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 Fifteenth Annual Report of the Company
together with Consolidated and Standalone Audited Financial Statements of the Company for
the financial year ended on March 31,2020.
1. FINANCIAL RESULTS
| Particulars |
|
|
|
(Rs. in Crore) |
|
Consolidated |
Standalone |
|
FY 2019-20 |
FY 2018-19 |
FY 2019-20 |
FY 2018-19 |
| Revenue from Operations |
11,965.37 |
11,000.55 |
10,470.62 |
10,117.80 |
| EBITDA |
1,234.35 |
1,149.91 |
1,126.06 |
1,086.74 |
| Finance Cost |
307.98 |
311.87 |
276.96 |
284.15 |
| Depreciation & Amortisation |
147.20 |
117.13 |
117.69 |
105.52 |
| Profit Before Tax |
790.27 |
756.94 |
745.28 |
735.19 |
| Tax Expenses |
224.75 |
261.17 |
199.55 |
237.50 |
| Profit After Tax |
565.52 |
495.77 |
545.73 |
497.69 |
| Dividend on equity shares (including tax on dividend)* |
105.38 |
83.68 |
105.38 |
83.68 |
*Interim Dividend declared on February 07, 2020.
2. PERFORMANCE
Financial Performance
On a consolidated basis, the Company achieved a turnover of Rs. 11,965 Crore in FY
2019-20 with a 9 percent growth over FY 2018-19. The growth would have been higher
however, disruption caused by the COVID-19 pandemic affected performance in the latter
half of March 2020. Power Transmission & Distribution (T&D) business and Railways
business were the primary growth drivers during FY 2019-20. EBITDA margins for FY 2019-20
stood at 10.3 percent, with EBITDA growth of 7 percent over FY 2018-19. The net profit for
FY 2019-20 was Rs.566 Crore as against Rs496 Crore in FY 2018-19, a growth of 14 percent.
The Company achieved a reduction in Interest costs through better working capital
management and reduction of high cost loans. On a standalone basis, the Company achieved a
turnover of Rs.10,471 Crore and a net profit of Rs.546 Crore.
During the year, the Company secured orders of Rs.11,331 Crore, ending the year with a
robust order book of Rs.20,503 Crore. The orders were primarily driven by the Non-T&D
businesses as the Company forayed into the fast-expanding Urban Transport sector and
bagged multiple orders from reputed customers.
Power Transmission & Distribution (T&D) - The Power Transmission and
Distribution business continues to be the Company's largest business vertical, which
includes turnkey construction of power transmission lines as well as the construction of
Gas Insulated Substations (GIS) and Air Insulated Substations (AIS). During the year, the
business surpassed turnover of Rs.8,000 Crore with a growth of 12 percent backed by robust
execution in Americas, UAE and SAARC region. In line with the diversification and de-
risking strategy, the Company has expanded footprint into three new countries in Africa
this year.
Railways - The Railways business continued its growth momentum, as it crossed a
turnover of Rs.2,500 Crore for the first time with a growth of 33 percent over last year.
During the year, the business diversified its portfolio to include RRTS (Regional Rapid
Transit System) and Road over bridge (ROB) projects in addition to the existing offerings
of Overhead Electrification and composite projects.
Civil - During the year, the Civil business faced headwinds on account of muted
industrial capex cycle in India and challenges faced by the Realty sector. However, the
business has scaled up its order book significantly to over Rs.2,700 Crore, backed by 3
metro projects for DMRC and Kochi Metro. The business continued its diversification
strategy and secured entry into the Defence sector with two orders including one for the
construction of a Data Centre.
Solar - During the year, the Company successfully commissioned its single largest
project in terms of capacity, a 150 MWp ground mount project in Rajasthan. The business
has also secured an order to construct the largest carport project in India. The domestic
market continued to remain challenging during the year on account of lower capex.
Smart Infra - In its second year of operations, the business continued execution of
two Smart City projects in Maharashtra, secured last year.
Cables - The Cables business witnessed a slowdown during the year, owing to the
unprecedented COVID-19 pandemic and decrease in metal and optical fibre prices. However,
the business recorded improved margins across product segments, driven by innovation in
product design and increased efficiency in manufacturing operations.
3. DIVIDEND
The Board of Directors had during the year approved payment of interim dividend at the
rate of Rs.3.40 per equity share i.e. 170 percent of the nominal value of Rs.2/- each for
the financial year ended March 31, 2020 (previous year final dividend of Rs.2.70 per
equity share of nominal value of Rs.2/- each). The record date for the payment of interim
dividend was fixed as February 15, 2020 and interim dividend was paid on February 24,
2020. This involved a cash outflow of Rs.87.41 Crore, excluding Dividend Distribution Tax
of Rs.17.97 Crore. The said Dividend Distribution Tax on the dividend has been set off to
the extent of the income tax paid by the Company on the dividend received by the Company
from its subsidiaries during FY 2019-20.
With a view to conserve resources for future expansion and business growth, the Board
of Directors does not recommend any further dividend and that the interim dividend be
considered as final dividend for the financial year ended on March 31,2020.
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended ("SEBI Listing
Regulations"), the Company has formulated a Dividend Distribution Policy which is
enclosed herewith as Annexure ‘A', and is also available on the website of the
Company at https://www.kecrpg.com/policies.
4. SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on March 31, 2020 was Rs.51.42
Crore. There was no change in the share capital during the year under review.
5. DEBENTURES
As on March 31, 2020, the Company has 2,500 secured, rated, listed, non-convertible,
redeemable, taxable Debentures (Series I, II and III) of the face value of Rs.10,00,000/-
each aggregating to Rs.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. The Company has redeemed 1,500
Debentures (Series I) on April 20, 2020, being the due date of redemption.
6. 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, 2020, 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, CORPORATE GOVERNANCE REPORT AND BUSINESS
RESPONSIBILITY REPORT
In terms of Regulation 34 of SEBI 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 SEBI Listing Regulations are set out
and 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 SEBI
Listing Regulations, the Consolidated Financial Statements of the Company, including the
financial details of all the subsidiary companies, forms 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, 2020 comprising of eight direct
subsidiaries and nine step- down subsidiaries. It also has one associate company in India.
During the year under review, the Company has acquired 100 percent shareholding of its
step-down subsidiary KEC International (Malaysia) SDN. BHD, thereby making it a direct
subsidiary of the Company. The Company has liquidated an inoperative step-down Joint
Venture company in Malaysia.
During the year under review, the Company has incorporated a wholly owned subsidiary in
Dubai namely KEC Towers LLC on November 24, 2019. The Company, through this subsidiary has
acquired its eighth manufacturing unit, a state-of-the-art 50,000 MTPA tower manufacturing
facility in Dubai, taking its total tower manufacturing capacity to 4,22,200 MTPA, making
the Company one of the largest globally operating T&D player. The facility is yet to
start operations.
Performance Highlights
The Company has six operating subsidiaries, three subsidiaries functioning as special
purpose vehicles and eight subsidiaries are non-operating companies. Further, the Company
has one associate company which is a company incorporated under Section 8 of the Act for
the welfare of the past employees.
The performance highlights of operating subsidiaries and their contribution to the
overall performance of the Company during the financial year ended March 31,2020 are as
under:
| Subsidiary |
Performance during FY 2019-20 (Rs. In Crore) |
Contribution to overall performance of the Company
(%) |
|
Revenue |
Profit After Tax |
Revenue |
Profit After Tax |
| Al Sharif Group & KEC Ltd. Co. |
235.02 |
5.23 |
1.96 |
0.92 |
| SAE Towers Brazil Torres de Transmisao Ltda. |
1,227.20 |
33.44 |
10.26 |
5.91 |
| SAE Towers Mexico, S de RL de CV |
304.28 |
(2.81) |
2.54 |
(0.50) |
| SAE Prestadora de Servicios Mexico, S de RL de CV |
56.37 |
0.70 |
0.47 |
0.12 |
| SAE Towers Ltd. |
201.99 |
0.40 |
1.69 |
0.07 |
| KEC International (Malaysia) SDN. BHD |
87.74 |
4.48 |
0.73 |
0.79 |
Pursuant to the provisions of sub-section (3) of Section 129 of the Act read with Rule
5 of the 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.
Pursuant to SEBI 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 https://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 confirm that:
1. in the preparation of the annual accounts for the financial year ended on March
31,2020, the 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, 2020 and of the profit of the
Company for the year ended on March 31,2020;
3. we have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Act, 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, 2020
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
Retirement/ Cessation:
During the year under review, Mr. S.M. Kulkarni, Independent Director retired from the
Board of the Company with effect from July 27, 2019. Further, Ms. Manisha Girotra and Mr.
Vinayak Chatterjee, Independent Directors of the Company ceased to be Directors of the
Company pursuant to their resignation from the directorship of the Company with effect
from the close of business hours on June 11, 2019 and August 12, 2019 respectively, on
account of their professional commitments. They have confirmed that there was no material
reason other than that mentioned above.
The Board has placed on record its appreciation for the valuable contributions made by
Mr. Kulkarni, Ms. Girotra and Mr. Chatterjee during their association as Directors of the
Company.
Appointment / Re-appointment:
During the year under review, Mr. G.L. Mirchandani, Mr. D.G. Piramal and Mr. S.M.
Trehan were re-appointed as "Independent Directors" for the second term of five
consecutive years commencing from July 28, 2019 up to July 27, 2024. Mr. Ramesh Chandak
was also made as an Independent Director on the Board with effect from May 08, 2019 for
the first term of 5 years. Mr. Vimal Kejriwal, Managing Director and CEO was re-appointed
as "Managing Director and CEO" of the Company with effect from April 01, 2020
for a further period of two years.
All the above appointment/re-appointments were approved by the Members of the Company
at the last Annual General Meeting by passing the requisite resolutions in this regard.
With a view to further strengthen the Board of the Company, pursuant to the provisions
of Section 149 of the Act and the SEBI Listing Regulations, the Board appointed Mr. Vikram
Gandhi and Mr. M. S. Unnikrishnan as Additional and Independent Directors of the Company
for a period of five years with effect from August 07, 2019 and
November 08, 2019 respectively, subject to the approval of the Members of the Company
at the ensuing Annual General Meeting.
Mr. A.T. Vaswani and Ms. Nirupama Rao, who were appointed as "Independent
Directors" by the Members at the Tenth Annual General Meeting of the Company
effective July 29, 2015 for a period of five years up to July 28, 2020, will be completing
their first term as Independent Directors and are eligible for re-appointment for a second
term of five years.
The evaluation of Independent Directors was conducted by the entire Board of Directors
(excluding the Director being evaluated). Based on the evaluation, the Nomination and
Remuneration Committee and the Board of Directors of the Company at their respective
meetings held on May 28, 2020 and May 29, 2020 have recommended the re-appointment of Mr.
A.T. Vaswani and Ms. Nirupama Rao, as Independent Directors, not liable to retire by
rotation, for a second term of five consecutive years commencing from July 29, 2020 upto
July 28, 2025, subject to approval of the Members by special resolution at the ensuing
Annual General Meeting of the Company. The said Directors have given their consent for
re-appointment and have also confirmed that they retain the status as Independent
Directors and do not suffer from any disqualifications for re-appointment.
Pursuant to the provisions of sub-section (6) of Section 152 of the Act, Mr. H. V.
Goenka, Chairman, is liable to retire by rotation at the ensuing Annual General Meeting
and being eligible, offers himself for re-appointment.
In compliance with sub-regulation (3) of Regulation 36 of SEBI 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/re-appointment of Directors as stated above in the
ensuing Annual General Meeting.
12.2 Key Managerial Personnel
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, 2020:
1. Mr. Vimal Kejriwal, Managing Director & CEO;
2. Mr. Rajeev Aggarwal, Chief Financial Officer; and
3. Mr. Amit Kumar Gupta, Company Secretary.
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 SEBI Listing Regulations including amendments thereof, 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 SEBI 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.
The Board is of the opinion that the Independent Directors of the Company possess
requisite qualifications, experience and expertise and they hold highest standards of
integrity.
The Independent Directors have confirmed that they have registered their names in the
data bank maintained with the Indian Institute of Corporate Affairs (‘IICA'). In
terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment &
Qualification of Directors) Rules, 2014, the Independent Directors are required to
undertake online proficiency self-assessment test conducted by the IICA within a period of
one year from the date of inclusion of their names in the data bank. The Independent
Directors to whom the provisions of proficiency test are applicable, will take the said
online proficiency self-assessment test in due course.
12.4 Board Evaluation
The Board has carried out annual performance evaluation of its own performance, the
Directors individually and of its Committees as mandated under the Act and SEBI Listing
Regulations. 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 was held on May 27, 2020 to review the
performance of the Chairman, Non-Independent Director of the Company and the performance
of the Board as a whole as mandated by Schedule IV of the Act and SEBI Listing
Regulations. The Directors also discussed the quality, quantity and timeliness of flow 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 Familiarisation Programme for Independent Directors
The details of the induction and familiarisation programme are explained in the Report
on Corporate Governance and are also available on the Company's website i.e. www.kecrpg.com
under ‘Investors' tab.
12.6 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 subsection (3) of Section 178 of the Act and SEBI Listing Regulations
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'.
12.7 Meetings of the Board of Directors
During the year under review the Board of Directors met four times. The details are
given in the Corporate Governance Report which forms a part of the Annual Report.
12.8 Meetings of the Audit Committee
During the year under review, the Audit Committee met seven times. The details of the
meetings, composition and terms of the reference of the Committee are given in the
Corporate Governance Report which forms a part of the Annual 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
requirement of seeking ratification of appointment of the Statutory Auditors by the
Members at every Annual General Meeting has been done away with effective May 07, 2018 by
making amendment to the provisions of the Companies Act, 2013 by the Ministry of Corporate
Affairs and accordingly PwC continue to hold the office of Statutory Auditors for FY
2020-21.
The Statutory Auditors' Report for the FY 2019-20 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 that country.
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 2019-20. 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 2018-19 with the Ministry of
Corporate Affairs on September 05, 2019.
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 2019-20. The Secretarial
Audit Report in Form MR-3 is annexed to this report as Annexure ‘C'. The said
Secretarial Audit Report does not contain any qualifications, reservations or adverse
remarks and no frauds were reported by the Secretarial Auditors to the Company under
sub-section (12) of Section 143 of the Act.
14. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility ("CSR") Committee of the Directors inter
alia gives strategic direction to the CSR initiatives, formulates and reviews annual
CSR plans and programmes, formulates annual budget for the CSR programmes and monitors 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. The CSR Policy of
the Company adopted in accordance with Schedule VII of the Act, outlines 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 and has therefore made contributions to the
Implementing Agency. 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 Code
provides for the matters related to governance, compliance, ethics and other matters.
In accordance with the provisions of Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, 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. The Policy has
been formed to prohibit, prevent and 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 provides an equal employment opportunity 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//WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy and has established the necessary vigil
mechanism, as envisaged under the provisions of sub-section (9) of Section 177 of the Act,
the Rules framed thereunder and Regulation 22 of SEBI Listing Regulations for 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.
The Policy provides for protecting confidentiality of those reporting violation(s) and
restricts any discriminatory practices against them. 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
a mechanism in place to inform the Risk Management Committee and Board members about risk
assessment, minimization procedures and periodical review thereof.
The Risk Management Committee of Directors constituted by the Board inter alia
reviews Enterprise Risk Management functions of the Company and is responsible for
framing, implementing, monitoring and reviewing Risk Management framework of the Company.
The Committee on periodical basis, validates, evaluates and monitors key risks and reviews
the measures taken for risk management and mitigation and effectiveness thereof. The key
business 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 at 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. A statement giving details of all
Related Party Transactions are placed before the Audit Committee on a quarterly basis.
Disclosures as required under Indian Accounting Standards ("IND AS") - 24 have
been made in the Note No. 54 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 conflict with the interest of the Company at large. The
Policy on related party transactions, as formulated by the Board is available on the
Company's website i.e. www.kecrpg.com under ‘Investors' tab.
20. ANNUAL RETURN
Pursuant to the provisions of sub-section (3) of Section 92 and sub-section (3) of
Section 134 of the Act read with Rule 12 of the Companies (Management and Administration)
Rules, 2014, the extract of the Annual Return as on March 31, 2020 in the prescribed Form
MGT-9 is enclosed as Annexure ‘E' and the full Annual Return of the Company
will be available on the website of the Company i.e., www.kecrpg.com under
‘Investors' tab.
21. ENVIRONMENT HEALTH AND SAFETY (EHS)
The Company is committed to achieving its EHS objective of providing a safe workplace
for its stakeholders and has undertaken various EHS management processes and implemented
them under the EHS system. The Company is successfully leveraging modern technology and
analytics to enable data driven decisions, improve safety, and ensure strict adherence to
safety rules and procedures.
The Company continues to invest in imparting industry specific EHS training with a
focus on risk-based safety and skill development to its employees and workmen to ensure
that all its stakeholders become more safety conscious and thereby improve the
organization's approach towards prevention of loss.
During the year, 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 with 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. In terms of Section 136 of the Act, the said annexure is open for
inspection and any Member interested in obtaining a copy of the same may write to the
Company.
24. HUMAN RESOURCE/INDUSTRIAL RELATIONS
The Company understands that its diverse employees are its most vital and valuable
assets. The Company recognises people as the primary source of its competitiveness and
continues its focus on people development through digital and bespoke interventions. The
Company has developed a continuous learning human resource base to unleash potential and
fulfill the aspirations of the employees. 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 the potential for taking higher responsibilities.
The employee relations remained cordial throughout the year. The Company (excluding
subsidiaries) had 5,713 permanent employees on its rolls as on March 31, 2020. 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
The 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. There was no revision in the financial statements.
d. There has been no change in the nature of business of the Company as on the date of
this report.
e. The Managing Director & CEO of the Company did not receive any remuneration or
commission from any of its subsidiaries.
f. 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.
g. 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.
h. The Company has been in compliance with the applicable Secretarial Standards issued
by the Institute of Company Secretaries of India, during the financial year.
26. ACKNOWLEDGEMENT
The Directors take this opportunity to thank the Central and State Government
Departments, Organizations and Agencies for their continued support and cooperation. 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.
The 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 29, 2020 |
|
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