The Directors of your Company are pleased to present the Twenty Seventh Annual Reportto the Members with the Audited Financial Statements for the Financial Year ended on March31 2017.
STATE OF AFFAIRS OF THE COMPANY:
The performance of the Company for the Financial Year 2016-17 is as under:
(` in millions except per equity share data)
|Particulars ||Standalone for the year ended ||Consolidated for the year ended |
| ||March 31 2017 ||March 31 2016 ||March 31 2017 ||March 31 2016 |
|Revenue from Operations ||2241.9 ||1831.1 ||2224.5 ||1831.1 |
|Add: Other Income ||174.4 ||143.9 ||181.9 ||119.4 |
|Total Income ||2416.3 ||1975.0 ||2406.4 ||1950.5 |
|Less: Revenue Expenditure ||1876.6 ||1557.0 ||1861.3 ||1557.7 |
|Depreciation and Amortization ||16.2 ||14.2 ||17.4 ||14.2 |
|Finance cost ||176.3 ||145.2 ||160.3 ||145.3 |
|Pro t Before Tax ||347.2 ||258.6 ||367.4 ||233.3 |
|Less: Current Tax ||120.2 ||88.9 ||130.5 ||89.1 |
|Deferred Tax ||(1.4) ||(0.7) ||(1.4) ||(0.7) |
|Net Pro t After Tax ||228.4 ||170.4 ||238.3 ||144.9 |
|Share of Pro t/(Loss) of Associate ||- ||- ||(6.4) ||(4.7) |
|Net Pro t ||228.4 ||170.4 ||231.9 ||140.2 |
|Add: Balance Brought Forward from previous || || || || |
|Financial Year ||681.4 ||560.0 ||638.3 ||546.6 |
|Pro t available for appropriation ||909.8 ||730.4 ||870.2 ||686.8 |
|Less: Reserve due to Consolidation ||- ||- ||(5.7) ||0.5 |
|Less: Paid / Proposed Dividend (4) ||2.5 ||40.7 ||2.5 ||40.7 |
|Less: Dividend Distribution Tax (4) ||0.5 ||8.3 ||0.5 ||8.3 |
|Surplus carried to Balance Sheet ||906.8 ||681.4 ||872.9 ||638.3 |
|Security Premium ||661.6 ||567.8 ||661.6 ||567.8 |
|General Reserve ||52.5 ||52.5 ||52.5 ||52.5 |
|Reserves ||1620.9 ||1301.7 ||1587.0 ||1258.6 |
|Share Capital (3) ||393.39 ||370.23 ||393.39 ||370.23 |
|Earnings per share (EPS) before exceptional item(1)(2) || || || || |
|Basic ||0.58 ||0.46 ||0.59 ||0.38 |
|Diluted ||0.58 ||0.43 ||0.59 ||0.36 |
|EPS after exceptional item(1)(2) || || || || |
|Basic ||0.58 ||0.46 ||0.59 ||0.38 |
|Diluted ||0.58 ||0.43 ||0.59 ||0.36 |
(1) The above gures are extracted from the standalone and consolidated financialstatements as per Indian Generally Accepted Accounting Principles (GAAP).
(2) Equity shares are at par value of ` 1 per share.
(3) The Company has made allotment of 22500000 equity shares upon conversion ofwarrants having face value of ` 1 each on June 30 2016 at a premium of ` 4 each to thepromoter and promoters group on preferential basis. Further allotment of 242500 equityshares on July 23 2016 and 424000 equity shares on January 16 2017 have been made uponexercise of stock options issued to the employees under the ESOP scheme of the Company.Earnings per Share (EPS) has therefore been adjusted and calculated in accordance withAccounting Standard (AS) 20 Earnings per Share.
(4) For the year the proposed dividend and dividend distribution tax include theamount of dividend paid on shares issued and allotted after the balance sheet date butbefore the record date of previous year 2015-16 to the warrant and option holders.
REVIEW OF OPERATIONS:
Your Company's primary area of operations include construction and development ofinfrastructure and real estate projects. The majority of the projects of your Company arebeing executed in Gujarat and at Rajasthan.
Revenues - Standalone:
Company's Revenue from Operations on a standalone basis increased to ` 2241.9 Millionfrom ` 1831.1 Million in the previous year at a growth rate of 22.44 %. Out of the totalrevenue 85.88% came from Civic Urban Infrastructure i.e. ` 1925.5 Million and remainingfrom the real estate leasing and land sale on account of any real estate project notbeing fructi ed. The increase in revenue is primarily due to expanded scale of itsoperations of the Company in civic urban infrastructure activities
Revenues - Consolidated:
Company's Revenue from Operations on a consolidated basis increased to ` 2224.5Million from ` 1831.1 Million in the previous year at a growth rate of 21.48 %.
Pro ts Standalone:
Your Company's EBIDTA on a standalone basis amounted to ` 365.3 Million (16.29% ofrevenue from operations) as against ` 274.1 Million (14.97% of revenue from operations)in the previous year. Project and Operations costs were 79.54 % of revenue from operationsfor the year ended March 31 2017 as compared to 81.26% for the year ended March 31 2016.The profit before tax was ` 347.2 Million (14.37% of Total Income) as against ` 258.6Million (13.09% of Total Income) in the previous year. Net profit was ` 228.4 Million(9.45% of Total Income) as against ` 170.4 Million (8.63% of Total Income) in theprevious year.
Pro ts - Consolidated:
Your Company's EBIDTA on a consolidated basis amounted to
` 363.2 Million (16.33 % of revenue from operations) as against
` 273.40 (14.93% of revenue from operations) in the previous year. Project andOperations costs were 79.45% of revenue from operations for the year ended March 31 2017as compared to 81.22% for the year ended March 31 2016. The profit before tax was ` 367.4Million (15.27% of Total Income) as against ` 233.3 Million (11.96% of Total Income) inthe previous year. Net profit was ` 231.9 Million (9.64 % of Total Income) as against `140.2 Million (7.19 % of Total Income) in the previous year.
Your Company continues to maintain sufficient cash to meet its operations as well asstrategic objectives. The Board of Directors believe that liquidity in the Balance Sheethas to balance between earning adequate returns and the need to cover financial andbusiness risks. Liquidity enables your Company to make a rapid shift in direction ifthere is a market demand. The Directors believe that the working capital is sufficient tomeet the current requirements. As on March 31 2017 on a standalone basis the Companyhad liquid assets of ` 1473.1 Million as against
` 1427.2 Million at the previous year-end. On a consolidated basis your Company hadliquid assets of ` 1814.9 Million at the current year-end as against ` 1443.6 Millionat the previous year-end. These funds comprise deposits with banks and government. Thedetails are disclosed under the 'non-current and current assets' section in the financialstatements in this Annual Report.
The information of projects and activities are more speci cally detailed in theManagement Discussion and Analysis Report annexed to this Board Report.
REPORT ON PERFORMANCE OF SUBSIDIARY COMPANIES PURSUANT TO RULE 8 (1) OF THE COMPANIES(ACCOUNTS) RULES 2014:
Your Company is undertaking various projects through subsidiaries associates and jointventures. As per Section 129 (3) of the Companies Act 2013 your Directors have pleasurein attaching the consolidated financial statements prepared in accordance with theapplicable accounting standards with this report. In terms of proviso to Section 129(3)and Rule 8(1) of the Companies (Accounts) Rules 2014 statement containing the salientfeatures of the subsidiaries associates and joint ventures in the prescribed Form AOC 1is annexed to this report as "Annexure D". In accordance with Section 136 of theCompanies Act 2013 the audited financial statements including the consolidatedfinancial statements are available on Company's website at www.nilainfra.com. The auditedfinancial statements of each of the subsidiary associate and joint venture are availablefor inspection at the Company's registered office at Ahmedabad India and also atregistered of ces of the respective companies. Copies of the annual accounts of thesubsidiary associate and joint venture will also be made available to the investors ofNila Infrastructures Limited upon request.
The Directors have recommended payment of dividend of ` 0.11 per equity share of ` 1each i.e. 11% of paid up capital. The dividend payout shall absorb an amount of ` 43.3Million towards dividend and ` 8.8 Million towards dividend distribution tax. The dividendwill be paid to the members whose name appears in the register of members as on September23 2017. The aforesaid amount of dividend shall change accordingly upon exercise andconversion of stock options into equity shares by the employees under the ESOP schemebefore the record date.
During the year under review your Company has not accepted any deposits from the publicwithin the meaning of Section 73 and 76 of the provisions of the Companies Act 2013.
All the existing properties of the Company are adequately insured.
Pursuant to Section 152 of the Companies Act 2013 Shri Dilip D. Patel (DIN:01523277) Director of the Company retires by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible offers himself for reappointment. The tenure ofShri Manoj B. Vadodaria as Managing Director comes to an end on February 13 2018 andtherefore the members are requested to reappoint him for further period of 5 ( ve) yearsw.e.f June 01 2017. Your Directors recommend their reappointment.
Necessary resolutions for the reappointment of the aforesaid Directors have beenincluded in the Notice convening the ensuing Annual General Meeting and details of theproposal for reappointment are mentioned in the explanatory statement of the Notice.During the year under review there is no change in the Board of Directors and KeyManagerial Personnel of the Company except Shri Ashok R. Bhandari had resigned from theoffice of Director on August 10 2016 due to his busy schedule pre occupations and notbeing able to take part in the affairs of the Company. However upon resolution of his busyschedule on completion of assignments and engagements he was again appointed on the Boardon February 08 2017. All the Directors have con rmed that they are not disquali ed frombeing appointed as Directors in terms of Section 164 of the Companies Act 2013. TheCompany has also received declarations from all the Independent Directors of the Companycon rming that they meet with the criteria of independence as prescribed under sub-section(6) of Section 149 of the Companies Act 2013 and Regulation 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and the same has been noted bythe Board.
Pursuant to the provisions of the Companies Act 2013 an annual performance evaluationof the members of the Board of its own individually and working of the various committeesof the Board was carried out. The manner in which the performance evaluation was carriedout has been explained in the Corporate Governance Report.
Board and Audit Committee Meetings:
During the year under review 5 (Five) Board Meetings and 4 (Four) Audit CommitteeMeetings were held. The details of the meetings are given in the Corporate GovernanceReport as a part to the Boards' Report. The intervening gap between the meetings waswithin the period prescribed under the Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134 (3) (c) of the Companies Act 2013 withrespect to Director's Responsibility Statement it is hereby con rmed that: a) In thepreparation of annual accounts the applicable accounting standards have been followedalong with proper explanation relating to material departures; b) The Directors haveselected such accounting policies and applied them consistently and made judgment andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit and loss ofthe company for that period. c) The Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the Company for preventing and detecting fraud andother irregularities. d) The Directors have prepared the annual accounts on a goingconcern basis.
e) Proper internal financial controls are in place and that the financial controls areadequate and were operating effectively; and f) The Directors have devised proper systemsto ensure compliances with the provisions of all applicable laws and that such systems areadequate and operating effectively.
ALTERATION OF MEMORANDUM AND ARTICLE OF ASSOCIATION:
During the year under review your Company has amended the main object of the memorandumof association by inserting therein a clause to enable to undertake infrastructure andconstruction projects of varied nature. During the year under review a new set of articlesof association has been adopted in substitution and to the exclusion of the existingarticles of association. The existing articles of association was based on the provisionsof the Companies Act 1956. The new articles of association has been adopted with a viewto align the existing articles of association with the provisions of Companies Act 2013.
During the year under review following changes took place in the share capital of theCompany. a) An allotment of 22500000 equity shares was made on June 30 2016 to thepromoter and promoter group upon conversion of warrants issued on preferential basis at anissue price of ` 5/- per share. The post conversion paid up capital of the Company was `392726200 comprising of 392726200 equity shares of ` 1/- each. b) Further allotments of242500 equity shares on July 23 2016 and 424000 equity shares on January 16 2017 weremade to the employees of the Company upon exercise of stock options at an exercise priceof ` 6.64/- per share. Presently post exercise of these stock options the paid upcapital of the Company is ` 393392700 comprising of 393392700 equity shares of ` 1/-each.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Company has implemented the procedure and adopted practices in conformity with thecode of Corporate Governance as enumerated in Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The management discussion & analysis andcorporate governance report are made part of this report. A certi cate from the statutoryauditors regarding compliance of the conditions of corporate governance is given inannexure which is attached hereto and forms part of the Directors' report. Disclosure interms of Schedule V (Part II) (Section II) (B) (iv) (IV) of the Companies Act 2013 arementioned in Corporate Governance Report as a part of this report.
STATUTORY AUDITORS AND AUDITORS' REPORT:
In terms of the provisions of Section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014; the term of the present auditor of the CompanyM/s O P Bhandari & Co. expires at the ensuing annual general meeting and therefore theBoard of Directors of your Company have upon recommendation of audit committee decidedto appoint a new firm of auditor. The Board of Directors have received recommendation fromthe audit committee for appointing B S R & Associates LLP (FRN: 116231W / W-100024) asthe statutory auditors for a period of 5 ( ve) years subject to them ratifying the saidappointment at every annual general meeting.
There is no quali cation reservation or any adverse remark or disclaimer in the auditreport of M/s O P Bhandari & Co.
M/s Dalwadi & Associates Cost Accountant Ahmedabad (FRN: 000338) has conductedthe audit of the cost record of the Company for the Financial Year 2016-17.
SECRETARIAL AUDITOR'S REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasreappointed Mr. R S Sharma Practicing Company Secretary (Membership No 3126) toundertake the Secretarial Audit of the Company. However upon sudden death of Mr. R SSharma; the Board of Directors has appointed M/s Umesh Ved & Associates CompanySecretaries Ahmedabad as the secretarial auditor of the Company to conduct secretarialaudit for the year 2016-17. The report of the Secretarial Auditor is annexed herewith as"Annexure F". The report of the secretarial auditor is self explanatory and conrming compliance by the Company of all the provisions of applicable corporate laws.
The Audit Committee constituted in accordance with the provisions of Section 177 of theCompanies Act 2013 and Regulation 18 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 reviewed the financial results and financial statementsaudit process internal control system scope of internal audit and compliance of relatedregulations as prescribed. The Composition and terms of reference of the audit committeeis more speci cally given in the Corporate Governance Report as a part of the Boards'Report.
VIGIL MECHANISAM (WHISTLE BLOWER POLICY):
The company has established Vigil Mechanism (Whistle Blower Policy) in accordance withthe provisions of Section 177 of the Companies Act 2013 and Regulation 22 of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 for the employees toreport to the management instances of unethical behavior actual or suspected fraud orviolation of the Company's code of conduct. The detail of the Whistle Blower Mechanism isexplained in the Corporate Governance Report and the policy adopted is available on theCompany's website at www.nilainfra.com under investor segment.
DISCLOSURE IN TERMS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has in place an anti sexual harassment policy in line with the requirementof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. There is no such instance reported during the year under review.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING:
In terms of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations 2015the Company has adopted Code of Conduct prohibiting regulating and monitoring thedealings in the securities of the Company by Directors Designated Employees and ConnectedPersons while in possession of unpublished price sensitive information in relation to thesecurities of the Company The code of conduct is available at the Company's website atwww.nilainfra.com under investor segment.
STATUTORY DISCLOSURES REQUIRED UNDER RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES 2014:
There is no foreign exchange earnings and outgo during the year under review.Conservation of energy has always been of immense importance to your Company and all theequipments consuming energy have been placed under continuous and strict monitoring. Inview of the nature of the operations no report on the other matters is required to bemade under Section 134 (3) (m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014.
DISCLOSURES UNDER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014:
There is no change in subsidiary associate and joint ventures during the year underreview except the Company has upon completion of the projects and business arrangementsterminated the Limited Liability Partnership Agreements of Shree Matangi Projects LLP.Your Company has incorporated a wholly owned subsidiary namely "Nila Terminals(Amreli) Pvt. Ltd. by subscribing for 10000 equity shares of ` 10/- each. Your Companyhas also subscribed for another Company namely "Vyapnila Terminals (Modasa) Pvt. Ltd.for 3400 equity shares of ` 10/- each Certi cate of Incorporation of both these companieshave been issued by the Ministry of Corporate Affairs on April 11 2017 and on April 282017 respectively. Both these Companies are incorporated in term of the requirement oftenders awarded by Gujarat State Road Transport Corporation.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT MADE BY THE COMPANY DURING THE YEAR:
As regards investments by the Company the details of the same are provided under NoteNo. 12 forming part of the financial statements of the Company for the financial year2016-17 Details of loans given to other persons covered under Section 186 of the CompaniesAct 2013 are given in the Note No. 28 relating to related parties to the financialstatements.
RELATED PARTY TRANSACTIONS:
In terms of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has adopted policy on dealing with related partytransactions. All related party transactions that were entered into by the Company duringthe financial year were in the ordinary course of business and were at arm's length basis.There are no material significant related party transaction made by the Company with itsDirectors Promoters Key Managerial Personnel or their relative. All Related PartyTransactions are placed before the audit committee / Board as applicable for theirapproval Omnibus approval are taken for the transactions which are repetitive in nature.The Related Party Transactions that were entered into by the Company were to facilitatesmooth functioning of the ordinary course of business and are in the interest of theCompany. Accordingly the disclosure of related party transactions as required underSection 134(3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable. The policyon related party transactions as approved by the Board is available on the website of thecompany www.nilainfra.com under investor segment.
INTERNAL FINANCIAL CONTROL:
The Board of Directors has in terms of the requirements of Section 134(5)(e) of theCompanies Act 2013 laid down the internal financial controls. The Company has in place awell defined organizational structure and adequate internal controls for efficientoperations which is cognizant of applicable laws and regulations particularly thoserelated to protection of properties resources and assets and the accurate reporting offinancial transactions in the financial statements. The company continuously upgradesthese systems. The internal control system is supplemented by extensive internal auditsconducted by independent firm of chartered accountants.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
In terms of the provisions of Section 135 of the Companies Act 2013 your Company hasconstituted CSR Committee comprising of Shri Shyamal S. Joshi Chairman Shri Kiran B.Vadodaria and Shri Manoj B. Vadodaria as the other members. As a part of CSR the Companyhas spent funds for the projects involving promotion of sanitation and preventivehealthcare. As a part of Clean India Campaign your Company is undertaking a projectnamely "My Own Street" to spread awareness of environmental protection andcleanliness by encouraging people to participate and make habit to keep the society clean.The Annual Report on CSR activities for the Financial Year 2016-17 is annexed herewith as"AnnexureA".
NOMINATION AND REMUNERATION COMMITTEE:
Pursuant to the provisions of Section 178 of the Companies Act 2013 and Regulation 19of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Companyhas constituted Nomination and Remuneration Committee and adopted policy on appointmentand remuneration of Directors and Key Managerial Personnel. The composition terms ofreference of the Committee and policy on appointment and remuneration of Directors andKMPs are given in the Corporate Governance Report as a part to the Boards' Report.
No material changes have taken place since the closure of the financial accounts up tothe date of the report which may substantially affect the financial performance or thestatement of the Company.
During the year under review no employee of the Company was in receipt of remunerationin excess of the limits prescribed under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
EMPLOYEE STOCK OPTION SCHEME:
The stock options granted to the eligible employees operate under the "NilaInfrastructures Ltd. ESOP- 2014". The disclosures as required under the law have beenmade in the
"Annexure B" to this report.
DISCLOSURES IN TERMS OF RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014:
The information as required under Rule 5 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are given in the "Annexure E" to thisreport.
EXTRACT OF THE ANNUAL RETURN:
The extract of annual return in the prescribed form MGT-9 for the Financial Year March31 2017 is attached with the Directors' Report as "Annexure C".
APPRECIATIONS AND ACKNOWLEDGMENTS:
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to become a meaningful player in the infrastructureindustry. Your Directors would also like to places on record its appreciation for thesupport and cooperation your Company has been receiving from its StakeholdersCorporations Government Authorities Joint Venture partners and others associated withthe Company. The Directors also take this opportunity to thank all Investors ClientsVendors Banks Financial Institutions Government and Regulatory Authorities and StockExchanges for their continued support. Your Directors also wish to record theirappreciation for the continued co-operation and support received from the Consultants andAdvisors. Your Company looks upon them as partners in its progress and has shared withthem the rewards of growth. It will be the Company's endeavour to build and nurture stronglinks with the business based on mutuality of benefits respect for and cooperation witheach other consistent with consumer interests.
TRIBUTE TO SHRI R. S. SHARMA SECRETARIAL AUDITOR:
Shri R.S.Sharma Secretarial Auditor of the Company passed away on February 18 2017.Shri R.S.Sharma was considered as doyer of corporate laws promoter of corporategovernance and a strict observer of professional ethics. Your Directors pray almighty torest his truly blessed soul in eternal peace. We dedicate this year's theme of AnnualReport to Late Shri R.S.Sharma who inspired the corporate to uplift their compliancesupgrade their corporate governance practices and upsize the business ethics.
For and on behalf of the Board of Directors
Manoj B. Vadodaria
Date: May 26 2017
Chairman & Managing Director