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Punj Lloyd Directors Report, Punj Lloyd Reports by Directors
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Punj Lloyd
BSE: 532693|NSE: PUNJLLOYD|ISIN: INE701B01021|SECTOR: Infrastructure - General
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Directors Report Year End : Mar '15    « Mar 14
Dear Members,
 
 The Directors are pleased to present the Twenty Seventh Annual Report
 and the audited accounts of Punj Lloyd Limited (the Company) for
 the financial year ended March 31,2015:
 
 FINANCIAL HIGHLIGHTS
 
 The financial performance of the Company, for the year ended March
 31,2015 is summarized below: 
                                                             (Rs. Crores)
 Particulars                                    2014-15           2013-14
 
 Total revenue                                 5,688.67          8,511.09
 
 Earnings before interest (finance costs), 
 tax, depreciation and amortisation (EBIDTA)     560.77          1,027.92
 
 Less: Finance costs                             859.54            771.15
 
 Profit/ (Loss) before tax, depreciation and 
 amortisation                                   (298.77)           256.77
 
 Less: Depreciation and amortisation expenses    313.74            244.76
 
 Profit/ (Loss) before tax (PBT)                (612.51)            12.01
 
 Less: Tax expenses (net of deferred tax 
 effect and minimum alternate tax credit 
 entitlement/ written off (net))                (105.85)             4.20
 
 Profit/ (Loss) after taxation (PAT)            (506.66)             7.81
 
 Add: Surplus brought forward                    962.33            954.52
 
 Less: Adjustment relating to depreciation 
 on fixed asset (Pursuant to enactment of 
 Schedule II to the Companies Act, 2013)          25.41                 -
 
 Surplus available for appropriation             430.26            962.33
 
 Less: Appropriations                                 -                 -
 
 Net surplus carried to balance sheet            430.26            962.33
 
 
 DIVIDEND
 
 To conserve the cash resources, your Directors have not recommended any
 dividend on the equity shares for the financial year ended March
 31,2015.
 
 OPERATIONS REVIEW
 
 The growth in Construction and Infrastructure Sector of the Country has
 been extremely modest. Modest growth, coupled with delays in settlement
 of claims/ litigations with the customers, has continued to stress your
 Company, both operationally and financially. During the current year,
 there have been focussed efforts on strengthening the core EPC business
 and towards settlement of claims with customers. The Company, as a
 whole, is going through the phase of business correction by enhancing
 internal efficiencies. Additionally, as a step towards debt reduction
 through monetization of non-core assets, the Company sold its stake in
 Global Health Pvt. Ltd.
 
 Total income of your Company decreased from Rs. 8,511.09 crores in
 financial year ended March 31, 2014 to Rs. 5,688.67 crores in current
 year. EBITDA reduced to Rs. 560.77 crores in comparison to last year''s
 Rs. 1,027.92 crores. Finance costs for the current year increased to
 Rs.  859.54 crores as against Rs. 771.15 crores during last year. All
 above has resulted in a net loss after tax of Rs. 506.66 crores as
 against a profit after tax of Rs. 7.81 crores in previous year.
 
 BUSINESS REVIEW
 
 The Management Discussion and Analysis Section of the Annual Report
 presents a detailed business review of the Company.
 
 HEALTH, SAFETY AND ENVIRONMENT (HSE)
 
 The Company has always laid emphasis on HSE. During the year under
 review the focus deepened with an objective of converting this into a
 critical brand differentiator for the organisation. 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 AND KEY MANAGERIAL PERSONNEL
 
 During the year under review, Dr. Naresh Trehan, Independent Director
 and Mr. Luv Chhabra, Whole Time Director stepped down from the Board
 w.e.f. February 12, 2015 and May 11, 2015 respectively. The Board
 wishes to place on record deep sense of appreciation for the valuable
 contributions made by them to the Board and the Company during their
 tenure as Directors.
 
 In terms of Section 2(19) and 203 of the Companies Act, 2013, Mr. Nidhi
 K. Narang has been appointed as Chief Financial Officer with effect
 from September 03, 2014.
 
 In terms of Section 149(7) of the Companies Act, 2013, Mr. Phiroz A.
 Vandrevala, Ms. Ekaterina A. Sharashidze and Mr. M. M. Nambiar,
 Independent Directors of the Company have given declarations to the
 Company to the effect that they meet the criteria of independence as
 provided in Section 149(6) of the Companies Act, 2013.
 
 Mr. P.N. Krishnan retires by rotation, and being eligible, offers
 himself for reappointment at the ensuing Annual General Meeting (the
 AGM). The Board of Directors recommends his appointment.
 
 Brief resume of Mr. P.N. Krishnan seeking 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.
 
 MEETINGS OF THE BOARD
 
 During the year, the Board of Directors of the Company met 6 times on
 May 20, 2014, August 04, 2014, September 03, 2014, November 14, 2014, 
 January 07, 2015 and February 13, 2015.
 
 POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL
 PERSONNEL AND OTHER EMPLOYEES
 
 The Nomination and Remuneration Committee in its meeting held on May
 20, 2014 had recommended to the Board of Directors a Policy on
 Directors'' Appointment and Remuneration, including criteria for
 determining qualifications, positive attributes, independence of a
 director and relating to remuneration for the Directors, Key Managerial
 Personnel and Other Employees in terms of sub-section (3) of section
 178 of the Companies Act, 2013. The Board of directors in its meeting
 held on May 20, 2014 have approved and adopted the same. The said
 policy is enclosed as Annexure - I to this Report.
 
 FORMAL ANNUAL PERFORMANCE EVALUATION OF THE BOARD AND THAT OF ITS
 COMMITTEES AND INDIVIDUAL DIRECTORS
 
 Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the
 Listing Agreement, Independent Directors at their separate meeting held
 on January 07, 2015, without participation of the Non-independent
 Directors and Management, have considered and evaluated the Board''s
 performance and performance of the Chairman and Non-independent
 Directors. The Independent Directors in the said meeting have also
 assessed the quality, quantity and timeliness of flow of information
 between the Company Management and the Board.
 
 The Board of Directors in their meeting held on January 07, 2015 have
 evaluated the performance of each of the Independent Directors (without
 participation of the relevant Director).
 
 The criteria for performance evaluation have been detailed in the
 Corporate Governance Report which is attached as Annexure - II to this
 Report.
 
 DIRECTOR''S RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Sub-Sections (3)(c) and (5) of Section
 134 of the Companies Act, 2013, it is hereby confirmed:
 
 1 . that in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 2. that the Directors have 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 or loss of the Company for the period under review;
 
 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, 2013 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 4. that the Directors have prepared the annual accounts of the Company
 on a ''going concern'' basis.
 
 5. that 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.
 
 6. that 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.
 
 AUDIT COMMITTEE
 
 The Audit Committee comprises of Mr. Phiroz Vandrevala, Independent
 Director as Chairman and Ms. Ekaterina Sharashidze, Mr. P.N. Krishnan,
 Mr. M. Madhavan Nambiar as Members.
 
 The Board of Directors have accepted all the recommendation of the
 Audit Committee.
 
 VIGIL MECHANISM
 
 The Company has in place a vigil mechanism in the form of Whistle
 Blower Policy. It aims at providing avenues for employees to raise
 complaints and to receive feedback on any action taken and seeks to
 reassure the employees that they will be protected against
 victimization and for any whistle blowing conducted by them in good
 faith. The policy is intended to encourage and enable the employees of
 the Company to raise serious concerns within the organization rather
 than overlooking a problem or handling it externally. The Company is
 committed to the highest possible standard of openness, probity and
 accountability. It contains safeguards to protect any person who uses
 the Vigil Mechanism (whistle blower) by raising any concern in good
 faith. The Company does not tolerate any form of victimization and
 takes appropriate steps to protect a whistleblower that raises a
 concern in good faith and treats any retaliation as a serious
 disciplinary offence that merits disciplinary action. The Company
 protects the identity of the whistle blower if the whistle blower so
 desires, however the whistle blower needs to attend any disciplinary
 hearing or proceedings as may be required for investigation of the
 complaint. The mechanism provides for a detailed complaint and
 investigation process.  If circumstances so require, the employee can
 make a complaint directly to the Chairman of the Audit Committee. The
 Company also provides a platform to its employees for having direct
 access to the Managing Director and Group CEO of the Company for
 raising any concerns. It is through CEO Konnect
 (ceokonnect@punjlloyd.com).
 
 Mr. Dinesh Thairani, Company Secretary is the Compliance Officer. The
 confidentiality of those reporting violations is maintained and they
 are not subjected to any discriminatory practice.
 
 EMPLOYEE STOCK OPTION SCHEME
 
 As at the beginning of the financial year under review, i.e., April
 01,2014, no stock options were in force under the Company''s existing
 Employee Stock Option Plan 2005 and Employee Stock Option Plan
 2006. Also, during the financial year ended on March 31,2015, no
 fresh stock options were issued to the employees under any plan.
 
 The Company has never provided any loan to its employees to purchase
 the shares of the Company.
 
 The Company has not issued any shares with differential voting rights.
 The Company has not issued any sweat equity shares.
 
 CORPORATE GOVERNANCE
 
 As stipulated under Clause 49 of the Listing Agreements executed with
 the Stock Exchanges, the Report on Corporate Governance and 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 as Annexure - II to this Report 
 and forms part of the Annual Report.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
 
 The Company has formed a CSR Committee comprising of Mr. Atul Punj as
 Chairman and Mr. J.P. Chalasani, Mr. M. Madhavan Nambiar as other
 members.
 
 The said Committee has developed a Policy on CSR , which has been
 approved by the Board of Directors in its meeting held on May 20, 2014.
 
 The Company has taken initiatives and undertaken certain projects as
 part of CSR initiatives during the financial year 2014-15 and the
 report on the CSR activities is attached as Annexure - III to this
 Report.
 
 MANAGEMENT DISCUSSION 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.
 
 AUDITORS AND AUDITORS'' REPORT
 
 M/s Walker Chandiok & Co LLP (formerly Walker, Chandiok & Co),
 Chartered Accountants had been appointed as statutory auditors of the
 Company from the conclusion of the AGM of the Company held on August
 04, 2015 until the conclusion of the Fourth consecutive AGM of the
 Company, subject to ratification of their appointment at each AGM.
 
 The Company has received letter from the statutory auditors to the
 effect that their appointment, if ratified, would be within the
 prescribed limits under Section 139 of the Companies Act, 2013 and that
 they are not disqualified for appointment.
 
 The observations of the Auditors have been fully explained in note 35
 (a), (b) and (c) to the Financial Statements.
 
 SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
 
 M/s. Suresh Gupta & Associates, Company Secretaries have been appointed
 as Secretarial Auditors of the Company and their Secretarial Audit
 Report is attached as Annexure - IV to this Report.
 
 The observations of the Secretarial Auditors in respect of amount
 unspent on CSR activities have been fully explained in clause 6 of
 Corporate Social Responsibility Report Attached as Annexure - III to
 this Report.
 
 COST AUDITORS
 
 The Board has appointed M/s Bhavna Jaiswal & Associates, (Membership
 No. 25970), Cost Accountants, Delhi, as Cost Auditors of the Company
 for conducting the audit of cost records of the Company for the
 financial year 2014-15.
 
 FIXED DEPOSITS
 
 The Company has not accepted any fixed deposits from public,
 shareholders or employees during the year under review.
 
 PARTICULARS OF EMPLOYEES
 
 The details as required in terms of the provisions of Section 197 read
 with Rule 5(1) of the Companies (Appointment and Remuneration of
 Managerial Personnel) Rules, 2014 are attached as Annexure - V to this
 Report.
 
 The details of employees as required in terms of the provisions of
 Section 197 read with Rule 5 (2) & (3) of the Companies (Appointment
 and Remuneration of Managerial Personnel) Rules, 2014 are attached as
 Annexure - VI to this Report.
 
 The Company has in place an Anti Sexual Harassment Policy in line with
 the requirements of The Sexual Harassment of Women at the Workplace
 (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints
 Committee has been set up to redress complaints received regarding
 sexual harassment. All employees (permanent, contractual, temporary,
 trainees) are covered under this policy. During the year 2014-15, no
 complaints were received.
 
 CONSUMPTION OF ENERGY AND FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The details as required under Section 1 34(3)(m) of the Companies Act,
 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014, regarding
 conservation of energy, technology absorption and foreign exchange
 earning and outgo are attached as Annexure - VII to this Report.
 
 LOANS, GUARANTEES AND INVESTMENT
 
 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 given in the note No. 42 (a) of stand alone
 Financial Statements read with respective heads to the Financial
 Statements.
 
 RELATED PARTY TRANSACTIONS
 
 In accordance with Section 134(3)(h) of the Companies Act, 2013 read
 with Rule 8(2) of Companies (Accounts) Rules, 201 4, the particulars of
 contracts or arrangements with related parties, referred to in Section
 188(1) of the Companies Act, 2013, in the prescribed Form AOC.2 are
 attached as Annexure - VIII to this Report.
 
 RISK MANAGEMENT POLICY
 
 The Company has developed and implemented a Risk Management Policy. The
 details of elements of risk are provided in the Management Discussion
 and Analysis section of the Annual Report.
 
 INTERNAL FINANCIAL CONTROLS
 
 Pursuant to Section 134 of the Companies Act 2013, the Directors, based
 on the representation received from the operating management, state
 that:-
 
 - The Board, through the operating management has laid down Internal
 Financial Controls to be followed by the Company.
 
 - To the best of their knowledge and ability and inputs provided by
 various assurance providers confirm that such financial controls are
 adequate and were operating effectively.
 
 EXTRACTS OF ANNUAL RETURN
 
 In terms of Section 134(3)(a) of the Companies Act, 2013 read with Rule
 12(1) of Companies (Management & Administration) Rules, 2014, the
 extracts of Annual Return of the Company in Form MGT.9 is attached as
 Annexure - IX to this Report.
 
 SIGNIFICANT AND MATERIAL ORDERS
 
 No significant and material orders have been passed by any regulators
 or courts or tribunals impacting the going concern status and company''s
 operations in future.
 
 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.
 
 Subsidiaries, 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 and forms part of the Annual Report, which covers the
 performance and financial position of the subsidiaries, associates and
 joint venture companies.
 
 The annual accounts of the subsidiary companies are available on the
 website of the Company viz. www.punjlloyd.com and will also be
 available for inspection by any member or trustee of the holder of 
 any debentures of the Company at the Registered Office and Corporate 
 Office. A copy of the above accounts shall be made available to any 
 member on request.
 
 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, 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 22, 2015
 
Source : Dion Global Solutions Limited
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