DILIP BUILDCON Directors Report

To,


The Members,


Dilip Buildcon Limited


The Directors have pleasure in presenting their Eleventh 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, 2017.


Financial Results


Standalone and Consolidated: The Standalone and Consolidated performance for the Financial Year ended March 31, 2017 is as under:


(Rs. in Lakhs)















































































































































Particulars



Standalone



Consolidated



Year ended



Year ended



Year ended



Year ended



March 31, 2017



March 31, 2016



March 31, 2017



March 31, 2016



Gross Revenue



510,907.14



410,106.35



533,140.40



431,669.32



Total expenses



474,900.44



385,096.16



495,927.70



403,942.86



Profit / (loss) before tax



36,006.70



25,010.19



37,212.70



27,726.47



Tax expenses



Current tax



81.11



784.61



97.89



816.43



Deferred tax



(168.69)



2,145.18



1,346.65



3,932.77



Profit for the year from continuing operations



36,094.28



22,080.40



35,768.16



22,977.27



Other comprehensive income Items that will not be reclassified to profit or loss



18.38



(28.83)



18.38



(28.83)



(Net of Taxes)



Total Comprehensive Income for the year



36,112.66



22,051.58



35,786.54



22,948.44



Add: Balance in Profit and Loss Account



93,240.40



71,259.31



80,239.62



57,361.67



(Adjusted)



Sub Total



129,353.06



93,310.89



116,026.16



80,310.11



Less: Appropriation



Dividend



(29.28)



(58.57)



(29.28)



(58.57)



Tax on Dividend



(5.97)



(11.92)



(5.97)



(11.92)



Others



-



-



(63.30)



0.00



Closing Balance



129,317.81



93,240.40



115,927.61



80,239.62



Financial Performance


During the year under review, your Company reported a top-line growth of 24.78% over the previous year. At Standalone level, the Revenue from Operations amounted to Rs.509,762.48 Lakhs as against Rs.408,532.43 Lakhs in the previous year. The Operating Profit before Tax amounted to Rs.36,006.70 Lakhs as against Rs. 25,010.19 Lakhs in the previous year. The Net Profit for the year amounted to Rs.36,094.28 Lakhs against Rs.22,080.40 Lakhs reported in the previous year and total comprehensive income for the year amounted to Rs.36,112.64 Lakhs as against Rs.22,051.58 Lakhs in the previous year.


The Consolidated Revenue from Operations amounted to Rs.531,915.72 Lakhs as against Rs.430,047.10 Lakhs in the previous year, registering a growth of 23.69%. The Consolidated Operating Profit before Tax amounted to Rs.37,212.70 Lakhs as against Rs.27,726.47 Lakhs in the previous year. The Consolidated Net Profit after Tax amounted to Rs.35,768.16 Lakhs as against Rs.22,977.27 Lakhs in previous year and Total Comprehensive Income for the year amounted to Rs.35,786.54 Lakhs against Rs.22,948.44 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 Rs.1.00 (Rupee One, i.e. 10%) per equity share of face value of Rs.10.00 (Rupees Ten only) each (previous year Rs. 0.025 per equity share) for whole of the year aggregating to Rs.136,769,768.00(excluding dividend distribution tax) for the Financial Year 2016-17, which, if approved by the members at the ensuing 11th Annual General Meeting (AGM), 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 September 4, 2017.


Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top five hundred listed entities based on market capitalization are 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://www.dilipbuildcon.co.in/files/Dividend%20Distribution%20P olicy.pdf. 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, 2017 we completed the construction of 73 road projects in the states of Madhya Pradesh, Gujarat, Himachal Pradesh, Rajasthan, Andhra Pradesh, Karnataka, Telangana, Uttar Pradesh and Maharashtra in India, with an aggregate length of approximately 8,604.61 lane kms, achieving a CAGR of 34.75% of revenue growth on standalone basis for the five Financial Years ended March 31, 2017.


As the owner of one of the largest fleets of construction equipment in India, we maintained, as of March 31, 2017, a modern equipment fleet of 8,525 vehicles and other construction equipments 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 25,290 employees as of March 31, 2017.


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 roads, bridges, 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, 2017, we had an order book of Rs. 1,756,826.51 Lakhs, consisting of 37 third party road EPC projects, 10 of our own road BOT/HYBRID projects on EPC basis, 2 irrigation projects, 3 urban development projects, 3 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. 457,143.01 Lakhs from this business for Financial Year 2017. As on March 31, 2017, we were undertaking a total of 37 road EPC Projects, 1 Bridge and 10 road infrastructure development projects in 12 states, which amounted to an aggregate length of 8,781.25 lane kms. Our order book for these projects amounted to Rs.1,458,089.52 Lakhs as of March 31, 2017, accounting for 83% of our total order book.


Irrigation:-


We recently diversified into the irrigation business. We 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 equipments 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 27,827.28 Lakhs from this business for Financial Year 2017. As of March 31, 2017, we were undertaking 2 EPC irrigation projects in Madhya Pradesh. Our order book for these projects amounted to Rs.16,483.76 Lakhs as of March 31, 2017, accounting for 1% of our total order book.


Urban Development


We recently 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 redevelopment 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 9,010.04 Lakhs from this business for Financial Year 2017. As of March 31, 2017, we were undertaking 3 EPC urban development projects in Madhya Pradesh. Our order book for these projects amounted to Rs. 21, 081.33 Lakhs as of March 31, 2017, accounting for 1.20% 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)



Nigahi-1, Northern Coalfields, Dist. Singrauli, Madhya Pradesh



13 Million



10,450.00



Khairagura, Singareni Collieries Company Limited, Asifabad District, Teleangana



106.1 Million



97,355.00



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



131.8 Million



167,357.78



We recognized revenue of Rs. 13,990.84 Lakhs from this business for Financial Year 2017. As of March 31, 2017, our order book of these 3 projects was Rs. 261,171.90 Lakhs, accounting for 14.87% of our total order book.


Goa Zuari Cable-stayed Bridge Project (status on 31.03.2017): 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 the 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. 140,310.00 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. 5,493.87 Lakhs from this business for Financial Year 2017. As of March 31, 2017, our order book of these 3 projects was Rs. 134,816.22 Lakhs, accounting for 7.67% of our total order book.


INFRASTRUCTURE DEVELOPMENT BUSINESS


In our infrastructure development business, we develop and maintain roads and highways on a BOT basis. As of March 31, 2017, we had completed 14 projects totalling 1,940.53 Lane kms in the states of Gujarat and Madhya Pradesh in India & we have 10 under construction projects comprising 1 pure toll & 9 hybrid annuity model projects totalling 2,507.47 Lane kms. in the states of Maharashtra, Uttar Pradesh, Karnataka and Madhya Pradesh in India.


In respect of our completed projects, we operate 1 BOT project purely on a toll basis where the only source of revenue is the toll we charge vehicles for using the road, 3 BOT projects on annuity basis where the only source of revenue is the fixed amount that the relevant government agency pays us for building and maintaining the roads on an annual basis, and the remaining 10 projects on annuity plus toll basis, where we are entitled to both a fixed amount to be received annually in addition to the toll that we charge, with their respective concession periods ranging from 14 to 25 years. Due to the annuity component in our operational BOT projects, income is assured to the extent of the annuities to be collected during a year under the relevant concessions, thus reducing the risk of income fluctuations resulting from traffic pattern changes.


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 16 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 84.37% of our order book as of March 31, 2017, as compared to 60.00% as of March 31, 2016. 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, 2017:


Major ongoing EPC construction projects as of March 31, 2017:






























































































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 road projects completed as of March 31, 2017:


































































Project Name



Contract price (Rs. in Lakhs)



Total length in Kms.



Date of Start



Schedule Date of Completion



Actual Completion Date



Early Completion days



Bonus Earned (Rs. in Lakhs)



Hata Fatehpur



8,714.00



64.42



April 10, 2016



April 9, 2018



March 6, 2017



399



1,534.80



Sidhi-Tikhri-Kyothi Katra



14,486.40



95.77



September 1, 2015



June 1, 2017



September 20, 2016



254



717.96



Patan-Tendukheda-Rehli



22,502.00



86.60



April 10, 2016



April 9, 2018



March 31, 2017



374



3,614.99



Mandla to Pindari



19,080.00



106.33



August 26, 2015



August 24, 2017



February 21, 2017



184



572.40



Rewa-Sidhi



26,001.00



57.80



January 20, 2015



January 19, 2017



September 30, 2016



111



783.03



Awards


Your Company has been conferred with two prestigious awards in the “6th Construction Week India Awards 2016” in the following categories:-


1. Road Contractor of the Year


2. Road and Highways Project of the Year


Mr. Dilip Suryavanshi, Managing Director was also presented with an award in the category of “Infrastructure Person of the Year” in the said “6th Construction Week India Awards 2016”.


Management Discussion and Analysis


The Management Discussion and Analysis for the year under review as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report.


Particulars of loans, guarantees and security provided and Investments made under section 186


Since the Company is an Infrastructure Company, pursuant to the provisions of 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 a loan made, guarantee given and security provided by a company engaged in the business of providing infrastructure facilities. 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, 4 and 47 to the Standalone Financial Statements).


Consolidated Financial Statements


The Audited Consolidated Financial Statements for the Financial Year ended March 31, 2017, based on the financial statements received from subsidiaries, 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/Joint Ventures 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 Initial Public Offering and Offer for Sale (a) Initial Public Offering (IPO)


During the Financial Year 2016-17, your Company entered into the Securities Market through Initial Public Offering (IPO). The Public Issue comprised of Fresh Issue of 19,634,703 Equity shares of Rs. 10/- each at a premium of Rs.209/- per share aggregating to Rs. 43,000.00 Lakhs and an Offer for sale by promoters Mr. Dilip Suryavanshi and Mr. Devendra Jain of 1,136,364 equity shares each and also Offer for sale by the PE Investor BanyanTree Growth Capital LLC of 7,954,545 equity shares.


Equity shares of the Company are listed at BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) and are regularly traded on both the exchanges w.e.f. August 11, 2016.


Further the status of the utilisation of the Proceeds of the IPO and division thereon are as under:-


(Rs. in lakhs)






























Particulars



Amount



Utilisation as on March 31, 2017



Amount Pending for Utilisation



Pre-payment or scheduled repayment of a portion of term loans availed by the Company.



20238.20



20212.17



26.03



To meet Working Capital Requirements



20000.00



20000.00



Nil



General Corporate Purposes



72.20



72.20



Nil



(b) Change in the capital structure of the Company


During the year your company has allotted 19634703 Equity shares of Rs. 10/- each at a premium of Rs. 209/- per share by way of Initial Public Offering (IPO). Therefore, the paid up share Capital of the company has been increased from Rs. 1,171,350,650 to Rs. 1,367,697,680.


(c) Status of Shares


As the members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2017, 100% of the Company’s total paid up capital representing 136,769,768 shares are in dematerialized form.


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 which is required to be transferred in IEPF (Investor Education and Protection Fund) as per the provisions of the Companies Act, 2013.


Reserves


The Company has not transferred any amount to the reserves during the current Financial Year.


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


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.


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)



Bhavya Infra & Systems Private Limited



Equity



295,949*



63.30



DBL Hassan Periyapatna Tollways Limited



Equity



17,235



835.04



DBL Hata Dargawon Tollways Limited



Equity



25,945



1,177.12



DBL Hirekerur Ranibennur Tollways Limited



Equity



37,731



798.01



DBL Kalmath Zarap Highways Limited



Equity



50,000*



5.00



DBL Patan Rehli Tollways Limited



Equity



41,711



2,930.20



DBL Tuljapur Ausa Highways Limited



Equity



25,500*



2.55



Jalpa Devi Engineering Private Limited



Equity



50,000*



5.00



Jalpa Devi Tollways Limited



Equity



2,202,400



11,012.00



DBL Lucknow Sultanpur Highways Limited



Equity



500,000*



50.00



DBL Mundargi Harapanahalli Tollways Limited



Equity



48,993



1,094.01



*includes equity shares held by nominee on behalf of and for the benefit of Dilip Buildcon Limited


(b) Subsidiary Companies


During the year under review, your company has acquired entire equity shares of Bhavya Infra & Systems Private Limited and it became a wholly owned subsidiary of your Company. Further, four new Companies have been incorporated as subsidiaries of the Company, out of which three are wholly owned subsidiaries. The details are as follows:










































S. No.



Name of Subsidiary



Date of Incorporation / becoming subsidiary



Status



1



DBL Lucknow Sultanpur Highways Limited



09.09.2016



Wholly owned subsidiary (SPV)



2



DBL Kalmath Zarap Highways Limited



13.12.2016



Wholly owned subsidiary (SPV)



3



Bhavya Infra & Systems Private Limited



03.03.2017



Wholly owned subsidiary



4



Jalpa Devi Engineering Private Limited



09.03.2017



Wholly owned subsidiary



5



DBL Tuljapur Ausa Highways Limited



24.03.2017



Subsidiary (51% ownership) (SPV)



The Policy for determining material subsidiary company, as approved, can be accessed on the Company’s website at the link http://www.dilipbuildcon.co.in/files/Policy%20on%20Material%20 Subsidiaries.pdf. The Company does not have any material subsidiary as on March 31, 2017.


(c) Statement of the subsidiaries


As on March 31, 2017, the Company has 23 Indian subsidiaries. There has been no change in the nature of business activities of any of the subsidiaries.


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 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 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.co.in. Further, as per fourth proviso of the said section, Audited Financial Statements of each of the subsidiary companies have also been placed on the website of the Company, www.dilipbuildcon.co.in. Shareholders interested in obtaining a copy of the Audited Financial Statements of the subsidiary companies may write to the Company Secretary at the Company’s registered office.


(d) Performance and financial position of each of the subsidiaries included in the consolidated financial statement


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. During the period under review, the Company has achieved Revenue from Operations of Rs.907.25 Lakhs and Net Profit/(Loss) after Tax of Rs. (21.89) Lakhs.


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. During the period under review, the Company has achieved Revenue from Operations of Rs. 1,637.66 Lakhs and Net Profit/(Loss) after Tax of Rs. 552.15 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 3,171.43 Lakhs and Net Profit/(Loss) after Tax of Rs. (876.17) 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 2,078.13 Lakhs and Net Profit/(Loss) after Tax of Rs. 719.35 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. During the period under review, the Company has achieved Revenue from Operations of Rs.1,403.19 Lakhs and Net Profit/(Loss) after Tax of Rs. (21.82) 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 3,020.06 Lakhs and Net Profit/(Loss) after Tax of Rs. 905.45 Lakhs.


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. During the period under review, the Company has achieved Revenue from Operations of Rs. 624.23 Lakhs and Net Profit/(Loss) after Tax of Rs. (119.94) 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 1,618.36 Lakhs and Net Profit/(Loss) after Tax of Rs. 142.34 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 815.59 Lakhs and Net Profit/(Loss) after Tax of Rs. 103.63 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 1,634.02 Lakhs and Net Profit/(Loss) after Tax Rs. 179.03 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 1,561.56 Lakhs and Net Profit/(Loss) after Tax of Rs. 416.97 Lakhs.


xii. Suryavanshi Infrastructure Private Limited (“SIPL”)


IPL 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 334.65


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. During the period under review, the Company has achieved Revenue from Operations of Rs. 10,446.01 Lakhs and Net Profit/(Loss) after Tax of Rs. 174.64 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 26,529.44 Lakhs and Net Profit/(Loss) after Tax of Rs. (1,054.48) 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 36,843.21 Lakhs and Net Profit/(Loss) after Tax of Rs. (412.96) 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. During the period under review, the Company has achieved Revenue from Operations of Rs. 5,872.33 Lakhs and Net Profit/(Loss) after Tax of Rs. (217.48) Lakhs.


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.” During the period under review, the Company has achieved Revenue from Operations of Rs. 6,018.91 Lakhs and Net Profit/(Loss) after Tax of Rs. (325.02) 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.” During the period under review, the Company has achieved Revenue from Operations of Rs. 2,091.60


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 is yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, the Company incurred Loss of Rs. 1.26 Lakhs during the period under review.


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 is yet to commence its business. Hence, there is no revenue and profit generated during the period under review. However, the Company incurred Loss of Rs. 0.38 Lakhs during the period under review.


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/loss generated/incurred 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 is yet to commence its business. Hence, there is no revenue and profit/loss generated/incurred during the period under review.


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


BISPL is a private limited company whose entire share capital has been acquired by Dilip Buildcon Limited on March 3, 2017 and thus, it has become the wholly owned subsidiary of Dilip Buildcon Limited. During the period under review, the Company has achieved total revenue of Rs. 8.25 Lakhs and Net Profit/(Loss) after tax of Rs. (6.79) Lakhs.


(a) Statutory Auditors & their Reports


M/s Naresh Rajani & Co., Chartered Accountants, Bhopal, (ICAI Firm Registration No. 008422C) and M/s Mukund M. Chitale & Co. (“MMC”) Chartered Accountants, Mumbai (ICAI Firm Registration No. 106655W) were re-appointed on September 25, 2014 as the Joint Statutory Auditors for a term of 3 years and 5 years 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.


Appointment of M/s Mukund M. Chitale & Co. (“MMC”) Chartered Accountants, Mumbai (ICAI Firm Registration No. 106655W) for the Financial Year 2017-18 is subject to ratification in the ensuing Annual General Meeting. The Company has obtained a certificate for their independence and eligibility for their appointment as Auditors, and the same are within the limits as specified in section 141 of the Companies Act, 2013.


Pursuant to the provisions of Section 139 of the Companies Act, 2013, and rules made thereunder, the term of M/s Naresh Rajani & Co., Chartered Accountants, Bhopal (ICAI Firm Registration No. 008422C), as the Joint Statutory Auditors of the Company will conclude from the close of ensuing Annual General Meeting of the Company.


The Board of Directors places on record its appreciation to the services rendered by M/s Naresh Rajani & Co., as Joint Statutory Auditors of the Company.


Pursuant to Section 139 of the Companies Act, 2013 and subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of M/s MSG & Associates, Chartered Accountants, Bhopal (ICAI Firm Registration No. 010254C) as the Joint Statutory Auditors of the Company for the term of 5 (five) years commencing from the ensuing Annual General Meeting.


Accordingly, the Board recommends the resolution in relation to the appointment of Joint Statutory Auditors M/s MSG & Associates, Chartered Accountants, Bhopal (ICAI Firm Registration No. 010254C) and ratification of the appointment of M/s Mukund M. Chitale & Co. (“MMC”) Chartered Accountants, Mumbai (ICAI Firm Registration No. 106655W) for the Financial Year 2017-18, for the approval of the shareholders of the Company.


Emphasis of Matter in Auditors’ Report:


The Auditors’ Report for the Financial Year 2016-17 does not contain any qualification, reservation or adverse remark. The Auditors without qualifying their opinion draws attention to the following:-


“Note 43 to the Standalone Ind AS Financial Statements in respect of application made to Settlement Commission and the liability for tax/interest thereon made in the books of accounts based on the application made with the Settlement Commission”.


“Note 42 to the Consolidated Ind AS Financial Statements in respect of application made to Settlement Commission and the liability for tax/interest thereon made in the books of accounts based on the application made with the Settlement Commission”.


Notes referred in Emphasis of Matter: Note 43 to the Standalone Financial Statements:


Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by the Department in the earlier years, the Company has filed an application before the Income Tax Settlement Commission for Assessment Year 2007-08 to 2013-14. The Income Tax liability including interest arising thereon based on the application made Rs. 710 Lakhs has been provided for the in accounts for the year ended 31st March 2015. Any additional liability for tax / interest / penalty arising on account of the adjustments made / to be made in the application will be provided / made as and when these are finally ascertained.


Note 42 to the Consolidated Financial Statements:


Subsequent to the survey proceedings u/s 133 of the Income Tax Act initiated by the Department in the earlier years, the Company has filed an application before the Income Tax Settlement Commission for Assessment Year 2007-08 to 2013-14. The Income Tax liability including interest arising thereon based on the application made Rs. 710 Lakhs has been provided for the in accounts for the year ended 31st March 2015. Any additional liability for tax / interest / penalty arising on account of the adjustments made / to be made in the application will be provided / made as and when these are finally ascertained.


Board Explanation to the Emphasis of Matter:-


An Income Tax search was conducted on Company dated June 19, 2012 to June 21, 2012. After that the Company received the questionnaire under sec 142(1) of Income Tax Act and have duly replied on all the subject matter.


Further to curtail the duration of assessment and buying peace from local Income Tax Department, the Company have filed the application to Honorable Income Tax Settlement Commission (ITSC) after depositing Rs. 710.00 Lakhs of tax in the month of March, 2015. In response to application, the Honorable Income Tax Settlement Commission admitted the application u/s 245D(1) of the Income Tax Act on dated May 13, 2015. The Honorable ITSC has pronounced the order dated September 29, 2016, based on the same the Income Tax Department, Bhopal Office is working on the final outcome/tax liability. However, based on the order we have assessed the provisional amount and deposited Rs.30.00 Lakhs.


(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 2017-18. 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 for their ratification.


The Company has already filed the Cost Audit Report for the Financial Year 2015-16 with the Central Government. The Cost Audit Report for the Financial Year 2015-16 does not contain any qualification, reservation or adverse remark. The Company has obtained Cost Audit Report for the year 2016-17 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, Practising Company Secretaries (C.P No: 7442) as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2017-18.


Secretarial Audit Report for the Financial Year 2016-17 issued by M/s Piyush Bindal & Associates, Practising 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 2016-17.


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 2017-18.


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 2016-17 are under:










































































S. No.



Particulars



Comments



(A)



Conservation of energy



(I)



the steps taken or impact on conservation of energy



In view of business activities no substantial steps are required to be taken by the Company.



(ii)



the steps taken by the company for utilizing alternate sources of energy



As above



(iii)



the capital investment on energy conservation equipment



Nil



(B)



Technology absorption



(i)



the efforts made towards technology absorption



Not applicable as the traditional technology being used.



(ii)



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



Nil



(iii)



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



(a) the details of technology imported



Nil



(b) the year of import



N.A.



(c) whether the technology been fully absorbed



N.A.



(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and



N.A.



(iv)



the expenditure incurred on Research and Development



Nil



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 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 is 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


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


1. Mr. Dilip Suryavanshi : Chairman and Managing Director


2. Mr. Devendra Jain : Whole-time Director and CEO


3. Mrs. Seema Suryavanshi : Whole-time Director


4. Mr. Vaibhav Rawat : Chief Financial Officer


5. Mr. Abhishek Shrivastava : Company Secretary


There is no change in the key managerial personnel during the year under review.


However, it is proposed to revise remuneration of Mr. Dilip Suryavanshi as the Chairman and Managing Director, Mrs. Seema Suryavanshi as a Whole-time Director and Mr. Devendra Jain as a Whole-time Director & CEO of the Company, subject to the approval of the shareholders by special resolution and details of the same are mentioned in the item no. 8 to 10 of explanatory statement which forms the part of the Notice of 11th Annual General Meeting.


(b) Directors seeking re-appointment


In terms of the provisions of the Act, Mrs. Seema Suryavanshi (DIN: 00039946) Whole-time Director of the Company retires by rotation and being eligible offers herself for re-appointment at the ensuing Annual General Meeting. The Board recommends her reappointment 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 Act, the Company appointed Mr. Vijay Chhibber (DIN: 00396838) as an Additional Director under the category of an Independent Director of the Company with effect from February 28, 2017 for a term of 5 years. In term of Section 161 of the Companies Act, 2013, Mr. Vijay Chhibber holds office upto the conclusion of the ensuing Annual General Meeting. The Company has received notice with requisite deposit proposing his candidature as Director of the Company. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Vijay Chhibber as an Independent Director, for the approval by the shareholders of the Company.


In case of appointment / reappointment 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.


(c) Woman Director


Mrs. Seema Suryavanshi is a woman director on the Board as required under the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.


(d) Resignation of Director


Mr. Naval Jawaharlal Totla (DIN: 02408585) Non-Executive Director of the Company has resigned with effect from May 16, 2017 due to his other commitments. The Board places on record its sincere appreciation and gratitude for contributions made by him during his tenure as Non-Executive Director of the Company.


(e) Independent Directors and Declaration by Independent Directors


The Company is having 5 (five) Independent Directors which are in accordance with the requirement of the Listing Regulations as well as under the Companies Act, 2013. The Company has received necessary declaration from all the five 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 there under 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://www.dilipbuildcon.co.in/files/Terms%20and%20conditons% 20for%20the%20%20%20appointment%20of%20Independent%20Director.pdf


(f) Programme for familiarisation 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 familiarisation programme conducted during the year are put up on the website of the company and can be accessed athttp://www.dilipbuildcon.co.in/files/Familiarisation%20programme.pdf.


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, 2017, the Company has nine Directors. Out of the nine Directors, six are Non-Executive Directors comprising of five Independent Directors.


The Chairman of the Board Mr. Dilip Suryavanshi is the Promoter and Managin

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