The Directors have the pleasure in presenting the Thirty First Annual Report togetherwith the audited financial statement for the year ended March 31 2020.
The Company's financial performance for the Year ended on March 31 2020 is summarizedbelow:
( Rs. in Crores)
| || |
|Particulars ||Current Year ||Previous Year ||Current Year ||Previous Year |
| ||2019-2020 ||2018-2019 ||2019-2020 ||2018-2019 |
|Total Income ||2273.88 ||3649.54 ||3862.15 ||5504.62 |
|Profit before Finance Cost Depreciation & amortization ||395.31 ||528.21 ||1517.31 ||1745.56 |
|Expense and Tax Expense || || || || |
|Less : Finance Cost ||194.12 ||174.92 ||1410.83 ||1328.63 |
|Depreciation and amortization Expense ||108.45 ||95.76 ||401.18 ||392.08 |
|Profit /(Loss) before Exceptional Item and Tax ||92.74 ||257.53 ||(294.70) ||24.85 |
|Exceptional Item (Net of expenses) ||17.01 ||0.76 ||1501.01 ||54.22 |
|Profit /(Loss) Before Tax ||109.75 ||258.29 ||1206.34 ||79.07 |
|Less : Tax Expenses ||36.22 ||71.40 ||52.35 ||127.77 |
|Less:-Deferred tax liability /(asset)(Including MAT Credit) ||(11.62) ||0.04 ||47.71 ||5.39 |
|Profit /(Loss) for the period from continuing Operations ||85.15 ||186.85 ||1106.25 ||(54.08) |
|Add:- Share of Loss Transferred to Minority Interest ||- ||- ||313.42 ||75.20 |
|Net Profit for the period after tax ||85.15 ||186.85 ||792.83 ||21.12 |
|Balance brought forward from last year ||1148.01 ||1005.13 || ||(318.26) |
|Loss of Subsidiary for earlier year transferred (net) || || || || |
|Other Comprehensive Income (OCI) ||3.34 ||(0.30) ||3.37 ||(0.45) |
|Amount available for Appropriations ||1233.16 ||1191.98 ||358.51 ||(297.14) |
|Appropriations || || || || |
|Dividend & Tax paid thereon ||18.18 ||19.66 ||30.90 ||40.82 |
|Adjustment on account of acquisition ||0.00 ||0.00 ||(0.60) ||35.81 |
|of non controlling interest || || || || |
|Equity Transactions / Share Issue Expenses ||0.00 ||0.00 ||0.22 ||0.36 |
|Transfer to Debenture Redemption Reserves ||0.00 ||24.30 ||- ||60.19 |
|Closing Balance in Retain earnings ||1214.98 ||1148.02 ||327.99 ||(434.32) |
Your Directors want to retain the profits in to business for future businessopportunities therefore not recommended any dividend for the financial year ended on 31stMarch 2020.
Dividend Distribution Policy
The Company has adopted a Dividend Distribution Policy on August 20 2016 which isavailable on the website of the Company at the link:https://www.sadbhaveng.com/wp-content/uploads/2018/02/Dividend_Distribution_Policy_SEL.pdfThere has been no change to the policy during the year.
The total revenue during the year under review was Rs. 2273.88 Crores against Rs.3649.54 Crores for the previous year. Profit before Finance Cost Depreciation &amortization Expense and Tax Expense for the current year is Rs. 395.31 Crores (Rs. 528.21Crores in previous year). Net Profit after tax amounted to Rs. 85.15 Crores (Rs. 186.85Crores in previous year) thereby resulting decrease of 54.43%.
As per the Consolidated Financial Statements the Total Income of the Companyoperating profit (PBDIT) and net Profit for the year were Rs. 3862.15 Crores Rs.1517.31 Crores and Rs. 1106.25 Crores respectively.
Transfer to Investor Education and Protection Fund
The Company has transferred a sum of Rs. 2.92 lakhs to the Investor Education andProtection fund established by the Central Government during the financial year 2019-20in compliance with Section 124 of the Companies Act 2013. The said amount representsunclaimed dividend amount for the financial year 2011-2012 which were lying with theCompany for a period of 7 years from their due dates of payment. Prior to transferring theaforesaid sum the Company has sent reminders to the shareholders for submitting theirclaims for unclaimed dividend for the financial year 2011-2012.
The Company has not transferred any amount into General Reserve during the period.
Change in the Nature of Business if any
There are no changes in the nature of business during the year.
Material changes and commitments affecting financial position between end of thefinancial year and date of report
There have been no material changes and commitments affecting financial positionbetween end of the financial year and the date of the report. Information regardingpotential impact of COVID-19 pandemic on your Company's business operations and financialposition are provided as part of the MD&A Report.
Impact of Covid-19
The COVID-19 pandemic is rapidly spreading across the world as well as in India and hascaused shutdown accross the country. The Group has resumed operations in a phased mannerin line with the directives of the Government of India. The Group's management has madeinitial assessment of likely adverse impact on business and believes that the impact maynot be significant over the terms of its contracts. The group has / is in the process offiling of claims for appropriate relief as per the terms of concession agreement withNHAI/Local Authority and has also availed the relief provided by its lenders by way ofmoratorium on certain principal / interest payment. In developing the assumptions relatingto the possible future uncertainties in the global economic conditions because of thispandemic the group as at date of approval of these financial statements has usedcorroborative information. As on current date the group has concluded that the impact ofCovid-19 is not material based on the evaluations. Due to the nature of the pandemic thegroup will continue to monitor developments to identify significant uncertainties infuture periods if any. The management does not see any long term risks in the Group'sability to continue as a going concern and meeting its liabilities as and when they falldue
Merger of Sadbhav Infrastructure Project Limited ("SIPL") with the Company
In order to improve operational efficiency the Board of Directors of the Company inits meeting held on October 19 2019 after considering the recommendations of the AuditCommittee approved the merger of Sadbhav Infrastructure Project Limited with the Companythrough a Scheme of Amalgamation ("Scheme") under Section 230 to 234 of theCompanies Act 2013 subject to necessary approvals of Shareholders Creditors theRegistrar of Companies the Stock Exchanges Hon'ble National Company Law TribunalSecurities and Exchange Board of India and/or other competent statutory/regulatoryauthorities and other third party approvals as may be applicable. The Company has appliedfor observation letters on May 18 2020 to BSE Limited and the National Stock Exchange ofIndia Limited in terms of Regulation 37 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The following major works are under execution and the same are progressingsatisfactorily.
(Rs. in crores)
|Sector ||No. of projects ||Work order ||Work done ||Work on hand |
|Transportation ||21 ||12754.15 ||6771.80 ||5982.35 |
|Irrigation ||11 ||1867.29 ||1503.13 ||364.16 |
|Mining Operation ||9 ||2818.88 ||793.49 ||2025.39 |
|Total ||41 ||17440.30 ||9068.40 ||8371.90 |
The Company's order book (pending execution) shows work on hand amounting to Rs.8371.90 crores as on the March 31 2020
BOT Projects under Implementation
|Name of the Company ||Details of Project ||Cost of the Project ||Status as on March 31 2020 || |
% Shareholding (Ownership)
| || ||(Rs. in crores) ||Cost incurred (including price escalation and excluding GST) (Rs. in crores) ||SEL ||SIPL |
|Sadbhav Rudrapur Highway Pvt. Ltd. (SRHPL) ||Four Laning of Rampur-Kathgodam section of NH-87 (New NH No. 9) from km 0.000 (km190.000 of NH-24) to km 42.791 (design chainage 43.446) [Package-I] in the State of Uttar Pradesh under NHDP-III on Hybrid Annuity Mode. ||738.00 ||585.50 ||- ||100 |
|Sadbhav Nainital Highway Pvt. Ltd.(SNHPL) ||Four Laning of Rampur-Kathgodam section of NH-87 (New NH No. 9 109) from km 42.791 (design chainage 43.446) to km 88.000 (design chainage 93.226) [Package-II] in the State of Uttarakhand under NHDP-III on Hybrid Annuity Mode. ||560.10* ||329.09 ||- ||100 |
|Sadbhav UNA Highway Pvt. Ltd. (SUHPL) ||Four Laning of Una to Kodinar of NH-8E from Km. 180.478 to Km. 221.610 (Design Chainage from Km. 181.450 to Km. 222.400) (Package-V) in the State of Gujarat on Hybrid Annuity Mode under NHDP Phase IV. ||623.00 ||385.88 ||- ||100 |
|Sadbhav Bhavnagar Highway Pvt. Ltd. (SBHPL) ||Four Laning of Bhavnagar-Talaja Section of NH-8E from km. 7.090 to km. 53.585 (Design Ch from km. 6.945 to km. 54.990) (Package-I) in the State of Gujarat on Hybrid Annuity Mode under NHDP Phase-IV. ||819.00 ||618.78 ||- ||100 |
|Sadbhav Banglore Highway Pvt. Ltd. (SBHPL) ||Two/Four Laning of BRT Tiger Reserve Boundary to Bangalore Section of NH-209 (Existing Chainage from 287.520 to 461.550) in the State of Karnataka to be executed on BOT (Hybrid Annuity) basis under NHDP Phase-IV. ||1008.00 ||924.97 ||- ||100 |
|Sadbhav Udaipur Highway Pvt. Ltd. (SUHPL) ||Six lane of Greenfield proposed Udaipur Bypass [Connection between NH-76 at existing Km 118+500 at Debri to NH-8 Km 287+400 at Kaya Village (Udaipur bypass length 23.883)] on Hybrid Annuity Mode Package-IV under NHDP phase V in the State of Rajasthan. ||891.00 ||728.61 ||- ||100 |
|Sadbhav Vidarbha Highway Pvt. Ltd. (SVHPL) ||Four laning of Waranga to Mahagaon section of NH-361 from km 253.000 to km 320.580 (Package-I) (Design Length 66.880 Km) in the state of Maharashtra under NHDP Phase- IV on Hybrid Annuity Mode. ||1071.00 ||657.74 ||- ||100 |
|Sadbhav Jodhpur Ring Road Pvt. Ltd. (SJRPL) ||Four Laning of Dangiywas (km 96.595 of NH-112) to Jajiwal (km 283.500 of NH-65 Nagaur Road) section Package-I (Design length 74.619 km) of Jodhpur Ring Road (In Principally declared NH) in the State of Rajasthan under NHDP Phase-VII. ||1106.00 ||213.83 ||- ||100 |
|Sadbhav Kim Expressway Pvt. Ltd. (SKEPL) ||Construction of Eight lane Vadodara Kim Expressway from Km 254.430 to Km 279.000 (Kim to Ankleshwar Section of Vadodara Mumbai Expressway) in the State of Gujarat under NHDP Phase- VI (Phase IA- Package V) on Hybrid Annuity Mode. ||1404.00 ||57.36 ||- ||100 |
|Sadbhav Gadag Highway Pvt. Ltd. (SGHPL) ||Construction of Two Laning with paved shoulder of Gadag to Honnali (Km 105.500 to Km 205.290 of SH 57 and Km 215.335 to Km 253.713 of SH 26) 138.2 km in the State of Karnataka under KSHIP3-ADB 11-CW-ITB-Package 3 on Hybrid Annuity Mode. ||995.00 ||- ||100 ||- |
*Revise bid cost after de-scope of the work.
In case of three subsidiaries viz. Sadbhav Tumkur Highway Private Limited SadbhavBhimasar Bhuj Highway Private Limited and Sadbhav Vizag Expressway Private Limitedconcession agreements with NHAI ceased to exist anymore and is treated as terminated withmutual consent
BOT Projects Partial Implementation:
|Name of the Company ||Details of Project ||Cost of the Project ||Status as on March 31 2020 || |
% Shareholding (Ownership)
| || ||(Rs. in crores) ||Cost incurred (Including Mobilisation and Material Advances) ( Rs. in crores) ||SEL ||SIPL |
|Maharashtra Border Check Post Network Ltd. (MBCPL) ||Modernization and computerization of integrated border check posts at 22(Twenty Two) locations in the State of Maharashtra on Build Operate and Transfer (BOT) Basis. The project is in joint venture between Company & its associates SREI Infrastructure Finance Limited and SREI Sahaj e-village Limited ||1426.37 ||1663.91 ||^0.37 ||99.63 |
SEL: Sadbhav Engineeing Limited
SIPL: Sadbhav Infrastructure Project Limited
Revenue Generating BOT Project:
|Name of the Company ||Details of Project ||Cost of the Project (Rs. in crores) ||Toll Revenue of the F.Y. 2019-20 || |
% Shareholding (Ownership)
| || || ||Rs. ( in crores) ||SEL ||SIPL |
|Ahmedabad Ring Road Infrastructure Ltd. (ARRIL) ||Improvement & Widening to Four Laning of the then 2 Lane Sardar Patel Ring Road Around Ahmedabad City on BOT basis. ||500.80 ||102.80 ||- ||100 |
|Maharashtra Border Check Post Network Ltd. (MBCPL) ||Modernization and computerization of integrated border check posts at 22 (Twenty Two) locations in the State of Maharashtra on Build Operate and Transfer (BOT) Basis. Toll collection has been started in 13 out of 22 Check Posts. ||1426.37 ||216.83 ||^0.37 ||99.63 |
|Rohtak-Panipat Tollway Pvt. Ltd. (RPTPL) ||Four laning of Rohtak to Panipat Section of NH-71A from k.m. 0.000 km 63.30 of NH-10 to km 80.858 km 83.50 of NH-1 in the state of Haryana (80.85 Kms) on BOT basis under NHDP phase-III ||1240.10 ||86.77 ||- ||100 |
|Rohtak-Hissar Tollway Pvt. Ltd. (RHTPL) ||The project consists of "4 - Laning of Rohtak to Hissar Section of NH-10 from Km 87.000 to km 170.000 including connecting link from km 87.000 (NH-10) to km 348.000 (NH-71) to be executed as BOT (Toll) project on DBFOT pattern under NHDP Phase III in the state of Haryana (Length 98.810 Km). ||1270.96 ||71.51 || ||100 |
During the year there was no change in total equity share capital of Rs.171570800/- (Face Value of Re. 1/- each).
The Company had earlier raised an amount of Rs. 388 Crores by way of issue ofNon-Convertible Debentures on private placement basis. The said Non-Convertible Debenturesare listed on the BSE Ltd. During the year 2019-2020 the Company has redeemed Rs. 48.00Crores of Non-Convertible Debentures (NCDs) on 27-11-2019 and Rs. 190.00 Crores ofNon-Convertible Debentures (NCDs) on 13-03-2020. The aggregate Non-Convertible DebenturesOutstanding amounts to Rs. 150 crores as on 31st March 2020.
Rating agency Credit Analysis & Research Ltd. (CARE) has assigned CARE A2+ (A TwoPlus) to Short Term Facilities / Commercial Papers and CARE A- (A Minus) to additionalLong-term facilities and Non- Convertible Debentures.
Subsidiaries Joint Ventures and Associates Companies
During the year the following Companies has become/ceased to be company'ssubsidiaries joint ventures or associate company.
|Sr. No. Name of the Subsidiary/ Joint ventures/associate Company ||Period of becoming company's subsidiaries joint ventures or associate company. ||Period of ceasing to company's subsidiaries joint ventures or associate company. ||Remarks if any |
|1 Aurangabad-Jalna Tollway Limited (AJTWL) ||- ||06-03-2020 ||Due to Asset Sale. |
|2 Bijapur-Hungund Tollway Private Ltd. (BHTPL) ||- ||13-02-2020 ||Due to Asset Sale. |
|3 Bhilwara- Rajsamand Tollway Pvt. Ltd. (BRTPL) ||- ||14-02-2020 ||Due to Asset Sale. |
|4 Hyderabad-Yadgiri Tollway Private Ltd. (HYTPL) ||- ||13-02-2020 ||Due to Asset Sale. |
|5 Shreenathji- Udaipur Tollway Private Limited (SUTPL) ||- ||14-02-2020 ||Due to Asset Sale. |
|6 Nagpur-Seoni Expressway Ltd. (NSEL) ||- ||13-02-2020 ||Due to Asset Sale. |
|7 Dhule-Palesner Tollway Ltd. (DPTL) ||- ||14-02-2020 ||Due to Asset Sale. |
|8 Mysore-Bellary Highway Private Limited ||- ||18-03-2020 ||Due to Asset Sale. |
During the year under review Sadbhav Infrastructure Project Limited (SIPL) asubsidiary of Sadbhav Engineering Limited has entered into a share purchase agreementdated July 1 2019 with inter alia IDBI Trusteeship Services Limited and LTIDPL INDVITServices Limited acting in their capacities as the trustee and investment manager ofIndInfravit Trust an irrevocable trust set-up under the relevant provisions of the IndianTrusts Act 1882 and registered with the Securities and Exchange Board of India as aninfrastructure investment trust under the relevant provisions of the InvIT Regulations(the "Trust") respectively and the Company (the "SIPL SPA"). Interms of the SIPL SPA subject to the terms and conditions therein and that uponachievement of closing under the SIPL SPA SIPL has transferred its entire holding in theabove 8 SPVs namely Bijapur Hungund Tollway Private Limited Aurangabad Jalna TollwayLimited Hyderabad Yadgiri Tollway Private Limited Dhule Palesner Tollway Limited NagpurSeoni Expressway Limited Shreenathji Udaipur Tollway Private Limited Bhilwara RajsamandTollway Private Limited and Mysore Bellary Highway Private Limited (MBHPL) a subsidiaryof the Sadbhav Engineering Limited to IndInfravit Trust during the year and the Trust nowholds 100% (hundred percent) of the total issued subscribed and paid-up share capital ofthe above 8 SPVs on a fully diluted basis as on date of this report.
For Ahmedabad Ring Road Infrastructure Project Limited (ARRIL) regulatory approvalshave been applied for and will be closed when the change in ownership approval isreceived.
The Company has raise its stake in Sadbhav Infrastructure Project Limited("Subsidiary Company") from 243213577 equity shares (69.05%) to 245516990equity shares (69.70%).
Pursuant to Section 134 of the Companies Act 2013 and Rule 8(1) of the Companies(Accounts) Rules 2014 the report on performance and financial position of subsidiariesassociates and joint venture companies is attached as Annexure in Form AOC- 1 preparedunder section 129(3) of the Companies Act 2013 to the consolidated Financial Statementsof the Company which forms part of this report.
Consolidated Financial Statements
In compliance with the applicable provisions of Companies Act 2013 including theIndian Accounting Standard (Ind AS)-33 on Consolidated Financial Statements this AnnualReport also includes Consolidated Financial Statements for the financial year 2019-20.
Board of Directors and Key Managerial Personnel
Retirement by Rotation
Mr. Shashin V. Patel is the director liable to retire by rotation at the ensuingAnnual General Meeting and being eligible offer himself for reappointment. The directorsrecommend his reappointment.
Criteria of independence as mentioned under Section 149 (6) of the Companies Act 2013
The terms and conditions of appointment of Independent Directors are in accordance withthe applicable Regulations of the SEBI (Listing Obligations and Disclosure Regulations)Regulations 2015 and also as per the provisions of the Companies Act 2013 (Act) readwith Schedule IV to the Act.
Your Company has received declaration from all the independent Directors of the Companyas required under Sec. 149(7) confirming that they meet with the criteria of independenceprovided in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and there has been nochange in the circumstances which may affect their status as Independent Director duringthe year.
Appointment of Directors
The Board on recommendation of Nomination & Remuneration Committee and subject toapproval of members in ensuing Annual General Meeting appointed/reappointed thefollowings:
1. To reappoint Mr. Nitin R. Patel as a Whole-time Director Designated as an ExecutiveDirector of the Company for further period of Three Years.
2. To reappoint Mrs. Purvi S. Parikh as an Independent Director of the Company for asecond term of 5 (five) consecutive years for a term up to the conclusion of the 36thAnnual General Meeting of the Company in the calendar year 2025
3. Pursuant to the provision of Section 161(1) of the Companies Act 2013 and theArticles of Association of the Company Dr. Tarang M. Desai (DIN No. 00005100). wasappointed as Additional Director designated as an Independent Director and he shall holdoffice upto the date of ensuring Annual General Meeting. The Board recommend hisappointment in the ensuing Annual General Meeting.
Change in Directors and KMPs
Mr. Mirat N. Bhadlawala Independent Director resigned from the Company on January 052020. Appointment of Dr. Tarang M. Desai as Additional Director of the Company w.e.f.February 14 2020. During the year 2019-20 there was no change in KMPs.
During the year 2020-21 and upto the approval of Director's Report following changesmade in Directors and KMPs.
1. Resignation of Mr. Shashin V. Patel from the post of Chairman and Managing Directorw.e.f. 25-04-2020 and appointed as a Vice-Chairman in the category of Non-ExecutiveDirector in the Company.
2. Resignation of Mr. Vasistha C. Patel from the post of Whole-time Director &Director (Non-Independent Director) w.e.f. 24-04-2020.
3. Appointment of Mr. Vasistha C. Patel as a Chief Executive Officer (CEO) in thecategory of Senior Management Personnel/Key Managerial Personnel w.e.f. 25-04-2020.
4. Resignation of Mr. Vikram R. Patel from the post of Whole-time Director &Director (Non-Independent Director) w.e.f. 24-04-2020.
5. Resignation of Mr. Vipul H. Patel from the post of Whole-time Director &Director (Non-Independent Director) w.e.f. 24-04-2020.
Evaluation of Board Performance
In compliance to the provisions of the Companies Act 2013 and Regulation 27 of SEBI(LODR) Regulations 2015 the annual performance evaluation of Board and its Committee wascarried out during the year under review. More details on the same are given in theCorporate Governance Report.
The Audit Committee comprises Directors namely Mr. Sandip V. Patel (Chairman) Mr.Nitin R. Patel Mr. Arun S. Patel and Mrs. Purvi S. Parikh. The composition of the AuditCommittee is in compliance with the requirement of Section 177 of the Companies Act andRegulation 18 of the SEBI (LODR) Regulations 2015.
The Board at meeting held on September 02 2020 was reconstituted Audit Committee byinducting Mrs. Purvi S. Parikh Independent Director as new Member of the Committee inplace of Dr. Tarang M. Desai Independent Director of the Company.
Stakeholder Relationship Committee
The Stakeholder Relationship Committee comprises Directors namely Mr. Arun S. Patel(Chairman) Mr. Sandip V. Patel Mr. Nitin R. Patel and Dr. Tarang M. Desai. Thecomposition of the Stakeholder Relationship Committee is in compliance with therequirement of Section 178 of the Companies Act and Regulation 20 of the SEBI (LODR)Regulations 2015.
The Board at meeting held on September 02 2020 was reconstituted StakeholderRelationship Committee by inducting Dr. Tarang M. Desai Independent Director as newMember of the Committee.
Risk Management Committee
Board constitute Risk Management Committee comprises Directors namely Mr. Shashin V.Patel Mr. Nitin R. Patel and Mr. Sandip V. Patel. More details on the same are given inthe Corporate Governance Report.
Although not mandatory as a measure of good governance the Company has constituted aRisk Management Committee of the Board. The Committee reviews the Company's performanceagainst identified risks formulates strategies towards identifying new and emergent risksthat may materially affect the Company's overall risk exposure and reviews the RiskManagement Policy and structure.
Development and implementation of Risk Management Policy
In accordance with the Regulation 17 of SEBI (LODR) Regulations 2015 the Boardformally adopted steps for framing implementing and monitoring the risk management planfor the Company by way of Risk Management Policy.
Board of Directors of the Company has identified the risks in two categories i.e. (1)Internal and Business Risk and (2) External Risk. The Management has also envisaged theminimization procedure and its perception in respect of each identified risk.
Further the Company identifies risks with its degree and control systems areinstituted to ensure that the risks in business process are mitigated. The Board providesoversight and reviews the Risk Management Policy periodically. In the opinion of the Boardthere has been no identification of elements of risk that may threaten the existence ofthe Company.
Committees of Board
Details of various committees constituted by the Board of Directors as per provisionsof the Listing Regulations and Companies Act 2013 are given in the Corporate GovernanceReport and forms part of this report.
As on date the Nomination and Remuneration Committee comprises Directors namely Mr.Arun S. Patel (Chairman) Mr. Sandip V. Patel and Dr. Tarang M. Desai.
As on date the Corporate Social Responsibility Committee comprises Directors namelyMr. Shashin V. Patel (Chairman) Mr. Nitin R. Patel and Mr. Arun S. Patel.
As on date the Finance and Investment Committee comprises Directors namely Mr. ShashinV. Patel (Chairman) Mr. Nitin R. Patel and Mr. Sandip V. Patel.
Disclosures as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules made thunder and no complaint has beenreceived on sexual harassment during the financial year 2019-20. Further Company hascomplied with the provisions relating to the constitution of Internal Complaint Committeeunder the Sexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal)Act 2013.
The Company periodically conducts sessions for employees across the organization tobuild awareness about the Policy and the provisions of Prevention of Sexual HarassmentAct.
Nomination and Remuneration Policy
The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel and other employees has been provided underCorporate Governance Report. The weblink for the same ishttps://www.sadbhaveng.com/wp-content/uploads/2018/02/Whistle_Blower_Policy-1.pdf
Whistle Blower Policy
The Company has a vigil mechanism named Whistle Blower Policy for directors andemployees to report to the management instances of unethical behavior actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. Thedetails of the said Policy is explained in the Corporate Governance Report and also postedon the website of the Company. The weblink for the same ishttps://www.sadbhaveng.com/wp-content/uploads/2018/02/REMUNERATION-POLICY.pdf
Meetings of Board
During the year Eight (8) Board Meetings were held on May 04 2019 May 30 2019 July01 2019 August 10 2019 August 14 2019 October 19 2019 November 14 2019 andFebruary 14 2020.
Directors' Responsibility Statement
Pursuant to the requirement in section 134(3) (c) of the Companies Act 2013 theDirectors state that:
(a) in the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards had been followed and there are no material departuresfrom the same;
(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 as at March 31 2020 and of the profitand loss of the Company for the year ended on that date;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) that the directors had laid down internal financial controls to be followed by thecompany and that the financial controls are adequate and are operating effectively; and
(f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
M/s. Dhirubhai Shah & Co LLP Chartered Accountants Ahmedabad (Firm RegistrationNo. 102511W/W100298) was appointed as the statutory auditors of the Company to holdoffice for a period of four consecutive years from the conclusion of the 29th AGM of theCompany held on September 27 2018 till the conclusion of the 33rd AGM to be held in theyear 2022. The requirement for the annual ratification of auditor's appointment at the AGMhas been omitted pursuant to Companies (Amendment) Act 2017 notified on May 07 2018.During the year the statutory auditors have confirmed that they satisfy the independencecriteria required under Companies Act 2013 Code of ethics issued by Institute ofChartered Accountants of India.
There are no qualifications reservations or adverse remarks made by Statutory Auditorsin their report for the Financial Year ended on March 31 2020.
Appointment of Joint Statutory Auditors.
As our Subsidiary Company i.e. Sadbhav Infrastructure Project Limited is in theprocess of getting merged with its Holding Company i.e. Sadbhav Engineering Ltd.("Company"). The said merger activity is proposed to be completed during theFinancial Year 2020-21 and hence in this regards the Company is desirous of appointing alarge reputed firm of Chartered Accountants as the Statutory Auditors of the Company. Nowbased on the recommendation of Audit Committee the Board of Directors of the Company haveappointed M/s. Manubhai & Shah LLP Chartered Accountants (Firm Registration Number:106041W/W100136) as a joint Statutory Auditors of the Company commencing from theFinancial Year 2020-21 subject to the approval of the Member of the Company to audit itsfinancial statements along with the existing Statutory Auditors M/s. Dhirubhai Shah &Co. LLP Chartered Accountants (Firm Registration No. 102511W/W100298) M/s. Manubhai& Shah LLP shall hold office for the first term of five years from the conclusion ofthe Thirty First (31st) Annual General Meeting until the conclusion of the Thirty Sixth(36th) Annual General Meeting of the Company.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143other than those which are reported to the central government.
During the year under consideration there was no such instances.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company had appointed M/s. Ravi Kapoor and Associates Practicing CompanySecretaries Ahmedabad to undertake the Secretarial Audit for the financial year 2019-20.The Secretarial Audit Report is annexed herewith as Annexure 1' to thisReport. There are no qualification reservations or adverse remarks made by SecretarialAuditors in their report.
The Company has also filled the Secretarial Compliance Report for the financial yearended March 31 2020 to the Stock Exchnages in relation to compliance of all applicableSEBI Regulations/circulars/ guidelines issued thereunder pursuant to requirement ofRegulation 24A of SEBI (LODR) Regulation 2015. The Secretarial Compliance Report does notcontain any qualification reservation or adverse remark.
The Board had on the recommendation of the Audit Committee appointed M/s RajendraPatel & Associates Cost Accountants Ahmedabad to audit the cost records of theCompany for the financial year 2020-2021 will on a remuneration of Rs. 150000/-p.a. TheCost Audit Report for the year 2019-2020 will filed before the due date with the Ministryof Corporate Affairs. As required under the Act and Rules made thereunder theremuneration payable to the Cost Auditors is required to be placed before the Members in ageneral meeting for ratification. Accordingly a resolution seeking ratification bymembers for the remuneration payable to M/s Rajendra Patel & Associates is included atItem No. 4 of the Notice convening 31st Annual General Meeting.
Compliance with Secretarial Standards
The Company is in compliance with the Secretarial Standards on Meeting of the Board ofDirectors (SS-1) and General Meetings (SS-2) issued by the Institute of CompanySecretaries of India and approved by the Central Government.
As per Regulation 27 of SEBI (LODR) Regulations 2015 a separate section on Corporategovernance practices followed by the Company together with a certificate from theCompany's Statutory Auditor confirming compliance forms an integral part of this Report.
Management Discussion and Analysis (MDA)
MDA for the year under review as stipulated under Regulation 34(2)(e) of SEBI (LODR)Regulations 2015 with the Stock Exchanges is presented in a separate section which formsa part of the Annual Report.
Corporate Social Responsibility
The Annual Report on CSR activities is annexed to this Report. The CSR policy isavailable on thehttps://www.sadbhaveng.com/wp-content/uploads/2018/02/CORPORATE_SOCIAL_RESPONSIBILITY.pdfof the Company. The CSR activities is annexed herewith as
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules isattached as Annexure 3' which forms part of this report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached as Annexure 4' which forms partof this report.
Energy Conservation Technology Absorption and Foreign Exchange Earning and Outgo
The rules regarding conservation of Energy and Technology Absorption are not applicableto the Company. There was no earning and outgo in the foreign currency while expenditurethe particulars of the dividend in foreign currency are given in the notes no. 51 to theStandalone Financial Statements.
Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes no. 558 to the Standalone FinancialStatements.
Contracts and Arrangements with Related Parties
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. Accordingly the disclosure of related party transactions as required under Section134(3)(h) of the Act in Form AOC 2 is not applicable.
The Company in terms of Regulation 23 of SEBI (LODR) Regulations 2015 submits within30 days from the date of publication of its standalone and consolidated financial resultsfor the half year disclosures of related party transactions on a consolidated basis inthe format specified in the relevant accounting standards for annual results to the stockexchanges. The said disclosures can be accessed on the website of the Company atwww.sadbhaveng.com.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: https://www.sadbhaveng.com/wp-content/uploads/2018/02/RELATED_PARTY_TRANSACTIONS1.pdf Your Directors draw attention of the members to notes no.49 to the Standalone Financial Statements which sets out related party disclosures.
Extract of Annual Return
As per MCA Notification dated August 28 2020 the extract of the Annual Return of theCompany as on 31st March 2020 in Form MGT - 9 in accordance with Section 92 (3) of theAct read with Companies (Management and Administration) Rules 2014 is available on thewebsite of the Company at www.sadbhaveng.com
Internal Financial Controls
The Company has designed and implemented a process driven framework for InternalFinancial Controls [IFC] within the meaning of the explanation to section 134[e] of theAct. For the year ended on March 31 2020 the Board is of the opinion that the Companyhas sound IFC commensurate with the size scale and complexity of its business operations.The IFC operates effectively and no material weakness exists. The Company has a process inplace to continuously monitor the same and identify gaps if any and implement new and/or improved controls whenever the effect of such gaps would have a material effect on theCompany's operations.
Business Responsibility Reporting
As per Regulation 34(2)(f) of the Listing Regulations 2015 a separate section onBusiness Responsibility Reporting forms a part of this Annual Report.
During the year under review your Company has not accepted any fixed deposits from thepublic falling under Section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014. Thus as on 31st March 2020 there were no deposits which wereunpaid or unclaimed and due for repayment.
Code for Prevention of Insider Trading
Your Company has adopted a Code of Conduct to regulate monitor and report trading bydesignated persons and their immediate relatives as per the requirements under theSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015.This Code of Conduct also includes code for practices and procedures or fair disclosure ofunpublished price sensitive information which has been made available on the Company'swebsite at www.sadbhaveng.com.
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:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany commission from the Company and not disqualified from receiving any remuneration orcommission from any of subsidiaries of the Company.
5. All properties and insurable interests of the company to the extent required havebeen adequately insured.
6. No significant and material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and the Company's future operations.
The Company maintained healthy cordial and harmonious industrial relations at alllevels. The enthusiasm and unstinting efforts of employees have enabled the Company toremain at the leadership position in the industry and the Management appreciates theemployees of all cadres for their dedicated services to the Company.
Your Directors place on record their gratitude to the Ministry of Corporate AffairsBSE Limited National Stock Exchange of India Limited Securities and Exchanges Board ofIndia Central Government State Governments and Company's Bankers for the assistanceco-operation and encouragement they extended to the Company. Your Directors also wish toplace on record their sincere thanks and appreciation for the continuing support andunstinting efforts of investors vendors supplier sub contractors business associatesand employees in ensuring an excellent all around operational performance.
| ||For and on behalf of the Board of Directors |
|Shashin V. Patel ||Nitin R. Patel |
|Vice- Chairman Non-Executive Director ||Executive Director |
|DIN No. 00048328 ||DIN No. 00466330 |
Place : Ahmedabad
Date : September 02 2020