K E C International Ltd
Chairman Speech
Chairman Statement
The Directors have pleasure in presenting the Ninth Annual Report, along with the
audited accounts of the Company, for the year ended March 31, 2014.
1. Financial Results
|
|
|
|
Rs in crore |
| Particulars |
Consolidated |
Standalone |
|
FY14 |
FY13 |
FY14 |
FY13 |
| Net Revenue from Operations |
7,901.83 |
6,979.49 |
6,558.77 |
5,592.08 |
| EBITDA |
493.27 |
381.40 |
372.89 |
231.09 |
| Finance Cost |
263.27 |
194.40 |
231.42 |
164.81 |
| Depreciation & Amortisation |
70.52 |
56.08 |
55.42 |
43.05 |
| Profit Before Tax |
155.10 |
146.83 |
150.86 |
43.74 |
| Tax Expenses |
88.34 |
81.79 |
65.27 |
39.18 |
| Profit After Tax |
66.75 |
65.04 |
85.59 |
4.56 |
| Proposed Dividend on equity shares |
18.05 |
15.22 |
18.05 |
15.03 |
| (including tax on dividend) |
|
|
|
|
| Transfer to General Reserve |
8.56 |
0.45 |
8.56 |
0.45 |
2. Dividend
The Board of Directors has recommended a dividend of Rs 0.60 per equity share of Rs 2
each for the year ended March 31, 2014, on the equity share capital of the Company,
aggregating to Rs 15,42,53,022 (Rupees Fifteen Crore Forty Two Lacs Fifty Three Thousand
Twenty Two only). The dividend on equity shares is subject to the approval of the members
at the ensuing Annual General Meeting. Further the Board of Directors proposes to transfer
an amount of Rs 8.56 crore to the General Reserve.
3. Performance
Financial Performance
On a consolidated basis, the net revenue from operations increased by 13.21% to
Rs 7,901.83 crore. The net Profit increased by 2.6% to Rs 66.75 crore. On a standalone
basis, the net revenue from operations increased by 17.29% to Rs 6,558.77 crore, while the
net Profit was Rs 85.59 crore in FY14, as compared to Rs 4.56 crore in FY13.
During the year under review, several measures have been taken for improving the
performance of the Company and to secure new orders across various businesses and
geographies. The order intake for the year increased by 13.34% to Rs 8,482 crore. The
closing order book has increased by 7.7% to Rs 10,200 crore by FY14 end.
While the transmission business continued to perform well both in terms of revenue and
Profitability, the overall Profitability of the Company on consolidated basis was impacted
due to revenue de-growth in the wholly owned subsidiary
SAE Towers. It was also impacted due to time and cost overruns in Railways, Power
Systems and Water businesses. In the Cables business Profitability was impacted due to
pricing pressure as also higher costs at the new manufacturing facility established at
Vadodara.
Operational highlights
The key highlights for the Company’s various businesses are as follows:
Power Transmission & Distribution: This is the Company’s largest business
vertical which provides end-to-end solutions for power evacuation from generating stations
to consumer distribution points.
The order intake for the business increased by 12.1% to Rs 6,951 crore. The orders came
from across all the regions. These also include large value orders from Tanzania Rs
(772 crore), Saudi Arabia (Rs 708 crore) and Afghanistan (Rs 590 crore).
The Company is also leveraging its strong global EPC expertise along with a local
foothold in American market through SAE Towers. During FY14, SAE towers entered in EPC
business and secured two transmission line EPC orders in Brazil. These orders were of
approx. Rs 94 crore.
The Company also expanded its international presence in Substation space by securing
orders in Laos, Philippines, Malaysia, Saudi Arabia and Afghanistan during the year.
Further, the Company has increased its presence in Gas Insulated Substations (GIS) by
securing a
Rs 102 crore order in Bihar.
SAE Towers completed expansion of its pole production capacity at its existing facility
in Mexico from 5,000 MTs to 12,000 MTs per annum. In addition to this, the Company has
also completed expansion of its tower manufacturing capacity at its existing facilities in
Jaipur, Jabalpur and Nagpur from 1,74,000 MTs to 2,11,200 MTs per annum.
Cables: Consequent upon the commencement of the new plant at Vadodara, the
manufacturing facility at Thane has been closed down and the Company has entered into an
agreement for sale of this land. The complete range of products manufactured at Thane
plant are now being manufactured at the Vadodara plant. The annual order intake for the
business increased by 26.5% to Rs 855 crore in FY14.
Railways: The Company has secured a large composite order from the Rail Vikas Nigam
Limited, India. The order includes electrification, civil works, signalling and
telecommunication works in the state of Uttar Pradesh and the order value is Rs 228 crore.
The Company also intends to target projects related to Metro and dedicated freight
corridors in partnerships with other Indian and foreign players.
Water: The Company secured two Sewage Treatment orders in Bengaluru and Uttarakhand of
total Rs 205 crore. In addition to this, it secured its first ever Dam construction order
in Madhya Pradesh of Rs 99 crore. Further, it also secured Canal construction orders in
Madhya Pradesh of
Rs 75 crore. Based on orders in hand and execution in FY14, the Company is also
building its pre-qualification base in this business.
4. Listing
The Equity Shares of the Company continue to remain listed on BSE Limited and National
Stock Exchange of India Limited. Further during the year the Company has listed its equity
shares on MCX Stock Exchange Limited. The stipulated listing fees for FY15 have been paid
to all the above Stock Exchanges.
5. Fixed Deposits
The Company has not accepted any deposits within the meaning of Sections 58A and 58AA
of the Companies Act, 1956, and the Rules framed thereunder and any re-enactments
thereof.
6. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and
Outgo
The particulars relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo, as required to be disclosed under Section 217(1) (e) of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, are provided in the prescribed format as an annexure to
this Report.
7. Management Discussion and Analysis and Corporate Governance Report
In compliance with Clause 49 of the Listing Agreement entered into with the Stock
Exchanges, a separate section on Management Discussion and Analysis, as approved by the
Board of Directors, which includes details on the state of affairs of the Company as
required to be disclosed in the Directors’ Report forms a part of this Annual Report.
Further, the Corporate Governance Report, duly approved by the Board of Directors,
together with a certificate from the Statutory Auditors confirming the compliance with the
requirements of Clause 49, also forms a part of this Annual Report.
8. Subsidiary Companies
At the beginning of FY14, the Company had twenty two direct and step down subsidiary
companies. One step down subsidiary company has been incorporated in Mexico to explore the
business opportunities in EPC business. Accordingly, the number of direct and step down
subsidiaries of the Company stands increased to twenty three as on the date of this
Report. The details pertaining to subsidiaries are mentioned under the statement made
pursuant to Section 212 of the Companies Act, 1956, which forms a part of this Annual
Report.
Ministry of Corporate Affairs vide Circular No: 02 / 2011 dated February 08, 2011, has,
subject to compliance with certain conditions, granted general exemption to the companies
from applicability of Section 212 of the Companies Act, 1956. As per the general
exemption, a statement containing brief financial details of the Company’s
subsidiaries for the year ended March 31, 2014, is included in this Annual Report. The
Annual Accounts of these subsidiaries and the related detailed information will be made
available to any Member of the Company / its subsidiaries seeking such information at any
point of time and are also available for inspection by any Member of the Company / its
subsidiary(ies) at the Registered Office of the Company / its subsidiary(ies).
9. Consolidated Financial Statements
In accordance with Clause 32 of the Listing Agreement entered into with the Stock
Exchanges, the Consolidated Financial Statements of the Company, including the financial
details of all the subsidiary companies of the Company, forms part of this Annual Report.
The consolidated Financial Statements have been prepared in accordance with the Accounting
Standards issued by the Institute of Chartered Accountants of India.
10. Directors
In accordance with the provisions of the Companies Act,
2013,Mr.H.V.GoenkaandMr.A.T.Vaswani,areliabletoretire by rotation and eligible for
re-appointment at the ensuing Annual General Meeting. Further the Board of Directors has
appointed Mr. Vinayak Chatterjee as an Additional Director w.e.f. April 30, 2014. Pursuant
to Section 161 of the Companies Act, 2013, and Article 124 of the Articles of Association
of the Company, Mr. Vinayak Chatterjee holds Office upto the date of the ensuing Annual
General Meeting of the Company and is eligible for appointment as Director. Further as per
the provisions of the Companies Act, 2013, the independent directors of the Company will
have to be appointed by the members for a term upto five years, and no independent
director shall be liable to retire by rotation. Further Mr. S. S. Thakur, Mr. G. L.
Mirchandani, Mr. D. G. Piramal, Mr. S. M. Kulkarni, Mr. S. M. Trehan and Mr.
Vinayak Chatterjee have given declaration to the Company under Section 149(6) of the
Companies Act, 2013, that they qualify the criteria of independence mentioned under that
sub-section. Accordingly it is proposed to appoint them as independent directors not
liable to retire by rotation for a term of five years from the ensuing Annual General
Meeting.
In view of the provisions of Section 165 of the Companies Act, 2013, which restricts
the directorship of a director in ten public limited companies and the proposed amendment
to the Listing Agreement entered into with the Stock Exchanges, which restricts the
directorships of independent directors to seven listed companies only, Mr. M. K. Sharma,
who was a director of the Company resigned from his Office w.e.f. March 31, 2014. The
Board places on record its sincere appreciation for the valuable services rendered by Mr.
M. K. Sharma during his tenure as the Member of the Board.
In compliance with Clause 49 IV (G) of the Listing Agreement, brief resume, expertise
and other details of all the directors proposed to be appointed / re-appointed are
attached to the Notice of the ensuing Annual General Meeting.
The Board of Directors recommends to the members the appointment of the above referred
independent directors and the re-appointment of Mr. H. V. Goenka and Mr. A. T. Vaswani as
the directors of the Company.
11. Auditors
Statutory Auditors
In view of the provisions of Section 139 of the Companies Act, 2013, and the Rules made
thereunder, a listed company cannot appoint an audit firm as the Auditors of the Company
for more than two terms of five consecutive years and which shall be subject to
ratification by the members at every Annual General Meeting. For reckoning this term, the
period already served by the firm as auditors shall be counted. According to the
Illustration 2 appended to sub-rule 3 of Rule 6 of the Companies (Audit and Auditors)
Rules, 2014, every firm of the Auditors who has completed 7 or more years as an Auditor of
the prescribed classes of companies (including listed companies), can be appointed as an
Auditor for a further period upto three years only. Accordingly Delloitte Haskins &
Sells (DHS) is entitled to be appointed as Statutory Auditors of the Company for a further
period upto three years. In view of the same it is proposed to appoint DHS as the
Statutory Auditors of the Company to hold Office from the conclusion of the ensuing Annual
General Meeting until the conclusion of the Twelfth Annual General Meeting and to
authorise the Board of Directors to fix their remuneration. The Company has received a
letter from DHS to the effect that their appointment, if made, would be within the limits
prescribed under the provisions of the Companies Act, 2013 and that they are not
disqualified for such appointment within the meaning of the said Act. The Board of
Directors recommends the appointment of DHS as the Statutory Auditors of the Company for a
period of three years.
Branch Auditors
In terms of Section 143(8) of the Companies Act, 2013, the audit of the accounts of the
branch Offices of the Company located outside India is required to be conducted by the
person(s) or firm(s) qualified to act as Branch Auditors. The Board of Directors
recommends to the members to pass the resolution, as stated in Item No.6 of the Notice,
convening the ensuing Annual General Meeting.
Cost Auditors
The Central Government has approved the appointment of M/s. Kirit Mehta & Co., Cost
Accountants, Mumbai, as Cost Auditors, for conducting Cost Audit in relation to Electrical
Cables and Conductors and Steel Towers manufactured by the Company for FY14 under The
Companies (Cost Accounting Records) Rules, 2011. The Cost Audit Report and the Compliance
Report for FY13 was filed by the Cost Auditors with the Ministry of Corporate Affairs on
September 30, 2013.
12. Policy on Code of Conduct and Ethics
The RPG Group has laid down a Code of Conduct and Ethics (Code) applicable to all the
employees in RPG Group companies. The Code provides for the matters related to governance,
compliance, ethics and other matters within the RPG Group companies. The Code also
includes the policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women
at Workplace in accordance with the provisions of Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
13. Awards Received During the Year
For FY 14 the Company was conferred with the ‘Utkrishta Puraskar’ i.e. Best
Transmission Line Company Award and ‘Sahbhagita Puraskar’ i.e. Support Outside
Line of Duty Award from Power Grid Corporation of India Limited. Further the Company also
won the prestigious, "Best Employer Award, 2013" by Aon Hewitt and the
"Indo-American Corporate Excellence Award" by the Indo-American Chambers of
Commerce for best Indian company operating in US. The details of these Awards &
Recognition are mentioned on page 18 & 19 of this Annual Report
14. Directors’ Responsibility Statement
The Board of Directors would like to affirm that the financial statements for the year
under review conform in their entirety to the requirements of the Companies Act, 1956. As
stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the
Company hereby state and confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2014, the
applicable Accounting Standards have been followed; (ii) such accounting policies have
been selected and applied consistently and judgments and estimates made that are
reasonable and prudent, so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the Profit of the Company for the year
under review; (iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 1956,
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities; (iv) the annual accounts for the financial year ended March 31,
2014, have been prepared on a going concern basis.
15. Particulars of Employees
In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended, the names and other
particulars of the employees are required to be set out in the Annexure to the
Directors’ Report. However, as per the provisions of Section 219(1)(b)(iv) of the
said Act, the Annual Report, excluding the aforesaid information, is being sent to all the
members of the Company and others entitled thereto. Members who are desirous of obtaining
such particulars are requested to write to the Company Secretary of the Company.
16. Acknowledgement
Your Directors take this opportunity to thank the Customers, Vendors, Financial
Institutions, Banks and all other stakeholders for their continued co-operation and
support to the Company. Further the Directors would also like to thank the Central and
State Government authorities and Regulatory authorities for their support.
Your Directors appreciate and value the trust reposed and faith shown by every
shareholder of the Company.
Last but not least the Board wishes to place on record its deep gratitude to all its
employees whose enthusiasm, team efforts, devotion and sense of belongingness has made
this Company proud.
|
For and on behalf of the Board of Directors |
|
H. V. Goenka |
|
Chairman |
| Place: Mumbai |
|
| Date: April 30, 2014 |
|
  Â
K E C International Ltd
Directors Reports
To the Members of KEC International Limited
The Directors are pleased to present the Thirteenth Annual Report of the Company
together with the Consolidated and Standalone Audited Financial Statements of the Company
for the financial year ended on March 31, 2018.
1. FINANCIAL RESULTS
(Rs. in Crore)
| Particulars |
Consolidated |
|
Standalone |
|
|
FY 2017-18 |
FY 2016-17 |
FY 2017-18 |
FY 2016-17 |
| Revenue from Operations |
10,096.37 |
8,755.05 |
9,075.74 |
7,737.09 |
| EBITDA |
1,006.18 |
817.88 |
910.13 |
710.67 |
| Finance Cost |
246.61 |
253.61 |
195.81 |
208.83 |
| Depreciation & Amortisation |
109.74 |
129.69 |
95.43 |
115.39 |
| Profit Before Tax |
690.24 |
463.44 |
641.48 |
423.53 |
| Tax Expenses |
229.82 |
158.67 |
211.43 |
141.71 |
| Profit After Tax |
460.42 |
304.78 |
430.05 |
281.82 |
| Dividend on equity shares (including tax on dividend) |
74.26 |
49.51 |
74.26 |
49.51 |
2. PERFORMANCE
Financial Performance
The Company continued its growth trajectory in FY 2017-18.
On a consolidated basis, the Company achieved a turnover of ` 10,096 Crore, with a 15
percent growth over FY 2016-17. Revenue growth was mainly seen in Transmission
& Distribution ("T&D") and Railways businesses. Profitability showed
improvement with EBITDA margins on a consolidated level expanding by 62 bps in FY 2017-18
to reach 10 percent. The net profit for the year was ` 460 Crore in FY 2017-18 as against
` 305 Crore in FY 2016-17, a robust growth of 51 percent. The Company could achieve
substantial reduction in its interest costs through better working capital management. On
a standalone basis, the Company achieved a turnover of ` 9,076 Crore and a net profit of `
430 Crore.
During the year, the Company secured orders of ` 15,098 Crore, which is a healthy 22
percent increase over last year. The sharp increase in order intake was led by the
Railways business which gained from the increased spending on railway infrastructure in
the country. The order intake was also enhanced by T&D business which made substantial
inroads in Brazil and SAARC regions. The closing order book of the Company was at ` 17,298
Crore, with a significant contribution from verticals like Railways and Civil.
Power Transmission & Distribution - The Power Transmission and Distribution
business continues to be the largest business vertical which includes construction of
power transmission lines on turnkey basis as well as construction of Gas Insulated
Substations (GIS) and Air Insulated Substations (AIS) on turnkey basis. During the year,
the T & D business secured orders of
` 9,681 Crore across both domestic and international markets.
In the domestic markets, the Company has successfully broadened its customer base to
include private players who are setting up power transmission projects in India, as well
as State Electricity Boards.
On the international front, the Company was able to achieve significant order intake
from Brazil (through its wholly owned subsidiary) and in the SAARC region. The Company
continued to receive order infiows from other geographies such as MENA and Africa.
Railways - The Railways business witnessed strong growth both in terms of order
intake as well as revenue. The order intake was significantly higher at ` 3,910 Crore
amounting to 26 percent of the total order intake. The business achieved revenues
of ` 844 Crore in FY 2017-18 against ` 446 Crore in FY 2016-17
Civil - The Civil business bagged orders of ` 483 Crore in FY 2017-18 and
was profitable in its first year of commercial operations. Civil business was able to also
establish itself across good clients base.
Solar - The Company continued the execution of its Solar projects in hand during FY
2017-18. However, due to various issues such as increasing module prices, customs duty
imposition on Solar Panels and GST rate anomalies the order intake in this business
remained muted.
Cables - The Cables business secured orders worth ` 1,024 Crore in FY 2017-18. The
Company merged its Silvassa plant operations with Vadodara plant in the last quarter of
FY 2017-18 for better operational efficiencies. Due to higher GST and shifting of
Silvassa plant, the revenue of Cables business got impacted in FY 2017-18.
3. DIVIDEND
The Board of Directors is pleased to recommend a final dividend of ` 2.40 per equity
share i.e.
120 percent of the nominal value of ` 2/- each for the financial year ended March 31,
2018 (previous year final dividend of
` 1.60/- per equity share of nominal value of ` 2/- each). The dividend, if approved by
the Members in the ensuing Annual General Meeting, would involve a cash outfiow of ` 74.26
Crore, including Dividend Distribution Tax of ` 12.56 Crore.
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended ("the Listing
Regulations"), the Company has formulated a Dividend Distribution Policy which is
enclosed herewith as AnnexurefiA, and is also available on the website of the
Company at http://www.kecrpg.com/policies.
4. SHARE CAPITAL
The paid up Equity Share Capital of the Company as on March 31, 2018 was ` 51.42 Crore.
There was no change in the share capital during the year under review.
5. DEBENTURES
As on March 31, 2018, the Company has 2,500 secured, rated, listed, non-convertible,
redeemable, taxable Debentures (Series I, II and III) of the face value of ` 1,000,000/-
each aggregating to ` 250 Crore issued on a private placement basis. The redemption/
repayment is in accordance with the terms of the respective series of Debentures. These
Debentures are listed on BSE Limited.
6. FIXED DEPOSITS
The Company has not accepted any deposits within the meaning of sub-section (31) of
Section 2 and Section 73 of the Companies Act, 2013 ("the Act") and the Rules
framed thereunder. As on March 31, 2018, there were no deposits lying unpaid or unclaimed.
7. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The loans given, investments made and guarantees given & securities provided during
the year under review, are in compliance with the provisions of the Section 186 of the Act
and Rules made thereunder and details thereof are given in the Notes to the Standalone
Financial Statements.
8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT, BUSINESS RESPONSIBILITY REPORT AND
CORPORATE GOVERNANCE REPORT
In terms of Regulation 34 of the Listing Regulations, a separate section on Management
Discussion and Analysis, Business Responsibility Report and Corporate Governance
Report together with a certificate from a Practicing Company Secretary confirming
compliance with the Regulations relating to Corporate Governance of the Listing
Regulations form part of this Annual Report.
9. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of sub-section (3) of Section 129 of the Act and the
Listing Regulations, the Consolidated Financial Statements of the Company, including the
financial details of all the subsidiary companies, form part of this Annual Report. The
Consolidated Financial Statements have been prepared in accordance with the Accounting
Standards prescribed under Section 133 of the Act.
10. SUBSIDIARY AND ASSOCIATE COMPANIES
The Company has seventeen subsidiaries as on March 31, 2018 comprising of seven direct
subsidiaries and ten step down subsidiaries. The Company also has one associate company in
India.
During the year, five step down subsidiaries of the Company located at Delaware, USA
namely KEC International Holdings LLC, KEC Brazil LLC, KEC Mexico LLC, KEC Transmission
LLC and KEC US LLC have been merged with SAE Towers Holdings LLC, a step down subsidiary
at Delaware, USA with effect from September 29, 2017.
During the year, the Company has acquired 2.10 percent shares in Al Sharif Group &
KEC Limited Company, a Joint Venture company located in Saudi Arabia. Consequent to such
acquisition, the shareholding of the Company has increased from 49 percent to 51.10
percent and the Joint Venture company has become a subsidiary of the Company with effect
from March 26, 2018.
Pursuant to the provisions of sub-section (3) of Section 129 of the Act and read with
Rule 5 of Companies (Accounts) Rules, 2014, the salient features of the Financial
Statements of each of the subsidiaries and associate companies are set out in the
prescribed Form AOC-1, which forms part of the Financial Statements section of the Annual
Report.
Pursuant to the provisions of Section 136 of the Act, the financial statements of these
subsidiaries are uploaded on the website of the Company i.e. www.kecrpg.com under
‘Investors’ tab and shall also be available for inspection by any Member at the
Registered Office of the Company on all working days (Monday to Friday) during business
hours till the date of ensuing Annual General Meeting. Any Member desirous of having a
copy of Financial Statements of subsidiary companies can obtain the same from the Company
by making a written request in this regard.
Pursuant to the Listing Regulations, the Company has formulated a policy for
determining its ‘material subsidiaries’.
The said Policy is uploaded on the website of the Company at
http://www.kecrpg.com/policies.
11. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to the provisions of clause (c) of sub-section (3) and sub-section (5) of
Section 134 of the Act, the Board of Directors of the Company hereby confirms that: 1. in
the preparation of the annual accounts for the financial year ended on March 31, 2018,
applicable Accounting Standards have been followed and no material departures have been
made from the same; 2. we have selected such accounting policies and applied 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 the Company as at March 31, 2018 and of the
profit of the Company for the year ended on that date; 3. we have taken proper and
sufficient care 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; 4. we have prepared the annual
accounts for the financial year ended on March 31, 2018 on a going concern basis; 5. we
have laid down internal financial controls and the same have been followed by the Company
and that such internal financial controls are adequate and were operating effectively; and
6. we have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
12. DIRECTORS & KEY MANAGERIAL PERSONNEL 12.1 Directors
During the year under review, Mr. S. S. Thakur, Independent Director ceased to be a
Director pursuant to his resigning from the directorship of the Company w.e.f. the close
of business hours on November 06, 2017. The Board has placed on record its appreciation
for the valuable contributions made by Mr. Thakur during his long association as a
Director of the Company.
With a view to further strengthen the Board of the Company, the Board has, pursuant to
the provisions of Section 149 of the Act and the Listing Regulations, appointed Ms.
Manisha Girotra as an Independent Director of the Company for a period of five years with
effect from February 06, 2018, subject to approval of the Members of the Company at the
ensuing Annual General Meeting.
Pursuant to the provisions of sub-section (6) of Section 152 of the Act, Mr. Ramesh D.
Chandak, Non-Executive Director, is liable to retire by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for re-appointment.
Under sub-regulation (1A) of Regulation 17 of the SEBI (Listing Obligations and
Disclosure Requirements) (Amendment) Regulations, 2018, which would be effective from
April 01, 2019, it is required to avail approval of Members by way of
Special Resolution to appoint or continue the directorship of Non-Executive Directors
who have attained the age of seventy five years. Mr. A. T. Vaswani and Mr. S. M. Kulkarni,
Non-Executive Directors, have attained the age of seventy-five years and Mr. G. L.
Mirchandani, Non-Executive Director, would be attaining the age of seventy-five years in
June 2018. It is proposed to obtain the approval of Members in the ensuing Annual
General Meeting for continuation of directorship of Mr. A. T. Vaswani, Mr. S. M.
Kulkarni and Mr. G. L. Mirchandani.
In compliance with sub-regulation (3) of Regulation 36 of the Listing Regulations,
brief resume, expertise and other details of the Director(s) proposed to be appointed/
re-appointed are given in the Notice convening the ensuing Annual General Meeting.
The Board recommends the appointment of Ms. Manisha Girotra, re-appointment of Mr.
Ramesh D. Chandak as Directors of the Company and the continuation of directorship of Mr.
A. T. Vaswani, Mr. S. M. Kulkarni and Mr. G. L. Mirchandani in the ensuing Annual General
Meeting.
12.2 Key Managerial Personnel (KMP)
Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act
read with the Rules framed thereunder, the following persons were Key Managerial Personnel
of the Company as on March 31, 2018:
1. Mr. Vimal Kejriwal, Managing Director & CEO;
2. Mr. Rajeev Aggarwal, Chief Financial Officer; and
3. Mr. Ch. V. Jagannadha Rao, Vice President-Legal & Company Secretary.
Mr. Ch. V. Jagannadha Rao, Vice President-Legal & Company Secretary has resigned
from the services of the Company with effect from close of business hours on April 30,
2018.
12.3 Declaration by Independent Directors
In terms of the provisions of sub-section (6) of Section 149 of the Act and Regulation
16 of the Listing Regulations, the Company has received declarations from all the
Independent Directors of the Company that they meet with the criteria of independence as
provided in the Act and the Listing Regulations. There has been no change in the
circumstances affecting their status as an Independent Director during the year. Further,
the Non-Executive Directors of the Company had no pecuniary relationship or transactions
with the Company, other than sitting fees, commission and reimbursement of expenses, if
any, incurred by them for the purpose of attending meetings of the Company.
12.4 Board Evaluation
Pursuant to the provisions of the Act and the Listing Regulations, the Board has
carried out an annual evaluation of its own performance and that of its Committees as well
as performance of the Directors individually. In order to have a fair and unbiased view of
all the Directors, the Company engaged the services of an external agency to facilitate
the evaluation process. The Directors were provided with an electronic platform to record
their views and a consolidated report was generated by the agency based on the views
expressed by all the Directors. The reports generated out of the evaluation process were
placed before the Board at its meeting and noted by the Directors.
Further, a meeting of Independent Directors, chaired by Mr. A. T. Vaswani, Lead
Independent Director, was held pursuant to Schedule IV of the Act and the Listing
Regulations to review the performance of the Chairman, Non-Independent Directors of the
Company and the performance of the Board as a whole. The Directors also discussed the
quality, quantity and timeliness of fiow of information between the Company management and
the Board, which is necessary for the Board to effectively and reasonably perform their
duties. The feedback of the meeting was shared with the Chairman of the Company.
12.5 Policy on appointment and remuneration of Directors, Key Managerial Personnel and
Senior Management Personnel
The Board of Directors has adopted a Nomination and Remuneration Policy in terms of the
provisions of sub-section (3) of Section 178 of the Act dealing with appointment and
remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The
policy covers criteria for determining qualifications, positive attributes, independence
and remuneration of its Directors, Key Managerial Personnel and Senior Management
Personnel. The said Policy is annexed to this Report as Annexure ‘B’.
12.6 Meetings of the Board of Directors
The Board of Directors met five times during the year. The details of these meetings
are given in the Corporate Governance Report which forms part of this Annual Report.
Further, the Board has also dealt with certain items through circular resolutions, which
were confirmed by the Directors at the subsequent Board meeting.
12.7 Meetings of the Audit Committee
The Audit Committee met eight times during the year. The details of the meetings,
composition of the Committee and terms of the reference of the Committee are given in the
Corporate Governance Report.
13. AUDITORS 13.1 Statutory Auditors
Price Waterhouse Chartered Accountants LLP, Chartered Accountants (Firm’s
Registration No. 012754N/ N500016) ("PwC"), were appointed as the Statutory
Auditors of the Company to hold office for a period of five years from the conclusion of
the Twelfth Annual General Meeting until the conclusion of the Seventeenth Annual General
Meeting. The said appointment of the Statutory Auditors was required to be ratified at
every Annual General Meeting. However, pursuant to the amendment in the proviso to Section
139 which has been made effective on May 07, 2018, the requirement of ratification of
appointment of Statutory Auditors at every Annual General Meeting has been omitted. In
view of such omission of proviso, agenda item relating to ratification of Statutory
Auditors is not included in the Notice of ensuing Annual General Meeting. Pursuant to the
same, PwC continues to hold the office of Statutory Auditors for the FY 2018-19.
The Statutory Auditors’ Report for the FY 2017-18 does not contain any
qualifications, reservations, adverse remarks or disclaimer and no frauds were reported by
the Auditors to the Company under sub-section (12) of Section 143 of the Act.
13.2 Branch Auditors
In terms of provisions of sub-section (8) of Section 143 of the Act read with Rule 12
of the Companies (Audit and Auditors) Rules, 2014, the audit of the accounts of the branch
offices of the Company located outside India is required to be conducted by the person(s)
or firm(s) qualified to act as Branch Auditors in accordance with laws of the respective
countries. The Board of Directors seek approval of the Members to authorise the Board of
Directors/ Audit Committee to appoint Auditors for the branch offices of the Company and
also to fix their remuneration. The Board of Directors recommends to the Members, the
resolution as stated in Item No. 4 of the Notice convening the ensuing Annual General
Meeting.
13.3 Cost Auditors
In terms of the provisions of Section 148 of the Act read with Rule 14 of the Companies
(Audit and Auditors) Rules, 2014, the cost records, in respect of manufacturing of Steel
towers and Cables, are required to be audited by a qualified Cost Accountant. The Cost
Auditors’ Report does not contain any qualifications, reservations, adverse remarks
or disclaimer. The Board of Directors, upon the recommendation of the Audit Committee, has
appointed M/s. Kirit Mehta and Associates, Cost Accountants (Firm’s Registration No.:
000353) to conduct audit of the cost records of the Company for the FY 2018-19. In
accordance with the above provisions, the remuneration payable to the Cost Auditor is
required to be ratified by the Members in a General Meeting. Accordingly, the Board of
Directors recommends to the Members, the resolution as stated in Item No. 5 of the Notice
convening the ensuing Annual General Meeting.
The Company has filed the Cost Audit Report for the FY 2016-17 with the Ministry
of Corporate Affairs on August 31, 2017.
13.4 Secretarial Auditors
In terms of the provisions of Section 204 of the Act and Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had
appointed M/s. Parikh Parekh & Associates, Practicing Company Secretaries, as
Secretarial Auditors to conduct Secretarial Audit for the FY 2017-18. The Secretarial
Audit Report in Form MR-3 is annexed to this report as Annexurefi‘C’. The
said Secretarial Audit Report does not contain any qualifications, reservations or adverse
remarks.
14. CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a Corporate Social Responsibility ("CSR")
Committee, in terms of the provisions of Section 135 of the Act read with the Companies
(Corporate Social Responsibility Policy) Rules, 2014, inter alia to give strategic
direction to the CSR initiatives, formulate and review annual CSR plans and programmes,
formulate annual budget for the CSR programmes and monitor the progress on various CSR
activities. Details of the composition of the CSR Committee have been disclosed separately
as part of the Corporate Governance Report. In accordance with Schedule VII of the Act,
the Company had adopted a CSR Policy outlining various CSR activities to be undertaken by
the Company in the areas of health, water, sanitation, promoting education, skill
development etc. The CSR policy of the Company is available on the Company’s website
i.e. www.kecrpg.com under ‘Investors’ tab.
During the year under the review, the Company was required to spend 2 percent of the
average net profits for the preceding three financial years calculated in terms of the
provisions of Section 198 of the Act. The report on CSR activities as required under the
Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure
‘D’.
15. POLICY ON CODE OF CONDUCT & ETHICS AND SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has adopted the RPG Code of Corporate Governance & Ethics ("RPG
Code") applicable to all the Directors and employees of the Company. The RPG Code
provides for the matters related to governance, compliance, ethics and other matters.
The Company has adopted a Policy on Prevention of Sexual Harassment at Workplace
("the Policy") to ensure prevention, prohibition and redressal of sexual
harassment at workplace in accordance with the provisions of Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy has been formed to
prohibit, prevent or deter the commission of the acts of sexual harassment at workplace
and to provide the procedure for redressal of complaints pertaining to sexual harassment.
The Company is an equal employment opportunity provider and is committed for creating a
healthy working environment that enables employees to work without fear of prejudice,
gender bias and sexual harassment. The Company also believes that all employees of the
Company have the right to be treated with dignity.
An Internal Complaints Committee (ICC) has been set up to redress complaints received
regarding sexual harassment. All employees are covered under this Policy and the Policy is
gender neutral. During the year under review, no complaints of any nature were received.
16. VIGIL MECHANISM
The Vigil Mechanism as envisaged in the provisions of sub-section (9) of Section 177 of
the Act, the Rules framed thereunder and Regulation 22 of the Listing Regulations is
implemented by the Company through a Whistle Blower Policy to enable the Directors, its
employees to voice their concerns or observations without fear, or raise reports of
instance of any unethical or unacceptable business practice or event of misconduct/
unethical behavior, actual or suspected fraud and violation of RPG Code etc. to the
Corporate Ethics and Governance Committee.
Under the Whistle Blower Policy, confidentiality of those reporting violation(s) is
protected and they shall not be subject to any discriminatory practices. The Policy also
provides for adequate safeguards against victimization of persons who use such mechanism
and make provision for direct access to the Chairman of the Audit Committee in appropriate
and exceptional cases. The Policy can be accessed on the Company’s website i.e.
www.kecrpg.com under ‘Investors’ tab.
17. RISK MANAGEMENT POLICY
The Company is engaged in Engineering, Procurement and Construction ("EPC")
business and is exposed to various risks in the areas it operates. The Company has a
well-defined risk management framework in place which works at various levels across the
enterprise. The risk management mechanism forms an integral part of the business planning
and review cycle of the Company and it is designed to provide reasonable assurances that
goals are achieved by integrating management control into daily operations, by ensuring
compliance with legal requirements and by safeguarding the integrity of the Company’s
financial reporting and its related disclosures. The identification, analysis and putting
in place the process for mitigation of these risks is an ongoing process.
The Company has formed an internal Risk Management Committee of Senior Management and
also takes help of external professionals to identify various risks on periodical basis.
The Audit Committee reviews these risks on periodical basis and ensures that the
mitigation plan is in place. The Company also has a mechanism in place to inform the Board
Members about risk assessment, minimization procedures and periodical review thereof.
The risks faced by the Company and the various measures taken by the Company are
detailed in Management Discussion and Analysis section.
18. INTERNAL FINANCIAL CONTROL
Details in respect of adequacy of internal financial controls with reference to the
Financial Statements are stated in Management Discussion and Analysis section.
19. RELATED PARTY TRANSACTIONS
All transactions entered into by the Company with related parties were in the ordinary
course of business and on arm’s length basis. The Audit Committee grants omnibus
approval for the transactions that are in the ordinary course of the business and
repetitive in nature. For other transactions, the Company obtains specific approval of the
Audit Committee before entering into any such transactions. Disclosures as required under
Indian Accounting Standards ("IND AS")-24 have been made in the Note No. 48 to
the Standalone Financial Statements.
There are no materially significant related party transactions entered into by the
Company with its Directors/ Key Managerial Personnel or their respective relatives, the
Company’s Promoter(s), its subsidiaries/ joint ventures/ associates or any other
related party, that may have a potential confiict with the interest of the Company at
large. The policy on related party transaction, as formulated by the Board is available on
the Company’s website i.e. www.kecrpg.com under ‘Investors’ tab.
20. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of sub-section (3) of Section 92 and sub-section (3) of
Section 134 of the Act and the Companies (Management and Administration) Rules, 2014, the
extract of the Annual Return as on March 31, 2018 in the prescribed Form MGT-9 is enclosed
as Annexure ‘E’.
21. ENVIRONMENT HEALTH AND SAFETY (EHS)
The Company is committed to achieve the EHS objective of providing safe workplace and
has undertaken various EHS management processes and deployed methodologies and implemented
them under the EHS system.
The Company, on a continuous basis, imparts EHS industry specific training to its
employees and workmen to ensure that our employees become more safety conscious and
thereby improve the organization’s approach towards prevention of loss.
The Company has bagged various EHS awards and appreciation from its prestigious
customers and independent agencies. A separate section has been added to this Annual
Report giving details on EHS objectives of the Company and various awards received by the
Company.
22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has strong commitment towards conservation of energy, natural resources and
adoption of latest technology in its areas of operation. The particulars relating to
conservation of energy, technology absorption, foreign exchange earnings and outgo, as
required to be disclosed under clause (m) of sub-section (3) of Section 134 of the Act
read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in the prescribed
format and is enclosed as
Annexure ‘F’.
23. PARTICULARS OF EMPLOYEES
In terms of the requirements of sub-section (12) of Section 197 of the Act read with
sub-rule (1) of Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 as amended from time to time, the disclosures pertaining to the
remuneration and other details, are given in Annexure ‘G’.
In terms of the provisions of sub-rules (2) and (3) of Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing
the names and other details of the employees drawing remuneration in excess of the limits
set out in these Rules forms part of the Annual Report. In terms of Section 136 of the
Act, this report is being sent to the Members and others entitled thereto, excluding the
aforesaid information. The said information shall be available for inspection by the
Members at the Registered Office of the Company during business hours on all working days
(Monday to Friday) upto the date of the ensuing Annual General Meeting. The said
information shall also be provided to any Member of the Company, who sends a written
request to the Company.
24. HUMAN RESOURCE/ INDUSTRIAL RELATIONS
The Company understands that employees are vital and valuable assets. The Company
recognises people as the primary source of its competitiveness and continues its focus on
people development by leveraging technology and developing a continuously learning human
resource base to unleash their potential and fulfill their aspirations. The strategic
thrust of Human Resource has been on improvement of the performance of employees through
training & development and also to identify outperformers who have potential for
taking higher responsibilities.
The employee relations remained cordial throughout the year. The Company had 4,599
permanent employees on its rolls as on March 31, 2018. The Board places on record its
sincere appreciation for the valuable contribution made by employees across all levels
whose enthusiasm, team efforts, devotion and sense of belonging has always made the
Company proud.
25. OTHER DISCLOSURES
Your Directors state that no disclosures or reporting is required in respect of the
following items, as the same is either not applicable to the Company or relevant
transactions/ events have not taken place during the year under review: a. The Company has
not issued any equity shares with differential rights as to dividend, voting or otherwise.
b. The Company has not issued shares (including sweat equity shares) to employees under
any scheme. c. The Managing Director & CEO of the Company did not receive any
remuneration or commission from any of its subsidiaries. d. No significant or material
orders were passed by the Regulators or Courts or Tribunals which impact the going concern
status and Company’s operations in future. e. There have been no material changes or
commitments affecting the financial position of the Company which have occurred between
the end of the financial year and the date of this report.
26. ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the Central and State Government
Departments, Organizations and Agencies for their continued support and co-operation. The
Directors are also thankful to all valuable stakeholders viz., customers, vendors,
suppliers, banks, financial institutions, joint venture partners and other business
associates for their continued co-operation and excellent support provided to the Company
during the year. The Directors acknowledge the unstinted commitment and valuable
contribution of all employees of the Company.
Your Directors also appreciate and value the trust reposed in them by Members of the
Company.
27. ANNEXURES The following annexures, form part of this Report: a. Dividend
Distribution Policy – Annexure ‘A’ b. Nomination and Remuneration
Policy – Annexure ‘B’ c. Secretarial Audit Report – Annexure
‘C’ d. Annual Report on Corporate Social Responsibility –
Annexure ‘D’ e. Extract of Annual Return – Annexure ‘E’
f. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and
outgo – Annexure ‘F’ g. Information under sub-rule (1) of Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 – Annexure
‘G’
|
For and on behalf of the Board of Directors |
|
H. V. Goenka |
|
Chairman |
|
(DIN: 00026726) |
| Place: Mumbai |
|
| Date: May 14, 2018 |
|
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