FUTURE IRB Directors Report

The Directors have pleasure in presenting their 19th report on the business and operations, along with the audited financial statements of your Company, for the year ended March 31, 2017.


(Rs. in Crores)
















































































































































Consolidated



Standalone



Particulars



Year ended



Year ended



Year ended



Year ended



March 31, 2017



March 31, 2016



March 31, 2017



March 31, 2016



Total Income



5,969.10



5,255.11



3,635.95



3,160.85



Total Expenditure



4,985.16



4,384.95



3,344.02



2,812.01



Profit before tax



983.94



870.16



291.93



348.84



Less: Provision for tax



Current tax



367.27



316.44



88.70



56.81



Deferred tax



(98.75)



(85.82)



(0.01)



(0.01)



Profit after tax before Non- controlling interests



715.42



639.53



203.24



292.04



Less: Non-controlling interests



(0.05)



0.45



0.00



0.00



Profit after tax and after Non-controlling interests



715.47



639.46



203.24



292.04



Add: Profit at the beginning of the year



2,755.79



2,370.13



540.58



459.54



Profit available for appropriation



3,471.26



3,009.22



743.82



751.58



Appropriations:



Interim Dividend/Proposed Interim Dividend



(70.29)



(210.87)



(70.29)



(210.87)



Tax on equity dividend



(14.31)



(42.93)



0.00



0.00



Transfer to General Reserve



0.00



0.00



0.00



0.00



Other comprehensive income/(loss) for the period



(0.98)



0.37



0.05



(0.13)



Balance Carried Forward to Balance Sheet



3,385.68



2,755.79



673.58



540.58



Your Company has not proposed to transfer any amount to the General Reserves.


INDIAN ACCOUNTING STANDARDS (IND AS)


The Consolidated Financial Statements of your Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended.


For all periods up to and including the financial year ended March 31, 2016, the Company & its subsidiaries ("the Group") prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017 are the first ones that your Company has prepared in accordance with lnd AS.


OPERATION AND PERFORMANCE REVIEW


On the basis of Consolidated Financials


During the year, your Group earned total income of Rs.5,969.10 Crores as against the total income of Rs.5,255.11 Crores in previous year. Construction revenue resulted in growth from Rs.3,029.15 Crores for March 31, 2016 to Rs.3,494.78 Crores for year ended March 31, 2017. The Company''''s projects have witnessed healthy traffic growth commensurate with the overall economic activities in the country, which resulted into increase in Toll Revenue from Rs.2,098.80 Crores for March 31, 2016 to Rs.2,351.16 Crores for year ended March 31, 2017. The net profit before tax is Rs.983.94 Crores against the net profit before tax of Rs.870.16 Crores for the previous financial year. The net profit after tax and minority interest for the year ended March 31, 2017 stood at Rs.715.47 Crores as against Rs.639.09 Crores for the previous year.


On the basis of Standalone Financials


During the year, your Company earned total income of Rs.3,635.95 Crores for the year ended March 31, 2017. Net profit before tax stood at Rs.291.93 Crores. The net profit after tax for the year ended March 31, 2017 stood at Rs.203.24 Crores, as against Rs.292.04 Crores for the previous year.


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


PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS


Particulars of Loans, Guarantees or Investments, if any, are given in the Notes to the Audited Financial Statements.


DIVIDEND


In line with its dividend policy, your Company declared Interim dividends aggregating to 50%, i.e. Rs.5/- per Equity Share of face value of Rs.10/- each for the financial year 2016- 17. It resulted into cash outflow of Rs. 175.73 Crores. The Board has not recommended any final dividend for the financial year 2016-17.


CREDIT RATING OF COMPANY & SUBSIDIARIES


India Ratings and Research Private Limited has assigned / affirmed:


- IND A-RWP (Rating Watch Positive) to the Company with a Stable Outlook. IND A- [IND A Minus] / IND A1 [IND A One] to term loans of Rs.2,041.00 Crores; IND A1 [IND A One]-RWP to the Company''''s non-fund based limits aggregating Rs.1,100.00 Crores.


- IND BBB to the long-term senior project rupee loans of Rs.2,985.49 Crores, and USD 29.66 Million External Commercial Borrowing of IRB Ahmedabad Vadodara Super Express Tollway Pvt. Ltd. with Stable Outlook.


- IND BBB to the long-term senior project rupee loans of Rs.698.30 Crores, and USD 38.429 Million External Commercial Borrowing of IRB Pathankot Amritsar Toll Road Pvt. Ltd. with Stable Outlook.


- IND BBB to long-term senior project rupee loans of Rs.682.500 Crores and USD 38.770 Million External Commercial Borrowing of IRB Jaipur Deoli Tollway Pvt. Ltd. with Stable Outlook.


- Provisional IND BBB to the Project loans of Rs.722.200 Crores of IRB Surat Dahisar Tollway Pvt. Ltd. with Stable Outlook.


- IND A - (SO) to long-term senior project loans of Rs.218.669 Crores of IRB Kolhapur Integrated Road Development Company Pvt. Ltd. with Stable Outlook.


- IND BBB to long-term senior project loans of Rs.376.500 Crores of IRB Talegaon Amravati Tollway Pvt. Ltd. with Stable Outlook.


- IND AA to long-term senior project loans of Mhaiskar Infrastructure Pvt. Ltd. aggregating Rs.363.485 Crores with Stable Outlook.


- IND A to long-term facilities of Rs.328.460 Crores of IDAA Infrastructure Pvt. Ltd. with stable outlook.


- IND BBB - (SO) to senior project bank loan of Rs.1,756 Crores (including an interchangeable Rs.850 Crores Letter of Credit as sub-limit of the facility) of Yedeshi Aurangabad Tollway Pvt. Ltd. with Stable Outlook.


- IND A- (SO) to senior project bank loan of Rs.1,400 Crores (including an interchangeable Rs.950 Crores Letter of Credit as sub-limit of the facility) of Kaithal Tollway Pvt. Ltd. with Stable Outlook.


Credit Analysis & Research Ltd. has assigned/affirmed:


- CARE A [Single A] to long-term facilities of Rs.328.46 Crores of IDAA Infrastructure Pvt. Ltd.


- CARE A [Single A]; Outlook Stable, to long-term facilities of Rs.800.53 Crores and ''''CARE A1'''' [CARE A One]; Outlook Stable, to short-term bank facilities of Rs.550 Crores of Modern Road Makers Pvt. Ltd.


- CARE A - (SO) [Single A Minus (Structured Obligation)]; Outlook Stable, to long-term senior project rupee loans of Rs.527.05 Crores and USD 63.843 Million External Commercial Borrowing of IRB Tumkur Chitradurga Tollway Pvt. Ltd.


- CARE A - (SO) [Single A Minus (Structured Obligation)]; Outlook Stable, to long-term bank facilities of Rs.91.78 Crores and Rs.114.97 Crores to Non-Convertible Debenture of M.V.R. Infrastructure And Tollways Pvt. Ltd.


- CARE BBB (SO) [Triple B (Structured Obligation)] ; Outlook Stable, to long-term bank facilities of Rs.1,406 Crores of IRB Westcoast Tollway Pvt. Ltd.


- CARE BBB (SO) [Triple B (Structured Obligation)] to long-term bank facilities of Rs.910 Crores of Solapur Yedeshi Tollway Pvt. Ltd.


- CARE BBB (SO) [Triple B (Structured Obligation)]; Outlook Stable, to long-term bank facilities of Rs.1,650 Crores of AE Tollway Pvt. Ltd.


- CARE BBB- [Triple B Minus] to long-term bank facilities of Rs.110.63 Crores of Thane Ghodbunder Toll Road Pvt. Ltd.


BORROWINGS


As on March 31, 2017, your Company''''s (Standalone) fund based facilities availed stood at Rs.2,542.62 Crores and non-fund based credit facilities availed stood at Rs.498.29 Crores.


INFRASTRUCTURE INVESTMENT TRUST


In May 2017, IRB InvIT Fund ("the Trust" or "the Fund"), the first Infrastructure Investment Trust (InvIT) in India sponsored by your Company and registered with SEBI, has successfully completed first IPO by any trust in India, raising over Rs.5,000 Crores. The Trust received an overwhelming response from Indian as well as Foreign Institutional Investors. As a result, the Trust''''s IPO oversubscribed by more than 8 times. The Trust created history by becoming the First Listed Trust in India, resulting in transfer of 6 operational assets (6 SPVs) valued at Rs.5,920 Crores, from your Company to the Trust along with all their assets and liabilities. Consequently, your Company''''s net Debt Equity Ratio has reduced substantially from 3:1 to approx. 1.8:1 which would lead credit rating upgrade for your Company and savings in the interest cost. Out of the IPO proceeds, external Debt of 6 SPVs of approx. Rs.3,300 Crores have been fully repaid. Your Company has received approx. Rs.1,681 Crores from the Trust as consideration for transfer of its equity to the Trust. Your Company continues to hold 15% of the Unit Capital of the Trust.


Further, your Company has executed the ROFO/ROFR Deed and the Future Assets Agreement with the Trust by which your Company has provided the Trust right of first offer and right of first refusal with respect to its existing toll-road assets which are owned and also those which may be acquired or developed by your Company. In case the Trust would agree to acquire assets from your Company from time to time, your Company would realize value of its investments which it would re-invest into the opportunities in the Highway development and/or part will be utilized for payment of dividend. Hence, your Company believes that this will be an important source of capital to fund the growth opportunities in the future.


PROJECTS UNDER IMPLEMENTATION


Kishangarh Gulabpura Tollway Pvt. Ltd.


This SPV was formed to implement Kishangarh to Gulabpura Section, which involves project of Six laning of Kishangarh to Gulabpura section of NH 79A and NH 79 in the State of Rajasthan (length 90.000 km) on DBFOT (Toll) under NHDP Phase V package - I Project ("the Project"). The estimated Project Cost is approximately Rs.1,530 Crores having a concession period of 20 years including construction period of 910 days. This SPV has agreed to pay a premium of Rs.186.30 Crores to NHAI in terms of the Concession Agreement. Subsequently, the Concession Agreement has been signed for the Project with NHAI in February, 2017.


CG Tollway Pvt. Ltd.


This SPV was formed to implement Kishangarh Udaipur Ahmedabad Section, which involves project of Six Laning of Kishangarh Udaipur Ahmedabad Section from km 90.000 (near Gulabpura) to km 214.870 (end of Chittorgarh Bypass) of NH -79 in the state of Rajasthan Package 2 under NHDP Phase - V on BOT (Toll) mode ("the Project"). The estimated Project Cost is approximately Rs.2,100 Crores having a concession period of 20 years including construction period of 910 days. This SPV has agreed to pay a premium of Rs.228.60 Crores to NHAI in terms of the Concession Agreement. Subsequently, the Concession


Agreement has been signed for the Project with NHAI in December, 2016.


Udaipur Tollway Pvt. Ltd.


This SPV was formed to implement Udaipur to Rajasthan/ Gujarat Border project, which involves Six Laning from Udaipur to Rajasthan/ Gujarat Border i.e. from km 287.400 to km 401.200 section of NH-8 in the states of Rajasthan & Gujarat (approx. length 113.800 km) on DBFOT (Toll) under NHDP Phase V (package-V) ("the Project"). The estimated Project Cost is approximately Rs.2,100 Crores having a concession period of 21 years including construction period of 910 days. This SPV has agreed to pay a premium of Rs.163.80 Crores to NHAI in terms of the Concession Agreement. Subsequently, the Concession Agreement has been signed for the Project with NHAI in December, 2016. This SPV has achieved financial closure in July 2017 by tying up debt of Rs.1,461 Crores from the consortium of banks/financial Institution.


AE Tollway Pvt. Ltd.


The project''''s construction work is progressing well and it is expected to be completed within schedule time. During the year under review, this SPV has availed a loan of Rs.376.73 Crores out of the total project loan. As on March 31, 2017, this SPV''''s authorized share capital was Rs.223 Crores and paid up share capital was Rs.222.62 Crores.


Solapur Yedeshi Tollway Pvt. Ltd.


The project''''s construction work is progressing well and it is expected to be completed within schedule time. During the year under review, this SPV has availed a loan of Rs.161.16 Crores out of the total project loan. As on March 31, 2017, this SPV''''s authorized and paid up share capital was Rs.98.25 Crores.


Yedeshi Aurangabad Tollway Pvt. Ltd.


The project''''s construction work is progressing well and it is expected to be completed within schedule time. During the year under review, this SPV has availed a loan of Rs.624.87 Crores out of the total project loan. As on March 31, 2017, this SPV''''s authorized share capital was Rs.216 Crores and paid up share capital was Rs.186.43 Crores.


Kaithal Tollway Pvt. Ltd.


The project''''s construction work is progressing well and it is expected to be completed within schedule time. During the year under review, this SPV has availed a loan of Rs.502.20 Crores out of the total project loan. As on March 31, 2017, this SPV''''s authorized and paid up share capital was Rs.328 Crores.


IRB Westcoast Tollway Pvt. Ltd.


The project''''s construction work is in progress and it is expected to be completed with some delay caused due to delay in approvals from the Government. During the year under review, this SPV has availed a loan of Rs.375.27 Crores out of the total project loan. As on March 31, 2017, this SPV''''s authorized and paid up share capital was Rs.174.19 Crores.


During the year under review, your Company has incorporated 3 subsidiary companies viz. Kishangarh Gulabpura Tollway Pvt. Ltd., CG Tollway Pvt. Ltd. and Udaipur Tollway Pvt. Ltd.


The list of subsidiary companies is provided in “Annexure A”.


Your Company has 14* projects under operations and maintenance. Your Company has in-house expertise in handling the operation and maintenance of BOT road Projects. The SPVs routinely carries out maintenance of toll roads, including periodic and major maintenance.


* Includes 6 projects transferred to IRB InvIT Fund in May, 2017, in respect of which IRB is responsible for Operations and Maintenance.


During the year, your Company''''s operational projects have witnessed traffic growth in line with overall economic activities in the country.


PROJECTS RELATED UPDATES


IRB Ahmedabad Vadodara Super Express Tollway Pvt. Ltd.


This SPV has been operating and maintaining the NE -1 & NH-8 section between Ahmedabad to Vadodara since January 2013 & December 2015 respectively.


Pursuant to the measures approved by the Cabinet Committee on Economic Affairs (CCEA) for revival of the construction sector directing government agencies to pay "75% of the arbitral award amount against Bank Guarantee where government agencies have challenged the arbitral award". This SPV had received from National Highways Authority of India (NHAI) Rs.20.55 Crores against the Bank Guarantee submitted by this SPV as part of 75% of the Arbitral Award amount pronounced by the Arbitral Tribunal.


IRB Goa Tollway Pvt. Ltd.


The NHAI had terminated the Project of this SPV in November 2011 subsequent to which the SPV had lodged claims under the Arbitration Proceedings. During the year, the matter has been decided in favour of this SPV and pursuant to the measures approved by the Cabinet Committee on Economic Affairs (CCEA) for revival of the construction sector directing government agencies to pay "75% of the arbitral award amount against Bank Guarantee where government agencies have challenged the arbitral award"; this SPV had received from NHAI Rs.241.89 Crores against the Bank Guarantee submitted by this SPV as part of 75% of the Arbitral Award amount pronounced by the Arbitral Tribunal.


Ideal Road Builders Pvt. Ltd.


Concession period for this SPV''''s project viz. Thane Bhiwandi Bypass Project, expired on May 13, 2017 and this SPV has handed over the Project to the MoRTH.


Mhaiskar Infrastructure Pvt. Ltd.


The Maharashtra State Road Development Corporation Limited ("MSRDC") had issued Letter of Award in September 2014 to the Company for the Project of Operation & Maintenance of Yashwantrao Chavan Expressway and Mumbai Pune section of NH-4 along with execution of additional works on Mumbai Pune section of NH-4, on DBFOT basis with toll rights in the state of Maharashtra ("Mumbai Pune Phase II Project"). During the year, this SPV has received a letter from MSRDC informing termination of concession agreement for Mumbai Pune Phase II Project.


The SPV has been operating and maintaining the NH-4 and Expressway (collectively Phase - I Project) between Mumbai to Pune and would continue to operate & maintain Phase - I Project till end of the concession period in August, 2019.


Your Company has been following the practice to own & control 100% of its subsidiaries for better governance and operational efficiencies. Accordingly, your Company completed acquisition of remaining 26% stake in M.V.R. Infrastructure and Tollways Pvt. Ltd. and remaining 34% in Aryan Infrastructure Investments Pvt. Ltd. thereby making them wholly owned subsidiaries of your Company.


There has been no change in the nature of business of the subsidiaries, during the year under review. A statement containing salient features of the financial statements of the subsidiary companies is also included in the Annual Report.


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


SHIFTING OF REGISTERED OFFICE


Your Board of Directors approved shifting of the Registered Office of the Company with effect from July 1, 2017 to "Wing - A, 2nd Floor, Office No. 201, Universal Business Park, Chandivali Farm Road, Off Saki Vihar Road, Andheri (E), Mumbai 400 072", which is within the local limits of Mumbai city.


DIRECTORS


Mr. Sudhir Rao Hoshing (holding DIN 02460530), Joint Managing Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. Your Directors recommend his re-appointment.


On May 30, 2017, pursuant to recommendation of Nomination & Remuneration Committee of the Board, Mr. Mukeshlal Gupta (holding DIN 02121698), Whole-time Director of the Company was appointed as Joint Managing Director of the Company, subject to approval of shareholders, for a period of 5 years with effect from May 30, 2017. Appropriate resolutions seeking your approval for the same has already been included in the Notice of the Annual General Meeting.


On July 24, 2017, pursuant to recommendation of Nomination & Remuneration Committee of the Board, Mr. Virendra D. Mhaiskar (holding DIN 00183554), Chairman & Managing Director of the Company was reappointed as a Managing Director of the Company, subject to approval of shareholders, for a period of 5 years with effect from September 7, 2017. Appropriate resolutions seeking your approval for the same has already been included in the Notice of the Annual General Meeting.


All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.


During the year, Mr. Govind G. Desai resigned from post of Director of the Company with effect from May 19, 2016. Mr. Suresh Kelkar and Mr. B. L. Gupta also resigned from post of Director of the Company with effect from July 27, 2016 and August 1, 2016 respectively. The Board of Directors wish to place on record their sincere appreciation for the contributions made by Mr. Govind G. Desai, Mr. Suresh Kelkar and Mr. B. L. Gupta during their tenure as a Director of the Company.


BOARD EVALUATION


Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The manner in which the evaluation has been carried out has been covered in the Corporate Governance Report.


REMUNERATION POLICY


The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.


The criteria for appointment of Board of Directors and Remuneration Policy of your Company is annexed herewith as “Annexure B”.


MEETINGS


The details of the number of Board and Committee meetings of your Company held during the financial year, indicating the number of meetings attended by each Director is set out in the Corporate Governance Report.


The Composition of various committees of the Board of Directors is provided in the Corporate Governance Report.


INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY


The Company has an Internal Control System including Internal Financial Controls, commensurate with the size, scale and complexity of its operations as approved by Audit Committee and the Board. The Internal Financial Controls are adequate and working effectively.


The scope and authority of the Internal Audit is laid down by the Audit Committee and accordingly the Internal Audit Plan is laid out. To maintain its objectivity and independence, the Internal Auditors reports to the Chairman of the Audit Committee of the Board.


The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit, process owners/concerned departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.


Further, the Board of each of the Group Companies have carried out comprehensive analysis of its business activities and processes carried out by them and laid down Internal Financial Controls which are adhered to by the Group Companies.


OTHER DISCLOSURE


Disclosure as per Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is provided as “Annexure C”.


VIGIL MECHANISM / WHISTLE BLOWER POLICY


The Company has established/formed a vigil mechanism to deal with genuine concerns of the employees and Directors. All employees and Directors are made aware of the mechanism. The Company has established a system to ensure effective functioning of the mechanism.


CORPORATE GOVERNANCE


As required by SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, Reports on the Corporate Governance and Management Discussion and Analysis form part of the Annual Report. A Certificate from a Practicing Company Secretary on the compliance with the provisions of Corporate Governance is annexed to the Corporate Governance Report.


EXTRACT OF ANNUAL RETURN


The extract of the Annual Return in Form MGT 9 is annexed herewith as “Annexure D”.


INVESTOR EDUCATION AND PROTECTION FUND (IEPF)


Pursuant to the provisions of Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules, as amended, the Company has transferred the unclaimed or un-encashed dividends for financial years upto 2009 to the Investor Education and Protection Fund (IEPF) established by the Central Government. The Company transfers the unclaimed or un-encashed dividend to IEPF after the expiry of seven years from the date of transfer to unpaid dividend account. As per said rules, shares in respect of which dividend has been remained unclaimed for a period of last seven consecutive years or more would be transferred to IEPF. Your Company has already sent specific communication to the concerned shareholders at their registered address, inter alia, providing the details of the shares being transferred to IEPF. The Company has also made available complete details of the concerned shareholders whose share(s) are liable for transfer to IEPF on its website at www.irb.co.in.


STATUTORY AUDITORS


M/s. S. R. Batliboi & Co. LLP (Firm Registration No. 301003E/ E300005), Chartered Accountants and M/s. Gokhale & Sathe (Firm Registration No. 103264W), Chartered Accountants were appointed as Joint Statutory Auditors of your Company and they will continue till the conclusion of this Annual General Meeting. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants is completing their tenure and would not be eligible for reappointment as per provisions of the Companies Act, 2013 and rules made thereunder.


M/s. Gokhale & Sathe, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.


Your Company has also received a communication from M/s. B S R & Co. LLP, Chartered Accountants, confirming their willingness to act as the Joint Auditor of the Company in place of the outgoing Auditor M/s. S. R. Batliboi & Co. LLP, Chartered Accountants.


M/s. B S R & Co. LLP, Chartered Accountants have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.


Necessary resolution to consider above appointment / ratification is included in the Notice of the 19th Annual General Meeting.


COST AUDITORS


Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the cost audit records are to be maintained by the Company. Your Directors appointed Mrs. Netra Shashikant Apte, Practicing Cost Accountant (Membership No. 11865 and Firm Registration No. 102229) to audit the cost accounts of the Company for the financial year 2016-17 on a remuneration of Rs.1,00,000/- per annum. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''''s ratification for the remuneration payable to Mrs. Netra Shashikant Apte, Cost Auditor is included in the Notice convening the Annual General Meeting.


SECRETARIAL AUDIT


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Makarand M. Joshi & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for financial year 2016-17. The Report of the Secretarial Audit Report for financial year 2016-17 is annexed herewith as “Annexure E”.


FIXED DEPOSITS


Your Company has not accepted or renewed any deposit from public during the year under review.


RELATED PARTY TRANSACTIONS


All related party transactions that were entered into during the financial year were in compliance with the requirement of the Companies Act, 2013 and the Rules framed thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.


All Related Party Transactions are placed before the Audit Committee and also the Board, as the case may be, for approval.


A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval/ noting on a quarterly basis.


There are no materially significant Related Party Transactions entered into by the Company with Promoters, Directors, Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.


As per applicable provisions of the Companies Act, 2013, the details of contracts and arrangements with related parties in Form AOC 2 are annexed herewith as “Annexure F”.


The policy on Related Party Transactions as approved by the Board is uploaded on the Company''''s website.


SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS


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


RISK MANAGEMENT POLICY


The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.


DIRECTORS’ RESPONSIBILITY STATEMENT


To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:


a) that in the preparation of the annual financial statements for the financial year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;


b) that such accounting policies as mentioned in Note 3 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;


c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;


d) that the annual financial statements have been prepared on a going concern basis;


e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;


f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.


HUMAN RESOURCE MANAGEMENT


Manpower is one of the key resources which company deploys for its business activities. Over 5,300 skilled and dedicated employees help the Group to execute, maintain and operate world-class projects.


Respect for individual, open work culture, effective communication, fair and equitable treatment and welfare of employees are significant employee value propositions, which help the Group to retain a pool of large number of highly engaged professionals and generate high level of trust amongst its employees. These qualities also won us an award as "Dream Companies to work for in Infrastructure Sector" and "Dream Companies to Work for in India - 57th rank" by Times Ascent in 2017. The company was also recognized and awarded as one of the "50 Most Caring Companies in India" by World CSR Congress in February 2015. No wonder that your Company remains ''''employer of choice'''' in the infrastructure sector.


CORPORATE SOCIAL RESPONSIBILITY


IRB Group believes in making meaningful and lasting contribution to the societies in which it operates. Being engaged in the development of infrastructure facilities, we clearly realize that the foundations are the bedrock upon which all the future progress will be made. Hence, the Group values and ardently promotes activities which contribute in building strong foundations of the society in which we operate. Under the guidance of the Board, the Group Companies has formulated CSR Policy which enables them to take up initiatives in various activities like providing education & healthcare, promoting gender equality, measures for the welfare of the armed forces etc.


Towards its commitment to help the underprivileged sections of the society, Group has focused on one area for its attention and that is Right to Education. We have established and are successfully running two model IRB Primary Schools for the children, one in Village Maalion Ka Jhopra in Tonk district in Rajasthan, with 308 students, and another one in Jakror Village, Pathankot with 140 students. All the students are being provided free education, uniforms and books. What is remarkable about this school is that besides the quality of education being provided, it is creating a new trail in encouraging girl children of the area in taking up education. In a traditional and backward rural societal segments of Rajasthan and Punjab, where educating girl child is not encouraged, your school has the distinction having more girl students than boy students enrolled in the school. The school has students from Pre-primary class to class VIII. All 32 students of first batch of the school from class VIII in Rajasthan School passed successfully. In the results of Rajasthan State Board Exams for Class VIII, out of 32 of our students, 23 students achieved grade "A" and 09 students grade "B". As the operations and teaching functions stabilise in Jakror Village school, Pathankot, we are now initiating preliminary acquisition activities for our third school in Maharashtra.


The Group continues to financially support and foster brilliant and promising sports persons and artists. The Group also continues to support many Engineering and Educational institutes for promoting their Educational and Cultural activities by financial support. An endowment fund only to provide merit cum means scholarships to deserving students is also functional since last few years.


The Group has been generously contributing to the various institutions which are engaged in providing primary as well as advance healthcare facilities to the public.


As an endeavour towards providing medical facilities and promote healthcare to the deserving people, your Company contributed Rs.7 Crores for construction of multi-facility hospital in Nashik, Maharashtra. Recently the Group collaborated with "ONCO Hopes", a team of medical professionals led by Dr. Anil Heroor, to launch mobile cancer care and vision restoration facilities to the people of rural areas in the vicinity of Thane and Dombivli. The Company gifted an air conditioned state of the art Mobile Cancer Screening and Mammography & Vision Restoration Van is equipped with fully automated computer radiography along with a mammography machine, operating table with equipments for vision restoration treatments. The mobile center has been designed with the objective of screening to maximum number of patients for cancer as well as preventable eye diseases. The group has also committed to its regular maintenance and operational costs of conducting regular screening camps in the rural areas.


The Group also contributed to organization engaged in Swachh Bharat Mission towards provision of sanitation facilities.


The Group continues the spirit of supporting worthy social causes. Many social & cultural institutions continue to be supported by the Group without seeking any publicity or glorification in line with the Company''''s ethos that to serve humanity is the best service of all - of course in addition to constructing world class highways!


CSR Policy adopted by the Board is available on the website of the Company www.irb.co.in.


The Annual Report on CSR activities is annexed herewith as “Annexure G”.


PARTICULARS OF EMPLOYEES


Details of remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure H”.


Particulars of employee remuneration as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.


Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the said information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary at the registered office of the Company.


BUSINESS RESPONSIBILITY REPORT


As stipulated under the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Annual Report as “Annexure I”.


CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO


There was no earning in the foreign currency, while expenditure during the year was '''' 0.71 Crores.


Since the Company does not have any manufacturing facility, the other particulars required to be provided in terms of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable.


ACKNOWLEDGEMENTS


Your Directors take this opportunity to thank the Ministry of Road Transport & Highways, National Highways Authority of India, Maharashtra State Road Development Corporation Ltd., Maharashtra Industrial Development Corporation, Public Works Dept., various State Governments, Central Government for their support and guidance. Your Directors also thank Ministry of Corporate Affairs, Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd., Regulators, Financial Institutions and Banks, Credit Rating Agencies, Stakeholders, Suppliers, Contractors, Vendors and business associates for their continuous support. The Company also looks forward to their support in future. Also, your Directors convey their appreciation to the employees at all levels for their enormous personal efforts as well as collective contribution to the Company''''s growth.


For and on behalf of the Board of Directors


Virendra D. Mhaiskar


Chairman & Managing Director


Registered Office: Wing - A, 2nd Floor, Office No. 201,


Universal Business Park, Chandivali Farm Road,


Off Saki Vihar Road, Mumbai 400 072


Place: Mumbai


Date: July 24, 2017

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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