Ashoka Buildcon Ltd Directors Report.

Dear Members,

Ashoka Buildcon Limited

Your Directors have pleasure in presenting the 27th Annual Report (“the Report / this Report”) along with audited financial statements of your Company, for the financial year ended March 31, 2020.

Financial Results

The financial performance of your Company for the year ended March 31, 2020 is summarized below:

(Rs. in Lakh except EPS)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Total Receipts / Gross Sales and Operating Income 4,08,236.36 3,93,634.05 515,221.03 5,00,722.54
Profit Before Depreciation, Tax and Exceptional Items 64,511.57 54,018.94 62,601.79 44,898.83
Depreciation and Amortisation Expenses 11,112.77 7,627.13 29,978.26 25,823.28
Profit/(Loss) Before Tax & Exceptional Items 53,398.80 46,391.81 32,623.53 19,075.55
Provision for Taxation 14,684.56 13,073.18 16,587.69 17,090.68
Profit/(Loss) after tax 38,714.24 28,616.29 16,035.84 (4,028.47)
Share of Profit/ (Loss) of subsidiaries transferred to Noncontrolling Interest * N. A. N. A. (495.66) (682.45)
Total Comprehensive Income (post Noncontrolling interest) 38,691.44 28,574.62 16,337.29 (3,407.59)
Balance carried to Balance sheet Earnings per Equity Share (EPS) 38,714.24 28,616.29 16,531.50 (3,346.02)
Basic (face value Rs.5/- each) 13.79 10.19 5.89 (1.19)
Diluted (face value Rs.5/- each) 13.79 10.19 5.89 (1.19)

* Applicable only in case of consolidated financial statements.

Performance of the Company during FY 2019-20 Projects update:

During the year under review, the Company has won Road Project on HAM basis worth Rs.2,035.50 Crore and Road Projects on EPC basis worth of Rs.1,079.52 Crore as detailed below. The Company also received Project in Smart Infrastructure/City Segment worth Rs.313.72 Crore as given in below table.

Name of the Project Authority Project Cost (Rs. Crore)
Conducting Survey, Supply of Poles & Installation, laying of the overhead and underground Optic Fiber Cable, on existing Electricity Poles, Supply, Installation, Testing and Commissioning of Non-IT items SRIT India Private Limited / Kerala State Information Technology Infrastructure Limited 313.72
Development of Bundelkhand Expressway Project (“Package-III”): From Kaohari (Dist. Mahoba) to BaroliKharka (Dist. Hamirpur) (Km 100+000 to Km 149+000) in the State of Uttar Pradesh on EPC Basis Uttar Pradesh Expressways Industrial Development Authority 1,079.52
Four laning of NH-161 from Kandi (Design Km 0.000) (Km 498.250 of NH-65) to Ramsanpalle (Design Km 39.980/Existing Km 44.757) (Design Length = 39.980 Km) in the State of Telangana under Bharatmala Pariyojna on Hybrid Annuity Mode National Highways Authority of India 1,000.00
Four Laning of Tumkur- Shivamogga section from Km 119+790 (Design Km 121+900) to Km 166+100 (Design Km170+415), Banwara to Bettadahalli section of NH-206 in the State of Karnataka, on Hybrid Annuity Mode under Bharatmala Priyojana (Package - III) National Highways Authority of India 1,035.50

The Company received extension of concession period / toll collection period for the following project:

Project Name Particulars
Construction of Katni Bypass on NH-7 from Km 361/2 to 378/6 around Katni Town in Madhya Pradesh, India on BOT Basis Honble High Court had granted an additional concession period of Twenty Four days from 23.02.2020 to 18.03.2020
By Honble High court order dated Toll collection period has been extended for next 29 Months i.e. From 18.03.2020 to next 29 months i.e. 17.08.2022.
The above matter is in Honble High Court, Madhya Pradesh and is sub judice.

Your Company has received appointed dates for its HAM Based Projects viz. Belgaum Khanapur Road, Mallasandra Karadi Road and Karadi Banwara Road awarded by NHAI.

The Company has received provisional completion certificate issued by the Authoritys Engineer dated 10.11.2019 for Madhugiri - Mulbagal Road Project.

There is no change in the nature of business of the Company, during the year under review.

Awards and Recognitions received by the Company during the year:

Particulars name of the Award / Recognition
Construction Week India Awards Project of The Year Award to Ashoka Buildcon Limiteds Eastern Peripheral Expressway (Package IV)
Construction Week India Awards Road Contractor of The Year Award to Ashoka Buildcon Limited
Construction Week India Awards Infra Person of The Year Award to Satish Parakh, Managing Director
Ministry of Road Transport & Highways (MoRT&H) - National Highways Excellence Awards Champion Award for Excellence inTollManagement to Ashoka Buildcon Limiteds Hirebagewadi Toll Plaza
Ministry of Road Transport & Highways (MoRT&H) - National Highways Excellence Awards Champion Award for Excellence in Highway Safety to Ashoka Buildcon Limiteds Belgaum Dharwad Road Project
CIA Infra Awards Best Safety Practices Award to Ashoka Buildcon Limited
Fire & Safety Associations Safe Tech National Award 2019 Best Safety Practices Award to Ashoka Buildcon Limited
Fire & Safety Associations Safe Tech National Award 2019 Safety Hero Award to Ashoka Buildcon Limited

Future outlook

The global economy is witnessing challenges arising due to Covid-19 Pandemic and the Road Infrastructure sector is not isolated. The Pandemic, and the ensuing lockdown has adversely impacted the sector primarily attributable to the halting of construction activities across the country, lack of availability of labour, stoppage of toll collection, amongst others.

The government has announced various measures to protect/ safeguard liquidity, compensate contractors for the losses experienced during lockdown and provide additional loans for a smooth resumption of operations.

The Union Minister for Road Transport & Highways and MSMEs, in his communication dated April 07, 2020, has set a target of constructing roads worth Rs.15 lakh Crore in the next two years.

We expect many opportunities in the near and long term for the infrastructure sector in India. The governments ambitious infrastructure development programmes provide significant opportunities to boost economic development in the sector in coming years.

With relaxation in the lockdown restrictions, the construction activity has resumed at major projects sites by following the social-distancing norms and other health and hygiene measures. The operations are ramping up gradually across the sector. The economic activity has started to pick-up pace with toll collections also beginning to limp back to normalcy.

Toll revenues have gradually revived to reach over 70-75% pre- covid levels, led by improving commercial traffic even when many cities or state sections are not allowing traffic movement freely, and expect to reach pre-COVID collections in the coming months.

Our order book - which is Rs.8,981 Crore, ensuring strong visibility for the EPC segment for foreseeable future. We are well confident and also geared up to win BOT / HAM projects in the upcoming bids, which will ensure a steady growth in execution as well as our revenues in the long term.

We will continue to strive and remain focused on creating more value for all by venturing into new areas of infrastructure.

Share Capital

The paid-up share capital as at March 31, 2020 stood at Rs.140.36 Crore. During the year under review, there is no change in the paid-up share capital of the Company. During the year under review, the Company has not issued any shares with differential voting rights or by way of rights issue or Sweat Equity shares or shares under ESOP. Further, it has not provided any money to its employees for purchase of its own shares hence the Company has nothing to report in respect of Rule 4(4), Rule 12(9) and Rule 16 of the Companies (Share Capital & Debentures) Rules, 2014.

Debentures

Your Company had during FY 2018-19, allotted 1,500 rated, listed, unsecured 9.80% non-convertible debentures of Rs.10 Lakh each aggregating Rs.150 Crore for the tenure of 2 years 4 months and 4 days i.e. up to April 30, 2021. The Debentures were allotted to ICICI Prudential Ultra Short Term Fund on private placement basis and had been listed on BSE Ltd. in WholeSale Debt Market Segment. During the year under review, the Company has redeemed in full the NCDs worth Rs.150 Crore in March 2020.

Dividend

The Board of Directors has not recommended a dividend this year. The amount of profits has been retained for future requirement of the Company for investment in capital of Subsidiaries / Project SPVs.

Credit Rating of Company

CRISIL Limited has affirmed:

• CRISIL AA-/Stable to Long term rating,

• CRISIL A1to short term rating

Transfer to Reserves

No amount has been transferred to the General Reserve during the year.

Public Deposits

During the financial year 2019-20, your Company had not accepted any deposit within the meaning of the provisions of Section 73 of the Companies Act, 2013 (“the Act”) read with the Companies (Acceptance of Deposits) Rules, 2014.

Capital Expenditure

As at March 31, 2020, the Gross Fixed Assets & Intangible Assets stood at Rs.788.92 Crore which include CWIP and Right of use of assets and net fixed assets and net intangible assets at Rs.358.57 Crore. Additions during year amounted to Rs.62.71 Crore.

Audit Committee

The Audit Committee of the Board of Directors of the Company is duly constituted in accordance with the provisions of Section 177 ofthe Act read with Rule 6 and 7 ofthe Companies (Meetings of the Board and its Powers) Rules, 2014 and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“LODR 2015”). The composition of the Audit Committee as on March 31, 2020 is as follows:

name Designation
1 Albert Tauro Chairman (Independent Director)
2 Sunanda Dandekar Member (Independent Director)
3 Milap Raj Bhansali Member (Executive Director)
4 Sharadchandra Abhyankar Member (Independent Director)

All the recommendations of the Audit Committee during the year were accepted by the Board of Directors of the Company. For further details, please refer to the Corporate Governance Report forming part of the Report.

Vigil Mechanism:

Your Company is committed to the highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has established a vigil mechanism by adopting a Whistle Blower Policy in compliance with the provisions of Section 177(9) and (10) of the Act and Regulation 22 of the LODR 2015. The Company has adopted a vigil mechanism to deal with genuine concerns of the employees and Directors. All employees and directors are made aware of the mechanism. The Company has established a system to ensure effective functioning of the mechanism.

The administration of the vigil mechanism is ensured through the Audit Committee. The Companys Vigil Mechanism / Whistle Blower Policy has been amended by the Board of Directors and the same is hosted on the website of the Company at www.ashokabuildcon.com

Policies / Codes of the Company:

The policies / Codes / hosted on the website of the Company at www.ashokabuildcon.com are given in Corporate Governance Report forming part of this report.

Subsidiaries

In accordance with Section 129 (3) of the Act and as per Indian Accounting Standards (Ind AS) 110, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries and associates which form part of the Report.

The salient features of financial statements of Subsidiary / Associates / Joint Ventures as per the Act are given in prescribed Form AOC-1 as Annexure I to the Boards Report.

During the year under review:

• The name of Ashoka Cuttack Angul Tollway Limited, a wholly owned subsidiary, has been struck off by the Registrar of Companies, New Delhi from the register of companies and the said Company is voluntarily wound up w.e.f. December 04, 2019.

• The Company acquired 1,60,16,100 equity shares of Rs. 10/- each fully paid of Ashoka GVR Mudhol Nipani Roads Limited. The remaining 600 shares are held by GVR Infra Projects Limited.

• The number of equity shares of the Company in Unison Enviro Private Limited (UEPL) increased to 5,17,28,586 shares retaining 51% stake in UEPL and balance 49% stake held by North Haven India Infrastructure Fund.

• The Company has won 2 projects on Hybrid Annuity Mode Basis and as per NHAI guidelines, the Company has incorporated the following Companies as its wholly owned subsidiaries as Special Purpose Vehicles for execution of the Projects viz.:

• Ashoka Kandi Ramsanpalle Road Private Limited and

• Ashoka Banwara Bettadahalli Road Private Limited

• The Company has also incorporated one more subsidiary viz. Ashoka Purestudy Technologies Private Limited wherein the Company holds 51% stake in equity share capital of the subsidiary.

In accordance with the 4th proviso of Section 136(1) of the Act, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.ashokabuildcon. com. Further, as per the 5th proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www. ashokabuildcon.com. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Companys registered office address.

Disclosure relating to remuneration of Directors, Key Managerial Personnel and particulars of employees

In accordance with Section 178 and other applicable provisions of the Act read with the Rule 6 of the Companies (Meeting of Boards and its Powers) Rules, 2014 issued thereunder and Regulation 19 of the LODR, 2015, the Board of Directors at their meeting, held on 30th September, 2014 formulated the

Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of the Report.

The Managing Director and Whole-time Directors of your Company do not receive remuneration from any of the subsidiaries of your Company. The information required under Section 197 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/employees of your Company is set out in Annexure III to the Boards Report.

The Remuneration Policy of the Company is available on the website of the Company, www.ashokabuildcon.com.

Directors and Key Managerial Personnel

In compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Sunanda Dandekar (DIN:07144108) had been appointed as an Independent Director on the Board of Directors of your Company to hold office for the second term of five (5) consecutive years from March 30, 2020 to March 29, 2025 with the period of office not liable to be determined by retirement of Directors by rotation.

Michael Pinto (DIN:00021565) retired as a Director of the Company w.e.f. April 01, 2019, on account of not seeking appointment for the second term.

Sanjay Londhe (DIN:00112604) and Milap Raj Bhansali (DIN:00181897) are liable to retire by rotation at the ensuing AGM pursuant to section 152(6)(c) of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company and being eligible have offered themselves for re-appointment.

Ashok Katariya (DIN: 00112240) has been re-appointed as the Whole-time Director, to be designated as the Chairman for a period of 2 years from April 01, 2020. Further, as per Section 196 and Schedule V of the Act the approval of the members has been obtained vide a special resolution for continuation of his office as a Whole-time Director, to be designated as the Chairman, upon attaining the age of 70 (seventy) years.

Satish Parakh (DIN: 00112324) and Sanjay Londhe (DIN: 00112604) have been re-appointed as Managing Director and Whole-time Director respectively for a period of 5 years from April 01, 2020.

Their appointments have been approved by the Members of the Company by way of Postal Ballot the results of which were declared on June 11 2020.

Satish Parakh, Managing Director, Paresh Mehta, Chief Financial Officer and Manoj Kulkarni, Company Secretary have been recognized as the Whole-time Key Managerial Personnel of your Company in accordance with the provisions of sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

None of the Key Managerial Personnel has resigned during the year under review.

The Board of Directors at its meeting held on 23rd March, 2020, approved the appointment of Ashish Kataria (DIN: 00580763) (Non-Executive / Non-Independent ) and Mahendra Mehta (DIN: 07745442) (Non-Executive / Independent Director) as Additional Directors with effect from 1st April, 2020, and subsequently the Members of the Company vide resolutions on 11th June, 2020, passed through Postal Ballot have approved the appointment of Mr. Ashish Kataria as a Non-Executive Director liable to retire by rotation and appointment of Mr. Mahendra Mehta as an Independent Director for the first term of 5 consecutive years to hold the office of the Director not liable to retire by rotation effective from April 01, 2020.

The Independent Directors of your Company have confirmed that (a) they meet the criteria of Independence as prescribed under Section 149 of the Act and Regulation 16 of the Listing Regulations 2015; and (b) they are not aware of any circumstance or situation, which could impair or impact their ability to discharge duties with an objective independent judgment and without any external influence.

The Ministry of Corporate Affairs, with the objective of strengthening the institution of Independent Directors, has launched the Independent Directors Databank on 1st December, 2019 in accordance with the provisions of the Companies Act, 2013 by notification of Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019. This is to confirm that all the Independent Directors have registered themselves pursuant to said Notification.

Further, in the opinion of the Board, the Independent Directors fulfill the conditions prescribed under the Listing Regulations 2015 and are independent of the management of the Company.

The Board states that the Independent Directors appointed during the year are person of integrity and have adequate experience to serve as an Independent Director of the Company.

Annual evaluation of Boards performance

In terms of the provisions of the Act read with Rules issued thereunder and the LODR 2015, the Board of Directors had carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the criteria laid down by the Nomination and Remuneration Committee. The criteria for evaluation of the Board performance have been mentioned in the Corporate Governance Report.

Number of meetings of the Board

The details of the number of Board meetings of your Company are set out in the Corporate Governance Report which forms part of the Report.

In terms of requirements of Schedule IV of the Act a separate meeting of Independent Directors for FY 2019-20 could not be held due to unprecedented situation arose in the month of March 2020 due to COVID-19 Pandemic. However a telephonic discussion was held among all the Independent Directors to review the performance of Non-independent Directors (including the Chairman), the entire Board and quality, quantity and timelines of the flow of information between the Management and the Board and Corporate Governance. The suggestions on corporate governance were given to the Board of Directors.

Directors Responsibility statement

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements pursuant to Section 134(3)(c) read with section 134 (5) of the Act and confirm that

• In the preparation of the annual accounts for the year ended March 31, 2020, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

• The Directors have approved the accounting policies and the same have been applied consistently and have made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2020 and of the profit of the Company for the year ended on that date;

• Proper and sufficient care has been taken 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;

• The annual accounts have been prepared on a ‘going concern basis;

• Proper internal financial controls are followed by the Company and that such financial controls are adequate and are operating effectively; and

• Proper systems to ensure compliance with the provisions of all applicable laws are in place and such systems are adequate and operating effectively.

Auditors and Auditors Reports Statutory Auditors

The Shareholders of the Company, pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, have appointed M/s. S R B C & CO LLP, Chartered Accountants, Mumbai, (Firm Registration No. 324982E/E300003), as the Statutory Auditors to hold office till the conclusion of the 29th Annual General Meeting (‘AGM) of the Company to be held for FY 2021-22. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors Reports on Standalone Financial Statements (SFS) and Consolidated Financial Statements (CFS) for the financial year 2019-20 do not contain any qualification, reservation or adverse remark except the following:

Remark:

• According to the information and explanations given by the management the title deeds of immovable properties included in property, plant and equipment are held in the name of the company except for title deed in case of two buildings (Gross Block of Rs.151.64 Lakhs, Net Block Rs.123.51 Lakhs), for which transfer deed is yet to be executed in the name of the Company.

Reply:

• The one Building has been constructed on the freehold land which was purchased from APMC, Pune. the transfer of the said building to the Company is pending subject to approval of the APMC, Pune, since there is long pending litigation among the APMC Members, the NOC/approval is pending. the Company fully possesses the said Building. All the documents for registration in the name of the Company have already been submitted to the concerned authorities and regular follow-up is being made.

• Another building at Hilla Heights, Mumbai necessary documentation to close the transaction appropriately is being organized.

There have been no instances of fraud reported by the Statutory Auditors under Section 143 (12) of the Companies Act, 2013 and the Rules framed thereunder either to the Company or to the Central Government.

Cost Auditors

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain cost records and get the cost records audited.

As per Section 148 and other applicable provisions of the Act read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company appointed M/s. CY & Associates, Cost Accountants, (Firm Registration No. 000334) as the Cost Auditors for the financial year 2020-21 on the recommendations made by the Audit Committee to conduct the audit of cost records of the Construction segment of the Company.

The remuneration proposed to be paid to the Cost Auditors, subject to the ratification by the members at the ensuing AGM, would not exceed Rs.5,40,000/- (Rupees Five Lakh Forty Thousand only) plus applicable taxes and reimbursement of out of pocket expenses.

The consent has been received from M/s. CY & Associates, Cost Accountants, to act as the Cost Auditors of your Company for the financial year 2020-21 along with a certificate confirming their independence. Further pursuant to the provisions of the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to M/s CY & Associates, Cost Accountants, is included in the Notice convening the 27th Annual General Meeting.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. S. Anantha & Ved LLP (LLPIN: AAH8229) Practising Company Secretaries to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as Annexure - IV to the Boards Report.

There are no observations / remarks or qualifications in the Secretarial Audit Report for FY2019-20 except the following:

• Remark: Delay in filing of E-forms with the Ministry of Corporate Affairs in few instances in respect of which the Company paid the additional fee and complied with the requirement.

• Reply: There was delay in filing few e-forms due to circumstances beyond control. However such forms were filed with additional filing fees as prescribed under the Act and compliance has been regularized. The necessary steps have been taken to avoid delay in filing of e-forms with MCA in future.

• Remark: The Company had received an e-mail from National Stock Exchange of India Limited (NSE) on 04th July, 2019; intimating that as per Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, the listed entity shall submit to the stock exchange, within 48 hours of conclusion of its General Meeting, details regarding the voting results in the format specified by SEBI. However the Company has submitted the voting results of the Postal Ballot concluded on 01st July, 2019 after 48 hours of conclusion.

• Reply: In this connection, the Company had submitted the reply on 6th July, 2019 to NSE clarifying the reasons for the delay in submission of postal ballot result which were beyond the control of the Company. Due to heavy rains in Mumbai, Government of Maharashtra declared a holiday and the process of compiling data got delayed due to this unexpected interruption. This had resulted in slight delay in submission to NSE. NSE has not further communicated to the Company in this regard.

Reconciliation of share capital audit:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practising Company Secretary.

Internal Auditors

M/s. Patil Hiran Jajoo, Chartered Accountants and M/s Suresh Surana & Co. LLP, had been appointed as Internal Auditors of the Company for FY2019-20 and the reports of the Internal Auditors are reviewed by the Audit Committee from time to time. The observations and suggestions of the Internal Auditors are reviewed and necessary corrective/preventive actions are taken in consultation with the Audit Committee.

The Company has appointed M/s. Patil Hiran Jajoo, Chartered Accountants, Nashik and M/s Suresh Surana & Co. LLP, Mumbai as Joint Internal Auditors for FY 2020-21.

Audits and internal checks and balances

M/s S R B C & CO. LLP, Chartered Accountants, audit the accounts of the Company.

The Company has independent internal auditors who review internal controls and operating systems and procedures. A dedicated Legal Compliance ensures that the Company conducts its businesses with legal, statutory and regulatory compliances. The Company has instituted a legal compliance programme in conformity with requirements of the Act to ensure that there exists a system which is adequate and operates effectively and efficiently. This system covers various statutes, such as industrial and labour laws, taxation laws, corporate and securities laws and health, safety and environment regulations.

Adequacy of Internal Financial Controls with reference to the financial statements:

The Companies Act, 2013 re-emphasizes the need for an effective

Internal Financial Control System (IFC) in the Company which should be adequate and shall operate effectively. The Company has an Internal Control System including Internal Financial Controls, commensurate with the size, scale and complexity of its operations as approved by the Audit Committee and the Board. The Internal Financial Controls are adequate and working effectively. The scope and authority of the Internal Audit is laid down by the Audit Committee and accordingly the Internal Audit Plan is approved.

To ensure effective Internal Financial Controls the Company has its own process driven framework for the year ended 31st March, 2020. The Company has appointed joint Internal Auditors. The Internal Auditors monitor and evaluate the adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit, concerned departments undertake corrective action, if any, in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee. The Board is of the opinion that the Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and /or improved controls wherever the effect of such gaps would have a material effect on the Companys operation.

investor education and protection fund (IEPF):

The Company has transferred a sum of Rs.15,486/- during the year under review to the Investor Education and Protection Fund established by the Central Government (IEPF). The said amount represents Unclaimed Dividend (interim) for the year 2012-2013 with the Company for a period of 7 years from their respective due dates of payment.

transfer of shares to IEPF

As required under Section 124 of the Companies Act, 2013, 712 Equity shares, in respect of which dividend has not been claimed by the members for Seven (7) consecutive years, have been transferred by the Company to IEPF during the year under review. The details of shares transferred have been uploaded on the website of IEPF as well as the Company.

Familiarisation Programme for Independent Directors

Pursuant to the requirement of Regulation 25(7) of the LODR 2015, the Company needs to formally arrange Induction or Familiarization Programme for 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 are mentioned in the Corporate Governance Report which is a part of the report. The Familiarisation Programme for

Independent Directors of the Company is hosted on the website of the Company at www.ashokabuildcon.com

Declaration of independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013read with the Schedules and Rules issued thereunder as well as Regulation 16(1) (b) of Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force)

Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection, appointment and remuneration of Directors and KMPs. The Remuneration Policy is stated in the Corporate Governance Report and is also available on the website of the Company at www.ashokabuildcon.com

Prevention of Insider Trading

The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, senior management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under report, there has been due compliance with the said code of conduct for prevention of insider trading based on the SEBI (Prohibition of Insider Trading) Regulations 2015. The Board of Directors has adopted the amended Code of Conduct pursuant to the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 which is effective from 1st April, 2019.

Insurance

The Companys plant, property, equipment and stocks are adequately insured against major risks. The Company has appropriate liability insurance. The Company has also taken Directors and Officers Liability Policy to provide coverage against the liabilities arising on them.

Disclosure on confirmation on the secretarial standards

Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India have been duly complied with.

Related party transactions

All Related Party Transactions that were entered into during the financial year were in compliance with the requirement of the Act and the Rules framed thereunder and LODR 2015. All Related Party Transactions are placed before the Audit Committee, the Board of Directors and Shareholders, as the case may be, for approval. During the financial year 2019-20, your Company entered into transactions with related parties as defined under Section 2(76) of the Act read with the Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms length basis and in accordance with the provisions of the Act, Rules issued thereunder and Regulation 23 of the LODR 2015.

During the financial year 2019-20, there were no materially significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large. However, the Company had entered into materially significant related party transaction with Ashoka Bettadahalli Shivamogga Road Private Limited, a step down subsidiary, for rendering services on EPC basis for Rs.1,049.40 Crore. The Company had also entered into materially significant transaction with Ashoka Kandi Ramsanpalle Road Private Limited and Ashoka Banwara Bettadahalli Road Private Limited, both wholly owned subsidiaries of the Company aggregating Rs.1,332 Crore during the year under review.

The details of the related party transactions are set out in Note No. 48 to the standalone financial statements forming part of the Report.

The Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in respect of disclosure of contracts/arrangements with related parties under section 188 is set out as Annexure II to the Boards Report.

Particulars of loans given, investments made, guarantee given and securities provided under section 186 of the Act

The details of loans, guarantees and investments under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

a) Details of investments made by the Company in equity/ preference shares and compulsorily convertible debentures, as on March 31, 2020 (including investments made in the previous years) are mentioned in Note No. 4 to the standalone financial statements.

b) Details of loans given by the Company to its Subsidiaries and Joint Ventures as on March 31, 2020 are mentioned in Note No. 39 to the standalone financial statements.

c) Outstanding Corporate Guarantees issued by the Company as on March 31, 2020 aggregating Rs.403.39 Crore. No New Corporate Guarantee was issued in the year under review.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure V to the Boards Report. The Annual Return is available at www.ashokabuildcon.com.

Corporate Social Responsibility

The Company continues to believe in operating and growing its business in a socially responsible way. This belief forms the core of the CSR policy of the Company that drives it to focus on holistic development of its host community and immediate social and environmental surroundings qualitatively. Hence in Accordance with the requirements of Section 135 of the Act, your Company has constituted a Corporate Social Responsibility Committee (“CSR Committee”). The composition and terms of reference of the CSR Committee are provided in Corporate Governance Report. The Company has framed Corporate Social Responsibility policy which is available at www. ashokabuildcon.com.

The Company was required to spend Rs.6.10 Crore on CSR activities for FY 2019-20 and a cumulative amount of Rs.2.18 Crore had remained unspent on CSR activities for previous years. However, the Company had spent Rs.8.34 Crore during FY 2019-20. The Company has thus spent the entire amount required to be spent on CSR activities in FY2019-20 and unspent amount carried forward from previous years has also been fully spent in FY2019-20 aggregating Rs.8.34 Crore, thereby complying the provisions of Section 135 of the Act.

Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed as Annexure VI to the Boards report.

Policy on prevention of sexual harassment

The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the workplace. All women, permanent, temporary, trainees or contractual women staff including those of service providers is covered under the policy. The Company has provided a safe and dignified work environment for employee which is free of discrimination. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of any such complaints of harassment.

An Internal Sexual Harassment Committee comprising management staff has been set up at office and Project locations, which includes three women to redress complaints relating to sexual harassment. The Committee also includes an outside woman representative from an NGO. During the year under review no case was reported under the said policy.

Disclosure as per section 22 of sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is given below.

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with the Rules thereunder, it is hereby declared that the Company has not received any complaint of sexual harassment during the year under review. Further, the Company conducts awareness programme at regular interval of time.

Disclosure under section 134 (3) (l) of the Act

Except as disclosed elsewhere in the report, there have been no material changes and commitments which can affect the financial position of the Company between the end of the financial year of the Company and date of the report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as stipulated under section 134 of the Act read with the Companies (Accounts) Rules, 2014 is as follows:

Conservation of energy

The Company does not have any manufacturing facility;

The other particulars required to be provided in terms of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable.

Nevertheless, during the period the Company continued its endeavor to conserve energy through various modes. Energy conservation continues to be a focus area for the Company. Energy conservation measures are meticulously followed and conform to the highest standards.

Particulars Remarks
I Steps taken or impact on conservation of energy In view of business activities of the Company, no substantial steps are required to be taken for conservation of energy other than those actually implemented by the Company
II Steps taken by the Company for utilizing alternate source of energy In view of business activities of the Company, no substantial steps are required to be taken for conservation of energy other than those actually implemented by the Company
III The capital investment on energy conservation equipment -

(B) Technology Absorption, Adoption and Innovation, Efforts made, Benefits derived, Import of technology:

Particulars Remarks
i the efforts made towards technology absorption No specific efforts made other than in the ordinary course of execution of the Project
ii the benefits derived like product improvement, cost reduction, product development or import substitution N.A.
iii in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year N.A.
the details of technology imported N.A.
the year of import N.A.
Whether the technology fully absorbed N.A.
If not fully absorbed, areas where absorption has not taken place, reasons thereof N.A.
iv The expenditure on Research and Development Nil

details of foreign exchange earnings and expenses

There are no earnings in foreign currency during the year under review.

The expenses in foreign exchange are as follows:

Particulars Amount (Rs. in lakh)
Tender & Survey Fees 7.20
Travelling Expenses 28.22

Details on Internal Financial Controls

• The Company has in place adequate internal financial controls, some of which are outlined below.

• Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Indian Accounting Standards) Rules, 2015 that continue to apply under Section 133 and other applicable provisions of the Act to the extent applicable. These are in accordance with generally accepted accounting principles in India including Indian Accounting Standards (IND AS). Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

• The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of your Company. The accounts of the subsidiary companies are audited and certified by the respective Auditors of the Subsidiaries for consolidation.

• Your Company has implemented new ERP (SAP) during the financial year 2018-19 and is being used regularly and effectively.

• The opportunity presented by the emergence of Digital Technologies is one of the key strategic enablers to our sustainable growth. As a step towards process simplification, integration and speed, we have implemented the SAP S4 - HANA platform. This has enabled the organisation with a single source for financial accounting, costing, and asset accounting through Integrated System under SAP S4/HANA architecture.

• The Management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes appropriate action, wherever necessary. Internal Auditors have been appointed who report on quarterly basis on the processes and system of accounting of the Company. The observations, if any, of the Internal Auditors, are resolved to their satisfaction and are implemented across all the sites. During the year the internal financial controls were reviewed and tested by a reputed firm of Chartered Accountants who report on quarterly basis on the process and systems of accounting and other operational processes of the Company. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

Particulars of Employees

The information required pursuant to Section 197 of Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of Companies Act, 2013 the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Management Discussion and Analysis

Management Discussion and Analysis is given in a separate section forming part of the Report.

Corporate Governance

The report on Corporate Governance as stipulated under the LODR 2015 forms an integral part of the report and the requisite Certificate duly signed by the Practising Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the report.

business responsibility report

As stipulated under the LODR 2015, the Business Responsibility report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Report as Annexure IX to the Boards Report.

General

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:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

• Receipt of any remuneration or commission by the Managing Director, the Whole-time Directors of the Company from any of its subsidiaries.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

• 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.

• Secretarial Standards are issued by the Institute of Company Secretaries of India (ICSI), one of the premier professional bodies in India. The Company complies with the Secretarial Standards.

Acknowledgement

Your Directors take this opportunity to thank various Government Authorities, including National Highways Authority of India, Ministry of Road Transport & Highways, Public Works Departments, Road Development Corporations of the various States, Power Distribution Corporations of various States where we have operations, Central and State Governments for their support, continuous co-operation and guidance.

Your Directors also thank the Ministry of Corporate Affairs, BSE Limited, National Stock Exchange of India Limited, Regulatory Authorities, Financial Institutions and Banks, Credit Rating Agencies, Shareholders, Contractors, vendors, and business associates for their continuous support during the year and look forward for their support in future as well.

The Directors would also like to place on record their appreciation for the contribution and dedication of the employees of the Company at all levels to the Companys growth.

For and on behalf of the Board of Directors
Sd/-
(ashok KATARIYA)
Place Nashik Chairman
Date June 15, 2020 (DIN: 00112240)