IVRCL Ltd Management Discussions.

Industry Overview

According to governments advance estimates for GDP, the growth estimate for the year 2016 is expected to be around 6 %, a little lower than the previous year. This, coupled with policy initiatives in the last year, is bolstering the spending of the infrastructure sector. Policy initiatives like the National Mission for Clean Ganga (NMCG), Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Smart Cities etc, have started showing progress and both New Orders as well as Fund transfers have started taking place. It is again projected that India will lead China as a higher growth economy.

The Infrastructure Industry is a key sector in developing economy. It gives very large employment running into crores of people and also has a multiplier effect on other economic sectors. In the last few years, the Infrastructure industry has slowed down due to a variety of reasons. The Governments reduced pace of awarding new projects; delays in execution of projects, lack of environmental clearances and delays in land acquisition have been significant contributors.

The problems of the sector as highlighted earlier have been addressed by the Central Government. New funding mechanisms under Smart City and NMCG have started being implemented.In the Roads BOOT as a method of awarding jobs has been stopped and new orders are based on the cash contract system / EPC system.

The Central Governments AMRUT (Atal Bihari Mission for Rejuvenation and Urban Transformation) scheme to finance infrastructure in the areas of water, sewerage, roads, waste management and smart cities in most of the towns in India has started taking off in select states. In addition the Smart Cities scheme has been launched for twenty cities and the second list of thirteen has also been announced. The Government is also proposing some big ticket investments in new areas like long distance high speed trains, metro train networks in cities and inland waterways development.

In our country, nearly 226 million people do not have access to safe drinking water and more than 100 million people live in places where water is severely polluted. About 54% of India faces high to extremely high water stress. When the annual per capita of renewable fresh water in a country or a region falls below 1700 cubic metre, it is held to be a situation of water stress. According to recent studies, per capita availability of water is likely to fall down to 1140 cum. in 2050 suggesting that were heading towards serious water crisis, if timely steps are not taken to tackle it. Once surface water is exhausted, people dig to find more water. Groundwater levels across 4,000 wells have receded by 54% in the last seven years. Falling groundwater levels shows that water is moving further away from the surface and becoming less accessible.

Over the years, increasing population, growing industrialization, expanding agriculture and rising standards of living have pushed up the demand for water. Efforts have been made to collect water by building dams and reservoirs and creating ground water structures such as wells. Recycling and desalination of water are other options but the cost involved is very high.

With all this, it is expected that outlook in this sector will continue to improve in the next two or three years. Order Books of key players have started to burgeon.


The water sector has seen a significant revival in the last year. In Telengana Mission Kakatiya as well as Lift Irrigation schemes have got under way. Similarly in other states like Rajasthan and Karnataka continuing projects are being awarded. The previous instrument of financing, the JNNURM scheme which had created many water projects, petered out in 2012 and has been replenished with a more comprehensive set of schemes under AMRUT.

In the Water segment, your company has completed 25000 km of pipeline installation, 1300 MLD of WTP and 100 MLD of Desalination Water Supply (first and largest of its kind in India). Your company continued its march as a leader in this sector.

List of Projects Completed in Water Sector:

1. HMWSSB - KDWSP - Phase -III - Manufacturing, supplying, lowering, laying, jointing, testing and commissioning of 2375 mm dia MS Pumping main with cement mortar inlining and out coating from CWR at Nasarlapally to CWR at Godakondla (along Nagarjunasagar - Hyderabad road from Km.82/2 to 59/6 Km.) including Manning, Operation & Maintenance for a period of 2 years - Package II (Joint Venture with TAI Infra - Total Value - Rs. 205.86 Crores - IVRCL Part - 158.51 Crores).

2. Civil & Electromechanical works for Reservoirs at GKVK / Betahalli Plantation, OMBR, Hudi and Booster Pumping Station - Contract W6b. Value Rs. 73.38 Crores

3. Augmentation of Deoghar Water Supply Scheme including - detailed survey, Leveling, Design including Drawing of each concerned items on Turnkey Basis. Value Rs. 49.56 Crores

4. Construction of internal roads, storm water drains, fire water reservoir, raw water reservoirs (2 Nos.) pump house, hose station and allied civil works for ONGC Mangalore Petrochemical Ltd., at Aromatic Complex Project, Mangalore SEZ, Mangalore, Karnataka. Value Rs. 46.97 Crores

5. Surveying, Engineering studies, Designing and Construction of 10 MLD WTP, ESR - 4 Nos., 6 M Dia Intake well with approach road including 150m of gangway with pump house, UG CWS of 2 ML, supply and laying of DI K-9/K-7 Rising and Distribution main, supplying and installation of VT & Centrifugal pump motor, Transformer and allied works, compound wall, staff quarters, Bridge on Gouri River for carrying of proposed DI Pipe and other allied works of Re-organization of Jhumri Telaiya Urban Water Supply scheme under DW & S Dn. Jhumri Telaiya and 6 months O&M of this scheme on Turnkey Basis. Value Rs. 25.29 Crores

6. NLC - BTPP - Three Years contract for the work of Operation and Preventive Maintenance and Security Patrolling activities of Water Carrier System of BTPP. Value Rs. 5.58 Crores

7. Operation & Maintenance of Sewage Treatment Plant (12 MLD) at Khajakunta Division No.122 in Kukatpally Division-14, West Zone, GHMC - Value Rs. 52 Lakhs

Major Ongoing Projects in Water Sector:

Raw Water Supply Projects

1. RWSS RGLC Panchala - Ghewra - Cherai of tehsil Osian, District Jodhpur Single point responsibility Turnkey Basis 379.97 Crores

2. Regional Water Supply Schemes of 283 Villages and their NRVs & Dhanies of Deeg & Nagar Tehsils of Dist. Bharatpur under CDBP WS Project Single point responsibility Turnkey Basis - Rs. 263 Crores

3. "Narmada DR Project based Cluster Water Project of 138 Villages and Sanchore Town of District Jalore Single point responsibility Turnkey Basis - Rs. 255.00 Crores

4. Cluster Scheme of 205 Villages of Asind tehsil along with Augmentation of UWSS of Asind Town from Haripura Chouraha Headworks under Chambal - Bhilwara Water Supply Project, Phase-II - Single point responsibility Turnkey Basis- Rs. 249 Crores

5. Design, Engineering, Manufacture, Supply, Transportation to Site, Storage, Erection, Testing and Commissioning and Operation & Maintenance for 10 Years for all the Equipment including all Mechanical, Civil, Electrical works under Phase - 1 for Pumping Station-1 (PS-1) at Chainage 100.970 Kms. for Kachchh Branch Canal - SSNL (JV with WUXI) Pumping Station-1 (PS-1) at Chainage 100.970 Kms. for Kachchh Branch Canal - SSNL - Rs. 183. 4 7 Crores

Industrial Water Projects

1. Make-up Water pipes package for Solapur Super Thermal

Power Project (2x660 MW) for NTPC. - Rs. 71.19 Crores

2. Raw Water and Fire Water Reservoir at PATA for Petrochemical Complex - II Project for GAIL. Rs. 35.96 Crores

3. Construction of Lift Pump House Civil works package for Farakka STPS. - Rs. 35.86 Crores

The new government has unveiled a plan to provide water for all. Signs of water industry order revival are coming in from some of the recently elected state governments. The central government proposes to treat polluted water (sewage) through schemes like Clean Ganga and AMRUT (Atal Mission for Rejuvenation and Urban Transformation) for the cities of India not on the Ganga or Yamuna. With these plans getting implemented, the sector will see better years.


The agriculture sector gives livelihood to 45% of our population but contributes only 16% to the GDP. One way to increase their incomes and provide gainful employment is to convert poor precipitation rain-fed areas to one where an assured supply of water is available, through irrigation schemes.

Of the 140 million hectares (mh) of net cultivated area in India, only around 60 mh are irrigated. For the Indian agriculture to grow around 4% per year, it needs to increase the area irrigated, introduce new high-yield technology and expand cultivable land.

Indias twelfth five-year plan (2012-17) has focused attention on all of these issues. The plan puts great emphasis on aquifer mapping, watershed development, involvement of NGOs, and efficiency in developing irrigation capacity.

Your company has completed several large lift irrigation projects lately. The company has completed 2300 km of Canals, 2.5 million cum/hr of pumping, 476.8 MW total pump capability and 104 km of tunnels (4-18 m dia.) by March, 2015. Your company continues to forge ahead with these strong prequalifications.

The irrigation sector will now have better prospects. Several state governments, especially the recently elected ones, have made ambitious plans for lift and canal projects. This sector should be a steady performer with business from central India, which is primarily catered to by rain-fed rivers having substantial sea run off.

Irrigation Projects

1. Pranahitha - Chevella LIS Link VII - Package No.20 - Investigation, Design and execution of Lift irrigation Scheme for drawl / lifting of 25 TMC of water from Foreshore of SRSP Reservoir to Balancing Reservoir near Masani (V), Nizamabad Mandal & District by water conveyor system with all associated components on EPC Turnkey System. (Joint Venture with BATPASCO - WPIL & MHI - Total Value - Rs. 892.67 Crores - IVRCL Part - Rs. 624.88 Crores)

2. Kaleswaram LIS -Investigation, Design, and execution of Kaleswaram LIS with allied works lifting of 4.50 TMC of water from Godavari River near Kanepally (V) of Kaleswaram, Mahadevpur(V), Karimnagar Dist to feen an ayacut of 45,000 acres (Joint Venture with KBL - MEIL - Total Value - Rs. 499 Crores - IVRCL Part - 324.35 Crores).

3. Modernization of Godavari Delta System - Eastern Delta - Kakinada Canal, Samalkot including KMJ canal and its distributory system, East Godavari District on EPC Turnkey system (Package No.1 & Package No 2) - Rs. 222.59 Crore


Rapid urbanization has emerged as an undeniable global trend and India too has followed the trend. The trend demands todays city leaders to make tough decisions about infrastructure that will impact generations to come.

With 410 million city dwellers, India has the worlds second largest urban population. It is estimated that by 2030, about 600 million people will reside in cities in India and account for 70 % of Indian GDP, according to a McKinsey report. As more and more people migrate from rural to urban areas, the existing urban cities would soon be crunched on resources and infrastructure.

The central government has announced various mega schemes aimed at transforming urban India - 100 Smart Cities, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for 500 cities and Housing-for-All by 2022. These projects envision smart cities as part of a sustainable society in which people live, work and play in safety and comfort while also coexisting in harmony with the environment.

The last few years did not see any significant downturn as Buildings are a key requirement for economic growth. The market, however, has been very competitive. Demands on material availability have also become a major concern, for instance, sand is now very difficult to get.

Your company continued its trend and market presence. As of Mar 31, 2005, we completed about 51.6 million sft have been constructed using 1.8 million cum of concrete, 30,600 MT of structural steel, and 3.43 lac mtrs of piling (500-1600 mm dia). There would be a well-known building complex by IVRCL in most cities in India.

Major works completed by the Company during the year:

List of Projects Completed in Buildings & Industrial Structures:

1. CIDCO - Construction of CIDCO Exhibition Centre including Civil, Interior & site Development works at Plot No. 1A, 15, 29 & 30 in Sector 30A at Vashi, Navi Mumbai. Value Rs. 153.66 Crores

2. NTPC - Rihand - Complete Civil & Structural works for Coal Handling Plant package for Rihand Super Thermal Power Project, Stage - III (2x500 MW) at NTPC - Rihand. Value Rs. 121.96 Crores

3. TATA CUMMINS - Civil Contractor for TCL3 ISLe Project for Tata Cummins Limited at Phaltan, Dist. Satara (Maharashtra). Value Rs. 105.36 Crores

4. Uttar Pradesh Rajkiya Nirman Nigam Limited, - Construction of Trama Centre, SGPGl, Lucknow. Value Rs. 37.85 Crores

5. Construction of Computer Centre and Computer Science & Engineering Complex including Internal PH Works & PVC Conduit System for Electrical works for IIT Bombay, Powai, Mumbai 76. Value Rs. 33.49 Crores

6. Construction of 45m high circular lighthouse tower (using Jumping-form / conventional method) at Sacramento, East Godavari District. Value Rs. 1.36 Crores

List of Major On- going Projects in Buildings & Industrial


Commercial Building Projects

1. Construction of Two Elevated Metro Stations Viz. R.V.Road Terminal and Jayanagar Reach - 4 for Bangalore Metro Rail Project, Phase-I Rs. 71.52 Crores

2. Construction of Marketing Development cum Business Park (MDBP) including lifts and ancillary works at NSIC Complex, Okhla, New Delhi - Rs. 76.35 Crores

3. Construction of buildings for National Transmission & Asset Management Centre (NTAMC) and National Power Training & Management Centre & Trainees Hostel at Manesar Substation, Haryana for PGCIL. - Rs. 67.92 Crores

4. Construction of International Cricket Stadium at Amravati Township, Mangalagiri, Guntur District near Vijayawada including Infrastructure Facilities. - Rs. 51.04 Crores

Institutional Building Projects

1. Construction of the Campus of National Institute of Biomedical Genomics, West Bengal. - Rs. 105.34 Crores

Industrial Building Projects

1. Main Plant and Offsite Civil Works Package for Meja Thermal Power Project (2x600 MW) - Rs. 289.76 Crores

2. Main Plant, CW, Offsite civil works and Chimney & Chimney Elevator package for Solapur Super Thermal Power Project (2x660 MW) in Maharashtra. - Rs. 289.55 Crores

3. Site Leveling & Ground Improvement works Package for NTPC Tamilnadu Energy Company Limited Power Project (2x500 MW). - Rs. 93.65 Crores


Your company concentrates on Power Transmission Lines and Rural Electrification.

The governments plans to expand electricity transmission across the country have not progressed steadily in the last few years. Only a few projects awarded through tariff-based competitive bidding (TBCB) have achieved commissioning. In most cases, the work is yet to start, though commissioning was in the last 1-2 years.

Inordinate delays in getting the necessary government clearances coupled with land acquisition pose a major hurdle to the progress of power transmission and rural electrification projects.

While the central government is planning to award transmission projects worth Rs. 1 lakh crore in a years time, the already awarded projects that are to come up in 2016-18 are also embroiled in similar issues.

Your company has 7 lac BPL connections provided, 11000 villages electrified, 1460 km of transmission line (132, 220, 400 & 765 KV) erected, and 60 track kms of traction and OHE works done as of March 31, 2015. These match the industry best.

During the year, the following projects were completed:

List of Projects Completed in Power Sector:

1. Design, Engineering, Supply of Equipments / materials and installation, testing, commissioning and completion of facility for Rural Electrification work in Uttar Dinajpur of West Bengal. Value Rs. 125.91 Crores

2. Supply & Services Contract for Tower Package - P213 - TW01 for 765 KV S/C Angul Pooling Station - Jharsuguda Pooling Station Transmission Line (Line-1) (Part-I) associated with Part-A (System Strengthening in Orissa) of Transmission System for Phase-I Generation Projects in Orissa for PGCIL. Value Rs. 119.93 Crores

3. Haldia - Subhashgram Transmission Line Project - Supply of Materials, Survey / Erection / Commissioning for Tower package for 400 KV D/C Haldia - Subhashgram Transmission Line Project. Value Rs. 108.45 Crores

List of Major On- going Projects in Power Sector:

1. HVPNL - 132 kV S/C line on D/C towers from 220 kV S/ Stn. Batta to 132 kV S/Stn. Rajound, 132 kV D/C line from 400 kV S/Stn. Deepalpur to 132 kV S/Stn. Tajpur, 132kV S/C Line from 220 kV S/Stn., Batta to Dhanouri, 132kV S/C Line from 220 kV S/Stn., Batta to Padla, 132 kV S/C line on D/C towers from Dhudianwali to Kariwala Transmission Line (Total length = 89.78 Kms. Value; Rs. 29.33 Crores

2. CIDCO- Development of power supply infrastructure distribution network including construction of 33/11kV & 11/0.4kV HT Substations & allies electrical works in sector-25 to 45, Kharghar Node, Navi Mumbai (Phase-I)

- Value - Rs. 60.97 Crores


Its no secret that big economies poised for rapid growth need robust infrastructure with roads forming a major part of that. The Modi government has set ambitious targets of National Highways completion under the auspices of NHAI. The Railways ministry is also actively planning large investments to modernize the sector.

India has the second highest road network in the world, spanning over 4.7 million km carrying over 60% of the countrys total freight traffic and about 85% of the passenger traffic. However, only half of the country is paved, and less than a quarter of its national highways meet required standards. While road freight volume and the number of road vehicles have been growing at a compounded annual growth rate of 9.1% and 10.8% respectively, the growth rate of length of roads lags behind at 4%.

Indias rail network is the 4th longest and the most heavily used system in the world. The present suburban railway services in India are limited and are operational only in the metros. The sector does demand speedy investments which thankfully the central government has been announcing from time to time now giving a good share of infrastructure spend to transportation.

On the Transportation front, your company has 3402 lane km of Highways have been completed, 75 km of railway track work are done, and 1963 lane km of highway concession projects under operation and development.

A select List of Projects Completed in Transportation Sector:

1. Corporation of Chennai - Design and Construction of ROB at Mint Junction. Value Rs. 19.04 Crores

List of Major On- going Projects in Transportation Sector:

1. Widening of existing road to 2 Lane from Nechipu to Hoj, via Seppa, Khodaso, Saggalee, Arunachal Pradesh Package - Rs. 1486.00 Crores

2. Widening to 2-lane and improvement of Govindapalli - Salimi - Mahupadar road including a minor bridge over Chikabuka Nullah in Km.45 in Malkangiri District of Orissa- Rs. 74.48 Crores

3. Metropolitan Bridge to Garia Station Road Crossing, The BRTS Scheme under JNNURM Project (Package I). - Rs. 73.54 Crores

The government has announced the National Highway Development Programme, which is the largest active infrastructure program, aiming to upgrade 54,000 kilometres of highways. On the rail network front, the government aims to build 25,000 kilometres of new lines by 2020, yet only about 2500 kilometres have been added from 2006 to 2014. Recent announcements by government showing a quantum rise in transportation infrastructure do provide us hope of the sector getting improved in the coming years.

Your company continues to leverage its strong pre-qualification for bagging and executing the upcoming projects


The Mining industry in India is a major economic activity which contributes significantly to the economy of India.

In recent years, mining industry has been facing issues of large scale displacements, resistance of locals, human rights issues like indentured labour and environmental issues like pollution, corruption, deforestation and dangers to animal habitats.

Your company has been treading strongly in the mining sector. We have a sophisticated and prestigious project in this sector.

• Malanjkhand Underground Project: The project aims to develop an underground mine and is planned to extract 5 Million TPA of copper ore from Malanjkhand Copper Project, Balaghat, Madhya Pradesh. The project involves sinking 4 vertical shafts to depths ranging from 665 m to 695 m, for lifting ore, carrying men & material and for ventilation. A total of 2 Declines (an incline passage) at 1 in 7 gradient, reaching up to a depth of 660 m have to be constructed.

The excavation of declines, drives, crosscuts, passes, raises etc. would go to a total length of 55.40 km. The project would use sophisticated mining machinery - two Friction Winders of capacity 4500KW & one Service Winder of capacity 2300 KW for hoisting of 100 workers as a part of the job.

India has vast minerals potential with mining leases granted for longer durations of 20 to 30 years. The demand for various metals and minerals will grow substantially over the next 15 years. The power and cement industries also aid growth in the metals and mining sector.

With the Indian economy expected to grow by approximately 7% in the years to come, sectors such as infrastructure and automobiles will receive a renewed thrust, which would further generate demand for power and steel in the country. This is expected to provide a major thrust to the demand of minerals like coal and iron ore.

Transmission line Tower (TLT) Factory

The TLT factory at Butibori, Nagpur manufactures and supplies Transmission Towers. It is a vital support for the EPC Transmission Line business. Of late, the factory caters to other EPC players in the transmission sector as a quality vendor and significant new business has been obtained.



Bura Irrigation and Settlement Scheme Rehabilitation Project: The objective of the project is to augment water from Tana river through Gravity process by covering 5500 hectare irrigable land.


Lindi Drinking Water Supply Project: The project would supply Drinking water to Lindi and near by Villages


Lake Victoria Water Supply and Sanitation Program, Phase-II: The project is envisaged to supply Drinking water to Nyagatare, Nyanza and Kayonza Towns.


The companys customers are now concerned about the efficient and effective use of the assets constructed under their EPC orders. As a policy therefore, government customers are now combining capex (EPC) orders with O&M (Operations & Maintenance). The O&M could typically be for five years. This is being felt in all the companys business sectors of Water, Irrigation, Power, Transportation and Mining.

IVRCL has noticed this trend and decided to enter into value added services, including O&M. An O&M Division has been set up in FY14-15. In the initial phase, the O&M business will focus on the existing EPC lines of business, and leverage the companys pre-qualification and technical manpower talent.

India has a severe shortage of trained technical talent. This service division will provide gainful employment and meaningful work to thousands of youngsters across the country. The companys training capabilities will be deployed to bring raw recruits quickly to the desired competence level.

The set of services relate to the Water sector.

The Offerings are:

• Comprehensive O & M

• Retrofit & Revamp

• Analysis Reports

• Plant Performance Audits

Asset performance & efficiency in a cost-effective manner is instrumental in running a business profitably over time. Every aspect of Assets undertaken by IVRCL Technical Services and Solutions is handled by highly trained and seasoned industry professionals.

Advantages of IVRCL Technical Services & Solutions are

• Reduced operational cost and improved systems and processes

• Access to a large team of experienced engineers and technicians spread across the country

• Increased Assets Turnover

• Increased Asset life

• One point of contact


In view of the current environment and the CDR package, IVRCL has enhanced its focus on risk management. Project execution overview has been significantly strengthened by adding more experienced and senior persons to the PMC (Project Monitoring Cell). Reviews are conducted regularly to understand the cost profile of the original bid and the effect of time on costs.

Risks are also faced in the new jobs which have to be bid for and the market is very price competitive. IVRCL has put in place much stronger cost review mechanisms for jobs to be bid and has increased the benchmark rate at which the job will be bid for.

The concerns for the company are the delay in sorting out the cases pending for extra claims, delays with some of the jobs relating to the land acquisition and environmental clearances, and very slow progress on arbitration. The concern is also that customers who delay from their side have no decision making powers to pass on the compensation for this.


IVRCL is maintaining an effective system of internal control for facilitating accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the company and ensuring compliance with all laws and regulations.

The companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations, which provide, among other things, reasonable assurance of authorization, recording and reporting of the transactions of its operations in all material respects and of providing protection against significant misuse or loss of all the assets of the company.

The internal control system is managed through continuous internal audit by outside professionals, duly supported by our in-house internal audit team, which is empowered to examine the adequacy and compliance with the policies, plans and statutory requirements. The internal audit team also conducts regular audits across the companys operations in all key business areas as per the pre-drawn audit plan.

All significant audit observations and follow up actions are reported to the Audit Committee along with Internal Audit reports and the management responses/replies thereon. The minutes of the Audit Committee are reviewed by the Board for its suggestions / recommendations to further improve the internal control system. The Audit Committee periodically reviews audit plans, observations and recommendations of the Internal Auditors with reference to significant risk areas and adequacy of internal controls.


The infrastructure sector with its low growth in the last few years has been in a conservation mode and has focused more on its survival and not so much on growth. The opportunities that will arise relate to fresh investments being proposed all over the country. All of these will ask for new technologies for example with new methods of sewage treatment, urban transportation and long distance rail transport. It will also require new methods of project execution and techniques such as the use of pre-fabricated elements.

Much greater concern being there for the environment, opportunities would arise in its remediation such as treating lakes, dredging rivers and restoring water bodies. In urban solid waste there will be many opportunities to collect and segregate waste, process waste and generate energy from waste. With the rising pressure of population in cities and the shortage of public space, software and IT hardware with sensors will be used to improve public asset use such as in parking management, delivery of citizen services, traffic management and so on.

The threats that would prevail relate more to the individual company and its ability to handle the municipality and the Government customer expectations. To start with the financial and bidding capability norms could get tougher .The large opportunities and active GOI interest will bring in global players coming to India for the first time and they would probably be allowed to use their foreign pre-qualifications. The customers will also expect timely execution and will not be considerate for time extensions. In general, they are also reducing the planned execution time for various tenders.

The Government proposes to use new techniques like Swiss Challenge which allows a company with new capabilities and technologies to offer a solution and this will enable new parties and competitors to enter the fray and set a benchmark .Last but not the least, the market is expected to continue being price competitive. Design for frugal material usage, strong cost skills for procurement and good contracting skills are required to ensure the promised profits.


IVRCL has a proud record of people retention and its brand equity with the customers has arisen because of this. Almost 50% of the employees, out of a total headcount of 2831, are Engineers. The current focus of the company is to improve the productivity at each project site and in each central function, to that effect; the manpower deployment has been carried out based on competency rating programmes, transfers, re-skilling and re-training. The more frequent and dynamic review is carried out to see the competence deployed in a given situation and when the human resource becomes surplus in a given project. As a result of this, the company has retained and kept the faith of good number of long serving employees who are the vital connection to the customers.


IVRCL got into SDR from CDR approval in the Financial Year 2013-14 and a comprehensive two-step plan has been put in place to achieve a turnaround. The first step related to attending to the immediate ongoing jobs and necessary restructuring, cost cutting, focused project completion necessary for this. The PMC (Project Monitoring cell) has being strengthened to attend to this. The senior management team is involved in regularly meeting stakeholders such as bankers, customers and contractors to ensure adequate coordination from the highest level. Fresh blood has been infused in the top management. Cash flow management, project execution and completion has been accorded the highest priority.

The second part of the strategy has been to look at growth areas which could be pursued in the current environment itself. These relate to the business activity lines which are complimentary to the existing business lines but are new and technology oriented. The company will participate in such businesses provided they are significantly more margin driven than the current businesses and wants to have first advantage in such emerging market areas. These will be asset light.

With this two pronged approach, for which one part is with the current crop of stable modest margins and high turnover business coupled with second part which is an asset like technology incentive and higher margin oriented. IVRCL hopes to see a bright future for it-self.

Financial Review

The following table sets forth the income statement for the financial year ended March 31, 2016 and March 31, 2015. The components of expenses have been expressed as a percentage of total income for the period indicated.

(Rs. in million)

March 31, 2016 March 31, 2015
Net Income from operations 23,616.78 31,174.17
Other Income 201.46 435.12
Total Income 23,818.24 31,609.29
Construction expenses 24,317.16 26,674.54
Construction expenses as a percentage to total Income 102.09 84.39
Employee Benefit expenses 1,512.50 1,891.70
Employee Benefit expenses as a percentage to total Income 6.35 5.98
Other Expenses 1,763.74 2,900.71
Other Expenses as a percentage to total Income 7.40 9.18
EBITDA (3,775.16) 142.34
EBITDA - Percentage to total Income (15.85) 0.45
Finance cost 6,648.15 6,529.24
Finance cost as a percentage to total Income 27.91 20.66
Depreciation 801.97 903.59
Depreciation as a percentage to total Income 3.37 2.86
Profit /(Loss) Before tax (PBT) (11,225.27) (7,290.49)
PBT - percentage to total Income (47.13) (23.07)
Exceptional Items (252.97) (568.15)
Exceptional Items - percentage to total Income (1.06) (1.80)
Tax for earlier years -
Current Tax expenses/ reversal for current Year (674.44) -
Deferred Tax 306.52 -
Profit /(Loss) After tax (PAT) (10,604.39) (6,722.34)
PAT - percentage to total Income (44.52) (21.27)

The Order Book Position of the Company stood at Rs. 142,250 million as on March 31, 2016 Revenue from operations

The company could achieve turnover of Rs. 23,616.78 million for the financial year ended March 31, 2016, as compared to turnover of Rs. 31,174.17 million for the previous financial year ended March 31, 2015. The Company continued to face acute working capital problem which majorly contributed to lower turnover. The net loss for the year was Rs. 10,604.39 million, higher by 57.75% as compared to the previous financial year. The Company is in continuous engagement with its clients to realize the claims filed to the extent of around Rs. 45,000 million towards deviation in design, idle time charges etc. The claims would be accounted for as and when certainty as regards acceptance of claims are established.