IL&FS Engineering and Construction Company Limited (IECCL)
Your Directors take pleasure in presenting the 34th Annual Report on
the business and operations of the Company together with the Audited Financial Statements
for the financial year ended March 31, 2023.
(I) STANDALONE FINANCIAL RESULTS :
The Financial performance highlights of the Company are as under:
Financial Results:
|
|
(Rs. in Crore) |
| Particulars |
FY 2023 |
FY 2022 |
| Revenue from Operations |
177.10 |
307.64 |
| Other Income |
38.55 |
71.04 |
| Total Income |
215.65 |
378.68 |
| Profit/(Loss) before Interest, Depreciation, Exceptional
Items and Tax |
(85.63) |
(147.36) |
| Less Finance Cost |
23.07 |
46.00 |
| Profit/(Loss) before Depreciation, Exceptional Items and
Tax |
(108.70) |
(193.37) |
| Less: Depreciation and Amortization Expenses |
10.18 |
13.55 |
| Loss before Exceptional Items & Tax |
(118.88) |
(206.92) |
| Exceptional Item (Net) |
5.12 |
179.43 |
| Loss Before Tax |
(124.00) |
(386.35) |
| Tax expense - Deferred tax |
- |
- |
| Loss After Tax |
(124.00) |
(386.35) |
| Other comprehensive income/(loss) for the year |
(0.39) |
(0.17) |
| Total Comprehensive Income for the year |
(124.39) |
(386.52) |
| Paid up Equity Capital |
131.12 |
131.12 |
| Earnings per share (in Rupees) |
|
|
| -Basic |
(9.46) |
(29.46) |
| -Diluted |
(9.46) |
(29.46) |
(II) OPERATIONAL HIGHLIGHTS :
During the year ended March 31, 2023, your Company achieved a turnover
of 215.65 Crore on a stand-alone basis as against Rs.378.68 Crore in the previous year
ended March 31, 2022. The net loss for the year amounted to Rs. (124 Crore)as against
Rs(386.35 Crore) in the previous corresponding year.
The turnover is attributable to revenues generated from existing
projects. The Company continues defaulting on existing loans to lenders including
borrowing from promoters and is in compliance with the terms of the moratorium of Honble
NCLT, Mumbai.
(III) DIVIDEND :
Due to accumulated losses of the Company coupled with a tough situation
arising out of present state of affairs, your Directors express their inability to
recommend any dividend for the year on Preference as well as on Equity Shares.
(IV) RESERVES :
No amount is recommended for transfer to Reserves of the Company for
financial year ended March 31, 2023.
(V) STATE OF AFFAIRS OF THE COMPANY :
During the year under review, the Company successfully completed
Ahmedabad Metro Project and three Power Projects in the State of West Bengal. The
Ahmedabad Metro Project was inaugurated by Honble Prime Minister in latter part of
September 2022. Your Company has bagged an order for the completion of Balance Works
constituting 5.6 km of Viaduct & Structural Works of five nos. of elevated Metro
Stations from VIP Road Station to Dream City Station, Surat of Gujarat Metro Rail
Corporation Limited from SEL-SPSCPL JV.
The Company already had orders worth Rs.425 crore (approx.) at the
beginning of the year and had received orders for Rs.359.63 Crore for the execution of an
EPC works for Surat Metro Rail. The detailed position on the order book and financial
performance of the Company has been provided under Management Discussions & Analysis
Report.
Your Company is part of the Infrastructure Leasing and Financial
Services Limited ("IL&FS") group. The Board of Directors of IL&FS has
been reconstituted pursuant to the orders passed by the National Company Law Tribunal,
Mumbai Bench ("NCLT") in Company Petition No. 3638 of 2018 filed by the Union of
India, acting through the Ministry of Corporate Affairs under Sections 241 and 242 of the
Companies Act, 2013, as amended ("Companies Act") on the grounds of
mismanagement of public funds by the erstwhile board of Infrastructure Leasing &
Financial Services Limited (IL&FS) and the affairs of IL&FS being conducted in a
manner prejudicial to the public interest. As updated in the last years Annual Report,
the resolution process of the Company, with approval of all concerned stakeholders of the
Company, initiated by IL&FS is in process.
(VI) SHARE CAPITAL :
During the year under review, there was no change in the share capital
of the Company Shares held by Directors:
None of the Directors of the Company holds any Shares or convertible
instruments of the Company.
(VII) DEPOSITS :
During the year under review, your Company had not accepted any deposit
from the public under Chapter V of the Companies Act, 2013
(VIII) DIRECTORS:
The Non-executive Directors hold the entire composition of the Board of
Directors of the Company. Out of the same, three Directors stand nominated by
Infrastructure Leasing & Financial Services Limited, the Promoter Group, and two
Directors are Independent Directors. The requirement of maintaining six member composition
as per corporate governance criterion could not be complied with due to IL&FS crisis.
The Honble NCLT vide its Order dated 26th April, 2019 have taken similar stand in this
regard.
During Financial Year 2022-23, Mr. C S Rajan resigned as Non-executive
Director and Chairman of the Company and Mr. Nand Kishore was appointed as Director in
Non-executive capacity and is the Non-executive Chairman of the Company.
The Independent Directors have fulfilled the criteria of Independence.
No relative(s) of Directors have/has been appointed to the office or
place profit in the Company during the year.
As per Regulation 17 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board of Directors of top 2000 listed Companies (wef.
April 01, 2020) shall comprise of not less than six directors. The Board of Directors as
on March 31, 2023, comprise the following five directors.
| S. No. Name of the Directors |
Date of Appointment |
| 1. Mr. Nand Kishore* |
October 03, 2022 |
| 2. Mr. Subrata Kumar Mitra |
January 15, 2021 |
| 3. Dr. Jagadip Narayan Singh |
January 15, 2021 |
| 4. Mr. Dilip Lalchand Bhatia |
December 24, 2018 |
| 5. Mr. Manish Kumar Agarwal |
January 15, 2021 |
As per Section 149(1) read with Rule 3 of the Companies (Appointment
and Qualification of Directors) Rules, 2014 of the Companies Act, 2013, the Company is
required to appoint a woman director. Honble NCLT vide order dated April 26, 2019 has,
inter alia, granted dispensation for complying with the said requirement by virtue of
powers vested in them under Section 242(2(4) of the Companies Act, 2013. This was granted
for the resolution of financial problems, issues in the public interest in all group
entities of IL&FS by the newly constituted Board of Directors, nominated by Union of
India.
None of the Directors of the Company are inter-se related to each
other.
Necessary declaration from Dr. Jagadip Narayan Singh and Mr. Subrata
Kumar Mitra, Independent Directors have been obtained under the provisions of the
Companies Act, 2013.
Non-Executive Directors:
The Non-Executive Directors are paid sitting fee for attending the
Board and meetings of various committees.
Except as mentioned above, no other payments were made by the Company
to Non-Executive Directors and the Company does not have any pecuniary relationship or
transactions with the Non-Executive Directors. The details of amount paid to the Directors
of the Company towards Sitting Fee are mentioned in the Form MGT-9 annexed to this Report
as well as the Corporate Governance Section of this Annual Report.
(IX) MANAGERIAL REMUNERATION POLICY :
In terms of the provisions of Section 178 of the Companies Act, 2013
read with Rules made thereunder and Regulation 19 of Listing Regulations, the Board of
Directors of the Company had framed Managerial Remuneration Policy which includes the
criteria for determining qualifications, positive attributes, independence of directors
and other matters as specified under Section 178(3) of the Companies Act, 2013 and
Regulation 19 read with Part D of Schedule II of Listing Regulations. The policy is
available on the website of the Company at http://www.ilfsengg.com/html/policies.php
(X) KEY MANAGERIAL PERSONNEL :
Mr. Rajib Kumar Routray, was appointed as Company Secretary &
Compliance Officer in the capacity of Key Managerial Personnel(KMP) of the Company with
effect from midnight on 29th May, 2022. Mr. Sistla Srinivas Kiran, had ceased to be the
Company Secretary and KMP of the Company with effect from 29th May, 2022 and continues to
be associated as a team member of the Compliance Officer.
Thus, in terms of the provisions of Section 203 of the Companies Act,
2013, Mr. Kazim Raza Khan, Chief Executive Officer, Mr. Naveen Kumar Agrawal, Chief
Financial Officer and Mr. Rajib Kumar Routray, Company Secretary are the Key Managerial
Personnel of the Company.
(XI) DIRECTORS RESPONSIBILITY STATEMENT :
In terms of Section 134 (5) of the Companies Act, 2013, the Board of
Directors wish to state that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures.
(b) the directors 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 of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
(d) the directors had prepared the annual accounts on a going concern
basis; however IL&FS and its group companies are currently undergoing resolution
process under the aegis of the NCLAT and NCLT which may impact the going concern status of
the Company;
(e) 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; and
(f) 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.
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, the work performed by the Internal
Auditors, Cost Auditors, Statutory and Secretarial Auditors and the reviews performed by
management and the Audit Committee, the Board is of the opinion that the Companys
internal financial controls were adequate and effective during Financial Year 2022-23.
Pursuant to the provision of Section 134(5)(f) of the Companies Act,
2013 read with Secretarial Standards of ICSI, the Directors have devised proper systems to
ensure compliance with the provisions of all applicable secretarial standards and that
such systems are adequate and operating effectively.
(XII) DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO:
(A) CONSERVATION OF ENERGY
| (i) The steps taken or impact on conservation of energy; |
The conservation of energy in all the possible areas is
undertaken by the Company as an important means of achieving cost reduction. Savings in
electricity, fuel and power consumption receive due attention of the management on a
continuous basis. |
| (ii) The steps taken by the Company for utilizing alternate
sources of energy; |
NIL |
| (iii) The capital investment on energy conservation
equipment; |
NIL |
| (B) TECHNOLOGY ABSORPTION |
NIL |
| (i) the efforts made towards technology absorption; |
Timely completion of the projects as well as meeting the
budgetary |
|
requirements are the two critical areas where different
techniques help to a great extent. Many innovative techniques have been developed and put
to effective use in the past and the efforts to develop new techniques continue unabated. |
| (ii) the benefits derived like product improvement, cost
reduction, product development or import substitution; |
NIL |
| (iii) in case of imported technology (imported during the
last three years reckoned from the beginning of the financial year) - |
NIL |
| a) the details of technology imported; |
|
| b) the year of import; |
|
| c) whether the technology been fully absorbed |
|
| d) if not fully absorbed, areas where absorption has not
taken place, and the reasons thereof; |
NA |
| (iv) The expenditure incurred on Research and Development |
Nil |
| (C) FOREIGN EXCHANGE |
|
| Foreign Exchange earned in terms of actual inflows during the
year |
Nil |
| Foreign Exchange Outgo during the year in terms of actual
outflows |
Nil |
(XIII) BOARD AND ITS COMMITTEES :
(a) Board of Directors :
During the year under review, the Board of Directors of the Company met
6 (Six) times through video conference/Other Audio Visual Means on April 22, 2022, May 29,
2022, August 09, 2022, November 08, 2022, January 23, 2023 and on February 14, 2023. All
other details are mentioned in the Corporate Governance Report section of this Report.
(b) Audit Committee :
The Audit Committee of the Board of Directors of the Company comprises
three Members with majority members are Independent. There was no change in the
composition of the Committee during the year under review. The dates of meetings of Audit
Committee held during Financial Year 2022-23, attendance of Members in the Meetings and
other details are mentioned in the Corporate Governance Report section of this Report.
During the year under review, all the recommendations of the Audit
Committee were accepted by the Board of Directors. Further, the Committee comprises
Non-Executive Director and Independent Directors, all of whom have the ability to read and
understand the Financial Statements.
(c) Corporate Social Responsibility Committee :
The Board of Directors of the Company constituted Corporate Social
Responsibility (CSR) Committee on March 18, 2014 and the last re-constitution was on
January 15, 2021. The policy on CSR is available on the website of the Company at http://
www.ilfsengg.com/html/policies/CSR_Policy.pdf.
For details relating to the composition of the CSR Committee and other
details, the Members are requested to refer to the Corporate Governance Report, which
forms part of this Annual Report.
As per Section 135(5) of the Companies Act, 2013 the Company is not
required to spend on CSR due to losses in the preceding three financial years. The details
of CSR policy and other details as per Rule 9 of Companies (Corporate Social
Responsibility) Rules, 2014 are enclosed to this Report.
(d) Other Committees :
The details with respect to composition, number of Meetings and such
other information pertaining to Nomination and Remuneration Committee, Stakeholders
Relationship Committee and other Committees are mentioned in the Corporate Governance
section of this Report.
(XIV) RISK MANAGEMENT:
The Board of Directors in its Meeting held on February 11, 2015
formulated a Risk Management Policy consisting of various elements of risk and mitigation
measures.
The Board of Directors of the Company is responsible for overseeing the
implementation of the Policy. In the opinion of the Board, the policy on Risk Management
addresses the risks associated with the business including identification of elements of
risk that may threaten the existence of the Company. The Board of Directors/Audit
Committee reviews the risk assessment and mitigation procedures across the entity from
time to time. The critical enterprise level risks of the Company and the mitigation
measures being taken are provided in the Management Discussion and Analysis Report
(XV) SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATES :
No new subsidiaries, joint ventures or associates have been added or
ceased during the year under review. As per Section 129 (3) of the Companies Act, 2013
read with Regulation 34 of the SEBI LODR Regulations, the Consolidated Financial
Statements of the Company forms part of Annual Report. The copies of Audited Financial
Statements of the Subsidiaries except for Maytas Infra Saudi Arabia Company, a foreign
Joint Venture Subsidiary are available on the website of the Company at www.ilfsengg.com
and a copy of the same will be provided upon written request to the Company Secretary.
SUBSIDIARY ENTITIES:
Following are the wholly Subsidiaries of your Company:
1. Angeerasa Greenfields Private Limited
2. Ekadanta Greenfields Private Limited
3. Saptaswara Agro-farms Private Limited
4. Maytas Infra Assets Limited
5. Maytas Metro Limited
6. Maytas Vasishta Varadhi Limited; and
7. Maytas Infra Saudi Arabia Company (Foreign Subsidiary)
INVESTING PARTY IN RESPECT OF WHICH THE REPORTING ENTERPRISE IS AN
ASSOCIATE
1. SBG Projects Investments Limited
Joint Ventures (Association of Persons):
1. NCC - Maytas (JV)
2. NEC - NCC - Maytas (JV)
3. Maytas - NCC (JV)
4. NCC - Maytas (JV) (Singapore Class Township)
5. Maytas - CTR (JV)
6. NCC - Maytas - ZVS (JV)
7. ITNL - IECCL JV
The Company has the following joint ventures, which are in the nature
of joint operations:
1. Maytas KBL (JV)
2. Maytas KCCPL Flow more (JV)
3. Maytas MEIL KBL (JV)
4. Maytas MEIL ABB AAG (JV)
5. MEIL Maytas ABB AAG (JV)
6. MEIL Maytas KBL (JV)
7. MEIL Maytas WIPL (JV)
8. MEIL Maytas AAG (JV)
9. MEIL - SEW - Maytas - BHEL (JV)
10. L&T KBL Maytas (JV)
11. Maytas - Rithwik (JV)
12. Maytas Sushee (JV)
13. Maytas Gayatri (JV)
14. IL&FS Engg - Kalindee (JV)
15. AMR-Maytas-KBL-WEG (JV)
16. ITDC-Maytas (JV)
17. IL&FS Engg.-GPT (JV)
18. ITNL IECCL (JV)
Further, none of the entities have been associated/disassociated as
Joint Ventures of your Company during the year under review.
The performance and financial position of the Subsidiaries, Joint
Venture and Associate Companies are enclosed as Annexure 2 to this Report.
Hill County Properties Limited (HCPL) continues to be the associate of
your Company.
(XVI) HOLDING COMPANY :
Your Company continues to remain the subsidiary of M/s. Infrastructure
Leasing & Financial Services Ltd by virtue of control over the composition of Board of
Directors of the Company in terms of the provisions of Section 2 (87) of the Companies
Act, 2013.
(XVII) AUDITORS AND AUDITORS REPORT :
Statutory Auditors:
M. Bhaskara Rao & Co., Chartered Accountants, (Firm Registration
Number 000459S) Statutory Auditor has carried out on the statutory audit of the financial
statements of the Company for the financial year 2022-23. Your Board has approved the
financial statements and noted the following statements under Emphasis Matter in the
Auditors Report on the Standalone and qualified opinion in Consolidated Financial
Statements for the Year ended March 31, 2023:
Standalone Financial Statement
a) Note 31 (v) regarding ongoing investigations by Serious Fraud
Investigation Office of Ministry of Company Affairs (SFIO), Enforcement Directorate (ED)
and other regulators/agencies against Infrastructure Leasing & Financial Services
Limited (IL&FS) and some of its subsidiaries (including the Company). The Standalone
Financial Statements of the Company for the year ended on March 31, 2023 do not include
adjustments, if any, that may arise on account of the ongoing investigations by the
investigating and other agencies and Regulatory Authorities.
b. Note 51 regarding non-receipt of confirmation of balances as at
March 31, 2023 from some lenders, customers and vendors. In the absence of confirmations,
the adjustments, if any, on account of unsettled transactions, to the carrying values of
assets and liabilities cannot be ascertained.
c. Note 52 relating to non-recognition of interest expense on
borrowings availed by the Company, pursuant to the Interim Order and the Judgement passed
by NCLAT specifying October 15, 2018 as the cut-off date for initiation of the resolution
process, of Rs.437.41 Crores (excluding penal/other interest and charges) for the year
ended March 31, 2023. The aggregate amount of interest expense not so recognized as at
March 31, 2023, is Rs. 1722.21 Crores approximately.
Consolidated Financial Statements
The Statutory Auditors have formed a qualified opinion on the
Consolidated Financial Statement of the Company for the year ended 31st March, 2023 with
regard to the non-consolidation of overseas subsidiary.
Non-consolidation of financial statements and other financial
information of an overseas subsidiary "Maytas Infra Saudi Arabia Company and the
reasons for the same have been duly mentioned in the notes as per Clause 3(a)(vii) and
32(b)(i). The Auditors are unable to comment on the impact of the same on the Consolidated
Financial Statements for the year, carrying values of assets/ liabilities and retained
earnings of the Group, had the subsidiarys Financial Statements and other financial
information been consolidated.
Explanation to the Qualifications
Your Board has duly noted the qualification as the continued one,
reported by the Statutory Auditors in Financial Year 2022-23. Internal Financial
Controls :
The Company has institutionalized internal control in the form of
standard operating procedures with an objective of orderly and efficient conduct of its
business, safeguarding the Companys assets, prevention and detection of frauds, accuracy
and completeness of accounting records, and compliance with applicable statutory
requirements. The Company is having Oracle e-Business Suite as Enterprise Resource
Planning (ERP) System for recording transactions in an integrated way with a complete
audit trail.
The Company has also engaged a firm of Chartered Accountants for
Internal Audit purposes. The reports of the Internal Auditor covering various business
areas, processes, and functions are reviewed by the Audit Committee in every quarter. As a
practice, the Audit Committee is attended by the senior person(s) representing the Auditee
for answering the queries, and clarifications of Members of the Committee.
Secretarial Audit Report
In terms of the provisions of Section 204 of the Companies Act, 2013,
the Board of Directors had appointed M/s. RPR & Associates, Company Secretaries,
Hyderabad to conduct the Secretarial Audit for Financial Year 2022-23. The Secretarial
Audit Report for the Financial Year Ended March 31, 2023 is enclosed as Annexure 3 to
this report.
(XVIII) CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
It is the endeavor of the Company to enter its contracts/arrangements/
transactions with the related parties in the ordinary course of business and on an arms
length basis. In terms of the provisions of Section 188 of the Companies Act, 2013 read
with Rules made thereunder, all transactions with Related Parties were in the ordinary
course of business and on arms length basis. All contracts/arrangements/transactions
entered by the Company are pre-existing legacy contracts / were in compliance with the
applicable provisions of the Companies Act, 2013 and Listing Regulations.
The Related Party Transactions(RPT) of the Company are entered into as
per the Companys RPT Policy. The Policy is consistent with the latest changes brought
about by SEBI. All Related Party Transactions are pre-approved by the Audit Committee
irrespective of their nature and dynamics of transactions. The Related Party Transaction
Policy is available on the website of the Company at www. ilfsengg.com
(XIX) EMPLOYEES STOCK OPTION SCHEME :
The Company has not issued any Employee Stock Option Scheme and thus
disclosures required as per Section 62(1)(b) read with Rule 12(9) of The Companies(Share
Capital and Debenture) Rules, 2014 are not given. Further, no benefits to employees have
been provided as envisaged and required to be disclosed as per SEBI(Share Based Employee
Benefits) Regulations, 2014. The disclosures as per Proviso to Section 67(3) read with
Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 are not applicable.
(XX) MANAGEMENT DISCUSSION AND ANALYSIS :
A separate section titled "Management Discussion and
Analysis" consisting of details as required under Regulation 34(3) and 53(f) read
with Schedule V of the SEBI LODR Regulations form part of this Annual Report.
(XXI) CORPORATE GOVERNANCE :
A separate section titled "Report on Corporate Governance"
including a certificate from the Practicing Company Secretary confirming compliance with
the conditions of Corporate Governance is enclosed to the Report on Corporate Governance
and forms part of this Annual Report. Further, a declaration signed by the Chief Executive
Officer affiirming the compliance with the Code of Conduct for the Board of Directors and
Senior Management Personnel is also enclosed to the Report on Corporate Governance.
(XXII) DISCLOSURES :
(a) Extract of Annual Return :
The extract of the Annual Return as per Section 92(3) of the Companies
Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is
enclosed as Annexure 4 to this Report
(b) Vigil Mechanism :
In terms of the provisions of Section 177 of the Companies Act, 2013
and Listing Regulations, the Company has established a Vigil Mechanism through its Whistle
Blower Policy for directors and employees to report concerns about unethical behavior,
actual/suspected frauds and violation of Companys Code of Conduct. Please refer to the
Corporate Governance section of the Annual Report for further details.
(c) Policy on Prevention of Sexual Harassment:
In terms of the provisions of The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company had formulated
and implemented a policy for the Prevention of Sexual Harassment of Women at the
Workplace. The Company also sensitizes employees through workshops or awareness programs
against sexual harassment in the workplace.
The Company had also constituted an Internal Committee comprising
employees of the Company and an Independent NGO representative. The scope of the Internal
Committee encompasses all incidents/occurrences of sexual harassment which take place at
the workplace and where either of the party (aggrieved / accused) is an employee of the
Company. During the year under review, the Company has not received any complaints under
the policy.
Further, the Company has many systems, processes, and policies to
ensure professional ethics and harmonious working environment. The Company follows Zero
Tolerance approach towards Corruption and unethical conduct. These are ensured through
Whistle Blower Policy, Sexual Harassment Policy and Redressal Guidelines. There are no
Sexual Harassment cases reported during the Financial Year: 2022-23.
(d) Particulars of Loans, Guarantees, or Investments under Section 186
:
Your Company is in the business of providing Infrastructure Facilities.
Accordingly, the provisions of Section 186 pertaining to Loan or Guarantee to other
corporates are exempted.
(e) Particulars of employees and related disclosures :
The disclosures relating the ratio of remuneration of each director to
the median employees remuneration and other details as per Section 197 (12) of the
Companies Act, 2013 read with Rule 5(1), (2), and (3) of the Companies (Appointment and
remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure 5 to this
Report.
Having regard to the provisions of the second proviso to Section 136(1)
read with Section 197(12) of the Act and as prevalent, the Annual Report excluding the
names of top ten employees in terms of remuneration drawn and names and other particulars
of the employees drawing remuneration in excess of the limits set out is open for
inspection at the Registered Office of your Company. Any member interested in obtaining
copy of the same may write to Company Secretary.
(f) Material changes and comments, if any, affecting the financial
position of the Company :
Due to the latest developments in the IL&FS Group and the Company,
the existing debt is not commensurate with the size of its operations and there has been
severe stress in terms of cash flows.
(g) Reporting of Fraud :
No instances of fraud have come to the notice of Board and found and/or
reported by the Auditors in their Report for the Financial Year 2022-23.
(h) Investigations etc. by Regulatory/Investigating Agencies:
Subsequent to adverse developments at the group level of Infrastructure
Leasing and Financial Services Limited ("IL&FS"), in the interest of
repetition, it is disclosed that the information required by Investigating Authorities are
being supplied and necessary cooperation is being extended as and when required by the
management.
Further, as per the directions of the reconstituted Board of IL&FS,
forensic audit also was initiated for select entities including this Company. The forensic
auditors had submitted their final reports during May 2021 detailing certain potential
anomalies in the financial statements and operations of the Company.
(i) Details of significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status of the Company :
The National Company Law Appellate Tribunal ("NCLAT") by way
of its order on October 15, 2018 ("Interim Order") in the Company Appeal (AT)
346 of 2018, after taking into consideration the nature of the case, larger public
interest and economy of the nation and interest of IL&FS and its group companies
(including your Company) has stayed certain coercive and precipitated actions against
IL&FS and its group companies including your Company.
IL&FS and its group companies are currently undergoing a resolution
process under the aegis of NCLAT and NCLT. No new significant and material orders have
been passed by Regulators or Courts or Tribunals impacting the going concern status of the
Company.
While IL&FS is in the process of divestment of its equity stake
through the Swiss Challenge Method in a transparent manner, the nominated Board of
Directors of Union of India in IL&FS and its group Companies(including your Company)
have taken steps for the completion of ongoing projects and provision of necessary
services during Defect Liability Period in the face of various challenges, as per the
terms of contractual obligations with Companys valued Project Owners.
Details in respect of adequacy of internal financial controls :
The details of internal financial controls and their adequacy is given
in Management Discussion and Analysis Report.
(j) Business Responsibility Report :
The requirement of Business Responsibility Reporting is not applicable
to your Company.
(k) Performance evaluation of the Board, Committees, and Directors
The purpose and intent of Board evaluation is in essence linked to the
extension or continuation of the term of the Directors appointed by the Members of the
Company, based on the process of evaluation carried out by the Independent Directors and
the Board. You are aware that on October 1, 2018, the Union of India ("UOI")
(acting through the Ministry of Corporate Affairs), filed a petition with Honble NCLT
seeking immediate suspension of the Board of Directors of IL&FS and appointment of a
new Board of Directors, amongst others, on the grounds of mismanagement and compromise in
corporate governance norms and risk management by the erstwhile Board of IL&FS and
that the affairs of the Company were being conducted in a manner prejudicial to the public
interest. Pursuant to the above developments, the New Board of IL&FS also initiated
reconstitution of the Board of Directors of the Group companies including your Company and
nominated 3 Directors on the Board of your Company.
The New Board members appointed by the NCLT are akin to Independent
Directors and not Independent Directors. Further, the requirement of appointing
Independent Directors and Woman Director has been dispensed with, by the Honble NCLT
order dated April 26, 2019 for IL&FS and its group companies.
In view thereof, as per Section 134(3)(p) of the Companies Act, 2013
read with Rule8(4) of the Companies(Accounts) Rules and SEBI LODR Regulations, the
evaluation of Non-executive Directors, forming the majority of Board of Directors of the
Company has been duly carried out by Independent Directors. The evaluation of entire Board
has not been carried out due to the reasons mentioned as aforesaid, though the Independent
Directors have reviewed the performance of other Board Members as per Clause VII of
Schedule IV to Section 149(8) of The Companies Act, 2013 read with Regulation 25(3) of
SEBI LODR Regulations, 2015.
(XXlll) ACKNOWLEDGMENTS:
Your Directors place on record their gratitude to the Bankers, Media,
Financial Institutions, various agencies of the State and the Central Government
Authorities, Clients, Consultants, Suppliers, Sub-Contractors, Members, and Employees for
their valuable support and cooperation and look forward to continued enriched
relationships in the years to come.
|
By order of the Board of Directors |
|
|
For IL&FS Engineering and
Construction Company Ltd |
|
|
Nand Kishore |
Manish Kumar Agarwal |
| Place: New Delhi |
Non-Executive Director |
Non-Executive Director |
| Date: 25th May 2023 |
DIN:08267502 |
DIN: 02885603 |
+91-9892691696
