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Madhucon Projects

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Directors Report Year End : Mar '16    Mar 15

financial statements for the year ended march 31, 2016

1. FINANCIAL SUMMARY

(Rs in Lakhs)

Particulars

2015-2016

2014-2015

Gross Income

74020.42

116496.07

Profit before Depreciation & Taxation

6449.00

10020.39

Depreciation

3227.51

3777.85

Profit before Taxation

3221.49

6242.54

Provision for Taxation

i) Current Tax

687.51

1308.50

ii) Deferred Tax

--

--

Profit after Taxation

2533.98

4934.04

Profit available for appropriation

2533.98

4934.04

APPROPRIATION

General Reserve

253.39

493.40

Proposed Dividend

73.79

73.79

Corporate Tax on Proposed Dividend

15.02

11.97

Balance transferred to Balance Sheet

2191.78

4264.92

Earnings per Share (Rs.)

3.43

6.69

Book Value (Rs.)

104.35

100.92

Paid-up Equity Share Capital

740.32

740.32

Reserves & Surplus

76265.39

73731.41

2. EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report is annexed as ANNEXURE I to this report.

3. BOARD MEETINGS

The Board met 15 (Fifteen) times during the financial year 2015-2016. The following are the dates of meeting convened in different Quarters of the financial year.

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Meeting

No.

Date

Meeting

No.

Date

Meeting

No.

Date

Meeting

No.

Date

534

29.05.2015

536

17.07.2015

540

15.10.2015

543

14.01.2016

534

(Adjourned

Meeting)

30.05.2015

537

14.08.2015

541

14.11.2015

544

03.02.2016

535

29.06.2015

538

21.08.2015

542

23.12.2015

545

12.02.2016

539

19.09.2015

546

05.03.2016

547

29.03.2016

4. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3) (c) of the Companies Act, 2013, it is hereby confirmed:

i. That in the preparation of annual accounts for the financial year ended 31st March, 2016; the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii. That the Directors have selected Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company, at the end of the financial year and of the profit or loss of the Company for that period.

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

iv. That the Directors have prepared the annual accounts for the year ended 31st March 2016 on a “Going Concern” basis.

v. That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

vi. That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

4A ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has structured and implemented framework for Internal Financial Controls (“IFC”) in terms of the explanation to Section 134(5)(e) of the Companies Act, 2013. The Board of Directors of the Company is of the opinion that the Company has sound IFC for the year 2015-2016.The Company is continuously monitoring and identified the gaps if any, and implements improved controls wherever the effect of such gaps would have a material effect on the Company''s operations

5. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Independent Directors have confirmed and declared that they are not disqualified to act as an Independent Director in compliance with the provisions of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) making them eligible to act as Independent Directors.

6. NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy which lays down a framework in relation to selection, appointment and remuneration to Directors, Key Managerial Personnel and Senior Management and criteria for determining qualifications, positive attributives, and independence of a director of the Company. The Nomination and Remuneration Policy is stated in the Corporate Governance Report.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

8. RELATED PARTY TRANSACTIONS

The transactions entered with the related parties by the Company for the year under review with respect to rendering of services were on arm''s length basis and in the ordinary course of business. Hence Section 188(1) is not attracted to the Company. Thus disclosure in Form AOC-2 is not applicable to the Company. There are no material related party transactions during the year under review with the promoters, Directors or Key Managerial Personnel.

9. STATE OF THE COMPANY''S AFFAIRS

Thy Company is a wyll-ystablishyn Construction Company and a leading Contractor in executing projects, in various sectors - Transportation (National & State Highways, Roads, Railways & Ports), Irrigation & Water Resources, Buildings & Property Development, Mining (Coal & other Minerals) Energy (Generation, Transmission & Distribution) and other Infrastructure Projects. Further information on thy Company''s Business and thy developments, opportunities and outlook of thy Company and thy industry in which it operates are discussed in detail in thy Management Discussion & Analysis, which is enclosed in ANNEXURE II.

10. RESERVES

During thy year, thy Company has transferred an amount of Rs.253.39 Lakhs to General Reserves.

11. DIVIDEND

Your Directors are pleased to recommend an Equity Dividend of 30% on paid up equity capital for thy year ended 33.03.2036,subjyct to approval of thy members at this Annual General Meeting.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.

13. INFORMATION AS PER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READWITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014

Thy information as required under Section 334(3) (m) of thy Companies Act, 2033 read with Rule 8 of thy Companies (Accounts) Rules, 2034 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in thy ANNEXURE III and is attached to this report.

14. RISK MANAGEMENT

Periodic assessments to identify thy risk areas are carried out and management is briefed on thy risks in advance to enable thy Company to control risk through a properly defined plan. Thy risks are taken into account while preparing thy annual business plan for thy year. Thy Board is also periodically informed of thy business risks and thy actions taken to manage them.

15. CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICY

Pursuant to thy provisions of Section 335 and Schedule VII of thy Companies Act, 2033, CSR Committee of thy Board of Directors was formed to recommend;

a) The policy on Corporate Social Responsibility (CSR) and

b) Implementation of thy CSR Projects or Programs to by undertaken by thy Company as per CSR Policy by thy Board of Directors.

Annual Report on CSR in thy prescribed format is enclosed in ANNEXURE IV.

16. FORMAL ANNUAL EVALUATION

In compliancy with thy Companies Act, 2033 and Regulation 37(30) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2035, thy performance evaluation of thy Board was carried out during thy year under review.

17. REPORT ON THE PERFORMANCE/FINANCIAL POSITION OF THESUBSIDIARIES /ASSOCIATES/JOINT VENTURES COMPANIES

A separate statement containing thy salient features of thy financial statements of thy subsidiary Companies/Associate Companies/Joint Ventures is prepared in Form AOC-3 as per thy provisions of Section 329 of thy Companies Act, 2033 read with Companies (Accounts) Rules, 2034 and is attached in ANNEXURE V.

18. CONSOLIDATION OF ACCOUNTS

In compliance with Regulation 33 of the SEBI (LODR) Regulations, 2015 and Listing Agreement entered into with the Stock Exchanges and in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards AS-21 and AS-27 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, Your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2016, duly audited by the Statutory Auditors which forms part of the Annual Report.

The Annual Accounts of the Subsidiary Companies and the related information will be made available to shareholders, who may be interested in obtaining the same at any point of time. The Annual Accounts of Subsidiary Companies will also be kept for inspection by any shareholder at the Registered Office of the Company and also at its Subsidiary Companies.

19. DETAILS OF DIRECTORS AND KEY MANANGERIAL PERSONNEL APPOINTED AND RESIGNED DURING THE YEAR

Sl. No.

Name of the Director

Appointed/Resigned

Date of appointment/ Cessation

1

Sri. Mohammad Shafi, Whole-time Director

Appointed

30.05.2015

2

Sri. Kandimalla KVN Prasad, Independent Director

Resigned

12.02.2016

20. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

21. VIGIL MECHANISM

The Company has established Vigil Mechanism for Directors / Employees to report their genuine concerns or grievances. The Audit Committee of the Company oversees the vigil Mechanism through the Committee. It provides for adequate safeguards against victimization of directors/ employees who avail of the mechanism. It also provides for direct access to the Chairman of the Audit Committee. In case of repeated frivolous complaints, the suitable action will be initiated by the Chairman of the Audit Committee.

22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013 Internal Complaints Committee (ICC) has been set us to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary trainees) are covered under this policy.

During the financial year 2015-16, the Company received no complaints on sexual harassment.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators/ Courts/Tribunals that would impact the going concern status of the Company and its future operations.

24. DEPOSITS

The Company had not accepted or invited any Deposits and consequently no deposit has matured / become due for repayment as on 31st March 2016.

25. COMPOSITION OF AUDIT COMMITTEE

The Audit Committee was re-constituted on 12.02.2016 and comprised of the following directors as on 31st March 2016:

1. Smt. Ch. Lakshmi Kumari, Independent Director as Chairperson

2. Sri N. Seethaiah, Managing Director as Member

3. Sri Madhava Rao Potla, Independent Director as Member

26. COMPOSITION OF STAKEHOLDERS'' RELATIONSHIP COMMITTEE

The Stakeholders'' Relationship Committee was constituted on 12.02.2016 comprised of the following directors as on 31st March 2016:

1. Smt. Ch. Lakshmi Kumari, Independent Director as Chairperson

2. Sri P Madhava Rao, Independent Director as Member

3. Sri K Srinivasa Rao, Whole-time Director as Member

27. STATUTORY AUDITORS AND THEIR REPORT

M/s Kota & Company, Statutory Auditors (FRN-011982S) of the Company, expressed their willingness to be appointed for the financial year 2016-2017 and to hold office up to the conclusion of the next Annual General Meeting, if they are appointed at this Annual General Meeting. They have furnished a certificate to the effect that their proposed appointment, if made, will be in accordance with the limits specified under 141 (1)(g) of the Companies Act, 2013.

28. COST AUDITORS

The Board of Directors, on recommendation of Audit Committee re-appointed M/s BVR & Associates, Cost Accountants (Registration No. 000453) as the Cost Auditors of the Company to conduct audit of cost records made and maintained by the Company pertaining to Works Contracts Construction of Roads, etc. for financial year commencing on 1st April, 2016 and ending on 31st March, 2017.

29. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Rakhi Agarwal & Associates has been appointed as Secretarial Auditors of the Company for the financial year 2015-16 to carry out the Secretarial Audit and issue report there on. Secretarial Audit report as issued by Ms. Rakhi Agarwal & Associates, Practicing Company Secretaries is annexed to this Report as ANNEXURE VI

30. LISTING WITH STOCK EXCHANGES

The Company''s securities have been listed Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Luxembourg Stock Exchange. Listing fee has been paid to Stock Exchanges within the prescribed time limit as set in Regulation 14 of Listing Regulations for the Financial Year 2016-2017.

31. PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in ANNEXURE VII and forms part of this Report.

32. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Pursuant to the provisions of schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations,2015, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders.

33. APPRECIATIONS

Your Directors wish to place on record their appreciation for the continuous support received from the members, customers, suppliers, bankers, various statutory bodies of the Government of India and the Company''s employees at all levels.

For and on behalf of the Board

Place: Hyderabad N. Seethaiah K. Srinivasa Rao

Date: 10-08-2016 Managing Director Whole-time Director

DIN-00784491 DIN-00022855

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