To,
The Members of,
MARG Limited
Your Directors are presenting the 20th Annual Report together with the
Financial Statements for the financial year ended 31st March 2015.
i. financial results:
| Particulars |
Year Ended 31st March, 2015 |
Year Ended 31st March, 2014 |
| Income from operations |
168.18 |
304.66 |
| Non-operating Income |
3.13 |
4.17 |
| Total Income |
171.31 |
308.83 |
| Profit/(Loss) before Depreciation, Finance Cost and Tax Expense (EBDIT) |
(16.36) |
(51.18) |
| Depreciation |
22.08 |
11.42 |
| Interest & Finance charges |
136.35 |
171.91 |
| Profit/(Loss) before tax and exceptional items |
(174.79) |
(234.51) |
| Tax Expense |
(2.34) |
29.29 |
| Profit/(Loss) after tax |
(172.45) |
(263.80) |
| Balance in Profit & Loss Account |
42.09 |
305.89 |
| Amount available for appropriation |
(130.36) |
42.09 |
| Dividend |
Nil |
Nil |
| Dividend Tax |
Nil |
Nil |
| Amount transferred to General Reserve |
Nil |
Nil |
| Balance in Profit and Loss Account |
(130.36) |
42.09 |
During the Financial Year 2014-15, total revenue of the Company stands at Rs.171.31
Crores as against Rs.308.83 in the previous year. The EBDIT is Rs. (16.36) Crores,
compared to previous year of Rs. (51.18). The Company incurred a loss before tax of
Rs.174.79 Crores and a net loss of Rs.172.45 Crores during the financial year ended March
31, 2015 as compared to loss before tax of Rs. (234.51) Crores and a net loss of '(263.80)
Crores in the previous year. This is primarily due to lack of fund availability for
projects, depressed markets, increase in raw materials, and labour cost.
2. DIVIDEND
Due to losses incurred by the Company, your Directors have not recommended any dividend
for the financial year ended March 31, 2015.
3. business highlights 2014-15
A. MARG Revenue Stands at Rs.171.31 Crores in Financial Year 2014-15, including EPC
Current order book at around Rs.2,683.48 Crores
B. Karaikal Port Private Limited (KPPL), a subsidiary of your Company has
successfully handled 4.89 MMT of cargo in Financial Year 2014-15 and reported a top line
of Rs.225.97 crores and EBITDA Rs.95.55 crores.
4. DIRECTORS
The composition of the Board of Directors is in compliance with Clause 49 of the
Listing Agreement and Section 149 of the Companies Act, 2013.
The Company has received necessary declarations from the Independent Directors stating
that they meet the criteria of independence as specified in Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
In accordance with provisions of the Companies Act, 2013, Mrs. V P Rajini Reddy retires
by rotation and being eligible, seeks re-appointment at the ensuing Annual General
Meeting.
5. MEETINGS
During the year under review, the Board of Directors met 7 times.
In accordance with the provisions of the Companies Act, 2013, a separate meeting of the
Independent Directors of the Company was held on February 12, 2015.
6. performance evaluation
Pursuant to the provisions of Section 134 (3) (p) read with Articles VII and VIII of
Schedule IV of the Companies Act, 2013, the Board is of opinion that a system for
performance evaluation of itself and its committees would be established very soon. As
contemplated by the Act, the independent directors at a meeting conducted a review of the
performance of the Chairman after taking into account the views of the non-executive
members of the Board. The process put in place by the Board, in accordance with the
Companies Act, 2013 and the relevant provisions of the Listing Agreement, is aimed at
improving the performance of the Board, its committees and its members.
7. audit related matters
A. AUDITORS
M/s. K Ramkumar & Co., Chartered Accountants, Chennai, Statutory Auditors of the
Company retires at the ensuing Annual General Meeting and offer themselves for
re-appointment from the conclusion of the ensuing Annual General Meeting till the
conclusion of the next Annual General Meeting held thereafter as per the provisions of the
Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, subject to
ratification of the appointment by the members at every AGM held after the ensuing AGM.
The Company has received their Consent Letter to the effect that their re-appointment if
made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act,
2013.
B. SECRETARIAL AUDITOR
The Board had appointed M/s Satyaki Praharaj & Associates, Company Secretaries in
Whole-time Practice to carry out the Secretarial Audit under the provisions of section 204
of the Companies Act, 2013 and the Rules made thereunder. The report of the Secretarial
Auditor is enclosed to this report as Annexure A.
C. COST AUDIT
During the financial year 2014-15, Your Company has maintained cost accounting records
in accordance with the provisions of Companies (Cost Records and audit) Rules, 2014. The
Company shall file the Compliance Report as certified by the Cost Accountant Mr. G
Sunderasan for the financial year 2014-15 with Central Government as prescribed under
Companies (Cost Records and audit) Rules, 2014, in due course.
8. subsidiary companies
STATUS
Your Company has total of 58 subsidiaries as on 31st March 2015, out of which 5 Non
wholly-owned Companies and 53 Wholly-owned companies, including 25 Step-down Subsidiaries.
There has been no material change in the nature of the business of the Company and its
subsidiaries. Details of major subsidiaries of the Company and their business operations
during the year under review are covered in the Management Discussion and Analysis Report.
subsidiary companies' monitoring framework
All subsidiary companies are Board managed with their respective Boards having the
rights and obligations to manage such companies in the best interest of their
stakeholders.
The Company monitors performance of subsidiary companies, interalia, by the following
means:
• Financial statements, in particular investments made by unlisted subsidiary
companies, are reviewed quarterly by the Company's Audit Committee.
• Minutes of Board meetings of unlisted subsidiary companies are placed before the
Company's Board regularly.
• A statement containing all significant transactions and arrangements entered
into by unlisted subsidiary companies is placed before the Company's Board.
Financial Position and Performance of Subsidiaries and Associates
In terms of Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies
(Accounts) Rules, 2014, the financial position and performance of subsidiaries are given
as an Annexure to the Consolidated Financial Statements.
9. policy and other matters
a. corporate social responsibility
The Company has constituted Corporate Social Responsibility Committee under the
Companies Act 2013, on 30th May 2014 which is making exclusive progress in the field of
Corporate Social Responsibility and Societal interventions. The Committee is predominantly
involved in the areas of Women empowerment, education, health and hygiene, community based
programs, including art, music, sports and other socio economic and culture activities.
This Committee has been entrusted with the responsibility of formulating and recommend
to the Board a CSR policy broadly indicating the activities to be undertaken by the
company apart from the activities (already under implementing) that are mandatory in the
implementation of the frame work of CSR policy and recommend the money to be spent on each
of the activities as prescribed under Act and the Rules made there under.
b. code of conduct
As prescribed under Clause 49 of the Listing Agreement, a declaration signed by the
Chairman and Managing Director affirming compliance with the Code of Conduct by the
Directors and senior management personnel of the Company for the financial year 2014-15
forms part of the Corporate Governance Report.
c. declarations by independent directors
Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act,
2013, the Company has received individual declarations from all the Independent Directors
confirming that they fulfill the criteria of independence as specified in Section 149(6)
of the Companies Act, 2013.
d. extract of annual return
In terms of Section 134 of the Companies Act, 2013 read with Rules 12(1) of the
Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of
the Company for the financial year 2014-15 is provided in Annexure B to this report.
e. management discussion and analysis report
In accordance with the requirements of the Listing Agreement, the Management Discussion
and Analysis Report titled as Management Report is presented in a separate section of the
Annual Report.
f. particulars of loans, guarantees and investments
The particulars of loans, guarantees and investments given by the Company under Section
186 of the Companies Act, 2013 is detailed in Notes to Accounts of the Financial
Statements.
g. related party transactions
All related party transactions that were entered into during the financial year were on
an arm's length basis and all such contracts/arrangements/ transactions have been approved
by the audit Committee.
h. transfer to investor education protection fund
In accordance with provision of Section 124 of the Companies Act, 2013, the dividends
pertaining to the financial year 2007-08, which were lying unclaimed with the Company was
transferred to the Investor Education and Protection Fund during the financial year 2014 -
15. The details of unclaimed dividend transferred to the Investor Education and Protection
Fund has been detailed in the Corporate Governance Report forming part of the Annual
Report. Members who have so far not encashed the divident warrants are requested to make
their claim to the Secretarial Department at the Registered and Corporate Office of the
Company or send an email to investor@marggroup.com
10. general
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under
any scheme ESOS referred to in this Report.
11. corporate governance
Your Company is committed to maintain the highest standards of Corporate Governance and
adhere to the Corporate Governance requirements under clause 49 of Listing Agreement. The
Corporate Governance Report approved by the Board of Directors of the Company, forms part
of this report and a certificate from the auditors of the Company is set out in the
Annexure to this Report.
12. management discussion and analysis report
Management Discussion and Analysis Report for the year under review, forms part of this
annual report is provided in a separate section as stipulated under clause 49 of Listing
Agreement.
13. conservation of energy, technology absorption and foreign exchange earnings
Your Company has taken adequate measures to conserve energy and the Company believes
that productivity from all its workforces can be achieved with interface of latest
technology.
Your Company is not an industrial undertaking in terms of Section 134(3)(m) of the
Companies Act, 2013 read along with Companies Rule 8(3) of the Companies (Accounts) Rules,
2014 and hence, particulars regarding conservation of energy, technology absorption and
adaptation are not applicable and hence the same are not provided.
The information on Foreign Exchange Earnings and Outgo is contained in the note 48 to
the Notes on Account. A separate statement is also attached as Annexure I to this Report.
14. particulars of employees U/S 197
During the year, there was no employee in receipt of remuneration as prescribed in the
Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014. The prescribed particulars of Employees 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 is attached as Annexure C and form part of this Report.
However, in accordance with the provisions contained in the proviso to Section 136(1)
of the Companies Act, 2013, the Annual Report and accounts excluding the aforesaid
information are being sent to the shareholders of the Company. Any member interested in
obtaining such particulars may write to the Company Secretary at the Registered Office of
the Company for the same.
15. directors' responsibility statement
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, in
relation to the audited financial statements of the Company for the year ended March 31,
2015, Your Directors hereby confirmed that;
i. In the preparation of the Annual Accounts for the financial year ended 31st
March 2015, the applicable accounting standards has been followed and there were no
material departures;
ii. 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 or loss account of the Company for the year under review;
iii. They have taken proper and sufficient care to the best of their knowledge and
ability 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;
iv. They have prepared Annual Accounts for the financial year ended 31st
March 2015 on a "going concern basis".
v. They had devised proper systems, internal financial controls to be followed by your
Company and that such internal financial controls are adequate and have been operating
effectively.
vi. The systems to ensure compliance with the provisions of all applicable laws are in
place and were adequate and operating effectively.
16. explanation to the observations made in auditors report
The Directors submit their explanation to the Observations made by the Auditors in
their report for the FY14-15. The relevant Para nos. of the report and reply are as under:
refer paragraph (basis of qualified opinion) of the auditor's report on consolidated
financial statements
• In respect to Note No. 38 to the audited financial statements of the year ended
31st march 2015 regarding unreconciled amount of Rs.6.52 Crores relating to the equipment
loan availed by the Company. The reconciliation of the loan account is under process. The
management is of the opinion that the reconciliation will be completed very soon.
• In respect of M/s. Mukta Infrastructure Private Limited, the respective company
is of opinion that price of land shall appreciate in future and hence no provision for
impairment loss is made.
• In respect of M/s. Arohi Infrastructure Private Limited, the debenture holder
has not exercised the Put option during the FY 2014-15, hence the respective company has
not provided any premium on redemption during the FY 2014-15.
• In respect of M/s. Riverside Infrastructure (India) Private Limited, the
management is taking efforts for resuming the Mall Project and is in discussion with
strategic partners for this purpose. Further, considering the latest valuaution of the
property of the Company, the management considers it appropriate to capitalize the
interest of Rs.39.58 Crores (PY Rs.41.84 Crores) and overheads of Rs.0.67Crores (PY
Rs.3.32 Crores) during the year ended 31st March, 2015. Note No.39 of the Consolidated
Financial Statements is self explanatory.
• In respect of M/s. Marg Logistics Private Limited, the subsidiary had availed
equipment loan and there is an unreconciled amount of Rs.0.43 Crores. The reconciliation
of the loan account is under process. Pending such reconciliation the management considers
it appropriate to classify the same under "Other advances" in the Balance Sheet
as on 31st March 2015. Note No. 40 of the Consolidated Financial Statements is self
explanatory.
refer emphasis of matter of the auditor's report on consolidated financial statements
a) In respect of preparing financial statements on 'Going Concern' basis reference is
drawn to Note No. 31 which is self explanatory.
b) In respect of Property of the Subsidiary Companies provided security for various
loans, reference is drawn to Note No. 32 which is self explanatory.
c) In respect of Property of the Subsidiary Companies provided security for various
loans, reference is drawn to Note No. 33 which is self explanatory.
d) In respect of the Investments in and Advances receivable due from some of its
Subsidiaries Companies, reference is drawn to Note No. 34 which is self explanatory.
e) In respect of deductions made/amount withheld by some customers reference is drawn
to Note No. 35 which is self explanatory.
f) In respect of Work in Progress relating to EPC work done by the Company to one of
its Subsidiary reference is drawn to Note No. 36 which is self explanatory.
g) In respect of investment in shares of a subsidiary of Rs 202.39 Crores given as
security for loan raised by the Subsidiary company, which were invoked by the Bank, such
shares continues to be included in investments, reference is drawn to Note No. 37 which
self explanatory.
h) In respect of Companies which were converted and obtained license under Section 25
of the Companies Act, 1956 during the year, reference is drawn to Note No. 41 which self
explanatory.
refer paragraph (basis of qualified opinion) of the auditor's report on standalone
financial statements:
• In respect to Refer to Note 34 to the audited financial statement of the year
ended 31st March 2015, regarding un-reconciled amount of Rs.6.52 Crores relating to the
equipment loan availed by the company. The reconciliation of the loan account is under
process. Pending such reconciliation the management considers it appropriate to classify
the same under "other advances" in the Balance Sheet as on 31-Mar-2015. Note 34
of the standalone financial statements is self explanatory.
refer emphasis of matter of the auditors' report on standalone financial statements.
• In respect of the financial statements on a 'going concern' basis reference is
drawn to note 29 which is self explanatory.
• In respect of the investments in and advances receivables due from some of its
subsidiaries reference is drawn to note 30 which is self explanatory.
• In respect of deductions made/amount withheld by some customers reference is
drawn to note 31 which is self explanatory.
• In respect of Work in progress relating to EPC work done by the company to one
of its subsidiary reference of is drawn to note 32 which is self explanatory.
• In respect of investment in shares of a subsidiary of Rs 202.39 Crores given as
security for loan raised by the Subsidiary company, which were invoked by the Bank, such
shares continues to be included in investments, reference is drawn to Note No. 33 which
self explanatory.
reply to the qualification made in annexure to the standalone audit report
Point 7(a) & 7(b) of Annexure to Standalone Auditors' report: The delay in the
payment of Provident fund, Employee's State Insurance, Income Tax, Wealth Tax, Custom
Duty, Cess, Sales Tax, Service Tax and other material statutory dues were due to lower
cash inflows from the existing projects and the company is arranging to make the payments
shortly.
Due to slow down in the Infrastructure and Real estate sector and the resultant impact
on the performance of your Company there were defaults in repayments of principle and
interest dues to the Banks and Financial Institutions. However, the management opines that
with improved business scenario, your Company will be able to meet its obligation.
reply to the observations of the secretarial auditor report
a) The Company will file the Annual Financial Statements for the Financial Year 2013-
2014 with Registrar of Companies shortly.
b) Currently, Infrastructure/Real Estate Market is facing hurdles due to various
reasons which also have an impact on our company. Complying to the payments and
maintenance of records under Labour laws is the top most priority of our Company.
Based on the stabilization of the Cash flow, the payments will be streamlined.
17. fixed deposits
During the year under review, your Company has not invited or accepted fixed deposits
from the public.
18. employee stock option scheme
Your Company has implemented Employee Stock Option Scheme for the benefit of the
employees of the Company and its subsidiaries, and is being governed by the Compensation
Committee of the Board of Directors. During the FY 2014-15, the Company has not granted
any option under the Employee Stock Option Scheme. Further, No employee has exercised any
option during the year. The statement is given as Annexure II.
The Company has established a vigil mechanism to promote ethical behaviour in all its
business activities and has in place a mechanism for employees to report any genuine
grievances, illegal, unethical behaviour, suspected fraud or violation of laws, rules and
regulation or conduct to the Chief Vigilance Officer and the Audit Committee of the Board
of Directors. The Policy also provides for adequate protection to the whistle blower
against victimization or discriminatory practices.
acknowledgement
The Directors wish to express their appreciation for the assistance and co-operation
received from the financial institutions, banks, Government authorities, customers,
vendors, Employees and members during the year under review.
For and on behalf of the Board of Directors
G R K Reddy
Chairman & Managing Director
(DIN: 00903778)
Place: Chennai
Date: 31st May, 2015
annexure to the directors' report
Annexure I
Activity in:-Foreign Currency Transactions Expenditure:-
(Rs. in Crores)
| Particulars |
2014-15 |
2013-14 |
| a Value of Imports Calculated on CIF Basis |
|
|
| i Components,Embedded goods and spare-parts |
- |
- |
| ii. Capital goods |
- |
- |
| b Expenditure in Foreign Currencies |
|
|
| i Travelling Expenses |
- |
0.43 |
| ii .Technical /Professional & onference Expenses |
- |
- |
| iii. Hire Charges |
- |
- |
| Total |
0.00 |
0.43 |
| Income:- |
|
(Rs. in Crores) |
| Particulars |
2014-15 |
2013-14 |
| a Income in foreign currencies |
|
|
| Dividend from Subsidiary |
|
|
| Total |
- |
- |
For and on behalf of the Board of Directors
G R K Reddy
Chairman & Managing Director
Place: Chennai
Date: 31st May, 2015.
Annexure - II
Statement as at 31.03.2015 of ESOP Scheme 2006, pursuant to Clause 12 of the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999
|
|
| A |
Options granted: During the year no options have been granted |
| B |
Pricing formula: Options granted to Eligible Employees under this Scheme carry
an Exercise Price at a discount of 20% - 50% to the Market price of the shares determined
with respect to the date of Grant. |
| C |
Options vested (including lapsed after vesting): Nil |
| D |
Options exercised: 107,278 |
| E |
Total number of Ordinary Shares arising as a result of exercise of Options: 107,278 |
| f |
Options lapsed: 379,907 |
| G |
Variation of terms of Options: Nil |
| H |
Money realized by exercise of Options: |
|
Rs. 9,587,550 (During the year no money realized by exercise of Option) |
| I |
Total number of Options in force: Nil |
| J |
Details of Options granted to |
|
a) Senior Management Personnel : Nil |
|
b) Any other employees who received a grant in any one year of Options amounting to
5% or more of the Options granted during that year: Nil |
|
c) Identified employees who were granted Options during any one year, equal to or
exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the
Company at the time of grant: Nil |
| K |
Diluted Earnings per Share (EPS) pursuant to issue of Ordinary Shares on Exercise
of Options calculated in accordance with Accounting Standard (AS) 20 ‘Earning Per
Share': Rs. (45.24) |
| L |
i) Method of calculation of employee compensation cost: Intrinsic Value |
|
ii) Difference between the employee compensation cost so computed at (i) above and
the employee compensation cost that shall have been recognized if it had used the fair
value of the Options: If the Company had used fair value of options, the calculation
of employee cost would have decreased by crores. |
iii) The impact of this difference on Profits and on EPS of the Company (on standalone
financial statements):
| Description |
|
| The effect of adopting the fair value method on the net income and earnings per share
is presented below: |
(Rs. In Crores) |
| Net Income/(Loss) as reported |
(172.45) |
| Add: Intrinsic Value Compensation Cost |
(0.22) |
| Less: Fair Value Compensation Cost (Black Scholes Model) |
(0.39) |
| Adjusted Net Income/(Loss) |
(172.28) |
| Earning per share |
Basic (Rs.) |
Diluted (Rs.) |
| As reported |
(45.24) |
(45.24) |
| As adjusted |
(45.24) |
(45.24) |
M Weighted average exercise price and weighted average
fair value of Options granted for Options whose exercise price is less than the market
price of the shares: NA |
N A description of the method and significant assumption
used during the year to estimate the fair values of Options: The fair value of each
options estimated using the Black Scholes Options Pricing Model for non-dividend paying
stock after applying the following key assumptions (weighted values for options granted
during the year) |
| i) Risk free interest rate |
NA |
| ii) Expected life |
NA |
| iii) Expected volatility |
NA |
| iv) Expected dividend |
NA |
| v) The price of the underlying shar in market at the time of option g |
Rs.s NA rant |
For and on Behalf of the Board of Directors
G R K Reddy
Chairman & Managing Director
Place: Chennai
Date: 31st May, 2015.
|