Your Directors have pleasure in presenting the 23rd Annual Report on "BusinessOperations, Performance & Progress" of the Company together with the AuditedFinancial Statements for the year ended March 31, 2013.
A. FINANCIAL RESULTS:
| || ||(Rupees in Lakhs) |
|PARTICULARS ||2012-2013 ||2011-2012 |
|Gross Income ||1,06,384.24 ||1,82,294.22 |
|Profit before Depreciation & Taxation ||8,880.65 ||9,679.40 |
|Depreciation ||5,459.18 ||5,115.80 |
|Profit before Taxation ||3,421.47 ||4,563.60 |
|Provision for Taxation || || |
|i) Current Tax ||684.56 ||1564.61 |
|ii) Deferred Tax ||(639.99) ||(477.18) |
|Profit after Taxation ||3,376.90 ||3,476.17 |
|Profit available for appropriation ||3,376.90 ||3,476.17 |
|APPROPRIATION || || |
|General Reserve ||337.69 ||347.62 |
|Proposed Dividend ||73.79 ||73.79 |
|Corporate Tax on Proposed Dividend ||11.97 ||11.97 |
|Balance transferred to Balance Sheet ||2,953.45 ||3,042.71 |
|Earnings per Share (Rs.) ||4.58 ||4.71 |
|Book Value (Rs.) ||91.53 ||87.07 |
|Paid-up Equity Share Capital ||740.32 ||740.32 |
|Reserves & Surplus ||66,802.92 ||63,511.78 |
B. REVIEW OF OPERATIONAL PERFORMANCE:
During the year under review, your Company has achieved a gross income ofRs.1,06,384.24 lakhs as against Rs.1,82,294.22 lakhs in the previous year. The Company hasearned a net profit of Rs. 3,376.90 lakhs as against Rs.3,476.17 lakhs in the previousyear after providing for depreciation of Rs.5,459.18 lakhs as against Rs.5,115.80 lakhs inthe previous year.
Your Company has consolidated its financial statements combining the financialinformation from its various subsidiary companies as per the applicable AccountingStandards and as a result, the consolidated turnover and consolidated profit/loss afterelimination of intra group transactions are shown as Rs.90,717.79 lakhs andRs.(27,674.48)lakhs respectively.
C. MANAGEMENT DISCUSSION AND ANALYSIS:
I. Indian Economy:
The Indian Economy is still facing global crisis and recovery process which began afterthe financial crisis of 2008 has improved in the financial year 2011 and again taking apause in the financial year 2012 owing to global uncertainties. The GDP growth was 5%during 2012, compared to the previous year's GDP of 6.6%. The inflation as per WPI on anaverage during 2012-13 was 7.3% as against the previous year's 8.9%.
The slow recovery of Global Economy coupled with domestic challenges, absence of FIIinvestment dampened the industrial growth and economy in India in 2012-13.
The Outlook for Industrial activity remains subdued because the pipeline of newinvestment has dried up and the existing projects remains stalled by bottlenecks andimplementation gaps. The huge demand for Infrastructure development, accelerating savingsand investment, rates of interest hold a key to revitalize the economy and achieve growthaspirations. India's special focus and priority to enhance infrastructure spending alongwith greater private collaboration under PPP (Public Private Partnership).
Your company was able to sustain in Industry due to re-alignment of business models,strong asset based with diversified business verticals setup by your Company inTransportation, Energy, Irrigation, Mining, Building & Property development andOverseas Coal Mining and Power Projects in Indonesia. The Company has order book aroundRs. 7,828 Crores and has been pre-qualified in number of EPC works over Rs. 15,650 Croresin Irrigation, Highways, Railways, Power plants in India and abroad.
a) Transportation Division:
i) BOT Toll and Annuity based Projects:
Your company has completed 1459 lane Kms of 4 BOT projects owned by your Company and2018 lane Kms in 5 Toll and Annuity Projects are under progress as detailed below.
|Name of the Project ||No. of Lane Kms. ||Name of the SPV ||Status of the Project |
|1 Chhapra- Hajipur NH-19- DBFOT Annuity Basis Project ||280 ||Chhapra-Hajipur Expressways Limited ||In Progress |
|2 Barasat-Krishnagar NH-34 DBFOT Annuity Basis, West Bengal ||336 ||Barasat-Krishnagar Expressways Limited ||In Progress |
|3 RanchiJamshedpur NH-33 DBFOT Annuity Basis, Jharkhand ||715 ||Ranchi Expressways Limited ||In Progress |
|4 Vijayawada-Machilipatnam NH-9 DBFOT Toll Basis Project, Andhra Pradesh ||258 ||Vijayawada-Machilipatnam Expressways Limited ||In Progress* |
|5 Rajauli-Bakhtiyarpur NH-31 of BSRDCL, DBFOT Toll Basis Project, Bihar ||429 ||Rajauli-Bakhtiyarpur Expressways Limited ||In Progress* |
* Financial closure of Vijayawada-Machilipatnam project and Rajauli-BakhtiyarpurProjects are under process and expected to be completed by 30.09.2013.
Your company has participated in number of ongoing tenders.
ii) Item Rate Projects:
The Status of following projects is as follows:
|Name of the Project ||No. of Lane Kms. ||Status of the Project |
|1 Jhanjapur-Dharbanga Section NH-57, Bihar, NHAI. ||168 ||Completed |
|2 Gopalganj-Muzaffarpur, NH-28, Bihar, NHAI ||190 ||Completed |
|3 Nagaon- Dharamtul, NH-37, Assam, NHAI ||120 ||In Progress |
|4 AnikPanjarpole Link Road Project(APLR), MMRDA, Maharashtra ||30 ||In Progress |
iii) Irrigation Projects:
Your Company is executing 14 projects valued Rs. 2,364.83 Croresof which Rs.1,577.35Crores related to Irrigation Projects of Andhra Pradesh.
b) Energy Projects:
Thermal Power Plant -Tamminapatnam, Chillakur Mandal, SPSR Nellore District.
The EPC Contract of Phase-I (2X150MW) of Simhapuri Energy Limited was completed on02.05.2012 and generating power with full capacity.
The Phase-II (2X150MW) is under completion, expected COD in October, 2013.
c) Mining Division:
The work for removal of OB 416.46 Lakhs Cub.Mtrs and Coal 159.39 Lakhs Metric Tonsvalued Rs.42,206 Lacs at Phularitand (BCCL) Project within the period of 7 years vide workorder dated 07.02.2012 is under progress.
d) Building and Property Division:
Your Company, as EPC Contractor, has undertaken the construction of Nama Hotels,Madhucon Megamall and Madhucon Heights on NH-9 at Kukatpally, APHB Colony, Hyderabad,Andhra Pradesh and these projects are under progress.
e) Overseas Division:
Your Company in Consortium is setting up of Mine Mouth Coal Fired 2 X150 MW ThermalPower Plant in Indonesia for generation and supply of power to PTPLN (PERSERO), GovernmentElectricity Company of Indonesia for a period of 25 years. PPA was signed on 01.05.2012.Financial tie-up for project finance is under progress.
Your Company has been exploring Coal Mines in South Africa, Mozambique and West Africancountries.
III. Risks and Concerns:
Your Company may envisage the Commercial, Political, Legal and Technological Risk whichmay affect the business and earning potential of your Company.
IV. Internal Control System:
Your Company has adequate system of Internal Control System developed by our in-houseInternal Audit team consisting of qualified and experienced accounting, costing andtechnical professionals. The Internal Audit Team suggests various means of cost reductionand cost control measures in all resources used in the Company. The Internal ControlSystems and the Reports of Internal Audit will be reviewed by the Audit Committee inconsultation with the Internal Auditors and Statutory Auditors and experts in the fieldthereafter by Board of Directors.
V. Organizational Restructure:
Your Company is restructuring its organization according to Companys growth plan.
VI. Expansion and Diversification:
Your Company is contemplating for diversification into various other sectors ofinfrastructure viz., Sea Ports, Air Ports, Railways including Freight Corridors, Housingand Property Development, Transmission and Distribution Systems, Coal Handling Plants,Water Treatment Plants, Sewage Treatment Plants, Pipeline Projects, Hospitality Sectoretc.Your company is contemplating to enter into transmission projects.
VII. Material developments in Human Resources/Industrial Relations:
Your Company has recruited competent Professionals at all levels of management for allverticals of the Company like Road, Irrigation, Power, Mining, Building & PropertyDivision as a part of corporate restructuring process and strengthening its OrganizationalHierarchy to meet the pace of growth of your Company. The industrial relation is verycordial.
VIII Accounting Standards:
The financial statements are prepared in accordance with the requirement of the amendedSchedule-VI of the Companies Act, 1956, which is made mandatory by Ministry of CorporateAffairs(MCA) from 2011-12 and as per the Generally Accepted Accounting Principles (GAAP)and also in accordance with the applicable Accounting Standards and guidance notes issuedby the Institute of Chartered Accountants of India (ICAI).
IX. Share Capital:
The Paid-Up Equity Share Capital of the Company is Rs. 7,37,94,940/- consisting of7,37,94,940 Equity Shares of Re.1/- each.
Your Directors are pleased to recommend an Equity Dividend of 10% (10 Paise per share)on paid up equity capital for the year ended 31.03.2013, subject to approval of themembers at this Annual General Meeting.
XI. Subsidiary Companies:
The Company has 9(Nine) Indian Subsidiaries and 1(One) Foreign Subsidiary as on31.3.2013. The details of investments held by Madhucon ProjectsLimited in the followingsubsidiary companies are given below:
a) INDIAN SUBSIDIARY COMPANIES:
|Name of the Company ||Date of incorporation ||No. of Equity Shares held by Madhucon Projects Limited ||Face Value of Equity Shares (Rs) ||Value of Equity shares (Rs) ||Percentage (%) |
|1 Madhucon Infra Limited (CIN - U45200AP2006PLC049235) ||22.02.2006 ||122,20,27,045 ||10 ||1222,02,70,450 ||94.89 |
|2 Madurai-Tuticorin Expressways Limited (CIN - U45203AP2006PLC050114) ||11.05.2006 ||8,85,61,500 ||10 ||88,56,15,000 ||54.12 |
|3 Madhucon Energy Limited (CIN - U45309AP2000PLC034007) ||24.03.2000 ||1,00,090 ||5 ||5,00,450 ||99.95 |
|4 Madhucon Mega Mall Private Limited (CIN - U45400AP2007PTC056734) ||18.12.2007 ||20,000 ||10 ||2,00,000 ||66.66 |
|5 Nama Hotels Private Limited (CIN - U55101AP2007PTC056818) ||24.12.2007 ||2,71,21,200 ||10 ||27,12,12,000 ||99.96 |
|6 Madhucon Heights Private Limited (CIN - U45209AP2007PTC056733) ||18.12.2007 ||20,000 ||10 ||2,00,000 ||66.66 |
|7 Agastyamuni Hydro Power Private Limited (CIN - U40108AP2010PTC068128) ||28.04.2010 ||6,000 ||10 ||60,000 ||60.00 |
|8 Rudraprayag Hydro Power Private Limited (CIN - U40108AP2010PTC068130) ||28.04.2010 ||6,000 ||10 ||60,000 ||60.00 |
|9 Tilwara Hydro Power Private Limited (CIN - U40300AP2010PTC068127) ||28.04.2010 ||6,000 ||10 ||60,000 ||60.00 |
|b) FOREIGN COMPANIES: || || || || |
|Date of Name of the Company incorporation ||No. of Equity Shares held by Madhucon Projects Limited ||Face Value of Equity Shares (Rs) ||Value of Equity shares (Rs) ||Percentage (%) |
|1 Madhucon Natural Resources Limited, 09.03.2006 Singapore (200603264W) ||750 ||S$ 1/- ||S$ 750 (Equivalent to Rs.21036) ||75.00 |
STEP DOWN SUBSIDIARIES:
1. Madhucon Agra-Jaipur Expressways Limited
2. TN (DK) Expressways Limited
3. Trichy-Thanjavur Expressways Limited
4. Chhapra-Hajipur Expressways Limited
5. Simhapuri Energy Limited
6. Madhucon Toll Highways Ltd
7. Vijayawada Machlipatnam Expressways Ltd
8. Barasat-Krishnanagar Expressways Ltd
9. Ranchi Expressways Ltd
10. PT Madhucon Indonesia, Indonesia
11. PT Madhucon Sriwijaya Power, Indonesia
XII. Consolidation of Accounts:
In accordance with the Accounting Standards AS-21 on "Consolidated FinancialStatements" and AS-23 on "Accounting for Investments in Associates inConsolidated Financial Statements" read with Accounting Standard AS-27 on"Financial Reporting of Interests in Joint Ventures", Listing Agreement andSection 212 of the Companies Act 1956, the figures of the subsidiary Companies areconsolidated with figures of Madhucon Projects Limited.
The Board of Directors of the Company has, by resolution, given consent for notattaching the Balance Sheet of Subsidiary Companies concerned. The Company has presentedthe Consolidated Financial Statements of Holding Company and all its Subsidiaries in thisAnnual Report duly audited by its Statutory Auditors.
The Annual Accounts of the Subsidiary Companies and the related detailed informationwill be made available to shareholders of the Holding and Subsidiary Companies seekingsuch information at any point of time. The Annual Accounts of Subsidiary Companies willalso be kept for inspection by any shareholder at the Registered Office of the Company andalso at its Subsidiary Companies. The Company will furnish a hard copy of details ofaccounts of Subsidiaries to any shareholder on demand.
XIV. Corporate Governance:
In terms of compliance with the requirement of clause 49(VI)(i) of Listing Agreement, aseparate section titled "Corporate Governance" containing the due compliance oncorporate governance is given in the Directors Report forming the part of thisAnnual Report.
In terms of compliance with the requirement of clause 49(VII) of Listing Agreement, theAuditors certificate confirming the compliance of the conditions of the CorporateGovernance is annexed hereto which form the part of this Annual Report and the same willbe sent to National and Bombay Stock Exchanges along with the Annual Report.
Sri S.Vaikuntanathan, Wholetime Director on completion of his tenure on 04.03.2013tendered his resignation and relinquished his office of Director of the Company.
Sri K.Srinivasa Rao, Director appointed by your Directors as Wholetime Director of theCompany w.e.f. 15.11.2012.
Dr.C.Venkateswara Rao, Independent Director who retires by rotation at this AnnualGeneral Meeting is eligible to be re-appointed as Independent Director of the Company andwho has given his consent in writing to act as Independent Director, if appointed at thisAnnual General Meeting. The Board of Directors of the Company recommends the appointmentof Dr.C.Venkateswara Rao, as Independent Director of the Company, in the best interest ofthe Company. The profile of Dr.C.Venkateswara Rao is given in the report of CorporateGovernance.
Sri N Seethaiah, Managing Director was re-appointed for a further period of 3 years bythe Board of Directors of the Company w.e.f. 01.05.2013 on the existing remuneration ofRs.5,00,000/- including all allowances and perquisites, subject to concurrence ofShareholders and compliance of applicable provisions of the Companies Act, 1956.
XVI. Directors Responsibility Statement:
Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, it ishereby confirmed:
a) That in the preparation of annual accounts for the financial year ended 31st March,2013; the applicable Accounting Standards have been followed along with proper explanationrelating to material departures.
b) That the Directors have selected Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent, so as to give a true andfair view of the state of affairs of the Company, at the end of the financial year and ofthe profit or loss of the Company for that period.
c) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956,for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities.
d) That the Directors have prepared the annual accounts for the year ended 31st March2013 on a "Going Concern" basis.
XVII. Industrial Relations:
The relations with the employees are cordial.
The Company has not accepted any deposits from the public within the meaning of Section58A of the Companies Act, 1956.
XIX. Particulars of Employees:
As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read withthe Companies (Particulars of Employees) Rules, 1975, as amended and forming part of theDirectors Report for the year ended 31st March, 2013, none of the employees of theCompany was in receipt of remuneration, which exceeds the limits fixed under Section 217(2A) of the Companies Act, 1956, except Sri N.Seethaiah, Managing Director of the Company.
XX. Quality Management System - ISO 14001:2004
The Company has established a Quality Management System in Design, Execution, Operation& Maintenance of Irrigation & Water Resources Projects, Highway/ Road Projects,Power Transmission Projects, Building and Property Development Projects and Design &Execution of Power Projects and Over Burden Removal in Opencast Mining Projects incompliance with the International Quality System Standards - ISO 14001:2004. TheCertificate No. IND13.5479U/E dated 18.02.2013 is valid up to 17.02.2016.
The Company is being obtained EMS-ISO 14001:2004 and OHSAS-18001:2007registration.
M/s Kota & Company, Statutory Auditors (FRN-011982S) of the Company, expressedtheir willingness to be re-appointed for the financial year 2013-2014 and to hold officeup to the conclusion of the next Annual General Meeting, if they are appointed at thisAnnual General Meeting. They have furnished a certificate to the effect that theirproposed appointment, if made, will be in accordance with the limits specified under224(1-B) of the Companies Act, 1956.
XXII. Information as per Sec- 217(1) (E) of The Companies Act, 1956 read with Companies(Disclosure of Particulars in the report of The Board of Directors) Rules, 1988:
The information as required Under Section 217(1)(e) of the Companies Act, 1956 relatingto conservation of energy, technology absorption and foreign exchange earnings and outgoare set out in the annexure attached to this Report.
Your Directors express their appreciation to the Foreign Collaborators, Joint VenturePartners, Bankers, Central and State Government Authorities including National HighwayAuthorities of India (NHAI), Irrigation & CAD Department, Central Government,Government of various States including Andhra Pradesh, Clients, Consultants, Employees,Suppliers etc., for their continued support and encouragement from time to time.
| || |
For and on behalf of the Board
|Place: Hyderabad ||N. SEETHAIAH ||K. SRINIVASA RAO |
|Date: 14.08.2013 ||Managing Director ||Whole-time Director |
ANNEXURE-I TO THE DIRECTORS REPROT
(Information as per Sec- 217(1) (e) of the Companies Act, 1956 read with Companies(Disclosure of particulars in the Report of the Board of Directors) Rules, 1988)
I. CONSERVATION OF ENERGY:
The Company is engaged in Civil Construction Activity which is not a predominantlypower intensive. However, energy conservation measures are taken up wherever required.
II. TECHNOLOGY ABSORPTION:
The Company is constantly updating its technology in the areas wherever necessary forimproving the productivity, efficiency and quality of its performance.
|III. FOREIGN EXCHANGE EARNINGS AND OUTGO: || || |
| || ||(Rupees in Lakhs) |
|Particulars ||2012-13 ||2011-12 |
|Foreign Exchange Earnings: ||Nil ||Nil |
|Foreign Exchange Out Go: || || |
|i. Towards travelling ||22.10 ||37.78 |
|ii. Towards import of capital goods (CIF) ||Nil ||Nil |
|iii. Towards advance to equipment suppliers ||21,337.21 ||2,823.44 |
|iv. On account of others: || || |
|a) Investment ||657.38 ||1,956.66 |
|b) Interest ||52.12 ||48.32 |
|v. Others ||2,027.15 ||58.74 |
| || |
For and on behalf of the Board
|Place: Hyderabad ||N. SEETHAIAH ||K. SRINIVASA RAO |
|Date: 14.08.2013 ||Managing Director ||Whole-time Director |