you are here:

Dilip Buildcon Ltd.

BSE: 540047 | NSE: DBL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE917M01012 | SECTOR: Construction & Contracting - Civil

BSE Live

Nov 26, 15:35
352.85 1.75 (0.50%)
Volume
AVERAGE VOLUME
5-Day
10,982
10-Day
9,459
30-Day
8,068
5,882
  • Prev. Close

    351.10

  • Open Price

    352.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Nov 26, 15:31
351.65 0.55 (0.16%)
Volume
AVERAGE VOLUME
5-Day
186,542
10-Day
155,994
30-Day
130,386
70,551
  • Prev. Close

    351.10

  • Open Price

    351.10

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2018 2017 2016

Director’s Report

To,

The Members,

Dilip Buildcon Limited

The Directors have pleasure in presenting their Twelfth Annual Report on the business and operations of the Company and the standalone and consolidated financial statements of the Company for the Financial Year ended March 31, 2018.

Financial Results

Standalone and Consolidated: The Standalone and Consolidated performance for the Financial Year ended March 31, 2018 is as under:

(Rs in Lakhs)

Particulars

Standalone

Consolidated

Year ended March

Year ended March

Year ended March

Year ended March

31, 2018

31, 2017

31, 2018

31, 2017

Gross Revenue

776139.55

510907.14

795468.47

533140.40

Total expenses

708247.00

474900.44

734725.64

495927.70

Profit / (loss) before tax

66371.78

36006.70

63122.08

37212.70

Tax expenses

Current tax

1277.13

81.11

1277.32

97.89

Deferred tax

3064.55

(168.68)

4842.15

1346.65

Profit for the year from continuing

62030.10

36094.27

57002.61

35768.16

operations

Share of Profit/(loss) of Associates

-

-

761.77

-

Profit for the Year

62030.10

36094.27

57764.38

35768.16

Other comprehensive income

Items that will not be reclassified to

32.85

18.38

32.85

18.38

profit or loss (Net of Taxes)

Total Comprehensive Income for the

62062.95

36112.64

57797.23

35786.54

year

Add: Balance in Profit and Loss

129317.79

93240.40

115927.60

80239.62

Account (Adjusted)

Sub Total

191380.74

129353.04

173724.83

116026.16

Less: Appropriation

Dividend

1367.71

29.28

1367.71

29.28

Tax on Dividend

278.44

5.97

278.44

5.97

Debenture Redemption Reserve

15000.00

15000.00

-

Others

-

-

438.60

63.30

Closing Balance

174734.59

129317.79

156640.08

115927.61

Note: The above mentioned figures are rounded off to two decimal points.

Financial Performance

During the year under review, your Company reported a top-line growth of 52% over the previous year. At Standalone level, the Revenue from Operations amounted to Rs.7,74,587.69 Lakhs as against Rs. 5,09,762.48 Lakhs in the previous year. The Operating Profit before Tax amounted to Rs.66,371.78 Lakhs as against Rs. 36,006.70 Lakhs in the previous years. The Net Profit for the year amounted to Rs.62,030.10 Lakhs against Rs.36,094.27 Lakhs reported in the previous year and total comprehensive income for the year amounted to Rs.62,062.95 Lakhs as against Rs.36,112.64 Lakhs in the previous year.

The Consolidated Revenue from Operations amounted to Rs. 7,93,747.92. Lakhs as against Rs. 5,31,915.72 Lakhs in the previous year, registering a growth of 49 %. The Consolidated Operating Profit before Tax amounted to Rs. 63,122.08 Lakhs as against Rs.37,212.70 Lakhs in the previous year. The Consolidated Net Profit after Tax amounted to Rs.57,764.38 Lakhs as against Rs.35,768.16 Lakhs in previous year and Total Comprehensive Income for the year amounted to Rs.57,797.23 Lakhs against Rs. 35,786.54 Lakhs in previous year.

The performance and financial position of the subsidiary companies are included in the Consolidated Financial Statements and presented in the Management Discussion and Analysis Report forming part of this Annual Report.

Dividend

Your Directors have recommended a dividend of Re. 1/- (Rupee One, i.e. 10 %) per equity share of Rs.10.00 (Rupees Ten only) each (previous year Re.1/- per i.e. 10% on the equity share of Rs.10/- each) aggregating Rs. 13,67,69,768/- (excluding dividend distribution tax) for the Financial Year 2017-18. The dividend payment is subject to approval of members at the ensuing Annual General Meeting and will be paid to those members whose names appear in the Company’s Register of Members and to those persons whose names appear as Beneficial owners as per the details to be furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd. (CDSL) as at the close of business hours on Thursday, September 20, 2018, after giving effect to all valid transfers in physical form lodged on or before Thursday, September 20, 2018 with the Company and/or its Registrar and Share Transfer Agent.

Pursuant to Regulation 43A of the SEBI (LODR) Regulations, 2015, your company falling under the top five hundred listed entities based on market capitalization and required to formulate a Dividend Distribution Policy.

The Board has approved and adopted the Dividend Distribution Policy and the same is available on the Company’s website at http://dilipbuildcon.com/wps/ wcm/connect/982dc3b1-0df8-4c49-93fe-7988d2dc5b00/ Dividend Distribution Policy.pdf?MOD=AJPERES&CONVERT_ TO=url&CACHEID=ROOTWORKSPACE-982dc3b1-0df8-4c49-93fe-7988d2dc5b00-m0w-IE1. The Policy is also annexed herewith as Annexure 1 to the Board’s Report. The dividend payout is in accordance with the Company’s Dividend Distribution Policy.

Business Operations Overview

We are one of the leading private sector road-focused EPC contractors in India. During the last five Financial Years ended March 31, 2018, we completed the construction of 80 road projects in the states of Madhya Pradesh, Gujarat, Himachal Pradesh, Rajasthan, Andhra Pradesh, Karnataka, Telangana, Uttar Pradesh, Maharashtra, Jharkhand, Punjab and Tamil Nadu in India, with an aggregate length of approximately 10024.00 lane kms, achieving a CAGR of 32.14% of revenue growth on standalone basis for the five Financial Years ended March 31, 2018.

As the owner of one of the largest fleets of construction equipment in India, we maintained, as of March 31, 2018, a modern equipment fleet of 9998 vehicles and other construction equipment’s from some of the world’s leading suppliers, such as Schwing Stettar, Metso, Wirtgen and Vogele. We are one of the largest employers in the construction industry in India and employed 32093 employees as of March 31, 2018. Our core business is undertaking construction projects across India in the roads sector. We specialize in constructing state and national highways, city roads, culverts and bridges. As a result of the natural growth of our road construction business, as well as the recent government support to the infrastructure sector and rising opportunities in new business areas, recently we expanded into the irrigation and urban development businesses.

Our business comprises: (i) our construction business, under which we undertake Road & Highways (State & National Highways, City Roads, Bridges & Culverts, Operation and Maintenance) irrigation, urban development and mining projects on an EPC basis; and (ii) our infrastructure development business, under which we undertake building, operation and development of road projects on a BOT basis with a focus on annuity projects.

As of March 31, 2018, we had an order book of Rs. 23,88,810 Lakhs, consisting of 25 third party road EPC projects, 20 of our own road BOT/HYBRID projects on EPC basis, 1 irrigation projects, 3 urban development projects, 2 mining projects and 1 cable-stayed bridge project.

CONSTRUCTION BUSINESS Roads & Bridges:-

In our road and bridge construction business, we mainly design, construct and maintain roads, bridges and highways on an EPC basis with third party and EPC Contracts awarded to us through our subsidiary companies.

We recognized revenue of Rs. 6,66,940 Lakhs from this business for Financial Year 2017-18. As on March 31, 2018, we were undertaking a total of 25 road EPC Projects, 1 Bridge and 20 road infrastructure development projects in 13 states, which amounted to an aggregate length of 8653 lane kms. Our order book for these projects amounted to Rs 21,92,500 Lakhs as of March 31, 2018, accounting for 92% of our total order book.

Irrigation:-

Your company have diversified into the irrigation business and has started to undertake irrigation projects in Financial Year 2014 to explore opportunities created by the increased focus of the Government and State Governments on agriculture. In our irrigation business, we undertake to build canals and dams. Our irrigation team undertakes primarily design and construction works for tunnels and canals for agricultural irrigation purposes. We do not need to make any further investment into our equipment bank as we are able to use our existing equipment for our irrigation projects. Undertaking irrigation projects in the areas close to our on-going projects facilitates our strategy to cluster our EPC projects. We can conveniently move and use the manpower, machines and materials in the nearby work sites and undertake these projects on a cost effective basis. We recognized revenue of 16,096 Lakhs from this business for Financial Year 2018. As of March 31, 2018, we were undertaking 1 EPC irrigation project in Madhya Pradesh. Our order book for these projects amounted to Rs. 4258.80 Lakhs as of March 31, 2018, accounting for 0.18 % of our total order book.

Urban Development

Your company has also diversified into the urban development business. The recent trend in the urban development sector has provided us with an opportunity to diversify our business. We believe this sector may continue to grow during the next few years and thus plan to undertake projects in our core geographic markets. We commenced urban development projects in Madhya Pradesh in Financial Year 2013 to explore the opportunities created by the increased focus of the State Government on improving the living conditions of the underprivileged. In our urban development business, we undertake re-development and re-densification of government housing and build residential units under affordable housing schemes, construction of district court and other structures in group water supply schemes relating to irrigation or water supply for agricultural purposes. We recognized revenue of Rs. 3,146 Lakhs from this business for Financial Year 2017-18. As of March 31, 2018, we were undertaking 3 EPC urban development projects in Madhya Pradesh. Our order book for these projects amounted to Rs. 14,002.6 Lakhs as of March 31, 2018, accounting for 0.59 % of our total order book.

Mining Project

DBL over a period of time has developed core strengths like fleet/equipment management, bulk material handling, high volume excavation and earth work, supply chain management etc. in its infrastructure and construction business. All these expertise of DBL enjoys close synergy with the mining business. As a part of diversification strategy and to exploit the existing strengths of the organization, DBL ventured into mining business, bagged contracts of Overburden/Waste Removal from Northern Coalfield Limited (NCL) and Singareni Collieries Company Limited (SCCL). In a very short span of 12 months DBL has achieved a remarkable excavation capacity of 2.50 Lakhs BCM per day in the most cost efficient manner and established new benchmarks for the Industry.

Project Name

Volume (BCM)

Contract Value (Rs. in Lakhs)

Khairagura, Singareni Collieries Company Limited, Asifabad District, Telangana

106.1 Million

97,355.00

Nigahi-2, Northern Coalfields Limited, Dist. Singrauli, Madhya Pradesh

131.8 Million

167,357.78

We recognized revenue of Rs. 84113 Lakhs from this business for Financial Year 2017-18. As of March 31, 2018, our order book of these 2 projects was Rs. 178049 Lakhs, accounting for 7.45% of our total order book.

Goa Zuari Cable-stayed Bridge Project (status on 31.03.2018): This project mainly involves construction of the 640-meter long cable-stayed bridge, which will have a central span of 360 meters, and will approach across River Zuari on NH-17/NH-66 on Panjim- Mangalore section in the State of Goa. Further in April 2016, we have also won Adjacent road connecting to Zuari Bridge namely package I & III costing to Rs. 85,770.00 Lakhs. Overall the company has won 3 projects in the state of Goa aggregating to Rs. 1,40,310.00 Lakhs. To ensure successful completion of this project, we have engaged international professionals from France and China to provide bridge design and construction quality examination services. We recognized revenue of Rs. 23,258.61 Lakhs from this business for Financial Year 2017-18. As of March 31, 2018, our order book of these 3 projects was Rs. 1,11,940.44 Lakhs, accounting for 4.69% of our total order book.

INFRASTRUCTURE DEVELOPMENT BUSINESS

In our infrastructure development business, we develop and maintain roads and highways on a BOT basis. The Company has signed a Term Sheet with Chhatwal Group Trust (the Investor) on August 24, 2017 in respect of divestment of its entire stake in the 24 of its Subsidiary Companies (SPVs) out of which as of March 31, 2018, we had completed 17 projects totaling 2307.71 Lane kms in the states of Gujarat, Karnataka and Madhya Pradesh in India & 7 projects totaling 2146.29 Lane Kms under construction projects which are part of Shrem deal and additional separate 11 under construction recently won HAM projects (other than Shrem deal) totaling 2550.38 Lane kms in the states of Maharashtra, Uttar Pradesh, Karnataka, Jharkhand, Telangana, Odisha and Madhya Pradesh in India.

We currently undertake BOT/Hybrid projects opportunistically, considering factors such as their proximity to clusters where we are executing other projects to maximize efficiency of execution and profitability, and the potential cash flow from such projects after they become operational. Given our strategy and focus on providing EPC services, we may also evaluate opportunities to divest, either wholly or partially, our operational BOT assets, thereby freeing up capital invested in these projects for redeployment elsewhere.

Our Geographical Footprint

Starting with Madhya Pradesh, we have expanded into 17 other states, including Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Maharashtra, Rajasthan, Tamil Nadu, Telangana, Punjab, Jharkhand, Chhattisgarh, Haryana, Goa, West Bengal and Uttar Pradesh. Increasingly, our order book consists of orders from outside Madhya Pradesh, representing approximately 89.53% of our order book as of March 31, 2018, as compared to 84.37% as of March 31, 2017. We believe our geographically diversified portfolio gives us more leverage to hedge against risks in specific areas or projects and protects us from fluctuations resulting from business concentration in limited geographical areas. The following chart illustrates our geographical footprint as of March 31, 2018:

Major ongoing EPC construction projects as of March 31, 2018:

Project Name

Employer

State

Type

Contract Value (Rs. in Lakhs)

Length (Kms)

Nigahi OCP of NCL

Northern Coalfields Limited

MP

Excavation

167,357.74

NA

Overburden Khairagura OCP, BPA Area (Telangana )

The Singareni Collieries Company Limited

Telangana

Excavation

97,355.00

NA

Vijayawada-Machilipatnam

NHAI

AP

Road

74,070.0

64.61

Ghaghra Bridge to Varanasi

NHAI

UP

Road

67,434.00

58.62

Mahulia-Baharagora

NHAI

Jharkhand

Road

67,410.00

71.61

Chichra to Kharagpur

NHAI

West Bengal

Road

61,308.00

55.52

Zuari Bridge -(Package II )

MORTH

Goa

Bridge

54,540.00

-

Nalagampalli to AP/Karnataka Border

NHAI

AP

Road

50,310.00

47.69

Zuari Bridge -(Package I )

MORTH

Goa

Road

44,010.00

-

Zuari Bridge -(Package III )

MORTH

Goa

Road

41,760.00

-

Details of our top five EPC projects completed as of March 31, 2018:

Project Name

Contract price (Rs. in Lakhs)

Total length in Kms.

Schedule Date of Completion

Actual Completion Date

Early Completion days

Bonus Earned (Rs. in Lakhs)

NIGAHI OCP of NCL. (Singrauli, M.P.)

1,045.00

-

18-02-19

30-10-17

476.00

Mundargi - Hadagali -Harapanahalli

1,571.00

51.21

28-09-18

05-02-18

235.00

17.73

Hassan - Ramanathapura -Periyapatna

2,204.05

73.69

28-09-18

24-02-18

216.00

26.28

Hirekerur - Ranibennur

1,742.00

55.69

28-09-18

24-02-18

216.00

19.62

Vicky Factory

444.20

7.20

02-08-17

31-01-17

183.00


Awards:

Your Company has been conferred with the prestigious awards in the following Categories :

Nature of Awards

Category

7th Construction Week India Awards, 2017

1. Road Contractor of the Year

2. Infrastracture Company

7th EPC World Award

Roads and Highways

Further the Company has also been awarded the certificate of appreciation by the National Highways Authority of India (Ministry of Road Transport & Highways Govt. of India) towards the successful completion of Guna-Biaoro, NH-46 (old NH-3) Project well before the scheduled time.

Management Discussion and Analysis

The Management Discussion and Analysis for the year under review as stipulated under the SEBI (LODR) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

Particulars of loans made, guarantees and security provided and Investments

As per Companies Amendment Act, 2017, Section 186(11) of the Companies Act, 2013, except Section 186(1), nothing contained in section 186 of the Companies Act, 2013 shall apply to any loan made, any guarantee given or any security provided or any investment made by a Company engaged in the business of providing infrastructural facilities. Since the Company is an Infrastructure Company, the criteria of section 186 is not applicable to the Company except sub section 1 of section 186 of the Companies Act, 2013.

However, the details of loans, guarantees, and investments as required by the provisions of Section 186 of the Companies Act, 2013 and the rules made thereunder are set out in the Notes to the Standalone Financial Statements of the Company. (Please refer to Note No.3, 3 (b), 4, and 45 to the Standalone Financial Statements).

Consolidated Financial Statements

The Audited Consolidated Financial Statements for the Financial Year ended March 31, 2018, based on the financial statements received from Subsidiaries and Associates as approved by their respective Board of Directors, have been prepared in accordance with relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and forms an integral part of this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/Associate Companies is given in Form AOC-1 and forms an integral part of this Annual Report.

Corporate Governance Report

The Corporate Governance Report pursuant to the SEBI (LODR) Regulations, 2015 as applicable for the year under review is presented in a separate section forming part of this Annual Report.

Change in the nature of business, if any

There is no change in the nature of business of the Company during the year under review.

SHARE CAPITAL AND NON-CONVERTIBLE DEBENTURES

(a) Change in the capital structure of the Company

During the period under review, there is no change in the capital structure of your Company.

(b) Status of Shares

As the members are aware, the Company’s shares are compulsorily tradable in electronic form. Out of the total paid up capital representing 136,769,768 equity shares, the following equity shares of the Company are in dematerialised and physical form as on March 31, 2018:

Sr.

No

Capital Details

No. of shares

% of Total issued Capital

1

Held in dematerialised form in CDSL

3296951

2.41

2

Held in dematerialised form in NSDL

133472766

97.59

3.

Physical

51

0.00

Total no. of shares

136769768

100.00

Note: Pursuant to the amendment in Regulation 40 of SEBI (LODR) Regulations, 2015, dated June 8, 2018, has mandated that transfer of securities would be carried out in dematerialised form only. So it is requested to all the Members holding the shares in physical form to dematerialise the same on or before December 5, 2018

c) ISSUANCE AND ALLOTMENT OF THE NON-CONVERTIBLE DEBENTURES OF THE COMPANY

During the financial year 2017-18, your Company has issued and allotted 6,000 non-convertible debentures in the form of senior, secured, unlisted, rated, redeemable, rupee denominated, having face value of Rs.10,00,000/-(Rupees Ten lakhs only) each, issued at par aggregating to Rs. 600.00 Crores (Rupees Six Hundred Crores only) in dematerialized form on a private placement basis, bearing a coupon rate of 8.90% p.a. payable semi-annually every year. The said debentures on private placement basis have been issued in 13 series for door to door tenure of 5 years with moratorium of 2 years. The Company has appointed Axis Trustee Services Limited as the debenture trustee for the benefit of the debenture holders.

General Disclosures

The Board of 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 and rules made there under.

2. As per rule 4(4) the Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

3. As per rule 8(13) the Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued shares (including sweat equity shares) to employees of the Company under any scheme.

4. As per rule 12(9) the Companies (Share Capital and Debentures) Rules, 2014, the Company has not issued equity shares under the scheme of employee stock option.

5. As per rule 16(4) the Companies (Share Capital and Debentures) Rules, 2014, there are no voting rights exercised directly or indirectly by the employees in respect

of shares held by them. 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.

6. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

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

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

9. There is no amount of unpaid/unclaimed dividend and shares which are required to be transferred in IEPF (Investor Education and Protection Fund) as per the provisions of the Companies Act, 2013.

10. The details with respect to unpaid dividend for the financial year 2016-17 can be accessed at http:// dilipbuildcon.com/wps/wcm/connect/ef51bced-e83f-440f-9594-62191c77e8d3/Unpaid Dividend for th e year 2016-17.f?MOD=AJPERES&CVID=mcFJA5T& CVID=mcFJA5T&CVID=mcFJA5T&CVID=mcFCJqY&C VID=mcFCJqYf?MOD=AJPERES&CVID=mcFJA5T&CVI-mcFJA5T&CVID=mcFJA5T&CVID=mcFCJqY&CVID=mcFCJqY

11. The Company has received from the Registrar of Companies, Gwalior, the show cause Notice under rule 4(i) of the Companies (Restriction on Number of Layers) Rules, 2017 read with Section 2(87) of the Companies Act, 2013.

In respect of the same we have clarified the Registrar of Companies , Gwalior Our Company has just one layer of Subsidiary and there were no requirement to file CRL-1 since the layers of subsidiary is less than as specified in Sub-Rule (1), hence, there was no violation of Rule 4(i) of the Companies (Restriction on Number of Layers) Rules, 2017 read with Section 2(87) of the Companies Act, 2013 by the Company.

Reserves

As per Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014, the Company is required to create a Debenture Redemption Reserve for the purpose of redemption of debentures at the rate of 25% of the value of the outstanding debentures. The value of outstanding debentures being Rs. 600 Crores, at year ending March 2018, the debenture reserve of Rs.150.00 Crores has been created and the equivalent amount has been transferred from ‘Retained Earnings’ to ‘Debenture Redemption Reserve’.

Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the report.

During the period under review, the Company has signed an indicative term sheet with Chhatwal Group Trust or its Affiliates on August 24, 2017 with respect to divestment of its entire stake in 24 Subsidiaries. The Share acquisition cum shareholder agreements in respect of these 24 subsidiaries was entered into March 26, 2018. Details of transfer of shareholding of the Company in the subsidiaries are as under:

Sr. No

Name of Company

Date of Transfer

No. of shares transferred

% of transferred shares

Status of Company as on March 31, 2018

1

DBL Sitamau Suwasara Tollways Limited

11.04.2018

5424900

69.99

Associate

2

DBL Silwani Sultanganj Tollways Limited

11.04.2018

699900

69.99

Associate

3

DBL Mundi-Sanawad Tollways Limited

11.04.2018

699900

69.99

Associate

4

DBL Joara- Sailana Tollways Limited

11.04.2018

13999900

69.99

Associate

5

DBL Uchera Nagod Tollways Limited

11.04.2018

22399900

69.99

Associate

6

DBL Bankhlafata Dogawa Tollways Limited

11.04.2018

11199900

69.99

Associate

7

DBL Saradarpur Badnawar Tollways Limited

11.04.2018

174900

69.99

Associate

8

DBL Ashoknagar Vidisha Tollways Limited

11.04.2018

13971900

69.99

Associate

9

DBL Patan Rehli Tollways Limited

11.04.2018

49403

48.89

Subsidiary

10

DBL Nadiad Modasa Tollways Limited

02.05.2018

20058400

69.99

Associate

The Company have obtained approval of the members by way of special resolution on September 11, 2017 for aforesaid dis investment in the Subsidiary Companies. Apart from the above said matter, there are no material changes or commitments affecting the financial position or business activities of the Company between the end of the Financial Year and the date of this Report.

Details in respect of adequacy of Internal Financial Controls with reference to the Financial Statements.

The Company has designed and implemented a process driven framework for Internal Financial Controls (“IFC”) within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013 read with Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014, the Board is of the opinion that the Company has sound Internal Financial Control commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations.

The Company has appointed independent audit firm as Internal Auditors to observe the Internal Control system.

The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Vigil Mechanism Policy, Policy to determine Material Subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control system and suggests improvements to strengthen the same. The Company has robust management information system, which is an integral part of the control mechanism.

Further, the Company has implemented the SAP HANA - ERP for it’s common database, central repository, Real-time Procure to Pay, strong Financial Tracking, Supply Chain, Fleet Movement & Maintenance, Project Planning, Execution, Monitoring & Control, Client Billing, HR for Payroll & Resource Management, Production of processed material like WMM, HMP, Concrete, etc, Document Management System for Statutory requirement. SAP has given us the integrated Business Operations Platform covering all our functions & departments to execute our Projects and provided the tight checks & control in Procurement, Payment, Billing, Finance & accounting. This automation & error free environment has resulted the accuracy & efficiency in our work. This has totally removed the duplicity of work and data. SAP ERP will incorporate an integrated framework for managing risks and internal controls. The internal financial controls will be documented, embedded and digitized in the business processes.

The details of investments made in the subsidiary companies during the year and performance of the subsidiary companies are as under:

(a) Shares subscribed/acquired during the year

Name of the Company

Type of Shares

No. of shares

Total amount of Investment (Rs. in Lakhs)

% of holding acquired

DBL Mahagaon Yavatmal Highways Private Limited

Equity

*1,00,000

10.00

100.00 %

DBL Chandikhole Bhadrak Highways Private Limited

Equity

*50,000

5.00

100.00 %

DBL-VPR Mining Private Limited

Equity

7,400

0.74

74 .00%

DBL Hassan Periyapatna Tollways Limited

Equity

19,992

96.86

100.00 %

DBL Hata Dargawon Tollways Limited

Equity

3,811

172.90

100.00 %

DBL Hirekerur Ranibennur Tollways Limited

Equity

32103

800.02

100.00 %

Jalpa Devi Tollways Limited

Equity

19,28,444

10983.01

100.00 %

DBL Lucknow Sultanpur Highways Limited

Equity

15,99,611

7065.00

100.00 %

DBL Mundargi Harapanahalli Tollways Limited

Equity

6,668

279.99

100.00 %

DBL Patan Rehli Tollways Limited

Equity

9,324

564.81

100.00 %

DBL Wardha Butibori Highways Private Limited

Equity

*100,000

10.00

100.00%

DBL Yavatmal Wardha Highways Private Limited

Equity

*100,000

10.00

100.00%

*includes equity shares held by nominees on behalf of Dilip Buildcon Limited, and the Company is having beneficial ownership on such shares.

(b) Subsidiary Companies

During the year under review, Seven (7) new Companies have been incorporated as subsidiaries of the Company, out of which six (6) are wholly owned subsidiaries. The details are as follows:

Sr. No

Name of Subsidiary

Date of Incorporation/ becoming subsidiary

Status

1

DBL Yavatmal Wardha Highways Private Limited

21.04.2017

Wholly Owned Subsidiary

2

DBL Mahagaon Yavatmal Highways Private Limited

24.04.2017

Wholly Owned Subsidiary

3.

DBL Wardha Butibori Highways Private Limited

24.04.2017

Wholly Owned Subsidiary

4.

DBL- VPR Mining Private Limited

02.01.2018

Subsidiary

5.

DBL Chandikhole Bhadrak Highways Private Limited

06.02.2018

Wholly Owned Subsidiary

6

DBL Bangalore Nidagatta Highways Private Limited

23.03.2018

Wholly Owned Subsidiary

7

DBL Anandapuram Anakapalli Highways Private Limited

26.03.2018

Wholly Owned Subsidiary

The Company has also promoted the following SPVs as its Wholly owned Subsidiaries after the date of the Balance Sheet till the date of this report:

Sr. No.

Name of Subsidiary

Date of Incorporation

Status

1

DBL Gorhar Khairatunda Highways Pvt. Ltd.

04.04.2018

Wholly Owned Subsidiary

2

DBL Nidagatta Mysore Highways Pvt. Ltd.

09.04.2018

Wholly Owned Subsidiary

3.

DBL Rewa Sidhi Highways Pvt. Ltd.

11.04.2018

Wholly Owned Subsidiary

4.

DBL Byrapura Challakere Highways Pvt. Ltd.

11.04.2018

Wholly Owned Subsidiary

5.

DBL Mangloor Highways Pvt. Ltd.

11.04.2018

Wholly Owned Subsidiary

6

DBL Sangli Borgaon Highways Pvt. Ltd.

11.04.2018

Wholly Owned Subsidiary

7

DBL Borgaon Watambare Highways Pvt. Ltd.

11.04.2018

Wholly Owned Subsidiary

8

DBL Mangalwedha Solapur Highways Pvt. Ltd.

11.04.2018

Wholly Owned Subsidiary

9

DBL Bellary Byrapura Highways Pvt. Ltd.

10.07.2018

Wholly Owned Subsidiary

The Policy for determining material subsidiary company, as approved, can be accessed on the Company’s website at the link http://dilipbuildcon.com/wps/wcm/connect/84c8f6b5-a7cc-4418-b705-ddb816eb4d04/Policy on Material Subsidiaries. pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-84c8f6b5-a7cc-4418-b705-ddb816eb4d04-m0w-j8y .

The Company does not have any material subsidiary as on March 31, 2018.

(c) Statement of the Subsidiaries & Associates

As on March 31, 2018, the Company has 30 Indian Subsidiaries & Associates. There has been no change in the nature of business activities of any of the subsidiaries/Associates.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a Consolidated Financial Statements of the Company and all its Subsidiary /Associate Companies, which is forming part of the Annual Report. As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the Subsidiary/Associates Companies is prepared in Form AOC-1 and the same is annexed to the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Board’s Report of the Company, containing therein its standalone and consolidated financial statements has been placed on the website of the Company, www.dilipbuildcon. com. Further, as per fourth proviso of the said section, Audited Financial Statements of each of the Subsidiary/Associate Companies have also been placed on the website of the Company, www.dilipbuildcon.com. Shareholders interested in obtaining a copy of the Audited Financial Statements of the Subsidiary/Associate companies may write to the Company Secretary at the Company’s Registered Office.

(d) Performance and financial position of each of the Subsidiaries/Associates included in the consolidated financial statement

The Share acquisition cum shareholder agreement in respect of these 24 subsidiaries were entered into March 26, 2018.

i. DBL Ashoknagar-Vidisha Tollways Limited (“DAVTL”)

DAVTL is involved in the business of development, operation and maintenance of the two laning with paved shoulder of Ashoknagar-Vidisha Major District Road on BOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DAVTL, for transfer of 100% shares of the Company held in DAVTL. As per the terms of the said agreement, the Company has transferred 13971900 Equity Shares (69.99%) of the Company held in DAVTL to Shrem Roadways Private Limited and the status of DAVTL has been changed from Wholly owned Subsidiary to Associate Company.

ii. DBL Bankhlafata - Dogawa Tollways Limited (“DBDTL”)

DBDTL is involved in the development of Bankhlafata-Dogawa- via-Borawa-Sarvardevala Road, Punasa-Mundi-Singhaji (Thermal Power Plant) Road, Singhaji Bridge Approach Road and Mundi- Devala-Khutala-Atoot NVDA Road, on DBFOT (annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DBDTL, for transfer of 100% shares of the Company held in DBDTL. As per the terms of the said agreement, the Company has transferred 11199900 Equity Shares (69.99 %) of the Company held in DBDTL to Shrem Roadways Private Limited and the status of DBDTL has been changed from Wholly owned Subsidiary to Associate Company.

During the period under review, DBDTL has achieved Turnover of Rs. 1576.87 Lakhs and earned Net Profit after Tax of Rs. 197.19 Lakhs.

iii. DBL Betul - Sarni Tollways Limited (“DBSTL”)

DBSTL is involved in the business of developing Betul-Sarni- Tikadhana-Junnardeo-Parasia Road being developed by MPRDC on BOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DBSTL, for transfer of 100 % shares of the Company held in DBSTL. The Company (DBL) has not yet transferred any shares to Shrem Roadways and currently the status of DBSTL is wholly owned subsidiary of the Company.

During the period under review, DBSTL has achieved Turnover of Rs. 3240.52 Lakhs and has incurred Net Loss after Tax of Rs. 209.40 Lakhs.

iv. DBL Jaora - Sailana Tollways Limited (“DJSTL”)

DJSTL is involved in the development of Jaora-Piploda- Jalandharkheda & Piploda-Sailana Road, Raipuriya-Petlabad- Bamania Road, Jawad Road to Khoh Road and Soyat-Pidawa Road on BOT (annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DJSTL, for transfer of 100% shares of the Company held in DJSTL. As per the terms of the said agreement the Company has transferred 13999900 Equity Shares (69.99%) of the Company held in DJSTL to Shrem Roadways Private Limited and the status of DJSTL has been changed from Wholly owned Subsidiary to Associate Company.

During the period under review, DJSTL has achieved Turnover of Rs. 2011.37 Lakhs and earned Net Profit after Tax of Rs. 470.11 Lakhs.

v. DBL Mundi - Sanawad Tollways Limited (“DMSTL”)

DMSTL is involved in the development (two-laning) of Mundi- Punasa-Sulgaon-Sanawad Road (Major District Road) on BOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DMSTL, for transfer of 100 % shares of the Company held in DMSTL. As per the terms of the said agreement, the Company has transferred 699900 Equity Shares (69.99%) of the Company held in DMSTL to Shrem Roadways Private Limited and the status of DMSTL has been changed from Wholly owned Subsidiary to Associate Company.

During the period under review, DMSTL has achieved Turnover of Rs.1374.23 Lakhs and incurred Net Loss after Tax of Rs. 187.23 Lakhs.

vi. DBL Nadiad Modasa Tollways Limited (“DNMTL”)

DNMTL is involved in developing a part of the existing Nadiad to Modasa Road (SH-59) to two lanes (with paved shoulder) highway in the state of Gujarat. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DNMTL, for transfer of 74 % shares of the Company held in DNMTL and remaining 26 % shares shall be hold by the Company in DNMTL in accordance with the concession agreement.

As per the terms of the said agreement, the Company has transferred 20058400 Equity Shares (69.99%) of the Company held in DNMTL to Shrem Roadways Private Limited and the status of DNMTL has been changed from Wholly owned Subsidiary to Associate Company.

vii. DBL Sardarpur - Badnawar Tollways Limited (“DSBTL”)

DSBTL is involved in the development of Sardarpur-Badnawar Road on a Design, Build, Finance, Operate and Transfer (DBFOT) on toll plus annuity basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e.

Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DSBTL, for transfer of 100 % shares of the Company held in DSBTL. As per the terms of the said agreement, the Company has transferred 174900 Equity Shares (69.99%) of the Company held in DSBTL to Shrem Roadways Private Limited and the status of DSBTL has been changed from Wholly owned Subsidiary to Associate Company.

During the period under review, DSBTL has achieved Turnover of Rs. 606.22 Lakhs and earned Net Profit after Tax of Rs. 93.34 Lakhs.

viii. DBL Silwani - Sultanganj Tollways Limited (“DSSTL”)

DSSTL is involved in the development (two-laning) of Silwani- Sultanganj-Jaisinghnagar-Sagar Road section on a DBFOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DSSTL, for transfer of 100 % shares of the Company held in DSSTL. As per the terms of the said agreement, the Company has transferred 699900 Equity Shares (69.99%) of the Company held in DSSTL to Shrem Roadways Private Limited and the status of DSSTL has been changed from Wholly owned Subsidiary to Associate Company.

During the period under review, DSSTL has achieved Turnover of Rs. 1657.04 Lakhs and earned Net Profit after Tax of Rs. 827.05 Lakhs.

ix. DBL Sitamau- Suwasara Tollways Limited (“DBLSSTL”)

DBLSSTL is involved in the development (two-laning) of Sitamau- Basai-Suwasara Road (Major District Road) on BOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DBLSSTL, for transfer of 100 % shares of the Company held in DBLSSTL. As per the terms of the said agreement, the Company has transferred 5424900 Equity Shares (69.99%) of the Company held in DBLSSTL to Shrem Roadways Private Limited and the status of DBLSSTL has been changed from Wholly owned Subsidiary to Associate Company.

During the period under review, DBLSSTL has achieved Turnover of Rs. 816.46 Lakhs and earned Net Profit after Tax of Rs. 170.90 Lakhs.

x. DBL Tikamgarh - Nowgaon Tollways Limited (“DTNTL”)

DTNTL is involved in the development of Tikamgarh (Dhajrai)- Jatara-Palera-Nowgaon Road being developed by MPRDC on DBFOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DTNTL, for transfer of 100% shares of the Company held in DTNTL. The Company (DBL) has not yet transferred any shares to Shrem Roadways Private Limited and currently the status of DTNTL is Wholly owned Subsidiary of the Company.

During the period under review, DTNTL has achieved Turnover of Rs. 1749.79 Lakhs and earned Net Profit after Tax of Rs. 387.98 Lakhs.

xi. DBL Uchera - Nagod Tollways Limited (“DUNTL”)

DUNTL is involved in the business of development of Uchera- Nagod-Singhpur-Kalinjher Road on BOT (toll plus annuity) basis in the state of Madhya Pradesh. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DUNTL, for transfer of 100 % shares of the Company held in DUNTL. As per the terms of the said agreement, the Company has transferred 22399900 Equity Shares (69.99%) of the Company held in DUNTL to Shrem Roadways Private Limited and the status of DUNTL has been changed from Wholly owned Subsidiary to Associate Company.

xii. Suryavanshi Infrastructure Private Limited (“SIPL”)

SIPL is involved in the business of undertaking reconstruction, strengthening, widening and rehabilitation and operation and maintenance of Mandsaur-Sitamau Road in the state of Madhya Pradesh on a BOT basis . The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and SIPL, for transfer of 100 % shares of the Company held in SIPL. The Company (DBL) has not yet transferred any shares to Shrem Roadways Private Limited and currently the status of SIPL is Wholly owned Subsidiary of the Company .

During the period under review, SIPL has achieved Turnover of Rs. 409.57 Lakhs and earned Net Profit after Tax of Rs. 165.15 Lakhs.

xiii. DBL Hata-Dargawon Tollways Limited (“DHDTL”)

DHDTL is involved in the business of undertaking the project of strengthening-widening, maintaining and operating of Hata- Fatehput-Rajpura-Silapuri-Bajna-Dargawon (SH-48) Road on BOT (toll plus annuity) basis. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DHDTL for transfer of 100 % shares of the Company held in DHDTL. The Company (DBL) has not yet transferred any shares to Shrem Roadways Private Limited held in DHDTL and currently the status of DHDTL is wholly owned subsidiary of the Company.

During the period under review, DHDTL has achieved Turnover of Rs. 1288.79 Lakhs and has incurred Net Loss after Tax of Rs. 244.93 Lakhs.

xiv. DBL Patan-Rehli Tollways Limited (“DPRTL”)

DPRTL is involved in the business of undertaking the project of Development of Patan-Tendukheda-Rehli (SH-15) Road on BOT (toll plus annuity) basis. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Roadways Private Limited and DPRTL for transfer of 100 % shares of the Company held in DPRTL. As per the terms of the said agreement, the Company has transferred 49403 Equity Shares (48.89%) of the Company held in DPRTL to Shrem Roadways Private Limited and the status of the DPRTL has been changed from Wholly owned Subsidiary to Subsidiary Company.

During the period under review, DPRTL has achieved Turnover of Rs. 4739.17 Lakhs and earned Net Profit after Tax of Rs. 146.22 Lakhs.

xv. Jalpa Devi Tollways Limited (“JDTL”)

JDTL is involved in the business of undertaking a project “four laning of Guna-Biaora Section of NH-3 from km 332.100 to km 426.100 in the state of Madhya Pradesh under NHDP-IV to be executed in BOT (toll) mode on DBFOT basis. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on July 18, 2018 with Shrem Tollways Private Limited and JDTL, for transfer of 100 % shares of the Company held in JDTL. The Company (DBL) has not yet transferred any shares to subsidiary company of Shrem Roadways held in JDTL and currently the status of JDTL is wholly owned subsidiary of the Company.

During the period under review, JDTL has achieved Turnover of Rs. 43881.76 Lakhs and earned Net Profit after Tax of Rs. 154.91 Lakhs.

xvi. DBL Mundargi Harapanahalli Tollways Limited (“DMHTL”)

DMHTL is involved in the business of undertaking the project design, build, finance, operate, maintain and transfer of Existing State Highway named Mundargi-Hadagali-Harapanahalli on DBFOMT annuity basis. The Company (DBL) has entered into tripartite agreement i.e. Amended and Restated Shareholder agreement on March 26, 2018 with Shrem Roadways Private Limited and DMHTL for transfer of 74 % shares of the Company held in DMHTL and remaining 26 % shares shall be held by the Company in DMHTL in accordance with the concession agreement. The Company (DBL) has not yet transferred any shares to Shrem Roadways Private Limited held in DMHTL and currently the status of DMHTL is Wholly owned Subsidiary of the Company.

xvii. DBL Hassan Periyapatna Tollways Limited (“DHPTL”)

DHPTL is involved in the business of undertaking the project “design, build, finance, operate, maintain and transfer of the existing State highway, Hassan-Ramanathapura-Periyapatna in the state of Karnataka on a DBFOMT annuity basis.” The Company (DBL) has entered into tripartite agreement i.e. Amended and Restated Shareholder agreement on March 26, 2018 with Shrem Roadways Private Limited and DHPTL for transfer of 74 % shares of the Company held in DHPTL and remaining 26% shares shall be held by the Company in DHPTL in accordance with the concession agreement. The Company (DBL) has not yet transferred any shares to Shrem Roadways Private Limited held in DHPTL and currently the status of DHPTL is Wholly owned Subsidiary of the Company.

During the period under review, DHPTL has achieved Turnover of Rs. 19800.24 Lakhs and incurred Net Loss after Tax of Rs. 2102.03 Lakhs.

xviii. DBL Hirekerur RanibennurTollways Limited (“DHRTL”)

DHRTL is involved in the business of undertaking the project “design, build, finance, operate, maintain and transfer of existing state highway Hirekerur-Ranibennur in the state of Karnataka on DBFOMT Annuity basis.” The Company (DBL) has entered into tripartite agreement i.e. Amended and Restated Shareholder agreement on March 26, 2018 with Shrem Roadways Private Limited and DHRTL, for transfer of 74 % shares of the Company held in DHRTL and remaining 26% shares shall be held by the Company in DHRTL in accordance with the concession agreement. The Company (DBL) has not yet transferred any shares to Shrem Roadways Private Limited held in DHRTL and currently the status of DHRTL is Wholly owned Subsidiary of the Company.

During the period under review, DHRTL has achieved Turnover of Rs. 16666.60 Lakhs and incurred Net Loss after Tax of Rs. 1593.86 Lakhs.

xix. DBL Lucknow Sultanpur Highways Limited (“DLSHL”)

DLSHL is a Public Limited Company incorporated as a special purpose vehicle on September 9, 2016 for the purpose of undertaking the project “Four-Laning of the Lucknow - Sultanpur Section of NH-56 in the State of Uttar Pradesh on a Hybrid Annuity Basis.” The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Infraventure Private Limited and DLSHL. The Company after receiving the no objection certificates from Government Authorities and Senior lenders will immediately transfer 49% shares to Shrem Infraventure Private Limited and remaining 51% shares will be transferred to Shrem Infraventure Private Limited after the expiry of two years from the achievement of commercial operation. Currently the Company (DBL) has not yet transferred any shares to Shrem Infraventure Private Limited held in DLSHL and the status of DLSHL is Wholly owned Subsidiary of the Company.

During the period under review, DLSHL has achieved Turnover of Rs. 82991.98 Lakhs and incurred Net Loss after Tax of Rs. 1934.60 Lakhs.

xx DBL Kalmath Zarap Highways Limited (“DKZHL”)

DKZHL is a Public Limited Company incorporated as a special purpose vehicle on December 13, 2016 for the purpose of project “Rehabilitation and up-gradation of NH-66 (Kalmath to Zarap section) to four-lane with paved shoulder in the state of Maharashtra on Hybrid Annuity Mode”. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Infraventure Private Limited and DKZHL. The Company after receiving the no objection certificates from Government Authorities and Senior lenders will immediately transfer 49% shares to Shrem Infraventure Private Limited and remaining 51% shares will be transferred to Shrem Infraventure Private Limited after the expiry of two years from the achievement of commercial operation. Currently, the Company (DBL) has not yet transferred any shares to Shrem Infraventure Private Limited held in DKZHL and the status of DKZHL is Wholly owned Subsidiary of the Company.

During the period under review, DKZHL has achieved Turnover of Rs. 9608.86 Lakhs and incurred Net Loss after Tax of Rs. 200.20 Lakhs.

xxi Jalpa Devi Engineering Private Limited (“JDEPL”)

JDEPL is a Private Limited Company incorporated on March 9, 2017 as wholly owned subsidiary of Dilip Buildcon Limited to carry on the business of manufacturing, producing, casting, recycling, upcycling, assembling, reconstructing, engineering and other related activities of all kinds of machineries, equipments, tools etc. The Company is yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, the Company has incurred Loss of Rs. 41.39 Lakhs during the period under review.

xxii. DBL Tuljapur Ausa Highways Limited (“DTAHL”)

DTAHL is a Public Limited Company incorporated as special purpose vehicle on March 24, 2017 for the purpose of project “Four Laning of Tuljapur-Ausa (including Tuljapur Bypass) Section of NH-361 on Hybrid Annuity Mode in the State of Maharashtra”. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Infraventure Private Limited and DTAHL. Currently the Company holds 51% shares in DTAHL and the Company after receiving the no objection certificates /necessary approvals from Government Authorities and Senior lenders and after the expiry of two years from the achievement of commercial operation will immediately transfer the remaining 51% shares to Shrem Infraventure Private Limited. The Company (DBL) has not yet transferred any shares to Shrem Infraventure Private Limited held in DTAHL and the status of DTAHL is the Subsidiary of the Company.

During the period under review, DTAHL has achieved Turnover of Rs. 18603.79 Lakhs and incurred Net Loss after Tax of Rs. 521.75 Lakhs.

xxiii. Bhavya Infra & Systems Private Limited (“BISPL”)

BISPL is a Private Limited Company is engaged in the business of Job work, Repair & installation of machinery & equipment, motor vehicles and other related activity. BISPL is a wholly owned subsidiary of Dilip Buildcon Limited . During the period under review, the Company has achieved Turnoverof Rs. 55.12 Lakhs and has incurred the Net Loss after tax of Rs.19.02 Lakhs.

xxiv. DBL Yavatmal Wardha Highways Private Limited (DYWHPL)

DYWHPL incorporated as special purpose vehicle on April 21, 2017 for the purpose of project “Four Laning of Yavatmal to Wardha (Package-III) section of NH-361 from Km 400.575 to Km 465.500 (design length 64.925 Km) in the state of Maharashtra under NHDP Phase -IV on Hybrid Annuity mode”. The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Infraventure Private Limited and DYWHPL. The Company after receiving the no objection certificates from Government Authorities and Senior lenders will immediately transfer 49% shares to Shrem Infraventure Private Limited and remaining 51% shares will be transferred to Shrem Infraventure Private Limited after the expiry of two years from the achievement of commercial operation. Currently the Company (DBL) has not yet transferred any shares to Shrem Infraventure Private Limited held in DYWHPL and the status of DYWHPL is Wholly owned Subsidiary of the Company.

During the period under review, DYWHPL has achieved Turnover of Rs. 11583.10 Lakhs and has incurred the Net Loss after Tax of Rs. 429.38 Lakhs.

xxv. DBL Mahagaon Yavatmal Highways Private Limited (DMYHPL)

DMYHPL incorporated as special purpose vehicle on April 24, 2017 for the purpose of project “Four Laning of Mahagaon to Yavatmal (Package-II) section of NH-361 from Km 320.580 to Km 400.575 (design length 80.195) in the state of Maharashtra under NHDP Phase -IV on Hybrid Annuity mode.” The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Infraventure Private Limited and DMYHPL. The Company after receiving the no objection certificates from Government Authorities and Senior lenders will immediately transfer 49% shares to Shrem Infraventure Private Limited and remaining 51% shares will be transferred to Shrem Infraventure Private Limited after the expiry of two years from the achievement of commercial operation. Currently the Company (DBL) has not yet transferred any shares to Shrem Infraventure Private Limited held in DMYHPL and the status of DMYHPL is Wholly owned Subsidiary of the company.

During the period under review, DMYHPL has achieved Turnover of Rs. 5217.19 Lakhs and has incurred the Net Loss after Tax of Rs. 596.82 Lakhs.

xxvi. DBL Wardha Butibori Highways Private Limited (DWBHPL)

DWBHPL incorporated as special purpose vehicle on April 24, 2017 for the purpose of project “Four Laning of Wardha-Butibori Section of NH-361 from km 465.500 to km 524.690 (design length 59.190 km) under NH (O) in the state of Maharashtra on Hybrid Annuity mode.” The Company (DBL) has entered into tripartite agreement i.e. Share acquisition cum shareholder agreement, on March 26, 2018 with Shrem Infraventure Private Limited and DWBHPL. The Company after receiving the no objection certificates from Government Authorities and Senior lenders will immediately transfer 49% shares to Shrem Infraventure Private Limited and remaining 51% shares will be transferred to Shrem Infraventure Private Limited after the expiry of two years from the achievement of commercial operation. Currently the Company (DBL) has not yet transferred any shares to Shrem Infraventure Private Limited held in DWBHPL and the status of DWBHPL is Wholly owned Subsidiary of the Company.

During the period under review, DWBHPL has achieved Turnover of Rs. 15529.47 Lakhs and has incurred Net Loss after Tax of Rs. 429.12 Lakhs.

xxvii. DBL-VPR Mining Private Limited (DVMPL)

DVMPL incorporated as special purpose vehicle on January 2, 2018 to carry out the business of prospecting, exploring, operating and working on mines & quarries and other mining activities in India and elsewhere. The Company is yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, the Company has incurred Net Loss of Rs. 0.11 Lakhs during the period under review.

xxviii. DBL Chandikhole Bhadrak Highways Private Limited (DCBHPL)

DCBHPL incorporated as special purpose vehicle on February 6, 2018 for the purpose of project “Rehabilitation and Up-gradation of Six-Laning of Chandikhole-Bhadrak Section of NH-5 (New NH-16) from km 62.000 to km 136.500 in the State of Odisha to be executed as Hybrid Annuity Mode under NHDP Phase V.” DCBHPLis yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, DCBHPL has incurred Net Loss of Rs. 0.09 Lakhs during the period under review.

xxix. DBL Anandapuram Anakapalli Highways Private Limited (DAAHPL)

DAAHPL incorporated as special purpose vehicle on March 26, 2018 for the purpose of project “Six Laning of Anandapuram-Pendurthi-Anakapalli section of NH-5 (New NH-16) from Km. 681.000 (Existing Km. 681.000) to Km. 731.780 (Existing 742.400) (Design Length= 50.78 Km) in the State of Andhra Pradesh under Bharatmala Pariyojna on Hybrid Annuity Mode.” The Company is yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, the Company has incurred Net Loss of Rs. 0.14 Lakhs during the period under review.

xxx. DBL Bangalore Nidagatta Highways Private Limited (DBNHPL)

DBNHPL incorporated as special purpose vehicle on March 23, 2018 for the purpose of project “Six-Laning of Bangalore-Nidagatta, km 18.000 to km 74.200 of NH-275 in State of Karnataka to be executed on Hybrid Annuity Mode.” DBNHPL is yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, DBNHPL has incurred Net Loss of Rs. 0.09 Lakhs during the period under review.

Auditors and Auditors’ Report

(a) Statutory Auditors & their Reports

M/s MSG & Associates, Chartered Accountants, Bhopal (ICAI Firm Registration No. 010254C) and M/s Mukund M. Chitale & Co., Chartered Accountants, Mumbai (ICAI Firm Registration No. 106655W) were appointed as the Joint Statutory Auditors of the Company for a term of 5 years at the Annual General Meeting held on September 11, 2017 and September 25, 2014, respectively, subject to the ratification of shareholders at every Annual General Meeting of the Company, on such remuneration as may be determined by the Board. Pursuant to notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi, requirement to place the matter relating ratification to appointment of Auditors by members at every Annual General Meeting is omitted.

The Company has obtained a certificate for their independence and eligibility for their appointment as Statutory Auditors and the same are within the limits as specified in section 141 of the Companies Act, 2013 and have also confirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments.

The Auditors’ Report does not contain any qualification, reservation, adverse remark or disclaimer. Further, no fraud has been reported by the Auditors to the Audit Committee or the Board during the period under review.

(b) Cost Auditors and their Report

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of Cost Records every year. The Board of Directors, on the recommendation of Audit Committee, has appointed M/s Yogesh Chourasia & Associates, Cost Accountants (ICWAI Firm Registration No. 000271), as Cost Auditors of the Company for conducting the Cost Audit of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking members’ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

The Company has already filed the Cost Audit Report for the Financial Year 2016-17 with the Central Government. The Cost Audit Report for the Financial Year 2016-17 does not contain any qualification, reservation or adverse remark. The Company has obtained Cost Audit Report for the year 2017-18 and is in process to file the same with the Central Government.

(c) Secretarial Auditors

As per the provisions of Section 204 of the Companies Act, 2013, the Board has appointed M/s Piyush Bindal & Associates, Practicing Company Secretaries (C.P. No: 7442) as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2018-19.

Secretarial Audit Report for the Financial Year 2017-18 issued by M/s Piyush Bindal & Associates, Practicing Company Secretaries in Form MR-3 is annexed to the Board’s Report as Annexure 2 which is self-explanatory and do not call for any further explanation of the Board.

(d) Internal Auditors

As per the provisions of Section 138 of the Companies Act, 2013, the Board of Directors had appointed M/s Adalatwale and Bhagwat, Chartered Accountants, Bhopal (ICAI Firm Registration No. 008398C), as Internal Auditor to conduct internal audit of the Company for the Financial Year 2017-18.

The Internal Audit Report for the Financial Year 201718 issued by M/s Adalatwale and Bhagwat, Chartered Accountants, Bhopal is submitted to the Board which is self-explanatory and do not call for any further explanation of the Board.

Further, on the recommendation of audit committee, the Board of Directors of the Company has approved the appointment of aforesaid audit firm as internal auditors for the Financial Year 2018-19.

Extract of the Annual return

The Extract of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is annexed to the Board’s Report as Annexure 3.

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

The particulars as required to be furnished for the year 201718 are under:

Human Resources Development

The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. DBL’s people centric focus providing an open work environment, fostering continuous improvement and development has helped several employees realize their career aspirations during the year.

The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and a critical pillar to support the organization’s growth and its sustainability in the long run.

Company’s Health and Safety Policy commits to comply with applicable legal and other requirements connected with occupational Health, Safety and Environment matters and provide a healthy and safe work environment to all employees of the Company.

Board of Directors and Key Managerial Personnel

(a) Key Managerial Personnel

- Pursuant to the provisions of section 203 of the Companies Act, 2013 and the rules made their under, following are the Key Managerial Personnel of the Company:

Sr. No

Name of Director

Designation

Date of Appointment

Date of Resignation

DIN/PAN

1

Mr. Dilip Suryavanshi

Chairman and Managing Director

12.06.2006

-

00039944

2

Mrs. Seema Suryavanshi

Whole-time Director

12.06.2006

-

00039946

3

Mr. Devendra Jain

Whole-time Director & CEO

01.04.2009

-

02374610

4

#Mr. Vaibhav Rawat

Chief Financial Officer

01.04.2014

15.05.2018

AFNPR3499G

5

*Mr. Raja Ghosh

Chief Financial Officer

29.05.2018

-

AEAPG5583N

6

Mr. Abhishek Shrivastava

Company Secretary & Compliance Officer

23.01.2015

-

AUXPS3081Q

#Mr. Vaibhav Rawat has resigned from the post of Chief Financial Officer on May 15, 2018.

*Mr. Raja Ghosh (General Manager-Accounts and Finance) has been appointed as Chief Financial Officer w.e.f. May 29, 2018 and designated as the Key Managerial Personnel of the Company.

- As the existing tenure of Mr. Dilip Suryavanshi, Chairman and Managing Director of the Company will expire on August 25, 2018 and considering vast experience he carries and valuable services rendered by him for the growth of the Company, the Board of Directors of the Company (“Board”), at its meeting held on May 29, 2018 has, pursuant to the recommendation of Nomination and Remuneration Committee and subject to the approval of members in the Annual General Meeting , proposed for the re-appointment of Mr. Dilip Suryavanshi (DIN: 00039944) as the Managing Director of the Company, for a further term/period of 3 (three) years w.e.f. August 26, 2018, on the remuneration and perquisites payable to him and other terms and conditions as set out in item No. 11 accompanying Notice of Annual General Meeting and he shall not be liable to retire by rotation.

- As the existing tenure of Mrs. Seema Suryavanshi, Wholetime Director of the Company will expire on August 25, 2018 and considering vast experience she carries and valuable services rendered by her for the growth of the Company, the Board of Directors of the Company (“Board”), at its meeting held on May 29, 2018 has, pursuant to the recommendation of Nomination and Remuneration Committee and subject to the approval of members in the Annual General Meeting, proposed for the re-appointment of Mrs. Seema Suryavanshi (DIN: 00039946) as a Whole-time Director of the Company, for a further term/period of 3 (three) years w.e.f. August 26, 2018, on the remuneration and perquisites payable to her and other terms and conditions as set out in item No. 12 accompanying Notice of Annual General Meeting and she shall be liable to retire by rotation.

- As the existing tenure of Mr. Devendra Jain, Whole-time Director of the Company will expire on August 25, 2018 and considering vast experience he carries and valuable services rendered by him for the growth of the Company, the Board of Directors of the Company (“Board”), at its meeting held on May 29, 2018 has, pursuant to the recommendation of Nomination and Remuneration Committee and subject to the approval of members in the Annual General Meeting , proposed for the re-appointment of Mr. Devendra Jain (DIN: 02374610) as a Whole-time Director of the Company, for a further term/period of 3 (three) years w.e.f. August 26, 2018, on the remuneration and perquisites payable to him and other terms and conditions as set out in item No. 13 accompanying Notice of Annual General Meeting and he shall be liable to retire by rotation.

- Resignation of Chief Financial Officer

There is no change in the Key Managerial Personnel during the year under review, however the following changes took place after the review period till the date of this Board Report:

Mr. Vaibhav Rawat, Chief Financial officer of the Company has resigned with effect from May 15, 2018, due to his personal commitments & other assignments. The Board places on record its sincere appreciation and gratitude for contributions made by him during his tenure as Chief Financial Officer of the Company. Mr. Raja Ghosh (the existing General Manager-Accounts and Finance) has been appointed as Chief Financial Officer w.e.f. May 29, 2018 and designated as the Key Managerial Personnel of the Company.

(b) Directors seeking appointment/re-appointment

- In terms of the provisions of the Companies Act, 2013, Mr. Devendra Jain (DIN: 02374610) Whole-time Director & Chief Executive Officer of the Company retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

- During the year under review, in terms of the provisions of the Companies Act, 2013, the Company appointed Mr. Malay Mukherjee (DIN: 02272425) as an Additional Director under the category of an Independent Director of the Company with effect from February 13, 2018 for a term of 5 years. In terms of Section 161 of the Companies Act, 2013, Mr. Malay Mukherjee holds office upto the ensuing Annual General Meeting of the Company. Accordingly, the Board recommends the resolution in relation to the appointment of Mr. Malay Mukherjee as an Independent Director, for the approval by the shareholders of the Company.

Mr. Malay Mukherjee is not disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013 and has given his consent to act as a Director (in the Category of an independent Director). Further the Company has also received declaration from Mr. Malay Mukherjee that he meets the criteria of independence as prescribed both under Section 149(6) of the Act and under the SEBI (LODR) Regulations, 2015. He is proposed for the confirmation of his appointment as an Independent Director as stated in the notice of the AGM.

- Mr. Aditya Vijay Singh (DIN: 03585519) was appointed as an Independent Director of the Company and he holds office as an Independent Director of the Company up to March 31, 2019 (“first term”). Based on the performance evaluation and recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company considered his experience and contribution made by him during his tenure, the continued association of Mr. Aditya Vijay Singh would be beneficial to the Company and it is desirable to continue to avail his services as an Independent Director. Accordingly, it is proposed to re-appoint Mr. Aditya Vijay Singh as an Independent Director of the Company, not liable to retire by rotation, for a second consecutive term of 5 (five) years on the Board of the Company w.e.f. April 01, 2019. He is proposed for the confirmation of his appointment for a second term as an Independent Director as stated in the notice of the AGM by special resolution.

Further Mr. Aditya Vijay Singh will attain the age of 75 years on October 23, 2019, and in view of the SEBI (LODR) (Amendment ) Regulations, 2018 applicable w.e.f. 1st April, 2019, the Company needs to take approval of the members by way of special resolution for continuation of his holding office as an Independent Director after the attainment of age of 75 years. The resolution given in the notice will serve both the purpose i.e appointment as an independent Director for the second consecutive term of 5 (five) years, w.e.f. April 1, 2019 to March 31, 2024 and to continue in the office after attainment the age of 75 years on October 23, 2019 .

Mr. Aditya Vijay Singh is not disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013 and has given his consent to act as a Director (in the Category of an independent Director). Further the Company has also received declaration from Mr. Aditya Vijay Singh that he meets the criteria of independence as prescribed both under Section 149(6) of the Act and under the SEBI (LODR) Regulations, 2015.

- Mr. Ashwini Verma (DIN: 06939756) and Mr. Amogh Kumar Gupta (DIN: 06941839) were appointed as Independent Directors of the Company and hold office as Independent Directors of the Company up to August 4, 2019 (“first term”). Based on the performance evaluation and recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company considered their experience and contribution made by them during their tenure, the continued association of Mr. Ashwini Verma and Mr. Amogh Kumar Gupta would be beneficial to the Company and it is desirable to continue to avail their services as Independent Directors.

Accordingly, it is proposed to re-appoint Mr. Ashwini Verma and Mr. Amogh Kumar Gupta as Independent Directors of the Company, not liable to retire by rotation, for a second consecutive term of 5 (five) years on the Board of the Company w.e.f. August 05, 2019.

Mr. Ashwini Verma and Mr. Amogh Kumar Gupta are not disqualified from being appointed as Directors in terms of Section 164 of the Companies Act, 2013 and have given their consent to act as Directors (in the Category of independent Directors). Further the Company has also received declaration from Mr. Ashwini Verma and Mr. Amog h Kumar Gupta that they meets the criteria of independence as prescribed both under Section 149(6) of the Act and under the SEBI (LODR) Regulations, 2015. They are proposed for the confirmation of they appointment for a second consecutive term of 5 (five) years as Independent Directors as stated in the notice of the AGM by special resolutions.

In case of appointment/re-appointment of Directors, the details of respective Directors as stipulated under Regulation 36(3) of the Listing Regulations are included in the Notice of Annual General Meeting.

- Mr. Satish Chandra Pandey (DIN : 07072768 ) has been appointed as Independent Director by the Shareholders of the Company at the Extraordinary General Meeting held on January 30, 2015 for a period of five (5) consecutive years from January 23, 2015 to January 22, 2020. Mr. Satish Chandra Pandey has attained the age of 78 years in the financial year 2017-18 and in view of the SEBI (LODR) (Amendment) Regulations, 2018, as applicable w.e.f. 1st April 2019 and also for an abundant precaution, the Company seeks consent of the members by way of special resolution for continuation of holding the office of directorship in the category of an independent Director for his remaining tenure of his appointment after the age of 78 years.

(c) Woman Director

Mrs. Seema Suryavanshi (DIN:00039946) is a Woman Director on the Board as required under the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

(d) Independent Directors and Declaration by Independent Directors Act, 2013. The Company has received necessary declarations from all the six Independent Directors to the effect that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of SEBI (LODR) Regulations, 2015. In the opinion of the Board, they fulfil the conditions specified in the Act and the Rules made thereunder for the appointment as Independent Directors and are independent of the management.

The terms and conditions of appointment of the Independent Directors are placed on the website, http://dilipbuildcon.com/wps/wcm/connect/666e51ee-e980-4abe-8407-f9c4d55b828fTerms and conditons for the appointment of Independent Director.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-666e51ee-e980-4abe-8407-f9c4d55b828f-m0w.BJ-

(e) Programme for familiarization of Directors

The Company conducts familiarisation programme for all the directors at the time of their appointment and also at regular intervals to enlighten the directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company etc. The details regarding the familiarization programme conducted during the year are put up on the website of the company and can be accessed at http://dilipbuildcon.com/wps/ wcm/connect/472e29ea-95f4-4054-86a3-b5921e36a1a6/ Details of Directors Familiarization Program. pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-472e29ea-95f4-4054-86a3-b5921e36a1a6-ma.i0Ho

Constitution of the Board of Directors and their Meetings

(a) Constitution of the Board

The composition of the Board is in conformity with Regulation 17 of the SEBI (LODR) Regulations, 2015 and Section 149 of the Companies Act, 2013. The Company’s policy is to maintain optimum combination of Executive and Non-Executive Directors. As on March 31, 2018, the Company has 9 (nine) Directors. Out of the 9 (nine) Directors, 3 (three) are Executive Directors and 6 (six) are Non-Executive- Independent Directors.

The Chairman of the Board Mr. Dilip Suryavanshi is the Promoter and Managing Director. The Members of the Board are highly qualified and having varied experience in their respective field and they assist the Board to discharge their functions from time to time.

(b) Meetings of the Board

The Company prepares the schedule of the Board Meeting in advance to assist the Directors in scheduling their programme. The agenda of the meeting is circulated to the members of the Board well in advance along with necessary papers, reports, recommendations and supporting documents so that each Board member can actively participate on agenda items during the meeting. The Board met 7 (Seven) times during the Financial Year 2017-18. The maximum interval between any two meetings did not exceed 120 days. Details regarding the attendance of Directors in the meetings of Board and the previous Annual General Meeting has been included in the Corporate Governance Report which is forming part of this Annual Report.

(c) Information available for the members of the Board

The Board has complete access to any information within the Company. The Company has provided inter alia following information and discussed the matters:

- Financial results of the Company, its Subsidiaries and Associates;

- Minutes of meetings of the Board, Committees, resolutions passed by circulations and minutes of the meetings of the Board of Subsidiary Companies;

- Periodic compliance reports which includes noncompliance, if any;

- Disclosures received from Directors;

- Related party transactions;

- Regular business updates;

- Report on action taken on last Board Meeting decisions;

- Various Policies of the Board;

- Code of Conduct for the members of the Board;

- Discussion with the Auditors and the audit committee members.

Governance codes (a) Code of Business Conduct & Ethics

The Company has adopted Code of Business Conduct & Ethics (“the Code”) which is applicable to the Board of Directors and all Employees of the Company.

The Board of Directors and the members of Senior Management Team of the Company are required to affirm Compliance of this Code. The Code requires Directors and Employees to act honestly, fairly, ethically and with integrity, conduct themselves in professional, courteous and respectful manner. The Code is displayed on the Company’s website, http://dilipbuildcon.com/wps/wcm/connect/1d9464eb-9501-42ad-a089-795eecf4e28b/Code of Conduct Board of Directors.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE-1d9464eb-9501-42ad-a089-795eecf4e28b-meHR6zB

(b) Conflict of Interests

Each Director informs the Company on an annual basis about the Board and the Committee positions he occupies in other Companies including Chairmanships and notify changes during the year. The Members of the Board while discharging their duties, avoid conflict of interest in the decision making process. The Members of Board restrict themselves from any discussions and voting in transactions in which they have concern or interest.

(c) Insider Trading Code

The Company has adopted a Code of conduct for prevention of Insider Trading (“the Code”) in accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 (The PIT Regulations). This Code is displayed on the Company’s website,http://dilipbuildcon.com/wps/ wcm/connect/088c8e44-50d9-4791-b095-fa9ef0cbae21/ Code of Conduct Insider Trading.pdf?MOD=AJPERES& CACHEID=ROOTWORKSPACE-088c8e44-50d9-4791-b095-fa9ef0cbae21-meHQnv4

The Code is applicable to Promoters and Promoter’s Group, all Directors, KMPs and their immediate relatives such Designated Employees who are expected to have access to unpublished price sensitive information relating to the Company and connected persons. The Company Secretary is the Compliance Officer for monitoring adherence to the said PIT Regulations.

The Company has also formulated ‘The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)’ in compliance with the PIT Regulations.

COMMITTEES OF THE BOARD

The Board of Directors has constituted various mandatory and non-mandatory Committees to deal with specific areas and activities which concern the Company and requires a closer review. The Committees are formed with approval of the Board and function under their respective Charters. These Committees play an important role in the overall management of day-to-day affairs and governance of the Company. The Board Committees meet at regular intervals and take necessary steps to perform its duties entrusted by the Board. The Minutes of the Committee Meetings are placed before the Board for noting. The Board currently has the following Committees:

Mandatory Committees

(a) Audit Committee

The Audit Committee was constituted by our Board in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (LODR) Regulations, 2015. The composition, quorum, terms of reference, functions, powers, roles and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the SEBI (LODR) Regulations, 2015. All the members of the committee are financially literate and Mr. Satish Chandra Pandey, Chairman of the Committee is an Independent Director and possesses financial expertise.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

Details of establishment of vigil mechanism for directors and employees

The Vigil Mechanism Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the Vigil Mechanism Policy.

A mechanism has been established for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases. The Vigil Mechanism Policy has been placed on the website of the Company, http://dilipbuildcon.com/wps/ wcm/connect/ca817697-68c9-4d95-b8f0-9e07bb33db60/ Vigil Mechanism Policy.pdf?MOD=AJPERES&CONVERT_ TO=url&CACHEID=ROOTWORKSPACE-ca817697-68c9-4d95-b8f0-9e07bb33db60-m0w-sHe

(b) Corporate Social Responsibility (CSR) Committee

Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large and an initiative to assess and take responsibility for the Company’s impact on environment and social wellbeing. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society.

The CSR Committee has been constituted as required under the provisions of section 135 of the Companies Act, 2013. The details regarding composition, objectives, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

Report on Corporate Social Responsibility as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is prepared and the same is annexed to the Board’s Report as Annexure 4.

The details of amount budgeted, spent and unspent along with the reasons for not spending the allocated amount are included in the said report.

As per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Policy is available on the website of the Company, http://dilipbuildcon.com/wps/wcm/connect/ abc3afe3-7462-4b3a-974a-5b4276d5d060/ CSR Policy.pdf?MOD=AJPERES&CONVERT_ TO=url&CACHEID=ROOTWORKSPACE-abc3afe3-7462-4b3a-974a-5b4276d5d060-m0w.BSH

(c) Stakeholder’s Relationship Committee

Stakeholder’s Relationship Committee has been constituted by the Board in accordance with Section 178 (5) of the Companies Act, 2013.

The details regarding composition, terms of references, powers, functions, scope, meetings, attendance of members and the status of complaints received during the year are included in Corporate Governance Report which forms part of the Annual Report.

(d) Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been constituted by the Board in accordance with section 178 of Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015. All the members of the committee are Independent Directors.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

Company’s policy on remuneration of Directors, KMPs and other employees

The Policy of the Company on remuneration of Directors, KMPs and other employees including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is annexed to the Board’s Report as Annexure 5.

Non-Mandatory Committees

(a) Risk Management Committee

Risk Management Committee consists of the following persons namely:

Sr. No

Name of members

Designation

1

Mr. Dilip Suryavanshi

Chairman -Managing Director

2

Mr. Devendra Jain

Member-Whole time Director & CEO

3

Mr. Amogh Kumar Gupta

Member

4

Mr. Ashwini Verma

Member

5

Mr. Abhishek Shrivastava

Secretary to the Committee

Terms of reference of the Risk Management Committee are as under:

1. Laying down risk assessment plan, minimisation procedures and informing the Board of the same;

2. Framing, implementing, reviewing and monitoring the risk management plan for the Company; and;

3. Performing such other activities as may be delegated by the Board and/or are statutorily prescribed under the SEBI (LODR) Regulations, 2015.

The Committee has formulated a Risk Assessment and Management Policy to create and protect shareholders’ value by minimizing threats or losses,and identifying and maximizing opportunities. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk.

And the Committee met once during the Financial Year 2017-18 on February 13, 2018. The meeting was conducted to review proper implementation of objective of Risk Management Policy. The requisite quorum was present at the Meeting.

(b) Borrowing Committee

The Board constituted the Borrowing Committee to negotiate, finalise and approve the proposals for borrowings from various Banks, Financial Institutions and the Finance Companies. The members of the Committee are as under:

Sr. No

Name of members

Designation

1

Mr. Dilip Suryavanshi

Chairman -Managing Director

2

Mrs. Seema Suryavanshi

Member-Whole time Director

3

Mr. Karan Suryavanshi

Member

4

Mr. Bharat Singh

Member

5

Mr. Kundan Kumar Das

Member

6

Mr. Pradeep Suryavanshi

Member

7

Mr. Abhishek Shrivastava

Secretary to the Committee

And the Committee met 34 (Thirty Four) times during the Financial Year 2017-18. The requisite quorum was present at all the Meetings.

The terms of reference of the Borrowing Committee of the Company includes the following:

1. To negotiate, finalise and approve the proposals for borrowings, Bank Guarantees including lease facility for procurement of assets on lease basis from various Banks, Financial Institution and the Finance Companies and the terms and conditions of such borrowings, Bank Guarantees and lease facility, provided that the said committee shall not approve the proposals for borrowings, Bank Guarantees and lease facility exceeding Rs. 11,000 Crores (Rupees Eleven Thousand Crores only) at any point of time .

2. To appoint any one or more official(s) of the company as Authorized Signatory(ies) to execute and sign all the agreements, security documents and other necessary documents including any amendment to the executed documents with the concerned Bank or Financial Institution or Finance Companies as may be required by them in their prescribed format or otherwise and to perform all other acts, deeds for and on behalf of the Company as may be required to avail the facility.

3. the Board do hereby agree to review/confirm/ratify all the business transacted or approved by the Committee from time to time and a copy of the minute book of the committee be placed before the Board at the subsequent Board meeting to consider and take on record the same.

(c) Business Development and Administration Committee

The Board constituted the Business Development and Administration Committee to take decisions regarding the day to day business operations of the Company. The members of the Committee are as under:

Sr. No

Name of Members

Designation

1

Mr. Dilip Suryavanshi

Chairman-Managing Director

2

Mrs. Seema Suryavanshi

Member - Whole-time Director

3

Mr. Devendra Jain

Member - Whole-time Director & CEO

4

Mr. Kundan K. Das

Member - AGM Business Development

5

Mr. Abhishek Shrivastava

Secretary to the Committee

The Committee met 35 (Thirty five) times during the Financial Year 2017-18. The requisite quorum was present at all the Meetings.

The terms of reference of the Business development and Administration Committee of the Company inter alia includes the following:-

1. To approve, finalise the terms and conditions of the proposals/projects/bid application, Joint Venture Agreement, and other documents and writings as may be required for processing and finalizing the applications for making bids for the projects.

2. to authorize any officer of the company, consultant, agent, authorized official of joint venture partner of the company or any other person to sign and submit all applications, bids, Agreements, and other documents and writings and to participate in Pre-applications and other conference and to provide information to the Authority, to sign and execute all contracts including the Concession Agreement and undertaking consequent to acceptance of above mentioned bid.

3. To approve and provide any of the undertakings, resolutions and other related documents in respect of the projects awarded to the Company and authorize any person to sign and submit the same with the concerned authorities.

4. Approval of any other matter that is deemed necessary in respect of execution of any project and to carry out and to do all such acts, deeds and things required in connection therewith.

5. To approve and transact routine administrative matters;

6. To review the operations of the Company in general;

7. To authorize opening and closing of bank accounts or any other banking requirement;

8. To authorize additions/deletions to the signatories pertaining to banking transactions which includes letter of credit facility, Bill Discounting, Line of Credit;

9. To approve donations as per the policy approved by the Board; if any,

10. To delegate authority to the Company’s official(s) to represent the Company at various courts, government authorities and so on for the following matters:

a) To demand, receive, recover, accept, exercise or utilize any claim, things, right, or any object to which the Company is entitled and/or to deposit, make and give receipts, dues. To take and/or deliver the possession of Project’s ‘Right of Way/Site’ and lease hold property/assets for and on behalf of Company.

b) To appear, represent, depose and record statement, make and move application for and on behalf of the company and authorized to make sign, execute verify and register various applications, papers, documents, statements, on company’s behalf and authority to deposit amount incidental thereto and as may be required to submit before the any lawful authority, Central and State Government Department (individually “Authority” and ‘‘collectively Authorities”) and any Agency .

c) Any other agreements, joint memorandum, containing inventory of site, documents, or instruments that are require to be entered with any or all “Authority” and to do all incidental acts things and deeds of whatsoever nature in relation to the project Activity (ies).

d) Authority to collect and/or submit documents or produce/receive the documentary evidence, measurement book, bill payment and/or to receive from any Government Departments, Authority Agency having authority in relation to the projects of the Company.

e) To do all such other acts, matters and things necessary filing for contractual obligations on behalf of Company and to safeguard the legal interest of the company in any manner whatsoever including reference(s) of dispute to authority and/or Arbitration in relation to any projects.

f) To appear, to act and depose on behalf of the company before any High Court or before any commission, Tribunal Police Authorities or any other forum having jurisdiction.

g) To make sign execute verify and register various pleadings applications, Counter/Rejoinder Affidavits, papers, documents, appeal, revision, writ petitions, written statements, reply, complaints, affidavit etc before the authorities.

h) To file or cause to be filed any civil suit for recovery of monies due to the company or for any other relief or file/withdraw/settle/compromise the appropriate civil actions under appropriate provisions of the relevant laws.

i) To sign the Vakalatnama authorizing the counsel to initiate and maintain all such legal proceeding and make statement and be present before the authorities on behalf of the company as and when required .

j) To provide necessary documents required in the court of law.

k) To review and follow up on the action taken on the Committees decisions;

l) To review, propose and monitor annual budget if any, subject to the ratification of the Board; m) To attend to any other responsibility as may be entrusted by the Board within the terms of reference.

(d) Lending & Investment Committee

The Board constituted Lending & Investment Committee to delegate its power to invest the funds of the Company; and to grant loans, provide guarantee and security. The Members of the Committee are as under:

Sr. No.

Name of Members

Designation

1

Mr. Dilip Suryavanshi

Chairman- Managing Director

2

Mr. Devendra Jain

Member-Whole-time Director & CEO

3.

Mr. Satish Chandra Pandey

Member-Independent Director

4

Mr. Amogh Kumar Gupta

Member-Independent Director

5

Mr. Abhishek Shrivastava

Secretary to the Committee

The terms of reference of the Committee includes the authority under section 179(3) read with the section 185, 188 and the provisions of the SEBI (LODR) Regulations, 2015 as may be applicable to the Company from time to time and are as follows:-

1. To make investment and acquire by way of subscription, purchase or otherwise securities of any other body corporate, provided that the total amount of such investments to a particular body corporate shall not exceed Rs. 150 Crores at any time intervening between two Board meetings of the Company, subject to the maximum limits as may be available to the Company u/s 186 of the Companies Act, 2013 or such resolutions passed by the Company in the general meeting wherever applicable.

2. To give any loan, guarantee, security, indemnity to any person or other body corporate, including the subsidiary and associate concerns or otherwise as the case may be provided that such loan to each person or body corporate shall not exceed Rs. 150 Crores at any time intervening between two Board meetings of the Company.

3. To consider and decide the requirement for incorporation of a new subsidiary company and authority to make such initial contribution in the share capital and further investment in such new company and to nominate the signatory and directors for and on behalf of the Company.

4. To consider and decide the requirement for acquiring any shares of any body corporate or becoming partner in any of the Joint venture/LLP/Partnership firm and to nominate for appointment of the authorized representative, to give authority for the Banking operation and to give authority for any project on behalf the Company.

The Committee met 8 (eight) times during the Financial Year 2017-18. The requisite quorum was present at all the Meetings.

Particulars of contracts or arrangements with related parties referred to Section 188(1):

All transactions entered with Related Parties for the year under review were entered on arm’s length basis and in the ordinary course of business and that the provisions of Section 188(1) of the Companies Act, 2013 and the Rules made thereunder were not attracted.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) is prepared in Form AOC-2 pursuant to Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is annexed to the Board’s Report as Annexure 6.

All Related Party Transactions are placed before the Audit Committee and the Board for approval. The Company has a process in place to periodically review and monitor Related Party Transactions. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. All the related party transactions were in the ordinary course of business and at arm’s length.

The Audit Committee and the Board have approved the Related Party Transactions Policy and the same has been placed on the Company’s website, http://dilipbuildcon. com/wps/wcm/connect/82561153-b3e3-4943-b574-fa6bad71e3d2/Policy of Related Party Transactions. pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=ROOTWORKSPACE-82561153-b3e3-4943-b574-fa6bad71e3d2-m0w-iCq

Related Party Disclosures

Disclosures of Loans and advances in the nature of loans to Subsidiaries/Associates/others by name and amount at the year end and the maximum amount of loans outstanding during the year has been disclosed in Note 4 and 28 to the Standalone Financial Statements. The said disclosures are also given in the Financial Statements of Subsidiary/ Associate Companies.

Particulars of employees

Disclosures under section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 respectively, is annexed to the Board’s report as Annexure 7.

Directors’ Responsibility Statement

Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) 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 of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the directors had prepared the annual accounts for the Financial Year ended March 31, 2018 on a going concern basis;

e) that 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

f) that 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.

Internal Control System and their Adequacy

Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company’s internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to M/s Adalatwale and Bhagwat, a reputed firm of Chartered Accountants. 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.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

To maintain its objectivity and independence, the Internal Audit Function reports to the Chairman of the Audit Committee.

Risk management

Risk management is embedded in your Company’s operating framework. Your Company believes that managing risks helps in maximizing returns. The risk management framework is reviewed annually by the Risk Management Committee. Some of the risks that may arise to the Company are explained here:

(a) Financial risks

The key objective of the Company’s capital management is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business. The Company is focused on maintaining a strong equity base to ensure independence, security, as well as financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.

Company’s principal financial liabilities, comprise borrowings from banks, trade payables and security deposits. The main purpose of these financial liabilities is to finance Company’s operations (short term). Company’s principal financial assets include investments, security deposit, trade and other receivables, deposits with banks and cash and cash equivalents, that derive directly from its operations.

Company is exposed to market risk, credit risk and liquidity risk.

b) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk interest rate risk, currency risk and other price risk such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings, trade and other payables, security deposit, trade and other receivables, deposits with banks etc.

The sensitivity analysis in the following sections relate to the position as at 31st March 2018 and 31st March 2017. The sensitivity of the relevant income statement item is the effect of the assumed changes in respective market risks. The sensitivity analysis have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt are constant at 31st March 2018.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity, other post retirement obligations and provisions.

Company’s activities exposed to interest rate risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Credit Risk:

Credit risk on trade receivables and unbilled work-in-progress is limited as the customers of the Company mainly consists of the government promoted entities having a strong credit worthiness. For other customers, the Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled work-in-progress. The provision matrix takes into account available external and internal credit risk factors such as credit ratings from credit rating agencies, financial condition, ageing of accounts receivable and the Company’s historical experience for customers.

Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash flow and collateral obligations without incurring unacceptable losses. Company’s objective is to, at all time maintain optimum levels of liquidity to meet its cash and collateral requirements. Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing at optimised cost.

Regulatory risks

The Company is exposed to risks attached to various statutes, laws and regulations. The Company is mitigating these risks through regular review of legal compliances carried out through internal control and audits.

(d) Human resource risks

Retaining the existing talent pool and attracting new talent are major risks. The Company has initiated various measures including training and integration of learning and development activities. The Company has formulated various schemes in the interest of the employees i.e. DBL Employees Voluntary Benevolent Fund Scheme, Camp & Accommodation with various modern amenities, Free Child Education Policy for Drivers & Operators, One Lakh Gift Policy for Daughters marriage of Drivers/ Operators, Best Drivers & Machine Operator Award.

Environment and Safety

The Company is conscious of the importance of clean environment and safe operations. The Company’s policy requires conduct of operations in such manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

Internal Complaints Committee (ICC) and other disclosures under the Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial Year ended March 31, 2018, the Company has not received any Complaints pertaining to Sexual Harassment.

Cautionary Statement

Statements in this Board’s Report and Management Discussion and Analysis describing the Company’s 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 Company’s operations include raw material availability and its prices, cyclical demand and pricing in the Company’s principle markets, changes in Government regulations, Tax regimes, economic developments in the Country and other ancillary factors.

Acknowledgements

The Company is grateful to its customers, shareholders, suppliers, financial institutions, bankers, Central and State Governments for their constant support to the Company. The Directors also place on record their deep appreciation of the contribution made by employees at all levels, the consistent growth of the Company was made possible by their hard work, loyalty, dedication, co-ordination and support.

For and on behalf of the Board of Directors

Dilip Suryavanshi Devendra Jain

Chairman & Managing Director Whole Time Director & CEO

DIN : 00039944 DIN : 02374610

Place : Bhopal

Date : August 14, 2018

Director’s Report