The Board of Directors is pleased to present the Twenty Fourth Annual Report of theCompany together with the Audited Financial Statements for the financial year ended 31stMarch 2019.
(Rs in Lakhs)
| || |
Standalone Year ended
Consolidated Year ended
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Gross Revenue ||22831.93 ||54535.03 ||24098.51 ||57669.57 |
|Earnings Before Interest Taxes and Depreciation ||12201.21 ||9081.33 ||12337.08 ||12075.80 |
|Less : Interest & Finance Charges ||10602.88 ||24596.62 ||12539.72 ||24985.77 |
|Less : Depreciation ||1450.00 ||1460.74 ||1980.24 ||2265.71 |
|Profit Before Tax and Exceptional Item ||148.33 ||(16976.03) ||(2182.88) ||(15175.68) |
|Exceptional item (Net) (Transferred to capital Reserve) ||(28371.30) ||40212.56 ||(28371.30) ||16384.15 |
|Profit before Tax* ||(28222.97) ||23236.53 ||(30554.18) ||1208.47 |
|Less: Provision for Tax (Current & Deferred) ||(4099.31) ||(666.00) ||(4167.66) ||(700.90) |
|Profit After Tax* ||(24123.66) ||23902.53 ||(26386.52) ||1909.37 |
|Balance Brought Forward From Last Year ||(10296.82) ||6013.20 ||(30573.72) ||7641.01 |
|Transfer to Capital Reserve ||(28371.30) ||40212.56 ||(28371.30) ||40212.56 |
|Balance carried to Balance Sheet ||(6049.18) ||(10296.82) ||(28949.48) ||(30573.72) |
* Including exceptional items (refer Note No. 38 to the Financial Statements) State ofthe Company's affairs
The Company has taken necessary steps for the implementation of the Resolution Planapproved by Hon'ble National Company Law Tribunal Kolkata Bench (NCLT) by order dated18.04.18 under the Insolvency & Bankruptcy Code 2016. During the year Company hassubstantially completed various public interest projects. Commercial operations of tollcollections for 90.86% of 172.384 kms of the BOT project at Suratgarh-Bikaner Section ofNH-62 in the state of Rajasthan has commenced w.e.f. 17.02.2019 by Suratgarh Bikaner TollRoad Pvt Ltd. subsidiary of the Company in which the Company has investment of RS 185.05crores.
The financial performance of the Company was adversely effected during the year due tonon-implementation of the Resolution Plan by working capital Bankers. The turnover of theCompany during the Financial year 2018-19 was RS 14667.11 lakhs on standalone basis andRS 15413.71 lakhs on consolidation basis as against RS 48674.13 lakhs on standalonebasis and RS 51069.70 lakhs on consolidation basis during FY2017-18. The Company hadprofit of RS 148.33 lakhs on standalone basis and loss of RS 2182.88 lakhs onconsolidation basis during FY2018- 19 as against loss of RS 16976.03 lakhs on standalonebasis and loss of RS 15175.68 lakhs on consolidation basis during FY2017-18. Howeverafter considering the Exceptional Item the loss on standalone basis was RS 24123.66lakhs and RS 28371.30 lakhs on consolidation basis during FY2018-19 as against profit ofRS 23902.53 lakhs on standalone basis and RS 1909.37 lakhs on consolidation basis duringFY2017-18.
On account of cost over-run arising due to client responsibility delays client'ssuspension of projects deviation in design change in scope of work etc. significantamount has been withheld by clients. The Company has taken necessary steps for therealization of such receivables and these are at different stages ofnegotiations/arbitration/ dispute resolution/litigation.
The Company has inducted many professionals in various departments to strengthen themanagement of the Company. The Registered office of the Company has been shifted fromKolkata to New Delhi after obtaining necessary approvals.
Some of the banks have preferred appeals before the Hon'ble NCLAT against the order ofthe Hon'ble NCLT approving the Resolution Plan. The Company has received legal opinionthat the Resolution Plan is legally approved and is binding on all stakeholders and thereis no merit in the appeals. In the unlikely event of ultimate rejection of the ResolutionPlan the Company may go under liquidation and may not be a going concern and thefinancial statements have to be recasted.
There are immense opportunities available to the Company in its core competency area.
Changes in the Nature of Business if any
There has been no change in the nature of business of the Company during the financialyear 2018-19.
Changes in Share Capital
During the period under review Authorized Capital of the Company has increased from RS5000 lakhs divided into 50000000 equity shares of RS 10 each to RS 10500 lakhsdivided into 105000000 equity shares of RS 10 each. The paid up Equity Share Capital ofthe Company as at 31st March 2019 has increased from RS 4145.46 lakhs to RS 10475.46lakhs due to issue and allotment of 63300000 crores of equity shares of RS 10 each on10th July 2018 to the promoters and entities forming part of promoter group during theyear under review after receiving necessary approval from both the Stock Exchanges i.e.BSE & NSE. The amount of RS 6330 lakhs has been utilized pursuant to the approvedresolution plan.
In terms of the approved Resolution Plan and in accordance with the then Insolvency andBankruptcy Code 2016 read with Regulations 0.10% p.a. Secured Non- convertibledebentures aggregating to RS 88085.05 lakhs were issued on 30/04/2018 to the workingcapital banks who had voted in favour of approved Resolution plan. However consequent tothe deletion of Regulation 38(1) of IBBI (Insolvency Process for Corporate Persons)Regulations 2016 pursuant to Hon'ble NCLAT judgements and to give effect to the samethe Board had further issued 0.10% p.a. Secured Non- convertible debentures aggregating toRS 30749.02 lakhs on 14/02/2019 to Dissenting working capital banks. The aforesaiddebentures are redeemable in 39 unequated quarterly installments at a premium of 10%payable at time of final redemption.
Transfer to Reserves
After the approval of the Resolution Plan pursuant to the then IBC Regulations thedissenting financial creditors were entitled for the proportionate share of the assessedliquidation value. The Company had accordingly provided for the liquidation value in thebooks of accounts against the dues of the dissenting financial creditors. RS 26719.75lakhs being the difference between the dues of the dissenting financial creditors andtheir share in the liquidation value and being capital in nature was transferred tocapital reserve. As per subsequent judgement of Hon'ble NCLAT and amendments made in theIBC Regulations there is no disparity between assenting and dissenting financialcreditors and the Resolution Plan is binding on all stakeholders. Therefore capitalreserve of RS 28371.30 lakhs created earlier has been reinstated. Detailed explanationhas been provided in the note 38 to the financial statements.
Pursuant to Companies Act 2013 the Company has during the year created DebentureRedemption Reserve of RS 29708.52 lakhs.
Due to inadequate profits the Directors do not recommend any dividend for the year.
Management Discussion and Analysis Report
Management Discussion and Analysis Report is enclosed as AnnexureA and formsintegral part of this Annual Report.
Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe Financial Statements relate and the date of the Report
Other than as stated elsewhere in this report there are no material changes andcommitments affecting the financial position of the Company which have occurred betweenthe end of the Financial Year of the Company to which the Financial Statements relate andthe date of the Report.
Extract of Annual Return
The details forming part of the extracts of the Annual Return in form MGT-9 as providedunder section 92 of the Act is enclosed as Annexure-B and forms integral part of thisreport.
The Company has complied with the requirement of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("LODR")relating to Corporate Governance Report ("CGR"). A separate section titled"Report on Corporate Governance" along with the Practicing Company SecretaryCertificate on Corporate Governance pursuant to requirement of Regulation 34 read withPara C of Schedule V of the Listing Regulations confirming compliance with the conditionsof the Corporate Governance is annexed as Annexure-C and forms integral part of thisReport. The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
During the year 8 (Eight) Board Meetings were convened and held details of which areprovided in enclosed Corporate Governance Report. The intervening gap between the meetingswas within the period prescribed under the Act and LODR.
Independent Directors Declaration
The Company has received declarations from Mr. Ashwini Kumar Singh Mr. Bhagwan SinghDuggal and Ms. Sunita Palita Independent Directors of the Company confirming that theymeet the criteria of independence as laid down under Section 149(6) of the Act andRegulation 16 of the Listing Regulations. There has been no change in the circumstancesaffecting their status as Independent directors of the Company and they are not aware ofany circumstances or situation that could impair or impact their ability to dischargetheir duties with an objective independent judgement and without external influence.
The Company has in place formal process for evaluation of performance of the Board itsCommittee and individual directors. The evaluation process was done through astructured questionaries' in terms of the Company policy which inter- aliaconsider composition and attendance of Directors at Board and Committees acquaintancewith business effective participation regulatory compliance corporate governance etc.
The Independent Directors in their meeting held without the presence of the ManagingDirector have evaluated the performance of Executive Director and Board as a whole. Theperformance of the Committees was evaluated after seeking inputs from the committeemembers on the basis of criteria such as composition of the committees effectiveness ofthe committees meetings etc. The Board of Directors expressed their satisfaction on theevaluation process and the performance of all the Directors the Committees and the Boardas a whole. The evaluation of Independent Director was done by the entire Board excludingthe director being evaluated. On the basis of the performance evaluation report the Boardhas determined to continue the term of the Independent Directors.
Directors & Key Managerial Personnel
The shareholders of the Company in its Annual General Meeting held on 29th September2018 have approved appointment of Mr. Ashwini Kumar Singh and Mr. Bhagwan Singh Duggal forperiod of 5 years w.e.f. 1st April 2019 and appointment of Ms. Sunita Palita asIndependent Director for a period of 5 years w.e.f. 26th May 2019.
The shareholders in the Annual General Meeting held on 29th September 2018 had alsoapproved re-appointment of Mr Anjanee Kumar Lakhotia as Chairman & Managing Directorof the Company for a period of five years w.e.f. 26th May 2019. Mr. Anjanee KumarLakhotia Chairman and Managing Director of the Company retire by rotation at the ensuingAnnual General Meeting ("AGM") and being eligible offers himself forre-appointment. The Board recommends his re-appointment for the consideration of Membersof the Company at the ensuing Annual General Meeting. The brief resume/profile of Mr.Anjanee Kumar Lakhotia is attached with Notice for the ensuing Annual General Meeting.
Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel of theCompany are Mr. Anjanee Kumar Lakhotia Chairman and Managing Director Mr. Darshan SinghNegi Chief Financial Officer and Mr. Anubhav Maheshwari Company Secretary and ComplianceOfficer.
Directors' Responsibility Statement
Your Directors here by confirm that: a) in the preparation of the annual accounts forthe year ended 31st March 2019 the applicable accounting standards had been followedalong with proper explanations wherever required;
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 loss of theCompany for that period;
c) they have proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany 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 Internal Financial Controls to be followed by the Company andthat such Internal Financial Controls were adequate and operating effectively; and
f) they have proper systems to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.
Corporate Social Responsibility (CSR)
The CSR policy of the Company is in accordance with the requirement of the Companies(CSR policy) Rules 2014 and is available on company website at https: // www.mblinfra.com/uploadimages /pdf/ pdf_1502256043.pdf. The expenditure on activities undertaken are inaccordance to schedule VII of the Act. The focus areas of the CSR engagements amongstothers are promoting healthcare including preventive healthcare and sanitation ensuringEnvironmental sustainability and measures for reducing inequalities faced by the sociallyand economically backward groups. As a part of its initiative under CSR drive the Companyhas undertaken projects in the areas of environmental sustainability protection of floraand fauna.
The report on the CSR activities as required under Companies (CSR) Rules 2014 isenclosed as Annexure-D and forms integral part of this Report.
Performance of Subsidiary Companies
The contribution of the Subsidiary Companies to the overall performance of the Companyis given as note 48 of the consolidated Financial Statement. Pursuant to Section 129(3) ofthe Act and Ind AS -110 issued by the ICAI consolidated financial statements includesfinancial statement of subsidiary companies. The statement containing salient features ofthe financial statement of the subsidiary companies is enclosed as Annexure-E and formsintegral part of the Report.
Suratgarh Bikaner Toll Road Company Pvt. Ltd. is a material subsidiary of the Companyas per thresholds laid down under Listing Regulations. The Board of Directors of theCompany has approved a policy for determining material subsidiaries which is in line withthe Listing Regulations as amended from time to time. The policy was amended w.e.f.01/04/2019 in line with the amendments made to Listing Regulations. The policy has beenuploaded on website of the Company athttps://www.mblinfra.com/uploadimages/pdf/pdf_1566885918.pdf.
The Audited accounts of each subsidiary is placed on the website of the Companywww.mblinfra.com and copy of separate financial statement in respect of each subsidiaryshall be provided to any shareholder of the Company. These documents are also availablefor inspection at the registered office of the Company for the period of 21days before thedate of AGM.
During the year the Board of Directors reviewed the affairs of the subsidiaries.Summary of the BOT projects undertaken by the Company through its subsidiaries is asunder:
|Project ||SPV/Subsidiary companies ||Type ||Current Status |
|Developing and Operation of Bikaner Suratgarh Section of NH 15 in the State of Rajasthan ||Suratgarh Bikaner Toll Road Company Private Limited ||Toll ||Operational (PCOD 90.87% achieved) |
|Strengthening Widening Maintaining and Operating of 18.303 kms Waraseoni- Lalbarra Road in the state of Madhya Pradesh ||MBL (MP) Toll Road Company Limited ||Toll + Annuity ||Operational |
M/s SARC & Associates Chartered Accountants (Firm Registration No. 006085N) wereappointed as Statutory Auditors of the Company in the Annual General Meeting held on 11thNovember 2017 for period of 5 (Five) consecutive years. Pursuant to amendment in theCompanies Act 2013 ratification by shareholders every year for the appointment ofstatutory auditors is no longer required and accordingly the Notice of Annual GeneralMeeting does not include the proposal for seeking shareholders approval for ratificationof Statutory auditors' appointment. The Auditor have confirmed that they are notdisqualified from continuing as Statutory Auditor of the Company and hold a validcertificate issued by Peer Review Board of the ICAI.
The Auditors report does not contain any qualifications reservation and adverse remarkor disclaimer. The note on financial statement referred to Auditors Report areself-explanatory and do not call for further comments. There has been no fraud reported bythe Statutory Auditors during the period.
The Secretarial Audit was conducted by M/s Mehak Gupta & Associates PracticingCompany Secretaries for the FY 2018-19. The Secretarial Audit Report is enclosed asAnnexure-F and forms integral part of the Directors Report. The Secretarial Audit reportdoes not contain any reservations or adverse remarks or disclaimers. There has been nofraud reported by the Secretarial Auditor during the period. The Board of Directors of theCompany has appointed M/s Mehak Gupta
& Associates Practicing Company Secretaries to conduct Secretarial Audit of theCompany for the Financial Year 2019-20 after obtaining written consent from them thattheir appointment is in accordance with applicable provisions of the Act and rules madetherein.
The Secretarial Audit Report of Ms. Alapana Setia Practicing Company Secretary formaterial unlisted Company is enclosed as Annexure-G. The Secretarial Audit report does notcontain any reservation or adverse remarks or disclaimers. There has been no fraudreported by the Secretarial Auditor during the period.
As per the requirements of Section 148 of the Act read with the Companies (Cost Recordsand Audit) Rules 2014 as amended from time to time Company is required to maintain costrecords and accordingly such accounts are made and maintained every year. The Board ofDirectors on the recommendation of Audit Committee has appointed M/s Dipak Lal &Associates Cost Accountant as Cost Auditors of the Company for the Financial Year ended2019-20 at a remuneration of RS 35000/- (Rupees Thirty five thousand only) plusapplicable taxes and reimbursement of out of pocket expenses subject to ratification bymembers in the ensuing AGM.
The Cost Audit report for FY 2017-18 does not contain any qualification or reservationor adverse remark or disclaimer. There has been no fraud reported by the Cost Auditorduring the year.
Particulars of Loans Guarantees or Investments
Details of loans guarantees or investments made under Section 186 of the Act are givenin the note to the financial statements.
Particulars of Contract or Arrangements with Related Parties
The Company related party transactions ("RPT") are with its SubsidiaryCompanies Special Purpose Vehicle Associate Companies JointVentures/Enterprise-Participation which are entered for synergy of operation long-termsector environment strategy legal requirements liquidity and capital requirement ofSubsidiary Companies Associate Companies Joint Venture/ Enterprise Participation.
All contracts/arrangements/transactions entered by the Company with related parties forthe year under review were on arm's length basis and in the ordinary course of business.Hence disclosure in form AOC- 2 under the Act read with the rules made therein is notrequired. The shareholders in the Annual General Meeting held on 29th September 2018 haveapproved to undertake related party transactions for a period of five years not exceedingaggregate amount of RS 10000 lakhs per annum. The Company has not entered into anycontract/ arrangement/ transaction which would be considered as material in accordancewith the policy of the Company on the materiality of the related party transaction. Thedetails of RPT transactions forms part of the notes to audited financial statement.
None of the transaction with any related parties were in conflict with the Companyinterest.
The policy on Related Party Transactions as approved by the Board of Directors of theCompany may be accessed on the weblink https://www.mblinfra.com/uploadimages/pdf/pdf_1566885890.pdf.
Significant and Material Orders
Some of the banks have preferred appeals before the Hon'ble NCLAT against the orderdated 18.04.2018 of the Hon'ble NCLT approving the Resolution Plan. The Company hasreceived legal opinion that the Resolution Plan is legally approved and is binding on allstakeholders and there is no merit in the appeals. In the unlikely event of ultimaterejection of the Resolution Plan the Company may go under liquidation and may not be agoing concern and the financial statements have to be recasted.
Further the members attention is drawn to the statement of contingent liabilitiescommitments in the notes forming part of Financial Statements.
Details of Conservation of Energy Technology Absorption and Foreign Exchange Earningsand outgo
i) Conservation of energy is an ongoing process in the Company's activities. As thecore activities of the Company are not energy intensive activity no information is to befurnished regarding conservation of energy.
ii) The Company had not undertaken any research and development activity for anymanufacturing activity nor was any specific technology obtained from any external sourceswhich needs to be absorbed or adapted.
iii) The particulars of expenditure and earnings in foreign currency are furnished inthe notes forming part of the financial statements.
The Company has in place the Risk Management Policy. The details of the identificationof the various risk associated with the business of the Company which in the opinion ofthe Board may threaten existence of the Company is detailed in the enclosed MDA.
Committees of Board
The Board of Directors have the following committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
Apart from above the Board has two (non-statutory) committees namely Banking committeeand Management Committee.
The composition terms of reference and number of meetings of the Committees during theperiod under review is covered in the enclosed CGR.
Particulars of the Employees
The information required pursuant to Section 197 of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof employees of the Company is given in a separate annexure to this Report. A Statementcomprising the names of top 10 employees of the Company is annexed as Annexure- H andforms integral part of the Report. The Reports and Accounts are being sent to Members andother entitled thereto excluding the information on employee's particulars which isavailable for inspection by the Members at the Registered Office of the Company duringbusiness hours on any working day. If any member is interested in obtaining a copythereof such member may write to Company Secretary in this regard. During the periodunder review no employee of the Company drew remuneration in excess of the limitsspecified under the provisions of the Act read with rules made therein and hence nodisclosure is required to be made in the Annual Report.
The Company has in place Remuneration Policy for Directors Key Managerial Personneland Senior Management Personnel to align with the requirement of the Act and LODR. Thebrief particulars of the remuneration policy are stated in the enclosed CGR and isavailable on the website of the Company at https://www.mblinfra.com/uploadimages/pdf/pdf_1566911108.pdf.
Statement in Respect of Adequacy of Internal Financial Controls with Reference to theFinancial Statements
The purpose of the internal control is to prevent risk arising in course of operationsby adopting appropriate controls and process especially with regard to conformity withthe laws compliance with the strategy the quality of accounting and reporting and thequality of process and protection of assets amongst others.
Your Company has an effective internal control system commensurate to its size scaleand complexities of its operations. The Company has in-house Internal Audit departmentcomprising of professional executives. The Internal Audit Department has conducted theInternal Audit in line with the scope formulated functioning periodicity and methodologyagreed with the Audit Committee. The Internal Auditors monitors and evaluate the efficacyand adequacy of the internal control system in the Company its compliance with operatingsystems and accounting procedures and policies adopted by it. Based on the reports of theinternal audit process owners undertake corrective action in their respective areas andthereby strengthening the controls. The Company has appointed consultants/professionals toconduct Cost Audit and Secretarial Audit and observations made if any are reviewed bythe Management periodically and corrective actions if required are taken.
Whistle Blower Policy/ Vigil Mechanism
The Company has in place Vigil Mechanism/ Whistle Blower Policy for director andemployees to report genuine concerns. The policy is available on the website of theCompany https://www.mblinfra.com/ uploadimages/pdf/pdf_1566911108.pdf and the briefparticulars of the establishment of Vigil Mechanism is provided in the enclosed CGR.
During the period under review no deposits were accepted by the Company.
Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013.
The Company has in place a policy on Prevention of Sexual Harassment at workplace. Thispolicy is in line with the requirements of The Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. All employees whether permanentcontractual temporary and trainees are covered under this Policy. As per the said Policyan Internal Complaints Committee is also in place to redress complaints received regardingsexual harassment. No case or complaint was filed pertaining to Sexual Harassments policy.
We convey our grateful appreciation for the valuable patronage and co-operationreceived and goodwill enjoyed by the Company from all the Stakeholders its esteemedcustomers shareholders business associates banks financial institutions governmentAuthorities and other stakeholders.
We place on record our appreciation to the contribution made by the employees at alllevels.
| ||By Order of the Board |
| ||For MBL Infrastructures Ltd. |
| ||Anjanee Kumar Lakhotia |
|Place: New Delhi ||Chairman & Managing Director |
|Dated: 30th May 2019 ||(DIN-00357695) |