hindustan dorr-oliver limited 41st annual ... hindustan dorr oliver limited 41st annual report...

41st ANNUAL REPORT2015-2016

HINDUSTAN DORR-OLIVER LIMITED

1

HINDUSTAN DORR OLIVER LIMITED

41st ANNUAL REPORT 2015-2016

Board of Directors

Mr. Prabhakar Ram Tripathi Chairman

Mr. E Sudhir Reddy Vice Chairman

Mr. S C Sekaran Executive Director

Mr. R Balarami Reddy Non-Executive Director

Mr. Ramendra Gupta Independent Director

Mrs. M Hima Bindu Independent Director

Mr. Vivek Wahi Nominee Director (w.e.f. 28.04.2016)

Chief Financial Officer

Mr. S C Mundhekar

Company Secretary

Mr. G Rama Krishna

Auditors

M/s Chaturvedi & PartnersChartered Accountants212A, Chiranjeev Towers, 43,Nehru Place, New Delhi – 110 019.

Internal Auditors

M/s Dipan Patel & AssociatesChartered Accountants,704, Sai Rath CHS, Kesar Kunj Building,Telly Gully Cross Lane,Near Vihar Punjab Hotel,Andheri (E), Mumbai – 400069.

Bankers

Bank of IndiaAndhra BankICICI BankStandard Chartered Bank

Registrar and Transfer Agents

M/s Karvy Computershare Private LimitedKarvy Selenium, Tower-B, Plot No.31-32,Financial District, Nanakramguda,Serilingampally MandalHyderabad – 500 032. India

Registered Office

Dorr-Oliver House,Chakala, Andheri (East), Mumbai – 400099.Tel: 91-22-2835 9400 Fax: 91-22-2835 5659Email: [email protected]

Solicitors & Advocates

Little & Co.Pandya & Co.

Contents ......................................................... Page No.

Financial Highlights ..................................................... 2

Performance Indicators ............................................... 3

Notice of AGM ............................................................... 4

Directors' Report ......................................................... 11

Management Discussion and Analysis .................... 25

Corporate Governance Report .................................. 35

Auditors’ Report ......................................................... 44

Balance Sheet ............................................................ 52

Statement of Profit and Loss ..................................... 53

Cash Flow Statement ................................................ 54

Notes to Financial Statements .................................. 56

Consolidated Financial Statements .......................... 78

Subsidiary Companies:Financial Highlights 2015-16 .110

Annual General Meeting will be held on Saturday,September 24, 2016 at 3.00 P.M. at the Registered Officeof the Company at Dorr Oliver House, Chakala, Andheri(E), Mumbai – 400099. As a measure of economy, copiesof the Annual Report will not be distributed at the AnnualGeneral Meeting. Members are requested to kindly bringtheir copies to the meeting.

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Stand-alone financial performance at a glance (ì in million)

Particulars 2016 2015 2014 2013* 2012$

Gross Income 2,093.03 3,639.84 2,768.21 2,437.39 7,293.05

Excise Duty - - - - -

Net Income 2,093.03 3,639.84 2,768.21 2,437.39 7,293.05

Cost of Sales 2,378.19 7,141.54 3,316.79 3,006.13 7,200.16

EBIDTA (285.16) (3,501.70) (548.58) (568.74) 92.89

EBDT (1,612.99) (4,607.18) (1,351.65) (1,001.95) (421.09)

EBIT (291.16) (3,513.31) (571.24) (588.80) 51.15

Profit/(Loss) before tax and exceptional items (1,618.99) (4,618.79) (1,374.31) (1,022.01) (462.83)

Exceptional items - 2,011.16 - 763.05 -

Profit/(Loss) before tax (1,618.99) (6,629.95) (1,374.31) (1,785.06) (462.83)

Tax 13.63 1,101.60 (359.27) (575.63) (159.51)

Profit/(Loss) after taxation (1,632.62) (7,731.55) (1,015.04) (1,209.43) (303.32)

Equity 144.01 144.01 144.01 144.01 144.01

Reserve & Surplus (8,942.73) (7,310.11) 422.33 531.70 1,741.13

Net Worth (8,798.72) (7,166.10) 566.34 675.71 1,885.14

Gross Block 1,420.73 1,420.73 1,425.66 515.28 517.01

Net Block 1,106.79 1,112.51 1,128.43 240.71 258.00

Market capitalisation@ 759.66 1,126.89 558.05 1,008.08 2,579.97

Dividend - - - - -

Retained Profit (1,632.62) (7,731.55) (1,015.04) (1,209.43) (303.32)

EPS (22.67) (107.37) (14.10) (16.80) (4.21)

DPS - - - - -

* Result are for nine months period starting from July 01, 2012 to March 31, 2013.

$ Result are for fifteen months period starting from April 01, 2011 to June 30, 2012.

@ Based on year end closing prices, quoted on the Bombay Stock Exchange.

FIVE YEARS AT A GLANCE

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PERFORMANCE INDICATORS

7,293

2,437

2,768

3,639

2,093

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012 2013 2014 2015 2016

NET INCOME

Rs.

mil

lio

n

(463)

(1,785)

(1,374)

(6,630)

(1,619)

(7,000)

(6,000)

(5,000)

(4,000)

(3,000)

(2,000)

(1,000)

-

2012 2013 2014 2015 2016

PROFIT BEFORE TAX

Rs.

mil

lio

n

1,885

676 566

(7,166)

(8,799)(10,000)

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,000

2012 2013 2014 2015 2016

NET WORTH

Rs.

mil

lio

n

93

(569) (549)

(3,502)

(285)

(4,000)

(3,500)

(3,000)

(2,500)

(2,000)

(1,500)

(1,000)

(500)

-

500

2012 2013 2014 2015 2016

EBIDTA

Rs.

mil

lio

n

(303)(1,209) (1,015)

(7,732)

(1,633)

(9,000)

(8,000)

(7,000)

(6,000)

(5,000)

(4,000)

(3,000)

(2,000)

(1,000)

-

2012 2013 2014 2015 2016

PROFIT AFTER TAXR

s.

mil

lio

n

1.74

(19.18)

(28.53)

(56.32)

(3.06)

(60.00)

(50.00)

(40.00)

(30.00)

(20.00)

(10.00)

-

10.00

2012 2013 2014 2015 2016

RETURN ON CAPITAL EMPLOYED (%)

Pe

rc

en

tag

e

4

NOTICE is hereby given that the 41st Annual General Meeting of the Members of Hindustan Dorr-Oliver Limited (CIN No:L74210MH1974PLC017644) will be held on Saturday, the September 24, 2016 at 3.00 P.M. at the Registered Office of thecompany at Dorr Oliver House, Chakala, Andheri (East), Mumbai – 400 099, Maharashtra to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited Balance Sheet as at March 31, 2016 and the Profit and Loss Account for theyear ended on that date together with the reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. S C Sekaran (DIN: 00334115), who retires by rotation and, being eligible, offershimself for re-appointment.

3. To ratify the appointment of M/s. Chaturvedi & Partners, Chartered Accountants as Statutory Auditors

To consider and if thought fit, pass the following resolution, as an Ordinary Resolution, with or without modification(s).

“RESOLVED THAT pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made thereunder,and pursuant to the recommendations of the Audit Committee of the Board of Directors, M/s Chaturvedi & Partners,Chartered Accountants (Registration No.307068E) be and are hereby re-appointed as the Statutory Auditors of theCompany, to hold office from the conclusion of this AGM upto the conclusion of the next AGM (subject to ratification of theappointment by the members at every AGM held after this AGM) and the Board of Directors, be and are hereby authorizedto fix such remuneration as may be determined by the Audit Committee in consultation with the Auditors”.

SPECIAL BUSINESS:

4. Re-appointment of Mr. S. C. Sekaran as Executive Director

To consider and if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196,197 and 203 read with Schedule V and other applicableprovisions if any, of the Companies Act 2013, the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014 (including any statutory modification(s) or enactment thereof for the time being in force) and subject toapproval of the Central Government, if required and such other approvals as may be required and upon recommendationof Nomination and Remuneration Committee of the board, the consent of the Members of the Company be and ishereby accorded for the re-appointment of Mr. S C Sekaran (DIN: 00334115) in the capacity of Whole time Directordesignated as Executive Director for a period of 5 (five) years w.e.f June 01, 2016 at the remuneration, for a period of 3(three) years, from June 01, 2016 to May 31, 2019, as detailed hereunder.

1) Basic Salary : ì 1,82,250/- per month

2) Perquisites and Allowances:

i. Special Allowances : ì 1,60,350/- per month

ii. Ex-gratia payment twenty percent of the basic salary.

iii. Leave travel assistance for self and family not exceeding one month’s basic salary.

iv. Medical reimbursement for self and family not exceeding one month’s basic salary.

v. Monthly/Yearly subscription for Club Membership.

vi. Use of cellular phone.

3) Contribution towards provident fund, Superannuation and Gratuity benefits in accordance with the Company’srules.

4) Use of Company maintained Car.

5) Encashment of leave as per the rules of the company.

6) Furnished accommodation for residence.

7) Any other perquisites as per rules of the Company

“RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to vary, alter, increase, enhance, orwiden the scope of remuneration and perquisites payable to Mr. S C Sekaran (DIN: 00334115) during his tenure, to theextent specified in Schedule V and other applicable provisions, if any, of the Companies Act, 2013, without beingrequired to seek any further consent or approval of the members or otherwise to the end and intent that they shall bedeemed to have given their approval thereto expressly by the authority of this resolution”.

NOTICE TO MEMBERS

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“RESOLVED FURTHER THAT the Board of Directors of the company be and are hereby authorized to do all such acts,deeds, matters and things as it may, in its absolute discretion deem necessary, proper or desirable including makingof an application to Central Government or such other regulatory authorities, if required, to give effect to this resolution”.

By Order of the Board of DirectorsFor Hindustan Dorr Oliver Limited

G Rama KrishnaCompany Secretary

Registered Office:‘Dorr-Oliver House’,Chakala, Andheri (East)Mumbai – 400 099

May 30, 2016

NOTES:

1. Explanatory Statement pursuant to provisions of Section 102 of the Companies Act, 2013 for the resolution at items No . 4 isgiven below. The relevant details, as required under Regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015. (LODR), of the person seeking re-appointment as Executive Director is annexed.

2. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attendand vote on a poll instead of himself / herself and the proxy need not be a member of the Company. The instrumentappointing the proxy, in order to be effective, should reach the registered office of the Company at least 48 hours beforethe time of the meeting. A Proxy Form for the AGM is enclosed.

3. Corporate Members intending to send their authorized representative(s) to attend the meeting are requested to send acertified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the meeting.

4. Members are requested to notify immediately any change of address or bank mandates to their depository Participants(DPs) in respect of their holdings in electronic form and to the Registrars of the Company i.e. Karvy ComputersharePrivate Ltd in respect of their physical share folios, if any.

5. The Register of Members and Share Transfer Books of the Company will be closed from September 19, 2016 toSeptember 24, 2016 (both days inclusive).

6. Retirement of Directors by Rotation

Pursuant to provisions of Section 152 of the Act, certain numbers of Directors have to retire at every AGM. AccordinglyMr. S C Sekaran’s office is liable to retire by rotation at the forthcoming AGM and being eligible, offers himself forre-appointment. The Board of Directors recommend the re-appointment of Mr. S C Sekaran as a Director liable to retireby rotation. The relevant details of Director seeking re-appointment under Item No.2 above, pursuant to Clause 49 VIA ofthe Listing Agreement entered into with the Stock Exchanges are as follows:

a) Name Mr. S C Sekaran

b) Brief Resume

(i) Date of Birth June 01, 1955

(ii) Qualification Masters in Statistics

(iii) Date of Appointment on the Board of the Company September 08, 2005

c) Nature of expertise in specific functional areas Business Administration, Project Operations andPlanning and control

d) Name(s) of other Companies in which Directorships held HDO Technologiess Limited

Sudhesha Infra & Trade Private Limited

Sofcon HDOT Engineers (P) Limited

DavyMarkham India Private Limited

e) Name(s) of companies in which Committee Hindustan Dorr Oliver LimitedMembership(s) / Chairmanship(s) held * Member – Stakeholders’ Relationship Committee

f) No. of shares of @ ì 2/- each held by the Director NIL

7. The Notice of the AGM along with the Annual Report 2015-2016 is being sent by electronic mode to those memberswhose e-mail addresses are registered with the Company/Depository Participant, unless any Member has requestedfor a physical copy of the same. For Members who have not registered their e-mail addresses, physical copies are beingsent by the permitted mode.

NOTICE TO MEMBERS (Contd.)

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8. To support the ‘Green Initiative’, the Members who have not registered their e-mail addresses are requested to registerthe same with your Depository Participant(s).

9. Shareholders seeking any information with regard to accounts are requested to write to the Company Secretary at anearly date so as to enable the management to keep the information ready.

10. Members attending the Meeting are requested to complete and bring the attendance slip along with Annual Report to themeeting.

11. The Register of Directors’ and Key Managerial Personnel and their shareholding maintained under Section 170 of theCompanies Act, 2013, the Register of contracts or arrangements in which the Directors are interested under Section189 of the Companies Act, 2013, will be available for inspection by the members at the AGM.

12. All documents referred to in the accompanying Notice are open for inspection by the members at the Registered officeof the Company on all working days except Saturdays, during business hours, upto the date of the Annual GeneralMeeting.

13. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number(PAN) by every participant in securities market. Shareholders holding shares in electronic form, therefore, requested tosubmit their PAN to their Depository Participants with whom they are maintaining their demat accounts. Shareholdersholding shares in physical form may submit their PAN details to the Company/P and T Agent.

14. Pursuant to the provisions of Section 124 of the Companies Act, 2013 as amended, read with the Investor Education andProtection Fund (Awareness and Protection of Investors) Rules 2001, dividend which remains unpaid or unclaimed fora period of 7(seven) years will be transferred to the Investor Education and Protection Fund. Accordingly dividenddeclared for financial year 2008-2009 will be transferred to IEPF in the current financial year 2016-2017. Shareholders/ Investors who have not encashed the dividend warrant(s) so far are requested to make their claim by specifying theirFolio No./ DP ID and Client ID to the Karvy Computershare Private Limited, RTA. Shareholders are requested to pleasenote that once the unclaimed dividend is transferred to the Investor Education and Protection Fund as above, no claimshall lie in respect thereof, under the provisions of Section 125 of the Companies Act, 2013 and the Rules madethereunder.

15. Members holding shares in single name and physical form are advised to make nomination in respect of their shareholdingin the Company.

16. Non-Resident Indian Members are requested to inform Karvy, immediately of:

(a) Change in their residential status on return to India for permanent settlement.

(b) Particulars of their bank account maintained in India with complete name, branch, account type, account numberand address of the bank with pin code number, if not furnished earlier.

17. Pursuant to Section 108 of the Companies Act, 2013, read with the relevant Rules of the Act, the Company is pleased toprovide the facility to Members to exercise their right to vote by electronic means. The Members, whose names appearin the Register of Members/list of Beneficial Owners as on September 18, 2016 i.e. the date prior to the commencementof book closure date are entitled to vote on the Resolutions set forth in this Notice. The remote e-voting period willcommence at 9.00 a.m. on Wednesday, September 21, 2016 and will end at 5.00 p.m. on Friday, September 23, 2016.The facility for voting through electronic voting system (“Insta Poll”) shall be made available at the meeting and themembers attending the meeting who have not cast their vote by remote e-voting shall be able to vote at the meetingthrough “Insta Poll”. The Company has appointed Mr. K Narasimhulu, Practising Company Secretary, to act as theScrutinizer, to scrtunize the Insta Poll and remote e-voting process in a fair and transparent manner. The Membersdesiring to vote through e-voting refer to the detailed procedure given hereinafter.

Procedure for remote e-voting:

I. The Company has engaged the services of Karvy Computershare Private Limited (Karvy) for facilitating remote e-votingfor AGM. The instructions for remote e-voting are as under:

(a) In case of Members receiving an e-mail from Karvy :

(i) Launch an internet browser and open https://evoting.karvy.com

(ii) Enter the login credentials (i.e. User ID and password). The Event No.+Folio No. or DP ID- Client ID will be yourUser ID. However, if you are already registered with Karvy for e-voting, you can use your existing User ID andpassword for casting your vote.

(iii) After entering the above details Click on - Login.

(iv) Password change menu will appear. Change the Password with a new Password of your choice. The newpassword shall comprise minimum 8 characters with at least one upper case (A-Z), one lower case (a-z), onenumeric (0-9) and a special character (@,#,$,etc.) The system will also prompt you to update your contactdetails like mobile number, email ID, etc. on first login. You may also enter a secret question and answer of yourchoice to retrieve your password in case you forget it. It is strongly recommended that you do not share yourpassword with any other person and that you take utmost care to keep your password confidential. You need tologin again with the new credentials.


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(v) On successful login, the system will prompt you to select the E-Voting Event

(vi) Select the EVENT of Hindustan Dorr-Oliver Limited and click on - Submit.

(vii) Now you are ready for e-voting as ‘Cast Vote’ page opens.

(viii) Cast your vote by selecting appropriate option and click on ‘Submit’. Click on ‘OK’ when prompted.

(ix) Upon confirmation, the message ‘Vote cast successfully’ will be displayed.

(x) Once you have voted on the resolution, you will not be allowed to modify your vote.

(xi) Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority Letter, along with attested specimen signature of theduly authorised signatory(ies) who are authorised to vote, to the Scrutinizer by an e-mail [email protected] they may also upload the same in the e-voting module in their login. The scannedimage of the above mentioned documents should be in the naming format “Corporate Name_EVENT NO.”

(b) In case of Shareholders receiving physical copy of the Notice of AGM and Attendance Slip:

(i) Initial Password is provided, as follows, at the bottom of the Attendance Slip.

EVEN (E-Voting Event Number) USER ID PASSWORD

— — —

(ii) Please follow all steps from Sr. No. (i) to Sr. No. (xi) above, to cast vote.

II. In case of any queries, you may refer to the ‘Frequently Asked Questions’ (FAQs) and ‘e-voting user manual’ available indownloads section of Karvy’s e-voting website https://evoting.karvy.com.

III. If you are already registered with Karvy for e-voting then you can use your existing User ID and Password for casting vote.

IV. The voting rights shall be as per the number of equity shares held by the Member(s) as on 18th September, 2016.Members are eligible to cast vote electronically only if they are holding shares as on that date.

V. The Companies (Management and Administration) Amendment Rules, 2015 provides that the electronic voting periodshall close at 5.00 p.m. on the date preceding the date of AGM. Accordingly, the voting period shall commence at 9.00a.m. on Wednesday, September 21, 2016 and will end at 5.00 p.m. on Friday, September 23, 2016. The e-voting moduleshall be disabled by Karvy at 5.00 p.m. on the same day.

VI. Once the vote on a resolution is caste by a member, the member shall not be allowed to change it subsequently.

VII. The members who have caste their vote by remote e-voting may also attend the meeting but shall not be entitled to casttheir vote again.

VIII. Members who have acquired shares after the despatch of the Annual Report and before the book closure may obtain theuser ID by approaching the Company for issuance of the User ID and Password for exercising their right to vote byelectronic means.

a. If e-mail or mobile number of the member is registered against Folio No. / DP ID Client ID, then on the home pageof https://evoting.karvy.com, the member may click “forgot password” and enter Folio No. or DP ID Client ID and PANto generate a password.

b. Member may call Karvy’s toll free number 1-800-3454-001

c. Member may send an e-mail request to [email protected]

The results declared along with the Scrutinizers Report shall be placed on the Companies website: www.hdo.in and onthe website of Karvy: https://evoting.karvy.com, within two days of the passing of the resolutions at the 41st AnnualGeneral Meeting of the Company on September 24, 2016 and shall also be communicated to the Bombay StockExchange Limited and the National Stock Exchange of India Limited.

By Order of the Board of DirectorsFor Hindustan Dorr Oliver Limited

G Rama KrishnaCompany Secretary

Registered Office:‘Dorr-Oliver House’,Chakala , Andheri (East)Mumbai – 400 099

May 30, 2016


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EXPLANATORY STATEMENT(Pursuant to provisions of Section 102 of the Companies Act, 2013)

Item No: 4

Re-appointment of Mr. S C Sekaran as Executive Director

The Board of Directors of the Company (“the Board”) at its meeting held on May 30, 2016 based on the recommendation of

the Nomination and Remuneration Committee and subject to the approval of the members, accorded their approval for re-

appointment of Mr. S C Sekaran, as Executive Director (DIN:00334115) for a further period of 5 (five) years with effect from

June 01, 2016 on the same terms of remuneration which he is presently drawing and which was approved by the Members

of the Company at the Annual General Meetings held on December 29, 2012.

The broad particulars of remuneration proposed to be paid to the said Executive Director during his term of Office are as

under:

1) Basic Salary : ì 1,82,250/- per month

2) Perquisites and Allowances:

i. Special Allowances : ì 1,60,350/- per month

ii. Ex-gratia payment twenty percent of the basic salary.

iii. Leave travel assistance for self and family not exceeding one month’s basic salary.

iv. Medical reimbursement for self and family not exceeding one month’s basic salary.

v. Monthly/Yearly subscription for Club Membership.

vi. Use of cellular phone.

3) Contribution towards provident fund, Superannuation and Gratuity benefits in accordance with the Company’s rules.

4) Use of Company maintained Car.

5) Encashment of leave as per the rules of the company.

6) Furnished accommodation for residence.

7) Any other perquisites as per rules of the Company

The approval of the members is being sought to the terms, conditions and stipulations as set out in the resolution at item

No.4 of the Notice, for the re-appointment of Mr. S C Sekaran as an Executive Director and subject to the approval of Central

Government, as may be required.

Memorandum of Interest:

None of the Directors or Key Managerial Personnel of the Company and their relatives, other than Mr. S C Sekaran and his

relatives, is concerned or interested, in the Resolution set out at Item no.4.

The Board recommends the resolution as set out at item no. 4 of the Notice for approval of the Members.

By Order of the Board of Directors

For Hindustan Dorr Oliver Limited

G Rama Krishna

Company Secretary

Registered Office:

‘Dorr-Oliver House’,

Chakala , Andheri (East)

Mumbai – 400 099

May 30, 2016


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Statement in terms of sub-clause (iv) of the proviso to Sub- paragraph (C ) of Paragraph (I) of Section II of Part II ofSchedule V of the Companies Act, 2013:

I. GENERAL INFORMATION

1 Nature of the industry Engineering and construction

2 Date or expected date of commencementof commercial production Not applicable

3 In case of new companies, expected date ofcommencement of activities as per projectapproved by financial institutions appearingin the prospectus Not applicable

4 Financial performance based on given Indicators ì in million

Particulars Years

2015-2016 2014-2015

Revenue 2,093.03 3,639.84

Profit/ before tax (1,618.99) (6,629.95)

Profit after tax (1,632.62) (7,731.55)

5 Foreign investments or collaborations, if Any The total equity shares held by Foreign Institutional Investors(FIIs), Foreign Portfolio Investors and Global Depositoryshares(GDS) holders is 2,75,000 equity shares of ì 2/- eachwhich constitutes 0.38 percent of the paid up equity sharecapital of the company.

II. INFORMATION ABOUT MR.S.C.SEKARAN

(1) Background Details

Mr. S C Sekaran is aged 61 years and has a Master Degree in Statistics. He has rich experience of more than twodecades in the Industry. He was appointed as Director of the Board on September 08, 2005. He was re-appointedas Executive Director from June 01, 2011 for a further period of five years.

(2) Past Remuneration

1) Salary : ì 3,42,600/- per month

(Basic Salary: ì 1,82,250/- p.m. and Allowance – ì 1,60,350/-).

2) Leave Travel Assistance at the rate of one month’s basic salary per annum.

3) Reimbursement of medical expenses at the rate of one month’s basic salary per annum.

4) Provident Fund at the rate of 12 percent of basic salary.

5) Super-annuation benefits equivalent to one month’s basic salary per annum at the discretion of theCompensation Committee of the Board of Directors.

6) Gratuity as per rules of the Company.

7) Free telephone facility at residence and mobile phone but personal long distance calls will be billed to theappointee

8) Provision of Car in accordance with the Employee Car Scheme formulated by the Compensation Committeeand as amended from time to time.

(3) Recognition / Awards: NIL

(4) Job Profile and Suitability:

Mr. S C Sekaran has been one of the instrumental persons in the Company’s growth over the past few years.


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(5) Remuneration paid / proposed

Details of the total remuneration comprising inter alia, Salary and Perquisites and Allowances together with Retiralsand other benefits / perquisites which is paid / proposed during the remaining tenure for Mr. S C Sekaran have beenfully set out in the Resolution at item No. 4.

(6) Comparative remuneration profile with respect to industry, size of the company, profile of the position andperson

Mr. S C Sekaran is a professional in management having about 36 years of experience including 11 years with theCompany. In the difficult times, like the one the company is experiencing, it is necessary to retain the existingpersonnel. He is pursuing with the Bankers for release of working capital and other facilities and also striving hardto get new investors. The salary proposed is reasonable keeping in view the industry norms, size of the Company,profile and position of the person.

(7) Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, ifany

Mr. S C Sekaran is not related to any managerial personnel in the Company. He does not have any other pecuniaryrelationship, directly or indirectly with the Company or with any managerial personnel.

III. OTHER INFORMATION

(1) Reasons of loss or inadequacy of profits.

The company continues to witness sluggish business condition due to economic and policy concerns. The financialcost has been quite high and no new order is bagged by the Company, which has resulted in huge losses andnegative networth.

(2) Steps taken or proposed to be taken.

The Company has taken view of all the factors seriously and to overcome the challenges the Company hasundertaken the following steps directed at improving its operational efficiencies:

Claims realisation, Capex Control, Cost optimisation, Reduction in Working Capital and Monetisation of Assets.

(3) Expected increase in productivity and profits in measurable terms.

Eventhough, the revenue and loss position remained dismal in FY 2016, the situation is expected to improve in theensuing Financial Year if fresh investment is made into the company and get new business going forward.

IV. DISCLOSURES.

(i) All elements of remuneration package: The details have been made in the Corporate Governance Report for theperiod ending March 31, 2016.

(ii) Details of fixed component and performance linked incentives along with performance criteria: The details havebeen made in the Corporate Governance Report for the period ending March 31, 2016.

(iii) Service contracts, Notice period, Severance fees: NIL

(iv) Stock Option details: NIL


11

DIRECTORS’ REPORT

To,The members

Your Directors take pleasure in presenting the 41st Annual Report together with the Audited Financial Statements for thefinancial year ended March 31, 2016.

Financial Results

The financial performance of the Company for the year ended March 31, 2016 is summarised below:

(ì in million)

Particulars For the For theyear ended year ended

March 31, 2016 March 31, 2015

Net Sales 2053.82 3483.02

Other Income 39.21 156.82

Total Income 2093.03 3639.84

Profit/(Loss) from Ordinary Activities (1618.99) (4618.79)

Exceptional Item - 2011.16

Profit/(Loss) after Exceptional Items (1618.99) (6629.95)

Provision for taxation 13.63 1101.60

Profit/ (Loss) after taxation (1632.62) (7731.55)

Balance brought forward from previous year (9410.61) (1678.17)

Depreciation adjustment - (0.89)

Balance available for appropriation (11043.23) (9410.61)

Retained Profits carried forward to Balance Sheet (11043.23) (9410.61)

DIVIDEND

In view of the loss incurred by the Company, your Directors regret and express their inability to recommend dividend for thefinancial year ended March 31, 2016.

PERFORMANCE

Your Company achieved a gross turnover of ì 2,053.82 million for the year ended March 31, 2016 as against ì 3,483.02million for the previous year ended March 31, 2015. On an annualised basis, turnover for the current year ended March 31,2016 decreased by 41.03 percent as compared to the previous period.

FUTURE OUTLOOK

The Government of India has started taking several remedial measures for the infrastructure and engineering sector whichare facing acute finance and business related problems. Your Directors are hopeful that they will be able to get newinvestments into the company and revive the business.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2016 was ì 144.01 million. During the year under review the Company hasnot issued any shares or any convertible instruments.

SUBSIDIARIES

The Consolidated Financial Statements prepared by the Company include the financial information of subsidiary companies,namely HDO Technologies Limited and DavyMarkham India Private Limited.

Pursuant to Section 136(1) of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documentsof the said subsidiary companies are required to be annexed to the accounts of the holding Company. The Companies Act,2013 had granted general exemption for listed companies from complying with the provisions of section 136 of the CompaniesAct, 2013 subject to certain conditions being fulfilled by the Company. Accordingly, the Balance Sheet, Profit and loss accountand other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Astatement containing the brief details of financials of subsidiary companies for the year ended March 31, 2016 is enclosedin the Annual Report. The annual accounts of the said subsidiary companies and relevant information shall be madeavailable to the shareholders who seek such information and are also available for inspection by any shareholder at the

12

DIRECTORS’ REPORT (Contd.)

Registered Office of the Company, on any working day during business hours. Copy of the said details will be provided uponreceipt of written request from the shareholders.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015, Consolidated Financial Statements of the Company prepared in accordance withAccounting Standards issued by Institute of Chartered Accountants of India, are attached and forms part of the AnnualReport.

PUBLIC DEPOSITS

The Company did not accept any deposits from public during the year. There are no unclaimed deposits as on March 31,2016.

CORPORATE GOVERNANCE

Your Company is committed to adhere to the standards of Corporate Governance as set out by the SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015 (SEBI LODR Regulations). Detailed Report on Corporate Governanceas stipulated under Schedule V of SEBI LODR Regulations is provided under separate section and forms part of this Report.

The requisite certificate from Practicing Company Secretaries, confirming the compliance of the conditions stipulated underSEBI LODR Regulations is attached to the Report on Corporate Governance.

TRANSFER OF UNCLAIMED / UNPAID AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend relating to the financial year 2008-2009 is due for remittance to the Investor Education and Protection Fund established by the Central Government in themonth of October, 2016.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 the Report on ManagementDiscussion and Analysis is annexed to this report and forms part of the Annual Report.

BOARD OF DIRECTORS

Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr. S C Sekaran (DIN: 00334115), Executive Directorretires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

During the year under review, Mr. Vivek Wahi was appointed as Nominee Director on behalf of Bank of India w.e.f. April 28,2016.

All the Independent Directors of the company have given declarations to the Company that they meet the criteria ofindependence as specified under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transaction withthe Company other than sitting fee for attending the Board and Committee meetings.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of your Company are Mr. S C Sekaran, Executive Director, Mr. S C Mundhekar, Chief FinancialOfficer and Mr. G Ramakrishna, Company Secretary.

MEETINGS

During the financial year under review, four Board Meetings and one independent directors’ meeting was held. The detailsof which are given in Corporate Governance Report.The provisions ofCompanies Act, 2013 and listing agreement wereadhered to while considering the time gap between two meetings.

BOARD COMMITTEES

The Board has constituted various committees viz Audit Committee, Nomination and Remuneration Committee, StakeholdersRelationship Committee and Executive Committee etc., to enable better management of the affairs of the Company, withterms of reference in line with provisions of Companies Act, 2013 and SEBI LODR Regulations. The details of compositionof the committees are disclosed in Corporate Governance Report, which forms part of this report.

13


BOARD EVALUATION

Pursuant to provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations2015, the Nomination and Remuneration Committee laid down the criteria for performance evaluation of the IndividualDirectors, the Board and its Committees. Accordingly, the Board of Directors has carried out an annual evaluation of its ownperformance, its committees and individual directors.

The performance of the Board was evaluated through a structured questionnaire which provides a powerful and valuablefeedback for improving the board effectiveness, maximizing strengths and highlighting areas for further development.

The performance of the Committees was evaluated by the Board through a structured questionnaire, by considering theeffective recommendations made by the Committees, from time to time, to the Board of the Directors of the Company andeffectiveness of Committee meetings etc.

The Board evaluated the performance of the individual directors by considering the contribution of the individual directors tothe Board and Committee meetings, preparedness on the issues to be discussed, meaningful and constructive contributionand inputs in meetings, relationship with fellow board members, willing to devote time and effort to understand the Companyand its business etc through a structured questionnaire.

As per Schedule IV of the Act, Independent Directors of the Company at a separate meeting, evaluated the performance ofnon-independent directors, the Board as a whole and the Chairman of the company taking into account the views ofexecutive and non-executive directors. Independent Directors also reviewed the quality, quantity and timeliness of flow ofinformation between management of the Company and the Board, for the effective performance of the board. Evaluation ofperformance of Independent Directors was done by the entire board, excluding the independent director being evaluated.

VIGIL MECHANISM

Your Company has established a Vigil Mechanism policy for your Directors and employees to safeguard against victimizationof persons who use vigil mechanism and report genuine concerns. The Audit Committee shall oversee the vigil mechanism.

STATUTORY AUDITORS

M/s Chaturvedi & Partners, Chartered Accountants, New Delhi, were appointed as Statutory Auditors of the Company, to holdoffice until the conclusion of the ensuing Annual General Meeting for the financial year 2016-2017, pursuant to the approvalof the members at the 41st Annual General Meeting.

It is proposed to ratify their appointment as Statutory Auditors for the financial year 2016-2017 at the ensuing Annual GeneralMeeting.

INTERNAL AUDITORS

During the year under review, M/s Dipan Patel & Associates, Chartered Accountants were appointed as Internal Auditors ofthe Company in place of M/s. VCG & Co., Chartered Accountants and they monitor the internal control system of the Companyat its works and at the Mumbai office. Theinternal auditor of thecompany checks and verifies the internal control and monitorsthem in accordance with policy adopted by the company. Even throughthis non-production period the Company continues toensure proper and adequate systems and procedures commensurate with its size and nature of its business.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remunerationof Managerial Personnel) Rules, 2014, your Company had appointed Mr. K Narasimhulu, Company Secretary in Practice toundertake the Secretarial Audit of your Company. The Secretarial Audit Report for the financial year 2015-2016 forms part ofthe Annual Report as Annexure “A” to the Board’s Report.

The Secretarial Audit Report does not contain any adverse remarks or qualifications.

SIGNIFICANT AND MATERIAL ORDERS

Certain Creditors have filed winding up petitions against the Company under Section 433 and Section 439 of the CompaniesAct, 1956, before the Hon’ble High Court of Mumbai. The Company is taking necessary steps including signing ofMemorandum of Understandings and or filing the consent terms in the High Court with the creditors for withdrawal of suchpetitions. The matter is sub judice and outcome of which is subject to the company fulfilling the payment conditions ofMemorandum of Understandings/consent terms.

14


EXPLANATION TO STATUTORY AUDITORS QUALIFICATIONS IN INDEPENDENT AUDITORS’ REPORT FOR 2015-2016:

With reference to observations made in Auditor’s report, the notes of account is self-explanatory and therefore do not call forany further comments. The results for the year ended March 31, 2016 have been subjected to an audit by the Statutory Auditorsof the Company and a qualified report has been issued by them thereon.

1. With respect to Company’s ability to continue as going concern.

The group is confident of implementing the business plan and meeting its obligations in due course of time. Accordinglyfinancial statements have been prepared as a Going Concern.

2. With respect to material uncertainties over the realisability of bank guarantees encashed by the customers , unbilledrevenue, trade receivables etc.

The management of the Company is confident of positive outcome of the negotiations and recovering the aforesaiddues.

3. With respect of invocation of corporate guarantee executed for one of our subsidiary and initiation of recovery actionsagainst the company.

The management is in engagement with the lender to resolve the matter and the respective liability is appearing in thebooks of subsidiary Company.

4. With respect to provision for diminution/bad debts in the value of investment/advances inour Indian subsidiary.

Considering the long term investment, no provision for diminution/bad debts in value of investment/advances is considerednecessary by the management.

5. With respect to trade receivables and unbilled revenue of certain projects

The management of the Company is in continuous engagement with respective contractee/clients including initiation oflegal proceedings confident of positive outcome of the negotiations and recovering the aforesaid dues.

6. With respect to one lender initiated recovery proceedings against the company.

The company is in process of reconciling the difference.

7. With respect to the non-availability of confirmation of balances from trade receivables/trade payables and one of thelender.

The management is of the opinion that these accounts will not require any material adjustment upon receipt of balanceconfirmation.

RELATED PARTY TRANSACTIONS

As per the requirement of provisions of the Act and SEBI (Listing Obligations and Disclosures Requirements) Regulations2015, the Company has formulated a policy on Related party transactions to ensure the transparency in transactionsbetween the company and related parties. The said RTP Policy is also available at Company’s website/www.hdo.in.

All Related Party Transactions entered by the Company during the year under review were in ordinary course of business andon Arm’s length basis. There were no materially significant related party transactions entered by the company during yearunder review.

Since all the related party transactions entered into by the Company, were in ordinary course of business and were on Arm’slength basis, disclosure in form AOC-2 as required under Section 134(3)(h) of the Act is not applicable.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, investments made and guarantees issued under Section 186 of the Act, during year under review,are provided in notes to financial statements, which forms part of this report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION ETC.

Due to the de-merger of the Manufacturing Division with effect from April 01, 2011 already approved by the Hon’ble BombayHigh Court vide their orders date July 18, 2012, the Company has nothing to report under this head specifically. However, theCompany is conscious of its responsibility in respect of energy conservation and technology absorption and adopts suitablemeasures towards this end from time to time.

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The foreign exchange earnings for the year ended March 31, 2016 stands at ì Nil million. The amount spent on account ofexpenditure in foreign currency stands at ì 42.60 million.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules, 2014 are given below:

a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for thefinancial year:

S. No. Non-Executive Directors Ratio to median remuneration

1 Mr. P R Tripathi (Sitting Fees) 0.49

2. Mr. Ramendra Gupta (Sitting Fees) 0.30

3. Mrs. Hima Bindu Myneni (Sitting Fees) 0.15

S. No. Executive Director Ratio to median remuneration

1 Mr. S C Sekaran 3.35

b) The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretaryin the financial year:

Director, Chief Executive Officer, Chief Financial Officer, % increase in remuneration in the financial yearCompany Secretary in the financial year

NIL NIL

c) The percentage increase in the median remuneration of employees in the financial year: NIL

d) The number of permanent employees on the rolls of the Company: 305

e) The explanation on the relationship between average increase in remuneration and Company performance.

The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects Companyperformance, the performance pay is also linked to organization performance, apart from an individual’s performance.

f) Comparison of the remuneration of the key managerial personnel against the performance of the Company:

g) There are no employees of the Company drawing remuneration in excess of ì 60 lakhs p.a. or ì 5 lakhs per month duringthe financial year 2015-2016.

Aggregate remuneration of key managerial personnel (KMP) in FY 2016 (ì million) 1.39

Revenue (ì million) 2093.03

Remuneration of KMPs (as % of revenue) 0.066 percent

Profit before Tax (PBT) (ì million) —

Remuneration of KMP (as % of PBT) —

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure “B” in the prescribed Form MGT-9 which forms part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013, the Directors confirm in respect of the audited annual accounts forthe year ended March 31, 2016:

a) In the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accountingstandards had been followed along with proper explanation relating to material departures;

b) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit/loss of the Company for that period;

c) Taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisionsof the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

16


d) Prepared the annual accounts on a going concern basis;

e) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.

f) Laid down internal financial controls to be followed by the company and that such internal financial controls areadequate and were operating effectively.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL)ACT, 2013

There were no cases of sexual harassment of women reported in the company during the financial year 2015-2016.

INDUSTRIAL RELATIONS

Industrial relations have been cordial and your Directors appreciate the sincere and efficient services rendered by theCompany continued to have cordial and harmonious relations with its employees.

HEALTH, SAFETY AND ENVIRONMENT

In line with our Corporate vision to improve the safety and quality of life of employees and to mitigate the risks of Health,Safety and Environment (HSE), the Company is actively involved in design and engineering of its projects through the non-polluting manufacturing processes, scrupulous compliance with environment norms and development of environmentalproducts.

Reinforcing our commitment to high levels of Quality and best-in –class services to customers, the company has IntegratedManagement System (IMS) consisting of ISO 9001: 2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across theorganisation inclusive of project sites accredited by M/s International Standards Body, Australia.

The Company is committed to progressively maintaining the best in class standards of HSE care for its people, practices,processes and services. The Company also promotes active participation of its employees and contractors to mange HSErisks with a goal to preventing accidents, injuries and occupational illness. The Company conducts on-going safety awarenessprogrammes which together with safety audits and continual safety training strengthens the processes and systems in thisarea. The Company also conducts continuous training of the staff at all levels regarding HSE issues, with experts beinginvited to train the senior management.

Upgradation of safety procedures at project sites and training has been of prime importance as a part of workplace safety.

As a part of its commitment to environment, which has always been in the forefront, your Company has taken up severalenvironmental management initiatives and remains committed to clean environment.

As a leader in environment and waste management technology market, HDO provides complete solutions for wastereduction and water conservation for broad spectrum of industries like refineries, minerals, pulp and paper, sugar, etc.

CORPORATE SOCIAL RESPONSIBILITY

As per the Companies Act, 2013, all companies having net worth of ì 500 Crore or more, or turnover of ì 1,000 Crore or moreor a net profit of ì 5 Crore or more during any financial year will be required to constitute a corporate social responsibility(CSR) committee of the Board of Directors comprising three or more directors, at least one of whom will be an IndependentDirector.

CSR activities, as per the provisions of the Companies Act, 2013, could not be undertaken by the Company in view of thelosses incurred by the Company during the current financial year.

ACKNOWLEDGEMENT

The Directors would like to express their appreciation for support and cooperation received from the holding company,bankers, financial institutions, suppliers, associate sub-contractors and members during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the committed services provided by the executives,staff and workers of the Company. The Board of Directors also thank all the employees for their contribution and continuedcooperation throughout the year and is confident of improving the stakeholder value in the Company.

For and on Behalf of the Board of DirectorsFor Hindustan Dorr-Oliver Limited

S.C. Sekaran R.Balarami ReddyExecutive Director Director(DIN:00334115) (DIN: 00022176)

HyderabadMay 30, 2016

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ANNEXURE ANNEXURE ANNEXURE ANNEXURE ANNEXURE TTTTTO O O O O THE DIRECTTHE DIRECTTHE DIRECTTHE DIRECTTHE DIRECTORS REPORORS REPORORS REPORORS REPORORS REPORTTTTT

Form No.MR-3

Secretarial Audit Report

(For the Financial Year ended March 31, 2016)

[Pursuant to section 204(1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014]

To,The MembersM/s. HINDUSTAN DORR-OLIVER LIMITEDDorr-Oliver House,Chakala, Andheri East,Mumbai-400099

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to goodcorporate practices by Hindustan Dorr-Oliver Limited (hereinafter called the Company). Secretarial Audit was conducted ina manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressingmy opinion thereon.

Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintainedby the Company and also the information provided by the Company, its officers, agents and authorized representativesduring the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period coveringthe financial year ended on March 31, 2016 (‘Audit Period’) complied with the statutory provisions listed hereunder and alsothat the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner andsubject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company forthe financial year ended on March 31, 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 thereunder;

(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 DirectInvestment, 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’): -

(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;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009(Not applicable to the Company during the Audit Period);

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock PurchaseScheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations, 2014 notified on October 28, 2014 (Not applicable to the Company during the Audit Period);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicableto the Company during the Audit Period);

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993regarding the Companies Act to the extent applicable and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to theCompany during the Audit Period); and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to theCompany during the Audit Period);

(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,2015.

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ANNEXURE ANNEXURE ANNEXURE ANNEXURE ANNEXURE TTTTTO O O O O THE DIRECTTHE DIRECTTHE DIRECTTHE DIRECTTHE DIRECTORS REPORORS REPORORS REPORORS REPORORS REPORT (T (T (T (T (Contd.Contd.Contd.Contd.Contd.)))))

(vi) Other laws specifically to the company includes:

(a) The Factories Act, 1948

(b) The Contract Labour (Regulation and Abolition) Act, 1970

(c) The Central Excise Act, 1944

(d) The Customs Act, 1962

(e) Foreign Exchange Management Act, 1999

(f) The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

(g) Approvals from Local Authorities

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India (to the extent applicable to the CompaniesAct, 2013.

(ii) The Listing Agreements entered into by the Company with National Stock Exchange Limited and Bombay Stock ExchangeLimited.

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

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directorsand Independent Directors. The changes in the composition of the Board of Directors that took place during the period underreview 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 inadvance and a system exists for seeking and obtaining further information and clarifications on the agenda items before themeeting and for meaningful participation at the meeting.

Majority decisions is carried through while the dissenting Board member’s views, if any are captured and recorded as partof Minutes.

I further report that there are adequate systems and processes in the Company commensurate with the size and operationsof the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, the following events were examined and noted:

(1) Mr.Hemish Purushottam has been appointed as a Company Secretary of the Company with effect from May 30, 2015.

(2) Mr.Gottiveti Ramakrishna has been resigned from the services of Company secretary with effect from May 30, 2015.

(3) Mr.Hemish Purushottam has been resigned from the services of Company secretary with effect from February 10, 2016.

(4) Mr.Gottiveti Ramakrishna has been appointed as Company secretary of the Company with effect from May 30, 2016.

(5) Certain Suits have filed regarding winding up petitions against the company under section 433 of the companies Act,1956 before the various Hon’ble High Courts. The Company is taking necessary steps including signing of Memorandumof Understandings and or filing of consent terms in the various High courts with the petitioners for withdrawal of suchpetitions. The matter is sub-judice and outcome of which is subject to fulfilling the conditions of Memorandum ofUnderstanding/Consent terms.

I further report that during the audit period, there was no instance of:

(i) Public / Right / Preferential issue of shares / debentures / Sweat equity.

(ii) Redemption / buy-back of securities.

(iii) Major decisions taken by the members in pursuance to Section 180 of the Companies Act, 2013.

(iv) Merger / Amalgamation / Reconstruction etc.

(v) Foreign Technical Collaborations.

HyderabadMay 30, 2016

CS K NarasimhuluPracticing Company Secretary

M.No.F7594, C P No: 8225

This report is to be read with our letter of even date which is annexed as Annexure 'A' and forms an integral part of this report.

19

ANNEXURE ANNEXURE ANNEXURE ANNEXURE ANNEXURE TTTTTO O O O O THE DIRECTTHE DIRECTTHE DIRECTTHE DIRECTTHE DIRECTORS REPORORS REPORORS REPORORS REPORORS REPORT T T T T (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Annexure 'A'

To

The Members

Hindustan Dorr-Oliver Limited

Dorr-Oliver House,

Chakala, Andheri East,

Mumbai-400099

My report of even date is to be read along with this letter

1. Maintenance of Secretarial records is the responsibility of the management of the Company. My responsibility is to

express an opinion on these Secretarial records based on my 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. Wherever 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 and Standards is

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 the further viability of the Company nor of the efficacy or

effectiveness with which the management has conducted the affairs of the Company.

CS. K. Narasimhulu

Practicing Company Secretary

M.No.F7594, C.P.No.8225

20

Annexure 'B'

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on March 31, 2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management and Administration)Rules, 2014.

I. REGISTRATION AND OTHER DETAILS:

1 CIN L74210MH1974PLC017644

2 Registration Date July 26, 1974

3 Name of the Company HINDUSTAN DORR-OLIVER LIMITED

4 Category/Sub-category of the Company Company Limited by shares / Indian Non-GovernmentCompany

5 Address and contact details of the Registered office Dorr Oliver House, Chakala, Andheri (East),Mumbai – 400 099. MaharashtraTel: 91-22-28359400;Fax: 91-22-28365659

6 Whether listed company Yes

7 Name, Address and contact details of the M/s Karvy Computershare Pvt. LimitedRegistrar and Transfer Agent, if any. Karvy Selenium, Tower B, Plot No. 31 and 32,

Financial District, Gachibowli, Hyderabad – 500 032.Ph: 040 6716 1524Email: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 percent or more ofthe total turnover of the company shall be stated)

S. No. Name and Description of main NIC Code of the % to total turnoverproducts / services Product / service of the company

1 Construction of utility projects 422 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

S.No. Name and Address of the Company CIN Holding/ Subsidiary/ % of Applicable

Associate shares held Section

1 IVRCL Limited L45201AP1987PLC007959 Holding Company 55.28 2(46)

2 HDO Technologies Limited U72200MH2006PLC163187 Subsidiary Company 100 2(87)(ii)

3 DavyMarkham India Private Limited U29253MH2010PTC203495 Subsidiary Company 100 2(87)(ii)


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IV. SHARE HOLDING PATTERN (Equity Share Capital breakup as percentage of total equity):

A) Category-wise Share Holding

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change[As at March 31,2015] [As at March 31,2016] during

the year

Demat Physical Total % of Total Demat Physical Total % of TotalCategory of Shareholders Shares Shares

A. Promoter's

(1) Indian - - - - - - - - -

a) Individual/HUF - - - - - - - - -

b) Central Govt - - - - - - - - -

c) State Govt(s) - - - - - - - - -

d) Bodies Corp. 39804430 - 39804430 55.28 39804430 - 39804430 55.28 -

e) Banks/FI - - - - - - - - -

f ) Any other - - - - - - - - -

Total Shareholding of

Promoter (A) 39804430 - 39804430 55.28 39804430 - 39804430 55.28 -

B. Public Shareholding

(1) Institutions

a) Institutions - - - - - - - - -

b) Mutual Funds 5756642 - 5756642 7.99 5422291 - 5422291 7.53 (0.46)

c) Banks/FI - - - - - - - - -

d) Central Govt - - - - - - - - -

e) State Govt(s) - - - - - - - - -

f ) Insurance Cos - - - - - - - - -

g) FIIs 2591057 - 2591057 3.60 275000 - 275000 0.38 (3.22)

h) Foreign Venture Capital Funds - - - - - - - - -

i) Others (specify) - - - - - - - - -

Sub-Total(B)(1) 8347699 - 8347699 11.59 5697291 - 5697291 7.91 (3.66)

(2) Non-Institutions

a) Bodies Corp 3553427 9600 3563027 4.95 3359507 9600 3369107 4.68 (0.27)

i) Indian - - - - - - - - -

ii) Overseas - - - - - - - - -

b) Individuals - - - - - - - - -

i) Individual shareholders holding

nominal share capital

upto ì 1 lakh 15046570 759313 15805883 21.95 19079611 734086 19944397 27.52 5.57

ii) Individual shareholders holding

nominal share capital in

excess of ì 1 lakh 3420933 - 3420933 4.75 2206512 - 2206512 3.06 (1.69)

c) Others (Specify)

(i) NBFCs - - - - 3300 - 3300 0.00 -

Non Resident Indians 865720 - 865720 1.20 882877 - 882877 1.23 0.03

Overseas Corporate Bodies - - - - - - - - -

Foreign Nationals - - - - - - - - -

Clearing Members 66696 - 66696 0.09 94674 - 94674 0.13 0.04

Trusts - - - - 2500 720 3220 0.00 0.00

Directors 130700 - 130700 0.18 130700 - 130700 0.18 -

Foreign Bodies-DR - - - - - - - - -

Sub-Total(B)(2) 23084046 769633 23853679 33.12 25759681 744406 26504087 36.81 3.68

Total Public Shareholding

(B) = (B)(1)+(B)(2) 31431745 769633 32201378 44.72 31456972 744406 32201378 44.72 -

C. Shares held by Custodian

for GDRs and ADRs - - - - - - - - -

Grand Total (A+B+C) 71236175 769633 72005808 100.00 71261402 744406 72005808 100.00 -

22


Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change inshareholding

duringthe year

No. of % of total %of Shares No. of % of total %of SharesShares Shares Pledged / Shares Shares Pledged /

of the encumbered of the encumberedcompany to total company to total

shares shares

IVRCL Limited 3,98,04,430 55.28 53.15 3,98,04,430 55.28 53.15 -

C) Change in Promoters’ Shareholding (please specify, if there is no change):

Shareholding at the Cumulative Shareholdingbeginning of the year during the year

No. of shares % of total No. of shares % of totalshares of shares of

Particulars the company the company

At the beginning of the year

Date wise Increase / Decrease inPromoters There is no change in Promoters’ Shareholding betweenShare holding during the yearspecifying the reasons for increase / April 01, 2015 to March 31, 2016decrease (e.g. allotment / transfer /bonus/ sweat equity etc):

At the end of the year

D) Shareholding Pattern of top ten Shareholders:

(Other than Directors, Promoters and Holders of GDRs and ADRs):

S. Top Ten Shareholders Shareholding at the beginning Cumulative Shareholding at the

No. of the year April 01, 2015 end of the year March 31, 2016

% of total % of totalNo. of shares of No. of shares of

shares the company shares the company

1 IVRCL Limited 39804430 55.28 39804430 55.28

2 Sundaram Mutual Fund A/c Sundaram Smile Fund 2756639 3.83 2756639 3.83

3 Sundaram Mutual Fund A/c Sundaram Infrastructure - - 2373152 3.30

4 Mavi Investment Fund Limited 2591057 3.60 - -

5 HSBC MIP Savings Plan 225000 0.31 225000 0.31

6 Polus Global Fund - - 225000 0.31

7 Fairwealth Securities Limited 2797 0.00 341400 0.47

8 Indus Palms Hotels and Resorts Ltd 200200 0.28 - -

9 MukulMahavir Prasad Agrawal - - 1046517 1.45

10 Amal N. Parikh - - 292094 0.41

11 Amit Ramgopal Agrawal - - 200000 0.28

E) Shareholding of Directors and Key Managerial Personnel:

Directors and Key Managerial Personnel:

S.No. Shareholding of each Shareholding at the beginning Cumulative Shareholding at theDirectors and each Key of the year April 01, 2015 end of the year March 31, 2016Managerial Personnel

No. of shares % of total shares No. of shares % of total sharesof the company of the company

1 Mr. E. Sudhir Reddy 1,30,700 0.18 1,30,700 0.18

B) Shareholding of Promoter:

23


V) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.

(Amount ì)

Secured Loans Unsecured Deposits TotalParticulars excluding deposits Loans Indebtedness

Indebtedness at the beginning of the financial year

(i) Principal Amount 8,455,759,099 - - 8,455,759,099

(ii) Interest due but not paid 463,661,391 - - 463,661,391

(iii) Interest accrued but not due 15,468,429 - - 15,468,429

Total (i+ii+iii) 8,934,888,919 - - 8,934,888,919

Change in Indebtedness during the financial year:

Addition 2,057,652,269 - - 2,057,652,269

Reduction - -

Net Change 2,057,652,269 - - 2,057,652,269

Indebtedness at the end of the financial year

(i) Principal Amount 9,704,371,588 - - 9,704,371,588

(ii) Interest due but not paid 1,271,734,413 - - 1,271,734,413

(iii) Interest accrued but not due 16,435,187 - - 16,435,187

Total (i+ii+iii) 10,992,541,188 - - 10,992,541,188

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Amount ì)

S. Particulars of Remuneration Mr. S.C. Sekaran TotalNo Executive Director Amount

1. Gross Salary

(a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 8,00,000 8,00,000

(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961 - -

(c) Profits in lieu of salary under Section 17(3) of the Income Tax Act, 1961 - -

2. Stock Option - -

3. Sweat Equity - -

4. Commission - -

- As % of profit - -

- Other, specify - -

5. Others, please specify

Provident Fund to Recognised Trust 2,62,440 2,62,440

Superannuation Contribution to Trust 3,28,056 3,28,056

Ceiling as per the Act 8,00,000 8,00,000

24


B. Remuneration to other directors: (Amount ì)

S.No. Particulars of Remuneration Name of Directors Total Amount

1 Independent Directors

Fee for attending board committee meetings Mr P.R Tripathi 1,95,000

Mr Ramendra Gupta 1,20,000

Mrs HemaBindu Myneni 60,000

Commission -

Others, please specify -

Total (1) 2,75,000

2 Other Non-Executive Directors

Fee for attending board committee meetings -

Commission -

Others, please specify -

Total (2) -

Total (1+2) 2,75,000

Total Managerial remunaration overall ceiling as per the act The sitting fee paid is within the -

limits as prescribed in the Act.

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD:

(Amount ì)

S. No. Particulars of Remuneration Key Managerial Personnel

CS CFO 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 - - -

2 Stock Option - - -

3 Sweat Equity - - -

4 Commission - - -

- as % of profit - - -

Others, specify. - - -

5 Others, please specify - - -

Provident Fund to Recognised Trust - - -

Superannuation Contribution to Trust - - -

Total - - -

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

There were no penalties, punishment or compounding of offences during the year ended March 31, 2016.

For and on Behalf of the Board of DirectorsFor Hindustan Dorr-Oliver Limited

S.C. Sekaran R.Balarami ReddyExecutive Director Director(DIN:00334115) (DIN: 00022176)

Registered Office:‘Dorr-Oliver House’, Chakala , Andheri (East)Mumbai – 400 099

May 30, 2016

25

MANAGEMENT DISCUSSIONS AND ANALYSIS

Overview of Indian Economy

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organization (CSO) andInternational Monetary Fund (IMF). According to the Economic Survey 2015-2016, the Indian economy will continue to growmore than 7 percent in 2016-2017. The Economic Survey 2015-2016 had forecasted that the Indian economy will be growingby more than 7 percent for the third successive year 2016-2017 and can start growing at eight percent or more in next twoyears.

The improvement in India’s economic fundamentals has accelerated in the year 2015 with the combined impact of strongGovernment reforms, RBI’s inflation focus supported by benign global commodity prices.

The steps taken by the Government in recent times have shown positive results as India’s gross domestic product (GDP) atfactor cost at constant (2011-2012) prices 2015-2016 is ì 113.50 trillion (US$ 1.668 trillion), as against ì 105.5 trillion (US$1.55 trillion) in 2014-2015, registering a growth rate of 7.6 percent. The economic activities which witnessed significantgrowth were ‘financing, insurance, real estate and business services’ at 11.5 percent and ‘trade, hotels, transport,communication services’ at 10.7 percent.

Government Initiatives

Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like ‘Makein India’ and ‘Digital India’. Mr. Narendra Modi, Prime Minister of India, has launched the ‘Make in India’ initiative with an aimto boost the manufacturing sector of Indian economy. This initiative is expected to increase the purchasing power of anaverage Indian consumer, which would further boost demand, and hence spur development, in addition to benefitinginvestors. Besides, the Government has also come up with ‘Digital India initiative’, which focuses on three core components:creation of digital infrastructure, delivering services digitally and to increase the digital literacy.

Currently, the manufacturing sector in India contributes over 15 percent of the GDP. The Government of India, under the ‘Makein India’ initiative, is trying to give boost to the contribution made by the manufacturing sector and aims to take it up to 25percent of the GDP.

Under the ‘Digital India’ initiative numerous steps have been taken by the Government of India. Some of them are as follows:

The Government of India has launched an initiative to create 100 smart cities as well as Atal Mission for Rejuvenation andUrban Transformation (AMRUT) for 500 cities with an outlay of ì 48,000 crore (US$ 7.47 billion) and ì 50,000 crore (US$ 7.34billion) crore respectively. Smart cities are satellite towns of larger cities which will consist of modern infrastructure and willbe digitally connected. The program was formally launched on June 25, 2015. The Phase I for Smart City Kochi (SCK) will bebuilt on a total area of 650,000 sq. ft., having a floor space greater than 100,000 sq. ft. Besides, it will also generate a total of6,000 direct jobs in the IT sector.

Business Scenario

With the results of two years of creating positive business atmosphere by the BJP led Indian Government and sincere effortsin improving global ties, the atmosphere is now conducive for huge investments in various sectors. With the possibility thatthe GST bill will be passed in 2016, finally the complex tax regime of multiple tax will come to an end. The manufacturing andService sector in India will be able to operate with more clarity improving the overall business sector.

The various interest areas of your Company are listed below:-

Power Sector

Introduction

India’s power sector is one of the most diversified in the world. Sources of power generation range from conventionalsources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind,solar, and agricultural and domestic waste. In order to meet the increasing demand for electricity in the country, massiveaddition to the installed generating capacity is required.

Market Size

The Planning Commission’s 12th Five-Year Plan estimates total domestic energy production to reach 669.6 million tonnesof oil equivalent (MTOE) by 2016–2017 and 844 MTOE by 2021–2022 By 2030–2035.

As of November 2015, total thermal installed capacity stood at 196.2 gigawatt (GW), while hydro and renewable energyinstalled capacity totaled 42.6 GW and 37.4 GW, respectively. At 5.8 GW, nuclear energy capacity remained broadly constantcompared with the previous year. India’s rooftop solar capacity addition grew 66 percent from last year to reach 525 Mega

26

MANAGEMENT DISCUSSIONS AND ANALYSIS (Contd.)

Watts (MW), and has the potential to grow up to 6.5 giga watts (GW) 1. India’s wind power capacity, installed in FY2016, isestimated to increase 20 percent over last year to 2,800 Mega Watt (MW) 2, led by favourable policy support that hasencouraged both independent power producers (IPP) and non-IPPs.

India’s wind energy market is expected to attract investments totaling ì 1,00,000 crore (US$ 15.7 billion) by 2020, and windpower capacity is estimated to almost double by 2020 from over 23,000 MW in June 2015, with an addition of about 4,000 MWper annum in the next five years.

Investment Scenario

Around 293 global and domestic companies have committed to generate 266 GW of solar, wind, mini-hydel and biomass-based power in India over the next 5–10 years. The initiative would entail an investment of about US$ 310–350 billion.

Between April 2000 and September 2015, the industry attracted US$ 9.97 billion in Foreign Direct Investment (FDI).


The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth.

Some initiatives by the Government of India to boost the Indian power sector:

The Government of India has resolved the issues regarding transfer of mining leases and grant of forest clearances to thewinning bidders of coal blocks. It expects operations to start in about 10 more mines by March 2016, easing coal availabilityto the projects attached to these mines.

The Ministry of Power has planned to provide electricity to 18,500 villages in three years under the Deendayal UpadhyayaGram Jyoti Yojana (DUGJY). Out of these, 3,500 villages would receive electricity through off-grid or renewable energysolutions.

The Ministry of New and Renewable Energy is implementing two national level programmes, namely Grid ConnectedRooftop and Small Solar Power Plants Programme and Off-Grid and Decentralised Solar Applications, in order to promoteinstallation of solar rooftop systems, as per Mr Piyush Goyal, Minister of State (Independent Charge) for Power, Coal andNew and Renewable Energy.

The Government of Odisha plans to set up a large 1,000-MW solar power park under public-private partnership (PPP) modeinvolving an investment of about ì 6,500 crore (US$ 1 billion).

The Government of Telangana plans to set up an incubator centre, in collaboration with University of Austin, Texas, for start-ups in the renewable energy sector, to support new companies entering the renewable energy market.

A Joint Indo-US PACE Setter Fund has been established, with a contribution of US$ 4 million from each side to enhanceclean energy cooperation.

The Government of India announced a massive renewable power production target of 175,000 MW by 2022; this comprisesgeneration of 100,000 MW from solar power, 60,000 MW from wind energy, 10,000 MW from biomass, and 5,000 MW fromsmall hydro power projects.

The Union Cabinet of India approved 15,000 MW of grid-connected solar power projects of National Thermal Power Corp Ltd(NTPC).

The Indian Railways signed a bilateral power procurement agreement with the Damodar Valley Corporation (DVC). Theagreement was signed between North Central Railway and DVC. This is the first time the Railways will directly buy powerfrom a supplier.

US Federal Agencies committed a total of US$ 4 billion for projects and equipment sourcing, one of the biggest deals for thegrowing renewable energy sector in India.

The Road Ahead

The Government of India is taking a number of steps and initiatives like 10-year tax exemption for solar energy projects, etc.,in order to achieve India’s ambitious renewable energy targets of adding 175 Giga Watts (GW) of renewable energy,including addition of 100 GW of solar power, by the year 2022. The cumulative installed capacity of solar power in India hascrossed the 4 Gigawatt mark as of June 30, 2015. The government has also sought to restart the stalled hydro powerprojects and increase the wind energy production target to 60 GW by 2022 from the current 20 GW.

The 2015 edition of BP’s Energy Outlook projected India’s energy production rising by 117 percent to 2035, while consumption

27


grows by 128 percent. The country’s energy mix evolves very slowly over the next 22 years with fossil fuels accounting for 87percent of demand in 2035, compared with a global average of 81 percent (down from 92 percent today). Oil remains thedominant fuel (36 percent) followed by gas (30 percent) and coal (21 percent). CO2 emissions from energy consumptionincrease by 115 percent.

Electricity demand in India is increasing rapidly, and the 1193 TWh gross produced in 2013 was more than triple the 1990output, It represented 750 kWh per capita for the year. The per capita electricity consumption figure is expected to double by2020, with 6.3 percent annual growth, and reach 5000-6000 kWh by 2050, requiring about 8000 TWh/yr then. There is anacute demand for more reliable power supplies.

The Indian power sector has an investment potential of ì 15 trillion (US$ 237 billion) in the next 4–5 years, thereby providingimmense opportunities in power generation, distribution, transmission, and equipment.

Nuclear power

NPCIL supplied 35 TWh of India’s electricity in 2013-2014 from 5.3 GWe nuclear capacity, with overall capacity factor of 83percent and availability of 88 percent. Some 410 reactor-years of operation had been achieved to December 2014. India’sfuel situation, with shortage of fossil fuels, is driving the nuclear investment for electricity, and 25 percent nuclear contributionis the ambition for 2050, when 1094 GWe of base-load capacity is expected to be required. Almost as much investment in thegrid system as in power plants is necessary.

The target since about 2004 was for nuclear power to provide 20 GWe by 2020, but in 2007 the Prime Minister referred to thisas “modest” and capable of being “doubled with the opening up of international cooperation.” However, it is evident that eventhe 20 GWe target would require substantial uranium imports. In June 2009 NPCIL said it aimed for 60 GWe nuclear by2032, including 40 GWe of PWR capacity and 7 GWe of new PHWR (Pressurised heavy water reactors) capacity, all fuelledby imported uranium. This 2032 target was reiterated late in 2010 and increased to 63 GWe in 2011.

The 16 PHWRS and LWRs (Light water reactor) are expected to cost $40 billion. The eight 700 MWe PHWRs would bebuilt at Kaiga in Karnataka, Gorakhpur in Haryana’s Fatehabad District, Banswada in Rajasthan, and Chutka in MadhyaPradesh.

Nuclear sector provides potential of excuting various EPC packages in Electro-Mechnanical, Piping, Waste treatment segmentsin the next 4–5 years for your company thereby providing immense business opportunities in services and equipmentmanufacturing for our factory.

ULTRASONIC GENERATORS TO POWER ULTRASONIC TANK

28


ULTRASONIC TANK TOBE USED IN NUCLEAR WASTE MANAGEMENT PLANT

Steel Sector

Introduction

India is the world’s third-largest producer of crude steel (up from eighth in 2003) and is expected to become the second-largest producer by 2016. The Indian steel industry is very modern with state-of-the-art steel mills. It has always strived forcontinuous modernization and up-gradation of older plants and higher energy efficiency levels.

Market Size

India’s crude steel capacity reached 109.85 million tones (MT) in 2014-2015, a growth of 7.4 percent. Production of crudesteel grew by 8.9 percent to 88. 98 MT. Total finished steel production for sale increased by 5.1 percent to 92.16 MT.Consumption of total finished steel increased 3.9 percent to 76.99 MT.

The steel sector in India contributes nearly 2 percent of the country’s gross domestic product (GDP) and employs over600,000 people. The per capita consumption of total finished steel in the country has risen to about 59 Kg in 2014-2015.India’s steel consumption for FY 2015-2016 is estimated to increase by 7 percent, higher than 2 per cent growth last year,due to improving economic activity.

Investments

Steel industry and its associated mining and metallurgy sectors have seen a number of major investments and developmentsin the recent past.

Some of the major investments in the Indian steel industry are as follows:

National Mineral Development Corporation (NMDC) has planned to invest ì 40,000 crore (US$ 6.1 billion) in the next eightyears to achieve mining capacity of 75 million tonnes per annum (MTPA) by FY2018-2019 and 100 MTPA by FY2021-2022,compared to 48 MTPA current capacity. NMDC Ltd will also set up a greenfield 3-million tonne per annum steel mill inKarnataka jointly with the State Government at an estimated investment of ì 18,000 crore (US$ 2.8 billion).

Posco Korea, the multinational Korean steel company, has signed an agreement with Shree Uttam Steel and Power (part ofUttam Galva Group) to set up a steel plant at Satarda in Maharashtra.

Iron ore output in India is expected to increase by 25 percent to 153 million tonnes in FY 2016, which in turn will help reduceiron ore imports by two-thirds to five million tonnes, SAIL plans to invest US$23.8 billion to increase the steel production to50 MTPA by 2025.

Arcelor Mittal, world’s leading steel maker, has agreed a joint venture with Steel Authority of India Ltd (SAIL) to set up anautomotive steel manufacturing facility in India.

29


Iran has evinced interest in strengthening ties with India in the steel and mines sector, said ambassador of the IslamicRepublic of Iran, Mr Gholamreza Ansari in his conversation with Minister of Steel and Mines, Mr Narendra Singh Tomar.

JSW Steel has announced to add capacity to make its plant in Karnataka the largest at 20 MT by 2022.


The Government of India is aiming to scale up steel production in the country to 300 MT by 2025 from 81 MT in 2013-2014.

The Ministry of Steel has announced to invest in modernisation and expansion of steel plants of Steel Authority of IndiaLimited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) in various states to enhance the crude steel production capacity inthe current phase from 12.8 MTPA to 21.4 MTPA and from 3.0 MTPA to 6.3 MTPA respectively.

The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI)in association with the public and private sector steel companies to spearhead research and development activities in theiron and steel industry at an initial corpus of ì 200 crore (US$ 31.67 million).

Some of the other recent Government initiatives in this sector are as follows:

Government has planned Special Purpose Vehicles (SPVs) with four iron ore rich states i.e., Karnataka, Jharkhand, Orissa,and Chhattisgarh to set up plants having capacity between 3 to 6 MTPA.

SAIL plans to invest US$ 23.8 billion for increasing its production to 50 MTPA by 2025. SAIL is currently expanding its capacityfrom 13 MTPA to 23 MTPA, at an investment of US$ 9.6 billion.

A Project Monitoring Group (PMG) has been constituted under the Cabinet Secretariat to fast track various clearances/resolution of issues related to investments of ì 1,000 crore (US$ 152 million) or more.

To increase domestic value addition and improve iron ore availability for domestic steel industry, duty on export of iron orehas been increased to 30 percent.

Road ahead

India is expected to become the world’s second largest producer of crude steel in the next 10 years, moving up from the thirdposition, as its capacity is projected to increase to about 300 MT by 2025. Huge scope for growth is offered by India’scomparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructureconstruction and the thriving automobile and railways sectors.

HDOL expects good EPC opportunities in the field of Steel sector. HDOL has participated in bidding for pellet plant withstrategic partners in few of the projects and expect to have breakthrough in this sector in the future.

IRON ORE BENEFICATION PLANT-NMDC DONIMALAI

30


IRON ORE BENEFICATION BUILDING –NMDC DONIMALAI

Mineral Segment

India currently produces around 89 minerals under different groups, with fuel minerals, metallic minerals, non-metallicminerals, atomic minerals and minor minerals. The country has immense potential for mining resources and reserves andis currently among the top 10 global producers of many minerals.

The public sector contributes over 85 percent of the total value of mineral production. However, it is the avowed policy of theGovernment to withdraw from the non-strategic sectors and accordingly the public sector undertakings are being privatisedin a phased manner. Public sector enterprises like the National Mineral Development Corporation, Kudremukh Iron Orecompany, Steel Authority of India Limited and Orissa Mining Corporation dominate the iron ore sector. National AluminiumCompany contributes about 35 percent bauxite mining and aluminium production. Hindustan Copper Limited predominatesthe copper ore mining sector. After cessation of economic operations in Bharat Gold Mines Limited since 2000, Hutti GoldMines Limited (a Government of Karnataka undertaking), is the only undertaking engaged in the mining of gold. RajasthanState Mines and Minerals Limited and Andhra Pradesh Mining Development Corporation predominate the mining of rockphosphate and barytes respectively. In Private sector Sterlite Industries is one of the main company who has taken over ofGovernment undertakings like Hindustan Zinc Limited and Bharat Aluminum Co. Limited and also set up their own facilityVedanta Alumina in Orissa.

HDOL is predominantly active in the area of mineral beneficiation in Iron Ore, Coal, Alumina, Zinc, Copper and Uranium.The sector is at present under stress due to global meltdown in Metal prices. There are also severe restrictions from IndianGovernment on mining due to environmental concerns.

However the market conditions are slowly improving and the revival is expected very soon. There are several expansionplans in the mineral industry which are in cold storage presently due to market condition. Once the market is revived HDOLwill have substantial opportunities in this segment.

31


DRUM SLAKER AT MILK OF LIME PROJECT- NALCO DAMANJODI

WATER SEGMENT

Globally more than one billion people lack access to safe drinking water nearly all of them in the developing countries,including India. Nearly a third of the world’s population worldwide live in water-stressed areas. This figure is expected to riseto two-third of the population by 2025. It is reported that groundwater in one-third of India’s 600 districts is not fit for drinkingas the concentration of fluoride, iron, salinity and arsenic exceeds the tolerance levels. With increasing number of peoplebecoming conscious of the risks of drinking contaminated water, the demand for water treatment is rising rapidly. Theplanning commission has budgeted USD 26.5 Biliion in 2012-2017 to plan provide safe water to all urban and rural India.India is one the biggest market in size for water segment but having the lowest capital expenditure. This provides biggestpotential to grow.

HDOL is one of the key player in water segment having successfully executed order in all the key areas such as Raw watertreatment, Effluent water treatment, Sewage water treatment , Desalination plant, Reverse osmosis plant, Ultra filtration andDM Water supply. HDOL will be hugely benefitted with the growth potential in water segment.

ANION EXCHANGERS AT DM WATER PLANT – IOCL PARDAIP

32


DEGASSER TOWER AT DM WATER PLANT –IOCL PARADIP

FERTILIZER SECTOR

Looking for a better New Year ahead, fertilizer sector expects the output to rise by over 2 million tonnes in 2016, which canhelp lessen the dependence on imports and also lower the subsidies by up to ì 10,000 crore.

The Government this year also announced the new urea policy and gas pooling to make the sector energy-efficient andsmoothen the process of gas availability and supply. This new urea policy which incentivises the energy efficiency in thesector and would help boost urea production. The Government has already started the process for revival of the closed ureaplants and to establish new urea plants which will transform India from net importer of urea to its net exporter in comingyears, Country’s “urea production could reach record 25 million tonnes in the next financial year, at the same time, importscould also come down by 1.5 to 2 million tonnes with the help of policy initiatives like neem coating of urea and new ureapolicy.

India produces about 22 million tonnes of urea annually but has to import 7-8 million tonnes a year to meet the domestic demand.

The year also saw the Central Government approving revival of three closed urea plants and setting up of a new one at a costof about ì 22,500 crore. No new fertilizer plant has come up in the country in the last 15 years. Government expects thesedecisions to have a positive impact on the fertilizer industry.

PRODUCT BAGGING MACHINES AT WATER SOLUBLE FERTILIZER PLANT – GSFC VADODARA

33

HDOL is predominantly in the business of Phosphoric acid based fertilizer plants and enjoys leader position in this segment.HDOL exploring strategic partners in place to take up Urea based fertilizer projects and expand business segment.

HDO - Company Performance

Company continues to be beleaguered by the financial constraints in execution of the ongoing project. Several of the keyprojects under execution are in final stage of completion and needs final push to successfully complete the project. Thecompletion of these key projects will help in establishing new credentials in sectors of Environmental, Nuclear and Mineralsector. It will also help in reducing the bank liabilities by getting the various bank guarantees given on these projectsreleased.

Several new prospects in Manufacturing, Environmental and Nuclear power, Water and Waste water sector are visible innear future and your company being one of the key company in these sectors will be hugely benefitted.

Your company is in discussions with their bankers to induct fresh capital in the company through possible investors to revivethe company operations.


34

MANAGEMENT DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATION

Financial Review :

The Financial statement have been prepared in compliance with the requirements of the Companies Act, 1956 and GenerallyAccepted Accounting Principles (GAAP) as amended from time to time in India. The estimates and judgments relating to thefinancial statement have been made on a prudent and reasonable basis, in order that the financial statements reflect in atrue and fair manner, the form and substance of the transactions and reasonably present, the state of affairs on the Balancesheet date and profits of the Company for the year ended on that date.

The following table sets forth the income statement for the financial year ended March 31, 2016 and previous financial yearended March 31, 2015. The components of expenses have been expressed as a percentage of total income for the periodindicated.

(ì in million)

Particulars For the For theyear ended on year ended on

March 31, 2016 March 31, 2015

Net income from operations 2,053.82 3,483.02

other income 39.21 156.82

Total income 2,093.03 3,639.84

Cost of material/services consumed 1,975.25 4,264.91

Cost of material/services consumed as a percentage to total income 94.37% 117.17%

Employee benefit expenses 177.29 237.06

Employee benefit expenses as a percentage to total income 8.47% 6.51%

Other expenses 225.65 2,639.57

Other expenses as a percentage to total income 10.78% 72.52%

EBIDTA (285.16) (3,501.70)

EBIDTA- as a percentage to total income (13.62%) (96.20%)

Finance cost 1,327.83 1,105.48

Finance cost as a percentage to total income 63.44% 30.37%

Depreciation 6.00 11.61

Depreciation as a percentage to total income 0.29% 0.32%

Profit/(loss) before tax and extraordinary items (1,618.99) (4,618.79)

Extraordinary items - 2011.16

Profit/(loss) before tax (1,618.99) (6,629.95)

Profit/(loss) before tax as a percentage to total income (77.35%) (182.15%)

Profit/(loss) after tax (1,632.62) (7,731.55)

Profit/(loss) after tax as a percentage to total income (78.00%) (212.41%)

Revenue from operations:

During the year overall performance is as follows.

l Considerable reduction in the total income

l Finance cost is gone up considerably

l Time delay and cost overrun in various projects due to extended period of stay after the original schedule.

l The stressed cash flow situation in the company throughout the year has affected the overall performance of thecompany.

l Low volume of new orders due to current prevailing market conditions.

35

CORPORATE GOVERNANCE REPORT

(As required under SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015)

I. Company’s Philosophy on Corporate Governance

Hindustan Dorr-Oliver Limited (hereinafter referred to as “the Company”) is committed to corporate transparency andlays emphasis on business ethics in all its dealings. The Company believes in meeting its obligations to all itsstakeholders, including amongst others, shareholders, customers, employees and the community in which the Companyoperates.

The Company’s existing practices and policies are in conformity with the requirements stipulated by Stock Exchangesand SEBI and has gone well beyond simple statutory compliance by instituting such systems and procedures as arerequired to make the management completely transparent and institutionally sound.

II. Board of Directors (Board)

Composition of the Board

The Board comprises of experts drawn from diverse fields/professions. It consists of total of seven Directors. TheChairman of the Board is a Non-Executive and Independent Director. The composition of the board is in conformity withSEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

None of the directors on the board hold directorships in more than ten public companies. Further, none of them is amember of more than ten committees or chairman of more than five committees across all the public companies inwhich he is a director. Necessary disclosures regarding committee positions in other public companies as on March31, 2016 have been made by the directors. None of the directors are related to each other.

Independent directors are non-executive directors as defined under Clause 49(II)(B)(1) of the Listing Agreementsentered into with the Stock Exchanges. The maximum tenure of the independent directors is in compliance with theCompanies Act, 2013 (“Act”). All the Independent Directors have confirmed that they meet the criteria as mentionedunder SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

The Composition as on March 31, 2016, the changes during the period under review, number of Meetings attended andDirectorships/Committee Memberships in other Companies are as follows:

S. Name of the Director Category * Attendance at Attendance Other Other No. Board Meetings at last AGM Directorships Committee

held during held on in India ** Positions in India ***the year Sept. 23, 2015

Held Attended Member Chairman

1 Mr. Prabahakar Ram Tripathi C & NED (I) 4 4 Yes 7 1 3(DIN: 00376429)

2 Mr. E. Sudhir Reddy VC & NED 4 4 Yes 7 1 -(DIN:00023518)

3 Mr. S. C. Sekaran ED 4 3 Yes 4 1 -(DIN:00334115)

4 Mr. R. Balarami Reddy NED 4 3 No 10 1 -(DIN:00022176)

5 Mr. Ramendra Gupta NED(I) 4 4 No 6 3 1(DIN: 00306663)

6 Ms. Hima Bindu Myneni NED(I) 4 4 No 9 9 0(DIN:07120807)

7 Mr. Vivek Wahi# Nom Dir NA NA NA NA NA NA(DIN: 07490023)

Notes:

* Category : C- Chairman, VC – Vice-Chairman, MD – Managing Director, ED – Executive Director, NED-Non-Executive Director, I –Independent Director and Nom Dir-Nominee Director.

** Does not include Alternate Directorships, Directorships in Private Limited Companies, Foreign Companies and Companies registeredunder Section 8 of the Companies Act, 2013.

*** Chairmanship/Membership of Board Committees include only Audit Committee and Stakeholders Relationship Committee.

# Mr. Vivek Wahi appointed as Nominee Director on behalf of Bank of India w.e.f. April 28, 2016.

36

CORPORATE GOVERNANCE REPORT (Contd.)

Board Meetings

In compliance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015, the Board meets at least once in a quarter to review the Company’s performance, financial resultsand more often, if considered necessary, to transact other business. During the period 2015-2016, the Board met fourtimes as follows:

Date of the Board Meeting Total Number of Directors as No. of Directors whoon the date of the Meeting attended the Meeting

May 30, 2015 6 5

August 14, 2015 6 6

November 13, 2015 6 5

February 10, 2016 6 6

The gap between two Meetings did not exceed four months.

Agenda papers, containing all necessary information, are made available to the Board well in advance to enable theBoard to discharge its responsibilities effectively and take informed decisions. The Agenda items with notes preparedby functional departments or units, are circulated to all the Directors well before the meeting for consideration. Minutesof Board Meetings are circulated to all Directors before the next meeting and confirmed at the subsequent BoardMeetings.

Review of Statutory Compliance Report:

The Board periodically reviewed the statutory compliance reports of all Laws applicable to the Company at its quarterlyBoard Meetings.

III. Committees of Directors under Corporate Governance Code

a. Audit Committee

The Audit Committee of the Board of Directors was constituted in conformity with the requirements of Section 177of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

(i) Brief description of terms of reference

The role of the Audit Committee is as prescribed under the Act and SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 and includes the following:

(a) Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensurethat the financial statements are correct, sufficient and credible;

(b) Recommendation of appointment etc., of the Statutory Auditors and their fee for audit and other services;

(c) Review of Annual Financial Statements with particular reference to Directors’ Responsibility Statement, changesin accounting policies, major accounting entries involving estimates, disclosure of related party transactions,qualifications in the draft audit report, etc.;

(d) Discussions with Internal Auditors on significant findings and with Statutory Auditors of the nature and scope ofaudit and on areas of concern;

(e) Review of quarterly financial statements, uses and application of funds raised, performance of Statutory andInternal Auditors, adequacy of internal control system and internal audit function; and

(f) Review of Management Discussion and Analysis Report on financial condition, operations, significant relatedparty transactions, internal control weaknesses reported by the Statutory Auditors and Internal Auditors and theappointment and remuneration of Internal Auditor.

Composition, Names of Members and Chairperson

The Audit Committee presently comprises of two Independent Directors and one Non-Executive Director, havingrich accounting/financial management expertise. The present composition of the Audit Committee is as follows:

a. Mr. Prabhakar Ram Tripathi, Chairman

b. Mr. Ramendra Gupta, Member

c. Mr. R. Balarami Reddy, Member

37


The Executive Director, Head Accounts and Finance, Internal and Statutory Auditors attend the Meeting of theCommittee as and when invited.

The Company Secretary acts as Secretary to the Committee.

The Audit Committee met four times during the period of 2015-2016 and the gap between two meetings did notexceed four months. The details of the attendance of the Members are as follows:

Name Attendance in the meeting held on

May 30, 2015 August 14, 2015 November 13, 2015 February 10, 2016

Mr. Prabhakar Ram Tripathi Yes Yes Yes Yes

Mr. R. Balarami Reddy Yes Yes - Yes

Mr. Ramendra Gupta Yes Yes Yes Yes

The Minutes of the Audit Committee Meetings are noted at the Board Meetings.

The Chairman of the Audit Committee Meeting was present at the 40th Annual General Meeting held on September23, 2015.

b. Nomination and Remuneration Committee

Composition

The Nomination and Remuneration Committee comprises of one Independent Director and two Non-ExecutiveDirectors. The present composition of the Nomination and Remuneration Committee is as follows:

Mr. Prabhakar Ram Tripathi, Chairman

Mr. E. Sudhir Reddy, Member

Mr. R. Balarami Reddy, Member

The Company Secretary acts as Secretary to the Committee.

Terms of reference

(a) to determine on behalf of the Board the Company’s Policy on remuneration package for Executive Directorsincluding pension rights and compensation payments.

(b) to administer the Employee Stock Option Scheme of the Company

(c) to decide any other related matters.

The Minutes of the Nomination and Remuneration Committee Meetings are noted at the Board Meetings.

The Remuneration policy of the Company is performance driven and is structured to motivate employees, recognizetheir merits and achievements and promote excellence in their performance. The Company follows a compensationmix of fixed pay, benefits and perquisites besides Employee Stock Options.

Details of remuneration/sitting fees paid/accrued to Directors of the Company during the period ended March 31,2016 are given below:

Name of the Director Sitting fee Gross Commission Service Contract/( ì ) Remuneration Notice period/

( ì )* Severance

Mr. Prabhakar Ram Tripathi 1,95,000 - - -

Mr. E. Sudhir Reddy - - - -

Mr. S. C. Sekaran - 13,90,496 - -

Mr. R. Balarami Reddy - - - -

Mr. Ramender Gupta 1,20,000 - - -

Mrs. Hima Bindu Myneni 60,000 - - -

* Gross remuneration shown above includes contribution to Provident Fund and Superannuation fund

38


c. Stakeholders Relationship Committee

Composition

The Stakeholders Relationship Committee comprises of the following members of the Board:

Mr. P. R. Tripathi, Chairman

Mr. E. Sudhir Reddy, Member

Mr. S. C. Sekaran, Member

The Company Secretary is the Compliance Officer nominated for this purpose under SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015.

The Committee meets at frequent intervals to consider, inter alia, share transfers, shareholders’/ Investors’complaints and coordinates with the Registrar and Transfer Agent, M/s Karvy Computershare Pvt. Limited forredressal of grievances. During the year six complaints were received from shareholders and all complaints havebeen resolved to the satisfaction of the Complainants.

The Company has acted upon all valid transfers received during the period ended March 31, 2016 and no transferswere pending as on March 31, 2016.

d. Executive Committee

The Board has constituted an Executive Committee to exercise certain powers as to borrow upto certain limits, asdelegated by the Board from time to time; opening and closing of bank accounts and authorizing the Directors andofficers of the Company for operating the accounts; investment of surplus funds of the company upto certain limits;besides exercising such other powers as may be delegated by the Board from time to time.

The Executive Committee comprises of the following Members of the Board:

Mr. E. Sudhir Reddy

Mr. R. Balarami Reddy

Mr. S. C. Sekaran

IV Subsidiary Companies

The Company monitors the performance of its subsidiaries, HDO Technologies Limited, and DavyMarkham IndiaPrivate Limited interalia, by the following means:

The financial statements, in particular the investments made by the unlisted subsidiary, are reviewed by the AuditCommittee as well as by the Board.

The minutes of the Board Meetings of the subsidiary companies are noted at the Board Meetings of the Company.

V General Body Meetings

The details of the last three Annual General Meetings, i.e. Fortieth, Thirty Nineth and Thirty Eighth, Annual GeneralMeetings of the Company are as follows:

General Meetings Day, Date and Time Venue of the Meeting Special Resolution Passed at

40th Annual General Meeting Wednesday, All India Plastic ManufacturersSeptember, 23, 2015 Association, AIPMA House,at 2.00 p.m. A-52, Street No.1, MIDC, --

Andheri (East),Mumbai – 400 093

39th Annual General Meeting Monday, All India Plastic Manufacturers lllll Remuneration to Mr. S CSeptember 22, 2014 Association, AIPMA House, Sekaran, Executive Directorat 3.00 p.m. A-52, Street No.1, MIDC, lllll Alteration of Articles of

Andheri (East), AssociationMumbai – 400 093 lllll Increase of Borrowing

Powers

38th Annual General Meeting Monday, All India Plastic ManufacturersSeptember 23, 2013 Association, AIPMA House,at 3.00 P.M. A-52, Street No.1, MIDC, --

Andheri (East),Mumbai – 400 093

39


VI. Disclosures

During the year, there were no transactions of material nature with the Promoters, Directors or the management, theirsubsidiaries or relatives that had potential conflict with the interests of the Company. Register of Contracts containingthe transactions in which Directors are interested is placed before the Board regularly. Transactions with related partiesare disclosed in note no. 47.2 to the Financial Statements in the Annual Report.

There were no instances of non-compliance of any matter related to the Capital markets nor have any penalty/stricturesbeen imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority on such matters.

VII. Means of Communication

(i) Quarterly results- : Free Press Journal and Navshaktiwhich news papers normallypublished in

(ii) Any web site where displayed : www.bseindia.com, www.nseindia.comwww.hdo.in

(iii) Whether it also displays official : YesNews release and presentationsmade to Institutional Investors /Analysts

(iv) Whether Management Discussion : Yesand Analysis Report forms a part ofthe Annual Report.

In compliance with the Listing Agreement the Company has designated a separate e-mail address for the convenienceof the investors for redressal of investor grievances which is [email protected].

VIII. General Shareholders’ information

Annual General Meeting:

Annual General Meeting is proposed to be held on Saturday, September 24, 2016 at 3:00 p.m. at Registered Officeof the company at Dorr Oliver House, Chakala, Andheri (East), Mumbai – 400 099. Maharashtra.

Financial Calendar

(a) Financial year - April 1 to March 31

(b) Results will be published for the Quarter ended:

(i) June 30, 2016 - on or before September 14, 2016

(ii) September 30, 2016 - on or before November 15, 2016

(iii) December 31, 2016 - on or before February 15, 2017

(iv) March 31, 2017 - in May, 2017

Date of Book Closure

September 19, 2016 to September 24, 2016 (both days inclusive).

Listing on Stock Exchanges

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited and the National StockExchange of India Limited.

Listing fee has been paid to above Stock Exchanges for the year 2015-2016.

Stock Code

Bombay Stock Exchange Limited : 509627

National Stock Exchange of India Limited : HINDDORROL

ISIN allotted to the Company : INE551A01022

40


Stock Market Data

Month BSE NSE

Share Price Sensex Share Price Nifty

High Price Low Price Close High Price Low Price Close

Apr-2015 23.05 15.80 27011.31 23.20 15.50 8181.50

May-2015 19.00 15.00 27828.44 19.00 14.65 8433.65

Jun-2015 16.25 12.05 27780.83 16.40 11.75 8368.50

Jul-2015 24.34 13.50 28114.56 24.35 13.30 8532.85

Aug-2015 23.75 13.60 26283.09 23.80 13.80 7971.30

Sep-2015 17.50 13.55 26154.83 17.60 13.50 7948.90

Oct-2015 17.50 13.80 26656.83 17.55 13.70 8065.80

Nov-2015 17.60 12.25 26145.67 17.65 12.20 7935.25

Dec-2015 18.80 15.00 26117.54 18.65 14.75 7946.35

Jan-2016 21.05 12.65 24870.69 21.00 13.95 7563.55

Feb-2016 14.60 9.00 23002.00 14.70 9.10 6987.05

Mar-2016 11.40 9.42 25341.86 11.50 9.50 7738.40

Share Price Movement of HDO vis-à-vis BSE

Share Price movement on HDO vis-à-vis NIFTY

41


Registrar and Transfer Agents

M/s Karvy Computershare Pvt. LimitedKarvy Selenium, Tower B, Plot No. 31 and 32,Financial District, Gachibowli, Hyderabad – 500 032.Ph: 040 6716 1524 Email: [email protected] / [email protected]

Share holding pattern as on March 31, 2016

Category No. of Shares % of Shareholding

I Promoter’s holding

Indian promoters 39804430 55.28

Sub-total 39804430 55.28

II Non-promoters holding

Mutual funds 5422291 7.53

Foreign Portfolio Investors 275000 0.38

Sub-Total 5697291 7.91

III Others

Private Corporate Bodies 3369107 4.68

Indian Public 22150909 30.76

Non Resident Indians 882877 1.23

Clearing Members 94674 0.13

NBFCs registered with RBI 3300 0.01

Trusts 3220 0.00

Sub-Total 26504087 36.81

Total 72005808 100.00

Distribution of Shareholding as on March 31, 2016

DISTRIBUTION SCHEDULE AS ON MARCH 31, 2016

S. No Category Cases % of Cases Amount % Amount

1 upto 1 - 5000 17683 91.07 16784116 11.65

2 5001 - 10000 941 4.85 7068100 4.91

3 10001 - 20000 456 2.35 6862124 4.76

4 20001 - 30000 104 0.54 2606070 1.81

5 30001 - 40000 69 0.36 2518900 1.75

6 40001 - 50000 44 0.23 1971740 1.37

7 50001 - 100000 73 0.38 5198150 3.61

8 100001 and above 46 0.24 101002416 70.13

Total: 19416 100.00 144011616 100.00

Share Transfer System

Application for transfer of shares held in physical form is received at the office of the Registrar and Share TransferAgents of the Company. Stakeholders Relationship Committee approves valid transfers of shares and sharecertificates duly endorsed are dispatched within the time prescribed under the Listing Agreement/SEBI Guidelines.

42


Shares held in dematerialised form are electronically traded in the Depository and the Registrars and ShareTransfer Agents of the Company periodically receive from the Depository the beneficiary holdings so as to enablethem to update the records and to send all corporate communications, dividend warrants, etc.

The Company also offers the facility of transfer-cum-demat as per SEBI Guidelines.

Any complaints by investors/shareholders may be communicated through the designated e-mail id [email protected].

Dematerialization of shares and liquidity

Shares aggregating to 98.93 percent of the share capital have been dematerialized as on March 31, 2016.

Trading in Equity Shares of the Company is permitted only in dematerialised form with effect from December 26,2000 as per the Circular SMDRP/POLICY/CIR-23/2000 dated May 29, 2000 issued by the Securities and ExchangeBoard of India.

IX Address for correspondence:

The Company is operating from various work sites spread throughout the country and the operations are controlled by theHead office at Dorr-Oliver House, Chakala, Andheri East, Mumbai – 400 099 and through various Regional offices at:

CHENNAI KOLKATA

Hindustan Dorr-Oliver Limited Hindustan Dorr-Oliver Limited,30-A South Phase, 6th Cross Road Flat No.1A, 1st FloorThiru-vi-ka Indl. Estate, Guindy, 8C Queens Park, BallygungeChennai - 600 032 Kolkata - 700 019

NEW DELHI

Hindustan Dorr-Oliver Limited,“COREANTHUM”, A-41,Tower B, First Floor,Lobe – 4, Sector- 62,Noida – 201307 (U.P.)

X DISCLOSURES:

i. No materially significant related party transaction with Promoters, Directors, the management, the Subsidiaries orrelatives of the Directors which may have potential conflict with the interests of the Company at large have beendisclosed in the accounts along with the financial impact of the same elsewhere in the Annual Report.

ii. There have been no major instances of non-compliance by the Company on any matters related to the Capitalmarkets, nor have any penalty / strictures been imposed on the Company by the Stock Exchanges or SEBI or anyother statutory authority on such matters during the last three years.

iii. The Company Complied with all the applicable mandatory requirements of Clause 49 of the Listing Agreement andSEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company did not adopt Non-mandatory requirements.

iv. The Companies activities do not require any transactions involving commodities and hence there are no Commodityprice risks and Commodity hedging activities.

v. The Company Complied with the requirements of sub-paras (2) to (10) of Corporate Governance Report asspecified in schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

vi. The Company did not adopt the discretionary requirements as specified in Part E of Schedule II of SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015.

vii. The Company Complied with the Corporate governance requirements specified in regulation 17 to 27 and clauses(b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.

Code of Conduct for Directors and Senior Management:

A copy of the Code has been put on the Company’s website www.hdo.in.

The Code has been circulated to all the members of the Board and Senior Management and the compliance of thesame has been affirmed by them. A declaration signed by the Executive Director is given below:

Declaration

I hereby confirm that:

The Company has obtained from all the members of the Board and Senior Management, affirmation that they havecomplied with the Code of Business Conduct and Ethics for Directors and Senior Management in respect of thefinancial year 2015-2016.

Hyderabad S. C. SekaranMay 30, 2016 Executive Director

43


CORPORATE GOVERNANCE CERTIFICATE

ToThe Members ofHindustan Dorr Oliver Limited

We have examined the compliance of conditions of Corporate Governance by Hindustan Dorr Oliver Limited (“the Company”),for the year ended on March 31, 2016, as stipulated in Clause 49 of the Listing Agreement (‘Listing Agreement’) entered into by the Company with Stock Exchanges for the period April 01, 2015 to November 30, 2015 and as per the relevantprovisions of Securities and Exchange Board of India (listing Obligations and Disclosure Requirements) Regulations,2015, as referred to in Regulation 15(2) of the Listing Regulations 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 waslimited to a review of the procedure and implementations thereof adopted by the Company for ensuring compliance of theconditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of theCompany.

In our opinion and to the best of our information and according to the explanations given to us and the representations madeby the Directors, officers and the management, we certify that the Company has complied with the conditions of CorporateGovernance as stipulated in the above mentioned Listing Agreement / Listing Regulations.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

Hyderabad K NarasimhuluMay 30, 2016 Practicing Company Secretary

FCS - 7594 CP No.8225

CEO/CFO CERTIFICATION

ToThe Board of Directors ofHindustan Dorr Oliver Limited

We, S C Sekaran, Executive Director and S C Mundhekar, Chief Financial Officer, hereby certify that:

(a) We have reviewed financial statements and the cash flow statement for the year and that to the best of their knowledgeand belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements thatmight be misleading;

(ii) these statements together present a true and fair view of the listed entity‘s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions entered into by the listed entity during the year which arefraudulent, illegal or violative of the listed entity‘s code of conduct.

(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we haveevaluated the effectiveness of internal control systems of the listed entity pertaining to financial reporting and we havedisclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, ifany, 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 the Audit committee

(i) There is no significant change accounting policies during the year and that the same have been disclosed in thenotes to the financial statements; and

(ii) We are not aware of any instances of significant fraud if any, of the management or an employee having a significantrole in the listed entity‘s internal control system over financial reporting.

Hyderabad S.C. Sekaran S.C. MundhekarMay 30, 2016 Executive Director Chief Financial Officer

44

INDEPENDENT AUDITORS’ REPORT

To the Members ofHINDUSTAN DORR-OLIVER LIMITED

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of HINDUSTAN DORR-OLIVER LIMITED (“theCompany”), which comprises the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash FlowStatement for the year then ended, and a summary of significant accounting policies and other explanatory informationfor the year then ended.

2. Management’s Responsibility for the Standalone Financial Statements

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 andfair view of the financial position, financial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, readwith Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and forpreventing 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 ofadequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of theaccounting records, relevant to the preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal financial control relevant to the Company’s preparation of the standalone financial statementsthat give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualifiedaudit opinion on the standalone financial statements.

4. Basis for Qualified Opinion

We refer to:

a) Note 31 to the standalone financial statements in respect of preparation of financial statements of the Company ongoing concern basis for the reasons stated therein. The accumulated losses of the Company as at March 31, 2016amounting to ì 11,043.23 million have exceeded its net worth. Further, the Company’s current liabilities exceedcurrent assets by ì 12,147.27 million. The Company has obligations towards borrowings aggregating toì 9,704.37 million which include working capital loan and outstanding letters of credit/bill discounting from banks.The Company has obligations pertaining to operations including unpaid creditors and statutory dues, these mattersrequire the Company to generate additional cash flows to fund the operations as well as other statutory obligationsnotwithstanding the current level of low operating activities. This indicates the existence of a material uncertaintythat may cast significant doubt on the Company’s ability to continue as going concern and therefore the Companymay be unable to realize its assets and discharge its liabilities in the normal course of business. The standalonefinancial statement does not include any adjustment in this respect.

b) Note 36 to the standalone financial statements in connection with the existence of material uncertainties over therealisability of bank guarantees encashed by customers, unbilled revenue, trade receivables and withheld amountaggregating to ì 538.60 million, which are subject matters of various negotiations with the customers. Further, BankGuarantee of ì 526.70 million was encashed subsequent to this year end. The management of the Company isconfident of positive outcome of the negotiations and recovering the aforesaid dues. In view of pending-certificationof bills/slow progress/termination of these projects and lack of other alternate audit evidence to corroborate

45

AUDITORS’ REPORT (Contd.)

management’s assessment of recoverability of these balances, we are unable to comment on the extent to whichthese balances are recoverable.

c) Note 37 to the standalone financial statements in respect of invocation of corporate guarantees of ì 1,411.80 millionand initiation of recovery actions against the company in respect of such guarantees extended / executed for its onesubsidiary in favour of the lenders. No provision has been made in the accounts for such possible loss.

d) Note 32 to the standalone financial statements regarding investments and advances in its Indian subsidiary havingbook value aggregating to ì 1,538 million and ì 50 million respectively as at March 31, 2016, which were carried atfair value. In absence of valuation of investments in the subsidiary, we are unable to comment whether any provisionfor diminution/bad debts in the value of investment/advances is required.

e) Note 39 and 40 to the standalone financial Statements in respect of certain projects wherein the Management of theCompany has considered overdue trade receivables aggregating to ì 576.14 million and unbilled revenue amountingto ì 867.27 million, as good and fully recoverable and no provisions for the same have been made for the reasonsstated therein.

f) Note 38 to the standalone financial statements wherein one lender has initiated recovery proceedings against theCompany under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 in respect of outstanding loan aggregating to ì 5,961.16 million (including interest on WCTL and FITL ofì 177.92 million). The Bank has however demanded ì 6,545 million. The difference being penal and other charges,the company has not provided for the same for the reason stated therein.

g) Note 34 to the standalone financial statements, in respect of trade receivables, mobilization advances, retentionmoney, trade payables and certain bank balances, external confirmations of the balances are not available. Due tonon-availability of confirmation of balances, we are unable to quantify the impact, if any, arising from the confirmationof balances.

h) Note 35 to the standalone financial statements, wherein the Company has not received confirmation from one ofthe lender having outstanding of ì 1,520.10 million (including interest accrued of ì 276.36 million) as at March 31,2016. Due to non-availability of confirmation of balances, we are unable to quantify the impact, if any, arising fromthe confirmation of balances.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects ofthe matters described under paragraph 4(b) and 4(e) and possible effects of the matters described under paragraph4(a), 4(c), 4(d), 4(f), 4(g) and 4(h) of the basis for qualified opinion paragraph of the aforesaid Standalone financialstatements give the information required by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016,and its losses and its cash flows for the year ended on that date.

6. Emphasis of matters

Attention is invited to note 42 of the standalone financial statements in respect of pending winding up petitions againstthe company and the matter is subjudice.

Our opinion is not qualified in respect of this matter.

7. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), as amended, issued by the CentralGovernment of India in terms of sub-section (11) of section 143 (ii) of the Act, we give in the “Annexure A” astatement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

a) we have sought and except for the matters described under “Basis for qualified opinion“ paragraph, haveobtained all the information and explanations which to the best of our knowledge and belief were necessary forthe purposes of our audit;

b) Except for the effects/possible effects of matters described in the “Basis for qualified opinion” paragraph, in ouropinion proper books of account as required by law have been kept by the Company so far as it appears fromour examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report arein agreement with the books of account.

d) In our opinion, except for the effects/possible effects matters described in the “Basis for qualified opinion“paragraph, the aforesaid Standalone financial statements comply with the Accounting Standards specifiedunder section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

46


e) The matters described in the basis for qualified opinion and Emphasis of matters paragraph, in our opinion,may have an adverse effect on the functioning of the Company;

f) On the basis of the written representations received from the directors as on March 31, 2016 and taken onrecord by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from beingappointed as a director in terms of Section 164 (2) of the Act.

g) The qualifications relating to the maintenance of accounts and other matters connected there with are asstated in the Basis for Qualified Opinion paragraph.

h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and theoperating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses aqualified opinion on the adequacy and effectiveness of the Company’s Internal Financial Controls over FinancialReporting.

i) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalonefinancial statements – Refer Note 30 to the standalone financial statements;

ii. Except for the effects/possible effects of matters described under basis of qualified opinion paragraph, theCompany has made provision, as required under the applicable law or accounting standards, for materialforeseeable losses, if any, on long-term contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education andProtection Fund by the Company.

For CHATURVEDI & PARTNERSChartered Accountants

Firm Registration No. 307068E

RAVINDRA NATH CHATURVEDIHyderabad PartnerMay 30, 2016 Membership No. 092087

“Annexure A” to the Independent Auditors’ Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal and Regulatory Requirement’ of our report of even dateto the standalone financial statements of the Company for the year ended March 31, 2016:

i (a) The Company has maintained proper records showing full particulars including quantitative details and situationof fixed assets except description and current location of assets.

(b) Fixed assets were not physically verified by the management during the year. Hence, we are unable to commentwhether there are any material discrepancies and any adjustment is required in the books of account.

(c) The title deeds of immovable properties are held in the name of the company. According to the information andexplanations given to us, the original title deeds are held by the lenders.

ii The Company did not have any inventory as at the year end.According to the information and explanations given to us,the management has conducted physical verification of inventory at reasonable intervals.

iii The Company had in earlier year, granted interest free unsecured loans and advances of ì 1,472.37 million to two of itswholly own subsidiary companies.

(a) In our opinion, the terms and conditions of the loans granted by the company having regard to the cost of funds tothe company are prejudicial to the interest of the company.

(b) The schedule of the repayment of the principal has not been stipulated; hence we are unable to comment as towhether repayments are regular.

(c) As the schedule of repayment has not been stipulated and considering the provision for such loans, we are unableto comment whether any amount is overdue and whether reasonable steps have been taken by the company forrecovery of the principal.

47


iv In our opinion and according to the information and explanation given to us, the Company has not given loans, investment,guarantees and security during the year within Section 185 and 186 of the Companies Act, 2013. Accordingly, the clause(iv) of paragraph 3 of the Order is not applicable to the Company.

v According to the information and explanations given to us, the Company has not accepted any deposits within themeaning of Sections 73 to 76 of the Companies Act, 2013, and the rules framed there under to the extent notified.

vi We have broadly reviewed the cost records maintained by the Company pursuant to the Rules made by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie, theprescribed accounts and records have been made and maintained. We have, however, not made a detailed examinationof these records with a view to determining whether they are accurate or complete.

vii (a) According to information and explanations given to us and records of the Company examined by us, the Companyhas not been depositing undisputed statutory dues in respect of provident fund, income tax, sales tax, service tax,duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities.There have been significant delays in a large number of cases in depositing these dues with the appropriateauthorities. Further, there were no undisputed amounts payable in respect of wealth tax, custom duty and exciseduty except in respect of effect of pending reconciliation of service tax pending from previous years, the effect ofwhich cannot be ascertained, and income tax, sales tax and other statutary dues which are in arrears as at March31, 2016 for a period of more than six months from the date on when they became payable. The details of sucharrears are given in Appendix -I to this report.

(b) According to the information and explanations given to us and records of the Company examined by us, particularsof dues outstanding in respect of income tax, sales tax, service tax, duty of customs,duty of excise and value addedtax which have not been deposited on account of any dispute are given in Appendix-II to this report.

viii According to the information and explanations given to us, there are no loans or borrowings payable to the Government,Financial Institution and Debenture holders. The Company has defaulted in repayment of loans or borrowing frombanks. The details of such defaults are given in Appendix-III.

ix According to the information and explanations given to us, the company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions ofclause 3 (ix) of the Order are not applicable to the company.

x According to the information and explanations given to us, no fraud by the Company or on the Company by its officers oremployees have been noticed or reported during the year;

xi According to the information and explanations given to us and based on the audit procedures conducted by us, ManagerialRemuneration has been provided in accordance with the requisite approval Mandated by the provisions of Section 197read with Schedule V to the Companies Act.

xii In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company.Therefore, the provisions of Para 3 (xii) of the Order are not applicable to the Company.

xiii In our opinion and according to the information and explanations given to us, all transactions with the related parties arein compliance with section 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosedin the standalone Financial Statements as required by the applicable accounting standards.

xiv According to the information and explanations given to us, the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of clause3 (xiv) of the Order are not applicable to the company.

xv According to the information and explanations given to us, the company has not entered into any non-cash transactionswith directors or persons connected with them.The provisions of clause 3 (xv) of the Order are not applicable to thecompany.

xvi In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934.




48

ANNEXURE “B” TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTSOF HINDUSTAN DORR-OLIVER LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“theAct”)

We have audited the internal financial controls over financial reporting of HINDUSTAN DORR-OLIVER LIMITED (“the Company”)as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year endedon that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of itsbusiness, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of fraudsand errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financialinformation, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the “Guidance Note”) and the Standards on Auditing, to the extent applicable to an audit of internal financialcontrols, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financialcontrols over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements,whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinionon the Internal Financial Control over Financial Reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal financial control over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detectionof unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusionor 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 internal financial controls over financial reporting to future periods are subject to therisk that the internal financial control over financial reporting may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate.


49

Basis for Qualified Opinion

In our opinion and according to the information and explanations given to us and based on our audit, the following materialweaknesses have been identified as at March 31, 2016:

The Company did not have appropriate internal financial controls over (a) Assessment of recoverability of bank guaranteesencashed by customers, unbilled revenue, trade receivables and withheld amounts which are subject matters of variousdisputes / negotiations with the customers and contractors due to delay in completion of contracts and other disputes. (b)Assessment of provision required in respect of invocation of corporate guarantees and initiation of recovery actions againstthe Company in respect of such guarantees extended / executed for its subsidiary in favour of the lenders. (c) Assessmentof “other than temporary diminution” of long term equity investment in subsidary company whose net worth has eroded andcontinues to incur losses as on March 31, 2016. (d) Control over reconciliation of subcontractors work bills with the work billssubmitted to the clients and physical progress of works completed, which could potentially result into inaccurate estimationof percentage of work completed and consequently delay in the realization of unbilled revenue/ receivables. (e) Controls overprojects costs estimation and review of balance costs to complete in respect of work projects, which could potentially resultinto inaccurate estimation of foreseeable losses on works contracts. (f)Process of obtaining confirmations from tradereceivables, advances, retention money, trade payables and bank balances at regular interval. (g) Physical verification offixed assets at regular interval.

The inadequate supervisory and review control over Company’s process in respect of its aforesaid assessment in accordancewith the accounting principles generally accepted in India could potentially result in a material misstatement in preparationand presentation of financial statement including the profit after tax.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting,such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis.

Qualified opinion

In our opinion, except for the effects of material weaknesses described in “basis of qualified opinion” paragraph above, theCompany has, in all material respects, an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internalcontrol over financial reporting criteria established by the Company considering the essential components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent ofaudit tests applied in our audit of the March 31, 2016 standalone financial statements of the Company, and these materialweaknesses have affected our opinion on the standalone financial statements of the Company we have issued a qualifiedopinion on the standalone financial statements.





50


Appendix-I as referred to in Para vii(a) of the Annexure -A to the Independent Auditors’ Report

(ì in million)

Statute Nature Amount Period to which Due Date Date of

amount relates Payment

Professional Tax Act, 1975 Professional Tax 0.03 Upto 2014-2015 30th of next month Not Paid

0.34 April 2015 to August 2015 30th of next month Not Paid

Income Tax Act, 1961 Tax Deducted at Sources 5.52 2013-2014 7th of next month except Not Paid

for March-May 30

34.26 2014-2015 7th of next month except Not Paid

for March-May 30


Income Tax Act, 1961 Tax Collected at Sources 0.17 2014-2015 7th of next Month Not Paid

Employees’ Provident Provident Fund 4.89 April 2015 to August 2015 15th of next month Not Paid

Funds & Miscellaneous

Act, 1952

Sales Tax/ VAT Act of various Works Contract Tax 26.38 2013-2014 21st of next month Not Paid

States and The Central Sales 16.89 2014-2015 21st of next month Not Paid

Tax Act, 1956 1.72 April 2015 to June 2015 21st of next month Not Paid

0.17 August 2015 September 21, 2015 Not Paid

Sales Tax/VAT 50.01 2013-2014 21st of next month Not Paid

24.92 2014-2015 21st of next month Not Paid

0.06 June 2015 July 21, 2015 Not Paid

The Finance Act, 1994 Service Tax 18.65 2014-2015 6th of next month Not Paid


51


Appendix-II as referred to in para vii (b) of the Annexure-A to the Independent Auditors’ Report

(ì in million)

S. No Name of the Statute Nature of Dues Amount Period Forum where disputeto which the is pending

amount relates

1 Income Tax Act, 1961 Income Tax 16.70 AY1997-1998 to 1999-2000, ITATand 2001-2002

Income Tax 24.65 AY2008-2009 and 2012-2013 CIT (A)

2 Central Sales Tax Act, 1956, Sales Tax/ WCT/ VAT 4.49 1999-2000 to 2000-2001 A. C. (Appeal)Value Added Tax and Sales and 2002-2003Tax Act of Various States.

91.85 2008-2009 and 2011-2012 CTO Agipura Circle

70.50 2011-2012 and 2013-2014 CTO Bellary

3.57 2009-2010 CTO Jaipur

42.60 2011-2012 ADD’L. CTO

95.40 1984-1985,1992-1993, D. C. (Appeal)1994-1995, 1997-1998 to

1998-1999, 2002-2003, 2006-2007,2007-2008,

2009-2010 to 2011-2012

12.48 1988-1989 and 1995-1996 High Court

312.39 2002-2003 to 2006-2007 J.C.(Appeal)and 2008-2009 to

2009-2010

0.23 1992-1993 S. T. O.

1.83 1987-1988 to 1990-19911993-1994, 1995-1996. Tribunal

126.53 2009-2010 to 2010-2011 Appeal Yet to be filed

3 The Finance Act, 1994 Service Tax 165.20 2007-2008 to 2011-2012 CESTAT

Service Tax 48.40 2012-2013 and 2013-2014 CCE (A)

4 Custom Act, 1962 Custom Duty 0.08 1992-1993 The collector of customs(Judicial), Mumbai

Appendix-III as referred to in para viii of Annexure -A to the Independent Auditor’s Report

(ì in million)

Amount of Default Period of Default As at

Particulars (in days) March 31, 2016

Repayment of Term Loans

Standard Chartered Bank 82.92–912.08 989-75 912.08

Bank of India 23.28 -1,505.44 549-43 1,505.44

Bank of India 6.99–66.77 549-43 66.77

Andhra Bank 5.84-29.19 276-1 29.19

Interest on Term Loans

Standard Chartered Bank 29.35–276.36 989-75 276.36

Bank of India 14.41 -300.25 610-1 300.25

Bank of India 0.56–11.74 549-1 11.74

Andhra Bank 2.33 – 25.12 276-1 25.12

Working Capital Loan – Cash Credit

ICICI Bank 3.51 - 8.45 56-1 8.13

Bank of India 4.23 – 2,353.17 589-43

Andhra Bank 0.41-1,671.59 288-1 1,617.59

Default from the demand notice

Bank of India 3,393.14-3,418.69 43-1 3,418.69

Interest on Working Capital Loan – NPA

Bank of India 24.77 –658.26 488-1 658.26

52

BALANCE SHEET AS AT MARCH 31, 2016

(All amounts in ì million unless otherwise stated)

As at As atParticulars Note No. March 31, 2016 March 31, 2015

I. EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital 3 144.01 144.01

(b) Reserves and surplus 4 (8,942.73) (7,310.11)

2 Non-current liabilities

(a) Long-term borrowings 5 188.27 1,833.49

(b) Long-term provisions 6 12.20 13.52

3 Current liabilities

(a) Short-term borrowings 7 3,201.18 5,434.04

(b) Trade payables 8 3,697.40 3,462.84

(c) Other current liabilities 9 8,889.81 2,960.31

(d) Short-term provisions 10 663.39 1,149.71

Total 7,853.53 7,687.81

II. ASSETS

1 Non-current assets

(a) Fixed assets 11

(i) Tangible assets 1,105.20 1,110.42

(ii) Intangible assets 1.59 2.09

(b) Non-current investments 12 1,538.58 1,538.58

(c) Deferred tax assets (net) 13 - -

(d) Long-term loans and advances 14 123.13 163.73

(e) Other non-current assets 15 780.53 849.55

2 Current assets

(a) Inventories 16 - -

(b) Trade receivables 17 1,309.71 1,141.32

(c) Cash and bank balances 18 26.86 36.15

(d) Short-term loans and advances 19 962.63 1,054.18

(e) Other current assets 20 2,005.30 1,791.79

Total 7,853.53 7,687.81

Significant accounting policies and

notes on financial statements 1 to 53

As per our report of even date.

For CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Chartered Accountants

Firm Registration Number: 307068E

RAVINDRA NATH CHATURVEDI S.C. SEKARAN R. BALARAMI REDDY

Partner Executive Director Director

Membership No. 092087

Hyderabad, G RAMAKRISHNA S. C. MUNDHEKAR

May 30, 2016 Company Secretary Chief Financial Officer

53

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016


For the For theYear Ended Year Ended

Particulars Note No. March 31, 2016 March 31, 2015

I Revenue from operations 21 2,053.82 3,483.02Less : Excise Duty - -

Revenue from Operation (Net) 2,053.82 3,483.02

II Other income 22 39.21 156.82

III Total Revenue(I + II) 2,093.03 3,639.84

IV ExpensesCost of material/ services consumed 23 1,371.33 1,950.02Cost of material trading 603.92 2,283.47Changes in inventories of work-in-progress 24 - 31.42Employee benefits expense 25 177.29 237.06Finance costs 26 1,327.83 1,105.48Depreciation and amortization expenses 11 6.00 11.61Other expenses 27 225.65 2,639.57

Total Expenses 3,712.02 8,258.63

V Profit/(loss) before extraordinary/exceptional items,prior period items and tax(III-IV) (1,618.99) (4,618.79)

VI Exceptional items/ prior period adjustments 33 - 2,011.16

VII Profit/(loss) before tax (V-VI) (1,618.99) (6,629.95)

VIII Tax expenseProvision for tax - 1.79Current tax (in respect of earlier year) 13.63 0.34Deferred tax 33 - 1,099.47

IX Profit/(loss) for the period (VII-VIII) (1,632.62) (7,731.55)

X Earning per equity share before extraordinary items:(face value of ì 2/-each)Basic and diluted 29 (22.67) (107.37)

XI Earning per equity share after extraordinary items:(face value of ì 2/-each)Basic and diluted 29 (22.67) (107.37)

Significant accounting policies andnotes on financial statements 1 to 53










54

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016


For the Year Ended For the Year Ended Particulars March 31, 2016 March 31, 2015

CASH FLOWS FROM OPERATING ACTIVITIES

Net Profit/(loss) before taxation (1,618.99) (6,629.95)

Adjustments for

Depreciation and amortisation 6.00 11.61

(Profit)/loss on sale of fixed assets - (15.58)

Provision for investment - 73.51

Provision for doubtful debts 34.94 1,239.43

Provision for advances 1.73 528.78

Provision for advances of subsidiary - 1,422.37

Provision for foreseeable losses 21.20 1,142.66

Profit on sale of investment - (12.31)

Interest and finance charges 1,327.83 1,105.48

Interest income (4.38) (30.24)

Dividend income (0.01) (0.10)

Bad debts written off 0.02 -

(Gain)/loss on exchange (net) 70.16 1,457.49 46.71 5,512.32

Operating profit before working capital changes (161.50) (1,117.63)

(Increase)/decrease in inventories - 78.79

(Increase)/decrease in trade receivables (134.32) (648.57)

(Increase)/decrease in loans and advances (123.48) 970.26

Increase/(decrease) in current liabilities (330.67) (588.47) 32.02 432.50

Cash generated from operations (749.97) (685.13)

Taxes (paid)/refund 26.98 30.20

Net cash generated from operations (722.99) (654.93)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (0.28) (0.08)

Sale of fixed assets - 18.69

Proceeds from sale of investments - 28.41

Dividend received 0.01 0.10

Interest received 4.15 3.88 30.25 77.37

Net cash used in investing activities 3.88 77.37

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 1,178.45 1,243.08

Dividend paid (0.10) (0.11)

Interest and finance charges paid (468.52) 709.83 (714.46) 528.51

Net cash provided by financing activities 709.83 528.51

NET (DECREASE)/ INCREASE IN CASH AND CASH

EQUIVALENTS DURING THE YEAR (9.29) (49.05)

Cash and cash equivalents at the beginning of the year 36.15 85.20

Cash and cash equivalents at the end of the year 26.86 36.15

55

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016 (Contd.)


Notes

1. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 oncash flow statement.

2. Figures in brackets indicate cash outflow.

3. Previous year figures have been regrouped and recast wherever necessary to confirm to current year classification.

4. Cash and cash equivalents include:

For the Year Ended For the Year Ended Particulars March 31, 2016 March 31, 2015

Cash balance on hand 3.63 2.66

Balances with scheduled banks

- In current accounts 16.97 18.65

- In margin money deposit 5.44 13.92

- In dividend account 0.82 0.92

26.86 36.15










56

Notes forming part of the Financial Statements


1. COMPANY OVERVIEW

The Company is engaged in the business of providing Engineering and Turnkey solutions, technology and EPCinstallations in liquid solid separation applications in various industry segments like mineral processing andbeneficiation, pulp and paper processing, fertilizer and chemicals and environmental management.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

The financial statements are prepared under historical cost convention in accordance with the generally acceptedaccounting principles in India (“Indian GAAP”) and comply in all material respects with the Accounting Standardsspecified under Section 133 of the Companies Act, 2013 (“the Act 2013”)/ Companies Act, 1956 (‘the Act, 1956), readwith Rule 7 of the Companies (Accounts) Rules, 2014 and other pronouncements of the Institute of CharteredAccountants of India (“ICAI”). The accounting policies applied by the Company are consistent with those used in theprevious year, unless otherwise stated.

All the assets and liabilities have been classified as current or non-current, wherever applicable, as per the operatingcycle of the Company as per the guidance as set out in the Schedule III of the Companies Act, 2013.

Operating cycle for the business activities of the Company covers the duration of the specific project/contract/projectline/service including defect liability period, wherever applicable and extends up to the realizations of receivables(including retention money) within the agreed credit period normally applicable to the respective project.

b) Use of Accounting Estimates

The preparation of the financial statements in conformity with GAAP requires the management to make estimatesand assumptions that affect the balances of assets and liabilities and disclosures relating to contingent liabilitiesas at the reporting date of the financial statements and amounts of income and expenses during the year ofaccount. Examples of such estimates include contract costs expected to be incurred to complete constructioncontracts, provision for doubtful debts, income taxes and future obligations under employee retirement benefitplans.

Although these estimates are based upon management’s best knowledge of current events and actions, actualresults could differ from these estimates. Any revision to accounting estimates is recognized prospectively in thecurrent and future periods.

c) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprise ofpurchase price, freight, non-refundable duties, taxes and any other cost attributable to bringing the asset to itsworking condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantialperiod of time to get ready for its intended use are also included to the extent they relate to the period till such assetsare ready for its intended use. Assets retired from active use and held for disposal are stated at their estimated netrealizable values or net book values, whichever is lower.

Capital work in Progress comprises advances paid to acquire fixed assets and the cost of fixed assets not ready fortheir intended use as at the reporting date of the financial statements.

d) Impairment

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment ofassets. If any indication of such impairment exists, the recoverable amount of such assets is estimated andimpairment is recognized if the carrying amount of these assets exceeds their recoverable amount. The recoverableamount is greater of the asset’s net selling price and value in use. In assessing value in use, the estimated futurecash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciationis provided on the revised carrying amount of the asset over its remaining useful life.

e) Investments

Current investments are carried at lower of cost and fair value. Long-term investments are stated at cost. Provisionfor diminution in value is made to recognize a decline other than temporary in the value of such investments.

f) Depreciation/Amortization

Depreciation is provided on the basis of the straight-line method as per useful life prescribed in Schedule II of theCompanies Act, 2013 on the original cost of the Fixed Assets.

57

Notes forming part of the Financial Statements (Contd.)


The useful life of the assets is given below:

S. No. Particulars Useful life in year

(i) Buildings (including company-owned flats) 60(ii) Plant and machinery

Diesel generating sets 15welding machines 12Air conditioners 5Office equipment 5

(iii) Motor vehicles/Motor cycle/Hydra (crane) 8 /10 /15(iv) Furniture and fittings 10(v) Computers/Computer (software) 3 and 6 / 5

The premium, being the cost of leasehold land, is amortized over the lease period.

Technical Know-how is amortized over a period of five years in equal installments.

g) Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of a qualifying asset are capitalized as apart of the cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one thatrequires substantial period of time to get ready for its intended use. Other borrowing costs are recognized as anexpense in the year in which they are incurred.

h) Inventories:

Inventories are valued at lower of cost and net realizable value after providing for obsolescence and other anticipatedlosses, if any. Cost of manufactured goods and Work-in-Progress include related overheads incurred in bringingthe inventories to their present location and condition and excise duty paid/payable.

i) Revenue Recognition:

Contracts Revenue

Contract Revenue is recognized by reference to the stage of completion of the contract activity at the reporting dateof the financial statements on the basis of percentage of completion method.

The stage of completion of contracts is measured by reference to the proportion that contract costs incurred for workperformed up to the reporting date bear to the estimated total contract costs for each contract.

An expected loss on the construction contract is recognized as an expense immediately when it is certain that thetotal contract costs will exceed the total contract revenue.

Price escalation and other claims and/or, variation in the contract work are included in contract revenue only whennegotiations have reached an advanced stage such that it is probable that the customer will accept the claim; andthe amount that is probable will be accepted by the customer can be measured reliably.

Incentive payments, as per customer-specified performance standards, are included in contract revenue onlywhen the contract is sufficiently advanced and that it is probable that the specified performance standards will bemet and the amount of the incentive payment can be measured reliably.

Others

In the case of other contracts, sales and profits are accounted for on the basis of actual work done on the contracts/ dispatch of items.

Revenue from Sale of Goods

Revenue from sale of goods is recognized when substantial risks and rewards of ownership are transferred to thebuyer under term of the contract.

j) Foreign Currency Transactions

a. The reporting currency of the Company is Indian Rupee.

b. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchangerate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reportedusing the closing rate.

c. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at eachbalance sheet date at the closing date are recognized as income or expense in the period in which they arise.

58



k) Employee Benefits

i) Gratuity

The company provides for obligation towards Gratuity, a defined benefit plan, covering eligible employees onthe basis of an actuarial valuation using the projected unit credit method as at the year end. In case of fundeddefined plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefitplans to recognize the net obligation. Further, for certain employees, contributions are made to the fundadministered by the management.

ii) Superannuation

Contributions made under a scheme of Life Insurance Corporation of India are charged to the statement ofprofit and loss.

iii) Leave Encashment

Liability for leave encashment is provided on the basis of actuarial valuation using the projected unit creditmethod as on the Balance Sheet date. Actuarial Gain/Losses, if any, are immediately recognized in the statementof profit and loss.

iv) Provident Fund

The contribution towards Provident Fund is made to the Statutory Authorities/ fund administered by themanagement and is charged to the statement of profit and loss.

l) Provisions and Contingencies

A provision is recognized when the Company has a present legal or constructive obligation as a result of past eventand it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliableestimate can be made. Provisions are not discounted to its present value and are determined based on bestestimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet dateand adjusted to reflect the current best estimates. Contingencies are recorded when it is probable that a liability willbe incurred, and the amount can be reasonably estimated. Contingent liabilities are disclosed by way of a note tothe accounts. Contingent assets are not recognised in the financial assets.

m) Income Taxes

Tax Expenses for the year comprises both current tax and deferred tax. Current tax is determined as the amount oftax payable in respect of taxable income for the year. Deferred tax is recognized on timing differences, being thedifference between taxable income and accounting income that originate in one period and are capable of reversalin one or more subsequent periods and quantified using the tax rates and law enacted or substantively enacted bythe reporting date. Where there is an unabsorbed depreciation or carry forward loss, deferred tax assets arerecognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognizedonly to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed for theappropriateness of their respective carrying values at each balance sheet date.

n) Earnings Per Share

Basic earnings per share is calculated by dividing the net earnings after tax for the year attributable to equityshareholders by the weighted average number of equity shares outstanding during the year.

For calculating diluted earnings per share, the number of shares comprises the weighted average shares consideredfor deriving basic earnings per share, and also the weighted average number of shares, if any which would havebeen used in the conversion of all dilutive potential equity shares. The number of shares and potentially dilutiveequity shares are adjusted for the bonus shares and the sub-division of shares, if any.

o) Contingent Liabilities

Contingent liabilities are determined on the basis of available information and are disclosed by way of a note to theaccounts.

p) Internal Financial Control System

The Company has sufficient system of internal Financial Controls to help Management to review the effectivenessof the Financial and Operating Controls and assurance about adherence to the Company’s laid down Systems andProcedures. As per the provisions of the Companies Act, 2013 internal controls and documentation are in place forall the activities. Statutory auditors have verified, internal financial controls (IFC) at entity level and operations leveland satisfied about control effectiveness. The controls are reviewed at regular intervals to ensure that transactionsare properly authorized and correctly reported and assets are safeguarded. The Audit committee periodicallyreviews the findings and recommendations of the Auditors and takes corrective actions as deemed necessary. Thein house developing software periodically for reviewing various financial reports is in implementation for most ofthe Projects sites that would further strengthen the internal control mechanism.

59



3 Share Capital

As at March 31, 2016 As at March 31, 2015

Particulars Number Amount Number Amount

Authorised :

Equity shares of ì 2 each 10,00,00,000 200.00 10,00,00,000 200.00

Issued, subscribed and paid-up :


3.1 Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting year :



Number of equity shares at thebeginning and end of the year 7,20,05,808 144.01 7,20,05,808 144.01

3.2 Rights, preferences and restrictions attached to equity shares :

The Company has only one class of Equity Shares having a par value of ì 2 per share. Each holder of equity shares isentitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled toreceive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be inproportion to the number of equity shares held by the shareholders.

3.3 Equity shares held by holding Company:



Number of equity shares at the beginningand end of the year 3,98,04,430 79.61 3,98,04,430 79.61

3.4 Details of shareholder holding more than 5 percent shares in the company:


Name Number % Shareholding Number % Shareholding

IVRCL Limited, the holding company 3,98,04,430 55.28 3,98,04,430 55.28

3.5 Aggregate number of equity shares alloted as fully-paid up by way of bonus shares


Particulars Year Number Year Number

Equity shares were issued as fully paid bonusshares by capitalisation of general reserve 2009-2010 3,60,02,904 2009-2010 3,60,02,904

3.6 Details of Shares Reserved for issue under options

As part of restructuring of working capital limits approved by consortium of Banks, ì 150 million towards share applicationmoney of Promoters.

60



As at As atNote Particulars March 31, 2016 March 31, 2015

4 Reserves and Surplus

Revaluation Reserve (refer note 11(a))Balance at the beginning and end of the year 905.67 905.67

905.67 905.67

Securities Premium AccountBalance at the beginning and end of the year 222.34 222.34

222.34 222.34

General ReserveBalance at the beginning and end of the year 972.49 972.49

972.49 972.49

Surplus/(deficit) in the Statement of Profit and LossBalance at the beginning of the year (9,410.61) (1,678.17)Depreciation on transition to schedule II of theCompanies Act 2013 (refer note 11(c)) - (0.89)Add/(less): Profit/(loss) for the year (1,632.62) (7,731.55)

Closing balance (11,043.23) (9,410.61)

Total (8,942.73) (7,310.11)

5 Long term borrowings

Secured

From banksExternal commercial borrowing (refer note 35) - 312.95Working capital term loan (WCTL) (refer note 9.1 and 38) 188.27 1,512.00Funded interest term loan (FITL) (refer note 9.1 and 38) - 8.54

Total 188.27 1,833.49

5.1 During the previous year, Andhra Bank (consortium partner) vide their letter dated July 20, 2013 (‘sanction/restructuringof working capital limits’) has approved the company’s financial restructuring package in respect of credit facilitieseffective from April 1, 2013. As per the restructuring package, a part of the debts outstanding in respect of cash creditfacilities aggregating to ì 294.66 million and ì 3.65 million have been converted into working capital term loan andfunded interest term loan (i.e. WCTL and FITL) respectively.

5.2 Nature of security

a. External commercial borrowings is secured by first charge over the land and builiding situated at Mumbai (thecompany’s corporate office) along with other assets of the company with current value not less than 1.25x of thefacility amount. Borrowing is further secured by first charge over the existing fixed assets and current assets ofDavyMarkham Limited, UK.

b. Working capital term loan and Funded interest term loan from banks are secured by hypothecation of entire stocks,book debts, outstanding money receivable, claims and bills (both present and future). The loan is further securedby fixed assets owned by wholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat), residualcharge over building at Andheri, Mumbai and flats situated in Mumbai and flat owned by wholly owned subsidiarycompany situated at Vatva, Ahmedabad (Gujarat). The facility is further secured by corporate guarantee of theholding company and HDO Technologies Limited (subsidiary company) and pledge of 29.38 percent shares of thecompany held by IVRCL Limited (holding company).The facility carries interest @11 percent p.a.

61



5.3 Terms of repayment

a. External commercial borrowings:-Repayable in sixteen equal quarterly installments with the first installment dueon April 17, 2013 (i.e. at the end of fifteenth month from the date of disbursement) and ending on January 17, 2017,three months USD LIBOR as prevailing at the start of every interest period plus margin (300 bps) payable inarrears at the end of every interest period net of withholding tax or deductions, if any.

b. Working capital term loan:- Repayable in twenty four quarterly installments after moratorium period, of ninemonths (in case of Andhra Bank) and twelve months (in case of Bank of India), commencing from April 01, 2013 (incase of Andhra Bank) and December 31, 2012 (in case of Bank of India), with the first installment due on March2014 and ending on December 2019.

c. Funded interest term loan:- Repayable in ten equal quarterly installments after moratorium period, of nine months(in case of Andhra Bank) and twelve months (in case of Bank of India), commencing from April 01, 2013 (in caseof Andhra Bank) and December 31, 2012 (in case of Bank of India), with the first installment due on March 2014and ending on June 2016.

5.4 Default in repayment of dues to banks

Amount of Period of As atParticulars default default in days March 31, 2016

Repayment of term loans 82.92 - 912.08 989-75 912.0823.28 - 1,505.44 549-43 1,505.44

6.99 - 66.77 549-43 66.775.84 - 29.19 276-1 29.19

Interest on term loans 29.35 - 276.36 989-75 276.3614.41 - 300.25 610-1 300.25

0.56 - 11.74 549-1 11.742.33 - 25.12 276-1 25.12


6 Long term provisions

For employee benefits 12.20 13.52

Total 12.20 13.52

7 Short term borrowings

SecuredFrom banksWorking capital loan (WCL) 3,201.18 5,434.04(refer note 7.1, 7.2,7.3, 9.1 and 38)

Total 3,201.18 5,434.04

7.1 During the previous year Andhra Bank (Consortium partner) vide their letter dated July 20, 2013 (‘sanction/restructuringof working capital limits’) has approved the company’s financial restructuring package in respect of credit facilitieseffective from April 01, 2013. Pursuant to ‘sanction/restructuring of working capital limits’, fund based and non fundbased credit facilities aggregating to ì 180 million and ì 772 million respectively, have been carved out from the existingsanctioned limits of the company and accordingly the same stands vested with wholly owned subsidiary company.


Consortium of Bank of India and Andhra Bank

Working capital loan from banks are secured by hypothecation of entire stocks, book debts, outstanding moneyreceivable, claims and bills (both present and future), fixed assets owned by wholly owned subsidiary companysituated at Vatva, Ahmedabad (Gujarat), residual charge over building at Andheri, Mumbai and flats situated in Mumbaiand flat owned by wholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat). The facility is furthersecured by corporate guarantee of the holding company and HDO Technologies Limited (subsidiary company) andpledge of 29.38 percent shares of the company held by IVRCL Limited (holding company).The facility carries [email protected] percent p.a.

62



ICICI Bank

Working capital loan from banks are secured by first and exclusive charge on all the current assets (includingreceivables) and movable fixed assets related to OPaL project and second paripassu charge on factory land andbuilding owned by wholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat), and building at Andheri,Mumbai and flats situated in Mumbai and flat owned by wholly owned subsidiary company situated at Vatva, Ahmedabad(Gujarat). The facility carries interest @ 13 percent p.a.

7.3 Default in repayment of dues to banks

Amount of Period of default As atParticulars default (in days) March 31, 2016

Working capital loan 3.89 - 8.13 32-1 8.13107.93 - 1,671.59 288-1 1,671.59

4.23 - 2,353.17 589-43

Default from the date of demand notice 3393.14 - 3,418.69 43-1 3,418.69

Interest on working capital loan 24.77 - 658.26 488-1 658.26

As at As at

Note Particulars March 31, 2016 March 31, 2015

8 Trade payables

Dues to micro enterprises and small enterprises (refer note 28) 19.93 18.70Acceptances (refer note 5.2) 9.11 442.88Other trade payables (refer note 34) 3,668.36 3,001.26

Total 3,697.40 3,462.84

9 Other current liabilities

Current maturities of long term debt 1,324.01 1,188.23Liabilities towards WCTL,FITL,WCL and interest (refer note 9.1,9.2 and 38) 5,961.16 -Interest accrued but not due on borrowings 16.44 15.47Interest accrued and due (refer note 5.4 and 7.3) 301.48 463.66Interest others 75.91 25.64Advance from contractee/clients 669.98 813.41Advance from holding company 150.00 150.00Advance from director/employee 3.28 0.01Security deposit 20.30 20.30Unclaimed dividend * 0.82 0.92Other liabilitiesi. Accrued salaries and benefits 92.25 71.03ii. Withholding and other taxes payable 262.15 204.02iii. Other payables 12.03 7.62

Total 8,889.81 2,960.31

* Do not include any amount, due and outstanding,to be creditedto investor education and protection fund.

9.1 Includes WCTL, FITL, WCL and interest of ì 1,505.44 million, ì 66.77 million, ì 4,076.95 million and ì 312 millionrespectively of Bank of India due to recovery proceedings initiated against the Company on February 18, 2016 underthe Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

10 Short term provisions

For employee benefits 5.74 7.05Provision for foreseeable losses 657.65 1,142.66

Total 663.39 1,149.71

63



11 Fixed assets

GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

Particulars As at Additions Deletion/ As at As at For the Adjustment Deletion/ As at As at As atApril 01, Adjustment March 31, April 01, year to opening Adjustment March 31, March 31, March 31,

2015 2016 2015 reserves 2016 2016 2015

A. Tangible Assets

Land - freehold 1,047.19 1,047.19 - - - - - 1,047.19 1,047.19

Buildings 75.99 75.99 33.50 0.86 - 34.36 41.63 42.49

Plant and machinery 38.59 38.59 36.30 0.35 - 36.65 1.94 2.29

Motor vehicles 34.44 0.01 1.35 33.10 30.64 0.49 1.35 29.78 3.32 3.80

Furniture and fixtures 56.38 0.20 56.58 44.49 3.01 - 47.50 9.08 11.89

Office equipment 45.24 0.06 45.30 44.07 0.42 - 44.49 0.81 1.17

Computers 71.97 0.01 71.98 70.38 0.37 - 70.75 1.23 1.59

Total tangible assets 1,369.80 0.28 1.35 1,368.73 259.38 5.50 - 1.35 263.53 1,105.20 1,110.42

Previous year total (1,374.73) (0.09) (5.02) (1,369.80) (255.55) (9.52) (1.29) (6.98) (259.38) (1,110.42)

B. Intangible assets

Software 34.22 - - 34.22 32.13 0.50 - - 32.63 1.59 2.09

Goodwill 6.90 - - 6.90 6.90 - - - 6.90 - -

Technical knowhow 9.81 - - 9.81 9.81 - - - 9.81 - -

Total intangible assets 50.93 - - 50.93 48.84 0.50 - - 49.34 1.59 2.09

Previous year total (50.93) - - (50.93) (41.68) (2.09) - (5.07) (48.84) (2.09)

Grand total 1,420.73 0.28 1.35 1,419.66 308.22 6.00 - 1.35 312.87 1,106.79 1,112.51


Notes :

a. During the year 2013-2014 the company has revalued its land situated at Chakala, Andheri (East) , Mumbai at ì 1,047.19 million thereby increasing land valueby ì 905.67 million and creating revaluation reserve of the same amount.

b. Buildings include company owned residential flats of the book value of ì 8.85 million (previous year ì 8.85 million) including face value of shares held inCo-operative housing societies of ì 0.01 million in respect of which documents lodged with the Registrar of properties for registration are yet to be receivedback.

c. In accordance with the requirements of Schedule II of the Companies Act, 2013, the Company has re-assessed the useful lives of the fixed assets. Hence,ì 0.89 million (net of Deferred Tax of ì 0.40 million) has been adjusted to the opening balance of the retained earnings where the remaining useful life of theassets was nil as at April 01, 2014.

. As at As at


12 Non current investments

Trade investments (valued at cost unless stated otherwise)UnquotedInvestment in equity shares of subsidiary companiesHDO Technologies Limited (refer note 32) 1287500 ì 10 1,538.00 1,538.00HDO (UK) Limited (refer note 33) 1008000 GBP 1 73.51 73.51DavyMarkham India Private Limited 10000 ì 10 0.10 0.10HDO Zambia Limited 50000 ZMK 1 0.05 0.05Less : Provision for diminution in the value of investments (73.51) (73.51)

1,538.15 1,538.15

Other investmentQuotedEquity shares of ì 10 each fully paid upVoltas Limited 500 ì 1 $ $Ion Exchange (I) Limited 50 ì 10 0.01 0.01Gujarat State Petronet Limited 8983 ì 10 0.24 0.24Gitanjali Gems Limited 884 ì 10 0.17 0.17Less : Provision for diminution in the value of investments (0.01) (0.01)Triveni Engineering and Industries Limited 66 ì 10 0.01 0.01Less : Provision for diminution in the value of investments (0.01) (0.01)

0.42 0.42

64




12 Non current investments (Contd.)

Unquoted

Western Bio Systems Ltd. 10 ì 10 # #

Jord Engineers India Ltd. 100 ì 10 * *

Western India Industries 50 ì 10 @ @

Western Paques (I) Limited 100 ì 10 0.01 0.01

Less : Provision for diminution in the value of investments (0.02) (0.02)

National Savings Certificates 0.01 0.01

0.01 0.01

Total 1,538.58 1,538.58

Aggregate amount of quoted investment and market value thereof:

Book value 0.42 0.42

Market value 1.43 1.30

Aggregate amount of unquoted investments 1,538.16 1,538.16

Aggregate provision for diminution in value of investment 73.55 73.55

ì in full figures- $ ì 3,225, # ì 100, * ì 3,290, @ ì 2,975

13 Deferred tax assets (net)

Deferred tax liabilities on account of

Depreciation - -

Deferred tax assets on account of

Employee benefits - -

Unabsorbed business losses - -

Total - -

14 Long term loans and advances(Unsecured and considered good unless otherwise stated)

Security deposit 1.58 1.57

Loan and advances to wholly owned subsidiaries

Foreign subsidiary (refer note 33)Considered good - -Doubtful 1,422.37 1,422.37

1,422.37 1,422.37Indian subsidiary (refer note 32) 50.00 50.00

1,472.37 1,472.37Less: Provision for doubtful advances (1,422.37) (1,422.37)

50.00 50.00Advance income tax and tax deducted at source (net of provisions) 71.55 112.16

Total 123.13 163.73

65




15 Other non-current assets (refer note 36 and 39)(Unsecured and considered good unless otherwise stated)

Retention moneyConsidered good 780.53 849.55Doubtful 337.03 347.59

1,117.56 1,197.14Less: Provision for retention money (337.03) (347.59)

780.53 849.55Other receivables (refer note 33)Considered good - -Doubtful 474.71 474.71

474.71 474.71Less: Provision for other receivables (474.71) (474.71)

Total 780.53 849.55

16 Inventories

At Project sites

- Project Stores - -

Total - -

17 Trade receivables (refer note 33,34,36 and 39)(Unsecured and considered good unless otherwise stated)

Outstanding for a period exceeding six months from the datethey were due for the paymentConsidered good 997.06 846.72Doubtful 937.34 891.83

1,934.40 1,738.55Less: Provision for doubtful trade recevables (937.34) (891.83)

997.06 846.72Other trade receivables 312.65 294.60

Total 1,309.71 1,141.32

18 Cash and bank balances

Cash and cash equivalents

Cash on hand 3.63 2.66Balances with banksIn current accounts 16.97 18.65

20.60 21.31Other bank balancesIn margin money deposits 5.44 13.92(Lodged with banks against gurantees issued by them)In dividend account 0.82 0.92

6.26 14.84

Total 26.86 36.15

66




19 Short term loans and advances(Unsecured and considered good unless otherwise stated)

Loan and advances to related parties

Directors (refer note 47.3) 10.12 10.48

Advances to sub-contractors, suppliers and others 708.15 775.78

Balance with statutory and government authorities

Considered good 189.07 201.79

Doubtful 55.81 54.07

244.88 255.86Less Provision for doubtful advances (55.81) (54.07)

189.07 201.79Security deposits 38.26 39.94Prepaid expenses 17.03 26.19

Total 962.63 1,054.18

20 Other current assets(Unsecured and considered good unless otherwise stated)

Interest accrued other than on investments 0.99 0.76

Other Receivables (refer note 36) 233.35 -

Unbilled revenue (refer note 36 and 40) 1,770.96 1,791.03

Total 2,005.30 1,791.79

67





21 Revenue from operations

Revenue from EPC 1,443.78 1,185.04

Revenue from finished goods traded 605.01 2,280.74

Other operating revenue 5.03 17.24

Total 2,053.82 3,483.02

22 Other income

Interest received on deposits with banks 0.64 2.73

Interest received others 3.73 27.51

Dividend received on investment 0.01 0.10

Rent received 34.20 34.20

Surplus on sale of fixed assets (net) - 15.58

Profit on sale of investment - 12.31

Bad debt recovered - 50.36

Other miscellaneous income 0.63 14.03

Total 39.21 156.82

23 Cost of materials/services consumed

Systems, equipments, spares and materials

Opening stock - 47.36

Add : Purchases 548.04 855.07

548.04 902.43

Less : Closing stock - -

Cost of systems, equipments and spares consumed 548.04 902.43

Service works bills 768.07 994.70

Indirect taxes 55.22 52.89

Total 1,371.33 1,950.02

24 Changes in inventories of work-in-progress

Inventories at the beginning of the year

Work-in-progress - 31.42

- 31.42

Inventories at the end of the year

Work-in-progress - -

- -

Total - 31.42

68




25 Employee benefits expense

Employees’ remuneration and benefits

Salaries, wages, bonus etc. 163.22 212.05

Contribution to provident and other funds 9.28 12.29

Staff welfare expenses 3.40 7.33

Managerial remuneration (refer note 47.3) 1.39 5.39

Total 177.29 237.06

26 Finance cost

Interest expenses 1,240.15 816.15

Other borrowing cost 87.68 289.33

Total 1,327.83 1,105.48

27 Other expenses

Rent 8.53 5.57

Rates and taxes 2.16 16.85

Travelling and conveyance 16.51 20.80

Repairs and maintenance - buildings 1.94 2.12

Repairs and maintenance - others 1.96 9.67

Insurance 3.80 2.91

Communication 3.52 4.53

Sitting and other fees 0.38 0.39

Donations 0.01 1.22

Wealth tax 0.70 0.09

Printing and stationery 1.42 2.59

Advertisement and publicity 0.08 0.22

Auditors remuneration

Statutory audit fees 1.80 1.80

Limited review fees 0.45 0.45

Tax audit fees 0.20 0.20

Reimbursement of expenses 0.12 0.26

Legal and professional fees 33.06 92.20

Tender fees 0.02 -

Bad debts written off 0.02 -

Provision for doubtful debts 34.94 1,198.85

Provision for advances 1.73 54.07

Provision for foreseeable losses 21.20 1,142.66

Loss on exchange 69.05 50.45

Miscellaneous expenses 22.05 31.67

Total 225.65 2,639.57


69



28. Dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006(MSMED Act) information relating to Micro and Small Enterprises have been determined based on the informationavailable with the Company. The required details are given below:

S. As at As atNo. Particulars March 31, 2016 March 31, 2015

(a) Principal amount remaining unpaid 19.93 18.70

(b) Interest due thereon 26.09 19.60

(c) Interest paid by the Company in terms of Section 16 of MSMED Act, alongwith the amount of the payment made to the suppliers and serviceproviders beyond the appointed day during the year. - -

(d) Interest due and payable for the period of delay in making payment(which has been paid but beyond the appointed day during the year)but without adding the interest specified under MSMED Act. - -

(e) Interest accrued and remaining unpaid. 26.09 19.60

(f) Further interest remaining due and payable even in the Succeeding years,until such date when the interest dues as above are actually paid to thesmall enterprise. 26.09 19.60

29. Earnings per share (EPS)

For the For theS. Year Ended Year EndedNo. Particulars March 31, 2016 March 31, 2015

(a) (Loss)/profit after tax before extraordinary item for calculation of basic anddiluted EPS (1,632.62) (7,731.55)

(b) (Loss)/profit after tax after extraordinary item for calculation of basic anddiluted EPS (1,632.62) (7,731.55)

(c) Weighted average number of equity shares outstanding for calculation of EPS 72,005,808 72,005,808

(d) Basic and diluted EPS(before extraordinary items) (22.67) (107.37)

(e ) Basic and diluted EPS(after extraordinary items) (22.67) (107.37)

30. Contingent liabilities and commitments (to the extent not provided for)

a. Contingent liabilities


I Claims against the Company not acknowledged as debt 87.75 83.87

II Guarantees

Corporate Guarantees 242.87 242.87

Bank Guarantees 1,472.99 1,789.47

III Other money for which the Company is contingently liable

*Income-tax matters 41.35 16.65

*Sales-tax / WCT / VAT matters 763.64 833.41

*Excise/Service Tax matters 213.60 213.60

*Customs duty matters 0.08 0.08

IV Corporate Guarantee issued by the company on behalf of its subsidiary 2,745.60 2,745.60

* Excluding interest / penalty as may be determined / levied on the conclusion of the matters.

b. Commitments

There are no amounts of contracts which are remaining to be executed on capital account and not provided for.

70


Commitments on account of letter of credit as at March 31, 2016 is ì 393.96 million (previous year ì 1,182.90million)

C. Impact of pending legal cases

The company is party to several cases with clients as well as contractors, pending before various forums /courts/arbitration proceedings. It is not possible to make a fair assessment of the likely financial impact of these pendingdisputes/litigations until the cases are decided by the appropriate authorities.

31. During the year the Company has incurred a Net Loss of ì 1,632.62 million (previous year ì 7,731.56 million) resultingin to accumulated losses of ì 11,043.23 million (previous year ì 9,410.61 million) and erosion of its net worth. TheCompany has obligations towards borrowings aggregating to ì 9,704.37 million (previous year ì 8,455.76 million)which includes working capital loan from banks of ì 2,816.32 million (previous year ì 4,376.59 million) outstandingletters of credit/bill discounting from banks of ì 384.85 million (previous year ì 1,057.45 million) and current maturities oflong term debts/liabilities towards WCTL, FITL and WCL of ì 6,314.92 million (previous year ì 1,188.23 million) fallingdue over next twelve months period, obligations pertaining to operations including unpaid creditors and statutory duesas at March 31, 2016. These matters require the Company to generate additional cash flows to fund the operations aswell as other statutory obligations notwithstanding the current level of low operating activities. The Company has beenunable to obtain financing for this purpose. The situation indicates the existence of a material uncertainty that may castsignificant doubt on the Company’s ability to continue as going concern and therefore the company may be unable torealize its assets and discharge its liabilities in the normal course of business. The financial statements do not includeany adjustment in this respect.

32. Investment and advances in its Indian wholly owned subsidiary company, (HDO Technologies Limited) having bookvalue aggregating to ì 1,538 million (previous year ì 1,538 million) and ì 50 million (previous year ì 50 million) havingnegative net worth, are carried at fair value. Considering a long term investment/advances, no provision for diminution/bad debts in value of investment/advances is considered necessary by the management.

33. National Stock Exchange of India Limited vide its letters dated June 19, 2014 and May 5, 2015 has directed the companyto rectify the qualification raised by the Statutory Auditors. Accordingly the Company has rectified the qualification relatedto recognition of Deferred Tax Assets of ì 1,089.37 million, Investment and Loans and advances to Foreign Subsidiary ofì 1,495.88 million and Trade and Other Receivable of ì 515.28 million by providing for the same in the Books of Account.

34. The balances in Trade Receivables, Retention Money, Trade Payable, Advances and certain Bank balances are subjectto reconciliation/confirmations and adjustments, if any. Such adjustments, in the opinion of the management, are notlikely to be material and will be carried out as and when ascertained.

35. The Company has not received any confirmation from one of the lender having outstanding of ì 1,520.10 million(including interest accrued of ì 276.36 million) as at March 31, 2016. In the opinion of the management there will be nomaterial adjustment on the confirmation by the lender.

36. In respect of certain customers, the company has initiated discussion with the customer related to encashment of bankguarantee by the customers. The trade receivables, retention, withheld money, unbilled revenue and other receivablesfrom such customers as at March 31, 2016 aggregates to ì 538.60 million. Further, bank guarantee of ì 526.70 millionwas encashed subsequent to this year. The management is confident that the outcome of the negotiation will befavorable and no provision is considered necessary at this stage.

37. In respect of invocation of corporate guarantees of ì 1,411.80 million and initiation of recovery actions against thecompany in respect of such guarantees extended / executed for its one subsidiary in favour of the lender. The managementhas not made any provision in respect of this invoked corporate guarantee as the management is under discussion withthe lender and confident that the same shall be settled amicably.

38. One lender has initiated recovery proceedings against the Company under the Securitization and Reconstruction ofFinancial Assets and Enforcement of Security Interest Act, 2002 in respect of outstanding loan aggregating to ì 5,961.16million (including interest on WCTL and FITL of ì 177.92 million). The Bank has however demanded ì 6,545 million.The difference of ì 583.84 million being penal and other charges, the company has not provided for the same as it is inthe process of reconciliation of the difference amount as stated above.

39. Trade receivables and Retention as at March 31, 2016 include overdue amounts aggregating to ì 350.85 million(previous year ì 322.84 million) and ì 225.29 million (previous year ì 212.09 million) respectively for a long period oftime, receivable from contractee/clients.These have been considered good and fully recoverable by the management


71


as the Company is in continuous engagement with the parties and taking necessary steps for realization of its dues.Accordingly no provision has been made in books of account.

40. Unbilled revenue as at March 31, 2016 includes ì 867.27 million (previous year ì 839.60 million) in respect of certainprojects where progress is insignificant during the year and the billing is pending for a long period/years. In the opinionof the management such unbilled revenue has been considered good and fully recoverable.

41. In the opinion of the Board, Current Assets, Loans and Advances have a value on realization in the ordinary course ofbusiness at least equal to the amount at which they are stated.

42. Certain creditors have filed winding up petitions against the Company under section 433 and 439 of the Companies Act,1956 before the Hon’ble High Court of Mumbai. The company is taking necessary steps including signing of Memorandumof Understanding and/ or filing the Consent Terms in the High Court with the creditors for withdrawal of such petitions.The matter is subjudice and the outcome of which is subject to the Company fulfilling the payment conditions of

Memorandum of Understanding/ Consent Terms.

43. Value of imports on C.I.F. basis

Particulars March 31, 2016 March 31, 2015

Cost of systems, equipment’s, components, spares and services 23.31 62.26

Total 23.31 62.26

44. Expenditure in foreign currency on account of (on payment basis)


Foreign Travel 0.02 0.08

Professional fees / Technical Knowhow 42.58 -

Others - 0.002

Total 42.60 0.082

45. Earnings in foreign exchange


Sale of Equipment (including components and spares) on FOB basis - 0.81

Bad debts recovered - 13.62

Total - 14.43

46. Value of components used for supply of systems and services

March 31, 2016 March 31, 2015

Particulars % ì % ì

Imported 6.27 34.34 13.65 123.18

Indigenous 93.73 513.70 86.35 779.25

Total 100.00 548.04 100.00 902.43

In view of the large number and heterogeneous types of spares, accessories and components, it has not been considered

necessary to furnish separately the respective quantitative information.


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47. Related Party Disclosure

Information regarding Related Party Transactions as per Accounting Standard (AS)18 “Related Party Disclosures”

47.1 List of related parties

A. Holding Company

IVRCL Limited

B. Subsidiary Companies –(The ownership, directly or indirectly through subsidiaries)

Name of the Company

HDO Technologies Limited

HDO (UK) Limited

DavyMarkham India Private Limited

HDO Zambia Limited

C. Fellow Subsidiaries

S. No. Name of Subsidiaries S. No. Name of Subsidiaries

1 IVRCL PSC Pipes Private Limited 43 IVR Prime Developers (Erode) Private Limited

2 IVR Enviro Projects Private Limited 44 IVR Prime Developers (Guntur) Private Limited

3 Chennai Water Desalination Limited 45 IVR Prime Developers (Araku) Private Limited

4 Salem Tollways Limited 46 Absorption Aircon Engineer Private Limited

5 Kumarapalyam Tollways Limited 47 IVR Vaanaprastha Private Limited

6 IVRCL Steel Construction & Services Limited 48 IVR PUDL Resorts & Clubs Private Limited

7 Jalandhar Amritsar Tollways Limited 49 IVRCL Solar Energy Private Limited

8 IVRCL Indore Gujarat Tollways Limited 50 IVR Prime Developers (Amalapuram) Private Limited

9 IVRCL Chengapalli Tollways Limited 51 IVR Prime Developers (Red Hills) Private Limited

10 IVRCL Patalaganga Truck Terminals Pvt. Limited 52 IVR Prime Developers (Tuni) Private Limited

11 IVRCL Goa Tollways Limited 53 IVR Prime Developers (Bobbilli) Private Limited

12 IVRCL-Cadagua Hogenakkal Water Treatment 54 IVR Prime Developers (Bhimavaram) Private Limited

Company Private Limited

13 Alkor Petroo Limited 55 IVR Prime Developers (Adayar) Private Limited

14 IVRCL Building Products Limited 56 IVR Prime Developers (Egmore ) Private Limited

15 IVRCL Chandrapur Tollways Limited 57 Geo IVRCL Engineering Limited

16 Sapthashva Solar Limited 58 Duvvda Developers Private Limited

17 RIHIM Developers Private Limited 59 Kunnam Developers Private Limited

18 IVRCL TLT Private Limited 60 Vedurwada Developers Private Limited

19 IVRCL Raipur Bilaspur Tollways Limited 61 Rudravaram Developers Private Limited

20 IVRCL Narnual Bhiwani Tollways Limited 62 Geo Prime Developers Private Limited

21 IVR Hotels and Resorts Limited 63 Theata Developers Private Limited

22 SPB Developers Private Limited 64 Kasibugga Developers Private Limited

23 IVRCL Multilevel Car Parking Private Limited 65 Vijayawada Developers Private Limited

24 IVRCL Lanka (Private) Limited 66 Eluru Developers Private Limited

25 First STP Private Limited 67 Chengapally Road infra Private Limited

26 IVRCL Gundugolanu Rajahmundry Tollways Limited 68 IVR Prime developers (kakinada) private Limited

27 IVRCL Patiala Bathinda Tollways Limited 69 IVR Prime developers (Pudukkottai) private Limited

28 IVR Prime Developers (Tambram) Private Limited 70 IVR Prime developers (Thandiarpet) private Limited

29 IVR Prime Developers (Palakkad) Private Limited 71 IVR Prime developers (Gummidipundy) private Limited

30 IVR Prime Developers (Guindy) Private Limited 72 IVR Prime developers (Kodambakkan) private Limited

31 IVRCL Mega Malls Limited 73 IVR Prime developers (Arumbakkan) private Limited

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Relative of Vice Chairman



32 Agaram Developers Private Limited 74 IVR Prime developers (Anna Nagar) private Limited

33 Mummidi Developers Private Limited 75 IVR Prime developers (Anakapalle) private Limited

34 Samatteri Developers Private Limited 76 IVR Prime developers (Rajampeta) private Limited

35 Annupampattu Developers Private Limited 77 IVR Prime developers (Tanuku) private Limited

36 Tirumani Developers Private Limited 78 IVR Prime developers (Rajahmundry) private Limited

37 Ilavampedu Developers Private Limited 79 IVR Prime developers (Ananthapuram) private Limited

38 Gajuwaka Developers Private Limited 80 IVR Prime developers (Perumbadur) private Limited

39 Chodavaram Developers Private Limited 81 IVR Prime developers (Ashram) private Limited

40 Simhachalam Prime Developers Private Limited 82 IVR Prime developers (Retiral Homes) private Limited

41 Siripuram Developers Private Limited 83 IVR Prime developers (Mylapore) private Limited

42 Bibinagar Developers Private Limited

D. Companies Under Common Control

S. No. Name of the Company

1 Indus Palm Hotels & Resorts Limited

2 S.V. Equities Limited

3 Palladium Infrastructures & Projects Limited

4 Soma Hotels & Resorts Limited

5 Eragam Holdings Limited

6 Eragam Finlease Limited

7 A P Enercon Engineers Private Limited

E. Key Managerial Personnel and their relatives

Name of the Key Personnel Relationship

Mr E Sudhir Reddy Vice Chairman


Mr. R Balarami Reddy Director

Mr. G.Ramakrishna Company Secretary

Mr. S C Mundhekar Chief Financial Officer

Mr. E Ella Reddy

Mrs. E Sujatha Reddy

Mr. E. Sunil Reddy

74


47.2 Followings are the transactions with the related parties:

Holding Subsidiary Company under Key Total

Company common control Managerial

(IVRCL Personnel

Particulars Year Limited)

Income/ExpenseSales(Net of Indirect Taxes) 2015-2016 - - - - -

2014-2015 - - - - -

Purchases/Services* 2015-2016 80.50 131.98 - - 212.482014-2015 42.44 13.88 12.07#1 - 68.39

Payment made by the Company for

Expenses 2015-2016 0.01 0.39 - - 0.402014-2015 0.07 8.74 - - 8.81

Payment made for the company for

Expenses 2015-2016 0.01 8.35 - - 8.362014-2015 0.36 - - - 0.36

Rent Expense 2015-2016 2.03 - 2.65#2 - 4.682014-2015 1.94 - 2.62 - 4.56

Provision for Advances/Investment 2015-2016 - - - - -2014-2015 277.91 1495.88 - - 1773.79

Corporate Guarantee given 2015-2016 - - - - -2014-2015 - - - - -

Corporate Guarantee taken 2015-2016 - - - -2014-2015 - - - - -

Investment in Equity 2015-2016 - - - - -2014-2015 - - - - -

Loans and Advances

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

Received 2015-2016 - - - 3.27 3.272014-2015 - - 0.01 0.01

Remuneration 2015-2016 - - - 1.39 1.392014-2015 - - - 5.50 5.50

Balances with related parties

Advances/ Trade Receivable 2015-2016 55.72 1472.37#4 - 10.12 1538.212014-2015 127.91 1472.37 - 10.48 1,610.76

Provision for Advances/Investment 2015-2016 277.91 1495.88 - - 1773.792014-2015 277.91 1495.88 - - 1773.79

Loans and Advances Taken 2015-2016 - - - 3.28 3.282014-2015 - - - 0.01 0.01

Creditors 2015-2016 - 233.63 59.00#3 - 292.632014-2015 - 76.35 56.59 - 132.94

Corporate Guarantee given 2015-2016 - 2745.60 - - 2745.602014-2015 - 2745.60 - - 2745.60

Corporate Guarantee received 2015-2016 12358.60 - - - 12358.602014-2015 12358.60 - - - 12358.60

*Net of Purchase Returns/ Advances refund ì Nil million (ì 727.40 million)

#Material transactions with companies under common control

1. ì Nil million (ì 12.07 million) - Palladium Infrastructures & Projects Limited.

2. ì 2.05 million (ì 2.02million) - A P Enercon Engineers Private Limited and ì 0.60 million (ì 0.60 million) - Indus Palm Hotels and Resorts Private Limited.

3. ì 52.63 million (ì 52.63 million)- Palladium Infrastructures & Projects Limited, ì 5.29 million (ì 3.42 million) - A P Enercon Engineers Private Limited and ì1.08 million (ì 0.54 million) - Indus Palm Hotels and Resorts Private Limited.

4. ì 50 million HDO Technologies Limited and ì 1,422.37 million HDO UK limited.


75



47.3 Remuneration has not been paid to the executive director after the approved period. Pending approval from the CentralGovernment, the excess amount of ì 10.12 million (previous year ì 10.12 million) relating to the erstwhile Director hasbeen included under ‘Short term Loans and advances’ (note 19).

Notes:

1. Related party relationship is as identified by the Company and relied upon by the Auditors.

2. Disclosure as per regulation 34 (3) and 53 (f) of the listing obligation and Disclosure Requirement :

As at Maximum As at Maximum

Name of the Company Relationship March 31, 2016 outstanding March 31, 2015 outstanding

HDO (UK) Limited Subsidiary 1,422.37* 1,422.37 1,422.37 1,422.37

*Provided in the previous year

48. Segment Reporting

Primary Segment – Business

As per Accounting Standard on Segment Reporting (AS) 17, “Segment Reporting”, segment information is being reported.

Accordingly, the Company has identified two reportable segments viz. Engineering, Procurement and Construction (EPC)and Trading. Segments have been identified and have been reported taking into account nature of product and services.

Secondary Segment – Geographical

The operation of the company is mainly in India. Therefore, there is no reportable geographical segment as per theAccounting Standard (AS) 17 (Segment Reporting).

Primary Information Segment:-

March 31, 2016 March 31,2015

Particulars EPC Trading Total EPC Trading Total

Total Revenue 1,448.81 605.01 2,053.82 1,202.28 2,280.74 3,483.02

Inter-Segment Sales - - - - - -

External Sales 1,448.81 605.01 2,053.82 1,202.28 2,280.74 3,483.02

Segment Results 77.48 1.09 78.57 (779.17) (2.73) (781.90)

Other Expenses 408.95 - 408.95 2,833.52 54.72 2,888.24

Operating Profit/ (Loss) (331.46) 1.09 (330.37) (3,612.69) (57.45) (3,670.14)

Interest Expenses 1,314.50 13.33 1,327.83 1,008.95 96.52 1,105.47

Interest Income 0.64 - 0.64 2.73 - 2.73

Other Income 38.57 - 38.57 154.09 - 154.09

Prior year adjustments - - - 2,011.17 - 2011.17

Income Tax 13.63 - 13.63 1,101.60 - 1,101.60

Net Profit/(loss) (1,620.38) (12.24) (1,632.62) (7,577.59) (153.97) (7,731.56)

Segment Assets 6,018.05 296.90 6,314.95 5,700.67 448.56 6,149.23

Unallocated corporate assets - - 1,538.58 - - 1,538.58

Total Assets 6,018.05 296.90 7,853.53 5,700.67 448.56 7,687.81

Segment Liabilities 16,189.14 463.12 16,652.26 14,251.38 602.53 14,853.91

Unallocated corporate liabilities - - - - - -

Total Liabilities 16,189.14 463.12 16,652.26 14,251.38 602.53 14,853.91

Depreciation 6.00 - 6.00 11.61 - 11.61

Non cash expenses other than depreciation 126.95 - 126.95 4,457.20 - 4,457.20

Capital Expenditure 0.28 - 0.28 0.08 - 0.08

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49. Derivative Instruments

The year end foreign currency exposures are given below:

March 31, 2016 March 31, 2015

Particulars USD ì USD ì

Secured Loan 18.75 1,243.74 18.75 1,173.58

Interest Payable 4.17 276.36 2.47 154.73

Particulars of derivative instruments outstanding

Particulars Purpose March 31, 2016 March 31, 2015

Interest Swap USD 18.75 USD 18.75

(million) (million)

50. Disclosure pursuant to Accounting Standard 7 “Construction contracts”, the amounts considered in the financial

statements up to the reporting date are as follows:


Contract revenue recognised as revenue

during the period – (paragraph 38a) 1,310.13 1,116.19

Contract costs incurred and recognizedProfits, less losses – (paragraph 39a) 1,149.23 1,597.85

Advances received, net of recoveriesfrom progressive bills – (paragraph 39b) 577.18 725.48

Gross amount due from customers forcontract works – (paragraph 41a) 1,770.96 1,791.03

Retention amount due from customers forcontract works – (paragraph 39c) 1,432.50 1,541.69

The paragraph references mentioned against each item below are as given in the said accounting standard.

51. Employee Benefit:

Funded status of the Gratuity Plan and disclosures pursuant to Accounting Standard (AS)15 are set out below:


Change in benefit obligationLiability at the beginning of the year 17.93 17.51Interest cost 1.43 1.63Current service cost 2.42 2.48Benefit paid (1.84) (1.88)Experience adjustment/non-management funds (4.10) -Actuarial (gain)/loss on obligations (0.11) (1.82)

Liability at the end of the year 15.73 17.92

Fair value of planned assetsFair value of planned assets at the beginning of the year 7.54 10.22Expected return on planned assets 0.60 0.86Other planned assets - (0.32)Contributions - -

Hedge against exposure to variable interest outflow onforeign currency loan. Swap to receive variable rate ofinterest of three months USD LIBOR and pay a fixed rate ofequal to 6.5 percent p.a. on the notional amount. (As peragreement rate was three months USD LIBOR +300 bps)

77


Benefit paid (1.84) (1.88)Actuarial gain/(loss) on planned assets 0.03 (1.35)

Fair value of planned assets at the end of the year 6.33 7.53Total Actuarial (gain)/loss to be recognized 4.24 0.47

Actual return on planned assetsExpected return on planned assets 0.60 0.86Actuarial gain/(loss) on planned assets 0.03 (1.35)

Actual return on planned assets 0.63 (0.49)

Amount recognized in the balance sheetLiability at the end of the year (15.72) 17.93Fair value of planned assets at the end of the year 6.33 (7.54)

Amount recognized in the balance sheet (9.39) 10.39

Expenses recognized in the income statementCurrent service cost 2.42 2.48Interest cost 1.43 1.63Expected return on planned assets (0.60) (0.86)Experience adjustment/non-management fund - -Net Actuarial (gain)/loss to be recognized (4.24) (0.47)

Expense recognized in the statement of profit and loss 0.99 2.78

Balance sheet reconciliationOpening net liability 10.39 7.61Expense as above (0.99) 2.78Employers contribution - -Other planned assets - -Experience adjustment/ non-management fund - -

Amount recognized in the balance sheet 9.39 10.39

Assumptions

Discount rate 8.06% 7.96%Rate of return on planned assets 5.50% 7.96%

52. Details of purchase and sale of traded goods:

Particulars March 31 2016 March 31, 2015

Purchase:

Steel 603.92 2,283.47

Sale:

Steel 605.01 2,280.74

In view of the large number and heterogeneous types of steel, it has not been considered necessary to furnish separatelythe respective quantitative information.

53. The previous year’s figures have been regrouped/rearranged wherever necessary.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

S. C. SEKARAN R BALARAMI REDDYExecutive Director Director

Hyderabad G RAMAKRISHNA S. C. MUNDHEKARMay 30, 2016 Company Secretary Chief Financial Officer



78

INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To the Members ofHINDUSTAN DORR-OLIVER LIMITED

1. Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of HINDUSTAN DORR-OLIVER LIMITED (‘theHolding Company or ‘the Company’) and its Subsidiaries (collectively referred to as the Group’), comprising theconsolidated balance sheet as at March 31, 2016, the consolidated statement of profit and loss and the consolidatedcash flow statement for the year then ended, and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as ‘the consolidated financial statements’).

2. Management’s responsibility for the consolidated financial statements

The Holding Company’s Board of Directors are responsible for the preparation of the consolidated financial statementsin terms of the requirements of the Companies Act, 2013 (hereinafter referred to as ‘the Act’) that give a true and fair viewof the consolidated financial position, consolidated financial performance and consolidated cash flows of the Companyin accordance with the accounting principles generally accepted in India, including the Accounting Standards specifiedunder Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board ofDirectors of the Holding Company and its Subsidiaries is responsible for maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; the selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records,relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view andare free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparationof the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

3. Auditors’ responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audit. While conductingthe audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters whichare required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in theconsolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessmentof the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparationof the consolidated financial statements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes valuating the appropriateness of the accounting policies usedand there as on ableness of the accounting estimates made by the Holding Company’s Board of Directors, as well asevaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our qualified auditopinion on the consolidated financial statements.

4. Basis for Qualified Opinion

a. Note 33 to the consolidated financial statement in respect of preparation of consolidated financial statements of theCompany on going concern basis for the reasons stated therein. The accumulated losses of the Company as atMarch 31, 2016 amounting to ì 11,043.23 million have exceeded its net worth. The Company has obligationstowards borrowings aggregating to ì 9,704.37 million which include working capital loan and outstanding letters ofcredit/bill discounting from banks. Further, the Company’s current liabilities exceed current assets byì 12,147.27 million. The Company has obligations pertaining to operations including unpaid creditors and statutorydues, these matters require the Company to generate additional cash flows to fund the operations as well as otherstatutory obligations notwithstanding the current level of low operating activities. This indicates the existence of amaterial uncertainty that may cast significant doubt on the Company’s ability to continue as going concern andtherefore the Company may be unable to realize its assets and discharge its liabilities in the normal course ofbusiness. The consolidated financial statement does not include any adjustment in this respect.

79

INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS (Contd.)

b. Note 39 to the consolidated financial statement in connection with the existence of material uncertainties over therealisability of bank guarantees encashed by customers, unbilled revenue, trade receivables and withheld amountaggregating to ì 538.60 million, which are subject matters of various negotiations with the customers. Further, BankGuarantee of ì 526.70 million was encashed subsequent to this year. The management of the Company isconfident of positive outcome of the negotiations and recovering the aforesaid dues. In view of pending certificationof bills/slow progress/termination of these projects and lack of other alternate audit evidence to corroboratemanagement’s assessment of recoverability of these balances, we are unable to comment on the extent to whichthese balances are recoverable.

c. Note 40 to the consolidated financial statementin respect of invocation of corporate guarantees of ì 1,411.80 millionand initiation of recovery actions against the company in respect of such guarantees extended / executed for its onesubsidiary in favour of the lenders. No provision has been made in the accounts for such possible loss.

d. Note 44 to the consolidated financial statement in respect of provision for impairment of goodwill, aggregating toì 1,290 million arising on consolidation of subsidiary, whose net worth is eroded as at March 31, 2016, not considerednecessary by the management. In absence of valuation of the subsidiary, we are unable to comment whether anyimpairment of goodwill is required.

e. Note 35 and 36 to the consolidated financial statement in respect of certain projects wherein the Management of theCompany has considered overdue trade receivable aggregating to ì 576.14 million and unbilled revenue amountingto ì 867.27 million, as good and fully recoverable and no provisions for the same have been made for the reasonsstated therein.

f. Note 41 to the consolidated financial statement wherein one lender has initiated recovery proceedings against theCompany under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 in respect of outstanding loan aggregating to ì 5,961.16 million (including interest on WCTL and FITL ofì 177.92 million). The Bank has however demanded ì 6,545 million. The difference being penal and other charges,the company has not provided for the same for the reason stated therein.

g. Note 37 to the consolidated financial statement, in respect of trade receivables, mobilization advances, retentionmoney, trade payables and certain bank balances, external confirmations of the balances are not available. Due tonon-availability of confirmation of balances, we are unable to quantify the impact, if any, arising from the confirmationof balances.

h. Note 38 to the consolidated financial statement, wherein the Company has not received confirmation from one ofthe lender having outstanding of ì 1,520.10 million (including interest accrued of ì 276.36 million) as at March 31,2016. Due to non-availability of confirmation of balances, we are unable to quantify the impact, if any, arising fromthe confirmation of balances.

i. Note 45.4 to the consolidated financial statement, in the respect of subsidiary, HDO Technologies Limited, whereinthe accumulated losses of the Company as per the unaudited financial statements as at March 31, 2016 amountingto ì 830.25 million have exceeded its net worth. The Company has obligations towards borrowings aggregating toì 1,647.15 million which include working capital loan and outstanding letters of credit/bill discounting from banks.Further, the Company’s current liabilities exceed current assets by ì 503.8 million. The Company has obligationspertaining to operations including unpaid creditors and statutory dues, these matters require the Company togenerate additional cash flows to fund the operations as well as other statutory obligations notwithstanding thecurrent level of low operating activities. This indicates the existence of a material uncertainty that may cast significantdoubt on the Company’s ability to continue as going concern and therefore the Company may be unable to realizeits assets and discharge its liabilities in the normal course of business. The statement does not include anyadjustment in this respect.

j. Note 45.3 to the consolidated financial statement, in respect of subsidiary, HDO Technologies Limited, whereindeferred tax assets on business losses aggregating to ì 95.71 million has been recognized on the basis ofbusiness plan prepared by the management. The company is confident that sufficient future taxable income will beavailable against which such deferred tax assets will be realized. In absence of virtual certainty supported byconvincing evidence that sufficient future taxable income will be available against which the deferred tax asset canbe realized, we are unable to comment the extent to which such deferred tax asset can be realized.

k. Note 45.1 to the consolidated financial statement, in respect of subsidiary, HDO Technologies Limited, regardingthe status of over due trade receivable aggregating to ì 612.70 million which has been classified as a good and inrespect of which no provision has been considered necessary for the reason explained therein.

80


l. Note 45.5 to the consolidated financial statement in respect of subsidiary, HDO Technologies Limited in respect ofinvocation of corporate guarantees of ì 6,545 million and initiation of recovery actions against the company inrespect of such guarantees extended / executed for its holding company in favour of the lender. No provision hasbeen made in the accounts for such possible loss.

m. Note 45.6 to the consolidated financial statement in respect of subsidiary, HDO Technologies Limited wherein onelender has initiated recovery proceedings against the Company under the Securitization and Reconstruction ofFinancial Assets and enforcement of Security Interest Act, 2002 in respect of outstanding loan of aggregating toì 1,251.80 million. The Bank has however demanded ì 1,411.80 million. The difference being penal and othercharges, the company has not provided for the same for the reason stated therein.

n. Note 45.2 to the consolidated financial statement, in respect of subsidiary, HDO Technologies Limited regardingconfirmation of the balances of trade receivable, trade payable, advances to sub-contractors and suppliers andreconciliation of the same and the possible resultant impact on the consolidated financial statements.

o. Note No. 29(3) to the consolidated financial statement wherein the consolidated financial statement in respect ofcurrent year’s and previous years consolidated financial statements does not include financial statement of certainforeign subsidiaries reflecting total assets of ì 110.50 million as at March 31, 2015 total revenue of ì NIL, net lossof ì 0.29 million and cash outflow of ì 0.19 million for the period then ended.

p. Note No. 29(2) to the consolidated financial statement wherein we did not audit the financial statement of twosubsidiaries whose financial statements reflects total assets of ì 3,239.40 million as at March 31, 2016 totalrevenue of ì 560.1 million and net cash flows amounting to ì 22.20 million for the year ended on that date, asconsidered in the consolidated financial statement. These financial statements are unaudited and have beenfurnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relatesto the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub-section (3)and (11) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on suchunaudited financial statements are material to the Group.

5. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects ofthe matters described under paragraph 4(b),4(e), 4(j) and 4(k) and possible effects of the matters described underparagraph 4(a), 4(c), 4(d), 4(f), 4(g),4(h), 4(i), 4(l),4(m),4(n), 4(o) and 4(p) of the basis for qualified opinion paragraph ofthe aforesaid consolidated financial statements give the information required by the Act in the manner so required andgive a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated stateof affairs of the Company, as at March 31, 2016, and their consolidated loss and their consolidated cash flows for theyear ended on that date.

6. Emphasis of matters

Attention is invited to Note 43 of the Consolidated financial statements in respect of pending winding up petitionsagainst the company and the matter is subjudice.

Our opinion is not qualified in respect of this matter.

7. Report on other legal and regulatory requirements

1. As required by Section 143(3) of the Act, we report that:

a. we have sought and except for the matters described under “Basis for qualified opinion” paragraph, have obtainedall the information and explanations which to the best of our knowledge and belief were necessary for the purposeof our audit;

b. Except for the effects/possible effects of matters described in the “Basis for qualified opinion” paragraph, in ouropinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financialstatements have been kept so far as it appears from our examination of those books.

c. The consolidated balance sheet, the consolidated statement of profit and loss, and the consolidated cash flowstatement dealt with by this Report are in agreement with the relevant books of account maintained for the purposeof preparation of the consolidated financial statements.

d. In our opinion, except for the effects/possible effects matters described in the “Basis for qualified opinion” paragraph,the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014.

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e. The matters described in the basis for qualified opinion and Emphasis of matters paragraphs, in our opinion, mayhave an adverse effect on the functioning of the Group.

f. On the basis of the written representations received from the directors of the Holding Company as on March 31,2016 taken on record by the Board of Directors of the Holding Company, none of the Directors of the Holdingcompany is disqualified as on March 31, 2016 from being appointed as a Director of that company in terms of sub-section 2 of Section 164 of the Act.

g. The qualifications relating to the maintenance of accounts and other matters connected there with are as stated inthe Basis for Qualified Opinion paragraph.

h. With respect to the adequacy of the internal financial controls over financial reporting of the Company and theoperating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses aqualified opinion on the adequacy and effectiveness of the Internal Financial Controls over Financial Reporting ofthe Holding Company.

i. With respect to the other matters to be included in the Auditor’s 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 explanationsgiven to us:

i. The Group has disclosed the impact of pending litigations on its financial position in its consolidated financialstatements – refer note 32 to the consolidated financial statements;

ii. Except for the effects/possible effects of matters described under basis of qualified opinion paragraph, theGroup has made provision, as required under the applicable law or accounting standards, for materialforeseeable losses, if any, on long-term contracts including derivative contract.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education andProtection Fund by the Group.




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ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTSOF HINDUSTAN DORR-OLIVER LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“theAct”)

We have audited the internal financial controls over financial reporting of HINDUSTAN DORR-OLIVER LIMITED (“the HoldingCompany”) and its subsidiary companies which are incorporated in India as of March 31, 2016 in conjunction with our auditof the consolidated financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of itsbusiness, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of fraudsand errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financialinformation, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the “Guidance Note”) and the Standards on Auditing, to the extent applicable to an audit of internal financialcontrols, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financialcontrols over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinionon the Internal Financial Control over Financial Reporting of the holding Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal financial control over financial reporting includes thosepolicies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detectionof unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusionor 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 internal financial controls over financial reporting to future periods are subject to therisk that the internal financial control over financial reporting may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate.


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Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses havebeen identified as at March 31, 2016:

The Holding Company did not have appropriate internal financial controls over (a) Assessment of recoverability of bankguarantees encashed by customers, unbilled revenue, trade receivables and withheld amounts which are subject mattersof various disputes / negotiations with the customers and contractors due to delay in completion of contracts and otherdisputes. (b) Assessment of provision required in respect of invocation of corporate guarantees and initiation of recoveryactions against the Company in respect of such guarantees extended / executed for its subsidiary in favour of the lenders.(c) Assessment of “other than temporary diminution” of long term equity investment in subsidary company whose net worthhas eroded and continues to incur losses as on March 31, 2016. (d) Control over reconciliation of subcontractors work billswith the work bills submitted to the clients and physical progress of works completed, which could potentially result intoinaccurate estimation of percentage of work completed and consequently delay in the realization of unbilled revenue/receivables. (e) Controls over projects costs estimation and review of balance costs to complete in respect of work projects,which could potentially result into inaccurate estimation of foreseeable losses on works contracts. (f) Process of obtainingconfirmations from trade receivables, advances, retention money, trade payables and bank balances at regular interval. (g)Physical verification of fixed assets at regular interval.

The inadequate supervisory and review control over Company’s process in respect of its aforesaid assessment in accordancewith the accounting principles generally accepted in India could potentially result in a material misstatement in preparationand presentation of financial statement including the profit after tax.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting,such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis.

Qualified opinion

In our opinion, except for the effects of material weaknesses described in “basis of qualified opinion” paragraph above, theHolding Company have, in all material respects, an adequate internal financial controls system over financial reporting andsuch internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internalcontrol over financial reporting criteria established by the Holding Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent ofaudit tests applied in our audit of the March 31, 2016 financial statements of the Holding Company, and these materialweaknesses have affected our opinion on the consolidated financial statements of the Company and we have issued aqualified opinion on the consolidated financial statements.

Other Matters

In respect of two subsidiary companies incorporated in India, which has been included in the consolidated financial statementsbased on unaudited financial statements of the subsidiary companies provided by the Management, whilst in our opinion,and according to the information and explanations given to us, reporting under section 143(3)(i) of the Act is applicable inrespect of these subsidiary companies. Since the subsidiary companies are unaudited, the possible effects of the same onour reporting under section 143(3)(e) of the Act in case of these consolidated financial statements has not been considered.





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CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2016


As at As atParticulars Note No. March 31, 2016 March 31, 2015

I. EQUITY AND LIABILITIES

1 Shareholders’ funds

(a) Share capital 3 144.01 144.01(b) Reserves and surplus 4 (8,476.06) (6,549.95)

2 Non-current liabilities

(a) Long-term borrowings 5 295.22 2,317.81(b) Long-term provisions 6 18.33 19.35

3 Current liabilities

(a) Short-term borrowings 7 3,632.28 6,509.19(b) Trade payables 8 3,817.37 3,770.13(c) Other current liabilities 9 10,464.15 3,390.75(d) Short-term provisions 10 665.87 1,152.58

Total 10,561.17 10,753.87

II. ASSETS

1 Non-current assets

(a) Fixed assets 11(i) Tangible assets 2,286.57 2,336.38(ii) Intangible assets 1.81 2.32(iii) Capital work in progress 60.16 60.16

(b) Goodwill on consolidation (refer note 44) 1,290.00 1,290.00(c) Non-current investments 12 0.48 0.48(d) Deferred tax assets (net) 13 54.58 54.58(e) Long-term loans and advances 14 75.86 118.90(f) Other non-current assets 15 863.10 931.97

2 Current assets

(a) Inventories 16 503.96 725.19(b) Trade receivables 17 2,185.26 2,040.96(c) Cash and bank balances 18 29.75 61.19(d) Short-term loans and advances 19 1,204.34 1,339.95(e) Other current assets 20 2,005.30 1,791.79

Total 10,561.17 10,753.87


As per our report of even date.For CHATURVEDI & PARTNERS FOR AND ON BEHALF OF THE BOARD OF DIRECTORSChartered AccountantsFirm Registration Number: 307068E

RAVINDRA NATH CHATURVEDI S.C. SEKARAN R. BALARAMI REDDYPartner Executive Director DirectorMembership No. 092087

Hyderabad, G RAMAKRISHNA S.C.MUNDHEKARMay 30, 2016 Company Secretary Chief Financial Officer

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CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016



Particulars Note No. March 31, 2016 March 31, 2015

I Revenue from operations 21 2,548.32 3,826.32Less : Excise Duty 66.67 35.46

Revenue from Operation (Net) 2,481.65 3,790.86II Other income 22 39.48 171.84

III Total Revenue(I + II) 2,521.13 3,962.70

IV Expenses

Cost of material/ services consumed 23 1,525.02 2,346.94Cost of material trading 603.92 2,283.47Changes in inventories of work-in-progress 24 188.83 (67.72)Employee benefits expense 25 256.26 326.30Finance costs 26 1,547.48 1,291.74Depreciation and amortization expenses 11 50.60 57.66Other expenses 27 261.50 2,667.51

Total Expenses 4,433.61 8,905.90

V Profit/(loss) before extraordinary/exceptional items,prior period items and tax(III-IV) (1,912.48) (4,943.20)

VI Exceptional items/ prior period adjustments 34 - 2,011.16

VII Profit/(loss) before tax (V-VI) (1,912.48) (6,954.36)

VIII Tax expense

Provision for tax - 1.79Current tax (in respect of earlier year) 13.63 0.34Deferred tax 34 - 1,099.47

IX Profit/(loss) for the period (VII-VIII) (1,926.11) (8,055.96)

X Earning per equity share before extraordinary items:(face value of ì 2/-each)Basic and diluted 30 (26.75) (111.88)

XI Earning per equity share after extraordinary items:(face value of ì 2/-each)Basic and diluted 30 (26.75) (111.88)





86

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016




CASH FLOWS FROM OPERATING ACTIVITIES

Net Profit/(loss) before taxation (1,912.48) (6,954.36)Adjustments forDepreciation and amortisation 50.60 57.66(Profit)/loss on sale of fixed assets - (15.58)Provision for investment - 73.51Provision for doubtful debts 34.94 1,239.43Provision for advances 14.29 528.78Provision for advances of subsidiary - 1,422.37Provision for foreseeable losses 21.20 1,142.66Profit on sale of investment - (12.31)Liabilities/provisions no longer required written back (0.03) (1.27)Interest and finance charges 1,547.48 1,291.74Interest income (4.38) (2.95)Dividend income (0.01) (0.10)Bad debts written off 0.02 -(Gain)/loss on exchange (net) 70.16 1,734.27 46.71 5,770.65

Operating profit before working capital changes (178.21) (1,183.71)(Increase)/decrease in inventories 221.24 37.90(Increase)/decrease in trade receivables (110.40) (212.17)(Increase)/decrease in loans and advances (91.64) 829.33Increase/(decrease) in current liabilities (523.41) (504.21) (325.69) 329.37

Cash generated from operations (682.42) (854.34)Taxes (paid)/refund 29.09 32.19

Net cash generated from operations (653.33) (822.15)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (0.28) (1.76)Sale of fixed assets - 18.79Proceeds from sale of investments - 28.41Dividend received 0.01 0.10Interest received 4.15 3.88 2.96 48.50

Net cash used in investing activities 3.88 48.50

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 1,165.30 1,571.95Dividend paid (0.10) (0.11)Interest and finance charges paid (547.19) 618.01 (826.60) 745.24

Net cash provided by financing activities 618.01 745.24

NET (DECREASE)/ INCREASE IN CASH ANDCASH EQUIVALENTS DURING THE YEAR (31.44) (28.41)Cash and cash equivalents at the beginning of the year 61.19 89.60

Cash and cash equivalents at the end of the year 29.75 61.19

87

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2016

Notes

1. The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS)3 on cash flow statement.

2. Figures in brackets indicate cash outflow.

3. Previous year figures have been regrouped and recast wherever necessary to confirm to current year classification.

4. Cash and cash equivalents include:



Cash balance on hand 3.79 2.90Balances with scheduled banks- In current accounts 19.64 43.39- In margin money deposits 5.50 13.98- In dividend account 0.82 0.92

29.75 61.19





88

Consolidated Notes forming part of the Financial Statements


1. COMPANY OVERVIEW

The Company and its subsidiaries (collectively referred to as “Group”) is engaged in the business of providing Engineeringand Turnkey solutions, technology and EPC installations in liquid solid separation application in various industrysegments like Mineral Processing and Beneficiation, Pulp and Paper processing, Fertilizer and Chemicals andEnvironment management.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

The consolidated financial statements of the company and its subsidiaries (together the “Group) are preparedunder historical cost convention in accordance with the generally accepted accounting principles in India (“IndianGAAP”) and comply in all material respect with the Accounting Standards specified under Section 133 of CompaniesAct, 2013 (“the Act 2013’)/ Companies Act,1956 (‘the Act,1956), read with rule 7 of the Companies (Accounts) Rules,2014, and other pronouncements of the Institute of Chartered Accountants of India (“ICAI”). The accounting policiesapplied by the company are consistent with those used in the previous year, unless otherwise stated.

All the assets and liabilities have been classified as current or non-current, wherever applicable, as per theoperating cycle of the Company as per the guidance as set out in the Schedule III of the Companies Act, 2013.

Operating cycle for the business activities of the Company covers the duration of the specific project/contract/project line/service including defect liability period, wherever applicable and extends up to the realizations ofreceivables (including retention money) within the agreed credit period normally applicable to the respective project.

b) Use of Accounting Estimates

The preparation of the financial statements in conformity with GAAP requires the management to make estimatesand assumptions that affect the balances of assets and liabilities and disclosures relating to contingent liabilitiesas at the reporting date of the financial statements and amounts of income and expenses during the year ofaccount. Examples of such estimates include contract costs expected to be incurred to complete constructioncontracts, provision for doubtful debts, income taxes and future obligations under employee retirement benefitplans.

Although these estimates are based upon management’s best knowledge of current events and actions, actualresults could differ from these estimates. Any revision to accounting estimates is recognized prospectively in thecurrent and future periods.

c) Fixed Assets

Fixed Assets are stated at cost of acquisition/revaluation less accumulated depreciation, amortization andimpairment losses, if any. Cost is inclusive of duties and taxes (net of Cenvat and other Credits), incidentalexpenses, erection/commissioning expenses and interest up to the date the qualifying asset is put to use.

Capital work in Progress comprises advances paid to acquire fixed assets and the cost of fixed assets not readyfor their intended use as at the reporting date of the financial statements.

d) Impairment

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment ofassets. If any indication of such impairment exists, the recoverable amount of such assets is estimated andimpairment is recognized if the carrying amount of these assets exceeds their recoverable amount. The recoverableamount is greater of the asset’s net selling price and value in use. In assessing value in use, the estimated futurecash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciationis provided on the revised carrying amount of the asset over its remaining useful life.

e) Investments

Current investments are carried at lower of cost and fair value. Long-term investments are stated at cost. Provisionfor diminution in value is made to recognise a decline other than temporary in the value of such investments.

f) Depreciation/Amortization

Depreciation is provided on the basis of the straight-line method as per rates prescribed in Schedule II of theCompanies Act, 2013 on the original cost of the Fixed Assets.

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Consolidated Notes forming part of the Financial Statements (Contd.)


The useful life of the assets is given below.

Particulars Useful life in year

(i) Road/buildings (including company-owned flats)/factory buildings 3/60/30

(ii) Plant and machinery

Diesel generating sets 15

Welding machines 12

Air cnditioners 5

Office equipments 5

(iii) Motor vehicles/motor cycle/hydra (crane) 8/10/15

(iv) Furniture and fittings 10

(v) Computers/computer (software) 3 and 6/5

In case of Plant used for double shift depreciation is increased by 50 percent.

In case of certain assets where depreciation is calculated on revalued cost the portion related to the revaluedamount is adjusted against Revaluation Reserve.

The premium, being the cost of leasehold land, is amortized over the lease period.

Technical Know-how is amortized over a period of five years in equal installments.

g) Borrowing Costs:

Borrowing costs that are attributable to the acquisition and construction of a qualifying asset are capitalized as a partof the cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requiressubstantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense inthe year in which they are incurred.

h) Inventories:

Inventories are valued at lower of cost and net realizable value after providing for obsolescence and other anticipatedlosses, if any. Cost of manufactured goods and Work-in-Progress include related overheads incurred in bringingthe inventories to their present location and condition and excise duty paid/payable.

i) Revenue Recognition:

Contracts Revenue

Contract Revenue is recognized by reference to the stage of completion of the contract activity at the reporting dateof the financial statements on the basis of percentage of completion method.

The stage of completion of contracts is measured by reference to the proportion that contract costs incurred for workperformed up to the reporting date bear to the estimated total contract costs for each contract.

An expected loss on the construction contract is recognized as an expense immediately when it is certain that thetotal contract costs will exceed the total contract revenue.

Price escalation and other claims and/or, variation in the contract work are included in contract revenue only whennegotiations have reached an advanced stage such that it is probable that the customer will accept the claim; andthe amount that is probable will be accepted by the customer can be measured reliably.

Incentive payments, as per customer-specified performance standards, are included in contract revenue only whenthe contract is sufficiently advanced and that it is probable that the specified performance standards will be met andthe amount of the incentive payment can be measured reliably.

Service Contracts

Revenues in respect of time and rate contracts are recognized based on time spent and/or parameters achieved inaccordance with contracted terms.

Revenues in respect of other contracts are recognized on accrual basis in accordance with the terms of the contracts.

Others

In the case of other contracts, sales and profits are accounted for on the basis of actual work done on the contracts/ dispatch of items.

Revenue from Sale of Goods

Revenue from the sale of goods is recognized when substantial risk and rewards of ownership are transferred tothe buyer under the term of contract

j) Foreign Currency Transactions

i) The reporting currency of the Company is Indian Rupee.

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ii) Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchangerate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reportedusing the closing rate.

iii) Exchange differences that arise on settlement of monetary items or on reporting of monetary items at eachbalance sheet date at the closing date are recognized as income or expense in the period in which they arise.

k) Employee Benefits

i) Gratuity

The company provides for obligation towards Gratuity, a defined benefit plan, covering eligible employees onthe basis of an actuarial valuation using the projected unit credit method as at the year end. In case of fundeddefined plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefitplans to recognize the net obligation. Further, for certain employees, contributions are made to the fundadministered by the management.

ii) Superannuation

Contributions made under a scheme of Life Insurance Corporation of India are charged to the statement ofprofit and loss.

iii) Leave Encashment

Liability for leave encashment is provided on the basis of actuarial valuation using the projected unit creditmethod as on the Balance Sheet date. Actuarial Gain/Losses, if any, are immediately recognized in the statementof profit and loss.

iv) Provident Fund

The contribution towards Provident Fund is made to the Statutory Authorities/ fund administered by themanagement and is charged to the statement of profit and loss.

l) Provisions and Contingencies

A provision is recognized when the Company has a present legal or constructive obligation as a result of past eventand it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliableestimate can be made. Provisions are not discounted to its present value and are determined based on bestestimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet dateand adjusted to reflect the current best estimates. Contingencies are recorded when it is probable that a liability willbe incurred, and the amount can be reasonably estimated. Contingent liabilities are disclosed by way of a note tothe accounts. Contingent assets are not recognised in the financial assets.

m) Income Taxes

Tax Expenses for the year comprises both current tax and deferred tax. Current tax is determined as the amount oftax payable in respect of taxable income for the year. Deferred tax is recognized on timing differences, being thedifference between taxable income and accounting income that originate in one period and are capable of reversalin one or more subsequent periods and quantified using the tax rates and law enacted or substantively enacted bythe reporting date. Where there is an unabsorbed depreciation or carry forward loss, deferred tax assets arerecognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognizedonly to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed for theappropriateness of their respective carrying values at each balance sheet date.

n) Earnings Per Share

Basic earnings per share is calculated by dividing the net earnings after tax for the year attributable to equityshareholders by the weighted average number of equity shares outstanding during the year.

For calculating diluted earnings per share, the number of shares comprises the weighted average shares consideredfor deriving basic earnings per share, and also the weighted average number of shares, if any which would havebeen used in the conversion of all dilutive potential equity shares. The number of shares and potentially dilutiveequity shares are adjusted for the bonus shares and the sub-division of shares, if any.

o) Contingent Liabilities

Contingent liabilities are determined on the basis of available information and are disclosed by way of a note to theaccounts.

p) Internal Financial Control System

The Company has sufficient system of internal Financial Controls to help Management to review the effectivenessof the Financial and Operating Controls and assurance about adherence to the Company’s laid down Systems andProcedures. As per the provisions of the Companies Act, 2013 internal controls and documentation are in place forall the activities. Statutory auditors have verified, internal financial controls (IFC) at entity level and operations leveland satisfied about control effectiveness. The controls are reviewed at regular intervals to ensure that transactionsare properly authorized and correctly reported and assets are safeguarded. The Audit committee periodicallyreviews the findings and recommendations of the Auditors and takes corrective actions as deemed necessary. Thein house developing software periodically for reviewing various financial reports is in implementation for most ofthe Projects sites that would further strengthen the internal control mechanism.


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3 Share Capital



Authorised :


Issued, subscribed and paid-up :


3.1 Reconcilation of the number of shares outstanding at the beginning and at the end of the reporting year :




3.2 Rights, preferences and restrictions attached to equity shares :

The Company has only one class of Equity Shares having a par value of ì 2 per share. Each holder of equity shares isentitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled toreceive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be inproportion to the number of equity shares held by the shareholders.

3.3 Equity shares held by holding company:




3.4 Details of shareholder holding more than 5 percent shares in the company:


Name Number % Shareholding Number % Shareholding

IVRCL Limited, the holding company 3,98,04,430 55.28 3,98,04,430 55.28

3.5 Aggregate number of equity shares alloted as fully-paid up by way of bonus:


Particulars Year Number Year Number

Equity shares were issued as fully paidbonus shares by capitalisation of generalreserve 2009-10 3,60,02,904 2009-10 3,60,02,904

3.6 Details of Shares Reserved for issue under options

As part of restructuring of working capital limits approved by consortium of Banks, ì 150 million towards share applicationmoney of Promoters.

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4 Reserves and Surplus

Capital ReserveBalance at the beginning and end of the year 1,296.98 1,296.98

1,296.98 1,296.98

Revaluation Reserve (refer note 11(a))Balance at the beginning and end of the year 905.67 905.67

905.67 905.67

Securities Premium AccountBalance at the beginning and end of the year 222.34 222.34

222.34 222.34

General ReserveBalance at the beginning and end of the year 972.49 972.49

972.49 972.49

Surplus/(deficit) in the Statement of Profit and LossBalance at the beginning of the year (9,947.43) (1,852.09)Depreciation on transition to schedule II ofthe Companies Act 2013 (refer note 11(c)) - (39.38)Add/(less): Profit/(loss) for the year (1,926.11) (8,055.96)

Closing balance (11,873.54) (9,947.43)

Total (8,476.06) (6,549.95)

5 Long term borrowings

Secured

From banksExternal commercial borrowing (refer note 38) - 312.96Working capital term loan (WCTL) (refer note 9.1,9.2,41 and 45.6) 295.22 1,993.99Funded interest term loan (FITL) (refer note 9.1,9.2,41 and 45.6) - 10.86

Total 295.22 2,317.81

5.1 During the previous year, Andhra Bank (consortium partner) vide their letter dated July 20, 2013 (‘sanction/restructuring of workingcapital limits’) has approved the company’s financial restructuring package in respect of credit facilities effective from April 1, 2013.As per the restructuring package, a part of the debts outstanding in respect of cash credit facilities aggregating to ì 460.46 million andì 8.25 million have been converted into working capital term loan and funded interest term loan (i.e. WCTL and FITL) respectively.


a. External commercial borrowings is secured by first charge over the land and builiding situated at Mumbai (the company’scorporate office) along with other assets of the company with current value not less than 1.25x of the facility amount.Borrowing is further secured by first charge over the existing fixed assets and current assets of DavyMarkham Limited, UK.

b. Working capital term loan and Funded interest term loan from banks are secured by hypothecation of entire stocks, book debts,outstanding money receivable, claims and bills (both present and future). The loan is further secured by fixed assets owned bywholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat), residual charge over building at Andheri, Mumbaiand flats situated in Mumbai and flat owned by wholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat). Thefacility is further secured by corporate guarantee of the holding company and pledge of 29.38 percent shares of the companyheld by IVRCL Limited (holding company).Further, 100 percent shares of HDO Technologies Limited are pledged for the borrowingof HDO Technologies Limited. Moreover the company and its subsidiary (i.e. HDO Technologies Limited) has given corporateguarantee for each other borrowings. The facility carries interest @11.50 percent p.a.

5.3 Terms of repayment

a. External commercial borrowings:-Repayable in sixteen equal quarterly installments with the first installment due on April 17,2013 (i.e. at the end of fifteenth month from the date of disbursement) and ending on January 17, 2017, three months USD LIBORas prevailing at the start of every interest period plus margin (300 bps) payable in arrears at the end of every interest period netof withholding tax or deductions, if any.

93



b. Working capital term loan:- Repayable in twenty four quarterly installments after moratorium period, of nine months (in case ofAndhra Bank) and twelve months (in case of Bank of India), commencing from April 01, 2013 (in case of Andhra Bank) andDecember 31, 2012 (in case of Bank of India), with the first installment due on March 2014 and ending on December 2019.

c. Funded interest term loan:- Repayable in ten equal quarterly installments after moratorium period, of nine months (in case ofAndhra Bank) and twelve months (in case of Bank of India), commencing from April 01, 2013 (in case of Andhra Bank) andDecember 31, 2012 (in case of Bank of India), with the first installment due on March 2014 and ending on June 2016.

5.4 Default in repayment of term loan

Amount of Period of As at Particulars default default in days March 31, 2016

Repayment of term loans 82.92 - 912.08 989-75 912.0823.28 - 1,505.44 549-43 1,505.44

6.99 - 66.77 549-43 66.775.84 - 29.19 276-1 29.19

Interest on term loans29.35 - 276.36 989-75 276.3614.41 - 300.25 610-1 300.25

0.56 - 11.74 549-1 11.742.33 - 25.12 276-1 25.12


Amount of Period of As at Particulars default default in days March 31, 2016

Repayment of term loans 6.33 - 409.34 549-43 409.342.32 - 18.18 549-43 18.183.32 - 19.90 367-1 19.90

0.40 1 0.40

Interest on term loans 3.05 - 85.87 579-1 85.870.20 - 2.38 426-1 2.380.43 - 6.62 123-1 6.620.01 - 0.08 215-1 0.08


6 Long term provisions

For employee benefits 18.33 19.35

Total 18.33 19.35

7 Short term borrowings

Secured

From banksWorking capital loan (WCL) 3,632.28 6,509.19(Refer note 7.1,7.2,9.1,9.2,41 and 45.6)

Total 3,632.28 6,509.19


Consortium of Bank of India and Andhra Bank

Working capital loan from banks are secured by hypothecation of entire stocks, book debts, outstanding money receivable, claims andbills (both present and future), fixed assets owned by wholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat),residual charge over building at Andheri, Mumbai and flats situated in Mumbai and flat owned by wholly owned subsidiary companysituated at Vatva, Ahmedabad (Gujarat). The facility is further secured by corporate guarantee of the holding company and pledge of29.38 percent shares of the company held by IVRCL Limited (holding company). Further, 100 percent shares of HDO TechnologiesLimited are pledged for the borrowings of HDO Technologies Limited. Moreover the company and its subsidiary (i.e. HDO TechnologiesLimited) has given corporate guarantee for each other borrowings. The facility carries interest @11 percent to 13 percent p.a.

ICICI Bank

Working capital loan from banks are secured by first and exclusive charge on all the current assets (including receivables) andmovable fixed assets related to OPaL project and second paripassu charge on factory land and building owned by wholly ownedsubsidiary company situated at Vatva, Ahmedabad (Gujarat), and building at Andheri, Mumbai and flats situated in Mumbai and flatowned by wholly owned subsidiary company situated at Vatva, Ahmedabad (Gujarat). The facility carries interest @ 13 percent p.a.

94


7.2 Defaults in repayment of dues to banks



Working capital loan 3.89 - 8.13 32-1 8.13107.93 - 1,671.59 288-1 1,671.59

4.23 - 2353.17 589-43Default from the date of demand notice 3393.14 - 3,418.69 43-1 3,418.69Interest on working capital loan 24.77 - 658.26 488-1 658.26



Working capital loan 4.56 - 248.46 245-1 248.468.58 - 337.96 510-43

Default from the date of demand notice 631.74 - 632.24 43-1 632.24Interest on working capital loan 6.08 - 103.75 426-1 103.75


8 Trade payables

Dues to micro enterprises and small enterprises (refer note 31) 28.46 28.84Acceptances (refer note 5.2) 9.11 442.88Other trade payables (refer note 37) 3,779.80 3,298.41

Total 3,817.37 3,770.13

9 Other current liabilities

Current maturities of long term debt 1,373.37 1,289.06Liabilities towards WCTL,FITL,WCL and interest (refer note 9.1,9.2,41 and 45.6) 7,212.91 -Interest accrued but not due on borrowings 16.44 16.49Interest accrued and due (refer note 5.4 and 7.2) 309.20 519.01Interest others 82.22 34.31Advance from contractee/clients 879.39 1,044.18Advance from holding company 150.00 150.00Advance from director/employee 18.79 0.01Security deposit 20.30 20.30Unclaimed dividend * 0.82 0.92Other liabilities

i. Accrued salaries and benefits 102.90 85.51ii. Withholding and other taxes payable 285.77 223.34iii. Other payables 12.04 7.62

Total 10,464.15 3,390.75

* Do not include any amount, due and outstanding,to be credited to investor education andprotection fund.


9.1 Includes WCTL, FITL, WCL and interest of ì 1,505.44 million, ì 66.77 million, ì 4,076.95 million and ì 312 million respectively of Bank ofIndia due to recovery proceedings initiated against the Company on February 18, 2016 under the Securitization and Reconstructionof Financial Assets and Enforcement of Security Interest Act, 2002.


9.2 Includes WCTL, FITL, WCL and interest of of ì 409.34 million, ì 18.18 million, ì 735.99 million and ì 88.25 million respectively of Bank ofIndia due to recovery proceedings initiated against the Company on February 18, 2016 under the Securitization and Reconstructionof Financial Assets and Enforcement of Security Interest Act, 2002.

10 Short term provisions

For employee benefits 8.22 9.92Provision for foreseeable losses 657.65 1,142.66

Total 665.87 1,152.58


95


11 Fixed assets

GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

Particulars As at Adjustment Additions Deletion/ As at As at Adjustment For the Adjustment Deletion/ As at As at As atApril 01, on account Adjustment March 31, April 01, on account year to opening Adjustment March 31, March 31, March 31,

2015 of subsi- 2016 2015 of subsi- reserves 2016 2016 2015diary not diary not

considered considered

A. Tangible Assets

Land - freehold 1,047.19 - - - 1,047.19 - - - - - - 1,047.19 1,047.19

Leasehold Land 810.53 - - - 810.53 38.04 - 8.15 - - 46.19 764.35 772.49

Buildings 465.67 - - - 465.67 168.85 - 9.84 - - 178.69 286.98 296.82

Plant and machinery 433.15 - - - 433.15 239.19 - 25.87 - - 265.06 168.09 193.96

Motor vehicles 39.33 - 0.01 1.35 37.99 34.05 - 0.95 - 1.35 33.65 4.37 5.30

Furniture and fixtures 65.22 - 0.20 - 65.42 48.72 - 4.15 - - 52.87 12.53 16.50

Office equipment 55.44 - 0.06 - 55.49 53.37 - 0.61 - - 53.98 1.51 2.07

Computers 101.03 - 0.01 - 101.04 98.98 - 0.52 - - 99.50 1.55 2.05

Total tangible assets 3,017.56 0.28 1.35 3,016.48 681.20 - 50.09 - 1.35 729.94 2,286.57 2,336.38

Previous year total (3,020.84) - (1.74) (5.02) (3,017.56) (601.73) - (51.39) (37.76) (9.68) (681.20) (2,336.38)

B. Intangible assets

Software 96.68 - - - 96.68 94.37 - 0.51 - - 94.88 1.81 2.32

Goodwil l 6.90 - - - 6.90 6.90 - - - - 6.90 - -

Technical knowhow 9.81 - - - 9.81 9.81 - - - - 9.81 - -

Total intangible assets 113.39 - - 113.39 111.08 0.51 - - 111.59 1.81 2.32

Previous year total (113.37) - (0.02) - (113.39) (95.02) - (6.27) (2.02) (7.77) (111.08) (2.32)

Grand total 3,130.95 0.28 1.35 3,129.87 792.28 50.60 - 1.35 841.53 2,288.38 2,338.70


Capital work-in-progress 60.16 -

Previous Year Total (60.16)

Notes:a . During the year 2013-2014 the company has revalued its land situated at Chakala, Andheri (East) , Mumbai at ì 1,047.19 million thereby increasing land

value by ì 905.67 million and creating revaluation reserve of the same amount.

b . Buildings include company owned residential flats of the book value of ì 8.85 million (previous year ì 8.85 million) including face value of shares held in Co-operative housing societies of ì 0.01 million in respect of which documents lodged with the Registrar of properties for registration are yet to be received back.

c . In accordance with the requirements of Schedule II of the Companies Act, 2013, the Company has re-assessed the useful lives of the fixed assets. Hence,ì 39.38 million( net of Deferred Tax of ì 0.40 million) has been adjusted to the opening balance of the retained earnings where the remaining useful life ofthe assets was nil as at April 01, 2014.



12 Non current investments

Trade investments (valued at cost unless stated otherwise)UnquotedInvestment in equity shares of subsidiary companiesHDO (UK) Limited (refer note 35 ) 1008000 GBP 1 73.51 73.51HDO Zambia Limited 50000 ZMK 1 0.05 0.05

73.56 73.56Less: Provision for dimuniation in value of investments (73.51) (73.51)

0.05 0.05Other investmentQuotedEquity shares of ì 10 each fully paid upVoltas Limited 500 ì 1 $ $Ion Exchange (I) Limited 50 ì 10 0.01 0.01Gujarat State Petronet Ltd. 8983 ì 10 0.24 0.24Gitanjali Gems Limited 884 ì 10 0.17 0.17Less : Provision for diminution in the value of investments (0.01) (0.01)Triveni Engineering & Industries Limited 66 ì 10 0.01 0.01Less : Provision for diminution in the value of investments (0.01) (0.01)

0.42 0.42

96


As at As at


12 Non current investments (Contd.)

Unquoted

Western Bio Systems Ltd. 10 ì 10 # #

Jord Engineers India Ltd. 100 ì 10 * *

Western India Industries 50 ì 10 @ @

Western Paques (I) Limited 100 ì 10 0.01 0.01

Less : Provision for diminution in the value of Investments (0.02) (0.02)

National Savings Certificates 0.01 0.01

0.01 0.01

Total 0.48 0.48

Aggregate amount of quoted investment and market value thereof:

Book value 0.42 0.41

Market value 1.43 1.30

Aggregate amount of unquoted investments 0.06 0.05

Aggregate provision for diminution in value of investment 73.54 73.55

ì in full figures- $ ì 3,225, # ì 100, * ì 3,290, @ ì 2,975

13 Deferred tax assets (net)

Deferred tax liabilities on account of

Depreciation (48.71) (48.71)

Deferred tax assets on account ofEmployee benefits 7.58 7.58Unabsorbed business losses (refer note 45.3) 95.71 95.71

Total 54.58 54.58

14 Long term loans and advances(Unsecured, considered good unless otherwise stated)

Security deposit 3.73 4.06Loans and advances to wholly owned subsidiariesForeign subsidiary (refer note 34)

Considered good - -Doubtful 1,422.37 1,422.37

1,422.37 1,422.37Less: Provision for doubtful advances (1,422.37) (1,422.37)

- -Advance income-tax and tax deducted at source (net of provisions) 72.13 114.84

Total 75.86 118.90


97




15 Other non-current assets (refer note 35 and 39)

(Unsecured and considered good unless otherwise stated)

Retention money

Considered good 863.10 931.97Doubtful 337.03 347.59

1,200.13 1,279.56Less: Provision for retention money (337.03) (347.59)

863.10 931.97Other receivables (refer note 34)Considered good - -Doubtful 474.71 474.71

474.71 474.71Less: Provision for other receivables (474.71) (474.71)

- -

Total 863.10 931.97

16 Inventories

At Project sites

- Project Stores - -

At FactoryRaw Material 304.43 336.90Work-in-Progress 164.55 353.37Stores and Spares 34.98 34.92

Total 503.96 725.19

17 Trade receivables (refer note 34,35,37,39,45.1 and 45.2)

(Unsecured and considered good unless otherwise stated)

Outstanding for a period exceeding six months from the date

they were due for the payment

Considered good 1,757.64 1,529.71

Doubtful 937.34 891.83

2,694.98 2,421.54Less: Provision for doubtful trade recevables (937.34) (891.83)

1,757.64 1,529.71Other trade receivables 427.62 511.25

Total 2,185.26 2,040.96

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18 Cash and bank balances

Cash and cash equivalentsCash on hand 3.79 2.90Balances with banksIn current accounts 19.64 43.39

23.43 46.29Other bank balancesIn margin money deposits 5.50 13.98(Lodged with banks against gurantees issued by them)In dividend account 0.82 0.92

6.32 14.90

Total 29.75 61.19

19 Short term loans and advances(Unsecured and considered good unless otherwise stated)

Loans and advances to related partiesDirectors (refer note 46.3) 10.12 10.48Advances to sub-contractors, suppliers and others 879.98 978.92Balance with statutory and government authoritiesConsidered good 248.70 265.09Doubtful 55.81 54.07

304.51 319.16Less Provision for doubtful advances (55.81) (54.07)

248.70 265.09Security deposits - -Considered good 48.41 58.98Doubtful 12.56 -

60.97 58.98Less Provision for doubtful advances (12.56) -

48.41 58.98Prepaid expenses 17.13 26.48

Total 1,204.34 1,339.95

20 Other current assets(Unsecured and considered good unless otherwise stated)

Interest accrued other than on investments 0.99 0.76Other Receivables (refer note 39) 233.35 -Unbilled revenue (refer note 36 and 39) 1,770.96 1,791.03

Total 2,005.30 1,791.79

99





21 Revenue from operations

Revenue from EPC 1,443.78 1,185.04

Revenue from sales of product 481.04 329.03

Revenue from finished goods traded 605.01 2,280.74

Other operating revenue 18.49 31.51

Total 2,548.32 3,826.32

22 Other income

Interest received on deposits with banks 0.65 2.95

Interest received others 3.74 27.51

Liabilities/provisions no longer required written back 0.03 1.27

Dividend received on investment 0.01 0.10

Rent received 34.20 34.20

Surplus on sale of fixed assets (net) - 15.58

Profit on sale of investment - 12.31

Bad debt recovered - 50.36

Other miscellaneous income 0.85 27.56

Total 39.48 171.84

23 Cost of materials/ services consumed

Systems, equipments, spares and materials

Opening stock - 47.36


416.06 888.54

Less : Closing stock - -

Cost of systems, equipments and spares consumed 416.06 888.54

Service works bills 768.07 994.70

Indirect taxes 55.22 52.89

Raw Materials and components consumed

Opening Stock 336.90 395.49


491.68 644.71

Less : Closing Stock 304.43 336.90

Cost of Raw Material and Components consumed 187.25 307.81

Consumption of Stores, Spares and Patterns 14.03 19.81

Power and Fuel 9.37 10.55

Processing Charges 75.02 72.64

Total 1,525.02 2,346.94

100




24 Changes in inventories of work-in-progress

Inventories at the beginning of the year

Work-in-progress 353.38 285.65

353.38 285.65Inventories at the end of the yearWork-in-progress 164.55 353.37

164.55 353.37

Total 188.83 (67.72)

25 Employee benefits expense

Employees’ remuneration and benefits

Salaries, wages, bonus etc. 226.10 285.98Contribution to provident and other funds 14.81 16.36Staff welfare expenses 13.96 18.46Managerial remuneration (refer note 46.3) 1.39 5.50

Total 256.26 326.30

26 Finance cost

Interest expenses 1,456.82 978.08Other borrowing cost 90.66 313.66

Total 1,547.48 1,291.74

27 Other expenses

Rent 8.56 5.81Rates and taxes 4.68 18.49Travelling and conveyance expenses 19.24 23.86Repairs and maintenance - buildings 1.97 2.17Repairs and maintenance - others 5.90 13.17Insurance 4.29 4.19Communication 4.24 5.37Sitting and other fees 0.37 0.39Donations 0.01 1.22Wealth tax 0.70 0.09Printing and stationery 1.47 2.61Advertisement and publicity 0.08 0.22Auditors remuneration

Statutory audit fees 2.26 1.81Limited review fees 0.45 0.85Tax audit fees 0.29 0.28Reimbursement of expenses 0.12 0.29

Legal and professional fees 36.75 97.10Tender fees 0.03 -Bad debts written off 0.02 -Service tax input written off 5.72 -Provision for doubtful debts 34.94 1,198.85Provision for advances/security deposits 14.28 54.07Provision for foreseeable losses 21.20 1,142.66Loss on exchange 69.98 54.59Miscellaneous expenses 23.95 39.42

Total 261.50 2,667.51


101


28. Criteria For Preparation of Consolidated Financial Statements

The company has presented Consolidated Financial Statements by considering its own financial statements with those

of its wholly owned subsidiary in accordance with Accounting Standards (AS) 21 “Consolidated Financial Statements”

29. Principles Of Consolidation

1. The consolidated financial statements have been prepared on the following basis:

i. The consolidated financial statements have been combined on a line-by-line basis by adding the book values

of like items of assets, liabilities, income and expenses after fully eliminating intra-group balances and intra-

group transactions resulting unrealized profits or losses as per Accounting Standard (AS) 21- “Consolidated

Financial Statement”.

ii. The difference between the costs of investments in the subsidiary company over the net assets is recognized

in the financial statements as Goodwill upon consolidation.

iii. Minority interests’ share of net profit of the subsidiary consolidated for the year is identified and adjusted

against the income of the group in order to arrive at the net income attributable to the shareholders of the

Company.

Minority interests’ share of net assets of consolidated subsidiary is identified and presented in the Consolidated

Balance Sheet separately from liabilities and equity of the Company’s shareholders.

2. The consolidated financial statements present the consolidated financial statements of Hindustan Dorr-Oliver

Limited with the following subsidiaries:

S. Country of Extent of equity Date on whichNo. Name of the Company Incorporation shares held become subsidiary

1 HDO Technologies Limited * India 100% July 20, 2006

2 DavyMarkham India Private limited * India 100% May 26, 2010

* Unaudited Financial Statement

3. Current year’s and previous years consolidated financial statements does not contain financial statements ofcertain foreign subsidiaries reflecting total assets of ì 110.50 million as at March 31, 2015, total revenue of ì nilmillion, net loss of ì 0.29 million and net cash outflow of ì 0.19 million for the period then ended.

Following are the subsidiaries which have not been consolidated:

S. Country of Extent of equity Date on whichNo. Name of the Company Incorporation shares held become subsidiary

1 HDO (UK) Limited United Kingdom 100% February 28, 2010

2 HDO Zambia Limited Zambia 100% July 07, 2011

30. Earnings per share (EPS)

For the For theS. Year Ended Year EndedNo. Particulars March 31, 2016 March 31, 2015

(a) (Loss)/profit after tax before extraordinary item for calculation ofbasic and diluted EPS (1,926.11) (8,055.96)

(b) (Loss)/profit after tax after extraordinary item for calculation ofbasic and diluted EPS (1,926.11) (8,055.96)

(c) Weighted average number of equity shares outstanding for calculation of EPS 72,005,808 72,005,808

(d) Basic and diluted EPS(before extraordinary items) (26.75) (111.88)

(e ) Basic and diluted EPS(after extraordinary items) (26.75) (111.88)


102



31. Dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006(MSMED Act) information relating to Micro and Small Enterprises have been determined based on the informationavailable with the Company. The required details are given below:

S. As at As atNo Particulars March 31, 2016 March 31, 2015

a Principal amount remaining unpaid 28.46 28.84

b Interest due thereon 31.39 27.86

c Interest paid by the Company in terms of Section 16 of MSMED Act, alongwith the amount of the payment made to the suppliers and serviceproviders beyond the appointed day during the year. - -

d Interest due and payable for the period of delay in making payment (whichhas been paid but beyond the appointed day during the year) butwithout adding the interest specified under MSMED Act. - -

e Interest accrued and remaining unpaid. 31.39 27.86

f Further interest remaining due and payable even in the Succeeding years,until such date when the interest dues as above are actually paid to thesmall enterprise. 31.39 27.86

32. Contingent liabilities and commitments (to the extent not provided for)

a. Contingent liabilities


I Claims against the Company not acknowledged as debt 92.94 87.70

II Guarantees

Corporate Guarantees 242.87 242.87

Bank Guarantees 1,514.78 1,847.26

III Other money for which the Company is contingently liable

*Income-tax matters 41.35 16.65

*Sales-tax / WCT / VAT matters 763.64 833.41

*Excise/Service Tax matters 231.81 231.81

*Labour Cess - -

*Customs duty matters 0.08 0.08

IV Corporate Guarantee issued by the Company on behalf of its subsidiary 13,903.60 13,903.60

* Excluding interest / penalty as may be determined / levied on the conclusion of the matters.

b. Commitments

As at As atParticulars March 31, 2016 March 31, 2015

Estimated amount of contracts remaining to be executed oncapital account and not provided for. - -

There are no amounts of contracts which are remaining to be executed on capital account and not provided for.Commitments on account of letter of credit as at March 31, 2016 is ì 393.96 million (previous year ì 1,382.97 million).

c. Impact of pending legal cases

The Group is party to several cases with clients as well as contractors, pending before various forums/courts/arbitration proceedings’. It is not possible to make a fair assessment of the likely financial impact of these pendingdisputes/litigations until the cases are decided by the appropriate authorities.

103



33. During the year the Company has incurred a Net Loss of ì 1,632.62 million (previous year ì 7,731.56 million) resultingin to accumulated losses of ì 11,043.23 million (previous year ì 9,410.61 million) and erosion of its net worth. TheCompany has obligations towards borrowings aggregating to ì 9,704.37 million (previous year ì 8,455.76 million) whichincludes working capital loan from banks of ì 2,816.32 million (previous year ì 4,376.59 million) outstanding letters ofcredit/bill discounting from banks of ì 384.85 million (previous year ì 1,057.45 million) and current maturities of longterm debts/liabilities towards WCTL,FITL and WCL of ì 6,314.92 million (previous year ì 1,188.23 million) falling dueover next twelve months period, obligations pertaining to operations including unpaid creditors and statutory dues asat March 31, 2016. These matters require the Company to generate additional cash flows to fund the operations as wellas other statutory obligations notwithstanding the current level of low operating activities. The Company has beenunable to obtain financing for this purpose. The situation indicates the existence of a material uncertainty that may castsignificant doubt on the Company’s ability to continue as going concern and therefore the company may be unable torealize its assets and discharge its liabilities in the normal course of business. The financial statements do not includeany adjustment in this respect.

34. National Stock Exchange of India Limited vide its letters dated June 19, 2014 and May 5, 2015 has directed the companyto rectify the qualification raised by the Statutory Auditors. Accordingly the Company has rectified the qualification relatedto recognition of Deferred Tax Assets of ì 1,089.37 million, Investment and Loans and advances to Foreign Subsidiaryof ì 1,495.88 million and Trade and Other Receivable of ì 515.28 million by providing for the same in the Books ofAcccount.

35. Trade receivables and Retention as at March 31, 2016 include overdue amounts aggregating to ì 350.85 million(previous year ì 322.84 million) and ì 225.29 million (previous year ì 212.09 million) respectively for a long period of time,receivable from contractee/clients.These have been considered good and fully recoverable by the management as theCompany is in continuous engagement with the parties and taking necessary steps for realization of its dues. Accordinglyno provision has been made in books of account.

36. Unbilled revenue as at March 31, 2016 includes ì 867.27 million (previous year ì 839.60 million) in respect of certainprojects where progress is insignificant during the year and the billing is pending for a long period/ years. In the opinionof management such unbilled revenue has been considered good and fully recoverable.

37. The balances in Trade Receivables, Retention Money, Sundry Creditors and Advances and certain bank balances aresubject to reconciliation/confirmations and adjustments, if any. Such adjustments, in the opinion of the management,are not likely to be material and will be carried out as and when ascertained.

38. The Company has not received any confirmation from one of the lender having outstanding of ì 1,520.10 million(including interest accrued of ì 276.36 million) as at March 31, 2016. In the opinion of the management there will be nomaterial adjustment on the confirmation by the lender.

39. In respect of certain customers, the company has initiated discussion with the customer related to encashment of bankguarantee by the customers. The trade receivables, retention, withheld money, unbilled revenue and other receivablesfrom such customers as at March 31, 2016 aggregates to ì 538.60 million. Further, bank guarantee of ì 526.70 millionwas encashed subsequent to this year. The management is confident that the outcome of the negotiation will befavorable and no provision is considered necessary at this stage.

40. In respect of invocation of corporate guarantees of ì 1,411.80 million and initiation of recovery actions against thecompany in respect of such guarantees extended / executed for its one subsidiary in favour of the lender. The managementhas not made any provision in respect of this invoked corporate guarantee as the management is under discussionwith the lender and confident that the same shall be settled amicably.

41. One lender has initiated recovery proceedings against the Company under the Securitization and Reconstruction ofFinancial Assets and Enforcement of Security Interest Act, 2002 in respect of outstanding loan aggregating toì 5,961.16 million (including interest on WCTL and FITL of ì 177.92 million). The Bank has however demanded ì 6,545million. The difference of ì 583.84 million being penal and other charges, the company has not provided for the sameas it is in the process of reconciliation of the difference amount as stated above.

42. In the opinion of the Board, Current Assets, Loans and Advances have a value on realization in the ordinary course ofbusiness at least equal to the amount at which they are stated.

43. Certain creditors have filed winding up petitions against the Company under section 433 and 439 of the Companies Act,1956 before the Hon’ble High Court of Mumbai. The company is taking necessary steps including signing of Memorandumof Understanding and/ or filing the Consent Terms in the High Court with the creditors for withdrawal of such petitions.The matter is subjudice and the outcome of which is subject to the Company fulfilling the payment conditions ofMemorandum of Understanding/ Consent Terms.

104

44. The Subsidiary company, HDO Technologies Limited, has suffered losses during the year which resulted in increase in

accumulated losses and erosion of its net worth as at the balance sheet date. The management, considering the future

business prospects, believes that growth in operations of the Company will result into increase in its revenue and

consequently profitability and net worth. In the opinion of the management, the carrying value of Goodwill aggregating to

ì 1,290 million arising on consolidation of this subsidiary represents its recoverable amount and no provision is

required at this stage

45. HDO Technologies limited

45.1Trade receivables as at March 31, 2016 include ì 612.70 million (previous year ì 576.47 million) outstanding for a long

period. The company is in engagement with the customers for realization of dues. In the opinion of the management the

receivables are good and fully recoverable.

45.2The balances in Trade Receivables, Sundry Creditors, Retention Money and Advances are subject to confirmations and

adjustments, if any. Such adjustments, in the opinion of the management, are not likely to be material and will be carried

out as and when ascertained.

45.3Deferred tax assets, on business losses, aggregating to ì 95.71 million have been recognized on the basis of business

plan prepared by the management. The management believes that, growth in operations of the Company will result into

increase in its revenue and profitability and consequently sufficient future taxable income will be available against which

such deferred tax assets can be realized.

45.4As per unaudited financial statements, the Company has incurred a net loss of ì 293.48 million (previous year

ì 324.39 million) during the year resulting in to accumulated losses of ì 830.25 million (precious year ì 536.77 million)

and erosion of its net worth. The Company has obligations towards borrowings aggregating to ì 1,647.15 million(previous

year ì 1,660.30 million) which includes working capital loan from banks of ì 431.10 million (previous year ì 875.16

million) outstanding letters of credit/bill discounting from banks of ì Nil million(previous year ì 200 million) and current

maturities of long term debts liabilities towards WCTL, FITL and WCL of ì 1,109.12 million (previous year ì 100.83

million) falling due over next twelve months period, obligations pertaining to operations including unpaid creditors and

statutory dues as at March 31, 2016. These matters require the Company to generate additional cash flows to fund the

operations as well as other statutory obligations notwithstanding the current level of low operating activities. The

Company has been unable to obtain financing for this purpose. The situation indicates the existence of a material

uncertainty that may cast significant doubt on the Company’s ability to continue as going concern and therefore the

Company may be unable to realize its assets and discharge its liabilities in the normal course of business. The

financial statements do not include any adjustment in this respect.

45.5In respect of invocation of corporate guarantees of ì 6,545 million and initiation of recovery actions against the company

in respect of such guarantees extended / executed for its holding company in favour of the lender. The management has

not made any provision in respect of this invoked corporate guarantee as the management is under discussion with the

lender and confident that the same shall be settled amicably.

45.6 One lender has initiated recovery proceedings against the company under the Securitization and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002 in respect of outstanding loan of aggregating to

ì 1,251.80 million. The bank has however demanded ì 1,411.80 million. The difference of ì 160 million being penal and

other charges, the company has not provided for the same as it is in the process of reconciliation of the difference

amount as stated above.

46. Related Party Disclosure

Information regarding Related Party Transactions as per Accounting Standard (AS) 18 “Related Party Disclosures”

notified by Companies (Accounting Standards) Rules, 2006, (as amended).

46.1 List of related parties

i. Holding Company

IVRCL Limited

ii. Fellow Subsidiaries


105




1 IVRCL PSC Pipes Private Limited 43 IVR Prime Developers (Erode) Private Limited

2 IVR Enviro Projects Private Limited 44 IVR Prime Developers (Guntur) Private Limited

3 Chennai Water Desalination Limited 45 IVR Prime Developers (Araku) Private Limited

4 Salem Tollways Limited 46 Absorption Aircon Engineer Private Limited

5 Kumarapalyam Tollways Limited 47 IVR Vaanaprastha Private Limited

6 IVRCL Steel Construction & Services Limited 48 IVR PUDL Resorts & Clubs Private Limited

7 Jalandhar Amritsar Tollways Limited 49 IVRCL Solar Energy Private Limited

8 IVRCL Indore Gujarat Tollways Limited 50 IVR Prime Developers (Amalapuram) Private Limited

9 IVRCL Chengapalli Tollways Limited 51 IVR Prime Developers (Red Hills) Private Limited

10 IVRCL Patalaganga Truck Terminals Pvt. Limited 52 IVR Prime Developers (Tuni) Private Limited

11 IVRCL Goa Tollways Limited 53 IVR Prime Developers (Bobbilli) Private Limited

12 IVRCL-Cadagua Hogenakkal Water Treatment 54 IVR Prime Developers (Bhimavaram) Private Limited

Company Private Limited

13 Alkor Petroo Limited 55 IVR Prime Developers (Adayar) Private Limited

14 IVRCL Building Products Limited 56 IVR Prime Developers (Egmore ) Private Limited

15 IVRCL Chandrapur Tollways Limited 57 Geo IVRCL Engineering Limited

16 Sapthashva Solar Limited 58 Duvvda Developers Private Limited

17 RIHIM Developers Private Limited 59 Kunnam Developers Private Limited

18 IVRCL TLT Private Limited 60 Vedurwada Developers Private Limited

19 IVRCL Raipur Bilaspur Tollways Limited 61 Rudravaram Developers Private Limited

20 IVRCL Narnual Bhiwani Tollways Limited 62 Geo Prime Developers Private Limited

21 IVR Hotels and Resorts Limited 63 Theata Developers Private Limited

22 SPB Developers Private Limited 64 Kasibugga Developers Private Limited

23 IVRCL Multilevel Car Parking Private Limited 65 Vijayawada Developers Private Limited

24 IVRCL Lanka (Private) Limited 66 Eluru Developers Private Limited

25 First STP Private Limited 67 Chengapally Road infra Private Limited

26 IVRCL Gundugolanu Rajahmundry Tollways Limited 68 IVR Prime developers (kakinada) private Limited

27 IVRCL Patiala Bathinda Tollways Limited 69 IVR Prime developers (Pudukkottai) private Limited

28 IVR Prime Developers (Tambram) Private Limited 70 IVR Prime developers (Thandiarpet) private Limited

29 IVR Prime Developers (Palakkad) Private Limited 71 IVR Prime developers (Gummidipundy) private Limited

30 IVR Prime Developers (Guindy) Private Limited 72 IVR Prime developers (Kodambakkan) private Limited

31 IVRCL Mega Malls Limited 73 IVR Prime developers (Arumbakkan) private Limited

32 Agaram Developers Private Limited 74 IVR Prime developers (Anna Nagar) private Limited

33 Mummidi Developers Private Limited 75 IVR Prime developers (Anakapalle) private Limited

34 Samatteri Developers Private Limited 76 IVR Prime developers (Rajampeta) private Limited

35 Annupampattu Developers Private Limited 77 IVR Prime developers (Tanuku) private Limited

36 Tirumani Developers Private Limited 78 IVR Prime developers (Rajahmundry) private Limited

37 Ilavampedu Developers Private Limited 79 IVR Prime developers (Ananthapuram) private Limited

38 Gajuwaka Developers Private Limited 80 IVR Prime developers (Perumbadur) private Limited

39 Chodavaram Developers Private Limited 81 IVR Prime developers (Ashram) private Limited

40 Simhachalam Prime Developers Private Limited 82 IVR Prime developers (Retiral Homes) private Limited

41 Siripuram Developers Private Limited 83 IVR Prime developers (Mylapore) private Limited

42 Bibinagar Developers Private Limited

106



iii. Key Managerial Personnel and their relatives

Name of the Key Personnel Relationship

Mr. E Sudhir Reddy Vice Chairman


Mr. R Balarami Reddy Director

Mr. G Ramakrishna Company Secretary

Mr. S.C. Mundhekar Chief Financial Officer

Mr. E Ella Reddy

Mrs. E Sujatha Reddy

Mr. E Sunil Reddy

46.2 Followings are the transactions with the related parties:

Holding Company under Key TotalCompany common control Managerial

(IVRCL PersonnelParticulars Year Limited)

Income/Expense

Sales(Net of Indirect Taxes) 2015-2016 - - - -

2014-2015 - - - -

Purchases/Services* 2015-2016 80.50 - - 80.502014-2015 42.44 12.07#1 - 54.51

Payment made by the Company forExpenses 2015-2016 0.01 - - 0.01

2014-2015 0.07 - - 0.07

Payment made for the Company forExpenses 2015-2016 0.01 - - 0.01

2014-2015 0.36 - - 0.36

Rent Expense 2015-2016 2.03 2.65#2 - 4.682014-2015 1.94 2.62 - 4.56

Provision for Advances/Investment 2015-2016 - - - -2014-2015 277.91 - - 277.91

Corporate Guarantee given 2015-2016 - - - -2014-2015 - - - -

Loans and AdvancesReceived 2015-2016 - - 18.78 18.78

2014-2015 - - 0.01 0.01

Remuneration 2015-2016 - - 1.39 1.392014-2015 - - 5.39 5.39

Advances/ Trade Receivable 2015-2016 74.42 - 10.12 84.542014-2015 146.61 - 10.48 157.09

Loans and advances taken 2015-2016 - - 18.79 18.792014-2015 - - 0.01 0.01

Provision for Advances/Investment 2015-2016 277.91 - - 277.91 2014-2015 277.91 - - 277.91

Creditors 2015-2016 - 60.91#3 - 60.912014-2015 - 58.50 - 58.50

Corporate Guarantee received 2015-2016 15104.20 - - 15104.202014-2015 15104.20 - - 15104.20

* Net of Purchase returns/ advance refund ì Nil million (ì 927.40 million)

# Material transactions with companies under common control

Relative of Vice Chairman

107



1. ì Nil million (ì 12.07 million) - Palladium Infrastructures & Projects Limited.

2. ì 2.05 million (ì 2.02 million) - A P Enercon Engineers Private Limited and ì 0.60 million (ì 0.60 million) - Indus PalmHotels and Resorts Private Limited.

3. ì 52.63 million (ì 52.63 million)- Palladium Infrastructures & Projects Limited, ì 5.29 million (ì 3.42 million) - A PEnercon Engineers Private Limited, ì 1.91 million (ì 1.91 million) - IVRCL TLT Private Limited and ì 1.08 million(ì 0.54 million) - Indus Palm Hotels and Resorts Private Limited.

46.3 Remuneration has not been paid to the executive director after the approved period. Pending approval from the CentralGovernment, the excess amount of ì 10.12 million (previous year ì 10.12 million) relating to the erstwhile Director hasbeen included under ‘Short term Loans and advances’ (note 19).

Notes:

1. Related party relationship is as identified by the Company and relied upon by the Auditors.

47. Segment Reporting

As per Accounting Standard on Segment Reporting (AS) 17, “Segment Reporting”, segment information is being reportedon consolidation basis including business conducted through its subsidiaries.

Accordingly, the Company has identified two reportable segments viz. Engineering, Procurement and Construction(EPC) and Manufacturing and Others. Segments have been identified and have been reported taking into accountnature of product and services.

Primary Information Segment:-

March 31, 2016 March 31,2015

Particulars EPC Trading Manufacturing Total EPC Trading Manufacturing Total

and Others and Others

Total Revenue 1,448.81 605.01 559.82 2,613.64 1,202.28 2,280.74 321.72 3,804.74

- - - - - - - -

Inter-Segment Sales - - (131.98) (131.98) - - (13.88) (13.88)

External Sales 1,448.81 605.01 427.84 2,481.66 1,202.28 2,280.74 307.84 3,790.86

Segment Results 77.48 1.09 85.31 163.88 (779.17) (2.73) 10.07 (771.83)

Other Expenses 408.95 - 159.41 568.36 2,833.52 54.72 163.23 3,051.47

Operating Profit/ (Loss) (331.46) 1.09 (74.09) (404.47) (3,612.69) (57.45) (153.16) (3,823.30)

Interest Expenses 1,314.50 13.33 219.65 1,547.48 1,008.96 96.52 186.26 1,291.74

Interest Income 0.64 - 0.00 0.64 2.73 - 0.22 2.95

Other Income

Prior year adjustments 38.57 - 0.26 38.83 154.09 - 14.80 168.89

- - - - 2,011.16 - - 2,011.16

Income Tax 13.63 - - 13.63 1,101.60 - - 1,101.60

Net Profit/(loss) (1,620.38) (12.24) (293.48) (1,926.11) (7,577.58) (153.97) (324.41) (8,055.96)

Segment Assets 5,968.06 296.90 2,951.15 9,216.11 5,650.67 448.56 3,309.58 9,408.81

Unallocated corporate assets - - - 1,345.06 - - - 1,345.06

Total Assets 5,968.06 296.90 2,951.05 10,561.17 5,650.67 448.56 3,309.58 10,753.87

Segment Liabilities 15,955.54 463.12 2,474.56 18,893.22 14,175.03 602.53 2,382.25 17,159.81

Unallocated corporate liabilities - - - - - - - -

Total Liabilities 15,955.54 463.12 2,474.56 18,893.22 14,175.03 602.53 2,382.25 17,159.81

Depreciation 6.00 - 44.59 50.59 11.61 - 46.04 57.65

Non cash expenses other thandepreciation 126.95 - 19.21 146.15 4,457.20 - 4.14 4,461.34

Capital Expenditure 0.28 - - 0.28 0.08 - 1.68 1.76

108



48. Derivative Instruments

The period end foreign currency exposures are given below:

March 31, 2016 March 31, 2015

Particulars USD ììììì USD ììììì

Secured Loan 18.75 1,243.74 18.75 1,173.58

Interest Payable 4.17 276.36 2.47 154.73

Particulars of derivative instruments outstanding

Particulars Purpose March 31, 2016 March 31, 2015

Interest Swap USD 18.75 USD 18.75(million) (million)

49. Employee Benefit:

Funded status of the Gratuity Plan and disclosures pursuant to Accounting Standard (AS) 15 are set out below:


Change in Benefit Obligation

Liability at the beginning of the year 37.82 40.71

Interest Cost 3.01 3.37

Current Service Cost 3.30 3.34

Benefit Paid (6.26) (4.82)

Experience Adjustment/ Non-Management Fund (3.95) (4.50)

Actuarial (gain)/loss on obligations (0.11) (0.28)

Liability at the end of the year 33.81 37.82

Fair value of Planned Assets

Fair value of planned assets at the beginning of the year 21.64 24.80

Expected return on planned assets 1.72 0.86

Other planned assets - (0.32)

Contributions 1.21 1.27

Benefit paid (6.26) (4.82)

Actuarial gain/(loss) on planned assets (0.10) (0.15)

Fair value of planned assets at the end of the year 18.21 21.64

Total Actuarial (gain)/loss to be recognized 3.96 0.14

Actual return on planned assets

Expected return on planned assets 1.72 0.86

Actuarial gain/(loss) on planned assets (0.10) (0.15)

Actual return on planned assets 1.62 0.71

Amount recognized in the Balance Sheet

Liability at the end of the year (33.81) (37.82)

Fair value of planned assets at the end of the year 18.21 21.64

Amount recognized in the Balance Sheet (15.60) (16.18)

Hedge against exposure to variable interest outflow on foreigncurrency loan. Swap to receive variable rate of interest of three monthsUSD LIBOR and pay a fixed rate of equal to 6.5 percent p.a. on thenotional amount. (As per agreement rate was three months USDLIBOR +300 bps)

109




Expenses recognized in the Income Statement

Current service cost 3.30 3.34

Interest cost 3.01 3.37

Expected return on planned assets (1.72) (0.86)

Experience Adjustment/ Non-Management Fund - -

Net Actuarial (gain)/loss to be recognized (3.96) (0.14)

Expense recognized in the Profit and Loss Account 0.63 5.71

Balance Sheet Reconciliation

Opening Net Liability 16.16 15.90

Expense as above 0.63 5.71

other planned assets - (0.32)

Experience Adjustment/ Non-Management Fund - (4.50)

Employers Contribution (1.21) (1.27)

Amount Recognised in the Balance Sheet 15.58 16.16

Assumptions

Discount Rate 8.01% 7.96%

Salary Escalation 5.25% 5.50%

50. Details of purchase and sale of traded goods:

Particulars Mach 31, 2016 March 31, 2015

Purchase:

Steel 603.92 2,283.47

Sale:

Steel 605.01 2,280.74

In view of the large number and heterogeneous types of steel, it has not been considered necessary to furnish separatelythe respective quantitative information.

51. The previous year’s figures have been regrouped/rearranged wherever necessary.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

S. C. SEKARAN R BALARAMI REDDYExecutive Director Director

Hyderabad G RAMAKRISHNA S C MUNDHEKARMay 30, 2016 Company Secretary Chief Financial Officer

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110

HINDUSTAN DORR OLIVER LIMITED(CIN: L74210MH1974PLC017644)

Registered Office: Dorr Oliver House, Chakala, Andheri (E), Mumbai – 400 099. MaharashtraTel:91-22-2835 9400 l Fax: 91-22-2835 5659 l Email: [email protected]

ATTENDANCE SLIP

Folio No;___________________ DP ID No._______________ Client ID No: ________________________ No. of Shares held ___________

Name of the Member: _____________________________________________________ Signature:_____________

Name of the Proxy Holder:_____________________________________________________ Signature: _____________

1. Only Member / Proxyholder can attend the Meeting.

2. Member/Proxyholder should bring his/her copy of the Annual Report for reference at the Meeting.

HINDUSTAN DORR OLIVER LIMITED(CIN: L74210MH1974PLC017644)

Registered Office: Dorr Oliver House, Chakala, Andheri (E), Mumbai – 400 099. MaharashtraTel:91-22-2835 9400 l Fax: 91-22-2835 5659 l Email: [email protected]

PROXY FORM

[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration)Rules, 2014]

Name of the Member(s) : _____________________________________________________________________________________

Registered Address : _____________________________________________________________________________________

Email ID : _____________________________________________________________________________________

Folio No./Client ID No : __________________________ DP ID No:__________________________

I/We, being the member(s) of ___________________ Shares of Hindustan Dorr Oliver Limited, hereby appoint:

1. Name: _________________________________________________ Email Id: _________________________

Address _________________________________________________________________________________

Signature ____________________________________ or failing him

2. Name: _________________________________________________ Email Id: ______________________

Address _________________________________________________________________________________

Signature ____________________________________ or failing him

3. Name: _________________________________________________ Email Id: ______________________

Address _________________________________________________________________________________

Signature ____________________________________

As my /our proxy to attend and vote (on a poll) for me/us and on my/our behalf the 41st Annual General Meeting of theCompany, to be held on Saturday, the September 24, 2016 at 3.00 p.m. at the Registered Office of the Company at Dorr OliverHouse, Chakala, Andheri (E), Mumbai – 400 099 and at any adjournment thereof in respect of such resolutions as areindicated overleas of this Form.

Signed this _________________________ day of _____________________, 2016

Signature of Shareholder: __________________________

Signature of Proxyholder(s): __________________________

Notes:

1. This form in order to be effective should be duly completed and deposited at the Registered Office of the Company at DorrOliver House, Chakala, Andheri (E), Mumbai – 400 099, not less than 48 hours before the commencement of the meeting.

2. Those members who have multiple folios with different jointholders may use copies of this Attendance Slip/Proxy.

AffixRs.1/-

RevenueStamp

Mumbai :Hindustan Dorr-Oliver Ltd., Dorr Oliver House, Chakala, Andheri (East), Mumbai - 400 099.Tel.: 91-22-28359400 l Fax : 91-22-28365659 Email : [email protected]

hindustan dorr-oliver limited 41st annual ... hindustan dorr oliver limited 41st annual report...

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