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Ashoka Buildcon

BSE: 533271|NSE: ASHOKA|ISIN: INE442H01029|SECTOR: Construction & Contracting - Civil
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Directors Report Year End : Mar '18    Mar 17

BOARD’S REPORT

Dear Members,

Ashoka Buildcon Limited

The Directors have pleasure in presenting the 25th Annual Report along with audited financial statements of your Company, for the year ended March 31, 2018.

Financial Results

The financial performance of your Company for the year ended March 31, 2018 is summarized below :

(Rs. in Lakh except EPS)

Particulars

Standalone

Consolidated

2017 -18

2016-17

2017 -18#

2016-17#

Total Receipts / Gross Sales and Operating Income

2,54,605.42

2,08,523.09

365,457.95

306,115.61

Profit Before Depreciation and Tax

34,267.09

26,713.91

25,648.40

10,919.17

Depreciation

5,322.27

5,073.52

29,143.19

26,401.26

Profit/(Loss) Before Tax

28,944.82

21,640.39

(3,494.79)

(15,482.09)

Provision for Taxation

5,244.24

4,030.96

8,370.65

6,983.24

Profit/(Loss) after tax

23,700.58

17,609.43

(11,865.44)

(22,465.33)

Share of Profit/(Loss) of subsidiaries transferred to

Non-controlling

Interest 1

N. A.

N. A.

(753.15)

(1,942.68)

Profit/(Loss) after tax (post minority interest)

NA

NA

(11,211.95)

(20,570.72)

Dividend

2,994.60

1,497.19

2,994.60

1,497.19

Balance carried to Balance sheet

23,700.58

17,609.43

(11,211.95)

(20,570.72)

Earnings per Equity Share (EPS) Basic (face value Rs.5/- each) Diluted (face value Rs.5/- each)

12.66

12.66

9.41

9.41

(5.94)

(5.94)

(10.97)

(10.97)

State of Company’s Affairs Operations

a) During the year under review, the Company has won Road Projects worth of Rs.7,011.31 Crore and Power Projects worth of Rs.344.67 Crore as detailed below.

Name of the Project

Authority

Length (K. M.)

Project Cost (Rs. in Crore)

Construction of Eight (8) Lane Vadodara Kim Expressway in the State of Gujarat

National Highways Authority of India

13.00

1,687.00

Four (4) laning of Tumkur-Shivamogga section Karadi to Banwara of NH-206 on in the State of Karnataka

National Highways Authority of India

56.705

1,218.50

Projects comprising of 9 National Highway stretches (Bundle 1) on Toll Operate Transfer Mode in India. The Company is O & M Partner.

National Highways Authority of India

680.68

1,025.00

Four (4) laning of Tumkur - Shivamogga section Mallasandra to Karadi of NH-206 in the State of Karnataka

National Highways Authority of India

65.195

917.00

Six Laning of Khairatunda to BarwaAdda Section of NHD2 in the State of Jharkhand

National Highways Authority of India

40.02

860.10

Four (4) Laning of Belgaum - Khanapur Section of NH-4A in the State of Karnataka

National Highways Authority of India

30.00

856.20

Up-gradation of Jalgaon - Bhadgaon ( section I) of NH 753J from Chainage 4 000 Km to 56 200 Km to Two lane with paved shoulders in the State of Maharashtra on EPC mode

Ministry of Road Transport & Highway (MoRT&H) through Public Works Department, National Highway (P.W.D), Maharashtra

52.20

237.30

Up-gradation of Bhadgaon - Chalisgaon (section II) of NH 753J [Jalgaon - Bhadgaon - Chalisgaon - Nandgaon - Manmad (46.800 Km)] in the state of Maharashtra on EPC mode

Ministry of Road Transport & Highway (MoRT&H) through Public Works Department, National Highway (P.W.D), Maharashtra

46.800

210.21

Sub-total A

7,011.31

Power Projects

(Rs. in Crore)

Execution of Urban Electrification works for 12 Towns in Ranchi and Medininagar in the State of Jharkhand

Jharkhand BijliVitran Nigam Limited

282.73

Turnkey Project at Karana Dist. Wardha under Nagpur Zone

Maharashtra State Electricity Transmission Co. Ltd

38.78

Establishment of132/33 KV sub-station at Jawhar, Dist. Palghar on Turnkey basis in the State of Maharashtra

Maharashtra State Electricity Transmission Company Ltd.

17.55

Turnkey Project under Green Energy Corridor, Dist. Ahmednagar Maharashtra

Maharashtra State Electricity Transmission Co. Ltd.

5.61

Sub-total B

344.67

Total

7,355.98

b. Updates on Projects

- Your Company received Completion Certificates for both the Annuity Projects viz. Chennai Outer Ring Road Project in the State of Tamil Nadu and MudholNipani Road Project in the State of Karnataka;

- Your Company received Completion Certificate for first of its International Project at Maldives;

- Your Company received Completion Certificate for Eastern Peripheral Expressway (EPE) Project which the Company completed in record time;

- The Company has successfully achieved financial closure for Ashoka RanastalamAnandapuram Road Limited, step down subsidiary of the Company.

- The balance toll and annuity collection period for on-going Projects is as follows.

Name of the Project

Concession / Toll Period / Annuity

BOT Projects

Bhandara to Maharashtra Border

16th March 2008 to 15th March 2028

Durg Bypass to Chhatisgarh Border Road Project

22nd July 2008 to 21st July 2028

JaoraNayagaon Road Project

25th August 2008 to 25th Aug 2033

Belgaum - Dharwad Road Project

04th May 2011 to 3rd May 2041

Sambhalpur - Kharagpur Road Project

14th November 2011 to 13th November 2041

Dhankuni - Kharagpur Road Project

01st April 2012 to 31st March 2037

Nagar Aurangabad Road Project

18th December 2006 to 18th December 2018

Waghur Hydro Project

30 years from the commissioning date

Foot Overbridges on Eastern Express Highway - NH - 3 (Pravin Hotel - Vikroli )

31st May, 2003 to 30th September, 2018

Foot Overbridges on Eastern Express Highway - NH - 3 (Tagor Nagar - Vikroli )

31st May, 2003 to 30th September, 2019

Projects handed over

Nashirabad Railway Over Bridge

24thJuly 2000 to 23rdNovember 2017 (Handed over as at 31st March, 2018)

Indore - Edlabad Road Project

24th September 2001 to 18thFebruary 2017 (As on 31/3/2017 toll period over)

Pune - Shirur Road Project

6thJuly 2005 to 6th July 2015 (Under Arbitration)

KatniByepass Road Project

19th August 2002 to 21st February, 2020(toll collection income is not recognised in books as the matter is sub-judiced)

Foot Overbridges on Eastern Express Highway - NH - 3

1.Godrej Company

2.Luiswadi, Thane

3.Mental Hospital, Thane

4.Priyadarshani Circle Chembur

Handed over in earlier years

Annuity Projects

Mudhol - Nipani - Maharashtra Border (Karnataka)

12th December, 2014 (Concession period 10 Years)

Hungund-Talikot (Karnataka)

3rd October 2016 (Concession period 10 Years)

Bagewadi - Bailhongal - Saundatti(Karnataka)

3rd October 2016 (Concession period 10 Years)

Kharar - Ludhiana (Punjab)

15th March 2017 (Concession Period 17.5 Years )

Ranatsalam - Anandapuram (Andhra Pradesh)

16th November 2017(Concession Period 17.5 Years )

Joint Venture

BOT

Wainganga Bridge at Bhandara

3rd March 2001 to 15th February, 2018, and further extension for 3 years and 6 months as per District Court Order,

Ashoka Bridgeways

17th March 2004 to 15th November, 2018

Annuity Projects

Chennai Outer Ring Road Phase II from Nemilicheri to Minjur

12thMarch 2014 ( Concession period 20 Years )

Future Outlook

We believe that in view of the great thrust the Government has on an infrastructure, we feel going ahead there is a very huge opportunity for us in Nation Building. We are optimistic that we will ramp our Order Book to a new peak in the Road Sector and Power Distribution Sector as well.

The Government has come up with the ambitious Plan for developing the National Highways with following the programmes:

- Bharatmala Programme wherein 24,800 KMs Road Projects, to be developed over next five years period involving an investment of Rs.5,35,000 Crore.

- NHDP program wherein 10000 KMs of National Highways and Expressways would also be put for the bidding.

- Sagarmala Program which is a series of projects to leverage the country’s coastline and inland waterways to drive industrial development

We will continue giving good returns to our investors. The Company will also continue to look for opportunities in other infra spaces like Railways, City Gas Distribution, and Smart City Development Programme.

Share Capital

During the year under review, the Company has not allotted any equity shares with or without differential voting rights. The paid-up Equity Share capital of the Company as at March 31, 2018 remained at Rs.93.57 Crore.

Dividend

During the year under review, your Company had declared and paid Interim Dividend of Re.0.80 (Paise Eighty only) per Equity share of face value of Rs. 5/- each for the Financial Year 2017

18. The total outflow on account of dividend during the year was Rs.33.05 Crore including Dividend Distribution Tax and final dividend for FY17-18.

Transfer to Reserves

Your Company has not transferred any amount to the general reserve during the year under review.

Issue of Bonus Shares

Your Company has proposed to issue 1 (one) Equity Share as Bonus Share for every 2 (two) Equity Shares of Rs.5/- each held, subject to approval of Shareholders. Your Company will capitalize the amount of Rs.46.78 Crore from Reserves and Surplus.

Public Deposits

During the financial year 2017-18, your Company had not accepted any deposits within the meaning of the provisions of Section 73 of the Companies Act, 2013(“the Act”) read with the Companies (Acceptance of Deposits) Rules, 2014.

Capital Expenditure

As at March 31, 2018, the Gross Fixed Assets & Intangible Assets stood at Rs.498.81 Crore which includes CWIP and Intangible Assets under Development and net fixed assets & net intangible assets at Rs.232.36 Crore. Additions during year amounted to Rs.104.08 Crore.

Audit Committee

The Audit Committee of the Board of Directors of the Company is duly constituted in accordance with the provisions of Section 177 (8) of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2014 and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“LODR 2015”) as follows :

Sr. No

Name

Designation

1

Mr. Albert Tauro

Chairman (Independent Director)

2

Mr. Michael Pinto

Member (Independent Director)

3

Ms. Sunanda Dandekar

Member (Independent Director)

4

Mr. Milap Raj Bhansali

Member (Executive Director)

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

Vigil Mechanism:

Your Company is committed to the highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has established a vigil mechanism by adopting a Whistle Blower Policy in compliance with the provisions of Section 177 (9) and (10) of the Act and Regulation 22 of the LODR 2015. The administration of the vigil mechanism is ensured through the Audit Committee. The Whistle Blower Policy of the Company is annexed to this report as Annexure VIII and posted on the website of the Company at www.ashokabuildcon.com

Subsidiaries

In accordance with Section 129 (3) of the Act and as per Indian Accounting Standards (IndAS) 21, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries, which form part of this Annual Report.

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

During the year under review :

- 74% stake in the equity share capital of Tech Berater Private Limited has been acquired by Viva Infrastructure Limited, a Wholly Owned Subsidiary of the Company to make it a Step Down subsidiary of the Company;

- Ashoka Aerospace Private Limited with 100% stake in its equity share capital had been incorporated as a Wholly Owned Subsidiary;

- Ashoka Ranastalam Anandapuram Road Limited had been incorporated as a Wholly Owned Subsidiary of Ashoka Concessions Limited, a Subsidiary of the Company for execution of Ranastalam-Anandapuram Road Project in the State of Andhra Pradesh. It is a step down subsidiary of the Company.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.ashokabuildcon.com. Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.ashokabuildcon.com. Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company’s registered office address.

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

In accordance with Section 178 and other applicable provisions of the Act read with the Rule 6 of the Companies (Meeting of Boards and its Powers) Rules, 2014 issued there under and Regulation 19 of the LODR, 2015, the Board of Director at their, meeting held on 30th September, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of the Annual Report.

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

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

Directors and Key Managerial Personnel

In compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Michael Pinto, Mr. Sharadchandra Abhyankar, Mr. Albert Tauro and Mr. Gyan Chand Daga had been appointed as Independent Directors on the Board of Directors of your Company to hold office up to five (5) consecutive years upto March 31, 2019 and Ms. Sunanda Dandekar had been appointed as an Independent Director to hold office upto March 30, 2020.

Mr. Satish D. Parakh Managing Director is liable to retire by rotation at the ensuing AGM pursuant to section 152(6)(c) of the Act read with the Companies(Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company and being eligible has offered him self for re-appointment. The brief resume of Mr. Satish Parakh and other information under Regulation 36 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 (LODR 2015) and Secretarial Standard 2 (SS-2) with respect to the Director seeking re-appointment has been provided in the Notice convening 25th AGM. Your Directors recommend his re-appointment.

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

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

In accordance with the Section 149(7) of the Act, each Independent Director has given a written declaration to the Company at the time of appointment and at the first meeting of the Board of Directors in every financial year confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1) (b) of the LODR 2015.

Awards and Recognitions received by the Company during the year :

Awarded by

Name of the Award/ Recognition

CIA WORLD Builder & Infra Awards

Infra Company of The Year

National Leadership Awards

Best Environmental for GHG Reduction

Construction World Infra Awards

First Fastest Growing Company

Construction Times - Power Project

Munger Power Project

D & B Infra Awards

Infra Company of The Year

UBM India - OHS Awards

OHS Awards

ET Now - CSR Awards

Innovation in CSR Practices

Annual evaluation of Board’s performance

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

Number of meetings of the Board

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

In terms of requirements of Schedule IV of the Act a separate meeting of Independent Directors was held on March 20, 2018 to review the performance of Non-independent Directors (including the Chairman), the entire Board and quality, quantity and timelines of the flow of information between the Management and the Board.

Directors’ Responsibility Statement

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

i) In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

ii) The Directors have approved the accounting policies and the same have been applied consistently and have made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a ‘going concern’ basis;

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

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

Auditors and Auditors’ Reports

Statutory Auditors

The Shareholders of the Company, pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, have appointed M/s. S R B C & Co., LLP, Chartered Accountants, Mumbai, (Firm Registration No. 324982E/E300003), as the Statutory Auditors to hold office till the conclusion of the 29th Annual General Meeting (‘AGM’) of the Company to be held for FY 2021-22. They have confirmed that they are not disqualified from continuing as Auditors of the Company. The provision for ratification of appointment of the statutory auditors at every AGM has been withdrawn with effect from May 07, 2018 pursuant to the Companies Amendment Act, 2017. Hence, the resolution for ratification of the appointment of statutory Auditors is not included in the notice of Annual General Meeting.

The Auditors’ Reports on Standalone Financial Statements (SFS) and Consolidated Financial Statements (CFS) for the financial year 2017-18 do not contain any qualification, reservation or adverse remark except the following :

Remark :Annexure 1 - Statement on matters specified in paragraphs 3 and 4 of the Companies (Auditor’s report) Order, 2016, Para -(i) (c)

According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for title deed in case of two buildings (Gross Block of Rs.151.64 Lakh, Net Block Rs.143.77 lakh), for which transfer deed is yet to be executed in the name of the Company.

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

Second building at Hilla Heights, Mumbai also is in possession of the Company. Necessary documents to transfer the same in the name of the Company are being organized.

Remark : Annexure 1 - Statement on matters specified in paragraphs 3 and 4 of the Companies (Auditor’s report) Order, 2016, Para - (vii) (a)

Statutory dues have been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

Reply: There were delays in payment of VAT, Professional tax and Service tax in certain cases, due to unavoidable circumstances. However the same had been regularized and the dues have been paid during the year. The necessary precautions have been taken to ensure that no such delays happen in future.

Cost Auditors

The Board of Directors had appointed M/s CY &Associates, Cost Accountants, as the Cost Auditors of your Company for the financial year 2017-18, to conduct the audit of cost records of your Company for its Construction segment.

There are no qualification(s), reservation(s) or adverse remark(s) in the Cost Audit Report for the financial year ended March 31, 2018.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s.

S. Ana.nt.ha. & Ved LLP,(LLPIN: AAH8229) Practicing Company Secretaries to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as Annexure - IV to this Report.

There are no observations / remarks or qualifications in the Secretarial Audit Report for FY2017-18 except the following:

The Company had received the letter from National Stock Exchange of India Limited (NSE) for non-disclosure of the Dividend Distribution Policy in the Annual Report of F.Y. 201617 and had instructed the Company to issue the same as an addendum to the Annual Report of F.Y.2017-18. The Company has complied with the Reg. 43A by inserting an addendum to the Annual Report FY2018.

Reply :The Company has inserted Dividend Distribution Policy as an Annexure X to the Board’s Report in compliance with the instructions of NSE.

The Dividend Distribution Policy is also available on the website of the Company www.ashokabuildcon.com in compliance with the Reg. 43A of the Listing Regulations.

Internal Auditors

M/s. Patil Hiran Jajoo, Chartered Accountants, have been appointed as Internal Auditors of the Company and the reports of the Internal Auditors are reviewed by the Audit Committee from time to time. The observations and suggestions of the Internal Auditors are reviewed and necessary corrective/preventive actions are taken in consultation with the Audit Committee.

Audits and internal checks and balances

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

As per Section 148 and other applicable provisions of the Act read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company appointed M/s. CY & Associates, Cost Accountants, (Firm Registration No. 000334) as the Cost Auditors for the financial year 2018-19 on the recommendations made by the Audit Committee. The remuneration proposed to be paid to the Cost Auditor, is subject to the ratification by the members at the ensuing AGM, would not exceed Rs.5,40,000/- (Rupees Five Lakh Forty Thousand only) plus applicable taxes and reimbursement of out of pocket expenses. As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member’s ratification for the remuneration payable to M/s CY & Associates, Cost Accountants, is included in the Notice convening the Annual General Meeting.

The consent has been received from M/s. CY & Associates, Cost Accountants, to act as the Cost Auditors of your Company for the financial year 2018-19 along with a certificate confirming their independence. As required under the Act, a resolution seeking members’ approval for the ratification of the remuneration payable to the Cost Auditors forms part of the Notice convening 25th Annual General Meeting.

Familiarisation Programme for Independent Directors

Pursuant to the requirement of Regulation 25(7) of the LODR 2015, the Company needs to formally arrange Induction or Familiarization Programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details are mentioned in the Report on Corporate Governance which is a part of this annual report.

Related party transactions

All Related Party Transactions that were entered into during the financial year were in compliance with the requirement of the Act and the Rules framed thereunder and LODR 2015. All Related Party Transactions are placed before the Audit Committee, the Board of Directors and Shareholders, as the case may be, for approval. During the financial year 2017-18, your Company entered into transactions with related parties as defined under Section 2(76) of the Act read with the Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arm’s length basis and in accordance with the provisions of the Act, Rules issued thereunder and Regulation 23 of the LODR 2015.

During the financial year 2017-18, there were no materially significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large. However the Company had entered into materially significant related party transactions with Ashoka Ranastalam Anandapuram Road Limited, a step down subsidiary, for rendering services on EPC basis worth Rs.1,170 Crore.

The details of the related party transactions are set out in Note No. 44 to the standalone financial statements forming part of this Annual Report.

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

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

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

A. Details of investments made by the Company in equity/ preference shares and compulsorily convertible debentures, as on March 31, 2018 (including investments made in the previous years) are mentioned in Note No. 4 to the standalone financial statements.

B. Details of loans given by the Company to its Subsidiaries, Associates as on March 31, 2018 are mentioned in Note No. 34 to the standalone financial statements.

C. Details of guarantees issued by the Company are as follows:

(Rs. in Lakh)

Name of entity

March 31, 2018

Ashoka Highways (Bhandara) Limited

30,294.00

Ashoka GVR Mudhol Nipani Roads

24,125.99

Limited

Total

54,419.99

Risk Management

Your Company recognises that risk is an integral part of business and is committed to manage the risk in a proactive and efficient manner. Your Company has a risk management policy in place. Major risks like operational, strategic, resources, security, industry, regulatory & compliance risks are identified and are systematically addressed through mitigating actions on a continuing basis. The Company has laid down procedures to inform Board Members about the Risk Assessment and mitigation procedure, which are periodically reviewed and discussed by the Board and relevant steps are taken for mitigation of such risks.

Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI)

The Directors state that applicable Secretarial Standards i.e. SS-1, SS-2 and SS-3, relating to ‘Meetings of the Board of Directors’ ‘General Meeting’ and ‘Dividend’, respectively, have been duly followed by the Company.

Extract of Annual Return

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

Corporate Social Responsibility

The Company continues to believe in operating and growing its business in a socially responsible way. This belief forms the core of the CSR policy of the Company that drives it to focus on holistic development of its host community and immediate social and environmental surroundings qualitatively. Hence in Accordance with the requirements of Section 135 of the Act, your Company has constituted a Corporate Social Responsibility Committee (“CSR Committee”). The composition and terms of reference of the CSR Committee are provided in Corporate Governance Report. The Company has framed Corporate Social Responsibility policy which is available at www. ashokabuildcon.com. The Company was required to spend Rs. 3.66 crore on CSR activities. However, the Company has spent Rs. 0.96 crore. The reasons for not spending full amount towards CSR are as follows:

The Company’s CSR initiatives usually involve getting the feedback from community like Project affected people, people around various Project sites of the Company, villages and their requirements. The Company then puts in place a mechanism to ensure maximum benefit to the community. The Company allocates and spends the amount with due care and observation as per requirement of CSR activities undertaken by the Company. The scope of CSR activities has been enlarged to cover almost all the activities during the year. The Company had reviewed various Projects for doing CSR activities, however the Company could not finalize the desired Project due to the fact that specific objects could not have been achieved from those Projects. Going forward the Company will endeavour to spend amount on CSR activities to achieve the Objects of the CSR Policy of the Company. Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed as Annexure VI to this report.

Policy on prevention of sexual harassment

The Company has in place Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Company has provided a safe and dignified work environment for employee which is free of discrimination. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of any such complaints of harassment. Internal Complaints Committee (ICC) has been set up to redress the complaints, received, if any.

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

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

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

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

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

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

(A) Conservation of energy

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

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

No.

Particulars

Remarks

i

Steps taken or impact on conservation of energy

In view of business activities of the Company, no substantial steps are required to be taken for conservation of energy other than those are actually implemented by the Company

ii

Steps taken by the Company for utilizing alternate source of energy

In view of business activities of the Company, no substantial steps are required to be taken for conservation of energy other than those are actually implemented by the Company

iii

The capital investment on energy conservation equipment

-

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

No.

Particulars

Remarks

I

the efforts made towards technology absorption

No specific efforts made other than in the ordinary course of execution of the Project.

II

the benefits derived like product improvement, cost reduction, product development or import substitution

N.A.

III

in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year

N.A.

a. the details of technology imported

N.A.

b. the year of import

N.A.

c. Whether the technology fully absorbed

N.A.

d. If not fully absorbed, areas where absorption has not taken place, reasons thereof

N.A.

IV

The expenditure on Research and Development

Nil

(C) DETAILS OF FOREIGN EXCHANGE EARNINGS AND EXPENSES

i) The earnings in foreign currency amounted to Rs.563.79 Lakh during the year under review.

ii) The expenses in foreign exchange are Rs.9.61 lakh in respect of the foreign travel.

Details on Internal Financial Controls

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

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 to the extent applicable. These are in accordance with generally accepted accounting principles in India including Indian Accounting Standards (IND AS). Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

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

Your Company operates in a Tally ERP system, and has many of its accounting records stored in an electronic form and backed up periodically. Your Company is in the process of implementing new ERP (SAP) from financial year 2018-19.

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

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12)of read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure III to this Report.

In terms of the provisions of Section197(12) of read with Rules5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014,a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Annual Report and is provided as Annexure III to this Report.

Management Discussion and Analysis

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

Corporate Governance

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

BUSINESS RESPONSIBILITY REPORT

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

General

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

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

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

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

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

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

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

7. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

8. Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

9. The Company complies with the Secretarial Standards issued by ICSI one of the premier professional bodies in India. Acknowledgement

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

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

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

For and on behalf of the Board of Directors

Sd/-

(Ashok Katariya)

Place: Mumbai Chairman

Date: May 29, 2018 DIN: 00112240

Source : Dion Global Solutions Limited
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