MEP Infrastructure Developers Ltd Directors Report.
Your Directors present their Seventeenth Annual Report together with Audited Financial Statements of your Company for the Financial Year ended 31st March, 2019.
|Particulars||Standalone Results||Consolidated Results|
|For the year ended as at||For the year ended as at|
|31st March, 2019||31st March, 2018||31st March, 2019||31st March, 2018|
|Profit/(Loss) Before Tax and Exceptional Item||4,697.23||6,383.60||12,329.16||10,455.92|
|Profit/(Loss) Before Tax||4,697.23||6,383.60||9,236.74||10,455.92|
|Tax Expense (Net)||(1,689.59)||(2,367.31)||(3,902.30)||(3,830.56)|
|Profit/(Loss) After Tax||3,007.64||4,016.29||5,334.44||6,625.36|
|Share of Profit/(Loss) of Associates/Joint Ventures||||||263.09||471.53|
|Net Profit/(Loss) After Tax||3,007.64||4,016.29||5,597.53||7,096.89|
|Earnings Per Share ()||1.64||2.47||3.05||4.37|
* The Board has recommended payment of Dividend of 0.30 per equity share of 10/- each on 18,34,46,051 equity shares.
PERFORMANCE OF THE COMPANY
On standalone basis, revenue from operations and other income for the financial year under review were 1,88,229.67 Lakhs as against 1,49,088.00 Lakhs for the previous financial year registering an increase of 39,141.67 Lakhs mainly due to revenue from Delhi Entry Point project. The profit before tax was 4,697.23 Lakhs and the profit after tax was 3,007.64 Lakhs for the financial year under review as against 6,383.60 Lakhs and 4,016.29 Lakhs respectively, for the previous financial year.
On consolidated basis, revenue from operations and other income for the financial year under review were 2,93,682.42 Lakhs as against 2,44,236.82 Lakhs for the previous financial year registering increase of 49,445.60 Lakhs. The profit before tax was 9,236.74 Lakhs and the profit after tax was 5,334.44 Lakhs for the financial year under review as against 10,455.92 Lakhs and 6,625.36 Lakhs respectively, for the previous financial year.
Your Directors recommend payment of dividend @ 3% i.e. 0.30 per equity share on face value of 10/- each on 18,34,46,051 equity shares aggregating to 550 Lakhs (previous financial year: 550 Lakhs).
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to Reserve.
During the year under review, the Company had successfully raised
16,179.57 Lakhs via issue of equity shares through Qualified Institutional Placement (QIP). Your Company has allotted 2,08,76,860 equity shares to the new shareholders on 4th April, 2018 and the trading on new shares was commenced with effect from 6th April, 2018. The Paid-up Equity Share Capital accordingly as on 31st March, 2019 was 183,44,60,510/- (divided into 18,34,46,051 equity shares of 10/- each.).
MATERIAL CHANGES AFFECTING THE COMPANY
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report.
OPERATIONS v HYBRID ANNUITY MODE (HAM) PROJECTS
During the year under review, your Company has received the Appointed Date from the National Highways Authority of India for the 4 (Four) Projects under the Hybrid Annuity Mode (HAM) as detailed below:
|Vadape Thane Project:||Ausa Chakur Project:|
|Eight Laning of Vadape-||Four Laning of Ausa- Chakur|
|Thane Section of NH-3 from||Section of NH-361 from|
|km. 539.202 to km. 563.000||km. 55.835 to km. 114.345|
|(Design length 23.798 km.)||(Design length 58.51 km.)|
|in the State of Maharashtra.||in the State of Maharashtra|
|Appointed Date:||Appointed Date:|
|21st January, 2019||25th March, 2019|
|Chakur Loha Project:||Loha Waranga Project:|
|Four Laning of Chakur ||Four Laning of Loha -|
|Loha Section of NH-361||Waranga Section of|
|from km. 114.600 to km.||NH-361 from km. 187.800|
|187.800 (Design length||to km. 244.369 (Design|
|73.345 km.) in the State of||length 56.569 km.) in the|
|Maharashtra.||State of Maharashtra.|
|Appointed Date:||Appointed Date:|
|25th March, 2019||25th March, 2019|
During the year under review and as on the date of this report your Company has achieved the following Projects Milestones:
Nagpur Ring Road-Package I [Four Laning standalone Ring
Road/Bypass (km. 0.5 km. 34.0) for Nagpur city].
The Authority has paid the second Milestone payment for 40% of the physical progress for the project on 25th May, 2018.
Nagpur Ring Road-Package II [Four Laning standalone Ring
Road/Bypass (km. 34.5 km. 62.035) for Nagpur city]. The Authority has paid the second Milestone payment for 40% of the physical progress for the project on 19th July, 2018.
Talaja Mahuva [Four Laning of Talaja Mahuva Section of NH8E (from km. 53.585 to km. 100.100) (design chainage from km. 54.990 to km.100.450) (Package II)].
The Authority has paid the first Milestone payment for 20% of the physical progress for the project on 5th October, 2018.
v TOLLING PROJECTS
During the year under review and as on the date of this report your Company has successfully won the following tolling projects:
Collection of toll at Athur Toll Plaza at km. 103.500 on Tambaram to Tindivanam Section from km. 74.500 to km. 121.000 of NH-45 in the State of Tamil Nadu for a period of 1 (One) year.
a Collection of user fee at Paranur Fee Plaza at km. 52.820 for the section from km. 28.000 to km. 74.500 (Tambaram - Tindivanam Section) of NH45 in the State of Tamil Nadu for a period of 1 (One) year.
During the year under review, your Company has successfully completed 124 projects including 228 toll plazas and 1,459 lanes across India.
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.
Your Company has not accepted any deposits during the year.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis forms an integral part of this report and is presented separately. It gives details of the overall industry structure, economic developments, performance and state of affairs of your Company and their adequacy, risk management systems and other material developments during the Financial Year 2018-19.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. Sudha D. Mhaiskar (DIN: 00707501) who was appointed as an Additional Director of the Company on 12th February, 2018 was confirmed as Director of the Company by the Members at the 16th Annual General Meeting ("AGM") of the Company held on 2nd August, 2018.
The Board of Directors at their Meeting held on 14th February, 2019, on the recommendation of Nomination & Remuneration Committee, has re-appointed Mr. Jayant D. Mhaiskar as the Managing Director, designated as Chairman & Managing Director of the Company with effect from 1st July, 2019, subject to approval of Members at the ensuing AGM. The suitable resolution seeking Members approval for the said re-appointment forms part of the Notice convening the ensuing AGM.
Mrs. Anuya J. Mhaiskar is liable to retire by rotation at the ensuing AGM and being eligible, offers herself for re-appointment. Your Board of Directors recommend her re-appointment. The Board of Directors at their meeting held on 14th February, 2019, had approved the appointment of Mr. Subodh R. Garud as Chief Executive Officer Toll Operations of the Company from immediate effect. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
DIRECTORS RESPONSIBILITY STATEMENT
As required under clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, Directors to the best of their knowledge and belief, state that (i) in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
(ii) the Directors had 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 the financial year and of the profit for the year; (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the Directors had prepared the annual accounts on concern basis; (v) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.
INDIAN ACCOUNTING STANDARDS (IND AS) IFRS CONVERGED
The Company has prepared the Financial Statements (both Standalone and Consolidated) for the year ended 31st March, 2019 as per Indian Accounting Standards (Ind AS) notified vide G.S.R. 111(E) dated 16th February, 2015 as amended from time to time.
PERFORMANCE EVALUATION OF THE DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the Board has carried out an annual performance evaluation of its own performance as well as of its Committees thereof and of the Directors individually. The manner in which the evaluation has been carried out has been covered in the Corporate Governance Report.
The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection, appointment and remuneration of Directors and KMP. The Remuneration Policy is stated in the Corporate Governance Report.
EXTRACT OF ANNUAL RETURN
The extract of annual return as provided under sub-section (3) of Section 92 of the Companies Act, 2013, in the prescribed Form MGT-9 is annexed to this Report.
NUMBER OF MEETINGS OF THE BOARD
There were 4 (Four) meetings of the Board held during the year. Detailed information is given in the Corporate Governance Report.
The Audit Committee comprises of 3 (Three) Independent Directors and an Executive Director. Detailed information is given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
a going CORPORATE GOVERNANCE
A separate section on Corporate Governance forms a part of our Report. A certificate has been received from the Secretarial Auditor of the Company regarding compliance of requirements of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.
AUDITORS v STATUTORY AUDITORS
Y our Company had appointed M/s. G. D. Apte & Co., Chartered Accountants (Firm Registration No. 100515W) as the Statutory Auditors of the Company at the 15th Annual General Meeting (AGM) held on 27th July, 2017, to hold office for period of
The Ministry of Corporate Affairs vide their Notification 7th May, 2018 have done away with the provisions relating to the ratification of the Auditors at every AGM. However, considering the resolution passed at the 15th AGM, your Company as a good governance recommended the ratification of the appointment of Statutory Auditor at the 16th AGM and also obtained the consent of the Members that no ratification for the appointment of the Statutory Auditors would be required from next AGM and they shall continue to hold office of Statutory Auditors till the conclusion of the 20th AGM of the Company. Accordingly, your Company would not require to ratify the Appointment of Statutory Auditors at the ensuing AGM.
There is no audit qualification, reservation or adverse remark for the year under review. However, the Statutory Auditors have made an observation in Point No. vii (b) in Annexure B of their Independent Auditors Report, reply for which is mentioned below: Our Company has generally been regular in depositing statutory dues. These amounts have subsequently been paid and the management has taken steps to avoid delay in future.
v COST AUDITORS
Your Company has been carrying out audit of cost records relating to road maintenance activity every year in line with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, as amended from time to time.
Your Board of Directors on the recommendation of the Audit Committee has appointed M/s. Nawal Barde Devdhe Associates, Cost Accountants (Firm Registration No. 001711), as the Cost Auditors to audit the cost accounts of the Company for the Financial Year 2019-20. As required under the Companies Act, 2013, a resolution seeking members approval for ratification and consideration of the remuneration payable to the Cost Auditor forms part of the Notice convening the AGM.
The Cost Audit Reports for the Financial Year ended 31st March, 2018 were filed on 6th December, 2018.
The Cost Audit Reports for the Financial Year ended 31st March, 2019 are required to be submitted by the Cost Auditor to the Board of Directors on or before 29th September, 2019 and same are required to be filed by the Company with the Central Government within 30 days from the receipt of the reports.
v SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, the Company has appointed CS Dinesh Joshi, KANJ & Co. LLP, (Membership No. 3752) (Formerly KANJ & Associates) Company Secretaries in Practice to undertake the secretarial audit of the Company for the Financial Year 2019-20. Secretarial Audit Report as issued by him in the prescribed Form MR-3 is annexed to this Report. The said Secretarial Audit Report does not contain any qualification, reservation or adverse remark for the year under review.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
Pursuant to the requirements of Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with the Rules thereunder, the Company had formulated and adopted a Policy on Prevention of Sexual Harassment at Workplace. The Company has not received any complaint of sexual harassment during the year under review.
RISK MANAGEMENT POLICY
Your Company has implemented mechanism to identify, assess, monitor and mitigate various risks and has formulated a Risk Management Policy. The Audit Committee and the Board of Directors are informed of the Risk assessment and minimization procedures.
CORPORATE SOCIAL RESPONSIBILITY
Detailed information on Corporate Social Responsibility Policy developed and implemented by the Company on CSR initiatives taken during the year pursuant to Section 135 of the Companies Act, 2013 as Report on CSR activities is annexed to this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Information regarding loans, guarantees or investments as required under the provisions of Section 186 of the Companies Act, 2013 is not applicable to the Company as the Company is exempted under the category of "the companies providing infrastructure facilities".
RELATED PARTY TRANSACTIONS
All related party transactions during the year were on arms length basis and not in conflict with the interest of the Company. The particulars of the said transactions alongwith other contracts/arrangements are also briefed in the Note/Schedule 39 to the financial statement which sets out related party disclosures. A Statement containing particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions in prescribed form AOC-2 is annexed. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed through the following portal link: http://www.mepinfra.com.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and specified employees in the course of day to day business operations of the Company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings/behavior in any form and the Board has laid down certain directives to counter such acts. Such code of conduct has also been placed on the Companys website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. A declaration to this effect signed by the Chairman & Managing Director of the Company appears elsewhere in this Annual Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed. The information about Top Ten Employees in terms of remuneration will be available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has established a Vigil Mechanism Policy/Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. Staying true to our core values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and Stakeholders Responsibility. The said Policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern. The Policy on Vigil Mechanism/Whistle Blower Mechanism may be accessed through website of the Company viz. http://www.mepinfra.com.
Following are the companies which are Subsidiary Companies of the Company:
|v Wholly Owned Subsidiaries||a MEP Sanjose Nagpur Ring Road 2 Private Limited (74%)|
|a Raima Ventures Private Limited||a MEP Sanjose Arawali Kante Road Private Limited (74%)|
|a Rideema Toll Private Limited|
|a MEP Sanjose Talaja Mahuva Road Private Limited (60%)|
|a Rideema Toll Bridge Private Limited|
|a MEP Sanjose Mahuva Kagavadar Road Private Limited (60%)|
|a MEP Nagzari Toll Road Private Limited|
|a MEP IRDP Solapur Toll Road Private Limited||a MEP Foundation (99.90%)*|
|a Raima Toll Road Private Limited||a MEP Longjian ACR Private Limited (51%)|
|a MEP Chennai Bypass Toll Road Private Limited||a MEP Longjian CLR Private Limited (51%)|
|a MEP Highway Solutions Private Limited|
|a MEP Longjian Loha Waranga Road Private Limited (51%)|
|a MEP RGSL Toll Bridge Private Limited|
|a MEP Longjian VTR Private Limited (51%)|
|a Raima Toll & Infrastructure Private Limited|
|a MEP Tormato Private Limited||v Step Down Subsidiary (% of holding)|
|a MEP Roads & Bridges Private Limited||a Baramati Tollways Private Limited (99.99%) (Rideema|
|a Mhaiskar Toll Road Private Limited||Toll Pvt. Ltd. is the Holding Company)|
|a MEP Infra Constructions Private Limited||v Subsidiary by control of composition of Board/Associate/|
|a MEP Toll & Infrastructure Private Limited||Consortium|
|a MEP Infraprojects Private Limited||a MEPIDL Enterprises LLC (49%)|
|v Subsidiaries (% of holding)||a KVM Technology Solutions Private Limited|
|a MEP Infrastructure Private Limited (99.99%)||a SMYR Consortium LLP|
|a MEP Hyderabad Bangalore Toll Road Private Limited (99.99%)|
|* MEP Foundation which is a Section 8 registered Company under|
|a MEP Sanjose Kante Waked Road Private Limited (74%)|
|the Companies Act, 2013, with the main objectives of conducting|
|a MEP Nagpur Ring Road 1 Private Limited (74%)|
A statement containing salient features of the financial statement of the subsidiaries and associates in the prescribed Form AOC-1 is annexed to this Report. The audited financial statements of the said companies will be kept for inspection by any member of the Company at its Registered Office of the Company during business hours and as per the provisions of Section 136(1) of the Companies Act, 2013, a copy of the same will be made available to any shareholder on request. A Cash Flow Statement for the year 2018-19 is attached to the Balance Sheet.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company primarily being an Infrastructure Company and not involved in any industrial or manufacturing activities, the Company has no particulars to report regarding conservation of energy and technology absorption as required under Section 134 of the Companies Act, 2013 and the Rules made thereunder. During the year under review, the Company did not have any foreign exchange earnings, whereas the foreign exchange outgo amounted to 95.72 Lakhs towards Business promotion, Advertisement expenses, Legal consultancy and Professional fees.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company has an effective internal financial control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedure. The Companys internal financial control system is commensurate with its size, scale and complexities of its operations.
SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY
During the year under review, there were no significant or material orders passed by any Regulator, Court or Tribunal against the Company, which could impact its going concern status or operations.
Statements in this Directors Report and Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions 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 make difference to the Companys operations include changes in the government regulations, developments in the infrastructure segment, tax regimes and economic developments within India.
ACKNOWLEDGEMENT & APPRECIATION
Your Directors wish to place on record their sincere appreciation, for the contribution made by the employees at all levels for their hard work and support, your Companys achievements would not have been possible without their efforts. Your Directors also wish to thank all Shareholders, Clients, Government and Regulatory Authorities and Stock Exchanges, Joint Bidding Partners, Financial Authorities, Customers, Dealers, Agents, Suppliers, Investors, Lenders and Bankers for their continued support and faith reposed in the Company. Your Directors also thank the Ministry of Corporate Affairs, stakeholders, advocates, solicitors and business associates for their continuous support.
|By and on behalf of the Board of Directors|
|For MEP Infrastructure Developers Limited|
|Jayant D. Mhaiskar|
|Place: Mumbai||Chairman & Managing Director|
|Date: May 23, 2019||DIN: 00716351|