Directors Report
Your Directors are pleased to present the Twenty Ninth Annual Report and the audited
accounts of Punj Lloyd Limited ("the Company") for the financial year ended
March 31, 2017.
Financial Highlights
The financial performance of the Company, for the year ended March 31, 2017 is
summarized below:
| Particulars |
2016-17 |
2015-16 |
| Total revenue |
4,059.75 |
3,527.71 |
| Earnings Before Interest (Finance Costs), Tax, Depreciation and Amortisation (EBITDA) |
107.63 |
(369.66) |
| Less: Finance costs |
881.66 |
897.73 |
| Profit/ (Loss) before tax, depreciation and amortisation |
(774.03) |
(1,267.39) |
| Less: Depreciation and amortisation expenses |
125.13 |
227.90 |
| Profit/ (Loss) before tax (PBT) |
(899.16) |
(1,495.29) |
| Less: Tax expenses [net of deferred tax effect and minimum alternate tax credit
entitlement/ written off (net)] |
(48.58) |
18.42 |
| Profit/ (Loss) after taxation (PAT) |
(850.58) |
(1,513.71) |
| Other Comprehensive Income |
(936.91) |
(214.35) |
| Total Comprehensive Income |
(1,787.49) |
(1,728.06) |
Dividend
To conserve the cash resources, your Directors have not recommended any dividend on the
equity shares for the financial year ended March 31, 2017.
Operations Review
Your Company is focussed on improving operational efficiencies and these efforts have
started to reap in the benefits. During the current year, the Company clocked an
operational profit of 108 crore compared to loss of 370 crore reported in previous
year and the revenues also grew by 12% to 3,761 crore and this trend is expected to
continue and gradually accelerate in years to come.
Given the backdrops in the construction and infrastructure industry, per se, globally
and in India, the Company is working on adapting to the changing market dynamics. While it
is focusing on taking up projects across a wider spectrum of sectors; developing its
capabilities and creating a richer portfolio of projects; it is also focusing on
leveraging the growing market opportunities in India while preserving its strong global
client relationships.
Further, to realign its strategic path with the financial imperatives of increasing
cash flows and reducing its debt exposure, it is cohesively working with the lenders to
carve out another round of financial restructuring that will provide the necessary
breathing space to the Company to chart out its business turnaround.
On business development, given the Companys liquidity position, your Company
approached in a calibrated manner. Activities were more geared towards exploring new
market opportunities rather than aggressively participating in tenders and getting orders.
The Company has an order book of 18,561 crore as of May 2017. This includes orders of
6,845 crore in Libya which, unfortunately, are not seeing any traction. The order book
position is not comparable to FY2016 as its Singapore subsidiaries are not included in
FY2017.
Lastly, though the company saw some developments on claim realisation, but the recovery
process thereof continues to be mired in litigation and it is still awaiting large monies
from India and abroad.
Business Review
The Management Discussion and Analysis Section of the Annual Report presents a detailed
business review of the Company.
Health, Safety and Environment (HSE)
Early in its working, your Company realised that to be a preferred EPC contractor,
standards of health, safety and environment had to be high and non-negotiable. This later
became one of the differentiators between the Company and its competition. A detailed note
on the HSE practices and initiatives by the Company is included in Management Discussion
and Analysis Section of the Annual Report.
Directors and Key Managerial Personnel
Mr. Atul Kumar Jain and Ms. Jyoti Punj were appointed as Additional Directors by the
Board of Directors of the Company with effect from August 10, 2016 and August 18, 2016
respectively to hold office up to the ensuing Annual General Meeting ("the
AGM"). Appropriate resolution seeking your approval for appointment of Mr. Atul Kumar
Jain and Ms. Jyoti Punj as Directors of the Company, liable to retire by rotation, forms
part of the notice convening the ensuing AGM of the Company.
Mr. Atul Kumar Jain was also appointed as Whole Time Director by the Board of Directors
of the Company for a period of five years with effect from August 10, 2016. Appropriate
resolution seeking your approval for the appointment and payment of remuneration to him
forms part of the notice convening the AGM.
In terms of Section 149(7) of the Companies Act, 2013 ("the Act"), Mr. Phiroz
A. Vandrevala, Mr. Uday Walia, Mr. Rajat Khare and Mr. Shravan Sampath, Independent
Directors of the Company have given declarations to the Company to the effect that they
meet the criteria of independence as provided in Section 149(6) of the Act.
Mr. Shiv Punj retires by rotation and being eligible has offered himself for
re-appointment at the AGM. The Board of Directors recommend his re-appointment.
Brief resume of the Directors seeking appointment/re-appointment at the AGM, as
required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015
("SEBI Regulations") and the Act, forms part of the notice convening the AGM.
Meetings of the Board
During the year, the Board of Directors of the Company met 4 times on May 27, 2016;
August 10, 2016; November 30, 2016 and February 11, 2017.
Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Other
Employees
The Nomination and Remuneration Committee in its meeting held on May 20, 2014 had
recommended to the Board of Directors a Policy on Directors Appointment and Remuneration,
including criteria for determining qualifications, positive attributes, independence of a
director and relating to remuneration for the Directors, Key Managerial Personnel and
Other Employees in terms of sub-section (3) of section 178 of the Act. The Board of
Directors in its meeting held on May 20, 2014 have approved and adopted the same. The said
policy is enclosed as Annexure - I to this Report.
Formal Annual Performance Evaluation of the Board and that of its Committees and
Individual Directors
Pursuant to the Guidance Note on Board Evaluation issued by SEBI vide Circular dated
January 5, 2017, the Remuneration Committee has reviewed and revised the Criteria for
Performance Evaluation of the Board, Individual Directors (including Independent
Directors) and Committees of the Board.
In line with the above revised criteria, the Independent Directors at their separate
meeting held on May 27, 2017 without participation of the Non-Independent Directors and
Management, have considered and evaluated the Boards performance and the performance of
the Chairman and Managing Director and Non-Independent Directors. The Independent
Directors in the said meeting have also assessed the quality, quantity and timeliness of
flow of information between the Company Management and the Board.
The Board of Directors in their meeting held on May 27, 2017 have evaluated the
performance of each of the Independent Directors (without the participation of the
Director being evaluated) and also of the Committees of the Board.
The revised criteria for performance evaluation have been detailed in the Corporate
Governance Report which is attached as Annexure -II to this Report.
Directors Responsibility Statement
Pursuant to the requirements of Sub-Sections (3)(c) and (5) of Section 134 of the Act,
it is hereby confirmed:
1. that in the preparation of the annual accounts, the applicable accounting standards
have been followed along with proper explanation relating to material departures;
2. that the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the Company for the year under review;
3. that the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
4. that the Directors have prepared the annual accounts of the Company on a ‘going
concern basis.
5. that the Directors had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively.
6. that the Directors had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
Audit Committee
The Audit Committee comprises of Mr. Phiroz Vandrevala, Independent Director as
Chairman, Mr. Rajat Khare, Mr. Shravan Sampath and Mr. Atul Punj as Members.
The Board of Directors have accepted all the recommendations of the Audit Committee.
Vigil Mechanism
The Company has in place a vigil mechanism in the form of Whistle Blower Policy. It
aims at providing avenues for employees to raise complaints and to receive feedback on any
action taken and seeks to reassure the employees that they will be protected against
victimization and for any whistle blowing conducted by them in good faith. The policy is
intended to encourage and enable the employees of the Company to raise serious concerns
within the organization rather than overlooking a problem or handling it externally. The
Company is committed to the highest possible standard of openness, probity and
accountability. It contains safeguards to protect any person who uses the Vigil Mechanism
(whistle blower) by raising any concern in good faith. The Company does not tolerate any
form of victimization and takes appropriate steps to protect a whistleblower that raises a
concern in good faith and treats any retaliation as a serious disciplinary offence that
merits disciplinary action. The Company protects the identity of the whistle blower if the
whistle blower so desires, however the whistle blower needs to attend any disciplinary
hearing or proceedings as may be required
for investigation of the complaint. The mechanism provides for a detailed complaint and
investigation process. If circumstances so require, the employee can make a complaint
directly to the Chairman of the Audit Committee. The Company also provides a platform to
its employees for having direct access to the Chairman and Managing Director of the
Company for raising any concerns. It is through ATP Connect (atpconnect@punjlloyd.com ).
Mr. Dinesh Thairani, Company Secretary is the Compliance Officer. The confidentiality
of those reporting violations is maintained and they are not subjected to any
discriminatory practice.
Share Capital
During the financial year 2016-17, the Company issued and allotted 21,30,000 Equity
Shares of 2/- each fully paid up for cash at par on the exercise of vested stock options
under Employee Stock Option Plan 2005 (ESOP 2005) and Employee Stock Option Plan 2006
(ESOP 2006). Consequently, the issued, subscribed and paid-up Equity Share Capital of the
Company has increased from 66,41,91,490/- divided into 33,20,95,745 equity shares of
2/- each as at March 31, 2016 to 66,84,51,490/- divided into 33,42,25,745 equity shares
of 2/- each as at March 31,2017. Further 10,20,000 Equity Shares of 2/- each fully paid
up for cash at par were issued and allotted on April 26, 2017 on the exercise of vested
stock options under ESOP 2005 and ESOP 2006 and consequently, the issued, subscribed and
paid-up Equity Share Capital of the Company has increased to 67,04,91,490/- divided into
33,52,45,745 Equity Shares of 2/- each fully paid up.
Employee Stock Option Scheme
The Company has 2 (two) Employee Stock Option Scheme at present:
• Employee Stock Option Plan 2005 (ESOP 2005); and
• Employee Stock Option Plan 2006 (ESOP 2006)
ESOP 2005 and ESOP 2006 are in compliance with the Securities and Exchange Board of
India (Share Based Employee Benefits) Regulations, 2014 (the Regulation).
The details as required to be disclosed under the Regulation with regard to the ESOP
2005 and ESOP 2006 of the Company as at March 31,2017 are disclosed on the website of the
Company at the web link: http://punjlloydgroup.com/investors .
The Company has never provided any loan to its employees to purchase the shares of the
Company.
The Company has not issued any shares with differential voting rights.
The Company has not issued any sweat equity shares.
Corporate Governance
As stipulated under SEBI Regulations, the Report on Corporate Governance and the
requisite Certificate from the Auditors of the
Company confirming compliance with the conditions of Corporate Governance as stipulated
under the aforesaid regulation is attached as Annexure - II to this Report and forms part
of the Annual Report.
Corporate Social Responsibility (CSR) initiatives
The Company has formed a CSR Committee comprising of Mr. Atul Punj as Chairman, Mr.
Shiv Punj and Mr. Uday Walia as members.
The said Committee has developed a Policy on CSR, which has been approved by the Board
of Directors in its meeting held on May 20, 2014.
In terms of the provisions of Section 135 of the Act read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014, the Company was not required to make any
expenditure on CSR activities during the Financial Year 2016-17. The CSR Report is
attached as Annexure - III.
Management Discussion and Analysis
As stipulated under SEBI Regulations, Management Discussion and Analysis Report, for
the year under review, is presented in a separate section forming part of the Annual
Report.
Auditors and Auditors Report
M/s BGJC & Associates LLP, (formerly BGJC & Associates), Chartered Accountants,
New Delhi (Registration No. 003304N / AAI -1738) had been appointed as Statutory Auditors
of the Company from the conclusion of the 28th AGM of the Company held on
August 10, 2016 untill the conclusion of the sixth consecutive AGM of the Company subject
to ratification of their appointment at each AGM.
The Company has received a letter from the Statutory Auditors to the effects that their
appointment, if ratified, would be within the limit prescribed under Section 139 of the
Act and that they are not disqualified for appointment.
The observations of the Auditors have been fully explained in Note 32 to the Financial
Statements.
Secretarial Auditors and Secretarial Audit Report
M/s. Suresh Gupta & Associates, Company Secretaries, Delhi have been appointed as
Secretarial Auditors of the Company to conduct the Secretarial Audit of the Company for
the financial year 2016-17 and their Secretarial Audit Report is annexed as Annexure - IV
to this Report.
Cost Auditors
The Board has appointed M/s. Amit Singhal & Associates, Cost Accountants, Delhi,
(Firm Regn. No. 101073) as Cost Auditors of the Company to conduct the audit of cost
records of the Company for the Financial Year 2016-17.
Fixed Deposits
The Company has not accepted any fixed deposits from public,
shareholders or employees during the year under review.
Particulars of Employees
The details as required in terms of the provisions of Section 197 of the Act read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 are attached as Annexure - V to this Report.
The details of employees as required in terms of the provisions of Section 197 of the
Act read with Rule 5 (2) & (3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are attached as Annexure - VI to this Report.
The Company has in place an Anti Sexual Harassment Policy in line with the requirements
of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)
Act, 2013. Internal Complaints Committee has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, temporary and
trainees) are covered under this policy. During the year 2016-17, no complaints were
received.
Consumption of Energy and Foreign Exchange Earnings and Outgo
The details as required under Section 134(3)(m) of the Act read with Rule 8(3) of
Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption
and foreign exchange earnings and outgo are attached as Annexure - VII to this Report.
Loans, Guarantees and Investment
In accordance with Section 134(3)(g) of the Act, the particulars of loans, guarantees
and investments under Section 186 of the Act are given in the Note 38(a) of standalone
Financial Statements read with respective heads to the Financial Statements.
Related Party Transactions
In accordance with Section 134(3)(h) of the Act read with Rule 8(2) of Companies
(Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties,
referred to in Section 188(1) of the Act, in the prescribed Form AOC 2 are attached as
Annexure -VIII to this Report.
Risk Management Policy
The company has formulated and implemented a Risk Management policy. The details of
elements of risk are provided in the Management Discussion and Analysis section of the
Annual Report.
Internal Financial Controls
The Company has designed and implemented a process driven framework for Internal
Financial Controls as detailed in the Act. These controls have been established at the
entity and process levels to comply with internal control requirements.
A detailed note on internal controls is included in the Management
Discussion and Analysis Section of the Annual Report.
Extracts of Annual Return
In terms of Section 134(3)(a) of the Act read with Rule 12(1) of Companies (Management
& Administration) Rules, 2014, the extracts of Annual Return of the Company in Form
MGT 9 is attached as Annexure - IX to this Report.
Significant and Material Orders
No significant and material orders have been passed by any regulators or courts or
tribunals impacting the going concern status and companys operations in future.
Consolidated Financial Statements
In accordance with Section 129 of the Act, Consolidated Financial Statements are
attached and form part of the Annual Report and the same shall be laid before the ensuing
AGM along with the Financial Statements of the Company.
Subsidiaries, Joint Ventures & Associate Companies
As required under the first proviso to sub-section (3) of Section 129 of the Act, a
separate statement containing the salient features of the financial statements of the
subsidiaries, associates and joint venture companies in Form AOC 1 is annexed to the
Financial Statements and forms part of the Annual Report, which covers the performance and
financial position of the subsidiaries, associates and joint venture companies.
The annual accounts of the subsidiary companies are available on the Companys website
viz. www.punjlloyd.com and will also be available for inspection by any member or trustee
of the holder of any debentures of the Company at the Registered Office and the Corporate
Office. A copy of the above accounts shall be made available to any member on request.
Acknowledgement
Your Directors would like to place on record their appreciation for the committed
services put in by the employees of the Company. Your Directors would also like to convey
their sincere gratitude to the shareholders, debenture holders, bankers, financial
institutions, regulatory bodies, clients and other business constituents for their
continued co-operation and support.
For and on behalf of the Board of Directors
Atul Punj
Chairman and Managing Director DIN:00005612
Place: Gurugram Date: May 27, 2017
+91-9892691696
