The Directors have the pleasure in presenting the Thirtieth Annual Report together withthe audited financial statement for the year ended March 31 2019.
The Company's financial performance for the Year ended on March 31 2019 is summarizedbelow:
| || || |
(Rs. in crores)
| ||Standalone ||Consolidated |
|Particulars ||Current Year ||Previous Year ||Current Year ||Previous Year |
| ||2018-2019 ||2017-2018 ||2018-2019 ||2017-2018 |
|Total Income ||3649.54 ||3594.89 ||5504.62 ||5093.38 |
|Profit before Finance Cost Depreciation & amortization ||528.21 ||504.98 ||1745.56 ||1595.30 |
|Expense and Tax Expense || || || || |
|Less : Finance Cost ||174.92 ||190.80 ||1328.63 ||1312.91 |
|Depreciation and amortization Expense ||95.76 ||97.90 ||392.08 ||358.42 |
|Profit /(Loss) before Exceptional Item and Tax ||257.53 ||216.27 ||24.85 ||(76.04) |
|Exceptional Item (Net of expenses) ||0.76 ||- ||54.22 ||- |
|Profit /(Loss) Before Tax ||258.29 ||216.27 ||79.07 ||(76.04) |
|Less : Tax Expenses ||71.40 ||47.36 ||127.77 ||81.08 |
|Less:-Deferred tax liability /(asset)(Including MAT Credit) ||0.04 ||(51.75) ||5.39 ||(43.10) |
|Profit /(Loss) for the period from continuing Operations ||186.85 ||220.66 ||(54.08) ||(114.02) |
|Add:- Share of Loss Transferred to Minority Interest ||- ||- ||75.20 ||110.94 |
|Net Profit for the period after tax ||186.85 ||220.66 ||21.12 ||(3.08) |
|Balance brought forward from last year ||1005.13 ||799.95 ||(318.26) ||(244.96) |
|Other Comprehensive Income (OCI) ||(0.30) ||0.72 ||(0.45) ||0.85 |
|Amount available for Appropriations ||1191.98 ||1020.61 ||(297.14) ||(248.03) |
|Appropriations || || || || |
|Dividend & Tax paid thereon ||19.66 ||15.49 ||40.82 ||24.01 |
|Adjustment on account of acquisition of non controlling interest ||0.00 ||0.00 ||35.81 ||0.00 |
|Equity Transactions / Share Issue Expenses ||0.00 ||0.00 ||0.36 ||0.00 |
|Transfer to Debenture Redemption Reserves ||24.30 ||0.00 ||60.19 ||46.22 |
|Closing Balance in Retain earnings ||1148.02 ||1005.13 ||(434.32) ||(318.26) |
Directors are pleased to recommend dividend of 100% (1 per equity share of 1 each) forthe financial year ended March 31 2019 (P.Y. 100%) for approval of the shareholders. Thefinal dividend if approved will result in cash payout of 17.16 Crores and dividend taxof 3.53 Crores.
The dividend pay-out is in accordance with the company's dividend distribution policy.
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:http://sadbhaveng.com/wp-content/uploads/2018/02/Dividend_Distribution_Policy_SEL.pdf.There has been no change to the policy during the year 2018-19.
The total revenue during the year under review was 3649.54 Crores against 3594.89Crores for the previous year resulting the Increase of 1.52%. Profit before Finance CostDepreciation & amortization Expense and Tax Expense for the current year is 528.21Crores ( 504.98 Crores in previous year) thereby resulting the increase of 4.60%. NetProfit after tax amounted to 186.55 Crores ( 220.65 Crores in previous year) therebyresulting decrease of 15.32%.
As per the Consolidated Financial Statements the Total Income of the companyoperating profit (PBDIT) and net loss for the year were 5504.62 CroresRs. 1745.56Crores and Rs. 54.08 Crores respectively.
Transfer to Investor Education and Protection Fund
The Company has transferred a sum of 0.23 lakhs to the Investor Education andProtection fund established by the Central Government during the financial year 2018-19in compliance with Section 124 of the Companies Act 2013. The said amount representsunclaimed dividend amount for the financial year 2010-2011which 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 2010-2011.
The Company has not transferred any amount into General Reserve during the period.
Change in the Nature of Business if any
There are no material 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.
The following major works are under execution and the same are progressingsatisfactorily.
| || || || ||(` in crores) |
|Sector ||No. of projects ||Work order ||Work done ||Work on hand |
|Transportation ||40 ||22144.88 ||12786.68 ||9358.20 |
|Irrigation ||20 ||2539.43 ||2095.65 ||443.78 |
|Mining Operation ||10 ||3439.53 ||1260.51 ||2179.02 |
|Total ||70 ||28123.84 ||16142.84 ||11981.00 |
The Company's order book (pending execution) shows work on hand amounting to 11981.00crores as on the March 31 2019.
HAM Projects under Implementation
| || || || ||% Shareholding (Ownership) |
|Name of the Company ||Details of Project ||Cost of the Project ( in crores) ||Status as on March 31 2019 Cost incurred (Including Mobilisation and Material Advances) ( 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 ||493.57 ||- ||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. ||657.00 ||245.01 ||- ||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 ||292.17 ||- ||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 ||503.19 ||- ||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 ||754.25 ||- ||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 ||554.34 ||- ||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 ||463.76 ||- ||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 ||56.00 ||- ||100 |
|Sadbhav Tumkur Highway Pvt. Ltd. (STHPL) ||Four laning of Tumkur Shivamogga section from Km 121+900 (Banwara) to Km 170+415 (Bettadahalli) of NH- 206 on Hybrid Annuity Mode under NHDP Phase-IV in the state of Karnataka. (Package - III). ||1008.00 ||0.12 ||- ||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 ||20.32 ||- ||100 |
|Sadbhav Bhimasar Bhuj Highway Pvt. Ltd. (SBBHPL) ||Upgradation to 4 lane with paved shoulder of Bhimasar Junction of NH-41 to Anjar-Bhuj up to Airport Junction from Ian 0.000 to km 65.478 of NH-341 in the state of Gujarat to be executed on Hybrid Annuity Mode. ||1152.00 ||0.27 ||- ||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 ||- |
BOT Projects Partial Implementation:
|Name of the Company ||Details of Project ||Cost of the Project (Rs. in crores) ||Status as on March 31 2019 Cost incurred (Including Mobilisation and Material Advances) (Rs. in crores) ||% Shareholding (Ownership) |
| || || || ||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. ||1426.37 ||1646.48 ||^2.63 ||97 |
| ||The project is in joint venture between Company & its associates SREI Infrastructure Finance Limited and SREI Sahaj e-village Limited || || || || |
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. 2018-19 (Rs. in crores) ||% Shareholding (Ownership) |
| || || || ||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 ||103.30 ||- ||100 |
|Aurangabad-Jalna Tollway Ltd. (AJTL) ||Providing four laning to Aurangabad Jalna road (Km. 10/400 to 60/200) & Zalta Bypass Km. 0/00 to 2/850 & Beed Bypass Km. 292/500 to 305/650. ||278.49 ||56.34 ||- ||100 |
|Nagpur-Seoni Expressway Ltd. (NSEL) ||Rehabilitation and upgrading to four lane from km. 596/750 to km. 653/225 on NH-7 in the state of Madhya Pradesh under North-South Corridor (NHDP Phase II) on BOT- Annuity basis. ||303.83 ||38.40 ||- ||100 |
|Mysore-Bellary Highway Pvt. Ltd. (MBHPL) ||The DBFOMT (Annuity) project is for the existing State Highway (SH33 & SH3) from Malavalli to Pavagada (Approx length of 193.344 Kms) in the State of Karnataka (WAP-1). ||811.20 ||141.81 ||74 ||- |
|Dhule-Palesner Tollway Ltd. (DPTL) ||Design Engineering Finance Procurement Construction Operation and Maintenance of 4/6 laning of MP/ Maharashtra Border-Dhule section of NH-3 from km 168.500 to km 265.000 (89 Kms) in the State of Maharashtra under NHDP Phase IIIA on BOT (Toll) Basis. ||1420.00 ||191.46 ||- ||100 |
|Bijapur-Hungund Tollway Pvt. Ltd. (BHTPL) ||Four laning of Bijapur-Hungund Section of NH-13 from km 102.000 to km 202.000 (97.22Kms) in the state of Karnataka on Design Build Finance Operate and Transfer ("DBFOT") Toll basis. ||1322.61 ||122.38 ||- ||77 |
|Hyderabad-Yadgiri Tollway Pvt. Ltd. (HYTPL) ||Design Engineering Construction Development Finance Operation and Maintenance of four laning of Hyderabad- Yadgiri Section from km 18.600 to km 54.000 (36.65Kms) of NH-202 in the state of Andhra Pradesh under NHDP Phase-III on DBFOT (Toll) Basis Package No. NHDP-III/ BOT/AP/04. ||506.40 ||77.27 ||- ||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 ||230.44 ||^2.63 ||97 |
|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 ||106.53 ||- ||100 |
|Shreenathji- Udaipur Tollway Pvt. Ltd. (SUTPL) ||Four Laning of Gomati Chauraha - Udaipur section of NH-8 (from Km 177/000 to Km 260/100) in the state of Rajasthan under NHDP Phase IV. ||1151.46 ||120.44 ||- ||100 |
|Bhilwara- Rajsamand Tollway Pvt. Ltd. (BRTPL) ||Four laning of Rajsamand - Bhilwara Section of NH-758 (from km 0.000 to km 87.250) under NHDP Phase IV in the State of Rajasthan on DBFOT (Toll) Basis. ||677.86 ||51.49 ||- ||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 ||64.96 ||- ||100 |
^ By virtue of agreement to be transferred to SIPL.
1. In respect of MBHPL - In accordance with the share purchase agreement datedNovember 03 2014 our company to Sell 74.00% of the outstanding equity interest to SIPL.However said transfer is subject to approval from the Government authority.
Employee Stock Option Scheme
The Company implemented the Sadbhav Employee Stock Option Scheme 2008 (ESOS Scheme2008) and the exercise period was expired in the Year 2017. Therefore no disclosure isrequired under ESOS Scheme 2008 as at March 31 2019.
During the year there was no change in total equity share capital of Rs.171570800/- (Face Value of 1/- each).
The Company raised an amount of 444 Crores by way of issue of Non-ConvertibleDebentures on private placement basis. The said Non-Convertible Debentures are listed onthe BSE Ltd. The Company has redeemed Rs. 56 Crores of Non-Convertible Debentures (NCDs)during the year 2018-19. The aggregate Non-Convertible Debentures Outstanding amounts toRs. 388 crores as on 31st March 2019.
Rating agency Credit Analysis & Research Ltd. (CARE) has assigned CARE A1 (A One)to Short Term Facilities / Commercial Papers and CARE A/Stable (Single A;) 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 ||Sadbhav Kim Expressway Private Limited ||12/04/2018 ||N.A. ||Step-down Subsidiary by virtue of incorporation |
|2 ||Sadbhav Bhimasar Bhuj Highway Private Limited ||13/04/2018 ||N.A. ||Step-down Subsidiary by virtue of incorporation |
|3 ||Sadbhav Vizag Port Road Private Limited ||16/04/2018 ||N.A. ||Step-down Subsidiary by virtue of incorporation |
|4 ||Sadbhav Hybrid Annuity Projects Limited ||26/06/2018 ||N.A. ||Step-down Subsidiary by virtue of incorporation |
|5 ||Sadbhav Gadag Highway Private Limited ||29/06/2018 ||N.A. ||Wholly Owned Subsidiary |
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.
The Company will keep the separate audited financial statements in respect of each ofsubsidiaries at the Corporate Office of the Company and its subsidiaries and make themavailable upon the request by any shareholder of Company. The said financial statementsare also available on the website of your Company at http://www.sadbhaveng.com/investors.The Policy for determining material subsidiaries as approved may be accessed on theCompany's website at the link: http://www.sadbhaveng.com/wp-content/uploads/2018/02/MATERIAL_SUBSIDIARY.pdf.
Sadbhav Infrastructure Project Limited (SIPL) a subsidiary Company has executed sharepurchase agreements ("SPAs") and other ancillary agreements on 1st July 2019inter-alia with IndInfravit Trust ("Indinfravit") an infrastructure investmenttrust for the proposed sale of 100% of the equity shares held by SIPL (including throughits nominees) in 9 subsidiary companies (including MBHPL a subsidiary of SadbhavEngineering Limited and other 8 SPVs is a step-down subsidiaries of Sadbhav EngineeringLimited) at an enterprise value of approximately `.66112 million. The ProposedTransaction is subject to completion of the conditions precedent and other additionalconditions as detailed under the said SPAs. Indinfravit is backed by marquee investorssuch as Canada Pension Plan Investment Board ("CPPIB") Allianz Capital Partners("ACP") and Ontario Municipal Employees Retirement System ("OMERS")together holding ~ 77.7% stake.
Overview of Proposed Transaction
Upon completion of the transaction SIPL will receive Purchase consideration of Rs.25462 million for 9 assets split into listed units (10% of units of IndInfravit) andapprox. Rs. 18962 million in cash. Out of this consideration SIPL shall pay to SELtowards stake sale in MBHPL.
SIPL will also continue for routine maintenance and major maintenance for an amount ofRs. 40787 million for remaining concession period.
SIPL will also get Project Management fees (linked to toll collections) and additionalupside such as from car compensation from ARRIL extension of concession period for AJTLand claims from the transaction assets.
SIPL has entered into a Right of First Offer ("ROFO") agreement withIndinfravit for all existing and future operational assets.
Alongwith completion of the Proposed Transaction SIPL will continue to focus on itscore expertise of development of new roads and it proposes to utilise the sale proceedsfrom the Proposed Transaction for bidding on new road projects injecting equity in thecurrent under-construction projects and to prepay debt.
Note:- The Company will be required to complete the sale of its entire equityshareholding of 73.99% in Mysore-Bellary Highway Private Limited' to SIPL prior toSIPL consummating the Proposed Transaction
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 2018-19.
Board of Directors and Key Managerial Personnel
Retirement by Rotation
Mr. Nitin R. Patel and Mr. Vipul H. Patel are the directors liable to retire byrotation at the ensuing Annual General Meeting and being eligible offer themselves forreappointment. The directors recommend their 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) Regulation 2015 and there has been nochange in the circumstances which may affect their status as Independent Director duringthe year.
The Board on recommendation of Nomination & Remuneration Committee and subject toapproval of members in ensuing Annual General Meeting appointed/reappointed thefollowings:
1. To re-appoint Mr. Vipul H. Patel as Whole-time Director of the Company for 3 (Three)consecutive years from 20/08/2019 to 20/09/2022 under the Companies Act 2013 and SEBI(LODR) 2015.
2. To re-appoint Mr. Mirat N. Bhadlawala as an Independent Director of the Company fora second term of 5 (five) consecutive years for a term up to the conclusion of the 35Annual General Meeting of the Company in the calendar year 2024.
3. To re-appoint Mr. Atul N. Ruparel as an Independent Director of the Company for asecond term of 5 (five) consecutive years for a term up to the conclusion of the 35 AnnualGeneral Meeting of the Company in the calendar year 2024.
4. To re-appoint Mr. Sandip V. Patel as an Independent Director of the Company for asecond term of 5 (five) consecutive years for a term up to the conclusion of the 35 AnnualGeneral Meeting of the Company in the calendar year 2024.
Change in Directors and KMPs
There was no other changes on Directors and KMP during the year 2018-2019.
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. Atul N. Ruparel and Mr. Arun S. Patel. 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.
Risk Management Committee
Pursuant to the amendment made by Securities and Exchange Board of India("SEBI") vide it's notification dated May 09 2018 in Regulation 21(5) of SEBI(Listing Obligations and Disclosures Requirement) Regulations 2015 Board constitute RiskManagement Committee comprises Directors namely Mr. Shashin V. Patel Mr. Vikram R. PatelMr. Vasistha C. Patel and Mr. Nitin R. Patel. More details on the same are given in theCorporate Governance Report.
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.
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 and no complaint has been received onsexual harassment during the financial year 2018-19. Further Company has complied with theprovisions relating to the constitution of Internal Complaint Committee under the SexualHarassment of Woman at Workplace (Prevention Prohibition and Redressal) Act 2013."
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 is:https://www.sadbhaveng.com/wp-content/uploads/2018/02/REMUNERATION-POLICY.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 is:https://www.sadbhaveng.com/wp-content/uploads/2018/02/Whistle_Blower_Policy-1.pdf
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.
Meetings of Board
During the year Five (5) Board Meetings were held on April 24 2018 May 29 2018August 13 2018 November 14 2018 and February 14 2019.
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 2019 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 2019 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.
In line with the requirements of the Companies Act 2013 M/s. Dhirubhai Shah & CoLLP Chartered Accountants Ahmedabad (Firm Registration No. 102511W/W100298) wasappointed as the statutory auditors of the Company to hold office for a period of fourconsecutive years from the conclusion of the 29 AGM of the Company held on September 272018 till the conclusion of the 33 AGM to be held in year 2022. The requirement for theannual ratification of auditor's appointment at the AGM has been omitted pursuant toCompanies (Amendment) Act 2017 notified on May 07 2018.
During the year the statutory auditors have confirmed that they satisfy theindependence criteria required under Companies Act 2013 Code of ethics issued byInstitute of Chartered Accountants of India.
There are no qualifications reservations or adverse remarks made by Statutory Auditorsin their report for the Financial Year ended March 31 2019.
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 2018-19.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 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 2019-20 on a remuneration of 150000/-p.a. The Cost AuditReport for the year 2018-2019 was filed before the due date with the Ministry of CorporateAffairs. As required under the Act and Rules made thereunder the remuneration payable tothe Cost Auditors is required to be placed before the Members in a general meeting forratification. Accordingly a resolution seeking ratification by members for theremuneration payable to M/s Rajendra Patel & Associates is included at Item no. 5 ofthe Notice convening 30 Annual General Meeting.
Compliance with Secretarial Standards
The Company is in compliance with the Secretarial Standards on Meetings 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 Auditors 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 thehttp://sadbhaveng.com/wp-content/uploads/2018/02/CORPORATE_SOCIAL_RESPONSIBILITY.pdf ofthe Company. The CSR activities is annexed herewith as Annexure 2'.
Particulars of Employees and related disclosures
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 3' which forms partof this report.
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 4' which forms part of 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 note no. 54 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. 6 16 & 57 to the StandaloneFinancial Statements.
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. Particulars of contract / arrangement / transaction entered into by the Companywith related parties which could be considered material in accordance with the policy ofthe Company on materiality of related party transactions forms integral part of thisreport in form AOC-2 as per Annexure -5'.
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: http://sadbhaveng.com/wp-content/uploads/2018/02/RELATED_PARTY_ TRANSACTIONS1.pdf.Your Directors draw attention of the members to notes no. 51 to the Standalone FinancialStatements which sets out related party disclosures.
Extract of Annual Return
Extract of Annual Return (Form MGT 9) of the Company is annexed herewith as Annexure6' to this Report.
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 (5) (e) ofthe Act. For the year ended on March 31 2019 the Board is of the opinion that theCompany has sound IFC commensurate with the size scale and complexity of its businessoperations. The IFC operates effectively and no material weakness exists. The Company hasa process in place to continuously monitor the same and identify gaps if any andimplement new and/ or improved controls whenever the effect of such gaps would have amaterial effect on the Company'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.
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 save and except ESOS referred to in this report.
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 Central Governmsent StateGovernments and Company's Bankers for the assistance co-operation and encouragement theyextended to the Company. Your Directors also wish to place on record their sincere thanksand appreciation for the continuing support and unstinting efforts of investors vendorssupplier sub contractors business associates and employees in ensuring an excellent allaround operational performance.
| ||For and on behalf of the Board of Directors |
| ||Shashin V. Patel |
|Place : Ahmedabad ||Chairman & Managing Director |
|Date : August 14 2019 ||DIN: 00048328 |
Annexure - 3
Details under Section197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year 2018-19;
|Name of the Directors ||Designation ||Remuneration of the directors ||Median remuneration of the employees ||Ratio of remuneration of the directors to the median remuneration of the employees |
| || ||(Rs. in Lakhs) ||(Rs. in Lakhs) || |
|Shashin V. Patel ||Chairman & Managing Director ||300.22 ||3.47 ||87:1 |
|Vasistha C. Patel ||Executive Director ||90.00 ||3.47 ||87:1 |
|Vikram R. Patel ||Executive Director ||90.00 ||3.47 ||26:1 |
|Nitin R. Patel ||Executive Director ||84.22 ||3.47 ||24:1 |
|Vipul H. Patel ||Executive Director ||90.22 ||3.47 ||26:1 |
|Sandip V. Patel^ ||Independent Director ||0.60 ||3.47 ||0.17:1 |
|Atul N. Ruparel^ ||Independent Director ||0.45 ||3.47 ||0.13:1 |
|Arun S. Patel^ ||Independent Director ||0.60 ||3.47 ||0.17:1 |
|Mirat N. Bhadlawala^ ||Independent Director ||0.45 ||3.47 ||0.13:1 |
|Purvi S. Parikh^ ||Independent Director ||0.60 ||3.47 ||0.17:1 |
^ Reflects sitting fees.
(ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year2018-19;
|Name of the Directors Chief Financial Officer. Chief Executive Office Company Secretary Manager ||Designation ||Percentage increase in remuneration ||Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company; |
|Shashin V. Patel ||Chairman & Managing Director ||66.59 ||Profit before Tax increased by 19.08% and profit after Tax decreased by 15.32% in financial year 2018-2019 |
|Vasistha C. Patel ||Executive Director ||200.00 || |
|Vikram R. Patel ||Executive Director ||200.00 || |
|Nitin R. Patel ||Executive Director & Chief Financial Officer ||- || |
|Vipul H. Patel ||Executive Director ||198.54 || |
|Sandip V. Patel^ ||Independent Director ||^ || |
|Atul N. Ruparel^ ||Independent Director ||^ || |
|Arun S. Patel^ ||Independent Director ||^ || |
|Mirat N. Bhadlawala^ ||Independent Director ||^ || |
|Purvi S. Parikh^ ||Independent Director ||^ || |
|Tushar D. Shah ||Company Secretary ||10.86 || |
^ Reflects sitting fees based on attendance of Board Meeting.
(iii) The percentage increase in the median remuneration of employees in the financialyear 2018-2019;
The median remuneration of employee in the financial year 2018-19 was 3.47 Lakhs (3.24Lakhs in FY 2017-18). So there was 7.10% increase in median remuneration of employee.
(iv) There were 5307 employees on the rolls of company as on March 31 2019.
(v) Average percentile increased in the salaries of employees other than the managerialpersonnel in the last financial year was
7.50 % whereas the increased in the managerial remuneration for the same financial yearwas 84.59%
(vi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other employees.
Annexure - 4
Statement of particulars of employees pursuant to the provisions of Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) & (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 for the year ended 31st March 2019.
a) Employees who are employed throughout the year and in receipt of remunerationaggregating Rs. 10200000/- or more per annum.
|Name & Qualification ||Age in Years ||Designation ||Date of Employment ||Gross Remuneration p.a. ||Experience (No. of years) ||Last Employment ||% age of equity shares held by employee |
| || || || ||(Rs. in Lakhs) || || || |
|Mr. Shashin V. Patel ||38 Yrs. ||Chairman & Managing Director ||23-05-2000 ||300.22 ||19 years ||None ||3.64 |
|Qualification : MBA || || || || || || || |
|Mr. Amares Kumar ||48 Yrs. ||Chief Executive Officer ||04-04-2017 ||180.22 ||N.A. ||Topworth Group Of Companies ||- |
|Qualification : PG Diploma || || || || || || || |
(b) Employees who are employed part of the year and in receipt of remunerationaggregating Rs. 850000/- or more per month: Nil
1. Remuneration includes Salary Contribution to Provident and other funds andperquisites (including medical leave travel and leave encashment on payment basis andmonetary value of taxable perquisites) etc.
2. All the above said appointment are in the nature of contractual employment.
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
1. Details of contracts or arrangements or transactions not at arm's length basis - NIL
2. Details of material contracts or arrangement or transactions at arm's length basis:
|Name of the Related Party ||Nature of Relationship ||Nature of transactions ||Duration of the contracts/ arrangements/ ||Salient terms of the contracts or arrangements or transactions including the value if any: transactions ||Date(s) of approval by the Board ||Amount Paid / Received in advance |
| || || || ||` In Crore || || |
|1 Sadbhav Infrastructure Project Limited ||Subsidiary ||Facility is repayable by borrower on demand / call notice from lenders (Providing of Financial facilities as per MOU dated 20.12.2014) ||2018-19 ||Rs. 1000 (Facility used Rs. 674.31 crores) ||N.A ||Nil |
|2 Sadbhav Infrastructure Project Limited ||Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|3 Mysore Bellery Highway Private Limited ||Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|4 Rohtak Hisar Tollway (P) Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|5 Ahmedabad Ring Road Infrastructure Project Limited ||Step Down Subsidiary ||Fixed Asset Purchase ||2018-19 ||0.04 ||N.A ||Nil |
|6 Ahmedabad Ring Road Infrastructure Project Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.18 ||N.A ||Nil |
|7 Aurangabad Jalna Tollway Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|8 Dhule Palesner Tollway Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|9 Hyderabad Yadgiri Tollway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|10 Maharashtra Border Check Post Network Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|11 Nagpur Seoni Express Way Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|12 Rohtak Panipat Tollway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|13 Shreenathji Udaipur Tollway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|14 Bhilwara Rajsamand Tollway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|15 Sadbhav Una Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|16 Sadbhav Bhavnagar Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|17 Sadbhav Rudrapur Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|18 Sadbhav Nainital Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|19 Sadbhav Bangalore Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|20 Sadbhav Udaipur Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|21 Sadbhav Vidarbha Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|22 Bijapur Hungund Tollway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A. ||Nil |
|23 Sadbhav Jodhpur Ring Road Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|24 Sadbhav Tumkur Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|25 Sadbhav Bhimasar Bhuj Highway Private Limited ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|26 Sadbhav Vizag Port Road Privat ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|27 Sadbhav Kim Expressway Pvt. Ltd. ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.09 ||N.A ||Nil |
|28 Sadbhav Hybrid Annuity Pvt. Ltd. ||Step Down Subsidiary ||Providing of Services ||2018-19 ||0.06 ||N.A ||Nil |
|29 Corsan-Corviam Construction SA- SEL 43 (1043) ||Joint Venture ||Providing of Services ||2018-19 ||0.006 ||N.A. ||Nil |
All above transaction have been entered in the ordinary course of business and arm'slength basis and approval of board is not required under section 188 of the Companies Act2013.