The Directors have pleasure in presenting the 25th Annual Report
together with Audited Statement of Accounts of the Company for the year
ended 31st March, 2015.
The Summarized financial results of the Company for the year under
review are as below:
(Rs, in Lacs)
Particulars Year Ended Year Ended
31st March, 2015 31st March, 2014
Total Income 1,73,950.57 2,68,964.30
Profit (Loss) before
depreciation & tax (44,255.45) (37,533.12)
Depreciation 19,793.72 13,073.95
Profit (Loss) before tax &
Extra Ordinary Items (64,049.17) (50,607.07)
Exceptional Items 1,560.77 26,700.64
Profit(Loss) before tax (65,609.94) (77,307.71)
Provision for tax
- Current Tax - -
- Deferred Tax - (26,922.06)
- MAT Credit/Fringe
Benefit Tax - -
- Tax adjustment for
earlier years 79.45 -
Profit (Loss)after tax (65,689.39) (50,385.65)
Proposed Dividend together
with Tax thereon - -
Transfer to General Reserve - -
Transfer to Debenture
Redemption Reserve - -
Surplus (Deficit) carried
to Balance Sheet (23,685.24) 55,189.73
The turnover of the Company for the year ended 31st March, 2015,
reported a decline of 35.33 % to Rs, 1,73,950.57 lacs from Rs, 2,68,964.30
lacs in the previous year.
Loss before depreciation and taxation was Rs, 44,255.45 lacs and after
providing Rs, 19,793.72 lacs towards depreciation, Rs,1,560.77 lacs towards
Exceptional Item on account of Foreign Currency Fluctuation Loss and Rs,
79.45 lacs towards Tax adjustment for earlier years, the net loss
amounts to Rs, 65,689.39 lacs.
Era Infra Engineering Limited (EIEL), principally being a major EPC
player was directly impacted due to the stress in the construction and
infrastructure sector starting from F.Y. 2011-12 onwards. The company
strongly faced the stress in the initial years wherein several key and
most of small players shut down their operations. However company
started facing crises due to continued slump in the construction and
infrastructure sector, severely effecting the operations of the
company, compounded with few of EIEL road projects getting considerably
affected on account of delay in availability of land and environmental
clearance which resulted in significant cost escalation thereby putting
additional pressure on the financials of EIEL.
Besides, company faced severe pressure on its operational cash flow and
liquidity attributable to several external factors such as Slowdown in
Infrastructure Sector, Decline in turnover and operating margins, Cash
flow mismatch due to elongated Working Capital Cycle, Lack of adequate
Working Capital - shortfall arising out of undisbursed/untied WC
facilities, Increase in borrowing costs, thereby causing Company to
approach for Corporate Debt Restructuring (CDR).
The Company is under Corporate Debt Restructuring. Though we are
working towards steering the Company out of the framework of CDR, order
intake remains sluggish, since many of the stalled projects are yet to
be kick-started. Projects already awarded are generally progressing
slowly due to various continuing problems on ground, which remain
unresolved over a period of time leading to cost escalations which
remain unpaid. All these factors combined, have led to a vicious cycle
culminating in a pile up of debt and high consequential costs.
Your management has been striving hard and taking all efforts in
ensuring repayment of interest due to CDR lenders. During the period
under review the Company focused on realizing long pending receivables,
arbitration awards, retention moneys. Further also the Company will
have to continue focusing as before on sharply optimizing costs,
improving productivity and systematically monetizing its non-key assets
for overcoming the liquidity crisis. Our key priority is to deliver
projects held up due to working capital shortage and sites that need to
be expeditiously concluded. The Company is now concentrating on bidding
projects relating to its core competency as also projects with high
With the Government''s helping hand and positive attitude we look
forward to a phased economic revival and boosting of business
confidence due to hard policy decisions. We are hoping the government
will come up with a clear cut road-map for implementing the policies.
The upturn in sentiment means roads, ports and power projects will get
on-stream. In addition to this, there will also be expediting of
stalled infrastructure projects, revival of investment climate and
sorting of infrastructure clearances. The government is expected to
provide an environment conducive for growth investments, with major
reforms in infrastructure sector, enabling all-round growth.
Despite of the above said constrains, the Gross Order Book of Company
as at 31.03.2015 is maintained at Rs, 15,936.43 Crores across sectors, to
be implemented over a period of next two to three years. All ongoing
projects are monitored on a regular basis by the senior management
based at Noida offices. The company has aggressively invested in an
in-house ERP system, which encompasses different areas of efficient
construction management with greater efficiency, accuracy and
The Company is professionally managed with well-qualified and
experienced personnel in all areas including engineering, finance and
administration combined with a full-fledged Enterprise Resource
Planning (ERP) and MIS system. As on 31st March, 2015, the Company has
on its roll approximately One Thousand Six Hundred employees.
A few of recent Infrastructure projects (including Social Infra)
secured by the company from prestigious clients in Public/ Private
Sectors are as follows:
1. Construction of New Integrated Terminal Building at VSI Airport,
Port Blair from Airport Authority of India, Port Blair.
2. Four Lining with paved side shoulders of Doral Kaplan to
Punjab/Haryana border section of NH-71 (New) NH No. 52) from Km 211.390
to Km 238.695 in the state of Punjab on EPC mode under NHDP-IV from
PWD, MORTH, Punjab.
3. Construction of New Paid Ward including Associated Works, operation
& Maintenance during defect Liability period in AIIMS campus, Ansari
Nagar, New Delhi for AIIMS, New Delhi from HSCC (India) Limited, New
4. Assembly Hanger for Overhaul at HAL, SED, Sunbed, Kaput (O) i/c
Water Supply, Sanitary Installation, Drainage, Development Works,
Internal Electrical Installations, Cranes, Mechanical Works, HVAC
System, Fire Fighting System, Fire Alarm System, Substation building
and Under Ground Sump from CPWD, Kaput.
5. Rehabilitation and up gradation of NH-216 from Km. 3.800 to km
90.460 (Raigarh to Saraipalli Section) in the State of Chhattisgarh to
two-lanes with paved shoulders under NHDP-IV on EPC basis by Ministry
of Road Transport & Highways from PWD, MORTH, Raigarh.
Presently the company operates through two strategic divisions:
A) EPC Division (National & International)
This division is in a growth phase, the order book position has
improved considerably over the years and it has bagged orders from
prestigious clients like NHAI, NTPC, Airport Authority of India, Delhi
Metro Rail Corporation Limited, Naya Raipur Development Authority etc.
The division''s business extends across major sectors of infrastructural
growth and it broadly encompasses Roads/ Highways, Power, T&D, Metro,
Aviation, Social Infra, Industrial Refinery.
B) Equipment Management Division:
This Division was set up to cater to the growing in-house and external
demand for a wide range of construction machinery and to make revenue
by using the equipment''s in most efficient manner and further to provide
the strength to internal execution. The division''s large Equipment Bank
spans machinery for diverse uses and includes Cranes/ Material Handling
Equipment, Pilling Equipment, Aerial Platform & Boom Lifts, Motor
In view of the losses, your Directors do not recommend any dividend for
the year ended March 31, 2015.
There are no material changes and commitments, affecting the financial
position of the company between the end of financial year of your
company and the date of this Report.
Your Company has not accepted any deposits from the public or its
employees during the year under review. The details of loans and
advances, which are required to be disclosed in the annual accounts of
the Company pursuant to Clause 32 of the Listing Agreement with the
Company, are furnished separately.
Since date of last report, Ms. Chetna Kumar, Mr. Kuldeep Kumar Khanna,
Ms. Vandana Kaushik, Mr. Mast Ram were appointed as Independent
Directors on 10.03.2015, 30.05.2015, 15.10.2015 & 02.12.2015
respectively. Whereas, Mr. Abhay Kumar Singh was appointed as Nominee
Director of the Company on 10.03.2015. Further, Mr. Shiv Dayal Kapoor,
Mr. Arvind Pande, Mr. Abhay Kumar Singh, Mr. Kuldeep Kumar Khanna, Ms.
Chetna Kumar, Mr. S. D. Sharma & Ms. Vandana Kaushik have resigned from
post of Directorship of the Company w.e.f. 22nd March, 2015, 30th May,
2015, 25th August, 2015, 25th August, 2015, 10th September, 2015, 11th
September, 2015 & 02nd December, 2015 respectively.
As per the provisions of the Companies Act, 2013, Independent Directors
are eligible to hold office for a term upto five consecutive years and
are eligible for re-appointment for the second term on passing special
resolutions by the Company. During their tenure, they will not be
liable to retire by rotation. The Company has received from all the
Independent Directors consents for their appointment and declarations
confirming that they meet the criteria of independence as envisaged
under the Companies Act, 2013 and Listing Agreement.
Notices under Section 160 of the Companies Act, 2013 have been received
from members proposing their candidature along with requisite deposits.
Accordingly, in terms of Section 149(10) read with Schedule IV of the
Companies Act, 2013, the Board recommends the appointment of the Mr.
Mast Ram as Independent Director from 30th December, 2015 till 29th
December, 2020 and shall not be liable to retire by rotation during his
tenure. In accordance with the provisions of the Companies Act, 2013,
Mr. T.D. Arora, retires by rotation at the forthcoming Annual General
Meeting and being eligible, offers himself for re- appointment.
Brief resumes of these directors proposed to be appointed/ re-appointed
and other relevant information have been furnished in the Notice
convening the Annual General Meeting. Appropriate resolutions for their
appointment / re-appointment are being placed for approval of the
members at the Annual General Meeting.
AUDITORS & AUDIT REPORT:
M/s. G.C. Sharda & Co., Chartered Accountants, have resigned as
Statutory Auditor of the Company w.e.f. 16.09.2015. Further company has
received Consent letter from M/s. S S Kothari Mehta & Co., Chartered
Accountants (FRN : 000756N) to act as Statutory Auditors of the
Company. The Board of Directors of the Company has pursuant to S.
139(8) of Companies Act, 2013 appointed in casual vacancy, M/s. S S
Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the
Company w.e.f. 02.12.2015 to hold the office till the ensuing General
Meeting of the Company.
As per the terms of provisions of S. 139(8) of Companies Act, 2013,
Statutory Auditor appointed in Casual Vacancy is required to be
approved by members of the Company in a General Meeting held within
Three months from the date of their appointment. Accordingly, it is
proposed for the members of the Company to take note and approve the
appointment of M/s. S S Kothari Mehta & Co., Chartered Accountants to
act as Statutory Auditors of the Company till ensuing 25th Annual
General Meeting of the Company, where after their appointment for a
term of five years from the conclusion of 25th Annual General Meeting
until the conclusion of the 30th Annual General Meeting of the Company,
subject to ratification by shareholders at each annual general meeting.
The Company has obtained necessary certificate under section 141 of the
Companies Act, 2013 from the auditor conveying their eligibility for
the above appointment. The Audit Committee and the Board reviewed their
eligibility criteria, as laid down under section 141 of the Companies
Act, 2013 and recommended their appointment as auditors for the above
The Auditors'' Report does not contain any adverse remark or
qualification hence the same do not call for further information or
explanation. The Notes on Accounts referred to in the Auditors'' Report
are self-explanatory and therefore do not call for any further
As per provisions of Section 204 of the Act, the Board of Directors of
the company appointed M/s. SKP & Co., Practicing Company Secretaries
(C.P. No.: 6575), as Secretarial Auditors for the purpose of auditing
the Secretarial activities of the Company for the financial year
2014-15. The Secretarial audit report issued by the said auditors in
form MR-3 has been annexed to this report as ''Annexure 6''. The report
is self-explanatory and do not call for any further comments.
On the observations made in the Secretarial Audit Report, the proper
steps are being taken by the Management so as to comply with the
As per the Cost Audit Orders, Cost Audit is applicable to the
Construction business of the Company for the FY 2014-15.
In view of the same and in terms of the provisions of Section 148 and
all other applicable provisions of the Companies Act, 2013, read with
the Companies (Audit and Auditors) Rules, 2014, M/s. MS & Co., Cost
Accountants (FRN. 102592) have been appointed as Cost Auditors to
conduct the audit of cost records of your company for the financial
Your Company has submitted its Cost Audit Report with the Ministry of
INTERNAL AUDITOR, INTERNAL AUDIT & CONTROLS
The Company continues to engage M/s. P.C. Bindal as its Internal
Auditor. During the year, the Company continued to implement their
suggestions and recommendations to improve the control environment.
Their scope of work includes review of processes for safeguarding the
assets of the Company, review of operational efficiency, effectiveness
of systems and processes, and assessing the internal control strengths
in all areas. Internal Auditors findings are discussed with the process
owners and suitable corrective actions taken as per the directions of
Audit Committee on an ongoing basis to improve efficiency in
WHISTLE BLOWER/VIGIL MECHANISM
As per the provisions of Companies Act, 2013, every Listed Company
shall establish a vigil mechanism (similar to Whistle Blower mechanism
as specified under the non-mandatory requirements of clause 49 of
Listing Agreement executed with Stock Exchanges). In pursuance of the
provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil
mechanism/ whistle blower policy for directors and employees to report
genuine concerns has been established and approved by Board on 30th
May, 2014. The Vigil Mechanism is available on the website of the
Company at www.eragroup.co.in.
RISK MANAGEMENT POLICY
A statement indicating development and implementation of a risk
management policy for the Company including identification therein of
elements of risk, if any, this in the opinion of the Board may threaten
the existence of the company is stated in the Corporate Governance
The restructuring in the Directorship of the Company, necessitated
restructuring in the Audit Committee. The committee as on date of this
report consists of three members namely Mr. Mast Ram, Ms. Vandana
Kaushik and Mr. T. D. Arora out of which two are independent Directors.
Mr. Mast Ram is the Chairman of Audit Committee. All members of the
Audit Committee possess sufficient knowledge and experience in the
field of Finance and Accounts. The Committee composition is in
accordance with the provisions of Companies Act and Listing Agreement.
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year Six Board Meetings were held on 30th May,
2014; 14th August, 2014; 12th November, 2014, 7th January, 2015, 14th
February, 2015 and 10th March, 2015 and Five Audit Committee Meetings
were convened and held on 30th May, 2014; 14th August, 2014; 12th
November, 2014, 14th February, 2015 and 10th March, 2015. Further
details of which are given in the Corporate Governance Report. The
intervening gap between the Meetings was within the period prescribed
under the Companies Act, 2013.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee (NRC) has framed this
Directors'' Performance Evaluation Policy (''Policy'') and based on the
recommendation of the NRC, this Policy has been approved by the Board
on 10th March, 2015. Accordingly, the evaluation of Board was carried
out by each Director, of each committee by each of its member and of
the individual Director by all other Directors on the Board excepting
the concerned Director himself. Evaluation process consisted of a
number of questions which the Directors/Members of Committee/other
Directors, as the case may be, as evaluators, considered. Scores were
assigned (on scale of 1 to 5, with 5 being the highest) to each of the
questions. The responses were submitted to the Chairperson of Board and
in case of individual directors to NRC. The Concerned then collated and
summarized the aggregate of scores assigned by all the
Directors/Members to all questions and made a report which was made
available for consideration to Board & Independent Directors of the
The Independent Directors of the Company at its meeting held on 10th
March, 2015, positively reviewed the performance of non-independent
directors and the Board as a whole; reviewed the performance of the
Chairperson of the company, taking into account the views of the
executive directors and non-executive directors; and assessed the
quality, quantity and timeliness of flow of information between the
company management and the Board that is necessary for the Board to
effectively and reasonably perform their duties.
DECLARATION BY INDEPENDENT DIRECTOR(S)
The Independent Directors comply with the definition of Independent
Director as given under Section 149(6) of the Companies Act, 2013 and
Clause 49 of the Listing Agreement. While appointing / re-appointing
any Independent Directors on the Board, the Committee considers the
criteria as laid down in the Companies Act, 2013 and Clause 49 of the
Listing Agreement. All the Independent Directors give a certificate
confirming that they meet the independence criteria as mentioned in
Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing
A declaration by an Independent Director(s) that he/they meet the
criteria of independence as provided in sub-section (6) of Section 149
of the Companies Act, 2013 has been enclosed as Annexure 5.
An independent director shall hold office for a term up to five
consecutive years on the Board of a Company, but shall be eligible for
reappointment for next five years on passing of a special resolution by
the Company and disclosure of such appointment in the Board''s report.
APPOINTMENT & REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Appointment &
Remuneration Policy is stated in the Corporate Governance Report.
INFORMATION & STATEMENT OF PARTICULARS OF EMPLOYEES
The Information & Statement of Particulars of employees pursuant to
Section 197 of the Companies Act, 2013 and Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
annexed as Annexure 3
EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, an extract of annual return in form MGT 9 as a part of this
Annual Report as Annexure 1.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
In accordance with Section 134(3)(g) of the Companies Act, 2013, the
particulars of loans guarantees and investments under Section 186 of
the Companies Act, 2013 are provided in notes to financial statements,
read with respective heads to the Financial Statements which forms part
of this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract or arrangements entered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 including certain arm''s length
transactions under third proviso thereto shall be disclosed in Form No.
AOC-2 as Annexure 2.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
There are no significant and material orders passed by the regulators
or tribunals impacting the going concern status and Company''s
operations in future.
SEXUAL HARASSMENT AT WORK PLACE
In order to prevent sexual harassment of women at work place, company
is fully determined and proper adjudication & recourse mechanism is in
place to avoid any sexual harassment at work place.
During the year Company has not received any complaint of harassment
and no cases were filed pursuant to the Sexual Harassment of Women at
work Place (Prevention, Prohibition and Redressal) Act, 2013, during
the year under review.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the provisions of Section 135 of the Act, the Company has
constituted the CSR committee and has also adopted CSR Policy. The
details of the Committee & CSR Policy development & implementation is
stated in the Corporate Governance Report.
However as the Company does not have average net profits for the three
immediately preceding financial years, the Section 135(5) of the Act
pertaining to spending of 2% of average net profits of the company for
immediately preceding three financial years and disclosure required to
be given under Section 135(5) of the Act and Rule 8 of Companies
(Corporate Social Responsibility Policy) Rules, 2014, are not
applicable, to the Company, for the financial year 2014-15.
Your Company treats its human resources as one of its most important
Your Company continuously invests in attraction, retention and
development of talent on an ongoing basis. A number of programs that
provide focused people attention are currently underway. Your Company
thrust is on the promotion of talent internally through job rotation
and job enlargement.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Section 129 of the Companies Act 2013, Consolidated
Financial Statements are attached and form part of the Annual Report
and the same shall be laid before the ensuing AGM along with the
Financial Statements of the Company.
SUBSIDIARY COMPANIES, JOINT VENTURES & ASSOCIATE COMPANIES
As required under the first proviso to sub-section (3) of Section 129
of the Companies Act, 2013, a separate statement containing the salient
features of the financial statements of the subsidiaries, associates
and joint venture companies in Form AOC.1 is annexed to the Financial
Statements as Annexure – 4 and forms part of the Annual Report, which
covers the performance and financial position of the subsidiaries,
associates and joint venture companies.
The Company will make available the Annual Accounts of the subsidiary
company and other related information upon request by any member of the
Company or its subsidiary company. The Annual Accounts of the
subsidiary company will also be kept open for inspection at the
registered office of the Company and the subsidiary company during
The Equity shares continue to be listed on the BSE Ltd. (BSE) and the
National Stock Exchange of India Ltd. (NSE). Both these Stock Exchanges
have nationwide terminals and therefore, shareholders/investors are not
facing any difficulty in trading the shares of the Company from any
part of the Country. The Company has paid annual listing fee for
2014-15 to the BSE Ltd. and the National Stock Exchange of India Ltd.
and annual custody fee to National Securities Depository Limited and
Central Depository Services (India ) Limited.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS
A Company holds fiduciary relationship with its stakeholders and
community, here the Board of Directors of the Company act as trustee to
all the stakeholders of the Company to enhance the stakeholder''s value
and protect their interest. Your Company is committed to benchmark
itself with global standards in all areas including appropriate
standards for Good Corporate Governance. Towards this end, an effective
Corporate Governance System has been put in place in the Company which
also ensures that the provisions of Clause 49 of the Listing Agreement
are duly complied with. A report on Corporate Governance, and
Management Discussion and Analysis, along with Certificate on its
compliance from Mr. Pooja Anand, Company Secretary in Practice is
enclosed with this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Conservation of Energy:
The core activity of the company is civil construction which is not an
energy intensive activity, however all steps are taken to conserve
energy at all levels of operations wherever possible. There are no
particulars required to be disclosed as required under the new
provisions of Companies Act, 2013 & rules made thereunder.
During the year, there was no Technology Absorption, as your Company
has not undertaken any research and development activity in any
manufacturing activity nor any specific technology is obtained from any
external sources which need to be absorbed or adapted. There are no
particulars required to be disclosed as required under the new
provisions of Companies Act, 2013 & rules made thereunder.
Innovation is a culture in the Company to achieve cost efficiency in
the construction activity to be more and more competitive in the
prevailing environment and the effect of the same cannot be quantified.
Foreign exchange earnings and outgo:
The foreign exchange earning /outgo during the year are as under:
(Rs, in Lacs)
Particulars Current Year Previous Year
Foreign Exchange Earnings Nil Nil
Foreign Exchange Outgo 882.52 5870.99
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of
Directors hereby state that:
a) In the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
b) The directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company at the end of the financial year and of the profit and loss
of the company for that period;
c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
d) The directors had prepared the annual accounts on a going concern
e) The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
f) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Your Directors take this opportunity to place on record their
appreciation towards bankers, clients and all the business associates
for their continuous support to the Company and to the shareholders for
the confidence reposed in the Company management. The directors also
convey their appreciation to the employees at all levels for their
enormous personal efforts as well as collective contribution.
In the absence of Chairman of the Company, this Directors Report and
its Annexures are signed by the Chairperson of the Meetings of Board of
Directors held on December 02, 2015.
For and on Behalf of the Board
(T. D. Arora)
Date: December 02, 2015 Whole Time Director