I N D E X. 1. Board of Directors Notice of AGM Chairman s Speech Board s Report Independent Auditor s Report...

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3 I N D E X 1. Board of Directors Notice of AGM Chairman s Speech Board s Report Independent Auditor s Report Comments of the Comptroller and Auditor General of India Balance Sheet as at 31st March, Statement of Profit and Loss for the year ended 31st March, Cash Flow Statement for the year ended 31st March, Notes to the Financial Statements

4 BOARD OF DIRECTORS Shri Durga Shanker Mishra Shri Pradeep Singh Kharola Chairman, BMRCL & Secretary - Ministry of Housing & Urban Affairs, Government of India Managing Director, BMRCL Shri M. K. Sinha Director, BMRCL & OSD (UT) and Ex-Officio Joint Secretary - Ministry of Housing & Urban Affairs, Government of India Shri H. S. Anand Shri K. K. Aggarwal Dr. M. Ravi Kanth Shri Mahendra Jain Shri I.S.N. Prasad Shri L. K. Atheeq Dr. Ekroop Caur Shri Vijay Kumar Dhir Shri N. M. Dhoke Director, BMRCL & Director (Rolling Stock), Delhi Metro Rail Coporation Ltd. Director, BMRCL & Executive Director-Works (Planning), Railway Board, Ministry of Railways, Government of India Director, BMRCL & Chairman & Managing Director, Housing & Urban Development Corporation Ltd. (HUDCO) Director, BMRCL & Additional Chief Secretary to Govt., Urban Development Department, Government of Karnataka Director, BMRCL & Additional Chief Secretary to Govt., Finance Department, Government of Karnataka Director, BMRCL & Principal Secretary to Hon ble Chief Minister, Government of Karnataka Director, BMRCL & Managing Director, Bangalore Metropolitan Transport Corporation (BMTC) Director (Project & Planning), BMRCL Director (Rolling Stock, Electrical, Signalling & Telecommunication), BMRCL COMPANY SECRETARY Shri U. Jagadish Nayak CHIEF FINANCIAL OFFICER Shri S. Vasudevan STATUTORY AUDITORS SECRETARIAL AUDITOR M/s. Manohar Chowdhry & Associates M/s. S. Kedarnath & Associates # 71, 2 nd Floor, 8 th Main, Corporate Law Advisors & Company Secretaries 2 nd Block, Jayanagar, # 004, Ojus Apartments, Bengaluru th Main Road, Malleswaram, Bengaluru BANKERS 1. Bank of India 2. State Bank of India 3. IDBI Bank 4. ICICI Bank 5. Axis Bank REGISTERED OFFICE BANGALORE METRO RAIL CORPORATION LIMITED 3 rd Floor, B.M.T.C. Complex, K. H. Road, Shanthinagar, Bengaluru

5 NOTICE NOTICE IS HEREBY GIVEN THAT the 11 th Annual General Meeting of the Members of Bangalore Metro Rail Corporation Limited will be held on Thursday, 28 th September, 2017 at Noon at the Conference Hall of Ministry of Housing and Urban Affairs (Room No. 123, C Wing) Nirman Bhawan, Maulana Azad Road, New Delhi to transact the following business: ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Financial Statements of the Company for the Financial year ended March 31, 2017 and the Reports of the Board of Directors, Statutory Auditors and Comments of the Comptroller and Auditor General of India thereon and pass the following resolution as an Ordinary Resolution: RESOLVED THAT the Audited financial Statement of the Company for the financial year ended March 31, 2017 and the reports of the Board of Directors and Statutory Auditors and Comments of the Comptroller and Auditor General of India thereon, laid before this meeting, be and are hereby received, considered and adopted. 2. To fix remuneration of the Statutory Auditors appointed by the C&AG of India for the Financial Year and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: SPECIAL BUSINESS RESOLVED THAT pursuant to Section 142 (1) of the Companies Act, 2013, the Board of Directors of the Company be and are hereby authorized to fix the remuneration and out of pocket expenses, statutory taxes and other ancillary expenses of the Independent Statutory Auditors appointed by the Comptroller and Auditor General of India for the Financial Year in terms of Section 139 (5) of the Companies Act, 2013 as amended 3. To approve increase in the borrowing limit of the Company beyond the aggregate of its paidup share capital & free reserves and for this purpose to consider and if thought fit, to pass with or without modification, the following resolution, as a Special Resolution: RESOLVED THAT pursuant to the provisions of Section 180(1) (c) and any other applicable provisions of the Companies Act, 2013, as amended from time to time, the Company hereby accords its consent to the Board 5

6 of Directors to borrow from time to time all such sum or sums of monies as it may deem requisite or proper for the purpose of the business of the Company not withstanding that such monies to be borrowed together with the outstanding monies already borrowed by the Company (apart from temporary loans obtained from the Company s bankers in the ordinary course of business) exceed for the time being the aggregate of its Paidup share capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided that the total amount upto which monies may be borrowed by the Board of Directors (apart from temporary loan obtained from the company s bankers in the ordinary course of business) shall not exceed the sum of Rs.22,000 Crore (Rupees Twenty Two Thousand Crore only). RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to take all steps necessary to implement and give effect to this resolution. By Order of the Board For Bangalore Metro Rail Corporation Limited Place : Bengaluru Date : Registered Office: 3 rd Floor, B.M.T.C Complex, Shanthinagar, K.H.Road, Bangalore CIN: U16286KA1994GOI Tel: / Fax: bmrcl@dataone.in, Web: Sd/- (U. Jagadish Nayak) Company Secretary 6

7 NOTES : 1. A member entitled to attend and vote at this Annual General Meeting is entitled to appoint a proxy to attend and vote on a poll instead of himself and the proxy need not be a member of the Company. The instrument appointing the proxy should, however be deposited at the Registered Office of the Company not less than 48 hours before the commencement of the Meeting. 2. A Statement of Material Facts in the form of an Explanatory Statement, as required under Section 102 (1) of the Companies Act, 2013 in respect of item No. 3 of the Notice is annexed hereto. To : 1. All Members of BMRCL 2. Directors of BMRCL 3. StatutoryAuditors 4. Secretarial Auditors 5. Debenture Trustee 7

8 STATEMENT PURSUANT TO SECTION 102 (1) OF THE COMPANIES ACT, 2013 SETTING OUT THE MATERIAL FACTS RELATING TO THE SPECIAL BUSINESS AS CONTAINED IN THE ACCOMPANYING NOTICE Item No.3 : 1. Bangalore Metro Rail Corporation Limited (BMRCL) is a 50:50 Joint Venture of the Government of India (GoI) and the Government of Karnataka (GoK). The Revised Project of Phase-1 is Rs.13, Crore and the Phase-1 project is completed and the commercial operations have been started from June 18, The approved Project cost for Phase-2 of BMRC Project is estimated at Rs.26, Crore. As per the approved funding pattern Rs Crore is to be received as subordinate debt from Government of India and Government of Karnataka, whereas Rs.12, Crore will have to be raised by way of senior term debt. The Phase-2 of the project is being implemented and various funding agreements are under way. It is therefore necessary to consider and approve additional borrowing for Phase-2 of the project during the current Financial Year on account of interest free Subordinate Debt (Rs.1,050 Crore) and Senior Term Debt (Rs.1,940 Crore) from multi-lateral lending agencies. 2. The Board of Directors of the Company has authorized the Managing Director of the Company to borrow in the form of sovereign loans from the multi-lateral/foreign funding agencies viz., JICA and AFD, apart from domestic borrowings from HUDCO, Banks and Bonds issue, for Phase-1 upto an amount of Rs Crore. Further, the Board has also authorized the Managing Director to borrow for Phase 2 of the Project from various mutli-lateral/foreign lending agencies for an aggregate amount of borrowing, including those in pipeline will be Rs.26,857 Crore for both Phase-1 & Phase-2. Besides the above, Government of India and Government of Karnataka have also approved Phase-2A of the project for implementation by the Company involving a Project cost of Rs.4202 Crore, out of which, the Company will have to raise Rs.2200 Crore (maximum) by way of borrowing for implementation of this Project. 3. The Paid up share capital of the Company as on 31 st March 2017 stood at Rs Crore whereas the free Reserves & Surplus stood at minus Rs Crore, mainly on account of accumulated depreciation. Thus the Net Worth of the Company as on that date stood at Rs Crore. The amounts borrowed by the Company as on 31 st March 2017 was Rs.11, Crore covering Phase-1 (Rs Crore) and Phase-2 (Rs Crore). 4. The Shareholders of the Company, at the Extraordinary General Meeting held on had consented for increase in the borrowing limits by enhancing the aggregate borrowing limit to Rs.13,200 Crore for Phase-1 & Phase-2, beyond the Paid-up Share Capital and Free Reserves. Therefore, approval of the shareholders is required to borrow in excess of the paid up share capital of the Company plus the free reserves for the enhanced borrowing limit from Rs.13,200 Crore to Rs.22,000 Crore for Phase-1 and Phase-2 of the project during the financial year , but not exceeding Rs.22,000 Crore in the aggregate. 8

9 5. In view of the above reasons, the Board of Directors of the Company at their 84 th Meeting held on , have recommended for increasing the borrowing limit of the Company beyond the aggregate amount of its Paid up Share Capital and Free Reserves i.e. from the existing limit of Rs.13,200 Crore to Rs.22,000 Crore, covering the already borrowed amounts of Rs.11,674 Crore and for the proposed borrowings for Phase 2 viz., Sovereign loans of Rs.7,600 Crore and the anticipated subordinate Debt from Government of India and Government of Karnataka amounting to Rs.4000 Crore approx. during the current financial year. 6. In view of the provisions of Section 180(1) (c) of the Companies Act, 2013 which requires obtaining of consent of shareholders by way of special resolution for increase in the borrowing limits, the Board of Directors of the Company have recommended the resolution as set out at item No. 3 of the Notice to be passed by way of special resolution to enable the Board of Directors of the Company to borrow further loans for the BMRC Project (Phase-1 and Phase-2). 7. None of the Directors, Key Managerial Personnel, their Relatives are either directly or indirectly concerned or interested financially or otherwise in the said resolution. Place : Bengaluru Date : By Order of the Board For Bangalore Metro Rail Corporation Ltd Sd/- (U. Jagadish Nayak) Company Secretary 9

10 CHAIRMAN S SPEECH Dear Shareholders, It is my proud privilege to welcome you all to the 11 th Annual General Meeting of your Company. The Audited Financial Statements, the Reports of the Board of Directors and Statutory Auditors, along with the Comments of the Comptroller and Auditor General of India, as well as the Notice to the shareholders have already been circulated and with your permission, I take them as read. It is heartening to note that the C&AG of India have once again issued NIL comments certificate on the Audited Financial Statements of the Company for the year ended March 31, As you are aware, Namma Metro commenced its maiden operations on the Reach-1 (Purple Line) from Baiyappanahalli to M.G. Road of the East-West Corridor on 20 th October, Thereafter, the Reach 3 and 3A, (Green Line) from Mantri Square Sampige Road to Peenya Industry of the North-South Corridor was commissioned on 1 st March 2014 followed by Reach 3B section i.e. from Peenya Industry to Nagasandra, commissioned on 1 st May 2015, followed by the commissioning of the Reach-2 section i.e. the elevated line from Magadi Road to Mysore Road terminal on 18 th November 2015 and thereafter of the first Underground section of this Corridor from M. G. Road to Magadi Road on 30 th April Your Company is proud to report with immense satisfaction about the completion and commissioning of the remaining portion of the underground stretch and the elevated portions of the Green Line from Mantri Square sampige Road station to Yelachenahalli Station covering kms on 18 th June 2017 after obtaining safety clearance from the Commissioner of Metro Rail Safety. With the opening of the entire green line for commercial operations, the Bangalore Metro Rail project team has placed before the people of Bengaluru a world class Metro Rail Service extending to Kms thereby benefiting the commuting public of Bangalore. The entire Phase-1 of the BMRC network was inaugurated by the Hon ble President of India Shri Pranab Mukherjee, on 17 th June, 2017 by dedicating the same to the nation, in the august presence of Shri Vajubhai Rudabhai Vala, Governor of Karnataka and Shri Siddaramaiah, Chief Minister of Karnataka along with Shri M.Venkaiah Naidu, the then Union Minister for Urban Development, Housing & Urban Poverty Alleviation & Parliamentary Affairs, Government of India and a host of other Dignitaries and the response from the press and the general public has been very positive. With the opening of the entire Phase-1 for commercial operations, Namma Metro has not only increased its footfall, but has also been able to reduce the vehicular congestion, besides reduction of pollution levels which in turn has benefited the commuting public. The average daily ridership in the Purple line and Green Line has shown aquantum jump after the opening of the entire Phase-1 of BMRC Project. Every day about 3.30 to 3.60 lakhs passengers are commuting on the network. The ridership would substantially improve the Fare Box Revenue during the current financial year and help achieve operational break-even. In fact the Fare Box Revenue for the first five months of the current Financial Year upto end July 2017 has already touched about Rs Crore when compared with the Revenues of Rs.110 Crore achieved during the entire previous year. 10

11 Your Company has collaborated with the Bangalore Metropolitan Transport Corporation (BMTC) for providing last mile connectivity to the Metro Rail commuters to reach the nearest metro station. BMTC is operating Feeder route service in major metro stations and where there is high density requirement by commercial / IT sector, the number of bus services has been increased. Even the Non-Fare Box revenue from property development, advertisement, royalty etc. is likely to show substantial growth during the current year, thereby contributing to the overall revenue growth of the Company in the Financial Year Your Company is proceeding with the implementation of Phase-2 of the Bangalore Metro Rail Project which envisages extension of the existing two corridors viz., East West and North South Corridors. The East-West Corridor, as part of Phase-2, is being extended on both the sides. On the Eastern side, this corridor would go upto Kengeri while on the Western side this corridor would touch Whitefield. Similarly the North-South Corridor is also being extended. At the Northern end, it will reach Bangalore International Exhibition Centre (BIEC) and in the Southern side it would reach the Anjanapura Township. In addition, two new lines would also be part of Phase-2. One of these would run from R.V.Road Station to Bommasandra and the other line from IIM-B Gottigere to Nagawara. These two lines would traverse through some of the densest areas of Bengaluru City. The Phase-1 (42.3 Kms.) and Phase-2 (72.09 Kms.) will together create a Metro Network of Kms. with 101 Stations (80 Elevated, 2 at grade and 19 Underground). Upon completion of Phase-2 of the Project, there will be considerable reduction in traffic congestion which will bring in its wake, fast, comfortable, safe and affordable public transportation system for the Bengalureans. This will in turn contribute to the further development and prosperity of the city of Bengaluru. While the Government of India and Government of Karnataka will be bringing in 55% of the funds required for the Phase-2 project, the balance funding will be from multilateral and bilateral lending agencies and borrowings from domestic financial institutions and from the capital markets. Your Company has approached foreign lending agencies like AfD, EIB and AIIB for funding the share of Senior Term Debt for Phase-2 which will be drawn based on the requirement of funds. Your Company has initiated land acquisition process for the above extensions and new lines under the provisions of Karnataka Industrial Areas Development Act, The cost of land acquisition and rehabilitation is to be entirely borne by the Government of Karnataka and the entire land acquisition process is likely to be completed by March, 2018 except certain portions of the Underground section of the new line. Most of the civil contracts for phase-2 have already been awarded and the balance contracts for the new lines are in the process of tendering. In order to accommodate the increased number of passengers in the trains, the existing 3 car trains will be converted into 6 car trains, for which the Company has awarded the tender to BEML, and the deliveries of these converted 6 car trains are expected to commence by December, Your Company has initiated the process of setting up of a separate Metro line on Outer Ring Road (ORR) from Central Silk Board Junction to K.R.Puram having a length of 17 kms at an estimated cost of Rs.4202 Crore, which will be partly financed through Innovative Financing Techniques.The Detailed Project Report (DPR) for this new line was submitted to the Government of Karnataka and approval has been received during March,

12 Your Company is also in the process of finalising the Detailed Project Report (DPR) for the Airport line by the in house team in the BMRCL after receiving clearance from the Government of Karnataka. This new line will be implemented as Phase 2B of BMRC Project and will pass through Thanisandra Road, Jakkur and Yelahanka. I would like to take this opportunity to thank the various departments of the Government of India and Government of Karnataka, my colleagues on the Board, and the various stake holders for their unstinted support to the BMRC Project despite the difficulties & inconveniences encountered by them in the implementation of the Project. Above all, I would like to thank the citizens of Bengaluru for their unstinted support and I seek their whole hearted cooperation and patronage in future also. Lastly, I would like to congratulate the Bangalore Metro Rail Corporation team for their unwavering dedication, team spirit and steadfast commitment to the cause of creating world class Metro Rail facility for the City of Bengaluru. (DURGA SHANKER MISHRA) CHAIRMAN (This does not purport to be the proceedings of the 11 th Annual General Meeting of the Company) 12

13 BOARD S REPORT To the Members, Your Directors have pleasure in presenting before you the 11 th Annual Report of the Company together with the Audited Financial statements, Auditor s Report and Comments of the Comptroller and Auditor General of India thereon for the financial year ended 31 st March, Summarised Financial Highlights 13 (Rs. In Lakhs) Particulars Gross Income 14, , Profit/(Loss) Before Interest and Depreciation (2,720.17) (5,876.29) Finance Charges 6, , Gross Profit/(Loss) (9,335.47) (9,694.92) Provision for Depreciation 36, , Net Profit/(Loss) before Tax (45,756.51) (34,154.41) Provision for Tax Net Profit/(Loss) after Tax (45,756.51) (34,154.41) Dividend As the project was under implementation stage, no operational profit was generated during the year under review, for recommendation of dividend for the financial year Share Capital The Authorised Share Capital of the Company is Rs.12,000 Crore. The issued, subscribed and Paid-up Equity Share Capital of the Company as on March 31, 2017 stood at Rs Crore, with an amount of Rs Crore shown as share application money from Government of India pending allotment upon receipt of matching equity contribution from Government of Karnataka, the co-promoter. Status of Implementation of Phase-1 The Phase-1 of Bangalore Metro Rail Project consists of two corridors viz., East-West and North- South, totaling to Kms. The East-West corridor (Purple Line) is kms long consisting of seventeen (17) stations including five (5) underground stations, starting from Baiyappanahalli station in the East to Mysore Road station in the west, which is operational since April 30, 2016.The North-South Corridor (Green Line) is kms long consisting of Twenty Four (24) stations including three (3) underground stations starting from Nagasandra station in the north to Yelechenahalli station in the south, is now fully operational with the commissioning of this line from Mantri Square Sampige Road station to Yelachenahalli metro Station and the entire Phase-1 of the BMRC project is now fully operational.

14 Commencement of Commercial Operations of Reach-4, 4A & Under Ground-1 Your Company is proud to report the major achievement in the completion and commissioning of the underground stretch and part of the elevated portions of the Green Line from Mantri Square Sampige Road Station to Yelachenahalli Station covering kms consisting of ten (10) stations on 18 th June 2017 after obtaining safety clearance from the Commissioner of Metro Rail Safety. With the opening of the entire green line for commercial operations, the Bangalore Metro Rail project team has placed before the people of Bengaluru a world class Metro Rail Service. As the entire East-West corridor (Purple Line) from Baiyappanahalli Metro Station to Mysore Road Metro Station is opened to commuters and with the opening of the North-South corridor (Green Line) from Nagasandra to Yelachenahalli Station, a large population along this stretch will also be benefited from this quick, safe and comfortable alternative mode of public transport. The Reach- 4 & 4A sections and the Underground-1 section was inaugurated by Hon ble President of India by dedicating the entire Phase 1 Network of BMRC Project to the nation, in the august presence of Hon ble Governor of Karnataka, Hon ble Chief Minister of Karnataka and Hon ble Minister for Urban Development, Housing & Urban Poverty Alleviation, Information & Broadcasting, Government of India and a host of other Dignitaries and the response from the press and the general public has been very positive. Financial progress as of March 31, 2017 Phase-1 As at the end of March 31, 2017, the Financial Progress was of the order of 98.28% (Rs.14, Crore out of Rs.14, Crore) and the details are as follows: Cumulative Financial Progress upto for Phase-1 (Rs. In Crore) Releases Government Government Financial Total of Karnataka of India Institutions Equity Subordinate Debt JICA (PTA through GoI) AfD (PTA through GoI) HUDCO Loan KUIDFC Loan Namma Metro Bonds Reimbursement of State Taxes & Duties Others Phase-2 Funds Total Releases Total Expenditure Total Expenditure as a percentage of Total Releases 100% 14

15 Financial Progress for the year for Phase-1 (Rs. In Crore) Releases Government Government Financial Total during of Karnataka of India Institutions Equity Subordinate Debt JICA (PTA through GoI) Reimbursement of State Taxes & Duties Others Total Releases Total Expenditure Percentage of Expenditure of Total Releases Financial Closure for Phase-1 The Revised Project cost of Phase-1 is Rs.13, Crore has been approved by Government of India and Government of Karnataka (excluding the reimbursement of state Taxes & Duties). Out of this, an amount of Rs Crore was to be funded from contributions by both the Project Promoters viz., Government of India and Government of Karnataka from out of equity contribution and by way of subordinate Debt. In addition, an amount of Rs Crore was to be raised as senior term debt from both multi-lateral/foreign funding agencies apart from Banks/ Financial Institutions. Your Company has raised an amount of Rs Crore as on July 1, 2017 as senior term debt out of the approved amount of Rs Crore. Thus, there is space for borrowing upto Rs Crore under senior term Debt, for Phase-1 of BMRC Project. As against the anticipated loan proceeds of Rs Crore, the Government of India has restricted the JICA Loan amount to Rs Crore based on exchange rates prevailed on the dates of the sanctioned Loan. This restriction applied by GoI in the release of PTA has created a gap of Rs Crore in debt funding, which need to be met either from out of commercial borrowings or through another series of Namma Metro Bonds issue.the Government of India and Government of Karnataka have released their entire share of equity for Phase-1 of the BMRC Project and during the year the Government of India has released Rs Crore towards PTA (JICA) for Phase-1 of BMRC Project. Namma Metro Bonds-Series-I The Company had issued Namma Metro Bonds Series-I in the form of 10 year Secured, Redeemable, Non-Convertible, Non-Cumulative, Taxable Debentures on private placement basis, with an issue size of Rs.50 Crore and a green shoe option of Rs.250 Crore aggregating to Rs.300 Crore. Both the rating agencies viz., India Ratings & Research Ltd (Fitch Group) and Brickwork Ratings India Private Limited have re-affirmed AA rating. The Company has serviced the Semi-annual Interest payments due in respect of these Bonds during the financial year under review in a timely manner and rating agencies have retained the same rating for this issue. 15

16 OPERATIONAL HIGHLIGHTS OF PHASE-1 FOR THE YEAR Commercial Operations of Reach-1, 2, UG-2 and Reach 3, 3A, 3B The Reach-1 section of 6.7 km from Baiyappanahalli to Mahatma Gandhi Road was commissioned in October 2011 and Reach-2 section from Magadi Road to Mysore Road 6.5 kms was commissioned in November Reach 3/3A/3B section of 12.5 km from Mantri Square Sampige Road to Nagasandra was commissioned in March-2014 (Reach-3B from May 1, 2015). The Under Ground Section (UG-2) section of 4.7 Kms from Cubbon Park to City Railway Station which started commercial operations from April 30, 2016 has been successfully running without any major hitch and the response from the commuting Public has been positive. The highlights of the operations during are as follows: For the East West Corridor (Line-1) The average per day ridership was 1,11,015 (R1+R2+UG2)- Line-1, which increased by % when compared with the average ridership of 18,739 in the year The maximum and the minimum being 1,59,997 and 1,450 respectively on Line-1. For the North South Corridor (Line-2) The average per day ridership was 37,547, which increased by 37.45% when compared with average Ridership of 27,316 in the year The maximum and the minimum being 67,706 and 631 respectively on Reach 3/3A/3B. For the East West Corridor The average per day revenue was Rs lakhs, which increased by % when compared with average per day revenue of Rs.2.61 lakhs in the FY The maximum and the minimum being Rs lakhs and Rs.0.30 lakhs respectively on Line-1. For the North South Corridor The average per day revenue was Rs.7.06 lakhs, which increased by % when compared with average per day revenue of Rs.5.14 lakhs in the FY The maximum and the minimum being Rs lakhs and Rs.0.12 lakh respectively on Reach 3/3A/3B. To facilitate Bangaloreans to witness IPL T-20 Cricket Matches, Marathon RUN, New Year eve, Charismas Eve, Foot Ball Match etc., the Metro Train Services was extended in Line-1 and in Reach 3/3A/3B during IPL T-20 Cricket matches and Sri Krishna Janmashtami. Mock Drills were held during the year at various locations. Extension of services 16

17 Date Occasion Upto Line IPL T20 Cricket Match Upto 01:00 hrs LINE IPL T20 Cricket Match Upto 01:00 hrs LINE IPL T20 Cricket Match Upto 00:30 hrs LINE 1 & LINE IPL T20 Cricket Match Upto 01:00 hrs LINE 1 & LINE Marathon RUN From 05:00 Hrs LINE IPL T20 Cricket Match Upto 00:30 hrs LINE 1 & LINE IPL T20 Cricket Match Upto 00:30 hrs LINE 1 & LINE IPL T20 Cricket Match Upto 00:30 hrs LINE 1 & LINE BMTC Strike on Upto 23:00 hrs LINE Shri Krishna Janmashtami Upto 00:30 hrs LINE Christmas eve Upto 01:00 hrs LINE 1 & LINE New Year eve Upto 02:00 hrs LINE 1 & LINE Football Match Upto 22:30 hrs LINE Football Match Upto 22:30 hrs LINE Football Match Upto 22:30 hrs LINE Football Match Upto 22:30 hrs LINE Football Match Upto 22:30 hrs LINE 1 Summary of Financial Performance of O&M Division ( ) is as follows : (Rs. In Crores) Particulars LINE 1 LINE 2 Total 1) Revenue a. Fare box b. Non-Fare box Total ) Expenditure ) Cash Profit/(Loss) (-)10.13 (-)31.53 (-) Percentage contribution of type of tickets used by commuters: LINE 1 (%) LINE 2 (%) FY FY FY FY CST CSC GT TOTAL

18 Your Company reported a cash loss of Rs.(41.66) Crore from operations during the Financial Year , which is lower than the cash loss incurred during the Financial Year , mainly on account of the commencement of operations in UG-2 section and the entire East-West Corridor which resulted in increased ridership. It is heartening to note that with the entire Phase-1 network becoming fully operational; the travelling public of Bengaluru has given an overwhelming response to the Metro Services in this line and well appreciated its quality and efficiency. As a result, the average daily ridership in Phase-1 has shown a quantum jump and is currently in the range of 3.30 lakhs to 3.60 lakhs on an average, which is very encouraging. It is hoped that with the opening of commercial operations of the entire Phase-1, the average ridership should touch Four to Five lakhs per day in about a year s time. The ridership would substantially improve the Fare Box Revenue in the current Financial Year and help to achieve operational break-even by the end of financial year In order to accommodate the increased number of passengers in the trains, the existing 3 car trains will be converted into 6 car trains, for which the Company has awarded the tender to BEML and the deliveries of these converted 6 car trains are expected to commence by December Initiatives in collection of Non-fare box revenue Your Directors are happy to inform that the Company has continued with the innovative methods to earn significant amounts from Non-Fare Box Revenue during the year under review as well. In furtherance of this initiative, during the year, the Non-Fare Box Revenue has increased to Rs Crore compared to the revenue of Rs Crore reported in the previous year The details of Non-Fare Box Revenue earned during the year are as follows: Sl. No. Particulars (Rs. in lakhs) 1. ATM License Fee Income from property development Income from technical training Income from Utilities Royalty Tender document fee Grand Total The Non-Fare Box Revenue is likely to increase several folds in the coming years which will contribute substantially towards the overall revenue growth and help in servicing of and repayment of debts contracted by the Company for the Project. 18

19 Training Institute During the year of , the Bangalore Metro Rail Training Institute (BMRTI) has conducted following training programmes for : Training for BMRCL employees : 169 BMRCL new employees. BBRS Training for 13 telecom Staff. 160 Refresher courses. 43 Train operator to station controller conversion. 74 contractual staff of BMRCL. Crew control training for 15 TOs. Communication skill training programme for 50 employees. Competency renewal training 60 TOs. Yoga and Meditation class were held for employees. Specialized Training ECS and TVS Dampers Training for 23 employees of E&M department. TVS pneumatic system training for 33 employees of E&M department. Water treatment Training for 38 employees of CSW department. TVS, ECS, BMS training for 163 SC, TO, E&M staff. Bogie testing training for 12 employees of Rolling stock. VCC training for 08 employees of Rolling stock staff. 13 Assistant Security Officers of BMRCL. Mainline faults training for 09 TO S Security Training 746 members Home Guard training. KSISF training for 15 members. Rail Grinding Machine training for 12 p way staff. Tamping machine training for 15 P way staff. Training for other Metro Rail company employees 86 SC/TO of Kochi Metro 12 weeks training. 43 SE/JE of Kochi Metro 9 weeks program. 77 Maintainers from Kochi metro. 4 trainees of Traction Power controllers from Kochi Metro. 5 SC/TO of Chennai metro Trainees 2 weeks programme. Other Trainings The BMRTI has conducted Kannada learning classes for the Ex-Serviceman employees of BMRCL who are from outside state of Karnataka. Firefighting and First Aid training for 169 BMRCL staff. 19

20 Awareness about safety and security in Metro training programs for police department. The BMRTI has conducted program and Mock Drills under Fire Fighting and Security threats. Metro Awareness programme was carried out for the benefit of school and college students of Bangalore and more than 1314 students were permitted to visit Metro Station and Depot. Tree Plantation Programme was held on 15 th August 2016 and 26 th January Planted 350 Nos. of plants at various locations. Cultural Activates on the occasion of Independence Day was held 15 th August Woman s day celebrated on 8 th March FA/CAO and GM/A&HR of Kolkata Metro visited to Institute 13 th May I.A.S officers visited to the Institute on 24 th August CMRS visited to Institute on 14 th June BMRTI is heading towards becoming a self-sustaining unit within the next three years by inviting other National and international Metros. Accessibility Your Company has taken the following Disabled-friendly measures : All stations are designed for people who are physically challenged. Disability audit too has been done by Mobility India and they too have certified that the stations are disabled friendly. All stations have parking facility for handicap vehicles closest to the stations. Wheelchairs are available at all stations and are kept at the ground level and also at the platform level. People who require wheel chair can call up the station controller and wheelchair will be made available at the ground level with an attender to take them to the train. When the passengers de-board at the exit station there is an attender to assist the passenger to exit through another wheelchair. All the station entry and exits have ramp access, lift with Braille key buttons. From the ground level there are tactile flooring tiles for the visually challenged to help them in easy navigation to the platform level. The Company is also training its staff to learn sign language, in association with Enable India. Above all your Directors are happy to inform that the BMRCL staffs are very sensitive to the needs of the people with disability. Security System On the request of the Company, the CISF conducted a survey on security issues of Bangalore Metro Rail Project and has submitted its report. The Additional Chief Secretary to Government of Karnataka, Home Department, constituted a committee for preparing a Security Plan for Bangalore Metro under the Chairmanship of DIG, ISD/ KSISF. The same has been submitted to the Government of Karnataka. At present, there are 106 KSISF personnel deployed to look after the core security functions at the Underground Metro Stations. Your Company has put in place a robust security system for its operational lines wherein at the lower level private Security Agencies who are chosen through open tender process are providing the services of security guards and supervisors to provide services such as baggage scanning, frisking, general security duties. The baggage scanners, 20

21 HHMDs and DFMDs are being provided by the private security agencies and now it has been replaced by procuring these security equipment s directly by BMRCL. In addition to the private security guards, there are about 831 Home Guards deployed for providing security services. The City Police are conducting yearly security audit of Bangalore Metro Rail Network and extending assistance wherever required. Feeder Routes for Metro Stations Your Company has collaborated with the Bangalore Metropolitan Transport Corporation (BMTC) for providing last mile connectivity to the Metro Rail commuters to reach the nearest metro station. BMTC is operating Feeder route service in major metro stations and where there is high density requirement by commercial / IT sector, the number of bus services have been increased. In Baiyappanahalli, there is feeder route service every 3 minutes to the IT corridor along the Whitefield Road. Likewise from Mysore Road Metro Station, there is a BMTC bus every 2 minutes towards Mysore Road side. At the SV Road station, the BMTC ferries Metro commuters to IT corridor and also few of the additional metro feeder services on ten (10) new routes viz., Begur to Banashankari, Majestic to Poornaprajna bus stop, Bannerghatta National park to Banashankari, DLF to Nayandahalli. Besides the BMTC bus service, your company has also promoted bike rental facilities at the Baiyappanahalli Metro Station, which is a successful model that can be replicated at other major metro stations. Your Company is also working closely with Directorate of Urban Land Transport (DULT) to provide better Station access to the metro station. DULT has been working with other stakeholders to co-ordinate better and easy access between different modes of transport. Besides this, Cab aggregators like UBER and OLA have opened their facilitation centers at select metro stations to facilitate metro commuters to access their cabs to reach their destinations. Metro Fare In terms of the Metro Railway (Operation and Maintenance) Act, 2002, the Bangalore Metro Railway Administration has fixed the initial fares in its network, by which the minimum fare has been fixed at Rs.10/-. The minimum and maximum fare on East-West Corridor is Rs.10/- and Rs.40/- respectively and in the North-South Corridor it is Rs.10/- and Rs.60/- respectively. Multiple Journey Tickets are discounted over the Single Journey Tickets upto 15% in case of Stored Value Tickets. Trip Tickets have been discontinued from 1 st March 2017 upon issuance for guidelines from Reserve Bank of India. Persons in excess of 25 nos. are permitted to travel by Group Tickets which carry a discount of 10%. Commuter-friendly conveniences Your Company has introduced several commuter friendly measures in respect of ticketing. The regular commuters can use Smart Card with Stored Value ticket. Automatic Ticket Vending Machines will be installed at Metro Stations which issue tokens and add-value to smart cards by accepting cash and will also have provision to accept debit/credit cards in future. BMRCL has tied up with two banks viz., Federal Bank and ICICI Bank for issue of Combo Cards. The commuters can use a single combo card for both banking application and Metro travel. They can top-up the stored value on their smart cards at Net banking facility, Mobile banking, debit or credit cards. 21

22 Communication facility in underground and Wi-Fi facility in trains Commuters are able to enjoy uninterrupted 4G mobile services provided by BMRCL in underground stations and while in tunnel sections, in collaboration with ATC (American Telecom Tower Corporation Ltd.,). Presently, R-Jio network is available in Tunnels and all UG Stations of the Rail network, which is expected to be extended to other mobile network providers. Your Company has also developed a mobile application - Namma Metro Information App for commuters in associated with C-DAC. This application provides all the details to commuters regarding train timings, metro updates & services offered by BMRCL at stations. Route planning is the prime feature of this app, which suggests the route with BMTC feeder busses & metro options. Contribution to City Beautification and Public Spaces Rangoli Metro Art Center and Bangaluru Santhe Rangoli Metro Art Center Your directors are happy to inform that the Rangoli Metro Art Center (RMAC) has become a prominent art center in the city with over 35 major art exhibitions held during the year. Apart from this,the auditorium saw a record number performances by senior artists. The monthly Drumjam programme with Mr.Roborto Narain and Ms.Vasundra Das has attracted International media attention. Your Directors are also happy to inform you that BMRCL has entered into a collaborative public art project The Art in-transit Project -between the sister-cities of Bangalore and San Francisco. This project seeks to strengthen and celebrate the Sister-City relationship between the City of San Francisco and the City of Bengaluru. The Sister-Station plans to link the Civic Center BART Station in San Francisco and the Cubbon Park Metro Station in Bangalore through event based art, design and technology interventions. This has been made possible with the total involvement of Srishti Institute of Art Design and Technology, Bengaluru. The Art-in-Transit project is an inclusive, cross-city, place-based art project and involves multiple art and community partners in each city. Artists and art- students create interactive technology, performance, and 2D/3D public art installations and events. Since December 2016, there has been quarterly Festival of Stories and will continue to December As part of the festival of stories, BMRCL also participated in the Street Art festival comprising of Murals work by well-known national and international artists and the participation of students of various art institutions in Bengaluru. They have painted mural works at the following stations: 1. Mahatma Gandhi Station (Church Street entry) 2. NadaPrabhu Kempegowda - Majestic Station 3. Cubbon Park Metro Station 22

23 Your Company s efforts to bring art in the metro stations have received international attention and many metro systems across the world have been influenced by this creative practice with local institution. Your Directors are happy to inform that BMRCL will continue to involve with local institutions and community to bring art in its various forms at as many metro stations as possible, to live up to our brand image - Namma Metro. Bengaluru Santhe Your Directors are happy to inform that while the Rangoli Metro Art Center represents the best in Urban Arts, the Bengaluru Santhe, also called as Rural Haat, established at the Swami Vivekananda Metro Station, evokes the ethnic feel of the Country. The Rural Haat comprises cluster of stalls along a central spine which creates a street like feel. The architecture is designed in such ways, which resembles the folk architecture of Karnataka and make the location attractive to the tourists. Human Resource Development The Company has two wings viz. the Project Wing and the O&M Wing. All the staff in the Project Wing is appointed either on contract basisor drawn on deputation from Central Government Departments/Central PSUs, State Government and State PSUs. The Staff in the O&M Wing are appointed on regular basis. Human Resources Project Wing The Company has approved cadre strength of 216 for Project Wing of Phase-1. The strength as on was 538 consisting of 3 Functional Directors, 421 Engineers, 59 support staff and 55 Non-Technical Officers. Out of this, 32 are working on deputation basis, 503 on contract basis and 3 appointed by erstwhile BMRTL. Additionally, the services of 193 personnel (consisting of DEOs, Attenders, Drivers, EAs) has been outsourced. Additional Personnel have been recruited against posts to be sanctioned for Phase-2 of the Project. During the year under review, expenditure on Salaries and emoluments to officers and staff in the Project Wing was Rs Crore. Human Resources Operations & Maintenance Wing Need based recruitment has been carried out in a phased manner. As on , a total of 1369 employees were on the rolls, consisting of 80 Executives and 1289 Non Executive staff. This includes 1154 regular employees, 209 contract employees and 6 officers on deputation. During the year under review, the total expenditure on account of Salaries and emoluments to officers and staff in the O&M Wing was Rs Crore. Registration of Construction Workers A Large numbers of construction workers are working with the Contractors who are implementing the Metro Rail Project. These workers are registered under The Building & Other Construction Workers (Regulation of employment & conditions of service) Act, 1996 and are entitled to various benefits like Medical facility, Accident compensation, disability pension, children education allowance through the Karnataka Building and Other Construction Workers Welfare Board, besides Employees Provident Fund and Miscellaneous Provisions Act, 1952, Employees State Insurance Act, 1948, etc,. As of March 31, 2017, 3750 construction workers have been registered under section Building and other Construction Workers Act. 23

24 As per the directions of the Hon ble High Court of Karnataka, Chief Labour Commissioner (central) is conducting Monthly meeting of contractors, representatives of Contract Labourers, along with Representative of BMRCL and State Government labour department. In the said meeting the Chief Labour Commissioner will give advice to implement and adhere to statutory requirements, in order to facilitate the welfare of the constructions workers. Your Company is closely monitoring the contractors and ensuring statutory compliance and collects the periodical compliance reports and the same are reported to the Board. Safety & well-being of Women The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of Sexual Harassment of Woman at Workplace (Prevention, prohibition and Redressal) Act and Rules framed thereunder, the Company has implemented the policy on prevention, prohibition and redressal of sexual harassment at the workplace. All women, permanent, temporary or contractual are covered under the Policy. The Company has set up Internal Complaints Committee, (Under Section 4 of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 comprising of a chairperson, who is a senior level women employee, one member as advocate and one member each from BMRCL Project office and O&M Wing. During the year, the Company has not received any complaints on sexual harassment. The Company has trained and deployed 58 women employees as Train Operators and 2 women employees as Station Controllers. Safety The Company gives utmost importance and priority to safety and has all the safety procedures in place. The Company has developed a Safety, Health, Environment Manual (SHE manual), which is part of all construction contracts.during the year , there were no fatal accidents at the Construction site. Environment Development of Lakes The Government of Karnataka has requested BMRCL to take up the rejuvenation and overall development of two lakes in Bengaluru, as part of its CSR Objectives. These two lakes are the kengeri lake and Veerasandra Lake. While the Kengeri lake is located in front of Myllasandra Metro Station of East West line of Phase-2 of BMRC Project which spreads across an area of 32 acres and 16 guntas in Kengeri village, theveerasandra lake is located in front of Huskuru Road Metro Station of new line (Reach-5) of Phase-2 i.e. R.V.Road to Bommasandra line, spreading across an area of 17 acres 06 guntas in Veerasandra village, Anekal Taluk, Bengauru Rural. M/s. Ramky Inviro Engineers Ltd., has prepared the Detail Project Report for the rejuvenation and overall development of Kengeri lake and the same has been approved by the Karnataka Lake Conversation and Development Authority (KLCDA). Cost of this Project is 8.75 Crore. Tender for the Kengeri Lake Development work will be invited shortly. 24

25 M/s. IDECk, Bengaluru has prepared the Detailed Project Report for Veerasandra lake and the same has been approved by Karnataka Lake Conservation and Development Authority (KLCDA). Cost of this project is Rs Crore. The work of rejuvenation and overall development for Veerasandra lake will be taken up shortly. Water Harvesting Out of 42.3 kms stretch of the Metro alignment of Phase-1, kms is Elevated Viaduct with 33 stations. Since the Viaduct is litter free, it is possible to collect the Rain Water, through Rain Water Harvesting and sell the same to interested parties to further filter it and make it potable. Initial studies on the quality of Rain water collected from the Viaduct reveals that if the same is subjected to normal filtering process, the rain water will be potable. Rain water absorption wells have been provided at every alternative span of the Viaduct, covering almost the entire length of the Viaduct. This Rain Water Harvesting (RWH) measure has resulted in recharge of the ground water resources across the metro alignment. Green Cover Your Company is aware of and is sensitive to the public concern regarding preservation of trees which provides green cover to the garden city of Bengaluru. The Namma Metro project has ensured that the cutting of trees is limited to the barest minimum. This concern extends to tree pruning as well. The Company is following the policy of planting saplings in the ratio of 1:10 and this is being done in association with BBMP and BWSSB, the two important civic agencies of the City. Your Company has conducted various Environmental Impact Studies such as impact of Noise & Dust pollution in the operation of metro rail. PHASE-2 Your Company is proceeding with the implementation of Phase-2 of the Mass Rapid Transport system for Bangalore. The sanctioned Detailed Project Report (DPR) of Phase-2 also envisages extension of existing two corridors viz., East- West and North-South Corridors comprising of Elevated sections. The East-West Corridor is extended from Mysore Road terminal to Kengeri upto 6.45 kms in the west end and from Baiyappnahalli to ITPL-Whitefield upto kms in the East end. Similarly, North South Corridor is extended from Nagasandra to Bangalore International Exhibition Centre (BIEC) upto 3.77 kms in the North side and Puttenahalli Cross to Anjanapura Township (NICE Road) upto 6.29 kms in the south side. While the Four Extensions will give the much needed last mile connectivity to the commuters, the two new lines from Bommasandra to R.V. Road (18.82 kms) and IIMB-Gottigere to Nagawara (21.20 kms) will traverse through some of the densest and most traffic affected areas of Bengaluru.The Phase-2 of the Metro Rail Project will bring connectivity to the Electronics Industry.The Phase-I (42.3 km) and Phase-2 (72.09 km), will together create a Metro Network of km, with 101 Stations (80 Elevated 19 Underground and 2 At-Grade). The Company is confident of completing the Phase-2 of the project by the year

26 Financial progress as of March 31, Phase - 2 As at the end of 31 st March 2017, the Financial Progress was of the order of 8.54% (Rs.2, Crore out of Rs.26, Crore) and the details are as follows: Cumulative Financial Progress upto for Phase - 2 (Rs. In Crore) Releases Government Government Financial Total of Karnataka of India Institutions Equity Subordinate Debt AfD (PTA through GoI) Central Financial Assistance Others Total Releases Total Expenditure Percentage of Expenditure of Total Releases Financial Progress for the year for Phase - 2 (Rs. In Crore) Releases Government Government Financial Total during of Karnataka of India Institutions Equity Subordinate Debt AfD (PTA through GoI) Others Total Releases Total Expenditure Percentage of Expenditure of Total Releases Financial Closure for Phase-2 The Project Cost of Phase-2 is Rs.26, Crore. BMRCL has already started implementation of Phase-2 of the project and most of the civil contracts for construction except that of the underground section have been awarded. The Government of India and Government of Karnataka has sanctioned and released funds for Phase-2 of the Project. The Agence Francaise Development (AfD) and Government of India have signed a 200 Million Sovereign Loan. The Company has approached European Investment Bank (EIB) and Asian Infrastructure Investment Bank for funding the Phase-2 of the BMRC Project and the same is under consideration. The Company is exploring other financial options for funding the Phase-2 of the BMRC Project. 26

27 Status of Implementation of Phase-2 Reach 2A Extension: Nayandahalli Station to Pattanagere Station M/s. IL&FS Engineering and Construction Company Ltd., have been awarded the contract for construction of elevated structure (viaduct) of length of 3.94 km and 4 stations viz., Nayandahalli, Raja Rajeshwarinagar, Jnanabharati & pattanegere in the extension line of East-West Corridor of Bangalore Metro Rail Project - Phase-2.The tender was awarded during April 2015 and the status upto July 2017 is as follows: Road Widening/diversion works are completed piles are casted for viaduct and stations. 350 piers are casted for viaduct and stations. 554 segments has been casted. Reach 2B Extension: Pattanagere Station to Kengeri Station M/s. Soma Enterprise Ltd., has been awarded the contract for construction of Elevated Structures (Viaduct) of length 4.86 Km from Pattanagere station (excluding) to beginning of Challagatta Depot including 2 Nos. of Elevated Metro Stations viz. Mailasandra Station and Kengeri station in the extension of East-West Corridor of Bangalore Metro Rail Project - Phase-2. The tender was awarded during March 2016 the status upto July 2017 is as follows: Road Widening/diversion works are under progress. 684 piles are casted for viaduct and stations. 47 piers are casted for viaduct and stations. 458 segments has been casted. Reach-4B Extension: Yelachenahalli Station to Anjanapura Station M/s. NCC Ltd., has been awarded the contract for Construction of Elevated Structures of length 6.52 km from Puttenahalli Cross station dead end to Anjanapura Township Station and further viaduct for Depot Lines including 5 Nos. of Elevated Metro Stations viz. Anjanapura Road Cross Station, Krishna Leela Park Station, Vajarahalli station, Thalaghattapura station and Anjanapura Township station in the extension of south side of North-South Corridor of Bangalore Metro Rail Project, Phase-2.The tender was awarded during January 2016 and the status upto July 2017 is as follows: Road Widening/diversion works are completed piles are casted for viaduct and stations. 215 piers are casted for viaduct and stations. 871 segments has been casted. 27

28 Major Contracts awarded for Phase-2 during the year and in the year Reach-3C Extension: Nagasandra Station to BIEC Station M/s. Simplex Infrastructures Limited, Bangalore has been awarded the contract for construction of elevated structures (viaduct & stations) of length 3.03 km (approx.) from Hessaraghatta cross station (excl.) to BIEC station (incl.) including road widening works & allied works and 3 Numbers of elevated Metro Stations viz., Manjunathanagar, Jindal and BIEC in the Extension of North side of North-South Corridor of Bangalore Metro Rail Project - Phase-2. The Preliminary works are under progress. Reach-1B Extension: The Reach 1B Extension has been divided into 2 packages one from Baiyappanahalli Metro Station to Visvesvarya Industrial Area Station and another from Visvesvarya Industrial Area Station to Whitefield Station M/s. ITD CEMINDIA JV has been awarded the contract for Construction of elevated structures (viaduct & stations) of length 8.03 Km (Approx.) from Baiyappanahalli station (excl.) to Visvesvaraya Industrial Area Station (incl.) including Road Widening & allied works and 6 Numbers of Elevated Metro stations viz., Jyothipuram, K.R. Puram, Mahadevapura, Garudacharpalya, Doddanakundi Industrial Area, Visvesvaraya Industrial Area in the Extension of East side of East-West Corridor of Bangalore Metro Rail Project, Phase-2 and Construction of elevated structures (viaduct & stations) of 7.21 Km (Approx.) length from Visvesvaraya Industrial Area Station (excl.) to Whitefield Station (Incl.) including Viaduct Line Entry to Whitefield Depot, road widening & allied works and 7 numbers of Elevated Metro Stations viz, Kundanahalli, Vydehi Hospital, Sri Satya Sai Hospital, ITPL, Kadugodi, Ujwala Vidyalaya and Whitefield in the extension of East side of East-West Corridor of Bangalore Metro Rail Project - Phase-2. Both the tenders were awarded during April 2017 and the Preliminary works are under progress. Reach-5 New Line: The Reach-5 Extension has been divided into 3 packages from Hosa Road Station to Bommasandra Station, Hosa Road Station to HSR Layout Station and HSR layout to R.V.Road Station M/s. ITD CEMINDIA JV has been awarded the contract for Construction of Elevated structures (Viaduct & Stations) of length 6.41 Km (approx.) from Bommasandra to Hosa road station (excl.) including Depot entry line to Hebbagodi Depot, Road widening & allied works and 5 Numbers of Metro stations viz., Bommasandra, Hebbagodi, Huskur Road, Electronic city-ll, Electronic city-l in Reach-5 line of Bangalore Metro Rail Project, Phase-2 and Construction of Elevated structures (Viaduct & Stations) of length 6.38 Km (approx.) from Hosa road station (Incl.) to HSR Layout station including Road widening & allied works and 6 Numbers of Metro Stations viz., Hosa Road, Basapura Road, Chikkabegur, Muneshwara Nagar, Oxford College,HSR layout in Reach-5 line of Bangalore Metro Rail Project - Phase 2. Both the tenders were awarded during April 2017 and the Preliminary works are under progress. 28

29 M/s. HCC-URCC (JV) has been awarded the contract for Construction of Elevated structures (Metro viaduct, stations and road cum rail flyover bridge) of length 6.340Km (approx.) from HSR Layout station (excluding) to RV Road station (including) and till dead end including Road widening & allied works and 5 Nos of Metro Stations viz., Central Silk Board, BTM Layout, Jayadeva Hospital, Ragigudda and RV Road in Reach-5 line of Bangalore Metro Rail Project, Phase-2.The tender was awarded during June 2017 and the Preliminary works are under progress. Reach-6 New Line : Gottigere to Nagawara line consists of both elevated and underground section and it has been divided into 5 packages since the line consists of both elevated and underground section. M/s. Simplex Infrastructure Ltd., has been awarded the contract for construction of Elevated structures (viaduct & Stations) of length 7.50 kms from Gottigere to Swagath Road Cross including Kothnur Depot entry line, Road Widening & allied works and construction of 5 number of metro stations. The tender was awarded during September 2017 and the remaining part of the line from Swagath Road Cross to Nagawara which is the underground section is divided into 4 packages, and is under tendering process. Status of Land Acquisition for Phase-2 Your Company has initiated land acquisition process for the Phase-2 in both extensions and new lines, under the provisions of Karnataka Industrial Areas Development Act, The total land required for Phase-2 of the BMRC Project is Hectares. Out of this, Hectares is private land and hectares is Government Land. The Company has so far acquired Hectares of Private Land and 4.32 Hectares of Government Land. A total amount of Rs Crore has been earmarked towards cost of land acquisition and rehabilitation in the sanction of Phase-2 project which is to be entirely borne by Government of Karnataka. The Company has so far paid Rs Crore towards compensation for these properties. The major area required for Phase-2 is for the four depots, out of which preliminary notification has been published in respect of three depots and final notification in respect of Hebbagodi Depot (Reach-5). Final notification in respect of Challaghatta Depot (Reach-2E) and Kothanur Depot (Reach-6) will be published shortly. For the fourth depot on Reach-4B, the Company has initiated land acquisition process in respect of 15 acres of land belonging to Roerich and Devikarani Roerich estate. The Land acquisition is almost complete in respect of Reach 1E, Reach 2E, Reach 3C and Reach-4B. The Balance required land will be acquired before March, Phase - 2A Extension : Silk Board to K.R. Puram Your Company has initiated the process of setting up of separate Metro line on Outer Ring Road (ORR) from Central Silk Board Junction to K.R.Puram with a length of (17 kms length) at an estimated cost of Rs.4202 Crore, which will be financed through Innovative Financing Technique.The Detailed Project Report (DPR) for this new line was submitted to the Government of Karnataka and the same has been accorded approval in March The Governemnt of India has also conveyed their clearance for this new line Phase 2A. M/s.Geo. Quest Incorp has been awarded the Proposed Geo-technical investigation of this new K.R. Puram to Central Silk Board line. 29

30 Metro link to Airport Your Company is also in the process of finalising the Detailed Project Report (DPR) for the Airport line by the in house team in the BMRCL after receiving clearance from the Government of Karnataka. This new line will be implemented as Phase 2B of BMRC Project and will pass through Thanisandra Road, Jakkur and Yelahanka. Phase-3: Circular Metro Line Further, the Phase-3 Corridor envisages a Circular Line connecting important areas like Ring Road, South East Bengaluru areas, Old Madras Road, Sarjapur Road. Also radial corridor along Magadi Road and Old madras Road is also envisaged. The consultants have submitted their final report for this Line and the same is under scrutiny. GENERAL INFORMATION Organizational set-up The Board of Directors of the Company comprised of twelve (12) Directors out of a maximum of fifteen (15) as provided in the Articles of Association of the Company. Government of India and Government of Karnataka will nominate Five (5) Directors each with the Secretary, Ministry of Housing & Urban Affairs, Government of India appointed as the Chairman of the Company. The Managing Director is the nominee of Government of Karnataka with prior concurrence of Government of India and appointed by the Board of Directors. The Managing Director is the Chief Executive Officer of the Company and is assisted by three Functional Directors, Company Secretary/ Chief Vigilance Officer, Chief Financial Officer,Chief Engineers, General Managers, Chief Security Officer, Project Manager and other Officers on deputation/contract basis.the tasks are monitored periodically by the Managing Director and the Functional Directors assisted by a team of competent and dedicated officers drawn substantially from the Central and State Governments. Progress made in the implementation of the Project as also the performance in respect of Operations is reported for review to the Board of Directors and corrective steps taken wherever necessary. Directors & Key Managerial Personnel (KMP) The following changes among the Directors& Key Managerial personnel took place as on the date of report: Shri Durga Shanker Mishra, Secretary to Government of India, Ministry of Housing & Urban Affairs, was appointed as Chairman of the Company with effect from June 23, 2017 in place of Shri Rajiv Gauba. Shri S.Vasudevan, General Manager (Finance & Accounts) has been designated as Chief Financial Officer of the Company in terms of Section 203 of the Companies Act, 2013 with effect from 28 th December, The Board welcomes the new Directors on the Board and acknowledges the contributions made and guidance given by Shri Rajiv Gauba, Chairman & Director during his tenure on the Board of the Company. 30

31 In accordance with the provisions of the Companies Act, 2013 a minimum of four (4) Board Meetings need to be held every year. During the year under review, the Board has met four (4) times to expedite decisions for implementation of the project and also to review project performance as well as the performance of the Operation & Maintenance wing among other things. The Company has at present a Woman Director on the Board in compliance of the requirements of Section 149(1) of the Companies Act, 2013.However, with regard to appointment of Independent Directors as required under Section 149(6) of the Companies, 2013 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014, your Company has initiated the process of selection based on the directions received from Ministry of Housing & Urban Affairs, New Delhi. Number of Board Meetings held during the year The Board of Directors met four (4) times during the financial year from 1 st April, 2016 to 31 st March, The dates on which the meetings were held are 30 th June 2016, 09 th September 2016, 28 th December 2016 and on 9 th March High Power Committee Meetings (HPC) The High Power Committee (HPC), under the Chairmanship of Chief Secretary, GoK has met once during the year on June 16, 2016 and has given various decisions/directions resulting in the smooth and speedy implementation of Bangalore Metro Rail Project. Employee Relations The employee relations were peaceful and cordial during the year under review. Related Party Transaction There were no Related Party Transactions reported during the year under review, as contemplated under the Companies Act, 2013 and the Rules thereof. BMRC Newsletter The Company, as part of its endeavor to disseminate information, brings out Monthly News Letter BMRC Newsletter, which is published on Company s Website. STATUTORY COMPLIANCES Compliances under RTI The Company has been ensuring compliance under the Right to Information Act, 2005 in its true spirit and during the year under review, out of 375 RTI applications received, information was furnished in a timely manner to all the applicants. There were 25 Appeals referred to the First Appellate Authority, which were also disposed of as per the provisions of the Act, in a timely manner.your Company takes adequate care to monitor the compliances under various statutory enactments affecting the Company and as far as possible, tries to achieve strict enforcement of the applicable regulations in a most transparent manner. 31

32 Public Deposits During the year under review, your Company has not accepted any deposits from the Public within the meaning of Section 73 of the Companies Act, 2013 read with the applicable Rules in this regard. Foreign Exchange Transactions During the year under review, there are no reportable foreign exchange earnings (previous year: Nil). The details regarding foreign exchange outgo during the year was Rs Crore (Previous year: Rs Crore) AUDITORS Statutory Auditors The Comptroller & Auditor General of India has appointed M/s. Manohar Chowdhry & Associates, Chartered Accountants, Bengaluru, as Statutory Auditors of the Company for the year The Notes to the Accounts referred to in the Auditor s Report are self-explanatory and, therefore, do not call for any further comments.the Comments from Comptroller & Auditor General of India on the Accounts for the year ended 31 st March, 2017, is being placed separately for consideration of Members. Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013 & The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s.S.Kedarnath & Associates, Company Secretaries in Practice, Bengaluru, (CP No.4422) to undertake the secretarial audit of the Company. The Secretarial Audit Report issued by the Secretarial Auditor for the year is at Annexure I of this Report. The replies to the observations/qualifications in the Secretarial Audit Report is given herein below: a) The Company is yet to appoint Independent Directors as required under Section 149(6) read with Schedule IV of the Companies Act, The Company has represented that based on the directions from the Administrative Ministry in the Central Government; they have initiated the process of selection and appointment of Independent Directors in compliance thereof. In view of the same, the compliance of Clause VII and Clause VIII of schedule IV of the Companies Act, 2013 will be done in due course. Your Directors wish to inform that the Company has already initiated the process of identifying and selection of suitable persons as Independent Directors who meets the prescribed criteria. The process of appointment of Independent Directors on the Board will be complied as soon as possible. 32

33 Internal Auditor M/s. Phillipos & Co., Chartered Accountants, Bengaluru, have been appointed as Internal Auditors of the Company with effect from for a period of one year to conduct Internal audit of the Company. The functioning of Internal auditors of the Company and their reports are reviewed by the Audit Committee from time to time. Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT-9 is at Annexure-II to this Report. Risk Management/Fraud Prevention Policy/Whistle Blower Policy Your Company will be formulating a Risk Management Policy based on various operational risks upon implementation and operations of Phase-1 of the Project and study thereof. As far as risks to assets and certain liabilities are concerned, these are mitigated by obtaining Insurance Cover for adequate value (Gross Block basis) from an IRDA Licensed Public Sector Insurance Company. As regards financial risks, adequate internal control measures are put in place by engaging external firm of chartered accountants as Internal Auditors on concurrent basis apart from regular audit by both the Statutory Auditors as well as audit by C&AG of India in different Phases. Your Directors have approved the BMRCL Fraud Prevention Policy and BMRCL Whistle Blower Policy which are available on the Company s official website, The Company has an approved Foreign Exchange Risk Management Policy for assessing Foreign Exchange related risks to obtain hedge cover against currency fluctuations. However, since the matter regarding sharing of foreign exchange fluctuations during repayment period of sovereign loans taken by Government of India for BMRCL Project, hedging of foreign exchange risks is not considered appropriate at this stage. Forward Cover is being taken wherever payments are to be made in Foreign exchange for its imports. Corporate Social Responsibility Being a responsible and responsive corporate citizen, your Company is committed to its stakeholders viz., the shareholders, the employees, the management, the suppliers, the customers and the community at large. Your Company is emerging as an environment friendly metro; and acknowledging its responsibility towards the society, your Company has been voluntarily undertaking initiatives to improve the standard of living and to enhance the quality of life of the people in Bengaluru. Further, since the Company is not earning operational profit, there is no statutory requirement for expending any amounts towards specific projects under Corporate Social Responsibility in terms of Section 135 of the Companies Act, 2013 and applicable Rules/Schedules there under. Audit Committee Pursuant to the requirements in terms of the Companies Act, 2013, your Board of Directors have constituted an Audit Committee with detailed terms of reference as per the requirements under the Act and the general norms of Corporate Governance. The Audit Committee presently comprises of four Director s, Viz., Shri Mahendra Jain, IAS, Non-whole-time Director as Chairman and 33

34 Shri I.S.N.Prasad, IAS, Shri L.K. Atheeq, IAS and Shri K.K. Aggarwal, IRSE, Non-whole-time Directors, as Members. The Audit Committee met on , and during the year During the year, all the recommendations made by Audit Committee were accepted by the Board. Nomination and Remuneration Committee As per Section 178 of the Companies Act, 2013, read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, Your Company has constituted the Nomination and Remuneration Committee. The Composition and meetings held during the year is detailed in Corporate Governance report. Compliance Report The Company has complied with the requirements of various Corporate and other Laws applicable and the extent of compliances are being reviewed by the Board periodically. Your Company is an Unlisted Public Limited Company. However, as a measure of best practice, your Directors are happy to place a Corporate Governance Report as detailed in the Corporate Governance section of this Report. Information on Conservation of Energy Your Company has incorporated various conservation measures right at the design stage, besides selection of appropriate technology for various systems, enabling the company to ensure utmost optimal use of energy. Based on the experience gained on the commissioned corridors, designing of stations have been done with good natural lighting-during day time, lights in public area need not be switched on in elevated stations. segregation of circuits into emergency (UPS)/Essential(DG)/Normal (from main supply). segregation within light circuits with MCB control, by switching off 80% of lights in stations after revenue service. use of BMS for lighting control from Reach-3 onwards. by switching off lights in unoccupied PF area. the provision of air-conditioners has been reviewed and have been modified resulting in reduced air conditioning load at elevated stations by using VRV technology air conditioners. sourcing energy from solar power is in process after finalizing 1 block of 50MW. Technology Absorption Use of equipment sub-assemblies and materials manufactured in India has been encouraged without compromising on quality and reliability. Energy efficient pumps, motors, lighting, Fire retardant low smoke zero Halogen (FRLSZH) cables, fire Doors meeting international standards have been developed by Indian Industries at the behest of the Company. Instead of Co2 fire protection flooding system, FM200 flooding system has been used in UG stations and INERGEN gas fire protection distribution system is implemented in ASS and TSS rooms in UG stations. 34

35 Directors Responsibility Statement Pursuant to Sub-section (5) of Section 134 of the Companies Act, 2013, your Directors state: (a) that in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs (c) of the Company as at March 31, 2017 and of the Profit or Loss of the Company for the year ended on that date; that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the annual financial statements have been prepared on a going concern basis; (e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. (f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. Acknowledgements Your Directors are thankful for the valuable co-operation, advice and support received from the various Ministries of Government of India especially the Ministry of Housing & Urban Affairs, the various Ministries/Departments of Government of Karnataka including the Urban Development Department, Finance Department etc, the Multi-lateral lending agencies viz., JICA, AfD & other Financial Institutions & Commercial Banks viz., HUDCO, Vistra ITCL (India) Limited (Debenture Trustee), Financial Advisors, Credit Rating Agencies, BBMP, BDA, KIADB, BESCOM, BMTC, KPTCL and the BangaloreTraffic Police (BTP). Your Directors wish to acknowledge their deep sense of appreciation and sincere thanks to all the Government Agencies, Departments, Bankers, Comptroller & Auditor General of India, Statutory Auditors, Internal Auditors and each and every stakeholder, for their wholehearted and continued support, guidance, advice, assistance and co-operation extended from time to time, during the year and hope to receive same kind of co-operation in the future as well. Your Directors would also like to thank each and every one of the Company s Contractors, for their contribution and sincere efforts and all others who are associated with the implementation of the Project. 35

36 Your Directors thank the Media and Members of the Public for their continued support, despite the inconveniences caused in the areas affected by the Metro alignment, in the course of execution of the Project without which the implementation of this prestigious Project in the City of Bengaluru would not have been possible. Your Directors wish to also place on record their appreciation for the co-operation extended by all the Officers and Employees of the Company in the progress and execution of the Project and for the smooth conduct of the operations by the Company during the year. Date : Place : New Delhi FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Sd/- (DURGA SHANKER MISHRA) CHAIRMAN 36

37 CORPORATE GOVERNANCE REPORT FOR THE YEAR Good Corporate Governance is fundamental in ensuring that the Company is well managed keeping in view the interests of all its stakeholders. Therefore, the Board continues to seek, identify and formalize best practices for adoption by the Company. BMRCL is pursuing sustainable business practices by creating value for all its stake holders. To attain this objective, the Company is inculcating a value system that incorporates integrity, transparency and fairness across all its business activities. Therefore, the Company is voluntarily practicing sound principles of Corporate Governance as a responsible corporate citizen. In the performance of its functions, BMRCL is guided by various statutory enactments applicable to it, with special reference to the KTTP Act, 1999, the Companies Act, 2013,the Articles of Associations (AoA) of the Company, applicable accounting and secretarial standards, regulations prescribed/instructions issued by different regulatory authorities like the C&AG, provisions of the Right to Information Act, 2005 and Rules made thereunder, to name a few. In addition, all the applicable statutes governing the functioning of the organization in respect of safety, health, environment, welfare of the employees as well as those engaged through contractors and the provision for fair compensation, rehabilitation and resettlement of project affected persons are also being complied with. Board of Directors As per the Articles of Association of the Company, the strength of the Board shall not be less than three Directors and not more than fifteen Directors excluding alternate Directors and Directors nominated by Public Financial Institutions or other lending institutions. These Directors may be either whole-time functional Directors or Part-time Directors nominated by the Government(s) and Independent Directors appointed by the Company. Constitution of the Board BMRCL is a Government Company within the meaning of Section 2(45) of the Companies Act, 2013 and a joint venture of Government of India and Government of Karnataka. Presently, the total subscribed & paid up equity share capital of the Company is held in equal proportion (50:50) by Government of India and Government of Karnataka. Both the Governments have the right to nominate five (5) Directors each on the Board of Directors. Government of India has the right to appoint the part time non-executive Chairman and the Government of Karnataka,has the right to appoint the full-time Managing Director& Chief Executive Officer of the Company. Composition of the Board As on 31 st March 2017, the Board comprised of twelve (12) Directors, of which three (3) are Functional Directors including the Managing Director. Five (5) Directors each are nominated by the Government of India and Government of Karnataka. 37

38 Sl. No. Composition of Board 1. Shri Rajiv Gauba Chairman 2. Shri Pradeep Singh Kharola Managing Director 3. Shri M. K. Sinha Director 4. Shri H. S. Anand Director 5. Shri K. K. Aggarwal Director 6. Shri M. Ravi Kanth Director 7. Shri Mahendra Jain Director 8. Shri I.S.N. Prasad Director 9. Dr. Ekroop Caur Director 10. Shri L. K. Atheeq Director 11. Shri Vijay Kumar Dhir Director Projects and Planning) 12. Shri N. M. Dhoke Director (Rolling Stock, Electrical, Signaling & Telecommunication) Responsibilities The primary role of the Board is that of being a guiding force to ensure that the mandate assigned to the Company by the Government is fully met and at the same time, the shareholders value is protected and enhanced. The Board ensures that the Company has clear goals and policies for achieving these objectives. The Board oversees the Company s strategic direction, reviews corporate performance, authorizes and monitors strategic decisions, ensures regulatory compliance and safeguards interests of various stakeholders. The Board also ensures that the company is managed in a professional manner that fulfils stakeholders aspirations and societal expectations. Board Members also ensure that their other responsibilities do not impinge on the responsibilities as Directors of the Company. BOARD/COMMITTEE MEETINGS AND PROCEDURE a) Scheduling and selection of Agenda items for Board/Committee Meetings: The meetings are convened by giving appropriate notice after obtaining approval of the Chairman of the Board/Committee. Detailed agenda notes, management information reports and other explanatory statements are circulated in advance among the members in respect of all important matters. This facilitates meaningful, informed and focused discussions and decisions at the meetings. To address any special or urgent need, meetings are also called at shorter notice and video conferencing facility made available for members for participation from remote locations, if requested, subject to the laid down procedures under the Act and compliance of relevant Rules in this regard. The Board also passes Resolution by Circulation but only for such matters, which are of utmost urgency and those which are so permitted under the Companies Act,

39 The agenda papers are prepared by the concerned Heads of Departments and submitted to the concerned functional Directors for obtaining their concurrence, before being submitted to the Managing Director for approval for circulation among Directors. Thereafter, the duly approved agenda papers are circulated to the Board Members by the Company Secretary who is the Secretary to the Board. Where it is not desirable to attach any document or if the agenda is of sensitive nature, the same is placed on the table at the meeting with the approval of the Managing Director and the Chairman. In special and exceptional circumstances, additional or supplementary item(s) on the agenda are taken up for discussion with the permission of the Chairman of the Board. The meetings are held either at Bangalore or at New Delhi, depending on the convenience of the Chairman & Directors. Four meetings of the Board were held during the year at New Delhi. Action Taken Report on Board Decisions, Physical & Financial Progress Details regarding Train Operations, Minutes of Board Committee Meetings etc., are some of the regular items of agenda which are normally brought up before the Board in each of its meetings. The Members of the Board have complete access to all information regarding the operations and other aspects of the Company. The Board Meetings are conducted in line with the applicable Secretarial Standards. b) Briefing by the Managing Director: At the beginning of each meeting of the Board, the Managing Director briefs the Board Members about the key developments including status of the project and other important achievements/developments relating to the Company in various areas. c) Recording minutes of proceedings at the Board Meeting The Minutes of the meeting are circulated in accordance with the provisions of the Companies Act, 2013 and the applicable secretarial standards. Minutes of the proceedings of each Board Meeting are recorded and are entered into the Minutes Book maintained signed by the Chairman. The minutes of each Board Meeting are submitted for confirmation at the next Board meeting. Similarly, the minutes of the Board Committee Meetings are also recorded and circulated to members of Committee after approval and signature of the Chairman of the Committee. d) Compliance: Every Head of Department and Functional Director, while preparing agenda notes ensures adherence to all the applicable provisions of law, rules, guidelines, etc. In Agenda Notes, where financial implications are involved, the views of the Finance Division of BMRCL are included, wherever necessitated. The Company Secretary ensures compliance of all applicable provisions of the Companies Act, 2013 in this regard. 39

40 During the financial year ,Four (4) Board Meetings were held on , , and on Details of designation, category of directors, Director Identification Number, Meetings held during respective tenures of Directors, number of Board meetings attended and attendance at last AGM by them during the year are tabulated below: Sl. Directors Category Director Meetings No. of Attendance No. Identification held during Board at the last Number respective meetings AGM (held (DIN) tenures of attended on Directors ) (1) (2) (3) (4) (5) (6) (7) 1. Shri Rajiv Gauba Nominee No Secretary (UD), MoHUA of GoI & Chairman, BMRCL (From to ) 2. Shri Pradeep Singh Managing Yes Kharola Director Managing Director, BMRCL 3. Shri M.K. Sinha Nominee No OSD (UT) & Ex-Officio of GoI Joint Secretary, MoHUA & Director, BMRCL 4. Shri H.S. Anand Nominee No Director (Rolling Stock) of GoI DMRCL & Director, BMRCL 5. Shri K.K. Aggarwal Nominee No Executive Director-Works of GoI (Planning) Railway Board, Ministry of Railways, GoI & Director, BMRCL 6. Dr. M. Ravi Kanth Nominee No Chairman & Managing of GoI Director HUDCO & Director, BMRCL 7. Shri Mahendra Jain Nominee Yes Additional Chief Secretary, of GoK (UDD), GoK & Director, BMRCL (From ) 40

41 Sl. Directors Category Director Meetings No. of Attendance No. Identification held during Board at the last Number respective meetings AGM (held (DIN) tenures of attended on Directors ) (1) (2) (3) (4) (5) (6) (7) 8. Shri I.S.N. Prasad Nominee Yes Additional Chief Secretary, of GoK (Finance Dept.),GoK Director, BMRCL 9. Dr. Ekroop Caur, Nominee No Managing Director, of GoK Bangalore Metropolitan Transport Corporation & Director, BMRCL 10. Shri L.K. Atheeq, Nominee No Principal Secretary to of GoK Hon ble CM, GoK & Director, BMRCL (From ) 11. Shri Vijay Kumar Dhir Whole -Time Yes Director (Project & Director Planning), BMRCL 12. Shri N.M. Dhoke Whole -Time Yes Director (RSE), BMRCL Director Information placed before the Board of Directors, inter alia, includes: All matters, except routine matters and those delegated to the Managing Director by the Board, are being brought before the Board and the same, inter alia, includes the following: Annual budgets and cash flow statements Annual Financial Statements and Board s Report Decisions/Minutes of meetings of Audit Committee and other Committees of the Board New proposals which involve operation of Metro Rail network beyond Phase-1 and Phase-2 All proposals which involve change in technology/technology parameters other than those contemplated in DPR Operational highlights Any significant development in Human Resources/Industrial Relations front Compliance Certificate of statutory provisions Short-term investment of surplus funds Information relating to major legal disputes Other materially important information Other matters as desired/advised by the Board from time to time 41

42 COMMITTEES OF THE BOARD OF DIRECTORS The Board has constituted eight sub-committees which are commensurate with the size and nature of the operations of the Company. During the year , depending upon the requirement, various Committee Meetings were held from time to time. Specific Committees have also been constituted to look into certain Policy and other significant issues of importance to the Company by the Board, for examining and giving its recommendations to the Board. The Board has constituted the following committees: I. Audit Committee II. III. IV. Investment & Resources Committee Corporate Social Responsibility Committee Nomination & Remuneration Committee In addition to the above, the following Standing Committees have also been established by the Board viz.: I. Operations & Maintenance Committee II. III. IV. Project Management Committee Procurement Committee Property Development Committee The Company Secretary is the Secretary to the various Committees of the Board. 1. Audit Committee The constitution and scope etc., of the Audit Committee is in line with the provisions of Companies Act, All the members of Audit Committee are qualified and have insight to interpret and understand financial statements. Composition As on , the Audit Committee comprised of the following members: i. Shri Mahendra Jain, Addl. Chief Secretary, (UDD), GoK & Director, BMRCL, Chairman of the Committee. ii. iii. iv. Shri I.S.N. Prasad, Addl. Chief Secretary, (Finance Dept), GoK & Director, BMRCL, Member of the Committee. Shri L. K. Atheeq, Principal Secretary to Hon ble Chief Minister, GoK & Director, BMRCL, Member of the Committee. Shri K. K. Aggarwal, Executive Director-Works (Planning) Railway Board, Ministry of Railways, GoI & Director, BMRCL, Member of the Committee. Director (Finance), CFO/GM (F&A), GMF (T&R), other Senior Officers of BMRCL, Internal Auditors, Statutory Auditors appointed by C&AG are also invited to the Audit Committee Meetings without conferring any right to vote. 42

43 Meeting and Attendance During the financial year , Three (3) Meetings of the Audit Committee were held on May 28, 2016, August 17, 2016 and on November 16, The details of the Meeting of Audit Committee attended by the members are as under: 2. Investment & Resources Committee The Investment & Resources Committee has been authorized/delegated with some of the powers such as to investments of Project funds in Short Term Deposits, to review the Investment Policies, to look into the issues regarding raising senior debt from multilateral agencies and also to look into any other issues as may be referred by Board. Composition The Investment & Resources Committee comprised of the following members: i. Shri I.S.N. Prasad, Addl. Chief Secretary, (Finance Dept.), GoK & Director, BMRCL, Chairman of the Committee ii. iii. Members of the Audit Meetings held during No. of Meetings Attended Committee respective tenure of Directors Shri Mahendra Jain, Chairman 3 3 Shri I.S.N. Prasad, Member 3 3 Shri L.K. Atheeq, Member 2 2 Shri K.K. Aggarwal, Member 3 LoA LOA Leave of Absence Shri Pradeep Singh Kharola, Managing Director, BMRCL, as Member of the Committee. Director (Finance), BMRCL, as Member of the Committee. Meeting and Attendance During the financial year , (Twelve) 12 Meetings of the Investment & Resources Committee were held. The details of the Meeting of Investment & Resources Committee attended by the members are as under: Members of the Investment & Meetings held during No. of Meetings Attended Resource Committee respective tenure of Directors Shri I.S.N Prasad, Director & Chairman Shri Pradeep Singh Kharola, MD & Member

44 3. Corporate Social Responsibility Committee (CSR Committee) Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development. However, the Company has constituted a CSR Committee of the Board to formulate a suitable CSR Policy for the Company. Composition The Board has constituted a CSR Committee as stipulated in the Companies Act 2013, with the following Members: i. Shri Pradeep Singh Kharola, Managing Director, BMRCL, as Chairman of the Committee. ii. iii. Shri Mahendra Jain, Addl. Chief Secretary, UDD, Govt. of Karnataka & Director, BMRCL, as Member of the Committee. Shri N.M. Dhoke, Director (RSE), BMRCL, as Member of the Committee. 4. Nomination & Remuneration Committee As per Section 178 of the Companies Act, 2013, read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board has constituted Nomination and Remuneration Committee. Composition The Nomination and Remuneration Committee comprised of the following members as on March 31, 2017: i. Shri Pradeep Singh Kharola, Managing Director, BMRCL, as Chairman of the Committee. ii. iii. iv. Shri M. K. Sinha, OSD (UT) & Ex-Officio Joint Secretary, MoUD,& Director, BMRCL, as Member of the Committee. Shri Mahendra Jain, Addl. Chief Secretary, UDD, Govt. of Karnataka, & Director, BMRCL, as Member of the Committee. Shri L.K. Atheeq, Principal Secretary to Hon ble Chief Minister, GoK& Director, BMRCL, Member of the Committee. v. Director (Finance), BMRCL, as Member of the Committee. vi. vii. Shri Vijay Kumar Dhir, Director (P&P), BMRCL, as Member of the Committee. Shri N. M. Dhoke, Director (RSE), BMRCL, as Member of the Committee. 44

45 Meeting and Attendance The Committee met on April 4, 2016 and on December 28, The details of the Meeting of N&R Committee are as under: Members of the N & R Meetings held during No. of Meetings Committee respective tenure of Attended Directors Shri Pradeep Singh Kharola, Chairman 2 2 Shri M.K. Sinha, Member 2 2 Shri Mahendra Jain, Member 1 1 Shri L.K.Atheeq, Member 1 LoA Shri Vijay Kumar Dhir, Member 2 1 Shri N.M. Dhoke, Member 2 1 LOA Leave of Absence 5. Annual General Meeting AGM 8 th AGM 9 th AGM 10 th AGM Date & Time at 5.00 PM at 5.00 PM at Noon Venue MoUD, Nirman Bhawan, MoUD, Nirman Bhawan, 3 rd Floor, BMTC Complex, Dr. Maulana Azad Road, Dr. Maulana Azad Road, Shanthinagar, K.H.Road, New Delhi New Delhi Bangalore Special Resolution (if any) NIL To adopt new Articles of Association of Company in line with the Companies Act, 2013 An Extra Ordinary General Meeting was held on March 9, 2017 to approve and pass a special resolution in terms of Section 71,42 of the Companies Act, 2013 for the purposes of approval to issue Secured, Non-Convertible, Redeemable, Debentures named as Namma Metro Bonds Series II aggregating to Rs.500 Crore in one or more series on private placement basis and the resolution was passed unanimously. 6. Company s Website The Company s Website is All major information pertaining to Company including project, contracts, job, recruitment process and results etc. are given on the website. BMRCL has appointed a Public Information Officer under the Right to Information Act, 2005 and an Appellate Authority under the said Act, the details of which are available on the Official website of the Company. Moreover, the Company hosts all its tenders on the Website to disseminate timely information about all procurements of goods and services mandated under the KTPP Act, The Website also provides all important events, activities and progress of the Metro Rail Project and other significant developments apart from various operation related information for the public and users of metro rail, which is continuously updated. 45 NIL

46 Registered Office Company Secretary CIN : U16286KA1994GOI Shri U. Jagadish Nayak Bangalore Metro Rail Corporation Ltd., Bangalore Metro Rail Corporation Ltd., III Floor, BMTC Complex, K.H. Road, 3 rd Floor, B.M.T.C Complex, K.H. Road, Shanthinagar, Bengaluru Shanthinagar, Bengaluru Ph : /01 Fax : Ph : cs@bmrc.co.in Website : Depots at: Baiyappanahali Peenya Swami Vivekananda Road Metro Train Depot cum Workshop Near NGEF, (Old Madras Road) Peenya Industrial Area 1 st Stage, Peenya Bengaluru Bengaluru ******************* 46

47 CS. S. Kedarnath, B.Sc., LLB, FCS, CAIIB(I) Company Secretary Annexure - I Form No. MR-3 SECRETARIAL AUDIT REPORT [Pursuant to Section 204 (1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] (FOR THE FINANCIAL YEAR ENDED 31 st MARCH, 2017) To, The Members, BANGALORE METRO RAIL CORPORATION LIMITED, Bengaluru We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by BANGALORE METRO RAIL CORPORATION LIMITED, CIN:U16286KA1994GOI (hereinafter called the Company ) having its Registered Office at 3 rd Floor, BMTC Complex, K.H.Road, Shanthinagar, Bengaluru Secretarial Audit was conducted in a manner that provided a reasonable basis for evaluating the corporate conducts statutory compliances and expressing our opinion there on. Based on our verification of the Company s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31 st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31 st March, 2017 according to the provisions of: 1. The Companies Act, 2013 (the Act) and the Rules made there under. 2. The Securities Contracts (Regulation) Act, 1956 ( SCRA ) and the Rules made there under; 3. There were no occasions needing compliance under the provisions of the Depositories Act, 1996 and the Regulations and Bye-laws framed there under; hence not applicable. 4. The following regulations and guidelines prescribed under the Securities and Exchange Board of India Act,1992 ( SEBI Act ): i. There were no occasion requiring compliance under Securities and Exchange Board of India (Substantial Acquisition and takeovers) Regulations, 2011 not applicable. ii. There were no occasion requiring compliance the SEBI (Prohibition of Insider Trading) Regulations, 1992 and SEBI (Prohibition of Insider Trading) Regulations, 2015 as to the requirements of providing necessary information on the Company s website and other necessary disclosures; iii. There were no occasions needing compliance under the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; hence not applicable 47

48 iv. The Company has not issued any securities under ESOP/ESPS schemes attracting the provisions of The SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; v. The Company has passed a resolution authorising issue of Debt Securities attracting the provisions of SEBI (Issue and Listing of Debt Securities) Regulations, 2008; vi. There were no occasion requiring compliance with the requirements of The SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; vii. The Company has not applied for delisting of Equity Shares in any stock exchange and hence compliance under the SEBI (Delisting of Equity Shares) Regulations, 2009 is not mandated; viii. The Company has not brought back any security attracting the provisions of the SEBI (Buyback of Securities) Regulations, 1998; ix. There were no occasions needing compliance under Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under. We further report that in accordance with the guidelines issued by the Institute of Company Secretaries of India (ICSI) on the applicability of industry specific laws as applicable to the Company and based on the information received and records maintained on test check basis, the company has, in our opinion, generally complied with the provisions of the following industry specific laws which are applicable to it vide Central Government Notification No. S.O 2625(E) Dated 16 th October 2009: The Indian Railway Act, The Delhi Metro Railway (Operation and Maintenance) Act, The Delhi Metro Railway General Rules, The Opening of Delhi Metro Railway for Public Carriage of Passengers Rules, The Delhi Metro Railway (Notices of Accidents And Inquiries thereto) Rules,2002 The Delhi Metro (Prohibition of Carriage of Large-Sized Luggage, Carriage Of Offensive And Dangerous Goods in The Metro Railway, Travelling Of Persons Suffering From Infectious And Contiguous Diseases in The Metro Railway And Value, Period of Validity And Such Other Particulars Indicated in The Ticket Issued By The Metro Railway) Rules, The Metro Railways (Construction of Works) Act, We have also examined compliance with the applicable clauses of: a) The Debt Listing Agreement Part B entered into by the Company with NSE (National Stock Exchange) as applicable to the company and report that the company has complied with the necessary requirements. b) The Secretarial Standards SS-1 and SS-2 issued by the Institute of Company Secretaries of India. We further state that during the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, and Standards except as mentioned below: a) The Company is yet to appoint Independent Directors as required under Section 149(6) read with Schedule IV of the Companies Act,

49 The Company has represented that based on the directions from the Administrative Ministry in the Central Government; they have initiated the process of selection and appointment of Independent Directors in compliance thereof. In view of the same, the compliance of Clause VII and Clause VIII of schedule IV of the Companies Act, 2013 will be done in due course. We further report that The Board of Directors of the Company is constituted with proper balance of Executive Directors, Non-Executive Directors except to the extent of Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Three audit committee meetings were held during the year under report. Majority decisions are carried through by majority and minutes of meetings are self explanatory with respect to recording dissenting members views if any. We further report that the Company has developed and implemented adequate systems and processes commensurate with its size and operations to effectively monitor and ensure compliance with applicable laws, rules, regulations and guidelines and also the process and procedure in place to assist in minimizing exposure to risk that threaten the existence of the Company. We further report that during audit period the following events took place which have bearing on the affairs of the Company in pursuance of the above referred laws, rules, regulations etc.: 1. The Company has commenced commercial operations of the First Underground Section (Purple Line) of South India, a 4.8 km stretch from Cubbon Park Station to Krantivira Sangolli Rayanna-Railway Station comprising of 5 stations on 30 th April The Company has passed a special resolution at its Extraordinary General Meeting of its members held on 9 th March 2017, authorising the issue of securities in the form of privately placed Secured, Redeemable, Non-Convertible, Debentures/Bonds upto an aggregate nominal value of Rs.500 Crore pursuant to Sections 42, 71 and other applicable provisions if any, of the Act. Date : Place : Bengaluru 49 For S. Kedarnath & Associates Company Secretaries Sd/- S. Kedarnath Company Secretary C.P. No Note : This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report.

50 Annexure A To, The Members, BANGALORE METRO RAIL CORPORATION LIMITED, Bengaluru Our report of even date is to be read along with this letter. 1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in the secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company including records under Income Tax Act, Central Excise and Customs Law, Central and State Sales Tax Laws. 4. Where ever required, the Company has represented about the compliance of laws, rules and regulations and happening of events etc as applicable from time to time. The operations of the Company is spread over different places and the check was done on a random basis, Reliance was placed on the explanations provided by the officials. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of Management. Our examination was limited to the verification of procedures on test basis. 6. The secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company. For S. Kedarnath & Associates Company Secretaries Sd/- S. Kedarnath Company Secretary C.P. No Date : Place : Bengaluru 50

51 Annexure-II EXTRACT OF ANNUAL RETURN As on the financial year ended on 31 st March 2017 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS : Corporate Identification No: Form No. MGT - 9 Registration Date [DDMMYY] 21/09/1994 Name of the Company Category of the Company Sub Category of the Company Address of the Registered office and contact details Whether Listed Company Name, Address & contact details of Registrar & Transfer Agents (RTA) U16286KA1994GOI Bangalore Metro Rail Corporation Limited Public Company II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY Government Company/ Limited by shares 3 rd Floor, B.M.T.C Complex, K.H. Road, Shanthinagar, Bangalore Ph : , Fax : No Not Applicable All the business activities contributing 10 % or more of the total turnover of the company shall be stated Sl. Name and Description of NIC Code of the % to total turnover No. main products/services Product/service of the company 1. Transport of urban sub-urban including underground and elevated railways Real Estate activities on fee or Contract Basis III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES SL. NAME AND ADDRESS OF CIN/GLN HOLDING/ No. THE COMPANY SUBSIDIARY/ ASSOCIATE NIL 51

52 IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity) i) Category-wise Share Holding 52 Category of No. of Shares held at the No. of Shares held at the % change Shareholders beginning of the year end of the year during the year A. Promoters Demat Physical Total % of Demat Physical Total % of Total Total Shares Shares (1) Indian a) Individual/HUF b) Central Govt.(PoI) c) State Govt.(GoK) d) Bodies Corporates e) Bank/FI f) Any others SUB TOTAL : (A) (1) (2) Foreign a) NRI- Individuals b) Other Individuals c) Bodies Corp d) Banks/FI e) Any other SUB TOTAL : (A) (2) Total Shareholding of Promoter (A)=(A)(1)+(A)(2) B. PUBLIC SHAREHOLDING (1) Institutions a) Mutual Funds b) Banks/FI

53 53 c) Central Govt d) State Govt e) Venture Capital Fund f) Insurance Companies g) FIIS h) Foreign Venture Capital Funds i) Others (specify) SUB TOTAL (B)(1): (2) Non Institutions a) Bodies corporates i) Indian ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital upto Rs.1 lakhs ii) Individuals shareholders holding nominal share capital in excess of Rs. 1 lakhs c) Others (specify) SUB TOTAL (B)(2): Total Public Shareholding (B)= (B)(1)+(B)(2) C. Shares held by Custodian for GDRs & ADRs Grand Total (A+B+C)

54 ii) Shareholding of Promoter Sl. Shareholder s Name Shareholding at the beginning of the year Shareholding at the end of the year % change in No. shareholding during the year No. of Shares % of total % of Shares No. of Shares % of total % of Shares Shares of Pledged/ Shares of Pledged/ the company encumbered the company encumbered to total shares to total shares 1. President of India Governor of Karnataka Total iii) Change in Promoters Shareholding (please specify, if there is no change) 54 Sl. No. Shareholding at the beginningof the year Cumulative Shareholding during theyear 1. At the beginning of the year No. of shares % of total shares No. of shares % of total shares of the company of the company President of India Governor of Karnataka Change in shareholding Total President of India Governor of Karnataka At the end of the year President of India Governor of Karnataka Total iv) Shareholding Pattern of top ten Shareholders: (other than Directors, Promoters and Holders of GDRs and ADRs) Not Applicable, since the shares are equally held by President of India and Governor of Karnataka.

55 v) Shareholding of Directors 55 Sl. Shareholding of each Directors and Shareholding at the Date Increase/ Reason Cumulative Shareholding No. each Key Managerial Personnel beginning of the year Decrease in during the Year shareholding (01/04/2016 to 31/03/2017) No. of % of total No. of % of total shares shares of the shares shares of the Company Company 1. Shri Pradeep Singh Kharola 10-01/04/ No Change /03/ Shri H.S.Anand 10-01/04/ No Change /03/ Shri. K.K.Aggarwal 10-01/04/ No Change /03/ Shri I.S.N. Prasad 10-01/04/ No Change /03/ Shri T.M.Vijay Bhasker 10-01/04/ Transfer /03/ Shri Rajiv Gauba 0-01/04/ Transfer /03/ Shri M.K.Sinha 10-01/04/ No Change /03/ Shri L.K.Atheeq 0-01/04/ Transfer /03/ Shri Mahendra Jain 0-01/04/ Transfer /03/ Shri D.N.Narasimharaju 10-01/04/ Transfer /03/ Note: The Directors hold Shares as nominees of the respective Governments.

56 V) INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for Payment. (Rs. In Lakhs) Particulars Secured Loans Unsecured Loans Deposits Total excluding deposits Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount 86, ,79, ,66, ii) Interest due but not paid 17, , iii) Interest accrued but not due 1, , Total (i+ii+iii) 87, ,79, ,84, Change in Indebtedness during the financial year * Addition i) Principal Amount 1,05, ,05, ii) Interest due but not paid 4, , iii) Interest accrued but not due * Reduction i) Principal Amount (5,805.56) (184.38) (5,989.94) ii) Interest due but not paid iii) Interest accrued but not due (49.31) (49.31) Net Change (5,854.87) 1,10, ,04, Indebtedness at the end of the financial year i) Principal Amount 80, ,85, ,65, ii) Interest due but not paid 22, , iii) Interest accrued but not due 1, , Total (i+ii+iii) 81, ,07, ,89,150.95

57 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL 57 A. Remuneration to Managing Director, Whole-time Directors and/or Manager: SN. Particulars of Remuneration Name of Managing Director/ Whole-time Director Total Amount 1 Gross salary Pradeep Singh Vijay Kumar Dhir N. M. Dhoke Kharola Managing Director Director (P&P) Director (R.S.E) (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, ,55,600 25,13,090 27,99,542 85,68,232 (b) Value of perquisites u/s 17(2) Income-tax Act, ,25,605 3,52,727 3,25,325 9,03,657 (c) Profits in lieu of salary under section 17(3) Income- tax Act, Stock Option 3 Sweat Equity 4 Commission - as % of profit - others, specify 5 Others, please specify Total (A) 34,81,205 28,65,817 31,24,867 94,71,889 (In Rs.)

58 B. Remuneration to other Directors (In Rs.) 58 Sl. Particulars of Name of Directors Total No. Remuneration Amount M.K. Sinha H.S. Anand K.K. M. Ravi Mahendra I.S.N. D.N. Aggarwal Kanth Jain Prasad Narasimha raju 1 Independent Directors Fee for attending board/ committee meetings Commission Others, please specify Total (1) Non-Executive Directors - Fee for attending Board/ Committee Meetings ,000 Commission Others, please specify Total (2) ,000 Total (B)=(1+2) ,000

59 C. Remuneration to Key Managerial Personnel Other than MD/MANAGER/WTD (In Rs.) 59 Sl. Particulars of Remuneration Key Managerial Personnel Total No. Amount 1 Gross salary U. Jagadish Nayak S. Vasudevan Company Secretary Chief Financial Officer w.e.f (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, ,04,798 5,51,596 24,56,394 (b) Value of perquisites u/s 17(2) Income-tax Act, ,94,923 66,692 2,61,615 (c) Profits in lieu of salary under section 17(3) Income-tax Act, Stock Option 3 Sweat Equity 4 Commission - as % of profit 5 Others, please specify Total 20,99,721 6,18,288 27,18,009

60 VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of the Brief Details of Authority Appeal made, Companies Act Description Penalty / [RD / NCLT/ if any Punishment/ COURT] (give Details) Compounding fees imposed A. COMPANY Penalty Punishment NIL Compounding B. DIRECTORS Penalty Punishment NIL Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment NIL Compounding ****************************** 60

61 INDEPENDENT AUDITOR S REPORT TO THE MEMBERS OF BANGALORE METRO RAIL CORPORATION LIMITED Report on the Ind AS Financial Statements We have audited the accompanying Ind AS financial statements of BANGALORE METRO RAIL CORPORATION LIMITED ( the Company ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including other comprehensive income), the statement of changes in Equity and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Ind AS Financial Statements The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in Equity and cashflows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and there as on ableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the Ind AS financial statements. 61

62 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its loss, total comprehensive loss, changes in equity and its cashflows for the year ended on that date. Emphasis of Matters Without qualifying our opinion, we draw attention to the following: a) The Company acquired Land worth of Rs crore as on , of which the Company has titles in its name for Rs crore worth of Land which was acquired from Government organizations and The Company is under process for change of titles for the Land valuing Rs crores (having acquired vide notifications issued by KIADB) as disclosed in Note 2.3 (2). b) Note 2.14 (B)&(C), Sovereign Loans from Japan International Co-operation Agency (JICA) and The Agence Francaise De Development (AFD) outstanding Rs Crore & Rs Crore respectively for Bangalore Metro Rail Project (Project), Government of India arranged Pass Through Assistance (PTA) of these loan disbursements for execution of the project. Exchange rate fluctuations gain/loss has not been provided in the financial statements, as the company has no exposure to the foreign currency and the loan has been received in Indian rupees from Ministry of Urban Development, Govt of India (GOI). Further, company is awaiting for clarification from Government of India in connection with incurring/ sharing of foreign exchange risk between GOI and Government of Karnataka. c) Note 2.14, The company has received Subordinate debt of Rs crores & Rs crores from Government of Karnataka & Government of India respectively. As per Ind AS 109 Financial Instruments, Non-current Financial liabilities to be recognized at fair value, due to uncertainty in period of repayment of the subordinate debt company recognized the debt at historical value. Report on Other Legal and Regulatory Requirements 1) As required by Section 143 (3) of the Act, we report that : (a) (b) (c) (d) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the statement of changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act. 62

63 (e) (f) (g) According to the information and explanations given to us, the company is a Government Company; therefore, the Provisions of Section 164 (2) of the Companies Act, 2013 are not applicable pursuant to the Gazette Notification No. GSR 829(E) dated issued by the Government of India. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A. With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us : i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 2.32 (A) to the financial statements; ii. iii. iv. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and There were no amounts which were required to be transferred, to the Invest or Education and Protection Fund by the Company. The Company has provided requisite disclosures in Note no.2.41 of the financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. 2) As required by the Companies (Auditor s Report) Order, 2016 ( the Order ), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order. 3) The Comptroller and Auditor-General of India has issued directions indicating the areas to be examined in terms of sub-section (5) of Section 143 of the Companies Act, 2013, the compliance of which is set out in Annexure C. Place of Signature : Bengaluru Date : For Manohar Chowdhry & Associates Chartered Accountants Firm Registration Number:001997S Sd/- Ashok Kumar Doddi Partner Membership Number :

64 ANNEXURE A TO THE INDEPENDENT AUDITOR S REPORT (Referred to in paragraph 1 (f) under Report on Other Legal and Regulatory Requirements of our report of even date) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( the Act ) We have audited the internal financial controls over financial reporting of BANGALORE METRO RAIL CORPORATION LIMITED ( the Company ) as of March 31, 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date. Management s Responsibility for Internal Financial Controls The Company s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, Auditor s Responsibility for Internal Financial Controls Our responsibility is to express an opinion on the Company s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company s internal financial controls over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A 64

65 company s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Other Matter Paragraph According to the information and explanations given to us and based on our audit, the following weakness have been identified as on March 31,2017: a) The Company has no adequate policy for review and verification of fixed assets. We suggest to have a standard operating procedure for procurement and recording of fixed assets. b) During our previous year review of Internal Financial controls, we observed and suggested to implement codification of ledger accounts. However, the company is under process of development of schema for ledger codification.we further observed, the need for strengthening the internal checks and controls in the ERP for effective internal controls. Place of Signature : Bengaluru Date : For Manohar Chowdhry & Associates Chartered Accountants Firm Registration Number:001997S Sd/- Ashok Kumar Doddi Partner Membership Number :

66 ANNEXURE B TO THE INDEPENDENT AUDITOR S REPORT Referred to in paragraph 2 under the heading Report on Other Legal & Regulatory Requirement of our report of even date to the financial statements of the Company for the year ended March 31, 2017: (i) (a) (b) (c) According to the information and explanation given to us and records examined by us the Company has maintained the records showing particulars of Fixed Assets except quantitative details & location of the Assets. According to the information and explanation given to us, the company has a program of verification of fixed assets to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Physical verification of Fixed Assets has not been carried out during this financial year. As per the information and explanation given to us, title deeds of immovable properties are held in the name of the Company except for the cases as disclosed in Note no. 2.3 (2). (ii) (iii) (iv) (v) (vi) As explained to us, there are no inventories carried. Consumables procured by the Company have been debited to Statement of Profit and Loss. In our opinion and according to the information and explanations given to us, the Company does not hold any inventory and therefore, clause 3 ii(a), ii(b) of the order relating to physical verification and procedures of physical verification of inventories and clause 3 ii(c) of the order relating to maintenance of proper records of inventories are not applicable. As informed to us, The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the Order are not applicable to the Company and hence not commented upon. According to the information and explanations given to us, the company has not given loan or made Investment or given guarantee and security for the persons specified under provisions of section 185 and 186 of the Companies Act, Therefore the provisions of clause 3 (iv) (a) to (b) of the Order are not applicable to the Company and hence not commented upon. As explained to us, The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable. The Central Government has not prescribed the maintenance of Cost Records under section 148(1) of the Act for any of the services rendered by the company hence not commented upon. 66

67 (vii) (a) (b) (c) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2017 for a period of more than six months from the date on when they become payable. According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of anydispute except as given below. Name Nature of Dues Forum where Period to which Tax Demand Taxes Paid of the dispute is the amount Raised (in Rs.) (Including Statute pending relates Interest) in Rs.) Income Tax Act 1961 Tax on Interest Income High court AY ,57,38,839 17,68,26,315 Earned & AY Tax on Interest Income ITAT AY ,90,49,262 12,54,11,426 Earned Tax on Interest Income CIT (Appeals) AY ,22,18,106 12,62,82,751 Earned Default in Deduction CIT (Appeals) AY ,48,80,000 - of TDS Non- Recovery of TDS ITAT AY ,93,97,400 1,23,00,000 Reimbursement of State taxes wrongly treated as Interest Income from Investments CIT (Appeals) AY ,41,13,863 - (viii) According to the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders during the year. (ix) (x) (xi) As per explanation provided to us, the company raised monies by way of further offer of shares to the existing shareholders or term Loans and the amount were used for the purpose for which they were raised except their temporary deployment pending application. As per the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year. As per the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act

68 (xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company. (xiii) According to the information and explanation given to us, there are no transactions which are required to be complied with section 177 and 188 of Companies Act, 2013 except remuneration to Directors which have been disclosed in Note no.2.38 of the Financial Statements as required by the applicable accounting standards. (xiv) According to the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon. (xv) As informed by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon. (xvi) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon. Place of Signature : Bengaluru Date : For Manohar Chowdhry & Associates Chartered Accountants Firm Registration Number:001997S Sd/- Ashok Kumar Doddi Partner Membership Number :

69 Annexure C Referred to in paragraph 3 under the heading Report on Other Legal & Regulatory Requirement of our report of even date to the financial statements of the Company for the year ended March 31, 2017: Direction : 1) Whether the company has clear title/lease deeds for freehold and leasehold respectively? If not please state, the area of freehold and leasehold land for which title/lease deeds are not available? Our Observation : With respect to title deeds on freehold Land refer point (a) of Emphasis of Matter Paragraph. Below table provides the information about Land value, area and status of title as on March 31,2017. Particulars Amount Rs. Area (in Acres Title In Lakhs. /Sq.mtrs) Education Dept. - Land (Grant in Aid) In process Health Dept. - Land (Grant in Aid) In process Police Dept. - Land (Grant in Aid) 2, In process SWD - Land (Grant in Aid) 2, In process BSNL - Land In process BWSSB - Land In process DEFENCE - Land 3, Titles are in the name of Company KSRTC - Land (KGB :7.5 ACRES) 7, In process KSRTC Land (NEAR MYSORE RD BHEL CIRCLE 0101SQM) In process NGEF - Land 7, Titles are in the name of Company NPCIL - Land 9, Titles are in the name of Company POLICE DEPT-Land In process SWD - Land In process RAILWAY - Land In process SWR-Land for UG 9, In process 69

70 LAND-Acq-Rehab 1,84, ,54, Acquired by way of notification no.28/1 & 28/4 issued by KIADB (Karnataka Industrial Areas Development Board). Total no. of 901 Kathas, out of which 519 Kathas have been changed in the name of BMRCL and 382 Kathas are in the process of change in titles. Land-Acq- 1,34, ,90, Acquired by way of notification Rehabilitation-Ph-2 no.28/1 & 28/4 issued by KIADB (Karnataka Industrial Areas Development Board). Total no. of 1407 Kathas are in the process of change in titles. BMTC - Land In process BWSSB Land - Ph2 2, In process Bangalore University Land - Ph In process As per the information and explanation given to us and examination of records, BMRCL does not have any lease hold land under fixed assets as at the balance sheet date. Impact on Financial Statements : Nil Direction : 2) Whether there are any cases of waiver/write off of debts/loans/interest etc., if yes, the reasons there for and amount involved. Our Observation : As per the information and explanation given to us the company has not waived/written off of debts/loans/interest during the period of the audit. Impact on Financial Statements : Nil Direction : 3) Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from the Govt. or other authorities. Our Observation : According to the information and explanation given to us, The Company is not carrying any inventory 70

71 in the financial statements for the period ended March 31, 2017 and is not maintaining any Inventories with third parties as the Construction of project and supplying of material are given on all-inclusive basis. Hence, risk of materials lying at site is with contractors. With respect to Government Grant, the company received acres of Land at a value of Rs.6329 Lakhs from Government of Karnataka as a grant. The registration of these Lands is under process. Impact on Financial Statements : Nil Place of Signature : Bengaluru Date : For Manohar Chowdhry & Associates Chartered Accountants Firm Registration Number:001997S Sd/- Ashok Kumar Doddi Partner Membership Number :

72 INDIAN AUDIT AND ACCOUNTS DEPARTMENT OFFICE OF THE DIRECTOR GENERAL OF COMMERCIAL AUDIT AND EX-OFFICIO MEMBER, AUDIT BOARD, HYDERABAD DGCA/A/c/Desk/ /BMRCL/1.59/ th September 2017 To The Managing Director, Bangalore Metro Rail Corporation Limited, Bangalore Sub : Comments of the C&AG of India under Section 143(6)(b) of the Companies Act, 2013 on the financial statements of Bangalore Metro Rail Corporation Limited, Bangalore for the year ended on 31 March 2017 Sir, I forward herewith the Nil Comments Certificate of Comptroller and Auditor General of India under Section 143(6)(b) of the Companies Act 2013 on the financial statements of Bangalore Metro Rail Corporation Limited, Bangalore for the year ended on 31 March The date of placing the comments along with Annual Accounts and Auditor s Report before the shareholders of the Company may please be intimated and a copy of the proceedings of the meeting may be furnished. 3. The date of forwarding the Annual Report and Annual Accounts of the Company together with Auditor s Report and comments of the Comptroller and Auditor General of India to the Central Government for being placed before the Parliament may please be intimated. 4. Ten copies of the Annual Report for the year may please be furnished in due course. The receipt of this letter along with the enclosures may please be acknowledged. Yours faithfully, Ecnl : As above (L. TOCHHAWNG) Director General 72

73 COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF BANGALORE METRO RAIL CORPORATION LIMITED, BANGALORE FOR THE YEAR ENDED 31 MARCH 2017 The preparation of financial statements of Bangalore Metro Rail Corporation Limited, Bangalore for the year ended 31 March 2017 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The Statutory Auditor appointed by the Comptroller and Auditor General of India under Section 139(5) of Act is responsible for expressing opinion on the financial statements under Section 143 of the Act based on the independent audit in accordance with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 09 August I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of Bangalore Metro Rail Corporation Limited, Bangalore for the year ended 31 March This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditor and company personnel and a selective examination of some of the accounting records. On the basis of my audit, nothing significant has come to my knowledge, which would give rise to any comment upon or supplement to Statutory Auditor s report. For and on behalf of the Comptroller and Auditor General of India Place : Hyderabad Date : 20 September 2017 (L. TOCHHAWNG) Director General of Commercial Audit & Ex-Officio Member, Audit Board, Hyderabad 73

74 Banglore Metro Rail Corporation Limited Balance Sheet As at 31st March 2017 I ASSETS 1 Non-current assets (Rs. In lacs) Particulars Note As at 31st As at 31st As at 1st No. March 2017 March 2016 April 2015 (a) Property, plant and equipment ,25, ,15, ,65, (b) Capital work-in-progress 2.4 2,86, ,43, ,93, (c) Intangible assets (d) Intangible assets under Development (e) Financial Assets (i) Deposit (f) Deferred Tax Assets (Net) (g) Other non-current assets , , , Current assets (a) Financial Assets Total (A) 14,76, ,90, ,68, (i) Trade receivables (ii) Cash & Cash equivalents 2.9 4, , , (iii) Others Receivables , , , (b) Current Tax Assets , , , (c) Other Current Assets , , , Total (B) 44, ,22, , Total assets 15,20, ,12, ,23,

75 II Particulars Note As at 31st As at 31st As at 1st No. March 2017 March 2016 April 2015 EQUITY AND LIABILITIES 1) Equity (a) Equity Share capital ,96, ,26, ,26, (b) Other Equity (1,10,522.73) (35,399.38) 17, Total equity 3,85, ,91, ,44, ) Non-current liabilities (a) Financial Liabilities (i) Long Term Loans ,44, ,43, ,27, (ii) Other financial liabilities , , , (b) Long Term Provisions (c) Other Non-Current liabilities ) Current liabilities (a) Financial Liabilities (i) Short Term Loans (ii) Trade and Other Payables (iii) Other financial liabilities , , , (b) Short Term Provisions (c) Current Tax Liablities , , , (d) Other Current Liabilities , , , Total liabilities 11,34, ,21, ,78, Total Equity and liabilities 15,20, ,12, ,23, Sd/- Sd/- Pradeep Singh Kharola, IAS N.M.Dhoke For Manohar Chowdhry & Associates Managing Director Director (RSE) Chartered Accountants Firm Registration No: S Sd/- Sd/- Sd/- U. Jagadish Nayak S.Vasudevan Ashok Kumar Doddi Company Secretary Chief Financial Officer Partner Place : Bengaluru Membership No: Date :

76 Banglore Metro Rail Corporation Limited Statement of Profit and Loss for the period ended 31st March 2017 (Rs. In lacs) Particulars Note Year ended Year ended No. 31 st March st March 2016 I Income Revenue from operations , , Other Income , , Total Income 14, , II Expenses Operating expenses , , Employee benefits expenses , , Finance costs , , Depreciation and amortisation expenses , , Other Expenses Total Expenses 60, , III Profit/(loss) before exceptional items (45,756.51) (34,154.41) Exceptional Items - - IV Profit/(loss) before tax (45,756.51) (34,154.41) V Tax expenses Current Tax - - VI Profit for the period (45,756.51) (34,154.41) Attributable to: Equity holders of the Parent (45,756.51) (34,154.41) Non-controlling interests - 76

77 Other comprehensive income : Particulars Note Year ended Year ended No. 31 st March st March 2016 Items that will not be reclassified subsequently to profit or loss : Remeasurement of the net defined benefit liability (31.84) (2.26) VII Total Other comprehensive income / (loss) for the period, net of tax (31.84) (2.26) VIII Total Comprehensive income for the period (45,788.35) (34,156.67) IX Earnings per share (In Rupees) Basic (0.92) (0.80) Diluted (0.92) (0.80) Sd/- Sd/- Pradeep Singh Kharola, IAS N.M.Dhoke For Manohar Chowdhry & Associates Managing Director Director (RSE) Chartered Accountants Firm Registration No: S Sd/- Sd/- Sd/- U. Jagadish Nayak S.Vasudevan Ashok Kumar Doddi Company Secretary Chief Financial Officer Partner Membership No: Place : Bengaluru Date :

78 Banglore Metro Rail Corporation Limited Statement of Changes in Equity for the year ended on 31st March 2017 B. Other Equity (Rs. In lacs) Retained Capital Share Total Earnings Reserve Application (Grant in Aid- Money GOK-Land pending allotment* Balance as on 1st April 2015 (41,800.93) , , Adjustments Prior Period Income/(Expenses) (1,869.82) - - (1,869.82) Fair Value Adjustment - Retention Money Fair Value Adjustment - Security Deposits Fair Value Adjustment - Non Monetary Grant - 6, , Amortization of MRTS Cess Restated balance at the beginning of the reporting period (43,403.25) 6, , , Total Comprehensive Income for the year (34,156.67) (34,156.67) Share Application Money Received 8, , Equity Share Capital Issued (26,448.00) (26,448.00) Dividends - Transfer to General Reserve - Balance as on 31st March 2016 (77,559.92) 6, , (34,855.92) Adjustments Prior Period Income/(Expenses) (543.45) - - (543.45) Restated balance at the beginning of the reporting period (78,103.37) 6, , (35,399.37) - 78

79 Retained Capital Share Total Earnings Reserve Application (Grant in Aid- Money GOK-Land pending allotment* Total Comprehensive Income for the year (45,788.35) (45,788.35) Share Application Money Received 40, , Equity Share Capital Issued (69,670.00) (69,670.00) Dividends - Transfer to General Reserve - Balance as on 31st March 2017 (1,23,891.72) 6, , (1,10,522.72) *Share Application Money pending allotment of shares are amounts invested by the Government of India or Government of Karnataka in the equity share capital of BMRCL out of the budgetary funds and pending allotment shown as Share Application Money. These are retained as share application money pending equal contribution by the concerned Governments to maintain joint venture status of the Company. The matter is being pursued with the State Government for their matching contribution in the Share Capital of the Company. Sd/- Sd/- Pradeep Singh Kharola, IAS N.M.Dhoke For Manohar Chowdhry & Associates Managing Director Director (RSE) Chartered Accountants Firm Registration No: S Sd/- Sd/- Sd/- U. Jagadish Nayak S.Vasudevan Ashok Kumar Doddi Company Secretary Chief Financial Officer Partner Membership No: Place : Bengaluru Date :

80 Banglore Metro Rail Corporation Limited Statement of Cash Flows for the period ended 31st March 2017 Cash flow from operating activities (Rs. In lacs) Particulars Year Ended on Year Ended on 31st March st March 2016 Profit before Tax Income for the year (45,756.51) (34,154.42) Adjustment for: Non-cash adjustment to reconcile profit before tax to net cash flows Prior Period Expenses (543.45) (1,869.82) Fair Valuation Adjustment (183.92) (13.20) Amortization of Grant (59.17) (59.17) Other Comprehensive Income/ (Expenses) (31.84) (2.26) Depreciation and amortisation 36, , Provision for Wealth Tax (included in Rates and Taxes) - - Loss on Sale of Assets (1.65) (0.46) Interest income (53.12) (116.55) Interest expenses 6, , Operating profit before working capital changes (3,714.43) (6,488.21) Movements in working capital : Increase/(decrease) in other long term liabilities - - Increase/(decrease) in short term borrowings - - Increase/(decrease) in Trade payable (26.67) Increase/(decrease) in other current liabilities 3, , Decrease/(increase) in other current assets (10,621.50) 2, Decrease/(increase) in Margin Money Deposits 91, (70,631.18) Decrease/(increase) in Other non current assets (11,663.17) (205.84) Decrease/(increase) in Trade Receivables (21.22) Decrease/(Increase) Long term loans and advances - - Decrease/(increase) Short term loans and advances (2,193.59) (366.66) Increase/(decrease) in Long term provisions - (54.28) Increase/(decrease) in Short-term provisions (159.33)

81 Particulars Year Ended on Year Ended on 31st March st March 2016 Cash generated from/(used in) operations 66, (66,438.63) Direct taxes paid (net of refunds) - - Net cash flow from/(used in) operating activities (A) 66, (66,438.62) Cash flows from investing activities Purchase of fixed assets, including CWIP and capital advances (1,99,950.58) (1,44,755.46) Interest received Net cash flow from/ (used in) investing activities (B) (1,99,897.47) (1,44,638.90) Proceeds from long-term borrowings 99, , Proceeds from Share Capital/Share Application Money 40, , Government Grant Received Other borrowing costs paid (6,494.18) (3,710.75) Net cash flow from/ (used in) in financing activities (C) 1,33, ,10, Net increase/(decrease) in cash and cash equivalents (A + B + C) (85.64) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand With banks - on current account on deposit account - - Total cash and cash equivalents Sd/- Sd/- Pradeep Singh Kharola, IAS N.M.Dhoke For Manohar Chowdhry & Associates Managing Director Director (RSE) Chartered Accountants Firm Registration No: S Sd/- Sd/- Sd/- U. Jagadish Nayak S.Vasudevan Ashok Kumar Doddi Company Secretary Chief Financial Officer Partner Place : Bengaluru Membership No: Date :

82 BANGALORE METRO RAIL CORPORATION LIMITED Notes forming part of Balance Sheet for the year ended March 31, 2017 Nature of operations / Corporate Information Bangalore Metro Rail Corporation Limited ( BMRCL or the Company ) was incorporated under the Companies Act, 1956 and is a Government Company within the meaning of Section 2(45) of the Companies Act, 2013 (Formerly Section 617 of the Companies Act, 1956). It was promoted as a Joint Venture Company by Government of India (GoI) and Government of Karnataka (GoK) to implement the Metro Rail Project in the city of Bangalore. Basis of Preparation of financial statements The financial statements are prepared on accrual basis of accounting under historical cost convention except as otherwise provided in the policy and in accordance with Indian Accounting Standard (Ind- AS) as notified by Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereof as well as with the additional requirements applicable to financial statements as set forth in Companies Act Accounting Policies have been consistenty applied except where a newly issued accounting standards is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. 1. Significant Accounting Policies 1.1 Use of Estimates and Judgment The preparation of the financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities at the end of the reporting period. Estimates and underlying assumption are reviewed on an ongoing basis and revisions to accounting estimates are recognized prospectively. In respect of works contracts, expenditure is booked as Capital Work in Progress on certification by the Engineers Revenue Recognition Fare Box Revenue Fare Box Revenue is recognized on the basis of fare revenue earned for the travel performed by commuters Non Fare Box Revenue The Non Fare Box Revenue (like Royalty from Acquirer Bank for permission to issue combo cards, for advertisement on Smart cards and revenue from advertisement, property development, providing space for events, sponsorship, naming etc.) to the extent accrued 82

83 for the year is recognized as Non-Fare Box Revenue for the year. One time receipts like upfront fee, non-refundable deposit etc. are recognised as Non-Fare Box revenue during the year of receipt Interest Income Interest income is recognized using the effective interest method Expenditure Expenses accruing in the accounting year and ascertainable with reasonable accuracy on the date of financial statements, are provided in the accounts Property, Plant & Equipment Fixed Assets are stated at historical cost less accumulated depreciation and impairment loss if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs and other directly attributable costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Fixed Assets are eliminated from financial statements, either on disposal or when retired from active use Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress Significant components with different useful lives are accounted for and depreciated separately Capitalization of Assets has been done as per the Capitalization policy wherein all the assets which have been put to use, to the extent put to use, have been capitalized Land has been capitalized after completing the process of acquisition and possession Cost of Land includes expenditure on rehabilitation Expenditure on widening/strengthening of road, shifting of utilities etc. directly attributable for brining the assets to its working condition for intended used is added to the cost of the respective assets as per IND AS-16 Property Plant & Equipment. 1.5 Capital Work-in-Progress Income pertaining to construction period such as interest on advances to Contractors, sale of tender documents etc., is set off against expenditure during construction. Administrative and general overheads (net of income) directly attributable to the Project gets allocated and capitalised in the ratio of assets capitalised to the total Capital Work-in-Progress as at the end of the month of commissioning Depreciation on Property, Plant & Equipment (i) Depreciation has been provided on Straight Line Method based on life assigned to each asset in accordance with Schedule II of the Companies Act,

84 (ii) However, in case of assets mentioned below depreciation is provided at the following rates which has been adopted by DMRC where useful life is determined based on Technical Evaluation. Particulars Rolling Stock Escalators and Elevators Useful Life 30 years 30 years (iii) Track work is depreciated on straight line method considering the useful life as 30 years prescribed for Bridges, Culverts, Borders etc. (iv) Fixed Assets costing less than Rs.5,000 are fully depreciated in the year of acquisition Intangible assets and amortization Costs relating to Intangible Assets with a finite useful life like Software licenses are capitalized and amortized over their useful life not exceeding five years Foreign Currency Transactions Foreign currency transactions are recorded in the functional currency, at the exchange rates prevailing on the date of the transaction Monetary items denominated in foreign currencies at the year end and not covered by foreign exchange contracts are translated at year end exchange rates and those covered by forward exchange contracts are determined by their respective contracts. Any exchange difference arising on translation/ settlement of all foreign monetary items including long term foreign currency monetary items to be recognized as income or expense in profit or loss for the period in which they arise except the scope exclusion provided under IND AS 21 based on the voluntary exemption given in IND AS Grant-In-Aid from Government / Local body Grants-in-aid / funds from MRTS Cess received by the Company from the Government of Karnataka (GoK) / BDA / Government of India (GoI) for meeting various expenditure in connection with the Company s project are accounted as deferred Income. On capitalization of related assets, grant received for specific depreciable assets will be recognized in the statement of profit or loss over the useful period of life and in proportion to which depreciation on these assets is provided. Non monetary grants in the nature of promoter s contribution like in case of land granted by Government of Karnataka (GoK) are treated as a part of equity under the head Other Equity 1.10 Provisions and contingent liabilities A provision is recognised when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical valuation and past 84

85 experience. However where the effect of time value of money is material, provision are determined and maintained by discounting the expected future cash flow, wherever applicable. Where discounting is used the increase in the provision due to the passage of time is recognized as finance cost in Profit & Loss Account Any possible obligation that arises from past events and the existence of which will be confirmed only by occurence or non-occurence of one or more uncertain future events not wholly within the control of the company is disclosed under contingent liability. Any present obligation that arises from past events is not recognised becuause it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made, is also disclosed under the contingent liability. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimate. Investments. Investments that are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost or fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution value is made to recognise a decline other than temporary in the value of investments Cash and Cash Equivalents Cash and Cash Equivalents for the purpose of cash flow statement comprise cash at bank and on hand and short term investments with original maturity of three months or less. Cash flow statement is prepared in accordance with the indirect method prescribed under IND AS-7 notified by the Ministry of Corporate Affairs Employee Benefits Defined Contribution Plans Contribution paid / payable to defined contribution plans comprising of provident fund and pension fund are charged to the Statement of Profit and Loss on accrual basis. The Company has no obligation, other than the contribution payable to the funds. Defined Benefit Plans a. Gratuity : All employees of BMRCL excluding deputationists are covered under Bangalore Metro Rail Gratuity Trust Rules by investing the gratuity funds with identified fund manager and contributions in respect of such scheme are recognised as part of employee cost. The liability as at the Balance Sheet date is provided for based on the actuarial valuation, carried out by an independent actuary. b. Leave : The company provides for earned leave and half - pay leave to both regular and contract employees which accrues at 30 days and 20 days respectively for each completed year of service. 85

86 c. Leave Encashment: In case of deputationists, leave salary contribution is remitted to the concerned parent department as per terms of deputation. In case of regular employees the company provides for encashment of earned leave for 15 days in a calender year. In case of Contract Employees there is a provision in the terms of contract to encash the leave balance available at their credit on termination of the contract. However with effect from the contract employees are eligible for encashment of earned leave for 15 days in a calender year. d. Superannuation: Superannuation for employees is generally covered under a contributory plan called Superannuation Fund wherein 20% of Basic+DA or 20% of 70% of consolidated pay is credited to the fund. This 20% consists of 12% as employer s contribution and 8% as employee s contribution. Contribution for this scheme is recognised as employee cost. e. Deputed Employees: Retirement Benefits to the employees deputed from various Government organizations are being governed by the rules of the respective parent organization. Amount accrued towards retirement benefit contribution is recognised at the end of the year based on the terms and conditions of deputation. f. Remeasurements comprising actuarial gains/losses as well as the difference between the return on plan assets and amount included in net interest on the net defined benefit liability / Assets are recognized in the Other Comprehensive Income(OCI), net of income tax. g. Others expenses related to defined benefit plan are recognized as employee cost Borrowing Costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset get capitalized up to the time of commissioning of the project or part thereof and thereafter charged to revenue to the extent assets that are put in to commercial operation Inventories Inventories in the nature of Stores and Spares are valued at the lower of cost and net realizable value. Cost is determined on a weighted average basis and includes other directly associated cost in bringing the inventories to their present location and condition Leases Where the Company is lessee Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight line basis in the net profit over the lease term Where the Company is lessor Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized on 86

87 a straight line basis in the net profit in the statement of profit and loss over the lease term. Costs, including depreciation, are recognized as an expense in the Statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are added to the carrying amount of the leased and recognized as an expense over the lease term on the same basis as lease income Taxes on income Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in statement of profit or loss except to the extent that it relates to items recognized in other comprehensive income or directly in equity in which case it is recognized in other comprehensive income. Current tax is determined in accordance with the provisions of Income Tax Act, Deferred tax is recognized using the balance sheet method, providing for temporary difference between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax is measured at the tax rates that are expected to apply when the temporary differences are either realized or settled, based on the laws that have been enacted or substantively enacted by the end of reporting period. A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the temporary difference can be utilized. The carrying amount of Deferred tax assets are reviewed at each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realized Impairment of assets At each Balance Sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit & Loss account to the extent the carrying amount exceeds the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment Segment Report The Company has only one reportable operating segment, which is running and maintenance of Metro Rail facility in Bangalore and operates in a single operating segment based on the nature of the services, the risk and returns, the organization structure and the internal financial reporting systems. Accordingly, the amounts appearing in the financial statements relate to the Company s single operating segment. BMRCL has commissioned only part of its assets and identificatin of assets and liabilities, revenue & expenditure Reach-wise is not possible at this stage. After completion and commissioning of Phase-1, such exercise shall be carried out to comply with the applicable IND AS. 87

88 1.19. Earnings per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares Financial Instruments Financial Instrument Non Derivative Financial Instruments are classified as:- Financial asset measured at Amortized Cost Fair Value through profit & loss Fair Value through other comprehensive income Financial liability measured at Amortized Cost Fair Value through profit & loss Initial Recognition and Measurement Financial assets and financial liabilities are recognized in the Company s statement of financial position when the company becomes a party to the contractual provisions of the instrument. The Company determines the classification of its financial assets and liabilities at initial recognition. All financial assets and liabilities are initially recognized at fair value plus directly attributable transaction costs in case of financial assets and liabilities not at fair value through profit or loss. Financial assets and liabilities carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the income statement Financial Assets 1. Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows: a. Financial assets are carried at amortized cost A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 88

89 b. Financial assets at fair value through other comprehensive income A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. c. Financial assets at fair value through profit or loss A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss. 2. Derecognition The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset Financial Liabilities 1. Subsequent measurement The subsequent measurement of financial liabilities depends on their classification as follows: Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. 2. Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the income statement. 89

90 Notes to the Standalone Financial Statements for the year ended on 31st March 2017 Note 2.1 First Time Adoption of Ind AS These standalone financial statements of Bangalore Metro Rail Corporation Limited for the year ended on 31st March 2017 have been prepared in accordance with IND AS. This is the Company s first set of Financial Statements in accoradance with IND AS. For the purpose of transition to IND AS, the Company has followed guidance prescribed in IND AS 101- First Time adoption of Indian Accounting Standards with 1st April 2015 as the transition date and IGAAP as the previous GAAP. The transition to IND AS has resulted in changes in the presentation of the Financial Statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 1 have been applied in preparing the standalone financial statements for the year ended on 31st March 2017 and the comparative information. An explanation of how the transition from Previous GAAP to IND AS has affected the Company s Balance Sheet, Statement of Profit & Loss, is set out in Note and Note Exemptions on first time adoption of IND AS availed in accordance with IND AS 101 have been set out in note Note Exceptions availed on first time adoption of IND AS 101 IND AS 101 allows first time adoption certain exceptions from the retrospective application of certain requirement under IND AS. The Company has accordingly applied the following exemptions. 1. IND AS 16 : Property Plant Equipment & Intangible Assets An entity may elect to measure an item of property, plant and equipment and intangible asset at the date of transition to Ind AS at its fair value and use that fair value as deemed cost at that date or may measure the items of property, plant and equiment, intangibles by applying Ind AS retrospectively or use the carrying amount under Previous GAAP on the date of transition as deemed cost. The Company has elected to continue with the carrying amount for all of its property, plant and equipment and intangible assets measured as per Previous GAAP and use that as its deemed cost as at the date of transition. 2. IND AS 21 : The effect of changes in Foreign Currency Rates Long Term Foreign Currency Monetary Items: The Company has opted to continue the policy adopted for accounting for exchange differences arising from translation of long term foreign currency monetary items recognised in the financial items recognised in the financial statements for the period immediately before the beginning of the first IND AS Financial reporting period as per the previous GAAP. 3. IND AS 20 : Accounting for Government Grants and Disclosure of Government Assistance The Company has availed the exception available on first-time adoption i.e. a Company shall apply the requirements in Ind AS 109, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind ASs and shall not recognize the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequently,the company has used its previous GAAP carrying amount of the loan at the date of transition to Ind ASs as the carrying amount of the loan in the opening Ind AS Balance Sheet. 90

91 Note 2.2 Reconciliations The Following reconciliations provides the effect of transition to INDAS from IGAAP in accoradance with IND AS Equity as at 1st April 2015, 31st March Net Profit for the year ended on 31st March 2016 Note Reconciliations of equity as previously reported under IGAAP to IND AS (Rs. In lacs) Particulars As at 31st Impact As at 31st As at 31st Impact As at 31st March 2016 March 2016 March 2015 March 2015 (Indian GAAP) (Ind AS) (Indian GAAP) (Ind AS) 91 I ASSETS 1 Non-current assets (a) Property, plant and equipment 7,08, , ,15, ,58, , ,65, (b) Capital work-in-progress 5,43, (437.17) 5,43, ,93, (437.17) 5,93, (c) Intangible assets (d) Intangible assets under Development (e) Financial Assets (i) Deposit (f) Deferred Tax Assets (Net) (g) Other non-current assets 31, , , , Total (A) 12,84, , ,90, ,63, , ,68, Current assets (a) Financial Assets (i) Trade receivables (ii) Cash and Cash equivalents 95, , , , (iii) Others Receivables 13, , , , (b) Current Tax Assets 4, , , , (c) Other Current Assets 8, , , , Total (B) 1,22, ,22, , , Total assets 14,06, , ,12, ,17, , ,23,021.41

92 Particulars As at 31st Impact As at 31st As at 31st Impact As at 31st March 2016 March 2016 March 2015 March 2015 (Indian GAAP) (Ind AS) (Indian GAAP) (Ind AS) 92 II EQUITY AND LIABILITIES 1) Equity (a) Equity Share capital 4,26, ,26, ,26, ,26, (b) Other Equity (41,524.80) 6, (35,399.38) 12, , , Total equity 3,85, , ,91, ,39, , ,44, ) Non-current liabilities (a) Financial Liabilities (i) Long Term Loans 9,43, ,43, ,27, ,27, (ii) Other financial liabilities 2, (150.20) 2, , (137.01) 1, (b) Long Term Provisions (c) Deferred Income (d) Other Non-Current liabilities 1, (686.01) , (626.84) ) Current liabilities (a) Financial Liabilities (i) Short Term loans (ii) Trade and Other Payables (iii) Other financial liabilities 41, , , , (b) Short Term Provisions (c) Deferred Income (d) Current Tax Liablities 2, , , , (e) Other Current Liabilities 28, , , , , Total liabilities 10,21, (233.59) 10,21, ,77, , ,78, Total Equity and liabilities 14,06, , ,12, ,17, , ,23,021.41

93 Reconciliation of Profit and Reserve between IGAAP and IND AS Profit Reconciliation (Rs. In lacs) Reserve Reconciliation Particulars Year Ended on Year Ended on 31st March st March Net Profit/Reserve under Indian GAAP (36,098.87) (40,507.75) 2 Effect of Transition to Ind AS Grant in Aid for DPR Phase I & II adjusted with CWIP (437.17) MRTS Cess transferred to Liabilities as Deferred Income (856.01) Prior Period Income/Expenses 1, (1,869.82) Fair Value Adjustment - Retention Money Fair Value Adjustment - Security Deposits (2.36) Fair Value Adjustment - Non Monetary Grant 6, Amortization of MRTS Cess Remeasurement of Defined Benefit Obligation Net Profit/Reserve under Ind AS (33,917.11) (37,074.25) 93

94 Note 2.3 :- Property, Plant & Equipment Notes to financial statements for the year ended March 31, 2017 (Rs. In lacs) Note 12 Tangible Assets Land Buildings Road Plant Funiture Vehicles Office Compu Interior Interior Electrical Total Intangible Works and & Fixtures Equip -ters Decoration Decoration Installation Tangible assets Machinery -ments Building Assets Cost or valuation At April 1, , , , , ,12, Additions , , , Disposals At March 31, , , , , ,25, Additions 1,29, ,11, , ,25, Disposals At March 31, ,03, ,81, ,61, , ,51, Additions 30, , , , , Disposals - 1, , At March 31, ,34, ,87, , ,64, , , ,92, Adjustment: Fair Valuation of Non Monetary Grant 6, , Restated at March 31, ,40, ,87, , ,64, , , ,99, Additions 29, ,12, , ,94, Disposals 18, , At March 31, ,51, ,00, , ,15, , , ,75, Additions 1,15, ,93, ,36, ,46, Disposals At March 31, ,67, ,93, , ,52, , , ,22, Depreciation At April 1, , , , Charge for the year - 2, , , Disposals At March 31, , , , Charge for the year 2, , , Disposals Prior period adjustment At March 31, , , , Charge for the year 5, , , Disposals (Reduction) Prior period adjustment

95 Note 12 Tangible Assets Land Buildings Road Plant Funiture Vehicles Office Compu Interior Interior Electrical Total Intangible Works and & Fixtures Equip -ters Decoration Decoration Installation Tangible assets Machinery -ments Building Assets At March 31, , , , Charge for the year 7, , , Disposals (Reduction) Prior period adjustment 1, , At March 31, , , , Charge for the year 12, , , Disposals Prior period adjustment At March 31, , , , , , Net Block At March 31, ,67, ,61, ,92, , , ,25, At March 31, ,51, ,80, ,79, , , ,15, At March 31, ,40, ,76, , ,43, , , ,65, Notes Borrowing Costs has been Capitalised to the extent of Rs.13, lacs for the FY /- 2. BMRCL has taken possession of all the properties acquired. The title of land is deemed to have been transferred to BMRCL once final notification is published in the Gazette. It may be noted that out of 901 properties of Phase I for which khatha change is to be effected in the BBMP records, khathas have been changed in favour of BMRCL in 519 cases leaving balance of 382. It may noted that 1407 properties of Phase II for which khata change is to be effected in the BBMP records, khatas have been changed in favour of BMRCL.The matter is being pursued with BBMP to get the Khatha changed in the remaining cases. Registration of flats purchased from BDA amounting to Rs 6.23 crore is under process. 3. During the year UG-1&2 section, East West Corridor was put into commercial operations on However payment made during the year on assets which were capitalised up to 31 March 2017 have been capitalised. 4. As per clause 5 of GoI letter No.K-14011/34/90-UD.II/MRTS/Metro dated sanctioning Phase I, GoK is required to reimburse state taxes and duties paid by BMRCL for implementation of the Project. Accordingly, reimbursement from GoK is reduced from the cost of assets.

96 Note 2.4 :- Capital Work in Progress Notes to financial statements for the year ended March 31, 2017 (Rs. In lacs) Description As at Additions Transfers/ As at Deletions ) Land & Property Acquisiton , , ) Utility Shifting ) Afforestation/Environment Mgt ) Construction Of Viaduct 30, , ) Construction Of Stations 38, , , ) Construction Of Peenya Depot ) Railway Qtrs Construction For Rehab 1, , ) Construction Of Bldg In Isolation Hospital ) Rehabilitation (Slums) ) Qtrs For O&M Staff ) System Works 1,32, , , , ) Design & Construction Of Underground Tunnel 2,79, , ,04, ,00, ) Track - (Supply Of Rails) 16, , , , ) Automatic Fare Collection 1, , , ) Misc Work Including Other Consultancy 7, , (335.72) 10, ) General Consultancy 26, , , , ) Construction of Cement Concrete Road ) Expenses During Construction Period (Net) 5, (11,645.02) 2, (9,050.67) Sub - Total (A) 5,39, , ,30, ,59, Capital Work in Progress - Phase-II 1) LAND & PROPERTY ACQUISION-PH ) UTILITY SHIFTING - PH ) CONSTRUCTION OF VIADUCT - PH-2-10, , ) CONSTRUCTION OF STATIONS - PH-II , , ) LAND R&R - PH , , ,

97 Description As at Additions Transfers/ As at Deletions ) CIVIL ENGINEERING WORKS - PH , , ) SYSTEM WORKS-PH ) CONSTRUCTION OF UG - PH ) ELECTRICAL WORKS - PH ) Misc. Work Including Other Consultancy (Ph-II): ) MISC. WORK INCLUDING OTHER CONSULTANCY - PH-IIA ) MISC. WORK INCLUDING OTHER CONSULTANCY (PHASE-III) ) DEPOT - PH ) GENERAL CHARGES - PH-2 4, , ) EXPENSES DURING CONSTRUCTION PERIOD (NET)-PHASE 2 (2,101.42) (527.84) - (2,629.27) Sub - Total (B) 3, , , , Total (A + B) 5,43, , ,30, ,86, Capital Work in Progress - Intangible Assets under Development Software Total

98 Note 2.5 Deposit (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 Unsecured, Considered Good Rentals Deposit Security Deposit Total Note 2.6 Deferred Tax Assets (Net) Particulars As at 31st March 2017 As at 31st March Total - - Note 2.7 Other Non Current Assets i) Capital Advances Secured Considered Good Particulars As at 31st March 2017 As at 31st March 2016 Mobilization Advance 20, Acceleration Advance Unsecured, Considered Good Mobilization Advance Interim Payment to Contractors 1, (Rs. In Crore) Advance to KIADB 21, , ii) Security Deposit 6, , iii) Prepaid Expenses iv) Receivable from KSRTC v) Deposit -SWR-Crossing of Railway Land to BMRCL-R1 Extn Ph2 1, vi) Others 12, Total (i)+(ii)+(iii)+(iv)+(v) 63, , Note 2.8 Trade Receivables (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 i) Secured, Considered Good - - ii) Unsecured, Considered Good TOTAL

99 Note 2.9 Cash and Cash Equivalents (Rs. In lacs) Cash and Cash Equivalents i) Balance with banks Particulars As at 31st March 2017 As at 31st March 2016 On current Account Cash in Hand ii) Other Bank Balance Margin Money Deposit Flexi Deposit Deposits with original maturity period of less than three months 3, Term Deposit Deposits with maturity period of less than three months - 15, Deposits with maturity period of more than three months 1, , , , Total (i)+(ii) 4, , Note 2.10 Other Receivables Particulars As at 31st March 2017 (Rs. In lacs) As at 31st March 2016 Interest Receivable on Fixed Deposits Recoverable From BBMP 7, , Others 5, , Total 13, , Note 2.11 Current Tax Assets Particulars As at 31st March 2017 (Rs. In lacs) As at 31st March 2016 Advance Tax (Various Years) 3, , TDS Receivables 2, , , ,

100 Note 2.12 Other Current Assets (Rs. In lacs) Short term loan and Advance (Unsecured considered good) Particulars As at 31st March 2017 As at 31st March 2016 Advance to Employee Other Short term Advance (Unsecured considered good) Prepaid Expenses Advance FBT Wealth Tax Advance to others 3, , Capital Advance i) Secured, Considered Good 3, , Mobilization Advance 5, , Material Advance Special advance Adhoc Payment to Contractor (80% of bills as per Contract term) 2, , ii) Unsecured, Considered Good 8, , Special advance 5, , Mobilisation Advance (Unsecured) 2, , , TOTAL 19, ,

101 Note 2.13 Equity Share Capital (Rs. In lacs) Particulars Authorized Share Capital Equity Shares As at 31st March As at 31st March As at 31st March 2017 (Ind AS) 2016 (Ind AS) 2015 (Ind AS) 12,00,00,00,000 (Previous Year - 12,00,00,00,000) equity shares of Rs 10 each 12,00, ,00, ,00, Issued, Subscribed and fully paid-up shares 4,96,29,80,000 (March 31,2016: 4,26,62,80,000) equity shares of Rs.10/- each paid up 4,96, ,26, ,26, Total 4,96, ,26, ,26, Further Notes: 1. Terms/ rights attached to equity shares The Company has only one class of shares i.e. equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holders of equity shares would be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. 2. Details of shareholders holding more than 5% shares in the Company (Rs. In lacs) Equity shares of Rs.10/- each fully paid As at March 31, 2017 As at March 31, 2016 As at March 31, 2015 No.of % of No.of % of No.of % of shares holding shares holding shares holding Government of India (GoI) 2,48,14,90, % 2,13,31,40, % 1,63,49,10, % Government of Karnataka (GoK) 2,48,14,90, % 2,13,31,40, % 1,63,49,10, % Total 4,96,29,80, % 4,26,62,80, % 3,26,98,20, % As per records of the Company, including its Register of Shareholders/ Members, the above shareholding pattern represent legal ownership of shares as at balance sheet date, including that of nominees of GoI/GoK. 3. Reconciliation of Number and amount of share capital outstanding at the beginning and at the end of the reporting period. As at March 31, 2017 As at March 31, 2016 As at March 31, 2015 Particulars No.of shares Amount No.of shares Amount No.of shares Amount Shares outstanding at the beginning of the year 4,26,62,80, ,26, ,26,98,20, ,26, ,26,98,20, ,26, Shares Alloted during the year 69,67,00, , ,64,60, , Shares bought back during the year Shares outstanding at the end of the year 4,96,29,80, ,96, ,26,62,80, ,26, ,26,98,20, ,26,

102 Note 2.14 Long Term Loans (Rs. In lacs) Secured Particulars As at 31st March 2017 As at 31st March 2016 HUDCO Loan 44, , Namma Metro Bonds Series - I 30, , Unsecured Interest free Sub ordinate Debt from GOK 3,94, ,34, Senior Debt from GOK 13, , Interest free Sub ordinate Debt from GOI 1,41, ,39, Pass Through Assistance-GOI-JICA 3,05, ,57, Pass Through Assistance-GOI-AFD 1,13, ,18, KUIDFC Loan for underpass & parking (MCRF) KUIDFC Loan for chain link fencing (MCRF) KUIDFC Loan-Mega City Scheme Revolving Fund Total 10,44, ,43, A) Interest Free Sub-ordinate Debt from GoI and GoK Approval was accorded vide GO.No.UDD 144 PRJ 2001 dated March 24,2005 and GoI communication No.K-14011/34/ 90-UD.II/MRTS/Metro dated for undertaking BMR Project. The Government of India and Government of Karnataka being joint promoters, contribute Interest free Subordinate Debt, depending on the budgeted expenditure submitted by the Company for the forthcoming year and respective budgetary allocations. The repayment schedules of these loans are yet to be fixed by GOI/GOK. As per the Memorandum of Understanding (MoU) between Government of India, Government of Karnataka and BMRCL is required to make repayment of subordinate debt only after repaymet of entire Senior Term Debt availed for the project. In view of the uncertainity of repayment period, the company has not considered necessary for fair valuation of Government subordinate debt. B) The Japan International Co-operation Agency(JICA) has sanctioned two loans for the Bangalore Metro Rail Project, the first loan is for 44,704 Million JPY at interest rate of 1.3% p.a. (semi-annually) plus service charges of 0.1% with a repayment period of 30 years (including a grace period of 10 years) as per loan agreement dated The second loan is for 19,832 Million JPY at interest rate of 1.4% p.a. (semi-annually) (except for consultancy service for which the rate is 0.01% p.a.) plus commitment charges of 0.1% p.a. with a repayment period of 30 years (including a grace period of 10 years as per loan agreement dated Records regarding JICA loan disbursements, interest accrued and service charges are maintained by the office of Controller Aid Accounts and Audit (CAAA),Government of India. As per the records of CAAA, JICA has released Rs. 3,06, lacs up to which includes Rs.14, lacs towards interest /commitment charges (including interest/ 102

103 commitment charges accrued but not due) and Rs lacs towards service charges accrued up to March 31, However, GoI has released Rs. 3,16, lacs up to to BMRCL out of JICA loan as PTA. Both the above JICA loans are Sovereign loans and therefore Government of India is arranging Pass Through Assistance (PTA) for execution of the works. The said PTA of Rs.3,16, lacs received up to March 31, 2017, has been shown under Long Term Borrowings as Unsecured loans and necessary interest provision has been made and disclosed under Other Current Liabilities for the amount of PTA received up to March 31,2017. BMRCL is not required to bear the amount of exchange variation. This matter has been referred to GoI vide letter No. BMRCL/004/FIN/2012/JICA dated and the same is under examination by GoI. However, in any case the exchange variation amount, during project implementation period need not be borne by BMRCL as per clause 6 of GoI communication no. K-14011/34/90-UD.II/MRTS/Metro dated sanctioning the project which is extracted below: Any cost escalation due to statutory levies and duties, exchange rate variation and price escalation within the approved project time cycle will be shared equally between the project promoters In view of the above, BMRCL is not required to bear the amount of exchange variation. Pending clarification from GoI on sharing the foreign exchange variation between GoI and GoK, the company has started repayment of loan instalment along with interest of JICA-IDP- 171 due from March 2016 and interest on AfD loan due from 2014 from Financial Year , based on the decision taken in the Audit Committee Meeting in November-2016, wherein it is decided to make the payment of installment amount including interest computed based on the amounts actually drawn in the case of JICA. The CAAA has not raised any demand in this regard. C) The Agence Francaise De Development (AFD) has sanctioned loan for the Bangalore Metro Rail Project for Euro-110 million for Phase-1 at Floating interest rate of 6 months EURIBOR + margin (1.50% p.a) with a repayment period of 20 years (including 5 years of grace period on principal) as per Credit Facility Agreement dated Records regarding AFD loan disbursements and interest accrued is maintained by the office of the CAAA, Government of India. Entire loan proceeds of Euro million have been released with respect to Phase-1 loan.as per CAAA Accounts Rs.87, lacs towards AFD loan, Rs.4, lacs towards interest accrued and other payments are shown under this loan accounts for the period up to March GoI, has released Rs.87, lacs as PTA towards entire loan proceeds of AFD and interest of Rs.4, lacs has been provided in the books upto The Agence Francaise De Development (AFD) has sanctioned a loan of Euro 200 million for Phase-2 of the project with a repayment period of 15 years (including 5 years of grace period on principal) as per Credit Facility Agreement dated /Amendment dated ). For each drawdown BMRCL may select a fixed interest rate or a floating interest rate which shall apply to the amount set out in the relevant drawdown request as provided in clause 4 of the Agreement. With respect to the second AFD loan towards Phase-2, GoI has released Rs.30, lacs as PTA as on and interest of Rs lacs has been provided upto

104 D) Housing and Urban Development Corporation Limited (HUDCO) has sanctioned a loan for an amount of Rs 70, lacs (utilised loan amount of Rs.65, lacs) carrying interest rate applicable on the release/due date of payment. The rate of interest is HUDCO s Reference Rate plus 0.75% p.a. The interest rate is subject to reset at the interval of every three years. The total tenure of the loan is 15 years including a moratorium period of three years. The loan is repayable in 24 half yearly installments commencing from November, 2014 as per the amortization schedule of the loan agreement. The aforesaid loan is secured by first charge on all the present and future Immovable Properties, Assets, Movable Properties, Intangibles, Receivables and Operating cash flows and Uncalled equity of the Company. E) Karnataka Urban Infrastructure Development and Finance Corporation Ltd (KUIDFC) loan is for an amount of Rs lacs carrying compound interest at the rate of 4.50% p.a or such other rate(s) as may be fixed by State Level Sanctioning Committee (SLSC) or KUIDFC from time to time. The tenure of the loan including moratorium period is 10 years. The loan is repayable in 32 quarterly installments commencing from March, 2012 as per the amortization schedule of the loan agreement. The security may be imposed by SLSC in the form of State Government guarantee, Bank Guarantee, Escrowing of revenue funds or authorization to Urban Development Department, Government of Karnataka for deduction from eligible State Financial Corporation(SFC) grants or other grants as applicable. Second loan is sanctioned for an amount of Rs lacs during Financial Year vide agreement dated 5th March, 2016, carrying compound interest at the rate of 4.50% p.a or such other rate(s) as may be fixed by State Level Sanctioning Committee (SLSC) or KUIDFC from time to time. The tenure of the loan including moratorium period is 10 years. The loan is repayable in 32 quarterly installments commencing from June, 2017 as per the amortization schedule of the loan agreement. The security may be imposed by SLSC in the form of State Government guarantee, Bank Guarantee, Escrowing of revenue funds or authorization to Urban Development Department, Government of Karnataka for deduction from eligible State Financial Corporation(SFC) grants or other grants as applicable. The disbursement of loan is in three installments of Rs lacs, Rs lacs and Rs lacs respectively and Rs lacs has been drawn as on Another loan for an amount of Rs 3, lacs during Financial Year vide agreement dated 19th October, 2016, carrying compound interest at the rate of 4.50% p.a or such other rate(s) as may be fixed by State Level Sanctioning Committee (SLSC) or KUIDFC from time to time. The tenure of the loan including moratorium period is 10 years. The loan is repayable in 32 quarterly installments commencing from December, 2018 as per the amortization schedule of the loan agreement. The security may be imposed by SLSC in the form of State Government guarantee, Bank Guarantee, Escrowing of revenue funds or authorization to Urban Development Department, Government of Karnataka for deduction from eligible State Financial Corporation(SFC) grants or other grants as applicable. F) Namma Metro Bonds Series 1 The Company has raised funds of Rs.30, lacs through private placement of Secured, Non Convertible, Non Cumulative redeemable, Taxable Namma Metro Bonds Series 1, having coupon rate of 8.79 % per annum payable semi annually, at Rs lacs each cash at par on 23/12/2014. The loan is secured by Pari-Passu charge on land and building of the company comprising of Jalahalli, Dasarahalli and Nagasandra stations of Reach -3B. 104

105 Note 2.15 Other Financial Liabilities (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 Contractor Deposits 3, , Total 3, , Note 2.16 Long Term Provisions Particulars As at 31st March 2017 As at 31st March 2016 Provision for Income Tax - - Provision for FBT - - Provision for Wealth Tax - - Provision for Employee Benefits - - Superannuation Payable - - Total - - Note 2.17 Other Non Current Liabilities (Rs. In lacs) Deferred Income (i) Particulars As at 31st March 2017 As at 31st March 2016 Grant in aid (Government of Karnataka) (a) Opening Balance - (0.00) (b) Transferred during the year - (c) Closing Balance - (0.00) (ii) Grant in aid (Government of India-DPR- Phase II) (a) Opening Balance - (0.00) (b) Received during the year - (c) Closing Balance - (0.00) (iii) MRTS Cess (a) Opening Balance (b) Transferred to Retained Earnings (59.17) (59.17) (c) Closing Balance (iv) Grant from SUTF (State Urban Transport Fund) (a) Opening Balance - - (b) Received during the year (c) Closing Balance Total (i)+(ii)+(iii)+(iv)

106 Note 2.18 Short Term Loans Particulars As at 31st March 2017 As at 31st March Total Trade & Other Payables (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 (a) Total outstanding dues of micro and small scale Industrial Undertaking(s). (Due over 45 days Rs. Nil/-) - - (b) Total outstanding dues of Medium scale Industrial Undertaking(s). (Due over 45 days Rs. Nil/-) - - (c) Others Total Other Financial Liabilities (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 Outstanding Expenses (Cheque Issued) Interest payable on PTA-AFD 4, , Interest payable on PTA-JICA 17, , Interest accrued but not due on HUDCO Loan Interest accrued but not due on Namma Metro Series 1 - Secured Current maturities of long term (HUDCO Loan) - Secured 5, , Current maturities of long term (JICA Loan) 10, , Current maturities of Pass Through Assistance - GOI-AFD 4, Current maturities of KUIDFC Loan for chain link fencing (MCRF) Current maturities of long term (KUIDFC Loan) Total 44, ,

107 Note 2.21 Short Term Provisions (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 Provision for FBT Provision for Wealth Tax Provision for Employee Benefits Total Note 2.22 Current Tax Liabilities Particulars As at 31st March 2017 As at 31st March 2016 Provision for income tax 2, , Total 2, , Note 2.23 Other Current Liabilities Particulars As at 31st March 2017 As at 31st March 2016 Duties and Taxes , Non Trade Payables 35, , Advance from customers & Others Deferred Income(Government Grant) Expenses Payable Total 37, , Note 2.24 Revenue from operations (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 Fare Box Revenue 11, , Other Operating Income ATM License Fee Royalty Received from Banks Combo cards Income from property development 1, , Upfront Fee Total 13, ,

108 Note 2.25 Other Income (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 O&M Recruitment Fees Interest income on Bank Fixed deposits Interest from BBMP Profit on Sale of Asset Administrative Charges - Labour Cess Liquidity Damage Grant Received JRCP 7.01 Miscellaneous income Fair Value Adjustment - Finance Income Grant in Aid- Amortization Income from Technical Trainee Tender document fees Total 1, , Note 2.26 Operating expenses (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 Power and fuel 3, , Insurance Rates and Taxes Repairs and Maintenance :- - Staff Quarters Computer and Software Vehicles Others House keeping, Security and TOM Charges 6, , Total 10, ,

109 Note 2.27 Employee benefits expenses (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 Salaries, wages allowances & benefits 5, , Contribution to Provident and other funds Staff Welfare expenses Total 6, , Note 2.28 Finance Cost (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 Interest Expenses-Financial Institution 1, , Interest Expenses-PTA 3, , Interest Expenses - Namma Metro Bonds - Series Fair Value Adjustment- Finance Expenses Total 6, , Note 2.29 Depreciation and Amortization Expenses (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 Depreciation-Tangible Assets 36, , Amortization-Intangible Assets Total 36, ,

110 Note 2.30 Other Expenses (Rs. In lacs) Particulars For the year ended For the year ended on March 2017 on March 2016 Recruitment Expenses Interest on Income Tax/Service Tax Statutory Audit Fees Legal and Professional Fees Books and Periodicals Postage and Telegram Printing and Stationery Travelling and Conveyance Telephone Charges Bank Charges Office Maintenance Expenses Sponsorship and Exhibition Inauguration Expenses (Reach - 2) Inauguration Expenses (Reach - 3B) Inauguration Expenses (Reach - UG2) Others Total Payment to Auditor (Rs. In lacs) Particulars As at 31st March 2017 As at 31st March 2016 As auditor : Statutory Audit fees (Inclusive of Service Tax) A) Contingent Liabilities not provided for: Particulars As at 31st March 2017 As at 31st March 2016 a) On account of Guarantees given by Banks b) On account of Letter of Credit opened by Banks 1, , c) Disputed Income Tax Demand including Interest 11, , d) Legal fees payable on pending cases , , The Company has preferred counter claims of Rs.78, lacs against the arbitration claims made by some of the contractor pertaining to Phase 1, amounting to Rs.65, lacs.

111 B) Capital and other Commitments (Rs. In lacs) Capital Commitments As at 31st March 2017 As at 31st March 2016 Estimated amount of Contracts remaining to be executed on Capital accounts 222, , Additional information (Rs. In lacs) CIF value of imports As at 31st March 2017 As at 31st March 2016 Capital Goods 2, , Expenditure in Foreign Currency (On Payment Basis) (Rs. In lacs) As at 31st March 2017 As at 31st March 2016 a) Foreign Travel-Directors b) Foreign Travel-Others c) Professional fees paid to General Consultants , d) Contractors-Capital Creditors 17, , , , Disclosure in respect of IND AS-12- Accounting for taxes on Income Deferred Tax : Deferred Tax asset has not been recognised as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised Disclosure in respect of IND AS-17 Leases i) BMRCL has taken on lease/rent premises for employees. These lease arrangements are usually renewable on mutually agreed terms but are cancellable. During the year BMRCL has paid lease rent (net of recoveries) in case of staff amounting to Rs lacs (Financial year Rs lacs) ii) BMRCL has taken land on temporary lease / rent for implementation of the Project and during this Accounting period, Rs lacs (Financial year Rs lacs) has been paid towards lease / rent. iii) BMRCL has given land on temporary lease / rent to contractors and Rs lacs (Financial year Rs lacs) is the rent realized and accounted in the year

112 2.35. Indian Accounting Standard (IND AS)-19 Employee Benefits. A. Defined Benefit Plan:- Gratuity: All employees of BMRCL including deputationists are covered under Bangalore Metro Rail Gratuity Trust Rules by investing the gratuity funds with identified fund manager and contributions in respect of such scheme are recognised as part of employee cost. The liability as at the Balance Sheet date is provided for based on the actuarial valuation, carried out by an independent actuary. B. Other Long Term Employee Benefits: Leave Encashment:Provision for Leave Encashment for the year amounting to Rs lacs (Previous Year Rs lacs) up to 31st March 2017 has been made on the basis of actuarial valuation for the employees. Description of Risk Exposures:- Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risk as follows- Salary Increases - Actual Salary increases will increase the Plan s liability. Increase in salary increase rate assumption in future valuations will also increase the liability. Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability. Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan s liability. Mortality & Disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities. Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan s liability. Actuarial Assumptions : Financial Assumptions The Financial & Demographic assumption on annual basis used for valuation as at the valuation date are shown below. The assumption as at the valuation date is used to determine the present value of defined benefit obligation at that date. Particulars As at 31st March 2017 As at 31st March 2016 i. Discounting Rate ii. Salary Escalation

113 Demographic Assumption Particulars As at 31st March 2017 As at 31st March 2016 Mortality Rate (as % of IALM ( ) % % Disability Rate (as % of above Mortality Rate) 5.00% 5.00% Withdrawal Rate 4.53% 1.00% Normal Retirement Age 60 years 60 years Average future service Actuarial Method Projected Unit Credit (PUC) actuarial method to assess the plan s liabilities of exit employees for retirement, death-in service and withdrawals (Resignations/Terminations). Under the PUC method a projected accrued benefit is calculated at the beginning of the period and again at the end of the period for each benefit that will accrue for all active member of the plan. The projected accrued benefit is based on the plan accrual formula and up in service as of the beginning or end of the period, but using member s final compensation, projected to the age at which the employee is assumed to leave active service. The plan liability is the actuarial present value of the projected accrued benefits as on the date of valuation. The summarized position of various defined benefits recognized in the Statement of profit and loss, statement of other comprehensive income and Balance Sheet and the present value status are as under :- Expenses recognized in Statement of Profit or Loss (Rs. In lacs) Particulars Gratuity Valuation as at 31/03/2017 Current Service Cost Past Service cost Interest cost on benefit obligation - Expected return on plan Assets (37.85) Net actuarial (gain)/loss recognized in the year Expenses recognized in the Profit and Loss a/c Expenses recognized in Statement of Other Comprehensive Income (Rs. In lacs) Particulars Gratuity Valuation as at 31/03/2017 Actuarial gain/ (loss) for the year on DBO (31.84) Unrecognized actuarial gain/(loss) at the end of the year (31.84) 113

114 The amount recognized in the Balance Sheet (Rs. In lacs) Particulars Gratuity Valuation as at 31/03/2017 (i) Present value of obligation as at 31/03/ (ii) Fair value of plan assets as at 31/03/ Unfunded Liability/ Provision in Balance Sheet (102.08) Disclosure in respect of IND AS-21 The effects of change in Foreign Exchange rates. The effect of Foreign Exchange fluctuation during the year is as under: i) The total amount of exchange difference (Foreign exchange gain) as on is Rs.1, lacs (Financial year Rs.2, lacs ) ii) The amount of exchange differences (foreign exchange gain/(loss) to the carrying amount of Fixed Assets as on is Rs.1, lacs (Financial year Rs. ( lacs) (iii) The net of gain of Rs lacs as on (Financial year gain of Rs.1, lacs as on ) is taken to CWIP Disclosure in respect of IND AS-23 Borrowing Cost During the year, an amount of Rs.13, lacs (Financial Year Rs.4, lacs) has been capitalized and amount of Rs.6, lacs has been charged to Revenue in line with the Accounting policies on Borrowing Costs. Interest earned on loan funds of Phase-2 amounting to Rs.7, lacs (FY Rs.2, lacs) has been credited to CWIP - Phase Disclosure in respect of IND AS-24 Related Party Transactions The Company is a Government Company within the meaning of Section 2(45) of the Companies Act, 2013 (Formerly Section 617 of the Companies Act, 1956) and hence disclosures as per IND AS - 24 Related party Tranasactions is as under: a) Key Managerial Persons: 1 Sri. Pradeep Singh Kharola Managing Director 2 Sri. Vijay Kumar Dhir Director (P&P) 3 Sri. N.M Dhoke Director (RSE) 4 Sri. U.Jagadish Nayak Company Secretary 5 Sri. S.Vasudevan Chief Fianancial Officer 114

115 b) Disclosures of transactions of Bangalore Metro Rail Corporation Ltd. (Rs. In lacs) Sl. No. Particulars Salaries & Allowances Contribution to Fund Other Benefits Total Disclosure in respect of IND AS - 33 : Earning per Share Numerator Particulars As at 31st March 2017 As at 31st March 2016 Profit after tax as per Profit and Loss Account (Used as Numerator) (Rs. In lacs) (45,788.35) (34,156.67) Denominator - Number of Equity Shares (Face value of Rs. 10/- each) 4,266,280, ,266,280, Number of Shares allotted during the year 696,700, Weighted Average number of equity shares for calculating 4,962,980, ,266,280, Basic Earnings Per Share (0.92) (0.80) - Weighted Average number of equity shares for calculating 4,962,980, ,266,280, Diluted Earnings Per Share (0.92) (0.80) Disclosure in respect of IND AS-36 - Impairment of Assets The Assets have long life and no indication exists for the impairment of assets,during the year Disclosure on Specified Bank Notes During the year, the Company had specified Bank Notes (SBNs) or other denomination notes as defined in the MCA notification, G.S.R.308(E), dated March 31,2017. The details of SBNs held and transacted during the period from November 8, 2016 to December 30,2016, the denomination-wise SBNs and other notes as per the notification are as follows: Particular SBNs Other Total denomination notes (Rs. In lacs) Closing cash in hand as on Add : Permitted receipts , Less : Permitted payments - (0.52) (0.52) Less : Amount deposited in Banks (740.17) (890.63) (1,630.80) Closing cash in hand as on

116 For the purposes of this clause, the term Specified Bank Notes shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407 (E), dated November 8, Segment Reporting (Ind AS 108) The company s principle business is running & maintenance of Metro Rail Facility in Banglore. The Company operates within India and does not have operations in economic environments with different risks and returns. Hence, it is considered operating in single geographical segment. Information about major customers No single customer contributed 10% or more to the company s revenue for both year ended on and year ended on Para of Exposure Draft on Guidance note on Division II - IND AS Schedule III to the Companies Act, 2013 issued by institute of Chartered Accountants of India (ICAI) requires for entity to replace the gross block appearing as on 1st April, 2015 with the carrying amount treated as deemed cost as per Para D6 of IND AS 101 First time Adoption of Indian Accounting standards. As the said guidance note is not yet notified by ICAI, The Company has not implemented it pending notification The total cost of land and properties acquired through Karnataka Industrial Area Development Board (KIADB) for Bangalore Metro Rail Project upto 31st March 2017 for Phase-1 is Rs.1,52, lacs (FY Rs.1,49, lacs and for Phase-2 is Rs.1,32, lacs (FY Rs.22, lacs).the balance amount of Rs.21, lacs (FY Rs.25, lacs shown under advances (Note No.14 (ii)) will be transferred to land as and when acquisition, payment of compensation and possession of land and property are completed. The High Power Committee in its 28th meeting held on has fixed the service charges payable to KIADB at 1% of compensation paid to the beneficiaries with regard to land acquired for Phase-2 on behalf of BMRCL (GO reference No. CI 647 SPQ 2013, Bangalore dated In respect of land acquired for Phase-1 the service charges payable to KIADB has been considered at 4% of compensation paid to the beneficiaries. In addition to the above, the land and properties acquired other than through KIADB for Phase I is of the order of Rs.Nil (FY Rs.39, lacs, Phase II is of Rs.Nil (FY Rs.2, lacs).the cost of such land and properties acquired has been taken to fixed assets. 116

117 2.45. Land measuring 6 Acres 22 Guntas at Peenya has been handed over to KSRTC, as per the decision of the 24 th HPC Meeting held on 9 th January 2013 held under the Chairmanship of Chief Secretary to Government of Karnataka.The rates of this land was fixed at Rs lacs per acre in the meeting held on 21 st January 2013 under the Chairmanship of Principal Secretary to Government, Finance Department which works to Rs lacs. However the title of the said property is to be transferred to KSRTC Rs.7, lacs (FY Rs.7, ) including interest of Rs.1, (FY Rs.1,031.95) has been shown as receivable from BBMP BMRCL has entered into a concession agreement with M/s. Mantri Infrastructure Private Limited for developing, operating, maintaining and transfer of the commercial tower above metro station under Public Private partnership (PPP) model for a period of 99 years commencing from the Revenue commencement date The company has preferred claims for the Deemed Export Benefits from DGFT under the then prevailing Foreign Trade Policy ( ). The claims are pending with DGFT. Considering the complex and complicated nature of claims they are accounted on receipt basis as a prudent accounting practice As per the information available with the Company, there are no dues outstanding towards enterprises covered under Micro Small and Medium Enterprises Act, 2006 for a period exceeding 45 days The provisions of Rule 2 (C )(vii) of the Companies (Acceptance of Deposits) Rules, 2014 will not apply to these amounts as these are amounts received from Government and are therefore exempt from being treated as Deposits in terms of Rule: 2 (C ) (i) of the said Companies (Acceptance of Deposits ) Rules, The requirement of contribution towards Corporate Social Responsibility as contemplated under Section 135 of the Companies Act, 2013 does not apply to BMRCL as it has been incurring losses since its inception and is not required to make any contribution towards CSR as at present. However, the Company has already constituted a CSR Committee of the Board in order to draft and oversee a CSR Policy Since the Company is not making profits Debenture Redemption Reserve has not been created Other income includes Rs lacs (Previous Year Rs lacs) being the amount transferred from Grants-in-aid received (as per accounting policy note no: 3.10) 117

118 2.54. Disclosure of Prior Period Items Sl. Particulars Period in Period to (Rs. In lacs) No. which expense which expense accounted pertains Expenditure 1 Rent Expenses License Fees Maintainance Fees Depreciation , Others Maintainance Fees Adminstartion charges Royalty fees reversed Others Total 2, Income 1 Rent Income Misce. Income Others License Fees Others Total

119 2.55. Fair Value Measurement A number of the Company s accounting policies and disclosures require the determination of fair value, for both financial as well as non assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy Based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below: Level 1: unadjusted quoted prices in active markets for identical assets and liabilities Level 2: Inputs other than prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3: Unobservable inputs for the asset or liability For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy. BMRCL has considered one year Marginal Cost of Funds based Lending Rate (MCLR) of SBI as on 31st March 2017 for fair value measurement. Security Deposits & Retention Money The fair value of security deposits & retention money is estimated as the present value of future cash flows, discounted at SBI MCLR rate of 8% Financial Instruments by Category The carrying value and fair value of financial instruments by each category as at March 31, 2017 were as follows:- (Rs. In lacs) Particulars Financial Financial Financial Total carrying Total fair value assets/liabilities assets/liabilities assets/liabilities value at amortised cost at FVTPL at FVTOCI Assets Deposits Trade receiveables Cash & Cash equivalents 4, , , Other financial assets 13, , , Liabilities Borrowing from others 1,065, ,065, ,065, Trade payables Financial liabilities 27, , ,

120 The carrying value and fair value of financial instruments by each category as at March 31, 2016 were as follows:- (Rs. In lacs) Particulars Financial Financial Financial Total carrying Total fair value assets/liabilities assets/liabilities assets/liabilities value at amortised cost at FVTPL at FVTOCI Assets Deposits Trade receiveables Cash & Cash equivalents 95, , , Other financial assets 13, , , Liabilities Borrowing from others 966, , , Trade payables Other financial liabilities 21, , , The carrying value and fair value of financial instruments by each category as at March 31, 2015 were as follows: (Rs. In lacs) Particulars Financial Financial Financial Total carrying Total fair value assets/liabilities assets/liabilities assets/liabilities value at amortised cost at FVTPL at FVTOCI Assets Deposits Trade receiveables Cash & Cash equivalents 25, , , Other financial assets 14, , , Liabilities Borrowing from others 833, , , Trade payables Other financial liabilities 14, , , Interest Income/(expeses) recognized on financial assets and liabilities: (Rs. In lacs) Particulars As at March 31,2017 Year ended Year ended March 31,2016 March 31,2015 Financial assets at amortised cost Interest income on bank deposits Interest income on other financial assets Interest expenses on other financial assets Financial assets at Fair Value through Profit or Loss (FVTPL) Financial assets at Fair Value through Other Comprehensive Income(FVTOCI)

121 2.57. Financial Risk Management The company has exposure to the following risk from its use of financial instrument:- 1. Credit Risk 2. Liquidity Risk 3. Market Risk The board of director has overall responsibility for the establishment & oversight of the comapany s risk management framework. The Board of director has established a risk management policy to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risk and adherence to limits. Risk management systems are reviewed periodically to reflect changes market conditions and the company s activities. The audit committee oversees how management monitors compliances with the company s risk management policies and procedues, and reviews the risk management framework. The audit committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. 1. Credit Risk Credit risk is the risk of financial losses to the company if a customer or counterparty to a financial instrument fails to meet its contractual obiligation and arises principally from the company s trade receivables, employee loans and other activities that are in the nature of leases. Exposure to credit risk The gross carrying amount of financial assts, net of any impairment losses recognized represents the maximum credit exposure. The maximum exposure to creidt risk as at March , March 31, 2016 & March 31, 2015 was as follows:- (Rs. In lacs) As at March 31, 2017 As at March 31, 2016 As at March 31, 2015 Gross Carrying Net Value after Gross Carrying Net Value after Gross Carrying Net Value after Value Impairment Value Impairment Value Impairment Security Deposit Trade Receivables Cash & Cash Equivalents 4, , , , , , Other financial assets 13, , , , , , Financial assets that are past due but not impaired Long term loan, Trade Receivables, Cash and cash equivalents and other assets are neither past due nor impaired. 121

122 2. Liquidity Risk: Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The company s approach to managing liquidity is to ensure,as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to the company reputation, typically the company ensures that it has sufficient cash on demand to meet expected operational expenses, servicing of financial obiligations. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: As at March 31,2017 (Rs. In lacs) Carrying Amount Contractual 0-12 Months 1-3 Years More than 3 year (Ind AS) Cash flows (I GAAP) Non derivative financial liabilities Borrowing from others 1,065, ,065, , , , Trade payables Other financial liabilities 27, , , , As at March 31,2016 (Rs. In lacs) Carrying Amount Contractual 0-12 Months 1-3 Years More than 3 year (Ind AS) Cash flows (I GAAP) Non derivative financial liabilities Borrowing from others 966, , , , , Trade payables Other financial liabilities 21, , , , As at March 31,2015 (Rs. In lacs) Carrying Amount Contractual 0-12 Months 1-3 Years More than 3 year (Ind AS) Cash flows (I GAAP) Non derivative financial liabilities Borrowing from others 833, , , , , Trade payables Other financial liabilities 14, , , ,

123 3. Market Risk: Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments Figures have been rounded off to nearest Rupees in Lacs Previous year figures have been regrouped or reclassified wherever necessary to make them comparable with current year figures Change in Accounting Policy and Impact thereof. The company has decided to expense with the mobile handsets which is being reimbursed to employees from the financial year Due to change in accounting policy an amount of Rs lacs been charged to current year expense including the carrying cost of Rs.5.24 lacs of mobile sets as on Sd/- Sd/- Pradeep Singh Kharola, IAS N.M.Dhoke For Manohar Chowdhry & Associates Managing Director Director (RSE) Chartered Accountants Firm Registration No: S Sd/- Sd/- Sd/- U. Jagadish Nayak S.Vasudevan Ashok Kumar Doddi Company Secretary Chief Financial Officer Partner Membership No: Place : Bengaluru Date :

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