DIRECTORS' REPORT
To,
The Shareholders of
AJR INFRA AND TOLLING LIMITED
(formerly Gammon Infrastructure Projects Limited)
Your Directors have pleasure in submitting their 23rd Annual Report together
with the Audited Financial Statements of the Company for the financial year ended March
31, 2024 ("Financial Year").
FINANCIAL HIGHLIGHTS
The financial highlights of the Company on stand-alone and consolidated basis for the
Financial Year are as under:
|
|
|
|
(Rupees Lakhs) |
| Particulars |
Standalone |
Consolidated |
|
Financial Year ended March 31, 2024 |
Financial Year ended March 31, 2023 |
Financial Year ended March 31, 2024 |
Financial Year ended March 31, 2023 |
| Income |
2022.42 |
1341.15 |
7,668.49 |
13,288.98 |
| Earnings before Interest, Tax, Depreciation and Amortization |
(23,075.52) |
(1,27,099.81) |
3710.19 |
3,182.48 |
| Financial Costs |
906.23 |
774.44 |
27,879.96 |
28,092.45 |
| Depreciation and Amortization |
2.83 |
2.68 |
3,836.30 |
5,057.08 |
| Tax Expenses |
102.01 |
62.75 |
122.41 |
373.87 |
| Minority Interest & Share of Profit of Associates |
NA |
NA |
(4,266.79) |
3956.04 |
| Net Profit after Tax/(Loss) |
(24,086.59) |
(1,27,939.68) |
(23,057.76) |
(1,60,500.50) |
DIVIDEND & RESERVES
The Board expressed its inability to recommend any dividend for the Financial Year in
view of the liquidity constraints. Hence, no amount has been transferred to any reserve.
COMPANY'S BUSINESS
Joint Venture:
Your Company, in consortium with Gammon Engineers And Contractors Private Limited ("GECPL"),
is constructing a road project in the State of Odisha on Engineering, Procurement and
Construction ("EPC") mode from National Highways Authority of India ("NHAI")
under the EPC agreement dated 3rd January, 2019. Subsequent, to
signing of Supplementary Agreement dated 29th January, 2020, the Appointed Date
was declared as 11th February, 2020.
The Company has fully mobilized and commenced the construction works at project site.
The Company has achieved 67.08% of financial progress as on 31st March 2024.
In addition to the above, the Company has 3 (three) projects in the Road Sector, 2
(two) in the Port Sector, 4 (four) in the Power Sector and 1 (one) project in real estate
sector, which are at various stages of construction, under development and/or operation
& maintenance through project specific Special Purpose Vehicles ("SPVs").
Out of the 4 (four) road projects and 4 (four) power projects, 2 (two) operational
projects in road sector viz., Patna Highway Projects Limited ('PHPL') &
Rajahmundry Godavari Bridge Limited ('RGBL') and 1 (one) project in the power sector viz.,
Pravara Renewable Energy Limited ('PREL') were admitted to Corporate Insolvency
Resolution Process ("CIRP") under the provisions of the Insolvency And
Bankruptcy Code, 2016 ("IBC") by the National Company Law Tribunal ("NCLT").
Out of the afore-mentioned projects under CIRP:
Patna Highway Projects Limited
- The Company had filed two applications 920/2022 and 922/2022 on 13.07.2022 before
Hon'ble NCLAT against the impugned Order dated 10th May 2022 of Hon'ble NCLT
Delhi of approving the resolution plan of Silver Point Luxembourg and rejecting the
Company's Application under Section 12A of Insolvency and Bankruptcy Act (IBC) 2016. The
Hon'ble NCLAT dismissed both the applications of the Company relying on Commercial Wisdom
of the Committee of Creditors and the jurisdiction limits of the Tribunal under IBC 2016.
The details submitted by the Company with respect to the fraud and misappropriation of
funds from the Escrow Account by the Lenders. Being aggrieved by the impugned Orders dated
25th May 2023 and 20th October 2023 the Company has filed a petition
before the Hon'ble Supreme Court of India on 03rd July 2023 and 4th December
2023 respectively.
On 3rd September, 2022, the Company had filed a complaint before Hon'ble
Chief Metropolitan Magistrate Court, Dwarka South West, New Delhi under Section 200 of
Code of Criminal Procedure against NHAI and the same was dismissed on 26th September,
2023 stating that the matter, being a civil matter, cannot be tried in a criminal court.
On 24th September, 2022, the Company had filed a FIR at Entally Police
Station, Kolkata against Mr. Sutanu Sinha, that the Resolution Professional had forged
signatures against which the Resolution Professional filed an application before the
Hon'ble Calcutta High Court to quash the FIR.
Pravara Renewable Energy Limited
- in the matter related to PREL, the Hon'ble NCLT, Mumbai bench had vide its order
dated 6th January, 2023, admitted PREL for Corporate Insolvency Resolution
Process and appointed Mr. Sandeep Jawaharlal Singhal as an Interim Resolution
Professional. PREL subsequently filed an appeal with Hon'ble National Company Law
Appellate Tribunal ('NCLAT') against the aforesaid impugned order. The Hon'ble NCLAT was
pleased to grant an interim stay vide its order dated 3rd February, 2023 which
has been further extended upto 14th October, 2024.
Sikkim Hydro Power Ventures Limited
The Board of Directors of the Company at its Board meeting held on 19th
June, 2024 has approved the proposal to obtain the approval of the shareholders of the
Company under Regulation 24(5) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 for sale/transfer/disposal/dilution of 100% of the total
paid up capital of Sikkim Hydro Power Ventures Limited ('SHPVL'), a wholly-owned material
subsidiary of the Company
The said sale/transfer/disposal shall be made at a price not less than the fair market
value, shall not be made to any related party and shall be subject to the approval of the
shareholders and all other necessary statutory approvals
Ras Cities And Townships Private Limited:
The Board of Directors of the Company at its Board meeting held on 19th
June, 2024 has approved the proposal to obtain the approval of the shareholders of the
Company under Regulation 24(5) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 for sale/transfer/disposal/dilution of 100% of the total
paid up capital of Ras Cities And Townships Private Limited ('RCTPL'), a wholly-owned
material subsidiary of the Company
The said sale/transfer/disposal shall be made at a price not less than the fair market
value, shall not be made to any related party and shall be subject to the approval of the
shareholders and all other necessary statutory approvals
Sony Mony Developers Private Limited
The subsidiary of the Company is in the business of acquiring property, real estate by
way of purchase, lease or otherwise and to develop property, real estate and to turn to
account such property, real estate by way of sale, lease, renting out or otherwise.
THE FUTURE
In the infrastructure sector, as with many industry peers, your Company has encountered
resource challenges in recent years. There exists a significant disparity between the
Company's internal accruals and the capital investment demands for both ongoing and
upcoming projects as well as revenue expenditures.
The unfavourable market conditions and the profound impacts of the global headwinds
have reverberated through economies and businesses, India included.
However, in response to these challenges, the Company is actively pursuing the
realization of its receivables from entities like National Highways Authority of India and
other public sector authorities. Additionally, with the resolution of specific contractual
obligations related to delayed projects, we anticipate the release of previously
encumbered resources, which will steer the Company back into the mainstream.
Your Company is diligently implementing measures to optimize use of available
resources, to ensure that the Company overcomes its challenges.
While we acknowledge the hurdles we have faced, we maintain a forward-looking stance.
In the forthcoming year, we are optimistic about rejuvenating the Company's financial
health, bridging resource gaps, and leveraging new opportunities with the opening of
infrastructure sector in the country.
Our unwavering commitment to adapt, innovate, and seize emerging prospects will serve
as the cornerstone of our future endeavours. The resilience and collective dedication of
our team, combined with our strategic vision, are poised to guide us towards a prosperous
and sustainable future.
As the infrastructure landscape evolves, your Company with its vast experience will
continue to be a trailblazer, contributing to the nation's connectivity, convenience, and
sustainable development. Our pursuit of excellence under all situations remains the
driving force propelling us toward new horizons of success.
SHARE CAPITAL OF THE COMPANY
There has been no change in the share capital of the Company during the Financial Year.
The paid up share capital of the Company stood at Rs.188.36 Crores as at 31st March,
2024 comprising of 941,830,724 equity shares of Rs.2/- each fully paid up.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company's internal control systems with reference to Financial Statements
commensurate with the nature and size of its business operations. Your Company has
maintained a proper and adequate system of internal controls. This ensures that all Assets
are safeguarded and protected against loss from unauthorized use or disposition and that
the transactions are authorised, recorded and reported diligently. The Management
continuously reviews the internal control systems and procedures for the efficient conduct
of the Company's business.
INTERNAL AUDIT
M/s. Bagaria & Co. LLP, Chartered Accountants, Mumbai are the internal auditors of
the Company.
The Internal Auditors monitors and evaluates the efficacy and adequacy of internal
control system in the Company, its compliances with operating systems, accounting
procedures and policies and reports the same on quarterly basis to the Audit Committee.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the
representations received from the operating management, and after due enquiry, 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 losses
of the Company for the period;
c. 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;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down adequate internal financial controls to be followed by the
Company and such internal financial controls operated effectively during the Financial
Year 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.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Board of Directors
Mr. Mahendra Kumar Agrawala was appointed as an additional director w. e. f. 30th
October 2023 in the category of an independent director, consequent to the expiry of his
tenure of 5 years as an Independent Director effective from 30th October 2023.
Ms. Homai Daruwalla completed her second and final term as an Independent Director on
29th June, 2024 and consequently she ceased to be a Director of the Company.
The Board of Directors and the Management of the Company expressed their deep appreciation
and gratitude to Ms. Homai Daruwalla for her valuable guidance and invaluable contribution
during her Directorship
Mr. Srinivasu Chaganti has been appointed as an Additional Director with effect from 6th
July, 2024, in the category of Non-Executive Non Independent Director.
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of the Company, Mr. Subhrarabinda Birabar is liable to retire by rotation at
the ensuing Annual General Meeting and has offered himself for re-appointment.
Independent Directors of the Company have furnished necessary declarations to the
Company under Section 149(7) of the Companies Act, 2013, confirming that they meet with
the criteria of Independence as prescribed for Independent Directors under Section 149(6)
of the Act and Regulation 16(b) of the Securities And Exchange Board of India (Listing
Obligations & Disclosures Requirements) Regulations, 2015, (hereinafter "SEBI
Listing Regulations").
Key Managerial Personnel
In terms of the provisions of Section 203 of the Companies Act, 2013, read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Mineel
Mali, Whole-Time Director; Mr. Vinay Sharma, Chief Financial Officer and Mr. Kaushal Shah,
Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company.
REMUNERATION POLICY AND BOARD EVALUATION
In compliance with the provisions of the Companies Act, 2013 and Regulation 19 of the
SEBI Listing Regulations, the Board of Directors on the recommendation of the Nomination
& Remuneration Committee, adopted a Policy on remuneration of Directors and Senior
Management. The Remuneration Policy is stated in the Corporate Governance Report.
Performance evaluation of the Board was carried out during the Financial Year. The
details about the same are given in the Corporate Governance Report.
FAMILIARISATION PROGRAMMES FOR THE INDEPENDENT DIRECTORS
The details about the familiarization programmes for the Independent Directors is given
in the Corporate Governance Report.
BOARD MEETINGS
The Board met eight times during the Financial Year and the details of the meetings
attended by Directors is given in the Corporate Governance Report. The intervening gap
between the two consecutive meetings was within the period prescribed under the Companies
Act, 2013 and SEBI Listing Regulations.
DEPOSITS
During the Financial Year, the Company has not accepted any deposits within the meaning
of Section 73 and 76 of the Act, read with Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
The details of loans, guarantee or investment under Section 186 of the Companies Act,
2013 are given under Notes to Accounts of financial statements.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions entered by the Company during the financial year were in
the ordinary course of business and on arm's length basis. Details of material related
party transactions are given in the prescribed Form AOC - 2 which is appended to this
report as Annexure 1.
The policy on Materiality of Related Party Transactions as approved by the Board is
uploaded on the Company's website and can be accessed at the Web link
https://ajrinfra.in/sec_info_pdf/ PolicyonRelatedPartyTransactions2021.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In view of the nature of business activities currently being carried out by the
Company, your Directors have nothing to report with respect to Conservation of Energy and
Technology Absorption as required under Section 134(3)(m) read with Rule 8 of the
Companies (Accounts) Rules, 2014.
Foreign exchange outgo (actual outflows): Nil
Foreign exchange earned (actual inflows): Nil
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
The list of subsidiaries, joint ventures and associate companies of the Company are
given in Form MGT-7 (Annual Return), which is uploaded on the Company's website and can be
accessed at the weblink https:// www.ajrinfra.in/AnnualReturns.html.
Vizag Seaport Private Limited ('VSPL') is the Special Purpose Vehicle (SPV) formed by
the Company to operate Two Multi-Purpose Berths EQ-8 & EQ-9 Berths in the Northern Arm
of the Inner Harbour at Visakhapatnam Port on a Build, Operate and Transfer (BOT) basis
for a period of 30 years under a Concession Agreement dated 28th November 2001
signed with VSPL with Visakhapatnam Port Trust with a Terminal capacity of 9 MTPA.
The terminal offers its customers the berthing & handling facilities up to Baby
Cape Size Vessels arriving with a Draft of -14.5 m. While the commercial operations
commenced in July 2004, the Terminal has been handling about 7 MTPA at present and for the
Financial Year 202324 handled 7.30 MNMT.
VSPL controls the road movement of the cargo with digital challan for effective
turn-around time of fleet on the field. The Electrification of VSPL railway sidings are
providing cost effective operation of locos that is being passed onto major clients. The
project has been capitalized at Rs.34,869.77 Lakhs.
Indira Container Terminal Private Limited ('ICTPL'), a subsidiary of the Company is a
Special Purpose Vehicle promoted by the Company, Gammon India Limited and Noatum Ports
Sociedad Limitada Unipersonal SLU, formerly known as Dragados SPL, Spain for construction
and development of an Offshore Container Terminal on build, operate and transfer (BOT)
basis in the Mumbai Harbor and to carry out container operations from the existing Ballard
Pier Station Container Terminal (BPS) of Mumbai Port Trust. During the Financial Year
2023-24, ICTPL has handled 85 RORO vessels, 76 Steel vessels and Passenger vessel with
84.721 vehicle units and 1,068,134 Tons of Steel earning revenue of Rs.48.27 Crores,
though ICTPL could only get O & M expenses as per the agreement with the Lenders and
the MbPT.
Sidhi Singrauli Road Project Limited ('SSRPL'), a wholly- owned subsidiary of the
Company for designing, construction, finance and maintenance of a 102.6 kms long,
four-lane dual carriageway on NH-75E, which includes the construction of new bypasses of
Kauchwahi, Behri, Karthua, Bargawa and Gorbi and re-alignment of certain stretches and is
located in the State of Madhya Pradesh. SSRPL was facing various issues like land
acquisition, Forest and Environmental Clearances, approval to GADs etc. since start of the
project. The construction activity was halted due to lack of finance since October, 2018.
The Company had attempted to obtain finance to complete the SSRPL Project despite of
minimal support from Madhya Pradesh Road Development Corporation ('MPRDC') in resolving
various issues aroused due to non-fulfilment of MPRDC's Conditions Precedent.
Ultimately, the MPRDC had terminated the SSRPL Project on 13th August, 2020. SSRPL
received a letter from Punjab National Bank, Lead Bank ('PNB') of the consortium of banks
for the one-time settlement ('OTS') of the debts of SSRPL at Rs.275 Crores. SSRPL is
pursuing arbitration proceedings against MPRDC and Ministry of Road Transport and Highways
in order to determine the party liable for settlement of the afore-mentioned OTS with the
PNB.
Patna Highway Projects Limited, an erstwhile wholly owned material subsidiary of the
Company has been admitted for Corporate Insolvency Resolution Process by Hon'ble National
Company Law Tribunal, New Delhi Principal Bench under section 9 of Insolvency And
Bankruptcy Code 2016 ('IBC').
The Hon'ble NCLT had vide its order dated 10th May, 2022 dismissed the Company's
application filed under Section 60(5) of Insolvency And Bankruptcy Code, 2016. The Company
had filed an appeal before the Hon'ble NCLAT against the Hon'ble NCLT, Delhi's Order dated
10th May, 2022. One of the appeals being Appeal no.920 was filed challenging the approval
of the Resolution Plan of Silverpoint Luxembourg. The second appeal being Appeal no.922
was filed challenging the rejection for the Resolution Plan of the Company.
Appeal no.920 was dismissed on 25th May, 2023 against which the Company has
filed an appeal before the Hon'ble Supreme Court of India. Appeal no.922 was dismissed on
20th October 2023 against which the Company is about to file an appeal before
the Hon'ble Supreme Court of India.
On 3rd September, 2022, the Company had filed a complaint before Hon'ble
Chief Metropolitan Magistrate Court, Dwarka South West, New Delhi under Section 200 of
Code of Criminal Procedure against NHAI and the same was dismissed on 26th
September, 2023 stating that the matter, being a civil matter, cannot be tried in a
criminal court. The Company had also filed a writ against the NHAI and various authorities
before Hon'ble High Court of Patna.
On 24th September, 2022, the Company had filed a FIR at Entally Police
Station, Kolkata against Mr.Sutanu Sinha, that the Resolution Professional had forged
signatures against which the Resolution Professional filed an application before the
Hon'ble Calcutta High Court to quash the FIR.
Sikkim Hydro Power Ventures Limited ('SHPVL') is the Special Purpose Vehicle
incorporated for developing Rangit II Hydroelectric Power Project in Sikkim on BOOT basis
('SHPVL Project'). SHPVL Project involves the development of a 66 MW run-of-the-river
Hydroelectric Power Project in Rimbi River, a tributary of River Rangit.
The Hon'ble NCLT had vide order dated 3rd June, 2022 terminated the
Corporate Insolvency Resolution Process and allowed ex-management to take up the
management of SHPVL. Consequently, the Board of Directors of SHPVL has taken up the
management of SHPVL. The Board of Directors of the Company at its meeting held on 1st
September, 2022 approved the Share Purchase Agreement to be executed between the Company,
SHPVL and Statkraft IH Holding AS having office in Oslo, Norway for sale and transfer of
the 100% equity shareholding held by the Company in SHPVL to Statkraft for a total
consideration of Rs.90 Crores (including repayment of the liabilities of SHPVL).
Ras Cities And Townships Private Limited, a wholly- owned subsidiary ('RCTPL') of
Gammon Projects Developers Limited, a wholly-owned subsidiary of the Company entered into
a Memorandum of Understanding dated 13th May, 2022 with the promoters of Sony
Mony Developers Private Limited ('SMDPL') for acquiring 10,000 equity shares of Rs.10/-
each of SMDPL being 100% of total paid-up capital of SMDPL. The said transfer of 10,000
equity shares of SMDPL to RCTPL was completed on 9th June, 2022.
BOARD COMMITTEES
At present, the Board has the following committees to assist in its work:
(i) Audit Committee to, inter-alia, oversee and review the financial reporting system
and disclosures made in its financial results;
(ii) Stakeholders' Relationship Committee to, inter-alia, redress investor complaints;
(iii) Nomination & Remuneration Committee to, inter- alia, approve appointments and
remuneration of executive directors and lay down nomination and remuneration policies of
the Company;
(iv) Compensation Committee to administer 'employee stock option schemes';
(v) Business Review Committee to review business, projects and opportunities that arise
from time to time;
(vi) Corporate Social Responsibility Committee to formulate and implement a 'corporate
social responsibility policy' for the Company and
(vii) Risk Management Committee to monitor and review the risk management plan of the
Company.
The constitution of various committees, its powers, duties and meetings during the
Financial Year have been elaborated in detail in the 'Corporate Governance Report'.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company does not have any amount/shares due to be transferred to Investor
Education and Protection Fund.
VIGIL MECHANISM/WHISTLE BLOWER
In terms of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for
Directors and employees to report genuine concerns has been established by the Board along
with whistle blower policy. The whistle blower policy has been uploaded on the website of
the Company and the same can be accessed at the web link
https://ajrinfra.in/sec_info_pdf/Whistle_Blower_Policy. pdf
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Since there is no average net profit for the Company for the previous three financial
years, no specific funds are required to be set aside and spent towards the Corporate
Social Responsibility of the Company during the Financial Year. The Company is yet to
formulate the CSR Policy.
ANNUAL RETURN
In accordance with the Companies Act, 2013, Annual Return in Form MGT-7 is uploaded on
the Company's website and can be accessed at the weblink https://
www.ajrinfra.in/AnnualReturns.html.
REPORT ON CORPORATE GOVERNANCE
In terms of Regulation 34 of the SEBI Listing Regulations, a Report on Corporate
Governance along with Compliance Certificate issued by Mr. Veeraraghavan. N, Practicing
Company Secretary (Certificate of Practice Number 4334) is attached and forms integral
part of this Report (herein referred to "Corporate Governance Report").
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Attention of the members is invited to a separate section titled 'Management Discussion
and Analysis Report' which is covered in this Annual Report.
SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards.
REPORTING OF FRAUDS BY AUDITORS
During the Financial Year, neither the statutory auditors nor the secretarial auditor
has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013,
any instances of fraud committed against the Company by its officers or employees, the
details of which would need to be mentioned in the Board's report.
STATUTORY AUDITORS
M/s. Natvarlal Vepari & Co., Chartered Accountants (FRN: 106971W W), the Statutory
Auditors of the Company, holds office until the conclusion of the 26th Annual General
Meeting ("AGM").
STATUTORY AUDITORS' REPORT
The Statutory Auditors have qualified their opinion in their Independent Auditors
Report as follows:
Basis for Qualified Opinion
(a) Attention is invited to Note 27 (a) of the Revised Financial Statement, relating to
the Project in the SPV; Indira Container Terminal Pvt Ltd. There exists material
uncertainty relating to the future of the Project where the exposure of the Company in the
SPV/project is Rs.13,243.29 lacs (funded and nonfunded). The draft settlement agreement
between the SPV, Ministry of Shipping (MoS), Mumbai Port Trust (MbPT) has been rejected by
MbPT. The Company and the SPV are in discussion with MbPT and MoS to reconsider the
Project. The credit facility is marked as NPA by the Lenders.
During the quarter the Lenders have initiated proceedings under Insolvency and
Bankruptcy code, 2016 before the NCLT and the NCLT admitted the said petition and
authorized the appointment of Interim Resolution Professional ("IRP") vide its
orders dated May 09,2024. The Company moved NCLAT and obtained interim stay on the
operation of the order of the NCLT vide order dated May 16,2024. The stay is granted is
till July 25 , 2024,, and we are unable to opine which way the matter would proceed after
the completion of the period of stay. The exposure of the Company towards the said project
is Rs.13,243.29 lacs which is threatened by the possible loss of control if the Company's
petition is not upheld on merits. Without prejudice to the above.
The SPV and MbPT have initiated arbitration proceedings which were in progress which
may abate if the lenders petition is upheld, and the IRP is reinstated. The MBPT has
requested conciliation proceedings which are also under active discussions. One of the
grounds on which the stay is granted is the proposal of OTS which has been submitted by
the Company whose terms and conditions has to be fulfilled before the next date for the
lenders to withdraw their petition. There are uncertainties to the adherence to terms and
conditions which inter alia requires an infusion of a substantial sum of money by an
Investor identified by the Company. In view of the above reasons we reiterate that we are
unable to opine whether the Company would retain control, honour the terms of the OTS and
its petition will be upheld by the Courts.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditor's Responsibilities for the Audit of the
Revised Standalone Financial Statements section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical requirements that are relevant to our audit
of the Revised Standalone Financial Statements under the provisions of the Companies Act,
2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion on the Revised Standalone Financial Statements.
Material Uncertainty relating to Going Concern.
We invite attention to Note 28 of the Revised Financial Statement relating to material
uncertainty relating to going concern. The Company's current liabilities exceeded current
assets significantly and are at Rs.1,49,228.65 lacs. There is a continuing mismatch
including defaults in payment of its financial obligations to its subsidiary Company. The
liquidity crunch is affecting the Company's operation with increasing severity. We also
invite attention to note 27 of the Statement wherein status of various SPV projects which
are stressed due to delay in completion, cost overrun, liquidity crunch and have legal
issues, arbitration proceedings or negotiations including the pending NCLT petition filed
by the creditors of PHPL, admission of ICTPL before NCLT. The future of these projects as
also the successful progress and completion depends on favourable decisions on outstanding
litigations being received by the Management. The resolutions planned by the Management
are pending since a long time and are not concluding in favour of the Company. These
conditions indicate the existence of Material Uncertainty which may impact the Company's
ability to continue as a going concern. Our report is not qualified on this matter.
Emphasis of Matter
Without qualifying our opinion, we draw attention to the following matters;
(a) We invite attention to Note No 1 (C) to Revised Standalone Financial Statements.
These Revised Standalone Financial Statements arise out of the revision to the standalone
financial statements as at March 31, 2024 adopted by the Board of Directors on May 30,
2024 and those financial statements have been revised to give effect to the erroneous
classification of an amount of Rs.4,150 lacs under Non-Current Borrowings as against its
classification under Current Borrowings as Current maturities of Non-Current Borrowings.
This error occurred due to the erroneous formula in the excel file of the financial
statements which has been since corrected to classify the amount of Rs.4,150 lacs under
Current Borrowings as Current Maturities of Non-Current Borrowing. There has been no other
change either to the Statement of Profit and Loss, Statement of Cash flow or any other
elements of the Balance Sheet.
Since the said earlier financial statements adopted by the Board of Directors on May
30, 2024 were yet to be sent to the shareholders and consequently not adopted by the
shareholders of the Company, the Board of Directors have now modified the financial
statements to give effect to the erroneous classification of an amount of Rs.4,150 lacs as
aforesaid and have now approved these revised financial statements at their meeting held
on August 14, 2024 and we have been called upon to issue our Audit Report on such revised
financial statements and also a report on the effectiveness of internal control with
reference to revised financial statements.
We had issued our modified opinion vide our Independent Auditors' Report dated May 30,
2024 on the aforesaid standalone financial statements dated May 30, 2024. This Revised
Independent Auditors Report supersedes our Independent Auditors' Report dated May 30, 2024
issued on standalone financial results dated May 30, 2024.
In accordance with the provisions of Standard on Auditing 560 (Revised) 'Subsequent
Events' issued by The Institute of Chartered Accountants of India, our audit procedures,
in so far as they relate to the revision to the Revised Standalone Financial Statements,
have been carried out solely on this matter and no additional procedures have been carried
out for any other events occurring after May 30, 2024 (being the date of our earlier audit
report on the earlier standalone financial statements).
(b) Attention is invited to Note 30(a) of the Revised Financial Statement in respect of
Patna Highway Projects Limited (PHPL) where the CIRP proceedings had been initiated. NCLT
has approved the resolution plan vide order dated May 10,2022 submitted by Resolution
Professional and as per the NCLT Order no surplus is available to the Company.
The Company lost the appeal before NCLAT and has filed an appeal in Supreme court
against the NCLAT order and expects a favourable outcome on the matter.
Pending the outcome, in view of the long pendency of the matter under litigation, the
Company out of abundant caution and on the principle of prudence has impaired the entire
exposure in its books for accounting purposes while retaining its right to litigate. The
Lawyers have advised the management that it has a good case for a favourable outcome of
the litigation. Based on their advise the Company is also contesting the invocation of the
Guarantee and accordingly has not accounted the invocation.
(c) Attention is invited to Note 27(f) of the Revised Financial Statements, relating to
a power project where the operation of the project is under constraints as detailed in the
note. The SPV has also invoked arbitration against the Karkhana and the Karkhana has
approached Debt Recovery Tribunal (DRT). Based on the submission of Karkhana that the
Plant was possessed and run by Karkhana, the tribunal ordered to maintain status quo.
The Company is yet to file its response at DRT. Also, the SPV's credit facilities are
marked as Non-Performing Assets. The statutory auditor of the SPV have disclaimed their
opinion in their audit report for the year ended March 31,2024 for illegal occupancy of
the factory by Karkhana and that the access to facility and records and transactions for
the period from January 1, 2022 to March 31, 2024 are not available with the Company. The
Company on a prudent basis has provided for the entire funded exposure amounting to
'10,745.53 lacs as at March 31, 2024. The Company has provided a letter of Comfort to the
lenders towards their credit facilities.
In view of the above-mentioned facts the management contends:
i. The litigation is outstanding since more than
2 years now and there is no progress in the matter before the courts.
ii. The receiver appointed by the DRT does not report the transactions to the Company
and takes decisions of the Company Management.
iii. Since there is no progress in the matter in accordance with IND AS 110 para 7 the
Company has effectively lost control over the operations and is unable to direct the
variable returns from its exposure in its favour.
iv. It has no record of transaction entered into on its accounts nor it has access to
its cash flows.
Therefore, pending the settlement of the litigation, the Company contends it has no
control as it does not satisfy paragraph 7 of INDAS 110
The Statutory Auditors of the SPV on account of noninclusion of aforesaid transactions
conducted by the receiver has given a disclaimer of opinion.
(d) We invite attention to Note 27 (c) of the Revised Financial Statement, regarding
unilateral termination and closure of Concession in a bridge project, which is subject to
pending litigations/arbitrations at various forums, which may impact the carrying values
of investments and loans and advances given to the subsidiary. The Company's funded
exposure towards the said project is Rs.2,354.26 lacs against the claim by the SPV of
'1,787.13 lacs. Pending conclusion on these legal matters, the company has made provision
for an amount of Rs.583.36 lacs being the excess of the exposure over the claim amount
submitted without considering the interest which may be awarded by the courts.
(e) We invite attention to Note 27 (d) of the Revised Financial Statement, in relation
to the intention to exit one of the hydro power projects at Himachal Pradesh and seeking a
claim of an amount against the amount spent on the Project. The Company's subsidiary has
cited reasons for non-continuance on account of reasons beyond its control. Pursuant to
the completion of Arbitration vide order dated 23rd January 2023, the SPV's
share of the arbitration proceeds is adequate to cover the exposure and therefore no
adjustments are required towards the exposure of Rs.7,120.20 lacs.
Clarification for the afore-mentioned qualified opinions by the Statutory Auditors in
their Report are provided in detail in Operational Overview of Management & Discussion
Analysis forming part of the Annual Report of the Company.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of
SEBI Listing Regulations,
Mr. Veeraraghavan. N, Practicing Company Secretary (Certificate of Practice Number:
4334) was appointed to undertake the Secretarial Audit of the Company.
In terms of Regulation 24A of SEBI Listing Regulations and provisions of Section 204 of
the Companies Act, 2013, the Secretarial Audit Report in Form no. MR-3 has been annexed to
this Board Report as Annexure 2.
Observations made by the Secretarial Auditor in their Report are self-explanatory.
PARTICULARS OF EMPLOYEES
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 annexed to this Report as Annexure 3.
During the Financial Year, none of the employees are in receipt of remuneration which
is in excess of the limits as specified in Rules 5(2) and 5(3) of the Companies
(Appointment & Remuneration of Managerial Personnel) Rules, 2014, as amended from time
to time.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
Consequent to change in personnel of the Company and its subsidiaries, the Board had
re-constituted Internal Complaints Committee ('Committee') w.e.f. 1st September, 2022. The
Committee now comprises of Ms. Charushila Choche as Chairperson, Mr. Ravindra Desai, Mr.
S. Lakshmayyah and Ms. Akansha Rathi, Company Secretary in Practice and Insolvency
Professional as the members of the Committee.
During the Financial Year, no complaint was filed before the Internal Complaints
Committee.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There were no material changes and commitments after the closure of the year till the
date of this report, which affect the financial position of the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
No significant or material orders were passed by the Regulators or Courts or Tribunals
which impacts the going concern status and Company's operations in future.
ACKNOWLEDGEMENTS
The Board wishes to place on record their appreciation for the support received by the
Company from its shareholders and employees. The Directors also wish to acknowledge the
co-operation and assistance received by the Company from its business partners, bankers,
financial institutions and various Governments, Semi Government and Local Authorities.
|
For and on behalf of the Board of, |
|
AJR INFRA AND TOLLING LIMITED |
|
(formerly Gammon Infrastructure Projects Limited) |
|
Mineel Mali |
|
Whole-Time Director |
|
DIN: 06641595 |
|
Subhrarabinda Birabar |
| Place: Mumbai |
Director |
| Date: 14th August, 2024 |
DIN: 03249632 |
