TO THE MEMBERS
Your Directors take pleasure in presenting the 25th Annual Report on the business andoperations of your Company along with the standalone and consolidated financial statementsfor the financial year ended on March 31 2020.
Your Company's financial performance for the year under review is summarized below: Rs.) ( in Lakhs
| || |
|Particulars ||Year ended March 31 2020 ||Year ended March 31 2019 ||Year ended March 31 2020 ||Year ended March 31 2019 |
|Revenue from operations ||1077.30 ||1334.34 ||2994.22 ||3494.36 |
|Other income ||406.16 ||569.68 ||202.48 ||381.60 |
|Total income ||1483.46 ||1904.02 ||3196.70 ||3875.96 |
|Total expenses other than depreciation and finance cost ||1262.69 ||2332.01 ||1755.24 ||1953.61 |
|Profit / (Loss) before depreciation finance cost and exceptional items ||220.77 ||(427.99) ||1441.46 ||1922.35 |
|Depreciation and amortization expenses ||274.70 ||281.02 ||1045.51 ||1115.82 |
|Profit / (Loss) before finance cost exceptional items and tax ||(53.93) ||(709.01) ||395.94 ||806.53 |
|Finance cost ||220.49 ||281.41 ||1831.97 ||1973.57 |
|Profit / (Loss) before exceptional items and tax ||(274.41) ||(990.42) ||(1436.03) ||(1167.04) |
|Exceptional items || || || || |
|Profit / (Loss) before tax for the year ||(274.41) ||(990.42) ||(1436.03) ||(1167.04) |
|Tax expenses ||26.16 ||(206.06) ||(988.74) ||(461.41) |
|Profit / (Loss) a er tax for the year ||(300.57) ||(784.36) ||(447.29) ||(705.63) |
|Share of minority interest in the losses of subsidiary companies || || ||143.72 ||148.32 |
|Other comprehensive income net of tax ||(4.43) ||4.99 ||(5.52) ||2.19 |
|Total comprehensive income ||(305.00) ||(779.37) ||(309.09) ||(555.12) |
|Earnings per equity share of Rs. 10 each (Basic & Diluted) ||(0.63) ||(1.65) ||(0.94) ||(1.17) |
The paid-up equity share capital as at March 31 2020 stood at Rs. 47.50 Crore. Duringthe financial year under review there has been no change in the capital structure of theCompany.
The Company did not transfer any amount to reserves during the year.
Your Directors recommend payment of dividend @ 5% on the paid-up share capital of theCompany i.e. Rs. 0.50/- per equity share of Rs.10/- each.
STATE OF COMPANY'S AFFAIRS
The Company is primarily engaged in power generation infrastructure development suchas construction of bridges hydro projects including operation and maintenance thereofsupply of materials etc. Financial position of the Company is given in the previousparagraphs. A detailed information on the operation of di erent business segments of theCompany future expectations and business environment is provided in the ManagementDiscussion and Analysis Report.
A GLOBAL CRISIS: COVID-19
In the last month of financial year 2019-20 the Covid-19 pandemic developed rapidlyinto a global crisis forcing governments to resort to lock-down of all economic activityetc. The Company has been monitoring the situation closely and has taken proactivemeasures to comply with various directions / regulations / guidelines issued by theGovernment and local bodies to ensure safety of workforce across all its plants and o ces.Despite challenges of lock-down our team worked tirelessly at its power plants to keep upthe generation and meet the demand of the nation. The impact of this pandemic on theCompany continues to be dependent on future developments and therefore the Companycontinues to closely monitor any material changes arising out of uncertain future economicconditions and potential impact on its business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereina er referred to as the "LODR Regulations") is annexed herewith andmarked as Annexure "A".
As required under the LODR Regulations the Report on Corporate Governance Declarationof Whole-time Director on Code of Conduct CEO / CFO Certification and AuditorsCertificate on compliance of conditions of Corporate Governance are annexed herewith andmarked as Annexure "B" "C" "D" and"E" respectively.
SUBSIDIARIES AND ASSOCIATES
As on March 31 2020 the Company has 5 subsidiaries and 1 associate. There has been nomaterial change in the nature of business of the subsidiaries.
The Company has also formulated a Policy for Determining Material' Subsidiariesin line with the requirement of the LODR Regulations. The said Policy may be accessed at hp://www.edclgroup.com/pdf/Policy-for-Determining-Material-Subsidiary.pdf.
Pursuant to provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the Company's subsidiaries andassociate in Form AOC-1 is annexed herewith and marked as
Brief details of the subsidiaries are given below:
i) Ayyappa Hydro Power Limited (Wholly-owned & material non-listedsubsidiary)
The Company is operating the 15 MW Karikkayam Hydro Electric Project in the State ofKerala. During the year under review total income of the Company stood at Rs. 1483.83Lakhs as compared to Rs. 1893.35 Lakhs in previous year.
ii) EDCL Power Projects Limited (Wholly-owned & material non-listedsubsidiary)
The Company is operating the 7 MW Ullunkal Hydro Electric Project in the State ofKerala. During the year under review total income of the Company stood at Rs.433.09 Lakhsas compared to Rs. 266.68 Lakhs in previous year.
Entire generation from the units of above mentioned subsidiaries was sold to the KeralaState Electricity Board (KSEB) under Long term Power Purchase Agreements (PPA).
Mr. Rohit Pandit (DIN: 03409093) an Independent Director of the Company is on theBoard of Directors of above mentioned subsidiaries.
iii) EDCL Arunachal Hydro Project Private Limited (Wholly-ownedsubsidiary)
The Company is yet to take up any project.
iv) Eastern Ramganga Valley Hydel Projects Company Private Limited
The Company is executing 6.5 MW Burthing Small Hydro Electric Project and 5.0 MWPhuliabagar Small Hydro Electric Project in the State of U arakhand. DPR for both projectshave been approved. Statutory clearances required for implementation of both theseprojects have been availed.
v) Sarju Valley Hydel Projects Company Private Limited
The Company is executing 5.5 MW Balighat Small Hydro Electric Project in the State of Uarakhand. DPR for the project has been approved.
The Company has an associate namely Arunachal Hydro Power Limited which is developingand executing various hydro power projects through its several subsidiaries in the Stateof Arunachal Pradesh.
CONSLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance with theCompanies (Indian Accounting Standards) Rules 2015 (Ind AS) as required under Section 133of the Companies Act 2013 and other recognized accounting practices and policies to theextent applicable form part of Annual Report.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited accounts in respect of subsidiaries are available on the website ofthe Company.
BOARD OF DIRECTORS AND BOARD MEETINGS
Board and Commi ees
As on March 31 2020 the Board of Directors comprised of 5 Directors including 4Non-Executive Directors having experience in varied fields and a Whole-time ExecutiveDirector. Out of 4 Non-Executive Directors 2 were Independent Directors. Detailedinformation on Directors is provided in the Report on Corporate Governance.
At present there are following 3 Commi ees: i) Audit Commi ee ii) Nomination andRemuneration Commi ee iii) Stakeholders Relationship Commi ee
The Board has accepted all the recommendations of the Audit Commi ee. The details ofcomposition terms of reference meetings etc. of the Commi ees are given in the Report onCorporate Governance.
Number of Board meetings
The Board met 4 times during the financial year under review. Detailed information onBoard meetings are provided in the Report on Corporate Governance.
Mr. Amar Singh (DIN: 00165567) Chairman and Non-Executive Director of the Companypassed away on August 01 2020 a er prolonged illness. The entire Company and itsstakeholders are deeply regre ed over the loss of its great human asset.
Mr. Gouri Prasad Goenka (DIN: 00030302) Independent Director considering his ageresigned from the Board of Directors of the Company with e ect from June 11 2019.
Mr. V oy Kumar (DIN: 02970626) Independent Director whose term ended with theconclusion of the 24th Annual General Meeting did not o er his candidature forre-appointment by shareholders in the 24th Annual General Meeting. Consequently he ceasedto be Independent Director on completion of his 1st term on September 30 2019.
Mr. B ay Kumar Garodia (DIN: 00044379) Independent Director whose term ended onNovember 12 2019 did not o er his candidature for re-appointment by shareholders in the24th Annual General Meeting. Consequently he ceased to be Independent Director oncompletion of his 1st term on November 12 2019.
The above mentioned 3 Directors confirmed that there were no other material reasonother than the reasons provided. The Board placed on record its sincere appreciation forthe services rendered by them during their tenure as Directors of the Company.
Mrs. Pankaja Kumari Singh (DIN: 00199454) Director retires by rotation and beingeligible o ered herself for reappointment.
Mr. Aman Jain (DIN: 08187995) and Mr. Vishal Sharma (DIN: 08773037) have beenappointed as Additional Directors (Category: Independent) of the Company with e ect fromJune 30 2020 by the Board of Directors in its meeting held on the same day on therecommendation of Nomination and Remuneration Commi ee and subject to approval of theshareholders in the ensuing Annual General Meeting to hold o ce as Independent Directorsfor a term of upto 5 consecutive years e ective from June 30 2020 to June 29 2025.
In the opinion of the Board Mr. Aman Jain and Mr. Vishal Sharma possess requisitequalifications and experience which would be useful to the Company and would enable themto contribute e ectively to the Company in their capacity.
The brief resume and other details relating to Mrs. Pankaja Kumari Singh Mr. Aman Jainand Mr. Vishal Sharma are provided in the Notice of Annual General Meeting.
Your Board has received requisite consents notices under Section 160 and FormDIR-8' pursuant to Section 164(2) of the Companies Act 2013 read with the Rulesmade thereunder from the aforementioned Directors. Your Board recommends their appointment/ re-appointment.
Nomination and Remuneration Policy
The Nomination and Remuneration Commi ee works with the Board to determine theappropriate characteristics skills and experience for the Board as a whole and itsindividual members with the objective of having a Board with diverse backgrounds andexperience in business governance education and public service. The Company follows theNomination and Remuneration Policy for Directors Key Managerial Personnel and SeniorManagement Personnel of the Company as approved by the Board of Directors and the saidpolicy was amended from time to time. The said Policy may be accessed at hp://www.edclgroup.com/pdf/Nomination-Remuneration-Policy.pdf.
The Board on the recommendation of the Nomination and Remuneration Commi ee appointsDirector of the Company based on his eligibility experience and qualifications and suchappointment is approved by the shareholders of the Company. Generally the Whole-timeDirector (Executive Director) is appointed for a period of three years. IndependentDirectors are appointed for a term of upto five consecutive years. Based on theireligibility for re-appointment the outcome of their performance evaluation and therecommendation by the Nomination and Remuneration Commi ee the Independent Directors maybe re-appointed by the Board for another term of five consecutive years subject toapproval of the shareholders of the Company. The Directors shall retire as per theapplicable provisions of the Companies Act 2013 and the policy of the Company. Whiledetermining remuneration of the Directors Key Managerial Personnel and Senior ManagementPersonnel the Nomination and Remuneration Commi ee ensures that the level and compositionof remuneration is reasonable and su cient to a ract retain and motivate them and ensurethe quality required to run the Company successfully. The relationship of remuneration toperformance is clear and meets appropriate performance benchmarks and such remunerationcomprises a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goals. TheCompany follows a compensation mix of fixed pay benefits allowances perquisitesperformance linked incentives and retirement benefits for its Executive Directors KeyManagerial Personnel and Senior Management Personnel. The Company pays si ing fees toNon-executive Directors for a ending Board and Commi ee meetings.
Declaration by Independent Directors
The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the Companies Act 2013and the LODR Regulations. The Board is also of the opinion that the Independent Directorsfulfill all the conditions specified in the Companies Act 2013 and the LODR Regulationsand are independent of the management.
Familiarisation Programme for Independent Directors
The details of Familiarisation Programme for Independent Directors has been given inthe Report on Corporate Governance.
Pursuant to the provisions of the Companies Act 2013 and as prescribed by the LODRRegulations as amended from time to time the Board of Directors carried out an annualevaluation of its own performance Commi ees and individual Directors of the Company. TheDirectors expressed their satisfaction with the evaluation process.
The Board evaluated its performance a er considering the inputs received from allDirectors based on the criteria such as composition and structure of the Board withdiverse background & experience flexible & e ective board procedures quality oftimely information and e ective functioning of the Board etc.
The Board evaluated performance of its Commi ees a er considering the inputs receivedfrom all Commi ee members based on the criteria involving composition of the Commi ee withmembers having diverse experience skill and e ective functioning of the Commi ee etc.
The Board and the Nomination and Remuneration Commi ee reviewed the performance ofindividual Directors on the basis of the criteria such as professional qualificationsprior experience especially experience relevant to the Company commitment contributionintegrity independence and guidance / support to management etc. Similarly Boardevaluated the performance of the Chairman based on the criteria of e ective leadershipconstructive relationships and communications within the Board addressing of the issuesand concerns raised by the members of the Board etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed 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 withregard to the Directors' Responsibility Statement your Board confirms that:
a) in the preparation of the annual accounts for the financial year ended on March 312020 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of a airs of the Company as at March 31 2020 and of the profit /loss of the Company for that period;
c) the Directors have taken proper and su cient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating e ectively;
f) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating e ectively.
KEY MANAGERIAL PERSONNEL
The following are the Key Managerial Personnel of the Company:
Whole-time Director : Mr. Vinod Kumar Sharma - designated as ExecutiveDirector'.
Chief Financial O cer : Mr. Sunil Du Sharma.
Company Secretary : Ms. V ayshree Binnani.
CORPORATE SOCIAL RESPONSIBILITY
The provisions under Section 135 of the Companies Act 2013 read with the Rules madethereunder are not applicable as the Company is not meeting any criteria specifiedtherein. The Company has not spent any amount under Corporate Social Responsibility duringthe financial year 2019-20. Accordingly Annual Report on Corporate Social Responsibilityactivities is not required to be a ached.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company has adequate internal financial control system commensurate with the sizescale and complexity of its operations. During the year such controls were tested and noreportable material weakness in the design or operation was observed.
The Company has formulated and implemented a Risk Management Policy (Risk ManagementProcedure) in consultation with Senior Management to identify various kinds of risk inbusiness and its process to minimize the same. For details please refer to ManagementDiscussion and Analysis Report.
At present the Company has not identified any element of risk which may threaten theexistence of the Company.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has a Whistle Blower Mechanism and a Policy namely Whistle Blower Policythat lays down the process for raising concern about unethical behavior actual orsuspected fraud or violation of Company's Code of Conduct. The said Policy may be accessedat h p://www.edclgroup.com/pdf/Whistle-Blower-Policy.pdf.
Your Company hereby a rms that no Director / employee have been denied access to theChairman of the Audit Commi ee and that no complaints were received during the year.
LOAN GUARANTEES AND INVESTMENTS
Particulars of loans investments and guarantees have been disclosed in the financialstatements 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 inSection 188 of the Companies Act 2013 read with the Rules made thereunder. AccordinglyAOC2 is not required to be a ached. All other related party transactions enteredinto during the financial year were on arm's length basis and were in the ordinary courseof business and were placed before the Audit Commi ee and Board for their approval asrequired. Prior omnibus approval of the Audit Commi ee was obtained for the transactionswhich are of repetitive nature. The details of transactions with related parties as perInd AS - 24 are disclosed in the notes to accounts. The Company has developed a Policy onRelated Party Transaction for the purpose of identification and monitoring of suchtransactions.
AUDITORS AND AUDITORS' REPORT
(i) Statutory Auditors
In terms of the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 as amended M/s. ALPS & Co. CharteredAccountants (Firm Registration No. 313132E) was appointed as the Auditors of the Companyfor a consecutive period of 5 years from conclusion of the 22nd Annual General Meetingheld in the year 2017 until conclusion of the 27th Annual General Meeting of the Company.
The Company has received a certificate from M/s. ALPS & Co. Chartered Accountantsconfirming their eligibility to continue as Auditors of the Company in terms of theprovisions of Section 141 of the Companies Act 2013 and the Rules framed thereunder. Theyhave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe ICAI as required under the provisions of Regulation 33 of the LODR Regulations.
The Board explained that the management is in the process of recovery of amounts asreferred to by the auditors in basis for qualified opinion in their reports. Shortfall ifany would be determined on completion of the recovery steps. The Auditors' Report to themembers on the financial statements of the Company for the financial year ended on March31 2020 does not contain any other qualification reservation adverse remark ordisclaimer.
(ii) Cost Auditors
The Company is required to maintain cost records as specified by the Central Governmentunder Section 148(1) of the Companies Act 2013 and accordingly such accounts and recordsare made and maintained.
The Board of Directors have re-appointed M/s. N. Radhakrishnan & Co. CostAccountants of 11A Dover Lane Flat B1/34 Kolkata 700 029 as the Cost Auditors ofthe Company to conduct Cost Audit for the financial year 2020-21. In terms of Section 148of the Companies Act 2013 your Board recommends ratification of remuneration of the CostAuditors at the ensuing Annual General Meeting. The Cost Audit Report for the financialyear 2018-19 has been filed with the Ministry of Corporate A airs within due time.
(iii) Secretarial Auditor
The Board of Directors appointed M/s. P. Sarawagi & Associates Company Secretariesof 27 Brabourne Road Kolkata 700 001 to conduct the secretarial audit of theCompany for the financial year 2019-20.
The Secretarial Audit Report for the financial year ended on March 31 2020 is annexedherewith and marked as Annexure "G" and forms an integral part of thisAnnual Report.
The Board hereby clarifies that Mr. Gouri Prasad Goenka resigned from the Board ofDirectors of the Company w.e.f. June 11 2019. The delay in filing of forms and non-filingof forms was unintentional and due to unexpected country-wide lockdown due to Covid-19pandemic. The corporate o ce of the Company was frequently under containment zone asdeclared by the State Government that further disrupted the normal workings of theCompany. The Board assures the forms due for filing will be filed as soon as possible. Theresults could not be uploaded within 30 minutes because of broadband connection issue butthe same were uploaded immediately upon resolution of the problem. The composition of theBoard as mentioned by the Secretarial Auditor is self-explanatory in nature and furtherexplained in the Corporate Governance Report.
The Secretarial Audit Report does not contain any other qualification reservation oradverse remark or disclaimer.
ANTI-SEXUAL HARASSMENT POLICY
The Company has adopted Anti-Sexual Harassment Policy covering all the aspects ascontained under The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The Company has complied with the provisions relating toconstitution of Internal Complaints Commi ee under The Sexual Harassment of Women atWorkplace (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 complied with the Secretarial Standards on Meetings of the Board ofDirectors (SS-1) and General Meetings (SS-2) issued by The Institute of CompanySecretaries of India and approved by the Central Government.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith and marked as Annexure"H".
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars in respect of conservation of energy and technology absorption foreignexchange earnings and outgo are annexed herewith and marked as Annexure "I".
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 read with the Rules madethereunder the extract of the Annual Return in Form MGT 9 is annexed herewith andmarked as Annexure "J" and copy of such Annual Return is available at hp://www.edclgroup.com.
The Directors state that no disclosure or reporting is required in respect of thefollowing items during the year under review as:
1. No deposits covered under Chapter V of the Companies Act 2013 were accepted;
2. No equity shares with di erential rights as to dividend voting or otherwise; orshares (including sweat equity shares) to employees of the Company under any scheme wereissued;
3. No remuneration or commission to the Whole-time Director of the Company were paidfrom any of its subsidiaries;
4. No significant and material orders were passed by any regulatory authority or courtor tribunal impacting the going concern status and Company's operation in future;
5. No material changes and commitments occurred a ecting the financial position of theCompany between the end of financial year and date of report;
6. No fraud has been reported by the Statutory Auditors Cost Auditors and SecretarialAuditors to the Audit Commi ee or the Board.
Your Directors express their sincere appreciation to the Central and State GovernmentsBanks customers vendors and the Company's valued investors for their continuedco-operation and support.
Your Directors also wish to acknowledge the support and valuable contributions made bythe employees at all levels.
|For and on behalf of the Board |
|for Energy Development Company Limited |
|Sd/- ||Sd/- |
|Vinod Kumar Sharma ||Aman Jain |
|(Executive Director) ||(Director) |
|(DIN: 02879206) ||(DIN: 08187995) |
Place : Kolkata
Dated : November 12 2020