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Ashoka Buildcon Ltd.

BSE: 533271 Sector: Engineering
NSE: ASHOKA ISIN Code: INE442H01029
BSE 00:00 | 18 Sep 71.85 1.65
(2.35%)
OPEN

70.60

HIGH

72.40

LOW

69.75

NSE 00:00 | 18 Sep 71.90 1.70
(2.42%)
OPEN

70.50

HIGH

72.45

LOW

69.50

OPEN 70.60
PREVIOUS CLOSE 70.20
VOLUME 49008
52-Week high 127.90
52-Week low 37.00
P/E 5.15
Mkt Cap.(Rs cr) 2,017
Buy Price 71.70
Buy Qty 300.00
Sell Price 71.85
Sell Qty 2.00
OPEN 70.60
CLOSE 70.20
VOLUME 49008
52-Week high 127.90
52-Week low 37.00
P/E 5.15
Mkt Cap.(Rs cr) 2,017
Buy Price 71.70
Buy Qty 300.00
Sell Price 71.85
Sell Qty 2.00

Ashoka Buildcon Ltd. (ASHOKA) - Director Report

Company director report

Dear Members

Ashoka Buildcon Limited

Your Directors have pleasure in presenting the 27th Annual Report (“theReport / this Report”) along with audited financial statements of your Company forthe financial year ended March 31 2020.

Financial Results

The financial performance of your Company for the year ended March 31 2020 issummarized below:

(Rs. in Lakh except EPS)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Total Receipts / Gross Sales and Operating Income 408236.36 393634.05 515221.03 500722.54
Profit Before Depreciation Tax and Exceptional Items 64511.57 54018.94 62601.79 44898.83
Depreciation and Amortisation Expenses 11112.77 7627.13 29978.26 25823.28
Profit/(Loss) Before Tax & Exceptional Items 53398.80 46391.81 32623.53 19075.55
Provision for Taxation 14684.56 13073.18 16587.69 17090.68
Profit/(Loss) after tax 38714.24 28616.29 16035.84 (4028.47)
Share of Profit/ (Loss) of subsidiaries transferred to Noncontrolling Interest * N. A. N. A. (495.66) (682.45)
Total Comprehensive Income (post Noncontrolling interest) 38691.44 28574.62 16337.29 (3407.59)
Balance carried to Balance sheet Earnings per Equity Share (EPS) 38714.24 28616.29 16531.50 (3346.02)
Basic (face value Rs.5/- each) 13.79 10.19 5.89 (1.19)
Diluted (face value Rs.5/- each) 13.79 10.19 5.89 (1.19)

* Applicable only in case of consolidated financial statements.

Performance of the Company during FY 2019-20 Projects update:

During the year under review the Company has won Road Project on HAM basis worthRs.2035.50 Crore and Road Projects on EPC basis worth of Rs.1079.52 Crore as detailedbelow. The Company also received Project in Smart Infrastructure/City Segment worthRs.313.72 Crore as given in below table.

Name of the Project Authority Project Cost (Rs. Crore)
Conducting Survey Supply of Poles & Installation laying of the overhead and underground Optic Fiber Cable on existing Electricity Poles Supply Installation Testing and Commissioning of Non-IT items SRIT India Private Limited / Kerala State Information Technology Infrastructure Limited 313.72
Development of Bundelkhand Expressway Project (“Package-III”): From Kaohari (Dist. Mahoba) to BaroliKharka (Dist. Hamirpur) (Km 100+000 to Km 149+000) in the State of Uttar Pradesh on EPC Basis Uttar Pradesh Expressways Industrial Development Authority 1079.52
Four laning of NH-161 from Kandi (Design Km 0.000) (Km 498.250 of NH-65) to Ramsanpalle (Design Km 39.980/Existing Km 44.757) (Design Length = 39.980 Km) in the State of Telangana under Bharatmala Pariyojna on Hybrid Annuity Mode National Highways Authority of India 1000.00
Four Laning of Tumkur- Shivamogga section from Km 119+790 (Design Km 121+900) to Km 166+100 (Design Km170+415) Banwara to Bettadahalli section of NH-206 in the State of Karnataka on Hybrid Annuity Mode under Bharatmala Priyojana (Package - III) National Highways Authority of India 1035.50

The Company received extension of concession period / toll collection period for thefollowing project:

Project Name Particulars
Construction of Katni Bypass on NH-7 from Km 361/2 to 378/6 around Katni Town in Madhya Pradesh India on BOT Basis Hon'ble High Court had granted an additional concession period of Twenty Four days from 23.02.2020 to 18.03.2020
By Hon'ble High court order dated Toll collection period has been extended for next 29 Months i.e. From 18.03.2020 to next 29 months i.e. 17.08.2022.
The above matter is in Hon'ble High Court Madhya Pradesh and is sub judice.

Your Company has received appointed dates for its HAM Based Projects viz. BelgaumKhanapur Road Mallasandra Karadi Road and Karadi Banwara Road awarded by NHAI.

The Company has received provisional completion certificate issued by the Authority'sEngineer dated 10.11.2019 for Madhugiri - Mulbagal Road Project.

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

Awards and Recognitions received by the Company during the year:

Particulars name of the Award / Recognition
Construction Week India Awards Project of The Year Award to Ashoka Buildcon Limited's Eastern Peripheral Expressway (Package IV)
Construction Week India Awards Road Contractor of The Year Award to Ashoka Buildcon Limited
Construction Week India Awards Infra Person of The Year Award to Satish Parakh Managing Director
Ministry of Road Transport & Highways (MoRT&H) - National Highways Excellence Awards Champion Award for Excellence inTollManagement to Ashoka Buildcon Limited's Hirebagewadi Toll Plaza
Ministry of Road Transport & Highways (MoRT&H) - National Highways Excellence Awards Champion Award for Excellence in Highway Safety to Ashoka Buildcon Limited's Belgaum Dharwad Road Project
CIA Infra Awards Best Safety Practices Award to Ashoka Buildcon Limited
Fire & Safety Association's Safe Tech National Award 2019 Best Safety Practices Award to Ashoka Buildcon Limited
Fire & Safety Association's Safe Tech National Award 2019 Safety Hero Award to Ashoka Buildcon Limited

Future outlook

The global economy is witnessing challenges arising due to Covid-19 Pandemic and theRoad Infrastructure sector is not isolated. The Pandemic and the ensuing lockdown hasadversely impacted the sector primarily attributable to the halting of constructionactivities across the country lack of availability of labour stoppage of tollcollection amongst others.

The government has announced various measures to protect/ safeguard liquiditycompensate contractors for the losses experienced during lockdown and provide additionalloans for a smooth resumption of operations.

The Union Minister for Road Transport & Highways and MSMEs in his communicationdated April 07 2020 has set a target of constructing roads worth Rs.15 lakh Crore in thenext two years.

We expect many opportunities in the near and long term for the infrastructure sector inIndia. The government's ambitious infrastructure development programmes providesignificant opportunities to boost economic development in the sector in coming years.

With relaxation in the lockdown restrictions the construction activity has resumed atmajor projects sites by following the social-distancing norms and other health and hygienemeasures. The operations are ramping up gradually across the sector. The economic activityhas started to pick-up pace with toll collections also beginning to limp back to normalcy.

Toll revenues have gradually revived to reach over 70-75% pre- covid levels led byimproving commercial traffic even when many cities or state sections are not allowingtraffic movement freely and expect to reach pre-COVID collections in the coming months.

Our order book - which is Rs.8981 Crore ensuring strong visibility for the EPCsegment for foreseeable future. We are well confident and also geared up to win BOT / HAMprojects in the upcoming bids which will ensure a steady growth in execution as well asour revenues in the long term.

We will continue to strive and remain focused on creating more value for all byventuring into new areas of infrastructure.

Share Capital

The paid-up share capital as at March 31 2020 stood at Rs.140.36 Crore. During theyear under review there is no change in the paid-up share capital of the Company. Duringthe year under review the Company has not issued any shares with differential votingrights or by way of rights issue or Sweat Equity shares or shares under ESOP. Further ithas not provided any money to its employees for purchase of its own shares hence theCompany has nothing to report in respect of Rule 4(4) Rule 12(9) and Rule 16 of theCompanies (Share Capital & Debentures) Rules 2014.

Debentures

Your Company had during FY 2018-19 allotted 1500 rated listed unsecured 9.80%non-convertible debentures of Rs.10 Lakh each aggregating Rs.150 Crore for the tenure of 2years 4 months and 4 days i.e. up to April 30 2021. The Debentures were allotted to ICICIPrudential Ultra Short Term Fund on private placement basis and had been listed on BSELtd. in WholeSale Debt Market Segment. During the year under review the Company hasredeemed in full the NCDs worth Rs.150 Crore in March 2020.

Dividend

The Board of Directors has not recommended a dividend this year. The amount of profitshas been retained for future requirement of the Company for investment in capital ofSubsidiaries / Project SPVs.

Credit Rating of Company

CRISIL Limited has affirmed:

• CRISIL AA-/Stable to Long term rating

• CRISIL A1to short term rating

Transfer to Reserves

No amount has been transferred to the General Reserve during the year.

Public Deposits

During the financial year 2019-20 your Company had not accepted any deposit within themeaning of the provisions of Section 73 of the Companies Act 2013 (“the Act”)read with the Companies (Acceptance of Deposits) Rules 2014.

Capital Expenditure

As at March 31 2020 the Gross Fixed Assets & Intangible Assets stood at Rs.788.92Crore which include CWIP and Right of use of assets and net fixed assets and netintangible assets at Rs.358.57 Crore. Additions during year amounted to Rs.62.71 Crore.

Audit Committee

The Audit Committee of the Board of Directors of the Company is duly constituted inaccordance with the provisions of Section 177 ofthe Act read with Rule 6 and 7 oftheCompanies (Meetings of the Board and its Powers) Rules 2014 and Regulation 18 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 (“LODR2015”). The composition of the Audit Committee as on March 31 2020 is as follows:

name Designation
1 Albert Tauro Chairman (Independent Director)
2 Sunanda Dandekar Member (Independent Director)
3 Milap Raj Bhansali Member (Executive Director)
4 Sharadchandra Abhyankar Member (Independent Director)

All the recommendations of the Audit Committee during the year were accepted by theBoard of Directors of the Company. For further details please refer to the CorporateGovernance Report forming part of the Report.

Vigil Mechanism:

Your Company is committed to the highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has established a vigil mechanism by adoptinga Whistle Blower Policy in compliance with the provisions of Section 177(9) and (10) ofthe Act and Regulation 22 of the LODR 2015. The Company has adopted a vigil mechanism todeal with genuine concerns of the employees and Directors. All employees and directors aremade aware of the mechanism. The Company has established a system to ensure effectivefunctioning of the mechanism.

The administration of the vigil mechanism is ensured through the Audit Committee. TheCompany's Vigil Mechanism / Whistle Blower Policy has been amended by the Board ofDirectors and the same is hosted on the website of the Company at www.ashokabuildcon.com

Policies / Codes of the Company:

The policies / Codes / hosted on the website of the Company at www.ashokabuildcon.comare given in Corporate Governance Report forming part of this report.

Subsidiaries

In accordance with Section 129 (3) of the Act and as per Indian Accounting Standards(Ind AS) 110 the Company has prepared the Consolidated Financial Statements of theCompany and all its subsidiaries and associates which form part of the Report.

The salient features of financial statements of Subsidiary / Associates / JointVentures as per the Act are given in prescribed Form AOC-1 as Annexure I to theBoard's Report.

During the year under review:

• The name of Ashoka Cuttack Angul Tollway Limited a wholly owned subsidiary hasbeen struck off by the Registrar of Companies New Delhi from the register of companiesand the said Company is voluntarily wound up w.e.f. December 04 2019.

• The Company acquired 16016100 equity shares of Rs. 10/- each fully paid ofAshoka GVR Mudhol Nipani Roads Limited. The remaining 600 shares are held by GVR InfraProjects Limited.

• The number of equity shares of the Company in Unison Enviro Private Limited(UEPL) increased to 51728586 shares retaining 51% stake in UEPL and balance 49% stakeheld by North Haven India Infrastructure Fund.

• The Company has won 2 projects on Hybrid Annuity Mode Basis and as per NHAIguidelines the Company has incorporated the following Companies as its wholly ownedsubsidiaries as Special Purpose Vehicles for execution of the Projects viz.:

• Ashoka Kandi Ramsanpalle Road Private Limited and

• Ashoka Banwara Bettadahalli Road Private Limited

• The Company has also incorporated one more subsidiary viz. Ashoka PurestudyTechnologies Private Limited wherein the Company holds 51% stake in equity share capitalof the subsidiary.

In accordance with the 4th proviso of Section 136(1) of the Act the AnnualReport of the Company containing therein its standalone and the consolidated financialstatements has been placed on the website of the Company www.ashokabuildcon. com.Further as per the 5th proviso of the said section audited annual accounts ofeach of the subsidiary companies have also been placed on the website of the Company www.ashokabuildcon.com. Shareholders interested in obtaining a copy of the audited annualaccounts of the subsidiary companies may write to the Company Secretary at the Company'sregistered office address.

Disclosure relating to remuneration of Directors Key Managerial Personnel andparticulars of employees

In accordance with Section 178 and other applicable provisions of the Act read with theRule 6 of the Companies (Meeting of Boards and its Powers) Rules 2014 issued thereunderand Regulation 19 of the LODR 2015 the Board of Directors at their meeting held on 30thSeptember 2014 formulated the

Remuneration Policy of your Company on the recommendations of the Nomination andRemuneration Committee. The salient aspects covered in the Remuneration Policy coveringthe policy on appointment and remuneration of Directors and other matters have beenoutlined in the Corporate Governance Report which forms part of the Report.

The Managing Director and Whole-time Directors of your Company do not receiveremuneration from any of the subsidiaries of your Company. The information required underSection 197 of the Act read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of Directors/employees of your Company is set out in AnnexureIII to the Board's Report.

The Remuneration Policy of the Company is available on the website of the Companywww.ashokabuildcon.com.

Directors and Key Managerial Personnel

In compliance with the provisions of Sections 149 152 Schedule IV and otherapplicable provisions of the Act read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 Sunanda Dandekar (DIN:07144108) had been appointed as anIndependent Director on the Board of Directors of your Company to hold office for thesecond term of five (5) consecutive years from March 30 2020 to March 29 2025 with theperiod of office not liable to be determined by retirement of Directors by rotation.

Michael Pinto (DIN:00021565) retired as a Director of the Company w.e.f. April 012019 on account of not seeking appointment for the second term.

Sanjay Londhe (DIN:00112604) and Milap Raj Bhansali (DIN:00181897) are liable to retireby rotation at the ensuing AGM pursuant to section 152(6)(c) of the Act read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of the Company and being eligible have offered themselves for re-appointment.

Ashok Katariya (DIN: 00112240) has been re-appointed as the Whole-time Director to bedesignated as the Chairman for a period of 2 years from April 01 2020. Further as perSection 196 and Schedule V of the Act the approval of the members has been obtained vide aspecial resolution for continuation of his office as a Whole-time Director to bedesignated as the Chairman upon attaining the age of 70 (seventy) years.

Satish Parakh (DIN: 00112324) and Sanjay Londhe (DIN: 00112604) have been re-appointedas Managing Director and Whole-time Director respectively for a period of 5 years fromApril 01 2020.

Their appointments have been approved by the Members of the Company by way of PostalBallot the results of which were declared on June 11 2020.

Satish Parakh Managing Director Paresh Mehta Chief Financial Officer and ManojKulkarni Company Secretary have been recognized as the Whole-time Key ManagerialPersonnel of your Company in accordance with the provisions of sections 2(51) and 203 ofthe Act read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

None of the Key Managerial Personnel has resigned during the year under review.

The Board of Directors at its meeting held on 23rd March 2020 approved theappointment of Ashish Kataria (DIN: 00580763) (Non-Executive / Non-Independent ) andMahendra Mehta (DIN: 07745442) (Non-Executive / Independent Director) as AdditionalDirectors with effect from 1st April 2020 and subsequently the Members of theCompany vide resolutions on 11th June 2020 passed through Postal Ballot haveapproved the appointment of Mr. Ashish Kataria as a Non-Executive Director liable toretire by rotation and appointment of Mr. Mahendra Mehta as an Independent Director forthe first term of 5 consecutive years to hold the office of the Director not liable toretire by rotation effective from April 01 2020.

The Independent Directors of your Company have confirmed that (a) they meet thecriteria of Independence as prescribed under Section 149 of the Act and Regulation 16 ofthe Listing Regulations 2015; and (b) they are not aware of any circumstance or situationwhich could impair or impact their ability to discharge duties with an objectiveindependent judgment and without any external influence.

The Ministry of Corporate Affairs with the objective of strengthening the institutionof Independent Directors has launched the Independent Directors Databank on 1st December2019 in accordance with the provisions of the Companies Act 2013 by notification ofCompanies (Creation and Maintenance of databank of Independent Directors) Rules 2019.This is to confirm that all the Independent Directors have registered themselves pursuantto said Notification.

Further in the opinion of the Board the Independent Directors fulfill the conditionsprescribed under the Listing Regulations 2015 and are independent of the management of theCompany.

The Board states that the Independent Directors appointed during the year are person ofintegrity and have adequate experience to serve as an Independent Director of the Company.

Annual evaluation of Board's performance

In terms of the provisions of the Act read with Rules issued thereunder and the LODR2015 the Board of Directors had carried out the annual performance evaluation of theentire Board Committees and all the Directors based on the criteria laid down by theNomination and Remuneration Committee. The criteria for evaluation of the Boardperformance have been mentioned in the Corporate Governance Report.

Number of meetings of the Board

The details of the number of Board meetings of your Company are set out in theCorporate Governance Report which forms part of the Report.

In terms of requirements of Schedule IV of the Act a separate meeting of IndependentDirectors for FY 2019-20 could not be held due to unprecedented situation arose in themonth of March 2020 due to COVID-19 Pandemic. However a telephonic discussion was heldamong all the Independent Directors to review the performance of Non-independent Directors(including the Chairman) the entire Board and quality quantity and timelines of the flowof information between the Management and the Board and Corporate Governance. Thesuggestions on corporate governance were given to the Board of Directors.

Directors' Responsibility statement

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statements pursuant to Section134(3)(c) read with section 134 (5) of the Act and confirm that

• In the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

• The Directors have approved the accounting policies and the same have beenapplied consistently and have made judgment and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at March 312020 and of the profit of the Company for the year ended on that date;

• Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

• The annual accounts have been prepared on a ‘going concern' basis;

• Proper internal financial controls are followed by the Company and that suchfinancial controls are adequate and are operating effectively; and

• Proper systems to ensure compliance with the provisions of all applicable lawsare in place and such systems are adequate and operating effectively.

Auditors and Auditors' Reports Statutory Auditors

The Shareholders of the Company pursuant to the provisions of Section 139 of the Actand the Companies (Audit and Auditors) Rules 2014 have appointed M/s. S R B C & COLLP Chartered Accountants Mumbai (Firm Registration No. 324982E/E300003) as theStatutory Auditors to hold office till the conclusion of the 29th Annual General Meeting(‘AGM') of the Company to be held for FY 2021-22. They have confirmed that they arenot disqualified from continuing as Auditors of the Company.

The Auditors' Reports on Standalone Financial Statements (SFS) and ConsolidatedFinancial Statements (CFS) for the financial year 2019-20 do not contain anyqualification reservation or adverse remark except the following:

Remark:

• According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the company except for title deed in case of two buildings (Gross Block ofRs.151.64 Lakhs Net Block Rs.123.51 Lakhs) for which transfer deed is yet to be executedin the name of the Company.

Reply:

• The one Building has been constructed on the freehold land which was purchasedfrom APMC Pune. the transfer of the said building to the Company is pending subject toapproval of the APMC Pune since there is long pending litigation among the APMC Membersthe NOC/approval is pending. the Company fully possesses the said Building. All thedocuments for registration in the name of the Company have already been submitted to theconcerned authorities and regular follow-up is being made.

• Another building at Hilla Heights Mumbai necessary documentation to close thetransaction appropriately is being organized.

There have been no instances of fraud reported by the Statutory Auditors under Section143 (12) of the Companies Act 2013 and the Rules framed thereunder either to the Companyor to the Central Government.

Cost Auditors

As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is required tomaintain cost records and get the cost records audited.

As per Section 148 and other applicable provisions of the Act read with Companies(Audit and Auditors) Rules 2014 the Board of Directors of your Company appointed M/s. CY& Associates Cost Accountants (Firm Registration No. 000334) as the Cost Auditorsfor the financial year 2020-21 on the recommendations made by the Audit Committee toconduct the audit of cost records of the Construction segment of the Company.

The remuneration proposed to be paid to the Cost Auditors subject to the ratificationby the members at the ensuing AGM would not exceed Rs.540000/- (Rupees Five Lakh FortyThousand only) plus applicable taxes and reimbursement of out of pocket expenses.

The consent has been received from M/s. CY & Associates Cost Accountants to actas the Cost Auditors of your Company for the financial year 2020-21 along with acertificate confirming their independence. Further pursuant to the provisions of the Actthe remuneration payable to the Cost Auditors is required to be placed before the Membersin a general meeting for their ratification. Accordingly a Resolution seeking Members'ratification for the remuneration payable to M/s CY & Associates Cost Accountants isincluded in the Notice convening the 27th Annual General Meeting.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hadappointed M/s. S. Anantha & Ved LLP (LLPIN: AAH8229) Practising Company Secretaries toconduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexedherewith as Annexure - IV to the Board's Report.

There are no observations / remarks or qualifications in the Secretarial Audit Reportfor FY2019-20 except the following:

• Remark: Delay in filing of E-forms with the Ministry of Corporate Affairs infew instances in respect of which the Company paid the additional fee and complied withthe requirement.

• Reply: There was delay in filing few e-forms due to circumstances beyondcontrol. However such forms were filed with additional filing fees as prescribed under theAct and compliance has been regularized. The necessary steps have been taken to avoiddelay in filing of e-forms with MCA in future.

• Remark: The Company had received an e-mail from National Stock Exchange ofIndia Limited (NSE) on 04th July 2019; intimating that as per Regulation 44 of SEBI(Listing Obligations and Disclosure Requirements)

Regulations 2015 the listed entity shall submit to the stock exchange within 48hours of conclusion of its General Meeting details regarding the voting results in theformat specified by SEBI. However the Company has submitted the voting results of thePostal Ballot concluded on 01st July 2019 after 48 hours of conclusion.

• Reply: In this connection the Company had submitted the reply on 6thJuly 2019 to NSE clarifying the reasons for the delay in submission of postal ballotresult which were beyond the control of the Company. Due to heavy rains in MumbaiGovernment of Maharashtra declared a holiday and the process of compiling data got delayeddue to this unexpected interruption. This had resulted in slight delay in submission toNSE. NSE has not further communicated to the Company in this regard.

Reconciliation of share capital audit:

As directed by the Securities and Exchange Board of India (SEBI) Reconciliation ofShare Capital Audit has been carried out at the specified period by a Practising CompanySecretary.

Internal Auditors

M/s. Patil Hiran Jajoo Chartered Accountants and M/s Suresh Surana & Co. LLP hadbeen appointed as Internal Auditors of the Company for FY2019-20 and the reports of theInternal Auditors are reviewed by the Audit Committee from time to time. The observationsand suggestions of the Internal Auditors are reviewed and necessary corrective/preventiveactions are taken in consultation with the Audit Committee.

The Company has appointed M/s. Patil Hiran Jajoo Chartered Accountants Nashik and M/sSuresh Surana & Co. LLP Mumbai as Joint Internal Auditors for FY 2020-21.

Audits and internal checks and balances

M/s S R B C & CO. LLP Chartered Accountants audit the accounts of the Company.

The Company has independent internal auditors who review internal controls andoperating systems and procedures. A dedicated Legal Compliance ensures that the Companyconducts its businesses with legal statutory and regulatory compliances. The Company hasinstituted a legal compliance programme in conformity with requirements of the Act toensure that there exists a system which is adequate and operates effectively andefficiently. This system covers various statutes such as industrial and labour lawstaxation laws corporate and securities laws and health safety and environmentregulations.

Adequacy of Internal Financial Controls with reference to the financial statements:

The Companies Act 2013 re-emphasizes the need for an effective

Internal Financial Control System (IFC) in the Company which should be adequate andshall operate effectively. The Company has an Internal Control System including InternalFinancial Controls commensurate with the size scale and complexity of its operations asapproved by the Audit Committee and the Board. The Internal Financial Controls areadequate and working effectively. The scope and authority of the Internal Audit is laiddown by the Audit Committee and accordingly the Internal Audit Plan is approved.

To ensure effective Internal Financial Controls the Company has its own process drivenframework for the year ended 31st March 2020. The Company has appointed joint InternalAuditors. The Internal Auditors monitor and evaluate the adequacy of internal controlsystem in the Company its compliance with operating systems accounting procedures andpolicies at all locations of the Company. Based on the report of internal audit concerneddepartments undertake corrective action if any in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee. The Board is of the opinion that the Company has aprocess in place to continuously monitor the existing controls and identify gaps if anyand implement new and /or improved controls wherever the effect of such gaps would have amaterial effect on the Company's operation.

investor education and protection fund (IEPF):

The Company has transferred a sum of Rs.15486/- during the year under review to theInvestor Education and Protection Fund established by the Central Government (IEPF). Thesaid amount represents Unclaimed Dividend (interim) for the year 2012-2013 with theCompany for a period of 7 years from their respective due dates of payment.

transfer of shares to IEPF

As required under Section 124 of the Companies Act 2013 712 Equity shares in respectof which dividend has not been claimed by the members for Seven (7) consecutive yearshave been transferred by the Company to IEPF during the year under review. The details ofshares transferred have been uploaded on the website of IEPF as well as the Company.

Familiarisation Programme for Independent Directors

Pursuant to the requirement of Regulation 25(7) of the LODR 2015 the Company needs toformally arrange Induction or Familiarization Programme for Independent Directors tofamiliarize them with their role rights and responsibility as Directors the working ofthe Company nature of the industry in which the Company operates business model etc. Thedetails are mentioned in the Corporate Governance Report which is a part of the report.The Familiarisation Programme for

Independent Directors of the Company is hosted on the website of the Company atwww.ashokabuildcon.com

Declaration of independence

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of theCompanies Act 2013read with the Schedules and Rules issued thereunder as well asRegulation 16(1) (b) of Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force)

Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection appointment and remuneration of Directors and KMPs. TheRemuneration Policy is stated in the Corporate Governance Report and is also available onthe website of the Company at www.ashokabuildcon.com

Prevention of Insider Trading

The Company has also adopted a code of conduct for prevention of insider trading. Allthe Directors senior management employees and other employees who have access to theunpublished price sensitive information of the Company are governed by this code. Duringthe year under report there has been due compliance with the said code of conduct forprevention of insider trading based on the SEBI (Prohibition of Insider Trading)Regulations 2015. The Board of Directors has adopted the amended Code of Conduct pursuantto the SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018 which iseffective from 1st April 2019.

Insurance

The Company's plant property equipment and stocks are adequately insured againstmajor risks. The Company has appropriate liability insurance. The Company has also takenDirectors' and Officers' Liability Policy to provide coverage against the liabilitiesarising on them.

Disclosure on confirmation on the secretarial standards

Your Directors confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been duly complied with.

Related party transactions

All Related Party Transactions that were entered into during the financial year were incompliance with the requirement of the Act and the Rules framed thereunder and LODR 2015.All Related Party Transactions are placed before the Audit Committee the Board ofDirectors and Shareholders as the case may be for approval. During the financial year2019-20 your Company entered into transactions with related parties as defined underSection 2(76) of the Act read with the Companies (Specification of Definitions Details)Rules 2014 which were in the ordinary course of business and on arm's length basis andin accordance with the provisions of the Act Rules issued thereunder and Regulation 23 ofthe LODR 2015.

During the financial year 2019-20 there were no materially significant Related PartyTransactions entered into by the Company with Promoters Directors Key ManagerialPersonnel which may have a potential conflict with the interest of the Company at large.However the Company had entered into materially significant related party transactionwith Ashoka Bettadahalli Shivamogga Road Private Limited a step down subsidiary forrendering services on EPC basis for Rs.1049.40 Crore. The Company had also entered intomaterially significant transaction with Ashoka Kandi Ramsanpalle Road Private Limited andAshoka Banwara Bettadahalli Road Private Limited both wholly owned subsidiaries of theCompany aggregating Rs.1332 Crore during the year under review.

The details of the related party transactions are set out in Note No. 48 to thestandalone financial statements forming part of the Report.

The Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of theCompanies (Accounts) Rules 2014 in respect of disclosure of contracts/arrangements withrelated parties under section 188 is set out as Annexure II to the Board's Report.

Particulars of loans given investments made guarantee given and securities providedunder section 186 of the Act

The details of loans guarantees and investments under Section 186 of the Act read withthe Companies (Meetings of Board and its Powers) Rules 2014 are as follows:

a) Details of investments made by the Company in equity/ preference shares andcompulsorily convertible debentures as on March 31 2020 (including investments made inthe previous years) are mentioned in Note No. 4 to the standalone financial statements.

b) Details of loans given by the Company to its Subsidiaries and Joint Ventures as onMarch 31 2020 are mentioned in Note No. 39 to the standalone financial statements.

c) Outstanding Corporate Guarantees issued by the Company as on March 31 2020aggregating Rs.403.39 Crore. No New Corporate Guarantee was issued in the year underreview.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance with Section 92(3) of the Act read with the Companies (Management andAdministration) Rules 2014 are set out herewith as Annexure V to the Board's Report. TheAnnual Return is available at www.ashokabuildcon.com.

Corporate Social Responsibility

The Company continues to believe in operating and growing its business in a sociallyresponsible way. This belief forms the core of the CSR policy of the Company that drivesit to focus on holistic development of its host community and immediate social andenvironmental surroundings qualitatively. Hence in Accordance with the requirements ofSection 135 of the Act your Company has constituted a Corporate Social ResponsibilityCommittee (“CSR Committee”). The composition and terms of reference of the CSRCommittee are provided in Corporate Governance Report. The Company has framed CorporateSocial Responsibility policy which is available at www. ashokabuildcon.com.

The Company was required to spend Rs.6.10 Crore on CSR activities for FY 2019-20 and acumulative amount of Rs.2.18 Crore had remained unspent on CSR activities for previousyears. However the Company had spent Rs.8.34 Crore during FY 2019-20. The Company hasthus spent the entire amount required to be spent on CSR activities in FY2019-20 andunspent amount carried forward from previous years has also been fully spent in FY2019-20aggregating Rs.8.34 Crore thereby complying the provisions of Section 135 of the Act.

Annual Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 has been annexed as Annexure VI to the Board'sreport.

Policy on prevention of sexual harassment

The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and Rules framed there under the Company has implemented a policy on preventionprohibition and redressal of sexual harassment at the workplace. All women permanenttemporary trainees or contractual women staff including those of service providers iscovered under the policy. The Company has provided a safe and dignified work environmentfor employee which is free of discrimination. The objective of this policy is to provideprotection against sexual harassment of women at workplace and for redressal of any suchcomplaints of harassment.

An Internal Sexual Harassment Committee comprising management staff has been set up atoffice and Project locations which includes three women to redress complaints relating tosexual harassment. The Committee also includes an outside woman representative from anNGO. During the year under review no case was reported under the said policy.

Disclosure as per section 22 of sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 is given below.

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 read with the Rules thereunder it ishereby declared that the Company has not received any complaint of sexual harassmentduring the year under review. Further the Company conducts awareness programme at regularinterval of time.

Disclosure under section 134 (3) (l) of the Act

Except as disclosed elsewhere in the report there have been no material changes andcommitments which can affect the financial position of the Company between the end of thefinancial year of the Company and date of the report.

Conservation of energy technology absorption foreign exchange earnings and outgo

The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo as stipulated under section 134 of the Act read with the Companies(Accounts) Rules 2014 is as follows:

Conservation of energy

The Company does not have any manufacturing facility;

The other particulars required to be provided in terms of Section 134(3)(m) of the Actread with Rule 8 of the Companies (Accounts) Rules 2014 are not applicable.

Nevertheless during the period the Company continued its endeavor to conserve energythrough various modes. Energy conservation continues to be a focus area for the Company.Energy conservation measures are meticulously followed and conform to the higheststandards.

Particulars Remarks
I Steps taken or impact on conservation of energy In view of business activities of the Company no substantial steps are required to be taken for conservation of energy other than those actually implemented by the Company
II Steps taken by the Company for utilizing alternate source of energy In view of business activities of the Company no substantial steps are required to be taken for conservation of energy other than those actually implemented by the Company
III The capital investment on energy conservation equipment -

(B) Technology Absorption Adoption and Innovation Efforts made Benefits derivedImport of technology:

Particulars Remarks
i the efforts made towards technology absorption No specific efforts made other than in the ordinary course of execution of the Project
ii the benefits derived like product improvement cost reduction product development or import substitution N.A.
iii in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year N.A.
the details of technology imported N.A.
the year of import N.A.
Whether the technology fully absorbed N.A.
If not fully absorbed areas where absorption has not taken place reasons thereof N.A.
iv The expenditure on Research and Development Nil

details of foreign exchange earnings and expenses

There are no earnings in foreign currency during the year under review.

The expenses in foreign exchange are as follows:

Particulars Amount (Rs. in lakh)
Tender & Survey Fees 7.20
Travelling Expenses 28.22

Details on Internal Financial Controls

• The Company has in place adequate internal financial controls some of which areoutlined below.

• Your Company has adopted accounting policies which are in line with theAccounting Standards prescribed in the Companies (Indian Accounting Standards) Rules 2015that continue to apply under Section 133 and other applicable provisions of the Act to theextent applicable. These are in accordance with generally accepted accounting principlesin India including Indian Accounting Standards (IND AS). Changes in policies if any areapproved by the Audit Committee in consultation with the Auditors.

• The policies to ensure uniform accounting treatment are prescribed to thesubsidiaries of your Company. The accounts of the subsidiary companies are audited andcertified by the respective Auditors of the Subsidiaries for consolidation.

• Your Company has implemented new ERP (SAP) during the financial year 2018-19 andis being used regularly and effectively.

• The opportunity presented by the emergence of Digital Technologies is one of thekey strategic enablers to our sustainable growth. As a step towards processsimplification integration and speed we have implemented the SAP S4 - HANA platform.This has enabled the organisation with a single source for financial accounting costingand asset accounting through Integrated System under SAP S4/HANA architecture.

• The Management periodically reviews the financial performance of your Companyagainst the approved plans across various parameters and takes appropriate actionwherever necessary. Internal Auditors have been appointed who report on quarterly basis onthe processes and system of accounting of the Company. The observations if any of theInternal Auditors are resolved to their satisfaction and are implemented across all thesites. During the year the internal financial controls were reviewed and tested by areputed firm of Chartered Accountants who report on quarterly basis on the process andsystems of accounting and other operational processes of the Company. The main thrust ofinternal audit is to test and review controls appraisal of risks and business processesbesides benchmarking controls with best practices in the industry.

Particulars of Employees

The information required pursuant to Section 197 of Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company will be provided upon request. In terms of Section136 of Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the Members at the Registered Office of the Company duringbusiness hours on working days of the Company up to the date of the ensuing Annual GeneralMeeting. If any Member is interested in obtaining a copy thereof such Member may write tothe Company Secretary in this regard.

Management Discussion and Analysis

Management Discussion and Analysis is given in a separate section forming part of theReport.

Corporate Governance

The report on Corporate Governance as stipulated under the LODR 2015 forms an integralpart of the report and the requisite Certificate duly signed by the Practising CompanySecretary confirming compliance with the conditions of Corporate Governance is attached tothe report.

business responsibility report

As stipulated under the LODR 2015 the Business Responsibility report describing theinitiatives taken by the Company from environmental social and governance perspective isattached as part of the Report as Annexure IX to the Board's Report.

General

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend voting orotherwise.

• Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme;

• Receipt of any remuneration or commission by the Managing Director theWhole-time Directors of the Company from any of its subsidiaries.

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

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

• The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.

• Secretarial Standards are issued by the Institute of Company Secretaries ofIndia (ICSI) one of the premier professional bodies in India. The Company complies withthe Secretarial Standards.

Acknowledgement

Your Directors take this opportunity to thank various Government Authorities includingNational Highways Authority of India Ministry of Road Transport & Highways PublicWorks Departments Road Development Corporations of the various States Power DistributionCorporations of various States where we have operations Central and State Governments fortheir support continuous co-operation and guidance.

Your Directors also thank the Ministry of Corporate Affairs BSE Limited NationalStock Exchange of India Limited Regulatory Authorities Financial Institutions and BanksCredit Rating Agencies Shareholders Contractors vendors and business associates fortheir continuous support during the year and look forward for their support in future aswell.

The Directors would also like to place on record their appreciation for thecontribution and dedication of the employees of the Company at all levels to the Company'sgrowth.

For and on behalf of the Board of Directors
Sd/-
(ashok KATARIYA)
Place Nashik Chairman
Date June 15 2020 (DIN: 00112240)