Annual Report 2015-16 Contents CHAIRMAN’S LETTER ..........................................................................................................................................4 COMPANY INFORMATION .................................................................................................................................. 6 MANAGEMENT DISCUSSION AND ANALYSIS ..................................................................................................13 CORPORATE GOVERNANCE ..............................................................................................................................28 SHAREHOLDER INFORMATION ........................................................................................................................37 BOARD’S REPORT ..............................................................................................................................................49 AUDITORS’ REPORT .........................................................................................................................................102 FINANCIALS ......................................................................................................................................................106 CONSOLIDATED FINANCIAL STATEMENTS ....................................................................................................133 NOTICE .............................................................................................................................................................168 Highlights 2015-16 t HCC E&C business order book grows by 25.4% to ` 18,123 crore t HCC Standalone PBT/PAT improved substantially even though turnover dropped marginally t HCC E&C won many awards for its projects and their CSR activities t Steiner AG has secured orders during the year worth CHF 850 million (` 5843 crore) It’s order book is at CHF 1320 million (` 9074 crore) t HCC Concessions (a stepdown subsidiary of HCC) has sold its stake in two projects. Toll collection in its Baharampore-Farakka project is above the estimate at ` 36 lacs/day t Lavasa : Footfall of tourists crossed over 10 lacs during the year. Has completed the construction of 1200 residential units t Highbar Technologies crossed total number of customers beyond 100 Annual Report 2015-16 1 HCC’s Major Projects ANDHRA PRADESH GOA KARNATAKA Cavern for Crude Oil Storage, Goa Barge Berth at Marmugoa Cavern for Crude Oil Storage, Padur Vishakhapatnam GUJARAT Kadra Dam Chimney at Vijayawada Gandhinagar Cooling Towers Karnataka State Highways Project Godavari Barrage at Rajahmundry Kachchh Branch Canal Tunnel and Powerhouse for Godavari Railway Bridge Kakrapar Atomic Power Project Sharavati Hydroelectric Power Project Papavinasam Dam Kalol Mehsana Gas Pipeline Yettinahole Project Polavaram Project Right Main Canal Mehsana to Palanpur Highway KERALA Pula Subbaiah Veligonda Tunnel Pumped Water Supply Scheme from Kesaria to Sonari Brahmapuram Diesel Power Plant Tata Memorial Centre, Hospital Reliance J3 Refinery at Jamnagar Dam across Idamalayar Vizag Monolith, West Wall Protection Saurashtra Branch Canal Dam across Moozhiyar and Swarnim Gujarat Kutch Water Grid Veluthodu ARUNACHAL PRADESH Tapi Road Bridge Lower Periyar Hydroelectric Power Pare Hydroelectric Power Project Project HARYANA ASSAM Sebarigiri Dam Hathnikund Barrage Bogibeel Rail-cum-Road Bridge Tanker Terminal and Fertiliser Berth, Panipat Chimney Cochin Brahmaputra Bridge Road Bridge at Palwai Wellington Bridge, Cochin IOCL Refinery at Guwahati HIMACHAL PRADESH MADHYA PRADESH NH-37 - Numaligarh to Jorhat Chamera Hydroelectric Power Highway Road Bridge over River Indravati Project, Stage I Satpura Thermal Power Station NH-54 - Maibang to Nirmbanglo Chamera Hydroelectric Power Highway Project, Stage III Tons Hydroelectric Power Project BIHAR Kashang Hydroelectric Power MAHARASHTRA Project Barauni Thermal Power Plant Aerated Lagoons, Mumbai Ganga Bridge at Mokameh Nathpa Jhakri Hydroelectric Power Project Ambernath/Ulhasnagar STP Munger Rail-cum-Road Bridge Sainj Hydroelectric Power Project Bandra Effluent and Influent Disposal, Mumbai Muzaffarpur Thermal Power Plant Tunnels for Sawra Kuddu Bandra-Worli Sea Link Sone Barrage Hydroelectric Power Project BARC - Integrated Nuclear Recycle Sone Bridge JAMMU & KASHMIR Plant, Tarapur Access Road Tunnel to Sawalkote CHATTISGARH Hydroelectric Power Project BARC - Reactor, Lab & Spent Fuel Bailadila Project Building Chutak Hydroelectric Power Project Bhama Askhed Pipeline Bhilai Steel Plant Kishanganga Hydroelectric Power DELHI Project Bhandup Pipeline Delhi Faridabad Elevated Mughal Road Bhandup Water Treatment Complex Expressway Nimoo Bazgo Hydroelectric Power Bhorghat Tunnel Project DMRC - Airport Metro Express Line DGNP Dry-Dock and Wharves Pir Panjal Tunnel DMRC - Dwarka to Najafgarh Factory Civil Works for Premier Ramban Banihal Highway DMRC - Janakpuri West to Palam Automobiles Limited Station Salal Hydroelectric Power Project Ghatkopar High Level Water Tunnel DMRC - Netaji Subhash Place to T 48 Tunnel - Dharam-Qazigund Koyna Hydroelectric Power Project Shalimar Bagh T 49 Tunnel - Dharam-Qazigund Stage I to IV DMRC - Vishwa Vidyalaya to ISBT Uri-II Hydroelectric Power Project Middle Vaitarna Water Pipeline Flyover linking existing Munirka JHARKHAND Mumbai Metro One flyover to Army RR Hospital Chandil Dam Mumbai-Pune Expressway Water & Sewage Treatment Plants NH-3 MP/Maharashtra Border - at Okhla, Tihar Jail, Wazirabad Grand Trunk Road Improvement Project Dhule Highway 2 NH-4 - Satara Kolhapur Highway TAMIL NADU UTTARAKHAND Nhava Sheva WTP Works, Raigadh Chennai Bypass Tapovan Vishnugad Hydroelectric Power Project Pune Paud BOT Road Chennai Ore Berth, Jetty, Wharf Dhauliganga Hydroelectric Power Surveillance Facility Project at Ennore Port-Rock Quarrying & Project Tarapur Breakwater Tehri Pumped Storage Project Trombay Chimney Works IGCAR’s Fast Reactor Fuel Cycle Facility at Kalpakkam Vishnugad Pipalkoti Hydroelectric Vaitarna Dam Power Project Kadamparai Pumped Storage Water Supply Tunnel from Bhandup Project WEST BENGAL to Charkop, Mumbai Kudankulam Nuclear Power Project, Elevated Road from Park Circus to Water Treatment Plant, Pune Units 1 & 2 E.M. Bypass, Kolkata Water Tunnel between E Moses Lower Mettur Hydroelectric Power Farakka Barrage Road and Ruparel College, Mumbai Project Golden Quadrilateral Road Project - Water Tunnel between Sewri and Navamalai Irrigation Tunnel Kolaghat to Kharagpur Futka Tirupur Water Supply Project Haldia Docks Project Water Tunnel from Maroshi to Kalyani Bridge Ruparel College, Mumbai Upper Nirar Irrigation Tunnel Kolkata Metro MANIPUR TELANGANA Mahananda Barrage Railway Tunnel No.1 between JCR Devadula Lift Irrigation Scheme Jiribam and Tupul Phase I NH-34 - Bahrampore - Farakka Highway Railway Tunnel No. 3 between JCR Devadula Lift Irrigation Scheme Jiribam and Tupul Phase II NH-34 - Farakka - Raiganj Highway Railway Tunnel No. 10 between JCR Devadula Lift Irrigation Scheme NH-34 - Raiganj - Dalkhola Highway Phase III Jiribam and Tupul Purulia Pumped Storage Project North-South Corridor NHDP Phase Railway Tunnel No. 12 between Teesta Barrage Jiribam and Tupul II Package AP-8 Teesta Low Dam Hydroelectric Imphal Kangchup Tamenglong Road Pranahita Chevella Lift Irrigation Power Project Stage IV Scheme Railway Tunnel No. 12 between BHUTAN Tupul and Imphal Rajiv Dummugudem Lift Irrigation Scheme Dagachhu Hydroelectric Power ORISSA Project Ramagundam Thermal Power Aditya Aluminium Project Project Kurichhu Hydroelectric Power Project Dam at Upper Kolab UTTAR PRADESH Nikachhu Hydroelectric Power Naraj Barrage, New Cuttack Allahabad Bypass Project Paradip Port Road Gomti Aqueduct Punatsangchhu Hydroelectric Road Bridge across Mahanadi Maneri Bhali Hydroelectric Power Power Project PUNJAB Project Tala Hydroelectric Power Project 140 m High Chimney at Ropar Naini Cable Stayed Bridge Rail Coach Factory at Kapurthala Narora Atomic Power Project RAJASTHAN NH - 233 - Indo Nepal Border to Rudhauli Highway Chambal Bridge at Dholpur NH - 28 - Lucknow Muzaffarpur East-West Corridor Project Highway Rajasthan Atomic Power Project, Rihand Dam Units 1 & 2 Major projects completed in past Rihand STPP Rajasthan Atomic Power Project, Projects completed in the year Units 3 & 4 Sai Aqueduct Projects in progress Rajasthan Atomic Power Project, Sharda and Ghogra Barrages Units 5 & 6 Varanasi Bridge New projects Rajasthan Atomic Power Project, Yamuna Hydroelectric Power BOT projects Units 7 & 8 Project 3 Chairman’s Letter Dear Shareholder, Let me begin this letter with a bird’s eye view of the Indian economy, then move on to what is happening in infrastructure and the construction industry and end with a brief discussion on your Company. According to the latest estimates of GDP and Gross Value Added (GVA) released by the Government of India’s Central Statistical Organisation, the Indian economy is certainly getting back to a higher growth path. For 2015-16, real (or inflation adjusted) GDP has grown by 7.6% — up from 7.2% in 2014-15. That makes India the fastest growing large country in the world, with a growth that not only exceeds any developed nation but also major emerging economies such as China. Despite two consecutive years of poor monsoon, we have been fortunate on three counts: significantly lower input costs and import bill on account of crude oil prices hitting a low over the last two decades; a comfortable balance of payments situation; and benign inflation. For 2015-16, inflation based on the consumer price