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Supreme Infrastructure India Ltd.

BSE: 532904 Sector: Engineering
NSE: SUPREMEINF ISIN Code: INE550H01011
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VOLUME 1020
52-Week high 33.35
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Mkt Cap.(Rs cr) 53
Buy Price 0.00
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Supreme Infrastructure India Ltd. (SUPREMEINF) - Director Report

Company director report

To

The Members of

SUPREME INFRASTRUCTURE INDIA LIMITED

Your Directors have pleasure in presenting their 37th Annual Report and the AuditedStatement of Accounts for the year ended 31st March 2020.

1. HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

(H in Crore)

Sl. No. Particulars 31-03-2020 31-03-2019
Income from operation 220.76 555.63
Other income 11.03 24.09
Total Income 231.79 579.72
2 Profit before Interest Depreciation & Tax 9.091 (646.57)
Less: Interest/ Finance Charges 481.45 438.15
Depreciation 18..54 21.03
3 Profit / (Loss) before Exceptional Item and Tax (476.61) (409.26)
Exceptional Item 14.31 696.48
Less: Provision for Tax/ (Credit)
Current Tax 0 2.79
Deferred Tax 0 0
Tax adjustment for earlier years 0 0
4 Profit / (Loss) After Tax (491) (1108.54)

OPERATION AND PERFORMANCE REVIEW

During the year under review the Company's income from operations and margins wereunder stress as compared to the previous year. Total Income during the year was H231.79Crore as compared to H579.72 Crore. in the previous year. The Net loss after Tax was H491Crore as compared to 1108.54 Crore loss in the previous year.

No Material changes and commitments have occurred after the close of the financial yeartill the date of this report which may materially affect the financial position of theCompany.

2. DIVIDEND

In view of the losses incurred and stressed financial resources your Directors do notrecommend any dividend on Equity Shares and Preference Shares for the year under review.Consequently no amount is transferred to reserves for the year ended 31st March 2020.

3. TRANSFER OF UNPAID / UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROECTION FUND(IEPF)

During the year under review the Company has credited H39290 to the InvestorEducation and Protection Fund (IEPF) pursuant to

Section 125 of the Companies Act 2013 read with the Investor Education and ProtectionFund (awareness and protection of investors) Amendment Rules 2014.

4. FINANCE

During the year under review the Company's Financials were under severe stress onaccount of several factors like Covid 19 pandemic delay in execution of projects delayin execution of BOT Projects cost over runs on delayed projects high interest costvisa-vis volume of the Company's operation stressed working capital finance and similarfactors peculiar to the infrastructure sector.

RESOLUTION PLAN

During the under review the proposed S4A Scheme in respect of restructuring of debtsof the Company had to be abandoned in view of the RBI Circular dated 12th February 2018regarding "Resolution of Stressed Assets- Revised Framework". Hence it wasdecided to work in terms of the above referred new RBI circular. A revised Resolution Planwas prepared which was sanctioned and signed by the majority of the lenders on 29th March2019. However in the matter of Dharani Sugars and Chemicals Ltd. Vs. Union of India &Others it was held by the Hon. Supreme Court that the RBI circular dated February 122018 on Resolution of Stressed Assets as 'ultra vires and has no effect in law'. Henceall actions taken under the RBI circular dated February 12 2018 on Resolution of StressedAssets were made redundant. Consequently the proposed Resolution Plan made in terms ofRBI circular dated February 12 2018 fell off.

After the Supreme Court Judgement referred above the Reserve Bank of India issued afresh circular dated 7th June 2019 on 'Prudential Framework for Resolution of StressedAssets. The Company is in the process of working on the resolution plan in accordance withthe new RBI circular dated 7th June 2019.

5. CREDIT RATING

Your Company had been assigned "IND D" by India Ratings & Research Pvt.Ltd. for the long term facilities cash credit facilities and non fund based limits of theCompany.

6. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 and implementation requirements of IndianAccounting Standards ('IND-AS') Rules on Accounting and disclosure requirements which isapplicable from current year and as prescribed by Regulation 33 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"SEBI Listing Regulations") the audited Consolidated Financial Statements areprovided in this Annual Report.

Pursuant to Section 129(3) of the Companies Act 2013 a statement containing thesalient features of the financial statements of each of the subsidiary and joint venturein the prescribed form AOC-1 is annexed to this annual report.

Pursuant to Section 136 of the Companies Act 2013 the financial statements of thesubsidiaries are kept for inspection by the shareholders at the Registered Office of theCompany. The said financial statements of the subsidiaries are also available on thewebsite of the Company www.supremeinfra.com under the Investors Section.

7. DETAILS OF SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATES COMPANIES

As on 31st March 2020 the Company had fifteen Subsidiaries (Direct & Indirect) ofwhich thirteen are incorporated and based in India & one Overseas. The Company alsohad one Associate Companies as on 31st March 2020. Some Joint Venture Projects havebecome non operative on account of the completion of the projects.

The Company has adopted a policy for determining material subsidiaries in terms of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. The said policy is available on the Company's website. A statementcontaining the salient features of the financial statements of the subsidiary companies isattached to the financial statements in Form AOC-1.

SUBSIDIARY COMPANIES

The Company's two Subsidiary Companies viz. Supreme Infrastructure BOT Private Limitedand Supreme Infrastructure BOT Holdings Private Limited undertake various BOT projectsalong with its holding Company. The BOT projects are housed in the Special Purpose VehicleCompany ('SPV Company') incorporated for the purpose.

1. SUPREME INFRASTRUCTURE BOT PRIVATE LIMITED ( SIBPL)

As per the Audited financials for year ended 31st March 2020

SIBPL registered a total income of HNil as against H179.37 Lakh in the previous year.SIBPL has the following operative subsidiary companies:

i. SUPREME MANOR WADA BHIWANDI INFRASTRUCTURE PRIVATE LIMITED ( SMBIPL)

Incorporated as SPV Company for execution of the Project of 'widening of Manor- Wada(24.25 Kms) and Wada Bhiwandi Road (40.07 Kms) on SH-34 and SH-35 respectively in theState of Maharashtra and to convert it into a 4 lane highway on BOT basis. The totallength of the project aggregates to 64.32 Kms. The Concession period of the project is 28years and 6 months from the date of work order. EPC work is executed by the SupremeInfrastructure India Ltd. The Company commenced tolling operations for this project on 4thMarch 2013. The Company is also in the process of executing additional bypass road fromSH-35 at Vishwabharati Phata-Bhinar-Vadpa Junction (KM 0/000 to 7/900 (Total Length - 7.90km) Dist. Thane Maharashtra on BOT (Toll) basis. Once completed the bypass road wouldattract more road traffic for the main road project. Income from toll collection for theyear ended 31st March 2020 was H2267.82 Lakh as compared to H3980.06 Lakh in theprevious year.

The lenders had invoked Strategic Debt Restructuring (SDR) with reference date of 24November 2016. The joint lender's forum (JLF) of SMBIPL agreed to proceed with theimplementation of SDR scheme by invoking pledged equity shares of the promoters in theirfavour. Pursuant to the invocation of SDR the lenders have invoked 5100 equity shares ofH10 each held by its Promotors at par aggregating H0.51 Lakh on 16 May 2017 representing51% of the equity share capital of the Company by conversion of outstanding borrowings ofan equivalent amount. And Total Income from toll collection for the year ended 31st March2020 was H2267.82 Lakh as compared to H3980.06 Lakh in the previous year.

ii. PATIALA NABHA INFRA PROJECTS PRIVATE LIMITED

Incorporated as SPV Company for execution of 'Patiala Nabha Malerkotla (PNM) RoadProject. This partially completed project was awarded by Punjab Industrial DevelopmentBoard (PIDB) taken over from the earlier owner. The Company commenced tolling operationson 24th June 2012. The concession period is 13 years. The total length of the road isapproximately 56 kms. Income from toll collection for the year ended 31 st March 2020 wasH587.20 Lakh as compared to H1022.41 Lakh in the previous year.

iii. SUPREME SUYOG FUNICULAR ROPEWAYS PRIVATE LIMITED

Incorporated as SPV Company for execution of the Project for construction of funicularrailway system at Haji Malang Gad Ambarnath in Thane District Maharashtra on BuiltOperate and Transfer (BOT) basis. SIBPL is the majority stakeholder in the SPV Company.The project envisages a funicular trolley system for transporting devotees and luggagefrom the foot of the hill to Haji Malang Durgah and return. The total cost of the projectis H997.30 Million. The concession period is 24 years and 5 months including constructionperiod. Income from this project for the year ended 31st March 2020 was H83.66Lakh ascompared to H214.64 Lakh in the previous year.

iv. SUPREME VASAI BHIWANDI TOLLWAYS PRIVATE LIMITED (SVBTPL)

SVBTPL was incorporated as SPV Company for execution of 4 laning ofChinchoti-Kaman-Anjurphata to Mankoli road (Major SH No. 4) section from km 00.00 to km26.425 of the existing road in the state of Maharashtra on Build-Operate-Transfer (BOT)basis. This partially completed project with existing tolling operations was awarded byPWD Maharashtra taken over from the earlier owner. The total length of the stretch is26.425 kms. SIBPL is the majority stakeholder in the SPV Company. The total concessionperiod is 24.3 years. Income from toll collection for the year ended 31st March 2020 wasH2073.40 Lakh as compared to H2258.90 Lakh in the previous year.

v. KOPARGAON AHMEDNAGAR TOLLWAYS (PHASE I) PRIVATE LIMITED

Public Works Department had awarded the work of construction of four (4) lane of BOTproject viz. "Four Lanning of Kopargaon Ahemdnagar Road SH 10 km 78/200 to120/000(42.60 Kms) and construction of Two Lane Shirdi- Rahata by Bypass (23.30 Kms)(Project I). The project has been executed and the tolling collection started. Income fromtoll collection for the year ended 31st March 2020 was H2454.94 Lakh as compared toH2663.36 Lakh in the previous year.

And Further to note that Mr. Udayraj Patwardhan has been appointed as a ResolutionProfessional by Hon'ble NCLT Chandigarh Bench by order bearing no. CP(I.B.)- 167/Chd/Hry/2018 and CA 1101/2019 dated November 26 2019.

vi. KOTKAPURA MUKTSAR TOLLWAYS PRIVATE LIMITED (KMTPL)

KMTPL incorporated for execution of "Two laning From km 0+000 to km 29+996(approximately 30.000 km) on the Kotkapura Muktsar Road of State Highway No. 16(hereinafter called the "SH -16") in the State of Punjab" on design buildfinance operate and transfer ("DBFOT") basis. SIBPL is the majority stakeholderin the SPV Company. The concession period is 18 years including construction period. Thestarting point of the project corridor is Kotkapura. The project has been executed and thetolling collection started during the current year. Income from toll collection for theyear ended 31st March 2020 was H1049.12 Lakh as compared to H628.28 Lakh in the previousyear.

2. SUPREME INFRASTRUCTURE BOT HOLDINGS PRIVATE LIMITED (SIBHPL)

SIBHPL was incorporated during the year 2011-12 and is the subsidiary of SupremeInfrastructure India Ltd. 3i India Infrastructure Fund an investment fund established byinternational investor 3i Group plc has through its affiliates viz. Strategic RoadInvestments Limited invested H2000 Million in SIBHPL. As per the Audited financials ofthe Company for year ended 31st March 2020 SIBHPL registered a total income of HNil asagainst 15.31 Lakh in the previous year. SIBHPL has road BOT portfolio housed in thefollowing subsidiaries companies:

i. Supreme Kopargaon Ahmednagar Tollways Private Limited

This partially completed project was awarded by Maharashtra PWD taken over from theearlier owner. The Company commenced tolling operations for this project on September 262011. The concession period of the project is up to May 2019. EPC work is executed bySupreme Infrastructure India Ltd. This was the first road BOT project of the Company wheretoll operations were commenced. Income from toll collection for the year ended 31st March2020 was HNil as compared to H2217.91 Lakh in the previous year.

ii. Supreme Best Value Kolhapur (Shiroli) Sangli Tollways Pvt. Ltd.

Incorporated as SPV Company for execution of the project of 'construction operationmaintenance and augmentation of widening of 2-lane undivided carriage way to 4 lanesbetween Shiroli and Baswankhind Ankali to Miraj Phata on SH - 3 Miraj Phata to Sangli onSH -75 and strengthening of existing 2 lanes between Baswankhind and Ankali one way viaJainapur and the other way via Jaisingpur (SH -3) on Design Build Finance Operate andTransfer (DBFOT) toll basis' in the State of Maharashtra. The estimated cost of project isH3840 Million. Total envisaged length for 4 laning is 25.66 Kms. & 2 laning is 26.95Kms. The concession period of the project is 22 years and 9 months including constructionperiod.

iii. Supreme Ahmednagar Karmala Tembhurni Tollways Pvt. Ltd. (SAKTTPL)

Incorporated as SPV Company for execution of the project of "Construction of FourLaning of 61.71 kms. of roads at Ahmednagar-Karmala-Tembhurni ch.80/600 to ch.140/080 inthe State of Maharashtra on Build Operate and Transfer ( BOT ) basis. The cost of theproject is H6382 Million. The concession period of the project is 22 years and 9 monthsincluding construction period.

The lenders of SAKTTPL had invoked SDR with reference date of 24 October 2016. The JLFof SAKTTPL in its meeting held on 11 May 2017 agreed to proceed with the implementation ofSDR scheme. Pursuant to the invocation of SDR scheme the lenders have been allotted291429 equity shares of H10 each at par aggregating H29.14 Lakh on 22 May 2017representing 51% of the equity share capital of SAKTTPL by conversion of outstandingborrowings of an equivalent amount.

2. SUPREME PANVEL INDAPUR TOLLWAYS PRIVATE LIMITED (SPITPL)

Incorporated as SPV Company for execution of the Project of 'Panvel - Indapur sectionof NH-17 from Km.0.00 to Km.84.00' in the State of Maharashtra by widening the existing2-lane dual carriageway to a 4-lane dual carriageway on BOT basis at an estimated cost ofproject of H12060 Million. Supreme Infrastructure India Limited (SIIL) holds 26% and itssubsidiary SIBPL holds 38% Equity. SPITPL has achieved the desired milestone of NHAIbeing completion of fifty percent of the EPC work as per the independent engineer of NHAI.The balance EPC work is being loan financed by NHAI. The total concession period is 24years including additional extension in the concession period of three years. The projectis under implementation.

3. SUPREME MEGA STRUCTURES PRIVATE LIMITED (SMSPL)

Supreme Infrastructure India Limited holds 60% Equity in SMSPL. SMSPL is carrying outthe business of Rentals of staging scaffolding shuttering steel pipes and structuralfabrication steel fabrication work & job work. Substantial part of the Company'sshuttering and fabrication job is undertaken by Supreme Mega Structures Private Limited.Income from operation for the year ended 31st March 2020 was HNil as compared to H303.59Lakh in the previous year.

4. SUPREME INFRASTRUCTURE OVERSEAS LLC

With a view to tap the potential of overseas opportunities Supreme InfrastructureIndia Limited incorporated a subsidiary Company viz. Supreme Infrastructure Overseas LLCin Sultanate of Oman by investing H21.2 Million for a 60% Equity stake in the saidCompany. The rest 40% Equity is held by Ajit Khimji Group LLC & AL Barami InvestmentLLC.

8. DEPOSITS

During the year under review your Company has not accepted any deposit from the publicor its employees during the year under review. As such no amount of Principal or Interestis outstanding as on the Balance Sheet date.

9. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Detailed information on CSR Policy developed and implemented by the Company and CSRinitiatives taken during the year pursuant to Sections 134 & 135 of the Companies Act2013 is given in the 'Annexure-I' as CSR Report.

10. ENVIRONMENT & SAFETY

The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all applicable compliances of environmental regulations and preservationof natural resources.

Your Directors further state that during the year under review no complaints werereported to the Board as required by the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tasted and no reportablematerial weaknesses in the operations were observed.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS

During the year under review Mrs. Nilima Mansukhani independent Director (WomenDirector) resigned from the Board citing her preoccupation and personal reason. The Boardwishes to place on record its deep sense of appreciation for the valuable contributionsmade by her to the Board and the Company during his tenure as Director.

Mr. Bhawanishankar Sharma appointed as Non-executive Chairman of the Company for theperiod of 5 years w.e.f 1st April 2020. Further In accordance with the provisions of theCompanies Act 2013 and in terms of the Articles of Association of the Company Mr. VikramSharma (DIN 01249904) re-appointing in the forthcoming Annual General Meeting and beingeligible offers themselves for reappointment as Managing Director of the company.

Mr. Dakshendra Brijballabh Agrawal (DIN 01010363) appointed as an Independent Directorof the Company whose term shall not be subject to retirement by rotation and continue toact as an independent director for a first term of five consecutive years up to March2025 subject to approval by shareholders.

It is proposed the continuation of reappointment of Mr. S. K Mishra as non - retiringindependent for a second term up to March 31 2025 subject to approval by shareholders.

The Company has received declarations from the Independent Directors confirming thatthey meet the criteria of independence as prescribed both under Section 149 (6) of theCompanies Act 2013 and Regulation 16(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and that there is no change in their status ofIndependence.

KEY MANAGERIAL PERSONNEL

During the year under review Mr. Sandeep Khandewal Chief Financial Officer (CFO) ofthe Company resigned citing his decision to move on and desire for seeking newprofessional opportunities. The Board wishes to place on record its deep sense ofappreciation for the valuable contributions made by him to the Company during his tenureas a CFO.

During the year under review Mr. Pankaj Sharma appointed as a Chief Executive Officer(CEO) of the company in the duly held board meeting dated 17th September 2020.

The Company has designated Mr. Bhawanishankar Sharma NonExecutive Chairman Mr. VikramSharma Managing Director and Mr. Vijay Joshi Company Secretary as Key 'ManagerialPersonnel' of the Company in terms Section 203 of the Companies Act 2013 read withSection 2(51) of the said Act.

Familiarisation Program for the Independent Directors

In compliance with the requirement of Listing Regulations the Company has put in placea Familiarisation Program for the independent directors to familiarize them with theirrole rights and responsibility as directors the working of the Company nature of theindustry in which the Company operates business model etc. The details of theFamiliarisation Program are explained in the Corporate Governance Report. The said detailsare also available on the website of the Company www.supremeinfra.com.

A. BOARD EVALUATION

Pursuant to the provisions of Section 134(3)(p) 149(8) and Schedule IV of theCompanies Act 2013 and Regulation of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 annual performance evaluation of the Directors as well asthat of the Audit Committee Nomination and Remuneration Committee and Stakeholders'Relationship Committee has been carried out. The performance evaluation of the IndependentDirectors was carried out by the entire Board and the performance evaluation of theChairman and Non-Independent Directors was carried out by the Independent Directors.

B. REMUNERATION POLICY

The Company has adopted a remuneration policy for the Directors Key ManagerialPersonnel and other employees pursuant to the provisions of the Act and Regulation of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The remunerationpolicy is annexed as Annexure II to this Report.

C. MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year five Board Meetings and five Audit Committee Meetings were convened and held thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe meetings was within the period prescribed under the Companies Act 2013.

13. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013 that the Board of Directors have:

a. in the preparations of the annual accounts for the year ended March 31 2020 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

b. selected such accounting policies as mentioned in the annual accounts and appliedthem consistently and judgement and estimates have been made that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at31st March 2020 and of the loss of the Company for the year ended on that date;

c. taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d. prepared the annual accounts on a going concern basis;

e. laid down internal financial controls to be followed by the Company and that suchfinancial controls are adequate and were operating effectively; and devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.

f. devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.

14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT2013

Details of loans guarantees and investments covered under the provisions of Sections186 of the Companies Act 2013 are given in notes to the financial statements.

15. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. During the year theCompany has not entered into any contract/ arrangement/ transaction with related partieswhich could be considered material in accordance with the policy of the Company onmaterially of related party transactions. Thus the disclosure in 'Form AOC-2' is notapplicable.

All Related Party Transactions are placed before the Audit Committee as also the Boardof Directors for approval. Prior omnibus approval of Audit Committee and the Board ofDirectors is obtained on an annual basis for the transactions which are foreseen and ofrepetitive nature. The transactions entered into pursuant to the omnibus approval sogranted are audited and a statement giving details of all related party transactions isplaced before the Audit Committee and the Board of Directors for their approval on aquarterly basis.

The Company has a Related Party Transactions Policy duly approved by the Board and thesame is uploaded on the Company's website. The details of Related Party Transactions aregiven in the notes to the financial statements.

16. AUDITORS

A. STATUTORY AUDITORS AND THEIR REPORT

M/s Ramanand & Associates Chartered Accountants the Statutory

Auditors holds office upto the date of ensuing Annual General Meeting (AGM) Andappointment of M/s. Borkar & Muzumdar Chartered Accountants (Firm Registration No.101569W) as statutory auditors of the Company. The Company has received letter from M/sBorkar & Muzumdar Chartered Accountants to the effect that their appointment ifmade would be within the prescribed limit under Section 141 of the Companies Act 2013.It is proposed to appoint M/s Borkar & Muzumdar Chartered Accountants as statutoryAuditor to hold the office from the conclusion of the ensuing AGM of the Company to beheld in the year 2021 subject to approval by shareholders. Members are requested toappoint the Statutory Auditors and to authorise the Board of Directors fix theirremuneration.

B. EXPLANATION TO THE QUALIFICATION IN AUDITORS' REPORT

The Directors submit their explanation to the qualifications made by the Auditors intheir report for the year 2019-2020. The relevant Para nos. of the report and reply are asunder:

Auditor's Qualification and Management's Reply on standalone financial results:

i. As stated in Note 11.3 to the accompanying standalone financial statement theCompany's current financial assets as at 31 March 2020 include trade receivablesaggregating H45680.90 Lakh (31 March 2019: H45680.90 Lakh) in respect of projects whichwere closed/substantially closed and where the receivables have been outstanding for asubstantial period. Management has assessed that no adjustments are required to thecarrying value of the aforesaid balances which is not in accordance with the requirementsof Ind AS 109 'Financial Instruments'. Consequently in the absence of sufficientappropriate evidence to support the management's contention of recoverability of thesebalances we are unable to comment upon the adjustments if any that are required to thecarrying value of the aforesaid balances and consequential impact if any on theaccompanying standalone financial statement. Our opinion on the standalone financialstatement for the year ended 31 March 2019 was also modified in respect of this matter.

ii. As stated in Note 18.2 to the accompanying standalone financial statements theCompany's non-current borrowings short-term borrowings and other current financialliabilities as at 31 March 2019 include balances aggregating Nil (31 March 2018: H9324.24Lakh) Nil (31 March 2018: H294.21 Lakh) and H11925.03 Lakh (31 March 2018: H11510.27Lakh) respectively in respect of which confirmations/statements from the respectivelenders have not been received. These borrowings have been classified into current andnon-current basis the original maturity terms stated in the agreements which is not inaccordance with the terms of the agreements in the event of defaults in repayment ofborrowings. Further whilst we have been able to perform alternate procedures with respectto certain balances in the absence of confirmations/ statements from the lenders we areunable to comment on the adjustments if any that may be required to the carrying valueof these balances on account of changes if any to the terms and conditions of thetransactions and consequential impact on the accompanying standalone financialstatements. Our audit opinion on the standalone financial statements for the year ended 31March 2018 was also modified in respect of this matter. (TO BE DELETED AS THEQUALIFICATION IS REMOVED)

iii. As stated in Note 4.4 to the accompanying standalone financial statements theCompany's non-current investments as at 31 March 2020 include non-current investments inone of its subsidiary aggregating H142556.83 Lakh. The subsidiary has significantaccumulated losses and its consolidated net-worth is fully eroded. Further the subsidiaryis facing liquidity constraints due to which it may not be able to realise projections asper the approved business plans. Based on the valuation report of an independent valuer asat 31 March 2019 and other factors described in the aforementioned note Management hasconsidered such balance as fully recoverable Management has assessed that no adjustmentsare required to the carrying value of the aforesaid balances which is not in accordancewith the requirements of Ind AS 109 'Financial Instruments'. In the absence of sufficientappropriate evidence to support the management's assessment as above and other relevantalternate evidence we are unable to comment upon adjustments if any that may berequired to the carrying values of these non-current investments and aforementioned duesand the consequential impact on the accompanying standalone financial statements.

iv. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ('ICAI') together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Material Uncertainty Related to Going Concern

v. We draw attention to Note 37 to the accompanying standalone financial statementswhich indicates that the Company has incurred a net loss of H49100.25 Lakh during theyear ended 31 March 2020 and as of that date; the Company's accumulated losses amounts toH177690.20 Lakh which have resulted in a full erosion of net worth of the Company and itscurrent liabilities exceeded its current assets by H323242.74 Lakh. Further as disclosedin Note 37 to the said financial statements there have been delays in repayment ofprincipal and interest in respect of borrowings during the current year. The abovefactors along with other matters as set forth in the aforesaid note indicate that amaterial uncertainty exists that may cast significant doubt on the Company's ability tocontinue as a going concern. However based on ongoing discussion with the lenders forrestructuring of the loans revised business plans equity infusion by the promoters andother mitigating factors mentioned in the aforementioned note Management is of the viewthat going concern basis of accounting is appropriate.

Management Reply to the above Auditor's Qualification

(i) Trade receivables as at 31 March 2020 include H45680.90 Lakh

(31 March 2019: H45680.90 Lakh) in respect of projects which wereclosed/substantially closed and which are overdue for a substantial period of time. Basedon the contract terms and the ongoing recovery/ arbitration procedures (which are atvarious stages) Management is reasonably confident of recovering these amounts in full.Accordingly these amounts have been considered as good and recoverable

(ii) Non-current borrowings short-term borrowings and other current financialliabilities as at 31 March 2020 include balances amounting to Nil (31 March 2019: HNil)Nil (31 March 2019: HNil) and Nil (31 March 2019: H11925.03 Lakh) respectively inrespect of which confirmations/statements from the respective lenders have not beenreceived. In the absence of confirmations/ statements from the lenders the Company hasprovided for interest and other penal charges on these borrowings based on the latestcommunication available from the respective lenders at the interest rate specified in theagreement. The Company's management believes that amount payable on settlement will notexceed the liability provided in books in respect of these borrowings. Accordinglyclassification of these borrowings into current and non-current as at 31 March 2020 isbased on the original maturity terms stated in the agreements with the lenders..

(iii) The Company as at 31 March 2020 has non-current investments in SupremeInfrastructure BOT Private Limited ('SIBPL') a subsidiary company amounting toH142556.83 Lakh (31 March 2019: H142556.83 Lakh). SIBPL is having various Build Operateand Transfer (BOT) SPVs under its fold. While SIBPL has incurred losses during its initialyears and have accumulated losses causing the net worth of the entity to be fully erodedas at 31 March 2020 the underlying projects are expected to achieve adequateprofitability on substantial completion of the underlying projects. Further in case ofSupreme Manorwarda Bhiwandi Infrastructure Private Limited ('SMBIPL') a subsidiary ofSIBPL lenders have referred SMBIPL to NCLT under RBI circular dated 12 February 2018 thesaid petetion filed by the bank has been dismissed by Hon'ble NCLT in lieu of thedirections given by Hon'ble Supreme Court of India in case of Dharini Sugars and Ors. v/sUnion of India and Ors. Further commercial operation date (COD) in respect of fewsubsidiaries of SIBPL has been delayed due to various reasons attributable to the clientsprimarily due to non-availability of right of way environmental clearances etc. and inrespect of few subsidiaries the toll receipts is lower as compared to the projectedreceipts on account of delay in receiving compensation from government for exemptedvehicles. Further there have been delays in repayment of principal and interest inrespect of the borrowings and the respective entity is in discussion with their lendersfor the restructuring of the loans.

Management is in discussion with the respective lenders clients for the availabilityof right of way and other required clearances and is confident of resolving the matterwithout any loss to the respective SPVs. Therefore based on certain estimates like futurebusiness plans growth prospects ongoing discussions with the clients and consortiumlenders the valuation report of the independent valuer and other factors Managementbelieves that the net-worth of SIBPL does not represent its true market value and therealizable amount of SIBPL is higher

than the carrying value of the non-current investments as at 31 March 2020 and due towhich these are considered as good and recoverable..

Management is in discussion with the respective lenders clients for the availabilityof right of way and other required clearances and is confident of resolving the matterwithout any loss to the respective SPVs. Therefore based on certain estimates like futurebusiness plans growth prospects ongoing discussions with the clients and consortiumlenders the valuation report of the independent valuer and other factors Managementbelieves that the net-worth of SIBPL does not represent its true market value and therealizable amount of SIBPL is higher than the carrying value of the non-currentinvestments as at 31 March 2020 and due to which these are considered as good andrecoverable.

(iv) Management believes that Company's internal financial controls in respect ofassessment of the recoverability of trade receivables and determining the carrying valueof non-current investments were operating effectively and there is no material weakness insuch controls and procedures.

The Auditor's qualification in respect of Consolidated Financial Statements andManagement Response thereof is in line with the above.

Further the other observations made by the Auditors in their report areself-explanatory and do not call for any further comment. The Notes on financial statementreferred to in the Auditors' Report are self-explanatory and do not call for any furthercomments.

C. COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its Infrastructure activity is required to be audited. Your Directors hadon the recommendation of the Audit Committee appointed M/s. Shashi Ranjan &Associates to audit the cost accounts of the Company for the financial year 2020-2021.Accordingly a Resolution seeking Member's ratification for the appointment andremuneration payable to M/s. Shashi Ranjan & Associates Cost Auditors is included atthe Notice convening the Annual General Meeting.

D. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Nidhi Bajaj & Associates Company Secretary in Practice to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report for the financial year2019-2020 is annexed herewith as 'Annexure III! The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

17. BOARD COMMITTEES

The Board of Directors of your Company had already constituted various Committees incompliance with the provisions of the Companies Act 2013 / SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 viz. Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee.

Details of the role and composition of these Committees including the number ofmeetings held during the financial year and attendance at meetings are provided in theCorporate Governance Section of the Annual Report.

18. VIGIL MECHANISM

The Vigil Mechanism of the Company also incorporates a whistle blower policy in termsof the Listing Regulations. Protected disclosures can be made by a whistle blower throughan e-mail or a letter to the Ombudsperson Task Force or to the Chairman of the AuditCommittee.

19. CORPORATE GOVERNANCE

As per Regulation of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with the Stock Exchanges a separate section on corporate governancepractices followed by the Company together with a certificate from the Practicing CompanySecretary confirming compliance forms an integral part of this Report.

20. MANAGEMENT DISCUSSION AND ANALYSYS

A detailed review of the operations performance and future outlook of the Company andits business is given in the Management Discussion and Analysis appearing as Annexure tothis Report.

21. COMPLIANCE WITH SECRETARIAL STANDARDS

Pursuant to the approval given on April 10 2015 by Central Government to theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings(SS- 2) came into effect from July 1 2015. These secretarial Standards were thereafterrevised and made effective from October 1 2017. The Company is in compliance with thesame.

22. REPORTING OF FRAUD

The Auditors of the Company have not reported any instances of fraud committed againstthe Company by its officers or employees as specified under Section 143(12) of the Act.

23. LISTING

Equity Shares of the Company are listed on the National Stock Exchange of India Limited(NSE) and BSE Limited (BSE). The Company has paid listing fees for the year 2019-2020.

24. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is given hereunder:

A. CONSERVATION OF ENERGY

The Company's main activity is of construction which does not require any utilities.However Power is required for

(a) running the crushing unit

(b) operating the ready mix concrete plant

(c) operating the asphalt plant and

(d) at the various project sites for operating the machinery/equipment and lighting.

The power requirement of manufacturing units are met from local distribution sourcesand from generator sets. The power required at the project sites for operating themachinery/equipment and lighting are met from the regular distribution sources and arearranged by the clients who award the contracts. At the project sites where the powersupply cannot be arranged diesel generator sets are used to meet the requirement ofpower.

The conservation of energy in all possible areas is undertaken as an important means ofachieving cost reduction. Savings in electricity fuel and power consumption receive dueattention of the management on a continuous basis.

B. TECHNOLOGY ABSORPTION ADAPTATION RESEARCH & DEVELOPMENT AND INNOVATION

The Company has not acquired any technology for its manufacturing division. Howeverthe technology adopted and applied is the latest technology available in the Industry andmain thrust has always been put to adapt the latest technology.

In terms of Research and Development it is the Company's constant endeavor to be moreefficient and effective in planning of construction activities for achieving andmaintaining the highest standard of quality.

In view of the above the rules regarding conservation of Energy and TechnologyAbsorption are not applicable to the Company.

C. FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review there was no foreign exchange outgo as also no foreignexchange earnings.

25. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as 'Annexure V'.

26. EMPLOYEE STOCK OPTION SCHEME

With an objective of participation by the employees in the ownership of the Companythrough share based compensation scheme/ plan your company has implemented ESOS Schemeafter having obtained the approval of the shareholders at the Annual General Meeting ofthe Company held on 30th September 2015. However no ESOS have been granted during theyear under review.

27. GENERAL

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

a. Details relating to deposits covered under chapter V of the Act.

b. Neither the Managing Director nor the Whole-time Director of the Company receivesany remuneration or commission from any of its subsidiaries.

c. No significant or material orders in view of the management were passed by theRegulators or Courts or Tribunals which impact the going concern status and Company'soperations in future.

28. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for their continued supportand co-operation by financial institutions banks government authorities and otherstakeholders. Your Directors place on record their sincere appreciation to all employeesof the Company for their unstinted commitment and continued contribution to the Company.

ON BEHALF OF THE BOARD OF DIRECTORS

Sd/-

(VIKRAM SHARMA)

MANAGING DIRECTOR

Place: Mumbai

Date: 06th January 2021

Registered Office:

Supreme House Plot.No.94/C

Opp. LIT. Main Gate Pratap Gad PowaiMumbai- 400 076.

.