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Shriram EPC Ltd.

BSE: 532945 Sector: Engineering
NSE: SHRIRAMEPC ISIN Code: INE964H01014
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OPEN 5.50
PREVIOUS CLOSE 5.73
VOLUME 378070
52-Week high 7.00
52-Week low 3.38
P/E
Mkt Cap.(Rs cr) 529
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.45
Sell Qty 8565.00
OPEN 5.50
CLOSE 5.73
VOLUME 378070
52-Week high 7.00
52-Week low 3.38
P/E
Mkt Cap.(Rs cr) 529
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.45
Sell Qty 8565.00

Shriram EPC Ltd. (SHRIRAMEPC) - Director Report

Company director report

Dear Shareholder

Your Directors present the Twentieth Annual Report together with theAudited Financial Statements of your Company for the financial year ended 31stMarch 2020.

FINANCIAL RESULTS

(' in Crores)

Consolidated Consolidated Standalone Standalone
(12 months) (12 months) (12 months) (12 months)
2019-20 2018-19 2019-20 2018-19
Total Income 125886.71 127629.56 72923.19 81493.07
Profit before Interest Depreciation tax and extraordinary items 9491.33 13255.84 8943.63 10952.72
Interest & depreciation 10610.67 10111.04 10435.48 7895.31
Profit before tax & before extra-ordinary items (1119.35) 3604.77 (1491.85) 3321.93
Provision for taxation - 86.22 - -
Profit after tax & extra-ordinary items (7726.33) 3058.58 (8098.83) 2861.96
Balance brought forward from last year (167762.49) (170821.07) (163228.67) (166090.64)
Profit available for appropriation 0 0 0 0
Transfer to general reserves (7711.93) 3058.58 (8098.84) 2861.96
Surplus carried forward (175474.42) (167762.49) (171327.50) (163228.67)

OPERATING RESULTS & PERFORMANCE

During the financial year ended March 312020 the company had recordeda total income at Rs. 681.05 Crores as against Rs. 740.66 Crores in the previous year on astandalone basis.

Loss was at Rs.80.81 crs as against a profit of Rs. 28.76 crs in thecorresponding period.

BUSINESS HIGHLIGHTS

During the past year the operations of the Company completed > 90%of the overseas project at Sohar Oman even though it was scheduled to complete by March2020. The project is partly commissioned. Commissioning of the balance portion has beendelayed due to the COVID lockdown and is expected to be completed before September 2020.This will be a significant land mark for the Company to bid for other projects in theMiddle East market.

The Company continued to be under some stress on cash flows primarilydue to delays in approval and release of enhanced limits from Banks which affected thedomestic project execution schedule and taking of new orders. The restructuring in banksalso delayed availment of limits.

Company's Order Book was Rs 1736 crores as at March 312020.

BASRA PROJECT

The Company had received a Contract restored (in 2018) in Mokul ShriramEPC JV(MSJV) for Sewerage Storm water and Trunk sewer pipeline at Al Qibla area forBasra Governorate Basra Iraq valued at USD 236 Mn. in joint venture with MokulInfrastructure Private Limited. This project is being executed through a a localcontractor and is progressing well.

DEVELOPMENTS DURING THE YEAR COVID Pandemic

The Construction and Engineering sector was already facing multiplechallenges from lack of capital and credit avenues to oversupply and lack of new projectsin certain key areas. The impact of the COVID 19 pandemic is a new challenge.

Many upstream and midstream EPC projects across countries canpotentially face an issue during this quarter and subsequent quarters.

This is likely to cause delays and cost escalation issues for the EPCprojects in hand and also affect future projects pipeline timelines and projectfinancing. Moreover the prevailing economic situation may not be conducive for some newprojects to come on-stream in the near future.

There are multiple consequences of the lockdown which would increasethe troubles for the sector like reverse migration of labour disruption of supply chainsamongst others. Cumulatively the above circumstances would cause hindrance in meeting theobligations under the construction and engineering contracts and would lead to multiplelegal disputes for the industry post lifting of the current restrictions.

The various restrictions put in place by the Governments to control theeffects of the virus may trigger shortage of raw material and manpower disrupted supplychain further creating handicaps in performing contractual obligations.

In order to safeguard against the inevitable the company is evaluatingthe contract clause(s)to ascertain the extent of liabilities upon breach and proactivelyadopting all measures to mitigate the liability by timely invoking the correctlegaldoctrine(s).

The Company has evaluated its ongoing projects in light of the COVIDpandemic and has made provisions on the expected losses on ongoing projects as per currentestimates.

BUSINESS RISK MANAGEMENT

Pursuant to the requirement of Regulation 21 of SEBI (ListingObligations And Disclosure Requirements) Regulations 2015 the Company has constitutedBusiness Risk Management Committee. The details of Committee and its terms of referenceare set out in the Corporate Governance Report forming part of the Board's Report.

The Company has a robust Business Risk Management (BRM) framework toidentify evaluate treat and Report business risks. This framework seeks to createtransparency minimize adverse impact on the business objectives and enhance theCompany's competitive advantage. The business risk framework defines the riskmanagement approach across the enterprise at various levels including documentation andreporting. The framework has different risk models which help in identifying risks trendexposure and potential impact analysis at a Company level as well as business segments andits mitigation plans.

The business risks identified by the Company and its mitigation plansare as under:

Project Risks:

In the context of the projects being executed the Company reviews therisks associated with a project in all the following aspects but not restricted to:

• Client related details such as financial closure of the projectcreditworthiness and reputation of the client before even signing of the contract.

• Estimation risk like price and quantity variances contingencyprovision forex fluctuation on a periodic basis.

• Commercial risks like taxes and duties payment terms bankguarantee requirements

• Organisational risks like availability of technical andmanagerial resources gap funding needs consortium partner's roles andresponsibilities.

• Performance risk like achievability of guarantee parameterstime schedule warranty and defect liability obligations.

• Interfacing risks like coordination with multiple agencies forapprovals and clearance

• Geographic risks like unfavourable weather conditions earthquake floods etc.

The above key risks are closely tracked for timely mitigation.

Competition Risks:

The Infrastructure Industry is intensely competitive. To mitigate thisrisk the company is leveraging on its expertise experience to increase market shareenhance brand equity / visibility and enlarge product portfolio and service offerings.

Occupational Health & Safety (OHS) Risks:

Safety of employees and workers is of utmost importance to the company.To reinforce the safety culture in the company it has identified occupational health& safety as one of its focus areas. Various training programmes have been conducted atthe sites such as behaviour based safety training program visible safety leadershipprogram logistics safety program etc.

ECONOMIC SCENARIO AND OUTLOOK

I n the coming year 2020-21 the disruption due to the COVID 19pandemic could have a significant impact on the business of the Company even though theGovernment are providing reliefs and measures to improve the Economy with focus onInfrastructure. Hence it is going to be a very challenging year ahead.

BUSINESS OVERVIEW

Your Company operates in the turnkey contracts business.

The turnkey contracts business covers engineering procurement andconstruction projects. Major areas of operation include Municipal services projects likewater and wastewater treatment plants and infrastructure Roads metallurgical and processplant projects and Renewable energy projects.

The order backlog was over Rs. 1736 crores as on March 312020.

GREEN INITIATIVE IN CORPORATE GOVERNANCE

The Ministry of Corporate Affairs (MCA) has through Circular No.17/2011pronounced a Green initiative in Corporate Governance that allows Companies to sendnotices/ documents to shareholders electronically. The Green Initiative endeavors toreduce consumption of paper in turn preventing deforestation and contributes towards agreen and clean environment. In support of the initiative announced by MCA your Companywill send notices convening Annual General Meeting Audited Financial StatementsDirectors Report and Auditors' Report etc in electronic form in the current financialyear. Your Company would like to continue the Green Initiative further and requests allshareholders to opt for electronic documents.

However on request by any member of the Company/ Statutory Authorityinterested in obtaining full text of the financial statements these documents will bemade available for examination at its registered office.

SUBSIDIARY

SHRIRAM EPC FZE SHARJAH

During the year the progress of the contract execution forconstructing Balance of Plant (BoP) for 1.2 MTPA Mini Mill Project in Sohar Sultanate ofOman has already been 90% executed. The project is expected to be completed beforeSeptember 2020 which has been delayed due to COVID 19 Pandemic.

The contribution of the turnover from SEPC FZE Sharjah will be morethan 20% of the turnover for the current financial year. To comply with the Regulation24(J) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 notifiedon June 7 2018 the Company had already appointed in 2018-19 Mr. K S Sripathi anIndependent Director on the Board of the Company also on the Board of Shriram EPC FZESharjah Wholly Owned Subsidiary.

SHRIRAM EPC ARKAN LLC

During the year the Company's step down subsidiary Shriram EPCArkan LLC (70 % subsidiary of SEPC FZE Sharjah) as already mentioned in the earlier reportis exploring possibilities of bidding for new projects in the Middle East.

ASSOCIATES

HALDIA COKE & CHEMICALS PVT. LTD (HCCL)

The Company has been referred to NCLT and the plans are being drawn forsettlement with the creditors.

DIVIDEND

Since the Company has losses the Board has decided not to recommend aDividend.

SHARE CAPITAL

The authorized and paid-up capital of your Company is Rs.1050 croresand Rs.971.53 crores respectively.

The shareholding pattern as on 31st March 2020 is as under:

Sl Shareholders % holding
1 SVL Ltd (promoters) 28.76
2 Bankers 66.52

The total net worth of the Company as at 31st March 2020 onStandalone basis was Rs 1177.20. crores.

DETAILS OF DEPOSITS

The Company has not accepted any Deposits covered under Section 73 ofthe Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (REFERREDTO IN SUB SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013)

All transactions with related parties were on arm's length basisand in the ordinary course of business. There was no material related party contractduring the year. Form AOC-2 as required under Section 134 (3)(h) of the Act is enclosed tothis report.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

In addition to the Internal Controls on Operations the Board has laidemphasis on adequate internal financial controls to ensure that the financial affairs ofthe Company are carried out with due diligence. Apart from Internal Audit function whichscrutinizes all the financial transactions there are also processes laid down leading toCFO/CEO certification to Board on the adequacy of Internal Financial Controls as well asinternal controls over financial reporting.

RE-APPOINTMENT / APPOINTMENT OF DIRECTORS

The Board of Directors of your Company appointed / reappointed thefollowing Directors during the financial year:

a. At the 15th AGM of the Company held on September 242015 Mr. S Bapu was appointed as Director of the Company for a period of five years andtherefore his first term of appointment shall end at the conclusion of the ensuing AGM ofthe Company on September 23 2020.

Considering his immense contribution to the Company and pursuant to therecommendations of the Nomination & Remuneration Committee the Board in its meetingheld on 10th July 2020 considered to recommend to the shareholders of theCompany the re-appointment of Mr. S Bapu as Director for a period of one year from theconclusion of this AGM of the Company scheduled on September 23 2020 till the conclusionof the 21st AGM to be held in the year 2021.

b. In accordance with the provisions of Section 152 of the Act and theArticles of Association of the Company Mr. M Amjat Shariff was re-appointed as the JointManaging Director of the Company in the category of Non-Retiring Director in the AGM heldon August 3 2018 for a period of three years. However pursuant to the Articles ofAssociation of the Company if at any time the number of Directors liable to retire byrotation fall below one-third of the total number of Directors (excluding IndependentDirectors) the term of Mr. M Amjat Shariff as a Director shall be liable to retire byrotation for the time such number is below one-third.

Currently the number of Directors liable to retire by rotation hasfallen below one-third. Accordingly Mr. M Amjat Shariff shall retire by rotation at theensuing AGM and being eligible has offered himself for reappointment as Director of theCompany. However his term as Joint Managing Director of the Company would continueuninterrupted post his re-appointment as Director.

Necessary resolutions in respect of re-appointment of Directorsmentioned above are included in the Notice convening the ensuing AGM.

c. At the 15th AGM of the Company held on 24th September2015 Mr. P D Karandikar was appointed as Director of the Company for a period of fiveyears. His appointment shall end at the conclusion of the ensuing AGM of the Company on 23September 2020 and will be seeking reappointment for the 2nd term of 5 years.

Considering his immense contribution towards the Company and pursuantto the recommendations of the Nomination & Remuneration Committee the Board in itsmeeting held on 10.7.2020 recommended to the shareholders of the Company there-appointment of Mr. P D Karandikar as Director for a period of 5 years from theconclusion of this AGM of the Company scheduled on 23 September 2020 till the conclusionof the 25th AGM to be held in the year 2025.

d. At the 15th AGM of the Company held on 24th September2015 Ms. Chandra Ramesh was appointed as Director of the Company for a period of fiveyears. Her appointment shall end at the conclusion of the ensuing AGM of the Company to beheld on 23 September 2020 and will be seeking reappointment for the 2nd term of5 years.

Considering her immense contribution towards the Company and pursuantto the recommendations of the Nomination & Remuneration Committee the Board in itsmeeting held on 10.7 2020 recommended to the shareholders of the Company there-appointment of Ms. Chandra Ramesh as Director for a period of 5 years from theconclusion of this AGM of the Company scheduled to be held on 23 September 2020 till theconclusion of the 25th AGM to be held in the year 2025.

EVALUATION OF BOARD'S PERFORMANCE

As per the provisions of Section 134(3) (p) of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Committee Nomination& Remuneration Committee and Risk Management Committee and Stakeholders RelationshipCommittee. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of familiarization programmes for Independent Directors ofthe Company their roles rights responsibilities in the Company nature of the industryin which the Company operates business model of the Company and related matters are putup on the website of the Company at the following link:http://www.shriramepc.com/Companies-Act- 2013-Compliance.aspx

Further during the year some of the Directors (all IndependentDirectors) were taken for a plant visit to Vizag Steel plant to see the execution ofcomplex engineering projects of the Company -

a. Wire Rod Mill

Construction of stores unloading loading storage watch & wardand stores management of all plant & equipment piping work electrical items sparesetc. transportation & handling at site erection testing commissioning &assistance during PG test of plant & equipment

b. SPECIAL BAR MILL - Supply and Erection

Design Manufacture And Supply of Indigenous Equipment Storagehandling erection including imported equipment supplied by consortium members testingcommissioning and PG tests of mechanical equipment & piping works as per agreed scopeof work complete in all respects

c. Revamping and Up-gradation of Sinter Machines 1 & 2

o Design and Engineering. o Indigenous and Imported Supply. o CivilEngineering work. o Dismantling of Existing Equipments and Erection of new Equipments.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each IndependentDirector of the Company under Section 149(7) of the Companies Act 2013 (Act) stating thatthe Independent Directors of the Company met with the criteria of Independence laid downin Section 149(6) of the Act and Regulation 25 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

REMUNERATION POLICY

Pursuant to Section 178(3) of the Companies Act 2013 the Board on therecommendation of the Nomination & Remuneration Committee framed a policy forselection and appointment of Directors Key Managerial Personnel and other employees andtheir remuneration.

The details of the Remuneration Policy are stated in the CorporateGovernance Report.

NUMBER OF MEETINGS OF THE BOARD

During the year 2019-20 5(Five) meetings of the Board of Directorswere held on 27th May 2019 6th August 2019 18thSeptember 2019 12th November 2019 12th February 2020. The AuditCommittee had met Four (4) times on 27th May 2019 6th August 201912th November 2019 12th February 2020 The details of the saidmeetings are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:

a. that in the preparation of the annual accounts for the year endedMarch 312020 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;

b. that the directors had selected such accounting policies asmentioned in Note No: 2 of the Financial Statements and applied them consistently andjudgement and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company as at March 31 2020 and of the loss of the Companyfor the year ended on that date;

c. that the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

d. that the directors had prepared the annual accounts on a goingconcern basis;

e. that the directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

f. t hat the directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness. There were no materially significant related party transactions made by thecompany with promoters directors key managerial personnel or other

designated persons which may have a potential conflict with theinterest of the company at large. None of the Directors had any pecuniary relationships ortransactions vis-a-vis the Company other than sitting fees and reimbursement of expensesincurred if any for attending the Board meetings.

All related party transactions are placed before the audit committeefor review and approval as per terms of the Policy for dealing with related parties. Prioromnibus approval of the audit committee is obtained on a quarterly basis for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the audit committee and the board ofdirectors for their approval on a quarterly basis.

The policy on related party transactions as approved by the board isuploaded on the company's website at the following link.http://www.shriramepc.com/Companies-Act- 2013-Compliance.aspx

EXPLANATIONS OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSEREMARKS OR DISCLAIMER MADE BY THE STATUTORY AUDITORS AND THE PRACTISING COMPANY SECRETARYIN THEIR REPORT

The explanations/comments made by the Board relating to qualificationreservations or adverse remarks made by the Statutory Auditors and the Practising CompanySecretary in their respective reports are furnished below:

QUALIFICATIONS OF STATUTORY AUDITORS

Qualified Opinion

According to the information and explanations given to us and based onour audit material weaknesses have been identified in the operating effectiveness of theHolding Company's internal financial controls with reference to financial statementsas at March 312020 in respect of the following:

i. Provisioning of overdue receivables and provisioning of advanceswhich have been outstanding for a period of more than five years which could potentiallyresult in the Holding Company not recognizing a provision for the said receivables andadvances.

ii. Assessment on future taxable profits which could result inrecognition of excess Deferred tax asset been which the Holding Company may not be able toutilize.

A ‘material weakness' is a deficiency or a combination ofdeficiencies in internal financial control with reference to financial statements suchthat there is a reasonable possibility that a material misstatement of the company'sannual or interim financial statements will not be prevented or detected on a timelybasis.

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the material weaknessdescribed above on the achievement of the objectives of the control criteria the Holdingcompany have in all material respects maintained internal financial controls withreference to financial statements and such internal financial controls with reference tofinancial statements were operating effectively as of March 31 2020 based on theinternal control with reference to financial statements criteria established by therespective companies considering the essential components of internal control stated inthe Guidance Note.

We have considered the material weakness identified and reported abovein determining the nature timing and extent of audit tests applied in our audit of theMarch 31 2020 consolidated financial statements of the Company and the material weaknessdoes affect our opinion on the consolidated financial statements of the Company.

QUALIFICATIONS BY SECRETARIAL AUDITOR

NIL

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITIONBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There are no material changes or commitments affecting the financialposition of the Company between the end of the financial year and the date of this report.

COMPOSITION OF AUDIT COMMITTEE

The Present Audit Committee consists of the following Members:

1. Mr. P D Karandikar - Chairman
2. Mr. S Bapu - Member
3. Ms. Chandra Ramesh - Member
4. Mr. K S Sripathi - Member

The Board has accepted the recommendations of the Audit Committee andthere were no incidences of deviation from such recommendations during the financial yearunder review.

WHISTLE BLOWER POLICY (VIGIL MECHANISM)

Pursuant to Sections 177(9) and (10) of the Companies Act 2013 andRegulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors' and employees to report their concerns about unethical behaviour actualor suspected fraud or violation of the Company's Code of Conduct or Ethics Policy.The Policy provides for adequate safeguards against victimization of employees who availof the mechanism and provides to employees' direct access to the Chairman of theAudit Committee. It is affirmed that no personnel of the Company have been denied accessto the Audit Committee. The Whistle Blower Policy has been posted on the website of theCompany at HYPERLINK "http://www.shriramepc.com" www.shriramepc.com

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to Section 178 of the Companies Act 2013 during the yearthe Board had reconstituted the Nomination and Remuneration Committee consisting of thefollowing members:

Ms. Chandra Ramesh - Chairman

Mr R. Sundararajan - Member

Mr. P D Karandikar - Member

Mr. K S Sripathi - Member

The said committee has been empowered and authorized to exercise powersas entrusted under the provisions of Section 178 of the Companies Act 2013. The Companyhad laid out the policy on director's appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under sub section 3 of Section 178 of the Companies Act 2013.

Policy on Criteria for Board Nomination and Remuneration is availablein the website of the Company under the link http://www.shriramepc.com/Companies-Act-2013-Compliance. aspx

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is carrying accumulated losses. However Corporate SocialResponsibility Committee is formed based on the net worth of the Company as per theCompanies (Corporate Social Responsibility Policy) Rules 2014. The CSR Policy will beframed at the appropriate time by the Company.

INSIDER TRADING GUIDELINES

Pursuant to the provisions of SEBI (Prohibition of Insider Trading)Regulations 2015 (as amended from time to time) the Company has formulated a Code ofConduct on Prohibition of Insider Trading (‘Insider Trading Code') and a Code ofPractices and Procedures for fair disclosure of Unpublished Price Sensitive Information(‘Fair Disclosure Code') which are in force. The Fair Disclosure Code isavailable on the website of the Company at http://www.shriramepc.com/investors-insider-trading-guidelines.aspx.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.

AUDITORS

The Company's auditors M/s. MSKA & Associates (ICAI FirmRegistration Number- 105047W have been appointed for a period of 5 years till 2022.

COST AUDITORS

Pursuant to Section 148 of the Companies Act 2013 (Act) read with Rule14 of Companies (Audit and Auditors) Rules 2014 (Rules) Mr. G Sundaresan CMA(Membership No:11733) was appointed as Cost Auditor of the company for the financial year2020-21 on a remuneration of Rs.50000/- p.a. In terms of the Act and Rules referred abovethe remuneration payable to the cost auditor is required to be placed before the membersin a general meeting for their ratification.

Accordingly a resolution seeking member's ratification for theremuneration payable to Mr. G Sundaresan CMA Cost Auditor is included at Item No.6 ofthe notice convening the Annual General Meeting.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the company has appointed Mr. Rajiblochan Sarangi Company Secretary in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor isannexed herewith.

The Company has reappointed Mr. Rajiblochan Sarangi Company Secretaryin Practice as the Secretarial Auditor of the Company at a remuneration of Rs.1 lac p.a.

SECRETARIAL STANDARDS

The Institute of Company Secretaries of India has issued SecretarialStandards (Meetings of the Board and General Meetings) on various aspects of corporate lawand practices. The Company has complied with each one of them.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report highlighting the businessdetails is attached and forms part of this report.

CORPORATE GOVERNANCE

All material information was circulated to the directors before themeeting or placed at the meeting including minimum information required to be madeavailable to the Board as prescribed under Part A of Schedule II of Sub- Regulation 7 ofRegulation 17 of the Listing Regulations.

In terms of Regulation 34 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 a Report on CorporateGovernance along with a Certificate from the Practicing Company Secretary confirming thecompliance with the conditions of Corporate Governance as stipulated under Part E ofSchedule V of Sub- Regulation 34(3) of the Listing Regulations is attached to this report.

PROTECTION OF WOMEN AT WORK PLACE

The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the workplace (PreventionProhibition & Redressal) Act 2013.

Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy.

The following is the summary of sexual harassment complaints during theyear 2019-20.

No. of complaints received - Nil

No. of complaints disposed off - Not Applicable

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8(3) of The Companies (Accounts) Rules 2014 is given below:

Earnings in Foreign Currency: Nil

Expenditure in Foreign Currency: Rs. 559.04 lakhs

Rs. In Lakhs

Travelling and conveyance 75.88
Professional and consultation fees 0.48
Erection Construction & Operation Expenses 67.42
Others 415.26
Total 559.04

Transfer to Investor Education and Protection Fund Authority

The amount pending to be transferred is Rs.70465.20

Your Company filed Form IEPF for transfer of unpaid dividend of Rs.70465.20 as on 31st March 2012 and submitted the challan no U54939608 dated 12thNovember 2019 to Axis Bank for onward remittance to the Investor Education and ProtectionFund (IEPF) but due to some technical reason Axis Bank has failed to remit the amountbefore the due date and the Challan got cancelled. The Company has approached theRegistrar of Companies (ROC) Chennai Tamil Nadu for transfer of above unpaid dividendamount at the earliest. Due to the current COVID situation the process is getting delayedas ROC is working with limited staff.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in theprescribed form MGT 9 as per Section 92(3) of the Companies Act 2013 read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 is annexed to and forms part ofthis Report.

PARTICULARS OF EMPLOYEES

The ratio of remuneration of each Director to the median ofemployees' remuneration as per Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 is annexed to and forms part of this report.

Statement containing the particulars of employees in accordance withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 or amendments made thereto

S.No Name Remuneration Received (Rs. In lakhs) Designation Qualification & Experience Age (Years) Last employment held
1 R. SRIRAM 80 EXECUTIVE DIRECTOR B Tech M S 23years 52 MD Saag RR Infra Ltd
2 K.P. MISHRA 65 EXECUTIVE DIRECTOR BE-MECH 43years 67 Head SBU Tata Projects
3 M. AMJAT SHARIFF 62.15 JOINT MANAGING DIRECTOR MTECH 48 years 65 President TTG Inds
4 T. SHIVARAMAN 62.15 MANAGING DIRECTOR & CEO BTECH/MS 33 years 54 Chief-Technical services Shriram Towertech Ltd
5 R.S. CHANDRASEKHARAN 49.38 CHIEF FINANCIAL OFFICER BCOM/FCA/ DIPIFR (ACCA-UK)- 32 years 60 Corporate Financial Controller Shasun Pharmaceuticals Ltd
6 D. ARIVALAGAN 48.73 SENIOR VICE PRESIDENT BE-MECH 42 years 62 General Manager Shriram PPR Technology P Ltd
7 K. CHINNARAJU 48 PRESIDENT BE-MECH 37 years 63 AGM Jindal stainless Ltd
8 K. SURESH 42.11 VICE PRESIDENT & COMPANY SECRETARY B COM(HONS)/ ACS/PG DIP- CS- 34 years 57 Zonal Head(South) Tally Solutions P Ltd
9 R. VENKATARAMANAN 41.9 SENIOR VICE PRESIDENT BE- CHEMICAL 37 years 55 Manager Nama Chemicals groupKSA
10 KHADER NAWAZ KHAN 40 SR.VP AND HEADWATER INFRA DCE 27 Years 48 Sales Engineer Haffer Electro Plast Pvt Ltd.

DISCLOSURE REQUIREMENTS

• The Company complies with all applicable mandatory Secretarialstandards issued by the Institute of Company Secretaries of India

• None of the Auditors of the Company have reported any fraud asspecified under second proviso of Section 143(12) of the Companies Act 2013(including anystatutory modification (s) or re-enactment(s) thereof for the time being in force.

• The Company does not have any scheme or provision of money forthe purchase of its own shares by employees/Directors or by trustees for the benefit ofemployees/Directors: and

• The Company has not issued equity shares with differentialrights as to dividend voting or otherwise.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared inaccordance with Section 129(3) of the Companies Act 2013 and relevant AccountingStandards (AS) viz. AS 21 AS 23 and AS 27 issued by the Institute of CharteredAccountants of India form part of this Annual Report. Further a statement containing thesalient features of the financial statement of the subsidiary in the prescribed formatAOC-1 is appended to the Directors Report. The statement also provides the details ofperformance and financial position of the subsidiary.

APPRECIATION & ACKNOWLEDGEMENTS

The Directors wish to thank the bankers for their continued assistanceand support. The Directors also wish to thank the Shareholders of the company for theircontinued support even during these testing period. Further the Directors also wish tothank the customers and suppliers for their continued cooperation and support. TheDirectors further wishes to place on record their appreciation to all employees at alllevels for their commitment and their contribution.

For and on behalf of the Board P D Karandikar

12th August 2020 (DIN: 02142050)
Chennai Chairman

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