Your Directors have pleasure in presenting the 24th Annual Report of the Company together with the Audited Financial Statements for the year ended March 31, 2014.
A. FINANCIAL RESULTS:
(Rupees in Lakhs)
|Profit before Depreciation & Taxation||9673.90||8880.65|
|Profit before Taxation||4972.04||3421.47|
|Provision for Taxation|
|i) Current Tax||1042.17||684.56|
|ii) Deferred Tax||758.19||(639.99)|
|Profit after Taxation||3171.68||3376.90|
|Profit available for appropriation||3171.68||3376.90|
|Corporate Tax on Proposed Dividend||11.97||11.97|
|Balance transferred to Balance Sheet||2768.75||2953.45|
|Earnings per Share (Rs.)||4.30||4.58|
|Book Value (Rs.)||95.71||91.53|
|Paid-up Equity Share Capital||740.32||740.32|
|Reserves & Surplus||69888.83||66802.92|
* Provision of proposed dividend for the year 2013-14 was made @ 10%
Your Directors are pleased to recommend an Equity Dividend of 20% (20 Paisa per share) on paid up equity capital for the year ended 31.03.2014, subject to approval of the members at this Annual General Meeting.
C. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, it is hereby confirmed:
i. That in the preparation of annual accounts for the financial year ended 31st March, 2014; the applicable Accounting Standards have been followed along with proper explanation relating to material departures.
ii. That the Directors have selected 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 or loss of the Company for that period.
iii. That the Directors have taken proper and sufficient care for the maintenance of adequate 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 and other irregularities.
iv. That the Directors have prepared the annual accounts for the year ended 31st March 2014 on a "Going Concern" basis.
D. MANAGEMENT DISCUSSION AND ANALYSIS:
I. Industry Structure and Developments
Infrastructure is a major sector that propels overall development of the Indian economy. India's focus on infrastructure over the last decade made the country the second fastest growing economy in the world. India's constant growth gives investors a tremendous opportunity in the transportation and power segments. India has second largest Road network in the world with 33 lakh Kms.
Considering the enhanced focus on this sector by the Indian Government, policy makers expect the infrastructure spend on an average to be around 8.18% of the GDP at the end of the twelfth five-year plan, targeting an overall investment of Rs. 55.75 trillion over the duration. Moreover, the role of private sector investments has been further projected to enhance at 48% by the completion of twelfth five-year plan.
II. Opportunities and Strengths:
Madhucon has made a successful transition from being just an EPC Contractor to a folly integrated infrastructure developer. Infrastructure development and service delivery through Public Private Partnerships (PPPs) Policy increases vast investment opportunities in different infrastructure sectors both in rural and urban areas. Your Company is having opportunities and strengths with an order book position of Rs. 9360 Crores and participating in various Tenders and RFPs valued at Rs. 4200 Crores in various projects in India and abroad.
III. Segment Wise Performance:
1. Transportation Division:
a) BOT Toll and Annuity based Projects:
Your company has completed 1459 lane Kms of 4 BOT projects and 2018 lane Kms in 5 Toll and Annuity Projects are under progress as detailed below:
|SI. No.||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||Ranchi -Jamshedpur, NH-33 DBFOT Annuity Basis. Jharkhand||715||Ranchi Expressways Limited||In Progress|
|4||Vijayawada-Machilipatnam, NH-9 DBFOT Toll Basis Project, Andhra||258||Vijayawada-Machilipatnam||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-Bakhtiyarpur Project are under process and expected to be completed by 30.09.2014.
b) Item Rate Projects:
Your Company has been awarded an item rate project of Construction of Concrete Pavement in the Coal Transport Roads in different projects of Talcher Coalfields (except Kanitha OCP) by Mahanadi Coalfields Limited. Total road Length of the Project is 23 Kms and the cost Rs. 165.92 Crores. The Agreement has been signed on 23.04.2014.
The Status of ongoing projects is as follows:
|SI. No.||Name of the Project||No. of Lane Kms.||Status of the Project|
|1||Jhanjapur-Dharbanga Section NH-57, Bihar, NHAI.||168||Completed|
|2||Nagaon- Dharamtul, NH-37, Assam, NHAI||120||Substantially completed|
|3||Anik Panjarpole Link Road Project (APLR), MMRDA, Maharashtra||30||Completed|
2. Irrigation Projects:
Your Company is now executing 10 projects valued Rs.2172.13 Crores of which Rs.1433.25 Crores related to Irrigation Projects of Andhra Pradesh and Telangana.
3. Energy Projects:
Thermal Power Plant -Tamminapatnam, Chillakur Mandal, SPSRNellore District.
The EPC Contract of Phase-I (2X150MW) of Simhapuri Energy Limited was completed and generating power with full capacity.
The Phase-II (2X150 MW) Third Unit has already generating power and the fourth unit is expected to start its commercial operation by Oct' 2014.
4. Mining Division:
The work for removal of OB 416.46 Lakhs Cub. Mtrs. and Coal 159.39 Lakhs Metric Tons valued Rs.42,206 Lacs at Phularitand (BCCL) Project within the period of 7 years vide work order dated 07.02.2012 is under progress.
The highest production of coal in a month is 2.31 Lakhs Metric Tons.
5. Overseas Division:
Your Company has been allotted 8,663 hectares coal mine in South Sumatra, Indonesia in the name of PT Madhucon Indonesia with mineable reserves of 550mn tons and mining rights for 40 years. The mine is in initial stage of operation.
Your Company is setting up of Mine Mouth Coal Fired 2 XI50 MW Thermal Power Plant in Indonesia through PT Madhucon Sriwijaya Power (SPV) for generation and supply of power to PT PLN (PERSERO), Government Electricity Company of Indonesia for a period of 25 years and entered into Power Purchase Agreement. Financial tie-up for project finance is under process.
IV. Future Outlook
Government of India envisaged the investment of US$ 1 trillion for the infrastructure development under PPP and FDI during the 12th Five-Year Plan (2012-17), with 40 percent of the funds coming from the country's private sector. Your company will get significant growth.
The Company has been participating in International tenders and is confident of winning the Projects in Roads 8c Infrastructure sector.
V. Risks and Concerns:
Your company may envisage the commercial, political, legal and technological risk which may affect the business and earning potential of your company.
VI. Internal Control System:
Your Company has adequate system of Internal Control developed by our in-house Internal Audit team consisting of qualified and experienced accounting, costing and technical professionals. The Internal Audit Team suggests various means of cost reduction and cost control measures in all resources used in the Company. The Internal Control Systems and the Reports of Internal Audit will be reviewed by the Audit Committee in consultation with the Internal Auditors and Statutory Auditors and experts in the field thereafter by Board of Directors.
VII. Discussion on financial performance with respect to operational performance
During the year under review, your Company has achieved a gross income of Rs. 897,79.64 lakhs as against Rs. 1063,84.24 lakhs in the previous year. The Company has earned a net profit of Rs. 31,71.68 lakhs as against Rs. 33,76.90 lakhs in the previous year after providing for depreciation of Rs.47,01.86 lakhs as against Rs.54,59.18 lakhs in the previous year.
Your Company has consolidated its financial statements combining the financial information from its various subsidiary companies as per the applicable Accounting Standards and as a result, the consolidated turnover and consolidated profit/(loss) after elimination of intra group transactions are shown as Rs. 1636,20.09 lakhs and Rs. (223,80.83) lakhs respectively.
VIII. Material developments in Human Resources / Industrial Relations:
Your Company has recruited competent Professionals at all levels of management for all verticals of the Company like Roads, Irrigation, Power, Mining, Building & Property Division as a part of corporate restructuring process and strengthening its Organizational Hierarchy to meet the pace of growth of your Company. The industrial relation is very cordial.
E. Accounting Standards;
The Financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956.
F. Share Capital:
The Paid-Up Equity Share Capital of the Company is Rs.7,37,94,940/- consisting of 7,37,94,940 Equity Shares of Re. 1/- each.
G. Subsidiary Companies:
The Company has 9 (Nine) Indian Subsidiaries and 1 (One) Foreign Subsidiary as on 31.03.2014. The details of investments held by Madhucon Projects Limited in the following subsidiary companies are given below:
INDIAN SUBSIDIARY COMPANIES:
|SI. No||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)||Percent age (%)|
|1||Madhucon Infra Limited (CIN: U45200TG2006PLC049235)||22.02.2006||122,20,27,045||10||1222,02,70,450||94.89|
|2||Madurai-Tuticorin Expressways Limited (CIN-U45203TG2006PLC050114)||11.05.2006||8,85,61,500||10||88,56,15,000||54.12|
|3||Madhucon Energy Limited (CIN- U45309TG2000PLC034007)||24.03.2000||1,00,090||5||5,00,450||99.95|
|4||Madhucon Mega Mall Private Limited (CIN-U45400TG2007PTC056734)||18.12.2007||20,000||10||2,00,000||66.66|
|5 i||Nama Hotels Private Limited (CIN-U55101TG2007PTC056818)||24.12.2007||2,71,21,200||10||27,12,12,000||99.96|
|6||Madhucon Heights Private Limited (CIN-U45209TG2007PTC056733)||18.12.2007||20,000||10||2,00,000||66.66|
|7||Agastyamuni Hydro Power Private Limited (CIN-U40108TG2010PTC068128)||28.04.2010||6,000||10||60,000||60.00|
|8||Rudraprayag Hydro Power Private Limited (CIN-U40108TG2010PTC068130) 28.04,2010||6,000||10||60,000||60.00|
|9||Tilwara Hydro Power Private Limited (CIN-U403 00TG2010PTC068127) 28.04.2010||6,000||10||60,000||60.00|
FOREIGN SUBSIDIARY COMPANIES:
|Sl.No||Name of the Company||Date of incorporation||No. of Equity Shares held by Madhucon Projects Limited||Face value of Equity Share||Value of Equity Shares held||Percent age (%)|
|1||Madhucon Natural Resources Limited, Singapore (200603264W)||09.03.2006||750||S$ 1/-||S$ 750 (Equivalent to Rs.36075)||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 Limited
7. Barasat Krishnanagar Expressways Limited
8. Ranchi Expressways Limited
9. Vijayawada Machlipatnam Expressways Limited
10. Rajauli-Bakhtiyarpur Expressways Limited
11. PT Madhucon Indonesia, Indonesia
12. PT Madhucon Sriwijaya Power, Indonesia
H. Consolidation of Accounts;
In accordance with the Accounting Standards AS-21 on "Consolidated Financial Statements" and AS-23 on "Accounting for Investments in Associates in Consolidated Financial Statements" read with Accounting Standard AS-27 on "Financial Reporting of Interests in Joint Ventures", Listing Agreement and Section 212 of the Companies Act 1956, the figures of the subsidiary Companies are consolidated with figures of Madhucon Projects Limited.
The Board of Directors of the Company has, by resolution, given consent for not attaching the Balance Sheet of Subsidiary Companies concerned. The Company has presented the Consolidated Financial Statements of Holding Company and all its Subsidiaries in this Annual Report duly audited by its Statutory Auditors.
I. Corporate Governance:
In terms of compliance with the requirement of clause 49(VI) (i) of Listing Agreement, a separate section titled "Corporate Governance" containing the due compliance on corporate governance is given in the Directors' Report forming the part of this Annual Report.
In terms of compliance with the requirement of clause 49(VII) of Listing Agreement, the Auditors' certificate confirming the compliance of the conditions of the Corporate Governance is annexed hereto which form the part of this Annual Report and the same will be sent to National and Bombay Stock Exchanges along with the Annual Report.
Sri Kandimalla KVN Prasad (DIN-00084398) has been appointed as an Additional Director under the category of Independent Director by your Board at its meeting held on 09.08.2014 and he will continue in office till the ensuing Annual General Meeting and in respect of whom the Company has received a notice in writing u/s 160 of the Companies Act, 2013 from a member proposing his candidature to hold office for a term of 3 (Three) years for the office of Independent Director.
Smt. Ch. Lakshimi Kumari (DIN-06942473) has been appointed as an Additional Director under the category of Independent -Woman Director by your Board at its meeting held on 09.08.2014 and she will continue in office till the ensuing Annual General Meeting and in respect of whom the Company has received a notice in writing u/s 160 of the Companies Act, 2013 from a member proposing her candidature to hold office for a term of 3 (Three) years for the office of Director under Independent and Woman Category.
Dr. C.Venkateswara Rao, (DIN-00385987) Independent Director who ceased the office at the ensuing Annual General Meeting in terms of Section 149 of the Companies Act, 2013 read with the Companies (Appointment and qualification of Directors) Rules, 2014 and Listing Agreement dated 17.04.2014 requires re-appointment for a fresh term. Dr. C.Venkateswara Rao expressed his unwillingness to seek fresh term of appointment.
K. Industrial Relations:
The relations with the employees are cordial.
The Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.
M. Transfer To Investor Education and Protection Fund ::
During the financial year 2013-14, the Company has transferred a sum of Rs. 1,00,747/- to the Investor Education and Protection fund established by the Central Government, in compliance with Section 205C of the Companies Act, 1956. The said amount represents the amount in the unpaid dividend account for the financial year 2005-06 which is lying in Unpaid Dividend Account with Bank for a period of 7 years from the due dates of payment.
N. Particulars of Employees:
As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors' Report for the year ended 31st March, 2014, none of the employees of the Company 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.
O. 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 in compliance with the International Quality System Standards - ISO 14001:2004. The Certificate 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-18001:2007 registration.
M/s Kota & Company, Statutory Auditors (FRN-011982S) of the Company, expressed their willingness to be re-appointed for the financial year 2014-2015 and to hold office up to the conclusion of the next Annual General Meeting, if they are appointed at this Annual General Meeting. They have furnished a certificate to the effect that their proposed appointment, if made, will be in accordance with the limits specified under 224( 1-B) of the Companies Act, 1956.
Q. 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 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in the annexure attached to this Report.
Your Directors express their appreciation for the support and co-operation of the Bankers, Central and State Government Authorities including National Highway Authorities of India (NHAI), Irrigation & CAD Department, Central Government, Government of various States, 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: 09.08.2014||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 ofparticulars 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 predominantly power 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 for improving the productivity, efficiency and quality of its performance.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO:
(Rs. in lakhs)
|Foreign Exchange Earnings:||Nil||Nil|
|Foreign Exchange Outgo:|
|i. Towards traveling||0.78||22.10|
|ii. Towards import of capital goods (CIF)||0.18||Nil|
|iii. Towards payment to equipment suppliers||868.89||21,337.21|
|iii. On account of others:|
For and on behalf of the Board
|Place: Hyderabad||N. SEETHAIAH||K. SRINIVASA RAO|
|Date: 09.08.2014||MANAGING DIRECTOR||WHOLE-TIME DIRECTOR|
N Seethaiah , Managing Director
K Srinivasa Rao , Whole-time Director
P Madhava Rao , Director
C Bharathi , Company Secretary
Company Head Office / Quarters:
1-7-70 Madhu Complex,
Phone : Andhra Pradesh- / Andhra Pradesh-
Fax : Andhra Pradesh- / Andhra Pradesh-
E-mail : firstname.lastname@example.org
Web : http://www.madhucon.com
Karvy Computershare Pvt Ltd
Plot No 17-24 ,Vittal Rao Nagar ,Madhapur ,Hyderabad-500081
|Scheme Name||No. of Shares|
|Sundaram Select Micro Cap - Sr.VI (G)||10,20,000|
|Sundaram Select Micro Cap - Sr.V (G)||9,34,637|
|Sundaram Select Micro Cap - Sr.VII (G)||8,27,962|
|Sundaram Value Fund - Series I (G)||6,55,622|
|Sundaram Select Micro Cap - Sr.VI (G)||10,20,000|