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AJR Infra & Tolling Ltd.

BSE: 532959 Sector: Engineering
NSE: AJRINFRA ISIN Code: INE181G01025
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OPEN 1.46
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VOLUME 746868
52-Week high 3.32
52-Week low 0.55
P/E 5.76
Mkt Cap.(Rs cr) 136
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.46
CLOSE 1.49
VOLUME 746868
52-Week high 3.32
52-Week low 0.55
P/E 5.76
Mkt Cap.(Rs cr) 136
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

AJR Infra & Tolling Ltd. (AJRINFRA) - Director Report

Company director report

To

The Shareholders of

Gammon Infrastructure Projects Limited

Your Directors have pleasure in submitting their Eighteenth Annual Report together withthe Audited Accounts of the Company for the financial year ended March 31 2019 ("FinancialYear").

FINANCIAL HIGHLIGHTS

The financial highlights of the Company on stand-alone and consolidated basis for theFinancial Year are as under:

Standalone

Consolidated

Particular Financial Year ended March 31 2019 Financial Year ended March 31 2018 Financial Year ended March 31 2019 Financial Year ended March 31 2018
Income 5887.84 17669.38 52675.19 64301.88
Earnings before interest tax depreciation and amortization 2648.11 3692.53 22915.12 26270.71
Financial costs 2231.53 2239.88 36128.43 33992.90
Depreciation and amortization 68.99 60.85 10874.67 8724.22
Tax expenses 27.78 247.33 5477.01 1587.39
Minority interest & share of profit of associates N. A. N. A. (5443.77) (3986.28)
Net Profit after Tax / (Loss) (7341.19) 1144.47 (20986.77) (18565.45)

DIVIDEND & RESERVES

The Board express its inability to recommend any dividend for the Financial Year inview of the liquidity constraints. No amounts have been transferred to any reserve.

CHANGE IN REGISTERED OFFICE OF THE COMPANY

The Registered Office of the Company has been changed from Gammon House Veer SavarkarMarg Prabhadevi Mumbai -400025 to Orbit Plaza CHS Ltd. 5th Floor Plot No.952/954 New Prabhadevi Road Prabhadevi Mumbai-400025 with effect from 12thMarch 2019.

COMPANY'S BUSINESS

Your Company in consortium with Gammon Engineers and Contra ctors Private Limited ("GECPL")has successfully bid for a road project in the State of Odisha on Engineering Procurementand Construction ("EPC") mode from National Highways Authority of India ("NHAI").During the FY 2018-19 the Company has signed the EPC Agreement with NHAI and hassubmitted the Performance Bank Guarantee for the same. The Company has mobilised theresources and commenced the pre-construction activities at project site. The constructionwork will commence once the appointed date for the EPC project is declared by NHAI.

In addition to the above the Company has three projects in the Road Sector two in thePort Sector and four in the Power Sector which are at various stages of constructionunder development and/or operation and management through project specific Special PurposeVehicles ("SPVs").

THE FUTURE

Most players in the infrastructure industry including your Company continue to face aresource crunch over the last few years. There is a sizable gap between the Company'sinternal accruals and the requirement of funds for capital investment in existing and newprojects and revenue expenditure. The ability of the Company to raise external funds hasalso been affected due to adverse market conditions. However to ease the presentsituation the Company is actively taking steps for realization of its receivables fromNHAI and other public sector authorities. Further upon resolution of certain contractualobligations on few of the delayed projects release of resources stalled thereof willbring back the Company into mainstream.

Your Company is focusing on strategic partnerships and change in management at holdingcompany level with selective opportunities. The plan is to get "almost ready"projects commissioned at the earliest and operate the projects successfully. Thecommencement of works on the EPC contract on the Odisha project will provide themuch-needed top line. Your Company is confident that these projects will contributepositively to the bottom line and improve the cash position.

SHARE CAPITAL OF THE COMPANY

There has been no change in the share capital of the Company during the Financial Year.The paid up share capital of the Company stood at Rs. 188.36 Crores as at 31stMarch 2019 comprising of 941830724 equity shares of Rs. 2/- each fully paid up.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company's internal control systems with reference to Financial Statementscommensurate with the nature and size of its business operations. Your Company hasmaintained a proper and adequate system of internal controls. This ensures that all Assetsare safeguarded and protected against loss from unauthorized use or disposition and thatthe transactions are authorised recorded and reported diligently. The Managementcontinuously reviews the internal control systems and procedures for the efficient conductof the Company's business.

INTERNAL AUDIT

M/s. Nitin H Rajda & Co. Chartered Accountants Mumbai is the Internal Auditor ofthe Company. The Internal Auditor monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliances with operating systems accountingprocedures and policies and reports the same on quarterly basis to the Audit Committee.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 your Directors based on therepresentations received from the operating management and after due enquiry confirmthat:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the Financial Year and of the loss ofthe Company for the period;

c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down adequate internal financial controls to be followed by theCompany and such internal financial controls operated effectively during the FinancialYear; and

f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors

At the request of the Nomination & Remuneration Committee and the Board ofDirectors Mr. Kishore Kumar Mohanty agreed to continue as the Managing Director of theCompany upto an extended period of six months beyond the present tenure which expired on11th April 2019 subject to shareholders' approval at the ensuing AnnualGeneral Meeting.

Mr. Mahendra Kumar Agrawala was appointed as an additional director in the category ofIndependent Director with effect from October 31 2018 and holds office as such up to thedate of ensuing Annual General Meeting.

Ms. Homai Daruwalla was appointed as an additional director w. e. f. 30thJune 2019 in the category of an independent director consequent to the expiry of hertenure of 5 years as an Independent Director on 29th June 2019.

Mr. Abhijit Rajan vacated office of Director of the Company w.e.f. 7th May2018.

Mr. Vardhan Dharkar Non-Executive Non-Independent Director has resigned as Directorof the Company with effect from January 17 2019 due to his pre-occupation.

Mr. Sanjay Sachdev has resigned as an Independent Director of the Company with effectfrom February 20 2019 due to his personal commitments.

Mr. Sushil Chandra Tripathi having served as an independent director of the Companyfor more than 10 years since his initial appointment has resigned as an independentdirector of the Company effective 21st May 2019.

The Board took on record its appreciation for the valuable services provided by Mr.Vardhan Dharkar Mr. Sanjay Sachdev and Mr. S. C. Tripathi during their tenure asdirectors of the Company.

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Chayan Bhattacharjee is liable to retire by rotation atthe ensuing Annual General Meeting and has offered himself for re-appointment.

Independent Directors of the Company have furnished necessary declarations to theCompany under Section 149(7) of the Companies Act 2013 confirming that they meet withthe criteria of Independence as prescribed for Independent Directors under Section 149(6)of the Act and Regulation 16(b) of the Securities and Exchange Board of India (ListingObligations & Disclosures Requirements) Regulations 2015 (hereinafter "SEBIListing Regulations").

Key Managerial Personnel

In terms of the provisions of Section 203 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. KishoreKumar Mohanty Managing Director; Mr. Naresh Sasanwar Chief Financial Officer; and Mr.Kaushal Shah Company Secretary and Compliance Officer are the Key Managerial Personnel ofthe Company.

Other Key Personnel:

Mr. Kaushik Chaudhuri - Head Risk & Internal Audit Mr. Prakash R - President -Roads Remuneration Policy and Board Evaluation

In compliance with the provisions of the Companies Act 2013 and Regulation 27 of theSEBI Listing Regulations the Board of Directors on the recommendation of the Nomination& Remuneration Committee adopted a Policy on remuneration of Directors and SeniorManagement. The Remuneration Policy is stated in the Corporate Governance Report.

Performance evaluation of the Board was carried out during the Financial Year. Thedetails about the same are given in the Corporate Governance Report.

Familiarisation programmes for the Independent Directors

In compliance with the requirements of SEBI Listing Regulations your Company has putin place a familiarization programme for the Independent Directors to familiarise themwith their role rights and responsibilities as Directors the working of the Companynature of the industry in which the Company operates business model etc. It is alsoavailable on the Company websitehttp://www.gammoninfra.com/sec_info_pdf/Familiarisation_Programme_IndependentDirectors.pdf.

BOARD MEETINGS

The Board met six times during the Financial Year the details of which are given inthe Corporate Governance Report. The intervening gap between the two consecutive meetingswas within the period prescribed under the Companies Act 2013 and the SEBI ListingRegulations.

EMPLOYEE STOCK OPTION SCHEME

During the Financial Year the Board has not granted any options to employees under the‘GIPL Employee Stock Options Scheme - 2013' (‘Scheme'). Details of theshares issued under the Scheme as also the disclosures in compliance with SEBI (ShareBased Employee Benefits) Regulations 2014 are set out in Annexure I to this Report.

A certificate from the Statutory Auditors of the Company as required under Regulation13 of SEBI (Share Based Employee Benefits) Regulations 2014 shall be placed at theensuing Annual General Meeting for inspection by the Members.

DEPOSITS

During the Financial Year the Company has not accepted any deposits within the meaningof Section 73 and 76 of the Act read with Companies (Acceptance of Deposits) Rules 2014.

PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES

The details of loans guarantee or investment under Section 186 of the Companies Act2013 are given under Notes to Accounts of financial statements.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions entered by the Company during the financial year were inthe ordinary course of business and on arm's length basis. Details of material relatedparty transactions are given in the prescribed Form AOC - 2 which is appended to thisreport as Annexure II.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website and can be accessed at the Web link

http://www.gammoninfra.com/sec_info_pdf/PolicyonRelatedPartyTransactions16032016.pdf

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of business activities currently being carried out by theCompany your Directors have nothing to report with respect to Conservation of Energy andTechnology Absorption as required under Section 134(3)(m) read with Rule 8 of theCompanies (Accounts) Rules 2014.

Foreign exchange outgo (actual outflows): Nil

The foreign exchange earned (actual inflows): Nil

SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES

During the Financial Year 2018-19 the following changes have taken place:

Canara Bank being Lead Bank of the Consortium of Lenders to Rajahmundry GodavariBridge Limited ("RGBL") an unlisted subsidiary of the Company hasinvoked pledge of 104019039 equity shares of 10/- each constituting 51% of the paid upequity capital of RGBL held by the Company in RGBL through Canara Bank Securities Limited("Security Trustee"). Pursuant to said invocation of pledge by CanaraBank the shareholding of the Company in RGBL was reduced from 75.28% to 24.28% and RGBLceased to be a subsidiary of the Company.

In this regard the Company had written to the Lead Bank / Security Trustee forassigning a value to the invoked pledged shares for which the Company was informed thatthe invoked pledged shares of RGBL were held by the Security Trustee as collateral and theLenders had neither appropriated the pledged shares against outstanding dues nor thepledged shares were sold to any third party for realising the outstanding dues. Thereforethe beneficial ownership of the invoked pledged shares vested with the Company only.

Accordingly the beneficial shareholding of the Company in RGBL stands at 75.28% andRGBL continued to be a subsidiary of the Company.

Ministry of Corporate Affairs (MCA) has approved the closure of following subsidiariesand step-down subsidiaries of the Company:

1. Ghaggar Renewable Energy Private Limited(w.e.f. 23/03/2019);

2. Lilac Infraprojects Developers Limited (w.e.f. 25/03/2019);

3. Tangri Renewable Energy Private Limited (w.e.f. 28/03/2019); and

4. Yamuna Minor Minerals Private Limited(w.e.f. 30/03/2019-)

The activities of above companies stands closed with effect from dates mentioned above.

An application in Form STK-2 has been filed with the Ministry of Corporate Affairs ("MCA")by the Jaguar Projects Developers Limited a subsidiary of the Company for striking offthe name from the register maintained by the Registrar of Companies.

The policy for determining material subsidiaries as approved by the Board is uploadedon the Company's website and can be accessed at the web linkhttp://www.gammoninfra.com/sec_info_pdf/Policy_determining_ MaterialSubsidiary.pdf

A statement containing salient features of the financial statement of each of thesubsidiaries associates and joint venture companies as required to be provided undersection 129(3) of the Act in Form AOC-1 forms part of this Annual Report.

Pursuant to the provisions of Section 136 of the Act the financial statements of theCompany consolidated financial statements along-with relevant documents and separateaudited accounts in respect of Subsidiaries are available on the website of the Company.

BOARD COMMITTEES

The Board has presently the following committees to assist in its work:

(i) Audit Committee to inter-alia oversee and review the financial reporting systemand disclosures made in its financial results;

(ii) Stakeholders' Relationship Committee to inter-alia redress investor complaints;

(iii) Nomination & Remuneration Committee to inter-alia approve appointments andremuneration of executive directors and lay down nomination and remuneration policies ofthe Company;

(iv) Compensation Committee to administer ‘employee stock option schemes';

(v) Business Review Committee to review business projects and opportunities that arisefrom time to time;

(vi) Corporate Social Responsibility Committee to formulate and implement a‘corporate social responsibility policy' for the Company; and

(vii) The Board has voluntarily constituted Risk Management Committee to monitor andreview the risk management plan of the Company.

The constitution of the various committees its powers and duties have been elaboratedin greater detail in the ‘Corporate Governance Report' which is annexed to theAnnual Accounts.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company does not have any amount/ shares due to be transferred to InvestorEducation and Protection Fund.

VIGIL MECHANISM / WHISTLE BLOWER

In terms of section 177(9) & (10) of the Companies Act 2013 a Vigil Mechanism forDirectors and employees to report genuine concerns has been established by the Board alongwith whistle blower policy. The whistle blower policy have been uploaded on the website ofthe Company and the same can be accessed at the web link http://wwwgammoninfra.com/sec_info_pdf/Whistle_Blower_Policy.pdf

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Since there is no average net profit for the Company for the previous three financialyears no specific funds are required to be set aside and spent towards the CorporateSocial Responsibility of the Company during the Financial Year. The Company is yet toformulate the CSR Policy.

EXTRACT OF ANNUAL RETURN

In accordance with the Companies Act 2013 an extract of Annual Return in Form MGT 9is appended to this Report as Annexure III.

REPORT ON CORPORATE GOVERNANCE

In terms of Regulation 34 of the SEBI Listing Regulations a Report on CorporateGovernance along with Compliance Certificate issued by Mr. Veeraraghavan. N PracticingCompany Secretary (Certificate of Practice Number 4334) is attached and forms integralpart of this Report (herein referred to "Corporate Governance Report").

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Attention of the members is invited to a separate section titled ‘ManagementDiscussion and Analysis Report' which is covered in this Annual Report.

SECRETARIAL STANDARDS

The Company complies with all applicable secretarial standards.

REPORTING OF FRAUDS BY AUDITORS

During the Financial Year under review neither the statutory auditors nor thesecretarial auditor has reported to the audit committee under Section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees the details of which would need to be mentioned in the Board's report.

AUDITORS

At the 16th Annual General Meeting of the Company the shareholders hadappointed M/s. Nayan Parikh & Co. Chartered Accountants (FRN: 107023W) as theStatutory Auditors of the Company to hold office until the conclusion of the 21stAnnual General Meeting ("AGM") subject to ratification by shareholders at everysubsequent AGM.

Amended provisions of Section 139 of the Act vide Companies (Amendment) Act 2017notified from 7th May 2018 no longer requires ratification of appointment ofAuditors by members at every subsequent AGM. In view of this the appointment of Auditorsis not proposed for ratification at ensuing AGM.

M/s. Nayan Parikh & Co. Chartered Accountants (FRN: 107023W) have confirmed thatthey are not disqualified from continuing as Statutory Auditors of the Company.

AUDITORS' REPORT

The Auditors have qualified their opinion in their Independent Auditors Report asfollows:

a) Attention is invited to Note 28(a) to the Standalone Ind AS Financial Statements inrespect of tolling bridge project in Andhra Pradesh in the SPV Rajahmundry Godavari BridgeLimited where the SPV had served a notice of termination of the concession to AndhraPradesh Road Development Corporation (APRDC) and followed up with a subsequentcommunication for correcting technical breach in the notice of termination. The Managementhas elaborated the sequence and its action relating to the project in the said note andhas asserted that in the event of termination the termination payments would be adequateto recover the exposure to the project by the Group. The management has made a claim of112337 lacs as termination payments from APRDC. One of the Lenders has filed forCorporate Insolvency resolution proceeding against the SPV before the Hon'ble NationalCompany Law Tribunal (NCLT). Total Exposure of the Company is 108696.56 lacs. In theabsence of any confirmation of the termination amount from APRDC the NCLT hearingdecision of the OTS by the lenders and other matters as aforesaid we are unable tocomment on the possible impairment required against the exposure of the Company.

b) Attention is invited to Note 28(b) to the Standalone Ind AS Financial Statementsrelating to the project in the SPV Indira Containers Terminal Pvt Ltd. There existsmaterial uncertainty relating to the future of the project where the exposure of thecompany in the SPV/project is 13488.27 lacs (funded and non-funded). The draft settlementagreement between the SPV Ministry of Shipping (MoS) Mumbai Port Trust (MbPT) has beenrejected by MbPT. The Company and the SPV are in discussion with MbPT and MoS toreconsider the project. The credit facility are marked as NPA by the lenders. Pendingconclusion of matters of material uncertainty related to the project and decision of theOTS by the lenders being in preliminary stage we are unable to comment whether anyprovision is required towards possible impairment towards the said exposure.

c) Attention is invited to Note no. 29 to the Standalone Ind AS Financial Statementswhere the Company has defaulted in fulfilling its obligation under the one time settlement(OTS) with IFCI Limited. The Company was required to pay the entire outstanding bySeptember 30 2017. The Company has been unable to discharge the liability and has notbeen able to get further extension for the payment of the outstanding although it isactively engaged with IFCI Limited for obtaining the extension and/or non-reversal of thebenefits of the OTS. In terms of the original arrangement the benefits received under theone-time settlement were to be reversed. Although the management is hopeful of obtainingthe extension and / or non-reversal of the benefits of the OTS pending the acceptance byIFCI Limited we are unable to state whether the Company has to account for the reversal ofbenefits of Rs. 4884.10 lacs in its financial statements. The company has howeverprovided interest at the rate of 11.50% p.a. as per the agreement. The interest payable onthe outstanding amount before reversal of the aforesaid benefit as on balance sheet dateis 1320.38 lacs.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our Qualified Opinion.

Material Uncertainty relating to Going Concern.

We invite attention to Note 28 of the Standalone Ind AS Financial Statements for theyear ended March 31 2019 wherein status of various SPV projects which are stressed dueto delay in completion cost overrun liquidity crunch and have legal issues arbitrationproceedings or negotiations. The successful progress and completion depend on favourabledecisions on outstanding litigations being received by the Management. We also inviteattention to Note 31 of the Standalone Ind AS Financial Statements where the Company hasstated that as of March 31 2019 the Company's current liabilities exceeded current assetsby Rs. 39211.70 lacs. There is a continuing mismatch including defaults in payment of itsfinancial obligations to its subsidiary Company. These conditions along with the fact ofthe Auditors' Report of some of the SPV carrying a separate paragraph on MaterialUncertainty related to Going Concern referred to in Note 31 of the Standalone Ind ASFinancial Statements indicate the existence of Material Uncertainty which may impact theCompany's ability to continue as a going concern. Our report is not qualified on thismatter.

Further without qualifying their opinion the Auditors have emphasized the followingmatters:

a) Attention is invited to Note 28 (c) of the Statement relating to slow progress ofwork for one of the road project at Madhya Pradesh. These delays have resulted in increasein project cost resulting in cost overrun in the project. The SPV has also received thecure period notice from MPRDC in terms of defaults under the Concession Agreement fordelay no-project work and maintenance work being carried out at site and to clear thedefaults against which the company has submitted their response. The credit facility ofthe SPV has been marked as NPA by the lenders. Total exposure of the Company is theSPV/Project is Rs. 74578.94 lacs. The Management believes that the traffic initiallyassessed would be the same and would cover the exposure consequent to the cost overrun. Wehave relied on the management assertion on this matter. The management also believes thatthe project would achieve PCOD in a short time.

b) We invite attention to Note 28 (d) of the Standalone Ind AS Financial Statements anannuity project of the Company where the SPV has accounted for the asset as a financialasset. The SPV will have cost overrun on account of issue beyond the scope of the SPV andattributable to the Grantor. This will not result in any changes in the Annuity from thegrantor. However this amount would be treated separately as receivable from the Grantorbased on certification of delay period attributable to the Grantor certified by theIndependent Engineer. The SPV expects a sizeable claim on this amount and has obtainedlegal support for the validity of its claim from an Independent Expert on claim andlitigation. The management contends that in view of the strong case it has on the claimmatter as aforesaid there will be no impairment necessary towards the financial asset ortowards the investment of the Company. The SPV has submitted a One-Time Settlement (OTS)proposal to the consortium of Lenders and the same is under consideration of the Lendersexcept 2 (two) of the consortium lenders who have granted their approval for the proposal.These 2 (two) consortium lenders have assigned their share of debt to an AssetReconstruction Company (ARC). The exposure of the Company in the SPV is Rs. 130052.41lacs including non-fund exposure. Pending conclusions no adjustments have been made in thefinancial statements.

c) We invite attention to Note 28 (e) of the Standalone Ind AS Financial Statementsregarding unilateral termination and closure of Concessions in a bridge project which issubject to pending litigations/arbitrations at various forums which may impact thecarrying values of investments and loans and advances given to the subsidiary. TheCompany's exposure towards the said project (funded and non-funded) is Rs. 2389.34 lacs.Pending conclusion on these legal matters no adjustments have been made in the financialstatements.

d) We invite attention to Note 28(f) of the Standalone Ind AS Financial Statements inrelation to intention to exit one of the hydro power projects at Himachal Pradesh andseeking a claim of an amount against the amount spent on the project. The Company'ssubsidiary has cited reasons for non-continuance on account of reasons beyond its control.The subsidiary is negotiating with its client for an amicable settlement on beneficialterms and has also invoked arbitration. The SPV has received a letter from GoHP datedSeptember 4 2018 intimating that their office has begun the process for finalisation ofthe panel of Arbitrators and the nomination in this regard shall be intimated to the SPVshortly. The Company's exposure towards the said project includes investment and loans andadvances of Rs. 7126.01 lacs. Pending conclusion between the parties no adjustments havebeen made in the financial statements.

e) We invite attention to Note no 28(g) of the Standalone Ind AS Financial Statementsrelating to the Hydropower project in Sikkim. As detailed in the note there are variousfactors affecting the progress of the project. The management as detailed in the note isconfident that it will be able to pursue the project viably and does not foresee any needfor impairment. Considering the assertion of the management no adjustments have been madetowards any possible impairment. The exposure of the Company in the SPV is Rs. 9428.08lacs.

f) We invite attention to Note no 30 of the Standalone Ind AS Financial Statementswherein during the previous year Western Coalfields Limited (WCF) had encashed BankGuarantee amounting 1514.01 lacs given in favour of Aparna Infraenergy India PrivateLimited (one of the SPV's sold to BIF India Holding Pte ltd on February 29 2016).Subsequent to encashment Company has fled an application for converting earlier injunctionapplication to suit for recovery of damages. The management is hopeful of gettingfavourable decision on the matter and recovery of damages based on legal advice on thematter. Pending the outcome the Company has shown guarantee encashment amount asreceivable from Western Coal Fields.

It is clarified that the above matters covered in the Auditors' Report together withrelevant notes in the Notes to Accounts are self-explanatory.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. Veeraraghavan N.Practicing Company Secretary (Certificate of Practice Number: 4334) was appointed toundertake the Secretarial Audit of the Company.

In terms of provisions of section 204 of the Companies Act 2013 the Secretarial AuditReport has been annexed to this Board Report as Annexure IV.

Observations made by the Secretarial Auditor in their Report are self-explanatory anddo not need further clarification.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to this Report as Annexure V. In terms ofthe provisions of Section 197(12) of the Act read with sub-rules (2) and (3) of Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of employees drawing remuneration inexcess of the limits set out in the said Rules are provided in the Report. However havingregard to the provisions of the second proviso to Section 136(1) of the Act the detailsare excluded in the report sent to members. The required information is available forinspection at the registered office and the same shall be furnished on request.

INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Board has re-constituted Internal Complaints Committee under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013with effect from February 14 2019. During the Financial Year no complaint was filedbefore the said Committee. Internal Complaints Committee comprises of Ms. Hilda ButhelloMs. Poonam Sabnis Mr. Naresh P Sasanwar and CA / CS Sunil Dedhia Practicing CompanySecretary as its members with Ms. Hilda Buthello as Chairperson of the Committee.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There were no material changes and commitments after the closure of the year till thedate of this report which affect the financial position of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS / TRIBUNALS

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company's operations in future.

ACKNOWLEDGEMENTS

The Board wishes to place on record their appreciation for the support received by theCompany from its shareholders and employees. The Directors also wish to acknowledge theco-operation and assistance received by the Company from its business partners bankersfinancial institutions and various Governments Semi Government and Local Authorities.

For and on behalf of the Board of Gammon Infrastructure Projects Limited
Homai Daruwalla Kishore Kumar Mohanty
Director Managing Director
DIN:00365880 DIN:00080498
Place: Mumbai
Date: 31st August 2019

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