To the Members of Patel Engineering Limited,
Your Directors hereby present the 74th Board's Report on the
business, operations and state of affairs of the Company together with the audited
financial statements for the year ended March 31, 2023:
FINANCIAL PERFORMANCE
Standalone and Consolidated
( in million)
Particulars |
Consolidated |
Standalone |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Total Income |
43,223.24 |
34,965.11 |
39,613.97 |
31,647.75 |
| Total Expenses |
40,888.21 |
33,539.99 |
37,570.19 |
30,340.21 |
| EBITDA |
7,452.29 |
6,439.38 |
6,847.49 |
5,924.64 |
| Depreciation |
933.03 |
818.99 |
806.41 |
683.43 |
| Finance Cost |
4,184.23 |
4,195.27 |
3,997.30 |
3,933.67 |
| Exceptional Item |
8.14 |
304.94 |
60.78 |
424.14 |
| Pro_t before tax |
2,326.89 |
1,120.18 |
1,983.00 |
883.40 |
| Tax expenses |
538.87 |
431.43 |
427.36 |
327.98 |
| Share in profit in associates (net) |
46.79 |
32.23 |
- |
- |
| Net Pro_t after tax |
1,834.81 |
720.98 |
1,555.64 |
555.42 |
| Other Comprehensive Income (Net) |
(123.90) |
(72.43) |
2.89 |
8.49 |
| Total comprehensive income for the year |
1,710.91 |
648.55 |
1,558.53 |
563.91 |
| Non controlling interest |
(162.85) |
(98.49) |
- |
- |
| Net Profit for owners |
1,548.06 |
550.06 |
1,558.53 |
563.91 |
| Earnings per equity shares (face value
1 each) |
|
|
|
|
| - Basic |
3.19 |
1.51 |
2.97 |
1.17 |
| - Diluted |
2.23 |
1.49 |
2.10 |
1.17 |
Consolidated:
The Consolidated total income for FY 2023 stood at 43,223.24 million
as against 34,965.11 million for the previous year. The Net profit for the year ended
March 31, 2023 was at
1,548.06 million as against Net profit of 550.06 million for the
previous year.
Standalone:
On Standalone basis, the total income for FY 2023 stood at
39,613.97 million as against 31,647.75 million for the previous
year. The Net Profit for the year ended March 31, 2023 was at 1,558.53 million as
against Net profit of 563.91 million for the previous year.
Dividend
To conserve funds, the Directors have not recommended payment of
dividend for the financial year 2022-23.
Pursuant to Regulation 43A of the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is available
on the website of the Company at the link: https://tinyurl.com/54cvkwz9.
Share Capital
During the year under review:
i. 2,39,61,525 equity Shares of the face value of 1 each were
allotted to Patel Engineering Employees' Welfare Trust.
ii. 1,25,52,800 equity shares were allotted to AFRIN DIA (FPI Category
– I) at an issue price of 25.36 each under preferential basis.
iii. 25,78,72,409 equity shares of the face value of 1 each were
allotted on Rights Issue basis at an issue price of
12.60 each.
Consequently, as at March 31, 2023, the total paid-up share capital of
the Company stood at 77,36,17,228 divided into 77,36,17,228 Equity Shares of 1 each.
Information on state of affairs of the Company
Information on the operational and financial performance, among others,
is given in the Management Discussion and Analysis Report, forming part of the Annual
Report and is in accordance with the SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015 ("SEBI LODR Regulations").
Merger of Subsidiaries
During 2022-23, Merger by Absorption of 14 wholly owned subsidiaries
viz. Patel Energy Resources Ltd; PEL Power Ltd; PEL Port Pvt Ltd; Patel Energy Projects
Pvt Ltd; Patel Energy Assignment Pvt Ltd; Patel Energy Operations Pvt Ltd; Jayshe Gas
Power Pvt Ltd; Patel Thermal Energy Pvt Ltd; Patel Hydro Power Pvt Ltd; Zeus Minerals
Trading Pvt Ltd; Patel Concrete & Quarries Pvt Ltd; Patel Lands Ltd; Patel Engineers
Pvt Ltd and Phedra Projects Pvt. Ltd with the Company was approved by the Hon'ble
National Company Law Tribunal, Mumbai and Hyderabad Bench to combine business interest
into one corporate entity, resulting in operational synergies, simplification,
streamlining and optimization of the group structure and efficient administration.
Borrowing
The total long-term borrowings stood at 15,421.76 million as on March
31, 2023 as against 19,907.07 million as on March 31, 2022.
Subsidiaries & Associates
As on March 31, 2023, the Company has 53 subsidiaries including step
down subsidiaries.
Highlights of performance of key subsidiaries/Associates
Michigan Engineers Private Limited (Michigan)_having presence in urban
infrastructure Projects, mostly in Mumbai, has achieved the revenue of 3,200 million and
profit of 351.70 million in FY 23. It has an order book of around 20,000 million.
Michigan successfully launched its TBM for the longest 2.6 meter ID segmental tunnel in
India of 6.5 km and has completed more than 1 km of the tunnel by March 31, 2023.
The Company is in discussion to monetize and hive-off its stake in
Michigan.
Raichur Sholapur Transmission Company Private Limited (RSTCPL)
commissioned 765 kV single circuit transmission line between Raichur and Sholapur in July
2014. The stake in RSTCPL has been sold during the year under review to India Grid Trust
by all the shareholders/partners of RSTCPL and the Company along with the partners of
RSTCPL got released the corporate guarantees of approximately 2,400 million given for
the loan availed by RSTCPL.
Dirang Energy Private Limited (Dirang), a Special Purpose Company for
development of 144MW Gongri Hydroelectric Power Project in West Kameng District in
Arunachal Pradesh. In accordance with the terms of the Memorandum of Agreement dated May
18, 2007 (as amended by Amendment Agreement dated August 5, 2021) the Company has started
the Arbitration proceedings in the matter against the Govt. of Arunachal Pradesh.
Currently the arbitration is at the stage of evidence and the next dates are yet to be
fixed, in view of a request to the arbitrator to adjourn the hearing to a later date given
that the parties are engaging in discussions to settle the disputes.
Patel KNR Infrastructures Ltd and Patel KNR Heavy Infrastructures
Limited continue to remain the same. The Company holds substantial stake in these road
project companies. Both the NHAI annuity projects are under operation and the respective
companies are receiving the annuity on semi-annual basis. The respective Companies are
maintaining the assets as per the contract conditions.
PBSR Developers Private Limited, is developing the project consisting
two residential towers (each tower having 20 floors) comprising of residential units of 2
BHK, 2.5 BHK and 3 BHK and one tower of serviced apartments (19 floors). The residential
towers have 12 flats per floor and service apartment block have 11 units per floor. PBSR
has applied for the Occupancy Certificate (OC) for Smondo Gachibowli project to Greater
Hyderabad Municipal Corporation (GHMC) and started handing over of the flats to buyers.
PBSR needed to handover total area to GHMC out of project land parcel, which Company have
registered in GHMC's favour. However, the adjoining layout resident's
association has created certain disputes in this regard, Company is in the process of
resolving said disputes, post which OC shall be released.
The Company's Mauritius subsidiary Les Salines Development Ltd
(LSDL) had lease Agreement for development of 24.6215 hectares of land for residential,
commercial, leisure and shopping etc with Government of Mauritius (GOM) for a period of 99
years. In February 2015, suddenly GOM had terminated the lease without assigning any
reason. After termination of the project, the Company had issued a notice of arbitration
to GOM for expropriation of investment under bilateral treaty between India and Mauritius
for promotion and protection of investment in both countries. The Arbitration process has
been completed and the Company is expecting a favourable award for the same.
The salient features of the financial statement of each of the
subsidiaries and the associates as required under the Companies Act, 2013 is provided in
Annexure I of the Boards' Report. Pursuant to the provisions of Section 136 of the
Act, the financial statements of the Company, consolidated financial statements along with
relevant documents and separate audited financial statements in respect of the
subsidiaries are available on the website of the Company at www.pateleng.com.
In terms of SEBI LODR Regulations the Company has formulated a policy
for determining ‘material' subsidiaries and the same has been disclosed on
Company's website at the following link: https://tinyurl.com/235xsrxw.
Particulars of Loans given, Investment made, Guarantees given and
Securities provided
The members may note that the Company is engaged in providing
infrastructural facilities and hence, as per Section 186(11) of Companies Act, 2013,
nothing in Section 186 shall apply to the Company except sub-section (1) of Section 186.
Accordingly, a separate disclosure has not been given in the financial statements as
required under Section 186(4) with regard to particulars of loan given, investment made or
guarantee given or security provided and the purpose for which the loan or guarantee or
security is proposed to be utilized by the recipient of the loan or guarantee or security.
Related Party Transactions
All contracts/arrangement/transactions entered into by the Company
during FY 23 with related parties were in compliance with the applicable provisions of the
Companies Act, 2013 and the SEBI LODR Regulations.
All related party transactions entered into during FY 23 were on an
arm's length basis and in the ordinary course of business of the Company under the
Act and not material under the SEBI LODR Regulations. None of the transactions required
members' prior approval under the Act or the SEBI LODR Regulations.
Details of transactions with related parties during FY 23 are provided
in the notes to the financial statements. There were no transactions requiring disclosure
under section 134(3)of the Companies Act, 2013. Hence, the prescribed Form AOC–2 does
not form a part of this report.
In accordance with the provisions of SEBI LODR Regulations, the Company
has formulated the Related Party Transactions policy and the same is uploaded on
Company's website at the link: https://tinyurl.com/2p94jfyw.
Directors and Key Managerial Personnel i. Independent Directors
The Board has appointed the below mentioned Directors as Independent
Directors during the year under review:
1. Dr. Sunanda Rajendran effective from March 24, 2023
2. Mr. Shambhu Singh effective from March 01, 2023
3. Mr. Ashwin Parmar effective from April 20, 2023
The appointment of the above mentioned Directors is subject to approval
of members for which Postal Ballot Notice dated April 20, 2023 was circulated to the
members for approval.
The necessary declarations with respect to independence has been
received from all the Independent Directors of the Company and that the Independent
Directors have complied with the Code for Independent Directors prescribed in Schedule IV
to the Companies Act, 2013. Further Board confirms compliance with the Code of Conduct for
Directors and senior management personnel as formulated by the Company.
ii. Other Directors / Key Managerial Personnel
Mr. Rupen Patel retires by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for reappointment.
There is no change in the Key Managerial Personnel (KMPs). Some of the
KMPs of the Company are also the Directors/ KMPs of the subsidiaries.
Number of Board Meetings
During the year ended March 31, 2023, the Board met 10 times. The
meeting of the Board of Directors of the Company were held on May 13, 2022, May 23, 2022,
July 28, 2022, August 08, 2022, September 07, 2022, October 29, 2022, November 11, 2022,
December 09, 2022, December 16, 2022 and February 08, 2023.
Nomination and Remuneration Policy
The Company has formulated a Nomination and Remuneration Policy
pursuant to Section 178 of the Companies Act, 2013 and SEBI LODR Regulations. The salient
features of the Policy is enclosed as Annexure II to the Boards' Report.
Evaluation of the performance of the Board
Based on Boards' Evaluation Policy, the performance of the Board
Directors, its Committees, Chairman, Executive Directors, Independent Directors and
Non–executive Directors were evaluated pursuant to the Provisions of Companies Act,
2013 and SEBI LODR Regulations.
A separate meeting of Independent Directors was held during the year
under review wherein, the Independent Directors evaluated the performance of the
non-independent directors, the Board as a whole and the Chairman of the Company.
Internal Financial Controls and Risk Management
The Company has in place adequate internal financial control with
reference to financial statement. The Company ensures operational efficiency, protection
and conservation of resources, accuracy in financial reporting and compliance with laws
and regulations. The internal control system is supported by an internal audit process.
Pursuant to SEBI (Listing Obligation and Disclosure
Requirements) (Second Amendment) Regulations, 2021, the Risk Management
Committee was reconstituted to frame, implement and monitor the risk management policy for
the Company. The Committee shall be responsible for monitoring and reviewing the risk
management plan and ensuring its effectiveness. The Audit Committee has additional
oversight in the area of financial risks and controls. The major risks identified by the
businesses and functions shall be systematically addressed through mitigating actions on a
continuing basis.
Audit Committee
The Audit Committee presently comprises of:
Mr. K. Ramasubramanian - Independent Director (Chairman of the
Committee)
Mr. Rupen Patel – Chairman & Managing Director
Dr. Barendra Bhoi – Independent Director
Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to comply with the
principles of Business Responsibility and Sustainability Reporting (BRS reporting) as
amended by SEBI. The Policy provides a formal mechanism for director(s) /stakeholder(s) to
report concerns about unethical behavior, actual or suspected fraud or violation of the
Company's Ethics and Code of Conduct. The Policy is uploaded on the Company's
website at the link https://tinyurl.com/2sxkrt7t.
This Policy provides for adequate safeguards against victimization of
Director(s) /stakeholder(s) and provides opportunity to director(s)/ stakeholder(s) to
access in good faith, to the ABMS (Anti Bribery Management System) Committee in case they
observe Unethical and Improper Practices or any other wrongful conduct in the Company.
The vigil mechanism is overseen by the Audit Committee. There are no
complaints / grievances received from any Directors/ stakeholders of the Company under
this policy.
Corporate Social Responsibility
In accordance with the provisions of Section 135 of the Companies Act,
2013 (the Act), the Board of Directors of the Company has constituted the Corporate Social
Responsibility Committee (CSR Committee) comprising of the following Directors as its
members:
Mr. Rupen Patel – Chairman & Managing Director Ms. Kavita
Shirvaikar - Whole time Director & CFO Mr. K. Ramasubramanian - Independent Director
The Company's CSR Policy as uploaded on the Company's website
at the link: https://tinyurl.com/ptvdfbs3.
Pursuant to Clause (o) of Sub-Section (3) of Section 134 of the Act and
Rule 8 of Companies (Corporate Social Responsibility Rules, 2014, the CSR Report forms
part of the Board Report as Annexure III. The Company has initiated spending on CSR
activities as detailed in the CSR Report.
Statutory Audit
M/s Vatsaraj & Co. (FRN: 111327W), the Statutory Auditors of the
Company hold office until the conclusion of the 78th AGM to be held in the year 2027.
Pursuant to Section 141 of the Act, the Auditors have represented that they are not
disqualified and continue to be eligible to act as the Auditor of the Company.
The Notes on financial statement referred to in the Auditors'
Report are self-explanatory and do not call for any further comments. The Auditors'
Report does not contain any qualification, reservation, adverse remark or disclaimer.
Branch Audit
In accordance with the provisions of Section 139 and 143(8) of the Act,
M/s. N. H. Karnesh & Associates has been appointed as Branch Auditor for the Realty
Division of the Company for a term of 5 years to hold office until the conclusion of the
77th AGM to be held in the year 2026.
The Company has appointed M/s. R K Agrawal & Associates, as Branch
Auditor of the Company for Arun 3 H.E. Project, Nepal for FY 2022-23.
Secretarial Audit
The Board of Directors appointed M/s. MMJB & Associates LLP,
Company Secretaries to conduct Secretarial Audit of the Company for the financial year
ended March 31, 2023. The Report of the Secretarial Auditor is provided as Annexure IV to
this Report. The Secretarial Audit Report does not contain any qualification, reservation,
adverse remarks or disclaimer except 1 with respect to delay in prior intimation in terms
of Regulation 29(3) of SEBI LODR Regulations to the stock exchanges about the meeting of
the Board of Directors for considering proposal for alteration in terms of non-convertible
debentures issued by the Company. The shareholders may note that the Company had given 4
days prior notice instead of 11 days as per the SEBI LODR Regulations. BSE Limited and
National Stock Exchange of India Limited imposed a fine of 11,800 respectively for the
said non-compliance and the Company has paid the same.
Cost Audit
As per Section 148 of the Act, the Company is required to have the
audit of its cost records conducted by a Cost Accountant. The Board of Directors of the
Company has on the recommendation of the Audit Committee, approved the appointment of M/s.
Rahul Jain & Associates., a firm of Cost Accountants in Practice (Registration No.
101515) as the Cost Auditors of the Company to conduct cost audits under the Companies
(Cost Records and Audit) Rules, 2014 for the year ending March 31, 2023. The Board on
recommendations of the Audit Committee have approved the remuneration payable to the Cost
Auditor subject to ratification of their remuneration by the Members at the forthcoming
AGM. M/s Rahul Jain & Associates have, under Section 139(1) of the Act and the Rules
framed thereunder furnished a certificate of their eligibility and consent for
appointment.
The cost accounts and records of the Company are duly prepared and
maintained as required under Section 148(1) of Act.
Prevention of sexual harassment of Women at workplace
The Company has a Policy on Prevention of Sexual Harassment of Women at
Workplace. No cases were reported during the year under review. The Company has complied
with the provisions relating to the constitution of Internal Complaints Committee under
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings/ Outgo
The particulars prescribed under Section 134 of the Act, read with Rule
8 (3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy,
Technology Absorption, Foreign Exchange Earnings / Outgo is provided as Annexure V to this
Report.
Annual Return
Pursuant to Section 92 and 134 of the Act, the Annual Return as at
March 31, 2023 in Form MGT-7, is available on the website of the Company at the link
https://tinyurl.com/3zspdz4a.
Disclosure under Section 197 of the Companies Act, 2013
In accordance with the provisions of Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of the
employees are set out in the annexure to this Report. In terms of the provisions of
Section 136 of the Act, the Report is being sent to the Members of the Company excluding
the annexure. Any member interested in obtaining a copy of the annexure may write to the
Company Secretary at the Registered Office of the Company.
Further, disclosures on managerial remuneration as required under
Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are provided as Annexure VI to this Report.
Corporate Governance
Pursuant to SEBI LODR Regulations, the Report on Corporate Governance
together with the certificate issued by M/s. Vatsaraj & Co., the Statutory Auditors of
the Company, on compliance in this regard forms part of the Annual Report.
Employee Stock Option / General Bene_ts Scheme
The Company currently has two Schemes for its employees viz Patel
Engineering Employee Stock Option Plan 2007 and Patel Engineering General Employee
Benefits Scheme 2015.
The applicable disclosure under SEBI (share Based employee Benefits)
Regulations, 2014 ("the ESOP Regulations") as at March 31, 2023 is uploaded on
the Company's website at the link https://tinyurl.com/3dmuvhcu.
A Certificate from the Secretarial Auditors of the Company in terms of
Regulation 13 of ESOP Regulations would be available at the ensuing AGM.
Other Disclosures i) There are no_material changes and commitments
affecting the financial position of the Company which have occurred between the end of the
financial year of the Company to which the financial statements relate and the date of the
Boards' report.
ii) No orders have been passed by any Regulator or Court or Tribunal
which can have impact on the going concern status and the Company's operations in
future during the year under review.
iii) The Company has not accepted or renewed any amount falling within
the purview of provisions of Section 73 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement
for furnishing of details relating to deposits covered under Chapter V of the said Act or
the details of deposits which are not in compliance with the Chapter V of the said Act is
not applicable.
iv) The Company has complied with the Secretarial Standards issued by
the Institute of Company Secretaries of India.
v) No fraud has been reported by the Auditors, to the Audit Committee
and the Board.
vi) The Company has not initiated any proceeding under the Insolvency
and Bankruptcy Code, 2016 (IBC).
There are 7 proceedings initiated/pending against our Company under IBC
which does not materially impact the business of the Company. Out of 7 proceedings, 3
proceedings are settled and pending for disposal and withdrawal. 4 proceedings are
disputed and pending for hearing.
Directors' Responsibility Statement
Pursuant to Section 134 of the Companies Act, 2013, the Directors
con_rm that:
i. in preparation of the annual accounts, the applicable accounting
standards have been followed;
ii. such accounting policies have been applied consistently and
judgments and estimates that are reasonable and prudent have been made so as to give a
true and fair view of the state of affairs of the Company and of the Profit and Loss of
the Company for the year ended March 31, 2023;
iii. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
iv. the annual accounts have been prepared on a going concern basis;
v. internal financial controls were followed by the Company and the
same are adequate and were operating effectively; and vi. proper systems has been devised
to ensure compliance with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Acknowledgements
The Board of Directors wish to place on record their appreciation for
continued support and co-operation by Shareholders, Financial Institutions, Banks,
Government Authorities and other Stakeholders. Your Directors would also like to take this
opportunity to express their appreciation for the dedicated efforts of the employees of
the Company.
For and on behalf of the Board of Directors,
Patel Engineering Limited
|
Rupen Patel |
| May 15, 2023 |
Chairman & Managing Director |
| Mumbai |
DIN: 00029583 |
|