Bharat Road Network Ltd

<dhhead>DIRECTORS’ REPORT</dhhead>

Dear Members,

Your Directors have the pleasure in presenting the Seventeenth Annual Report, together with the Audited Accounts of your Company, for the Financial Year ended on 31st March, 2024. The summarized financial performance of your Company is as under:

FINANCIAL SUMMARY / HIGHLIGHTS:

Note: The above figures have been extracted from the Standalone and Consolidated Financial Statements of the Company, for the Financial Year ended on March 31, 2024, prepared as per Indian Accounting Standards (Ind-AS).

During the year under review, on a standalone basis, your Company suffered net loss before tax of Rs 2,987.87 Lakhs, a decrease compared to a net loss of Rs 9,715.98 Lakhs in the previous financial year. This change is primarily attributed to a loss on the sale of equity investments in one of its associate companies amounting to Rs 2,767.44 Lakhs recognised during the previous financial year. Gross revenue for the current financial year decreased to Rs 1,385.52 Lakhs, down from Rs 2,887.62 Lakhs in the previous financial year, primarily due to a decline in income from road construction activities.

During the year under review, on a consolidated basis, your Company reported a net loss of Rs 12,103.56 Lakhs, a decrease from a net loss of Rs 22,223.16 Lakhs in the previous financial year. This reduction is attributed to the exceptional items related to the loss on the disposal of one of its associate companies recognised during the previous financial year. Gross revenue on a consolidated basis increased to 39,110 Lakhs as compared to Rs 35,008.90 Lakhs in the previous financial year, due to an increase in toll revenue across subsidiaries and higher revenue from construction services.

Key Financial Ratios in terms of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are as under –

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof is as mentioned below –

• Current Ratio has decreased due to Borrowings being classified as current based on maturity period.

• Debt Service Coverage Ratio has increased due to increase in Debt Service amount.

• Return on Equity Ratio has increased due to reduction in losses in the Current year.

• Trade Receivable Turnover Ratio has decreased due to reduction in revenue during the current year.

• Trade Payables Turnover Ratio has decreased due to reduction in expenses during the current year.

• Net Capital Turnover Ratio has increased due to reduction in working capital.

• Return on Capital Employed has increased due to positive Earnings Before Interest, Taxes, And Amortization (EBITA).

• Return on Investment has increased due to reduction in loss and no impairment during the current year.

DIVIDEND

The Company did not have distributable profit during the year under review and hence, the Board of Directors has not recommended any dividend on Equity Shares of the Company for the Financial Year ended 31st March, 2024.

TRANSFER TO RESERVES

No amount has been transferred to any Reserve during the year under review.

PROMOTERS’ GROUP SHAREHOLDING

As on March 31, 2024, the total shareholding of Promoter Group of your Company stood at 52.23% (previous year 53.76%) in the Paid-up Share Capital of the Company.

As on March 31, 2024, 22.80% (previous year 22.16%) of the Promoters’ Group shareholding is under pledge.

In compliance with Regulation 31(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015"), the entire shareholding of Promoter(s) and Promoter group is in dematerialized form.

PUBLIC DEPOSITS

Your Company has not invited or accepted any deposits covered under Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014, during the year under review.

Global Economy

The world economy is projected to grow at 3.2% in 2024 and 3.3% in 2025, according to the IMF’s forecast in the World Economic

Outlook (WEO) - July 2024. The report, titled ‘The global economy in a sticky spot’, states that global activity and world trade firmed up at the turn of the year, with trade spurred by strong exports from Asia, particularly in the technology sector. However, services inflation is holding up progress on disinflation, which is complicating monetary policy normalisation. Upside risks to inflation have thus increased, raising the prospect of higher for even longer interest rates, in the context of escalating trade tensions and increased policy uncertainty. The policy mix should thus be sequenced carefully to achieve price stability and replenish diminished buffers.

The IMF clarifies that overall, risks to the outlook remain balanced but some near-term risks have gained prominence. These include upside risks to inflation that stem from a lack of progress on services disinflation and price pressures emanating from renewed trade or geopolitical tensions. Risks of persistent inflation in the services sector are tied to both wage and price setting, given that labour accounts for a high share of the costs in that sector. Higher nominal wage growth, which in some cases reflects the catch-up of real wages, if accompanied by weak productivity, could make it difficult for firms to moderate price increases, especially when profit margins are already squeezed. This could lead to further stickiness in wage and price inflation. The escalation of trade tensions could further raise near-term risks to inflation by increasing the cost of imported goods along the supply chain. Bumpiness along the remaining disinflation path could destabilise the return to price stability if short-term expectations spike upward as a result of disappointing inflation data.

Source: World Economic Outlook-IMF, July 2024

Domestic Economy

Despite global economic uncertainty, including high-interest rates and geopolitical tensions, India showcased remarkable resilience. As the world’s fifth-largest economy, India delivered a strong performance in FY 2023-24, achieving a GDP growth rate of 8.2%, up from 7.0% the previous year. This growth was fuelled by healthy domestic consumption, increased government investments, and a robust financial sector.

The manufacturing sector was a key contributor, recording an impressive 9.9% growth, bolstered by a significant rise in the Index of Industrial Production (IIP). The services sector also showed strength, with the Purchasing Managers’ Index (PMI) consistently above 50, signalling on-going expansion. Strong domestic demand was further evidenced by a 12.7% increase in GST collections compared to FY 2022-23.

The Union Budget for 2024-25, unveiled in July 2024, highlighted the government’s dedication to infrastructure development, economic stability, sector-specific growth, environmental sustainability, and strategic global positioning. It focused on the long-term vision of ‘Viksit Bharat’ (Developed India) by 2047.

Monetarily, the Reserve Bank of India (RBI) maintained its ‘withdrawal of accommodation’ stance, keeping key policy rates at 6.5% for the eighth consecutive review as of June 2024. This approach helped manage inflation, with core inflation softening for the 11th consecutive month since June 2023.

Outlook

The RBI forecasts real GDP growth of 7.2% for 2024-25. This projection is driven by strengthening rural demand, improving employment and informal sector activity, moderating inflationary pressures, rising exports due to improving global trade, and sustained momentum in manufacturing and services, which should boost private consumption. Meanwhile, the World Bank’s bi-annual report, ‘South Asia Development Update,’ released on April 2, 2024, offers a more conservative estimate, raising its growth projection for India’s economy to 6.6% for 2024-25, up from its previous forecast of 6.4%.

Source: https://pib.gov.in/PressReleasePage.aspx?PRID=2034973

Industry Overview

The construction equipment (CE) industry has shown remarkable growth in recent years, driven by the increasing pace of road construction and infrastructure development in India. According to the Indian Construction Equipment Manufacturers Association (ICEMA), the CE industry recorded a 26% growth in sales volumes in 2022-23, with total equipment sales surpassing the 0.1 million mark for the first time, reaching 1,07,779 units. This growth was largely fuelled by an enhanced pace of road construction in the latter half of 2022-23, which significantly increased the demand for construction equipment.

In 2023-24, the CE industry continued its growth momentum, achieving a 25% increase in sales volumes in the first 11 months compared to the same period in the previous year. Quarterly trends indicate a sales growth of approximately 30% in Q3 2023-24 over Q3 2022-23, mainly due to the accelerated pace of infrastructure projects across the country. Although there was a slight month-on-month decline in sales in February 2024, exports showed growth, indicating a positive trajectory for international demand.

Recent Trends and Developments

Several recent trends and developments are shaping the road construction sector:

1. Pre-cast Policy: The Ministry of Road Transport and Highways (MoRTH) has mandated the use of factory-manufactured pre-cast concrete elements for projects within a 100 km radius of a pre-cast factory, with a minimum mandatory usage of 25% of total concrete volume. This initiative is expected to maintain the pace of road projects during the monsoon season and reduce air pollution caused by construction activities.

2. Performance-Based Maintenance Contracts (PBMC): MoRTH has introduced PBMC and short-term maintenance contracts to make national highways pothole-free. This initiative addresses the issue of rain-induced damage to highways and covers over 1,00,000 km under these contracts.

3. Electric Highways: The government is working on developing electric highways that recharge the batteries of electric vehicles while they drive. A pilot project on the Delhi-Jaipur Highway is being planned to test this innovative approach.

4. Multimodal Logistics Parks (MMLPs): Plans are underway to develop around 35 MMLPs across the country to enhance logistics infrastructure. Bids are live for MMLPs in Anantapur, Nashik, and Pune, with additional locations prioritised for development.

5. Key Technology Trends:

o Drone Surveys: Mandated by the National Highways Authority of India (NHAI) for all stages of national highway projects to ensure efficient development, construction, and operations.

o Automatic Number Plate Recognition: A pilot initiative on the Delhi-Meerut Expressway using automatic number plate recognition cameras linked to FASTag for tolling.

o Artificial Intelligence (AI), Machine Learning (ML), and Internet of Things (IoT): These technologies are being leveraged to improve road construction projects, enhance road safety, and develop predictive maintenance solutions.

o Predictive Maintenance: Project iRASTE aims to reimagine road safety in India by using AI for predictive maintenance, preventing blackspots before they pose risks to road users.

Sector Outlook

The outlook for the road construction sector remains optimistic, supported by robust government initiatives and increasing private sector participation:

1. Budget and Investment: The Ministry of Road Transport and Highways’ (MoRTH) budget outlay has increased by 2.80% to

2.78 trillion in 2024-25 from Rs 2.70 trillion in 2023-24. This allocation has grown eightfold in the past decade, reflecting the government’s commitment to infrastructure development.

2. Investment Vehicles: Infrastructure Investment Trusts (InvITs) and Toll-Operate-Transfer (TOT) models are expected to play a larger role in attracting private capital for national highway development. The positive response to NHAI’s InvIT demonstrates soaring investor confidence.

3. Sustainable Materials: There is a growing trend towards using alternative sustainable materials like modified bitumen, plastic waste, eco-friendly concrete, geosynthetics, and fly ash to reduce dependence on traditional materials. The ministry’s mandate to use waste material in bituminous layers for service roads is expected to continue, driven by high material prices.

4. Digitalisation: The road sector is increasingly adopting digital tools and technologies for operations and maintenance. The emergence of connected and autonomous vehicles, along with advancements in road safety and construction technology, will shape the future of the industry.

5. Toll Collection Innovations: The government plans to introduce a satellite-based toll collection system, replacing the current toll collection method, enhancing efficiency and transparency.

Overall, the road construction sector in India is poised for sustained growth, driven by government initiatives, technological advancements, and a focus on sustainability and digitalisation. BRNL is well-positioned to capitalise on these opportunities and contribute to the country’s infrastructure development, enhancing connectivity and economic growth.

COMPANY OVERVIEW

Incorporated in 2006, Bharat Road Network Limited (BRNL) is a Build-Operate-Transfer (BOT) company in India that focusses on the development, implementation, operation, and maintenance of road and highway projects. The company has been involved in the development, operation, and maintenance of national and state highways across various states in India, including Uttar Pradesh, Kerala, Haryana, Madhya Pradesh, Maharashtra, and Odisha. BRNL partners with experienced local EPC players to execute these projects, which are implemented through special purpose vehicles, either as a subsidiary or in collaboration with other infrastructure players.

The main business operations of your Company can be divided into three categories, i.e. –

i. Project development and implementation;

ii. Tolling Operations and Highway Management; and

iii. Advisory Services and Project Management Services including Construction Supervision/Debt Syndication for your Company’s projects.

During the year under review, your Company has remained focussed on enhancing resources while strategically directing them towards portfolio realignment and claim realization. With successful completion of portfolio realignment through transfer of asset ownership, your Company has now been focused in managing the Thrissur- Angamali section of National Highway in the state of Kerala and pursuing claims in other subsidiaries and associate companies.

Operational Projects

Four-laning of the existing two-lane portion of the Thrissur- Angamali section of NH-47 from km 270.00 to km 316.70 and improvement, operation and maintenance of the Angamali-Edapalli section from km 316.70 to km 342.0 of NH-47 in the state of Kerala on BOT Toll basis.

*Terminated Projects

Four laning of the Solapur-Maharashtra/Karnataka border section of NH-9 from km 249.00 to km 348.80 in the state of Maharashtra on DBFOT Toll basis.

*w.e.f. July 19, 2024

Under Construction Project

The scope of work for the project includes designing, engineering, financing, procurement, construction, operation, and maintenance of the existing 2 Lane without Paved Shoulder carriageway to 4 Lane with Paved Shoulder carriageway configurations. The total design length of the project stretch is 63.170 Km Start from design Km 26.0 (Palma Village) to design Km 89.170 (Gumla Bypass). Out of 63.170 Km, 21.000 Km is falling under Ranchi District and 42.170 Km is failing under Gumla District.

BUSINESS PERFORMANCE

During the year under review, your Company maintained its focus on enhancing operational efficiency by increasing service automation and intensifying efforts on effective value realisation through efficient Claims and Contracts Management via arbitration and conciliation. Additionally, the Company adopted a prudent project delivery approach to expedite the completion of ongoing construction projects.

Traffic and Revenue Growth

The Average Daily Revenue (ADR) from operational projects was

75.01 lakhs during the Financial Year 2023-24, resulting in total revenue of Rs 273.82 crores which has been an increase from the previous year’s ADR of Rs 67.65 lakhs and toll revenue of Rs 241.38 crores in the Financial Year 2022-23, reflecting a 7% growth in Average Daily Traffic (ADT), a 10.87% increase in ADR, and an overall revenue growth of 13.4%.

Guruvayoor Infrastructure Private Limited (GIPL): During the year under review, the Average Daily Traffic (ADT) increased by 7.8% compared to the previous year. The Average Daily Revenue (ADR) rose by 14.60% to Rs 51.10 lakhs in FY 2023-24, up from Rs 44.59 lakhs in FY 2022-23.

Solapur Tollways Private Limited (STPL): During the year under review, the Average Daily Traffic (ADT) increased by 2.3% compared to the previous year. The Average Daily Revenue (ADR) rose by 3.7% to 23.91 lakhs in FY 2023-24, up from Rs 23.06 lakhs in FY 2022-23.

Concessionaire (STPL) rights of tolling were suspended w.e.f. from January 12, 2023 while O&M activities were undertaken by the Solapur Tollways Private Limited during the suspension period. The Concessionaire has issued a notice of termination of Concession Agreement on July 19, 2024 to NHAI.

Claim Management

During the year under review, your Company achieved notable success in claim realisation and management. Your Company’s subsidiary, Orissa Steel Expressways Pvt Ltd. (OSEPL), secured a favourable court order from the Hon’ble High Court of Delhi on May 26, 2023 in the application filed by National Highways Authority of India under Section 34 of the Arbitration and Conciliation Act, 1996, enhancing the prospects for recovering an arbitration award issued on March 31, 2019. OSEPL is pursuing the expeditious settlement of this claim under the Vivad se Vishwas II – One Time Settlement Scheme announced by the Ministry of Road Transport and Highways earlier this year.

Similarly, your Company’s associate, Kurukshetra Expressways Private Limited (KEPL), benefited from the Vivad Se Vishwas (VSV) scheme by settling an outstanding claim that had been mired in litigation under Section 34 of the Arbitration and Conciliation Act.,1996 since the award’s pronouncement in November 03, 2018.

Additionally, KEPL, secured a favourable arbitral award from the arbitration tribunal concerning its outstanding claim for completing roads, as well as a claim for termination payment and other associated claims.

IV. FUTURE BUSINESS PLANS

As a leading highway concession company, the mission of your Company is to provide safe, efficient, and sustainable infrastructure that supports the economic and social development of around the core areas of operations.

New Business Opportunities

As the infrastructure sector rapidly expands, our company is eager to capitalise on emerging opportunities. With a highly skilled and dedicated workforce, we are well-prepared to take on new projects and explore related fields. However, a substantial portion of our resources – both financial and intellectual – is currently engaged in navigating through the complexities of claims and litigation, which constrains our ability to fully leverage these opportunities. To propel future growth and development, it is essential that we secure a fresh infusion of funds through strategic planning, guided by our deep domain knowledge and the expertise of our strategic leadership team. We are committed to working closely with our stakeholders including promoters and financial partners and draw upon our strength of valuable mentoring available within our Board to overcome these challenges and pursue new paths to success.

Claim Management

The infrastructure sector is inherently complex, and managing claims effectively is crucial for growth and sustenance in the sector. Your Company has identified claim management as a core focus area and adopted a multi-faceted approach to achieve optimum claim realisation:

• Proactive Risk Identification: Your Company shall continue to consistently evaluate and refine its risk management framework to detect potential revenue losses caused by factors beyond its control. By adopting a prudent claim management strategy, your Company shall constantly aim to safeguard the interests of all stakeholders while focusing on maximizing value for shareholders.

• Streamlined Processes: Your Company shall remain committed to ensuring that its claim management processes are transparent, efficient, and in line with industry best practices. To achieve this, your Company remain focussed to continually work towards establishing a robust techno-legal framework that not only minimises the time and resources spent on claims but also strengthens collaboration among technical, legal, and financial teams for a unified claim realisation strategy.

• Collaborative Dispute Resolution: The strategy of your Company shall remain to prioritise collaboration and negotiation over litigation. By fostering a culture of open communication and upholding the spirit of partnership in the PPP model, your Company shall constantly aim to resolve disputes amicably, preserving long-term relationships and minimising disruptions to operations.

Stakeholder Value Creation

The success of your Company is intrinsically linked to the value creation for our stakeholders – ranging from shareholders and employees to local communities and government authorities. In the coming years, the focus on stakeholder value creation will be guided by the following principles:

• Sustainable Development: Your Company will prioritise activities that contribute to the sustainable development of the regions within the project influence area. This includes reducing the environmental footprint, enhancing road safety, and integrating smart technology into operation and maintenance.

• Community Engagement: Your Company will actively engage with local communities to ensure that project development activities align with the needs and aspirations of the people around the project influence area. By doing so, the Company aims to create goodwill and social dividend, which is critical to the long-term success of the business and operation.

• Employee Empowerment: Your Company considers the employees as the greatest asset for growth and development and hence remain committed to continue investing in their professional growth and well-being, creating a work environment that fosters innovation, collaboration, and a shared sense of purpose.

Financial Management

Strong financial management is the foundation of highway concession business which operates with high gestation period amid complex macro-economic environment.

• Cost Efficiency: Your Company will continue to drive cost efficiency across its operations, leveraging technology and process improvements to optimise resource utilisation. This will enable the company to maintain high-quality infrastructure at competitive costs.

• Resilience and Adaptability: The economic landscape is constantly evolving, and it requires entities to be prepared to adapt to the dynamic business environment. Your Company will strengthen financial resilience by managing debt prudently and maintaining a robust cash flow to navigate uncertainties and capitalise on emerging opportunities.

The company’s future business plan is built on the key pillars of new business opportunities, claim management, stakeholder value creation and financial management. By concentrating on these pillars, the Company aims to transition itself from a phase of resilience and sustenance to one of growth and profitability, all while making a positive impact on nation building.

V. FUTURE OUTLOOK

The future outlook for India’s highway sector is promising, driven by several key factors that are expected to sustain and accelerate growth over the coming years:

1. Government Initiatives and Investments

The Indian government has been actively promoting infrastructure development, with the highway sector being a major focus. Besides Bharatmala Pariyojana, the flagship highway development programme aiming to build and upgrade thousands of kilometres of highways, enhancing connectivity across the country, the Asset Monetization Programme under NMP and infrastructure development initiatives under National Infrastructure Pipeline holds a promising roadmap for future growth and prosperity. Continued government investment in infrastructure, supported by public-private partnerships (PPPs), is likely to provide a significant boost to the sector.

2. Increased Private Sector Participation

The highway sector is witnessing renewed interest from the private sector after a brief phase of subdued interest over the past few years. The renewed focus is driven by favourable policies, improved project viability, and innovative financing mechanisms. Hybrid Annuity Model (HAM) and Toll-Operate-Transfer (TOT) models have been significantly successful in attracting private investment, leading to increased participation in highway projects.

3. Technological Advancements

The adoption of advanced technologies in highway construction and management is expected to play a crucial role in the sector’s future. The use of digital tools for project monitoring, smart traffic management systems, and the integration of sustainable construction practices will improve efficiency, safety, and environmental sustainability.

4. Regulatory and Policy Reforms

The Indian government is continuously working on regulatory and policy reforms to streamline processes and reduce bottlenecks in the highway sector. Simplified land acquisition procedures, faster environmental clearances, and improved dispute resolution mechanisms are expected to create a more favourable environment for infrastructure development. The implementation of Vivad se Vishwas scheme for settlement of ongoing disputes and litigation augurs well for the industry in improving liquidity and clearing bottleneck for future growth.

5. Financial Stability and Funding

The highway sector in India is expected to benefit from increased financial stability and access to diverse funding sources. The introduction of infrastructure investment trusts (InvITs) and other innovative financing mechanisms will provide the necessary capital to support large-scale projects.

The future of India’s highway sector looks bright, with a combination of government support, private investment, technological innovation, and a focus on sustainability driving growth. As the country continues to expand and modernise its highway network, the sector is poised to play a pivotal role in India’s economic development, contributing to enhanced connectivity, job creation, and overall prosperity

VI. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The past year has been pivotal for your Company as significant strategic actions were taken within Human Resources (HR) department, focusing on manpower realignment to drive efficiency and achieve cost optimisation. These initiatives were carefully designed and executed to align the existing workforce with long-term business objectives, ensuring sustainability, adaptability, and competitive advantage in a rapidly changing market environment.

The Company initiated a comprehensive workforce restructuring programme aimed at realigning human capital with the company’s evolving strategic goals. The restructuring ensured that redeployment of workforce across various group entities, minimising redundancies and enhancing overall productivity.

As we move forward, HR strategy of the Company will continue to focus on building a resilient, adaptable workforce that is aligned with the company’s long-term vision. Your Company remains committed to ongoing talent development, cost management, and process optimisation to ensure that human capital continues to be a key driver of success in near future.

With strategic actions aimed towards manpower realignment and cost optimisation, your Company is confident in the ability to navigate through the ongoing challenges and capitalise on upcoming opportunities, ultimately delivering sustained value to our stakeholders. As on March 31, 2024, the overall group headcount including the SPVs was 224, consisting of 166 on-roll employees and 58 off-roll employees.

VII. RISK MANAGEMENT

Risk management is at the heart of your Company’s growth strategy, empowering your Company to navigate challenges and seize opportunities with confidence. Your Company’s approach is built on a deep understanding of the diverse risks it faces, backed by meticulously-crafted risk policies and procedures that align with industry best practices. Your Company has developed robust systems and embraced strong practices to identify, measure, and mitigate risks effectively. By maintaining these risks within pre-defined appetite levels, your Company ensures that its operations remain resilient and adaptive, supporting its long-term objectives. This proactive stance enables your Company to not only safeguard its assets but also drive innovation and progress across all facets of its business.

Growth Risk

Growth risk is the inability to effectively manage growth or to successfully implement business plans which depends heavily on the ability to plan and execute the growth strategy. Growth Risk can impact organic as well as inorganic growth vision of the Company in the form of inability to successfully bid for new projects at attractive IRR or acquisition of existing stressed projects at attractive valuation.

Your Company recognises that managing growth effectively is crucial to realising our strategic vision. To mitigate growth risk, your Company constantly reviews and analyses market opportunities and trends, allowing us to selectively bid on new projects and make acquisitions that align with our clearly defined investment criteria. This proactive approach ensures we remain agile and well-positioned to capitalise on growth opportunities.

Business Risk

Business Risk includes risks with respect to competition, capital intensiveness, input cost, traffic growth for BOT projects and labour.

In the dynamic and competitive landscape of infrastructure, your Company faces several business risks, including competition, capital intensiveness, input costs, and traffic growth for BOT projects. As the sector grows, more players qualify to bid for new projects, heightening competition. Additionally, the capital-intensive nature of our business necessitates the availability of sufficient funds, particularly for fund-based projects such as BOT-toll, HAM, and TOT models. The availability of quality resources is crucial for timely project completion, and unexpected input cost increases can directly impact margins. Furthermore, undue attrition could lead to project delays and a loss of competitive edge.

To address these risks, your Company has implemented a comprehensive mitigation strategy, where it adapts policies and procedures to sustain a resilient business model, striving to execute projects ahead of schedule and within budget. Your Company’s working capital cycle is highly optimised, and it enters into contracts with EPC partners that include cost escalation provisions to protect our margins. Your Company is committed to building a team of highly motivated employees capable of achieving ambitious business goals with passion and commitment. Our workplace environment is cordial and employee-friendly, with remuneration that meets industry standards.

Regulatory Risk

Your Company’s operations are significantly influenced by government policies and regulations, which can impact its business if adverse changes occur. To mitigate regulatory risk, your Company regularly reviews and monitors government policies and potential developments. By conducting impact assessments, your Company can plan and implement necessary actions in a timely manner, ensuring its business remains aligned with regulatory requirements and prepared for any changes. Through these robust risk management strategies, your Company continues to navigate challenges effectively, ensuring sustainable growth and long-term success.

Your Company regularly reviews and monitors government policies and likely developments along with an impact assessment of those policies, so that necessary actions can be planned and implemented from time to time.

VIII. INTERNAL CONTROL AND AUDIT

Your Board places utmost importance in setting up and regularly enhancing Internal Control Framework in view of complex business environment and increasing regulatory oversight for sustainable growth. Your Company adopts a calibrated and smart framework spanning on pillars of administrative and financial controls. On the administrative control side, your Company has a proper reporting structure, several oversight committees, defined roles and responsibilities at all levels to ensure appropriate checks and balances. On the financial controls side, management with the knowledge and understanding of the business, its organisation, operations, and processes has put in place appropriate controls including segregation of duties and reporting mechanism to deter and detect misstatements in financial reporting.

Your Company has an Internal Financial Control (IFC) System, commensurate with the nature of its business and the size and complexity of its operations. The Company’s system of internal control has been designed to provide a reasonable assurance with regard to controls over critical business activities and operations, policies and procedures for ensuring the orderly and efficient conduct of business, critical procurements, prevention and detection of frauds and errors, compliance with regulations and for ensuring timeliness and reliability of financial reporting. Your Company’s IFC is reviewed regularly and actions are taken wherever needed, to strengthen control and overall risk management procedure.

The Audit Committee of the Board evaluates and reviews the adequacy and effectiveness of the Internal Control Systems and suggests improvements to strengthen them. Based on the report of Internal Auditor and the response thereto, necessary corrective actions are undertaken to strengthen the controls. Overall, the Board and the Audit Committee maintains a proactive approach in ensuring that the control and governance framework is regularly reviewed and timely corrective actions are taken to minimise risk of disruption.

During the year under review, your Company appointed M/s. KGRS & Co., a Chartered Accountant Firm (Firm Registration No. 310014E), having requisite academic and professional qualifications, work experience, skill and other suitable capabilities, as the Internal Auditor of the Company for the Financial Year ended March 31, 2024.

There was no change in the Internal Auditor during the year under review.

SUBSIDIARY & ASSOCIATE COMPANIES

As on 31st March, 2024, your Company had 3 (three) Subsidiaries and 2 (two) Associate Companies.

There has been no change in the subsidiaries and Associates during the year under review.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES & ASSOCIATE COMPANIES

The Statement in Form AOC-1 containing the salient features of the Financial Statements of your Company’s Subsidiaries and Associate Companies, pursuant to first proviso to Section 129(3) of the Companies Act, 2013 (Act), read with Rule 5 of the Companies (Accounts) Rules, 2014, forms part of this Annual Report. Further, in line with Section 129(3) of the Act read with the aforesaid Rules, the SEBI Listing Regulations, 2015 and in accordance with the Indian Accounting Standards specified under section 133 of the Act, Consolidated Financial Statements prepared by your Company includes financial information of its Subsidiary and Associate Companies.

Further, in accordance with Section 136 of the Act, the Audited Financial Statements of each of the Subsidiary, included in the Consolidated Financial Statements prepared by your Company as per Rule 8(1) of the Companies (Accounts) Rules, 2014, is available on the website of your Company, www.brnl.in.

Members interested in obtaining a copy of the Annual Accounts of the Subsidiaries may write to the Company Secretary at your Company’s Registered Office. The said Report is not reproduced here for the sake of brevity.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT

There has been no material change and commitment affecting the financial position of your Company, which occurred from the end of the Financial Year ended on March 31, 2024 and the date of this Report.

CAPITAL STRUCTURE

At present, the Authorized Capital of the Company is Rs 100 Crore (Rupees One Hundred Crore) divided into 10,00,00,000 (Ten Crore) Equity Shares of Rs 10 (Rupees Ten) each.

The Paid-up Share Capital of your Company is Rs 83.95 Crore (Rupees Eighty Three Crore and Ninety Five Lakhs) divided into 8,39,50,000 (Eight Crore, Thirty- Nine Lakhs, Fifty Thousand) Equity Shares of Rs 10/- (Rupees Ten) each.

There has been no change in the capital structure of your Company during the year under review.

Directors

The Board comprises of optimum combination of Executive, Non-Executive and Independent Directors, including Women Directors, with more than 50 (fifty) per cent of the Board comprising of Independent Directors. In compliance with the requirements of the SEBI Listing Regulations, 2015, more than half of the board of directors comprises of Independent Directors.

As on 31st March, 2024, your Company had 7 (seven) Directors comprising of 1 (one) Executive Director and 6 (six) Non-Executive Directors, all of whom are Independent Directors. Your Company has 2 (two) woman director on the Board.

As on the date of this Report, your Company has 9 (nine) Directors comprising of 1 (one) Executive Director and 8 (eight) Independent Directors. Your Company has 2 (two) woman director on the Board.

Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of your Company recommended re-designation of Mr. Rakesh Kumar Gupta (DIN: 06806891) and Mr. Shree Ram Tewari (DIN: 07698268) as Independent Directors of your Company for a first term of 5 (five) consecutive years w.e.f. 12th August, 2023 which was approved by the shareholders at the 16th Annual General Meeting of the Company held on 29th September 2023.

During the year under review, Mr. Praful Tayal (DIN: 00826834) Independent Director of your Company tendered his resignation as an Independent Director of the Company w.e.f. close of business hours on 7th November, 2023 on account of personal reasons.

Based on the recommendation of the Nomination and Remuneration Committee, Dr. (Ms.) Manta Dey (DIN:10234816), was appointed by the Board of Directors as an Additional Director (Category: Independent) for a first term of 5 consecutive years with effect from 6th February 2024 and shareholders approval was accorded by way of postal ballot (through electronic means only) on 21st March 2024.

Shareholders’ approval was also accorded by way of postal ballot (through electronic means only) on 21st March 2024 for continuation of Directorship of Prof. Santanu Ray (DIN: 00642736) as an Independent Director who attained the age of 75 years on 30th June, 2024 and also for his re-appointment as Independent Director for a second term of 5 consecutive years w.e.f. 30th July, 2024.

Based on the recommendation of Nomination and Remuneration Committee, Mr. Rajesh Lihala (DIN: 00282891) and Mr. Jaydeep Chakraborty (DIN: 00907786) were appointed by the Board of Directors as Additional Directors (Category: Independent) of the Company w.e.f. 7th June, 2024, subject to the approval of the shareholders which has been sought by way of voting through Postal Ballot (through electronic means only). E-voting has commenced from Wednesday, 31st July, 2024 (9:00 A.M.) and shall end on Thursday, 29th August, 2024 (5:00 P.M.). The voting results shall be declared by the Chairman or a person authorized by him on or before Saturday, August 31, 2024.

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013 and Rules made thereunder, Mr. Bajrang Kumar Choudhary (DIN: 00441872), Managing Director of your Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The brief resume / details relating to Directors who are proposed to be appointed / re-appointed are furnished in the Notice of the ensuing AGM. The Board of Directors of your Company recommends the appointment / reappointment of the above Directors.

Your Company has received declaration from each of the Independent Directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI Listing Regulations, 2015 and that he/she is not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his/her ability to discharge his/her duties with an objective independent judgment and without any external influence. All requisite declarations have been duly placed before the Board.

In the opinion of the Board, the Independent Directors fulfill the conditions as specified under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management. Most of the Independent Directors are exempted from appearing the online proficiency self-assessment test conducted by the institute notified under section 150(1) of the Companies Act, 2013.

In the opinion of the Board, the independent director(s) appointed possess integrity, expertise and experience (including the proficiency) and shall clear the online proficiency self-assessment test conducted by the institute notified under section 150(1) of the Companies Act, 2013, within the stipulated timelines, wherever applicable.

In terms of SEBI Listing Regulations, 2015, your Company has identified core skills/expertise/competencies as is required in the context of the Company’s business(es) and sector(s) for it to function effectively. Details of such skills/expertise/competencies identified along with the names of directors who have such skills / expertise / competence are furnished in the Corporate Governance Report and forms part of this Annual Report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with your Company, other than sitting fees for the purpose of attending meetings of the Board/Committee of the Company and reimbursement of expenses, if any.

Key Managerial Personnel

As per the provisions of Section 203 of the Companies Act, 2013, read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, the following Director / Executives of your Company are the Key Managerial Personnel as on 31st March, 2024 and as on the date of this Report –

There has been no change in the Key Managerial Personnel during the year under review.

MEETINGS OF BOARD OF DIRECTORS

The Board meets at regular intervals to discuss and decide on policy and strategy apart from other Business. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions through circulation, as permitted by law, which are noted at the subsequent Board Meeting.

4 (Four) Meetings of the Board of Directors of the Company were held during the Financial Year 2023-24 on 25th May, 2023, 12th August, 2023, 9th November, 2023 and 6th February, 2024.

The maximum time gap between any two consecutive meetings did not exceed 120 (One Hundred Twenty) days except in the following case –

The Company conducted two consecutive Board Meetings on 23.01.2023 and 25.05.2023 respectively with a maximum gap exceeding 120 (One Hundred Twenty) days for which the Company received fine letters from both BSE Limited and National Stock Exchange of India Limited, imposing a fine of Rs 10,000 plus applicable taxes separately, in relation to non-compliance with the provisions of Section 17(2) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 during the quarter ended 30th June, 2023, in terms of SEBI Circular no. SEBI/HO/CFD/CMD/CIR/P/ 2020/12 dated January 22, 2020.

The details of the board meetings, the attendance of the Directors thereof and other particulars are provided in the Corporate Governance Report forming part of this Annual Report.

AUDIT COMMITTEE

The Audit Committee of your Company has been constituted in line with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations, 2015.

The Audit Committee of your Company comprised of the following Members as on 31st March, 2023 –

The Board of Directors had reconstituted the Audit Committee by way of a Circular Resolution passed on 6th July, 2023 and presently, the Audit Committee comprises of the following Members as on 31st March, 2024 and as on the date of this Report -

The Managing Director, Chief Financial Officer, the representatives of Internal Auditors and Statutory Auditors of the Company are invited to attend the Meetings of the Committee as invitees. The Committee also invites senior executives at its Meetings, as and when it considers appropriate.

Mr. Bajrang Kumar Choudhary, Managing Director is a permanent invitee to the Meetings of Audit Committee.

Miss Ankita Rathi, Company Secretary acts as the Secretary to the Committee.

The scope and functions of the Audit Committee is in accordance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, 2015. The brief Terms of Reference of the Audit Committee has been provided in the Corporate Governance Report, forming part of this Annual Report.

4 (four) Meetings of the Audit Committee were held during the Financial Year 2023-24 on 25th May, 2023, 12th August, 2023, 9th November, 2023 and 6th February, 2024.

During the year under review, there were no instances wherein the Board had not accepted any recommendation from the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors of the Company has constituted a Nomination and Remuneration Committee in accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI Listing Regulations, 2015.

The Nomination and Remuneration Committee of your Company comprised of the following Members as on 31st March, 2023:

The Board of Directors had reconstituted the Nomination and Remuneration Committee by way of a Circular Resolution passed on 6th July, 2023 and consequently, the Nomination and Remuneration Committee comprises of the following Members as on 31st March, 2024 and as on the date of this Report -

Mr. Shree Ram Tewari (DIN: 07698268) has been re-designated as an Independent Director of your Company for a first term of 5 (five) consecutive years w.e.f. 12th August, 2023 at the 16th Annual General Meeting of the Company held on 29th September, 2023.

Mr. Bajrang Kumar Choudhary, Managing Director, is a permanent invitee to the Meetings of Nomination and Remuneration Committee.

Miss. Ankita Rathi, Company Secretary acts as the Secretary to the Committee.

The scope and function of Nomination and Remuneration Committee is in accordance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, 2015. The brief Terms of Reference of the Committee has been provided in the Corporate Governance Report, forming part of this Annual Report.

4 (four) meetings of the Nomination and Remuneration Committee were held during the Financial Year 2023-24 on 19th May, 2023, 9th August, 2023, 7th November, 2023 and 3rd February, 2024.

The Committee has formulated the Nomination and Remuneration Policy (‘BRNL Nomination and Remuneration Policy’) which broadly lays down the various principles of remuneration viz. support for strategic objectives, transparency, internal & external equity, flexibility, performance-driven remuneration, affordability and sustainability and covers the procedure for selection, appointment and compensation structure of Board Members, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) of your Company.

The BRNL Nomination and Remuneration Policy has been hosted on the website of the Company, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

During the year under review, no changes were made in the Nomination and Remuneration Policy of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company had constituted a CSR Committee, as required in terms of Section 135 of the Companies Act, 2013 and the Rules made thereunder.

The Corporate Social Responsibility Committee of your Company comprised of the following Members as on 31st March, 2023:

The Board of Directors had reconstituted the Corporate Social Responsibility Committee by way of a Circular Resolution passed on 6th July, 2023 as hereunder -

Both Mr. Shree Ram Tewari (DIN:07698268) and Mr. Rakesh Kumar Gupta (DIN: 06806891) have been re-designated as Independent Directors of your Company for a first term of 5 (five) consecutive years w.e.f. 12th August, 2023 at the 16th Annual General Meeting of the Company held on 29th September, 2023.

Miss. Ankita Rathi, Company Secretary acts as the Secretary to the Committee.

The brief Terms of Reference of the Committee has been provided in the Corporate Governance Report forming part of this Annual Report.

The Company has also framed a CSR Policy, in line with the provisions of Section 135 of the Companies Act, 2013, and the same has been hosted on the website of the Company, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report. Your Company strives to contribute towards CSR as per the line items included in Schedule VII to the Companies Act, 2013.

Two per cent. of the average net profits of your company made during the three immediately preceding financial years is negative, and therefore, your Company is not required to make any mandatory contribution towards CSR for the Financial Year 2023-24.

During the year under review, 2 (two) CSR Committee Meetings were held on 19th May, 2023 and 9th August, 2023.

As prescribed under Section 135 of the Companies Act, 2013, read with relevant rules, an Annual Report on CSR Activities has been set out as an Annexure to this Directors’ Report.

At the meeting of the Bord of Directors held on 12th August, 2023, the Corporate Social Responsibility Committee was dissolved w.e.f. 12th August, 2023 in line with the provisions of Section 135(9) of the Companies Act, 2013 and the functions of such Committee is being discharged by the Board of Directors of Your Company.

During the year under review, the CSR Policy was amended to reflect the dissolution of the CSR Committee and to state that the functions of such Committee is being discharged by the Board of Directors of your Company.

PERFORMANCE EVALUATION

The Nomination and Remuneration Committee (NRC) of your Company has formulated and laid down criteria for Performance Evaluation of the Board (including Committees) and Individual Directors (including Chairman, Managing Director and Independent Directors) covering, inter alia, the following parameters:

(i) Board Evaluation - degree of fulfillment of key responsibilities; Board culture and dynamics, amongst others;

(ii) Board Committee Evaluation - effectiveness of meetings; Committee dynamics, amongst others;

(iii) Individual Director Evaluation (including Chairman and Independent Directors) - Attendance, Contribution at Board Meetings, Guidance/support to management outside Board / Committee meetings, fulfilment of criteria of independence for independent Directors; etc., amongst others.

The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013, SEBI Listing Regulations, 2015 and in accordance with the Guidance Note on Board Evaluation issued by SEBI in January, 2017.

During the year under review, Annual Performance Evaluation was carried out by the Board of its own performance as well as evaluation of the working of various Board Committees, viz., Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee. This evaluation was led by the Chairman of the Board with specific focus on performance and effective functioning of the Board, its Committees and individual Directors. The Board evaluation was conducted through structured questionnaire designed with qualitative parameters and feedback based on ratings and was conducted after seeking inputs from all the directors.

Based on the above parameters, the performance of the Board and that of most of the Individual Directors (including Independent Directors) was evaluated and found to be effective. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

It was evaluated and found that the performance of Board Committees is effective, based on the ratings assigned and they are adequately composed (in terms of size, skill, expertise, experience, etc.) to carry out the responsibilities and addressing the objectives for which it has been set up by the Board. Also, there is clarity between the Board, Management and Committee w.r.t. the role played by the committee.

During the year under review, in a separate meeting of Independent Directors, performance of non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and Non-Executive directors. It was held unanimously that the Non-Independent Director, viz Managing Director brings to the Board, abundant knowledge in his field and is an expert in his area. Besides, he is insightful, convincing, astute, with a keen sense of observation, mature and has a deep knowledge of your Company. The Managing Director’s performance was rated as effective.

It was held unanimously agreed that other Non-Executive Non-Independent Directors actively engaged in the board’s deliberations and provided an independent perspective to drive strategic decision-making and objective judgement. Their performance was rated as effective.

The Board, as a whole, is an integrated, balanced and cohesive unit, where diverse views are expressed and discussed when required, with each Director bringing professional domain knowledge to the table. All Directors are participative, interactive and communicative. The Board’s performance was rated as effective.

The Chairman of the Board had abundant knowledge, experience, skills and understanding of the Board’s functioning, possesses a mind for detail, is meticulous to the core and conducts the Meetings with poise and maturity. The Chairman’s performance was rated as effective.

The information flow between your Company’s Management and the Board is satisfactory.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company is engaged in Infrastructure Sector, as stated in the Schedule VI to the Companies Act, 2013. By virtue of the provisions of Section 186(11), the provisions of Section 186, read with the Companies (Meeting of the Board and its Powers) Rules, 2014, as amended from time to time, relating to loan made, guarantee given or security provided, do not apply to your Company.

Particulars of loans, guarantees or investments given/made under section 186 forms part of the financial statements, forming part of this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

A Related Party Transactions Policy has been devised by your Company for, inter alia determining the materiality of transactions with related parties and dealings with them in line with the requirements of the SEBI Listing Regulations, 2015 and it intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

The said Policy is available on your Company’s website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm’s length and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015. Material Related Party Transactions as per SEBI Listing Regulations, 2015 and as per Companies Act, 2013 are placed before the Members for their approval.

During the year under review, your Company had entered into Material Related Party Transactions at an Arms Length Basis and in the Ordinary Course of Business, details of which, as required to be provided under section 134(3)(h) of the Companies Act, 2013, are disclosed in Form AOC-2 and forms part of this Annual Report.

Further, there are no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel, or other Designated Persons, during the year under review, which may have a potential conflict with the interest of the Company at large. Members may refer to the Notes to the Financial Statements for details of Related Party Transactions.

The Board of Directors recommend to the Shareholders of your Company to accord prior approval to the proposed Related Party Transactions proposed to be entered into by the Company during the period 1st October, 2024 to 30th September, 2025 (including subsequent material modification(s), if any to be made in the proposed RPTs), which may be material in terms of the said Regulations, at the ensuing Annual General Meeting of the Company.

POLICY FOR DETERMINING ‘MATERIAL’ SUBSIDIARIES

Your Company has formulated a Policy for determining Material Subsidiaries in accordance with the applicable laws. The said Policy is available on your Company’s website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

As on March 31, 2024, two subsidiaries of your Company, Solapur Tollways Private Limited (STPL) and Guruvayoor Infrastructure Private Limited (GIPL) are the Material Unlisted Subsidiaries of your Company, as per Regulation 16(1)(c) of the SEBI Listing Regulations, 2015.

POLICY AGAINST SEXUAL HARASSMENT AT WORKPLACE

Your Company is committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. Your Company in its endeavour to provide a safe and healthy work environment for all its employees has developed a policy to ensure zero tolerance towards verbal, physical, psychological conduct of a sexual nature by any employee or stakeholder that directly or indirectly harasses, disrupts or interferes with another’s work performance or creates an intimidating, offensive or hostile environment such that each employee can realize his/her maximum potential.

Your Company has put in place a ‘Policy on Prevention of Sexual Harassment’ as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. The Policy is meant to sensitize the employees about their fundamental right to have a safe and healthy environment at workplace. As per the Policy, any employee may report his/ her complaint to the Internal Complaint Committee constituted for this purpose. The said Policy is available on your Company’s website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

During the year under review, no cases of Sexual Harassment of Women were reported.

WHISTLE BLOWER POLICY (VIGIL MECHANISM)

Your Company has formulated a Whistle Blower Policy incorporating the provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013, and Regulation 22 of SEBI (LODR) Regulations, 2015 in order to encourage Directors and employees of your Company to escalate to the level of the Audit Committee, any issue of concerns impacting and compromising with the interest of your Company and its stakeholders in any way. Your Company is committed to adhere to highest standards of ethical, moral and legal business conduct and to open communication, and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle blowing in good faith.

The Company has also designated whistleblower@brnl.in, an e-mail ID for providing access to the employees of the Company to disclose any unethical and improper practice taking place in the Company for appropriate action and reporting. The said Policy is available on your Company’s website, www.brnl.in and a link to the said Policy has been provided elsewhere in this Annual Report.

No complaints were reported under the Whistle blower Policy during the year under review.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

During the Financial Year 2023-24, no significant and material orders have been passed by Regulators or Courts or Tribunals, impacting your Company’s going concern status and operations in future.

AUDITORS

Based on the recommendations of the Audit Committee and the Board of Directors, Messers S.S. Kothari Mehta & Co. LLP, Chartered

Accountants, were re-appointed as the Statutory Auditors of the Company for a second and final term of five consecutive years, to hold office from the conclusion of 15th AGM till the conclusion of the 20th AGM of the Company.

Further, vide notification dated 7th May, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in notice of the 17th AGM.

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud, during the year under review, to the Audit Committee of your Company.

AUDIT QUALIFICATIONS

M/s. S.S. Kothari Mehta & Co. LLP, Chartered Accountants and the Statutory Auditors of the Company have given a qualified opinion on the Standalone and Consolidated Financial Statements of the Company for the Financial Year ended on 31st March, 2024 w.r.t. non-recognition of interest on Rs 7,000 lakhs from July 01, 2019 onwards which, as per the statutory Auditors, is not in compliance of Ind AS 1 ‘Presentation of Financial Statements’ read with Ind AS 109 ‘Financial Instruments’. Due to this, loss before tax of the Company for the year ended March 31, 2024 has been understated by Rs. 894.95 lakhs and the current liabilities as at March 31, 2024 has been understated by Rs 4,244.88 lakhs.

The Board’s Comment on the qualified opinion given by the Statutory Auditors of the Company on the Standalone and Consolidated Financial Statements of the Company for the Financial Year ended on 31st March, 2024 has been suitably covered under notes to Accounts forming part of the Annual Report viz. note no. 15(ii) of the Standalone Financial Statements. The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self-explanatory and do not call for any further comment.

Further, the Auditors have also provided for "Emphasis of Matter" and "Key Audit Matters" (KAM) in the Auditors’ Report, which are self- explanatory.

SECRETARIAL AUDIT

Your Company had appointed M/s. M.R. & Associates, Practicing Company Secretary, Kolkata, as the Secretarial Auditor of the Company, for the Financial Year 2023-24, to conduct the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report for the Financial Year ended March 31, 2024 contains qualification as below and the said report has been set out as an Annexure to this Directors’ Report –

Non-compliance of Regulation 17(2) and 18(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as there was gap of more than 120 days between two consecutive Board Meetings and Audit Committee meetings conducted on 23.01.2023 and 25.05.2023 respectively.

Board’s comment on the qualification given by the Secretarial Auditors of the Company is as hereunder – The Board deeply regrets the oversight in complying with the requirements stipulated under Regulation 17(2) and 18(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. An accidental delay in adherence to these regulations occurred, purely due to inadvertence, and was in no way intentional or reflective of any deviation from our commitment to regulatory compliance. We would like to reaffirm that the Company is dedicated to upholding the highest standards of corporate governance and compliance with SEBI's regulatory framework. Immediate corrective actions have been initiated to prevent any recurrence of such an oversight in the future.

COST RECORDS AND AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 is not applicable for the business activities carried out by the Company.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the Company’s website https://brnl.in/wp-content/uploads/2024/09/Annual-Return-FY-2023-24.pdf

BRNL WEBSITE

The website of your company, www.brnl.in, is continually updated with the latest information and developments to ensure effective communication with all our stakeholders. It has been specifically designed and updated with information to offer an enhanced user experience, with improved data accessibility and a visually appealing interface. The website is built on the responsive WordPress platform, to ensure a consistent display across all devices, including mobile phones, tablets, and desktops, as well as compatibility with all operating systems. The design and data presentations adheres to SEBI’s Listing Obligations and Disclosure Requirements (LODR), ensuring that all necessary information is published, organised, and displayed in compliance with statutory laws.

The site features a comprehensive database of information relevant to investors, such as your company’s financial results, declared dividends, shareholding patterns, and any price-sensitive information disclosed to regulatory authorities. It also includes investor presentations, corporate profiles, business activities, project details, and the services offered by your company.

PARTICULARS OF EMPLOYEES

The prescribed particulars of remuneration of employees pursuant to the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been set out as an Annexure to this Directors’ Report.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has no specific activity relating to Conservation of Energy and Technology Absorption, as stipulated in Rule 8(3) of the Companies (Accounts) Rules, 2014. However, your Company uses information technology extensively in its operations and also continues its endeavour to improve energy conservation and utilisation, safety and environment in operation of its Subsidiary and Associate Companies.

Your Company’s operations are local and it has not earned and spent any foreign exchange during the year under review (Previous Year – Nil).

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of provisions of Section 134(3) and 134(5) of the Companies Act, 2013 (‘Act’), read with relevant Rules made thereunder, the Directors hereby confirm that:

(i) in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the Financial Year and of the profit of your Company for that period;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the Annual Accounts for the Financial Year ended 31st March, 2024 on a going concern basis;

(v) the Directors have laid down internal financial controls to be followed by your Company and that such internal financial controls are adequate and are operating effectively; and

(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Further, your Directors confirm that your Company has adequate internal systems and controls in place to ensure compliance of laws applicable to your Company.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on the Board/ Committee Meetings and General Meetings during the year under review.

INSIDER TRADING CODE

Your Company has adopted a Code of Conduct under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 to regulate, monitor and report trading by Designated Persons and their Immediate Relatives.

The Code is applicable to all Directors, Designated Persons and Insiders, who are expected to have access to Unpublished Prices Sensitive Information (UPSI). The Company Secretary is the Compliance Officer for monitoring adherence to the applicable Regulations.

FAIR DISCLOSURE CODE

Pursuant to Regulation 8 read with Schedule A of the SEBI (Prohibition on Insider Trading) Regulations, 2015, the Board of Directors of your Company have adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) which lays down the principles and practices to be followed by the Company pertaining to universal disclosure of UPSI. The Chief Financial Officer of the Company, also designated as Chief Investor Relations Officer, is authorised to deal with dissemination of information and disclosure of UPSI in a fair and unbiased manner. The Code has been made available on the Company’s website www.brnl.in.

CORPORATE GOVERNANCE

Your Company strives to achieve highest standards of Corporate Governance and to take necessary steps at appropriate times for enhancing and meeting stakeholders’ expectations while complying with the mandatory provisions of Corporate Governance.

As required under Regulation 34(3) of the SEBI Listing Regulations, 2015, read with Schedule V thereto, a separate section on Corporate Governance and a Certificate from M/s. M.R. & Associates, Kolkata - Practicing Company Secretaries, confirming compliance with the requirements of Corporate Governance, forms part of this Annual Report.

APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

No application was made against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review. Proceeding(s) pending under the Insolvency and Bankruptcy Code, 2016 during the year alongwith their status as at the end of the financial year is as hereunder-

APPLICATION FILED BY IL&FS FINANCIAL SERVICES LIMITED AGAINST THE COMPANY UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

IL&FS Financial Services Limited (IFIN), which had extended a Term Loan facility amounting to Rs. 70 Crores to your Company had filed an application u/s 7 of the Insolvency and Bankruptcy Code, 2016 against your Company before the Hon’ble National Company Law Tribunal (NCLT), Kolkata claiming its overdues.

Your Company also has a receivable of Rs. 114.19 Crores from IL&FS Group Company viz. IL&FS Transportation Networks Limited (ITNL). Hon’ble National Company Law Appellate Tribunal (NCLAT) has granted moratorium on recovery of such claims against all IL&FS Group Companies, including IFIN and ITNL.

Your Company has initiated appropriate measures for set off of this payable and recovery of the balance amount.

Further an application has been filed by IL&FS on July 18, 2023 before the Hon’ble NCLAT, New Delhi seeking an approval for unwinding / collapse of the transactions entered into with "third party borrowers" (which would include your Company) as against the dues of the relevant IL&FS group company "final borrower" (which in this case means ITNL), and further restricting the accrual of interest upto cutoff date i.e October 15, 2018. In view of this, on a joint request made by the parties before Hon’ble NCLT, the matter has been adjourned sine die of passing the order by Hon’ble NCLAT.

APPLICATIONS FILED BY ADMINISTRATOR OF SREI EQUIPMENT FINANCE LIMITED UNDER SECTION 60(5) AND 66 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016

(i) Your Company had received a Notice of Motion by Administrator of Srei Equipment Finance Limited preferred before the Hon’ble National Company Law Tribunal, Kolkata Bench (NCLT) in the matter of Reserve Bank of India vs. Srei Equipment Finance Limited wherein the Company and its subsidiaries inter alia were made a party amongst multiple respondents and the respondents have been alleged of fraudulent loan transactions as per section 60(5) and 66 of the Insolvency and Bankruptcy Code, 2016, based on a Transaction Audit Report relied upon by Srei Equipment Finance Limited.

(ii) Your Company had received an application filed by the Administrator of Srei Equipment Finance Limited ("Applicant") under section 60(5) and 66 of the Insolvency and Bankruptcy Code, 2016, before the Hon’ble National Company Law Tribunal, Kolkata Bench (NCLT) in the matter of Reserve Bank of India vs.

Srei Equipment Finance Limited wherein your Company inter alia was made a party amongst multiple respondents and it has been alleged that your Company along with some more respondents, have indulged in round tripping of funds.

In the opinion of the Board, the findings and allegations in the Report submitted are not based on proper appreciation of facts and that the said report is unilateral without affording any opportunity to the Company for discussion.

Necessary affidavits have been filed in both the matters which is yet to be heard by Hon’ble NCLT.

Your Company is taking necessary legal steps in this regard.

GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions w.r.t these items during the year under review:

• Issue of equity shares with differential rights as to dividend, voting or otherwise;

• Issue of sweat equity shares;

• Your Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees;

• There was no revision in the Financial Statements;

• There was no change in the nature of business; and

• There was no one time settlement done by the company for the loans availed from banks or financial institutions.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the excellent support and co-operation received from Financial Institutions, Bankers, National Highway Authority of India (NHAI), Ministry of Corporate Affairs (MCA), Registrar of Companies (ROC), EPC Partners and SPV Partners and other stakeholders during the year under review. Your Directors also place on record their deep appreciation for the valuable contribution made by the Company’s employees and look forward to their continued cooperation in realization of motto of the Company, "Behtar Raste, Badhta Bharat", in the years to come, as a Key partner of "MAKE IN INDIA" plans.