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Sadbhav Infrastructure Project Ltd. के निदेशक की रिपोर्ट
Mar 31, 2025
Your Directors have pleasure in submitting their 19th Annual Report of the Company together with the Audited Statements of Accounts for the financial year ended on 31st March, 2025.
FINANCIAL RESULTS
The Group''s financial performances for the year under review along with previous year''s figures are given hereunder:
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(Rs. In Million) |
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PARTICULARS |
Standalone |
Consolidated |
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2024-25 2023-24 |
2024-25 2023-24 |
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Revenue from |
Operations |
0.00 225.00 |
7,039.55 7,788.89 |
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Other Income |
116.86 207.02 |
557.56 984.32 |
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Total Revenue |
116.86 432.02 |
7,597.11 8,773.21 |
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Profit Before Taxation |
(1,380.93) (5,622.96) |
(102.22) (5,581.70) |
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Less: Tax Expense |
0.00 (1.83) |
240.34 249.20 |
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Profit/(Loss) for the period after tax and minority interest |
(1,380.93) (5,621.14) |
(342.56) (5,332.50) |
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Other comprehensive income |
(0.11) (2.89) |
(1.27) (4.98) |
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Total comprehensive income (after tax) |
(1,381.04) (5,624.02) |
(343.83) (5,337.48) |
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Directors do not recommend any dividend for the financial year ended on 31st March, 2025.
The Board of Directors of the Company has adopted a Dividend Distribution Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: https://www.sadbhavinfra.co.in/en/pdf/dividend-distribution-policy.pdf
AMOUNT TO BE CARRIED TO RESERVES
The Company transfers entire sum of net loss incurred to Retained Earnings during the year under review.
The paid up Equity Share Capital as at 31st March, 2025 is ^3,52,22,52,160/-. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed. The Nomination and Remuneration Committee of the Board of Directors of the Company at its meeting held on 12th August, 2024 approved Employee Stock Options to the eligible employees of the Company and its Subsidiary Companies and Holding Company under Sadbhav Infrastructure Project Limited Employee Stock Option Plan-2024. The said scheme was subsequently approved by the shareholders at the Annual General Meeting held on September 30, 2024. However, as of March 31, 2025, no stock options have been granted under the said Plan.
The Company has following Non-convertible Debentures (NCDs) as on 31st March, 2025:
1. Series A - 39,000 (Thirty Nine Thousand) Unlisted, Unrated, Secured, Redeemable, Non-convertible Debentures of face value of Rs. 67,408/- (Rupees Sixty Seven Thousand Four Hundred and Eight only) each, aggregating up to Rs. 262,89,12,000/-(Rupees Two Hundred Sixty Two Crores Eighty Nine Lakhs and Twelve Thousand only) ("Debentures") - Series A Debentures have been repaid in full vide payment dated 18-05-2024.
2. Series B - 8120 (Eight Thousand One Hundred Twenty) Unlisted, Unrated, Secured, Redeemable, Non- Convertible Debentures of a face value of Rs. 1,00,000/- (Rupees One Lakh Only) each of an aggregate nominal value of up to Rs. 160,00,00,000/- (One Hundred Sixty Crores Only) ("Debentures")- out of 16,0000 (Sixteen thousand) 7890 (Seven thousand Eight Hundred Ninety) Debentures have been repaid.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
During the year, Company reported at standalone level, the Revenue from Operations amounting to ^0.00 million as against ^225.00 million in the previous year. The Net Loss reported for the year was ^1381.04 million against Net Loss of ^5,624.02 million as per previous year. The Consolidated Revenue from Operations was ^7039.55 million as against ^7789.89 million in the previous year. Your Company has achieved consolidated total income of ^7,597.11 million as against ^8,773.21 million in the previous year.
The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
The Management Discussion and Analysis report, capturing your Company''s performance, industry trends and other material changes with respect to your Company is presented in a separate section forming part of the Annual Report. The Report provides a consolidated perspective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders and includes aspects of reporting as required by Regulation 34(2) (e) read with Schedule V of the Listing Regulations.
Change in the nature of business, if any
There are no material changes in the nature of business during the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitment if any affecting the financial position of the company occurred between the ends of the financial year to which this financial statements relate and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
Risk management comprises all the organizational rules and actions for early identification of risks in the course of doing business and the management of such risks.
Pursuant to the provisions of Regulation 21 of the Listing Regulations, the Company is not required to constitute a Risk Management Committee; however, as a measure of good governance, the Company has constituted a Risk Management Committee of the Board. The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. The Company''s management systems, organizational structures, processes, standards, code of conduct, Internal Control and Internal audit methodologies and processes that governs as to how the Company conducts its business and manages associated risks. The Company also has in place a Risk Management Policy to identify and assess the key risk areas. The Members of the Audit Committee monitors and reviews the implementation of various aspects of the Risk Management Policy. This robust Risk Management framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Company''s competitive advantage. Major risks identified by the Company are systematically addressed through mitigating actions on a continuous basis. The Company has also adopted Risk Assessment, Minimization and Control Procedures. At present no particular risk whose adverse impact may threaten the existence of the Company is visualized.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. It has documented policies and procedures covering financial and operating functions and processes. These policies and procedures are updated from time to time and compliance is monitored by the internal audit function as per the audit plan. The Company continues its efforts to align all its processes and controls with best practices.
Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Board''s Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
i) Changes in Directors and Key Managerial Personnel
There were following changes in the composition of Board and Key Managerial Personnel during the year under review:
1) Mr. Dwigesh Joshi (DIN-09733282) resigned as Director of the Company w.e.f. 08-04-2024.
2) Mrs. Shefali Manojbhai Patel (DIN-07235872) was appointed as an Additional Director of the Company w.e.f. 06-07-2024 by way of circular Resolution.
3) Mr. Ambalal Patel (DIN: 00037870) was appointed as a Non-executive Independent Director of the company w.e.f 30-09-2024.
4) Mr. Tarang Desai (DIN: 00005100) was appointed as a Non-executive Independent Directors of the company w.e.f 12-08-2024 .
5) Mr. Arun Patel tendered his resignation as an Independent Director of the Company w.e.f 21-10-2024
6) Mr. Hardik Modi tendered his resignation from the post of Company Secretary and Compliance Officer of the Company with effect from 12-02-2025.
7) Mrs. Daksha Shah tendered her resignation as an Independent Director of the Company w.e.f 12-02-2025
ii) Declaration by an Independent Director(s)
Independent Directors, hold office for a term of five years. They are not liable to retire by rotation in terms of Section 149(13) of the Act.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, auditing, tax and risk advisory services, financial services, corporate governance, etc. and that they hold highest standards of integrity. The Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.
iii) Procedure for Nomination and Appointment of Directors:
The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director''s appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidate''s vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.
iv) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director:
The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.
Independence: In accordance with the above criteria, a Director will be considered as an ''Independent Director'' if he/she meets with the criteria for ''Independent Director'' as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.
Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the ''Code for Independent Directors'' as outlined in Schedule IV to the Act.
v) Annual Evaluation of Board Performance and Performance of its Committees and of Directors:
Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
The Board''s functioning was evaluated on various aspects, including inter alia structure of the Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissent, recording of minutes and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of management''s performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Executive Chairman.
Directors were evaluated on aspects such as professional qualifications, prior experience, especially experience relevant to the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, independence and guidance/ support to management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including effectiveness of leadership and ability to steer meetings, impartiality, ability to keep shareholders'' interests in mind and effectiveness as Chairman.
Areas on which the Committees of the Board were assessed included mandate and composition; effectiveness of the Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The NRC also reviewed the performance of the Board, its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.
NUMBER OF MEETINGS OF THE BOARD
During the year, seven (7) Board meetings were convened and held on 30th April 2024, 20th May 2024, 12th August 2024, 31st August 2024, 24th October 2024, 12th November 2024 and 12th February, 2025. Details of board meetings and committee meeting are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board had constituted various Board Committees to assist it in discharging its responsibilities. The Board has adopted charters setting forth the roles and responsibilities of each of the Committees. The Board has constituted following Committees to deal with matters and monitor activities falling within the respective terms of reference:
a) Mandatory Committees
⢠Audit Committee
⢠Nomination and Remuneration Committee
⢠Stakeholder''s Relationship Committee
⢠Corporate Social Responsibility Committee
b) Non-Mandatory Committees
⢠Risk Management Committee
⢠Finance and Investment Committee
Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.
NOMINATION AND REMUNERATION POLICY
The Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.
The Nomination and Remuneration Committee has considered following factors while formulating Policy:
i. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
ii. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
iii. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
It is affiirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.
Details of the Remuneration Policy are given in the Corporate Governance Report.
Details of Subsidiary/Joint Ventures/Associate Companies
The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (''Ind AS''), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
The annual financial statements of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information at any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (1) (c) of Listing Regulations. The Policy, as approved by the Board, is uploaded on the Company''s website and the weblink of the same is https://www.sadbhavinfra.co.in/en/investors.html
Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules made thereunder and pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had prepared consolidated financial statements of the Company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 attached as Annexure-1 which forms part of this Report.
Particulars of loans, guarantees or investments under section 186
The provisions of Section 186 (except sub-section [1] of Section 186) of the Companies Act, 2013, with respect to a loan, guarantee or security is not applicable to the Company as the Company is engaged in providing infrastructural facilities. The details of investment made during the year under review are disclosed in the financial statements.
During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31 March 2025, there were no deposits which were unpaid or unclaimed and due for repayment.
All properties and insurable interests of the company to the extent required have been adequately insured.
Particulars of contracts or arrangements with related parties:
All the related party transactions entered into during the financial year were on arm''s length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties, which could be considered material in terms of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act in Form AOC 2 is attached as Annexure-2, which forms part of this Report.
There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons, which may have potential conflict with interest of the company at large. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: https://www.sadbhavinfra.co.in/en/pdf/policv-on-related-partv-transaction.pdf
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2024-25.
Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards had been followed and that there are no material departures;
ii. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
iii. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they had prepared the annual accounts on a going concern basis;
v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
vi. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF).
There is no unclaimed and unpaid dividend transferred to Investor Education and Protection Fund (IEPF) in the current financial year. CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a company''s commitment to operating responsibly within its community and environment. It involves ethical behavior and contributing to economic development, fostering sustainable livelihoods. The company prioritizes fairness, transparency, and positively impacting society and the environment. In line with Section 135 of the Act and its associated rules, the company has formally adopted a CSR policy.
The Board has established a Corporate Social Responsibility Committee, the members of the Committee are as follows:
1. Mrs. Shefali Patel - Chairman (w.e.f. 12.08.2024)
2. Mr. Shashin Patel - Member
3. Mr. Jatin Thakkar - Member (w.e.f. 12.02.2025)
4. Mrs. Daksha Shah - Member (Upto 12.02.2025)
5. Mr. Sandip Patel - Member (Upto 12.08.2024)
The Corporate Social Responsibility meeting was held on 14-08-2024 and 11-02-2025.
The CSR Committee''s responsibilities include:
i. Formulating and recommending the CSR Policy to the Board of Directors and outlining activities to be undertaken.
ii. Recommending the expenditure for CSR activities.
iii. Monitoring CSR activities periodically.
In accordance with section 135 of the Companies Act 2013, the CSR provisions apply to the company. However, due to losses incurred during the year under review, no CSR expenditure was made as per the company''s CSR Policy. The Annual Report on CSR activities is provided in the prescribed Form as "Annexure-3" to this report.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
Pursuant to provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, Complaint Redressal Committee has been Comprises of Mrs. Janki Shah as Chairperson, Mrs. Rajal Patel as Presiding Officer and Ms. Riddhi Trivedi as Member.
The Company has not received any complaint of sexual harassment during the financial year 2024-25 and No meeting of Complaint Redressal Committee was held during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has made compliant under Vigil Mechanism/ Whistle Blower Mechanism.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also uploaded on the Company''s website i.e. https://www.sadbhavinfra.co.in/.
i. Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. S G D G & Associates LLP, Chartered Accountants, Ahmedabad (S G D G) (Firm Registration No. W100188) were re-appointed as Statutory Auditor of the Company from conclusion of the 17th AGM to be held in the year 2023 for further period of 5 consecutive years.
The Auditors'' Report has following qualification, reservation or adverse remark on the financial statements for the financial year ended on 31st March, 2025.
a) Audit Qualification (each audit qualification separately):
The Statutory Auditors have provided following qualification in their audit report -
1. We draw attention to Note 43 and Note 44 to the accompanying Standalone Financial Statements with respect to investment in (including subordinate debt), and loan & advances to Rohtak Panipat Tollway Private Limited and Rohtak Hissar Tollway Private Limited, subsidiaries of the Company. Both the subsidiaries have issued notice of termination of Concession Agreement to National Highways Authority of India (NHAI) on account of Force Majeure Event as per Concession Agreement. As explained
in the said note, the Company has carried out impairment assessment of investment in these subsidiaries considering the expected payment arising out of aforesaid termination and other claims filed with NHAI and based on the above assessment, the management has concluded that no impairment / adjustment to the carrying value of the investments (including subordinate debt) and loan & advances, trade and other receivables aggregating to INR. 8,043.28 million are necessary as at March 31, 2025.
However, we have not been able to corroborate the management''s contention of realising the carrying value of investments (including subordinate debt), loans and advances, trade and other receivables related to both subsidiaries aggregating to INR. 8,043.28 million as at March 31, 2025.
Accordingly, we are unable to comment on appropriateness of the carrying value of such investment and loans and advances and their consequential impact on the Standalone Financial Statements and financial position of the Company as at and for the year ended March 31, 2025.
The Company has investments of INR 217.74 million and subordinate debts of INR 4,688.73 million and trade & other Receivables of INR 87.91 millions as at March 31, 2025 in one of the subsidiary namley Rohtak Panipat Tollway Private Limited (RPTPL) which is engaged in construction, operation and maintenance of infrastructure projects under concession agreement with National Highways Authorities of India(NHAI). The net worth of this subsidiary company has fully eroded.
From December 25, 2020 , the toll collection was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws. Accordingly, the Company was not able to collect toll user fees from December 25, 2020. The Company had sent various communications to authorities for such forceful suspension of toll including revenue loss claim. Accordingly, the Company had issued notice of termination of Concession Agreement to NHAI on July 27, 2021 under Force Majeure Event of Concession Agreement. The Termination Payment and other payments due from NHAI were pending for the long time. The company had attempted conciliation of the issues of the Project for amicable settlement. Due to non-progress of the same, the Company vide letter dated 27.03.2023 had notified the Conciliation Committee and NHAI regarding the failure of the Conciliation Proceedings. The said matters were referred to Arbitration by the Company. The Company has lodged a total claim amounting to INR 19,379.20 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of Farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid19 .The Arbitral proceedings for the same are completed and the Arbitral Award is declared on 23.01.2025 unanimously, except for Counter Claim of NHAI regarding Premium that one Ld. Arbitrator has rejected it completely. As on the date of the said Majority award, the net awarded amount after deducting all dues of NHAI including Premium works out to INR 10,805.45 millions (principal of INR 7,796.31 millions and interest of INR 3,009.14 millions).
The Arbitration matter of Competing Road was referred to Arbitration. In the said matter, the majority award was passed on May 30, 2023 in favour of NHAI setting aside claims of Company and Minority Award dated 05.06.2023 in favour of Company amounting to INR 8509.80 Million. The Company has challenged the Majority Award dated 30.05.2023 and filed a petition under Section 34 of Arbitration & Conciliation Act 1996 before the Hon''ble Delhi High Court to set aside the Majority Award dated 30.05.2023. The same is sub-judice before the Hon''ble High Court.
The dispute of Claim for Additional Cost on account of ban of quarrying of stone and loss of Toll collection due to delayed issuance of Provisional Certificate was referred to Arbitration. A unanimous Award dated 06.10.2017 by Arbitral Tribunal was awarded in favour of Company amounting to INR 890.20 Million (amount inclusive of costs & interest pendente lite). This Award was challenged by NHAI under Section 34 before the Delhi High Court. The Delhi High Court in its Judgment dated 16.02.2023, wherein one claim is set aside (loss of Toll collection) and one claim was upheld (Additional cost on account of ban of quarry of stone) along with pendente life interest and delayed interests, etc. As per Delhi High court in the judgement dated 16.02.2023, the value of award payable by NHAI to RPTPL as on 15.10.2023 works out to INR 1,211.90 millions. NHAI had challenged the said award under Section 37 before Division Bench of Delhi High Court. The said matter is now withdrawn by NHAI.
NHAI had lodged claim on RPTPL on account of negative Finished Road Level (FRL) which was referred to Arbitration. The Majority Award on 31.10.2020 by Tribunal for amount of INR 203.40 Million was in favour of NHAI. The interest on delayed payment is awarded at 7.4% simple interest, as on 15.10.2023 works out to INR 247.90 Million and further interest thereon. The dissenting note by the Minority of the Tribunal had stated to reject the claim of NHAI. The Company had challenged the said Majority Award under Section 34 before the Delhi High Court. The said matter is now withdrawn by RPTPL on account of ongoing Vivad se Vishwas II scheme.
The Arbitration Award dated 06.10.2017 and Arbitration Award dated 31.10.2020 has been settled through Settlement Agreement dated 20.03.2025 under Vivad se Vishwas II Scheme of Govt. of India for the net settlement amount of about INR. 650 millions.
RPTPL has received intimation letter dated April 08, 2024 from National Asset Reconstruction Company Limited (NARCL) intimating that the deed of assignment dated March 22, 2024 under the provisions of Section 5 of the SARFASI Act, the consortium of lenders except one Lender have assigned/ transferred the outstanding debt /financial assets alongwith underline securities interest, pledged of shares, guarantees, receivables etc charge for such financial assistance granted to RPTPL in favour of NARCL and NARCL acting in its capacity as trustee of NARCL Trust.
Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement, the management has assessed that there is no impairment in the carrying value of investments made by the Company in the RPTPL and consequently no provision/adjustment to the carrying value of Investments and subordinate debts, loans and advances and trade and other receivables as at March 31, 2025 is considered necessary.
The statutory auditors of the Company have expressed qualified opinion on the standalone financial statements in respect of above as regards recoverable value of Company''s investment (including subordinate debt) and loans, trade & other receivable given to RPTPL for the year ended March 31, 2025.
The Company has investments of INR 107.68 million and subordinate debts of INR 2,893.42 million and other receivable of INR 47.80 million as at March 31, 2025 in one of its subsidiary namely Rohtak Hissar Tollway Private Limited (RHTPL) which is engaged in construction, operation and maintenance of infrastructure projects under concession agreement with National
Highways Authorities of India. The net worth of this subsidiary company has fully eroded.
From December 25, 2020 , the toll collection was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws. Accordingly, the Company was not able to collect toll user fees from December 25, 2020. The Company had sent various communications to authorities for such forceful suspension of toll including revenue loss claim. Accordingly, the company had issued notice of termination of Concession Agreement to NHAI on July 27, 2021 under Force Majeure Event of Concession Agreement. The Termination Payment and other payments due from NHAI were pending for the long time. The company had attempted conciliation of the issues of the Project for amicable settlement. Due to non-progress of the same, the Company vide letter dated 27.03.2023 had notified the Conciliation Committee and NHAI regarding the failure of the Conciliation Proceedings. The said matters were referred to Arbitration by the Company. The Company has lodged a total claim amounting to INR 19,287.10 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid19. The NHAI had lodged its Counter Claims amounting to INR 3665.80 Million. The Company had submitted its reply on such counter claims. The Arbitral proceedings for the same are currently going on. The current stage of arbitral proceeding is of Arguments which are ongoing
Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement and communications from NHAI for conciliation, the management has assessed that there is no impairment in the carrying value of investments made by the Company in the RHTPL and consequently no provision/adjustment to the carrying value of Investments and subordinate debts and loans and advances as at March 31, 2025 is considered necessary.
RHTPL has received intimation letter dated April 08, 2024 from National Asset Reconstruction Company Limited (NARCL) intimating that the deed of assignment dated March 22, 2024 under the provisions of Section 5 of the SARFASI Act, the consortium of lenders have assigned/ transferred the outstanding debt /financial assets alongwith underline securities interest, pledged of shares, guarantees, receivables etc charge for such financial assistance granted to RHTPL in favour of NARCL and NARCL acting in its capacity as trustee of NARCL Trust.
The statutory auditors of the Company have expressed qualified opinion on the standalone financial statements in respect of above as regards recoverable value of Company''s investment (including subordinate debt) given to and loans & other receivables from RHTPL.
2. We draw attention to Note 45 of the accompanying Standalone Financial Statements with respect to Sadbhav Rudrapur Highway Limited (SRHL), a subsidiary of the Company, in which case, NHAI in the month of January 2024, at the request of the Company has given in principal approval for harmonious substitution of the concessionaire. The Company is in the process of compliance of the conditions prescribed by NHAI for substitution. As explained in the said note, the management has carried out impairment assessment of Investment (including subordinate debt) and other receivables in this subsidiary duly considering the expected payment arising out of aforesaid substitution and based on the above assessment, management has concluded that no impairment / adjustment to the carrying value of Investment (including subordinate debt) and other receivables aggregating to INR. 1,198.03 million is considered necessary as at March 31, 2025.
However, we have not been able to corroborate the management''s contention of realizing the carrying value of Investment (including subordinate debt) and other receivables balances aggregating to INR. 1,198.03 million as at March 31, 2025.
Accordingly, we are unable to comment on appropriateness of the carrying value of Investment (including subordinate debt) and other receivables and their consequential impact on the Standalone Financial Statements and financial position of the Company as at reporting date and for the year ended March 31, 2025.
The Company has investments of INR 10.00 million and subordinate debts of INR 915.60 million and other receivables of INR 272.43 million as at March 31, 2025 in one of its subsidiary namely Sadbhav Rudrapur Highway Limited (SRHL or concessionaire) which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI). There is delay in approval of Estimates for Shifting of Utilities, delay in approval of the GAD of ROB from Railway Department and non-availability of land for Construction of ROBs, delay in approval of Change of Scope Works, delay due to Force Majeure Event of COVID-19, etc.
In this regards subsequent to discussions and deliberation with Authority, the Company has also invoked through Conciliation Committees of Independent Experts (CCIEs) to resolve the said issues. After the recommendation of CCIE committed and deliberate discussion with the SRHL, the NHAI has descope the balance EPC work and consider the completion of project with descoping. In view of the pending final approval from NHAI and the uncertainty surrounding the successful execution of the proposed harmonious substitution, including fulfillment of the stipulated conditions precedent, no adjustments have been made to the carrying value of the Company''s investments (including subordinate debts and receivables) in SRHL in these standalone financial statements for the year ended March 31, 2025.
The Statutory Auditor of Company have expressed qualified opinion on standalone financial statements in respect of above regards the recoverable value of Company''s investments (including subordinate debts and loans), trade and other receivable, given to SRHL for the year ended March 31, 2025.
In order to resolve the Project related issue, the Concessionaire proposed to harmoniously substitute the Concessionaire with a new SPV to be incorporated by M/s RKCIPL-ARCPL (JV) in the interest of Project. During the year ended March 31, 2024, the NHAI vide its letter dated January 16, 2024, conveyed its "InPrinciple" approval for substitution of SRHL with a new special purpose vehicle to be incorporated by the Nominated Company subject to certain conditions through harmonious substitution and subject to final approval from the Authority ("Authority InPrinciple Approval"). The Authority has issued an in-principal approval for such Harmonious Substitution with the terms and conditions stated therein.
The Company has received advance of INR 20 Million from the prospective buyer against the said project. However the final approval of NHAI is pending, Hence the said amount is included under "Other current financial liabilities" in standalone financial
statements for the year ended March 31, 2025.
Further, the Statutory Auditors have mentioned following qualifications in Report on the Internal Financial Controls with reference to standalone financial statements:
According to the information and explanations given to us and based on our audit, the following material weaknesses has been identified in the operating effectiveness of the Company''s internal financial controls with reference to Standalone Financial Statements as at March 31, 2025:
The Company''s internal financial controls with reference to Standalone Financial Statements as at March 31, 2025 as regards evaluation of uncertainty for realizing the carrying value of investments (including sub ordinate debt), loan and other receivables as explained in Note 43, Note 44, Note 45 to the Standalone Financial Statements were not operating effectively which could potentially lead to not providing adjustments, if any, that may be required to the carrying values of investments (including subdebt), loan and other receivables from such subsidiaries and its consequential impact on the earnings, other equity and related disclosures in the Standalone Financial Statements.
There are material weaknesses in operating effectiveness over system processing invoices and obtaining balance confirmation from vendors and processing of journal entries into accounting software due to absence of maker checker mechanism which could result into possible adjustments of transactions / balances.
Reply of Directors for above qualifications raised by Statutory Auditors in it''s Report on the Internal Financial Controls with reference to standalone financial statements:
The company has adequate system of manual approval of processing of journal entries in accounting software and journal entries are also verified by the internal auditor. The Company has an internal audit system which is commensurate with the size and nature of its business Company are in process of incorporating the maker checker process in accounting software for processing of journal entries.
It may be noted that there were no material misstatements due to the weakness in system for processing of journal entries in accounting software due to absence of maker checker system.
a) Audit Qualification (each audit qualification separately):
The Statutory Auditors have provided following qualification in their audit report -1. As detailed in Note 48 & Note 49 to the accompanying Consolidated Financial Statements, with respect to Rohtak Panipat Tollway
Private Limited (RPTPL) and Rohtak Hisar Tollway Private Limited (RHTPL), subsidiaries of the Group in which interest on rupee term loan from banks and financial institutions, unsecured loans from group companies as well as interest on deferred premium obligation have not been accounted considering the fact that both subsidiaries have issued termination notices and lenders of both subsidiaries have classified all the secured borrowings as non-performing assets. This has resulted in the understatement of finance cost and the related interest liability and corresponding understatement of losses, amount of which is unascertained.
The auditors of RPTPL and RHTPL have expressed qualified opinion on the financial statements of RPTPL and RHTPL for the year ended March 31, 2025 & March 31, 2024 vide their Auditor''s Report dated May 23, 2025 & May 14, 2024 respectively.
One of the subsidiary of the Group namely Rohtak Panipat Tollways Private Limited (RPTPL) has issued the termination notice on July 27, 2021, to National Highway Authority of India (NHAI) by exercising the criteria of "Event of Defaults" under the concession agreement. Since the project of the Company has been terminated, the management of RPTPL is of the view that going concern assumption for preparation of accounts is not appropriate and accounts have been drawn accordingly on nongoing concern basis.
The management of RPTPL has lodged a total claim amounting to INR 19,379.20 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of Farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid 19 . The NHAI had lodged its counter Claims amounting to INR 6,227.00 Million. The Company had submitted its reply on such counter claims The Arbitral proceedings for the same are completed and the Arbitral Award is declared on 23.01.2025 unanimously, except for Counter Claim of NHAI regarding Premium that one Ld. Arbitrator has rejected it completely. As on the date of the said Majority award, the net awarded amount after deducting all dues of NHAI including Premium works out to INR 10,805.45 Million (principal of INR 7,796.31 Million and interest of INR 3,009.14 Million).
The Arbitration matter of Competing Road was referred to Arbitration. In the said matter, the majority award was passed on May 30, 2023 in favour of NHAI setting aside claims of Company and Minority Award dated 05.06.2023 in favour of Company amounting to INR 8,509.80 Million. The Company has challenged the Majority Award dated 30.05.2023 and filed a petition under Section 34 of Arbitration & Conciliation Act 1996 before the Hon''ble Delhi High Court to set aside the Majority Award dated 30.05.2023. The same is sub-judice before Hon''ble Delhi High Court.
The dispute of Claim for Additional Cost on account of ban of quarrying of stone and loss of Toll collection due to delayed issuance of Provisional Certificate was referred to Arbitration. A unanimous Award dated 06.10.2017 by Arbitral Tribunal was awarded in favour of Company amounting to INR 890.20 Million (amount inclusive of costs & interest pendente lite). This Award was challenged by NHAI under Section 34 before the Delhi High Court. The Delhi High Court in its Judgment dated 16.02.2023, the value of award payable by NHAI to RPTPL as on 15.10.2023 works out to INR 1,211.9 Millions. NHAI had challenged the said award under Section 37 before Division Bench of Delhi High Court. The said matter is now withdrawn by NHAI on account of ongoing Vivad se Vishwas II settlement proposal .
NHAI had claimed on RPTPL a claim on account of negative FRL which was referred to Arbitration. The Majority Award on 31.10.2020 by Tribunal was in favour of NHAI amounting to INR 203.40 Million. The interest on delayed payment is awarded at 7.4% simple interest, as on 15.10.2023 works out to INR 247.90 Million. The dissenting note by the Minority of the Tribunal had
stated to reject the claim of NHAI. The Company has challenged the said Majority Award under Section 34 before the Delhi High Court, which is sub-judice. The Company had challenged the said Majority Award under Section 34 before the Delhi High Court.
The Arbitration Award dated 06.10.2017 and Arbitration Award dated 31.10.2020 has been settled through Settlement Agreement dated 20.03.2025 under Vivad se Vishwas II Scheme of Govt. of India for the net settlement amount of about INR. 650 millions.
Also, RPTPL has received intimation letter dated April 08, 2024 from National Asset Reconstruction Company Limited (NARCL) intimating that the deed of assignment dated March 22, 2024 under the provisions of Section 5 of the SARFASI Act, the consortium of lenders except one lender have assigned/ transferred the outstanding debt /financial assets alongwith underline securities interest, pledged of shares, guarantees, receivables etc charge for such financial assistance granted to RPTPL in favour of NARCL and NARCL acting in its capacity as trustee of NARCL Trust.
During the year ended March 31, 2023, RPTPL has reversed interest of INR 1,026.94 Million provided during the earlier period considering the fact that the project of RPTPL has been terminated and lenders have classified loans as Non Performing Assets.
During the year ended March 31, 2025 and March 31, 2024 , RPTPL has not accounted for interest on Rupee Term Loan from banks and financial institutions as well as loan from group Company since the lenders of RPTPL has classified borrowing as NPA and financial statements are prepared on non going concern basis, for which the statutory auditors of RPTPL have expressed qualified opinion on financial statements in this regards.
One of the subsidiary of the group namely Rohtak Hissar Tollways Private Limited (RHTPL) has issued the termination notice on August 27, 2021, to NHAI by exercising the criteria of "Event of Defaults" under the concession agreement. Since the project of the Company has been terminated, the management of RHTPL is of the view that going concern assumption for preparation of accounts is not appropriate and accounts have been drawn accordingly on non-going concern basis.
In this regard the management of RHTPL has lodged total claim amounting to INR 19,287.10 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of Farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid19. The NHAI had lodged its Counter Claims amounting to INR 3,665.80 Million. The Company had submitted its reply on such counter claims. The Arbitral proceedings for the same are currently ongoing. The current stage of arbitral proceeding is of Arguments which are ongoing.
Also, RHTPL has received intimation letter dated April 08, 2024 from National Asset Reconstruction Company Limited (NARCL) intimating that the deed of assignment dated March 22, 2024 under the provisions of Section 5 of the SARFASI Act, the consortium of lenders have assigned/ transferred the outstanding debt /financial assets alongwith underline securities interest, pledged of shares, guarantees, receivables etc charge for such financial assistance granted to RHTPL in favour of NARCL and NARCL acting in its capacity as trustee of NARCL Trust.
During the year ended on March 31, 2023, RHTPL has reversed interest of INR 1,228.09 Million provided during the earlier period considering the fact that the project of RHTPL has been terminated and lenders have classified loans as Non Performing Assets (NPA).
During the year ended March 31, 2025 and March 31, 2024 , RHTPL has not accounted for interest on Rupee Term Loan from banks and financial institutions as well as loan from group Company since the lenders of RHTPL has classified borrowing as NPA and financial statements are prepared on non going concern basis, for which the statutory auditors of RHTPL have expressed qualified opinion on the financial statements in this regards.
2. As detailed in Note 52 (ix) to the accompanying Consolidated Financial Statements, with respect to Sadbhav Udaipur Highway Limited (SUDHL or concessionaire), subsidiary of the Group for harmonious substitution of SUDHL as a concessionaire of the project. As mentioned in the said note, no adjustment to the carrying value of assets and liabilities have been made in the financial statements and financial statements of SUDHL are prepared on going concern basis. Owing to the uncertainty of outcome of harmonious substitution proceedings and lack of other alternate audit evidences, the auditors of SUDHL is unable to comment about adjustment that may be required to the carrying value of assets and liabilities and their consequential impact on the financial position of the subsidiary Company as at March 31, 2025.
(ix) In case of Sadbhav Udaipur Highway Limited (SUDHL or concessionaire),subsidiary of the group which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI, the project work has been completed and the subsidiary has received the Commercial Operation Date (COD) from NHAI dated July 19, 2024.
However SUDHL has requested the NHAI & Lenders to allow harmonious substitution in terms of the NHAI Policy circular through a nominated company namely â M/S Gawar Construction Limited (Nominated Company) and the Lenders'' Representative to give its consent for allowing harmonious substitution of the SUDHL.
The NHAI vide its letter dt December 27, 2023, conveyed its "InPrinciple" approval for substitution of Original Concessionaire with a new special purpose vehicle to be incorporated by the Nominated Company subject to certain conditions and final approval from the NHAI. Since the conditions precedent to the harmonious substition are under compliance, no adjustment to the carrying value of assets and liabilities related to this project have been made in these consolidated financial statements, for which the statutory auditors of SUDHL have expressed qualified opinion of the financial statements for the year ended March 31, 2025 and March 31, 2024.
The Company has entered into Definative agreement dated March 12, 2025 with Gawar Construction Limited during the year ended March 31, 2025 for harmonious substituion of the project. The Final approval of the NHAI is still pending. However the Company has provided for 1,000 Millions in the books of accounts and disclosed as an exceptional item in the consolidated financial statements for the year ended March 31, 2025.
3. As detailed in Note 54 to the accompanying Consolidated Financial Statements, with respect to Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet as at March 31, 2025 at INR 152.12 Million & March 31, 2024 at INR 153.53 Million under Other Current assets. However, during financial year 2024-2025 & 2023-2024, the SJRRPL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
Hence we are unable to comment about the utilization/realization of such tax credits in foreseeable future.
Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 152.12 Million under the Other Current assets as on March 31, 2025 and Carry forward losses under Income Tax act of INR 932.37 millions as per Income Tax return filed by the subsidairy company for the year ended March 31, 2024. The Management of the SJRRPL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this the accounts are prepared under going concern basis for which the statutory auditors of the subsidairy Company have expressed qualified opinion on financial statements in this regards.
4. As detailed in Note 55 (b) to the accompanying Consolidated Financial Statements, with respect to Sadbhav Bangalore Highway Private Limited (SBGHPL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet as at March 31, 2025 at INR 420.65 Million & March 31, 2024 at INR 420.68 Million under the Other Current assets. However, during financial year 2024-2025 & 2023-2024, the SBGHPL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SBGHPL have expressed qualified opinion on the financial statements of SBGHPL for the year ended March 31, 2025 & March 31, 2024 vide their Auditor''s Report dated May 23, 2025 & May 19, 2024 respectively mentioning that they are unable to comment about the utilization/realization of such tax credits in foreseeable future.
b. Sadbhav Banglore Highway Private Limited (SBGHPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 420.65 Million under the Other Current assetsas at March 31, 2025 and Carry forward losses under Income Tax act of INR 5279.17 millions as per Income Tax return filed by the subsidairy company for the year ended March 31, 2024. The Management of SBGHPL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis. For which the statutory auditors of subsidiary Company have expressed qualified opinion on financial statements in this regards.
5. As detailed in Note 57 to the accompanying Consolidated Financial Statements, with respect to Sadbhav Vidarbha Highway Limited (SVHL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet as at March 31, 2025 at INR 504.71 Million & March 31, 2024 at INR 504.83 Million under the Other Current assets. However, during financial year 2024-2025 & 2023-2024, the SVHL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SVHL have expressed qualified opinion on the financial statements of SBGHPL for the year ended March 31, 2025 & March 31, 2024 vide their Auditor''s Report dated May 23, 2025 & May 19, 2024 respectively mentioning that they are unable to comment about the utilization/realization of such tax credits in foreseeable future.
Sadbhav Vidarbha Highway Limited (SVHL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 504.71 Million under the Other Current assets as at March 31, 2025 and Carry forward losses under Income Tax act of INR 6,413.61 millions as per Income Tax return filed by the subsidairy company for the year ended March 31, 2024. The Management of SVHL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis. For which the statutory auditors of subsidiary have expressed qualified opinion on financial statements in this regards.
6. As detailed in Note 58 to the accompanying Consolidated Financial Statements, with respect to Sadbhav KIM Expressway Limited (SKEPL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet as at March 31, 2025 at INR 408.96 Million and March 31, 2024 at INR 415.96 Million under the Other Current assets. However, during financial year 2024-2025 & 2023-2024, the SKEPL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SKEPL have expressed qualified opinion on the financial statements of SKEPL for the year ended March 31, 2025 and March 31, 2024 vide their Auditor''s Report dated May 23,2025 & May 20, 2024 mentioning that they are unable to comment about the utilization/realization of such tax credits in foreseeable future.
Sadbhav Kim Expressway Private Limited (SKEPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 408.96 Million under the Other Current assets as at March 31, 2025 and Carry forward losses under Income Tax act of INR 253.32 millions as per Income Tax return filed by the subsidairy company for the year ended March 31,2024. The Management of SKEPL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis. For which the statutory auditors of respective subsidiary have expressed qualified opinion on financial statements in this regards.
7. As detailed in Note 56 to the accompanying Consolidated Financial Statements, with respect to Sadbhav Nainital Highway Limited (SNHL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet as at
March 31, 2025 at INR 118.57 Million and March 31, 2024 at INR 118.31 Million under the Other Current assets. However, during financial year 2024-2025 & 2023-2024, SNHL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
Sadbhav Nainital Highway Limited (SNHL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 118.57 Million under the Other Current assets as at March 31, 2025 and Carry forward losses under Income Tax act of INR 1449.89 millions as per Income Tax return filed by the subsidairy company for the year ended March 31,2024. The Management of SNHL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis . For which the statutory auditors of subsidiary have expressed qualified opinion on financial statements in this regards.
Further, the Statutory Auditors have mentioned following qualifications in Report on the Internal Financial Controls with reference to consolidated financial statements:
The Group''s internal financial control system towards estimating the carrying value of assets and liabilities of subsidiary companies as explained in Note 48, 49, 52 (ix), 54, 55(b), 56, 57 and 58 to the accompanying Consolidated Financial Statements were not operating effectively which could potentially lead to non adjustments, if any, that may be required to the carrying values of assets and liabilities of subsidiary Companies and its consequential impact on financial performance and financial position in the Consolidated Financial Statements.
The Holding Company internal process and based on the reports of other auditors of the subsidiary Companies there exists material weaknesses in operating effectiveness over system processing invoices and obtaining balance confirmation from vendors and processing of journal entries into accounting software due to absence of maker checker mechanism which could result into possible adjustments of transactions / balances.
Reply of Directors for above qualifications raised by Statutory Auditors in it''s Report on the Internal Financial Controls with reference to standalone financial statements:
With respect to Group''s internal financial control system towards estimating the carrying value of assets and liabilities of subsidiary companies as explained in Note 48, 49, 52 (ix), 54, 55(b), 56, 57 and 58 to the accompanying Consolidated Financial Statements, shareholders may refer to replies given for respective note numbers mentioned above.
The company has adequate system of manual approval of processing of journal entries in accounting software and journal entries are also verified by the internal auditor. The Company has an internal audit system which is commensurate with the size and nature of its business Company are in process of incorporating the maker checker process in accounting software for processing of journal entries.
The company has received a letter from the cost auditor M/s. J B Mistri & Co., Cost Accountants in Practice having Firm Reg. No. 101067 to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment.
The board of directors of the company has appointed M/s. J B Mistri & Co. & Associates, Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time. The Cost Audit Report for the year 2023-24 was filed with the Ministry of Corporate Affairs within stipulated time period. The members are requested to ratify the remuneration to be paid to the cost auditors of the company.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Ashish Shah & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2024. The Secretarial Audit Report is annexed as Annexure-4.
Qualifications to the secretarial audit report:
1. Pursuant to Section 405 of the Companies Act, 2013 the Central Government made it necessary for all the "Specified Companies" to furnish the Form MSME-1, Half Yearly return about the payment to micro and small enterprise suppliers. However, the Company has not filed the said form for the period ended on 30th September, 2023 and on 31st March, 2024 respectively with Ministry of Corporate Affairs and to that extent not complied with the provisions of the Act.
Reply by Management: The Company is in process to identify MSME registered entities and will take step to file the required Forms in upcoming half year ended.
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.
As per the provisions of section 92(3) of the Companies Act, 2013, the Annual Return of the Company for the FY 2024-25 is placed on the website of the Company and weblink for the same is https://www.sadbhavinfra.co.in/en/pdf/2022- 09/SIPLFormMGT-7-FY 2023-24.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no earning and expenditure in the foreign currency.
Since the Company does not have any manufacturing activities, the other particulars required to be provided in terms of Section 134(3) (m) of the Companies Act, 2013 are not applicable.
PARTICULARS OF MANAGERIAL REMUNERATION AND EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure-5 to this Report.
Your Directors state that none of the Executive Directors of the Company receives any remuneration or commission from any of its Subsidiaries. There was no employee holding by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.
THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:
No applications were made or any proceedings were pending against the Company under the Insolvency and Bankruptcy Code, 2016.
THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:
Not Applicable for the year under review.
The Company is fully compliant with the Maternity Benefit Act, 1961, ensuring all eligible employees receive maternity benefits as prescribed. No violations were reported during the year.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
3. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings.
4. The Managing Director of the Company has not received any commission from the Company and not disqualified from receiving any remuneration or commission from any of subsidiaries of the Company.
5. No fraud has been reported by the Auditors to the Audit Committee or the Board.
Your Directors thank the Central and various State Governments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future.
Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.
Mar 31, 2024
Your Directors have pleasure in submitting their 18th Annual Report of the Company together with the Audited Statements of Accounts for the financial year ended on 31st March, 2024.
FINANCIAL RESULTS
The Group''s financial performances for the year under review along with previous year''s figures are given hereunder:
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PARTICULARS |
Standalone Consolidated |
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2023-24 2022-23 2023-24 2022-23 |
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Revenue from Operations |
225.00 894.14 7,788.89 8247.27 |
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Other |
Income |
207.02 379.48 984.32 2683.58 |
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Total Revenue |
432.02 1273.62 8,773.21 10930.85 |
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Profit Before Taxation |
(5,622.96) (3970.06) (5,581.70) (3855.45) |
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Less: Tax Expens |
e |
(1.83) 394.59 249.20 206.30 |
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Profit/(Loss) for the period after tax and minority |
interest (5,621.14) (3975.47) (5,332.50) (3649.15) |
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Other comprehensive income |
(2.89) 0.38 (4.98) 1.07 |
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Total comprehensive income (after tax) |
(5,624.02) (3575.09) (5,337.48) (3648.08) |
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Directors do not recommend any dividend for the financial year ended on 31st March, 2024.
The Board of Directors of the Company has adopted a Dividend Distribution Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: https://www.sadbhavinfra.co.in/en/pdf/dividend-distribution-policy.pdf
AMOUNT TO BE CARRIED TO RESERVES
The Company transfers entire sum of net loss incurred to Retained Earnings during the year under review.
The paid up Equity Share Capital as at 31st March, 2024 is Rs. 3,52,22,52,160/-. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.
The Company has following Non-convertible Debentures (NCDs) as on 31st March, 2024:
1. Series A - 39,000 (Thirty Nine Thousand) Unlisted, Unrated, Secured, Redeemable, Non-convertible Debentures of face value of Rs. 67,408/- (Rupees Sixty Seven Thousand Four Hundred and Eight only) each, aggregating up to Rs. 262,89,12,000/-(Rupees Two Hundred Sixty Two Crores Eighty Nine Lakhs and Twelve Thousand only) ("Debentures") - Series A Debentures have been repaid in full vide payment dated 18-05-2024.
2. Series B - 16,000 (Sixteen Thousand) Unlisted, Unrated, Secured, Redeemable, Non- Convertible Debentures of a face value of Rs. 1,00,000/- (Rupees One Lakh Only) each of an aggregate nominal value of up to Rs. 160,00,00,000/- (One Hundred Sixty Crores Only) ("Debentures").
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
During the year, Company reported at standalone level, the Revenue from Operations amounting to Rs. 225.00 million as against Rs. 894.14 million in the previous year. The Net Loss reported for the year was Rs. 5,624.02 million against Net Loss of Rs. 3,575.09 million as per previous year. The Consolidated Revenue from Operations was Rs. 7,788.89 million as against Rs. 8,247.27 million in the previous year. Your Company has achieved consolidated total income of Rs. 8,773.21 million as against Rs. 10,930.85 million in the previous year.
The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
The Management Discussion and Analysis report, capturing your Company''s performance, industry trends and other material changes with respect to your Company is presented in a separate section forming part of the Annual Report. The Report provides a consolidated perspective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders and includes aspects of reporting as required by Regulation 34(2) (e) read with Schedule V of the Listing Regulations.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There are no material changes in the nature of business during the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitment if any affecting the financial position of the company occurred between the ends of the financial year to which this financial statements relate and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
Risk management comprises all the organizational rules and actions for early identification of risks in the course of doing business and the management of such risks.
Pursuant to the provisions of Regulation 21 of the Listing Regulations, the Company is not required to constitute a Risk Management Committee; however, as a measure of good governance, the Company has constituted a Risk Management Committee of the Board. The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. The Company''s management systems, organizational structures, processes, standards, code of conduct, Internal Control and Internal audit methodologies and processes that governs as to how the Company conducts its business and manages associated risks. The Company also has in place a Risk Management Policy to identify and assess the key risk areas. The Members of the Audit Committee monitors and reviews the implementation of various aspects of the Risk Management Policy. This robust Risk Management framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Company''s competitive advantage. Major risks identified by the Company are systematically addressed through mitigating actions on a continuous basis. The Company has also adopted Risk Assessment, Minimization and Control Procedures. At present no particular risk whose adverse impact may threaten the existence of the Company is visualized.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS.
The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. It has documented policies and procedures covering financial and operating functions and processes. These policies and procedures are updated from time to time and compliance is monitored by the internal audit function as per the audit plan. The Company continues its efforts to align all its processes and controls with best practices.
Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Board''s Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
i) Changes in Directors and Key Managerial Personnel
There were following changes in the composition of Board and Key Managerial Personnel during the year under review:
1) Members of the Company has confirmed appointment of Mr. Jatin Thakkar (DIN: 09312406) appointment vide Postal Ballot resolution passed on 29-04-2023.
2) Members of the Company has confirmed appointment of Mr. Dwigesh Joshi (DIN: 09733282) appointment vide Postal Ballot resolution passed on 29-04-2023.
3) Mr. Hardik Modi, has tendered his resignation from the post of Company Secretary and Compliance Officer of the Company with effect from 30-09-2023
4) Mr. Hardik Modi, a qualified Company Secretary was appointed as Company Secretary and Compliance Officer of the Company w.e.f. 07-11-2023.
5) Mr. Dwigesh Joshi (DIN-09733282) resigned as Director of the Company w.e.f. 08-04-2024.
6) Mrs. Shefali Manojbhai Patel (DIN-07235872) was appointed as an Additional Director of the Company w.e.f. 06-07-2024 by way of circular Resolution.
7) Board of Directors at their meeting held on 12-08-2024, recommended appointment of Mr. Ambalal Patel (DIN-00037870) as a Non-executive Independent Director of the Company subject to approval of members of the Company at this General Meeting.
8) Mr. Tarang Desai (DIN-00005100) was appointed as an Additional Director of the Company w.e.f. 12-08-2024.
ii) Declaration by an Independent Director(s)
Independent Directors, hold office for a term of five years. They are not liable to retire by rotation in terms of Section 149(13) of the Act.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of strategy, auditing, tax and risk advisory services, financial services, corporate governance, etc. and that they hold highest standards of integrity. The Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.
iii) Procedure for Nomination and Appointment of Directors:
The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, and financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director''s appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidate''s vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge
expected, is communicated to the appointee.
iv) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director:
The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.
Independence: In accordance with the above criteria, a Director will be considered as an ''Independent Director'' if he/she meets with the criteria for ''Independent Director'' as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.
Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the ''Code for Independent Directors'' as outlined in Schedule IV to the Act.
v) Annual Evaluation of Board Performance and Performance of its Committees and of Directors:
Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
The Board''s functioning was evaluated on various aspects, including inter alia structure of the Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissent, recording of minutes and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of management''s performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Executive Chairman.
Directors were evaluated on aspects such as professional qualifications, prior experience, especially experience relevant to the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, independence and guidance/ support to management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including effectiveness of leadership and ability to steer meetings, impartiality, ability to keep shareholders'' interests in mind and effectiveness as Chairman.
Areas on which the Committees of the Board were assessed included mandate and composition; effectiveness of the Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The NRC also reviewed the performance of the Board, its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.
NUMBER OF MEETINGS OF THE BOARD
During the year, Five (5) Board meetings were convened and held on 28th May 2023, 14th August 2023, 07th November 2023, 27th December 2023 and 08th February, 2024. Details of board meetings and committee meeting are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
In compliance with the requirements of Companies Act, 2013 and Listing Regulations, your Board had constituted various Board Committees to assist it in discharging its responsibilities. The Board has adopted charters setting forth the roles and responsibilities of each of the Committees. The Board has constituted following Committees to deal with matters and monitor activities falling within the respective terms of reference:
a) Mandatory Committees
⢠Audit Committee
⢠Nomination and Remuneration Committee
⢠Stakeholder''s Relationship Committee
⢠Corporate Social Responsibility Committee
b) Non-Mandatory Committees
⢠Risk Management Committee
⢠Finance and Investment Committee
Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.
NOMINATION AND REMUNERATION POLICY
The Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.
The Nomination and Remuneration Committee has considered following factors while formulating Policy:
i. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
ii. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
iii. Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
It is affiirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.
Details of the Remuneration Policy are given in the Corporate Governance Report.
Details of Subsidiary/Joint Ventures/Associate Companies
The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (''Ind AS''), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
The annual financial statements of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information at any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (1) (c) of Listing Regulations. The Policy, as approved by the Board, is uploaded on the Company''s website and the weblink of the same is https://www.sadbhavinfra.co.in/en/investors.html
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The consolidated fi |
''nancial results reflect the operations of the following subsidiaries. |
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Name No. |
of Company |
CIN/GLN Address |
of The Company Holding/Subsidiary/ Associate |
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1 Ahmedabac Infrastructu |
R''ng R°ad U45203C re Limited |
"Sadbhav House", Opp. Law J2006PLC048981 Garden Police Chowki, Ellisbridge, Wholly °wned Subsldlary Ahmedabad - 380006. Company |
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2 Rohtak Limited |
Hissar Tollway Private U45203G |
"Sadbhav House", Opp. Law J2013PTC074446 Garden Police Chowki, Ellisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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3 Rohtak Limited |
Pani |
pat Tollway Private U45202C |
"Sadbhav House", Opp. Law J2010PTC059322 Garden Police Chowki, Ellisbridge, Wholly °.wned subsidiary Ahmedabad - 380006. Company |
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Sadbhav Nainital Highway 4 Limited (Formerly known as 0 '' Sadbhav Nainital Highway Private Limited) |
"Sadbhav House", Opp. Law J2016PLC091777 Garden Police Chowki, ElVisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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Sadbhav Rudrapur Highway Limited (Formerly known as 5. U45203C Sadbhav Rudrapur Highway Private Limited) |
"Sadbhav House", Opp. Law J2016PLC091774 Garden Police Chowki, Ellisbridge, Wholly °.wned subsidiary Ahmedabad - 380006. Company |
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Sadbhav Bangalore Highway 6. U45202G Private Limited |
"Sadbhav House", Opp. Law J2016PTC094257 Garden Police Chowki, ElVisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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Sadbhav Vidarbha Highway Limited (Formerly known as 7. U45500G Sadbhav Vidarbha Highway Private Limited) |
"Sadbhav House", Opp. Law J2017PLC097040 Garden Police Chowki, Ellisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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Sadbhav Udaipur Highway 8 Limited (Formerly known as 0 . Sadbhav Udaipur Highway Private Limited) |
"Sadbhav House", Opp. Law J2017PLC097508 Garden Police Chowki, EEisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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9 |
Sadbhav Jodhpur Ring Road ^4 Private Limited |
"Sadbhav House", Opp. Law 5309GJ2018PTC100367 Garden Police Chowki, Ellisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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10 |
Sadbhav Kim Expressway Private ^4 Limited |
"Sadbhav House", Opp. Law 5309GJ2018PTC101800 Garden Police Chowki, Ellisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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11 |
Sadbhav Infra Solutions Private Limited (Formerly known as ^4 Sadbhav Bhimasar Bhuj Highway Private Limited) |
"Sadbhav House", Opp. Law 5309GJ2018PTC101821 Garden Police Chowki, Ellisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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12 |
Sadbhav Maintenance Infrastructure Private Limited ^4 (Formerly known as Sadbhav Vizag Port Road Private Limited) |
"Sadbhav House", Opp. Law 5309GJ2018PTC101832 Garden Police Chowki, Ellisbridge, Wholly °wned subsidiary Ahmedabad - 380006. Company |
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13 |
Sadbhav Hybrid Annuity ^4 Projects Limited |
Block No. J-59, 5500DL2018PLC335787 Ground Floor SAKET, New Delhi: Wholly °wned subsidiary 11001/ Company |
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14 |
Maharashtra Border Check Post Network Limited |
"Sadbhav House", Opp. Law 5201GJ2009PLC056327 Garden Police Chowki, Ellisbridge, Subsidiary* Ahmedabad - 380006. |
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* Sadbhav Infrastructure Project Limited (SIPL) and Adani Road Transport Limited (ARTL) executed Share Purchase Agreement (SPA) on August 16, 2021 (Amended and restated on January 27, 2022), for sale of equity shares of Maharashtra Border Check Post Network Limited (MBCPNL) a subsidiaries of SIPL, out of which 49% shares have already transferred to ARTL.
Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules made thereunder and pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had prepared consolidated financial statements of the Company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 attached as Annexure-1 which forms part of this Report.
Particulars of loans, guarantees or investments under section 186
The provisions of Section 186 (except sub-section [1] of Section 186) of the Companies Act, 2013, with respect to a loan, guarantee or security is not applicable to the Company as the Company is engaged in providing infrastructural facilities. The details of investment made during the year under review are disclosed in the financial statements.
During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31 March 2024, there were no deposits which were unpaid or unclaimed and due for repayment.
All properties and insurable interests of the company to the extent required have been adequately insured.
Particulars of contracts or arrangements with related parties:
All the related party transactions entered into during the financial year were on arm''s length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties, which could be considered material in terms of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act in Form AOC 2 is attached as Annexure-2, which forms part of this Report.
There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons, which may have potential conflict with interest of the company at large. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website at the web link: https://www.sadbhavinfra.co.in/en/pdf/policv-on-related-partv-transaction.pdf
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2023-24.
Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards had been followed and that there are no material departures;
ii. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
iii. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they had prepared the annual accounts on a going concern basis;
v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
vi. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF).
There is no unclaimed and unpaid dividend transferred to Investor Education and Protection Fund (IEPF) in the current financial year. CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a company''s commitment to operating responsibly within its community and environment. It involves ethical behavior and contributing to economic development, fostering sustainable livelihoods. The company prioritizes fairness, transparency, and positively impacting society and the environment. In line with Section 135 of the Act and its associated rules, the company has formally adopted a CSR policy.
The Board has established a Corporate Social Responsibility Committee, chaired by Mr. Shashin Patel, Mrs. Daksha Shah and Mr. Sandip V. Patel as members. The Corporate Social Responsibility meeting was held on 14-08-2023 and 08-02-2024.
The CSR Committee''s responsibilities include:
i. Formulating and recommending the CSR Policy to the Board of Directors and outlining activities to be undertaken.
ii. Recommending the expenditure for CSR activities.
iii. Monitoring CSR activities periodically.
In accordance with section 135 of the Companies Act 2013, the CSR provisions apply to the company. However, due to losses incurred during the year under review, no CSR expenditure was made as per the company''s CSR Policy. The Annual Report on CSR activities is provided in the prescribed Form as "Annexure-3" to this report.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
Pursuant to provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, Complaint Redressal Committee has been Comprises of Mrs. Janki Shah as Chairperson, Mrs. Rajal Patel as Presiding Officer and Ms. Aakansha Shah as Member.
The Company has not received any complaint of sexual harassment during the financial year 2023-24 and No meeting of Complaint Redressal Committee was held during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has made compliant under Vigil Mechanism/ Whistle Blower Mechanism.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also uploaded on the Company''s website i.e. https://www.sadbhavinfra.co.in/.
i. Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. S G D G & Associates LLP, Chartered Accountants, Ahmedabad (S G D G) (Firm Registration No. W100188) were re-appointed as Statutory Auditor of the Company from conclusion of the 17th AGM to be held in the year 2023 for further period of 5 consecutive years.
The Auditors'' Report has following qualification, reservation or adverse remark on the financial statements for the financial year ended on 31st March, 2024.
a) Audit Qualification (each audit qualification separately):
The Statutory Auditors have provided following qualification in their audit report -
1. We draw attention to Note 43 and Note 44 to the accompanying Standalone Financial Statements with respect to investment in (including subordinate debt), and loan & advances to Rohtak Panipat Tollway Private Limited and Rohtak Hissar Tollway Private Limited, subsidiaries of the Company. Both the subsidiaries have issued notice of termination of Concession Agreement to National Highways Authority of India (NHAI) on account of Force Majeure Event as per Concession Agreement. As explained in the said note, the Company has carried out impairment assessment of investment in these subsidiaries considering the expected payment arising out of aforesaid termination and other claims filed with NHAI and based on the above assessment, management has concluded that no impairment / adjustment to the carrying value of the investments (including subordinate debt) and loan & advances, trade and other receivables aggregating to INR 8,040.58 million are necessary as at March 31, 2024.
However, we have not been able to corroborate the management''s contention of realising the carrying value of investments (including subordinate debt), loans and advances, trade and other receivables related to both subsidiaries aggregating to INR 8,040.58 million as on March 31, 2024.
Accordingly, we are unable to comment on appropriateness of the carrying value of such investment and loans and advances and their consequential impact on the Standalone Financial Statements and financial position of the Company as at and for the year ended on March 31, 2024.
Our audit report dated May 28, 2023 on the Standalone Financial Statements for the year ended 31 March 2023 was also qualified in respect of this matter.
The Company has investments of INR 217.74 million and subordinate debts of INR 4688.73 million, loans of INR 11.06 million and trade & other Receivables of INR 74.27 millions in one of the subsidiary namley Rohtak Panipat Tollway Private Limited (RPTPL) which is engaged in construction, operation and maintenance of infrastructure projects under concession agreement with National Highways Authorities of India(NHAI). The net worth of this subsidiary Company has fully eroded.
From December 25, 2020 , the toll collection was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws. Accordingly, the Company was not able to collect toll user fees from December 25, 2020. The Company had sent various communications to authorities for such forceful suspension of toll including revenue loss claim. Accordingly, the Company had issued notice of termination of Concession Agreement to NHAI on July 27, 2021 under Force Majeure Event of Concession Agreement. The Termination Payment and other payments due from NHAI were pending for the long time. The Company had attempted conciliation of the issues of the Project for amicable settlement. Due to non-progress of the same, the Company vide letter dated 27.03.2023 had notified the Conciliation Committee and NHAI regarding the failure of the Conciliation Proceedings. The said matters were referred to Arbitration by the Company. The Company has lodged a total claim amounting to INR 19379.20 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of Farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid19 .The NHAI had lodged its Counter Claims amounting to INR 6227.00 Million. The Company had submitted its reply on such counter claims The Arbitral proceedings for the same are currently ongoing.
The Arbitration matter of Competing Road was referred to Arbitration. In the said matter, the majority award was passed on May 30, 2023 in favour of NHAI setting aside claims of Company and Minority Award dated 05.06.2023 in favour of Company amounting to Rs. 8509.80 Million. The Company has challenged the Majority Award dated 30.05.2023 and filed a petition under Section 34 of Arbitration & Conciliation Act 1996 before the Hon''ble Delhi High Court to set aside the Majority Award dated 30.05.2023.
- The dispute of Claim for Additional Cost on account of ban of quarrying of stone and loss of Toll collection due to delayed issuance of Provisional Certificate was referred to Arbitration. A unanimous Award dated 06.10.2017 by Arbitral Tribunal was awarded in favour of Company amounting to Rs. 890.20 Million (amount inclusive of costs & interest pendente lite). This Award was challenged by NHAI under Section 34 before the Delhi High Court. The Delhi High Court in its Judgment dated 16.02.2023, the value of award payable by NHAI to RPTPL as on 15.10.2023 works out to Rs. 121.19 Crores. NHAI has challenged the said award under Section 37 before Division Bench of Delhi High Court which is sub-judice.
NHAI had lodged claim on RPTPL on account of negative Finished Road Level (FRL) which was referred to Arbitration. The Majority Award on 31.10.2020 by Tribunal for amount of Rs 203.40 Million was in favour of NHAI. The interest on delayed payment is awarded at 7.4% simple interest, as on 15/10/2023 works out to Rs. 247.90 Million. The dissenting note by the Minority of the Tribunal had stated to reject the claim of NHAI. The Company has challenged the said Award of Majority under Section 34 before the Delhi High Court, which is sub-judice.
Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement, the management has assessed that there is no impairment in the value of investments made by the Company in the RPTPL and consequently no provision/adjustment to the carrying value of Investments and subordinate debts, loans and advances and trade and other receivables as at March 31, 2024 is considered necessary.
The statutory auditors have expressed qualified opinion on Standalone Financial Statements in respect of above as regards recoverable value of Company''s investment (including subordinate debt) and loans, trade & other receivable given to RPTPL for the year ended March 31, 2024 and March 31, 2023.
The Company has investments of INR 107.68 million and subordinate debts of INR 2,893.42 million, loans of INR 39.95 million and other receivable of INR 7.73 million in one of its subsidiary namely Rohtak Hissar Tollway Private Limited (RHTPL) which is engaged in construction, operation and maintenance of infrastructure projects under concession agreement with National Highways Authorities of India. The net worth of this subsidiary Company has fully eroded.
From December 25, 2020 , the toll collection was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws. Accordingly, the Company was not able to collect toll user fees from December 25, 2020. The Company had sent various communications to authorities for such forceful suspension of toll including revenue loss claim. Accordingly, the Company had issued notice of termination of Concession Agreement to NHAI on July 27, 2021 under Force Majeure Event of Concession Agreement. The Termination Payment and other payments due from NHAI were pending for the long time. The Company had attempted conciliation of the issues of the Project for amicable settlement. Due to non-progress of the same, the Company vide letter dated 27.03.2023 had notified the Conciliation Committee and NHAI regarding the failure of the Conciliation Proceedings. The said matters were referred to Arbitration by the Company. The Company has lodged a total claim amounting to INR 19287.10 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid19. The NHAI had lodged its Counter Claims amounting to Rs. 3665.80 Million. The Company had submitted its reply on such counter claims. The Arbitral proceedings for the same are currently going on.
Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement and communications from NHAI for conciliation, the management has assessed that there is no impairment in the value of investments made by the Company in the RHTPL and consequently no provision/adjustment to the carrying value of Investments and subordinate debts and loans and advances as at March 31, 2024 is considered necessary.
The statutory auditors have expressed qualified opinion on Standalone Financial Statements in respect of above as regards recoverable value of Company''s investment (including subordinate debt) given to and loans & other receivables from RHTPL.
2. We draw attention to Note 45 of the accompanying Standalone Financial Statements with respect to Sadbhav Udaipur Highway Limited (Concessionaire or SUDHL), subsidiary of the Company, in which case, National Highways Authority of India in the month of December 2023, at the request of the Company has given in principal approval for harmonious substitution of the Concessionaire. The Company is in the process of compliance of the conditions prescribed by National Highways Authority of India for substitution. As explained in the said note, the management has carried out impairment assessment of Investment (including subordinate debt) and other receivables in this subsidiary duly considering the expected payment arising out of aforesaid substitution and based on the above assessment, the management has concluded that no impairment / adjustment to the carrying value of investment (including subordinate debt ), loans and advances, trade and other receivables of INR 1,774.09 million is considered necessary as at March 31, 2024.
However, we have not been able to corroborate the management''s contention of realizing the carrying value of Investment (including subordinate debt), loans and advances and trade and other receivables balances aggregating to INR 1,774.09 million as at March 31, 2024.
Accordingly, we are unable to comment on appropriateness of the carrying value of Investment (including subordinate debt), loans and advances, trade and other receivables and their consequential impact on the Standalone Financial Statements and financial position of the Company as at and for the year ended on March 31, 2024.
The Company has investments of INR 269.66 million and subordinate debts of INR 1346.39 million and other payables of INR 128.04 million in one of its subsidiary namely Sadbhav Udaipur Highway Limited (SUDHL or concessionaire) which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI). The project work has been almost completed as on March 31, 2024.
The Company has requested the NHAI & Lenders to allow harmonious substitution in terms of the NHAI Policy circular through a nominated Company namely â M/S Gawar Construction Limited (Nominated Company) and the Lenders'' Representative, gave its consent for allowing harmonious substitution of SUDHL.
The NHAI vide its letter dt December 27, 2023, conveyed its "InPrinciple" approval for substitution of Original Concessionaire with a new special purpose vehicle to be incorporated by the Nominated Company subject to certain conditions and final approval from the NHAI. Since the conditions precedent to the harmonious substitution is in progress, no adjustment to the carrying value of investments have been made in these Standalone Financial Statements.
The statutory auditors of the Company have expressed qualified opinion on Standalone Financial Statements in respect of above as regards recoverable value of Company''s investment (including subordinate debt) and loans, trade & other receivable given to SUDHL for the year ended March 31, 2024.
3. We draw attention to Note 46 of the accompanying Standalone Financial Statements with respect to Sadbhav Rudrapur Highway Limited (SRHL), a subsidiary of the Company, in which case, NHAI in the month of January 2024, at the request of the Company has given in principal approval for harmonious substitution of the concessionaire. The Company is in the process of compliance of the conditions prescribed by NHAI for substitution. As explained in the said note, management has carried out impairment assessment of Investment (including subordinate debt) and other receivables in this subsidiary duly considering the expected payment arising out of aforesaid substitution and based on the above assessment, management has concluded that no impairment / adjustment to the carrying value of Investment (including subordinate debt) and other receivables aggregating to INR 1,196.96 million is considered necessary as at March 31, 2024.
However, we have not been able to corroborate the management''s contention of realizing the carrying value of Investment (including subordinate debt) and other receivables balances aggregating to INR 1,196.96 million as at March 31, 2024.
Accordingly, we are unable to comment on appropriateness of the carrying value of Investment (including subordinate debt) and other receivables and their consequential impact on the Standalone Financial Statements and financial position of the Company as at reporting date and for the year ended on March 31, 2024.
The Company has investments of INR 10.00 million and subordinate debts of INR 915.60 million and other receivables of INR 271.36 million in one of its subsidiary namely Sadbhav Rudrapur Highway Limited (SRHL or concessionaire) which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI). There is delay in approval of Estimates for Shifting of Utilities, delay in approval of the GAD of ROB from Railway Department and non-availability of land for Construction of ROBs, delay in approval of Change of Scope Works, delay due to Force Majeure Event of COVID-19, etc.
Even before approval Extension of Time and resolution of other issues, NHAI had sought and received bids for the balance EPC Works of the Project in September 2022. Accordingly, NHAI had accepted bids and appointed M/s KCC Buildcon (P) Ltd. - HRY Kundu Buildtech (P) Ltd. (JV) as an EPC Contractor for balance Engineering, Procurement, and Construction (EPC) works in December 2022. Although, there was no provision in the Concession Agreement to award such balance construction works to any other agency by NHAI directly, the Concessionaire didn''t object to such appointment by NHAI in the interest of completing the Project and as this was also discussed during the Project Review Meetings in August 2022. Therefore, the treatment of such appointment for EPC Contractor by NHAI under Concession Agreement was to be mutually agreed between Concessionaire and the Authority.
In order to resolve the Project related issue, the Concessionaire proposed to harmoniously substitute the Concessionaire with a new SPV to be incorporated by M/s RKCIPL-ARCPL (JV) in the interest of Project. During the quarter ended March 31, 2024, the NHAI vide its letter dt January 16, 2024, conveyed its "InPrinciple" approval for substitution of SRHL with a new special purpose vehicle to be incorporated by the Nominated Company subject to certain conditions through harmonious substitution and subject to final approval from the Authority ("Authority InPrinciple Approval"). The Authority has issued an in-principal approval for such Harmonious Substitution with the terms and conditions stated therein.
Subsequent to discussions and deliberation with Authority, the Company has also invoked through Conciliation Committees of Independent Experts (CCIEs) to resolve the said issues and the conditions precedent to the harmonious substitution is in progress, no adjustment to the carrying value of investments have been made in these Standalone Financial Statements.
The Statutory Auditor of the Company have expressed qualified opinion on Standalone Financial Statements in respect of above regards the recoverable value of Company''s investments (including subordinate debts and loans), trade and other receivable, given to SRHL for the year ended March 31, 2024
Further, the Statutory Auditors have mentioned following qualifications in Report on the Internal Financial Controls with reference to standalone financial statements:
According to the information and explanations given to us and based on our audit, the following material weaknesses has been identified in the operating effectiveness of the Company''s internal financial controls with reference to Standalone Financial Statements as at March 31, 2024:
The Company''s internal financial controls with reference to Standalone Financial Statements as at March 31, 2024 as regards evaluation of uncertainty for realizing the carrying value of investments (including sub ordinate debt), loan and other receivables as explained in Note 43, Note 44, Note 45 and Note 46 to the Standalone Financial Statements were not operating effectively which could potentially lead to not providing adjustments, if any, that may be required to the carrying values of investments (including sub-debt), loan and other receivables from such subsidiaries and its consequential impact on the earnings, other equity and related disclosures in the Standalone Financial Statements.
The Company''s internal process with regards to the confirmation and reconciliation of trade payables, trade receivables, other incidental balances pertaining to the said trade payables and trade receivables are not operating effectively which could have consequential effect on balances.
In our opinion, the Company''s system of processing journal entries in accounting software does not have a maker checker system which could result in a possible effect to the processing of transaction and its consequential effect on balances.
Reply of Directors for above qualifications raised by Statutory Auditors in it''s Report on the Internal Financial Controls with reference to standalone financial statements:
Company has adequate system for balance confirmation of trade payable and receivables. The Company is reconciling the outstanding balance of trade payables and receivables on regular intervals. The Company has an internal audit system which is commensurate with the size and nature of its business and there is no weakness in recognition of income and expenses. Further as part of internal audit scope such balances are also reviewed by them and hence possibility of misstatement is not there.
The company has adequate system of manual approval of processing of journal entries in accounting software and journal entries are also verified by the internal auditor. The Company has an internal audit system which is commensurate with the size and nature of its business Company are in process of incorporating the maker checker process in accounting software for processing of journal entries.
It may be noted that there were no material misstatements due to the weakness in system for processing of journal entries in accounting software due to absence of maker checker system.
a) Audit Qualification (each audit qualification separately):
The Statutory Auditors have provided following qualification in their audit report -
1. As detailed in Note 47 & Note 48 to the accompanying Consolidated Financial Statements, with respect to Rohtak Panipat Tollway Private Limited (RPTPL) and Rohtak Hisar Tollway Private Limited (RHTPL), subsidiaries of the Group in which interest on rupee term loan from banks and financial institutions, unsecured loans from group companies as well as interest on deferred premium obligation have not been accounted considering the fact that both subsidiaries have issued termination notices and lenders of both subsidiaries have classified all the secured borrowings as non-performing assets. This has resulted in the understatement of finance cost and the related interest liability and corresponding understatement of losses, amount of which is unascertained.
The auditors of RPTPL and RHTPL have expressed qualified opinion on the financial statements of RPTPL and RHTPL for the year ended March 31, 2024 vide their Auditor''s Report dated May 14, 2024.
One of the subsidiaries of the Group namely Rohtak Panipat Tollways Private Limited (RPTPL) has issued the termination notice on July 27, 2021, to National Highway Authority of India (NHAI) by exercising the criteria of "Event of Defaults" under the concession agreement. Since the project of the Company has been terminated, the management of RPTPL is of the view that going concern assumption for preparation of accounts is not appropriate and accounts have been drawn accordingly on nongoing concern basis.
The management of RPTPL has lodged a total claim amounting to INR 19379.24 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of Farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid 19 .The NHAI had lodged its counter Claims amounting to INR 6227.00 Million. The Company had submitted its reply on such counter claims The Arbitral proceedings for the same are currently ongoing.
The Arbitration matter of Competing Road was referred to Arbitration. In the said matter, the majority award was passed on May 30, 2023 in favour of NHAI setting aside claims of Company and Minority Award dated 05.06.2023 in favour of Company amounting to Rs. 8509.80 Million. The Company has challenged the Majority Award dated 30.05.2023 and filed a petition under Section 34 of Arbitration & Conciliation Act 1996 before the Hon''ble Delhi High Court to set aside the Majority Award dated 30.05.2023.
The dispute of Claim for Additional Cost on account of ban of quarrying of stone and loss of Toll collection due to delayed issuance of Provisional Certificate was referred to Arbitration. A unanimous Award dated 06.10.2017 by Arbitral Tribunal was awarded in favour of Company amounting to Rs. 890.20 Million (amount inclusive of costs & interest pendente lite). This Award was challenged by NHAI under Section 34 before the Delhi High Court. The Delhi High Court in its Judgment dated 16.02.2023, the value of award payable by NHAI to RPTPL as on 15.10.2023 works out to Rs. 121.19 Crores. NHAI has challenged the said award under Section 37 before Division Bench of Delhi High Court which is sub-judice.
NHAI had claimed on RPTPL a claim on account of negative FRL which was referred to Arbitration. The Majority Award on 31.10.2020 by Tribunal was in favour of NHAI amounting to Rs. 203.40 Million. The interest on delayed payment is awarded at 7.4% simple interest, as on 15.10.2023 works out to Rs. 247.90 Million. The dissenting note by the Minority of the Tribunal had stated to reject the claim of NHAI. The Company has challenged the said Majority Award under Section 34 before the Delhi High Court, which is sub-judice.
During the quarter ended on March 31, 2023, RPTPL has reversed interest of INR 1,026.94 million provided during the earlier period considering the fact that the project of RPTPL has been terminated and lenders have classified loans as Non Performing Assets.
During the year ended March 31, 2024, RPTPL has not accounted for interest on Rupee Term Loan from banks and financial institutions as well as loan from group Company since the lenders of RPTPL has classified borrowing as NPA and financial statements are prepared on non going concern basis, for which the statutory auditors of subsidiary Company have expressed qualified opinion on financial statements in this regards.
One of the subsidiaries of the group namely Rohtak Hissar Tollways Private Limited (RHTPL) has issued the termination notice on August 27, 2021, to NHAI by exercising the criteria of "Event of Defaults" under the concession agreement. Since the project of the Company has been terminated, the management of RHTPL is of the view that going concern assumption for preparation of accounts is not appropriate and accounts have been drawn accordingly on non-going concern basis.
In this regard the management of RHTPL has lodged total claim amounting to INR 19287.10 Million relating to termination payment, Force Majeure Costs due to Force Majeure event of Farmer''s Agitation, COVID-19, & Demonetization, and NPV of extension entitled due to Force Majeure event of Farmers agitation and Covid19. The NHAI had lodged its Counter Claims amounting to Rs. 3665.80 Million. The Company had submitted its reply on such counter claims. The Arbitral proceedings for the same are currently ongoing.
During the quarter ended on March 31, 2023, RHTPL has reversed interest of INR 1,228.09 million provided during the earlier period considering the fact that the project of RHTPL has been terminated and lenders have classified loans as Non Performing Assets (NPA).
During the year ended March 31,2024, RHTPL has not accounted for interest on Rupee Term Loan from banks and financial institutions as well as loan from group Company since the lenders of RHTPL has classified borrowing as NPA and financial statements are prepared on non going concern basis, for which the statutory auditors of subsidiary Company have expressed qualified opinion on financial statements in this regards.
2. As detailed in Note 52 to the accompanying Consolidated Financial Statements, with respect to Sadbhav Udaipur Highway Limited (SUDHL or concessionaire), subsidiary of the Group for harmonious substitution of SUDHL as a concessionaire of the project. As mentioned in the said note, no adjustment to the carrying value of assets and liabilities have been made in the financial statements of SUDHL. Owing to the uncertainty of outcome of harmonious substitution proceedings and lack of other alternate audit evidences, the auditors of SUDHL is unable to comment about adjustment that may be required to the carrying value of assets and liabilities and their consequential impact on the financial position of the Group as on March 31, 2024.
The auditors of SUDHL have expressed qualified opinion on the Financial Statement of SUDHL for the year ended March 31, 2024 vide their report dated May 20, 2024.
In case of Sadbhav Udaipur Highway Limited (SUDHL or concessionaire),subsidiary of the group which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI, the project work has been almost been completed as on December 31, 2023.
However, SUDHL has requested the NHAI & Lenders to allow harmonious substitution in terms of the NHAI Policy circular vide a letter dated August 24, 2023 with the consent of Facility Agent on behalf of Senior lender through a nominated company namely â M/S Gawar Construction Limited (Nominated Company) and the Lenders'' Representative to give its consent for allowing harmonious substitution of the subsidiary company.
The NHAI vide its letter dt December 27, 2023, conveyed its "InPrinciple" approval for substitution of SUDHL with a new special purpose vehicle to be incorporated by the Nominated Company subject to certain conditions and final approval from the NHAI. Since the conditions precedent to the harmonious substitution are under compliance, no adjustment to the carrying value of assets and liabilities related to this project have been made in these consolidated financial statements and the financial statements of the subsidiary company have been prepared on going concern basis, for which the stautory auditor of the subsidiary company have expressed qualified opinion on financial statements in this regards.
3. As detailed in Note 54 (b) to the accompanying Consolidated Financial Statements, with respect to Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet at INR 153.53 Million under Other Current assets. However, during financial year 2023-2024, the SJRRPL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
Hence we are unable to comment about the utilization/realization of such tax credits in foreseeable future.
We have expressed qualified opinion on the financial statements of SJRRPL for the year ended March 31, 2024 vide our report dated May 19, 2024.
Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 153.53 Million under the Other Current assets and Carry forward losses under Income Tax act of INR 924.96 millions as per Income Tax return filed by the subsidiary company for the year ended March 31,2023. The Management of the SJRRPL is exploring various strategic option to utilise/encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this the accounts are prepared under going concern basis For which the statutory auditors of subsidiary company have expressed qualified opinion on financial statements in this regards.
4. As detailed in Note 55 (b) to the accompanying Consolidated Financial Statements, with respect to Sadbhav Bangalore Highway Private Limited (SBGHPL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet at INR 420.68 Million under the Other Current assets. However, during financial year 2023-2024, the SBGHPL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SBGHPL have expressed qualified opinion on the financial statements of SBGHPL for the year ended March 31, 2024 vide their Auditor''s Report dated May 19,2024 mentioning that they are unable to comment about the utilization/ realization of such tax credits in foreseeable future.
Sadbhav Bangalore Highway Private Limited (SBGHPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 420.68 Million under the Other Current assets and Carry forward losses under Income Tax act of INR 5278.57 millions as per Income Tax return filed by the subsidiary company for the year ended March 31,2023. The Management of SBGHPL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis. For which the statutory auditors of subsidiary company have expressed qualified opinion on financial statements in this regards.
5. As detailed in Note 57 to the accompanying Consolidated Financial Statements, with respect to Sadbhav Vidarbha Highway Limited (SVHL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet at INR 504.83 Million under the Other Current assets. However, during financial year 2023-2024, the SVHL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SVHL have expressed qualified opinion on the financial statements of SBGHPL for the year ended March 31, 2024 vide their Auditor''s Report dated May 19,2024 mentioning that they are unable to comment about the utilization/realization of such tax credits in foreseeable future.
Sadbhav Vidarbha Highway Limited (SVHL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 504.83 Million under the Other Current assets and Carry forward losses under Income Tax act of INR 1,590.84 millions as per Income Tax return filed by the subsidiary company for the year ended March 31,2023. The Management of SVHL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis. For which the statutory auditors of subsidiary company have expressed qualified opinion on financial statements in this regards.
6. As detailed in Note 56 to the accompanying Consolidated Financial Statements, with respect to Sadbhav Nainital Highway Limited (SNHL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet at INR 118.31 Million under the Other Current assets. However, during financial year 2023-2024, SNHL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SNHL have expressed qualified opinion on the financial statements of SNHL for the year ended March 31, 2024 vide their Auditor''s Report dated May 14,2024 mentioning that they are unable to comment about the utilization/realization of such tax credits in foreseeable future.
Sadbhav Nainital Highway Limited (SNHL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 118.31 Million under the Other Current assets and Carry forward losses under Income Tax act of INR 146.08 millions as per Income Tax return filed by the subsidiary company for the year ended March 31,2023. The Management of SNHL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. For which the statutory auditors of subsidiary company have expressed qualified opinion on financial statements in this regards.
7. As detailed in Note 58 to the accompanying Consolidated Financial Statements, with respect to Sadbhav KIM Expressway Limited (SKEPL), subsidiary of the group in which Goods and Service Tax credit receivables are carried in the Balance sheet at INR 415.96 Million under the Other Current assets. However, during financial year 2023-2024, the SKEPL does not have any business activity, nor are we informed about the management plan for taking up other business activity.
The auditors of SKEPL have expressed qualified opinion on the financial statements of SKEPL for the year ended March 31, 2024 vide their Auditor''s Report dated May 20,2024 mentioning that they are unable to comment about the utilization/realization of such tax credits in foreseeable future.
Sadbhav Kim Expressway Private Limited (SKEPL), subsidiary of the group in which Tax credit receivables are carried in the Balance sheet at INR 415.96 Million under the Other Current assets and Carry forward losses under Income Tax act of INR 113.55 millions as per Income Tax return filed by the subsidiary company for the year ended March 31,2023. The Management of SKEPL is exploring various strategic option to utilise/ encash the said GST Credit and also carryforward Losses under the Income Tax Act, 1961. For this purpose it is considering the options of restructuring and / or taking up some business activities. In view of this, the accounts are prepared under going concern basis. For which the statutory auditors of subsidiary company have expressed qualified opinion on financial statements in this regards.
Further, the Statutory Auditors have mentioned following qualifications in Report on the Internal Financial Controls with reference to consolidated financial statements:
According to the information and explanations given to us and based on our audit, the following material weaknesses has been identified in the operating effectiveness of the Group''s internal financial controls with reference to Consolidated Financial Statements as at March 31, 2024:
The Group''s internal financial control system towards estimating the carrying value of assets and liabilities of subsidiary companies as explained in Note 52, Note 54 (b), Note 55(b), Note 56, Note 57 and Note 58 to the accompanying Consolidated Financial Statements were not operating effectively which could potentially lead to not providing adjustments, if any, that may be required to the carrying values of assets and liabilities of subsidiary Companies and its consequential impact on financial performance and financial position in the Consolidated Financial Statements.
The Holding Company''s internal process with regards to the confirmation and reconciliation of trade payables, trade receivables, other incidental balances pertaining to the said trade payables and trade receivables are not operating effectively which could have consequential effect on balances.
The Holding Company and based on the reports of other auditors of the subsidiary Companies has inadequate system for processing of journal entries in accounting software indicating absence of maker checker system which could results into possible effect to the processing of transaction and its consequential effect on balances.
Reply of Directors for above qualifications raised by Statutory Auditors in it''s Report on the Internal Financial Controls with reference to standalone financial statements:
With respect to Group''s internal financial control system towards estimating the carrying value of assets and liabilities of subsidiary companies as explained in Note 52, Note 54 (b), Note 55(b), Note 56, Note 57 and Note 58 to the accompanying Consolidated Financial Statements, shareholders may refer to replies given for respective note numbers mentioned above.
Company has adequate system for balance confirmation of trade payable and receivables. The Company is reconciling the outstanding balance of trade payables and receivables on regular intervals. The Company has an internal audit system which is commensurate with the size and nature of its business and there is no weakness in recognition of income and expenses. Further as part of internal audit scope such balances are also reviewed by them and hence possibility of misstatement is not there.
The company has adequate system of manual approval of processing of journal entries in accounting software and journal entries are also verified by the internal auditor. The Company has an internal audit system which is commensurate with the size and nature of its business Company are in process of incorporating the maker checker process in accounting software for processing of journal entries.
It may be noted that there were no material misstatements due to the weakness in system for processing of journal entries in accounting software due to absence of maker checker system.
The company has received a letter from the cost auditor M/s. J B Mistri & Co., Cost Accountants in Practice having Firm Reg. No. 101067 to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment.
The board of directors of the company has appointed M/s. J B Mistri & Co. & Associates, Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time. The Cost Audit Report for the year 2022-23 was filed with the Ministry of Corporate Affairs within stipulated time period. The members are requested to ratify the remuneration to be paid to the cost auditors of the company.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Ashish Shah & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2024. The Secretarial Audit Report is annexed as Annexure-4.
Qualifications to the secretarial audit report:
1. Pursuant to Section 405 of the Companies Act, 2013 the Central Government made it necessary for all the "Specified Companies" to furnish the Form MSME-1, Half Yearly return about the payment to micro and small enterprise suppliers. However, the Company has not filed the said form for the period ended on 30th September, 2023 and on 31st March, 2024 respectively with Ministry of Corporate Affairs and to that extent not complied with the provisions of the Act.
Reply by Management: The Company is in process to identify MSME registered entities and will take step to file the required Forms in upcoming half year ended.
2. Shares have been Pledged of Ahmedabad Ring Road held by SIPL with respect to Loan taken by ARRIL from UDHYA-VJ Realty Private Limited. Charge Form for the above share pledge has not been filed by the Company with ROC and to that extent there is Non-Compliance.
Reply by Management: Due to oversight of Management, charge form was not filed within due date.
3. Pursuant to Regulation 60(2) of SEBI LODR Regulations, Intimation to Stock Exchange as required by the listed entity shall give notice in advance of at least seven working days (excluding the date of intimation and the record date) to the recognised stock exchange(s) of the record date or of as many days as the stock exchange(s) may agree to or require specifying the purpose of the record date. However, The listed entity shall give notice in advance of at least seven working days to the recognised stock exchange(s) of the record date was not observed by the Company.
Reply by Management: The Company will consider to avoid such non-compliance in future.
4. Pursuant to Regulation 23(9) of SEBI LODR Regulations, 2015, Company shall submit to the Stock Exchange disclosure of related party transactions in the format as specified by the Board from time to time and publish the same on its website. However, there is delay of one day in compliance with disclosure with related party transactions on consolidated basis for the half year ended 30/09/2023 found.
Reply by Management: The Company will consider to avoid such non-compliance in future.
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.
As per the provisions of section 92(3) of the Companies Act, 2013, the Annual Return of the Company for the FY 2023-24 is placed on the website of the Company and weblink for the same is https://www.sadbhavinfra.co.in/en/pdf/2022- 09/SIPLFormMGT-7-FY 2023-24.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no earning and expenditure in the foreign currency.
Since the Company does not have any manufacturing activities, the other particulars required to be provided in terms of Section 134(3) (m) of the Companies Act, 2013 are not applicable.
PARTICULARS OF MANAGERIAL REMUNERATION AND EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure-5 to this Report.
Your Directors state that none of the Executive Directors of the Company receives any remuneration or commission from any of its Subsidiaries. There was no employee holding by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company.
THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:
No IBC matters are pending as on date of this Report.
THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:
Not Applicable for the year under review.
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.
3. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings.
4. The Managing Director of the Company has not received any commission from the Company and not disqualified from receiving any remuneration or commission from any of subsidiaries of the Company.
5. No fraud has been reported by the Auditors to the Audit Committee or the Board.
Your Directors thank the Central and various State Governments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future.
Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.
Mar 31, 2018
To,
The Members,
The Directors have pleasure in submitting their 12th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2018.
FINANCIAL RESULTS
The Groupâs financial performances for the year under review along with previous yearâs figures are given hereunder: (Rs. In Million)
|
Standalone |
Consolidated |
|||
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
|
Revenue from Operations |
3,377.92 |
2,854.45 |
22,760.58 |
13480.09 |
|
Other Income |
469.58 |
282.65 |
464.22 |
558.81 |
|
Total Revenue |
3,847.50 |
3137.10 |
23,224,80 |
14038.90 |
|
Profit Before Taxation |
1,046.11 |
525.88 |
(2,972.22) |
(3524.95) |
|
Tax Expense |
368.71 |
114.31 |
407.51 |
76.04 |
|
Profit/(Loss) for the period after tax and minority interest |
677.40 |
411.57 |
(3,290.37) |
(3531.44) |
|
Other comprehensive income |
(0.01) |
(0.37) |
1.37 |
(8.45) |
|
Total comprehensive income (after tax) |
677.39 |
411.20 |
(3,289.00) |
(3539.89) |
DIVIDEND
Based on the Companyâs performance, the Directors are pleased to recommend for approval of the members a final dividend @ 3% i.e. Rs.0.30 (Thirty Paise) per equity shares of Rs.10/- for Financial year 2017-18 taking the total Dividend @ 5% i.e. Rs.0.50 (Fifty paise) per Equity Share of Rs.10/- each (including interim dividend @ 2% i.e. Rs.0.20 per equity share of Rs.10/- each already declared by Board of Directors of the Company on 17th November, 2017) to shareholders of the Company. If the dividend, as recommended above, is declared by the Members at the Annual General Meeting (âAGMâ), the total outflow towards dividend on Equity Shares for the year would be Rs.17.61 crores.
DIVIDEND DISTRIBUTION POLICY
Securities and Exchange Board of India (âSEBIâ), by its notification dated 8th July, 2016, has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), introducing new Regulation 43A mandating the top 500 listed entities, based on market capitalization calculated as on 31st March of every financial year, to formulate a Dividend Distribution Policy and disclose the same in their Annual Reports and on their websites.
Accordingly, the Board of the Company has adopted a Dividend Distribution Policy, which is uploaded on the Companyâs website at the web link: http://www.sadbhavinfra.co.in/en/pdf/dividend-distribution-policy.pdf
RESERVES
Company has transferred Rs.462.19 Million to Debenture Redemption Reserve Account.
SHARE CAPITAL
The paid up Equity Share Capital as at 31st March, 2018 is Rs.352,22,52,160/-. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
During the year under review, your Company reported a top-line growth of 18.34% over the previous year. At Standalone level, the Revenue from Operations amounted to Rs.3377.92 Million as against Rs.2,854.45 Million in the previous year. The Net Profit before Tax amounted to Rs.1,046.11 as against Rs.525.88 Million in the previous year. The Net Profit for the year amounted to Rs.677.40 Million against Rs.411.57 Million reported in the previous year and total comprehensive income for the year amounted to Rs.677.39 Million as against Rs.411.20 Million in the previous year.
The Consolidated Revenue from Operations amounted to Rs.22,760.58 Million as against Rs.13,480.09 Million in the previous year, registering a growth of 68.85%. The Consolidated Net Loss before Tax amounted to Rs.2,972.22 Million as against Rs.3,524.95 Million in the previous year. The Consolidated Net Loss after Tax amounted to Rs.3,379.73 Million as against Rs.3,600.99 Million in previous year and Total Comprehensive Loss for the year amounted to Rs.3,378.47 Million against Rs.3,609.64 Million in previous year.
The performance and financial position of the subsidiary companies are included in the Consolidated Financial Statements forming part of this Annual Report.
CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There are no material changes in the nature of business during the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitment if any affecting the financial position of the company occurred between the ends of the financial year to which this financial statements relate and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
RISK MANAGEMENT
Risk management comprises all the organizational rules and actions for early identification of risks in the course of doing business and the management of such risks.
Although not mandatory, as a measure of good governance, the Company has constituted a Risk Management Committee of the Board. The Committee reviews the Companyâs performance against identified risks, formulates strategies towards identifying new and emergent risks that may materially affect the Companyâs overall risk exposure and reviews the Risk Management Policy and structure.
This robust Risk Management framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Companyâs competitive advantage.
The Company has adopted a Risk Management Policy, pursuant to Section 134 of the Act.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. It has documented policies and procedures covering financial and operating functions and processes. These policies and procedures are updated from time to time and compliance is monitored by the internal audit function as per the audit plan. The Company continues its efforts to align all its processes and controls with best practices.
Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Boardâs Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL i) Changes in Directors and Key Managerial Personnel:
Pursuant to Section 152 of the Companies Act, 2013, Mr. Shashin V. Patel (DIN: 00048328), Chairman and Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.
During the year, Mr. Vasistha C. Patel was re-appointed as Managing Director of the Company w.e.f. 1st January, 2018 and Mr. Varun Mehta was re-appointed as Chief Financial Officer of the Company.
There were no other changes in Key Managerial Personnel during the year.
ii) Declaration by an Independent Director(s):
All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.
iii) Procedure for Nomination and Appointment of Directors:
The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Directorâs appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidateâs vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.
iv) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director:
The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.
Independence: In accordance with the above criteria, a Director will be considered as an âIndependent Directorâ if he/she meets with the criteria for âIndependent Directorâ as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.
Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the âCode for Independent Directorsâ as outlined in Schedule IV to the Act.
v) Annual Evaluation of Board Performance and Performance of its Committees and of Directors:
Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
The Boardâs functioning was evaluated on various aspects, including inter alia structure of the Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissent, recording of minutes and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of managementâs performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.
Directors were evaluated on aspects such as attendance and contribution at Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director.
Directors were evaluated on aspects such as professional qualifications, prior experience, especially experience relevant to the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, independence and guidance/support to management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including effectiveness of leadership and ability to steer meetings, impartiality, ability to keep shareholdersâ interests in mind and effectiveness as Chairman.
Areas on which the Committees of the Board were assessed included mandate and composition; effectiveness of the Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
Independent Directors, who also reviewed the performance of the Board as a whole. The NRC also reviewed the performance of the Board, its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.
NOMINATION AND REMUNERATION POLICY
The Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.
The Nomination and Remuneration Committee has considered following factors while formulating Policy:
(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.
Details of the Remuneration Policy are given in the Corporate Governance Report.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (âInd ASâ), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
The annual financial statements of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information at any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (1) (c) of Listing Regulations. The Policy, as approved by the Board, is uploaded on the Companyâs website.
The consolidated financial results reflect the operations of the following subsidiaries.
* Pursuant to acquisition of 100% stake in Dhule Palesner Tollway Limited from Sadbhav Engineering Limited, Hindustan Construction Company Limited and John Laing Investment Limited, as at the date of this report, 100 shares each of Sadbhav Engineering Limited, Hindustan Construction Company Limited and John Laing Investment Limited are pending for transfer due to pending approval from NHAI.
** In terms of Memorandum of Understanding (MOU) dated January 17, 2017 between the Company and Sadbhav Engineering Limited (âSELâ), SEL reduced its commitment, to sell investment in MBCPNL to third party, from 22% to 9% and resultantly, transferred such 13% ownership / beneficial ownership in MBCPNL to the Company, raising Companyâs holding to 91%. SEL reaffirms that consideration received by it aggregating to INR 280.13 Million, is towards transfer of entire ownership of 91% in MBCPNL, and hence, no further payment is required to be made by SIPL to SEL. The procedural formalities for transfer of equity shares were in progress as on the date of balance sheet. By virtue of MOU, 2.63% shares of MBCPNL are pending for transfer from SEL to SIPL.
# After end of the financial year 2017-18 and the date of this report, Three new wholly owned subsidiary Companies i.e. Sadbhav Bhimasar Bhuj Highway Private Limited, Sadbhav Kim Expressway Private Limited and Sadbhav Vizag Port Road Private Limited were incorporated with an object to execute highway projects as per the concessions agreements signed with NHAI and Sadbhav Hybrid Annuity Projects Limited was incorporated for providing, developing, own, maintain, operate, instruct, execute, carry out, improve, construct, repair, work, administer, manage, control or acquire, any infrastructure facilities, to undertake hybrid annuity mode projects.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules made thereunder and pursuant to Regulation 33 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015, the Company had prepared consolidated financial statements of the Company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 attached as Annexure - 1 which forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The provisions of Section 186 of the Companies Act, 2013, with respect to a loan, guarantee or security is not applicable to the Company as the Company is engaged in providing infrastructural facilities which is exempted under Section 186 of the Companies Act, 2013. The details of investment made during the year under review are disclosed in the financial statements.
FIXED DEPOSITS
During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31st March, 2018, there were no deposits which were unpaid or unclaimed and due for repayment.
INSURANCE
All properties and insurable interests of the company to the extent required have been adequately insured.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were at armâs length basis. A detailed report on material contracts and arrangements made during the year 2017-18, being armâs length transactions have been reported and annexed hereto in Form AOC-2 as Annexure - 2 and forms part of this report.
There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companyâs website at the web link: http://www.sadbhavinfra.co.in/en/pdf/policy-on-related-party-transaction.pdf
NUMBER OF MEETINGS OF THE BOARD
During the year, Five (5) board meetings were convened and held. Details of board meetings and committee meeting are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
COMMITTEES OF BOARD
The Board has constituted an Audit Committee with Mr. Sandip V. Patel as Chairman and Mr. Arun S. Patel and Mr. Nitin R. Patel, as Members. There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board.
Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2017-18.
Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that suchsystems are adequate and operating effectively.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF).
The provisions of Section 125(2) of the Act do not apply as there was no unclaimed and unpaid dividend or any other amount which require to transfer to Investor Education and Protection Fund (IEPF).
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a companyâs sense of responsibility towards the community and environment in which it operates. It is the continuing commitment by business to behave ethically and contribute to economic development of the society at large and building capacity for sustainable livelihoods. The Company believes in conducting its business responsibly, fairly and in utmost transparent manner. It continually seeks ways to bring about an overall positive impact on the society and environment where it operates and as apart of its social objectives. This policy has been formally formulated and adopted in terms of Section 135 of the Act and Rules framed thereunder to undertake CSR activities.
The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Vasistha C. Patel as Chairman and Mr. Nitin R. Patel, Mr. Sandip V. Patel, and Mr. Atul N. Ruparel as Members of the Committee.
The responsibilities of the CSR Committee include:
i. Formulating and recommending to the Board of Directors the CSR Policy and indicating activities to be undertaken.
ii. Recommending the amount of expenditure for the CSR activities.
iii. Monitoring CSR activities from time to time.
In view of the net average loss of Rs.24.34 Million under review, your Company was not required to spend any amount towards the CSR activities, as per the applicable provisions of Section 135 of the Act. Accordingly, the details of the CSR activities during the year under review are not provided in this Report. The Report on CSR activities is attached as Annexure - 3.
BUSINESS RESPONSIBILITY REPORTING
As per Regulation 34 (2) (f) of the Listing Regulations, listed companies shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the prescribed format. This provision is applicable to top 500 listed companies based on market capitalization as on 31st March, 2018. The Business Responsibility Report of the Company for the financial year ended on March 31, 2018 has been provided separately and forming part of the Annual Report.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
The Company has not received any complaint of sexual harassment during the financial year 2017-18.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also uploaded on the Companyâs website at the web link: http://www.sadbhavinfra.co.in/en/pdf/familiarization-programme-for-independent-directors-2017-18.pdf
AUDITORS
(i) Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, M/s. Manubhai & Shah LLP, Chartered Accountants, Ahmedabad having Firm Registration No. 106041W/W100136 were appointed as Joint Statutory Auditors of the Company from conclusion of the 8th Annual General Meeting (AGM) of the Company held on 5th September, 2014 till the conclusion of the 12th AGM to be held in the year 2018. The term of M/s.Manubhai & Shah LLP has been expiring in the year 2018. In place of said Joint Statutory Auditor, Board has recommended to appoint M/s. S G D G & Associates LLP, Chartered Accountants, Ahmedabad (S G D G) (Firm Registration No. W100188) from conclusion of the AGM to be held in the year 2018 till the conclusion of the 17th AGM to be held in 2023.
S G D G have given their consent to act as Joint Statutory Auditors and have confirmed that their appointment, if made, will be in accordance with Section 139 read with Section 141 of the Act. Members are requested to approve the appointment of S G D G and authorize the Board of Directors to fix their remuneration.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. S R B C & Co. LLP, Chartered Accountants having Firm Registration No. 324982E was appointed as Joint Statutory Auditors of the Company from conclusion of the 8th Annual General Meeting (AGM) of the Company held on 5th September, 2014 till the conclusion of the 13th AGM to be held in the year 2019.
The Ministry of Corporate Affairs vide its Notification dated 7th May, 2018, has dispensed with the requirement of ratification of Auditorâs appointment by the shareholders, every year. Hence, approval of the Members for the ratification of Auditorâs appointment is not being sought at the ensuing Annual General Meeting and M/s. S R B C & Co. LLP, Chartered Accountants, will continue to act as auditors of the Company till financial year 2018-19.
The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
(ii) Cost Auditors
The company has received a letter from the cost auditors M/s. J B Mistri & Co., Cost Accountants in Practice having Firm Reg. No. 101067 to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment.
The board of directors of the company has appointed M/s. J B Mistri & Co. & Associates, Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time. The Cost Audit Report for the year 2016-17 was filed with the Ministry of Corporate Affairs within stipulated time lines. The members are requested to ratify the remuneration to be paid to the cost auditors of the company.
(iii) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Ashish Shah & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2018. The Secretarial Audit Report is annexed as Annexure - 4.
There are no qualifications, reservations or adverse remarks made by Secretarial Auditor in his report.
SECRETARIAL STANDARDS OF ICSI
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute of Company Secretaries of India and approved by the Central Government.
EXTRACT OF THE ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT-9 is annexed as Annexure - 5.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no earning in the foreign currency and no foreign exchange earning and out go during the year.
Since the Company does not have any manufacturing activities, the other particulars required to be provided in terms of Section 134(3)(m) of the Companies Act, 2013 are not applicable.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure - 6 to this Report.
Details of employee remuneration as required under provisions of Section 197(12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available at the registered office of the Company during working hours, pursuant to the provisions of the first proviso to Section 136(1) of the Act and any member interested in obtaining such information may write to the Company Secretary and the same will be made available to any such member on request.
ACKNOWLEDGEMENTS
Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.
For and on behalf of the Board of Directors
Shashin V. Patel
Date: 8th August, 2018 Chairman
Place: Ahmedabad DIN: 00048328
Mar 31, 2017
To
The Members,
The Directors hereby present the 11th Annual Report of the Company together with the audited financial statements for the year ended 31st March, 2017.
FINANCIAL PERFORMANCE
The financial performance for the year under review along with previous yearâs figures are given hereunder:
(Rs. in Million)
|
Particulars |
Standalone |
Consolidated |
||
|
2016-2017 |
2015-2016 |
2016-2017 |
2015-2016 |
|
|
Revenue from Operations |
2,854.45 |
857.97 |
13480.09 |
19709.66 |
|
Other Income |
282.65 |
405.56 |
558.81 |
387.50 |
|
Total Revenue |
3137.10 |
1263.53 |
14038.90 |
20097.16 |
|
Profit Before Taxation |
525.88 |
(48.46) |
(3524.95) |
(3631.90) |
|
Tax Expense |
114.31 |
1.89 |
76.04 |
(106.71) |
|
Profit / (Loss) for the period after tax and minority interest |
411.57 |
(50.35) |
(3531.44) |
(3406.20) |
|
Other comprehensive income |
(0.37) |
0.06 |
(8.45) |
1.12 |
|
Total comprehensive income (after tax) |
411.20 |
(50.29) |
(3539.89) |
(3405.08) |
DIVIDEND
Keeping in view of the Companyâs need for capital for its future growth plan, requirements of working capital and the intent to finance through internal accruals, your Directors do not recommend any dividend for the year under review.
DIVIDEND DISTRIBUTION POLICY
Securities and Exchange Board of India (âSEBIâ), by its notification dated 8th July, 2016, has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), introducing new Regulation 43A mandating the top 500 listed entities, based on market capitalization calculated as on 31st March of every financial year, to formulate a Dividend Distribution Policy and disclose the same in their Annual Reports and on their websites.
Accordingly, the Board of the Company has adopted a Dividend Distribution Policy, which is uploaded on the Companyâs website at the web link: http://www.sadbhavinfra.co.in/en/pdf/dividend-distribution-policy.pdf
RESERVES
Company has transferred Rs. 224.34 Million to Debenture Redemption Reserve Account.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2017 is Rs. 352,22,52,160. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence, the details under Rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
The total revenue of your Company for the FY 2016-17 stood at Rs. 3137.10 Million as against Rs. 1263.53 Million for the FY 2015-16. Total comprehensive income after tax for the FY 2016-17 was Rs. 411.20 Million as compared Rs. (50.29) Million for the FY 2015-16 Your Directors are hopeful to get better results in the coming year.
CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There are no material changes in the nature of business during the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitment affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
RISK MANAGEMENT
Risk management comprises all organizational rules and actions for early identification of risks in the course of doing business and the management of such risks.
Although not mandatory, as a measure of good governance, the Company has constituted a Risk Management Committee of the Board. The Committee reviews the Companyâs performance against identified risks, formulates strategies towards identifying new and emergent risks that may materially affect the Companyâs overall risk exposure and reviews the Risk Management Policy and structure.
This robust Risk Management framework seeks to create transparency, minimize adverse impact on business objectives and enhance the Companyâs competitive advantage.
The Company has adopted a Risk Management Policy, pursuant to Section 134 of the Act.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has appropriate internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. It has documented policies and procedures covering financial and operating functions and processes. These policies and procedures are updated from time to time and compliance is monitored by the internal audit function as per the audit plan. The Company continues its efforts to align all its processes and controls with best practices.
Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Boardâs Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL i) Changes in Directors and Key Managerial Personnel
Pursuant to Section 152 of the Companies Act, 2013, Mr. Nitin R. Patel (DIN: 00466330) Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.
Mr. Vishnubhai M. Patel has resigned from Directorship w.e.f 3rd March, 2017 and Board has designated him with an honorary title of âChairman Emeritusâ w.e.f. 3rd March, 2017. Due to resignation of Mr. Vishnubhai M. Patel, Board has appointed Mr. Shashin V. Patel as Chairman of the Company w.e.f. 3rdMarch, 2017.
Mr. Jagdish Joshipura ceased to be Director due to sad demise on 12th November, 2016. There being no other changes in Directorship during the year under review.
Mr. Gaurav Vesasi has resigned from the post of Company Secretary and Compliance Officer of the Company w.e.f. 31st May, 2016. Mr. Hardik Modi has been appointed as Company Secretary and Compliance officer of the Company w.e.f. 8th July, 2016.
There were no other changes in Key Managerial Personnel during the year.
ii) Declaration by an Independent Director(s)
All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.
iii) Procedure for Nomination and Appointment of Directors
The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Directorâs appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.
iv) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director
The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.
Independence: In accordance with the above criteria, a Director will be considered as an âIndependent Directorâ if he/she meets with the criteria for âIndependent Directorâ as laid down in the Act and Regulation 16 (1) (b) of the Listing Regulations.
Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the âCode for Independent Directorsâ as outlined in Schedule IV to the Act.
v) Annual Evaluation of Board Performance and Performance of its Committees and of Directors
Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.
The Boardâs functioning was evaluated on various aspects, including inter alia structure of the Board, including qualifications, experience and competency of Directors, diversity in Board and process of appointment; Meetings of the Board, including regularity and frequency, agenda, discussion and dissent, recording of minutes and dissemination of information; functions of the Board, including strategy and performance evaluation, corporate culture and values, governance and compliance, evaluation of risks, grievance redressal for investors, stakeholder value and responsibility, conflict of interest, review of Board evaluation and facilitating Independent Directors to perform their role effectively; evaluation of managementâs performance and feedback, independence of management from the Board, access of Board and management to each other, succession plan and professional development; degree of fulfillment of key responsibilities, establishment and delineation of responsibilities to Committees, effectiveness of Board processes, information and functioning and quality of relationship between the Board and management.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director.
Directors were evaluated on aspects such as professional qualifications, prior experience, especially experience relevant to the Company, knowledge and competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, independence and guidance/ support to management outside Board/Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including effectiveness of leadership and ability to steer meetings, impartiality, ability to keep shareholdersâ interests in mind and effectiveness as Chairman.
Areas on which the Committees of the Board were assessed included mandate and composition; effectiveness of the Committee; structure of the Committee; regularity and frequency of meetings, agenda, discussion and dissent, recording of minutes and dissemination of information; independence of the Committee from the Board; contribution to decisions of the Board; effectiveness of meetings and quality of relationship of the Committee with the Board and management.
The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.
DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES
The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (âInd ASâ), forms part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
Up to the year ended 31st March, 2016, the Company had prepared its Financial Statements in accordance with generally accepted accounting principles in India, including accounting standards read with Section 133 of the Act notified under the Companies (Accounting Standards) Rules, 2006 (âPrevious GAAPâ). These are the Companyâs first Ind AS Financial Statements.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (1) (c) of Listing Regulations. The Policy, as approved by the Board, is uploaded on the Companyâs website.
The consolidated financial results reflect the operations of the following subsidiaries.
|
Sr. No. |
Name of Company |
CIN / GLN |
Address of the Company |
Holding/Subsidiary/ Associate |
|
1 |
Ahmedabad Ring Road Infrastructure Limited |
U45203GJ2006PLC048981 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
2 |
Aurangabad-Jalna Tollway Limited |
U45203GJ2007PLC049814 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
3 |
Bijapur-Hungund Tollway Private Limited |
U45203GJ2010PTC059669 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Subsidiary |
|
4 |
Bhilwara-Rajsamand Tollway Private Limited |
U45203GJ2012PTC072902 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
5 |
Dhule Palesner Tollway Limited * |
U45203MH2009PLC191222 |
701, 7th Floor, âCâ Wing, Godrej Coliseum, B/h Everard Nagar, Sion (East) Mumbai - 400022. |
Wholly owned subsidiary |
|
6 |
Hyderabad-Yadgiri Tollway Private Limited |
U45203GJ2010PTC059262 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
7 |
Maharashtra Border Check Post Network Limited ** |
U45201GJ2009PLC056327 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Subsidiary |
|
8 |
Nagpur-Seoni Express Way Limited |
U45203GJ2007PLC049963 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
9 |
Rohtak Hissar Tollway Private Limited |
U45203GJ2013PTC074446 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
10 |
Rohtak Panipat Tollway Private Limited |
U45202GJ2010PTC059322 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
11 |
Shreenathji-Udaipur Tollway Private Limited |
U45201GJ2012PTC069676 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
12 |
Sadbhav Nainital Highway Private Limited |
U45309GJ2016PTC091777 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
13 |
Sadbhav Rudrapur Highway Private Limited |
U45203GJ2016PTC091774 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
14 |
Sadbhav Bhavnagar Highway Private Limited |
U45309GJ2016PTC092557 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
15 |
Sadbhav Una Highway Private Limited |
U45500GJ2016PTC092589 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
|
16 |
Sadbhav Bangalore Highway Private Limited |
U45202GJ2016PTC094257 |
âSadbhav Houseâ, Opp. Law Garden Police Chowki, Ellisbridge, Ahmedabad - 380006. |
Wholly owned subsidiary |
* Pursuant to acquisition of 100% stake in Dhule Palesner Tollway Limited from Sadbhav Engineering Limited, Hindustan Construction Company Limited and John Laing Investment Limited, as at the date of this report, 100 shares each of Sadbhav Engineering Limited, Hindustan Construction Company Limited and John Laing Investment Limited are pending for transfer due to pending approval from NHAI.
** In terms of Memorandum of Understanding (MOU) dated January 17, 2017 between the Company and Sadbhav Engineering Limited(âSELâ), SEL reduced its commitment, to sell investment in MBCPNL to third party, from 22% to 9% and resultantly, transferred such 13% ownership / beneficial ownership in MBCPNL to the Company, raising Companyâs holding to 91%. SEL reaffirms that consideration received by it aggregating to INR 280.13 Million, is towards transfer of entire ownership of 91% in MBCPNL, and hence, no further payment is required to be made by SIPL to SEL. The procedural formalities for transfer of equity shares were in progress as on the date of balance sheet. By virtue of MOU, 2.63% shares of MBCPNL are pending for transfer from SEL to SIPL.
# Between the end of the financial year 2016-17 and the date of this report, two new wholly owned subsidiary Companies i.e. Sadbhav Vidarbha Highway Private Limited and Sadbhav Udaipur Highway Private Limited, were incorporated with an object to execute highway projects as per the concessions agreements signed with NHAI.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT
Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules made thereunder and pursuant to Regulation 33 of the Listing Regulations, Company has prepared consolidated financial statements of the Company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 attached as Annexure - 1 which forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The provisions of Section 186 of the Companies Act, 2013, with respect to a loan, guarantee or security is not applicable to the Company as the Company is engaged in providing infrastructural facilities which is exempted under Section 186 of the Companies Act, 2013. The details of investment made during the year under review are disclosed in the financial statements.
FIXED DEPOSITS
During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31st March, 2017, there were no deposits which were unpaid or unclaimed and due for repayment.
INSURANCE
All properties and insurable interests of the Company to the extent required have been adequately insured.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were at armâs length basis. A detailed report on material contracts and arrangements made during the year 2016-17, being armâs length transactions have been reported and annexed hereto in Form AOC-2 as Annexure - 2 and forms part of this report.
There are no materially significant related party transactions made by the Company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the Company at large. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companyâs website at the web link: http://www.sadbhavinfra.co.in/en/pdf/policy-on-related-party-transaction.pdf
NOMINATION AND REMUNERATION POLICY
The Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.
The Nomination and Remuneration Committee has considered following factors while formulating Policy:
(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.
Details of the Remuneration Committee are given in the Corporate Governance Report.
AUDIT COMMITTEE
Board has duly constituted Audit Committee as per provisions of Section 177 of the Companies Act, 2013. The composition, terms of the audit committee and other details are mentioned in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the year, Six (6) Board meetings were convened and held. Details of Board meetings and committee meetings are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2016-17.
Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The provisions of Section 125(2) of the Act do not apply as there was no dividend declared and paid by the Company.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a Companyâs sense of responsibility towards the community and environment in which it operates. It is the continuing commitment by business to behave ethically and contribute to economic development of the society at large and building capacity for sustainable livelihoods. The Company believes in conducting its business responsibly, fairly and in utmost transparent manner. It continually seeks ways to bring about an overall positive impact on the society and environment where it operates and as apart of its social objectives. This policy has been formally formulated and adopted in terms of Section 135 of the Act and Rules framed thereunder to undertake CSR activities.
The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Vasistha C. Patel as Chairman and Mr. Nitin R. Patel, Mr. Sandip V. Patel, and Mr. Atul N. Ruparel as Members of the Committee.
The responsibilities of the CSR Committee include:
i. Formulating and recommending to the Board of Directors the CSR Policy and indicating activities to be undertaken.
ii. Recommending the amount of expenditure for the CSR activities.
iii. Monitoring CSR activities from time to time.
As there was average loss of Rs. 173.94 Million, your Company was not required to spend any amount towards the CSR activities, pursuant to the applicable provisions of Section 135 of the Act. Accordingly, the details of the CSR activities during the year under review are not provided in this Report. The Report on CSR activities is attached as Annexure - 3.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
The Company has not received any complaint of sexual harassment during the financial year 2016-17.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
COMMITTEES OF BOARD
Details of various committees constituted by the Board of Directors as per provisions of the Listing Regulations and Companies Act, 2013 are given in the Corporate Governance Report and forms part of this report.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarization programme are explained in the Corporate Governance Report. The same is also uploaded on the Companyâs website at the web link: http://www. sadbhavinfra.co.in/en/pdf/familiarization-programme-for-independent-Directors-2016-17.pdf
AUDITORS
(i) Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act , 2013 and the rules framed thereunder, M/s. Manubhai & Shah LLP, Chartered Accountants, Ahmedabad having Firm Registration No. 106041W/W100136 were appointed as Joint Statutory Auditors of the Company from conclusion of the 8thAnnual General Meeting (AGM) of the Company held on 5th September, 2014 till the conclusion of the 12th AGM to be held in the year 2018 subject to ratification of their appointment at every AGM.
Pursuant to the provisions of Section 139 of the Companies Act , 2013 and the rules framed thereunder, M/s. S R B C & Co. LLP, Chartered Accountants having Firm Registration No. 324982E/E300003 were appointed as Joint Statutory Auditors of the Company from conclusion of the 8th Annual General Meeting (AGM) of the Company held on 5th September, 2014 till the conclusion of the 13th AGM to be held in the year 2019 subject to ratification of their appointment at every AGM.
Members are requested to consider the ratification of the appointment of M/s. Manubhai & Shah LLP and M/s. S R B C & Co. LLP and authorize the Board of Directors to fix their remuneration. Both the auditors have submitted a certificate, confirming that their appointment, if ratified, will be in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
(ii) Cost Auditors
The Company has received a letter from the cost auditors M/s. Rajendra Patel & Associates, Cost Accountants in Practice having Firm Reg. No. 101163 to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment. The cost audit report for the year 2015-16 was filed before the due date with MCA.
The Board of Directors of the Company has appointed M/s. Rajendra Patel & Associates, Cost Accountants as the cost auditors of the Company to conduct the audit of cost records for the FY-2017-18 maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time. The members are requested to ratify the remuneration to be paid to the cost auditors of the Company.
(iii) 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 Board of Directors of the Company had appointed M/s. Ashish Shah & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2017. The Secretarial Audit Report is annexed as Annexure - 4.
There are no qualifications, reservations or adverse remarks made by Secretarial Auditor in his report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9 is annexed as Annexure - 5.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
There was no earning in the foreign currency, while expenditure during the year was Rs. 0.33 Crores.
Since the Company does not have any manufacturing activities, the other particulars required to be provided in terms of Section 134(3)(m) of the Companies Act, 2013 are not applicable.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Companies Act, 2013 and Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure - 6 to this Report.
There was no employee of the Company employed throughout the financial year with salary above the limits mentioned and under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Further, there is no employee employed throughout the financial year or part thereof, was in receipt of remuneration in aggregate, in excess of that drawn by the Managing Director and holds by himself or along with his spouse and dependent children, not less than two per cent (2 per cent) of the equity shares of the Company.
BUSINESS RESPONSIBILITY REPORTING
As per Regulation 34 (2) (f) of the Listing Regulations, listed companies shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the prescribed format. This provision is applicable to top 500 listed companies based on market capitalisation as on 31st March, 2017. Hence, this clause is first time applicable to your Company. The Business Responsibility Report of the Company for the financial year ended on 31st March, 2017 has been provided in Annexure - 7.
ACKNOWLEDGMENTS
Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.
For and on behalf of the Board of Directors
Shashin V. Patel
Date : 10-08-2017 Chairman
Place : Ahmedabad DIN: 00048328
Mar 31, 2015
The Directors have pleasure in submitting their 9th Annual Report of the
Company together with the Audited Statements of Accounts for the year
ended 31st March, 2015.
FINANCIAL RESULTS
The Group's financial performances for the year under review along with
previous year's figures are given hereunder:
(Rs, in Million)
Particulars 2014 - 2015 2013 - 2014
Revenue from Operations 5002.99 3743.99
Other Income 285.88 215.89
Total Revenue 5288.87 3959.88
Profit Before Taxation (3433.91) (700.09)
Less: Provision for Taxation
1. Current Tax - 100.42
2. MAT Credit entitlement - -
3. Deferred Tax 0.22 (0.08)
4. Earlier Years' Tax 21.35 0.44
(Loss) After tax for the year
before share of losses of minority
interest (3,455.48) (800.88)
Less: Share of (Loss) attributable
to Minority Interest (302.09) (404.63)
Add: Share of (Loss) of Minority
Interest of Earlier Years (279.63) -
(Loss) for the year After
minority interest (3,433.02) (396.25)
Add: Balance in Statement of
Profit and Loss (1305.31) (909.01)
Less: Transfer to Debenture
Redempton Reserve during the year (109.21) -
Total (4847.54) (1305.26)
Making Total amount available for
appropriation which has been
appropriated as follows: - -
1. Proposed Dividend - -
2. Corporate Dividend Tax - -
3. General Reserve - -
4. Balance at the end of the year (4847.54) (1305.26)
DIVIDEND:
During the year under review, your Company has incurred loss mainly on
account of higher interest and finance charges & amortization of the
project cost; your Directors do not recommend any dividend to the
members of the Company for the year.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:
The total Income during the year has increased from Rs, 3959.88 Million
to Rs, 5288.87 Million i.e. approx. 33.56% over the last year. The
Loss before Tax has increased from Rs, 700.09 Million to Rs, 3433.91
Million. Your directors are hopeful to get better results in the
upcoming years.
CHANGE IN THE NATURE OF BUSINESS, IF ANY:
There are no material changes in the nature of business during the
year.
MATERIAL CHANGES AND COMMITIMENT IF ANY AFFECTING THE FINANCIAL
POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR
TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
Change in accounting policies during the year:
(i) Contractual obligation to restore the infrastructure to a specified
level of serviceability:
During the year, the Group has reassessed the accounting treatment for
Contractual Obligations to periodically maintain Project Asset as per
the terms of the concession agreement, from recognizing the Major
Maintenance Expense in the year of actual expenditure to recognize
expense at the best estimate of the expenditure required to settle the
present obligation at the Balance Sheet date, in accordance with
Accounting Standard (AS) -29 "Provisions, Contingent Liabilities and
Contingent Assets". The same is reviewed at each balance sheet date and
adjustments if any to the carrying amount is provided for accordingly.
The change in accounting policy has resulted in increase in expenses and
corresponding increase in loss for the year ended March 31, 2015 by Rs,
35.86 Million.
(ii) Additional Concession Fees Payable to National Highways Authority
of India (NHAI):
Post deferment of premium in the current year, the Group has reassessed
the accounting treatment on premium payment to NHAI. In order to more
appropriately present the Financials Statements, total premium payable
of Rs, 22,629.71 Million as per the concession agreement has been
capitalized as 'Intangibles Assets-Toll Collection Rights' and amortized
over the period of service concession agreement as per the method
prescribed in Part A to the Schedule II to the Companies Act, 2013 and
corresponding obligation for committed premium has been recognized as
liabilities. The total premium payable up to March 31, 2014 of Rs,
263.70 Million was charged to Statement of Profit and Loss. Due to
change in accounting policy in the current year, the amount of premium
payable of Rs, 263.70 Million After adjusting Rs, 110.38 Million (Net
Amount Rs, 153.32 Million) towards actual amortization, has been written
back in consolidated statement of Profit and loss account as exceptional
item. (Refer note 38)
Due to change in accounting policy, loss before tax for the year ended
March 31, 2015 has decreased by Rs, 330.61 Million.
(iii) Treatment of Ancillary Cost of Borrowing during Construction
Period:
With Effect from April 1, 2014, one of the Subsidiary, viz. MBCPNL has
retrospectively revised the method of amortization of its ancillary
borrowing cost over tenure of loan to capitalization of ancillary
borrowing as part of project cost into the intangible assets.
Management believes that this change would result in a more appropriate
preparation or presentation of the financial statements of the enterprise
and consistent with group accounting policy. The amortization proton of
operational check posts have been charged of two statement of Profit &
loss account till March 31, 2014 as per the earlier basis to the extent
of Rs, 8.38 Million has been written back during the year ended March
31, 2015. This change in accounting policy has resulted in decrease in
ancillary borrowing cost expenses and corresponding decrease in loss
for the year by Rs, 8.38 Million which has been disclosed under other
income.
Had the Subsidiary continued to use the earlier method to charge of
amortization of ancillary borrowing cost to consolidated statement of
Profit & loss for operation, the Loss for the current period would have
been higher by Rs, 11.2 Million.
(iv) Depreciation:
Depreciation on fixed asset is calculated at the rates arrived at based
on the useful lives estimated by the management. Further, pursuant to
the notification of Schedule II of the Companies Act 2013, by the Ministry
of Corporate Affairs effective 1st April 2014, the management has
internally reassessed and changed, wherever necessary the useful lives
and the residual value to compute Depreciation, to conform to the
requirements of the Companies Act, 2013 and other consideration, as
applicable.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S
OPERATIONS IN FUTURE:
M/s. Montecarlo Ltd., the minority Shareholder of the subsidiary
Company Bijapur Hungund Tollway Private Limited, has fled Company
Petton No. 78 of 2013 under Sections 397,398 of the Companies Act, 1956
before the Hon'ble Company Law Board (CLB), Mumbai Bench, alleging acts
of oppression and mismanagement by the majority shareholders SIPL, SEL
(Sadbhav Group) and the past and present Directors of the Company
appointed by the Sadbhav Group. SIPL had fled an Application to stay
proceedings before the CLB and refer maters to arbitration on the ground
that all disputes raised in the Company Petton were arbitral and
should therefore be referred to arbitration under the arbitration clause
contained in the Shareholders Agreement dated July 9, 2010 between
Montecarlo, Sadbhav and the Company. The said Application was dismissed
by the CLB by Order dated January 8, 2014. SIPL then proceeded to file a
Writ Petton before the Hon'ble Gujarat High Court challenging the
January 8 Order. The Writ Petton was dismissed by Order dated August
14, 2014. SIPL has fled Letters Patent Appeal No.1070 of 2014 before the
Division Bench of the Hon'ble Gujarat High Court against the August 14
Order, The Hon'ble Gujarat High Court has by Order dated September 18,
2014 continued the interim Orders passed during the pendency of the Writ
Petton and further directed that the proceedings of Company Petton No.
78 of 2013 shall not proceed any further. The LPA is, pending hearing
before the Hon'ble Gujarat High Court. There is no financial impact on
the company in relation to the said litigation
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH
REFERENCE TO THE FINANCIAL STATEMENTS:
Your Company has strong Internal Controls and Management systems. These
systems enable the Company to comply with Internal Company policies,
procedures, standard guidelines and local laws to help protect
Company's Assets and Confidential information against financial losses and
unauthorized use. Further, Company has appointed Internal Auditor and
based on findings of internal audit report, the company further took
Acton to strengthen control measures.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
Name CIN / GLN Address of the Company Holding / Subsidiary
/ Associate
Ahmadabad
Ring Road U45203GJ2006
PLC048981 "Sadbhav House", Opp.
Law Subsidiary Company
Infras-
tructure
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Nagpur-
Seoni U45203GJ2007
PLC049963 "Sadbhav House", Opp.
Law Subsidiary Company
Expressway
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Auranga-
bad-Jalna U45203GJ2007
PLC049814 "Sadbhav House", Opp.
Law Subsidiary Company
Tollway
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Shree
nathji-
Udaipur U45201GJ2012
PTC069676 "Sadbhav House",
Opp. Law Subsidiary Company
Tollway
Private
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Hyderabad
Yadgiri U45203GJ2010
PTC059262 "Sadbhav House",
Opp. Law Subsidiary Company
Tollway
Private
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Bijapur
Hungund U45203GJ2010
PTC059669 "Sadbhav House",
Opp. Law Subsidiary Company
Tollway
Private
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Rohtak
Panipat
Tollway U45202GJ2010
PTC059322 "Sadbhav House",
Opp. Law Subsidiary Company
Private
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Mahara-
shtra
Border
Check U45201GJ2009
PLC056327 "Sadbhav House",
Opp. Law Subsidiary Company
Post
Network
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Bhilwara-
Rajsamand U45203GJ2012
PTC072902 "Sadbhav House",
Opp. Law Subsidiary Company
Tollway
Private
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Rohtak
Hissar
Tollway U45203GJ2013
PTC074446 "Sadbhav House",
Opp. Law Subsidiary Company
Private
Limited Garden Police Chowki,
Ellisbridge,
Ahmadabad  380006.
Sadbhav
Engi-
neering
Limited L45400GJ1988
PLC011322 "Sadbhav House",
Opp. Law Holding Company
Garden Police
Chowki, Ellisbridge,
Ahmadabad  380006.
PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES,
ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED
FINANCIAL STATEMENT:
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 subsidiaries, associates and joint venture
companies is attached as Annexure in Form AOC 1 prepared under Section
129(3) of the Companies Act, 2013 to the consolidated Financial
Statements of the Company which forms part of this report.
JOINT STATUTORY AUDITORS:
Pursuant to provisions of Section 139 of the Act and rules framed
there under,
M/s. Manubhai & Shah, Chartered Accountants, Ahmadabad, having Firm
Registration No. 106041W was appointed as joint statutory auditors of
the Company from the conclusion of 8th annual general Meeting tll the
conclusion of the 12th annual general Meeting to be held on in the year
2018, subject to ratification of their Appointment at every annual general
Meeting.
M/s. S R B C & CO LLP, Chartered Accountants, Ahmadabad, having Firm
Registration No. 324982E was appointed as joint statutory auditors of
the Company from the conclusion of 8th annual general Meeting tll the
conclusion of the 13th annual general Meeting to be held on in the year
2019, subject to ratfication of their Appointment at every annual general
Meeting.
EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE
REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY
SECRETARY IN THEIR REPORTS:
The Auditors' Report to the Shareholders does not contain any
Qualification. There were no reservations or adverse remarks made by the
Auditors in their report. M/s. Ashish Shah & Associates, Practicing
Company Secretaries, were appointed as Secretarial Auditor of the
Company to conduct the secretarial audit for the FY-2014-15. The
Secretarial Audit Report does not contain any Qualification, reservation
or adverse remark. The Secretarial Audit Report is attached as
Annexure-1 to this report.
AUDIT COMMITTEE:
The audit Committee of the Company is constituted in line with the
provisions of Section 177 of the Companies Act, 2013. The composition of
audit Committee is given below:
1. Mr. Arun Patel
2. Mr. Sandip Patel
3. Mr. Nitn Patel
Members elect chairman in the Meeting itself.
SHARE CAPITAL:
A) Issue of equity shares with differential rights
The Company has not issued any equity shares with differential rights
during the year under review.
B) Issue of sweat equity shares
The Company has not issued any Sweat Equity Shares during the year
under review.
C) Issue of employee stock options
The Company has not provided any Stock Option Scheme to the employees.
D) Provision of money by Company for purchase of its own shares by
employees or by trustees for the benefit of employees
The Company has not bought back or provided for buyback of any of its
securities during the year under review.
E) Issue of Bonus Shares
The company has issued 28,26,93,710 shares as bonus shares on 29th
October, 2014.
F) Conversion of Compulsory Convertible Cumulative Preference Shares into
Equity Shares
The Company has conversed 2250774 Nos. of Compulsory Convertible
Cumulative Preference Shares into 2262200 Nos. of Equity Shares.
G) Conversion of Compulsory Convertible Debentures into Equity Shares
The Company has conversed 1100950 Nos. of Compulsory Convertible
Debentures into 01 Equity Share.
H) Issue of Equity Shares
The company has issued 4,12,62,135 equity shares as fresh issue and an
offer for sale of 3235762 Equity shares by Xander Investment Holding
XVII Limited and 3235762 Equity Shares by Norwest Venture Partners
VII-A-Mauritus under Initial Public Offer.
EXTRACT OF THE ANNUAL RETURN:
Extract of Annual Return of the Company in Form MGT-9 is attached as
Annexure-2.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars regarding conservation of energy, technology absorption
and Foreign Exchange earnings and outgo pursuant to Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8(3) of the Companies
(Accounts) Rules, 2014 are not applicable to the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR) (APPLICABLE TO EVERY COMPANY
HAVING NET WORTH OF RUPEES FIVE HUNDRED CRORES OR MORE, OR TURNOVER OF
RUPEES ONE THOUSAND CRORES OR MORE OR A NET PROFIT OF RUPEES FIVE
CRORES OR MORE DURING ANY FINANCIAL YEAR):
The Company has developed and implemented the Corporate Social
Responsibility imitates during the year under review. The report on
CSR actives is attached as Annexure-3.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Shashin V. Patel is liable to retre by rotation at the ensuing
Annual General Meeting and being eligible to offer himself for
reappointment. Mr. Vasistha C. Patel was re-appointed as Managing
Director and Mr. Varun Mehta was appointed as Chief Financial Officer
of the Company. Mr. Apurva Gupta, Mr. Jayant Goel, Mr. Narendra Patel
and Mr. Ravi Kapoor resigned from the directorship of the company due
to pre-occupation. Mr. Arun Patel, Mr. Atul Ruparel, Mr. Mirat
Bhadlawala, Mrs. Daksha Shah and Mr. Jagdish Joshipura have been
appointed as the Independent Directors subject to the approval of
shareholders of the company in the General Meeting. Hence, the
shareholders are requested to approve the Appointment of above mentioned
independent directors. There being no other changes in directorship
during the year under review.
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies
Act, 2013 the Board hereby submits its responsibility Statement:- (a)
in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
(b) the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company at the end of the financial year and of the Profit and loss
of the company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern
basis; and
(e) The Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
PARTICULARS OF EMPLOYEES:
During the year under review, there was no employee who has drawn
remuneration in excess of the limits set out under Section 197(12) of
the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
attached as Annexure-4.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
There were Nine (9) Board Meetings held on 8th May, 2014, 26th May,
2014, 30th May, 2014, 4th September, 2014, 13th October, 2014, 22nd
October, 2014, 29th October, 2014, 15th December, 2014 and 7th January,
2015 during the financial year 2014-15.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Details of Loans, Guarantees and investments covered under the
provisions of Section 186 of the Companies Act 2013 are given in the
notes no 11 and 13 to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Particulars of Contracts or arrangements with related parts are as
attached Annexure-5. VIGIL MECHANISM:
The Company has established a vigil mechanism by adopting Whistle Blower
Policy.
STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
POLICY:
In accordance with the Clause 49 of the Listing agreement, the Board
formally adopted steps for framing, implementing and monitoring the risk
management plan for the Company by way of Risk Management Policy and
constituted a Risk management Committee.
The Management has also envisaged the minimization procedure and its
percepton in respect of each identified risk.
Further, the Company identifies risks with its degree and control systems
are instituted to ensure that the risks in business process are
mitigated. The Board provides oversight and reviews the Risk Management
Policy periodically. In the opinion of the Board there has been no
identification of elements of risk that may threaten the existence of the
Company.
ACKNOWLEDGEMENTS:
The Directors wish to express their appreciation of the support and
cooperation of Government of Gujarat, AUDA, Bankers and Financial
Institutions. Your Directors wish to place on record their appreciation of
the employees of the Company at all levels for their commitment and
contnued support for the Company.
For and on behalf of the Board of Directors
Sadbhav Infrastructure Project Limited
Vishnubhai M. Patel Vasistha C. Patel
Date : November 04, 2015 Chairman Managing Director
Place : Ahmadabad DIN: 00048287 DIN: 00048324
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Sadbhav Infrastructure Project Ltd. पर और जानकारी
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कंपनी का इतिहास
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