Energy Development Company Ltd.
|BSE: 532219||Sector: Infrastructure|
|NSE: ENERGYDEV||ISIN Code: INE306C01019|
|BSE 00:00 | 24 Apr||Energy Development Company Ltd|
|NSE 05:30 | 01 Jan||Energy Development Company Ltd|
|BSE: 532219||Sector: Infrastructure|
|NSE: ENERGYDEV||ISIN Code: INE306C01019|
|BSE 00:00 | 24 Apr||Energy Development Company Ltd|
|NSE 05:30 | 01 Jan||Energy Development Company Ltd|
TO THE MEMBERS
Your Directors take pleasure in presenting the 24th Annual Report on the business andoperations of your Company along with the standalone and consolidated financial statementsfor the financial year ended on March 31 2019.
Your Company's financial performance for the year under review is summarized below:
The paid-up equity share capital as at March 31 2019 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 different business segments of theCompany future expectations and business environment is provided in the ManagementDiscussion and Analysis Report.
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 (hereinafter referred to as the "LODR Regulations") is annexed herewithand marked 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 2019 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 LODR Regulations. The said Policy may be accessed athttp://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 Annexure "F".
Brief details of the subsidiaries are given below:
i) Ayyappa Hydro Power Limited (Wholly-owned & non-listed subsidiary)
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. 1924.27Lakhs as compared to Rs. 1556.23 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. Kerala witnessed extremely heavy rainfall in the financial year 2018-19 whichresulted in flood like situation all over the State. Unfortunately Ullunkal Project alsosustained considerable damages and remained out of operation from mid of August 2018 toNovember 2018. During the year under review total income of the Company stood at Rs.266.68 Lakhs as compared to Rs. 423.15 Lakhs in previous year.
Entire generation from the units of above mentioned subsidiaries is being sold to theKerala State Electricity Board (KSEB) under Long term Power Purchase Agreements (PPA).
Mr. Vijoy Kumar (DIN: 02970626) an Independent Director of the Company is on the Boardof 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 Uttarakhand. DPR for bothprojects have been approved.
v) Sarju Valley Hydel Projects Company Private Limited
The Company is executing 5.5 MW Balighat Small Hydro Electric Project in the State ofUttarakhand. 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 Committees
As on March 31 2019 the Board of Directors comprised of 7 Directors including 6Non-Executive Directors having experience in varied fields and a Whole-time ExecutiveDirector. Out of 6 Non-Executive Directors 4 were Independent Directors. Detailedinformation on Directors is provided in the Report on Corporate Governance. At presentthere are following 3 Committees:
i) Audit Committee
ii) Nomination and Remuneration Committee
iii) Stakeholders Relationship Committee
The Board has accepted all the recommendations of the Audit Committee. The details ofcomposition terms of reference meetings etc. of the Committees are given in the Reporton Corporate Governance.
Number of Board meetings
The Board met 5 times during the financial year under review. Detailed information onBoard meetings are provided in the Report on Corporate Governance.
Mr. Sanjiv Saraf (DIN: 00506650) Executive Director resigned from the Board ofDirectors of the Company with effect from May 30 2018.
Mr. Gouri Prasad Goenka (DIN: 00030302) Independent Director considering his ageresigned from the Board of Directos of the Company w.e.f. June 11 2019. He confirmed thatthere was no other material reason other than the reason provided.
Mr. Vijoy Kumar (DIN: 02970626) Independent Director whose term is ending in theensuing Annual General Meeting did not o er his candidature for re-appointment byshareholders in the ensuing Annual General Meeting. Consequently he will cease to beIndependent Director on completion of his 1st term.
Mr. Bijay Kumar Garodia (DIN: 00044379) Independent Director whose term is ending onNovember 12 2019 did not offer his candidature for re-appointment by shareholders in theensuing Annual General Meeting. Consequently he will cease to be Independent Director oncompletion of his 1st term.
The Board places on record its sincere appreciation for the services rendered by themduring their tenure as Directors of the Company.
The shareholders at their 23rd Annual General Meeting held on September 29 2018approved the appointment of Mr. Vinod Kumar Sharma (DIN: 02879206) as an ExecutiveDirector of the Company for a period of 3 years effective from May 30 2018 to March 312021.
Mrs. Pankaja Kumari Singh (DIN: 00199454) Director retires by rotation and beingeligible offers herself for reappointment.
On recommendation of Nomination and Remuneration Committee and subject to shareholders'approval the Board has approved the re-appointment of Mr. Anil Gupta (DIN: 00079399) asIndependent Director for a second term of 5 consecutive years. It is proposed to seekshareholders' approval by means of Special Resolution in the ensuing Annual GeneralMeeting of the Company.
Mr. Rohit Pandit (DIN: 03409093) has been appointed as an Additional Director(Category: Independent) of the Company with e ect from August 15 2019 by the Board ofDirectors in its meeting held on August 14 2019 on the recommendation of Nomination andRemuneration Committee and subject to approval of the shareholders in the ensuing AnnualGeneral Meeting to hold office as Independent Directors for a term of upto 5 consecutiveyears effective from August 15 2019 to August 14 2024.
In the opinion of the Board Mr. Rohit Pandit possesses requisite qualifications andexperience which would be useful to the Company and would enable him to contributeeffectively to the Company in his capacity.
The brief resume and other details relating to Mrs. Pankaja Kumari Singh Mr. RohitPandit and Mr. Anil Gupta 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 Committee 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 athttp://www.edclgroup.com/pdf/Nomination-Remuneration-Policy.pdf.
The Board on the recommendation of the Nomination and Remuneration Committee 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 Committee 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 Committee ensures that the level andcomposition of remuneration is reasonable and sufficient to attract retain and motivatethem and ensure the quality required to run the Company successfully. The relationship ofremuneration to performance is clear and meets appropriate performance benchmarks and suchremuneration comprises a balance between fixed and incentive pay reflecting short and longterm performance 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 Committee 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 Committees 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 & effective board procedures quality oftimely information and effective functioning of the Board etc.
The Board evaluated performance of its Committees after considering the inputs receivedfrom all Committee members based on the criteria involving composition of the Committeewith members having diverse experience skill and effective functioning of the Committeeetc.
The Board and the Nomination and Remuneration Committee 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 effective 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 312019 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 2019 and of the profit /loss of the Company for that period;
c) the Directors have taken proper and sufficient 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 effectively;
f) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The following persons are Key Managerial Personnel of the Company:
Whole-time Director : Mr. Vinod Kumar Sharma - designated as ExecutiveDirector' (w.e.f. May 30 2018).
Chief Financial Officer : Mr. Sunil Du Sharma (w.e.f. May 30 2018).
Company Secretary : Ms. Vayshree 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 2018-19. 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 http://www.edclgroup.com/pdf/Whistle-Blower-Policy.pdf.
Your Company hereby a firms that no Director / employee have been denied access to theChairman of the Audit Committee 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 Committee and Board for their approval asrequired. Prior omnibus approval of the Audit Committee 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 processed of recovery of amounts asreferred to by the auditors in Basis for qualified opinion in their reports. Shortfall ifany would be determine on compliation of the recovery steps. The Auditors' Report to themembers on the financial statements of the Company for the financial year ended on March31 2019 does not contain any qualification reservation adverse remark or disclaimer.
(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 has 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 2019-20. 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 2017-18 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 2018-19.
The Secretarial Audit Report for the financial year ended on March 31 2019 is annexedherewith and marked as Annexure "G" and forms an integral part of thisAnnual Report.
The Board hereby clarifies that the delay in form filing was unintentional. The Boardassures the form due for filing will be filed as soon as possible with requisite fees asapplicable. Mr. Gouri Prasad Goenka resigned from the Board of Directors w.e.f. June 112019. Due to unavoidable circumstances there was delay of 8 days in submission of AuditedFinancial Result for the quarter and year ended on March 31 2019. The same is commentedby the Secretarial Auditor which is self explanatory in nature.
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 Committee 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 it may be accessed at http://www.edclgroup.com/pdf/Extract-of-annual-return-mgt-9-2018-19.pdf.
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 differential 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 affecting 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 Committee 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.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO ETC.
Information on conservation of Energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 are provided hereunder:
[ Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 of theCompanies (Accounts) Rules 2014 ]
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES /ASSOCIATE COMPANIES / JOINT VENTURES
Part "A" : Subsidiaries
1. Names of subsidiaries which are yet to commence operations: Companies referred to inno. 3 to 5 in the above table. 2. Names of subsidiaries which have been liquidated or soldduring the year: None. 3. Reporting currency is Indian Rupee and exchange rate as on March31 2019 is not applicable.
4. Reporting period for all subsidiaries is from April 01 2018 to March 31 2019.
Part "B" : Associates and Joint Ventures
Statement pursuant to section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures
Notes : Latest Audited Balance Sheet date is March 31 2019.
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