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Updated:07 Apr, 2020, 15:57 PM IST

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Updated:07 Apr, 2020, 16:01 PM IST

DIRECTORS' REPORT

Dear Shareholders,

Your Directors present herewith the Fourteenth Annual Report together with the accounts of your Company for the 9 months ended 31st March, 2014.

OPERATING RESULTS & PERFORMANCE

Your Directors report that during the 9 months period (July–March) the company recorded a total income at Rs.521.87 crores as compared to Rs.1,765.48 crores in the previous year (15 months) on a standalone basis. Loss before tax and extraordinary items was at Rs.425.44 crores as compared to Rs.103.82 crores in the previous year.

Loss after tax was at Rs.439.37 crores as compared to a loss in the previous year of Rs.262.86 crores. The last 2 years figures cannot be compared as the current financial year is for a period of 9 months and the figures last year was for a period of 15 months.

Your Company's Standalone order book was at Rs.2,156 crores as at 31st March, 2014.  

BUSINESS HIGHLIGHTS

Your Directors state that last year the Company had undergone tough times due to the business environment, cash flows, delay from customers in terms receiving payments. However, during the period your company was awarded contracts primarily in water projects, worth more than Rs.800 crores from prestigious clients besides repeat orders. Some of the project awards are as under:

• PHED, Rajasthan Rs.92 crores –Work of Regional Water Supply Scheme for 44 villages from Sepau (Dist–Dholpur) HW under Chambal Dholpur Bharatpur Project with O&M for 10 years on Single Point Responsibility Turnkey Basis

• PHED, Kota–Rajasthan Rs.47crores –Execution ofthe work ofIntake Pumping Station, Raw Water Main, Treatment plant, 11/0.44KV sub station, Clear Water Reservoir, Clear water main, Pumping station, cluster rising mains, cluster distribution mains, cluster ESR's with associated civil, electrical and mechanical works, village distribution system, IEC activities etc. for Shaygarh Water Supply Project on single responsibility turn key basis with 10 year O&M, District Baran.

• TWAD–Madurai Rs.187crores– Providing Pumping Main of 750mm dia CI LA class pipe from the Main Pumping Station at Beach road to the Sewage Treatment Plant at Tharuvaikulam for UGSS to Thoothukudi Corporation in Thoothukudi Dist. etc

• Chennai Metropolitan Water Supply and Sewerage Board, Chennai–Rs.87 crores– Providing Water Supply Improvement Scheme to Pallavaram Municipality covering head works, Feeder Main, UGT/OHT and Distribution System in Zones 9 to 16 (Package–II) and also Providing Water Supply Improvement Scheme to Pammal Municipality covering head works, Feeder Main, OHT and Distribution System.

• Bharath Petroleum Corporation Limited, (Kochi Refinery)– Rs.157 crores – Civil, Structural & Underground Piping Works of FCCU for Integrated Refinery Expansion Project (IREP) of

BPCL–Kochi Refinery.

• Municipal Corporation Of Brihanmumbai (Sewerage Operations Department), Mumbai–Rs.57 crores – Rehabilitation of Sewer Lines by GRP Lines Using Trenchless Technology for Slice A and Rehabilitation of Sewer Lines by GRP Lines Using Trenchless Technology for Slice B.

• Rashtriya Ispat Nigam Limited, Visakhapatnam Steel Plant, AdministrativeBuildingVisakhapatnam–Rs. 182 crores – Sinter Machine – 1 Revamping & Upgradation and Phase – 1 of Sinter Machine –2 Revamping & Upgradation at RINL/Vizag.

SUBSIDIARY

SHRIRAM EPC FZE (SEF)

The Company had floated a 100% Subsidiary in UAE in April 2013, to explore opportunities in the overseas EPC Market.

ASSOCIATES

HALDIA COKE AND CHEMICALS PVT. LTD (HCCL)

HCCL is engaged in the business of inter alia, manufacturing, processing, importing, exporting, trading, buying, selling, stocking, distributing coke carbon), coal, and supplying to manufacturing industries like steel, copper, aluminium and to carry on the business of managing, owning, controlling, erecting, commissioning, operating plants for the above and also to act as engineering procurement and construction contractors in connection with engineering.

During the last couple of years HCCL has been going through tough times and the Company has been supporting whenever necessary. We expect the operations to stabilize in the coming years. During the year 2013–14, HCCL recorded a turnover of Rs.471.88 crores compared to Rs.502.35 crores in 2012–13.

PREFERENTIAL ISSUE

During the year M/s Shriram Industrial Holdings Ltd, the holding Company infused Rs.300 crores into the Company by way of Cumulative Redeemable Preference Shares to shore up the networth of the Company.

BUSINESS OVERVIEW

Your Company operates in two main segments; turnkey contracts and wind turbines. A brief review of the business in these segments is given below.

The turnkey contracts segment represents the Company's engineering, procurement and construction projects business, which include renewable energy projects like biomass–based power plants, metallurgical and process plant projects and municipal services projects like water and wastewater treatment plants, water and sewer infrastructure and pipe rehabilitation. The order book was Rs.2,156 crores as on March 31, 2014.

DIVIDEND

Since the Company has made a loss for the year, the Board has decided not to recommend Dividend.

CAPITAL STRUCTURE

During the period under review, equity share capital of your Company remained unchanged as there was no new allotment of Equity Shares under ESOP 2006 & 2007 schemes.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011 pronounced a Green initiative in Corporate Governance that allows Companies to send notices/documents to shareholders electronically. The Green Initiative endeavors to reduce consumption of paper, in turn preventing deforestation and contributes towards a green and clean environment. In support of the initiative announced by MCA, your Company will send notices convening Annual General Meeting, Audited Financial Statements, Directors Report and Auditors' Report etc in electronic form during this financial period also. Your Company would like to continue the Green Initiative further and requests all shareholders to opt for electronic documents.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statement presented by the Company include the financial information of all its Subsidiary Companies prepared in accordance with the Accounting Standard (AS 21) issued by the Institute of Chartered Accountants of India.

The Government of India, Ministry of Corporate Affairs, under Section 212(8) of the Companies Act, 1956 vide  Letter Ref.51/12/2007–CL–III dated 8th February, 2011 have  granted exemption to all Companies from attaching the full text of the financial statements of the company's aforesaid Subsidiaries along with the Company's accounts from the year ended 31st March, 2011. Necessary disclosures will be made in respect of the said Subsidiary in this Annual Report apart from the statement pursuant to Section 212 of the Companies Act, 1956.

However, on request by any member of the Company/ Statutory Authority interested in obtaining full text of the financial statement, these documents will be made available for examination, at its registered office. Pursuant to this, a statement summarizing the financial results of the Subsidiary is attached to the Consolidated Financial Statement.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and outlook of the company and its business is given in the Management Discussion and Analysis Report, which forms a part of this report.

CORPORATE GOVERNANCE

Your Company is in compliance with the requirements and disclosures with respect to the Code of Corporate Governance as required under Clause 49 of the Listing Agreements with the Stock Exchanges. A report on Corporate Governance along with a certificate from the Auditors forms a part of this report.

ESOPs

The details 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 in respect of the stock options granted under the Shriram EPC Employee Stock Option Scheme– 2006 and the Shriram EPC Employee Stock Option Scheme–2007 are given below:

DIRECTORS

Mr. S R Ramakrishnan and Mr. R. Sundararajan, Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for election for a period of 5 years.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

The Company has constituted an Audit Committee as per the provisions of the Companies Amendment Act, 2000 and under Section 292 A of the Companies Act, 1956 at the Board Meeting held on 05th June 2002. The present members of the Committee are as follows:

1. Mr S.R. Ramakrishnan

2. Mr R. Sundararajan

3. Mr. S. Krishnamurthy

4. Mr. S. Bapu

The Committee has met three times during the 9 months period.

PARTICULARS OF EMPLOYEES

In terms 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 or set out in the Annexure to this Report. However having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Your directors confirm:

• That in the preparation of the annual accounts, the applicable accounting standards have been followed;

• That they 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 the profit of the company for that period;

• That they had 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; and

• That they had prepared the annual accounts on a going concern.

REGISTRAR & SHARE TRANSFER AGENT

Cameo Corporate Services Limited Subramanian Building, V Floor No. 1, Club House Road Chennai 600 002 India Tel: (91 44) 2846 0390 Fax: (91 44) 2846 0129 Email: investor@cameoindia.com Website: www.cameoindia.com Contact Person: Mr. R.D. Ramasamy, Director SEBI Registration Number: INR000003753  

AUDITORS

M/s Deloitte Haskins and Sells, Chartered Accountants, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re–appointment.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistance and support. The Directors also wish to thank the Shareholders of the company for their continued support even in this global recession. Further the Directors also wish to thank the customers and suppliers for their continued co–operation and support. The Directors further wishes to place on record their appreciation to all employees at all levels for their commitment and their contribution.

For and on behalf of the Board

R Sundararajan

Director

PLACE : Chennai

DATE :27th May, 2014

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