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Directors Report Year End : Mar '14    « Mar 13
The Directors are pleased to present the Twenty Sixth Annual Report
 and the audited accounts for the financial year ended March 31, 2014:
 
 FINANCIAL HIGHLIGHTS
 
 The financial performance of the Company, for the year ended March 31,
 2014 is summarized below: 
 
                                                         (Rs. Crores)
 
 Particulars                                  2013-14          2012-13
 
 Total Revenue                               8,511.09         8,592.99
 
 Earnings Before Interest, Tax, 
 Depreciation  ACY- Amortisation (EBIDTA)        1,027.92           937.54
 
 Less: Finance Cost 771.15 679.53
 
 Profit Before Tax, Depreciation  ACY- 
 Amortisation                                  256.77           258.01
 
 Less: Depreciation and 
 Amortisation Expenses                         244.76           227.88
 
 Profit Before Tax (PBT)                        12.01            30.13
 
 Less: Tax expenses (net of 
 deferred tax effect and Minimum 
 Alternate Tax credit)                           4.20            10.51
 
 Profit After Taxation (PAT)                     7.81            19.62
 
 Add: Profit Brought Forward                   954.52           934.90
 
 Surplus Available for appropriation           962.33           954.52
 
 Profit carried to Balance Sheet               962.33           954.52
 
 To conserve the cash resources, your Directors have not recommended any
 dividend on the equity shares for the financial year ended March 31,
 2014.
 
 While the focus has been on execution, slowdown in progress of projects
 due to external factors and the financial squeeze faced by
 construction companies, had an adverse impact on project work and
 revenues were affected. In this backdrop, the Company did take a more
 cautious approach in bidding for new projects, and the order backlog as
 on May 20, 2014 was Rs. 20,222 crore.
 
 The Company achieved total revenues of Rs. 8,511 Crores in FY 2013-14
 in comparison to Rs. 8,593 Crores in FY 2012-13. Earnings Before
 Interest, Tax, Depreciation and Amortisation (EBIDTA) increased by 9.6 ACU-
 to Rs.  1,028 Crores in FY 2013-14 in comparison to previous year.
 Finance costs rose to Rs. 771 Crores in comparison to Rs. 680 Crores in
 previous year.  Profit Before Tax (PBT) stood at Rs. 12 Crores as
 against Rs. 30 Crores in previous year. Profit After Tax (PAT) reduced
 to Rs. 8 Crores in FY 2013-14 from Rs. 20 Crores in previous year.
 
 The Management Discussion and Analysis Section of the Annual Report
 presents a detailed business review of the Company.
 
 During the year, 3 new subsidiaries / step down subsidiaries were
 added ADs- these are PL Surya Urja Limited, India, Punj Lloyd Aviation Pte.
 Limited and Reliance Contractors Private Limited, Singapore.
 
 PT Contech Bulan, Sembawang Australia Pty Limited, Sembawang Tianjin
 Pte Limited, Sembawang Tianjin Heping Pte Limited, Sembawang Group Pte
 Limited and Christos Trading Limited ceased to be subsidiaries of the
 Company
 
 In accordance with the General Circular issued by the Ministry of
 Corporate Affairs, Government of India, the Balance Sheet, Statement of
 Profit and Loss and other documents of the subsidiary companies are
 not being attached with the Balance Sheet of the Company. The Company
 will make available the Annual Accounts of the subsidiary companies and
 the related detailed information to any member of the Company who is
 interested in obtaining the same.
 
 The Annual Accounts of the subsidiary companies are available for
 inspection at the Registered Office of the Company and that of
 respective subsidiary companies between 11.00 a.m. to 1.00 p.m. on all
 working days. The Consolidated Financial Statements presented by the
 Company include financial results of its subsidiary companies.
 
 A statement in respect of each of the subsidiaries, giving the details
 of capital, reserves, total assets and liabilities, details of
 investment, turnover, profit before taxation, provision for taxation,
 profit after taxation and proposed dividend, if any, is attached to
 this report.
 
 HEALTH, SAFETY AND ENVIRONMENT (HSE)l
 
 The Company has internalized HSE into day to day operations across all
 sites. The Company is committed to adopting the best in class HSE
 practices. The Company has certification for three management systems:
 OHSAS 18001:2007 - Occupational Health  ACY- Safety Management System, ISO
 14001:2004 - Environment Management System and ISO: 9001-2008 - Quality
 Management System. Assurance for on ground practice and veracity of
 these standards is provided by periodic audits at projects conducted by
 a third party agency - Det Norske Veritas. These audits are also
 undertaken at the corporate level. A detailed note on the HSE practices
 and initiatives by the Company is included in Management Discussion and
 Analysis Section of the Annual Report.
 
 DIRECTORS
 
 Mr Luv Chhabra retires by rotation, and being eligible, offers himself
 for reappointment at the ensuing Annual General Meeting ( ACI-the AGM ACI-).
 The Board of Directors recommends his appointment.
 
 In terms of the provisions of the Companies Act 2013, Dr. Naresh Kumar
 Trehan, Mr. Phiroz Adi Vandrevala, Ms. Ekaterina Alexandra Sharashidze
 and Mr. Maniedath Madhavan Nambiar, are retiring by rotation at the AGM
 and are proposed to be appointed as Independent Directors of the
 Company at the AGM for a period of five years with effect from the
 date of the AGM.  Appropriate resolutions seeking your approval for the
 appointment of above persons as Independent Directors of the Company,
 forms part of the notice calling the AGM.
 
 Mr. Puthucode Narayanswami Krishnan, was appointed as an Additional
 Director of the Company w.e.f. November 01, 2013. Mr. Krishnan will
 hold the office upto the date of the ensuing AGM. Appropriate
 resolution seeking your approval for the appointment of Mr. Krishnan as
 a Director of the Company, liable to retire by rotation, forms part of
 the notice calling the AGM.
 
 Mr. Krishnan was also appointed as  ACI-Director - Finance ACI- by the Board of
 Directors of the Company for a period of five years with effect from
 November 1, 2013 and he was re designated as  ACI-Director Finance  ACY- Chief
 Financial Officer ACI- by the Board of Directors in its meeting held on
 May 20, 2014. Appropriate resolution seeking your approval for the
 above appointment and payment of remuneration to him forms part of the
 notice calling the AGM.
 
 Mr. Jayarama Prasad Chalasani, was appointed as an Additional Director
 Of B the Company w.e.f. January 31, 2014. Mr. Chalasani will hold the
 office upto J the date of the ensuing AGM. Appropriate resolution
 seeking your approval for the appointment of Mr. Chalasani as a
 Director of the Company, liable to retire by rotation, forms part of
 the notice calling the AGM.
 
 Mr. Chalasani was also appointed as  ACI-Director  ACY- Group CEO ACI- by the Board
 of Directors of the Company for a period of five years with effect
 from January 31, 2014 and he was re designated as  ACI-Managing Director and
 Group CEO ACI- by the Board of Directors in its meeting held on May 20,
 2014.  Appropriate resolution seeking your approval for the above
 appointment and payment of remuneration to him forms part of the notice
 calling the AGM.
 
 During the year, Mr Sanjay Gopal Bhatnagar and Mr. P K Gupta, ceased to
 be directors of the Company w.e.f. August 02, 2013 and December 31,
 2013 respectively.
 
 Brief resume of the Directors seeking appointment / re-appointment at
 the AGM, as required under Clause 49 of the Listing Agreement and
 Companies Act 2013, forms part of the Notice convening the AGM.
 
 DIRCTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Section 217(2AA) of the Companies Act,
 1956, it is hereby confirmed:
 
 1.  that in the preparation of the annual accounts, the applicable
 accounting standards have been followed ADs-
 
 2.  that the Directors have selected such accounting policies and
 applied them consistently and made judgments and estimates that were
 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 or loss of the Company for the period under review ADs-
 
 3.  that the Directors have taken proper and sufficient care 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 ADs- and
 
 4.  that the Directors have prepared the annual accounts of the Company
 on a ''going concern'' basis.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 The details as required to be provided in terms of the Securities and
 Exchange Board of India (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme) Guidelines, 1999 as amended from time to time
 with regards to the Employee Stock Option Plan 2005 and Employee Stock
 Option Plan 2006 of the Company as on March 31, 2014 are given below.
 
 Sl. Particulars      ESOP 2005
 No.                Nov. 17, 2005  May 10, 
                                   2006         Oct. 30, 
                                                2006          Sept. 27, 
                                                              2007
 
 1 Total No. of     3,217,445         771,040    1,491,050        30,000 
   options 
   granted
 
 2 Pricing 
   Formula          Exercise 
                    price          Rs. 235.99   Rs. 154.46    Rs. 299.90
                    being at 10 ACU-   (being the   (being the    (being the
                    discount to
                    IPO            market price
                                   as           market
                                                price as      market 
                                                              price as
                    price i.e.
                    Rs. 630/-      defined in 
                                   SEBI         defined in 
                                                SEBI          defined in
                                                              SEBI
                    per share 
                    of Rs.         guidelines)  guidelines)   guidelines)
                    10 each. 
                    After split    
                    in face 
                    value of 
                    share from
                    Rs. 10 to
                    Rs. 2 per 
                    Share, the
                    exercise
                    price 
                    adjusted 
                    to Rs.
                    126/-
                    per share
 
 3 Number of        3,217,445         771,040   1,491,050          9,000
   options 
   vested
 
 4 Number           1,017,108          10,132     214,135      Nil 
   of options
   exercised
 
 5 Total no. 
   of shares        1,017,108          10,132     214,135      Nil
   arising as a 
   result of
   exercise of
   options
 
 6 Number of        2,200,337         760,908   1,276,915         30,000
   options 
   lapsed
 
 7 Number of        Nil              Nil        Nil            Nil
   options 
   forfeited
 
 8 Variation 
   in terms         None             None       The 
                                                remuneration   The 
                                                               remunera
                                                               -tion 
   of options                                   committee 
                                                had in         committee
                                                               had in
                                                its meeting 
                                                held           its meet
                                                               ing held
                                                on March 30,   on March 
                                                               30,
                                                2009 revised
                                                the            2009 rev
                                                               ised the
                                                period of 
                                                exercise       period of
                                                               exercise
                                                of stock 
                                                options        of stock
                                                               options
                                                from 18 
                                                months         from 18 
                                                               months
                                                to three 
                                                years.         to three
                                                               years.
 
 9 Money 
   realized           128,156           2,391      33,075      Nil 
   by exercise 
   of
   options 
   (Rs.''000)
 
 10 Total 
    No. of 
    options         NIL           NIL           NIL            Nil 
    in force
    as on 31st
    March, 
    2014
 
 11 Grant to 
    Senior 
    Management
 
    -Number of 
    options          1,850,545        352,935    1,002,800        30,000
 
    -Vesting 
    period          4 Yrs         4 Yrs         4 Yrs          4 Yrs
 
 12 Any other       Mr. V K.      Mr. 
                                  Pradeep ACoAKg-     Mr. V K.       Mr. Paul 
                                                               Birch ACoAKgAq-,
    employee 
    who             Kaushik ACo-,     Kulshrestha,  Kaushik ACo-,      Options 
                                                               Granted
    receives a 
    grant in        Options 
                    granted       Options 
                                  granted       Options 
                                                granted         - 30,000
    any one 
    year of          - 200,000       - 40,000     - 75,000
 
    options 
    amounting 
    to 5 ACU- or
    more of 
    options 
    granted 
    during 
    that year
 
 13 Identified      Nil           Nil           Nil            Nil
    employees 
    who were 
    granted 
    option, 
    during any 
    one year 
    equal to or 
    exceeding 
    1 ACU- of the 
    issued 
    capital 
    (excluding 
    outstanding 
    warrants and
    conversions) 
    of the 
    Company at 
    the time of 
    grant.
 
 Particulars                        ESOP 2006
                   May 30, 
                   2008          March 30, 
                                 2009         January 22, 
                                              2010            August 
                                                              03, 2010
 
 Total No. of
 options 
 granted             40,000          30,000        30,000         30,000
  
 Pricing 
 Formula          Rs. 310.35     Rs. 90.40 
                                 (being        Rs. 198.90     Rs. 132.45
                  (being the     the market 
                                 price         (being the     (being the
                  market price 
                  as             as defined 
                                 in            market price 
                                               as             market 
                                                              price as
                  defined in 
                  SEBI           SEBI 
                                 guidelines)   defined in 
                                               SEBI           defined in
                                                              SEBI
                  guidelines)                  guidelines)    guidelines)
 
 Number of
 options 
 vested                6,000          9,000   Nil                  9,000
 
 Number
 of options
 exercised        Nil                  3,000   Nil            Nil
 
 Total no. 
 of shares
 arising 
 as a 
 result of
 exercise 
 of options       Nil                  3,000   Nil            Nil
 
 Number of
 options 
 lapsed                40,000         27,000        30,000        30,000
 
 Number of
 options 
 forfeited        Nil            Nil           Nil            Nil
 
 Variation 
 in terms
 of options       The remuner
                  ation          None          None            None 
                  committee 
                  had in
                  its meeting 
                  held on 
                  March 30,
                  2009 revised 
                  the period of 
                  exercise
                  of stock 
                  options
                  from 18 
                  months
                  to three 
                  years.
 
 Money realized
 by exercise of
 options 
 (Rs.''000)        Nil                    271   Nil             Nil
 
 Total No. of 
 options
 in force 
 as on 31st
 March, 2014      Nil            NIL           Nil             Nil
 
 Grant to Senior
 Management
 
 -Number of 
 options               40,000         30,000        30,000        30,000
 
 -Vesting 
 period           4 Yrs          4 Yrs         4 Yrs           4 Yrs
 
 Any other
 employee who
 receives a 
 grant in
 any one 
 year of
 options 
 amounting
 to 5 ACU- or 
 more of
 options 
 granted
 during   
 that year        Ms. Pratima    Mr. Aditya    Mr. Atul        Mr. 
                  Ram ACoAKgAqACo-,
                  Options        Vij ACoAKgAqACoAKg-, 
                                 Options       Pasricha ACoAKgAqACoAKgAq-, S.S.Raju,
                                                                ACoAKgAqACoAKgAqACo-
                  Granted -      Granted -     Options 
                                               Granted         Options
                                                               Granted
                  20,000         30,000        - 30,000         - 30,000
 
 Identified
 employees who
 were granted
 option, 
 during any
 one year 
 equal
 to or 
 exceeding
 1 ACU- of the 
 issued
 capital 
 (excluding
 outstanding
 warrants and
 conversions)
 of the 
 Company at
 the time of
  grant.          Nil            Nil           Nil             Nil
 
  ACo- Ceased to be in 
 employment w.e.f. 
 16.12.2009.               ACoAKg- Ceased to be in
                          employment w.e.f. 
                          15.04.2010               ACoAKgAq-Ceased to be 
                                                  in employment w.e.f
                                                  31.08.2010
 
  ACoAKgAqACo- Ceased to be in 
 employment w.e.f 
 31.08.2010                ACoAKgAqACoAKg-Ceased to be in
                          employment w.e.f
                          31.05.2011                ACoAKgAqACoAKgAq-Ceased to be
                                                   in employment w.e.f
                                                   30.04.2010
 
  ACoAKgAqACoAKgAqACo-Ceased to be in 
 employment w.e.f 
 12.09.2012
 
 CORPORATE GOVERNANCE
 
 As stipulated under Clause 49 of the Listing Agreements executed with
 the Stock Exchanges, the Report on Corporate Governance is annexed to
 this report and forms part of the Annual Report.
 
 The requisite Certificate from the Auditors of the Company confirming
 compliance with the conditions of Corporate Governance as stipulated
 under the aforesaid Clause 49 is attached to this report.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 During the year, your directors have constituted the Corporate Social
 Responsibility Committee (CSR Committee) comprising Mr. Atul Punj -
 Chairman and Mr Luv Chhabra and Mr. M Madhavan Nambiar as other
 members.
 
 The said Committee has been entrusted with the responsibility of
 formulating and recommending to the Board, a Corporate Social
 Responsibility Policy (CSR Policy) and deciding the activities to be
 undertaken by the Company.
 
 MANAGEMENT DISCUSASION AND ANALYSIS
 
 As stipulated under Clause 49 of the Listing Agreements executed with
 the Stock Exchanges, Management Discussion and Analysis Report, for the
 year under review, is presented in a separate section forming part of
 the Annual Report.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In accordance with the Accounting Standard (AS-21), Consolidated
 Financial Statements are attached and form part of the Annual Report.
 
 AUDITORS AND AUDITORS'' REPORT
 
 M/s Walker Chandiok  ACY- Co LLP, Chartered Accountants, Statutory Auditors
 of the Company, hold office until the conclusion of the ensuing Annual
 General Meeting and are eligible for reappointment. In terms of Section
 139 of the Companies Act, 2013, they can be appointed for a remaining
 term of three years starting from the conclusion of the ensuing Annual
 General Meeting until the conclusion of the Fourth consecutive Annual
 General Meeting of the Company (subject to ratification of their
 appointment at each Annual General Meeting).
 
 The Company has received letter from the statutory auditors to the
 effect that their reappointment, if made, would be within the
 prescribed limits under Section 139 of the Companies Act, 2013 and that
 they are not disqualified for reappointment.
 
 The observations of the Auditors have been fully explained in Notes 10,
 13 and 14 in Annexure 1 to the Abridged Financial Statements and also
 Notes 36, 41 and 42 to the complete set of Financial Statements.
 
 INTERNAL CONTROL SYSTEM
 
 The Group Internal Audit Division along with outsourced audit partner
 KPMG, continuously monitors the effectiveness of the internal controls
 with an objective to provide to the Audit Committee, an independent,
 objective and reasonable assurance on the adequacy and effectiveness of
 the organisation''s risk management, control and governance process.
 Group Internal Audit Division develops an audit plan / schedule based
 on the risk profile of business activities are prioritised for audit
 accordingly.
 
 The Audit Division also assesses opportunities for improvements in
 business processes, systems and controls ADs- provides recommendation
 designed to add value to the organisation and follows up on the
 implementation of corrective actions.
 
 The scope and authority of the Group Audit Division is derived from the
 Audit Committee. The audits are scheduled in a manner that audit plan
 is focussed on following objectives:
 
 - All operational and related activities are performed efficiently and
 effectively
 
 - Checking and verifying the key financial and operational controls
 
 - Significant financial, managerial and operating information that is
 relevant, accurate and reliable is provided on time
 
 - Employees actions are in accordance with the company''s policies and
 procedures, applicable laws and regulation
 
 - Significant legislative and regulatory provisions impacting the
 organisation are recognised and addressed appropriately
 
 The internal audit function works closely with the outsourced partner
 to develop internal financial  ACY- operational control framework and
 provide independent and objective assurance to the Audit committee and
 the Executive Management on the system of internal controls deployed in
 the group and provides a systematic, disciplined approach to evaluating
 and improving the effectiveness of risk management, control and
 governance procedures.
 
 FIXED DEPOSITS
 
 The Company has not accepted any fixed deposits from public,
 shareholders or employees during the year.
 
 PARTTICULARS OF EMPLOYEES
 
 In terms of the 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 employees are set out in
 the annexure to the Directors'' Report.
 
 CONSUMPTION OF ENERGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The details as required under the Companies (Disclosure of Particulars
 in Report of Board of Directors) Rules, 1988 are given as an annexure
 to the Directors'' Report.
 
 ACKNOWLEDGEMENT
 
 Your directors recognise and appreciate the efforts of all employees of
 the Company. Your directors would like to express their sincere
 appreciation for the continued co-operation and support received from
 shareholders, debenture holders, debenture trustee, bankers, financial
 institutions, regulatory bodies and other business constituents.
 
 For and on Behalf of the Board of Directors
 
 Atul Punj
 
 Chairman
 
 Place: Gurgaon
 
 Date: May 20, 2014
Source : Dion Global Solutions Limited
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