The Directors have pleasure in presenting the 17th annual report
together with the audited balance sheet and profit and loss account of
your Company for the year ended March 31, 2011.
Consolidated Financial results
Being a holding company of different vertical business operations, your
Company does not have independent operating revenues other than O&M
fee, incentives and dividends, if any, from its subsidiaries, interest
and other treasury income earned on surplus funds. Following is the
summary of consolidated results of the company, its subsidiaries and
associates.
(Rs. Lakhs)
Particulars 2010-11 2009-10
Financial Performance
Operational Income 1,914,66 1,786,64
EBIDTA 513,99 468,30
Other Income 28,53 29,18
Interest & Financial Charges 263,14 217,10
Depreciation 183,64 137,12
Provision for taxes 21,32 20,01
Profit before tax and share of profits
for associate and minority interest 74,42 123,25
Add: Share of income from Associates 110,93 51,68
Add: Profit on the sale of subsidiary - -
Less: Minority Interest 30,44 19,06
Total Profit for the year 154,91 155,87
Add: Balance brought forward from
previous years 435,61 279,74
Balance available for appropriation 590,52 435,61
Appropriations
Transfer to General Reserve - -
EPS (Rupees)
Weighted Average no. of Equity Shares 1,579,210,400 1,532,189,062
Basic and Diluted 0.98 1.02
Financial Position
Fixed Assets ( Net of Depreciation) 3,671,88 3,948,32
Cash and Cash Equivalent 126,88 38,09
Net Current Assets 397,20 242,00
Total Assets 10,316,39 8,119,15
Equity 157,92 157,92
Reserves 3,228,86 2,998,00
Net worth 3,386,78 3,155,92
Our total income increased by 7% to Rs.1,943.19 Crores from Rs.1,815.82
Crores in the previous year. The Power assets contributed an income of
Rs.1,712.93 Crores (88.15% of total income) compared to Rs.1,603.28
Crores in the previous year. This increase is mainly attributable to
full year operation of Jegurupadu Phase II and Gautami Power Plants in
the current year. The Transportation asset contributed an income of
Rs.189.16 Crores (9.73% of total income) compared to Rs.170.75 Crores
in the previous year. The other segment contributed Rs.41.10 Crores
(2.12% of total income) compared to Rs.41.79 Crores in the previous
year. The Airport assets (Mumbai and Bangalore Airports) as the
associates of the company have contributed to net profit of Rs.110.93
Crores as compared to Rs.51.68 Crores in the previous year. The
consolidated net profit after tax was Rs.154.91 Crores as against
Rs.155.87 Crores in the previous year.
Dividend
Apart from implementing the existing or new projects and / their
expansions under different vertical businesses, through its
subsidiaries and associate companies, your company is also exploring
various business opportunities. In this endeavour, it is necessary to
conserve the funds to meet the investment opportunities, which your
board believes would enhance the shareholders value in the long term.
Therefore, your Board has not recommended any dividend for the
financial year 2010-2011.
Subsidiaries
Subsidiaries of your Company are predominantly spread across 3 main
vertical business operations i.e., Energy, Airport and Transportation
verticals. In addition, your Company has other subsidiaries, which are
engaged in Oil & Gas and Industrial Park among others. Having completed
the creation of separate business verticals, your Company as on March
31, 2011 has 8 direct subsidiaries, 12 step down subsidiaries and 3
associate companies. A list of these companies is provided separately
as Annexure A to this report.
In terms of section 212 of the Companies Act, 1956, your Company is
required to attach the directors report, balance sheets, profit and
loss account of its subsidiary companies to its Annual Report. However,
the Ministry of Corporate Affairs (MCA), Government of India, New Delhi
vide its Circular No.2/2011, dated: 08-02-2011 has granted a general
exemption to all the Companies for not attaching the above documents of
subsidiaries with the Annual Report of the Holding Company, subject to
compliance of the conditions specified therein. As required under the
said general circular, the Board of directors of your Company at its
meeting held on May 7, 2011 gave its specific consent for not attaching
the balance sheets of its subsidiaries, as they would be made available
to its members at the companys website.
In terms of the said notification of the MCA, a summary of the
financial information of each of the subsidiaries of your Company is
provided as Annexure B to this report. Any member intends to have a
certified copy of the Balance Sheet and other financial statements of
these subsidiaries may write to the Company Secretary. Accordingly,
this annual report does not contain the reports and other statements of
the subsidiary companies. These documents will also be available for
inspection during the business hours at the registered office of the
company and also at the registered offices of the respective subsidiary
companies.
Performance of the existing assets
i) Energy
Currently we operate 900 MW gas based power plants through step down
subsidiaries i.e. GVK Industries Limited Jegurupadu Phase-I (216 MW),
Phase-II (220 MW) and GVK Gautami Power Limited (464 MW). Following is
the gist of performance of these assets.
GVK Industries Limited
Phase-I
During the year Jegurupadu Phase I was operated at a Plant Availability
Factor (PAF) and Plant Load Factor (PLF) of 95.94% and 76.62%
respectively (PY 98.58 % and 89.56%) and reported a loss of Rs.29.03
Crores (PY Rs.0.15 Crores). The decline in PAF, PLF and profits are
mainly attributable to non availability of natural gas. The energy
generated during the year was 1455.32 Million kWh (PY 1685.82 Million
kWh) out of which 1422.74 Million kWh was exported and 32.58 MUs were
for Auxiliary Consumption. The Station Heat Rate during the year was
2007 kcal/kWh as against 1968 kcal/kWh in the previous year.
Phase-II
During the year Jegurupadu Phase II was operated at a PAF and PLF of
89.17% and 81.75% respectively (PY 95.29% and 90.35%) and reported a
profit after tax of Rs.20.74 Crores (PY Rs.25.26 Crores). The decline
in PAF, PLF and profits are mainly attributable to non availability of
natural gas. The energy generated during the year was 1638.85 Million
kWh (PY 1742.47 Million kWh) out of which 1606.96 Million kWh was
exported and 31.89 MUs were for Auxiliary Consumption. The Station Heat
Rate during the year was 1824 kcal/kWh as against 1808 kcal/kWh in the
previous year.
GVK Gautami Power Limited
Phase-I
During the year Gautami Phase I was operated at a PAF and PLF of 88.64%
and 83.39% respectively (PY 91.47% and 88.20%) and reported a profit
after tax of Rs.76.58 Crores (PY Rs.28.14 Crores) showing a growth of
272.14%. The energy generated during the year was 3422.90 Million kWh
(PY 2937.98 Million kWh) out of which 3346.76 Million kWh was exported
and 76.14 MUs were for Auxiliary Consumption. The Station Heat Rate
during the year was 1825.60 kcal/kWh as against 1798.98 kcal/ kWh in
the previous year.
ii) Airport
Under Airport asset, currently we operate Chhatrapati Shivaji
International Airport (CSIA), Mumbai (a brown field project) and
Bengaluru International Airport, Bengaluru (a green field project).
Following is the gist of performance of these assets.
Mumbai International Airport Pvt. Ltd (MIAL)
During the year MIAL handled 29.07 Mio (PY 25.61 Mio) passenger
traffic, handled 242,659 ATMs (PY 229,799 ATMs) and 340,260 MT (PY
250,237 MT) of Cargo reflecting a growth of 14%, 5.6% and 36%
respectively. MIAL reported a profit after tax of Rs.197.04 Crores for
the financial year 2010-2011 (PY Rs.132.80 Crores) showing a growth of
48%. MIAL had completed 31 of the 32 mandatory projects under OMDA as
of December 2010. The only mandatory project remaining to be completed
is the S.09 International Terminal Expansion - South West Pier which is
pending due to the delay in handing over of Chhatrapati Shivaji Maharaj
statue area. During the year Terminal 1C was inaugurated with a lot of
retail offerings. CSIA has become the first Indian airport website, to
offer mobile airport portal.
Bangalore International Airport Ltd. (BIAL)
During the year BIAL handled 11.63 Mio (PY 9.92 Mio) passenger traffic,
handled 111,787 ATMs (PY 104,653 ATMs) and 222,783 MT (PY 174,648 MT)
of Cargo reflecting a growth of 17%, 7% and 28% respectively. BIAL
reported a profit after tax of Rs.132.10 Crores for the financial year
2010-2011 (PY Rs.77.70 Crores) showing a growth of 70%. A new and
spacious VIP lounge at the Airport has been opened in January 2011. The
expansion of the existing terminal 1 has been designed to enhance the
operational performance in order to handle, inter-alia, the increase of
passenger traffic from the current 11.2 million passengers to
approximately 17.2 million passengers annually up to the year 2015. The
Project is scheduled to be completed within a period of 18 months from
the commencement of its construction.
During the year 2010-2011, Mumbai and Bengaluru airports together have
handled passenger traffic of 40.7 million. With these two busy airports
under our management, GVK would be Indias biggest airport operator in
the private sector.
iii) Transportation
A 90.4 Km Jaipur - Kishangarh Expressway on NH-8 connecting Mumbai and
New Delhi is a BOT project and is a part the prestigious Golden
Quadrilateral Project undertaken by the Central Government of India
through National Highways Authority of India (NHAI) connecting all four
major metro cities i.e. New Delhi, Mumbai, Chennai and Kolkata.
Following is the gist of performance of this asset.
GVK Jaipur Expressway Pvt Ltd.
Toll collected by the Company during the year was Rs.189.16 Crores (PY
Rs.170.75 Crores) registering a growth of 11%. The profit after tax is
at Rs.80.02 Crores for the year (PY Rs.58.96 Crores) showing a growth
of 35.73%. Multi Axis vehicles alone have contributed 73% of the toll
revenue collections during the year. This is the first road project in
India to have shared certain agreed percentage of excess toll revenue
over the projected toll fee with NHAI.
Assets under construction
i) Energy
Alaknanda Hydro Power Company Limited
The 330MW Alaknanda Hydro Electrc Power Project on the river Alaknanda,
Srinagar, Uttarakhand is being implemented with an estimated project
cost of Rs.3,675 Crores. The Excavation in the Power House, the Forebay
work, penstock work are fully completed and the 335000 M3 (i.e. 61%) of
concrete for dam is complete. All other major works at project are
being completed as scheduled and the project is expected to be
commissioned by 2012.
GVK Power (Goindwal Sahib) Limited
The 540MW the thermal (coal based) power project in Tarn Taran
district, Punjab is being set up at an estimated cost of Rs.3,200
Crores. The Power House building piling work and bunker bay concrete
piling and raw water reservoir excavation work completed to the extent
of 85% and BTG works are in full swing and the project is expected to
be commissioned by 2013.
ii) Transportation
GVK Deoli Kota Expressway Private Limited
The Company was incorporated as a SPV during April 2010, to implement
and augment the existing Deoli-Kota Section of National Highway (NH)
No. 12 from Km 165 to Junction of NH - 76 on Kota Bypass (approximately
83.04 Km) in the State of Rajasthan by four laning on design, build,
finance, operate and transfer (DBFOT) basis and has signed the
financing documents on January 5, 2011 with a consortium of lenders for
an estimated project cost of Rs.823.45 Crores with debt equity of
80:20. The project would become operational within 30 months as per the
Concession Agreement.
GVK Bagodara Vasad Expressway Private Limited
The Company was incorporated as a SPV during February 2011, to
implement the Six Laning of existing three lanes of Bagodara - Wataman
- Tarapur - Vasad Road Project (State Highway No.8, Km 0/0 to Km 101/9)
in the State of Gujarat on BOT Basis. Requisite Concession Agreement
has been executed with the Gujarat State Road Development Corporation.
Cost of the project is estimated at Rs.1200 Crores. The project would
become operational within 30 months as per the Concession Agreement.
Other Developments
i) Energy
During the year your Company has transferred its entire shareholding in
the power assets viz GVK Industries Limited, GVK Gautami Power Limited,
GVK Power (Goindwal Sahib) Limited, Alaknanda Hydro Power Company
Limited, GVK Coal (Tokisud) Company Private Limited, to GVK Energy
Limited, a wholly owned subsidiary of the Company for a consideration
of Rs.1333.17 Crores. With this, the creation of energy vertical has
been completed in all respects.
During November 2010, your Company through its subsidiary GVK Energy
Limited has entered into an Investment Agreement with M/s. 3i India
Infrastructure Fund, Actis Infrastructure India PCC Limited and an
affiliate of the Government of Singapore Investment Corporation (GIC)
for a total Private Equity investment of Rs.1498 Crores for an ultimate
equity dilution of 24.97% in GVK Energy Limited.
ii) Airport
During the year your Company has signed an agreement to acquire 13.5%
additional equity stake in Mumbai International Airport Limited (MIAL),
from Bid Services Division (Mauritius) Limited, through a step down
subsidiary, subject to regulatory approvals. On completion of this
acquisition, equity shareholding of the GVK Group stands at 50.5% from
the existing 37% of the total paid-up share capital in MIAL.
iii) Transportation
During the year, your Company has formed two SPVs as subsidiaries of
GVK Transportation Private Limited, a wholly owned subsidiary of the
Company. Further, your Company on April 6, 2011, as a concluding
transaction, has transferred its entire shareholding held in the GVK
Jaipur Expressway Private Limited to GVK Transportation Private
Limited, a wholly owned subsidiary of the Company for a consideration
of Rs.274.01 Crores. With this, the creation of transportation vertical
has been completed in all respects.
New Opportunities
i) Energy
During June 2010, your Company through a step down subsidiary, GVK
Ratle Hydro Electric Project Private Limited (SPV), has signed the
Power Purchase Agreement, with Power Development Department, Govt. of
Jammu & Kashmir for implementing the 810MW Ratle Hydro Electric Project
on the river Chenab, Kishtwar District, in the State of Jammu &
Kashmir. The cost of the project is estimated at Rs.5368 Crores and
expected to be operational by March 2017.
During February 2011 your Company has executed a Memorandum of
Understanding (MOU) with the Punjab State Power Corporation Limited for
implementation of 1320 MW Power Project (Phase-II), in the State of
Punjab. For this purpose GVK Power (Khadur Sahib) Private Limited, a
SPV has been incorporated as a step down subsidiary through GVK Energy
Limited to implement the Coal based thermal power project with super
critical technology, proposed to be developed in the additional land at
the existing Goindwal Sahib site in Tarn Taran District, Punjab.
ii) Airport
Your Companys capabilities, expertise and strong track record in the
airports sector helped getting two international airports to its
portfolio. Your Company has signed two MoUs with Indonesian Government
during its Presidents State visit to India in January 2011 to develop
green field international airports in North Bali and Yogyakarta (Java),
Indonesia. Bali and Java are the prime destinations for tourist traffic
from both Europe and Asia. The signing of these MoUs marks a very
significant milestone for GVK and your Company is confident that these
agreements will yield significant synergies.
Financial Statements
The audited stand alone and consolidated financial statements of the
company along with its subsidiary companies are attached herewith and
form part of this annual report. These have been prepared in accordance
with the provisions of the Companies Act, 1956, the Listing Agreement,
the Accounting Standard (AS-21) on Consolidated Financial Statements
and the Accounting Standard (AS-23) on Accounting for Investments in
Associates.
Awards and recognitions
Following are some of the awards and recognitions that the promoters
and the associate companies received during the current year. Dr. G V
Krishna Reddy, Chairman & Managing Director of your company has been
conferred with the prestigious Padma Bhushan Award for the Year 2011.
The award was presented by Smt. Prathibha Devi Singh Patil, Honble
President of India at a glittering function held on March 25, 2011. Our
beloved Chairman has received this award towards his contribution to
the society in the category of Trade and Industry.
Mr. G V Sanjay Reddy, Vice Chairman of your Company has been awarded as
Emerging Business Leader of the Year by AIMA Managing India Awards
2011.
Chhatrapati Shivaji International Airport (CSIA) emerged as one of the
top performing airports in the annual ACI Airport Service Quality
Awards for 2010. It was rated the second best airport worldwide for
airports in the 15-25 million passengers per annum (mppa) category as
announced by ACI.
Bangalore International Airport Limited has bagged the prestigious
Best Airport India award at the Skytrax World Airport Awards in
Copenhagen, Denmark.
Liquidity
Your companys ability to raise finance for various projects of the
Company has been its strength and is able to tie up the required
financial assistance from the lending institutions even in the adverse
market conditions. Surplus funds are deposited with banks, highly rated
financial institutions and liquid mutual funds. These funds can be
liquidated at a very short notice to meet the requirements of the
company as and when needed.
Corporate Governance
Your Company continues to practice the best of the Corporate Governance
policies. Your Company is in compliance with the recommendations of the
Narayana Murthy Committee on Corporate Governance constituted by the
Securities and Exchange Board of India (SEBI). A certificate, from a
Company Secretary in whole time practice, on compliance with the
mandatory recommendations of the committee is provided in the annexure
to the Directors Report. As required under Clause 49 of the Listing
Agreement with the Stock Exchanges, a separate section on Corporate
Governance is attached to this report.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility initiatives are implemented through GVK
Foundation, the CSR arm of the GVK Group. The Foundation is involved
mainly in the areas of education, health and hygiene; community-based
programmes; empowerment and entrepreneurship development, arts, music,
sports and various social economical and cultural activities. It
reaches out with the objective of improving the quality of life of the
economically deprived people in the places where the Group has a
presence.
To further the CSR objective, GVK has taken over the management of
Emergency Management and Research Institute (EMRI), a non-profit
organization during May, 2009 to provide integrated emergency response
service across the Country under public private partnership mode. Since
then, the Foundation has been funding GVK EMRI.
Highlights of GVK EMRI
Operates through 11 States in the country and serves nearly 500 million
people. Currently, there are about 2802 ambulances to provide pre
hospital care which has saved Lives of approximately 323,924 people.
GVK EMRI has partnered with global organizations (Stanford, CMU, 9-1-1,
STC, AAPI, AAEMI, Geomed etc.) to strengthen its competencies, skills
and to share the best international practices.
Government of Andhra Pradesh has identified GVK EMRI as out sourcing
agency to run Fixed Day Health Services (FDHS) popularly known as
Hospital on wheels in the districts of Srikakulam, Vijayanagaram,
Visakhapatnam, Medak, Adilabad & Chittor. GVK EMRI has introduced boat
ambulances in the state of Assam to facilitate Inter Facility Transfer
requests from rural embankment regions of Brahmaputra River. Launched
its services in Himachal Pradesh in the month of December 2010 with 100
ambulances. GVK EMRI has signed PPP agreement with the Government of
Chattisgarh on May 17, 2010 for rendering emergency response services
by deploying 172 ambulances.
Management Discussion and Analysis
A separate report on the Management Discussion and Analysis of the
financial position and the results of operations of the Company for the
year under review is annexed to this report as required under Clause 49
of the Listing Agreement with the Stock Exchanges
Directors
Appointment by rotation
In accordance with the provisions of the Companies Act, 1956 read with
the Articles of Association of the Company Mr. K N Shenoy,
Mr. Pradip Baijal, Dr. A Ramakrishna and Mr. P Abraham, Directors of
the company will retire by rotation at this meeting and being eligible,
your Company recommends their re-appointment.
The Board of Directors at their meeting held on May 7, 2011
re-appointed Mr. A Issac George as Director & Chief Financial Officer
of the Company for a further period of 3 years with effect from April
1, 2011. Your Company recommends his re-appointment.
Cessation
During the year Mr. Sanjay Narayen, Director has expressed his
inability to continue as a director due to his other commitments. The
Board of directors at its meeting held on May 7, 2011 has accepted the
same and placed on record its appreciation for the services rendered by
Mr. Sanjay Narayen, during his tenure as director of the company.
Directors Responsibilities Statement
Pursuant to the requirements specified under Section 217 (2AA) of the
Companies Act, 1956, with respect to the Directors Responsibilities
Statement, it is hereby confirmed that;
i. in the preparation of the annual accounts for the financial year
ended March 31, 2011, the applicable Accounting Standards have been
followed along with proper explanations relating to material
departures;
ii. the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2011 and of the profit or loss of the
Company for the said period;
iii. that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company, for preventing and detecting fraud and other
irregularities; and
iv. the directors had prepared the annual accounts for the financial
year ended March 31, 2011 on a going concern basis.
Auditors
M/s. S R Batliboi & Associates, the Statutory Auditors of the Company
will retire at the conclusion of this Annual General Meeting. They
have offered themselves for reappointment as statutory auditors and
have confirmed that their re-appointment, if made, would be within the
limits prescribed under section 224(1B) of the Companies Act, 1956.
The Notes to Accounts forming part of the financial statements are self
explanatory and need no further explanation.
Audit Committee constitution
In compliance with the provisions of the Section 292A of the Companies
Act, 1956 and the listing agreement entered into with the stock
exchanges, the company had already constituted an Audit Committee
during 2005 itself consisting of highly qualified and experienced
members from various fields. The committee consists of four Independent
Directors. The Chairman of the committee Mr. K N Shenoy, is an
Independent Director and the committee meets periodically to review the
quarterly financial statements and recommends its findings to the Board
apart from taking action independently whenever required.
Other Information
The Audit Committee of the Company has reviewed the audited financial
statements for the year under review at its meeting held on May 6, 2011
and recommended the same to the Board. The Board of Directors have
taken the same on record at its meeting held on May 7, 2011.
Internal Control Systems and their adequacy
The Management continuously reviews the internal control systems and
procedures for the efficient conduct of the Companys business. The
Company adheres to the prescribed guidelines with respect to the
transactions, financial reporting and ensures that all its assets are
safeguarded and protected against losses. The Internal Auditor of the
Company conducts the audit on regular basis and the Audit Committee
actively reviews internal audit reports and effectiveness of internal
control systems.
Internal Control Systems are implemented to safeguard the Companys
assets from loss or damage, to keep constant check on the cost
structure, to prevent revenue leakages, to provide adequate financial
and accounting controls and implement accounting standards.
Public Deposits
During the year under review, your company has neither invited nor
accepted any fixed deposits from the public.
Particulars of Employees
As required under the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the names and other particulars of employee(s) are
set out in the Annexure C to this report.
Foreign Exchange Earnings and Outgo
In accordance with the provisions of Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, the information relating to
foreign exchange earnings and outgo is provided under Notes to the
Balance Sheet and Profit and Loss Account.
Acknowledgements
On behalf of the Directors of the Company, I would like to place on
record my deep appreciation to all the Central and State
Government Authorities, Regulatory bodies, Banks, Financial
Institutions and every Stakeholder of the Company.
I also thank all my colleagues on the Board for their timely guidance
and support extended to me. I personally appreciate and place on record
the sincere services rendered by all the employees and their families
for making the company what it is today. I sincerely thank everyone for
their support and reiterate humbly that I have accepted the Padma
Bhushan award on your behalf.
For and on behalf of the Board of Directors
Place: Hyderabad Dr G V Krishna Reddy
Date : May 7, 2011 Chairman & Managing Director
|