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A Report On Financial Statement Of Hindustan Construction Company

Introduction Business portfolio Operational assets Assets under development Performance highlights Significant accounting policies Highlights of 2011-12 Financial review

Hindustan construction company is one of the pioneering companies in executing large scale infrastructure related construction projects in India It has undertaken some of the largest and most technically challenging projects that have been part of Indias overall physical infrastructure.

Business portfolio
Engineering and construction Total services contractor Infrastructure Real estate Integrated urban development management Power Transportation Water supply and irrigation Industrial and marine works

Operational assets
Nirmal (NBL) annuity(NH7) The sole annuity project in the portfolio is a road from Kadtal to Armur which forms a part of the Nagpur-Hyderabad section of NH7.This 33 km development was the first investment by the company and wad completed 100 days ahead of schedule completion. Dhule Palesner(DPTL) highway project(NH3) The project road achieved provisional completion and toll collection began in february 2012 ,four months ahead of its contractual completion date

Assets under development

West Bengal (NH34) highway project This eagerly waited project being developed by HCC concessions ltd on a design,finance, build, operate and transfer (DFBOT) basis is among the largest PPP projects in west bengal.

Performance Highlights
HCC had entered 2011-12 with a lower order book. While it focused on effective execution ,the size and structure of the organisation was geared for catering to a much larger infrastructure related construction market. The financial highights of HCCs performance on a stand alone basis in 2011-12 are - Order book is at 15336 crores in 2011-12 -revenue from operations is at 4003 crores in 2011-12 vs 4144 crores in 2010-11

Significant Accountig Policies

Basis accounting
The Company maintains its accounts on accrual basis. Management makes estimates and technical and other assumptions regarding the amounts of income and expenses in accordance with Indian GAAP in the preparation of the financial statements. Difference between the actual results and estimates are recognised in the period in which they are determined.

Fixed assets Fixed assets are stated at cost of acquisition including attributable interest & financial costs till the date of acquisition/installation of the assets and improvement thereon less accumulated depreciation / amortisation and accumulated impairment losses if any. Intangible assets comprise of licence fees , other implementation cost for software (ERP) and other application softwares acquired for inhouse use.

Depreciation and amortisation Depreciation on fixed assets is provided: I) In respect of buildings and sheds, furniture and office equipments on the written down value method (pro-rata on additions and deletions of the year) at rates prescribed in Schedule XIV of the Companies Act, 1956. ii) In respect of plant & machinery, heavy vehicles, light vehicles,helicopter, aircraft and speed boat on the straight line method at rates prescribed in schedule XIV of the Companies Act, 1956 on a pro-rata basis.

Employee benefits i) Defined Contribution plan Contribution to provident fund and superannuation fund is accounted on accrual basis. ii) Defined Benefit plan Gratuity is charged to revenue on the basis of actuarial valuation and in case of daily rated workmen on actual basis computed on tenure of service as at the end of the year.

Inventories a) The stock of stores, spares and embedded goods and fuel is valued at cost (weighted average basis), or net realisable value whichever is lower. b) Work-in-Progress is valued at the contract rates and site mobilisation expenditure of incomplete contracts is stated at cost. c) Certain loose plant, tools & service equipments costing below ` 5 lacs are valued at proportionate written down value @ 3% p.m. over a period of 32 months.

Borrowing costs Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as a part of the cost of such asset. Other borrowings costs are charged to statement of profit and loss as incurred.

Highlights of 2011-12
Group turnover at ` 8,157 crore, increased by 14%. HCC Standalone Turnover at ` 4,003 crore. HCC E&C Orderbook at ` 15,336 crore. HCC Infrastructure raised ` 240 crore by divesting 14.5% equity stake in HCC Concessions to The Xander Group at a valuation of ` 1,650 crore . HCC Infrastructures Dhule Palesner Highway Project commenced operations in February 2012 four months ahead of schedule

Financial review

In difficult business environment ,HCC has utilised 2011-12 to re calibrate its business environment. Eventhough the profits were less compared to 2010-11 HCC has laid an emphasis on researching the market to identify the projects that are most suitable for the company. The turnover has decreased from 4144 cr in 2010-11 to 4003 cr in 2011-12.