a report on financial statement of hindustan construction

7/29/2019 A Report on Financial Statement of Hindustan Construction

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A Report On Financial Statement Of

Hindustan Construction Company



Contents

• Introduction

• Business portfolio

• Operational assets

• Assets under development

• Performance highlights

• Significant accounting policies

• Highlights of 2011-12

• Financial review



Introduction

• Hindustan construction company is one of the

pioneering companies in executing large scale

infrastructure related construction projects in

India

• It has undertaken some of the largest and

most technically challenging projects that

have been part of India’s overall physical

infrastructure.



Operational assets

• Nirmal (NBL) annuity(NH7)

The sole annuity project in the portfolio is a road from Kadtal toArmur which forms a part of the Nagpur-Hyderabad section of NH7.This 33 km development was the first investment by thecompany and wad completed 100 days ahead of schedule

completion.

• Dhule Palesner(DPTL) highway project(NH3)

The project road achieved provisional completion and tollcollection began in february 2012 ,four months ahead of its

contractual completion date



Assets under development

• West Bengal (NH34) highway project

This eagerly waited project being developed

by HCC concessions ltd on a design,finance,

build, operate and transfer (DFBOT) basis is

among the largest PPP projects in west bengal.



Performance Highlights

• HCC had entered 2011-12 with a lower orderbook. While it focused on effective execution,the size and structure of the organisation was

geared for catering to a much largerinfrastructure related construction market.

• The financial highights of HCC’s performance on a

stand alone basis in 2011-12 are

- Order book is at 15336 crores in 2011-12

-revenue from operations is at 4003 crores in2011-12 vs 4144 crores in 2010-11



Significant Accountig Policies

• Basis accounting

The Company maintains its accounts on accrual basis.

Management makes estimates and technical and other

assumptions regarding the amounts of income and expenses inaccordance with Indian GAAP in the preparation of the financial

statements. Difference between the actual results and estimates

are recognised in the period in which they are determined.



• Fixed assets

Fixed assets are stated at cost of acquisitionincluding attributable interest & financial costs till

the date of acquisition/installation of the assetsand improvement thereon less accumulateddepreciation / amortisation and accumulatedimpairment losses if any. Intangible assets

comprise of licence fees , other implementationcost for software (ERP) and other applicationsoftwares acquired for inhouse use.



• Depreciation and amortisation

Depreciation on fixed assets is provided:

I) In respect of buildings and sheds, furniture and

office equipments on the written down value method(pro-rata on additions and deletions of the year) atrates prescribed in Schedule XIV of the Companies Act,1956.

ii) In respect of plant & machinery, heavy vehicles,light vehicles,helicopter, aircraft and speed boat on thestraight line method at rates prescribed in scheduleXIV of the Companies Act, 1956 on a pro-rata basis.



• Employee benefits

i) Defined Contribution plan

Contribution to provident fund and

superannuation fund is accounted on accrualbasis.

ii) Defined Benefit plan

Gratuity is charged to revenue on the basis of

actuarial valuation and in case of daily ratedworkmen on actual basis computed on tenure of service as at the end of the year.



• Inventories

a) The stock of stores, spares and embedded goods andfuel is valued at cost (weighted average basis), or netrealisable value whichever is lower.

b) Work-in-Progress is valued at the contract rates andsite mobilisation expenditure of incomplete contractsis stated at cost.

c) Certain loose plant, tools & service equipmentscosting below ` 5 lacs are valued at proportionatewritten down value @ 3% p.m. over a period of 32months.



• Borrowing costs

Borrowing costs that are attributable to

the acquisition, construction or production of

a qualifying asset are capitalised as a part of

the cost of such asset. Other borrowings costs

are charged to statement of profit and loss as

incurred.



Highlights of 2011-12

• Group turnover at ` 8,157 crore, increased by14%.

• HCC Standalone Turnover at ` 4,003 crore.

•

HCC E&C Orderbook at ` 15,336 crore.• HCC Infrastructure raised ` 240 crore by divesting

14.5% equity stake in HCC Concessions to TheXander Group at a valuation of ` 1,650 crore .

•

HCC Infrastructure’s Dhule Palesner HighwayProject commenced operations in February 2012four months ahead of schedule



Financial review



Conclusion

• In difficult business environment ,HCC hasutilised 2011-12 to re calibrate its businessenvironment.

• Eventhough the profits were less compared to2010-11 HCC has laid an emphasis onresearching the market to identify the projectsthat are most suitable for the company.

• The turnover has decreased from 4144 cr in2010-11 to 4003 cr in 2011-12.

a report on financial statement of hindustan construction

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