The Directors are pleased to present the 90th Annual Report together
with the Audited Financial Statements for the year ended March 31,
2. Financial Highlights
Particulars Year ended Year ended
March 31, 2016 March 31, 2015
Turnover 4190.90 4,301.14
Profit before Interest,
Depreciation, Exceptional 798.74 781.43
Items, Other Income and Tax
Less: Finance Costs 689.88 651.13
Exceptional Item 26.48 -
Add: Other Income 187.76 134.87
Gain/(Loss) (1.22) 12.45
Profit before Tax 133.07 127.32
Less: Tax Expense 48.10 45.67
Profit/(Loss) after Tax 84.97 81.65
Add: Balance brought
forward from last year 147.92 69.00
Less: Transferred to
Less: Impact of
amortisation - 2.73
(Refer Note 3.2 of the
Balance carried to
Balance Sheet 212.89 147.92
As your Company is under CDR, it is necessary to conserve and optimise
use of resources to improve the health of the Company. Hence, your
Directors have not recommended any dividend for the financial year
ended March 31, 2016.
The turnover of the Company in the year is Rs. 4,190.90 crore as
compared to Rs. 4,301.14 crore in the previous year. The profit before
tax is Rs. 133.07 crore (including exceptional item) as compared to Rs.
127.32 crore for the previous year.
Your Directors are pleased to inform that during the year under report,
the Company has secured the following major contracts:
- Ramban to Banihal Section of NH 44, Jammu & Kashmir
Contract Value: Rs. 1783 crore
- Integrated Nuclear Recycle Plant, Maharashtra Contract Value: Rs. 942
- Imphal Kangchup Tamenglong Road, Manipur Contract Value: Rs. 1114
- Tapovan Vishnugad Hydroelectric Project, Uttarakhand
Contract Value: Rs. 634 crore
- Nikachhu Hydropower Plant, Bhutan Contract Value: Rs. 457 crore
- Tunnel No. 12, New Railway line Project Jiribam - Tupul, Manipur
Contract Value: Rs. 784 crore
The total balance value of works on hand as on March 31, 2016 is Rs.
Decisions are awaited from various clients for tenders submitted by the
Company for 13 packages amounting to about Rs. 10,334 crore (HCC share
Rs. 9301 crore). Tenders for various packages for 29 projects worth
Over Rs. 22,214 crore (HCC share Rs. 19,843 crore) are expected to be
submitted in the near future. The Company has also submitted
prequalification bids for 12 projects worth over Rs. 24,082 crore (HCC
share Rs. 22,053 crore) which are under evaluation.
Operations of Subsidiaries
i) Lavasa Corporation Ltd - Integrated Urban Development and Management
Lavasa has kept its rationale of developing a smart city for all and is
tailoring partnerships and tie ups with global leaders. Partnerships
are well in place and many of these projects are moving towards
In the hospitality space, the Accor group is successfully running its
operation with the two brands - Mercure Lavasa and the 1500 plenary
capacity Lavasa International Convention Centre (LICC). Another brand
of the Accor group - Novotel is scheduled for opening in April 2017.
Projects with renowned hospitality players like Formule 1, Holiday Inn,
Langham and Eaton amongst others are slated to follow in quick
As for the existing hospitality projects, Ekaant - The Retreat and
Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select
Dasve is in its eighth year of successful operations with occupancy at
66%, while Accor''s Mercure is in its seventh year of successful
operation with occupancy at 56%. In the tourism space, Lakeshore
Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports &
Academy are also functioning successfully. Lavasa has tied up with
former Indian cricketer and chief of the BCCI Selection Committee, Mr.
Sandeep Patil for building a Sports complex including a cricket stadium
for corporate tournaments. There have been talks to set up sports
academies for hockey, football, badminton, etc. at Lavasa. Other
tie-ups include advance discussions on building a Hollywood & Bollywood
Theme Park in Mugaon.
On the retail front, a significant area has already been leased.
Restaurants like Smokin Joes, Venkys Xpress, Subway, Cafe Coffee Day,
All American Diner, Granma''s Homemade Patisserie, Chor Bizarre,
Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani,
Paanchi Krunchyand Indulge have commenced operations. Many other non
F&B outlets such as Mapro and Charosa Wine Boutique have successfully
started operations including Lavasa''s first miniplex- Fun Square
Significant progress was made in the education space. Christel House
Lavasa is into its seventh year of operations with 432 students.
2015-16 also saw launch of Phase 2 of Christel House till grade VIII.
Corporate entities such as EduSports, Yoga Blessing and Linguaphone
showed keen interest to contribute towards Christel House Lavasa School
by way of sports programmes, educational and Yoga workshops.
Ecole Hoteliere Lavasa started its seventh batch in June 2015-16. The
operation of Ecole Hoteliere was taken over by Expat Properties in May
2015. Ecole Hoteliere will start its eighth batch from July 25, 2016.
Christ University offering courses like Post Graduate Diploma in
Management (PGDM) program with specialization in Finance and Marketing
started operations two years ago, with a total of 102 students now in
its third batch, with a target of 60 students for the 2016-17 academic
Knowledge Vistas Limited (KVL) is already running Little Millennium,
pre-primary school at Lavasa for last five years. It is also likely to
start the K12 School from academic year 2017-18. Abhinav Shiksha
Sansthan, New Delhi will start from the academic year 2018-19 across
the area of 62,500 sq. ft. Other educational partners like Symbiosis
Institute (Pune) are also in the process of launching their programs.
Residential sales have been sluggish in tune with the overall market
sentiment. Institutional Sales team is on the anvil of closing
transactions which would herald the entry of reputed corporations into
One such deal is with ''All that Jazz'', a leading retailer who will
bring reputed retail brands to make Lavasa an ideal shopping
destination. This deal will boost retail businesses at Lavasa and make
the promenade area more vibrant.
We are in advanced discussions with multiple educational institutes
keen to set up residential schools at Lavasa. Sanjeevani Institute
intends to bring in Kindergarten to Post Graduate courses. Likewise,
vocational training institute from Germany, ''Kosbe'' has been approached
and they are keen to start courses. Lavasa being a smart city offers
students ready on site learning of various subjects like waste
management and functioning of water treatment plants. Symbiosis
Institute has begun construction of a higher secondary education
Lavasa continued its focus on branding and communication activities in
2015-16. 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. Positioning Lavasa
city as India''s first smart city, building preference and restoring
customer confidence in the project were the key goals.
The central government initiative to build smart cities across India
generated a great deal of excitement among Indian and foreign
stakeholders. The growing interest in smart cities augurs well for
Lavasa. We played host to a number of government, business and student
delegations keen on studying the Lavasa model of development.
As a proactive step to reach out to a wider audience, Lavasa was
presented as a ready Smart City model at various platforms, the most
prominent one being the Smart Cities India Exhibition at Delhi and the
13th Municipalika Smart Cities Exhibition at Jaipur.
Our spokespeople also participated in various other seminars and
discussions on Smart Cities.
Lavasa continued with the strategy of creating large events at Lavasa
to attract good tourists.
A four day festival of adventure, music, dance and entertainment was
organized as a lead up to the Republic Day on January 26, 2016. For the
first time, a hot air balloon took flight over the Dasve town,
Mentalist, Akshay Lakshmanan captivated audiences with his mind reading
session and wall painting activity by the students of Christel House
were the highlights of the Republic Day weekend festivities.
On May 1, 2015, Maharashtra Day was also celebrated with art & culture,
music & dance programmes highlighting the rich cultural heritage of
Maharashtra, along with a display of historic ancient Maratha arms &
weapons livened up the Dasve Promenade.
The second edition of Freedom, a festival of music, food and
entertainment saw 35,000 tourists enjoying good music, delectable
cuisines and great entertainment.
Christmas and New Year celebrations started with live musical and dance
performance at the Dasve promenade and Fortune Lawns. Renowned artist
Sharon Prabhakar along with DJ Rayjack, DJ-Cyborg,
DJ Sazz & DJ Shriki entertained the visitors.
Focus of the Public Relations campaign in 2015 was on building profile
of Lavasa as India''s first smart city and promoting the city as an
ideal tourist destination. Feature stories in print media and TV
channels, automobile magazines, national and international news portals
resulted in good visibility for Lavasa.
Lavasa was prominently featured as a Smart City in a number of media
reports. Trade magazine ''Realty'' featured Lavasa as one of India''s
premier Smart Cities, while Hindustan Times, the Pioneer, Deccan Herald
and Indiainfoline carried similar stories. Other trade supplements like
Times Property and multiple regional publications also featured Lavasa
as a Smart City.
CMD''s comment was widely circulated to media post launch of AMRUT in
Delhi, positioning him as the thought leader on Smart Cities. ''The
Property Guide'' guide show on leading business news channel ET Now did
a report on residential properties at Lavasa and also carried an
interview with the CEO.
Lavasa as a tourist destination was promoted through stories in
relevant travel and lifestyle media and through tie ups with TV
channels for shows that were shot at Lavasa. ELLE magazine did a 14
page photo shoot including the cover page at various scenic locations
in the city. Lavasa was covered extensively in ''Man Chimb Pavasan'' a
travel based programme on Saam Marathi channel. A photo-feature on
tourist options at Lavasa was also carried by leading news portals like
rediff.com and indiatoday.in.
Auto-trade media was specifically engaged to promote Lavasa among
bikers and adventure enthusiasts. Over 1000 bikers braved the rain and
travelled to Lavasa in June to celebrate World Motorcycle Day. This
activity garnered coverage in all media including mainline
publications, print and online auto media as well as regional
publications. Motoring World magazine conducted the jury round of their
annual car and bike awards at Lavasa which resulted in a six page story
all of them featuring cars and bikes shot at Lavasa.
Lavasa viewpoint on the SDO order on restoring tribal lands was
prominently reproduced by all print and TV media. Pune media was
engaged extensively during the summer season to sensitise them on the
water scarcity issue. Meetings with senior editors and the constant
engagement with beat reporters in Mumbai and Pune has also helped in
creating greater awareness of company''s stand on various crucial
Special Initiatives and events were highlighted regularly in mainstream
and trade media to build preference and recall. Celebrations at Lavasa
on Maharashtra Day, Independence Day weekend and initiative like the
Dreamcatchers Summer camp were covered by all major publications and
online portals. Launch of Jetovator, Segway and news about Lavasa
bagging the PATWAAward were widely publicized.
Each month, Lavasa looks, feels and acts more like a city. Lavasa city
now has a full-fledged operational Farmer''s market known as ''Hara
Bazar''; a two screen Movie theatre for visitors and residents; it has a
fully operating Post office, DTDC - courier service, a Hospital with
pharmacy and several new food and beverage establishments open for
business. It also has four operating hotels. Four additional hotels
will be opening soon which collectively will take the total number of
hotel rooms in Lavasa to more than 600. Lavasa has a Petrol Pump, two
bank branches along with ATMs, a state-of-art Convention Centre, a
Public Safety Centre with Fire Engine & crew,
Police outpost to be upgraded to a full-fledged Police station, Tourist
Information Center with a ''Hop On - Hop Off'' Bus facility; Multilevel
Car parking facility, Nature trail, Citizen Contact Center with 24x7
support to citizens through emergency and non-emergency contact
numbers, Rental housing for low income groups, simulated Golf Course
facilities; Water Sports facility with latest Jetovator, Adventure
Sports facility, a modern Club with gym, Sports and Spa facilities,
Public Transport system for citizens, Schools for local population and
two operational College campuses. Additional Hotels, Retail shops and
Family Entertainment Centre facilities for tourists will be opened
Building the infrastructure right, from the beginning, is a key
strategy to ensuring long-term livability. Drinking water at Lavasa is
fit for consumption, straight from the tap, without the need for
additional filtration. Sewage is treated in a manner that exceeds
government requirements and is subsequently reused for irrigation and
other non-potable uses. Lavasa''s power distribution grid is nearly
99.90% reliable and the young city is already on the cutting edge of
urban environmental sustainability initiatives. Over 50 kilometers of
well-maintained motorable roads are operational and more are being
Lavasa has already opened parks and play areas to the public. The
e-governance portal Lavasa App, and Security Command Centre will play a
major role in communicating with citizens and providing services 24x7.
A round the clock Lavasa Citizen Contact Centre has been operational
since 2009 and envisions making the lives of citizens and visitors easy
and convenient. The Lavasa Citizen Contact Centre is a one-stop
information source for non emergency and emergency related services. It
provides a single window resolution for all customers'' needs and
visitors'' requests; is involved in proactive information distribution,
data collection and Property management services; Customer Satisfaction
Surveys and Customer handovers and possession.
The City Management Services (CMS) Department is equally dynamic in
seeking to coordinate services in this rapidly changing setting. It is
currently divided into seven specialist divisions including Customer
Services, Public Safety & Security, Enterprise Utilities, PublicWorks,
Administration & Finance, Community Development and Geographic
Information Systems & Management Information Systems.
The CMS department will slowly evolve into a new governance entity that
will, at some point, be the core of a new replicable governance model.
Lavasa aims to create this, so that the goals of the Master Plan can be
realized and sustained and the various public - private partnerships
can operate in a more consistent and predictable environment.
The CMS department meets on a monthly basis with a committee of
villagers throughout the project area. The Village Committee is the
first of several such citizen advisory groups that will together form a
key component of the Lavasa citizen and stakeholder engagement
The Company had 10,574 acres of land including 455 acres of land on
lease by the end of last financial year i.e. March 31, 2015. This has
reduced to 10,515 acres as 59 acres of land in Mugaon was restored to
tribals by SDO, Maval during the year.
The Environment Management Plan (EMP) continues to be implemented as
per our Environment Impact Assessment (EIA) Report submitted to
Ministry of Environment, Forests & Climate Change (MoEF & CC), New
Delhi. Regular monitoring of environmental aspects such as air & noise
quality, water & sediment quality, soil quality, DG stack & noise
quality and biodiversity is being carried out by MoEF approved and NABL
accredited laboratory as per the conditions mentioned in the
Environment Clearance by MoEF & CC. All reports were found to be within
the prescribed limit of MPCB. The six-monthly Environmental Compliance
Report is being submitted to MoEF since 2012. The 7th compliance report
was submitted in June 2015 and the 8th compliance report was submitted
in December 2015 to MoEF, its Regional Office at Nagpur and Maharashtra
Pollution Control Board (MPCB) at Pune. Yearly Environment Statement, a
requirement as per the consent document of Maharashtra Pollution
Control Board (MPCB), is being submitted in the month of September
every year and the last report was submitted on September 30, 2015.
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. Till date around 1,200 properties are ready
for hand over to customers. Of these, around 972 units have already
been handed over to customers. Work on rest of properties - Lake View
apartments, Club View apartments, Delfino apartments, Valley View
apartments, Brook View apartments, Rental housing, Retail and hostel
tower B, Christel House Phase II, Novotel Hotel and Holiday Inn is in
Work on infrastructure for the second town of Mugaon has been
accelerated. Work on utilities is in progress. Work on 37 buildings at
Mugaon has commenced.
The improvement to the existing Mugaon-Tamhini Zilla Major District
road excluding the stretch crossing through Forest Land is completed. A
portion of this road will also form a part of the approach road for the
proposed tunnel between Tamhini and Mugaon. Work on the inter village
road from Mugaon to Dhamanohol is completed (6 kms). Rehabilitation
work on new gaothans has commenced. This rehabilitation will also help
augment the construction of the first phase of the apartments in
Lavasa has also initiated a number of development and empowerment
programs for the local community. Some of the key initiatives include
provision of treated drinking water to 18 villages in the project area
at 72 locations on a daily basis. Calligraphy workshops, aptitude tests
and counseling for students of Zilla Panshad (ZP) schools, creche for
labor children; starting the Apollo Lavasa Primary Health Centre at
Bhoini and provision of free health check up, medicines and ambulance
service to villagers; monthly health and awareness camps for HIV/ AIDS,
malaria, nutrition, and water borne diseases. Employment and self
employment opportunities to the locals have also been provided.
ii) HCC Real Estate Ltd
HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company
is into the business of building residential and office complexes in
real estate sector.
HRL (Thane) Real Estate Limited
Your Company initiated the acquisition of 183 acres of land at
Ghodbunder Road, Thane for Integrated Township Development. Till date
the Development Agreement and Power of Attorney for 32 acres have been
executed in favour of Company. The Company continued its activity of
securing its position for land title and other documentation.
The Company has filed criminal case against Mr. Atul Sonawala and 8
other Directors of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is in
process for the said case.
HRL Township Developers Limited
No activities were carried out during the year. Your Company continued
its search process for joint development opportunities.
Nashik Township Developers Limited
During the year, the Company sold its land and completed all the land
related transactions. Further the Company is looking for joint
development opportunities in residential sectors since Nashik city is
growing industrially as well as economically.
Maan Township Developers Limited
The Company has acquired approx. 28 acres of land and the Development
Agreement and Power of Attorney have been executed in favour of the
Company. The Company in this year has decided to sell the land in piece
parcels. MOU has been signed with a Real Estate Company for sale of 5
Acres of land and has executed sale deed for 4 Acres.
Powai Real Estate Developers Limited
No activities were carried out during the year though the Company
continued to look for an opportunity to find ideal land parcels for
joint development in residential sectors
HCC Realty Limited
No activities were carried out during the year.
Panchkutir Developers Limited
During the year, your Company continued its efforts on the following
projects in residential sector:
Development of Vikhroli (E) land parcel: Out of the total land holding
of around 32 acres by the Panchkutir Developers Ltd. in Vikhroli (E),
the survey of tenements on Phase-I of 14.5 acres of land to ascertain
the development potential of the free sale component is completed. Out
of the 1960 slum residents, consent of about 1400 residents
representing more than 70% has already been obtained and the process
for forming the society is in progress. Proposal has been submitted to
SRA for Phase-I comprising of 750 tenants of 4 Societies.
Slum declaration of Phase-I land was challenged and the same has been
dismissed by the Special Slum Tribunal. Subsequently the litigant filed
Writ Petition challenging the above said Order of the Slum Tribunal in
High Court. High Court interalia asked tribunal for actual verification
of slum. But the litigant filed an appeal challenging the above said
Order of the Single Judge of High Court before the Divisional Bench.
Development of Powai land: MOU-cum- Development Agreement and Power of
Attorney were executed by land owner in favor of the SPV, Panchkutir
Developers Ltd a subsidiary of HCC for 12 acres of land. Due to non
performance by the land owner of the various obligations under the MOU-
cum-Development Agreement in spite of repeated reminders, we have been
advised by our solicitor to invoke the Arbitration clause forming part
of the MOU-cum-Development Agreement. Accordingly, Arbitration
proceedings have been initiated and till date evidence of Claimant''s
witnesses is completed and matter is now fixed for evidence of
During the pendency of the proceedings, Smt. Nayak, litigant has
submitted a proposal to settle the matter by making lump sum payment
which was accepted by the Company. Accordingly Consent Terms were
executed on November 16, 2015 and the Learned Arbitrator has passed an
award on December 15, 2015 in terms thereof. The Company has received
full payment by banker''s cheque and has executed cancellation Deeds of
MOU and lease deed.
iii) HCC Infrastructure
HCC Infrastructure Company Ltd., a wholly owned subsidiary of your
Company, operates its business through its subsidiaries HCC Concessions
Ltd. (HCON), HCC Power Ltd., and HCC Operations & Maintenance Ltd
(HOML). HCON develops and manages road assets, HOML operates
commissioned assets and HCC Power is exploring opportunities in the
power sector to leverage HCC''s capabilities. HCON has developed 6 NHAI
road concessions over the last 9 years. In the past financial year,
after the sale of two of its de-risked operational projects i.e. Nirmal
BOT Ltd and Dhule Palesner Tollway Ltd, the current portfolio has four
National Highway concessions with Rs. 5,000 crore asset base.
In line with your Company''s plan, the focus over the last fiscal year
has been on strong construction management, efficient operations and
raising capital. The management team at the Company has been
continuously working to achieve quality and timely execution to create
value for all its stakeholders with complete focus on financial
discipline. The Company continues to provide reliable, safe and world
class services to the country''s end users.
In 2011, the Xander group, a global investment firm, had acquired a
14.5% stake in HCON for Rs. 240 crore.
Current Road Portfolio:
HCON''s current portfolio comprises of four toll based projects: the
Delhi Faridabad Elevated Expressway (dfskyway™) on NH2, and three
contiguous sections of 250 km in West Bengal on NH34. Of these, Delhi
Faridabad Expressway and the first leg of NH34 development i.e. the
Baharampore Farakka Highways are operational. These two projects have
been operational for five and two years, respectively.
In the last financial year, your Company completed the stake sale of
two assets. The transaction for Nirmal BOT Ltd, the annuity project in
Telengana (erstwhile Andhra Pradesh) was completed in December 2015 and
the sale of Dhule Palesner Tollway, the 89 km highway on NH3 connecting
Agra and Mumbai, was consummated in October 2015.
Farakka Raiganj Highway, the second and largest leg of NH-34
development in West Bengal, achieved significant progress in the last
fiscal year. The project is expected to be commissioned in the next few
months while final completion is expected by the end of next fiscal
year. The last leg of NH34, Raiganj Dalkhola, which has been delayed
nearly 6 years due to delays in land acquisition, has seen significant
improvement in availability of Right of Way (ROW), and your Company has
approached the lenders consortium and NHAI for support in restarting
the project. While the NHAI has acknowledged the sizeable cost
increase, they remain reluctant on supporting the project with funds
including additional grant. In the interest of all stakeholders and
being prod by NHAI, the concessionaire has started basic earthworks,
but full scale mobilization will depend on appropriate support from
NHAI and lenders.
Material defaults by NHAI, largely due to delayed handing over of land
for all three NH-34 packages have resulted in the Concessionaire''s
filing of a claim of Rs. 1,528 crore as damages. Of these the Company
has started the arbitration proceedings for the Baharampore-Farakka and
Farakka-Raiganj projects. After muted growth due to the recent
economic slowdown, the traffic growth on Baharampore-Farakka has been
strong in the last financial year and NH-34 projects continue to be a
substantial source of value creation for your Company.
In the last financial year, ~1,600 km of highways were awarded on BOT
basis. The Ministry of Road Transport and Highways (MoRTH) and NHAI
have introduced a new Hybrid Annuity model for development of road
assets on PPP mode. Your Company is evaluating bidding for select
Hybrid Annuity projects, potentially in partnership with third parties.
Status of Operational Assets: Baharampore Farakka Highway (NH-34)
This is the first section of HCON''s Rs. 4,300 crore development of
NH-34 (West Bengal) from Baharampore to Dalkhola. The project stretch
is the arterial connectivity between North and South Bengal providing
nearest access to Kolkata and Haldia ports for the north eastern states
of India and neighbouring Bangladesh, Bhutan and Nepal. The traffic on
NH34 comprises 85-90% commercial traffic, carrying a diversified mix of
manufactured goods, sand, quarry stones, building materials, steel,
jute, food grains and tea.
The concession period for the project is 25 years, including a
construction period of 30 months. The project is being implemented with
an investment of Rs. 1,424 crore. The project achieved commercial
operations in May 2014 for partial length of the highway while land was
being acquired for the remaining portion. The total revenue for the
last fiscal year was Rs. 112 crore, an increase of 37% over the
previous financial year. The operations and maintenance is being
managed by HOML.
The Company has successfully implemented the 10x tolling for overloaded
vehicles since August 2014 as per NHAI circular, to prevent the
economic deterioration of the asset and to meet the increased costs due
The balance land for the Baharampore bypass was handed over in the
second quarter of last fiscal. The completion of the project is delayed
by 34 months as of March 2016, largely due to material defaults by NHAI
in providing land on a timely basis. The Final Completion (FCOD) is
expected to be completed after a delay of 56 months due to delayed
handover of ROW, tardy design clearances for major bridges and
structures, removal of various hindrances, utilities shifting, etc. The
Concessionaire has filed Rs. 578 crore worth of claims from the NHAI
for the damages suffered due to NHAI defaults. The Concessionaire will
submit further claims for increased costs and arbitration proceedings
are underway. The Company has filed the Statement of Claim before the
The Company has also achieved the sanctions from the lenders consortium
for cost overrun in the last fiscal to complete the project in the
absence of timely realization of claim from NHAI.
Delhi Faridabad Elevated Expressway (NH-2) (dfskyway™)
The Delhi Faridabad Elevated Expressway or dfskyway™, awarded in
2008, is a six lane 4.4 km elevated highway connecting Delhi and
Haryana at Badarpur, developed by HCON with an investment of nearly Rs.
600 crore. The dfskyway™ reduced travel time by over 40 minutes
through an extremely congested corridor that benefits residents and
inter- state traffic alike.
The project has a concession period of 20 years, including construction
period of 2 years. In the last fiscal year the Company suffered a
material impact due to a Supreme Court order for collecting
Environmental Compensation Charge from commercial vehicles entering New
Delhi (thereby discouraging their entry into the capital), resulting in
a substantial dip of ~40% in commercial vehicles. It is clear that the
Apex Court and the Delhi government are working hard to prevent
commercial vehicles using Delhi as a thoroughfare (admittedly for good
reason to check pollution), but which has unfortunately caused a
devastating impact and potential political event by permanently
The Company is evaluating several options with the lenders including
restructuring options as per RBI guidelines and potential termination
with NHAI due to
Force Majeure event.
In order to enhance the revenue on this project and reduce maintenance
costs, the Company is also in the process of implementing 10x tolling
for overloaded vehicles in accordance with NHAI Fee Rules.
The Company has also submitted its proposal for deferment of premium
payments to improve liquidity, as well as a comprehensive proposal for
advertising along the project highway. The project is a signature
project in Delhi having very high visibility and the Company is
expecting significant revenues from the latter sources.
Status of Assets under Construction:
Farakka Raiganj Highway (NH-34)
Farakka Raiganj is the middle and largest section of the 250 km
development. This section is about 102 km in length and traverses
through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and
North Dinjapur districts of West Bengal. It also passes through various
small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before
Raiganj town. The concession period is 30 years, including a
construction period of 30 months. The project is being implemented with
an investment of Rs. 1,720 crore.
A substantial stretch of roads and structures of this second and
largest leg of NH-34 development has been completed and toll collection
is expected to commence by Q1 of financial year 2017. In the last year,
almost the entire land has been made available for construction after a
substantial delay of ~4 yrs by NHAI. The Provisional Completion (PCOD)
is estimated to be achieved 35 months after SFLD (Scheduled Four-laning
Date) while Final Completion (FCOD) will be delayed by a total of 44
months due to delayed handover of ROW, tardy design clearances for
major bridges and structures, removal of various hindrances, utilities
shifting, etc. As of June 30, 2015, the Concessionaire has filed Rs.
681 crore of claims from the NHAI for the damages suffered due to NHAI
defaults. The arbitration proceedings are underway and the Company has
filed its Statement of Claim and Rejoinder to the Statement of Defense
filed by the NHAI. The Concessionaire will submit further claims for
increased costs beyond June 30, 2015.
The Company has also achieved the sanctions from the lenders consortium
for cost overrun in the last fiscal to complete the project in the
absence of timely realization of claim from Authority.
Raiganj Dalkhola Highway
This is the smallest northern section of the NH-34 development which
has suffered the worst delay of nearly 6 years due to non-acquisition
of land. The project stretch starts at Raiganj (Km 398.000) and
terminates at the town of Dalkhola (Km 452.750).
The 50 km project stretch traverses through Raiganj and Dalkhola towns
in North Dinjapur district of West Bengal. It also passes through
various small villages like Soharai, Karandighi, Maheshbathna and ends
at the intersection of NH31. The concession period is 30 years which
includes a construction period of 30 months. The project cost has
increased to Rs. 1,204 crore and progress is contingent on appropriate
support from NHAI and Lenders.
In the last 1.5 years, a significant portion of land has been made
available for construction after a delay of nearly 6 years;
Pre-construction activities such as clearing & grubbing and earthwork
has started in the interest of all stakeholders.
As of June 30, 2014, the Concessionaire has filed Rs. 269 crore worth
of claims from the NHAI for the damages suffered due to NHAI defaults.
The Concessionaire will submit further claims for increased costs
beyond June 30, 2014. Since the realization of claim from the Authority
is a lengthy process, the SPV meanwhile had approached its Lenders to
assist in funding the large cost overrun and has received sanction from
the lead bank for additional funding. Once the financing arrangement
is in place with adequate support from NHAI, the Company will start
full-fledged construction work with an aim to complete within next 30
iv) Steiner AG, Switzerland
Steiner AG, one of the leading project developers, total and general
contractors (TC/GC) in Switzerland, offers comprehensive services in
the fields of new constructions, refurbishment and Real Estate
Your Company owns 100% stake in Steiner AG through HCC Mauritius
Enterprises Limited and HCC Mauritius Investment Limited, wholly owned
As per IGAAP Accounting Standards, Steiner AG has registered a revenue
of CHF 636.8 million (Rs. 4255.3 crore) compared to CHF 853.9 million
(Rs. 5604.9 crore) in the previous year with a loss of CHF 0.98 million
(Rs. 6.5 crore) compared to a net profit of CHF 1.7 million (Rs. 10.8
crore) in the previous year. While as per Swiss GAAP Accounting
Standards, Steiner AG has registered a revenue of CHF 649.7 million
(Rs. 4341.8 crore) compared to CHF 854.1 million (Rs. 5605.8 crore) in
the previous year with a net profit of CHF 1.9 million (Rs. 12.7 crore)
compared to CHF 2.0 million (Rs. 13.1 crore) in the previous year.
The Company secured fresh orders worth CHF 850 million (Rs. 5843.6
crore). The order backlog was CHF 1.32 billion (Rs. 9074.8 crore) at
the end of the year. In addition to this, the company has secured
orders for more than CHF 700 million (Rs. 4812.4 crore), where the
contracts are yet to be signed. The closing cash balance of the company
was CHF 87.1 million (Rs. 598.7 crore)as per Swiss GAAP while as per
IGAAP closing cash balance was CHF 85.4 million (Rs. 587.1 crore),
reflecting the companys steady financial performance and strong
Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs.
75.5 crore and loss of Rs. 5.9 crore in FY 2015-16.
v) Highbar Technologies Ltd
Highbar Technologies Ltd (''Highbar''), 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
In the financial year 2015-16, which is just the sixth year of
operations, Highbar has been able to cross the total number of
customers beyond 100. This has been achieved when Highbar''s primary
customer segment, the infrastructure industry, is dealing with
Highbar is now providing SAP related services and IT infrastructure
services across multiple sectors like Manufacturing, BPO,
Agro-Chemicals in addition to Infrastructure, Real Estate, Retail,
Telecom, Consumer Products, PEB (Pre-engineered Buildings), Iron &
Steel etc. It has developed capabilities to successfully concurrently
execute large sized projects. Highbar has already started expanding its
reach in government sector by exploring opportunities with dedicated
team working on it. This year Highbar''s services for Government sector
made one of its prominent government customers go paperless.
Apart from this, Highbar has been honoured with two prominent industry
recognitions. First one is SAP Partner Awards in the category of ''Best
Pre-sales Customer Engagements'' for effectively engaging customers
through appropriate solutions across industries. Second one is
''ChannelWorld Premier 100 awards''. This award was given to the IT
players for being agile and adapting rapidly to the changing technology
and business landscape. Highbar has been recognised as one of the 100
agile IT players. This is the 2nd time that Highbar has been
recognised with Premier 100 awards. Agility is one of Highbar''s nine
brand drivers. With speed, agility and hunger for success. Highbar
Technologies has already created a niche for itself in infrastructure
and real estate industry by dominating ''IT for Infrastructure market''
with 100 customers in a short span of 6 years.
Highbar has grown its IT capabilities and the expertise in various
areas including ERP (Enterprise Resource Planning), Business
Intelligence and dashboards, cloud offerings through Highbar
Cloud Connect, Employee Portals, CRM (Customer Relationship Management),
DMS (Document Management System), BPC (Business Planning &
Consolidation), Treasury Management, FLM (File Lifecycle Management).
It has also ventured into new areas like SAP HANA, S/4 HANA, Simple
Finance, SAP Fiori, Screen Persona, Mobility Solutions, e-procurement
etc. The business has now established and is ready to expand in
multiple industries and geographies like India, Middle East, Europe and
Africa. Highbar''s first customer in Switzerland has already gone live
on SAP system and started garnering benefits of SAP.
Services provided by Highbar have gone much beyond SAP into process
consulting and IT infrastructure support such as data-centre and
networking. Solutions like Highbar RapidStart and Highbar RapidStart
Analytics are based on templatised approach to ERP and Business
Intelligence respectively and are intellectual properties (IP) assets
of Highbar. Highbar remains as preferred partner for SAP implementation
and re-implementation for the infrastructure industry. Eleven numbers
of Highbar''s implementations have now become global case studies,
published on SAP''s website as reference cases.
Highbar continues to support your Company''s group companies including
your Company, HCC Infrastructure, HCC Real Estate, Lavasa and Steiner
India across the IT value chain. Your Company''s SAP Customer Centre of
Expertise (CCOE) was certified by SAP this year and benchmarked amongst
top 1% out of 2,93,000 SAP customers globally. With a view to be at the
forefront of IT, entire SAP systems at your Company viz. ERP, CRM, DMS
etc were upgraded to the latest versions, thereby ensuring SAP support
for at least the next ten years i.e. till 2025 along with access to new
business functionalities which were hitherto not available. The
underlying hardware, Operating systems and Database were also upgraded
and is now scalable for SAP usage at much higher levels and at better
speed. The drive undertaken for last few years to harness IT for
bringing about operational efficiency and cost controls continues with
the same vigour through further business process automations, process
refinements and tighter controls supported by intelligent reporting and
Highbar, the successful spin-off from your Company''s internal IT
function, has established a proper scalable organization structure with
all the functions in place to facilitate and sustain future growth. It
is on the course towards accomplishing its vision of being ''the most
preferred end-to-end IT solution provider'' for infrastructure industry.
5. Subsidiaries, Joint Ventures and Associate Companies
During the year under review, the following changes have taken place
with respect to subsidiaries, joint Ventures and Associate Companies:
a) HCC Power Ltd (the wholly owned step-down subsidiary company) has
incorporated HCC Energy Ltd, a wholly owned subsidiary company on
August 11, 2015, making it a subsidiary of your Company from the date
of its incorporation.
b) Ecomotel Hotel Ltd (Associate Company) has become a subsidiary
(step-down subsidiary Company) of your Company w.e.f. July 15, 2015.
c) Apollo Lavasa Health Corporation Ltd (step-down subsidiary Company)
and Starlit Resort Ltd (step- down subsidiary Company) have become an
Associate Company w.e.f. November 16, 2015 and May 14, 2015
d) HCC Concessions Ltd (the step-down subsidiary company) has
transferred its 74% stake in Nirmal BOT Ltd on December 23, 2015;
accordingly Nirmal BOT Ltd ceases to be a subsidiary of your Company
w.e.f. December 23, 2015.
e) HCC Concessions Ltd (the step-down subsidiary company) has
transferred its equity stake in Dhule Palesner Tollway Ltd, a joint
venture company on 29.10.2015; accordingly HCC ceases to hold any share
in the said joint venture Company w.e.f. from 29.10.2015.
f) Sirrah Palace Hotels Ltd (step-down subsidiary Company) has ceased
to be a subsidiary of your Company w.e.f. November 6, 2015.
1. Western Securities Ltd
2. HCC Aviation Ltd
3. HCC Construction Ltd
4. Highbar Technologies Ltd
5. Highbar Technologies FZ LLC
6. HCC Mauritius Enterprises Limited
7. HCC Mauritius Investment Limited
8. Steiner AG (Formerly known as Karl Steiner AG)
9. Steiner Promotions et Participations SA
10. VM ST AG
11. Eurohotel SA
12. Steiner (Deutschland) GmbH
13. Steiner Leman SAS
14. SNC Valleiry Route De Bloux
15. Steiner India Ltd
16. HCC Infrastructure Company Ltd
17. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)
18. Badarpur Faridabad Tollway Ltd
19. Baharampore - Farakka Highways Ltd
20. Farakka - Raiganj Highways Ltd
21. Raiganj - Dalkhola Highways Ltd
22. Dhule Palesner Operations & Maintenance Ltd
23. HCC Power Ltd
24. HCC Energy Ltd
25. HCC Operations & Maintenance Ltd
26. Narmada Bridge Tollway Ltd
27. HCC Real Estate Ltd
28. HRL Township Developers Ltd
29. HRL (Thane) Real Estate Ltd
30. Nashik Township Developers Ltd
31. Maan Township Developers Ltd
32. Charosa Wineries Ltd
33. Powai Real Estate Developers Ltd
34. HCC Realty Ltd
35. Pune-Paud Toll Road Company Ltd
36. Panchkutir Developers Ltd
37. Lavasa Corporation Ltd
38. Lavasa Hotel Ltd
39. Lakeshore Watersports Company Ltd
40. Dasve Convention Centre Ltd
41. Dasve Business Hotel Ltd
42. Dasve Hospitality Institutes Ltd
43. Lakeview Clubs Ltd
44. Dasve Retail Ltd
45. Full Spectrum Adventure Ltd
46. Spotless Laundry Services Ltd
47. Lavasa Bamboocrafts Ltd
48. Green Hill Residences Ltd
49. My City Technology Ltd
50. Reasonable Housing Ltd
51. Future City Multiservices SEZ Ltd
52. Rhapsody Commercial Space Ltd
53. Valley View Entertainment Ltd
54. Warasgaon Tourism Ltd
55. Our Home Service Apartments Ltd
56. Warasgaon Power Supply Ltd
57. Sahyadri City Management Ltd
58. Hill City Service Apartments Ltd
59. Kart Racers Ltd
60. Warasgaon Infrastructure Providers Ltd
61. Nature Lovers Retail Ltd
62. Osprey Hospitality Ltd
63. Warasgaon Valley Hotels Ltd
64. Rosebay Hotels Ltd
65. Mugaon Luxury Hotels Ltd
66. Warasgaon Assets Maintenance Ltd
67. Hill View Parking Services Ltd
68. Whistling Thrush Facilities Services Ltd
69. Verzon Hospitality Ltd
70. Ecomotel Hotel Limited Integrated Joint Ventures
1. HCC-L&T Purulia Joint Venture
2. HCC Samsung Joint Venture CC-34
3. Alpine Samsung HCC Joint Venture
4. Alpine HCC Joint Venture
5. Nathpa Jhakri Joint Venture
6. Kumagai -Skanska-HCC Itochu Group
7. ARGE Prime Tower, Zurich Associate Companies
1. Nirmal BOT Limited
2. Warasgoan Lake View Hotels Limited
3. Andromeda Hotels Limited
4. Knowledge Vistas Limited
5. Bona Sera Hotels Limited
6. Apollo Lavasa Health Corporation Ltd
7. Starlit Resort Ltd
8. Evostate AG
Parking Kunstmuseum AG.
10. MCR Managing Corp. Real Estate AG
The details as required under Rule 8 of the Companies (Accounts) Rules,
2014 regarding the performance and financial position of each of the
Subsidiaries, Associates and Joint Venture Companies of the Company
forms part of the Consolidated Financial Statements of the Company for
the financial year ended March 31, 2016.
The Company has formulated a Policy for determining material
subsidiaries, which is uploaded on the website of the Company i.e.
www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/
HCC Policy for determining Material Subsidiaries. pdf
6. Qualified Institutions Placement of Equity Shares (QIP) / Change in
During the year under review, your Company''s Authorised Share Capital
has remained 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.
On April 10, 2015, your Company has issued and allotted 13,33,32,800
Equity Shares of Rs. 1 each at an issue price of Rs. 30 per Equity
Share (including premium of Rs. 29 per equity share) for an amount
aggregating Rs. 399,99,84,000 to Qualified Institutional Buyers in
accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2009 and Section 42 of the Companies Act,
2013 and the Rules made thereunder.
Post the QIP Issue, the present paid up Equity Share Capital of the
Company is Rs. 77,91,58,906 which comprises 77,91,58,906 Equity Shares
of Rs. 1 each.
7. Public Deposits
Your Company has not accepted any deposits from the public, or its
employees during the year under review.
8. Particulars of Loans, Guarantees & Investments
Particulars of Loans, Guarantees and Investments made during the year
as required under the provisions of Section 186 of the Companies Act,
2013 (Hereinafter The Act) are given in the notes to the Standalone
Also, pursuant to Schedule V of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirement) Regulations,
2015, particulars of Loans/Advances given to Subsidiaries have been
disclosed in the notes to the Standalone Financial Statements.
9. Employee Stock Option Scheme (ESOP)
As on March 31, 2016, 16,54,630 stock options are outstanding, 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, no options got vested in the employees of
the Company. 15,84,700 stock options got lapsed between April 1, 2015
and March 31, 2016.
The particulars with regard to the ESOPs as on March 31, 2016 as
required to be disclosed pursuant to the provisions of Rule 12 (9) of
the Companies (Share Capital and Debentures) Rules, 2014, are set out
in Annexure I to this Report.
10. Consolidated Financial Statements
In accordance with the Companies Act, 2013, Accounting Standard (AS) -
21 on Consolidated Financial Statements read with AS - 23 on Accounting
for Investments in Associates and AS - 27 on Financial Reporting of
Interests in Joint Ventures and as prescribed by Regulation 33 of the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (hereinafter referred to as
SEBI Listing Regulations), the Audited Consolidated Financial
Statements are provided in this Annual Report.
Pursuant to Section 129(3) of the Companies Act, 2013, a statement
containing the salient features of the financial statements of each of
the subsidiary and joint venture in the prescribed form AOC-1 is
annexed to the Annual Report.
Pursuant to Section 136 of the Companies Act, 2013, the financial
statements of the subsidiaries are kept for inspection by the
shareholders at the Registered Office of the Company. The said
financial statements of the subsidiaries are also available on the
website of the Company www.hccindia.com under the Investors Section.
11. Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adheres to the Corporate Governance requirements as
stipulated by Securities and Exchange Board of India(SEBI).
The report on Corporate Governance as prescribed in Schedule V (C) of
the SEBI Listing Regulations forms an integral part of this Annual
Report. The requisite certificate from the Auditors of the Company
confirming compliance with the conditions of Corporate Governance
alongwith a declaration signed by the Chairman & Managing Director
stating that the members of the Board of Directors and Senior
Management personnel have affirmed compliance with the respective codes
of conduct of the Board of Directors and Senior Management is attached
to the report on Corporate Governance.
Mr. D. M. Popat, Director of the Company, who was liable to retire by
rotation at the 89th Annual General Meeting of the Company held last
year had expressed his intention not to seek re-election as a Director
of the Company and accordingly had retired from his directorship on
July 14, 2015.
After a prolonged illness, Mr. Popat passed away on December 23, 2015.
The Board of Directors has expressed its deep regret and offered
condolences on the sad demise of Mr. Popat.
Mr. Popat was a Senior partner at M/s Mulla & Mulla & Craigie Blunt &
Caroe, Solicitors & Advocates since 1969 and was one of the most
eminent solicitors of the country. He was associated with our Company
for a very long time.
The Board has also placed on record the invaluable contribution of Late
Mr. D. M. Popat to the Board and the Company.
The Board of Directors of the Company at its meeting held on May 2,
2016 has appointed Mr. Rajgopal Nogja as the Group Chief Executive
Officer (Group CEO) of the Company w.e.f. May 3, 2016.
Pursuant to his appointment, Mr. Nogja has stepped down from the Board
as Group COO & Whole-time Director w.e.f. May 2, 2016.
The Board placed on record its appreciation for the valuable services
rendered and contribution made by Mr. Rajgopal Nogja during his tenure
as Whole-time Director (prior to his appointment as Group CEO) of the
Mr. N. R. Acharyulu was employed with our Company as Chief Business
Development Officer and on conclusion of his contract period, the Board
of Directors has appointed Mr. N. R. Acharyulu (DIN: 02010249) as an
Additional Director on the Board of the Company in the category of
Non-Executive Director, who is liable to retire by rotation, with
effect from May 2, 2016, in accordance with Section 161 of the
Companies Act, 2013 read with Article 88 of the Articles of Association
of the Company.
The Company has received a Notice under Section 160 of the Companies
Act, 2013, from a member signifying an intention to propose Mr. N. R.
Acharyulu as a candidate for the office of Director at the forthcoming
Annual General Meeting.
Brief Profile of the Director seeking appointment has been given in the
Explanatory Statement to the Notice of the ensuing Annual General
The Company has received Form DIR-8 from all Directors pursuant to
Section 164(2) and Rule 14(1) of Companies (Appointment and
Qualification of Directors) Rules, 2014.
The Independent Directors of the Company viz.,
Mr. Rajas R, Doshi, Mr. Ram P. Gandhi, Mr. Sharad M. Kulkarni, Mr.
Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary
declarations to the Company under Section 149(7) of the Act, confirming
that they meet with the criteria of Independence as prescribed for
Independent Directors under Section 149(6) of the Act and Regulation
16(b) of the SEBI Listing Regulations.
13. Key Managerial Personnel
Following persons are the Key Managerial Personnel of the Company
pursuant to Section 2(51) and Section 203 of the Act, read with the
Rules framed thereunder:
i) Mr. Ajit Gulabchand, Chairman and Managing Director
ii) Mr. Rajgopal Nogja, Group Chief Executive Officer
iii) Mr. Arun V. Karambelkar, President & CEO - E&C
iv) Mr. Praveen Sood, Chief Financial Officer of the Company designated
as Group CFO & EVP - HCC Group Office
v) During the year under review, Mr. V. P. Kulkarni, resigned as
Company Secretary with effect from July 30, 2015 and therefore he was a
Key Managerial Personnel till July 30, 2015
The Board placed on record its appreciation for the valuable services
rendered and contribution made by Mr. Vithal P. Kulkarni during his
long tenure as Company Secretary of the Company.
vi) Mr. Sangameshwar Iyer was appointed by the Board of Directors, in
place of Mr. V. P. Kulkarni, as the Company Secretary of the Company
with effect from July 31, 2015 and thereby is designated as Key
Managerial Personnel with effect from the said date.
vii) Mr. Rajgopal Nogja was appointed by the Board of Directors of the
Company at its meeting held on May 2, 2016, as the Group Chief
Executive Officer (Group CEO) of the Company w.e.f. May 3, 2016.
Pursuant to his appointment, Mr. Nogja has stepped down from the Board
as Group COO & Whole-time Director w.e.f. May 2, 2016.
Remuneration and other details of the said Key Managerial Personnel for
the financial year ended March 31, 2016 are mentioned in the Extract of
the Annual Return which is attached to the Board''s Report.
14. Board Committees
The Board of Directors of your Company had already constituted various
Committees and approved their terms of reference/role in compliance
with the provisions of the Companies Act, 2013 and Listing Agreement
(applicable uptil November 30, 2015)/ SEBI Listing Regulations
(applicable from December 1, 2015) viz. Audit Committee, Nomination and
Remuneration Committee, Stakeholders Relationship Committee and CSR
During the financial year 2014-15, in accordance with the provisions of
the erstwhile Clause 49 of the Listing Agreement, the Board had
voluntarily constituted the Risk Management Committee.
All decisions pertaining to the constitution of Committees, appointment
of members and fixing of terms of reference / role of the Committees
are taken by the Board of Directors.
Details of the role and composition of these Committees, including the
number of meetings held during the financial year and attendance at
meetings, are provided in the Report on Corporate Governance in the
A calendar of Board Meetings, Annual General Meetings and Committee
Meetings is prepared and circulated in advance to the Directors of your
The Board of Directors of your Company met 4 times during 2015-16. The
meetings were held on April 30, 2015, July 30, 2015, October 29, 2015
and January 28, 2016. The maximum time gap between any two consecutive
meetings did not exceed one hundred and twenty days.
16. Familiarisation Programme of Independent Directors
In compliance with the requirements of SEBI Listing Regulations, the
Company has put in place a familiarization program for Independent
Directors to familiarize them with their role, rights and
responsibility as Directors, the operations of the Company, business
The details of the familiarization program are explained in the
Corporate Governance Report and the same is also available on the
website of the Company and can be accessed by web link
17. Performance Evaluation
Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule
IV of the Companies Act, 2013 and Regulation 17 of the SEBI Listing
Regulations, Annual Performance Evaluation of the Directors as well as
that of the Audit Committee, Nomination and Remuneration Committee and
Stakeholders Relationship Committee has been carried out.
The Performance Evaluation of the Independent Directors was carried out
by the entire Board and the Performance Evaluation of the Chairman and
Non-Independent Directors was carried out by the Independent Directors.
18. Independent Directors Meeting
During the year under review, the Independent Directors of the Company
met on March 29, 2016, inter-alia, to discuss:
i) Evaluation of performance of Non-Independent Directors and the Board
of Directors of the Company as a whole.
ii) Evaluation of performance of the Chairman of the Company, taking
into account the views of Executive and Non-Executive Directors.
iii) Evaluation of the quality, content and timelines of flow of
information between the Management and the Board that is necessary for
the Board to effectively and reasonably perform its duties.
19. Criteria for selection of candidates for appointment as Directors,
Key Managerial Personnel and Senior Management Personnel
The Nomination and Remuneration Committee has laid down well-defined
criteria for selection of candidates for appointment as Directors, Key
Managerial Personnel and Senior Management Personnel in the Nomination
and Remuneration Policy recommended by them and approved by the Board
of Directors, which is attached to the Board''s Report as Annexure II.
20. Remuneration Policy for Directors, Key Managerial Personnel and
Senior Management Employees
The Nomination and Remuneration Committee has laid down the policy for
remuneration of Directors, Key Managerial Personnel and Senior
Management Personnel in the Nomination and Remuneration Policy
recommended by it and approved by the Board of Directors, which is
attached to the Board''s Report as Annexure II.
21. CSR Policy
The brief outline of the Corporate Social Responsibility (CSR) Policy
as recommended by the CSR Committee of the Directors and approved by
the Board of Directors of the Company and the initiatives undertaken by
the Company on CSR activities during the year are set out in Annexure
IV of this report in the format prescribed in the Companies (Corporate
Social Responsibility Policy) Rules, 2014. The CSR policy is attached
to this Report as Annexure III and is available on the website of the
Company i.e. www.hccindia.com
22. Related Party Transactions
All related party transactions entered during the year were in the
ordinary course of business and on an arm''s length basis.
The related party transactions attracting compliance under Section 177
of the Companies Act, 2013 and / or erstwhile Clause 49 of the Listing
Agreement / Regulation 23 of the SEBI Listing Regulations were placed
before the Audit Committee for approval.
There are no transactions to be reported in Form AOC-
2 in terms of Section 134 of the Act read with Rule 8 of the Companies
(Accounts) Rules, 2014.
There were no related party transactions which were placed for prior
omnibus approval of the Audit Committee.
A statement of all related party transactions entered was presented
before the Audit Committee on a quarterly basis, specifying the nature,
value and any other related terms and conditions of the transactions.
Further the details of the transactions with Related parties are
provided in the Company''s financial statements in accordance with the
The Related Party Transactions Policy as approved by the Board of
Directors of the Company has been uploaded on the website of the
Company at http:// www.hccindia.com/pdf/HCC_Policy_for_Related_
23. Directors'' Responsibility Statement
In accordance with the provisions of Section 134 (5) of the Companies
Act, 2013, your Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any.
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, 2016 and of the profit 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,2013 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.
e) the internal financial controls have been laid down to be followed
by the Company and such controls are adequate and are generally
operated effectively during the year.
Internal financial control over carrying cost of investment in
subsidiaries and recoverability of dues from subsidiaries, is covered
under internal financial control.
The management is of the view that diminution in the carrying cost of
investment in subsidiaries, if any, is temporary in nature and
recoverability of dues from subsidiaries are good. The view of the
management is also supported by a third party expert report.
However, in view of the uncertainties involved, your Auditors have
given a qualified opinion in their report in this regard, without
quantifying the impact. Other than this, your Auditors have opined that
the Company has in, all material respects, maintained adequate internal
financial controls over financial reporting (IFCoFR) and that they were
This response by Directors is based on the management note given under
Para 29 of this report.
f) proper systems to ensure compliance with the provisions of all
applicable laws have been devised and such systems are adequate and are
24. Industrial Relations
The industrial relations continued to be generally peaceful and cordial
during the year.
25. Transfer to Investor Education and Protection Fund (IEPF)
Your Company has, during the year under review, transferred a sum of
Rs. 11,95,382 to Investor Education and Protection Fund, in compliance
with the provisions of Section 125 of the Companies Act, 2013. The said
amount represents dividend for the year 2007-08 which remained
unclaimed by the members of the Company for a period exceeding 7 years
from its due date of payment.
26. Particulars of Employees and other additional information.
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197 of Companies Act, 2013 and Rule 5 (1)
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 has been appended as Annexure V to this Report.
The information as required under Rule 5 (2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 will
be provided upon request by any member of the Company. In terms of
Section 136 (1) of the Companies Act, 2013, the Report and the Accounts
are being sent to the members excluding the said Annexure. Any member
interested in obtaining copy of the same may write to the Company
Secretary at the Registered Office of the Company.
27. 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 (Accounts) Rules, 2014, is given in
Annexure VI forming part of this Report.
28. Statutory Auditors
The Members of the Company had, at the 88th Annual General Meeting
(AGM) held on June 20, 2014, approved the appointment of M/s Walker
Chandiok & Co. LLP, Chartered Accountants, Mumbai, bearing Firm
Registration No. 001076N as the Statutory Auditors of the Company, to
hold office from the conclusion of that AGM until the conclusion of the
6th AGM held thereafter (subject to ratification of the appointment by
the Members at every AGM held after the above said AGM).
Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that
appointment of the Auditor shall be subject to ratification by the
members at every Annual General Meeting till the expiry of the term of
At the 89th AGM held on July 14, 2015, the shareholders had ratified
the appointment of M/s Walker Chandiok & Co. LLP, Chartered
Accountants, Mumbai for the period covering their second year of
appointment viz., from the conclusion of the last AGM held on July 14,
2015 until the conclusion of the Annual General Meeting to be held in
the financial year 2016-17.
The said appointment of M/s Walker Chandiok & Co. LLP, Chartered
Accountants, Mumbai covering their third year of appointment viz, from
the conclusion of the ensuing AGM in financial year 2016-17 until the
conclusion of the next Annual General Meeting to the held in the
financial year 2017-18, has to be ratified by Members at the
forthcoming AGM and accordingly the said proposal is being placed for
As required under Section 139 of the Companies Act, 2013, the Company
has obtained a written consent from the Auditors to such continued
appointment and also a certificate from them to the effect that their
appointment, if ratified, would be in accordance with the conditions
prescribed under the Companies Act, 2013 and the Rules made thereunder,
as may be applicable.
29. Statutory Auditors'' Remarks
a. Statutory Auditors Qualification:
The Auditors'' Report to the Members on the Audited Financial Results of
the Company for the financial year ended March 31, 2016 contains the
As stated in Note 32 to the Standalone financial statements, the
Company''s long term investments as at March 31, 2016 include
investments aggregating Rs. 474.37 crore in its subsidiaries, namely,
HCC Real Estate Limited and Lavasa Corporation Limited; and the long
term loans and advances, non-current assets and other current assets as
on that date include dues from such subsidiaries aggregating Rs. 554.17
crore, Rs. 32.51 crore and Rs. 13.35 crore, respectively, being
considered good and recoverable by the management. However, these
subsidiaries have accumulated operational losses and their net worth is
fully/ substantially eroded as at March 31, 2016. Further, such
subsidiaries are facing liquidity constraints due to which they may not
be able to realize projections made as per their business plans. In the
absence of sufficient appropriate evidence, we are unable to comment
upon the carrying value of these investments and recoverability of the
aforesaid dues and the consequential impact, if any, on the
accompanying standalone financial statements.
b. Statutory Auditor''s Qualification on the Internal Financial
Controls relating to the above matter
The Auditors'' Report to the Members on the Internal Financial Controls
over financial reporting (IFCoFR) with respect to the Audited Financial
Results of the Company for the financial year ended March 31, 2016
contains the following qualification(s):
In our opinion, according to the information and explanations given to
us and based on our audit procedures performed, the following material
weakness has been identified in the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting as at March 31, 2016:
The Company did not have appropriate internal financial controls over
financial reporting in respect of its assessment of (a) ''other-than-
temporary'' diminution in the carrying value of the Company''s long-term
investments in its subsidiaries and (b) recoverability of long-term
loans and advances, non-current assets and other current assets due
from such subsidiaries. The inadequate supervisory and review controls
over Company''s process in respect of its aforesaid assessment in
accordance with the accounting principles generally accepted in India
could potentially result in a material misstatement in the carrying
value of investment in such subsidiaries and the aforesaid dues from
such subsidiaries and consequently, also impact the profit after tax.
In our opinion, except for the effects of the material weakness
described above in the Basis for Qualified Opinion paragraph, the
Company has, in all material respects, maintained adequate IFCoFR as at
March 31, 2016, based on the internal control over financial reporting
criteria established by the Company considering the essential
components of internal control stated in the Guidance note and were
operating effectively as at March 31, 2016.
We have considered the material weakness identified and reported above
in determining the nature, timing, and extent of audit tests applied in
our audit of the March 31, 2016 standalone financial statements of the
Company, and the material weakness has affected our opinion on the
standalone financial statements of the Company and we have issued a
qualified opinion on the standalone financial statements.
The Company, as at March 31, 2016, has (i) an investment amounting to
Rs. 474.36 crore (31 March 2015: Rs. 474.36 crore), long term loans and
advances Rs. 443.96 crore (31 March 2015:
Rs. 404.06 crore), other non-current assets Rs. 19.43 crore (31 March
2015: Rs. 25.01 crore) and other current assets Rs. 5.07 crore (31
March 2015: Rs. 3.43 crore) in HCC Real Estate Limited (HREL) which is
holding 68.70% share in Lavasa Corporation Limited (LCL) and (ii) an
investment amounting to Rs. 0.01 crore (March 31, 2015:
Rs. 0.01 crore), long term loans and advances Rs. 110.21 crore (March
31, 2015:Nil), other non- current assets Rs. 13.08 crore (March 31,
Rs. 14.30 crore) and other current assets Rs. 8.28 crore (31 March
2015: Rs. 77.24 crore) in LCL. While such entities have incurred
losses during its initial years and consolidated net-worth of all these
entities as at March 31, 2016 has been substantially/fully eroded, the
underlying project in such entities are in the early stages of
development and are expected to achieve adequate profitability on
substantial completion and / or have current market value of certain
properties which are in excess of the carrying values, hence net-worth
of these subsidiaries does not represent its true market value.
Therefore, the decline in the value of above investments is considered
to be temporary in nature and the loans and advances, non-current
assets and other current assets together with the interest thereon are
good and recoverable.
Based on the above, management believes that the Company''s internal
financial control in respect of assessment of the carrying value of
investment, recoverability of loans and advances, current and
non-current assets in subsidiaries were operating effectively and there
is no material weakness in such controls and procedures.
30. Secretarial Audit
Secretarial Audit for the financial year 2015-16 was conducted by M/s
BNP Associates, Company Secretaries in Practice in accordance with the
provisions of Section 204 of the Companies Act, 2013. The Secretarial
Auditor''s Report is attached to this Report as Annexure VII. There are
no qualifications or observations or remarks made by the Secretarial
Auditor in his Report.
31. Cost Audit
In compliance with the provisions of Section 148 of the Companies Act,
2013, the Board of Directors of the Company at its meeting held on July
30, 2015 had appointed M/s Joshi Apte & Associates, Cost Accountants as
Cost Auditors of the Company for the financial year 2015-16. In terms
of the provisions of Section 148(3) of the Companies Act, 2013 read
with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014,
the remuneration of the Cost Auditors has to be ratified by the
members. Accordingly, necessary resolution is proposed at the ensuing
AGM for ratification of the remuneration payable to the Cost Auditors
for financial year 2015-16.
32. Risk Management
Pursuant to the requirement of Section 134 (3)(n)of the Companies Act,
2013, the Company has already in place a Risk Management Policy.
The Company has a robust Business Risk Management (BRM) framework to
identify and evaluate business risks and opportunities. This framework
seeks to create transparency, minimise adverse impact on the business
objectives and enhance your Company''s competitive advantage.
The business risk framework defines the risk management approach across
the enterprise at various levels including documentation and reporting.
The framework has different risk models which help in identifying risks
trend, exposure and potential impact analysis at a Company level.
In accordance with the provisions of the erstwhile Clause 49 of the
Listing Agreement, during the financial year 2014-15, the Board had
voluntarily constituted the Risk Management Committee.
33. Internal Control Systems and their adequacy
The Company has Internal Control Systems, commensurate with the size,
scale and complexity of its operations. The Internal Audit Department
monitors and evaluates the efficacy and adequacy of internal control
systems in the Company, its compliance with operating systems,
accounting procedures and policies within the Company. Based on the
report of internal audit function, process owners undertake corrective
action in their respective areas and thereby strengthen the controls.
Significant observations and corrective actions thereon are presented
to the Audit Committee from time to time.
34. Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls
commensurate with the size, scale and complexity of its operations. The
Company has policies and procedures in place for ensuring proper and
efficient conduct of its business, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records and the timely preparation of
reliable financial information. The Company has adopted accounting
policies, which are in line with the Accounting Standards and the
Companies Act 2013.
35. Vigil Mechanism Policy
The Company has a vigil mechanism policy to deal with instances of
fraud and mismanagement, if any. The vigil mechanism policy is
uploaded on the website of the Company at www.hccindia.com
36. Sexual Harassment
HCC has always believed in providing a conducive work environment
devoid of discrimination and harassment including sexual harassment.
HCC has a well formulated Policy on Prevention & Redress of Sexual
Harassment. The objective of the policy is to prohibit, prevent and
address issues of sexual harassment at the workplace. This policy has
striven to prescribe a code of conduct for the employees and all
employees have access to the Policy document and are required to
strictly abide by it. The policy covers all employees, irrespective of
their nature of employment and also applicable in respect of all
allegations of sexual harassment made by an outsider against an
During the year 2015-16, one case of Sexual Harassment was reported
which was investigated by a committee (including an external member) as
defined under the Policy of Prevention & Redress of Sexual Harassment
and appropriate action was taken in the said case.
37. Reporting of Frauds:
There have been no instances of fraud reported by the Statutory
Auditors under Section 143(12) of the Act and Rules framed thereunder
either to the Company or to the Central Government.
38. Significant and Material Orders passed by the Regulators/Courts,
There are no significant or material orders passed by the Regulators or
Courts or Tribunals which would impact the going concern status of your
Company and its future operations.
39. Material changes & commitment if any, affecting financial position
of the Company from the end of financial year till the date of the
There have been no material changes and commitments, if any, affecting
the financial position of the Company which have occurred between the
end of the financial year of the Company to which the Financial
Statements relate and the date of this Report.
40. Extract of Annual Return
The details forming part of the extract of Annual Return in prescribed
Form MGT 9 is annexed hereto as Annexure VIII and forms the part of
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
For and on behalf of Board of Directors,
Chairman & Managing Director
Hincon House, 11th Floor,
247Park, Lal Bahadur Shastri Marg
Mumbai 400 083
Date: June 3, 2016