DIRECTORS REPORT
Dear Shareholders,
Your Directors are pleased to present the Thirty-Seventh Annual Report together with the Audited statement of accounts for the year ended 31st March 2013.
CONSOLIDATED FINANCIAL RESULTS (Rs. in crores)Particulars | 31st March 2013 | 31st March 2012 |
Total Income | 3,079.69 | 2,550.78 |
Profit / (Loss) before Tax | 151.46 | 150.56 |
Provision for Taxation | (60.45) | (60.86) |
Excess / (short) provision for tax in respect of earlier years | 1.10 | (1.56) |
Profit/(Loss) after Tax (before Minority Interest) | 92.12 | 88.14 |
Minority Interest | 2.30 | 6.39 |
Profit / (Loss) for the year | 94.42 | 94.53 |
Balance brought forward from previous years | 392.44 | 298.02 |
Profits available for appropriation | 486.86 | 392.55 |
Less: Appropriation(i) Interim Dividend on Equity Shares (ii) Proposed Dividend on Preference Shares(iii) Tax on Dividend(iv) Interim distribution of profit to a Joint Venture Partner(v) Transferred to General Reserve (vi) Transferred to Debenture Redemption Reserve | 14.400.042.34-- 3.48 6.25 | --0.04--0.07 ---- |
Balance Carried Forward to Balance Sheet | 460.35 | 392.44 |
2. OPERATIONS Your Company has achieved total income of Rs.3,079.69 crores for the year compared to the previous years Rs.2,550.78 crores showing an increase of 20.74%.The EBIDTA for the year was Rs.348.98 crores compared to Rs.279.72 crores in the previous year resulting in increase by 24.76%. The Consolidated Profit before Tax for the year was Rs.151.46 crores compared to Rs.150.56 crores in the previous year resulting in a marginal increase of 0.60%.The Consolidated Profit after Tax for the year was Rs.92.12 crores compared to Rs.88.14 crores in the previous year resulting in increase by 4.51%. Our Order book as on 31st March 2013 was Rs.7,474.27 crores. During the year under review, the following major works were completed: i. Design and construction of container berth (625 m length) at Hazira for Hazira Port Private Limited.ii. Civil and erection works forming part of DSO phase of iron ore mining at Liberia for Arcelor Mittal Liberia Limited.iii. ICPR Process Platform for MHS Redevelopment Phase II- executed in Joint Venture with PT. Gunanusa Utama Fabricators, Indonesia for Oil & Natural Gas Corporation Ltd.iv. Design and Construction of Flyover at Nagpur for Maharashtra Airport Development Company Limited.During the year under review, the Company has secured the following major Contracts:
i. Design Package CC-15: Part Design and Construction of elevated viaduct from Ch. Km. 26.739 to Km.34.344 including entry exit line to depot, elevated ramp at Kalkaji & special spans and Construction of six elevated stations of Phase-III of Delhi MRTS of Delhi Metro Rail Corporation Ltd. of approx. value of Rs.371 crores.ii. Western Range DSO Iron Ore Project, Liberia, Package 166580 C106A (Bundled) Bulk Earthworks, Concrete and Civil Works at Port of Arcelor Mittal Liberia Limited of approx. value of Rs.282 crores.iii. Design Package CC-29: Part Design and Construction of elevated viaduct and Ramp length 2654.44 m and Construction of two elevated stations of Phase-III of Delhi MRTS of Delhi Metro Rail Corporation Ltd. of Rs.138 crores.iv. Port of Pipavav Construction work of New Port Infrastructure Contract II Civil Works of Gujarat Pipavav Port Ltd. of Rs.279 crores.v. Fuel Quay Repair Works at Buchanan Port, Liberia of Arcelor Mittal Liberia Limited of Rs.29 crores.vi. Construction of Elevated Road over Barapulla Nallah starting from Sarai Kale Khan to Aurobindo Marg near INA Market, New Delhi-Phase-II of PWD Ltd., Delhi of Rs.355 crores.vii. Earthworks and Civils Concentrator at western Liberia of Arcelor Mittal Liberia Limited of Rs.37 crores. During the year, the Company in Consortium with Technip KT India and TH Heavy Engineering BHD of Malaysia has bagged the HRD Process Platform Project of Oil & Natural Gas Corporation Ltd. The Companys share in the Consortium is approx. value Rs.1,179 crores. 3. CREDIT RATING
During the year, CRISIL has assigned us Long Term Rating to AA/Negative which reflects high safety and short term rating of A1+ which reflects highest safety. ICRA has assigned the long term rating of AA/Stable which signifies high credit quality and short term rating of A1+ which reflects highest credit quality. Dun & Bradstreet has assigned rating of 5A2 which signifies the overall status of the Company is good. 4. DIVIDEND
The Company has declared an interim dividend to the equity shareholders @ 20% (i.e. Rs.2/- per equity share of Rs.10/- each) on the paid up capital of Rs.71,97,02,380/- aggregating to total outflow of Rs.16.72 crores (including dividend distribution tax of Rs.2.33 crores). Your Directors recommend the said interim dividend as final dividend.
The Directors recommend, for approval of members, dividend of 0.01% on Convertible Preference Shares of the Company. The dividend, if declared, would involve an outflow of Rs.0.04 crores including dividend tax.
5. SUBSIDIARIES i) During the year, the Company has incorporated a subsidiary in Qatar in the name of Afcons Overseas Construction (LLC).ii) The Company is in the process of winding-up its step down subsidiary i.e. Afcons Madagascar Overseas SARL, set up in Madagascar.
iii) Your Directors at its meeting held on 26thJune 2013, has considered and approved in principle a Scheme of Amalgamation which provides for the merger of Afcons Infrastructure International Ltd. ("AIIL"), a company incorporated in Mauritius, a wholly owned subsidiary of the Company with itself. The said Scheme of Amalgamation is, inter alia, subject to the necessary approvals under the Laws of India and Mauritius.
iv) The Consolidated financial statement presented by the Company includes financial statement of the Subsidiaries prepared in accordance with the applicable accounting standards.
v) Pursuant to the provision of section 212(8) of the Companies Act,1956, the Ministry of Corporate Affairs vide its general circular no. 02/2011 dated 8th February,2011 and circular no.03/2011 dated 21st February,2011 has granted general exemption from attaching balance sheet, statement of profit and loss and other documents of the subsidiaries, subject to fulfilment of conditions stated in the circular. 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 brief financial details of the Companys subsidiaries for the financial year ended 31st March, 2013 is included in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by the members at the registered Office of the Company and that of the respective subsidiary companies on any working day during business hours. v) There has been no material change in the nature of business of the subsidiaries. 6. CORPORATE GOVERNANCE Your Company, being a value driven organization, believes in coherent and self-regulatory approach in the conduct of its business to achieve the highest levels of good corporate governance practices. Therefore the Company in the interest of the Stakeholders voluntarily complies with the requirements of Corporate Governance. A Report on Corporate Governance is attached separately to this Annual Report.7. MANAGEMENT DISCUSSION AND ANALYSIS REPORTThe Management Discussion and Analysis Report for the year under review, is presented in as a separate section which forms part of the Annual Report.
8. DIRECTORS Mr.J.J.Parakh, Mr.B.D.Narang and Mr.R.M.Premkumar, Directors of the Company, who retire by rotation at the ensuing Annual General Meeting, do not seek reappointment.
The Company thank them for their valuable contribution rendered during their tenure of service.
9. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors Responsibility Statement, it is hereby confirmed that:
(i) in preparation of the annual accounts, the applicable accounting standards have been followed along with a proper explanation relating to any material departures from the same; (ii) the Directors have selected such accounting policies, applied them consistently, and made judgement 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 31st March 2013 and of the profit or loss of the Company for the 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 irregularities and (iv) the Directors have prepared the annual accounts on a going concern basis.10. QUALITY, HEALTH, SAFETY & ENVIRONMENT
The Company firmly believes that the pursuit of excellence is one of the most critical component for a competitive success. With Quality, Health and Safety Environment being an essential part of the Companys policy, it strives to deliver services by maintaining the highest level of Quality, Health and Safe working environment.
The policy of the Company is to conduct its construction business through an established Quality Management System, which aims to achieve Customer Satisfaction and in the process improving Companys competencies and competitiveness. The Company is certified ISO 9001:2008 for Quality Management System, ISO:14001:2004 for Environment Management System and OHSAS:18001:2007 for Occupation, Health & Safety Management Systems. All the three systems are well established, documented, implemented and maintained.
The Company has a commendable record in terms of safety at our various projects sites and has received awards as well as appreciation letters from our clients, some of which are detailed below: SP Jammu Udhampur Highway Pvt. Ltd. has issued an appreciation letter to AFCONS Infrastructure Ltd (Udhampur - 2616) for successfully achieving "7 Million Man hours without any Lost Time Accident (LTA) Tecnimont ICB Pvt. Ltd has issued an appreciation certificate to OPAL Project for successfully achieving 5 Million safe Man Hours without any Lost Time Accident (LTA). Royal Haskoning has issued an Appreciation Letter to Aqaba, Jordan site for successfully achieving 4 million Man hours without any Lost Time Accident (LTA). Delhi Metro Rail Corporation Ltd (DMRC) has awarded an Appreciation Certificate for successfully achieving "2 Million Safe Man hours. Arcelor Mittal has issued an Appreciation Letter to Liberia, Buchanan Project for successfully achieving 1 Million Man hours without any Lost Time Accident (LTA). RVNL, Kolkata Project Implementation Unit has issued an Appreciation Letter to for achieving 1 Million Safe Man-Hours.These milestones are the reflection of the strict HSE standards followed at the worksite and commitment of AFCONS management towards safety.
11. AWARDS AND RECOGNITIONS
During the year, the Company received CNBC TV 18-Infrastructure Excellence Awards 2012 for the Main Awards Category-Highways & Flyovers for the 3-Level Grade Separator Project, at Ghazipur, New Delhi. Your Company has been listed among the Top Ten Most Admired Company for the Seventh year in succession by the Construction World.
12. AUDITORS M/s.Deloitte Haskins & Sells (Mumbai), Chartered Accountants (ICAI registration no.117366W), the present Joint Statutory Auditors of the Company do not seek reappointment at the conclusion of their present term at the ensuing Annual General Meeting.
A special notice under section 225(1) read with section 190 of the Companies Act, 1956 has been received from a member of the Company, seeking the appointment of M/s.Deloitte Haskins & Sells(Baroda), Chartered Accountants (ICAI registration no.117364W) in place of M/s.Deloitte Haskins & Sells(Mumbai), Chartered Accountants (ICAI registration no.117366W) as Joint Statutory Auditors of the Company along with the retiring Auditor M/s.J.C.Bhatt & Associates, Chartered Accountant (ICAI registration no.130923W).
M/s.Deloitte Haskins & Sells, (Baroda), Chartered Accountants (ICAI registration no.117364W) and M/s.J.C.Bhatt & Associates, Chartered Accountants (ICAI registration no.130923W) have confirmed that they are eligible for appointment in accordance with the provisions of Section 224(1B) of the Companies Act, 1956.
The Board of Directors therefore proposes the appointment of M/s.Deloitte Haskins & Sells (Baroda) Chartered Accountants, (ICAI registration no.117364W) and M/s.J.C.Bhatt & Associates, Chartered Accountants (ICAI registration no.130923W) as Joint Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting upto the conclusion of the next annual General Meeting on the terms and conditions to be mutually agreed upon between the Board of Directors of the Company and the Auditors.
13. AUDITORS REPORTS
The Auditors Report to the shareholders on the Accounts of the Company for the financial year ended 31st March 2013 does not contain any qualifications. 14. FIXED DEPOSIT Your Company did not invite or accept deposits from the public during the year under review. As on 31st March 2013, 12 deposits pertaining to previous years aggregating to Rs.1,57,000/- remained unclaimed.15. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of section 205C of the Companies Act 1956, fixed deposits accepted for the year 2005-2006 and interest thereon which remained unclaimed, inspite of reminders to the fixed deposit holders by the Company, have been transferred during the years, on their due dates, to the Investor Education and Protection Fund (IEPF) established by the Central Government.16. PARTICULARS OF EMPLOYEES
In terms of the provision of section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are given in the Annexure to the Directors Report. 17. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. This information pursuant to section 217(1)(e) of the companies Act,1956 read with the companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 is given below :A. CONSERVATION OF ENERGY The Company is continuing its effort to convert all sites from fossil power to grid power there by minimising the carbon foot print. This has been implemented to all sites as per feasibility. The total conversion of fossil power of 11 MVA by Grid power of 9 MVA considering all the sites the reduction GHG (Green House Gas) emission by 19000 tons.
B. RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORBTION:1. Automation of Samrat Jack-up through PLC and SCADA View at Dahej Site completed.2. Web publishing and online monitoring of Gen. Set 1000 KVA Electrical parameters and HSD consumption for TBM for the Chennai site successfully completed.3. Up gradation and standardization of CP 30 Batching plant software as well as PLC and panel View / SCADA is completed by 50%. Rest will be completed by this year.C. FUTURE ACTION PLAN:
1. Web publishing and online monitoring of Batching Plant productivity report.2. Upgradation and standardization of software as well as PLC, Panel View/ SCADA of M1 and CP 30 batching plant.3. Syncronisation of 250 KVA Caterpillar Generator Sets.D. FOREIGN EXCHANGE EARNING AND OUTGO. (Standalone) (Rs.in crores) Current year Previous year Earnings 521.40 879.71 Outgo 730.40 1089.83 18. ACKNOWLEDGEMENT
Your Directors would like to acknowledge with gratitude the continued support and co-operation received by the Company from its Clients, Bankers, Financial Institutions, Government authorities, Employees and its valued Investors.
FOR AND ON BEHALF OF
THE BOARD OF DIRECTORS
S.P.MISTRY CHAIRMANPlace: Mumbai
Date: 26th June, 2013