To The Members
The Directors have pleasure in presenting the 26th Annual Report
together with the Audited Balance sheet and Profit & Loss for the 9
months period ended March 31, 2013.
1. FINANCIAL RESULTS
(Rs. in millions)
Particulars 9 months 15 months
period ended period ended
Gross Turnover 37590.89 61779.6
Profit before Interest,
Extraordinary items & Tax 3427.34 6702.21
Less : Interest & Finance
Charges 3478.88 5050.92
Less : Depreciation 639.67 1189.41
Profit before tax (PBT) (691.21) 462.38
Provision for tax 325.40 281.57
Profit after tax (PAT) (1016.61) 180.81
Balance brought forward
from previous year/
Adjustment 5109.72 4978.91
Profit available for
appropriation 4093.11 5159.72
Appropriations :Transfer to
Reserve 0 50.00
Balance carried to
Balance Sheet 4093.11 5109.72
Paid-up Capital 613.77 534.02
Reserves and Surplus 21077.97 22091.03
The Financial year 2012-13 is for 9 months period ended March 31, 2013
and hence the figures are not comparable with the previous financial
year ended June 30, 2012, which is a period of 15 months.
Your directors regret their inability to recommend dividend for the 9
months period ended March 31, 2013.
3. REVIEW OF PERFORMANCE
Your Company achieved a gross turnover of Rs. 37590.89 million for the 9
months period ended March 31, 2013 as against Rs. 61779.60 million for
the previous financial year (15 months period). On annualized basis,
turnover for the current period ended
March 31, 2013 increased by 0.55% as compared to statement of previous
The Earnings before Interest, Depreciation, Taxes and Amortisation
(EBIDTA) at Rs. 3,427.34 million are 9.12 % of the turnover for the
period under review as against 10.85% for the previous financial year.
4. CHANGE IN CAPITAL STRUCTURE
During the period under review, the Company allotted 3,98,76,790 equity
shares of face value of Rs. 2/- each to the shareholders of IVRCL Assets
& Holdings Limited as per the approved Composite Scheme of Arrangement
amongst the Company, IVRCl Assets & Holdings Limited, RIHIM Developers
Private Limited and IVRCl TLT Pvt. Limited. Consequent to the aforesaid
allotment the paid up capital of the Company has been increased to Rs.
The Company has 88 subsidiaries (including step down subsidiary
companies) as on date and the details of investment made by the company
in its various subsidiaries during the year and the value of the
investment as on March 31, 2013 have been furnished vide Note 11 of
Notes to Accounts.
Pursuant to section 212(8) of the Companies Act, 1956 the balance
sheet, Profit and loss account and other documents of the said
subsidiary companies are required to be annexed to the accounts of the
holding Company. Ministry of Corporate Affairs vide its General
Circular dated February 8, 2011 had granted general exemption for
companies from complying with the provisions of section 212(8) of the
Companies Act, 1956 subject to certain conditions being fulfilled by
the Company. Accordingly, the Balance sheet, profit and loss account
and other documents of the subsidiary companies are not being attached
with the Balance sheet of the Company. A statement containing the brief
details of financials of Subsidiary companies for the financial year
ended March 31, 2013 is enclosed in the Annual Report. The annual
accounts of the said subsidiary companies and relevant information
shall be made available to the shareholders who seek such information
and are also available for inspection by any shareholder at the
Registered Office of the Company, on any working day during business
hours. Copy of the said details will be provided upon receipt of
written request from the shareholders
HINDUSTAN DORR-OLIVER LIMITED (HDO)
For the financial year ended March 31, 2013, the company achieved a
turnover of Rs. 2,402.47 million,for the 9 months periods as against Rs.
7,187.53 million for the previous period of 15 months. The loss after
tax for the period is Rs. 1,209.45 million as against loss of Rs. 303.32
million for the previous period of 15 months. The EPS is Rs. ( 16.80) on
Rs. 2/- share.
6. CONSOLIDATION OF ACCOUNTS
In terms of clause 32 of the Listing Agreement with the Stock
Exchanges, the Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with the Accounting Standard AS-21
on Consolidated Financial Statements read with Accounting Standard
AS-27 on Financial Reporting of Interests in Joint Ventures, form part
of this Annual Report.
7. ISSUE AND REDEMPTION OF NON-CONVERTIBLE DEBENTURES
During the year under review, the Company redeemed 750 Non Convertible
Debentures of face value of Rs. 10/- lakhs each, aggregating to Rs. 75 Cr.
on March 13, 2013 as per the terms of the Issue, which were issued by
IVRCL Assets & Holdings Ltd which was merged with the Company.
8. EMPLOYEE STOCK OPTION SCHEMES
The earlier two ESOP Plans viz., IVRCL ESOP 2000 and IVRCL ESOP 2004
have been fully utilized.
IVRCL ESOP 2007 Scheme:
The members at the Annual General Meeting held on 7th September 2007
had approved the granting of 4,200,000 options, underlying 4,200,000
shares of Rs. 2/- each to the employees. The Scheme will lapse on 6th
The Company places IVRCL ESOP 2013 Scheme before the members of the
Company for their approval.
9. PUBLIC DEPOSITS
During the year under review, your Company has neither invited nor
accepted any public deposits from the public.
The Board at its meeting held on May 30, 2013 approved to accept the
Fixed Deposits from the public and members.
In accordance with the provisions of the Companies Act, 1956 read with
Articles of Association of the Company, Mr. R. Balarami Reddy and
Mr.K.Ashok Reddy, Directors, will retire by rotation at the forthcoming
Annual General Meeting and being eligible your Board recommends their
The term of office of Mr. R. Balarami Reddy as Executive
Director-Finance and Group CFO and Mr. K. Ashok
Reddy as Executive director will expire at the forthcoming Annual
General meeting. The Board recommends to reappoint them for a perid of
five years w.e.f 26.09.2013. Further they are here after proposed to be
made as directors not subject to retirement by rotation.
11. CORPORATE GOVERNANCE
Your directors adhere to the requirements set out in Clause 49 of the
Listing Agreement with the Stock Exchanges. The Report on Corporate
Governance as stipulated in the said clause is annexed as Annexure - A
hereto and forms part of this Report. The Chairman & Managing
Director''s declaration regarding the compliance of Code of Business
Conduct and Ethics for Board Members and Senior Management personnel
forms part of Report on Corporate Governance. Certificate from M/s.
Chaturvedi & Partners, Chartered Accountants, confirming the compliance
of conditions of Corporate Governance as stipulated under Clause 49, is
also annexed to the Report on Corporate Governance
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT.
The Management Discussion and Analysis Report as stipulated under
clause 49 of the Listing Agreement with the Stock Exchanges, is annexed
as Annexure-B hereto and forms part of this report.
13. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under section 217 (2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
i) in the preparation of the annual accounts the applicable accounting
standards have been followed along with proper explanations relating to
ii) the Directors have selected such accounting policies and applied
them consistently and made judgment 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 profit of the Company
for the financial year ended on that date.
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
iv) the Directors have prepared the annual accounts of the Company on a
''going concern'' basis.
M/s. Chaturvedi & Partners and M/s. Deloitte Haskins & Sells, the Joint
Statutory Auditors, retire at the ensuing annual general meeting and
are eligible for reappointment. The Company received confirmation that
their appointment, if made, would be within the limits prescribed under
Sec.224(1B) of the Companies Act, 1956. The Board of Directors
recommends the re- appointment of M/s. Chaturvedi & Partners and M/s.
Deloitte Haskins & Sells, as Joint Statutory Auditors
15. AUDITOR''S REPORT
With regard to Note 26 of the financial statements (Trade receivables
amounting to Rs. 2,157.42 million has been considered as good and fully
recoverable), the Statutory Auditors have qualified their report with a
remark that In the absence of external balance confirmation from the
customers, from whom the Trade receivables amounting to Rs. 2,157.42
million are due and other alternate audit evidence to corroborate
management''s assessment of recoverability of these balances and having
regard to the age of these balances, Auditors are unable to comment the
extent to which these balances are recoverable. The opinion of the
Directors on the aforesaid observation of Auditors is furnished below:
The amounts are considered realisable based on favorable developments
arising out of continuous contract management steps taken and
continuous engagement with the customers for realisation of dues by the
The Board of Directors is of the view that the receivables amount
covered in auditors report are good and fully recoverable
16. PARTICULARS OF EMPLOYEES
In terms of provisions of Section 217 (2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, as
amended the details of directors who were in receipt of remuneration of
Rs. 60,00,000/- or more per annum or Rs. 5,00,000/- or more per month, if
any, during the year under review is enclosed as an Annexure to this
Report. In terms of Section 219(1)(b)(iv) of the Act, 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. None of the employees listed in the
said Annexure, except Mr. E. Sudhir Reddy, Chairman & Managing
Director, is related to any Director of the Company.
17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Conservation of Energy, which is an on going process in the Company''s
activities. The core activity of the company is civil construction
which is not an energy intensive activity.
There is no information to be furnished regarding Technology Absorption
as your Company has not undertaken any research and development
activity in any manufacturing activity nor any specific technology is
obtained from any external sources which needs to be absorbed or
Innovation is a culture in the Company to achieve cost efficiency in
the construction activity to be more and more competitive in the
prevailing environment and the effect of the same cannot be quantified.
The particulars of expenditure and earnings in Foreign currency is
furnished in Note No. 34 to Notes to Accounts.
18. INDUSTRIAL RELATIONS
The Company enjoyed cordial relations with the employees during the
year under review and the Management appreciates the employees of all
cadres for their dedicated services to the Company, and expects
continued support, higher level of productivity for achieving the
targets set for the future.
19. VOLUNTARY GUIDELINES ON CORPORATE GOVERNANCE AND CORPORATE SOCIAL
The Ministry of Corporate Affairs, Government of India, issued
Voluntary Guidelines for Corporate Governance and for Corporate Social
Responsibility. The Voluntary Guidelines provide for various measures
and your Company considers the same in due course in a phased manner.
The Directors wish to express their appreciation of the support and
co-operation of the Central and the State Governments, bankers,
financial institutions, suppliers, associates, subcontractors and
employees at all cadres and expects the same in future as well for
sustaining the growth rates achieved in the past.
For and on behalf of the Board
Place: Hyderabad E. Sudhir Reddy
Date: 30.05.2013 Chairman & Managing Director