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Directors Report of Madhucon Projects Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the 25th Annual Report of the Company together with the Audited Financial Statements for the year ended March 31, 2015.

1. FINANCIAL SUMMARY:

(Rupees in Lakhs)

Particulars 2014-2015 2013-2014

Gross Income 116496.07 89779.64

Profit before Depreciation & Taxation 10020.39 9673.90

Depreciation 3777.85 4701.86

Profit before Taxation 6242.54 4972.04

Provision for Taxation

i) Current Tax 1308.50 1042.17

ii) Deferred Tax 0 758.19

Profit after Taxation 4934.04 3171.68

Profit available for appropriation 4934.04 3171.68

APPROPRIATION

General Reserve 493.40 317.17

Proposed Dividend 73.79 147.59

Corporate Tax on Proposed Dividend 11.97 28.13

Balance transferred to Balance Sheet 4264.92 2768.75

Earnings per Share (Rs.) 6.69 4.30

Book Value (Rs.) 100.92 95.71

Paid-up Equity Share Capital 740.32 740.32

Reserves & Surplus 73731.41 69888.83

2. EXTRACT OF ANNUAL RETURN:

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

3. BOARD MEETINGS:

The Board met 19 (Nineteen) times during the financial year 2014-2015. The following are the dates of meeting convened in different Quarters of the financial year.

First Quarter Second Quarter

Meeting Date Meeting Date No. No.

515 02.04.14 519 01.07.14

516 12.04.14 520 17.07.14

517 30.05.14 521 09.08.14

518 03.06.14 522 21.08.14

523 03.09.14

524 25.09.14

Third Quarter Fourth Quarter

Meeting Date Meeting Date No. No.

525 08.10.14 530 23.01.15

526 15.10.14 531 14.02.15

527 14.11.14 532 03.03.15

528 25.11.14 533 26.03.15

529 26.12.14

4. DIRECTORS' RESPONSIBILITY STATEMENT:

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

i. That in the preparation of annual accounts for the financial year ended 31st March, 2015; the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

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

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

iv. That the Directors have prepared the annual accounts for the year ended 31st March 2015 on a "Going Concern" basis.

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

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

5. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). Further, there has been no change in the circumstances which may affect their status as independent director during the year.

6. NOMINATION AND REMUNERATION POLICY:

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

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

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

8. RELATED PARTY TRANSACTIONS:

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

9. STATE OF THE COMPANY'S AFFAIRS:

Your Company is the flagship Company of Madhucon Group. The Company is a well-established Construction Company and a leading Contractor in executing projects, in various sectors – Transportation (National & State Highways, Roads, Railways & Ports), Irrigation & Water Resources, Buildings & Property Development, Mining (Coal & other Minerals), Energy (Generation, Transmission & Distribution) and other Infrastructure Projects.

Further information on the Company's Business and the developments, opportunities and outlook of the Company and the industry in which it operates are discussed in detail in the Management Discussion & Analysis, which is enclosed in ANNEXURE II.

10. RESERVES:

During the year, the Company has transferred an amount of Rs.493.40 Lakh to General Reserves.

11. DIVIDEND:

Your Directors are pleased to recommend an Equity Dividend of 10% on paid up equity capital for the year ended 31.03.2015, subject to approval of the members at this Annual General Meeting. Your Directors feel gratified that the Company has been declaring dividend continuously during the last 12 years since 2002-03.

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

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

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

The information as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in the ANNEXURE III and is attached to this report.

14. RISK MANAGEMENT:

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

15. CORPORATE SOCIAL RESPONSIBILTY (CSR) POLICY:

Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013, CSR Committee of the Board of Directors was formed to recommend;

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

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

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

16. FORMAL ANNUAL EVALUATION:

The Nomination and Remuneration Committee of the Board has laid down the criteria for performance evaluation of Board and its committees and does the evaluation process. The statement indicating the manner in which formal annual evaluation of the Board and its committees are given in the report on Corporate Governance as annexed herewith.

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

A separate statement containing the salient features of the financial statements of the subsidiary Companies/ Associate Companies/Joint Ventures is prepared in Form AOC-1 as per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 and is attached in ANNEXURE V.

18. CONSOLIDATION OF ACCOUNTS:

In compliance with Clause 32 of the Listing Agreement entered into with the Stock Exchanges and in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards AS-21 and AS-27 on consolidated financial statements, read with the Accounting Standard AS-23 on Accounting for Investments in Associates, Your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2015, duly audited by the Statutory Auditors which forms part of the Annual Report.

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

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

Sl. No. Name of the Director Appointed Date of appointment/ /Resigned Cessation

1 Sri. Kandimalla KVN Prasad, Appointed 09.08.2014 Independent Director

2 Smt. Ch. Lakshmi Kumari, Appointed 09.08.2014 Independent Director

3 Sri.C.Venkateswara Rao, Resigned 25.09.2014 Independent Director

Appointment of Director/Key Managerial Person subsequent to the financial year end:

On the recommendations of the Nomination and Remuneration Committee and subject to concurrence and approval of shareholders in the ensuing Annual General Meeting, Sri Mohammad Shafi (DIN- 07178265) has been appointed as an Additional Director and Whole- time Director of the Company by your Board at its meeting held on 30.05.2015 for a period of 3 (Three) years on a monthly remuneration of Rs.2,00,000/- (Rupees Two Lakhs only) inclusive of all perquisites.

20. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has adequate system of Internal Financial Control developed by our in-house Internal Audit team consisting of qualified and experienced accounting, costing and technical professionals. The Internal Audit Team suggests various means of cost reduction and cost control measures in all resources used in the Company. The Internal Financial Control Systems and the Reports of Internal Audit will be reviewed by the Audit Committee in consultation with the Internal Auditors and Statutory Auditors and experts in the field thereafter by Board of Directors.

21. VIGIL MECHANISM:

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

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

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013 Internal Complaints Committee (ICC) has been set us to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary trainees) are covered under this policy. During the financial year 2014-15, the Company received no complaints on sexual harassment.

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

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

24. DEPOSITS:

The Company had not accepted or invited any Deposits and consequently no deposit has matured / become due for re-payment as on 31st March 2015

25. COMPOSITION OF AUDIT COMMITTEE:

The Audit Committee was re-constituted on 14.11.2014 and comprised of the following directors as on 31st March 2015:

1. Sri Kandimalla KVN Prasad, Independent Director as Chairman

2. Smt. Ch. Lakshmi Kumari, Woman Independent Director as Member

3. Sri N. Seethaiah, Managing Director as Member

26. COMPOSITION OF STAKEHOLERS' RELATIONSHIP COMMITTEE:

The Stakeholders' Relationship Committee was constituted on 14.11.2014 comprised of the following directors as on 31st March 2015:

1. Sri Kandimalla KVN Prasad, Independent Director as Chairman

2. Sri P Madhava Rao, Independent Director as Member

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

27. STATUTORY AUDITORS AND THEIR REPORT:

M/s Kota & Company, Statutory Auditors (FRN-011982S) of the Company, expressed their willingness to be appointed for the financial year 2015-2016 and to hold office up to the conclusion of the next Annual General Meeting, if they are appointed at this Annual General Meeting. They have furnished a certificate to the effect that their proposed appointment, if made, will be in accordance with the limits specified under 141(1)(g) of the Companies Act, 2013.

28. COST AUDITORS:

The Board of Directors, on recommendation of Audit Committee subject to the approval of the Central Government, re-appointed M/s BVR & Associates, Cost Accountants (Registration No. 000453) as the Cost Auditors of the Company to conduct audit of cost records made and maintained by the Company pertaining to Works Contracts Construction of Roads, etc. for financial year commencing on 1st April, 2015 and ending on 31st March, 2016.

29. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Rakhi Agarwal & Associates has been appointed as Secretarial Auditors of the Company for the financial year 2014-15 to carry out the Secretarial Audit and issue report there on. Secretarial Audit report as issued by Ms. Rakhi Agarwal & Associates, Practicing Company Secretaries is annexed to this Report as ANNEXURE VI

30. LISTING WITH STOCK EXCHANGES:

The Company's securities have been listed Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Luxembourg Stock Exchange. Listing fee has been paid to Stock Exchanges within the prescribed time limit as set in the clause 38(a) of Listing Agreement for the Financial Year 2015-2016.

31. PARTICULARS OF EMPLOYEES:

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

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

32. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report as ANNEXURE VIII.

Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

33. ACKNOWLEDGEMENTS:

Your Directors express their appreciation for the support and co-operation of the Bankers, Central and State Government Authorities including National Highway Authorities of India (NHAI), Irrigation & CAD Department, Central Government, Government of various States, Clients, Consultants, Employees, Suppliers etc., for their continued support and encouragement from time to time.

For and on behalf of the Board

Place: Hyderabad N. Seethaiah P. Madhava Rao

Date: 14.08.2015 Managing Director Independent Director

DIN-00784491 DIN-00385838


Mar 31, 2013

The Directors have pleasure in presenting the 23rd Annual Report on "Business Operations, Performance & Progress" of the Company together with the Audited Financial Statements for the year ended March 31, 2013.

A. FINANCIAL RESULTS:

(Rupees in Lakhs)

2012-2013 2011-2012

Gross Income 106384.24 182294.22

Profit before Depreciation & Taxation 8880.65 9679.40

Depreciation 5459.18 5115.80

Profit before Taxation 3421.47 4563.60

Provision for Taxation

i) Current Tax 684.56 1564.61

ii) Deferred Tax (639.99) (477.18)

Profit after Taxation 3376.90 3476.17

Profit available for appropriation 3376.90 3476.17

APPROPRIATION

General Reserve 337.69 347.62

Proposed Dividend 73.79 73.79

Corporate Tax on Proposed Dividend 11.97 11.97

Balance transferred to Balance Sheet 2953.45 3042.71

Earnings per Share (Rs.) 4.71

Book Value (Rs.) 91.53 87.07

Paid-up Equity Share Capital 740.32 740.32

Reserves & Surplus 66802.92 63511.78

B. REVIEW OF OPERATIONAL PERFORMANCE:

During the year under review, your Company has achieved a gross income of Rs. 106384.24 lakhs as against Rs. 182294.22 lakhs in the previous year. The Company has earned a net profit of Rs. 3376.90 lakhs as against Rs. 3476.17 lakhs in the previous year after providing for depreciation of Rs. 5459.18 lakhs as against Rs. 5115.80 lakhs in the previous year.

Your Company has consolidated its financial statements combining the financial information from its various subsidiary companies as per the applicable Accounting Standards and as a result, the consolidated turnover and consolidated profit/loss after elimination of intra group transactions are shown as Rs. 90717.79 lakhs and Rs. (27674.48) lakhs respectively.

VIII Accounting Standards:

The financial statements are prepared in accordance with the requirement of the amended Schedule-VI of the Companies Act, 1956, which is made mandatory by Ministry of Corporate Affairs (MCA) from 20011-12 and as per the Generally Accepted Accounting Principles (GAAP) and also in accordance with the applicable Accounting Standards and guidance notes issued by the Institute of Chartered Accountants of India (ICAI).

IX. Share Capital:

The Paid-Up Equity Share Capital of the Company is Rs.7,37,94,940/- consisting of 7,37,94,940 Equity Shares of Re.l/- each.

X. Dividend:

Your Directors are pleased to recommend an Equity Dividend of 10% (10 Paisa per share) on paid up equity capital for the year ended 31.03.2013, subject to approval of the members at this Annual General Meeting.

XI. Subsidiary Companies:

The Company has 9 (Nine) Indian Subsidiaries and 1 (One) Foreign Subsidiary as on 31.3.2013. The details of investments held by Madhucon Projects Limited in the following subsidiary companies are given below:

INDIAN SUBSIDIARY COMPANIES:

No. of Equity Shares held by SI. Name of the Company Date of No incorporation Projects Limited

1 Madhucon Infra Limited 22.02.2006 122,20,27,045 (CIN: U45200AP2006PLC049235)

2 Madurai-Tuticorin Expressways 11.05.2006 8,85,61,500 Limited (CIN-U45203AP2006PLC050114)

3 Madhucon Energy Limited 24.03.2000 1,00,090 (CIN- U45309AP2000PLC034007)

4 Madhucon Mega Mall Private 18.12.2007 20,000 Limited (CIN-U45400AP2007PTC056734)

5 Nama Hotels Private Limited 24.12.2007 2,71,21,200 (CIN-U55101AP2007PTC056818)

6 Madhucon Heights Private Limited 18.12.2007 20,000 (CIN-U45209AP2007PTC056733)

7 Agastyamuni Hydro Power Private 28.04.2010 6,000 Limited (U40108AP2010PTC068128)

8 Rudraprayag Hydro Power Private 28.04.2010 6,000 Limited (U40108AP2010PTC068130)

9 Tiiwara Hydro Power Private 28.04.2010 6,000 Limited (U40300AP2010PTC068127)

Name Face Value of Value of Percent Equity Equity age Shares shares (Rs) (%) (Rs.)

Madhucon Infra Limited 10 1222,02,70,450 94.89

Madurai-Tuticorin Expressways 10 88,56,15,000 54.12

Madhucon Energy Limited 5 5,00,450 99.95

Madhucon Mega Mall Private 10 2,00,000 66.66

Nama Hotels Private Limited 10 27,12,12,000

Madhucon Heights Private Limited 10 2,00,000 66.66

Agastyamuni Hydro Power Private 10 60,000 60.00

Rudraprayag Hydro Power Private 10 60,000 60.00

Tiiwara Hydro Power Private 10 60,000 60.00

FOREIGN COMPANIES:

No. of Equity Shares held by SI. Name of the Company Date of No incorporation Projects Limited

1 Madhucon Natural 09.03.2006 750 Resources Limited, Singapore (200603264W)

Name Face Value of Value of Percent Equity Equity age Shares shares (Rs) (%) (Rs.)

Madhucon Natural S$l/- S$750 (Equivalent to 75 00 Rs.21036)

STEP DOWN SUBSIDIARIES:

1. Madhucon Agra-Jaipur Expressways Limited

2. TN (DK) Expressways Limited

3. Trichy-Thanjavur Expressways Limited

4. Chhapra-Hajipur Expressways Limited

5. Simhapuri Energy Limited

6. Madhucon Toll Highways Ltd

7. Vijayawada Machlipatnam Expressways Ltd

8. Barasat Krishnanagar Expressways Ltd

9. Ranchi Expressways Ltd

10. PT Madhucon Indonesia, Indonesia

11. PT Madhucon Sriwijaya Power, Indonesia

XII. Consolidation of Accounts:

In accordance with the Accounting Standards AS-21 on "Consolidated Financial Statements" and AS-23 on "Accounting for Investments in Associates in Consolidated Financial Statements" read with Accounting Standard AS-27 on "Financial Reporting of Interests in Joint Ventures", Listing Agreement and Section 212 of the Companies Act 1956, the figures of the subsidiary Companies are consolidated with figures of Madhucon Projects Limited.

The Board of Directors of the Company has, by resolution, given consent for not attaching the Balance Sheet of Subsidiary Companies concerned. The Company has presented the Consolidated Financial Statements of Holding Company and all its Subsidiaries in this Annual Report duly audited by its Statutory Auditors.

The Annual Accounts of the Subsidiary Companies and the related detailed information will be made available to shareholders of the Holding and Subsidiary Companies seeking such information at any point of time. The Annual Accounts of Subsidiary Companies will also be kept for inspection by any shareholder at the Registered Office of the Company and also at its Subsidiary Companies. The Company will furnish a hard copy of details of accounts of Subsidiaries to any shareholder on demand.

XIV. Corporate Governance:

In terms of compliance with the requirement of clause 49(VI)(i) of Listing Agreement, a separate section titled "Corporate Governance" containing the due compliance on corporate governance is given in the Directors'' Report forming the part of this Annual Report.

In terms of compliance with the requirement of clause 49(VII) of Listing Agreement, the Auditors'' certificate confirming the compliance of the conditions of the Corporate Governance is annexed hereto which form the part of this Annual Report and the same will be sent to National and Bombay Stock Exchanges along with the Annual Report.

XV. Directors:

Sri S. Vaikuntanathan, Wholetime Director on completion of his tenure on 04.03.2013 tendered his resignation and relinquished his office of Director of the Company.

Sri K. Srinivasa Rao, Director appointed by your Directors as Wholetime Director of the Company w.e.f. 15.11.2012.

Dr. C. Venkateshwara Rao, Independent Director who retires by rotation at this Annual General Meeting is eligible to be re-appointed as Independent Director of the Company and who has given his consent in writing to act as Independent Director, if appointed at this Annual General Meeting. The Board of Directors of the Company recommends the appointment of Dr. C. Venkateshwara Rao, as Independent Director of the Company, in the best interest of the Company. The profile of Dr. C. Venkateshwara Rao is given in the report of Corporate Governance.

Sri N Seethaiah, Managing Director was re-appointed for a further period of 3 years by the Board of Directors of the Company w.e.f. 01.05.2013 on the existing remuneration of Rs.5,00,000/- including all allowances and perquisites, subject to concurrence of Shareholders and compliance of applicable provisions of the Companies Act, 1956.

XVI. Directors'' Responsibility Statement:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, it is hereby confirmed:

a) That in the preparation of annual accounts for the financial year ended 31st March, 2013; the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

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

c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

d) That the Directors have prepared the annual accounts for the year ended 31st March 2013 on a "Going Concern" basis.

XVII. Industrial Relations:

The relations with the employees are cordial.

XVIII. Deposits:

The Company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

XIX. Particulars of Employees:

As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the

Directors'' Report for the year ended 31st March, 2013, none of the employees of the Company was in receipt of remuneration, which exceeds the limits fixed under Section 217 (2A) of the Companies Act, 1956, except Sri N. Seethaiah, Managing Director of the Company.

XX. Quality Management System - ISO 14001:2004

The Company has established a Quality Management System in Design, Execution, Operation & Maintenance of Irrigation & Water Resources Projects, Highway/ Road Projects, Power Transmission Projects, Building and Property Development Projects and Design & Execution of Power Projects and Over Burden Removal in Opencast Mining Projects in compliance with the International Quality System Standards - ISO 14001:2004. The Certificate No. IND13.5479U/E dated 18.02.2013 is valid up to 17.02.2016.

The Company is being obtained EMS-ISO 14001:2004 and OHSAS-18001:2007 registration.

XXI. Auditors:

M/s Kota & Company, Statutory Auditors (FRN-011982S) of the Company, expressed their willingness to be re-appointed for the financial year 2013-2014 and to hold office up to the conclusion of the next Annual General Meeting, if they are appointed at this Annual General Meeting. They have furnished a certificate to the effect that their proposed appointment, if made, will be in accordance with the limits specified under 224(1-B) of the Companies Act, 1956.

XXII. Information as per Sec- 217(1) (E) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of The Board of Directors) Rules, 1988):

The information as required Under Section 217(1) (e) of the Companies Act, 1956 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in the annexure attached to this Report.

XXIII. Acknowledgements:

Your Directors express their appreciation to the Foreign Collaborators, Joint Venture Partners, Bankers, Central and State Government Authorities including National Highway Authorities of India (NHAI), Irrigation & CAD Department, Central Government, Government of various States including Andhra Pradesh, Clients, Consultants, Employees, Suppliers etc., for their continued support and encouragement from time to time.

For and on behalf of the Board

Place: Hyderabad N. SEETHAIAH K. SRINIVASA RAO

Date: 14.08.2013 Managing Director Wholetime Director


Mar 31, 2011

The Members,

Madhucon Projects Limited

The Directors have pleasure in presenting the Twenty First Annual Report on "Business Operations, Performance & Progress" of the company together with the Audited Financial Statements for the year ended March 31, 2011.

A. FINANCIAL RESULTS:

(Rupees in Lakhs)

PARTICULARS 2010-2011 2009-2010

Gross Income 182486.27 134216.45

Profit before Depreciation & Taxation 11857.33 11587.40

Depreciation 4780.17 4642.70

Profit before Taxation 7117.42 6944.69 Provision for Taxation

i) Current Tax 4562.51 2566.22

ii) Deferred Tax (685.93) (199.19)

iii) Fringe Benefit Tax -

Profit after Taxation 3240.85 4577.66

Profit available for appropriation 3240.85 4577.66

APPROPRIATION

General Reserve 324.08 457.77

Proposed Dividend 184.49 295.18

Corporate Tax on Proposed Dividend 30.64 49.03

Balance transferred to Balance Sheet 2701.63 3775.69

Earnings per Share (Rs.) 4.39 6.20

Book Value (Rs.) 82.47 78.37

Paid-up Equity Share Capital 740.32 740.32

Reserves & Surplus 60121.38 57095.66

B. REVIEW OF OPERATIONAL PERFORMANCE:

During the year under review, your company has achieved a gross income of Rs. 182486.27 lakhs as against Rs. 134216.45 lakhs in the previous year registering a growth by 35.96%. The company has earned a net profit of Rs. 3240.85 lakhs as against Rs.4577.66 lakhs in the previous year after providing for depreciation of Rs. 4780.17 lakhs (Rs.4642.70 lakhs in the previous year).

Your Company has consolidated its financial statements combining the financial information from its various subsidiary companies as per the applicable Accounting Standards and as a result, the consolidated turnover and consolidated loss is shown as Rs.80269.19 lakhs and Rs.15959.18 lakhs respectively.

XIV. Corporate Governance:

In terms of compliance with the requirement of clause 49(VI)(i) of Listing Agreement, a separate section titled "Corporate Governance" containing the due compliance on corporate governance is given in the Directors' Report forming the part of this Annual Report.

In terms of compliance with the requirement of clause 49(VII) of Listing Agreement, the Auditors' certificate confirming the compliance of the conditions of the Corporate Governance is annexed hereto which form the part of this Annual Report and the same will be sent to National and Mumbai Stock Exchanges along with the Annual Report.

XV. Directors:

Dr. C. Venkateshwara Rao, Independent Director, who retires by rotation at this Annual General Meeting, is eligible to be re-appointed as Independent Director of the Company and who has given his consent in writing to act as Independent Director, if appointed at this Annual General Meeting. The Board of Directors of the company recommends the appointment of Dr.C.Venkateshwara Rao, as Independent Director of the Company in the best interest of the Company. The profile of Dr. C. Venkateshwara Rao is given in the report on Corporate Governance.

Sri S.Vaikuntanathan was appointed as Whole-time Director of the Company for a period of two years with effect from 5th March, 2009 and whose period of office expired on 4th March, 2011. The Board of Directors, at its meeting held on 25th February, 2011, has re-appointed him as Whole-time Director for a further period of two years with effect from 5th March, 2011 on terms and conditions mentioned in the resolution based on the recommendations of Remuneration Committee. The Board of Directors of the company recommends the appointment of Sri S.Vaikuntanathan, as Whole-time Director of the Company in the best interest of the company. The profile of Sri S.Vaikuntanathan is given in the report on Corporate Governance.

XVI. Directors' Responsibility Statement:

Pursuant to the requirement u/s 217 (2AA) of the Companies Act, 1956, it is hereby confirmed:

a) That in the preparation of annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures.

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

c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

d) That the Directors have prepared the annual accounts for the year ended 31st March 2011 on a "going concern" basis.

XVII. Industrial Relations:

The relations with the employees are cordial.

XVIII. Deposits:

The company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

XIX. Particulars of Employees:

As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors' Report for the year ended 31st March, 2011, none of the employees of the company was in receipt of remuneration, which exceeds the limits fixed under Section 217 (2A) of the Companies Act, 1956, except Sri.N.Seethaiah, Managing Director of the Company.

XX. Quality Management System - AN ISO 9001- 2008:

The Company has established a Quality Management System in Design, Execution, Operation & Maintenance of Irrigation & Water Resources Projects, Highway/Road Projects, Power Transmission Projects, Building and Property Development Projects and Design & Execution of Power Projects and Over Burden Removal in Opencast Mining Projects in compliance with the International Quality System Standards - ISO 9001-2008.

The Company is planning to obtain EMS-ISO 14001:2004 and OHSAS-18001:2007 registration during the year 2011-12.

XXI. Credit Rating Under Basel-II:

As per the "New Capital Adequacy Framework" based on Basel-II guidelines of RBI, your Company is rated by ICRA for different limits as follows:

Fund based / Non-Fund based limits - LA

Short term Debt/Commercial papers - A1

Long term Debt/NCD - LA

XXII. Auditors:

M/s Kota & Company, Statutory Auditors of the Company expressed their willingness to be re-appointed for the financial year 2011 - 2012 and to hold office up to the conclusion of the next Annual General Meeting, if they are appointed at this Annual General Meeting. They have furnished a certificate to the effect that their proposed appointment, if made, will be in accordance with the limits specified under 224(1-B) of the Companies Act, 1956.

XXIII. Information as per Sec- 217(1) (e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988:

The information as required u/s 217(1)(e) of the Companies Act, 1956 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in the annexure attached to this Report.

XXIV. Acknowledgements:

Your Directors express their appreciation to the Foreign Collaborators, Joint Venture Partners, Bankers, Central and State Government Authorities including National Highway Authorities of India (NHAI), Irrigation & CAD Department, Central Government, Government of various States including Andhra Pradesh, Clients, Consultants, Employees, Suppliers etc., for their continued support and encouragement from time to time.

For and on behalf of the Board

Place: Hyderabad N. SEETHAIAH S. VAIKUNTANATHAN

Date: 30.08.2011 Managing Director Whole-time Director


Mar 31, 2010

The Directors have pleasure in presenting the Twentieth Annual Report on "Business Operations, Performance & Progress" of the company together with the Audited Financial Statements for the year ended March 31, 2010.

A. FINANCIAL RESULTS:

(Rupees in Lakhs)

PARTICULARS 2009-2010 2008-2009

Gross Income 139386.28 104453.56

Profit before Depreciation & Taxation 11587.40 11648.12

Depreciation 4642.70 4334.22

Profit before Taxation 6944.69 7313.90

Provision for Taxation

i) Current Tax 2566.22 2586.36

ii) Deferred Tax (199.19) 21.49

iii) Fringe Benefit Tax - 15.06

Profit after Taxation 4577.66 4690.98

Profit available for

appropriation 4577.66 4690.98

APPROPRIATION

General Reserve 457.77 469.10

Proposed Dividend 295.18 295.18

Corporate Tax on

Proposed Dividend 49.03 50.17

Balance transferred

to Balance Sheet 3775.69 3876.54

Earnings per Share (Rs.) 6.20* 12.71**

Book Value (Rs.) 78.37* 145.27**

Paid-up Equity Share Capital 740.32 740.32

Reserves & Surplus 57095.66 52862.21

* The face value of equity share was split from Rs.2/- to Re.1/- w.e.f. 07.11.2009. ** The face value of equity share was Rs.2/-

B. REVIEW OF OPERATIONAL PERFORMANCE:

During the year under review, your company has achieved a gross income of Rs.139386.28 lakhs as against Rs.104453.56 lakhs in the previous year registering a growth by 33.44%. The company has earned a net profit of Rs.4577.66 lakhs as against Rs.4690.98 lakhs in the previous year after providing for depreciation of Rs.4642.70 Lakhs (Rs.4334.22 Lakhs in the previous year).

Your Company has consolidated its financial statements combining the financial information from its various subsidiary companies as listed as per the applicable Accounting Standards and as a result, the consolidated turnover and consolidated profit is shown as Rs. 144053.63 lakhs and Rs. 3106.98 lakhs respectively.

C. MANAGEMENT DISCUSSION AND ANALYSIS:

I. Economic and Industrial Structure and its Developments:

The Indian economy was facing global recession and it is under consolidation process. The government has to focus more on development of infrastructure sector to boost GDP growth by providing higher plan allocation and to sustain economic growth of 8%-9%.

a) Future Outlook:

Indian economy is yet to undergo structural changes to boost infrastructure sector in the next plan period at 35% during 2009-2013 and 8% up to 2012. The companies in infrastructure sector are backed with strong orders which translate in to revenue/earning potential in the coming years only through financial stimulus. Your company is giving major thrust in various infrastructure sectors to reap the benefit of growth in infrastructure sector.

b) Infrastructure Sector and Industry Overview:

The infrastructure development needs a projected investments requirement of USD 500 Billion and USD 1.5 Trillion in the year 2007-2012 and 2012-2017 respectively to trigger the growth. The investment in infrastructure in India has increased from 4.9% of GDP in 2002-2003 to 6% last fiscal.

i) Transport Sector:

Indian Highways is second largest road networks in the world aggregating 3.34 Million Kms which contributes 60% of freight and 80% of passenger traffic. The National Highways contribute to a mere 2% of Road Infrastructure of India. There are 259 National Highways in India covering over 52,000 Kms distance. Road sector would require an investment of USD 80 Billion in the next three-four years. In 2009-2010, 32 Road Projects have been awarded as against 8 in 2008-2009. Union Road Transport Ministry has awarded 3,600 Kilometer by March, 2010 against 52,000 Kms which reflect that there is huge gap where government needs to act upon. NHAI is likely to award 50 Projects in 2010-2011. The government shall increase the target for infrastructure investment using PPP model.

There is huge potential for highways development especially in National/Express highways. In India, the vehicles are growing at an average base of 11% per annum and road freight at the CAGR of 10%.

ii) Power Sector:

There shall be highest priority to the capacity addition in power sector to the extent of 1,00,000 MW to meet the increasing demand in the power. The Mega Power Policy needs to be modified to encourage the further capacity addition. Coal Regulatory Authority needs to be created as a level playing field in coal sector to regulate the coal sector and also need to establish a National Clean Energy Fund to ensure clean energy.

iii) Mining Industry:

There shall be more emphasis on scientific mining and to prevent un-authorised mining and zero waste mining. The regulatory environment needs to be strengthened to prevent un-authorised mining, to attract the investment and to encourage value addition in the mining using PPP model. State Government needs to set out a State Mineral Policy. Development of roads within the mining areas and connecting roads to railway stations/ports need to be given top priority.

c) Investment Opportunities:

There are vast investment opportunities in infrastructure sectors both in rural and urban areas, which shall be exploited through PPP Model. Therefore, private sectors have investment opportunities in infrastructure sectors. The long term financial institutions and venture capital fund evincing the interest in long term financial lending to the infrastructure sectors. Liberal tax holiday need to be provided to BOOT/BOT Projects in Power, Roads, Highways, Bridges, Airports, Ports, Railway Systems, Water Supply, Irrigation, Sanitation and Sewerage Systems. Infrastructure and green field projects shall be permitted to avail ECB to the extent of 100% of the total project cost for financing project. Investment Promotion and Infrastructure Development Cell in the Ministry of Industry need to be strengthened to oversee the investment opportunities in infrastructure industry.

d) Risks and Challenges:

Construction delays continue to be a concern factor which stems from number of factors outside the control of project sponsors, which includes land acquisition, regulatory approvals, inflation, litigation etc., which can delay the timely completion of the project and increase in cost of project. This can, in turn, lead to additional funding, additional cost of fund etc.

e) Approach to Regulation of Infrastructure Sector:

Uniform regulatory approach for all the key infrastructure sectors shall be provided by the Secretariat for the Committee on Infrastructure and Planning Commission to create a preferred destination for investments by the investors.

II. OPERATIONAL PERFORMANCE:

a) Highway Projects:

As on date, your company has completed 603 Lane Kms. of BOT projects owned by your company and 1130 Kms. is under progress.

i) BOT Toll Based Projects:

The performance and status of 5 BOT National Highway Projects are as follows:

Sl. No. of Name of the

No. Name of the Project Lane SPV

Kms.

1 Bharatpur-Mahwa 251 Madhucon Agra-Jaipur NH-11 BOT Project Expressways Limited

2 Karur - Dindigul NH-7 BOT Project 352 TN(DK)

Expressways Limited

3 Thanjavur - Trichy 288 Trichy - Thanjavur NH-67 BOT Project Expressways Limited

4 Madurai - Tuticorin 568 Madurai -Tuticorin NH - 45 BOT Project Expressways Limited

5 Chhapra - Hajipur NH-19 274 Chhapra - Hajipur DBFOT Annuity Basis Expressways Limited Project, Bihar

Name of the director Status of the Expected Project Commissio

ning

Bharatpur-Mahwa Completed --

NH-11 BOT Project

Karur - Dindigul

NH-7 BOT Project Completed --

Thanjavur - Trichy In Progress October

NH-67 BOT Project 2010



Madurai - Tuticorin In Progress October

NH - 45 BOT Project 2010

Chhapra - Hajipur NH-19 In Progress December

DBFOT Annuity Basis 2012

Project, Bihar

Your company has built over 7% of National Highway in the golden Quadrilateral in India. Your company has participated in number of ongoing tenders.

ii) BOQ Projects:

Sl. No. of Date of Actual / Status of

No. Name of the Project Lane Expected the Project

Kms. Completion of

the Project

1 Jhanjapur-Dharbanga Section 168 31.03.2012 In Progress NH-57, Bihar,NHAI.

2 Gopalganj-Muzaffarpur, 190 31.03.2011 In Progress NH-28, Bihar, NHAI

3 Nagaon- Dharamtul, 120 24.12.2011 In Progress NH-37, Assam, NHAI

4 Anik Panjarpole Link Road 30 31.01.2011 In Progress Project(APLR),MMRDA, Maharashtra

5 Spine Road-Pimpri 100 31.12.2010 In Progress Chinchwad Project, PCNTDA, Pune

6 Guna-Fathehgarh-Paron 307 31.12.2009 Completed Project Road No.8,MPRDC.

b) Irrigation Projects:

Your Company is executing 5 major irrigation projects in the State of Andhra Pradesh.

c) Energy Projects:

i) Thermal Power Plant -Tamminapatnam, Chillakur Mandal, SPSR, Nellore District.

Phase - I

The EPC Contract for execution of 2x135 MW being awarded by Simhapuri Energy Private Limited (SEPL) will be completed in the month of March, 2011.

Phase-II

Your company was awarded with EPC contract for execution of 2x150 MW from Simhapuri Energy Private Limited (SEPL) in the month of April 2010.

ii) Jharkhand Thermal Power Project:

MOU has been entered in to with Jharkhand Government for execution of 1000 MW Power Plant. The clearance for water and coal linkage from the Ministry concerned is awaited.

d) Mining Project:

The Company obtained a Contract from Northern Coal Field Limited for removal of over burden of first dig (solid) in Singrauli. Your company has deployed many sophisticated machinery and equipment at site. The project is under progress. Your company has participated in many ongoing tenders in mining during the year under review.

e) Building and Property Development Activity:

Your company, as EPC Contractor, has undertaken the construction of Nama Hotels and Madhucon Heights at Kukatpally, APHB Colony, Hyderabad, Andhra Pradesh.

i) Hotel: Your Company has taken up a construction of Four Star Hotel cum Service Apartments at KPHB Colony, Hyderabad including service apartments with helipad facility. The construction work is in progress. The requisite statutory approvals have been obtained from various authorities concerned.

ii) Mega Mall: Your Company will take up a construction of Mall with Multiplex and has integration with MRTS Station. Requisite approvals from the concerned authorities are under consideration.

iii) Office Complex: Your Company has taken up the construction of complex which is in progress. The requisite statutory approvals have been obtained from various authorities concerned.

f) Crusher Project:

Your company is contemplating to establish a commercial setup for crusher division in highly potential places in order to use in-house equipments for commercial purposes for adding to the profit growth of the company.

g) Overseas Project:

Your company is executing a Road Project in Nepal. Your company is pre-qualified for Road Projects in Uganda and Republic of Yemen. Your Company is contemplating in to overseas ventures in Australia, Zimbabwe, South Africa, Indonesia etc.

III. Risks and Concerns:

Your company may envisage the commercial, political, legal and technological risk which may affect the business and earning potential of your company.

IV. Internal Control System:

Your Company has adequate system of internal control comprising of in-house Internal Audit team consisting of qualified and experienced accounting, costing and technical professionals. The internal audit team suggests various means of cost reduction and cost control measures in all resources used in the company. The Internal Control Systems and the Reports of Internal Audit will be reviewed by the Audit Committee in consultation with the Internal Auditors and Statutory Auditors and thereafter by Board of Directors. Your company also outsource the external auditors services wherever required.

V. Expansion and Diversification:

Your company is planning to diversify into various other sectors of infrastructure business namely Sea Ports, Air Ports, Railways including Freight Corridors, Housing and Property Development, Transmission and Distribution Systems, Coal Handling Plants etc. Your company has already pre qualified in transmission and service provider and distribution systems of REC and for a berth development in major ports in South India.

VI. Organizational Restructuring:

Your Company is restructuring its organization in order to keep the pace with the rate of growth of the organization. In order to enhance the group valuation and source the fund, investment in SPVs under Madhucon Projects Limited have been transferred to Madhucon Infra Limited at cost.

VII. Material Developments in Human Resources/Industrial Relations:

Your company is in the process of recruiting the requisite and competent professionals at all levels of management as a part of corporate restructuring process and strengthening its organizational hierarchy to meet the pace of growth of your company. The industrial relation is very cordial.

VIII Accounting Standards:

The financial statements are prepared in accordance with the requirement of the Companies Act, 1956 as per the Generally Accepted Accounting Principles (GAAP) and also in accordance with the applicable Accounting Standards and guidance notes issued by the Institute of Chartered Accountants of India (ICAI).

IX. Share Capital:

The paid-up equity share capital of the company is Rs.7,37,94,940/- consisting of 7,37,94,940 Equity Shares of Re.1/- each. The value of equity share was split form Rs. 2/- per share to Re. 1/- per share with effect from 07.11.2009.

X. Dividend:

Your Directors are pleased to recommend an Equity Dividend at Re. 0.40 per share (40% on paid up equity capital) for the year ended March 31, 2010 subject to approval of the members at this Annual General Meeting.

XI. Subsidiary companies:

The Company has 8 (Eight) Indian Subsidiaries and 2 (Two) Foreign Subsidiaries as on March 31, 2010. The details of investments held by Madhucon Projects Limited in the following subsidiary companies are given below:

a) INDIAN SUBSIDIARY COMPANIES:

Sl. Date of No. of Equity Shares

No Name of the Company incorporation held by Madhucon

Projects Limited

1 Madhucon Infra Limited 22.02.2006 240939500 (CIN:U45200AP2006PLC049235)

2 TN(DK) Expressways Limited 31.01.2006 38142000 (CIN-U45200AP2006PLC048941)

3 Trichy-Thanjavur Expressways Limited 13.04.2006 33100000 (CIN-U45200AP2006PLC049815)

4 Madurai-Tuticorin Expressways Limited 11.05.2006 88561500 (CIN-U45203AP2006PLC050114)

5 Madhucon Energy Limited 24.03.2000 100090 (CIN-L45309AP2000SGC034007)

6 Madhucon Mega Mall Private Limited 18.12.2007 20000 (CIN-U45400AP2007PTC056734)

7 Nama Hotels Private Limited 24.12.2007 27121200 (CIN-U55101AP2007PTC056818)

8 Madhucon Heights Private Limited 18.12.2007 20000 (CIN-U45209AP2007PTC056733)

Name of the Director Face Value of Value of Equity Percentage

Equity Shares shares (Rs) (%) (Rs)

Madhucon Infra Limited 10 2409395000 92.35

(CIN: U45200AP2006PLC049235)

TN(DK) Expressways Limited 10 381420000 51.09

(CIN- U45200AP2006PLC048941)

Trichy-Thanjavur Expressways Limited 10 331000000 51.20

CIN- U45200AP2006PLC049815)

Madurai-Tuticorin Expressways Limited 10 885615000 54.11

(CIN-U45203AP2006PLC050114)

Madhucon Energy Limited 5 500450 99.99

CIN- L45309AP2000SGC034007)

Madhucon Mega Mall Private Limited 10 200000 66.66

(CIN-U45400AP2007PTC056734)

Nama Hotels Private Limited 10 271212000 99.96

(CIN-U55101AP2007PTC056818)

Madhucon Heights Private Limited 10 200000 66.66

(CIN-U45209AP2007PTC056733)



b) FOREIGN COMPANIES:

Sl. Date of No. of Equity Shares

No Name of the Company incorporation held by Madhucon

Projects Limited

01 Madhucon Natural Resources 09.03.2006 750 Limited, Singapore (200603264W)

02 PT Madhucon Indonesia 19.12.2005 7125000 (Deed No.30) (H.R.01.01.TH 2006) 2375000 Jakartha, Indonesia



Name of the Company Face Value of Value of Equity Percentage Equity Shares shares held (%)

Madhucon Natural

Resources S$ 1/- S$ 750 75%

Limited, Singapore (200603264W) (Equivalent to Rs.21036)

PT Madhucon Indonesia Rph.10,110 US$7125000 95%

(Deed No.30) (H.R.01.01.TH 2006) US$2375000 equivalent to Rs.438694347/- Jakartha, Indonesia



c) STEP DOWN SUBSIDIARIES:

1. Madhucon Agra-Jaipur Expressways Limited

2. Simhapuri Energy Private Limited.

XII. Consolidation of Accounts:

In accordance with the Accounting Standards AS-21 on "Consolidated Financial Statements" and AS-23 on "Accounting for Investments in Associates in Consolidated Financial Statements" read with Accounting Standard AS-27 on "Financial Reporting of Interests in Joint Ventures" and section 212 of the Companies Act 1956, the figures of the subsidiary companies as indicated herein is consolidated with Madhucon Projects Limited.

XIII. Transfer of Shares:

The Investments in 4 SPVs of Road and Power Projects transferred to Madhucon Infra Limited (a Subsidiary of Madhucon Projects Limited) for segregating the investments into infrastructure development projects under separate holding entity for infusion of more capital through Public Issue/IPO/Private Placements.

XIV. Corporate Governance:

In terms of compliance with the requirement of clause 49(VI)(i) of Listing Agreement, a separate section titled "Corporate Governance" containing the due compliance on corporate governance is given in the Directors" Report forming the part of this Annual Report.

In terms of compliance with the requirement of clause 49(VII) of Listing Agreement, the Auditors certificate confirming the compliance of the conditions of the Corporate Governance is annexed hereto which forms part of this Annual Report and the same will be sent to National and Mumbai Stock Exchanges along with the Annual Report.

XV. Directors:

Sri.K.Srinivasa Rao, who retires by rotation at this Annual General Meeting, is eligible to be re-appointed as Non-Executive Director of the Company and who has given his consent in writing to act as Non-Executive Director, if appointed at this Annual General Meeting. The Board of Directors of the company recommends the appointment of Sri K. Srinivasa Rao, as Non- Executive Director of the company in the best interest of the company. The profile of Sri K. Srinivasa Rao is given in the report on corporate governance.

Sri N. Seethaiah, the Managing Director of the company whose period of office expires on 30th April, 2010 and has been re-appointed as Managing Director for a further period of three years with effect from 1st May, 2010 on terms and condition(s) mentioned in the resolution. The Board of Directors of the company recommends the appointment of Sri N. Seethaiah, as Managing Director of the company in the best interest of the company. The profile of Sri N. Seethaiah is given in the report on corporate governance.

XVI. Directors Responsibility Statement:

Pursuant to the requirement u/s 217 (2AA) of the Companies Act, 1956, it is hereby confirmed:

a) That in the preparation of annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures.

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

c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

d) That the Directors have prepared the annual accounts for the year ended 31st March, 2010 on a "going concern" basis.

XVII. Industrial Relations:

The relations with the employees are cordial.

XVIII. Deposits:

The company has not accepted any deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

XIX. Particulars of Employees:

Your Directors place on record, their sincere appreciation to the companys employees whose dedication and commitment has been responsible for the excellent performance of the company.

As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended and forming part of the Directors Report for the year ended 31st March, 2010:

None of the employees of the company was in receipt of remuneration, which exceeds the limits fixed under Section 217 (2A) of the Companies Act, 1956.

XX. Quality Management System - AN ISO 9001- 2008:

The company has established a Quality Management System in Design and Execution of Irrigation, Roads/ Highways Projects in compliance with the International Quality System Standards AN ISO 9001-2008 vide Certificate No.IN013996 dated 11.06.2010.

XXI. Credit Rating Under Basel-II:

As per the "New Capital Adequacy Framework" based on Basel-II guidelines of RBI, your Company is rated by ICRA for different limits as follows:

Fund based / Non-Fund based limits - LA+

Short term Debt/Commercial papers - A1

Long term Debt/NCD - LA+

XXII. Auditors:

M/s Kota & Company, Statutory Auditors of the Company expressed their willingness to be re-appointed for the financial year 2010-2011 and to hold office up to the conclusion of the next Annual General Meeting, if they are re-appointed at this Annual General Meeting. They have furnished a certificate to the effect that their proposed appointment, if made, will be in accordance with the limits specified under 224(1-B) of the Companies Act, 1956.

XXIII. Information as per Sec- 217(1) (e) of The Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988:

The information as required u/s 217(1)(e) of the Companies Act, 1956 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in the annexure attached to this Report.

XXIV. Acknowledgements:

Your Directors express their appreciation to the Foreign Collaborators, Joint Venture Partners, Bankers, Central and State Government Authorities including National Highway Authorities of India (NHAI), Irrigation & CAD Department, Central Government, Government of various States including Andhra Pradesh, Clients, Consultants, Employees, Suppliers and others, etc., for their continued support and encouragement from time to time.

For and on behalf of the Board

Place: Hyderabad N.SEETHAIAH S. VAIKUNTANATHAN

Date: 21.08.2010 Managing Director Whole-time Director



 
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