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Dilip Buildcon Ltd.

BSE: 540047 Sector: Infrastructure
NSE: DBL ISIN Code: INE917M01012
BSE 15:40 | 23 Jan 943.00 10.10
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NSE 15:48 | 23 Jan 941.25 8.75
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OPEN 935.00
PREVIOUS CLOSE 932.90
VOLUME 117805
52-Week high 1059.00
52-Week low 235.45
P/E 23.77
Mkt Cap.(Rs cr) 12,897
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 935.00
CLOSE 932.90
VOLUME 117805
52-Week high 1059.00
52-Week low 235.45
P/E 23.77
Mkt Cap.(Rs cr) 12,897
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dilip Buildcon Ltd. (DBL) - Director Report

Company director report

Board's Report

To

The Members Dilip Buildcon Limited

Your Directors have pleasure in presenting their Eleventh Annual Report on the businessand operations of the Company and the standalone and consolidated nancial statements ofthe Company for the Financial Year ended March 31 2017.

Financial Results

Standalone and Consolidated: The Standalone and Consolidated performance for theFinancial Year ended March 31 2017 is as under:

(Rs. in Lakhs)
Particulars Standalone Consolidated
Year ended March 31 2017 Year ended March 31 2016 Year ended March 31 2017 Year ended March 31 2016
Gross Revenue 510907.14 410106.35 533140.40 431669.32
Total expenses 474900.44 385096.16 495927.70 403942.86
Profit / (loss) before tax 36006.70 25010.19 37212.70 27726.47
Tax expenses
Current tax 81.11 784.61 97.89 816.43
Deferred tax (168.69) 2145.18 1346.65 3932.77
Profit for the year from continuing operations 36094.28 22080.40 35768.16 22977.27
Other comprehensive income 18.38 (28.83) 18.38 (28.83)
Items that will not be reclassi ed to profit or loss (Net of Taxes)
Total Comprehensive Income for the year 36112.66 22051.58 35786.54 22948.44
Add: Balance in Profit and Loss Account 93240.40 71259.31 80239.62 57361.67
(Adjusted)
Sub Total 129353.06 93310.89 116026.16 80310.11
Less: Appropriation
Dividend (29.28) (58.57) (29.28) (58.57)
Tax on Dividend (5.97) (11.92) (5.97) (11.92)
Others - - (63.30) 0.00
Closing Balance 129317.81 93240.40 115927.61 80239.62

Financial Performance

During the year under review your Company reported a top-line growth of 24.78% overthe previous year. At Standalone level the Revenue from Operations amounted toRs.509762.48 Lakhs as against Rs.408532.43 Lakhs in the previous year. The OperatingProfit before Tax amounted to Rs.36006.70 Lakhs as against Rs. 25010.19 Lakhs in theprevious year. The Net Profit for the year amounted to Rs.36094.28 Lakhs againstRs.22080.40 Lakhs reported in the previous year and total comprehensive income for theyear amounted to Rs.36112.64 Lakhs as against Rs.22051.58 Lakhs in the previous year.

The Consolidated Revenue from Operations amounted to Rs.531915.72 Lakhs as againstRs.430047.10 Lakhs in the previous year registering a growth of 23.69%. The ConsolidatedOperating Profit before Tax amounted to Rs.37212.70 Lakhs as against Rs.27726.47 Lakhsin the previous year. The Consolidated Net Profit after Tax amounted to Rs.35768.16 Lakhsas against Rs.22977.27 Lakhs in previous year and Total Comprehensive

Income for the year amounted to Rs.35786.54 Lakhs against Rs.22948.44 Lakhs inprevious year.

The performance and nancial position of the subsidiary companies are included in theConsolidated Financial Statements and presented in the Management Discussion and AnalysisReport forming part of this Annual Report.

Dividend

Your Directors have recommended a dividend of Rs.1.00 (Rupee One i.e. 10%) per equityshare of face value of Rs.10.00 (Rupees Ten only) each (previous year Rs. 0.025 per equityshare) for whole of the year aggregating to Rs.136769768.00(excluding dividenddistribution tax) for the Financial Year 2016-17 which if approved by the members at theensuing 11th Annual General Meeting (AGM) will be paid to those members whose namesappear in the Company's Register of Members and to those persons whose names appear asBene cial flowners as per the details to be furnished by National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Ltd. (CDSL) as at the close ofbusiness hours on September 4 2017.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 top ve hundred listed entities based on marketcapitalization are required to formulate a Dividend Distribution Policy. The Board hasapproved and adopted the Dividend Distribution Policy and the same is available on theCompany's website at http://www.dilipbuildcon.co.in/ les/Dividend%20Distribution%20Policy.pdf. The Policy is also annexed herewith as Annexure 1 to the Board's Report.

The dividend payout is in accordance with the Company's Dividend Distribution Policy.

Business Operations

Overview

We are one of the leading private sector road-focused EPC contractors in India. Duringthe last ve Financial Years ended March 31 2017 we completed the construction of 73 roadprojects in the states of Madhya Pradesh Gujarat Himachal Pradesh Rajasthan AndhraPradesh Karnataka Telangana Uttar Pradesh and Maharashtra in India with an aggregatelength of approximately 8604.61 lane kms achieving a CAGR of 34.75% of revenue growth onstandalone basis for the ve Financial Years ended March 31 2017.

As the flowner of one of the largest eets of construction equipment in India wemaintained as of March 31 2017 a modern equipment eet of 8525 vehicles and otherconstruction equipments from some of the world's leading suppliers such as SchwingStettar Metso Wirtgen and Vogele. We are one of the largest employers in theconstruction industry in India and employed 25290 employees as of March 31 2017.

Our core business is undertaking construction projects across India in the roadssector. We specialize in constructing state and national highways city roads culvertsand bridges. As a result of the natural growth of our road construction business as wellas the recent government support to the infrastructure sector and rising opportunities innew business areas recently we expanded into the irrigation and urban developmentbusinesses.

Our business comprises: (i) our construction business under which we undertake roadsbridges irrigation urban development and mining projects on an EPC basis; and (ii) ourinfrastructure development business under which we undertake building operation anddevelopment of road projects on a BOT basis with a focus on annuity projects.

As of March 31 2017 we had an order book of Rs. 1 756826.51 Lakhs consisting of 37third party road EPC projects 10 of our flown road BOT/HYBRID projects on EPC basis 2irrigation projects 3 urban development projects 3 mining projects and 1 cable-stayedbridge project.

CONSTRUCTION BUSINESS

Roads & Bridges:-

In our road and bridge construction business we mainly design construct and maintainroads bridges and highways on an EPC basis with third party and EPC Contracts awarded tous through our subsidiary companies.

We recognized revenue of Rs. 457143.01 Lakhs from this business for Financial Year2017. As on March 31 2017 we were undertaking a total of 37 road EPC Projects 1 Bridgeand 10 road infrastructure development projects in 12 states which amounted to anaggregate length of 8781.25 lane kms. Our order book for these projects amounted toRs.1458089.52 Lakhs as of March 31 2017 accounting for 83% of our total order book.

Irrigation:-

We recently diversi ed into the irrigation business. We started to undertake irrigationprojects in Financial Year 2014 to explore opportunities created by the increased focus ofthe Government and State Governments on agriculture. In our irrigation business weundertake to build canals and dams. Our irrigation team undertakes primarily design andconstruction works for tunnels and canals for agricultural irrigation purposes. We do notneed to make any further investment into our equipment bank as we are able to use ourexisting equipments for our irrigation projects. Undertaking irrigation projects in theareas close to our on-going projects facilitates our strategy to cluster our EPC projects.We can conveniently move and use the manpower machines and materials in the nearby worksites and undertake these projects on a cost effective basis.

We recognized revenue of 27827.28 Lakhs from this business for Financial Year 2017. Asof March 31 2017 we were undertaking 2 EPC irrigation projects in Madhya Pradesh. Ourorder book for these projects amounted to Rs.16483.76 Lakhs as of March 31 2017accounting for 1% of our total order book.

Urban Development

We recently diversi ed into the urban development business. The recent trend in theurban development sector has provided us with an opportunity to diversify our business. Webelieve this sector may continue to grow during the next few years and thus plan toundertake projects in our core geographic markets. We commenced urban development projectsin Madhya Pradesh in Financial Year 2013 to explore the opportunities created by theincreased focus of the State Government on improving the living conditions of theunderprivileged. In our urban development business we undertake redevelopment andre-densi cation of government housing and build residential units under affordable housingschemes construction of district court and other structures in group water supply schemesrelating to irrigation or water supply for agricultural purposes.

We recognized revenue of 9010.04 Lakhs from this business for Financial Year 2017. Asof March 31 2017 we were undertaking 3 EPC urban development projects in Madhya Pradesh.Our order book for these projects amounted to Rs. 21 081.33 Lakhs as of March 31 2017accounting for 1.20% of our total order book.

Mining Project

DBL over a period of time has developed core strengths like eet/equipment managementbulk material handling high volume excavation and earth work supply chain managementetc. in its infrastructure and construction business. All these expertise of DBL enjoysclose synergy with the mining business. As a part of diversi cation strategy and toexploit the existing strengths of the organization DBL ventured into mining businessbagged contracts of Overburden/Waste Removal from Northern Coal eld Limited (NCL) andSingareni Collieries Company Limited (SCCL). In a very short span of 12 months DBL hasachieved a remarkable excavation capacity of 2.50 Lakhs BCM per day in the most cost ecient manner and established new benchmarks for the Industry.

Project Name Volume Contract Value
(BCM) (Rs. in Lakhs)
Nigahi-1 Northern Coal elds Dist. 13 10450.00
Singrauli Madhya Pradesh Million
Khairagura Singareni Collieries 106.1 97355.00
Company Limited Asifabad Million
District Teleangana
Nigahi-2 Northern Coal elds Dist. 131.8 167357.78
Singrauli Madhya Pradesh Million

We recognized revenue of Rs. 13990.84 Lakhs from this business for Financial Year2017. As of March 31 2017 our order book of these 3 projects was Rs. 261171.90 Lakhsaccounting for 14.87% of our total order book.

Goa Zuari Cable-stayed Bridge Project (status on 31.03.2017): This project mainlyinvolves construction of the 640-meter long cable-stayed bridge which will have a centralspan of 360 meters and will approach across River Zuari on NH-17/NH-66 onPanjim-Mangalore section in the State of Goa. Further in the April 2016 we have also wonAdjacent road connecting to Zuari Bridge namely package I & III costing to Rs.85770.00 Lakhs. Overall the company has won 3 projects in the state of Goa aggregating toRs. 140310.00 Lakhs. To ensure successful completion of this project we have engagedinternational professionals from France and China to provide bridge design andconstruction quality examination services.

We recognized revenue of Rs. 5493.87 Lakhs from this business for Financial Year 2017.As of March 31 2017 our order book of these 3 projects was Rs. 134816.22 Lakhsaccounting for 7.67% of our total order book.

INFRASTRUCTURE DEVELOPMENT BUSINESS

In our infrastructure development business we develop and maintain roads and highwayson a BOT basis. As of March 31 2017 we had completed 14 projects totalling 1940.53 Lanekms in the states of Gujarat and Madhya Pradesh in India & we have 10 underconstruction projects comprising 1 pure toll & 9 hybrid annuity model projectstotalling 2507.47 Lane kms. in the states of Maharashtra Uttar Pradesh Karnataka andMadhya Pradesh in India.

In respect of our completed projects we operate 1 BOT project purely on a toll basiswhere the only source of revenue is the toll we charge vehicles for using the road 3 BOTprojects on annuity basis where the only source of revenue is the xed amount that therelevant government agency pays us for building and maintaining the roads on an annualbasis and the remaining 10 projects on annuity plus toll basis where we are entitled toboth a xed amount to be received annually in addition to the toll that we charge withtheir respective concession periods ranging from 14 to 25 years. Due to the annuitycomponent in our operational BOT projects income is assured to the extent of theannuities to be collected during a year under the relevant concessions thus reducing therisk of income uctuations resulting from tra c pattern changes.

We currently undertake BOT/Hybrid projects opportunistically considering factors suchas their proximity to clusters where we are executing other projects to maximize e ciencyof execution and profitability and the potential cash flow from such projects after theybecome operational. Given our strategy and focus on providing EPC services we may alsoevaluate opportunities to divest either wholly or partially our operational BOT assetsthereby freeing up capital invested in these projects for re-deployment elsewhere.

Our Geographical Footprint

Starting with Madhya Pradesh we have expanded into 16 other states including AndhraPradesh Gujarat Himachal Pradesh Karnataka Maharashtra Rajasthan Tamil NaduTelangana Punjab Jharkhand Chhattisgarh Haryana Goa West Bengal and Uttar Pradesh.Increasingly our order book consists of orders from outside Madhya Pradesh representingapproximately 84.37% of our order book as of March 31 2017 as compared to 60.00% as ofMarch 31 2016. We believe our geographically diversi ed portfolio gives us more leverageto hedge against risks in speci c areas or projects and protects us from uctuationsresulting from business concentration in limited geographical areas. The following chartillustrates our geographical footprint as of March 31 2017:

Major ongoing EPC construction projects as of March 31 2017:

Project Name Employer State Type Contract Value (Rs. in Lakhs) Length (Kms)
Nigahi OCP of NCL Northern Coal elds Limited MP Excavation 167357.74 NA
Overburden Khairagura OCP BPA Area (Telangana) The Singareni Telangana Excavation 97355.00 NA
Collieries Company
Limited
Vijayawada Machilipatnam NHAI AP Road 74070.0 64.61
Ghaghra Bridge to Varanasi NHAI UP Road 67434.00 58.62
Mahulia-Baharagora NHAI Jharkhand Road 67410.00 71.61
Chichra to Kharagpur NHAI West Bengal Road 61308.00 55.52
Zuari Bridge -(Package II) MORTH Goa Bridge 54540.00 -
Nalagampalli to AP/Karnataka Border NHAI AP Road 50310.00 47.69
Zuari Bridge -(Package I) MORTH Goa Road 44010.00 -
Zuari Bridge -(Package III) MORTH Goa Road 41760.00 -

Details of our top ve road projects completed as of March 31 2017:

Project Name Contract price (Rs. in Lakhs) Total length in Kms. Date of Start Schedule Date of Completion Actual Completion Date Early Completion days Bonus Earned (Rs. in Lakhs)
Hata Fatehpur 8714.00 64.42 April 10 2016 April 9 2018 March 6 2017 399 1534.80
Sidhi-Tikhri-Kyothi Katra 14486.40 95.77 September 1 June 1 2017 September 20 254 717.96
2015 2016
Patan-Tendukheda-Rehli 22502.00 86.60 April 10 2016 April 9 2018 March 31 374 3614.99
2017
Mandla to Pindari 19080.00 106.33 August 26 2015 August 24 2017 February 21 2017 184 572.40
Rewa-Sidhi 26001.00 57.80 January 20 2015 January 19 2017 September 30 2016 111 783.03

Awards

Your Company has been conferred with two prestigious awards in the “6thConstruction Week India Awards 2016” in the following categories:-

1. Road Contractor of the Year

2. Road and Highways Project of the Year

Mr. Dilip Suryavanshi Managing Director was also presented with an award in thecategory of “Infrastructure Person of the Year” in the said “6thConstruction Week India Awards 2016”.

Management Discussion and Analysis

The Management Discussion and Analysis for the year under review as stipulated underthe Listing Regulations is presented in a separate section forming part of this AnnualReport.

Particulars of loans guarantees and security provided and Investments made undersection 186

Since the Company is an Infrastructure Company pursuant to the provisions of Section186(11) of the Companies Act 2013 except Section 186(1) nothing contained in section186 of the Companies Act 2013 shall apply to a loan made guarantee given and securityprovided by a company engaged in the business of providing infrastructure facilities.However the details of loans guarantees and investments as required by the provisionsof Section 186 of the Companies Act 2013 and the rules made thereunder are set out in theNotes to the Standalone Financial Statements of the Company. (Please refer to Note No. 34 and 47 to the Standalone Financial Statements).

Consolidated Financial Statements

The Audited Consolidated Financial Statements for the Financial Year ended March 312017 based on the nancial statements received from subsidiaries as approved by theirrespective Board of Directors have been prepared in accordance with relevant IndianAccounting Standards issued by the Institute of Chartered Accountants of India and formsan integral part of this Annual Report.

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the nancial statementsof Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC-1 and forms anintegral part of this Annual Report.

Corporate Governance Report

The Corporate Governance Report pursuant to the SEBI (LODR) Regulations 2015 asapplicable for the year under review is presented in a separate section forming part ofthis Annual Report.

Change in the nature of business if any

There is no change in the nature of business of the Company during the year underreview.

Share Capital and Initial Public Offering and Offer for Sale

(a) Initial Public Offering (IPO)

During the Financial Year 2016-17 your Company entered into the Securities Marketthrough Initial Public Offering (IPO). The Public Issue comprised of Fresh Issue of19634703 Equity shares of Rs. 10/- each at a premium of Rs.209/- per share aggregatingto Rs. 43000.00 Lakhs and an Offer for sale by promoters Mr. Dilip Suryavanshi and Mr.Devendra Jain of 1136364 equity shares each and also Offer for sale by the PE InvestorBanyanTree Growth Capital LLC of 7954545 equity shares.

Equity shares of the Company are listed at BSE Limited (BSE) and National StockExchange of India Limited (NSE) and are regularly traded on both the exchanges w.e.f.August 11 2016.

Further the status of the utilisation of the Proceeds of the IPO and division thereonare as under:-

Particulars Amount Utilisation as on March 31 2017 Amount Pending for Utilisation
Pre-payment or scheduled 20238.20 20212.17 26.03
repayment of a portion of
term loans availed by the
Company.
To meet Working Capital 20000.00 20000.00 Nil
Requirements
General Corporate Purposes 72.20 72.20 Nil

(b) Change in the capital structure of the Company

During the year your company has allotted 19634703 Equity shares of Rs. 10/- each at apremium of Rs. 209/- per share by way of Initial Public Offering (IPO). Therefore thepaid up share Capital of the company has been increased from Rs. 1171350650 to Rs.1367697680.

(c) Status of Shares

As the members are aware the Company's shares are compulsorily tradable in electronicform. As on March 31 2017 100% of the Company's total paid up capital representing136769768 shares are in dematerialized form.

General Disclosures

The Board of Directors state that no disclosure or reporting is required in respect ofthe following items as there were no transactions on these items during the year underreview:

1. Details relating to deposits covered under Chapter V of the Act and rules made thereunder.

2. As per rule 4(4) the Companies (Share Capital and Debentures) Rules 2014 theCompany has not issued equity shares with differential rights as to dividend voting orotherwise.

3. As per rule 8(13) the Companies (Share Capital and Debentures) Rules 2014 theCompany has not issued shares (including sweat equity shares) to employees of the Companyunder any scheme.

4. As per rule 12(9) the Companies (Share Capital and Debentures) Rules 2014 theCompany has not issued equity shares under the scheme of employee stock option.

5. As per rule 16(4) the Companies (Share Capital and Debentures) Rules 2014 thereare no voting rights exercised directly or indirectly by the employees in respect ofshares held by them. The Company does not have any scheme of provision of money for thepurchase of its flown shares by employees or by trustees for the Benefit of employees.

6. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

7. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the Company's going concern status and operations in future.

8. No fraud has been reported by the Auditors to the Audit Committee or the Board.

9. There is no amount of unpaid/unclaimed dividend which is required to be transferredin IEPF (Investor Education and Protection Fund) as per the provisions of the CompaniesAct 2013.

Reserves

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

Material changes and commitments affecting the nancial position of the Company whichhave occurred between the end of the Financial Year of the company to which the nancialstatements relate and the date of the report

There are no material changes or commitments affecting the nancial position or businessactivities of the Company between the end of the Financial Year and the date of thisReport.

Details in respect of adequacy of Internal Financial Controls with reference to theFinancial Statements.

The Company has designed and implemented a process driven framework for InternalFinancial Controls (“IFC”) within the meaning of the explanation to Section134(5)(e) of the Companies Act 2013 read with Rule 8(5)(viii) of the Companies(Accounts)Rules 2014 the Board is of the opinion that the Company has sound Internal FinancialControl commensurate with the nature and size of its business operations and operatingeffectively and no material weakness exists. The Company has a process in place tocontinuously monitor the same and identify gaps if any and implement new and/or improvedcontrols wherever the effect of such gaps would have a material effect on the Company'soperations.

The Company has appointed independent audit rm as Internal Auditors to observe theInternal Control system.

The Board of Directors of the Company have adopted various policies like Related PartyTransactions Policy Vigil Mechanism Policy Policy to determine Material Subsidiaries andsuch other procedures for ensuring the orderly and e cient conduct of its business forsafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable nancial information.

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control system and suggests improvements to strengthen thesame. The Company has robust management information system which is an integral part ofthe control mechanism.

The details of investments made in the subsidiary companies during the year andperformance of the subsidiary companies are as under:

(a) Shares subscribed/acquired during the year

Name of the company Type of Shares No. of shares Total amount of Investment (Rs. in Lakhs)
Bhavya Infra & Systems Private Limited Equity 295949* 63.30
DBL Hassan Periyapatna Tollways Limited Equity 17235 835.04
DBL Hata Dargawon Tollways Limited Equity 25945 1177.12
DBL Hirekerur Ranibennur Tollways Limited Equity 37731 798.01
DBL Kalmath Zarap Highways Limited Equity 50000* 5.00
DBL Patan Rehli Tollways Limited Equity 41711 2930.20
DBL Tuljapur Ausa Highways Limited Equity 25500* 2.55
Jalpa Devi Engineering Private Limited Equity 50000* 5.00
Jalpa Devi Tollways Limited Equity 2202400 11012.00
DBL Lucknow Sultanpur Highways Limited Equity 500000* 50.00
DBL Mundargi Harapanahalli Equity 48993 1094.01
Tollways Limited

*includes equity shares held by nominee on behalf of and for the Benefit of DilipBuildcon Limited

(b) Subsidiary Companies

During the year under review your company has acquired entire equity shares of BhavyaInfra & Systems Private Limited and it became a wholly flowned subsidiary of yourCompany. Further four new Companies have been incorporated as subsidiaries of theCompany out of which three are wholly flowned subsidiaries. The details are as follows:

Name of Subsidiary Date of Incorporation / becoming subsidiary Status
1 DBL Lucknow Sultanpur Highways Limited 09.09.2016 Wholly flowned subsidiary (SPV)
2 DBL Kalmath Zarap Highways Limited 13.12.2016 Wholly flowned subsidiary (SPV)
3 Bhavya Infra & Systems Private Limited 03.03.2017 Wholly flowned subsidiary
4 Jalpa Devi Engineering Private Limited 09.03.2017 Wholly flowned subsidiary
5 DBL Tuljapur Ausa Highways Limited 24.03.2017 Subsidiary (51% ownership) (SPV)

The Policy for determining material subsidiary company as approved can be accessed onthe Company's website at the link http://www.dilipbuildcon.co.in/les/Policy%20on%20Material%20 Subsidiaries.pdf. The Company does not have any materialsubsidiary as on March 31 2017.

(c) Statement of the subsidiaries

As on March 31 2017 the Company has 23 Indian subsidiaries. There has been no changein the nature of business activities of any of the subsidiaries.

In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda Consolidated Financial Statements of the Company and all its subsidiary companies whichis forming part of the Annual Report. As per the provisions of Section 129 of theCompanies Act 2013 read with Rule 5 of Companies (Accounts) Rules 2014 a separatestatement containing the salient features of the nancial statements of the subsidiaryCompanies is prepared in Form AOC-1 and the same is annexed to the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theBoard's Report of the Company containing therein its standalone and consolidated nancialstatements has been placed on the website of the Company www.dilipbuildcon.co.in.Further as per fourth proviso of the said section Audited Financial Statements of eachof the subsidiary companies have also been placed on the website of the Companywww.dilipbuildcon.co.in. Shareholders interested in obtaining a copy of the AuditedFinancial Statements of the subsidiary companies may write to the Company Secretary at theCompany's registered Office.

(d) Performance and nancial position of each of the subsidiaries included in theconsolidated nancial statement

i. DBL Ashoknagar-Vidisha Tollways Limited (“DAVTL”)

DAVTL is involved in the business of development operation and maintenance of the twolaning with paved shoulder of Ashoknagar-Vidisha Major District Road on BOT (toll plusannuity) basis in the state of Madhya Pradesh. During the period under review the Companyhas achieved Revenue from Operations of Rs.907.25 Lakhs and Net Profit/(Loss) after Tax ofRs. (21.89) Lakhs.

ii. DBL Bankhlafata Dogawa Tollways Limited (“DBDTL”)

DBDTL is involved in the development of Bankhlafata-Dogawa-via-Borawa-SarvardevalaRoad Punasa-Mundi-Singhaji (Thermal Power Plant) Road Singhaji Bridge Approach Road andMundi-Devala-Khutala-Atoot NVDA Road on DBFOT (annuity) basis in the state of MadhyaPradesh. During the period under review the Company has achieved Revenue from Operationsof Rs. 1637.66 Lakhs and Net Profit/(Loss) after Tax of Rs. 552.15 Lakhs.

iii. DBL Betul Sarni Tollways Limited (“DBSTL”)

DBSTL is involved in the business of developing Betul-Sarni-Tikadhana-Junnardeo-ParasiaRoad being developed by MPRDC on BOT (toll plus annuity) basis in the state of MadhyaPradesh. During the period under review the Company has achieved Revenue from Operationsof Rs. 3171.43 Lakhs and Net Profit/(Loss) after Tax of Rs. (876.17) Lakhs.

iv. DBL Jaora Sailana Tollways Limited (“DJSTL”)

DJSTL is involved in the development of Jaora-Piploda-Jalandharkheda &Piploda-Sailana Road Raipuriya-Petlabad-Bamania Road Jawad Road to Khoh Road andSoyat-Pidawa Road on BOT (annuity) basis in the state of Madhya Pradesh. During the periodunder review the Company has achieved Revenue from Operations of Rs. 2078.13 Lakhs andNet Profit/(Loss) after Tax of Rs. 719.35 Lakhs.

v. DBL Mundi Sanawad Tollways Limited (“DMSTL”)

DMSTL is involved in the development (two-laning) of Mundi-Punasa-Sulgaon-Sanawad Road(Major District Road) on BOT (toll plus annuity) basis in the state of Madhya Pradesh.During the period under review the Company has achieved Revenue from Operations ofRs.1403.19 Lakhs and Net Profit/(Loss) after Tax of Rs. (21.82) Lakhs.

vi. DBL Nadiad Modasa Tollways Limited (“DNMTL”)

DNMTL is involved in developing a part of the existing Nadiad to Modasa Road (SH-59) totwo lanes (with paved shoulder) highway in the state of Gujarat. During the period underreview the Company has achieved Revenue from Operations of Rs. 3020.06 Lakhs and NetProfit/(Loss) after Tax of Rs. 905.45 Lakhs.

vii. DBL Sardarpur Badnawar Tollways Limited (“DSBTL”)

DSBTL is involved in the development of Sardarpur Badnawar Road on a Design BuildFinance Operate and Transfer (DBFOT) on toll plus annuity basis in the state of MadhyaPradesh. During the period under review the Company has achieved Revenue from Operationsof Rs. 624.23 Lakhs and Net Profit/(Loss) after Tax of Rs. (119.94) Lakhs.

viii. DBL Silwani Sultanganj Tollways Limited (“DSSTL”)

DSSTL is involved in the development (two-laning) ofSilwani-Sultanganj-Jaisinghnagar-Sagar Road section on a DBFOT (toll plus annuity) basisin the state of Madhya Pradesh. During the period under review the Company has achievedRevenue from Operations of Rs. 1618.36 Lakhs and Net Profit/(Loss) after Tax of Rs.142.34 Lakhs.

ix. DBL Sitamau Suwasara Tollways Limited (“DBLSSTL”)

DBLSSTL is involved in the development (two laning) of Sitamau-Basai-Suwasara Road(Major District Road) on BOT (toll plus annuity) basis in the state of Madhya Pradesh.During the period under review the Company has achieved Revenue from Operations of Rs.815.59 Lakhs and Net Profit/(Loss) after Tax of Rs. 103.63 Lakhs.

x. DBL Tikamgarh Nowgaon Tollways Limited (“DTNTL”)

DTNTL is involved in the development of Tikamgarh (Dhajrai)-Jatara-Palera-Nowgaon Roadbeing developed by MPRDC on DBFOT (toll plus annuity) basis in the state of MadhyaPradesh. During the period under review the Company has achieved Revenue from Operationsof Rs. 1634.02 Lakhs and Net Profit/(Loss) after Tax Rs. 179.03 Lakhs.

xi. DBL Uchera Nagod Tollways Limited (“DUNTL”)

DUNTL is involved in the business of development of Uchera-Nagod-Singhpur-KalinjherRoad on BOT (toll plus annuity) basis in the state of Madhya Pradesh. During the periodunder review the Company has achieved Revenue from Operations of Rs. 1561.56 Lakhs andNet Profit/(Loss) after Tax of Rs. 416.97 Lakhs.

xii. Suryavanshi Infrastructure Private Limited (“SIPL”)

IPL is involved in the business of undertaking reconstruction strengthening wideningand rehabilitation and operation and maintenance of Mandsaur-Sitamau Road in the state ofMadhya Pradesh on a BOT basis. During the period under review the Company has achievedRevenue from Operations of Rs. 334.65

Lakhs and Net Profit/(Loss) after Tax of Rs. (111.88) Lakhs.

xiii. DBL Hata-Dargawon Tollways Limited (“DHDTL”)

DHDTL is involved in the business of undertaking the project of strengthening-wideningmaintaining and operating of Hata-Fatehput-Rajpura-Silapuri-Bajna-Dargawon (SH-48) Road onBOT (toll plus annuity) basis. During the period under review the Company has achievedRevenue from Operations of Rs. 10446.01 Lakhs and Net Profit/(Loss) after Tax of Rs.174.64 Lakhs.

xiv. DBL Patan-Rehli Tollways Limited (“DPRTL”)

DPRTL is involved in the business of undertaking the project of Development ofPatan-Tendukheda-Rehli (SH-15) Road on BOT (toll plus annuity) basis. During the periodunder review the Company has achieved Revenue from Operations of Rs. 26529.44 Lakhs andNet Profit/(Loss) after Tax of Rs. (1054.48) Lakhs.

xv. Jalpa Devi Tollways Limited (“JDTL”)

JDTL is involved in the business of undertaking a project “four laning ofGuna-Biaora Section of NH-3 from km 332.100 to km 426.100 in the state of Madhya Pradeshunder NHDP-IV to be executed in BOT (toll) mode on DBFOT basis. During the period underreview the Company has achieved Revenue from Operations of Rs. 36843.21 Lakhs and NetProfit/(Loss) after Tax of Rs. (412.96) Lakhs.

xvi. DBL Mundargi Harapanahalli Tollways Limited (“DMHTL”)

DMHTL is involved in the business of undertaking the project design build nanceoperate maintain and transfer of Existing State Highway namedMundargi-Hadagali-Harapanahalli on DBFOMT annuity basis. During the period under reviewthe Company has achieved Revenue from Operations of Rs. 5872.33 Lakhs and NetProfit/(Loss) after Tax of Rs. (217.48) Lakhs.

xvii. DBL Hassan Periyapatna Tollways Limited (“DHPTL”)

DHPTL is involved in the business of undertaking the project “design buildnance operate maintain and transfer of the existing State highwayHassan-Ramanathapura-Periyapatna in the state of Karnataka on a DBFOMT annuitybasis.” During the period under review the Company has achieved Revenue fromOperations of Rs. 6018.91 Lakhs and Net Profit/(Loss) after Tax of Rs. (325.02) Lakhs.

xviii. DBL Hirekerur RanibennurTollways Limited (“DHRTL”)

DHRTL is involved in the business of undertaking the project “design buildnance operate maintain and transfer of existing state highway Hirekerur-Ranibennur inthe state of Karnataka on DBFOMT Annuity basis.” During the period under review theCompany has achieved Revenue from Operations of Rs. 2091.60 Lakhs and Net Profit/(Loss)after Tax of Rs. (355.95) Lakhs.

xix. DBL Lucknow Sultanpur Highways Limited (“DLSHL”)

DLSHL is a public limited company incorporated as a special purpose vehicle onSeptember 9 2016 for the purpose of undertaking the project “Four-Laning of theLucknow Sultanpur Section of NH-56 in the State of Uttar Pradesh on a Hybrid AnnuityBasis.” The Company is yet to commence its business. Hence there is no revenue andprofit generated during the period under review. However the Company incurred Loss of Rs.1.26 Lakhs during the period under review.

xx DBL Kalmath Zarap Highways Limited (“DKZHL”)

DKZHL is a public limited company incorporated as a special purpose vehicle on December13 2016 for the purpose of project “Rehabilitation and up-gradation of NH-66(Kalmath to Zarap section) to four-lane with paved shoulder in the state of Maharashtra onHybrid Annuity Mode”. The Company is yet to commence its business. Hence there is norevenue and profit generated during the period under review. However the Company incurredLoss of Rs. 0.38 Lakhs during the period under review.

xxi Jalpa Devi Engineering Private Limited (“JDEPL”)

JDEPL is a private limited company incorporated on March 9 2017 as wholly flownedsubsidiary of Dilip Buildcon Limited to carry on the business of manufacturing producingcasting recycling upcycling assembling reconstructing engineering and other relatedactivities of all kinds of machineries equipments tools etc. The Company is yet tocommence its business. Hence there is no revenue and profit/loss generated/incurred duringthe period under review.

xxii. DBL Tuljapur Ausa Highways Limited (“DTAHL”)

DTAHL is a public limited company incorporated as special purpose vehicle on March 242017 for the purpose of project “Four Laning of Tuljapur-Ausa (including TuljapurBypass) Section of NH-361 on Hybrid Annuity Mode in the State of Maharashtra”. TheCompany is yet to commence its business. Hence there is no revenue and profit/lossgenerated/incurred during the period under review.

xxiii. Bhavya Infra & Systems Private Limited (“BISPL”)

BISPL is a private limited company whose entire share capital has been acquired byDilip Buildcon Limited on March 3 2017 and thus it has become the wholly flownedsubsidiary of Dilip Buildcon Limited. During the period under review the Company hasachieved total revenue of Rs. 8.25 Lakhs and Net Profit/(Loss) after tax of Rs. (6.79)Lakhs.

Auditors and Auditors' Report

(a) Statutory Auditors & their Reports

M/s Naresh Rajani & Co. Chartered Accountants Bhopal (ICAI Firm Registration No.008422C) and M/s Mukund M. Chitale & Co. (“MMC”) Chartered AccountantsMumbai (ICAI Firm Registration No. 106655W) were re-appointed on September 25 2014 as theJoint Statutory Auditors for a term of 3 years and 5 years respectively subject to therati cation of shareholders at every Annual General Meeting of the Company on suchremuneration as may be determined by the Board.

Appointment of M/s Mukund M. Chitale & Co. (“MMC”) Chartered AccountantsMumbai (ICAI Firm Registration No. 106655W) for the Financial Year 2017-18 is subject torati cation in the ensuing Annual General Meeting. The Company has obtained a certi catefor their independence and eligibility for their appointment as Auditors and the same arewithin the limits as speci ed in section 141 of the Companies Act 2013.

Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules madethereunder the term of M/s Naresh Rajani & Co. Chartered Accountants Bhopal (ICAIFirm Registration No. 008422C) as the Joint Statutory Auditors of the Company willconclude from the close of ensuing Annual General Meeting of the Company.

The Board of Directors places on record its appreciation to the services rendered byM/s Naresh Rajani & Co. as Joint Statutory Auditors of the Company.

Pursuant to Section 139 of the Companies Act 2013 and subject to the approval of theMembers the Board of Directors of the Company has recommended the appointment of M/s MSG& Associates Chartered Accountants Bhopal (ICAI Firm Registration No. 010254C) asthe Joint Statutory Auditors of the Company for the term of 5 (ve) years commencing fromthe ensuing Annual General Meeting.

Accordingly the Board recommends the resolution in relation to the appointment ofJoint Statutory Auditors M/s MSG & Associates Chartered Accountants Bhopal (ICAIFirm Registration No. 010254C) and rati cation of the appointment of M/s Mukund M. Chitale& Co. (“MMC”) Chartered Accountants Mumbai (ICAI Firm Registration No.106655W) for the Financial Year 2017-18 for the approval of the shareholders of theCompany.

Emphasis of Matter in Auditors' Report:

The Auditors' Report for the Financial Year 2016-17 does not contain any Qualificationreservation or adverse remark. The Auditors without qualifying their opinion drawsattention to the following:-

“Note 43 to the Standalone Ind AS Financial Statements in respect of applicationmade to Settlement Commission and the liability for tax/interest thereon made in the booksof accounts based on the application made with the Settlement Commission”.

“Note 42 to the Consolidated Ind AS Financial Statements in respect of applicationmade to Settlement Commission and the liability for tax/interest thereon made in the booksof accounts based on the application made with the Settlement Commission”.

Notes referred in Emphasis of Matter:

Note 43 to the Standalone Financial Statements:

Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by theDepartment in the earlier years the Company has led an application before the Income TaxSettlement Commission for Assessment Year 2007-08 to 2013-14. The Income Tax liabilityincluding interest arising thereon based on the application made Rs. 710 Lakhs has beenprovided for the in accounts for the year ended 31st March 2015. Any additional liabilityfor tax / interest / penalty arising on account of the adjustments made / to be made inthe application will be provided / made as and when these are nally ascertained.

Note 42 to the Consolidated Financial Statements:

Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by theDepartment in the earlier years the Company has led an application before the Income TaxSettlement Commission for Assessment Year 2007-08 to 2013-14. The Income Tax liabilityincluding interest arising thereon based on the application made Rs. 710 Lakhs has beenprovided for the in accounts for the year ended 31st March 2015. Any additional liabilityfor tax / interest / penalty arising on account of the adjustments made / to be made inthe application will be provided / made as and when these are nally ascertained.

Board Explanation to the Emphasis of Matter:-

An Income Tax search was conducted on Company dated June 19 2012 to June 21 2012.After that the Company received the questionnaire under sec 142(1) of Income Tax Act andhave duly replied on all the subject matter.

Further to curtail the duration of assessment and buying peace from local Income TaxDepartment the Company have led the application to Honorable Income Tax SettlementCommission (ITSC) after depositing Rs. 710.00 Lakhs of tax in the month of March 2015. Inresponse to application the Honorable Income Tax Settlement Commission admitted theapplication u/s 245D(1) of the Income Tax Act on dated May 13 2015. The Honorable ITSChas pronounced the order dated September 29 2016 based on the same the Income TaxDepartment Bhopal Office is working on the nal outcome/tax liability. However based onthe order we have assessed the provisional amount and deposited Rs.30.00 Lakhs.

(b) Cost Auditors and their Report

Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time your Companyhas been carrying out audit of Cost Records every year. The Board of Directors on therecommendation of Audit Committee has appointed M/s Yogesh Chourasia & AssociatesCost Accountants (ICWAI Firm Registration No. 000271) as Cost Auditors of the Company forconducting the Cost Audit of the Company for the Financial Year 2017-18. As required underthe Companies Act 2013 a resolution seeking members' approval for the remunerationpayable to the Cost Auditor forms part of the Notice convening the Annual General Meetingfor their rati cation.

The Company has already led the Cost Audit Report for the Financial Year 2015-16 withthe Central Government. The Cost Audit Report for the Financial Year 2015-16 does notcontain any Qualification reservation or adverse remark. The Company has obtained CostAudit Report for the year 2016-17 and is in process to le the same with the CentralGovernment.

(c) Secretarial Auditors

As per the provisions of Section 204 of the Companies Act 2013 the Board hasappointed M/s Piyush Bindal & Associates Practising Company Secretaries (C.P. No:7442) as the Secretarial Auditor to conduct Secretarial Audit of the Company for theFinancial Year 2017-18.

Secretarial Audit Report for the Financial Year 2016-17 issued by M/s Piyush Bindal& Associates Practising Company Secretaries in Form MR-3 is annexed to the Board'sReport as Annexure 2 which is self-explanatory and do not call for any further explanationof the Board.

(d) Internal Auditors

As per the provisions of Section 138 of the Companies Act 2013 the Board of Directorshad appointed M/s Adalatwale and Bhagwat Chartered Accountants Bhopal (ICAI FirmRegistration No. 008398C) as Internal Auditor to conduct internal audit of the Companyfor the Financial Year 2016-17.

Further on the recommendation of audit committee the Board of Directors of the Companyhas approved the appointment of aforesaid audit rm as internal auditors for the FinancialYear 2017-18.

Extract of the Annual return

The Extract of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of Companies (Management and Administration) Rules 2014and the same is annexed to the Board's Report as Annexure 3.

Conservation of energy technology absorption and foreign exchange earnings and outgo

The particulars as required to be furnished for the year 2016-17 are under:

S. No. Particulars Comments
(A) Conservation of energy
(I) the steps taken or impact on conservation of energy In view of business activities no substantial steps are required to be taken by the Company.
(ii) the steps taken by the company for utilizing alternate sources of energy As above
(iii) the capital investment on energy conservation equipment Nil
(B) Technology absorption
(i) the efforts made towards technology absorption Not applicable as the traditional technology being used.
(ii) the Benefits derived like product improvement cost reduction product development or import substitution Nil
(iii) in case of imported technology
(imported during the last three
years reckoned from the
beginning of the Financial Year)-
(a) the details of technology imported Nil
(b) the year of import N.A.
(c) whether the technology been fully absorbed N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and N.A.
(iv) the expenditure incurred on Research and Development Nil

 

S. No. Particulars Comments
(C) Foreign exchange earnings and Outgo In flow Out Flow
(Rs. in (Rs. in
Lakhs) Lakhs)
The Foreign Exchange earned in terms of actual in flows during the year and the Foreign Exchange outgo during the year in terms of actual out flows Nil 724.14

Human Resources Development

The Company has continuously adopted structures that help attract best external talentand promote internal talent to higher roles and responsibilities. DBL's people centricfocus providing an open work environment fostering continuous improvement and developmenthelped several employees realize their career aspirations during the year.

The Company is committed to nurturing enhancing and retaining its top talent throughsuperior learning and organizational development. This is a part of our Corporate HRfunction and is a critical pillar to support the organization's growth and itssustainability in the long run.

Company's Health and Safety Policy commits to comply with applicable legal and otherrequirements connected with occupational Health Safety and Environment matters andprovide a healthy and safe work environment to all employees of the Company.

Board of Directors and Key Managerial Personnel

(a) Key Managerial Personnel

The following are the Key Managerial Personnel of the Company pursuant to theprovisions of section 203 of the Companies Act 2013 and the rules made their under:

1. Mr. Dilip Suryavanshi : Chairman and Managing Director
2. Mr. Devendra Jain : Whole-time Director and CEO
3. Mrs. Seema Suryavanshi : Whole-time Director
4. Mr. Vaibhav Rawat : Chief Financial Officer
5. Mr. Abhishek Shrivastava : Company Secretary

There is no change in the key managerial personnel during the year under review.

However it is proposed to revise remuneration of Mr. Dilip Suryavanshi as the Chairmanand Managing Director Mrs. Seema Suryavanshi as a Whole-time Director and Mr. DevendraJain as a Whole-time Director & CEO of the Company subject to the approval of theshareholders by special resolution and details of the same are mentioned in the item no. 8to 10 of explanatory statement which forms the part of the Notice of 11th Annual GeneralMeeting.

(b) Directors seeking re-appointment

In terms of the provisions of the Act Mrs. Seema Suryavanshi (DIN: 00039946)Whole-time Director of the Company retires by rotation and being eligible offers herselffor re-appointment at the ensuing Annual General Meeting. The Board recommends herreappointment for the consideration of the Members of the Company at the ensuing AnnualGeneral Meeting.

During the year under review in terms of the provisions of the Act the Companyappointed Mr. Vijay Chhibber (DIN: 00396838) as an Additional Director under the categoryof an Independent Director of the Company with effect from February 28 2017 for a term of5 years. In term of Section 161 of the Companies Act 2013 Mr. Vijay Chhibber holdsOffice upto the conclusion of the ensuing Annual General Meeting. The Company has receivednotice with requisite deposit proposing his candidature as Director of the Company.Accordingly the Board recommends the resolution in relation to appointment of Mr. VijayChhibber as an Independent Director for the approval by the shareholders of the Company.

In case of appointment / reappointment of Directors the details of respectiveDirectors as stipulated under Regulation 36(3) of the Listing Regulations are included inthe Notice of Annual General Meeting.

(c) Woman Director

Mrs. Seema Suryavanshi is a woman director on the Board as required under theprovisions of the Companies Act 2013 and the SEBI (LODR) Regulations 2015.

(d) Resignation of Director

Mr. Naval Jawaharlal Totla (DIN: 02408585) Non-Executive Director of the Company hasresigned with effect from May 16 2017 due to his other commitments. The Board places onrecord its sincere appreciation and gratitude for contributions made by him during histenure as Non-Executive Director of the Company.

(e) Independent Directors and Declaration by Independent Directors

The Company is having 5 (ve) Independent Directors which are in accordance with therequirement of the Listing Regulations as well as under the Companies Act 2013. TheCompany has received necessary declaration from all the ve Independent Directors to theeffect that they meet the criteria of independence as provided under Section 149(6) of theCompanies Act 2013 and Regulation 16(b) of SEBI (LODR) Regulations 2015. In the opinionof the Board they ful l the conditions speci ed in the Act and the Rules made there underfor the appointment as Independent Directors and are independent of the management.

The terms and conditions of appointment of the Independent Directors are placed on thewebsite http://www.dilipbuildcon.co.in/ les/Terms%20and%20conditons%

20for%20the%20%20%20appointment%20of%20Independent%20D irector.pdf

(f) Programme for familiarisation of Directors

The Company conducts familiarisation programme for all the directors at the time oftheir appointment and also at regular intervals to enlighten the directors regarding theirroles rights and responsibilities in the Company and the nature of the industry in whichthe Company operates the business model of the Company etc. The details regarding thefamiliarisation programme conducted during the year are put up on the website of thecompany and can be accessed at http://www.dilipbuildcon.co.in/les/Familiarisation%20programm e.pdf.

Constitution of the Board of directors and their Meetings

(a) Constitution of the Board

The composition of the Board is in conformity with Regulation 17 of the SEBI (LODR)Regulations 2015 and Section 149 of the Companies Act 2013. The Company's policy is tomaintain optimum combination of Executive and Non-Executive Directors. As on March 312017 the Company has nine Directors. Out of the nine Directors six are Non-ExecutiveDirectors comprising of ve Independent Directors.

The Chairman of the Board Mr. Dilip Suryavanshi is the Promoter and Managing Director.The Members of the Board are highly quali ed and having varied experience in theirrespective eld and they assist the Board to discharge their functions from time to time.

(b) Meetings of the Board

The Company prepares the schedule of the Board Meeting in advance to assist theDirectors in scheduling their programme. The agenda of the meeting is circulated to themembers of the Board well in advance along with necessary papers reports recommendationsand supporting documents so that each Board member can actively participate on agendaitems during the meeting.

The Board met 16 (sixteen) times during the Financial Year 2016-17. The maximuminterval between any two meetings did not exceed 120 days. Details regarding theattendance of Directors in the meetings of Board and the previous Annual General Meetinghas been included in the Corporate Governance Report annexed to the Annual Report.

(c) Information available for the members of the Board

The Board has complete access to any information within the Company. The Company hasprovided inter alia following information and discussed the matters:

• Financial results of the Company its subsidiary companies and its associates;

• Minutes of meetings of the Board Committees resolutions passed by circulationsand minutes of the meetings of the Board of Subsidiary Companies;

• Periodic compliance reports which includes non- compliance if any;

• Disclosures received from Directors;

• Related party transactions;

• Regular business updates;

• Various Policies of the Board;

• Code of Conduct for the members of the Board;

• Discussion with the Auditors and the audit committee members.

Governance codes

(a) Code of Business Conduct & Ethics

The Company has adopted Code of Business Conduct & Ethics (“the Code”)which is applicable to the Board of Directors and all Employees of the Company. The Boardof Directors and the members of Senior Management Team (one level below the Board ofDirectors) of the Company are required to a rm Compliance of this Code. The Code requiresDirectors and Employees to act honestly fairly ethically and with integrity conductthemselves in professional courteous and respectful manner. The Code is displayed on theCompany's website www.dilipbuildcon.co.in.

(b) Con ict of Interests

Each Director informs the Company on an annual basis about the Board and the Committeepositions he occupies in other companies including Chairmanships and noti es changesduring the year. The Members of the Board while discharging their duties avoid con ict ofinterest in the decision making process. The Members of Board restrict themselves from anydiscussions and voting in transactions in which they have concern or interest.

(c) Insider Trading Code

The Company has adopted a Code of conduct for prevention of Insider Trading (“theCode”) in accordance with the SEBI (Prohibition of Insider Trading) Regulations 2015(The PIT Regulations). This Code is displayed on the Company's websitehttp://www.dilipbuildcon.co.in/ les/Code%20of%20Conduct%20% 20for%20Insider-%20SEBI.pdf

The Code is applicable to Promoters and Promoter's Group all Directors and suchDesignated Employees who are expected to have access to unpublished price sensitiveinformation relating to the Company and connected persons. The Company Secretary is theCompliance Officer for monitoring adherence to the said PIT Regulations.

The Company has also formulated 'The Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information (UPSI)' in compliance with the PITRegulations.

COMMITTEES OF THE BOARD

The Board of Directors have constituted various mandatory and non-mandatory Committeesto deal with speci c areas and activities which concern the Company and requires a closerreview. The Committees are formed with approval of the Board and function under theirrespective Charters. These Committees play an important role in the overall management ofday-to-day affairs and governance of the Company. The Board Committees meet at regularintervals and take necessary steps to perform its duties entrusted by the Board. TheMinutes of the Committee Meetings are placed before the Board for noting. The Boardcurrently has the following Committees:

Mandatory Committees

(a) Audit Committee

The Audit Committee was constituted by our Board in accordance with Section 177 of theCompanies Act 2013 and Regulation 18 of the SEBI (LODR) Regulations 2015. Thecomposition quorum terms of reference functions powers roles and scope are inaccordance with Section 177 of the Companies Act 2013 and the provisions of Regulation 18of the Listing Regulations. All the members of the committee are nancially literate andMr. Satish Chandra Pandey Chairman of the Committee is an Independent Director andpossesses nancial expertise.

The details regarding composition terms of references powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.

Details of establishment of vigil mechanism for directors and employees

The Board of Directors have adopted Vigil Mechanism Policy. The Vigil Mechanism Policyaims for conducting the affairs in a fair and transparent manner by adopting higheststandards of professionalism honesty integrity and ethical behaviour. All permanentemployees of the Company are covered under the Vigil Mechanism Policy.

A mechanism has been established for employees to report concerns about unethicalbehaviour actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the Chairperson of the audit committee inexceptional cases. The Vigil Mechanism Policy has been posted on the website of theCompany www.http://www.dilipbuildcon.co.in/ les/Vigil%20Mechanism%20 Policy.pdf.

(b) Corporate Social Responsibility (CSR) and its Committee

Corporate Social Responsibility is commitment of the Company to improve the quality oflife of the workforce and their families and also the community and society at large andan initiative to assess and take responsibility for the Company's effects on environmentand social wellbeing. The Company believes in undertaking business in such a way that itleads to overall development of all stakeholders and Society.

The CSR Committee has been constituted as required under the provisions of section 135of the Companies Act 2013. The details regarding composition objectives powersfunctions scope meetings and attendance of members are included in Corporate GovernanceReport which forms part of the Annual Report.

Report on Corporate Social Responsibility as per Rule 8 of Companies (Corporate SocialResponsibility Policy) Rules 2014 is prepared and the same is annexed to the Board'sReport as Annexure 4.

The details of amount budgeted spent and unspent along with the reasons for notspending the allocated amount are included in the said report.

As per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules 2014the CSR Policy is available on the website of the Company http://www.dilipbuildcon.co.in/les/CSR%20Policy.pdf

(c) Stakeholder's Relationship Committee

Stakeholder's Relationship Committee has been constituted by the Board in accordancewith Section 178 of the Companies Act 2013.

The details regarding composition terms of references powers functions scopemeetings attendance of members and the status of complaints received during the year areincluded in Corporate Governance Report which forms part of the Annual Report.

(d) Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been constituted by the Board inaccordance with section 178 of Companies Act 2013 and Regulation 19 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. All the members of thecommittee are Independent Directors.

The details regarding composition terms of references powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.

Company's policy on remuneration of Directors KMPs and other employees

The Policy of the Company on remuneration of Directors KMPs and other employeesincluding criteria for determining Qualifications positive attributes independence of aDirector and other matters provided under sub-section (3) of section 178 is annexed tothe Board's Report as Annexure 5.

Non Mandatory Committees

(a) Risk Management Committee

Risk Management Committee consists of the following persons namely:

1. Mr. Dilip Suryavanshi Chairman
2. Mr. Devendra Jain Member
3. Mr. Amogh Kumar Gupta Member
4. Mr. Ashwini Verma Member
5. Mr. Abhishek Shrivastava Secretary to the Committee

Terms of reference of the Risk Management Committee as under:

1. Laying down risk assessment plan minimisation procedures and informing the Board ofthe same;

2. Framing implementing reviewing and monitoring the risk management plan for theCompany; and

3. Performing such other activities as may be delegated by the Board and/or arestatutorily prescribed under the Listing Regulations.

The Committee has formulated a Risk Assessment and

Management Policy to create and protect shareholders' value by minimizing threats orlosses and identifying and maximizing opportunities. Risk Management Policy of theCompany outlines different kinds of risks and risk mitigating measures to be adopted bythe Board. The Company has adequate internal control systems and procedures to combat therisk.

And the Committee met once during the Financial Year 2016-17 on March 27 2017. Themeeting was conducted to review proper implementation of objective of Risk ManagementPolicy. The requisite quorum was present at the Meeting.

(b) Borrowing Committee

The Board constituted the Borrowing Committee to negotiate nalise and approve theproposals for borrowings from various Banks Financial Institutions and the FinanceCompanies. The members of the Committee are as under:

1) Mr. Dilip Suryavanshi Chairman
2) Mrs. Seema Suryavanshi Member
3) Mr. Bharat Singh Member
4) Mr. Karan Suryavanshi Member
5) Mr. Kundan Kumar Das Member
6) Mr. Pradeep Suryavanshi Member
7) Mr. Abhishek Shrivastava Secretary to the Committee

And the Committee met 51 (fty one) times during the Financial Year 2016-17. Therequisite quorum was present at all the Meetings.

The terms of reference of the Borrowing Committee of the Company include the following:

1. To negotiate nalize and approve the proposals for borrowings including leasefacilities for procurement of assets on lease basis from various banks financialinstitutions and the finance companies and the terms and conditions of such borrowings andlease facility provided that at any one meeting of the said committee the committeeshall not approve the proposals for borrowings exceeding Rs. 200.00 Crores (Rupees TwoHundred Crores).

2. To appoint any one or more o cial(s) of the company as Authorized Signatory(ies) toexecute and sign all the agreements security documents and other necessary documentsincluding any amendment to the executed documents with the concerned bank or nancialinstitution or finance companies as may be required by them in their prescribed format orotherwise and to perform all other acts for and on behalf of the Company as may berequired to avail the facility.

(c) Business Development & Administration Committee

The Board constituted the Business Development &

Administration Committee to take decisions regarding the day to day business operationsof the Company. The members of the Committee are as under:

1) Mr. Dilip Suryavanshi Chairman
2) Mrs. Seema Suryavanshi Member
3) Mr. Devendra Jain Member
4) Mr. Kundan Kumar Das Member
5) Mr. Abhishek Shrivastava Secretary to the Committee

The Committee met 39 (Thirty Nine) times during the Financial Year 2016-17. Therequisite quorum was present at all the Meetings.

The terms of reference of the Business development &

Administration Committee of the Company inter alia includes the following:-

1. To approve nalise the terms and conditions of the proposals/projects/Bidapplication Joint Venture Agreement and other documents and writings as may be requiredfor processing and nalizing the applications for making bids for the projects.

2. To authorize any Officer of the company consultant agent authorized o cial ofjoint venture partner of the company or any other person to sign and submit allapplications Bids Agreements and other documents and writings and to participate inpre-applications and other conference and to provide information to the Authority to signand execute all contracts including the Concession Agreement and undertaking consequent toacceptance of above mentioned Bid.

3. To approve and provide any of the undertakings resolutions and other relateddocuments in respect of the projects awarded to the Company and authorize any person tosign and submit the same with the concerned authorities.

4. Approval of any other matter that is deemed necessary in respect of any project andto carry out and to do all such acts deeds and things required in connection therewith.

5. To approve and transact routine administrative matters.

6. To review the operations of the Company in general.

7. To authorize opening and closing of bank accounts or any other banking requirement.

8. To authorize additions/deletions to the signatories pertaining to bankingtransactions.

9. To approve donations as per the policy approved by the Board.

10. To delegate authority to the Company o cials to represent the Company at variouscourts government authorities and so on.

11. To review and follow up on the action taken on the Board decisions.

12. To review propose and monitor annual budget if any subject to the rati cation ofthe Board.

13. To attend to any other responsibility as may be entrusted by the Board within theterms of reference.

(d) Lending & Investment Committee

The Board constituted Lending & Investment Committee to delegate its power toinvest the funds of the company; and to grant loan provide guarantee and security. Themembers of the Committee are as under:

1) Mr. Dilip Suryavanshi Chairman
2) Mr. Devendra Jain Member
3) Mr. Satish Chandra Pandey Member
4) Mr. Amogh Kumar Gupta Member
5) Mr. Abhishek Shrivastava Secretary to the Committee

The terms of reference of the Committee includes the authority under section 179(3)read with the section 185 188 and the provisions of the SEBI (LODR) Regulations 2015 asmay be applicable to the Company from time to time and are as follows:-

1. To make investment and acquire by way of subscription purchase or otherwisesecurities of any other body corporate provided that the total amount of such investmentsto a particular body corporate shall not exceed Rs. 50 Crores at any time interveningbetween two Board meetings of the Company subject to the maximum limits as may beavailable to the Company u/s 186 of the Companies Act 2013 or such resolutions passed bythe Company in the general meeting wherever applicable.

2. To give any loan guarantee security indemnity to any person or other bodycorporate including the subsidiary and associate concerns or otherwise as the case maybe provided that such loan to each person or body corporate shall not exceed Rs. 50Crores at any time intervening between two Board meetings of the Company.

3. To consider and decide the requirement for incorporation of a new subsidiary companyand authority to make such initial contribution in the share capital and furtherinvestment in such new company and to nominate the signatory and directors for and onbehalf of the Company.

4. To consider and decide the requirement for acquiring any shares of anybody corporateor becoming partner in any of the Joint venture/LLP/Partnership rm and to nominate forappointment of the authorized representative to give authority for the Banking operationand to give authority for any project on behalf the Company.

The Committee met once during the Financial Year 2016-17 on March 22 2017. Therequisite quorum was present at the Meeting.

Particulars of contracts or arrangements with related parties referred to Section188(1):

All transactions entered with Related Parties for the year under review were entered onarm's length basis and in the ordinary course of business and that the provisions ofSection 188(1) of the Companies Act 2013 and the Rules made thereunder were notattracted.

The particulars of contracts or arrangements with related parties referred to inSection 188(1) is prepared in Form AOC-2 pursuant to Section 134(3)(h) of the Act and Rule8(2) of the Companies (Accounts) Rules 2014 and the same is annexed to the Board's Reportas Annexure 6.

All Related Party Transactions are placed before the Audit Committee and the Board forapproval. The Company has a process in place to periodically review and monitor RelatedParty Transactions. Omnibus approval was obtained on a yearly basis for transactions whichare of repetitive nature. All the related party transactions were in the ordinary courseof business and at arm's length.

The Audit Committee and the Board have approved the Related Party Transactions Policyand the same has been uploaded on the Company's website http://www.dilipbuildcon.co.in/les/Policy%20of%20Related%20P arty%20Transactions.pdf.

Related Party Disclosures

Disclosures of Loans and advances in the nature of loans to subsidiaries by name andamount at the year end and the maximum amount of loans outstanding during the year hasbeen disclosed in Note 4 and 28 to the Standalone Financial Statements. The saiddisclosures are also given in the Financial Statements of Subsidiary Companies.

Particulars of employees

Disclosures under section 197(12) of the Companies Act 2013 read with Rule 5(1) and5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014respectively is annexed to the Board's report as Annexure 7.

Directors' Responsibility Statement

Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 with respect to the Directors' Responsibility Statement theDirectors con rm that: a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; b) the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of theFinancial Year and of the profit of the company for that period; c) the directors hadtaken proper and su cient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; d) that the directors hadprepared the annual accounts for the Financial Year ended March 31 2017 on a goingconcern basis; e) that the directors had laid down internal nancial controls to befollowed by the Company and that such internal nancial controls are adequate and wereoperating effectively; and f) that the directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.

Internal Control System and their Adequacy

Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The internal and operational audit is entrusted to M/s Adalatwale andBhagwat a reputed rm of Chartered Accountants. The main thrust of internal audit is totest and review controls appraisal of risks and business processes besides benchmarkingcontrols with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.

To maintain its objectivity and independence the Internal Audit Function reports tothe Chairman of the Audit Committee.

Risk management

Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The risk management framework isreviewed annually by the Risk Management Committee. Some of the risks that may arise tothe Company are explained here:

(a) Financial risks

The Company's senior management have expertise to actively manage its foreign exchangeand other liquidity and nancial risks within the framework laid down by the Company. TheCompany has adopted a prudent and conservative risk mitigation strategy to minimizenancial and interest cost risks.

(b) Commodity price risks

Presently the Company is not dealing in commodities and commodity hedging activities.However the Company has in-house nancial experts to identify and review the futurepossibilities of said risks and control it accordingly.

(c) Regulatory risks

The Company is exposed to risks attached to various statutes laws and regulations. TheCompany is mitigating these risks through regular review of legal compliances carried outthrough internal control and audits.

(d) Human resource risks

Retaining the existing talent pool and attracting new talent are major risks. TheCompany has initiated various measures including training and integration of learning anddevelopment activities. The Company has formulated various schemes in the interest of theemployees i.e. DBL Employees Voluntary Benevolent Fund Scheme Camp & Accommodationwith various modern amenities Free Child Education Policy for Drivers & OperatorsOne Lakh Gift Policy for Daughters marriage of Drivers / Operators Best Drivers &Machine Operator Award.

Environment and Safety

The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.

Internal Complaints Committee (ICC) and other disclosures under the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed thereunder. Internal Complaints Committee(ICC) has been set up to redress complaints received regarding sexual harassment. Allemployees (permanent contractual temporary trainees) are covered under this policy.During the Financial Year ended March 31 2017 the Company has not received anyComplaints pertaining to Sexual Harassment.

Cautionary Statement

Statements in this Board's Report and Management Discussion and Analysis describing theCompany's objectives projections estimates expectations or predictions may be“forward-looking statements” within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make difference to the Company's operations include rawmaterial availability and its prices cyclical demand and pricing in the Company'sprinciple markets changes in Government regulations Tax regimes economic developmentsin the Country and other ancillary factors.

Acknowledgements

The Company is grateful to its customers shareholders suppliers nancialinstitutions bankers Central and State Governments for their constant support to theCompany. The Directors also place on record their deep appreciation of the contributionmade by employees at all levels the consistent growth of the Company was made possible bytheir hard work loyalty dedication coordination and support.

For and on behalf of the Board of Directors
Dilip Suryavanshi Devendra Jain
Managing Director Whole-time Director & CEO
DIN: 00039944 DIN: 02374610
Place: Bhopal
Date: August 2 2017