Your Directors have pleasure in presenting their 13th report on the business andoperations along with the audited financial statements of your Company for the year endedMarch 31, 2011.
(Amount in Rs.crores)
|Particulars || |
| ||Year ended March 31, 2011 ||Year ended March 31, 2010 ||Year ended March 31, 2011 ||Year ended March 31, 2010 |
|Total income ||2,502.60 ||1,753.81 ||352.99 ||76.69 |
|Profit before interest, depreciation and tax ||1,158.41 ||847.96 ||130.22 ||61.98 |
|Less: Interest ||357.21 ||249.39 ||27.92 ||7.01 |
|Depreciation ||225.37 ||181.91 ||- ||- |
|Profit before tax ||575.83 ||416.66 ||102.30 ||54.97 |
|Less: Provision for tax || || || || |
|Current Tax ||157.03 ||70.16 ||12.51 ||(0.88) |
|MAT Credit Entitlement ||(41.77) ||(65.42) ||- ||- |
|Deferred tax ||(3.52) ||8.56 ||(0.37) ||- |
|Profit after tax before minority interest ||464.09 ||403.36 ||90.16 ||55.85 |
|Less: Minority Interest ||11.71 ||17.95 ||- ||- |
|Profit after tax and after minority interest ||452.38 ||385.41 ||90.16 ||55.85 |
|Add: Profit at the beginning of the year ||554.48 ||257.75 ||29.02 ||25.82 |
|Profit available for appropriation ||1,006.86 ||643.16 ||119.18 ||81.67 |
|Appropriations: || || || || |
|Proposed Dividend ||49.86 ||64.60 ||49.86 ||49.86 |
|Corporate Tax on Dividend ||9.84 ||10.98 ||- ||- |
|Transfer to General Reserve ||17.61 ||13.11 ||4.51 ||2.79 |
|Balance Carried forward to Balance Sheet ||929.55 ||554.47 ||64.81 ||29.02 |
OPERATION AND PERFORMANCE REVIEW:
On the basis of Consolidated Financials
During the year your Company achieved a total income of Rs. 2,502.60 crores and anoperating profit of Rs. 1,158.41 crores for the year ended March 31, 2011 as against thetotal income of Rs. 1,753.81 crores and operating profit of Rs. 847.96 crores for theprevious financial year 2009-10. After providing for interest of Rs. 357.21 crores and Rs.225.37 crores for depreciation, the profit before tax is Rs. 575.83 crores against theprofit before tax of Rs. 416.66 crores for the previous financial year. The net profitafter tax and minority interest for the year ended March 31, 2011 stood at Rs. 464.09crores as against Rs. 403.36 crores for the previous year showing an annualized growth of15.06% due to increase in level of business activities.
On the basis of Stand alone financials:
During the year your Company received a total income of Rs. 352.99 crores and earnedoperating profit of Rs. 130.22 crores for the year ended March 31, 2011. After providingfor interest of Rs. 27.92 crores, the profit before tax was Rs. 102.30 crores. Provisionfor current tax for FY10-11 was Rs. 12.51 crores and deferred tax of Rs. (0.37) crores.The net profit for the year ended March 31, 2011 stood at Rs. 90.16 crores as against Rs.55.85 crores for the previous year.
Your Directors are pleased to recommend a dividend of 15% i.e. Rs. 1.50/- per EquityShare of face value of Rs. 10/- for the Financial Year 2010-2011, subject to the approvalof the members of the Company. The dividend on approval of the shareholder will be paid tothe eligible members as per the Book Closure as may be kept for the purpose. The equitydividend outgo for the financial year 2010-11 would absorb a sum of Rs. 49.86 crores.
Fitch Rating India Pvt. Ltd. has assigned:
A-(ind) [A Minus Ind] to the Company with a Stable Outlook. Fitch has assigned'A-(ind) [A Minus lnd]/Fl(ind) F1(ind) (F One Ind]' to term loans of Rs. 650 crores,A-(ind) [A Minus Ind]' to fund based limits of Rs. 185 crores and has also assignedratings of 'A-(ind) [A Minus Ind]/" F1(ind) (F One Ind] to the Company's non-fundbased limits aggregating Rs. 750 crore.
AA-(ind) [AA Minus Ind] to the outstanding loans of Mhaiskar Infrastructure Pvt.Ltd. aggregating Rs. 1,071 crores with Stable Outlook.
BBB(ind) [BBB Ind] to the project loans of IRB Surat Dahisar Tollway Pvt. Ltd.with Stable Outlook.
BBB + (ind) [BBB Plus Ind] to the project loans of IDAA Infrastructure Pvt. Ltd.of Rs. 594 crores with Stable Outlook.
A- (ind)(SO) [A Minus Ind SO] to the project loans of IRB Kolhapur IntegratedRoad Development Company Private Limited of Rs. 258 crores with Stable Outlook.
BBB-(ind) [BBB minus Ind] to the project loans of IRB Jaipur Deoli Tollway Pvt.Ltd. of Rs. 900 crores with Stable Outlook.
Credit Analysis & Research Ltd. has assigned:
'CARE A' [CARE Single A] to long tern facilities of Rs. 348.53 crores and 'CAREA' [CARE Single A]/PR1 [PR One] to long term/short term bank facilities of Modern RoadMakers Private Limited.
During the year under review, to meet the growing need of finance, various financialassistances have been availed by the Company. Your Company has availed Rupee Term Loan ofRs. 925 crores and non-fund based credit facilities to Rs. 700 crore from the consortiumof banks.
During the year under review, the subsidiary companies of your Company continue tocontribute to the overall growth of the Company. Your Company has been awarded with onenew road project i.e. Tumkur Chitradurga BOT Project from National Highway Authority ofIndia during the financial year. The Company has also received letter of award in April,2011 from NHAI for Ahmedabad Vadodara BOT Project.
Following is the list of Subsidiary Companies:
1. IRB Surat Dahisar Tollway Pvt. Ltd. (SPV for Surat Dahisar BOT Project)
2. Mhaiskar Infrastructure Pvt. Ltd.
(SPV for Mumbai Pune NH4 & Mumbai PuneExpressway Project)
3. IDAA Infrastructure Pvt. Ltd.
(SPV for Bharuch Surat BOT Project)
4. Thane Ghodbunder Toll Road Pvt. Ltd. (SPV for Thane Ghodbunder BOT Project)
5. Modern Road Makers Pvt. Ltd. (EPC Arm)
6. IRB Kolhapur Integrated Road Development Company Pvt. Ltd. (SPV for Integrated RoadDevelopment Project in Kolhapur)
7. ATR Infrastructure Pvt. Ltd.
(SPV for Pune Nashik BOT Project)
8. Ideal Road Builders Pvt. Ltd. (Thane Bhiwandi Bypass BOT Project)
9. Aryan Toll Road Pvt. Ltd. (SPV for Pune Solapur BOT Project)
10. NKT Road & Toll Pvt. Ltd. (SPV for Ahmednagar - Karmala - Tembhurni BOTProject)
11. IRB Infrastructure Pvt. Ltd.
(SPV for Kharpada Bridge BOT Project)
12. MMK Toll Road Pvt. Ltd. (SPV for Mohol - Kurul - Mandrup - Kamti BOT Project;Subsidiary of Ideal Road Builders Pvt. Ltd.)
13. IRB Pathankot Amritsar Toll Road Pvt. Ltd. (SPV for Pathankot Amritsar BOT Project)
14. IRB Talegaon Amravati Tollway Pvt. Ltd. (SPV for Talegaon Amravati BOT Project)
15. IRB Jaipur Deoli Tollway Pvt. Ltd. (SPV for Jaipur Deoli BOT Project)
16. IRB Goa Tollway Pvt. Ltd. (SPV for Panaji Goa BOT Project)
17. IRB Tumkur Chitradurga Tollway Pvt. Ltd. (SPV for Tumkur Chitradurga BOT Project)
18. IRB Ahmedabad Vadodara Super Express Tollway Pvt. Ltd. (SPV for Ahmedabad VadodaraBOT Project)
19. IRB Sindhudurg Airport Pvt. Ltd. (SPV for Greenfield Airport in Sindhudurg)
20. Aryan Infrastructure Investments Pvt. Ltd.
21. Aryan Hospitality Pvt. Ltd.
22. MRM Cement Pvt. Ltd. (Subsidiary of Modern Road Makers Pvt. Ltd.)
UNDER IMPLEMENTATION PROJECTS
IRB Surat Dahisar Tollway Pvt. Ltd.
IRB Surat Dahisar Tollway Pvt. Ltd. has been carrying out construction activities asper the schedule and completed substantial construction work on the project. Also, theManagement is confident to complete the construction within the scheduled time.
IRB Kolhapur Integrated Road Development Company Private Limited
IRB Kolhapur Integrated Road Development Company Private Limited was promoted toexecute Integrated Road Development Program ("IRDP") in Kolhapur on BOT basis todevelop approx. 50 kms of Roads in Kolhapur. Construction of the project will be completedby 2nd quarter of FY11-12 and thenafter, the Company will start collecting toll. TheCompany has increased its authorized share capital to Rs. 120 crores to enable to raisethe equity to execute the project. Further the Company has also increased its paid upcapital to Rs. 106.80 crores.
IRB Pathankot Amritsar Toll Road Pvt. Ltd.
The Company has mobilized its resources and commenced construction on the Project. TheCompany has completed approx. 10% of construction work and is hopeful to complete theconstruction within scheduled time.
Further, the Company has increased it authorized share capital to Rs. 45 crores andpaid up capital to Rs. 39.40 crores.
IRB Talegaon Amravati Tollway Pvt. Ltd.
The Company has completed approx. 10% of construction work on the project and ishopeful to complete the construction in schedule time.
Further, the Company has increased its authorized share capital to Rs. 50 crores toenable to raise the equity to execute the project. Subsequently, the Company has increasedits paid up capital to Rs. 43.51 crores.
IRB Jaipur Deoli Tollway Pvt. Ltd.
The Company has completed approx. 15% of construction work on the project and isconfident to complete the construction in schedule time.
Further, the Company has increased it authorized share capital to Rs. 60 crores andpaid up capital to Rs. 52.70 crores.
IRB Goa Tollway Pvt. Ltd.
The Panaji Goa BOT project involves Design, Engineering, Finance, Construction,Operation and Maintenance of Four Lanning of NH 4A from Goa/Karnataka Border kms 84.00 toPanaji - Goa kms 153.070 with total length of 65.07 kms in the State of Goa under NHDPPhase III on BOT basis. Your Company has incorporated a new entity viz. IRB Goa TollwayPvt. Ltd. to domicile this project and executed the concession agreement with NHAI onFebruary 19, 2010. The Company has sought a grant of Rs. 186.30 crores for the Projectfrom NHAI with concession period of 30 years and estimated cost of the Project is appx.Rs. 800 crores. The Company has achieved financial closure by tying up of debt of Rs. 300crores from the consortium of banks/Financial Institution.
However, NHAI has yet not given appointed date to the Company due to non-availabilityof requisite land for the project.
IRB Sindhudurg Airport Pvt. Ltd.
Sindhudurg Airport project involves Design, Built, Finance & Operation ofGreenfield Airport in Sindhudurg District in the state of Maharashtra. Your Company hasincorporated a new entity viz. IRB Sindhudurg Airport Pvt. Ltd. to domicile this project.This Company has executed Project Development Agreement with MIDC on September 25, 2009.
Further the Company has approached concern Government Authorities for necessaryapprovals and permissions. Public hearing for environmental clearance has been completed.However, there has been imposition of moratorium by the Ministry for consideration ofprojects for environmental clearance in the districts of Ratnagiri and Sindhudurg, inMaharashtra. Once this moratorium will be lifted and upon environmental clearance andother required clearances, the Company will commence construction on the project.
The Statement pursuant to Section 212 of the Companies Act, 1956 pertaining to holdingin subsidiary companies is attached. The Consolidated Financial Statements of the Companyand its subsidiaries, prepared in accordance with Accounting Standard AS21 form part ofthe Annual Report. Upon written request from the member, the Company Secretary will makethese documents available. These documents will be available for inspection at theRegistered Office of the Company, between 11.00 a.m. to 1.00 p.m. on all working days,except Saturdays, upto the date of the Annual General Meeting.
USAGE OF IPO PROCEEDS:
The total IPO proceeds of Rs. 94,456.68 lakhs is utilized as shown below:
(Rs. in lakhs)
|Particulars ||To be financed through the issue proceeds ||Utilization up to March 31, 2010 ||Utilization up to September 30, 2010 |
|Investment in equity shares of IDAA Infrastructure Private Limited ||9,000.00 ||9,000.00 ||9,000.00 |
|Repayment of existing loans of the Company ||23,600.00 ||23,600.00 ||23,600.00 |
|Repayment of existing loans of the Subsidiaries (Refer Note below) ||48,700.00 ||44,360.56 ||44,401.42 |
|General Corporate Purposes (Refer Note below) ||3,025.00 ||2,973.36 ||7,271.94 |
|Issue Related Expenses ||10,131.68 ||10,183.32 ||10,183.32 |
|Utilized as per Objects of the Issue ||94,456.68 ||90,117.24 ||94,456.68 |
|Temporary Investment in Mutual Funds/Bank Fixed Deposits || || || |
|Investment in Fixed Deposits ||- ||4,339.44 ||- |
|Total Temporary Investments ||- ||4,339.44 ||- |
|Total ||94,456.68 ||94,456.68 ||94,456.68 |
IPO proceeds of the Company earmarked for repayment of term loan of Thane GhodbunderToll Road Pvt. Ltd. ("TGTRPL") of Rs. 42.99 crores has been transferred toGeneral Corporate Purpose since one of the lenders of TGTRPL has shown their inability toaccept the prepayment of term loan. This amount has been given to the subsidiary Companyas a loan, to be utilized by it as working capital.
There are no variations in respect of utilization of net proceeds from the Company'sIPO as against those stated in the Prospectus dated February 8, 2008.
For FY10-11 NHAI has awarded around 5,000 kilometers of road projects showing more than50% year-on-year growth. Out of this, IRB was successful in bagging Tumkur-Chitradurgaproject covering roughly 115 kms. For FY11-12, NHAI have a very significant outlay ofaround 7,300 kilometers which they intend to award during the year. This is likely totranslate into approx. Rs. 70,000 crores plus opportunity for developers. Your Company isqualified to submit bids for projects worth of approx. Rs. 41,000 crores. Your Companysurely have the intention and aspiration to remain a lead player.
PROPOSED FUND RAISING
Your Company has been qualified to bid for various projects bid out by NHAI and otherState Undertakings. The Company intends to keep its lead in these projects. These growthplans, required availability of adequate capital at the Company's disposal in addition tothe steady cash inflows from operations. Therefore, your Directors have approached theShareholders for approval of enabling resolution to facilitate raising of capital of up toRs. 1,200 crores by issuing additional shares/securities of the Company.
Mr. Dattatraya P Mhaiskar and Mr. Sivaramakrishnan S. Iyer, Directors of the Company,liable to retire by rotation at the forthcoming Annual General Meeting and being eligible,offer themselves for re-appointment. Your Directors recommend their re-appointment.
Your Directors also appointed Mr. Sunil Talati as an Additional Director of the Companyw.e.f. December 13, 2010.
Mr. Talati will hold the office upto the date of the ensuing Annual General Meeting.Appropriate resolution seeking your approval for the appointment of Mr. Talati as aDirector of the Company liable to retire by rotation has already been included in thenotice of the Annual General Meeting.
As required by the Clause 49 of the Listing Agreements entered into with the StockExchanges, a Report on the Corporate Governance and Management Discussion and Analysisform part of the Annual Report and a certificate from a Practicing Company Secretary onthe compliance with the provisions of Corporate Governance is annexed to the CorporateGovernance Report. The Company has fully complied with the requirements and disclosuresthat have to be made in this regard.
M/s. S. R. Batliboi & Co., Chartered Accountants, Statutory Auditors of theCompany, will retire at the ensuing Annual General Meeting and being eligible, offersthemselves for re-appointment. Your Directors recommend their re-appointment.
As required under the provisions of Section 224(1B) of the Companies Act, 1956, theCompany has received a written certificate from the above Auditors proposed to bere-appointed to the effect that their re-appointment, if made, would be in conformity withthe limits specified in the said section.
The Company has not accepted or renewed any deposit from public during the year underreview.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm thefollowing:
1. In the preparation of the annual accounts, the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures, if any;
2. Your Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe Profit of the Company for that year;
3. Your Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; and
4. Your Directors have prepared the attached Statement of Accounts for the year endedMarch 31, 2011 on a going concern basis.
HUMAN RESOURCE MANAGEMENT
Your Company has a large pool of experienced and trained technical manpower with whichyour Company executes world-class and high quality projects - qualities which have becomesynonymous with the name IRB. Company remains committed on providing high level technicaltraining from institutions of world repute like NICMAR to its employees to continuouslybuild upon their expertise as well as to provide growth avenues to the employees.Employees are also nominated to attend other professional skill building programs.
Your Company is also associated with international professional bodies in its quest tocontinually excel in all its endeavors. The reputation of your Company as the one withfavourable work environment that encourages innovation and superior performance, acts as astrong magnet to attract new talent from the industry. Human resources continue to be oneof the core focus areas of the Company. Respect for individual, open work culture,effective communication, fair and equitable treatment and welfare of employees aresignificant. Employee Value Propositions which help your Company to retain a pool of largenumber of highly engaged professionals and generate high level of trust amongst itsemployees. Your Company remains 'employer of choice' with one of the lowest attrition rateof employees of less than 1% in the infrastructure sector since last three consecutiveyears.
PARTICULARS OF EMPLOYEES:
During the year, there were no employees, who drew remuneration more than the limitsspecified under the provisions of Section 217 (2A) of the Companies Act 1956, read withthe Companies (Particulars of Employees), Rules 1975, as amended.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Particulars of Conservation of Energy, Technology Absorption and Foreign ExchangeEarning and Outgo are mentioned in the Form A, B & C of the report.
Your Directors also take this opportunity to thank the Ministry of Road SurfaceTransport & Highways, National Highways Authority of India, Maharashtra State RoadDevelopment Corporation, Maharashtra Industrial Development Corporation, State&Central Government for their support and guidance. Your Directors also thank Ministryof Corporate Affairs, Bombay Stock Exchange Limited, National Stock Exchange of IndiaLimited, Financial Institutions & Banks, Stakeholders, Suppliers, Contractors, Vendorsand business associates for their continuous support and look forward to their support.Also, your Directors convey their appreciation to the employees at all levels for theirenormous personal efforts as well as collective contribution to the growth of the Company.
| ||For and on behalf of the Board of Directors |
| ||Virendra D. Mhaiskar |
| ||Chairman & Managing Director |
|Place: Mumbai || |
|Date: July 20, 2011 ||/ |
(Rule 2 of Indian Companies Act, 1956)
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
The Company is engaged in infrastructure activities and the same is not covered underthe Schedule.
The Company's efforts are to conserve energy wherever possible by economizing on theuse of power at the various sites.
(Rule 2 of Indian Companies Act, 1956)
TECHNOLOGY, ABSORPTION, RESEARCH AND DEVELOPMENT (R & D)
i) Specific Areas in which R & D has been carried out by the Company
No R & D activities carried out during the financial year 2010-11.
ii) Expenditure on Research & Development: No Expenditure incurred on R & D
Technology Absorption, Adoption and Innovation, Efforts made, Benefits derived, Importof Technology:
FOREIGN EXCHANGE EARNINGS AND OUTGO
a) There are no Export related activities. However Your Company may explore theopportunities for executing projects abroad.
b) Details of foreign exchange earnings and outgo during the year are as follows:
(Amount in Rs.)
|For the Year ended March 31 ||2011 ||2010 |
|Foreign Exchange earnings ||NIL ||NIL |
|Foreign Exchange outgo ||47,155,656/- ||274,041,329/- |