ANNUAL REPORT 2013 - 14 LANCO INFRATECH LIMITED NATURAL EPC RESOURCES INFRASTRUCTURE POWER SOLAR PROPERTY CSR DEVELOPMENT With a core mandate of “Always Inspiring” driving our business mandate, it’s not surprising that our initiatives come with the imperative of far reaching outcomes. Our customary far- sightedness has helped us understand the dynamics of challenging environments and accordingly align ourselves to consolidate and deliver. Across our business interests - EPC, Power, Solar, Natural Resources, Infrastructure, Property Development - our goal is one of consolidation and consistencies. An outcome-oriented approach has enabled us to reach this far. In these challenging times, we have persevered with the conviction that our long-term strategies will have a positive impact on all those we are associated with and the world at large. EPC Our reputation for impeccable project management competencies has established us as the frst choice amongst leading enterprises for EPC projects. An ability to straddle a project from “concept to commissioning” bringing together the crucial parameters of cost and quality has earned us a rich portfolio of EPC projects. With strong engineering competencies across industry verticals such as power, transmission, industrial and transportation segments, our decade-old expertise in EPC is defnitely one of our many strengths. POWER Our proven prowess in power generation has made us one of the nation’s leading power producers and one of largest private sector players in the Indian power trading market. We have consolidated our strengths and integrated our presence across the value chain. This in turn has facilitated us in capturing an elevated value addition across the businesses. We currently have an installed capacity of 4722 MW and a capacity under construction of 4636 MW. One of our under construction project has recently signed a Long Term Power Purchase Agreement of 25 years with UPPCL Discoms under Case 1 Bid. SOLAR Renewable energy is all about being sustainable, innovative and cost-effective, while catering to the ever-increasing energy needs. Our goal of indigenizing alternate technologies with the aim to reduce costs and achieve grid parity is manifested in our fully integrated strategy - ‘Sand to Power’. We are focused on commercializing technologies for green and effcient energy generation systems such as solar thermal and solar photovoltaic (PV). Currently we have a solar farm development portfolio of 143 MW (Operating - 43 MW and Under Construction - 100 MW). NATURAL RESOURCES The coal business has always been our key area of focus. Our strategic move towards ‘Project Integration’ has enabled us to extend our natural resources’ operating portfolio and under- development assets in India and across the globe. With more than 2 billion tonnes of coal resources in our business portfolio, we are reckoned as one of the exclusive members among the mine developers & operators in India. The recent appointment as Mine Developer & Operator (MDO) by Steel Authority of India Ltd., for the Tasra Coal Block including washery and captive power project has reiterated our strengths in Natural Resources. INFRASTRUCTURE The successful execution and completion of impressive civil & urban projects has earned us our prominent position in the Infrastructure development sector. Today, we are proving our mettle in selective infrastructure projects by leveraging our EPC experience and construction expertise. The projects currently under our highway portfolio include two major National Highway (NH) projects in the State of Karnataka and one project in the State of Uttar Pradesh. PROPERTY DEVELOPMENT Foraying into Property Development, we have created one of Hyderabad’s most desired destinations - Lanco Hills. Conceptualized to be ‘a world within’, it is spread over 100 acres and comprises of residential spaces, offce space & IT SEZ, retail and entertainment options. This USD 1.5 billion mega project owes its magnifcence to the meticulous detailing by renowned architects & consultants. With breathtaking vistas, esthetically landscaped gardens and high-rise living, Lanco Hills is reckoned to be one of the world’s largest single-phase development projects. Board of Directors Mr. L. Madhusudhan Rao Mr. G. Bhaskara Rao Mr. L. Sridhar Executive Chairman Executive Vice - Chairman Vice - Chairman Mr. G. Venkatesh Babu Mr. S. C. Manocha Dr. Pamidi Kotaiah Managing Director Deputy Managing Director Director Mr. P. Abraham Dr. Uddesh Kumar Kohli Mr. R. Krishnamoorthy Director Director Director 7 Annual Report 2013-2014 Bankers and Financial Institution of the Company Corporate Information Allahabad Bank Andhra Bank Board of Directors Axis Bank Limited Bank of Baroda Mr. L. Madhusudhan Rao - Executive Chairman Bank of Maharashtra Mr. G. Bhaskara Rao - Executive Vice-Chairman Canara Bank Central Bank of India Mr. L. Sridhar - Vice-Chairman Corporation Bank Dena Bank Mr. G. Venkatesh Babu - Managing Director HDFC Bank Limited Mr. S. C. Manocha - Deputy Managing Director ICICI Bank Limited IDBI Bank Limited Dr. Pamidi Kotaiah - Director Indian Overseas Bank Mr. P. Abraham - Director IDFC Limited ING Vysya Bank Limited Dr. Uddesh Kumar Kohli - Director Kotak Mahindra Bank Limited Mr. R. Krishnamoorthy - Director Life Insurance Corporation of India Oriental Bank of Commerce Punjab & Sind Bank Chief Operating Ofcer Finance Punjab National Bank Mr. T. Adi Babu Srei Equipment Finance Private Limited State Bank of Bikaner & Jaipur Compliance Ofcer State Bank of Hyderabad Mr. A. Veerendra Kumar State Bank of India State Bank of Mysore Auditors State Bank of Patiala Brahmayya & Co., Siemens Financial Services Private Limited (Registration No. - 000511S) TATA Capital Financial Services Limited Chartered Accountants Catholic Syrian Bank Limited 48, Masilamani Road, Balaji Nagar, Royapettah The Jammu & Kashmir Bank Union Bank of India Chennai - 600 014 United Bank of India Tamil Nadu, India Yes Bank Limited Registered Ofce Plot No.4, Software Units Layout, HITEC City Madhapur, Hyderabad – 500 081, Telangana, India Phone: +91-40-4009 0400, Fax: +91-40-2311 6127 Contents E-mail: [email protected] Year at a Glance 9 Website: www.lancogroup.com Directors’ Report 10 Corporate Identity Number: L45200TG1993PLC015545 Management Discussion and Analysis 16 Report on Corporate Governance 32 Corporate Ofce Abridged Financial Statements Lanco House, Plot No. 397, Udyog Vihar, Phase-3 Gurgaon–122 016, Haryana, India Auditors’ Report 47 Phone: +91-124-474 1000, Fax: +91-124-474 1878 Balance Sheet 54 Statement of Proft and Loss Account 55 Registrar & Share Transfer Agent Cash Flow Statement 56 Aarthi Consultants Private Limited Notes to Abridged Financial Statements 56 1-2-285, Domalguda, Hyderabad – 500 029 Consolidated Financial Statements Telangana, India Auditors’ Report 79 Phone: +91-40-2763 8111, 2763 4445 Balance Sheet 82 Fax: +91-40-2763 2184 Statement of Proft and Loss Account 83 E-mail: [email protected] Cash Flow Statement 84 Website: www.aarthiconsultants.com Notes to Consolidated Financial Statements 85 8 Year at a glance - Consolidated (` Crores) Change PARTICULARS 2013-2014 2012-2013 (%) Proft and Loss Account Gross Revenue 10,875.27 15,295.86 -29 Less: Elimination of Inter Segment Revenue 277.42 1,408.20 -80 Net Revenue 10,597.85 13,887.66 -24 Proft Before Depreciation, Interest and Taxation (PBITDA) 1,671.87 2,653.33 -37 Depreciation and Amortisation 1,171.91 1,125.81 4 Proft Before Interest and Taxation 499.96 1,527.52 -67 Eliminated Proft on transactions with Subsidiaries (15.05) (17.58) -14 Proft Before Interest and Taxation Plus Elimination 484.91 1,509.94 -68 Interest and Finance Charges 2,762.12 2,421.44 14 Proft / (Loss) Before Taxation, Exceptional Item Plus Elimination (2,277.21) (911.50) 150 Exceptional Item (179.26) - 100 Proft / (Loss) Before Taxation Plus Elimination (2,456.47) (911.50) 169 Provision for Taxation (Including Deferred Tax and MAT Credit Entitlement) (129.44) 179.62 -172 Proft / (Loss) After Tax (Before Minority Interest & Share of Profts from Associates) (2,327.03) (1,091.12) 113 Share of Minority Interest (115.64) (11.22) 931 Share of Profts / (Loss) from Associates (33.89) (2.88) 1,077 Proft / (Loss) After Tax (After Minority Interest and Share of Profts from Associates) Plus Elimination (2,245.28) (1,082.78) 107 Prior Period Items 43.50 (12.62) -445 Elimination of Proft on Transactions with Subsidiaries and Associates (14.90) 3.14 -575 Proft / (Loss) After Tax (After Minority Interest and Share of Profts from Associates) (2,273.88) (1,073.30) 112 Cash Proft (743.40) 232.92 -419 Cash Flow Cash from Operating Activities before Elimination 1,345.37 1,869.51 -28 Balance Sheet Share Capital 239.24 239.24 0 Reserves & Surplus 1,218.30 3,433.22 -65 Minority Interest 837.48 934.18 -10 Net Worth Plus Minority 2,295.02 4,606.64 -50 Eliminated Proft on Transactions with Subsidiaries and Associates (Cumulative) 1,501.17 1,516.06 -1 Net Worth Plus Minority & Elimination 3,796.19 6,122.70 -38 Non Current Liabilities 34,354.22 30,971.56 11 Current Liabilities 14,194.93 15,243.06 -7 Total of Net Worth Plus Minority & Liabilities 50,844.17 50,821.26 0.05 Non Current Assets 40,253.03 39,333.96 2 Current Assets 10,591.14 11,487.30 -8 Total of Assets 50,844.17 50,821.26 0 Key indicators Earning Per Share (In `) Basic (9.68) (4.58) 111 Diluted (9.68) (4.58) 111 No. of Employees 4,000 5,710 -30 9 Annual Report 2013-2014 DIRECTORS’ REPORT Dear Members, Your Directors are pleased to present the