Independent Auditor's Certificate on Corporate
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Water Annual Report 2016-17 CORPORATE OVERVIEW 01 Corporate Information 06 Global Water Experts 08 Key Performance Indicators 09 Awards 10 Chairman’s Message GLOBAL WATER EXPERTS 06 12 MD’s Message 14 Nurturing Passion 16 Building Customer Relationships 18 Investing in Technological Innovation 20 Creating global synergies 22 Focusing on efficiencies 24 Business Clusters 28 Being Positively Responsible BUSINESS 30 Ten Year Financials CLUSTERS 24 STATUTORY REPORTS 32 Board’s Report 66 Management Discussion and Analysis 84 Report on Corporate Governance 100 Business Responsibility Report FINANCIAL STATEMENTS BEING POSITIVELY RESPONSIBLE 28 112 Standalone Financials 175 Consolidated Financials 251 Notice Forward-looking statement In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events or otherwise. The Board B D Narang Rajiv Mittal Chairman Managing Director and Group CEO Jaithirth Rao Malay Mukherjee Sumit Chandwani Revathi Kasturi S Varadarajan Independent Independent Independent Independent Director and Chief Director Director Director Director Growth Officer Corporate Information Secretarial Auditor M. Damodaran Practicing Company Secretary Membership No. 5837 M. Damodaran & Associates No. 6, Appavoo Gramani 1st Street, Mandaveli, Chennai - 600 028 P: +91- 44 - 4360 1111 Parthasarathy Gopalan Pankaj Sachdeva R Swaminathan Registrar and Transfer Agents Chief Financial Officer CEO India Cluster Company Secretary Karvy Computershare Private Limited Unit: VA TECH WABAG LIMITED “Karvy Selenium Tower B”, Plot Nos. 31 & 32, Financial District, Nanakramguda Gachibowli, Hyderabad - 500 032 Registered & Corporate Office Internal Auditors P: +91- 40 - 6716 2222 ‘WABAG HOUSE’ M/s. PKF Sridhar & Santhanam LLP No.17, 200 Feet Chartered Accountants Bankers Thoraipakkam - Pallavaram Main Road KRD Gee Gee Crystal, No. 91-92, Axis Bank Sunnambu Kolathur, Chennai - 600 117 7th Floor, Dr. Radhakrishnan Salai, Canara Bank P: +91- 44 - 3923 2323 Mylapore, Chennai - 600 004 Export Import Bank of India P: +91 - 44 - 2811 2985 HDFC Bank Statutory Auditors HSBC Walker Chandiok & Co LLP Cost Auditor ICICI Bank Chartered Accountants S. Chandrasekaran IDBI Bank th 7 Floor, Prestige Polygon, Practicing Cost Accountant IndusInd Bank 471, Anna Salai, Teynampet, Membership No. 4784 Kotak Mahindra Bank Chennai - 600 018 4 Sreshta, 57 Subramaniam Street Punjab National Bank P: +91- 44 - 4294 0000 Abhiramapuram, Chennai - 600 018 Societe Generale Bank P: +91 - 44 - 2499 0286 Standard Chartered Bank State Bank of India YES Bank Water Positive 2 4 billion people comprising 66% of the global population, face severe water crisis for at least one month of the year. The crisis, triggered by limited water availability, is being aggravated by mismanagement of water resources. Poor water management infrastructure has emerged as a major cause for the alarming depletion of the renewable fresh water resources and groundwater. From 13,390m3 of renewable internal fresh water resources per capita in 1962 to 5,926m3 at present, global water resources are depleting at incomprehensible pace. With rising population and ever-increasing demand for water, the situation from here is expected to worsen. The world is getting water negative. ANNUAL REPORT 2016-17 As a leading pure-play water Central & Eastern Europe, we are 3 Company engaged in providing working closely with the municipal Corporate comprehensive and cost-effective and industrial segments to offer Overview water solutions to the water negative technological solutions to overcome world, we focus on addressing the water problems. challenges through our technology, competencies and intellectual capital. With robust investments in research & development and passion for Focussed on the emerging and innovation, we are capable of developing regions of South handling water EPC projects of any East Asia, Africa, Middle East, scale across any technology, sector India, Latin America (LATAM) and or region. At WABAG, we are Focussed, Committed and Determined To make the world… water positive. Polatli WWTP, Turkey In existence for over nine decades, VA Tech WABAG is a leading global water technology Company. It offers a wide range of solutions focussed on conservation, optimisation, recycling and reuse of water resources to address water challenges across the world. The Company has a growing presence in more than 20 countries across four continents, most of which are emerging markets facing severe water crisis. Water Positive 6 Global Water Experts PRESENCE Headquartered in Chennai (India) Presence in India, South-East Asia, Africa, the Middle East, LATAM and Europe, through subsidiaries, associates and a joint venture R&D centres in Switzerland, Austria and India International Engineering Centres in Pune and Vadodara (India) CERTIFicaTIONS ISO 9001:2008 for quality ISO 14001 for environment OHSAS 18001 for operational health and safety WABAG’s contribution to a water positive world VISION MISSION 21,700 million litres/day To be a professionally managed Provide total water solutions to our Estimated clean water Indian Multinational having market valued customers. produced by WABAG in leadership in emerging markets Ensure our strong, capable, agile and significant position in the and customer-focussed team the last two decades global market both in the EPC and delivers to customers, creative service sector of water business solutions at competitive prices Encourage and practice a culture of and within agreed timeframe with 31,000 million care, trust and continuous learning, essence of quality at optimum cost litres/day while meeting expectations of Deep concern for employee employees, stakeholders and welfare and do everything to Estimated waste society attract and retain best talents water treated by WABAG Encourage WABAGites to be an innovative, entrepreneurial and in the last two decades empowered team committed to total customer satisfaction and value creation ANNUAL REPORT 2016-17 7 Corporate Overview POSITIVE SOLUTIONS FOR A WATER POSITIVE WORLD Water reclamation plants for recycling and reuse of Recycle industrial and municipal water and reuse Build plants for converting sea and brackish water Recreate into potable water and / or industrial water Sustainable/ Water Positive World Provide operations and maintenance to ensure sustainability of water and wastewater treatment Preserve plants Existing water resources and power (generated from Conserve biogas in Sewage Treatment Plant) WABAG’s EPC solutions WABAG’s Operations & Sectors catered to Maintenance solutions Drinking water treatment Maintenance Municipal Drinking Water and Municipal wastewater treatment Provide technical team Wastewater Industrial and process water Supply chemicals, consumables Oil & gas treatment and spares Power Industrial effluent treatment Major and minor repairs Fertiliser Desalination (sea water and Equipment replacement Steel brackish water) Plant refurbishment Food and beverages Recycling (industrial and Life cycle solution Chemicals municipal wastewater) Sludge treatment and sludge management Water Positive 8 Key Performance Indicators Order book Revenue from operations EBITDA (` in Crore) (` in Crore) (` in Crore) 3,208 7,328 298.10 7,308 2,508 5,439 2,435 236.30 5,354 209.47 2,239 188.50 4,284 154.02 1,619 12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 15-16 16-17 Profit before tax Profit after tax Dividend (` in Crore) (` in Crore) (`) 178.90 113.35 4 4 4 4* 110.10 167.10 166.20 102.40 157.10 3.5 88.73 90.34 135.19 12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 15-16 16-17 * Dividend recommended by the Board Market capitalisation Earnings per share of Directors (` in Crore) (`) 4,449 21.31 20.39 18.82 3,718 17.04 16.31 2,825 2,082 1,327 12-13 13-14 14-15 15-16 16-17 12-13 13-14 14-15 15-16 16-17 2015-16 and 2016-17 numbers are as per Ind AS ANNUAL REPORT 2016-17 9 Awards Corporate Overview 1. Best Water Technology Company of the Year by Water Digest 2. Business Leader of the Year – Water 1 2 Management Corporate Leadership and Excellence Award 2017 by Chemtech Foundation 3. TiE Chennai awarded Swachh Bharat (Corporate) 4. D&B Best Infra Project Award for Nemmeli SWRO Desalination Plant 5. BT CSR Excellence 3 4 Award 2016 – Environmental Sustainability 6. IEI Industry Excellence Award 2016 at 31st Indian Engineering Congress held at Kolkata 5 6 Water Positive 10 Chairman’s Message On the Government front, the historic launch of Sustainable Development Goals, the collective agreement among nations at the COP (Conference of Parties) 21 summit and the first-ever official debate on water at the United Nations have put the spotlight on the need to share water DURING THE as a collective resource. YEAR, WE ALSO DEMONSTRATED Further, Governments across the OUR LEADERSHIP globe are focussing on developing IN THE OIL & inclusive policies to ensure that water GAS sector infrastructure and services reach all BY BAGGING A sections of the society, particularly in the PRESTIGIOUS emerging economies, which are bearing LARGE contract the brunt of the problem.