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Madhav Infra Projects Ltd.

BSE: 539894 Sector: Infrastructure
NSE: N.A. ISIN Code: INE631R01018
BSE 05:30 | 01 Jan Madhav Infra Projects Ltd
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Madhav Infra Projects Ltd. (MADHAVINFRA) - Director Report

Company director report

To

The Members

Madhav Infra Projects Limited

Your Directors have pleasure in submitting their 24th Annual report on thebusiness and operations of the Company along with the Audited Balance Sheet and Profit& Loss Accounts for the year ended March 31 2017.

1. FINANCIAL HIGHLIGHTS

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

(Rs. in Crore) except per equity share data

Particulars Year Ended on

31.03.2017

Year ended on

31.03.2016

Year Ended on

31.03.2017

Year ended on

31.03.2016

Standalone Results

Consolidat ed Results
Net Sales/ Income from Operation 334.97 306.45 508.15 358.87
Other Income 3.37 2.30 3.67 2.45
Total Income 338.34 308.76 511.82 361.32
Profit before interest Depreciation & Tax 77.34 41.31 123.68 82.87
Less Interest (Financial Cost) 33.96 18.14 55.62 39.51
Depreciation 34.06 9.37 54.63 28.71
Profit Before Tax 9.32 13.80 13.43 14.65
Less Previous years Adjustments (0.59) 1.94 0.23 1.93
Provision for Wealth Tax - - - -
Provision for Current year Income Tax 2.25 2.76 2.32 2.94
Net Profit after tax 7.66 9.10 10.88 9.78
Add: Balance carried from Profit & Loss A/c - - - -
Less: Provision for earlier year taxation - - - -
Minority Interest - - 0.24 0.01
Net Profit after tax and adjustments 7.66 9.10 10.64 9.77
Dividends: Interim Dividend - - - -
Dividends: Final Dividend (Proposed) - - - -
Transferred to general Reserve 7.66 9.10 10.64 9.77
Balance carried to the balance sheet
EPS (Basic) 11.97 14.20 16.61 15.27
EPS (Diluted) 11.97 14.20 16.61 15.27

2. OPERATION AND PERFORMANCE REVIEW

Standalone Results

The Company recorded revenues of Rs. 338.34 Crore in the year under review as againstRs. 308.76 Crore in the previous year. The Company took several initiatives during thelast financial year such as strengthening its presence across the present operatingareas capitalize on new opportunities that helped in achieving and consolidating growth.The growth in revenues was 9.58% on y-o-y basis. The EBIDTA for the year was Rs. 77.34Crore as compared to Rs. 41.31 Crore in the previous year. The Profit after tax was Rs.7.66 crore against Rs. 9.10 Crore for the previous year. The Company's net worth touchedRs. 116.30 Crore as on March 31 2017 from Rs. 98.64 Crore as on March 31 2016.

Consolidated Results

The Company recorded revenues of Rs. 511.82 Crore in the year under review as againstRs. 361.32 Crore in the previous year. The Company took several initiatives during thelast financial year such as strengthening its presence across the present operatingareas capitalize on new opportunities that helped in achieving and consolidating growth.The growth in revenues was 41.65% on y-o-y basis. The EBIDTA for the year was Rs. 123.68Crore as compared to Rs. 82.87 Crore in the previous year. The Profit after tax was Rs.10.64 crore against Rs. 9.77 Crore for the previous year. The Company's consolidated networth touched Rs. 120.68 Crore as on March 31 2017 from Rs. 100.11 Crore as on March 312016.

In accordance with the Accounting standard AS - 21 on Consolidated FinancialStatements the audited Consolidated Financial statements are also provided along withStandalone Financial Statement in the Annual report.

3. DIVIDEND

Your Directors feel that it is prudent to plough back the profits for future growth ofthe Company and do not recommend any dividend for the year ended March 31 2017.

The Company issued 1% Non - Cumulative Preference Shares during the year 2016-17. YourDirectors have not recommended dividend for the period ended March 31 2017.

4. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

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

5. PROJECT IMPLEMENTATION

During the year under review Your Company has various projects through various clientswere as under:

• EPC work for Development of Agar- Sarangpur Road on OMT basis through SPV viz.Sarangpur Agar Road Private Limited.

• EPC work for Development of Badi- Baktara - Shahganj Road on OMT basis in thestate of Madhya Pradesh through SPV viz. Badi Baktara Toll Private Limited.

• EPC work for Development of Khalghat - Manawar Road on OMT basis in the state ofMadhya Pradesh through SPV viz. Khalghat Manawar Toll Private Limited.

• EPC work for Reconstruction of High level Bridge over Bina River & DhasanRiver with approach Roads on NH-86 at Bhopal- Sanchi- Sagar Road in the state of MadhyaPradesh.

• Civil Contract of Widening and Reconstruction of Bandri- Jaruwakheda Nirtala -Mandi- Bamora Damoh- Hindoriya- Patera Prithvipur- Niwari Ajaygarh - Toriya- Bariyapurand Palera- Baldeogarh in the state of Madhya Pradesh.

• Civil works for Auditorium Building and Chemical Teal Storage Building also tocomplete the left over job of Road and other civil structures work for M/s ONGC PetroAdditions Limited at Dahej through Fernas Construction (India) Private Limited.

• Civil and Structural work for various utilities and offsites for revamp andcapacity enhancement project at M/s. Bharat Oman Refineries Limited Bina (MP).

• Supply and Commencing Rooftop Solar Photovoltaic Systems projects of 12 MW inthe state of MP 5 MW projects at various states viz. Gujarat Rajasthan and Karnataka.

6. SUBSIDIARY COMPANIES

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

• Madhav Infracon (BK Corridor) Private Limited

• Madhav (Sehora Silodi Corridor) Highways Private Limited

• Madhav (Phoolsagar Niwas Shahpura Corridor) Highways Private Limited

• Madhav Industrial Park Private Limited

• MI Solar (I) Private Limited

• MSK Projects (India)(JV) Limited

• Khalghat Manawar Toll Private Limited

• Badi Baktara Toll Private Limited

• Sarangpur Agar Road Private Limited

• Madhav Solar (J) Private Limited

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

7. CREDIT RATING

Your Company has been assigned a rating of CARE BBB+ (Plus) for Loan Term Bank Limitsof Rs. 162.79 Crores and Long term/Short term Rs. 239 Crores CARE BBB+ (Plus) /CAREA3+(Plus). This credit rating assigned by CARE for the short term. The rated LOC carrieslowest credit risk. The rating is assigned by CARE.

8. MANAGEMENT DISCUSSION AND ANALYSIS

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

9. INSURANCE & RISK MANAGEMENT

The assets of the Company are adequately insured against the loss of fire riotearthquake terrorism loss of profits etc. and other risks which considered necessary bythe management.

10. DEPOSITS

The Company has not accepted any Deposit as defined under section 73 of the CompaniesAct 2013 and rules framed thereunder from the members or the general Public as on March31 2017. There are no small depositors in the Company.

11. PARTICULARS OF LOANS GAURANTEES AND INVESTMENTS

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

(Rs. in Lakhs)
Sr. No. Name of entity Relationship Amount of Loan Made Purpose of Loan
1 MSK Projects (India) (JV) Limited Wholly Owned Subsidiary 128.75 General Business Purpose

During the year the Company has given a Guarantees to the Company's mentioned herein asunder:

(Rs. in Lakhs)

Sr. No. Name of the Company Amount
1 Madhav (PNS Corridor) Highways Private Limited 2411.52
2 MI Solar (India) Private Limited 732.93
3 Madhav Infracon (B K Corridor) Private Limited 1344.00

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

(Rs. in Lakhs)

Sr. No. Name of the Company Amount
1 MI Solar (India) Private Limited 155.51
2 Madhav Solar (J) Private Limited 499.99
3 Badi Baktara Toll Private Limited 0.99
4 Khalghat Manawar Toll Private Limited 0.99
5 Sarangpur Agar Road Private Limited 0.99
6 MSK Projects (India)(JV) Limited 66.50

12. LISTING OF SECURITIES OF THE COMPANY

Your Company get listed in Bombay Stock Exchange ("BSE") Limited and havingScrip Code is

539894.

13. DIRECTORS' RESPONSIBILITY STATEMENT

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

Responsibility Statement: —

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

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

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

(e) the directors had laid down internal financial controls which are adequate andoperating effectively.

"Internal Financial Controls" means the policies and procedures adopted bythe company for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information;

(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

14. BOARD EVALUATION

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

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

15. NUMBERS OF BOARD MEETINGS

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

16. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year there has no change in Directors and Key Managerial Personal exceptMr. Haresh Kapuriya has been resign from the post of Company Secretary with effect fromJune 17 2016 and Mr. Gopal Shah appointed as a Company Secretary with effect from June17 2016.

17. RELATED PARTY TRANSACTIONS

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

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

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

18. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in form MGT- 9 prescribed as under Section 134(3) (a)of the Companies Act 2013 for the year 2016-17 has been annexed herewith as Annexure -C to this report.

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

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

20. AUDITOR'S AND THEIR REPORT

M/s. Chandrakant & Seventilal & J. K. Shah & Co. Chartered Accountants(Registration No. 101676W) who were appointed as the Statutory Auditors of the Company atthe last Annual General Meeting of the Company for the year 2016-17 for their first yearto five financial years i.e. till the 28th AGM.

The Auditors report for financial year ended on March 31 2017 does not contain anyqualificationreservation or adverse remark. The Auditors report enclosed with thefinancial statements in the Annual Report.

21. SECRETARIAL AUDITORS

Mr. Hemant Valand of M/s. KH & Associates Practicing Company Secretaries wasappointed to conduct secretarial audit of the Company for the year ended on March 312017 as required under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit Report given by Secretarial Auditors in Form No. MR-3 has been annexedherewith as Annexure -E to this report.

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

22. CORPORATE SOCIAL RESPONSIBILITY

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

23. CORPORATE GOVERNANCE

Your Company strives to incorporate the appropriate standards for corporate governance.Report on Corporate Governance and a Certificate from the Statutory Auditors M/s.Chandrakant & Seventilal & J. K. Shah & Co. Chartered Accountants(Registration No. 101676W) regarding compliance of the conditions of Corporate Governanceas stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 has been annexed herewith as Annexure - G to this report.

24. SIGNIFICANT AND MATERIAL EVENTS AND ORDERS

During the year Income Tax department carried out search u/s 132 and survey u/s 133Aof the Income Tax Act 1961 at the various offices/ premises of the Company Managementbelieves that there would be no impact in this regards on the financial results of theCompany.

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

25. DECLARATION BY INDEPENDENT DIRECTORS

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

26. FAMILIARIZATION PROGRAME FOR INDEPENDENT DIRECTORS

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

27. PARTICULARS OF EMPLOYEES

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

28. POLICIES

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

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

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and has also created an Internal Complaints Committee headed byMrs. Neelakshi Khurana Director of the Company who directly reports to the Chairman &Managing Director. During the financial year ended March 31 2017 the Company has notreceived any complaints pertaining to sexual harassment.

30. ACKNOWLEDGEMENT

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

For and on behalf of the Board of Directors

Date: May 30 2017 Amit Khurana
Place: Vadodara Chairman and Managing Director