As on: Apr 27, 2024 11:41 PM
To,
The Members of EMCO Limited,
Your Directors present the 53rd Annual Report on the business and operations of the Company together with the Standalone and Consolidated Audited Financial Statements for the year ended 31st March 2018.
Financial Summary/ Highlights:
During the year under review, the financial performance of the Company is as under (Rupees in Lakhs)
Overview of Company's Financial Performance
During the year under review, Income from Sales and Services of the Company stood at Rs. 34,998.88 Lakh as compared Rs. 86,792.15 Lakh in the previous Financial Year.
The Company has incurred a net Loss of Rs. 16,022.24 Lakh in the current financial year against the net loss of Rs. 6,884.83 Lakh y inthepreviousfinancial
Transfer to Reserve: ear under review, the Company did not transfer any amount to Reserve. Duringthefinancial
Dividend:
Considering the financial performance of the Company for the year under review, your Directors have not recommended any dividend.
Share Capital:
During the year under review, the Company allotted 66,666 Equity shares to the eligible employees on 16th November, 2017 and 66,666 Equity Shares on 29th January, 2018 pursuant to Employee Stock Option Scheme-2011 of the Company. Consequently, the total paid up equity share capital of the Company increased from Rs. 13,55,51,766 divided in to 6,77,75,883 equity shares of Face
Value of Rs. 2/- per share to Rs. 1,35,818,430 divided in to 6,79,09,215 Equity Shares of Face value of Rs. 2/- each.
Change in the nature of business:
There was no change in the nature of business of the Company during the year under review.
Public Deposits:
During the financial year 2017-18, your Company has not accepted any deposit within the meaning of Section 73 and Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
Subsidiaries, Associates and Joint Ventures Companies:
The Company has following Non-material unlisted subsidiaries:
A. Direct Subsidiaries : I. Indian :
EMCO Power Limited
EMCO Renewable Energy Limited
Shekhawati Transmission Service Company Limited
EMCO Infrastructure Limited
II. Foreign :
EMCO Overseas Pte Limited (Singapore)
EMCO Global DMCC (Dubai)
B. Step Down Subsidiaries : I. Indian :
EMCO Transmission Networks Limited
PT Setenco Investa Niaga (Indonesia)
C. Joint Venture Companies through EMCO Power Limited (WOS):
Shyam Emco Infrastructure Ltd
Kalinga Energy and Power Ltd.
As per the provisions of Section 136 of the Companies Act, 2013, the Audited Financial Statements of each of the subsidiaries of the Company and Management Accounts of Emco Overseas PTE Ltd. are displayed on the website of the Company. The Audited Financial Statements of the subsidiary companies for the Financial Year 2017-18 will be available for inspection by any Member of the Company. If any Member of the Company so desires, the Audited Financial Statements of the subsidiaries to him/her on request. The physical copy of the said documents will also be available at the Company's registered office for inspection, during normal business hours on all working days, excluding Saturday.
Consolidated Accounts:
The performance and financial position of each of the Subsidiaries, Associates and Joint Venture companies are detailed in Statement containing salient features of the financial statements of Subsidiaries/ Associate Companies/ Joint Ventures in form AOC- I which is prepared pursuant to Section 129 of the Companies Act, 2013 and annexed herewith as "Annexure- A".
Directors and Key Managerial Personnel:
Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with the Articles of Association of the
Company, Mr. Shailesh S. Jain (DIN: 00005829), Non-Executive Director of the Company, being longest in the office,shall retire by rotation at the ensuing 53rd Annual General Meeting (AGM) and being eligible, offer himself for re-appointment.
Your Directors recommend the re-appointment of Director as mentioned above.
Mr. S. V. Deo (DIN: 00210554), Mr. Bherulal Choudhary (DIN: 00011905) and Mr. Sanjay Bhatnagar (DIN: 00867848), Independent Directors of the Company completed their first term of appointment and they were appointed as Independent Directors of the Company for their second term for a period of five years by members of the Company by passing special resolution for each of them at the 50th Annual General Meeting held on 25th September, 2015.
The tenure of Mr. Rajesh S. Jain (DIN: 00005829), Whole Time Director (WTD) has expired on 19th October, 2017 and members of the company approved the re-appointment of Mr. Rajesh S. Jain (DIN:00005829) Whole Time Director (WTD) for the period of 3 years w.e.f 20th October, 2017 at 52nd Annual General Meeting of the Company.
Similarly, the appointment of Mrs. Archana Capoor (DIN: 01204170) was regularized as Independent Director for first term of five years at the 52nd Annual General Meeting held on 25th September, 2017
During the year under review, Mr. Amit Sudhakar, Chief Financial Officer of the Company resigned on 29 th September, 2017. The board placed on record its appreciation for valuable contribution and support extended by Mr. Amit Sudhakar during his tenure as Chief Financial Officer of the Company and members of various committees'
Mr. Ganesh Tawari, Company Secretary has also given the additional charge of CFO with effect from 20th March, 2018
Brief profile of the Directors proposed to be appointed/re-appointed as required under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI), are provided in the Notice of 53rd AGM of the Company.
None of the Directors of your Company is disqualified under the provisions of Section 164 (2) of the Companies Act, 2013.
Declaration by Independent Directors
The Company has received declaration of Independence from Independent Directors under Section 149(7) of the Companies Act, 2013 (the Act), that he/she meets the criteria of Independence laid down in Section 149(6) of the Act, and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Significant and material order passed by the regulators or courts or tribunals impacting the going concern status and
Company's operation in future
During the financial year under review, there were no such order passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future.
Disclosure of Internal Financial Control:
The Board has adopted and implemented the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. The Internal Controls are tested for adequacy, efficiency and effectiveness through audit by Internal Auditors and the observations, corrective and preventive actions are reviewed by the management and Audit Committee of the Board of Directors.
During the Financial Year under review, no material or serious observation has been received from the Internal Auditors of the Company for inadequacy or ineffectiveness of such control.
Number and dates of meetings of the Board and attendance of the directors:
During the year under review, 6 (Six) Board Meetings were held as per details given in the Report of Corporate Governance. A Notice of Meetings of the Board of Directors and Committee thereof is circulated well in advance along with the agenda giving detailed explanations, to enable the Board and Committee to take an informed decision. Details of other committees are given in Corporate
Governance Report.
Establishment of Vigil Mechanism:
The Company has established and adopted Vigil Mechanism and the policy thereof for directors and employees of the Company in accordance with the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year under review, no personnel of the Company approached the Audit Committee on any issue falling under the said policy.
The vigil mechanism policy is available on the website of the company at link: http://www.emco.co.in/pdf/policy/Vigil%20
Mechanism%20Policy.pdf
Particulars of remuneration to Directors and Employees
Pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the particulars of remuneration to the Directors and Employees of the Company and the details of the ratio of remuneration of each Director to the median employee's remuneration are annexed with the report as "Annexure- B".
Management Discussion and Analysis:
The Management Discussion and Analysis forms part of the Directors' Report is annexed herewith as "Annexure- C".
AUDITORS a) Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act, 2013 (the Act) and the Companies (Audit & Auditors) Rules, 2014, M/s. Chaturvedi & Shah (FRN: 101720W), Chartered Accountants, Statutory Auditors of the Company were appointed for their second term for a period of 5 (five) years at the 50th Annual General Meeting (AGM) held on 25th September, 2015. The appointment of M/s. Chaturvedi & Shah (FRN: 101720W) as Statutory Auditors of the Company shall be required to be ratified by the members at the ensuing 5 3rd Annual General Meeting. The Company has received written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and if their appointment is ratified, their appointment would be within the limits prescribed under Section 139 of the Act. Your Directors recommend the ratification of appointment of M/s. Chaturvedi & Shah as Statutory Auditors of the Company.
Members are informed that as per the amended Provision of Section 131 (1) of Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, there is no requirement of ratification for appointment of Statutory Auditor at every Annual General Meetings. Thus, your Director's recommend the ratification of appointment of M/s. Chaturvedi & Shah, Chartered
Accountants as a statutory auditors of the Company till 55th Annual General Meeting b) Secretarial Auditors
Pursuant to provisions of Section 204 of the Companies Act, 2013 (the Act) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. MMJC & Associates LLP, Practicing Company Secretaries, Mumbai were appointed as Secretarial Auditors of the Company to conduct Secretarial Audit for Financial Year 2017-18.
The Report on Secretarial Audit for the Financial Year 2017-18, issued by M/s. MMJC & Associates LLP, in form of MR-3, forms an integral part of this Board's Report annexed herewith and marked as "Annexure- D".
In terms of Section 204 of the Act, on the recommendation of the Audit Committee, the Board of Directors has appointed M/s. MMJC & Associates LLP, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct Secretarial audit for Financial Year 2018-19.
The Company has received consent letter and confirmation certificate from M/s. MMJC & Associates LLP to the effect that their appointment as Secretarial Auditors of the Company, if made, would be in accordance with the limit specified under the provisions of the ICSI Guidance Note on Secretarial Audit and they are not disqualified to act as Secretarial Auditors of the
Company.
Explanations by the Board on qualifications made by the Auditors:
The delay of 5 days in filing of Form FLA was inadvertent on the part of the Company. c) Cost Auditors
The Company is required to maintain cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014 (including any amendment(s), modification(s) or re-enactment(s) thereof for the time being in force) prescribed by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013 in respect of certain activities undertaken by the Company as such the prescribed cost records have been maintained.
Pursuant to the provisions of Section 148(1) of the Companies Act, 2013 (the Act) read with the Companies (Cost Records and Audit) Amendments Rules, 2014 (including any amendment(s), modification(s) or re-enactment(s) thereof for the time being in force), the Board of Directors of the Company on recommendation of Audit Committee have appointed M/s. Kishore Bhatia & Associates (FRN: 00294), Cost Accountants, as Cost Auditors of the Company for the financial year 2018-19, to audit the cost records maintained by the Company for its Steel, Electricity and transformers products, at a remuneration of Rs. 1,75,000/- per annum plus applicable tax and reimbursement of out of pocket expense that may be incurred. Your Directors recommend to the members of the Company a resolution for ratification of remuneration payable to the Cost Auditors for the Financial Year ended on 31st March, 2019 is included in the Notice of the ensuing 53rd Annual General Meeting.
The Company has received confirmation certificate from them to the effect that their appointment as Cost Auditors of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and rules made there under and they are not disqualified to act as Cost Auditors of the Company.
Certificate in this regard is obtained from Cost Auditors for the financial year ended 31 st March, 2018. d) In ternal Auditors
Pursuant to the provisions of Section 138 of the Companies Act, 2013 and rules made there under (including any amendment(s), modification(s) or re-enactment(s) thereof for the time being in force), the Board of Directors of the Company on recommendation of Audit Committee have appointed M/s. R R Kabra & Birla (FRN: 126333W), Chartered Accountants, as Internal Auditors of the Company for the Financial Year 2018-19, to conduct Internal Audit of the Company.
The Company has received consent letter and confirmation certificate from them to the effect that their appointment as Internal Auditors of the Company, if made, would be in accordance with the provisions under the Companies Act, 2013 and rules made there under and they are not disqualified to act as Internal Auditors of the Company.
Extract of Annual Return:
Pursuant to Section 134(3)(a) of the Companies Act, 2013, the details of an extract of Annual Return in Form MGT-9 is annexed herewith as "Annexure- E" to the Board's report.
Directors' Responsibility Statement:
Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, it is hereby confirmed: a) that in the preparation of the annual accounts for the financial year ended on 31st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; b) that the Directors had 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 as at 31st March, 2018 and of the loss of the Company for the year ended on that date; c) that the Directors had 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; d) that the Directors had prepared the annual accounts for the financial year ended on 31st March, 2018 on a ‘going concern' basis; e) that the Directors have laid down proper internal financialcontrols to be followed by the Company and that such internal ontrols are adequate and were operating effectively; and c financial f) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Details in respect of fraud reported by Auditors
Pursuant to Section 143(12) of the Companies Act, 2013 there were no frauds reported by the Auditors of the Company during the year under review, to the Audit Committee or the Board of Directors, as such there is nothing to report under Section 134(3) (ca) of the Companies Act, 2013.
Policy on directors' appointment and remuneration
Pursuant to Section 178(3) of the Companies Act, 2013, the policy for selection and appointment of directors and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters are adopted by the Board of the Company and forms part of Corporate Governance Report.
Particulars of loans, guarantees or investments:
Your company is engaged in providing infrastructure facilities and therefore the provisions of Section 186 of the Companies Act, 2013, related to loan made, guarantee given or security provided is exempted and not applicable to the Company. Whereas investment made during the year has been disclosed in notes to Financial Statements.
Particulars of material contracts or arrangements with related parties:
There were no new material contract or arrangements entered into by the Company with related parties referred to in Sub Section
(1) of the Section 188 of the Companies Act, 2013 duringthefinancialyear 2017-18. Hence, the particulars of related parties contract or arrangement in form AOC-2 is not applicable.
In accordance with the provisions of Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated the Related Party Transactions Policy and the same is uploaded on the website of the Company at link http://www.emco.co.in/pdf/policy/RelatedPartyPolicy.pdf
Report on Corporate Governance:
As required under the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Corporate Governance and a certificate confirming compliance with the requirements of Corporate Governance forms part of this
Annual Report.
Training to Independent Directors:
The details of Familiarization Programme are provided in the Corporate Governance report. Further at the time of appointment of an Independent Director, a formal letter of appointment outlining his / her role, responsibility, functions and duties were given to the Independent Directors.
Material changes and commitments affecting financial position between the end of the financial year and date of report:
There are no material changes and commitments affecting financial position between the end of the financial year and date of report.
Conservation and Energy, Technology Absorption and Foreign Exchange Earnings & Outgo:
The particulars as prescribed under sub-section 3(m) of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are enclosed as "Annexure- F" to this report.
Risk Management Policy:
The Company has formulated a Risk Management Policy, which reflects the overall risk management philosophy, the Company's overall approach to risk management and the roles and responsibilities for risk management.
The Company is mainly engaged in Transformers and Engineering, Procurement and Construction (EPC) of Transmission line and sub-station projects. The Company continuously identifies and mitigates the risks through a robust risk identification and management system.
Details of some of the risks involved in the business are discussed below:
1) Commodity Risk:
The Company deals with various commodities, such as steel, zinc, copper and aluminium. Fixed price contracts can have a negative impact if input costs rise, if it is not appropriately hedged in time. By adding price escalation clause in most of the contracts, the Company passes off such negative impacts to its client, partially or completely.
2) Currency Risk:
The Company is exposed to the risk of currency fluctuations, if any exposure remains open. The Company its currency exposures hedged. It measures and manages these risks centrally and carries out periodic reviews of these risks; whenever required external experts are also consulted.
3) Execution Risk:
Execution delay may results in cost overruns and may also negatively impact company's reputation. EPC projects could face delays due to external factors like Right of Way issues, manpower shortages, etc. The Company deploys a well defined standard operating procedure (SOP) from project planning to completion. It keeps a close watch and reviews these risks periodically and take timely corrections measures.
Corporate Social Responsibility (CSR):
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, detailed Information as required is annexed herewith as "Annexure- G" forming part of this report.
Report on Prevention of Sexual Harassment of Women:
Your Company strongly believes in zero tolerance policy in case of sexual harassment at workplace and is committed to provide a healthy environment to each and every employee of the Company. The Company designed and implemented ‘Policy for prevention of Sexual Harassment' in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition &
Redressal ) Act, 2013 (‘the said Act') and rules made thereunder. As per Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee to deal with the complaints received by the Company pertaining to gender discrimination and sexual harassment at workplace.
Pursuant to the provisions of Section 21 and 22 of the said Act, the detailed report on cases filed & their disposal under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 for the period ended December, 2017 was submitted by Presiding Officer of the Internal Complaints Committee to; the District Women and Child Development Officer (Thane Collectorate) and Chairman of the Company within time limit prescribed under the said Act. The committee has not received any complaints during the year under review.
Evaluation of Directors, Committee and Board:
Pursuant to the provisions of Section 178 of Companies Act, 2013 read with Schedule IV of the Act and Regulation 17 read with Part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Stakeholder Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Report of Corporate Governance.
Employees Stock Option Scheme (ESOS)
Human Resource is an essential resource for the growth of the Company and man power is the strength for achieving vision of the Company. Based on this view, your Company has framed following Employee Stock Option Schemes for the financialgrowth of employees of the Company:
1) Employee Stock Option Scheme, 2011
2) Employee Stock Option Scheme, 2015
During the year under review, the Company had granted 18,25,000 Options to its employees as decided by the Management of the Company under Employee Stock Option Scheme, 2015. The Company has also allotted 66,666 Equity Shares on 16th November 2017 and 66,666 Equity Shares on 29th January, 2018 to its eligible employees, who has exercised their rights under the Employees
Stock Option Scheme, 2011.
Employee Stock Option Scheme 2011 and 2015 are both in operation.
Pursuant to Regulation 14 read with SEBI circular dated 16th June, 2015 the details of the shares issued under Employee Stock Option Schemes of the Company are uploaded on the website of the Company i.e. http://www.emco.co.in/pdf/AR-2017-ESOS-
Statement.pdf
Insurance:
All the assets of the Company are adequately insured.
Acknowledgment:
Your Directors would like to express their grateful appreciation for the assistance, support and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors would also like to take this opportunity to express their appreciation to the dedicated and committed EMCOites for the contribution in trying to achieve the Company's vision to "To build a world class company through reliability and be a great place to work".