jalan Alkesh & Associates, Practicing Company Secretary, as the Secretarial Auditor of the company for the financial year ended 31st March, 2018. The Secretarial Audit Report relating thereto is annexed herewith as an Annexure-C to this Report.

The Secretarial Auditor’s Report for the financial year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark.

Internal Auditor:

M/s. N. K. Kapadia & Co., a reputed firm of Chartered Accountants, is the Internal Auditors of the Company. The Audit Committee of the Board of Directors in consultation with the Internal Auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit.

None of the Auditors of the company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or reenactments) thereof for the time being in force).

Cost Auditor:

The provision of Cost Audit is not applicable to the Company; hence Company has not appointed cost Auditor.

18. Company’s policy on Director’s, KMPs & other employees appointment & remuneration including criteria for determining Qualification, Attributes, Independence, etc.:

The Company has formulated and adopted the Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The said Policy of the Company, inter alia, provides the criteria for appointment of Executive, Non-Executive and Independent Directors on the Board of Directors of the Company and persons in the Senior Management of the Company, their remuneration including determination of qualifications, Positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). The Policy is also available on the website of the Company https://www.hecprojects.in/investors/

19. Details on Internal Financial Controls Related to Financial Statements:

Your Company has in place adequate internal control systems commensurate with the size of its operations. These systems enable the Company to comply with applicable laws and standard guidelines to protect Company’s interest against financial losses and unauthorized use. Further, Company has appointed Internal Auditor. The findings of internal audit report are reviewed periodically by the internal auditors, and are subject to management reviews with significant audit observations and follow up actions reported to the Audit Committee. The Audit Committee actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them in accordance with the changes in the business dynamics, if required.

20. Risk Management:

Your company has established a well-defined risk management policy to ensure that risk to the Company’s continued existence as a going concern and to its development are identified and addressed on timely basis. Risk management strategy as approved by the board of directors is implemented by the company management. The Policy is available for at the Website of the Company https://www.hecprojects.in/investors/

21. Industrial Relation:

The Relations between the employees and management have remained cordial and harmonious during the year under review.

22. Segment Reporting:

The Company is engaged in the EPC Electro-Mechanical Project Business as an only reportable segment in accordance with Accounting Standard on Segment Reporting AS-17.

23. Number of Board Meeting:

During the year 6 (Six) meeting were held on 27th May, 2017, 2nd September, 2017, 14th November, 2017, 20th November, 2017, 5th February, 2018 and 28th March, 2018. The particulars of Directors, their attendance during the financial year 2017-18 has been disclosed in the Corporate Governance Report forming part of this Annual Report.

24. Composition of Audit Committee:

The Audit Committee Comprises of the following Members:

Further details relating to the Audit Committee are provided in the Corporate Governance Report, which forms as an integral part of the Annual Report.

All the recommendations made by Audit Committee were accepted by the Board.

25. Significant and material orders passed by the Regulators or Courts or Tribunal:

There are no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

26. Secretarial Standard:

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the ‘Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

27. Vigil Mechanism/ Whistle Blower Policy:

Pursuant to the provision of Section 177(9) of the Companies Act, 2013 read with Rule 7 of Companies (Meeting of Board and its Power) Rules, 2014 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a vigil mechanism/ Whistle Blower Policy for directors and employees to report concern of unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct.

The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the Company’s website at www.hecprojects.in.

28. Corporate Social Responsibility:

The Company is not covered under the criteria of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and therefore it is not mandatory for the Company to have the Corporate Social Responsibility Committee.

29. Particulars of contracts or arrangements with related party:

During the financial year under review, all contracts / arrangements / transactions entered by the Company with related parties were in ordinary course of business and on arms’ length basis. The details of contracts and arrangements with Related Parties of your Company for the financial year ended 31 March, 2018, are given in notes to the Financial Statements, forming part of this Annual Report.

All related party transactions have been approved by the Audit Committee and the Board of Directors of your Company and are reviewed by them on periodic basis. Omnibus approvals are taken for transactions which are repetitive in nature. The details of the related party transactions during the year under review are provided in Form AOC-2, which is attached as Annexure-D to this report.

In accordance with the provisions of the SEBI Listing Regulations, the Company has formulated a Related Party Transactions Policy (the Policy). The Policy, as approved by the Board, is available on your Company’s website http://www.hecprojects.in/investors.

30. Management Discussion and Analysis Report & Corporate Governance Report:

As required under Schedule V (B) and (C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, “Management Discussion and Analysis Report” as well as “Corporate Governance Report”, are attached as a separate section forming part of this Annual Report

Further, during the year under review, the Company has complied with all the mandatory requirements of the Corporate Governance. A certificate from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance as an Annexure-E.

31. Listing:

Listing The Equity Shares of the Company continue to remain listed on National Stock Exchange of India Limited (NSE) SME Platform. The stipulated listing fees for Financial Year 2018-19 have been paid to the Stock Exchanges.

32. Policy on prevention of sexual harassment at workplace:

Your Company has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. Your company has a well formulated an Anti-harassment policy in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. The Company has also constituted an internal complaint committee pursuant to Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

The policy covers all employees (permanent, contractual, temporary, trainees) irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee.

During the year 2017-18, no case of Sexual Harassment was reported.

33. Acknowledgements:

The Board of Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. The Board sincerely conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of Board of Directors

Gaurang Shah

Date: 30/08/2018 (Chairman & Managing Director)

Place: Ahmedabad DIN :07956079