CONTENT Corporate Overview Financial Statements Opportunities Galore Independent Auditors’ Report Harnessing Competencies 01 on Standalone Accounts 83 Financial highlights 07 Standalone Accounts 88 Message of the Chairman 08 Independent Auditors’ Report on Consolidated Accounts 132 Management Reports Consolidated Accounts 136 Management Discussion & Analysis 14 Directors’ Report 22 Corporate Governance Report 63 Corporate Overview I Management Reports I Financial Statements OPPORTUNITIES GALORE HARNESSING COMPETENCIES Opportunities Galore economy and its accelerated growth, coupled with healthy financials, FY18 was a remarkable year for the but also provide a galore of opportunities large fleet of state-of-the-art plant & infrastructure industry, particularly for to all the stakeholders engaged in the machinery and competent manpower, the roads and highway sector. The infrastructure industry, more particularly the Company is fully geared-up to year witnessed formal approval of an for infrastructure development and seize the huge opportunities on the expansive infrastructure development construction players in India. Apart horizon. The Company will harness initiative of the Government of India(GoI) from the above development initiatives its competencies with its ‘Seven R’ -namely Bharatmala Pariyojana for of GoI, the State Governments across development philosophy of seizing the comprehensive development of National the country also embarked upon wide- Right project opportunity, with the Right Highways, Economic Corridors & ranging infrastructure development client, at the Right price and implement Expressways etc across the nation, with initiatives that include development through Right planning with Right over `7.0 lakh crore worth of investments of state highways and greenfield resources at Right cost in the Right time. to be made over a 5-year period, under expressways, minor ports, greenfield The financial performance of company Phase I of this flagship programme. airports, metro rail corridors, smart in FY 2017-18 is significantly better Similar large-scale developmental plans cities, urban and tourism infrastructure than FY 2016-17 - both on standalone were also announced in Railways, Ports in a big way. These projects again, would and consolidated basis, with marked and Aviation sectors as well, during further augment the opportunities to increase in Standalone Revenue, the year. The sheer volume of this sea infrastructure companies in the coming EBIDTA & PAT by 10%, 44% & 20% and of opportunities will not only create a years. Consolidated Revenue, EBIDTA & PAT sustained ripple effect to the overall by 7%, 23% & 105% in FY 18 over FY 17, respectively. The company also wants to Harnessing Competencies harness its sustained healthy financials With the proven and end-to-end to look for right fund-based project competencies in planning, development, opportunities, particularly highway construction, operation and development projects on Hybrid Annuity management of highway, expressway Mode, going forward. The Company has and airport projects across geographies, an opening balance of the un-executed order book over `7300.0 crore at the beginning of FY 18-19 and expected to secure over `6000 crore worth of new projects during the year, which gives a robust revenue visibility over the next 2-3 years. Annual Report 2017-18 1 KEY 2017 Awarded four highway projects Traffic opened on Agra-Lucknow MILESTONES on Hybrid Annuity Model (HAM) Expressway in February 2017, with an aggregate Bid Project eleven months ahead of schedule Cost of `50350 million and and achieved provisional one of them - Dausa-Lalsot- completion in October 2017 Kauthun Section HAM project achieved financial closure well PNC Infratech assigned ”Stable” before time. outlook Credit ratings upgraded to stable outlook for projects such as MP Highways Pvt. Ltd., and PNC 2016 Raebareli Highways Pvt. Ltd. Completed 166 km long Raebareli- Jaunpur highway project on BOT- Annuity project more than 3 months ahead of schedule in February 2016 2015 2014 Completed Four-laning of km 51 to 61 including Chambal Bridge) on Dholpur Listed on the NSE and BSE Executed a redevelopment and - Morena Section of NH-3 in the states following successful IPO management project at Narela of Rajasthan and MP completed in Industrial ahead of schedule June 2016 Achieved COD for three BOT-Toll Projects (Ghaziabad Aligarh, Awarded EPC contract of Agra- Completed Four laning of Agra Bypass Kanpur-Kabrai and Bareilly- Lucknow Expressway Package-I for Project connecting km 176.800 of Almora) and commenced toll `16357.5 million NH-2 and km 13.03 of NH-3 in the operations. state of UP in December 2016 Entered into a Collaborative MoU Commenced construction of Agra- with POSCO Engineering and Awarded two major NH projects Lucknow Expressway Package Construction India Private Limited on EPC mode (i) Four laning of Nagina-Kashipur Section of NH 74 (ii) Four laning of Varanasi-Gorakhpur section of NH-29 (Package II) for an aggregate contract price of `20242 million 2003 2005 2007 1999 Received bonus from the NHAI for ahead of scheduled Executed first Awarded BOT Our Company was completion of four-laning of international road project by incorporated as ‘PNC the Agra-Gwalior section on airport runway Madhya Pradesh Construction Company National Highway 3 in Uttar project for the AAI Road Development Private Limited’ Pradesh, independently at Kolkata Corporation Limited 2001 2004 2006 Received ‘Super Special’ class certification Received Crossed from Military Engineer Services certification of ISO `1,500 million in 9001:2000 Revenues Executed first independent project with the NHAI, being the four-laning of the Agra- Gwalior section of National Highway 3 in Uttar Pradesh 2 PNC INFRATECH LIMITED Corporate Overview I Management Reports I Financial Statements 2018 Awarded three more highway projects on Hybrid Awarded two contiguous packages of Annuity Model with an aggregate Bid Project Purvanchal Expressway Project on EPC mode Cost of `45130 million till July 2018 for a total cost of `25200 million Received `582.3 million early completion bonus Received `337.3 million towards the ‘Bonus for Agra-Lucknow Expressway package in Annuity’ PNC Raebareli Highways Private February 2018 from Uttar Pradesh Expressways Limited for early completion of Raebareli to Industrial Development Authority Jaunpur Section of NH-231 Project in May 2018 from National Highways Authority of India 2013 Awarded runway resurfacing project at Air Force Station, Gorakhpur 2012 Awarded and commenced toll collection on Awarded two-laning Constructed road-over bridge OMT basis of the Kanpur-Lucknow section project with paved on Ajmer Beawar Road, Old of National Highway 25, Lucknow bypass shoulders of Raebareli National Highway, including of National Highway 56A and National to Jaunpur Section of approaches at railway/ Highway 56B and Lucknow-Ayodhya section National Highway 231 kilometer 306/8-9 on Ajmer of NH 28 in Uttar Pradesh on OMT basis by in Uttar Pradesh under Saradhana Section; the NHAI for nine years from August 2013. NHDP IV Constructed Hamipur Kalpi road (State Highway 91) four-lane under Rajya Yojna Samanya, Uttar Pradesh 2009 Crossed `5000 million in Revenues; Received a contract to improve the Gurgaon-Nuh- Rajasthan Border (State Highway 13) by four laning, 2011 widening, strengthening, providing drains, widening bridges and culverts, retaining structures and other Received an investment of `1,500 miscellaneous work by the Haryana State Roads and million from NYLIM Jacob Ballas, Bridges Development Corporation Limited amounting who subscribed to 5,686,833 to `3,380 million Equity Shares Executed four-laning of Jaora- Nayagaon section on State Highway 31 in Madhya Pradesh 2008 2010 Commenced construction of power Received certification of ISO 9001:2008 Awarded two-laning with paved shoulders transmission lines comprising the contract of Kanpur Kabrai section of construction project of approximately 350 Awarded first independent BOT road National Highway 86 in Uttar Pradesh kilometers of 132/220 kv lines on a turn-key project to improve the Gwalior-Bhind basis (excluding supply of towers, conductors Madhya Pradesh/Uttar Pradesh Border Awarded project of construction of 132 and earth-wires for the Uttar Pradesh Power Road, a two-laning project through two KV S/C and 220 KV D/C Lines in Uttar Transmission Corporation Limited) sections on National Highway 92 Pradesh Annual Report 2017-18 3 4 PNC INFRATECH LIMITED Corporate Overview I Management Reports I Financial Statements THE WORLD OF PNC INFRATECH PNC Infratech Ltd (PNC) is an Infrastructure construction, development and management company; with expertise in implementation of projects including highways, bridges, flyovers, airport runways, industrial areas and power transmission Customer lines. Portfolio Our Company provides end-to-end infrastructure implementation solutions, which include engineering, procurement and construction (“EPC”) services on a fixed-sum • Ministry of Road Transport turnkey basis as well as on an item rate basis. Quite a few of the projects we execute & Highways and implement are on Design-Build- Finance-Operate-Transfer (“DBFOT”), Operate- • National Highways Maintain-Transfer (“OMT”), Hybrid Annuity Models (“HAM”). We are amongst the Authority of India niche infrastructure companies in the country that is equipped with investment, • Airports Authority of India development, construction, operation and management capabilities. • RITES Limited • Military