Towards consolidation
LANCO Infratech Limited ANNUAL REPORT 2011-12 Contents
Statutory Standalone Consolidated Reports Financial Financial Statements Statements 01 Corporate Information 53 104 Auditors’ Report Auditors’ Report 03 Year at a Glance 58 106 Balance Sheet Balance Sheet 04 Directors’ Report 59 107 Statement of Profit and Loss Statement of Profit and Loss 12 Management Discussion 60 108 and Analysis Cash Flow Statement Cash Flow Statement 38 62 110 Report on Corporate Notes Notes Governance Lanco is a leading EPC player in India now with global footprints. 25 years ago, we started as a small construction company. Much has changed since then. Today, we have transformed ourselves and emerged as a large, integrated infrastructure enterprise. We have fortified our organisation to meet the most daunting challenges, and leverage opportunities that present themselves in the years to come. However, a few things remain exactly how they were when we began. Our passion for progress and zest for evolution, for instance. Also, our ability to imbibe sophisticated processes, operational abilities and skills. Our fundamental approach remains simple. Combining the best technology and the greatest human talent to create world-class ‘concept to commissioning’ solutions that empower lives. 2011-12 represented another step towards our vision and ability to adapt in a dynamic environment and realign ourselves. We bagged our first international EPC order in the Middle East. We commenced the construction of the metro rail projects in Chennai and Delhi. We were awarded three projects to build transmission lines for Power Grid Corporation of India Limited (PGCIL). Our thermal power plants performed well. And, we commissioned 94 MW of capacity in the Solar Power segment.
An eventful year. A momentous journey. A firm step towards consolidation. A passionate start, a progressive transformation
Lanco’s operations, in its initial years, were primarily focused on mere construction activities. However, the opening up of India’s power sector gave a huge impetus to the infrastructure sector in India. Leveraging this opportunity, Lanco developed its capabilities across the EPC value chain – right from engineering to procurement and construction.
Pure passion for progress and evolution is what enabled us to gradually emerge as a large, integrated infrastructure enterprise. We now operate across a synergistic span of verticals across power, engineering and infrastructure projects. We have developed solid competencies, operational abilities and skills to execute large scale projects in the infrastructure sector.
Today, EPC is the backbone of Lanco. It combines the best technology and the greatest human effort to create world-class ‘Concept to Commissioning’ solutions for our customers. Business Verticals
ENGINEERING PROCUREMENT AND CONSTRUCTION (EPC)
POWER
SOLAR
NATURAL RESOURCES
INFRASTRUCTURE EPC-thermal
Progress Projects under execution Post the completion of Amarkantak I and II projects, Lanco’s 1320 MW first successful EPC project, the Company became the Coal based thermal power plant (Amarkantak) successful bidder in many projects and executed many of them. 1320 MW Strengths Coal based thermal power plant (Babandh) Fast-track execution 1320 MW Timely and quality deliverables in a cost-effective manner Coal based thermal power plant (Vidarbha) Strong in-house engineering team capable of conducting 1980 MW pre-award and review engineering with complete Thermal power plant (Koradi) systems integration 1200 MW Best practices and process benchmarking, as per Thermal power plant (Moserbaer) international standards 600 MW Excellent relationships with vendors & equipment Imported coal based thermal power plant (Udupi) suppliers / agencies 732 MW Project Portfolio Gas based power plant (Kondapalli) Projects already executed 250 MW 366 MW Gas based power plant (Akaz, Iraq) Combined cycle gas based power plant (Kondapalli) 600 MW Imported coal based thermal power plant (Udupi) 1200 MW Coal based thermal power plant (Anpara) EPC-hydro
Progress Project Portfolio Lanco forayed into the vast and untapped potential of the hydro Projects already executed power sector. We emerged as a hydro-electric project company through the construction of small hydro projects. Gradually, we also moved into the construction of large hydro-electric power 4 X 5 MW Small Hydro projects. Successfully completed four 5 MW hydro projects and one 70 MW Budhil hydro project. 70 MW Strengths Hydro Power Plant (Budhil) Expertise in design and erection of large-sized radial gates, stop logs and other Hydro-Mechanical (HM) Projects under execution components of hydro projects Ability to execute hydro-power projects of any size and complexity across geographies 76 MW Hydro power plant (Phata) Integrated team of Designers, Hydrologists, Geologists, Construction Managers, Project Managers, Business Development Managers, O&M experts, Innovation 500 MW experts, HR & Finance experts Hydro power plant (Teesta) EPC- infrastructure
Progress Milestone projects Construction projects being its base, infrastructure Chennai Metro development emerged as a natural progression for Lanco. This Delhi Metro Power Grid Corporation of India Limited – 345 KM of 765 involved the execution of large civil and urban infrastructure KV and 85 KM of 400 KV transmission line projects. Roads, highways, ports, airports, railway lines, Toyo Engineering / Indian Oil Corporation Limited – institutional and commercial buildings are some of the projects Refinery works falling under this domain. Lanco successfully completed two IL&FS Water Limited – 100 KM water pipeline along with road projects near Bengaluru. water treatment system Strengths Project Portfolio Dedicated engineering design support teams across business Projects already executed verticals for value engineering and construction methods Extensive experience in civil and construction work using the latest technology in civil construction 82 km Technology tie-ups/joint venture relationships with Neelamangla Junction (Bangalore) – Devihalli (NH-48) international majors across businesses Shortlisted and bid for large projects such as Dedicated Freight Corridor Corporation, DMRC, Italcementi, SAIL etc. 81 km Solar Bangalore – Hoskote – Mulbagal (NH-4) Lanco has entered the sunrise industry of solar power generation. Lanco set up an integrated model in solar power Projects under implementation generation starting from poly silicon manufacturing to solar power plant establishment. It successfully executed solar PV power projects of 94 MW as a Developer and a EPC contractor 238 km and is also in the process of executing 300 MW solar thermal Toll road between Kanpur and Aligarh (NH 91) and solar PV projects as a Developer and a EPC contractor. Aiming higher! Opportunities in sight With opportunities in the infrastructure segment Government of India envisaged growing by leaps and bounds, Lanco’s EPC business is moving ahead with great zeal and passion. $1 trillion investment in the infrastructure sector for the 12th Five Year Plan As a first step towards this move, we recently integrated our existing businesses – EPC India’s expected energy demand of Thermal, EPC Hydro and Construction – into a single business. With this, we emerged as an integrated infrastructure enterprise engaged 1392 Terawatt hours in EPC operating across a span of verticals. We by 2016-17, with a peak demand of 218 GW, requires an have firm plans to expand each of these individual additional capacity of 135 GW to satiate the projected businesses further, and eventually, emerge as an demand. ` 80,000 Crore infrastructure company by the end of this decade. huge highway The consolidated entity enables us to leverage our 35,000 km development opportunity for private sector inherent strengths and sophisticated processes in the EPC business in the energy sector. It propels us to efficiently tap the unprecedented potential in other infrastructure sectors as well, globally. Besides these, our solar and natural resources verticals also provide a further impetus to the overall growth of our Group’s business. Board of Directors
Mr. L. Madhusudhan Rao Mr. G. Bhaskara Rao Mr. L. Sridhar Mr. G. Venkatesh Babu Executive Chairman Executive Vice - Chairman Vice - Chairman Managing Director
Mr. S. C. Manocha Dr. Pamidi Kotaiah Mr. P. Abraham Dr. Uddesh Kumar Kohli Deputy Managing Director Director Director Director
Dr. B. Vasanthan Mr. R. Krishnamoorthy Director Director Corporate Information
BOARD OF DIRECTORS Mr. L. Madhusudhan Rao - Executive Chairman Mr. G. Bhaskara Rao - Executive Vice - Chairman Mr. L. Sridhar - Vice - Chairman Mr. G. Venkatesh Babu - Managing Director Mr. S. C. Manocha - Deputy Managing Director Dr. Pamidi Kotaiah - Director Mr. P. Abraham - Director Dr. Uddesh Kumar Kohli - Director Dr. B. Vasanthan - Director Mr. R. Krishnamoorthy - Director
CHIEF OPERATING OFFICER FINANCE Mr. T. Adi Babu
EXECUTIVE DIRECTOR & Mr. C. Krishnakumar COMPANY SECRETARY
AUDITORS S. R. Batliboi & Associates Chartered Accountants Golf View Corporate Tower-B Sector-42, Sector Road Gurgaon- 122 002 Haryana, India
Brahmayya & Co. Chartered Accountants 48, Masilamani Road Balaji Nagar, Royapettah Chennai – 600 014 Tamil Nadu, India
REGISTERED OFFICE Plot No.4, Software Units Layout, HITEC City, Madhapur, Hyderabad – 500 081, Andhra Pradesh, India Phone: +91-40-4009 0400, Fax: +91-40-23116109 E-mail: [email protected] Website: www.lancogroup.com
CORPORATE OFFICE Lanco House, Plot No. 397, Udyog Vihar, Phase-3, Gurgaon-122 016, Haryana, India. Phone: +91-124-474 1000, Fax: +91-124-474 1878
1 LANCO Infratech Limited ANNUAL REPORT 2011-12
BANKERS AND FINANCIAL Allahabad Bank INSTITUTIONS OF THE COMPANY Andhra Bank Axis Bank Limited Bank of Baroda Bank of China Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank DBS Bank Dena Bank Deutsche Bank HDFC Bank Limited HSBC ICICI Bank Limited IDBI Bank Limited Industrial & Commercial Bank of China Indian Bank Indian Overseas Bank IndusInd Bank Limited Infrastructure Development Finance Company Limited ING Vysya Bank Limited Kotak Mahindra Bank Limited Lakshmi Vilas Bank Life Insurance Corporation of India National Bank of Iraq Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Srei Infrastructure Finance Limited Standard Chartered Bank State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of India State Bank of Mysore State Bank of Patiala Syndicate Bank Tamilnad Mercantile Bank Limited Tata Capital Limited The Catholic Syrian Bank Limited The Jammu & Kashmir Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank Yes Bank Limited
REGISTRARS & SHARE Link Intime India Private Limited TRANSFERS AGENT (Unit: Lanco Infratech Limited) C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400 078, Maharashtra, India Phone: +91-22-25946970, Fax: +91-22-25946969 Email: [email protected] Website: www.linkintime.co.in
2 Year at a Glance - Consolidated
` Lakhs Particulars 2011-2012 2010-2011 Change (%) Profit and Loss Account Gross Revenue 15,39,808 11,30,490 36 Less: Elimination of Inter Segment Revenue 5,11,151 3,26,078 57 Net Revenue 10,28,657 8,04,412 28 Profit Before Depreciation, Interest and Taxation (PBITDA) 1,84,860 2,15,199 (14) Depreciation and Amortisation 56,280 35,373 59 Profit Before Interest and Taxation 1,28,580 1,79,826 (28) Eliminated Profit on transactions with Subsidiaries 75,862 45,811 66 Profit Before Interest and Taxation Plus Elimination 2,04,442 2,25,637 (9) Interest and Finance Charges 1,05,385 75,767 39 Profit Before Taxation, Exceptional Item Plus Elimination 99,057 1,49,870 (34) Exceptional Item 11,643 - 100 Profit Before Taxation Plus Elimination 1,10,700 1,49,870 (26) Provision for Taxation (Including Deferred Tax and MAT Credit 22,462 38,496 (42) Entitlement) Profit After Tax (Before Minority Interest and Share of Profits from 88,238 1,11,374 (21) Associates) Share of Minority Interest 13,428 17,033 (21) Share of Profits / (Loss) from Associates (6,022) 261 (2,406) Profit After Tax (After Minority Interest and Share of Profits from 68,788 94,602 (27) Associates) Plus Elimination Prior Period Items 360 111 226 Elimination of Profit on Transactions with Subsidiaries and Associates 79,631 49,884 60 Profit After Tax (After Minority Interest and Share of Profits from (11,203) 44,607 (125) Associates) Cash Profit 1,37,802 1,21,768 13 Balance Sheet Share Capital 23,896 23,872 - Reserves & Surplus 4,46,709 4,38,441 2 Minority Interest 95,188 84,533 13 Net Worth Plus Minority Interest 5,65,793 5,46,845 3 Eliminated Profit on Transactions with Subsidiaries and Associates 1,51,292 84,195 80 (Cumulative) Net Worth Plus Minority & Elimination 7,17,085 6,31,040 14 Non Current Liabilities 26,96,692 15,59,249 73 Current Liabilities 15,78,885 8,13,580 94 Non Current Assets 37,48,421 21,49,698 74 Current Assets 10,92,950 7,69,977 42 Cash Flow Statement Cash from Operating Activities before Elimination 4,18,467 3,26,145 28 Key indicators Earning Per Share (in `) Basic (0.48) 1.92 (125) Diluted (0.48) 1.90 (125) No. of Employees 7,914 6,761 17
3 LANCO Infratech Limited ANNUAL REPORT 2011-12
Directors’ Report
4 5 STATUTORY REPORTS STANDALONE FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS
To The Members
Your Directors have pleasure in presenting the Nineteenth Annual Report on the Business and Operations of the Company together with the Audited Accounts for the year ended March 31, 2012.
FINANCIAL RESULTS ` Lakhs CONSOLIDATED STANDALONE Year Ended March 31 Year Ended March 31 2012 2011 2012 2011 INCOME Revenue from operations and other income 10,28,657.33 8,04,411.55 8,66,924.77 5,91,514.71 Profit Before Taxation 34,838.31 1,04,058.43 10,626.40 42,031.59 Provision for Taxation 22,462.24 38,495.90 (940.84) 14,200.00 Net Profit after Taxation 12,376.07 65,562.53 11,567.24 27,831.59 Less: Prior period items 360.34 110.67 Add: Share of Profit/(Loss) of Associates (6,021.81) 261.16 Less: Elimination of Unrealised Profit on Transactions with Associate Companies 3,768.96 4,073.48 Less: Share of Minority Interest 13,428.43 17,032.65 Net Profit/ (Loss) after Taxation, Minority Interest and Share of Profit/ (Loss) of Associates (Balance Carried to Balance Sheet) (11,203.47) 44,606.89 11,567.24 27,831.59 Surplus brought forward 1,61,417.24 1,19,810.35 1,35,007.92 1,07,176.33 Profit Available for Appropriation 1,50,213.77 1,64,417.24 1,46,575.16 1,35,007.92 Transfer (from)/to Capital Redemption Reserve 1,677.32 0.00 Transfer to General Reserve 2,803.75 3,000.00 Premium paid on buy back of shares by a subsidiary 179.28 0.00 Proposed Dividend and Dividend Distribution Tax 1.86 0.00 Balance Carried to Balance Sheet 1,45,551.56 1,61,417.24 1,46,575.16 1,35,007.92
DIVIDEND while the same was ` 2,15,198.62 Lakhs for the Previous As a measure of prudence and with a view to conserve Year i.e. a decrease of 14%. The Profit Before Taxation stood resources for funding the business plans of the Company, at ` 34,838.31 Lakhs, a decrease of 66% as compared to no dividend on the Equity Shares for the year ended ` 1,04,058.43 Lakhs in the Previous Year. March 31, 2012 was recommended. The Net Profit/(Loss) after Tax after adjustment of OPERATIONS REVIEW Minority Interest and Share of Profits of Associates was On a Consolidated basis your Company has reported ` (11,203.47) Lakhs as against ` 44,606.89 Lakhs for the Gross Revenues of ` 10,28,657.33 Lakhs as against Previous Year. ` 8,04,411.55 Lakhs of Revenues registered in the Previous Gross Interest and Finance charges on consolidated Year. Total Expenditure for the Year was ` 10,05,462.19 basis amounted to ` 1,05,385.10 Lakhs in comparison to Lakhs as against ` 7,00,353.12 Lakhs in the Previous ` 75,766.78 Lakhs due to increase in loans and Working Year. The Earnings Before Interest, Tax, Depreciation and Capital Requirements for Project Execution. Amortisation (EBITDA) amounted to ` 1,84,859.78 Lakhs
4 5 LANCO Infratech Limited ANNUAL REPORT 2011-12
A detailed discussion on the results of the operations and Limited, Lanco Solar International GmbH, Lexton Trading the financial condition is included in the Management (Proprietary) Limited, Solar Fi SP 06, Solar Fi SP 07, Tiper Discussion and Analysis section placed at Annexure-IV to Solaire SAS. this report. The names of the following Subsidiaries have been changed: BUSINESS REVIEW Diwakar Solar Projects Limited (earlier Diwakar Solar A detailed business review is being given in the Management Projects Private Limited), Lanco Amarkantak Power Limited Discussion and Analysis Section of the Annual Report placed (earlier Lanco Power Limited), Lanco Power Limited (earlier at Annexure-IV to this report. Lanco Power Private Limited), Lanco Solar Power Projects Private Limited (Earlier Caliban Trading Private Limited), SUBSIDIARY COMPANIES Mahatamil Mining and Thermal Energy Limited (Earlier The following Companies have become Subsidiaries of the Lanco Mining and Thermal Energy Limited), Lanco Thermal Company: Power Limited (Earlier Vamshi Industrial Power Limited), Emerald Orchids Private Limited, Helene Power Private Lanco Hydro Power Limited, (Earlier Lanco Hydro Power Limited, Lanco Solar Power Projects Private Limited, Private Limited), Lanco IT P.V. Investments B.V. (Earlier Mahatamil Mining and Thermal Energy Limited, Nix Lanco Italy PV1 Investment B.V.), Lanco Solar Holdings LLC Properties Private Limited, Omega Solar Projects (Earlier Lanco North Park Land Holding Two LLC), Lanco Private Limited, Orion Solar Projects Private Limited, solar US EPC Branch LLC (Earlier Lanco North Park Land Pasiphae Power Private Limited, Sabitha Solar Projects One LLC), Lanco SP P.V. Investments B.V. (Earlier Lanco Private Limited, Lanco Anpara Power Limited, Udupi Spain PV1 Investment B.V.), Lanco US P.V. Investments B.V. Power Corporation Limited, Approve Choice Investments (Earlier Lanco Italy PV2 Investment B.V.). (Proprietary) Limited, Bar Mount Trading (Proprietary) Limited, Barrelake Investments (Proprietary) Limited, NOTE ON PARTICULARS REQUIRED AS PER SECTION 212 Belara Trading (Proprietary) Limited, Caelamen (Proprietary) OF THE COMPANIES ACT, 1956 Limited, Dupondius (Proprietary) Limited, Filten Trading In terms of the provisions of Section 212 of the Companies (Proprietary) Limited, Gamblegreat Trading (Proprietary) Act, 1956, the Company was required to attach the Annual Limited, K2011103835 (South Africa) (Proprietary) Limited, Reports of the Subsidiary Companies and the related Lanco Infratech Nepal Private Limited, Lanco Solar Canada detailed information to the Balance Sheet of the Holding
6 7 STATUTORY REPORTS STANDALONE FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS
Company. However, the Ministry of Corporate Affairs vide and give a new image to the organisation. their General Circular No. 2/2011 dated February 8, 2011 Our HSE performance is realised with recognition of our granted general exemption to the Companies under Section efforts in HSE and towards their sustenance. The true 212(8) from the requirement to attach detailed financial reflection of our HSE culture is more evident at our Tanjore statements of each Subsidiary. Accordingly, the Annual and Kondapalli sites, which have participated in various HSE Report does not contain the financial statements of the awards and won them to make us proud. A brief description subsidiaries. The detailed financial statements and audit is below: reports of each Subsidiary are available for inspection at the Registered Office of the Company and upon written request from a Shareholder, your Company will arrange to send the Site Award financial statements of Subsidiary Companies to the said Lanco Tanjore Golden Peacock Award for Climate Shareholder. Power Company Security during the year 2011; Limited Greentech Award for Environment HEALTH, SAFETY AND ENVIRONMENT Protection during the year 2011. Our Group’s journey in the perspective of Health, Safety Lanco Kondapalli EHS Excellence Award 2011 from CII & Environment (HSE) has been encouraging and on right Power Limited on best HSE practices. path. Corporate HSE has been driving various initiatives like HSE Audit Management, Contractor HSE Management and ‘Train the Trainer’ Programme to propel awareness on DIRECTORS HSE at sites. Apart from this, initiatives were taken to assist In accordance with the provisions of the Companies Act, our contractors to partner with us to enhance our HSE 1956 and the Articles of Association of the Company, performance. Towards these objectives separate workshops Mr. L. Sridhar, Dr. Uddesh Kumar Kohli and were conducted with Contractors and Site Directors to give a feel of our expectations. Dr. B. Vasanthan, Directors retire by rotation and being eligible, offer themselves for re-appointment. The group has started its process of innovation to HSE processes through share and learn programme. Site We report with grief the demise of Mr. P. Narasimharamulu, personnel share the best HSE processes among themselves, Independent Director who passed away on April 13, 2012. which are of significant value to enhance HSE performance The Board of Directors places on record its appreciation
6 7 LANCO Infratech Limited ANNUAL REPORT 2011-12
towards the significant contribution and valuable services the Report of Board of Directors) Rules, 1988, is enclosed rendered by Late Mr. P. Narasimharamulu during his tenure as Annexure-I. as Independent Director. DISCLOSURE ON COMPANY’S EMPLOYEES STOCK The Board of Directors appointed Mr. R. Krishnamoorthy as OPTION PLANS an Additional Director with effect from May 29, 2012. In terms The Employees Stock Option Plan - 2006 and the Employees of Section 260 of the Companies Act, 1956 he shall hold Stock Option Plan – 2010 were approved by Shareholders office upto the date of the ensuing Annual General Meeting by passing Special Resolutions in the Extraordinary General of the Company. The Company has received requisite Notice Meeting held on June 7, 2006 and Annual General Meeting in writing from a Member proposing his candidature for the held on July 31, 2010, respectively. office of Director liable to retire by rotation. The required information relating to the said schemes DEPOSITS pursuant to Clause 12 of the SEBI (ESOS/ESOP) Guidelines, Your Company has not accepted deposits falling within the 1999, are enclosed as Annexure-II. provisions of Section 58A of the Companies Act, 1956 read PARTICULARS OF EMPLOYEES with the Companies (Acceptance of Deposits) Rules, 1975 The information required to be published under the during the year under review. provisions of Section 217(2A) of the Companies Act, 1956 AUDITORS read with Companies (Particulars of Employees) Rules, S.R. Batliboi & Associates, Chartered Accountants and 1975 as amended is enclosed as Annexure-III. Brahmayya & Co., Chartered Accountants, Auditors of the MANAGEMENT DISCUSSION AND ANALYSIS Company, will retire at the conclusion of the Annual General The Management Discussion and Analysis as required Meeting. S.R. Batliboi & Associates, Chartered Accountants under Clause 49(IV)(f) of the Listing Agreement is enclosed conveyed their inability to be considered for re-appointment as Annexure-IV. as Auditors. CORPORATE GOVERNANCE Special Notice under Section 225 read with Section 190 The Report on Corporate Governance is given separately in of the Companies Act, 1956 was received, proposing an this Annual Report. The Certificate of Practising Company Ordinary Resolution to appoint Brahmayya & Co., Chartered Secretary certifying compliance in this regard is annexed to Accountants, as Auditors from the conclusion of the Annual the said Report. General Meeting to the conclusion of the next Annual General Meeting, in place of the retiring Auditors. DIRECTORS’ RESPONSIBILITY STATEMENT As required by Section 217(2AA) of the Companies Act, 1956, Brahmayya & Co., Chartered Accountants, have conveyed your Directors hereby confirm that: their willingness to accept appointment and confirmed their eligibility under Section 224 (1B) of the Companies i) in the preparation of the annual accounts, the Act, 1956. applicable accounting standards have been followed and that no material departures are made from the COST AUDITORS same; Pursuant to Order from the Ministry of Corporate Affairs, DZR & Co., Cost Accountants have been appointed as Cost ii) we have selected such accounting policies and applied Auditors for the year 2011-12. They are required to submit them consistently and made judgements and estimates the report to the Central Government within 180 days from that are reasonable and prudent so as to give true the end of the accounting year. and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the DISCLOSURE OF PARTICULARS WITH RESPECT TO Company for the period; CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO iii) we have taken proper and sufficient care for the Information pursuant to Section 217(1)(e) of the Companies maintenance of adequate accounting records in Act, 1956, read with Companies (Disclosure of particulars in accordance with the provisions of the Companies Act,
8 9 STATUTORY REPORTS STANDALONE FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS
1956, for safeguarding the assets of the Company ACKNOWLEDGEMENT AND APPRECIATION and for preventing and detecting fraud and other Your Directors take this opportunity to thank all the irregularities; and stakeholders including Shareholders, Financial Institutions, Banks, Customers, Suppliers and Regulatory and iv) we have prepared the annual accounts on a going Governmental Authorities for their continued support to concern basis. the Company. Directors also wish to place on record their INFORMATION ON AUDITORS’ OBSERVATIONS sincere appreciation of the hard work, dedication and The observations of the Auditors in Paragraphs 4 & 5(v) in commitment of Employees at all levels. their Report on Standalone Financial Statements read with For and on behalf of the Board Note no. 38 of the Standalone Financial Statements provide fullest information and explanation and hence are not required to be reiterated. L. Madhusudhan Rao G. Venkatesh Babu Further, the observations of the Auditors in Paragraphs 4 Executive Chairman Managing Director and 5 in their Report on Consolidated Financial Statements DIN-00074790 DIN-00075079 read with Note Nos. 52 D (VI), 65, 42, 63, 64, 37, 54, 59, 38, Place: Gurgaon, 39 of the Consolidated Financial Statements provide fullest Date: August 13, 2012. information and explanation and hence are not required to be reiterated.
8 9 LANCO Infratech Limited ANNUAL REPORT 2011-12
Annexure - I
FORMING PART OF THE DIRECTORS’ REPORT
Technology Absorption and Adaptation and Innovation Lanco Infratech Limited is focused on both coal as well as gas based power projects. In coal based segment, the major thrust is on super critical plants with unit size configuration of 660 MW / 800 MW (which have better plant performance). Also, the Company is offering boilers based on Circulating fluidised bed combustion (CFBC) technology, as it can fire low-grade fuel or fuel with highly fluctuating fuel quality and also controls sulphur and NOx emission. In the gas based segment the Company is offering open as well as combined cycle power plants of varied capacities which ranges from 200 MW to 1200 MW.
Innovations and Technological Adaptation carried out – One of the most critical processes in Poly silicon manufacturing is Chemical Vapor Deposition (CVD) reactors where the operating temperature is around 900-1100 degree Centigrade. In order to avoid any mechanical distortion or damages to the reactors, this temperature needs to be brought down and continuously maintained below 140 degree Centigrade. The Company, with the guidance of its consultant, designed a system with 9 independent drives to provide a non-interrupted flow of cooling fluid. In an effort to optimise cost, the system was redesigned by using 6 drives with Rotary UPS and thus drastically reduced the cost.