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ANNUAL REPORT2015-2016

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.


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


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



Corporate Information


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


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

8

Charteringa New Blueprint

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 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


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.


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


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.

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Cut Costs, Bring in the Cash!

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Employee Corner

Sessions on Gender Equality & Sensitisation

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experiences with fellow colleagues

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


Source: Central Statistical Organisation (CSO), Government of India

CHART C


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


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


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


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


ENGINEERING

9%ESS

23%ILDING & RUCTURE

10%POWER

CHART F

8%OTHERS


4%PL INFRA

4%ENGINEERING

15%PROCESS

11%BUILDING &

INFRASTRUCTURE

3%OFFSHORE

9%POWER

OTHERS


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.


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


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

LSTK Package B, Paradip Refinery, Odisha


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


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


(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

36

Nagpur Capitol Heights, Nagpur, Maharashtra


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


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.


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)


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.


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.


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


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


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


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.


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.



*** 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.


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:



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.


Directors' Report58

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:



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?


Directors' Report60

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



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.


Directors' Report62

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.



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


5


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.


Directors' Report64

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]



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.


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%



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


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


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


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.


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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An

nex

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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


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.



% 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*


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)


Sl.No.



% 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 *


82 Sembawang of Singapore – Global Project Underwriters Limited *


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


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


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


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


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


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


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


3 Uday Punj (HUF)


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


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


No Change NIL


6 Atul Punj


No Change NIL


7 Cawdor Enterprises Ltd.


No Change NIL


8 Spectra Punj Finance Pvt. Ltd.


No Change NIL


Annexure IX


Sl. No.

Shareholder’s NameDate


April 01, 2015

Cumulative Shareholding During the Year



No. of Shares


Company

9 Jyoti Punj


No Change NIL


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


12 Uday Punj/ Manglam Punj


No Change NIL


(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


Company

1 Life Insurance Corporation Of India


No Change NIL


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.



April 01, 2015




No. of Shares


Company

3 OHM Stock Broker Pvt.Ltd



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


4. Anil Agarwal



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


5. Karvy Stock Broking LTD- F-O Margin



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


Sl. No.



April 01, 2015




No. of Shares


Company


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.



April 01, 2015




No. of Shares


Company


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


Sl. No.



April 01, 2015




No. of Shares


Company


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


6 California Public Employees Retirement System, SEL



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


Annexure IX

Directors' Report92

Sl. No.



April 01, 2015




No. of Shares


Company

7 Dimensional Emerging Markets Value Fund


No Change NIL


8 IL and FS Securities Services Limited

at the beginning of the year 01/04/2015 460,368 0.14 - -


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


Sl. No.



April 01, 2015




No. of Shares


Company


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


Annexure IX

Directors' Report94

Sl. No.



April 01, 2015




No. of Shares


Company

9. Emerging Markets Core Equity Portfolio (The Portfo



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


10. Globe Capital Market Ltd

at the beginning of the year 01/04/2015 744,233 0.22 - -


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


Sl. No.



April 01, 2015




No. of Shares


Company


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.



April 01, 2015




No. of Shares


Company


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


(v) Shareholding of Directors and Key Managerial Personnel:

Sl. No.

For Each of the Directors and KMP Date


April 01, 2015

Cumulative Shareholding During The Year





1 Atul Punj


No Change NIL


2 Phiroz Adi Vandrevala


No Change NIL


3 J.P. Chalasani*

at the beginning of the year 01-04-2015 0 0.00 - -

No Change NIL


4 Luv Chhabra**


No Change NIL

at the end of the year 31-03-2016 - - NA NA

5 P.N. Krishnan***


No Change NIL


6 Ekaterina Alexandra Sharashidze


No Change NIL


7 Maniedath Madhavan Nambiar****


No Change NIL


8. Uday Walia@

at the beginning of the year 01-04-2015 NA NA - -

No Change NIL


9. Shiv Punj @


No Change NIL


Annexure IX

Directors' Report98

Sl. No.

For Each of the Directors and KMP Date


April 01, 2015

Cumulative Shareholding During The Year





10 Nidhi Kumar Narang (CFO)#


No Change NIL


11 Shamik Roy (CF0)##


No Change NIL


12 Dinesh Thairani (Company Secretary)


No Change NIL



** 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


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. 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


PART

“A” -

SU

BSID

IARI

ES

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

Tota

l Lia

-bi

litie

sIn

vest

men

ts

(Oth

er th

an

inve

stm

ents

in

su

bsid

iarie

s)

Turn

over

/

Tota

l In

com

eBe

fore

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xatio

n

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isio

n Fo

r Ta

xatio

nAf

ter

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tion

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pose

d D

ivi-

dend

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tra P

unj L

loyd

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ited

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a10

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RM

arch

31,

201

6 1

.00

5.0

0 (0

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71.

97

67.

12

- 9

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(0.1

3) 0

.04

(0.0

9) -

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yd In

dust

ries

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ited

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a99

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ch 3

1, 2

016

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(0.0

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.09

-

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stm

ents

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ited

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a10

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%IN

RM

arch

31,

201

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5 (4

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1 0

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0.0

3 (0

.01)

0.0

2 -

PLN

Con

stru

ctio

n Li

mite

dIn

dia

100.

00%

INR

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ch 3

1, 2

016

1.0

0 2

.00

15.

82

89.

23

71.

41

- 2

2.17

0

.90

(0.2

9) 0

.61

-

Punj

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yd In

tern

atio

nal L

imite

dBr

itish

Virg

in

Isla

nds

100.

00%

USD

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ch 3

1, 2

016

66.

25

0.6

6 0

.30

11.

18

10.

22

- -

(0.5

7) -

(0.5

7) -

Punj

Llo

yd K

azak

hsta

n, L

LPKa

zakh

stan

100.

00%

KZT

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ch 3

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016

0.1

9 2

1.27

(1

11.8

5) 2

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6 (5

8.59

) -

(58.

59)

-

Punj

Llo

yd P

te L

imite

dSi

ngap

ore

100.

00%

SGD

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ch 3

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016

49.

29

1,19

4.41

(1

,305

.20)

707.

45

818

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19.

19

1,36

8.24

5

68.0

7 1

9.05

5

87.1

2 -

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yd B

uild

ing

& In

frast

ruct

ure

Priva

te L

imite

d **

#Sr

i Lan

ka10

0.00

%LK

RM

arch

31,

201

6 0

.45

- -

- -

- -

- -

- -

PL E

ngin

eerin

g Li

mite

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dia

80.3

2%IN

RM

arch

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201

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80

136

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(7

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0

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frast

ruct

ure

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ited

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a10

0.00

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arch

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(1.1

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pstre

am L

imite

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dia

58.0

6%IN

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arch

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(76.

33)

230

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(41.

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yd A

viatio

n Li

mite

dIn

dia

100.

00%

INR

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ch 3

1, 2

016

1.0

0 6

3.80

(7

8.57

) 7

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5

3.00

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(15.

96)

- (1

5.96

) -

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baw

ang

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stru

ctur

e (In

dia)

Pr

ivate

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a10

0.00

%IN

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arch

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201

6 1

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) 7

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(1.0

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ech

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bal S

yste

ms

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ited

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a99

.99%

INR

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ch 3

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0 0

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l Ove

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s Pl

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ent a

nd

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stic

s Li

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d #

Indi

a 10

0.00

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RM

arch

31,

201

6 1

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0 (0

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(0.0

0) -

(0.0

0) -

PLI V

entu

res

Advis

ory

Serv

ices

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ivate

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ited

*In

dia

- IN

R-

1.0

0 -

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1.8

6 1

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- 1

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-

Day

im P

unj L

loyd

Con

stru

ctio

n C

ontra

ctin

g C

ompa

ny L

imite

dSa

udi

Arab

ia51

.00%

SAR

Mar

ch 3

1, 2

016

17.

67

3.5

3 (8

1.89

)22

9.33

3

07.6

9 -

255

.04

140

.94

- 1

40.9

4 -

STA

TE

ME

NT

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NTA

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G S

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EN

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ES

(All

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ise

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ed)


Nam

e of

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ntry

of

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n

%

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ing

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roup

as

on

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ch

31, 2

016

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rt-

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urre

n-cy

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arch

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ital

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rves

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vest

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ts

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er th

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bsid

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over

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fore

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r Ta

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ter

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ited

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apor

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arch

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18

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0.46

) -

(20.

46)

-

PT P

unj L

loyd

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nesi

aIn

done

sia

100.

00%

USD

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ch 3

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016

66.

25

159

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(643

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61.

43

545

.93

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21.0

4) (1

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(122

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-

PT S

empe

c In

done

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nesi

a10

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SDM

arch

31,

201

6 6

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4

4.29

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1.03

) 5

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42.

09

- 0

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(63.

96)

- (6

3.96

) -

Punj

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yd O

il &

Gas

(Mal

aysi

a)

Sdn.

Bhd

.M

alay

sia

100.

00%

MYR

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ch 3

1, 2

016

17.

11

1.2

8 1

45.3

8 2

68.3

5 1

21.6

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102

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10.

01

-

Punj

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yd S

dn. B

hd.

Mal

aysi

a10

0.00

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YRM

arch

31,

201

6 1

7.11

1

.71

(60.

55)

73.

95

132

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- 3

0.31

(6

2.92

) (2

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(65.

30)

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Punj

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arch

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6 4

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bia

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ited

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mbi

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arch

31,

201

6 5

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0 (0

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- 0

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(0.0

0) -

- -

Buffa

lo H

ills L

imite

dBr

itish

Virg

in

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nds

100.

00%

USD

Mar

ch 3

1, 2

016

66.

25

0.0

1 1

1.26

1

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0

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(0.0

3) -

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Indt

ech

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ing

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ted

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arch

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6 1

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1

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Punj

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yd A

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n Pt

e Li

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100.

00%

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ch 3

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016

49.

29

250

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(75.

70)

174

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8 -

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arch

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- (0

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-

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enya

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arch

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6 0

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0.0

0 (0

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00%

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8 1

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9.0

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0.0

1 (0

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66.

25

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0 (4

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0%IN

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arch

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9 (2

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Punj

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arch

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6 4

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95.

29

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ower

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dia

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00%

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ch 3

1, 2

016

1.0

0 0

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3 -

- (0

.00)

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-

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urya

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imite

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0.00

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arch

31,

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6 1

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(0.0

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PL S

olar

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arch

31,

201

6 1

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Sem

baw

ang

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neer

s an

d C

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ors

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ited

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apor

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SGD

Mar

ch 3

1, 2

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49.

29

918

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(1,2

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0 1

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8) (1

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(886

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-

STA

TE

ME

NT

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NTA

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EN

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7, 2

016


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



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.


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.



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.




(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



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






(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.



(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



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.






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



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.





Cash Flow Statement 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.



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



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.


(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



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:



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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



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



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.



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


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.



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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



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



Punj Lloyd | 127


As at As at


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 – – –



Financials128


As at As at


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.


– – 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



Punj Lloyd | 129


As at As at


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.


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.



Financials130

7. Provisions

Non-current Current

As at As at


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



Punj Lloyd | 131

9. Other liabilities

Non-current Current

As at As at


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


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



Financials132


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


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



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


Other adjustments


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



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



Punj Lloyd | 135

As at

March 31, 2016 March 31, 2015

Non-trade Unquoted equity instruments


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


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


(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


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



Financials136

15. Other assets

Non-current Current

As at As at



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


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.



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



Financials138

Year ended

March 31, 2016 March 31, 2015

Rent 24.00 35.29

Freight and cartage 35.23 25.28


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



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


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


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



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



Employee turnover

upto age 30 years 15.00% 15.00%

31-44 years 10.00% 10.00%

45 and above 5.00% 5.00%



(2006-08) Ultimate


(2006-08) Ultimate



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 - - - -



2015-2016 2014-2015 2015-2016 2014-2015







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.



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


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


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



Punj Lloyd | 143

S. No



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



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


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% **



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


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)



Punj Lloyd | 145


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 *



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 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



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


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 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 –



Financials148

March 31, 2016 March 31, 2015

Interest income


Punj Lloyd Infrastructure Pte. Limited 0.49 0.03

Punj Lloyd International Limited 0.55 0.34


Punj Lloyd Aviation Limited 1.48 0.87




Other income







EXPENSES

Contractors charges

Punj Lloyd Engineering Pte Limited 35.10 7.51

Punj Lloyd Delta Renewables Private Limited – 6.90


Project material consumed and cost of goods sold


Punj Lloyd Infrastructure Limited 69.25 –

Dayim Punj Lloyd Construction Contracting Company Limited 0.30 –

Hire charges



Consultancy and professional


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



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


Artcon Private Limited 0.03 0.02

Manglam Equipment Private Limited 0.03 0.02

Repair and maintenance


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 Oil and Gas (Malaysia) Sdn Bhd – 93.97

Punj Lloyd Sdn Bhd 119.69 252.52


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 –


Sembawang Infrastructure (India) Private Limited 15.56 0.73

Punj Lloyd Solar Power Limited – 3.07


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




Financials150

March 31, 2016 March 31, 2015

Corporate Guarantees redeemed during the year

Punj Lloyd Pte Limited 161.84 –

PL Engineering Limited 33.00 –




Sembawang Engineers & Constructors Pte Limited 340.16 301.73

Punj Lloyd Solar Power Limited – 2.92


Loans given during the year

Punj Lloyd Kazakhstan LLP – 26.31


Punj Lloyd Infrastructure Limited – 104.24


Punj Lloyd Infrastructure Pte. Limited – 3.76

Loans received back during the year




Punj Lloyd Infrastructure Pte. Limited 3.76 –


Sembawang Infrastructure (India) Private Limited – 0.21

Balance outstanding as at end of the year

Receivable/(payables)


PT Punj Lloyd Indonesia (24.24) (20.84)

Punj Lloyd International Limited (2.56) (2.91)

Punj Lloyd Kazakhstan LLP 40.69 9.55



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)






PT Sempec Indonesia (1.50) (1.42)



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


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)


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



PLN Construction Limited – 4.88


PLI Ventures Advisory Services Private Limited – 0.99





Financials152

March 31, 2016 March 31, 2015




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 Industries Limited 11.50 11.50

Atna Investments Limited 0.39 0.39





PLI Ventures Advisory Services Private Limited – 0.01





Indtech Global Systems Limited 1.70 1.70

Shitul Overseas Placement and Logistics Limited 0.10 0.10




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 Oil and Gas (Malaysia) Sdn Bhd 422.25 405.43

Punj Lloyd Sdn Bhd 384.70 252.52




Punj Lloyd | 153

March 31, 2016 March 31, 2015

Corporate Guarantees outstanding





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 Solar Power Limited 8.81 7.22

PL Surya Urja Limited 123.70 123.70


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.



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



Punj Lloyd | 155

Currency

March 31, 2016 March 31, 2015


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



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


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


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.



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.



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


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



Repair and maintenance 0.93 0.09



Rent 0.24 0.01


Insurance 1.03 1.68




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.



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





Financials160


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.


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


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.




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.


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



Annexure I to the Independent Auditors’ Report of even date to


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.




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.







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


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.






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)


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



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.





Consolidated Cash Flow Statement for the year ended March 31, 2016


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.




(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



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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




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.


(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.



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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:




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



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




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.



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3. Share capital

As at

March 31, 2016 March 31, 2015

Authorized shares


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


66.42 66.42

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity shares


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.




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




Special reserve (created by an Indian subsidiary under the Reserve Bank of India Act, 1934)


Add: amount transferred from surplus balance in the consolidated statement of profit and loss 0.01 0.00


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



Financials178

5. Long-term borrowings


As at As at


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.


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 – – –





As at As at


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.


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



Financials180


As at As at


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.


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





As at As at


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.


– – 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



Financials182


As at As at


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


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.




# 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


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



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


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


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.




10. Tangible assets


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


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


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


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.



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


At March 31, 2015 78.67 78.67

Additions 0.22 0.22

Disposal (-) 40.03 40.03

Other adjustments


At March 31, 2016 37.90 37.90

Amortization

At April 01, 2014 68.20 68.20


Other adjustments


At March 31, 2015 70.74 70.74


Disposal (-) 38.73 38.73

Other adjustments


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




12. Non-current investments

As at

March 31, 2016 March 31, 2015

Trade investments (valued at cost unless stated otherwise)


Investments in associates


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


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


Non-trade



RFB Latex Limited – –


(At cost less provision for other than temporary diminution in value ` 0.52 crore (Previous year ` 0.52 crore))

Arooshi Enterprises Private Limited – –





Financials188

As at

March 31, 2016 March 31, 2015

Quoted equity instruments


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



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


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


Hindustan Oil Exploration Company Limited 0.03 0.03


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


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




13. Loans and advances

Non-current Current

As at As at



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


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



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



Financials190

17. Cash and bank balances

Non-current Current

As at As at


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


Annuity income 112.00 125.04

Other operating revenue


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




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



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




Insurance 27.06 49.76




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 –


2,507.32 3,649.21

22. Finance costs

Year ended

March 31, 2016 March 31, 2015

Interest 865.18 840.51


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



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


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



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


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.




The principal assumptions used in determining gratuity obligations for the Company and its Indian subsidiaries are shown below:

2015-16 2014-15


Expected rate of return on assets 9.00% 9.00%


Employee turnover

upto age 30 years 15.00% 15.00%

31-44 years 10.00% 10.00%

45 and above 5.00% 5.00%


Mortality rates Indian Assured Lives Mortality (2006-08)

Ultimate


(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



Employee turnover

upto age 30 years 15.00% 15.00%

31-44 years 10.00% 10.00%

45 and above 5.00% 5.00%



(2006-08) Ultimate


(2006-08) Ultimate



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



2015-2016 2014-2015 2015-2016 2014-2015









2015-2016 2014-2015 2015-2016 2014-2015







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 .




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



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 -


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.



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


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.




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:


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.



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 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


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




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)


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)


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



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


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







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:




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 – – –



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



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



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




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



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


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%






liabilities


March 31, 2016

March 31, 2015


net assets


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%



Financials206



liabilities


March 31, 2016

March 31, 2015


net assets


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 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)




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



Interest 2.35 4.15



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





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