Brahmaputra Infraproject Ltd Merged Directors Report

BRAHMAPUTRA INFRAPROJECT LIMITED ANNUAL REPORT 2011-2012 DIRECTORS REPORT Dear Members, Your Directors have the pleasure in presenting the 20th Annual Report together with the Audited Accounts of the Company for the financial year ended on 31st March, 2012. Financial Results (Rs. in Lacs) Particulars Year ended Year ended 31.03.2012 31.03.2011 Income from Operation 8044.57 15,188.68 Other Income 76.54 168.64 Profit before Tax 625.34 1,168.09 Less: Provision for Taxation & Deferred Tax 204.12 388.48 Profit after Tax 421.22 779.61 Add: Balance from previous year 800.79 789.18 Profit available for Appropriation 1222.01 1,591.66 Less: Proposed Dividend - 35.05 Less: Tax on Proposed Dividend - 5.82 Less: Transferred to General Reserve 250.00 750.00 Profit carried to Balance Sheet 972.01 800.79 Performance: During the year under review, the total income of the Company amounted to Rs.8044.57 Lacs as against Rs.15,188.68 Lacs during the previous year. Further, the Company has earned Profit of Rs.625.34 Lacs before tax during the year as against Rs.1,168.09 Lacs during the previous year. Dividend: The Board of Directors do not recommend dividend during the financial year ended 31st March, 2012. Management Discussion and Analysis Report: Operational performance of each business segment has been comprehensively covered in the Management Discussion and Analysis Report given in Annexure- A which forms part of this Report. Corporate Governance: As per the requirement of Clause 49 of the Listing Agreement a separate Report on Corporate Governance along with the Auditors Certificate regarding compliance of conditions of Corporate Governance is given in Annexure-B which forms part of this Report. Directors: During the period under report, Mr. Suresh Kumar Prithani, Non Executive Chairman and Mr. Gopal Bachani, Whole Time Director of the Company resigned from the directorship of the Company with effect from 13.06.2011 & 18.11.2011 respectively. The Board appreciates the contribution made by both of them during their tenure with the Company. Also, Mr. Rajesh Sharma and Mr. Om Kumar, Directors of the Company retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer themselves for reappointment. Mr. Suneet Kumar Todi was appointed as Whole-time Director of the Company for a period of five years with effect from 16.01.2012 to 15.01.2017 by the Board of Directors through a resolution passed in the Board Meeting held on 16.01.2012, subject to the approval of shareholders. The resolution for his appointment forms part of the notice for convening the Annual General Meeting. Directors Responsibility Statement: Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that: i) The preparation of annual accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed; 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 the Company at the end of financial year ended 31st March, 2012 and of the Profit & Loss account of the Company for that period; iii) The proper care has been taken for the maintenance of adequate records for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and iv) The Accounts for the year ended 31st March, 2012 have been prepared on a going concern basis. Public Deposits: Your Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956 and the rule made there under, during the year. Auditors: M/s A.B. Bansal & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from the Auditors to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re- appointment within the meaning of Section 226 of the Act. Board recommends for their re-appointment. The Auditors report and notes to the financial statements are self explanatory and do not call for any further Comments. Amalgamation of Company with Brahmaputra Infrastructure Limited: In Aug 2012, your Company has filed a Scheme of Amalgamation with the Honble High Court of Delhi for amalgamation of the Company with Brahmaputra Infrastructure Limited (BIL), a group company. The Scheme shall be beneficial to the interests of the stakeholders of both the companies as well as public at large, as the amalgamation would create overall synergies and would result in better administration and optimal utilization of resources of both the companies. Bombay Stock Exchange and Delhi Stock Exchange, where securities of the company are listed, have already accorded their in-principle approval to the said Scheme. Personnel & Human Resources: Employee relations continued to be cordial throughout the year. The company did not have any employee during the year under review whose remuneration is required to be disclosed in terms of the provisions of the section 217(2A) of Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: The Companys operations are not power intensive. Nevertheless your Company has introduced various measures to conserve and minimize the use of energy. No technology has been imported during the previous year. Indigenous technology available is continuously been upgraded to improve overall performances. Foreign Exchange Earning : Nil Foreign Exchange Outgo : 3.07 Lacs Acknowledgement: We thank Central Government, State Governments, our clients, vendors, sub contractors and Bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Last but not the least, we would also like to thank valuable shareholders and othe stake holders for their support and contribution. We look forward for your continued support in the future. By order of the Board of Directors Brahmaputra Infraproject Limited Place: New Delhi Sanjeev Kumar Prithani Date : 03.09.2012 Chairman Annexure-A MANAGEMENT DISCUSSION AND ANALYSIS The objective of this report is to share and keep you abreast with the happenings and transformations occurring within the Company, that in the industry and economy, its technology and its overall business strategies. Among other things, the MD &A provides an overview of the previous year of operations and how the company fared in that time. It also provides the report on the upcoming year, outlining future goals and approaches to new Project. We begin with a general review of the industry, macro economy followed by the operational and financial details of the company including details of its human resources. Cautionary statement: Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimate expectations may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in Government regulations, tax laws and other factors such as litigation and industrial relations. Economic Outlook: The Indian economy went through a tough phase in the year 2011-12. After reporting around 8.5% growth rate in the preceding two years, Indias growth rate recorded a moderate 6.9% in year 2011-12. Indias growth was impacted by both deteriorating global economy as well by domestic issues like high interest rates, inflation, infrastructure constraints, rupee depreciation and liquidity crunch among others. Indian Government has announced measures to augment the supply side response of the economy to maintain price stability and growth. Steps taken by RBI regarding monetary policies have though started showing results with marginal fall in inflation rates. However, risks related with the crude prices still remain the biggest challenge. Industry Structure: The construction industry is an integral part of the Indian economy. It is the second largest industry of the country after agriculture and it has to play a vital role in the nations progress towards achieving the status of developed nation from developing nation. The rise in investment proposals in the infrastructure sector is the silver lining in the cloud. More than half of the construction activity is generated from infrastructure sector, followed by industrial, commercial and residential sectors. Hig hways/Expressways: For a country of Indias size, an efficient road network is necessary both for national integration as well as for socio - economic development. Road connectivity forms the backbone for economic and social development of any country through connectivity and opening up the backward regions to trade and investment. Our national highways constitute only 2% of the total road network but they carry nearly 40% of the total traffic. The Indian Government has set ambitious plans for upgrading of the National Highways in years to come. Further, to encourage participation of private sector, the Department of Road Transport and Highways has laid down comprehensive policy guidelines for private sector participation in the highway sector. With an aim to increase the capacity in the various transport sectors, the 12th Five Year plan necessitates the involvement of private sector more aggressively. Your company has successfully implemented the project of construction of major interchanges, Minor Bridges, Vehicular Underpasses and Car Track under passes on Yamuna Expressway connecting Greater Noida to Agra, Uttar Pradesh. Whereas, project of construction of 6 Laning of Pune-Satara Road (NH-4), Pune, Maharashtra, is under execution. Further. We have also started bidding and securing projects from the Govt./PSU/Semi-Govt. Sector and recently bagged a project from IRCON for a Road Over Bridge in the State of Rajasthan. Building Construction: In Building Construction segment, the company has one project of construction of structural civil works Buildings of Indiabulls Centrum Park-Gurgaon, Haryana, which is under execution. Opportunities and strengths: 12th Five Year Plan aims to put the economy back on high growth trajectory of 9 percent. Preliminary assessment suggests that investment in infrastructure during the Twelth Plan (2012-17) would be about Rs.4.10 Million Crores to achieve a share of 9.95 percent as a proportion of GDP. The government of India has already initiated number of policies to attract private investments in the Road Sector such as capital grants, tax exemption, longer concession period, collection of toll and retaining the same in BOT projects, duty free import of specified modern high capacity equipment for highway construction. Your Company, since its inception, has executed prestigious projects and in this short period of time has built up commendable credentials. Based on these credentials, we have taken a conscious decision to target such projects like Bridges, ROBs etc where the existing depreciated resources of the Company such as Shuttering Material, Plants and Equipment etc can be utilized to increase the profit margins and to have an edge over the competitors. Threats, Risks and concerns: The Construction industry is marked with low entry barriers, with domination of large number of small players. Key risks synonymous to the construction industry include the global recessionary trend, economic slowdown, increasing interest rates, non-availability (or undue increase in cost) of raw materials, such as cement, steel and labour, coupled with market fluctuations. Brahmaputra Infraproject Limited is adequately equipped to face and mitigate any such adverse situation. The Company does not apprehend any inherent risk in the construction industry in the long run. Beyond standard business risks, the Company faces competition from both its old competitions as well as new entrants in the sector. This contingency, however, is more than offset by the Companys robust strengths, pioneering experience, in handling projects and themes of all kinds and dimensions, a cutting-edge management approach and its accent on continued innovation. Brahmaputra follows a process of risk management that comprises risk identification, risk analysis and measurement followed by the design of suitable risk mitigation or management framework covering control activities/procedures. The key risks identified by the business and accompanied mitigation plans include periodical review of the operating effectiveness of the internal controls. Corrective actions, wherever necessary, are taken to further strengthen the internal control mechanism. Internal Control Systems and their Adequacy: The Company has a proper and adequate system of internal controls to ensure that all its assets are safeguarded and protected against loss from un- authorized use or disposition and to ensure that all transactions are duly authorized, recorded and reported correctly and adequately. The Companys internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. The internal control is designed to ensure that financial and other records are reliable for preparing financial information and for maintain accountability of assets. All financial and audit control systems are also reviewed by the Audit Committee of the Board of Directors of the company. Human Resource/Industrial relations: Human capital has continued to be the key engine for our growth and aspirations. The Company has been constantly reviewing its HR policies and practices to keep abreast with the market changes and has embarked upon several initiatives to focus on creating a positive work environment that provides employees with ample growth and development opportunities as well as ensuring high levels of motivation and engagement. Industrial relations have continued to be cordial throughout the year. Measures for safety of employee, scientific training, welfare, performance based appraisal system, compensation, career growth and social security schemes continued to remain key priority of the Company. Financial performance and results: The Financial statements have been prepared in compliance with the requirements of the Companies Act and the Accounting Standards issued by the Institute of Chartered Accountants of India. 1. Turnover: The Company recorded turnover of Rs. 8044.57 Lacs during the year 2011-12 as against 15,188.67 Lacs in previous year. 2. Finance charges: Finance charges for the year amounted to Rs. 450.42 Lacs as against the previous year of Rs.339.48 Lacs. This is due to increased working capital limit and short/long term loans. 3. Depreciation: The current year depreciation amounted to Rs.391.25 Lacs as against Rs.391.55 Lacs of previous year. 4. Profit: a) Profit before Depreciation and Taxation amounted to Rs.1,031.41 Lacs as against the previous year of Rs. 1,564.54 Lacs. b) Provision for taxation & deferred tax for the year amounting to Rs.204.12 Lacs as against the previous year of Rs. 388.48 Lacs. c) Profit after tax for the year amounted to Rs.421.22 Lacs as against the previous year of Rs. 779.61 Lacs. 5. Fixed Assets: During the year the fixed assets of the company increased from Rs. 2,455.76 Lacs to Rs. 2,663.08 Lacs. 6. Inventories: Inventories amounted to Rs. 3,420.32 Lacs as against Rs.1,780.92 Lacs of previous year. 7. Sundry Debtors: Customers receivable amounted to Rs.4081.39 Lacs as against Rs.432.58 Lacs of previous year. 8. Long term Loans and Advances: Long term Loans and advances represent Rs.10.17 Lacs as against Rs.11.84 Lacs in previous year. 9. Current liabilities and Provisions: The amount of Rs.5636.80 Lacs include Short term borrowings, Current maturities of Long term debt, Creditors for suppliers of raw materials, stores and spares, provisions for expenses and taxes, dividend and tax payable thereon, liabilities for gratuity and leave encashment. The Company remained prompt, as usual, in repayment of principal and interest and during the year. By order of the Board of Directors Brahmaputra Infraproject Limited Place: New Delhi Sanjeev Kumar Prithani Date : 03.09.2012 Chairman