hyderabad international airport ltd 2005

8/6/2019 Hyderabad International Airport Ltd 2005

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HYDERABAD INTERNATIONAL AIRPORT LIMITED

2nd ANNUAL REPORT2004 - 2005

COMPANY NO: 01/040118AUTHORISED SHARE CAPITAL RS. 75 CRORES

REGISTERED OFFICE :6-3-866/1/G3, Greenlands, Begumpet, Hyderabad - 500 016.

CORPORATE OFFICE :Skip House, 25/1, Museum Road, Bangalore 560 025.

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HYDERABAD INTERNATIONAL AIRPORT LIMITED6-3-866/1 /G3, Greenlands, Begumpet, Hyderabad 500 016REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED MARCH 31,2005Your Directors have pleasure in presenting the Second Annual Report and the AuditedAccounts for the period ended March 31, 2005, together with the Auditors Reportthereon.Project OverviewHyderabad International Airport Ltd. (HIAL) has been incorporated for the development,construction and operation of the proposed Greenfield International Airport atShamshabad, Hyderabad. The HIAL Project will be one of India's first two privatelyowned International A irpo rts being developed on public-private partnership model.

The new Airp or t at Hyde raba d is being developed to international standards comprisingstate of the art facilities and passenger amenities to cater to much larger volumes ofpassenger and cargo traffic than being handled at the existing airport at Begumpet,Hyderabad.Development Plan & Implem entation Schedu leThe Project is proposed to be developed in multiple phases. The Project d uring itsinitially phase would cater to 5-7 million passenger capacity and 1, 00, 000 MT cargo.Ultimate capacity of the Project will be 40 million passengers and 1 million MT of cargo.The implementation of the phases w ill be based on the traffic triggers.Project Progress - 04-05GMR Infrastructure Ltd (GIL), as a lead bidder acquired 63% of shareholding inSeptember, 2003. The Malaysia Airports Holdings Berhad (MAHB), Airports Authority ofIndia (AAI), Government of Andhra Pradesh (GOAP) acquired 11%, 13% and 13%shareholding respectively. The Company ha s signed the major Project Agreements likeState Support Agreement, Shareholders Agreement, Land Lease Agreement duringSeptember 2003 and subsequently the Concession Agreement on 20 th December 2004.The Company is pursuing to finalize the CMS-ATM agreement within July 2005.The month o f March 2005, was a mark in the history of the company. Foundation Stonewas laid by Ms. Sonia Gandhi on 16 th March 2005 for the new Airport.* Detailed Project Report (DPR )

Fo r the preparation of DPR, Owners Engineer comprising of a Consortium ofInternationally reputed compan ies viz., Co wi A/S , Denm ark, (Experts in AirportDesign), Avia Plan, Norway (Experts in Architect Design), and STUP Consultants PLtd., India were involved. The DPR was prepared based on the business objectivesof the Co mpan y including providing a world class (A 380) and high service standardsof IATA A/B level. Your Airport will have to meet a service standard of 3.5 on IATA

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Global monitor scale. The DPR is also based on a detailed traffic study conducted bySH & E, London and business plan prepared by A T Kearney, India Further with theinputs and assistance of several experts including Concession PlanningInternational, UK, and CB Richard Ellis, the property development consultant wereconsidered.Considering the above reports, surveys, feedback, Owner's Engineer has submittedDetailed Project Report in the month of April 2004 and it was subsequently approvedby the Airports Authority of India and Government of Andhra Pradesh in August 2004& September 2004 respectively.

> Land Acquisition and RehabilitationThe total land acquired for the Project is 5,466 acres. The formalities of paying thecompensation and other proceedings were fulfilled. After the successfulrehabilitation, the total land is under Company's possession since June 2004.

* State Support andExemptionsThe Company has received all the major exemptions including the Stamp Duty andregistration fee exemption on Project Agreements and Sales Tax exemption upto2009. A notification was recently issued for reimbursement of VAT for the project.The Company is also closely following up the matter on exemption of Seignioragefeeand Status of Specified Authority, the GO towards which is expected to be issuedshortly.

* Cle arancesThe Company has procured Defence Clearance on November 2nd 2004 from Ministryof Defence, Government of India. Your Company has obtained DGCA site clearanceon 28th March 2005, approval for use of parallel taxiway for an emergency take-off on7 th March 2005, and also the comfort letter for Aerodrome license.

* EPC ContractsThe total construction process was categorized into the following packages:

A) Compound WallB) Site Preparation WorksC) Passenger Terminal BuildingD) Air Side and Land Side* Compound Wall (Package I)

This package was awarded to M/s Consolidated Consortium Construction Ltd. Thecompound wall/fence is successfully completed in the month of April 2005.

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Site Preparation Works (Package II)Site Preparation Works undertaken by M/s Soma Enterprises ha s made goodprogress. Excavation, fill ing works, and earth works continue in all areas. Currentlythe progress is ahead of-schedule.Passenger Terminal and Air Side and Land Side (Package III & IV)Tenders were returned on 5 th January 2005 an d 31 st January 2005 fo r AirsideLandside and Passenger Terminal Building respectively. Several rounds ofdiscussions and negotiation meetings took place over a 5 month period upto July2005. Contacts are in the process of finalization and are expected to be signed bythe end of July 2005.Business Development

Your Company launched your Airport in Global Routes Conference, Madrid inSeptember 2004 and Routes Asia Conference in March 2005. Several meetingswere held with leading domestic and international airlines, ground handlers, cargooperators an d fuel farm suppliers in the previous year.Pro ject FinanceNegotiations with leading banks for financing of the airport project were undertakenduring the previous financial year. This resulted in the Company short listing IDFC asthe lead lender for the project. Consortium of banks is to be selected sh ortly asinterest was evinced from several leading financial institutions for its participation infunding this prestigious project.

! Human Resources and AdministrationRecruitment of manpower was carried out as per the HR plan for the company. Theadministration and facilities also have been reviewed periodically to ensure that bestpossible support system are provided to the Company

* Progress timeline DPR submission to GoAP/MoCA - May2004 Rehabilitation completion and acquisition of land - May and June 2004 (Activitycom pleted in a record time of 3 mo nths) Commencement of Boundary Wall C onstruction - June, 2004 Approval of DPR by AAI in Aug 2004 and by Go AP during Sep 2004 Clearance from Ministry of Defence - Nov.,04 Signing of Concession Agreement - December, 2004 Boundary Wall work completion - Jan.,05 Award of Site Preparation Works contract - Jan. 2005

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* Way Forward Finalisation of tenders for PTB and ALS by July., 05 Achievement of Financial Closure by July 2005 Commencement of-Commercial Operation (COD) by 2008

FinanceYour Company has received 10572 lakhs towards cash calls till March 31, 2005 as perthe Shareholders Agreement. Your Company ha s incurred project expenditure ofRs. 7005 lakhs as on March 31, 2005. As the Company is in the project stage, Profit &Loss Account has not been prepared.DirectorsComposition and size of the Board of DirectorsThe present Bo ard com prises of the following directors,

S.No I Name of the Director1. Mr. G. M. Rao , Chairman2. Mr. Kiran Kumar Grandhi, ManagingDirector3. Mr. Sunil Tandon4. )Mr. B. V. Nageswara Rao5.

6.7.8.

910.11.

Prof. Rigas Doganis

RepresentingSponsorsSponsorsSponsorsSponsorsSponsorsAlternate directorMr. K.V.K.Seshavataram.Mr. K.Balasubramanian [SponsorsMr. P.Ramakanth Reddy Government of Andhra PradeshAlternate Director -Mr.T.S.Appa RaoMr. Binoy Kumar

vlr. K. RamalingamDr. Nasim Zaidi

Government of And hra PradeshAlternate DirectorMr.N. P. Ram akrishna Reddy.Airports Authority of IndiaAirports Authority of IndiaDato' B ashir Ahma d Bin Abdul Majid [Sponsorsklternate director|Dato' Abd. Hamid bin Mohd All

During the period under review Mr. V.S.Sampath and Mr. Pamidi R Prasad Rao ceasedto be Directors. Mr. Sunil Tandon , President, resigned as Whole-time Director and hecontinues to be a Director. Board places on record its deep appreciation for the servicesrendered by the Mr. V.S.Sampath as Director, Mr. Pamidi R Prasad Rao as Director andMr. Sunil Tandon as President, during their respective tenures.

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Mr. G.M.R ao, Dato ' Bashir Ahmad Bin Abdul Majid and Mr. Sunil Tandon retire at thisAnnual General Meeting an d being eligible offer themselves fo r re-appointment.Mr. P.Ramakanth Reddy was appointed as Additional Director and he holds office uptothe date of the next Annual General Meeting. Notice has been received under Section257 of the Companies Act, 1956 for his appointment.Audit CommitteeAudit Committee was re-constituted in May 2005. The Audit Comm ittee com prises of thefollowing directors;SI No1234 .5

Name of DirectorMr. P.Ra makanth Reddy (as Chairman)Dr. Nasim ZaidiMr. B.V.Nageswara RaoMr. K.BalasubramanianMr. K.V.K.Seshavataram

Directors' Responsibility StatementYour Directors confirm:

1. that in the preparation of the annual accounts for the financial year ended 31stMarch, 2005, the applicable accounting standards ha d been followed along withproper explanation relating to material departures.2. that the directors have selected such accounting policies an d applied themconsistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the endof the financial year ended 31 st March, 2005.3. that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of theCompanies Act, 1956 fo r safeguarding the assets of the Company and forpreventing and detecting fra ud and other irregularities:4. that the directors had prepared the accounts for the financial year ended 31stMarch, 2005 on a 'going concern' basis.

AuditorsThe auditors, M/s Price Waterhouse, Chartered Acco untants, retire at the ensuingAnnual General meeting and have confirmed their eligibility and willingness to acceptoffice, if re- appointed.

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Conservation of E nergy, Technolo gy Abso rption & Fo reign E xchang e Earnings &OutgoThe particulars as required under sub-section (1)(e) of Section 217 of the CompaniesAct, 1956, read with the Companies (Disclosure of particulars in the Report of the Boardof Directors) Rules, 1988, are set out in the annexure included in this report.Particulars of EmployeesParticulars required under Section 217(2A) of the Companies Act, 1956 read withCompanies (Particulars of Employees) Rules, 1975, as amended, are set out in theannexure to this report.AcknowledgementYour Directors take this o pportunity to express their sincere thanks and gratitude to theGo vernment of India, Government of Andhra Pradesh, Airports Authority of India,Malaysia Airports Holdings Berhad and GMR Group fo r their co-operation.Your Directors place on record their sincere appreciation of the contributions made bythe em ployees at all levels through their hard work, dedication, solidarity and support.Fo r and on behalf of the Board of Directors.

Kiran Kumar Grandhi B.V.Nageswara RaoManaging Director Director

Place: HyderabadDate: July 17, 2005
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hyderabad international airport ltd 2005

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