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Hindustan Construction Company Directors Report, Hind Constr Reports by Directors
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Hindustan Construction Company
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Download Annual Report PDF Format 2013 | 2012 | 2011
Directors Report Year End : Mar '13    Mar 12
To, The Members of Hindustan Construction Co. Ltd.
 
 1.  Report
 
 The Directors are pleased to present the 87th Annual Report together
 with the Audited Accounts for the year ended March 31, 2013.
 
 2.  Financial Highlights
 
                                       Year ended            Year ended
 Particulars                       March 31, 2013        March 31, 2012
                                        Rs. crore             Rs. crore
  
 Turnover                                3,837.29               4002.76
 
 Profit before Interest,
 Depreciation, Exceptional
 Items and Tax                             378.57                439.80
 
 Less: Interest               529.67                  543.16
 
 Depreciation                 163.40                  162.10
 
 Exceptional Items            (15.58)      677.49     166.32     871.58
 
 Add: Other Income                         119.91                122.83
 
 Add/Less: Exchange 
 Gain/(Loss)                               (14.57)                (9.53)
 
 Profit/(Loss) before Tax                 (193.58)              (318.48)
 
 Less: Deferred Tax 
 Charge/(Credit)                           (55.94)               (96.23)
 
 Profit/(Loss) after Tax                  (137.64)              (222.25)
 
 Add: Balance brought 
 forward from last year                    126.00                347.83
 
 Transfer from Debenture
 Redemption Reserve                             -                 16.67
 
 Amount available for 
 Appropriation                             (11.64)               142.25
 
 Less: Appropriations
 
 Dividend                                       -          -
 
 Tax on Dividend                                -          -
 
 Debenture Redemption Reserve                   -      16.25
 
 Transfer to General Reserve                    -          -      16.25
 
 Balance carried to Balance Sheet          (11.64)               126.00
 
 3.  Dividend
 
 In view of the losses incurred by the Company, your Directors have not
 recommended any dividend for the financial year ended March 31, 2013.
 
 4.  Operations
 
 The turnover of the Company at Rs. 3,837 crore has shown a decrease of
 4.1 % as compared to Rs. 4,003 crore for the previous year. The loss
 before tax is Rs. 193.6 crore (including exceptional item) as compared
 to Rs. 318.5 crore for the previous year.
 
 As your Company was growing at CAGR of over 20% during 2002 to 2011, it
 had considerably grown its balance sheet, including debt. In the
 present phase of economic slowdown, it became difficult to service this
 debt and hence it was imperative to restructure the Company''s debt.
 Therefore the Company opted for a formal method of loan restructuring
 and referred the total debt of around Rs. 3,300 crore along with
 working capital fund based and non-fund based limits of Rs. 6800 crore
 to the Corporate Debt Restructuring (CDR) Cell under the regulatory
 framework of the Reserve Bank of India in March 2012. The financial
 restructuring package for your Company was approved by the CDR Cell in
 June 2012 and since then the implementation of the package has
 commenced.
 
 The salient features of the CDR package are:
 
 - Re-schedulement of Term loan and short term loans so as to be
 repayable in 2 years moratorium and 8 years of repayment
 
 - Interest rate has been reduced to 11% per annum yield equalisation
 over 10 year tenure
 
 - Funded interest for nine months period from January 2012 to
 September 2012
 
 - Additional working capital borrowing as per requirement has been
 sanctioned
 
 - Waiver of penal charges from the cut off date to the date of
 implementation of the package
 
 The CDR gives your Company critical support to tide over the present
 difficult business environment. The decision of the banks to consider
 and approve CDR also reflects the faith these institutions have in the
 long term business model of the Company.
 
 Your Directors are pleased to inform that during the year under report,
 the Company secured the following major contracts.
 
 - Tunnel T48 of Udhampur Srinagar Baramulla New BG railway line, J&K
 Contract Value: Rs. 884 crore
 
 - Narmada Extra dosed bridge, Gujarat Contract Value: Rs. 650 crore
 
 - Delhi MRTS Phase III, Janakpuri West to Palam, New Delhi Contract
 Value: Rs. 866 crore
 
 - Delhi MRTS Phase III, Shalimar Bagh to Netaji Subhash Place New
 Delhi Contract Value: Rs. 373 crore
 
 The total balance value of works on hand as on March 31, 2013 is Rs.
 14,935 crore.
 
 Decisions are awaited from various clients for tenders submitted by the
 Company (Directly or in JV) for 10 projects amounting to about Rs.
 3,558 crore. Tenders for various packages for 19 projects worth about
 Rs. 12,883 crore are expected to be submitted in the near future.  The
 Company has also submitted prequalification bids for 17 projects worth
 over Rs. 13,427 crore, which are currently under evaluation. The
 Company is confident of securing a sizeable share of these new
 projects.
 
 Operations of Subsidiaries
 
 i) Lavasa Corporation Ltd. - Integrated Urban Development & Management
 
 a) Operations
 
 Lavasa has kept its rationale of developing an inclusive city for all
 and is tailoring partnerships and tie ups with global leaders.  Tie-ups
 continued strongly at Lavasa through 2012-13 and many of these projects
 are fast moving towards completion.
 
 In the hospitality space, the Accor group is successfully running
 Mercure Lavasa and the 1500 plenary capacity Lavasa International
 Convention Centre (LICC). Novotel, a new brand from the Accor group -
 is scheduled for completion by April 2014. Projects with renowned
 hospitality players like Pullman, Hilton, Taj Vivanta, Holiday Inn,
 Holiday Inn Express, Oakwood, Langham Place and Eaton among others are
 slated to follow in quick succession.
 
 As for the existing hospitality projects, Ekaant - The Retreat and
 Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select
 Dasve in its fifth year of successful operations will soon open one
 more hotel in Lavasa. Dasvino Town & Country Club, launched in early
 2010 is growing steadily. In the tourism space, Lakeshore Watersports,
 Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also
 functioning successfully. Site preparatory work for Space World, Asia''s
 first space edutainment centre is well underway and is on course for
 opening in 2015. MoU''s have been signed with Tennis Australia and
 Manchester City Football Club. Additionally agreements have also been
 signed to set up training facilities with Hockey Australia, Sir Nick
 Faldo for Golf and Sir Steve Redgrave for a Rowing Academy.
 
 On the retail front, a significant area has already been leased.
 Restaurants like Subway, Cafe Coffee Day, Baskin Robin, All American
 Diner and others have already commenced operations. In addition to F&B
 outlets, many other tie-ups that have been finalized in the retail
 segment include The Orange Ox (handicrafts), Cinnamon Crocodile (bath
 and spa products), Fun Square Digital Cinema, Smokin Joe''s Pizza,
 Adidas Store and Kareems Restaurant.
 
 Lavasa is in advance stage of discussion with iDream to create an all
 Lavasa tourism plan including a historical theme park. Significant
 progress was also made in the education space. Christel House Lavasa is
 into its second year of operations with 269 students and in 2012-13
 Phase 2 of Christel House Lavasa was launched.
 
 Ecole Hoteliere Lavasa started its fourth batch in 2013-14. The first
 batch will receive academic certification from Ecole hoteliere de
 Lausanne this year. Educomp has signed MOU with infinity group of
 Kolkata and is proposing to bring Duhrum school of UK as k12 school or
 will start millennium international school by 2014-15 in Knowledge
 Vistas Limited.  GREAT (INDIA) in collaboration with Australian Retail
 College, which is a leader in retail training in Australia is planning
 to open a retail college at Lavasa. Other educational partners like
 Symbiosis Institute (Pune) and Christ University (Bangalore) are also
 in the process of launching their programs. Discussions are on to
 establish North Hampton University at Lavasa by 2014-15.
 
 Lavasa has continued to enjoy healthy sales in residential and
 commercial space. Positive sales trend continued through the year and
 possession was given to 250 plus residential units in Dasve. In
 institutional sales the prime focus for the year has been on
 collections and activation of sites. Symbiosis Institute, State Bank of
 India and the proposed Ramada Hotel have submitted their plans for
 approval.
 
 For the year ahead a new concept ''built- to-suit'' that offers a
 seamless service to institutions right from purchasing land to
 executing the project has been conceptualized. On the retail front
 revenue collections have seen a phenomenal 56% increase YoY. Endeavor
 to boost the work economy at Lavasa will gain momentum in the next
 year.
 
 Lavasa has continued its focus on branding and communication activities
 in 2012 -13.  Emphasis through the year was on communicating that
 development work at Lavasa has commenced with right earnest, raise
 awareness about the planned city and its advantages.
 
 Through the year over 250 journalists from print, TV, news wires and
 web media from Mumbai, Pune and Lavasa region visited Lavasa. A new
 advertisement campaign was launched in May 2012 to promote the second
 town Mugaon as a residential and edutainment hub. In August 2012 a new
 brand campaign capturing different facets of ''Life in Lavasa'' was
 launched. The next phase of brand campaign was launched on October 28,
 2012. Over a three month period, the series of advertisements
 communicated city positioning and scale and also talked about
 advantages of Lavasa city.
 
 To promote tourism, the Lavasa Holidays Summer Special (April to June
 2012), Mesmerizing Monsoon (July to Sept 2012) and Lavasa Holidays
 Festive Fiesta (Oct to Dec 2012) tour packages were conceptualized and
 offered to tourists.
 
 On an average close to 80,000 tourists visited Lavasa every month from
 July to September 2012.  The footfall in August at 94,143 tourists was
 the highest ever in Lavasa''s history.
 
 Lavasa won the ''Most promising new Destination'' and the ''Best Print
 Promotional Material'' awards at the premiere industry event Travel and
 Tourism Fair held in Mumbai and Pune.
 
 Strategic and design support to SPVs was provided on a need basis. The
 fifth edition of the signature brand event Lavasa Women''s Drive was
 held on February 24, 2013. This year the ''Lavasa Women''s Drive - Women
 with a drive awards'' were presented to Dr. Anagha Amte (health care),
 Kanan Dhru (governance), Hina Shah (women welfare), Sabbah Haji
 (education) and Sakshi Kumar (women''s empowerment). Social worker and
 activist, Sindhutai Sapkal was felicitated with a special recognition
 award for her exemplary work.
 
 Digital and social media channels were leveraged primarily for
 engagement and for information dissemination. The channels were
 extensively used to promote events, respond to queries and initiate
 conversations on platforms like travel, tourism and discussion forums
 on urbanization.
 
 In 2012-13, the Public Relations campaign focused on building
 preference and restoring customer confidence in the project. Meetings
 with senior editors in Mumbai and Pune and the constant engagement with
 beat reporters in Mumbai and Pune led to better appreciation of
 Company''s stand on issues. Visits of eminent personalities like Chief
 Ministers of Gujarat and Punjab and promotional initiatives of various
 SPVs like Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town &
 Country Club and X Thrill were publicized through news stories,
 editorial feature stories and photo features.
 
 Each month Lavasa looks, feels and acts more like a city. The city of
 Lavasa now has a new post office, a new school, a hospital and more
 than a dozen food and beverage establishments open for business. It
 also has four operating hotels with three more under construction, a
 fuel station, two banks, a convention centre, a public safety centre
 with a citizen call centre, pharmacy, rental housing, games arcade,
 watersports facility, a club, public transport system. Building the
 infrastructure right, from the beginning, is a key strategy to ensuring
 long-term livability. The drinking water at Lavasa is fit for
 consumption, straight from the tap, without the need for additional
 filtration and the sewage is treated as per required standards before
 being reused for irrigation and other non-potable uses. Lavasa''s power
 distribution grid is nearly 99% reliable and the young city is already
 on the cutting edge of urban environmental sustainability initiatives.
 The e-governance portal will play a major role in communicating with
 citizens and providing round the clock services.
 
 A round the clock Lavasa Citizen Call Centre set up this year,
 envisions to make the lives of the citizens and visitors easy and
 convenient.
 
 Lavasa has completed the purchase of 10423.50 acres of land and is in
 the process of concluding the sale deed in 2184 acres for which
 agreements were signed. Steps to reach an overall land purchase target
 of 18000 acres are in progress.
 
 Lavasa continues to regularly monitor environmental aspects such as air
 quality, water quality and soil quality are being carried out as per
 MoEF guidelines. For slope protection and enhancing the greenery within
 the region, soil bioengineering (biodegradable coir mats have been
 applied over the slopes) and plantation of stumps has been done.
 Hydroseeding & manual seeding was also carried out for slope
 maintenance and a total area of more than 500 acres has been covered to
 date. Indigenous Tree plantation of around 47,500 tree saplings was
 carried out in Mugaon and Bohini.
 
 Techno-commercial evaluation of renewable sources of energy feasible at
 Lavasa is being carried out by TERI (The Energy and Resources
 Institute). Sustainable reporting under GRI guidelines is underway.
 Lavasa is also undergoing the process for Green Certification of its
 development under IGBC (Indian Green Building Council) - Green Township
 program.
 
 First Town Dasve is ready with all basic infrastructure, such as access
 roads, internal roads, water treatment plant, water distribution
 network, sewage network, sewage treatment plant, telecom network and
 services is operational. Work of the Commercial Business Park, retail
 and hostel building, Novotel Hotel, LEH campus, Phase II of the
 Christel House Lavasa and Christ University is progressing well.
 
 Work on the infrastructure for the second town of Mugaon has been
 accelerated.
 
 Work on utilities like water, sewer, power, data lines and on the
 approach road is in progress. Work on 16 buildings comprising of 462
 apartments at Mugaon has commenced using a new technology - Formblock,
 and is expected to be completed in next 18 months.  Work on another 9
 buildings consisting of 268 apartments will be started by May 2013.
 
 Lavasa has also initiated a number of development and empowerment
 programs were initiated for the local community by Lavasa. Some of the
 key initiatives include provision of treated drinking water to 12
 villages in the project area at 65 locations on a daily basis, helping
 villages avail benefits of Government drinking water scheme, teacher
 training workshops, aptitude tests and counseling for SSC students;
 building of school buildings and sanitation blocks at village schools
 and starting the Apollo Lavasa Primary Health Centre at Bhoini.
 
 b) Status update on Environment Clearance from Ministry of Environment
 and Forests (MoEF)
 
 On November 25, 2010 Ministry of Environment & Forests (MoEF), had
 issued Show Cause Notice (SCN) to Lavasa, under Section 5 of the
 Environment (Protection) Act, 1986 (EP Act) alleging violations of the
 Environmental Impact Assessment notifications of 1994 as amended in
 2004 and superseded in 2006 (EIA Notifications) and directed your
 Company to show cause within 15 days as to why the alleged unauthorized
 structures at Lavasa site be not removed in entirety and pending the
 decision by MoEF, it directed Lavasa to maintain status-quo ante for
 construction and/or development.
 
 Lavasa replied to MoEF and then filed a Writ Petition (WP) being No.
 9448 of 2010 in the Bombay High Court seeking inter alia quashing of
 the said SCN. Vide its order dated December 22, 2010, the Hon''ble Court
 admitted WP and directed MoEF to visit Lavasa''s project and pass an
 order.
 
 The MoEF team visited Lavasa Site and has given hearings. On January
 17, 2011 MoEF passed order and observed that Lavasa is in violation of
 EIA Notifications. By the said order status quo on construction was
 continued.  However, MoEF stated that it is prepared to consider the
 project on merits.
 
 On January 24, 2011, Lavasa filed another WP being No. 811 of 2011 in
 Bombay High Court challenging the aforesaid impugned order dated
 January 17, 2011.
 
 Lavasa as per the MoEF''s order submitted various documents to MoEF,
 from time to time. In addition, Lavasa submitted applications for grant
 of Environment Clearance (EC) for Phase I and Phase II.
 
 Representatives of Lavasa have from time to time attended total five
 (5) meetings of the Expert Appraisal Committee (''EAC'') at New Delhi. As
 per the Minutes of the 101st meeting held on May 31, 2011, the EAC
 recommended the proposal for EC for the 1st Phase (2000 ha) with the
 conditions mentioned therein.
 
 On June 10, 2011 MoEF directed to the Government of Maharashtra to
 initiate necessary legal action under EP Act against Lavasa.
 
 As the MoEF did not passed the EC order till 30th August, 2011, Lavasa
 fled another WP being No. 7276 of 2011 in the Hon''ble Bombay High Court
 seeking directions interaliathat (a) it be declared that Lavasa has
 been granted / deemed to have been granted EC for Phase I of the
 project.
 
 On November 4, 2011, Maharashtra Pollution Control Board (MPCB) fled a
 criminal complaint against Lavasa & 14 others before the Chief Judicial
 Magistrate (CJM), Pune under the EP Act and thereafter on November 9,
 2011, MoEF passed an order and pursuant to same accorded EC to the 1st
 phase of Lavasa''s project subject to certain conditions as mentioned
 therein.
 
 On November 24, 2011 the CJM passed an order of issuance of process in
 the Criminal matter and thereafter from time to time the matter is
 adjourned and now the next date is June 21, 2013.
 
 With regards to the Corporate Social Responsibility (CSR) and the
 penalty as mentioned in the EC order, Lavasa vide its without prejudice
 letters addressed to MoEF requested for exclusion of the K T Ravindran
 committee report from the EC order and also requested for the hearing
 and informed that there are certain discrepancies and contradictions in
 the EC order and requested for reconsidering the condition no (iv) and
 also requested for withdrawal of the same.
 
 Lavasa fled Appeal being no. 36 of 2011, u/s 16(h) of the NGT Act
 against The Union of India, MoEF & Anr, before the National Green
 Tribunal (NGT) at Delhi, challenging part of the EC order more
 particularly about the Prof. K T Ravindran Committee Report and the
 conditions imposed by it. The Tribunal has passed order Notice before
 Admission''.''The matter has thereafter from time to time come up on
 board now the next date is May 14,2013.
 
 One Mr. Dyneshwar Shegde has fled Appeal (being No. 9 of 2012) before
 NGT challenging the EC order. Lavasa and the other respective Parties
 in the matter have fled their respective affidavits in reply. Further,
 to support Lavasa''s project, Mose Khore Nagrik Vikas Sangh and
 Sarpanch, Mugoan have fled Intervention Applications in the Appeal
 since villagers have benefited under Lavasa''s project.
 
 On October 05, 2012 Lavasa fled Transfer Petition being (C) No. 1326 of
 2012 before Hon''ble Supreme Court for transfer of Appeal of Dyaneshwar
 Shedge and be heard along with Civil Appeal No.6025 of 2012 titled M/s
 Scania Steel & Power Ltd v/s Jan Chetna & Ors for determination of the
 question of Person Aggrieved
 
 In the Transfer Petition, the Hon''ble Supreme Court has stayed the
 proceeding of Dyaneshwar Shedge Appeal before NGT and issued notice in
 the matter. The matter is currently pending.
 
 With regards to the WP''s fled by Lavasa in the Hon''ble Bombay High
 Court and the other PILs fled against your Company, the matters were
 listed on the board from time to time but the judges recused to hear
 the matter. But on August 29, 2012 one of the PIL being (L) 90 of 2010
 fled by Ms. Suniti S R & Ors was on board before Registrar (OS) /
 Prothonotary & Senior Master for rejection of Petition since the
 objections had not been removed by the Petitioners and for
 jurisdiction. The Registrar passed conditional order directing
 Petitioners to remove objections within 4 weeks and transferred the PIL
 to the Appellate side.  Thereafter on 7th November, 2012 the PIL (L) 90
 of 2010 was transferred to the Appellate side of Hon''ble Bombay High
 Court and its'' now numbered as PIL (ST) No 31736 of 2012.
 
 With regards to the compliance of the EC order, Lavasa is complying the
 same and from time to time is informing to the MoEF
 
 ii) HCC Real Estate Ltd.
 
 HREL, a wholly owned subsidiary of your Company is into building
 residential & office complexes in real estate sector.
 
 Commercial Projects under execution by HREL and its subsidiaries :
 
 - Lavasa Corporation Ltd. (Lavasa)
 
 Construction work at Lavasa is progressing well.  Lavasa has started
 handing over the possessions of villa and apartments to Customers in
 Dasve Village. Construction at Mugaon, Lavasa''s second town, has also
 commenced during the year. The response from buyers for sale of
 apartments in Mugaon is positive. Also, the City Management of Lavasa
 is moving in the direction of e-governance in future.
 
 The current developments in Lavasa are detailed out in Management
 Discussion and Analysis Report.
 
 - Other Projects
 
 Other projects of HCC Real Estate Ltd and its subsidiaries are
 progressing well as explained in Management Discussion and Analysis
 Report.
 
 - New Real Estate Projects under bidding
 
 During the year, HREL has made serious efforts in obtaining real estate
 projects on joint development basis. It has also acquired the bid
 documents for development of integrated township at Atali Kaladara near
 Bharuch in Gujarat for PCPIR and is negotiating on certain projects in
 Bhutan.
 
 iii) HCC Infrastructure
 
 HCC Infrastructure Company Ltd, a wholly owned subsidiary of your
 Company, has grown its portfolio to about Rs.7,000 crore, which
 includes seven National Highways Authority of India (NHAI) road
 concessions.
 
 The Company, through its subsidiaries HCC Concessions and HCC Power,
 has a development focus in the roads, water and power sectors.
 
 Your Company has developed a strong team, which follows a stringent
 investment discipline to create value for its shareholder. The
 expertise of the management team extends from concept innovation and
 evaluation of risk & return, to construction management and operations.
 Along with a focus on quality and timely execution, the Company is
 committed to provide reliable, safe and world class operations and
 maintenance services to the country''s end users.
 
 Current Road Portfolio:
 
 Your directors are pleased to inform you that during the course of the
 year, HCC Concessions was awarded the Narmada Bridge Project (NH8) in
 the state of Gujarat by the National Highways Authority of India in
 April 2012.
 
 The three operational projects Nirmal Annuity,
 
 Delhi Faridabad Elevated Expressway and Dhule Palesner Highway have
 been operational for more than three, two and one year respectively and
 are running smoothly. The three under construction highway projects in
 West Bengal (NH34) have achieved significant progress and the two
 larger projects amongst the three are expected to be operational later
 this year.
 
 During the year, HCC Concessions submitted 3 NHAI bids and 16 Request
 for Qualification (RFQs). HCC Concessions partnered with other
 infrastructure players for certain large bids to diversify risk and
 increase competitiveness. The current year has witnessed a slowdown in
 the awards of new projects. NHAI has awarded only about 750km compared
 to about 6,500km last year. The Company will continue to bid for NHAI
 projects in the next financial year while also evaluating state road
 opportunities.
 
 Status of Operational Assets:
 
 Dhule Palesner Highway Project (NH3)
 
 The project road is part of NH3, commonly referred to as the
 Mumbai-Agra road, originating from Mumbai and ending at Agra. It is a
 primary conduit for transportation of passengers as well as freight
 traffic from the state of Uttar Pradesh to major towns in the states of
 Madhya Pradesh and Maharashtra. In FY09, NHAI awarded the development
 of four lane highway from Km 168.500 to Km 265.000 on the
 Maharashtra/MP border to an HCC led (60%) consortium on a BOT (toll)
 basis. The concession period is 18 years, including a construction
 period of 30 months.
 
 The project was operational on Feb 11, 2012, four months ahead of
 schedule, showcasing our execution expertise.
 
 The project is being operated by an in-house operations and maintenance
 team. The remaining concession period is about 15 years. The highway
 has been developed in partnership with Sadbhav Engineering Ltd and John
 Laing Investments Ltd (UK) with an investment of Rs. 1,420 crore.
 
 Delhi Faridabad Elevated Expressway (NH2) (dfskyway)
 
 The Delhi Faridabad Elevated Expressway or dfskyway is a six lane
 4.4 km elevated highway connecting Delhi and Haryana at Badarpur. This
 award winning engineering marvel developed by HCC Concessions Ltd with
 an investment of nearly Rs.600 crore boasts 20 exits, 10 underpasses
 and is the first of its kind spaghetti structure in India. HCC
 Concessions was awarded a 20 year concession in 2008 to develop,
 construct and operate this asset by the National Highways Authority of
 India (NHAI). The dfskyway contributes significantly to Delhi''s
 rapidly expanding infrastructure by reducing travel time by over 40
 minutes through an extremely congested corridor, that benefits
 residents and inter-state traffic alike. It is one of Delhi''s major
 radial roads and caters to very high traffic volume of over 100,000
 vehicles per day.  HCC Concessions'' parent, Hindustan Construction
 Company (HCC), has designed, engineered and constructed the dfskyway
 
 The Delhi-Faridabad Elevated Expressway was formally inaugurated on
 November 29, 2010 significantly ahead of its scheduled completion date,
 by the Chief Ministers of both Delhi and Haryana, along with the
 Minister of Road Transport & Highways. The asset has been awarded the
 Best Project Award by Construction Industry Development Council 2011
 and the Infrastructure Excellence Award 2011 by CNBC TV18.
 
 Nirmal Annuity (NH7)
 
 The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000)
 on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the
 development of four-laning of this 33 km long stretch on a BOT basis
 under the Annuity scheme to HCC. The concession period for the project
 is 20 years, including a construction period of 24 months. The project
 was developed with an investment by HCC of Rs. 315 crore This project
 became operational in July 2009, 100 days ahead of the scheduled
 completion date. The debt at Nirmal has since been refinanced through a
 structured bond at 9.38% fixed rate of interest for 17 year tenure.
 
 The SPV has received timely annuity payments over the last year and the
 operations and maintenance are being managed efficiently by our in
 house team.
 
 Status of Assets under Development:
 
 West Bengal (NH34) Highway Project
 
 This project being developed by HCC Concessions Ltd on a Design,
 Finance, Build, Operate and Transfer (DFBOT) basis, is the largest PPP
 highway model in West Bengal (WB). The project road is the major
 North-South artery (N-34) which originates at the capital and port city
 of Kolkata, and ends at Dalkhola in the state of WB, covering a total
 distance of 443.5 km. It is the spine of the transport system in the
 region and provides nearest access to ports (Kolkata and Haldia) for
 the north eastern states of India and neighbouring Bhutan and Nepal.
 The development of this stretch will improve connectivity to the
 East-West Corridor, which has already been four-laned. West Bengal is
 strategically located to play a pivotal and catalytic role in promoting
 economic cooperation in the sub region (Bangladesh, Bhutan, North
 Eastern states and West Bengal).
 
 The highway development is divided into three contiguous sections
 covers Baharampore and Farakka (103 km), Farakka and Raiganj (103 km) &
 Raiganj and Dalkhola (50 km). The concession lengths for the different
 segments totaling 256 km range from 25 to 30 years, including a
 construction period of 30 months and an investment of over Rs.3,200
 crore. The Company has achieved significant progress in the two larger
 sections and is expecting to start operations later this year.
 
 WB is the fourth most populous state in the country and is the sixth
 largest contributor to India''s GDP The traffic on NH34 comprises of 90%
 commercial traffic, carrying a diversified mix of manufacturing goods,
 building materials, steel, jute, food grains and tea.
 
 Baharampore Farakka Highway
 
 The construction work has progressed significantly in the last year on
 this stretch of 103 km. The Company expects to start operation later
 this year.
 
 This stretch originates at Baharampore, about 190 km from Kolkata and
 terminates at Farakka.  Baharampore, Nabagram, Farakka and Jangipur are
 the major passenger traffic generators for this stretch. The
 four-laning of two projects between Kolkata and Baharampore will
 further increase the throughput and improve traffic on this stretch.
 The concession period is 25 years, including a construction period of
 30 months. The project is being implemented with an investment of
 Rs.1,169 crore.
 
 Farakka Raiganj Highway
 
 The construction work has progressed significantly in the last year on
 this stretch of 103 km. The Company expects to start operation later
 this year.
 
 This is a 103 km stretch originating at Farakka and terminating at
 Raiganj. Malda, Farakka and Gajol are the major passenger traffic
 generators for this stretch. The Malda industrial region is expected to
 lead the growth in this region. The concession period is 30 years,
 including a construction period of 30 months. The project is being
 implemented with an investment of Rs.1,378 crore.
 
 Raiganj Dalkhola Highway
 
 The progress on this stretch has been slow compared to the other two
 stretches due to certain execution challenges. This is a 50km stretch
 which comprises of 3 bypasses. Dalkhola, Raiganj and Islampur are the
 major passenger traffic generators for this stretch.
 
 This is a 50 km stretch starting at Raiganj and terminating at the town
 of Dalkhola. The concession period is 30 years and includes a
 construction period of 30 months. The project is being implemented with
 an investment of Rs.684 crore.
 
 iv) Steiner AG,Switzerland
 
 Your Company holds through its wholly owned HCC Mauritius Enterprises
 Ltd. a controlling equity stake of 66% in Steiner AG. Steiner AG is a
 leading general contracting Company in Switzerland, specialized in
 turnkey development of new buildings and refurbishments, and offers
 services in all facets of real estate development and construction.
 
 Steiner AG had a consolidated revenue of Rs. 4368.2 crore and a
 consolidated profit of Rs. 47.3 crore in the financial year 2012-13.
 
 After two years of construction Steiner AG completed the project
 Andreaspark G3, a large apartment building in one of Zurich''s fastest
 growing residential areas. With a height of 42 meters the building
 offers 90 new apartments.
 
 In March 2010 the Company handed over the new premises to the
 International Union for Conservation of Nature in Gland, which is a
 perfect example for the new era of eco-building techniques. This year,
 the Company achieved a milestone with this work, as it was awarded the
 first ever LEED Platinum certificate by the Green Building Council
 Environment Design in Switzerland. In Glattpark, one of Switzerland''s
 biggest residential and commercial development areas, Steiner AG is
 building the project Lindbergh- Allee. The property lies close to
 Zurich International Airport and will offer around 30''000 sqm of office
 and living space.
 
 In the business year 2012-13 Steiner AG signed many important
 contracts. At year end, the order backlog of Steiner AG was CHF 1,210
 million compared to CHF 1,512 million as of March 31, 2012.  Steiner AG
 has also secured projects worth more than CHF 200 million in this year
 which are yet to be signed.
 
 The Board of Directors of Steiner AG comprises six members. Your
 Company is represented by four nominees: Mr. Ajit Gulabchand, who also
 acts as Chairman, Mr. K.G. Tendulkar, Mr. Anil Singhvi and Dr. Peter
 Huggler.
 
 v) Highbar Technologies Ltd
 
 Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is
 an Information Technology Company formed by your Company, with the
 vision of providing end-to-end IT solutions to Infrastructure industry.
 
 Despite tough economic conditions, Highbar won 14 new customers in the
 financial year against stiff competition by established large IT
 players to take the total tally of its customers to 64. Long list of
 reference customers and high quantum of repeat business indicates
 maturity and scalability of Highbar''s delivery capabilities.
 
 Highbar''s Dubai subsidiary, Highbar Technologies FZ-LLC is now fully
 operational and has secured Highbar''s largest contract till date with
 Oman based Company and also won customer in Saudi Arabia.
 
 Highbar Technologies has taken strategic alliance with SAP to next
 level with ''GOLD Partnership'' and is preferred partner of SAP for
 infrastructure industry.
 
 Infrastructure industry is going beyond ERP to new business critical IT
 systems. Highbar has been at forefront of this with solutions like
 maximum number of SAP BOBJ (business intelligence & dashboard) and SAP
 CRM (customer relationship management) implementations for
 Infrastructure industry, business process consolidation (BPC) and
 employee portal (ESS). The Company launched new solutions - Highbar
 RapidStart and Highbar RapidStart Analytics. These solutions are based
 on the templatised approach for ERP and Business Intelligence
 respectively and are Intellectual Property (IP) assets for Highbar
 Technologies.
 
 Highbar Technologies has established a proper scalable organization
 structure with all the functions in place to facilitate and sustain
 future growth.
 
 Highbar Technologies is on the course towards accomplishing its vision
 of being ''the most preferred end to end IT solution provider'' for
 infrastructure industry.
 
 5.  Subsidiary Companies
 
 At the beginning of the year, the Company had 72
 
 Subsidiary Companies.
 
 During the year under review, the following changes have taken place.
 
 a) HCC Infrastructure Co. Ltd (the wholly owned subsidiary Company) has
 promoted the following wholly owned subsidiary Company, making it a
 subsidiary of your Company from the date of its incorporation.
 
 Name of the Company       Date of Incorporation
 
 HCC Operations &          07.11.2012
 Maintenance Ltd
 
 b) HCC Concessions Ltd (a subsidiary Company) has promoted the
 following wholly owned subsidiary Company, making it a subsidiary of
 your Company from the date of its incorporation.
 
 Name of the Company        Date of Incorporation
 
 Narmada Bridge Tollway     18.06.2012
 Ltd
 
 (c) During the year under review w.e.f 18.02.2013, Lavasa Corporation
 Ltd, a subsidiary Company of your Company has acquired remaining 74%
 stake (previously 26% stake) in Verzon Hospitality Ltd, making it a
 subsidiary of your Company from the date of acquisition of the said
 stake.
 
 d) HCC Singapore Enterprises Pte. Ltd has ceased to be your subsidiary
 w.e.f 11th April 2012.
 
 In terms of the General Circular No. 2/2011 dated February 8, 2011 read
 together with General Circular No. 3/2011 dated February 21, 2011,
 issued by the Government of India - Ministry of Corporate Affairs under
 Section 212(8) of the Companies Act, 1956, granting general exemption
 to companies from attaching financial statements of subsidiaries,
 subject to fulfillment of conditions stated in the circular, copies of
 the Balance Sheet, Profit and Loss Account, Report of the Board of
 Directors and Auditors Report of the subsidiary companies for the
 year/period ended December 31, 2012/March 31, 2013 are not attached to
 the Balance Sheet of the Company as the Company has/shall fulfill the
 following conditions:
 
 (i) The Board of Directors of the Company has vide resolution dated May
 3, 2013 consented for not attaching the balance sheet(s) of the
 concerned subsidiary (ies);
 
 (ii) The Company has presented in its Annual Report, the consolidated
 financial statements of holding Company and all of its subsidiaries
 duly audited by its statutory auditors;
 
 (iii) The Consolidated financial statement has been prepared in strict
 compliance with applicable Accounting Standards and where applicable,
 Listing Agreement as prescribed by the Securities and Exchange Board of
 India;
 
 (iv) The Company has disclosed in the consolidated balance sheet the
 following formation in aggregate for each subsidiary including
 subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets
 (d) total liabilities (e) details of investment (except in case of
 investment in subsidiaries) (f) turnover (g) profit before taxation (h)
 provision for taxation (i) profit after taxation (j) proposed dividend,
 as applicable;
 
 (v) The annual accounts and other related detailed information of the
 following subsidiaries shall be made available to shareholders of the
 holding Company and subsidiary companies seeking such information at
 any point of time:
 
 1.  Hincon Technoconsult Ltd
 
 2.  Western Securities Ltd
 
 3.  Pune-Paud Toll Road Company Ltd
 
 4.  Nirmal BOT Ltd
 
 5.  Panchkutir Developers Ltd
 
 6.  HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
 
 7 HCC Infrastructure Company Ltd
 
 8.  HCC Aviation Ltd
 
 9.  Badarpur Faridabad Tollway Ltd
 
 10.  Baharampore - Farakka Highways Ltd
 
 11.  Farakka - Raiganj Highways Ltd
 
 12.  Raiganj - Dalkhola Highways Ltd
 
 13.  Dhule Palesner Operations & Maintenance Ltd
 
 14.  HCC Power Ltd
 
 15.  HCC Operations & Maintenance Ltd
 
 16.  Narmada Bridge Tollway Ltd
 
 17.  HCC Construction Ltd
 
 18.  Highbar Technologies Ltd
 
 19.  Highbar Technologies FZ LLC
 
 20.  HCC Mauritius Enterprises Ltd
 
 21.  Klemanor Investments Ltd
 
 22.  Steiner AG (Formerly known as Karl Steiner AG)
 
 23.  Steiner Promotions et Participations SA
 
 24.  VM   ST AG
 
 25.  Eurohotel SA
 
 26.  Steiner (Germany) GmbH
 
 27.  Steiner Leman SAS
 
 28.  SNC Valleiry Route De Bloux
 
 29.  Steiner India Ltd
 
 30.  HCC Real Estate Ltd
 
 31.  HRL Township Developers Ltd
 
 32.  HRL (Thane) Real Estate Ltd
 
 33.  Nashik Township Developers Ltd
 
 34.  Maan Township Developers Ltd
 
 35.  Charosa Wineries Ltd
 
 36.  Powai Real Estate Developers Ltd
 
 37.  HCC Realty Ltd
 
 38.  Lavasa Corporation Ltd
 
 39.  Lavasa Hotel Ltd
 
 40.  Apollo Lavasa Health Corporation Ltd
 
 41.  Lakeshore Watersports Company Ltd
 
 42.  Dasve Convention Centre Ltd
 
 43.  Dasve Business Hotel Ltd
 
 44.  Dasve Hospitality Institutes Ltd
 
 45.  Lakeview Clubs Ltd
 
 46.  Dasve Retail Ltd
 
 47.  Full Spectrum Adventure Ltd
 
 48.  Spotless Laundry Services Ltd
 
 49.  Lavasa Bamboocrafts Ltd
 
 50.  Green Hill Residences Ltd
 
 51.  My City Technology Ltd
 
 52.  Reasonable Housing Ltd
 
 53.  Future City Multiservices SEZ Ltd (Formerly known as Minfur
 Interior Technologies Ltd)
 
 54.  Rhapsody Commercial Space Ltd
 
 55.  Valley View Entertainment Ltd
 
 56.  Andromeda Hotels Ltd 
 
 57.  Sirrah Palace Hotels Ltd
 
 58.  Warasgaon Tourism Ltd
 
 59.  Our Home Service Apartments Ltd
 
 60.  Warasgaon Power Supply Ltd
 
 61.  Sahyadri City Management Ltd
 
 62.  Hill City Service Apartments Ltd
 
 63.  Kart Racers Ltd
 
 64.  Warasgaon Infrastructure Providers Ltd
 
 65.  Nature Lovers Retail Ltd
 
 66.  Osprey Hospitality Ltd
 
 67.  Starlit Resort Ltd
 
 68.  Warasgaon Valley Hotels Ltd
 
 69.  Rosebay Hotels Ltd
 
 70.  Mugaon Luxury Hotels Ltd
 
 71.  Warasgaon Assets Maintenance Ltd
 
 72.  Hill View Parking Services Ltd
 
 73.  Whistling Thrush Facilities Services Ltd
 
 74.  Verzon Hospitality Ltd
 
 (vi) Further, the annual accounts of the subsidiary companies shall
 also be kept for inspection by any shareholder at the head
 office/registered office of the Company and of the subsidiary companies
 concerned and the Company shall furnish a hard copy of the details of
 accounts of subsidiaries to any shareholder on demand;
 
 (vii) The holding as well as subsidiary companies in question shall
 regularly file such data to the various regulatory and Government
 authorities as may be required by them;
 
 (viii) The Company has given Indian rupee equivalent of the figures
 given in foreign currency appearing in the accounts of the subsidiary
 companies along with the exchange rate as on closing day of the
 financial year;
 
 6.  Share Capital
 
 During the year under review, your Company''s Authorised Share Capital
 has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore)
 comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000
 Redeemable Cumulative Preference Shares of Rs. 10/- each.
 
 During the year under review, your Company''s paid up equity share
 capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty
 Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising
 60,66,10,420 Equity Shares of Rs. 1/- each.
 
 7.  Public Deposits and Loans/Advances
 
 Your Company has not accepted any deposits from the public, or its
 employees during the year under review.
 
 Pursuant to Clause 32 of the Listing Agreement, the particulars of
 loans/advances given to subsidiaries have been disclosed in the Annual
 Accounts of the Company.
 
 8.  Employee Stock Option Scheme (ESOP)
 
 As on March 31, 2013, 61,54,080 stock options are outstanding
 (comprising vested and unvested, after adjustment for lapsed and
 exercised options), in aggregate, for exercise as per the exercise
 schedule and are exercisable at a price of Rs. 52.03 per stock option.
 
 Each option, when exercised, as per the exercise schedule, would
 entitle the holder to subscribe for one equity share of the Company of
 face value Rs. 1 each.
 
 During the year under review, 18,36,310 options got vested to the
 employees of the Company and in aggregate, 67,01,040 options stands
 vested with the employees as on March 31, 2013.
 
 The particulars with regard to the Employee Stock Options as on March
 31, 2013 as required to be disclosed pursuant to the provisions of
 Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock
 Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I
 to this Report.
 
 9.  Status of GDSs
 
 During the financial year 2005-06, the Company had issued Global
 Depository Shares (GDSs) and the underlying shares against each of the
 GDSs were issued in the name of the Depository, Citi Bank N.A.
 
 As on March 31, 2013, 1,20,720 GDSs have remained outstanding which
 forms part of the existing paid up capital of the Company.
 
 10.  Consolidated Financial Statements
 
 The Consolidated Financial Statements of the Company prepared in
 accordance with applicable Accounting Standards forms a part of this
 Annual Report.
 
 11.  Corporate Governance
 
 As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
 separate Chapter on Corporate Governance practices followed by the
 Company together with a Certificate from the Company''s Auditors
 confirming compliance forms part of this Report.
 
 12.  Directors
 
 In accordance with Article 186A of the Articles of Association of the
 Company, the Board of Directors of your Company, at their meeting held
 on March 28, 2013, has re-appointed Mr. Ajit Gulabchand as Managing
 Director, designated as Chairman & Managing Director of the Company for
 a period of 5 years with effect from April 1, 2013, subject to the
 approval of the Shareholders of the Company at the ensuing Annual
 General Meeting.
 
 In accordance with Article 135 and Article 186A of the Articles of
 Association of the Company, on May 3, 2013, the Board of Directors of
 your Company appointed Mr. Rajgopal Nogja as Additional Director and
 Whole-time Director of the Company designated as Group Chief Operating
 Officer & Whole-time Director for a period of 5 years subject to the
 approval of Shareholders of the Company at the ensuing Annual General
 Meeting.
 
 The Company has received Notice under Section 257 of the Companies Act,
 1956 from a member signifying his intention to propose Mr. Rajgopal
 Nogja as a candidate for the office of Director at the ensuing Annual
 General Meeting.
 
 As per the provisions of the Companies Act, 1956 read with Article 152
 of the Articles of Association of the Company, Mr. Y. H. Malegam, Mr.
 K. G. Tendulkar and Mr. Anil C. Singhvi are the Directors of the
 Company who are due to retire by rotation. Mr. K. G. Tendulkar and Mr.
 Anil C. Singhvi being eligible, offer themselves for re-appointment.
 Mr. Y H. Malegam has expressed his intention not to seek re-appointment
 as a Director of the Company.
 
 The Board of Directors records its appreciation & recognition of the
 valuable contribution and services rendered by Mr. Y. H. Malegam during
 his long association for the last four decades as a Director of your
 Company.
 
 The Company has received Form DD-A from all these Directors as required
 under the Companies (Disqualification of Directors under Section 274
 (1) (g) of the Companies Act, 1956) Rules, 2003.
 
 Profile of all these Directors has been given in the Report on the
 Corporate Governance as well as in the Notice of the ensuing Annual
 General Meeting of the Company.
 
 13.  Directors'' Responsibility Statement
 
 In accordance with the provisions of Section 217(2AA) of the Companies
 Act, 1956, your Directors confirm that:
 
 a) in the preparation of the annual accounts, the applicable accounting
 standards have been followed and there has been no material departure;
 
 b) the selected accounting policies were applied consistently and the
 Directors 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, 2013 and of the loss of the Company for the
 year ended on that date.
 
 c) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act,1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities.
 
 d) the annual accounts have been prepared on a going concern basis.
 
 14.  Industrial Relations
 
 The industrial relations continued to be generally peaceful and
 cordial.
 
 15.  Transfer to Investor Education and Protection Fund (IEPF)
 
 The Company has, during the year under review, transferred a sum of Rs.
 8,19,180 to Investor Education and Protection Fund, in compliance with
 the provisions of Section 205C of the Companies Act, 1956. The said
 amount represents dividend for the year 2004-05 which remained
 unclaimed by the shareholders of the Company for a period exceeding 7
 years from its due date of payment.
 
 16.  Particulars of Employees and other additional information.
 
 The information required under Section 217(2A) of the Companies Act,
 1956 and the Rules made there under is given in the Annexure to this
 Report and forms part of the Report.  However, in terms of Section
 219(1) (b)(iv) of the Companies Act, 1956, the Report and Accounts are
 being sent to the shareholders excluding the aforesaid Annexure. Any
 Shareholder interested in obtaining copy of the same may write to the
 Company Secretary at the Registered Office of the Company.
 
 17.  Conservation of Energy,Technology Absorption and Foreign Exchange
 Earnings and Outgo.
 
 The information relating to the conservation of energy, technology
 absorption and foreign exchange earnings and outgo as required to be
 disclosed under the Companies (Disclosure of Particulars in the Report
 of the Board of Directors) Rules 1988, is given in Annexure II forming
 part of this Report.
 
 18.  Auditors
 
 M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the
 Company, bearing ICAI Registration No.  100186W retire at the ensuing
 Annual General Meeting and are eligible for re-appointment.
 
 As required under the provisions of section 224(1B) of the Companies
 Act, 1956, the Company has obtained a written certificate from the
 Auditors to the effect that their re-appointment, if made, would be in
 conformity with the limits specified in the said section.
 
 19.  Auditors'' Report
 
 The Auditors'' Report to the shareholders on the Accounts of the Company
 for the financial year ended March 31, 2013 does not contain any
 qualification.
 
 20.  Acknowledgements
 
 Your Directors would like to acknowledge and place on record their
 sincere appreciation to all stakeholders - Clients, Financial
 Institutions, Banks, Central and State Governments, the Company''s
 valued investors and all other business partners for their continued
 co-operation and excellent support received during the year.
 
 Your Directors recognize and appreciate the efforts and hard work of
 all the employees of the Company and their continued contribution to
 its progress.
 
                             For and on behalf of Board of Directors,
 
                                                      AJITGULABCHAND
 
                                        Chairman & Managing Director
 
 Registered Office:
 
 Hincon House, 11th Floor,
 
 247Park, Lal Bahadur Shastri Marg
 
 Vikhroli (West)
 
 Mumbai 400 083
 
 Place: Mumbai
 
 Date: May 3, 2013
Source : Dion Global Solutions Limited
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