Madhucon Projects Ltd. — Annual Report 2019

May 28, 2019

RefNo.: MPL/SES/CS/2019 Date: 28.05.2019

.

To,
The BombayStock Exchange(BSE)	(NSE) ofIndiaThe National Stock Exchange
Corporate Relationship Dept.,	Limited,
lstFloor, New TradingRing	5th Floor,Exchange Plaza,
Rotunda Building,PJ Towers	Mumbai- 400 051.Bandra (East),
Dalal Street,F011, Mumbai -400 001

Dear Sir/Madam,

Sub: Outcome of Board Meeting held 01128'h May, 2019 at 03.00 PM Ref: BSE Scrip Code: 531497, NSC Scrip code: MADHUCON

Prusuant to Regulation 30 & 33 of SBBI (Listing Obligations and Disclosme Requhements) Regulations 2015 Outcome of Boa1d1Meeting held 011 28m May, 2019.

• Approved the Audited Financial Statements of the Company (Standalone and Consolidated) for the year ended 31.03.2019 along-with Auditors Repon and Standalone and Consolidated Annual Audited Financial 1esults along-with the declaration signed by 0111 Managing Director for Audit Repo1t on Consolidated with Unmodified opinion) and the Statement 01 Impact of Audit Qual it1cations on Consolidation1n Annexme I.
• AppIoved the Statement of Assets & Liabilities as at 31.03.2019111 the format specified under SEBI (LODR) Regulations, 2015 thereon.
• Noted and taken on record the Resignation of Mr. Srinivasa Rao Kamma, Whole Time Director of the Company w.e.f. 23.05.2019.
• Noted and Taken on Record the Secretarial Compliance Repon of Venkata Krishna & Associates, Company Secretaries (ACS 53083, CP 19542) for the year 2018—19.
• Noted and adopted Revised Policies of the Company.

The Meeting of the Board of Directors of the Company commenced at 3:00 PM and Concluded at 7:30 PM.

We would request you to please take on record the above and host the same on your website for viewing to the public.

Thanking You,

Yours faithfully

PRESS RELEASE

Madhucon Projects Limited during the financial year ended on 31St March, 2019 achieved a total income (standalone) of Rs. 68484.89 Lakh as against Rs. 68604.62 Lakh and an EBlTDA of Rs. 2422.15 Lakh against Rs. 12137.67 Lakh and Earning Per Share (EPS) of Rs. 2.52 against Rs. 1.78 ofthe previous year.

Madhucon Projects Ltd (MPL) is a Premier infrastructure development company and the flagship company of Madhucon Group. MPL is a well-established Construction Company and a leading Contractor in executing projects, in various sectors - Transportation (National & State Highways, Roads, Metro, Railways & Ports), Irrigation & Water Resources, Buildings & Property Development, Mining (Coal & other Minerals), Energy (Generation, Transmission & Distribution) and other Infrastructure Projects. The order Book Stood at Rs. 3275.78 Crores as at the end ofthe 31.03.2019.

For Further information about Madhucon Group, visit www.madhucon.com.

Place: Hyderabad Date: 28.05.2019

Corp. Oilice : "Madhucon House", 1129/A, Road No. 36, Jubilee Hills, Hyderabad - 500 033, Telangana, India Tel : +91-40-23556001 - 4 Fax : +91-40-23556005 E-mail : corporale@madhucon,com Regd. Oliice : H.No.i-7-70, Jubllpura. Khammam. Telangana - 507 003, lndia

wWw.m,adhucon.com"

MADHUCON PROJECTS LIMITED SANDALONE AND CONSOLIDATED BALANCE SHEET

StandaloneSParticularsAuditedN4.Audited31.03.201931.03.201831.03.2019ASSETS'1Non-current assetsProperty, Plant and Equipment(a)4,909.465,147.733,13,217.93Capital Work in Progress15,106.39——Intangible Assets-1,20,339. 13Investment Properties-61.46—Financial Assets(1))Investments[1]1,71,565.381,77,181.3853.58Trade receivables(ii)484.36525.46Loans(iii)5,133.465,131.795,298.36Others Financial Assets(iv)11,750.3916,407.9792,174.86Deferred Tax Asset(C)4,764.212,301.814,764.2 1Other non-current assets((1)19,734.5920,443.5722,947.01Sub-total Non-current assets2,18,341.842,27,139.715,73,962.93Current assets2inventories(a)	(Rs. in Lakhs)
	Consolidated
	31.03.2018
	3,27,998.91
	15,041.41
	1,27,095.01
	81.56
	53.58
	5,297.83
	2,20,752.47
	2,301.81
	23,590.51
	7,22,213.09
	'
4,281.514,493.416,288.37	10,002.53
Financial Assets(b)
Investments(i)210.30»	57.11
Trade receivables(ii)25,780.6419,618.073,666.80	3,115.38
Cash and cash equivalents(iii)1,065.811,799.323,344.58	4,398.66
above(iv)239.78258.13435.64	1,064.12
Loans(v)7,196.487,189.77168.33Others Financial Assets	164.56
(vi)7,127.257,121.771,50,362.78Current tax asset (net)	25,190.71
(0)14,070.655,922.1814,528.15Other current assets(d)	6,469.53
18,550.6017,483.3117,561.58Sub-total Current assets	16,521.65
78,312.7263,885.961,96,566.53Total Assets2,96,654.57	66,984.25
2,91,025.677,70,529.46EQUITY AND LIABILITIES	7,89,197.34
Eguitx
Equity Share capital(3)740.32740.32740.32	740.32
Other Equity(b)80,722.0878,826.86(2,12,984.36)
Less: Profit or Loss from Associates7—~	(1,77,495.81]
Sub-total Other Equity81,462.3679,567.19(2, 12,244.04)	(1,76,755.49)
Non ControllingInterest—(4,648.58)	(806.13)
Sub-totalEquity81,462.3679,567.19(2,16,892.62)	(1,77,561.62)
LIABILITIES
Non-current liabilities1
Financial Liabilities(a)
Borrowings(i)2,791.424,558.603,12,341.35Trade payablcs(ii)	4.51,636.11
8,167.388,250.998,256.36Other financial liabilities(iii)	8,318.19
6,457.718,044.18759.76Provisions(b)	1,643.69
173.83175.5612,281.87Deferred tax liabilities (Net)(c)	9,350.54
5.03—Other noncurrent liabilities(cl)	5.03
9,714.9921,946.877,459.52Sub-totalNon-current liabilities27,305.33	9,545.05
42,976.213,41,103.89Current liabilities2	4,80,498.61
Financial Liabilities(a)
Borrowings(i)65,672.5757,893.742,63,408.56
'l'rade payables(ii)48,895.9640,026.9765,705.91	1,53,350.39
Other financial liabilities(iii)13,228.1711,084.292,11,250.01
Other current liabilities(b)41,614.5948,711.5770,502.51	56,897.02
Provisions(c)4,762.924,758.21,.	1,71,974.59
Current tax liabilities (net)[(1)13,712.67211,234fli6,007.48liéflfillia'fi,	74,096.86
Sub-total Current liabilities1,237,886.881,68,482.27,46,318.\§o	23,929.96
Total Equityand Liabilities236,654.572,91,025.677,239,197.34'7 7o,529.1§_	6,011.534,86,260.35

Replies to Audit Qualification :

The company has reported the Audited financial results of standalone and consolidated as per lndian Accounting standard (Ind As) read with SEBl circular dated 05.]uly.2016. These financials were reviewed by the Audit committee in the meeting held on 28"1 May,2019 and approved by the board of directors of the company at the meeting held on 28"1 May,2019.

• 1. The above results are in compliance with lndian Accounting Standards (ind As) notified by the Ministry of Corporate Affairs, Government of lndia. The company has reported the Audited financial results of standalone and consolidated as per lndian Accounting standard (ind As) read with SEBl circular dated 05th July, 2016. These financials were reviewed by the Audit committee in the meeting held on 28'h May, 2019 and approved by the board of directors of the company at the meeting held on 28th May, 2019.
• 1. The carrying value of investments held in and unsecured loans and advances given by the company to its subsidiaries, which have been incurring losses and in some of these companies, net worth was fully or substantially eroded. Taking into account the management's internal assessment and initiatives to be implemented to improve the profitability in the medium to long run, the management of the company is of the view that carrying value of the investments and loans and advances are realizable at the value stated in the books.
• 1. in relation to Madhucon Mega Mall Private Limited (MMMPL) a subsidiary of the company incorporated for developing shopping mall cum multiplex on leased land taken from Andhra Pradesh Housing Board (now known as Telangana Housing Board) ("the Board") at Kukatpally in Hyderabad. The Board issued letter for revoking the power of attorney and resumption of land. The Company got a status quo order from court and the case is pending in that court. Taking in to account the constitution of and recommendation made by cabinet sub-committee of Telangana Government, management internal assessment and legal opinion obtained, Company management is confident in succeeding the case and carrying values of investments in and loans to MMMPL are realizable at the values stated in the books of accounts. Financials of MMMPL are prepared on going concern basis.
  • 1. The outstanding loans and advances which were granted to Nama Investments Limited and NNR infra investments Private Limited in which the company's directors have interest are realizable at the carrying values in the books of accounts though both these companies have been incurring losses and accumulated losses exceeded the net worth of these companies for the reasons stated. According to the books of accounts, the closing balance as at March 31, 2019 with respect to Nama

.«1 -'«._z 921' V} investments Limited and NNR investments Limited are 95.418996 Lakhs and Rs.512.19 Lakhs respectively which are recoverable.

.. ,.

• The company has put up one time settlement with the working capital banks and is working for suitable modification Therefore the company has not provided the interest on loans amounting to Rs. 73.64 crores. The company reversed the interest provided earlier in first two quarters of the year and has not provided the interest for the balance two quarters of the year, subject to approval of the shareholders in their general meeting.
• 1. Confirmation of balances could not be obtained as at March 31, 2019 for various trade payables, advances, though the management has requested for the confirmation of balances. Management believes that no material adjustments would be required in books of account upon receipt ofthese confirmations.
• 1. Simhapuri Energy Limited which is step down subsidiary of the company has defaulted in repayment of dues to banks and financial institutions and the loans were classified as NPA. The Power Purchase Agreement entered into with the Discoms for a 12 year period could not be implemented due to the regulatory approvals pending since 17-18, leading to almost NlL Turnovers / No Profitability/ almost NIL Cash Flows, which consequently led to defaults in the Debt Obligations to the lenders. Company has proposed a One Time Settlement offer and also a Re-Structuring Package offer, which is in the stage of refinement. As the unpaid interest of Rs. 398.22 crores is requested to be waived off due to unsustainability, management has decided not'to provide for the same in the current year 2018.19.
• 1. Rajauli Bakhtiyarpur Project of the company has been foreclosed with mutual consent, cost incurred on the project up-to 31.03.2019 Rs. 815.40 lakhs instead of writing—off, has been accounted as claims receivable under the head "other Current Assets. The company intends to propose a claim for recovery of expenses spent.
• 1. "Barasat-Krishnagar Expressways LimitedlBKEL), a subsidiary company entered into an agreement with NHAI, for developing road project in West Bengal State. The. Construction work is delayed due to pending approvals and rights of way to be provided by NHAl. BKEL had issued notice for termination of the projects to NHAI on 31$t December, 2015. BKEL and NHAI entered into a Supplementary Agreement to the 'Concession Agreement dated 20th June, 2011' on 2nd May, 2016 for inclusion of the clause of 'Society for Affordable Redressal of Disputes' (SAROD) Committee for arbitration. NHAI Had also issued notice for termination of the project vide its letter dated 3rd May, 2016 and BKEL had replied that the notice is not valid. Both BKEL and NHAI appointed/arbitrato' \The arbitration proceedings

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are in progress". As the borrowings from secured lenders have been declared as Non-performing asset by the lender, interest on related borrowings have not been accounted for.

1. Vijayawada—Machilipatnam Expressways Limited (VMEL), which is a subsidiary to the Company, was incorporated under the Companies Act, 1956, on 28th Day of November, 2011 as a Special Purpose Vehicle for undertaking the work of Four Laning of Vijayawada—Machilipatnam Section of NH—9 from Km.0.000 to Km.63.800 in the State of Andhra Pradesh on Design, Build, Finance, Operate, Maintain and Transfer «DBFOT (Toll) Basis, under NHDP Phase ill . This project was awarded by National Highway Authority of india (NHAI). The Company was to hand over the Project Highway to NHAl on the expiry of the concession period of 20 years.

As per the Agreement, NHAI failed to hand over 80% land within six months of the Agreement. They have failed to do so, because of which company filed claims. Reacting to that NHAI terminated the Concession Agreement on 29.10.2013 though NHAi failed to issue ROW and further confirmed vide its letter dated 27th August,2014. Company has filed a claim with NHAI and company has got arbitration award. The company filed execution petition and simultaneously NHAI also filed an appeal against award passed by arbitration tribunal. In view of the above going concern assumption is not appropriate and therefore financial statements have been done accordingly.

• 1. Madurai Tuticorin Expressways limited and Trichy Thanjavur Expressways Limited which are subsidiaries of the company have taken loans from different financial institutions and those loans became NPA's. Interest on such loans have not been recognized for part of the year on both long term and short term portions since the company is in the process of finding investor for the project.
• 1. TN (DK) Expressways limited Expressways Limited which is subsidiary of the company have taken loans from different financial institutions and those loans became NPA's. Interest on such loans have not been recognized for part of the year on both long term and short term portions since the company has proposed OTS which is in the consideration.
• 1. Ranchi Expressways Limited was incorporated under the Companies Act, 1956, on 29th Day of March, 2011 as a Special Purpose Vehicle for Design, Build, Finance, Operate and Transfer (DBFOT) of Four Laning of Ranchi-Rargaon-Jamshedpur Section of NH-33 from Km. 114.000 to Km. 277500 in the state of Jharkhand on DBFOT (Annuity) basis for a concession period of 15 years. This contract was awarded by National Highway Authority of indie. The Company shall hand over the Project Highway to NHAI on expiry of the Concession Period. The company has achieved physical progress of 50.24% and approached NHAI for nipg stretch. NHAI has \

323' £3 {'i- {3 initially sanctioned an amount of R5223 Crs as One Time Fund infusion and subsequently NHAi has gone back by cancelling the already sanction OTFl amount of R5223 Crs. Lenders and the company have preferred One Time Settlement (OTS) with NHAI for the works already completed.

While negotiations are going on for OTS proposal, NHAI has terminated the Concession Agreement on 30/01/2019 without following the termination procedure laid down in the Concession Agreement and called for tenders from public to complete the balance work on EPC basis. Since project got terminated, Lenders are seeking for One Time Settlement. Company and Lenders agreed and requested the NHAI to refer the matter to Conciliation Committee of independent Engineers.The NHAI had given the consent vide it's letter dated 18-04-2019. The company has submitted the claim with NHAI. The proceedings will commence soon."

in view of the above going concern assumption is not appropriate and therefore financial statements have been drawn accordingly.

1. The figures of the previous year have been rearranged/ regrouped wherever necessary.

\ For and on behalf of the Board of Directors of Madhucon Projects Ltd.

'\ N'. Managing Director lr- . '» .'-, latte '

Date : 28.5.2019

Hyderabad

DIN: 00784491

MADHUCON PROJECIS llMITED

CIN-L742IOIGI'79OPLC01 1114

Regd. Oiilce21-7-70. Jubilpuro. Khummom - 507003, Teiongana

WIEMENI 0F STANDALONE AUDIIED FINANCIAL RESUL1S FOR THE QUARIER YEAR ENDED AND YEAR MARCH ENDED MARCH 31, 2019 AND CONSOLIDA1ED AUD|1ED FINANCIAL RESULTS fOR THE 31, 2019 (115,111 lakhs) S1andaione SI. Consollddled Quarter ended Year ended Year ended N ° Panlculars 31,03,2019 31.12.2018 31.03.2015 31.03.2019 31.03.2010 51.03.2019 31.03.2018 Audiied UnaudIIed AudIIed Audlied Audlied AudIIed Audiled 1 Income 110m Operalions: (a) Net SQJeS/ Income from Operufions 18,963.66 17,066.99 22,025.17 66,944.33 66,393.34 94,244.01 103,546.55 (b) Other income 189.77 707.21 1,722.02 1,540.56 2,211.28 4,074.00 4,820.25 10m] (ncome 19,153.43 17,774.20 23,747.19 68,484.89 68,604.62 98,318.01 108,366.80 2 Expenses: (0) Cost h n of Material; Consumed 18,538.60 16,516.08 16,445.65 58,666.41 47,401.29 71.345.13 71,154.82 i I f ',W ' » (b) C 0 yes in nven cry 0 finished goods ork In . 224.03 (33140] 3,489.78 [3,753.17) Progress and siock—m-Irode (c, Employee benefits expense 758.90 590.41 880.97 3,000.88 4,457.49 4,519,33 4,505.99 (0" other expenses 2,319.46 357.73 3,774.62 4,395.45 4,945.57 9.153.31 29,087.26 (e) Financial C0515 (4,193.16) 736.06 3,199,80 2,252.53 9,313.06 27,904.87 83,477,19 (f) Depreciation and umomwmn expense 200.92 190.13 (67.27) 771.31 1,744.13 22.42008 24.876.77 10101 Expenses 3 17,624.72 18,490.41 24,457.79 69,086.58 67,524.14 1,558,832.50 109,348.86 Prom/(Loss) Beiore Excepilonai Ilems (1-2) 1,528.71 (716.21) (710,60) (601.69) 1,080.48 (40,514.49) (100,982.06) 4 Exceptional Items - ~ 5 min/(Loss) Belore 10x (3-4) 1,528.71 (716.21) (710.60) (601.69) 1,080,48 (40,514.49) (100,982.06) 6 Tax Expense O) Curreni Tux - ~ 1,535.01 - 2,200.55 (1,937.22) b) Deferred Tux 10101 Tax (1,660.72) (312.53) (2,431.46) [2,462,401 (2,431.46) (2,462.40) (2,431.46) (0913) (1,660.72) (312.53) (896.45) (2,462.40) (230.91) (2,462.40) (4,368.68) 7 N61 Prom/(Loss) A1161 10X (5-6) 3,189.43 (403.68) 185.85 1,860.71 1,311.39 Shore of Profit (38,052.09) (96,613.38) /(Loss] Ironsierred 10 Non Coniroillng In1eres1 (3,663.03) (10,029.72) ProIII/(Loss) 011e11c1x alter Non Conirolling Inieresi 3,189.43 (403.68) 185.85 1,860.71 1,311.39 (34,389.06) (86,583.66) Shore of Profit/(Loss) from Associoied Companies "ML/(L055) o11er10>4 ("'6' 5mm 0' Mmomy 'me'es' 3' 3,139.43 (403.68) 185.85 1.86071 1.31139 134,309.04) (86,583.66) Assocloied Compomes 8 Olher Comprehenslve Income 34.45 28.19 34.45 28.19 107.91 406.51 Shore of Oiher Comprehensive Income transferred to 13.05 5479 Non Conirolirng inieres1 9 101111 Comprehensive Income 3,223.88 (408.68) 214.04 1,895.16 1,339.58 (34,294,21) (86,231.94) 1 ~ - _ 0 gal") equ'w Shore cop'm' (Face VO'Ue 01"" H 737.95 737.95 737.95 737.95 737.95 737.95 737.95 Oiher Equity . ~ , 78826.86 (212,984,361 11.77.495.811 12 (I) Earning per share 01 Re.1/- each (noi annuallsed) (a) Basic [in Rs.) 4.32 10,551 0.25 2.52 1,73 (46.60) (117.33] (b) DiluIed (in RS.) 4,32 (0.55) 0.25 2.52 1.78 [46.60) See (117.33) accompanying noies Io Ihe financial results

DECLARATION PURSUANT TO REGULATION 52(3) OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2013

We, Madhucon Projects Limited, a Company within the provisions of the Companies Act, 2013, do hereby state and declare that the Auditors Report on the Consolidated Financial Statements for the year ended March 31, 2019 is with an unmodified opinion.

Date : 28/05/2019 Place : Hyderabad For Madhucon Projects Limited, _

DIN~00784491

Corp. Ollice : 'Madhucon House', 1129M, Road Not 36, Jubilee Hills, Hyderabad - 500 033, Telangana, India Tel : +91-40-23556001 - 4 Fax : +91-40-23556005 E-mail : corporale@madhucon.com Regd. Olfice : H.No.l-7-70, Jublipura. Khammam. Telangana - 507 003, India