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Punj Lloyd | Annual Report 2015-2016 1
Chairman’s Message 2
Corporate Information 6
Chartering a New Blueprint 8
Management Discussion & Analysis 22
Directors’ Report 46
Corporate Governance Report 52
Statement under Section 129 of the Companies Act, 2013
relating to subsidiary companies 101
Auditors’ Report 107
Financial Statements 114
Cash Flow Statement 116
Notes to Financial Statements 118
Auditors’ Report on Consolidated Accounts 160
Consolidated Financial Statements 164
Consolidated Cash Flow Statement 166
Notes to Consolidated Financial Statements 168
Contents
2
Dear Shareholder,
Over the years, you have reposed faith in Punj Lloyd. Therefore, it is only fair that I, as your chief fiduciary, should share with you
the difficulties that your Company has faced in recent times, especially during the year under review. And do so with clarity.
As you know, Punj Lloyd is primarily in the business of engineering, procurement and construction (EPC) for major projects
in many countries abroad as well as across India. Let me start with our overseas operation and explain why it faced severe
headwinds. Your Company’s technical strength lies in oil and gas pipelines and associated construction activities such as the
construction of large scale tankage and terminal facilities. This is our primary contributor to revenues and orders.
Now look at what has happened to global crude oil prices over the last three years. For the period 1 April 2013 to 31 March
2014 (FY2014), the un-weighted average spot price of Brent crude was US$108 per barrel. In FY2015, the average had fallen
by 20% to US$86 per barrel. In FY2016, it dropped by another 45% to an average of US$47 per barrel. On 18 January 2016, it
was as low as US$27.36 per barrel.
The result: a virtual halt on all manner of oil and gas investment, including outlays on evacuation and storage. All global
exploration and production (E&P) majors have drastically deferred, often cancelled major capital investments and, in a milieu of
strained balance sheets and cash flow challenges, have single-mindedly focused on preserving their capital.
While oil prices have very gradually picked up to US$50 per barrel, it is still too low to trigger any significant uptick in
investments and capital outlays. Thus, for entirely global reasons, your Company’s largest revenue earner has remained virtually
moribund. To be sure, there have been the odd projects on the anvil - both abroad and in India - but these have been quite
insufficient to meet the revenue and profit needs of a large contractor such as Punj Lloyd.
Let me now move on to India. There is no doubt that India is growing fast relative to all other developed and emerging market
economies. According to the latest data released by the Central Statistical Office of the Government of India, real GDP grew
by 7.2% in FY2015 followed by 7.6% in FY2016. Inflation seems to be under control and, though still high, interest rates have
come down a bit.
Chairman’s Message
4
It is also true that the present NDA government under Prime Minister Narendra Modi is explicitly focusing on
infrastructure growth as the key to increasing national income and employment. As an example, the Union
Budget of 2016-17 has allocated a record ` 2.21 lakh crore for infrastructure, with the roads sector getting
` 97,000 crore to award 10,000 kilometres of new road projects, including rural roads. Policy changes have
been brought about to encourage more meaningful public-private partnerships in the construction of national
highways.
There can be little doubt that initiatives such as these will provide impetus to the construction sector in the
future. However, these are still early days, and we need to see many new projects being awarded and many
other delayed projects being effectively resuscitated before the construction industry sees sufficient orders.
Unfortunately for the industry as well as your Company, there have been some critical legacy issues. During
the last three to four years of the previous UPA-II led government, everything of consequence came to a
virtual standstill - on account of policy paralysis as well as judicial and environmental interventions which led
to increased risk aversion by civil servants, putting major infrastructure projects on hold, be these in power,
highways, telecommunications, public irrigation, mining and other sectors.
The consequence of projects being stalled or not awarded was severe for the construction industry.
Something that could normally be completed in, say, 30 months, were either put on hold for one reason or
the other or seriously delayed. These unfortunate events led to severe strain on working capital: construction
companies borrowed to mobilise resources which then sat idle with no line of sight of revenues. Being in this
business long enough, I can say with certainty that every major public infrastructure oriented construction
company in India has suffered increasingly serious financial pressures over the last four to five years.
It was not just a matter of not getting revenues on account of projects that were stalled or delayed for
reasons outside the contractors’ control. Worse still has been the practice of very many clients - be they from
government departments, quasi-government agencies, public or private sector companies - not to honour
arbitration awards. Most large scale EPC projects go through change of scope of work. That is natural.
In all developed and some developing countries, if the contractor and the client do not agree to signing off the
additional expenditure incurred on account of such changes, the matter goes to time-bound, relatively fast
track arbitration. Almost invariably, the mutually chosen third-party arbitrator’s decision is final and binding. Not
so in India. Virtually on every occasion when an arbitration award goes in favour of the EPC contractor, the
client immediately appeals the matter in court. This is essentially a low cost strategy to prevent payment and
buy more time.
Your Company has around ` 1,200 crore of such claims in India and a large amount of unpaid receivables in
Qatar. If these were paid, as they should have, Punj Lloyd would have gone a long way in repaying overdue
debts and cleaning its balance sheet.
Thus, the industry and your Company is suffering from high leveraging on account of working capital needs to
get projects going; and not getting sufficient revenues in time on account of project delays and clients routine
appealing against arbitration awards in courts. In an environment where there are still not enough projects and
competition from new players who choose to bid at prices that simply cannot offer a positive return on capital,
the outcome has been one of unprofitability coupled with extreme financial stress. Punj Lloyd is no exception
to this general phenomenon.
Punj Lloyd | Annual Report 2015-2016 5
Consequently, the financial results for FY2016 have been grim. The key consolidated results are:
Revenue fell by 40% to ` 4,261 crore
EBIDTA dropped from ` 251 crore in FY2015 to a loss of ` 739 crore in FY2016
Thanks to high working capital needs, the finance cost in FY2016 was ` 1,070 crore
PAT was at a loss of ` 2,194 crore
Punj Lloyd began a corrective action plan (CAP) in the beginning of FY2016 to drastically reduce costs, streamline
businesses and monetise assets wherever it could. An example was selling its stake in Medanta Medicity to Temasek.
It also presented the CAP to the key banks so that these institutions would be forthcoming with the necessary funding.
While the banks have, more or less, agreed in principle, there were far too many procedural delays in the course of the
year. Hence, the necessary funding did not materialise for most of the period under consideration. This resulted in your
Company either not bidding for projects or being forced to pull out the bids due to lack of funds — which is yet another
reason for the drop in the top-line.
Having painted this rather gloomy picture, let me now share with you why I am hopeful — very cautiously for FY2017
and with greater confidence for the subsequent years. Four factors have come into play. The first is that the Government
of India has promulgated the Arbitration and Conciliation (Amendment) Ordinance, 2015 to amend certain provisions of
the Arbitration and Conciliation Act 1996. Having received Presidential assent on 31 December 2015, this is now an Act,
and is deemed to have come into force on 23 October 2015. It has two major positive consequences. For one, it allows
for faster decision making in arbitration. For another, and more importantly, it provides for the possibility to deposit the
award money by the aggrieved party before taking the judicial route to challenge an arbitration award. This will reduce
the probability of clients needlessly appealing against the decision of the arbitrators with a primary motive to delay the
payments.
The second is, as I mentioned earlier, the beginning of a larger number of projects in India. This is reflected in the growth of
your Company’s order book as on 31 March 2016. Today, Punj Lloyd has significantly more orders of greater value than it
did a year earlier.
The third is that, despite delays, banks are now committed to play the role of partners in helping your Company grow its
business and, thereby, expediting the process of servicing and repaying its debts. I hope that the commitment continues
and we get a fair chance to again prove our worth.
And the fourth is that we are ruthlessly focusing on cutting costs and improving productivity. These efforts have started
bearing fruit. Much more will be seen in the days and months ahead.
So, as I said a short while earlier, I am cautiously hopeful of the business and its prospects in FY2017. With the help of all
your Company’s employees and your support, we will get there. I love the song, “We shall overcome”. I believe in it.
With best wishes,
Atul Punj
Chairman
6
CHAIRMAN (EMERITUS)
SNP Punj
BOARD OF DIRECTORS
Atul Punj Executive Chairman & Managing Director
Shiv Punj Whole Time Director
Phiroz Vandrevala Independent Director
Uday Walia Independent Director
Rajat Khare Independent Director
Shravan Sampath Independent Director
AUDIT COMMITTEE
Phiroz Vandrevala Independent Director, Chairman of the Committee
Rajat Khare Independent Director
Atul Punj Executive Director
STAKEHOLDERS’ RELATIONSHIP COMMITTEE CUM SHAREHOLDERS’/
INVESTORS' GRIEVANCE COMMITTEE
Uday Walia Independent Director, Chairman of the Committee
Atul Punj Executive Director
Shiv Punj Executive Director
NOMINATION & REMUNERATION COMMITTEE
Phiroz Vandrevala Independent Director, Chairman of the Committee
Uday Walia Independent Director
Rajat Khare Independent Director
Corporate Information
Punj Lloyd | Annual Report 2015-2016 7
BANKERS
Andhra Bank
Axis Bank
Bank Muscat, Oman
Bank of Baroda
Bank of India
Barwa Bank
Bank Emirates
Canara Bank
Central Bank of India
DBS Bank Limited
Dhanlaxmi Bank
Doha Bank, Qatar
Dubai Islamic Bank UAE
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Atul Punj Executive Director, Chairman of the Committee
Shiv Punj Executive Director
Uday Walia Independent Director
CHIEF FINANCIAL OFFICER
Rahul Maheshwari
GROUP PRESIDENT-LEGAL & COMPANY SECRETARY
Dinesh Thairani
AUDITORS
Walker, Chandiok & Co. LLP, Chartered Accountants
REGISTRAR
Karvy Computershare Pvt. Ltd.
Karvy Selenium Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032
T +91 40 6716 2222 F +91 40 2300 1153
Export - Import Bank of India
First Gulf Bank, Abu Dhabi
HDFC Bank Limited
ICICI Bank Limited
IDBI Bank Limited
IFCI Limited
Indian Bank
Indian Overseas Bank
Indusind Bank
International Finance Corporation,
Washington DC
Life Insurance Corporation of India
Mashreq Bank PSC, Dubai
Oriental Bank of Commerce
RBL Bank
Standard Chartered Bank
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Patiala
The Jammu & Kashmir Bank Limited
The Karur Vysya Bank Limited
UCO Bank
Union National Bank, Abu Dhabi
United Bank of India
10
Punj Lloyd showcases its Defence capabilities at DefExpo 2016
DefExpo 2016 in Goa had Punj Lloyd display its achievements,
programs and capabilities in the Indian Defence Sector.
Many distinguished personalities visited the Punj Lloyd
stall, including Honourable Defence Minister- Shri Manohar
Parrikar, Deputy Chief Minister of Goa - Francis D’ Souza,
Defence Secretary, GOI - G Mohan Kumar, Chief of the Army
Staff - Gen Dalbir Singh Suhag, Deputy Chief of Air Staff - Air
Marshal RKS Bhadauria, Deputy Chief of IDS - Ajit S Bhonsle,
Defence CapabilitiesDG Artillery - Lt Gen P Ravi Shankar, Joint Secretary - Subir
Mallick and various other senior officials of the three service
headquarters - Army, Navy and Air Force. There were a
number of foreign delegates and embassy officials who
evinced keen interest in Punj Lloyd’s upgrade programs.
Various components manufactured at the Company’s
Manufacturing and Systems Integration Division (MSID),
Gwalior, were on display as well. These included large
components like the outer casing of the combustion chamber
and the upper/lower tank panels for the Sukhoi 30 Fighter Jet
aircraft, the Main Gear Box for the Advanced Light Helicopter,
the Rammer of the artillery gun, the radar mast for SAAB of
Sweden and scuppers for Fincantieri.
Punj Lloyd | Annual Report 2015-2016 11
Punj Lloyd in Defence:
Declared provisional L1 for up-gradation of Air Defence gun, ZU-23
Participating in the 130 mm Artillery Gun upgrade programme
Joint venture with Israel Weapon Systems (IWI) for Small Arms
Manufactured eight major components of Dhanush (indigenised gun) out of the eleven given to the private sector by OFB
Design and development of the Muzzle Brake and Loading Mechanism of the ATAGS (Advanced Towed Artillery Gun System) for DRDO
Manufactured the loading device and system for both the 155 x 45 OFB guns
First private sector Indian company to get AERB clearance for ToT of full body truck scanners for the Homeland Security business
Variety of sizes and complexities of components meeting the rigorous standards and tight schedules of the Aviation and Defence industries
12
New Wins,
Four laning of 60 km of the Simaria – Khagaria Section of NH 31, Bihar
Four/six laning of 48 km of the Raipur - Simga Section of NH 200, Chhatisgarh
50 km of the Talebani to Sambalpur Section of NH 6, Odisha
35 km of the Tallewal - Barnala Section of the NH 71, Punjab
Winning highway EPC projects worth ` 1555 crore
Punj Lloyd | Annual Report 2015-2016 13
Infrastructure
Highway wins pan India
At the onset of 2016, Punj Lloyd
announced winning four highway EPC
projects worth ` 1555 crore in the states
of Bihar, Chhattisgarh, Odisha and Punjab.
The projects in Bihar, Chhattisgarh and
Odisha were awarded to Punj Lloyd by
the National Highways Authority of India
(NHAI), while the order in Punjab was won
from the Ministry of Road Transport and
Highways (MORTH).
Bihar
Four laning of 60 km of the Simaria –
Khagaria section of NH 31. Punj Lloyd was
the developer for 140 km of the Khagaria -
Purnea section on the same highway.
Chhattisgarh
Four/six laning of 48 km of the Raipur -
Simga section of NH 200. The contract
includes the bypass and 22 supporting
structures like flyover, vehicular underpass
(VUP) and bridges.
Odisha
Rehabilitation and upgradation of four
laning with paved shoulders of 50 km of
the Talebani to Sambalpur section of NH 6.
Punjab
Won in joint venture with VRC
Constructions (I) Pvt Ltd, for four laning
with paved side shoulders of 35 km of
the Tallewal - Barnala section of the NH
71 in the state of Punjab. Inclusive of the
construction of the Barnala bypass and 13
other supporting infrastructure including
flyovers, VUP/passenger underpass (PUP),
road over bridge (ROB) & bridges.
Road project in Bihar from NHAI, part
of East West Corridor Highway project
41 km long, ` 541.84 crore road project
from National Highways Authority of India.
The scope of work includes four laning
of the Gorakhpur - Gopalganj section of
NH-28.
Foray into the Transmission and Distribution segment of the Power sector
Punj Lloyd strategically forayed into the
transmission and distribution space and
secured five new orders, worth ` 1100
crore in the last financial year.
Won its first transmission project from
Madhya Pradesh Power Transmission Co
Ltd for construction of new 220 kV and
132 kV sub-stations, transmission lines
and feeder bay work in Bhopal region.
Rural electrification work for construction/
augmentation of substations, installation
of distribution transformers and providing
service connections to BPL consumers in
Puri and Koraput for NTPC.
Augmentation of the existing 33/11 kV
s/s, construction of 11kV outgoing bay,
construction of new 11kV line, LT lines,
installation of distribution transformers and
service connection to BPL consumers in
districts of Odisha – Jajpur, Khorda and
Ganjam under the Rajiv Gandhi Gramin
Vidyutikaran Yojna (RGGVY) for Power Grid
Corporation of India Limited (PGCIL).
14
Oil & Gas
Pipeline contracts worth `
Punj Lloyd won oil & gas EPC orders worth
` 2,070 crore from Oman Oil Refineries
and Petroleum Industries Company
(ORPIC) and Oman Gas Company (OGC)
which are owned by the Government
of the Sultanate of Oman and Oman Oil
Company SAOC.
The scope of work for the contracts
include the construction of a 14” dia, 300
km natural gas liquid (NGL) pipeline and
a 32” dia, 301 km gas pipeline. The 14”
dia pipeline, part of ORPIC’s US$ 6.4bn
Liwa Plastic Industries Complex (LPIC), will
travel from the New Fahud NGL Plant to
the Steam Cracker Unit at Sohar in Oman.
Punj Lloyd was the only Indian contractor
in Oman to be awarded a sizable contract
of the LPIC mega complex.
In view of the increased gas demand and
to ensure availability of supply, Punj Lloyd
will be laying another 32” dia gas pipeline
parallel to the existing 32” dia Fahud –
Sohar pipeline for OGC. The pipeline is
being laid to supply gas for the North
Power station.
`
Punj Lloyd today won 459 km of the
48” dia TANAP Gas Pipeline in Turkey
worth ` 2,780 crore (USD 409 million) in
joint venture with Limak (50-50 share).
Awarded to the JV by TANAP Dogalgaz
Iletim A.S., Punj Lloyd’s value of the project
amounts to ` 1,390 crore.
TANAP, the Trans Anatolian Natural Gas
Pipeline, will be built to transport natural
gas emanating from the South Caucasus
Pipeline Company (SCPC) pipeline in
Georgia and terminating into the Trans-
Adriatic Pipeline (TAP) in Greece.
Punj Lloyd’s scope of the present project
(Lot 4) is the second phase of construction
from the new Eskisehir Compressor station
to the tie-in point of the Trans Adriatic
Pipeline (TAP). The proposed natural
gas pipeline is of 48” dia and 459 km in
length. The scope also includes 10 Block
Valve Stations, Pigging facility (two within
Compressor Stations, two at Pigging
Stations) and Tie-ins with Metering
Stations.
` 367 crore
Punj Lloyd won an EPCC contract at
Paradip Refinery, Odisha from Indian Oil
Corporation Ltd (IOCL) for a value of ` 367
crore. The scope of work for the project
involves the Residual Basic Engineering
including HAZOP study, detailed
engineering, procurement, construction
and commissioning of the Coker LPG
Treating Unit and offsite and utility facility.
This is Punj Lloyd’s second order in
Paradip Refinery, the first order for IOCL
comprised 12 Process Units (LSTK # B) on
EPC Basis, which is now in the final stages
of completion.
Punj Lloyd | Annual Report 2015-2016 15
worth ` 1094 crore (USD
Punj Lloyd won a lump-sum turnkey
contract for the EPCC Package 2 at
Haldia Refinery, West Bengal from Indian
Oil Corporation Ltd (IOCL) for a value of
` 1094 crore. The scope of work for the
project involves the Residual Process
Design, Detailed Engineering including
HAZOP study, engineering, procurement,
construction and commissioning of the
Sulphur Block comprising the Sulphur
Refinery Unit (SRU), Amine Regeneration
Unit (ARU), the Sour Water Stripper (SWS)
including the Utilities and Offsite facilities.
This project falls under IOCL’s prestigious
‘Aishwariya’ project. IOCL’s Haldia project
aims to upgrade Black Oil, mainly High
Sulphur Fuel Oil to higher value products
like diesel and LPG which will lead to
subsequent improvement in Gross
Refinery Margins. It will also produce
improved quality diesel, conforming to
BS-IV specifications as a measure towards
environmental protection.
For IOCL itself, Punj Lloyd has constructed
the Sulphur Block of the Mathura,
Guwahati and Koyali refineries, taking this
relationship with IOCL as far back as 1998.
Though Punj Lloyd has extensive
experience in almost every Process unit
including Delayed Coker, Visbreaker,
Hydrogen and Hydrocracker, Sulphur
Block, MSQ up-gradation, its expertise
in Sulphur Blocks is particularly extensive
with the company having built the Sulphur
Block for BORL’s (Bharat Oman Refinery)
grass root Bina refinery, CPCL’s (Chennai
Petroleum Corporation) Manali refinery,
Kochi refinery and HPC’s (Hindustan
Petroleum Corporation) Mahul refinery.
At the Haldia refinery, Punj Lloyd has
delivered complex refinery units; the MSQ
upgradation, Hydrogen Generation and
Hydrocracker Unit.
worth ` 477 crore (USD 75
The scope of work for this ` 477 crore
(USD 75 million) tankage order entails
confirmatory geotechnical investigation,
early earth work, construction of two
180,000 m3 capacity full containment LNG
tanks on elevated piled foundation for LNG
import, storage and re-gasification terminal
of Indian Oil Corporation at Ennore port
in Tamil Nadu, India. Once completed,
the LNG imported to the Ennore terminal
will be used by utility company power
generation plants as an alternative fuel and
as feedstock by fertiliser plants.
Punj Lloyd’s expertise in tanks and
terminals, especially cryogenic tanks is well
established, making Punj Lloyd excellently
placed to deliver this project. Punj Lloyd
had constructed the LPG Import-Export
terminal at Ennore for its client, IndianOil-
Petronas. Punj Lloyd was involved in the
construction of three of the four LNG
terminals of the country - namely Dahej,
Hazira and Dabhol.
Prowess in HDD
Punj Lloyd has received a Letter of Award
(LOA) from Gas Transmission Co Ltd
(GTCL) in Bangladesh for installation of
30” dia pipeline under four different rivers
near the coastline, using HDD technique
on EPC basis. This project forms part of
the Maheshkhali-Anwara Gas Pipeline near
Coxbazar, Chittagong.
This is Punj Lloyd’s third HDD order in
Bangladesh and a repeat order from the
client.
Punj Lloyd has laid over 95,000 m of
pipelines under expressways, railways,
rivers, shore approaches, creeks and
canals using Horizontal Directional Drilling.
Punj Lloyd completed 2100 m longest
and fastest Horizontal Directional Drilling
crossing under the mighty Narmada river
in Gujarat, India for Gujarat State Petronet
Limited (GSPL) within 50 days. The client
appreciated Punj Lloyd’s timely response
and efforts in beating the monsoon
onslaught in the Narmada basin.
16
From advocating for the EPC industry at
various forums to representing India at
global platforms, Punj Lloyd has leveraged
its experience and knowledge to play a
predominant role in changing the landscape
of the industry and the nation. Chairman
and Managing Director, Atul Punj advocates
on issues imperative to create and
sustain an environment conducive to the
development of the construction industry
through platforms like the CII. As Chairman
of CII National Committee on Construction,
Mr Punj has been instrumental in getting the
Arbitration Act revised for fast-track dispute
resolution, a major milestone, considering the
high number of cases languishing in courts.
Internationally, as President of IPLOCA, he
has led the Association to realise its mission
of providing enhanced value to its members,
engaging the industry and its stakeholders,
facilitating business opportunities and
promoting the highest standards in the
pipeline industry. As Founder Supporter of
Indian School of Business, the Punj Lloyd
Institute of Infrastructure Management
launched its first leadership programme,
moving towards its objective of creating
top quality management capacity for the
Infrastructure Sector.
Thought Leadership
Punj Lloyd | Annual Report 2015-2016 17
Awards and Recognition
Among the attendees were Punjab’s Deputy Chief Minister,
Sardar Sukhbir Singh Badal, State Renewable Energy Minister
- Bikram Singh Majithia, Joint Secretary, Ministry of New and
Renewable Energy, (MNRE), Government of India, Punjab
Government Principal Secretary – Power, Chief Secretary
Punjab, Indian Renewable Energy Development Agency
(IREDA) CMD, CEO PEDA among several chieftains of the
industry including Atul Punj.
Punj Lloyd was one of the developers who had
commissioned the project one month ahead of schedule. In
his address to the audience, Mr Punj attributed this success
to the “healthy environment provided by various Punjab
Government agencies” and particularly lauded the proactive
approach of the Minister and officials of PEDA.
Mr Punj also highlighted that Punj Lloyd was one of the
pioneers to adopt an innovative concept of taking semi-fertile
land on lease from local farmers with annually escalating rentals,
providing a stable and growing source of income for the local
farmers without losing the ownership of land. While on one side,
this guaranteed an escalation of 5% every year to the farmers,
this put the less fertile land available in the State to the best
alternative utilisation, resulting in a win-win situation for the local
farmers, developers and the State Government to achieve their
respective goals.
The Minister appreciated the development efforts by Punj Lloyd,
who along with others, is playing an important role in bringing a
solar revolution in Punjab.
18
Punj Lloyd initiated a unique internal cost saving program
involving all its employees at its various locations. Recognising
the need for becoming a leaner and more efficient organisation
at various fronts, employees came up with several innovative
and strategic suggestions. 46 unique suggestions were
selected to be finally implemented. An impactful campaign
supported the program so as to involve maximum employees
and cover all aspects of business and services. Following
suggestions were implemented with immediate effect: closure
of regional offices that were not optimally utilised or did not
justify the volume of work in the region, reduction of light points
in areas with over-illumination, shutting down of guest houses
which were not being utilised and relocation of existing ones
to cheaper locations, installation of GPS in vehicles to monitor
movement and check theft of fuel, optimisation of chartered
buses, replacement of disposable cups with china clay mugs
for all employees, power consumption to be in the scope of
sub contractors at all project sites, sub contractors not to
get consumables like fuel / spares but only usage of cranes,
dedicated team to concentrate on value engineering, use of
solar power technology at various places, standardisation of
overseas salary structure, reduction of travel cost by using
latest technology, all verticals to be headquartered in India,
replacement of conventional lights with LED, enable double
side printing by default, and generating MIS of printing
undertaken by employees. The implementation of these
suggestions alone saved ` 50 lakh in a year for the company.
The best cost saving ideas were awarded certificates and
prizes by the senior management. Several posters, screen
savers, road shows both at corporate office and sites were
used to motivate people to share their contribution/stories
towards cost saving. Post the awareness drive, brilliant
examples came up from sites and various teams from the
corporate office about their cost saving achievements. These
were further shared to inspire their colleagues. Second round
of ideas which were implemented included surprise audit
checks, change in procedure for submission of supply invoice
of sub-vendors, all paper forms to be converted to electronic
forms among others. Project teams were encouraged to share
innovative technological ideas that could multiply efficiency.
All these efforts were bound by the single aim of turning the
company into PAT positive.
use
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Be the Change
Bring the Change
Only a Change in Approach and
a Sense of Belonging can change our workplace
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Write with your ideas to letsmakeitposi�[email protected]
Cut Costs, Bring in the Cash!
We can, We will!
Punj Lloyd | Annual Report 2015-2016 19
Employee Corner
Sessions on Gender Equality & Sensitisation
at
22
Introduction The global construction industry is going through a difficult
phase. Internationally, a general economic slowdown, fiscal
uncertainties of many governments and a sharp decline
in commodity prices have slowed the pace of large scale
infrastructure related investments. While growth is back in
India, and government financed infrastructure outlays have
started, especially in highways, the construction industry
in the country faces other constraints. The most important
one is the overhang of stalled projects that occurred in the
last four years of the previous UPA-II regime. Matters have
worsened because, when there has been a dispute and
the arbitration award has gone in favour of the contractors,
the clients have invariably held up payments by appealing
to higher courts. Taken together, these have led to a severe
liquidity crunch and financial instability across all players in the
construction industry.
In the last decade, Punj Lloyd Limited (‘Punj Lloyd’, ‘PLL’ or
‘the Company’), had charted a rapid growth path establishing
itself as an EPC (Engineering, Procurement and Construction)
conglomerate with a wide presence across emerging markets.
Faced with this challenging business environment in the last
few years — both abroad and in India — the Company has
had to take a step back from its growth driven business
strategy. It has been forced to realign its businesses to meet
the financial challenges at hand.
Essentially, today, the Company is going through a process of
course correction – the contours of which were drawn up in a
Corrective Action Plan (CAP) developed along with the financial
partners in financial year (FY) 2015. The basic aim of the CAP
was to restructure the Company’s strategy and operations
to develop a more stable business model that focused on
increasing cash flows and reducing debt exposure.
Punj Lloyd had entered FY2016 with a well-defined CAP.
However, for several reasons, the financial assistance necessary
to support this CAP got further delayed. In fact, the Company
started getting some of this working capital support only in
the last leg of FY2016. Also, there were delays in award and
commencement of some of the orders secured in FY2015.
Consequently, while restructuring of the organisation according
to the contours of the CAP had been completed much
earlier, much of FY2016 was washed out in terms of business
execution. This accentuated Punj Lloyd’s financial difficulties
and adversely affected its performance in FY2016.
Macroeconomic EnvironmentPunj Lloyd’s business can be segregated according to
constructs — geography and user industry. From a geographic
perspective, there is further demarcation between domestic
operations, and international operations in emerging economies
of Middle-East, Africa, Central Asia and South East Asia.
Industry-wise, there is Punj Lloyd’s traditional core strength of
Management Discussion and Analysis
CHART A
EMERGINGMARKETS
MENA ASEAN CIS(NON RUSSIA)
All Figures are in %
Source: IMF Estimates
0
1
2
3
4
5
6
4.1 4.0
2.9
2.3
4.8 4.7
0.9
-0.6
GDP GROWTH CY2015 & 2016
20142015
FY 2013 FY 2014 FY 2015 FY 2016
0
1
2
3
4
5
6
7
8
5.6
6.6
7.27.6
REAL GDP GROWTH - INDIA
All Figures are in %
Source: Central Statistical Organisation (CSO), Government of India
CHART C
Punj Lloyd | Annual Report 2015-2016 23
undertaking construction projects in the
oil, gas and energy related businesses. In
addition, it caters to projects that cover
other infrastructure related sectors like
roads, waterways, railways and urban
infrastructure. The market dynamics
that has evolved over the last few years
has resulted in a shift in the Company’s
business thrust towards increasing
business focus in India and non-oil
related sectors. The macro-economic
developments highlighted below explain
the reasons behind this change.
Today, the global economy is going
through a slow and long drawn process
of recovery amidst increasing financial
turbulence. In fact, economic activity
softened towards the end of Calendar
Year (CY) 2015 in advanced economies;
and stresses in several large emerging
economies showed no signs of abating.
In addition to these headwinds, there are
growing concerns about the global impact
of the unwinding of earlier investment and
financial excesses in China as it transitions
to a more balanced, consumption-led
growth path. There are also signs of
distress in other large emerging markets,
particularly ones who have been adversely
affected by falling commodity prices.
Data from the International Monetary Fund
(IMF), reported in the World Economic
Outlook (WEO), April 2016, suggest
that emerging markets and developing
economies continued to grow at low rates:
4.1% in CY2015 compared to 4.0% in
CY2014. Within this space, Punj Lloyd’s
key markets continued to record low to
moderate growth in CY2015: Middle East
and North Africa (MENA) grew at 2.9%;
South East Asia (ASEAN-5) at 4.8%; and
the non-Russian CIS countries at a low
0.9%. Chart A gives the details.
The other significant global development
has been the continuing reduction in
commodity prices, driven primarily by oil.
As Chart B shows, oil prices, which were
continued through FY2016 and touched
around US$30/barrel in December 2015.
The response of the world’s oil companies
to lower oil prices has adversely affected
all related construction activities. It is
estimated that some US$ 400 billion worth
of oil and gas projects have been deferred
or cancelled.
Amidst this global economic gloom,
growth trends in the Indian economy have
been encouraging, although it is still below
potential. As Chart C shows, real GDP
growth has been improving steadily from a
low of 5.6% in FY2013 to 7.6% in FY2016.
Today, India is globally the fastest growing
large economy in the world.
Additionally, India’s other macroeconomic
parameters like inflation, fiscal deficit and
current account balance have exhibited
distinct signs of improvement. Wholesale
price inflation has been in negative territory
for more than a year and the all-important
consumer prices inflation has declined
to nearly half of what it was a few years
ago. With inflation under control, the
Reserve Bank of India (RBI) has somewhat
eased monetary policy and reduced the
benchmark repo rate. Consequently,
lending rates have reduced marginally. The
base rate for scheduled commercial banks
which was 10.25% in FY2014 has reduced
to 9.7% by the end of Q3, FY2016. Having
said so, the interest rate levels still need
to come down further to really kick-start
investments.
The Construction IndustryWhile the global construction industry
presently is going through a phase of
consolidation and severe competition,
in the longer term there continue to be
substantial opportunities. According to a
research conducted under the supervision
of PwC, the global construction market is
at levels of over US$100/barrel at the
beginning of FY2015, had already reduced
to levels of US$50/barrel by the beginning
of FY2016. The secular negative trend
CHART BOIL FUTURES PRICE CLM (US$/BARREL)
2 0 1 4 2 0 1 5 2 0 1 6
All Figures are in %
0
20
40
60
80
100
120
AP
R
MA
Y
JUN
JUL
AU
G
SE
P
OC
T
NO
V
DE
C
JAN
MA
RA
PR
MA
YJU
NJU
LA
UG
SE
PO
CT
NO
VD
EC
JAN
FE
B
FE
B
MA
R
24
estimated to grow by US$8 trillion till 2030,
reaching a size of US$17.5 trillion, at an
average annual growth rate of 3.9%. The
report also states that the construction
sector will play a leading role in future
global economic growth; and, that by
2030, it will account for 14.7% of global
GDP, up from 12.4% in 2014. However,
global construction activity will be skewed
in favour of certain regional markets. In
fact, eight markets – China, US, India,
Indonesia, UK, Mexico, Canada and Nigeria
– in that order, will account for 70% of all
global growth in construction till 2030.
In India, while clearly more rapid economic
demand warrants stronger construction
activity, it has not yet happened. As Chart
D shows, over the last four years, gross
value added (GVA) of the construction
sector in India has grown by less than 5%,
and in FY2016 it has reduced to 3.7%
against 4.4% in FY2015.
It is true that the sector holds immense
potential. Estimates suggest a requirement
of over US$1 trillion investment in
infrastructure over the next five years to
sustain India’s economic growth at over
7% per year. Thankfully, the need for
boosting infrastructure development has
0
1
2
3
4
5
FY 2013 FY 2014 FY 2015 FY 2016
0.6
4.64.4
3.7
REAL GVA, CONSTRUCTION - INDIA
All Figures are in %
Source: Central Statistical Organisation (CSO), Government of India
CHART D
been core to the present Government of
India’s policies. There have been reforms
to boost sectors like roads, railways,
power distribution, and rural and urban
development. The Union Budget 2016-17
has allocated a record ` 2.21 lakh crore
for infrastructure. The roads sector alone
has been allocated ` 97,000 crore as the
government plans to award 10,000 km of
new road projects in 2016-17, including
` 19,000 crore earmarked for rural roads
under the Pradhanmantri Gram Sadak
Yojna.
In addition, the Government of India
has made certain policy changes. It
has worked with the National Highways
Authority of India (NHAI) to introduce a
hybrid structure to replace the existing
build-operate-transfer (BOT) mechanism
for roads. There have also been reforms
related to state electricity boards and
power distribution, redevelopment of
inland waterways, water distribution and
promotion of renewable energy. These
initiatives should provide impetus to the
sector in the future.
Today, however, not much of these
measures have actually translated into
major development work on the ground,
with greater revenue streams for the
contractors. Moreover, as touched upon
earlier, the sector is plagued with legacy
issues that need to be addressed first.
Four years of policy paralysis and lack of
decision making under the previous UPA-II
government have led to several projects
being stalled or delayed. During FY2015,
the present central government constituted
a special project monitoring group (PMG)
to indentify stalled projects and accelerate
the process of implementation. As on 1
February 2016, 304 projects involving an
investment of ` 12,75,877 crore remained
stalled. While this is close to 33% less than
what was the case in March 2015, it is still
huge. In fact, the top 100 stalled projects
— mostly in power, steel, railways and
petroleum sectors — account for the lion’s
share of investments at ` 10,41,281 crore.
While most of these developments were
under government, quasi-government
institutions or companies, the bulk of the
construction work was with the private
sector. For most of these projects, the
contractors have made substantial
investments in mobilisation of resources,
for initial development work and for
changes from original scope of work to
get these more practical. For most of
these activities however, the contractors
have not been adequately compensated,
and a large pool of disputes have arisen.
Unfortunately, the dispute resolution
mechanism has been inordinately delayed
to push back payments. In most cases,
the decision of arbitration awards in favour
of contractors has been further challenged
in courts. While most of the court decisions
are in line with arbitration award results, the
process of applying for judicial intervention
beyond appointed arbitrators is being
grossly misused to delay taking decisions
on clearing receivables. Consequently, a
large proportion of activities in the sector
today revolve around managing claims and
making efforts to get compensated.
In financial terms, the brunt of such
delays has been faced by private sector
construction service providers. They are
suffering under a spiral of large receivables
leading to liquidity crunch affecting revenue
growth resulting in burgeoning debt
burdens.
The Government of India has
acknowledged issues facing the sector.
However, solutions are complex and
not easy. On a positive note, the current
Government promulgated the Arbitration
and Conciliation (Amendment) Ordinance,
2015 to amend certain provisions of the
Arbitration and Conciliation Act 1996
which received assent from the President
on 23 October 2015. The Arbitration
Punj Lloyd | Annual Report 2015-2016 25
and Conciliation (Amendment) Bill, 2015
(Amendment Bill) was introduced in both
houses of Parliament in its recent session
to replace the Arbitration and Conciliation
(Amendment) Ordinance, 1996 and was
subsequently passed by the Lok Sabha
and Rajya Sabha on 17 December 2015
and on 23 December 2015, respectively.
This Amendment Bill has now become an
Act and is deemed to have come into force
on the 23 October 2015.
There are primarily two material
consequences of this legislation for players
in the infrastructure industry. First, it allows
for faster decision making in the arbitration
process. Second, it provides for the
possibility to deposit the award money
by the aggrieved party before taking the
judicial route to challenge an arbitration
award. This will reduce the probability of
clients needlessly appealing against the
decision of the arbitrators with a primary
motive to delay the payments.
The fact that the Government of India
has recognised the problem and made
legislative progress to clean up the claims
issues of the sector signals a positive
intent. However, this will be applicable
to future projects. If these efforts can
be extended to certain retrospective
measures to clear the legacy issues, the
financial health of the construction sector
will become more stable and manageable,
and thus provide a stronger base for
construction in India.
Business PerformanceSince the beginning of FY2015, Punj
Lloyd had reworked its business strategy
focusing on improving cash flows and
reducing its debt burden. In fact, the
Company had drawn up a Corrective
Action Plan (CAP), which was supported
by the lenders. The CAP translated
into renewed focus on the core EPC
business with an emphasis on streamlining
processes, reducing costs and optimally
utilising resources including people.
In addition, PLL stressed on monetising
non-core assets. In this endeavour
there have been some positive gains.
To begin with, in FY2015, the Company
had successfully sold its investments in
Medanta Hospital in Gurgaon to Temasek
Holdings group. In addition, there are
efforts on to make certain other such
sales, of which some fixed asset sales
were done in FY2016. Proceeds from
these sales have been used to pay back
debt and service loans.
The performance in FY2016 has been
adversely affected by the stressed
financial liquidity within the Company,
which was further exacerbated by some
extra-ordinary items and the delay in
securing working capital that was needed
to support the CAP. This led to a major
reduction in revenues; and the scale of
operations was not adequate to even meet
the fixed operating costs of the Company.
Consequently, there were major losses
at the EBIDTA level and cashflows were
under stress.
However, there were some positives in
this difficult year. The most promising
development during FY2016 was the
Company’s ability to grow the order book
despite all the market challenges. This
was done by specifically focusing on the
Company’s core strength and aggressively
pursuing opportunities. This has translated
into the order book increasing to
` 23,836 crore on a consolidated basis.
On excluding the Company’s exposure to
Libya, where there has been no traction for
some time, the order book grew by 24%
from ` 13,695 crore at the end of FY2015
to ` 16,991 crore at the end of FY2016.
Since the last few years, Punj Lloyd has
laid stress on contracts management
and in a focused manner made efforts
to establish legitimate claims through
the arbitration based dispute resolution
mechanism. Unfortunately, while these
efforts have resulted in booking receivables
once claims are awarded, they are yet to
transform into significant cash flows as in
most cases the customer has taken the
matter to court to delay payments. Today,
the Company has around ` 1,200 crore of
such claims in India and a large amount
of receivables in Qatar. Once encashed,
these will go a long way in repaying debt
and streamlining the balance sheet.
Punj Lloyd’s subsidiaries in Singapore have
been particularly badly affected. In fact, to
overcome a short-term financial constraint
on account of losses suffered in projects
undertaken by these ventures, Punj
Lloyd Pte Ltd (PLPL) and Sembawang
Engineers and Constructors Pte Ltd
(SEC), subsidiaries of Punj Lloyd Limited
in Singapore, filed separate applications
seeking approval of the Singapore
High Court to enter into schemes of
arrangement with their respective creditors
pursuant to the applicable provisions of the
Singapore Companies Act. The scheme
of SEC could not get requisite majority
in the meeting of creditors called as per
the direction of the Court and scheme
of PLPL was withdrawn. Punj Lloyd has
subsequently moved to Singapore High
Court to place both the subsidiaries under
judicial management.
As mentioned earlier, FY2016 saw the
Company’s consolidated financial position
coming under stress. Given the liquidity
crunch and further delays in clearance
of working capital requirements from
lenders, progress on the execution front
was adversely affected. Consequently,
revenues on a consolidated basis reduced
by 40%. With such a drop in top-line,
the Company’s consolidated net losses
increased from ` 1,154 crore in FY2015 to
` 2,194 crore in FY2016.
SECTORAL CONTRIBUTION IN THE ORDER BOOK, CONSOLIDATED (ON 31 MAR 2016)
57%PIPELINE & TANKAGE
1%ENGINEERING
9%PROCESS
23%BUILDING &
INFRASTRUCTURE
10%POWER
57%PIPELINE & TANKAGE
ENGINEERING
9%ESS
23%ILDING & RUCTURE
10%POWER
CHART F
8%OTHERS
46%PIPELINE & TANKAGE
4%PL INFRA
4%ENGINEERING
15%PROCESS
11%BUILDING &
INFRASTRUCTURE
3%OFFSHORE
9%POWER
OTHERS
46%PIPELINE & TANKAGE
4%PL INFRA
4%ERING
15%PROCESS
11%LDING & UCTURE
3%ORE
%R
CHART E
SECTORAL CONTRIBUTION TO REVENUES, CONSOLIDATED (FY2016)
26
There is some good news as well. Among
non-core businesses, the progress
in the defence and defence-related
manufacturing business was encouraging
in FY2016. The Company had invested
around ` 200 crore in a phased manner
over the last five years. The high-end
machine shop set up for components
manufacturing in Malanpur, near
Gwalior, has started getting considerable
traction and reached break-even
scale of production, servicing primarily
aerospace and energy related companies.
More importantly, it has established
good supplier relations with several
marquee clients. For a weapon systems
programme, the Company has emerged
as the provisional L1 bidder and is in the
last stages of closing out its first major
contract in such development.
A 51:49 joint venture has been formed with
Israel Weapon Industries, one of the largest
manufacturers of small arms. Once the
domestic policy on small arms is finalised,
which is expected in early FY2017, this
JV is well positioned to leverage the
opportunity.
Business VerticalsWhile the Company has capabilities of
a full EPC service provider, most of its
projects are related to engineering and
construction activities. The business is
structured according to sector-specific
verticals that service a global market. The
different verticals in this core business are:
Pipelines and Tankage
Process
Offshore
Power
Buildings and Infrastructure (including
highways, mass rapid transport systems
and railways)
These verticals are supported by
core functions including the Central
Procurement Group (CPG), Human
Resources (HR), Information Technology
(IT) and the Health, Safety and
Environment (HSE) function.
In addition to these core businesses, the
Company also has a separate engineering
business under PL Engineering (PLE), an
infrastructure developing business under
Punj Lloyd Infrastructure Limited (PLIL) and
a defence and manufacturing business,
which is today operated as a unit of Punj
Lloyd.
PLL’s sector-wise revenues in FY2016
is given in Chart E. It shows that on a
consolidated basis, pipelines and tankage
has the largest share of 46% of revenues;
followed by process with 15%; building
and infrastructure with 11%; power 9%;
engineering 4%; PL Infra 4%; offshore 3%
and others 8%.
Chart F gives the sector-wise composition
in terms of consolidated order backlog.
As the chart shows, while pipelines and
tankage remain the dominant sector with
56% share, the share of buildings and
infrastructure has increased significantly
to 23%. This has been warranted by
market conditions and Punj Lloyd’s
conscious decision to maximise its existing
credentials across the construction
industry and grow its order book.
Engineering, Procurement and Construction (EPC) Business
Historically, Punj Lloyd’s core strength has
been oil and gas pipelines and related
construction activities. While market
dynamics caused by the sharp drop in
oil prices has affected new orders in the
market, the Company has re-entered
geographies to maintain a relatively high
order book by the end of FY2016. The
sector remains the primary contributor to
revenues and orders.
Activities undertaken involve onshore
projects that include work on field
development and pipelines including
cross-country pipelines. The Company has
also gained recognition for construction
of large scale tankage and terminals,
ranging from cryogenic double walled full
containment tanks to atmospheric floating
and fixed roof storage tanks and terminals.
Punj Lloyd and its subsidiaries have a
strong track record of constructing three
LNG and LPG tank farms in India and over
300 tanks globally.
Punj Lloyd | Annual Report 2015-2016 27
The Company continued its focus on
executing existing projects. Basic details
of projects under execution across
geographies is discussed below.
SMPL Project of IOCL: Completed
the installation of 24/28 inch dia pipeline
by Horizontal Directional Drilling (HDD)
technique under various rivers near the
states of Rajasthan and Gujarat
Reliance DNEPL Project: Given
its good track record with the HDD
technique, Punj Lloyd through its
project subsidiary, secured this order
for installation of pipeline under various
rivers including the Narmada in Gujarat
as part of the Dahej Nagothane Ethane
Pipeline Project (DNPL). This is a fast
track project, which is in progress and
is being executed under challenging
conditions through ecologically sensitive
areas. It will also be the first time in India
that PLL will adopt the ‘meet in the
middle’ technique
Polysilicon Project – Train 1 and 2:
The Company has completed 90%
of the project and provided other
contractors perform, the project will be
completed by the end of FY2017
Strategic Gas Pipeline for Qatar
Petroleum: While two pipelines were
commissioned in FY2012, with the
supply line not ready, the customer has
not been willing to take this over. PAC
(Provisional Acceptance Certificate) has
been received and commercial closure
discussions are on with the client
The Spiking Project was ready for
commissioning in October 2014.
Performance test has been completed
and PAC has been obtained. Handover
of documentation and commercial
closure discussions are progressing with
the client
ADCO Tie-in Field Development
has been completed. Handover of
documentation and commercial closure
proceeding is in progress with the client
Falcon Project (Dubai) has been
completed and commissioned. Initial
acceptance has been received from the
client and project closure discussions
are in progress
Gulf Fluor: This erstwhile Simon
Carves project includes construction
of the sulphuric acid plant. The plant
was commissioned in August 2014.
Presently, however, arbitration process
is on due to what the Company believes
is an unreasonable approach of the
customer
SATORP: The port tank farm for
Saudi Aramco and Total, awarded to a
joint venture of Dayim Punj Lloyd was
commissioned in FY2014. Commercial
closure and punch list was achieved in
FY2015
SP2: Utility and export pipelines for
Saudi Aramco and Sinopec were
completed as per original project scope.
The customer has given some additional
work that is expected to be completed
by the end of 2016
28
TMGP and KTGP: These two projects
were under hold since the revolution
started in Libya in February 2011. The
current political situation remains volatile
and projects remain incomplete.
Sabah-Sarawak Pipeline: The
project achieved mechanical closure
in December 2014. There has been
a need to re-route the pipeline due
to land related issues. Re-routing
has been completed by HDD. The
pipeline is charged with gas and
commissioned. The compressor station
at Bintulu is under commissioning and is
expected to be completed by second
quarter of FY2017
Vale: Electro-mechanical work was
completed in October 2014 and Punj
Lloyd is working on financial closure
The Myanmar-China Oil and Gas
Pipeline: Punj Lloyd has been working
on 200 km of the 450 km gas line
and 180 km of the oil line. The work
is around 90% complete with the gas
pipeline being commissioned in FY2014.
For the oil pipeline, Punj Lloyd is ready
with completion but the client is not
ready with the receiving station. This
delay has led to a commercial issue,
which is being actively resolved
In addition, with concerted efforts, the
Company secured some new orders
across pipelines and tankage.
In pipelines, the new projects secured
were:
Trans Anatolian Natural Gas Pipeline
(TANAP) Project in Turkey: The scope
of work for the contract includes
459 km of TANAP Gas Pipeline in Turkey
in 50:50 Joint Venture with Limak. This
project will be built to transport natural
gas emanating from the South Caucasus
Pipeline Company (SCPC) pipeline in
Georgia and terminating into the Trans-
Adriatic Pipeline (TAP) in Greece. Punj
Lloyd’s scope of the present project (Lot
4) is the second phase of construction
from the new Eskisehir Compressor station
to the tie-in point of the Trans Adriatic
Pipeline (TAP). The scope also includes
10 block valve stations, pigging facility
(two within compressor stations, two at
pigging stations) and tie-ins with metering
stations. Major project personnel have
been approved by the client and mobilised.
Camp and pipe yard construction along
with documentation work is in progress.
ORPIC & Oman Gas Corporation
(OGC) Project in Oman: The scope
of work for the contract includes the
EPC of a 14” dia, 300 km natural gas
liquid (NGL) pipeline and a 32” dia, 301
km gas pipeline. The 14” dia pipeline,
part of ORPIC’s US$ 6.4bn Liwa Plastic
Industries Complex (LPIC), will be from
the New Fahud NGL Plant to the Steam
Cracker Unit at Sohar in Oman. Given the
increased gas demand, in order to ensure
adequate supply, the Company will be
laying 32” dia gas pipeline parallel to the
existing 32” dia Fahud – Sohar pipeline
for OGC. The pipeline is being laid to
supply gas for North Power station. The
scope of work also includes construction
of block valve and pigging stations. The
kick off meeting has been held, major
project personnel have been approved
by the client, who are being mobilised.
Engineering work has commenced at the
headquarters.
A-B Pipeline Project of Gas
Transmission Company Limited
(GTCL), a company of Petrobangla,
Government of Bangladesh: Installation
of 30” dia pipeline by HDD technique
Punj Lloyd | Annual Report 2015-2016 29
under three perennial rivers on EPC basis
as a part of Ashuganj-Bakhrabad
61 km x 30’’ dia high pressure natural
gas pipeline. In spite of geopolitical and
monsoon related challenges, the project
was mechanically completed in May 2015
and commissioned with gas flow in August
2015.
Sundarban Gas Company Limited
(SGCL) Project in Bangladesh:
Installation of 20” dia pipeline by HDD
technique under Rupsha river near Khulna
on EPC basis including construction of
valve station. The project was mechanically
completed by March 2015.
Maheskhali Anwara Gas pipeline
Project by GTCL in Cox Bazaar,
Chittagong district, Bangladesh: In the
last quarter of FY2016, Punj Lloyd was
awarded this project for construction of
30” dia pipeline using the HDD technique.
This was similar to an EPC contract.
In tankage, the new projects included:
Kuwait National Petroleum Company
(KNPC) Project: KNPC, a national oil
refining company of Kuwait, owns and
operates two fuel depots, namely Sabhan
and Ahmadi. This expansion involves
increasing the present storage capacities
of Mogas, Gasoil and Kerosene and
loading capacities at the Local Marketing
(LM) Ahmadi depot. Punj Lloyd is engaged
as the EPC contractor on LSTK basis for
the project. The scope of work includes
installation of new storage tanks, new
loading gantry with multiproduct loading
capabilities, new product pumps along
with replacement of existing terminal
automation system, new emergency
transfer pumps, new fire water pumps,
VRU Upgrade, new control room, new
substation and augmentation of other
associated utilities. Having completed
90% of the detail engineering work, major
packages have been ordered, major
subcontracts have been awarded and
construction activities are progressing at
site.
RAPID Project (Malaysia): RAPID
tank farm is a flagship EPCC project by
Petronas and a part of the Refinery and
Petrochemical Integrated Development
(RAPID) complex at Pengerang, Malaysia.
The base project scope included setting
up 42 storage tanks, 7 bullets and 2
spheres with associated piping, civil,
structural and E&I work. With substantial
detailed engineering completed, more
than 80% purchase orders placed, major
subcontracts awarded and construction
activities ongoing at site, project is
progressing well.
Ennore Project (India) for IOCL: IOCL
through its JV – IndianOil LNG Pvt.
Ltd. (IOLPL) – is setting up a 5 MMTPA
(expandable to 10-15 MMTPA) LNG
import, storage and re-gasification terminal
at Ennore in Tamil Nadu, which is expected
to be commissioned in 2018. Punj Lloyd is
engaged for the construction work for LNG
Storage Tanks System, which comprises
early site work and construction of 2 LNG
storage tanks of 180,000 m3. capacity
each, as a subcontractor to Mitsubishi
Heavy Industries Ltd (MHI), which was
awarded the entire turnkey EPCC contract.
The project is in a nascent stage. Early site
work is nearing completion and piling work
pertaining to LNG tanks is progressing.
Though piling work has suffered a delay
primarily due to the unforeseen flooding in
Chennai during Nov-Dec 2015, recovery
in subsequent activities is planned and
being implemented to keep the project on
schedule for timely completion.
Punj Lloyd has a strong track record of
successfully executing various process
units for refineries. In fact, the Company
has excelled in providing complete EPC
solutions to its customers. The Company’s
rich experience in this sector over two
decades includes execution of various
units such as Hydrogen and Hydrocracker,
Delayed Coker Unit, Sulphur Units, Motor
Spirit Quality (MSQ) upgradation, Coke
Drum work, Onshore Gas development
projects and several others that include
setting up new facilities, upgrading
existing units or expanding them. In
petrochemicals, Punj Lloyd has been a key
player in all stages of the polymerisation
process, including those associated with
the production of low density polyethylene
(LDPE) and linear low density LDPE. The
30
Company continues to progressively bid
for new projects to grow the size of this
vertical.
Considering the present oil and gas
market scenario, Punj Lloyd’s process
vertical is focussing on strategic initiatives
in acquiring new projects in association
or partnership with specialised players or
large global EPC contracts. This approach
spreads risks associated with a project
and reduces it’s overall risk exposure.
Sulphur Recovery Unit (SRU), Amine
Regeneration Unit (ARU), Sour
Water Stripper (SWS) and Offsite
Facilities that are part of EPCC-
2 package for Haldia Refinery of
IOCL: Punj Lloyd was awarded an EPC
contract worth ` 1,094 crore comprising
a 80 tons per day SRU, 260 tons per
hour ARU, 65 tons per hour SWS,
132KV switchyard along with utilities
and offsite work. The project progress
is as per the contractual schedule and
is expected to be completed by third
quarter of 2017.
Coker LPG Treating Unit and Offsite
Facilities for “RATH CHAKRA
PROJECT” Paradip Refinery: IOCL
has awarded an EPC contract worth
` 368 crore to Punj Lloyd at its Paradip
refinery on EPC basis which includes
a 165 KTPA Coker LPG Treater Unit,
Nitrogen Generation Unit, FCC Unit
modifications, Offsite and Utilities
including (but not limited to) PP flare
system, Cooling Tower for PP plant,
OSBL Pipe racks, Fire fighting system,
Laboratory Building, and Satellite
Rack Room. The project progress is
as per the contractual schedule and is
expected to be completed by the end of
third quarter 2017.
EPC for LSTK Package B, IOCL
Paradip Refinery project: IOCL has
awarded an EPC contract worth ` 1,270
crore comprising various units including
Kero Treatment Unit, Sulphur Recovery
Unit, FCC LPG Treatment Unit, FCC
Light Naphtha Treatment Unit, Alkylation
Unit, Butane Isomerisation Unit, Spent
Acid Regeneration Unit and Flue Gas
Desulphurisation Unit for the Lumpsum
Turnkey Package B of the IOCL Paradip
Refinery project. The project suffered
initial delays due to the unavailability
of work front and free issued material.
However, all the units have been
commissioned and the refinery has
been dedicated to the nation by the
Prime Minister of India on 7 February
2016. Final close out is expected by Q3
CY2016.
Sulphur Block of Residual
Upgradation Project at Manali
Refinery, Chennai: CPCL awarded an
EPC contract worth ` 353 crore for a
Sulphur Block comprising 2 x 100 TPD
Sulphur Recovery Unit including Tail Gas
Treatment Unit, 60 m3/hr Sour Water
Stripper and 250 TPH capacity Amine
Regeneration unit. There have been
some initial delays due to the revision in
engineering and we have received the
required extension of time. The project
is expected to be completed by second
quarter of CY2016.
Mechanical & Piping work for
INDMAX (FCC) & PRU of Paradip
Refinery Project: IOCL has awarded
a contract comprising mechanical work
including transportation, unloading,
erection and installation of equipment
and piping work for INDMAX (FCC) and
PRU of Paradip refinery project. We
have achieved mechanical completion
of this project and await final clearance
from client which is expected by Q2
CY2016.
Indian Strategic Petroleum Reserves
Limited (ISPRL): ISPRL has awarded
a contract involving installation and
commissioning of underground cavern
and top side facilities. The project has
achieved mechanical completion. The
client expects the crude to be available
by May 2016. Hence, commissioning
activities are to be completed by Q2
CY2016.
Shell Eastern Petroleum Pte Ltd
(SEPL): Shell awarded an EPC contract
to Punj Lloyd for a new 417 MLPA
Lube Oil Blending Plant and a 10 KTPA
Grease Manufacturing Plant. The project
progressed well in the initial phase
but has faced some issues nearing
completion. Fundamentally, there was
lack of resolution on certain change
orders and the resulting claims. Also,
given that the Singapore entity PLPL
was under financial stress and going
through proceedings for a scheme
of arrangement, the customer has
controversially terminated the contract
in October 2015. At that stage, 95% of
the work was completed and the project
was scheduled to be completed by Jan
2016. The matter has now been placed
before the dispute resolution protocol as
per the contract terms.
Reliance Jamnagar: Reliance has
awarded construction work to Punj
Lloyd worth ` 275 crore comprising UG/
AG piping work, structure erection along
with civil work. The project is under
execution and the work is expected to
be completed by Q3 CY2016.
In the aftermath of the sharp drop in oil
prices, market conditions for global oil and
gas related projects is highly subdued,
with majority projects shelved and some
progressing at a very slow pace. Under
these circumstances, Punj Lloyd has
reoriented its business strategy by focusing
on developing some specific areas where it
has created niche capabilities.
In doing so, Punj Lloyd has initiated various
tie ups or associations with potential global
EPC partners in order to secure work
32
in upcoming projects specifically for the
Middle East. This includes alliances with
Samsung Engineering and Construction,
Tecnicas Reunidas and Technip S.p.a.
Also, the process vertical has sharply
increased focus on specific project
opportunities within India. Much of these
opportunities have arisen from various
refinery upgradation or expansion work,
which have been warranted due to the
new mandatory requirements announced
by the Ministry of Petroleum and Natural
Gas to fulfil upgraded norms for emissions
and productivity by FY2020. Such
refineries include HPCL’s Visakhapatnam
Refinery, Mumbai Refinery, Bina Refinery,
Barauni Refinery, Kochi Refinery, Panipat
Refinery, Gujarat Refinery and Numaligarh
Refinery. Punj Lloyd is also looking
forward for potential petrochemical project
opportunities coming up in India.
Punj Lloyd has been providing engineering,
procurement, fabrication and installation
services of offshore wellhead and process
platforms, including topsides and jackets,
risers, submarine pipelines, underwater
cables and single buoy mooring systems in
India, South East Asia and Middle East.
As mentioned earlier, the sharp drop in oil
prices over the last two years has had a
cascading impact on the entire oil and gas
value chain. It has been particularly tough
on offshore EPC players across the world,
including Punj Lloyd.
While India still has some exploration
and production activities on in oil and
gas, the global slowdown has diverted
attention to the Indian market and
competition has intensified with many
players undercutting prices to secure
projects. Under these conditions, the
Company has made a strategic shift and
refrained from participating in low margin
bids. In FY2016, much of the activity was
focused on completing the projects in
hand. In addition, Punj Lloyd has been
taking active steps to reduce capital outlay
in the offshore business and decision to
bid on future projects leveraging its core
EPC competencies instead of capital
investments.
The update on the major projects being
executed is given below:
Gujarat State Petroleum Corporation
Limited (GSPC) awarded a contract
for submarine pipeline on lump-
sum turnkey (LSTK) contract basis
at a contract price of US$ 95.3
million (approximately ` 400 crore).
The scope of work includes 20” OD
pipeline (approx. 24.5 km), 10” OD
pipeline (approx 15 km), optic fibre
cable and onshore work. After some
initial environment related issues, the
Supreme Court gave a go ahead order
for Stage 1 of the Project. The Company
is continuing with its work and has
completed 99% of the project. The
mechanical completion of the offshore
contract and gas-in has been achieved
in May 2014. A small portion of the work
is remaining along with documentation,
which the Company expects to complete
by early Q1 FY2017. It needs stating that
Punj Lloyd has been able to successfully
execute this landmark project due to
proactive support provided by the client
in releasing money in a timely manner
and settlement of claims. This project
closure is strategically important for
the Company as a significant amount
of cash flow is further expected to be
received from the client thereafter
WO16 cluster & SB14 Pipeline
Project – in Bombay High from
ONGC: The scope included laying of
122 km of submarine pipeline, risers
and I/J tubes, modifications of existing
facilities, hook-up and testing. The
project was awarded at a contract
price of US$ 46.6 million (approximately
` 244.5 crore). It was hit by the
unfortunate accident of one of the
barges in operation, which has since
been salvaged. However, due to pipes
being lost and reordering of new line
pipes, pipe laying activity got delayed.
The project was completed in January
2016 and the facilities have been
handed over to ONGC
Composite work for laying of
pipeline (onshore and offshore) for
LPG pipeline from BPCR / HPCR
to Uran over 30 km for Bharat
Petroleum Limited (MUPL): The
project was awarded at a contract price
of ` 106 crore. Claims settlement by the
client is still pending. In the interest of
the project, the Company remobilised
resources and achieved mechanical
completion in August 2014. The facilities
have been handed over to the client.
Settlement of claims between the Client
and the Company is currently under
arbitration
Installation of three compressor
units for the Platform Compressor
station on the PTT Riser Offshore
Platform in Thailand (Contract Price
US$ 129.32 Million): Around 96%
of the project has been completed.
However, there has been substantial
delay due to some extraneous factors
in the past and non-resolution of
change order or claims by the client.
In FY2016, the Company re-initiated
discussions with the client and has
remobilised resources on the project
site for completion of remaining work,
simultaneously the claims and change
orders are being discussed. Punj Lloyd
expects to complete this project in
FY2017
New Hout Pipeline Project in
Al-Khafji, Saudi Arabia from
Al-khafji Joint Operations: The
project worth ` 314 crore (USD 57.75
Mn) is delayed due to change in laws
and regulations in the Kingdom of Saudi
Punj Lloyd | Annual Report 2015-2016 33
Arabia. The Company has submitted
change orders and claims to the client
and a number of positive discussions
have been held. During Q4 FY2016, the
client agreed to make some adjustments
in the scope of construction activities.
Punj Lloyd has already completed
a major portion of engineering and
procurement activities. The project is
expected to close by end of CY2016
B-127 cluster Pipeline Project in
Mumbai from ONGC: The project,
worth ` 730 crore, includes detailed
engineering designs, surveys,
procurement, fabrication, load-out, tie
down/sea fastening, low-out or sail out,
transportation, installation, hook-up,
pre-commissioning and commissioning
of 115.50 km rigid submarine pipelines
in nine segments, relocation of existing
single buoy mooring, installation of
new PLEM along with anchor piles and
topside modifications of four existing
platforms. During the early stages,
there were design and engineering
flaws in the contract and bid document.
After communicating this initially in
August 2013, the Company suggested
resolution of the issue through change
order as per the contract provisions,
which was rejected by ONGC. In
FY2015, due to non-settlement of
issues, the Company invoked arbitration
as per contract provisions. However,
as advised by ONGC, the Company
consented to refer the dispute to an
Outside Expert Committee (OEC)
through conciliation and requested
ONGC to appoint an OEC within 30
days. In the absence of any response
for almost five months and with the
intent of resolving the issues, the
Company once again reinitiated the
arbitration proceedings. In Q1 FY2016,
the Company proposed various
alternatives to ONGC keeping the
arbitration process under abeyance.
ONGC deliberated on the proposal
for almost eight months and in March
2016 arbitrarily terminated the contract.
Consequently, the Company was once
again left with no option but to re-initiate
the arbitration process
Heera Re-development Project,
ONGC: The Company has submitted
claims worth US$ 211.7 Mn and INR
584.6 crore to the arbitration tribunal
for settlement. The first meeting of the
arbitration panel was held on 29 January
2015 and the proceedings are currently
under process. The Company requested
the arbitration tribunal to consider
expediting the resolution by having
back-to-back hearings. The tribunal has
accepted this suggestion and finalised
hearings continuously from 12 May
2016 to 15 May 2016, followed by a
period of five days from 12 July 2016 to
16 July 2016.
The market dynamics in the power sector
in India has made Punj Lloyd replan its
business strategy in this segment. Also,
the entire business development in the
power sector for Punj Lloyd has been
calibrated, keeping in view the liquidity
crunch faced by the Company.
With the coal issue still not resolved and
financial distress of the State Electricity
Boards (SEBs) – the primary customers –
investments in thermal power generation
capacity has hit a standstill. In FY2016,
there were no tenders in the sector
barring some in Tamil Nadu and one in
Maharashtra. In UP, the Company had
secured L1 position for a thermal plant
in collaboration with Toshiba. However,
new guidelines brought in by the Ministry
of Environment and Forests (MOEF)
subsequently forced the concerned state
government to suspend the development
of the plant.
On the power distribution front, however,
there have been some positive measures.
The Ujjwal Distribution Yojna (UDAY)
scheme, which has been launched to
revive the SEBs by converting 75% debt
into bonds and funding 25% through
plan outlay, has been a positive step.
Financially revived SEBs will play a critical
role in the sector and investments on the
transmission and distribution front (T&D)
will get augmented. FY2016 has shown
34
early signals of this and Punj Lloyd has
refocused its business thrust in the power
sector on T&D related projects.
Over FY2016, Punj Lloyd secured
` 1,100 crore worth of orders in the
T&D segment.
The Company secured its first two orders
from Power Grid Corporation of India
Limited (PGCIL), which were for rural
electrification of the districts of Jajpur,
Khorda and Ganjam in Odisha under the
Rajiv Gandhi Gramin Vidyutikaran Yojna
(RGGVY). The project is worth ` 488 crore,
and includes augmentation of the existing
33/11 kV s/s, construction of
11 kV outgoing bay, construction of
new 11 kV line, LT lines, installation of
distribution transformers and service
connection to below poverty line (BPL)
consumers.
The Company also secured two further
projects worth ` 483 crore from NTPC for
rural electrification of the districts of Puri
and Koraput in Odisha. The scope of work
for these two projects includes supply
and erection for the rural electrification
work for construction or augmentation
of substations, installation of distribution
transformers and providing service
connections to BPL consumers around the
district.
The Company also secured a similar
project with the Madhya Pradesh
government. It also won its first power
project from BHEL for the civil, structural
and architectural work of the non-plant
work and raw water reservoir, roads
and drains at the 800 MW Kothagudem
Thermal Power Project in Khammam
district, Telangana.
The other area where there has been
considerable activity is renewable energy,
especially solar. However, the progress
on the ground has been slow. The space
has also brought in several players and
competition has been severe. While
margins are low, the cash cycles are short
and prudent, project evaluation has been
done on case-to-case basis to decide on
participation in this space. Punj Lloyd had,
in fact, secured a large ` 1,600 crore order
for solar plant development.
However, the Company’s present
liquidity crunch led to the the project
being foregone due to non-availability of
guarantees. Once the Corrective Action
Plan (CAP) kicks in and the cash position
improves, Punj Lloyd should be well poised
to leverage opportunities in solar power.
This is a fast emerging segment in Punj
Lloyd’s portfolio. Its share of revenues
increased from 4.5% in FY2015 to 6% in
FY2016, and for future projects reflected
in the order backlog, around 50% share
is that of buildings and infrastructure. This
is being achieved through development of
new businesses and assertive participation
in MRTS / railways, buildings, road and
utilities markets in South Asia, MENA and
South East Asia.
Among various areas of infrastructure
spending by the Government of India, the
roads segment led in terms of tenders
issued (59% of total tenders) and contracts
awarded, with an increasing shift to EPC
type of contracts. Not surprisingly, this was
the segment where Punj Lloyd managed
to secure the maximum amount of new
projects. The details of the four road
projects secured are:
Raipur-Simga Road Project: This
is an EPC highway contract worth ` 513
crore including construction of 4/6 lanes
of Raipur – Simga of NH200 from km
0+000 to km 48+580 section of Raipur
– Bilaspur (Package I) in Chhattisgarh
under NHDP IV. The proposed project
aims at improving the geometric
deficiencies at various intersections,
riding quality, journey speed and
reducing congestion of traffic on the
highway. It is scheduled for completion
in 30 months.
Simaria – Khagaria Road Project:
This EPC highway contract worth
` 567 crore involves four laning of
Simaria – Khagaria Section of NH-31
from km 206.050 to 266.282 in Bihar.
The project is scheduled for completion
in 30 months.
Talibani – Sambalpur Road Project:
This EPC highway contract worth
` 392 crore involves rehabilitation and
upgradation of 4-laning with paved
shoulder of Talebani to Sambalpur
Section (km 493.300 to km 521.825
and km 545.176 to km 567.400) of
NH-6 in the state of Odisha under
NHDP IV. The project is scheduled for
completion in 30 months.
Tallewal – Barnala Road Project:
This contract worth ` 275.99 crore
includes development to 4-lanes with
paved side shoulders of Tallewal –
Barnala section of NH-71 [New NH No.
52] from existing km 114.000 of NH-71
to km 136.070 including construction
of Barnala by-pass from existing km
136.070 of NH-71 to existing km
149.000 of NH- 64 in Punjab under
NHDP IV. The project has been awarded
to Punj Lloyd – VRC Constructions JV
(where PLL’s share is 30%). The project
construction period is 24 months.
In addition to these road works, new
projects were secured in buildings. These
include:
Koderma Township Project - The
work involves construction of balance
residential and non-residential buildings
for Koderma Thermal Power Station
township of Damodar Valley Corporation
Punj Lloyd | Annual Report 2015-2016 35
(DVC) including internal electrical, water
supply and sanitation. The contract is
worth ` 207 crore, and the construction
period is 18 months.
While focussing on new business
development, the Company also enhanced
its capabilities and stressed on execution.
Two projects were commissioned in
FY2016. Both in the road sector including:
AS – 4 Road Project: Widening and
strengthening of the existing 2-lane to
4-lane of Guwahati Nalbari Section of
NH-31.
BMRCL Reach II: Construction of three
elevated metro stations (Magadi Road,
Deepanjali Nagar and Mysore Road),
including viaduct portion of track within
stations.
The following projects are under various
stages of execution:
AH 48 Road Project: This EPC
highway contract worth ` 666 crore is
for over 90 km of the Asian Highway
(AH) Network, a cooperative project for
improving transport facilities throughout
32 nations and providing road links to
Europe. Punj Lloyd’s scope of work
comprises rehabilitation and upgrading
to 2/4-lane from the Bhutan border at
Pasakha to the Bangladesh border at
Changrabandha comprising Jaigaon,
Hasimara, Dhupguri section and
Mainaguri-Changrabandha section. The
project is under execution although there
have been delays due to operational
issues like land acquisition, clearances
and governance.
Balance Work of 4-Laning of the
Gorakhpur-Gopalganj Section of
NH-28 in Bihar worth ` 542 crore from
NHAI.
Sikkim Airport Project: Construction
of a greenfield airport in Pakyong,
Sikkim, including earthwork in filling,
building the world’s highest reinforced
retaining wall, drainage systems
including culverts and aerodrome
pavements. Geological surprises,
unfavourable climatic conditions and
stoppage of work by locals due to
compensation from state administration
and Airports Authority of India (AAI)
affected the progress of this project.
Commissioning is planned for middle of
CY2017.
Tata Capitol Heights: The project
includes civil, structural, waterproofing
and auxiliary work for construction of an
integrated residential and retail complex
called Capitol Heights in Nagpur for
TRIF. The project is nearing completion
and expected to be handed over by the
end of FY2017.
Anpara Railway Project: Earthwork
in formation, ground improvement,
construction of bridge, P-Way work,
workshop building, S&T, electrical and
other miscellaneous work in connection
with augmentation of MGR system and
railway siding (Anpara D thermal power
Punj Lloyd | Annual Report 2015-2016 37
plant 2x500 MW). This project is in its
final stage of completion.
AIIMS Building Project in Raipur:
Construction of medical college and
hostel complex including project
planning, construction of civil work
including finishing, electrification,
plumbing and all building services for the
Ministry of Health and Family Welfare.
The project has been delayed due to
non-availability of key resources from the
client’s side.
Delhi Police Housing: Primarily
entails development, operation and
maintenance of the residential zone
of over 5,000 units (approximately
40 lakh square feet), along with utility
facilities such as sewerage and water
treatment. It also includes development
and commercial operations of the
non-residential infrastructure such
as schools, healthcare, convenience
shopping, as per the norms laid down in
the Delhi Master Plan 2021. This project
has not yet commenced as there were
environmental issues that affected the
financial closure for the developer.
Operation and maintenance work for
Belgaum Maharashtra Road Project
and Khagaria Purnea Road Project.
Going forward, the Company intends
to aggressively pursue business in this
vertical to build a strong order book. Apart
from roads and specific buildings, the
thrust is on railways, water management
and projects related to inland waterways.
Other Businesses
Punj Lloyd is among the first few
companies to be granted defence
manufacturing licences after the Indian
defence sector was liberalised by the
Government of India to enable private
sector participation. The Company
received the first licencse for manufacture
of guns, rockets, missiles and artillery
systems in 2007, and presently holds
seven defence licences. It is one of the first
private companies to set up a dedicated
defence manufacturing plant in 2012 with
state of the art technology for producing
high precision defence equipment.
India is the world’s longest arms importer
in the world, with 75% of its total arms
purchase being imported. Estimates
suggest that over the next five years,
India will spend ` 2.4 lakh crore on
importing arms. The Government
has taken a conscious decision to
increase the proportion of private sector
suppliers and local content in the total
arms procurement. With this view,
the Government of India has initiated
the process of implementing major
reform measures in defence purchase
mechanisms adopted today. With ‘Make
in India’, the companies that have already
set up capacities will be the first to gain,
as new entrants will take at least five
years to build the requisite capability.
The Government of India is encouraging
India’s private sector to manufacture
weapon systems and has permitted FDI
of up to 49% under the automatic route.
The defence procurement rules are also
being amended to introduce categories
that are specific to Indian companies. The
government is also encouraging R&D in
this sector and is funding up to 80% of the
cost for the development. The systems
being developed through this route will
be procured on guaranteed basis. While
the progress has been slow, once an
inflection point is reached, opportunities
will significantly increase.
Punj Lloyd is well positioned to leverage
this opportunity. Based on the capabilities
developed, it has received more than 10
request for proposals (RFPs) and has
already supplied complete products that
have successfully cleared field evaluation
by the user. The Company’s focus in
defence includes land systems, small
arms, aerospace and homeland security.
In land systems, the developments are in
air defence and artillery. The Company has
been declared provisional L1 for the ZU 23
air defence gun upgrading programme. Its
upgrade system went through elaborate
testing processes and has cleared all tests.
In air defence, Punj Lloyd’s competitive
advantage stems from the specific
infrastructure created for manufacture
of guns (less barrels), its integration
and testing capability, experience of
manufacturing and supply of critical gun
components to Ordnance Factory Board
38
(OFB) and collaboration with the most
renowned gun manufacturer as technology
partner.
For artillery, Punj Lloyd is one of the four
companies given the 130mm howitzer gun
for up-grading to 155mm. The prototype
has been developed and the field trials are
going on. For this, Punj Lloyd is absorbing
critical technology for manufacture
of barrel, muzzle brake, breech with
obturation, and up to 75% of the gun will
be indigenously manufactured.
In addition to these programmes, Punj
Lloyd has a strong relationship with OFB.
Eight major components out of the eleven
given to the private sector for Dhanush (the
indigenised gun) and the loading device and
loading system for both the 155 X 45 OFB
guns are being manufactured by Punj Lloyd.
For small arms, the Company has forged
an alliance with IWI, a reputed Israeli based
small arms manufacturer. IWI has already
supplied guns to forces in India and have
major programmes in which their guns are
undergoing trials. The JV will manufacture
components in the first phase for export
to Israel and make the full gun in Phase II
for supply to the defence and homeland
security forces.
In aerospace, Punj Lloyd has been
servicing major clients including global
OEMs by supplying components. Among
domestic players, it has supplied to
Hindustan Aeronautics Limited (HAL). The
type of products include upper and lower
tank panels for the Sukhoi 30, engines, jigs
and fixtures to manufacture the fuselage
of the Tejas, and inner and outer shaft
for the engine, gear box outer casing for
HAL helicopters. It has exported to global
players like SAAB. In the last few years,
the component manufacturing activities
have been extended beyond defence to
the capital goods sector. This has helped
generate capabilities and cash flows for
the Company to make the manufacturing
financially viable on a stand-alone basis
even as major defence programmes take
their time to kick in. This includes supplies
to global players in the energy sector and
marine applications.
Homeland Security is likely to be one of the
most important sectors going forward due
to the growing importance of cross-border
infiltration and security concerns in our
border areas with neighbouring countries.
Punj Lloyd is one of the two companies
that have been shortlisted for procurement
of container scanners. In fact, Punj Lloyd
is the first private company in India to get
NOC from AERB to get the technology into
the country.
The Company forayed into asset
development and ownership in 2010
through Punj Lloyd Infrastructure Limited
(PLIL). The aim was to go up the value
chain, leverage the core EPC strength
of the group and create a differentiated
proposition in the market. This was in line
with the trend for greater private sector
participation in infrastructure development
especially in India and seen as a mode to
grow the order book.
However, in the last few years, given the
slowdown in the sector and the severe
liquidity crunch, private sector infrastructure
development has been adversely affected.
PLIL, however, had the advantage of
having tread a cautious path and had
focused on very selective projects whose
capital outlays were not substantive and
risk profiles were relatively better. That has
helped the projects under development
slowly generate value, but there has been
less scope for further infusion of capital to
increase the asset book.
During FY2016, PLIL continued to focus
on executing past projects in FY2016 and
bid very selectively for new projects. The
projects in the portfolio are:
Three solar PV projects of 10 MW
capacity each in the state of
Uttarakhand at an average tariff of
` 5.82/kWh. The Uttarakhand Power
Corporation Limited, an ‘A’ rated entity,
is the counterpart for procurement
of power. The Company expects
to commission these projects by
October 2016. This win continues to
demonstrate PLIL’s capability to win
projects at tariffs which are better than
the industry averages resulting in higher
economic returns
PLIL successfully commissioned, ahead
of time, its second 21 MW solar power
project in Punjab awarded under the
Phase II of the state’s solar policy. This
has reinforced PLIL’s track record in
execution of projects ahead of schedule.
PLIL has a portfolio of six solar PV
project with a cumulative capacity of
77 MW. Out of this, three plants with
cumulative capacity of 47 MW have
already been commissioned and another
30 MW are under development.
The Khagaria Purnea Highway project
was among the very few road projects
undertaken under the PPP (BOT) mode
to receive bonus for early completion.
In addition to the bonus, the project has
also received four semi-annual annuities
on time
PL Engineering (PLE) is a full spectrum
design and engineering company that
provides services in energy, product and
infrastructure sectors. The company
was incorporated with a view to develop
Punj Lloyd | Annual Report 2015-2016 39
a strong foundation in world class
engineering. The creation of a separate
Company was primarily aimed to build
capabilities in engineering that could
compete in the external market and
consequently establish strong credentials
in the domain. PLE operates through its
various group entities and a network of
delivery centres in India and abroad that
leverages the benefits of client facing
technology offices with cost effective and
efficient back-end delivery from India.
With the meltdown in the global oil and
gas sector, FY2016 was a very challenging
year for PLE. The Company witnessed
a slight reduction in turnover. This is a
reflection of the internal restructuring and
resource optimisation activities being
undertaken within the Company.
The thrust during FY2016 was to leverage
certain core competencies to diversify
into new technologies and sectors of
service provision. On this front, PLE did get
some early success. For example, Simon
Carves is specialised in high pressure, high
temperature applications for the LDPE
segment. This capability was utilised in
evolving woodchip feedstock technology.
In addition, PLE has also created a new
building vertical where it is focusing initially
on engineering support for mechanical,
electrical and plumbing applications. Here
too, it has secured some new orders.
PLE continued to strengthen its position in
the UAE as-built market and secured four
more orders from GASCO. It continued
to get some repeat orders from existing
clients. During FY2016, PLE secured
` 107 crore worth of new orders with the
major projects including:
IOCL Coker LPG Treater Unit, India
ORPIC NGL Pipeline, Oman
Bahia Blanca LDPE FEED, Argentina
Tricoya Woodchip Plant, UK
Argent Wood Fluor Project, UK
Accsys Oak Tree Project, UK
There has been considerable emphasis
on enhancing excellence in execution
including productivity improvements.
The operations in the Middle-East
were consolidated and moved to an
independent office. PLE continued to
successfully close out existing projects.
Some of the major projects completed in
FY2016 were:
Shell Marina LOBP and GMP Plant,
Singapore
ADCO Jebel Dhanna FEED Studies,
UAE
CPCL SRU, India
Formosa LDPE FEED, US
Bahia Blanca FEED, Argentina
Tricoya Woodchip Plant, UK
FY2017 will continue to be a challenging
year for PLE. But it has taken steps to
consolidate itself during this time and
emerge stronger. The thrust on productivity
improvement and resource optimisation
is continuing. It has made efforts to
penetrate the growing market in Iran
and expand its presence in the Middle-
East. Efforts continue towards complete
business transformation by restructuring
the organisation and adding high growth
segments and services to the portfolio.
The blueprint of this transformation has
been laid out and PLE is in the process of
executing it.
Operations: Support ServicesRecognising the key role
support functions in Punj
Lloyd’s ability to deliver
projects, there has been a
renewed focus on certain
functional domains as
part of the Company’s
Corrective Action Plan
(CAP). The emphasis has been
to make these functions true
business enablers to establish necessary
improvements in decision making,
corrective plans and process controls
across the entire business operations.
Developments in some of the major
support functions are discussed in this
section.
While the base foundations for the
transformation of the procurement as a
major value driver through the Central
Procurement Group (CPG) with strong
processes and controls was undertaken
in FY2015, the operations were stabilised
during FY2016. This involved firmly
establishing systems and processes
across the sites and businesses. A
significant achievement in terms of
processes during FY2016 was the
strict compliance of policies related to
processing of all purchase orders (PO) as
per defined hierarchy and monitoring of
timeline for each activity.
Sanitisation was undertaken for POs. As a
principle, all open POs over two years old
with no transaction since last six months
have been closed.
The in-house developed Real Time
Material Management System (RTMMS)
implemented for Petronas RAPID-
Package-22 project. This is an ERP based
40
material management system that
controls all materials and equipment from
engineering to material consumption
including the reconciliation phase. With the
success of this system in this first project,
Punj Lloyd will extend this to new projects.
Reverse auctions have been firmly
established as the methodology of price
setting in the procurement process for all
expenses above ` 5 lakh. The Company is
reaping the benefit of price discovery and
transparency associated with this tool.
Recognising the criticality of timely delivery
of goods and services in construction
projects, the CPG at Punj Lloyd has
established processes for close monitoring
of delivery schedule and its compliance.
While this initiative has shown early positive
results, there is sufficient scope for further
enhancing efficiencies in this process.
The procurement process at Punj Lloyd
is influenced by parameters related to
taxation and logistics for national and
international projects. The CPG has
played a proactive role in utilising specific
authorisations or licences for procurement
of domestic and imported goods to
minimise costs to the Company. This has
been supplemented by activities related
to liaising with the statutory authorities
for interpretation of relevant law, rules
and regulation for generating maximum
benefits and savings. Continuous efforts at
resolving many long pending legal matters
on clearance or cancellation of legal
obligations at different custom houses
or ports, including those with different
statutory authorities, have started paying
dividends.
To enhance the skills of buyers and to
understand different aspects of projects,
regular knowledge sharing sessions were
organised and specialists on the subject
contributed to define expectations from
procurement. Mandatory learning and
development training sessions were held
for buyers.
The CPG has championed and adopted
the bottom-up costing approach that
provides greater level of granularity in the
procurement process with micro level
identification and valuation of each element
of cost of a product, material or service.
This backed up with packaged engineered
costs and a transparent process has
helped enhance the negotiating power of
the buyers.
As a service sector organisation, people
play a key role in the development of
Punj Lloyd. Given the present business
conditions, the role of HR management
has become even more critical as the
Company works on striking a balance
between right sizing operations and
encouraging, grooming and developing
internal talent to create a differentiated
positioning in the market. To execute this,
the Company took many steps in FY2016.
It had participated in the ‘Great Place to
Work’ Survey in FY2015. After analysing
the results of the survey and mapping
internal processes with best practices, a
four point engagement model was drawn
up for implementation. This included
setting up of an Innovation Council – a
forum for generating and executing
new ideas from amongst employees;
conducting quarterly townhalls with
employees at the corporate office and at
sites; effective usage of the new reward
and recognition scheme, which rewards
work done beyond what is prescribed; and
one-on-one sessions being conducted by
managers to make employees feel valued.
These efforts have borne fruit, which is
reflected by the improvement in points
seen in the ‘Great Place to Work’ (GPTW)
Survey conducted in FY2016.
Besides continuing with rigorous training
programmes for campus hires, a panel of
internal trainers was created to train the
employees. This initiative helped hone the
skills of both trainers and trainees. Some of
the trainings that were conducted included
negotiation skills, Oracle user trainings,
time management and Excel workshops.
For executive coaching, a growth
consultant was hired to train the leadership
and ensure that the organisation pursues
the right growth path. A couple of leaders
have been nominated for the Infrastructure
Management Program at ISB. This
course enables a 360 degree view of the
business including contract management,
negotiations, policies and planning.
Punj Lloyd | Annual Report 2015-2016 41
In the last couple of years, Punj Lloyd
has taken several steps to establish
transparent and clear people processes
especially around performance appraisal,
promotions and salary increments. There
were also initiatives on gender sensitisation
in the workplace including focused group
discussions once in two months, poster
competitions, quarterly women’s meet,
awareness sessions by an external expert
and celebration of World Women’s day.
Steps were taken to follow the guidelines
as defined in the Prevention of Sexual
Harassment policy and the Company
established an Internal Complaints
Committee to deal with any complaints
related to sexual harassment.
With the Middle-East and South-East
Asia market slowing down in terms of
infrastructure projects and India picking
up pace in this segment, Punj Lloyd is
consolidating its business and manpower
with focus on India. Overseas regional
offices are being reduced and manpower
is being moved from overseas locations to
India to strengthen the India business.
Continuous efforts are on for rationalising
manpower utilisation. This includes
implementing policies to standardise
and quantify costs for various employee
benefits and streamlining costs of the
corporate functions.
Punj Lloyd continues to emphasise on
using IT tools to establish processes and
controls within the Company. This is being
done with minimal new investments and
focus on in-house development on existing
platforms.
One of the major projects that was
undertaken in FY2016 was to set up
a Real Time Materials Management
System (RTMMS) for the RAPID project.
This system was developed with the
purpose of tracking material across the
complete process flow from engineering
to consumption. The salient features of
the system are loading of Material Take Off
(MTO), automated conversion of the MTO
into Purchase Requisition, conversion of
purchase requisition to Purchase Order
(PO), tracking each of the PO line items
in expediting the module along with the
ability to inspect material at vendor site,
track vendor’s sub-contract, vendor’s
manufacturing schedule and also have
logistics prepare Shipping Release Notes
(SHRN) for material ready for shipments
from the vendor’s place. In addition, the
system allowed for Daily Material Receipts
(DMR) at site, Quality Inspection, Materials
Issue Voucher (MIV) to match with the
MTO and the drawings along with ability
to track fabricated items. Various reports
– summary and detailed – could be
generated in each of the modules. Having
seen the success of this development on
a specific project, Punj Lloyd has plans
to implement this system for all its new
projects.
The development of the vendor portal was
completed in FY2016. This portal allows
for vendors to register themselves on the
Punj Lloyd website, and are then linked to
automated workflow based approvals from
various internal agencies (tax department,
finance, personnel etc.) depending on the
type of vendor. This system has simplified
the vendor registration process.
RAMCO HCM (Human Capital
Management) on the cloud was chosen
as the HCM solution for the group.
Its implementation is under way. Punj
Lloyd has completed the Business
Process Reengineering, configured the
Human Resources and Payroll process
and completed the process of user
acceptance. This system will go live in
FY2017.
The internal IT team also developed a
system for tracking Non Conformities (NC)
and observations for Quality Department
with automated workflows between auditor
and auditee.
Timely supply of IT hardware and software
for new projects by reusing available
resources has been one of the significant
achievements of this year. IT also
contributed to the Company’s cost saving
initiatives by optimising on mobility plans,
data plans, and simple housekeeping
activities like both side printing, as an
example.
Multiple training programmes on Oracle
and Google features including Hangouts
(video conferencing) and collaboration
were also undertaken during FY2016.
IT will continue to play a much greater role
in the Company as a business enabler and
we look forward to re-implementation of
Oracle Release 12 to meet dynamic needs
of the business.
Health, Safety and Environment (HSE)Across operations and project sites, Punj
Lloyd has always laid emphasis on HSE
and made efforts to evolve this as a critical
brand differentiator for the Company in the
marketplace.
In terms of specific activities during
FY2016, Punj Lloyd has focused on the
following:
Zero Tolerance (ZETO) Policy – To
establish a system where Punj Lloyd will
imbibe a culture of ‘Zero Tolerance’ in all
HSE matters
MSS Online Application – The purpose
of this application is effective compilation
of HSE statistics with improved
accuracy, transparency in an eco-
friendly system
HSE Evaluation of Sub-Contractor – To
describe the criteria of sub-contractor
42
HSE evaluation during the early stage of
a contract, prior to award
Some of the key achievements during the
year in terms of safety include:
Polysilicon Plant Project, Qatar –
21.5 million LTI Free Man-hours. This is
the highest ever safe million man-hours
certificate received by any project in
Punj Lloyd till date
LSTK-B, Project Paradip, India –
18 million LTI Free Man-hours
RIL J3, Project Jamnagar, India –
16 million LTI Free Man-hours
KSK Power, Project Chhattisgarh, India
– 11 million LTI Free Man-hours
Efforts on the HSE front have been
recognised by several clients and in
FY2016, the Company has secured
the following awards in this area. These
include:
Shell Marina Project, Singapore –
received SHARP award, which is a
national level recognition by Singapore.
YASREF SP2 & MC7 Project, Saudi
Arabia – Golden Banner Award for Good
HSE Practices
NPCIL KAPP 3&4 Piping package
Kakrapar, India – Best Housekeeping
and Best Safe Contractor (Runner-up)
Award
NPCIL RAPP 7&8 Rajasthan, India –
Housekeeping Award 2015 (Runner-up).
KSK Power, Project Chhattisgarh, India
– received Annual Safety Award for
2014 from client SEPCO. PLL has been
honored with fifth consecutive Annual
Safety Award for outstanding HSE
performance among all the contractors
Financial Highlights Table 1 gives the abridged standalone
and consolidated profit and loss
account of the Company.
As discussed in earlier sections, Punj Lloyd
is going through a difficult financial phase.
On the one hand, there is a need to grow
revenues and generate sufficient cash to
service and repay debt. On the other hand,
it requires a strong financial position to
generate bank guarantees and working
capital to execute projects. Unfortunately,
the base liquidity within the company’s
system has been under severe stress.
This has warranted a lot of effort in terms
of meticulous financial planning, effective
cash management and hard negotiations
with financial institutions to support even
the lower level of business execution
achieved in FY2016. Such business
continuity is essential to maintain customer
relationships and take the Company
forward. Finally, through concerted efforts,
the Company managed to secure working
capital support for CAP during the last
leg of FY2016. This has started helping
the Company improve its orders under
execution. The Company is still under a
difficult phase in terms of liquidity but the
good growth in order book provides a
platform for better revenue generation in
FY2017.
RisksPunj Lloyd has to deal with several
stakeholders and is exposed to
uncertainties over a period of time. Most
of these translate into identifiable risks that
are inherent over a construction project’s
life cycle.
The Company needs to resize and work
to increase cash flow and profitability.
It needs to learn from its past projects
and implement such learning in all
future projects. To fulfil this objective in
the present hyper-competitive market
environment, Punj Lloyd has to strike a
very fine balance between attempting
to leverage opportunities and exposing
the Company to greater levels of risk.
Under these conditions, it is extremely
important to create value by delivering
projects on time and in line with customer
expectations.
Risk management at Punj Lloyd is done at
two levels. First, at a strategic level, there
is a macro perspective of risks, charted out
to define business strategy and influence.
Second, it is an inherent and integral part
of operations at Punj Lloyd, which governs
the execution of each individual project.
At an organisation level, there are clearly
defined roles for the senior management in
TABLE 1: ABRIDGED PROFIT AND LOSS ACCOUNT (` crore)
Standalone Consolidated
FY2016 FY2015 FY2016 FY2015
Revenue 3,348 4,882 4,261 7,090
Other Incomes 147 680 154 694
TOTAL INCOME 3,495 5,562 4,415 7,784
Cost of Sales (3,987) (5,001) (5,154) (7,533)
EBIDTA (492) 561 (739) 251
EBIDTA % -14% 10% -17% 3%
Finance cost (905) (860) (1,070) (1,002)
Depreciation (234) (314) (385) (470)
Profit/(Loss) Before Tax (1,631) (613) (2,194) (1,221)
Tax (19) 106 0 67
Loss After Tax (1,650) (507) (2,194) (1,154)
Punj Lloyd | Annual Report 2015-2016 43
terms of timely identification, mitigation and
management of risks.
There are risk management teams that are
responsible for managing and reporting of
risks to senior management. Each project
goes through a detailed risk evaluation
and the identified risks are tracked
through three stages of project lifecycle:
the sales decision process, the bidding
and estimation processes, and project
execution. Operational risks are managed
through a risk register and risk manual.
The major external risks the Company
is continuing to face is liquidity. Faced
with tough financial conditions, most
customers, including government players,
are not making timely payments. Several
contractual issues are getting dragged
into arbitration or judicial intervention,
leading to a significant increase in claims.
Further, there are inordinate delays in
claims settlements, which are locking the
Company’s capital in large chunks.
Internally, Punj Lloyd has been extending
all its efforts to adopt a project delivery
model that is as light as possible, in terms
of capital intensity, with an effort to self-
finance projects through efficient cash
management. Special emphasis is being
laid on improving contract management
and dealing with claims.
Having taken on debt to service growth,
Punj Lloyd’s balance sheet remains
leveraged. This has led to a series of
obligations for pay-outs to banks and
financial institutions, needing to be
continuously met, which is difficult in a
market with liquidity crunch. The risks
associated with any default to such pay-
outs are significant.
Being in the service industry, Punj Lloyd’s
business faces risks in terms of loss of
brand value. Strong relationships based
on good delivery can be affected by any
major catastrophe in a project, especially
involving danger to life. The Company has
reinforced its HSE practices to manage
this risk.
In addition, inability to meet financial
obligations may affect the Company’s
ability to finance its operations, which can
have a major impact on the brand value
attributed by customers, even leading to
blacklisting.
Even as the global economy slowly
recovers from the prolonged downturn,
large ticket infrastructure spends will
take time. Consequently, demand for
construction service remains muted. And
in pockets where there is demand, one
finds stiff competition from players trying
to get most of a shrinking pie. Therefore,
companies are exposed to significant
market risks in terms of not getting orders
or securing these at such prices as may
put unsustainable pressure on margins.
To secure business in today’s environment,
the Company is entering into uncharted
markets in Africa, Middle-East and Latin
America. Many of these geographies
have an inherent risk of socio-political
uncertainty. While Punj Lloyd always
evaluates such risks, it has to take certain
calculated strategic decisions as many of
these are politically volatile markets.
Internal Controls and their Adequacy The Company has a proper and adequate
system of internal controls, commensurate
with its size and business operations to
ensure the following;
Timely and accurate financial reporting
in accordance with applicable
accounting standards;
Optimum utilisation and safety of assets;
Compliance with applicable laws,
regulations, listing agreements and
management policies; and
An effective management information
system and reviews of other systems.
During FY2015, the Company outsourced
the internal audit function to KPMG, which
is a leading audit and accounting firm. This
process of outsourcing ensures greater
independence, in executing and reporting
of internal audit, to the Audit Committee of
the Board.
Corporate Social Responsibility (CSR)Punj Lloyd has always focused on being
a good corporate citizen. A case in point
is the integrated developmental work
across education, health, women welfare
and community development at Sitamarhi.
On a smaller scale, the CSR work around
the BAP district of Rajasthan around the
Company’s solar project highlights the
commitment that the Company has to
develop communities around its projects
even with lower financial outflows but with
greater efforts in terms of ideation and time
deployment.
For statutory requirement, the Company
has a Board-level committee that
supervises its CSR activities. Given
the stressed financial condition of the
business, the Company was not obligated
to make any contributions towards CSR.
However, the Company continued to
devote management time to some CSR
initiatives and made an impact with
minimum financial outlays.
These initiatives were primarily in the
vicinity of PLIL’s projects in Punjab and
Rajasthan.
44
PUNJAB (Phase 1): Under the first
phase, PLIL made a contribution through
its SPV - PL Surya Urja Ltd (September
2015 - February 2016) that supported
small scale CSR activities in the villages,
Gamiwala and Hakamwala. The activities
included installation of RO+water coolers
in government schools and one at a bus
stop for use by the local community,
establishing two libraries, providing books
in government schools, and renovation
of anganwadi centers in both villages. A
basketball court was also constructed
in the Government Senior Secondary
School, Hakamwala, and sports groups
were formed in two schools, where sports
material was also provided. Awareness
camps on drug de-addiction, health and
‘Beti Bachao’ were also conducted.
PUNJAB (Phase 2): In this phase, CSR
activities were initiated for the period
April - September 2016 through the
SPVs: PL Sunshine Ltd and PL Surya Urja
Ltd. Activities are being carried out at
the two villages where work was done in
Phase 1. This includes setting up libraries
and providing books in two government
schools, setting up book racks in primary
school in Hakamwala, renovation and
modernisation of a school library in
primary schools in both villages, providing
musical instruments in the high school in
Hakamwala, providing education material
(e.g. school bags, stationery item) in
primary school of both villages, installation
of water coolers at two Gurudwaras, tree
plantation in both villages and setting
up a community library and information
centre (includes providing books and daily
newspaper) in both villages.
RAJASTHAN: For the period March
2016-May 2016, CSR activity in Rajasthan
was carried out through the SPV, Punj
Lloyd Solar Power Ltd. The activities were
focused on villages: Gunget ka Magra,
Paneri Naadi ki Dhani and Mahadev Pura
of BAP block. These included construction
of three common toilets and one toilet for
girls in the government school, building
three taankas, providing three sewing
machines, and soil testing for agricultural
land in all three villages.
Punj Lloyd | Annual Report 2015-2016 45
OutlookThe entire construction industry is going
through a phase of consolidation and
needs to overcome difficult financial
situations and challenges related to
debt. There are green shoots in the
infrastructure sector like development in
highways, waterways, water distribution
and energy distribution, which offers
opportunities in India. Globally, the oil
related construction work has been
affected by reduction in oil prices and this
is expected to continue in FY2017. The
Company’s focus going ahead will be on
greater proportion of projects in India and
non-oil related businesses. The efforts on
cost optimisation and process efficiency
improvement will continue.
PLL has successfully grown its order
book and is better positioned to generate
revenues and iron out its financial issues
over FY2017. The challenge during the
next financial year will be on providing
adequate liquidity to the projects and
timely execution. One expects some
monetisation of claims and non-core
assets to support debt reduction and cash
generation. The quantum of business is in
place for a gradual revival and emphasis
will be on execution.
Cautionary StatementThe management of Punj Lloyd has prepared and is responsible for the financial statements that appear in this report. These are in conformity with accounting
principles generally accepted in India and, therefore, include amounts based on informed judgments and estimates. Statements in this Management Discussion
and Analysis describing the Company’s objectives, projections, estimates and expectations may be ‘forward looking statements’ within the meaning of applicable
laws and regulations. These have been based on current expectations and projections about future events. Wherever possible, the management has tried to
identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expect’, ‘project’, ‘intend’, ‘plan’, ‘believe’ and words of similar substance in connection
with any discussion of future performance. Such statements, however, involve known and unknown risks, significant changes in political and economic environment
in India or key markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs and may cause actual results to differ
materially. The management cannot guarantee that these forward-looking statements will be realised, although it believes that it has been prudent in making these
assumptions. The management undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events
or otherwise.
Directors' Report46
Directors’ Report
Your Directors are pleased to present the Twenty Eighth Annual Report and the audited accounts of Punj Lloyd Limited (“the Company”) for the financial year ended March 31, 2016:
Financial HighlightsThe financial performance of the Company, for the year ended March 31, 2016 is summarized below: (` Crores)
Particulars 2015-16 2014-15
Total revenue 3,494.45 5,688.67
Earnings before interest (finance costs), tax, depreciation and amortisation (EBIDTA) (492.42) 560.77
Less: Finance costs 904.74 859.54
Profit/ (Loss) before tax, depreciation and amortisation (1,397.16) (298.77)
Less: Depreciation and amortisation expenses 233.93 313.74
Profit/ (Loss) before tax (PBT) (1,631.09) (612.51)
Less: Tax expenses (net of deferred tax effect and minimum alternate tax credit entitlement/ written off (net)) 18.42 (105.85)
Profit/ (Loss) after taxation (PAT) (1,649.51) (506.66)
Add: Surplus brought forward 430.26 962.33
Less: Adjustment relating to depreciation on fixed asset (Pursuant to enactment of Schedule II to the Companies Act, 2013) - 25.41
Surplus/(defict) available for appropriation (1,219.25) 430.26
Less: Appropriations - -
Net surplus/(defict) carried to balance sheet (1,219.25) 430.26
DividendTo conserve the cash resources, your Directors have not recommended any dividend on the equity shares for the financial year ended March 31, 2016.
Operations ReviewThe Company continues to operate as an EPC conglomerate, servicing emerging markets in India, South Asia, Middle East, Africa, Central Asia and South East Asia. Market conditions remained difficult in FY 2016. With sharp decline in oil prices, Punj Lloyd’s principle segment – oil and gas related construction projects – saw a dramatic slowdown in activities. Globally, other infrastructure spends were affected by a general economic slowdown. While conditions were better in India and there were some positive signals of revival in the infrastructure development industry, there continued to be liquidity crunch and legacy issues. In this difficult environment, to its credit, Punj Lloyd was successful in growing the order book from ` 21,152 crore as on March 31, 2015 to ` 23,836 crore as on March 31, 2016 at consolidated level.
However, execution was adversely affected on account of stressed financial liquidity within the Company, low order backlog in the beginning of the financial year and delay in award or commencement of many of the projects secured. Although the Company had evolved a Corrective Action Plan (CAP) along with its lenders in the previous financial year, delay in securing working capital that was needed to support the CAP further accentuated the situation. This has led to a major reduction in revenues and
the scale of operations was not adequate to meet the fixed
operating costs of the Company. Revenues decreased by 31%
to ` 3,348 crore and the Company reported net losses of ` 1,650
crore.
The Company continues to focus on internal efficiencies and
developing a leaner organisation. Efforts are also on to monetize
non core assets and at establishing and encashing legitimate
claims from clients that have arisen due to unforeseen issues in
past execution.
Business Review
The Management Discussion and Analysis Section of the Annual
Report presents a detailed business review of the Company.
Health, Safety and Environment (HSE)
Across operations and project site, the Company has always
laid emphasis on HSE and made efforts to evolve this as a
critical brand differentiator for the Company in the market place.
A detailed note on the HSE practices and initiatives by the
Company is included in Management Discussion and Analysis
Section of the Annual Report.
Directors and Key Managerial Personnel
Mr. Atul Punj was re-designated as the Chairman and Managing
Director of the Company with effect from May 27, 2016.
Punj Lloyd | Annual Report 2015-2016 47
Directors’ Report
Mr. Shiv Punj was appointed as an Additional Director of the
Company with effect from March 25, 2016 to hold office upto the
AGM. Appropriate resolution seeking your approval for appointment
of Mr. Shiv Punj as a Director of the Company, liable to retire by
rotation, forms part of the notice calling the ensuing Annual General
Meeting (“the AGM”).
Mr. Shiv Punj was also appointed as Whole Time Director by the
Board of Directors of the Company for a period of five years with
effect from March 25, 2016. Appropriate resolution seeking your
approval for the above appointment and payment of remuneration
to him forms part of the notice calling the AGM.
Mr. Uday Walia, Mr. Rajat Khare and Mr. Shravan Sampath were
appointed as Additional Directors in the capacity of Independent
Directors of the Company with effect from September 25, 2015,
May 20, 2016 and May 27, 2016, respectively, to hold office
upto the AGM. Appropriate resolutions seeking your approval for
appointment of Mr. Uday Walia, Mr. Rajat Khare and Mr. Shravan
Sampath as Independent Directors for a term of 5 years viz.
September 25, 2015 to September 24, 2020; May 20, 2016 to
May 19, 2021 and May 27, 2016 to May 26, 2021, respectively,
forms part of the Notice calling the AGM.
During the period under review, Mr. Jayarama Prasad Chalasani,
Managing Director and Group CEO, Mr. P. N. Krishnan – Director
Finance, Mr. M. M. Nambiar and Ms. Ekaterina Sharashidze
– Independent Directors of the Company, resigned from the
Directorship of the Company w.e.f March 31, 2016, September
25, 2015, August 14, 2015 and May 19, 2016 respectively. The
Board wishes to place on record deep sense of appreciation for
the valuable contributions made by them to the Board and the
Company during their tenure as Directors
Mr. Nidhi Kumar Narang resigned from the post of Chief Financial
Officer of the Company (CFO) with effect from September 30,
2015. Mr. Shamik Roy, who was appointed as CFO with effect
from November 06, 2015, resigned on March 25, 2016. Mr. Rahul
Maheshwari has been appointed as CFO with effect from May
27, 2016.
In terms of Section 149(7) of the Companies Act, 2013, (“the Act”)
Mr. Phiroz A. Vandrevala, Mr. Uday Walia, Mr. Rajat Khare and
Mr. Shravan Sampath – Independent Directors of the Company
have given declarations to the Company to the effect that they
meet the criteria of independence as provided in Section 149(6)
of the Act.
Mr. Atul Punj retires by rotation and being eligible has offered
himself for reappointment at the AGM. The Board of Directors
recommend his appointment.
Brief resume of the Directors seeking appointment/re-
appointment at the AGM, as required under SEBI (Listing
Obligations & Disclosure Requirements) Regulations 2015 (“SEBI
Regulations”) and the Act, forms part of the notice convening
the AGM.
Meetings of the Board
During the year, the Board of Directors of the Company met
5 times on May 22, 2015; July 17, 2015; August 14, 2015;
November 06, 2015 and February 12, 2016.
Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Other Employees
The Nomination and Remuneration Committee in its meeting held
on May 20, 2014 had recommended to the Board of Directors a
Policy on Directors’ Appointment and Remuneration, including
criteria for determining qualifications, positive attributes,
independence of a director and relating to remuneration for the
Directors, Key Managerial Personnel and Other Employees in
terms of sub-section (3) of section 178 of the Act. The Board of
directors in its meeting held on May 20, 2014 have approved and
adopted the same. The said policy is enclosed as Annexure – I
to this Report.
Formal Annual Performance Evaluation of the Board and that of its Committees and Individual Directors
Pursuant to the provisions of the Act and SEBI Regulations,
Independent Directors at their separate meeting held on May
27, 2016 without participation of the Non-Independent Directors
and Management, have considered and evaluated the Board’s
performance and performance of the Chairman and Non-
Independent Directors. The Independent Directors in the said
meeting have also assessed the quality, quantity and timeliness
of flow of information between the Company Management and
the Board.
The Board of Directors in their meeting held on May 27, 2016
have evaluated the performance of each of the Independent
Directors (without participation of the relevant Director) and also
of the Committees of the Board.
The criteria for performance evaluation have been detailed
in the Corporate Governance Report which is attached as
Annexure – II to this Report.
Directors’ Responsibility Statement
Pursuant to the requirements of Sub-Sections (3)(c) and (5) of
Section 134 of the Act, it is hereby confirmed:
1. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper
explanation relating to material departures;
Directors' Report48
2. that the Directors 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 and of the profit or loss of the Company for the year under review;
3. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. that the Directors have prepared the annual accounts of the Company on a ‘going concern’ basis.
5. that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
6. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Audit CommitteeThe Audit Committee comprises of Mr. Phiroz Vandrevala, Independent Director as Chairman, Mr. Rajat Khare and Mr. Atul Punj as Members.
The Board of Directors have accepted all the recommendations of the Audit Committee.
Vigil MechanismThe Company has in place a vigil mechanism in the form of Whistle Blower Policy. It aims at providing avenues for employees to raise complaints and to receive feedback on any action taken and seeks to reassure the employees that they will be protected against victimization and for any whistle blowing conducted by them in good faith. The policy is intended to encourage and enable the employees of the Company to raise serious concerns within the organization rather than overlooking a problem or handling it externally. The Company is committed to the highest possible standard of openness, probity and accountability. It contains safeguards to protect any person who uses the Vigil Mechanism (whistle blower) by raising any concern in good faith. The Company does not tolerate any form of victimization and takes appropriate steps to protect a whistleblower that raises a concern in good faith and treats any retaliation as a serious disciplinary offence that merits disciplinary action. The Company protects the identity of the whistle blower if the whistle blower so desires, however the whistle blower needs to attend any disciplinary hearing or proceedings as may be required for investigation of the complaint. The mechanism provides for a detailed complaint and investigation process. If circumstances so require, the employee can make a complaint directly to the Chairman of the Audit Committee. The Company also provides a
platform to its employees for having direct access to the Chairman and Managing Director of the Company for raising any concerns. It is through ATP Connect ([email protected]).
Mr. Dinesh Thairani, Company Secretary is the Compliance Officer. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice.
Employee Stock Option Scheme
Pursuant to the Resolution passed by Circulation by the Nomination and Remuneration Committee on September 29, 2015 and as approved by the Board of Directors in its meeting held on February 12, 2016, 48,70,000 stock options were issued under Employee Stock Option Plan 2005 (ESOP 2005) and Employee Stock Option Plan 2006 (ESOP 2006) subject to the following changes:
The respective Plan will govern the stock options to be granted there under except as stated below: –
Particulars Proposed variation
Vesting Schedule 100% Vesting after the expiry of 1 year from the date of grant
Exercise Price At par value (` 2 per share)
Period To be exercised within 5 years from date of Vesting
Action on separation Upon resignation all vested options to be exercised within 1 year from last working day
ESOP 2005 and ESOP 2006 are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the Regulation).
The details as required to be provided in terms of the Regulation as amended from time to time with regards to the ESOP 2005 and ESOP 2006 of the Company as on March 31, 2016 are posted on the website of the Company at the following link www.punjlloyd.com
The Company has never provided any loan to its employees to purchase the shares of the Company.
The Company has not issued any shares with differential voting rights.
The Company has not issued any sweat equity shares.
Corporate Governance
As stipulated under SEBI Regulations executed with the Stock Exchanges, the Report on Corporate Governance and the requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance
as stipulated under the aforesaid regulation is attached as
Annexure – II to this Report and forms part of the Annual Report.
Directors’ Report
Punj Lloyd | Annual Report 2015-2016 49
Corporate Social Responsibility (CSR) initiatives
The Company has formed a CSR Committee comprising of
Mr. Atul Punj as Chairman, Mr. Shiv Punj and Mr. Uday Walia as
other members.
The said Committee has developed a Policy on CSR, which has
been approved by the Board of Directors in its meeting held on
May 20, 2014.
In terms of the provisions of Section 135 the Act read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014,
the Company was not required to make any expenditure on CSR
activities during the Financial Year 2015-16. The CSR Report is
attached as Annexure III.
Management Discussion and Analysis
As stipulated under SEBI Regulations, Management Discussion
and Analysis Report, for the year under review, is presented in a
separate section forming part of the Annual Report.
Auditors and Auditors’ Report
M/s Walker Chandiok & Co LLP have expressed their
unwillingness to continue as Statutory Auditors of the Company
for the Financial Year 2016-17. They shall hold office until the
conclusion of the ensuing AGM.
It is proposed to appoint M/s BGJC & Associates, Chartered
Accountants, New Delhi (Registration No. 003304N) as the
Statutory Auditors of the Company for a period of 5 years
commencing from ensuing AGM upto 6th consecutive AGM of
the Company, subject to ratification of their appointment at each
AGM.
The Company has received letter from M/s BGJC & Associates,
to the effect that their appointment, if made, would be within the
prescribed limits under Section 139 of the Act and that they are
not disqualified for appointment.
The observations of the Auditors have been fully explained in
Note 35 (a) and (b) to the Financial Statements.
Secretarial Auditors and Secretarial Audit Report
M/s. Suresh Gupta & Associates, Company Secretaries have
been appointed as Secretarial Auditors of the Company and their
Secretarial Audit Report is attached as Annexure – IV to this
Report.
Cost Auditors
The Board has appointed M/s Bhavna Jaiswal & Associates,
(Membership No. 25970), Cost Accountants, Delhi, as Cost
Auditors of the Company for conducting the audit of cost records
of the Company for the Financial Year 2015-16
Fixed Deposits
The Company has not accepted any fixed deposits from public,
shareholders or employees during the year under review.
Particulars of Employees
The details as required in terms of the provisions of Section 197
of the Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 are
attached as Annexure – V to this Report.
The details of employees as required in terms of the provisions of
Section 197 of the Act read with Rule 5 (2) & (3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules,
2014 are attached as Annexure – VI to this Report.
The Company has in place an Anti Sexual Harassment Policy in
line with the requirements of The Sexual Harassment of Women
at the Workplace (Prevention, Prohibition and Redressal) Act,
2013. Internal Complaints Committee has been set up to redress
complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary, trainees) are covered under
this policy. During the year 2015-16, no complaints were received.
Consumption of Energy and Foreign Exchange Earnings and Outgo
The details as required under Section 134(3)(m) of the Act read
with Rule 8(3) of Companies (Accounts) Rules, 2014, regarding
conservation of energy, technology absorption and foreign
exchange earning and outgo are attached as Annexure – VII to
this Report.
Loans, Guarantees and Investment
In accordance with Section 134(3)(g) of the Act, the particulars of
loans, guarantees and investments under Section 186 of the Act
are given in the Note 39 (a) of stand alone Financial Statements
read with respective heads to the Financial Statements.
Related Party Transactions
In accordance with Section 134(3)(h) of the Act read with Rule
8(2) of Companies (Accounts) Rules, 2014, the particulars of
contracts or arrangements with related parties, referred to in
Section 188(1) of the Act, in the prescribed Form AOC.2 are
attached as Annexure – VIII to this Report.
Risk Management Policy
The Company has developed and implemented a Risk
Management Policy. The details of elements of risk are provided
in the Management Discussion and Analysis section of the
Annual Report.
Directors’ Report
Directors' Report50
Internal Financial Controls
Pursuant to Section 134 of the Act, the Directors, based on the
representation received from the operating management, state that:-
The Board, through the operating management has laid down
Internal Financial Controls to be followed by the Company.
To the best of their knowledge and ability and inputs provided
by various assurance providers confirm that such financial
controls are adequate and were operating effectively.
Extracts of Annual Return
In terms of Section 134(3)(a) of the Act read with Rule 12(1) of
Companies (Management & Administration) Rules, 2014, the
extracts of Annual Return of the Company in Form MGT.9 is
attached as Annexure – IX to this Report.
No significant and material orders have been passed by any
regulators or courts or tribunals impacting the going concern
status and company’s operations in future.
Consolidated Financial Statements
In accordance with Section 129 of the Act, Consolidated Financial
Statements are attached and form part of the Annual Report and
the same shall be laid before the ensuing AGM along with the
Financial Statements of the Company.
Subsidiaries, Joint Ventures & Associate Companies
As required under the first proviso to sub-section (3) of Section
Directors’ Report
129 of the Act, a separate statement containing the salient
features of the financial statements of the subsidiaries, associates
and joint venture companies in Form AOC.1 is annexed to the
Financial Statements and forms part of the Annual Report, which
covers the performance and financial position of the subsidiaries,
associates and joint venture companies.
The annual accounts of the subsidiary companies are available
on the website of the Company viz. www.punjlloyd.com and
will also be available for inspection by any member or trustee of
the holder of any debentures of the Company at the Registered
Office and Corporate Office. A copy of the above accounts shall
be made available to any member on request.
Acknowledgement
Your directors would like to place on record its appreciation for
the committed services put in by the employees of the Company.
Your directors would also like to convey its sincere gratitude to the
shareholders, debenture holders, bankers, financial institutions,
regulatory bodies, clients and other business constituents for
their continued co-operation and support received.
For and on behalf of the Board of Directors
Atul PunjChairman and Managing Director
Place: GurgaonDate: May 27, 2016
Punj Lloyd | Annual Report 2015-2016 51
Policy of the Nomination and Remuneration CommitteeSection 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement have made it mandatory for all listed companies to appoint a Nomination and Remuneration Committee, inter alia, for the purpose of identifying persons who are qualified to be appointed as directors or be appointed in key management of the company. Punj Lloyd Limited has a Nomination and Remuneration Committee consisting of non-executive directors.
Objective of the PolicyThe objective of the policy is to ensure Board diversity and independence in order to help provide the maximum experience and access to knowledge that can be derived from the Board. Further, it is the objective of the policy that it may be aligned to the various HR policies of the Company in regard to appointment of key managerial personnel and senior management.
Board IndependenceTo ensure Board Independence, the Company shall appoint requisite number of persons as Independent Directors, who meet the criteria of independence under the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, as amended from time to time.
Criteria for Evaluation of PerformanceThere must be clearly defined benchmarks for evaluation of performance of every director, key managerial personnel or senior management. The performance evaluation should keep in mind factors such as attendance at meetings, contribution at such board or board committee meetings and value addition that has been done by the directors. The evaluation must also take in to consideration the future strategy to be adopted by the Company.
Annexure I
Criteria for Determination of RemunerationThe Committee shall determine the remuneration for its Directors, the senior management and Key Managerial Personnel while keeping the following criteria in mind:
the remuneration shall be of such an amount that is in consonance with the services that are being provided to the Company;
the remuneration is consummate with reference to remuneration paid to people in similar positions in peer companies;
the remuneration is consummate with the experience that the director or personnel brings to the Company;
the remuneration must be of a level that is sufficient to attract, retain and motivate the best talent in the market to work for the Company;
the remuneration is a fair balance of perquisites, commissions and salary and also includes in the case of directors any sitting fees;
the remuneration may include both long term and short term incentives;
the remuneration must be decided while keeping in mind the organisation structure of the Company and of the Board;
the remuneration must co-relate to the clearly defined benchmarks for performance evaluation;
the remuneration is revised on the basis of the performance of the director/ personnel; and
the remuneration must be in accordance with the permissible law.
Directors' Report52
Company’s Philosophy on Corporate GovernanceYour Company’s corporate governance philosophy is founded on the principles of fair and transparent business practices. The governance structures are created to protect the interests of and generate long term sustainable value for all stakeholders – customers, employees, partners, investors and the community at large. The business is governed and supervised by a strong Board of Directors and together with the management they are committed to uphold the principles of excellence across all activities. The Company is compliant with the latest provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (“SEBI Regulations”) as amended from time to time.
Date of ReportThe information provided in the Report on Corporate Governance for the purpose of uniformity is as on March 31, 2016. The Report is updated as on the date of the report wherever applicable.
Board of Directors
Composition of the BoardAs on date, The Company’s Board consists of 6 Directors, 4 of which are Independent Directors. The Executive Chairman of the Board of Directors is a Promoter Director. The composition of the Board satisfies the conditions of the SEBI Regulations.
Table 1: Composition of the Board of Directors
Name of the Director Category
Mr. Atul Punj Promoter, Executive
Mr. J. P. Chalasani (resigned on March 31, 2016)
Executive
Mr. Shiv Punj (appointed on March 25, 2016)
Executive
Mr. Luv Chhabra (resigned on May 11, 2015)
Executive
Mr. P. N. Krishnan (resigned on September 25, 2015)
Executive
Mr. Phiroz Vandrevala Independent
Mr. M. Madhavan Nambiar (resigned on August 14, 2015)
Independent
Ms. Ekaterina Sharashidze (resigned on May 19, 2016)
Independent
Mr. Uday Walia (appointed on September 25, 2015)
Independent
Mr. Rajat Khare (appointed on May 20, 2016)
Independent
Mr. Shravan Sampath (appointed on May 27, 2016)
Independent
Note: Mr. Atul Punj is father of Mr. Shiv Punj. There are no other inter-se relationships amongst the Board members.
Annexure II — Corporate Governance Report
Board MeetingsDuring the year, the Board of the Company met 5 times on May 22, 2015, July 17, 2015, August 14, 2015, November 06, 2015, and February 12, 2016. The maximum gap between any two Board meetings was less than four months. Meetings are usually held at Corporate Office I, at 78 Institutional Area, Sector 32 Gurgaon 122001, India.
The agenda papers and detailed notes are circulated to the Board well in advance of every meeting, where it is not practicable to attach any document to the agenda, then same is placed before the Board at the meeting and in special circumstances, additional items on the agenda are taken up at the meeting. In case of business exigencies or urgency of matters, resolutions are passed by circulation and same is placed before the Board in the next meeting.
Video conferencing facilities are used, as and when required, to facilitate directors to participate in the meetings.
The Board is given presentation on the operations of the Company covering all business areas of the Company, inter alia marketing, sales, health, safety, environment, finance, internal audit, litigations, risk management, major business segments, business environment, business opportunities and overview of all divisions and departments, including performance of the business operations of major subsidiary companies, before taking on record the quarterly / annual financial results of the Company.
Information Supplied to the BoardAmong others, information supplied to the Board includes:
Annual operating plans and budgets and any update thereof
Capital budgets and any updates thereof
Quarterly results for the Company and operating divisions and business segments
Minutes of the meetings of the Audit Committee and other Committees of the Board
Information on recruitment and remuneration of senior officers just below the level of the Board, including the appointment or removal of Chief Financial Officer and Company Secretary
Show cause, demand, prosecution and penalty notices, which are materially important
Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems
Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company
Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company
Punj Lloyd | Annual Report 2015-2016 53
Certificate by the respective Heads of Departments/Projects regarding compliance with the statutory laws
Details of any joint venture or collaboration agreement
Transactions that involve substantial payment towards goodwill, brand equity or intellectual property
Significant labour problems and their proposed solutions. Any significant development in human resources / industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme, etc.
Sale of investments, subsidiaries, assets which are material in nature and not in the normal course of business
Quarterly details of foreign exchange exposures and the steps
taken by management to limit the risks of adverse exchange rate movement, if material
Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer, etc.
General notices of interest of Directors
Minutes of the Board meetings of unlisted subsidiary companies
Corporate Governance Reports as submitted to stock exchanges
Status of Investor Complaints
Directors’ Attendance Record and Directorships
Table 2: Attendance of Directors at Board Meetings during the year, last Annual General Meeting (“AGM”) and details of other Directorship and Chairmanship /Membership of Committees of each Director :
Name of the DirectorNo. of other
Directorships***
No. of Board Level Committee Memberships / Chairmanships in
other Indian Public CompaniesAttendance Particulars*****
Member**** Chairman****No. of Board Meetings
Attendance at last AGM
Held Attended Attended
Mr. Atul Punj 5 2 0 5 5 Yes
Mr. J.P. Chalasani* NA NA NA 5 5 Yes
Mr. P.N. Krishnan** NA NA NA 3 3 Yes
Mr. Phiroz Vandrevala 2 0 1 5 5 Yes
Mr. Luv Chhabra@ NA NA NA 0 0 NA
Ms. Ekaterina Sharashidze@@ 0 1 0 5 5 No
Mr. M. Madhavan Nambiar @@@ NA NA NA 3 3 No
Mr. Uday Walia# 4 4 1 2 1 NA
Mr. Shiv Punj## 3 1 0 0 0 NA
Mr. Rajat Khare^ NA NA NA NA NA NA
Mr. Shravan Sampath ^^ NA NA NA NA NA NA
* Since resigned from the Board of Directors of the Company w.e.f. March 31, 2016
** Since resigned from the Board of Directors of the Company w.e.f. September 25, 2015
@ Since resigned from the Board of Directors of the Company w.e.f. May 11, 2015
@@ Since resigned from the Board of Directors of the Company w.e.f. May 19, 2016
@@@ Since resigned from the Board of Directors of the Company w.e.f. August 14, 2015
# Since he was appointed as a Director of the Company w.e.f. September 25, 2015
## Since he was appointed as a Director of the Company w.e.f. March 25, 2016
^ Since he was appointed as a Director of the Company w.e.f. May 20, 2016
^^ Since he was appointed as a Director of the Company w.e.f. May 27, 2016
Notes:
*** The Directorships held by Directors as mentioned above does not include Punj Lloyd Limited, alternate directorships and
directorships in foreign companies, companies registered
under Section 8 of the Companies Act, 2013 (“the Act”) and
Private Limited Companies.
**** In accordance with the SEBI Regulations, Memberships /
Chairmanships of only the Audit Committees and Stakeholders
Relationship Committee / Shareholders’/ Investors’ Grievance
Committees of all public limited Companies (including Punj
Lloyd Limited) have been considered.
***** Includes Attendance, if any, through Video Conferencing
facilities, provided to the directors to facilitate participation in
the meetings.
Annexure II — Corporate Governance Report
Directors' Report54
Board IndependenceIn compliance with the SEBI Regulations, more than half of the Board of Directors of the Company i.e. 4 out of 6, comprises of Independent Directors. An Independent Director means a non-executive director, other than a nominee director of the Company:
i. Who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;
ii. who is or was not a promoter of the Company or its holding, subsidiary or associate Company;
iii who is not related to promoters or directors in the Company, its holding, subsidiary or associate Company;
iv. who, apart from receiving director’s remuneration, has or had no pecuniary relationship with the Company, its holding, subsidiary or associate Company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;
v. none of whose relatives has or had pecuniary relationship or transaction with the Company, its holding, subsidiary or associate Company, or their promoters, or directors, amounting to two percent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;
vi. who, neither himself nor any of his relatives —
(A) holds or has held the position of a key managerial personnel or is or has been employee of the Company or its holding, subsidiary or associate Company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;
(B) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of
(1) a firm of auditors or company secretaries in practice or cost auditors of the Company or its holding, subsidiary or associate Company; or
(2) any legal or a consulting firm that has or had any transaction with the Company, its holding, subsidiary or associate Company amounting to ten per cent or more of the gross turnover of such firm;
(C) holds together with his relatives two per cent or more of the total voting power of the Company; or
(D) is a Chief Executive or director, by whatever name called, of any non-profit organisation that receives twenty-five per cent or more of its receipts from the Company, any of its promoters, directors or its holding, subsidiary or associate Company or that holds two per cent or more of the total voting power of the Company;
(E) is a material supplier, service provider or customer or a lessor or lessee of the Company;
vii. who is not less than 21 years of age.
The Company does not have any pecuniary relationship with any non-executive or Independent director except for payment of commission, sitting fee and reimbursement of travelling expenses for attending the Board meetings. No sitting fee is paid for attending the meetings of any Committee.
The details of all remuneration paid or payable to the Directors are given in Table 3.
Table 3: Remuneration to Directors for the year ended March 31, 2016
(Amount in `)
Name of the Director SalarySitting Fees
PerquisitesPerformance
Incentive
Deferred
(PF & Superannuation)
Commission Total
Mr. Atul Punj 0 0 0 0 0 0 0
Mr. J. P. Chalasani * 26,378,710 0 4,026,447 0 4,490,676 0 34,895,833
Mr. Luv Chhabra@ 1,247,999 0 6,377,821 0 345,879 0 7,971,699
Mr. P. N. Krishnan ** 10,525,958 0 1,037,679 0 681,920 0 12,245,557
Mr. Phiroz Vandrevala 0 250,000 0 0 0 0 250,000
Ms. Ekaterina Sharashidze@@ 0 250,000 0 0 0 0 250,000
Mr M. Madhavan Nambiar*** 0 150,000 0 0 0 0 150,000
Mr. Uday Walia# 0 50,000 0 0 0 0 50,000
Mr. Shiv Punj## 0 0 0 0 0 0 0
Mr. Rajat Khare^ NA NA NA NA NA NA NA
Mr. Shravan Sampath^^ NA NA NA NA NA NA NA
* Since resigned from the Board of Directors of the Company w.e.f. March 31, 2016.
@ Since resigned from the Board of Directors of the Company w.e.f. May 11, 2015.
** Since resigned from the Board of Directors of the Company w.e.f. September 25, 2015.
Annexure II — Corporate Governance Report
Punj Lloyd | Annual Report 2015-2016 55
*** Since resigned from the Board of Directors of the Company w.e.f. August 14, 2015.
@@ Since resigned from the Board of Directors of the Company w.e.f. May 19, 2016.
# Since appointed as a Director of the Company. w.e.f September 25, 2015.
## Since appointed as Director on March 25, 2016.
^ Since appointed as a Director of the Company. w.e.f May 20, 2016.
^^ Since appointed as a Director of the Company. w.e.f May 27, 2016.
The details of Current Service Tenure, Notice period and Severance Fees of Executive Directors are given in Table 4.
Table 4: Details of Current Service Tenure, Notice period and Severance Fees of Executive Directors:
Name of the Director Current Tenure and last re-appointment date Notice Period / Severance Fees
Mr. Atul Punj 5 years; July 1, 2013 3 Months Notice or Basic Salary in lieu thereof.
Mr. Shiv Punj 5 years; March 25, 2016 -do-
As on April 01, 2015, there were no outstanding stock options issued to any director of the Company.
Further no stock options were issued to any director of the Company during the year ended on March 31, 2016.
The Board of Directors of the Company has satisfied itself that plans are in place for orderly succession for appointments to the Board and to senior management.
Shares and Convertible Instruments held by Non-Executive DirectorsDetails of the shares of the Company held by Non-Executive Directors are given in Table 5.
Table 5: Details of Shares held by Non-Executive Directors as on March 31, 2016:
Name of the Director No. of Shares Held (face value of ` 2 each)
Mr. Phiroz Vandrevala 5,000
Ms. Ekaterina Sharashidze* (resigned on May 19, 2016) Nil
Mr. Uday Walia Nil
Mr. Rajat Khare (appointed on May 20, 2016) Nil
Mr. Shravan Sampath (appointed on May 27, 2016) Nil
As on March 31, 2016, none of the Non-Executive Directors held any convertible instruments of the Company.
Independent DirectorsMr. Phiroz Vandrevala, Mr. M. M. Nambiar and Ms. Ekaterina Sharashidze were appointed as Independent Directors of the Company for a period of five years with effect from August 04, 2014 at the AGM held on August 04, 2014. Mr. M. M. Nambiar & Ms. Ekaterina Sharashidze have resigned from the Board of the Company w.e.f. August 14, 2015 and May 19, 2016, respectively. Mr. Uday Walia, Mr. Rajat Khare and Mr. Shravan Sampath were appointed as Additional Directors in the capacity of Independent Directors of the Company on September 25, 2015; May 20, 2016 and May 27, 2016, respectively.
Terms and conditions of appointment of Independent Directors have been disclosed on the website of the Company.
None of the Independent Directors neither serve in more than seven listed companies nor any Independent Director who is a Whole Time Director in any other Company serves as Independent Director in more than 3 listed companies.
Separate meetings of the Independent DirectorsThe Independent Directors met once on May 27, 2016, without the attendance of Executive Directors and members of management. All the Independent Directors were present in that meeting.
The Independent Directors in the said meeting had, inter-alia:
i. reviewed the performance of non-Independent directors and the Board as a whole;
ii. reviewed the performance of the Chairperson of the Company, taking into account the views of executive directors and non-executive directors;
iii. assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Annexure II — Corporate Governance Report
Directors' Report56
Familiarisation Programmes for Independent DirectorsThe Company has framed various programmes to familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. The details of such programmes have been disclosed on the Company’s website at the following link :
http://punjlloydgroup.com/investors/corporate-governance/independent-directors
Committees of the BoardAudit CommitteeThe particulars of Composition, Meetings and Attendance records of the Audit Committee are given in Table 6.
Table 6: Particulars of Composition, Meetings and Attendance records of Audit Committee:
Name of the Members Status Category No. of Meetings Attended Dates onwhich Meetings Held
Mr. Phiroz Vandrevala Chairman Independent 4 out of 4
May 22, 2015;
August 14, 2015
November 06, 2015 and
February 12, 2016
Ms. Ekaterina Sharashidze@ Member Independent 4 out of 4
Mr. P.N. Krishnan* Member Executive 2 out of 2
Mr. M. Madhavan Nambiar ** Member Independent 2 out of 2
Mr. Jayarama Prasad Chalasani*** Member Executive 2 out of 2
Mr. Atul Punj# Member Executive NA
Mr. Rajat Khare## Member Independent NA
@ Since resigned from the Board of Directors of the Company w.e.f. May 19, 2015.
* Since resigned from the Board of Directors of the Company w.e.f. September 25, 2015.
** Since resigned from the Board of Directors of the Company w.e.f. August 14, 2015.
*** Member of Audit Committee from October 16, 2015 till March 25, 2016. Since resigned from the Board of Directors of the Company w.e.f. March 31, 2016
# Since inducted as member of the Committee w.e.f. March 25, 2016
## Since inducted as member of the Committee w.e.f. May 20, 2016
The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements. Mr. Phiroz Vandrevala is financially literate and all other members of the Audit Committee have accounting or related financial management expertise.
The Director Finance, Chief Financial Officer and representatives of the Statutory Auditors and Internal Auditors are regularly invited by the Audit Committee to its meetings. Mr. Dinesh Thairani, Company Secretary, is the secretary to the Committee.
The constitution of the Audit Committee meets the requirements of relevant provisions of the Act as well as that of the SEBI Regulations.
The functions of the Audit Committee of the Company include the following:
Pursuant to the provisions of the Act and the rules made thereunder, and the SEBI Regulations, the terms of reference, roles and responsibilities of the Committee were restated:-
Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;
Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
Reviewing / Examining, with the management, the annual financial statements and auditor’s report thereon before submission to the Board for approval, with particular reference to:
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a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of section 134 of the Act
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report
Reviewing, with the management, Annual / Quarterly financial statements before submission to the Board for approval;
Monitoring /Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
Review and monitor the auditor’s independence and performance, and effectiveness of audit process;
Approval or any subsequent modification of transactions of the Company with related parties;
Scrutiny of inter-corporate loans and investments;
Valuation of undertakings or assets of the Company, wherever it is necessary;
Evaluation of internal financial controls and risk management systems;
Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
Discussion with internal auditors of any significant findings and follow up there on ;
Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
To review the functioning of the Whistle Blower mechanism;
Approval of appointment of CFO (i.e., the Whole-Time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Committee shall have such powers and rights as are prescribed under the provisions of the SEBI Regulations and the Act and the rules made thereunder, as notified or may be notified from time to time.
The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews :
Management discussion and analysis of financial condition and results of operations.
Statement of significant related party transactions (as defined by the Audit Committee) submitted by management.
Management letters/letters of internal control weaknesses issued by the statutory auditors.
Internal audit reports relating to internal control weaknesses.
The appointment, removal and terms of remuneration of the chief internal auditor.
In addition, the Audit Committee of the Company is also empowered to review the financial statements, in particular, the investments made by the unlisted subsidiary companies.
The Audit Committee is also apprised on information with regard to related party transactions by being presented:
A statement in summary form of transactions with related parties in ordinary course of business.
Details of material individual transactions with related parties which are not in the normal course of business.
Details of material individual transactions with related parties or others, which are not on an arm’s length basis along with management’s justification for the same.
Nomination and Remuneration CommitteeThe particulars of Composition, Meetings and Attendance records of the Nomination and Remuneration Committee are given in Table 7.
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Table 7: Particulars of Composition and attendance records of nomination and remuneration Committee
Name of the Members Status Category No. of Meetings Dates on which Meetings Held
Held Attended
Mr. Phiroz Vandrevala Chairman Independent 1 1
November 06, 2015
Ms. Ekaterina Sharashidze# Member Independent 1 1
Mr. M. Madhavan Nambiar* Member Independent 0 0
Mr. Uday Walia ** Member Independent 1 1
Mr. Rajat Khare*** Member Independent NA NA
# Since resigned w.e.f. May 19, 2016
* Since resigned w.e.f. August 14, 2015
** Inducted as member with effect from September 25, 2015
*** Inducted as member with effect from May 20, 2016
The matters referred to the Committee are:
To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, in accordance with the requirements of the Act, relating to the remuneration for the directors, key managerial personnel and other employees.
To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal.
To carry out evaluation of every director’s performance.
To consider and recommend to the Board, the remuneration to be paid by the Company to Executive Directors / Whole time Directors of the Company, keeping in view the provisions of Listing Agreement with Stock Exchanges;
To perform such other functions as have been referred / may be referred by the Board or required in accordance with the Act, Listing Agreements or SEBI Regulations as amended from time to time.
The Nomination and Remuneration Committee had formulated the following policies:
1. Policy on Directors’ Appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and relating to remuneration for the directors, key managerial personnel and other employees (which is attached as Annexure I to the Directors Report).
2. Policy on Board diversity
3. The Criteria for performance evaluation of Independent Directors and the Board as provided herein below:
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Punj Lloyd LimitedEvaluation Criteria for Performance Evaluation of Executive Directors, Independent Directors, Committee and Board of Directors
Executive Director (s) Independent Director(s) Committee of Board Board
1. How well has he performed in his area of responsibility with respect to budget and business plan?
2. How well has he performed in development and expansion of business with respect to his area of operation?
3. How well does he involve himself in day to day affairs of the Company?
4. Does he show willingness to spend time and effort learning about the Company and its business?
5. How successfully the director brought his knowledge and experience to bear in the consideration of strategy?
6. Is he up-to-date with the latest developments in areas such as the Corporate Governance framework and financial reporting and in the industry and market conditions?
1. How well prepared and informed is he for the Board/Committee meetings and is his attendance at meetings satisfactory?
2. Does he demonstrate willingness to devote time and effort to understand the Company and its business?
3. What has been the quality and value of his contributions at Board/Committee meetings?
4. Does he constructively challenge the matters and decisions at the Board/Committee meetings?
5. How successfully has he brought his knowledge and experience to bear in the consideration of strategy?
6. How effectively and proactively has he followed up in his areas of concern?
7. How well does he communicate with fellow Board members and senior management?
8. Does he behave in accordance with Company’s values and beliefs?
9. How well do they maintain their independence according to Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement applicable only for Independent Director.
10. Do the non executive directors willing to participate in events outside Board meetings such as site visits?
11. How well do they adhere the code for Independent Director pursuant to Schedule IV of the Companies Act, 2013?
1. Does the Committee has full and common understanding of its roles and responsibilities?
2. How effective the Committee has been vis-à-vis the roles and responsibilities assigned to it?
3. Is the composition of the Committee appropriate, with the right mix of knowledge and skills to maximize performance in the light of future strategy?
4. Does Committee members come to meetings familiar with the agenda, backup reports and other materials circulated beforehand?
5. How well does the Board communicate with its Committees, the management team, Company employees and others?
6. Is the Committee as a whole up to date with latest developments in the regulatory environment and the market?
7. Is appropriate, timely information of the right length and quality provided to the Committee, and is management responsive to requests for clarification or amplification?
8. Does the Committee provide helpful feedback to Board on its requirements?
9. How well has the Committee performed against any objective that was set?
10. Are sufficient Committee meetings of appropriate length held to enable proper consideration of issues? Is time used effectively?
1. Whether the Board has full and common understanding of its roles and responsibilities.
2. Is the Board as a whole up to date with latest developments in the regulatory environment and the market?
3. Whether the Board has full understanding of the business plan and performance of operations and management of the Company and received regular input on this from Chief Executive?
4. How effective has the Board’s contribution been to the development of strategy, policy and to ensuring robust and effective risk management?
5. Has the Board responded effectively to any problems or crises that have emerged, and could/should these have been foreseen?
6. Is appropriate, timely information of the rights length and quality provided to the Board, and is management responsive to requests for clarification or amplification? Does the Board provide helpful feedback to management on its requirements?
7. Do the Board members receive their information in a timely manner and come to meetings familiar with the agenda, backup reports and other materials circulated beforehand?
8. Does the Board regularly monitors and evaluates progress towards strategic goals and assesses operational performance?
9. Whether the Board holds an appropriate number of meetings each year and Board meetings include appropriate level of information, of appropriate length for productive use of its time?
10. Does the Board has established a Committee structure that enables clear focus on the important issues facing the Company? Are the Committees functioning satisfactorily?
11. Is the composition of the Board and its Committees appropriate, with the right mix of knowledge and skills to maximize performance in the light of future strategy?
12. How well does the Board communicate with its Committees, the management team, Company employees and others?
13. How has the Board responded to any problems or crises that arose?
14. How effectively does the Board use mechanisms such as the AGM and the Annual Report?
15. Are relationships inside and outside the Board working effectively?
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Stakeholders’ Relationship Committee Cum Shareholders’ / Investors’ Grievance CommitteeThe particulars of Composition, Meetings and Attendance records of the Stakeholders’ Relationship Committee cum Shareholders’ / Investors’ Grievance Committee are given in Table 8.
Table 8 : Particulars of Composition and Attendance records of Stakeholders’ Relationship Committee cum Shareholders’ / Investors’ Grievance Committee
Name of the Members Status CategoryNo. of Meetings Date on which Meetings held
Held Attended
Mr. M. Madhavan Nambiar * Independent Chairman 1 1
May 22, 2015 November 06, 2015
Mr. Atul Punj Promoter, Executive Member 2 2
Mr. P. N. Krishnan ** Executive Member 1 1
Mr. Uday Walia *** Independent Chairman 1 1
Mr. Jayarama Prasad Chalasani # Executive Member 1 1
Mr. Shiv Punj ## Executive Member 0 0
* Since resigned from the Board of Directors of the Company w.e.f. August 14, 2015.
** Since resigned from the Board of Directors of the Company w.e.f. September 25, 2015
*** Appointed with effect from September 25, 2015
# Member of Committee from October 16, 2015 till March 25, 2016. Since resigned from the Board of Directors of the Company w.e.f. March 31, 2016
## Since inducted as member of the Committee w.e.f. March 25, 2016
The Committee is empowered pursuant to its terms of reference to:
Consider and resolve the grievances of security holders of the Company.
Specifically look into the redressal of shareholder(s) and investors complaints like transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends etc.
Perform such other functions as have been referred / may be referred by the Board or required in accordance with the Act, Listing Agreements or SEBI Regulations as amended from time to time.
During the year 2015-16, the Company received a total of 16 queries/complaints (to be updated) from various shareholders relating to non-receipt of dividend, Annual Report, and share certificates etc. The same were attended to the satisfaction of the shareholders. At the end of the year on March 31, 2016, no complaint was pending. Mr. Dinesh Thairani is the Compliance Officer of the Company.
CEO / CFO The Chairman & Managing Director and the Chief Financial Officer have certified, in terms of SEBI Regulations to the Board that the financial statements present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards.
Code of ConductThe Board of Directors of the Company has adopted the Code of Conduct for Directors and Senior Management Personnel. The Code is applicable to Executive and Non-Executive Directors as well as Senior Management Personnel. As per the SEBI Regulations, the duties of Independent Directors have been suitably incorporated in the said Code as laid down in the Act. A copy of the code is available on Company’s website www.punjlloyd.com
A declaration signed by the Chairman & Managing Director is given below:
I hereby confirm that:
The Company has obtained from all the members of the Board and Senior Management Personnel, an affirmation that they have complied with the Code of Conduct for Directors and Senior Management Personnel in respect of the financial year 2015-16.
For Punj Lloyd Limited
Atul PunjChairman & Managing Director
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Subsidiary Companies
As per the SEBI Regulations, a ‘material subsidiary’ means a
subsidiary whose income or net worth (i.e. paid up capital and
free reserves) exceeds 20% of the consolidated income or
net worth respectively, of the listed holding Company and its
subsidiaries in the immediately preceding accounting year.
The Company does not have any material non-listed Indian
subsidiary Company and hence, it is not required to have an
Independent Director of the Company on the Board of any
subsidiary Company.
The Company has a policy for determining material subsidiaries
and the same has been disclosed on the Company’s website
at the following link: http://punjlloydgroup.com/investors/policy-
material-subsidiaries/material-subsidiary-policy.
ManagementManagement Discussion and Analysis
This Annual Report has a detailed section on Management
Discussion and Analysis.
Disclosures by Management to the Board
All disclosures relating to financial and commercial transactions
where Directors may have a potential interest are provided to
the Board and the interested Directors do not participate in the
discussion nor do they vote on such matters.
Disclosure of Accounting Treatment In Preparation of Financial Statements
The Company has followed the guidelines on accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements.
Related Party Transactions
The Company has formulated a policy on materiality of Related
Party Transactions and dealing with Related Party Transactions
and the same has been disclosed on the Company’s website at
the following link: http://punjlloydgroup.com/investors/investor/
related-party-transaction-policy
All related party transactions including those transactions of
repetitive in nature requiring omnibus approval are placed before
the Audit Committee for approval.
The details of related party transactions entered into by the
Company pursuant to each Omnibus approval given, are
reviewed by the Audit Committee.
Related Party Disclosures as required under the SEBI Regulations
are given in the notes to the Financial Statements.
Whistle-Blower PolicyThe Company has in place a vigil mechanism in the form of Whistle Blower Policy. It aims at providing avenues for employees to raise complaints and to receive feedback on any action taken and seeks to reassure the employees that they will be protected against victimization and for any whistle blowing conducted by them in good faith. The policy is intended to encourage and enable the employees of the Company to raise serious concerns within the organization rather than overlooking a problem or handling it externally. The Company is committed to the highest possible standard of openness, probity and accountability. It contains safeguards to protect any person who uses the Vigil Mechanism (whistle blower) by raising any concern in good faith. The Company does not tolerate any form of victimization and take appropriate steps to protect a whistle blower that raises a concern in good faith and treats any retaliation as a serious disciplinary offence that merits disciplinary action. The Company protects the identity of the whistle blower if the whistle blower so desires, however the whistle blower needs to attend any disciplinary hearing or proceedings as may be required for investigation of the complaint. The mechanism provides for a detailed complaint and investigation process. If circumstances so require, the employee can make a complaint directly to the Chairman of the Audit Committee. The Company also provides a platform to its employees for having direct access to the Chairman and Managing Director of the Company for raising any concerns. It is through [email protected].
Mr. Dinesh Thairani, Company Secretary of the Company is the Compliance Officer. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice.
Code of Conduct to Regulate, Monitor and Report trading by insiders and code of Practices and Procedures for fair Disclosure of unpublished price Sensitive InformationPursuant to the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, (the Regulations), which replace the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Company has laid down a code of conduct for regulation, monitoring and reporting of insider trading by employees of the Company, including directors, and other “connected persons” (as defined in the Regulations), in relation to the securities of the Company (the Code). The Code clearly specifies the guidelines and procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautioning of the consequences of violations. The code clearly specifies, among other matters, that Directors and specified employees of the Company and other “connected persons can trade in the shares of the Company only during ‘Trading Window Open Period’. The trading window is closed during the time of declaration of results, dividend and material events, as per the Code.
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Mr. Dinesh Thairani, Company Secretary, is the Compliance Officer of the Company.
Further pursuant to the above Regulations, the Company has formulated a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information. The Company will adhere to the principles for fair disclosure of unpublished price sensitive information as laid down in the above code without diluting the provisions of the Regulations, as applicable in any manner.
Mr. Sushant Agrawal, is designated as Chief Investor Relations Officer to deal with dissemination of information and disclosure of unpublished price sensitive information.
ShareholdersRe-Appointment of DirectorsThe brief resume and other requisite details, as required to be disclosed under SEBI Regulations, of the Directors seeking appointment at the ensuing AGM is given as part of the Notice calling the ensuing AGM.
Communication to ShareholdersThe Company puts forth key information about the Company and its performance, including quarterly results, official news releases and presentations to analysts, on its website regularly for the benefit of the public at large.
The quarterly/half yearly and annual financial results of the Company are normally published in Business Standard/Hindu Business Line/Financial Express in English and Rashtriya Sahara, Jansatta and Business Standard in Hindi. In addition to the above, quarterly and annual results are displayed at the Company’s website at ‘www.punjlloyd.com/investors’ for the information of all Shareholders.
Detailed presentation are made to Institutional Investors and Financial Analysts on the unaudited quarterly financial results as well as the annual audited financial results of the Company. These presentations are also uploaded on our website. Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors’ Report, Auditors’ Report and other important information is circulated to members and others entitled thereto.
ScoresThe Company has enrolled itself for SEBI Complaints Redress System (SCORES), a centralized web based complaints redress system with 24 x 7 access. It allows online lodging of complaints at anytime from anywhere. An automated email acknowledging the receipt of the complaint and allotting a unique complaint registration number is generated for future reference and tracking. The Company uploads an Action Taken Report (ATR) so that the investor can view the status of the complaint online. All complaints are saved in a central database which generates relevant MIS reports to SEBI.
Investor Grievances & Shareholder Redressal
The Company has appointed a Registrar and Share Transfer
Agent, M/s. Karvy Computershare Pvt. Ltd., which is fully
equipped to carry out share transfer activities and redress investor
complaints. Mr. Dinesh Thairani, Company Secretary is the
Compliance Officer for redressal of all shareholders’ grievances.
Details of Non-Compliance by the Company
The Company has complied with all the requirements of
regulatory authorities. No penalties / strictures were imposed
on the Company by Stock Exchanges or SEBI or any statutory
authority on any matter related to capital markets during the last
three years.
ComplianceMandatory Requirements
The Company is fully compliant with the applicable mandatory
requirements of corporate governance as stipulated in the SEBI
Regulations.
A Certificate from M/s Walker Chandiok & Co LLP, Statutory
Auditors, confirming compliance with the conditions of the
Corporate Governance as stipulated under the SEBI Regulations,
is attached to the Directors’ Report forming part of the Annual
Report.
Non – Mandatory Requirements
The details of compliance of the non-mandatory requirements
are listed below.
The Company has an Executive Chairman and hence, this is not
applicable.
Shareholder Rights – Furnishing of Half-Yearly Results
Details of the shareholders’ rights in this regard are given in the
section ‘Communication to Shareholders’.
The observations of the Auditors have been fully explained in
note 35 (a) and (b) to the Financial Statements.
The Company continues to adopt appropriate best practices in
order to ensure unqualified Financial Statements.
Separate Posts of Chairman and CEO
Mr. Atul Punj is the Chairman and Managing Director and hence,
the same is not applicable.
Reporting of Internal Auditor
The Internal Auditor reports directly to the Audit Committee.
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Shareholder InformationGeneral Body MeetingsThe date, time and venue of the last three Annual General Meetings are given below.
Table 10: Details of last three Annual General Meetings
Financial Year Date Time VenueNo. of Special
Resolutions Passed
2012-13 August 02, 2013 10.30 A.M. Air Force Auditorium, Subroto Park,New Delhi 110010
1
2013-14 August 04, 2014 10.30 A.M. Air Force Auditorium, Subroto Park,New Delhi 110010
5
2014-15 August 14, 2015 10.30 A.M. Air Force Auditorium, Subroto Park,New Delhi 110010
1
Annual General Meeting 2016
Date August 10, 2016
Venue Air Force Auditorium, Subroto Park, New Delhi 110 010
Time 10.30 A.M.
Book Closure August 3, 2016 to August 10, 2016 (both days inclusive)
Calendar of Financial year ended March 31, 2016The meetings of Board of Directors for approval of Quarterly Financial Results during the Financial Year ended March 31, 2016 were held on the following dates:
First quarter August 14, 2015
Second quarter November 06, 2015
Third quarter February 12, 2016
Fourth quarter and Annual May 27, 2016
Tentative Calendar for Financial Year ending March 31, 2017The tentative dates of meeting of Board of Directors for consideration of quarterly financial results for the financial year ending March 31, 2017 are as follows:
First quarter Second week of August 2016
Second quarter Second week of November 2016
Third quarter Second week of February 2017
Fourth quarter and annual Last week of May 2017
Listing Details
Name of Stock Exchange Stock code / Trading Symbol
BSE Limited (BSE) 532693
National Stock Exchange of India Limited (NSE) PUNJLLOYD
ISIN INE701B01021
Listing FeesAnnual listing fees for the year 2016 – 17 has been paid by the Company to the Stock Exchanges.
Depository FeesAnnual Custody /Issuer fees for the year 2016-17 to National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are in the process of payment.
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Debt Securities1. Listing on Wholesale Debt Market (WDM) on BSE
2. Debenture Trustee : IDBI Trusteeship Services Limited
Stock DataTable 11 below gives the monthly high and low prices and volumes of Company’s (Punj Lloyd) equity shares at BSE Limited (BSE) and the National Stock Exchange Limited (NSE) for the year 2015-16.
Table 11: High and Low Prices and Trading Volumes at the BSE and NSE
Month BSE (in ` Per Share) NSE (in ` Per Share)
High Low Volume (Nos.) High Low Volume (Nos.)
Apr 2015 33.70 27.80 5,877,057 29.60 28.80 1,211,795
May 2015 29.90 20.75 23,458,462 25.25 24.10 2,748,351
Jun 2015 25.75 21.00 12,978,376 24.85 23.40 1,550,770
Jul 2015 30.20 23.10 16,076,639 27.95 26.75 1,099,142
Aug 2015 35.80 21.05 24,629,456 26.40 23.90 3,415,302
Sep 2015 26.50 22.75 7,057,168 30.70 29.50 937,165
Oct 2015 29.25 23.70 11,866,879 26.80 25.60 1,008,431
Nov 2015 27.20 21.70 6,850,272 27.20 25.55 1,992,885
Dec 2015 28.45 24.00 9,400,866 27.65 26.70 1,051,302
Jan 2016 31.65 22.95 14,240,689 26.50 25.60 1,336,305
Feb 2016 26.05 21.65 6,069,003 22.50 21.70 613,791
Mar 2016 24.55 21.70 5,396,470 22.90 22.30 637,425
Source: BSE and NSE website
Stock PerformanceChart A: Share prices of Punj Lloyd Limited verses Sensex Chart B: Share prices of Punj Lloyd Limited verses Nifty
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Share Transfer Agents and Share Transfer and Demat SystemThe Company registers share transfers through its share transfer agents, whose details are given below.
Karvy Computershare Pvt. Ltd.
Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Serilingampally,
Hyderabad – 500 032. Tel.: +91 40-67162222 Fax: +91 40-23001153 E-mail: [email protected]
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Punj Lloyd | Annual Report 2015-2016 65
In compliance with the SEBI circular dated December 27, 2002,
requiring share registry in terms of both physical and electronic
mode to be maintained at a single point, Punj Lloyd has
established connections with National Securities Depositories
Limited (NSDL) and Central Depository Services (India) Limited
(CDSL), the two depositories, through its Share Transfer Agent.
Shares received in physical form are processed and the share
certificates are returned within 10 to 15 days from the date of
receipt, subject to the documents being complete and valid in
all respects.
The Company’s equity shares are under compulsory
dematerialised trading. Shares held in the dematerialised form
are electronically held with the Depositories. The Registrar and
Share Transfer Agent of the Company periodically receives data regarding the beneficiary holdings, so as to enable them to update their records and send all corporate communications, etc.
As on March 31, 2016, there were 349593 shareholders holding 332071008 shares of ` 2 each in electronic form. This constitutes 99.99% of the total paid up capital of the Company.
The Company obtains half-yearly certificate of compliance from a Company Secretary in Practice, with regard to the share transfer formalities as required under SEBI Regulations and files same with the Stock Exchanges.
There are no legal proceedings against the Company on any share transfer matter. Table 12 gives details about the nature of complaints and their status as on March 31, 2016.
Table 12: Number and nature of complaints for the year 2015-16
Particulars Non-Receipt Non-Receipt of Dividend
Others (Non-Receipt of Annual Reports/ Non Receipt of Demat Credit, etc.)
Total
Received during the year 2 10 4 16
Attended during the year 2 10 4 16
Pending as on March 31, 2016 NIL NIL NIL NIL
Green InitiativeThe Ministry of Corporate Affairs (MCA) had undertaken a “Green Initiative in Corporate Governance” by allowing paperless compliances by Companies, whereby companies have been permitted to send various notices / documents to its shareholders through electronic mode to the registered e-mail addresses of shareholders. The Companies Act, 2013 also allows the Company to send various notices / documents to its shareholders through electronic mode to the registered e-mail addresses of shareholders.
Securities and Exchange Board of India (SEBI) have also, in line with the aforesaid MCA initiatives, permitted listed entities to supply soft copies of Annual Reports to all those shareholders who have registered their email addresses for the purpose.
In view of the Green Initiatives announced as above, the Company shall send all documents to Shareholders like General Meeting Notices (including AGM), Annual Reports comprising Audited Financial Statements, Directors’ Report, Auditors’ Report and any other future communication (hereinafter referred as “documents”) in electronic form, in lieu of physical form, to all those shareholders, whose email address is registered with Depository Participant (DP) / Registrars & Share Transfer Agents (RTA) (hereinafter ‘registered email address’) and made available to us, which has been deemed to be the shareholder’s registered email address for serving document.
To enable the servicing of documents electronically to the registered email address, we request the shareholders to keep their email addresses validated/ updated from time to
time. We wish to reiterate that Shareholders holding shares in electronic form are requested to please inform any changes in their registered e-mail address to their DP from time to time and Shareholders holding shares in physical form have to write to our Registrar and Transfer Agent, at their specified address, so as to update their registered email address from time to time.
Please note that the Annual Report of the Company will also be available on the Company’s website www.punjlloyd.com for ready reference. Shareholders are also requested to take note that they will be entitled to be furnished, free of cost, the aforesaid documents, upon receipt of requisition from the shareholder, any time, as a member of the Company.
Transfer of unpaid / unclaimed amounts to Investor Education and Protection Fund
During the year, the Company has credited `3,36,217 lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules 2001.
Equity Shares in the Suspense AccountAs per SEBI Regulations, an aggregate of 2310 equity shares are lying in the pool account /suspense account in respect of 41 shareholders. None of the shareholders approached the Company for transfer of shares from suspense account during the year. The voting rights on the shares outstanding in the suspense account as on March 31, 2016 shall remain frozen till the rightful owner of such shares claims the shares.
Annexure II — Corporate Governance Report
Directors' Report66
Shareholding Pattern and DistributionTables 13 and 14 gives the shareholding pattern and distribution.
Table 13: Shareholding Pattern as on March 31, 2016
CategoryAs on March 31, 2016
Total No. of Shares Percentage
A. Shareholding of Promoter and Promoter Group
a. Indian Promoters 45,388,590 13.67
b. Foreign Promoters 77,121,970 23.22
Total shareholding of Promoter & Promoter Group 1,22,510,560 36.89
B. Public Shareholding
1. Institutions
a. Mutual Funds / UTI 3,061 0.0
b. Foreign Portfolio Investors 10,001,435 3.01
c. Banks / Financial Institutions 22,803,219 6.87
2. Non-Institutions
a. Bodies Corporate 25,803,033 7.77
b. Resident Individuals 142,511,127 42.91
c. NBFCs Registered with RBI 32,588 0.01
3. Others
a. Non Resident Indians 7,682,987 2.31
b. Trusts 32,250 0.01
c. Clearing Members 714,985 0.22
d. Foreign National 500 0.00
Total Public Shareholding 209,585,185 63.11
C. Shares held by Custodians and against which Depository Receipts have been issued
a. Promoter & Promoter Group NIL N.A.
b. Public NIL N.A.
Grand Total 332,095,745 100
Table 14: Distribution of shareholding by share class as on March 31, 2016
S. No. Shareholding Class No. of shareholders % of Shareholders No. of shares held Shareholding %
1 1 – 5,000 345,638 97.55 82,836,096 24.94%
2 5,001 – 10,000 5,024 1.42 18,405,700 5.54%
3 10,001 – 20,000 2,120 0.60 15,765,626 4.75%
4 20,001 – 30,000 539 0.15 6,713,685 2.02%
5 30,001 – 40,000 283 0.08 5,128,777 1.55%
6 40,001 – 50,000 148 0.04 3,399,697 1.02%
7 50,001 – 100,000 326 0.09 11,832,759 3.56%
8 100,001 and above 245 0.07 188,013,405 56.61%
Total 354,323 100.00 % 332,095,745 100.00%
Annexure II — Corporate Governance Report
Punj Lloyd | Annual Report 2015-2016 67
Plant LocationsThe Company is engaged in providing integrated design, engineering procurement, construction and project management services for energy and infrastructure sector. The projects are executed at the sites provided by the clients. The Company has a Central workshop situated at Banmore, Madhya Pradesh for carrying out repair and maintenance of construction equipment. For its defence business and for precision machining and systems integration, the Company has a machining and integration facilities at Plot No. Part of L1, Industrial Area, Ghirongi, Malanpur, Dist. Bhind, Madhya Pradesh.
Investor Correspondence Address
Company
Mr. Dinesh ThairaniCompliance OfficerPunj Lloyd LimitedCorporate Office I, 78, Institutional Area, Sector 32, Gurgaon 122001Tel. No. +91-124.262.0493; Fax No. +91-124.262.0111E-mail: [email protected]
Registrars
Mr. K. S. ReddyAssistant General ManagerKarvy Computershare Private LimitedKarvy Selenium Tower B, Plot 31-32, Gachibowli,Financial District, Nanakramguda, Serilingampally, Hyderabad – 500 032.Tel.: +91-40--67162222; Fax: +91-40-23001153E-mail: [email protected]
Debenture Trustee
IDBI Trusteeship Services LimitedAsian building, Ground Floor,17, R. Kamani Marg,Ballard Estate Mumbai - 400 001
Depositories
National Securities Depository LimitedTrade World, 4th Floor, Kamala Mills Compound, Senapati Bapat MargLower Parel, Mumbai 400013Tel.: +91-22-2499 4200; Fax: +91-22-2497 6351E-mail: [email protected]
Central Depository Services (India) LimitedPhiroze Jeejeebhoy Towers, - Floor, Dalal StreetMumbai 400 001Tel.: +91-22-2272 3333; Fax: +91-22-2272 3199E-mail: [email protected]
For Punj Lloyd Limited
Atul PunjChairman & Managing Director
Place: GurgaonDate: May 27, 2016
Annexure II — Corporate Governance Report
Directors' Report68
To,
The Members of Punj Lloyd Limited
We have examined the compliance of conditions of corporate governance by Punj Lloyd Limited (“the Company”) for the year ended on March 31, 2016, as stipulated in clause 49 of the Listing Agreement of the Company with the stock exchanges for the period April 01, 2015 to November 30, 2015 and as per the relevant provisions contained in Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Regulations’), pursuant to the Listing Agreement of the Company with the stock exchanges for the period December 01, 2015 to March 31, 2016.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company, for ensuring compliance of the conditions of the corporate governance as stipulated in said clause 49 of the Listing Agreement and SEBI Regulations. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and as per representations made by Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the clause 49 of Listing Agreement and the SEBI Regulations.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered AccountantsFirm Registration No.: 001076N/N500013
per Anupam KumarPartnerMembership No. 501531
Place : GurgaonDate : May 27, 2016
To,
The Board of Directors,Punj Lloyd LimitedCorporate Office 1, 78,Institutional Area, Sector 32,Gurgaon 122 001
Dear Sirs,We, the undersigned hereby certify to the Board that:
(a) We have reviewed financial statements and the cash flow statement for the year ended March 31, 2016 of Punj Lloyd Limited (the Company) and that to the best of our knowledge and belief:
(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading.
(ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s Code of Conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting in the Company and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting. We have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the Auditors and Audit Committee
(i) Significant changes in internal control over financial reporting during the year;
(ii) Significant changes in accounting policies during the year and the same have been disclosed in the notes to the financial statements; and
(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting.
Yours Faithfully
Atul Punj Rahul MaheshwariChairman & Managing Director Chief Financial Officer
Place : GurgaonDate : May 27, 2016
CEOCompliance with Conditions of Corporate Governance
Punj Lloyd | Annual Report 2015-2016 69
Format for the Annual Report on CSR Activities to be included in the Board’s Report
S. No.
1 A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
Company’s CSR policy is focused on enhancing the lives of the local community in which it operates.
The CSR Policy is available on the website of the Company at the following link: http://punjlloydgroup.com/investors/sites/default/files/pdf/CSR%20Policy.pdf
2 The Composition of the CSR Committee Mr. Atul Punj (Executive Director, Chairman of the Committee),
Mr. Shiv Punj (Executive Director),
Mr. Uday Walia (Independent Director)
3 Average net profit/(loss) of the company for last three financial years (in ` Crores)
(388.58)
4 Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)
Nil
5 Details of CSR spent during the financial year Nil
a Total Amount to be spent for the financial year Nil
b Amount unspent NA
c Manner in which the amount spent during the financial year is detailed below
(1) (2) (3) (4) (5) (6) (7) (8)
S. No. CSR project or activity
sector in which the project is covered
Projects or programs (1) Local area or other (2) Specify the State and district where projects or Programs was undertaken
Amount outlay
(budget)
project or
programs wise
Amount spent on the projects or programs Subheads: (1) Direct expenditure on projects or programs. (2) Overheads :
cumulative expenditure upto the reporting period.
Amount
spent: Direct
or through
implementing
agency
NA
*Give details of implementing agency:
6 Reasons for not spending full amount NA
7 Responsibility Statement The CSR Committee hereby confirms that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.
Atul Punj(Chairman CSR Committee)
Date : May 27, 2016Place : Gurgaon
Annexure III — Corporate Social Responsibilty Report (CSR)
Directors' Report70
Form No. MR-3Secretarial Audit ReportFor The Financial Year Ended 31st March 2016
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]
To,
The MembersPunj Lloyd LimitedCIN: L74899DL1988PLC033314Punj Lloyd House17-18, Nehru Place,New Delhi 110019.
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Punj Lloyd Limited (hereinafter called the “Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31st March 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2016 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) so far as they are applicable to the Company:-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992/2015;
(c) *The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009:
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999/The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(e) *The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(g) *The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and
(h) *The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; and
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, applicable with effect from 1st December, 2015.
* No event took place under these Regulations during the Audit period.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standard of Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) issued by The Institute of Company Secretaries of India, applicable with effect from 1st July, 2015; and
(ii) The Listing Agreements entered into by the Company with the following Stock Exchange(s);
(a) BSE Limited
(b) National Stock Exchange of India Limited
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations,Guidelines, Standards, etc. mentioned above.
I further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on test-check basis, the Company has complied with the following laws applicable specifically to the Company:
(a) The Building and Other Construction Workers’ Welfare Cess Act, 1996;
(b) Petroleum Act, 1934 and rules made thereunder;
(c) The Mines Act, 1952 and rules made thereunder;
(d) Inter State Migrant Workmen Act, 1979; and
(e) Explosives Act, 1884 read with Rules made thereunder.
Annexure IV — Secretarial Audit Report
Punj Lloyd | Annual Report 2015-2016 71
I further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’ views, if any, are captured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period:
(i) The Company has altered its Articles of Association in its Annual General Meeting held on 14th August 2015;
(ii) The Board in its meeting held on 12/02/2016 has approved grant of following stock option ESOP 2005 and ESOP 2006 plans of the Company to eligible employees as per details:
A. Employees Stock Option Plan 2005 - 29,72,760 Stock Options
B. Employees Stock Option Plan 2006 - 47,82,865 Stock Options
However the Company has not allotted any shares under above mentioned Employees Stock Option Plans during the Audit Period.
(iii) The Company in its Extra-ordinary General Meeting held on 30th May 2015 has taken approval to convert debt/loan into equity shares from the members by way of Special Resolution.
I further report that during the audit period no events occurred which had a major bearing on the Company’s affairs in pursuance of above referred laws, rules, regulations, guidelines and standards.
For Suresh Gupta & AssociatesCompany Secretaries
Suresh GuptaFCS No.: 5660CP No.:5204
Date: May 27, 2016Place: New Delhi
This report is to be read in conjunction with my letter of even date which is marked as ‘Annexure A’ and forms an integral part of this report.
Annexure A
To,The MembersPunj Lloyd LimitedCIN: L74899DL1988PLC033314Punj Lloyd House17-18 Nehru PlaceNew Delhi 110019
My report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of the company and my responsibility is to express an opinion on these secretarial records based on our audit.
2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.
4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to future viability of the company nor of the efficiency or effectiveness with which the management has conducted the affairs of the company.
For Suresh Gupta & AssociatesCompany Secretaries
Suresh GuptaFCS No.: 5660CP No.:5204
Date: May 27, 2016Place: New Delhi
Annexure IV — Secretarial Audit Report
Directors' Report72
Annexure V — Details of Remuneration of Employees and Directors
(Section 197 of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)
1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year.
and
2. The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;-
Name Designation
Directors Remuneration to Median
Remuneration-(Total Annual Salary)
Directors Remuneration to
Median Remuneration – (Prorated Salary based on Tenure)
Percentage Increase in Remuneration
J.P. Chalasani (resigned on 31.3.2016)
Managing Director & Group CEO
71.31 71.31 0%
P.N. Krishnan (resigned on 25.9.2015)
Director – Finance 40.18 19.42 0%
Luv Chhabra(resigned on 11.5.2015)
Director 24.56 2.73 0%
Nidhi K. Narang (resigned on 30.9.2015)
Chief Financial Officer N.A. N.A. 0%
Shamik Roy (appointed on 6.11.2015 and resigned on 25.3.2016)
Chief Financial Officer N.A. N.A. 0%
Dinesh Thairani Group President – Legal & Company Secretary
N.A. N.A. 0%
3. The percentage increase in the median remuneration of employees in the financial year.
The percentage increase in the median remuneration of employees in the financial year 2015-16 is 2.2%
4. The number of permanent employees on the rolls of the Company.
The number of permanent employees on the rolls of the Company as on March 31, 2016 is 5849 across all the locations globally.
5. The explanation on the relationship between average increase in remuneration and Company performance.
The reward philosophy of the Company is to provide market competitive reward system that has a strong linkage to and drives performance culture. The total compensation is a mix of Fixed Pay and Variable pay. Variable compensation is directly linked to an individual’s performance rating and business performance.
6. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company.
Remuneration of the Key Managerial persons is as per the industry standards. Keeping in mind the company performance the Key Managerial Personnel are not being given any increase in their fixed salaries.
7. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year.
Punj Lloyd | Annual Report 2015-2016 73
Close Price April 01, 2015 March 31, 2016 % Change
NSE ` 30.45 ` 22.40 -26.43%
BSE ` 30.50 ` 22.45 -26.39%
Market Cap April 01, 2015 March 31, 2016 % Change
NSE ` 1011.23 Cr. ` 743.89 Cr. -26.43%
BSE ` 1012.89 Cr. ` 745.55 Cr. -26.39%
IPO vs March 31, 2016 IPO March 31, 2016 % Change
Price (adjusted) ` 140.00 ` 22.45 -83.96%
Price / Earning April 01, 2014 March 31, 2016 % Change
NSE N.A. N.A. N.A.
BSE N.A. N.A. N.A.
8. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.
Considering the Company performance Key Managerial Personnel are not given any increase in their fixed salary in FY 2015-16 whereas other employees were given an average salary increase of 6.3% to ensure that junior staff gets inflationary increase and remains motivated.
9. Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company.
The five Key Managerial Personnel in the financial year 2015-16 are: J. P. Chalasani, MD & Group CEO P. N. Krishnan, Director – Finance Nidhi Narang, CFO Shamik Roy, CFO Dinesh Thairani – Group President - Legal & Company Secretary
Remuneration of the Key Managerial persons is as per the industry standards. Keeping in mind the company performance the key managerial personnel are paid partial variable salaries, based on functional performance and individual performance. They were not given increase in fixed salaries. The MD and Group CEO was not paid variable salary since his variable is linked to company performance only.
10. The key parameters for any variable component of remuneration availed by the directors.
In Financial Year 2015-16, no variable was paid to the directors.
11. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year.
The highest paid director is the MD & Group CEO. In FY 2015-16, there is one employee based overseas whose salary is higher than the salary of MD & Group CEO. The ratio of the remuneration of the MD & Group CEO vs. this employee is 0.913.
12. Affirmation that the remuneration is as per the remuneration policy of the Company.
It is hereby affirmed that the remuneration paid during the year 2015-16 is as per the Remuneration Policy of the Company.
Annexure V — Details of Remuneration of Employees and Directors
Directors' Report74
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Punj Lloyd | Annual Report 2015-2016 75
Sl.
No
.E
mp
loye
e N
ame
Tota
l CT
C
Pai
d (`
)D
esi
gn
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nd
Nat
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An
nex
ure
VI —
De
tails
of
Em
plo
yee
s
Directors' Report76
Sl.
No
.E
mp
loye
e N
ame
Tota
l CT
C
Pai
d (`
)D
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gn
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Nat
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re
Ltd
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An
nex
ure
VI —
De
tails
of
Em
plo
yee
s
Punj Lloyd | Annual Report 2015-2016 77
Sl.
No
.E
mp
loye
e N
ame
Tota
l CT
C
Pai
d (`
)D
esi
gn
atio
n a
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Nat
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) Ltd
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.M.,
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254
Pet
rofa
c
An
nex
ure
VI —
De
tails
of
Em
plo
yee
s
Directors' Report78
Sl.
No
.E
mp
loye
e N
ame
Tota
l CT
C
Pai
d (`
)D
esi
gn
atio
n a
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Nat
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taxa
ble
val
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f per
qui
site
s, c
omp
any
cont
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ion
to P
rovi
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t Fu
nd a
nd S
uper
annu
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n Fu
nd.
2.
The
abov
e em
plo
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are
/wer
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of t
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omp
any
3.
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cond
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Punj Lloyd | Annual Report 2015-2016 79
Annexure VII
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo(Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014)
A. Conservation of Energy and Technology AbsorptionBeing in the construction industry, the provisions of Section 134(3)(m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption do not apply to the Company. Accordingly, these particulars have not been provided.
B. Foreign Exchange Earnings and OutgoTotal Foreign Exchange Used in terms of actual outflows and Earned in terms of actual inflows:
Used (` Crores)
Project material consumed and cost of goods sold 548.09
Employee benefits expense 2.21
Foreign branches/unincorporated joint venture expenses 1,363.89
Finance costs 16.21
Contractor charges 370.34
Site expenses 6.77
Diesel and fuel 1.14
Repair and maintenance 0.93
Freight and cartage 3.96
Hire charges 12.02
Rent 0.24
Rates and taxes 0.28
Insurance 1.03
Consultancy and professional 3.39
Travelling and conveyance 0.85
Miscellaneous 5.02
Earned (` Crores)
Contract revenues 1,442.89
Sales of trade goods 268.21
Hiring charges 1.11
Interest received 6.98
Management services 59.94
Others 42.97
For and on behalf of the Board
Place : Gurgaon Atul PunjDate : May 27, 2016 Chairman & Managing Director
Directors' Report80
Annexure VIII
Particulars of Contracts or Arrangements with Related Parties Referred to in Section 188(1) of the Companies Act, 2013
Form No. AOC. 2(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm’s length basis:
(a) Name(s) of the related party and nature of relationship
Nil
(b) Nature of contracts/arrangements/transactions
(c) Duration of the contracts/arrangements/transactions
(d) Salient terms of the contracts or arrangements or transactions including the value, if any
(e) Justification for entering into such contracts or arrangements or transactions
(f) Date(s) of approval by the Board
(g) Amount paid as advances, if any:
(h) Date on which the special resolution was passed in general meeting as required under first proviso to Section 188 of the Companies Act, 2013
2. Details of material contracts or arrangement or transactions at arm’s length basis:
(a) Name(s) of the related party and nature of relationship:
PL Sunshine Limited, step-down wholly owned subsidiary company.
Punj Lloyd Pte. Limited, wholly-owned subsidiary company.
(b) Nature of contracts/ arrangements/ transactions:
Rendering of Engineering, Procurement & Construction (EPC) services.
Sale of traded goods.
(c) Duration of the contracts/ arrangements/ transactions:
EPC contract w.r.t. a specific project only and hence one time transaction.
Recurring
(d) Salient terms of the contracts or arrangements or transactions including the value, if any:
Rendering of EPC services comprises Design, Engineering, Procurement, Testing, Commissioning and handing over of 20 MW Solar Power Plant, along with the related Transmission Line.
Sale of traded goods comprises sale of steel billets and related items.
Further details are mentioned in Note 29 to the Standalone Financial Statements.
(e) Date(s) of approval by the Board, if any:
N.A. N.A.
(f) Amount paid as advances, if any: Nil Nil
For and on behalf of the Board
Place : Gurgaon Atul PunjDate : May 27, 2016 Chairman & Managing Director
Punj Lloyd | Annual Report 2015-2016 81
Annexure IX
EXTRACTS OF ANNUAL RETURN(As required under Section 134(3)(a) of the Companies Act,
2013 read with Rule 12(1) of Companies (Management & Administration) Rules, 2014)
FORM NO. MGT.9
EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31-03-2016[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. Registration and Other Details: i) CIN: - L74899DL1988PLC033314
ii) Registration Date: September 26, 1988
iii) Name of the Company: Punj Lloyd Limited
iv) Category / Sub-Category of the Company: Public Limited Company
v) Address of the Registered office and contact details: Punj Lloyd House, 17-18, Nehru Place, New Delhi – 110019, Website: www.punjlloyd.com, Email: [email protected], Tel: +91 124 262 0123 Fax: +91 124 262 0111
vi) Whether listed company Yes / No
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any: Karvy Computershare Pvt. Ltd. Karvy Selenium Tower B, Plot 31 – 32, Gachibowli, Financial District, Nanakramguda, Hyderabad – 500 032
II. Principal Business Activities of the Company All the business activities contributing 10% or more of the total turnover of the company shall be stated:-
Sl. No.
Name and Description of main products/ servicesNIC Code of
the Product/service% to total turnover
of the company
1 Engineering, procurement and construction activities 42101, 42201, 42203, 42901 81.48%
2 Trading of steel products 46620 16.64%
III. Particulars of Holding, Subsidiary and Associate Companies
Sl.No.
Name and Address of the Company CIN/GLNHolding/
Subsidiary/Associate
% ofShares Held
Applicable Section
1 Spectra Punj Lloyd Limited U51909DL1985PLC021607 Subsidiary 100.00 2(87)(ii)
2 Punj Lloyd Industries Limited U74899DL1993PLC054888 Subsidiary 99.99 2(87)(ii)
3 Punj Lloyd Raksha Systems Private Limited U74999DL2013PTC247911 Subsidiary 51.18 2(87)(ii)
4 Atna Investments Limited U67120DL1989PLC035393 Subsidiary 100.00 2(87)(ii)
5 PLN Construction Limited U74899DL1997PLC088400 Subsidiary 100.00 2(87)(ii)
6 PL Engineering Limited U45201DL2006PLC156532 Subsidiary 80.32 2(87)(ii)
7 Punj Lloyd Engineering Pte. Ltd. N.A. Subsidiary 80.32 2(87)(ii)
8 Simon Carves Engineering Limited N.A. Subsidiary 80.32 2(87)(ii)
9 Punj Lloyd Infrastructure Limited U45400DL2007PLC161684 Subsidiary 100.00 2(87)(ii)
10 Punj Lloyd Solar Power Limited U40106DL2010PLC211739 Subsidiary 100.00 2(87)(ii)
11 Khagaria Purnea Highway Project Limited U45203DL2011PLC214857 Subsidiary 100.00 2(87)(ii)
12 Indraprastha Metropolitan Development Limited U45200DL2012PLC232075 Subsidiary 100.00 2(87)(ii)
13 PL Surya Urja Limited U40106DL2013PLC257153 Subsidiary 100.00 2(87)(ii)
14 PL Sunshine Limited U40106DL2015PLC277555 Subsidiary 100.00 2(87)(ii)
Directors' Report82
Annexure IX
Sl.No.
Name and Address of the Company CIN/GLNHolding/
Subsidiary/Associate
% ofShares Held
Applicable Section
15 PL Surya Vidyut Limited U40300DL2015PLC287282 Subsidiary 100.00 2(87)(ii)
16 PL Sunrays Power Limited U40106DL2015PLC287432 Subsidiary 100.00 2(87)(ii)
17 PL Solar Renewable Limited U40300DL2015PLC287804 Subsidiary 100.00 2(87)(ii)
18 Punj Lloyd Upstream Limited U11100DL2007PLC161686 Subsidiary 58.06 2(87)(ii)
19 Punj Lloyd Aviation Limited U62200DL2007PLC163930 Subsidiary 100.00 2(87)(ii)
20 Sembawang Infrastructure (India) Private Limited U45203DL1996 PTC190367 Subsidiary 100.00 2(87)(ii)
21 Indtech Global Systems Limited U74900DL1982PLC014233 Subsidiary 99.99 2(87)(ii)
22 Shitul Overseas Placement and Logicstic Ltd U74910DL2009PLC191789 Subsidiary 100.00 2(87)(ii)
23 PLI Ventures Advisory Services Private Limited* U74140DL2010 PTC206852 Subsidiary 100.00 2(87)(ii)
24 Dayim Punj Lloyd Construction Contracting Company Limited
N.A. Subsidiary 51.00 2(87)(ii)
25 Punj Lloyd International Limited N.A. Subsidiary 100.00 2(87)(ii)
26 Punj Lloyd Kazakhastan, LLP N.A. Subsidiary 100.00 2(87)(ii)
27 Punj Lloyd Infrastructure Pte. Ltd. N.A. Subsidiary 100.00 2(87)(ii)
28 Punj Lloyd (B) Sdn. Bhd.* N.A. Subsidiary 100.00 2(87)(ii)
29 Punj Lloyd Aviation Pte. Ltd. N.A. Subsidiary 100.00 2(87)(ii)
30 Christos Aviation Limited. N.A. Subsidiary 100.00 2(87)(ii)
31 Punj Lloyd Pte. Limited. N.A. Subsidiary 100.00 2(87)(ii)
32 PT Sempec Indonesia N.A. Subsidiary 100.00 2(87)(ii)
33 PT Punj Lloyd Indonesia N.A. Subsidiary 100.00 2(87)(ii)
34 Buffalo Hills Limited. N.A. Subsidiary 100.00 2(87)(ii)
35 Indtech Trading FZE N.A. Subsidiary 100.00 2(87)(ii)
36 Punj Lloyd Engineers & Constructors Pte. Ltd. N.A. Subsidiary 100.00 2(87)(ii)
37 Punj Lloyd Engineers & Constructors Zambia Ltd. N.A. Subsidiary 100.00 2(87)(ii)
38 PLI Ventures Limited* N.A. Subsidiary 100.00 2(87)(ii)
39 Punj Lloyd Kenya Ltd. N.A. Subsidiary 100.00 2(87)(ii)
40 PL Global Developers Pte. Ltd.* N.A. Subsidiary 100.00 2(87)(ii)
41 Punj Lloyd Thailand Co. Ltd. N.A. Subsidiary 49.00 2(87)(i)
42 Punj Lloyd Oil & Gas (Malaysia) Sdn. Bhd. N.A. Subsidiary 100.00 2(87)(ii)
43 Punj Lloyd Sdn. Bhd. N.A. Subsidiary 100.00 2(87)(ii)
44 Punj Lloyd Delta Renewables Pte. Ltd. N.A. Subsidiary 51.00 2(87)(ii)
45 Punj Lloyd Delta Renewables Pvt. Ltd. U51103DL2008PTC180660 Subsidiary 51.00 2(87)(ii)
46 Punj Lloyd Delta Renewables Bangladesh Ltd. N.A. Subsidiary 51.00 2(87)(ii)
47 Sembawang Engineers & Constructors Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
48 Sembawang Development Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
49 Sembawang Libya for General Contracting & Real Estate Investment Joint Stock Company*
N.A. Subsidiary 63.30 2(87)(ii)
50 Contech Trading Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
51 Construction Technology (B) Sdn. Bhd.* N.A. Subsidiary 97.38 2(87)(ii)
Punj Lloyd | Annual Report 2015-2016 83
Sl.No.
Name and Address of the Company CIN/GLNHolding/
Subsidiary/Associate
% ofShares Held
Applicable Section
52 Sembawang Mining (Kekal) Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
53 PT Indo Precast Utama* N.A. Subsidiary 97.38 2(87)(ii)
54 PT Indo Unggul Wasturaya* N.A. Subsidiary 65.24 2(87)(ii)
55 Sembawang (Tianjin) Construction Engineering Co. Ltd. N.A. Subsidiary 68.17 2(87)(ii)
56 Sembawang Infrastructure (Mauritius) Ltd.* N.A. Subsidiary 97.38 2(87)(ii)
57 Sembawang UAE Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
58 Sembawang Malaysia Sdn. Bhd. N.A. Subsidiary 97.38 2(87)(ii)
59 Jurubina Sembawang (M) Sdn. Bhd. N.A. Subsidiary 97.28 2(87)(ii)
60 Tueri Aquila FZE N.A. Subsidiary 97.38 2(87)(ii)
61 Sembawang Consult Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
62 Sembawang Equity Capital Pte. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
63 Sembawang Hongkong Ltd. N.A. Subsidiary 97.38 2(87)(ii)
64 Sembawang (Tianjin) Investment Management Co. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
65 PT Sembawang Indonesia N.A. Subsidiary 97.38 2(87)(ii)
66 Reliance Contractors Pvt. Ltd. N.A. Subsidiary 97.38 2(87)(ii)
67 Sembawang E&C Malaysia Sdn. Bhd. N.A. Subsidiary 97.38 2(87)(ii)
68 Thiruvananthpuram Road Development Company Ltd. U45203MH2004PLC144789 Joint Venture 50.00 2(6)
69 Ramprastha Punj Lloyd Developers Pvt. Ltd. U45400DL2007PTC166937 Joint Venture 50.00 2(6)
70 PLE TCI Engenharia LTDA N.A. Joint Venture 39.36 2(6)
71 AeroEuro Engineering India Pvt. Ltd. U74900DL2011PTC219149 Joint Venture 40.16 2(6)
72 PT Kekal Adidaya N.A. Joint Venture 48.69 2(6)
73 Sembawang Precast System LLC* N.A. Joint Venture 48.69 2(6)
74 Sembawang Caspi Engineers and Constructors LLP* N.A. Joint Venture 48.69 2(6)
75 Air Works India (Engineering) Pvt. Ltd. U74210MH1986PTC040889 Associates 23.30 2(6)
76 Reco Sin Han Pte. Ltd.* N.A. Associates - 2(6)
77 Punj Lloyd Dynamic LLC N.A. Joint Venture 48.00 2(6)
78 Punj Lloyd Building & Infrastructure Private Limited, #
N.A. Subsidiary 100 2(87)(ii)
79 Graystone Bay Ltd.* N.A. Subsidiary - 2(87)(ii)
80 Sembawang Bahrain SPC* N.A. Subsidiary - 2(87)(ii)
81 Sembawang of Singapore – Global Project Underwriters Pte. Limited *
N.A. Subsidiary 97.38 2(87)(ii)
82 Sembawang of Singapore – Global Project Underwriters Limited *
N.A. Subsidiary 97.38 2(87)(ii)
83 PL Delta Technologies Limited @ N.A. Subsidiary 80.32 2(87)(ii)
84 PLE TCI Engineering Limited @ N.A. Joint Venture 39.36 2(6)
* Entities either in the process of strike-of/liquidation or struck-off/ liquidated during the year.
# Punj Lloyd Limited has subscribed to the Memorandum of the Company, but capital is yet to be infused.
@ Investment held for sale in the near future.
N.A.: Not Available
Annexure IX
Directors' Report84
IV. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity)
(i) Category-wise Share Holding
Category ofShareholder
No. of Shares Held at theBeginning of the Year i.e. April 01, 2015
No. of Shares Held at theEnd of the Year i.e. March 31, 2016
% Change
During the YearDemat Physical Total
% of Total Shares
Demat Physical Total% of Total
Shares
Promoter and Promoter Group
1. Indian
Individual /HUF 23,365,245 0 23,365,245 7.04 23,240,245 0 23,240,245 7.00 -0.04
Central Government/State Government(s)
0 0 0 0.00 0 0 0 0.00 0.00
Bodies Corporate 22,148,345 0 22,148,345 6.67 22,148,345 0 22,148,345 6.67 0.00
Financial Institutions / Banks
0 0 0 0.00 0 0 0 0.00 0.00
Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total A(1) : 45,513,590 0 45,513,590 13.71 45,388,590 0 45,388,590 13.67 -0.04
2. Foreign
Individuals (NRIs/Foreign Individuals)
1,430,540 0 1,430,540 0.43 1,430,540 0 1,430,540 0.43 0.00
Bodies Corporate 75,691,430 0 75,691,430 22.79 75,691,430 0 75,691,430 22.79 0.00
Institutions 0 0 0 0.00 0 0 0 0.00 0.00
Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00
Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total A(2) : 77,121,970 0 77,121,970 23.22 77,121,970 0 77,121,970 23.22 0.00
Total A=A(1)+A(2) 122,635,560 0 122,635,560 36.93 122,510,560 0 122,510,560 36.89 -0.04
Public Shareholding
1. Institutions
Mutual Funds /UTI 3,003,167 0 3,003,167 0.90 3,061 0 3,061 0.00 -0.90
Financial Institutions /Banks
22,026,600 0 22,026,600 6.63 22,835,807 0 22,835,807 6.87 0.24
Central Government / State Government(s)
0 0 0 0.00 0 0 0 0.00 0.00
Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00
Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00
Foreign Institutional Investors
18,495,399 0 18,495,399 5.57 10,001,435 0 10,001,435 3.01 2.56
Foreign Venture Capital Investors
0 0 0 0.00 0 0 0 0.00 0.00
Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00
Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total B(1) : 43,525,166 0 43,525,166 13.10 32,840,303 0 32,840,303 9.88 -3.23
Annexure IX
Punj Lloyd | Annual Report 2015-2016 85
Category ofShareholder
No. of Shares Held at theBeginning of the Year i.e. April 01, 2015
No. of Shares Held at theEnd of the Year i.e. March 31, 2016
% Change
During the YearDemat Physical Total
% of Total Shares
Demat Physical Total% of Total
Shares
2. Non-Institutions
Bodies Corporate 33,379,155 90 33,379,245 10.05 25,802,943 90 25,803,033 7.77 -2.28
Individuals
(i) Individuals holding nominal share capital upto `1 lakh
115,081,070 23,449 115,104,519 34.66 130,087,247 23,602 130,110,849 39.18 4.52
(ii) Individuals holding nominal share capital in excess of `1 lakh
9,503,467 0 9,503,467 2.86 12,400,278 0 12,400,278 3.73 0.87
Others
CLEARING MEMBERS 834,664 0 834,664 0.25 714,985 0 714,985 0.22 -0.03
FOREIGN NATIONALS 500 0 500 0.00 500 0 500 0.00 0.00
NON RESIDENT INDIANS 7,079,929 1,045 7,080,974 2.13 7,681,942 1,045 7,682,987 2.31 0.18
TRUSTS 31,650 0 31,650 0.01 32,250 0 32,250 0.01 0.00
Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total B(2) : 165,910,435 24,584 165,935,019 49.97 176,720,145 24,737 176,744,882 53.23 3.26
Total B=B(1)+B(2) : 209,435,601 24,584 209,460,185 63.07 209,560,448 24,737 209,560,448 63.11 0.04
Total (A+B) : 332,071,161 24,584 332,095,745 100.00 332,071,008 24,737 332,095,745 100.00 0.00
Shares held by custodians for GDRs & ADRs
Promoter and Promoter Group
0 0 0 0.00 0 0 0 0.00 0.00
Public 0 0 0 0.00 0 0 0 0.00 0.00
GRAND TOTAL (A+B+C):
332,071,161 24,584 332,095,745 100.00 332,038,420 24,737 332,095,745 100.00
(ii) Shareholding of Promoters
Sl. No.
Shareholder’s Name
Shareholding at the Beginning of the Year i.e. April 01, 2015
Shareholding at the End of the Year i.e. March 31, 2016
% Change in Shareholding
during the Year
No. of Shares
% of Total Shares of the
Company
% of Shares Pledged/
Encumbered to Total Shares
No. of Shares
% of Total Shares of the
Company
% of Shares Pledged/
Encumbered to Total Shares
1 Cawdor Enterprises Pvt. Ltd. 75,691,430 22.79 79.56 75,691,430 22.79 79.56 0.00
2 Satya Narain Prakash Punj / Indu Rani Punj
10,537,281 3.17 0 10,537,281 3.17 0 0.00
3 Indu Rani Punj / Satya Narain Prakash Punj
9,997,065 3.01 0 9,997,065 3.01 0 0.00
4 Uday Punj (HUF) 781,246 0.24 0 671,246 0.20 0 -0.04
5 Manglam Punj / Uday Punj 774,962 0.23 0 759,962 0.23 0 0.00
6 Uday Punj / Manglam Punj 624,935 0.18 0 624,935 0.18 0 0.00
7 Jyoti Punj 501,725 0.15 0 501,725 0.15 0 0.00
8 Uday Punj 147,211 0.04 0 147,211 0.04 0 0.00
9 Atul Punj 1,430,540 0.43 0 1,430,540 0.43 0 0.00
10 Atul Punj (HUF) 820 0 0 820 0 0 0.00
11 Spectra Punj Finance Pvt. Ltd. 22,148,305 6.67 88.71 22,148,305 6.67 65.73 0.00
12 PLE Hydraulics Pvt. Ltd. 40 0 0 40 0 0 0.00
Total 122,635,560 36.93 122,510,560 36.89 -0.04
Annexure IX
Directors' Report86
(iii) Change in Promoters’ Shareholding (please specify, if there is no change)
Sl. No.
Shareholder’s NameDate
No. of Shares Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative Shareholding During the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
1 Uday Punj
at the beginning of the year 01-04-2015 147,211 0.04 - -
No Change NIL
at the end of the year 31-03-2016 - - 147,211 0.04
2 Manglam Punj / Uday Punj
at the beginning of the year 01-04-2015 774,962 0.23 - -
Date Wise Increase/ decrease in promoter shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sold 22-03-2016 5,000 0.00 769,962 0.23
Sold 23-03-2016 10,000 0.00 759,962 0.23
at the end of the year 31-03-2016 - - 759,962 0.23
3 Uday Punj (HUF)
at the beginning of the year 01-04-2015 781,246 0.24 - -
Date Wise Increase/ decrease in promoter shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sold 18-03-2016 45,000 0.01 736,246 0.23
Sold 21-03-2016 25,000 0.01 711,246 0.22
Sold 22-03-2016 5,000 0.00 706,246 0.21
Sold 23-03-2016 10,000 0.00 696,246 0.21
Sold 28-03-2016 15,000 0.00 681,246 0.21
Sold 30-03-2016 10,000 0.00 671,246 0.20
at the end of the year 31-03-2016 - - 671,246 0.20
4 Satya Narain Prakash Punj / Indu Rani Punj
at the beginning of the year 01-04-2015 10,537,281 3.17 - -
No Change NIL
at the end of the year 31-03-2016 - - 10,537,281 3.17
5 Indu Rani Punj / Satya Narain Prakash Punj
at the beginning of the year 01-04-2015 9,997,065 3.01 - -
No Change NIL
at the end of the year 31-03-2016 - - 9,997,065 3.01
6 Atul Punj
at the beginning of the year 01-04-2015 1,430,540 0.43 - -
No Change NIL
at the end of the year 31-03-2016 - - 1,430,540 0.43
7 Cawdor Enterprises Ltd.
at the beginning of the year 01-04-2015 75,691,430 22.79 - -
No Change NIL
at the end of the year 31-03-2016 - - 75,691,430 22.79
8 Spectra Punj Finance Pvt. Ltd.
at the beginning of the year 01-04-2015 22,148,305 6.67 - -
No Change NIL
at the end of the year 31-03-2016 - - 22,148,305 6.67
Annexure IX
Punj Lloyd | Annual Report 2015-2016 87
Sl. No.
Shareholder’s NameDate
No. of Shares Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative Shareholding During the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
9 Jyoti Punj
at the beginning of the year 01-04-2015 501,725 0.15 - -
No Change NIL
at the end of the year 31-03-2016 - - 501,725 0.15
10 Atul Punj (HUF)
at the beginning of the year 01-04-2015 820 0 - -
No Change NIL
at the end of the year 31-03-2016 - - 820 0.00
11 PLE Hydraulics Pvt. Ltd.
at the beginning of the year 01-04-2015 40 0 - -
No Change NIL
at the end of the year 31-03-2016 - - 40 0.00
12 Uday Punj/ Manglam Punj
at the beginning of the year 01-04-2015 624,935 0.19 - -
No Change NIL
at the end of the year 31-03-2016 - - 624,935 0.19
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
1 Life Insurance Corporation Of India
at the beginning of the year 01-04-2015 18,352,701 5.53 - -
No Change NIL
at the end of the year 31-03-2016 - - 18,352,701 5.53
2. Vanguard Total International Stock Index Fund
at the beginning of the year 01/04/2015 1,250,160 0.38 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 07/08/2015 83,445 0.02 1,333,605 0.40
Purchase 14/08/2015 1,018,728 0.31 2,352,333 0.71
at the end of the year 31/03/2016 - - 2,352,333 0.71
Annexure IX
Directors' Report88
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
3 OHM Stock Broker Pvt.Ltd
at the beginning of the year 31/03/2015 2,300,000 0.69 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sale 08/05/2015 -127,162 0.04 2,172,838 0.65
Sale 09/10/2015 -31,869 0.01 2,140,969 0.64
Sale 05/02/2016 -61,447 0.01 2,079,522 0.63
Sale 18/03/2016 -104,522 0.04 1,975,000 0.59
at the end of the year 31/03/2016 - - 1,975,000 0.59
4. Anil Agarwal
at the beginning of the year 01/04/2015 1,275,000 0.38 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sale 07/08/2015 -10,000 0.00 1,265,000 0.38
Sale 04/12/2015 -9,000 0.00 1,256,000 0.38
Purchase 31/12/2015 74,000 0.02 1,330,000 0.40
Purchase 11/03/2016 105,000 0.03 1,435,000 0.43
Purchase 18/03/2016 115,000 0.04 1,550,000 0.47
Purchase 31/03/2016 135,000 0.04 1,685,000 0.51
at the end of the year 31/03/2016 - - 1,685,000 0.51
5. Karvy Stock Broking LTD- F-O Margin
at the beginning of the year 01/04/2015 1,010,545 0.30 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 03/04/2015 3,624 0.00 1,014,169 0.31
Sale 03/04/2015 -4,192 0.00 1,009,977 0.30
Purchase 10/04/2015 799 0.00 1,010,776 0.30
Sale 10/04/2015 -13,272 0.00 997,504 0.30
Purchase 17/04/2015 7,611 0.00 1,005,115 0.30
Sale 17/04/2015 -1,573 0.00 1,003,542 0.30
Purchase 24/04/2015 20,716 0.01 1,024,258 0.31
Sale 24/04/2015 -249 0.00 1,024,009 0.31
Purchase 01/05/2015 333 0.00 1,024,342 0.31
Sale 01/05/2015 -10,825 0.00 1,013,517 0.31
Purchase 08/05/2015 54,456 0.02 1,067,973 0.32
Sale 08/05/2015 -200 0.00 1,067,773 0.32
Purchase 15/05/2015 46,282 0.01 1,114,055 0.34
Sale 15/05/2015 -9,832 0.00 1,104,223 0.33
Purchase 22/05/2015 102,861 0.03 1,207,084 0.36
Annexure IX
Punj Lloyd | Annual Report 2015-2016 89
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sale 22/05/2015 -209 0.00 1,206,875 0.36
Purchase 29/05/2015 235,543 0.07 1,442,418 0.43
Sale 29/05/2015 -102,445 0.03 1,339,973 0.40
Sale 05/06/2015 -53,600 0.02 1,286,373 0.39
Purchase 12/06/2015 3,810 0.00 1,290,183 0.39
Sale 12/06/2015 -42,561 0.01 1,247,622 0.38
Purchase 19/06/2015 8,506 0.00 1,256,128 0.38
Sale 19/06/2015 -53,821 0.02 1,202,307 0.36
Purchase 26/06/2015 942,448 0.31 2,144,755 0.65
Sale 26/06/2015 -24,337 0.01 2,120,418 0.64
Purchase 30/06/2015 303 0.00 2,120,721 0.64
Sale 30/06/2015 -22,336 0.01 2,098,385 0.63
Purchase 03/07/2015 26,986 0.01 2,125,371 0.64
Sale 03/07/2015 -30,203 0.01 2,095,168 0.63
Purchase 10/07/2015 22,401 0.01 2,117,569 0.64
Sale 10/07/2015 -30,342 0.01 2,087,227 0.63
Purchase 17/07/2015 33,394 0.01 2,120,621 0.64
Sale 17/07/2015 -14,690 0.00 2,105,931 0.63
Purchase 24/07/2015 56,953 0.02 2,162,884 0.65
Sale 24/07/2015 -92,053 0.03 2,070,831 0.62
Purchase 31/07/2015 1,797 0.00 2,072,628 0.62
Sale 31/07/2015 -29,191 0.01 2,043,437 0.62
Purchase 07/08/2015 103,201 0.03 2,146,638 0.65
Sale 07/08/2015 -59,638 0.02 2,087,000 0.63
Purchase 14/08/2015 23,299 0.01 2,110,299 0.64
Sale 14/08/2015 -45,726 0.01 2,064,573 0.62
Purchase 21/08/2015 69,312 0.02 2,133,885 0.64
Sale 21/08/2015 -36,581 0.01 2,097,304 0.63
Purchase 28/08/2015 725,848 0.22 2,823,152 0.85
Sale 28/08/2015 -1,116,357 0.34 1,706,795 0.51
Purchase 04/09/2015 3,870 0.00 1,710,665 0.52
Sale 04/09/2015 -10,076 0.00 1,700,589 0.51
Purchase 11/09/2015 37,213 0.01 1,737,802 0.52
Sale 11/09/2015 -1,075 0.00 1,736,727 0.52
Purchase 18/09/2015 452 0.00 1,737,179 0.52
Annexure IX
Directors' Report90
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sale 18/09/2015 -29,243 0.01 1,707,936 0.51
Purchase 25/09/2015 4,788 0.00 1,712,724 0.52
Sale 25/09/2015 -40 0.00 1,712,684 0.52
Purchase 30/09/2015 5,321 0.00 1,718,005 0.52
Sale 30/09/2015 -5,086 0.00 1,712,919 0.52
Purchase 02/10/2015 6,608 0.00 1,719,527 0.52
Sale 02/10/2015 -5,655 0.00 1,713,872 0.52
Purchase 09/10/2015 16,279 0.00 1,730,151 0.52
Sale 09/10/2015 -3,280 0.00 1,726,871 0.52
Purchase 16/10/2015 26,588 0.01 1,753,459 0.53
Sale 16/10/2015 -29,148 0.01 1,724,311 0.52
Purchase 23/10/2015 2,712 0.00 1,727,023 0.52
Sale 23/10/2015 -20,006 0.01 1,707,017 0.51
Purchase 30/10/2015 23,872 0.01 1730889 0.52
Sale 30/10/2015 -16,768 0.00 1,714,121 0.52
Purchase 06/11/2015 19,841 0.01 1,733,962 0.52
Sale 06/11/2015 -4,446 0.00 1,729,516 0.52
Purchase 13/11/2015 6,350 0.00 1,735,866 0.52
Sale 13/11/2015 -15,539 0.00 1,720,327 0.52
Purchase 20/11/2015 10,186 0.00 1,730,513 0.52
Sale 20/11/2015 -34,048 0.01 1,696,465 0.51
Purchase 27/11/2015 8,741 0.00 1,705,206 0.51
Sale 27/11/2015 -6,188 0.00 1,699,018 0.51
Purchase 04/12/2015 878 0.00 1,699,896 0.51
Sale 04/12/2015 -21,121 0.01 1,678,775 0.51
Purchase 11/12/2015 2,637 0.00 1,681,412 0.51
Sale 11/12/2015 -9,002 0.00 1,672,410 0.50
Purchase 18/12/2015 393 0.00 1,672,803 0.50
Sale 18/12/2015 -8,381 0.00 1,664,422 0.50
Purchase 25/12/2015 33,403 0.01 1,697,825 0.51
Sale 25/12/2015 -19,001 0.01 1,678,824 0.51
Purchase 31/12/2015 18,140 0.01 1,696,964 0.51
Sale 31/12/2015 -30,968 0.01 1,665,996 0.50
Purchase 01/01/2016 16,146 0.00 1,682,142 0.51
Sale 01/01/2016 -22,345 0.01 1,659,797 0.50
Annexure IX
Punj Lloyd | Annual Report 2015-2016 91
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 08/01/2016 24,475 0.01 1,684,272 0.51
Sale 08/01/2016 -59,109 0.02 1,625,163 0.49
Purchase 15/01/2016 13,324 0.00 1,638,487 0.49
Sale 15/01/2016 -1,820 0.00 1,636,667 0.49
Purchase 22/01/2016 15,582 0.00 1,652,249 0.50
Sale 22/01/2016 -3,734 0.00 1,648,515 0.50
Sale 29/01/2016 -6,634 0.00 1,641,881 0.49
Purchase 05/02/2016 74 0.00 1,641,955 0.49
Sale 05/02/2016 -22,559 0.01 1,619,396 0.49
Purchase 12/02/2016 11,878 0.00 1,631,274 0.49
Sale 12/02/2016 -25 0.00 1,631,249 0.49
Purchase 19/02/2016 25,106 0.01 1,656,355 0.50
Sale 19/02/2016 -425 0.00 1,655,930 0.50
Purchase 26/02/2016 8,867 0.00 1,664,797 0.50
Sale 26/02/2016 -35,265 0.01 1,629,532 0.49
Purchase 04/03/2016 6,042 0.00 1,635,574 0.49
Sale 04/03/2016 -18,735 0.01 1,616,839 0.49
Purchase 11/03/2016 5,368 0.00 1,622,207 0.49
Sale 11/03/2016 -6,886 0.00 1,615,321 0.49
Purchase 18/03/2016 1,433 0.00 1,616,754 0.49
Sale 18/03/2016 -2,980 0.00 1,613,774 0.49
Purchase 25/03/2016 14,467 0.00 1,628,241 0.49
Purchase 31/03/2016 13,798 0.00 1,642,039 0.49
at the end of the year 31/03/2016 - - 1,642,039 0.49
6 California Public Employees Retirement System, SEL
at the beginning of the year 01/04/2015 1,313,262 0.40 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 29/05/2015 178,066 0.05 1,491,328 0.45
Sale 25/09/2015 -27,556 0.01 1,463,772 0.44
Purchase 05/02/2016 26,667 0.01 1,490,439 0.45
Sale 05/02/2016 -26,667 0.00 1,463,772 0.44
Purchase 19/02/2016 409,612 0.12 1,873,384 0.56
Purchase 26/02/2016 5,075 0.01 1,878,459 0.57
Sale 25/03/2016 -173,869 0.06 1,704,590 0.51
at the end of the year 31/03/2016 - - 1,704,590 0.51
Annexure IX
Directors' Report92
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
7 Dimensional Emerging Markets Value Fund
at the beginning of the year 01/04/2015 1,476,964 0.44 - -
No Change NIL
at the end of the year 31/03/2016 - - 1,476,964 0.44
8 IL and FS Securities Services Limited
at the beginning of the year 01/04/2015 460,368 0.14 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 03/04/2015 28,361 0.01 488,729 0.15
Purchase 10/04/2015 12,700 0.00 501,429 0.15
Sale 17/04/2015 -5,589 0.00 495,840 0.15
Sale 24/04/2015 -3,539 0.00 492,301 0.15
Purchase 01/05/2015 91,659 0.03 583,960 0.18
Purchase 08/05/2015 8,310 0.00 592,270 0.18
Purchase 15/05/2015 725 0.00 592,995 0.18
Sale 22/05/2015 -14,000 0.00 578,995 0.17
Purchase 29/05/2015 24,775 0.01 603,770 0.18
Purchase 05/06/2015 39,205 0.01 642,975 0.19
Purchase 12/06/2015 6,999 0.00 649,974 0.20
Sale 19/06/2015 -32,999 0.01 616,975 0.19
Purchase 26/06/2015 224,013 0.06 840,988 0.25
Sale 26/06/2015 -136,041 0.04 704,947 0.21
Sale 30/06/2015 -1,000 0.00 703,947 0.21
Purchase 03/07/2015 3,800 0.00 707,747 0.21
Purchase 10/07/2015 6,910 0.00 714,657 0.22
Purchase 17/07/2015 48,992 0.01 763,649 0.23
Purchase 24/07/2015 4,634 0.00 768,283 0.23
Sale 24/07/2015 -50,000 0.02 718,283 0.22
Purchase 31/07/2015 112,938 0.03 831,221 0.25
Sale 31/07/2015 -19,873 0.01 811,348 0.24
Purchase 07/08/2015 24,471 0.01 835,819 0.25
Purchase 14/08/2015 128,089 0.04 963,908 0.29
Sale 14/08/2015 -105,851 0.03 858,057 0.26
Purchase 21/08/2015 23,023 0.01 881,080 0.27
Sale 21/08/2015 -8,600 0.00 872,480 0.26
Purchase 28/08/2015 398,715 0.12 1,271,195 0.38
Sale 28/08/2015 -31,000 0.01 1,240,195 0.37
Annexure IX
Punj Lloyd | Annual Report 2015-2016 93
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 04/09/2015 5,067 0.00 1,245,262 0.37
Sale 11/09/2015 -15,807 0.00 1,229,455 0.37
Purchase 18/09/2015 339,592 0.10 1,569,047 0.47
Sale 18/09/2015 -329,592 0.10 1,239,455 0.37
Sale 25/09/2015 -389 0.00 1,239,066 0.37
Sale 30/09/2015 -75,875 0.02 1,163,191 0.35
Purchase 09/10/2015 28,406 0.01 1,191,597 0.36
Sale 09/10/2015 -13,000 0.00 1,178,597 0.35
Sale 16/10/2015 -4,100 0.00 1,174,497 0.35
Purchase 23/10/2015 6,875 0.00 1,181,372 0.36
Sale 30/10/2015 -13,298 0.00 1,168,074 0.35
Purchase 06/11/2015 8,367 0.00 1,176,441 0.35
Sale 13/11/2015 -4,675 0.00 1,171,766 0.35
Sale 20/11/2015 -84,178 0.03 1,087,588 0.33
Purchase 27/11/2015 4,632 0.00 1,092,220 0.33
Sale 04/12/2015 -4,975 0.00 1,087,245 0.33
Purchase 11/12/2015 81,655 0.03 1,168,900 0.35
Sale 11/12/2015 -4,000 0.00 1,164,900 0.35
Sale 18/12/2015 -14,656 0.00 1,150,244 0.35
Sale 25/12/2015 -12,310 0.00 1,137,934 0.34
Sale 31/12/2015 -3,940 0.00 1,133,994 0.34
Sale 01/01/2016 -3,750 0.00 1,130,244 0.34
Purchase 08/01/2016 126,765 0.04 1,257,009 0.38
Sale 08/01/2016 -154,432 0.05 1,102,577 0.33
Sale 15/01/2016 -6,570 0.00 1,096,007 0.33
Purchase 22/01/2016 23,194 0.01 1,119,201 0.34
Purchase 29/01/2016 3,663 0.00 1,122,864 0.34
Sale 05/02/2016 -13,183 0.00 1,109,681 0.33
Purchase 12/02/2016 121,190 0.04 1,230,871 0.37
Sale 19/02/2016 -59,236 0.02 1,171,635 0.35
Purchase 26/02/2016 13,911 0.00 1,185,546 0.36
Sale 04/03/2016 -7,202 0.00 1,178,344 0.35
Sale 11/03/2016 -7,024 0.00 1,171,320 0.35
Purchase 18/03/2016 171,356 0.05 1,342,676 0.40
Sale 18/03/2016 -176,106 0.05 1,166,570 0.35
Sale 25/03/2016 -7,995 0.00 1,158,575 0.35
Sale 31/03/2016 -26,861 0.01 1,131,714 0.34
at the end of the year 31/03/2016 - - 1,131,714 0.34
Annexure IX
Directors' Report94
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
9. Emerging Markets Core Equity Portfolio (The Portfo
at the beginning of the year 01/04/2015 1,305,665 0.39 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sale 28/08/2015 -93,577 0.03 1,212,088 0.36
Sale 18/12/2015 -80,776 0.02 1,131,312 0.34
at the end of the year 31/03/2016 - - 1,131,312 0.34
10. Globe Capital Market Ltd
at the beginning of the year 01/04/2015 744,233 0.22 - -
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 03/04/2015 2,000 0.00 746,233 0.22
Sale 03/04/2015 -28,120 0.01 718,113 0.22
Purchase 10/04/2015 30,279 0.01 748,392 0.23
Sale 10/04/2015 -100,000 0.03 648,392 0.20
Purchase 17/04/2015 171,725 0.05 820,117 0.25
Sale 17/04/2015 -1,300 0.00 818,817 0.25
Purchase 24/04/2015 264,147 0.08 1,082,964 0.33
Sale 24/04/2015 -91,151 0.03 991,813 0.30
Purchase 01/05/2015 159,438 0.05 1,151,251 0.35
Purchase 08/05/2015 132,259 0.04 1,283,510 0.39
Sale 08/05/2015 -118,490 0.04 1,165,020 0.35
Purchase 15/05/2015 69,102 0.02 1,234,122 0.37
Purchase 22/05/2015 56,182 0.02 1,290,304 0.39
Sale 22/05/2015 -1,236 0.00 1,289,068 0.39
Purchase 29/05/2015 30,459 0.01 1,319,527 0.40
Sale 29/05/2015 -747 0.00 1,318,780 0.40
Purchase 05/06/2015 117,921 0.03 1,436,701 0.43
Purchase 12/06/2015 118,405 0.04 1,555,106 0.47
Sale 12/06/2015 -131,454 0.04 1,423,652 0.43
Purchase 19/06/2015 49,900 0.01 1,473,552 0.44
Sale 19/06/2015 -39,509 0.01 1,434,043 0.43
Sale 26/06/2015 -96,808 0.03 1,337,235 0.40
Sale 30/06/2015 -7,140 0.00 1,330,095 0.40
Sale 03/07/2015 -17,327 0.00 1,312,768 0.40
Annexure IX
Punj Lloyd | Annual Report 2015-2016 95
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Sale 10/07/2015 -18,912 0.01 1,293,856 0.39
Purchase 17/07/2015 79,302 0.03 1,373,158 0.41
Sale 17/07/2015 -12,350 0.00 1,360,808 0.41
Sale 24/07/2015 -12,378 0.00 1,348,430 0.41
Purchase 31/07/2015 216,294 0.06 1,564,724 0.47
Sale 31/07/2015 -13,200 0.00 1,551,524 0.47
Purchase 07/08/2015 400 0.00 1,551,924 0.47
Sale 07/08/2015 -129,395 0.04 1,422,529 0.43
Purchase 14/08/2015 38,390 0.01 1,460,919 0.44
Sale 14/08/2015 -27,850 0.01 1,433,069 0.43
Purchase 21/08/2015 37,530 0.01 1,470,599 0.44
Sale 21/08/2015 -78,325 0.02 1,392,274 0.42
Purchase 28/08/2015 148,982 0.04 1,541,256 0.46
Sale 28/08/2015 -193,100 0.05 1,348,156 0.41
Purchase 04/09/2015 767 0.00 1,348,923 0.41
Sale 04/09/2015 -31,397 0.01 1,317,526 0.40
Sale 11/09/2015 -4,174 0.00 1,313,352 0.40
Purchase 18/09/2015 23,175 0.01 1,336,527 0.40
Sale 18/09/2015 -100 0.00 1,336,427 0.40
Sale 25/09/2015 -1,363 0.00 1,335,064 0.40
Sale 30/09/2015 -98,430 0.03 1,236,634 0.37
Sale 02/10/2015 -96,152 0.03 1,140,482 0.34
Purchase 09/10/2015 345 0.00 1,140,827 0.34
Sale 09/10/2015 -9,365 0.00 1,131,462 0.34
Sale 16/10/2015 -50,613 0.02 1,080,849 0.33
Sale 23/10/2015 -6,668 0.00 1,074,181 0.32
Purchase 30/10/2015 42,325 0.01 1,116,506 0.34
Sale 30/10/2015 -50 0.00 1,116,456 0.34
Purchase 06/11/2015 95,400 0.03 1,211,856 0.36
Purchase 13/11/2015 7,189 0.00 1,219,045 0.37
Purchase 20/11/2015 40,122 0.01 1,259,167 0.38
Sale 27/11/2015 -6,290 0.00 1,252,877 0.38
Sale 04/12/2015 -104,487 0.03 1,148,390 0.35
Annexure IX
Directors' Report96
Sl. No.
For Each of the Top 10 Shareholders Date
No. of Shares: Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative ShareholdingDuring the Year
No. of Shares% of Total
Shares of the Company
No. of Shares
% of Total Shares of the
Company
Date Wise Increase/ decrease in shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/ bonus / sweat equity etc):
Purchase 11/12/2015 22,106 0.01 1,170,496 0.35
Sale 11/12/2015 -9,000 0.00 1,161,496 0.35
Purchase 18/12/2015 17,500 0.01 1,178,996 0.36
Sale 18/12/2015 -7,393 0.00 1,171,603 0.35
Purchase 25/12/2015 222 0.00 1,171,825 0.35
Sale 25/12/2015 -3,696 0.00 1,168,129 0.35
Sale 31/12/2015 -73,583 0.02 1,094,546 0.33
Purchase 01/01/2016 505 0.00 1,095,051 0.33
Sale 01/01/2016 -129,500 0.04 965,551 0.29
Purchase 08/01/2016 135,413 0.04 1,100,964 0.33
Sale 08/01/2016 -74,030 0.02 1,026,934 0.31
Purchase 15/01/2016 66,678 0.02 1,093,612 0.33
Purchase 22/01/2016 6,088 0.00 1,099,700 0.33
Sale 22/01/2016 -124,000 0.04 975,700 0.29
Sale 29/01/2016 -10,505 0.00 965,195 0.29
Purchase 05/02/2016 200 0.00 965,395 0.29
Sale 05/02/2016 -9,066 0.00 956,329 0.29
Purchase 12/02/2016 7,000 0.00 963,329 0.29
Sale 12/02/2016 -22,600 0.01 940,729 0.28
Purchase 19/02/2016 3,040 0.00 943,769 0.28
Sale 19/02/2016 -16,000 0.00 927,769 0.28
Purchase 26/02/2016 14,275 0.00 942,044 0.28
Purchase 04/03/2016 1,302 0.00 943,346 0.28
Sale 04/03/2016 -10,000 0.00 933,346 0.28
Purchase 11/03/2016 15,397 0.00 948,743 0.29
Purchase 18/03/2016 154,414 0.05 1,103,157 0.33
Sale 18/03/2016 -100,000 0.03 1,003,157 0.30
Purchase 25/03/2016 3,707 0.00 1,006,864 0.30
Sale 25/03/2016 -34,470 0.01 972,394 0.29
Purchase 31/03/2016 28,978 0.01 1,001,372 0.30
Sale 31/03/2016 -18,455 0.01 982,917 0.30
at the end of the year 31/03/2016 - - 982,917 0.30
Annexure IX
Punj Lloyd | Annual Report 2015-2016 97
(v) Shareholding of Directors and Key Managerial Personnel:
Sl. No.
For Each of the Directors and KMP Date
No. of Shares Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative Shareholding During The Year
No. of Shares% of Total
Shares of the Company
No. of Shares% of Total
Shares of the Company
1 Atul Punj
at the beginning of the year 01-04-2015 1,431,360 0.43 - -
No Change NIL
at the end of the year 31-03-2016 - - 1,431,360 0.43
2 Phiroz Adi Vandrevala
at the beginning of the year 01-04-2015 5,000 0.001 - -
No Change NIL
at the end of the year 31-03-2016 - - 5,000 0.001
3 J.P. Chalasani*
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - 0 0.00
4 Luv Chhabra**
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - NA NA
5 P.N. Krishnan***
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - NA NA
6 Ekaterina Alexandra Sharashidze
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - 0 0.00
7 Maniedath Madhavan Nambiar****
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - NA NA
8. Uday Walia@
at the beginning of the year 01-04-2015 NA NA - -
No Change NIL
at the end of the year 31-03-2016 - - 0 0.00
9. Shiv Punj @
at the beginning of the year 01-04-2015 NA NA - -
No Change NIL
at the end of the year 31-03-2016 - - 0 0.00
Annexure IX
Directors' Report98
Sl. No.
For Each of the Directors and KMP Date
No. of Shares Held at the Beginning of the Year i.e.
April 01, 2015
Cumulative Shareholding During The Year
No. of Shares% of Total
Shares of the Company
No. of Shares% of Total
Shares of the Company
10 Nidhi Kumar Narang (CFO)#
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - NA NA
11 Shamik Roy (CF0)##
at the beginning of the year 01-04-2015 NA NA - -
No Change NIL
at the end of the year 31-03-2016 - - NA NA
12 Dinesh Thairani (Company Secretary)
at the beginning of the year 01-04-2015 0 0.00 - -
No Change NIL
at the end of the year 31-03-2016 - - 0 0.00
* Since resigned from the Board of Directors of the Company w.e.f. March 31, 2016
** Since resigned from the Board of Directors of the Company w.e.f. May 11, 2015
*** Since resigned from the Board of Directors of the Company w.e.f. September 25, 2015
**** Since resigned from the Board of Directors of the Company w.e.f. August 14, 2015
@ Since he was appointed as a Director of the Company w.e.f. September 25, 2015
@@ Since he was appointed as a Director of the Company w.e.f. March 25, 2016
# Since resigned as CFO of the Company w.e.f. September 30, 2016
## Since he was appointed as CFO of the Company on November 6, 2015 and resigned w.e.f. March 25, 2016
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(Amount in ` Crore)
Secured Loans excluding deposits
Unsecured Loans
Deposits Total
Indebtedness
Indebtedness at the beginning of the financial year (2015-16)
i) Principal Amount 5,023.44 182.47 - 5,205.91
ii) Interest due but not paid 21.35 - - 21.35
iii) Interest accrued but not due 24.11 0.23 - 24.34
Total (i+ii+iii) 5,068.90 182.70 - 5,251.60
Change in Indebtedness during the financial year (2015-16)
2,317.98 - - 2,317.98
1,118.15 182.47 - 1,300.62
Net addition / (reduction) 1,199.83 -182.47 - 1,017.36
Indebtedness at the end of the financial year (2015-16)
i) Principal Amount 6,223.27 - - 6,223.27
ii) Interest due but not paid 114.44 - - 114.44
iii) Interest accrued but not due 38.89 - - 38.89
Total (i+ii+iii) 6,376.60 - - 6,376.60
Annexure IX
Punj Lloyd | Annual Report 2015-2016 99
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(Amount in `)
Sl. No. Particulars of Remuneration *Mr. J. P. Chalasani
**Mr. Luv Chhabra
***Mr. P. N. Krishnan
Total Amount
1. Gross salary(a) Salary as per provisions contained in section 17(1) of the
Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Income- Tax
Act, 1961
2,70,05,943
33,88,600
0
76,25,128
0
0
1,10,72,458
48,67,990
4,57,03,529
82,56,590
0
2. Stock Option 0 0 0 0
3. Sweat Equity 0 0 0 0
4. Commission- as % of profit- others, specify...
00
00
00
00
5. Others, please specify(PF, NPS, Gratuity, Mediclaim, Suprannuation, Bonus/Ex-gratia as applicable)
45,01,290 3,46,563 6,86,300 55,34,153
Total (A) 3,48,95,833@ 79,71,691# 1,66,26,748$ 5,94,94,272
Ceiling as per the Act Nil Nil Nil Nil
* Since resigned from the Board of Directors of the Company w.e.f. March 31, 2016
** Since resigned from the Board of Directors of the Company w.e.f. May 11, 2015*** Since resigned from the Board of Directors of the Company w.e.f. September 25, 2015@ As approved by the Central Government vide SRN No. C15404882/2014-CL-VII dated May 29, 2015.# As approved by the Central Government vide SRN No. C15409709/2014-CL-VII dated May 14, 2015.
$ As approved by the Central Government vide SRN No. C15410251/2014-CL-VII dated May 29, 2015.
B. Remuneration to other directors:
(Amount in `)
Sl. No. Particulars of Remuneration Name of Directors Total Amount
Mr. Phiroz Adi Vandrewala
Ms. Ekaterina Alexandra
Sharashidze
Mr. Uday Walia
@Mr. Maniedath Madhavan
Nambiar
1 Independent Directors
meetings250,000
00
250,00000
50,00000
150,00000
700,00000
Total (1) 250,000 250,000 50,000 150,000 700,000
2 Other Non-Executive Directors NONE
meetings0
00
0
00
0
00
0
00
0
00
Total (2) 0 0 0 0 0
Total (B) = (1 + 2) 250,000 250,000 50,000 150,000 700,000
Total Managerial Remuneration 5,94,94,272
Overall Ceiling as per the Act Nil Nil Nil Nil Nil
@ Since resigned from the Board of Directors of the Company w.e.f. August 14, 2015
* As per the provisions of Sub Section (2) read with sub section (5) of Section 197 of the Companies Act, 2013, sitting fees paid to directors are to be excluded while calculating the oveall managerial remuneration.
Annexure IX
Directors' Report100
NIL
C. Remuneration to Key Managerial Personnel Other than MD/Manager/WTD
(Amount in `)
Sl. No. Particulars of Remuneration
Key Managerial Personnel
CEO CS(Dinesh
Thairani)
CFO(Nidhi
Narang)*
CFO(Shamik
Roy)^
Total
1. Gross salary(a) Salary as per provisions contained in section
17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act,
1961(c) Profits in lieu of salary under section 17(3)
Income-tax Act, 1961
NotApplicable
9,135,877
594,150
0
7,273,440
278,100
0
3,965,255
246,684
0
20,374,572
1,118,934
0
2. Stock Option 0 0 0 0
3. Sweat Equity 0 0 0 0
4. Commission- as % of profit- Others, specify...
00
00
00
00
5. Others, please specify 1,012,697 380,930 271,507 1,665,134
Total 10,742,724 7,932,470 4,483,446 23,158,640
* Since resigned as CFO of the Company w.e.f. September 30, 2015
^ Since appointed as CFO of the Company on November 6, 2015 and resigned w.e.f. March 25, 2016
VII
Type Section of the Companies Act
Brief Description
Details of Penalty/
Punishment/ Compounding fees imposed
Authority [RD/NCLT/COURT]
Appeal made, if any
(give Details)
A. Company
Penalty
Punishment
Compounding
B. Directors
Penalty
Punishment
Compounding
C. Other Officers in Default
Penalty
Punishment
Compounding
Annexure IX
Punj Lloyd | Annual Report 2015-2016 101
PART
“A” -
SU
BSID
IARI
ES
Nam
e of
the
Entit
ies
Cou
ntry
of
Inco
rpor
a-tio
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%
hold
ing
of G
roup
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on
Mar
ch
31, 2
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Repo
rt-
ing
C
urre
n-cy
Repo
rtin
g
perio
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ded
on
Exch
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te a
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M
arch
31,
20
16
Cap
ital
Rese
rves
Tota
l As
sets
Tota
l Lia
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litie
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vest
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ts
(Oth
er th
an
inve
stm
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su
bsid
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s)
Turn
over
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Tota
l In
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1.0
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baw
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(1.0
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Day
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Mar
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STA
TE
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NTA
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TU
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F F
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NC
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UR
ES
(All
amou
nts
in IN
R C
rore
s, u
nles
s ot
herw
ise
stat
ed)
Directors' Report102
Nam
e of
the
Entit
ies
Cou
ntry
of
Inco
rpor
a-tio
n
%
hold
ing
of G
roup
as
on
Mar
ch
31, 2
016
Repo
rt-
ing
C
urre
n-cy
Repo
rtin
g
perio
d en
ded
on
Exch
ange
ra
te a
s on
M
arch
31,
20
16
Cap
ital
Rese
rves
Tota
l As
sets
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l Lia
-bi
litie
sIn
vest
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ts
(Oth
er th
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stm
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in
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bsid
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Turn
over
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Tota
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com
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r Ta
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17.
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- (0
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ors
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bia
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arch
31,
201
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Buffa
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Virg
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Mar
ch 3
1, 2
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66.
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(All
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nles
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Punj Lloyd | Annual Report 2015-2016 103
Nam
e of
the
Entit
ies
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ntry
of
Inco
rpor
a-tio
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ES
(All
amou
nts
in IN
R C
rore
s, u
nles
s ot
herw
ise
stat
ed)
Directors' Report104
Nam
e of
the
Entit
ies
Cou
ntry
of
Inco
rpor
a-tio
n
%
hold
ing
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roup
as
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ch
31, 2
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JO
INT
VE
NT
UR
ES
(All
amou
nts
in IN
R C
rore
s, u
nles
s ot
herw
ise
stat
ed)
Punj Lloyd | Annual Report 2015-2016 105
Nam
e of
the
Entit
ies
Cou
ntry
of
Inco
rpor
a-tio
n
%
hold
ing
of G
roup
as
on
Mar
ch
31, 2
016
Repo
rt-
ing
C
urre
n-cy
Repo
rtin
g
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d en
ded
on
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s on
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arch
31,
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16
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over
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NT
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ES
(All
amou
nts
in IN
R C
rore
s, u
nles
s ot
herw
ise
stat
ed)
Directors' Report106
STA
TE
ME
NT
CO
NTA
ININ
G S
ALI
EN
T F
EA
TU
RE
S O
F F
INA
NC
IAL
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TE
ME
NT
S O
F
SU
BS
IDIA
RIE
S /
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SO
CIA
TE
S /
JO
INT
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(All
amou
nts
in IN
R C
rore
s, u
nles
s ot
herw
ise
stat
ed)
PAR
T “B
” : J
OIN
T V
ENTU
RES
AN
D A
SSO
CIA
TES
Sr.
No.
N
ame
of J
oint
Ven
ture
s /
Ass
ocia
tes
Late
st
repo
rted
ba
lanc
e sh
eet
date
No.
of s
hare
s an
d am
ount
of
Inve
stm
ent h
eld
by th
e co
mpa
ny a
t th
e ye
ar e
nd
Exte
nt o
f H
oldi
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%
Net
wor
th
attr
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able
to
shar
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as
per
late
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repo
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bal
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sh
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for t
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ear
cons
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co
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(Los
s) fo
r th
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Punj Lloyd | Annual Report 2015-2016 107
Independent Auditors’ Report
To the Members of Punj Lloyd Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Punj Lloyd Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company’s overseas branches and an unincorporated joint venture.
Management’s Responsibility for the Standalone Financial Statements
2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation and presentation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the branches and an unincorporated joint venture, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, its loss and its cash flows for the year ended on that date.
Emphasis of Matters
9. We draw attention to the following matters in the notes to the standalone financial statements:
a. note 35 (a) regarding unbilled revenue (work-in-progress) aggregating to ` 735.80 crores as at 31 March 2016, representing claims made by the Company which are subject matter of arbitration; and
b. note 35 (b) regarding the realisation of the investments and net receivables aggregating to ` 1,103.72 crores as at 31 March 2016, from the subsidiaries of the Company as these have currently applied for judicial management in the Court of Singapore.
Pending ultimate outcome of the above matters which is presently unascertainable, no adjustments have been made in the accompanying standalone financial statements. Our opinion is not qualified in respect of these matters.
Financial Statements 2015-16
Financials108
Other Matter
10. We did not audit the financial statements of certain branches and an unincorporated joint venture whose financial statements reflect total assets (net of elimination) of ` 4,223.01 crores as at 31 March 2016, total revenues (net of eliminations) of ` 968.78 crores and net cash inflows aggregating to ` 6.12 crores for the year ended on that date, as considered in the aforesaid standalone financial statements. The financial statements of these branches and an unincorporated joint venture have been audited by other auditors whose reports and additional information thereon have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and an unincorporated joint venture, is based solely on the reports of the such auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure II, a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. As required by Section 143(3) of the Act, we report that:
a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;
c. the reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;
d. the Balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;
e. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
f. for the matter described in sub paragraph (b) under the Emphasis of Matter paragraph, if the outcome does not turn out as anticipated by the management, in our opinion, may have an adverse effect on the functioning of the Company;
g. on the basis of the written representations received from the directors as on 1 April 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;
h. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 27 May 2016 as per Annexure I; and
i. with respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its standalone financial position, as detailed in Note 31 to the standalone financial statements;
ii. the Company, has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts, as detailed in Note 36 to the standalone financial statements; and
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered AccountantsFirm’s Registration No.: 001076N/N500013
per Anupam KumarPartner Place: GurgaonMembership No.: 501531 Date: 27 May 2016
Independent Auditors’ Report
Punj Lloyd | Annual Report 2015-2016 109
1. We have audited the internal financial controls over financial reporting (“IFCoFR”) of Punj Lloyd Limited (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company as of and for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion and based on reliance on work performed by other auditors, the Company has, in all material respects, adequate IFCoFR and such IFCoFR were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.
Annexures to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
Annexure I Independent Auditor’s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
Financials110
Annexure II Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us and the books of account and other records examined by us in the
normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased
manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature
of its assets. Accordingly, certain fixed assets were verified during the year and no material discrepancies were noticed on such
verification.
(c) The title deeds of all the immovable properties (which are included under the head ‘fixed assets’) are held in the name of the
Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies, between physical inventory and book records, were noticed on such verification.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion, the Company has complied with the provisions of Section 186 of the Act in respect of loans, investments, guarantees and security. Further, the provisions of clause 3(iv) of the Order with respect to Section 185 of the Act are not applicable since the Company has not entered into transactions covered under the aforesaid section.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company’s products and services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited to the appropriate authorities and there have been significant delays in a large number of cases. Further, no material undisputed amounts payable in respect thereof, were outstanding at the year-end for a period of more than six months from the date they became payable.
Annexures to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
Other Matters
9. We did not audit the IFCoFR insofar as it relates to certain branches and an unincorporated joint venture, whose financial statements
reflect total assets (net of eliminations) of ` 4,223.01 crores as at 31 March 2016, total revenues (net of eliminations) of ` 968.78 crores
and net cash inflows amounting to ̀ 6.12 crores for the year ended on that date. Our report on the adequacy and operating effectiveness
of the IFCoFR for the Company, under Section 143(3)(i) of the Act insofar as it relates to the aforesaid branches and an unincorporated
joint venture, is solely based on the information provided by the auditors of such branches/ unincorporated joint venture. Our opinion is
not modified in respect of this matter.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered AccountantsFirm’s Registration No.: 001076N/N500013
per Anupam KumarPartner Place: GurgaonMembership No.: 501531 Date: 27 May 2016
Punj Lloyd | Annual Report 2015-2016 111
(b) The dues outstanding at the year end, in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Nature of dues Name of statute Amount (` in crores)
Period to which relates
Forum where the dispute is pending
Sales tax and value added tax
Andhra Pradesh General Sales Tax Act, 1957
9.23 1998-99 to 2004-05
Sales Tax Appellate Tribunal, Vizag
Bihar Value Added Tax Act, 2005 25.51 2009-10 Commercial Tax Tribunal, Patna
Haryana Value Added Tax Act, 2003 4.64 2003-04, 2004-05
Sales Tax Appellate Tribunal, Chandigarh
0.79 2009-10 Joint Commissioner Appeal
Kerala Value Added Tax Act, 2003 3.96 2005-06, 2006-07
Deputy Commissioner of Commercial Tax, Ernakulum and Commercial Tax Tribunal, Kochi
Madhya Pradesh Commercial Tax Act, 1994
0.05 2003-04 High Court, Bhopal
Madhya Pradesh Value Added Tax Act, 2002
0.65 2009-10, 2010-11
Commercial Tax Tribunal, Bhopal
Punjab Value Added Tax Act, 2005 37.47 2008-09, 2012-13
Deputy Commissioner, Patiala
24.33 2011-12 Commercial Tax Tribunal, Chandigarh
Rajasthan Value Added Tax, 2003 0.03 2012-13 Deputy Commissioner, Kota
Karnataka Value Added Tax Act, 2003 4.78 2009-10 High Court, Karnataka
Gujarat Sales Tax Act, 1969 0.07 2002-03 Deputy Commissioner (Appeals), Vadodara
West Bengal Value Added Tax, 2003 23.60 2009-10 Appellate & Revisional Board, Kolkata
7.85 2012-13 Sr. Joint Commissioner (Appeal), Midnapur
Entry tax Bihar Entry Tax Act, 1993 0.21 2009-10 Commissioner of Commercial Tax, Patna
Haryana Local Area Development Tax Act, 2000
0.40 2003-04 Supreme Court, New Delhi
Chhattisgarh Entry Tax Act, 1976 0.26 2005-06, 2006-07
Supreme Court, New Delhi
Madhya Pradesh Entry Tax Act, 1976 0.01 2003-04 High Court, Bhopal
0.35 2009-10, 2010-11
Commercial Tax Tribunal, Bhopal
Rajasthan Tax on the Entry of Goods in to the Local Area Act, 1957
1.00 2005-06 High Court, Jodhpur
Uttar Pradesh Trade Tax Act, 1948 0.05 1999-2000,2000-01, 2004-05
Commercial Tax Tribunal, Agra
0.11 2010-11 Additional Commissioner (Appeal), Aligarh
Karnataka Sales Tax Act, 1957 0.12 2002-03 to 2004-05
Jt. Commissioner Appeal, Bangalore
Excise duty Central Excise Act, 1944 0.73 2006-07 Commissioner of Custom and Central Excise, Mumbai
Service tax The Finance Act 2004 and the Service Tax rules
8.06 2003-04, 2005-06, 2006-07
CESTAT, Delhi
Annexures to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
Financials112
(viii) As at the year end, the following are the amounts of defaults in repayment of dues to banks, financial institutions and debenture holders:
Particulars Period of default (in days)
Upto 90 91 and above
Banks
Standard Chartered Bank Limited 20.47 62.59
ICICI Bank Limited 1.86 1.71
IDBI Limited 3.45 -
Oriental Bank of Commerce Limited 3.38 -
State Bank of Patiala 3.33 -
United Bank of India 3.13 -
Bank of India 1.39 -
Ratanakar Bank Limited 0.47 -
Dhanlaxmi Bank Limited 0.09 0.24
KVB Bank Limited 0.02 -
State Bank of India 0.01 -
Financial institutions
International Finance Corporation 10.77 29.34
Tata Capital Limited 3.54 9.58
IFCI Limited 7.31 2.00
L & T Infrastructure Finance Company Limited 1.57 0.75
Religare Finvest Limited 0.90 0.47
Magma Fincorp Limited 0.82 0.27
SREI Infrastructure Finance Limited 0.11 -
Debentures 19.53 374.33
Further, during the year, the Company delayed in repayment of dues to banks, financial institutions and debenture holders, as detailed below:
Particulars Period of delays (in days)
Upto 90 91 and above
Banks
Central Bank of India 20.57 13.65
State Bank of Patiala 3.33 10.00
State Bank of India 11.77 0.29
Union Bank of India 6.25 -
HDFC Bank Limited 2.98 -
ICICI Bank Limited 1.54 -
Dhanlaxmi Bank Limited 0.90 -
Kotak Mahindra Bank Limited 0.89 -
Axis Bank Limited 0.16 -
Financial institutions
SREI Equipment Finance Private Limited 5.32 16.48
Tata Capital Limited 0.50 6.50
SREI Infrastructure Finance Limited - 6.00
Religare Finvest Limited 5.13 -
Magma Fincorp Limited 1.98 -
L & T Finance Limited 0.74 -
Debentures - 4.08
Annexures to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
Punj Lloyd | Annual Report 2015-2016 113
Annexures to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act, read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv) During the year, the Company has neither made any preferential allotment or private placement of shares nor issued any debentures.
(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered AccountantsFirm’s Registration No.: 001076N/N500013
per Anupam KumarPartner Place: GurgaonMembership No.: 501531 Date: 27 May 2016
(All amounts in INR Crores, unless otherwise stated)
Financials114
NotesAs at
March 31, 2016 March 31, 2015Equity and liabilitiesShareholders’ fundsShare capital 3 66.42 66.42 Reserves and surplus 4 1,500.96 3,138.23
1,567.38 3,204.65 Non-current liabilitiesLong-term borrowings 5 1,549.88 586.99 Deferred tax liabilities (net) 6 - - Other liabilities 9 - 6.37 Provisions 7 1.50 0.58
1,551.38 593.94 Current liabilitiesShort-term borrowings 8 3,946.63 3,967.53 Trade payables (including dues of micro and small enterprises Nil (Previous year: Nil))
9 2,396.14 2,250.67
Other liabilities 9 2,904.26 2,866.87 Provisions 7 159.01 77.84
9,406.04 9,162.91 Total 12,524.80 12,961.50 AssetsNon-current assetsFixed assets
Tangible assets 10 836.43 1,109.51 Intangible assets 11 2.08 2.87 Capital work-in-progress 0.24 - Intangible assets under development 0.62 2.89
Non-current investments 12 1,146.49 1,180.56 Deferred tax assets (net) 6 - - Loans and advances 13 314.42 394.40 Other assets 15 2.91 39.39
2,303.19 2,729.62 Current assetsInventories 16 94.19 99.11 Unbilled revenue (work-in-progress) 6,237.72 5,958.61 Trade receivables 14 2,278.42 2,267.20 Cash and bank balances 17 373.20 246.63 Loans and advances 13 1,169.17 1,578.80 Other assets 15 68.91 81.53
10,221.61 10,231.88 Total 12,524.80 12,961.50 Summary of significant accounting policies 2.1
Balance Sheet as at March 31, 2016
The accompanying notes form an integral part of the financial statements.This is the balance sheet referred to in our report of even date.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
Balance Sheet as at March 31, 2016
(All amounts in INR Crores, unless otherwise stated)
Punj Lloyd | Annual Report 2015-2016 115
Notes Year ended
March 31, 2016 March 31, 2015
Income
Revenue from operations 18 3,347.82 4,881.51
Other income 19 146.63 807.16
Total income 3,494.45 5,688.67
Expenses
Projects materials consumed and cost of goods sold 1,731.26 2,565.73
Employee benefits expense 20 434.17 563.44
Other expenses 21 1,821.44 1,998.73
Total expenses 3,986.87 5,127.90
Earnings before interest (finance costs), tax, depreciation and amortization (EBITDA) (492.42) 560.77
Depreciation and amortization expense 10 & 11 233.93 313.74
Finance costs 22 904.74 859.54
Loss before tax (1,631.09) (612.51)
Tax expenses
- Current tax (Including previous years’) 17.84 0.16
- Minimum alternate tax credit - 7.83
- Deferred tax 0.58 (113.84)
Total tax expense 18.42 (105.85)
Loss for the year (1,649.51) (506.66)
Earnings per equity share [nominal value per share ` 2 each (Previous year ` 2)]
23
Basic and Diluted (in `) (49.67) (15.26)
Summary of significant accounting policies 2.1
for the year ended March 31, 2016
The accompanying notes form an integral part of the financial statements.This is the statement of profit and loss referred to in our report of even date.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
(All amounts in INR Crores, unless otherwise stated)
Financials116
Year ended
March 31, 2016 March 31, 2015
Cash flows from operating activities
Loss before tax (1,631.09) (612.51)
Adjustment to reconcile loss before tax to net cash flows
Depreciation and amortization 233.93 313.74
Profit on sale of fixed assets (net) (46.85) (28.52)
Provision for diminution in value of investment 34.23 3.86
Unrealized foreign exchange gain (net) (23.69) (103.69)
Exchange gain on redemption of investment in preference share of a subsidiary company - (7.23)
Unspent liabilities and provisions written back (9.63) (16.01)
Irrecoverable balances written-off 348.15 106.30
Net gain on sale of long-term investments (1.05) (547.39)
Interest expense 729.06 730.86
Interest income (43.86) (43.70)
Dividend income - (0.07)
Operating loss before working capital changes (410.80) (204.36)
Changes in working capital:
Increase/ (decrease) in trade payables 157.05 (40.10)
Increase/ (decrease) in provisions 85.77 (4.17)
Decrease in other liabilities (118.47) (247.91)
Decrease in trade receivables (300.46) 110.15
Decrease/ (increase) in unbilled revenue (work-in-progress) (279.11) 114.92
Decrease in inventories 4.92 23.49
Decrease in loans and advances 380.09 16.72
Decrease/ (increase) in other current assets (15.71) -
Cash used in operations (496.72) (231.26)
Direct taxes paid (net of refunds) 66.65 106.91
Net cash used in operating activities (A) (430.07) (124.35)
Cash flows from investing activities
Purchase of fixed assets, including capital advances and CWIP (17.57) (19.49)
Proceeds from sale of fixed assets 80.51 66.04
Purchase of investments - (2.41)
Proceeds from sale of investments 4.83 745.61
Proceeds from redemption of investment in preference share of a subsidiary company - 239.61
(Investments in)/ redemption/maturity of bank deposits (having original maturity of more than three months) (0.01) 1.31
Interest received 67.08 43.46
Dividends received - 0.07
Decrease/(increase) in margin money deposits 15.75 (45.72)
Net cash flow from investing activities (B) 150.59 1,028.48
Cash Flow Statement for the year ended March 31, 2016
(All amounts in INR Crores, unless otherwise stated)
Punj Lloyd | Annual Report 2015-2016 117
Year ended
March 31, 2016 March 31, 2015
Cash flows from financing activities
Proceeds from long-term borrowings 1,241.25 189.45
Repayment of long-term borrowings (207.39) (755.91)
Proceeds/ (repayment) from short-term borrowings (net) (20.90) 444.63
Interest paid (621.42) (724.47)
Net cash flow from/(used in) financing activities (C) 391.54 (846.30)
Net increase in cash and cash equivalents (A + B + C) 112.06 57.83
Effect of exchange differences on cash and cash equivalents held in foreign currency 6.05 0.60
Exchange difference 15.50 (26.18)
Cash and cash equivalents at the beginning of the year 182.73 150.48
Cash and cash equivalents at the end of the year (also refer note 17) 316.34 182.73
The accompanying notes form an integral part of the financial statements.This is the cash flow statement referred to in our report of even date.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
Cash Flow Statement for the year ended March 31, 2016
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials118
1. Corporate information
Punj Lloyd Limited (the Company) is a public limited company domiciled in India. Its equity shares are listed on two stock exchanges in India. The Company is engaged in the business of engineering, procurement and construction in the oil, gas and infrastructure sectors. The Company caters to both domestic and international markets.
2. Basis of preparation
These financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) and comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act 2013 (“the 2013 Act”), read together with paragraph 7 of the Companies (Accounts) Rules 2014 (as amended). The financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of certain tangible assets which are carried at revalued amounts and derivative financial instruments which have been measured at fair value.
The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
(a) Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring an adjustment to the carrying amounts of assets or liabilities in future periods.
(b) Tangible assets
Tangible assets, except a piece of land and few items of plant and equipment acquired before March 31, 1998, are stated at cost, less accumulated depreciation and impairment losses, if any. The cost comprises the purchase price, borrowing costs, if capitalization criteria are met, and directly attributable cost of bringing the asset to its working condition for the intended use. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of fixed assets are required to be replaced at intervals, the Company recognizes such parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when a significant inspection is performed, its cost is recognized in the carrying amount of the fixed assets as a replacement if
the recognition criteria are satisfied. Any trade discounts and rebates are deducted in arriving at the purchase price.
During the year ended March 31, 1998, the Company revalued certain plant and equipment. These plant and equipment are measured at fair value less accumulated depreciation and impairment losses, if any recognized after the date of the revaluation. During the year ended March 31, 2002, the Company revalued a piece of land at fair value. In case of revaluation of tangible assets, any revaluation surplus is credited to the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in the statement of profit and loss, in which case the increase is recognized in the statement of profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.
Subsequent expenditure related to an item of tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing tangible assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset. In accordance with Ministry of Corporate Affairs (“MCA”) circular dated August 09, 2012, exchange differences adjusted to the cost of tangible assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange differences.
Gains or losses arising from de-recognition of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
(c) Depreciation on tangible assets
i) Depreciation on tangible assets is calculated on straight-line basis using the rate arrived at based on the useful lives estimated by the management. The Company has used the following lives to provide depreciation on its tangible assets.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 119
Asset Description Useful lives estimated by the management (years)
Factory buildings 30
Other buildings 60
Plant and equipment 3 – 20
Furniture and fixtures, office equipment and tools 3 – 20
Vehicles 3 – 10
ii) Leasehold land, except for leasehold land which is under perpetual lease, is amortized on a straight line basis over the period of lease, i.e., 30 years.
iii) Assets acquired under sale and lease back are depreciated on a straight line basis over the period of lease.
(d) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight line basis, based on the nature and estimated useful economic life. The summary of amortization policies applied to the Company’s intangible assets is as below:
i) Software of project division is amortized over the period of licenses or six years, whichever is lower.
ii) Software of an unincorporated joint venture is amortized over the period of license or three years, whichever is lower.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
(e) Impairment of tangible and intangible assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
After impairment, depreciation/amortization is provided on the revised carrying amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation/amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
(f) Sale and lease back transactions
If a sale and leaseback transaction results in a finance lease, the profit or loss, i.e., excess or deficiency of sale proceeds over the carrying amounts is deferred and amortized over the lease term in proportion to the depreciation of the leased asset. The unamortized portion of the profit is classified under “Other liabilities” in the financial statements.
If a sale and leaseback transaction results in an operating lease, profit or loss is recognized immediately in case the transaction is established at fair value. If the sale price is below fair value, any profit or loss is recognized immediately except that, if the loss is compensated by future lease payments at below market price, it is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over the fair value is deferred and amortized over the period for which the asset is expected to be used.
(g) Leases
Where the Company is the lessee
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of the minimum lease payments. Lease payments
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials120
are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalized.
A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Where the Company is the lessor
Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating lease. Assets subject to operating leases are included in tangible assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Initial direct costs such as legal, brokerage, etc. and subsequent costs, including depreciation, incurred in earning the lease income are recognized as an expense in the statement of profit and loss.
(h) Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
(i) Inventories
Project materials are valued at lower of cost, determined on a weighted average basis, and net realizable value. Scrap is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
(j) Unbilled revenue (work-in-progress)
Unbilled revenue (work-in-progress) is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
(k) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
i) Contract revenue associated with long term construction contracts is recognized as revenue by reference to the stage of completion of the contract at the balance sheet date. The stage of completion of project is determined by the proportion that contracts costs incurred for the work performed up to the balance sheet date bear to the estimated total contract costs. However, profit is not recognized unless there is reasonable progress on the contract. If total cost of a contract, based on technical and other estimates, is estimated to exceed the total contract revenue, the foreseeable loss is provided for. The effect of any adjustment arising from revisions to estimates is included in the statement of profit and loss of the year in which revisions are made. Contract revenue earned in excess of billing has been classified as “Unbilled revenue (work-in-progress)” and billing in excess of contract revenue has been classified as “Other liabilities” in the financial statements. Claims on construction contracts are included based on Management’s estimate of the probability that they will result in additional revenue, they are capable of being reliably measured, there is a reasonable basis to support the claim and that such claims would be admitted either wholly or in part. The Company assesses the carrying value of various claims periodically, and makes provisions for any unrecoverable amount arising from the legal and arbitration proceedings that they may be involved in from time to time. Insurance claims are accounted for on acceptance/settlement with insurers.
ii) Revenue from long term construction contracts executed in unincorporated joint ventures under work sharing arrangements is recognized on the same basis as similar contracts independently executed by the Company. Revenue from unincorporated joint ventures under profit
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 121
sharing arrangements is recognized to the extent of the Company’s share in unincorporated joint ventures.
iii) Revenue from hire charges is accounted for in accordance with the terms of agreements with the customers.
iv) Revenue from management services is recognized pro-rata over the period of the contract as and when the services are rendered.
v) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.
vi) Dividend income is recognized when the Company’s right to receive dividend is established by the reporting date.
vii) Export Benefit under the Duty Free Credit Entitlements is recognized in the statement of profit and loss, when right to receive license as per terms of the scheme is established in respect of exports made and there is no significant uncertainty regarding the ultimate collection of the export proceeds.
viii) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, which usually coincides with delivery of the goods.
ix) The Company collects service tax and value added taxes (VAT) on behalf of the Government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.
(l) Borrowing costs
Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
(m) Foreign currency transactions and translations
i) Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported
using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate prevailing at the date when such value was determined.
iii) Exchange differences
The Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:
a. Exchange differences arising on a monetary item that, in substance, forms part of the Company’s net investment in a non-integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences, which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.
b. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a tangible asset are capitalized and depreciated over the remaining useful life of the asset.
c. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the “Foreign Currency Monetary Item Translation Difference Account” and amortized over the remaining life of the concerned monetary item.
d. All other exchange differences are recognized as income or as expenses in the period in which they arise.
For the purpose of b and c above, the Company treats a foreign monetary item as “long-term foreign currency monetary item”, if it has a term of 12 months or more at the date of its origination. In accordance with MCA circular dated August 09, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.
iv) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/liability
The exchange differences arising on forward contracts to hedge foreign currency risk of an underlying asset or liability existing on the date of the contract are recognized in the statement of profit and loss of the period in which the exchange rates change, based on the difference between:
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials122
a. foreign currency amount of a forward contract translated at the exchange rates at the reporting date, or the settlement date where the transaction is settled during the reporting period, and
b. the same foreign currency amount translated at the latter of the date of the inception of the contract and the last reporting date, as the case may be.
The premium or discount on all such contracts arising at the inception of each contract is amortised as expense or income over the life of the contract.
Any profit or loss arising on cancellation or renewal of forward foreign exchange contracts is recognised as income or expense for the year upon such cancellation or renewal.
Forward exchange contracts entered to hedge the foreign currency risk of highly probable forecast transactions and firm commitments are marked to market at the balance sheet date, if such mark to market results in exchange loss. Such exchange loss is recognised in the statement of profit and loss immediately. Any gain is ignored and not recognised in the financial statements, in accordance with the principles of prudence enunciated in Accounting Standard 1- Disclosure of Accounting Policies.
v) Translation of integral and non integral foreign operations
The Company classifies all its foreign operations as either “integral foreign operations” or “non- integral foreign operations”.
The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.
The assets and liabilities of non-integral foreign operations are translated into the reporting currency at the exchange rate prevailing at the reporting date. Items of statement of profit and loss are translated at exchange rates prevailing at the dates of transactions or weighted average quarterly rates, where such rates approximate the exchange rate at the date of transaction. The exchange differences arising on translation are accumulated in the “Foreign currency translation reserve”. On disposal of a non-integral foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of profit and loss.
When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification are applied from the date of the change in the classification.
(n) Employee benefits
i) The Company makes contribution to statutory provident fund and pension funds in accordance with Employees’
Provident Funds and Miscellaneous Provisions Act, 1952, which is a defined contribution plan. The Company has no obligation, other than the contribution payable to respective funds. The Company recognizes contribution payable to respective funds as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
ii) Gratuity liability is a defined benefit obligation. The Company has obtained an insurance policy under group gratuity scheme with Life Insurance Corporation of India/ICICI Prudential Life Insurance Company Limited to cover the gratuity liability of the employees of project division and amount paid/payable in respect of present value of liability for past services is charged to the statement of profit and loss on the basis of actuarial valuation on the projected unit credit method made at the end of each financial year. Actuarial gains/losses are recognized in the statement of profit and loss in full in the period in which they occur.
iii) In respect to overseas branches and unincorporated joint venture operations, provision for retirement and other employee benefits are made on the basis prescribed in the local labour laws of the respective country, for the accumulated period of service at the end of the financial year.
iv) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.
(o) Income taxes
Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 123
to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in shareholders’ funds is recognized in shareholders’ funds and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences of earlier years. Deferred tax is measured using the tax rates and tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in shareholders’ funds is recognized in shareholders’ funds and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the
year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and disclosed as “Minimum alternate tax credit entitlement”. The Company reviews the “Minimum alternate tax credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
(p) Accounting for joint ventures
Accounting for joint ventures undertaken by the Company has been done as follows:
Type of Joint Venture
Accounting treatment
Jointly controlled operations
Company’s share of revenue, expenses, assets and liabilities are included in the financial statements as revenues, expenses, assets and liabilities respectively.
Jointly controlled entities
Company’s investment in joint ventures is reflected as investment and accounted for in accordance with para 2.1(h) above.
(q) Segment reporting
Identification of segments
The Company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocable to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
(r) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for the events such as bonus issue, share split or otherwise that have changed the
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials124
number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
(s) Employee stock compensation cost
Measurement and disclosure of the employee share-based payment plans is done in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India (ICAI). The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.
(t) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
(u) Derivative instruments
In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under Accounting Standard 11- The Effects of Changes in Foreign Exchange Rates, are marked to market on a portfolio basis, and the net loss, if any, after considering the offsetting effect of gain on the underlying hedged item is charged to the statement of profit and loss. Net gain, if any, after considering the offsetting effect of loss on the underlying hedged item, is ignored.
(v) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that
an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. A disclosure is made for a contingent liability when there is a:
a) possible obligation, the existence of which will be confirmed by the occurrence/non-occurrence of one or more uncertain events, not fully with in the control of the Company;
b) present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
c) present obligation, where a reliable estimate cannot be made.
(w) Provisions
A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
(x) Operating cycle
The operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents and the management considers this to be the project period.
(y) Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 125
3. Share capital
As at
March 31, 2016 March 31, 2015
Authorized shares
450,000,000 (Previous year 450,000,000) equity shares of ` 2 each 90.00 90.00
10,000,000 (Previous year 10,000,000) preference shares of ` 10 each 10.00 10.00
100.00 100.00
Issued, subscribed and fully paid-up shares
332,095,745 (Previous year 332,095,745) equity shares of ` 2 each 66.42 66.42
66.42 66.42
(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Equity shares
As at March 31, 2016 As at March 31, 2015
Nos. Amount Nos. Amount
At the beginning of the year 332,095,745 66.42 332,095,745 66.42
Issued during the year - - - -
Outstanding at the end of the year 332,095,745 66.42 332,095,745 66.42
(b) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of ` 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(c) Details of shareholders holding more than 5% of the equity shares in the Company
Name of the shareholder As at March 31, 2016 As at March 31, 2015
Nos. % holding Nos. % holding
Cawdor Enterprises Limited 75,691,430 22.79 75,691,430 22.79
Spectra Punj Finance Private Limited 22,148,305 6.67 22,148,305 6.67
As per records of the Company, including its register of shareholders/members, the above shareholding represents both legal and beneficial ownerships of shares.
(d) Shares reserved for issue under options
For details of shares reserved for issue under the employee stock option plan (ESOP) of the Company, please refer note 25.
(e) Over the period of five years immediately preceding March 31, 2016, neither any bonus shares were issued nor any shares were allotted for consideration other than cash. Further, no shares were bought back during the said period.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials126
4. Reserves and surplus
As at
March 31, 2016 March 31, 2015
Capital reserve 25.61 25.61
Securities premium account 2,485.55 2,485.55
Debenture redemption reserve 112.87 112.87
Asset revaluation reserve
Balance as per the last year 2.10 3.25
Less: Adjustment relating to depreciation on assets (Pursuant to enactment of Schedule II to the 2013 Act) – (1.15)
Closing balance 2.10 2.10
General reserve 98.18 98.18
Foreign currency translation reserve
Balance as per the last year (16.34) (3.80)
Add: Exchange difference during the year on net investment in non-integral operations 12.24 (12.54)
Closing balance (4.10) (16.34)
Surplus/(deficit) in the statement of profit and loss
Balance as per the last year 430.26 962.33
Less: Adjustment relating to depreciation on assets (Pursuant to enactment of Schedule II to the 2013 Act) – (25.41)
Loss for the year (1,649.51) (506.66)
Less: Appropriations – –
Net surplus/(deficit) in the statement of profit and loss (1,219.25) 430.26
Total reserves and surplus 1,500.96 3,138.23
5. Long-term borrowings
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Debentures (secured)
10.50% debentures redeemable at par at the end of 5 years from the deemed date of allotment, i.e., October 15, 2010.
Secured by first charge on Flat No. 201, Satyam Apartment, Saru Section Road, Jamnagar, Gujarat, India and subservient charge on the moveable tangible and current assets of the Company.
– – 300.00 300.00
12.00% debentures redeemable at par in ten equal half-yearly installments beginning at the end of 5 years from the date of allotment, i.e., January 02, 2009.
Secured by first pari passu charge on the moveable tangible assets of the project division of the Company and further secured by exclusive charge on the Flat No. 202, Satyam Apartment, Saru Section Road, Jamnagar, Gujarat, India.
60.00 90.00 75.00 45.00
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 127
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Term loans
Indian rupee loan from banks (secured)
Loans carrying weighted average rate of interest of 11.88% (Previous year 11.49%), repayable in 36 to 60 monthly installments.
Secured by way of exclusive charge on the equipment purchased out of the proceeds of loans.
0.82 1.75 0.98 7.75
Loans carrying weighted average rate of interest of 11.92% (Previous year 12.74%), repayable in 15 to 16 quarterly installments beginning at the end of 1 year from the disbursement.
Secured by way of first pari passu charge on moveable tangible assets of the project division of the Company.
6.25 37.08 22.29 44.05
Loan carrying rate of interest of 12.25% (Previous year 12.25%), repayable in 22 equal quarterly installments beginning at the end of 1 year from the date of first disbursement.
Secured by way of pari passu first charge on the existing and future moveable tangible assets of the project division of the Company, pari passu second charge on current assets of the project division of the Company (excluding receivables of the projects financed by other banks).
– 13.51 13.36 34.09
Loan carrying rate of interest of 12.75% (Previous year 12.75%), repayable in 17 equal quarterly installments beginning at the end of 12 months from the date of first disbursement.
Secured by way of first charge on the corporate offices of the Company, at Plot No. 78 & 95, and Medicity building situated at Sector 32 and 38 respectively at Gurgaon, Haryana, India. Further secured by way of first pari passu charge on the moveable tangible assets of the project division of the Company (upto 0.5 times of loan outstanding).
50.59 109.41 117.65 58.82
Loans carrying weighted average rate of interest of 10.85% repayable in 12 quarterly installments beginning at the end of 2 years from the date of first disbursement.
Secured by way of first ranking pari-passu charge on the existing and future current assets, except receivables of foreign projects financed by foreign lenders, of the Company and first ranking pari-passu charge on the existing and future movable and immovable tangible assets of the Company, except those specifically charged to others lenders of Company. Collaterally secured by personal guarantee of a promoter. Further secured by pledge of 17,516,100 equity shares of Air Works India (Engineering) Private Limited; first pari passu charge on the land & building at Malanpur (M.P); pledge of 6,795,000 shares of Punj Lloyd Infrastructure Limited and second charge on 74,667,260 shares of Company held by two promoter group companies, pledged to IFCI Limited.
1,204.97 – – –
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials128
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Foreign currency loan from banks (secured)
3 months EBOR plus 2.50% (Previous year 3 months EBOR plus 2.50%) loan repayable in 14 equal quarterly installments, beginning at the end of 1 quarter from the date of its origination.
Secured by way of first pari passu charge on moveable tangible assets of the project division of the Company.
– – 10.29 14.52
Foreign currency loan from others (secured)
Loan carrying rate of interest of 5.77% (Previous year 5.77%), repayable in 17 equal half yearly installments, beginning at the end of 4 years from the date of its origination. Secured by first pari passu charge on the moveable tangible assets of the project division of the Company.
– 59.42 93.58 29.75
Indian rupee loan from financial institutions (secured)
Loans carrying weighted average rate of interest of 12.91% (Previous year 13.12%), repayable in 29 to 60 monthly installments beginning at the end of 12 months from the date of first disbursement.
Secured by first and exclusive charge by way of hypothecation on certain specific equipments financed through the loan.
26.61 2.56 3.38 36.41
Loan carrying rate of interest of 13.60% (Previous year 13.85%), repayable in 16 quarterly installments beginning at the end of 12 months from the date of first disbursement.
Secured by way of first pari passu charge on existing and future moveable tangible assets of the project division of the Company.
– – 12.50 18.75
Loan carried rate of interest of 16.00%, repayable in 12 monthly installments beginning at the end of 1 month from the date of first disbursement.
Secured by way of first charge on the present and future current assets of the project division of the Company (excluding receivables of the projects financed by other banks).
– – – 6.00
Loan carrying rate of interest of 13.00% (Previous year 13.00%), repayable in 36 monthly installments starting from October 2016.
Secured by way of first ranking pari-passu charge on entire current assets of the Company, except receivables exclusively charged to other lenders of the Company. First ranking pari-passu charge on movable and immovable tangible assets of the Company, both present and future, except those specifically charged to other lenders of Company.
48.61 58.33 9.72 –
Loan carrying rate of interest of 13.25% (Previous year 13.95%), repayable in 12 equal quarterly installments after the moratorium period of 2 years from the date of disbursement.
Secured by way of first pari passu charge on the moveable tangible assets of the project division of the Company and subservient charge on the corporate offices of the Company, at Plot No. 78 & 95, and Medicity building situated at Sector 32 and 38 respectively at Gurgaon, Haryana, India.
133.33 183.33 66.67 16.67
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 129
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Loan carrying rate of interest of 10.93% (Previous year 11.50%), repayable in 12 quarterly installments beginning at the end of 2 years from the date of first disbursement.
Secured by way of first ranking pari-passu charge on the existing and future current assets, except receivables of foreign projects financed by foreign lenders, of the Company and first ranking pari-passu charge on the existing and future movable and immovable tangible assets of the Company, except those specifically charged to others lenders of Company. Collaterally secured by personal guarantee of a promoter. Further secured by pledge of 17,516,100 equity shares of Air Works India (Engineering) Private Limited; first pari passu charge on the land & building at Malanpur (M.P); pledge of 6,795,000 shares of Punj Lloyd Infrastructure Limited and second charge on 74,667,260 shares of Company held by two promoter group companies, pledged to IFCI Limited.
18.70 10.30 1.35 –
Other loans (secured)
Finance lease obligations carried weighted average rate of interest of 14.89%. Secured by first and exclusive charge by way of hypothecation on specific equipments financed through the loan.
– 21.30 – 39.58
1,549.88 586.99 726.77 651.39
The above amount includes
Secured borrowings 1,549.88 586.99 726.77 651.39
Amount disclosed under the head “Other liabilities” (refer note 9) – – (726.77) (651.39)
Net amount 1,549.88 586.99 – –
6. Deferred tax liabilities (net)
As at
March 31, 2016 March 31, 2015
Deferred tax liability
Impact of difference between tax depreciation and depreciation / amortization as per books 52.30 57.54
Difference in carrying value of scaffoldings as per income tax and financial books – 4.19
Effect of expenditure not debited to statement of profit and loss but allowed / allowable in income tax 43.84 64.66
Gross deferred tax liability 96.14 126.39
Deferred tax asset
Impact of expenditure charged to the statement of profit and loss in the current year but allowable for tax purposes on payment basis 1.49 5.23
Unrealized foreign exchange on purchase of tangible assets 7.17 6.09
Impact of difference between assets of sale and lease back transactions as per tax books and as per financial reporting – 8.27
Impact of unrealized profit on sale and lease back transactions – 10.88
Effect of unabsorbed depreciation and carried forward losses # 87.48 95.92
Gross deferred tax assets 96.14 126.39
Net Deferred tax liability – –
# The Company has accounted for deferred tax assets on timing differences, including those on unabsorbed depreciation and business losses, to the extent of deferred tax liability recognized at the balance sheet date, for which it is virtually certain that future taxable income would be generated by reversal of such deferred tax liability.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials130
7. Provisions
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Provision for employee benefits
Provision for gratuity (also refer note 24) 1.50 0.58 1.49 1.50
Provision for compensated absences – – 16.94 17.11
1.50 0.58 18.43 18.61
Other provisions
Provision for foreseeable losses – – 85.03 –
Provision for current tax (net of advance tax) – – 55.55 59.23
– – 140.58 59.23
1.50 0.58 159.01 77.84
8. Short term borrowings
As at
March 31, 2016 March 31, 2015
Secured
Working capital loan repayable on demand
Loans carrying weighted average rate of interest of 12.91% (Previous year 13.28%).Secured by way of first charge on pari passu basis on current assets (excluding receivables of the projects financed by the other banks) and second charge on pari passu basis on moveable tangible assets of the project division of the Company.
281.48 153.82
Loans carrying weighted average rate of interest of 12.50% (Previous year 12.50%).Secured by way of exclusive charge on the receivables of the specific projects financed, first pari passu charge on the current assets of the project division (excluding receivables of the projects financed by the other banks), pari passu second charge on the movable tangible assets of the project division of the Company.
27.49 25.85
Loans carrying weighted average rate of interest of 11.49% (previous year 13.02%).Secured by way of first ranking pari-passu charge on existing and future current assets of the Company, except receivables of foreign projects financed by foreign lenders. First ranking pari-passu charge on movable and immovable tangible assets of the Company, both present and future, except those specifically charged to other lenders.
3,315.99 3,463.71
Loan carrying rate of interest of 4.50%.Secured by way of pari passu charge on the receivables financed.
15.61 –
Loan carrying rate of interest of 3 months LIBOR + 6% (Previous year 3 months LIBOR + 6%).Secured by way of pari passu charge on the receivables financed.
278.60 136.19
Loan carrying rate of interest of 4.38%.Secured by way of pari passu charge on the receivables financed.
17.14 –
Loan carrying rate of interest of 3 Months First Gulf Bank (FGB) EIBOR + 2.5% p.a. (Previous year 3 Months FGB EIBOR + 2.5% p.a.)Secured by way of charge on the receivables and assets of the project financed.
10.32 5.49
Unsecured
Buyer’s line of credit from banks carried weighted average rate of interest of 0.82%. – 141.49
Cash credit from a bank carried rate of interest of 3months EIBOR + 2.5%. – 40.98
3,946.63 3,967.53
The above amount includes:
Secured borrowings 3,946.63 3,785.06
Unsecured borrowings – 182.47
3,946.63 3,967.53
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 131
9. Other liabilities
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Trade payables (also refer note 39(d) for details of dues to micro and small enterprises) – – 2,396.14 2,250.67
Other liabilities
Current maturities of long term borrowings (note 5) – – 726.77 651.39
Interest accrued but not due on borrowings – – 38.89 24.34
Interest accrued and due on borrowings – – 114.44 21.35
Book overdraft – – 2.60 –
Unpaid dividends # – – 0.22 0.25
Service tax payable – – 0.76 0.23
Tax deducted at source payable – – 25.70 20.29
Advance billing – – 210.97 145.61
Advances from customers – – 1,654.08 1,535.52
Unearned income – 6.37 – 27.16
Due to subsidiaries – – 102.11 409.95
Security deposits – – 7.98 7.89
Capital goods suppliers – – 18.18 20.41
Others – – 1.56 2.48
– 6.37 2,904.26 2,866.87
– 6.37 5,300.40 5,117.54
# There is no amount due and outstanding which is to be credited to Investor Education and Protection Fund.
10. Tangible assets
Land Buildings Plant and equipment
Furniture and equipment
Tools Vehicles Total
Gross block at cost or valuation
At April 01, 2014 17.99 192.99 2,387.34 30.16 19.16 13.38 87.48 2,748.50
Additions – – 14.88 0.24 0.61 – 0.09 15.82
Disposals (-) – – 225.16 0.29 0.70 0.02 11.69 237.86
Other adjustments
Exchange differences – – 2.46 – – – – 2.46
Foreign currency translation – – 25.30 0.68 0.12 – 4.28 30.38
At March 31, 2015 17.99 192.99 2,204.82 30.79 19.19 13.36 80.16 2,559.30
Additions – – 20.90 0.05 0.21 – 0.18 21.34
Disposals(-) – – 257.36 3.74 5.86 0.19 10.76 277.91
Other adjustments
Exchange differences – – 4.41 – – – – 4.41
Foreign currency translation – – 4.15 0.20 0.29 – (1.12) 3.52
At March 31, 2016 17.99 192.99 1,976.92 27.30 13.83 13.17 68.46 2,310.66
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials132
Land Buildings Plant and equipment
Furniture and equipment
Tools Vehicles Total
Accumulated depreciation
At April 01, 2014 0.92 18.04 1,138.89 16.20 8.09 4.38 54.92 1,241.44
Charge for the year 0.22 3.74 283.19 7.40 1.73 1.47 15.04 312.79
Disposals(-) – – 151.46 – 0.44 0.01 8.22 160.13
Other adjustments
Foreign currency translation – – 13.03 0.46 0.24 – 3.12 16.85
Other * – 0.33 27.74 1.44 8.37 0.44 0.52 38.84
At March 31, 2015 1.14 22.11 1,311.39 25.50 17.99 6.28 65.38 1,449.79
Charge for the year 0.22 3.75 216.93 2.74 0.73 0.99 7.56 232.92
Disposals(-) – – 196.19 3.70 5.79 0.13 10.02 215.83
Other adjustments
Foreign currency translation – – 7.92 (0.26) 0.30 – (0.61) 7.35
At March 31, 2016 1.36 25.86 1,340.05 24.28 13.23 7.14 62.31 1,474.23
Net block
At March 31, 2015 16.85 170.88 893.43 5.29 1.20 7.08 14.78 1,109.51
At March 31, 2016 16.63 167.13 636.87 3.02 0.60 6.03 6.15 836.43
*represents adjustment made pursuant to enactment of Schedule II to the 2013 Act.
1. Gross block of land includes 2.10 (Previous year: 2.10) on account of revaluation carried out in earlier years. The said revaluation was carried out during the year ended March 31, 2002 by an external agency using “price indices released by the Economic Advisor’s Office, Ministry of Industry/Verbal Quotation/Comparison/estimation or any other method considered prudent in specific cases”.
2. In compliance with the notification dated March 31, 2009 (as amended) issued by MCA, the Company has exercised the option available under paragraph 46 to the Accounting Standards 11 – The effect of changes in foreign exchange rates. Accordingly, during the current year, the foreign exchange loss of 4.41 (Previous year: 2.46) has been added to gross block of plant and equipment.
3. Gross block of land includes leasehold land of cost 6.41 (Previous year: 6.41). Accumulated depreciation thereon is 1.36 (Previous year: 1.14).
4. Gross block of vehicles includes vehicles of cost 1.25 (Previous year: 1.27) taken on finance lease. Accumulated depreciation there on is 1.14 (Previous year: 0.90).
5. Gross block of plant and equipment includes equipment of cost 110.11 (Previous year: 114.16) taken on finance lease. Accumulated depreciation thereon is 109.75 (Previous year: 75.90).
6. Gross block of buildings includes building of cost 98.76 (Previous year: 98.76) taken on finance lease. Accumulated depreciation thereon is 5.69 (Previous year: 4.04).
11. Intangible assets
Computer software
Total
Gross block
At April 01, 2014 12.84 12.84
Additions 0.77 0.77
Disposals(-) – –
Other adjustments
Foreign currency translation 0.00 0.00
At March 31, 2015 13.61 13.61
Additions 0.22 0.22
Other adjustments
Foreign currency translation (0.00) (0.00)
At March 31, 2016 13.83 13.83
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 133
Computer software
Total
Amortization
At April 01, 2014 9.79 9.79
Charge for the year 0.95 0.95
Disposals(-) – –
Other adjustments
Foreign currency translation 0.00 0.00
At March 31, 2015 10.74 10.74
Charge for the year 1.01 1.01
Other adjustments
Foreign currency translation (0.00) (0.00)
At March 31, 2016 11.75 11.75
Net block
At March 31, 2015 2.87 2.87
At March 31, 2016 2.08 2.08
12. Non-current investments
As at
March 31, 2016 March 31, 2015
Trade investments (valued at cost unless stated otherwise)
Unquoted equity instruments
Investment in subsidiaries
Punj Lloyd International Limited100,000 (Previous year 100,000) equity shares of USD 1 each fully paid up.
0.44 0.44
Punj Lloyd Industries Limited11,500,195 (Previous year 11,500,200) equity shares of ` 10 each fully paid up.
11.50 11.50
Atna Investments Limited515,221 (Previous year 515,221) equity shares of ` 100 each fully paid up. (At cost less provision for other than temporary diminution in value ` 4.77 crore (Previous year ` 4.77 crore))
0.39 0.39
PLN Construction Limited2,000,000 (Previous year 2,000,000) equity shares of ` 10 each fully paid up.
3.09 3.09
Punj Lloyd Pte Limited573,346 (Previous year 573,346) equity shares of SGD 100 each and 1 (Previous year 1) equity share of SGD 1 fully paid up.
167.97 167.97
PL Engineering Limited5,000,000 (Previous year 5,000,000) equity shares of `10 each fully paid up.
5.00 5.00
PLI Ventures Advisory Services Private LimitedNil (Previous year 10,100) equity shares of ` 10 each fully paid up.
– 0.01
Punj Lloyd Aviation Limited53,998,710 (Previous year 53,998,710) equity shares of `10 each fully paid up.
54.00 54.00
Punj Lloyd Infrastructure Limited22,650,000 (Previous year 22,650,000) equity shares of `10 each fully paid up. Of the above, 6,795,000 (Previous year Nil) equity shares are pledged with bank.
30.15 30.15
Punj Lloyd Upstream Limited36,397,350 (Previous year 36,397,350) equity shares of `10 each fully paid up.
36.40 36.40
Indtech Global Systems Limited82,418 (Previous year 82,418) equity shares of `100 each fully paid up.
1.70 1.70
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials134
As at
March 31, 2016 March 31, 2015
Sembawang Infrastructure (India) Private Limited9,575,000 (Previous year 9,575,000) equity shares of `10 each fully paid up. (At cost less provision for other than temporary diminution in value ` 0.10 crore (Previous year Nil))
– 0.10
Shitul Overseas Placement and Logistics Limited102,000 (Previous year 102,000) equity shares of ` 10 each fully paid up.
0.10 0.10
Dayim Punj Lloyd Construction Contracting Company Limited51,000 (Previous year 51,000) equity shares of SAR 20 each fully paid up.
1.23 1.23
Spectra Punj Lloyd Limited5,000,000 (Previous year 5,000,000) equity shares of `10 each fully paid up.
5.05 5.05
Punj Lloyd Infrastructure Pte Limited835,625 (Previous year 10) equity shares of SGD 1 each fully paid up. Above equity shares are encumbered vide a non-disposal undertaking.
6.35 2.41
PT Punj Lloyd Indonesia7,805 (Previous year 7,805) equity shares of USD 500 each fully paid up. (At cost less provision for other than temporary diminution in value ` 17.09 crore (Previous year Nil))
– 17.09
Investment in joint ventures
Thiruvananthpuram Road Development Company LimitedNil (Previous year 17,030,000) equity shares of ` 10 each fully paid up (also refer note 15)
– 17.03
Ramprastha Punj Lloyd Developers Private Limited5,000 (Previous year 5,000) equity shares of ` 10 each fully paid up.
0.01 0.01
Investment in others
Rajahmundry Expressway LimitedNil (Previous year 1,885,000) equity shares of ` 10 each fully paid up.
– 1.89
Andhra Expressway LimitedNil (Previous year 1,885,000) equity shares of ` 10 each fully paid up.
– 1.89
North Karnataka Expressway Limited3,860,456 (Previous year 3,860,456) equity shares of `10 each fully paid up.
3.86 3.86
GMR Hyderabad Vijaywada Expressways Private Limited500,000 (Previous year 500,000) equity shares of ` 10 each fully paid up.
0.50 0.50
Hazaribagh Ranchi Expressway Limited13,100 (Previous year 13,100) equity shares of ` 10 each fully paid up.
0.01 0.01
Kaefer Private Limited74,520 (Previous year 74,520) equity shares of ` 100 each fully paid up. (At cost less provision for other than temporary diminution in value ` 3.86 crore (Previous year ` 3.86 crore))
– –
Unquoted preference instruments Investment in subsidiary
Punj Lloyd Pte Limited450,000 (Previous year 450,000) redeemable convertible preference share of SGD 100 each and 1,400,000 (previous year 1,400,000) redeemable convertible preference share A of SGD 100 each fully paid up.
782.46 782.46
Unquoted other instruments Investment in subsidiary
Punj Lloyd Kazakhstan LLPKZT 1,107,977,200 (Previous year 1,107,977,200) being 100% of the amount of Charter Capital.
36.28 36.28
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 135
As at
March 31, 2016 March 31, 2015
Non-trade Unquoted equity instruments
Investment in others
RFB Latex Limited200,000 (Previous year 200,000) equity shares of ` 10 each fully paid up.(At cost less provision for other than temporary diminution in value ` 0.52 crore (Previous year ` 0.52 crore))
– –
Arooshi Enterprises Private Limited598,500 (Previous year 598,500) equity shares of ` 10 each fully paid up.(At cost less provision for other than temporary diminution in value ` 0.60 crore (Previous year ` 0.60 crore))
– –
Quoted equity instruments
Investment in others
Reliance Defence and Engineering Limited (formerly Pipavav Defence and Offshore Engineering Company Limited) 1,000 (Previous year 1,000) equity shares of ` 10 each fully paid up.
0.00 0.00
1,146.49 1,180.56
Aggregate amount of quoted investments (Market value: ` 0.01 crores (Previous year ` 0.01 crores)) 0.00 0.00
Aggregate amount of unquoted investments 1,173.43 1,190.31
Aggregate provision for diminution in value of investments 26.94 9.75
13. Loans and advances
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
(Unsecured, considered good)
Capital advances 0.00 1.96 – –
Security deposits – 5.72 11.87 7.43
Loan and advances to related parties – – 865.18 990.06
Advances recoverable in cash or kind – – 264.90 539.06
Other loans and advances
Advance income-tax (net of provision for taxation) 167.47 255.64 – –
Value added tax / sales tax recoverable (net) 146.95 131.08 – –
Balances with statutory/government authorities – – 23.50 37.29
Others – – 3.72 4.96
314.42 394.40 1,169.17 1,578.80
14. Trade receivables
As at
March 31, 2016 March 31, 2015
(Unsecured, considered good)
Outstanding for a period exceeding six months from the date they are due for payment (Includes retention money ` 152.72 crores (Previous year ` 162.99 crores))
1,398.54 1,117.81
Other receivables (Includes retention money ` 721.48 crores (Previous year ` 548.42 crores))
879.88 1,149.39
2,278.42 2,267.20
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials136
15. Other assets
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
(Unsecured, considered good)
Non-current bank balances (refer note 17) 2.91 11.63 – –
Others
Interest receivable – – 52.67 75.89
Export benefit receivable – 27.76 – –
Insurance claim receivable – – 15.71 –
Receivables against sale of investments – – 0.42 0.42
Assets held for disposal (also refer note 27) – – 0.00 –
Other receivable – – 0.11 5.22
2.91 39.39 68.91 81.53
16. Inventories
As at
March 31, 2016 March 31, 2015
Project materials 94.19 99.11
94.19 99.11
17. Cash and bank balances
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Cash and cash equivalents
Balances with banks:
On current accounts # – – 77.28 175.92
On EEFC account – – 136.37 1.60
Deposit with original maturity of less than three months – – 98.71 1.09
Cash on hand – – 3.98 4.12
– – 316.34 182.73
Other bank balances
Deposits with original maturity for more than 12 months* – – 0.30 –
Deposits with original maturity for more than 3 months but less than 12 months* – – - 0.31
Margin money deposit** 2.91 11.63 56.56 63.59
2.91 11.63 56.86 63.90
Amount disclosed under non-current assets (refer note 15) (2.91) (11.63) – –
– – 373.20 246.63
# Include unclaimed dividend of ` 0.22 crores (Previous year ` 0.25 crores)
* Fixed deposits pledged for `0.30 crores (Previous year `0.31 crores) against guarantees
** Margin money deposits with a carrying amount of ` 59.47 crores (Previous year ` 75.22 crores) are subject to first charge to secure the Company’s cash credit loans.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 137
18. Revenue from operations
Year ended
March 31, 2016 March 31, 2015
Contract revenue 2,727.86 3,880.40
Sale of traded goods 556.93 933.89
Other operating revenue
Hire charges 3.09 4.40
Management services 59.94 62.82
3,347.82 4,881.51
19. Other income
Year ended
March 31, 2016 March 31, 2015
Scrap sales 17.18 35.42
Unspent liabilities and provisions written back 9.63 16.01
Exchange differences (net) – 127.11
Interest income on
Bank deposits 3.00 2.88
Others 40.86 40.82
Net gain on sale of long-term investments 1.05 547.39
Profit on sale of fixed assets (net) 46.85 28.52
Dividend income on non-trade long term investments – 0.07
Bad debts recovered 2.71 –
Others 25.35 8.94
146.63 807.16
Year ended
March 31, 2016 March 31, 2015
Salaries, wages and bonus 389.74 504.88
Contribution to provident funds 10.84 11.89
Gratuity expense (also refer note 24) 2.32 2.76
Compensated absences 4.77 0.94
Staff welfare expenses 26.50 42.97
434.17 563.44
21. Other expenses
Year ended
March 31, 2016 March 31, 2015
Contractor charges 855.18 1,128.20
Site expenses 32.14 85.39
Diesel and fuel 38.44 80.85
Repair and maintenance
Buildings 2.96 3.65
Plant and equipments 1.68 3.09
Others 2.10 1.24
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials138
Year ended
March 31, 2016 March 31, 2015
Rent 24.00 35.29
Freight and cartage 35.23 25.28
Hire charges 58.53 102.43
Rates and taxes 12.97 30.12
Insurance 18.41 39.42
Travelling and conveyance 24.66 105.70
Payment to auditors (refer below) 1.26 1.10
Consultancy and professional 134.87 210.02
Exchange difference (net) 65.28 –
Irrecoverable balances written off 348.15 106.30
Provision for diminution in value of non-trade long term investment 34.23 3.86
CSR expenditure (also refer note 39(c)) 0.01 0.36
Provision for foreseeable losses on onerous contract 85.03 –
Miscellaneous 46.31 36.43
1,821.44 1,998.73
Payment to auditors
Year ended
March 31, 2016 March 31, 2015
As auditors:
Audit fee 0.45 0.32
Limited reviews 0.70 0.63
Certification 0.06 0.08
Reimbursement of expenses 0.05 0.07
1.26 1.10
22. Finance costs
Year ended
March 31, 2016 March 31, 2015
Interest 729.06 730.86
Bank charges 175.68 128.68
904.74 859.54
23. Earnings per share (EPS)
2015-16 2014-15
a) Net loss after tax available for equity share holders (` crores) (1,649.51) (506.66)
b) Weighted average number of equity shares for Basic and Diluted EPS (Nos.) 332,095,745 332,095,745
c) Earnings per share – Basic and Diluted (`) (49.67) (15.26)
d) Nominal value per equity share (`) 2 2
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 139
The Company has a defined benefit gratuity plan. Under the plan, every employee who has completed at least five years of service gets a gratuity on separation at 15 days of last drawn salary for each completed year of service. The scheme is funded with insurance companies in the form of qualifying insurance policy.
The following tables summarize the components of net benefit expense recognized in the statement of profit and loss, the funded status and the amounts recognized in the balance sheet for the plan.
Statement of profit and loss: Net employee benefit expense recognized in the employee cost
2015-16 2014-15
Current service cost 1.77 1.72
Interest cost on benefit obligation 0.89 0.89
Expected return on plan assets (0.89) (0.77)
Net actuarial loss 0.55 0.92
Net benefit expense 2.32 2.76
Actual return on plan assets 0.69 0.88
Balance sheet: Benefit asset/liability
2015-16 2014-15
Present value of defined benefit obligation 12.69 11.93
Fair value of plan assets (9.70) (9.85)
Less: Unrecognized past service cost – –
Net defined benefit obligation 2.99 2.08
Changes in the present value of the defined benefit obligation are as follows:
2015-16 2014-15
Opening defined benefit obligation 11.93 11.05
Interest cost 0.89 0.89
Current service cost 1.77 1.72
Benefits paid (2.25) (2.76)
Actuarial losses on obligation 0.35 1.03
Closing defined benefit obligation 12.69 11.93
Changes in the fair value of plan assets are as follows:
2015-16 2014-15
Opening fair value of plan assets 9.85 8.28
Expected return 0.89 0.77
Contributions by employer 1.41 3.43
Benefits paid (2.25) (2.74)
Actuarial gains/(losses) (0.20) 0.11
Closing fair value of plan assets 9.70 9.85
The Company expects to contribute ` 1.50 crores (Previous year ` 1.50 crores) to gratuity fund in the next year.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
2015-16%
2014-15%
Group Gratuity Cash Accumulation Policy with Life Insurance Corporation of India 39.32 35.53
Group Balance Fund with ICICI Prudential Life Insurance Co. Limited 0.10 0.09
Group Short Term Debt Fund with ICICI Prudential Life Insurance Co. Limited 0.01 0.02
Group Debt Fund with ICICI Prudential Life Insurance Co. Limited 60.57 64.36
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials140
The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below:
2015-16 2014-15
Discount rate 7.75% 7.80%
Expected rate of return on assets 9.00% 9.00%
Salary increase rate 5.50% 5.50%
Employee turnover
upto age 30 years 15.00% 15.00%
31-44 years 10.00% 10.00%
45 and above 5.00% 5.00%
Retirement age (in years) 60 60
Mortality rates Indian Assured Lives Mortality
(2006-08) Ultimate
Indian Assured Lives Mortality
(2006-08) Ultimate
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
Amounts for the current and previous four periods are as follows:
2015-16 2014-15 2014-15 2012-13 2011-12
Defined benefit obligation 12.69 11.93 11.05 11.07 11.43
Plan assets 9.70 9.85 8.28 8.56 7.22
Deficit (2.99) (2.08) (2.77) (2.51) (4.21)
Experience adjustments on plan liabilities – (loss)/gain 0.31 0.53 1.08 1.16 (0.56)
Experience adjustments on plan assets – (loss)/gain (0.20) 0.11 (0.09) 0.12 (0.01)
Actuarial assumptions for compensated absences:
2015-16 2014-15
Discount rate 7.75% 7.80%
Salary increase rate 5.50% 5.50%
Employee turnover
upto age 30 years 15.00% 15.00%
31-44 years 10.00% 10.00%
45 and above 5.00% 5.00%
Retirement age (in years) 60 60
Mortality rates Indian Assured Lives Mortality
(2006-08) Ultimate
Indian Assured Lives Mortality
(2006-08) Ultimate
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 141
25. Employee stock option plans (ESOP)During the year ended March 31, 2016, the Company has issued 4,870,000 stock options out of the lapsed and unutilized stock options from the existing ESOP plans to the eligible employees. The relevant details of the schemes are as follows:
ESOP 2005 ESOP 2006
Date of Board of Directors approval September 05, 2005 and February 12, 2016 June 27, 2006 and February 12, 2016
Date of Remuneration Committee approval Various dates subsequent to September 05, 2005 Various dates subsequent to June 27, 2006
Date of Shareholder’s approval September 29, 2005 and April 3, 2006 September 22, 2006
Number of options 4,000,000 5,000,000
Method of settlement Equity
Vesting period (for fresh grant) One year from the date of grant
Exercise period (for fresh grant) Five years from the date of vesting or one year from the date of separation from service, whichever is earlier
Vesting condition Employee should be in service
The details of activities under ESOP 2005 have been summarized below:
Number of options Weighted average exercise price (`)
2015-2016 2014-2015 2015-2016 2014-2015
Outstanding at the beginning of the year - - - -
Granted during the year 2,972,760 - 2.00 -
Exercised during the year - - - -
Expired during the year - - - -
Outstanding at the end of the year 2,972,760 - 2.00 -
Exercisable at the end of the year - - - -
The details of activities under ESOP 2006 have been summarized below:
Number of options Weighted average exercise price (`)
2015-2016 2014-2015 2015-2016 2014-2015
Outstanding at the beginning of the year - - - -
Granted during the year 1,897,240 - 2.00 -
Exercised during the year - - - -
Expired during the year - - - -
Outstanding at the end of the year 1,897,240 - 2.00 -
Exercisable at the end of the year - - - -
The weighted average share price at the exercise date is not applicable since no options were exercised during the year. The weighted average remaining contractual life of the stock options outstanding as at March 31, 2016 is 5.85 years.
The weighted average fair value of stock options granted during the year was ` 15.72. The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:
Particulars 2015-16
Dividend yield (%) 7.50
Expected volatility (%) [computed based on past two years historical share price] 53.06
Risk-free interest rate (%) 7.87
Share price (`) 22.40
Exercise price (`) 2.00
Expected life of options granted (in years) 3.50
For the purpose of valuation of the options granted under the aforesaid schemes upto the year ended March 31, 2016, the compensation cost, calculated as per the fair value method, is Nil.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials142
26. LeasesFinance lease: company as a lessee
The Company has finance leases and hire purchase contracts for certain project equipments, vehicles and building, the cost of which is included in the gross block of plant and equipment, vehicles and buildings respectively under tangible assets. The lease term is for one to ninety nine years. There is no escalation clause in the lease agreements. There are no significant restrictions imposed by lease arrangements.
2015-16 2014-15
Gross block at the end of financial year 210.12 214.19
Written down value at the end of financial year 93.54 133.35
Details of payments made during the year:
Principal 60.88 36.49
Interest 8.14 12.04
The break-up of minimum lease payments outstanding as at reporting date is as under
As at March 31, 2016 As at March 31, 2015
Principal Interest Total Principal Interest Total
Payable within one year – – – 39.58 6.64 46.22
Payable after one year but before end of fifth year – – – 21.30 1.50 22.80
Operating lease: company as a lessee
The Company has entered into commercial leases for office premises. There are no contingent rents in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no significant restrictions imposed by lease arrangements. The amount of total future minimum lease payments under non-cancellable operating leases as at March 31, 2016 is Nil (Previous year: Nil).
Operating lease: company as a lessor
The Company has entered into property lease for a commercial office building. The non-cancellable period of the lease is six years and includes an escalation clause of 15% after three years. Future minimum rentals receivable under non-cancellable operating lease are as follows:
As at
March 31, 2016 March 31, 2015
Not later than one year 6.62 –
Later than one year and not later than five years 32.84 –
Later than five years – –
27. Interest in joint ventures:The Company’s interest and share in joint ventures in the jointly controlled entities/operations are as follows:
(a) List of joint ventures
(i) Joint ventures of the Company
S. No
Name of joint ventures Nature of project Ownership interest as at Country of incorporationMarch 31, 2016 March 31, 2015
Jointly controlled entities
1 Thiruvananthpuram Road Development Company Limited @
Thiruvananthpuram city road improvement
50.00% 50.00% India
2 Ramprastha Punj Lloyd Developers Private Limited
Real estate developers 50.00% 50.00% India
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 143
S. No
Name of joint ventures Nature of project Ownership interest as at Country of incorporationMarch 31, 2016 March 31, 2015
Jointly controlled operations
1 Joint Venture of Whessoe Oil and Gas Limited and Punj Lloyd Limited
Revival of Ratnagiri Gas and Power Private Limited LNG Terminal project
* * **
2 Punj Lloyd PT Sempec Indonesia Installation of 4 new well platforms
* * **
3 Punj Lloyd Group Joint Venture Design and construction services of platform compression facilities
* * **
4 Public Works Company Tripoli Punj Lloyd Joint Venture
Laying of sewerage and water pipeline and city road development
* * **
(ii) Joint ventures of subsidiaries
S. No
Name of joint ventures Nature of project Ownership interest as at Country of incorporationMarch 31, 2016 March 31, 2015
Jointly controlled entities
1 PT Kekal Adidaya Extraction of coal 48.69% 48.69% Indonesia
2 AeroEuro Engineering India Private Limited
Designing in aerospace sector 40.16% 40.16% India
3 Punj Lloyd Dynamic LLC Construction work 48.00% 48.00% Qatar
4 Sembawang Caspi Engineers and Constructors LLP
Engineering, procurement and construction work
- 48.69% Kazakhstan
5 PLE TCI Engenharia Ltda Engineering and design consultancy services
39.36% 39.36% Brazil
6 Sembawang Precast System LLC Pre cast production including precasting of columns and tunnel segments
- 48.69% United Arab Emirates
7 PLE TCI Engineering Limited @ Engineering and Designing 39.36% 39.36% India
Jointly controlled operations
1 Kumagai-Sembawang-Mitsui Joint Venture
Design and construction of the Potong Pasir and on Keng MRT Stations, including tunnels
43.82% 43.82% **
2 Kumagai-SembCorp Joint Venture (DTSS)
Design and construction of Paya Lebar Deep Tunnel Sewerage System
48.69% 48.69% **
3 Kumagai-SembCorp Joint Venture Design and construction of the Changi Airport MRT Station, including tunnels
48.69% 48.69% **
4 Semb-Corp Daewoo Joint Venture Design and construction of Kallang and Paya Lebar Expressway
58.43% 58.43% **
5 Sembawang-Leader Joint Venture Construction of Shatin to Central Link Diamond Hill Station
- 53.56% **
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials144
(b) Interest in jointly controlled entities of the Company
Company’s share of Name of jointly controlled entity
Thiruvananthpuram Road Development Company Limited @
Ramprastha Punj Lloyd Developers Private Limited
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Assets
Non-current - 129.24 0.58 0.58
Current - 9.48 39.66 39.66
Liabilities
Non-current - 58.10 - -
Current - 78.42 40.25 40.25
Revenue - 14.70 - -
Expenditure - 15.51 0.00 0.00
Income tax expenses - - - -
Capital commitments (net of advances) - 8.81 - -
Contingent liabilities - 1.34 - -
* As per joint venture agreements, the scope and value of work of each partner has been clearly defined and accepted by the clients. The Company’s share in assets, liabilities, income and expenses are duly accounted for in the accounts of the Company in accordance with such division of work and therefore does not require separate disclosure. However, joint venture partners are jointly and severally liable to clients for any claims in these projects.
** These are un-incorporated joint venture, hence information on country of incorporation is not applicable.
@ Entities held for disposal in the near future (carried at net realizable value).
28. Segment InformationPrimary segment: Business segments –
The Company has identified the business segment as its primary reportable segment. The Company’s operating businesses are organized and managed separately according to the nature of products and services provided. The Company has identified Engineering, procurement and construction (EPC) services and Trading of goods as its two reportable segments. A description of the types of products and services provided by each reportable segment is as follows:
EPC segment includes providing of engineering, procurement and construction services in oil, gas and infrastructure sectors.
Trading of goods segment includes purchase and sale of steel, mainly outside India.
The following table presents segment revenue, results, assets and liabilities in accordance with AS 17 – Segment Reporting as on March 31, 2016 and March 31, 2015:
EPC Traded goods Corporate unallocable Total
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
Revenue
External revenue 2,730.95 3,884.80 556.93 933.89 59.94 62.82 3,347.82 4,881.51
Inter-segment revenue – – – – – – – –
Total revenue from operations 2,730.95 3,884.80 556.93 933.89 59.94 62.82 3,347.82 4,881.51
Result
Segment results (812.58) (396.83) (1.31) 2.34 47.91 45.65 (765.98) (348.84)
Finance costs (904.74) (859.54)
Interest income 43.86 43.69
Other income (4.23) 552.18
Income tax (18.42) 105.85
Net loss (1,649.51) (506.66)
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 145
EPC Traded goods Corporate unallocable Total
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
Other information
Segment assets 9,202.62 9,512.39 566.73 498.35 2,755.45 2,950.76 12,524.80 12,961.50
Segment liabilities 4,193.22 3,644.94 193.45 362.70 6,570.75 5,749.21 10,957.42 9,756.85
Capital expenditure 20.85 15.60 – – 0.71 3.88 21.56 19.48
Depreciation and amortization 221.90 296.58 – – 12.03 17.16 233.93 313.74
Non-cash expenses other than depreciation and amortization 303.38 18.55 – – 79.00 91.61 382.38 110.16
Secondary segment: Geographical segments* –
Although the Company’s major operating divisions are managed on a worldwide basis, they operate in two principal geographical areas of the world, in India, its home country, and the other countries.
The following table presents revenue from operations, unbilled revenue (work-in-progress) and trade receivables regarding geographical segments as at March 31, 2016 and March 31, 2015.
Revenue from operations Unbilled revenue (work-in-progress)
Trade receivable (including retention money)
Year ended As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
India 1,374.62 1,801.73 2,564.94 2,777.72 962.83 1,081.34
Other countries 1,973.20 3,079.78 3,672.78 3,180.89 1,315.59 1,185.86
3,347.82 4,881.51 6,237.72 5,958.61 2,278.42 2,267.20
* All the major assets other than unbilled revenue (work-in-progress) and trade receivables are situated in India and hence, separate figures for assets/additions to assets have not been furnished.
29. Related PartiesNames of related parties where control exists irrespective of whether transactions have occurred or not:
Subsidiary Companies Punj Lloyd Upstream Limited
Spectra Punj Lloyd Limited Punj Lloyd Aviation Limited
Punj Lloyd Industries Limited Sembawang Infrastructure (India) Private Limited
Atna Investments Limited Indtech Global Systems Limited
PLN Construction Limited Shitul Overseas Placement and Logistics Limited
Punj Lloyd International Limited PLI Ventures Advisory Services Private Limited *
Punj Lloyd Kazakhstan, LLP Dayim Punj Lloyd Construction Contracting Company Limited
Punj Lloyd Pte. Limited Punj Lloyd Infrastructure Pte. Limited
PL Engineering Limited Punj Lloyd Building and Infrastructure Private Limited **
Punj Lloyd Infrastructure Limited
Step Down Subsidiary Companies
PT Punj Lloyd Indonesia Punj Lloyd Engineers and Constructors Zambia Limited
PT Sempec Indonesia Buffalo Hills Limited
Punj Lloyd Oil & Gas (Malaysia) Sdn. Bhd. Indtech Trading FZE
Punj Lloyd Sdn. Bhd. PLI Ventures Limited *
Punj Lloyd Engineers and Constructors Pte. Limited Punj Lloyd Aviation Pte. Limited
Christos Aviation Limited Sembawang Libya for General Contracting & Real Estate Investment Joint Stock Company *
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials146
Punj Lloyd (B) Sdn. Bhd. * Contech Trading Pte. Limited
Punj Lloyd Kenya Limited Construction Technology (B) Sdn. Bhd. *
PL Global Developers Pte. Limited * Sembawang Mining (Kekal) Pte. Limited
Graystone Bay Limited * PT Indo Precast Utama *
Punj Lloyd Thailand (Co.) Limited PT Indo Unggul Wasturaya *
Punj Lloyd Delta Renewables Pte. Limited Sembawang (Tianjin) Construction Engineering Co. Limited
Punj Lloyd Delta Renewables Private Limited Sembawang Infrastructure (Mauritius) Limited *
Punj Lloyd Delta Renewables Bangladesh Limited Sembawang UAE Pte. Limited
Punj Lloyd Raksha Systems Private Limited Sembawang Consult Pte. Limited
Punj Lloyd Engineering Pte. Limited Sembawang (Malaysia) Sdn. Bhd.
Simon Carves Engineering Limited Jurubina Sembawang (M) Sdn. Bhd.
PL Delta Technologies Limited @ Tueri Aquila FZE
Punj Lloyd Solar Power Limited Sembawang Bahrain SPC *
Khagaria Purnea Highway Project Limited Sembawang Equity Capital Pte. Limited
Indraprastha Metropolitan Development Limited Sembawang of Singapore – Global Project Underwriters Pte. Limited *
PL Surya Urja Limited Sembawang of Singapore – Global Project Underwriters Limited *
PL Sunshine Limited Sembawang Hong Kong Limited
PL Solar Renewable Limited ** Sembawang (Tianjin) Investment Management Co. Limited
PL Surya Vidyut Limited ** PT Sembawang Indonesia
PL Sunrays Power Limited ** Reliance Contractors Private Limited
Sembawang Engineers and Constructors Pte. Limited Sembawang E&C Malaysia Sdn. Bhd.
Sembawang Development Pte. Limited
Joint Ventures
Thiruvananthpuram Road Development Company Limited @ Joint Venture of Whessoe Oil and Gas Limited and Punj Lloyd Limited
Ramprastha Punj Lloyd Developers Private Limited Punj Lloyd PT Sempec
Punj Lloyd Dynamic LLC Kumagai-Sembawang-Mitsui Joint Venture
AeroEuro Engineering India Private Limited Kumagai-SembCorp Joint Venture
PLE TCI Engineering Limited @ Kumagai-SembCorp Joint Venture (DTSS)
PLE TCI Engenharia Ltda Semb-Corp Daewoo Joint Venture
PT Kekal Adidaya Punj Lloyd Group Joint Venture
Sembawang Precast System LLC * Public Works Company Tripoli Punj Lloyd Joint Venture
Sembawang Caspi Engineers and Constructors LLP * Sembawang – Leader Joint Venture *
Associates
Air Works India (Engineering) Private Limited Reco Sin Han Pte. Limited *
* Entities either in the process of strike-of/liquidation or struck-off/ liquidated during the year.
** Entities incorporated / formed during the year.
@ Entities held for sale in the near future.
Key Manageral Personnel with whom transactions have taken place during the year:
Atul Punj - Chairman and Managing Director
Luv Chhabra* - Director (Corporate Affairs)
P. N. Krishnan* - Director – Finance
J. P. Chalasani* - Managing Director & Group CEO
*since resigned
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 147
Relatives of Key Managerial Personnel with whom transactions have taken place during the year:
Shiv Punj - Son of Chairman
Enterprises over which Key Managerial Personnel or their relatives exercise significant influence and with whom transactions have taken place during the year:
PT. Kanahya Lal Dayawanti Punj Charitable Society - Chairmanship of Father of Chairman
PTA Engineering and Manpower Services Private Limited - Shareholding of Chairman
PLE Hydraulics Private Limited - Shareholding of Chairman
Artcon Private Limited - Shareholding of Chairman
Manglam Equipment Private Limited - Shareholding of Chairman
Petro IT Limited - Shareholding of Brother of Chairman
Related party transactions
The following table provides the summary of transactions with related parties:
March 31, 2016 March 31, 2015
INCOME
Contract revenue
Khagaria Purnea Highway Project Limited 5.40 32.63
Indraprastha Metropolitan Development Limited – 14.94
PL Surya Urja Limited – 157.46
PL Sunshine Limited 143.49 –
Sale of traded goods
Punj Lloyd Pte Limited 217.77 816.48
Punj Lloyd Infrastructure Pte. Limited 50.44 –
Hire charges
Spectra Punj Lloyd Limited 0.90 1.16
PLN Construction Limited 1.04 1.05
Punj Lloyd Oil and Gas (Malaysia) Sdn Bhd – 0.57
Punj Lloyd Delta Renewables Private Limited 0.00 0.01
Management services
Punj Lloyd Pte Limited 4.45 11.45
PL Engineering Limited 0.23 0.43
Punj Lloyd Sdn. Bhd. 0.17 0.01
Punj Lloyd Oil and Gas (Malaysia) Sdn Bhd 1.28 1.27
Punj Lloyd Aviation Limited – 0.28
PT Punj Lloyd Indonesia – 0.52
Dayim Punj Lloyd Construction Contracting Company Limited 9.09 10.61
Punj Lloyd Delta Renewables Private Limited 0.28 0.28
Punj Lloyd Upstream Limited 0.27 1.08
Punj Lloyd Infrastructure Limited 0.07 0.60
Sembawang Engineers and Constructors Pte Limited 6.01 14.48
Punj Lloyd Engineering Pte Limited 3.72 –
Punj Lloyd Infrastructure Pte Limited 1.82 –
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials148
March 31, 2016 March 31, 2015
Interest income
Punj Lloyd Pte Limited 1.18 4.62
Punj Lloyd Infrastructure Pte. Limited 0.49 0.03
Punj Lloyd International Limited 0.55 0.34
Punj Lloyd Upstream Limited 2.02 2.07
Punj Lloyd Aviation Limited 1.48 0.87
Spectra Punj Lloyd Limited 3.73 4.51
PT Punj Lloyd Indonesia – 0.54
PLN Construction Limited 0.01 1.12
Other income
Spectra Punj Lloyd Limited 3.72 3.02
PLN Construction Limited 0.13 0.16
Punj Lloyd Aviation Limited 0.16 0.23
Punj Lloyd Upstream Limited 0.17 0.23
Punj Lloyd Delta Renewables Private Limited 0.06 0.30
Punj Lloyd Infrastructure Limited 0.58 0.60
EXPENSES
Contractors charges
Punj Lloyd Engineering Pte Limited 35.10 7.51
Punj Lloyd Delta Renewables Private Limited – 6.90
PLN Construction Limited 14.14 21.06
Project material consumed and cost of goods sold
Punj Lloyd Delta Renewables Private Limited – 6.05
Punj Lloyd Infrastructure Limited 69.25 –
Dayim Punj Lloyd Construction Contracting Company Limited 0.30 –
Hire charges
Punj Lloyd Aviation Limited 2.32 2.32
Spectra Punj Lloyd Limited 0.12 0.23
Consultancy and professional
PL Engineering Limited 23.04 29.12
Aeroeuro Engineering India Private Limited 0.01 0.37
Simon Carves Engineering Limited 0.01 1.64
Punj Lloyd Engineering Pte Limited – 1.54
Employee Benefits Expenses
Shiv Punj 0.27 0.04
Managerial remuneration
Luv Chhabra 0.80 1.41
J.P. Chalasani 3.49 3.35
P.N. Krishnan 1.22 2.31
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 149
March 31, 2016 March 31, 2015
Rent
Pt. Kanahya Lal Dayawanti Punj Charitable Society 1.37 1.37
PTA Engineering and Manpower Services Private Limited 0.21 0.19
PL Engineering Limited 1.91 0.99
Artcon Private Limited 0.03 0.02
Manglam Equipment Private Limited 0.03 0.02
Repair and maintenance
Spectra Punj Lloyd Limited 0.11 0.12
ASSETS
Tangible Assets purchased
Punj Lloyd Kazakhstan LLP – 0.05
Investment made during the year
Punj Lloyd Infrastructure Pte Limited 3.94 2.41
Investment sold/Redeemed during the year
Punj Lloyd Pte Limited – 232.40
Bank Guarantees Issued during the year
Punj Lloyd Infrastructure Limited 1.50 2.21
Punj Lloyd Pte Limited – 93.14
Punj Lloyd Oil and Gas (Malaysia) Sdn Bhd – 93.97
Punj Lloyd Sdn Bhd 119.69 252.52
Punj Lloyd Delta Renewables Private Limited 0.76 0.01
Bank Guarantees redeemed during the year
Indraprastha Metropolitan Development Limited 39.52 –
Punj Lloyd Infrastructure Limited – 1.80
PT Punj Lloyd Indonesia 20.76 –
Punj Lloyd Pte Limited 175.08 –
Punj Lloyd Upstream Limited 10.28 2.06
Sembawang Infrastructure (India) Private Limited 15.56 0.73
Punj Lloyd Solar Power Limited – 3.07
Punj Lloyd Delta Renewables Private Limited 1.35 4.24
Corporate Guarantees issued during the year
Dayim Punj Lloyd Construction Contracting Company Limited – 96.59
Sembawang Engineers & Constructors Pte Limited – 3.16
Punj Lloyd Solar Limited 1.59 –
PL Surya Urja Limited – 123.70
PL Sunshine Limited 103.91 –
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials150
March 31, 2016 March 31, 2015
Corporate Guarantees redeemed during the year
Punj Lloyd Pte Limited 161.84 –
PL Engineering Limited 33.00 –
Punj Lloyd Aviation Limited – 57.01
PT Punj Lloyd Indonesia – 88.17
Dayim Punj Lloyd Construction Contracting Company Limited 135.73 30.72
Sembawang Engineers & Constructors Pte Limited 340.16 301.73
Punj Lloyd Solar Power Limited – 2.92
Punj Lloyd Delta Renewables Private Limited – 50.00
Loans given during the year
Punj Lloyd Kazakhstan LLP – 26.31
Punj Lloyd Pte Limited – 3.92
Punj Lloyd Infrastructure Limited – 104.24
Punj Lloyd Aviation Limited – 12.37
Punj Lloyd Infrastructure Pte. Limited – 3.76
Loans received back during the year
Punj Lloyd Pte Limited – 117.79
Punj Lloyd Infrastructure Limited 0.03 15.60
PLN Construction Limited 4.88 12.88
Punj Lloyd Infrastructure Pte. Limited 3.76 –
Spectra Punj Lloyd Limited 0.37 1.54
Sembawang Infrastructure (India) Private Limited – 0.21
Balance outstanding as at end of the year
Receivable/(payables)
Spectra Punj Lloyd Limited 33.37 25.18
PT Punj Lloyd Indonesia (24.24) (20.84)
Punj Lloyd International Limited (2.56) (2.91)
Punj Lloyd Kazakhstan LLP 40.69 9.55
PLN Construction Limited 65.18 46.75
Punj Lloyd Pte Limited 116.60 295.31
Sembawang Engineers and Constructors Pte. Limited 36.69 34.22
PL Engineering Limited (25.58) (12.62)
Punj Lloyd Delta Renewables Private Limited 8.46 (1.28)
Dayim Punj Lloyd Construction Contracting Company Limited 27.52 34.04
Punj Lloyd Infrastructure Limited 30.25 8.24
Punj Lloyd Aviation Limited 51.72 51.82
Punj Lloyd Upstream Limited 20.61 18.54
Sembawang Infrastructure (India) Private Limited – 11.60
PT Sempec Indonesia (1.50) (1.42)
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 151
March 31, 2016 March 31, 2015
Punj Lloyd Oil and Gas (Malaysia) Sdn Bhd 2.38 (3.85)
PLI Ventures Advisory Services Private Limted – 0.82
Sembawang UAE Pte Limited (0.30) (0.28)
Tueri Aquila FZE 0.80 0.75
Punj Lloyd Engineers & Constructors Pte Limited 42.32 39.79
Indtech Trading FZE (2.39) (2.43)
Sembawang Consult Pte. Limited 0.50 0.34
Air Works India (Engineering) Private Limited 1.53 1.53
Khagaria Purnea Highway Project Limited 7.37 10.30
Punj Lloyd Solar Power Limited 0.03 0.07
Indraprastha Metropolitan Development Limited (9.53) (9.21)
PL Surya Urja Limited 3.06 5.52
Punj Lloyd Infrastructure Pte Limited 658.85 (2.62)
Punj Lloyd Kenya Limited 0.86 0.92
Punj Lloyd Engineers & Constructors Zambia Limited 0.31 0.27
Punj Lloyd Thailand Co Limited 7.32 7.15
Punj Lloyd Engineering Pte. Limited (0.63) (2.18)
Simon Carves Engineering Limited (2.88) (2.80)
Punj Lloyd Sdn Bhd (25.18) (21.11)
Buffalo Hills Limited (11.35) (10.65)
PL Sunshine Limited 11.96 –
Pt. Kanahya Lal Dayawanti Punj Charitable Society (2.87) (1.40)
PTA Engineering and Manpower Services Private Limtied (0.23) (0.11)
Petro IT Limited (0.71) (0.71)
Artcon Private Limited (0.00) 0.01
Manglam Equipment Private Limited (0.01) 0.00
Shiv Punj (0.04) (0.02)
Remuneration payable
Luv Chhabra – 0.05
P N Krishnan – 0.11
J P Chalasani 0.20 0.11
Loans Receivable
Punj Lloyd International Limited 4.64 4.42
Punj Lloyd Kazakhstan LLP 34.90 33.26
PLN Construction Limited – 4.88
Punj Lloyd Pte Limited – 313.83
PLI Ventures Advisory Services Private Limited – 0.99
Punj Lloyd Aviation Limited 27.44 27.44
Punj Lloyd Infrastructure Limited 315.49 315.51
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials152
March 31, 2016 March 31, 2015
Punj Lloyd Upstream Limited 16.81 16.81
Sembawang Infrastructure (India) Private Limited – 5.01
Spectra Punj Lloyd Limited 31.00 31.37
PT Punj Lloyd Indonesia 7.29 6.94
Punj Lloyd Infrastructure Pte. Limited – 3.76
Investments (Net of provision for diminutions in the value)
Punj Lloyd International Limited 0.44 0.44
Punj Lloyd Industries Limited 11.50 11.50
Atna Investments Limited 0.39 0.39
Punj Lloyd Kazakhstan LLP 36.28 36.28
PLN Construction Limited 3.09 3.09
Punj Lloyd Pte Limited 950.43 950.43
PL Engineering Limited 5.00 5.00
PLI Ventures Advisory Services Private Limited – 0.01
Punj Lloyd Aviation Limited 54.00 54.00
Punj Lloyd Infrastructure Limited 30.15 30.15
Punj Lloyd Upstream Limited 36.40 36.40
Sembawang Infrastructure (India) Private Limited – 0.10
Indtech Global Systems Limited 1.70 1.70
Shitul Overseas Placement and Logistics Limited 0.10 0.10
Dayim Punj Lloyd Construction Contracting Company Limited 1.23 1.23
Spectra Punj Lloyd Limited 5.05 5.05
PT Punj Lloyd Indonesia – 17.09
Thiruvananthpuram Road Development Company Limited – 17.03
Ramprastha Punj Lloyd Developers Private Limited 0.01 0.01
Punj Lloyd Infrastructure Pte Limited 6.35 2.41
Bank Guarantees outstanding
Indraprastha Metropolitan Development Limited – 39.52
Punj Lloyd Pte Limited – 175.08
Punj Lloyd Aviation Limited 17.90 17.90
Punj Lloyd Infrastructure Limited 9.91 8.41
Punj Lloyd Upstream Limited 2.69 12.98
Sembawang Infrastructure (India) Private Limited – 15.56
PT Punj Lloyd Indonesia – 20.76
Punj Lloyd Oil and Gas (Malaysia) Sdn Bhd 422.25 405.43
Punj Lloyd Sdn Bhd 384.70 252.52
Punj Lloyd Delta Renewables Private Limited 29.14 29.73
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 153
March 31, 2016 March 31, 2015
Corporate Guarantees outstanding
Punj Lloyd Pte Limited 11.57 549.92
PL Engineering Limited 17.98 50.98
Punj Lloyd Upstream Limited 55.21 52.61
Dayim Punj Lloyd Construction Contracting Company Limited 18.95 153.54
PT Punj Lloyd Indonesia 91.43 87.12
Sembawang Engineers and Constructors Pte. Limited 642.41 970.12
Indraprastha Metropolitan Development Limited 1,116.12 1,116.12
Punj Lloyd Delta Renewables Private Limited 55.50 55.50
Khagaria Purnea Highway Project Limited 616.00 616.00
Punj Lloyd Solar Power Limited 8.81 7.22
PL Surya Urja Limited 123.70 123.70
PL Sunshine Limited 103.91 –
Punj Lloyd Infrastructure Pte Limited 342.86 –
30. Capital and other commitments
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is `30.52 crores (Previous year ` 0.20 crores).
(b) For commitments relating to lease arrangements, please refer note 26.
31. Contingent liabilities
As at
March 31, 2016 March 31, 2015
a) Liquidated damages deducted by customers not accepted by the Company and pending final settlement. # 113.05 170.05
b) Corporate guarantees given on behalf of subsidiaries, joint ventures and associates 1,754.46 1,863.91
c) Value added tax demands: *
on disallowance of deduction on labour and services of the works contracts pending with sales tax authorities and High Court 16.57 39.29
for non submission of statutory forms 0.11 0.11
for purchases against statutory forms not accepted by department 7.76 8.76
against the central sales tax demand on sales in transit/ sale in the course of import 0.07 2.84
d) Entry tax demands against entry of goods into the local area not accepted by department. * 3.99 4.68
# excludes possible liquidated damages which can be levied by customers for delay in execution of projects. The management, based on consultation with various experts, believes that there exist strong reasons why no liquidated damages shall be levied by these customers. Although, there can be no assurances, the Company believes, based on information currently available, that the ultimate resolution of these proceedings is not likely to have an adverse effect on the results of operations, financial position or liquidity of the Company.
* The management believes that the claims made are untenable and is contesting them. As of the reporting date, the management is unable to determine the ultimate outcome of the above matters. However, based on favorable decisions/outcomes in similar cases earlier and based on legal opinions /consultations with solicitors, the management believes that there are good chances of success in above mentioned cases and hence, no provision there against is necessary.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials154
e) On March 17, 2010, the Company was subjected to a search and seizure operation under Section 132 and survey under Section 133A of the Income tax Act, 1961. During the search and seizure operation, statements of Company’s officials were recorded in which they were made to offer some unaccounted income of the Company for the financial year 2009-10. The Company believed that the above statements were made under undue mental pressure and physical exhaustion and therefore Company retracted the above statements subsequently. The Company filed fresh returns of income for Assessment years (AY) 2004-05 to 2009-10 in pursuance of the notices dated August 25, 2010 from the Income Tax Department (“the Department”). The Department completed the assessments for the AY 2004-05 to 2010-11 and created demands aggregating to ` 229.13 crores, by making some frivolous additions to the total income of the Company, which were adjusted against the income tax refunds of the said/subsequent years. The Company filed appeals against these additions on January 27, 2012 and June 12, 2013. On August 29, 2014, favorable orders were received from the CIT (Appeals) for the AY 2004-05 to 2006-07 for all the additions made except for the addition relating to permanent establishment, for which further appeal was filed by the Company to ITAT, Delhi dated October 31, 2014. Based on the expert opinion, the Company is hopeful that it will get relief in appeals pending before the CIT-(A) and/or Income Tax Appellate Tribunal. Hence, no adjustment is considered necessary for these matters.
f) The Company, directly or indirectly through its subsidiaries, is severally or jointly involved in certain legal cases with its customers / vendors in the ordinary course of business. The management believes that due to the nature of these disputes and in view of numerous uncertainties and variables associated with certain assumptions and judgments, and the effects of changes in the regulatory and legal environment, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial changes. The Company regularly monitors its estimated exposure to such loss contingencies and, as additional information becomes known, changes its estimates accordingly. In view of aforesaid reasons, as of the reporting date, it is unable to determine the ultimate outcome of these matters.
32. Derivative instruments and un-hedged foreign currency exposureThe Company, in addition to its Indian operations, operates outside India through its branches and an unincorporated joint venture established in United Arab Emirates (UAE), Oman, Qatar, Libya, Thailand, Bahrain, Kuwait and Saudi Arabia.
a) Particulars of un-hedged foreign currency exposures of the Indian operations as at the Balance Sheet date:
Currency
March 31, 2016 March 31, 2015
Amount in foreign currency
Exchange rate
AmountAmount
in foreign currency
Exchange rate
Amount
Liabilities
(i) Trade payable to suppliers
EUR 463,437 75.43 3.50 505,140 67.19 3.39
GBP 289,051 95.29 2.75 58,525 92.44 0.54
SGD 613,427 49.29 3.02 687,348 49.02 3.37
USD 60,841,113 66.25 403.09 83,546,861 63.13 527.43
MYR 24,682 17.11 0.04 9,042 16.86 0.02
HKD 3,961,170 8.54 3.38 2,672,445 8.06 2.15
AED 595,098 18.04 1.07 – – –
CHF 243,140 69.01 1.68 10,000 64.83 0.06
(ii) Other payable EUR 65,105 75.43 0.49 73,138 67.19 0.49
USD 1,431,263 66.25 9.48 2,073,939 63.13 13.09
(iii) Advance from customers
USD 5,689,167 60.02 34.15 4,870,902 59.22 28.85
EUR 164,570 55.46 0.91 608,064 67.14 4.08
BDT – – – 7,158,464 0.76 0.55
(iv) Loans taken USD 14,124,070 66.25 93.58 35,777,250 63.13 225.86
EUR – – – 712,800 67.19 4.79
(v) Due to subsidiaries USD 1,070,321 66.25 7.09 9,195,787 63.13 58.05
SGD – – – 67,955,766 49.02 333.12
GBP 13,149 95.29 0.13 – – –
MYR 18,847,921 17.11 32.25 12,386,388 16.86 20.88
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 155
Currency
March 31, 2016 March 31, 2015
Amount in foreign currency
Exchange rate
AmountAmount
in foreign currency
Exchange rate
Amount
Assets
(i) Advances to suppliers EUR 543,267 79.56 4.32 937,766 77.11 7.23
GBP 45,446 91.11 0.41 34,801 97.12 0.34
HKD 1,818,403 8.59 1.56 10,151,459 7.88 8.00
SGD 225,338 41.00 0.92 231,302 41.20 0.95
USD 739,249 61.63 4.56 2,577,993 59.83 15.42
MYR 683 15.79 0.00 104,873 25.68 0.27
AED 20,000 18.11 0.04 – – –
CAD 14,478 6.55 0.01 800 45.92 0.00
(ii) Trade receivables USD 60,751,316 66.25 402.50 152,095,363 63.13 960.18
AED 330,849 18.04 0.60 330,849 16.96 0.56
SGD 122,602,465 49.29 604.28 4,465,745 49.02 21.89
EUR 513,828 75.43 3.88 15,517 67.19 0.10
IDR’000 – – – 13,464,623 0.00 6.43
MYR 14,905,439 17.11 25.51 12,155,483 16.86 20.49
SAR – – – 170,786 16.61 0.28
HKD 4,964,543 8.54 4.24 4,964,543 8.06 4.00
MMK 1,479,501 0.05 0.01 79,500 0.06 0.00
(iii) Other receivables SGD – – – 2,489,580 49.02 12.20
USD 80,391 66.25 0.53 3,582,481 63.13 22.62
(iv) Bank balances USD 20,488,620 66.25 135.74 49,516 63.13 0.31
HKD 634,783 8.54 0.54 1,455,997 8.06 1.17
MMK 104,950 0.05 0.00 401,375 0.06 0.00
BDT 968,881 0.85 0.08 902,330 0.80 0.07
(v) Investments (gross) USD 4,002,500 43.81 17.54 4,002,500 43.81 17.53
KZT’000 1,107,977 0.33 36.28 1,107,977 0.33 36.28
SGD 243,170,226 39.35 956.78 242,334,611 39.32 952.84
SAR 1,020,000 12.05 1.23 1,020,000 12.05 1.23
(vi) Loan to subsidiaries USD 2,949,866 66.25 19.54 3,545,076 63.13 22.38
SGD – – – 64,019,821 49.02 313.83
(vii) Due from subsidiaries SGD 13,471,927 49.29 66.40 – – –
SAR 4,958,509 17.67 8.76 460,997 16.61 0.77
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials156
b) The income and expenditure of the foreign branches and unincorporated joint venture are denominated in currencies other than reporting currency. Accordingly, the Company enjoys natural hedge in respect of its foreign branches and unincorporated joint ventures’ assets and liabilities. The Company’s un-hedged foreign currency exposure in these branches and un-incorporated joint venture is limited to the net investment (assets – liabilities) in such operations, the particulars of which are as under:
S. No
Foreign operations
Currency
March 31, 2016 March 31, 2015
Amount in foreign currency
Exchange Rate
AmountAmount
in foreign currency
Exchange Rate
Amount
(i) Abu Dhabi AED 124,488,920 18.04 224.58 119,105,326 16.96 202.00
(ii) Oman OMR (475,184) 172.31 (8.19) 812,361 162.31 13.19
(iii) Qatar QAR 344,662,967 18.20 627.34 328,967,114 17.11 562.86
(iv) Libya LYD 109,150,919 48.26 526.74 149,408,451 52.83 789.32
(v) Thailand THB 2,030,730,987 1.88 382.77 2,563,595,129 1.92 491.95
(vi) Thailand JV THB 923,147,561 1.88 174.00 967,186,027 1.92 185.60
(vii) Dubai AED (7,890,603) 18.04 (14.24) (3,883,816) 16.96 (6.59)
(viii) Bahrain BHD (6,095) 176.21 (0.11) (6,295) 165.26 (0.10)
(ix) Saudi Arabia SAR 15,451,490 17.67 27.30 (12,601,916) 16.61 (20.93)
(x) Kuwait KWD 135,010 219.50 2.96 98,121 207.05 2.03
33. Loans and advances in the nature of loans given to subsidiaries in terms of disclosure required as per Schedule V, read with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:
Name of the entities Outstanding amount as at Maximum amount outstanding during the year ended
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Punj Lloyd Kazakhstan LLP 34.90 33.26 34.90 33.26
Punj Lloyd Pte Limited – 313.83 313.83 433.58
Punj Lloyd Aviation Limited 27.44 27.44 27.44 27.44
Punj Lloyd Infrastructure Limited 315.49 315.51 315.51 325.47
Punj Lloyd Upstream Limited 16.81 16.81 16.81 16.81
PT Punj Lloyd Indonesia 7.29 6.94 7.29 6.94
Punj Lloyd International Limited 4.64 4.42 4.64 4.42
PLI Ventures Advisory Services Private Limited – 0.99 0.99 0.99
Sembawang Infrastructure (India) Private Limited – 5.01 5.01 5.22
Spectra Punj Lloyd Limited 31.00 31.37 31.37 32.91
Punj Lloyd Infrastructure Pte. Limited – 3.76 3.94 3.76
PLN Construction Limited – 4.88 4.88 17.76
All the above loans are repayable on demand.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 157
34. The disclosures as per provisions of Clauses 38, 39 and 41 of Accounting Standard 7 – “Construction Contracts” are as under:
2015-16 2014-15
a) Contract revenue recognized as revenue in the period (Clause 38 (a)) 2,714.34 3,869.14
b) Aggregate amount of costs incurred and recognized profits (less recognized losses) up to the reporting date on contract under progress (Clause 39 (a)) 16,056.17 17,394.58
c) Advance received on contract under progress (Clause 39 (b)) 1,654.08 1,535.52
d) Retention amounts on contract under progress (Clause 39 (c)) 874.20 711.41
e) Gross amount due from customers for contract work as an asset (Clause 41(a)) 6,237.72 5,958.61
f) Gross amount due to customers for contract work as a liability (Clause 41 (b)) 210.97 145.61
35. a) The Company, during earlier years, accrued claims amounting to ` 735.80 crores (Previous year ` 735.80 crores) on Heera Redevelopment Project with Oil and Natural Gas Corporation Limited, based upon management’s assessment of cost over-run arising due to design changes and consequent changes in the scope of work on the said project since it was of the view that the delay in execution of the project was attributable to the customer. Due to the said reasons, certain differences and dispute arose between the parties and several rounds of discussions were held to explore the possibility of amicable resolution of the dispute mutually. The Company, with a view to resolve the matter in finality, expeditiously and with legal enforceability re-commenced the arbitration proceedings, which were kept in abeyance owing to proceedings by the Outside Expert Committee. The management is confident of satisfactory settlement of the dispute and recovery of the said amounts, accordingly no adjustments have been considered necessary in these financial statements.
b) During the year, in an effort to revive their operations, Punj Lloyd Pte Limited (PLPL) and Sembawang Engineers and Constructors Pte Limited (SEC), subsidiaries of the Company, filed separate applications before the Singapore High Court (“the Court”) for seeking its approval to enter into Schemes of Arrangement with their respective creditors pursuant to the applicable provisions of the Singapore Companies Act. In the meetings called as directed by the Court, SEC’s scheme could not get the requisite majority and PLPL’s scheme was withdrawn.
Subsequently, as a next course of action available under the Singapore Companies Act, these subsidiaries have filed separate applications before the Court for placing them under the Judicial Management. The said applications were admitted by the court and are currently pending for hearing.
As at March 31, 2016, the Company has investments and receivables aggregating to ` 1,103.72 crores from these subsidiaries. The management believes that the above developments do not necessitate any adjustment against the aforesaid amounts, as it is
confident of realizing these assets in excess of their book value. Hence, no adjustments have been considered necessary in these
financial statements.
36. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material
foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under the law/
Accounting Standards for the material foreseeable losses on such long term contracts (including derivative contracts, if any) has been
made in the books of accounts.
37. The Company has defaulted in repayment of dues (including interest) amounting to ` 563.44 crores (Previous year ` 92.55 croes), as on
March 31, 2016.
38. Additional information required to be disclosed under paragraph 5 (viii) of general instructions for
a) Projects materials consumed
These comprise miscellaneous items meant for execution of projects. Since these items are of different nature and specifications,
it is not practicable to disclose the quantitative information in respect thereof.
b) Traded goods
Sales of traded goods comprise of large number of items of different nature and specifications and hence it is not practicable to
furnish information in respect thereof. The cost of such material amounting to ` 558.24 crores (Previous year ` 931.55 crores) has
been included under project material consumed and cost of goods sold.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Financials158
c) Imported and indigenous projects materials consumed and cost of goods sold*
Amount Percentage
2015-16 2014-15 2015-16 2014-15
A) Imported 548.09 1,065.22 36.95 65.27
B) Indigenous 935.33 566.75 63.05 34.73
Total 1,483.42 1,631.97 100.00 100.00
* excluding project material consumed at overseas branches and an unincorporated joint venture.
d) Earnings in foreign currency
2015-16 2014-15
Hiring charges (including foreign operations Nil (Previous year Nil)) 1.11 1.98
Management services (including foreign operations 59.58 (Previous year 62.82)) 59.94 62.82
Sale of traded goods 268.21 816.48
Interest income (including foreign operations 4.76 (Previous year 0.05)) 6.98 5.59
Contract revenue (including foreign operations 909.19 (Previous year 1,911.16)) 1,442.89 2,318.36
Others (including foreign operations 42.97 (Previous year 23.78)) 42.97 23.78
Total 1,822.10 3,229.01
Foreign operations comprise foreign branches and an un-incorporated joint venture.
e) Expenditure in foreign currency
2015-16 2014-15
Project material consumed and cost of goods sold 548.09 1,065.22
Employee benefits expense 2.21 25.90
Foreign branches/unincorporated joint venture expenses 1,363.89 2,025.09
Finance cost 16.21 35.94
Contractor charges 370.34 202.35
Site expenses 6.77 0.44
Diesel and fuel 1.14 6.59
Repair and maintenance 0.93 0.09
Freight and cartage 3.96 2.05
Hire charges 12.02 3.51
Rent 0.24 0.01
Rates and taxes 0.28 0.34
Insurance 1.03 1.68
Travelling and conveyance 0.85 77.97
Consultancy and professional 3.39 78.69
Miscellaneous 5.02 3.72
Total 2,336.37 3,529.59
f) Value of imports calculated on CIF basis *
2015-16 2014-15
a) Projects materials consumed and cost of goods sold 553.36 1,066.97
b) Capital goods 4.43 –
Total 557.79 1,066.97
* excluding foreign operations, comprising foreign branches and an un-incorporated joint venture.
g) The Company had not declared dividend for the years ended March 31, 2015 and 2014, accordingly, dividend remitted in foreign exchange during the financial years ended March 31, 2016 and 2015 is Nil.
(All amounts in INR Crores, unless otherwise stated)
for the year ended March 31, 2016
Punj Lloyd | 159
39. Others
a) Details of loan given, investments made and guarantee given covered u/s 186(4) of the 2013 Act have been disclosed under the respective heads of ‘Related party transactions’ given in note 29.
b) Contract revenues include ` 239.02 crores (Previous year ` 83.89 crores) representing the retention money which will be received by the Company after the satisfactory performance of the respective projects. The period of release of retention money may vary from six months to eighteen months depending upon the terms and conditions of the projects.
c) The amount to be incurred towards Corporate Social Responsibility (CSR) for the financial year ended March 31, 2016, as prescribed under section 135 of the 2013 Act, is Nil. The Company has however incurred ` 0.01 crores (Previous year: 0.02) on promoting rural, nationally recognized, paralympic and Olympic sports and Nil (Previous year: 0.34) on Rural development.
d) Micro and small enterprises have been identified by the Company from the available information, which has been relied upon by the auditors. According to such identification, there are no due to micro and small enterprises that are reportable as per the Micro, Small and Medium Enterprises Development Act, 2006 as at the year end.
e) The Company has international and domestic transaction with ‘Associated Enterprises’ which are subject to Transfer Pricing regulations in India. The Management of the Company is of the opinion that such transactions with Associated Enterprises are at arm’s length and hence in compliance with the aforesaid legislation. Consequently, this will not have any impact on the financial statements, particularly on account of tax expense and that of provision of taxation.
f) Capitalization of expenditure
During the current and previous year ended on March 31, 2016 and March 31, 2015, the Company has not capitalized any expenditure of revenue nature to the cost of tangible asset/ intangible assets under development.
g) Amount in the financial statements are presented in INR crores, unless otherwise stated. Certain amounts that are required to be disclosed and do not appear due to rounding off are expressed as 0.00. One crore equals 10 millions.
h) Previous year figures have been regrouped/reclassified, where necessary, to conform to this year’s classification.
As per our report of even date
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
Financials160
Independent Auditors’ Report
To the Members of Punj Lloyd Limited
Report on the Consolidated Financial Statements
1. We have audited the accompanying consolidated financial statements of Punj Lloyd Limited, (“the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associates and joint ventures, comprising the Consolidated Balance Sheet as at 31 March 2016, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).
Management’s Responsibility for the Consolidated Financial Statements
2. The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associates and joint ventures, in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). The respective Board of Directors of the companies included in the Group, and of its associates and joint ventures are responsible for the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Further, in terms with the provisions of the Act, the respective Board of Directors of the companies, associates and joint ventures, which are incorporated in India are responsible for maintenance of adequate accounting records; safeguarding the assets; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements, which have been used for the purpose of preparation of the consolidated financial statements by the directors of the Holding Company, as aforesaid.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
4. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Holding Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.
7. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in ‘Other Matter’ paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries, associates and joint ventures as noted below, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and joint ventures as at 31 March 2016, and their consolidated loss and their consolidated cash flows for the year ended on that date.
Emphasis of Matters
9. We draw attention to the following matters in the notes to the consolidated financial statements:
a. note 33(a) regarding unbilled revenue (work-in-progress) aggregating to ` 735.80 crores as at 31 March 2016, representing claims made by the Company which are subject matter of arbitration;
b. note 33(b) regarding the Judicial Management applications filed in the Court of Singapore by two subsidiaries of the Company, as reported in the independent auditor’s report on the consolidated financial statements of one of the said subsidiaries.
Consolidated Financial Statements 2015-16
Punj Lloyd | Annual Report 2015-2016 161
Pending ultimate outcome of the above matters which is presently unascertainable, no adjustments have been made in the accompanying consolidated financial statements. Our opinion is not qualified in respect of these matters.
Other Matter
10. We did not audit the financial statements of certain branches, subsidiaries and jointly controlled entities, included in the consolidated financial statements, whose financial statements reflect total assets (net of eliminations) of ` 7,244.52 crores as at 31 March 2016, total revenues (net of eliminations) of ` 2,314.31 crores and net cash outflows amounting to ` 214.76 crores for the year ended on that date, as considered in the aforesaid consolidated financial statements. The consolidated financial statements also include the Group’s share of net loss of ` 3.44 crores for the year ended 31 March 2016, as considered in the consolidated financial statements, in respect of certain associates whose financial statements have not been audited by us. The financial statements of these branches, subsidiaries, joint ventures and associates have been audited by other auditors whose reports and additional information thereon have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid branches, subsidiaries, jointly controlled entities and associates, is based solely on the reports of the other auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11. As required by Section 143(3) of the Act, we report, to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements;
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors;
c) The consolidated balance sheet, the consolidated statement of profit and loss and the consolidated cash flow statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements;
d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e) On the basis of the written representations received from the directors of the Holding Company as on 01 April 2016 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies, associate company and jointly controlled companies incorporated in India, none of the directors of such companies, is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
f) For the matter described in sub paragraph (b) under the Emphasis of Matter paragraph, if the outcome does not turn out as anticipated by the management, in our opinion, may have an adverse effect on the functioning of the Group;
g) We have also audited the internal financial controls over financial reporting (IFCoFR) of the Company, its subsidiary companies, associate company and jointly controlled companies, which are companies incorporated in India, as at 31 March 2016, in conjunction with our audit of the consolidated financial statements of the group, its associates and joint ventures for the year ended on that date and our report dated 27 May 2016 as per Annexure I.
h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) Impact of pending litigations on consolidated financial position of the Group has been disclosed as detailed in Note 30 to the consolidated financial statements;
(ii) Provision has been made in the consolidated financial statements as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts, as detailed in Note 35 to the consolidated financial statements; and
(iii) there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company. The subsidiary companies, associate company and joint ventures incorporated in India did not have any dues on account of Investor Education and Protection Fund.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered AccountantsFirm’s Registration No.: 001076N/N500013
per Anupam KumarPartner Place: GurgaonMembership No.: 501531 Date: 27 May 2016
Independent Auditors’ Report
Financials162
Independent Auditor’s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
1. We have audited the internal financial controls over financial reporting (“IFCoFR”) of Punj Lloyd Limited (“the Holding Company”), its subsidiary companies (the Holding Company and its subsidiaries together referred to as “the Group”), its associate companies and joint ventures, which are companies incorporated in India as of March 31, 2016 in conjunction with our audit of the consolidated financial statements of the Holding Company as of and for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
2. The respective Board of Directors of the Holding Company, its subsidiary companies, its associate company and joint ventures, which are incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (“the Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on the IFCoFR of the Holding Company, its subsidiary companies, its associate companies and joint ventures as aforesaid, based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the IFCoFR of the Holding Company, its subsidiary companies, its associate company and joint ventures as aforesaid.
Meaning of Internal Financial Controls over Financial Reporting
6. A company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Annexure I to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
Punj Lloyd | Annual Report 2015-2016 163
Annexure I to the Independent Auditors’ Report of even date to
statements for the year ended 31 March 2016
Opinion
8. In our opinion and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries and joint ventures as noted below, the Holding Company, its subsidiary companies, its associate company and jointly controlled companies, which are incorporated in India, have, in all material respects, adequate IFCoFR and such IFCoFR were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.
Other Matters
9. We did not audit the IFCoFR insofar as it relates to certain branches, subsidiary companies, associates and joint ventures, which are incorporated in India, whose financial statements reflect total assets (net of eliminations) of ` 7,244.52 crores as at 31 March 2016, total revenues (net of eliminations) of ` 2,314.31 crores and net cash outflows amounting to ` 214.76 crores for the year ended on that date; and an associate company, which is a company incorporated in India, in respect of which, the Group’s share of net loss of ` 3.44 crores for the year ended 31 March 2016 has been considered in the consolidated financial statements. Our report on the adequacy and operating effectiveness of the IFCoFR for the Holding Company, its branches, subsidiary companies, its associate company and joint ventures, which are incorporated in India, under Section 143(3)(i) of the Act insofar as it relates to the aforesaid subsidiaries, associate and joint ventures, which are incorporated in India, is solely based on the corresponding reports of the auditors of such companies. Our opinion is not modified in respect of this matter.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered AccountantsFirm’s Registration No.: 001076N/N500013
per Anupam KumarPartner Place: GurgaonMembership No.: 501531 Date: 27 May 2016
(All amounts in INR Crores, unless otherwise stated)
Financials164
NotesAs at
March 31, 2016 March 31, 2015Equity and liabilitiesShareholders’ fundsShare capital 3 66.42 66.42 Reserves and surplus 4 (1,375.63) 899.36
(1,309.21) 965.78
Preference shares issued by subsidiary company 20.01 20.01 Minority interest (17.83) (52.62)
Non-current liabilitiesLong-term borrowings 5 2,538.74 1,824.81 Deferred tax liabilities (net) 6 10.48 16.34 Other liabilities 9 - 25.58 Provisions 7 9.37 8.61
2,558.59 1,875.34 Current liabilitiesShort-term borrowings 8 4,184.27 4,288.88 Trade payables 9 3,665.17 3,868.94 Other liabilities 9 3,769.00 3,356.62 Provisions 7 201.56 128.21
11,820.00 11,642.65 Total 13,071.56 14,451.16 AssetsNon-current assetsFixed assets
Tangible assets 10 2,158.52 2,580.77 Intangible assets 11 4.51 7.93 Goodwill on consolidation 333.34 333.53 Capital work-in-progress 73.86 100.13 Intangible assets under development 0.62 2.89
Non-current investments 12 49.46 67.91 Deferred tax assets (net) 6 7.65 6.92 Loans and advances 13 376.28 478.58 Other assets 15 2.91 39.39
3,007.15 3,618.05 Current assetsInventories 16 128.26 150.13 Unbilled revenue (work-in-progress) 6,814.79 6,775.30 Trade receivables 14 2,030.82 2,411.14 Cash and bank balances 17 545.79 640.12 Loans and advances 13 476.72 812.75 Other assets 15 68.03 43.67
10,064.41 10,833.11 Total 13,071.56 14,451.16 Summary of significant accounting policies 2.1
Consolidated Balance Sheet as at March 31, 2016
The accompanying notes form an integral part of the consolidated financial statements.This is the consolidated balance sheet referred to in our report of even date.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
(All amounts in INR Crores, unless otherwise stated)
Punj Lloyd | Annual Report 2015-2016 165
Notes Year ended
March 31, 2016 March 31, 2015
Income
Revenue from operations 18 4,260.85 7,090.26
Other income 19 154.49 784.89
Total income 4,415.34 7,875.15
Expenses
Projects materials consumed and cost of goods sold 1,873.63 2,911.76
Employee benefits expense 20 774.11 1,062.88
Other expenses 21 2,507.32 3,649.21
Total expenses 5,155.06 7,623.85
Earnings before interest (finance costs), tax, depreciation and amortization (EBITDA) (739.72) 251.30
Depreciation and amortization expense 10 & 11 384.86 470.26
Finance costs 22 1,069.78 1,002.23
Loss before tax (2,194.36) (1,221.19)
Tax expenses
- Current tax 23.41 25.78
- Minimum alternate tax credit entitlement/ written off (net) (0.17) 7.43
- Write back of previous years’ taxes (18.55) -
- Deferred tax (4.82) (100.21)
Total tax expense (0.13) (67.00)
Loss for the year before minority interest and share of profit/(loss) in associates (2,194.23) (1,154.19)
Share of profit/(loss) in associates (net) (3.44) 3.24
Share of (profits)/losses transferred to minority (47.67) 9.84
Loss for the year (2,245.34) (1,141.11)
Earnings per equity share [nominal value per share ` 2 each (Previous year ` 2)]
23
Basic and Diluted (in `) (67.61) (34.36)
Summary of significant accounting policies 2.1
for the year ended March 31, 2016
The accompanying notes form an integral part of the consolidated financial statements.This is the consolidated statement of profit and loss referred to in our report of even date.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
(All amounts in INR Crores, unless otherwise stated)
Financials166
Year ended
March 31, 2016 March 31, 2015
Cash flows from operating activities
Loss before tax (2,194.36) (1,221.19)
Adjustment to reconcile loss before tax to net cash flows
Depreciation and amortization 384.86 470.26
Profit on sale of fixed assets (net) (46.06) (34.63)
Provision for diminution in value of investment - 4.36
Loss on deconsolidation of a joint venture 2.19 -
Unrealised foreign exchange gain (net) (39.14) (21.18)
Unspent liabilities and provisions written back (13.97) (16.03)
Irrecoverable balances written off 396.81 165.69
Net gain on sale of long-term investments (1.05) (547.39)
Interest expense 865.18 840.51
Interest income (44.04) (40.83)
Dividend income (0.00) (0.07)
Operating loss before working capital changes (689.58) (400.50)
Changes in working capital:
Increase in trade payables (170.43) (101.85)
Increase/ (decrease) in provisions 90.87 (4.57)
Increase/ (decrease) in other current liabilities 182.58 (122.75)
Decrease/(increase) in trade receivables 38.63 (68.42)
Decrease in inventories 21.87 30.59
Decrease/(increase) in unbilled revenue (work-in-progress) (39.66) 513.13
Decrease/(increase) in loans and advances 326.35 (44.74)
Decrease/(increase) in other current assets (49.66) -
Cash generated from operations (289.03) (199.11)
Direct taxes paid (net of refunds) 84.89 108.17
Net cash used in operating activities (A) (204.14) (90.94)
Cash flows from investing activities
Purchase of fixed assets, including CWIP and capital advances (149.30) (216.48)
Proceeds from sale of fixed assets 100.74 89.14
Proceeds from sale of investments 45.50 797.06
(Investments in)/ Redemption/maturity of bank deposits (having original maturity of more than three months) 20.06 (63.22)
Interest received 40.58 52.92
Dividends received - 0.07
Increase in margin money deposits 182.09 26.43
Net cash flow from investing activities (B) 239.67 685.92
Consolidated Cash Flow Statement for the year ended March 31, 2016
(All amounts in INR Crores, unless otherwise stated)
Punj Lloyd | Annual Report 2015-2016 167
Year ended
March 31, 2016 March 31, 2015
Cash flows from financing activities
Proceeds from long-term borrowings 1,302.29 658.12
Repayment of long-term borrowings (360.33) (765.86)
Proceeds/(repayment) from short-term borrowings (net) (65.64) 381.79
Interest paid (765.91) (825.93)
Net cash flow from /(used in) financing activities (C) 110.41 (551.88)
Net increase in cash and cash equivalents (A + B + C) 145.94 43.10
Exchange differences (43.60) (85.92)
Cash outflow due to deconsolidation of a joint venture (3.24) -
Cash and cash equivalents at the beginning of the year 334.32 377.14
Cash and cash equivalents at the end of the year (also refer note 17) 433.42 334.32
The accompanying notes form an integral part of the consolidated financial statements.This is the consolidated cash flow statement referred to in our report of even date.
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary
Consolidated Cash Flow Statement for the year ended March 31, 2016
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials168
1. Corporate information
Punj Lloyd Limited (the Company) is a public limited company domiciled in India. Its equity shares are listed on two stock exchanges in India. The Company along with its subsidiaries, joint ventures and its associates (collectively referred to as “the Group”) is engaged in the business of engineering, procurement and construction in the field of oil, gas and infrastructure sectors. The Group caters to both domestic and international markets.
2. Basis of preparation
These consolidated financial statements of the group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) and comply in all material respects with the Accounting Standards notified under section 133 of the Companies Act, 2013 (“2013 Act”), read together with paragraph 7 of the Companies (Accounts) Rules 2014 (as amended). The consolidated financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of certain tangible assets which are carried at revalued amounts and derivative financial instruments which have been measured at fair value.
The accounting policies adopted in the preparation of consolidated financial statements are consistent with those of previous year.
(a) Principles of Consolidation
The consolidated financial statements have been prepared in accordance with applicable Accounting Standards as mentioned below, read with applicable provisions and Schedule III to the 2013 Act:
i) Subsidiary companies are consolidated on a line-by-line basis by adding together the book values of the like items of assets, liabilities, income and expenses after eliminating all significant intra-group balances, intra-group transactions and unrealized profit or loss, except where cost cannot be recovered, in accordance with Accounting Standard 21 – “Consolidated Financial Statements”. The results of operations of a subsidiary are included in the consolidated financial statements from the date on which the parent subsidiary relationship came into existence.
ii) Interests in the assets, liabilities, income and expenses of the Joint Ventures are consolidated using proportionate consolidation method as per Accounting Standard 27 – “Financial Reporting of Interests in Joint Ventures”. Intra group balances, intra-group transactions and unrealized profit or loss are eliminated to the extent of the Company’s proportionate share, except where cost cannot be recovered.
iii) The difference between the cost to the Group of investment in Subsidiaries and Joint Ventures and the
proportionate share in the equity of the investee company as at the date of acquisition of stake is recognized in the consolidated financial statements as Goodwill or Capital Reserve, as the case may be. Goodwill arising on consolidation is tested for impairment annually.
iv) Minorities’ interest in net profits of consolidated subsidiaries for the year is identified and adjusted against the income in order to arrive at the net income attributable to the shareholders of the Company. Their share of net assets is identified and presented in the Consolidated Balance Sheet separately. Where accumulated losses attributable to the minorities are in excess of their equity, in the absence of the contractual/legal obligation on the minorities, the same is accounted for by the parent.
v) Investments in Associates are accounted for using the equity method as per Accounting Standard 23 – “Accounting for Investments in Associates in Consolidated Financial Statements”. The investment is initially recorded at cost, identifying any goodwill or capital reserve arising at the time of acquisition. The carrying amount of the investment is adjusted thereafter for the post acquisition change in the share of net assets of the Associate. However, the share of losses is accounted for only to the extent of the cost of investment. Subsequent profits of such Associates are not accounted for unless the accumulated losses (not accounted for by the Group) are recouped. Where the associate prepares and presents consolidated financial statements, such consolidated financial statements of the associate are used for the purpose of equity accounting. In other cases, standalone financial statements of associates are used for the purpose of consolidation.
vi) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as the Company’s standalone financial statements. Differences in accounting policies, if any, are disclosed separately.
vii) The financial statements of the entities used for the purpose of consolidation are drawn up to same reporting date as that of the Company.
viii) As per Schedule III to the 2013 Act, read with applicable Accounting Standard and General Circular 39/2014 dated October 14, 2014, only the disclosures relevant to the consolidated financial statements have been disclosed. Further, additional statutory information disclosed in separate financial statements of the parents/ subsidiaries having no bearing on the true and fair view of the consolidated financial statements is not disclosed in consolidated financial statements.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 169
(b) Use of estimates
The preparation of consolidated financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring an adjustment to the carrying amounts of assets or liabilities in future periods.
(c) Tangible assets
Tangible assets, except a piece of land and few items of plant and equipment acquired before March 31, 1998, are stated at cost, less accumulated depreciation and impairment losses, if any. The cost comprises the purchase price, borrowing costs, if capitalization criteria are met, and directly attributable cost of bringing the asset to its working condition for the intended use. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of fixed assets are required to be replaced at intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when a significant inspection is performed, its cost is recognized in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. Any trade discounts and rebates are deducted in arriving at the purchase price.
During the year ended March 31, 1998, the Company revalued certain plant and equipment. These plant and equipment are measured at fair value less accumulated depreciation and impairment losses, if recognized after the date of the revaluation. During the year ended March 31, 2002, the Company revalued a piece of land at fair value. In case of revaluation of tangible assets, any revaluation surplus is credited to the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in the consolidated statement of profit and loss, in which case the increase is recognized in the consolidated statement of profit and loss. A revaluation deficit is recognized in the consolidated statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.
Subsequent expenditure related to an item of tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing tangible assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the consolidated statement of profit and loss for the period during
which such expenses are incurred.
The Group adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset. In accordance with Ministry of Corporate Affairs (‘MCA’) circular dated August 09, 2012, exchange differences adjusted to the cost of tangible assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset, for the period. In other words, the Group does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange differences.
Gains or losses arising from de-recognition of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated statement of profit and loss when the asset is derecognized.
(d) Depreciation on tangible assets
i) Depreciation on tangible assets is calculated on straight-line basis using the rate arrived at based on the useful lives estimated by the management. The Group has used the following lives to provide depreciation on its tangible assets.
Asset Description Useful lives estimated by the management (years)
Factory buildings 30
Other buildings 60
Plant and equipment 3 – 20
Furniture and fixtures, office equipments and tools 3 – 20
Vehicles 3 – 10
ii) Leasehold land is amortized on a straight line basis over the period of lease, i.e., 30 years, except for leasehold land which is under perpetual lease.
iii) Assets acquired under sale and lease back transactions are depreciated on a straight line basis over the period of lease.
iv) Depreciation on completed phase of road projects is provided over the period of concession agreement. Overlay cost included in the cost of Road is depreciated over a period of 5 years.
v) In case of foreign companies comprised within the Group, depreciation is provided for on straight-line basis so as to write off the value of assets over their useful life, as estimated by the management, which range from 2 to 30 years.
(e) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials170
assets are carried at cost less accumulated amortization and impairment losses, if any.
Intangible assets are amortized on a straight line basis, based on the nature and estimated useful economic life. The summary of amortization policies applied to the Group’s intangible assets is as below:
i) Software of project division is amortized over the period of licenses or six years, whichever is lower.
ii) Software of an unincorporated joint venture is amortized over the period of license or three years, whichever is lower.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
(f) Preoperative expenditure pending allocation
Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of indirect construction cost to the extent to which the expenditure is related to the construction or is incidental thereto. Other indirect expenditure (including borrowing cost) incurred during the construction period, which is neither related to the construction activity nor is incidental thereto, is charged to the consolidated statement of profit and loss. Income earned during the construction period is deducted from the total expenditure.
All direct capital expenditure on expansion is recognized. Indirect expenditure incurred on expansion, only that portion is recognized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are recognized only if they increase the value of the asset beyond its original standard of performance.
(g) Impairment of tangible and intangible assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
After impairment, depreciation/amortization is provided on the revised carrying amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation/amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
(h) Sales and leaseback transactions
If a sale and leaseback transaction results in a finance lease, the profit or loss, i.e., excess or deficiency of sale proceeds over the carrying amounts is deferred and amortized over the lease term in proportion to the depreciation of the leased asset. The unamortized portion of the profit is classified under “Other liabilities” in the consolidated financial statements.
If a sale and leaseback transaction results in an operating lease, profit or loss is recognized immediately in case the transaction is established at fair value. If the sale price is below fair value, any profit or loss is recognized immediately except that, if the loss is compensated by future lease payments at below market price, it is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over the fair value is deferred and amortized over the period for which the asset is expected to be used
(i) Leases
Where the Company is the lessee
Finance leases, which effectively transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 171
on the remaining balance of the liability. Finance charges are recognized as finance costs in the consolidated statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalized.
A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the consolidated statement of profit and loss on a straight-line basis over the lease term.
Where the Company is the lessor
Leases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating lease. Assets subject to operating leases are included in tangible assets. Lease income on an operating lease is recognized in the consolidated statement of profit and loss on a straight-line basis over the lease term. Initial direct costs such as legal, brokerage, etc. and subsequent costs, including depreciation, incurred in earning the lease income are recognized as an expense in the consolidated statement of profit and loss.
(j) Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.
Current investments are carried in the consolidated financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the consolidated statement of profit and loss.
(k) Inventories
Project materials are valued at lower of cost, determined on weighted average basis, and net realizable value. Scrap is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
(l) Unbilled revenue (work-in-progress)
Unbilled revenue (work-in-progress) is valued at net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
(m) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
i) Contract revenue associated with long term construction contracts is recognized as revenue by reference to the stage of completion of the contract at the balance sheet date. The stage of completion of project is determined by the proportion that contracts costs incurred for the work performed up to the balance sheet date bear to the estimated total contract costs. However, profit is not recognized unless there is reasonable progress on the contract. If total cost of a contract, based on technical and other estimates, is estimated to exceed the total contract revenue, the foreseeable loss is provided for. The effect of any adjustment arising from revisions to estimates is included in the consolidated statement of profit and loss of the year in which revisions are made. Contract revenue earned in excess of billing has been classified as “Unbilled revenue (work-in-progress)” and billing in excess of contract revenue has been classified as “Other liabilities” in the consolidated financial statements. Claims on construction contracts are included based on Management’s estimate of the probability that they will result in additional revenue, they are capable of being reliably measured, there is a reasonable basis to support the claim and that such claims would be admitted either wholly or in part. The Group assesses the carrying value of various claims periodically, and makes provisions for any unrecoverable amount arising from the legal and arbitration proceedings that they may be involved in from time to time. Insurance claims are accounted for on acceptance/settlement with insurers.
ii) Revenue from long term construction contracts executed in unincorporated joint ventures under work sharing arrangements is recognized on the same basis as similar contracts independently executed by the Group. Revenue from unincorporated joint ventures under profit sharing arrangements is recognized to the extent of the Group’s share in unincorporated joint ventures.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials172
iii) Annuity income, receivable as per the concession agreement, is recognized on a straight line basis over the period of the annuity.
iv) Revenue from hire charges is accounted for in accordance with the terms of agreements with the customers.
v) Revenue from management services is recognized pro-rata over the period of the contract as and when the services are rendered.
vi) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the consolidated statement of profit and loss.
vii) Dividend income is recognized when the Company’s right to receive dividend is established by the reporting date.
viii) Export Benefit under the Duty Free Credit Entitlements is recognized in the consolidated statement of profit and loss, when right to receive license as per terms of the scheme is established in respect of exports made and there is no significant uncertainty regarding the ultimate collection of the export proceeds.
ix) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, which usually coincides with delivery of the goods.
x) The Group collects service tax and value added taxes (VAT) on behalf of the Government and, therefore, these are not economic benefits flowing to the Group. Hence, they are excluded from revenue.
(n) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
(o) Foreign currency transactions and translations
i) Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported
using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
iii) Exchange differences
The Group accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:
a. Exchange differences arising on a monetary item that, in substance, forms part of the Group’s net investment in a non-integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.
b. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a tangible asset are capitalized and depreciated over the remaining useful life of the asset.
c. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the “Foreign Currency Monetary Item Translation Difference Account” and amortized over the remaining life of the concerned monetary item.
d. All other exchange differences are recognized as income or as expenses in the period in which they arise.
For the purpose of b and c above, the Group treats a foreign monetary item as “long-term foreign currency monetary item”, if it has a term of 12 months or more at the date of its origination. In accordance with MCA circular dated August 09, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Group does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.
iv) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/liability
The exchange differences arising on forward contracts to hedge foreign currency risk of an underlying asset or liability existing on the date of the contract are recognized in the consolidated statement of profit and loss of the period in which the exchange rates change, based on the difference between:
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 173
a. foreign currency amount of a forward contract translated at the exchange rates at the reporting date, or the settlement date where the transaction is settled during the reporting period, and
b. the same foreign currency amount translated at the latter of the date of the inception of the contract and the last reporting date, as the case may be.
The premium or discount on all such contracts arising at the inception of each contract is amortised as expense or income over the life of the contract.
Any profit or loss arising on cancellation or renewal of forward foreign exchange contracts is recognised as income or expense for the year upon such cancellation or renewal.
Forward exchange contracts entered to hedge the foreign currency risk of highly probable forecast transactions and firm commitments are marked to market at the balance sheet date if such mark to market results in exchange loss. Such exchange loss is recognised in the consolidated statement of profit and loss immediately. Any gain is ignored and not recognised in the consolidated financial statements, in accordance with the principles of prudence enunciated in Accounting Standard 1- Disclosure of Accounting Policies.
v) Translation of integral and non integral foreign operations
The Group classifies all its foreign operations as either “integral foreign operations” or “non- integral foreign operations”.
The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Group itself.
The assets and liabilities of a non-integral foreign operation are translated into the reporting currency at the exchange rate prevailing at the reporting date. Items of profit and loss are translated at exchange rates prevailing at the dates of transactions or weighted average quarterly rates, where such rates approximate the exchange rate at the date of transaction. The exchange differences arising on translation are accumulated in the “Foreign currency translation reserve”. On disposal of a non-integral foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the consolidated statement of profit and loss.
When there is a change in the classification of a foreign operation, the translation procedures applicable to the revised classification are applied from the date of the change in the classification.
(p) Employee benefits
i) The Company makes contribution to statutory provident fund and pension funds in accordance with Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 which is a defined contribution plan. The Company has no obligation, other than the contribution payable to respective funds. The Company recognizes contribution payable to respective funds as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
ii) The Company and few of its Indian subsidiaries operate defined gratuity plans for their respective employees, which are defined benefit obligations. The Company has obtained an insurance policy under group gratuity scheme with Life Insurance Corporation of India/ICICI Prudential Life Insurance Company Limited to cover the gratuity liability of its employees. The amount paid/payable in respect of present value of liability for past services is charged to the consolidated statement of profit and loss on the basis of actuarial valuation on the projected unit credit method made at the end of each financial year.
iii) In respect to overseas branches and unincorporated joint venture operations, provision for retirement and other employees’ benefits are made on the basis prescribed in the local labour laws of the respective country, for the accumulated period of service at the end of the financial year.
iv) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Group treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. The Group presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.
v) In respect of overseas group entities, contributions made towards defined contribution schemes in accordance
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials174
with the relevant applicable local laws, are charged to the consolidated statement of profit and loss of the year when the contribution to the respective funds are due. There are no obligations other than the contribution payable to the respective trusts. In respect of defined benefit obligations of the overseas Group companies, present value of liability for past services is charged to the consolidated statement of profit and loss on the basis of actuarial valuation on the projected unit credit method made at the end of the financial year.
vi) Actuarial gains/losses are immediately taken to the consolidated statement of profit and loss and are not deferred.
(q) Income taxes
Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the tax laws prevailing in the respective tax jurisdictions where the Group operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in shareholders’ funds is recognized in shareholders’ funds and not in the consolidated statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences of earlier years. Deferred tax is measured using the tax rates and tax laws enacted or substantively enacted, at the reporting date. Deferred income tax relating to items recognized directly in shareholders’ funds is recognized in shareholders’ funds and not in the consolidated statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Group has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each reporting date, the Group re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each reporting date. The Group writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to the consolidated statement of profit and loss as current tax. The Group recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Group will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Group recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income tax Act, 1961, the said asset is created by way of credit to the consolidated statement of profit and loss and shown as “Minimum alternate tax credit entitlement”. The Group reviews the “Minimum alternate tax credit entitlement” asset at each reporting date and writes down the asset to the extent the Group does not have convincing evidence that it will pay normal tax during the specified period.
(r) Accounting for joint venture operations
The Group’s share of revenues, expenses, assets and liabilities are included in the consolidated financial statements as revenues, expenses, assets and liabilities respectively.
(s) Segment reporting
Identification of segments
The Group’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Group operate.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements of the Group as a whole.
(t) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 175
by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for the events such as bonus issue, share split or otherwise that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
(u) Employee stock compensation cost
Measurement and disclosure of the employee share-based payment plans is done in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India (ICAI). The Group measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.
(v) Cash and cash equivalents
Cash and cash equivalents for the purposes of consolidated cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
(w) Derivative instruments
In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under Accounting Standard 11- The Effects of Changes in Foreign Exchange Rates, are marked to market on a portfolio basis, and the net loss, if any, after considering the offsetting effect of gain on the underlying hedged item is charged to the consolidated statement of profit and loss. Net gain, if any, after considering the offsetting effect of loss on the underlying hedged item, is ignored.
(x) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that
an outflow of resources will be required to settle the obligation.
A contingent liability also arises in extremely rare cases where
there is a liability that cannot be recognized because it cannot
be measured reliably. A disclosure is made for a contingent
liability when there is a:
a) possible obligation, the existence of which will be
confirmed by the occurrence/non-occurrence of one or
more uncertain events, not fully with in the control of the
Group;
b) present obligation, where it is not probable that an
outflow of resources embodying economic benefits will
be required to settle the obligation;
c) present obligation, where a reliable estimate cannot be
made.
(y) Provisions
A provision is recognized when the Group has a present
obligation as a result of past event, it is probable that an outflow
of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of
the amount of the obligation. Provisions are not discounted to
their present value and are determined based on best estimate
required to settle the obligation at the reporting date. These
estimates are reviewed at each reporting date and adjusted to
reflect the current best estimates.
(z) Operating cycle
The operating cycle is the time between the acquisition of
assets for processing and their realization in cash or cash
equivalents and the management considers this to be the
project period, except in case of certain group entities where
the same has been considered as twelve months.
(aa) Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule
VI to the Companies Act 1956, the Group has elected to
present earnings before interest, tax, depreciation and
amortization (EBITDA) as a separate line item on the face of the
consolidated statement of profit and loss. In its measurement,
the Group does not include depreciation and amortization
expense, finance costs and tax expense.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials176
3. Share capital
As at
March 31, 2016 March 31, 2015
Authorized shares
450,000,000 (Previous year 450,000,000) equity shares of ` 2 each 90.00 90.00
10,000,000 (Previous year 10,000,000) preference shares of ` 10 each 10.00 10.00
100.00 100.00
Issued, subscribed and fully paid-up shares
332,095,745 (Previous year 332,095,745) equity shares of ` 2 each 66.42 66.42
66.42 66.42
(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Equity shares
As at March 31, 2016 As at March 31, 2015
Nos. Amount Nos. Amount
At the beginning of the year 332,095,745 66.42 332,095,745 66.42
Issued during the year - - - -
Outstanding at the end of the year 332,095,745 66.42 332,095,745 66.42
(b) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of ` 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(c) Details of shareholders holding more than 5% of the equity shares in the Company
Name of the shareholder As at March 31, 2016 As at March 31, 2015
Nos. % holding Nos. % holding
Cawdor Enterprises Limited 75,691,430 22.79 75,691,430 22.79
Spectra Punj Finance Private Limited 22,148,305 6.67 22,148,305 6.67
As per records of the Company, including its register of shareholders/members, the above shareholding represents both legal and beneficial ownerships of shares.
(d) Shares reserved for issue under options
For details of shares reserved for issue under the employee stock option (ESOP) plan of the Group, please refer note 25.
(e) Over the period of five years immediately preceding March 31, 2016, neither any bonus shares were issued nor any shares were allotted for consideration other than cash. Further, no shares were bought back during the said period.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 177
4. Reserves and Surplus
As at
March 31, 2016 March 31, 2015
Capital reserve 27.26 27.26
Securities premium account 2,500.60 2,500.60
Debenture redemption reserve 112.87 112.87
Asset revaluation reserve
Balance as per the last year 2.10 3.25
Less: Adjustment relating to depreciation on assets (Pursuant to enactment of Schedule II to the 2013 Act) – (1.15)
Closing balance 2.10 2.10
Special reserve (created by an Indian subsidiary under the Reserve Bank of India Act, 1934)
Balance as per the last year 0.03 0.03
Add: amount transferred from surplus balance in the consolidated statement of profit and loss 0.01 0.00
Closing balance 0.04 0.03
General reserve 99.04 99.04
Foreign currency translation reserve
Balance as per last year (328.88) (230.66)
Add: exchange difference during the year on net investment in non-integral operations (29.69) (98.22)
Closing balance (358.57) (328.88)
Deficit in the consolidated statement of profit and loss
Balance as per last year (1,513.66) (346.55)
Less: adjustment relating to depreciation on assets (Pursuant to enactment of Schedule II to the 2013 Act) – (26.00)
Loss for the year (2,245.34) (1,141.11)
(3,759.00) (1,513.66)
Less: Appropriations
Transfer to special reserve (0.01) (0.00)
Adjustment for dilution of stake in a subsidiary 0.04 –
Proposed preference dividend (0.00) (0.00)
Total appropriations 0.03 (0.00)
Net deficit in the consolidated statement of profit and loss (3,758.97) (1,513.66)
Total reserves and surplus (1,375.63) 899.36
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials178
5. Long-term borrowings
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Secured
Debentures
10.50% debentures redeemable at par at the end of 5 years from the deemed date of allotment, i.e., October 15, 2010.
Secured by first charge on Flat No. 201, Satyam Apartment, Saru Section Road, Jamnagar, Gujarat, India and subservient charge on the moveable tangible and current assets of the Company.
– – 300.00 300.00
12.00% debentures redeemable at par in ten equal half-yearly installments beginning at the end of 5 years from the date of allotment, i.e., January 02, 2009.
Secured by first pari passu charge on the moveable tangible assets of the project division of the Company and further secured by exclusive charge on the Flat No. 202, Satyam Apartment, Saru Section Road, Jamnagar, Gujarat, India.
60.00 90.00 75.00 45.00
Term loans
Indian rupee loan from banks
Loans carrying weighted average rate of interest of 12.02% (Previous year 11.51%), repayable in 15 to 60 monthly/quarterly installments.
Secured by way of exclusive charge on the equipment/vehicles purchased out of the proceeds of the loan.
0.96 2.08 1.18 8.02
Loans carrying weighted average rate of interest of 11.92% (Previous year 12.74%), repayable in 15 to 16 quarterly installments beginning at the end of 1 year from the disbursement.
Secured by way of first pari passu charge on moveable tangible assets of the project division of the Company.
6.25 37.08 22.29 44.05
Loan carrying rate of interest of 12.25% (Previous year 12.25%), repayable in 22 equal quarterly installments beginning at the end of 1 year from the date of first disbursement.
Secured by way of pari passu first charge on the existing and future moveable tangible assets of the project division of the Company, pari passu second charge on current assets of the project division of the Company (excluding receivables of the projects financed by other banks).
– 13.51 13.36 34.09
Loan carrying rate of interest of 11.25%, repayable in 48 quarterly installments, beginning from March 31, 2017.
Secured by way of mortgage of immovable properties and hypothecation of existing and future movable assets of projects of a subsidiary company.
103.91 – – –
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 179
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Loan carrying rate of interest of 12.75% (Previous year 12.75%), repayable in 17 equal quarterly installments beginning at the end of 12 months from the date of first disbursement.
Secured by way of first charge on the corporate offices of the Company, at Plot No. 78 & 95, and Medicity building situated at Sector 32 and 38 respectively at Gurgaon, Haryana, India. Further secured by way of first pari passu charge on the moveable tangible assets of the project division of the Company (upto 0.5 times of loan outstanding).
50.59 109.41 117.65 58.82
Loan carrying rate of interest of 10.55% (Previous year 12.00%), repayable in 25 structured unequal semi-annual installments.
Secured by way of charge on all moveable and immoveable tangible assets of a subsidiary.
282.69 304.81 22.12 22.12
Loans carrying weighted average rate of interest of 10.85% repayable in 12 quarterly installments beginning at the end of 2 years from the date of first disbursment.
Secured by way of first ranking pari-passu charge on the existing and future current assets, except receivables of foreign projects financed by foreign lenders, of the Company and first ranking pari-passu charge on the existing and future movable and immovable tangible assets of the Company, except those specifically charged to others lenders of Company. Collaterally secured by personal guarantee of a promoter. Further secured by pledge of 17,516,100 equity shares of Air Works India (Engineering) Private Limited; first pari passu charge on the land & building at Malanpur (M.P); pledge of 6,795,000 shares of Punj Lloyd Infrastructure Limited and second charge on 74,667,260 shares of Company held by two promoter group companies, pledged to IFCI Limited.
1,204.97 – – –
Loan carried weighted average rate of interest of 11.45%, repayable from financial year 2013 to financial year 2024.
Secured by way of charge on moveable tangible assets and receivables of a joint venture.
– 40.93 – 7.54
Indian rupee loan from others
Loans carrying weighted average rate of interest of 12.91% (Previous year 13.12%), repayable in 29 to 60 monthly installments beginning at the end of 12 months from the date of first disbursement.
Secured by first and exclusive charge by way of hypothecation on certain specific equipments financed through the loan.
26.61 2.56 3.38 36.41
Loan carrying rate of interest of 13.60% (Previous year 13.85%), repayable in 16 quarterly installments beginning at the end of 12 months from the date of first disbursement.
Secured by way of first pari passu charge on existing and future moveable tangible assets of the project division of the Company.
– – 12.50 18.75
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials180
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Loan carried rate of interest of 16.00%, repayable in 12 monthly installments beginning at the end of 1 month from the date of first disbursement.
Secured by way of first charge on the present and future current assets of the project division of the Company (excluding receivables of the projects financed by other banks).
– – – 6.00
Loan carrying rate of interest of 13.00% (Previous year 13.00%), repayable in 36 monthly installments starting from October 2016.
Secured by way of first ranking pari-passu charge on entire current assets of the Company, except receivables exclusively charged to other lenders of the Company. First ranking pari-passu charge on movable and immovable tangible assets of the Company, both present and future, except those specifically charged to other lenders of Company.
48.61 58.33 9.72 –
Loan carrying rate of interest of 13.25% (Previous year 13.95%), repayable in 12 equal quarterly installments after the moratorium period of 2 years from the date of disbursement.
Secured by way of first pari passu charge on the moveable tangible assets of the project division of the Company and subservient charge on the corporate offices of the Company, at Plot No. 78 & 95, and Medicity building situated at Sector 32 and 38 respectively at Gurgaon, Haryana, India.
133.33 183.33 66.67 16.67
Loan carried rate of interest of 14.50%, repayable in 22 monthly installments. Secured by way of pari-passu charge on moveable tangible assets of a subsidiary.
– 1.76 – 3.81
Loan carrying rate of interest of 10.93% (Previous year 11.50%), repayable in 12 quarterly installments beginning at the end of 2 years from the date of first disbursement.
Secured by way of first ranking pari-passu charge on the existing and future current assets, except receivables of foreign projects financed by foreign lenders, of the Company and first ranking pari-passu charge on the existing and future movable and immovable tangible assets of the Company, except those specifically charged to others lenders of Company. Collaterally secured by personal guarantee of a promoter. Further secured by pledge of 17,516,100 equity shares of Air Works India (Engineering) Private Limited; first pari passu charge on the land & building at Malanpur (M.P); pledge of 6,795,000 shares of Punj Lloyd Infrastructure Limited and second charge on 74,667,260 shares of Company held by two promoter group companies, pledged to IFCI Limited.
18.70 10.30 1.35 –
Loans carrying weighted rate of interest of 10.55% (Previous year 12.00%), repayable in 25 structured unequal semi-annual installments.
Secured by first pari passu charge on moveable and immoveable tangible assets of a subsidiary.
114.99 118.49 3.50 3.50
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 181
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Foreign currency loan from banks
Loan carrying rate of interest of LIBOR + 1.25% (Previous year LIBOR + 1.25%), repayable in 36 structured semi-annual installments.
Secured by charge on the assets of a subsidiary.
40.91 41.98 3.15 3.00
Loan carrying rate of interest of 6M LIBOR + 4.20% (Previous year 6M LIBOR + 4.20%), repayable in 25 structured unequal semi-annual installments.
Secured by charge on all moveable and immoveable assets of the subsidiary.
140.80 147.98 10.88 10.73
Loan carrying rate of interest of 12.25% (Previous year 13.15%), repayable in 48 quarterly installments, beginning from March 2016. Secured by way of mortgage by deposit of title deed of immovable properties and hypothecation of movable assets, both existing and future, of the projects financed.
110.45 121.12 10.60 2.58
3 months EBOR plus 2.50% (Previous year 3 months EBOR plus 2.50%) loan repayable in 14 equal quarterly installments, beginning at the end of 1 quarter from the date of its origination.
Secured by way of first pari passu charge on moveable tangible assets of the project division of the Company.
– – 10.29 14.52
Loans carried rate of interest of 3.00%, repayable in bullet payment in 2016.
Secured by pledge of deposit of a subsidiary.
– – – 37.26
Loan carrying rate of interest of LIBOR + 4.50% (Previous year LIBOR + 4.50%), repayable in 10 equal quarterly installments commencing after a moratorium period of 18 months from the date of disbursement. Secured by way of exclusive charge of aircraft of a subsidiary. Further secured by pledge of shares held by the subsidiary as investment and by negative pledge over the assets of subsidiary.
190.10 267.86 81.47 –
Loan carrying rate of interest of 7.50% (Previous year 7.50%). Secured by way of assets of the subsidiary.
4.26 8.97 10.52 3.33
Foreign currency loan from others
Loan carrying rate of interest of 5.77% (Previous year 5.77%), repayable in 17 equal half yearly installments, beginning at the end of 4 years from the date of its origination.
Secured by first pari passu charge on the moveable tangible assets of the project division of the Company.
– 59.42 93.58 29.75
Loan carrying rate of interest of 5.39% (Previous year 5.39%), repayable in 20 equal half yearly installments beginning at the end of 2 years from the date of its origination.
Secured by first pari passu charge on the moveable tangible assets of a subsidiary.
– 15.03 55.21 37.58
Loans carrying rate of interest of LIBOR + 4.50% (Previous year LIBOR + 4.50%), repayable in 2 equal annual installments, starting from April 2015.
Secured by exclusive charge on the tangible and current assets of a subsidiary.
– 150.67 276.85 150.67
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials182
Non-current portion Current maturities
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Other loans
Finance lease obligations carrying weighted average rate of interest of 4.70% (Previous year 14.81%).
Secured by first and exclusive charge by way of hypothecation on specific equipments financed through the loan.
0.23 21.63 0.19 39.77
Unsecured
Foreign currency loan from banks
Loan carried rate of interest of 1.70%, repayable in 4 equal quarterly installments beginning at the end of one year.
– – – 93.14
Other loans
Inter-corporate deposits 0.38 17.56 – –
2,538.74 1,824.81 1,201.46 1,027.11
The above amount includes
Secured borrowings 2,538.36 1,807.25 1,201.46 933.97
Unsecured borrowings 0.38 17.56 - 93.14
Amount disclosed under the head “Other liabilities” (note 9) – – (1,201.46) (1,027.11)
Net amount 2,538.74 1,824.81 – –
6. Deferred tax liabilities (net)
As at
March 31, 2016 March 31, 2015
Deferred tax liability
Impact of difference between tax depreciation and depreciation/amortization as per books 105.97 105.20
Effect of expenditure not debited to consolidated statement of profit and loss but allowed/allowable in income tax 43.84 64.66
Difference in carrying value of scaffolding as per income tax and financial books – 4.19
Others 2.59 4.18
Gross deferred tax liability 152.40 178.23
Deferred tax asset
Impact of expenditure charged to the consolidated statement of profit and loss in the current year but allowable for tax purposes on payment basis 12.80 6.52
Unrealized foreign exchange on purchase of tangible assets 14.07 12.99
Impact of difference between assets of sale and lease back transactions as per tax books and as per financial reporting – 8.27
Impact of unrealized profit on sale and lease back transactions – 10.88
Effect of unabsorbed depreciation/carried forward losses # 122.70 130.15
Gross deferred tax assets 149.57 168.81
Net deferred tax liability* 2.83 9.42
* After setting off deferred tax assets aggregating to `7.65 crores (Previous year `6.92 crores) in respect of certain branches, subsidiaries and joint ventures.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 183
# The Company has accounted for deferred tax assets on timing differences, including those on unabsorbed depreciation and business losses, to the extent of deferred tax liability recognized at the balance sheet date, for which it is virtually certain that future taxable income would be generated by reversal of such deferred tax liability. Also, certain subsidiaries of the group have projected future profits, based on confirmed orders in hand for the subsequent years, which in the opinion of the management of those subsidiaries satisfies the condition of virtual certainty supported by convincing evidence. According, those subsidiaries have recognized deferred tax asset on unabsorbed depreciation and carried forward losses.
7. Provisions
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Provision for employee benefits
– Provision for retirement benefits 4.13 5.54 26.61 24.61
Other provisions
– Provision for foreseeable losses – – 85.03 –
– Provision for maintenance – Project Road 5.24 – – –
– Proposed preference dividend – – 0.00 0.00
– Provision for current tax (net of advance tax) 0.00 3.07 89.92 103.60
9.37 8.61 201.56 128.21
8. Short term borrowings
As at
March 31, 2016 March 31, 2015
Secured
Working capital loan repayable on demand
Loans carrying weighted average rate of interest of 12.91% (Previous year 13.28%). Secured by way of first charge on pari passu basis on current assets (excluding receivables of the projects financed by the other banks) and second charge on pari passu basis on moveable tangible assets of the project division of the Company.
281.48 153.82
Loans carrying weighted average rate of interest of 12.50% (Previous year 12.50%). Secured by way of exclusive charge on the receivables of the specific projects financed, first pari passu charge on the current assets of the project division (excluding receivables of the projects financed by the other banks), pari passu second charge on the movable tangible assets of the project division of the Company.
36.65 34.46
Loans carrying weighted average rate of interest of 11.49% (previous year 13.02%). Secured by way of first ranking pari-passu charge on existing and future current assets of the Company, except receivables of foreign projects financed by foreign lenders. First ranking pari-passu charge on movable and immovable tangible assets of the Company, both present and future, except those specifically charged to other lenders.
3,315.99 3,463.71
Loan carried rate of interest of USD LIBOR + 4.25%. Secured by way of charge on trade receivables of a subsidiary. Further secured by personal guarantee of joint venturers.
– 56.06
Loan carrying rate of interest of 3 months LIBOR + 6% (Previous year 3 months LIBOR + 6%). Secured by way of pari passu charge on the receivables financed.
278.60 136.19
Loan from bank carrying rate of interest of 3 Months First Gulf Bank (FGB) EBOR + 2.5% pa (Previous year 3 Months FGB EBOR + 2.5% pa.) Secured by way of charge on the receivables and assets of the projects financed.
10.32 5.49
Loan from bank carrying rate of interest of 7.75% (Previous year 7.75%). Secured by way of exclusive charge on the receivables of the specific projects financed, first pari passu charge on the current assets of a subsidiary.
36.63 36.56
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials184
As at
March 31, 2016 March 31, 2015
Loans from bank carried rate of interest of 7.50%. Secured by way of charge on building/ apartment of a subsidiary.
– 1.96
Loan carrying rate of interest of 4.50%. Secured by way of pari passu charge on the receivables financed.
15.61 –
Loan carrying rate of interest of 4.38%. Secured by way of pari passu charge on the receivables financed.
17.14 –
Loans from banks carrying weighted average rate of interest 16.07% (Previous year 14.51%). Secured by hypothecation charge over trade receivables of a subsidiary.
13.41 26.86
Loans from banks carrying weighted average rate of interest of SIBOR+2% and 16.75% (Previous year SIBOR+2% and 16.75%). Secured by way of charge on the current assets of a subsidiary.
18.37 21.80
Loan carrying rate of interest of 4.52% (Previous year 3.30%). Secured by way of first charge on the current assets of a subsidiary.
160.07 128.03
Unsecured
Cash credit carried rate of interest of 15.00%. – 2.50
Cash credit from a bank carried rate of interest of 3 months EIBOR + 2.5%. – 40.98
Buyer’s line of credit from banks carried weighted average rate of interest of 0.82%. – 141.49
Inter-corporate deposits, repayable on demand, carried rate of interest of 13.20%. – 38.97
4,184.27 4,288.88
The above amount includes
Secured borrowings 4,184.27 4,064.94
Unsecured borrowings – 223.94
4,184.27 4,288.88
9. Other liabilities
Non – current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Trade payables – – 3,665.17 3,868.94
Other liabilities
Current maturities of long-term borrowings (note 5) – – 1,201.46 1,027.11
Interest accrued but not due on borrowings – – 52.08 48.35
Interest accrued and due on borrowings – – 117.87 21.35
Bank overdraft 15.73 –
Unclaimed dividends # – – 0.22 0.25
Service tax and Value added tax payable – – 9.47 0.30
Tax deducted at source payable – – 46.52 42.56
Advance billing – – 551.50 459.59
Advance from customers – – 1,728.15 1,667.16
Unearned income – 6.37 – 27.16
Security deposits – – 7.98 8.23
Capital goods suppliers – – 18.19 30.74
Others – 19.21 19.83 23.82
– 25.58 3,769.00 3,356.62
– 25.58 7,434.17 7,225.56
# There is no amount due and outstanding which is to be credited to Investor Education and Protection Fund.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 185
10. Tangible assets
Land Buildings Plant and equipment
Furniture,
equipment
Tools Project Road
Vehicles Total
Gross block at cost or valuation
At April 01, 2014 23.94 240.77 3,756.15 90.59 13.20 614.05 172.71 4,911.41
Additions 0.18 – 134.25 2.17 – 127.19 0.63 264.42
Disposals (-) – 1.00 273.98 1.00 0.02 – 20.78 296.78
Other adjustment
Exchange differences – – 3.87 – – – – 3.87
Foreign currency translation (0.03) 0.31 14.54 (0.50) 0.17 – (3.53) 10.96
Reclassification 11.88 (11.88) – – – – – –
At March 31, 2015 35.97 228.20 3,634.83 91.26 13.35 741.24 149.03 4,893.88
Additions – 9.08 143.78 2.90 – 3.86 0.47 160.09
Disposals(-) – 1.79 301.55 22.05 0.19 – 24.55 350.13
Disposal of a Joint Venture(-) – – – – – 140.87 0.02 140.89
Other adjustment
Foreign currency translation (0.53) (9.17) (13.76) (1.49) – – (13.98) (38.93)
At March 31, 2016 35.44 226.32 3,463.30 70.62 13.16 604.23 110.95 4,524.02
Accumulated depreciation
At April 01, 2014 0.93 44.34 1,726.49 48.88 4.38 44.59 123.00 1,992.61
Charge for the year 0.22 6.45 387.65 13.81 1.47 36.53 20.49 466.62
Disposals(-) – 0.58 177.62 2.11 0.02 – 21.74 202.07
Other adjustments
Foreign currency translation – 0.50 11.89 1.57 – – 2.56 16.52
Reclassification 9.17 (9.17) – – – – – –
Other* – 0.33 28.16 9.98 0.44 – 0.53 39.43
At March 31, 2015 10.32 41.87 1,976.57 72.13 6.27 81.12 124.84 2,313.11
Charge for the year 2.49 5.94 319.37 9.94 0.99 33.16 10.62 382.51
Disposals(-) – 0.50 227.91 17.76 0.13 – 22.02 268.32
Disposal of a Joint Venture(-) – – – – – 37.83 0.01 37.84
Other adjustments
Foreign currency translation 0.13 (6.01) (4.26) (1.81) – – (12.01) (23.96)
At March 31, 2016 12.94 41.30 2,063.77 62.50 7.13 76.45 101.42 2,365.50
Net block
At March 31, 2015 25.65 186.33 1,658.26 19.13 7.08 660.12 24.19 2,580.77
At March 31, 2016 22.50 185.02 1,399.53 8.12 6.03 527.78 9.53 2,158.52
* represents adjustment made pursuant to enactment of Schedule II to the 2013 Act.
1. Gross block of land includes 2.10 (Previous year: 2.10) on account of revaluation of assets carried out in earlier years. The said revaluation was carried out during the year ended March 31, 2002 by an external agency using “Price indices released by the Economic Advisor’s Office, Ministry of Industry/Verbal Quotation/Comparison/Estimation or any other method considered prudent in specific cases”.
2. In compliance with the notification dated March 31, 2009 (as amended) issued by MCA, the Group has exercised the option available under paragraph 46 to the Accounting Standards 11 – The effect of changes in foreign exchange rates. Accordingly, during the current year, the foreign exchange loss of 7.01 (Previous year: 3.87) has been added to gross block of plant and equipment.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials186
3. Gross block of land includes leasehold land of cost 7.23 (Previous year: 7.23). Accumulated depreciation thereon is 1.36 (Previous year: 1.15).
4. Gross block of vehicles includes vehicles of cost 1.25 (Previous year: 1.27) taken on finance lease. Accumulated depreciation there on is 1.14 (Previous year: 0.90).
5. Gross block of plant and equipment includes equipments of cost 111.48 (Previous year: 115.40) taken on finance lease. Accumulated depreciation thereon is 110.28 (Previous year: 76.21).
6. Gross block of buildings includes building of cost 98.76 (Previous year: 98.76) taken on finance lease. Accumulated depreciation thereon is 5.69 (Previous year: 4.04).
11. Intangible assets
Computer software
Total
Gross block
At April 01, 2014 78.25 78.25
Additions 1.39 1.39
Other adjustments
Foreign currency translation (0.97) (0.97)
At March 31, 2015 78.67 78.67
Additions 0.22 0.22
Disposal (-) 40.03 40.03
Other adjustments
Foreign currency translation (0.96) (0.96)
At March 31, 2016 37.90 37.90
Amortization
At April 01, 2014 68.20 68.20
Charge for the year 3.64 3.64
Other adjustments
Foreign currency translation (1.10) (1.10)
At March 31, 2015 70.74 70.74
Charge for the year 2.35 2.35
Disposal (-) 38.73 38.73
Other adjustments
Foreign currency translation (0.97) (0.97)
At March 31, 2016 33.39 33.39
Net block
At March 31, 2015 7.93 7.93
At March 31, 2016 4.51 4.51
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 187
12. Non-current investments
As at
March 31, 2016 March 31, 2015
Trade investments (valued at cost unless stated otherwise)
Unquoted equity instruments
Investments in associates
Air Works India (Engineering) Private Limited 53.00 53.00
17,516,100 (Previous year 17,516,100) equity shares of ` 1 each fully paid up (including goodwill of ` 9.46 crores).
Add: Share in opening accumulated losses (4.50) (7.74)
Add: Share in profit/(loss) for the year (3.44) 3.24
45.06 48.50
Reco Sin Han Pte Limited 0.04 0.04
Nil (Previous year 10,000) equity shares of SGD 1 each fully paid up
Add: Foreign currency translation differences – 0.01
Less: Disposed off during the year (0.04) –
– 0.05
Investment in others
Rajahmundry Expressway Limited – 1.89
Nil (Previous year 1,885,000) equity shares of ` 10 each fully paid up.
Andhra Expressway Limited – 1.89
Nil (Previous year 1,885,000) equity shares of ` 10 each fully paid up.
North Karnataka Expressway Limited 3.86 3.86
3,860,456 (Previous year 3,860,456) equity shares of `10 each fully paid up.
Kaefer Private Limited – –
88,200 (Previous year 88,200) equity shares of `100 each fully paid up.
(At cost less provision for other than temporary diminution in value ` 4.36 crore (Previous year 4.36 crore))
GMR Hyderabad Vijaywada Expressways Private Limited 0.50 0.50
500,000 (Previous year 500,000) equity shares of ` 10 each fully paid up.
Hazaribagh Ranchi Expressway Limited 0.01 0.01
13,100 (Previous year 13,100) equity shares of ` 10 each fully paid up.
Non-trade
Unquoted equity instruments
Investment in others
RFB Latex Limited – –
200,000 (Previous year 200,000) equity shares of ` 10 each fully paid up.
(At cost less provision for other than temporary diminution in value ` 0.52 crore (Previous year ` 0.52 crore))
Arooshi Enterprises Private Limited – –
598,500 (Previous year 598,500) equity shares of ` 10 each fully paid up.
(At cost less provision for other than temporary diminution in value ` 0.60 crore (Previous year ` 0.60 crore))
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials188
As at
March 31, 2016 March 31, 2015
Quoted equity instruments
Investment in others
Panasonic Energy India Company Limited 0.00 0.00
1,300 (Previous year 1,300) equity shares of `10 each fully paid up
Triton Corporation Limited 0.00 0.00
6,000 (Previous year 6,000) equity shares of `10 each fully paid up
(At cost less provision for other than temporary diminution in value ` 0.01 crore (Previous year ` 0.01 crore))
JCT Electronics Limited 0.00 0.00
600 (Previous year 600) equity shares of `10 each, fully paid up (At cost less provision for other than temporary diminution in value ` 0.00 crore (Previous year ` 0.00 crore))
Continental Constructions Limited – –
3,000 (Previous year 3,000) equity shares of `10 each, fully paid up
(At cost less provision for other than temporary diminution in value ` 0.00 crore (Previous year ` 0.00 crore))
Max India Limited 0.00 0.00
2,500 (Previous year 2,500) equity shares of ` 2 each fully paid up
Kirloskar Pneumatics Company Limited 0.00 0.00
1,000 (Previous year 1,000) equity shares of `10 each fully paid up
Hindustan Oil Exploration Company Limited 0.03 0.03
6,133 (Previous year 6,133) equity shares of `10 each fully paid up
Reliance Defence and Engineering Limited (formerly Pipavav Defence and Offshore Engineering Company Limited) 0.00 0.00
1,000 (Previous year 1,000) equity share of ` 10 each fully paid up
Quoted other instruments
Investment in others
Samena Special Situations Fund 11.18 21.86
Nil (Previous year 2,500,000) units of USD 1 each fully paid up
Add: Foreign currency translation differences – (1.20)
Less: Disposed off during the year (11.18) (9.48)
– 11.18
49.46 67.91
Aggregate amount of quoted investments (Market value: ` 0.22 crores (Previous year ` 31.44 crores)) 0.03 11.21
Aggregate amount of unquoted investments 54.92 62.19
Aggregate provision for diminution in value of investments 5.49 5.49
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 189
13. Loans and advances
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
(Unsecured, considered good)
Capital advances 0.00 1.96 – –
Security deposits 4.86 12.78 19.67 20.65
Advances recoverable in cash or kind 0.23 – 364.70 694.15
Other loans and advances
Advance income-tax (net of provision for taxation) 184.79 291.64 – –
Value added tax/ sales tax recoverable (net) 182.67 169.03 0.39 0.41
Minimum alternate tax credit entitlement (refer note 34) 3.68 3.17 – –
Due from joint venture – – 59.54 53.74
Balances with statutory/government authorities – – 24.24 37.75
Others 0.05 – 8.18 6.05
376.28 478.58 476.72 812.75
14. Trade receivables
As at
March 31, 2016 March 31, 2015
(Unsecured, considered good)
Outstanding for a period exceeding six months from the date they are due for payment 956.82 877.01
Other receivables 1,074.00 1,534.13
2,030.82 2,411.14
15. Other assets
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
(Unsecured, considered good)
Non-current bank balances (refer note 17) 2.91 11.63 – –
Others
Interest receivable – – 17.79 14.33
Export benefit receivable – 27.76 – –
Insurance claim receivable 49.64
Receivables against sale of investments – – 0.42 24.05
Investment held for sale – – 0.07 0.07
Other receivable – – 0.11 5.22
2.91 39.39 68.03 43.67
16. Inventories
As at
March 31, 2016 March 31, 2015
Project materials 128.26 150.13
128.26 150.13
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials190
17. Cash and bank balances
Non-current Current
As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
Cash and cash equivalents
Balances with banks:
– On current accounts # – – 161.79 320.21
– On cash credit accounts – – 0.24 –
– On EEFC account – – 136.37 1.60
Deposit with original maturity of less than three months – – 129.92 6.41
Cash on hand – – 5.10 6.10
– – 433.42 334.32
Other bank balances
– Deposits with original maturity for more than 12 months – – 0.30 0.00
– Deposits with original maturity for more than 3 months but less than 12 months – – 46.72 67.08
– Margin money deposit 2.91 11.63 65.35 238.72
2.91 11.63 112.37 305.80
Amount disclosed under non-current assets (refer note 15) (2.91) (11.63) – –
– – 545.79 640.12
# Includes unclaimed dividend of ` 0.22 crores (Previous year ` 0.25 crores).
18. Revenue from operations
Year ended
March 31, 2016 March 31, 2015
Contract revenue 3,549.62 5,881.31
Sale of traded goods 556.81 971.72
Annuity income 112.00 125.04
Other operating revenue
Hire charges 5.64 90.32
Management services 36.78 21.87
4,260.85 7,090.26
19. Other income
Year ended
March 31, 2016 March 31, 2015
Scrap sales 18.52 38.69
Unspent liabilities and provisions written back 13.97 16.03
Exchange differences (net) – 91.17
Interest income on
– Bank deposits 9.95 8.52
– Others 34.09 32.31
Net gain on sale of long-term investments 1.05 547.39
Profit on sale of fixed assets (net) 46.06 34.63
Dividend income on non-trade long-term investments 0.00 0.07
Others 30.85 16.08
154.49 784.89
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 191
Year ended
March 31, 2016 March 31, 2015
Salaries, wages and bonus 705.74 959.18
Contribution to provident and other funds 25.80 32.00
Retirement benefits 8.55 5.19
Staff welfare expenses 34.02 66.51
774.11 1,062.88
21. Other expenses
Year ended
March 31, 2016 March 31, 2015
Contractor charges 1,238.91 2,290.31
Site expenses 46.28 173.43
Diesel and fuel 54.56 125.72
Repairs and maintenance
– Buildings 2.96 3.66
– Plant and equipments 29.20 28.54
– Others 3.69 9.54
Rent 50.30 70.94
Freight and cartage 50.79 39.25
Hire charges 91.86 182.24
Rates and taxes 38.00 57.85
Insurance 27.06 49.76
Travelling and conveyance 58.22 85.63
Consultancy and professional 99.40 252.48
Irrecoverable balances written off 396.81 165.69
Exchange difference (net) 127.09 –
Provision for diminution in value of non-trade long-term investment – 4.36
Loss on deconsolidation of a joint venture 2.19 –
Provision for foreseeable losses on onerous contracts 85.03 –
Miscellaneous 104.97 109.81
2,507.32 3,649.21
22. Finance costs
Year ended
March 31, 2016 March 31, 2015
Interest 865.18 840.51
Bank charges 204.60 161.72
1,069.78 1,002.23
23. Earnings per share (EPS)
2015-16 2014-15
a) Net loss after tax available for equity share holders (` crores) (2,245.34) (1,141.11)
b) Weighted average number of equity shares for Basic and Diluted EPS 332,095,745 332,095,745
c) Earnings per share – Basic and Diluted (`) (67.61) (34.36)
d) Nominal value per equity share (`) 2 2
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials192
The Company and few of its Indian subsidiaries operate defined gratuity plans for their respective employees, which are defined benefit obligations. Under the plans, every employee who has completed at least five years of service gets a gratuity on separation at 15 days of last drawn salary for each completed year of service. The Company has obtained an insurance policy under group gratuity scheme to cover the gratuity liability of its employees
The following tables summarizes the components of net benefit expense recognized in the consolidated statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.
Consolidated statement of profit and loss
Net employee benefit expense recognized in the employee cost
2015-16 2014-15
Current service cost 2.19 2.14
Interest cost on benefit obligation 1.07 1.09
Expected return on plan assets (0.89) (0.79)
Net actuarial loss 0.49 0.94
Past service cost – –
Net benefit expense 2.86 3.38
Actual return on plan assets 0.69 0.88
Consolidated balance sheet
Benefit asset/liability
2015-16 2014-15
Present value of defined benefit obligation 15.26 14.39
Fair value of plan assets (9.72) (9.95)
Less: Unrecognised past service cost – –
Net defined benefit obligation 5.54 4.44
Changes in the present value of the defined benefit obligation are as follows:
2015-16 2014-15
Opening defined benefit obligation 14.39 13.44
Interest cost 1.07 1.09
Current service cost 2.19 2.14
Benefits paid (2.68) (3.33)
Actuarial losses on obligation 0.29 1.05
Closing defined benefit obligation 15.26 14.39
Changes in the fair value of plan assets are as follows:
2015-16 2014-15
Opening fair value of plan assets 9.95 8.92
Expected return 0.89 0.79
Contributions by employer 1.71 3.43
Benefits paid (2.63) (3.30)
Actuarial gains/(losses) (0.20) 0.11
Closing fair value of plan assets 9.72 9.95
The Company expects to contribute ` 1.50 crores (Previous year ` 1.50 crores) to gratuity fund in the next year.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 193
The principal assumptions used in determining gratuity obligations for the Company and its Indian subsidiaries are shown below:
2015-16 2014-15
Discount rate 7.75% 7.80%
Expected rate of return on assets 9.00% 9.00%
Salary increase rate 5.50% 5.50%
Employee turnover
upto age 30 years 15.00% 15.00%
31-44 years 10.00% 10.00%
45 and above 5.00% 5.00%
Retirement age (in years) 60 60
Mortality rates Indian Assured Lives Mortality (2006-08)
Ultimate
Indian Assured Lives Mortality
(2006-08) Ultimate
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
Amounts for the current and previous four periods are as follows:
Gratuity (Parent and Indian Subsidiaries)
2015-16 2014-15 2013-14 2012-13 2011-12
Defined benefit obligation 15.26 14.39 13.44 13.77 13.54
Plan assets 9.72 9.95 8.92 9.44 8.29
Deficit (5.54) (4.44) (4.52) (4.33) (5.25)
Experience adjustments on plan liabilities – (loss)/gain 0.31 0.64 (0.60) 0.93 (0.85)
Experience adjustments on plan assets – (loss)/gain (0.20) 0.11 0.00 0.12 0.00
Actuarial assumptions for compensated absences:
2015-16 2014-15
Discount rate 7.75% 7.80%
Salary increase rate 5.50% 5.50%
Employee turnover
upto age 30 years 15.00% 15.00%
31-44 years 10.00% 10.00%
45 and above 5.00% 5.00%
Retirement age (in years) 60 60
Mortality rates Indian Assured Lives Mortality
(2006-08) Ultimate
Indian Assured Lives Mortality
(2006-08) Ultimate
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials194
25. Employee stock option plans (ESOP)
a) During the year ended March 31, 2016, the Company has issued 4,870,000 stock options out of the lapsed and unutilized stock options from the existing ESOP plans to the eligible employees. The relevant details of the schemes are as follows:
ESOP 2005 ESOP 2006
Date of Board of Directors approval September 05, 2005 and February 12, 2016 June 27, 2006 and February 12, 2016
Date of Remuneration Committee approval Various dates subsequent to September 05, 2005 Various dates subsequent to June 27, 2006
Date of Shareholder’s approval September 29, 2005 and April 3, 2006 September 22, 2006
Number of options 4,000,000 5,000,000
Method of settlement Equity
Vesting period (for fresh grant) One year from the date of grant
Exercise period (for fresh grant) Five years from the date of vesting or one year from the date of separation from service, whichever is earlier
Vesting condition Employee should be in service
The details of activities under ESOP 2005 have been summarized below:
Number of options Weighted average exercise price (`)
2015-2016 2014-2015 2015-2016 2014-2015
Outstanding at the beginning of the year - - - -
Granted during the year 2,972,760 - 2.00 -
Exercised during the year - - - -
Expired during the year - - - -
Outstanding at the end of the year 2,972,760 - 2.00 -
Exercisable at the end of the year - - - -
The details of activities under ESOP 2006 have been summarized below:
Number of options Weighted average exercise price (`)
2015-2016 2014-2015 2015-2016 2014-2015
Outstanding at the beginning of the year - - - -
Granted during the year 1,897,240 - 2.00 -
Exercised during the year - - - -
Expired during the year - - - -
Outstanding at the end of the year 1,897,240 - 2.00 -
Exercisable at the end of the year - - - -
The weighted average share price at the exercise date is not applicable since no options were exercised during the year. The weighted average remaining contractual life of the stock options outstanding as at March 31, 2016 is 5.85 years.
The weighted average fair value of stock options granted during the year was ` 15.72. The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:
Particulars March 31, 2016
Dividend yield (%) 7.50
Expected volatility (%) [computed based on past two years historical share price] 53.06
Risk-free interest rate (%) 7.87
Share price (`) 22.40
Exercise price (`) 2.00
Expected life of options granted (in years) 3.50
For the purpose of valuation of the options granted under the aforesaid schemes upto the year ended March 31, 2016, the compensation cost, calculated as per the fair value method, is Nil .
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 195
b) One of the Indian subsidiary of the Company provides share based payment scheme to its employees. During the year ended March 31, 2016, the relevant details of the scheme are as follows:
ESOP 2008
Date of Board of Directors’ approval April 07, 2008
Date of Shareholders’ approval April 07, 2008
No. of options granted 238,000156,000
Method of settlement Cash
Vesting Period Over the period of four years
Exercise Period Three years from the date of vesting/listing, whichever is later
Vesting conditions Continuous association with the Company and performance
The details of activities under ESOP 2008 have been summarized below:
Number of options Weighted average exercise price (`)
2015-2016 2014-2015 2015-2016 2014-2015
Outstanding at the beginning of the year 34,34011,50080,00097,000
53,98021,00094,000
123,000
100.0032.00
385.00100.00
100.0032.00
385.00100.00
Granted during the year 134,334 - 105.00 -
Exercised during the year - - - -
Expired during the year 3,200--
4,00021,420
19,6409,500
14,00026,000
-
100.0032.00
385.00100.00105.00
100.0032.00
385.00100.00
-
Outstanding at the end of the year 31,14011,50080,00093,000
112,914
34,34011,50080,00097,000
-
100.0032.00
385.00100.00105.00
100.0032.00
385.00100.00
-
Exercisable at the end of the year 31,14011,50080,00093,000
34,34011,50080,00097,000
100.0032.00
385.00100.00
100.0032.00
385.00100.00
The weighted average share price at the date of exercise is not applicable since no option is exercised.
For the purpose of valuation of the options granted upto year ended March 31, 2016 under ESOP 2008, the compensation cost relating to Employee Stock Options, calculated as per the intrinsic value method, is ` Nil.
In March 2005, the Institute of Chartered Accountants of India has issued a Guidance Note on “Accounting for Employees Share Based Payments” applicable to employee share based plan the grant date in respect of which falls on or after April 1, 2005. The said Guidance Note requires the Pro-forma disclosures of the impact of the fair value method of accounting of employee stock compensation in the financial statements. Since the enterprise used the intrinsic value method and the management has obtained fair value of the options at the date of grant from a valuer, using weighted average of net asset value method and profit earning capacity value, there is no impact on the reported profits/(losses) and earnings per share.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials196
26. LeasesFinance lease: Group as a lessee
The Group has finance leases and hire purchase contracts for certain project equipments, vehicles and building, the cost of which is included in the gross block of plant and equipment, vehicles and buildings under tangible assets. The lease term is for one to ninety nine years. There is no escalation clause in the lease agreements. There are no significant restrictions imposed by lease arrangements.
2015-16 2014-15
Gross block at the end of financial year 211.49 215.43
Written down value at the end of financial year 94.38 134.28
Details of payments made during the year:
– Principal 61.10 36.87
– Interest 8.18 12.10
The break-up of minimum lease payments outstanding as at reporting date is as under
As at March 31, 2016 As at March 31, 2015
Principal Interest Total Principal Interest Total
Payable within one year 0.19 0.04 0.23 39.77 6.68 46.45
Payable after one year but before end of fifth year 0.23 0.06 0.29 21.63 1.08 22.71
Operating lease: Group as a lessee
The Group has entered into commercial leases on certain project equipment and office premises. There are no contingent rents in the lease agreements. The lease term is for 1-3 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements. There are no significant restrictions imposed by lease arrangements.
The break-up of minimum lease payments outstanding as at reporting date is as under:
As at
March 31, 2016 March 31, 2015
Not later than one year – 20.67
Later than one year and not later than five years – 19.25
Later than five years – 17.02
Operating lease: Group as a lessor
The Company has entered into property lease for a commercial office building. The non-cancellable period of the lease is six years and includes an escalation clause of 15% after three years. Future minimum rentals receivable under non-cancellable operating lease are as follows:
As at
March 31, 2016 March 31, 2015
Not later than one year 6.62 –
Later than one year and not later than five years 32.84 –
Later than five years – –
27. Segment InformationPrimary segment: Business segments –
The Group has identified the business segment as its primary reportable segment. The Group’s operating businesses are organized and managed separately according to the nature of products and services provided. The Group has identified Engineering, procurement and construction services (EPC) and Trading of goods as its two reportable segments. A description of the types of products and services provided by each reportable segment is as follows:
EPC segment includes providing of engineering, procurement and construction services in oil, gas and infrastructure sectors.
Trading of goods segment includes purchase and sale of steel, mainly outside India.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 197
The following table presents segment revenue, results, assets and liabilities in accordance with AS 17 – Segment Reporting as on March 31, 2016 and March 31, 2015:
EPC Traded goods Corporate unallocable Total
2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15
Revenue
External revenue 3,667.26 6,096.67 556.81 971.72 36.78 21.87 4,260.85 7,090.26
Inter-segment revenue – – – – – – – –
Total revenue from operations 3,667.26 6,096.67 556.81 971.72 36.78 21.87 4,260.85 7,090.26
Result
Segment results (1,142.39) (796.92) (1.43) 6.57 (23.35) (29.53) (1,167.17) (819.88)
Finance costs (1,069.78) (1,002.23)
Interest income 44.04 40.83
Other income (1.45) 560.09
Income tax 0.13 67.00
Net loss before minority interest and share of profit/(loss) in associates (2,194.23) (1,154.19)
Share of profits/(loss) in associates (net) (3.44) 3.24
Share of (profits)/losses transferred to Minority (47.67) 9.84
Loss for the year (2,245.34) (1,141.11)
Other information
Segment assets 11,514.90 12,563.55 – – 1,556.66 1,887.61 13,071.56 14,451.16
Segment liabilities 5,919.87 5,751.52 193.44 362.70 8,265.28 7,403.77 14,378.59 13,517.99
Capital expenditure 159.60 268.68 – – 0.71 3.89 160.31 272.56
Depreciation and amortisation 372.83 418.86 – – 12.03 51.40 384.86 470.26
Non-cash expenses other than depreciation and amortisation 369.05 77.94 – – 44.79 92.11 413.84 170.05
Secondary segment: Geographical segments*-
Although the Group’s major operating divisions are managed on a worldwide basis, they operate in two principal geographical areas of the world, in India, its home country, and the other countries.
The following table presents revenue from operations, unbilled revenue (work-in-progress) and trade receivables regarding geographical segments as at March 31, 2016 and March 31, 2015.
Revenue from operations Unbilled revenue (Work-in-progress)
Trade receivable (including retention money)
Year ended As at As at
March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015 March 31, 2016 March 31, 2015
India 1,602.77 1,770.51 2,614.76 2,841.73 930.08 1,142.34
Other countries 2,658.08 5,319.75 4,200.03 3,933.57 1,100.74 1,268.80
4,260.85 7,090.26 6,814.79 6,775.30 2,030.82 2,411.14
* All the major assets other than unbilled revenue (work-in-progress) and trade receivables are situated in India and hence, separate figures for assets/additions to assets have not been furnished.
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials198
28. Related Parties
Names of related parties where control exists irrespective of whether transactions have occurred or not:
Joint ventures Kumagai-Sembawang-Mitsui Joint Venture
Thiruvananthpuram Road Development Company Limited @ Kumagai-SembCorp Joint Venture
Ramprastha Punj Lloyd Developers Private Limited Kumagai-SembCorp Joint Venture (DTSS)
Punj Lloyd Dynamic LLC Semb-Corp Daewoo Joint Venture
AeroEuro Engineering India Private Limited Public Works Company Tripoli Punj Lloyd Joint Venture
PLE TCI Engineering Limited @ Sembawang – Leader Joint Venture *
PLE TCI Engenharia Ltda
PT Kekal Adidaya Associates
Sembawang Precast System LLC * Air Works India (Engineering) Private Limited
Sembawang Caspi Engineers and Constructors LLP* Reco Sin Han Pte Limited *
Joint Venture of Whessoe Oil and Gas Limited and Punj Lloyd Limited
* Entities either in the process of strike-of/liquidation or struck-off/ liquidated during the year.
@ Entities held for sale in the near future.
Key Managerial Personnel with whom transactions have taken place during the year:
Atul Punj - Chairman and Managing Director
Luv Chhabra* - Director (Corporate Affairs)
P. N. Krishnan* - Director – Finance
J. P. Chalasani* - Managing Director & Group CEO
* since resigned
Relatives of Key Managerial Personnel with whom transactions have taken place during the year:
Shiv Punj - Son of Chairman
Enterprises over which Key Managerial Personnel or their relatives exercise significant influence and with whom transactions have taken place during the year:
Pt. Kanahya Lal Dayawanti Punj Charitable Society - Chairmanship of Father of Chairman
PTA Engineering and Manpower Services Private Limited - Shareholding of Chairman
PLE Hydraulics Private Limited - Shareholding of Chairman
Artcon Private Limited - Shareholding of Chairman
Manglam Equipment Private Limited - Shareholding of Chairman
Petro IT Limited - Shareholding of Brother of Chairman
Related party transactions
The following table provides the total amount of transactions that have been entered with related parties for the relevant financial year:
March 31, 2016 March 31, 2015
Expenses
Consultancy and professional
AeroEuro Engineering India Private Limited 0.01 0.37
Travelling and conveyance
Air Works India (Engineering) Private Limited 1.27 1.23
Employee benefits expense
Shiv Punj 0.27 0.04
Managerial remuneration/ professional charges
Atul Punj 2.17 5.59
Luv Chhabra 0.80 1.41
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 199
March 31, 2016 March 31, 2015
J.P. Chalasani 3.49 3.35
P. N. Krishnan 1.22 2.31
Rent
Pt. Kanahya Lal Dayawanti Punj Charitable Society 1.37 1.37
PTA Engineering and Manpower Services Private Limited 0.21 0.19
Artcon Private Limited 0.03 0.02
Mangalam Equipment Private Limited 0.03 0.02
BALANCE OUTSTANDING AS AT END OF THE YEAR
Receivable/(payables)
Air Works India (Engineering) Private Limited 0.35 0.12
Ramprastha Punj Lloyd Developers Private Limited 40.24 40.24
PT. Kekal Adidaya 52.92 53.74
Pt. Kanahya Lal Dayawanti Punj Charitable Society (2.87) (1.40)
PTA Engineering and Manpower Services Private Limtied (0.23) (0.11)
Petro IT Limited (0.71) (0.71)
Artcon Private Limited (0.00) 0.01
Mangalam Equipment Private Limited (0.01) 0.00
Shiv Punj (0.03) (0.02)
Atul Punj (2.17) (0.47)
Luv Chhabra – (0.05)
P N Krishnan – (0.11)
J P Chalasani (0.20) (0.11)
Investments (Net of Provision for diminutions in the value)
Air Works India (Engineering) Private Limited 45.06 48.50
Reco Sin Han Pte. Limited – 0.05
29. Capital and other commitments
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) is ` 30.52 crores (Previous year ` 9.01 crores).
(b) For commitments relating to lease arrangements, please refer note 26.
30. Contingent liabilities
As at
March 31, 2016 March 31, 2015
a) Liquidated damages deducted by customers not accepted by the Group and pending final settlement. # 136.44 170.05
b) Demand by custom authorities against import of aircraft 17.89 17.89
c) Value added tax demands: *
on disallowance of deduction on labour and services of the works contracts pending with sales tax authorities and High Court 16.57 39.29
for non submission of statutory forms 0.11 0.11
for purchases against statutory forms not accepted by department 7.76 8.76
against the central sales tax demand on sales in transit/ sale in the course of import 0.07 2.84
in one of an overseas subsidiary – 21.20
d) Entry tax demands against entry of goods into the local area not accepted by department. * 3.99 4.68
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials200
# excludes possible liquidated damages which can be levied by customers for delay in execution of projects. The management, based on consultation with various experts, believes that there exist strong reasons why no liquidated damages shall be levied by these customers. Although, there can be no assurances, the Company believes, based on information currently available, that the ultimate resolution of these proceedings is not likely to have an adverse effect on the results of operations, financial position or liquidity of the Group.
* The management believes that the claims made are untenable and is contesting them. As of the reporting date, the management is unable to determine the ultimate outcome of the above matters. However, based on favorable decisions/outcomes in similar cases earlier and based on legal opinions /consultations with solicitors, the management believes that there are good chances of success in above mentioned cases and hence, no provision there against is necessary.
e) On March 17, 2010, the holding company was subjected to a search and seizure operation under Section 132 and survey under Section 133A of the Income tax Act, 1961. During the search and seizure operation, statements of Company’s officials were recorded in which they were made to offer some unaccounted income of the Company for the financial year 2009-10. The Company believed that the above statements were made under undue mental pressure and physical exhaustion and therefore Company retracted the above statements subsequently. The Company filed fresh returns of income for Assessment years (AY) 2004-05 to 2009-10 in pursuance of the notices dated August 25, 2010 from the Income Tax Department (“the Department”). The Department completed the assessments for the AY 2004-05 to 2010-11 and created demands aggregating to ` 229.13 crores, by making some frivolous additions to the total income of the Company, which were adjusted against the income tax refunds of the said/subsequent years. The Company filed appeals against these additions on January 27, 2012 and June 12, 2013. On August 29, 2014, favorable orders were received from the CIT (Appeals) for the AY 2004-05 to 2006-07 for all the additions made except for the addition relating to permanent establishment, for which further appeal was filed by the Company to ITAT, Delhi dated October 31, 2014. Based on the expert opinion, the Company is hopeful that it will get relief in appeals pending before the CIT-(A) and/or Income Tax Appellate Tribunal. Hence, no adjustment is considered necessary for these matters.
f) The Group, directly or indirectly through its subsidiaries, is severally or jointly involved in certain legal cases with its customers / vendors in the ordinary course of business. The management believes that due to the nature of these disputes and in view of numerous uncertainties and variables associated with certain assumptions and judgments, and the effects of changes in the regulatory and legal environment, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial changes. The Group regularly monitors its estimated exposure to such loss contingencies and, as additional information becomes known, changes its estimates accordingly. In view of aforesaid reasons, as of the reporting date, it is unable to determine the ultimate outcome of these matters.
31. Derivative instruments and un-hedged foreign currency exposureThe Company, in addition to its Indian operations, operates outside India through its branches and an unincorporated joint venture established in United Arab Emirates (UAE), Oman, Qatar, Libya, Thailand, Bahrain, Kuwait and Saudi Arabia.
a) Particulars of un-hedged foreign currency exposures of the Indian operations (net of intra group balances) as at the Balance Sheet date:
Currency March 31, 2016 March 31, 2015
Amount in foreign currency
Rate Amount Amount in foreign currency
Rate Amount
Liabilities
(i) Trade payable to suppliers EUR 463,437 75.43 3.50 505,140 67.19 3.39
GBP 289,051 95.29 2.75 58,525 92.44 0.54
SGD 613,427 49.29 3.02 687,348 49.02 3.37
USD 60,841,113 66.25 403.09 83,546,861 63.13 527.43
MYR 24,682 17.11 0.04 9,042 16.86 0.02
HKD 3,961,170 8.54 3.38 2,672,445 8.06 2.15
AED 595,098 18.04 1.07 – – –
CHF 243,140 69.01 1.68 10,000 64.83 0.06
(ii) Other payable EUR 65,105 75.43 0.49 73,138 67.19 0.49
USD 1,431,263 66.25 9.48 2,073,939 63.13 13.09
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 201
Currency March 31, 2016 March 31, 2015
Amount in foreign currency
Rate Amount Amount in foreign currency
Rate Amount
(iii) Advance from customers USD 1,569,167 53.75 8.43 1,470,902 52.46 7.72
EUR 164,570 55.46 0.91 608,064 67.14 4.08
BDT – – – 7,158,464 0.76 0.55
(iv) Loans taken USD 14,124,070 66.25 93.58 35,777,250 63.13 225.86
EUR – – – 712,800 67.19 4.79
Assets
(i) Advances to suppliers EUR 543,267 79.56 4.32 937,766 77.11 7.23
GBP 45,446 91.11 0.41 34,801 97.12 0.34
HKD 1,818,403 8.59 1.56 10,151,459 7.88 8.00
SGD 225,338 41.00 0.92 231,302 41.20 0.95
USD 739,249 61.63 4.56 2,577,993 59.83 15.42
MYR 683 15.79 0.00 104,873 25.68 0.27
AED 20,000 18.11 0.04 – – –
CAD 14,478 6.55 0.01 800 45.92 0.00
(ii) Trade receivables USD 51,872,191 66.25 343.67 58,087,213 63.13 366.70
MMK 1,479,501 0.05 0.01 79,500 0.06 0.00
EUR 513,828 75.43 3.88 15,517 67.19 0.10
(iii) Bank balances USD 20,488,620 66.25 135.74 49,516 63.13 0.31
HKD 634,783 8.54 0.54 1,455,997 8.06 1.17
MMK 104,950 0.05 0.00 401,375 0.06 0.00
BDT 968,881 0.85 0.08 902,330 0.80 0.07
b) Particulars of un-hedged foreign currency exposures of the Indian subsidiaries (net of intra group balances) as at the Balance Sheet date:
Currency March 31, 2016 March 31, 2015
Amount in foreign currency
Rate Amount Amount in foreign currency
Rate Amount
Liabilities
(i) Payable to suppliers USD 6,300,421 66.25 41.74 3,758,028 63.13 23.72
GBP 130,474 95.29 1.24 92,211 92.44 0.85
EUR 24,251 75.43 0.18 – – –
SGD 12,769 49.29 0.06 7,400 49.02 0.04
(ii) Advance from customer USD 436,992 66.25 2.90 1,084,913 63.13 6.85
(iii) Term Loan USD 19,261,767 66.25 127.61 20,047,060 63.13 126.56
Assets
(i) Trade receivables USD 8,206,219 66.25 54.37 7,003,116 63.13 44.21
EUR 205,203 75.43 1.55 11,897 67.19 0.08
GBP – – – 11,475 92.44 0.11
(ii) Bank balances EUR 19,935 75.43 0.15 – – –
USD 174,675 66.25 1.16 – – –
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials202
c) The income and expenditures of the foreign branches and unincorporated joint venture are denominated in currencies other than reporting currency. Accordingly, the Company enjoys natural hedge in respect of its foreign branches’ and unincorporated joint ventures’ assets and liabilities. The Company’s un-hedged foreign currency exposure in these branches and un-incorporated joint venture is limited to the net investment (assets – liabilities) (net of intra group balances), the particulars of which are as under:
S. No
Foreign operations Currency March 31, 2016 March 31, 2015
Amount in foreign currency
Rate Amount Amount in foreign currency
Rate Amount
(i) Abu Dhabi AED (39,216,506) 18.04 (70.75) (34,975,457) 16.96 (59.32)
(ii) Oman OMR (458,261) 172.31 (7.90) 812,361 162.31 13.19
(iii) Qatar QAR 290,920,863 18.20 529.52 264,052,546 17.11 451.79
(iv) Libya LYD 108,692,179 48.26 524.52 148,949,711 52.83 786.90
(v) Thailand THB 2,639,818,367 1.88 497.58 3,121,810,808 1.92 599.08
(vi) Thailand JV THB 1,223,915,787 1.88 230.70 1,261,290,814 1.92 242.04
(vii) Dubai AED (4,657,239) 18.04 (8.40) (728,537) 16.96 (1.24)
(viii) Bahrain BHD (6,095) 176.21 (0.11) (6,295) 165.26 (0.10)
(ix) Saudi Arabia SAR 15,538,509 17.67 27.45 (12,601,916) 16.61 (20.93)
(x) Kuwait KWD 141,172 219.50 3.10 116,298 207.05 2.41
d) The income and expenditures of the foreign subsidiaries are denominated in currencies other than reporting currency. Accordingly, the Group enjoys natural hedge in respect of its foreign subsidiaries’ assets and liabilities. The Group’s un-hedged foreign currency exposure in foreign subsidiaries is limited to the net investment (assets – liabilities) (net of intra group balances), the particulars of which are as under:
S. No
Foreign operations Currency March 31, 2016 March 31, 2015
Amount in foreign currency
Rate Amount Amount in foreign currency
Rate Amount
(i) Dayim Punj Lloyd Construction Contracting Company Limited SAR (14,633,267) 17.67 (25.85) (53,171,039) 16.61 (88.32)
(ii) Punj Lloyd Kazakhstan, LLP KZT’000 798,719 0.19 15.34 1,262,145 0.34 0.04
(iii) Punj Lloyd Pte. Limited SGD (111,909,184) 49.29 (551.57) (17,176,654) 49.02 (84.20)
(iv) Punj Lloyd Infrastructure Pte. Limited SGD 175,525,995 49.29 865.13 (13,305,275) 49.02 (65.22)
32. The disclosures as per provisions of Clauses 38, 39 and 41 of Accounting Standard 7 – “Construction Contracts” are as under:
2015-16 2014-15
a) Contract revenue recognised as revenue in the period (Clause 38 (a)) 3,407.48 5,803.63
b) Aggregate amount of costs incurred and recognised profits up to the reporting date on contract under progress (Clause 39 (a)) 17,827.41 37,901.85
c) Advance received on contract under progress (Clause 39 (b)) 1,728.15 1,662.27
d) Retention amounts on contract under progress (Clause 39 (c)) 1,086.84 1,007.25
e) Gross amount due from customers for contract work as an asset (Clause 41(a)) 6,812.27 6,775.13
f) Gross amount due to customers for contract work as a liability (Clause 41 (b)) 551.50 459.59
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 203
33. a) The Company, during earlier years, accrued claims amounting to ` 735.80 crores (Previous year ` 735.80 crores) on Heera Redevelopment Project with Oil and Natural Gas Corporation Limited, based upon management’s assessment of cost over-run arising due to design changes and consequent changes in the scope of work on the said project since it was of the view that the delay in execution of the project was attributable to the customer. Due to the said reasons, certain differences and dispute arose between the parties and several rounds of discussions were held to explore the possibility of amicable resolution of the dispute mutually. The Company, with a view to resolve the matter in finality, expeditiously and with legal enforceability re-commenced the arbitration proceedings, which were kept in abeyance owing to proceedings by the Outside Expert Committee. The management is confident of satisfactory settlement of the dispute and recovery of the said amounts, accordingly no adjustments have been considered necessary in these consolidated financial statements.
b) During the year, in an effort to revive their operations, Punj Lloyd Pte Limited (PLPL) and Sembawang Engineers and Constructors Pte Limited (SEC), subsidiaries of the Company, filed separate applications before the Singapore High Court (“the Court”) for seeking its approval to enter into a Scheme of Arrangement with their respective creditors pursuant to the applicable provisions of the Singapore Companies Act. In the meetings called as directed by the Court, SEC’s scheme could not get the requisite majority and PLPL’s scheme was withdrawn.
Subsequently, as a next course of action available under the Singapore Companies Act, these subsidiaries have filed separate applications before the Court for placing them under the Judicial Management. The said applications were admitted by the court and currently pending for hearing.
34. Asset of ` 3.68 crores, (Previous year ` 3.17 crores) recognized by some of the Group entities as ‘Minimum alternate tax credit entitlement’ under ‘Loans and advances’, in respect of minimum alternate tax payment for current and earlier years, represents that portion of minimum alternate tax liability which can be recovered and set off in subsequent periods based on the provisions of Section 115JAA of the Income tax Act, 1961. The management of the respective entities, based on the present profitability trend and future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the respective entities to utilize Minimum alternate tax credit assets.
35. The Group has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Group has reviewed and ensured that adequate provision as required under the law/ Accounting Standards for the material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.
36. Details of the Group’s share in joint ventures included in the consolidated financial statements are as follows:
Group’s share of March 31, 2016 March 31, 2015
Assets
– Non-current 44.90 217.48
– Current 40.08 140.61
Liabilities
– Non-current 0.02 58.13
– Current 95.81 309.30
Revenue 162.35 193.92
Expenditure 153.06 216.58
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials204
37. Details of entities of Punj Lloyd Group and additional information pursuant to Schedule III to the 2013 Act:
Name of Entities Country Voting power (%) as at
Net assets i.e. total assets minus total
liabilities
Share in profit / (loss)
March 31, 2016
March 31, 2015
Amount As a % of consolidated
net assets
Amount As a % of consolidated
profit and loss
Parent Company
Punj Lloyd Limited India 1,567.38 -119.72% (1,649.51) 73.46%
Subsidiaries: Indian
Spectra Punj Lloyd Limited India 100.00 100.00 4.85 -0.37% (0.09) 0.00%
Punj Lloyd Industries Limited India 99.99 100.00 11.58 -0.88% 0.09 0.00%
Atna Investments Limited India 100.00 100.00 0.60 -0.05% 0.02 0.00%
PLN Construction Limited India 100.00 100.00 17.82 -1.36% 0.61 -0.03%
PL Engineering Limited India 80.32 80.32 56.03 -4.28% (7.29) 0.32%
Punj Lloyd Infrastructure Limited India 100.00 100.00 22.82 -1.74% (1.18) 0.05%
Punj Lloyd Upstream Limited India 58.06 58.06 (13.64) 1.04% (41.31) 1.84%
Punj Lloyd Aviation Limited India 100.00 100.00 (14.77) 1.13% (15.96) 0.71%
Sembawang Infrastructure (India) Private Limited India 100.00 100.00 (16.45) 1.26% (1.00) 0.04%
Indtech Global Systems Limited India 99.99 99.99 0.97 -0.07% 0.05 0.00%
Shitul Overseas Placement and Logistics Limited # India 100.00 100.00 0.17 -0.01% (0.00) 0.00%
PLI Ventures Advisory Services Private Limited * India – 100.00 – – 1.86 -0.08%
Punj Lloyd Delta Renewables Private Limited India 51.00 51.00 (21.81) 1.67% (3.35) 0.15%
Punj Lloyd Raksha Systems Private Limited # India 51.18 100.00 1.60 -0.12% (0.08) 0.00%
PL Delta Technologies Limited @ India 80.32 80.32 – – – –
Punj Lloyd Solar Power Limited India 100.00 100.00 15.64 -1.19% (0.11) 0.00%
Khagaria Purnea Highway Project Limited India 100.00 100.00 35.72 -2.73% (7.18) 0.32%
Indraprastha Metropolitan Development Limited India 100.00 100.00 (0.35) 0.03% (0.02) 0.00%
PL Surya Urja Limited India 100.00 100.00 19.42 -1.48% (0.10) 0.00%
PL Sunshine Limited India 100.00 100.00 20.53 -1.57% (0.37) 0.02%
PL Sunrays Power Limited ** India 100.00 – 0.01 0.00% (0.00) 0.00%
PL Surya Vidyut Limited ** India 100.00 – 0.01 0.00% (0.00) 0.00%
PL Solar Renewable Limited ** India 100.00 – 0.01 0.00% (0.00) 0.00%
Subsidiaries: Foreign
Punj Lloyd International Limited British Virgin Islands
100.00 100.00 0.97 -0.07% (0.57) 0.03%
Punj Lloyd Kazakhstan, LLP Kazakhstan 100.00 100.00 (90.58) 6.92% (58.59) 2.61%
Punj Lloyd Pte Limited Singapore 100.00 100.00 (110.79) 8.46% 587.12 -26.15%
Punj Lloyd Building & Infrastructure Private Limited ** # Sri Lanka 100.00 – – – – –
Dayim Punj Lloyd Construction Contracting Company Limited Saudi Arabia 51.00 51.00 (78.35) 5.98% 140.94 -6.28%
Punj Lloyd Infrastructure Pte Limited Singapore 100.00 100.00 (36.94) 2.82% (20.46) 0.91%
PT Punj Lloyd Indonesia Indonesia 100.00 100.00 (484.51) 37.01% (122.61) 5.46%
PT Sempec Indonesia Indonesia 100.00 100.00 (36.74) 2.81% (63.96) 2.85%
Punj Lloyd Oil & Gas (Malaysia) Sdn. Bhd. Malaysia 100.00 100.00 146.67 -11.20% 10.01 -0.45%
Punj Lloyd Sdn. Bhd. Malaysia 100.00 100.00 (58.84) 4.49% (65.30) 2.91%
Punj Lloyd Engineers and Constructors Pte Limited Singapore 100.00 100.00 (43.94) 3.36% (0.37) 0.02%
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 205
Name of Entities Country Voting power (%) as at
Net assets i.e. total assets minus total
liabilities
Share in profit / (loss)
March 31, 2016
March 31, 2015
Amount As a % of consolidated
net assets
Amount As a % of consolidated
profit and loss
Punj Lloyd Engineers and Constructors Zambia Limited # Zambia 100.00 100.00 (0.17) 0.01% – –
Buffalo Hills Limited British Virgin Islands
100.00 100.00 11.27 -0.86% (0.03) 0.00%
Indtech Trading FZE United Arab Emirates
100.00 100.00 2.42 -0.18% (0.14) 0.01%
PLI Ventures Limited * Mauritius – 100.00 – 0.00% 7.22 -0.32%
Punj Lloyd Aviation Pte Limited Singapore 100.00 100.00 174.46 -13.33% (71.47) 3.18%
Christos Aviation Limited Bermuda 100.00 100.00 (0.29) 0.02% (0.12) 0.01%
Punj Lloyd (B) Sdn. Bhd. * Brunei – 100.00 – 0.00% – –
Punj Lloyd Kenya Limited Kenya 100.00 100.00 (0.99) 0.08% 0.29 -0.01%
PL Global Developers Pte Limited * Singapore – 100.00 – – 0.12 -0.01%
Graystone Bay Limited * British Virgin Islands
– 100.00 – – – –
Punj Lloyd Thailand (Co) Limited Thailand 100.00 100.00 0.61 -0.05% (0.26) 0.01%
Punj Lloyd Delta Renewables Pte Limited Singapore 51.00 51.00 (1.31) 0.10% (0.03) 0.00%
Punj Lloyd Delta Renewables Bangladesh Limited # Bangladesh 51.00 51.00 (0.04) 0.00% – –
Punj Lloyd Engineering Pte Limited Singapore 80.32 80.32 0.48 -0.04% 0.94 -0.04%
Simon Carves Engineering Limited United King-dom
80.32 80.32 7.53 -0.58% 2.60 -0.12%
Sembawang Engineers and Constructors Pte Limited Singapore 97.38 97.38 (330.50) 25.24% (886.15) 39.47%
Sembawang Development Pte Limited Singapore 97.38 97.38 (28.03) 2.14% (0.15) 0.01%
Sembawang Libya for General Contracting & Real Estate Investment Joint Stock Company *
Libya – 63.30 – – – –
Contech Trading Pte Limited Singapore 97.38 97.38 26.84 -2.05% (0.04) 0.00%
Construction Technology (B) Sdn Bhd * Brunei – 97.38 – – (0.01) 0.00%
Sembawang Mining (Kekal) Pte Limited Singapore 97.38 97.38 0.33 -0.02% (0.03) 0.00%
PT Indo Precast Utama * Indonesia – 97.38 – – – –
PT Indo Unggul Wasturaya * Indonesia – 65.24 – – – –
Sembawang (Tianjin) Construction Engineering Co. Limited China 68.17 68.17 19.80 -1.51% (3.06) 0.14%
Sembawang Infrastructure (Mauritius) Limited * Mauritius – 97.38 – – (0.03) 0.00%
Sembawang UAE Pte Limited Singapore 97.38 97.38 (7.25) 0.55% (1.48) 0.07%
Sembawang Consult Pte Ltd. Singapore 97.38 97.38 (6.42) 0.49% (2.12) 0.09%
Sembawang (Malaysia) Sdn Bhd Malaysia 97.38 97.38 (0.02) 0.00% (0.06) 0.00%
Jurubina Sembawang (M) Sdn Bhd Malaysia 97.28 97.28 (0.04) 0.00% 4.66 (0.00)
Tueri Aquila FZE United Arab Emirates
97.38 97.38 (264.54) 20.21% 3.48 -0.15%
Sembawang Bahrain SPC * Bahrain – 97.38 – – (0.06) 0.00%
Sembawang Equity Capital Pte Limited Singapore 97.38 97.38 0.35 -0.03% (0.03) 0.00%
Sembawang of Singapore – Global Project Underwriters Pte Limited * Singapore – 97.38 – – (0.00) 0.00%
Sembawang of Singapore – Global Project Underwriters Limited * Hong Kong – 97.38 – – (0.00) 0.00%
Sembawang Hong Kong Limited Hong Kong 97.38 97.38 (0.11) 0.01% (0.09) 0.00%
Sembawang (Tianjin) Investment Management Co Limited China 97.38 97.38 3.45 -0.26% (1.64) 0.07%
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Financials206
Name of Entities Country Voting power (%) as at
Net assets i.e. total assets minus total
liabilities
Share in profit / (loss)
March 31, 2016
March 31, 2015
Amount As a % of consolidated
net assets
Amount As a % of consolidated
profit and loss
PT Sembawang Indonesia Indonesia 97.38 97.38 (0.04) 0.00% (0.00) 0.00%
Reliance Contractors Private Limited Singapore 97.38 97.38 2.76 -0.21% (0.03) 0.00%
Sembawang E&C Malaysia Sdn. Bhd. # Malaysia 97.38 97.38 1.27 (0) 0.03 (0.00)
Minority interest in all subsidiaries (including prefer-ence shares issued by a subsidiary)
(2.18) 0.17% (47.67) 2.12%
Joint ventures: Indian
Thiruvananthpuram Road Development Company Limited @ India 50.00 50.00 – – – –
Ramprastha Punj Lloyd Developers Private Limited India 50.00 50.00 (0.01) 0.00% (0.00) 0.00%
AeroEuro Engineering India Private Limited India 40.16 40.16 (0.90) 0.07% (0.17) 0.01%
PLE TCI Engineering Limited # @ India 39.36 39.36 – – – –
Joint ventures: Foreign
Punj Lloyd Dynamic LLC # Qatar 48.00 48.00 0.36 -0.03% – –
PLE TCI Engenharia Ltda Brazil 39.36 39.36 0.03 0.00% – –
PT Kekal Adidaya Indonesia 48.69 48.69 124.25 -9.49% (10.96) 0.49%
Sembawang Precast System LLC * United Arab Emirates
– 48.69 – – – –
Sembawang Caspi Engineers and Constructors LLP * Kazakhstan – 48.69 – – – –
Associate: Indian
Air Works India (Engineering) Private Limited India 23.30 23.30 45.06 -3.44% (3.44) 0.15%
Associate: Foreign
Reco Sin Han Pte Limited * Singapore – 19.48 – – – –
Intra-group eliminations (2,002.74) 152.97% 83.30 -3.71%
Total (1,309.21) 100.00% (2,245.34) 100.00%
* Entities either in the process of strike-of/liquidation or struck-off/ liquidated during the year.
** Entities incorporated / formed during the year.
# Entities yet to commence operations
@ Entities held with an intention of disposal in near future, hence excluded from consolidation.
Joint Controlled Operation Country % of voting power as at
March 31, 2016 March 31, 2015
Joint Venture of Whessoe Oil and Gas Limited and Punj Lloyd Limited
Country of Incorporation is not applicable, as these are
Unincorporated Joint Ventures.
50.00 50.00
Kumagai-Sembawang-Mitsui Joint Venture 43.82 43.82
Kumagai-SembCorp Joint Venture 48.69 48.69
Kumagai-SembCorp Joint Venture (DTSS) 48.69 48.69
Semb-Corp Daewoo Joint Venture 58.43 58.43
Sembawang – Leader Joint Venture – 53.56
Public Works Company Tripoli Punj Lloyd Joint Venture Refer Note No. (i) Refer Note No. (i)
(All amounts in INR Crores, unless otherwise stated)
Notes to Consolidated Financial Statements for the year ended March 31, 2016
Punj Lloyd | Annual Report 2015-2016 207
i) As per the joint venture agreements, the scope & value of work of each partner has been clearly defined and accepted by the clients. The Company’s share in Assets, Liabilities, Income and Expenses are duly accounted for in the accounts of the Company in accordance with such division of work and therefore does not require separate disclosure. However, joint venture partners are, jointly and severally, liable to clients for any claims in these projects.
Financial numbers disclosed under additional information to consolidated accounts as at March 31, 2016 (Pursuant to Schedule III to the 2013 Act), are the information in respect of above entities is extracted from their respective financial statements, which have been subject to audit by their respective auditors.
38. Others
a) Capitalization of expenditure
During the year, the Group has capitalized the following expenses of revenue nature to the cost of tangible asset/capital work-in-progress. Consequently, expenses disclosed under the respective notes are net of amounts capitalized.
Particulars As at
March 31, 2016 March 31, 2015
Balance brought forward 19.75 20.26
Site expenses 1.60 2.27
Consultancy and professional 0.15 3.81
Interest 2.35 4.15
Bank charges 0.90 1.97
Miscellaneous 1.53 4.33
Total 26.28 36.79
Less: transferred to tangible assets (5.75) (17.04)
Balance carried forward 20.53 19.75
b) Amounts in the consolidated financial statements are presented in INR crores, unless otherwise stated. Certain amounts that are required to be disclosed and do not appear due to rounding off are expressed as 0.00. One crore equals 10 millions.
c) Previous year figures have been regrouped/reclassified, where necessary, to conform to this year’s classification.
As per our report of even date
For Walker Chandiok & Co LLP(Formerly Walker, Chandiok & Co)Chartered Accountants
For and on behalf of the Board of Directors of Punj Lloyd Limited
per Anupam Kumar Partner Atul Punj Chairman & Managing Director DIN: 00005612Shiv Punj Director DIN: 03227629
Place: Gurgaon Rahul Maheshwari Chief Financial OfficerDate: May 27, 2016 Dinesh Thairani Group President – Legal & Company Secretary