DEAR MEMBERS,
Your Directors are pleased to present the 43rd ANNUAL REPORT of Kalpataru Projects International Limited (formerly Kalpataru Power Transmission Limited) ("the Company") together with the Audited Financial Statements (standalone and consolidated) for the financial year ended March 31,2024.
FINANCIAL HIGHLIGHTS
(Rs in Crores)
* Profit for the year attributable to Owners of the Company
OPERATIONAL HIGHLIGHTS
During financial year 2023-24, the Standalone revenue of your Company increased by about 16.90% to H 16,759.66 Crores as against H 14,336.82 Crores in the previous financial year. Total revenue outside India was H4,941.09 Crores which is 29.48% of revenues.
The Standalone net profit for the year increased by 0.20% to H 533 Crores as against H 531.95 Crores in the previous financial year.
Your Company has a consolidated order book of more than H 58,400 Crores (including T&D subsidiaries) excluding fairly placed bids. Your Company has received orders in excess of H 30,000 Crores (including T&D subsidiaries) in the current financial year 2023-24.
The consolidated revenue of your Company increased by about 19.96% to H 19,626.43 Crores as against H 16,361.44 Crores in the previous financial year.
The consolidated net profit for the year increased by about 18.59% to H 515.90 Crores as against H 435.02 Crores in the previous financial year.
CHANGE OF NAME
The Board of Directors of the Company on April 10, 2023, approved the proposal for change in the name of the Company from the then existing name 'Kalpataru Power Transmission Limited' to 'Kalpataru Projects International Limited'. During the year under review, the proposal for the aforesaid change of name of the Company was approved by the members on May 14, 2023. Consequently, the Registrar of Companies, Ministry of Corporate Affairs, Ahmedabad issued "Certificate of Incorporation pursuant to change of the name of the Company" and effective May 22, 2023, the name of the Company stands changed to Kalpataru Projects International Limited.
AWARDS & RECOGNITIONS
Your Company has been honoured with various awards, accolades and recognitions during the year under review, some of which are elaborated hereunder:
• Manufacturing Plant in Gandhinagar: Gold Award at the National Safety Convention with theme of "Elevate, Empower & Envision a Safer Tomorrow" organised by Quality Circle Forum of India (QCFI), Gold Award in Innovative Category & Silver award in Renovative Category at 47th CII National Kaizen Competition 2023, GOLD Award for Six Sigma Project Case Study at Ahmedabad Chapter Convention on Quality Concepts organized by QCFI Ahmedabad, Silver award in NAMC - 2023 (National Awards for Manufacturing Competitiveness) Assessment organized by IRIM - International Research Institute for Manufacturing, Gold Award in National Level Lean Competition organized by CII
- Institute of Quality for project viz. One Plant One Location.
• Manufacturing Plant in Raipur: Multiple awards received from Quality Circle Forum of India, Silver recognition at the 7th National Lean Competition for project viz. Process improvement through LEAN (bending module), TPM Certificate 2023 for significant achievement in the journey towards manufacturing excellence.
• Biomass Power Plant in Rajasthan: Received State Safety Award-2023 from the Government of Rajasthan under Rajasthan Factory Safety Award Scheme, 2023.
• Transmission Lines & Substations: Multiple Gold Awards received from National Convention on Quality Concepts and Chapter Convention on Quality Control Circle by QCFI, Award by CII on case study "Challenges faced & solutions implemented while using HTLS Conductor in transmission line',' 2 Gold awards at the International Convention on Quality Circle Concept - ICQCC 2023, International Safety Award from British Safety Council for projects viz. WO 393
- Dubai Branch.
• Railways : Multiple awards including felicitation of Supervisors and Artisans at the 14th CIDC Vishvakarma Awards, Award for "Outstanding Contribution in Urban Infrastructure - Railway for Umdanagar Mahabubnagar Project of South Central Railway" at the 10th EPC World Awards, L&OD Excellence Awards at the 13th L&OD Summit.
• Oil & Gas: Business Unit Head was awarded with the title "Business Icon of the Year" at Outlook Business Spolight - Business Icon Awards 2023.
• Water: Gold Award for Quality Excellence by Apex India, Achievement award for the Best Construction Project and multiple awards under category Construction, Health, Safety & Environment for various projects at the 14th CIDC Vishwakarma Awards 2023, Bronze Award for Health & Safety from the Royal Society for the Prevention of Accidents (ROSPA), United Kingdom, Multiple certificates under Har Ghar Jal Jeevan Mission for supply of safe tap water to more than 2 lakh houses in 580 villages.
• Buildings & Factories: Multiple appreciations received from various clients for safe working hours achieved at various project sites, Various awards at the 6th Global Smart Build Summit and Awards viz. "Best Contractor of the Year" Award, "Best High Risk Project of the Year" Award, "Best Smart Commercial Property of the Year" & "Best Smart Project of the Year','ACCE(I) - L&T Formwork Award 2023 for best use of formwork in civil engineering for construction of permanent campus for IIT Tirupati, Suraksha Puraskar for Project IIT - Tirupati at the NSCI Safety Awards - 2022, Multiple awards by Unnatha Suraksha Puruskar for various projects at the National Safety Council Karnataka Chapter, Award for "Safe Construction Project of the Karnataka State" by the Director of Factories, Government of Karnataka for Sparkle One Mall, International Safety Award from British Safety Council for projects viz. Labzone Bengaluru Life Sciences Park, Maldives Social Housing Project, DLF-3 Down-Town, Chennai, Multiple awards under category "Best Construction Project" for the projects viz. Bagmane Rome, Bangalore, IIT Tirupati - Phase 1, Chennai, Indis VB City, Hyderabad, Prestige Falcon City Forum Mall, Bangalore, Viva City, Bangalore and category "Construction, Health, Safety & Environment for various other projects at the 14th CIDC Vishwakarma Awards 2023, Multiple awards by RoSPA for Prevention of Accidents under gold category for the project viz. KPILDLF Info Park Developers (Chennai) Limited, KDPL Mall Project.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF YOUR COMPANY
There are no material changes and commitments, affecting the financial position of your Company which has occurred between end of financial year 2023-24 and the date of Board's Report.
DIVIDEND
Your Directors are pleased to recommend dividend on the paid-up equity share capital base of the Company for the year ended March 31, 2024 @ H 8/- (400%) per equity share of H 2/- each fully paid up (previous year H 7 (350%) per fully paid up equity share). The total dividend payment for FY 2023-24 would be approx. H 129.96 Crores on the share capital base of 16,24,46,152 equity shares as against the previous year dividend payment of H 113.71 Crores on the equity shares of the Company. The final dividend payment for the FY 2023-24 is in accordance with the Dividend Distribution Policy of the Company and the same shall be paid subject to the deduction of tax in applicable cases once approved by the members of the Company at the ensuing Annual General Meeting.
DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), your Company has formulated Dividend Distribution Policy and the same is also available on the website of the Company at https://kalpataruproiects.com/api/view-file/Dividend- Distribution-Policy.pdf
The Board of Directors of your Company have recommended dividend within the parameters of the Dividend Distribution Policy. There was no change in Dividend Distribution Policy during the year under review.
NON-CONVERTIBLE DEBENTURES
During the year under review, the Company has redeemed Non- Convertible Debentures (NCDs) worth H 225 Crores.
Also during the year, your Company has issued and allotted (i) 30,000 Nos. 8.07% Unsecured, Rated, Listed, Redeemable NCDs of the face value of H 1,00,000/- (Rupees One Lakh Only) each, for an aggregate nominal value of H 300,00,00,000/- (Rupees Three Hundred Crores Only) (ii) 15,000 Nos. Repo Rate linked Unsecured, Rated, Listed, Redeemable NCDs of the face value of H 1,00,000/- (Rupees One lakh Only) each, for an aggregate nominal value of H 150,00,00,000/- (Rupees One Hundred Fifty Crores Only) and (iii) 15,000 Nos. 8.32% Unsecured, Rated, Listed, Redeemable NCDs of the face value of H 1,00,000/- (Rupees One Lakh Only) each, for an aggregate nominal value of H 150,00,00,000/- (Rupees One Hundred Fifty Crores Only) on private placement basis. The said NCDs are listed on Wholesale Debt Market Segment of BSE Limited. Further, the Company has fully utilized the proceeds of issue of said NCDs for the purposes as mentioned in the Information Memorandum, General Information Document and Key Information Documents, as applicable.
As on March 31, 2024, the total outstanding NCDs stands at H 10,23,00,00,000/- (Rupees One Thousand Twenty Three Crores Only) comprising (i) 3,230 NCDs of the face value of H 10,00,000/- (Rupees Ten Lakh Only) each (ii) 2,000 NCDs of the face value of H 5,00,000/- (Rupees Five Lakh Only) each and (iii) 60,000 NCDs of the face value of H 1,00,000/- (Rupees One Lakh Only) each.
TRANSFER TO RESERVES
Your Company has transferred following amounts to various reserves during the financial year ended March 31, 2024 :
PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the year under review, Kalpataru Power Do Brasil Participacoes Ltda. (KPBPL), wholly owned subsidiary of the Company acquired balance 49% equity stake in Fasttel Engenharia S.A. (Fasttel) on July 10, 2023. Consequent thereto, Fasttel has now become a wholly owned subsidiary of KPBPL and also a step-down wholly owned subsidiary of the Company.
As at March 31, 2024, your Company had 24 (twenty four) subsidiaries and 1 (one) joint venture company. In addition, your Company also held 26% equity share capital of Kohima Mariani Transmission Limited and Alipurduar Transmission Limited.
As at March 31, 2024, none of the subsidiaries of the Company qualifies to be considered as Material Subsidiary as per the Listing Regulations and Company's policy on determining Material Subsidiary.
A statement containing salient features of financial statements of subsidiaries, associates and ioint venture companies in terms of provisions of Section 129(3) of the Companies Act, 2013 in the prescribed Form AOC-1 is annexed to Consolidated Financial Statements and hence not repeated here for the sake of brevity.
The brief details of the activities carried out by some of the subsidiaries of your Company is provided below.
• Shree Shubham Logistics Limited ("SSLL'):
SSLL provides agri-storage infrastructure along with a wide range of value-added services like preservation, maintenance & security (PMS), testing & certification, collateral management & pest control activities. It manages and operates warehouses (Owned, Hired, Third Parties and Public Private Partnership (PPP) model) across 6 Indian states namely Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Haryana & Karnataka. SSLL is having revenue sharing agreement with Rajasthan State Warehousing Corporation. Further, it has been appointed as a service provider by Maharashtra State Warehousing Corporation, Haryana State Warehousing Corporation and Haryana State Co-operative Supply and Marketing Federation Limited for preservation, maintenance and security (PMS) of food grains. Apart from this, it has got various corporates, banks, retail, traders and farmers as its customers.
In aggregate, SSLL is managing more than 400 warehouses with a total storage capacity exceeding 11 million sft. SSLL is a wholly owned subsidiary of your Company.
• Linjemontage I Grastorp AB ("LMG"):
LMG, a Swedish EPC company headquartered in Grastorp, Sweden, along with its two wholly owned subsidiaries, is a step-down wholly owned subsidiary of the Company (through Kalpataru Power Transmission Sweden AB).
During the year under review, LMG along with its two subsidiaries has bagged highest ever orders of approx. USD 198 Million. It has an all time high order book of approx. USD 247 Million as on March 31, 2024. It has achieved a revenue of approx USD 124 Million and a margin of USD 2.5 Million. Further, it is now one of the key players in the EPC market in the area of Substations, Transmission lines and has also strengthened its position in the industrial area. LMG has operations in Norway and during the year under review, it has opened a branch in Croatia as well. It has also entered into the 400kV Substation business in Sweden securing a large order from Swedish Grid (Svenska Kraftnat). LMG remains the operator of choice to its existing customers.
• Fasttel Engenharia S.A. ("Fasttel"):
Fasttel is a wholly owned step-down subsidiary of the Company (through Kalpataru Power Do Brasil Participacoes Ltda.). Fasttel was incorporated in 1988 and is headquartered in Curitiba, Brazil with primary business areas of EPC of Substations, Transmission lines and Power Distribution services. It has a presence in more than 20 states across Brazil, having built over 3000 km of transmission lines and 60 substations for various voltage ranges up to 750 kV It has completed 782 km transmission lines during FY 23-24, out of which it has completed 364 km for 500 kV transmission line. Further, it has commissioned below major sub- stations during FY 24:
i) 138 kV outdoor GIS Substation, completed in 9 months.
ii) 2x 500 kV, 300 MVA Substation delivered for wind power.
iii) 230 kV Tucuma & Rio Branco, 238 Kv Substation
Fasttel is well poised for its future growth with an order book exceeding USD 177 million as on March 31,2024.
• Kalpataru IBN Omairah Contracting Company Limited ("KIOCL'):
KIOCL is a joint venture of the Company with IBN Omairah Contracting Company Limited in the Kingdom of Saudi Arabia wherein the Company is holding 65% equity shares of KIOCL. During the year under review, KIOCL had four projects under construction, out of which 2 nos. of 380 kV Double Circuit, 1 no. of 115 kV Double Circuit and 1 no. of 110 kV Double Circuit overhead transmission line and associated Bay extensions. The Projects are progressing well and are expected to be completed as per schedule. During the year under review, the 380 kV Double Circuit project has been awarded with the prestigious RoSPA Gold Award for the highest Health & Safety performance.
• Kalpataru Power Transmission Chile SpA ("KPCSA"):
KPCSA is a wholly owned subsidiary of the Company in Chile. Currently, KPCSA has two contracts awarded to it in Chile for (a) HDVC Transmission Line (b) LA Negra New
Sectioning Substation for 220/110 kV. The HDVC Transmission Line project is in its Design & Engineering and clearance stage which are progressing well. LA Negra New Sectioning Sub Station for 220/110 kV project is under its final stages of physical completion. KPCSA is strengthening its team for the successful execution of the contracts and enhancing its capabilities in the market.
Pursuant to provisions of Section 129 of the Companies Act, 2013, your Company shall place Consolidated Financial Statements before its members for their approval. Further, pursuant to provisions of Section 136 of the Companies Act, 2013, your Company will make available the Annual Accounts of the Subsidiary Companies and the related information to any Members of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies are also uploaded on the website of the Company i.e. https://kalpataruproiects.com/investors/financials/annual- reports/financials-of-subsidiaries and will also be kept open for inspection at the Registered Office of your Company and that of the respective Subsidiary Companies.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Audited Consolidated Financial Statements for the year under review pursuant to Companies Act, 2013 and Listing Regulations. The Consolidated Financial Statements presented by your Company have been prepared as per Ind AS and include the Financial Statements of its Subsidiary Companies, Associates and Joint Venture Companies.
DIVESTMENT / MONETIZATION OF TRANSMISSION LINE SPV's
Your Company, in terms of the agreement has sold and transferred in tranches in aggregate 74% equity shares of Alipurduar Transmission Limited to Adani Transmission Limited with an agreement to sell the balance 26% to it, after obtaining requisite regulatory and other approvals and in a manner consistent with the Transmission Service Agreement.
Further, your Company has also sold and transferred in tranches in aggregate ~48% equity shares of Kohima-Mariani Transmission Limited to Apraava Energy Private Limited (formerly known as CLP India Private Limited) with an agreement to sell the balance 26% to it, after obtaining requisite regulatory and other approvals and in a manner consistent with the Transmission Service Agreement.
DIRECTORS
As on March 31, 2024, your Board comprises of 9 Directors including 5 Independent Directors, 2 Executive Directors and 2 Non-Executive Non-Independent Directors.
During the year under review, Mr. Sajjanraj Mehta, Mr. Vimal Bhandari and Mr. Narayan Seshadri, Independent Directors of the Company retired as members of the Board of Directors on account of completion of their second and final term effective March 31,
2024. The Board placed on record its deep sense of appreciation for the services rendered by them and their invaluable contribution in the growth journey of the Company.
Additionally, Mr. Sanjay Dalmia (DIN: 03469908), Executive Director, will continue to drive the international operations of the Company but has stepped down from the board (effective from March 28, 2024) due to the regulatory requirements for composition of the board and accordingly, his designation will continue as Executive Director (non-board position).
Further, during the year under review, your Company at the recommendation of the Nomination and Remuneration Committee appointed Mr. Dhananjay Mungale (DIN: 00007563) and Mr. Bimal Tanna (DIN: 06767157) as Additional Directors designated as Independent Directors of the Company for a term of 5 consecutive years commencing from April 01, 2024 upto March 31, 2029, subject to approval of the shareholders. In this regard, the proposal for obtaining approval of shareholders has been circulated through postal ballot notice dated April 08, 2024.
Accordingly, with effect from April 01,2024, your Board comprises of 8 Directors including 4 Independent Directors, 2 Executive Directors and 2 Non-Executive Non-Independent Directors.
Your Company has received declarations from all the Independent Directors confirming that (i) they meet with the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and under Regulation 16(1)(b) of the Listing Regulations (ii) they continue to comply with the Code of Conduct laid down under Schedule IV of the Act and (iii) they have registered their names in the Independent Director's Databank. Further, pursuant to Section 164(2) of the Companies Act, 2013, all the Directors have provided declarations in Form DIR- 8 that they have not been disqualified to act as a Director. Also your Board is of the opinion that the Independent Directors of the Company including the newly appointed Independent Directors possess integrity, requisite expertise, experience and proficiency and the details thereof are given in the Corporate Governance Report.
In terms of Section 152 of the Companies Act, 2013, Mr. Parag Munot (DIN: 00136337), being the longest serving Director, shall retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment. The Board of Directors of the Company at the recommendation of Nomination and Remuneration Committee has recommended for his re-appointment.
A brief resume of Mr. Parag Munot, being re-appointed as a Director liable to retire by rotation along with the nature of his expertise, his shareholding in your Company and other details as stipulated under Regulation 36 (3) of the Listing Regulations is appended as an annexure to the Notice of the ensuing Annual General Meeting.
BOARD MEETINGS
During the year under review, the Board met 5 times on May 08, 2023, August 11, 2023, November 02, 2023, February 07 2024 and March 27 2024.
The number of meetings of the Board that each Director attended is provided in the Report on Corporate Governance, appended to, and forming part of, this Report.
COMMITTEES
In order to adhere to the best corporate governance practices, to effectively discharge its functions and responsibilities and in compliance with the requirements of applicable laws, your Board has constituted several Committees including the following:
• Audit Committee
• Nomination and Remuneration Committee
• Stakeholder's Relationship Committee
• Corporate Social Responsibility Committee
• Risk Management Committee
• Share Transfer Committee
• Executive Committee
On account of cessation of the second and final term of Mr. Sajjanraj Mehta, Mr. Vimal Bhandari and Mr. Narayan Seshadri, Independent Directors, the Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee have been reconstituted.
The details with respect to such changes in committee compositions, powers, roles, terms of reference etc. of relevant Committees are given in detail in the 'Report on Corporate Governance' of your Company which forms part of this Report. The dates on which meetings of Board Committees were held during the financial year under review and the number of Meetings of the Board Committees that each Director attended is provided in the 'Report on Corporate Governance'. The minutes of the Meetings of all Committees are circulated to the Board for discussion and noting.
During the year, all recommendations of the Committees were accepted by the Board.
KEY MANAGERIAL PERSONNEL (KMP)
Mr. Manish Mohnot, Managing Director & CEO, Mr. Shailendra Kumar Tripathi, Dy. Managing Director, Mr. Ram Patodia, Chief Financial Officer and Ms. Shweta Girotra, Company Secretary are the Key Managerial Personnel (KMPs) as per provisions of
Companies Act, 2013. There has been no change in KMP during the year under review.
CORPORATE GOVERNANCE
Implementation of effective corporate governance practices constitute the strong foundation on which successful commercial enterprises are built to last. The Company's philosophy on corporate governance oversees business strategies and ensures fiscal accountability, ethical corporate behavior and fairness to all stakeholders comprising employees, investors, customers, regulators, suppliers and the society at large. Strong leadership and effective corporate governance practices have been the Company's hallmark inherited from the Kalpataru culture and ethos.
Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India.
The Report on Corporate Governance, as stipulated under Regulation 34 of the Listing Regulations is attached. The Report on Corporate Governance also contains certain disclosures required under Companies Act, 2013 for the year under review.
A certificate from M/s. B S R & Co. LLP Statutory Auditors of the Company confirming compliance to the conditions of Corporate Governance as stipulated under Listing Regulations is annexed to the Report on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS
As per Regulation 34 of the Listing Regulations, a separate section on Management Discussion and Analysis Report outlining the business of your Company forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
As on March 31, 2024, the CSR Committee consisted of Mr. Sajjanraj Mehta as Chairman, Mr. Mofatraj FI Munot, Mr. Parag Munot and Mr. Manish Mohnot as members of the Committee.
With completion of the tenure of Mr. Sajjanraj Mehta on March 31, 2024, the Corporate Social Responsibility (CSR) Committee was reconstituted and Dr. Shailendra Raj Mehta, Independent Director was appointed as Chairman of the CSR Committee effective April 01, 2024.
Accordingly, with effect from April 01, 2024, the CSR Committee comprises Dr. Shailendra Raj Mehta as Chairman, Mr. Mofatraj P Munot, Mr. Parag Munot and Mr. Manish Mohnot as Members of the Committee.
Your Company has been committed to the welfare of the communities through philanthropic interventions even before the provisions of Companies Act, 2013 made it mandatory. In order to leverage the demographic dividend, the Company has been focusing on social issues of Healthcare, Education, Skilling/Livelihood, Animal Welfare, Environment and Community development by undertaking need based initiatives. The Company implemented some innovative and sustainable initiatives for the marginalized and vulnerable communities around the Plant locations in Gandhinagar, Raipur & Biomass power plants along with remote project site locations across India. These projects were aligned to Schedule VII of the Companies Act and the United Nation's Sustainable Development Goals and have strived towards achieving scalable impact, outcomes and outputs in the community. The initiatives were implemented either directly or through Kalpatraru Foundation and Kalpataru Welfare Trust.
Your Company has formed a CSR Committee as per the requirement of the Companies Act, 2013. On recommendation of the CSR Committee, the Board of Directors' of your Company has approved a CSR Policy which is available on the website of your Company at https://kalpataruproiects.com/api/view-file/ Corporate%20Governance policies%20&%20Guidelines CSR%20Policy.pdf. The brief outline of the Corporate Social Responsibility (CSR) Policy of your Company and the Annual Report on CSR activities undertaken during the year as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) are set out in Annexure A of this report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of Regulation 34 of the Listing Regulations read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report" ('BRSR'). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct". Your Company has published 2nd BRSR for FY 2023-24. The BRSR forms an integral part of the Annual Report.
VIGIL MECHANISM
The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company has a vigil mechanism (whistle-blower-policy) under which the employees, vendors and any other person are free to report violations of applicable laws and regulations and the Code of Conduct of the Company. The reportable matters may be disclosed to the Chief Ethics Officer and Anti Bribery Management System Committee which operates under the supervision of the Audit Committee. Further, the functioning of the vigil mechanism is being monitored by the Audit Committee from time to time. The whistle blower may also report violations to the Chairman of the Audit Committee in exceptional cases. During the year, no employee/person was denied access to the Audit Committee.
The Whistle Blower Policy has been disclosed on the Company's website https://kalpataruproiects.com/api/view-file/Whistle- Blower-Policy-November-2021.pdf
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Internal Financial Controls are an integrated part of the risk management process, addressing financial risks and financial reporting risks. The Board has adopted policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.
Assurance on the effectiveness of internal financial controls is obtained through management reviews, continuous monitoring by functional experts and testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively considering the nature of our industry and are operating as intended.
STATUTORY AUDITORS AND AUDITORS' REPORT
The Board of Directors at its meeting held on 08th May, 2023 and the Shareholders at the Annual General Meeting (AGM) held on 17th July, 2023 considering the experience and expertise and on the recommendation of the Audit Committee approved the re-appointment of M/s. B S R & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for the second term of 5 (five) consecutive years i.e. from the conclusion of 42nd AGM till the conclusion of the 47th AGM of the Company to be held in the year 2028.
The Statutory Auditors of the Company have issued Audit Reports on the Standalone and Consolidated Annual Financial Statement of the Company with unmodified opinion. There were no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditors in their reports on the Standalone Annual Financial Statements.
The explanations of your Board of Directors in relation to remarks appearing in para (xxi) of Annexure A to Independent Auditor's Report under Companies (Auditor's Report) Order, 2020 (CARO) issued by Statutory Auditors of the Company on consolidated financial statements as a result of remarks by respective statutory auditors of Kurukshetra Expressway Private Limited ("KEPL' or "Concessionaire"), a joint venture of the Company and Shree Shubham Logistics Limited ("SSLL'), Wholly Owned Subsidiary of the Company, are as under:
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013, your Company had appointed Mr. Urmil Ved, Practising Company Secretary, Gandhinagar, as its Secretarial Auditor to conduct the Secretarial Audit of your Company for FY 2023-24. The Report of the Secretarial Auditor for the FY 2023-24 is annexed to this report as Annexure B. There were no qualifications, reservations or adverse remarks or disclaimers made by the Secretarial Auditor in its report.
COST AUDITOR AND COST ACCOUNTS
In terms of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the Company is required to maintain cost records in respect of its tower manufacturing, electricity, roads & infrastructure and construction activity and have the cost records audited by a qualified Cost Accountant.
The Company has made and maintained cost records as specified by the Central Government under Section 148(1) of Companies Act, 2013 and such records have been audited by the Cost Auditor pursuant to Companies (Cost Records and Audit) Rules, 2014.
Based on the recommendation of the Audit Committee, the Board of Directors of the Company has approved appointment of, and remuneration payable to, M/s. K. G. Goyal & Associates, Cost Accountants (Firm Registration No. 000024) as the Cost Auditor of the Company to audit the cost records for FY 2024-25.
RISK MANAGEMENT FRAMEWORK
Your Company has constituted a Risk Management Committee (RMC) as per the statutory requirement. The Company has formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment. The Risk Management Committee undertakes risk assessment and minimization procedures and recommend the same to the Board of Directors.
During the year under review, the Risk Management Committee was reconstituted on account of changes in board composition. Accordingly, consequent to Mr. Sanjay Dalmia, Executive Director, stepping down from the board (effective March 28, 2024), he continues to serve as a member of the Risk Management Committee in his capacity as Executive Director (non-board position). Additionally, with effect from March 28, 2024, Mr. Narayanan Neelakanteswaran Dy. President (Project Controls) ceased to be a member of the Committee and Dr. Shailendra Raj Mehta, Independent Director, was inducted as a member of the Committee with effect from March 29, 2024. Furthermore, consequent to the cessation of the final term as Independent Director of Mr. Narayan Seshadri, he ceased to be the Chairman of the Risk Management Committee effective March 31, 2024 and Mr. Bimal Tanna, Independent Director, was inducted as the Chairman of the Committee effective April 01, 2024.
The Board periodically reviews Company's Risk Management Frame work taking into consideration the recommendations of the Risk Management Committee and the Audit Committee.
Your Company has an elaborate Risk Management Framework, which is designed to enable risks to be identified, assessed and mitigated appropriately. Your Company monitors, manages and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. Your Company's SOP's, organizational structure, management systems, code of conduct, policies and values together govern how your Company conducts its business and manage associated risks. Your Company also has a separate Bribery Risk assessment framework which also defines the key mitigation actions.
The Risk Management framework enables the management to understand the risk environment and assess the specific risks and potential exposure to the Company, determine how to deal best with these risks to manage overall potential exposure, monitor and seek assurance of the effectiveness of the management of these risks and intervene for improvement where necessary and report throughout the organization structure and upto the Risk Management Committee on a periodic basis about how risks are being monitored, managed, assured and improvements are made.
More details in respect to the risk management are given in the section on Management Discussion and Analysis forming part of this Annual Report.
PARTICULARS OF REMUNERATION
A. The ratio of the remuneration of each director to the median employees' remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 ('the Act') read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, are forming part of this report as Annexure C1.
B. In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.
Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said Annexure is open for inspection at the Registered office of your Company. Any member interested in obtaining copy of the same may write to the Company Secretary.
PERFORMANCE EVALUATION
In compliance with the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out the annual performance evaluation of its own, the Non-Independent and Independent Directors individually as well as the evaluation of the working of various Committees at their Meetings held on 08th May, 2024 in the manner prescribed in the performance evaluation policy. While doing performance evaluation of Independent Directors, the Director being evaluated had not participated.
The evaluation of the Independent Directors were made on the basis of attendance at the meetings of the Board, Committees and General Meeting, knowledge about the latest developments, contribution in the Board development processes, participation in the Meetings and events outside Board meetings, expression of views in best interest of the Company, assistance given in protecting the legitimate interests of the Company, employees and investors, extending individual proficiency and experience for effective functioning and operation of the Company etc.
The criteria for performance evaluation and the statement indicating the manner in which formal annual evaluation of the Board, its Committees and of individual Directors has been made are also reproduced in the "Report on Corporate Governance", which forms part of this Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR
Your Company's policy on remuneration for the Directors', Key Managerial Personnel and other employees is placed on website of the Company at https://kalpataruproiects.com/api/view-file/Policy- on-Remuneration-for-Directors-KMPs-and-Other-Employees.pdf. This Policy is directed towards establishing reasonable and sufficient level of remuneration to attract, retain and motivate Directors & employees of the quality required to run the Company successfully. This Policy is in consonance with existing industry practice. There has been no change in the said Policy during the year under review.
Your Company's policy on Directors' appointment including criteria for determining qualifications, positive attributes, independence of a director is placed on the website of the Company at https://kalpataruproiects.com/api/view-file/Corporate%20 Governance policies%20&%20Guidelines Policy%20on%20 Directors%20Appointment%20including%20criteria%20for%20 determining%20Qualifications.%20Positive%20Attributes.pdf. This Policy sets out the guiding principles for the Nomination and Remuneration Committee to identify persons who are eligible to be appointed as Directors and to determine the independence of a candidate at the time of considering his/her appointment as an Independent Director of the Company. The Policy also provides for the criteria and qualification in evaluating the suitability for appointment as Director and in Senior Management that are relevant for the Company's operations. There has been no change in the said Policy during the year under review.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
Information required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure D and forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company is in compliance with the provisions of Section 186 of the Companies Act, 2013. The particulars of loans given, investments made, guarantees given and securities provided are given in the Standalone Financial Statements (Please refer to Note No. 37 to the Standalone Financial Statements).
ANNUAL RETURN
The Annual Return of the Company as on March 31, 2024 is available on the website of Company i.e. https://kalpataruproiects. com/investors/investor-information/annual-return
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions or which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014.
Your Company takes prior omnibus approval from the Audit Committee for related party transactions which are of repetitive nature and/or entered in the ordinary course of business and are at an arm's length basis.
There has been no change in the Related Party Transactions Policy during the year under review. The policy on materiality of Related Party Transactions is uploaded on the website of your Company and the link for the same is provided in the 'Report on Corporate Governance'. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large.
Attention of Members is drawn to the disclosure of transactions with related parties set out in Note No. 40 of the Standalone Financial Statements, forming part of the Annual Report.
DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has zero tolerance towards any action of any executive which may fall under the ambit of 'Sexual Harassment' at workplace and is fully committed to uphold and maintain the dignity of every women working in your Company. The Anti Sexual Harassment Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints.
Your 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. The Company received one complaint during the year under review which was satisfactorily resolved. There were no complaints pending as on the beginning and end of the financial year.
ANTI-BRIBERY MANAGEMENT SYSTEM
As an organization, your Company places a great importance in the way business is conducted and the way each employee performs his/her duties. Your Company encourages transparency in all its operations, responsibility for delivery of results, accountability for the outcomes of actions, participation in ethical business practices and being responsive to the needs of our people and society. Towards this end, your Company has laid down a Kalpataru Code of Conduct ("KCoC") applicable to all the employees of your Company. The Code provides for the matters related to governance, compliance, ethics and other matters. Your Company has adopted strong anti-bribery anti-corruption policy and practices and has also been certified with ISO 37001 for establishing Anti Bribery Management System in respect of certain business areas.
STATEMENT OF DIRECTORS' RESPONSIBILITY
Pursuant to requirement under Section 134(3)(c) of the Companies Act, 2013 ('the Act'), your Directors' confirm that:
(a) in the preparation of the annual accounts for the year ended on March 31, 2024, the applicable accounting standards have been followed and there are no material departures from the same;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the profit of the Company for the year ended on that date;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the annual accounts on a going concern basis;
(e) they, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during Financial Year 2023-24.
Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
SECRETARIAL STANDARDS
Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by The Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
DISCLOSURE OF PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
There were two proceedings initiated / pending against the Company during the year under review, filed under the provisions of Section 9 of the Insolvency and Bankruptcy Code, 2016, in aggregate involving about INR 4.6 Crores. Both the matters were disposed / dismissed, in favour of the Company, during the year under review.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:
• Details relating to deposits covered under Chapter V of the Companies Act, 2013.
• Issue of equity shares with differential rights as to dividend, voting or otherwise.
• Issue of shares (including sweat equity shares) to employees of the Company under any scheme or any stock options scheme.
• Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
• The Statutory, Secretarial and Cost Auditors have not reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Board's report. •
• There has been no change in the nature of business of the Company.
• There is no proceeding pending under The Insolvency and Bankruptcy Code, 2016.
• There was no instance of onetime settlement with any bank or financial institution.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all the government and regulatory authorities, financial institutions, banks, debenture holders and debenture trustee, JV partners, consortium partners, customers, vendors, suppliers, sub-contractors and members and all other stakeholders for their valuable continuous support.
The Board of Directors wish to place on record its sincere appreciation for the committed and loyal services rendered by the Company's executives, staff and workers. Your Directors also appreciate and acknowledge the confidence reposed in them by members of the Company.