26th Annual Report 2014-2015 Bridging the Gap Global to Local “ Dream is not what you see in sleep. It is the thing which doesn’t let you sleep.” - Dr. A.P.J. Abdul Kalam Our goal has always been our dream and this dream of ours, took us to the heights of professional skyline. From the top Management team to our Workforce, Sadbhav Engineering Ltd. has constantly thrived for contribution towards progressiveness and a sense of achievement. This led us to a path of success along with fulfilment of our aims. At Sadbhav, we think the global nature of Indian infrastructure is the future and, thus, we design and provide it to you nationally. We gain this, by the satisfaction of rolling out the best of the world for you. 01 Sadbhav Vision 03 Corporate Information 04 Chairman’s Message 08 Roads and Highways 10 Mining 11 Irrigation CONTENTS 12 Financial Highlights 13 Notice 20 Directors’ Report 42 Report on Corporate Governance 52 Management Discussion & Analysis 55 Independent Auditor’s Report 58 Financial Statements 86 Consolidated Financial Statements Salient Features of Financial Statements of 133 Subsidiary/Associates/Joint Ventures 135 Attendance Slip & Proxy form Sadbhav was established in 1988, with a vision to strive for perfection in order to establish a prominent position, by exemplary performance, state of art quality work, thereby providing utmost satisfaction to all the stakeholders. Our mission has always been to enhance and maintain our potential in providing our services through the support of latest technology with quality and timely civil engineering services needed to create a nation of our dreams. We Develop, Build & Service Physical Infrastructure for better living, work environment & better transportation. We endeavor to achieve our objectives in an environment of fairness and courtesy to our clients, employees, vendors, investors and society. Sadbhav also aspires to provide construction services in a professional manner to exceed the needs of our clients. We also strive to build quality industrial construction with commitments towards Delivery, Safety and Environment achieving highest level of customer satisfaction. At all times Sadbhav’s objectives have been to increase client satisfaction index, timely completion of projects, Executing Quality work to the client satisfaction and ensuring Prompt Services by adhering to safety & environment standards. SADBHAV ENGINEERING LIMITED Annual Report 2014-2015 01 “ Teamwork is the ability to work together toward a common vision. It is the fuel that allows common people to attain uncommon results ” - Andrew Carnegie Key Management Team 02 Corporate Information BOARD OF DIRECTORS Stakeholders Relationship COMPANY SECRETARY Committee 1. Shri Vishnubhai M. Patel Shri Vijay Kalyani Chairman & Managing Director Shri Mirat N. Bhadlawala Chairman STATUTORY AUDITORS 2. Shri Shashin V. Patel Surana Maloo & Co. Joint Managing Director Shri Sandip V. Patel Member WORKSHOP 3. Shri Vasistha C. Patel Executive Director Shri Nitin R. Patel Village Ognaj, Tal. Daskroi, Member Dist. Ahmedabad. 4. Shri Vikram R. Patel Executive Director Shri Vasistha C. Patel REGISTERED OFFICE Member 5. Shri Nitin R. Patel Sadbhav House, Executive Director & CFO Finance and Investment Opp. Law Garden Police Chowki, Committee Ellisbridge, Ahmedabad - 380006. 6. Shri Sandip V. Patel Website : www.sadbhaveng.com Independent Director Shri Vishnubhai M. Patel Chairman CORPORATE OFFICE 7. Shri Atul N. Ruparel Independent Director Shri Shashin V. Patel 1st Floor, “Sadbhav”, Member Nr. Havmor Restaurant, 8. Shri Arun S. Patel B/H. Navrangpura Bus Stand, Shri Nitin R. Patel Independent Director Navrangpura, Ahmedabad - 380009. Member 9. Shri Sandip A. Sheth MUMBAI OFFICE Independent Director Shri Vasistha C. Patel Member 602/702, “C” Wing, 10. Shri Mirat N. Bhadlawala Godrej Coliseum, Nr. Lokmanya, Shri Atul N. Ruparel Independent Director Behind Everard Nagar, Member 11. Smt. Purvi S. Parikh Sion (East) Mumbai - 400022. Corporate Social Independent Director Corporate Identity Number (CIN): Responsibility Committee (w.e.f. 12-02-2015) L45400GJ1988PLC011322 BOARD COMMITTEES Shri Vishnubhai M. Patel Chairman REGISTRAR & TRANSFER AGENTS Audit Committee Link Intime India Pvt. Ltd. Shri Vasistha C. Patel Shri Sandip V. Patel (formely Intime Spectrum Registry Limited) Member Chairman C-13, Pannalal Silk Mills Shri Mirat N. Bhadlawala Shri Nitin R. Patel Compound, L.B.S. Marg, Member Member Bhandup (West), Mumbai - 400078. Shri Sandip A. Sheth Shri Atul N. Ruparel Member Member BANKERS Shri Arun S. Patel Member Oriental Bank of Commerce Nomination and The Karur Vysya Bank Limited Remuneration Committee Indian Overseas Bank Shri Atul N. Ruparel ICICI Bank Limited Chairman IDBI Bank Ltd. Shri Sandip V. Patel Member Yes Bank Ltd. Shri Arun S. Patel Standard Chartered Bank Member Punjab National Bank Shri Sandip A. Sheth Member SADBHAV ENGINEERING LIMITED Annual Report 2014-2015 03 “ Our approach to construction is simple: Teamwork & Hardwork conquers tough tasks; while honest business practices yield quality results. ” Chairman’s Message Dear Stakeholders, Sadbhav Engineering has never ceased to amaze in its brilliance towards the development, rapid progress and success in the multifarious directions of engineering, construction, and infrastructural activities across transport, mining, and irrigation sectors in India. But amidst all this, your company took its responsibility towards the society and environment with a zest. Your company has always been one for all and all for one. It will continue to do so with the same attitude for immeasurable number of years. It, therefore, gives me a great pleasure to present the financial report of your company for the year 2014-2015. Given the present economic scenario your company still continues to do exceptionally well on the outset. The strengthening economic growth of India has brought in influx of trade and travel, thus providing a boost to the Indian infrastructure and converting them into imperative for bridging the gap between global and local. The thrust of such opportunities, which have emerged in the present circumstances, has had a great impact in the order book of your company, setting a standard for a superlative performance. This led your company to bag some of the most important contracts and projects which carve a niche in the Indian infrastructure and synonymize and engrave its name with development. 04 Total Order Book As on June 2015 (₹ 8,465.05 Crores) As on June 2014 (₹ 8,336.08 Crores) As on June 2013 (₹ 9,602.48 Crores) SADBHAV ENGINEERING LIMITED Annual Report 2014-2015 05 “ SADBHAV marches Sadbhav Engineering’s dealings stretch across major sectors with the country on of infrastructural growth encompassing multiple sectors. its journey of progress, Sadbhav has proudly reached a net worth of ₹ 1352.06 crores by providing which accounts for a rocketing growth. The order book stands Infrastructural support at ₹ 8199.98 crores as on 31st March, 2015. An achievement to accelerate growth ” towards a turnover of ₹ 2969.85 crores for the said year was made by us wherein the sales rose to 25.94%. With Net Profit rising up-to 7.13%, our Profit after Tax stands at ₹ 113.73 crores. By comparison between various financial years, your company has broken its records by allotting ₹ 14.46 crores as the Dividend pay-out for 2014-2015. Close to 68% of Sadbhav’s revenues, this year, are derived from the Transport segment. The operations include upgrading, widening, strengthening and maintenance of roads and highways as well as undertaking Build Operate and Transfer (BOT) road projects. The Company through its subsidiary Sadbhav Infrastructure Project Limited currently has 8 BOT projects with inclusive of toll roads and annuity road projects. These projects are expected to be operational with time. Sadbhav is also doing EPC contracts under this sector and currently stands with 11 worth ₹ 1240.95 crores as per the order book. Your Company has won additionally 2 other projects adding on to other cash contracts in last quarter of Financial Year 2014-15 in transport sector. The irrigation projects contributed 14% to company’s overall revenues. Your company already has 23 on-going projects of value of ₹ 2014.63 crores during Financial Year 2014-15 in irrigation sector. This year Sadbhav generated 18 % revenues from mining sector. With this your company has reached at total mining capacity at over 675.00 lakh cubic meters of overburden removal and over 40.00 lakh metric tonnes of coal and lignite and over 8.00 lakh metric tonnes Uranium Ore mining for the year. During this financial year, order book status for mining sector stands at the valuation of ₹ 2392.48 crores with a continuation of its 11 projects. I feel privileged to say that all the above would not have been possible if we, at Sadbhav Engineering, did not have a strong team of Engineering and Management staff. Our promotion 06 of young talent has resulted in gathering an excellent team of professionals who brought their comprehensive expertise to benefit our company. For us, a company’s strength and success lies on the hands behind it. Therefore, we have ensured that our young employees gain ample opportunities for personal and professional growth. As Jane Good all once said, “What you do makes a difference, and you have to decide what kind of difference you want to make.” Therefore, I take this opportunity to thank every stakeholder of Sadbhav Engineering who plays a pivotal role in our success and our constant effort towards making a difference. We also place on record our appreciation for undaunted trust and unfathomable support of our customers, shareholders, lenders and vendors shown towards the company. Hence, on your behalf as well as on behalf of the Board of Directors, I whole heartedly admire the seamless efforts of the employees of Sadbhav Engineering on another impressive performance and pursuing their goal to establish trust amongst you during the year FY15. I would like to thank all of you for your constant and esteemed presence and garnered interest in the Company.