NAVA BHARAT VENTURES LIMITED 43rd Annual Report 2014-15 Contents COMPANY OVERVIEW About Us 2 Business Operations 3 Awards and Recognitions 4 Three Decades of Excellence 5 Financial Performance 6 Report on Corporate Social Responsibility 7 STATUTORY REPORTS Directors’ Report 14 Management Discussion and Analysis 65 Report on Corporate Governance 73 FINANCIAL STATEMENTS Standalone Independent Auditor’s Report 98 Balance Sheet 104 Statement of Profit and Loss 105 Cash Flow Statement 106 Notes 108 Salient features of the Financial Statements of 141 Subsidiaries and Associate Companies U/S 129 (3) (Form AOC-1) Consolidated Independent Auditor’s Report 143 Balance Sheet 150 Statement of Profit and Loss 151 Cash Flow Statement 152 Notes 154 Corporate Information BOARD OF DIRECTORS WHOLETIME DIRECTORS INDEPENDENT DIRECTORS SRI ASHOK DEVINENI, Chairman SRI K. BALARAMA REDDI SRI P. TRIVIKRAMA PRASAD, Managing Director Dr. E.R.C. SHEKAR SRI G.R.K. PRASAD, Executive Director Dr. M.V.G. RAO SRI C.V. DURGA PRASAD, Director (Business Development) Dr. D. NAGESWARA RAO Dr. C.V. MADHAVI CHIEF FINANCIAL OFFICER COMPANY SECRETARY SRI T. HARI BABU SRI M. SUBRAHMANYAM BOARD COMMITTEES AUDIT COMMITTEE NOMINATION AND REMUNERATION COMMITTEE CORPORATE SOCIAL Sri K.Balarama Reddi, Chairman Sri K.Balarama Reddi, Chairman RESPONSIBILITY COMMITTEE Dr. M.V.G.Rao Dr. M.V.G.Rao Sri D.Ashok, Chairman Dr. D.Nageswara Rao Dr. D.Nageswara Rao Dr. D.Nageswara Rao Dr. C.V. Madhavi STAKEHOLDERS RELATIONSHIP COMMITTEE Sri K.Balarama Reddi, Chairman Sri P.Trivikrama Prasad AUDITORS COST AUDITORS SECRETARIAL AUDITORS M/s. BRAHMAYYA & CO M/s. NARASIMHA MURTHY & CO M/s. P.S. RAO & ASSOCIATES Chartered Accountants, Hyderabad Cost Accountants, Hyderabad Company Secretaries, Hyderabad BANKERS REGISTERED OFFICE REGISTRARS & SHARE TRANSFER STATE BANK OF INDIA 6-3-1109/1 AGENTS ANDHRA BANK ‘Nava Bharat Chambers’ M/s. KARVY COMPUTERSHARE PRIVATE LIMITED BANK OF INDIA Raj Bhavan Road Hyderabad – 500 082(TG), India Karvy Selenium Tower B STATE BANK OF HYDERABAD Plot 31-32, Gachibowli Financial UCO BANK District Nanakramguda STANDARD CHARTERED BANK Hyderabad – 500 032, Telangana, India WORKS Ferro Alloy Plant (TG) FERRO ALLOY DIVISION Ferro Alloy Plant (Odisha) Paloncha – 507 154 Kharagprasad Village – 759 121 Khammam Dist. (TG) Dhenkanal Dist.(Odisha) POWER DIVISION Power Plant (TG) Power Plant (Odisha) Dharmavaram – 534 430 Paloncha – 507 154 Kharagprasad Village – 759 121 Prathipadu Mandal Khammam Dist. (TG) Dhenkanal Dist. (Odisha) East Godavari Dist. (A.P.) SUGAR DIVISION MACHINE BUILDING DIVISION Samalkot – 533 440 Nacharam East Godavari Dist.(A.P.) Hyderabad – 500 076 (TG) About Us Nava Bharat Ventures Limited, along with its subsidiaries, operates in different product-geography segments in the business verticals of power generation, ferro alloys, mining and agri-business. The Company’s asset base is spread with a high degree of efficiency. This is over India, South East Asia and Africa. complemented by a dedicated team of The Company has a successful track human resources. The Company’s core record spanning four decades. During values comprise conservation of natural this period, it has acquired expertise resources, environment protection and in design, engineering, project community development, with a special management, as well as the operation focus on health, education and skill and maintenance of power, ferro alloy enhancement. and sugar and downstream plants, VISION We will be a diversified company We will ensure that our operations Minimising the impact on with operations in different benefit the local community and environment shall be a guiding geographies and adding best value the nation, while rewarding the principle in all our business to the available natural resources. stakeholders. endeavours. 2 43rd Annual Report 2014-15 About Us | Business Operations Business Operations COMPANY OVERVIEW DOMESTIC STATUTORY REPORTS STATUTORY POWER Fuel Capacity (MW) Location Coal 264 Paloncha, Telangana *158 Kharagprasad, Odisha Bagasse 20 Dharmavaram, Andhra Pradesh Total generating capacity 442 *64 MW Power Plant synchronized with grid; commercial operation yet to commence. FERRO ALLOYS FINANCIAL STATEMENTS Product Capacity (TPA) Location Manganese Alloys 1,25,000 Paloncha, Telangana Chromium Alloys 75,000 Kharagprasad, Odisha Total installed capacity 2,00,000 SUGAR Products: White Crystal Sugar, Rectified Spirit and Ethanol Plant Capacity Location Sugar Plant 4,000 tcd Samalkot, Andhra Pradesh Distillery 20 klpd Samalkot, Andhra Pradesh Ethanol Plant 30 klpd Samalkot, Andhra Pradesh Co-gen Plant 9MW Samalkot, Andhra Pradesh INTERNATIONAL Power Mining Agri-business INTERNATIONAL PROJECT SNAPSHOT Country Activity Status Zambia Mining and power generation Coal Mine revamped and commercial production of coal commenced. 2 x 150 MW Power Plant under construction. Tanzania Commercial agro based investments In development phase. Laos Development of hydro-electric power project Feasibility studies completed. Shareholders’ and Concession agreements executed. South Africa Exploring opportunities for coal and power Exploratory stage. Nava Bharat Ventures Limited 3 Awards and Recognitions The Company received the following awards and recognitions during 2014-15: Silver Award for Best Distillery Certificate of Appreciation for 15th National Award in Andhra Pradesh for the Commendable Performance for for Excellence in Energy Season 2013-14 from The the Season 2013-14 from The Management 2014 as Excellent South Indian Sugarcane & Sugar South Indian Sugarcane & Sugar Energy Efficient Unit from Technologists’ Association (Sugar Technologists’ Association, Chennai Confederation of Indian Industry Division received this award) (Sugar Division received this award) (Sugar Division received this award) 15th National Award Regional Export Award as Star for Excellence in Energy Performer – Large Enterprise Management 2014 as Energy (Ferro Alloys) in recognition of Efficient Unit from Confederation outstanding contribution to of Indian Industry (Odisha Works Engineering Exports for 2012-13 received this award). from EEPCINDIA, Southern Region. 4 43rd Annual Report 2014-15 Awards and Recognitions | Three Decades of Excellence Three Decades of Excellence COMPANY OVERVIEW 1975 1980 1989 Commenced production of ferro Diversified into production of Commenced commercial production silicon at Paloncha, A.P. sugar and downstream products at of manganese and chrome alloys REPORTS STATUTORY Samalkot, A.P. 1997 Diversified into power generation by catering to captive requirements and selling surplus power FINANCIAL STATEMENTS 2004 2006 2010 Spread its global footprints through Company renamed as Nava Bharat Acquired a large coal mining Nava Bharat (Singapore) Pte. Limited Ventures Limited to reflect its multi- company (Maamba Collieries Limited) vertical business in Zambia Nava Bharat Ventures Limited 5 Financial Performance REVENUE EBIDTA PAT 12,039 3,588 44 11,860 66 2,383 3,030 218 11,547 2,917 36 57 1,931 32 51 1,808 2,172 205 1,425 35 23 10,438 193 193 11-12 12-13 13-14 14-15 11-12 12-13 13-14 14-15 11-12 12-13 13-14 14-15 ` Million USD Million ` Million USD Million ` Million USD Million EPS (DILUTED) (`) NET WORTH DEBT EQUITY 25,347 26.69 0.05 0.05 24,489 23,051 21,161 21.46 21.63 0.04 15.96 0.03 424 416 409 406 11-12 12-13 13-14 14-15 11-12 12-13 13-14 14-15 11-12 12-13 13-14 14-15 ` Million USD Million USD/INR-Exchange Rate 2011-12 2012-13 2013-14 2014-15 50.87 54.365 59.91 62.495 6 43rd Annual Report 2014-15 Financial Performance | Report on Corporate Social Responsibility Report on Corporate Social Responsibility COMPANY OVERVIEW PHILOSOPHY OF CSR AT NBVL The Company has implemented various CSR initiatives for the development of communities Nava Bharat Ventures Limited around its manufacturing facilities, as well as the society in general. (NBVL) believes that corporate REPORTS STATUTORY The Company has made significant contributions social responsibility is an to improve healthcare facilities, provide quality education and create livelihoods during the year integral part of its long-term under review. business strategy. The Company CSR EXPENDITURE IN FY 2014-15 aims to achieve holistic social (` Lakhs) development to ensure Healthcare 187.63 Education 59.34 FINANCIAL STATEMENTS sustainable growth. Livelihoods 175.47 Others 42.74 Total 465.18 2.01% of Avg. net profit for past three years. HEALTHCARE NAVA BHARAT EYE CENTRE (NBEC) Eye Testing at Nava Bharat Eye Centre NBEC, established at Paloncha in Khammam district in association with L V Prasad Eye Institute, provides quality eye care to patients, irrespective of their financial status. During 2014-15, about 69% of eye surgeries were conducted free of charge and 42% of outpatients were treated free. The Company has provided further funds to upgrade facilities and to meet a part of the running expenses of NBEC. Nava Bharat Ventures Limited 7 PRIMARY HEALTH CENTRE SPECIALISED MEDICAL CAMPS A Primary Health Centre (PHC) was opened last year at Nava Specialised medical camps were conducted in Charadagadia, Bharat Eye Centre to cater to the basic medical needs of the Sibapur and Kochilamada villages in Dhenkanal district of neighbouring marginalised sections. The Company extended Odisha for diagnosing diabetes and distributing medicines financial support to meet a part of the running expenditure of free of cost. A total of 110 villagers were examined and free this medical facility. medicines were distributed to 92 persons. Primary Health Centre,