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Madhav Infra Projects Ltd.

BSE: 539894 Sector: Infrastructure
NSE: N.A. ISIN Code: INE631R01018
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Madhav Infra Projects Ltd. (MADHAVINFRA) - Director Report

Company director report

To

The Members

Madhav Infra Projects Limited

Your Directors have pleasure in submitting their 23rd Annual report on thebusiness and operations of the Company along with the Audited Balance Sheet and Profit& Loss Accounts for the year ended March 31 2016.

1. FINANCIAL HIGHLIGHTS

Financial Results of the Company for the year under review along with the figures forprevious year are as follows:—

(Rs. in Crore) except per equity share data
Particulars Year Ended on 31.03.2016 Year ended on 31.03.2015
Net Sales/ Income from Operation 306.45 276.22
Other Income 2.30 1.51
Total Income 308.76 277.73
Profit before interest Depreciation & Tax 41.31 27.08
Less Interest (Financial Cost) 18.14 6.79
Depreciation 9.37 8.79
Profit Before Tax 13.80 11.50
Less Previous years Adjustments 1.94 (0.78)
Provision for Wealth Tax
Provision for Current year Income Tax 2.76 4.51
Net Profit after tax 9.10 7.77
Add: Balance carried from Profit & Loss A/c 00 00
Less: Provision for earlier year taxation 00 00
Net Profit after tax and adjustments 9.10 7.77
Dividends: Interim Dividend 00 00
Dividends: Final Dividend (Proposed) 00 00
Transferred to general Reserve 9.10 7.77
Balance carried to the balance sheet
EPS (Basic) 14.20 12.13
EPS (Diluted) 14.20 12.13

2. OPERATION AND PERFORMANCE REVIEW

The Company recorded revenues of Rs. 308.76 Crore in the year under review as againstRs. 277.73 Crore in the previous year. The Company took several initiatives during thelast financial year such as strengthening its presence across the present operatingareas capitalize on new opportunities that helped in achieving and consolidating growth.The growth in revenues was 11% on y-o-y basis. The EBIDTA for the year was Rs. 41.31 Croreas compared to Rs. 27.08 Crore in the previous year. The Profit after tax was Rs. 9.10crore against Rs. 7.77 Crore for the previous year. The company’s net worth touchedRs. 98.63 Crore as on March 31 2016 from Rs. 54.59 Crore as on March 31 2015.

3. DIVIDEND

Your Directors feel that it is prudent to plough back the profits for future growth ofthe Company and do not recommend any dividend for the year ended March 31 2016. TheCompany issued 1% Non – Cumulative Preference Shares during the year 2015-16. YourDirectors have not recommended dividend for the period ended March 31 2016.

4. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act 2013 there is no unclaimed dividend duefor remittance to the Investor Education and Protection Fund established by the CentralGovernment.

5. PROJECT IMPLEMENTATION AND PERFORMANCE REVIEW:

During the year under review Your Company has various projects through various clientswere as under: Opal-Civil works for Plant Building through Fernas Construction (India)Private Limited. EPC work for Development of Sihora-Majhgawan-Silodi (MDR) Road throughMadhav (Sehora Silodi Corridor) Highway Private Limited. EPC work for Development ofPhoolsagar-Niwas-Shahpura Road in the state of Madhya Pradesh through Madhav (PhoolsagarNiwas Shahpura Corridor) Highway Private Limited. EPC work for Development ofBudhni-Rehti-Nasrullagunj-Khategaon Road in the state of Madhya Pradesh through MadhavInfracon (BK Corridor) Private Limited. EPC work for Reconstruction of High level Bridgeover Bina River & Dhasan River with approach Roads on NH-86 at Bhopal- Sanchi- SagarRoad in the state of Madhya Pradesh. Civil Contract of widening and Reconstruction ofBandri- Jaruwakheda Nirtala – Mandi- Bamora Damoh- Hindoriya- Patera Prithvipur-Niwari Ajaygarh – Toriya- Bariyapur and Palera-Baldeogarh in the state of MadhyaPradesh. EPC for Rehabilitation and Up-gradation of Bhopal-Berasia – Sironj Roadprojects in the state of Madhya Pradesh. Civil works for Auditorium Building and ChemicalTeal Storage Building for M/s ONGC Petro Additions limited at Dahej through FernasConstruction (India) Private Limited. 5 MW Solar PV Rooftop Power Project inVadodara Gujarat.

6. SUBSIDIARY COMPANIES

The Company have a Subsidiary Companies. All the Subsidiaries involved in the businessof developing the infrastructure in the state of Madhya Pradesh in India. The mainlycompany doing an ease of business for Build developing Maintaining of highways bridgesand roads. MI Solar (I) Private Limited the Company engage in Business of Renewableenergy through solar generation trading and transmitting etc. The Company havingfollowing subsidiaries mentioned below.

Madhav Infracon (BK Corridor) Private Limited

Madhav (Sehora Silodi Corridor) Highways Private Limited

Madhav (Phoolsagar Niwas Shahpura Corridor) Highways Private Limited

Madhav Industrial Park Private Limited

MI Solar (I) Private Limited

During the year the Board reviewed the affairs of the Subsidiaries. In accordance withSection 129(3) of the Companies Act 2013 we have prepared consolidated financialstatement Company which form part of this Annual Report. A detailed financial statementcontaining of Subsidiaries in prescribed format AOC-1 has been annexed as Annexure - Ato this report.

7. CREDIT RATING

Your Company has been assigned a rating of CARE BBB+ (Plus) for Loan Term Bank Limitsof Rs. 130 Crores and Long term/Short term Rs. 239 Crores CARE BBB+ (Plus) /CAREA3+(Plus). This credit rating assigned by CARE for the short term. The rated LOC carrieslowest credit risk. The rating is assigned by CARE.

8. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required in Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed andforming part of the Directors' Report.

9. INSURANCE & RISK MANAGEMENT

The assets of the Company are adequately insured against the loss of fire riotearthquake terrorism loss of profits etc. and other risks which considered necessary bythe management. In addition to this coverage a statutory Public Liability InsurancePolicy has been taken to cover by company for providing against the Public liabilityarising out of Road accidents for employees working in plants.

10. DEPOSITS

The Company has not accepted any Deposit as defined under section 73 of the CompaniesAct 2013 and rules framed thereunder from the members or the general Public as on March31 2016. There are no small depositors in the Company.

11. PARTICULARS OF LOANS GAURANTEES OR INVESTMENT

During the year your Company have given Loan or any Guarantee or provided any Securityor made any investment which covered under section 186 of the Companies Act 2013. Thedetails of loans made by the Company mentioned below:

(Rs. in Lakhs)
Sr. No. Name of entity Relationship Amount of Loan Made Purpose of Loan
1 MI SOLAR (India ) Private Limited Subsidiary 5.98 General Business Purpose

During the year the Company has given a Guarantees to the Company’s mentionedherein as under:

(Rs. in Lakhs)
Sr. No. Name of the Company Amount
1 Madhav (Sehora Silodi Corridor) Highways Private Limited 6055.96
2 Madhav (PNS Corridor) Highways Private Limited 10508.00
3 S J Green Park Energy Private Limited 3223.00
4 Madhav Infracon (B K Corridor) Private Limited 1767.61

During the year the Company has made an Investment as mentioned below:

(Rs. in Lakhs)
Sr. No. Name of the Company Amount
1 Madhav Industrial Park Private Limited 0.51
2 MI Solar (India) Private Limited 0.51
3 Madhav (PNS Corridor) Highways Private Limited 4133.20
4 Madhav (Sehora Silodi Corridor) Highways Private Limited 2711.10

12. LISTING OF SECURITIES OF THE COMPANY

Your Company get listed in Bombay Stock Exchange ("BSE") Limited onMay 24 2016 and having Scrip Code is 539894.

13. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of section 134(5) the Board confirm and submit theDirectors' Responsibility Statement:—

(a) in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(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 and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) The directors had laid down internal financial controls which are adequate andoperating effectively. "Internal financial controls" means the policies andprocedures adopted by the company for ensuring the orderly and efficient conduct of itsbusiness including adherence to company’s policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information;

(f) The directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

14. BOARD EVALUATION

SEBI (Listing Obligations and Disclosers Requirements) Regulations 2015 mandatesthat the Board has carried out an annual evaluation of its own performance Boardcommittees and individual directors pursuant to the provisions of the Act.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the Board after seeking inputs from the committee members. TheBoard and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the Board and committee meetings. The Chairman was also evaluatedon the key aspects of his role. In a separate meeting of Independent Directorsperformance of non-independent directors performance of the Board as a whole andperformance of the Chairman was evaluated taking into account the views of executivedirectors and non-executive directors.

15. NUMBERS OF BOARD MEETINGS

The Board of Directors met Eighteen times during the year under review. The details ofboard meetings and the attendance of the directors are provided in the CorporateGovernance Report.

16. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year there has no change in Directors and Key Managerial Personal. Mr.Haresh Kapuriya has been resign from the post of Company Secretary with effect fromJune 17 2016 and Mr. Gopal Shah appointed as a Company Secretary with effect fromJune 17 2016.

17. RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee and the Board forapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are of a foreseen and repetitive nature. The transactions entered into pursuant tothe omnibus approval so granted are placed before the Audit Committee and the Board ofDirectors for their review and approval on a quarterly basis.

All contracts/arrangements entered by the Company during the previous financial yearwith the related parties were in the ordinary course of business and on arm’s lengthbasis.

Particulars of contracts or arrangements with related parties referred to in Section188 (1) of the Companies Act 2013 in the prescribe Form AOC- 2 has been annexedherewith as Annexure - B to this report.

18. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in form MGT- 9 prescribed as under Section 134(3) (a)of the Companies Act 2013 for the year 2015-16 has been annexed herewith as Annexure- C to this report.

19. CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTIONS ANDFOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as prescribed under Section 134 (3)(m) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 is given as per 'Annexure D'and forms part of the Directors' Report.

20. AUDITOR'S AND THEIR REPORT

M/s. Bhagat & Co. Chartered Accountants (Registration No.127250W) who werereappointed as Statutory Auditors at the last Annual General Meeting have completed theirconsecutive term of four years. Section 139 of the Companies Act 2013 and the Rules madethere under provide that a company can appoint a firm as auditor for maximum two terms offive consecutive years. In other words a company can make appointment of auditor for fiveyears at a time. Since M/s. Bhagat & Co. have already completed their term of fouryears appointment of M/s. Chandrakant & Seventilal & J. K. Shah & Co.Chartered Accountants (Registration No. 101676W) as the Statutory Auditors of the Companyhas been approved by Audit Committee for the year 2016-17 for their first year and theirappointment is recommended by the Board for approval of shareholders at the ensuing AnnualGeneral Meeting for a period of up to five financial years i.e. till the 28thAGM. The Auditors report for financial year ended on March 31 2016 does not contain anyqualification reservation or adverse remark. The Auditors report enclosed with thefinancial statements in the Annual Report.

21. SECRETARIAL AUDITORS

Mr. Hemant Valand of M/s. KH & Associates Practicing Company Secretaries wasappointed to conduct secretarial audit of the Company for the year ended on March 312016 as required under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit Report given by Secretarial Auditors in Form No. MR-3 has been annexedherewith as Annexure -E to this report.

The Board has appointed Mr. Hemant Valand of M/s. KH & Associates PracticingCompany Secretaries as secretarial auditor of the Company.

22. CORPORATE SOCIAL RESPONSIBILITY

The Company has formulated CSR policy as provided under Section 135 of the CompaniesAct 2013. The Company is committed to discharging its social responsibility as a goodcorporate citizen. As part of its social responsibility the Company has conducted healthawareness programme and immunization camps in the peripheral slum areas of Vadodara forthe poor section of the society. The Corporate Social Responsibility Report has beenannexed herewith as Annexure- F to this report.

23. CORPORATE GOVERNANCE

Your Company strives to incorporate the appropriate standards for corporate governance.Report on Corporate Governance and a Certificate from the Statutory Auditors M/s. Bhagat& Co. Chartered Accountants (Registration No. 127250W) regarding compliance of theconditions of Corporate Governance as stipulated in Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 form part of this AnnualReport./ has been annexed herewith as Annexure - G to this report.

24. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by any regulator or court ortribunal impacting the going concern status and your Company’s operations in future.

25. DECLARATION BY INDEPENDENT DIRECTORS

The Independent directors have submitted their disclosure to the Board that they fulfilall the requirements as to qualify for their appointment as an Independent Director underSection 149 (7) of the Companies Act 2013 that he meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and regulation 25 of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015.

26. FAMILIARIZATION PROGRAME FOR INDEPENDENT DIRECTORS

Your company organizing Familiarization programme time to time for IndependentDirectors newly appointed. Further your Company issue a formal letter of appointmentdelineation his/her Role Function Duties and Responsibilities.

27. PARTICULARS OF EMPLOYEES

None of the employee was drawing in excess of the limits prescribe under section 197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been annexed herewith as Annexure- H to this report.

28. POLICIES

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandateto formulations of certain policies for all listed Companies. Accordingly the Company hasformulated the Policies for the same as the Company believed to retain and encourage highlevel of ethical slandered in business transactions. All our Corporate Governance Policiesare available on our website www.madhavcorp.com.

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

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and has also created an Internal Complaints Committee headed byMrs. Neelakshi Khurana Director of the Company who directly reports to the Chairman &Managing Director. During the financial year ended 31st March 2016 theCompany has not received any complaints pertaining to sexual harassment.

30. ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the overwhelming co-operation andassistance received from investors customers business associates bankers vendors aswell as regulatory and governmental authorities. Your Directors also thank the employeesat all levels our consistent growth was made possible by their hard work solidaritycooperation and support.

For and on behalf of the Board of Directors
Date: August 14 2016 Amit Khurana
Place: Vadodara Chairman and Managing Director

Annexure D

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 is set out hereunder.

1) CONSERVATION OF ENERGY

a) Steps taken for conservation of energy

Utilization of energy is the one of the core area used during the construction. Totalcost of construction includes large part of energy consumption. Energy conservationcontinues to be the key focus area of your Company. The Company is making continuouseffort for energy conservation. Effective measures have been taken to monitor consumptionof energy during the process of construction. Continuous monitoring and awareness amongstemployees has helped to avoid wastage of energy. Major steps taken for energy conservationfor FY 2015-16 including some of the proposed steps are as under: Your company’s headoffice corporate office and toll booths are so well constructed which required minimumpower consumption during daylights. Your company has acquired highly efficientmachinery/equipment which gives maximum output by using optimum resources. Continuously wetake necessary activities to educate and encourage employees to establish energy efficientpractices.

b) Steps taken by the Company for Utilizing alternative source of energy

Solar panels turn energy from the sun’s rays directly into useful energy that canbe used in homes and businesses. There are two main types: solar thermal and photovoltaicor PV. Solar thermal panels use the sun’s energy to heat water that can be used inwashing and heating. PV panels use the photovoltaic effect to turn the sun’s energydirectly into electricity which can supplement or replace a building’s usual supply.Your Company has set up solar panel at your corporate office which generate photovoltaicelectricity from sunlight/sun heat.

c) The capital investment on energy conservation equipment

Your Company has invested Rs. 13.98 Crore towards energy conservation equipment.

2) TECHNOLOGY ABSORPTION

a) Efforts made towards technology absorption

Your Company has made efforts towards utilization of best technology available in themarket to curb cost. Your Company lays considerable emphasis on quality maintenance andproduct enhancement. Your Company has spent money towards technology absorption as whenrequired.

b) Expenditure on R & D

Your Company has not been spend any money towards research and development.

3) FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. In Lacs)
Particulars 2015-16 2014-15
a) Total Foreign Exchange Used in Import 3221.66 5777.76
b) Total Foreign Exchange Earned from Export Nil Nil

 

For and on behalf of the Board of Directors
Date: August 14 2016 Amit Khurana
Place: Vadodara Chairman and Managing Director