General Meeting by Shri Sanjay Gupta - Engineers...
Transcript of General Meeting by Shri Sanjay Gupta - Engineers...
th19 September, 2017Engineers India Limited, EIL Office Complex
Sector-16 (NH-8), Gurugram, Haryana
Statement to Shareholders at the
nd52 AnnualGeneral Meetingby
Shri Sanjay GuptaChairman & Managing Director
Engineers India Limited
"Your company was able to secure orders
worth `5708 Crores during this fiscal. For the first time
since inception the order booking in both the consultancy
and EPC/OBE segments touched their historical
high in a single financial year".
ndStatement to Shareholders at the 52 Annual General Meetingby
Shri Sanjay GuptaChairman & Managing Director
T
Dear Shareholders,
On behalf of the Board of Directors of Engineers India Limited, I extend a very warm welcome to all of you at this 52nd Annual General Meeting of your company. It is my privilege and pleasure to talk about your Company’s performance and the achievements during the previous financial year 2016-17. Your company is engaged in the preeminent role of driving the growth of the hydrocarbons sector in India, and is a key contributor to the nation’s hydrocarbon growth story and in realising the Hon’ble Prime Minister’s cherished vision of reducing import dependency and enhancing energy security.
Today, we can proudly proclaim that there is hardly a page in
the Nation’s growth story in hydrocarbon and metallurgy
sector that is untouched by your company’s engineering
efforts. From fuels to plastics, metallurgy to infrastructure,
nuclear to defence, your company’s contribution is
ubiquitous to our country’s growth story. Coming to the
domestic economic scenario, India remains a ray of hope
amidst a global economic environment characterised by slow
growth, subdued demand and volatility. Various international
agencies have time and again vouched for the nation’s GDP
growth as being one of the most attractive and fastest
growing in the world. Your company is committed to play a
pivotal role in India’s growth and in shaping its socio-
economic and energy landscape.
Before I proceed wi th shar ing your company’s
accomplishments during the fiscal, with your kind
permission, I take the Annual Report containing the Audited
Accounts, the Directors' Report and the Auditors' Report,
which have already been circulated to you, as read.
And as we are all aware, the country continues to remain a
bright spot in terms of its economic growth prospects which
is expected to continue in the medium to long-term. The
International Monetary Fund (IMF) has forecast the Indian
economy to grow at 7.2% in FY 2017-18, up from 6.8% in FY
2016-17.
The Indian economic activity is expected to expand after a
brief slowdown due to various domestic and international
factors and is expected to rise to about 8% over the medium
term due to implementation of key reforms, reduction in
supply-side bottlenecks, and appropriate fiscal and monetary
policies. A major structural tax reform in the form of the
recently approved nationwide Goods and Services Tax (GST)
is bound to spur GDP growth by an incremental 1-2 % going
forward. As a result of this growth momentum, your
company envisages good business opportunities in its core
hydrocarbons sector as well as in the diversified areas of
operations where it can leverage its core competencies to
gain competitive advantage and create value for its clients.
Economic Environment and Outlook
The global economic activity was a mixed bag during
FY 2016-17 with lackluster first half and gradual
improvement of economic activities in the second half of the
financial year. This has resulted in positive and encouraging
economic growth forecast for financial year 2017-18. These
improved prospects for global economy are also indicated by
the World Economic Outlook as well. With the economic
activity picking up and a long-awaited cyclical recovery in
investment, manufacturing, and trade, on the horizon, world
growth is expected to rise from 3.1% in 2016 to 3.5% in 2017
and 3.6% in 2018. It is expected that buoyant activity will
provide a stimulus to emerging and developing economies
that have lagged behind due to tight financial conditions to
grow at a decent pace.
The Indian economy has grown at a strong pace in recent
years owing to the implementation of critical reforms,
favourable terms of trade and lower external vulnerabilities.
7.8 MMPTA and EPCIM Service for LPG Impot facility at Haldia
for BPCL.
Your company has been involved in the establishment of a
large number of mega petrochemical complexes in India.
The company has provided engineering consultancy services
for various processes including Gas based/Naphtha based
cracker complexes and Aromatic plants. During the financial
year, Dahej Petrochemical Complex of ONGC Petro additions
Limited (OPaL), was commissioned and dedicated to the
nation by Hon’ble Prime Minister of India Shri Narendra Modi
on March 7, 2017. Significant progress has been made on
Propylene Derivative Petrochemical Plant of BPCL Kochi
Refinery comprising Acrylic Acid Unit, Oxo-Alcohol Unit and
Acrylates Unit.
Country’s energy security is of prime importance and thereby
critical storage of crude oil and gas resources has to be
created to ensure against disruption of supplies from abroad.
This fact has been amply recognized by the Government of
India which is implementing the Strategic Crude Oil Storage
Programme to augment India’s energy security by creating a
buffer stock. Your company is an active partner in this
strategic programme and is providing PMC services to Indian
Strategic Petroleum Reserves Limited (ISPRL) for
construction of underground unlined rock cavern storages in
Vishakhapatnam, Mangalore and Padur having a total
capacity of 5.33 MMT. During the year, Mangalore storage
has been commissioned while Padur storage has been
mechanically completed. The Mangalore-Padur Pipeline
work and 110 KV HT line works are in progress and shall be
completed this year.
Your company completed key metallurgy assignments
pertaining to Consultancy services for swing unit feasibility
study and rectifier system study of 220 KV switchyard
systems at Smelter-1 of Vedanta Limited and scoping study
for Structural Integrity at Hindalco, Renukoot among others.
In Infrastructure sector, your company is making strong
footholds by providing a wide spectrum of services. Projects
completed in this fiscal include Preparation of Smart City
proposals for Moradabad, Rampur and Rae Bareli,
Consultancy services for preparation of Master Plan and DPR
for development of Vijayawada Airport to International
Standards and Master Plan for Rajkot Airport. In the Water
and Waste Management segment, your company completed
the Condition Assessment and Feasibility Study of Sewerage
Infrastructure in 38 towns under the Namami Gange
Programme and is currently executing entry level activities
including development of Ghats and Crematoriums within
the state of Uttar Pradesh and Implementation of Sewerage
Infrastructure works at Mathura in addition to other jobs.
As part of strategic diversification in the Fertilizer sector,
your company has taken 26% equity stakes in a joint venture
company, in revival of Ramagundam Fertilizers and
I am pleased to inform that your company has taken the lead
and is geared up for its operations in this new tax regime.
Performance Highlights
The financial results have been covered in depth and details
are available on both the print and digital media. Let me share
with you the key highlights of the year:
Ÿ Total Income during the year was ` 1672 crores, of
which revenues from Consultancy & Engineering
Services was ̀ 1165 crores.
Ÿ Profit Before Tax (PBT) for the year was ` 500 crores,
while Profit After Tax for the year was ̀ 325 crores.
Ÿ Revenue from overseas operations stood at ̀ 300 crores.
Ÿ The Board of Directors of the Company has recommended
a final dividend of ̀ 0.50/- per share (of face value of ̀ 5/-
per share) for the financial year 2016-17, in addition to
` 2.50/- per share interim dividend already paid during
the year. With this, the total dividend for the financial
year 2016-17 works out to ` 3.00/- per share. The
payment of final dividend is, however, subject to
approval of the shareholders.
Business Highlights
EIL secured new business worth ` 5,708 crores, during FY
2016-17, of which domestic consultancy business was
` 2,032 crores, the domestic turnkey business was ` 3,412
crores and overseas consultancy business, worth ` 264
crores. I am pleased to state that this is the highest ever
order-booking by your company in single financial year. The
robust Order-book of your company which stands at ` 7762
crores is also a historical high. Your company continues to
make good progress in all its key business segments.
In the upstream segment, your company secured
assignment for providing Consultancy Services for bid
package preparation for the modification jobs at Process
Platform of B&S assets of ONGC, a major order for the
Modification Jobs at ONGC’s B193 Process platform was
also secured amidst stiff competition.
In the downstream segment, the major consulting orders
secured in the Refining sector include EPCM services for BS-VI
projects of IOCL, HMEL, MRPL and BPCL, PMC/EPCM services
for HPCL’s Mumbai Refinery expansion project, PMC services
for Vizag Refinery expansion project of HPCL, EPCM services
for Western Gateway Project of H-Energy Gateway Private
Limited, Licensor selection and BDEP package for IOCL’s
Guwahati Refinery, PMC services for implementation of
Propylene Derivative Petrochemical Project (PDPP) at Kochi
Refinery of BPCL, Energy efficiency and improvement studies
for PSU Refineries and feasibility studies for 2G Ethanol plant
for HPCL & MRPL among various others.
In the transportation of POL, major assignments secured
include PMC services for capacity augmentation of
Jamnagar-Loni Pipeline of GAIL, EPCM services for
enhancement of pumping capacity of Barauni-Bongaigaon
sector of Oil India Limited and PMC services for Vijaypur-
Auraiya Project of GAIL.
In the Infrastructure sector, EIL has secured entry level
activities for Namami Gange projects for towns and cities
situated on the banks of river Ganga in U.P. your company
also bagged a breakthrough assignment of providing PMC
services for construction of new domestic terminal building
and associated works at Leh Airport for AAI.
In the Turnkey domain, your company successfully secured
the job for the execution of Utilities & Off-sites and PRU
revamp of Vizag Refinery Modernization Project of HPCL and
BS-VI Projects of CPCL at Manali Refinery on OBE mode of
implementation.
Leveraging its expertise in the water and waste management
areas, EIL has completed Condition Assessment and
Feasibility Study of Sewerage Infrastructure in 38 towns
under the Namami Gange Programme. Significant progress
was achieved in assignments for entry level activities
including development of Ghats and Crematoriums within
the state of Uttar Pradesh.
Overseas
Your company continues to make strong inroads in the
international markets and secured major orders from
Bangladesh, Algeria and Nigeria. These projects which were
won amidst stiff international competition have further
strengthened your company’s credentials to implement
mega overseas projects.
In Bangladesh, your company secures a major order of
providing Project Management Consultancy Services for
installation of Eastern Refinery Limited (ERL) Unit-2 of
Bangladesh Petroleum Corporation (BPC).
Your company bagged an assignment for verification of
feasibility study for petrochemical complex for Longson
Petrochemical Company for Vietnam Petroleum Institute,
Vietnam.
In the African region, EIL won a major assignment for Study
& PMC Services for rehabilitation of Ethylene Unit at Skikda
Petrochemical Complex for Sonatrach, Algeria.
Your company’s continued focus on the MENA region is
paying rich dividends. In UAE, we secured quite a few
assignments pertaining to Consultancy, Design, FEED
assignments from our regular clients viz. TAKREER, GASCO,
ENOC and others.
Under the long term General Engineering Services
Agreement, BAPCO awarded Safety Study Assignments for
HAZOP and SIL Study for Falcon Cement Metering Station.
Your company secured two assignments in Kuwait - for
Detail Engineering Services for supply and installation of
VSM Pumps for Arabi Enertech; and consultancy services for
PHA Revalidation Closeout for Kuwait Aviation Fuelling
Company.
The Saudi Arabian Fertilizer Company (SAFCO) also engaged
your company for two assignments, that of PHA Revalidation
Studies and PHA Study for Ammonia, Urea, Utility and
Compound Fertilizer Plants.
In addition, number of additional assignments were awarded
to your company by Dangote, Nigeria, Sonatrach, Algeria and
Indorama Eleme Fertilizers & Chemicals Company, Nigeria.
In Kenya, your company bagged two engineering
assignments of Early Oil Pilot Project of Kenya Petroleum
Refineries Limited (KPRL) under stiff global competition.
Operational Highlights
In the Consultancy Segment, your company continued to
strengthen its stronghold and secured several assignments in
offshore oil & gas and LNG sectors. During the FY 2016-17,
your company successfully completed many assignments
including PMC expansion project for Dahej LNG Terminal
Ph-III, BPA-BPD revamp project for ONGC.
In the Petroleum Refining Sector, your company is a leading
engineering consultancy service provider in the country.
During FY 2016-17, it completed NHT/ISOM at BPCL Mumbai
Refinery by converting existing process units (NHDS to NHT
and CRU to ISOM units) to maximize production of BS-IV
MS, Integrated Refinery Expansion Project of BPCL Kochi
Refinery for enhancing the refining capacity to 15.5 MMTPA,
New Coke Chamber for Delayed Coker Unit and allied facility
project at Barauni Refinery of Indian Oil Corporation Limited
(IOCL).
Your company has efficiently leveraged its expertise and
experience in the design, engineering and execution of cross-
country pipelines for transportation of crude oil, refined
petroleum products, natural gas and LPG. It completed the
DFR for augmentation of Barauni - Bongaigaon Section of
Naharkatiya - Barauni Crude Oil Pipeline for Oil India Limited
(OIL) and the Palanpur - Vadodara Pipeline and Marketing
Terminal project for HPCL. Works in progress include PFR of
1864 km long Middle East to India deep water pipeline of
South Asia Gas Enterprise Private Limited.
During the year, the company achieved significant progress on
a number of other key projects such as the Revamp and
Capacity Enhancement Project (Phase-II) at BORL Bina
Refinery to increase the refining capacity from 6.0 MMPTA to
Note: This does not purport to be a record of the proceedings
Chemicals Limited (RFCL) along with NFL and FCIL. EIL is
also executing this project on EPCM Mode and substantial
progress in engineering and ordering has been achieved and
civil works are in full swing.
Over the years, your company has emerged as a global player
with the execution of a number of prestigious assignments in
the hydrocarbon space for international energy majors in
Middle East, Africa and South East Asia. Overseas Projects
completed during the year includes Design of 18’’ and 12”
Crude Oil Pipeline for Kenya Petroleum Refineries Limited,
Kenya.
Further, EIL is providing EPCM services for the prestigious
Dangote Refinery and Petrochemical Project comprising a
460,000 BPSD grassroots Petroleum Refinery and 830 KTPA
Petrochemical Complex at Lekki Free Trade Zone, Nigeria.
Research & Development
Research & Development (R&D) is core to your company’s
success in no small measure and has contributed
significantly to its present status. Its role in strengthening
existing capabilities, development of new technologies and
hardware besides enhancement of the portfolio for special
technology related services is truly commendable. R&D
Division has collaborations with academic institutes like IIT
Delhi, other R&D organizations like IOCL (R&D), CSIR-IIP,
BPCL (R&D) and small companies as well.
During this fiscal, Your Company filed seven new patents and
was granted one patent for novel Process for Regenerative
Sulfur Dioxide Removal from Gases. Furthermore,
applications for registration of 12 Trademarks pertaining to
in-house technologies were made, of which 10 have been
granted in the present Financial Year.
Human Capital
Your company provides best opportunities for its employees
to enable them to reach their full potential. It has an
enabling environment to ensure professional development
and career growth of its people. As a nerve centre
of the organization, the HR function aims at fuelling
the growth ambitions of the organization by equipping the
Human Assets for effective & efficient delivery as well as
providing them a nurturing environment. Endeavors taken
during the year have consolidated the initiatives taken in the
past and built on them further for creating systems towards
sustainable performance.
Your company has a robust Performance Management
System that gives weightage to both performance and
potential. Several other activities related to employee welfare,
encouragement for participation in sports and training are
undertaken from time-to-time. All these activities have
enhanced the quality of life of our employees and has
improved their work-life balance.
Sharper Competitive Edge
State-of-the-art systems and processes are essential for
maintain and enhancing market advantage. Towards this end,
EIL has embraced IT and digital transformation to bring
about automation, efficiency, and transparency throughout
the company.
Information Technology Services (ITS) are at the heart of
EIL’s various business initiatives. The key initiatives
taken up by your company’s ITS Division include launch of
Eng SUI web portal to encourage start-ups, system for
marketing department for post award Job Management and
effort distribution, web based system for progress
monitoring of critical milestones of equipment erection at
project site among many others. The department has also
developed and integrated various project executions related
dashboards to have all the data well-structured and well-
connected at one place with a view to achieve operational
improvement.
Responsible Corporate Citizen
Giving back to the society is everyone’s responsibility, as
such improving the well-being and life of the community, the
downtrodden and women should be at the core of any
corporate welfare activity. Keeping this in mind, EIL’s CSR
policy aims at creating a sustainable environment through its
activities for community and environment.
During this fiscal, your company supported several activities
in different areas of education, healthcare, drinking
water/sanitation, rural electrification, women empowerment,
upliftment of under-privileged, community development and
vocational training of youth.
These range from supporting educational programmes in
Delhi/NCR for construction of Government School Building
in Kabennur, Dharwad, Karnataka; installation of medical
equipment for underprivileged people in slums of Delhi and
providing Mobile Medical Care Units for villages of Odisha;
Construction/ maintenance of sanitation facilities and RO
plants in Assam, Bihar, Odisha, Tamil Nadu, Andhra Pradesh
and Karnataka.
EIL conducted a functional literacy programme for economic
empowerment of 120 tribal women of Bolangir District,
Odisha and also supported skill development training of 1600
candidates belonging to SC/ST/OBC, Women and EWS of
society in Assam, Andhra Pradesh, Haryana, Uttar Pradesh,
Madhya Pradesh and Jharkhand.
Make in India
Your company is fully committed to the “Make in India”
flagship initiative launched by the Hon’ble Prime Minister
with an objective to revive and revitalize the manufacturing
sector in the country. It has been pursuing several initiatives
like import substitution areas, encouraging indigenization,
helping suppliers to upgrade technologies and indigenous
manufacturing.
EIL is piloting the midstream sectors for “Make in India”
initiative under Ministry of Petroleum & Natural Gas
(MoP&NG) and is a member of the Steering Committee set
up for the purpose. To this effect, regular supplier meets are
being organized for interaction with the specific domain
based industries and online vendor empanelment
processes.
Your company has also been organising and participating in
various seminars organised by Ministry of Micro, Small and
Medium Enterprises to encourage the development of MSME
sector including SC/ST Entrepreneurs.
Health, Safety & Environment (HSE)
Health, Safety & Environment (HSE) has always received
utmost priority by EIL in all aspects of its operations. The
company’s OHSAS 18001 (Occupational Health and Safety
Assessment Series) and ISO 14001 (Environmental
Management System) certification has been continued after
a third party verification conducted during this fiscal. These
certifications provide an edge in securing business,
especially in overseas markets.
Sustainability
EIL has refocused its engineering philosophy and business
models to achieve long term sustainable growth. It has also
initiated evaluation and reporting of performance on the triple
bottom lines pertaining to economic, social and
environmental aspects.
The Company’s project designs support sustainability right
from conceptualization to plant commissioning and
subsequently, the commercial operation. Energy efficiency,
resource optimization and safety of plant personnel and
society at large are the cornerstones of our business
operation. They also ensure business continuity. The
sustainability initiatives at EIL shall definitely, propel the
organization on an upward growth trajectory.
Focus on Quality
Quality Management Systems (QMS) are aligned with EIL’s
purpose and strategic direction. QMS at your company
provides the competitive edge in securing and executing the
projects with focus on full customer satisfaction.
They are inbuilt into the processes, workplace, deliverables
and services of EIL. During this year, the company’s Quality
Management System was upgraded and assessed against
ISO 9001:2015. The certification agency declared that the
QMS of the Company conforms to the requirements of ISO
9001:2015 standard. The Quality Management System of
your company ’s UAE (Abu Dhabi) office was also
independently audited and assessed during transition cum
certification audit and was certified to ISO 9001: 2015
standard.
Accolades and Awards
During the year, your company was bestowed with many
awards and accolades which only validates our core
competence, and motivates us to raise the performance
benchmarks in all our endeavors. Your company was
bestowed with Special Commendation of SCOPE Award for
Excellence and Outstanding Contribution to the Public Sector
Management 2014-15 in Institutional Category-I (Maharatna
& Navratna PSEs); FICCI Sustainability Award 2016 for Best
Green Process in Petrochemicals Sector; India Pride Award
2015-16 for “CSR/Environment Protection & Conservation”
from Dainik Bhaskar Group and 9th CIDC Vishwakarma
Awards for Best Construction Projects for Revamp of CRU &
NHDS for NHT/ISOM, BPCL Refinery, Mumbai as well as for
Construction Health, Safety & Environment for Dahej
Petrochemical Complex, Dahej (Gujarat).
Corporate Governance
Your company is committed to good Corporate Governance
as per the requirements of SEBI Regulations and DPE
Guidelines in this regard. The Board of Directors supports the
broad principles of Corporate Governance. In addition to the
basic issues, EIL Board lays strong emphasis on
transparency, accountability and integrity as required under
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and DPE Guidelines on Corporate
Governance.
Acknowledgements
I would like to take this opportunity to gratefully acknowledge
the assistance, support and guidance extended by the
Ministry of Petroleum and Natural Gas and other Ministries of
the Government of India. I would also like to express my
sincere gratitude to the shareholders of the Company for their
continued trust and faith in the company. I am confident that
your continued support will take the company to greater
heights in the days to come.
The distinguished members and my colleagues on the Board
continue to be a source of inspiration, motivating us with
their invaluable experience and expertise. Thank you for your
support.
We also thank all our clients, associates, suppliers, and
contractors within the country and abroad for their continued
support.
My heartfelt appreciation and acknowledgement for the
dedicated efforts put in by all members of the EIL family.
Thank you for contributing to the success of EIL.
Jai Hind!
th19 September, 2017 Sanjay Gupta
New Delhi Chairman and Managing Director