Srei-Infra-2008-2009
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Srei Infrastructure Finance Limited SOLID & LIQUID Annual Report 2008-09 Srei Infrastructure Finance Limited Registered Office: ‘Vishwakarma’, 86C, Topsia Road (South) Kolkata - 700 046 Annual Report 2008-09 www.srei.com Srei Infrastructure Finance Limited Board of Directors Salil K. Gupta Hemant Kanoria Sunil Kanoria Chief Mentor Chairman & Managing Director Vice Chairman Saud Ibne Siddique K. K. Mohanty V. H. Pandya Joint Managing Director Wholetime Director S. Rajagopal Daljit Mirchandani Somabrata Mandal S. Chatterjee Chief Financial Officer Company Secretary Auditors Sanjeev Sancheti Sandeep Kr. Lakhotia Deloitte Haskins & Sells Chartered Accountants Registered Office ‘Vishwakarma’ 86C, Topsia Road (South) Kolkata - 700 046 Tel: +91 33 2285 0112-0115 / 0124-0127 +91 33 3988 7734 Fax:+91 33 2285 7542 / 8501 E-mail: [email protected] Website: www.srei.com Forward looking statements This report contains forward looking statements, which may be identified by their use of words like ‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company’s strategy for growth, product development, market position, expenditures and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company’s actual results, performance or achievements could thus differ 1 billion = 100 crore materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify 1 million = 10 lakh or revise any forward looking statement, on the basis of any subsequent developments, information or events. Annual Report 2008-09 CONTENTS Corporate preface 2 Vision, mission and core values 4 Chairman & Managing Director’s message 6 Infrastructure opportunity 12 Project financing 16 Value intangibles 18 Infrastructure development 20 Equipment financing 22 Equipment financing - Minimising NPAs 24 Equipment financing - Manufacturer partnership 26 Rural infrastructure 28 Financial allies 30 Entrepreneurial mindset 34 Value innovation 36 Group structure 38 Infrastructure report 42 Analysis of our financial statements 52 Mapping risks – Managing uncertainties 56 Directors’ profile 60 Directors’ report 62 Report on corporate governance 88 Shareholders’ information 97 List of promoters 105 Auditors’ report and financial statements 107 Consolidated financial statements 141 Promoters’ stake Foreign holding Team strength Srei Infrastructure Finance 30.02% 41.48% 1,083 Limited. A holistic infrastructure institution fuelling India’s growth story History Starting operations in 1989, Srei is a leading infrastructure- focused private sector Non Banking Finance Company (NBFC) in India with total assets worth Rs. 10,367 crore under management Srei is currently the only institution in India offering holistic infrastructure solutions – financing, advisory services and development Over the years Total Consolidated Consolidated assets under net worth book value 1989 1992 1997 management Started operations Initial Public IFC, FMO and Rs. Rs. Rs. and identified the Offering with listing DEG invested as 10,367 1,141 98.20 infrastructure on all major stock strategic equity Crore Crore per share sector as its core exchanges partners business area The figures above are as on 31st March, 2009. 2 Annual Report 2008-09 Services Presence Infrastructure Equipment Financing & Leasing Headquartered in Kolkata (India), the Company has 63 offices in India and three offices in Russia Infrastructure Project : Financing, Advisory Services and Development Listed on Calcutta, Bombay, National Stock Exchanges and London Stock Exchange Insurance Broking Venture Capital Capital Market Sahaj e-Village Quippo - Equipment Bank 2002 2004 2005 2006 2007 2008 Conceived All India First Indian Geographical Joint venture Holistic Quippo, India’s presence, NBFC to be expansion into with BNP Infrastructure first equipment currently 63 listed on the Russia; equity Paribas Lease Institution – bank offices London Stock partners EBRD, Group, 100% financing, Exchange DEG and FMO subsidiary of advisory BNP Paribas services and development 3 VISION To be the most inspiring global infrastructure financial institution MISSION To be an Indian multinational company providing innovative infrastructure financial solutions with focus on equipment, projects and renewable energy 4 Annual Report 2008-09 CORE VALUES Customer partnership accordingly provides them the best possible work environment and treats At Srei, customer satisfaction is the them like family members. The benchmark for success. Srei delights its Company rewards excellence and customers through a comprehensive initiative. range of financial services that are personalised, fast, reliable, convenient, Stakeholder value quality-driven, and yet cost-effective. enhancement Integrity Srei is committed to earning the trust and confidence of all its stakeholders. Business integrity is a way of life at Its growth focus, the ability to constantly Srei. The Company strongly stands by enlarge its product basket while integrity in all its dealings and ensures controlling risk and reducing the cost of strict adherence to the highest its services have resulted in enhanced standards of business ethics. value for its stakeholders. Passion for excellence Professional Srei’s passion for excellence is entrepreneurship instrumental in positioning the Srei’s in-depth knowledge of the Company as the most innovative infrastructure financing business in infrastructure solution provider in India. India, coupled with its spirit of Respect for people entrepreneurship, helps the Company to overcome obstacles and complexities Srei acknowledges the fact that its with professional expertise. people are its most valuable assets and 5 CHAIRMAN & MANAGING DIRECTOR’S MESSAGE We are glad that one of the sanguine that India is out of the developed countries, most difficult and tumultuous the global gloom and is now has had less impact on years in the history of our the new torchbearer of the India, primarily due to its Company is over and we world economic revival. The sound policies and robust have stepped, with hope, in financial crisis that has regulations that have a year, again promising a ravaged the world economy weaved India’s financial bright future for Srei. We are and shaken to its very roots system. 6 Annual Report 2008-09 2008-09 will be remembered as one of the most eventful years in the history of most companies. However, Srei will remember it as a period of self-discovery – a year when the Company re-learnt its way of doing business and in the process actually became aware of many of its latent strengths. The credit goes to our storm, but emerged from it respected institutions in recovery process faster. Government and the much stronger and mostly infrastructure sector today. Even a slight hint of Reserve Bank of India that unscathed. The credit recovery in some of the 2008-09 will be they reacted with alacrity in should go to the dedicated macro indicators was remembered as one of the preventing the financial and sincere effort of the construed as the onset of most eventful years in the contagion to plague our team at Srei who worked growth revival. The mention history of most companies. country’s economy, last relentlessly towards of ‘green shoots’ was However, Srei will year in October. The steering the Company out almost everywhere even a remember it as a period of liquidity crisis was avoided of turbulent water. The Srei couple of months back. self-discovery – a year by immediate measures team realised that giving in However, with little when the Company taken towards reducing to panic and following herd evidence of actual growth re-learnt its way of doing CRR and SLR with banks, mentality in resorting to recovery from the real business and in the process so that there were sufficient drastic steps would only be economy, the ‘green shoot’ actually became aware of funds within the system. damaging. Instead they put euphoria seems to have many of its latent strengths. Stimulus packages, policy on their thinking caps and subsided. Indicators from The Annual Report for the changes and many other innovatively addressed the USA, Europe, Japan and year ended 31st March, steps were proactively problem by taking all Srei other developed nations 2009 is a testament to that taken to restore confidence partners namely customers, seem to say that those indomitable Srei spirit. in the economy. To a large suppliers, financial economies are definitely extent it has facilitated institutions, government ECONOMIC not out of the woods. The Indian economy to and investors, into OUTLOOK earlier notion of a U-shaped resiliently bounce back, but confidence. The entire or even V-shaped recovery Governments across the it will, realistically, still take team, being clearly is no longer entertained. In world intervened with some time to completely intimated to dispel any job fact, a W-shaped recovery monetary and fiscal get back to normalcy. or emolument-related now looks more probable. measures to tide over the worry, had thrown its full Srei, being in the business financial crisis in their The Indian government too weight behind the of financing, was