Mar 31, 2016
Dear Members,
The Directors are pleased to present the Twenty Third Annual Report on the Business and Operations of the Company together with the Audited Accounts for the year ended March 31, 2016.
FINANCIAL RESULTS
(Rs,Crores)
CONSOLIDATED |
STANDALONE |
|||
PARTICULARS |
Year ended March 31 |
Year ended March 31 |
||
2016 |
2015 |
2016 |
2015 |
|
INCOME Revenue from operations and other income |
8,227.56 |
9,510.75 |
2744.94 |
1,530.71 |
Profit Before Taxation |
(481.24) |
(2,218.06) |
(444.91) |
(717.63) |
Provision for Taxation |
(229.98) |
(117.05) |
0.09 |
(45.40) |
Net Profit after Taxation |
(251.26) |
(2,101.01) |
(445.00) |
(672.23) |
Less: Prior period items |
(20.31) |
42.52 |
- |
- |
Add: Share of Profit/(Loss) of Associates |
(0.34) |
(3.29) |
- |
- |
Less: Elimination of Unrealized Profit on Transactions with |
0.31 |
(9.76) |
- |
- |
Associate Companies Less: Share of Minority Interest |
34.00 |
(100.32) |
- |
- |
Net Profit/ (Loss) after Taxation, Minority Interest and |
(265.60) |
(2,036.74) |
(445.00) |
(672.23) |
Share of Profit/ (Loss) of Associates (Balance Carried to Balance Sheet) Surplus brought forward |
(3,938.44) |
(1,891.65) |
(161.37) |
519.11 |
Depreciation Transitional Adjustment |
- |
10.05 |
- |
8.25 |
Balance carried to Balance Sheet |
(4204.04) |
(3,938.44) |
(606.37) |
(161.37) |
FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY''S AFFAIRS
During the reporting period, in April 2015, your Company sold Udupi Power Corporation Limited (UPCL), Subsidiary of the Company. The consolidated results for the FY16 was without UPCL results whereas FY15 was with UPCL results. Therefore the results of FY16 are not comparable with the results of FY15.
On a Consolidated basis, your Company has reported Gross Revenues of Rs, 8,227.56 Crores for FY16 as against Rs, 9,510.75 Crores of Revenues registered in the previous year. Total Expenditure for the Year was Rs, 8,484.16 Crores as against Rs, 11,851.96 Crores in the previous year. The Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to Rs, 2,260.51 Crores while the same was Rs, 1,832.75 Crores for the previous year i.e. an increase of 45%. The Profit before tax stood at Rs, (481.24) Crores, an increase of 78.30% as compared to Rs, (2,218.06) Crores in the previous year.
The Net Profit/(Loss) after Tax after adjustment of Minority Interest and Share of Profits of Associates was Rs, (265.60) Crores as against Rs, (2,036.74) Crores for the previous year.
The comparison of consolidated results without including UPCL results shows the real performance of the Company. The comparison shows that the consolidated revenues for FY16 was Rs, 8,227 Crores against the FY15 revenue of Rs, 6,839 Crores, a growth of 20%.
Gross Interest and Finance charges on consolidated basis amounted to Rs, 2,513.95 Crores in comparison to Rs, 3,060.21 Crores of previous year, a decrease due to sale of Udupi Power Corporation Limited.
A detailed discussion on the result of the operations, financial condition and business review is included in the Management Discussion and Analysis Report placed at Annexure-1 to this Report.
There are no material changes and commitments, affecting the financial position of the Company which have occurred after March 31, 2016 till the date of this Report.
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
CDR AND LONG TERM WORKING CAPITAL LOAN
The implementation of the CDR Package was delayed due to delay in getting the approval from the Lenders. Due to delay, most of the Priority Loan sanctioned under CDR Package was used to address the interest dues of the Lenders thereby the revival of EPC Operations was partial. To bring the EPC operations to full scale, Company approached the Lenders with a proposal for Long Term Working Capital Loan (LTWCL) of Rs, 1,500 Crores for FY16 which was approved at the Joint Lenders Forum of the Company.
The LTWCL sanction and release by the Lenders again got delayed and the restoration of the EPC Operations could not be fully achieved. Company is in discussions with Lenders to work out a suitable scheme to address the debt servicing and completion of the under construction projects.
RESOLUTIONS PASSED THROUGH POSTAL BALLOT
During the reporting period, your Company had obtained members approval by passing of a special resolution through Postal Ballot for issue of Compulsorily Convertible Debentures to IDFC Bank Limited. The results of the Postal Ballot were announced on February 28, 2016. The details of the resolution passed through Postal Ballot forms part of the Report on Corporate Governance, annexed to this report.
AMENDMENT TO MEMORANDUM AND ARTICLES OF ASSOCIATION
During the period under review, the Articles of Association of the Company was amended to increase the number of Directors from 15 (fifteen) to 16 (sixteen), as approved by the members in the Annual General Meeting held on September 28, 2015.
INCREASE OF PAID-UP EQUITY SHARE CAPITAL
On September 30, 2015, your Company allotted 26,51,74,603 (Twenty Six Crores Fifty One Lakhs Seventy Four Thousand Six Hundred and Three only) Equity Shares of face value of Rs, 1/- each at Rs, 6.30 Per Equity Share (including Rs, 5.30 Per Equity Share towards Share Premium) to Lanco Group Limited, Promoter of the Company, under the CDR Package approved for the Company.
In view of the above corporate action, the Paid-up Capital of the Company increased from Rs, 248.42 Crores to Rs, 274.93 Crores.
COMPULSORILY CONVERTIBLE DEBENTURES (CCDs)
Pursuant to the approval of members received through Postal Ballot on February 28, 2016, your Company on March 14, 2016 allotted 32,14,53,885 (Thirty Two Crores Fourteen Lakhs Fifty Three Thousand Eight Hundred and Eighty Five only) Compulsorily Convertible Debentures (CCDs) to IDFC Bank Limited at a price of Rs,10/- per CCD having face value of Rs,10/- each, aggregating to Rs,321,45,38,850 (Rupees Three Hundred Twenty One Crores Forty Five Lakhs Thirty Eight Thousand Eight Hundred and Fifty only), on preferential basis against the conversion of outstanding loan and interest accrued thereon payable to IDFC Bank Limited. These CCDs carry a Coupon Rate of 10.50% per annum and have a term of 12 months from the date of allotment. The CCDs along with the interest thereon shall be converted into Equity Share Capital of the Company after the term of 12 months.
DIVIDEND
Your Directors have not recommended dividend for the year ended March 31, 2016.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as required under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations" ) is enclosed as Annexure-1 to this Report.
SUBSIDIARY COMPANIES
During the reporting period, Lanco Kanpur Power Limited, Lanco Energy Private Limited (Formerly known as Spica Thermal Power
Private Limited), Lanco Property Management Company Private Limited and Newton Solar Private Limited had become Subsidiaries of the Company.
Further Lanco Teesta Hydro Power Limited, Omega Solar Projects Private Limited and Lanco IT P.V. Investments B.V. had ceased to be Subsidiaries of the Company.
The Company''s Policy on Material Subsidiaries of the Company has been provided in the following link: http://www.lancogroup.com/ pdf/financials/Policies/Policy_on_Material_Subsidiaries.pdf
Report on the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies has been provided in Form AOC-1 which forms part of this Annual Report.
RISK MANAGEMENT POLICY
The Company had adopted the Standard Operating Procedures to standardize the Risk Management Process across all Business units in terms of process, formats, documentation, reporting, identification of elements of risk and monitoring Risk Mitigation plans, as part of the Risk Management Policy developed and implemented by the Company. Further details are provided in Management Discussion and Analysis Report placed at Annexure-1 to this Report.
INTERNAL FINANCIAL CONTROLS
Your Company had put in place adequate Internal Financial Controls commensurate with the size of the Company with reference to the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. G. Bhaskara Rao and Mr. G. Venkatesh Babu, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for appointment. Mr. Hiranmoy Biswas was appointed as Nominee Director of IDBI Bank Limited, with effect from October 27, 2015. Dr. Rajesh Kumar Yaduvanshi was appointed as Nominee Director of Punjab National Bank, with effect from January 01, 2016.
Mr. K. Raja Gopal was appointed as Non-Executive Director with effect from April 01, 2016.
Mr. Rengaraj Viswanathan and Dr. Jaskiran Arora were appointed as Additional Directors in the Category of Independent Director for
5 (five) years with effect from June 25, 2016.
Mr. L. Madhusudhan Rao was re-appointed as Executive Chairman for a period of 3 (three) years with effect from April 01, 2016. Mr. G. Bhaskara Rao was re-appointed as Executive Vice-Chairman for a period of 1 (one) year with effect from April 01, 2016. Mr. Raj Kumar Roy was appointed asWhole-time Director for a period of 3 (three) years with effect from April 01, 2016. Mr. G. Venkatesh Babu was re-appointed as Managing Director for a period of 3 (three) years with effect from June 24, 2016.
Mr. L. Madhusudhan Rao, Executive Chairman and Mr. G. Bhaskara Rao, Executive Vice-Chairman refunded the excess remuneration of ''20.95 Lakhs and ''27.92 Lakhs respectively, in line with the approvals received from the Ministry of Corporate Affairs (MCA) for FY 2014-15. The Company is awaiting the approval from the MCA for the appointment and payment of remuneration to Mr. S.C. Manocha for the period from August 14, 2015 to March 15, 2016.
The Independent Directors have given a declaration to the Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding meeting the criteria of independence prescribed under Section 149(6) of the Companies Act, 2013.
Mr. Yashpal Gupta, Mr. S. C. Manocha and Smt. L. Ramalakshmamma resigned as Directors of the Company with effect from October 01, 2015, March 15, 2016 and March 23, 2016 respectively. Your Directors place on record their appreciations for the valuable contribution by Mr. Yashpal Gupta, Mr. S. C. Manocha and Smt. L. Ramalakshmamma during their tenure as Directors.
We report with grief the sad demise of Mr. Dariyai Lal Rawal, Independent Director who passed away on January 28, 2016. The Board of Directors places on record its appreciation towards the significant contribution and valuable services rendered by Late Mr. Dariyai Lal Rawal during his tenure as Independent Director.
Mr. G. Venkatesh Babu, Managing Director, Mr. T. Adi Babu, Chief Financial Officer and Mr. A. Veerendra Kumar, Company Secretary represent the Key Managerial Personnel (KMP) of your Company.
During the FY16, 9 (nine) Board Meetings were held. These meetings were held on April 04, 2015, May 29, 2015, July 29, 2015, August 13, 2015, September 28, 2015, November 22, 2015, December 30, 2015, February 11, 2016 and March 15, 2016. The maximum interval between any two meetings did not exceed 120 days.
The Nomination and Remuneration Committee had devised the criteria and the process for performance evaluation of the Non Independent Directors, the Board as a whole and its Committees. In terms of Section 178(2) of the Companies Act, 2013, the Committee carried out evaluation of every Director''s performance on various parameters as set-out in the performance evaluation policy of the Company and found that all Directors have fully met the expectations.
A separate meeting of Independent Directors was held on February 11, 2016 without the presence of non-Independent Directors and members of the management.
The details of Familiarization Programme for Independent Directors of the Company is disclosed on the Company''s website at http:// www.lancogroup.com/pdf/financials/Policies/Familiarization_ Programme_for_Independent_Directors.pdf
COMPANY''S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Committee had recommended to the Board a Policy relating to the Appointment and Remuneration of Directors, Key Managerial Personnel and other Employees. The Nomination and Remuneration Policy forms part of this Report as
Annexure-2. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
The Board has laid down separate Code of Conduct for Directors and Senior Management Personnel of the Company and the same is posted on the Company''s Website. All Directors and Senior
Management Personnel have affirmed compliance with the Code of Conduct. The Managing Director has also confirmed and certified the same. The certification forms part of the Report on Corporate Governance.
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014, is as below:
Conservation of Energy and Technology Absorption
The following are the measures and technologies being implemented by the Company:
(i) Selection of equipment that consume minimum energy and adoption of integrated energy management system to measure, monitor and take corrective action for minimizing auxiliary power consumption.
(ii) Selection and adoption of technologies for SNCR/SCR and FGD to control NOx and SOx emission parameters meeting the new Environmental standards as per MOEF guidelines.
(iii) Ash utilization in earth filling.
(iv) Increased use of bricks and cement made from power plant ash.
(v) Best project management practices for optimally utilizing available resources to help reduce project execution time.
(vi) Improved fire safety by adopting simple methods of increased gravel fill in oil collection pits in transformer yards and cables supported on isolated structures in coal handling plants.
(vii) Adoption of zero liquid discharge schemes to prevent water pollution.
(viii) Electro chlorination instead of gas chlorination to avoid hazards while handling chlorine containers.
(ix) Development of green buildings reducing the electricity consumption.
(x) Development of buildings with focus on design and architecture maximizing the use of natural light and natural air ventilation thus reducing the electricity consumption.
(xi) Development of Green belt and water harvesting contributing to environment protection.
Foreign Exchange Earnings and Outgo:
(Rs, Crores)
Particulars |
Year ended |
March 31, 2016 |
|
Foreign Exchange Earnings |
28.20 |
Foreign Exchange outgo (including Capital |
13.91 |
imports) |
DISCLOSURE ON COMPANY''S EMPLOYEES STOCK OPTION PLANS
The Employees Stock Option Plan - 2006 and the Employees Stock Option Plan-2010 were approved by members by passing Special Resolutions in the Extraordinary General Meeting held on June 07, 2006 and Annual General Meeting held on July 31, 2010, respectively.
There were no grants made under the Employees Stock Option Plans of the Company during the FY16.
The required information pursuant to SEBI ESOP Guidelines is enclosed as Annexure-3 to this Report.
PARTICULARS OF EMPLOYEES AND REMUNERATION
As required under Section 197 (12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended the details of the remuneration drawn by the employees in excess of the limits prescribed, forms part of this Report.
Pursuant to Section 136 of the Companies Act, 2013, the Annual Report is being sent to the members after excluding the aforesaid details. The same is available for inspection at the Registered Office of the Company during office hours and any member desirous of the said information may write to the Company Secretary at the Registered Office of the Company.
Disclosure of the information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, as amended forms part of this Report as Annexure-4.
RELATED PARTY TRANSACTIONS
All the Related Party Transactions entered by the Company during the reporting period were at arm''s length basis and in the ordinary course of business. Therefore the disclosure of particulars in Form No. AOC-2 is not applicable to the Company. Under Listing Regulations, the Material Related Party Transaction entered by the Company on behalf of its Subsidiary forms part of the Notice of Annual General Meeting (AGM).
In line with the requirements of the Companies Act, 2013 and Listing Regulations, the Company has formulated a ''Policy on Related Party Transactions'' and the same is uploaded on the Company''s website at http://www.lancogroup.com/pdf/CS/LITL_Policy_on_Related_ Party_Transactions.pdf
DEPOSITS
During the year under review, your Company has not accepted deposits from Public.
LOANS, GUARANTEES, SECURITIES AND INVESTMENTS
The granting of loans and giving of guarantee and providing of security by your Company is exempted in terms of Section 186(11)
(a) of the Companies Act, 2013, as the Company is providing infrastructural facilities specified in Schedule VI of the Companies Act, 2013. Pursuant to Section 186 of Companies Act, 2013 read with Schedule V and the Listing Regulations, disclosure on particulars relating to loans, advances, guarantees and investments are provided as part of the financial statements.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of the Companies Act, 2013 and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, is provided as Annexure-5 to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Committee comprises of Dr. Uddesh Kumar Kohli, Independent Director, Mr. R.M. Premkumar, Independent Director, Mr. G. Bhaskara Rao, Executive Vice-Chairman and Mr. G. Venkatesh Babu, Managing Director as its Members. Dr. Uddesh Kumar Kohli, Independent Director is the Chairperson of the CSR Committee.
Members can access the CSR Policy on the website of the Company at http://www.lancogroup.com/pdf/LITL_CSR_Policy.pdf
There are no net profits for the Company made during the previous three financial years. Hence, there is no requirement of spending specific funds towards CSR activities by the Company during the year under review.
Details of CSR activities by the group companies is included in Management Discussion and Analysis Report as Annexure - 1 to this report.
AUDITORS
The Members are requested to ratify the appointment of Brahmayya & Co., Chartered Accountants, (Firm Registration No. 000511S) as Auditors of the Company for the FY 17.
COST AUDITORS
DZR & Co., Cost and Management Accountants have been appointed as the Cost Auditors for the year ending March 31, 2015. The Cost Audit Report for the year ended March 31, 2015 was filed on October 21, 2015.
DZR & Co., have been appointed as Cost Auditors of the Company for the FY17, based on the recommendation of Audit Committee.
SECRETARIAL AUDIT REPORT
M/s. dvmgopal & associates, Company Secretaries, were appointed as Secretarial Auditors to conduct Secretarial Audit of records and documents of the Company for the FY16. The Secretarial Audit Report is given as Annexure-6 to this Report.
CORPORATE GOVERNANCE
In compliance with the conditions of Corporate Governance, pursuant Listing Regulations, the Report on Corporate Governance with the Certificate from a Practicing Company Secretary certifying compliance in this regard forms part of this Report as Annexure-7.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
With a view to implement the highest ethical standards in the course of business, the Company has formed and adopted a whistle blower policy which provides a platform for reporting concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. Directors, employees, vendors or any person having dealings with the Company may report noncompliance, to the Chairperson of Audit Committee, who reviews the report. Confidentiality is maintained of such reporting and it is ensured that the whistle blowers are not subjected to any discrimination.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AGAINST WOMEN AT WORK PLACE OF THE COMPANY
Pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company had adopted the "Policy on Prevention of Sexual Harassment against Women at workplace" inter alia to seek to protect women from sexual harassment at their place of work. There were no complaints relating to sexual harassment during the reporting period.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Section 134(5) of the Companies Act, 2013, your Directors hereby confirm that:
(a). In the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards have been followed and that no material departures are made from the same;
(b). The Company have selected such accounting policies and applied them consistently and 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 at the end of the FY16 and of the profit and loss of the Company for that period;
(c). The Company have taken proper and sufficient care 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 Company had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
(f). The Company have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
INFORMATION ON AUDITOR QUALIFICATIONS
The information and explanations of your Directors on the qualifications by the Auditor on the Consolidated Financial Statements for the FY16 are as follows:
- Qualification on Capitalization of Borrowing cost by step down subsidiary
The step down subsidiary, which is implementing gas based power project expansion, Phase III could not complete commissioning activities of phase III until August 11, 2015 for III A and January 09, 2016 for III B, due to non-availability of required resources and fuel which are beyond the control of Lanco Kondapalli Power Limited (LKPL). During the pendency of these activities, the plants could not be tested for capability and suitability of its intended use of the plant. The assets are therefore eligible to capitalize their borrowing costs till commissioning. The lenders of the project approved the above interest during construction as a part of the project cost. The Company capitalized the interest during these periods, which was Qualified by the Auditor. LKPL has re-approached Ministry of Corporate Affairs (MCA) to seek clarification on the applicability of provisions of AS 16 to continue the capitalization of borrowing costs. The management is of the view that the interest capitalization is as per AS 16.
However the step down subsidiary completed the commissioning activities of phase III and also declared Commercial Operation Date (COD) on August 11, 2015 for III A and January 09, 2016 for III B. From the COD interest is being charged to P&L account.
- Qualification on Unaudited financials of Subsidiaries in Consolidation
As per local GAAP applicable to subsidiaries of Lanco Resources International Pte. Limited (LRIPL), fair valuation of assets is mandatory from the external valuer at the end of every year. During the year ended March 31, 2016 valuation of those foreign subsidiaries assets was under progress and due to that auditors of LRIPL subsidiaries could not complete their audit. As a consequential impact, LRIPL and other subsidiary i.e. Lanco International Pte. Limited (LIPL), could not complete their audit. Hence the financial statements prepared by the management have been considered in consolidation. The Auditor Qualified the Consolidation of financials with the Management financials instead of Audited financials of LRIPL.
The qualification by the Auditor is not about deviation from the Accounting Standards but on the consolidation of the unaudited financials of some of the foreign subsidiary companies as on the reporting date.
The management is not expecting any material differences between Management financials and Audited financials.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors take this opportunity to thank all the stakeholders including Members, Banks, Financial Institutions, Customers, Suppliers, Service Providers and Regulatory and Governmental Authorities for their consistent co-operation. Your Directors also wish to place on record the sincere appreciation of the hard work, dedication and commitment of Employees at all levels. Your Directors look forward to your continued support in the future as well.
For and on behalf of the Board
L. Madhusudhan Rao G. Venkatesh Babu
Executive Chairman Managing Director
DIN - 00074790 DIN - 00075079
Place: Gurgaon
Date: August 12, 2016
Mar 31, 2015
Dear Members,
The Directors are pleased to present the Twenty Second Annual Report on
the Business and Operations of the Company together with the Audited
Accounts for the year ended March 31, 2015.
FINANCIAL RESULTS
(Rs. Crores)
CONSOLIDATED STANDALONE
PARTICULARS Year ended March 31 Year ended March 31
2015 2014 2015 2014
INCOME
Revenue from operations
and other income 9,510.75 10,597.85 1,530.71 2,339.37
Profit Before Taxation (2,218.06) (2,441.42) (717.63) (959.99)
Provision for Taxation (117.05) (129.44) (45.40) -
Net Profit after Taxation 2,101.01) (2,311.98) (672.23) (959.99)
Less: Prior period items 42.52 43.50 - -
Add: Share of Profit/(Loss)
of Associates (3.29) (33.89) - -
Less: Elimination of
Unrealized Profit on
Transactions with (9.76) 0.15 - -
Associate Companies
Less: Share of Minority
Interest (100.32) (115.64) - -
Net Profit/ (Loss) after
Taxation, Minority
Interest and (2,036.74) (2,273.88) (672.23) (959.99)
Share of Profit/ (Loss)
of Associates (Balance
Carried to Balance Sheet)
Surplus brought forward (1,891.65) 382.23 519.11 1,479.10
Depreciation
Transitional Adjustment 10.05 - 8.25 -
Balance carried to
Balance Sheet (3,938.44) (1,891.65) (161.37) 519.11
FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY'S AFFAIRS
On a Consolidated basis, your Company has reported Gross Revenues of
Rs.9,510.75 Crores as against Rs.10,597.85 Crores of Revenues
registered in the previous year. Total Expenditure for the Year was
Rs.11,851.96 Crores as against Rs.12,860.01 Crores in the previous
year. The Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA) amounted to Rs.1,832.75 Crores while the same was Rs.1,671.87
Crores for the previous year i.e. a increase of 9.62%. The Profit
before taxation stood at Rs.(2,218.06) Crores, a increase of 9.15 % as
compared to Rs.(2,441.42) Crores in the previous year.
The Net Profit/(Loss) after Tax after adjustment of Minority Interest
and Share of Profits of Associates was Rs.(2,036.74) Crores as against
Rs.(2,273.88) Crores for the previous year.
Gross Interest and Finance charges on consolidated basis amounted to
Rs.3,060.21 Crores in comparison to Rs.2,762.12 Crores due to increase
in Loans and Working Capital requirements for Project Execution.
During the year, your Company sold 70 (2*35) MW Lanco Budhil Hydro
Power Private Limited situated in Chamba District of Himachal Pradesh.
During the year, your Company along with other shareholders of Udupi
Power Corporation Limited (UPCL) has entered into a definitive Share
Purchase Agreement (SPA) on August 13, 2014 with Adani Power Limited
(APL) for sale of 100% stake in UPCL. The receipt of full share sale
consideration and transfer of shares to APL was completed on April 20,
2015.
After the reporting period, an associate company i.e. Lanco Vidarbha
Thermal Power Limited and a fellow subsidiary i.e. Lanco Babandh Power
Limited became Subsidiary of the Company's step down subsidiary i.e.
Lanco Thermal Power Limited.
A detailed discussion on the results of the operations, financial
condition and business review is included in the Management Discussion
and Analysis section placed at Annexure-1 to this Report.
Except the above, there are no material changes and commitments,
affecting the financial position of the Company which have occurred after
March 31, 2015 till the date of this Report.
There are no significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and Company's
operations in future.
CDR PACKAGE:
Corporate Debt Restructuring Empowered Group (CDR EG) in its meeting
held on December 11, 2013 has approved the CDR package submitted by the
Company and issued letter of approval on December 20, 2013. As on March
31, 2015, CDR related documents have been executed and creation of
security has been completed.
The approval of CDR Package is only for the Company and not for any of
its subsidiaries and associates.
Terms of CDR
- Re-schedule of Term loan and short term loans having moratorium
period of 2 years from the cut of date of April 1, 2013 and are
repayable in 30 quarterly instalments starting from June 30, 2015.
- Portion of CDR Working Capital Loans on the cut of date i.e. April
01, 2013, has been carved out as Working Capital Term Loan - I (WCTL-
I). LC/ BC/ BG devolved from cut of date till December 31, 2013 has
been carved out as Working Capital Term Loan - II (WCTL-II).
- Funded Interest on Term Loans, WCTL - I and WCTL - II are funded for
a period of 2 years from cut of date i.e. April 1, 2013 to March 31,
2015 and on regular Cash Credit limit for an initial period of 6 months
from cut of date to September 30, 2013 is converted into Funded
Interest Term Loan (FITL). Interest on FITL is to be paid on monthly
basis from April 30, 2013.
- Rs. 2,500 Crores Priority Loan sanctioned with a moratorium period of
2 years at an interest rate of 12.5% and is repayable in 18 quarterly
instalments starting from June 30, 2015. As a part of the sanctioned
Priority Loan, the Company has received an amount of Rs.1,678.17 Crores
as on March 31, 2015.
- Rate of interest on restructured facilities being 11% p.a. to be
increased in a stepped up manner up to 16% p.a. starting from financial
year 2016-17.
- Waiver of penal charges from the cut-of date to the date of
implementation of the package.
- The Company shall raise funds by sale of assets / divestment of
shares in SPV's / securitisation / QIP / IPO etc., to repay the above
restructured facilities under CDR scheme.
In relation to the amount outstanding as at March 31, 2015 against the
loans restructured by the CDR lenders, a total amount of Rs.2,894.41
Crores would qualify for the conversion into 464.59 Crores shares at
the sole discretion and on demand of the CDR lenders at a Price of Rs.
6.23 per equity share.
In terms of CDR scheme, the promoters brought into the company as
unsecured loan a total amount to Rs.167.06 Crores and the same would
qualify for the conversion of shares at the sole discretion of the
promoters.
The CDR gives your Company critical support to tide over the present
difficult business environment. The decision of the banks to consider and
approve CDR also reflects the faith these institutions have in the long
term business model of the Company.
DIVIDEND
Your Directors have not recommended dividend for the year ended March
31, 2015.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Clause 49 of
the Listing Agreement is enclosed as Annexure-1 to this Report.
SUBSIDIARY COMPANIES
During the reporting period, Lanco Hoskote Highway Limited and Lanco
Devihalli Highways Limited had become subsidiaries of the Company.
Further, Lanco Budhil Hydro Power Private Limited, SolarFi SP 07,
SolarFi SP 06, Lanco Solar International Limited, Lanco Solar
International GMBH, Lanco US PV Investments B.V., Lanco Solar Holdings
LLC (USA), Lanco Virgin Islands- 1 LLC and Lanco SP PV 1 Investments
B.V. had ceased to be Subsidiaries of the Company.
Policy for determining Material Subsidiaries of the Company has been
provided in the following link:
http://www.lancogroup.com/pdf/Policy_on_Material_Subsidiaries.pdf
Report on the performance and financial position of each of the
Subsidiaries, Associates and Joint Venture Companies has been provided
in Form AOC-1.
INCREASE OF PAID-UP SHARE CAPITAL
On December 29, 2014, 5,45,74,639 (Five Crore Forty Five Lakhs Seventy
Four Thousand Six Hundred and Thirty Nine only) Equity Shares of Face
Value of Rs.1/- each and on June 23, 2015, 2,17,72,493 (Two Crore
Seventeen Lakhs Seventy Two Thousand Four Hundred and Ninety Three
only) Equity Shares of Face Value of Rs.1/- each were allotted at an
Issue Price of Rs.6.23 Per Equity Share (including Rs.5.23 Per Equity
Share towards Share Premium) to ICICI Bank Limited under the CDR
Package approved for the Company.
In view of the above corporate actions, the Paid-up Capital of the
Company increased from Rs.240.78 Crores to Rs.248.42 Crores as on June
30, 2015.
HEALTH, SAFETY AND ENVIRONMENT
Your Company has taken an integrated approach towards Health, Safety &
Environment (HSE), based on various National & International standards.
This helps us to achieve our goal of going beyond the legal compliance.
We have implemented British 5 star Safety Programs. This has not only
enhanced our reputation as a group but also set ourselves new standards
in HSE. The entire leadership steadfastly supported this initiative and
various sites personnel were instrumental in giving a perfect shape to
this important initiative. We aim to be a global leader in
environmental standards and practices.
All our Operational Power Plants, EPC Division, Lanco Hills and Lanco
Solar are OHSAS-18001 & ISO-14001 certified.
Further details are provided in Management Discussion and Analysis
section placed at Annexure-1 to this Report.
RISK MANAGEMENT POLICY
The Company had adopted the Standard Operating Procedures to
standardise the Risk Management Process across all Business units in
terms of process, formats, documentation, reporting, identification of
elements of risk and monitoring Risk Mitigation plans, as part of the
Risk Management Policy developed and implemented by the Company.
Further details are provided in Management Discussion and Analysis
section placed at Annexure-1 to this Report.
INTERNAL FINANCIAL CONTROLS
Your Company had put in place adequate Internal Financial Controls
commensurate with the size of the Company with reference to the
Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. L. Madhusudhan Rao and Mr. S. C. Manocha retire by rotation at the
ensuing Annual General Meeting and being eligible offer themselves for
appointment.
Mr. R. M. Premkumar and Mr. Prakash P. Mallya were appointed as
Additional Directors in the Category of Independent Directors with
effect from October 15, 2014.
Mr. Yashpal Gupta was appointed as Nominee Director of IDBI Bank
Limited on behalf of the CDR Lenders, with effect from January 01, 2015.
Mr. D. L. Rawal and Mr. Gurbir Singh Sandhu were appointed as
Additional Directors in the Category of Independent Directors and Smt.
L. Ramalakshmamma was appointed as Additional Director in the category
of Woman Director, with effect from March 28, 2015.
Mr. Vijoy Kumar and Mr. Pawan Chopra were appointed as Additional
Directors in the Category of Independent Directors with effect from June
23, 2015.
The Independent Directors have given a declaration to the Company under
Section 149(7) of the Companies Act, 2013 and Clause 49 of the Listing
Agreement regarding meeting the criteria of independence prescribed
under Section 149(6) of the Companies Act, 2013.
Mr. Prakash P. Mallya and Mr. P. Abraham resigned as Directors of the
Company with effect from March 28, 2015 and April 01, 2015 respectively.
Your Directors place on record their appreciations for the valuable
contribution by Mr. Prakash P. Mallya and Mr. P. Abraham during their
tenure as Directors.
During the reporting period, Mr. G. Venkatesh Babu, Managing Director,
Mr. T. Adi Babu, Chief Financial Offer and Mr. A. Veerendra Kumar,
Company Secretary were designated/appointed as Key Managerial Personnel
(KMP) of your Company.
Your Company is awaiting approval from the Central Government regarding
the payment of remuneration to Mr. L. Madhusudhan Rao, Executive
Chairman and Mr. G. Bhaskara Rao, Executive Vice- Chairman, Promoter
Directors of the Company from April 01, 2014 till March 31, 2016.
During the financial year 2014-15, 5 (five) Board Meetings were held.
These meetings were held on May 23, 2014, August 14, 2014, September
26, 2014, November 14, 2014 and February 12, 2015.
The Nomination and Remuneration Committee had devised the criteria and
the process for performance evaluation of the non- Independent
Directors, the Board as a whole and its Committees.
A separate meeting of Independent Directors was held on February 12,
2015 without the presence of non-Independent Directors and members of
the management.
The details of Familiarization Programme for Independent Directors of
the Company is disclosed on the Company's website. Members can access
the details of Familiarization Programme on the website of the Company
at
http://www.lancogroup.com/pdf/Familiarization_Programme_for_
Independent_Directors.pdf
COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Nomination and Remuneration Committee had recommended to the Board
a Policy relating to the Appointment and Remuneration of Directors, Key
Managerial Personnel and other Employees. The Nomination and
Remuneration Policy forms part of this Report as Annexure-2.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
The Board has laid down separate Code of Conduct for Directors and
Senior Management Personnel of the Company and the same is posted on
the Company's Website. All Directors and Senior Management Personnel
have affirmed compliance with the Code of Conduct. The Managing Director
has also confirmed and certified the same. The certification forms part
of the Report on Corporate Governance.
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information pursuant to Section 134(3)(m) of the Companies Act, 2013,
read with Rule 8 of The Companies (Accounts) Rules, 2014, is as below:
Conservation of Energy and Technology Absorption
New technologies were planned and implemented with a two pronged
strategy of achieving operational excellence and environment & energy
conservation.
Some of the measures and technologies worth highlighting were:
(i) Selection of equipment that consume minimum energy and adoption of
integrated energy management system to measure, monitor and take
corrective action for minimizing auxiliary power consumption.
(ii) Adoption of suitable conveyor technologies for cross country coal
conveying using pipe conveyor, combination of tripper conveyors &
reclaim conveyor in stockyard and adoption of coal shed in the
stockyard to avoid coal dust pollution.
(iii) Ash utilization in earth filling.
(iv) Adoption of sub-sea marine pipeline instead of overhead pipelines/
jetty structures, velocity caps for intake facility to avoid impact on
marine environment.
(v) Adoption of best practices in project management with the help of
reputed consultants for efficient project delivery.
(vi) Improved fire safety by adopting simple methods of increased gravel
fill in oil collection pits in transformer yards and cables supported on
isolated structures in coal handling plants.
(vii) Adoption of zero liquid discharge schemes to prevent water
pollution.
(viii) Electro chlorination instead of gas chlorination to avoid
hazards while handling chlorine containers.
Foreign Exchange Earnings and Outgo:
(Rs. in Crores)
Particulars Year ended
March 31, 2015
Foreign Exchange Earnings 18.28
Foreign Exchange outgo 15.73
DISCLOSURE ON COMPANY'S EMPLOYEES STOCK OPTION PLANS
The Employees Stock Option Plan - 2006 and the Employees Stock Option
PlanÂ2010 were approved by members by passing Special Resolutions in
the Extraordinary General Meeting held on June 07, 2006 and Annual
General Meeting held on July 31, 2010, respectively.
There were no grants made under the Employees Stock Option Plans of the
Company during the Financial Year 2014-15.
The required information pursuant to SEBI ESOP Guidelines is enclosed
as Annexure-3 to this Report.
PARTICULARS OF EMPLOYEES AND REMUNERATION
As required under Section 197 (12) of the Companies Act, 2013, read
with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the details of the remuneration
drawn by the employees in excess of the limits prescribed, forms part
of this report.
Pursuant to Section 136 of the Companies Act, 2013, the Annual Report
is being sent to the members after excluding the aforesaid details. The
same is available for inspection at the Registered Office of the Company
during office hours and any member desirous of the said information may
write to the Company Secretary at the Registered Office of the Company.
Disclosure of the information pursuant to Section 197(12) of the
Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, forms part of
this Report as Annexure-4.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act, 2013 and the
Listing Agreement, the Company has formulated a 'Policy on Related
Party Transactions' and the same is uploaded on the Company's website
at http://www.lancogroup.com/pdf/Policy_on_Related_
Party_Transactions.pdf
Details of Related Party Transactions as per Form AOC-2 is Nil for the
Company during the reporting period.
DEPOSITS
During the year under review, your Company has not accepted deposits
from Public.
LOANS, GUARANTEES, SECURITIES AND INVESTMENTS
The granting of loans and giving of guarantee and providing of security
by your Company is exempted in terms of Section 186(11) (a) of the
Companies Act, 2013, as the Company is providing infrastructural
facilities specified in Schedule VI of the Companies Act, 2013. The
details of Investments forms part of the Schedules to the Financial
Statements.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of the Companies Act, 2013 and Rule 12 of The
Companies (Management and Administration) Rules, 2014, the extract of
Annual Return in Form MGT-9, provided as Annexure-5 to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the reporting year, the Board had constituted the CSR Committee
with Dr. Uddesh Kumar Kohli, Independent Director, Mr. R.M. Premkumar,
Independent Director, Mr. G. Bhaskara Rao, Executive Vice-Chairman and
Mr. G. Venkatesh Babu Managing Director as its Members. Dr. Uddesh
Kumar Kohli, Independent Director is the Chairman of the CSR Committee.
Members can access the CSR Policy on the website of the Company at
http://www.lancogroup.com/pdf/LITL_CSR_Policy.pdf.
There are no average net profits for the Company made during the
previous three financial years. Hence, there is no requirement of
spending specific funds towards CSR activities by the Company during the
year under review.
Details of CSR activities by the group companies is included in
Management Discussion and Analysis section as Annexure - 1 to this
report.
AUDITORS
The Members are requested to ratify the appointment of Brahmayya & Co.,
Chartered Accountants, (Firm Registration No. 000511S) as Auditors of
the Company for the Financial Year 2015-16 as per item No.4 of the
Notice.
COST AUDITORS
DZR & Co., Cost and Management Accountants have been appointed as the
Cost Auditors for the year ending March 31, 2014. The Cost Audit Report
for the year ended March 31, 2014 was due for fling on September 30,
2014 and was fled on September 24, 2014.
DZR & Co., have been appointed as Cost Auditors of the Company for the
Financial Year 2014-15 and Financial Year 2015-16, based on the
recommendation of Audit Committee.
SECRETARIAL AUDIT REPORT
M/s. dvmgopal & associates, Company Secretaries, were appointed as
Secretarial Auditors to conduct Secretarial Audit of records and
documents of the Company for the Financial Year 2014-15. The
Secretarial Audit Report is given as Annexure-6 to this Report.
CORPORATE GOVERNANCE
In compliance with the conditions of Corporate Governance, pursuant to
Clause 49 of the Listing Agreements with Stock Exchanges, the Report on
Corporate Governance with the Certificate from a Practicing Company
Secretary certifying compliance in this regard forms part of this
Report as Annexure-7.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
With a view to implement the highest ethical standards in the course of
business, the Company has formed and adopted a whistle blower policy
which provides a platform for reporting concerns about unethical
behaviour, actual or suspected fraud or violation of the Company's Code
of Conduct. Directors, employees, vendors or any person having dealings
with the Company may report non- compliance to the Chairperson of Audit
Committee, who reviews the report. Confidentiality is maintained of such
reporting and it is ensured that the whistle blowers are not subjected
to any discrimination.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AGAINST WOMEN AT WORKPLACE OF
THE COMPANY
Pursuant to The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013, your Company had adopted the
"Policy on Prevention of Sexual Harassment against Women at workplace"
inter alia to seek to protect women from sexual harassment at their
place of work.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134(5) of the Companies Act, 2013, your
Directors hereby confirm that:
(a). In the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards have been followed and
that no material departures are made from the same;
(b). The Company have selected such accounting policies and applied
them consistently and 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 at the end of the financial year 2014-15 and of the profit
and loss of the Company for that period;
(c). The Company have taken proper and sufficient care 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 Company had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively and
(f). The Company have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
INFORMATION ON AUDITORS' QUALIFICATIONS:
The information and explanations of your Directors on the qualifications
by the Auditors on the Consolidated Financial Statements are as
follows:
Qualification on Capitalization of Borrowing cost by step down
subsidiary:
The step down subsidiary is implementing gas based power project
expansion which is yet to complete commissioning activities due to
non-availability of required resources and fuel which are beyond the
control of Lanco Kondapalli Power Limited (LKPL). The activities are
still not completed to test for capability and suitability of its
intended use of the plant. Therefore the asset is eligible to
capitalise its borrowing costs till the completion of required
commissioning activities. The lenders of the project approved the above
interest during construction as a part of the project cost. LKPL has re
approached Ministry of Corporate Affairs (MCA) to seek clarification on
the applicability of provisions of Accounting Standard 16 to continue
the capitalisation of borrowing costs. The management is of the view
that the interest capitalization is as per Accounting Standard 16.
Qualification on Unaudited financials of SPV's in Consolidation:
The qualification by the Auditor is not about deviation from the
Accounting Standards but on the consolidation of the un- audited
financials of some of the foreign subsidiary companies as on the
reporting date. During the year ended March 31, 2015, some of the
foreign subsidiaries could not complete the audit of their financial
statements, on or before the reporting date, hence the financial
statements prepared by the Management have been considered in
consolidation.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors take this opportunity to thank all the stakeholders
including Shareholders, Financial Institutions, Banks, Customers,
Suppliers, Service Providers and Regulatory and Governmental
Authorities for their consistent co-operation. Your Directors also wish
to place on record the sincere appreciation of the hard work,
dedication and commitment of Employees at all levels. We look forward
to your continued support in the future.
For and on behalf of the Board
L. Madhusudhan Rao G. Venkatesh Babu
Executive Chairman Managing Director
DIN - 00074790 DIN - 00075079
Place: Gurgaon
Date: July 29, 2015
Mar 31, 2014
Dear Members,
The Directors are pleased to present the Twenty First Annual Report on
the Business and Operations of the Company together with the Audited
Accounts for the year ended March 31, 2014.
FINANCIAL RESULTS
(Rs. Crores)
CONSOLIDATED STANDALONE
PARTICULARS Year ended March 31 Year ended March 31
2014 2013 2014 2013
INCOME
Revenue from operations and
other income 10,597.85 13,887.66 2,339.37 4,822.75
Profit Before Taxation (2,441.42) (893.92) (959.99) 10.23
Provision for Taxation (129.44) 179.62 - (3.11)
Net Profit after Taxation (2,311.98 (1,073.54) (959.99) 13.34
Less: Prior period items 43.50 (12.62) - -
Add: Share of Profit/(Loss)
of Associates (33.89) (2.88) - -
Less: Elimination of
Unrealized Profit on
Transactions with 0.15 20.72 - -
- Associate Companies
Less: Share of Minority
Interest (115.64) (11.22) - -
Net Profit/ (Loss) after
Taxation, Minority
Interest and (2,273.88) (1,073.30) (959.99) 13.34
Share of Profit/ (Loss) of
Associates (Balance
Carried to Balance Sheet)
Surplus brought forward 382.23 1,455.54 1,479.10 1,465.76
Balance carried to
Balance Sheet (1,891.65) 382.23 519.11 1,479.10
OPERATIONS AND BUSINESS REVIEw
On a Consolidated basis, your Company has reported Gross Revenues of Rs.
10,597.85 Crores as against Rs. 13,887.66 Crores of Revenues registered
in the previous year. Total Expenditure for the Year was Rs. 12,860.01
Crores as against Rs. 14,781.58 Crores in the previous year. The
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
amounted to Rs. 1,671.87 Crores while the same was Rs. 2,653.33 Crores for
the previous year i.e. a decrease of 37%. The Profit before taxation
stood at Rs. (2,441.42) Crores, a decrease of 173.11 % as compared to Rs.
(893.92) Crores in the last year.
The Net Profit/(Loss) after Tax after adjustment of Minority Interest
and Share of Profits of Associates was Rs. (2,273.88) Crores as against Rs.
(1,073.30) Crores for the previous year.
Gross Interest and Finance charges on consolidated basis amounted to Rs.
2,762.12 Crores in comparison to Rs. 2,421.44 Crores due to increase in
loans and Working Capital Requirements for Project Execution.
During the year your company sold 10 MW wind based power plant situated
near Tirunalveli, Tamilnadu and recognised the Profit on sale of assets
of Rs. 8.99 Crores.
A detailed discussion on the results of the operations, financial
condition and business review is included in the Management Discussion
and Analysis section placed at Annexure-II to this Report.
CDR PACKAGE:
Corporate Debt Restructuring Empowered Group (CDR EG) in its meeting
held on December 11, 2013 has approved the CDR package submitted by the
Company and issued letter of approval on December 20, 2013. As on March
31, 2014 CDR related documents have been executed and creation of
security has been completed partly and the balance is in the process.
The proposal is only for the Company and not for any of its
subsidiaries and associates.
Terms of CDR
Re-schedule of Term loan and short term loans are having moratorium
period of 2 years from the cut of date of April 1, 2013 and are
repayable in 30 quarterly instalments starting from June 30, 2015.
Portion of CDR Working Capital Loans on the cut of date i.e. April
1, 2013, has been carved out as Working Capital Term Loan - I (WCTL-
I). LC/ BC/ BG devolved from cut of date till December 31, 2013 has
been carved out as Working Capital Term Loan - II (WCTL- II).
Funded Interest on Term Loans, WCTL - I and WCTL - II can be funded
for a period of 2 years from cut of date i.e. April 1, 2013 to March
31, 2015 and on regular Cash Credit limit for an initial period of 6
months from cut of date i.e. April 1, 2013 to
September 30, 2013 is converted into Funded Interest Term Loan (FITL).
Interest on FITL to be paid on monthly basis from April 30, 2013.
Rs. 2,500 Crores Priority Loan sanctioned with a moratorium period of 2
years at an interest rate of 12.5% and is repayable in 18 quarterly
instalments starting from June 30, 2015.
Rate of interest on restructured facilities being 11% p.a. to be
increased in a stepped up manner up to 16% p.a. starting from financial
year 2016-17.
Waiver of penal charges from the cut-of date to the date of
implementation of the package.
The Company shall raise funds by sale of assets/divestment of shares
in SPV''s/securitisation/QIP/IPO etc. to repay the above restructured
facilities under CDR scheme.
In relation to the amount outstanding as at March 31, 2014 against the
loans restructured by the CDR lenders, a total amount of Rs. 2,224.89
Crores would qualify for the conversion into 354.50 Crores shares at
the sole discretion and on demand of the CDR lenders.
In terms of CDR Package, the promoters brought into the company as
unsecured loan a total amount of Rs. 152.00 Crores and the same would
qualify for the conversion into 24.40 Crores shares at the sole
discretion of the promoters.
The CDR gives your Company critical support to tide over the present
difcult business environment. The decision of the banks to consider and
approve CDR also refects the faith these institutions have in the long
term business model of the Company.
RESOLUTIONS PASSED THROUGH POSTAL BALLOT
During the reporting period, your Company had obtained shareholders
approval by passing of resolutions through Postal Ballot. The results
of the Postal Ballot were announced on April 17, 2014. The details of
the resolutions passed through Postal Ballot forms part of the Report
on Corporate Governance, annexed to this report.
AMEMDMENT TO MEMORANDUM AND ARTICLES OF ASSOCIATION
During the period under review, the Memorandum of Association of the
Company was amended to increase the Authorised Share Capital of the
Company from Rs. 500,00,00,000/- (Rupees Five Hundred Crores only) to Rs.
12,000,00,00,000/- (Rupees Twelve Thousand Crores only). This increase
was necessitated to provide option to the CDR Lenders for conversion of
loans into equity. The Articles of Association of the Company was also
amended to refect the increase of Authorised Capital and to provide
option for buy-back of securities of the Company.
DIRECTORS
Mr. G. Bhaskara Rao and Mr. L. Sridhar retire by rotation at the
ensuing Annual General Meeting and being eligible ofer themselves for
appointment. Dr. Pamidi Kotaiah retires by rotation at the ensuing
Annual General Meeting. Your Directors place on record their
appreciations of the valuable contribution by Dr. Pamidi Kotaiah during
his tenure as Director.
Mr. P. Abraham, Dr. Uddesh Kumar Kohli and Mr. R. Krishnamoorthy were
appointed as Independent Directors of the Company in terms of Section
149 of the Companies Act, 2013.
The Company had received approvals from the Ministry of Corporate
Afairs, Government of India, New Delhi, in respect of waiver from
recovery of excess remuneration paid to Mr. L. Madhusudhan Rao,
Executive Chairman and Mr. G. Bhaskara Rao, Executive Vice-Chairman, by
the Company for the financial year 2012-13 and for payment of managerial
remuneration to Mr. L. Madhusudhan Rao, Executive Chairman and Mr. G.
Bhaskara Rao, Executive Vice-Chairman for the financial year 2013-14, by
the Company.
Applications are being submitted to the Ministry of Corporate Afairs,
Government of India, New Delhi, seeking approval for payment of
managerial remuneration to Mr. L. Madhusudhan Rao, Executive Chairman,
Mr. G. Bhaskara Rao, Executive Vice-Chairman, Mr. G. Venkatesh Babu,
Managing Director and Mr. S.C. Manocha, Deputy Managing Director, for
the period starting from April 01, 2014 till the tenure of their
current appointment.
Dr. B. Vasanthan resigned as Director of the Company with efect from
May 23, 2014.
DIVIDEND
Your Directors have not recommended dividend for the year ended March
31, 2014.
SUBSIDIARY COMPANIES
During the year under review, Tasra Mining & Energy Company Private
Limited and Sirajganj Electric (Pvt) Limited had become subsidiaries of
the Company. Further, Approve Choice Investments Limited, Apricus
S.R.L, Bar Mount Trading (Pty.) Limited, Barrelake Investments (Pty.)
Limited, Belara Trading (Pty.) Limited, Caelamen (Pty.) Limited,
Dupondius (Pty.) Limited, Gamblegreat Trading (Pty.) Limited, Lexton
Trading (Pty.) Limited, Lanco Rocky Face Land Holdings LLC and Lanco
Tracy City Land Holdings LLC, had ceased to be Subsidiaries of the
Company. Also during the reporting period, Lanco Teesta Hydro Power
Limited, Subsidiary of the Company had changed its status from Private
Limited to Public Limited Company.
The Ministry of Corporate Afairs vide their General Circular No.
2/2011, dated February 08, 2011 had granted general exemption to the
Companies under Section 212(8) of the Companies Act, 1956 from the
requirement to attach detailed financial statements of each subsidiary.
The detailed financial statements and audit reports of each subsidiary
are available for inspection at the Registered office of the Company
during office hours and upon written request from shareholder(s), your
Company will arrange to send the financial statements of subsidiary
companies to the said shareholder(s).
In terms of the Ministry of Corporate Afairs, General Circular 08/2014
No.1/19/2013-CL-V, dated April 04, 2014, the Auditors Report and
Board''s Report in respect of financial years that commenced earlier
than April 01, 2014 shall be governed by the relevant provisions/
Schedules/rules of the Companies Act, 1956. The financial information of
the Subsidiaries of the Company was provided accordingly.
INVESTOR EDUCATION AND PROTECTION FUND
During the year under review, pursuant to Section 205C and other
applicable provisions of the Companies Act, 1956, an amount of Rs.
1,16,640/- (Rupees One Lakh Sixteen Thousand Six Hundred and Forty
only) was transferred to Investor Education and Protection Fund, with
respect to share application money remained unclaimed for a period of 7
years by the unsuccessful bidders of the Initial Public Ofering (IPO)
of the Company.
HEALTH, SAFETY AND ENVIRONMENT
Lanco has taken up a very good initiative in implementing a world-
class Health, Safety & Environment (HSE) Management System by
implementing British 5 Star Safety Programs. The entire leadership
supported this initiative and sites personnel were instrumental in
giving a perfect shape to this new initiative.
The group has started its process improvement programs in HSE and is in
process to bring out a compliance based tool to enhance the HSE
performance across the group.
Lanco''s HSE performance is realized with an excellent recognition of
our eforts in HSE and its sustenance. The world renowned "Sword of
Honour" by British Safety Council, UK was conferred to Lanco''s Tanjore
Site soon after getting awarded with 5-Star rating. Also, Lanco''s HSE
culture got further boost as Kondapalli & Anuppur sites won the
Prestigious "Prashansha Patra" conferred by National Safety Council of
India (NSCI). Other sites, which have participated in various HSE
awards and won during the year, make us proud. A brief description is
below:
Company Award
Lanco Infratech
NSCI Safety Awards, "Prashansha Patra" Limited-
EPC Division to Anuppur Site
Lanco Tanjore Power
"Sword of Honour" by British Safety
Company Limited Council
Environment protections and management award from Government of
Tamilnadu
CII 4 Star ESH Awards, Southern Region
Lanco Amarkantak l NSCI Safety Awards, "Prashansha Patra"
Power Limited
Udupi Power
CII 4 Star ESH Awards, Southern Region
Corporation Limited
Golden Peacock "Environment
Management Award"
Lanco Kondapalli
SCI Safety Awards, "Prashansha Patra"
Power Limited
FIXED DEPOSITS
Your Company has not accepted fixed deposits falling within the
provisions of Section 58A of the Companies Act, 1956 read with the
Companies (Acceptance of Deposits) Rules, 1975, during the year under
review.
AUDITORS
The Auditors of the Company, Brahmayya & Co., Chartered Accountants,
(Firm Registration No. 000511S) retire at the conclusion of the ensuing
Annual General Meeting of the Company and have confirmed their
willingness and eligibility for appointment for the four consecutive
years and have also confirmed that their appointment, if made, will be
within the limits prescribed under the Companies Act, 2013.
COST AUDITORS
DZR & Co., Cost and Management Accountants have been reappointed as the
Cost Auditors for the year ending March 31, 2014, as recommended by the
Audit Committee. The Cost Audit Report for the year ended March 31,
2013 was due for fling on September 30, 2013 and was fled on September
29, 2013.
DISCLOSURE OF PARTICULARS wITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN ExCHANGE EARNINGS AND OUTGO
Your Directors present the abridged accounts under Section 219 of the
Companies Act, 1956. Pursuant to the Companies (Central Government''s)
General Rules and Forms, 1956 read with Section 219(1)(b)(iv) of the
Companies Act, 1956, the Particulars of Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo as
required under 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 have not been provided. However, these
particulars are available for inspection at the Registered office of the
Company and upon written request from a shareholder, we will arrange to
mail these details.
DISCLOSURE ON COMPANY''S EMPLOYEES STOCK OPTION PLANS
The Employees Stock Option Plan - 2006 and the Employees Stock Option
PlanÂ2010 were approved by shareholders by passing Special Resolutions
in the Extraordinary General Meeting held on June 07, 2006 and Annual
General Meeting held on July 31, 2010, respectively.
The required information pursuant to Clause 12 of the Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999, as amended, is enclosed as
Annexure-I to this Report.
PARTICULARS OF EMPLOYEES
Your Directors present the abridged accounts under Section 219 of the
Companies Act, 1956. Pursuant to the Companies (Central Government''s)
General Rules and Forms, 1956 read with Section 219(1)(b)(iv) of the
Act, the Particulars of Employees as required by Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975 have not been provided. However, these particulars are
available for inspection at the Registered office of the Company and upon
written request from a shareholder, we will arrange to mail these
details.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Clause 49 of
the Listing Agreement is enclosed as Annexure-II to this Report.
CORPORATE GOVERNANCE
In compliance with the conditions of Corporate Governance, pursuant to
Clause 49 of the Listing Agreements with Stock Exchanges, the Report on
Corporate Governance with the Certifcate from a Practicing Company
Secretary certifying compliance in this regard forms part of this
Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Section 217(2AA) of the Companies Act, 1956, your
Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
are made from the same;
(ii) we have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of afairs of the
Company at the end of the financial year and of the Profit/loss of the
Company for the period;
(iii) we have taken proper and sufcient 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) we have prepared the annual accounts on a going concern basis.
INFORMATION ON AUDITORS'' QUALIFICATIONS:
The information and explanations of your Directors on the Qualifications
by the Auditors on Abridged and Consolidated Statements are as follows:
l Qualification on reorganization of Investments in Power SPV''s:
The Qualification by the Auditor is not about deviation from the
Accounting Standards but on the pending approval of the lenders for the
shares transfer to wholly owned subsidiaries. To meet the business
requirements of augmenting the equity funding from private equity
investors, strategic investors, the Power Holding Company structure was
created and shares were transferred to the wholly owned subsidiaries.
The share transfer does not alter the financial statements at the
consolidated level/standalone level. The Company''s investment as of
March 30, 2012 in various subsidiaries and associates was transferred
to wholly owned step down subsidiaries and to an associate of wholly
owned step down subsidiary aggregating to Rs. 6,815.51 Crores that
require lenders and customer approvals. Management has received many
such approvals aggregating to 88% in value, of the lenders consenting
to the restructuring, the management is confdent of receiving balance
approvals
from lenders and customer in near future and has taken the efect of
these transfers while preparing these consolidated financial results.
The delay in getting the balance lenders approval is only procedural
and the Management is confdent of getting the same.
The Company is hopeful of resolving the Qualification during current
financial year 2014-15.
The above Qualification is also a Qualification in Abridged Stand alone
Financial Statements.
Qualification on Revenue Recognition by a step down subsidiary:
The Qualification by the Auditor is not about deviation from the
Accounting Standards but on the interpretation of the realisability of
the revenue. There is a dispute between a step down subsidiary company
and a customer on the method of tarif determination apart from other
issues.
During the financial year, Appellate Tribunal for Electricity, India
ordered the HERC (state regulatory commission of the customer) to
re-determine the tarif as per HERC Tarif Regulations, 2008 and CERC
Regulations, 2009 where no Specific operational or financial norms have
been specified in the HERC Tarif Regulations. The power tarif
determination under HERC Regulations by and large follows the same
principles and methodology of tarif determination as per the CERC
Regulations.
Relied upon the legal opinions obtained and taking into consideration
the latest APTEL order, the management opines that there is no
significant uncertainty in recoverability of the recognised revenue for
the power supplies made as per the judicial orders. In addition to that
the Management is confdent of obtaining the tarif approvals in near
future and the rate to be determined by HERC will be the same rate as
adopted by the step down subsidiary company on provisional basis as per
the CERC norms.
Qualification on Capitalization of Borrowing cost by step down
subsidiary:
Due to non availability/non allocation of natural gas by Government of
India to the step down subsidiary Company''s Phase-III Project and
considering present economic conditions of Power Sector, the step down
subsidiary company has made an application to the Ministry of Corporate
Afairs (MCA) requesting to provide relaxation from Accounting Standard
- 16 and allow the Company to capitalize the borrowing costs till
commencing its commercial operations. The application is under
consideration of MCA.
The management is of the opinion that the Government of India is likely
to respond positively on the said request by considering the Specific
problems being faced by Gas based power plants in the country.
l Qualification on Unaudited financials of SPV''s consideration in
Consolidation:
The Qualification by the Auditor is not about deviation from the
Accounting Standards but on considering some of the foreign subsidiary
companies non-audited financials in the consolidation.
Out of those, some subsidiary companies were acquired by the company in
February, 2011. These companies were "under administrator" before
acquisition. On account of this, audited financial statements were not
available for 2008-09 and 2009-10. After acquisition, audit was
completed for 5 years and audit for the current year is under progress.
The remaining entities are either non-material/non-operational during
the year and audit for all these entities is under process.
Hence forth the management is expecting the audited financials of these
companies in time and consolidation can be done with the audited
accounts which will avoid the Qualification in future.
ACKNOwLEDGEMENT AND APPRECIATION
Your Directors take this opportunity to thank all the stakeholders
including Shareholders, Financial Institutions, Banks, Customers,
Suppliers, Service Providers and Regulatory and Governmental
Authorities for their consistent co-operation. Your Directors also wish
to place on record the sincere appreciation of the hard work,
dedication and commitment of Employees at all levels. We look forward
to your continued support in the future.
For and on behalf of the Board
L. Madhusudhan Rao G. Venkatesh Babu
Executive Chairman Managing Director
DIN - 00074790 DIN - 00075079
Place: Gurgaon
Date: August 14, 2014
Mar 31, 2013
Dear Members,
The Directors are pleased to present the Twentieth Annual Report on
the Business and Operations of the Company together with the Audited
Accounts for the year ended March 31, 2013.
FINANCIAL RESULTS
(Rs.Lakhs)
CONSOLIDATED STANDALONE
Year ended March 31 Year ended March 31
2013 2012 2013 2012
INCOME
Revenue from
operations and
other income 13,88,765.63 10,28,657.33 4,82,275.29 8,66,924.77
Profit Before
Taxation (89,391.92) 34,838.31 1,023.15 10,626.40
Provision for Taxation 17,961.65 22,462.24 (311.29) (940.84)
Net Profit
after Taxation (1,07,353.57) 12,376.07 1,334.44 11,567.24
Less: Prior
period items (1,262.05) 360.34
Add: Share of
Profit/(Loss)
of Associates (287.81) (6,021.81)
Less: Elimination
of Unrealized
Profit on
Transactions
with Associate 2,072.24 3,768.96
Companies
Less: Share of
Minority Interest (1,122.11) 13,428.43
Net Profit/(Loss)
after Taxation,
Minority Interest
and Share of Profit/ (1,07,329.46) (11,203.47) 1,334.44 11,567.24
(Loss) of Associates
(Balance Carried to
Balance Sheet)
Surplus brought
forward 1,45,551.56 1,61,417.24
Profit Available
for Appropriation 38,222.10 1,50,213.77 1,334.44 11,567.24
Transfer (from)/to
Capital Redemption
Reserve 1,677.32
Transfer to
General Reserve (0.42) 2,803.75
Premium paid on
buy back of shares
by a subsidiary 179.28
Proposed dividend
and Dividend
distribution tax 1.86 1.86
Balance Carried to
Balance Sheet 38,220.66 1,45,551.56 1,334.44 11,567.24
OPERATIONS AND BUSINESS REVIEW
On a Consolidated basis your Company has reported Gross Revenues of
Rs.13,88,765.63 Lakhs as against Rs.10,28,657.33 Lakhs of Revenues
registered in the previous year. Total Expenditure for the Year was
Rs.14,78,157.55 Lakhs as against Rs.10,05,462.19 Lakhs in the previous
year. The Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA) amounted to Rs.2,65,333.45 Lakhs while the same was Rs.1,84,859.78
Lakhs for the previous year i.e. a increase of 44 %. The Profit before
tax stood at Rs.(89,391.92) Lakhs, as compared to Rs.34,838.31 Lakhs in the
previous year.
The Net Profit/(Loss) after Tax and adjustment of Minority Interest and
Share of Profits of Associates was Rs.(1,07,329.46) Lakhs as against
Rs.(11,203.47) Lakhs for the previous year.
Gross Interest and Finance charges on consolidated basis amounted to
Rs.2,42,144.25 Lakhs in comparison to Rs.1,05,385.10 Lakhs due to increase
in loans and Working Capital Requirements for Project Execution.
A detailed discussion on the results of the operations, financial
condition and business review is included in the Management Discussion
and Analysis section placed at Annexure-III to this Report.
DIVIDEND
Your Directors have not recommended dividend for the year ended March
31, 2013.
SUBSIDIARY COMPANIES
During the year, the following Companies have become subsidiaries of
the Company:
Lanco Virgin Islands I, LLC, Bhola Electricity (Pvt.) Limited, Western
Australia Coal Terminal Pty. Ltd., Lanco Rambara Hydro Power Private
Limited and Portia Properties Private Limited.
During the year, the status/name of the following subsidiaries have
been changed:
Lanco Hydro Power Limited (earlier known as Lanco Hydro Power Private
Limited) and Lanco Thermal Power Limited (earlier known as Vamshi
Industrial Power Limited).
Note on particulars required as per Section 212 of the Companies Act,
1956:
The Ministry of Corporate Affairs vide their General Circular No.
2/2011 dated February 8, 2011 had granted general exemption to the
Companies under Section 212(8) from the requirement to attach detailed
financial statements of each subsidiary. The detailed financial
statements and audit reports of each subsidiary are available for
inspection at the Registered Office of the Company during office hours
and upon written request from shareholder(s), your Company will arrange
to send the financial statements of subsidiary companies to the said
shareholder(s).
HEALTH, SAFETY AND ENVIRONMENT
Your Company had been progressing well with respect to our programs
laid to enhance the culture of Health, Safety and Environment (HSE).
The entire leadership supports gives a comfortable platform to
encourage the team in getting the success in different fronts.
Corporate HSE has been driving various initiatives like HSE Audit
Management, Contractor HSE Management and ÂTrain the Trainer'' Programme
to propel awareness on HSE at sites.
The group has started its process improvement programs in HSE processes
with a sense of leveraging its IT platform. Many of our site personnel
participate in various national level HSE competitions and make the
group proud. A new initiative in sharing the best HSE practices among
sites, which are of significant value to enhance HSE performance and
give a new value and methods to improve the organizational value.
The HSE performance is realised with recognition of our efforts in HSE
and towards their sustenance. The true reflection of our HSE culture is
more evident at our Amarkantak site when it won the Prestigious
"Sarvashreshtha Suraksha Puraskar" conferred by National Safety Council
of India (NSCI). Several sites, which have participated in various HSE
awards and won during the year make us proud. A brief description is
below:
Company Award
Lanco Infratech - NSCI Safety Awards, Sarvashreshtha
Limited- EPC
Division Suraksha Puraskar (Golden Trophy)
(Amarkantak Site)
NSCI Safety Awards (Anupur Site)
Lanco Amarkantak - Green Tech Safety Awards, Gold
Power Limited Category
Golden Peacock Occupational Health
& Safety Award
Udupi Power - CII HSE Excellence Award in Southern
Corporation Limited Region _
Lanco Tanjore Power - 5 star Rating by National Safety
Company Limited Council, UK
Green Tech Safety Awards, Gold
Category
NSCI Safety Awards, Tamilnadu
Chapter
Golden Peacock Environmental
Excellence Award
Lanco Kondapalli - NSCI Safety Awards, Prashansa Patra
Power Limited - Green Tech Safety Awards, Gold
Category
Golden Peacock
Environmental Excellence Award
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. L. Madhusudhan Rao, Mr.
S.C. Manocha and Mr. G. Venkatesh Babu, Directors retire by rotation
and being eligible, offer themselves for re-appointment.
The Company had filed applications, subject to approval of
shareholders, with the Ministry of Corporate Affairs, New Delhi seeking
waiver for recovery of excess remuneration paid in financial year
2012-13 and approval for payment of remuneration from the financial
year 2013-14 onwards, to Mr. L Madhusudhan Rao, Executive Chairman and
Mr. G. Bhaskara Rao, Executive Vice- Chairman. Further, necessary
approvals from the shareholders of the Company are being obtained for
waiver of recovery of excess remuneration paid to all the managerial
personnel of the Company, under Schedule XIII of the Companies Act,
1956 and for payment of remuneration w.e.f. April 1, 2013. The
resolutions for approval of the shareholders for the above, forms part
of the Notice for the ensuing Annual General Meeting.
DEPOSITS
Your Company has not accepted deposits falling within the provisions of
Section 58A of the Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, 1975, during the year under review.
AUDITORS
The Auditors of the Company, M/s. Brahmayya & Co., Chartered
Accountants, (Firm Registration No. 000511S) retire at the conclusion
of the ensuing Annual General Meeting of the Company and have confirmed
their willingness and eligibility for appointment and have also
confirmed that their appointment, if made, will be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956.
COST AUDITORS
M/s.DZR & Co., Cost and Management Accountants have been reappointed as
the Cost Auditors for the year ending March 31, 2014, as recommended by
the Audit Committee. The Cost Audit Report for the year ended March 31,
2012 was due for filing on February 28, 2013 and was filed on February
9, 2013.
The Central Government has approved the appointment of M/s.DZR & Co.,
Cost and Management Accountants as Cost Auditors for conducting Cost
Audit for the Financial Year 2013-14. The Audit Committee has also
received a Certificate from the Cost Auditors certifying their
independence and arm''s length relationship with the Company.
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
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 enclosed as Annexure-I to this
Report.
DISCLOSURE ON COMPANY''S EMPLOYEES STOCK OPTION PLAN
The Employees Stock Option Plan - 2006 and the Employees Stock Option
Plan  2010 were approved by shareholders by passing Special
Resolutions in the Extraordinary General Meeting held on June 7, 2006
and Annual General Meeting held on July 31, 2010, respectively.
The required information pursuant to Clause 12 of the Securities
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999, as amended, is enclosed as
Annexure-II to this Report.
PARTICULARS OF EMPLOYEES
Pursuant to the Companies (Central Government''s) General Rules and
Forms, 1956 read with Section 219(1)(b)(iv) of the Act, the Particulars
of Employees as required by Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975 have not
been provided. However, these particulars are available for inspection
at the Registered Office of the Company and upon written request from a
shareholder, we will arrange to mail these details.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Clause 49 of
the Listing Agreement is enclosed as Annexure-III to this Report.
CORPORATE GOVERNANCE
In compliance with the conditions of Corporate Governance, pursuant to
Clause 49 of the Listing Agreements with Stock Exchanges, the Report on
Corporate Governance with the Certificate from a Practicing Company
Secretary certifying compliance in this regard forms part of this
Annual Report.
REGISTRAR AND SHARE TRANSFER AGENT
The Company has appointed M/s. Aarthi Consultants Private Limited,
Hyderabad as the Registrar and Share Transfer Agent of the Company in
place of M/s. Link Intime India Private Limited, with effect from May
10, 2013.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Section 217(2AA) of the Companies Act, 1956, your
Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
are made from the same;
(ii) we have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for the period;
(iii) we 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) we have prepared the annual accounts on a going concern basis.
INFORMATION ON AUDITORS'' QUALIFICATIONS:
The information and explanations of your Directors on the
qualifications by the Auditors on Standalone and Consolidated Financial
Statements are as follows:
- Qualification (a):
To meet the business requirements of augmenting the equity funding from
private equity investors, strategic investors, the Power Holding
Company structure was required. Accordingly the Power Holding Company
structure was put in place to have first balance sheet of Power Holding
Company as at March 31, 2012. The Company approached the lenders for
approval for the said restructuring. The Company could obtain approval
from all 5(five) lead lenders and also from 100 (one hundred), out of
133 (one hundred thirty three) participating lenders. The delay in
getting the balance lenders approval is only procedural and the
Management is confident of getting the same.
- Qualification (b):
One of the Subsidiary Company is recognizing revenue calculated as per
the CERC norms. There is a dispute between the Subsidiary Company and
HPGCL on the method of tariff determination apart from other issues.
The Auditor is of the view that the revenue is disputed. Based on the
legal opinions, the Management is confident that tariff fixation shall
happen as per CERC guidelines which support the revenue recognition by
the Subsidiary Company.
- Qualification (c):
Your Company was a profit making company to pay the Managerial
Remuneration to its Whole Time Directors as approved by the
shareholders. Though the remuneration being paid to the professionally
qualified Whole Time
Directors is at par with the industry, during the FY 2012-13, due to
lower profits on account of lower EPC business due to infrastructure
sector related problems, the remuneration paid has exceeded the limits
prescribed under Sections 198 & 309 of the Companies Act, 1956.
However, the Company approached Ministry of Corporate Affairs for
waiver of the recovery of excess remuneration paid under Schedule XIII
of the Companies Act, 1956 to Executive Chairman and Executive Vice
Chairman of the Company. Further, necessary approvals from the
shareholders of the Company are being obtained in the ensuing Annual
General Meeting for waiver of recovery of excess remuneration paid to
all the managerial personnel of the Company, under Schedule XIII of the
Companies Act, 1956. The Management is confident of getting the
waiver.
- Qualification (d):
The renewable energy industry particularly solar power is an upcoming
industry in India with aggressive growth prospects. The remuneration
to the Professional Whole Time Director of your Subsidiary has been
fixed by shareholders as per market standards exceeded the limits
prescribed under Section 198 and Section 309 of the Companies Act,
1956. As a onetime waiver, the Subsidiary Company approached Ministry
of Corporate Affairs for waiver of excess remuneration paid to the
Professional Whole Time Director. The Management is confident of
getting the waiver.
- Qualification (e):
Your Company acquired the Griffin Coal Mine which was under
Administrator at the time of acquisition. The Griffin Coal Mining Pty
Limited and Carpenter Mine Management Pty Limited were under
Administrator and the audit for FY 2008-2009 and FY 2009-2010 was not
completed at the time of acquisition. Due to non-availability of
Audited Financial statements for FY 2010-2011 and FY 2011-2012, the
Management Financial Statements were offered for consolidation. Your
Company could complete the audit of FY 2008-2009, FY 2009-2010, FY
2010-2011 and FY 2011-2012 subsequent to acquisition. Post completion
of the audit, there were no significant differences between the Audited
Financial Statements and Management Financial Statements for the years
ended March 31, 2011 and March 31, 2012. The audit of Griffin
financials for the year ended March 31, 2013 is under progress and
expected to be completed shortly.
Qualifications (a) and (c) are also qualifications in Standalone
Financial Statements.
ACKNOWLEDGEMENT AND APPRECIATION:
Your Directors take this opportunity to thank all the stakeholders
including Shareholders, Financial Institutions, Banks, Customers,
Suppliers, Service Providers and Regulatory and Governmental
Authorities for their consistent co-operation. Directors also wish to
place on record the sincere appreciation of the hard work, dedication
and commitment of Employees at all levels. We look forward to your
continued support in the future.
For and on behalf of the Board
L. Madhusudhan Rao G. Venkatesh Babu
Executive Chairman Managing Director
DIN - 00074790 DIN - 00075079
Place : Gurgaon
Date : July 22, 2013
Mar 31, 2012
The Directors have pleasure in presenting the Nineteenth Annual Report
On the Business and Operations of the Company together with the Audited
Accounts for the year ended March 31, 2012.
FINANCIAL RESULTS
Rs. Lakhs
CONSOLIDATED STANDALONE
Year Ended March 31 Year Ended March 31
2012 2011 2012 2011
INCOME
Revenue from
Operations
And other income 10,28,657.33 8,04,411.55 8,66,924.77 5,91,514.71
Profit Before
Taxation 34,838.31 1,04,058.43 10,626.40 42,031.59
Provision for
Taxation 22,462.24 38,495.90 (940.84) 14,200.00
Net Profit
After Taxation 12,376.07 65,562.53 11,567.24 27,831.59
Less: Prior
Period items 360.34 110.67
Add: Share of
Profit/(Loss) of
Associates (6,021.81) 261.16
Less: Elimination
Of Unrealised
Profit on
Transactions with
Associate Companies 3,768.96 4,073.48
Less: Share of
Minority Interest 13,428.43 17,032.65
Net Profit/ (Loss)
After Taxation,
Minority Interest
And Share of Profit/
(Loss) of Associates
(Balance
Carried to Balance
Sheet) (11,203.47) 44,606.89 11,567.24 27,831.59
Surplus brought
Forward 1,61,417.24 1,19,810.35 1,35,007.92 1,07,176.33
Profit Available
For Appropriation 1,50,213.77 1,64,417.24 1,46,575.16 1,35,007.92
Transfer (from)/to
Capital Redemption
Reserve 1,677.32 0.00
Transfer to
General Reserve 2,803.75 3,000.00
Premium paid on
Buy back of shares
By a subsidiary 179.28 0.00
Proposed Dividend
And Dividend
Distribution Tax 1.86 0.00
Balance Carried to
Balance Sheet 1,45,551.56 1,61,417.24 1,46,575.16 1,35,007.92
DIVIDEND
As a measure of prudence and with a view to conserve resources for
Funding the business plans of the Company, no dividend on the Equity
Shares for the year ended March 31, 2012 was recommended.
OPERATIONS review
On a Consolidated basis your Company has reported Gross Revenues of Rs.
10,28,657.33 Lakhs as against Rs. 8,04,411.55 Lakhs of Revenues
Registered in the Previous Year. Total Expenditure for the Year was Rs.
10,05,462.19 Lakhs as against Rs. 7,00,353.12 Lakhs in the Previous Year.
The Earnings Before Interest, Tax, Depreciation and Amortisation
(EBITDA) amounted to Rs. 1,84,859.78 Lakhs while the same was Rs.
2,15,198.62 Lakhs for the Previous Year i.e. A decrease of 14%. The
Profit Before Taxation stood at Rs. 34,838.31 Lakhs, a decrease of 66% as
Compared to Rs. 1,04,058.43 Lakhs in the Previous Year.
The Net Profit/(Loss) after Tax after adjustment of Minority Interest
And Share of Profits of Associates was Rs. (11,203.47) Lakhs as against Rs.
44,606.89 Lakhs for the Previous Year.
Gross Interest and Finance charges on consolidated basis amounted to Rs.
1,05,385.10 Lakhs in comparison to Rs. 75,766.78 Lakhs due to increase in
Loans and Working Capital Requirements for Project Execution.
A detailed discussion on the results of the operations and the
Financial condition is included in the Management Discussion and
Analysis section placed at Annexure-IV to this report.
Business review
A detailed business review is being given in the Management Discussion
And Analysis Section of the Annual Report placed at Annexure-IV to this
Report.
Subsidiary companies
The following Companies have become Subsidiaries of the Company:
Emerald Orchids Private Limited, Helene Power Private Limited, Lanco
Solar Power Projects Private Limited, Mahatamil Mining and Thermal
Energy Limited, Nix Properties Private Limited, Omega Solar Projects
Private Limited, Orion Solar Projects Private Limited, Pasiphae Power
Private Limited, Sabitha Solar Projects Private Limited, Lanco Anpara
Power Limited, Udupi Power Corporation Limited, Approve Choice
Investments (Proprietary) Limited, Bar Mount Trading (Proprietary)
Limited, Barrelake Investments (Proprietary) Limited, Belara Trading
(Proprietary) Limited, Caelamen (Proprietary) Limited, Dupondius
(Proprietary) Limited, Filten Trading (Proprietary) Limited,
Gamblegreat Trading (Proprietary) Limited, K2011103835 (South Africa)
(Proprietary) Limited, Lanco Infratech Nepal Private Limited, Lanco
Solar Canada Limited, Lanco Solar International gmbh, Lexton Trading
(Proprietary) Limited, Solar Fi SP 06, Solar Fi SP 07, Tiper Solaire
SAS.
The names of the following Subsidiaries have been changed: Diwakar
Solar Projects Limited (earlier Diwakar Solar Projects Private
Limited), Lanco Amarkantak Power Limited (earlier Lanco Power Limited),
Lanco Power Limited (earlier Lanco Power Private Limited), Lanco Solar
Power Projects Private Limited (Earlier Caliban Trading Private
Limited), Mahatamil Mining and Thermal Energy Limited (Earlier Lanco
Mining and Thermal Energy Limited), Lanco Thermal Power Limited
(Earlier Vamshi Industrial Power Limited), Lanco Hydro Power Limited,
(Earlier Lanco Hydro Power Private Limited), Lanco IT P.V. Investments
B.V. (Earlier Lanco Italy PV1 Investment B.V.), Lanco Solar Holdings
LLC (Earlier Lanco North Park Land Holding Two LLC), Lanco solar US EPC
Branch LLC (Earlier Lanco North Park Land One LLC), Lanco SP P.V.
Investments B.V. (Earlier Lanco Spain PV1 Investment B.V.), Lanco US
P.V. Investments B.V. (Earlier Lanco Italy PV2 Investment B.V.).
Note on particulars required as per section 212 of the companies act,
1956
In terms of the provisions of Section 212 of the Companies Act, 1956,
The Company was required to attach the Annual Reports of the Subsidiary
Companies and the related detailed information to the Balance Sheet of
The Holding Company. However, the Ministry of Corporate Affairs vide
Their General Circular No. 2/2011 dated February 8, 2011 granted
General exemption to the Companies under Section 212(8) from the
Requirement to attach detailed financial statements of each Subsidiary.
Accordingly, the Annual Report does not contain the financial
Statements of the subsidiaries. The detailed financial statements and
Audit reports of each Subsidiary are available for inspection at the
Registered Office of the Company and upon written request from a
Shareholder, your Company will arrange to send the financial statements
Of Subsidiary Companies to the said Shareholder.
Health, safety and environment
Our Group's journey in the perspective of Health, Safety & Environment
(HSE) has been encouraging and on right path. Corporate HSE has been
Driving various initiatives like HSE Audit Management, Contractor HSE
Management and 'Train the Trainer' Programme to propel awareness on HSE
At sites. Apart from this, initiatives were taken to assist our
Contractors to partner with us to enhance our HSE performance. Towards
These objectives separate workshops were conducted with Contractors and
Site Directors to give a feel of our expectations.
The group has started its process of innovation to HSE processes
Through share and learn programme. Site personnel share the best HSE
Processes among themselves, which are of significant value to enhance
HSE performance and give a new image to the organisation.
Our HSE performance is realised with recognition of our efforts in HSE
And towards their sustenance. The true reflection of our HSE culture is
More evident at our Tanjore and Kondapalli sites, which have
Participated in various HSE awards and won them to make us proud. A
Brief description is below:
Site Award
Lanco Tanjore Golden Peacock Award for Climate
Power Company Security during the year 2011;
Limited
Greentech Award for Environment
Protection during the year 2011.
Lanco Kondapalli EHS Excellence Award 2011 from CII
Power Limited on best HSE practices.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. L. Sridhar, Dr. Uddesh
Kumar Kohli and Dr. B. Vasanthan, Directors retire by rotation and
Being eligible, offer themselves for re-appointment.
We report with grief the demise of Mr. P. Narasimharamulu, Independent
Director who passed away on April 13, 2012.
The Board of Directors places on record its appreciation towards the
Significant contribution and valuable services rendered by Late Mr. P.
Narasimharamulu during his tenure as Independent Director.
The Board of Directors appointed Mr. R. Krishnamoorthy as an Additional
Director with effect from May 29, 2012. In terms of Section 260 of the
Companies Act, 1956 he shall hold office upto the date of the ensuing
Annual General Meeting of the Company. The Company has received
Requisite Notice in writing from a Member proposing his candidature for
The office of Director liable to retire by rotation.
Deposits
Your Company has not accepted deposits falling within the provisions of
Section 58A of the Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, 1975 during the year under review.
Auditors
S.R. Batliboi & Associates, Chartered Accountants and Brahmayya & Co.,
Chartered Accountants, Auditors of the Company, will retire at the
Conclusion of the Annual General Meeting. S.R. Batliboi & Associates,
Chartered Accountants conveyed their inability to be considered for
Re-appointment as Auditors.
Special Notice under Section 225 read with Section 190 of the Companies
Act, 1956 was received, proposing an Ordinary Resolution to appoint
Brahmayya & Co., Chartered Accountants, as Auditors from the conclusion
Of the Annual General Meeting to the conclusion of the next Annual
General Meeting, in place of the retiring Auditors.
Brahmayya & Co., Chartered Accountants, have conveyed their willingness
To accept appointment and confirmed their eligibility under Section 224
(1B) of the Companies Act, 1956.
Cost auditors
Pursuant to Order from the Ministry of Corporate Affairs, DZR & Co.,
Cost Accountants have been appointed as Cost Auditors for the year
2011-12. They are required to submit the report to the Central
Government within 180 days from the end of the accounting year.
Disclosure of particulars with respect to conservation of energy,
Technology absorption and foreign exchange earnings and outgo
Information pursuant to Section 217(1)(e) of the Companies Act, 1956,
Read with Companies (Disclosure of particulars in the Report of Board
Of Directors) Rules, 1988, is enclosed as Annexure-I.
Disclosure on Company's employees stock option plans
The Employees Stock Option Plan - 2006 and the Employees Stock Option
Plan à 2010 were approved by Shareholders by passing Special
Resolutions in the Extraordinary General Meeting held on June 7, 2006
And Annual General Meeting held on July 31, 2010, respectively.
The required information relating to the said schemes pursuant to
Clause 12 of the SEBI (ESOS/ESOP) Guidelines, 1999, are enclosed as
Annexure-II.
Particulars of employees
The information required to be published under the provisions of
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 as amended is enclosed as
Annexure-III.
Management discussion and analysis
The Management Discussion and Analysis as required under Clause
49(IV)(f) of the Listing Agreement is enclosed as Annexure-IV.
Corporate governance
The Report on Corporate Governance is given separately in this Annual
Report. The Certificate of Practising Company Secretary certiFYing
Compliance in this regard is annexed to the said Report.
Directors' responsibility statement
As required by Section 217(2AA) of the Companies Act, 1956, your
Directors hereby confirm that:
I) in the preparation of the annual accounts, the applicable accounting
Standards have been followed and that no material departures are made
From the same;
Ii) we have selected such accounting policies and applied them
Consistently and made judgements and estimates that are reasonable and
Prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for the period;
Iii) we 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) we have prepared the annual accounts on a going concern basis.
Information on auditors' observations
The observations of the Auditors in Paragraphs 4 & 5(v) in their Report
On Standalone Financial Statements read with Note no. 38 of the
Standalone Financial Statements provide fullest information and
Explanation and hence are not required to be reiterated.
Further, the observations of the Auditors in Paragraphs 4 and 5 in
Their Report on Consolidated Financial Statements read with Note Nos.
52 D (VI), 65, 42, 63, 64, 37, 54, 59, 38, 39 of the Consolidated
Financial Statements provide fullest information and explanation and
Hence are not required to be reiterated.
Acknowledgement and appreciation
Your Directors take this opportunity to thank all the stakeholders
Including Shareholders, Financial Institutions, Banks, Customers,
Suppliers and Regulatory and Governmental Authorities for their
Continued support to the Company. Directors also wish to place on
Record their sincere appreciation of the hard work, dedication and
Commitment of Employees at all levels.
For and on behalf of the Board
L. Madhusudhan rao G. Venkatesh Babu
Executive Chairman Managing Director
DIN-00074790 DIN-00075079
Place: Gurgaon,
Date : August 13, 2012.
Mar 31, 2011
The Members
The Directors have pleasure in presenting the Eighteenth Annual Report
on the business and operations of the Company together with the Audited
Accounts for the year ended March 31, 2011.
FINANCIAL RESULTS
Rs. Lakhs
CONSOLIDATED STANDALONE
Year Ended March 31 Year Ended March 31
2011 2010 2011 2010
INCOME
Sales, Operating and
Other Income 8,04,193.76 8,29,150.01 5,91,518.42 5,99,821.36
Profit Before
Taxation 1,03,947.78 1,00,768.49 42,031.59 72,010.30
Provision for
Taxation 38,495.90 36,428.40 14,200.00 23,372.19
Net Profit after
Taxation 65,451.88 64,340.09 27,831.59 48,638.11
Add: Share of
Profit/(Loss) of
Associates 261.13 (1,779.66) - -
Less: Elimination of
Unrealized Profit on
Transactions with
Associate 4,073.48 7,553.14 - -
Companies
Less: Share of Minority
Interest 17,032.65 9,152.40 - -
Net Profit after
Taxation, Minority
Interest and Share
of Profits of 44,606.88 45,854.89 - -
Associates
Surplus brought
forward 1,19,810.35 77,955.34 1,07,176.33 58,538.22
Profit Available
for Appropriation 1,64,417.23 1,23, 810.23 1,35,007.92 1,07,176.33
Transfer (from)/to
Debenture Redemption
Reserve - (242.27) - -
Transferred to
General Reserve 3,000.00 1,900.00 - -
Balance Carried to
Balance Sheet 1,61,417.23 1,22,152.50 1,35,007.92 1,07,176.33
DIVIDEND
As a measure of prudence and with a view to conserve resources for
funding the business plans of the Company, no dividend on the Equity
Shares for the year ended 31st March, 2011 was recommended.
OPERATIONS REVIEW
On a Consolidated basis your Company has reported Gross Revenues of Rs.
8,04,193.76 Lakhs as against Rs. 8,29,150.01 Lakhs of Revenues registered
in the Previous Year. Total Expenditure for the Year was Rs. 7,00,245.98
Lakhs as against Rs. 7,28,381.52 Lakhs in the Previous Year. The Earnings
Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted
to Rs. 2,14,866.05 Lakhs while the same was Rs.1,71,097.50 Lakhs for the
Previous Year i.e. an increase of 26%. The Profit Before Taxation stood
at Rs. 1,03,947.78 Lakhs, an increase of 3% as compared to Rs. 1,00,768.49
Lakhs in the Last Year.
The Net Profit after Tax after adjustment of Minority Interest and
Share of Profits of Associates was Rs. 44,606.88 Lakhs as against Rs.
45,854.89 Lakhs for the Previous Year.
Gross Interest and Finance charges on consolidated basis amounted to Rs.
75,544.86 Lakhs in comparison to Rs. 35,541.08 Lakhs due to increase in
loans and Working Capital Requirements for Project Execution.
A detailed discussion on the results of the operations and the
financial condition is included in the Management Discussion and
Analysis section placed at Annexure-II to this report.
BUSINESS REVIEW
A detailed business review is being given in the Management Discussion
and Analysis Section of the Annual Report placed at Annexure-II to this
report.
SUBSIDIARY COMPANIES
During the year, the following companies have become subsidiaries of
the Company:
Lanco Solar Energy Private Limited (Formerly known as Lanco Solar
Projects (India) Private Limited), Bhanu Solar Projects Private
Limited, Diwakar Solar Projects Private Limited, Khaya Solar Projects
Private Limited, Himavat Power Private Limited, Arneb Power Private
Limited, Regulus Power Private Limited (Formerly known as Nandigama
Power Private Limited), Lanco Kanpur Highways Limited, JH Patel Power
Project Private Limited, Lanco Solar Services Private Limited, Lanco
Solar Holding Netherland BV, Lanco Solar International Pte Limited,
Lanco Holding Netherland BV, Green Solar SRL, Lanco Enterprise Pte
Limited (China), Lanco Solar International Limited, Lanco Italy PV1
Investments BV, Lanco Italy PV2 Investments BV, Lanco Spain PV1
Investments BV, Lanco Solar International USA Inc., LE New York à LLC,
Lanco Resources International Pte Limited, Lanco Power International
Pte Limited, Lanco Resources Australia Pty Limited, The Griffin Coal
Mining Company Pty Limited, Carpenter Mine Management Pty Limited,
Lanco Energy Africa, Inversion Solar Andalucia 14 SLU, Lanco Rocky Face
Land Holdings LLC, Lanco Tracy City Land Holding LLC (USA), Lanco North
Park Land Holding One LLC (USA), Lanco North Park Land Holding Two LLC
(USA), Apricus S.R.L., Lanco Solar Project Development SLU.
During the year, the names of the following subsidiaries have been
changed:
Lanco Kondapalli Power Limited (Formerly Lanco Kondapalli Power Private
Limited), Lanco Tanjore Power Company Limited (Formerly Aban Power
Company Limited), National Energy Trading and Services Limited
(Formerly Lanco Power Trading Limited), Lanco Teesta Hydro Power
Private Limited (Formerly Lanco Energy Private Limited), Lanco Budhil
Hydro Power Private Limited (Formerly Lanco Green Power Private
Limited), Lanco Mandakini Hydro Energy Private Limited (Formerly Lanco
Hydro Energies Private Limited), Lanco Power Limited (Formerly Lanco
Amarkantak Power Limited), Lanco Vidarbha Thermal Power Limited
(Formerly Lanco Vidarbha Thermal Power Private Limited), Regulus Power
Private Limited (Formerly Nandigama Power Private Limited), Lanco
International Pte Limited (Formerly Lanco Enterprise Pte Limited).
NOTE ON PARTICULARS REQUIRED AS PER SECTION 212 OF THE COMPANIES ACT,
1956
In terms of the provisions of Section 212 of the Companies Act, 1956,
the Company was required to attach the Annual Reports of the Subsidiary
Companies and the related detailed information to the Balance Sheet of
the Holding Company. However, the Ministry of Corporate Affairs vide
their General Circular No. 2/2011 dated 8th February, 2011 granted
general exemption to the Companies under Section 212(8) from the
requirement to attach detailed financial statements of each subsidiary.
Accordingly, the Annual Report does not contain the financial
statements of the subsidiaries. The detailed financial statements and
audit reports of each subsidiary are available for inspection at the
registered office of the Company and upon written request from a
shareholder, your Company will arrange to send the financial statements
of subsidiary companies to the said shareholders.
HEALTH, SAFETY AND ENVIRONMENT
The Lanco group has adopted focused approach on the subject of Health,
Safety and Environment (HSE) by creating awareness and synergies among
the business units. This journey aims towards a phase of sustainable
growth, characterized by a holistic approach that is fully integrated
into business models.
Many of the plants and project sites are conferred with the coveted
Integrated Management System (ISO 9001, ISO 14001 & OHSAS 18001)
bringing sustained efforts and a better perspective towards achieving
HSE excellence. During the year, Lanco Tanjore Power Company Limited
(Formerly Aban Power Company Limited) received the Safety Appreciation
Award from National Safety Council (February, 2010) and the G3 - Good
Green Governance Award at Delhi for its best eco-friendly practices.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Dr. P. Kotaiah, Mr. P. Abraham
and Mr. G. Bhaskara Rao, Directors retire by rotation and being
eligible offer themselves for re-appointment.
Your Board of Directors re-appointed Mr. L. Madhusudhan Rao as
Executive Chairman and Mr. G. Bhaskara Rao as Executive -
Vice Chairman for a further period of 5 years with effect from 1st
April, 2011 and Mr. G. Venkatesh Babu as Managing Director of the
Company for a further period of 5 years with effect from 24th June,
2011. These re-appointments are subject to approval of the Members at
the ensuing Annual General Meeting.
During the Financial Year 2010-11, the Board of Directors appointed Mr.
S. C. Manocha as an Additional Director with effect from 14th August,
2010. He was also appointed as a Wholetime Director for a period of
five years from the same date, subject to the approval of the Members
at the ensuing Annual General Meeting. In terms of Section 260 of the
Companies Act, 1956 he shall hold office upto the date of the ensuing
Annual General Meeting of the Company. The Company has received
requisite Notice in writing from a Member proposing his candidature for
the office of Director liable to retire by rotation.
DEPOSITS
Your Company has not accepted deposits falling within the provisions of
Section 58A of the Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, 1975 during the year under review.
AUDITORS
S.R. Batliboi & Associates, Chartered Accountants and Brahmayya & Co.,
Chartered Accountants, Auditors of the Company, will retire at the
conclusion of the Annual General Meeting.
S.R. Batliboi & Associates, Chartered Accountants and Brahmayya & Co.,
Chartered Accountants, have conveyed their willingness to accept
appointment and confirmed their eligibility under Section 224 (1B) of
the Companies Act, 1956.
COST AUDITORS
Pursuant to Order from the Ministry of Corporate Affairs, DZR & Co.,
Cost Accountants have been appointed as Cost Auditors for the year
2011-12. They are required to submit the report to the Central
Government within 180 days from the end of the accounting year.
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
We present the abridged accounts under Section 219 of the Companies
Act, 1956 (the Act). Pursuant to the Companies (Central Government's)
General Rules and Forms, 1956 read with Section 219 of the Act, the
Particulars of Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo as required by Section 217(1)(e) of
the Act, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 have not been provided.
However, these particulars are available for inspection at the
Registered Office of the Company and upon written request from a
shareholder, we will arrange to mail these details.
DISCLOSURE ON COMPANY'S EMPLOYEES STOCK OPTION PLANS
The Employees Stock Option Plan à 2006 and the Employees Stock Option
Plan à 2010 were approved by shareholders by passing Special
Resolutions in the Extraordinary General Meeting held on 7th June, 2006
and Annual General Meeting held on 31st July, 2010, respectively.
The required information relating to the said schemes pursuant to
Clause 12 of the SEBI (ESOS/ESOP) Guidelines, 1999, are enclosed as
Annexure-I.
PARTICULARS OF EMPLOYEES
We present the abridged accounts under Section 219 of the Companies
Act, 1956 (the Act). Pursuant to the Companies (Central Government's)
General Rules and Forms, 1956 read with Section 219 of the Act, the
Particulars of Employees as required by Section 217(2A) of the Act,
read with the Companies (Particulars of Employees) Rules, 1975 have not
been provided. However, these particulars are available for inspection
at the Registered Office of the Company and upon written request from a
shareholder, we will arrange to mail these details.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Clause
49(IV)(f) of the Listing Agreement is enclosed as Annexure-II.
CORPORATE GOVERNANCE
The Report on Corporate Governance is given separately in this Annual
Report. The Certificate of Practising Company Secretary certifying
compliance in this regard is annexed to the said Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 217(2AA) of the Companies Act, 1956, your
Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
are made from the same;
(ii) we have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for the period;
(iii) we 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) we have prepared the annual accounts on a going concern basis.
INFORMATION ON AUDITORS' OBSERVATIONS
The Auditors' Report on the Standalone Financial Statements does not
contain any qualification. The observations of the Auditors in
Paragraphs 4 & 5 in their Report on Consolidated Financial Statements
read with Note nos. 4(xxiii) and 4 (xxvii) of Schedule 21 of the
consolidated financial statements provide fullest information and
explanation and hence are not required to be reiterated.
RECENT DEVELOPMENTS
Lanco through its Australian subsidiary, Lanco Resources Australia Pty
Limited, has acquired The Griffin Coal Mining Pty Ltd (GCM) and
Carpenter Mine Management Pty Ltd (CMM). Griffin Coal owns operational
thermal coal mines in Western Australia, having coal resources of 1.1
billion tonnes and producing over 4 million tonnes per annum (mtpa) of
coal which can be ramped up to over 15 mtpa in the near term.
A case was filed by Perdaman Chemical and Fertilizers Pty. Ltd
(ÃPerdamanÃ) claiming damages against The Griffin Coal Mining Company
Pty Ltd and the directors of the same, also including the Company and
Lanco Resources Australia Pty. Ltd, another subsidiary of the Company
in the Supreme Court of Western Australia alleging breach of a coal
supply agreement and also alleging breach of the Australian Consumer
Law.
In response, the Company has appointed Clifford Chance, a renowned
multinational law firm and one of the top queen counsel of Australia to
represent us in the Court. Time till 2nd September, 2011 has been
granted to us to file the counter reply.
Further in respect to the application moved by Perdaman in the Court
seeking an undertaking from The Griffin Coal Mining Company Pty Ltd
that it will not enter into any charge, pledge or security with regard
to its coal asset without giving Perdaman a notice of 10 days, the
hearings in that matter have been completed on 27th July, 2011 and the
decision thereon may be pronounced in course of time.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors take this opportunity to thank all the stakeholders
including Shareholders, Financial Institutions, Banks, Customers,
Suppliers and Regulatory and Governmental Authorities for their
continued support to the Company. Directors also wish to place on
record their sincere appreciation of Employees at all levels for their
hard work, dedication and commitment.
For and On behalf of the Board
L. Madhusudhan Rao G. Venkatesh Babu
Executive Chairman Managing Director
DIN - 00074790 DIN - 00075079
Place : Gurgaon,
Date : 29.07.2011
Mar 31, 2010
The Directors have pleasure in presenting the Seventeenth Annual
Report on the business and operations of the Company together with the
Audited Accounts for the year ended March 31, 2010.
CONSOLIDATED FINANCIAL RESULTS
Rs. Millions
Year ended 31st March,
2010 2009 Change (%)
INCOME
Sales, Operating
and Other Income 82,914.99 61,262.04 35
Less: Elimination
of Unrealised Profit
on Transactions with
Associate Companies 755.31 647.59 17
Total 82,159.68 60,614.45 36
EXPENDITURE
Construction, Generation
and Operating Expenses 61,493.77 49,075.83 25
Administrative and
Other Expenses 4,311.48 2,750.21 57
Interest and Finance
Charges 3,554.11 2,184.90 63
Depreciation 3,478.80 1,073.39 224
Total 72,838.16 55,084.33 32
Profit Before Taxation,
Minority Interest and
Share of Profits of
Associates 9,321.52 5,530.12 69
Provision for Taxation
- Current Tax 2,658.53 1,651.46 61
- Relating to Previous
Years 151.97 16.76 807
- Fringe Benefit Tax
[including Rs. 4.12
Million (2009: Nil)
relating to previous year] 4.12 20.49 (80)
- Deferred Tax 828.22 1.69 48,831
Net Profit after
Taxation, before
Minority Interest and
Share of Profits of
Associates 5,678.69 3,839.72 48
Less: Share of
Minority Interest 915.24 1,040.83 (12)
Add: Share of Profits
of Associates (177.97) 4.68 (3,904)
Net Profit after
Taxation, Minority
Interest and
Share of Profits
of Associates 4,585.48 2,803.57 64
Surplus brought forward 7,795.53 5,297.87 47
Less: Exchange Fluctuation
Gain netted in Fixed
Assets relating to
earlier year - 183.90 (100)
Profit Available for
Appropriation 12,381.01 7,917.54 56
Transfer (from) / to
Debenture Redemption
Reserve (24.23) (17.99) 35
Transferred to General
Reserve 190.00 140.00 36
Balance Carried to
Consolidated Balance Sheet 12,215.24 7,795.53 57
Rs. Millions
Year ended 31st, March
2010 2009 Change (%)
INCOME
Operating Income
& Other Income 59,982.14 40,976.47 46
Total 59,982.14 40,976.47 46
EXPENDITURE
Construction and
Operating Expenses 46,433.08 32,900.92 41
Administrative and
Other Expenses 3,770.92 2,253.83 67
Interest and Finance
charges 1,979.40 1,386.12 43
Depreciation 597.71 405.26 47
Total 52,781.11 36,946.13 43
Profit Before Taxation 7,201.03 4,030.34 79
Provision for Taxation
Current Tax
For the year 2,441.91 1,342.26 82
Earlier years 19.57 15.16 29
Deferred Tax (124.27) 7.12 (1,845)
Fringe Benefit Tax - 17.12 (100)
Profit after Taxation 4,863.82 2,648.68 84
Balance of Profit
brought forward 5,853.82 3,205.14 83
Balance of profit
Carried to Balance
Sheet 10,717.64 5,853.82 83
OPERATIONS REVIEW
On a Consolidated basis your Company has reported Gross Revenues of
Rs.82,159.68 Millions as against Rs.60,614.45 Millions of Revenues
registered in the Previous Year up by 36%. Total Expenditure for the
Year was Rs.72,838.15 Millions as against Rs.55,084.33 Millions in the
Previous Year an increase of 32% on the back of increased execution
activities of various projects. The Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA) amounted to Rs.16,354.44
Millions while the same was Rs.8,788.41 Million for the Previous Year
i.e. an increase of 86%. The Profit Before Taxation stood at
Rs.9,321.53 Millions, an increase of 69% as compared to Rs.5,530.12
Millions in the Last Year.
The Net Profit After Tax after adjustment of Minority Interest and
Share of Profits of Associates was Rs.4,585.48 Millions as against
Rs.2,803.57 Millions for the Previous Year, increase by 64%.
Gross Interest and Finance charges on consolidated basis amounted to
Rs.3,554.11 Millions in comparison to Rs.2,184.90 Millions due to
increase in loans and Working Capital Requirements for Project
Execution.
A detailed discussion on the results of the operations and the
financial condition is included in the Management Discussion and
Analysis section placed at Annexure-II to this report.
BUSINESS REVIEW
A detailed business review is being given in the Management Discussion
and Analysis Section of the Annual Report.
SUBSIDIARY COMPANIES
During the Year - (1) Coral Orchids Private Limited, (2) Cressida
Properties Private Limited, (3) Jupiter Infratech Private Limited, (4)
Leda Properties Private Limited, (5) Thebe Properties Private Limited,
(6) Uranus Infratech Private Limited, (7) Lanco Enterprise Pte.
Limited, Singapore, (8) Lanco Infratech (Mauritius) Limited and (9) Pt.
Lanco Indonesia Energy have become Subsidiaries of the Company.
During the year, the names of the following Subsidiaries have been
changed.
(1) Lanco Power Trading Limited (Formerly Lanco Electric Utility
Limited),
(2) Lanco Amarkantak Power Limited (Formerly Lanco Amarkantak Power
Private Limited), (3) Lanco Vidarbha Thermal Power Limited (Formerly
Lanco Mahanadi Power Private Limited).
HEALTH, SAFETY AND ENVIRONMENT
The Groups concern for environment was recognized, as Aban Power
Company Limited, a Subsidiary of the Company, won Teri Corporate Award
for "Excellence in Environment and CSR Activities" in June, 2009.
The Group is consciously making forays in Renewable Energy Sector, into
Solar Power Projects in addition to the on-going Hydro Projects.
The coveted certification like OHSAS 18001 in respect of Environment
Management System was bestowed, in recognition of the commitment of the
Group in respect of issues of Health, Safety & Environment.
DIRECTORS
In accordance with the Provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. L. Madhusudhan Rao, Mr. L.
Sridhar and Mr. G. Venkatesh Babu, Directors, retire by rotation and
being eligible offer themselves for re-appointment.
Mr. D.V. Rao, Joint Managing Director, resigned to his position from
the Board with effect from 7th August, 2009.
DEPOSITS
Your Company has not accepted deposits falling within the provisions of
Section 58A of the Companies Act, 1956 read with Companies (Acceptance
of the Deposits) Rules, 1975 during the year under review.
AUDITORS
Brahmayya & Co., Chartered Accountants, and Price Waterhouse, Chartered
Accountants, Auditors of the Company, will retire at the conclusion of
the Annual General Meeting.
Price Waterhouse, Chartered Accountants, vide their Letter Dated 11th
June, 2010, conveyed their inability to be considered for
re-appointment as Auditors.
Special Notices, under Section 190 of the Companies Act, 1956, were
received, proposing an Ordinary Resolution to appoint S.R. Batliboi &
Associates, Chartered Accountants, and Brahmayya & Co., Chartered
Accountants, as Auditors from the conclusion of the Annual General
Meeting to the conclusion of the next Annual General Meeting, in place
of the retiring Auditors.
S.R. Batliboi & Associates, Chartered Accountants, conveyed their
willingness to accept appointment and confirmed their eligibility under
Section 224(1-B) of the Companies Act, 1956.
Brahmayya & Co., Chartered Accountants, conveyed their willingness to
accept appointment and confirmed their eligibility under Section
224(1-B) of the Companies Act, 1956.
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
We present the abridged accounts under Section 219 of the Companies
Act, 1956. Pursuant to the Companies (Central Governments) General
Rules & Forms, 1956 read with Section 219 of the Companies Act, 1956,
the Particulars of Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo as required by Section 217 (1) (e)
of the Companies Act, 1956, read with Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 have not
been provided. However, these particulars are available for inspection
at the Registered Office of the Company and upon written request from a
shareholder, we will arrange to mail these details.
DISCLOSURE ON COMPANYS EMPLOYEES STOCK OPTION PLAN- 2006
The Employee Stock Option Plan-2006 was approved by a Special
Resolution passed by the Shareholders in the Extraordinary General
Meeting held on 7th June, 2006.
The required information relating to the said scheme pursuant to Clause
12 of the SEBI (ESOS/ESPS ) Guidelines,1999, is enclosed as an
Annexure-I.
PARTICULARS OF EMPLOYEES
We present the abridged accounts under Section 219 of the Companies
Act, 1956. Pursuant to the Companies (Central Governments) General
Rules & Forms, 1956 read with Section 219 of the Companies Act, 1956,
the Particulars of Employees as required by Section 217 (2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employee)
Rules, 1975 have not been provided. However, these particulars are
available for inspection at the Registered Office of the Company and
upon written request from a shareholder, we will arrange to mail these
details.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Clause-49
(IV)(f)is enclosed as Annexure-II.
CORPORATE GOVERNANCE
The Report on Corporate Governance is given separately in this Annual
Report. The Certificate of Practising Company Secretary certifying
compliance in this regard is annexed to this report.
Note on Particulars required as per Section 212 of the Companies Act,
1956
As per Section 212 of the Companies Act, 1956, we are required to
attach the directors report, balance sheet, and profit and loss
account of the subsidiaries. We had applied to the Government of India
for an exemption from such attachment as we present the audited
consolidated financial statements in the annual report. We believe that
the consolidated accounts present a full and fair picture of the state
of affairs and the financial condition and is accepted globally. The
Government of India has granted exemption from complying with Section
212. Accordingly, the annual report does not contain the financial
statements of these subsidiaries. The Annual Accounts of the Subsidiary
Companies and the related detailed information will be made available
to the Holding and Subsidiary Companies investors seeking such
information at any point of time and will be put on the Website of the
Company at www.
lancogroup.com. The Annual Accounts of the Subsidiary Companies will
also be kept for inspection by any investor at our Registered Office
and that of Subsidiary Companies concerned.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, the
Directors hereby confirm that :
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
are made from the same;
(ii) We have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for the period;
(iii) We 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) We have prepared the annual accounts on a going concern basis.
INFORMATION ON OBSERVATIONS IN ANNEXURE TO AUDITORS REPORT
In Item No. 21 of the Annexure to the Auditors Report, the facts are
stated giving fullest information and are self explanatory. It is
confirmed that systems have been further strengthened to exercise
better control to prevent such instances in future.
DEVELOPMENTS DURING THE YEAR
On 7th August, 2009, 1,84,18,587 (One Crore Eighty Four Lakhs Eighteen
Thousand Five Hundred and Eighty Seven) Equity Shares of Face Value of
Rs.10/- each were allotted at an Issue Price of Rs.394.90 Per Equity
Share (including Rs.384.90 Per Equity Share towards Share Premium)
under the Qualified Institutions Placement.
One Equity Share of the Company of face value of Rs.10/- each fully
paid-up was sub-divided into 10 (Ten) Equity Shares of Re.1/- each face
value as fully paid-up, pursuant to the resolutions passed through
Postal Ballot on 14th December, 2009, the record date being 5th
January, 2010.
Approval was accorded to the Board of Directors pursuant to Section
293(1)(a) of the Companies Act, 1956, through Postal Ballot on 19th
March, 2010 to Sell, Transfer and/or dispose of the whole or
substantially whole of the Investments held by the Company in
Subsidiaries, Associates and other Group Companies in the Power Segment
to any Wholly Owned Subsidiary of the Company in the Power Segment.
ACKNOWLEDGEMENT AND APPRECIATION
The Directors take this opportunity to thank the Shareholders,
Financial Institutions, Banks, Customers, Suppliers and Regulatory &
Governmental Authorities for their continued support to the Company.
Further, the Directors wish to place on record their appreciation of
Employees at all levels for their hard work, dedication and commitment.
FOR AND ON BEHALF OF THE BOARD
Dr. P. KOTAIAH G. VENKATESH BABU
Director Managing Director
Place: Gurgaon,
Date: 11.06.2010.