Bharat Road Network Ltd Directors Report.

Dear Members,

Your Directors have the pleasure in presenting the Twelfth Annual Report, together with the Audited Accounts of your Company, for the Financial Year ended on 31st March, 2019. The summarized financial performance of your Company is as under:

FINANCIAL RESULTS AND OPERATIONS:

Particulars

Standalone

Consolidated

Year ended March 31, 2019 Year ended March 31, 2018 Year ended March 31, 2019 Year ended March 31, 2018
Revenue from Operations 1,052.60 3,333.41 40,140.75 15,320.49
Other Income 6,394.65 3,084.02 4,805.28 9,751.37
Total Income 7,447.25 6,417.43 44,946.03 25,071.86
Profit/(loss) before Depreciation, Finance Costs, Exceptional 6,434.22 4,927.42 22,341.80 14,168.15
items and Tax Expense
Less: Depreciation / Amortisation / Impairment 4.70 3.25 3,370.20 42.56
Profit /(loss) before Finance Costs, Exceptional items and Tax 6,429.52 4,924.17 18,971.60 14,125.59
Expense
Less: Finance Costs 4,395.44 872.51 20,482.13 4,385.71
Profit /(loss) before Share of Profit/(Loss) of Associates, 2,034.08 4,051.66 (1,510.53) 9,739.88
Exceptional items and Tax Expense
Add/(less): Exceptional items - - - -
Share of Profit/(Loss) of Associates - - (2,238.06) (6,267.84)
Profit /(loss) before Tax Expense 2,034.08 4,051.66 (3,748.59) 3,472.04
Less: Tax Expense (Current & Deferred) 606.28 1,159.86 604.83 1,157.44
Profit /(loss) for the year (1) 1,427.80 2,891.80 (4,353.42) 2,314.60
Total other Comprehensive Income/(loss) (2) 0.30 (5.27) 2.09 (4.67)
Total (1+2) 1,428.10 2,886.53 (4,351.33) 2,309.93
Profit/(Loss) for the year attributable to:
Owners of the Company - - (3,825.77) 2,330.76
Non-Controlling Interest - - (527.65) (16.16)
Other Comprehensive Income for the year attributable to:
Owners of the Company - - 2.85 (4.67)
Non-Controlling Interest - - (0.76) -
Total Comprehensive Income for the year attributable to:
Owners of the Company - - (3,822.93) 2,326.09
Non-Controlling Interest - - (528.41) (16.16)
Balance brought forward from the previous year 2,541.89 160.81 (11,234.84) (13,055.48)
Profit/(Loss) available to Owners for appropriation 1,427.80 2,891.80 (3,825.77) 2,330.76
Appropriations:
Dividend (419.75) (420.00) (419.75) (420.00)
Tax on Dividend (86.28) (85.45) (86.28) (85.45)
Adjustment for Other Comprehensive Income: Gain/(Loss) 0.30 (5.27) 2.85 (4.67)
Balance carried to Balance Sheet 3,463.96 2,541.89 (15,563.79) (11,234.84)

Note: The above figures have been extracted from the Standalone and Consolidated Financial Statements of the Company, for the Financial Year ended on March 31,2019, prepared as per Indian Accounting Standards (Ind-AS).

During the year under review, your Company has earned on a Standalone basis, Net Profit of Rs. 2034.08 Lakhs, as against Net Profit before tax of Rs. 4051.66 Lakhs earned in the previous Financial Year. Gross Revenue was Rs. 7447.25 Lakhs as against Rs. 6417.43 Lakhs in the previous Financial Year.

Key Financial Ratios in terms of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are as under -

Particulars FY 2018-19 (%) FY 2017-18 (%)
Debtors Turnover Ratio 0.39 1.21
Inventory Turnover Ratio NA NA
Interest Coverage Ratio 1.46 5.64
Current Ratio 1.18 2.09
Debt Equity Ratio 0.12 0.18
Operating Profit Margin 0.86 0.77
Net Profit Margin 0.19 0.45
Return on Net Worth 0.01 0.02

NA - Not applicable

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof is as mentioned below -

• There has been a reduction in Debtors Turnover Ratio mainly on account of reduction in Turnover.

• There has been a reduction in Interest Coverage Ratio mainly on account of increase in Finance Cost.

• There has been a reduction in Current Ratio mainly due to reduction in Loan and Trade receivable.

• There has been a reduction in Debt Equity Ratio mainly due to decrease in debt and other current liabilities.

• There has been a reduction in Net Profit Margin mainly due to fall in profitability.

• There has been a reduction in Return on Net Worth on account of lower profitability.

Your Company has adopted Indian Accounting Standards (referred to as "Ind-AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 with effect from April 1, 2017 and therefore Ind-AS issued, notified and made effective till the financial statements are authorised have been considered for the purpose of preparation of these financial statements.

DIVIDEND

The Board of Directors at its meeting held on 28th May 2019 has recommended Dividend of Rs. 0.50 (5%) per Equity Share on 8,39,50,000 Equity Shares of the Company of Rs. 10 each fully paid- up for the Financial Year 2018-19 to the Members of your Company.

The proposal is subject to the approval of the Members at the ensuing Annual General Meeting of the Company. The Dividend, if paid, will entail a cash outflow of Rs. 4.20 crore (exclusive of Dividend Distribution Tax).

The dividend pay-out is in accordance with the Companys efforts to pay sustainable dividend linked to long-term growth objectives of the Company and enhancing stakeholder value.

TRANSFER TO RESERVES

No amount has been transferred to any Reserve during the year under review.

PROMOTERS GROUP SHAREHOLDING

As on March 31,2019, the total shareholding of Promoter Group of your Company stood at 53.76% (previous year 65.10%) in the Paid- up Share Capital of the Company.

Members may refer to the Extract of Annual Return (MGT-9) for details of Promoters Group shareholding.

As on March 31, 2019, 22.16% (previous year 18.30%) of the Promoters Group shareholding is under pledge.

In compliance with Regulation 31(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015”), the entire shareholding of Promoter(s) and Promoter group is in dematerialized form.

PUBLIC DEPOSITS

Your Company has not invited or accepted any deposits covered under Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014, during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

I. ECONOMY & INDUSTRY

The current global economic order is apparently heading towards significant stress due to the political uncertainty and rising trade protectionism. There have been signs of profound backlash against globalization and simmering trade conflict amid major economies. The International Monetary Fund (IMF) estimates the global economic growth to be at 3.3 per cent in 2019, down from 4 per cent in 2017 and 3.6 per cent in 2018.

Amid such global uncertainties, Indian economy continues to be the brightest spot and is expected to maintain its position as the fastest growing major economy in the world. The Organization for Economic Co-operation and Development (OECD) said in its Economic Outlook that Gross domestic product (GDP) growth in India is projected to strengthen to close to 7.25% in FY19 and close to 7.5% in FY20. However, there are various external factors such as rise in crude oil prices and currency depreciation which might make Indias economic outlook vulnerable unless private investments and consumption drives the economy.

The Infrastructure sector continues to be the key driver of the Indian economy. A higher industrial growth supported by well-connected infrastructure facility is vital to maintain the momentum of higher sustainable economic growth.

Over the past few years, Government of India has been persistently displaying their unwavering thrust on infrastructure sector. Among the core infrastructure verticals, the Roads and Highways continue to receive fair share of allocation in the interim union budget for FY20. Announcing a capital outlay of INR 1.5 tn, up by 21% over the FY19 budgeted figure of INR 1.21 tn; the Government has amply demonstrated its commitment towards Roads and Highways sector.

Economic growth, increasing government thrust, preference of road in freight traffic, spurt in private participation and surge in passenger traffic and vehicle density continues to be the key growth drivers for increased investments in the Roads and Highways sector. Growing domestic trade flows have led to a rise in commercial vehicles and freight movement; supported by rise in sale of commercial vehicles from 6,32,851 in 2013-14 to 10,07,319 in 2018-19 at a Compounded Annual Growth Rate (CAGR) of 8%. Roads traffic share of the total traffic in India has grown from 13.8% to 65% in freight traffic and from 32% to 90% in passenger traffic over 1951-2017.

Government of India has therefore undertaken major initiatives to upgrade and strengthen highways and expressways in the country including enabling policy measures to facilitate private investments in this sector. Some of the key initiatives include Bharatmala and National Highway Development Program. In addition to Highway Development, focus remains on efficient operations & network management for improving logistics efficiency, which shall give rise to new investment opportunities.

Under the Bharatmala Pariyojana, Government of India plans to spend INR 6.92 tn on 83,677 kilometers of road construction by 2022 to boost economic growth and employment. The Bharatmala Pariyojana has six important components-development of economic corridors, development of inter-corridor and feeder routes, improvement of the efficiency of existing National Corridors (Golden Quadrilateral and the North-South & East-West corridors), development of coastal and port connectivity roads, development of border and international connectivity roads and development of Greenfield expressways.

The key drivers for growth in Roads and Highways sector are highlighted below:

• Strong Project Pipeline: Following record project awarding in FY18, the momentum in project ordering slowed down remarkably in FY19 due to delayed financial closure for HAM projects and land acquisition issues. A huge pipeline of project is expected in FY20-22 based on a basket of 26,000 km to be ordered in the next 2-3 years under the Bharatmala plan, of which DPRs are reportedly ready or in final stages for 17,000 km.

• Judicious Mix of Project Award under EPC, HAM and BOT (Toll): After successfully rolling out the Hybrid Annuity Model (HAM) projects over the past few years, a resurgence of Public Private Partnership (PPP) model under BOT (Toll) is expected in FY20. To encourage the private participation in the development of highways projects, NHAI has shown renewed interest in rejuvenating BOT (Toll) and they are considering a list of potential projects under Bharat Mala for bidding under BOT (Toll) mode. Additionally, NHAI is also expected to award more EPC projects vs HAM in FY20, to avoid execution delay.

• Asset Monetisation under Toll Operate Transfer: Asset recycling, through the Toll-Operate-Transfer (ToT) Model has been taken up by NHAI. The first bundle of 9 highways with an aggregate length of about 680 km was monetised successfully for an investment of USD 1.45 bn. Although the lackluster response for TOT second bundle has compelled the Authority to opt for rebidding, it is expected to gain momentum once the projects are announced in smaller packages.

• Fiscal Incentives: 100% Foreign Direct Investment (FDI) through automatic route allowed subject to applicable laws and regulation. Right of Way (ROW) for project land made available to concessionaires free from all encumbrances. 100% tax exemption for 5 years and 30% relief for next 5 years, which may be availed of in 20 years.

• Increasing participation of Private Equity funds: Private Equity has contributed to road projects in the past. Going ahead, Private Equity investment can further pick up, following the recent announcements of 100% exit policy for debt- stressed operators for toll roads.

• Technology and Automation in Highway Operations: The decision of the Ministry of Roads Transport and Highways to roll out Electronic Toll Collection (ETC) programme in the country under the brand name FASTag has resulted in greater user convenience through automation. Electronic Toll Collection is being encouraged to minimize toll collection time and reduce pilferage in toll collection on NHs. Enabling facilities for ETC is being put proactively to enable seamless movement of vehicles on the National Highways to promote digital transformation and cash less economy.

II. OPPORTUNITIES

The Roads and Highways sector offers a plethora of opportunities for the companies engaged in Highway construction and development. The initiatives such as Bharatmala Pariyojana envisages to build 83,677 km of road by 2022 with a total estimated investment at INR 6.92 tn. The project will be implemented jointly by National Highway Authority of India (NHAI), Ministry of Road Transportation and Highways (MoRTH), National Highways and Infratructure Development Corporation Limited (NHIDCL) and state Public Works Department (PWD) for faster execution of the project.

NHAI in FY18 awarded 150 road projects for constructing about 7,400 kilometers of highways worth Rs. 1.22 Lakhs crore. During FY18, National Highways of 9,829 Kms were constructed with a construction record of 28 Km per day. This represents ~20% growth over the last year, when 8,231 km were constructed.

NHAI Road Awards

Year Length (Km)
FY15 3,069
FY16 4,368
FY17 4,337
FY18 7,400
FY19 6,000

Source: NHAI

Over the next 5 years, the investment in National Highways awards will majorly be under EPC and HAM, a breakaway from past trends. BOT (toll) has also started seeing some interest from Authority and is likely to gain traction in FY20-22.

NHAI is also focused towards monetizing National Highway (NH) projects which are operational and are generating toll revenues for at least two years after the Commercial Operations Date (COD) through the Toll Operate Transfer (TOT) Model. Around 75 operational NH projects completed under public funding have been preliminarily identified for potential monetization using the TOT Model.

Monetization of public funded NH roads is expected to create a framework for attracting long term institutional investment on the strength of future toll receivables. Market feedback indicates that certain institutional investors from outside the country have a long term investment appetite and are keen to participate in operational highway projects with stable toll revenue outlook. These investors generally hesitate in taking construction risk but are willing to look at de-risked Brownfield road assets.

III. BUSINESS & OPERATIONS

Your Company is a road BOT company in India, focused on development, implementation, operation and maintenance of National and State Highways with existing projects in states of Uttar Pradesh, Kerala, Haryana, Madhya Pradesh, Maharashtra and Odisha. At present, all of your Companys projects are implemented through Special Purpose Vehicles (SPVs), either directly or in partnership with other infrastructure players.

The main business operations of your company can be divided into three categories, i.e.

(i) Project development and implementation;

(ii) Tolling Operations and Highway Management; and

(iii) Advisory Services and Project Management Services including Construction Supervision/Debt Syndication for your Companys projects.

During the year under review, your Company has focused on all these areas to augment resources.

Your Company has a project portfolio consisting of six (6) BOT Projects covering over 2000 Lane km of Roads and Highways across 6 states in India. Out of the six projects in our portfolio, five (5) projects are in Tolling & Operational phase covering approximately 1700 Lane kms, and one (1) Project is under construction which involves development of approximately 400 Lane kms. The Operational projects are located in the states of Kerala, Madhya Pradesh, Haryana, Uttar Pradesh and Odisha whereas the under construction project is located in the state of Maharashtra.

• Operational Projects:

1. Guruvayoor Infrastructure Private Limited ("GIPL"):

Four laning of the existing two lane portion of the Thrissur- Angamali section of NH-47 from km 270.00 to km 316.70 and improvement, operation and maintenance of the Angamali-Edapalli section from km 316.70 to km 342.0 of NH-47 in the state of Kerala on BOT Toll basis.

2. Mahakaleshwar Tollways Private Limited ("MTPL"):

Four laning of the Indore-Ujjain portion from Ch. 5/2 to

Ch. 53 on State Highway 27 on BOT Toll basis in the state of Madhya Pradesh.

3. Ghaziabad Aligarh Expressway Private Limited ("GAEPL"): Four laning of the Ghaziabad-Aligarh section of NH-91 connecting km 23.60 to km 140.20 of NH-91 and subsequent six laning of the project highway (excluding Aligarh bypass from km 129.60 to km 149.90) before the 12th anniversary of the appointed date on BOT (Toll) basis.

4. Kurukshetra Expressway Private Limited ("KEPL"):

Four laning of the Rohtak-Bawal section of NH-71 from km 363.30 to km 450.80 in the state of Haryana on DBFOT Toll basis.

5. Shree Jagannath Expressways Private Limited ("SJEPL"): Six laning of the existing road from km 413.00 to km 418.00 and km 0.00 to km 62.00 on Chandikhole- Jagatpur-Bhubaneswar section of NH-5 in the state of Odisha on DBFOT Toll basis.

• Under Construction Projects:

1. Solapur Tollways Private Limited ("STPL"): Four laning of the Solapur-Maharashtra/Karnataka border section of NH-9 from km 249.00 to km 348.80 in the state of Maharashtra on DBFOT Toll basis.

• Project under Foreclosure:

1. Orissa Steel Expressway Private Limited ("OSEPL"):

The OSEPL Project for augmenting the existing road on the Rimuli-Roxy-Rajamunda section of NH-215 from km 163.00 to km 269.00 on DBFOT basis was signed on July 6, 2010 with the NHAI. Due to non-unavailability of Land and Forest clearance issues, NHAI agreed to amicably foreclose the said Agreement without any penalty and agreed to address the claims/ losses of OSEPL through suitable redressal mechanism including Arbitration. Based on the same, a joint inspection of the Project site was carried on and thereafter the project was handed over to NHAI on 0203-2017 on "as is where is basis”. OSEPL submitted a claim of around Rs. 945 crore to NHAI towards losses including cost incurred, finance costs, overheads and loss of profit- up etc. to March 31, 2018. The Arbitration process duly commenced during the Financial year 2018-19 and the company successfully won the Award of approximately Rs. 350 Crores (including interest) on 31st March 2019. The Award is supposed to be executed after 90 days of date of award. It is one of the highest value awards won by any company against NHAI in their history on a single Arbitration on a single project.

However, NHAI has filed an appeal under section 34 of the Arbitration and Conciliation Act, 1934 in the High Court against the said order of the Arbitration Tribunal. Currently, the matter is subjudice.

IV. BUSINESS PERFORMANCE

During the year under review, your Company continued its focus on improving operational efficiency through increased automation of services and adopted prudent project delivery mechanism to expedite execution of the existing asset under construction.

• Traffic and Revenue Growth

Despite natural calamities and religious issues affecting Tolling of Kerala project, the Average Daily Revenue (ADR) across all the operational projects increased by 5.7% to Rs.165.84 Lakhs in Financial Year 2018-19 from Rs. 156.87 Lakhs in Financial Year 2017-18. The toll revenue is expected to improve further with increased economic activity across the high growth industrial corridors along the project stretches. Few of your Companys projects have implemented new updated most modern Tolling system which reflected in higher Toll collection.

Ghaziabad Aligarh Expressway Private Limited: The project continues to register a impressive toll revenue growth as the Average Daily Revenue increased from Rs. 52.94 Lakhs in FY 2017-18 to Rs. 57.79 Lakhs in FY 201819. Major increase in Revenue was on account of growth of Goods carrying traffic on this corridor. The toll revenue is expected to improve further as soon as the 4 laning of Aligarh Kanpur section is completed.

Mahakaleshwar Tollways Private Limited: Post installation of new upgraded Toll Management System (TMS), and by exerting stringent control over vehicle movement over Toll Plazas, the project has recorded a very healthy tolled traffic growth and improved revenue collections. In FY 2018-19, the Average Daily Revenue has grown by 19.7% to Rs. 8.61 Lakhs per day from Rs. 7.19 Lakhs per day in FY 2017-18. The company is also pursuing claims on Madhya Pradesh Road Development Corporation (MPRDC) for the Toll loss due to local political disturbance and loss of actual Toll during demonetization and Simhasta Parva.

Shree Jagannath Expressways Private Limited: The project is nearing completion and has expeditiously executed the balance work on the stretches which were handed over late to the Company due to Right of Way (ROW) issues. The Average Daily Revenue (ADR) marginally improved to 42.79 Lakhs in FY 2018-19 as compared to Rs. 39.91 Lakhs in FY 2017-18. In the coming years, it is expected that revenue shall increase further on account of major boost in economy resulting from expected growth of mining industry in the hinterland. The Company has won the Arbitration Award of over Rs. 150 Crore towards loss of Toll for Mahanadi Bridge. The Company is on the verge of receiving such amount once the final hearing in honorable High Court is completed.

Kurukshetra Expressway Private Limited: This project displayed remarkable improvement in traffic control after installation of state-of-the-art Toll Management Services (TMS). The Average Daily Revenue reached to Rs. 26.07 Lakhs from Rs. 24.28 Lakhs, an increase by 7% till October 2018 when a parallel corridor of Kundli Manesar Palwal (KMP) Expressway was opened by the Haryana Government which resulted in reduced Toll collections. The company is now contemplating taking contractual actions against NHAI on this issue. During the year the company also won the Arbitration Award of Rs. 47 Crore and 58 days extension of Concession Period which has been challenged by NHAI in High Court. The case is now under legal proceedings.

Guruvayoor Infrastructure Private Limited: During the year under review, the Company badly suffered due to worst flood during August 2018 and subsequently due to political turmoil on Sabarimala shrine issue, restricting movement of pilgrims. Required claim has been lodged with NHAI and Insurance agencies to recover the damage and loss. In spite of the above the project has shown a robust growth of 1.7% in Average Daily Revenue to Rs. 31.66 Lakhs in FY 2018-19 as against Rs. 31.14 Lakhs in FY 2017-18 due to increased economic activity along the project corridor and strengthening of TMS technology.

Solapur Tollways Private Limited: During the year under review, the company achieved substantial work progress by completing almost 75% of the project. At certain locations, the Project suffered due to delay in acquisition of land and shifting of utilities under responsibility of Concession Authority. The extension of project completion date has been recommended by NHAI till October, 2019 which is under process at NHAI-HQ. However the company plans to achieve partial COD for 75 Km length and commence Toll operations during 3rd Quarter of next Financial Year.

• Technology Up-Gradation: Your Company maintained its focus on strengthening IT system and capabilities to create digital, scalable and sustainable business eco system. The company has introduced the latest Hybrid ETC system in 2 projects and on course to install the system in other 3 NHAI projects under Change of Scope (COS) from NHAI. The company is committed towards driving efficiency through more advanced and fully proven technologies to minimize human errors resulting from manual intervention and also moving towards more robust system. During the year under review, your Company has continued its journey on a Digital Transformation initiative for automating operations across Toll Plaza and construction projects keeping an eye on further improvement in toll revenue, better operational efficiency and proactive business planning.

• Effective Project Management and Delivery: Your Company intends to focus on improving project monitoring and management capabilities to faster execution of project. The company also intends to implement robust systems through IT platforms for developing user friendly tools for Project Management.

V. FUTURE BUSINESS PLANS

Your Company is a pure play BOT Company focused on development, implementation, operation and maintenance of roads/highways projects. As an infrastructure developer operating on the asset aggregation platform, your Companys business growth strategy is strongly driven by portfolio expansion and improving operational efficiency for value accretion.

Uniquely positioned to expand through Inorganic growth:

Leveraging on the domain knowledge and a decade long experience in the infrastructure space, your Company is looking at inorganic growth opportunities either through acquisition of projects or consolidation of its stake in existing projects. Your Company through increased activity in the secondary market is continuously evaluating assets which are available at attractive valuation assuming such acquisitions are supported by sound strategic and financial objectives. Your Company has been able to consolidate its stake in one of its assets, Guruvayoor Infrastructure Private Limited in Kerala, where your Company acquired 73.98% stake (acquisition of 26% out of the 51% stake is under progress) from its partner. Your Company has created a platform where it expects to see a lot of consolidation play happening.

Evaluating opportunities in Primary Market:

The Government is focusing on transforming India through infrastructure creation at gigantic scale with estimated investments of over Rs 6.9 tn towards constructing 83,677 Km of roads under Bharatmala Pariyojana and other road development programs. With such a huge opportunity shaping up the roadmap for growth of the sector, your Company is strongly placed to capitalise on its financial capability and asset management skill set, to make the most of the opportunities and strengthen its asset portfolio. Your Company is assessing commercial viability for bidding for primary market opportunities under Hybrid Annuity Model (HAM) and Toll Operate Transfer (TOT). Your Company will continue to leverage its expertise in managing infrastructure assets under the PPP model to drive long-term growth.

Shareholders Value Enhancement :

Your Company follows a policy of systematic review of the incremental value-creation potential of assets under its management and takes a strategic decision to maximize value of future cash flows by judicious churning of the portfolio either through asset restructuring or divestiture. As an infrastructure developer working on transportation asset ownership model, your company is committed to abide by a robust asset management policy aimed at strengthening its value creation capabilities through constant monitoring asset performance.

Optimizing Financial Structure:

Your Company is exploring options for refinancing in various SPVs to lower borrowing costs and improve cash flows. The priority for your Company is to continue its effort towards repricing and re-tenure its debt in all its assets. Though your Company sources funding for existing projects primarily through long term loans from banks and other financial institutions, the Company intends to continue to evaluate various funding mechanisms which will enable it to enhance credit rating and in turn reduce borrowing cost and improve liquidity.

Claim and Contract Management

Claims and Contract Management are an integral part of highway concession business. Your Company is committed towards adopting a mature Claims Management process across the value chain to create efficiency, effectiveness, and ultimately competitive differentiation in claims settlement and dispute resolution. With a constant focus on enhancing capabilities to better assess, manage, and mitigate claims and risk; the Company is correspondingly focused towards expeditious handling of claim through negotiation, mediation, arbitration, and finally, to litigation for earliest settlement.

Continue to focus on technology and operational efficiency:

With gaining prominence of IT system and other internal processes in every aspect of business and operations, your Company is constantly strengthening the IT system and capabilities to create an environment friendly sustainable business eco system. Your Company is committed towards driving efficiency through more advanced and fully proven technologies to minimize human error resulting from manual intervention and also moving towards more environment friendly transportation solutions that are sustainable both from energy consumption and an environment perspective.

Your Company is constantly in the process of upgrading the existing IT systems and implementing a fully automated operation management system integrating technology primarily to monitor the flow of vehicular traffic, real time revenue and collection monitoring and improved road safety.

As part of the digital drive, your Company aims to create one single consolidated platform across all organizations for all stakeholders-Operations, Finance and Management to help them in enhancing their efficiencies in services like Revenue Reporting, Traffic Growth Analysis, Incidence Management and Administration through mobile and web channels. The emerging technology interventions such Sensor driven/ RFID driven auto capture or Internet of Things (IoT), Artificial Intelligence/Machine Learning driven smart projections or analytics, automated traffic volume reporting on real time basis, Cloud based Data Management System and Workflow Management are explored for better and informed decision making planning.

Enhancing in-house integration with an aim to improve performance and enhance returns:

Your Company seeks to continue its focus on enhancing inhouse competencies by expanding into various functional aspects of projects, thereby reducing dependency on third parties. Your Company intends to focus on strengthening project designing and engineering capabilities, Project Monitoring and Management capabilities. It is believed that developing specialized in-house capabilities would reduce dependency on third parties, thereby avoiding risks and minimizing costs associated with outsourcing.

VI. FUTURE OUTLOOK

India has a massive infrastructure investment requirement to the tune of USD 4.54 tn by 2040 and infrastructure creation of such a gigantic scale does require a wide range of resources, expertise and skills together with funding either from public and private sources. Considering the limited scope to maneuver public spending of such a massive scale and size, the Public-Private Partnership (PPP) assumes significance, both for attracting investment in infrastructure and leverage on the asset management skill set of the private sector.

As PPP model is aimed at leveraging on the private capital for infrastructure development and making the best use of the asset management skill set of the infrastructure companies, your Company sees itself as a enabler for PPP projects while acting as a bridge between the Public Asset and Project Authority. Your company leverage on its strong asset management skill set, access to capital and rich pool of contractors and its expertise in financial engineering to implement projects.

Over the past few years, there has been a lot of proactive measures being taken up for reviving the infrastructure sector and thankfully Roads and Highways sector has so far been the biggest beneficiary of Governments thrust on infrastructure. Economic growth, preference of road in freight traffic, spurt in private participation and surge in passenger traffic and vehicle density are key growth drivers for infrastructure investments. Greater connectivity between different cities, towns and villages has led to increased road traffic over the years.

The Government has given a massive push to infrastructure by allocating Rs. 5.97 Lakhs crore for infrastructure in the Union Budget 2018-19. For the Road sector, the Government provided an outlay of Rs. 1.21 Lakhs crore. The rise in investments, reforms and higher budgetary support is expected to drive growth in roads and highways sector in India. The Government of India has succeeded in providing road connectivity to 85% of the 178,184 eligible rural habitations in the country under the scheme. All villages in the country are expected to be connected through a road network by 2019, as against 2022 previously, under the Pradhan Mantri Gram Sadak Yojana (PMGSY). Total length of roads constructed under PMGSY in FY18 was 47,447 km. Under the Union Budget 2018-19, Government of India allocated an investment of Rs. 19,000 crore for PMGSY and will spend around Rs. 1 Lakhs crore during FY 19-20 to build roads in the country under PMGSY.

NHAI has started the tendering process for projects worth ~Rs 1tn. Out of this, HAM accounts for ~60% of the tender value with EPC accounting for the rest. Currently BOT projects are not being actively tendered by NHAI.

The Government of India is quite empathetic to the concerns of the industry and has shown intent to resolve the crisis through a series of reform measures, the actual action on the ground needs to be effective enough to tackle the core issues related to land acquisition, time bound resolution of disputes, faster settlement of claims and local administrative support to streamline on-ground execution mechanism.

VII. RISK MANAGEMENT

Risk management forms an integral part of your Companys future growth strategy. The risk management strategy of your Company hinges on a clear understanding of various risks and adherence to well-laid out risk policies and procedures that are benchmarked with industry best practices. Your Company has developed robust systems and embraced sturdy practices for identifying, measuring and mitigating various risks and ensuring that they are maintained within pre-defined risk appetite levels.

Risk and Concern

• Growth Risk

Growth risk is the inability to effectively manage growth or to successfully implement business plans which depends heavily on the ability to plan and execute the growth strategy. Growth Risk can impact organic as well as inorganic growth vision of the Company in the form of inability to successfully bid for new projects at attractive IRR or acquisition of existing stressed projects at attractive valuation.

Your Companys growth risk mitigation strategy is guided by constant review and analysis of market opportunities and trends in both organic and inorganic space for selective bidding for new projects and acquisition for projects falling within our stringent investment criteria.

• Business Risk

Business Risk includes risks with respect to competition, capital intensiveness, input cost, traffic growth for BOT projects and labour.

Your Company faces risk of competition as the sector is growing and more players get qualified to bid for new projects, also as the business which your company operates is capital intensive by nature, availability of sufficient funds is critical for bidding of projects, particularly in case of fund-based projects such as BOT- toll, HAM and TOT model. Further, availability of the right quality and quantity of resources is critical for the timely completion of infrastructure projects, any unexpected increase in the input costs will have direct impact on overall margins. Moreover undue attrition of manpower could lead to loss of competitive edge as it may lead to project delays.

Your Company has a well-designed mitigation plan to address these business risks. Company adapts its policies and procedures to ensure a sustained business model. Your Company strive to execute maximum number of projects before their scheduled completion and within the budgeted cost. Your company operates its working capital cycle in a highly optimized manner, your company enters into contracts with EPC Partners which has the relevant cost escalation provisions that protect your Companys margins. Further, your companys focus is to build an organisation of highly motivated employees, having the ability to execute ambitious business goals with passion and commitment, thereby exceeding customer aspirations. The working environment of the Company is cordial and employee-friendly. The remuneration is at par with the industry standards.

• Regulatory Risk

The business of the company is significantly dependent on various Government entities and could be adversely affected if there are adverse changes in the policies adopted by such Government entities.

Your Company regularly reviews and monitors government policies and likely developments along with an impact assessment of those policies so that necessary actions can be planned and implemented from time to time.

VIII. HUMAN RESOURCE DEVELOPMENT

Your Company has shown commitment in embracing an integrated approach towards the overall development of Human Resources and adopted best human resource practices over the past few years. In terms of its manpower strength, the overall headcount of the group including the projects till 31st March 2019 is 1104 which includes 13 employees of Bharat Road Network Limited & 1091 at project SPVs, which consists on-roll employees & off-roll resources of 624 & 480 respectively.

The Human Resources department acts as a catalyst to enable employees under BRNL and its SPV to contribute at optimum levels towards the success of the business, with a focused approach on the development of the workforce in terms of capability, values, attitude and behavior. Your Company aims to promote and recruit the best qualified people, recognizing and encouraging the value of diversity in the workplace. The Company strives to optimize manpower strength by leveraging its access to rich talent pool across various projects through effective cross-utlisation of the workforce. Moving forward, your Company is committed to nurture the existing talent through Training and Development and implementation of the best Talent Management Practices like Succession Planning which aims to identifying organization preparedness for the critical roles of the organization. This adds value by enabling the organization to execute its strategy in an efficient and effective manner.

Your Company maintains and diligently adheres to the policies, rules and practices that treat employees with dignity and equality while maintaining company compliance with employment and labour laws, corporate directives and labour agreements. There has also been adequate focus on employee engagement activities and employee welfare programs to promote a healthy work environment and boost productivity. Your Company is also committed towards giving back to the society by working towards the welfare of the community by various CSR activities. The overall aim is to provide a work atmosphere that is safe, healthy, secure and conscious of long-term family and community goals. The constant endeavor of your Company towards promoting employee welfare and Human Capital augmentation has resulted in your Company being rewarded as "Best Employer Brand Awards 2018-19” by the Employer Branding Institute.

IX. INTERNAL CONTROL AND AUDIT

Your Board places utmost importance in setting up and regularly enhancing Internal Control Framework in view of complex business environment and increasing regulatory oversight for sustainable growth. Your Company adopts a calibrated and smart framework spanning on pillars of administrative and financial controls. On the administrative control side, your Company has a proper reporting structure, several oversight committees, defined roles and responsibilities at all levels to ensure appropriate checks and balances. On the financial controls side, management with the knowledge and understanding of the business, its organization, operations, and processes has put in place appropriate controls including segregation of duties and reporting mechanism to deter and detect misstatements in financial reporting.

Your Company has an Internal Financial Control (IFC) System, commensurate with the nature of its business and the size and complexity of its operations. The Companys system of internal control has been designed to provide a reasonable assurance with regard to controls over critical business activities and operations, policies and procedures for ensuring the orderly and efficient conduct ofbusiness, critical procurements, prevention and detection of frauds and errors, compliance with regulations and for ensuring timeliness and reliability of financial reporting. Your Companys IFC have been reviewed and actions have been taken wherever needed, to strengthen control and overall risk management procedure.

The Audit Committee of the Board evaluates and reviews the adequacy and effectiveness of the Internal Control Systems and suggests improvements to strengthen them. Based on the report of Internal Auditor and the response thereto, necessary corrective actions are undertaken to strengthen the controls. Overall, the Board and the Audit Committee maintains a proactive approach in ensuring that the control and governance framework is regularly reviewed and timely corrective actions are taken to minimize risk of disruption.

At the Meeting of the Board of Directors held on 29th May, 2018, Mr. Roshan Jaiswal, a Chartered Accountant was appointed as the Internal Auditor of the Company pursuant to section 138 of the Companies Act, 2013. Mr. Jaiswal ceased to remain the Internal Auditor of the Company w.e.f 10th December, 2018 upon his resignation. Consequently, your Company appointed M/s. G. P Agrawal & Co, a Chartered Accountant firm (Firm Registration No. 302082E), having requisite academic and professional qualifications, work experience, skill and other suitable capabilities, as the Internal Auditor of the Company at the Board Meeting held on 12th February, 2019, for completing the Internal Audit work for the Year under review.

SUBSIDIARY & ASSOCIATE COMPANIES

As on the date of this Report, your Company has 3 (three) Subsidiaries and 4 (four) Associate Companies.

Further, your Company has entered into a Share Purchase Agreement dated 4th May, 2019 inter alia, with Cube Highways and Infrastructure Pte Ltd for sale of its entire shareholding in Ghaziabad Aligarh Expressway Private Limited (GAEPL), an Associate of the Company. The proposed transaction is subject to applicable regulatory and other approvals and certain conditions, more specifically laid down in the Share Purchase Agreement.

Upon completion of the said transaction, Ghaziabad Aligarh Expressway Private Limited (GAEPL) in which your company holds 39% stake, shall cease to remain an "Associate” of your Company.

There has been no change in the Subsidiaries and Associate Companies during the year under review.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES & ASSOCIATE COMPANIES

The Statement in Form AOC-1 containing the salient features of the Financial Statements of your Companys Subsidiaries and Associate Companies, pursuant to first proviso to Section 129(3) of the Companies Act, 2013 (Act), read with Rule 5 of the Companies (Accounts) Rules, 2014, forms part of this Annual Report. Further, in line with Section 129(3) of the Act read with the aforesaid Rules, the SEBI Listing Regulations, 2015 and in accordance with the Indian Accounting Standards specified under section 133 of the Act, Consolidated Financial Statements prepared by your Company includes financial information of its Subsidiary and Associate Companies.

Further, in accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements of each of the Subsidiary, included in the Consolidated Financial Statements prepared by your Company as per Rule 8(1) of the Companies (Accounts) Rules, 2014, is available on the website of your Company, www.brnl.in.

Members interested in obtaining a copy of the Annual Accounts of the Subsidiaries may write to the Company Secretary at your Companys Registered Office. The said Report is not reproduced here for the sake of brevity.

APPLICABILITY OF RBI GUIDELINES FOR REGISTRATION AS NON BANKING FINANCIAL COMPANY (NBFC)

Since your Company has fulfilled the criteria prescribed for NonBanking Financial Company (NBFC) Core Investment Company (CIC) in terms of Paragraph 2(1) of the Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016, i.e. your Companys financial income comprised more than 50% of its total income, its financial assets in the form of investments in equity shares, debt and loans to group companies exceeded 90% of its Net Assets and investments in equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies exceeded 60% of its Net Assets, your Company has made an application to the Reserve Bank of India (RBI) on March 28, 2019, to grant Certificate of Registration to commence the business of a Non-Deposit taking Systematically Important Core Investment Company (NDSI - CIC), along with the audited Financial Statements for the period ended December 31,2018.

The Reserve Bank of India, vide its letter dated April 12, 2019 has asked to apply afresh on the basis of the audited Financial Statement of the company and all its group companies as on March 31,2019.

The Company has made the required application.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT

There is no such material change and commitment affecting the financial position of your Company, which have occurred from the end of the Financial Year ended on March 31,2019 and the date of this Report.

CAPITAL STRUCTURE

At present, the Authorized Capital of the Company is Rs. 100 Crore (Rupees One Hundred Crore) divided into 10,00,00,000 (Ten Crore) Equity Shares of Rs. 10 each.

The Paid-up Share Capital of your Company is Rs. 83.95 Crore, divided into 8,39,50,000 (Eight Crore, Thirty-Nine Lakhs, Fifty Thousand) Equity Shares of Rs. 10/- each.

There has been no change in the capital structure of your Company during the year under review.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Directors

During the year under review, Mr. Brahm Dutt, Chairman of the Board and Independent Director, tendered his resignation w.e.f. 4th January, 2019 purely due to personal reasons. However, considering his vast experience, technical expertise and long fruitful association with the Company, Mr. Dutt has been appointed as the Advisor to the Board of Directors w.e.f. 12th February, 2019.

The Board of Directors of your Company re-appointed Mr. Bajrang Kumar Choudhary (DIN 00441872) as the Managing Director (MD) of your Company for a further period of 3 (three) years w.e.f. November 01, 2019, based on the recommendation of the Nomination and Remuneration Committee, subject to approval of Members at the ensuing Annual General Meeting (AGM) of your Company.

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013 and Rules made thereunder, Mr. Bajrang Kumar Choudhary (DIN: 00441872), Managing Director of your Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. His brief resume/details have been furnished in the Notice of the ensuing AGM. The Board, therefore, recommends the said re-appointment of Mr. Bajrang Kumar Choudhary.

Based on the recommendation of Nomination and Remuneration Committee, Prof. Santanu Ray (DIN: 00642736) was appointed by the Board of Directors as an Additional Director (Category - Non Executive and Independent Director) of the Company w.e.f. 30th July, 2019 to hold office upto the date of 12th (Twelfth) Annual General Meeting (AGM) of your Company. The Board recommends appointment of Prof. Santanu Ray as Non-Executive and Independent Director of your Company for a period of 5 (five) consecutive years by the members at the ensuing Annual General Meeting of the Company.

Based on the recommendation of Nomination and Remuneration Committee, Mr. Ashok Kumar Mangotra (DIN: 02228858) was appointed by the Board of Directors as an Additional Director (Category - Non Executive and Independent Director) of the Company w.e.f. 30th September, 2019 to hold office upto the date of 12th (Twelfth) Annual General Meeting (AGM) of your Company. The Board recommends appointment of Mr. Ashok Kumar Mangotra as Non-Executive and Independent Director of your Company for a period of 5 (five) consecutive years by the members at the ensuing Annual General Meeting of the Company.

The brief resume / details relating to Directors who are proposed to be appointed / re-appointed are furnished in the Notice of the ensuing AGM. The Board of Directors ofyour Company recommends the appointment / reappointment of the above Directors.

Your Company has received declaration from each of the Independent Directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1) (b) of SEBI Listing Regulations, 2015 and that he/she is not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his/her ability to discharge his/her duties with an objective independent judgment and without any external influence. All requisite declarations have been duly placed before the Board.

In the opinion of the Board, the Independent Directors fulfill the conditions as specified under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management.

In terms of SEBI Listing Regulations, 2015, your Company has identified core skills/expertise/competencies as is required in the context of the Companys business(es) and sector(s) for it to function effectively. Details of such skills/expertise/competencies identified are furnished in the Corporate Governance Report and forms part of this Annual Report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with your Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Key Managerial Personnel

During the year under review, Mr. Sanjay Banka (FCA: 056399), Chief Financial Officer of the Company resigned w.e.f. close of Business hours of August 14, 2018. Consequently, the Board of Directors appointed Mr. Amogh Harihar Gore (FCA: 107673), as the Chief Financial Officer of the Company, w.e.f. August 15, 2018 who resigned w.e.f close of Business hours of November, 14, 2018.

Consequently, Mr. Jai Prakash Shaw (ACA: 054887), was appointed as the Chief Financial Officer of the Company, w.e.f. April 20, 2019.

As per the provisions of Section 203 of the Companies Act, 2013, read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following Director / Executives of your Company are the Key Managerial Personnel as on the date of this report -

Name Designation
Mr. Bajrang Kumar Choudhary Managing Director
Mr. Naresh Mathur Company Secretary
Mr. Jai Prakash Shaw Chief Financial Officer

MEETINGS OF BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on policy and strategy apart from other Business. However, in case of a special and urgent business need, the Boards approval is taken by passing resolutions through circulation, as permitted by law, which are noted at the subsequent Board Meeting.

7 (Seven) Meetings of the Board of Directors of the Company were held during the Financial Year 2018-19 respectively on 29th May, 2018, 14th August, 2018, 14th November, 2018, 28th November 2018, 4th January, 2019, 12th February, 2019 and 27th February, 2019.

The maximum time gap between any two consecutive meetings did not exceed 120 (One Hundred Twenty) days.

AUDIT COMMITTEE

The Audit Committee of your Company has been constituted in line with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations, 2015.

Consequent to the resignation of Mr. Brahm Dutt as Chairman of the Board and Independent Director, the Board of Directors of your Company at its Meeting held on 12th February, 2019, has reconstituted the Audit Committee. Further, the Board of Directors at its Meeting held on 10th November, 2019 has again re-constituted the Audit Committee upon induction of new Directors on your Board.

The Audit Committee presently comprises of Prof. Santanu Ray (Independent Director) acting as the Chairman of the Committee, Mr. Pradeep Singh (Independent Director), Mr. Atanu Sen (Independent Director) and Dr. (Ms.) Tuk Tuk Ghosh Kumar (Independent Director) acting as the Members of the Committee.

Mr. Naresh Mathur, Company Secretary, acts as the Secretary to the Committee.

The scope and functions of the Audit Committee is in accordance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, 2015. The brief Terms of Reference of the Audit Committee has been provided in the Corporate Governance Report, forming part of this Annual Report.

5 (five) Meetings of the Audit Committee were held during the Financial Year 2018-19 respectively on 29th May, 2018, 14th August, 2018, 14th November, 2018, 12th February, 2019 and 27th February, 2019.

During the year under review, there were no instances wherein the Board had not accepted any recommendation of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors of the Company has constituted a Nomination and Remuneration Committee in accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI Listing Regulations, 2015.

Consequent to the resignation of Mr. Brahm Dutt as Chairman of the Board and Independent Director, the Board of Directors of your Company at its Meeting held on 12th February, 2019, has reconstituted the Nomination and Remuneration Committee. Further, the Board of Directors at its Meeting held on 10th November, 2019 has again re-constituted the Nomination and Remuneration Committee upon induction of new Directors on your Board.

The Committee presently comprises of Mr. Ashok Kumar Mangotra (Independent Director), acting as the Chairman of the Committee, Mr. Pradeep Singh (Independent Director) and Dr. (Ms.) Tuk Tuk Ghosh Kumar (Independent Director) as Members of the Committee.

Mr. Naresh Mathur, Company Secretary, acts as the Secretary to the Committee.

The scope and function of Nomination and Remuneration Committee is in accordance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, 2015. The brief Terms of Reference of the Committee has been provided in the Corporate Governance Report, forming part of this Annual Report.

2 (two) meetings of the Nomination and Remuneration Committee were held during the Financial Year 2018-19 on 29th May, 2018 and 14th August, 2018.

The Committee has formulated the Nomination and Remuneration Policy (BRNL Nomination and Remuneration Policy)) which broadly lays down the various principles of remuneration viz support for strategic objectives, transparency, internal & external equity, flexibility, performance-driven remuneration, affordability and sustainability and covers the procedure for selection, appointment and compensation structure of Board Members, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) of your Company.

The BRNL Nomination and Remuneration Policy has been hosted on the website of the Company, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has constituted a CSR Committee, as required in terms of Section 135 of the Companies Act, 2013 and the Rules made thereunder.

The Board of Directors at its Meeting held on 10th November, 2019 has re-constituted the Corporate Social Responsibility Committee upon induction of new Directors on your Board.

The Committee presently comprises of Dr. (Ms.) Tuk Tuk Ghosh Kumar (Independent Director), acting as the Chairperson of the Committee, Mr. Atanu Sen (Independent Director), Prof. Santanu Ray (Independent Director) and Mr. Bajrang Kumar Choudhary (Managing Director) acting as Members of the Committee.

Mr. Naresh Mathur, Company Secretary, acts as the Secretary to the Committee.

The brief Terms of Reference of the Committee has been provided in the Corporate Governance Report forming part of this Annual Report.

The Company has also framed a CSR Policy, in line with the provisions of Section 135 of the Companies Act, 2013, and the same has been hosted on the website of the Company, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report. Your Company strives to contribute towards CSR as per the line items included in Schedule VII to the Companies Act, 2013.

The total amount available for CSR spending, being 2 (two) per cent of the average net profits of your Company made during the 3 (three) immediately preceding financial years, during the financial year 2018-19 aggregated to approximately Rs. 22.43 Lakhs.

Your Company is fully aware of the fact that as a corporate citizen, it is also entrusted with the responsibility to contribute for the betterment of the society at large. For this purpose, even though the amount to be spent on CSR was Rs. 22.43 lacs, your Company voluntarily contributed a sum of Rs. 25 lacs on CSR.

During the year under review, 2 (two) CSR Committee Meeting were held on 29th May, 2018 and 14th November 2018.

Your Company made its CSR contribution to Suryodaya Schools, a division of IISD Edu World, and formed with the object of imparting, promoting and spreading education for under privileged children and weaker section of the society. IISD Edu World is a Company registered under Section 25 of the Companies Act, 1956 (now, Section 8 of the Companies Act, 2013).

Presently, Suryodaya Schools are running two (2) schools which impart quality English medium education to under privileged children upto Class X under West Bengal Board of Secondary Education along with facilities, like free mid-day meals, text books, note books and school uniforms at subsidised rates. The donations received by the entity helps to sustain the financial and educational activities undertaken by the two schools. Also, Donations to IISD Edu World qualify for deduction under Section 80G of the Income Tax Act, 1961.

As prescribed under Section 135 of the Companies Act, 2013, read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, an Annual Report on CSR Activities has been set out as an Annexure to this Directors Report.

PERFORMANCE EVALUATION

The Nomination and Remuneration Committee (NRC) of your Company has formulated and laid down criteria for Performance Evaluation of the Board (including Committees) and Individual Directors (including Independent Directors) pursuant to provisions of Section 134, Section 149 read with the Code for Independent Directors (Schedule IV), and Section 178 of the Companies Act, 2013, covering, inter alia, the following parameters:

(i) Board Evaluation - degree of fulfilment of key responsibilities; Board culture and dynamics, amongst others;

(ii) Board Committee Evaluation - effectiveness of meetings; Committee dynamics, amongst others;

(iii) Individual Director Evaluation (including Chairman and Independent Directors) - Attendance, Contribution at Board Meetings, Guidance/support to management outside Board/ Committee meetings, etc., amongst others;

During the year under review, Annual Performance Evaluation was carried out by the Board of its own performance as well as evaluation of the working of various Board Committees, viz., Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee. This evaluation was led by the Chairman of the Board with specific focus on performance and effective functioning of the Board, its Committees and individual Directors.

The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013, SEBI Listing Regulations, 2015 and in accordance with the Guidance Note on Board Evaluation issued by SEBI in January, 2017. The Board evaluation was conducted through structured questionnaire designed with qualitative parameters and feedback based on ratings.

Based on the above parameters, the performance of the Board, its Committees and of the Individual Directors (including Independent Directors) was evaluated and found to be effective.

It was evaluated and found that Board Committees are adequately composed (in terms of size, skill, expertise, experience, etc.) to carry out the responsibilities and addressing the objectives for which it has been set up by the Board. Also, there is clarity between the Board, Management and Committee w.r.t. the role played by the committee.

During the year under review, in a separate meeting of Independent Directors, performance of non-independent directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and Non-Executive directors. It was held unanimously that the Non-Independent Director, viz Managing Director brings to the Board, abundant knowledge in his field and is an expert in his area. Besides, he is insightful, convincing, astute, with a keen sense of observation, mature and has a deep knowledge of your Company.

The Board, as a whole, is an integrated, balanced and cohesive unit, where diverse views are expressed and discussed when required, with each Director bringing professional domain knowledge to the table. All Directors are participative, interactive and communicative.

The Chairman has abundant knowledge, experience, skills and understanding of the Boards functioning, possesses a mind for detail, is meticulous to the core and conducts the Meetings with poise and maturity (Mr. Brahm Dutt, Chairman of the Board resigned w.e.f 4th January, 2019. The Company appoints Chairman from the independent Directors present at the Meeting at every Board Meeting to conduct the proceedings of the Meeting.).

The information flow between your Companys Management and the Board is complete, timely with good quality and sufficient quantity.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company is engaged in Infrastructure Sector, as stated in the Schedule VI to the Companies Act, 2013. By virtue of the provisions of Section 186(11), the provisions of Section 186, read with the Companies (Meeting of the Board and its Powers) Rules, 2014, as amended from time to time, relating to loan made, guarantee given or security provided, do not apply to your Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

A Related Party Transactions Policy has been devised by your Company for inter alia, determining the materiality of transactions with related parties and dealings with them. The said Policy is available on your Companys website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

Related Party Transactions entered into during the Financial Year ended 31st March, 2019, were on an arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015. All Related Party Transactions are placed on a quarterly basis before the Audit Committee for its review and approval. Material Related Party Transactions as per SEBI Listing Regulations, 2015 are placed before the Members for their approval.

Further, there are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other Designated Persons, during the year under review, which may have a potential conflict with the interest of the Company at large. Members may refer to the Notes to the Financial Statements for details of Related Party Transactions.

In terms of Regulation 23 of the SEBI (LODR) Regulations, 2015, the Board of Directors recommend to the Shareholders of your Company to confirm and approve Related Party Transactions, being material in terms of the said Regulations, at the ensuing Annual General Meeting of the Company.

POLICY FOR DETERMINING MATERIAL SUBSIDIARIES

Your Company has formulated a Policy for determining Material Subsidiaries in accordance with the applicable laws. The said Policy is available on your Companys website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

As on March 31, 2019, all the three subsidiaries of your Company, Solapur Tollways Private Limited (STPL), Orissa Steel Expressway Private Limited (OSEPL) and Guruvayoor Infrastructure Private Limited (GIPL) are the Material Unlisted Subsidiaries of your Company, as per Regulation 16(1)(c) of the SEBI Listing Regulations, 2015.

POLICY AGAINST SEXUAL HARASSMENT AT WORKPLACE

Your Company is committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. Your Company in its endeavour to provide a safe and healthy work environment for all its employees has developed a policy to ensure zero tolerance towards verbal, physical, psychological conduct of a sexual nature by any employee or stakeholder that directly or indirectly harasses, disrupts or interferes with anothers work performance or creates an intimidating, offensive or hostile environment such that each employee can realize his/her maximum potential.

Your Company has put in place a Policy on Prevention of Sexual Harassment as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. The Policy is meant to sensitize the employees about their fundamental right to have a safe and healthy environment at workplace. As per the Policy, any employee may report his/ her complaint to the Internal Complaint Committee constituted for this purpose. The said Policy is available on your Companys website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

During the year under review, no cases of Sexual Harassment of Women were reported.

WHISTLE BLOWER POLICY (VIGIL MECHANISM)

Your Company has formulated a Whistle Blower Policy incorporating the provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013, and Regulation 22 of SEBI (LODR) Regulations, 2015 in order to encourage Directors and employees of your Company to escalate to the level of the Audit Committee, any issue of concerns impacting and compromising with the interest of your Company and its stakeholders in any way. Your Company is committed to adhere to highest standards of ethical, moral and legal business conduct and to open communication, and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle blowing in good faith.

The Company has also designated whistleblower@brnl.in, an e-mail ID for providing access to the employees of the Company to disclose any unethical and improper practice taking place in the Company for appropriate action and reporting. The said Policy is available on your Companys website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

Further, no complaints were reported under the Whistle blower Policy during the year under review.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

During the Financial Year 2018-19, no significant and material orders have been passed by regulators or courts or tribunals, impacting the going concern status and your Companys operations in future.

AUDITORS

At the Tenth Annual General Meeting (AGM) of your Company held on December 16, 2017, Messrs S.S. Kothari Mehta & Co., Chartered Accountants, having Registration No. 000756N, allotted by the Institute of Chartered Accountants of India (ICAI), were appointed as Statutory Auditors of the Company, to hold office for a term of 5 (five) years, from the conclusion of the 10th AGM till the conclusion of the 15th AGM of your Company, in accordance with Section 139 and other applicable provisions of the Companies Act, 2013, read with the Rules framed thereunder.

Further, vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in notice of the 12th AGM.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud, during the year under review, to the Audit Committee of your Company.

AUDIT QUALIFICATIONS

M/s. S.S. Kothari Mehta & Co., Chartered Accountants and the Statutory Auditors of the Company have given a modified opinion on the Standalone and Consolidated Financial Statements of the Company for the Financial Year ended on 31st March, 2019 w.r.t. non-recognizing interest on Rs. 5,000 Lakhs for the quarter and year ended 31st March, 2019 which, as per them, is not in compliance with IND AS-1, "Presentation of Financial statements” read with IND AS 109 "Financial Instruments”. Due to this, profit before tax of the Company the Year ended 31st March, 2019 has been reported to be overstated by Rs. 311.64 Lakhs and the current liabilities have been understated by the same amount.

The Boards Comment on the modified opinion given by the Statutory Auditors of the Company on the Standalone and Consolidated Financial Statements of the Company for the Financial Year ended on 31st March, 2019 has been suitably covered under notes to Accounts forming part of the Annual Report.

Further, the Auditors have also provided for "Key Audit Matters” (KAM) and "Emphasis of Matter” in the Auditors Report, which are self- explanatory.

"Emphasis of Matter” is detailed under Note No. 27.4 to the Standalone Financial Statements.

SECRETARIAL AUDIT

Your Company has appointed Ms. Jayshri Tulsyan, Practicing Company Secretary and Partner - M/s. Jayshri Tulsyan & Associates, Kolkata, as the Secretarial Auditor of the Company, for the Financial Year 2018-19, to conduct the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report for the Financial Year ended March 31, 2019 does not contain any qualification, reservation or adverse remark or disclaimer and has been set out as an Annexure to this Directors Report.

COST RECORDS AND AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

EXTRACT OF THE ANNUAL RETURN

An extract of the Annual Return, as on the Financial Year ended March 31, 2019, in Form MGT-9, as required under Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, has been set out as an Annexure to this Directors Report. Further the Annual Return of the company can be accessed at- http://brnl.in/sites/default/files/ report/Annual%20Return%20for%20the%20FY%202017-18.pdf

BRNL WEBSITE

The website of your Company, www.brnl.in has been running on the responsive technology based platform, known as Drupal, ensuring uniform display across all devices, like, mobile, tab, desktop, etc., and all the operating systems. The website has an inbuilt sophisticated and customized content management system for necessary change in content. A simple, improved navigation system enables the users to access the requisite information from different sections of the website with lesser number of clicks. The contemporary and smart look of the new website conforms to your companys brand guideline, while taking a customer and investor centric approach catering to the requirements of prospective customers, investors, employees and other stakeholders.

The site carries a comprehensive database of information of interest to the investors, including the Financial Results of your Company, dividend declared, Shareholding Pattern, any price sensitive information disclosed to the Regulatory Authorities from time to time, investor presentations, corporate profile and business activities, including project details of your Company and the services rendered by your Company.

PARTICULARS OF EMPLOYEES

The prescribed particulars of remuneration of employees pursuant to the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been set out as an Annexure to this Directors Report.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has no specific activity relating to Conservation of Energy and Technology Absorption, as stipulated in Rule 8(3) of the Companies (Accounts) Rules, 2014. However, your Company uses information technology extensively in its operations and also continues its endeavour to improve energy conservation and utilization, safety and environment in operation of its Subsidiary and Associate Companies.

Your Companys operations are local and it has not earned and spent any foreign exchange during the year under review (Previous Year - Nil).

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(3) and 134(5) of the Companies Act, 2013 (Act), read with relevant Rules made thereunder, the Directors hereby confirm that:

(i) in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors 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 your Company at the end of the Financial Year and of the profit of your Company for that period;

(iii) the Directors have 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 your Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the Annual Accounts for the

Financial Year ended 31st March, 2019 on a going concern basis;

(v) the Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and

(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Further, your Directors confirm that your Company has adequate internal systems and controls in place to ensure compliance of laws applicable to your Company.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on the Board/ Committee Meetings and General Meetings.

INSIDER TRADING CODE

On December 31, 2018, Securities and Exchange Board of India amended the Prohibition of Insider Trading Regulations, 2015, prescribing various new requirements with effect from April 1, 2019. In line with the amendments, your Company has adopted an amended Code of Conduct to regulate, monitor and report trading by Designated Persons and their Immediate Relatives under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The Code is applicable to all Directors, Designated Employees and Insiders, who are expected to have access to Unpublished Prices Sensitive Information (UPSI). The Company Secretary is the Compliance Officer for monitoring adherence to the applicable Regulations. The Code has been made available on the Companys website at www.brnl.in.

FAIR DISCLOSURE CODE

Pursuant to Regulation 8 read with Schedule A of the SEBI (Prohibition on Insider Trading) Regulations, 2015, the Board of Directors of your Company have adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) which lays down the principles and practices to be followed by the Company pertaining to universal disclosure of UPSI. The Chief Financial Officer of the Company, also designated as Chief Investor Relations Officer, is authorised to deal with dissemination of information and disclosure of UPSI in a fair and unbiased manner. The Code has been made available on the Companys website www.brnl.in.

CORPORATE GOVERNANCE

Your Company strives to achieve highest standards of Corporate Governance and to take necessary steps at appropriate times for enhancing and meeting stakeholdersexpectations while complying with the mandatory provisions of Corporate Governance.

As required under Regulation 34(3) of the SEBI Listing Regulations, 2015, read with Schedule V thereto, a separate section on Corporate Governance and a Certificate from Ms. Jayshri Tulsyan, Practicing Company Secretary and Partner - M/s. Jayshri Tulsyan & Associates, Kolkata, confirming compliance with the requirements of Corporate Governance, forms part of this Annual Report.

GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions w.r.t these items during the year under review:

• Issue of eguity shares with differential rights as to dividend, voting or otherwise;

• Issueofsweateguityshares;

• Your 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;

• There was no revision in the Financial Statements; and

• There was no change in the nature ofbusiness.

AWARDS AND RECOGNITION

Your Company has been honoured with several awards and accolades which are mentioned below.

• "Kolkata Best Employer Brand Awards 2018"in October 2018 by the Employer Branding Institute.

• "Best Infrastructure Project Manager India 2019" by Capital Finance International, an internationally acclaimed print journal and online resource reporting on business, economics and finance.

• "Indias Top Challengers 2018-19" in Construction and Contracting during CONSTRUCTION WORLD Global Awards 2019 organized by Construction World, Indias premier and largest circulated construction business magazine.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the excellent support and co-operation received from Financial Institutions, Bankers, National Highway Authority of India (NHAI), Ministry of Corporate Affairs, Registrar of Companies, EPC Partners and SPV Partners and other stakeholders during the year under review. Your Directors also place on record their deep appreciation for the valuable contribution made by the Companys employees and look forward to their continued cooperation in realization of motto of the Company, "Behtar Raste, Badhta Bharat” in the years to come, as a Key partner of "MAKE IN INDIA” plans.

On behalf of the Board of Directors
For Bharat Road Network Limited
Bajrang Kumar Choudhary Atanu Sen
Managing Director Director
DIN: 00441872 DIN:05339535
Place: Kolkata
Date: 10.11.2019