Your Directors take pleasure in presenting the 28th Annual Report on
the business and operations of your Company along with the standalone and consolidated
financial statements for the financial year ended on March 31, 2023.
Your Companys financial performance for the year under review is
summarized below:
SHARE CAPITAL
The paid-up equity share capital as at March 31, 2023 stood at ?47.50
Crore. During the financial year under review, there has been no change in the capital
structure of the Company.
RESERVES
The Company did not transfer any amount to reserves during the year.
DIVIDEND
The Board of Directors of your Company have not recommended any
dividend for the financial year under review.
STATE OF COMPANYS AFFAIRS
The Company is primarily engaged in power generation, infrastructure
development such as construction of bridges, hydro projects including operation and
maintenance thereof, supply of materials etc. Financial position of the Company is given
in the previous paragraphs. A detailed information on the operation of different business
segments of the Company, future expectations and business environment
is provided in the Management Discussion and Analysis Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the
Company, as required under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (hereinafter referred to as the "LODR Regulations"), is
annexed herewith and marked as Annexure "A".
CORPORATE GOVERNANCE
As required under the LODR Regulations, the Report on Corporate
Governance, Declaration of Whole-time Director on Code of Conduct, CEO / CFO Certification
and Auditors Certificate on compliance of conditions of Corporate Governance are annexed
herewith and marked as Annexure "B", "C", "D" and "E"
respectively.
SUBSIDIARIES AND ASSOCIATE
As on March 31, 2023, the Company has 5 subsidiaries and 1 associate.
There has been no material change in the nature of business of the subsidiaries.
The Company has also formulated a Policy for Determining
‘Material Subsidiaries in line with the requirement of the LODR Regulations.
The said Policy may be accessed at http://www.edclgroup.com/pdf/Policy-for-Determining-
Material-Subsidiary.pdf.
Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a
statement containing salient features of the financial statements of the Companys
subsidiaries and associate in Form AOC-1 is annexed herewith and marked as Annexure
"F".
Brief details of the subsidiaries are given below:
- Ayyappa Hydro Power Limited (Wholly-owned & material non-listed subsidiary)
The Company is operating the 15 MW Karikkayam Hydro Electric
Project, in the State of Kerala. During the year under review, revenue from operations of
the Company stood at ?1,967.30 Lakhs as compared to ?2,395.94 Lakhs in previous year.
- EDCL Power Projects Limited (Wholly-owned & material non-listed subsidiary)
The Company is operating the 7 MW Ullunkal Hydro Electric Project,
in the State of Kerala. During the year under review, revenue from operations of the
Company stood at ?495.52 Lakhs as compared to ?608.51 Lakhs in previous year.
Entire generation from the units of above mentioned subsidiaries was
sold to the Kerala State Electricity Board (KSEB) under Long term Power Purchase
Agreements (PPA).
Mr. Rohit Pandit (DIN: 03409093), Mr. Aman Jain (DIN: 08187995) and Mr.
Vishal Sharma (DIN: 08773037), Independent Directors of the Company were on the Board of
Directors of above mentioned subsidiaries, during the financial year 2022-23.
- EDCL – Arunachal Hydro Project Private Limited (Wholly-owned subsidiary)
The Company is yet to undertake any project.
- Eastern Ramganga Valley Hydel Projects Company Private Limited
The Company is executing 6.5 MW Burthing Small Hydro Electric
Project and 5.0 MW Phuliabagar Small Hydro Electric Project in the State of Uttarakhand.
DPR for both projects have been approved. Statutory clearances required for implementation
of both these projects have been availed..
- Sarju Valley Hydel Projects Company Private Limited
The Company is executing 5.5 MW Balighat Small Hydro Electric Project
in the State of Uttarakhand. DPR for the project has been approved.
The Company has an associate namely, Arunachal Hydro Power Limited
which is developing and executing various hydro power projects through its several
subsidiaries in the State of Arunachal Pradesh.
CONSLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements of the Company for the
financial year ended on March 31, 2023 have been prepared with the applicable provisions
of the Companies Act, 2013 and the Rules made thereunder and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 read together with governing Indian Accounting
Standard 110 "Consolidated Financial Statements" and Indian Accounting Standard
28 "Investments in Associates and Joint Ventures" and forms part of Annual
Report.
The consolidated financial statements for the financial year ended
March 31, 2023 have been prepared without considering the financial results of two
subsidiaries viz. Eastern Ramganga Valley Hydel Projects Company Pvt. Ltd. and Sarju
Valley Hydel Projects Company Pvt. Ltd. and one associate namely Arunachal Hydro Power
Ltd. due to non-availability of information as financial statements of these companies
were not furnished to the holding company. The balances as available from the audited
financial statements for the financial year ended March 31, 2022 have therefore been
carried forward for the purpose of consolidation. Please refer to Note 1 of Consolidated
Financial Statements for further information regarding Eastern Ramganga Valley Hydel
Projects Company Private Limited, Sarju Valley Hydel Projects Company Private Limited and
Arunachal Hydro Power Limited.
Pursuant to the provisions of Section 136 of the Companies Act, 2013,
the financial statements of the Company, consolidated financial statements along with
relevant documents and separate audited accounts in respect of first three subsidiaries
mentioned under the head ‘Subsidiaries and Associate are available on the
website of the Company.
BOARD OF DIRECTORS AND BOARD MEETINGS
Board and Commiflees
As on March 31, 2023, the Board of Directors comprised of 4
Non-executive Directors and a Whole-time Executive Director having experience in varied
fields. Out of 4 Non-Executive Directors, 3 were Independent Directors. Detailed
information on Directors is provided in the Report on Corporate Governance.
At present, there are following 3 Committees:
- Audit Committee;
- Nomination and Remuneration Committee; and
- Stakeholders Relationship Committee
The Board has accepted all the recommendations of the Audit Committee.
The details of composition, terms of reference, meetings etc. of the Committees are given
in the Report on Corporate Governance.
Number of Board meetings
The Board met 6 times during the financial year under review.
Detailed information on Board meetings are provided in the Report on Corporate Governance.
Directors
The shareholders approved the re-designation of Mr. Satyendra Pal
Singh (DIN: 01055370) as Executive Director for a period of 3 years effective from January
01, 2022 to December 31, 2024 at the Annual General Meeting held on September 30, 2022.
The shareholders also approved appointment of Ms. Disha Kumari Singh
(DIN: 09092385) Non-executive Director of the Company with effect from December 14, 2021
at the Annual General Meeting held on September 30, 2022. Ms. Disha Kumari Singh resigned
from the Board of Directors with effect from December 26, 2022. As recommended by the
Nomination and Remuneration Committee, the Board of Directors in its meeting held on
December 26, 2022 appointed Mr. Nitin Dutt Sharma (DIN: 09446669) as an Additional
Non-executive Director with effect from December 27, 2022 subject to approval of
shareholders at the ensuing General Meeting of shareholders. However, Mr. Nitin
Dutt Sharma resigned from the Board of Directors with effect from March
17, 2023. Mr. Rohit Pandit, Independent Director resigned from the Board of Directors with
effect from May 20, 2023. The Board placed on record its sincere appreciation, to the
directors who resigned from the Board, for the services rendered by them during their
respective tenure as Directors of the Company.
Ms. Disha Kumari Singh was again appointed as additional Non-executive
Director from May 30, 2023.
Mrs. Pankaja Kumari Singh (DIN: 00199454), Director, retires by
rotation and being eligible offers herself for re- appointment.
The brief resume and other details relating to Mrs. Pankaja Kumari
Singh, is provided in the Notice of Annual General Meeting. Your Board recommends her
re-appointment.
For further details, kindly refer to the Report on Corporate
Governance.
Nomination and Remuneration Policy
The Nomination and Remuneration Committee works with the Board to
determine the appropriate characteristics, skills and experience for the Board as a whole
and its individual members with the objective of having a Board with diverse backgrounds
and experience in business, governance, education and public service. The Company follows
the Nomination and Remuneration Policy for Directors, Key Managerial Personnel and Senior
Management Personnel of the Company as approved by the Board of Directors and the said
policy was amended from time to time. The said Policy may be accessed at hflp://www.edclgroup.com/pdf/Nomination-and-Remuneration-Policy.pdf.
The Board, on the recommendation of the Nomination and Remuneration
Committee, appoints Director of the Company based on his eligibility, experience and
qualifications and such appointment is approved by the shareholders of the Company.
Generally, the Whole-time Director (Executive Director) is appointed for a period of three
years. Independent Directors are appointed for a term of upto five consecutive years.
Based on their eligibility for re-appointment, the outcome of their performance evaluation
and the recommendation by the Nomination and Remuneration Committee, the Independent
Directors may be re-appointed by the Board for another term of five consecutive years,
subject to approval of the shareholders of the Company. The Directors shall retire as per
the applicable provisions of the Companies Act, 2013 and the policy of the Company. While
determining remuneration of the Directors, Key Managerial Personnel and Senior Management
Personnel, the Nomination and Remuneration Committee ensures that the level and
composition of remuneration is reasonable and sufficient to attract, retain and motivate
them and ensure the quality required to run the Company successfully. The relationship of
remuneration to performance is clear and meets appropriate performance benchmarks and such
remuneration comprises a balance between fixed and incentive pay reflecting short and long
term performance objectives appropriate to the working of the Company and its goals. The
Company follows a compensation mix of fixed pay, benefits, allowances, perquisites and
performance linked incentives for its Executive Directors, Key Managerial Personnel and
Senior Management Personnel. The Company pays sitting fees to all Directors for attending
Board and Committee meetings.
Declaration by Independent Directors
The Company has received declarations from all the Independent
Directors confirming that they meet the criteria of independence, as prescribed under the
Companies Act, 2013 and the LODR Regulations. All Independent Directors also confirmed
that they are not aware of any circumstance or situation which exists or may be reasonably
anticipated that could impair or impact their ability to discharge their duties. The Board
is also of the opinion that the Independent Directors fulfill all the conditions specified
in the Companies Act, 2013 and the LODR Regulations and are independent of the management.
The Board further opinionated that the Independent Directors possess requisite expertise,
experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts)
Rules, 2014 (as amended).
Familiarisation Programme for Independent Directors
The details of Familiarisation Programme for Independent Directors
has been given in the Report on Corporate Governance.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and as
prescribed by the LODR Regulations, as amended from time to time, the Board of Directors
carried out an annual evaluation of its own performance, Committees and individual
Directors of the Company. The Directors expressed their satisfaction with the evaluation
process.
The Board evaluated its performance after considering the inputs
received from all Directors based on the criteria such as composition and structure of the
Board with diverse background & experience, flexible & effective board procedures,
quality of timely information and effective functioning of the Board etc.
The Board evaluated performance of its Committees after considering the
inputs received from all Committee members based on the criteria involving composition of
the Committee with members having diverse experience, skill and effective functioning of
the Committee etc.
The Board and the Nomination and Remuneration Committee reviewed the
performance of individual Directors on the basis of the criteria such as professional
qualifications, prior experience, especially experience relevant to the Company,
commitment, contribution, integrity, independence and guidance / support to management
etc. Similarly, Board evaluated the performance of the Chairperson based on the criteria
of effective leadership, constructive relationships and communications within the Board,
addressing of the issues and concerns raised by the members of the Board etc.
The performance evaluation of the Independent Directors was carried out
by the entire Board, excluding the Director being evaluated. The performance evaluation of
the Chairperson and the Non Independent Directors was carried out by the Independent
Directors, who also reviewed the performance of the Board as a whole.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the
Companies Act, 2013 with regard to the Directors Responsibility Statement, your
Board confirms that:
- in the preparation of the annual accounts for the financial year ended on March 31,
2023, the applicable accounting standards have been followed along with proper explanation
relating to material departures, if any;
- 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 as at March 31, 2023 and of the profit / loss
of the Company for that period;
- 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;
- the Directors have prepared the annual accounts on a going concern basis;
- the Directors have devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems are adequate and operating effectively;
- the Directors have laid down internal financial controls to be followed by the Company
and that such internal
financial controls are adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company:
Whole-time Director: Mr. Satyendra Pal Singh - designated as
‘Executive Director.
Chief Financial Officer: Mr. Prabir Goswami.
Company Secretary: Ms. V?ayshree Binnani.
CORPORATE SOCIAL RESPONSIBILITY
The provisions under Section 135 of the Companies Act, 2013 read
with the Rules made thereunder are not applicable as the Company is not meeting any
criteria specified therein. The Company has not spent any amount under Corporate
Social Responsibility during the financial year 2022-23. Accordingly,
Annual Report on Corporate Social Responsibility activities is not required to be
attached.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company has adequate internal financial control system
commensurate with the size, scale and complexity of its operations. During the year, such
controls were tested and no reportable material weakness in the design or operation was
observed.
RISK MANAGEMENT
The Company has formulated and implemented a Risk Management Policy
(Risk Management Procedure) in consultation with Senior Management to identify various
kinds of risk in business and its process to minimize the same. For details, please refer
to Management Discussion and Analysis Report.
At present, the Company has not identified any element of risk which
may threaten the existence of the Company.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has a Whistle Blower Mechanism and a Policy namely,
Whistle Blower Policy that lays down the process for raising concern about unethical
behavior, actual or suspected fraud or violation of Companys Code of Conduct. The
said Policy may be accessed at hflp://www.edclgroup.com/pdf/Whistle-Blower-Policy.pdf.
Your Company hereby affirms that no Director / employee have been
denied access to the Chairman of the Audit Committee and that one annonymous complaint was
received during the year and disposed off by the Board of Directors.
LOAN, GUARANTEES AND INVESTMENTS
Particulars of loans, investments and guarantees have been
disclosed in the financial statements, which forms an integral part of this Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
There were no material contacts or arrangements with related
parties referred in Section 188 of the Companies Act, 2013 read with the Rules made
thereunder. Accordingly, AOC–2 is not required to be attached. All other related
party transactions entered into during the financial year were on arms length basis
and were in the ordinary course of business and were placed before the Audit Committee and
Board for their approval, as required. Prior omnibus approval of the Audit Committee was
obtained for the transactions which are of repetitive nature. ?40.20 Lakhs paid to a
Director of the Company, considering the profitability for the year ended March 31, 2023
has been considered recoverable. The details of transactions with related parties as per
Ind AS - 24 are disclosed in the notes to accounts. The Company has developed a Policy on
Related Party Transaction for the purpose of identification and monitoring of such
transactions.
AUDITORS AND AUDITORS REPORT
- Statutory Auditors
In terms of the provisions of Section 139 of the Companies Act,
2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, the
shareholders in their Annual General Meeting held on September 30, 2022 approved
re-appointment of M/s. ALPS & Co., Chartered Accountants, as the Auditors of the
Company for a consecutive period of 5 years from conclusion of the 27th Annual General
Meeting until conclusion of the 32nd Annual General Meeting of the Company scheduled to be
held in the year 2027.
The Company has received a certificate from M/s. ALPS & Co.,
Chartered Accountants confirming their eligibility to continue as Auditors of the Company
in terms of the provisions of Section 141 of the Companies Act, 2013 and the Rules framed
thereunder. They have also confirmed that they hold a valid certificate issued by the Peer
Review Board of the ICAI as required under the provisions of Regulation 33 of the LODR
Regulations.
In their report dated May 30, 2023, M/s. ALPS & Co. has given
adverse opinion in relation to standalone and consolidated financial statements of the
Company for the financial year ended March 31, 2023.
In respect of investments and loans in Arunachal Pradesh and
Uttarakhand undertakings, pending fulfilment of conditions and approvals etc. in terms of
the agreements and pending recovery thereof, the said amount and other receivables
pertaining to Arunachal Pradesh undertaking has been considered good and recoverable. In
respect of loans granted to wholly owned subsidiaries, the management is in the process of
determination of terms of repayment etc. and the same being granted as a matter of
financial support to the wholly owned subsidiary companies. The outstanding amount has
been considered good and recoverable. The investment in equity shares and preference
shares of one of the wholly owned subsidiary, being strategic in nature, no adjustment in
book value has been considered necessary by the management. The management is in the
process of recovery of outstanding balances of trade receivables and loans and pending
recovery thereof, the said amounts have been considered good of recovery. Reconciliation
of outstanding balances with customers and / or suppliers is under process and
consequential impact, if any, will be given effect to as and when determinable.
Remuneration paid to one of the directors of the company, pending approvals thereof, have
been considered recoverable during the year ended March 31, 2023. Project survey,
geological investigation and formulation of detailed project report and other allied works
in respect of projects undertaken by Uttarakhand undertaking are under process and based
on physical verification of assets carried out during previous financial year, no
adjustments in carrying value of capital work in progress has been considered necessary by
the Board.
Pursuant to the search conducted under section 132 of the Income Tax
Act, 1961 by income tax authorities in the financial year 2020-21, the Company has
received demand notices with respect to assessment years 2011- 12 to 2020-21, amounting to
?18,817.47 Lakhs as income tax from the income tax department. The demand has been
challenged through the appellate process enunciated in the Income Tax Act, 1961 on the
grounds of it being erroneous in facts and in law and the matter is pending as on date.
Pursuant to the application made by the Company, the demands have been stayed. Pending
resolution of the matters, ?603.30 Lakhs (including
?153.30 Lakhs recovered from the bank accounts of the Company) have
been deposited till March 31, 2023. Additionally, two subsidiaries namely, EDCL Power
Projects Ltd. and Ayyappa Hydro Power Ltd. have received assessment orders for assessment
of income tax for the years 2013-14 to 2021-22 and 2015-16 to 2020-21 and demand notices
aggregating to ?4,284.09 Lakhs and ?59.10 Lakhs respectively have been issued to
subsidiary Companies. Necessary appeals against these notices have been filed before the
Commissioner of Income Tax (appeals) and the matter is pending as on date. As per the
legal and professional advice received, the allegations and contentions made by the Income
Tax Authorities are legally not tenable and no liability as such is expected to arise in
respect of matters. Matters being pending in appeal, impact in this respect as such are
not determinable.
Other observations and opinions of the Statutory Auditors in their
report are self-explanatory in nature.
- Cost Auditors
The Company is required to maintain cost records as specified by
the Central Government under Section 148(1) of the Companies Act, 2013 and accordingly,
such accounts and records are made and maintained.
The Board of Directors have re-appointed M/s. N. Radhakrishnan &
Co., Cost Accountants of 11A, Dover Lane, Flat B1/34, Kolkata – 700 029 as the Cost
Auditors of the Company to conduct Cost Audit for the financial year 2023-24. In terms of
Section 148 of the Companies Act, 2013, your Board recommends ratification of remuneration
of the Cost Auditors at the ensuing Annual General Meeting. The Cost Audit Report for the
financial year 2021- 22 is yet to be filed with the Ministry of Corporate Affairs.
- Secretarial Auditor
The Board of Directors appointed Mr. Mukesh Chaturvedi, Practicing
Company Secretary to conduct the secretarial audit of the Company for the financial year
2022-23.
The Secretarial Audit Report for the financial year ended on March 31,
2023 is annexed herewith and marked as
Annexure "G" and forms an integral part of this Annual
Report.
The Board hereby clarifies that the delay in filing of forms and
non-filing of form were due to non-approval to file, financial and payment issues. The
Board has requested Mrs. Pankaja Kumari Singh, Director to allow filing of all pending
forms.
The Secretarial Audit Report does not contain any other qualification,
reservation or adverse remark or disclaimer.
ANTI-SEXUAL HARASSMENT POLICY
The Company has adopted Anti-Sexual Harassment Policy, covering all the
aspects as contained under The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. The Company has complied with the provisions
relating to constitution of Internal Complaints Committee under The Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Up till date, the Company has not received any complaint under the
Policy.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has generally complied with the Secretarial Standards on
Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The
Institute of Company Secretaries of India and approved by the Central Government.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith
and marked as Annexure "H".
The statement containing particulars of employees as required under
Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Rules forms part of this
Report. Further, the Report and the Accounts are being sent to the Members excluding the
aforesaid statement. In terms of Section 136 of the Act, the said statement will be open
for inspection upon request by the Members. Any Member interested in obtaining such
particulars may write to the Company Secretary. The said information is available for
inspection by the Members at the registered office of the Company during business hours on
working days upto the date of the ensuing Annual General Meeting.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Particulars in respect of conservation of energy and technology
absorption, foreign exchange earnings and outgo are annexed herewith and marked as Annexure
"I".
EXTRACT OF ANNUAL RETURN
In terms of the Companies Act, 2013, as amended, the Annual Return is
available on the website of your Company at www.edclgroup.com under the tab
"Investor Information> Annual Reports" under the link at hflps://www.edclgroup.
com/investor-information/annual-report/.
DISCLOSURE ON INCOME TAX DEMAND
The Company has received demand notices under the provisions of the
Income-tax Act, 1961, with respect to assessment years 2011-12 to 2020-21, amounting to
?18,817.47 Lakhs as income tax from the income tax department. The demand has been
challenged through the appellate process enunciated in the Income Tax Act, 1961. Please
refer to the matter briefed in fifth paragraph of "(i) Statutory Auditors" under
"Auditor and Auditors Report" mentioned herein above.
GENERAL
The Directors state that no disclosure or reporting is required in
respect of the following items during the year under review as:
- No deposits covered under Chapter V of the Companies Act, 2013 were accepted;
- No equity shares with differential rights as to dividend, voting or otherwise; or shares
(including sweat equity shares) to employees of the Company under any scheme were issued;
- No remuneration or commission to the Whole-time Director of the Company were paid from
any of its subsidiaries;
- No significant and material orders were passed by any regulatory authority or court or
tribunal impacting the going concern status and Companys operation in freseeable
future; please refer to the matter briefed in fifth paragraph of "(i) Statutory
Auditors" under "Auditor and Auditors Report" mentioned herein above.
- No material changes and commitments occurred affecting the financial position of the
Company between the end of financial year and date of report;
- No fraud has been reported by the Statutory Auditors, Cost Auditors and Secretarial
Auditors to the Audit Committee or the Board.
ACKNOWLEDGEMENTS
Your Directors express their sincere appreciation to the Central
and State Governments, Banks, customers, vendors and the Companys valued investors
for their continued co-operation and support.
Your Directors also wish to acknowledge the support and valuable
contributions made by the employees, at all levels.
Place : New Delhi Dated : August 10, 2023
For and on behalf of the Board
for Energy Development Company Limited
Sd/- Sd/-
Pankaja Kumari Singh Satyendra Pal Singh
(Director) (Executive Director) (DIN: 00199454) (DIN: 01055370)
+91-9892691696
