MEP Infrastructure Developers Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2020
1. The Standalone Audited Financial Statements for the Year ended 31 March 2020, have been reviewed and recommended by the Audit Committee and approved and taken on record by the Board of Directors at their respective meetings held on 31 July 2020 The Statutory Auditor has expressed an unmodified audit opinion thereon.
2. The Standalone Audited Financial Statements are prepared in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the rules made thereunder and in the format as prescribed under Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The financial information presented above is extracted from and is harmonized to conform with the Audited Financial Statements.
3. The depreciation and amortisation expenses includes amortisation of toll collection rights amounting Rs. 846.98 lakhs and Rs. 2,447.87 lakhs for the quarter and year ended 31 March 2020 respectively (Rs Nil and Rs. 10,723.90 lakhs for the quarter and year ended 31 March 2019 respectively).
4. Considering the Long term business outlook and future growth plans of the MEP Group, Management is of the opinion that the losses in subsidiary companies namely MEP Nagzari Toll Road Private Limited, MEP IRDP Solapur Toll Road Private Limited, MEP Chennai Bypass Toll Road Private Limited, are temporary in nature. In the above subsidiaries including MEP Hyderabad Bangalore Toll Road Private Limited the overall going concern of the business is not adversely affected, In view of the above, there is no diminution in the value of Investment and advances given are fully recoverable.
5. The Company has adopted Ind AS 116 - Leases beginning April 1, 2019 using the modified retrospective approach, The standard has been applied to all the lease contracts existing as on April 1, 2019. Accordingly, the Company has not restated comparative information and recognised a lease liability at present value of the lease payments discounted at the relevant incremental borrowing rate- The right of use asset has been measured at the same value as that of the lease liability subject to the adjustments for prepayments and accruals.
Consequent to the new standard, in the profit and loss account for the current period, the nature of expenses in respect of operating leases has changed from lease rent of Rs. 1,291.28 lakhs to depreciation cost for the right-to-use asset of Rs. 1,218.46 lakhs and finance cost for interest accrued on lease liability of Rs. 308.70 lakhs. The Profit After Tax for the current period has reduced by Rs. 176.76 lakhs
6. The Company lodged the claim amounting to Rs. 7,491.94 lakhs with South Delhi Municipal Corporation (SDMC) on actual basis pertaining to the half year ended 30th September 2019 with respect to revenue loss on account of passing of commercial vehicles through free lanes at 13 major border entry points of Delhi. The SDMC constituted a committee to quantify the claims and give its recommendations The high level committee and the Commissioner SDMC, didn't recommend the claims. The Company approached Hon'ble High Court of New Delhi for relief. The Court vide its order dated 26 November 2019 instructed to keep the demand notice of 18 November 2019 under abeyance, In the meantime, the Company was directed to pay a concession fee of Rs. 20 crore per week. The court order vide 12 June 2020 has directed the Company to collect and deposit 85% of the Collection keeping 15% for O&M The is matter is sub judice before the Delhi High court and the Company is confident about recovery of its claims recognised.
7. The pandemic Outbreak of Coronavirus (COV1D-I9) globally and in India is causing significant disturbance and slowdown of economic activities which is recognised by Government of India vide notification no F. 18/4/2020 PPD dated 19th February 2020 as a Force Majuic Event, The Operations at loll plazas of the various project across the country was severely affected and the toll collection was suspended w.e.f. 26th March, 2020 till 19th April, 2020 mid-night. The construction activities of the Company were resumed gradually in the phased manner as per the directives issued by MORTH/MHA and by ensuring compliance with preventive measures in terms of guidelines / instructions issued by the Govt of India The Company has availed the relief provided by its lenders by way of moratorium on certain principal/interest payments
The Company believes the current level of operations are temporary in nature and based on the various initiatives announced by the respective central and state governments, and therefore this may not result in any significant financial impact on the Group The management has considered internal and external sources of information up to the dale of approval of these standalone financial results, in assessing the recoverability of investments and assets, liquidity, financial position and operations of the Company including impact on estimated construction cost to be incurred towards projects under execution and based on the management's assessment, there is no material impact on the standalone financial results of the Company.
Considering the uncertainties involved in estimating the impact of this Force majeure event, the future impact of this one may be different from those estimated as on the date of approval of these standalone financial results and this will continue to be monitored in future period.
The Company has recognised a claim of Rs. 99.48 lakhs for the Quarter and Year Ended 31st March 2020.
8. The claim receivables amounting to Rs 1,991.00 lakhs as on 31 March 2020, represents various claims filed by the company with various authorities over the period based on the contractual provisions. The company is confident of recovering the same.
9. Figures relating to the previous period have been regrouped / real ranged, wherever necessary, to make them comparable with those of the current period.