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Directors Report of IL&FS Transportation Networks Ltd.

Mar 31, 2018

The Members

IL&FS Transportation Networks Limited

The Directors have pleasure in presenting the Eighteenth Annual Report alongwith the Audited Financial Statements for the year ended March 31, 2018

Financial Results

The Financial performance highlights of the Company are as under:

Particulars

For the year ended 31.03.2018

For the year ended 31.03.2017

For the year ended 31.03.2018

For the year ended 31.03.2017

(Rs. in Crore)

(Rs. in Crore)

(Rs. in Crore)

(Rs. in Crore)

Standalone

Standalone

Consolidated

Consolidated

Total Income

4,709.48

4,519.70

9,778.92

8,401.62

Earnings before Interest, Tax, Depreciation and Amortisation

1,996.22

1,587.51

4,389.53

3,671.73

(EBITDA)

Profit / (Loss) Before Tax

331.79

195.71

227.57

219.68

Profit /(Loss) After Tax (Attributable to owners of the Company)

251.76

236.39

175.72

149.31

Balance Brought Forward

83.72

(141.14)

274.86

97.94

Profit available for appropriation

335.48

95.25

450.58

247.25

Appropriation:

Dividend Proposed/Paid -

-

(65.79)

-

(69.58)

Equity Shares

Tax on Dividend - Equity Shares

-

(9.24)

-

(20.90)

Debenture Redemption Reserve

(212.94)

63.50

(196.42)

80.37

Other comprehensive income arising from re-measurement of defined benefit

-

-

-

-

Transfer on partial disposal of stake in subsidiary

-

-

15.08

-

Consolidation Adjustments

-

-

(28.04)

37.72

Balance carried forward

122.55

83.72

241.20

274.86

Dividend

Considering the business exigencies and requirement of funds for investments in ongoing project companies, your Directors have not recommended any dividend on Equity Shares for the year under review (Previous Year: Nil)

Your Directors had declared an interim dividend on Preference Shares of Rs. 48.74 Crore including tax on dividend of Rs. 9.92 Crore (Previous Year: Rs. 94.91 Crore including dividend tax of Rs. 16.05 Crore)

Share Capital

During the year, there was no change in the Company’s issued, subscribed and paid-up equity share capital. On March 31, 2018, it stood at Rs. 328,96,00,270 divided into 32,89,60,027 equity shares of Rs. 10 each

Of the 35,64,50,000 preference shares, outstanding as on April 1, 2017, 12,72,50,000 preference shares were redeemed during the year under review

General Reserve

The Company has not transferred any amount to General Reserve for the Financial Year ended March 31, 2018

During the year under review, Rs. 127.25 Crore was transferred from General Reserve to Capital Redemption Reserve and Rs. 212.94 Crore was transferred from Retained Earnings to Debenture Redemption Reserve

Issue of Debentures / Bonds

During the year under review, the Company raised Rs. 1,114.5 Crore by issue of Non- Convertible Debentures (NCDs) with tenor exceeding 5 years. This has helped the Company in reducing the borrowing cost and also elongate the maturity profile of borrowings by converting short term maturities to long term. The Company proposes to continue its efforts to refinance its short term borrowings through issue of long term NCDs. The previous approval is valid until August 28, 2018 and therefore fresh approval of the Members for issue of NCDs on a private placement basis to the extent of Rs. 3,500 Crore is being sought.

A proposal to this effect is being included in the Notice of the Annual General Meeting

The Company has completed the refinancing of certain special purpose vehicles, namely, Jharkhand Road Projects Implementation Company Limited and Jorabat Shillong Expressway Limited aggregating to Rs. 2,613 Crore which has resulted in reduction of interest cost by approx. 200 - 250 basis points. ITNL Offshore Pte. Ltd., a wholly owned subsidiary has also successfully priced a bond deal for CNRS.1,000 Million Senior Unsecured Notes at an annualised yield of 8% due 2021

Acquisition & Divestment

During the year under review, the Company divested its equity stake in Gujarat Road and Infrastructure Company Limited, Moradabad Bareilly Expressway Limited, Pipavav Railway Corporation Limited and Rajasthan Land Holdings Limited at an aggregate consideration of Rs. 514.93 Crore. The details of the transaction are mentioned in Note No. 4 in the Financial Statements for the year ended March 31, 2018

Further, the investments held by Elsamex SA, Spain a wholly owned subsidiary in its subsidiaries in India were acquired by the Company

Material Changes & Commitments Affecting the Financial Position Between the End of Financial year and Date of Report After the Balance Sheet Date

There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this report

Operational Performance

The financial year 2017-18 witnessed some very significant achievements in the road sector of the country. Ministry of Road Transport and Highways (MoRTH) set a target of constructing 41 km/per day of road and achieved about 28 km/day, less than the target but 20% higher than last fiscal. The Ministry is hopeful of achieving 40 km /day in FY 2018-19 through the awarding of 7,400 km at an estimated cost of Rs. 122 Crore during the FY 2017-18 resulting in an all-time high and a record achievement by MORTH/NHAI since its inception in 1995. Tendering and awarding has picked up due to the sanction of ambitious Bharatmala programme that involves construction of 34,800 km highways by 2022

The year also witnessed award and completion of some of the biggest projects targeted in the Indian Road Sector which includes the longest tunnel project, Chenani Nashri Tunnel Project in Jammu & Kashmir, constructed by the Company and the longest bridge project, Dhola Sadia Bridge in Assam, that were inaugurated by the Hon’ble Prime Minister. The bidding process and awards for ambitious projects such as Zojila Tunnel project, Delhi Meerut Expressway, Vadodara-Mumbai Expressway and Bangalore-Chennai Expressway were conducted during the year

The operating environment however, is challenging from the Company’s perspective. As the government’s mode of project delivery has moved from PPP to EPC and HAM models, a sector in which the Company is fairly nascent, the Company remains cautious while bidding for such projects. This shift is coupled with a significant reduction in project sizes to encourage participation, which makes such projects financially unviable for the Company. The Company has witnessed considerable cost overruns in its projects as a result of Authority default, for which appropriate claims and compensation has been sought from the respective Authorities; the realization of which is subject to significant procedural delays. The growing reluctance of the Banking sector to lend to the sector and the banks existing exposure limit has prevented the Company from achieving financial closure in 3 of its ongoing projects, stressing its existing cash flows. With its intent to overcome these hurdles, the Company will critically reassess its portfolio and take appropriate action including stake sale, divestment, refinancing and dedicatedly pursue its claims with the Authorities

The Company’s portfolio continues to stand at 33 projects, which comprises of 28 Road projects and 5 Non Road projects. Of these, 25 projects are Operational, 8 projects are under Implementation. Classifying individual projects (considering projects and sub-projects) on the basis of their current phase, the Company has 21 Road projects and 4 Non Road projects that are Operational, 7 Road projects are under Implementation and 1 Non Road project under implementation. Further, as per the Revenue model, 17 are Toll based, 11 are Annuity based and 5 are User Fee based. The total portfolio in terms of length stands at 13,493 lane-km of whicRs.11,026 lane-km are Toll based, and 2,467 lane-km is Annuity based for the reporting period

During the year under review, the Company secured the Construction, Operation and Maintenance of 2-Lane Bi-Directional Zojila Tunnel with Parallel Escape (Egress) Tunnel excluding approaches on Srinagar-Leh section connecting NH-1 at Km 95.00 and at Km 118.00 in the State of Jammu & Kashmir on EPC mode. Further, the Company in JV with IL&FS Engineering Construction Compalny Limited (IECCL) was awarded the Contract for Widening and Reconstruction of Major District roads aggregating to 160 lane-km in Madhya Pradesh (MPMDRUP Package 2) by Madhya Pradesh Road Development Corporation Limited (MPRDC). The Company closed the year with an order book of 3 EPC projects aggregating to Rs. 5,351 Crore

In one of the arbitration petition filed by a subsidiary, Pune Sholapur Road Development Company Limited (“PSRDCL”) against National Highways Authority of India (“NHAI”), the Hon’ble Arbitral Tribunal had passed an award in favour of PSRDCL entitling it to receive a payment of Rs. 547.96 Crore from NHAI

On the International front, ITNL Infrastructure Developer LLC is developing the “Dubai Court Complex and Robotic Car Park Project on PPP basis”. This is the first PPP concession awarded for Fully Automated Car Parking Project in UAE region. IIPL USA, LLC a subsidiary also completed four contracts in State of Texas and have 19 projects under operation and maintenance

Environmental, Health & Safety

The Environmental and Social Policy Framework (ESPF) adopted by the Company helps to identify and mitigate Environmental and Social concerns relating to all projects. During the year under review, upgraded Quality, Environment, Health & Safety (EHS) Management systems were implemented and integrated at all the O&M sites.

Further, the Surveillance audit for FY 2017-18 was also conducted by TUV Nord, an ISO Certification Agency EHS audits are conducted on a regular basis at the project sites to ensure implementation and adherence to the Management System and Safety standards. The EHS Committee of the Board reviews the findings of the audit and advises on improving safety aspects and mitigation measures on a quarterly basis to help achieve the EHS objectives. The Company continued to engage with the experts to study the Behavioral characteristics of road users on various road projects of the Company and suggest remedial measures to avoid accidents

Subsidiaries, Joint Ventures & Associate Companies

In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 (2) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter referred to as SEBI (LODR) Regulations, 2015) the Consolidated Financial Statements of the Company forms part of this Report. The copies of Audited Financial Statements of the Subsidiaries, Joint Ventures and Associates are available on the website of the Company: www. itnlindia.com and a copy of the same will be provided upon written request to the Company Secretary

The performance and financial position of the Subsidiaries, Joint Venture and Associate companies is provided in Annexure I of this Report

A statement containing salient features of the financial statements of the Company’s Subsidiaries, JV’s and Associates is given in Form AOC 1 forming part of the Note 36 of the Consolidated Financial Statements

Statutory Auditors

SRBC & Co. LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company for a term of five consecutive years at the 17th Annual General Meeting held on August 29, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company

Cost Auditor and Cost Audit Report

Pursuant to Section 148 of the Companies Act 2013 and the Companies (Cost Records and Audit) Rules, 2014 framed thereunder, the Board of Directors had appointed M/s. Chivilkar Solanki & Associates, Cost Accountants as Cost Auditors for FY 2018-19

M/s. Chivilkar Solanki & Associates have conveyed their consent and confirmed their eligibility for appointment as Cost Auditors.

The Board has recommended to the Members for approval of the remuneration payable to the Cost Auditors for FY 2018-19

Secretarial Audit & Secretarial Audit Report

M/s. Jayshree Dagli & Associates, Practicing Company Secretaries were appointed by the Board to carry out the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 for FY 2017-18. The report of the Secretarial Auditor is set out herewith as Annexure II to this report. The report does not contain any qualification, reservation or adverse remarks

Extract of Annual Return

The details forming part of the extract of the Annual Return as on March 31, 2018 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure III to this report

Significant and Material Orders

There are no significant and material orders passed by the Regulators or courts or tribunals impacting the going concern status and the Company’s operations in future

Policy on Director’s Appointment and Remuneration

The Board has adopted a Policy on appointment and remuneration of Directors which includes the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Sub-section (3) of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations, 2015. The Policy is available on the website of the Company at www.itnlindia.com. The remuneration paid to the Directors and Senior Management personnel is as per Managerial Remuneration Policy of the Company. Brief details of the Managerial Remuneration Policy are provided in the Corporate Governance Report

Directors

Mr. Pradeep Puri, Director resigned with effect from November 20, 2017. The Board placed on record its sincere appreciation for the valuable guidance and support during his tenure

Based on the recommendation of the Nomination and Remuneration Committee, the Board has reappointed following Directors of the Company subject to the approval of the Members at the ensuing Annual General Meeting:

(1) Mr. K. Ramchand (DIN: 00051769) as Managing Director for a period of five years from April 1, 2018 to March 31, 2023

(2) Mr. Mukund Sapre (DIN: 00051841) as Executive Director for a period of five years from April 1, 2018 to March 31, 2023

In compliance with Section 152 of the Companies Act, 2013, Mr. Arun K Saha (DIN: 00002377) was liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment

Your Directors recommend their reappointment

Key Managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors have appointed Mr. K. Ramchand, Managing Director,

Mr. Dilip Bhatia, Chief Financial Officer and Mr. Krishna Ghag, Vice President & Company Secretary as the Key Managerial Personnel of the Company

Declaration by Independent Directors

The Company has received declarations from all Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under Section 149 of the Companies Act, 2013 and Regulation 25 of the SEBI (LODR) Regulations 2015. The Independent Directors have also confirmed that they have complied with the Company’s Code of Conduct

Performance Evaluation of the Board, Committees and Directors

In accordance with the provisions of the Companies Act, 2013 and Regulation 4(2)(f) of the SEBI (LODR) Regulations, 2015, the Board of Directors had laid down the criteria for performance evaluation of Independent, Non-Independent & Executive Directors. The process and manner of evaluation of Directors and the Board level Committees are given in detail in the Corporate Governance Report, which forms part of this Report

The Board evaluated its performance, that of its Committees and the Independent Directors. The Independent Directors at a separate meeting evaluated the performance of the Board, the Chairman of the Board and the non-independent Directors. The Nomination & Remuneration Committee at its meeting also evaluated the performance of all the Directors

Corporate Governance

The Company believes in adhering to good governance practices and has complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Report. A certificate from the Statutory Auditor on compliance with the provisions of Corporate Governance is also annexed to this Report

The details of the meetings of the Board and its Committees including its composition & terms of reference are provided in the Report on Corporate Governance which forms part of this Report

Policy on Dividend Distribution

In accordance with Regulation 43A of the SEBI (LODR) Regulations, 2015, the Company has formulated a Dividend Distribution Policy setting out the parameters and circumstances for consideration of the Board in determining the distribution of dividend to the Shareholders. The Policy is available on the website of the Company. The same can be viewed through the link: http://www. itnlindia.com/application/web_ directory/Company%20Policies/2017/ Dividend%20Distribution%20Policy. pdf

Transfer of Unpaid/Unclaimed Dividend to Investor Education and Protection Fund Authority

In terms of Section 125 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules), such unclaimed / unpaid dividend lying in the Company’s bank account for a consecutive period of seven years amounting to Rs. 1,03,290/- for FY 2009-10 was transferred to Investor Education and Protection Fund (IEPF) on September 20, 2017. Accordingly, the underlying equity shares viz. 514 equity shares were also transferred to the demat account of IEPF, the details of which are available on the weblink: http://www.itnlindia.com/pdffiles/DV/ Details_of_Shareholders_dividend_ unclaimed_for_7_consecutive_ years_2017.pdf

Further, the dividend for FY 2010-11, which has remained unpaid/ unclaimed for a consecutive period of seven years are due for transfer to IEPF Account on due date viz. September 11, 2018. The underlying Equity Shares would also be transferred to demat account of IEPF Account on the due date, the details of which can be found at the weblink: http://www.itnlindia.com/pdffiles/DV/ Statement of Unclaimed dividend amountconsecutivelyfor7years_2018. pdf

Related Party Transactions

The Company has developed a Related Party Transactions Policy & Framework for the purpose of identification and approval of such transactions. All related party transactions entered into by the Company in terms of the Policy are placed before the Audit Committee every quarter for their approval. The Related Party Transactions Policy as approved by the Board has been uploaded on the Company’s website and is available on the link: http:// www.itnlindia.com/invrelation. aspx?page_ID=25&Sec_ID=5

All related party transactions entered during the year were in the ordinary course and on an arms’ length basis.

Policy for Prevention of Sexual Harassment at Workplace

The Company has provided a safe and dignified work environment for its employees which is free of discrimination, intimidation and abuse. The Company has adopted a Policy for Prevention of Sexual Harassment of Women and constituted Internal Complaints Committee as per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of complaints of any such harassment. No complaints with allegations of any sexual harassment were reported during the year under review

Whistle Blower Policy

In accordance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015, the Company has established a vigil mechanism by adopting a Whistle Blower Policy to report concerns or grievances. The administration of the vigil mechanism is ensured through the Audit Committee

The Whistle Blower Policy adopted by the Company is available on the website of the Company. The same can be viewed through the link: http://www.itnlindia.com/application/ web_directory/Company%20policies/ Whistle%20Blower%20Policy.pdf

Risk Management

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. The Board periodically reviews the Risk Mitigation Framework laying the perceived risks and the mitigation measures to ensure that Management controls risk through means of a properly defined framework

Particulars of Loans, Guarantees or Investments

Particulars of investments, loans and guarantees form part of Note no. 4, 5 and 35 respectively to the financial statements provided in the Annual Report

Deposits

Your Company has not accepted any Fixed Deposits during the year under review

Energy Conservation, Technology Absorption And Foreign Exchange Earnings and Outgo

Since the Company does not own any manufacturing facility, there is nothing to report under the Energy Conservation and Technology Absorption particulars in the Companies (Accounts) Rules, 2014

During the year under review, your Company’s foreign exchange expenditure was Rs. 96.98 Crore

Particulars of Employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013, (“the Act”) read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees drawing remuneration in excess of the limits specified therein forms part of this Report as Annexure IV

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

Corporate Social Responsibility

In an effort to enhance social inclusiveness, the Company has integrated Corporate Social Responsibility (“CSR”) as a part of the project life cycle and beyond the responsibility of business operations

The Company strongly believes that the surface transportation infrastructure building should not only benefit traffic movement but should also bring direct benefit to the villages along these highways through economic and social empowerment of the community. In order to achieve these objectives, the Company launched various CSR initiatives which has so far touched the lives of 350,000 rural population across 600 villages along its road projects

The Company is firmly committed to bring prosperity to the lives of the people through its CSR programs, primarily through improved livelihood incomes by harnessing natural resources available in the region; better health and hygiene; improved education environment and creating safe villages, in an economically, socially and environmentally sustainable manner, while recognizing the interest of all its stakeholders, including partners and co-investors. The CSR Policy and Framework has been adopted by the Company and is available on the website of the Company. The same can be viewed through the link: http:// www.itnlindia.com

The Company was required to spend 2% of the average net profits of the last three financial years which worked out to Rs. 4.95 Crore. The Company had, however planned projects for a higher amount aggregating to Rs. 5.37 Crore. The actual spent during the year was Rs. 4.35 Crore. Some of the projects meant for the development of village infrastructure could not be implemented on time, during the year due to the delay in getting consensus from the local community and receipt of approvals. The same is proposed to be spent in FY 2018-19. The Report on CSR activities is annexed to this Report as Annexure VI

Directors’ Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, (“the Act”) your Directors confirm that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) they 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 as at March 31, 2018 and of the Profit of the Company for that period;

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

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Acknowledgments

The Board of Directors place on record their appreciation for the continued support and co-operation received from the Government & its various Authorities including National Highways Authority of India, Banks, Financial Institutions and Members of the Company

The Board of Directors expresses their grateful and sincere appreciation for the contribution and commitment of the employees

By the Order of the Board

Deepak Dasgupta

Chairman

Mumbai, May 29, 2018


Mar 31, 2017

The Directors have pleasure in presenting the Seventeenth Annual Report along with the Audited Financial Statements for the year ended March 31, 2017

Financial Results

The Financial performance highlights of the Company are as under:

Particulars

For the year ended 31.03.2017 (Rs.in Crore)

For the year ended 31.03.2016 (Rs.in Crore)

For the year ended 31.03.2017 (Rs.in Crore)

For the year ended 31.03.2016 (Rs.in Crore)

Standalone

Standalone

Consolidated

Consolidated

Total Income

4,400.51

5,051.73

8,401.62

8,356.37

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

1,587.51

1,098.57

3,576.94

2,842.67

Profit / (Loss) Before Tax

195.71

(122.92)

124.89

72.31

Profit / (Loss) After Tax (Attributable to owners of the Company)

236.39

(97.42)

149.31

121.96

Balance Brought Forward

141.14

75.21

94.21

(54.35)

Profit available for appropriation

93.34

(24.12)

243.52

67.61

Appropriation:

Dividend Proposed/Paid -Equity Shares

(65.79)

(98.69)

(65.79)

(98.69)

Tax on Dividend - Equity Shares

(9.24)

(20.09)

(9.24)

(20.09)

Debenture Redemption Reserve

63.50

(0.15)

80.37

(39.23)

Other comprehensive income arising from re-measurement of defined benefit

-

-

(0.38)

(1.80)

Consolidation Adjustments

-

-

20.02

186.42

Balance carried forward

83.72

141.14

268.50

94.21

Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (Ind AS), notified under the Companies (Indian Accounting Standards) Rules, 2015, with effect from April 1, 2016. The Financial Statement for the year ended and as at March 31, 2016 have been restated accordingly. As part of transition to Ind AS, certain exemptions as permitted by the transitional provisions under Ind AS, availed by the Company have been explained in the Notes to Accounts. Further, as mandated by the Ind AS disclosure requirements, impact of Ind AS on each of the components of the Balance Sheet and the Statement of Profit & Loss has also been elaborated in Notes to Accounts (Refer Note 38 & 45 of the Standalone & Consolidated Financial Statements, respectively)

Dividend

Considering the business exigencies and requirement of funds for investments in ongoing project companies, your Directors have not recommended any dividend on Equity Shares for the year under review (Previous Year: Rs.2/- per share)

Your Directors had declared an interim dividend on Preference Share of Rs.94.91 Crore including tax on dividend of Rs.16.05 Crore (Previous Year:

Rs. 94.91 Crore including dividend tax of Rs.16.05 Crore)

Share Capital

During the year, there was no change in the Company''s issued, subscribed and paid - up equity share capital.

On March 31, 2017, it stood at Rs.328,96,00,270 divided into 32,89,60,027 equity shares of Rs.10 each

General Reserve

The Company has not transferred any amount to the General Reserve for the Financial Year ended March 31, 2017

Issue Of Debentures

During the year under review, the Company raised Rs.1,500 Crore by issue of Non-Convertible Debentures (NCDs) with a tenor exceeding 5 years. This has enabled the Company to reduce its short term borrowing to 26% of the total borrowings as of March 31, 2017. The Company proposes to continue its efforts to refinance its short term borrowings through issue of long term NCDs. Your Directors are therefore proposing to seek fresh approval of the Members for issue of NCDs on a Private placement basis to the extent of Rs.3,500 Crore to be issued in FY 2017-18. A proposal to this effect is included in the Notice of the Annual General Meeting for seeking approval of the Members

Divestment

During the year, the Company divested its entire equity stake in Andhra Pradesh Expressway Limited to Cube Highways & Infrastructure Pte. Ltd., Singapore at an aggregate value of Rs.140.37 Crore

Further, as part of internal restructuring exercise, the Company transferred its entire equity stake representing 77.39% held in Elsamex S.A, a wholly owned subsidiary in Spain valued at USD 59.66 Mn to ITNL International Pte. Ltd, (IIPL) Singapore , a wholly owned subsidiary against issuance of 6,02,33,856 new ordinary shares of IIPL at an issue price of USD 1.029 per share

Infrastructure Investment Trust

During the year, IL&FS Transportation Investment Trust (the "Trust'''') was granted registration certificate on December 7, 2016 by the Securities and Exchange Board of India (SEBI) as Infrastructure Investment Trust under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (the "InvIT Regulations"). The equity investment proposed to be transferred to the Trust by the Company shall comprise of 4 road project asset companies viz. North Karnataka Expressway Limited, Hazaribagh Ranchi Expressway Limited, Sikar Bikaner Highways Limited & Jharkhand Road Projects Implementation Company Limited. The Company shall act as the Sponsor of the Trust and has appointed Vistra ITCL (India) Limited as the Trustee and IIML Asset Advisors Limited as the Investment Manager of the Trust

Material changes & Commitments Affecting the Financial Position between the end of Financial Year and date of report after the Balance Sheet Date

There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this report

Operational Performance

The year 2016-17 started with ambitious targets set by the Ministry of Road Transport and Highways (MORTH) and National Highways Authority of India (NHAI). On the PPP front, the NHAI persisted with the Hybrid Annuity Model (HAM) model with about 47 projects targeted for tendering on this mode. Out of around 3000 km of road projects awarded last year, less than 500 km were awarded on PPP basis, most of which were in the form of re-bidding due to non-receipt of bids under the previous bidding process or termination of certain concessions granted. The number of participants for such projects witnessed a drastic reduction, with only the bidders with sound financial position and sufficient strength for undertaking the PPP projects participating in these bids

The Company had evaluated 52 bids tendered by the NHAI and other State Authorities on Build, Operate Transfer (BOT) (Toll/Annuity/Hybrid Annuity)/ Output Performance based Road Contract (OPRC)/ Engineering Procurement and Construction (EPC) basis. Of the 52 projects, 7 failed to attract even a single bidder and some were offered for rebid. After careful evaluation of all the bids based on the viability and strong strategic content, the Company had submitted 20 bids. The Company opened up its EPC portfolio by securing 3 road projects in Madhya Pradesh awarded by Madhya Pradesh Road Development Corporation Limited (MPRDC) and one package of the Chennai Metro Rail project in Tamil Nadu involving design, validation and construction of underground metro stations

The Company''s portfolio consists of 35 projects, which includes 30 Road projects and 5 Non-Road projects. Presently, 23 Road projects and 4 Non Road projects are Operational, 7 Road projects are under Implementation and 1 Non-Road project is under development. The total portfolio in terms of length stands at 14,016 lane-km, of which 11,549 lane-km are Toll basis and 2,467 lane-km on Annuity. Out of the total portfolio, (i) 10,849 lane-km projects are operational, (ii) 2,951 lane-km are under implementation and (iii) 216 lane-km are under development

The year under review was of immense for all of us as we executed and delivered landmark projects in the read as well as non-road sector. The nine kilometre longest tunnel in the Southeast Asian region developed by the Company is a landmark project for the state of Jammu & Kashmir that was inaugrated and dedicated to the nation by the Honourable Prime Minister of India. Apart this, Khed Sinnar Road Project in Maharashtra and additional lengths in 3 earlier commissioned projects were also commissioned during the year

During the year under review, the Company also commissioned the Rapid Metro South Project, a 7 km long extension to the already operational Rapid Metro in the city of Gurgaon

On the International front, ITNL Infrastructure Developer LLC, a subsidiary has signed Concession for "Dubai Court Complex and Robotic Car Park Project on PPP basis". This is the first PPP concession awarded for Fully Automated Car Parking Project in UAE region

Elsamex Vietnam JSC, a subsidiary has reached the halfway mark in completing its project from CIENCO4 (Vietnam State Owned Enterprise) for 200,000 square meter of Micro-Surfacing application in Vietnam

IIPL USA LLC, wholly owned subsidiary was also awarded maintenance contracts worth US$ 11.3 million. Other existing international operations under Elsamex SA and YuHe Expressway continued to contribute positively to the Company''s financials

Environmental, Health & Safety

As committed in the last year''s report, the Company has successfully upgraded its Quality and Environment Health & Safety (EHS) Management systems to the newly released standards viz. ISO 9001:2015 and ISO 14001:2015 for which certification audit was conducted by TUV Nord. We further plan to amalgamate them into an Integrated Management System. These systems is further complimented by the Environmental and Social Policy Framework (ESPF) adopted by the Company which helps to identify and mitigate Environmental and Social concerns relating to a project at bidding stage itself. The implementation of this system is also audited and certified by Ernst & Young LLP

EHS audits are conducted on a regular basis at the project sites to ensure implementation and adherence to the Management System and Safety standards. The EHS Committee of the Board reviews the findings of the audit and advise on improving safety aspects and mitigation measures on a quarterly basis to help achieve the Company''s EHS objectives. The Company continued to engage with the experts to study the Behavioral characteristics of road users on other road projects of the Company and suggest remedial measures to avoid accidents. The implementation of interventions suggested by them in the previous year on certain select road stretches have helped in reducing the number of fatalities

Subsidiaries, Joint Ventures & Associate Companies

In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 (2) (b) of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, (hereinafter referred to as SEBI (LODR) Regulations, 2015) the Consolidated Financial Statements of the Company forms part of this Report. The copies of Audited Financial Statements of the Subsidiaries, Joint Ventures and Associates are available on the website of the Company: www.itnlindia.com and a copy of the same will be provided upon written request to the Company Secretary

The performance and financial position of the Subsidiaries, Joint Venture and Associate companies is provided in Annexure I of this Report. A Statement containing salient features of the financial statements of the Company''s subsidiaries is given in Form AOC-1 forming part of the consolidated financial statements

Statutory Auditors

Deloitte Haskins & Sells LLP (DHS), were appointed as the Statutory Auditors of the Company for a period of three years to hold office from the conclusion of the Annual General Meeting (AGM) held on August 21, 2014 till the conclusion of the 17th AGM of the Company. The term of DHS as Statutory Auditors will end at the conclusion of the forthcoming AGM

In order to ensure smooth transition of the auditing process and seamless integration of the new Auditor with the system & process of the Company, the Board had recommended appointment of SRBC & Co. LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) as the Joint Statutory Auditors of the Company alongwith Deloitte Haskins & Sells, LLP upto the conclusion of the ensuing Annual General Meeting. The Members had pursuant thereto approved the appointment of SRBC & Co. LLP, as Joint Statutory Auditors effective February 10, 2017

Your Directors have proposed the appointment of SRBC & Co. LLP, Chartered Accountants, as the Statutory Auditors of the Company for a term of five years i.e. from the date of the forthcoming AGM till the conclusion of the AGM to be held in FY 2022 subject to ratification at AGM each year. SRBC & Co. LLP, have conveyed their consent for appointment as Statutory Auditors of the Company and confirmed that their appointment if made, will be in accordance with the provisions of Section 141 (1) of the Companies Act, 2013

The Board recommends the appointment of SRBC & Co. LLP as Statutory Auditors of the Company

Cost Auditor and Cost Audit Report

Pursuant to Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 framed thereunder, the Board of Directors had appointed M/s. Chivilkar Solanki & Associates, Cost Accountants as Cost Auditors for FY 2016-17

The Board has proposed the reappointment of M/s. Chivilkar Solanki & Associates, Cost Accountants as Cost Auditors for FY 2017-18. M/s. Chivilkar Solanki & Associates have given consent and confirmed their eligibility for appointment as Cost Auditors. The Board has recommended approval of the remuneration payable to the Cost Auditors for FY 2017-18

Secretarial Audit & Secretarial Audit Report

M/s. Jayshree Dagli & Associates, Practicing Company Secretaries were appointed by the Board to carry out the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 for FY 2016-17. The report of the Secretarial Auditor is set out herewith as Annexure II to this report. The report does not contain any qualification, reservation or adverse remarks

Extract of Annual Return

The details forming part of the extract of the Annual Return as on March 31, 2017 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure III to this report

Significant and Material Orders

There are no significant and material orders passed by the Regulators or courts or tribunals impacting the going concern status and Company''s operations in future

Policy on Director''s Appointment and Remuneration

The Board has adopted a Policy on appointment and remuneration of Directors which includes the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Sub-section (3) of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations 2015. The Policy is available on the website of the Company. There has been no change carried out in the Policy adopted by the Board. The remuneration paid to the Directors and the Senior Management is as per the Managerial Remuneration Policy of the Company. Brief details of the Managerial Remuneration Policy are provided in the Corporate Governance Report

Policy on Dividend Distribution

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy setting out the parameters and circumstances for consideration of the Board in determining the distribution of dividend to the Shareholders. The Policy is available on the website of the Company. The same can be viewed through the link: www.itnlindia.com

Declaration by Independent Directors

The Company has received declarations from all Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under Section 149 of the Companies Act 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The Independent Directors have also confirmed that they have complied with the Company''s Code of Conduct

Performance Evaluation of the Board, Committees and Directors

In accordance with the provisions of the Companies Act, 2013 and Regulation 4(2)(f) of the SEBI (LODR) Regulations, 2015 the Board of Directors had laid down the criteria for performance evaluation of Independent, Non-Independent & Executive Directors. The process and manner of evaluation of Directors and the Board level Committees are given in detail in the Corporate Governance Report, which forms part of this Report

The performance evaluation of all the Directors, Committees and the Board was carried out by the Nomination & Remuneration Committee, Independent Directors and Board at their respective meetings in accordance with the criteria laid down by the Nomination & Remuneration Committee based on the evaluation sheets circulated to the Directors

Corporate Governance

The Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Report. A certificate from the Statutory Auditor on compliance with the provisions of Corporate Governance is also annexed to this Report

The details of the meetings of the Board and its Committees including its composition & terms of reference are provided in the Report on Corporate Governance which forms part of this Report

Directors

Mr. Ravi Parthasarathy (DIN: 00002392), Director 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

Key Managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors have appointed Mr. K. Ramchand, Managing Director, Mr. Dilip Bhatia, Chief Financial Officer and Mr. Krishna Ghag, Vice President & Company Secretary as the Key Managerial Personnel of the Company

Related Party Transactions

The Company has developed a Related Party Transactions Policy & Framework for the purpose of identification and approval of such transactions. All related party transactions entered into by the Company in terms of the Policy are placed before the Audit Committee every quarter for their approval. The Related Party Transactions Policy as approved by the Board has been uploaded on the Company''s website and is available on the link: http://www.itnlindia.com/invrelation. aspx?page_ID=25&Sec_ID=5

All related party transactions entered during the year were in the ordinary course and on an arms'' length basis. During the year, the Company had entered into few transactions which were material in accordance with the Companies Act, 2013 and the SEBI LODR Regulations, 2015. Accordingly, Form AOC-2 prepared pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as Annexure IV

Policy for Prevention of Sexual Harassment at Workplace

The Company has provided a safe and dignified work environment for its employees which are free of discrimination, intimidation and abuse. The Company has adopted a Policy for Prevention of Sexual Harassment of Women and constituted Internal Complaints Committee as per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of complaints of any such harassment. No complaints with allegations of any sexual harassment were reported during the year under review

Whistle Blower Policy

In accordance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015 the Company has established a vigil mechanism by adopting a Whistle Blower Policy to report concerns or grievances. The administration of the vigil mechanism is ensured through the Audit Committee

The Whistle Blower Policy adopted by the Company is available on the website of the Company. The same can be viewed through the link: http://www.itnlindia.com/application/ web_directory/Company%20Policies/ Whistle%20Blower%20Policy.pdf

Risk Management

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner.

The Board periodically reviews the Risk Mitigation Framework laying the perceived risks and the mitigation measures to ensure that Management controls risk through means of a properly defined framework

Particulars of Loans, Guarantees or Investments

Particulars of investments, loans and guarantees form part of note no. 4, 5 and 33 respectively to the financial statements provided in the Annual Report

Deposits

Your Company has not accepted any Fixed Deposits during the year under review

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Since the Company does not own any manufacturing facility, there is nothing to report under the Energy Conservation and Technology Absorption particulars in the Companies (Accounts) Rules, 2014

During the year under review, your Company''s foreign exchange expenditure was Rs.25.81 Crore

Particulars of Employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013, ("the Act") read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees drawing remuneration in excess of the limits specified therein forms part of this Report as Annexure V

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

Corporate Social Responsibility

In an effort to enhance social inclusiveness, the Company has integrated Corporate Social Responsibility ("CSR") as a part of the project life cycle and beyond the responsibility of business operations

The Company strongly believes that the surface transportation infrastructure building should not only benefit traffic movement but should also bring glory to the villages along these highways through economic and social empowerment of the community.

In order to achieve these objectives the Company launched various CSR initiatives, which has so far touched the lives of 100,000 rural population across 260 villages along its 13 road projects

The Company has committed to bring prosperity to the lives of the people through CSR programs, primarily through improved livelihood incomes by harnessing natural resources available in the region; better health and hygiene; improved education environment and creating safe villages, in an economically, socially and environmentally sustainable manner, while recognizing the interest of all its stakeholders, including partners and co-investors

The CSR Policy and Framework has been adopted by the Company and is available on the website of the Company. The same can be viewed through the link: http://www.itnlindia.com

The Company was required to spend 2% of the average net profits of the last three financial years which worked out to Rs.5.89 Crore. The Company has spent Rs.5.47 Crore towards various CSR activities as mentioned in the CSR Report during FY 2016-17. Due to delay in execution of certain projects an amount of Rs.0.42 Crore remained unutilized which will be spent in FY 2017-18. The Report on CSR activities is annexed to this Report as Annexure VII

Directors'' Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013 ("the Act"), your Directors confirm that:

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

(b) they 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 as at March 31, 2017 and of the Profit of the Company for that period;

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

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Acknowledgments

The Board of Directors place on record their appreciation for the continued support and co-operation received from various Government Authorities including National Highways Authority of India, Banks, Financial Institutions and Members of the Company

The Board of Directors expresses their sincere appreciation for the contribution and commitment of the employees

By the Order of the Board

Deepak Dasgupta

Chairman

Mumbai, May 29, 2017


Mar 31, 2016

The Directors have pleasure in presenting the Sixteenth Annual Report alongwith the Audited Financial Statements for the year ended March 31, 2016

Financial Results

The financial highlights of the Company are as under:

Particulars For the year ended For the For the year ended For the year ended 31.03.2016 year ended 31.03.2016 31.03.2015

(Rs. in Crore) 31.03.2015 (Rs. in Crore) (Rs. in Crore)

(Rs. in Crore) Standalone Standalone Consolidated Consolid ated

Total Income 5,262.24 3,881.83 8,732.03 6,828.22

Earnings before Interest, Tax, Depreciation and 1,367.43 1,132.12 3,235.39 2,465.78 Amortisation (EBITDA)

Profit Before Tax 250.55 384.13 429.14 480.54

Profit After Tax 173.49 318.66 311.54 443.60

Balance Brought Forward 735.98 762.46 1,683.88 1,561.68

Profit available for appropriation 909.47 1,081.12 1,995.42 2,005.28

Appropriation:

Dividend Proposed/Paid - Equity Shares (65.79) (98.69) (65.79) (99.77)

Tax on Dividend - Equity Shares (13.39) (20.09) (19.30) (26.26)

Dividend Proposed - Preference Shares (78.86) (78.86) (78.86) (78.86)

Tax on Dividend - Preference Shares (16.05) (16.05) (16.05) (16.05)

General Reserve - (31.87) - (31.87)

Debenture Redemption Reserve (0.15) (98.95) (19.03) (119.69)

Consolidation Adjustments - - (9.14) 51.10

Adjustment relating to fixed assets - (0.63) - -

Balance carried forward 735.23 735.98 1,787.25 1,683.88

Dividend

Your Directors have recommended dividend on Equity Shares at the rate of Rs. 2/- per share (Previous Year: Rs. 4/-per share) for the year under review. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 79.18 Crore including tax on dividend of Rs. 13.39 Crore (Previous Year: Rs. 118.78 Crore including dividend tax of Rs. 20.09 Crore)

Your Directors had declared an interim dividend on Preference

Shares of Rs. 94.91 Crore including tax on dividend ofRs. 16.05 Crore (Previous Year: Rs. 94.91 Crore including dividend tax ofRs. 16.05 Crore)

Issue of Equity Shares on rights basis

During the year under review, the Company had offered 8,22,40,007 equity shares of the face value of Rs. 10 each to the Members of the Company on a rights basis in the ratio of 1:3 at a price of Rs. 90 per share (including premium ofRs. 80 per share) aggregating to approximately, Rs. 740.16 Crore. Your Directors are pleased to inform that the issue was fully subscribed

Issue of Debentures

During the year under review, the Company issued five series of Unsecured, Redeemable, Non- Convertible Debentures ("NCD''s") for refinancing the short term loans availed by the Company, the details of which are given below:

Sr. No. No. of Debentures Face Value (In Rs.) Date of Allotment

1 2,250 10,00,000 27-April-2015

2 1,250 10,00,000 08-May-2015

3 1,000 10,00,000 10-July-2015

4 7,800 5,00,000 23-March-2016

5 4,250 10,00,000 30-March-2016

Operational Performance Review

The year 2015-16 started with a muted growth on the Public Private Partnership (PPP) front, taking off from the previous year, with very few BOT projects being tendered till the third quarter. Out of around 8,000 km of road projects awarded last year, less than 1,000 km were awarded on PPP basis, some of which were in the form of re- bidding due to non-receipt of bids through earlier bidding process or termination. Considering the current market scenario, only the bidders with sound financial position and sufficient strength for undertaking the PPP projects submitted realistic bids. The Company was successful in securing award for two projects of National Highway Authority of India (NHAI) on BOT Toll basis in the State of Maharashtra

The last quarter witnessed beginning of a new era in the development of road infrastructure in the country. NHAI successfully completed the bidding process for few projects on Hybrid Annuity Model (HAM), a new and much talked about format of concession which did not receive any response initially. After many deliberations amongst the private sector players and the authorities, HAM received a limited response as few construction companies submitted their bid for projects. NHAI had tendered about 20 more projects on HAM basis in March 2016, however, most of them were postponed to April / May 2016. It was observed that the projects tendered were in the form of packages with TPC ranging from Rs. 500 Crore to Rs. 800 Crore. The Company had undertaken analysis for these tenders on selective basis by assessing the hurdles in implementation of the projects and likely competition

The Company had evaluated 52 bids tendered by the NHAI and other State Authorities on Build, Operate, Transfer (BOT) (Toll/Annuity/Hybrid Annuity)/ Output Performance based Road Contract (OPRC)/ Engineering Procurement and Construction (EPC) basis. Out of the 52 projects, 7 failed to attract even a single bidder and some were offered for rebid. After careful evaluation of all the bids based on the viability and strong strategic content, the Company submitted 20 bids. In June 2015, the Company secured 2 Four Laning road projects namely (i) Amravati-Chikli (Package - I) section of NH-6 from km. 166.000 to km. 360.000 and (ii) Fagne-Guj/Maharashtra Border (Package-Ill) section of NH-6 from Km. 510.000 to Km. 650.794, both in the State of Maharashtra to be executed as BOT (Toll) basis on DBFOT pattern under NHDP Phase-IV

The Company''s portfolio increased to 37 projects as compared to 33 projects in last Fiscal year, which includes 31 Road projects and 6 Non Road projects. Presently, 22 Road projects and 4 Non Road projects are Operational, 5 Road projects and 1 Non Road project are under Implementation and 4 Road projects and 1 Non Road project are under development. The total portfolio in terms of length stands at 14,680 lane-km of which 11,549 lane-km are Toll based and 3,131 lane-km is Annuity based out of the aforesaid total length, (i) 10,176 lane-km projects are operational, (ii) 2,232 lane-km are under implementation and (iii) 2,262 lane-km are under development

During the year under review, the Company commissioned three road projects viz. (i) Sikar Bikaner Road Project in Rajasthan, (ii) Baleshwar Kharagpur Road Project in Odisha & West Bengal and (iii) Jorabat Shillong Road Project in Assam & Meghalaya

The Company also commissioned eight Border Check Posts in Madhya Pradesh during the financial year taking the total tally of operational check posts to 19

On the International front, ITNL Infrastructure Developer LLC received a Letter of Award from Dubai Courts Authority for development of office space for Dubai Supreme Courts and automated car parks on DBFOT basis. The Company in joint venture with ELSAMEX SA was awarded works of US$ 220 Million on Output based Performance Road Contract basis in Ethiopia. Other existing international operations under Elsamex SA and YuHe Expressway continued to contribute positively to the Company''s financials

Environmental, Health & Safety

The Company''s business processes are certified as compliant with ISO 9001:2008, ISO 14001:2007 & OHSAS 18001:2008 standards. In its endeavor to bring about continual improvement in its business processes, the Company plans to upgrade its Quality and Environment, Health & Safety (EHS) Management systems to the newly released standards namely, ISO 9001:2015 and ISO 14001:2015 and amalgamate them into an Integrated Management System. These systems will be further complimented by the Environmental and Social Policy Framework (ESPF) adopted by the Company which helps to identify and mitigate Environmental and Social concerns relating to a project at bidding stage itself. The implementation of this system is also audited and certified by Ernst & Young LLP

EHS audits are conducted on a regular basis at the project sites to ensure implementation and adherence to the Management System and Safety standards. The EHS Committee of the Board reviews the findings of the audit and advise on improving safety aspects and mitigation measures on a quarterly basis to help achieve the Company''s EHS objectives. The Company had engaged experts to undertake studies to ascertain the cause of accidents on the project roads based on Behavioural characteristics of road users and to suggest remedial measures. The interventions suggested by them were implemented on select road stretches which have helped in reducing the number of fatalities

Subsidiaries, Joint Ventures & Associate Companies

In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 (2) (b) of SEBI (LODR) Regulations, 2015, the Consolidated Financial Statements of the Company forms part of this Report. The copies of Audited Financial Statements of the Subsidiaries, Joint Ventures and Associates are available on the website of the Company: www. itnlindia.com and a copy of the same will be provided upon written request to the Company Secretary

During the year under review, the Company acquired entire equity stake in GRICL Rail Bridge Development Co. Ltd and Rajasthan Land Holdings Limited

The Performance and financial position of the Subsidiaries, Joint Venture and Associate companies is provided in Annexure I of this Report

Statutory Auditors

Deloitte Haskins & Sells LLP, Statutory Auditors, were appointed as the Auditors of the Company to hold office from the conclusion of the Annual General Meeting (AGM) held on August 21, 2014 till the conclusion of the 17th AGM of the Company to be held in 2017 for a period of three years, subject to ratification of their appointment by the Members at every AGM. A certificate confirming their eligibility under Section 141 of the Companies Act, 2013 and Rules framed thereunder to continue as Auditors for FY 2016-17 has been received from the Auditors. The Members are requested to ratify the appointment of Deloitte Haskins & Sells LLP as Statutory Auditors of the Company till the conclusion of the next AGM and to authorize the Board to determine their remuneration

Cost Auditor And Cost Audit Report

Pursuant to Section 148 of the Companies Act 2013 and the Companies (Cost Records and Audit) Rules 2014framed thereunder, the Board of Directors at their Meeting held on May 15, 2015 had appointed Mr. Dattatray D Chivilkar, Cost Accountant as the Cost Auditor of the Company for FY 2015-16. Mr. Chivilkar has also confirmed his eligibility for appointment for the FY 2016-17 and that he is free from any disqualifications for being appointed as Cost Auditor under the provisions of the Companies Act, 2013. The Board of Directors has recommended to the Members that the remuneration payable to Mr. Chivilkar, Cost Auditor for FY 2016-17 be approved at the ensuing Annual General Meeting

Secretarial Audit & Secretarial Audit Report

M/s. Jayshree Dagli & Associates, Company Secretaries in whole-time practice was appointed to carry out the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2015-16. The report of the Secretarial Auditor is set out herewith as Annexure II to this report. The report does not contain any qualification

Extract of Annual Return

The details forming part of the extract of the Annual Return as on March 31, 2016 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure III to this report

Policy on Director''s Appointment And Remuneration

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force) for selection and appointment of Directors, Senior Management and their remuneration. The remuneration paid to the Directors and the Senior Management is as per the Managerial Remuneration Policy of the Company. Brief details of the Managerial Remuneration Policy are provided in the Corporate Governance Report

Performance Evaluation of the Board

Upon recommendation by the Nomination & Remuneration Committee, the Board of Directors at its meeting held on November 11, 2014 had laid down criteria for performance evaluation of Independent, Non-independent & Executive Directors

The process and the manner of evaluation of Directors and the Board level Committees are given in detail in the report of Corporate Governance, which forms part of the Annual Report

The performance evaluation of all the Directors, Committees and the Board was carried out by the Nomination & Remuneration Committee, Independent Directors and Board at their respective meetings

Corporate Governance

The Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Annual Report. A certificate from the Statutory Auditor on compliance with the provisions of Corporate Governance is also annexed to this Report

Directors

Mr. Hari Sankaran (DIN: 00002386) and Mr. Arun K Saha (DIN: 00002377), Directors, are liable to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. Your Directors recommend their re- appointment

Key Managerial Persons

During the year under review, the Board of Directors at its Meeting held on August 10, 2015 had appointed Mr. Dilip Bhatia as Chief Financial Officer of the Company effective January 1, 2016 in place of Mr. George Cherian, who had expressed his intention to step down from his position effective from December 31, 2015

Pursuant to Section 203 of the Companies Act, 2013, the Board at its Meeting held on August 10, 2015 also designated him as Key Managerial Personnel

Related Party Transactions

All related party transactions during the year have been entered into in the ordinary course of business and on an arm''s length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI(LODR) Regulations, 2015. 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

Accordingly, there are no contracts or arrangements with related parties to be disclosed in Form AOC-2 pursuant to Clause (h) of Sub section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014

The Company has developed a Related Party Transactions Policy & Framework for the purpose of identification and approval of such transactions. All related party transactions entered into by the Company in terms of the Policy are placed before the Audit Committee every quarter for their approval. The Related Party Transactions Policy as approved by the Board has been uploaded on the Company''s website and is available on the web link: http://www.itnlindia.com/ invrelation.aspxRs.page ID=25&Sec ID=5

Policy for Prevention of Sexual Harassment at Workplace

The Company has provided a safe and dignified work environment for its employees which is free of discrimination, intimidation and abuse. The Company has adopted a Policy for Prevention of Sexual Harassment of Women at Workplace under the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Act"). The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of complaints of any such harassment. The Internal Complaints Committee to redress the complaints received under the Act is in place

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Whistle Blower Policy

In accordance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has established a vigil mechanism by adopting a Whistle Blower Policy to report concerns or grievances. The administration of the vigil mechanism is ensured through the Audit Committee

The Whistle Blower Policy adopted by the Company is posted on the website of the Company at www. itnlindia.com

Risk Management

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. There are no risks which in the opinion of the Board affect the Company operations on going concern basis

The Board periodically reviews the risks and measures are taken for mitigation

Particulars of Loans, Guarantees or Investments Under Section 186

During the year under review, the Company has not made any investments nor given any loans / guarantees /provided security in connection with a loan granted to any person or body corporate in terms of Section 186 of the Companies Act, 2013

Deposits

Your Company has not accepted any Fixed Deposits during the year under review

Energy Conservation, Technology Absorption And Foreign Exchange Earnings and Outgo

Since the Company does not own any manufacturing facility, the Energy Conservation and Technology Absorption particulars in the Companies (Accounts) Rules, 2014, are not applicable

During the year under review, your Company''s foreign exchange income and expenditure was Rs. 0.12 Crore and Rs. 25.81 Crore respectively

Particulars of Employees

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Annual Report and is provided as Annexure IV in this report.

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

Corporate Social Responsibility

In an effort to proactively add value, reduce risk and enhance sustainability in its projects, the Board of Directors of Infrastructure Leasing & Financial Services Limited ("IL&FS"), the parent company had approved an Environmental and Social Report ("ESR") as early as 1995. The objectives of the ESR were (a) to mainstream Environmental and Social ("E&S") considerations in the overall project cycle, (b) to set examples of environmentally sound and socially acceptable practices and (c) to inspire and encourage all stakeholders, including partners and co-investors

Subsequent thereto, in 2008, the Environmental and Social Policy Framework ("ESPF") was formulated to establish an outcome-oriented framework that guides integration of E&S considerations within all businesses of IL&FS which guidelines were then formulated and adopted by the Company

The endeavor is to extend E&S efforts to the community in general and incorporate Corporate Social Responsibility ("CSR") as a part of the DNA of the organization. In order to empower the community along its road projects, the Company launched its CSR initiative in the year 2010 by the name of "Parivartan". For the Company, CSR expands beyond responsibility within business operations, to include all voluntary actions undertaken to benefit the community and the environment around the project areas. The Company strongly believes that the surface transportation infrastructure it is building and financing today will shape the communities of tomorrow

CSR is, therefore, the organization''s commitment to operate in an economically, socially and environmentally sustainable manner, while recognizing the interest of its stakeholders

The CSR Policy and Framework has been adopted by the Company and is available on the website of the Company. The same can be viewed through the link: http://www. itnlindia.com

The Annual Report on CSR Activities is annexed herewith marked as Annexure VI

Directors'' Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

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

(b) they 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 of the Company for that period;

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

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Acknowledgments

The Directors place on record their appreciation for the continued support and co-operation received from the various Government Authorities, including National Highways Authority of India and other Regulatory Authorities, Banks, Financial Institutions and Members of the Company

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

By the Order of the Board

Deepak Dasgupta

Chairman

Mumbai.May 13, 2016


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Fifteenth Annual Report along with the Audited Financial Statements for the year ended March 31,2015

Financial Results

The financial performance of the Company is summarised below :

(Rs. in Million)

Particulars For the year For the year ended ended 31.03.2015 31.03.2014 Standalone Standalone

Total Income 38,818.26 36,719.67

Earnings before Interest, 11,321.27 8,534.82 Tax, Depreciation and Amortisation (EBITDA)

Profit Before Tax 3,841.25 3,229.06

Profit After Tax 3,186.62 2,660.27

Balance Brought Forward 7,624.57 7,253.88

Profit available for 10,811.19 9,914.15

appropriation Appropriation:

Dividend Proposed/Paid - (986.88) (986.88)

Equity Shares

Tax on Dividend - Equity (200.91) (167.72)

Shares

Dividend Proposed - (788.63) (305.11)

Preference Shares

Tax on Dividend - (160.55) (51.85)

Preference Shares

General Reserve (318.66) (266.03)

Debenture Redemption (989.50) (486.37)

Reserve

Redemption premium on - (25.62)

Cumulative Redeemable Preference Shares

Adjustment relating to (6.30) -

fixed assets

Consolidation Adjustment - -

Balance carried forward 7,359.76 -



Particulars For the year For the year ended ended 31.03.2015 31.03.2014 Consolidated Consolidated

Total Income 68,282.24 68,024.82

Earnings before Interest, 24,657.88 21,051.23 Tax, Depreciation and Amortisation (EBITDA)

Profit Before Tax 4,805.46 4,831.42

Profit After Tax 4,436.01 4,630.48

Balance Brought Forward 15,616.77 13,652.73

Profit available for 20,052.78 18,283.21

appropriation Appropriation:

Dividend Proposed/Paid - (997.71) (990.74)

Equity Shares

Tax on Dividend - Equity (262.63) (197.87)

Shares

Dividend Proposed - (788.63) (305.11)

Preference Shares

Tax on Dividend - (160.55) (51.85)

Preference Shares

General Reserve (318.66) (279.91)

Debenture Redemption (1,196.87) (874.43)

Reserve

Redemption premium on - (37.63)

Cumulative Redeemable Preference Shares

Adjustment relating to - -

fixed assets

Consolidation Adjustment 511.00 71.10

Balance carried forward 16,838.72 15,616.77

Dividend

Your Directors have recommended payment of dividend at the rate of Rs. 4/- per share (Previous Year: Rs. 4/- per share) for the year under review. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 1,187.79 Million including tax on dividend of Rs. 200.91 Million (Previous Year: Rs. 1,154.60 Million including dividend tax of Rs. 167.72 Million)

Your Directors had declared an interim dividend of Rs. 788.63 Million including tax on dividend of Rs. 134.03 Million (Previous Year: Rs. 356.96 Million including dividend tax of Rs. 51.85 Million) for payment to the Preference Shareholders

Debenture Issue

During the year under review, the Company issued 6 series of Unsecured, Redeemable, Non-Convertible Debentures ("NCD's") with a face value of Rs. 1,000,000/- each for refinancing the short term loans availed by the Company, the details of which are given below:

Sr. No. of Date of Allotment No. Debentures

1 2,000 22 - July - 2014

2 1,250 21 - Oct - 2014

3 1,250 22 - Nov - 2014

4 2,500 22 - Jan - 2015

5 2,500 04 - Feb - 2015

6 1,500 12 - Feb - 2015

Performance Review

The year under review saw the economy back on the growth track, which however failed to provide the much desired impetus to road infrastructure sector, largely owing to the bleak project award scenario. The Ministry of Road Transport and Highways(MoRT&H) alongwith the National Highways Authority of India (NHAI), had an internal target of awarding projects upto 5,500 kms for the Financial Year 2014-15, of which approximately 2,000 kms was expected through the Build Operate Transfer route. However, the Government was only able to award projects to the extent of 700 kms by March 2015. The Government has attempted to revive private sector participation by introducing measures such as rescheduling of upfront premium, easier exit norms, expediting dispute resolution and speedy clearances to enable commencement of work,amongst other initiatives. The sector continued to witness investor apathy due to liquidity constraints of the road developers, including lack of support from Lending Institutions for funding the projects

The Company had submitted bids for projects that are viable with strong strategic content. The Company had evaluated 73 bids tendered by the NHAI and other State Authorities on Build, Operate Transfer (BOT) / Output Performance based Road Contract (OPRC) basis. Out of the 73 projects, 10 failed to attract even a single bidder and some were offered for rebid. After careful evaluation of all the bids,the Company submitted 27 bids (12 - BOT and 15 - OPRC),but was unable to secure any projects. In February 2015,the Company's subsidiary secured an Annuity project in Gujarat on Swiss Challenge Basis for development of 8 Rail over bridges, with a project cost of Rs. 2,500 Million

At the close of the financial year, the Company's portfolio comprised of 28 projects at various stages of development and operation, aggregating 12,865 lane kms of which 8,924 lane kms are under operation, 2,978 lane kms are under implementation and 963 lane kms under development. The portfolio also includes other surface transportation projects such as the Metro Rail projects in Gurgaon, Haryana, the Border Check Post Project in Madhya Pradesh and a City Bus transport system in Nagpur, Maharashtra

During the year under review, the Company commissioned 5 road projects viz. (i) Patratu Dam to Ramgarh, (ii) Chaibasa - Kandra to Chowka both in Jharkhand, (iii) Warora Chandrapur Ballarpur in Maharashtra, (iv) Moradabad to Bareilly in Uttar Pradesh and (v) Thiruvanantapuram City Roads Phase III. The Company also commissioned four Border Check Posts in Madhya Pradesh viz. (i) Seoni - Nagpur, (ii) Chhindwara- Nagpur, (iii) Kabir Chabuthara and (iv) Sagar - Kanpur

On the international front, the Company emerged as the lowest bidder for 2 projects, one each in Kenya and Nepal. The Company also commenced physical operations of a project in Botswana and actively continues to pursue projects in other developed and developing markets

Environmental, Health & Safety

The Company follows an integrated Management System on Environment, Occupational Health and Safety (EHSMS) based on globally recognized ISO 14001:2004 and OHSAS 18001:2007 standards. The Company has a EHS Policy and framed procedures for implementation of the EHSMS across all projects. Prior to the commencement of work at any of the projects, a comprehensive assessment of all risks pertaining to environment, occupational health & safety are undertaken. Hazards are identified and actions are initiated to mitigate such risks. Dedicated EH&S Officers are appointed to monitor and implement the management system at project sites. The compliances under environmental laws and also under the Environment Management Plan are part of the construction agreements to ensure adherence by the Contractors. Regular internal audits are carried out, wherein each project is evaluated and rated on EH&S parameters. The EH&S Committee of Directors periodically review the findings of the audit reports & EHS performance reports

The Company had engaged an agency to undertake studies for ascertaining the cause of accidents at the project roads based on Behaviour Architecture, which is built on the principles of cognitive neuroscience and behavioral economics, to identify key behavioral aspects of the road users, blackspots with high accident probability and suggest measures to reduce the impact & frequency of road accidents. During the year, the identified measures were implemented at some of the operational project roads, which has resulted in reduction in the number of road accidents

Subsidiaries

As per Section 129(3) of the Companies Act, 2013 and Clause 32 of the Listing Agreement, the Consolidated Financial Statements of the Company forms part of this Report. The copies of Audited Financial Statements of the Subsidiaries, Joint Ventures and Associates are available on the website of the Company: www.itnlindia.com and a copy of the same will be provided upon written request to the Company Secretary

During the year under review, (i) ITNL Offshore Two Pte. Ltd, (ii) ITNL Offshore Three Pte. Ltd. were incorporated as wholly owned subsidiaries and (iii) Srinagar Sonamarg Tunnelway Ltd became an Associate Company. GRICL Rail Bridge Development Co. Ltd, ceased to be subsidiary and Empresas Pame sa De CV, as Associate of the Company

The Performance and financial position of the Subsidiaries, Joint Venture and Associate companies is provided in Annexure I of this Report

Statutory Auditors

Deloitte Haskins & Sells LLP, Statutory Auditors, were appointed as the Auditor of the Company to hold office from the conclusion of the Annual General Meeting (AGM) held on August 21,2014 till the conclusion of the 17 th AGM of the Company to be held in 2017 for a period of three years subject to ratification of their appointment by the Members at every AGM.A Certificate confirming their eligibility under Section 141 of the Companies Act, 2013 and Rules framed thereunder to continue as Auditors for FY 2015-16 has been received from the Auditors. The Members are requested to ratify the appointment of Deloitte Haskins & Sells LLP as Statutory Auditors of the Company to enable them to continue as the Statutory Auditors of the Company till the conclusion of the AGM to be held in FY 2016-17 and to authorise the Board to determine their remuneration

Cost Auditor and Cost Audit Report

Pursuant to Section 148 of the Companies Act 2013 and the Companies (Cost Records and Audit) Rules 2014 framed thereunder, the Board of Directors at their Meeting held on August 13, 2014 had appointed Mr. Dattatray D Chivilkar, Cost Accountant as the Cost Auditor of the Company for FY 2014-15. Mr. Chivilkar has also confirmed his eligibility for appointment for the FY 2015-16 and that he is free from any disqualifications for being appointed as Cost Auditor under the provisions of the Companies Act, 2013. The Board of Directors has recommended to the Members that the remuneration payable to Mr. Chivilkar, Cost Auditor for FY 2014-15 & FY 2015- 16 be approved at the ensuing Annual General Meeting

Secretarial Audit & Secretarial Audit Report

The Board had appointed M/s. Jayshree Dagli & Associates, Company Secretaries in whole-time practice to carry out the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2014-15

The report of the Secretarial Auditor is enclosed as Annexure II. The report does not contain any qualification

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 remuneration paid to the Directors and the Senior Management is as per the Managerial Remuneration Policy of the Company. Brief details of the Managerial Remuneration Policy are provided in the Corporate Governance Report

Performance Evaluation Of The Board

Upon recommendation by the Nomination & Remuneration Committee, the Board of Directors at its meeting held on November 11,2014 had laid down criteria for performance evaluation of Independent, Non- Independent & Executive Directors

The process and the manner of evaluation of Directors and the Board level Committees are given in detail in the Corporate Governance report, which forms part of the Annual Report

The performance evaluation of all the Directors, Committees and the Board was carried out by the Nomination & Remuneration Committee, Independent Directors and the Board at their respective meetings held from time to time

Corporate Governance

The Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Annual Report. A certificate from the Statutory Auditor on compliance with the provisions of Corporate Governance is also annexed to this Report

Directors

The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed Ms. Neeru Singh as Independent Director with effect from November 11,2014 for a period of five years

Mr. Vibhav Kapoor and Mr. Pradeep Puri, Directors, are liable to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointment

Key Managerial Persons

Pursuant to Section 203 of the Companies Act, 2013, the Board of Directors at its Meeting held on May 13, 2014, have appointed Mr. K. Ramchand, Managing Director, Mr. Mukund Sapre, Executive Director, Mr. George Cherian, Chief Financial Officer and Mr. Krishna Ghag, Vice President & Company Secretary as the Key Managerial Personnel of the Company

Related Party Transactions

All related party transactions during the year have been entered into in the ordinary course of business and on an arm's length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. 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

Accordingly,there are no contracts or arrangements with related parties to be disclosed in Form AOC-2 pursuant to Clause (h) of Sub section (3) of Section 134 of the Companies Act,2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014

The Company has developed a Related Party Transactions Policy & Framework for the purpose of identification and approval of such transactions. A Statement of all related party transactions consummated as per the Related Party Transactions Policy & Framework is placed before the Audit Committee every quarter for their approval.The Related Party Transactions Policy as approved by the Board has been uploaded on the Company's website and is available on the weblink: http://www.itnlindia.com/invrelation. aspx page_ID=25&Sec_ID=5

Policy for Prevention of Sexual Harassment at Workplace

The Company has provided a safe and dignified work environment for its employees which is free of discrimination, intimidation and abuse. The Company has adopted a Policy for Prevention of Sexual Harassment of Women at Workplace under the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of complaints of any such harassment. The Internal Complaints Committee to redress the complaints received under this Act is in place

Whistle Blower Policy

In accordance with the provisions of the Companies Act, 2013, the Company has established a vigil mechanism by adopting a Whistle Blower Policy to report concerns or grievances.The administration of the vigil mechanism is ensured through the Audit Committee The Whistle Blower Policy adopted by the Company is posted on the website of the Company at www.itnlindia.com

Particulars of Loans, Guarantees or Investments under Section 186

During the year under review, the Company has not made any investments nor given any loans / guarantees / provided security in connection with a loan granted to any person or body corporate in terms of Section 186 of the Companies Act, 2013

Deposits

Your Company has not accepted any Fixed Deposits during the year under review

Energy Conservation, Technology absorption and Foreign Exchange Earnings and Outgo

Since the Company does not own any manufacturing facility, the Energy Conservation and Technology Absorption particulars in the Companies (Accounts) Rules, 2014, are not applicable

During the year under review, your Company's foreign exchange income and expenditure was Rs. 0.18 Million and Rs. 253.61 Million respectively

Particulars of Employees

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Annual Report and is provided as Annexure III in this report.

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

Corporate Social Responsibility

In an effort to proactively add value, reduce risk and enhance sustainability in its projects, the Board of Directors of Infrastructure Leasing & Financial Services Limited ("IL&FS"), the parent company had approved an Environmental and Social Report ("ESR") as early as 1995. The objectives of the ESR were (a) to mainstream Environmental and Social ("E&S") considerations in the overall project cycle, (b) to set examples of environmentally sound and socially acceptable practices and (c) to inspire and encourage all stakeholders, including partners and co-investors

The endeavor is to extend E&S efforts to the community in general and incorporate Corporate Social Responsibility ("CSR") as a part of the DNA of the organization. In order to empower the community along its road projects, the Company launched its CSR initiative in the year 2010 by the name of "Parivartan". For the Company, CSR expands beyond responsibility within business operations, to include all voluntary actions undertaken to benefit the community and the environment around the project areas. The Company strongly believes that the surface transportation infrastructure it is building and financing today will shape the communities of tomorrow

CSR is, therefore, the organization's commitment to operate in an economically, socially and environmentally sustainable manner, while recognizing the interest of its stakeholders

The CSR Policy and framework adopted by the Company may be accessed on the Company's website at the link http://www.itnlindia.com/invrelation. aspx page_ID=25&Sec_ID=5

The Annual Report on CSR Activities is annexed herewith marked as Annexure V

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure VI to this Report

Directors' Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

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

(b) they 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 of the company for that period;

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

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Acknowledgments

The Directors place on record their appreciation for the continued support and co-operation received from the various Government Authorities, including National Highways Authority of India and other Regulatory Authorities, Banks, Financial Institutions and Members of the Company

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

By the Order of the Board

DEEPAK DASGUPTA Chairman

Mumbai, May 15, 2015


Mar 31, 2014

The Members

IL&FSTransportation Networks Limited

The Directors have pleasure in presenting the Fourteenth Annual Report, alongwith the Audited Financial Statements For the year ended March 31,2014

FINANCIAL RESULTS

The financial results of the Company are as under:

(Rs in Million)

For the Year ended For the Year ended 31.03.2014 31.03.2013

Total Income 36,719.67 35,662.13

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) 8,534.82 8,433.90

Profit Before Tax 3,229.06 4,392.27

Profit After Tax 2,660.27 2,711.64

Balance Brought Forward 7,253.88 6,183.90

Profit available for appropriation 9,914.15 8,895.54

Appropriation;

Dividend Proposed/Paid - Equity Shares (986.88) (777.07)

Tax on Dividend - Equity Shares (167.72) (132.06)

Dividend Proposed - Preference Shares (305.11) (-)

Tax on Dividend - Preference Shares (51.85) (-)

General Reserve (266.03) (271.16)

Debenture Redemption Reserve (486.37) (461.37)

Redemption premium on 20.50% Cumulative Redeemable Preference (25.62) (-) Shares

Balance carried forward 7,624.57 7,253.88

DIVIDEND

Your Directors have recommended payment of dividend of Rs. 4/- per share (Previous Year: Rs. 4/- per share) For the year under review. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum oFRs. 1,154.60 Million including tax on dividend oF Rs. 167.72 Million (Previous Year: Rs. 909.13 Million including dividend tax oF Rs. 132.06 Million)

The redeemable preFerence shares, allotted during the year under review were entitled to pro-rata dividend For the Financial year 2013-14. Your Directors had thereFore declared an interim dividend oFa sum oFRs. 356.96 Million including tax on dividend oF Rs. 51.85 Million For payment to the PreFerence Shareholders

ISSUE OF EQUITY SHARES ON RIGHTS BASIS

During the current financial year, the Company had ofered 52,452,288 equity shares of the face value of Rs. 10 each to the Members of the Company on a rights basis in the ratio of 27:100 at a price of Rs. 100 per share (including a premium of Rs. 90 per share) aggregating to approximately, Rs. 5,250 Million. Your Directors are pleased to inform that the issue was oversubscribed

ISSUE OF PREFERENCE SHARES

Pursuant to the approval of the Members sought by way of a Postal Ballot for issue of Non-convertible Redeemable Preference Shares aggregating to a nominal amount of Rs. 10,000 Million, your Company had issued 376,450,000 Cumulative Non-convertible Redeemable Preference Shares (CNCRPs) with a face value of Rs. 10/- each at a premium of Rs. 10/- per share in tranches as detailed below:

The aggregate amount of Rs. 7,529 Million raised from the aforesaid issue of CNRCPS was utilised for refnancing the short term loans availed by the Company

ISSUE OF DEBENTURES

During the year under review, your Company issued 1,000 Rated, Listed, Unsecured, Redeemable, Non-Convertible Debentures ("NCD''s") with a face value of Rs. 1,000,000/- each at a discount of Rs. 45,000 per debenture, aggregating to Rs. 955 Million on March 4, 2014, for refnancing the short term loans availed by the Company. The NCD''s carry a coupon rate of 11.50% per annum and are due for redemption on February 4, 2024

PERFORMANCE REVIEW

During the reporting year, the sector continued to be under severe pressure due to regulatory challenges, project development and implementation challenges and fnancing challenges. The economic slowdown coupled with declining trafc further added to the woes. The Ministry of Road Transport and Highways (MoRTH) along with National Highways Authority of India (NHAI) had an internal target of 9,000 km for the FY 2013-14, of which around 7,500 km was expected through BOT route. However, the government was able to award only 11 projects to the tune of 1,116 km. The Government has attempted to revive private sector participation by modifying existing guidelines relating to forest clearances, environment clearances, etc. Still the sector continued to witness investor''s apathy due to lack of equity with road construction companies and the overall economic environment which afected sentiments including that of lenders

Your Company had evaluated all the 42 bids which came for submission from NHAI and various other State Authorities. We bid for projects that are viable and have strong strategic content. Out of the 42 projects which came for submission, nine failed to attract even a single bidder. After a careful evaluation of all bids, we felt only 5 bids were worth submission as per our strategy, but were unable to secure any of these projects. In some of the tenders the trafc estimates and the Total Project Cost turned out to be highly unrealistic. These numbers made us very cautious; we refrained from aggressive bidding and focused more on the implementation aspect. At the close of the financial year, your Company''s project portfolio remained at 26 projects at various stages of development and operation, aggregating to 13,161 lane kilometers, of which 3,160 lane km comes under annuity portfolio and 10,001 under toll portfolio. Your company is also actively involved in other surface transportation projects such as the Metro Rail projects in Gurgaon, the Madhya Pradesh Border Check post Projects, Car Park Concessions, Urban Bus transport system among others

On the operational front, your Company commenced construction at three of its projects during the year, two of which were financially closed within the same period as well. This is a major achievement, given the failure of many other established sectoral players to achieve financial closure for their projects. The situation has been even more challenging, with bankers tightening their purses and adopting an extremely cautious approach towards lending to the sector. Additionally, your Company also operationalised four road projects, one of which was 145 days ahead of schedule, and a total of seven checkposts in Madhya Pradesh. All of these projects have successfully commenced commercial operations subsequently

The international markets for your Company performed relatively better. Your Company successfully managed to convert two leads in the short period that we have been operational in the foreign markets. Your Company is nearing closure on a few other leads as well. The results of these eforts will be witnessed in the coming year. To further augment this vertical, your Company also made some changes in the organisational structure and allocated dedicated resources to this efect

Your Company''s Spanish subsidiary, Elsamex S.A., witnessed a nearly 70% jump in Profit after Tax owing to the reorganised structure that was effected during the year. Your Company looked at low-yielding sectors in greater detail and a few projects were closed. The priority for the year was to improve the operation of existing projects and set benchmark standards for future projects. Elsamex S.A. commenced operations and started work on a project to improve the Abu Dhabi to Al-Ain highway. This is a performance-based payment contract, which will give Elsamex S.A. an opportunity to showcase its micro surfacing capabilities to the authorities in the region

The Metro Rail project in Gurgaon commenced commercial operations with effect from November 14,2013. Although the passenger count has been less than anticipated, the non-fare income has spruced up the revenue numbers. At the same time, various measures have been implemented to increase the passengercount. Work has also commenced on the 7-km extension of the Metro track in Gurgaon. The civil works and other key contracts have already been awarded and the remaining few are under process. The land for the project has been fully handed over, paving the way for unhindered construction related progress

SUBSIDIARIES

The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards 21, 23 and 27 of the Institute of Chartered Accountants of India. As required under Section 212(8) of the Companies Act, 1956, the Statement of holdings in subsidiaries and Consolidated Accounts, pursuant to the Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, form a part of the Annual Report. In terms of the Notification dated February 8,2011 issued by the Ministry of Corporate Affairs (MCA), amending Section 212 of the Companies Act, 1956, the Board of Directors of the Company at its Meeting held on May 13, 2014, noted the provisions of the Circular of the MCA and passed the necessary resolution granting the requisite approvals for not attaching a copy of the Balance Sheet, Profit and Loss Account and Reports, etc. of the subsidiaries, along with the Annual Report of the Company for the financial year 2013-14. The disclosure relating to financials of the subsidiaries is included in the consolidated balance sheet. The accounts of subsidiary companies are, therefore, not attached with this Annual Report. However, the accounts of the subsidiaries will be made available on the website of the Company and on request, for inspection to Members seeking such information, at the Registered Office of the Company

DIRECTORS

Mr. Ravi Parthasarathy and Mr. Hari Sankaran, Directors, are liable to retire by rotation at the forthcoming Annual

General Meeting of the Company and being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointment

Mr. Deepak Dasgupta, Mr. R. C. Sinha, Mr. H. P. Jamdar and Mr. Deepak Satwalekar, Independent Directors of the Company, shall be appointed as Independent Directors not liable to retire by rotation for a fresh term of five years in accordance to Section 149 of the Companies Act, 2013. Declaration to the effect that the proposed appointee meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 has been received from each of the aforesaid Directors

AUDITORS

Deloitte Haskins & Sells LLP, Chartered Accountants, Statutory Auditors, retire at the ensuing Annual General Meeting and have expressed their willingness to continue as Statutory Auditors, if re-appointed

The Company has also received a certificate from Deloitte Haskins & Sells LLP under Section 139(1) and Section 141 of the Companies Act, 2013 confirming their eligibility for re-appointment. Accordingly, Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai, are proposed to be re-appointed at the Annual General Meeting, for a period of three years, subject to annual ratification of their appointment by the Members

DEPOSITS

Your Company has not accepted any Fixed Deposits during the year under review

CORPORATE GOVERNANCE

Your Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Annual Report. A certificate from the Statutory Auditors on compliance with the provisions of Corporate Governance is also annexed to this Report

ENVIRONMENTAL AND SOCIAL POLICY

FRAMEWORK

In its endeavour to set up an environmentally and socially sustainable business, your Company had adopted the Environmental and Social Policy Framework (ESPF) based on the guidelines laid down by IL&FS, to address the environmental and social risks associated with the business of the Company. During the year, this was integrated with the existing Environmental, Health and Safety Management Systems (EHSMS - ISO 14001:2004 and OHSAS 18001:2007 standards) and the implementation and monitoring of projects commenced under these modified standards.

Your Company''s practices and standards in this regard were also certified by a third party auditor during the year

ESPF will enable the Company to identify E&S risks associated with projects prior to submission of bids and depending on the outcome of the Risk Rating and its impact, the Company would be able to address the relevant E&S impact and initiate suitable mitigation measures through its EHSMS

SAFETY

Providing an accident-free workplace for its workforce and a hazard-free project road for its users has been the safety ideology of your Company. This is done through an integration of the various management systems implemented by your Company. Your Company possesses valid ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 certifications for its Quality Management System and Environmental Health and Safety Management System. Your Company carried out regular Safety Audits/ Inspection and Safety Awareness Training Programmes for its employees and also for the contract workmen. Additional eforts were taken to reduce road user accidents on the operational project roads by employing the services of specialist consultants who studied the accident patterns on a few select stretches and suggested behavioral interventions to reduce accidents. These recommendations have already been implemented and have yielded positive results. Your Company draws satisfaction from the fact that it has managed to save the lives of many road users due to its untiring eforts and unwavering diligence to reducing accidents on its project roads. During the year under review, the Safety Committee constituted by the Board, comprising of the Independent Directors with technical expertise in the Sector to look into the safety aspects for all the project sites, met four times and reviewed the status of the safety measures adopted by the Management. The Committee had advised on various measures to be taken from time to time in this regard. Precautions were taken across the Company''s project sites to avoid accidents

PARTICULARS OF EMPLOYEES

The information regarding particulars of remuneration, among others, of certain employees required under Section 217(2A) of the Companies Act, 1956 and the rules made thereunder, is given in an Annexure which forms a part of this report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Director''s Report and Accounts are being sent to the Members without this Annexure. Any Shareholder interested in obtaining this Annexure may write to the Company Secretary at the Registered Ofce of the Company

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(1) in the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures

(2) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company at the end of the financial year and of the profit of the Company for that period

(3) they have taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(4) they have prepared the annual accounts on a going concern basis

FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

Your Company''s foreign exchange income during the year was Rs. 514.15 Million and expenditure during the year was Rs. 425.54 Million

Since the Company does not have any manufacturing facility, the other particulars required to be provided in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable

ACKNOWLEDGMENTS

The Directors place on record their appreciation for the continued support and co-operation received from the various Government Authorities, including National Highways Authority of India and other Regulatory Authorities, Banks, Financial Institutions and Members of the Company

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

By the Order of the Board

Deepak Dasgupta Mumbai, May 13, 2014 Chairman


Mar 31, 2013

The SharehoLders of IL&FS Transportation Networks limited

The Directors have pLeasure in presenting the Thirteenth AnnuaL Report aLong with the Audited Statements of Accounts for the year ended March 31, 2013

FINANCIAL RESULTS

The financial results of the Company are as under:

(Rs. in million)

For the For the Year ended Year ended 31.03.2013 31.03.2012

Total Income 35,662.13 29,102.46

Earnings before Interest, 8,433.90 6,898.51 Tax, Depreciation and Amortisation (EBITDA)

Profit Before Tax 4,392.27 4,136.48

Profit After Tax 2,711.64 2,522.98

Balance Brought Forward 6,183.90 4,816.35

Profit available for 8,895.54 7,339.33 appropriation

Appropriation:

Dividend Proposed/Paid (777.07) (777.07)

Tax on Dividend (132.06) (126.06)

General Reserve (271.16) (252.30)

Debenture Redemption (461.37) - Reserve

Balance carried forward 7,253.88 6,183.90

DIVIDEND

Your Directors have recommended payment of dividend of Rs. 4/- per share (Previous Year: Rs. 4/- per share) for the year under review. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 909.13 million including tax on dividend of Rs. 132.06 million (Previous Year: Rs. 903.13 million including dividend tax of Rs. 126.06 million)

DEBENTURE ISSUE

During the year under review, your Company issued 4,000 and 6,000 Rated, Listed, Unsecured, Redeemable, Non- Convertible Debentures ("NCD''s") having a face value of Rs. 1,000,000/- each, aggregating to Rs. 10,000 million on January 23, 2013 and March 18, 2013, respectively, by way of long term funds essentially for refinancing the existing short term loans avaiLed by the Company

The 4,000 NCD''s issued on January 23, 2013 carry a coupon rate of 12.00% per annum and are due for redemption on January 23, 2019. The NCD''s issued on March 18, 2013 were in two series, namely, 700 NCD''s under Series I and 5,300 NCD''s under Series II with a coupon rate of 12.25% per annum and 12.00% per annum and are due for redemption on April 2, 2015 and March 18, 2019, respectively

PERFORMANCE REVIEW

The year can be summed up as turbuLent for the sector your Company operates in. Starting with the NHAI, the principal Concession grantor for highways, falling well short of its annual target, to many of the benchmark highway projects awarded to other premier road deveLopers in the country failing to achieve financial closure or commence work owing to the inability to secure statutory clearances, the sector witnessed a fair share of downturns

Despite these trying times, your Company continues to maintain its growth story and the leading position in the Surface Transport Sector with 25 projects in its portfolio in various stages aggregating to 13,161 lane kilometers, of which 6,318 lane kilometers are under operation. All the projects that were awarded during 2009-10 are in advanced stages of construction and one of the projects achieved commercial operation 4.5 months ahead of schedule

At a sectoral level, besides the National highways, the State highways - though having tremendous potential, have not fructified into awarded Concessions in the year gone by. The year has seen the sector consolidating, with significant infrastructure assets being available in the market and a variety of buyers remaining available for acquiring these assets

On the bidding front, the sector has seen reduced competition and rationalization of bids. In fact the year gone by saw projects worth Rs. 160,000 million not attracting any bids. Thus, projects which were adjudged to be unviable by the industry players did not attract any bids. The domestic market saw lesser projects being bid out by State highway development companies

The Company has undertaken efforts in furtherance of its international initiatives and has established offices in Dubai and Nigeria through one of its subsidiary based in Singapore. The International office based out of Dubai will be responsible for pursuing international mandates. The Company is pursuing projects in UAE, Nigeria and other parts of the world. The Company is also pursuing an airport expansion project in the UAE

Elsamex S.A., a subsidiary in Spain has been awarded its first road maintenance project in UAE, which is from Abu Dhabi to Al-Ain highway, on performance based payment. Elsamex has commenced mobilization and is likely to take over the stretch from the Department of Transportation, Abu Dhabi in June 2013. This project is expected to pave the way for many more of such projects in the very attractive road operation & maintenance market that UAE has to offer

The Metro Rail project in Gurgaon is nearing completion and is scheduled to commence operations in the coming year. The Company also secured the 7 kms long Phase II of the Metro project in the region

SUBSIDIARIES

The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards 21, 23 and 27 of the Institute of Chartered Accountants of India. As required under Section 212(8) of the Companies Act, 1956, the Statement of holdings in subsidiaries and Consolidated Accounts pursuant to Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, form part of the Annual Report. In terms of the Notification dated February 8, 2011 issued by the Ministry of Corporate Affairs (MCA), amending Section 212 of the Companies Act, 1956, the Board of Directors of the Company at its Meeting held on May 7, 2013 noted the provisions of the Circular of the MCA and passed the necessary resolution granting the requisite approvals for not attaching a copy of the Balance Sheet, Profit and Loss Account and Reports etc of the subsidiaries along with the Annual Report of the Company for the financial year 2012-13. The disclosure relating to financials of the subsidiaries is included in the consolidated balance sheet. The accounts of subsidiary companies are therefore not attached with this Annual Report. However, the accounts of the subsidiaries will be made available on the website of the Company and on request, for inspection to Shareholders seeking such information, at the Registered Office of the Company

DIRECTORS

Mr. Arun K Saha, Mr. R C Sinha and Mr. H P Jamdar, Directors are liable to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer themselves for re-appointment. Mr. K Ramchand and Mr. Mukund Sapre were re-appointed as Managing Director and Executive Director respectively for a period of five years effective April 1, 2013 subject to approval of the Shareholders. Your Directors recommend their re-appointment

AUDITORS

Messrs. Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors, retire at the ensuing Annual General Meeting and have expressed their willingness to continue as Statutory Auditors, if re-appointed

DEPOSITS

Your Company has not accepted any Fixed Deposits during the year under review

CORPORATE GOVERNANCE

Your Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Annual Report. A certificate from the Statutory Auditors on compliance with the provisions of Corporate Governance is also annexed to this Report

ENVIRONMENTAL AND SOCIAL POLICY FRAMEWORK

In its pursuit of following the best business practices, your Company has adopted the Environmental and Social Policy Framework (ESPF) to address the environmental and social risks associated with the business of the Company. ESPF has been founded on the concept of Sustainable Development and recognizes Environmental and Social (E&S) considerations in its business operations so as to add value and minimize any adverse impact and risks on the business. Your Company being a Pan India Developer, Operator and Facilitator of infrastructure projects, recognizes the importance of ensuring proper management of E&S risk for each of its projects. ESPF will enable the Company to identify E&S risks associated with projects prior to submission of bids and depending on the outcome of Risk Rating and its impact, the Company would be able to address the relevant E&S impact and initiate suitable mitigation measures

SAFETY

Accomplishing excellence for environmental protection, health and safety at all levels is a high priority for the Company. The Company has obtained ISO 9001:2008 certification, ISO 14001:2004 and OHSAS 18001:2007 certifications for its Environmental Health and Safety Management System. The Company carries out Safety Audits/Inspection and Safety awareness training programmes for the employees and also for the contract workmen. During the year under review, the Board has constituted a Safety Committee comprising of the Independent Directors with technical expertise in this area to look into the safety aspects for all the project sites. The Committee meets on a regular basis along with the technical team of the Company to review and recommend the steps required for improving the safety to reduce accidents

PARTICULARS OF EMPLOYEES

The information regarding particuLars of remuneration etc of certain employees required under Section 217(2A) of the Companies Act, 1956 and the rules made thereunder is given in an Annexure which forms part of this report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Director''s Report and Accounts are being sent to the SharehoLders without this Annexure. Any SharehoLder interested in obtaining this Annexure may write to the Company Secretary at the Registered Office of the Company

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(1) in the preparation of the annual accounts, the applicable accounting standards have been foLLowed aLong with proper expLanation reLating to materiaL departures

(2) they have seLected such accounting poLicies and appLied them consistentLy and made judgements and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for that period

(3) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities

(4) they have prepared the annuaL accounts on a going concern basis

FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

The foreign exchange income during the year was Rs. 182.85 million and expenditure during the year was Rs. 59.40 million

Since the Company does not have any manufacturing facility, the other particulars required to be provided in terms of the Companies (DiscLosure of ParticuLars in the Report of Board of Directors) Rules, 1988 are not applicable

ACKNOWLEDGMENTS

The Directors pLace on record their appreciation for the continued support and co-operation received from the various Government Authorities including National Highways Authority of India and other Regulatory Authorities, Banks, Financial Institutions and SharehoLders of the Company

The Directors would also like to place on record their appreciation for the contribution and dedication of the empLoyees of the Company at aLL LeveLs

By the Order of the Board

Deepak Dasgupta

Bengaluru, May 7, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Twelfth Annual Report along with the Audited Statements of Accounts for the year ended March 31, 2012

financial results

The financial results of the Company are as under:

(Rs.in million)

For the Year ended For the Year ended

March 31, 2012 March 31, 2011 Total Income 29,102.46 17,009.80

Earnings before Interest, Tax, 6,898.51 6,170.55 Depreciation and Amortization (EBITDA)

Profit Before Tax 4,136.48 4,517.39

Profit After Tax 2,522.98 2,880.36

Balance Brought Forward 4,816.35 3,014.27

Profit available for appropriation 7,339.33 5,894.63 Appropriation:

Dividend Proposed/Paid (777.07) (679.94)

Tax on Dividend (126.06) (110.30)

General Reserve (252.30) (288.04)

Balance carried forward 6,183.90 4,816.35

DIVIDEND

Your Directors have recommended payment of dividend of Rs 4 per share (Previous Year: Rs 3.50 per share) for the year under review. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs 903.13 million including tax on dividend of Rs 126.06 million (Previous Year: Rs 790.24 million including dividend tax of Rs 110.30 million)

performance review

Your Company continues to maintain its leading position in the Surface Transport Sector with 28 projects in its portfolio in various stages aggregating to around 11,859 lane kms (including around 2,621 lane kms in respect of which your Company is the lowest/preferred bidder). During the year gone by, the Company operationalised 460 lane kms under RIDCOR Phase ii projects, received provisional completion certificate for 173 lane kms of the EHEL project and added 235 lane kms to its portfolio by acquisition of 49% stake in Yuhe Expressway Company through ITNL international Pte Ltd., a wholly owned subsidiary in Singapore. As at March 31, 2012, 14 projects have been operational with an aggregate length of approximately 5,453 lane kms

FY 2012 witnessed a spurt in the award of Projects by the Government with emphasis on the PPP route. The Government, through its various instrumentalities awarded 7,957 kms in 62 Projects, which is an improvement of 54% over the previous year. This comprises of 6,491 km by NHAi (49 projects) and 1,466 kms (13 projects) by Ministry of Road Transport and Highways. The Company was awarded 2 projects by NHAI, namely, Kiratpur Ner Chowk project in the State of Himachal Pradesh and Baleshwar Kharagpur Road Project in the states of West Bengal and Orissa. in addition to these, the Company was also awarded the development and operation of Sikar - Bikaner stretch of NH 11, a project of 237.57 kms with a Project cost of Rs 6.51 billion by NH Division, PWD, Rajasthan. Also, Government of Rajasthan awarded 2 projects to RIDCOR, aggregating to 303.50 kms with a total project cost of Rs 22.89 billion

NHAI, the key highway implementation arm of the Government of India has implemented the e-tendering process for price proposals and have continued with the annual pre-qualification of bidders. This has led to a substantial reduction in the effort required for bid submission. in the annual pre-qualification process undertaken by NHAI, the Company has been qualified to bid for projects having an estimated cost of up to Rs 53,592.9 million, which enables the Company to participate in virtually all projects on its own

Your Company through ITNL international Pte Ltd, Singapore (IIPL), a wholly owned subsidiary acquired 49% equity stake in Chongqing YUHE Expressway Company Ltd, which owns a 58 km expressway connecting downtown Chongqing with Hechuan County in Chongqing, in the People's Republic of China with toll concession rights till June 2032

The Company also acquired a 61.22% equity stake in Future age infrastructure India Limited (FIIL) for developing an Automated Car Parking facility for about 440 cars, at Hyderabad in the vicinity of Charmin. Amongst the other sectors of transport in the ambit of the Company, construction on the Rail project in Gurgaon continued during the financial year. The Urban Bus Transport system in the city of Nagpur continued its slow progress

Elsamex is following up for Contracts in Abu Dhabi and Mexico and continues to have orders in Operations & Maintenance of Roads & Buildings in Spain that are at levels similar to that in the previous year. A number of other leads are being pursued and efforts are being made to stabilize the operations. Elsamex has signed a contract for Road Rehabilitation Works in Haiti for Euro 40.72 million in January 2012. This project is being funded by the European Union. The profit after tax for FY2012 stands at Euro 1.97 million

Your Company has adopted two of Elsamex's technologies viz "Micro surfacing" and "Warm Mix Asphalt Technology" which are environmental friendly and specifically designed to reduce energy consumption

Your Company closely monitors investments made in the BOT projects and continuously reviews and strengthens its systems and procedures and has obtained ISO 9001:2008 certification. During the year under review, your Company was also awarded ISO 14001:2004 and OHSAS 18001:2007 certifications for its Environmental, Health and Safety Management System

subsidiaries

The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards 21, 23 and 27 of the institute of Chartered Accountants of India. As required under Section 212(8) of the Companies Act, 1956, the Statement of holdings in subsidiaries and Consolidated Accounts pursuant to Accounting Standard (AS-21) issued by the institute of Chartered Accountants of India, form part of the Annual Report. in terms of the Notification dated February 8, 2011 issued by the Ministry of Corporate Affairs (MCA), amending Section 212 of the Companies Act, 1956, the Board of Directors of the Company at its Meeting held on May 4, 2012 noted the provisions of the Circular of the MCA and passed the necessary resolution granting the requisite approvals for not attaching a copy of the Balance Sheet, profit and Loss Account and Reports etc of the subsidiaries along with the Annual Report of the Company for the financial year 2011-12. The disclosure relating to financials of the subsidiaries is included in the consolidated balance sheet. The accounts of subsidiary companies are therefore not attached with this Annual Report. However, the accounts of the subsidiaries will be made available on the website of the Company and on request, for inspection to Shareholders seeking such information, at the Registered office of the Company

DIRECTORs

Mr. Deepak Dasgupta, Mr. Deepak Satwalekar, Mr. Vibhav Kapoor and Mr. pradeep puri, Directors are liable to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer themselves for re-appointment. Your Directors recommend their re- appointment

auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors, retire at the ensuing Annual General Meeting and have expressed their willingness to continue as Statutory Auditors, if re-appointed

deposits

Your Company has not accepted any Fixed Deposits during the year under review

corporate governance

Your Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Annual Report. A certificate from the Statutory Auditors on compliance with the provisions of Corporate Governance is also annexed to this Report

ENVIRONMENTAL AND social policy framework

in its pursuit of following the best business practices, your Company has adopted the Environmental and Social policy Framework (ESPF) to address the environmental and social risks associated with the business of the Company. ESPF has been founded on the concept of Sustainable Development and recognizes Environmental and Social (E&S) considerations in its business operations so as to add value and minimize any adverse impact and risks on the business. Your Company being a pan India Developer, operator and Facilitator of infrastructure projects, recognizes the importance of ensuring proper management of E&S risk for each of its projects. ESPF will enable the Company to identify E&S risks associated with projects prior to submission of bids and depending on the outcome of Risk Rating and its impact, the Company would be able to address the relevant E&S impact and initiate suitable mitigation measures

particulars of employees

The information regarding particulars of remuneration etc of certain employees required under Section 217(2A) of the Companies Act, 1956 and the rules made there under is given in an Annexure which forms part of this report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report and Accounts are being sent to the Shareholders without this Annexure. Any Shareholder interested in obtaining this Annexure may write to the Company Secretary at the Registered Office of the Company directors' responsibility statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures

(2) they 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 of the Company for that period

(3) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(4) they have prepared the annual accounts on a going concern basis

FOREIGN exchange EARNINGs AND expenditure

The foreign exchange income during the year was Rs 64.51 million and expenditure during the year was Rs 210.24 million

Since the Company does not have any manufacturing facility, the other particulars required to be provided in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable

acknowledgments

The Directors place on record their appreciation for the continued support and co-operation received from the various Government Authorities including National Highways Authority of India and other Regulatory Authorities, Banks, Financial Institutions and Shareholders of the Company

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

By the Order of the Board

Deepak Dasgupta

Bengaluru, May 4, 2012 Chairman


Mar 31, 2011

The Directors have pleasure in presenting the Eleventh Annual Report alongwith the Audited Statements of Accounts for the year ended March 31, 2011

Financial Results

The financial results of the Company are as under:

Rs. in Million

Year ended Year ended

31.03.2011 31.03.2010

Total Income 17,009.80 9,415.36

Earnings before Interest, Tax, Depreciation and Amortisation 6,270.55 6,439.53 (EBITDA)

Profit Before Tax 4,517.39 4,971.27

Profit After Tax 2,880.36 3,247.29

Balance Brought Forward 3,014.27 771.31

Profit available for appropriation 5,894.63 4,018.60

Appropriation:

Dividend Proposed/Paid (679.94) (582.80)

Tax on Dividend (110.30) (96.80)

General Reserve (288.04) (324.73)

Balance carried forward 4816.35 3,014.27

Dividend

Your Directors have recommended payment of dividend of Rs. 3.5 per share (Previous Year: Rs. 3/- per share) for the year under review. The proposed dividend, if approved at the Annual General Meeting, will absorb a sum of Rs. 790.24 Million including tax on dividend of Rs. 110.30 Million (Previous Year: Rs. 679.60 Million including dividend tax ofRs. 96.80 Million)

Utilisation of Public Issue Proceeds

As you are aware, the Company had initiated an Initial Public Offering ("IPO”) of its equity shares in the Financial Year 2009-10. Out of the total issue size of Rs. 7,000 Million, a sum of Rs. 1,104 Million pertained to Trinity Capital (Two) Limited, the selling shareholder who offered their shares for sale under the IPO. The total proceeds received by the Company amounted to Rs. 5,896 Million resulting in a fresh issue of 22,852,938 Equity Shares at Rs. 258 per share. The net proceeds received from the IPO have been fully utilised by the Company as follows:

Rs. in Million

Particulars Utilised

Pre-payment & Repayment of debt 5,000.00

General Corporate Purposes 605.58

Issue Related Expenses 290.48

Total 5896.06

There was no variation in the utilisation of net proceeds as against those stated in the Prospectus dated March 18, 2010

Performance Review

Your Company continues to maintain its leading position in the Surface Transport Sector with 22 projects in its portfolio in various stages aggregating to around 12,000 lane kilometers (including around 1,400 lane km in respect of which your Company is the lowest/preferred bidder). All the projects that were awarded during 2009- 10 are under various stages of construction and most of them are expected to be completed before end of financial year 2012-13. As at March 31, 2011, 9 projects have been operational with an aggregate length of approximately 4,300 lane kilometers

While the initial months of the financial year witnessed a number of projects being awarded by National Highways Authority of India (NHAI), there was a marked slow down for a significant period thereafter. Towards the end of the financial year there was once again resurgence in the project awards. The Company was awarded 2 projects by the NHAI namely, the Chenani Nashri Tunnel Project in the State of Jammu & Kashmir and Jorabat Shillong road project in the North East. Other than the NHAI Projects, the Company were also awarded a road project by the Government of Andhra Pradesh and a project for development of entry points by the Government of Madhya Pradesh

NHAI has opted to increase the average size of road projects being tendered, placing big players in the sector at an advantageous position as compared to other smaller players. The current trend puts the Company at an advantageous position as compared to other smaller players. The increased importance to the sector and the targets set by NHAI will give sufficient opportunities to ITNL, which is eminently positioned to capture and enhance its portfolio by exploiting the business opportunity

Amongst the other sectors of transport in the ambit of the Company, construction on the Rail project in Gurgaon commenced during the financial year and is proceeding on schedule. The Urban Bus Transport system in the city of Nagpur continued its slow progress

Amidst continued difficult economic conditions in Europe, Elsamex S.A., acquired in the year 2008 reported a marginal profit for the financial year 2010, aided partly by the restructuring of its operations involving:

(i) Streamlining the International and Spanish business

(ii) Strengthening presence in high value add and predictable income segments (Concessions, Project Management etc)

(iii) Re-establishing financing lines for Elsamex on a standalone basis

Subsidiaries

The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards 21, 23 and 27 of the Institute of Chartered Accountants of India. As required under Section 212(8) of the Companies Act, 1956, the Statement of holdings in subsidiaries and Consolidated Accounts pursuant to Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, form part of the Annual Report. In terms of the Notification dated February 8, 2011 issued by the Ministry of Corporate Affairs (MCA), amending Section 212 of the Companies Act, 1956, the Board of Directors of the Company at its Meeting held on February 9, 2011 noted the provisions of the Circular of the MCA and passed the necessary resolution granting the requisite approvals for not attaching a copy of the Balance Sheet, Profit and Loss Account and Reports etc of the subsidiaries along with the Annual Report of the Company for the financial year 2010-11. The disclosure relating to financials of the subsidiaries is included in the consolidated balance sheet. The accounts of subsidiary companies are therefore not attached with this Annual Report. However, the accounts of the subsidiaries will be made available on the website of the Company and on request, for inspection to Shareholders seeking such information, at the Registered Office of the Company

Directors

Mr. Ravi Parthasarathy, Mr. Hari Sankaran, Mr. H P Jamdar and Mr. Mukund Sapre, Directors are liable to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer themselves for re-appointment. Your Directors recommend their re-appointment

Auditors

Messrs Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors, retire at the ensuing Annual General Meeting and have expressed their willingness to continue as Statutory Auditors, if re-appointed

Deposits

Your Company has not accepted any Fixed Deposits during the year under review

Corporate Governance

Your Company believes in adhering to good governance practices and has fully complied with the requirements/ disclosures that have to be made in this regard. A Report on Corporate Governance is enclosed and forms part of this Annual Report. A certificate from the Statutory Auditors on compliance with the provisions of Corporate Governance is also annexed to this Report

Particulars of Employees

The information regarding particulars of remuneration etc of certain employees required under Section 217(2A) of the Companies Act, 1956 and the rules made thereunder is given in an Annexure which forms part of this report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors Report and Accounts are being sent to the Shareholders without this Annexure. Any Shareholder interested in obtaining this Annexure may write to the Company Secretary at the Registered Office of the Company

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

(1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures

(2) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for that period

(3) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(4) they have prepared the annual accounts on a going concern basis Foreign Exchange Earnings and Expenditure

The foreign exchange expenditure during the year was Rs. 139.51 Million Since the Company does not have any manufacturing facility, the other particulars required to be provided in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable

Acknowledgments

The Directors place on record their appreciation for the continued support and co-operation received from the various Government Authorities including National Highways Authority of India and other Regulatory Authorities, Banks, Financial Institutions and Shareholders of the Company

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

By the Order of the Board

Deepak Dasgupta

Mumbai, April 29, 2011 Chairman

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