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20Th Annual Report 2008-2009 a Nation Dreams

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20Th Annual Report 2008-2009 a Nation Dreams SADBHAV ENGINEERING LIMITED 20th Annual Report 2008-2009 A Nation Dreams Physical infrastructure has a direct bearing on sustainability of growth and overall development. The economic miracle of the high-growth Asian economies was accompanied by substantial investments in infrastructure. Evidence also suggests that creation of infrastructure, through its direct and indirect effects, has a significant impact on poverty reduction. In the Indian context, though there has been some improvement in infrastructure development in transport, communication and energy sectors in recent years, there are still significant gaps that need to be bridged. The current economic slowdown provides an opportunity for countries like India that have a substantial degree of unmet infrastructure requirements. “SADBHAV” losZ HkoUrq lqf[ku% losZ lUrq fujke;k% A Identifying with losZ Hkækf.k i’;Urq ek df’pn~ nq%[kekIuq;kr~ AA human happiness Let all be happy, let all be healthy, let there be goodness all around without misery to mankind. 01 MINING Deep trust 02 IRRIGATING Positive values 04 BUILDING with high hopes 10 Financial Highlights 11 Corporate Information 12 From the Chairman’s Desk 15 Stepping Stones 16 National Footprint 17 Notice 27 Directors’ Report 32 Report on Corporate Governance 39 Management Discussion & Analysis 42 Auditors’ Report 46 Financial Statements 66 Statement Pursuant to Section 212 68 Consolidated Financial Statements 87 Attendance Slip and Proxy form CONTENTS SADBHAV ENGINEERING LIMITED Ask not what your Country can do for you, But what you can do for your Country. - Abraham We join hands with Lincoln the Nation in realising dreams. Over the years we have : MINED – Deep trust, IRRIGATED – Positive values & BUILT – With high hopes Established in 1988, today Sadbhav Engineering Limited has emerged as a force to reckon with in the field of Infrastructure development like, MINING roads & highways, bridges, irrigation and mining operations. Through our journey of success the company has metamorphosed Deep trust with each project, as each one was a learning experience. Slowly, but steadily Sadbhav grew, building a strong reputation of quality and on time execution. Today Sadbhav has successfully mined deep trust in the hearts of its customers, stakeholders and employees by building and maintaining a loyal professional relationship. The Relationship Continues... SADBHAV ENGINEERING LIMITED Annual Report 2008-2009 01 IRRIGATING Positive Values Our dynamic business model, teamwork and leadership will ensure our long term sustainability. 02 Sadbhav is a company managed by professionalism and guided by a strong family spirit. Each member of the Sadbhav family is the driving force and plays a pivotal role in shaping its destiny and expanding its horizons. In order to match strides with the ever-changing technology, we at Sadbhav ensure that our people stay in step and in tune with the latest innovation in our industry. Our strong team of Professionals, nurture our people by irrigating positive values of excellent teamwork and effective co-ordination, thereby creating a pleasant work environment. Together we carry the company towards a brighter future. Our People - Our Driving force SADBHAV ENGINEERING LIMITED Annual Report 2008-2009 03 BUILDING With high hopes India has an extensive road network of 3.3 million Kms- the second largest in the world. Roads carry about 61 % of the freight and 85 % of the passenger traffic. Highway/Expressways constitute about 66,000 Kms (2 % of All Roads) and carry 40 % of the road traffic. The Government of India spends about Rs.18,000 Crores (US$ 3.7 billion) annually on road development. It is planning to increase spends on road development substantially, with funding already in place. An Annual Growth in this sector is projected at 12-15 % passenger traffic, and 15-18 % for cargo traffic. The ambitious National highway development Project (NHDP) of the Government of India is at an advanced stage of implementation. Key sub-projects under the NHDP include: • Developing 1000 km of expressways and widening 20,000 km of national highways to two lanes. • Developing 8,737 km of roads (including 3,846 km of national highways) in the North East. • Four-laning 20,000 km of national highways and 6,736 km on North-South and East-West corridors. • Six-laning 6,500 km of the Golden Quadrilateral and selected national highways. The Rs. 41,200 Crores (US $ 5 billion) project plans to lay 6 lane roads over 6,500 Kms of National Highways on the Design Build Finance and Operate(DBFO) basis – in Golden Quadrilateral and other high traffic stretches. 04 Today we are the 5th Largest Road BOT Developer The rapid construction of highways We at Sadbhav see massive opportunity in the emerging scenario. facilitates human and material movement With our experience and expertise, we feel confident about handling across the country. Apart from improving the challenge and doing our best for the nation. Sadbhav has successfully connectivity, the development of executed several projects for National Highway Authority of India (NHAI) and various state Governments. We can state with pride that we have secondary and tertiary roads can open also worked with industry stalwarts like, L&T, HCC, Punj Lloyd & Gammon. up hitherto unconnected regions to trade The work largely comprised of constructing, widening & strengthening and investment and step up access to of roads & highways. During the year 2008-09 around 72% of the goods, services and employment Company's revenue comes from this sector and our current bid capacity opportunities. is more than Rs. 29,000 mn for NHAI projects. Sadbhav Infrastructure Projects Limited (SIPL), 100% subsidiary of Sadbhav Engineering Limited, was floated to focus on the infrastructure projects, operation and maintenance of the same. It has participated aggressively in the BOT opportunity in the road sector with Rs. 2.2 trillion PPP road infrastructure space, understood it and equipped itself Building Roads with relevant capacity to execute it on time. It has chosen to adopt an to integrated approach of developing & constructing road projects and believes in minimal sub-contracting. Currently 6 BOT projects are in Success SIPL’s kitty out of which 2 are under operation and 4 are under implementation. We have not only participated in equity but also executed a significant portion of the EPC (engineering, procurement Awarded- first of its kind Border Check Post BOT Project (MBCPNL) and construction) contracts. Today with Sadbhav's ongoing projects on Roads & Highway comprising of Rs. 29,928 mn, we look forward to Awarded MP-Dhule BOT Project (DPTL) building with high hopes. SADBHAV ENGINEERING LIMITED Annual Report 2008-2009 05 • Globally India is the largest producer of sheetmica, the third largest producer of coal, the fourth largest producer of iron ore, and the fifth largest producer of bauxite. It also hosts significant reserves of copper, zinc, gold and about 26 other metallic and minor minerals. • The Indian Mining sector is largely state dominated but the government is seeking a phased withdrawal of its participation, from the non strategic metal sector in order to encourage private players to take centre stage. With a vision to think beyond and look within, Sadbhav's • Mining accounts only for 2% of India’s GDP as compared to 4.5% to 7 % of other relationship with mining began with excavation operations for mining economies. companies such as Gujarat Heavy Chemicals Ltd., Gujarat Mineral • The new Mining Policy introduced last year allowed 100% foreign direct Development Corporation, Gujarat Industries Power Company Ltd., investment in the mining sector. Northern Coalfields Ltd. and Western Coalfields Ltd. In addition to • The cabinet also approved the setting up of an independent dispute resolution this the company has submitted bids, mainly to the Coal India & its tribunal to be known as the Mining Administrative Apellate Tribunal which subsidiaries, which is worth Rs. 75,000 mn. is expected to be a clear boon to this sector. • The Government is taking active steps Our ongoing projects total to a worth of about Rs. 105 mn cubic to encourage foreign investment in the meters. They range from excavation of over burden to removal of mining sector with the investment target of 2007 - 2009 pegged at USD 22.37 bn. lignite and coal. From workers to engineers, from the smallest to • Between 2008- 2013, BMI forecasts the the largest equipment, all at Sadbhav, have come a long way and are sector will grow by a compound annual growth rate of 9.75 % reaching a total marching towards positive growth in the field of mining. value of USD 47.12 bn. • Significant opportunity exists due to opening up of coal blocks to private players to undertake contract mining. Mining Earth for Values 06 Mining has been a major part of Sadbhav’s mission SADBHAV ENGINEERING LIMITED Annual Report 2008-2009 07 • Per capita availability of water has decreased from 5000 cubic meters in 1947 to about 2000 cubic meters. • Per capita storage capacity in India is only 210 cubic meters which is significantly lower than countries like US(1964 cubic meters), China(1111 cubic meters) and Brazil (3145 cubic meters). • The average yield rate of food grains in India is about 2.5 tones per ha in irrigated command and amounts to 1 tone per ha in rain-fed areas. • 85% of the people in the rain-fed areas in India are engaged in agriculture (65% of the total population). • The NCIWRD estimates that total demand for water by 2050 will be 973 bcm in a worst-case scenario and 1180 bcm in a blue-sky scenario. Irrigation will account for 69% of the water use. • Today the Government allocation under Accelerated Irrigation Benefit Programme (AIBP) has been increased by 75% over B.E. 2008-09 and under Rashtriya Krishi Vikas Yojana (RKVY) stepped up by 30% in B.E.
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