Mar 31, 2018
BOARD''S REPORT
To,
The Members of Hindustan Construction Co. Ltd.
1. Report
Your Directors have presented the 92nd Annual Report together with the Audited Financial Statements for the year ended March 31,
2018.
2. Financial Highlights
(As per IND AS)
Standalone (Rs, in crore)
Particulars |
Year ended March 31, 2018 |
Year ended March 31, 2017 |
||
Income from Operations |
4,575.08 |
4,195.94 |
||
Profit before Interest, Depreciation, Exceptional Items, Other Income and Tax |
654.39 |
753.63 |
||
Less: Finance Costs |
659.97 |
772.37 |
||
Depreciation |
122.94 |
125.28 |
||
Exceptional Item |
- |
21.22 |
||
782.91 |
918.87 |
|||
Add: Other Income |
251.00 |
250.44 |
||
Add/Less: Exchange Gain/(Loss) |
(10.51) |
11.76 |
||
Profit before Tax |
111.97 |
96.96 |
||
Less: Tax Expense |
34.44 |
37.55 |
||
Profit/(Loss) after Tax |
77.53 |
59.41 |
||
Add: Other Comprehensive Income / Loss |
(11.64) |
21.51 |
||
Total Comprehensive income carried to Other Equity |
65.89 |
80.92 |
3. Dividend
As your Company has restructured its debts under the S4A Scheme it is necessary to conserve and optimise use of resources to promote the growth of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2018.
4. Allotment of Equity Shares & Optionally Convertible Debentures
During the year under review, the Company has allotted 47,59,291 Equity Shares of the Company of face value Rs,1/- each at an issue price of Rs, 41.61 per equity share (including premium of Rs, 40.61 per Equity Share) for an amount of Rs, 19.80 crore and 2,56,716 Optionally Convertible Debentures (OCDs) of face value Rs, 1000/- each for an amount of Rs, 25.67 crore to one Lender as per the terms of the S4A Scheme.
The present paid-up Equity Share Capital of the Company is
1,01,54,62,926 which comprises 1,01,54,62,926 Equity Shares of face value Rs, 1/- each.
5. Operations
The Income from Operations of the Company in the year is Rs, 4,575.08 crore as compared to Rs, 4,195.94 crore in the previous year. The profit before tax is Rs, 111.97 crore as compared to Rs, 96.96 crore for the previous year.
Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts:
- Parwan Dam & Tunnel, Rajasthan Contract Value Rs, 673 crore
- Bangalore Metro Reach 5, Package 3, Karnataka Contract Value Rs, 797 crore
- Fast Reactor Fuel Cycle Facility, Kalpakkam, Tamil Nadu Contract Value Rs, 764 crore
- Pune Metro Corridor 1, Maharashtra Contract Value Rs, 497 crore
- Pune Metro Corridor 2, Maharashtra Contract Value Rs, 485 crore
The total balance value of works on hand as on March 31, 2018 is Rs, 19,188 crore.
Decisions are awaited from various clients for tenders submitted by the Company for 4 bids amounting to approx. Rs, 6,052 crore (HCC share Rs, 3,257 crore). Tenders for 13 projects worth Rs, 16,297 crore (HCC share Rs, 13,437 crore) are expected to be submitted in the near future. The Company has also submitted a prequalification bid for 1 project worth over Rs, 1,200 crore which is under evaluation.
Operations of Subsidiaries i) HCC Infrastructure Company Ltd
HCC''s Infrastructure business develops and operates Road BOT assets. HCC Concessions Ltd. (HCON) is the holding company of all the SPVs, which has developed 6 projects over last decade, of which 2 have been divested since. Last year HCC Concessions'' two operational projects in the state of West Bengal, Baharampore-Farakka Highways Ltd (BFHL) and Farakka-Raiganj Highways Ltd (FRHL) earned operational revenue of '' 158 crore and '' 151 crore respectively on the backdrop of healthy traffic growth of around 13% each. Both projects have huge potential for growth considering further development of West Bengal and North-East India. The balance construction work in these two projects is being taken up and it is planned to complete FRHL in this fiscal and BFHL next year. Upon full completion, substantial revenue growth is expected due to enhancement of toll rates. The Elevated Highway project from Badarpur to Faridabad (BFTL) was terminated by the Company on September 1, 2017 due to Force Majeure event. In case of Raiganj-Dalkhola Highways (RDHL), due to lack of support from NHAI in confirming the related land delay cost overrun to the lenders, the project was terminated on March 31, 2017. For both BFTL and RDHL, with support from HCC Concessions, the said SPVs are pursuing the legitimate termination payment including the lenders'' dues along with other claims through arbitration.
The claims related to Narmada Bridge (NBTL) rehabilitation works, a closed project, is in advanced stage.
HCON has channelized its resources to rigorously follow up with NHAI for its legitimate rights and managing claims. Claims of various SPVs towards delay and cost escalations, force majeure events, change of scope and termination are under advanced stages of arbitration. In BFHL, an Arbitration Award of Rs, 448 crores was received in favour of SPV as compensation for delays in respect of land acquisition, utility shifting, increase in interest cost (IDC), loss of revenue and increase in other incidental costs for the delays occurred due to Authority''s default till August, 2015. Subsequent period claims for BFHL and other SPVs are being pursued. HCON is also evaluating offers from potential investors for buying majority stake in its Road Assets which will help in unlocking the value of investments as well as the money realized from such stake sale can be channelized in more productive use.
ii) Steiner AG, Switzerland
Steiner AG, one of the leading project developers, total and general contractors (TC/GC) in Switzerland, offers comprehensive services in the field of new construction, refurbishment and real estate development. Your Company owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned Subsidiaries.
Steiner AG has registered a revenue of CHF 806.4 million (Rs, 5,395 crore) in the financial year 2017-18 compared to CHF 820.6 million (Rs, 5.580 crore) in the previous year and a net profit of CHF 9.5 million (Rs, 64 crore) compared to a net profit of CHF 3.2 million (Rs, 21.7 crore) in the previous year. The Company secured fresh orders worth CHF 890 million (Rs, 6,011 crore). The order backlog is CHF 1.37 billion (Rs, 9,260 crore) at the end of the year. In addition to this, the Company has secured orders for CHF 394 million (Rs, 2,660.3 crore), where the contracts are yet to be signed. The closing cash balance of the Company was CHF 107 million (Rs, 737 crore) reflecting the Company''s steady financial performance and strong liquidity position.
Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs, 51.64 crore and Profit after tax of Rs, 0.27 crore in financial year 2017-2018. Please refer to Page 17 in the Management Discussion and Analysis Report for an overview of Steiner AG & Steiner India businesses.
iii) Lavasa Corporation Ltd. - Integrated Urban Development & Management
In 2017-18, Lavasa and its SPVs managed to sustain operations in the absence of any external financial aid. Operations were cut down to sustainable levels and focus was laid on cost and resource optimization and boosting revenue streams.
The Company''s persistent efforts for finding a solution for revival of the project involved project lenders involving Strategic Debt Restructuring (SDR) in September 2017. However, in view of RBI circular on ''Resolution of Stressed Assets - Revised Framework'', issued in the month of February 2018, Company and lenders were compelled to alter the plan of action. Company has been actively working on finding an investor / partner, with whom a resolution to debt, and project funding happens, and is under active discussion with credible third parties in this space. In the interim, city''s businesses continue to play their role in maximizing the value of Lavasa''s assets.
The city continues to be known as one of the favorite tourist destinations in Maharashtra with various attractions. Lavasa received over a million tourists in FY 2017-18. In the hospitality space, the four hotels operating within the city i.e. Mercure, Fortune, Waterfront Shaw and Ekaant Retreat continued to attract tourists and business guests and reported healthy average occupancies. The 1500 plenary capacity Lavasa International Convention Centre (LICC) hosted some grand conventions and conferences during the year serving clients like Forbes, Deloitte etc. Augmentation of room inventory in the city is expected to benefit both the hospitality and retail operators.
On the retail front, a significant area has already been leased to various outlets mainly in the F&B segment. The Dasve Public School, Ecole Hoteliere Lavasa (tie up with Ecole hoteliere de Lausanne, Switzerland) and Christ College are fully operational educational institutions.
Lavasa has initiated a number of development and empowerment programs for the local community like provision of treated drinking water to 18 villages, calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, creche for labor children, medical facilities to villagers and so on.
Lavasa''s first town Dasve is ready with all basic infrastructure. The Environment Management Plan (EMP) continues to be implemented as per our Environment Impact Assessment (EIA) Report submitted to Ministry of Environment, Forests & Climate Change (MoEF & CC), New Delhi. The preparation of thirteenth sixth-monthly Environmental Compliance Report for the period November 2017 to May 2018 and extension of Environment Clearance from MoEF is in progress. The Company had 10,514 acres of land including 455 acres of land on lease as of the end of the previous financial year ended March 31, 2017.
6. Subsidiaries and Associate Companies
During the year under review, the following changes have taken place with respect to Subsidiary and Associate Companies:
1) On January 22, 2018, Manufakt8048AG was incorporated as a wholly owned subsidiary of Steiner Promotions et Participations SA, which is a wholly owned subsidiary of Steiner AG.
2) Pune-Paud Toll Road Company Limited has been amalgamated/ merged with HCC Infrastructure Company Limited w.e.f. March 15, 2018.
3) Green Hills Residences Limited, a subsidiary of Lavasa Corporation Ltd (LCL) became a wholly owned subsidiary of LCL w.e.f. May 26, 2017.
4) Warasgaon Lakeview Hotels Limited, wherein LCLs shareholding was 19.2%, became an Associate Company of LCL w.e.f. June 9, 2017 and shareholding of LCL has increased to 24.56% on account of release of pledged shares.
5) Ecomotel Hotel Limited has ceased to be a subsidiary of LCL w.e.f. March 27, 2018. It has become an Associate Company of LCL and the consequent shareholding of LCL in the said Company has reduced to 40.04%.
The list of Subsidiaries and Associates of your Company as on March 31, 2018, forms a part of Form No. MGT-9, Extract of the Annual Return, which is annexed at Annexure VII to the Board''s Report.
The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Ventures of the Company is provided in Form AOC-1 which forms a part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2018.
The Company has formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company
i.e. www.hccindia.com and can be accessed at http://www. hccindia.com/pdf/HCCPolicyfordeterminingMaterialSubsidiaries.pdf
7. Public Deposits
Your Company has not accepted any deposits from the public, or its employees during the year under review.
8. Particulars of Loans, Guarantees or Investments
Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Companies Act, 2013 (''Act'') are given in the notes to the Financial Statements.
Also, pursuant to Paragraph 2 of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.
9. Employee Stock Option Scheme (ESOP)
The ESOP Compensation Committee has granted 3,00,000 stock options during the year at an exercise price of '' 31.15 per stock option, subject to approval of the Members for amendment of the existing Employee Stock Option Scheme, in line with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014('' SEBI Regulations'').
Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value '' 1 each.
During the year under review, no options got vested in the employees of the Company and 1,20,180 stock options got lapsed.
The particulars with regard to ESOP as on March 31, 2018 as required to be disclosed pursuant to the provisions of Companies (Share Capital and Debentures) Rules, 2014 read with SEBI Regulations, is set out at Annexure I to this Report.
10. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and implementation requirements of Indian Accounting Standards (''IND-AS'') under Companies Act, 2013 on accounting and disclosure requirements, and as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "SEBI Listing Regulations"), the Audited Consolidated Financial Statements are provided in this Annual Report.
Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of each of the subsidiaries, Associates and Joint ventures of the Company in the prescribed form AOC-1 is annexed to this report.
Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries are kept for inspection by the Members at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.hccindia.com under the Investors Section.
11. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India (SEBI).
The report on Corporate Governance as prescribed in SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance alongwith a declaration signed by Group CEO & Whole-time Director stating that the members of the Board of Directors and Senior Management personnel have affirmed the compliance with code of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance.
12. Directors
As per the provisions of Section 152 of the Companies Act,
2013, Mr. N. R. Acharyulu, Non Executive Director of the Company, is due to retire by rotation and, being eligible, has offered himself for re-appointment.
In accordance with Section 196, 197 read with Schedule V of the Companies Act, 2013, Mr. Arjun Dhawan was appointed as Group CEO & Whole-time Director of the Company for a period of 5 years w.e.f. April 1, 2017 (including terms of remuneration for 3 years) and the Members have approved his appointment and remuneration as stated above, at the 91st Annual General Meeting of the Company held on July 6, 2017.
Based on the approval of the Nomination and Remuneration Committee and the Board of Directors of the Company at their meetings held on January 31, 2018, Mr. Ajit Gulabchand who will be attaining the age of 70 years on June 28, 2018 was re-appointed as the Managing Director designated as Chairman & Managing Director of the Company, for a period of 5 years with effect from April 1, 2018 (including terms of remuneration for a period of one year i.e. April 1, 2018 to March 31, 2019 in accordance with Schedule V of the Companies Act, 2013) and approval is being sought from the Members vide special resolution at the ensuing Annual General Meeting.
The Independent Directors of the Company viz., Mr. Rajas R, Doshi, Mr. Ram P Gandhi, Mr. Sharad M. Kulkarni, Mr. Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary declarations to the Company confirming that they meet the criteria of Independence as prescribed under Section 49 of the Act and SEBI Listing Regulations.
The Company has received Form DIR-8 from all Directors pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014. Brief Profile of the Directors seeking appointment/re-appointment has been given in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.
13. Key Managerial Personnel
Following persons are the Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:
1. Mr. Ajit Gulabchand, Chairman and Managing Director;
2. Mr. Arjun Dhawan, Group Chief Executive Officer and Whole-time Director;
3. Mr. Amit Uplenchwar, Chief Executive Officer - HCC E & C, w.e.f. January 31, 2018;
4. Mr. Arun V. Karambelkar, President & Chief Executive Officer - HCC E&C, upto January 31, 2018;
5. Mr. Praveen Sood, Chief Financial Officer of the Company designated as Group CFO;
6. Mr. Venkatesan Arunachalam, Company Secretary w.e.f.
May 9, 2017;
7. Mr. Sangameshwar Iyer, Company Secretary upto May 8, 2017''.
The Board placed on record its appreciation for the services rendered by Mr. Arun V Karambelkar, during his tenure as CEO (E&C) of the Company.
Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2018 are provided in Form No. MGT-9, Extract of the Annual Return which is set out at Annexure VII to the Board''s Report.
14. Board Committees
The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations viz.
Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee.
During financial year 2014-15, in accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.
All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.
Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at these meetings, are provided in the Corporate Governance Section of the Annual Report.
15. Meetings
A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company. The Board of Directors of your Company met 4 times during 2017-18. The meetings were held on May 4, 2017, August 3, 2017, November 2, 2017 and January 31, 2018.The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.
16. Familiarization Programme of Independent Directors
In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.
The details of the familiarization programme are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by web link http://www.hccindia.com/pdf/familiarisation_program_for_ independent_directors.pdf
17. Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, Annual Performance Evaluation of the Board, the Directors as well as of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Executive Committee of Board, Corporate Social Responsibility Committee and Employee Stock Option Compensation Committee has been carried out.
The Performance Evaluation of the Independent Directors was carried out by the Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.
18. Independent Directors Meeting
During the year under review, the Independent Directors of the Company met on March 22, 2018, inter-alia, for:
i. Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.
ii. Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors.
iii. Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
19. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel:
The Nomination and Remuneration Committee has laid down a well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors in May 2014, extract of which is attached to the Board''s Report, set out at Annexure II. The same is also available on the Company website and can be accessed by weblink http://www. hccindia.com/pdf/Nomination-and-Remuneration-Policy.pdf
20. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees:
The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors in May 2014, extract of which is attached to Board''s Report set out at Annexure II. The same is also available on the Company website and can be accessed by weblink http://www.hccindia.com/pdf/Nomination-and-Remuneration-Policy.pdf
21. CSR Policy:
A brief outline of the Corporate Social Responsibility (CSR)
Policy as recommended by the CSR Committee of the Directors and approved by the Board of Directors of the Company in May 2014 and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The said CSR policy is also available on the Company website and can be accessed by weblink http://www.hccindia.com/pdf/HCC_Corporate_Social_ Responsibility_Policy.pdf
22. Related Party Transactions:
All the related party transactions entered during the year were in the ordinary course of business and on an arm''s length basis. The related party transactions attracting the compliance under Section 177 of the Companies Act, 2013 and / or SEBI Listing Regulations were placed before the Audit Committee for necessary approval/review.
The routine related party transactions was placed before the Audit Committee for their omnibus approval. A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.
There are no transactions to be reported in Form AOC-2 in terms of Section 134 of the Act read with Companies (Accounts) Rules, 2014. Further the details of the transactions with related parties are provided in the Company''s financial statements in accordance with the Indian Accounting Standards.
The Related Party Transactions Policy as approved by the Board of Directors of the Company has been uploaded on the website of the Company at http://www.hccindia.com/pdf/HCC_Policy_ for_Related_Party_Transactions.pdf
23. Business Responsibility Statement
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report, prepared on a voluntary basis covering the principle wise performance of the Company on the nine principles as per National Voluntary Guidelines (NVGs) is attached to this Annual Report.
24. Directors'' Responsibility Statement
In accordance with the provisions of Section 134 of the Companies Act, 2013, your Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
(b) the selected accounting policies were applied consistently and the Directors 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, 2018 and of the profit of the Company for the year ended on that date.
(c) 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.
(d) the annual accounts have been prepared on a going concern basis.
(e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.
Internal financial control over carrying cost of investment in subsidiaries and recoverability of dues from subsidiaries, is covered under internal financial control.
The management is of the view that diminution in the carrying cost of investment in subsidiaries, if any, is temporary in nature and recoverability of dues from subsidiaries are good. The view of the management is also supported by a third party expert report.
However, in view of the uncertainties involved, your Auditors have given a qualified opinion in their report in this regard, without quantifying the impact. Other than this, your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting (IFCoFR) and that they were operating effectively. This response by Directors is based on the management note given under Para 30 of this report.
25. Industrial Relations
The industrial relations continued to be generally peaceful and cordial during the year.
26. Transfer of Unclaimed Dividend and Equity Shares to Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to IEPF after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to IEPF Accordingly during the year under review, the Company has transferred the unclaimed dividend for the financial year 2009 10 of Rs, 16,04,376 to IEPF and 10,30,389 corresponding equity Shares of face value Rs, 1/- for a total face value of Rs, 10,30,389/-, as per the IEPF Rules to the IEPF account.
27. Particulars of Employees and other additional information.
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been set out at Annexure IV to this Report.
The information as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 will be provided upon request by any Member of the Company. In terms of Section 136 of the Companies Act, 2013, the Annual Report including the Board''s Report and the Audited Accounts are being sent to the Members excluding the same. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company.
28. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.
The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure V forming part of this Report.
29. Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
30. Statutory Auditors
The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of M/s Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, bearing ICAI Registration No. 001076N as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter.
As per the existing appointment of M/s. Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, their remainder audit period covers the fifth and last year of their appointment up to the conclusion of the next Annual General Meeting to be held in the financial year 2019-20.
As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to their continued appointment and also a certificate from them to the effect that their existing appointment is in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made there under.
30. Statutory Auditors'' Remarks
a. Statutory Auditor''s Qualification :
The Auditors'' Report to the Members on the Audited Financial Results of the Company for the financial year ended March 31, 2018 contains the following qualification(s) :
As stated in Note 33(a) to the standalone financial statements, the Company''s non-current investments as at March 31 2018 include investments aggregating Rs, 630.83 crore in two of its subsidiaries; and non-current loans, other non-current financial assets and other current financial assets as at that date include dues from such subsidiaries aggregating Rs, 580.75 crore,
Rs, 43.42 crore and Rs, 6.63 crore, respectively, being considered good and recoverable by the management considering the factors stated in the aforesaid note including valuation report from an independent valuer. However, these subsidiaries have accumulated losses and their consolidated net worth is fully eroded. Further, these subsidiaries are facing liquidity constraints due to which they may not be able to realize projections made as per their respective business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these non-current investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements. Our audit opinion on the standalone financial statements for the year ended March 31, 2017 was also qualified in respect of this matter.
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
b. Statutory Auditor''s Qualification on the Internal Financial Controls relating to the above matter
In our opinion, according to the information and explanations given to us and based on our audit procedure performed, the following material weakness has been identified in the operating effectiveness of the Company''s IFCoFR as at March 31, 2018:
The Company''s internal financial controls in respect of supervisory and review controls over process of determining of (a) carrying value of the Company''s non-current investments in its subsidiaries; and (b) recoverability of non-current loans, other non-current financial assets and other current financial assets due from such subsidiaries were not operating effectively. Absence of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investments in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, could also impact the profit (financial performance including other comprehensive income) after tax.
A ''material weakness'' is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.
In our opinion, except for the possible effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, maintained adequate IFCoFR as at March 31, 2018, based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI and the Company''s IFCoFR were operating effectively as at March 31, 2018.
We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended March 31, 2018, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.
Management Note:
The Company, as at March 31, 2018, has (i) a non-current investment amounting to Rs, 612.40 crore (March 31, 2017: Rs, 612.40 crore), non-current loans amounting to Rs, 428.19 crore (March 31, 2017: Rs, 380.86 crore) and other non-current financial assets amounting to Rs, 24.35 crore (March 31, 2017: Rs, 21.72 crore) in HREL, a subsidiary, which is holding 68.70% share in Lavasa Corporation Limited (LCL), a step down subsidiary, and
(ii) a non-current investment amounting to Rs, 18.43 crore (March 31, 2017: Rs, 18.43 crore), non-current loans amounting to Rs, 152.56 crore (March 31, 2017: Rs, 131.56 crore), other noncurrent financial assets amounting to Rs, 19.07 crore (March 31, 2017: Rs, 16.45 crore) and other current financial assets amounting to Rs, 6.63 crore (March 31, 2017: Rs, 4.77 crore) in LCL. While such entities have incurred losses during their initial years and consolidated net-worth of both entities as at March
31, 2018 has been fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values. The net-worth of these subsidiaries does not represent their true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is substantially higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of these subsidiaries is substantially higher than the carrying value of the investments, non-current loans, other non-current financial assets and other current financial assets due to which these are considered as good and recoverable.
Based on the above, management believes that the Company''s internal financial control in respect of assessment of the carrying value of investments, recoverability of non-current loans, other non-current financial assets and other current financial assets in subsidiaries were operating effectively and there is no material weakness in such controls and procedures.
31. Secretarial Audit:
Secretarial Audit for the financial year 2017-18 was conducted by M/s. BNP Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report at Annexure VI wherein the following observation has been made by the Secretarial Auditor.
In respect of its Non- Convertible Debentures, for which listing got revived on July 7, 2017, the respective compliances under Regulation 50(1) and 60 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 were complied by the Company only from November 2, 2017.
Management Note:
The S4A Scheme was implemented for the Company in January 2017 and related formalities were under completion by few Lenders. In view of the same, respective debt compliances under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were reported/disclosed to the Stock Exchanges and the Debenture Trustees, as applicable, from November 2, 2017, which was the date of publication of the limited reviewed results for the quarter ended 30thSeptember 2017, during which quarter the NCDs listing got revived. Thereafter the Company has continued to comply with the debt related provisions of the said regulations in a timely manner.
32. Cost Audit :
In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on August 3, 2017 had appointed M/s. Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2017-18. In terms of the provisions of Section 148 of the Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the Members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for financial year 2017-18.
33. Risk Management:
The Company has established a well-documented and robust risk management framework under the provisions of Companies Act, 2013. The Company has constituted Risk Management Committee in place, which has been delegated with the authority by the Board to review and monitor the implementation of the Risk Management Policy of the Company.
Under this framework, risks are identified across all business processes of the Company on a continuous basis. Once identified, these risks are managed systematically by categorizing them into Enterprise Level Risk & Project Level Risk. These risks are further broken down into various subcategories of risks such as operational, financial, contractual, order book, project cost & time overrun etc. and proper documentation is maintained in the form of activity log registers, mitigation, reports; and monitored by respective functional heads. Review of these risk and documentation is undertaken by Risk Review Committee regularly at agreed intervals but at least once in a quarter and mainly during Quarterly project reviews
Risk Review Committee was successful in early identification of financial risk related to borrowing structure & cash flow mismatch due to late realization of claims lodged with clients. These risk were materially mitigated during the last year by implementing financial restructuring scheme introduced by Reserve Bank of India known as ''Scheme for Sustainable Structuring of Stressed Assets (S4A)'' with lenders successfully and issue of guidelines by Cabinet Committee of Economic Affairs (CCEA) for release of 75% of arbitration awards in favour of infrastructure companies, respectively. Company has been able to realize substantial monies under CCEA guidelines from its clients. Monies received have been used towards payments to lender thereby reducing lenders dues.
On introduction & implementation of Accounting Standard Indian Accounting Standards (''IND-AS'') under Companies Act, 2013 which is applicable from last year, Company in its Notes to Accounts have disclosed risk management objectives and policies for managing financial and reporting risk. (Refer Note 40 to Accounts)
34. Internal Control Systems and their adequacy
The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.
35. Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, 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 information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act, 2013.
36. Vigil Mechanism Policy:
The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at www.hccinida.com
37. Sexual Harassment:
HCC has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. HCC has a well formulated Policy on Prevention & Redress of Sexual Harassment. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee. During the year 2017-18, no case of Sexual Harassment was reported.
38. Reporting of Frauds :
There have been no instances of fraud reported by the Statutory Auditors under Section 143 of the Act read with relevant Rules framed there under either to the Company or to the Central Government.
39. Significant and material Orders passed by the Regulators/Courts, if any:
There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.
40. Material changes & commitment if any, affecting financial position of the Company from the end of financial year till the date of the report:
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.
41. Extract of Annual Return:
The details forming part of the extract of Annual Return in prescribed Form MGT 9 is set out as Annexure VII and forms a part of this Report.
42. Acknowledgements:
Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders, clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and support received during the year.
Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.
For and on behalf of Board of Directors,
Ajit Gulabchand
Chairman & Managing Director
Registered Office:
Hincon House, Lal Bahadur Shastri Marg Vikhroli (West),
Mumbai 400 083
Place : Mumbai
Date : May 3, 2018
Mar 31, 2017
1. Report
The Directors have presented the 91st Annual Report together with the Audited Financial Statements for the year ended March 31, 2017.
2. Financial Highlights (As per IND AS)
Standalone (Rs. In Crore)
Particulars |
|
Year ended |
|
Year ended |
|
March 31, 2017 |
March 31, 2016 |
||
Income from Operations |
|
4195.94 |
|
4190.89 |
Profit before Interest, Depreciation, Exceptional Items, Other Income and Tax |
|
753.63 |
|
810.50 |
Less: Finance Costs |
772.37 |
|
701.71 |
|
Depreciation |
125.28 |
|
152.47 |
|
Exceptional Item |
21.22 |
918.87 |
28.03 |
882.21 |
Add: Other Income |
|
250.44 |
|
214.24 |
Add/Less: Exchange Gain/(Loss) |
|
11.76 |
|
(2.11) |
Profit before Tax |
|
96.96 |
|
140.42 |
Less: Tax Expense |
|
37.55 |
|
45.66 |
Profit/(Loss) after Tax |
|
59.41 |
|
94.76 |
Add: Other Comprehensive Income |
|
21.51 |
|
(9.04) |
Total Comprehensive income carried to Other Equity |
|
80.92 |
|
85.72 |
3. Dividend
Your Company has restructured its debts under the Scheme for Sustainable Structuring of Stressed Assets ("S4A Scheme") and therefore, it is necessary to conserve and optimize use of resources to improve the health of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2017.
4. Operations
The Income from Operations of the Company in the year is Rs. 4195.94 crore as compared to Rs.4190.89 crore in the previous year. The profit before tax is Rs.96.96 crore as compared to Rs.140.42 crore for the previous year.
Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts:
- Mumbai Metro Line 3, Package 2, Mumbai Contract Value: Rs.2523 crore,
- Railway Tunnel T-13 & Part T-14, Jammu & Kashmir Contract Value: Rs. 1750 crore,
- Bistan Lift Irrigation Scheme, Madhya Pradesh Contract Value: Rs.375 crore,
- Anji Khad Cable Stayed Bridge, Jammu & Kashmir Contract Value: Rs.369 crore,
- Parallel Safety Tunnel ofT 12, Jiribam Imphal Railway line, Manipur Contract Value: Rs. 368 crore,
- Residential Buildings, DAE Township, Anupuram, Kalpakkam, Tamil Nadu Contract Value: Rs.182 crore,
- Residential Buildings, DAE Township, Anushaktinagar, Mumbai Contract Value: Rs.159 crore
The total balance value of works on hand as on March 31, 2017 is Rs. 20,390 crore.
Decisions are awaited from various clients for tenders submitted by the Company for 11 bids amounting to approx. Rs. 10,230 crore (HCC share Rs. 9,002 crore). Tenders for various packages for 28 projects worth Rs. 39,218 crore (HCC share Rs.26,661 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 16 projects worth over Rs.21,198 crore (HCC share Rs. 17,053 crore) which are under evaluation.
Operations of Subsidiaries
i) Lavasa Corporation Ltd. - Integrated Urban Development & Management
Lavasa has kept its rationale of developing a smart city for all and is tailoring partnerships and tie ups with global leaders. Partnerships are well in place and many of these projects are moving towards completion.
In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC).
As for the existing hospitality projects, Ekaant - The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its ninth year of successful operations with occupancy at 63%, while Accor''s Mercure is in its eighth year of successful operation with occupancy at 56%. In the tourism space, Lakeshore Water sports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Lavasa has tied up with former Indian cricketer and former chief of the BCCI Selection Committee, Mr. Sandeep Patil for building a Sports complex including a cricket stadium for corporate tournaments.
On the retail front, Restaurants like Smokin Joe''s, Venkys Xpress, Subway, Cafe Coffee Day, Baskin Robbins, All American Diner, Granma''s Homemade Patisserie, Chor Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani, Paanchi Krunchy and Indulge have commenced operations. Many other non F&B outlets such as Mapro and Charosa Wine Boutique have successfully started operations including Lavasa''s first miniplex- Fun Square Digital Cinema.
Christel House Lavasa (renamed as Dasve Public School), EHL and Christ College are fully operational. KnowledgeVistas Limited (KVL), a K-12 school, is actively looking for JV partner to commence operation. Abhinav Shiksha Sansthan, New Delhi bought 1,25,000 sq.ft of land in Mugaon and is expected to build a 62,500 sq.ft school for academic year 20192020.
Women''s special weekend at Lavasa saw a good participation on International Women''s Day. There was a performance by mentalist Akshay Lakshmanan with his mind reading session, Mukund Seshadri with his session on financial planning, Dr. Shishir Shetty session on breast cancer awareness, Zumba sessions etc. Party night was hosted by RJ Urmin of Fever 104 FM.
Lavasa hosts glamour night for film actors, directors and producers from Marathi film industry with musical & dance performance by Ajit Parab, Pushkar Shrotri, Deepali Sayed, Manasi Naik & Nirmiti Sawant. Flea market; music & performance were organized at Dasve promenade for Christmas and New Year celebrations.
Lavasa has been an ideal location for ad & movie shoots, following are the brands which were shot at Lavasa for their TV commercial or still shoot: Skoda Rapid, Mercedes Benz, Blackberry Clothing, Brand Factory Clothing, Hero Bikes, Beat Car & Lotus Sun Cream.
Lavasa continued its focus on promoting tourism; we participated to showcase tourism at Lavasa in India International Travel &Tourism & Global Panorama Showcase. Over 1000 bikers braved the rain and travelled to Lavasa in June to celebrate World Motorcycle Day. Motoring World magazine conducted the jury round of their annual car and bike awards at Lavasa resulted in a six page story all of them featuring cars and bikes shot at Lavasa. Celebrations at Lavasa on Maharashtra Day, Independence Day weekend and initiative like the Dreamcatchers Summer camp were covered by all major publications and online portals. Launch of Jetovator, Segway and news about Lavasa bagging the PATWA Award were widely publicized.
Lavasa city now has a full-fledged operational Farmer''s market known as ''Hara Bazar''; a two screen Movie theatre; it has a fully operating Post office, courier service & a Hospital with pharmacy. Lavasa has a Petrol Pump, two bank branches along with ATMs, a Public Safety Centre with Fire Engine & crew, Police outpost, Tourist Information Center with Bus facility; Multilevel Car parking facility, Nature trail, rental housing for low income groups, simulated Golf Course facilities; Water Sports facility with latest "Jetovator", Adventure Sports facility, a modern Club with gym, Sports and Spa facilities and Public Transport system for citizens.
Infrastructure is a key to ensuring long-term livability; drinking water at Lavasa is fit for consumption without the need for additional filtration. Sewage is treated and is subsequently reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives.
Around the clock Lavasa Citizen Contact Centre has been operational since 2009 and is a one-stop information source for non emergency and emergency related services. It provides a single window resolution for all customers'' needs and visitors'' requests. The CMS department meets on a monthly basis with a committee of villagers throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.
Lavasa had 10,574 acres of land including 455 acres of land on lease by the end of last financial year i.e. March 31, 2016. This is reduced to 10,515 acres because 59 acres of land in Mugaon was restored to tribals by SDO, Maval during the year.
The Environment Management Plan is being implemented regularly. Regular monitoring of environmental aspects such as air & noise quality, water quality, soil & sediment quality, DG stack & noise quality and ecological monitoring of Dasve, Mugaon and Gadle Bandhara is being carried out by MoEF approved and NABL accredited laboratory.
All reports were found to be within the consent / prescribed limits of Maharashtra Pollution Control Board (MPCB).
As per the environment clearance requirement, the Environmental Compliance Report is being submitted to MoEF once in six months. A yearly environment statement, a requirement as per the consent document of Maharashtra Pollution Control Board (MPCB), is being submitted everyyear.
Application of Geo-mat & Coir-mat with pegging of bamboo nails is being done to control soil erosion due to heavy rainfall. Stump & shrub plantation activity has been undertaken and have planted 0.10 lakhs live stumps during the first spell of rains (June 2016).
Lavasa first town, Dasve, is ready with all basic infrastructures such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services. Till date 1250 properties are handed over to the City Management Services department for handing over to customers. The hostel block at Tower A is operational. The restoration works on major landslide affected area is in progress. Work on infrastructure & buildings for the second town of Mugaon are on hold.
Lavasa has also initiated a number of development and empowerment programs for the local community like provision of treated drinking water to 18 villages in the project area at 72 locations on a daily basis; calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, creche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/ AIDS, malaria, nutrition, and water borne diseases. Employment and self employment opportunities to the locals have also been provided.
ii) HCC Infrastructure Company Ltd
HCC Infrastructure Company Ltd, a wholly owned subsidiary of your Company, is actively engaged in the development & operations of road transport through its subsidiaries, namely HCC Concessions Ltd (HCON) and HCC Operations & Maintenance Ltd (HOML), respectively. HCON is focused on developing and managing BOT road assets, primarily National Highway Projects under Public Private Partnership (PPP) and HOML operates and maintains the operational assets. Another subsidiary, HCC Power Ltd, has mandate to explore opportunities in the power sector to leverage HCC''s capabilities.
HCON has developed six NHAI road assets since its inception and the current portfolio consists of four NHAI road concessions constituting an asset base of Rs. 4,900 crore. The Company has been evaluating NHAI projects under Hybrid Annuity Model (HAM), a low risk model, for future investments, besides evaluating the opportunities to engage with potential players for offering end to end services for Toll, Operate & Transfer (TOT) model.
During the last fiscal year, the management team has been meticulously working towards achieving timely commissioning of one of its road project, arranging cost overrun financing, smooth operations and maintenance of existing assets and exploring raising of capital to meet the future needs.
Current Road Portfolio
HCON''s current portfolio comprises of four toll based projects, of which 3 projects together form a contiguous stretch of 250 km on NH-34 in the state of West Bengal and the 4th project is located on NH-2 in the National Capital Region of Delhi.
HCC''s development of NH-34 is among the largest PPP highway undertakings in the country. NH-34 is the backbone of the transport system in Bengal, which is the fourth most populous state in India and home to 90 million citizens.
NH-34 provides north-south connectivity between the capital region / ports of Kolkata & Haldia to north Bengal & north eastern states of India. The west side of the highway borders Bihar and Jharkhand and the eastern side run parallel to the Bangladesh border, where considerable import and export of goods occur. NH-34 is the only viable route for commercial traffic over major rivers such as Bhagirathi, Ganga, Mahananda and Nagri in the region. Furthermore, it forms part of the critical route to neighbouring Bhutan, Bangladesh and Nepal.
Baharampore-Farakka Highways Ltd (BFHL)
The project road starts from north of Kolkata at Km 191.420 near Baharampore and ends at Farakka (before Farakka Barrage) at Km 294.680.
The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,424 crore.
The project has witnessed traffic growth of 6.2% in the last fiscal year and the turnover for the year was Rs. 136 crore, an increase of 21% compared to the previous year.
As per the gazette notification for overloaded vehicles, BFHL has implemented the 10x tolling for overloaded vehicles on this project since August 2014 to mitigate additional maintenance costs required to be incurred due to plying of overloaded vehicles.
After demonetization of currency notes of Rs. 500 and Rs. 1,000, based on directive from Government of India, the toll collection of the project stopped from November 8, till December 2, 2016. A claim for recovery of Rs.9.35 crore on this account has been submitted to NHAI.
The final completion of the project is expected by Q2/ Q3 of financial year 2018-2019, largely due to material defaults by NHAI in providing land on a timely basis. The work on the Baharampore bypass is underway and the company is working with the authority and district administration to resolve all encumbrances along the right of way.
Farakka-Raiaani Highways Ltd (FRHL)
The Company commenced commercial operations of its Rs.1,720 crore Farakka Raiganj Highways Ltd (FRHL) in October 2016. FRHL covers the busiest section of NH-34 and passes through major towns such as Farakka, Kaliachawk, Malda, and Gajol, besides being the only link over the river Ganges in the region. The project has a concession period of 30 years, including construction period of 30 months.
The commercial operations of this project commenced on 19th Oct 2016 for 80 Km. Post that travel time for commuters in FRHL has been reduced significantly, by approximately 5-6 hours during peak hours. The construction of FRHL has involved over 130 structures including 9 Major Bridges, 22 Minor Bridges, 5 Underpasses and 2 Toll Plazas, with material coordination alongside NHAI and numerous State agencies.
The average daily toll collection has been Rs.47 lakh since start of toll collection.
After demonetization of currency notes of Rs. 500 and Rs.1,000, based on directive from Government of India, the toll collection of the project stopped from 8th Nov till 2nd Dec 2016. A claim for recovery of Rs.9.82 crore on this account has been submitted to NHAI.
The final completion of the project is expected by Q2/ Q3 of FY18. Entire land has been made available by NHAI and the work is progressing well.
Raiaani-Dalkhola Highway Ltd (RDHL)
This is the north-most section of NH-34 and connects to NH-31 at Dalkhola.
Land acquisition delay of about 6 years led to substantial increase of project cost. RDHL has filed its claims of Rs.615 crore against NHAI The Company made its best efforts to arrange cost overrun financing in order to restart the project. In spite of prolonged delay in land acquisition and defaulting on crucial requirements of Concession Agreement, NHAI was not ready to acknowledge the increase in project cost for termination benefits due to which lenders consortium has expressed their inability to fund the cost overrun. NHAI took a stand of terminating the project and has issued notice on March 31, 2017.
The Company is evaluating all options either to revive the project or to recover its dues from NHAI either through Arbitration or amicable settlement.
Delhi Faridabad Elevated Expressway (dfskvwavâ¢)
The Delhi Faridabad Elevated Expressway (dfskywayâ¢) is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur.
The Company''s revenues have been falling short of its projections due to the existence of toll free local road, which is being used by the long distance commercial vehicles to escape paying toll charges and violates the spirit of the Concession Agreement.
BFTL also suffered a material impact due to a Supreme Court order for collecting Environmental Compensation Charge (ECC) from commercial vehicles entering New Delhi (thereby discouraging their entry into the capital), resulting in a substantial dip of ~40% in commercial vehicles. This has unfortunately caused a devastating impact and political event by permanently curtailing revenues.
In parallel, BFTL had discussions with its lenders to find a long term sustainable solution to the cash flow issues of the project. Consortium of Lenders invoked Strategic Debt Restructuring ("SDR") in the project. However, the SDR process could not be completed due to pending final approvals from a couple of Banks and NOC from NHAI.
After demonetization of currency notes of '' 500 and '' 1,000, based on directive from Government of India the toll collection of the project stopped from November 8, 2016 till December 2, 2016. A claim of Rs.4.21 crore has been submitted to NHAI for the same.
To bring long lasting solution to the project, the Company, after seeking consensus from lenders, is ready for going ahead with option of either terminating the project and pursue claims through Arbitration or mutually foreclose the project in discussion with NHAI.
iii) Steiner AG, Switzerland
Steiner AG (Steiner), one of the leading project developers, total and general contractors (TC/GC) in Switzerland, offers comprehensive services in the fields of new constructions, refurbishment and real estate development. Since 2010, Steiner has been part of the your Company. HCC owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned Subsidiaries.
Steiner, established in 1915, has completed more than 1,500 residential construction projects, and have built nearly 600 commercial properties, over 45 hotels, around 200 infrastructure facilities, among them universities, schools, hospitals, nursing homes, rehabilitation facilities, retirement homes and prisons. Steiner ranks among the market leaders in Switzerland and aims for excellence in its environmental, health and safety performance. Its client and process orientation is driven by the focus on quality and on providing cost-effective solutions. Steiner fulfils current quality management criteria and is certified as confirming to ISO 9001, ISO 14001 and OHSAS 18001. Steiner''s head office is in Zurich and it has branches in Basel, Berne, Geneva, Tolochenaz, Lucerne and St. Gall.
Its subsidiary, Steiner India Ltd, markets Swiss knowhow for the emerging real estate market from its base in Mumbai.
Steiner AG has registered a revenue of CHF 820.6 million (Rs. 5,580 crore) compared to CHF 636.8 million (Rs. 4255 crore) in the previous year and a net profit of CHF 3.2 million (Rs. 21.7 crore) compared to a loss of CHF 4.9 million (Rs. 33 crore) in the previous year. The Company secured fresh orders worth CHF 927 million (Rs. 5,977 crore). The order backlog was CHF 1.43 billion (Rs. 9,200 crore) at the end of the year. In addition to this, the company has secured orders for CHF 700.0 million (Rs. 4,515.7 crore), where the contracts are yet to be signed. The closing cash balance of the company was CHF 95.6 million (Rs. 617 crore) reflecting the company''s steady financial performance and strong liquidity position.
Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs.51 crore and loss of Rs.2.9 crore in financial year 2016-2017
5. Subsidiaries and Associate Companies
During the year under review, the following changes have taken place with respect to Subsidiary Companies and Associate Companies, as the case may be applicable :
a) Kart Racers Limited, a step-down subsidiary Company, has ceased to be a wholly owned subsidiary of Lavasa Corporation Limited w.e.f. June 3, 2016 and continues to be a subsidiary of Lavasa Corporation Limited.
b) Highbar Technologies FZ LLC, a step-down subsidiary Company, was de-registered w.e.f. July 31, 2016.
c) HighbarTechnocrat Limited (previously known as Osprey Hospitality Limited),a step-down subsidiary of the Company, has ceased to be subsidiary of Lavasa Corporation Limited with effect from August 8, 2016. It has become an Associate Company of Highbar Technologies Limited w.e.f. December 12, 2016 wherein 49% of its shareholding is held by Highbar Technologies Ltd.
d) Warasgaon Lakeview Hotels Limited, a step-down subsidiary Company, has ceased to be an Associate Company of Lavasa Corporation Limited w.e.f. March 14, 2017 and the consequent shareholding of Lavasa Corporation Limited in the said Company has reduced to 19.2%.
e) During the year under review SNC Valleiry Route de Bloux. wholly owned subsidiary of Steiner Leman SAS, got merged with Steiner Leman SAS, a step-down subsidiary of the Company, as part of restructuring process.
As on March 31, 2017, the list of Subsidiaries and Associate Companies of your Company is as follows:-
Subsidiary Companies
1. Western Securities Ltd
2. HCC Aviation Ltd
3. HCC Construction Ltd
4. Highbar Technologies Ltd
5. HCC Mauritius Enterprises Limited
6. HCC Mauritius Investment Limited
7. Steiner AG
8. Steiner Promotions et Participations SA
9. VM ST AG
10. Eurohotel SA
11. Steiner (Deutschland) GmbH
12. Steiner Leman SAS
13. Steiner India Ltd
14. HCC Infrastructure Company Ltd
15. Dhule Palesner Operations & Maintenance Ltd
16. HCCPowerLtd
17. HCC Energy Ltd
18. HCCOperations&MaintenanceLtd
19. HCC Real Estate Ltd
20. HRL Township Developers Ltd
21. HRL (Thane) Real Estate Ltd
22. NashikTownshipDevelopersLtd
23. Maan Township Developers Ltd
24. Charosa Wineries Ltd
25. Powai Real Estate Developers Ltd
26. HCC Realty Ltd
27. *Pune-Paud Toll Road Company Ltd
28. Panchkutir Developers Ltd
29. Lavasa Corporation Ltd
30. Lavasa Hotel Ltd
31. Lakeshore Watersports Company Ltd
32. Dasve Convention Centre Ltd
33. Dasve Business Hotel Ltd
34. Dasve Hospitality Institutes Ltd
35. LakeviewClubsLtd
36. Dasve Retail Ltd
37. Full Spectrum Adventure Ltd
38. Lavasa Bamboocrafts Ltd
39. My City Technology Ltd
40. Reasonable Housing Ltd
41. Future City Multiservices SEZ Ltd
42. Rhapsody Commercial Space Ltd
43. Valley View Entertainment Ltd
44. Warasgaon Tourism Ltd
45. Our Home Service Apartments Ltd
46. Warasgaon Power Supply Ltd
47. Sahyadri City Management Ltd
48. Hill City Service Apartments Ltd
49. Warasgaon Infrastructure Providers Ltd
50. Nature Lovers Retail Ltd
51. Warasgaon Valley Hotels Ltd
52. Rosebay Hotels Ltd
53. Mugaon Luxury Hotels Ltd
54. Warasgaon Assets Maintenance Ltd
55. Hill View Parking Services Ltd
56. Verzon Hospitality Ltd
57. Kart Racers Limited
58. HCC Concessions Ltd
59. Narmada Bridge Tollway Ltd
60. Badarpur Faridabad Tollway Ltd
61. Baharampore - Farakka Highways Ltd
62. Farakka - Raiganj Highways Ltd
63. Raiganj - Dalkhola Highways Ltd
64. Spotless Laundry Services Ltd
65. Green Hill Residences Ltd
66. Whistling Thrush Facilities Services Ltd
67. Ecomotel Hotel Limited
Associate Companies
1. Knowledge Vistas Limited
2. Evostate AG
3. Projektentwicklungsges, Parking KunstmuseumAG.
4. MCR Managing Corp. Real Estate AG
5. Highbar Technocrat Limited
6. Nirmal BOT Limited
7. Andromeda Hotels Limited
8. Bona Sera Hotels Limited
9. Apollo Lavasa Health Corporation Ltd
10. Starlit Resort Ltd
* A scheme of Amalgamation has been filed jointly by HCC Infrastructure Co. Ltd and Pune-Paud Toll Road CompanyLtd (PPTRCL) foramalgamation ofPPTRCL with HCC Infrastructure Co. Ltd, before the National Company Law Tribunal at Mumbai, vide Company Application on March 31, 2017 as per Section 230 to Section 232 of the Companies Act, 2013 and the same is pending for admission.
The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company forms part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2017.
The Company has formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/HCC_Policy_for_ determining_Material_Subsidiaries.pdf
6. S4A Scheme Implementation /Increase in Share Capital
The Company had availed certain financial facilities ("Facilities") under the Reserve Bank of India Corporate Debt Restructuring ("CDR") mechanism whereby the debt obligations of the Company were restructured on the terms and conditions set out in the Master Restructuring Agreement dated June 29, 2012 executed amongst the ICICI Bank (as the Monitoring Institution), the Lenders and the Company ("CDR MRA").
Despite availing the restructuring of the Facilities under the CDR mechanism, the Company was facing liquidity issues and challenges in debt servicing due to inter alia slower than envisaged recovery in the economy and infrastructure sector and increased interest cost for the Company due to increase in the working capital requirement and non-realization of claims / receivables. This has resulted in a gap of cash flow timing mismatch between claims realization (including interest) and debt servicing. If such cash gap is left unaddressed, the Company will face challenges in the execution of its order book and also in servicing of its debt.
Accordingly, in order to bridge the aforementioned cash flow timing mismatch, the Lenders deliberated various solutions to address the aforementioned liquidity issues and recommended the Scheme for Sustainable Structuring of Stressed Assets ("S4A Scheme") introduced by the Reserve Bank of India ("RBI") pursuant to its circulars dated June 13, 2016 and as amended further on November 10, 2016 ("S4A Circulars").
The Lenders in their Joint Lender''s Forum meeting ("JLF") held on July 8, 2016 deliberated on the various options and agreed to explore the recommendation of the Monitoring Committee for implementing the S4A Scheme for the Company. Pursuant to the JLF held on July 12, 2016, the Lenders decided to adopt the S4A Scheme with the Reference Date as July 12, 2016 and at the JLF held on September 7, 2016 they agreed to convert part of their entire debt exposure ("Part B Debt of HCC S4A Scheme") to Equity shares and Optionally Convertible Debentures (OCDs) ("S4A Securities") towards implementation of the S4A Scheme and the same was approved by Overseeing Committee constituted by RBI (OC) on November4, 2016 ("HCC S4A Scheme/Scheme").
Pursuant to the implementation of the S4A Scheme and in accordance with and as specified in the financing documents executed by the Company with, inter alia, the Lenders (hereinafter referred to as the "S4A Agreements/ S4A Documents"), the shareholders at the Extraordinary General Meeting (EGM) of the Company held on January 5, 2017 approved the offer and issue of Equity Shares representing 24.44% in aggregate of the expanded share capital of the Company and Optionally Convertible Debentures (OCDs) of face value Rs.1000 each on Preferential Basis, to the Lenders as per applicable laws and extant regulations, based on the respective Lender''s subscription for the Securities of the Company.
During the year under review, for the purpose of allotment of S4A Securities and in accordance with the shareholders approval at the EGM of the Company held on January 5, 2017, the Authorized Share Capital of the Company was increased to Rs.135,00,00,000 (Rupees One Hundred Thirty Five Crore Only) divided into 125,00,00,000 (One Hundred Twenty Five Crore) Equity Shares of Rs.1 each (Rupee One Only) and 1,00,00,000 (One Crore) Redeemable Preference Shares of Rs.10 each (Rupees Ten only),
As per the terms of the S4A Agreements executed between Company and the Lenders, in respect of Lenders who had completed the process of conversion of debt into Equity Shares and/or OCDs of the Company under the HCC S4A Scheme, and in accordance with the shareholders approval at the EGM of the Company held on January 5, 2017, the Company has issued and allotted 23,15,44,729 Equity shares of Rs.1 each, in aggregate, representing 22.91% of the Expanded Share Capital of the Company, at an issue price of Rs.34.92 per Equity Share (including premium of Rs.33.92 per Equity Share) for an amount aggregating Rs.809 crore and 1,44,14,874 Optionally Convertible Debentures (OCDs) of face value Rs.1000 each, in aggregate, for an amount aggregating Rs.1441 crore to 27 Lenders under the HCC S4A Scheme, in two tranches, on January 6 and 19, 2017, in accordance with Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (''SEBI ICDR Regulations") and Section 42, 62 of the Companies Act, 2013 and the rules made there under.
The S4A Scheme was successfully implemented for the Company as more than 50% of lenders by number holding more than 75% by value, participated in the Scheme and thereupon Company has made the allotment of S4A securities to the respective Lenders.
Post S4A Scheme implementation, the present paid up Equity Share Capital of the Company is Rs.101,07,03,635 which comprises 101,07,03,635 Equity shares of face value Rs.1 each.
Out of the total 30 lenders under S4A Scheme, some of the remaining Lenders who had not participated in the S4A Scheme so far, have thereafter agreed to subscribe to the S4A securities under the Scheme and accordingly with necessary shareholders approval at the forthcoming Annual General Meeting of the Company, the Company will proceed to issue and allot the corresponding S4A securities to the respective Lenders as per extant regulations in force.
7. Public Deposits
Your Company has not accepted any deposits from the public, or its employees during the year under review.
8. Particulars of Loans, Guarantees or Investments
Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
Also, pursuant to Paragraph 2 of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.
9. Employee Stock Option Scheme (ESOP)
As on March 31, 2017, 1,20,180 stock options are outstanding, in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.
Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.
During the year under review, no options got vested in the employees of the Company. 15,34,450 stock options got lapsed between April 1, 2016 and March 31, 2017.
The particulars with regard to the ESOP as on March 31, 2017 as required to be disclosed pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, are set out in Annexure I to this Report.
10. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and implementation requirements of Indian Accounting Standards (''IND-AS'') Rules on accounting and disclosure requirements, which is applicable from current year, and as prescribed by Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), the Audited Consolidated Financial Statements are provided in this Annual Report.
Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of each of the subsidiary and joint venture in the prescribed form AOC-1 is annexed to this annual report.
Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries are kept for inspection by the shareholders at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.hccindia.com under the Investors Section.
11. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India (SEBI).
The report on Corporate Governance as prescribed in Schedule V(C) of the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance along with a declaration signed by the Chairman and Managing Director stating that the members of the Board of Directors and Senior Management personnel have affirmed the compliance with code of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance.
12. Directors
As per the provisions of Section 152 of the Companies Act, 2013, Mr. N. R. Acharyulu (DIN 02010249), Non Executive & Non Independent Director of the Company, is due to retire by rotation. Mr. N. R. Acharyulu, being eligible, offers himself for re-appointment.
Mr. Bhalchandra R. Sule, ex-Director passed away on January 31, 2017. The Board of Directors has expressed its deep regret and offered condolences on the sad demise of Mr. Sule.
Mr. Bhalchandra R. Sule was a Director in the Company for a long time from 1993 to 2006. The Board also placed on record the invaluable contribution of Late Mr. B. R. Sule, to the Board and the Company during his tenure of Directorship with the Company.
Mr. Rajgopal Nogja was the Group COO and Whole-time Director up to May 2, 2016 and thereafter was the Group CEO of the Company from May 3, 2016 to March 31, 2017.
The Board placed on record its appreciation for the valuable contribution of Mr. Rajgopal Nogja during his tenure with the Company.
Pursuant to the resignation of Mr. Rajgopal Nogja as the Group CEO with effect from March 31, 2017 and based on the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on February 2, 2017, appointed Mr. Arjun Dhawan (DIN : 1778379) as Group Chief Executive Officer (CEO) & Additional Director of the Company w.e.f. April 1, 2017 in accordance with Section 203 and Section 161 of the Companies Act, 2013 read with Article 88 of the Articles of Association of the Company respectively.
Subject to Members approval, the Board also appointed Mr. Arjun Dhawan as Group CEO & Whole-time Director of the Company for a period of 5 years w.e.f. April 1, 2017, In accordance with Section 196 of the Companies Act, 2013.
Prior to this appointment, Mr. Arjun Dhawan was the President & CEO of HCC Infrastructure since November 2009.
As an Additional Director, Mr. Arjun Dhawan shall hold office up to the date of the ensuing Annual General Meeting.
The Company has received a Notice under Section 160 of the Companies Act, 2013, from a member signifying an intention to propose Mr. Arjun Dhawan, as a candidate for the office of Director at the forthcoming Annual General Meeting.
The term of appointment of the Independent Directors of the Company viz., Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, is uptil the ensuing Annual General Meeting of the Company. Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni have furnished necessary declarations to the Company under Section 149(7) of the Act, confirming that, they meet the criteria of Independence as prescribed for continuing as Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.
Based on the performance evaluation of these Directors and after reviewing the declarations submitted by Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, the Board of Directors were of the opinion that Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, both continue to meet with the criteria of independence as per the provisions of Section 149(6) of the Companies Act, 2013 and rules made there under and also meet with the requirements of Regulation 16(b) of the SEBI Listing Regulations and are also independent of the management and accordingly have proposed their re-appointment as Independent Directors of the Company, for a term of three consecutive years each, up to the conclusion of the 94th Annual General meeting of the Company in the calendar year 2020, subject to the Members approval.
The Company has received a Notice under Section 160 of the Companies Act, 2013, from member(s) signifying the intention to propose Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni respectively, as candidate(s) for the office of Director at the forthcoming Annual General Meeting.
The other Independent Directors of the Company viz., Mr. Rajas R, Doshi, Mr. Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary declarations to the Company under Section 149(7) of the Act, confirming that they meet the criteria of Independence as prescribed for Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.
The Company has received Form DIR-8 from all Directors pursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Brief Profile of the Directors seeking appointment/ re-appointment has been given in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.
13. Key Managerial Personnel
Following persons are the Key Managerial Personnel (KMP) of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed there under:
i) Mr. Ajit Gulabchand, Chairman and Managing Director.
ii) Mr. Rajgopal Nogja, resigned as Group CEO of the Company w.e.f. March 31, 2017.
iii) Mr. Arjun Dhawan, was appointed as the Group Chief Executive Officer and Whole-time Director of the Company with effect from April 1, 2017 and therefore he is a KMP w.e.f April 1, 2017.
iv) Mr. Arun V. Karambelkar, President & Chief Executive Officer.
v) Mr. Praveen Sood, Chief Financial Officer of the Company designated as Group CFO & EVP - HCC Group Office.
vi) After the end of the financial year under review, the contract of appointment of
Mr. Sangameshwar Iyer, Company Secretary is getting concluded and therefore he will be a KMP uptil May 8, 2017.
The Board placed on record its appreciation for the services rendered by Mr. Sangameshwar Iyer during his tenure as Company Secretary of the Company.
vii) Mr. Venkatesan Arunachalam was appointed as Company Secretary w.e.f. May 9, 2017 in place of Mr. Sangameshwar Iyer and therefore he is a KMP with effect from the said date.
Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2017 are mentioned in Form MGT-9, Extract of the Annual Return which is attached as Annexure VIII to the Board''s Report.
14. Board Committees
The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility (CSR) Committee.
In accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.
All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.
Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Section of the Annual Report.
15. Meetings
A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company.
The Board of Directors of your Company met 6 times during 2016-2017. The meetings were held on April 28, 2016, June 3, 2016, July 28, 2016, October 27, 2016, December 2, 2016 and February 2, 2017. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.
16. Familiarization Programme of Independent Directors
In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.
The details of the familiarization programme are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by web link http://www.hccindia. com/pdf/familiarisation_program_for_independent_ directors.pdf
17. Performance Evaluation
Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, annual performance evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Executive Committee of the Board and Corporate Social Responsibility (CSR) Committee has been carried out.
The performance evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.
18. Independent Directors Meeting
During the year under review, the Independent Directors of the Company met on March 22, 2017, inter-alia, to discuss:
i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.
i) Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors.
iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.
19. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel:
The Nomination and Remuneration Committee has laid down a well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors in May 2, 2014, which is attached to the Board''s Report as Annexure II.
20. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees:
The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors on May 2, 2014, which is attached to the Board''s Report as Annexure II.
21. CSR Policy:
The brief outline of the Corporate Social Responsibility (CSR) Policy as recommended by the CSR Committee of the Directors and approved by the Board of Directors of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is attached to this Report as Annexure III and is available on the website of the Company i.e. www.hccindia.com
22. Related Party Transactions:
All the related party transactions entered during the year were in the ordinary course of business and on an arm''s length basis.
The related party transactions attracting the compliance under Section 177 of the Companies Act, 2013 and / or SEBI Listing Regulations were placed before the Audit Committee for necessary approval/ review.
The routine related party transactions was placed before the Audit Committee for their omnibus approval.
A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.
There are no transactions to be reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.
Further the details of the transactions with Related parties are provided in the Company''s financial statements in accordance with the Accounting Standards read with IND AS Rules.
The Related Party Transactions Policy as approved by the Board of Directors of the Company has been uploaded on the website of the Company at http://www.hccindia.com/pdf/HCC_Policy_for_Related_Party_Transactions.pdf
23. Directors'' Responsibility Statement
In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.
b) the selected accounting policies were applied consistently and the Directors 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, 2017 and of the profit of the Company for the year ended on that date.
c) 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.
d) the annual accounts have been prepared on a going concern basis.
e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.
Internal financial control over carrying cost of investment in subsidiaries and recoverability of dues from subsidiaries, is covered under internal financial control.
The management is of the view that diminution in the carrying cost of investment in subsidiaries, if any, is temporary in nature and recoverability of dues from subsidiaries are good. The view of the management is also supported by a third party expert report.
However, in view of the uncertainties involved, your Auditors have given a qualified opinion in their report in this regard, without quantifying the impact. Other than this, your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting (IFCoFR) and that they were operating effectively.
This response by Directors is based on the management note given under Para 29 of this report.
24. Industrial Relations
The industrial relations continued to be generally peaceful and cordial during the year.
25. Transfer to Investor Education and Protection Fund (IEPF)
Your Company has, during the year under review, transferred a sum of '' 17,86,342 to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013. The said amount represents dividend for the year 2008-09 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.
26. Particulars of Employees and other additional information.
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure V to this Report.
The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the said Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.
27. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.
The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure VI forming part of this Report.
28. Statutory Auditors
The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai, bearing ICAI Registration No. 001076N as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the above said AGM).
Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor.
At the 90th AGM held on July 14, 2016, the shareholders had ratified the appointment of Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai for the period covering their third year of appointment viz., from the conclusion of the last AGM held on July 14, 2016 until the conclusion of the Annual General Meeting to be held in the financial year 2017-2018.
The said existing appointment of Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai covering their fourth year of appointment viz, from the conclusion of the ensuing AGM in financial year 2017-2018 until the conclusion of the next Annual General Meeting to the held in the financial year 2018-2019, has to be ratified by Members at the forthcoming AGM and accordingly the said proposal is being placed for members'' ratification.
As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made there under, as may be applicable.
29. Statutory Auditors'' Remarks
a. Statutory Auditor''s Qualification :
The Statutory Auditors'' Report to the Members on the Audited Financial Results of the Company for the financial year ended March 31, 2017 contains the following qualification(s) :
As stated in Note 33 to the standalone financial statements, the Company''s non-current investments as at March 31, 2017 include investments aggregating Rs. 630.83 crore in two of its subsidiaries; and non-current loans, other non-current financial assets and other current financial assets as at that date include dues from such subsidiaries aggregating Rs. 512.42 crore, Rs. 38.17 crore and Rs. 4.77 crore, respectively, being considered good and recoverable by the management considering the factors stated in the aforesaid note including valuation report from an independent valuer. However, these subsidiaries have accumulated losses and their net worth is fully / substantially eroded. Further, these subsidiaries are facing liquidity constraints due to which it may not be possible to realize projections made as per business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements. Our audit opinion on the standalone financial statements for the year ended March 31, 2016 was also qualified in respect of this matter.
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
b. Statutory Auditor''s Qualification on the Internal Financial Controls relating to the above matter:
In our opinion, according to the information and explanations given to us and based on our audit procedure performed, the following material weakness has been identified in the operating effectiveness of the Company''s IFCoFR as at March 31, 2017:
The Company''s internal financial controls in respect of supervisory and review controls over process of determining of (a) carrying value of the Company''s non-current investments in its subsidiaries; and (b) recoverability of non-current loans, other non-current financial assets and other current financial assets due from such subsidiaries were not operating effectively. Absence of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investments in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, could also impact the profit (financial performance including other comprehensive income) after tax.
A ''material weakness'' is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.
In our opinion, except for the possible effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, maintained adequate IFCoFR as at March 31, 2017, based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI and the Company''s IFCoFR were operating effectively as at March 31, 2017.
We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended March 31, 2017, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.
Management Note:
The Company, as at March 31, 2017, has (i) a noncurrent investment amounting to Rs.612.40 crore (March 31, 2016: Rs.612.40 crore; April 1, 2015: Rs.612.40 crore), non-current loans amounting to Rs.380.86 crore (March 31, 2016: Rs.327.01 crore; April 1, 2015: Rs.266.02 crore), other non-current financial assets amounting to Rs.21.72 crore (March 31, 2016: Rs.19.43 crore; April 1, 2015: Rs.25.01 crore) and other current financial assets amounting to Rs.Nil (March 31, 2016: Rs.5.07 crore; April 1, 2015: Rs.3.43 crore) in HREL, a subsidiary, which is holding 68.70% share in Lavasa Corporation Limited (LCL), a step down subsidiary, and (ii) a non-current investment amounting to Rs.18.43 crore (March 31, 2016: Rs.18.43 crore; April 1, 2015: Rs.18.43 crore), noncurrent loans amounting to Rs.131.56 crore (March 31, 2016: Rs.110.21 crore; April 1, 2015: Rs.Nil), other non-current financial assets amounting to Rs.16.45 crore (March 31, 2016: Rs.13.08 crore; April 1, 2015: Rs.14.30 crore) and other current financial assets amounting to Rs.4.77 crore (March 31, 2016: Rs.1.28 crore; April 1,2015: Rs.77.24 crore) in LCL. While such entities have incurred losses during their initial years and consolidated net-worth of both entities as at March 31, 2017 has been fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values. The net-worth of these subsidiaries does not represent their true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is substantially higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of these subsidiaries is substantially higher than the carrying value of the investments, non-current loans, other non-current financial assets and other current financial assets due to which these are considered as good and recoverable.
Based on the above, management believes that the Company''s internal financial control in respect of assessment of the carrying value of investment, recoverability of loans and advances, current and non-current assets in subsidiaries were operating effectively and there is no material weakness in such controls and procedures.
30. Secretarial Audit:
Secretarial Audit for the financial year 2016-2017 was conducted by M/s. BNP &Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report as Annexure VII wherein the following observation has been made by the Secretarial Auditor:
In respect of the Listed Non - Convertible Debentures (NCDs), although the terms got restructured in accordance with the CDR package approved for the Company in 2012 whereby, inter alia, the maturity dates were rescheduled to a later date and the same was intimated to the BSE, to extend the listing for the said NCDs, there was no advise from BSE and the said NCDs got delisted on the expiry of the respective original maturity dates. In view of the delisting, respective compliances under Regulations 50 to 52 and 54 to 62 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have not been carried out by the Company during the delisted period.
Management Note :
In respect of the Listed Non-Convertible Debentures (NCD) issued to Life Insurance Corporation of India & Axis Bank Limited in 2008 and 2011 respectively, the Company had complied with the provisions of the erstwhile Listing Agreement provisions for debt segment with BSE. The said NCDs were restructured, by extending the tenure of repayment in accordance with CDR Package dated June 29, 2012 and the same was intimated to BSE but was not recorded by them and therefore the listing of these NCDs got expired on the original maturity dates in 2014 & 2015 respectively.
The Company had taken up the matter with BSE to revive the NCDs up to the extended tenure and the same is under their due consideration.
As the NCDs got technically delisted due to reasons cited above and beyond the control of management, respective compliances under Regulations 50 to 52 and 54 to 62 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were not applicable for the Company during the delisted period. As soon as the listing of these NCDs are revived by BSE, the Company shall carry out the compliances as required under SEBI Listing Regulations.
31. Cost Audit :
In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on July 28, 2016 had appointed M/s. Joshi Apte & Associates, Cost Accountants bearing (Firm Registration No. 00240). as Cost Auditors of the Company for the financial year 2016-2017. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for financial year 2016-2017.
32. Risk Management:
The Company has established a well-documented and robust risk management framework under the provisions of Companies Act, 2013. The Company has constituted Risk Management Committee in place, which has been delegated with the authority by the Board to review and monitor the implementation of the Risk Management Policy of the Company.
Under this framework, risks are identified across all business processes of the Company on a continuous basis. Once identified, these risks are managed systematically by categorizing them into Enterprise Level Risk & Project Level Risk. These risks are further broken down into various sub-categories of risks such as operational, financials, contractual, order book, project cost & time overrun etc. and proper documentation is maintained in the form of activity log registers, mitigation, reports; and monitored by respective functional heads. Review of these risk and documentation is undertaken by Risk Review Committee of the management, held at agreed intervals but at-least once in quarter and mainly during Quarterly project reviews.
Risk Review Committee was successful in early identification of financial risk related to borrowing structure & cash flow mismatch due to late realization of claims lodged with clients. These risk were materially mitigated during the year by implementing new financial restructuring scheme introduced by Reserve Bank of India known as ''Scheme for Sustainable Structuring of Stressed Assets (S4A)'' with lenders and issue of guidelines by Cabinet Committee of Economic Affairs (CCEA) for release of 75% of arbitration awards in favour of infrastructure companies, respectively.
On introduction & implementation of new Accounting Standard Indian Accounting Standards (''IND-AS'') under Companies Act, 2013 which is applicable from current year, company in its Notes to Accounts have disclosed risk management objectives and policies for managing financial and reporting risk. (Refer Note 40 of Standalone Financial Statements).
33. Internal Control Systems and their adequacy
The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.
34. Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, 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 information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act 2013.
35. Vigil Mechanism Policy:
The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at www.hccinida.com
36. Sexual Harassment:
HCC has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. HCC has a well formulated Policy on Prevention & Redress of Sexual Harassment. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee. During the year 2016-2017, no case of Sexual Harassment was reported.
37. Reporting of Frauds :
There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.
38. Significant and material Orders passed by the Regulators/Courts, if any:
There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.
39. Material changes & commitment if any, affecting financial position of the Company from the end of financial year till the date of the report:
There have been no material changes and commitments, if any, 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 this Report.
40. Extract of Annual Return:
The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure VIII and forms the part of this Report.
41. Acknowledgements:
Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued cooperation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.
For and on behalf of Board of Directors,
AJIT GULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House, Lai BahadurShastri Marg
Vikhroli (West), Mumbai 400 083
Place : Mumbai
Date : May 4, 2017
Mar 31, 2016
1. Report
The Directors are pleased to present the 90th Annual Report together
with the Audited Financial Statements for the year ended March 31,
2016.
2. Financial Highlights
(Rs. Crore)
Particulars Year ended Year ended
March 31, 2016 March 31, 2015
Turnover 4190.90 4,301.14
Profit before Interest,
Depreciation, Exceptional 798.74 781.43
Items, Other Income and Tax
Less: Finance Costs 689.88 651.13
135.85 150.30
Depreciation
Exceptional Item 26.48 -
852.21 801.43
Add: Other Income 187.76 134.87
Add/Less: Exchange
Gain/(Loss) (1.22) 12.45
Profit before Tax 133.07 127.32
Less: Tax Expense 48.10 45.67
Profit/(Loss) after Tax 84.97 81.65
Add: Balance brought
forward from last year 147.92 69.00
Less: Transferred to
Debenture Redemption
20.00 -
Reserve
Less: Impact of
depreciation/
amortisation - 2.73
(Refer Note 3.2 of the
Financial Statements)
Balance carried to
Balance Sheet 212.89 147.92
3. Dividend
As your Company is under CDR, it is necessary to conserve and optimise
use of resources to improve the health of the Company. Hence, your
Directors have not recommended any dividend for the financial year
ended March 31, 2016.
4. Operations
The turnover of the Company in the year is Rs. 4,190.90 crore as
compared to Rs. 4,301.14 crore in the previous year. The profit before
tax is Rs. 133.07 crore (including exceptional item) as compared to Rs.
127.32 crore for the previous year.
Your Directors are pleased to inform that during the year under report,
the Company has secured the following major contracts:
- Ramban to Banihal Section of NH 44, Jammu & Kashmir
Contract Value: Rs. 1783 crore
- Integrated Nuclear Recycle Plant, Maharashtra Contract Value: Rs. 942
crore
- Imphal Kangchup Tamenglong Road, Manipur Contract Value: Rs. 1114
crore
- Tapovan Vishnugad Hydroelectric Project, Uttarakhand
Contract Value: Rs. 634 crore
- Nikachhu Hydropower Plant, Bhutan Contract Value: Rs. 457 crore
- Tunnel No. 12, New Railway line Project Jiribam - Tupul, Manipur
Contract Value: Rs. 784 crore
The total balance value of works on hand as on March 31, 2016 is Rs.
18,123 crore.
Decisions are awaited from various clients for tenders submitted by the
Company for 13 packages amounting to about Rs. 10,334 crore (HCC share
Rs. 9301 crore). Tenders for various packages for 29 projects worth
Over Rs. 22,214 crore (HCC share Rs. 19,843 crore) are expected to be
submitted in the near future. The Company has also submitted
prequalification bids for 12 projects worth over Rs. 24,082 crore (HCC
share Rs. 22,053 crore) which are under evaluation.
Operations of Subsidiaries
i) Lavasa Corporation Ltd - Integrated Urban Development and Management
Lavasa has kept its rationale of developing a smart city for all and is
tailoring partnerships and tie ups with global leaders. Partnerships
are well in place and many of these projects are moving towards
completion.
In the hospitality space, the Accor group is successfully running its
operation with the two brands - Mercure Lavasa and the 1500 plenary
capacity Lavasa International Convention Centre (LICC). Another brand
of the Accor group - Novotel is scheduled for opening in April 2017.
Projects with renowned hospitality players like Formule 1, Holiday Inn,
Langham and Eaton amongst others are slated to follow in quick
succession.
As for the existing hospitality projects, Ekaant - The Retreat and
Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select
Dasve is in its eighth year of successful operations with occupancy at
66%, while Accor''s Mercure is in its seventh year of successful
operation with occupancy at 56%. In the tourism space, Lakeshore
Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports &
Academy are also functioning successfully. Lavasa has tied up with
former Indian cricketer and chief of the BCCI Selection Committee, Mr.
Sandeep Patil for building a Sports complex including a cricket stadium
for corporate tournaments. There have been talks to set up sports
academies for hockey, football, badminton, etc. at Lavasa. Other
tie-ups include advance discussions on building a Hollywood & Bollywood
Theme Park in Mugaon.
On the retail front, a significant area has already been leased.
Restaurants like Smokin Joes, Venkys Xpress, Subway, Cafe Coffee Day,
Baskin Robbins,
All American Diner, Granma''s Homemade Patisserie, Chor Bizarre,
Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani,
Paanchi Krunchyand Indulge have commenced operations. Many other non
F&B outlets such as Mapro and Charosa Wine Boutique have successfully
started operations including Lavasa''s first miniplex- Fun Square
Digital Cinema.
Significant progress was made in the education space. Christel House
Lavasa is into its seventh year of operations with 432 students.
2015-16 also saw launch of Phase 2 of Christel House till grade VIII.
Corporate entities such as EduSports, Yoga Blessing and Linguaphone
showed keen interest to contribute towards Christel House Lavasa School
by way of sports programmes, educational and Yoga workshops.
Ecole Hoteliere Lavasa started its seventh batch in June 2015-16. The
operation of Ecole Hoteliere was taken over by Expat Properties in May
2015. Ecole Hoteliere will start its eighth batch from July 25, 2016.
Christ University offering courses like Post Graduate Diploma in
Management (PGDM) program with specialization in Finance and Marketing
started operations two years ago, with a total of 102 students now in
its third batch, with a target of 60 students for the 2016-17 academic
program.
Knowledge Vistas Limited (KVL) is already running Little Millennium,
pre-primary school at Lavasa for last five years. It is also likely to
start the K12 School from academic year 2017-18. Abhinav Shiksha
Sansthan, New Delhi will start from the academic year 2018-19 across
the area of 62,500 sq. ft. Other educational partners like Symbiosis
Institute (Pune) are also in the process of launching their programs.
Residential sales have been sluggish in tune with the overall market
sentiment. Institutional Sales team is on the anvil of closing
transactions which would herald the entry of reputed corporations into
Lavasa city.
One such deal is with ''All that Jazz'', a leading retailer who will
bring reputed retail brands to make Lavasa an ideal shopping
destination. This deal will boost retail businesses at Lavasa and make
the promenade area more vibrant.
We are in advanced discussions with multiple educational institutes
keen to set up residential schools at Lavasa. Sanjeevani Institute
intends to bring in Kindergarten to Post Graduate courses. Likewise,
vocational training institute from Germany, ''Kosbe'' has been approached
and they are keen to start courses. Lavasa being a smart city offers
students ready on site learning of various subjects like waste
management and functioning of water treatment plants. Symbiosis
Institute has begun construction of a higher secondary education
facility.
Lavasa continued its focus on branding and communication activities in
2015-16. Emphasis through the year was on communicating that
development work at Lavasa has commenced with right earnest, raise
awareness about the planned city and its advantages. Positioning Lavasa
city as India''s first smart city, building preference and restoring
customer confidence in the project were the key goals.
The central government initiative to build smart cities across India
generated a great deal of excitement among Indian and foreign
stakeholders. The growing interest in smart cities augurs well for
Lavasa. We played host to a number of government, business and student
delegations keen on studying the Lavasa model of development.
As a proactive step to reach out to a wider audience, Lavasa was
presented as a ready Smart City model at various platforms, the most
prominent one being the Smart Cities India Exhibition at Delhi and the
13th Municipalika Smart Cities Exhibition at Jaipur.
Our spokespeople also participated in various other seminars and
discussions on Smart Cities.
Lavasa continued with the strategy of creating large events at Lavasa
to attract good tourists.
A four day festival of adventure, music, dance and entertainment was
organized as a lead up to the Republic Day on January 26, 2016. For the
first time, a hot air balloon took flight over the Dasve town,
Mentalist, Akshay Lakshmanan captivated audiences with his mind reading
session and wall painting activity by the students of Christel House
were the highlights of the Republic Day weekend festivities.
On May 1, 2015, Maharashtra Day was also celebrated with art & culture,
music & dance programmes highlighting the rich cultural heritage of
Maharashtra, along with a display of historic ancient Maratha arms &
weapons livened up the Dasve Promenade.
The second edition of Freedom, a festival of music, food and
entertainment saw 35,000 tourists enjoying good music, delectable
cuisines and great entertainment.
Christmas and New Year celebrations started with live musical and dance
performance at the Dasve promenade and Fortune Lawns. Renowned artist
Sharon Prabhakar along with DJ Rayjack, DJ-Cyborg,
DJ Sazz & DJ Shriki entertained the visitors.
Focus of the Public Relations campaign in 2015 was on building profile
of Lavasa as India''s first smart city and promoting the city as an
ideal tourist destination. Feature stories in print media and TV
channels, automobile magazines, national and international news portals
resulted in good visibility for Lavasa.
Lavasa was prominently featured as a Smart City in a number of media
reports. Trade magazine ''Realty'' featured Lavasa as one of India''s
premier Smart Cities, while Hindustan Times, the Pioneer, Deccan Herald
and Indiainfoline carried similar stories. Other trade supplements like
Times Property and multiple regional publications also featured Lavasa
as a Smart City.
CMD''s comment was widely circulated to media post launch of AMRUT in
Delhi, positioning him as the thought leader on Smart Cities. ''The
Property Guide'' guide show on leading business news channel ET Now did
a report on residential properties at Lavasa and also carried an
interview with the CEO.
Lavasa as a tourist destination was promoted through stories in
relevant travel and lifestyle media and through tie ups with TV
channels for shows that were shot at Lavasa. ELLE magazine did a 14
page photo shoot including the cover page at various scenic locations
in the city. Lavasa was covered extensively in ''Man Chimb Pavasan'' a
travel based programme on Saam Marathi channel. A photo-feature on
tourist options at Lavasa was also carried by leading news portals like
rediff.com and indiatoday.in.
Auto-trade media was specifically engaged to promote Lavasa among
bikers and adventure enthusiasts. Over 1000 bikers braved the rain and
travelled to Lavasa in June to celebrate World Motorcycle Day. This
activity garnered coverage in all media including mainline
publications, print and online auto media as well as regional
publications. Motoring World magazine conducted the jury round of their
annual car and bike awards at Lavasa which resulted in a six page story
all of them featuring cars and bikes shot at Lavasa.
Lavasa viewpoint on the SDO order on restoring tribal lands was
prominently reproduced by all print and TV media. Pune media was
engaged extensively during the summer season to sensitise them on the
water scarcity issue. Meetings with senior editors and the constant
engagement with beat reporters in Mumbai and Pune has also helped in
creating greater awareness of company''s stand on various crucial
issues.
Special Initiatives and events were highlighted regularly in mainstream
and trade media to build preference and recall. Celebrations at Lavasa
on Maharashtra Day, Independence Day weekend and initiative like the
Dreamcatchers Summer camp were covered by all major publications and
online portals. Launch of Jetovator, Segway and news about Lavasa
bagging the PATWAAward were widely publicized.
Each month, Lavasa looks, feels and acts more like a city. Lavasa city
now has a full-fledged operational Farmer''s market known as ''Hara
Bazar''; a two screen Movie theatre for visitors and residents; it has a
fully operating Post office, DTDC - courier service, a Hospital with
pharmacy and several new food and beverage establishments open for
business. It also has four operating hotels. Four additional hotels
will be opening soon which collectively will take the total number of
hotel rooms in Lavasa to more than 600. Lavasa has a Petrol Pump, two
bank branches along with ATMs, a state-of-art Convention Centre, a
Public Safety Centre with Fire Engine & crew,
Police outpost to be upgraded to a full-fledged Police station, Tourist
Information Center with a ''Hop On - Hop Off'' Bus facility; Multilevel
Car parking facility, Nature trail, Citizen Contact Center with 24x7
support to citizens through emergency and non-emergency contact
numbers, Rental housing for low income groups, simulated Golf Course
facilities; Water Sports facility with latest "Jetovator", Adventure
Sports facility, a modern Club with gym, Sports and Spa facilities,
Public Transport system for citizens, Schools for local population and
two operational College campuses. Additional Hotels, Retail shops and
Family Entertainment Centre facilities for tourists will be opened
shortly.
Building the infrastructure right, from the beginning, is a key
strategy to ensuring long-term livability. Drinking water at Lavasa is
fit for consumption, straight from the tap, without the need for
additional filtration. Sewage is treated in a manner that exceeds
government requirements and is subsequently reused for irrigation and
other non-potable uses. Lavasa''s power distribution grid is nearly
99.90% reliable and the young city is already on the cutting edge of
urban environmental sustainability initiatives. Over 50 kilometers of
well-maintained motorable roads are operational and more are being
constructed,
Lavasa has already opened parks and play areas to the public. The
e-governance portal Lavasa App, and Security Command Centre will play a
major role in communicating with citizens and providing services 24x7.
A round the clock Lavasa Citizen Contact Centre has been operational
since 2009 and envisions making the lives of citizens and visitors easy
and convenient. The Lavasa Citizen Contact Centre is a one-stop
information source for non emergency and emergency related services. It
provides a single window resolution for all customers'' needs and
visitors'' requests; is involved in proactive information distribution,
data collection and Property management services; Customer Satisfaction
Surveys and Customer handovers and possession.
The City Management Services (CMS) Department is equally dynamic in
seeking to coordinate services in this rapidly changing setting. It is
currently divided into seven specialist divisions including Customer
Services, Public Safety & Security, Enterprise Utilities, PublicWorks,
Administration & Finance, Community Development and Geographic
Information Systems & Management Information Systems.
The CMS department will slowly evolve into a new governance entity that
will, at some point, be the core of a new replicable governance model.
Lavasa aims to create this, so that the goals of the Master Plan can be
realized and sustained and the various public - private partnerships
can operate in a more consistent and predictable environment.
The CMS department meets on a monthly basis with a committee of
villagers throughout the project area. The Village Committee is the
first of several such citizen advisory groups that will together form a
key component of the Lavasa citizen and stakeholder engagement
mechanisms.
The Company had 10,574 acres of land including 455 acres of land on
lease by the end of last financial year i.e. March 31, 2015. This has
reduced to 10,515 acres as 59 acres of land in Mugaon was restored to
tribals by SDO, Maval during the year.
The Environment Management Plan (EMP) continues to be implemented as
per our Environment Impact Assessment (EIA) Report submitted to
Ministry of Environment, Forests & Climate Change (MoEF & CC), New
Delhi. Regular monitoring of environmental aspects such as air & noise
quality, water & sediment quality, soil quality, DG stack & noise
quality and biodiversity is being carried out by MoEF approved and NABL
accredited laboratory as per the conditions mentioned in the
Environment Clearance by MoEF & CC. All reports were found to be within
the prescribed limit of MPCB. The six-monthly Environmental Compliance
Report is being submitted to MoEF since 2012. The 7th compliance report
was submitted in June 2015 and the 8th compliance report was submitted
in December 2015 to MoEF, its Regional Office at Nagpur and Maharashtra
Pollution Control Board (MPCB) at Pune. Yearly Environment Statement, a
requirement as per the consent document of Maharashtra Pollution
Control Board (MPCB), is being submitted in the month of September
every year and the last report was submitted on September 30, 2015.
First town Dasve is ready with all basic infrastructure, such as access
roads, internal roads, water treatment plant, water distribution
network, sewage network, sewage treatment plant, telecom network and
services is operational. Till date around 1,200 properties are ready
for hand over to customers. Of these, around 972 units have already
been handed over to customers. Work on rest of properties - Lake View
apartments, Club View apartments, Delfino apartments, Valley View
apartments, Brook View apartments, Rental housing, Retail and hostel
tower B, Christel House Phase II, Novotel Hotel and Holiday Inn is in
progress.
Work on infrastructure for the second town of Mugaon has been
accelerated. Work on utilities is in progress. Work on 37 buildings at
Mugaon has commenced.
The improvement to the existing Mugaon-Tamhini Zilla Major District
road excluding the stretch crossing through Forest Land is completed. A
portion of this road will also form a part of the approach road for the
proposed tunnel between Tamhini and Mugaon. Work on the inter village
road from Mugaon to Dhamanohol is completed (6 kms). Rehabilitation
work on new gaothans has commenced. This rehabilitation will also help
augment the construction of the first phase of the apartments in
Mugaon.
Lavasa has also initiated a number of development and empowerment
programs for the local community. Some of the key initiatives include
provision of treated drinking water to 18 villages in the project area
at 72 locations on a daily basis. Calligraphy workshops, aptitude tests
and counseling for students of Zilla Panshad (ZP) schools, creche for
labor children; starting the Apollo Lavasa Primary Health Centre at
Bhoini and provision of free health check up, medicines and ambulance
service to villagers; monthly health and awareness camps for HIV/ AIDS,
malaria, nutrition, and water borne diseases. Employment and self
employment opportunities to the locals have also been provided.
ii) HCC Real Estate Ltd
HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company
is into the business of building residential and office complexes in
real estate sector.
HRL (Thane) Real Estate Limited
Your Company initiated the acquisition of 183 acres of land at
Ghodbunder Road, Thane for Integrated Township Development. Till date
the Development Agreement and Power of Attorney for 32 acres have been
executed in favour of Company. The Company continued its activity of
securing its position for land title and other documentation.
The Company has filed criminal case against Mr. Atul Sonawala and 8
other Directors of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is in
process for the said case.
HRL Township Developers Limited
No activities were carried out during the year. Your Company continued
its search process for joint development opportunities.
Nashik Township Developers Limited
During the year, the Company sold its land and completed all the land
related transactions. Further the Company is looking for joint
development opportunities in residential sectors since Nashik city is
growing industrially as well as economically.
Maan Township Developers Limited
The Company has acquired approx. 28 acres of land and the Development
Agreement and Power of Attorney have been executed in favour of the
Company. The Company in this year has decided to sell the land in piece
parcels. MOU has been signed with a Real Estate Company for sale of 5
Acres of land and has executed sale deed for 4 Acres.
Powai Real Estate Developers Limited
No activities were carried out during the year though the Company
continued to look for an opportunity to find ideal land parcels for
joint development in residential sectors
HCC Realty Limited
No activities were carried out during the year.
Panchkutir Developers Limited
During the year, your Company continued its efforts on the following
projects in residential sector:
Development of Vikhroli (E) land parcel: Out of the total land holding
of around 32 acres by the Panchkutir Developers Ltd. in Vikhroli (E),
the survey of tenements on Phase-I of 14.5 acres of land to ascertain
the development potential of the free sale component is completed. Out
of the 1960 slum residents, consent of about 1400 residents
representing more than 70% has already been obtained and the process
for forming the society is in progress. Proposal has been submitted to
SRA for Phase-I comprising of 750 tenants of 4 Societies.
Slum declaration of Phase-I land was challenged and the same has been
dismissed by the Special Slum Tribunal. Subsequently the litigant filed
Writ Petition challenging the above said Order of the Slum Tribunal in
High Court. High Court interalia asked tribunal for actual verification
of slum. But the litigant filed an appeal challenging the above said
Order of the Single Judge of High Court before the Divisional Bench.
Development of Powai land: MOU-cum- Development Agreement and Power of
Attorney were executed by land owner in favor of the SPV, Panchkutir
Developers Ltd a subsidiary of HCC for 12 acres of land. Due to non
performance by the land owner of the various obligations under the MOU-
cum-Development Agreement in spite of repeated reminders, we have been
advised by our solicitor to invoke the Arbitration clause forming part
of the MOU-cum-Development Agreement. Accordingly, Arbitration
proceedings have been initiated and till date evidence of Claimant''s
witnesses is completed and matter is now fixed for evidence of
Respondent.
During the pendency of the proceedings, Smt. Nayak, litigant has
submitted a proposal to settle the matter by making lump sum payment
which was accepted by the Company. Accordingly Consent Terms were
executed on November 16, 2015 and the Learned Arbitrator has passed an
award on December 15, 2015 in terms thereof. The Company has received
full payment by banker''s cheque and has executed cancellation Deeds of
MOU and lease deed.
iii) HCC Infrastructure
HCC Infrastructure Company Ltd., a wholly owned subsidiary of your
Company, operates its business through its subsidiaries HCC Concessions
Ltd. (HCON), HCC Power Ltd., and HCC Operations & Maintenance Ltd
(HOML). HCON develops and manages road assets, HOML operates
commissioned assets and HCC Power is exploring opportunities in the
power sector to leverage HCC''s capabilities. HCON has developed 6 NHAI
road concessions over the last 9 years. In the past financial year,
after the sale of two of its de-risked operational projects i.e. Nirmal
BOT Ltd and Dhule Palesner Tollway Ltd, the current portfolio has four
National Highway concessions with Rs. 5,000 crore asset base.
In line with your Company''s plan, the focus over the last fiscal year
has been on strong construction management, efficient operations and
raising capital. The management team at the Company has been
continuously working to achieve quality and timely execution to create
value for all its stakeholders with complete focus on financial
discipline. The Company continues to provide reliable, safe and world
class services to the country''s end users.
In 2011, the Xander group, a global investment firm, had acquired a
14.5% stake in HCON for Rs. 240 crore.
Current Road Portfolio:
HCON''s current portfolio comprises of four toll based projects: the
Delhi Faridabad Elevated Expressway (dfskywayÂ) on NH2, and three
contiguous sections of 250 km in West Bengal on NH34. Of these, Delhi
Faridabad Expressway and the first leg of NH34 development i.e. the
Baharampore Farakka Highways are operational. These two projects have
been operational for five and two years, respectively.
In the last financial year, your Company completed the stake sale of
two assets. The transaction for Nirmal BOT Ltd, the annuity project in
Telengana (erstwhile Andhra Pradesh) was completed in December 2015 and
the sale of Dhule Palesner Tollway, the 89 km highway on NH3 connecting
Agra and Mumbai, was consummated in October 2015.
Farakka Raiganj Highway, the second and largest leg of NH-34
development in West Bengal, achieved significant progress in the last
fiscal year. The project is expected to be commissioned in the next few
months while final completion is expected by the end of next fiscal
year. The last leg of NH34, Raiganj Dalkhola, which has been delayed
nearly 6 years due to delays in land acquisition, has seen significant
improvement in availability of Right of Way (ROW), and your Company has
approached the lenders consortium and NHAI for support in restarting
the project. While the NHAI has acknowledged the sizeable cost
increase, they remain reluctant on supporting the project with funds
including additional grant. In the interest of all stakeholders and
being prod by NHAI, the concessionaire has started basic earthworks,
but full scale mobilization will depend on appropriate support from
NHAI and lenders.
Material defaults by NHAI, largely due to delayed handing over of land
for all three NH-34 packages have resulted in the Concessionaire''s
filing of a claim of Rs. 1,528 crore as damages. Of these the Company
has started the arbitration proceedings for the Baharampore-Farakka and
Farakka-Raiganj projects. After muted growth due to the recent
economic slowdown, the traffic growth on Baharampore-Farakka has been
strong in the last financial year and NH-34 projects continue to be a
substantial source of value creation for your Company.
In the last financial year, ~1,600 km of highways were awarded on BOT
basis. The Ministry of Road Transport and Highways (MoRTH) and NHAI
have introduced a new Hybrid Annuity model for development of road
assets on PPP mode. Your Company is evaluating bidding for select
Hybrid Annuity projects, potentially in partnership with third parties.
Status of Operational Assets: Baharampore Farakka Highway (NH-34)
This is the first section of HCON''s Rs. 4,300 crore development of
NH-34 (West Bengal) from Baharampore to Dalkhola. The project stretch
is the arterial connectivity between North and South Bengal providing
nearest access to Kolkata and Haldia ports for the north eastern states
of India and neighbouring Bangladesh, Bhutan and Nepal. The traffic on
NH34 comprises 85-90% commercial traffic, carrying a diversified mix of
manufactured goods, sand, quarry stones, building materials, steel,
jute, food grains and tea.
The concession period for the project is 25 years, including a
construction period of 30 months. The project is being implemented with
an investment of Rs. 1,424 crore. The project achieved commercial
operations in May 2014 for partial length of the highway while land was
being acquired for the remaining portion. The total revenue for the
last fiscal year was Rs. 112 crore, an increase of 37% over the
previous financial year. The operations and maintenance is being
managed by HOML.
The Company has successfully implemented the 10x tolling for overloaded
vehicles since August 2014 as per NHAI circular, to prevent the
economic deterioration of the asset and to meet the increased costs due
to overloading.
The balance land for the Baharampore bypass was handed over in the
second quarter of last fiscal. The completion of the project is delayed
by 34 months as of March 2016, largely due to material defaults by NHAI
in providing land on a timely basis. The Final Completion (FCOD) is
expected to be completed after a delay of 56 months due to delayed
handover of ROW, tardy design clearances for major bridges and
structures, removal of various hindrances, utilities shifting, etc. The
Concessionaire has filed Rs. 578 crore worth of claims from the NHAI
for the damages suffered due to NHAI defaults. The Concessionaire will
submit further claims for increased costs and arbitration proceedings
are underway. The Company has filed the Statement of Claim before the
arbitration tribunal.
The Company has also achieved the sanctions from the lenders consortium
for cost overrun in the last fiscal to complete the project in the
absence of timely realization of claim from NHAI.
Delhi Faridabad Elevated Expressway (NH-2) (dfskywayÂ)
The Delhi Faridabad Elevated Expressway or dfskywayÂ, awarded in
2008, is a six lane 4.4 km elevated highway connecting Delhi and
Haryana at Badarpur, developed by HCON with an investment of nearly Rs.
600 crore. The dfskyway reduced travel time by over 40 minutes
through an extremely congested corridor that benefits residents and
inter- state traffic alike.
The project has a concession period of 20 years, including construction
period of 2 years. In the last fiscal year the Company suffered a
material impact due to a Supreme Court order for collecting
Environmental Compensation Charge from commercial vehicles entering New
Delhi (thereby discouraging their entry into the capital), resulting in
a substantial dip of ~40% in commercial vehicles. It is clear that the
Apex Court and the Delhi government are working hard to prevent
commercial vehicles using Delhi as a thoroughfare (admittedly for good
reason to check pollution), but which has unfortunately caused a
devastating impact and potential political event by permanently
curtailing revenues.
The Company is evaluating several options with the lenders including
restructuring options as per RBI guidelines and potential termination
with NHAI due to
Force Majeure event.
In order to enhance the revenue on this project and reduce maintenance
costs, the Company is also in the process of implementing 10x tolling
for overloaded vehicles in accordance with NHAI Fee Rules.
The Company has also submitted its proposal for deferment of premium
payments to improve liquidity, as well as a comprehensive proposal for
advertising along the project highway. The project is a signature
project in Delhi having very high visibility and the Company is
expecting significant revenues from the latter sources.
Status of Assets under Construction:
Farakka Raiganj Highway (NH-34)
Farakka Raiganj is the middle and largest section of the 250 km
development. This section is about 102 km in length and traverses
through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and
North Dinjapur districts of West Bengal. It also passes through various
small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before
Raiganj town. The concession period is 30 years, including a
construction period of 30 months. The project is being implemented with
an investment of Rs. 1,720 crore.
A substantial stretch of roads and structures of this second and
largest leg of NH-34 development has been completed and toll collection
is expected to commence by Q1 of financial year 2017. In the last year,
almost the entire land has been made available for construction after a
substantial delay of ~4 yrs by NHAI. The Provisional Completion (PCOD)
is estimated to be achieved 35 months after SFLD (Scheduled Four-laning
Date) while Final Completion (FCOD) will be delayed by a total of 44
months due to delayed handover of ROW, tardy design clearances for
major bridges and structures, removal of various hindrances, utilities
shifting, etc. As of June 30, 2015, the Concessionaire has filed Rs.
681 crore of claims from the NHAI for the damages suffered due to NHAI
defaults. The arbitration proceedings are underway and the Company has
filed its Statement of Claim and Rejoinder to the Statement of Defense
filed by the NHAI. The Concessionaire will submit further claims for
increased costs beyond June 30, 2015.
The Company has also achieved the sanctions from the lenders consortium
for cost overrun in the last fiscal to complete the project in the
absence of timely realization of claim from Authority.
Raiganj Dalkhola Highway
This is the smallest northern section of the NH-34 development which
has suffered the worst delay of nearly 6 years due to non-acquisition
of land. The project stretch starts at Raiganj (Km 398.000) and
terminates at the town of Dalkhola (Km 452.750).
The 50 km project stretch traverses through Raiganj and Dalkhola towns
in North Dinjapur district of West Bengal. It also passes through
various small villages like Soharai, Karandighi, Maheshbathna and ends
at the intersection of NH31. The concession period is 30 years which
includes a construction period of 30 months. The project cost has
increased to Rs. 1,204 crore and progress is contingent on appropriate
support from NHAI and Lenders.
In the last 1.5 years, a significant portion of land has been made
available for construction after a delay of nearly 6 years;
Pre-construction activities such as clearing & grubbing and earthwork
has started in the interest of all stakeholders.
As of June 30, 2014, the Concessionaire has filed Rs. 269 crore worth
of claims from the NHAI for the damages suffered due to NHAI defaults.
The Concessionaire will submit further claims for increased costs
beyond June 30, 2014. Since the realization of claim from the Authority
is a lengthy process, the SPV meanwhile had approached its Lenders to
assist in funding the large cost overrun and has received sanction from
the lead bank for additional funding. Once the financing arrangement
is in place with adequate support from NHAI, the Company will start
full-fledged construction work with an aim to complete within next 30
months.
iv) Steiner AG, Switzerland
Steiner AG, one of the leading project developers, total and general
contractors (TC/GC) in Switzerland, offers comprehensive services in
the fields of new constructions, refurbishment and Real Estate
Development.
Your Company owns 100% stake in Steiner AG through HCC Mauritius
Enterprises Limited and HCC Mauritius Investment Limited, wholly owned
subsidiaries.
As per IGAAP Accounting Standards, Steiner AG has registered a revenue
of CHF 636.8 million (Rs. 4255.3 crore) compared to CHF 853.9 million
(Rs. 5604.9 crore) in the previous year with a loss of CHF 0.98 million
(Rs. 6.5 crore) compared to a net profit of CHF 1.7 million (Rs. 10.8
crore) in the previous year. While as per Swiss GAAP Accounting
Standards, Steiner AG has registered a revenue of CHF 649.7 million
(Rs. 4341.8 crore) compared to CHF 854.1 million (Rs. 5605.8 crore) in
the previous year with a net profit of CHF 1.9 million (Rs. 12.7 crore)
compared to CHF 2.0 million (Rs. 13.1 crore) in the previous year.
The Company secured fresh orders worth CHF 850 million (Rs. 5843.6
crore). The order backlog was CHF 1.32 billion (Rs. 9074.8 crore) at
the end of the year. In addition to this, the company has secured
orders for more than CHF 700 million (Rs. 4812.4 crore), where the
contracts are yet to be signed. The closing cash balance of the company
was CHF 87.1 million (Rs. 598.7 crore)as per Swiss GAAP while as per
IGAAP closing cash balance was CHF 85.4 million (Rs. 587.1 crore),
reflecting the companys steady financial performance and strong
liquidity position.
Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs.
75.5 crore and loss of Rs. 5.9 crore in FY 2015-16.
v) Highbar Technologies Ltd
Highbar Technologies Ltd (''Highbar''), a wholly owned subsidiary of your
Company, is an Information Technology Company formed by your Company
with the vision of providing end-to-end IT solutions to Infrastructure
industry.
In the financial year 2015-16, which is just the sixth year of
operations, Highbar has been able to cross the total number of
customers beyond 100. This has been achieved when Highbar''s primary
customer segment, the infrastructure industry, is dealing with
slowdown.
Highbar is now providing SAP related services and IT infrastructure
services across multiple sectors like Manufacturing, BPO,
Agro-Chemicals in addition to Infrastructure, Real Estate, Retail,
Telecom, Consumer Products, PEB (Pre-engineered Buildings), Iron &
Steel etc. It has developed capabilities to successfully concurrently
execute large sized projects. Highbar has already started expanding its
reach in government sector by exploring opportunities with dedicated
team working on it. This year Highbar''s services for Government sector
made one of its prominent government customers go paperless.
Apart from this, Highbar has been honoured with two prominent industry
recognitions. First one is SAP Partner Awards in the category of ''Best
Pre-sales Customer Engagements'' for effectively engaging customers
through appropriate solutions across industries. Second one is
''ChannelWorld Premier 100 awards''. This award was given to the IT
players for being agile and adapting rapidly to the changing technology
and business landscape. Highbar has been recognised as one of the 100
agile IT players. This is the 2nd time that Highbar has been
recognised with Premier 100 awards. Agility is one of Highbar''s nine
brand drivers. With speed, agility and hunger for success. Highbar
Technologies has already created a niche for itself in infrastructure
and real estate industry by dominating ''IT for Infrastructure market''
with 100 customers in a short span of 6 years.
Highbar has grown its IT capabilities and the expertise in various
areas including ERP (Enterprise Resource Planning), Business
Intelligence and dashboards, cloud offerings through Highbar
Cloud Connect, Employee Portals, CRM (Customer Relationship Management),
DMS (Document Management System), BPC (Business Planning &
Consolidation), Treasury Management, FLM (File Lifecycle Management).
It has also ventured into new areas like SAP HANA, S/4 HANA, Simple
Finance, SAP Fiori, Screen Persona, Mobility Solutions, e-procurement
etc. The business has now established and is ready to expand in
multiple industries and geographies like India, Middle East, Europe and
Africa. Highbar''s first customer in Switzerland has already gone live
on SAP system and started garnering benefits of SAP.
Services provided by Highbar have gone much beyond SAP into process
consulting and IT infrastructure support such as data-centre and
networking. Solutions like Highbar RapidStart and Highbar RapidStart
Analytics are based on templatised approach to ERP and Business
Intelligence respectively and are intellectual properties (IP) assets
of Highbar. Highbar remains as preferred partner for SAP implementation
and re-implementation for the infrastructure industry. Eleven numbers
of Highbar''s implementations have now become global case studies,
published on SAP''s website as reference cases.
Highbar continues to support your Company''s group companies including
your Company, HCC Infrastructure, HCC Real Estate, Lavasa and Steiner
India across the IT value chain. Your Company''s SAP Customer Centre of
Expertise (CCOE) was certified by SAP this year and benchmarked amongst
top 1% out of 2,93,000 SAP customers globally. With a view to be at the
forefront of IT, entire SAP systems at your Company viz. ERP, CRM, DMS
etc were upgraded to the latest versions, thereby ensuring SAP support
for at least the next ten years i.e. till 2025 along with access to new
business functionalities which were hitherto not available. The
underlying hardware, Operating systems and Database were also upgraded
and is now scalable for SAP usage at much higher levels and at better
speed. The drive undertaken for last few years to harness IT for
bringing about operational efficiency and cost controls continues with
the same vigour through further business process automations, process
refinements and tighter controls supported by intelligent reporting and
alert mechanisms.
Highbar, the successful spin-off from your Company''s internal IT
function, has established a proper scalable organization structure with
all the functions in place to facilitate and sustain future growth. It
is on the course towards accomplishing its vision of being ''the most
preferred end-to-end IT solution provider'' for infrastructure industry.
5. Subsidiaries, Joint Ventures and Associate Companies
During the year under review, the following changes have taken place
with respect to subsidiaries, joint Ventures and Associate Companies:
a) HCC Power Ltd (the wholly owned step-down subsidiary company) has
incorporated HCC Energy Ltd, a wholly owned subsidiary company on
August 11, 2015, making it a subsidiary of your Company from the date
of its incorporation.
b) Ecomotel Hotel Ltd (Associate Company) has become a subsidiary
(step-down subsidiary Company) of your Company w.e.f. July 15, 2015.
c) Apollo Lavasa Health Corporation Ltd (step-down subsidiary Company)
and Starlit Resort Ltd (step- down subsidiary Company) have become an
Associate Company w.e.f. November 16, 2015 and May 14, 2015
respectively.
d) HCC Concessions Ltd (the step-down subsidiary company) has
transferred its 74% stake in Nirmal BOT Ltd on December 23, 2015;
accordingly Nirmal BOT Ltd ceases to be a subsidiary of your Company
w.e.f. December 23, 2015.
e) HCC Concessions Ltd (the step-down subsidiary company) has
transferred its equity stake in Dhule Palesner Tollway Ltd, a joint
venture company on 29.10.2015; accordingly HCC ceases to hold any share
in the said joint venture Company w.e.f. from 29.10.2015.
f) Sirrah Palace Hotels Ltd (step-down subsidiary Company) has ceased
to be a subsidiary of your Company w.e.f. November 6, 2015.
Subsidiary Companies
1. Western Securities Ltd
2. HCC Aviation Ltd
3. HCC Construction Ltd
4. Highbar Technologies Ltd
5. Highbar Technologies FZ LLC
6. HCC Mauritius Enterprises Limited
7. HCC Mauritius Investment Limited
8. Steiner AG (Formerly known as Karl Steiner AG)
9. Steiner Promotions et Participations SA
10. VM ST AG
11. Eurohotel SA
12. Steiner (Deutschland) GmbH
13. Steiner Leman SAS
14. SNC Valleiry Route De Bloux
15. Steiner India Ltd
16. HCC Infrastructure Company Ltd
17. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
18. Badarpur Faridabad Tollway Ltd
19. Baharampore - Farakka Highways Ltd
20. Farakka - Raiganj Highways Ltd
21. Raiganj - Dalkhola Highways Ltd
22. Dhule Palesner Operations & Maintenance Ltd
23. HCC Power Ltd
24. HCC Energy Ltd
25. HCC Operations & Maintenance Ltd
26. Narmada Bridge Tollway Ltd
27. HCC Real Estate Ltd
28. HRL Township Developers Ltd
29. HRL (Thane) Real Estate Ltd
30. Nashik Township Developers Ltd
31. Maan Township Developers Ltd
32. Charosa Wineries Ltd
33. Powai Real Estate Developers Ltd
34. HCC Realty Ltd
35. Pune-Paud Toll Road Company Ltd
36. Panchkutir Developers Ltd
37. Lavasa Corporation Ltd
38. Lavasa Hotel Ltd
39. Lakeshore Watersports Company Ltd
40. Dasve Convention Centre Ltd
41. Dasve Business Hotel Ltd
42. Dasve Hospitality Institutes Ltd
43. Lakeview Clubs Ltd
44. Dasve Retail Ltd
45. Full Spectrum Adventure Ltd
46. Spotless Laundry Services Ltd
47. Lavasa Bamboocrafts Ltd
48. Green Hill Residences Ltd
49. My City Technology Ltd
50. Reasonable Housing Ltd
51. Future City Multiservices SEZ Ltd
52. Rhapsody Commercial Space Ltd
53. Valley View Entertainment Ltd
54. Warasgaon Tourism Ltd
55. Our Home Service Apartments Ltd
56. Warasgaon Power Supply Ltd
57. Sahyadri City Management Ltd
58. Hill City Service Apartments Ltd
59. Kart Racers Ltd
60. Warasgaon Infrastructure Providers Ltd
61. Nature Lovers Retail Ltd
62. Osprey Hospitality Ltd
63. Warasgaon Valley Hotels Ltd
64. Rosebay Hotels Ltd
65. Mugaon Luxury Hotels Ltd
66. Warasgaon Assets Maintenance Ltd
67. Hill View Parking Services Ltd
68. Whistling Thrush Facilities Services Ltd
69. Verzon Hospitality Ltd
70. Ecomotel Hotel Limited Integrated Joint Ventures
1. HCC-L&T Purulia Joint Venture
2. HCC Samsung Joint Venture CC-34
3. Alpine Samsung HCC Joint Venture
4. Alpine HCC Joint Venture
5. Nathpa Jhakri Joint Venture
6. Kumagai -Skanska-HCC Itochu Group
7. ARGE Prime Tower, Zurich Associate Companies
1. Nirmal BOT Limited
2. Warasgoan Lake View Hotels Limited
3. Andromeda Hotels Limited
4. Knowledge Vistas Limited
5. Bona Sera Hotels Limited
6. Apollo Lavasa Health Corporation Ltd
7. Starlit Resort Ltd
8. Evostate AG
9. Projektentwicklungsges,
Parking Kunstmuseum AG.
10. MCR Managing Corp. Real Estate AG
The details as required under Rule 8 of the Companies (Accounts) Rules,
2014 regarding the performance and financial position of each of the
Subsidiaries, Associates and Joint Venture Companies of the Company
forms part of the Consolidated Financial Statements of the Company for
the financial year ended March 31, 2016.
The Company has formulated a Policy for determining material
subsidiaries, which is uploaded on the website of the Company i.e.
www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/
HCC Policy for determining Material Subsidiaries. pdf
6. Qualified Institutions Placement of Equity Shares (QIP) / Change in
Share Capital
During the year under review, your Company''s Authorised Share Capital
has remained unchanged at Rs. 100,00,00,000 (Rupees One hundred crore)
comprising 90,00,00,000 Equity Shares of Rs. 1 each and 1,00,00,000
Redeemable Cumulative Preference Shares of Rs. 10 each.
On April 10, 2015, your Company has issued and allotted 13,33,32,800
Equity Shares of Rs. 1 each at an issue price of Rs. 30 per Equity
Share (including premium of Rs. 29 per equity share) for an amount
aggregating Rs. 399,99,84,000 to Qualified Institutional Buyers in
accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2009 and Section 42 of the Companies Act,
2013 and the Rules made thereunder.
Post the QIP Issue, the present paid up Equity Share Capital of the
Company is Rs. 77,91,58,906 which comprises 77,91,58,906 Equity Shares
of Rs. 1 each.
7. Public Deposits
Your Company has not accepted any deposits from the public, or its
employees during the year under review.
8. Particulars of Loans, Guarantees & Investments
Particulars of Loans, Guarantees and Investments made during the year
as required under the provisions of Section 186 of the Companies Act,
2013 (Hereinafter "The Act") are given in the notes to the Standalone
Financial Statements.
Also, pursuant to Schedule V of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirement) Regulations,
2015, particulars of Loans/Advances given to Subsidiaries have been
disclosed in the notes to the Standalone Financial Statements.
9. Employee Stock Option Scheme (ESOP)
As on March 31, 2016, 16,54,630 stock options are outstanding, in
aggregate, for exercise as per the exercise schedule and are
exercisable at a price of Rs. 52.03 per stock option.
Each option, when exercised, as per the exercise schedule, would
entitle the holder to subscribe for one equity share of the Company of
face value Rs. 1 each.
During the year under review, no options got vested in the employees of
the Company. 15,84,700 stock options got lapsed between April 1, 2015
and March 31, 2016.
The particulars with regard to the ESOPs as on March 31, 2016 as
required to be disclosed pursuant to the provisions of Rule 12 (9) of
the Companies (Share Capital and Debentures) Rules, 2014, are set out
in Annexure I to this Report.
10. Consolidated Financial Statements
In accordance with the Companies Act, 2013, Accounting Standard (AS) -
21 on Consolidated Financial Statements read with AS - 23 on Accounting
for Investments in Associates and AS - 27 on Financial Reporting of
Interests in Joint Ventures and as prescribed by Regulation 33 of the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (hereinafter referred to as
"SEBI Listing Regulations"), the Audited Consolidated Financial
Statements are provided in this Annual Report.
Pursuant to Section 129(3) of the Companies Act, 2013, a statement
containing the salient features of the financial statements of each of
the subsidiary and joint venture in the prescribed form AOC-1 is
annexed to the Annual Report.
Pursuant to Section 136 of the Companies Act, 2013, the financial
statements of the subsidiaries are kept for inspection by the
shareholders at the Registered Office of the Company. The said
financial statements of the subsidiaries are also available on the
website of the Company www.hccindia.com under the Investors Section.
11. Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adheres to the Corporate Governance requirements as
stipulated by Securities and Exchange Board of India(SEBI).
The report on Corporate Governance as prescribed in Schedule V (C) of
the SEBI Listing Regulations forms an integral part of this Annual
Report. The requisite certificate from the Auditors of the Company
confirming compliance with the conditions of Corporate Governance
alongwith a declaration signed by the Chairman & Managing Director
stating that the members of the Board of Directors and Senior
Management personnel have affirmed compliance with the respective codes
of conduct of the Board of Directors and Senior Management is attached
to the report on Corporate Governance.
12. Directors
Mr. D. M. Popat, Director of the Company, who was liable to retire by
rotation at the 89th Annual General Meeting of the Company held last
year had expressed his intention not to seek re-election as a Director
of the Company and accordingly had retired from his directorship on
July 14, 2015.
After a prolonged illness, Mr. Popat passed away on December 23, 2015.
The Board of Directors has expressed its deep regret and offered
condolences on the sad demise of Mr. Popat.
Mr. Popat was a Senior partner at M/s Mulla & Mulla & Craigie Blunt &
Caroe, Solicitors & Advocates since 1969 and was one of the most
eminent solicitors of the country. He was associated with our Company
for a very long time.
The Board has also placed on record the invaluable contribution of Late
Mr. D. M. Popat to the Board and the Company.
The Board of Directors of the Company at its meeting held on May 2,
2016 has appointed Mr. Rajgopal Nogja as the Group Chief Executive
Officer (Group CEO) of the Company w.e.f. May 3, 2016.
Pursuant to his appointment, Mr. Nogja has stepped down from the Board
as Group COO & Whole-time Director w.e.f. May 2, 2016.
The Board placed on record its appreciation for the valuable services
rendered and contribution made by Mr. Rajgopal Nogja during his tenure
as Whole-time Director (prior to his appointment as Group CEO) of the
Company.
Mr. N. R. Acharyulu was employed with our Company as Chief Business
Development Officer and on conclusion of his contract period, the Board
of Directors has appointed Mr. N. R. Acharyulu (DIN: 02010249) as an
Additional Director on the Board of the Company in the category of
Non-Executive Director, who is liable to retire by rotation, with
effect from May 2, 2016, in accordance with Section 161 of the
Companies Act, 2013 read with Article 88 of the Articles of Association
of the Company.
The Company has received a Notice under Section 160 of the Companies
Act, 2013, from a member signifying an intention to propose Mr. N. R.
Acharyulu as a candidate for the office of Director at the forthcoming
Annual General Meeting.
Brief Profile of the Director seeking appointment has been given in the
Explanatory Statement to the Notice of the ensuing Annual General
Meeting.
The Company has received Form DIR-8 from all Directors pursuant to
Section 164(2) and Rule 14(1) of Companies (Appointment and
Qualification of Directors) Rules, 2014.
The Independent Directors of the Company viz.,
Mr. Rajas R, Doshi, Mr. Ram P. Gandhi, Mr. Sharad M. Kulkarni, Mr.
Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary
declarations to the Company under Section 149(7) of the Act, confirming
that they meet with the criteria of Independence as prescribed for
Independent Directors under Section 149(6) of the Act and Regulation
16(b) of the SEBI Listing Regulations.
13. Key Managerial Personnel
Following persons are the Key Managerial Personnel of the Company
pursuant to Section 2(51) and Section 203 of the Act, read with the
Rules framed thereunder:
i) Mr. Ajit Gulabchand, Chairman and Managing Director
ii) Mr. Rajgopal Nogja, Group Chief Executive Officer
iii) Mr. Arun V. Karambelkar, President & CEO - E&C
iv) Mr. Praveen Sood, Chief Financial Officer of the Company designated
as Group CFO & EVP - HCC Group Office
v) During the year under review, Mr. V. P. Kulkarni, resigned as
Company Secretary with effect from July 30, 2015 and therefore he was a
Key Managerial Personnel till July 30, 2015
The Board placed on record its appreciation for the valuable services
rendered and contribution made by Mr. Vithal P. Kulkarni during his
long tenure as Company Secretary of the Company.
vi) Mr. Sangameshwar Iyer was appointed by the Board of Directors, in
place of Mr. V. P. Kulkarni, as the Company Secretary of the Company
with effect from July 31, 2015 and thereby is designated as Key
Managerial Personnel with effect from the said date.
vii) Mr. Rajgopal Nogja was appointed by the Board of Directors of the
Company at its meeting held on May 2, 2016, as the Group Chief
Executive Officer (Group CEO) of the Company w.e.f. May 3, 2016.
Pursuant to his appointment, Mr. Nogja has stepped down from the Board
as Group COO & Whole-time Director w.e.f. May 2, 2016.
Remuneration and other details of the said Key Managerial Personnel for
the financial year ended March 31, 2016 are mentioned in the Extract of
the Annual Return which is attached to the Board''s Report.
14. Board Committees
The Board of Directors of your Company had already constituted various
Committees and approved their terms of reference/role in compliance
with the provisions of the Companies Act, 2013 and Listing Agreement
(applicable uptil November 30, 2015)/ SEBI Listing Regulations
(applicable from December 1, 2015) viz. Audit Committee, Nomination and
Remuneration Committee, Stakeholders Relationship Committee and CSR
Committee.
During the financial year 2014-15, in accordance with the provisions of
the erstwhile Clause 49 of the Listing Agreement, the Board had
voluntarily constituted the Risk Management Committee.
All decisions pertaining to the constitution of Committees, appointment
of members and fixing of terms of reference / role of the Committees
are taken by the Board of Directors.
Details of the role and composition of these Committees, including the
number of meetings held during the financial year and attendance at
meetings, are provided in the Report on Corporate Governance in the
Annual Report.
15. Meetings
A calendar of Board Meetings, Annual General Meetings and Committee
Meetings is prepared and circulated in advance to the Directors of your
Company.
The Board of Directors of your Company met 4 times during 2015-16. The
meetings were held on April 30, 2015, July 30, 2015, October 29, 2015
and January 28, 2016. The maximum time gap between any two consecutive
meetings did not exceed one hundred and twenty days.
16. Familiarisation Programme of Independent Directors
In compliance with the requirements of SEBI Listing Regulations, the
Company has put in place a familiarization program for Independent
Directors to familiarize them with their role, rights and
responsibility as Directors, the operations of the Company, business
overview etc.
The details of the familiarization program are explained in the
Corporate Governance Report and the same is also available on the
website of the Company and can be accessed by web link
http://www.hccindia. com/pdf/familiarisation_program_for_independent_
directors.pdf
17. Performance Evaluation
Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule
IV of the Companies Act, 2013 and Regulation 17 of the SEBI Listing
Regulations, Annual Performance Evaluation of the Directors as well as
that of the Audit Committee, Nomination and Remuneration Committee and
Stakeholders Relationship Committee has been carried out.
The Performance Evaluation of the Independent Directors was carried out
by the entire Board and the Performance Evaluation of the Chairman and
Non-Independent Directors was carried out by the Independent Directors.
18. Independent Directors Meeting
During the year under review, the Independent Directors of the Company
met on March 29, 2016, inter-alia, to discuss:
i) Evaluation of performance of Non-Independent Directors and the Board
of Directors of the Company as a whole.
ii) Evaluation of performance of the Chairman of the Company, taking
into account the views of Executive and Non-Executive Directors.
iii) Evaluation of the quality, content and timelines of flow of
information between the Management and the Board that is necessary for
the Board to effectively and reasonably perform its duties.
19. Criteria for selection of candidates for appointment as Directors,
Key Managerial Personnel and Senior Management Personnel
The Nomination and Remuneration Committee has laid down well-defined
criteria for selection of candidates for appointment as Directors, Key
Managerial Personnel and Senior Management Personnel in the Nomination
and Remuneration Policy recommended by them and approved by the Board
of Directors, which is attached to the Board''s Report as Annexure II.
20. Remuneration Policy for Directors, Key Managerial Personnel and
Senior Management Employees
The Nomination and Remuneration Committee has laid down the policy for
remuneration of Directors, Key Managerial Personnel and Senior
Management Personnel in the Nomination and Remuneration Policy
recommended by it and approved by the Board of Directors, which is
attached to the Board''s Report as Annexure II.
21. CSR Policy
The brief outline of the Corporate Social Responsibility (CSR) Policy
as recommended by the CSR Committee of the Directors and approved by
the Board of Directors of the Company and the initiatives undertaken by
the Company on CSR activities during the year are set out in Annexure
IV of this report in the format prescribed in the Companies (Corporate
Social Responsibility Policy) Rules, 2014. The CSR policy is attached
to this Report as Annexure III and is available on the website of the
Company i.e. www.hccindia.com
22. Related Party Transactions
All related party transactions entered during the year were in the
ordinary course of business and on an arm''s length basis.
The related party transactions attracting compliance under Section 177
of the Companies Act, 2013 and / or erstwhile Clause 49 of the Listing
Agreement / Regulation 23 of the SEBI Listing Regulations were placed
before the Audit Committee for approval.
There are no transactions to be reported in Form AOC-
2 in terms of Section 134 of the Act read with Rule 8 of the Companies
(Accounts) Rules, 2014.
There were no related party transactions which were placed for prior
omnibus approval of the Audit Committee.
A statement of all related party transactions entered was presented
before the Audit Committee on a quarterly basis, specifying the nature,
value and any other related terms and conditions of the transactions.
Further the details of the transactions with Related parties are
provided in the Company''s financial statements in accordance with the
Accounting Standards.
The Related Party Transactions Policy as approved by the Board of
Directors of the Company has been uploaded on the website of the
Company at http:// www.hccindia.com/pdf/HCC_Policy_for_Related_
Party_Transactions.pdf
23. Directors'' Responsibility Statement
In accordance with the provisions of Section 134 (5) of the Companies
Act, 2013, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any.
b) the selected accounting policies were applied consistently and the
Directors 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, 2016 and of the profit of the Company for the
year ended on that date.
c) 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.
d) the annual accounts have been prepared on a going concern basis.
e) the internal financial controls have been laid down to be followed
by the Company and such controls are adequate and are generally
operated effectively during the year.
Internal financial control over carrying cost of investment in
subsidiaries and recoverability of dues from subsidiaries, is covered
under internal financial control.
The management is of the view that diminution in the carrying cost of
investment in subsidiaries, if any, is temporary in nature and
recoverability of dues from subsidiaries are good. The view of the
management is also supported by a third party expert report.
However, in view of the uncertainties involved, your Auditors have
given a qualified opinion in their report in this regard, without
quantifying the impact. Other than this, your Auditors have opined that
the Company has in, all material respects, maintained adequate internal
financial controls over financial reporting (IFCoFR) and that they were
operating effectively.
This response by Directors is based on the management note given under
Para 29 of this report.
f) proper systems to ensure compliance with the provisions of all
applicable laws have been devised and such systems are adequate and are
operating effectively.
24. Industrial Relations
The industrial relations continued to be generally peaceful and cordial
during the year.
25. Transfer to Investor Education and Protection Fund (IEPF)
Your Company has, during the year under review, transferred a sum of
Rs. 11,95,382 to Investor Education and Protection Fund, in compliance
with the provisions of Section 125 of the Companies Act, 2013. The said
amount represents dividend for the year 2007-08 which remained
unclaimed by the members of the Company for a period exceeding 7 years
from its due date of payment.
26. Particulars of Employees and other additional information.
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197 of Companies Act, 2013 and Rule 5 (1)
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 has been appended as Annexure V to this Report.
The information as required under Rule 5 (2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 will
be provided upon request by any member of the Company. In terms of
Section 136 (1) of the Companies Act, 2013, the Report and the Accounts
are being sent to the members excluding the said Annexure. Any member
interested in obtaining copy of the same may write to the Company
Secretary at the Registered Office of the Company.
27. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo.
The information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required to be
disclosed under the Companies (Accounts) Rules, 2014, is given in
Annexure VI forming part of this Report.
28. Statutory Auditors
The Members of the Company had, at the 88th Annual General Meeting
("AGM") held on June 20, 2014, approved the appointment of M/s Walker
Chandiok & Co. LLP, Chartered Accountants, Mumbai, bearing Firm
Registration No. 001076N as the Statutory Auditors of the Company, to
hold office from the conclusion of that AGM until the conclusion of the
6th AGM held thereafter (subject to ratification of the appointment by
the Members at every AGM held after the above said AGM).
Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that
appointment of the Auditor shall be subject to ratification by the
members at every Annual General Meeting till the expiry of the term of
the Auditor.
At the 89th AGM held on July 14, 2015, the shareholders had ratified
the appointment of M/s Walker Chandiok & Co. LLP, Chartered
Accountants, Mumbai for the period covering their second year of
appointment viz., from the conclusion of the last AGM held on July 14,
2015 until the conclusion of the Annual General Meeting to be held in
the financial year 2016-17.
The said appointment of M/s Walker Chandiok & Co. LLP, Chartered
Accountants, Mumbai covering their third year of appointment viz, from
the conclusion of the ensuing AGM in financial year 2016-17 until the
conclusion of the next Annual General Meeting to the held in the
financial year 2017-18, has to be ratified by Members at the
forthcoming AGM and accordingly the said proposal is being placed for
members'' ratification.
As required under Section 139 of the Companies Act, 2013, the Company
has obtained a written consent from the Auditors to such continued
appointment and also a certificate from them to the effect that their
appointment, if ratified, would be in accordance with the conditions
prescribed under the Companies Act, 2013 and the Rules made thereunder,
as may be applicable.
29. Statutory Auditors'' Remarks
a. Statutory Auditors Qualification:
The Auditors'' Report to the Members on the Audited Financial Results of
the Company for the financial year ended March 31, 2016 contains the
following qualification(s):
As stated in Note 32 to the Standalone financial statements, the
Company''s long term investments as at March 31, 2016 include
investments aggregating Rs. 474.37 crore in its subsidiaries, namely,
HCC Real Estate Limited and Lavasa Corporation Limited; and the long
term loans and advances, non-current assets and other current assets as
on that date include dues from such subsidiaries aggregating Rs. 554.17
crore, Rs. 32.51 crore and Rs. 13.35 crore, respectively, being
considered good and recoverable by the management. However, these
subsidiaries have accumulated operational losses and their net worth is
fully/ substantially eroded as at March 31, 2016. Further, such
subsidiaries are facing liquidity constraints due to which they may not
be able to realize projections made as per their business plans. In the
absence of sufficient appropriate evidence, we are unable to comment
upon the carrying value of these investments and recoverability of the
aforesaid dues and the consequential impact, if any, on the
accompanying standalone financial statements.
b. Statutory Auditor''s Qualification on the Internal Financial
Controls relating to the above matter
The Auditors'' Report to the Members on the Internal Financial Controls
over financial reporting (IFCoFR) with respect to the Audited Financial
Results of the Company for the financial year ended March 31, 2016
contains the following qualification(s):
In our opinion, according to the information and explanations given to
us and based on our audit procedures performed, the following material
weakness has been identified in the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting as at March 31, 2016:
The Company did not have appropriate internal financial controls over
financial reporting in respect of its assessment of (a) ''other-than-
temporary'' diminution in the carrying value of the Company''s long-term
investments in its subsidiaries and (b) recoverability of long-term
loans and advances, non-current assets and other current assets due
from such subsidiaries. The inadequate supervisory and review controls
over Company''s process in respect of its aforesaid assessment in
accordance with the accounting principles generally accepted in India
could potentially result in a material misstatement in the carrying
value of investment in such subsidiaries and the aforesaid dues from
such subsidiaries and consequently, also impact the profit after tax.
In our opinion, except for the effects of the material weakness
described above in the Basis for Qualified Opinion paragraph, the
Company has, in all material respects, maintained adequate IFCoFR as at
March 31, 2016, based on the internal control over financial reporting
criteria established by the Company considering the essential
components of internal control stated in the Guidance note and were
operating effectively as at March 31, 2016.
We have considered the material weakness identified and reported above
in determining the nature, timing, and extent of audit tests applied in
our audit of the March 31, 2016 standalone financial statements of the
Company, and the material weakness has affected our opinion on the
standalone financial statements of the Company and we have issued a
qualified opinion on the standalone financial statements.
Management Note
The Company, as at March 31, 2016, has (i) an investment amounting to
Rs. 474.36 crore (31 March 2015: Rs. 474.36 crore), long term loans and
advances Rs. 443.96 crore (31 March 2015:
Rs. 404.06 crore), other non-current assets Rs. 19.43 crore (31 March
2015: Rs. 25.01 crore) and other current assets Rs. 5.07 crore (31
March 2015: Rs. 3.43 crore) in HCC Real Estate Limited (HREL) which is
holding 68.70% share in Lavasa Corporation Limited (LCL) and (ii) an
investment amounting to Rs. 0.01 crore (March 31, 2015:
Rs. 0.01 crore), long term loans and advances Rs. 110.21 crore (March
31, 2015:Nil), other non- current assets Rs. 13.08 crore (March 31,
2015:
Rs. 14.30 crore) and other current assets Rs. 8.28 crore (31 March
2015: Rs. 77.24 crore) in LCL. While such entities have incurred
losses during its initial years and consolidated net-worth of all these
entities as at March 31, 2016 has been substantially/fully eroded, the
underlying project in such entities are in the early stages of
development and are expected to achieve adequate profitability on
substantial completion and / or have current market value of certain
properties which are in excess of the carrying values, hence net-worth
of these subsidiaries does not represent its true market value.
Therefore, the decline in the value of above investments is considered
to be temporary in nature and the loans and advances, non-current
assets and other current assets together with the interest thereon are
good and recoverable.
Based on the above, management believes that the Company''s internal
financial control in respect of assessment of the carrying value of
investment, recoverability of loans and advances, current and
non-current assets in subsidiaries were operating effectively and there
is no material weakness in such controls and procedures.
30. Secretarial Audit
Secretarial Audit for the financial year 2015-16 was conducted by M/s
BNP Associates, Company Secretaries in Practice in accordance with the
provisions of Section 204 of the Companies Act, 2013. The Secretarial
Auditor''s Report is attached to this Report as Annexure VII. There are
no qualifications or observations or remarks made by the Secretarial
Auditor in his Report.
31. Cost Audit
In compliance with the provisions of Section 148 of the Companies Act,
2013, the Board of Directors of the Company at its meeting held on July
30, 2015 had appointed M/s Joshi Apte & Associates, Cost Accountants as
Cost Auditors of the Company for the financial year 2015-16. In terms
of the provisions of Section 148(3) of the Companies Act, 2013 read
with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014,
the remuneration of the Cost Auditors has to be ratified by the
members. Accordingly, necessary resolution is proposed at the ensuing
AGM for ratification of the remuneration payable to the Cost Auditors
for financial year 2015-16.
32. Risk Management
Pursuant to the requirement of Section 134 (3)(n)of the Companies Act,
2013, the Company has already in place a Risk Management Policy.
The Company has a robust Business Risk Management (BRM) framework to
identify and evaluate business risks and opportunities. This framework
seeks to create transparency, minimise adverse impact on the business
objectives and enhance your Company''s competitive advantage.
The business risk framework defines the risk management approach across
the enterprise at various levels including documentation and reporting.
The framework has different risk models which help in identifying risks
trend, exposure and potential impact analysis at a Company level.
In accordance with the provisions of the erstwhile Clause 49 of the
Listing Agreement, during the financial year 2014-15, the Board had
voluntarily constituted the Risk Management Committee.
33. Internal Control Systems and their adequacy
The Company has Internal Control Systems, commensurate with the size,
scale and complexity of its operations. The Internal Audit Department
monitors and evaluates the efficacy and adequacy of internal control
systems in the Company, its compliance with operating systems,
accounting procedures and policies within the Company. Based on the
report of internal audit function, process owners undertake corrective
action in their respective areas and thereby strengthen the controls.
Significant observations and corrective actions thereon are presented
to the Audit Committee from time to time.
34. Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls
commensurate with the size, scale and complexity of its operations. The
Company has policies and procedures in place for ensuring proper and
efficient conduct of its business, 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 information. The Company has adopted accounting
policies, which are in line with the Accounting Standards and the
Companies Act 2013.
35. Vigil Mechanism Policy
The Company has a vigil mechanism policy to deal with instances of
fraud and mismanagement, if any. The vigil mechanism policy is
uploaded on the website of the Company at www.hccindia.com
36. Sexual Harassment
HCC has always believed in providing a conducive work environment
devoid of discrimination and harassment including sexual harassment.
HCC has a well formulated Policy on Prevention & Redress of Sexual
Harassment. The objective of the policy is to prohibit, prevent and
address issues of sexual harassment at the workplace. This policy has
striven to prescribe a code of conduct for the employees and all
employees have access to the Policy document and are required to
strictly abide by it. The policy covers all employees, irrespective of
their nature of employment and also applicable in respect of all
allegations of sexual harassment made by an outsider against an
employee.
During the year 2015-16, one case of Sexual Harassment was reported
which was investigated by a committee (including an external member) as
defined under the Policy of Prevention & Redress of Sexual Harassment
and appropriate action was taken in the said case.
37. Reporting of Frauds:
There have been no instances of fraud reported by the Statutory
Auditors under Section 143(12) of the Act and Rules framed thereunder
either to the Company or to the Central Government.
38. Significant and Material Orders passed by the Regulators/Courts,
if any
There are no significant or material orders passed by the Regulators or
Courts or Tribunals which would impact the going concern status of your
Company and its future operations.
39. Material changes & commitment if any, affecting financial position
of the Company from the end of financial year till the date of the
report.
There have been no material changes and commitments, if any, 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 this Report.
40. Extract of Annual Return
The details forming part of the extract of Annual Return in prescribed
Form MGT 9 is annexed hereto as Annexure VIII and forms the part of
this Report.
41. Acknowledgements
Your Directors would like to acknowledge and place on record their
sincere appreciation to all Stakeholders Clients, Financial
Institutions, Banks, Central and State Governments, the Company''s
valued Investors and all other business partners for their continued
co-operation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of
all the employees of the Company and their continued contribution to
its progress.
For and on behalf of Board of Directors,
AJIT GULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House, 11th Floor,
247Park, Lal Bahadur Shastri Marg
Vikhroli (West)
Mumbai 400 083
Place: Mumbai
Date: June 3, 2016
Mar 31, 2015
The Members of
Hindustan Construction Co. Ltd.
1. Report
The Directors are pleased to present the 89th Annual Report together
with the Audited Financial Statements for the year ended March 31,2015.
2. Financial Highlights
Particulars Year ended Year ended
March 31,2015 March 31,2014
Rs crore Rs crore
Turnover 4,301.14 4,113.49
Profit before Interest,
Depreciation, Exceptional Items, 781.77 643.76
Other Income andTax
Less: Finance Costs 651.13 607.94
Depreciation 150.30 144.61
801.43 752.55
Add: Other Income 134.53 213.59
Add/Less: Exchange Gain/(Loss) 12.45 (13.85)
Profit before Tax 127.32 90.95
Less: Tax Expense 45.67 10.31
Profit/(Loss) after Tax 81.65 80.64
Add: Balance brought forward from last year 69.00 (11.64)
Less: Impact of depreciation/amortisation 2.73 -
(Refer Note 3.2 of the Financial Statements)
Balance carried to Balance Sheet 147.92 69.00
3. Dividend
As your Company is under CDR, it is necessary to conserve and optimise
use of resources to improve the health of the Company. Hence, your
Directors have not recommended any dividend for the financial year
ended March 31, 2015.
4. Operations
The turnover of the Company at Rs. 4,301 crore has shown an increase of
4.6% as compared to Rs. 4,113 crore for the previous year. The profit
before tax is Rs. 1273 crore (including exceptional item) as compared to
Rs. 90.9 crore for the previous year.
Your Directors are pleased to inform that during the year under report,
the Company has secured the following major contracts.
- Numaligarh to Jorhat Section of NH 37, Assam Contract Value: Rs. 455
crore,
- Indo Nepal Borderto Rudhauli Section of NH-233, Uttar Pradesh
Contract Value: Rs. 393 crore
- Jamugurihat-Biswanath Chariali Bypass NH-52, Contract Value: Rs. 392
crore,
- Delhi Metro Tunnel Package CC-66, NCR Contract Value: Rs. 300 crore
- Munirka Flyover, New Delhi Contract Value: Rs. 278 crore,
- Kolkata Elevated Road Contract Value: Rs. 257 crore
- Sawra Kuddu Hydroelectric Project, Himachal Pradesh
Contract Value: Rs.180 crore
- Bhandup Complex Pipeline IV, Mumbai Contract Value: Rs.120 crore
- RIL Civil Works, Gujarat Contract Value: Rs. 88 crore
The total balance value of works on hand as on March 31,2015 is Rs.14,451
crore.
Decisions are awaited from various clients for tenders submitted by the
Company for 22 packages amounting to around Rs. 13,987 crore (HCC share Rs.
13,673 crore). Tenders for various packages for 45 projects worth over
Rs. 36,766 crore (HCC share Rs. 28,583 crore) are expected to be submitted
in the near future. The Company has also submitted prequalification
bids for 24 projects worth over Rs. 15,606 crore (HCC share Rs. 13,454
crore) which are under evaluation.
Operations of Subsidiaries
i) Lavasa Corporation Ltd. - Integrated Urban Development & Management
Lavasa has kept its rationale of developing a smart city for all and is
tailoring partnerships and tie ups with global leaders. Partnerships
are well in place and many of these projects are moving towards
completion.
In the hospitality space, the Accor group is successfully running its
operation with the two brands - Mercure Lavasa and the 1500 plenary
capacity Lavasa International Convention Centre (LICC). Another brand
of the Accor group - Novotel is scheduled for opening in April 2016.
Projects with renowned hospitality players like Formule One, Holiday
Inn, Langham and Eaton amongst others are slated to follow in quick
succession.
As for the existing hospitality projects, Ekaant -The Retreat and
Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select
Dasve is in its seventh year of successful operations with an occupancy
of 66%. Accor Mercure is in its sixth year of successful operation with
an occupancy at 56%. In the tourism space, Lakeshore Watersports, Neo
Spark Games Arcade and Xthrill Adventure Sports & Academy are also
functioning successfully. Additionally agreements have also been signed
to set up training facilities with Hockey Australia, Sir Nick Faldo for
Golf Academy and Sir Steve Redgrave Rowing Academy.
On the retail front, a significant area has already been leased.
Restaurants like Smokin Joe''s, VenkysXpress, Subway, Cafe Coffee Day,
Baskin Robbins, All American Diner, Granma''s Homemade Patisserie, Chor
Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta
Paani, Paanchi Krunchyand Indulge have commenced operations. Many other
non F&B outlets such as Mapro, Charosa Wine Boutique and Health First
Organic store have successfully started operations including Lavasa''s
first miniplex- Fun Square Digital Cinema.
Significant progress was made in the education space. Christel House
Lavasa is into its sixth year of operations with 445 students. 2014-15
also saw launch of Phase 2 of Christel House till grade 6th. Corporate
entities such as EduSports, Yoga Blessing and Linguaphone showed keen
interest to contribute towards Christel House Lavasa School by way of
sports programmes, educational and Yoga workshops.,
Ecole Hoteliere Lavasa started its sixth batch in 2014- 15. The seventh
batch will commence from 28th July 2015. In May 2015, the third batch
of the institute graduated and received their certification from Ecole
Hoteliere de Lausanne. Christ University started its first batch with
14 students in 2014-15 & is commencing its second batch for the
academic year 2015-16 with the target batch size of 60 students for
PGDM program with specialization in Finance and Marketing.
Knowledge Vistas Limited (KVL) is already running Little Millennium,
pre primary school at Lavasa for last five years. It is also likely to
start the k12 school from academic year 2016-17 Abhinav Shiksha
Sansthan, New Delhi will start from the academic year 2017-18 across
the area of 62,500 sq. ft. Other educational partners like Symbiosis
Institute (Pune) are also in the process of launching their programs.
Lavasa continued to enjoy healthy sales in residential and commercial
space. In institutional sales, the company closed the transaction with
Hindustan Times Media Limited, the premier media establishment which
has acquired over 6 acres of land. The media house proposes to
establish a state-of-art training centre for its executive staff. A
proposal has also been submitted to The Times Group to start a premier
management training institute on land it has acquired in Mugaon.
The Doon Public School has acquired a 10 acre plot in Mugaon to start
its brand of school. Till the project is completed the school would
operate out of an incubation space in Dasve.
Hazel Hotels that had acquired 2 plots of land aggregating to 2.1 acres
with BUA of 40,000 sft has been granted building plan approval by SPA
and proposes to commence construction of a Ramada Encore branded hotel.
J Vora Hospitality is all set for a soft launch of its 80 keys
vegetarian hotel in Dasve by December 2015. SOSFIPL, an NGO has
obtained SPA approval for a bakery with a BUA of 20,000 sq.ft in Bhoini
and will commence construction activity this year.
Symbiosis Institute has already been granted building plan approval and
will commence construction of its large campus post monsoon.
Lavasa continued its focus on branding and communication activities in
2014 - 15. Emphasis through the year was on communicating that
development work at Lavasa has commenced with right earnest, raise
awareness about the planned city and its advantages. Positioning Lavasa
city as India''s first smart city, building preference and restoring
customer confidence in the project were the key goals.
A new advertisement campaign was launched in May 2014- Unlocking
India''s Potential to capitalize on the cause of 100 smart cities.
Primary thought behind the campaign that ran from May to June 2014 was
that if India needs to grow, infrastructure needs to grow in sync.
India needs ''New cities'' and Lavasa is one such new city which can
serve as a prototype for creating new cities. This campaign was
followed by a Smart City Campaign that positioned Lavasa as India''s
First Smart city. The campaign highlighted the various ''smart'' aspects
of Lavasa through a nationwide advertising campaign using the Times of
India and Hindustan Times group publications. Simultaneously magazines
such as Forbes were used to spread this message. The print campaign was
ably supported by outdoor, on-site media, digital and social media.
Media coverage of the event and interviews with spokespersons resulted
in the news being carried by both print and electronic media.
Lavasa continued with its strategy of creating large events at Lavasa
to attract the right footfalls. Events held during the year were
Martial Arts Festival,
Marathi Box Cricket League, FAME 2014, Freedom 2014, Mirchi Queen Bee,
The Lost Party and Gladrags Mrs. India. Digital and social media
channels were leveraged primarily for engagement and for information
dissemination. The new mobile-friendly website was launched in April
2014 with a contemporary look & feel. Lavasa also initiated e-mailer
campaigns to selected databases of Times of India and Hindustan Times
and tied up with Google to create ''Google Street view'' for our first
town, Dasve
In 2014-15, the Public Relations campaign focused on positioning Lavasa
city as India''s first smart city with focused efforts towards building
preference and restoring customer confidence in the project. To enable
this, a number of site visits were organized
for media, the primary influencers and other key influencers of public
opinion. Through the year over 75 journalists from print, TV, news
wires and web media from Mumbai, Pune and Lavasa region visited Lavasa.
Meetings with senior editors and constant engagement with beat
reporters led to better appreciation of company''s stand on issues and
presentation of a balanced perspective on most issues. Stories in
leading magazines, newspapers and international publications were
initiated to convey that development work at Lavasa has commenced with
right earnest and that the company is committed to developing the city.
Tourism stories in travel and trade media were initiated to promote
Lavasa city as a premier tourist destination. Lavasa as a cultural hub
was promoted by leveraging travel and lifestyle media to publicize the
city''s initiatives like the World Fest 2014, Freedom 2014 and FAME 2014
festival.
Promotional initiatives of various Special Purpose Vehicles like
Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town & Country
Club, Mercure Lavasa Fortune Select Dasve, Lakeshore Watersports and X
Thrill were publicized through news stories, editorial feature stories
and photo features.
Lavasa city now has a full-fledged operational Farmer''s market known as
Hara Bazaar; a two screen movie theatre for visitors and residents; It
has a fully operational post office, a hospital with pharmacy and
several new food and beverage establishments open for business. It also
has four operating hotels and four additional hotels will be opening
soon which collectively will take the total number of hotel rooms in
Lavasa to more than 600. Lavasa has a Petrol Pump, two Bank branches
along with ATMs, a Convention Centre, a public safety centre with Fire
engine, Police outpost to be upgraded to a full-fledged police station,
Tourist information center with a Hop On - Hop Off Bus facility,
Multilevel Car parking facilities, Nature trail, Citizen contact center
with 24x7 support to citizens through emergency and non-emergency
contact numbers, rental housing for low income groups, simulated golf
course facilities; water sports facility with latest
"Jetovator'',''adventure sports facility, a modern club with gym, sports
and spa facilities, public transport system for citizens, Schools for
local population and two operational College campuses.
Building the infrastructure right, from the beginning, is a key
strategy to ensuring long-term livability. The drinking water at Lavasa
is fit for
consumption, straight from the tap, without the need for additional
filtration. The sewage is treated as per required standards before
being reused for irrigation and other non-potable uses. Lavasa''s power
distribution grid is nearly 99% reliable and the young city is already
on the cutting edge of urban environmental sustainability initiatives.
Over 50km. of well maintained motor able roads are operational and more
being constructed, Lavasa has already opened parks and play areas to
the public.The e-governance portal will play a major role in
communicating with citizens and providing round the clock services.
Around the clock Lavasa Citizen Call Centre has been operational since
2009-2010. The Call Centre is a one-stop information source for non
emergency and emergency related services. It provides a single window
resolution for all customer needs and visitor requests, be involved in
proactive information distribution, data collection and management
services, customer satisfaction surveys and customer handover and
possession.
The City Management Services (CMS) Department is equally dynamic in
seeking to coordinate services in this rapidly changing setting. It is
currently divided into seven specialist divisions including Customer
Services, Public Safety & Security, Enterprise Utilities, Public Works,
Administration & Finance, Community Development and Geographic
Information Systems & Management Information Systems.
The City Management Services Department envisions to slowly evolve into
a new governance entity that will, at some point, be the core of a new
replicable governance model. It meets on a monthly basis with a
committee of villagers from throughout the project area. The Village
Committee is the first of several such citizen advisory groups that
will together form a key component of the Lavasa citizen and
stakeholder engagement mechanisms.
Lavasa Corporation has 10574 acres of land including 455 acres of land
on lease.
Lavasa continues to regularly monitor environmental aspects such as air
quality, water quality and soil quality are being carried out as per
MoEF guidelines. The Environmental Compliance Report is being submitted
to MoEF once in six months. The last report was submitted in December
2014 and work of Biodiversity conservation and enhancement continues at
the
required pace. Lavasa Sustainability report for the period 2010-13 was
prepared and accorded highest rating application level A as per GRI
guidelines.
Lavasa also became a member of Cll-Western Region Sub-Committee for
Environmental Business and has contributed its learning and experience
within the region.
First town, Dasve is ready with all basic infrastructure, such as
access roads, internal roads, water treatment plant, water distribution
network, sewage network, sewage treatment plant, telecom network and
services which are operational. Till date more than 801 residential
units have been handed over to CMS department and over 677 residential
units have been handed over to customers. Work on rest of few
properties - Lake View apartments, Club View apartments, Delfino
apartments, Valley View apartments, BrookViewapartments, Rental
housing, Retail and hostel tower B, Christel House Phase II, Novotel
Hotel and Holiday Inn is in progress.
Work on the infrastructure for the second town of Mugaon has been
accelerated. Work on utilities like water, sewer, power, data lines and
on the approach road is in progress. Work on 29 buildings at Mugaon has
commenced. The improvement to the existing Mugaon-Tamhini Zilla
Parishad road is complete. The portion of this road will also form a
part of the approach road for the proposed tunnel between Tamhini and
Mugaon. Work on the inter village road from Mugaon to Dhamanohol is
complete (6 kms).
Lavasa has also initiated a number of development and empowerment
programs for the local community. Some of the key initiatives include
provision of treated drinking water to 12 villages in the project area
at 62 locations on a daily basis. Calligraphy workshops, aptitude tests
and counseling for students of Zilla Parishad (ZP) schools, creche for
labor children; starting the Apollo Lavasa Primary Health Centre at
Bhoini and provision of free health check up, medicines and ambulance
service to villagers; monthly health and awareness camps for HIV/ AIDS,
malaria, nutrition, and water borne diseases. Employment and self
employment opportunities to the locals have also been provided.
Ministry of Environment and Forests (MOEF) Issue
As you are aware that Lavasa was issued a show cause Notice by Ministry
of Environment & Forests (MoEF), Government of India (GOI) regarding
violations of the Environmental Impact Assessment notifications of 1994
as amended in 2004 and superseded in 2006 ("EIA Notifications"). The
Company made various representations as per the directions given by
the authorities and after complying the conditions stipulated, MOEF
GOI was pleased to accord the Environmental Clearance to the Company.
Herein below given are the updates in the matter during the Financial
Year 2014 - 2015:-
1. Transfer Petition (C) No. 1326 of 2012 filed by your Company for
transferring the National Green Tribunal (NGT) Appeal No. 9 of 2012
filed by Dyaneshwar Shedge was listed before the Registrar for
completing the pleadings. Earlier, the Hon''ble Supreme Court, vide its
order dated October 19, 2012, stayed the proceeding before NGT The
Transfer Petition was listed before Hon''ble Supreme Court on August 04,
2014, wherein after hearing the parties in the matter, the Hon''ble
Supreme Court was pleased to pass the following order:-
"Looking at the facts of the cases, we are of the view that these
petitions should be heard either by the Green Bench or by another
appropriate Bench. The Registry to place the matters before the Hon''ble
the ChiefJustice oflndia so that appropriate orders may be passed."
The Company''sTransferPetition (C) No. 1326 of
2012 along with Civil Appeal being No. 4280 of
2013 and Contempt Petition being No. 203 of 2013 filed against
Dyaneshwar Shedge are pending before the Hon''ble Supreme Court for
disposal.
2. NGT Appeal No. 36 of 2011 filed by the Company was listed on October
16, 2014 and the Hon''ble Tribunal was pleased to adjourn the matter
sine-die till decision of Apex Court.
3. The record and proceedings in NGT Appeal No. 9 of 2012 filed by
Dyaneshwar Shedge have been transferred to Hon''ble Supreme Court in
view of the stay granted by Apex Court.
4. Public Interest Litigation (PIL) No. 129 of 2014 filed by Suniti S R
and others (Petitioners), wherein the Company is Respondent No 12, was
listed before the Hon''ble Bombay High Court on August 11, 2014, wherein
the Hon''ble Court issued "Rule"
in the matter without passing any adverse order against the Company.
The Company has filed further Affidavit in Reply in the matter on
October 01,2014.
The Petitioners have on December 10, 2014 filed a Civil Application
being No. 186 of 2014 for amending the PIL interalia to challenge
Environmental Clearance grated to your Company. On December 16, 2014
PIL No. 129 of 2014 was tagged with Writ Petition No. 3836 of 2014 and
the same stands adjourned. Meanwhile the Company is in the process of
filing reply to the Civil Application No. 186 of 2014, and the matter
is currently pending.
Further, the Company is regularly filing six monthly compliance report
as per the Environmental Clearance order.
ii) HCC Real Estate Ltd.
HREL, a wholly owned subsidiary of your Company is into the business of
building residential & office complexes in real estate sector.
HRL (Thane) Real Estate Limited
HRL (Thane) Real Estate Ltd. a subsidiary of HREL initiated the
acquisition of 183 acres of land at Ghodbunder Road, Thane for
Integrated Township Development. Till date, the Development Agreement
and Power of Attorney for 32 acres have been executed in favour of the
Company. The Company continued its activity of securing its position
for land title and other documentation.
The Company has filed a criminal case against Mr. Atul Sonawala and 8
others, Director of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is
under process for the said case.
HRL Township Developers Limited
No activities were carried out during the year. Company continued its
search process for joint development opportunities
NashikTownship Developers Limited
During the year, the Company has sold its land and completed all the
land related transactions. For further opportunities, the Company is
looking for joint development opportunities in residential sectors
since Nashik city is growing industrially as well as economically.
Maan Township Developers Limited
Maan Township Developers Ltd a subsidiary of HREL has acquired
approximately. 28 acres of land by way of purchase and the Development
Agreement and Power of Attorney have been executed in favor of the
Company.
The company has now decided to sell the land in piece parcels.
Powai Real Estate Developers Limited
No activities were carried out during the year. However, the company
continued to look for an opportunity to find ideal land parcels for
joint development in residential sectors.
HCC Realty Limited
No activities were carried out during the year. Panchkutir Developers
Limited
During the year, your Company continued its efforts on the following
projects in the residential sector.
Development of Vikhroli (E) land parcel: Out of the total land holding
of around 32 acres by Panchkutir Developers Ltd. in Vikhroli (E), the
survey of tenements on Phase-1 of 14.5 acres of land to ascertain the
development potential of the free sale component is completed. Out of
the 1960 slum residents, consent of about 1400 residents representing
more than 70% has already been obtained and the process for forming the
society is in progress.
Slum declaration of Phase-1 land was challenged and the same has been
set aside by the Special Slum Tribunal. Subsequently, the litigant
filed a Writ Petition challenging the above said Order of the Slum
Tribunal in Bombay High Court . The High Court upheld the 3C order and
asked the Tribunal for actual verification of slum details. Against
this order, the litigant has filed an appeal challenging the above said
Order of the Slum Tribunal on divisional board in High Court.
Development of Powai land: MOU-cum-Development Agreement and Power of
Attorney were executed by the land owner in favour of the Special
Purpose Vehicle , Panchkutir Developers Ltd., a subsidiary of HCC for
12 acres of land. Due to non performance by the land owner of the
various obligations under the MOU- cum-Development Agreement in spite
of repeated reminders, the company has been legally advised to invoke
the Arbitration clause forming part of the MOU- cum-Development
Agreement. Accordingly, Arbitration proceedings have been initiated and
till date recording of the evidence of Claimant''s witnesses has been
completed and the matter is now stated for hearing in July 2015 for
evidence of Respondent.
iii) HCC Infrastructure
HCC Infrastructure Company Ltd., a wholly owned
subsidiary of your Company, develops and operates infrastructure
concessions in transportation, power and water sector through its
subsidiaries, viz.
HCC Concessions Ltd., HCC Power Ltd., and HCC Operations & Maintenance
Ltd. The current portfolio has six NHAI road concessions, totaling
about Rs.5,500 crore, housed under HCC Concessions.
Your Company''s focus on sustainable and responsible development through
the Public Private Partnership results from expertise in concept
innovation, risk analytics, construction management and operations.
The strong management team at the Company follows a strict investment
discipline to create value for its members. Along with a focus on
financial discipline, quality and timely execution, the Company is
committed to provide reliable, safe and world class operations and
maintenance services to the country''s end users.
In 2011, the Xander group, a global investment firm, valued HCC
Concessions Limited at Rs.1,650 crore and had acquired a 14.5% stake
therein.
Current Road Portfolio:
HCC Concessions has a current portfolio of Rs. 5,500 crore which includes
six NHAI road concessions. These include one annuity and five toll
based projects: Nirmal (annuity) in Telangana (erstwhile Andhra
Pradesh) on NH7, the Delhi Faridabad Elevated Expressway (dfskywayÂ)
on NH2, Dhule Palesner Highway in Maharashtra on NH3 and three
contiguous sections of 250 km in West Bengal on NH34. Of these, Nirmal
Annuity, diskywayÂ, Dhule Palesner Highway and the first leg of
NH34''s development, the Baharampore Farakka Highway are operational.
The four operational projects have been operational for between one and
five years and are running smoothly. Farakka Raiganj Highway, the
second leg of NH-34 development in West Bengal is expected to be
operational later this year while the last leg, Raiganj Dalkhola has
seen significant improvement in terms of land acquisition and work is
expected to start shortly. Material defaults by NHAI, largely due to
delayed handing over of land for all three NH-34 packages have resulted
in the Concessionaire''s filing of a claim of Rs. 883 crore as damages
from NHAI as on June 30, 2014. Despite the aforementioned delays and a
recessionary environment in the past few years, the NH-34 projects
continue to be a substantial source of value creation for the
portfolio.
During the past year, there was very limited opportunity for new
projects since only about 740 km were awarded by NHAI. HCC Concessions
has chosen to focus on the execution of its under construction projects
and also raise capital through stake sale at attractive valuations.
The Company will evaluate NHAI projects in the next financial year,
albeit conservatively, while also evaluating state road opportunities.
Status of Operational Assets:
Dhule Palesner Highway Project (NH-3)
The project road is part of NH-3, commonly referred to as the
Agra-Mumbai road, originating from Agra and ending at Mumbai. It is a
primary conduit for transportation of passengers as well as freight
traffic from the state of Uttar Pradesh to major towns in the states of
Madhya Pradesh and Maharashtra. In FY09, NHAI awarded a contract for
the development of a four lane highway from Km 168.500 to Km 265.000 on
the Maharashtra/MP border to an HCC led consortium on a BOT (toll)
basis. The concession period is 18 years, including a construction
period of 30 months. The project was operational in February 2012,
about 4 months ahead of its scheduled completion. The project has been
developed at a total investment of Rs. 1,420 crore.
The operation of project road is running smoothly. During the year,
the Company implemented the 10x tolling for Overloaded vehicles in line
with the NHAI Fee Rules. NHAI also handed over the land for the
Developed Section from Km 219.7 to Km 233.0 after a delay of 1.5 years.
The contractor has started the mobilization and is expected to finish
the work on the remaining 2 lanes within six months. The daily toll
revenue is expected to increase by about Rs. 2-3 lakhs after this
development. The remaining concession period for the project is about
13 years.
Pursuant to the interest expressed by the Sadbhav Group to acquire the
Company''s stake in the SPVs, the Company has also entered into
definitive agreements with the Sadbhav Group for the sale of its entire
economic stake in Dhule PalesnerTollway Ltd. The transaction is subject
to receipt of necessary approvals.
Delhi Faridabad Elevated Expressway (NH-2) (dfskyway )
The Delhi Faridabad Elevated Expressway or dfskyway is a six lane
4.4 km elevated highway
connecting Delhi and Haryana at Badarpur. This award winning
engineering marvel designed and developed by HCC Concessions Ltd with
an investment of nearly Rs. 600 crore boasts 20 exits, 10 underpasses and
is the first of its kind spaghetti structure in India. The dfskywa/M
contributes significantly to Delhi''s rapidly expanding infrastructure
by reducing travel time by over 40 minutes through an extremely
congested corridor that benefits residents and inter-state traffic
alike.
The project''s concession period is 20 years, including construction
period of 24 months. Of the three satellite cities, Faridabad is
under-developed and under-priced relative to other parts of NCR.
However, since the development of this asset, there has been a 30-40%
increase in property prices (2008-10).
Besides, Faridabad has been ranked as the 8th fastest developing city
by The City Mayors Foundation. This asset has been awarded the Best
Project Award by Construction Industry Development Council 2011 and the
Infrastructure Excellence Award 2011 by CNBC TV18.
In February 2013, this SPV has undergone restructuring of its debt due
to revenues falling short of projections which is mainly attributed to
the prolonged economic slowdown in the country (coinciding with COD)
and the existence of toll free local road, which is being used by the
long distance vehicles to escape paying toll charges.
In order to enhance the revenue on this project and reduce maintenance
costs, the Company is in the process of implementing 10x tolling for
overloaded vehicles in accordance with NHAI Fee Rules. The Company has
also submitted a comprehensive proposal for advertising along the
project highway. The project is a signature project in Delhi having
very high visibility and the Company is expecting significant revenues
from the latter sources.
Nirmal Annuity (NH-7)
This project road from Kadtal to Armur inTelengana (erstwhile Andhra
Pradesh) is a part of the Nagpur- Hyderabad section of NH-7 In FY07,
NHAI awarded the development of four-laning of 30 km long Kadtal Armur
Section of NH-7 on a BOT basis under the Annuity scheme to HCC. The
concession period for the project is 20 years, including a construction
period of 24 months. The project was developed with an investment by
HCC of Rs. 315 crore. This project was operational in July 2009, 100 days
ahead of the scheduled completion
date. The debt at Nirmal has since been refinanced through a structured
bond at 9.38% fixed rate of interest for a 17 year tenure.
As part of the capital raising activity, the Company has signed
definitive agreements for the 100% sale of this project to Highway
Concessions One Pvt Ltd (an entity majorly held by IDFC Alternatives
managed India Infrastructure Fund). Highway Concessions One will
acquire a 74% equity stake upfront, while the remaining 26% shall be
acquired upon receipt of an approval from NHAl.The Company is working
towards the fulfillment of conditions precedent and the transaction is
expected to close shortly.
The SPV has received timely annuity payments over the last year and the
operations and maintenance are being managed efficiently by HCC
Operations and Maintenance Ltd.
Baharampore Farakka Highway (NH-34)
This 101 km project is the first section of 250 km contiguous section
on NH-34 (West Bengal) from Baharampore to Dalkhola and was awarded to
the Company in 2010.
NH34 provides nearest access to Kolkata and Haldia ports for the north
eastern states of India and neighbouring Bangladesh, Bhutan and Nepal.
The traffic on NH34 comprises 85-90% commercial traffic, carrying a
diversified mix of manufactured goods, building materials, steel, jute,
food grains and tea.
The project road starts from north of Kolkata at Km 191.420 near
Baharampore and ends at Farakka (before Farakka barrage) at Km 294.680.
The project achieved commercial operations in May 2014 and has been
tolling smoothly. The operations and maintenance is being managed by
HCC O&M Ltd. The Company implemented the 10x tolling for overloaded
vehicles on this project in August 2014 to enhance revenue and reduce
maintenance costs and was amongst the first few in the country to
implement the same.
The completion of the project is delayed by 22 months as of March 2015,
largely due to material defaults by NHAI in providing land on a timely
basis. Provisional Completion (PCOD) was achieved 9 months after SFLD
(Scheduled Four-laning Date) and Final Completion (FCOD) will be
delayed by a total of 35 months due to delayed handover of Right of Way
(ROW), tardy design clearances for major bridges and structures,
removal
of various hindrances, utilities shifting, etc. As of June 30, 2014,
the Concessionaire has filed Rs. 290.85 crore worth of claims from the
NHAI for the damages suffered due to NHAI defaults. The Concessionaire
will submit further claims for increased costs beyond June 30, 2014.
Since the realization of claim from the Authority will be a lengthy
process, the SPV meanwhile approached its Lenders in August 2014 to
assist in funding the delays and has subsequently received support from
its Lenders.
The concession period for the project is 25 years, including a
construction period of 30 months. The project is being implemented with
an investment of Rs. 1,169 crore.
As part of its capital raising activity, the Company has entered into a
non-binding Term Sheet for the sale of 100% stake in the project,
subject to requisite clearances and approvals. The proposed transaction
is expected to close by the end of Q1FY16 after the diligence process
and documentation is completed.
Status of Assets under Development:
Farakka Raiganj Highway (NH-34)
The project road starts from Farakka at Km 294.680 and ends at Raiganj
at Km 398.000. The Farakka Raiganj section is about 102 km in length
and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda
city in Malda and North Dinjapur districts of West Bengal. It also
passes through various small villages like Sujapur, Gazole, Stalkuri,
Itahar and ends before Raiganj town. The concession period is 30 years,
including a construction period of 30 months. The project is being
implemented with an investment of Rs. 1,378 crore.
A substantial stretch (79%) of roads and structures of this second and
largest leg of NH-34 development has been completed and toll collection
is expected to commence by the year end. In the last year, almost the
entire land has been made available for construction after a long
delay. The completion of the project is delayed by 22 months as of
March 2015, largely due to material defaults by NHAI in providing land
on a timely basis. The Provisional Completion (PCOD) is estimated to be
achieved 29 months after SFLD (Scheduled Four-laning Date) while Final
Completion (FCOD) will be delayed by a total of 37 months due to
delayed handover of Right of Way (ROW), tardy design clearances for
major bridges and structures, removal of various hindrances, utilities
shifting, etc. As of June 30, 2014, the Concessionaire has filed Rs.
322.72 crore of
claims from the NHAI for the damages suffered due to NHAI defaults. The
Concessionaire will submit further claims tor increased costs beyond
June 30, 2014. Since the realization of claim from the Authority is a
lengthy process, the SPV meanwhile approached its Lenders in August
2014 to assist in funding the delays and has subsequently received
support from its Lenders.
Raiganj Dalkhola Highway
This is the northern section of the NH-34 development, starting at
Raiganj (Km 398.000) and terminating at the town of Dalkhola (Km
452.750). The 50 km project stretch traverses through Raiganj and
Dalkhola towns in North Dinjapur district of West Bengal. It also
passes through various small villages like Soharai, Karandighi,
Maheshbathna and ends at the intersection of NH31. The concession
period is 30 years which includes a construction period of 30 months.
The project is being implemented with an investment of Rs. 684 crore.
The project progress has been very slow due to the non-availability of
land. In the year 2014-15, a significant portion of land has been made
available for construction after a delay of over 4 years. The Company
expects to receive 80% of unencumbered vacant land in the coming months
when execution will restart. As of June 30, 2014, the Concessionaire
has filed Rs. 269.31 crore worth of claims from the NHAI for the damages
suffered due to NHAI defaults. The Concessionaire will submit further
claims for increased costs beyond June 30, 2014. Since the realization
of claim from the Authority is a lengthy process, the SPV meanwhile has
approached its Lenders in February 2015 to assist in funding the delays
and has subsequently received positive indications from its Lenders.
iv) Steiner AG, Switzerland
Steiner AG is a leading total and general contracting company in
Switzerland, specialized in turnkey building construction including
refurbishments and real estate development.
Your Company owns 100% stake in Steiner AG through HCC Mauritius
Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned
Subsidiaries.
In FY2014-15, Steiner AG has registered a revenue of CHF 853.9 million
(Rs. 5604.2 crore) compared to CHF 796.7 million (Rs. 5,228.7 crore) in the
previous year.
The net profit stood at CHF 1.7 million (Rs. 11.2 crore) compared to CHF
8.15 million (Rs. 53.4 crore). The company secured fresh orders worth CHF
796 million
(Rs. 5,106 crore). The order backlog was CHF 1.12 billion (Rs. 7195 crore)
at the end of the year. In addition to this, the company has secured
orders for more than CHF 192 million (Rs. 1,232 crore), where the
contracts are yet to be signed. The closing cash balance of the company
was CHF 103 million (Rs. 658.5 crore) reflecting company''s steady
financial performance and strong liquidity position.
v) HighbarTechnologies Ltd
HighbarTechnologies Ltd (''Highbar''), a wholly owned subsidiary of your
Company, is an Information Technology Company formed by your Company,
with the vision of providing end-to-end IT solutions to Infrastructure
industry.
Highbar was able to service 16 new customers including 6 new customers
from Middle East, Africa and Switzerland taking the total tally of
clients to 94. This has been achieved at a time when the primary
customer segment, the construction industry, is facing multiple
challenges. Despite this, in a short span of time, Highbar has started
dominating the ''IT for Infrastructure'' market. Your Company''s group
legacy has enabled Highbar to understand and service these industries
effectively. The orders won by Highbar have contributed highest value
through net new customers in SAP Ecosystem for infrastructure sector in
calendar year 2014. Highbar has started providing SAP related services
in multiple sectors like Manufacturing, BPO, Agro-Chemicals in addition
to Infrastructure, Real Estate, Retail, Telecom, Consumer Products, PEB
(Pre-engineered Buildings), Iron & Steel etc. It has developed
capabilities to execute successfully very large size projects
concurrently. Customers have demonstrated their faith in Highbar for a
long term association by awarding 5 years support deal in addition to
implementation.
After securing first order in last year, Highbar has started expanding
its reach in government sector by exploring opportunities. Its Dubai
subsidiary, Highbar Technologies FZ-LLC, has now started strengthening
its presence counting ten major customers in the Middle- East in a
short span of time. Highbar now operates not only in India and
Middle-East but also in Africa (Nigeria) and Europe (Switzerland).
Highbar has grown its IT capabilities and the expertise in various
areas including ERP (Enterprise Resource Planning), Business
Intelligence and dashboards, cloud offerings through Highbar
CloudConnect,
Employee Portals, CRM (Customer Relationship Management), DMS (Document
Management System) and others. Highbar has also ventured into SAP HANA
implementation thisyear. Newofferings like SAP Fiori, Screen Persona,
Mobility solutions, e-procurement through Ariba sourcing solutions have
increased the breadth of the offerings for the customers. The stack of
services provided by Highbar has gone much beyond SAP into process
consulting and IT Infrastructure support (data-centre, networking etc.)
Solutions like Highbar RapidStart and Highbar RapidStart Analytics are
based on the templatised approach for ERP and Business Intelligence
respectively and are intellectual properties (IP) assets of Highbar.
Highbar has maintained a strategic alliance with SAP at the level of
''Gold Partnership'' and it''s a preferred partner for SAP implementation
and even reimplementation for the infrastructure industry. More than
ten of Highbar''s implementation have now become global case studies,
published on SAP''s website as reference implementations.
Highbar, the spin-off from your Company''s internal IT function, has
succeeded, when the success rate of such experiments is just 5%
globally & in India. Highbar has established a proper scalable
organization structure with all the functions in place to facilitate
and sustain future growth. It is on the course towards accomplishing
its vision of being ''the most preferred end-to-end IT solution
provider'' for infrastructure industry.
5. Subsidiaries, Joint Ventures and Associate Companies
As of 31st March 2015, the list of Subsidiaries, Joint Ventures and
Associate Companies of your Company is as follows:-
Subsidiary Companies
1. Western Securities Ltd
2. HCC Aviation Ltd
3. HCC Construction Ltd
4. Highbar Technologies Ltd
5. Highbar Technologies FZ LLC
6. HCC Mauritius Enterprises Limited 7 HCC Mauritius Investment Limited
8. Steiner AG (Formerly known as Karl Steiner AG)
9. Steiner Promotions et Participations SA
10. VM ST AG
11. Eurohotel SA
12. Steiner (Germany) GmbH
13. Steiner Leman SAS
14. SNC Valleiry Route De Bloux
15. Steiner India Ltd
16. HCC Infrastructure Company Ltd
17 HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
18. Nirmal BOT Ltd
19. Badarpur Faridabad Tollway Ltd
20. Baharampore - Farakka Highways Ltd
21. Farakka-RaiganjHighwaysLtd
22. Raiganj - Dalkhola Highways Ltd
23. Dhule Palesner Operations & Maintenance Ltd
24. HCC Power Ltd
25. HCC Operations & Maintenance Ltd
26. Narmada Bridge Tollway Ltd 27 HCC Real Estate Ltd
28. HRL Township Developers Ltd
29. HRL (Thane) Real Estate Ltd
30. NashikTownship Developers Ltd
31. Maan Township Developers Ltd
32. CharosaWineriesLtd
33. Powai Real Estate Developers Ltd
34. HCC Realty Ltd
35. Pune-Paud Toll Road Company Ltd
36. Panchkutir Developers Ltd 37 Lavasa Corporation Ltd
38. Lavasa Hotel Ltd
39. Apollo Lavasa Health Corporation Ltd
40. Lakeshore Watersports Company Ltd
41. Dasve Convention Centre Ltd
42. Dasve Business Hotel Ltd
43. Dasve Hospitality Institutes Ltd
44. LakeviewClubsLtd
45. Dasve Retail Ltd
46. Full Spectrum Adventure Ltd 47 Spotless Laundry Services Ltd
48. Lavasa Bamboocrafts Ltd
49. Green Hill Residences Ltd
50. My City Technology Ltd
51. Reasonable Housing Ltd
52. Future City Multiservices SEZ Ltd
53. Rhapsody Commercial Space Ltd
54. Valley View Entertainment Ltd
55. Sirrah Palace Hotels Ltd
56. Warasgaon Tourism Ltd
57 Our Home Service Apartments Ltd
58. Warasgaon Power Supply Ltd
59. Sahyadri City Management Ltd
60. Hill City Service Apartments Ltd
61. Kart Racers Ltd
62. Warasgaon Infrastructure Providers Ltd
63. Nature Lovers Retail Ltd
64. Osprey Hospitality Ltd
65. Starlit Resort Ltd
66. Warasgaon ValleyHotelsLtd 67 Rosebay Hotels Ltd
68. Mugaon Luxury Hotels Ltd
69. Warasgaon Assets Maintenance Ltd
70. Hill ViewParkingServicesLtd
71. Whistling Thrush FacilitiesServices Ltd
72. Verzon Hospitality Ltd Joint Ventures
1. HCC-L&TPuruliaJoint Venture
2. HCCSamsungJoint Venture
3. AlpineSamsungHCCJoint Venture
4. AlpineHCCJoint Venture
5. NathpaJhakriJoint Venture
6. Kumagai -Skanska-HCC Itochu Group
7. Dhule Palesner Tollway Limited
8. AGRE Prime Tower Associate Companies
1. Vikhroli Corporate Park Pvt Ltd
2. Warasgoan Lake View Hotels Limited
3. Andromeda Hotels Limited
4. Ecomotel Hotel Limited
5. Knowledge Vistas Limited
6. Bona Sera Hotels Limited
7. Evostate AG
8. Projektentwicklungsges Parking AG.
9. MCR Corporation Real Estate AG
The details as required under Rule 8 of the Companies (Accounts) Rules,
2014 regarding the performance and financial position of each of the
Subsidiaries, Associates and Joint Venture Companies of the Company
form part of the Consolidated Financial Statements of the Company for
the financial year ended 31st March 2015 and hence are not repeated
here for the sake of brevity.
The Company has also formulated a Policy for determining material
subsidiaries, which is uploaded on the website of the Company i.e.
www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/
HCC Policy for determining Material Subsidiaries.pdf
6. Qualified Institutions Placement of Equity Shares (QIP) / Change in
Share Capital
During the year under review, your Company''s Authorised Share Capital
has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore)
comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000
Redeemable Cumulative Preference Shares of Rs. 10/- each.
Pursuant to the conversion of 3,92,15,686 warrants by the Promoter
Companies i.e. Hincon Holdings Ltd and Hincon Finance Ltd , 3,92,15,686
equity shares of Rs. 1/- each, in aggregate, was alloted by your Company
to the aforementioned Promoter Companies, at a conversion price of Rs.
16.32/- per equity share (including premium of Rs. 15.32/- per equity
share) the Company''s paid up Equity Share Capital increased from Rs.
60,66,10,420/- comprising 60,66,10,420 Equity Shares of Rs.1/- each to Rs.
64,58,26,106/- comprising 64,58,26,106 equity shares of Rs. 1/- each.
After the close of the financial year under review, on April 10, 2015,
your Company has issued and allotted 13,33,32,800 Equity Shares of Rs.1/-
each at an issue price of Rs. 30/- per Equity Share (including premium of
Rs. 29/- per equity share) for an amount aggregating Rs. 399,99,84,000/-to
Qualified Institutional Buyers in accordance with Chapter VIII of SEBI
(Issue of Capital and Disclosure Requirements) Regulations, 2009 as
amended and Section 42 of the Companies Act, 2013 and the rules made
thereunder.
Post the QIP Issue, the paid up Equity Share Capital of the Company is
Rs. 77,91,58,906/- which comprises 77,91,58,906 Equity Shares of Rs. 1/-
each.
7 Public Deposits
Your Company has not accepted any deposits from the public, or its
employees during the year under review.
8. Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
Also, pursuant to Clause 32 of the Listing Agreement, the particulars
of Loans/Advances given to Subsidiaries have been disclosed in the
notes to the Financial Statements.
9. Employee Stock Option Scheme (ESOP)
As on March 31,2015, 32,39,330 stock options are outstanding , in
aggregate, for exercise as per the exercise schedule and are
exercisable at a price of Rs. 52.03 per stock option.
Each option, when exercised, as per the exercise schedule, would
entitle the holder to subscribe for one equity share of the Company of
face value Rs. 1 each.
During the year under review, no options got vested in the employees of
the Company. 14,55,470 stock options got lapsed between April 1,2014
and March 31,2015.
The particulars with regard to the ESOP as on March 31,2015 as required
to be disclosed pursuant to the provisions of Rule 12 (9) of the
Companies (Share Capital and Debentures) Rules, 2014, are set out in
Annexure I to this Report.
10. Status of GDSs
During the financial year 2005-06, the Company had issued Global
Depository Shares (GDSs) and the underlying shares against each of the
GDSs were issued in the name of the Depository, Citi Bank N.A.
As on March 31,2015, 17,300 GDSs have remained outstanding which forms
part of the existing paid up Equity Share Capital of the Company.
11. Consolidated Financial Statements
In accordance with the Companies Act, 2013 and Accounting Standard (AS)
- 21 on Consolidated Financial Statements read with AS - 23 on
Accounting for Investments in Associates and AS - 27 on Financial
Reporting of Interests in Joint Ventures, the audited Consolidated
Financial Statements are provided in this Annual Report.
12. Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adheres to the Corporate Governance requirements as
stipulated by Securities and Exchange Board of India(SEBI).
The report on Corporate Governance as per the requirement of the
Listing Agreement forms an integral part of this Annual Report. The
requisite certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance is attached to
the report on Corporate Governance.
13. Directors
As per the provisions of Section 152 of the Companies Act, 2013, Mr. D.
M. Popat, Director of the Company retires by rotation at the ensuing
Annual General Meeting. However, Mr. D. M. Popat has expressed his
intention not to seek re-election as a Director of the Company.
During the year under review, the Board of Directors of the Company at
its Meeting held on July 31,2014, appointed Ms. Harsha Bangari as
Nominee Director (Nominee of Exim Bank) w.e.f. July 31,2014.
Based on the recommendation of the Nomination and Remuneration
Committee and after reviewing the declarations submitted by Mr. Rajas
R. Doshi and Mr. Anil C. Singhvi, Independent Directors, the Board of
Directors of the Company by way of resolution dated March 17, 2015
passed by circulation, formed an opinion that the said Directors meet
with the criteria of Independence as per Section 149(6) of the
Companies Act, 2013 ("the Act") and the rules made thereunder and also
meet with the requirements of Clause 49 of the Listing Agreement with
the Stock Exchanges, for being appointed as the Independent Directors
on the Board of the Company.
Mr. Rajas R. Doshi and Mr. Anil C. Singhvi, who were appointed as
"Directors liable to retire by rotation" under the provisions of the
erstwhile Companies Act, 1956 and who qualify for being appointed as
Independent Directors of the Company are proposed to be appointed at
the ensuing Annual General Meeting as Independent Directors of the
Company under section 149 of the Companies Act, 2013 for the period
w.e.f. March 17, 2015 upto the conclusion of the 93rd Annual General
Meeting of the Company to be held in the calendar year 2019.
On the recommendation of the Nomination and
Remuneration Committee and after reviewing the declaration submitted by
Dr. Omkar Goswami, Independent Director, the Board of Directors of the
Company at its Meeting held on April 30, 2015 formed an opinion that
the said Director meets with the criteria of Independence as per
Section 149(6) of the Companies Act, 2013 ("the Act") and the rules
made thereunder and also meets with the requirements of Clause 49 of
the Listing Agreement with the Stock Exchanges and accordingly
appointed Dr. Omkar Goswami as an Additional Director to hold office as
an Independent Director of the Company w.e.f. April 30, 2015 upto the
conclusion of the 93rd Annual General Meeting of the Company to be held
in the calendar year 2019.
The Board of Directors at its Meeting held on April 30, 2015, on the
recommendation of the Nomination and Remuneration Committee, appointed
Ms. Shalaka Gulabchand Dhawan as Additional Director and also as
Whole-time Director of the Company for a period of five years w.e.f.
April 30, 2015, subject to the approval of the Members of the Company.
Your Company has received the requisite disclosures / declarations from
Mr. Rajas R. Doshi, Mr. Anil C. Singhvi, Dr. Omkar Goswami and Ms.
Shalaka Gulabchand Dhawan as required under the relevant provisions of
the Companies Act, 2013.
Your Company has also received Notices under Section 160 (1) of the
Companies Act, 2013 from members signifying their intention to propose
Mr. Rajas R.
Doshi, Mr. Anil C. Singhvi, Dr. Omkar Goswami and Ms. Shalaka
Gulabchand Dhawan as candidates for the office of Independent Director
/ Director at the ensuing Annual General Meeting.
Further, your Company has also received declarations from all the
Independent Directors of the Company confirming that they meet with the
criteria of Independence as prescribed under the Act and Clause 49 of
the Listing Agreement with the Stock Exchanges.
Profiles of the Directors seeking appointment have been given in the
Notice of the ensuing Annual General Meeting of the Company.
14. Key Managerial Personnel
During the year under review, in addition to Mr. Ajit Gulabchand,
Chairman and Managing Director and Mr. Rajgopal Nogja, Group COO &
Whole-time Director of the Company, the following three Senior
Executives of the Company were formally appointed as Key Managerial
Personnel of the Company in compliance with the provisions of Section
203 of the Companies Act, 2013
i) Mr. Arun V. Karambelkar was appointed as President & Chief Executive
Officer - E&C w.e.f. April 29, 2014
ii) Mr. Praveen Sood was appointed as Chief Financial Officer of the
Company designated as Group CFO & EVP - HCC Group Office w.e.f. April
29, 2014
Hi) Mr. Vithal P Kulkarni to continue to act as Company Secretary of
the Company.
Remuneration and other details of the said Key Managerial Personnel for
the financial year ended March 31, 2015 are mentioned in the Extract of
the Annual Return which is attached to the Board''s Report.
15. Board Committees
The Board of Directors of your Company had already constituted various
Committees in compliance with the provisions of the Companies Act, 2013
/Listing Agreementviz. Audit Committee, Nomination and Remuneration
Committee, Stakeholders Relationship Committee, CSR Committee and ESOP
Compensation Committee.
During the year under review, in compliance with the provisions of
Clause 49 of the Listing Agreement, the Board had also constituted the
Risk Management Committee.
All decisions pertaining to the constitution of Committees, appointment
of members and fixing of terms of reference / role of the Committees
are taken by the Board of Directors.
Details of the role and composition of these Committees, including the
number of meetings held during the financial year and attendance at
meetings, are provided in the Corporate Governance Section of the
Annual Report.
16. Nomination and Remuneration Policy
The Nomination and Remuneration Policy recommended by the Nomination
and Remuneration Committee is duly approved by the Board of Directors
of the Company and the Remuneration Policy of the Company is attached
to the Board''s Report as Annexure II.
17 CSR Policy
The Corporate Social Responsibility Policy recommended by the CSR
Committee of the Directors has been approved by the Board of Directors
of the Company. The same is available on the website of the Company
i.e. www.hccindia.com and is also attached to this Report as Annexure
III.
The disclosure relating to the amount spent on Corporate Social
Responsibility activities of the Company for the financial year ended
31st March 2015 is attached to this Report as Annexure IV.
18. Meetings
A calendar of Board Meetings, Annual General Meetings and Committee
Meetings is prepared and circulated in advance to the Directors of your
Company.
The Board of Directors of your Company met 4 times during 2014-15. The
meetings were held on May 2, 2014, July 31,2014, October 30, 2014 and
January 29, 2015. The maximum time gap between any two consecutive
meetings did not exceed one hundred and twenty days.
19. Directors'' Responsibility Statement
In accordance with the provisions of Section 134 (5) of the Companies
Act, 2013, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any ;
b) the selected accounting policies were applied consistently and the
Directors 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 31,2015 and of the profit of the Company for the
year ended on that date.
c) 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.
d) the annual accounts have been prepared on a going concern basis.
e) the internal financial controls have been laid down to be followed
by the Company and such controls are adequate and are operating
effectively
f) proper systems to ensure compliance with the provisions of all
applicable laws have been devised and such systems are adequate and are
operating effectively.
20. Industrial Relations
The industrial relations continued to be generally peaceful and cordial
during the year.
21. Transfer to Investor Education and Protection Fund (IEPF)
Your Company has, during the year under review, transferred a sum of Rs.
9,17,451/- to Investor Education and Protection Fund, in compliance
with the provisions of Section 205C of the Companies Act, 1956. The
said amount represents dividend for the year 2005-06 which remained
unclaimed by the members of the Company for a period exceeding 7 years
from its due date of payment.
22. Particulars of Employees and other additional information.
The information required under Rule 5 (1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is attached
herewith as Annexure V. The information as required under Rule 5 (2) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 will be provided upon request by any member of the Company.
In terms of Section 136 (1) of the Companies Act, 2013, the Report and
the Accounts are being sent to the members excluding the aforesaid
Annexure.
Any member interested in obtaining copy of the same may write to the
Company Secretary at the Registered Office of the Company.
23. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo.
The information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required to be
disclosed under the Companies (Accounts) Rules, 2014, is given in
Annexure VI forming part of this Report.
24. Statutory Auditors
The Members of the Company had, at the 88th Annual General Meeting
("AGM") held on June 20, 2014, approved the appointment of M/s Walker
Chandiok & Co. LLP Chartered Accountants, Mumbai, bearing ICAI
Registration No. 001076N as the Statutory Auditors of
the Company, to hold office from the conclusion of that AGM until the
conclusion of the 6th AGM held thereafter (subject to ratification of
the appointment by the Members at every AGM held after the abovesaid
AGM).
Rule 3(7) of Companies (Audit and Auditors) Rules,
2014, states that appointment of the Auditor shall be subject to
ratification by the members at every Annual General Meeting till the
expiry of the term of the Auditor.
In view of the above, the existing appointment of M/s Walker Chandiok &
Co. LLR Chartered Accountants, Mumbai covering the period from the
conclusion of this ensuing AGM until the conclusion of the next Annual
General Meeting to the held in the FY 2016-17, is being placed for
members'' ratification.
As required under Section 139 of the Companies Act, 2013, the Company
has obtained a written consent from the Auditors to such continued
appointment and also a certificate from them to the effect that their
appointment, if ratified, would be in accordance with the conditions
prescribed under the Companies Act, 2013 and the rules made thereunder,
as may be applicable.
25. Auditors'' Report
The Auditors'' Report to the Members on the Accounts of the Company for
the financial year ended March 31, 2015 does not contain any
qualification, reservation or adverse remark.
26. Secretarial Audit
Secretarial Audit for the FY 2014-15 was conducted by M/s BNP
Associates, Company Secretaries in Practice in accordance with the
provisions of Section 204 of the Companies Act, 2013. The Secretarial
Auditor''s Report is attached to this Report as Annexure VII. There are
no qualifications or observations or remarks made by the Secretarial
Auditor in his Report.
27. Cost Audit
In compliance with the provisions of Section 148 of the Companies Act,
2013, the Board of Directors of the Company at its meeting held on 31st
July 2014 had appointed M/s Joshi Apte & Associates, Cost Accountants
as Cost Auditors of the Company for the FY 2014-15.ln terms of the
provisions of Section 148(3) of the Companies Act, 2013 read with Rule
14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the
remuneration of the Cost Auditors has to be ratified by the members.
Acordingly, necessary resolution is proposed at the ensuing AGM for
ratification of the remuneration payable to the Cost Auditors for FY
2014-15.
28. Risk Management
Pursuant to the requirement of Section 134 of the Companies Act, 2013,
the Company has already in place a Risk Management Plan.
The Company has a robust Business Risk Management (BRM) framework to
identify and evaluate business risks and opportunities. This framework
seeks to create transparency, minimise adverse impact on the business
objectives and enhance your Company''s competitive advantage.
The business risk framework defines the risk management approach across
the enterprise at various levels including documentation and reporting.
The framework has different risk models which help in identifying risks
trend, exposure and potential impact analysis at a Company level.
In accordance with the provisions of Clause 49 of the Listing
Agreement, your Company has also constituted a Risk Management
Committee.
29. Significant and material Orders passed by the Regulators/Courts, if
any
There are no significant material orders passed by the Regulators /
Courts which would impact the going concern status of your Company and
its future operations.
30. Internal Control Systems and their adequacy
The Company has Internal Control Systems, commensurate with the size,
scale and complexity of its operations. The Internal Audit Department
monitors and evaluates the efficacy and adequacy of internal control
systems in the Company, its compliance with operating systems,
accounting procedures and policies within the Company. Based on the
report of internal audit function, process owners undertake corrective
action in their respective areas and thereby strengthen the controls.
Significant observations and corrective actions thereon are presented
to the Audit Committee from time to time.
31. Vigil Mechanism Policy
The Company has a vigil mechanism policy to deal with instances of
fraud and mismanagement, if any. The vigil mechanism policy is uploaded
on the website of the Company.
32. Performance Evaluation
Pursuant to the provisions of Section 134 (3) (p),
149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the
Listing Agreement, annual Performance Evaluation of the Directors as
well as of the Audit Committee, Nomination and Remuneration Committee
and Stakeholders Relationship Committee has been carried out.
The Performance Evaluation of the Independent Directors was carried out
by the entire Board and the Performance Evaluation of the Chairman and
Non-Independent Directors was carried out by the Independent Directors.
33. Independent Directors Meeting
During the year under review, the Independent Directors of the Company
met on March 18, 2015, inter- alia, to discuss:
i) Evaluation of performance of Non-Independent Directors and the Board
of Directors of the Company as a whole.
ii) Evaluation of performance of the Chairman of the Company, taking
into views of Executive and Non- Executive Directors.
iii) Evaluation of the quality, content and timelines of flow of
information between the Management and the Board that is necessary for
the Board to effectively and reasonably perform its duties.
34. Related PartyTransactions
All related party transactions attracting compliance under Section 188
and / or Clause 49 of the Listing Agreement are placed before the Audit
Committee as also before the Board for approval.
Prior omnibus approval of the Audit Committee is also sought for
transactions which are of a foreseen and repetitive nature.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board of Directors
of the Company is uploaded on the website of the Company i.e.
www.hccindia.com
Pursuant to the approval vide Board Resolution dated May 2, 2014 and
Special Resolution passed by the Members of the Company at the 88th
Annual General
Meeting of the Company held on June 20, 2014, the remuneration payable
to Mr. Arjun Dhawan, President & CEO - Infrastructure Business relative
of Mr. Ajit Gulabchand, Chairman and Managing Director of the Company,
who is holding office or place of profit in the Company, was revised
w.e.f. November 1, 2014. During the year under review, the
remuneration paid to Mr. Arjun Dhawan, President & CEO - Infrastructure
Business of the Company was Rs. 2.92 crore.
The disclosures on related party transactions are made in the Financial
Statements of the Company.
35. Extract of Annual Return
The details forming part of the extract of Annual Return in prescribed
Form MGT 9 is annexed hereto as Annexure VIII and forms the part of
this Report.
36. Sexual Harassment
During the year under review, there were no cases filed pursuant to the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
37 Acknowledgements
Your Directors would like to acknowledge and place on record their
sincere appreciation to all stakeholders - clients, Financial
Institutions, Banks, Central and State Governments, the Company''s
valued investors and all other business partners for their continued
co-operation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of
all the employees of the Company and their continued contribution to
its progress.
For and on behalf of Board of Directors,
AJIT GULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House, 11th Floor,
247Park, Lai Bahadur Shastri Marg Vikhroli
(West) Mumbai 400 083
Place : Mumbai
Date : April 30, 2015
Mar 31, 2014
The Directors are pleased to present the 88th Annual Report together
with the Audited Financial Statements for the year ended March 31,
2014.
2. Financial Highlights
Year ended Year ended
Particulars March 31,
2014 March 31,
2013
Rs. crore Rs. crore
Turnover 4,113.49 3,837.29
Profit before Interest,
Depreciation, Exceptional
Items, Other 643.76 378.57
Income and Tax
Less: Interest 607.94 544.10
Depreciation 144.61 163.40
Exceptional Items - 752.55 (15.58) 691.92
Add: Other Income 213.59 134.34
Add/Less: Exchange
Gain/(Loss) (13.85) (14.57)
Profit/(Loss) before Tax 90.95 (193.58)
Less: Deferred Tax
Charge/(Credit) 10.31 (55.94)
Profit/(Loss) after Tax 80.64 (137.64)
Add: Balance brought
forward from previous year (11.64) 126.00
Balance carried to
Balance Sheet 69.00 (11.64)
3. Dividend
As the Company is under Corporate Debt Restructuring (CDR), your
Directors have not recommended any dividend for the financial year ended
March 31, 2014, although the Company has earned profits in the year
under review.
4. Operations
The turnover of the Company at Rs. 4,113 crore has shown an increase of
72% as compared to Rs. 3,837 crore for the corresponding period in the
previous year. The profit before tax is Rs. 90.9 crore (including
exceptional item) as compared to loss of Rs. 193.6 crore for the previous
year.
Your Directors are pleased to inform that during the year under report,
the Company has secured the following major contracts.
- Vishnugad-Pipalkoti Hydroelectric Project, Uttarakhand
Contract Value: Rs. 1597 crore
- Railway LinkTunnel T49 A, Jammu and Kashmir Contract Value: Rs.442
crore
- Bridge across River Sone, Bihar Contract Value: Rs.432 crore
- Yettinahole Project, Package IV
Contract Value: Rs. 904 crore, HCC share 50%
The total balance value of works on hand as on March 31, 2014 is Rs.
14,249 crore.
Decisions are awaited from various clients for tenders submitted by the
Company for 13 packages amounting to about Rs. 7,038 crore (HCC share Rs.
6,054 crore). Tenders for various packages for 29 projects worth over
Rs. 18,972 crore (HCC share Rs. 13,696 crore) are expected to be submitted
in the near future. The Company has also submitted prequalification bids
for 26 projects worth over Rs. 20,439 crore (HCC share Rs. 17,747 crore)
which are under evaluation. Operations of Subsidiaries
i) Lavasa Corporation Ltd. (''Lavasa'') has kept its rationale of
developing an inclusive city for all and is tailoring partnerships and
tie ups with global leaders in their respective sectors. Tie-ups
continued strongly at Lavasa through 2013-14. Partnerships are well in
place and many of these projects are fast moving towards completion.
In the hospitality space, the Accor group is successfully running its
operation with the two brands - Mercure Lavasa and the 1500 plenary
capacity Lavasa International Convention Centre (LICC). Another brand
of the Accor group - Novotel is scheduled for completion by 2015.
Projects with renowned hospitality players like Pullman, Hyatt, Formule
One, Holiday Inn, Holiday Inn Express, Langham Place and Eaton amongst
others are slated to follow in quick succession.
As for the existing hospitality projects, Ekaant -The Retreat and
Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select
Dasve is in its fifth year of successful operations. Dasvino Town &
Country Club, which had a grand launch in early 2010 is growing
steadily with growing number of membership. In the tourism space,
Lakeshore Water sports, Neo Spark Games Arcade and Xth rill Adventure
Sports & Academy are also functioning successfully. Agreements have
also been signed to set up training facilities with Hockey Australia,
Sir Nick Faldo for Golf and Sir Steve Redgrave Rowing Academy.
On the retail front, a significant area has already been leased.
In addition to F&B outlets, many other tie-ups have been finalized in
the retail segment which include Bata Showroom, Charosa Wine Boutique,
Fun Square Digital Cinema, Venkys Express and Keppys.
There were other tie-ups in the tourism space. Lavasa is in advance
stage of discussion with Paramount & Redbull to create Edutainment
theme park in Dasve & Mugaon. Along with this stimulator Golf & Robotic
park for edutainment is started in Family Entertainment Center (FEC).
A significant progress was also made in the education space. Christel
House Lavasa is into its fourth year of operations with 329 students.
2013-14 also saw launch of Phase 2 of Christel House till grade 5th.
Ecole Hoteliere Lavasa started its fifth batch in 2013- 14. The second
batch will receive academic certification from Ecole hotèlierè dè
Lausanne this year.
Doon Public School has signed a MOU to operate K12 school in Knowledge
Vistas Limited (KVL) from FY 2014-15. KVL is already running Roots to
wings, pre primary school at Lavasa for last three years. PACE academy
will also start IIT training program from KVL this year. GREAT (INDIA)
in collaboration with Australian Retail College, which is a leader in
retail training in Australia is planning to open a retail college at
Lavasa. Other educational partners like Symbiosis Institute (Pune) and
Christ University (Bangalore) are also in the process of launching
their programs. Discussions are on to establish North Hampton
University at Lavasa by 2014-15 as well as preparation course school
under Ideal classes from 5th to 12th standard.
Lavasa continued to enjoy healthy sales in residential and commercial
space. Positive sales trend continued throughout the year, with the
Company giving possession to 250 plus residential units in Dasve.
Construction activity on various properties at Dasve and the second
town of Mugaon is progressing at a fast pace.
In institutional sales, L&T Infra Finance has entered into an
understanding to buy 40 acres of land in Dasve and Mugaon. This heralds
the entry of big time corporations into Lavasa and would surely prove
as an impetus for others. Similarly, Hindustan Times, the premier media
establishment is in advanced negotiations to acquire over 6 acres of
land. The media house proposes to establish a state-of-art training
centre for its executive staff. A proposal has also been submitted to
The Times Group to start a premier management training institute on
land it has acquired in Mugaon a few years ago. The Doon Public School
has acquired a 10 acre plot in Mugaon to start its brand of school.
Till the project is completed the school would operate out of an
incubation space in Dasve.
Symbiosis Institute has already been granted building plan approval and
will commence construction of its large campus post monsoon.
Lavasa continued its focus on branding and communication activities in
2013-14. Emphasis through the year was on communicating that
development work at Lavasa has commenced with right earnest, raise
awareness about the planned city and its advantages.
The focus of the exercise was on building preference and restoring
customer confidence in the project. To enable this, a number of site
visits were organized for media, the primary influencers and other key
influencers of public opinion.
A new advertisement campaign was launched in September 2013 to promote
the second town Mugaon as a residential and edutainment hub. The print
campaign positioning Mugaon as the entertainment hub was ably supported
by outdoor, on-site media, digital and social media. The comprehensive
campaign helped generate awareness for the launch and resulted in a
good number of customer enquiries.
A new format of Brand Induction was implemented where all new employees
were exposed to an interactive workshop on KNOWYOUR CITY To promote
tourism and drive footfalls, attractive day and stay packages and
activities were offered to visitors through the Lavasa Holidays Summer
Special (April to June 2013), Mesmerizing Monsoon (July to September
2013) and Lavasa Holidays Festive Fiesta (October to December 2013)
packages. The focused campaign resulted in tourist traffic surging to
all time high. At the onset of monsoon in June, Lavasa witnessed the
highest footfall with nearly 1 lakh tourists enjoying the serene
landscape. Total footfalls in the calendar year were 7,74,300.
Lavasa won the ''Most promising new Destination'' and the ''Best Print
Promotional Material'' awards at the premiere industry event, Travel and
Tourism Fair held in Mumbai and Pune.
Strategic and design support to Special Purpose Vehicles (''''SPVs'''') was
provided on a need basis.
The sixth edition of the signature brand event Lavasa Women''s Drive set
a Guinness World Records TM for- Most Female Participants in a Motor
Sport Event. To achieve this global recognition 934 participants in
467 cars drove from Mumbai and Pune to picturesque Lavasa on February
22, 2014.
Other events that were held during the year include Lavasa Hill Run
(Positioned as first health run of the year, January 2014), Pune
Bicycle championship (October 2013), Diwali Dhamaka (November 2013) and
Vintage Car Show (December 2013).
Digital and social media channels were leveraged primarily for
engagement and for information dissemination. The channels were
extensively used to promote events, respond to queries and initiate
conversations on platforms like travel, tourism and discussion forums
on urbanization. Innovative approaches like road block on
www.economictimes. com made sure the visitors to the website had to
mandatorily view the Lavasa banner, introduction of interest - a
virtual pinboard to share pictures and an integral application which
allowed users to upload pictures through integral using
#capturinglavasa were activated during the course of the year.
In 2013-14, the Public Relations campaign focused on building
preference and restoring customer confidence in the project. Meetings
with senior editors in Mumbai and Pune and the constant engagement with
beat reporters in Mumbai and Pune led to better appreciation of
Company''s stand on issues. This resulted in them presenting a balanced
perspective on most issues.
Promotional initiatives of various SPVs were publicized through news
stories, editorial feature stories and photo features.
The city of Lavasa now has a new post office, a new school, a hospital
and more than a dozen food and beverage establishments open for
business. It also has four operating hotels with three more under
construction, a Petrol Pump , two bank branches along with ATMs, a
convention centre, a public safety centre with Fire engine, Police
outpost, Tourist information center, Multilevel Car parking facilities,
Nature trials, Citizen contact centre, State of the art Hospital with
pharmacy, rental housing for low income groups , games arcades, water
sports facility, adventure sports facility , a modern club with gym,
sports and Spa facilities , public transport system for citizens ,
Schools for local population etc.
Building the infrastructure right, from the beginning, is a key
strategy to ensuring long-term livability The drinking water at Lavasa
is fit for consumption, straight from the tap, without the need for
additional filtration. The sewage is treated as per required standards
before being reused for irrigation and other non-potable uses. Lavasa''s
power distribution grid is nearly 99% reliable and the young city is
already on the cutting edge of urban environmental sustainability
initiatives. Over 50km. of well maintained motor able roads are
operational and more being constructed, Lavasa has already opened parks
and play areas to the public. The e-governance portal will play a
major role in communicating with citizens and providing round the clock
services.
A round the clock Lavasa Citizen Contact Centre that has been set up
this year, envisions to make the lives of the citizens and visitors
easy and convenient. The Lavasa Citizen Contact Centre will be a
one-stop information source for non emergency and emergency related
services. It will provide a single window resolution for all customer
needs and visitor requests, be involved in proactive information
distribution, data collection and management services, Customer
Satisfaction Surveys and Customer handover and possession.
The City Management Services (CMS) Department is equally dynamic in
seeking to coordinate services in this rapidly changing setting.
CMS is currently divided into seven specialist divisions including
Customer Services, Public Safety & Security, Enterprise Utilities,
Public Works, Administration & Finance, Community Development and
Geographic Information Systems & Management Information Systems.
The City Management Services Department will slowly evolve into a new
governance entity that will, at some point, be the core of a new
replicable governance model. The City Management Services Department
meets on a monthly basis with a committee of villagers from throughout
the project area. The Village Committee is the first of several such
citizen advisory groups that will together form a key component of the
Lavasa citizen and stakeholder engagement mechanisms.
Lavasa has completed purchase of 10477 acres of land and is processing
completion of another 2133 acres, for which agreements were signed in
the past. Steps to reach an overall land purchase target of 18000 acres
are in progress.
Lavasa continues to regularly monitor environmental aspects such as air
quality, water quality and soil quality are being carried out as per
MoEF guidelines. The Environmental Compliance Report is being submitted
to MoEF once in six months and the June 2013 and December 2013 reports
have already been submitted.
The work of Biodiversity conservation and enhancement continues at the
required pace. In the case of flora, around 130 trees have been
transplanted with a survival rate of 70%. The maintenance of around
45,000 trees which were planted in Mugaon in the year 2012 has been
rigorously carried out with full survival. In case of aquatic fauna,
the resultant growth of 28,000 fish seeds which were released in Dasve
Lake in year 2012 has been found to be satisfactory and this has been
verified in the presence of Fisheries officer, Govt. of Maharashtra.
For slope protection and enhancing the greenery within the region, soil
bioengineering (biodegradable coir mats have been applied over the
slopes) and plantation of stumps has been done. Hydro-seeding & manual
seeding was also carried out for slope protection and to re-establish
vegetation over an area covering around 70 acres in this season and the
total area that has been so treated is more than 700 acres till date.
Tree plantation of around 1,25,000 tree saplings was carried out in
Mugaon and Bhoini. New Plantation in the nursery at Bhoini continues
and there is adequate plant stock as it is a feeder for mass plantation
and other internal landscaping requirements. Both the nursery and mass
plantation have been organically certified.
Techno-commercial evaluation of renewable sources of energy feasible at
Lavasa has been completed by TERI (Tata Energy Resources Institute).
Lavasa is also exploring possibilities for green certification of its
total city development.
First Town Dasve is ready with all basic infrastructure, such as access
roads, internal roads, water treatment plant, water distribution
network, sewage network, sewage treatment plant, telecom network and
services is operational. As on date more than 120 contractors with a
work force of about 4500 workers have been mobilized at site for
different works.
Till date more than 600 residential units have been handed over to CMS
department and over 500 residential units have been handed over to
customers. Out of these 600 units. 319 Villas were given to the CMS
department for hand over to customers. Of these 319 villas, 212 Villas
have already been handed over to the customers. Work on another 284
villas of different types, with built- up area ranging from 2000 sq.
ft. to 4000 sq. ft. is in progress.
Work on the infrastructure for the second town of Mugaon has been
accelerated. Work on utilities like water, sewer, power, data lines and
on the approach road is in progress. The improvement to the existing
Mugaon-Tamhini Zilla Parishad road is complete. The portion of this
road will also form a part of the approach road for the proposed tunnel
between Tamhini and Mugaon. The work on the inter village road from
Mugaon to Gadle (6 kms) is completed
To facilitate the provision of water required during construction at
Mugaon, the construction of Gadle Dam and a reservoir in Mugaon
(Capacity  1.00 Lakh cubic metre) is 90% complete. A bridge over the
dam intake well and allied works are scheduled to be completed in
2014-15.
Rehabilitation work on new gaothans has commenced and by the end of the
year, 50 units will be ready to accommodate villagers, along with other
city infrastructure like school and community centre. This
rehabilitation will also help augment the construction of the first
phase of the apartments in Mugaon.
Work on 29 buildings comprising of 0.9 million square feet of salable
area at Mugaon is on. It is expected to be completed in next 18 months
Lavasa has also initiated a number of development and empowerment
programs for the local community. Some of the key initiatives include
provision of treated drinking water to 12 villages in the project area
at 62 locations on a daily basis, helping villages avail benefits of
Government drinking water scheme, Calligraphy workshops, aptitude tests
and counseling for students of Zilla Parishad (ZP) schools, crèche for
labor children; starting the Apollo Lavasa Primary Health Centre at
Bhoini and provision of free health check up, medicines and ambulance
service to villagers; monthly health and awareness camps for HIV/AIDS,
malaria, nutrition, water borne diseases, Hepatitis B vaccination and
de- worming medicines. Employment and self employment opportunities to
the locals have also been provided.
Status update on Environment Clearance from Ministry of Environment and
Forests (MoEF)
As you are aware that Lavasa was issued Show Cause Notice by Ministry
of Environment & Forest (MoEF), Government of India (GOI) regarding
violations of the Environmental Impact Assessment notifications of 1994
as amended in 2004 and superseded in 2006 ("EIA Notifications"). Lavasa
made various representations as per the directions given by the
authorities and after complying with the conditions stipulated, MoEF
GOI was pleased to accord the Environmental Clearance to Lavasa,
Herein below given are the updates in the matter during the Financial
Year 2013 - 2014 :-
1. On April 23, 2013, Appeals filed by Lavasa and Shedge before
National Green Tribunal (NGT) were listed on board. The Hon''ble NGT
(despite stay of further proceedings by Hon''ble Supreme Court) fixed
the matter on May 14, 2013 for hearing of the application for interim
reliefs and interim orders.
2. On May 1, 2013, Lavasa filed Civil Appeal bearing No. 4280 of 2013
before Hon''ble Supreme Court against the order dated April 23, 2013 of
NGT The said matter was listed on May 10, 2013. Upon hearing the
Counsel for Lavasa, the Hon''ble Supreme Court was pleased to issue
Notice in the matter. Thereafter, on November 27, 2013, the said matter
was listed before the Ld. Registrar, Supreme Court and the Ld.
Registrar ordered for original records in NGT Appeal No. 9 of 2012. On
the basis of the order, the records are transferred to Supreme court
Registry.
3. On May 2, 2013, Lavasa filed Contempt Petition being No. 203 of
2013 before Hon''ble Supreme Court against Dyaneshwar Shedge. The said
matter was listed before Hon''ble Supreme Court on July 2, 2013, and
upon hearing the Counsel for Lavasa, the Hon''ble Supreme Court was
pleased to list the said matter with main matter i.e. Transfer
Petition.
4. On October 10, 2013, Lavasa''sWrit Petitions filed against MoEF &
Ors. and other PILs filed against State of Maharashtra (wherein Lavasa
is one of the Respondent party) were listed before Hon''ble Bombay High
Court for transfer of the same to NGT After hearing the parties, the
Hon''ble Bombay High Court said that they would peruse each petition and
accordingly decide the issue of transfer to NGT
5. Lavasa''s NGT Appeal No. 36 of 2011 was listed on board before NGT
from time to time and the next date of hearing is May 5, 2014.
Further, Lavasa is regularly filing six monthly compliance report as
per the EC order.
ii) HCC Real Estate Ltd.
HREL, a wholly owned subsidiary of your Company is into the business of
building residential & office complexes in real estate sector.
- New Real Estate Projects under bidding
HREL has procured the bidding documents for re development of
Parleshwar CHS at Vile Parle (East), Mumbai.
HREL is also exploring on outright purchase of various independent
plots on L.B.S. Marg at Vikhroli (W) as well as at Bhand up (W) for
re-development.
- Other Projects
Other projects of HCC Real Estate Ltd. and its subsidiaries are
progressing well as explained in Management Discussion and Analysis
Report.
iii) HCC Infrastructure
HCC Infrastructure Company Ltd., a wholly owned subsidiary of your
Company, has six National Highways Authority of India (NHAI) road
concessions in its portfolio totaling about Rs. 5,500 crore.
The Company, through its subsidiaries HCC Concessions, HCC Power and
HCC Operations & Maintenance, has an infrastructure development focus
through Public Private Partnership, largely in the roads, hydro power
and water sectors. Your Company has a strong focus on value creation
through a stringent investment discipline. The expertise of the
management team extends from concept innovation and evaluation of risk
& return, to construction management and operations. Along with a focus
on quality and timely execution, the Company is committed to provide
reliable, safe and world class operations and maintenance services to
the country''s end users.
Current Road Portfolio:
The three operational projects Nirmal Annuity, Delhi Faridabad Elevated
Expressway and Dhule Palesner Highway have been operational for more
than four, three and two years respectively and are running smoothly.
The three under construction highway projects in West Bengal (NH34)
have achieved significant progress and one of the larger projects is on
the anvil of achieving the provisional completion date, while the other
is expected to be operational in the first half of this year.
During the year, HCC Concessions submitted 6 Request for Qualification
(RFQs). HCC Concessions partnered with other infrastructure players for
certain bids to diversify risk, efficiently manage equity and increase
competitiveness. The slowdown witnessed in FY13 continued in FY14 with
only about 370 km road projects being awarded by NHAI on BOT mode in
the current year. The Company will continue to bid for NHAI projects in
the next financial year, albeit conservatively, while also evaluating
state road opportunities.
Status of Operational Assets:
Dhule Palesner Highway Project (NH3)
The project road is section of National Highway No. 3 commonly known as
Agra - Bombay road which starts at Agra, and ends at Bombay (now
Mumbai). The NH 3 forms an important part in Indian National Highway
network and passes through rich belts of Madhya Pradesh and
Maharashtra. This road caters to the traffic of various parts of India
as it connects financial capital (Mumbai) of India to the National
Capital (Delhi) of India. In FY09, NHAI awarded the development of four
lane highway of project road starting from Maharashtra/ Madhya Pradesh
Border at Km 168.500 and ending at Dhule at Km 265.000 to an HCC led
consortium on a BOT (toll) basis. The concession period is 18 years,
including a construction period of 30 months. The HCC led consortium
completed the project 4 months ahead of schedule and the project road
was operational on February 11, 2012.
The operation of project road is running smoothly. Due to persistent
efforts by Company we have received the tolling rights for part of
Phase II work including Nardana bypass section two years ahead of
schedule resulting in improved revenue in spite of a stagnant economy.
Considering the significance of the project road in the Indian road
network, it is expected to yield high returns for the remaining
concession period of about 14 years. The highway has been developed in
partnership with Sadbhav Engineering Ltd. and John Laing Investments
Ltd. (UK) with an investment of Rs. 1,420 crore.
Delhi Faridabad Elevated Expressway (NH2) (dfskywayÂ)
The Delhi Faridabad Elevated Expressway or dfskyway is a six lane 4.4
km elevated highway connecting Delhi and Haryana at Badarpur. It
connects National Capital of India, Delhi and fastest growing city of
India, Faridabad. The dfskyway has been designed to provide
uninterrupted travel past the four major crossings of MB Road, Jethpur,
Sarai Bypass and Sector 37 HCC Concessions Ltd. developed this
engineering marvel with an investment of nearly Rs. 600 crore. The
expressway has 20 exits, 10 underpasses and is the first of its kind
spaghetti structure in India. HCC Concessions was awarded a 20 year
concession in 2008 to develop, construct and operate this asset by the
National Highways Authority of India (NHAI). The dfskyway contributes
significantly to Delhi''s rapidly expanding infrastructure by reducing
travel time by over 40 minutes through an extremely congested corridor,
that benefits residents and inter-state traffic alike. It is one of
Delhi''s major radial roads and caters to very high traffic volume of
over 100,000 PCUs per day. HCC Concessions'' parent, Hindustan
Construction Company (HCC), has designed, engineered and constructed
the dfskywayÂ.
The Delhi Faridabad Elevated Expressway was formally inaugurated on
November 29, 2010 significantly ahead of its scheduled completion date,
by the Chief Ministers of both Delhi and Haryana, along with the
Minister of Road Transport & Highways. The asset has been awarded the
Best Project Award by Construction Industry Development Council 2011
and the Infrastructure Excellence Award 2011 by CNBCTV18.
Nirmal Annuity (NH7)
The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000)
on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the
development of four lining of this 30 km long stretch on a BOT basis
under the Annuity scheme to HCC. The concession period for the project
is 20 years, including a construction period of 24 months. The project
was developed with an investment by HCC of Rs. 315 crore. This project
became operational in July 2009, 100 days ahead of the scheduled
completion date. The debt at Nirmal has since been refinanced through a
structured bond at 9.38% fixed rate of interest for 17 year tenure.
The SPV has received timely annuity payments over the last year and the
operations and maintenance are being managed effciently by HCC
Operations and Maintenance Ltd.
Status of Assets under Development:
West Bengal (NH34) Highway Project
This project being developed by HCC Concessions Ltd. on a Design,
Finance, Build, Operate and Transfer (DFBOT) basis, is the largest and
among the most ambitious PPP highway projects being executed in West
Bengal (WB). The National Highway No.34 commonly referred to as NH34 is
an important connector to north eastern states with Kolkata in West
Bengal. NH34 originates from Dum Dum in north Kolkata and ends at
Dalkhola in West Bengal. It is about 443.5 km long road along
international border and is a primary conduit for transportation of
passenger as well as freight traffic from the South Bengal, South- East
states and Central states of India to major towns and districts in the
North Bengal and to all Eastern and North East states of India. The
development of this stretch will improve connectivity to the East-West
Corridor, which has already been four-laned. West Bengal is
strategically located to play a pivotal and catalytic role in promoting
economic cooperation in the sub region (Bangladesh, Bhutan, North
Eastern states and West Bengal).
The project road development is divided into three contiguous sections
Baharampore - Farakka (101 km), Farakka - Raiganj (102 km) & Raiganj -
Dalkhola (55 km). The concession period for the different segments
totaling about 256 km range from 25 to 30 years, including a
construction period of 30 months and an investment of over Rs. 3,200
crore. The Company has achieved significant progress in the two larger
sections and is expecting to start operations for one project very soon
and the other one in first half of this financial year.
NH34 provides nearest access to Kolkata and Haldia ports for the north
eastern states of India and neighboring Bangladesh, Bhutan and Nepal.
The traffic on NH34 comprises of 85~90% commercial traffic, carrying a
diversified mix of manufacturing goods, building materials, steel, jute,
food grains and tea. The four-laning of two projects between Kolkata
and Baharampore is progressing in significant pace in spite of clearance
issues of state. This will further increase the throughput and improve
traffc on this stretch.
Baharampore Farakka Highway
The project road starts from north of Kolkata at Km 191.420 near
Baharampore and ends at Farakka (before Farakka barrage) at Km 294.680.
The Baharampore Farakka section is about 101 km in length and traverses
through Baharampore, Raghunathganj and Farakka towns in Murshidabad and
Malda districts of West Bengal. It also passes through various small
villages like Shibpur, Palsanda, Morgram, Chandermore, Basudebpur and
Dhulian. The concession period is 25 years, including a construction
period of 30 months. The project is being implemented with an
investment of Rs. 1,169 crore.
The construction work has progressed significantly in the last year
in spite of execution challenges due to delays in handover of land and
75.45 km of project length has been completed by the end of the year.
The Company has completed all requisite parameters for Provisional COD
and is awaiting approval from NHAI, HO. The Company expects to start
operation very soon.
Farakka Raiganj Highway
The project road starts from Farakka at Km 294.680 (before Farakka
barrage) and ends at Raiganj at Km 398.000. The Farakka Raiganj section
is about 102 km in length and traverses through Farakka barrage, Kalia
Chawk Bazaar and Malda city in Malda and North Dinjapur districts of
West Bengal. It also passes through various small villages like
Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The
concession period is 30 years, including a construction period of 30
months. The project is being implemented with an investment of Rs. 1,378
crore.
The Company has completed substantial stretch of roads and structures
of 102 km in the last year. The building and tunnel work for both toll
plazas has also been completed. The Company expects to start operation
by end of Q2 of this financial year.
Raiganj Dalkhola Highway
The project road starts from Raiganj at Km 398.000 and ends at Dalkhola
at Km 452.730. The Raiganj Dalkhola section is about 55 km in length
and traverses through Raiganj and Dalkhola towns in North Dinjapur
district of West Bengal. It also passes through various small villages
like Soharai, Karandighi, Maheshbathna and ends at the intersection of
NH31. The concession period is 30 years and includes a construction
period of 30 months. The project is being implemented with an
investment of Rs. 684 crore. The project progress has been very slow due
to the non-availability of land for over 2 years. The Company expects a
major portion of the land for this section to be handed over by Q1 of
this financial year.
iv) Steiner AG, Switzerland
Your Company holds through its wholly owned subsidiaries HCC Mauritius
Enterprises Ltd. and HCC Mauritius Investment Ltd. 100% stake in
Steiner AG, with the acquisition of remaining 34% of shares, as
pre-agreed, during this year. Steiner AG is a leading total and general
contracting Company in Switzerland, specialized in turnkey building
construction including refurbishments and real estate development.
Steiner AG had a consolidated revenue of Rs. 5380.9 crore and a
consolidated profit of Rs. 55.0 crore in the financial year 2013-14.
Steiner AG handed over part of the project "House of Peace in Geneva"
to the client in the financial year 2013-14. It forms the heart of the
Campus de la Paid at the headquarters of the University Institute of
International and Development Studies (IHEID). Steiner has been working
on this significant architectural project as a general contractor since
September 2013. The extraordinary building form made up of four petals
and the twin-sided glazed facade make the House of Peace a real
architectural highlight and an attraction for international visitors.
Löwenbräu, a total contracting project of the Company, received the
Leed Gold certification for its office building by the Green Building
Council Environment Design in May 2013. This adds to the portfolio of
environmentally sensitive buildings constructed by the Company.
Steiner AG signed many important contracts in 2013-14. At year end,
the order backlog was CHF 1,181 million. This is lower than the CHF
1,210 million order backlog as of March 31, 2013. The Company has also
secured projects worth more than CHF 250 million, which are yet to be
formally contracted and therefore have not yet been included in the
order book.
The Board of Directors of Steiner AG comprises six members: Mr. Ajit
Gulabchand, who also acts as Chairman, Mr. Rajgopal Nogja, who also
acts as Managing Director / Delegate of the Board of Directors, Mr.
Anil Singhvi, Mr. Peter Steiner, Mr. Andreas Schmid and Dr. Peter
Huggler.
v) Highbar Technologies Ltd.
Highbar Technologies Ltd. (''Highbar''), a wholly owned subsidiary of
your Company, is an Information Technology Company formed by your
Company, with the vision of providing end-to-end IT solutions to
Infrastructure industry.
In the financial year 2013-14, Highbar was able to serve 14 new
customers taking the total tally of customers to 78. This is achieved
while the key customer segment i.e. Infrastructure industry is passing
through challenging times. Highbar Technologies is dominating ''IT for
Infrastructure'' market in short span. Your Company''s group legacy has
enabled Highbar to understand & service these industries effectively.
Highbar is now also servicing Telecom, PEB (Pre- engineered Buildings),
Manufacturing, Retail, Agro- chemicals, Iron & Steel, Media etc.
Industries.
Highbar has grown its IT capabilities and the expertise in various
areas including ERP (Enterprise Resource Planning), Business
Intelligence, cloud offerings through High bar Cloud Connect, Employee
portal, CRM (Customer Relationship Management) from SAP & Microsoft,
Line of business solutions, etc. High bar Rapid Start and High bar
Rapid Start Analytics solutions are based on the templates approach
for ERP and Business Intelligence respectively and are intellectual
properties (IP) assets of High bar Technologies. High bar has maintained
the strategic alliance with SAP at ''Gold partnership level'' and is
preferred partner of SAP for infrastructure industry.
High barÂs Dubai subsidiary, High bar Technologies FZ-LLC is now fully
operational and has started increasing its presence counting six major
customers in Middle-East. High bar has also started pursuing
opportunities in government sector & secured the first government order.
When the macroeconomic scenario in the country improves, High bar will
be in a better position to leverage the situation to its advantage.
High bar, the spin-off from your Company''s internal IT function, has
succeeded, when the success rate of such experiments is just 5%
globally & in India. High bar Technologies has established a proper
scalable organization structure with all the functions in place to
facilitate and sustain future growth. It is on the course towards
accomplishing its vision of being ''the most preferred end-to-end IT
solution provider'' for infrastructure industry.
In accordance with the Scheme of Amalgamation under Section 391 to 394
of the Companies Act, 1956, approved by the Honorable High Court of
Judicature at Bombay vide Order dated April 4, 2014, Hinson
Techno consult Ltd, wholly owned subsidiary of HCC, has been amalgamated
with High bar.
5. Subsidiary Companies
At the beginning of the year, the Company had 74 Subsidiary Companies.
During the year under review, the following changes have taken place.
i) Your Company has incorporated a Wholly Owned
Subsidiary in Mauritius i.e. HCC Mauritius Investment Limited w.e.f.
October 4, 2013
ii) Hincon Techno consult Limited, Wholly Owned
Subsidiary of your Company has been amalgamated into Highbar
Technologies Limited, Wholly Owned Subsidiary of your Company vide
Scheme of Amalgamation under Section 391 to 394 of the Companies Act,
1956. The said Scheme of Amalgamation has been duly approved by the
Hon''ble High Court of judicature at Bombay vide Order dated April 4,
2014.
iii) Klemanor Investments Limited has ceased to be your subsidiary
company w.e.f. March 12, 2014.
In terms of the General Circular No. 2/2011 dated February 8, 2011 read
together with General Circular No. 3/2011 dated February 21, 2011,
issued by the Government of India - Ministry of Corporate Affairs under
Section 212(8) of the Companies Act, 1956, granting general exemption
to companies from attaching financial statements of subsidiaries,
subject to fulfillment of conditions stated in the circular, copies of
the Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Auditors Report of the subsidiary companies for the
year/period ended December 31, 2013/March 31, 2014 are not attached to
the Balance Sheet of the Company as the Company has fulfilled/shall
fulfill the following conditions:
(i) The Board of Directors of the Company has vide resolution dated May
2, 2014 consented for not attaching the balance sheet(s) of the
concerned subsidiary(ies);
(ii) The Company has presented in its Annual Report, the consolidated
financial statements of holding Company and all of its subsidiaries duly
audited by its statutory auditors;
(iii) The Consolidated financial statement has been prepared in strict
compliance with applicable Accounting Standards and where applicable,
Listing Agreement as prescribed by the Securities and Exchange Board of
India;
(iv) The Company has disclosed in the consolidated balance sheet the
following formation in aggregate for each subsidiary including
subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets
(d) total liabilities (e) details of investment (except in case of
investment in subsidiaries) (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation (j) proposed dividend,
as applicable;
(v) The financial statements and other related detailed information of
the following subsidiaries shall be made available to members of the
holding Company and subsidiary companies seeking such information at
any point of time:
1. Western Securities Ltd.
2. HCC Aviation Ltd.
3. HCC Construction Ltd.
4. Highbar Technologies Ltd.
5. Highbar Technologies FZ LLC
6. HCC Mauritius Enterprises Limited
7 HCC Mauritius Investment Limited (w.e.f. October 4, 2013)
8. Steiner AG (Formerly known as Karl Steiner AG)
9. Steiner Promotions et Participations SA
10. VM STAG
11. Eurohotel SA
12. Steiner (Germany) GmbH
13. Steiner Leman SAS
14. SNCValleiry Route De Bloux
15. Steiner India Ltd.
16. HCC Infrastructure Company Ltd. 17 HCC Concessions Ltd.
18. Nirmal BOT Ltd.
19. Badarpur Faridabad Tollway Ltd.
20. Baharampore - Farakka Highways Ltd.
21. Farakka - Raiganj Highways Ltd.
22. Raiganj - Dalkhola Highways Ltd.
23. Dhule Palesner Operations & Maintenance Ltd.
24. HCC Power Ltd.
25. HCC Operations & Maintenance Ltd.
26. Narmada Bridge Tollway Ltd. 27 HCC Real Estate Ltd.
28. HRL Township Developers Ltd.
29. HRL (Thane) Real Estate Ltd.
30. Nashik Township Developers Ltd.
31. Maan Township Developers Ltd.
32. Charosa Wineries Ltd.
33. Powai Real Estate Developers Ltd.
34. HCC Realty Ltd.
35. Pune-PaudToll Road Company Ltd.
36. Panchkutir Developers Ltd. 37 Lavasa Corporation Ltd.
38. Lavasa Hotel Ltd.
39. Apollo Lavasa Health Corporation Ltd.
40. Lakeshore Watersports Company Ltd.
41. Dasve Convention Centre Ltd.
42. Dasve Business Hotel Ltd.
43. Dasve Hospitality Institutes Ltd.
44. Lakeview Clubs Ltd.
45. Dasve Retail Ltd.
46. Full Spectrum Adventure Ltd. 47 Spotless Laundry Services Ltd.
48. Lavasa Bamboocrafts Ltd.
49. Green Hill Residences Ltd.
50. My City Technology Ltd.
51. Reasonable Housing Ltd.
52. Future City Multiservices SEZ Ltd. (Formerly known as Minfur
Interior Technologies Ltd.)
53. Rhapsody Commercial Space Ltd.
54. Valley View Entertainment Ltd.
55. Andromeda Hotels Ltd.
56. Sirrah Palace Hotels Ltd. 57 Warasgaon Tourism Ltd.
58. Our Home Service Apartments Ltd.
59. Warasgaon Power Supply Ltd.
60. Sahyadri City Management Ltd.
61. Hill City Service Apartments Ltd.
62. Kart Racers Ltd.
63. Warasgaon Infrastructure Providers Ltd.
64. Nature Lovers Retail Ltd.
65. Osprey Hospitality Ltd.
66. Starlit Resort Ltd.
67 Warasgaon Valley Hotels Ltd.
68. Rosebay Hotels Ltd.
69. Mugaon Luxury Hotels Ltd.
70. Warasgaon Assets Maintenance Ltd.
71. Hill View Parking Services Ltd.
72. Whistling Thrush Facilities Services Ltd.
73. Verzon Hospitality Ltd.
(vi) Further, the financial statements of the subsidiary companies shall
also be kept for inspection by any member at the registered office of
the Company and of the subsidiary companies concerned and the Company
shall furnish a hard copy of the details of accounts of subsidiaries to
any member on demand;
(vii) The holding as well as subsidiary companies in question shall
regularly flew such data to the various regulatory and Government
authorities as may be required by them;
(viii) The Company has given Indian rupee equivalent of the figures
given in foreign currency appearing in the accounts of the subsidiary
companies along with the exchange rate as on closing day of the
financial year;
6. Share Capital
During the year under review, your Company''s Authorised Share Capital
has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore)
comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000
Redeemable Cumulative Preference Shares of Rs. 10/- each.
During the year under review, your Company''s paid up equity share
capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty
Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising
60,66,10,420 Equity Shares of Rs. 1/- each.
Share Warrants
During the year under review, in accordance with the approval of the
Members, the Company had issued and allotted 3,92,15,686 Warrants
convertible into 3,92,15,686 Equity Shares of Rs. 1/- each at a
conversion price of Rs. 16.32/- per equity share (including premium of Rs.
15.32/- per equity share), on a preferential basis, convertible within
a period of 18 months from the date of allotment of Warrants,
aggregating Rs. 64 crore to the Promoter Companies (Hincon Holdings
Limited and Hincon Finance Limited). The said warrants were issued and
allotted to these companies at the price as determined through SEBI
prescribed formula.
7. Public Deposits and Loans/Advances
Your Company has not accepted any deposits from the public, or its
employees during the year under review.
Pursuant to Clause 32 of the Listing Agreement, the particulars of
loans/advances given to subsidiaries have been disclosed in the Annual
Accounts of the Company.
8. Employee Stock Option Scheme (ESOP)
During the year under review, 1,20,180 options got vested to the
employees of the Company.
As on March 31, 2014, 46,94,800 stock options are outstanding
(comprising vested after adjustment for lapsed and exercised options),
in aggregate, for exercise and are exercisable at a price of Rs. 52.03
per stock option.
Each option, when exercised, would entitle the holder to subscribe for
one equity share of the Company of face value Rs. 1 each.
The particulars with regard to the Employee Stock Options as on March
31, 2014 as required to be disclosed pursuant to the provisions of
Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I
to this Report.
9. Status of GDSs
During the financial year 2005-06, the Company had issued Global
Depository Shares (GDSs) and the underlying shares against each of the
GDSs were issued in the name of the Depository, Citi Bank N.A.
As on March 31, 2014, 1,20,720 GDSs have remained outstanding which
forms part of the existing paid up capital of the Company.
10. Consolidated Financial Statements
The Consolidated Financial Statements of the Company prepared in
accordance with applicable Accounting Standards forms a part of this
Annual Report.
11. Corporate Governance
As per Clause 49 of the Listing Agreement with the Stock Exchanges,
separate Chapter on Corporate Governance practices followed by the
Company together with a Certificate from the Company''s Auditors
confirming compliance forms part of this Report.
12. Directors
Mr. K. G. Tendulkar has resigned as a Director of the Company w.e.f.
August 2, 2013 and Mr. Nirmal P Bhogilal has resigned as a Director of
the Company w.e.f. October 23, 2013.
Mr. ArunV. Karambelkar has resigned as Whole-time Director of the
Company w.e.f. April 29, 2014 and Dr. Ila Patnaik has resigned as a
Director of the Company w.e.f. April 30, 2014.
The Board places on record their appreciation for the valuable guidance
and services rendered by these Directors/ Whole-time Director of the
Company.
In accordance with the provisions of Section 149 of the Companies Act,
2013, your Board of Directors are seeking the appointment of Mr. Ram P.
Gandhi and Mr. Sharad M. Kulkarni, who are retiring by rotation at the
ensuing Annual General Meeting under the erstwhile applicable
provisions of Companies Act, 1956, as Independent Directors for 3
(three) consecutive years for a term up to the conclusion of the 91st
Annual General Meeting of the Company in the calendar year 2017
The Company has received Notices under Section 160 of the Companies
Act, 2013 from members signifying their intention to propose Mr. Ram P
Gandhi and Mr. Sharad M. Kulkarni as a candidate for the offce of
Independent Director at the ensuing Annual General Meeting.
The Company has also received the requisite disclosures/declarations
from Mr. Ram P Gandhi and Mr. Sharad M. Kulkarni as required under
Section 149 and other applicable provisions of the Companies Act, 2013.
As per the provisions of Section 152 of the Companies Act, 2013, Prof.
Fred Moavenzadeh, Director of the Company retires by rotation at the
ensuing Annual General Meeting. Prof. Fred Moavenzadeh has expressed
his intention not to seek re-election as a Director of the Company.
Profile of all these Directors has been given in the Report on the
Corporate Governance as well as in the Explanatory Statement to the
Notice of the ensuing Annual General Meeting of the Company.
13. Directors'' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, your Directors confrm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
b) the selected accounting policies were applied consistently and the
Directors 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, 2014 and of the profit of the Company for the
year ended on that date.
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act,1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d) the annual accounts have been prepared on a going concern basis.
14. Industrial Relations
The industrial relations continued to be generally peaceful and
cordial.
15. Transfer to Investor Education and Protection Fund (IEPF)
The Company has, during the year under review, transferred a sum of Rs.
9,17,451/- to Investor Education and Protection Fund, in compliance
with the provisions of erstwhile Section 205C of the Companies Act,
1956. The said amount represents dividend for the financial year 2005-06
which remained unclaimed by the members of the Company for a period
exceeding 7 years from its due date of payment.
16. Particulars of Employees and other additional information.
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules made there under is given in the Annexure to this
Report and forms part of the Report. However, in terms of Section
136(1) of the Companies Act, 2013, the Report and Accounts are being
sent to the members excluding the aforesaid Annexure. Any member
interested in obtaining copy of the same may write to the Company
Secretary at the Registered Office of the Company.
17. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo.
The information relating to the conservation of energy, technology
absorption and foreign exchange earnings and outgo as required to be
disclosed under the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, is given in Annexure II forming
part of this Report.
18. Auditors
M/s Walker Chandiok & Co.LLP Chartered Accountants, Mumbai bearing ICAI
Registration No. 001076N are proposed to be appointed as Auditors of
the Company from the conclusion of the ensuing Annual General Meeting
till the conclusion of the sixth Annual General Meeting of the Company
held thereafter, subject to ratification of the appointment by the
members at every AGM held after the ensuing AGM.
As required under Section 139 of the Companies Act, 2013, the Company
has obtained a written consent from M/s Walker Chandiok & Co.LLP to
such appointment and also a certificate to the effect that their
appointment, if made, would be in accordance with Section 139(1) of the
Companies Act, 2013 and the rules made there under, as may be
applicable.
19. Auditors'' Report
The Auditors'' Report to the members on the Accounts of the Company for
the financial year ended March 31, 2014 does not contain any
qualification.
20. Acknowledgements
Your Directors would like to acknowledge and place on record their
sincere appreciation to all stakeholders - Clients, Financial
Institutions, Banks, Central and State Governments, the Company''s
valued investors and all other business partners for their continued
co-operation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of
all the employees of the Company and their continued contribution to
its growth.
For and on behalf of Board of Directors,
AJIT GULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House, 11th Floor,
247Park, Lal Bahadur Shastri Marg
Vikhroli (West)
Mumbai 400 083
Place: Mumbai
Date: May 2, 2014
Mar 31, 2013
To, The Members of Hindustan Construction Co. Ltd.
1. Report
The Directors are pleased to present the 87th Annual Report together
with the Audited Accounts for the year ended March 31, 2013.
2. Financial Highlights
Year ended Year ended
Particulars March 31, 2013 March 31, 2012
Rs. crore Rs. crore
Turnover 3,837.29 4002.76
Profit before Interest,
Depreciation, Exceptional
Items and Tax 378.57 439.80
Less: Interest 529.67 543.16
Depreciation 163.40 162.10
Exceptional Items (15.58) 677.49 166.32 871.58
Add: Other Income 119.91 122.83
Add/Less: Exchange
Gain/(Loss) (14.57) (9.53)
Profit/(Loss) before Tax (193.58) (318.48)
Less: Deferred Tax
Charge/(Credit) (55.94) (96.23)
Profit/(Loss) after Tax (137.64) (222.25)
Add: Balance brought
forward from last year 126.00 347.83
Transfer from Debenture
Redemption Reserve - 16.67
Amount available for
Appropriation (11.64) 142.25
Less: Appropriations
Dividend - -
Tax on Dividend - -
Debenture Redemption Reserve - 16.25
Transfer to General Reserve - - 16.25
Balance carried to Balance Sheet (11.64) 126.00
3. Dividend
In view of the losses incurred by the Company, your Directors have not
recommended any dividend for the financial year ended March 31, 2013.
4. Operations
The turnover of the Company at Rs. 3,837 crore has shown a decrease of
4.1 % as compared to Rs. 4,003 crore for the previous year. The loss
before tax is Rs. 193.6 crore (including exceptional item) as compared
to Rs. 318.5 crore for the previous year.
As your Company was growing at CAGR of over 20% during 2002 to 2011, it
had considerably grown its balance sheet, including debt. In the
present phase of economic slowdown, it became difficult to service this
debt and hence it was imperative to restructure the Company''s debt.
Therefore the Company opted for a formal method of loan restructuring
and referred the total debt of around Rs. 3,300 crore along with
working capital fund based and non-fund based limits of Rs. 6800 crore
to the Corporate Debt Restructuring (CDR) Cell under the regulatory
framework of the Reserve Bank of India in March 2012. The financial
restructuring package for your Company was approved by the CDR Cell in
June 2012 and since then the implementation of the package has
commenced.
The salient features of the CDR package are:
- Re-schedulement of Term loan and short term loans so as to be
repayable in 2 years moratorium and 8 years of repayment
- Interest rate has been reduced to 11% per annum yield equalisation
over 10 year tenure
- Funded interest for nine months period from January 2012 to
September 2012
- Additional working capital borrowing as per requirement has been
sanctioned
- Waiver of penal charges from the cut off date to the date of
implementation of the package
The CDR gives your Company critical support to tide over the present
difficult business environment. The decision of the banks to consider
and approve CDR also reflects the faith these institutions have in the
long term business model of the Company.
Your Directors are pleased to inform that during the year under report,
the Company secured the following major contracts.
- Tunnel T48 of Udhampur Srinagar Baramulla New BG railway line, J&K
Contract Value: Rs. 884 crore
- Narmada Extra dosed bridge, Gujarat Contract Value: Rs. 650 crore
- Delhi MRTS Phase III, Janakpuri West to Palam, New Delhi Contract
Value: Rs. 866 crore
- Delhi MRTS Phase III, Shalimar Bagh to Netaji Subhash Place New
Delhi Contract Value: Rs. 373 crore
The total balance value of works on hand as on March 31, 2013 is Rs.
14,935 crore.
Decisions are awaited from various clients for tenders submitted by the
Company (Directly or in JV) for 10 projects amounting to about Rs.
3,558 crore. Tenders for various packages for 19 projects worth about
Rs. 12,883 crore are expected to be submitted in the near future. The
Company has also submitted prequalification bids for 17 projects worth
over Rs. 13,427 crore, which are currently under evaluation. The
Company is confident of securing a sizeable share of these new
projects.
Operations of Subsidiaries
i) Lavasa Corporation Ltd. - Integrated Urban Development & Management
a) Operations
Lavasa has kept its rationale of developing an inclusive city for all
and is tailoring partnerships and tie ups with global leaders. Tie-ups
continued strongly at Lavasa through 2012-13 and many of these projects
are fast moving towards completion.
In the hospitality space, the Accor group is successfully running
Mercure Lavasa and the 1500 plenary capacity Lavasa International
Convention Centre (LICC). Novotel, a new brand from the Accor group -
is scheduled for completion by April 2014. Projects with renowned
hospitality players like Pullman, Hilton, Taj Vivanta, Holiday Inn,
Holiday Inn Express, Oakwood, Langham Place and Eaton among others are
slated to follow in quick succession.
As for the existing hospitality projects, Ekaant - The Retreat and
Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select
Dasve in its fifth year of successful operations will soon open one
more hotel in Lavasa. Dasvino Town & Country Club, launched in early
2010 is growing steadily. In the tourism space, Lakeshore Watersports,
Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also
functioning successfully. Site preparatory work for Space World, Asia''s
first space edutainment centre is well underway and is on course for
opening in 2015. MoU''s have been signed with Tennis Australia and
Manchester City Football Club. Additionally agreements have also been
signed to set up training facilities with Hockey Australia, Sir Nick
Faldo for Golf and Sir Steve Redgrave for a Rowing Academy.
On the retail front, a significant area has already been leased.
Restaurants like Subway, Cafe Coffee Day, Baskin Robin, All American
Diner and others have already commenced operations. In addition to F&B
outlets, many other tie-ups that have been finalized in the retail
segment include The Orange Ox (handicrafts), Cinnamon Crocodile (bath
and spa products), Fun Square Digital Cinema, Smokin Joe''s Pizza,
Adidas Store and Kareems Restaurant.
Lavasa is in advance stage of discussion with iDream to create an all
Lavasa tourism plan including a historical theme park. Significant
progress was also made in the education space. Christel House Lavasa is
into its second year of operations with 269 students and in 2012-13
Phase 2 of Christel House Lavasa was launched.
Ecole Hoteliere Lavasa started its fourth batch in 2013-14. The first
batch will receive academic certification from Ecole hoteliere de
Lausanne this year. Educomp has signed MOU with infinity group of
Kolkata and is proposing to bring Duhrum school of UK as k12 school or
will start millennium international school by 2014-15 in Knowledge
Vistas Limited. GREAT (INDIA) in collaboration with Australian Retail
College, which is a leader in retail training in Australia is planning
to open a retail college at Lavasa. Other educational partners like
Symbiosis Institute (Pune) and Christ University (Bangalore) are also
in the process of launching their programs. Discussions are on to
establish North Hampton University at Lavasa by 2014-15.
Lavasa has continued to enjoy healthy sales in residential and
commercial space. Positive sales trend continued through the year and
possession was given to 250 plus residential units in Dasve. In
institutional sales the prime focus for the year has been on
collections and activation of sites. Symbiosis Institute, State Bank of
India and the proposed Ramada Hotel have submitted their plans for
approval.
For the year ahead a new concept ''built- to-suit'' that offers a
seamless service to institutions right from purchasing land to
executing the project has been conceptualized. On the retail front
revenue collections have seen a phenomenal 56% increase YoY. Endeavor
to boost the work economy at Lavasa will gain momentum in the next
year.
Lavasa has continued its focus on branding and communication activities
in 2012 -13. Emphasis through the year was on communicating that
development work at Lavasa has commenced with right earnest, raise
awareness about the planned city and its advantages.
Through the year over 250 journalists from print, TV, news wires and
web media from Mumbai, Pune and Lavasa region visited Lavasa. A new
advertisement campaign was launched in May 2012 to promote the second
town Mugaon as a residential and edutainment hub. In August 2012 a new
brand campaign capturing different facets of ''Life in Lavasa'' was
launched. The next phase of brand campaign was launched on October 28,
2012. Over a three month period, the series of advertisements
communicated city positioning and scale and also talked about
advantages of Lavasa city.
To promote tourism, the Lavasa Holidays Summer Special (April to June
2012), Mesmerizing Monsoon (July to Sept 2012) and Lavasa Holidays
Festive Fiesta (Oct to Dec 2012) tour packages were conceptualized and
offered to tourists.
On an average close to 80,000 tourists visited Lavasa every month from
July to September 2012. The footfall in August at 94,143 tourists was
the highest ever in Lavasa''s history.
Lavasa won the ''Most promising new Destination'' and the ''Best Print
Promotional Material'' awards at the premiere industry event Travel and
Tourism Fair held in Mumbai and Pune.
Strategic and design support to SPVs was provided on a need basis. The
fifth edition of the signature brand event Lavasa Women''s Drive was
held on February 24, 2013. This year the ''Lavasa Women''s Drive - Women
with a drive awards'' were presented to Dr. Anagha Amte (health care),
Kanan Dhru (governance), Hina Shah (women welfare), Sabbah Haji
(education) and Sakshi Kumar (women''s empowerment). Social worker and
activist, Sindhutai Sapkal was felicitated with a special recognition
award for her exemplary work.
Digital and social media channels were leveraged primarily for
engagement and for information dissemination. The channels were
extensively used to promote events, respond to queries and initiate
conversations on platforms like travel, tourism and discussion forums
on urbanization.
In 2012-13, the Public Relations campaign focused on building
preference and restoring customer confidence in the project. Meetings
with senior editors in Mumbai and Pune and the constant engagement with
beat reporters in Mumbai and Pune led to better appreciation of
Company''s stand on issues. Visits of eminent personalities like Chief
Ministers of Gujarat and Punjab and promotional initiatives of various
SPVs like Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town &
Country Club and X Thrill were publicized through news stories,
editorial feature stories and photo features.
Each month Lavasa looks, feels and acts more like a city. The city of
Lavasa now has a new post office, a new school, a hospital and more
than a dozen food and beverage establishments open for business. It
also has four operating hotels with three more under construction, a
fuel station, two banks, a convention centre, a public safety centre
with a citizen call centre, pharmacy, rental housing, games arcade,
watersports facility, a club, public transport system. Building the
infrastructure right, from the beginning, is a key strategy to ensuring
long-term livability. The drinking water at Lavasa is fit for
consumption, straight from the tap, without the need for additional
filtration and the sewage is treated as per required standards before
being reused for irrigation and other non-potable uses. Lavasa''s power
distribution grid is nearly 99% reliable and the young city is already
on the cutting edge of urban environmental sustainability initiatives.
The e-governance portal will play a major role in communicating with
citizens and providing round the clock services.
A round the clock Lavasa Citizen Call Centre set up this year,
envisions to make the lives of the citizens and visitors easy and
convenient.
Lavasa has completed the purchase of 10423.50 acres of land and is in
the process of concluding the sale deed in 2184 acres for which
agreements were signed. Steps to reach an overall land purchase target
of 18000 acres are in progress.
Lavasa continues to regularly monitor environmental aspects such as air
quality, water quality and soil quality are being carried out as per
MoEF guidelines. For slope protection and enhancing the greenery within
the region, soil bioengineering (biodegradable coir mats have been
applied over the slopes) and plantation of stumps has been done.
Hydroseeding & manual seeding was also carried out for slope
maintenance and a total area of more than 500 acres has been covered to
date. Indigenous Tree plantation of around 47,500 tree saplings was
carried out in Mugaon and Bohini.
Techno-commercial evaluation of renewable sources of energy feasible at
Lavasa is being carried out by TERI (The Energy and Resources
Institute). Sustainable reporting under GRI guidelines is underway.
Lavasa is also undergoing the process for Green Certification of its
development under IGBC (Indian Green Building Council) - Green Township
program.
First Town Dasve is ready with all basic infrastructure, such as access
roads, internal roads, water treatment plant, water distribution
network, sewage network, sewage treatment plant, telecom network and
services is operational. Work of the Commercial Business Park, retail
and hostel building, Novotel Hotel, LEH campus, Phase II of the
Christel House Lavasa and Christ University is progressing well.
Work on the infrastructure for the second town of Mugaon has been
accelerated.
Work on utilities like water, sewer, power, data lines and on the
approach road is in progress. Work on 16 buildings comprising of 462
apartments at Mugaon has commenced using a new technology - Formblock,
and is expected to be completed in next 18 months. Work on another 9
buildings consisting of 268 apartments will be started by May 2013.
Lavasa has also initiated a number of development and empowerment
programs were initiated for the local community by Lavasa. Some of the
key initiatives include provision of treated drinking water to 12
villages in the project area at 65 locations on a daily basis, helping
villages avail benefits of Government drinking water scheme, teacher
training workshops, aptitude tests and counseling for SSC students;
building of school buildings and sanitation blocks at village schools
and starting the Apollo Lavasa Primary Health Centre at Bhoini.
b) Status update on Environment Clearance from Ministry of Environment
and Forests (MoEF)
On November 25, 2010 Ministry of Environment & Forests ("MoEF"), had
issued Show Cause Notice (SCN) to Lavasa, under Section 5 of the
Environment (Protection) Act, 1986 (EP Act) alleging violations of the
Environmental Impact Assessment notifications of 1994 as amended in
2004 and superseded in 2006 ("EIA Notifications") and directed your
Company to show cause within 15 days as to why the alleged unauthorized
structures at Lavasa site be not removed in entirety and pending the
decision by MoEF, it directed Lavasa to maintain status-quo ante for
construction and/or development.
Lavasa replied to MoEF and then filed a Writ Petition (WP) being No.
9448 of 2010 in the Bombay High Court seeking inter alia quashing of
the said SCN. Vide its order dated December 22, 2010, the Hon''ble Court
admitted WP and directed MoEF to visit Lavasa''s project and pass an
order.
The MoEF team visited Lavasa Site and has given hearings. On January
17, 2011 MoEF passed order and observed that Lavasa is in violation of
EIA Notifications. By the said order status quo on construction was
continued. However, MoEF stated that it is prepared to consider the
project on merits.
On January 24, 2011, Lavasa filed another WP being No. 811 of 2011 in
Bombay High Court challenging the aforesaid impugned order dated
January 17, 2011.
Lavasa as per the MoEF''s order submitted various documents to MoEF,
from time to time. In addition, Lavasa submitted applications for grant
of Environment Clearance (EC) for Phase I and Phase II.
Representatives of Lavasa have from time to time attended total five
(5) meetings of the Expert Appraisal Committee (''EAC'') at New Delhi. As
per the Minutes of the 101st meeting held on May 31, 2011, the EAC
recommended the proposal for EC for the 1st Phase (2000 ha) with the
conditions mentioned therein.
On June 10, 2011 MoEF directed to the Government of Maharashtra to
initiate necessary legal action under EP Act against Lavasa.
As the MoEF did not passed the EC order till 30th August, 2011, Lavasa
fled another WP being No. 7276 of 2011 in the Hon''ble Bombay High Court
seeking directions interaliathat (a) it be declared that Lavasa has
been granted / deemed to have been granted EC for Phase I of the
project.
On November 4, 2011, Maharashtra Pollution Control Board (MPCB) fled a
criminal complaint against Lavasa & 14 others before the Chief Judicial
Magistrate (CJM), Pune under the EP Act and thereafter on November 9,
2011, MoEF passed an order and pursuant to same accorded EC to the 1st
phase of Lavasa''s project subject to certain conditions as mentioned
therein.
On November 24, 2011 the CJM passed an order of issuance of process in
the Criminal matter and thereafter from time to time the matter is
adjourned and now the next date is June 21, 2013.
With regards to the Corporate Social Responsibility (CSR) and the
penalty as mentioned in the EC order, Lavasa vide its without prejudice
letters addressed to MoEF requested for exclusion of the K T Ravindran
committee report from the EC order and also requested for the hearing
and informed that there are certain discrepancies and contradictions in
the EC order and requested for reconsidering the condition no (iv) and
also requested for withdrawal of the same.
Lavasa fled Appeal being no. 36 of 2011, u/s 16(h) of the NGT Act
against The Union of India, MoEF & Anr, before the National Green
Tribunal (NGT) at Delhi, challenging part of the EC order more
particularly about the Prof. K T Ravindran Committee Report and the
conditions imposed by it. The Tribunal has passed order "Notice before
Admission''.''The matter has thereafter from time to time come up on
board now the next date is May 14,2013.
One Mr. Dyneshwar Shegde has fled Appeal (being No. 9 of 2012) before
NGT challenging the EC order. Lavasa and the other respective Parties
in the matter have fled their respective affidavits in reply. Further,
to support Lavasa''s project, Mose Khore Nagrik Vikas Sangh and
Sarpanch, Mugoan have fled Intervention Applications in the Appeal
since villagers have benefited under Lavasa''s project.
On October 05, 2012 Lavasa fled Transfer Petition being (C) No. 1326 of
2012 before Hon''ble Supreme Court for transfer of Appeal of Dyaneshwar
Shedge and be heard along with Civil Appeal No.6025 of 2012 titled M/s
Scania Steel & Power Ltd v/s Jan Chetna & Ors for determination of the
question of "Person Aggrieved"
In the Transfer Petition, the Hon''ble Supreme Court has stayed the
proceeding of Dyaneshwar Shedge Appeal before NGT and issued notice in
the matter. The matter is currently pending.
With regards to the WP''s fled by Lavasa in the Hon''ble Bombay High
Court and the other PILs fled against your Company, the matters were
listed on the board from time to time but the judges recused to hear
the matter. But on August 29, 2012 one of the PIL being (L) 90 of 2010
fled by Ms. Suniti S R & Ors was on board before Registrar (OS) /
Prothonotary & Senior Master for rejection of Petition since the
objections had not been removed by the Petitioners and for
jurisdiction. The Registrar passed conditional order directing
Petitioners to remove objections within 4 weeks and transferred the PIL
to the Appellate side. Thereafter on 7th November, 2012 the PIL (L) 90
of 2010 was transferred to the Appellate side of Hon''ble Bombay High
Court and its'' now numbered as PIL (ST) No 31736 of 2012.
With regards to the compliance of the EC order, Lavasa is complying the
same and from time to time is informing to the MoEF
ii) HCC Real Estate Ltd.
HREL, a wholly owned subsidiary of your Company is into building
residential & office complexes in real estate sector.
Commercial Projects under execution by HREL and its subsidiaries :
- Lavasa Corporation Ltd. (Lavasa)
Construction work at Lavasa is progressing well. Lavasa has started
handing over the possessions of villa and apartments to Customers in
Dasve Village. Construction at Mugaon, Lavasa''s second town, has also
commenced during the year. The response from buyers for sale of
apartments in Mugaon is positive. Also, the City Management of Lavasa
is moving in the direction of e-governance in future.
The current developments in Lavasa are detailed out in Management
Discussion and Analysis Report.
- Other Projects
Other projects of HCC Real Estate Ltd and its subsidiaries are
progressing well as explained in Management Discussion and Analysis
Report.
- New Real Estate Projects under bidding
During the year, HREL has made serious efforts in obtaining real estate
projects on joint development basis. It has also acquired the bid
documents for development of integrated township at Atali Kaladara near
Bharuch in Gujarat for PCPIR and is negotiating on certain projects in
Bhutan.
iii) HCC Infrastructure
HCC Infrastructure Company Ltd, a wholly owned subsidiary of your
Company, has grown its portfolio to about Rs.7,000 crore, which
includes seven National Highways Authority of India (NHAI) road
concessions.
The Company, through its subsidiaries HCC Concessions and HCC Power,
has a development focus in the roads, water and power sectors.
Your Company has developed a strong team, which follows a stringent
investment discipline to create value for its shareholder. The
expertise of the management team extends from concept innovation and
evaluation of risk & return, to construction management and operations.
Along with a focus on quality and timely execution, the Company is
committed to provide reliable, safe and world class operations and
maintenance services to the country''s end users.
Current Road Portfolio:
Your directors are pleased to inform you that during the course of the
year, HCC Concessions was awarded the Narmada Bridge Project (NH8) in
the state of Gujarat by the National Highways Authority of India in
April 2012.
The three operational projects Nirmal Annuity,
Delhi Faridabad Elevated Expressway and Dhule Palesner Highway have
been operational for more than three, two and one year respectively and
are running smoothly. The three under construction highway projects in
West Bengal (NH34) have achieved significant progress and the two
larger projects amongst the three are expected to be operational later
this year.
During the year, HCC Concessions submitted 3 NHAI bids and 16 Request
for Qualification (RFQs). HCC Concessions partnered with other
infrastructure players for certain large bids to diversify risk and
increase competitiveness. The current year has witnessed a slowdown in
the awards of new projects. NHAI has awarded only about 750km compared
to about 6,500km last year. The Company will continue to bid for NHAI
projects in the next financial year while also evaluating state road
opportunities.
Status of Operational Assets:
Dhule Palesner Highway Project (NH3)
The project road is part of NH3, commonly referred to as the
Mumbai-Agra road, originating from Mumbai and ending at Agra. It is a
primary conduit for transportation of passengers as well as freight
traffic from the state of Uttar Pradesh to major towns in the states of
Madhya Pradesh and Maharashtra. In FY09, NHAI awarded the development
of four lane highway from Km 168.500 to Km 265.000 on the
Maharashtra/MP border to an HCC led (60%) consortium on a BOT (toll)
basis. The concession period is 18 years, including a construction
period of 30 months.
The project was operational on Feb 11, 2012, four months ahead of
schedule, showcasing our execution expertise.
The project is being operated by an in-house operations and maintenance
team. The remaining concession period is about 15 years. The highway
has been developed in partnership with Sadbhav Engineering Ltd and John
Laing Investments Ltd (UK) with an investment of Rs. 1,420 crore.
Delhi Faridabad Elevated Expressway (NH2) (dfskywayÂ)
The Delhi Faridabad Elevated Expressway or dfskyway is a six lane
4.4 km elevated highway connecting Delhi and Haryana at Badarpur. This
award winning engineering marvel developed by HCC Concessions Ltd with
an investment of nearly Rs.600 crore boasts 20 exits, 10 underpasses
and is the first of its kind spaghetti structure in India. HCC
Concessions was awarded a 20 year concession in 2008 to develop,
construct and operate this asset by the National Highways Authority of
India (NHAI). The dfskyway contributes significantly to Delhi''s
rapidly expanding infrastructure by reducing travel time by over 40
minutes through an extremely congested corridor, that benefits
residents and inter-state traffic alike. It is one of Delhi''s major
radial roads and caters to very high traffic volume of over 100,000
vehicles per day. HCC Concessions'' parent, Hindustan Construction
Company (HCC), has designed, engineered and constructed the dfskywayÂ
The Delhi-Faridabad Elevated Expressway was formally inaugurated on
November 29, 2010 significantly ahead of its scheduled completion date,
by the Chief Ministers of both Delhi and Haryana, along with the
Minister of Road Transport & Highways. The asset has been awarded the
Best Project Award by Construction Industry Development Council 2011
and the Infrastructure Excellence Award 2011 by CNBC TV18.
Nirmal Annuity (NH7)
The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000)
on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the
development of four-laning of this 33 km long stretch on a BOT basis
under the Annuity scheme to HCC. The concession period for the project
is 20 years, including a construction period of 24 months. The project
was developed with an investment by HCC of Rs. 315 crore This project
became operational in July 2009, 100 days ahead of the scheduled
completion date. The debt at Nirmal has since been refinanced through a
structured bond at 9.38% fixed rate of interest for 17 year tenure.
The SPV has received timely annuity payments over the last year and the
operations and maintenance are being managed efficiently by our in
house team.
Status of Assets under Development:
West Bengal (NH34) Highway Project
This project being developed by HCC Concessions Ltd on a Design,
Finance, Build, Operate and Transfer (DFBOT) basis, is the largest PPP
highway model in West Bengal (WB). The project road is the major
North-South artery (N-34) which originates at the capital and port city
of Kolkata, and ends at Dalkhola in the state of WB, covering a total
distance of 443.5 km. It is the spine of the transport system in the
region and provides nearest access to ports (Kolkata and Haldia) for
the north eastern states of India and neighbouring Bhutan and Nepal.
The development of this stretch will improve connectivity to the
East-West Corridor, which has already been four-laned. West Bengal is
strategically located to play a pivotal and catalytic role in promoting
economic cooperation in the sub region (Bangladesh, Bhutan, North
Eastern states and West Bengal).
The highway development is divided into three contiguous sections
covers Baharampore and Farakka (103 km), Farakka and Raiganj (103 km) &
Raiganj and Dalkhola (50 km). The concession lengths for the different
segments totaling 256 km range from 25 to 30 years, including a
construction period of 30 months and an investment of over Rs.3,200
crore. The Company has achieved significant progress in the two larger
sections and is expecting to start operations later this year.
WB is the fourth most populous state in the country and is the sixth
largest contributor to India''s GDP The traffic on NH34 comprises of 90%
commercial traffic, carrying a diversified mix of manufacturing goods,
building materials, steel, jute, food grains and tea.
Baharampore Farakka Highway
The construction work has progressed significantly in the last year on
this stretch of 103 km. The Company expects to start operation later
this year.
This stretch originates at Baharampore, about 190 km from Kolkata and
terminates at Farakka. Baharampore, Nabagram, Farakka and Jangipur are
the major passenger traffic generators for this stretch. The
four-laning of two projects between Kolkata and Baharampore will
further increase the throughput and improve traffic on this stretch.
The concession period is 25 years, including a construction period of
30 months. The project is being implemented with an investment of
Rs.1,169 crore.
Farakka Raiganj Highway
The construction work has progressed significantly in the last year on
this stretch of 103 km. The Company expects to start operation later
this year.
This is a 103 km stretch originating at Farakka and terminating at
Raiganj. Malda, Farakka and Gajol are the major passenger traffic
generators for this stretch. The Malda industrial region is expected to
lead the growth in this region. The concession period is 30 years,
including a construction period of 30 months. The project is being
implemented with an investment of Rs.1,378 crore.
Raiganj Dalkhola Highway
The progress on this stretch has been slow compared to the other two
stretches due to certain execution challenges. This is a 50km stretch
which comprises of 3 bypasses. Dalkhola, Raiganj and Islampur are the
major passenger traffic generators for this stretch.
This is a 50 km stretch starting at Raiganj and terminating at the town
of Dalkhola. The concession period is 30 years and includes a
construction period of 30 months. The project is being implemented with
an investment of Rs.684 crore.
iv) Steiner AG,Switzerland
Your Company holds through its wholly owned HCC Mauritius Enterprises
Ltd. a controlling equity stake of 66% in Steiner AG. Steiner AG is a
leading general contracting Company in Switzerland, specialized in
turnkey development of new buildings and refurbishments, and offers
services in all facets of real estate development and construction.
Steiner AG had a consolidated revenue of Rs. 4368.2 crore and a
consolidated profit of Rs. 47.3 crore in the financial year 2012-13.
After two years of construction Steiner AG completed the project
Andreaspark G3, a large apartment building in one of Zurich''s fastest
growing residential areas. With a height of 42 meters the building
offers 90 new apartments.
In March 2010 the Company handed over the new premises to the
International Union for Conservation of Nature in Gland, which is a
perfect example for the new era of eco-building techniques. This year,
the Company achieved a milestone with this work, as it was awarded the
first ever LEED Platinum certificate by the Green Building Council
Environment Design in Switzerland. In Glattpark, one of Switzerland''s
biggest residential and commercial development areas, Steiner AG is
building the project Lindbergh- Allee. The property lies close to
Zurich International Airport and will offer around 30''000 sqm of office
and living space.
In the business year 2012-13 Steiner AG signed many important
contracts. At year end, the order backlog of Steiner AG was CHF 1,210
million compared to CHF 1,512 million as of March 31, 2012. Steiner AG
has also secured projects worth more than CHF 200 million in this year
which are yet to be signed.
The Board of Directors of Steiner AG comprises six members. Your
Company is represented by four nominees: Mr. Ajit Gulabchand, who also
acts as Chairman, Mr. K.G. Tendulkar, Mr. Anil Singhvi and Dr. Peter
Huggler.
v) Highbar Technologies Ltd
Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is
an Information Technology Company formed by your Company, with the
vision of providing end-to-end IT solutions to Infrastructure industry.
Despite tough economic conditions, Highbar won 14 new customers in the
financial year against stiff competition by established large IT
players to take the total tally of its customers to 64. Long list of
reference customers and high quantum of repeat business indicates
maturity and scalability of Highbar''s delivery capabilities.
Highbar''s Dubai subsidiary, Highbar Technologies FZ-LLC is now fully
operational and has secured Highbar''s largest contract till date with
Oman based Company and also won customer in Saudi Arabia.
Highbar Technologies has taken strategic alliance with SAP to next
level with ''GOLD Partnership'' and is preferred partner of SAP for
infrastructure industry.
Infrastructure industry is going beyond ERP to new business critical IT
systems. Highbar has been at forefront of this with solutions like
maximum number of SAP BOBJ (business intelligence & dashboard) and SAP
CRM (customer relationship management) implementations for
Infrastructure industry, business process consolidation (BPC) and
employee portal (ESS). The Company launched new solutions - Highbar
RapidStart and Highbar RapidStart Analytics. These solutions are based
on the templatised approach for ERP and Business Intelligence
respectively and are Intellectual Property (IP) assets for Highbar
Technologies.
Highbar Technologies has established a proper scalable organization
structure with all the functions in place to facilitate and sustain
future growth.
Highbar Technologies is on the course towards accomplishing its vision
of being ''the most preferred end to end IT solution provider'' for
infrastructure industry.
5. Subsidiary Companies
At the beginning of the year, the Company had 72
Subsidiary Companies.
During the year under review, the following changes have taken place.
a) HCC Infrastructure Co. Ltd (the wholly owned subsidiary Company) has
promoted the following wholly owned subsidiary Company, making it a
subsidiary of your Company from the date of its incorporation.
Name of the Company Date of Incorporation
HCC Operations & 07.11.2012
Maintenance Ltd
b) HCC Concessions Ltd (a subsidiary Company) has promoted the
following wholly owned subsidiary Company, making it a subsidiary of
your Company from the date of its incorporation.
Name of the Company Date of Incorporation
Narmada Bridge Tollway 18.06.2012
Ltd
(c) During the year under review w.e.f 18.02.2013, Lavasa Corporation
Ltd, a subsidiary Company of your Company has acquired remaining 74%
stake (previously 26% stake) in Verzon Hospitality Ltd, making it a
subsidiary of your Company from the date of acquisition of the said
stake.
d) HCC Singapore Enterprises Pte. Ltd has ceased to be your subsidiary
w.e.f 11th April 2012.
In terms of the General Circular No. 2/2011 dated February 8, 2011 read
together with General Circular No. 3/2011 dated February 21, 2011,
issued by the Government of India - Ministry of Corporate Affairs under
Section 212(8) of the Companies Act, 1956, granting general exemption
to companies from attaching financial statements of subsidiaries,
subject to fulfillment of conditions stated in the circular, copies of
the Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Auditors Report of the subsidiary companies for the
year/period ended December 31, 2012/March 31, 2013 are not attached to
the Balance Sheet of the Company as the Company has/shall fulfill the
following conditions:
(i) The Board of Directors of the Company has vide resolution dated May
3, 2013 consented for not attaching the balance sheet(s) of the
concerned subsidiary (ies);
(ii) The Company has presented in its Annual Report, the consolidated
financial statements of holding Company and all of its subsidiaries
duly audited by its statutory auditors;
(iii) The Consolidated financial statement has been prepared in strict
compliance with applicable Accounting Standards and where applicable,
Listing Agreement as prescribed by the Securities and Exchange Board of
India;
(iv) The Company has disclosed in the consolidated balance sheet the
following formation in aggregate for each subsidiary including
subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets
(d) total liabilities (e) details of investment (except in case of
investment in subsidiaries) (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation (j) proposed dividend,
as applicable;
(v) The annual accounts and other related detailed information of the
following subsidiaries shall be made available to shareholders of the
holding Company and subsidiary companies seeking such information at
any point of time:
1. Hincon Technoconsult Ltd
2. Western Securities Ltd
3. Pune-Paud Toll Road Company Ltd
4. Nirmal BOT Ltd
5. Panchkutir Developers Ltd
6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
7 HCC Infrastructure Company Ltd
8. HCC Aviation Ltd
9. Badarpur Faridabad Tollway Ltd
10. Baharampore - Farakka Highways Ltd
11. Farakka - Raiganj Highways Ltd
12. Raiganj - Dalkhola Highways Ltd
13. Dhule Palesner Operations & Maintenance Ltd
14. HCC Power Ltd
15. HCC Operations & Maintenance Ltd
16. Narmada Bridge Tollway Ltd
17. HCC Construction Ltd
18. Highbar Technologies Ltd
19. Highbar Technologies FZ LLC
20. HCC Mauritius Enterprises Ltd
21. Klemanor Investments Ltd
22. Steiner AG (Formerly known as Karl Steiner AG)
23. Steiner Promotions et Participations SA
24. VM ST AG
25. Eurohotel SA
26. Steiner (Germany) GmbH
27. Steiner Leman SAS
28. SNC Valleiry Route De Bloux
29. Steiner India Ltd
30. HCC Real Estate Ltd
31. HRL Township Developers Ltd
32. HRL (Thane) Real Estate Ltd
33. Nashik Township Developers Ltd
34. Maan Township Developers Ltd
35. Charosa Wineries Ltd
36. Powai Real Estate Developers Ltd
37. HCC Realty Ltd
38. Lavasa Corporation Ltd
39. Lavasa Hotel Ltd
40. Apollo Lavasa Health Corporation Ltd
41. Lakeshore Watersports Company Ltd
42. Dasve Convention Centre Ltd
43. Dasve Business Hotel Ltd
44. Dasve Hospitality Institutes Ltd
45. Lakeview Clubs Ltd
46. Dasve Retail Ltd
47. Full Spectrum Adventure Ltd
48. Spotless Laundry Services Ltd
49. Lavasa Bamboocrafts Ltd
50. Green Hill Residences Ltd
51. My City Technology Ltd
52. Reasonable Housing Ltd
53. Future City Multiservices SEZ Ltd (Formerly known as Minfur
Interior Technologies Ltd)
54. Rhapsody Commercial Space Ltd
55. Valley View Entertainment Ltd
56. Andromeda Hotels Ltd
57. Sirrah Palace Hotels Ltd
58. Warasgaon Tourism Ltd
59. Our Home Service Apartments Ltd
60. Warasgaon Power Supply Ltd
61. Sahyadri City Management Ltd
62. Hill City Service Apartments Ltd
63. Kart Racers Ltd
64. Warasgaon Infrastructure Providers Ltd
65. Nature Lovers Retail Ltd
66. Osprey Hospitality Ltd
67. Starlit Resort Ltd
68. Warasgaon Valley Hotels Ltd
69. Rosebay Hotels Ltd
70. Mugaon Luxury Hotels Ltd
71. Warasgaon Assets Maintenance Ltd
72. Hill View Parking Services Ltd
73. Whistling Thrush Facilities Services Ltd
74. Verzon Hospitality Ltd
(vi) Further, the annual accounts of the subsidiary companies shall
also be kept for inspection by any shareholder at the head
office/registered office of the Company and of the subsidiary companies
concerned and the Company shall furnish a hard copy of the details of
accounts of subsidiaries to any shareholder on demand;
(vii) The holding as well as subsidiary companies in question shall
regularly file such data to the various regulatory and Government
authorities as may be required by them;
(viii) The Company has given Indian rupee equivalent of the figures
given in foreign currency appearing in the accounts of the subsidiary
companies along with the exchange rate as on closing day of the
financial year;
6. Share Capital
During the year under review, your Company''s Authorised Share Capital
has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore)
comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000
Redeemable Cumulative Preference Shares of Rs. 10/- each.
During the year under review, your Company''s paid up equity share
capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty
Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising
60,66,10,420 Equity Shares of Rs. 1/- each.
7. Public Deposits and Loans/Advances
Your Company has not accepted any deposits from the public, or its
employees during the year under review.
Pursuant to Clause 32 of the Listing Agreement, the particulars of
loans/advances given to subsidiaries have been disclosed in the Annual
Accounts of the Company.
8. Employee Stock Option Scheme (ESOP)
As on March 31, 2013, 61,54,080 stock options are outstanding
(comprising vested and unvested, after adjustment for lapsed and
exercised options), in aggregate, for exercise as per the exercise
schedule and are exercisable at a price of Rs. 52.03 per stock option.
Each option, when exercised, as per the exercise schedule, would
entitle the holder to subscribe for one equity share of the Company of
face value Rs. 1 each.
During the year under review, 18,36,310 options got vested to the
employees of the Company and in aggregate, 67,01,040 options stands
vested with the employees as on March 31, 2013.
The particulars with regard to the Employee Stock Options as on March
31, 2013 as required to be disclosed pursuant to the provisions of
Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I
to this Report.
9. Status of GDSs
During the financial year 2005-06, the Company had issued Global
Depository Shares (GDSs) and the underlying shares against each of the
GDSs were issued in the name of the Depository, Citi Bank N.A.
As on March 31, 2013, 1,20,720 GDSs have remained outstanding which
forms part of the existing paid up capital of the Company.
10. Consolidated Financial Statements
The Consolidated Financial Statements of the Company prepared in
accordance with applicable Accounting Standards forms a part of this
Annual Report.
11. Corporate Governance
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate Chapter on Corporate Governance practices followed by the
Company together with a Certificate from the Company''s Auditors
confirming compliance forms part of this Report.
12. Directors
In accordance with Article 186A of the Articles of Association of the
Company, the Board of Directors of your Company, at their meeting held
on March 28, 2013, has re-appointed Mr. Ajit Gulabchand as Managing
Director, designated as Chairman & Managing Director of the Company for
a period of 5 years with effect from April 1, 2013, subject to the
approval of the Shareholders of the Company at the ensuing Annual
General Meeting.
In accordance with Article 135 and Article 186A of the Articles of
Association of the Company, on May 3, 2013, the Board of Directors of
your Company appointed Mr. Rajgopal Nogja as Additional Director and
Whole-time Director of the Company designated as Group Chief Operating
Officer & Whole-time Director for a period of 5 years subject to the
approval of Shareholders of the Company at the ensuing Annual General
Meeting.
The Company has received Notice under Section 257 of the Companies Act,
1956 from a member signifying his intention to propose Mr. Rajgopal
Nogja as a candidate for the office of Director at the ensuing Annual
General Meeting.
As per the provisions of the Companies Act, 1956 read with Article 152
of the Articles of Association of the Company, Mr. Y. H. Malegam, Mr.
K. G. Tendulkar and Mr. Anil C. Singhvi are the Directors of the
Company who are due to retire by rotation. Mr. K. G. Tendulkar and Mr.
Anil C. Singhvi being eligible, offer themselves for re-appointment.
Mr. Y H. Malegam has expressed his intention not to seek re-appointment
as a Director of the Company.
The Board of Directors records its appreciation & recognition of the
valuable contribution and services rendered by Mr. Y. H. Malegam during
his long association for the last four decades as a Director of your
Company.
The Company has received Form DD-A from all these Directors as required
under the Companies (Disqualification of Directors under Section 274
(1) (g) of the Companies Act, 1956) Rules, 2003.
Profile of all these Directors has been given in the Report on the
Corporate Governance as well as in the Notice of the ensuing Annual
General Meeting of the Company.
13. Directors'' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
b) the selected accounting policies were applied consistently and the
Directors 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, 2013 and of the loss of the Company for the
year ended on that date.
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act,1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d) the annual accounts have been prepared on a going concern basis.
14. Industrial Relations
The industrial relations continued to be generally peaceful and
cordial.
15. Transfer to Investor Education and Protection Fund (IEPF)
The Company has, during the year under review, transferred a sum of Rs.
8,19,180 to Investor Education and Protection Fund, in compliance with
the provisions of Section 205C of the Companies Act, 1956. The said
amount represents dividend for the year 2004-05 which remained
unclaimed by the shareholders of the Company for a period exceeding 7
years from its due date of payment.
16. Particulars of Employees and other additional information.
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules made there under is given in the Annexure to this
Report and forms part of the Report. However, in terms of Section
219(1) (b)(iv) of the Companies Act, 1956, the Report and Accounts are
being sent to the shareholders excluding the aforesaid Annexure. Any
Shareholder interested in obtaining copy of the same may write to the
Company Secretary at the Registered Office of the Company.
17. Conservation of Energy,Technology Absorption and Foreign Exchange
Earnings and Outgo.
The information relating to the conservation of energy, technology
absorption and foreign exchange earnings and outgo as required to be
disclosed under the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, is given in Annexure II forming
part of this Report.
18. Auditors
M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the
Company, bearing ICAI Registration No. 100186W retire at the ensuing
Annual General Meeting and are eligible for re-appointment.
As required under the provisions of section 224(1B) of the Companies
Act, 1956, the Company has obtained a written certificate from the
Auditors to the effect that their re-appointment, if made, would be in
conformity with the limits specified in the said section.
19. Auditors'' Report
The Auditors'' Report to the shareholders on the Accounts of the Company
for the financial year ended March 31, 2013 does not contain any
qualification.
20. Acknowledgements
Your Directors would like to acknowledge and place on record their
sincere appreciation to all stakeholders - Clients, Financial
Institutions, Banks, Central and State Governments, the Company''s
valued investors and all other business partners for their continued
co-operation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of
all the employees of the Company and their continued contribution to
its progress.
For and on behalf of Board of Directors,
AJITGULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House, 11th Floor,
247Park, Lal Bahadur Shastri Marg
Vikhroli (West)
Mumbai 400 083
Place: Mumbai
Date: May 3, 2013
Mar 31, 2012
To The Members of Hindustan Construction Co. Ltd.
1. Report
The Directors are pleased to present the 86th Annual Report together
with the Audited Accounts for the year ended March 31, 2012.
2. Financial Highlights
Particulars Year ended Year ended
March 31, 2012 March 31, 2011
crore crore
Turnover 4002.75 4143.97
Profit before
Interest,
Depreciation,
Exceptional 439.80 540.89
Items and Tax
Less: Interest 543.16 329.04
Depreciation 162.10 152.69
Exceptional Items 166.32 871.58 - 481.73
Add: Other Income 122.83 43.91
Add/Less: Exchange
Gain/(Loss) (9.53) 8.60
Profit/(Loss) before
Tax (318.48) 111.67
Less: Deferred Tax
Charge/(Credit) (96.23) 40.67
Profit/(Loss) after
Tax (222.25) 71.00
Add: Balance brought
forward
from last year 347.83 319.62
Transfer from Debenture
Redemption 16.67 4.16
Reserve
Amount available for
Appropriation 142.25 394.78
Less: Appropriations
Dividend - 24.26
Tax on Dividend - 3.94
Debenture Redemption
Reserve 16.25 8.75
Transfer to
General Reserve 16.25 10.00 46.95
Balance carried to
Balance Sheet 126.00 347.83
3. Dividend
In view of the losses incurred by the Company, your Directors have not
recommended any dividend for the financial year ended March 31, 2012.
4. Operations
The turnover of the Company at Rs 4003 crore has shown a decrease of
3.4% as compared to Rs 4144 crore for the previous year. The loss before
tax is Rs 318.5 crore (including exceptional item of Rs 166.32 crore) as
compared to a profit of Rs 111.7 crore for the previous year.
The lower turnover and operating margins in an environment of high
interest costs has put severe pressure on the Company's profitability.
Non payments of awarded claims in arbitrations added to the liquidity
problem and debt servicing ability and increased interest costs
further. The Company approached lender Bankers with a refinancing
proposal for bilateral refinancing of the loans with larger tenure.
However consensus among Bankers could not be reached. Consequently,
the Company approached the leading bankers and they have referred their
total debt to the Company of around Rs 3300 crore to the Corporate Debt
Restructuring (CDR) Cell. The CDR Empowered Group has formally admitted
the proposal for restructuring on March 29, 2012 by a super majority of
lenders.
Under the regulatory frame work of the Reserve Bank of India (RBI), the
CDR forum caters to an official platform for both the creditors and
borrowers to amicably and collectively evolve policies for working out
debt restructuring plans. The broad contours of this restructuring
exercise involves restructuring of debt in terms of payback period,
deferring certain interests on term loans, concessional rate of
interest and provision of further need based working capital and loans
for capex. This debt restructuring will provide the Company with
breathing space to work on improving operational margins and securing a
larger order book to improve turnover in future years. Apart from
focusing on cost cutting measures and cost effective execution, the
Company will also focus on sale of non-core assets to improve its
balance sheet position.
Your Directors are pleased to inform that during the year under review,
the Company has secured the following major contracts.
- Limbdi Branch Canal Project, Gujarat Contract Value: Rs 299 crore
- Tehri Pumped Storage Project, Uttarakhand Contract Value: Rs 1843
crore
- Superstructure of Bogibeel Rail-cum-Road Bridge, Assam Contract
Value: Rs 987 crore
- Swarnim Gujarat Saurashtra-Kutch Water Grid Programme. Package NC 31,
Gujarat Contract Value: Rs 289 crore
- Single Line Tunnel No. 10 between Jiribam and Tupul, Manipur Contract
Value: Rs 162 crore The total balance value of works on hand as on March
31, 2012 is Rs 15,336 crore.
Decisions are awaited from various clients for tenders submitted by the
Company (directly or in JV) for 15 projects amounting to about Rs 7,745
crore. Tenders for various packages for 32 projects worth about Rs
27,485 crore are expected to be submitted in the near future. The
Company has also submitted prequalification bids for 12 projects worth
over Rs 7,588 crore, which are currently under evaluation. The Company
is confident of securing a sizeable share of these new projects.
Operations of Subsidiaries
(i) Lavasa Corporation Ltd. - Integrated Urban Development & Management
a) Operations
Lavasa is a planned hill city being developed by Lavasa Corporation
Ltd., a subsidiary Company. Located in the western region of India,
the city is an hour drive from Pune and three hours drive from Mumbai.
It is one fifth the size of Greater Mumbai Municipal limits.
The master plan of Lavasa is developed by internationally renowned
design consultant HOK, USA. The master plan, recipient of many
international awards, is based on the principles of New Urbanism that
brings together all the components essential to daily life in a more
organized manner. Lavasa has many pioneering initiatives to its credit
- technology leadership, e-Governance, city developed using
Geographical Information System (GIS), etc.
Lavasa is planned for a permanent population of around 3 lakh residents
and a tourist inflow that is envisaged at 20 lakh per annum. It aims to
provide a perfect work-life balance with an unique combination of
technology and infrastructure advancements. The city will have a 365
day economy with a host of non polluting industries being the main
economic driver which includes R&D and training centers, IT and biotech
industry, KPOs and those related to art, fashion and animation.
In terms of awards and accolades, the thought leadership platform
Lavasa Future Cities won the Silver Medal at the Olive Crown Awards for
creative excellence in 'Green' communication.
This award recognizes pioneering work in communicating sustainability
and has been instituted by the Indian chapter of the International
Advertising Association (IAA) with Knowledge Partner TERI (The Energy
Resource Institute). The Limca Book of Records also acknowledged the
Lavasa Women's Drive 2011 (and 2010) as 'India's Biggest All-Women Car
Drive'.
On the hospitality front, the hospitality units which are already
operational are: Lavasa International Convention Centre managed by
ACCOR, Mercure Lavasa, Fortune Select Dasve, Ekaant - The Retreat,
Dasvino Town and Country Club and Waterfront Shaw Serviced Apartments.
Other than this, Radisson, ITC Luxury Collection, Choice Hotel, J.
Vohra Hospitality, Novotel by Accor, Pullamn by Accor, Hilton, Ramada,
Oakwood, Two Langham properties, Holiday Inn, Days Inn Hotel are
already tied up and many more are to follow in quick succession giving
Lavasa a new hotel property every 6 months.
An equal amount of progress has been made in the education space.
'Christel House School, Lavasa' entered into its second year of
operations with 209 students. After the success of the first year, in
the year 2011-12, the phase - II of 'Christel House Lavasa' was
launched. 'Ecole Hotelier Lavasa' started its third batch and received
academic certification from Ecole hoteliere de Lausanne to conduct the
Masters Programmers and for offering and conducting degrees from IGNOU.
Next on the agenda this year, is Lavasa Masonries International School
powered by Educomp.Other than this, Ryan International for performing
arts, Birla Edutech (by Yash Birla) IB school, Gems International IB
school, Management Institute by Bodhi Education, Euro Kids with a
primary and pre-primary school, The Institute of International Business
Relations Germany, NSHM Knowledge Campus of Kolkata, Symbiosis-Pune and
Christ University-Bangalore are also tied up for setting up their
campuses.
Professional and Executive Education has also taken off in Lavasa in a
big way with Car Design Workshop by Chris Bangle (Scoular Polytechnic
di Design) the world renowned school of design and communication based
in Milan, Security Awareness Workshop by Max Security (Israeli Security
experts) and Massachusetts Institute of Technology who have conducted
their pilot program based on Airport and Airline Systems, Planning and
Management. This has prepared a platform for them to conduct similar
programmers at Lavasa in the future.
On the retail front, American Diner, Granma's Bakery, Brew berry's
Cafe Memories, Baskin & Robbins Kiosk, Tabatha, Oriental Octopus, Amul
Dairy, Chor Bizarre, Subway, Hungry hippo, Crazy Koala Kiosk, Twisted
Turkey Kiosk, Fruity bat, Pizzavala, Natural Ice Cream, Bizarre
Barracuda, Design & Build Store - Home Town are already operational.
Positive sales trend continued throughout the year, with the Company
giving possession to 150 residential units in Dasve. Residential sales
of the first town Dasve have almost been completed. There have also
been many enquiries for further residential units in Lavasa. Sales for
the second town Muggon was launched on the occasion of Gudi Padwa in
March 2012. Almost 75% of the inventory has been sold out within just a
fortnight of the launch. It is also heartening to know that there has
been less than 1% cancellation requests from customers inspire of the
Ministry of Environment and Forest (MoEF) status quo.
The current database of enquiries for the purchase of apartments and
villas exceeded almost eighty thousand which indicates a healthy
demand.
Institutional sales and commercial tie ups have also made progress with
a number of MoUs being signed. Land sale has been made to State Bank of
India who plan to set up a retail bank and a training centre cum guest
house at Dasve. Development of an integrated Corporate Training Centre
with a residential component at Mugaon is also being planned by a
consortium led by the Giria Investment Corporation, Bengaluru.
The Art of Living centre is also slated to open at Mugaon. Sales are
also fast picking up in our commercial office spaces ventures - 247
Business Square and 247 Business Avenue at Lavasa.
These are just initial steps towards a 365 day - 247 economy that
Lavasa is planning to accomplish. In the next year, the target is for
many such industries including IT&ITES, Biotechnology, Knowledge Parks,
R&D centers and Corporate Training centers to enable permanent
residents to move in.
On the tourism front, X-Thrill adventure academy, Water Sports, Noes
park (games Arcade), Nature trail, Train on wheels, Kids play Area,
movies, parks & gardens are already operational. Other than this, Space
theme park (edutainment), Tennis Australia, Manchester City Football
Club are also already tied up.
Lavasa is also tying up with I Dream to create all Lavasa tourism plan
including a Historical theme park. This project is being spearheaded by
Mr. Shirpal Morakhia, businessman who created Share khan. Lavasa is
also tying up with Engage Plus, a New Zealand Company, for adventure
sports activities, to give adventure experience at Dave and nearby
areas.
Events continued to be a key focal point and the
year saw a multitude of events that increased the salience of the brand
and helped engage with the consumer on-ground. The fourth edition of
the signature brand event Lavasa Women's Drive was held on February 26,
2012. The event which captures multiple aspects - fun, adventure and
spirit of the Indian woman combined with her passion for social causes
was flagged off from Mumbai and Pune. This year, Lavasa Women's Drive
also launched the 'Women in the Driving Seat' awards where women
achievers who had made an impact and created a benchmark were applauded
in various fields. These included Vidya Balan (Cinema), Dr. Swati
Piramal (Corporate),
Dr. Firuza Parekh (Healthcare), EktaKapoor (Television), Tina Tahiliani
(Fashion), Shaheen Mistry (Education), Abha Narain Lambah (Community
Development), Neela Satyanarayan (Administration) and Devieka Bhojwani
(Cancer Awareness).
Lavasa was the destination partner for the Pantaloons Famine Miss India
(PFMI) pageant for the fourth year in succession. Residential sales of
the second town at Muggon was launched in the presence of the PFMI
finalists. On this occasion, handover of possession of the residences
built at the first town Dasve to the 100th and 101st apartment owner
has also been accomplished.
Lavasa has collaborated with technology leaders like Wipro Limited and
Cisco Systems to plan, implement and manage Information and
Communication Technology (ICT) services across Lavasa Hill City. The
strategic partnership is intended to focus on providing integrated and
effective solutions for enhancing technology leadership within the hill
city. The Company founded as a result of this venture is named as 'My
City Technology Limited'. This venture is currently deploying a
futuristic telecom network infrastructure to offer its residents and
visitors a life changing technology experience.
Lavasa now has a new post office, police station, a public safety
centre, citizen call centre, a hospital managed by Apollo, banks (Union
Bank of India, State Bank of India), a petrol station, pharmacy,
STP WTP rental housing, an arcade and transit system. In the months
ahead it will open grocery and additional retail shops.
The city's drinking water is fit for consumption straight from the tap
without the need for filtration; its sewerage is treated to almost
drinking water standards before being reused for irrigation and other
non-potable purposes; its power distribution grid is nearly 99%
reliable and the young city is already on the cutting edge of urban
environmental sustainability initiatives. The Company plans to have its
e-Governance portal and a citizen call centre to maintain its focus on
the needs of residents and visitors, and it has already opened parks
and play areas to the public.
Lavasa continued its focus on branding and communication activities
through 2011-12.
Importantly,Lavasa was granted Environmental Clearance by the Ministry
of Environment & Forests (MoEF) for the first phase of 2000 hectares
(Ha) in November 2011. A large scale PR exercise across media, i.e.,
print, TV and online was undertaken welcoming the news. Social Media
and the Lavasa website disseminate related information and for
addressing queries as a part of the exercise. Media engagement and
relationship building exercise continued throughout the pre- clearance
to post-clearance period. A new brand campaign 'At Work" was released
in 2012. This was to reassure the general public at large that
developmental work has begun at Lavasa.
Lavasa City Guide - a one - stop source on all information on Lavasa
and a new 3D walkthrough film - 'Muggon - A Virtual Tour' was created.
A new property 'Lavasa Holidays', to promote tourism at Lavasa was
launched. An engagement program called Brand Conversations was
conceptualized which will comprise of informal conversations with the
employees across the various departments on how brand principles should
be applied to day-to- day functioning.
Digital and social media was being extensively used for information
dissemination and creating conversations on a number of platforms on
the web including travel, tourism and urban management portals. These
engagement initiatives saw an increase in the fan base of the Lavasa
Community page on Face book to almost 90,000 fans.
b) Status update on Environment Clearance from Ministry of Environment
and Forests (MoEF)
On November 25, 2010, Ministry of Environment & Forests ("MoEF"),
Government of India issued show cause notice under Section 5 of the
Environment Protection Act, 1986 to Lavasa Corporation Limited ("LCL')
alleging violations of the Environmental Impact Assessment
notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA
Notifications"). The said notice directed LCL to show cause within 15
days of the receipt of the said notice as to why the alleged
unauthorized structures at Lavasa site be not removed in entirety and
pending the decision on show cause notice by MoEF, it directed LCL to
maintain status-quo ante for construction and/or development.
LCL has filed Writ Petition No. 9448 of 2010 against the impugned show
cause notice in the Bombay High Court seeking inter alia, quashing of
the said show cause notice and stay on status quo pending the decision
on the Writ Petition. On December 7, 2010, the Counsel for MoEF made a
statement in the Bombay High Court that the words "status quo ante" in
the MoEF's show cause notice dated November 25, 2010 may be read as
"status quo" as the word "ante" is a mistake. Further, vide its order
dated December 22, 2010, the Hon'ble Court while admitting the Writ
Petition directed MoEF and Central and/or State level Environment
Impact Assessment Authority to visit LCLs project at Lavasa and inspect
it thoroughly for at least three days to undertake the survey /
inspection and pass an order by January 10, 2011. In the same order
dated December 22, 2010, the Hon'ble High Court clubbed together 4
public interest litigations filed against LCL ('other PILs') inter alia
in respect of lease of land by Maharashtra Krishna Valley Development
Corporation to LCL, alleged violations by LCL of the Maharashtra
Agricultural Lands (Ceiling on Holdings) Act, 1961 and the Environment
(Protection) Act, 1986.
The members of MoEF committee along with officials of Government of
Maharashtra visited Lavasa site on 5th, 6th and 7th of January, 2011.
Vide its order dated January 17, 2011, MoEF observed that LCL is in
violation of EIA Notifications and the construction activity undertaken
thereon is unauthorized, in violation of the above notifications and is
environmentally damaging. However, taking into account the submissions
made by LCL, employment generated, investments already made and third
party rights already accrued, MoEF stated that it is prepared to
consider the project on merits with terms and conditions.
On January 24, 2011, LCL filed another Writ Petition being No. 811 of
2011 in Bombay High Court challenging the aforesaid impugned order
dated January 17, 2011 passed by MoEF
On January 27, 2011, Writ Petition no. 811 of 2011 and Writ Petition
no. 9448 of 2010 along with other PILs were listed in Hon'ble High
Court. However, the Hon'ble High Court, upon LCLs plea was pleased to
adjourn the matters for 45 days in view of the ongoing discussions with
MoEF on amicable settlement and posted all LCL connected matters on
March 10, 2011.
LCL on February 7, 2011 submitted a "without prejudice" application to
MoEF for Environment Clearance (EC) and submitted various documents to
MoEF, from time to time, for its consideration.
LCL attended & presented at the 97th & 98th meeting of the Expert
Appraisal Committee ('EAC') on CRZ, Infrastructure & Miscellaneous
Projects and New Construction and Industrial Estates Projects scheduled
on 14th & 15th February, 2011 & 3th & 4th March, 2011 respectively at
New Delhi and submitted various supporting documents and also made oral
representation.
The minutes of the 98th meeting of EAC held on 3rd & 4th March, 2011 at
New Delhi inter alia state that, the EAC recommends that in view of the
investments made by the third parties, infrastructure already created
in the Dasve village and taking note of the reported hardships
highlighted repeatedly by LCL of the construction workers, pending
construction work of 257 residential buildings, which are above plinth
level, may be allowed subject to certain conditions such as (i) no hill
cutting, digging, excavation, etc, (ii) the above constructions shall
only be limited to the area for which permission was granted by the
Collector, Pune, (iii) a high level Verification and Monitoring
Committee shall be constituted,
(iv) commitment from LCL to earmark necessary / adequate funds as per
report to be submitted shortly regarding the quantum of penalty/ re-
compense and creation of Environmental Restoration Fund and (v) other
conditions as stipulated by MoEF / other State agencies of State
Government shall also be complied with.
In view of the above stipulations, the Committee recommended to MoEF to
permit LCL to complete 257 units subject to the acceptance of the five
conditions listed above and also subject to submission of information /
documents as per the above observations.
Further EAC also stated that consideration of the proposal would depend
on submission of the requisite information as detailed above.
On March 30, 2011, LCL filed an application to withdraw the Writ
Petition no. 811 of 2011 and Writ Petition no. 9448 of 2010 with a
liberty to file a fresh one as and when need arises. On hearing all the
parties including PIL litigants, the Hon'ble High Court suggested that
in order to take care of the apprehensions of the PIL litigants, LCLs
counsel and MoEF counsel should make a statement that status quo order
dated January 17, 2011 passed by MoEF should continue to operate till
show cause notice is decided by MoEF LCL was of the view that its writ
petitions should not be withdrawn with such an adverse order and hence
decided not to withdraw its writ petitions and matter was then
adjourned to June 15, 2011.
On April 6, 2011 LCL attended the 99th meeting of EAC and made
presentation before members of EAC and replied to the queries raised by
the EAC in relation to the vacation of status quo on the construction
work in area admeasuring 681.27 hectares, pending consideration of its
1st phase Environment Clearance (EC) of 2000 Hectares. As per the
Minutes of the 99th Meeting of EAC, EAC decided that proposal of the
Company for 681.27 hectares be deferred and be considered along with
the whole proposal of 2000 hectares.
LCL vide its letter dated April 30, 2011 submitted para wise reply to
the points raised by the EAC in its 99th Meeting & requested to grant
EC to 681.27 Hectares.
On April 12, 2011, LCL as per the directions of the EAC, submitted
revised Environment Impact Assessment report and baseline data / maps
etc. The 100th meeting of the EAC took place on May 12, 2011. LCL made
presentation in relation to the queries raised in the previous meeting
with respect to the application for EC for 1st Phase (2000 hectares).
On May 21, 2011, LCL submitted para wise reply to the points raised in
the EAC's 100th meeting dated May 12, 2011.
On May 31, 2011 the senior officials of LCL along with consultants
attended the 101st meeting of EAC and made presentation in relation to
the queries raised in the previous meeting. As per the Minutes of the
101st meeting the EAC recommended the proposal for Environment
Clearance for the 1st Phase (2000 hectares) with the conditions
mentioned therein.
On June 10, 2011 MoEF directed to the Government of Maharashtra to
initiate necessary legal action under Environment (Protection), Act
1986 against LCL.
On June 15, 2011 LCLs Writ Petition No. 811 of 2011 and Writ Petition
No. 9448 of 2010, were listed on board in the Bombay High Court. The
MoEF filed an Affidavit in the Company's Writ Petitions stating that
ministry has accepted the recommendations of EAC subject to
preconditions. The learned Additional Solicitor General appearing for
MoEF stated that the MoEF will be passing an order within a reasonable
time. The matter was then adjourned to July 12, 2011.
On June 27, 2011 MoEF, Government of India addressed a letter to LCL
thereby enclosing the Minutes of the 101st Meeting held on May 31, 2011
and also informed the five pre-conditions. It further requested LCL to
submit all the documents as per the pre-conditions. The five
pre-conditions, reproduced verbatim, are:-
i) The constructions / development carried out till now are in
violation of Environment
(Protection), Act 1986. The violation has to be dealt as per OM No.
No.J-11013/41/2006-IA.
II (I) dated November 16, 2010. As per 4(ii) of the above OM, LCL shall
submit a written commitment within 90 days, in the form of a formal
resolution from Board of Directors of the Company for consideration of
its environment related policy / plan of action to the Ministry to
ensure that violation of the Environment (Protection), Act etc. shall
not be repeated.
ii) The scale and intensity of development of the hill town shall be as
per Hill Station Regulations and shall be revised based on developable
/ buildable area. A clear demarcation of "no development / construction
zone / area" shall be identified comprising of (a) all water bodies (b)
forest lands / forest like lands and (c) areas steeper than 1:3. The
developable / buildable areas shall be verified through State
Government / Director Town Planning and the calculation of FSI shall be
made accordingly. No development shall be taken up in areas steeper
than or equal to 1:3.
iii) The FSI calculation shall be worked out separately based on the
land uses and shall not be averaged for the calculation of FSI.
iv) At least 5 % of the total cost of the project shall be earmarked
towards the Corporate Social Responsibility (CSR) and item-wise details
alongwith time bound action plan shall be prepared and submitted to the
Ministry's Regional Office at Bhopal. Implementation of such program
shall be ensured accordingly in a time bound manner.
v) LCL shall submit an undertaking / commitment to earmark necessary /
adequate funds as per report to be submitted shortly regarding the
quantum of penalty / re-compose and creation of Environment Restoration
Fund.
On July 12, 2011 LCL sent an e-mail and a letter to the Director, MoEF,
requesting for hearing on the pre-conditions mentioned in the letter
dated June 27, 2011 as the same were unreasonable.
On July 27, 2011 LCL vide its letter submitted to MoEF its case in
respect of the pre-conditions and also requested that the case of LCL
may be processed further for appropriate decision without waiting for
the date of hearing which was scheduled for August 5, 2011.
Further, on August 5, 2011 the officials of LCL appeared before the
panel and made written submission along with the Board Resolution in
respect of the pre-conditions as stated in MoEF's letter dated June 27,
2011. Thus, LCL complied with the pre-conditions as stated by MoEF.
Considering the delay by MoEF in issuing EC, LCL filed another Writ
Petition on August 30, 2011 in the Hon'ble Bombay High Court seeking
directions interlaid that (a) it be declared that LCL has been granted
/ deemed to have been granted environmental clearance for Phase I of
the project or in the alternative (b) the Hon'ble Court be pleased to
issue a writ of mandamus or a writ in the nature of mandamus or any
other appropriate writ, order or direction commanding the MoEF, to
grant environmental clearance to Phase I.
On September 5, 2011 LCLs Writ Petitions along with other PILs were
listed on board. The counsel for MoEF submitted that they will pass
final order by September 23, 2011.
On September 23, 2011 all related matters were listed on board. After
hearing the parties, Hon'ble High Court granted three weeks time as
prayed for by the Ld Additional Solicitor General appearing for MoEF
for passing the final order. The Hon'ble High Court made clear that
this three weeks time is granted by way of a last chance for passing
final order. The matters were adjourned to October 18, 2011.
On October 13, 2011, MoEF passed an order thereby communicating that
"As the pre-conditions on the credible action on violation of EIA
Notification 2006 has not been complied with, the Ministry is unable to
issue the EC to the 1st phase of Hill City project (2000 hectares) of
Lavasa. The final decision on the EC cannot be taken till all the
pre-conditions are met including credible action by the State
Government of Maharashtra and subject to final orders of the Hon'ble
High Court of Bombay as the matter is sub-judice"
On October 20, 2011 all LCL matters were listed on board of Hon'ble
Bombay High Court. LCLs Counsel also pointed out that time and again
the MoEF has sought for adjournments but failed to pass the final order
and the inaction on the part of MoEF in not passing final order would
virtually amount to misleading the Court. The Ld. Special Counsel for
the State made statement that the State Government will initiate
necessary action in accordance with the law, against LCL within two
weeks. Thereafter MoEF Counsel made a statement that MoEF will pass
final order within one week thereafter. In view of the statements made
by the respective counsels for State Government and MoEF, the Hon'ble
court gave three weeks time to MoEF to pass final order as prayed for
and observed that this three weeks time shall not be extended in any
circumstances. The matters were adjourned to November 16, 2011.
On November 4, 2011, Maharashtra Pollution Control Board (MPCB) filed a
criminal complaint against LCL & 14 Others before the Chief Judicial
Magistrate, Pune under Section 15 and 16 of the Environment Protection
Act, 1986 (EP Act) for alleged violations of the EP Act read with EIA
Notification 2006.
On November 9, 2011, MoEF passed an order and pursuant to the same
accorded Environment Clearance to the 1st phase of the LCL project
subject to certain conditions as mentioned therein.
On November 16, 2011 all LCL matters were listed on board. MoEF filed
its affidavit in reply to LCL Writ Petition no. 7276 of 2011. Matters
were adjourned to December 12, 2011.
On November 17, 2011 LCL submitted certain documents to The Deputy
Director (I.A), in compliance of Condition No. ii Part A - Specific
Conditions, Construction Phase.
On November 24, 2011 the Chief Judicial Magistrate, Pune passed an
order of issuance of process in the Criminal matter and the matter was
then adjourned to January 30, 2012.
On December 6, 2011 LCL vide its without prejudice letter addressed to
The Advisor, I A Division of MoEF requested for exclusion of the K T
Ravindran committee report from the EC order dated November 9, 2011 and
also requested for a hearing. On December 7, 2011 LCL vide its without
prejudice letter addressed to The Advisor, I A Division of MoEF,
informed that there are certain discrepancies and contradictions in the
EC dated November 9, 2011 and requested for reconsidering the
pre-condition no (iv) and also requested to withdraw the same. LCL also
addressed a letter to The Advisor, I A Division of MoEF, and requested
to furnish papers i.e. Terms of Reference (TOR) of Prof K T Ravindran
Committee, interim report dated March 7, 2011 presented by expert
committee to MoEF, notings made by each of the members of the K T
Ravindran committee, etc.
On December 9, 2011 LCL filed Appeal being no. 36 of 2011, u/s 16(h)
of the National Green Tribunal Act against The Union of India, MoEF &
Anr, before the National Green Tribunal (NGT) at Delhi, for challenging
part of the EC order dated November 9, 2011 more particularly about the
Prof. K T Ravindran Committee Report and the conditions imposed by it.
On December 12, 2011 all LCL matters along with other connected matters
were listed on board before Hon'ble Bombay High Court. The matters were
adjourned to January 31, 2012.
On January 10, 2012 LCLs Appeal No. 36 of 2011 filed before NGT was on
board and the Tribunal was pleased to pass order "Notice before
Admission" and the matter was adjourned to February 17, 2012.
On January 30, 2012 Criminal Complaint filed by MPCB was on board of
Chief Judicial Magistrate, Pune and the same was adjourned to March 17,
2012.
On January 31, 2012 all LCL matters along with other connected matters
were listed on board before Hon'ble Bombay High Court, Division Bench
of Justice Bobde & Justice Dhanuka. The Bench recsued to hear the LCL
matters.
On February 6, 2012 one of the villager Shri Dyneshwar Shegde filed
Appeal (being No. 9 of 2012) before Hon'ble National Green Tribunal
challenging the EC order dated November 9, 2011 passed by MoEF in
favour of LCL.
On February 17, 2012 NGT Appeal filed by LCL was listed on board of
Hon'ble Tribunal at Pune and the same was adjourned to April 16, 2012.
On February 21, 2012 all LCL matters along with other connected matters
(except PIL (L) 90 of 2010 & WP 2737 of 2011) were listed on board
before Hon'ble Bombay High Court Division Bench of Justice Khanvilkar &
Justice N Jamdar. The Bench recsued to hear LCL matters as Justice
Jamdar had appeared for MoEF
On February 22, 2012 Shri Dynes war Sedge's Appeal was on board
before Hon'ble NGT, Delhi. LCL intervened in the matter & opposed the
application for condo nation of delay filed by the Appellant. The
matter was adjourned to March 20, 2012.
On March 17, 2012 Criminal Complaint filed by MPCB was on board before
Chief Judicial Magistrate, Pune and the same was adjourned to April 20,
2012.
On March 20, 2012 Shri Dynes war Sedge's Appeal was on board before
Hon'ble NGT, Delhi. LCL filed its affidavit in reply opposing the
application for condo nation of delay filed by the Appellant. The
matter was adjourned to April12, 2012.
On April 12, 2012 Shri Dynes war Sedge's Appeal was on board before
Hon'ble NGT New Delhi. Submissions were made by the parties on the
application for condo nation of delay in which the parties apprised the
NGT on the facts of the appeal. Advocate for Dynes war Shedge prayed
for time to file rejoinder. The Hon'ble NGT directed him to file
rejoinder before April 18, 2012. The matter was adjourned to April 24,
2012.
On April 16, 2012 NGT Appeal filed by LCL was listed on board of
Hon'ble NGT at New Delhi. The Hon'ble NGT directed MoEF and MPCB to
file their affidavits before July 2, 2012. The matter was adjourned to
July 19, 2012.
On April 20, 2012 Criminal Complaint filed by MPCB was on board before
Chief Judicial Magistrate, Pune and the same was adjourned to May 14,
2012.
On April 24, 2012 Dyneshwar Shegde's Appeal was on board before Hon'ble
NGT, New Delhi. The Advocate for Appellant filed rejoinder. Arguments
by all the parties got concluded. The Hon'ble NGT has reserved the
Order. No further date is fixed.
ii) HCC Real Estate Ltd.
HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company,
has inherent skills and resources to develop and deliver high-value
real-estate projects that helps in building sustained communities
across India. The focus is to develop 'state-of-the-art' projects which
would provide world class quality, engineering and technology and
create a unique value proposition for the customers.
Project Management Services
With successful and timely completion of 247Park, the Project
Management department of the Company was entrusted with the
responsibility of providing Project Management Consultancy (PMC) for
various projects for our associate companies such as Charosa Wineries
Ltd., Panchkutir Developers Ltd. The scope of the work included project
management, health-safety and environment management.
After completing these projects, the project management team is hopeful
of getting some projects from external clients. In the present trying
circumstances, income from the project management consultancy business
is expected to add to the revenue of the Company by utilizing the
technical skills available within the Company.
Projects under execution
1. 247Park Phase II
The Company has initiated the regulatory process for obtaining the
approval for development of commercial office building with approx.
400,000 sq ft of saleable area and approx. 800,000 sq ft total
construction area. The project is based on the "Public- Parking
Policy," finalized by Municipal Corporation of Greater Mumbai (MCGM)
for which the Company has submitted the application. The Company has
received preliminary approvals from Jt. Commissioner- Traffic for 520
car parks on the basis of extensive traffic surveys conducted by
traffic consultants. Subsequently the architects, structural engineers
and traffic consultants have prepared the reports for submission to the
Parking committee constituted by MCGM which has approved location and
detailed building drawings of the scheme after extensive reviews. The
Company has also commenced work on acquiring various other NOC's
including from Fire Department of MCGM.
During the year, the project team has conducted prequalification
exercise for the civil and other contractors for the construction. The
Company envisages completion of the construction of the project by
2014.
The marketing and sales department of the Company has submitted Request
for Proposals (RFP) for built-to-suit (BTS) commercial office space
requirement and the Company is hopeful of receiving good response
riding on the success of 247Park Phase I.
2. Urban Renewal (Slum Re-development Project), Poway
MOU-cum-Development Agreement and Power of Attorney were executed by
land owner in favor of the SPV, Panchkutir Developers Ltd , a
subsidiary of HCC for 12 acres of land. Due to non performance by the
land owner of the various obligations under the MOU-cum-Development
Agreement inspire of repeated reminders, we have been advised by our
solicitor to invoke the Arbitration clause forming part of the MOU-
cum-Development Agreement. Accordingly, Arbitration proceedings have
been initiated and we have obtained interim orders.
3. Urban Renewal (Slum Re-development Project), Vikhroli (E)
Out of the total land holding of around 32 acres by the Panchkutir
Developers Ltd. in Vikhroli (E), the survey of tenements on Phase-I of
14.5 acres of land to ascertain the development potential of the free
sale component is completed. Out of the 1960 slum residents, consent of
about 1400 residents representing more than 70% has already been
obtained and the process for forming the society is in progress. Out of
the proposal submitted to Slum Redevelopment Authority (SRA) for
Phase-I of about 2000 slums, Annexure II has been displayed for 750
tenants of 4 Societies & for the balance the work is in progress. Slum
declaration of Phase-I land is challenged which has been set aside by
the Special Slum Tribunal. Subsequently the litigant filed Writ
Petition challenging the above said Order of the Slum Tribunal in High
court. Hearings from both the sides are completed and the judgment is
awaited.
4. Integrated Township Development, Thane
HRL (Thane) Real Estate Ltd. a subsidiary of HREL initiated the
acquisition of land at Ghod bunder Road, Thane for Integrated Township
Development. Till date the Development Agreement and Power of Attorney
for 32 acres have been executed in favour of the Company. The Company
continued its activity of securing its position for land title and
other documentation.
5. Integrated Township Development ,Pune near Hinjewadi IT Park
(Phase1)
Maan Township Developers Ltd, a subsidiary of HREL has acquired approx.
28 acres of land and the Development Agreement and Power of Attorney
have been executed in favour of Company. The Company continued its
activity of securing its position for land title and other
documentation.
6. Integrated Township Development Land, Wadiwarhe, Nashik
Nashik Township Developers Ltd a subsidiary of HREL has acquired 62
acres of land for which Development Agreement and Power of Attorney
have been executed in favour of Company. The Company is exploring sale
option as well as various development options with education service
providers in view of improved connectivity to the region.
7 Water Front City at Cholera ,Gujarat
HCC signed MOU with Government of Gujarat for setting up of proposed
Water Front City covering 4000 acres and Renewable Energy Park covering
1500 acres at Cholera SIR with total proposed investment of Rs 52,000
crore. The Company finalized the "Vision Statement," for development of
"Water Front City" after discussion and meetings with Gujarat
Government Officials and Ministers. The Company is exploring joint
development opportunities with Samsung C & T Corporation and other
reputed developers. Concept Development Report on proposed City has
been submitted to Gujarat Infrastructure Development Board (GIDB).
Proposal of allotment of 1900 acres of land in Bavliyari Village has
been received from Govt. of Gujarat. Letter requesting land in Zone 1
(TP1) & Zone 2 (TP2) closer to Ahmedabad & payment terms has been sent
to Dholera Special Investment Regional Development Authority (DSIRDA).
The discussion on the subject is in progress.
8. Charosa Wineries Limited, Dindori, Nashik
Till date purchase of total 211 acres of land has been completed.
Purchase of another 27 acres of land is in progress as on date. Total
land area under cultivation is 81 acres. During the year, the Company
signed a PMC agreement with the Project Management Team of HREL for
providing project management, health-safety and environment management.
Construction of Winery Building is at an advanced stage. The Company
has received approval to procure land under Section 63-1A of Bombay
Tenancy and Agricultural Lands Act (BTAL) for Wine Tourism Project. The
Company has also been accredited under "Mahabhraman" scheme of
Maharashtra Tourism Development Corporation (MTDC) to operate tour
packages within the state of Maharashtra. Further the Company has
obtained registration from MTDC as a service provider for tourism.
Internationally renowned Master Planners and Architects, HOK have done
master planning for setting up wine tourism project consisting of
tourist resorts, cellar-doors, wine bars, restaurant, theme park,
adventure sports, amphitheater, Wine spa etc. Harvesting and crushing
of nearly 200 MT grapes has been completed during the year. During the
year Company fully repaid the loan taken from the bankers.
(iii) HCC Infrastructure
HCC Infrastructure Company Ltd, a wholly owned subsidiary of your
Company, has in its Rs 5,500 crore portfolio, six National Highways
Authority of India (NHAI) road concessions.
The Company, through its subsidiaries HCC Concessions and HCC Power,
has a development focus primarily in the roads, water and power
sectors. Your Company follows a disciplined investment strategy that
maximizes shareholder value by generating stable and rapidly growing
streams of cash flow over concession periods ranging from 15 to 30
years. Besides obtaining a construction edge provided by HCC's E&C
division, HCC Infrastructure has developed a strong management team
whose expertise extends from concept innovation and evaluation of risk
& return, to construction management and operations. Along with a focus
on quality and timely execution, the Company is committed to provide
reliable, safe and world class operations and maintenance services to
the country's end users.
Fund Raising Initiative:
Your directors are pleased to inform you that in September 2011, HCC
Infrastructure Co. Ltd, wholly owned subsidiary Company raised Rs 240
crore by diluting 14.5% equity stake in HCC Concessions to the Xander
Group at an equity valuation of Rs 1,650 crore. This equity placement
was completed during challenging market conditions and showcases both
the quality of the HCC Infrastructure's portfolio and the conviction in
their management team. The Xander Group Inc. is a global investment
firm focused on the infrastructure, hospitality, retail and real estate
sectors. Since 2005, the firm has committed over US$1.8 billion of
equity capital to the Indian market across five dedicated India funds.
Your Company remains committed to capital raising at attractive
valuations to meet its equity requirements for future growth.
Current Road Portfolio:
Your directors are pleased to inform you that during the course of the
year, the Company successfully achieved the provisional completion of
Dhulia Pilsner Highway project and started toll collection on February
11, 2012, four months ahead of schedule. This is the third such
consecutive early completion, showcasing our project management and
construction expertise. Toll collection is significantly ahead of
estimates and is expected to grow strongly.
The three highway projects in West Bengal (NH34) are under construction
and traffic growth on the road over the past two years has
significantly exceeded expectations.
During the year, HCC Concessions submitted 9 NHAI bids and 28 Request
for Qualification (RFQs). HCC Concessions partnered with VINCI
Concessions for certain large bids to diversify risk and increase
competitiveness. While your Company was unsuccessful in procuring a new
project this year, it maintained its investment discipline while
observing that several competitors were aggressively obtaining projects
at detrimental or unsustainable values. The Company will continue to
bid for NHAI projects in the next financial year, where approx. 8,000
km of roads is expected to be awarded. Your Company is also evaluating
state road opportunities.
Status of Operational Assets:
Dhule Palesner Highway Project (NH3)
The project started user fee collection in February 2012, four months
ahead of schedule. In FY09, NHAI awarded the development of four lane
highway from Km 168.500 to Km 265.000 on the Maharashtra/MP border to
the consortium led by HCC Concessions on BOT (toll) basis.
The project road (89 km) starts at Dhulia in Maharashtra and ends at
Pilsner on the border of Maharashtra and MP on National Highway 3.
The project is being operated by an in-house operations and maintenance
team. The concession period is 18 years, including a construction
period of 30 months. The highway is being developed in partnership with
Sadbhav Engineering Ltd and John Laing Investments Ltd (UK) with an
investment of Rs 1,420 crore.
Delhi Faridabad Elevated Expressway (NH2) (dfskywayÃ)
The dfskywayà started user fee collection in November 2010. This
project was also completed ahead of schedule. The project road is a 4.4
km elevated highway connecting Delhi and Faridabad, Haryana and serves
inter-state and local traffic. With immediate connectivity for
Faridabad to the heart of Delhi due to dfskywayÃ, one expects much
higher growth for Faridabad, which has recently been cited as the 8th
fastest developing city by The City Mayors Foundation, UK.
The project has remaining concession period of approximately 17 years.
HCC was awarded a 20- year concession in 2008 to design, construct and
operate this asset by the NHAI.
Nirmal (NBL) Annuity (NH7)
The SPV has received timely annuity payments over the last year and the
operations and maintenance are being managed efficiently by our in
house team.
The project stretch extends from the Maharashtra- Andhra Pradesh Border
to Armur in Andhra Pradesh, which forms a part of the Nagpur- Hyderabad
section of NH7 This is the sole Annuity project in our portfolio. This
33 km project was completed about 100 days ahead of scheduled
completion. The remaining concession period for the project is 15.5
years. The project was developed by HCC with an investment of Rs 315
crore.
Status of Assets under Development:
West Bengal (NH34) Highway Project
This highway project includes three contiguous sections (256 km) on
National Highway 34, starting from Baharampore and ending at Dalkhola.
The construction of this highway project is underway and your Company
has achieved considerable progress over the last year. Though NHAI has
found the land acquisition process along the project stretch
challenging and final completion is likely to be delayed by a few
months due to this, we expect that the project would start tolling by
originally scheduled completion date (on 75% completion). The project
is being solely developed by HCC with an investment of Rs 3,232 crore.
Baharampore Farakka Highway
This section, awarded in FY10, is a 103 km stretch originating at
Baharampore and terminating at Farakka. The concession period is 25
years, including a construction period of 30 months. The project is
being implemented with an investment of Rs 1,169 crore.
Farakka Raiganj Highway
This is a 103 km stretch originating at Farakka and terminating at
Raiganj. The concession period is 30 years, including a construction
period of 30 months. The project is being implemented with an
investment of Rs 1,378 crore.
Raiganj Dalkhola Highway
This is a 50 km stretch starting at Raiganj and terminating at the town
of Dalkhola. The concession period is 30 years and includes a
construction period of 30 months. The project is being implemented with
an investment of Rs 684 crore.
(iv) Steiner AG, Switzerland
Your Company holds through its wholly owned HCC Mauritius Enterprises
Ltd. a controlling equity stake of 66% in Steiner AG (formerly Karl
Steiner AG). Steiner AG is a leading general contracting Company in
Switzerland, specialized in turnkey development of new buildings and
refurbishments, and offers services in all facets of real estate
development and construction.
Steiner AG had a consolidated revenue of Rs 3996.2 crore and a
consolidated profit before tax of Rs 20.8 crore in the period from April
1, 2011 to March 31, 2012.
After three years of construction, Steiner AG completed the Prime
Tower, Switzerland's highest building (126 meters high), in
collaboration with a partner. With 36 floors, usable surface of 40,000
sqm and space for 2,000 work places, the Prime Tower is a landmark for
the whole region.
In the business year 2011-12 Steiner AG signed many important
contracts, which include the project Neue Schanzenpost/Postmark in
Berne, a total services contract of around CHF 160 million with Swiss
Post as client, a general contract for the project Mohr ales When in
Zurich, consisting of 13 apartment buildings and a range of office
spaces and business premises, for a total volume of around CHF 145
million and a total services contract for project Lindbergh in Zurich,
a large- scale building for mixed use with Credit Suisse as investor
with a total volume of around CHF 100 million.
At year end, the order backlog of Steiner AG was CHF 1512 million
compared to CHF 1018 million as of March 31, 2011. Steiner AG has also
secured projects worth CHF 135 million which are yet to be signed.
By the end of July 2011, Steiner AG relocated into its new
headquarters, which is located in Andréa spark Business Centre in
Zurich and was developed and realized by Steiner AG. Steiner AG also
changed its corporate name from "Karl Steiner AG (Karl Steiner SA)
(Karl Steiner Ltd)" to "Steiner AG (Steiner SA) (Steiner Ltd)". The new
name became official with the relocation of Steiner AG to its new
headquarters.
To help achieve your Company's goal of extending its footprint in
India's growing residential and commercial construction market, Steiner
AG incorporated a wholly owned subsidiary in Mumbai under the name of
Steiner India Limited. The new entity will undertake construction of
real estate projects in India.
The board of directors of Steiner AG comprises five members. Your
Company is represented by three nominees: Mr. Ajit Gulabchand, who also
acts as Chairman, Mr. K.G. Tendulkar and Mr. Anil Singhvi.
v) Highbar Technologies Ltd
Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is
an Information Technology Company formed by your Company, with the
vision of providing end-to-end IT solutions to Infrastructure industry.
Highbar Technologies' core team comprises of IT and Infrastructure
professionals who have amalgamated the legacy of domain knowledge in
the infrastructure business with Information technology. Highbar
focuses on IT implementation initiatives from business transformation
perspective rather than technology implementation perspective.
This year, Gartner- one of the world's most renowned IT research
agency, has published case study on managing successful IT spin-off
with Highbar as an example. After a long time they could locate a
successful spin-off worth writing case study on it. Industry experts
have recognised it as 'Asia's 1st IT Company for Infrastructure
industry' and have shown faith in its capabilities as against big
established IT players.
In the last financial year, Highbar Technologies was able to serve 10
new customers, taking the total tally of its customers to 50. Long list
of reference customers and high quantum of repeat business indicates
maturity of Highbar's delivery capabilities.
In order to serve Infrastructure industry in Middle East more
effectively, Highbar Technologies Ltd, has incorporated a subsidiary in
Dubai, named 'Highbar Technologies FZ-LLC' which is now fully
operational and has bagged customers in Middle East.
IT adoption in Infrastructure industry has gathered pace. Highbar sees
the business going places and will expand beyond India and Middle East.
This year the Company has developed a very strong strategic alliance
with SAP who considers Highbar as a preferred partner for
infrastructure industry. The Company launched new solutions - Highbar
Rapid Start and Highbar Cloud Connect- which provide preconfigured SAP
ERP solutions on-premise and on-cloud respectively. These solutions are
based on the templates approach and are Intellectual Property (IP)
assets for Highbar Technologies. Highbar Technologies has strategically
entered into a tie-up with SAP to launch Highbar Cloud Connect, which
offers 1st of its kind SAP ERP solution for infrastructure, real estate
and ready mix concrete industry on pay-per-user-per-month basis. This
has provided SMEs a level playing field by getting access to
world-class IT solutions and industry best practices in an investment
friendly model. The cloud based offerings have helped Highbar
Technologies to penetrate the industry further to next level by
reaching to the masses.
Highbar also successfully implemented first comprehensive SAP CRM
implementation for Indian construction industry which won SAP ACE
Award. Highbar continues to compete consistently with the big names in
IT industry. It has created niche for itself in the market with a
firmly established grounds. It has started contributing to the industry
to grow 'IT for infrastructure market'.
Highbar Technologies has established a proper scalable organization
structure with all the functions in place to facilitate and sustain
future growth.
Highbar Technologies is on the course towards accomplishing its vision
of being 'the most preferred end to end IT solution provider' for
infrastructure industry.
5. Subsidiary Companies
At the beginning of the year, the Company had 67 Subsidiary Companies.
During the year under review, the following changes have taken place.
a) HCC Infrastructure Co. Ltd (the wholly owned subsidiary Company) has
promoted the following wholly owned subsidiary Company, making it a
subsidiary of your Company from the date of its incorporation.
Name of the Company Date of Incorporation
Dhule Palesner Operations & 18.05.2011
Maintenance Limited
HCC Power Limited 03.06.2011
b) Steiner AG (a subsidiary Company) has promoted the following wholly
owned subsidiary Company, making it a subsidiary of your Company from
the date of its incorporation.
Name of the Company Date of Incorporation
Steiner India Limited 17.08.2011
(c) Lavasa Corporation Limited (a subsidiary Company) has promoted the
following companies making them subsidiaries of your Company from the
day of their incorporation.
Name of the Company Date of Incorporation
Warasgaon Assets 24.06.2011
Maintenance Limited
Hill View Parking Services 24.06.2011
Limited
In terms of the General Circular No. 2/2011 dated February 8, 2011 read
together with General Circular No. 3/2011 dated February 21, 2011,
issued by the Government of India - Ministry of Corporate Affairs under
Section 212(8) of the Companies Act, 1956, granting general exemption
to companies from attaching financial statements of subsidiaries,
subject to fulfillment of conditions stated in the circular, copies of
the Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Auditors Report of the subsidiary companies for the
year/period ended December 31, 2011/March 31, 2012 are not attached to
the Balance Sheet of the Company as the Company has/shall fulfill the
following conditions:
(i) The Board of Directors of the Company has vide resolution dated
April 27, 2012 consented for not attaching the balance sheet(s) of the
concerned subsidiary(ies);
(ii) The Company has presented in its Annual Report, the consolidated
financial statements of holding Company and all of its subsidiaries
duly audited by its statutory auditors;
(iii) The Consolidated financial statement has been prepared in strict
compliance with applicable Accounting Standards and where applicable,
Listing Agreement as prescribed by the Securities and Exchange Board of
India;
(iv) The Company has disclosed in the consolidated balance sheet the
following formation in aggregate for each subsidiary including
subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets
(d) total liabilities (e) details of investment (except in case of
investment in subsidiaries) (f) turnover (g) profit before taxation (h)
provision for taxation (i) profit after taxation (j) proposed dividend,
as applicable;
(v) The annual accounts and other related detailed information of the
following subsidiaries shall be made available to shareholders of the
holding Company and subsidiary companies seeking such information at
any point of time :
1. Hincon Techno consult Ltd
2. Western Securities Ltd
3. Pune-Paud Toll Road Company Ltd
4. Nirmal BOT Ltd
5. Panchkutir Developers Ltd
6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
7. HCC Infrastructure Company Ltd
8. HCC Aviation Ltd
9. Badarpur Faridabad Tollway Ltd
10. Baharampore - Farakka Highways Ltd
11. Farakka - Raiganj Highways Ltd
12. Raiganj - Dalkhola Highways Ltd
13. Dhule Palesner Operations & Maintenance Ltd
14. HCC Power Ltd
15. HCC Construction Ltd
16. Highbar Technologies Ltd
16. Highbar Technologies FZ LLC
17. HCC Mauritius Enterprises Ltd
18. Klemanor Investments Ltd
19. Steiner AG (Formerly known as Karl Steiner AG)
20. Steiner Promotions et Participations SA
21. VM ST AG
22. Eurohotel SA
23. Steiner (Germany) GmbH
24. Steiner Leman SAS
25. SNC Valleiry Route De Bloux
26. Steiner India Ltd
27. HCC Singapore Enterprises Pte. Ltd
28. HCC Real Estate Ltd
29. HRL Township Developers Ltd
30. HRL (Thane) Real Estate Ltd
31. Nashik Township Developers Ltd
32. Maan Township Developers Ltd
33. Charosa Wineries Ltd
34. Powai Real Estate Developers Ltd
35. HCC Realty Ltd
36. Lavasa Corporation Ltd
37. Lavasa Hotel Ltd
38. Apollo Lavasa Health Corporation Ltd
39. Lakeshore Watersports Company Ltd
40. Dasve Convention Centre Ltd
41. Dasve Business Hotel Ltd
42. Dasve Hospitality Institutes Ltd
44. Lakeview Clubs Ltd
45. Dasve Retail Ltd
46. Full Spectrum Adventure Ltd 47 Spotless Laundry Services Ltd
48. Lavasa Bamboocrafts Ltd
49. Green Hill Residences Ltd
50. My City Technology Ltd
51. Reasonable Housing Ltd
52. Future City Multiservices SEZ Ltd (Formerly known as Minfur
Interior Technologies Ltd)
53. Rhapsody Commercial Space Ltd
54. Valley View Entertainment Ltd
55. Andromeda Hotels Ltd
56. Sirrah Palace Hotels Ltd 57 Warasgaon Tourism Ltd
58. Our Home Service Apartments Ltd
59. Warasgaon Power Supply Ltd
60. Sahyadri City Management Ltd
61. Hill City Service Apartments Ltd
62. Kart Racers Ltd
63. Warasgaon Infrastructure Providers Ltd
64. Nature Lovers Retail Ltd
65. Osprey Hospitality Ltd
66. Starlit Resort Ltd
67. Warasgaon Valley Hotels Ltd
68. Rosebay Hotels Ltd
69. Mugaon Luxury Hotels Ltd
70. Warasgaon Assets Maintenance Ltd
71. Hill View Parking Services Ltd
72. Whistling Thrush Facilities Services Ltd
(vi) Further, the annual accounts of the subsidiary companies shall
also be kept for inspection by any shareholder at the head
office/registered office of the Company and of the subsidiary companies
concerned and the Company shall furnish a hard copy of the details of
accounts of subsidiaries to any shareholder on demand;
(vii) The holding as well as subsidiary companies in question shall
regularly file such data to the various regulatory and Government
authorities as may be required by them;
(viii) The Company has given Indian rupee equivalent of the figures
given in foreign currency appearing in the accounts of the subsidiary
companies along with the exchange rate as on closing day of the
financial year;
6. Share Capital
Increase in Paid up Share Capital - Issue of Equity Shares on exercise
of Employee Stock Options
During the year under review, upon exercise of Stock Options by the
eligible employees under the Employee Stock Option Scheme, the Company
has allotted 77,500 Equity Shares of Rs 1 each at an exercise price of Rs
21.70 per Equity Share.
Consequent to the allotment of Equity Shares upon exercise of stock
options, the Paid up Share Capital of the Company has increased from
60,65,32,920 Equity Shares of Rs 1 each aggregating Rs 60,65,32,920
(Rupees Sixty Crore Sixty Five Lakhs Thirty Two Thousand Nine Hundred
Twenty Only) to 60,66,10,420 Equity Shares of Rs 1 each aggregating Rs
60,66,10,420 (Rupees Sixty Crore Sixty Six Lakhs Ten Thousand Four
Hundred Twenty Only).
7. Public Deposits and Loans/Advances
Your Company has not accepted any deposits from the public, or its
employees during the year under review.
Pursuant to Clause 32 of the Listing Agreement, the particulars of
loans/advances given to subsidiaries have been disclosed in the Annual
Accounts of the Company.
8 Employee Stock Option Scheme (ESOP)
As on March 31, 2012, 64,62,960 stock options are outstanding
(comprising vested and unvested, after adjustment for lapsed and
exercised options), in aggregate, for exercise as per the exercise
schedule and are exercisable at a price of Rs 52.03 per stock option.
Each option, when exercised, as per the exercise schedule, would
entitle the holder to subscribe for one equity share of the Company of
face value Rs 1 each.
During the year under review, 15,46,950 options got vested to the
employees of the Company and in aggregate, 48,64,730 options stands
vested with the employees as on March 31, 2012. Further during the
year, 77,500 options, were exercised by the optioned at an exercise
price of Rs 21.70 and accordingly the Company has allotted 77,500 Equity
Shares, in aggregate, of face value Rs 1 each to the respective
employees.
The particulars with regard to the Employee Stock Options as on March
31, 2012 as required to be disclosed pursuant to the provisions of
Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I
to this Report.
9. Status of GDSs
During the financial year 2005-06, the Company had issued Global
Depository Shares (GDSs) and the underlying shares against each of the
GDSs were issued in the name of the Depository, Citi Bank N.A.
As on March 31, 2012, 1,20,720 GDSs have remained outstanding which
forms part of the existing paid up capital of the Company.
10. Consolidated Financial Statements
The Consolidated Financial Statements of the Company prepared in
accordance with applicable Accounting Standards forms a part of this
Annual Report.
11. Corporate Governance
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate Chapter on Corporate Governance practices followed by the
Company together with a Certificate from the Company's Auditors
confirming compliance forms part of this Report.
12. Directors
In accordance with Article 135 and Article 186A of the Articles of
Association, on October 21, 2011, the Board of Directors appointed Dr.
Ila Patnaik as an Additional Director of the Company.
The Company has received a Notice under Section 257 of the Companies
Act, 1956 from a member signifying his intention to propose Dr. Ila
Pataki as a candidate for the office of Director at the forthcoming
Annual General Meeting.
As per the provisions of the Companies Act, 1956 read with Article 152
of the Articles of Association of the Company, Prof. Fred Moavenzadeh,
Mr. Rajas R. Doshi and Mr. D. M. Pop at are the Directors of the
Company who retire by rotation and being eligible, offer themselves for
re-appointment.
The Company has received Form DD-A from all these Directors as required
under the Companies (Disqualification of Directors under Section 274
(1) (g) of the Companies Act, 1956) Rules, 2003.
A brief profile of all these Directors containi
Mar 31, 2011
The Directors are pleased to present the 85th Annual Report together
with the Audited Accounts for the year ended March 31, 2011.
2. Financial Highlights
Particulars Year ended Year ended
March 31, 2011 March 31, 2010
Rs. Crore Rs. Crore
Turnover 4143.97 3862.97
Profit before Interest,
Depreciation and Tax 554.26 440.89
Less: Interest 289.90 205.15
Depreciation 152.69 442.59 113.90 319.05
Profit before Tax 111.67 121.84
Less: Provision for
Current Tax 24.40 20.96
Provision for
Deferred Tax 40.45 40.15
MAT Credit
Entitlement (24.18) 40.67 (20.71) 40.40
Profit after Tax 71.00 81.44
Add: Balance brought
forward from last
year 319.62 279.90
Transferred from
Debenture Redemption
Reserve 4.16 5.41
Amount available for
Appropriation 394.78 366.75
Less: Appropriations
Proposed Dividend 24.26 24.26
Tax on Proposed
Dividend 3.94 4.12
Debenture Redemption
Reserve 8.75 8.75
Transfer to General
Reserve 10.00 46.95 10.00 47.13
Balance carried to
Balance Sheet 347.83 319.62
3. Dividend
Your Directors are pleased to recommend a dividend of Rs. 0.40 per
Equity Share of Rs. 1/- each for the financial year ended March 31,
2011 on the enhanced Share Capital of the Company (post Bonus Issue of
Equity Shares in the ratio 1:1) aggregating to Rs. 24.26 crore thereby
maintaining the dividend payout at the previous years level. (Previous
year Rs. 0.80 per Equity Share of Rs. 1/- each).
Equity Shares that may be allotted by the Company before the Book
Closure will rank pari passu with the existing Shares and be entitled
to receive dividend.
4. Operations
The turnover of the Company at Rs. 4,143.97 crore has shown an increase
of 7.27% as compared to Rs. 3,862.97 crore in the previous year. The
profit before tax is ` 111.67 crore as compared to Rs. 121.84 crore for
the previous year.
Your Directors are pleased to inform that during the year under report,
the Company has secured the following major contracts.
- Rajasthan Atomic Power Project à Unit 7 & 8, 2 x 700 MW, Rajasthan
Contract Value: Rs. 888 crore
- Mumbai Metro à Versova Andheri Ghatkopar Corridor Contract Value: Rs.
145 crore
- Sainj Hydro Electric Project, 100 MW, Himachal Pradesh Contract
Value: Rs. 431 crore
- Aditya Aluminium project, Orissa Contract Value: Rs. 451 crore
- Single Line Tunnel No.12 between Jiribam and Tupul, Assam Contract
Value: Rs. 313 crore
- Alaknanda HEP 3 x 100 MW, Uttarakhand Contract Value: Rs. 660 crore
- Kachchh Branch Canal, Gujarat Contract Value: Rs. 345 crore
- Muzaffarpur Thermal power plant, 2 x 195 MW, Bihar Contract Value:
Rs. 232 crore
The total balance value of works on hand as on March 31, 2011 is Rs.
18,127 crore including Companys share in integrated joint venture
projects and Sawalkot project.
Decisions are awaited from various clients for tenders submitted by the
Company (directly or in JV) for 32 projects amounting to about Rs.
24,040 crore. Tenders for various packages for 31 projects worth about
Rs. 27,710 crore are expected to be submitted in the near future. The
Company has also submitted prequalification bids for 14 projects worth
over Rs. 24,480 crore, which are currently under evaluation. The
company is confident of securing a sizeable share of these new
projects.
Operations of Subsidiaries
(i) Lavasa Corporation Ltd. - Integrated Urban Development & Management
a) Operations
Lavasa is a planned hill city being developed by Lavasa Corporation
Ltd., a subsidiary company. Located in the Western region of India the
city is an hours drive away from Pune and three hours drive from
Mumbai. It is one fifth the size of Greater Mumbai Municipal limits.
The master plan of Lavasa is developed by internationally renowned
design consultant HOK, USA. The master plan, recipient of many
international awards, is based on the principles of New Urbanism that
brings together all the components essential to daily life in a more
organized manner. Lavasa has many pioneering initiatives to its credit
- technology leadership, e-Governance, city developed using
Geographical Information System (GIS), etc.
Lavasa is planned for a permanent population of around 3 lakh residents
and a tourist inflow that is envisaged at 20 lakh per annum. It aims to
provide a perfect work-life balance with an unique combination of
technology and infrastructure advancements. The city will have a 365
day economy with a host of non polluting industries being the main
economic driver; these include R&D and training centres, IT and biotech
industry, KPOs and those related to art, fashion and animation.
On the hospitality front, the hospitality units which are already
operational are: Lavasa International Convention Centre managed by
ACCOR, Mercure Lavasa, Fortune Select Dasve, Ekaant à The Retreat,
Dasvino Town and Country Club, Waterfront Shaw Serviced Apartments.
Other than this, Radisson, ITC Luxury Collection, Choice Hotel, J.Vohra
Hospitality, Novotel by Accor, Pullamn by Accor, Hilton, Ramada,
Oakwood, Two Langham properties, Holiday Inn, Days Inn Hotel are
already tied up and many more are to follow in quick succession giving
Lavasa a new hotel property every 6 months.
An equal amount of progress has been made in the education space where
the Ecole Hotelier Lavasa has commissioned its second batch & Christel
House Lavasa is already operational. Le Mont by Educomp-an IB school is
also starting their 1st batch from July 2011.
Other than this, Ryan International for performing arts, Birla Edutech
by Yash Birla for an IB school, Gems International an IB school,
Management Institute by Bodhi Education, Euro Kids with a primary and
pre-primary school, The Institute of International Business Relations
Germany, NSHM Knowledge Campus of Kolkata, Symbiosis of Pune and Christ
University of Bangalore are also tied up for setting up their Campuses.
Professional and Executive Education has also taken off in Lavasa in a
big way with Car Design Workshop by Chris Bangle (Scuola Politecnica di
Design) the world renowned school of design and communication based in
Milan, Security Awareness Workshop by Max Security (Israeli Security
experts) and Massachusetts Institute of Technology who have conducted
their pilot program based on Airport and Airline Systems, Planning and
Management. This has prepared a platform for them to conduct similar
programmes at Lavasa in the future.
On the retail front, American Diner, Granmas Bakery, Brewberrys Café
,Memories, Baskin & Robbins Kiosk, Tabakh, Oriental Octopus, Amul
Dairy, Chor Bizarre , Subway, Hungry hippo, Krazy Koala Kiosk, Twisted
Turkey Kiosk, Fruity bat, Pizzavala, Natural Ice Cream, Bizarre
Baracuda, Design & Build Store à Home Town are already operational.
On the tourism front, X-Thrill adventure academy, Water Sports, Noes
park (games Arcade), Nature trail, Train on wheels, Kids play Area,
movies, parks & gardens are already operational. Other than this, Space
theme park (edutainment), MGM Hollywood based theme park, Tennis
Australia, Manchester City Football Club are also already tied up.
Events continued to be a key focal point and the year saw a multitude
of events that increased the salience of the brand and helped engage
with the consumer on-ground. These included Rock and Hills music
festival, Wildlife Week celebrations, Lavasa Utsav, Literature Live,
Lavasa Mifta Awards, Lavasa Womens Car Drive, and sponsorship of
Pantaloons Femina Miss India along with events like the New Year
celebrations and Italian food festival. The 3rd Lavasa Womens Car
Drive was held for the first time both from
Mumbai and Pune. Over 750,000 women from 78 odd countries voted for the
2011 participants making it Indias largest Womens Car Drive which
found a place in Limca book of records as well.
Lavasa has collaborated with technology leaders like Wipro Limited and
Cisco Systems to plan, implement and manage Information and
Communication Technology (ICT) services across Lavasa Hill City. The
strategic partnership is intended to focus on providing integrated and
effective solutions for enhancing technology leadership within the hill
city. The Company founded as a result of this venture is named as My
City Technology Limited. This venture is currently deploying a
futuristic telecom network infrastructure to offer its residents and
visitors a life changing technology experience.
Lavasa now has a new post office, police station, a public safety
centre, a hospital managed by Apollo, banks (Union bank of India, State
bank of India), a petrol station, pharmacy, STP, WTP, rental housing,
an arcade and transit system. In the months ahead it will open grocery
and additional retail shops. The citys drinking water is fit for
consumption straight from the tap without the need for filtration; its
sewerage is treated to almost drinking water standards before being
reused for irrigation and other non-potable purposes; its power
distribution grid is nearly 99% reliable and the young city is already
on the cutting edge of urban environmental sustainability initiatives.
The Company plans to have its e-Governance portal and a citizen call
centre to maintain its focus on the needs of residents and visitors,
and it has already opened parks and play areas to the public.
Lavasa continued its focus on branding and communication activities
through 2010-11.
A thought leadership platform à Lavasa Future Cities was launched in
association with the Times of India group. The key objective was to
trigger a thought process amongst public as well as key decision makers
on the need for new urban centres for the rapidly growing urban Indian
population. A television series Urban Longings was aired to highlight
the need for planned new cities. The 6 episode TV series had eminent
personalities like Mr. Narayan Murthy, Dr. Abad Ahmed, Ms. Kiran Bedi,
Mr. Arun Shourie, sharing their vision for building, managing and
governing future cities. The article series by the same name Urban
Longings was published in Times of India & Maharashtra Times and had
prominent personalities like Dr. APJ Abdul Kalam, and 13 others,
echoing their idea of a future
city. In the quest for making Indian cities more liveable and creating
better future cities, a City Planning and Governance Summit was also
organized.
During the year, Lavasa Corporation Ltd. has registered an impressive
performance with a turnover of Rs. 540.96 crores as compared to Rs.
481.56 crores in the previous year. The profit before tax is at Rs.
163.39 crores as compared to Rs. 209.46 crores in the previous year.
b) Status on Ministry of Environment and Forests Issue
On November 25, 2010, Ministry of Environment & Forests ("MoEF"),
Government of India issued show cause notice under Section 5 of the
Environment Protection Act, 1986 to Lavasa Corporation Limited ("LCL")
alleging violations of the Environmental Impact Assessment
notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA
Notifications"). The said notice directed LCL to show cause within 15
days of the receipt of the said notice as to why the alleged
unauthorized structures at Lavasa site be not removed in entirety and
pending the decision on show cause notice by MoEF, it directed LCL to
maintain status-quo ante for construction and/or development.
Upon receipt of the said show cause notice, LCL immediately replied to
MoEF in respect of the said show cause notice and then filed a Writ
Petition against the impugned show cause notice in the Bombay High
Court seeking prayer, inter alia, quashing of the said show cause
notice, stay on status quo pending the decision on the Writ Petition.
The Honble High Court vide its order dated December 7, 2010 has
admitted the Writ Petition filed by LCL. The Counsel for MoEF made a
statement that the words "status quo ante" in the MoEFs show cause
notice dated November 25, 2010 may be read as "status quo", as the word
"ante" is a mistake. The Honble Court also directed MoEF to give
hearing to LCL. Further, vide its order dated December 22, 2010, the
Honble Court while issuing the Rule directed MoEF to give hearing to
LCL and also directed MoEF and Central and/or State level Environment
Impact Assessment Authority to visit LCLs project at Lavasa and
inspect it thoroughly for at least three days to undertake the survey /
inspection and pass an order by January 10, 2011. In the same order
dated December 22, 2010, the Honble High Court has clubbed together 4
public interest litigations filed against LCL (other PILs) inter alia
in respect of lease of land by Maharashtra Krishna Valley Development
Corporation to LCL,
alleged violations by LCL of the Maharashtra Agricultural (Ceiling on
Holdings) Act, 1961 and the Environment Protection Act, 1986.
The members of MoEF committee along with officials of Government of
Maharashtra visited Lavasa site on 5th, 6th and 7th of January, 2011.
Vide its order dated January 1 7, 2011, MoEF has observed that LCL is
in violation of EIA Notifications and the construction activity
undertaken thereon is unauthorized, in violation of the above
notifications and is environmentally damaging. However, taking into
account the submissions made by LCL, employment generated, investments
already made and third party rights already accrued, MoEF stated that
it is prepared to consider the project on merits with various terms and
conditions including (i) payment of substantial penalty (ii) creation
of Environmental Restoration Fund (ERF) by LCL and (iii) imposition
of stringent terms and conditions to ensure no further environmental
degradation takes place and degradation that has occurred would be
rectified within a time bound schedule. Further, under the said order,
the MoEF had directed LCL that in view of the alleged violations of EIA
Notifications and the unauthorized construction activity undertaken and
the occurrence of environment degradation, the order of status quo be
continued and reiterated that no construction activity be undertaken.
On January 24, 2011, LCL filed another Writ Petition being No. 811 of
2011 in Bombay High Court challenging the aforesaid impugned order
dated January 1 7, 2011 passed by MoEF.
Thereafter, on January 25, 2011, LCL addressed a letter to MoEF for
finding an amicable solution and offered without prejudice suggestions
for MoEFs consideration, in a bid to set to rest the controversy
surrounding the Project.
On January 2 7, 2011, Writ Petition no. 811 of 2011 and Writ Petition
no. 9448 of 2010 along with other PILs were listed in Honble High
Court. However, the Honble High Court, upon LCLs plea was pleased to
adjourn the matters for 45 days in view of the ongoing discussions with
MoEF on amicable settlement and posted all LCL connected matters on
March 10, 2011.
MoEF vide its letter dated January 28, 2011, in response to LCLs
letter dated January 25, 2011, had informed that MoEF is prepared to
consider the matter of giving environmental clearance to Phase I. (2000
Ha). Thereafter, pursuant to discussions, LCL by a "without prejudice"
application to MoEF complied with the directions issued by MoEF in its
order dated January 1 7, 2011, and LCL submitted various documents to
MoEF, from time to time, for its consideration.
LCL has also attended & presented at the 97th, 98th and 99th meeting of
the Expert Appraisal Committee (EAC) on CRZ, Infrastructure &
Miscellaneous Projects and New Construction and Industrial Estates
Projects scheduled on 14th & 15th February, 2011, 3rd & 4th March, 2011
and 5th & 6th April, 2011 respectively at New Delhi and LCL submitted
various supporting documents and has also made oral representation.
On March 10, 2011 Writ Petitions of LCL along with other PILs were
listed before Honble High Court, however, MoEF sought time to file its
affidavit-in-reply and therefore all the connected matters were
adjourned to March 25, 2011.
On March 17, 2011, the MoEF uploaded the minutes of the 98th meeting of
EAC held on 3rd & 4th March, 2011 at New Delhi. The Salient aspects of
the minutes is that, the EAC recommends that in view of the investments
made by the third parties, infrastructure already created in the Dasve
village and taking note of the reported hardships highlighted
repeatedly by LCL of the construction workers, pending construction
work of 257 residential buildings, which are above plinth level, may be
allowed subject to the certain conditions such as (i) no hill cutting,
digging, excavation, etc, (ii) the above constructions shall only be
limited to the area for which permission was granted by the Collector,
Pune, (iii) a high level Verification and Monitoring Committee shall be
constituted, (iv) commitment from LCL to earmark necessary / adequate
funds as per report to be submitted shortly regarding the quantum of
penalty/ re- compense and creation of Environmental Restoration Fund
and (v) other conditions as stipulated by MoEF / other State agencies
of State Government shall also be complied with.
In view of the above stipulations, the Committee recommended to MoEF to
permit LCL to complete 257 units subject to the acceptance of the five
conditions listed above and also subject to submission of information /
documents as per the above observations.
Further EAC also stated that consideration of the proposal would depend
on submission of the requisite information as detailed above.
On March 25, 2011, MoEF filed affidavit in reply to LCLs Writ Petition
no. 811 of 2011, by which
LCL had challenged the aforesaid impugned order dated January 1 7, 2011
passed by MoEF.
On March 2 7, 2011, LCL responded to queries in detail raised by EAC in
its minutes of the 98th EAC meeting held on 3rd & 4th March, 2011 at
New Delhi. Also on March 29, 2011, LCL issued 2 letters to MoEF (i)
clarifying the validity of the Special Planning Authority status
granted to LCL and the development of land leased from MKVDC and (ii)
requesting the MoEF to consider the Lavasa project in the next EAC
meeting to be held on 5th & 6th April 2011.
On March 30, 2011, LCL filed an application to withdraw the Writ
Petition no. 811 of 2011 and Writ Petition no. 9448 of 2010 with a
liberty to file a fresh one as and when need arises. It was brought to
the notice of the Honble High Court by LCLs counsel and also by
MoEFs counsel that on the recommendation of EAC, MoEF is inclined to
permit LCL to carry out construction work of 257 residential units
subject to conditions laid down by EAC. On hearing all the parties
including PIL litigants, the Honble High Court suggested that in order
to take care of the apprehensions of the PIL litigants, LCLs counsel
and MoEF counsel should make a statement that status quo order dated
January 1 7, 2011 passed by MoEF should continue to operate till show
cause notice is decided by MoEF. LCL was of the view that its writ
petitions should not be withdrawn with such an adverse order and hence
decided not to withdraw its writ petitions, which are now adjourned to
June 15, 2011. In the circumstances MoEF is free to appraise the
Environment Clearance application of LCL.
On April 6, 2011 the Senior Officials of LCL along with the expert
advising LCL in the matter attended the 99th meeting of EAC and made
presentation before members of EAC and replied to the queries raised by
the EAC in relation to the vacation of status quo on the construction
work in area admeasuring 681.27 Ha, pending consideration of its 1st
phase Environment Clearance of 2000 Ha. The Minutes of the EAC are
awaited.
(ii) HCC Real Estate Ltd.
HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company,
has inherent skills and resources to develop and deliver high-value
real-estate projects that helps in building sustained communities
across India. The focus is to develop state-of-the-art projects which
would provide world class quality, engineering and technology and
create a unique value proposition for the customers.
247 Park
During the year under review, Vikhroli Corporate Park, a Partnership
Firm was converted into a private limited company under the name
Vikhroli Corporate Park Pvt. Ltd. (VCPPL).
247 Park, building owned by VCPPL, is a new age destination and
Indias largest stand-alone LEED Gold certified green building with a
built- up area of 1.8 million square feet and leasable area of 1.1.
million square feet, strategically located at the heart of the business
corridor at Vikhroli(West) in Mumbai.
During July 2010, VCPPL issued further shares to IL&FS Milestone Fund
and thereby HREL and your Companys share holding in VCPPL got diluted
to 20.8% and 5.2% respectively which, in aggregate, constitutes 26%
stake of the HCC group, in VCPPL. Thus, VCPPL has ceased to be
subsidiary of your Company.
Following are the key awards, recognitions and accomplishments of 247
Park during the year:
- The world-class safety standards of 247 Park were recognized at
Asias largest exhibition on Architecture, Design and Construction.
- Was awarded Excellence in Commercial Segment in the Safety Norms
category by The Economic Times ACETECH.
- Has been selected as a chosen participant for the Royal Institute of
Chartered Surveyors (RICS) Ã Vestian study titled Sustainable IT
Workplaces of India and an Occupiers Preference and Satisfaction
Survey is underway.
During the year, 247 Park has achieved more than 90% occupancy and
positive cash flows are expected from the forthcoming year.
247 Business Park
HREL has also executed an agreement with Lavasa Corporation Limited for
purchase of retail area at Lavasa, to be christened as "247 Business
Park".
Charosa Wineries Ltd.
During this year, HRELs wholly owned subsidiary, Charosa Wineries
Limited, has achieved a milestone towards its objective of setting up a
world-class vineyard and ultra-modern winery by commissioning the
winery at Nashik in March 2011. The wine grapes are produced at the own
vineyard for captive use and further produce is selectively purchased
from farmers.
Dholera City Project
The work in respect of the Memorandum of Understanding (MoU) executed
by your Company with the Government of Gujarat for the development of a
proposed Water Front City at Dholera Special Investment Region (SIR)
near Ahmedabad, Gujarat, in the influence area of the Delhi-Mumbai
Industrial Corridor (DMIC) project is progressing satisfactorily. The
Government of Gujarat has released the master plan and draft
development plan for this project and the Company has surveyed the
proposed earmarked site and suggested certain changes. The Company has
also submitted its Concept Development Report to the Government of
Gujarat.
Dholera Renewable Energy Park Project
During this year, your Company has signed a Memorandum of Understanding
(MoU) with the Government of Gujarat for developing a renewable energy
park at its proposed Water Front City at Dholera Special Investment
Region in Ahmedabad district. This is the maiden venture of the company
into the renewable energy space with an estimated investment of Rs.
12,000 Crore. The MoU was signed at the Vibrant Gujarat Summit in
Gandhinagar held in January 2011. It is proposed to set up the
renewable energy park on approximately 600 acres within the land parcel
offered for the proposed water-front city at Dholera. The Rs. 12,000
crore investment towards the development of renewable energy park is
over and above the Rs. 40,000 crore already committed towards the
proposed water front city development in Dholera.
Urban Development and Management Projects
HREL has been short listed for the development of an Integrated
Township within the proposed Petroleum, Chemical and Petrochemical
Investment Region (PCPIR) near Bharuch, Gujarat spread over 600 acres
of land.
Other Projects
HREL has also been selected by Bangalore Metropolitan Regional
Development Authority (BMRDA) for the development of a township at
Bidadi near Bangalore which would be spread over 9000 acres of land.
(iii) HCC Infrastructure
HCC Infrastructure Company Ltd, a wholly owned subsidiary of your
Company, is shaping into a leading infrastructure developer engaged in
the creation and management of assets in the areas
of Transportation, Energy and Urban Infrastructure.
The Company remains committed to developing a premium portfolio of
assets that will serve Indias needs for sustainable infrastructure
development, while creating shareholder value for the Company by
generating stable, diversified and growing cash flow streams over the
long term.
The Company has submitted bids for City Gas Distribution concessions in
Ludhiana and Jalandhar and is evaluating opportunities in Power & Water
projects.
The Company shall act as an umbrella company under which all
infrastructure projects are proposed to be undertaken. HCC Concessions
Ltd, which is the holding company for Road SPVs, and future Transport
concessions, is being realigned as a subsidiary of HCC Infrastructure
Company Ltd.
Road Infrastructure projects:
Since its inception in 2007-08, HCC Concessions Ltd has grown its
development portfolio to Rs. 5,539 crore.
During the course of the year, the Company successfully achieved the
following:
- Started commercial operations for the Delhi Faridabad Elevated
Expressway (dfsk ywayTM)
- Financial closure and commencement of construction of its West Bengal
Project (NH- 34)
During the year, the Company submitted two NHAI bids and 29 Request for
Qualification (RFQs). The equity holding in various road concession
Special Purpose Vehicles was consolidated into a single holding
company, HCC Concessions Ltd. Nirmal BOT Ltd and Badarpur Faridabad
Tollway Ltd have since become subsidiaries of HCC Concessions Ltd.
A slowdown in the award of infrastructure projects, an inflationary
environment and highly aggressive bidding witnessed during the past
year has caused the Company to adopt a cautious and disciplined
strategy in expanding its portfolio.
The assets under management include six National Highways Authority of
India (NHAI) road concessions, of which two are operational.
Status of Operational Assets:
Delhi Faridabad Elevated Expressway (NH-2) (dfskywayà )
The Delhi Faridabad Elevated Expressway (dfskywayà ) is a 4.4 km
elevated highway connecting Delhi and Haryana at Badarpur. This
engineering marvel has been developed by HCC Concessions Ltd with an
investment of Rs. 572 crore. The Company was awarded a 20 year
concession in 2008 to develop, construct and operate this asset by
NHAI. The elevated expressway was operational significantly ahead of
schedule and was inaugurated by the Chief Ministers of both Delhi and
Haryana in November 2010.
Your Directors are pleased to inform that your Company has been awarded
with the prestigious CNBC TV18 Infrastructure Excellence Award 2011 in
the Main Awards Category - Highways & Flyovers, and the Achievement
Award for Best Project in the Roads category by the Board of Governors
of the Construction Industry Development Council (CIDC).
Nirmal (NBL) Annuity (NH-7)
The road from Kadtal to Armur is part of the project involving
four-laning of the road section from Maharashtra - Andhra Pradesh
Border to Armur in Andhra Pradesh, which forms a part of the Nagpur -
Hyderabad section of NH-7. The concession period for the project is 20
years, including a construction period of 24 months. The project was
developed with an investment of Rs. 315 crore and became operational in
July 2009, over 3 months ahead of the scheduled completion date.
Status of Assets under Development:
Dhule Palesner (DPTL) Highway Project (NH-3)
The project road is a part of NH-3, commonly referred to as the
AgraÃMumbai road, originating from Agra and ending at Mumbai in
Maharashtra. It is a primary conduit for transportation of passengers
and freight traffic between the state of Uttar Pradesh and major towns
in the states of Madhya Pradesh and Maharashtra. The concession period
is 18 years, including a construction period of 30 months. The project
has already achieved 55% completion by March 2011 and is expected to be
operational later this year, over 6 months ahead of schedule. The
highway is being developed in partnership with an investment of Rs.
1,420 crore with HCC Concessions Ltd as the lead partner along with
Sadbhav Engineering Ltd and John Laing Investments Ltd (UK).
West Bengal (NH-34) Highway Project
This development is the largest PPP highway project in West Bengal (WB)
and is the major north-south artery (NH-34) in the State, besides
providing connectivity to the North Eastern States and neighbouring
countries. It originates at the capital and port city of Kolkata, and
ends at Dalkhola in the state of WB, covering a total distance of 443.5
km. The concession lengths for the different segments totalling 256 km
range from 25 to 30 years, including a construction period of 30 months
and an investment of over Rs. 3,231 crore. The highway development,
divided into three contiguous sections, covers Baharampore and Farakka
(103 km), Farakka and Raiganj (103 km) and Raiganj and Dalkhola (50
km). In October 2010, the Union Finance Minister, Mr. Pranab Mukherjee,
laid the foundation stone for this 256 km development.
(iv) Karl Steiner AG, Switzerland
In May 2010, your Company made its first international acquisition by
acquiring a controlling equity stake (66% equity stake) in Karl Steiner
AG, Switzerland (KSAG), the second largest total services contractor in
the Swiss Real Estate market. Your Company acquired the controlling
stake in KSAG through its wholly owned subsidiary, HCC Mauritius
Enterprises Ltd, by subscribing to the newly issued shares of KSAG for
a CHF 35 million cash investment. The said funds are proposed to be
primarily used to grow KSAGs Swiss core operations.
KSAG is a leading general contracting company in Switzerland,
specialized in turnkey development of new buildings and refurbishments,
and offers services in all facets of real estate development and
construction. KSAG was founded in 1915 and during its rich history,
KSAG has constructed over 1,200 residential projects, 540 office
buildings, 45 hotels and 150 social infrastructure buildings, which
include universities, schools, hospitals, prisons and nursing homes.
Among KSAGs many clients are Nestlé, Helvetia, Merck-Serono, Sanofi -
Pasteur and the World Economic Forum. KSAG has also built laboratories
for companies like IBM and the Federal Institute of Technology. In
Zurich, KSAG has constructed/renovated the Park Hyatt, Radisson Blu,
and The Savoy hotels. Other significant accomplishments include
Sihlcity (a CHF 500 million integrated development including a hotel,
shopping centre, offices and a
residential complex), Terminal A of the Zurich Airport, portions of the
Geneva airport, the Swiss Re Convention Centre and the home of Google
Europe. In the past ten years, KSAG has completed nearly CHF 10 billion
worth of real estate construction, which translates to approximately 32
million square feet of development.
The board of directors of KSAG comprises five members. Your Company is
represented by three nominees viz., Mr. Ajit Gulabchand, who also acts
as Chairman of KSAG, Mr. K. G. Tendulkar and Mr. Anil Singhvi.
As per the acquisition agreement signed with KSAG, in 2014, KSAGs sole
minority shareholder, Mr. Peter Steiner, will sell his remaining shares
to your Company at a pre-agreed price based on KSAGs earnings achieved
between 2010 and 2013.
The acquisition of KSAG is expected to help your Company to extend its
footprint in Indias growing residential and commercial construction
market. This deal is poised to bring in sharing of rich experiences of
KSAG in construction of world class integrated buildings, ability to
foray into state-of-the art residential and commercial spaces on a
turnkey basis and integrated building construction market in India, act
as a single source provider for total solutions for any facility,
capability for implementation of new technologies to support
sustainable and green developments and access to globally benchmarked
construction processes.
Besides, this will also serve to further augment EPC offerings in India
and other markets and provides your Company with a presence for
European expansion. It also opens the Swiss and European market to
HCCs Engineering and Construction (E&C) business and will enable to
procure greater access to world class cutting edge European
technologies and EPC capability.
Pursuant to the consolidated IGAAP financial statement of KSAG, the
revenue of KSAG amounted to Rs. 2,719.85 crore and the profit before
tax was Rs. 10.31 crore in the period from May 5, 2010 (date of
acquisition of KSAG) to March 31, 2011 (11 months).
At year end, the order backlog of KSAG amounted to CHF 1,018 million.
In addition, KSAG has been awarded 6 contracts with a value of CHF 410
million, for which contracts are yet to be signed. These contracts are
expected to be signed during the financial year 2011-12.
(v) Highbar Technologies Ltd
Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is
an Information Technology company formed by your Company, with the
vision of providing end-to-end IT solutions to Infrastructure industry
which started its independent operations on April 1, 2010.
Highbar Technologies core team comprises of IT and Infrastructure
professionals who have amalgamated the legacy of domain knowledge in
the infrastructure business with Information technology. Highbar
focuses on IT implementation initiatives from business transformation
perspective rather than technology implementation perspective.
Infrastructure industry experts have recognised Highbar Technologies as
Asias 1st IT Company for Infrastructure industry and have shown
faith in its capabilities as against big established IT players.
In the last financial year Highbar Technologies was able to serve 17
new customers, taking the total tally of its customers to 43. Most of
Highbar Technologies customers are reference customers who have
provided repeat business to Highbar Technologies, which is also an
indication of the maturity of Highbars delivery capabilities.
In order to serve Infrastructure industry in Middle East more
effectively, Highbar Technologies Ltd, has incorporated a subsidiary in
Dubai, named Highbar Technologies FZ-LLC. Highbar has also bagged its
1st customer in Middle East.
The Company has also developed strategic alliance with SAP as Service
Partner. Gartner, the worlds leading IT research and advisory
company, recognises Highbar as vendors to watch in Indian ERP space
and attributes its rapid growth to domain capability and knowledge.
The Indian infrastructure sector is poised to have an exponential
growth in the near future. With the rapid adoption of IT by the
Infrastructure industry, there will be significant opportunity for IT
business from the Indian infrastructure sector. Besides, there is a
sizeable market in Middle- East, Far East and European countries.
Highbar Technologies with its niche focus on Infrastructure industry is
optimistic about its business potential over coming years.
Highbar Technologies has established a proper scalable organization
structure with all the functions in place to facilitate and sustain
future growth. It will be able to service Infrastructure
industry in many more ways through addition of new IT services over a
short to medium period. This is a step towards infrastructure industry
choosing Highbar Technologies as the most preferred IT solution
provider for providing end- to-end IT solutions for Roads, Ports,
Real-Estate, Airports, Railways, Energy, Irrigation & Water supply,
Urban infrastructure and Industrial infrastructure (telecom, mining
etc.). It is expected to strive and grow through a judicious mix of
internal competency development and strategic alliances with IT
industry partners.
5. Subsidiary Companies
At the beginning of the year, the Company had 53 Subsidiary Companies.
During the year under review, the following changes have taken place.
a) Your Company has promoted the following wholly owned subsidiary
company for promoting Companys Infrastructure Projects.
Name of the Company Date of Incorporation
HCC Infrastructure Company Ltd 13.12.2010
b) Highbar Technologies Limited (the wholly owned subsidiary company)
has promoted the following wholly owned subsidiary company, making it a
subsidiary of your Company from the date of its incorporation.
Name of the Company Date of Incorporation
Highbar Technologies FZ LLC 20.09.2010
(c) Lavasa Corporation Limited (a subsidiary company) has promoted the
following companies making them subsidiaries of your Company from the
day of their incorporation.
Name of the Company Date of Incorporation
Kart Racers Limited 01.04.2010
Warasgaon Infrastructure
Providers Limited 05.04.2010
Nature Lovers Retail Limited 30.04.2010
Osprey Hospitality Limited 15.11.2010
Starlit Resort Limited 16.11.2010
Warasgaon Valley Hotels Limited 16.11.2010
Rosebay Hotels Limited 24.11.2010
Mugaon Luxury Hotels Limited 29.11.2010
d) During the year under review i.e. on April 19, 2010, HCC Mauritius
Enterprises Ltd, a wholly owned subsidiary of your Company has acquired
100% equity stake in Klemanor Investments Limited, a Company
incorporated in Cyprus, making it a subsidiary of your Company from the
date of the acquisition of the said stake.
e) During the year under review i.e. on May 5, 2010, the Company
through HCC Mauritius Enterprises Ltd, wholly owned subsidiary of the
Company had acquired a controlling equity stake of 66% in Karl Steiner
AG, a company incorporated in Switzerland, thereby making it a
subsidiary of the Company.
Further, there are 6 subsidiary companies of Karl Steiner AG, which are
as follows:-
1. Steiner Promotions et Participations SA
2. Steiner (Germany) GmbH
3. VM + ST AG
4. Steiner Leman SAS
5. SNC Valleiry Route De Bloux
6. Eurohotel SA
By virtue of acquisition of equity stake in Karl Steiner AG (Holding
Company of these six subsidiaries), these six Companies have also
become subsidiary Companies of your Company.
f) The following companies have ceased to be subsidiaries of the
Company during the FY 2010-11 as per details provided below:
1. Ecomotel Hotel Limited w.e.f. September 2, 2010
2. Knowledge Vistas Limited (Formerly known as GDST-Oxford
International School Ltd) w.e.f. April 23, 2010
3. Warasgaon Lake View Hotels Limited (Formerly known as Lavasa Star
Hotel Ltd) w.e.f. December 31, 2010
4. Verzon Hospitality Limited w.e.f. December 31, 2010
In terms of the General Circular No. 2/2011 dated February 8, 2011 read
together with General Circular No. 3/2011 dated February 21, 2011,
issued by the Government of India à Ministry of Corporate Affairs under
Section 212(8) of the Companies Act, 1956, granting general exemption
to companies from attaching financial statements of subsidiaries,
subject to fulfillment of conditions stated in the circular, copies of
the Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Auditors Report
of the subsidiary companies for the year/period ended December 31,
2010/March 31, 2011 are not attached to the Balance Sheet of the
Company as the Company has/shall fulfill the following conditions:
(i) The Board of Directors of the Company has vide resolution dated
April 29, 2011 consented for not attaching the balance sheet(s) of the
concerned subsidiary(ies);
(ii) The Company has presented in its Annual Report, the consolidated
financial statements of holding Company and all of its subsidiaries
duly audited by its statutory auditors;
(iii) The Consolidated financial statement has been prepared in strict
compliance with applicable Accounting Standards and where applicable,
Listing Agreement as prescribed by the Securities and Exchange Board of
India;
(iv) The Company has disclosed in the consolidated balance sheet the
following information in aggregate for each subsidiary including
subsidiaries of subsidiaries:- (a) Capital (b) reserves (c) total
assets (d) total liabilities (e) details of investment (except in case
of investment in subsidiaries) (f) turnover (g) profit before taxation
(h) provision for taxation (i) profit after taxation (j) proposed
dividend, as applicable;
(v) The annual accounts and other related detailed information of the
following subsidiaries shall be made available to shareholders of the
holding company and subsidiary companies seeking such information at
any point of time :
1. Hincon Technoconsult Ltd
2. Western Securities Ltd
3. Pune-Paud Toll Road Company Ltd
4. Nirmal BOT Ltd
5. Panchkutir Developers Ltd
6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
7. HCC Infrastructure Company Ltd
8. HCC Aviation Ltd
9. Badarpur Faridabad Tollway Ltd
10. Baharampore à Farakka Highways Ltd
11. Farakka à Raiganj Highways Ltd
12. Raiganj à Dalkhola Highways Ltd
13. HCC Construction Ltd
14. Highbar Technologies Ltd
15. Highbar Technologies FZ LLC
16. HCC Mauritius Enterprises Ltd
17. Klemanor Investments Ltd
18. Karl Steiner AG
19. Steiner Promotions et Participations SA
20. VM + ST AG
21. Eurohotel SA
22. Steiner (Germany) GmbH
23. Steiner Leman SAS
24. SNC Valleiry Route De Bloux
25. HCC Singapore Enterprises Pte. Ltd
26. HCC Real Estate Ltd
27. HRL Township Developers Ltd
28. HRL (Thane) Real Estate Ltd
29. Nashik Township Developers Ltd
30. Maan Township Developers Ltd
31. Charosa Wineries Ltd
32. Powai Real Estate Developers Ltd
33. HCC Realty Ltd
34. Lavasa Corporation Ltd
35. Lavasa Hotel Ltd
36. Apollo Lavasa Health Corporation Ltd
37. Lakeshore Watersports Company Ltd
38. Dasve Convention Centre Ltd
39. Dasve Business Hotel Ltd
40. Dasve Hospitality Institutes Ltd
41. Lakeview Clubs Ltd
42. Dasve Retail Ltd
43. Full Spectrum Adventure Ltd
44. Spotless Laundry Services Ltd
45. Lavasa Bamboocrafts Ltd
46. Green Hill Residences Ltd
47. My City Technology Ltd
48. Reasonable Housing Ltd
49. Future City Multiservices SEZ Ltd (Formerly known as Minfur
Interior Technologies Ltd)
50. Rhapsody Commercial Space Ltd
51. Valley View Entertainment Ltd
52. Andromeda Hotels Ltd
53. Sirrah Palace Hotels Ltd
54. Whistling Thrush Facilities Services Ltd
55. Warasgaon Tourism Ltd
56. Our Home Service Apartments Ltd
57. Warasgaon Power Supply Ltd
58. Sahyadri City Management Ltd
59. Hill City Service Apartments Ltd
60. Kart Racers Ltd
61. Warasgaon Infrastructure Providers Ltd
62. Nature Lovers Retail Ltd
63. Osprey Hospitality Ltd
64. Starlit Resort Ltd
65. Warasgaon Valley Hotels Ltd
66. Rosebay Hotels Ltd
67. Mugaon Luxury Hotels Ltd
(vi) Further, the annual accounts of the subsidiary companies shall
also be kept for inspection by any shareholder at the head
office/registered office of the Company and of the subsidiary companies
concerned and the Company shall furnish a hard copy of the details of
accounts of subsidiaries to any shareholder on demand;
(vii) The holding as well as subsidiary companies in question shall
regularly file such data to the various regulatory and Government
authorities as may be required by them;
(viii) The Company has given Indian rupee equivalent of the figures
given in foreign currency appearing in the accounts of the subsidiary
companies along with the exchange rate as on closing day of the
financial year;
As a measure of Corporate Governance, a Statement pursuant to Sections
212(3) and 212(5) of the Companies Act, 1956 containing the details of
subsidiaries of the Company, forms part of the Annual Accounts of the
Company.
6. Share Capital
I) Increase in Authorised Share Capital
During the year under review, the Authorised Share Capital of the
Company was increased from Rs. 50,00,00,000 (Rupees Fifty Crores Only)
to Rs. 100,00,00,000 (Rupees One Hundred Crore Only) divided into
90,00,00,000 Equity Shares of Rs. 1/- (Rupee One only) each and
1,00,00,000 Redeemable Preference Shares of Rs. 10/- (Rupees Ten Only)
each.
II) Increase in Paid up Share Capital
a) Issue of Bonus Equity Shares
In accordance with Article 201 of the Articles of Association of the
Company and pursuant to the resolution passed by the Board of Directors
of the Company at its Meeting held on July 30, 2010, your Company has
on August 12, 2010 issued and allotted 30,32,56,460 Equity Shares of
Rs. 1/- each as fully paid Bonus Shares in the ratio of one fully
paid-up equity share of Rs. 1/- each for every existing one fully-paid
equity share of Rs. 1/- each of the Company held by the Shareholders as
on the Record Date i.e. August 11, 2010, by capitalization of a sum of
Rs. 30,32,56,460/- from the Companys Securities Premium Account.
b) Issue of Equity Shares on exercise of Employee Stock Options
During the year under review, upon exercise of Stock Options by the
eligible employees under the Employee Stock Option Scheme, the Company
has allotted 6,860 Equity Shares of Rs. 1/- each at an exercise price
of Rs. 104.05 per Equity Share (prior to adjustment for Bonus Issue)
and 20,000 Equity Shares of Rs. 1/- each at an exercise price of Rs.
52.03 per Equity Share (post adjustment for Bonus Issue).
Consequent to the allotment of Bonus Equity Shares and Equity Shares
upon exercise of stock options, the Paid up Share Capital of the
Company has increased from 30,32,49,600 Equity Shares of Rs. 1/- each
aggregating Rs. 30,32,49,600/- (Rupees Thirty Crore Thirty Two Lakhs
Forty Nine Thousand Six Hundred Only) to 60,65,32,920 Equity Shares of
Rs. 1/- each aggregating Rs. 60,65,32,920/- (Rupees Sixty Crore Sixty
Five Lakhs Thirty Two Thousand Nine Hundred Twenty Only).
7. Public Deposits and Loans/Advances
Your Company has not accepted any deposits from the public, or its
employees and, as such, the question of repayment of any amount of
principal or interest does not arise.
Pursuant to Clause 32 of the Listing Agreement, the particulars of
loans/advances given to subsidiaries have been disclosed in the Annual
Accounts of the Company.
8. Employee Stock Option Scheme (ESOP)
Consequent to the Companys Bonus Issue in the ratio of 1:1 in August
2010, the number of employee stock options in-force got doubled and the
exercise price was halved and as a result as on March 31, 2011,
70,97,500 stock options are outstanding (comprising vested and unvested
after adjustment
for lapsed and exercised options), in aggregate, for exercise as per
the exercise schedule, of which 67,10,000 stock options are exercisable
at a price of Rs. 52.03 per stock option and 3,87,500 stock options are
exercisable at a price of Rs. 21.70 per stock option.
Each option, when exercised, as per the exercise schedule, would
entitle the holder to subscribe for one equity share of the Company of
face value Rs. 1/- each.
During the year under review, 9,26,760 options got vested to the
employees of the Company and in aggregate, 33,17,780 options stands
vested with the employees as on March 31, 2011.
Further during the year, 26,860 options, in aggregate, were exercised
by the eligible employees of which 6,860 options were exercised at an
exercise price of Rs. 104.05 (prior to adjustment for Bonus Issue of
Equity Shares) and 20,000 options were exercised at an exercise price
of Rs. 52.03 (post adjustment for Bonus Issue of Equity Shares) and
accordingly the Company has allotted 26,860 Equity Shares, in
aggregate, of face value Rs. 1/- each to the respective shareholders.
The particulars with regard to the Employee Stock Options as on March
31, 2011 as required to be disclosed pursuant to the provisions of
Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I
to this Report.
9.a)Status of GDSs /FCCBs
During the financial year 2005-06, the Company had issued Global
Depository Shares (GDSs) and the underlying shares against each of the
GDSs were issued in the name of the Depository, Citi Bank N.A.
As on March 31, 2011, 1,20,720 GDSs have remained outstanding which
forms part of the existing paid up capital of the Company.
b) Redemption of FCCBs on maturity
During the financial year 2005-06, the Company had made an offering of
Zero Coupon Foreign Currency Convertible Bonds (FCCBs) for an aggregate
amount of USD 100 million and accordingly 1000 FCCBs of the nominal
value of USD 1,00,000/- each were issued for a tenure of 5 years with
the Maturity Date as April 1, 2011.
During 2009-10, the Company had re-purchased and cancelled 3.4% of the
outstanding FCCBs aggregating to USD 3.4 million (nominal value) in
accordance with the Guidelines prescribed by Reserve Bank of India and
thereupon, 966 FCCBs were outstanding.
During 2010-11, none of the FCCB holders had exercised their option for
conversion of FCCBs into Equity Shares.
In terms of the agreement with the Principal Agent, the Company has
unconditionally remitted the amount of USD 133.03 million equivalent to
Rs. 598.50 Crores (comprising principal amount and accumulated premium
on redemption of FCCBs) to the Principal Agent on March 31, 2011, to
discharge the entire FCCBs maturing on April 1, 2011. The Companys
liability as on March 31, 2011, has accordingly been extinguished on
remittance. The Principal Agent has confirmed discharge of the payment
to the Bond Holders and therefore, 966 outstanding FCCBs of Nominal
Value USD 96.6 million stands redeemed at the redemption price of
137.7139% of its principal amount, as per the terms and conditions of
the FCCB Issue, aggregating to an amount of USD 133.03 million
consisting of payment of the principal amount of USD 96.6 million and
accumulated premium on redemption of the FCCBs of USD 36.43 million.
Pursuant to this, all the FCCBs issued by the Company have been
extinguished and there are no outstanding FCCBs as on the date of this
Report.
10. Consolidated Financial Statements
The Consolidated Financial Statements of the Company prepared in
accordance with applicable Accounting Standards forms a part of this
Annual Report.
11. Corporate Governance
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate Chapter on Corporate Governance practices followed by the
Company together with a Certificate from the Companys Auditors
confirming compliance forms part of this Report.
12. Directors
In accordance with Article 135 and Article 186A of the Articles of
Association, on April 29, 2011, the Board of Directors appointed Mr.
Arun V. Karambelkar as an Additional Director and Whole-time Director
of the Company for a period of 5 years subject to approval of the
shareholders of the Company at the ensuing Annual General Meeting.
The Company has received a Notice under Section 257 of the Companies
Act, 1956 from a member signifying his intention to propose Mr. Arun V.
Karambelkar as a candidate for the office of Director at the
forthcoming Annual General Meeting.
As per the provisions of the Companies Act, 1956 read with Article 152
of the Articles of Association of the Company, Mr. Ram P. Gandhi, Mr.
Sharad M. Kulkarni and Mr. Nirmal P. Bhogilal are the Directors of the
Company who retire by rotation and being eligible, offer themselves for
re-appointment.
The Company has received Form DD-A from all these Directors as required
under the Companies (Disqualification of Directors under Section 274
(1) (g) of the Companies Act, 1956) Rules, 2003.
A brief profile of all these Directors containing details of their
qualifications, expertise, other directorships, committee memberships
etc. has been given in the Report on the Corporate Governance as well
as in the Notice of the ensuing Annual General Meeting of the Company.
13. Directors Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
b) the selected accounting policies were applied consistently and the
Directors 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, 2011 and of the profits of the Company for the
year ended on that date.
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act,1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d) the annual accounts have been prepared on a going concern basis.
14. Industrial Relations
The industrial relations continued to be generally peaceful and
cordial.
15. Transfer to Investor Education and Protection Fund (IEPF)
The Company has, during the year under review, transferred a sum of Rs.
6,66,860/- to Investor Education and Protection Fund, in compliance
with the provisions of Section 205C of the Companies Act, 1956. The
said amount represents dividend for the year 2002-03 which remained
unclaimed by the shareholders of the Company for a period exceeding 7
years from its due date of payment.
16. Particulars of Employees and other additional information.
The information required under Section 217(2A) of the Companies Act,
1956 and the Rules made there under is given in the Annexure to this
Report and forms part of the Report. However, in terms of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are
being sent to the shareholders excluding the aforesaid Annexure. Any
Shareholder interested in obtaining copy of the same may write to the
Company Secretary at the Registered Office of the Company.
17. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo.
The information relating to the conservation of energy, technology
absorption and foreign exchange earnings and outgo as required to be
disclosed under the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, is given in Annexure II forming
part of this Report.
18. Auditors
M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the
Company, bearing ICAI Registration No. 100186W retire at the ensuing
Annual General Meeting and are eligible for re-appointment.
As required under the provisions of section 224(1B) of the Companies
Act, 1956, the Company has obtained a written certificate from the
Auditors to the effect that their re-appointment, if made, would be in
conformity with the limits specified in the said section.
19. Auditors Report
The Auditors Report to the shareholders on the Accounts of the Company
for the financial year ended March 31, 2011 does not contain any
qualification.
20. Acknowledgements
Your Directors would like to acknowledge and place on record their
sincere appreciation to all stakeholders à Clients, Financial
Institutions, Banks, Central and State Governments, the Companys
valued investors and all other business partners for their continued
co-operation and excellent support received during the year.
Your Directors recognize and appreciate the efforts and hard work of
all the employees of the Company and their continued contribution to
its progress.
For and on behalf of the Board of Directors
AJIT GULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House
Lal Bahadur Shastri Marg
Vikhroli (West) Mumbai-400 083
Place: Mumbai
Dated: April 29, 2011
Mar 31, 2010
1. Report
The Directors are pleased to present the 84th Annual Report together
with the Audited Accounts for the year ended March 31, 2010
2. Financial Highlights
Particulars Year ended Year ended
March 31, 2010 March 31, 2009
Rs. Crore Rs. Crore
Turnover 3862.97 3518.32
Profit before Interest,
Depreciation and Tax 440.89 490.27
Less: i) Interest 205.15 210.50
ii) Depreciation 113.90 319.05 115.22 325.72
Profit before Tax 121.84 164.55
Less: Provision for
Current Tax 20.96 18.61
Provision for
Deferred Tax 40.15 36.51
Provision for Fringe
Benefit Tax -- 2.40
MAT- Credit Entitlement (20.71) 4.40 (18.32) 39.20
Profit after Tax 81.44 125.35
Add: Balance brought
forward from last year 279.90 207.95
Add: Transferred from
Debenture Redemption
Reserve 5.41 8.50
Amount available for
Appropriation 366.75 341.80
Less: Appropriations
a) Proposed Dividend 24.26 20.50
b) Tax on Proposed
Dividend 4.12 3.48
c) Debenture Redemption
Reserve 8.75 12.92
d) Transferred to
General Reserve 10.00 25.00
47.13 61.90
Balance Carried to Balance Sheet 319.62 279.90
3. Dividend
Your Directors are pleased to recommend a dividend of Re.0.80 per
Equity Share of Re.1/- each for the financial year ended March 31, 2010
(Previous year - Re.0.80 per Equity Share of Re.1/-each) aggregating to
Rs. 24.26 crore.
4. Operations
The turnover of the Company at Rs. 3862.97 crore has shown an increase
of 9.8% as compared to Rs. 3518.32 crore for the previous year. The
profit before tax is Rs. 121.84 crore as compared to Rs. 164.55 crore
for the previous year.
Your Directors are pleased to inform that during the year under report,
the Company has secured the following major contracts.
Dagachhu Hydro Power Plant (Civil Works), 114
MW, Bhutan
Contract Value: 388 crore
à Gosikhurd Hydel Scheme, 24 MW, Maharashtra Contract Value: 229 crore
à Pare Hydro Electric Project,110 MW, Arunachal Pradesh
Contract Value: 276 crore
à Pumped Water Supply scheme from Kesaria to Sonaria, Gujarat (NC-25)
Contract Value: 168 crore
à Elevated Road Corridor from Park Circus to E.M. Bypass, Kolkata
Contract Value: 318 crore
à Cavern for Crude oil storage, Padur, Karnataka Contract Value: 375
crore
POT Shell fabrication works for Aditya Aluminium project, Orissa
Contract Value: 109 crore
à Four-laning of Bahrampore-Farraka section of NH-34 in West Bengal on
Design, Build, Finance, Operate and Transfer Toll basis under NHDP-
IIKPackage No.NHDP-lll/BOT/WB/03)
Four-laning of Farraka-Raiganj section of NH-34 in West Bengal on
Design, Build, Finance, Operate and Transfer Toll basis under NHDP-
IIKPackage No.NHDP-lll/BOT/WB/04)
à Four-laning of Raiganj-Dalkhola section of NH- 34 in West Bengal on
Design, Build, Finance, Operate and Transfer Toll basis under NHDP-
IIKPackage No.NHDP-lll/BOT/WB/05)
à POT Superstructure fabrication works for Aditya Aluminium project,
Orissa Contract Value: 100 crore
à Civil and Piling works for Aditya Aluminium Project, Orissa
Contract Value: 199 crore
Single Line Tunnel No.1 between Dholakal and
Kalmai, Assam
Contract Value: 118 crore
à Reconstruction of Dry Dock at Naval Dockyard, Mumbai
Contract Value: 608 crore
The total balance value of works on hand as on March 31, 2010 is
Rs.18,810 crore including Companys share in integrated joint venture
projects and Sawalkot project.
Decisions are awaited from various clients for tenders submitted by the
Company (Directly or in JV) for 24 projects amounting to about Rs.9,520
crore. Tenders for various packages for 23 projects worth about
Rs.14,630 crore are expected to be submitted in the near future. The
Company has also submitted prequalification bids for 11 projects worth
over Rs.6,170 crore, which are currently under evaluation. The Company
is confident of securing a sizeable share of these new projects.
Subsidiaries Operations
(i) Lavasa Corporation Ltd. - integrated Urban Development & Management
Lavasa is free Indias first planned hill city being developed by
Lavasa Corporation Ltd., subsidiary company of HCC. Located in the
Western region of India in the picturesque landscape of the Sahayadri
Mountains, it is set amidst 7 hills and 60 km. of lakefront. A three
hour drive from Mumbai and an hours drive from Pune, the city is one
fourth of the size of Mumbai.
The master plan of Lavasa (current development plan-18,000 acres) is
developed by internationally renowned design consultant HOK, USA. The
master plan, recipient of many international awards, is based on the
principles of New Urbanism that brings together all the components
essential to daily life in a more organized manner. Lavasa has many
firsts to its credit - technology leadership, e-Governance, Indias
first e-city, the first Indian city developed using Geographical
Information System (GIS), etc. In association with The Biomimicry Guild
(USA), the science of Biomimicry is used at Lavasa where learnings from
nature are seamlessly integrated in the master planning of Lavasa.
Lavasa is planned for a permanent population of around 3 lakh residents
and a tourist inflow that is envisaged at 20 lakh per annum. It aims to
provide a perfect work - life balance with an unique combination of
technology and infrastructure advancements. The city will have a 365
day economy with a host of non polluting industries being the main
economic driver; these include R&D and training centres, IT and biotech
industry, KPOs and those related to art, fashion and animation.
The tie ups continued though 2009 - 10. In the hospitality space
partners such as Accor Hospitality with three brands - Mercure, Novotel
and Pullman are all getting ready to launch in the next 12 months with
Mercure opening first in April 2010. Accor Hospitality is also managing
the Lavasa International Convention Centre which opened its doors in
March 2010. Hilton, Ramada, Velvett Country, Oakwood, two Langham
properties, Holiday Inn and many more are to follow in quick succession
giving Lavasa a new hotel property every 6 months.
An equal amount of progress has been made in the education space with
the Ecole Hoteliere Lavasa opening in July 2009 followed by Educomp
with an IB school and Euro kids with a primary and pre-primary school.
The Institute of International Business Relations Germany is ready to
launch their programs in the next 12 months. NSHM Knowledge Campus of
Kolkata, Symbiosis of Pune and Christ University of Bangalore are also
to follow with their campuses over the next 18 months.
Professional and Executive Education has also taken off in Lavasa in a
big way with MIT having conducted their pilot program based on Airport
and Airline Systems, Planning and Management. This has prepared a
platform for them to conduct similar programmes at Lavasa in the
future. In addition, The Biomimicry Guild, USA also held its first
executive education at Lavasa.
The focus on branding and communication activities at the consumer
continued with momentum through 2009-10. The communication activities
were targeted at the various stakeholders and clearly positioned Lavasa
as a future city in the making. A thought leadership platform -Lavasa
Future Cities was launched in association with the Times of India
group. The key objective was to trigger a thought process amongst
public as well as key decision makers on not only the need to push for
creation of more urban centres for the rapidly migrating Indian
populace but also to push forth the need for better and more workable
governance structures. This intensive 5 month campaign was planned and
executed across various media (print, radio, internet, on- ground
events) and included a Citizen Connect initiative.
During the year, Lavasa Corporation Ltd. has registered impressive
performance with turnover of Rs. 481.60 crore as compared to Rs. 212
crore in the previous year. The profit before tax is at Rs. 209.50
crore as compared to Rs. 135.10 crore in the previous year.
(ii) HCC Real Estate Ltd.
HCC is developing its real estate business through its wholly owned
subsidiary HCC Real Estate Ltd. (HREL). The focus of HREL has been on
acquiring and developing real-estate assets that provide unique value
propositions to customers. Consequently, instead of building large
land banks, HREL has been focusing on developing projects that are "one
of a kind" in India.
During the financial year 2009-10, 247 Park at Vikhroli (West) was
completed. Inspite of recessionary period, 247 Park has got good
response from the various clients and is now leased to the extent of
more than 75% of the overall leasable area. Considering the interest
expressed by potential clients, we are confident of leasing out the
balance area during the 1st quarter.
247 Park was awarded the prestigious "LEED" certification for Green
Building. It was also awarded by CNBC Awaaz-CRISIL as "The Best
Commercial Building in Western Region of India".
For the Township projects in the areas of Thane, Pune & Nashik, the
Company is consolidating its position in respect of land titles and
other documentation. The progress on this front is satisfactory.
Charosa Wineries Ltd., a 100% subsidiary of HREL, established in
2008-09 for setting up world-class vineyard and ultra-modern winery in
Nashik district has already acquired more than 200 acres of land. All
the infrastructural work for vineyard is already completed. The first
crop of wine grapes has already been cultivated for captive use.
Company plans to complete the construction and commission the winery
during the year 2010-11. Company has also plans to promote wine
tourism considering the increasing wine consumption in the region.
During the year, HREL formed a 100% subsidiary under the name HCC
Realty Limited to undertake certain projects.
Dholera Project
The Company has received an extension of two years to the MOU with
Gujarat Government to develop a Water Front City at Dholera on 4,000
acres as the master plan for the same is being finalized by the
Consultants appointed by the Government. The Water Front City will be
developed with proposed total investment of Rs. 40,000 crore in Dholera
Special Investment Region (SIR) located at the Gulf of Cambay about 130
km from Ahmadabad. Dholera is in the influence area of the Delhi-Mumbai
Industrial Corridor (DMIC) project which has witnessed substantial
progress in the last one year. Company has continued with the next
steps of preparation of concept development report and is expected to
receive the site options from Gujarat Infrastructure Development Board
(GIDB), the nodal agency for Dholera SIR by June 2010.
(iii) HCC Infrastructure Ltd.
HCC Infrastructure Ltd., the company formed as a separate wholly owned
subsidiary in the financial year 2007-08 to develop infrastructure
projects has during the year under review gathered rapid momentum and
grown its portfolio from Rs. 2307 crore in last fiscal to Rs. 5539
crore in 2009-10.
During the year HCC Infrastructure concentrated mainly on National
Highways Authority of India (NHAI) projects on a public private
partnership basis with the support of an excellent team that has
special DNA that leverages its in - house construction expertise and
quality, while opportunistically defining its own legacy as an asset
manager.
During the year under review, HCC Infrastructure qualified for 27 road
projects, and focused its bids only for three projects with 100%
success. That expressed discipline, creativity and highly patient
investment strategy. In February 2010, the NHAI awarded three
contiguous sections of approximately 256 km. for the development of
existing two lanes to four lanes between Baharampore to Dalkhola on
NH-34 in the state of West Bengal.These concessions were awarded on a
Design, Build, Finance, Operate, and Transfer (DBFOT) Toll basis with a
cumulative grant of Rs. 1033 crore. The first section is from
Baharampore to Farakka (103 km), the second is from Farakka to Raiganj
(103 km) and the third is between Raiganj and Dalkhola (50 km). These
projects are proposed to be implemented by three separate special
purpose vehicles (SPVs) viz. Baharampore- Farakka Highways Ltd. (BFHL),
Farakka-Raiganj Highways Ltd. (FRHL) and Raiganj-Dalkhola Highways
Limited (RDHL) respectively.
The 4 lane Dhule-Palasner Road project on NH-3 from 168.500 km. to
265.000 km. in the State of
Maharashtra under DBFOT basis won last year in a consortium with two
other partners namely John Laing, (U.K.) and Sadbhav Engineering,
(India) has achieved Financial Closure within the minimum possible time
frame and also has reached to 10% physical completion. This project is
being implemented by a special purpose vehicle (SPV), Dhule- Palesner
Tollway Ltd. (DPTL).
The prestigious ongoing 6 lane Badarpur- Faridabad Elevated Highway
project from 16.100 km. to 20.500 km. on Delhi-Agra Section of NH-2 has
also reached to 67% completion within 15 months and expected to be
commercially operational in next year. This project is being
implemented by a special purpose vehicle (SPV), Badarpur-Faridabad
Tollway Ltd. (BFTL) Also during the year under review, Nirmal BOT Road
project of 278.000 km. (Kadthal) to 308.000 km. (Armur) of NH-7 in the
State of Andhra Pradesh under North-South Corridor (NHDP Phase-ll) on
BOT (Annuity) Basis is now fully operational with in-house O&M team and
has achieved Commercial Operation Date 100 days ahead of schedule which
entitles an early project completion bonus of Rs.13.22 crore. This
project is being implemented by a special purpose vehicle (SPV), Nirmal
BOT Ltd. (NBL). 5. Subsidiary Companies
At the beginning of the year, the Company had 36 subsidiary companies.
During the year the following changes have taken place.
a) Your Company has promoted following wholly owned
subsidiary/subsidiary companies for promoting Companys other
businesses at opportune times and for specific infrastructure
development projects.
Name of the Company Date of Incorporation
Highbar Technologies Limited 25.11.2009
Baharampore-Farakka Highways
Limited 11.03.2010
Farakka-Raiganj Highways Limited 11.03.2010
Raiganj-Dalkhola Highways
Limited 11.03.2010
b) HCC Real Estate Limited (the wholly owned subsidiary) has promoted
the following wholly owned subsidiary company, making it a subsidiary
of your Company from the date of its incorporation.
Name of the Company Date of
Incorporation
HCC Realty Limited 18.02.2010
c) Lavasa Corporation Limited has promoted the following companies
making them subsidiaries of your Company from the day of their
incorporation.
Name of the Company Date of
Incorporation
Green Hills Residences Limited 06.05.2009
My City Technology Limited 04.08.2009
Reasonable Housing Limited 23.09.2009
Minfur Interior Technologies
Limited 30.11.2009
Verzon Hospitality Limited 08.01.2010
Rhapsody Hospitality Limited 14.01.2010
Valley View Entertainment Limited 20.01.2010
Andromeda Hotels Limited 22.01.2010
Sirrah Palace Hotels Limited 25.01.2010
Whistling Thrush Facilities
Services Limited 27.01.2010
Warasgaon Tourism Limited 25.02.2010
Our Home Service Apartments
Limited 10.03.2010
Sahyadri City Management
Limited 12.03.2010
Warasgaon Power Supply Limited 12.03.2010
Hill City Service Apartments
Limited 26.03.2010
Baharampore-Farakka Highways Limited, Farakka- Raiganj Highways
Limited, Raiganj-Dalkhola Highways Limited the direct subsidiaries of
the Company shall close their first financial year on March 31, 2011
and therefore no accounts have been prepared by these companies for the
period ended March 31, 2010.
HCC Realty Limited subsidiary of HCC Real Estate Limited shall close
its first financial year on March 31, 2011 and therefore no accounts
have been prepared by this company for the period ended March 31, 2010.
Verzon Hospitality Limited, Rhapsody Hospitality Limited, Valley View
Entertainment Limited, Andromeda Hotels Limited, Sirrah Palace Hotels
Limited, Whistling Thrush Facilities Services Limited, Warasgaon
Tourism Limited, Our Home Service Apartments Limited, Sahyadri City
Management Limited, Warasgaon Power Supply Limited, Hill City Service
Apartments Limited which are the direct subsidiaries of Lavasa
Corporation Limited shall close their first financial year on March 31,
2011 and therefore no accounts have been prepared by these companies
for the period ended March 31, 2010.
A Statement pursuant to Section 212 of the Companies Act, 1956
containing the details of subsidiaries of the Company, forms part of
the Annual Report.
In terms of the approval granted by the Central Government under
Section 212(8) of the Companies Act, 1956, vide its letter bearing
number 47/156/2010- CL-III dated March 19, 2010 the copies of the
Balance Sheet, Profit and Loss Account, Reports of the Board of
Directors and the Auditors of the Subsidiary Companies for the year
ended March 31, 2010 are not attached to the Balance Sheet of the
Company. The Company will make available the annual accounts and other
related detailed information of the following subsidiaries upon request
by any member / investor of the Company / Subsidiary Companies:
1. Hincon Technoconsult Ltd
2. Western Securities Ltd
3. Pune Paud Toll Road Company Ltd 4 Nirmal BOT Ltd
5. Badarpur Faridabad Toll way Ltd
6. HCC Infrastructure Ltd
7. HCC Aviation Ltd
8. Panchkutir Developers Ltd
9. Highbar Technologies Ltd
10. HCC Construction Ltd
11. HCC Mauritius Enterprises Ltd
12. HCC Singapore Enterprises Pte. Ltd
13. HCC Real Estate Ltd
14. HRL Township Developers Ltd
15. HRL (Thane) Real Estate Ltd
16. Nashik Township Developers Ltd
17. Maan Township Developers Ltd
18. Charosa Wineries Ltd
19. Powai Real Estate Developers Ltd
20. Lavasa Corporation Ltd
21. Lavasa Hotel Ltd
22. Warasgaon Lake View Hotels Ltd (formerly known as Lavasa Star
Hotel Ltd)
23. Apollo Lavasa Health Corporation Ltd
24. Lakeshore Watersports Company Ltd
25. Dasve Convention Centre Ltd
26. Dasve Business Hotel Ltd 27 Ecomotel Hotel Ltd
28. Dasve Hospitality Institutes Ltd
29. Lakeview Clubs Ltd
30. Dasve Retail Ltd
31. Full Spectrum Adventure Ltd
32. Spotless Laundry Services Ltd
33. Lavasa Bamboocrafts Ltd
34. Knowledge Vistas Ltd
35. Green Hill Residences Ltd
36. My City Technology Ltd
37. Reasonable Housing Ltd
38. Minfur Interior Technologies Ltd
Further, the annual accounts of the subsidiary companies will also be
kept for inspection by any member / investor at the Companys
Registered Office. The Company has presented the Audited Consolidated
Financial Statements and the same have been prepared in compliance with
the Accounting Standard AS-21 issued by the Institute of Chartered
Accountants of India (ICAI).
6. Acquisition of Controlling Stake in Karl Steiner AG, Switzerland
In March 2010, your Company agreed to acquire controlling stake i.e.
66% equity stake in Karl Steiner AG, Switzerland (KSAG), the second
largest total services contractor in the Swiss Real Estate market.
This is the Companys first international acquisition. KSAG
specialises in turnkey development of new buildings and refurbishments
and offers services in all facets of real estate construction.
KSAG was founded in 1915 and during its rich history, KSAG has
constructed over 1,200 residential projects, 540 office buildings, 45
hotels and 150 social infrastructure buildings which include
universities, schools, hospitals, prisons and nursing homes. Among
KSAGs many clients, for which the company has realized or renovated
headquarters are Nestle, Helvetia, Merck-Serono, Sanofi - Pasteur and
the World Economic Forum. KSAG has also built laboratories for
companies like IBM and the Federal Institute of Technology. In Zurich,
KSAG has constructed/renovated the Park Hyatt, Radisson Blu, and The
Savoy Hotels. Other significant accomplishments for the company include
Sihl City (a CHF 500 million integrated development including a hotel,
shopping center, offices and a residential complex). Terminal A of the
Zurich Airport, portions of the Geneva airport, the Swiss Re convention
center and the home of Google Europe. In the past ten years, KSAG has
completed nearly CHF 10 billion worth of real estate construction,
which translates to approximately 32 million square feet of
development.
Your Company agreed to acquire 66% stake by way of issuance of new
shares in consideration for CHF 35 million cash investment in KSAG.
KSAG shall use the funds raised by the capital increase for its Swiss
operations and the growth of the Companys core business in Indias
growing residential and commercial construction market
In 2014, in line with the envisaged succession process, KSAGs sole
owner Mr. Peter Steiner will sell his remaining shares to the Company.
The shares will be sold at a pre-agreed price based on KSAGs earnings
achieved between 2010 and 2013.
The acquisition of KSAG shall bring a rich experience of constructing
world class integrated buildings to your company.
Apart from this, the acquisition of KSAG shall bring the following
benefits to HCC: -
à Entry into the lucrative integrated building construction market in
India, which is estimated at Rs.65, 000 to Rs.75, 000 crores annually.
Total solutions ability for a facility at a single source.
Implementation of new technologies to support sustainable and green
development.
à Safe and fast construction processes.
à Access to many world class, cutting edge European technologies that
will augment EPC offerings in India and other markets.
The transaction is subject to regulatory approvals in Switzerland and
India and shall close in the first quarter of the FY 2010 -2011.
7. Employee Stock Option Scheme (ESOP)
In accordance with the approval of the Board of Directors and the
Shareholders of the Company, the ESOP Compensation Committee at its
Meeting held on July 20, 2009 re-priced the 41,31,600 number of Options
(after adjusting for Options lapsed) already granted by the Company on
April 25, 2008 under HCC Employee Stock Option Scheme at Rs.104.05 per
Option (earlier Rs.132.50 per Option).
Further, out of total 43,25,350 Options granted (in force) 7,70,880
number of Options have been vested with the employees during the year.
The particulars with regard to the Stock Options as required to be
disclosed pursuant to the provision of Clause 12 of SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines
1999, as amended as on March 31, 2010 are set out in the Annexure I to
this Report.
8. a) Raising of Funds through Qualified Institutional
Placement and Increase in Paid-up Equity Share Capital
During the year under review, your Company successfully raised funds
aggregating Rs. 4,80,10,50,000/- (Rupees four hundred eighty crore ten
lakhs fifty thousand only) through Qualified Institutional Placement of
4,70,00,000 Equity Shares of nominal / face value Re. 1/- each at an
issue price of Rs. 102.15 per Equity Share (inclusive of premium of Rs.
101.15 per Equity Share).
This has resulted in increasing the Paid up Equity Share Capital of the
Company from 25,62,49,600 Equity Shares of Re. 1/- each aggregating Rs.
25,62,49,600/- (Rupees twenty five crore sixty two lakhs forty nine
thousand six hundred only) to 30,32,49,600 Equity Shares of Re. 1/-
each aggregating Rs. 30,32,49,600/- (Rupees thirty crore thirty two
lakhs forty nine thousand six hundred only).
The entire issue proceeds aggregating Rs.480.11 crore have been
utilized by the Company towards financing of capital expenditure,
meeting the working capital requirements of the Company and repayment
of loans in terms of the objects of the issue. b) Status of GDSs /
FCCBs & Utilisation of Proceeds During the financial year 2005-06, the
Company had made a combined offering of Global Depository Shares (GDSs)
and Foreign Convertible Bonds (FCCBs) for an aggregate amount of USD
200 million. The FCCBs and underlying equity shares of GDSs have been
allotted on March 29, 2006. As at March 31, 2010, out of 2,69,54,200
underlying equity shares of GDSs, 1,40,146 GDSs have remained
outstanding which forms part of the existing paid up capital of the
Company. During the year under review, none of the bond holders have
exercised their option for conversion of FCCBs into equity shares.
However, the Company had re-purchased and cancelled 3.4% of its
outstanding Zero Coupon Foreign Currency Convertible Bonds (FCCBs) due
2011 of USD 1,00,000 each aggregating to USD 3.4 million (Nominal
Value) in accordance with the Guidelines prescribed by Reserve Bank of
India. As at March 31, 2010, 966 FCCBs of the nominal value of USD
1,00,000/- each aggregating to USD 96.60 million have remained
outstanding. The entire issue proceeds from aforesaid issue of GDSs &
FCCB aggregating to Rs.869.54 crore have been utilized by the Company
towards financing of capital expenditure and for meeting the working
capital requirements of the Company in terms of the objects of the
issue. 9. Constitution of Selection Committee
The Company formed a Selection committee during the financial year
2009-10 as per the requirements of Directors Relatives (Office or
Place of Profit) Rules, 2003 to deal with matters concerning the
appointment and remuneration of relatives of Director for holding
office or place of profit in the Company. The Committee comprises of
three Directors; namely, Mr. Nirmal P. Bhogilal, Chairman and
Independent Director, Mr. Ram P. Gandhi, Independent Director, Mr. Anil
Singhvi, Independent Director and one Mr. Ashish Singh, an expert who
is MBA (Harvard Business School) & B.A. Economics (Harvard College),
the Managing Director of Bain & Co., India with significant experience
in organization redesign, across multiple industries.
Pursuant to the provisions of Section 314(IB) of the Companies Act,
1956 and rules made thereon, the Selection Committee & the Board of
Directors in its meeting held on October 23, 2009 and Shareholders of
the Company through Postal Ballot had approved the appointment and
remuneration of Mr. Arjun Dhawan, a relative (son-in-law) of Mr. Ajit
Gulabchand, Chairman & Managing Director of the Company, to hold and
continue to hold an office or Place of Profit as a President-HCC
Infrastructure Business of the Company with effect from November
01,2009, remuneration being subject to the approval of the Central
Government.
10. Consolidated Financial Statements
As stipulated by Clause 32 of the Listing Agreement with the Stock
Exchanges, the attached consolidated financial statements have been
prepared in accordance with the Accounting Standard AS-21 & AS-27 read
with Accounting Standard AS-23 on Accounting for Investments in
Associates.
11. Corporate Governance
A separate section titled "Corporate Governance" including a
certificate from the Auditors of the Company confirming compliance of
the conditions of Corporate Governance as stipulated under Clause 49 of
the Listing Agreement is annexed hereto and forms part of the Report.
12. Directors Retirement by rotation
As per the provisions of the Companies Act, 1956 read with Article 152
of the Articles of Association of the Company Mr. D.M. Popat and Mr.
Y.H. Malegam are the Directors of the Company to retire by rotation and
being eligible, offer themselves for re-appointment. Appointment of
the Directors of the Company Mr. K. G. Tendulkar
The tenure of Mr. K. G. Tendulkar as Deputy Managing Director of the
Company expired on November 7, 2009. The Board of Directors place on
record its appreciation of the contributions made and the valuable
services rendered by him during his tenure as Executive Director
(Operations) and Deputy Managing Director of the Company.
The Board of Director of the Company at its Meeting held on October 23,
2009 appointed Mr. K. G. Tendulkar as an Additional Director of the
Company with effect from November 8, 2009, who holds office upto the
date of the forthcoming Annual General Meeting and is eligible for
appointment as a Director of the Company.
Mr. Anil C. Singhvi
Mr. Anil C. Singhvi, was appointed as a Director of the Company by the
Board of Directors at its Meeting held on July 27, 2007 to fill in the
casual vacancy caused in the Board due to the resignation by Mr. R. G.
Vartak, who holds office upto the date of the forthcoming Annual
General Meeting and is eligible for appointment as a Director of the
Company.
All these directors have filed Form DD-A with the Company as required
under the Companies
(Disqualification of Directors under Section 274(1) (g) of the
Companies Act, 1956) Rules, 2003.
Brief particulars and expertise of these Directors and their other
directorship and committee membership have been given in the Report on
the Corporate Governance and in the Notice of the ensuing Annual
General Meeting of the Company.
13. Directors Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, with regard to the Directors responsibility statement, the
Board of Directors confirms that:
a) in the preparation of the annuaf accounts, the applicable accounting
standards have been followed and there has been no material departure;
b) the selected accounting policies were applied consistently and the
Directors 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, 2010 and of the profits of the Company for the
year ended on that date.
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act,1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d) the annual accounts have been prepared on a going concern basis.
14. Industrial Relations
The industrial relations continue to be generally peaceful and cordial.
15. Transfer to Investor Education and Protection Fund (IEPF)
The Company has, during the year under review, transferred a sum of
Rs.7.94 lacs to Investor Education and Protection Fund, in compliance
with the provisions of Section 205C of the Companies Act, 1956. The
said amount represents dividend, debentures and interest on debentures
which remained unclaimed by the shareholders / debenture holders of the
Company for a period exceeding 7 years from their respective due dates
of payment.
16. Particulars of Employees and other additional information.
The information required under Section 217 (2A) of the Companies Act,
1956 and the Rules made there under is given in the Annexure to this
Report and forms part of the Report. However, in terms of Section
219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are
being sent to the shareholders excluding the aforesaid Annexure. Any
Shareholder interested in obtaining copy of the same may write to the
Company Secretary at the Registered Office of the Company.
17. Conservation of Energy, technology absorption and foreign exchange
earnings and outgo.
The information relating to the conservation of energy, technology
absorption and foreign exchange earnings and outgo as required to be
disclosed under the Companies (Disclosure of particulars in the Report
of the Board of Directors! Ru(es 1988, is given in the Annexure II
forming part of this Report.
18. Auditors
M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the
Company, bearing ICAI Registration No. 100186W retire at the ensuing
Annual General Meeting and are eligible for re- appointment. They have
furnished a certificate to the effect that their proposed appointment,
if made will be in accordance with the limits specified under section
2240-B) of the Companies Act, 1956.
19. Auditors Report
The Auditors Report to the shareholders does not contain any
qualification.
20. Acknowledgements
Your Directors would like to express their sincere appreciation to the
Financial Institutions, Banks, Central and State Governments and the
Companys valued investors for their continued co-operation and
support.
Your Directors also take this opportunity to acknowledge the dedicated
efforts made by workers, staff, and officers at all level for their
contribution to the success achieved by the Company.
For and on behalf of the Board of Directors
AJIT GULABCHAND
Chairman & Managing Director
Registered Office:
Hincon House
Lai Bahadur Shastri Marg
Vikhroli (West)
Mumbai-400 083
Place: Mumbai
Dated: April 30, 2010