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Era Infra Engineering Directors Report, Era Infra Eng Reports by Directors
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Era Infra Engineering
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Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors have pleasure in presenting the 24th Annual Report
 together with Audited Statement of Accounts of the Company for the year
 ended 31st March, 2014.
 
 FINANCIAL RESULTS:
 
 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, 2014   31st March, 2013
 
 Total Income                            2,68,964.30        4,70,181.37
 
 Profit (Loss) before depreciation
 & tax                                   (37,533.12)          37,172.58
 
 Depreciation                              13,073.95          11,041.39
 
 Profit (Loss) before tax & Extra
 Ordinary Items                          (50,607.07)          26,131.19
 
 Extra Ordinary Items                      26,700.64           2,354.68
 
 Profit (Loss) before tax                (77,307.71)          23,776.51
 
 Provision for tax
 
 - Current Tax                                     -           4,676.43
 
 - Deferred Tax                          (26,922.06)           3,947.78
 
 - MAT Credit/Fringe Benefit Tax                   -         (1,675.15)
 
 - Tax adjustment for earlier years                -                  -
 
 Profit (Loss) after tax                 (50,385.65)          16,827.45
 
 Proposed Dividend together with Tax
 thereon                                   *(845.30)             845.30
 
 Transfer to General Reserve                       -           1,682.75
 
 Transfer to Debenture Redemption Reserve          -             310.00
 
 Surplus carried to Balance Sheet          55,189.73         104,730.08
 
 *Proposed dividend on Equity shares and tax thereon is reversed in the
 Current year as the proposed dividend was not approved by the
 Shareholders.
 
 FINANCIAL PERFORMANCE
 
 The turnover of the Company for the year ended 31st March, 2014 is Rs.
 2,68,964.30 lacs as against Rs. 4,70,181.37 lacs in the previous year.
 
 Loss before depreciation and taxation was Rs. 37,533.12 lacs and after
 providing Rs. 13,073.95 lacs towards depreciation, Extra-Ordinary Item
 on account of Foreign Currency Translation Loss of Rs. 26,700.64 lacs
 and deferred tax of Rs. (26,922.06) lacs towards tax, the net loss
 amounts to Rs. 50,385.65 lacs.
 
 BUSINESS PERFORMANCE
 
 Infrastructure development in India has been going through a very
 difficult phase over the last three years.
 
 The Company principally being an EPC Player was directly impacted due
 to stress in the construction and infrastructure sector. Few of the
 Company''s Road projects also got impacted considerably on account of
 delay in availability & environmental clearance which resulted in heavy
 cost escalation. The Company is facing severe pressure on its
 operational cash flow and liquidity attributable to several external
 factors such as:
 
 (a) Slowdown in Infrastructure sector
 
 (b) Considerable blockage of funds in Working Capital
 
 (c) Higher cost of borrowings etc.
 
 Under these circumstances, the Company had to approach the Corporate
 Debt Restructuring (CDR) cell during 2013 for debt restructuring
 through CDR mechanism envisaged under the guidelines issued by the
 Reserve Bank of India (the RBI). The CDR Cell approved the debt
 restructuring of the Company vide letter dated March 29, 2014 (the
 LOA). The Company has also executed a Master Restructuring Agreement
 (MRA) dated March 29, 2014 which was subsequently amended on May 19,
 2014 with the CDR Lenders in furtherance to the CDR package of the
 Company, besides various other related documents as envisaged under the
 MRA. The broad terms of the Company''s CDR scheme includes inter alia:
 
 a. Restructuring the existing debt facilities including term loans,
 non-convertible debentures (NCDs), External commercial borrowings
 (ECBs), term loans from Non-CDR lenders, working capital term loan,
 funded interest term loan and Fund Based & Non-Fund Based Working
 Capital Limits in all aggregating to Rs. 8754.75 Crores (Approximately)
 availed by the Company, including revision of the interest rates,
 principal payment schedule and grant of priority (fresh) term loan of
 Rs. 120.05 crores;
 
 b. Creation of additional security for the facilities covered under the
 MRA, personal guarantee of Shri H.S. Bharana, Chairman & Managing
 Director and Pledge of entire promoter shareholding in favour of CDR
 Lenders within the permissible time frame.
 
 c. The promoters are also required to contribute/ infuse funds into the
 Company to the extent of 25% of the sacrifice being made by the Lenders
 (amounting to Rs. 223.31 Crores) of which Rs. 178.65 Crores is required
 to be brought within 120 days of implementation of the restructuring
 scheme and the balance Rs. 44.66 Crores to be brought in within 1 year
 of approval of CDR Package. The Promoters are also required to bring in
 their contribution towards priority loan amounting to Rs.  40.02 Crores
 and additional promoter contributions to be made in financial year
 2016-17, 2017-18 & 2018-2019 for Rs.  200.00 Crores, Rs. 150.00 Crores
 & Rs. 150.00 Crores, respectively.
 
 The Company is expected to come out with the stressful circumstance,
 once the debts obligations are completed restructured in line with the
 LOA and MRA (including amendments thereto).
 
 Despite of the above said constrains, the Order Book of Company as at
 31.03.2014 is maintained at Rs. 15,723.95 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
 predictability.
 
 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, 2014, the Company has
 on its roll approximately Two Thousand (2000) 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. A project for Construction of phase II hostel complex consisting of
 376 bachelor and 144 married accommodation for trainees of Bhaba Atomic
 Research Centre (BARC)/Homi Bhabha National Institute (HBNI) at
 Anushaktinagar, Mumbai from Department of Atomic Energy.
 
 2. Contract for Procurement of Trespassing Control measures including
 provision of Escalators at various stations at Mumbai from Mumbai
 Railway Vikas Corporation Ltd.
 
 3. A Contract for SG and Offsite Civil Works Package for Nabinagar
 Super Thermal Power Project, (3x660 MW) in Aurangabad district of Bihar
 by Nabinagar Power Generating Company Private Limited (NPGC)- a joint
 venture of NTPC Limited and Bihar State Electricity Board.
 
 4. A Contract for Construction of elevated viaduct, 5 elevated
 Stations viz Kadavanthara, Elamkulam, Vyttila, Thaikoodam & Petta (from
 Chainage 19329.685 m to 25119.278 m) including Architectural Finishing,
 Plumbing works of Stations on Alwaye-Petta Line of Kochi Metro Rail
 Project at Kochi, Kerala by Delhi Metro Rail Corporation Ltd., in
 joint venture with Chengdu Ranken, China.
 
 5. A Contract from NTPC Limited, for civil works of Main Plant and
 Offsite Civil Works Package for lara Super thermal Power Project,
 Stage-I (2 x 800 MW) in Raigarh district of Chhattisgarh.
 
 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 equipments 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
 Graders etc.
 
 Today the company is a known name in the field of Infrastructure
 projects contributing to the Infrastructure development of modern
 India. The Company has transformed from a mere construction company to
 a major player in the Roads, Bridges, Power sector building, to BOOT
 and BOT projects. Successful completion of projects in hand is a habit
 of the company. No major Labour disputes, no Strikes/Labour unrest is
 something which speaks about the other good attributes of the company.
 
 DIVIDEND
 
 In view of the losses, your Directors do not recommend any dividend for
 the year ended March 31, 2014.
 
 MATERIAL CHANGES
 
 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.
 
 PUBLIC DEPOSITS
 
 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.
 
 DIRECTORS
 
 There were no changes in the Directorship of the Company since last
 reporting.
 
 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 above
 directors as Independent Directors who shall hold office upto March 31,
 2019 and shall not be liable to retire by rotation during their tenure.
 In accordance with the provisions of the Companies Act, 2013, Mr. H.S.
 Bharana, 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 proposed for approval of the members
 at the Annual General Meeting.
 
 INTRODUCTION AND APPLICABILITY OF NEW COMPANIES ACT, 2013
 
 The Ministry of Corporate affairs vide its Notification dated: 26th
 March, 2014 has notified the commencement of New Companies Act, 2013,
 w.e.f. 01st April, 2014. In pursuance of General Circular No. 08/2014
 issued by Ministry of Corporate Affairs, the present Directors'' Report
 is prepared in accordance with the provisions of the Companies Act,
 1956 and thus the new provisions of Companies Act, 2013 will be
 complied with in the next Directors'' Report.
 
 Your Board of Directors endeavors to comply with all other new
 requirements of the Companies Act, 2013.
 
 AUDITORS
 
 In terms of the provisions of the Companies Act, 2013, M/s. G.C. Sharda
 & Co., Chartered Accountants, Statutory Auditors of the Company, will
 complete their first term of 8 (eight) consecutive years at the
 conclusion of the ensuing Annual General Meeting.
 
 As per the provision of Section 141 of the Companies Act, 2013 read
 with rule 6 of the Companies (Audit & Auditors) Rules, 2014. They can
 be further appointed as statutory auditors for another term of 3
 (Three) consecutive years i.e., till the conclusion of Annual General
 Meeting to be held in the year 2017. 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 said period.
 
 AUDIT COMMITTEE
 
 The Audit Committee consists of four members namely Mr. S.D. Sharma,
 Mr. S.D. Kapoor, Mr. Arvind Pande and Mr. T.D. Arora out of which three
 are independent Directors. Mr. S.D. Sharma 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.
 
 AUDITORS'' REPORT
 
 The Auditors'' Report does not contain any adverse remark or
 qualification hence the same do not call for further information or
 explanation. The observations and comments given by the Auditors read
 together with notes to accounts are self explanatory, hence do not call
 for any further comments under Section 217 of the Companies Act, 1956.
 
 SUBSIDIARY COMPANIES
 
 In terms of the general exemption granted by the Government of India
 vide its general circular no. 2/2011 dated February 08, 2011, from
 attaching the Directors'' Report, Balance Sheet, Statement of Profit &
 Loss and other particulars of the subsidiaries, the Board of Directors
 in its meeting held on May 30, 2014 decided not to attach Directors.
 Report, Balance Sheet, Statement of Profit & Loss and other particulars
 of Subsidiary Companies with the Annual Report of the Company this year
 
 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
 business hours.
 
 LISTING
 
 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 Ms. Pooja Anand, Company Secretary in Practice is
 enclosed with this Annual Report.
 
 PARTICULARS OF EMPLOYEES
 
 Particulars of employees as required under Section 217(2A) of the
 Companies Act, 1956, read with the Companies (Particulars of Employees)
 Rules, 1975 as amended are given in Annexure A and form part of this
 report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Section 217(2AA) of the Companies Act,
 1956, it is confirmed that:
 
 1. The applicable accounting standards have been followed by the
 Company in preparation of the annual accounts for the financial year
 ended 31st March, 2014.
 
 2. The Directors have selected 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 31st March, 2014 and of
 the loss of the Company for the financial year ending 31st March, 2014.
 
 3. The Directors 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. The Directors have prepared accounts for the financial year ended
 31st March, 2014 on a going concern basis.  
 
 ACKNOWLEDGEMENT
 
 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.
 
 
                                         For and on Behalf of the Board
 
 Place: Noida                                            (H.S. Bharana)
 Date : August 14, 2014                    Chairman & Managing Director
                                                        (DIN: 00007018)
Source : Dion Global Solutions Limited
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