C & C Constructions Ltd.
|BSE: 532813||Sector: Infrastructure|
|NSE: CANDC||ISIN Code: INE874H01015|
|BSE LIVE 15:40 | 28 Apr||49.70||
|NSE 15:57 | 28 Apr||49.45||
|Mkt Cap.(Rs cr)||126.49|
|Mkt Cap.(Rs cr)||126.49|
C & C Constructions Ltd. (CANDC) - Director Report
Company director report
The Board of Directors hereby submits the 20th annual report along with theaudited financial statements of your Company for the period ended 31st March2016. In order to comply with the provisions of Section 2(41) of the Companies Act 2013the Company has ended its financial year 2015-16 in 9 months on 31st March 2016 and theCompany will follow the April to March financial year afterwards.
STATEMENT OF COMPANY AFFAIRS
Your Company's financial performance during the financial year 2015-2016 is summarizedbelow:-
TRANSFER TO RESERVES
The Company has not transferred any amount to reserve of the Company.
In view of the loss incurred during the period the Board regrets its inability todeclare any dividend for the period ended 31st March 2016.
The Turnover of the Company on a Standalone basis stood at Rs 767.33 crore for the 9months ended on 31st March 2016 as compared to the Turnover of Rs 1013.43crore for the previous year of 12 months. The Company posted a Net Loss of Rs 19.29 crorefor the period under review as against a Net Loss of Rs 189.95 crore for the previousyear.
The past year has continued to be challenging for the Company. The progress with regardto award and construction has been slow. This is on account of lingering issues related toa global and domestic slowdown problems with land acquisition environmental clearancesand also the stressed financial position of the Company.
The Company is under Corporate Debt Restructuring. Though we are working towardssteering the Company out of the framework of CDR order intake remains sluggish sincemany of the stalled projects are yet to be kick-started. Projects already awarded aregenerally progressing slowly due to various continuing problems on ground which remainunresolved over a period of time leading to cost escalations which remain unpaid. Allthese factors combined have led to a vicious cycle culminating in a pile up of debt andhigh consequential costs.
To overcome the challenging business environment the Company is rigorously undertakingthe steps to realization of claims cost optimization monetization assets and carefullybidding for new jobs apart from focusing on streamlining the internal organization andprocesses with emphasis on leveraging the Company's existing core competencies. Though thecompany has undergone debt restructuring in the year 2013 under the framework of CorporateDebt Restructuring (CDR) of Reserve Bank of India the liquidity position of the Companyis bound to turn around in view of steps undertaken and the Company is optimistic toregularize its banking accounts.
Your Company has secured the following new orders in its own name and the in JointVentures with other entities during the year ended on 31st March 2016:
Design Construction installation and commissioning of Civil Works for package-1 ofPhase-II Engineer 3 Project in Sultanate of Oman. From Engineering Projects (India) Ltd.
Contract value Rs 920 crore
Supply and service contract for Tower Package-P620-TW01: Towers including EarthwireOPGW hardware and Accessories for Conductor & Earth wire for 400 Kv D/C (Quad)Jigmeling- Alipuduar Line (Indian portion-NER) (Approx 126 km) under Transmission SystemStrengthening in Indian System for transfer of power from Mangdechhu Hydroelectric projectin Bhutan from Power Grid Corporation of India Ltd.
Contract value Rs 204 crore
The total balance value of works on hand as on March 31 2016 is Rs 2798 crore.
SUBSIDIARIES JOINT VENTURES ASSOCIATE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company has six Subsidiaries and two Associate companies within the meaning ofSection 2(87) and 2(6) of the Companies Act 2013 respectively. There has been no materialchange in nature of business of the Subsidiaries and Associates.
In accordance with the Accounting Standard AS-21 on Consolidated Financial Statementsread with Accounting Standard AS-23 on Accounting for Investments in associates andAccounting Standard (AS) 27 on Financial Reporting of Interest in Joint ventures theaudited Consolidated Financial Statements for period ended 31st March 2016form part of the Annual Report and Financial Statements.
Pursuant to Proviso to Section 129(3) of the Act a statement containing the salientfeatures and brief details of performance and financials of the Subsidiary AssociateCompanies and Joint Venture for the period ended 31st March 2016 is attachedto Financial Statements of the Company. The statement contains the contribution of theassociates and joint ventures to overall performance of the Company.
The contribution of the Subsidiaries to overall performance of the Company is as under:
The Board has adopted a policy for determining material subsidiaries of the Company asper the provisions of corporate governance regulation of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015. The said policy is hosted at the Company'swebsite at the link http:// www.candcinfrastructure.com/images/policies/Policv%20on%20Material%20Subsidiaries.pdf
CASH FLOW ANALYSIS
In conformity with the provisions of the SEBI (Listing Obligations and Disclosurerequirements) Regulation 2015 the cash flow statement for the period ended 31stMarch 2016 is included in the Financial Statement.
No changes have been occurred in the Share Capital Structure of the Company during theperiod under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the period under the review Mr. Joganando Ganguly (DIN: 00054686) and Mr.Kanwal Monga (DIN: 00153473) Independent Directors of the Company ceased to be directorsof the Company with effect from 20th August 2015 and 28th August2015 respectively. The Board places on record its appreciation for the valuable guidanceand services rendered by them during their association with the Company.
Pursuant to provisions of Section 152 of the companies Act 2013 Mr. Sanjay Gupta (DIN00221247) and Mr. Rajendra Mohan Aggarwal (DIN 00064423) retire by rotation at the ensuingAnnual General Meeting and being eligible offer themselves for re-appointment.
Pursuant to provisions of Section 149 of the Act all the Independent Directors of theCompany gave declarations to the Company that they meet the criteria of independence asspecified under Section 149(6) of the Act and Regulation 25 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
Brief resumes of Directors proposed to be re-appointed and other relevant informationhave been furnished in the Notice convening the Annual General Meeting. Appropriateresolutions for their re-appointment are proposed for approval of the members at theAnnual General Meeting.
Further during the period under review Mr. Rajeev Dhingra has been appointed as ChiefFinancial Officer (CFO) of the Company with effect from 16th September 2015and subsequently resigned from the post of Chief Financial Officer of the Company w.e.f 8thJune 2016.
Mr. Anand Bordia Independent Director of the Company resigned from the directorship ofthe Company with effect from 23rd July 2016.
The Company has to appoint Four Independent Directors in order to comply with theprovisions regarding Composition of Board of Directors under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
Further the Company also has to appoint Chief Financial Officer in pursuance ofprovisions of Section 203 of the Companies Act 2013.
MEETINGS OF THE BOARD
As the period under review was of nine months the Board of directors met Three (3)times during the period the details of which are given in the Corporate Governance Reportannexed to this report.
The details of the familiarization Programmes for Independent Directors are hosted onCompany's website at the link http://www.candcinfrastructure.com/images/termsofAppoinment/ Familiarisation%20Programme.pdf.
COMMITTEES OF THE BOARD
Currently the Board has six Committees viz. Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Corporate SocialResponsibility (CSR) Committee Risk Management Committee and Finance Committee. Adetailed note on the composition of the Board and its committees is provided in theCorporate Governance Report section of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act the Board of Directors herebystate that:
(a) in preparation of annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Company has an adequate system of internal control to ensure that the resources ofthe Company are used efficiently and effectively. The internal financial controls withreference to the Financial Statements are commensurate with the size and nature ofbusiness of the Company
Pursuant to provisions of Companies Act 2013 and Provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Nomination andRemuneration Committee laid down the criteria for performance evaluation of the IndividualDirectors the Board and its Committees.
Accordingly the performance of the Board its Committees and individual Directors wasevaluated by considering the contribution of the individual directors to the Board andCommittee meetings preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings relationship with fellow board memberswilling to devote time and effort to understand the Company and its business etc.
Details of Company's policy on Directors appointment and remuneration includingcriteria for determining qualifications etc. have been given under Corporate GovernanceSection.
As per Schedule IV of the Act Independent Directors of the Company at a separatemeeting evaluated the performance of non-independent directors the Board as a whole andthe Chairman of the Company taking into account the views of executive and non-executivedirectors. Independent Directors also reviewed the quality quantity and timeliness offlow of information between management of the Company and the Board for the effectiveperformance of the board.
AUDITORS AND AUDITORS REPORT STATUTORY AUDITORS
At the 18th Annual General Meeting held on December 23 2014 M/s ASG &Associates Chartered Accountants (FRN: 000389N) New Delhi were re-appointed asstatutory auditors of the Company to hold office till the conclusion of the 21st AnnualGeneral Meeting to be held in the calendar year 2017. In terms of the first proviso toSection 139 of the Companies Act 2013 the appointment of the auditors shall be placedfor ratification at every Annual General Meeting. Accordingly the appointment of M/s ASG& Associates Chartered Accountants (FrN: 000389N) as statutory auditors of theCompany is placed for ratification by the shareholders for the financial year 2016-17 inthe ensuing Annual General Meeting of the Company.
The Company has received a letter from the Statutory Auditors that their appointmentif made would be within the limits prescribed under the provisions of the Companies Act2013 and that they are not disqualified.
The Notes on Accounts referred to in the Auditors' Report are self explanatory andtherefore do not call for any further comments.
M/s. Santosh Kumar Pradhan Practicing Company Secretaries (C.P. No.: 7647) wasappointed to conduct the secretarial audit of the Company for the period ended 31stMarch 2016 as required under Section 204 of the Companies Act 2013 and Rulesthereunder.
The secretarial audit report i.e. MR-3 forms part of the Annual Report as Annexure 1to the Board's report. On the observations made in the Secretarial Audit Report theproper steps are being taken by the Management so as to comply with the provisions.
As per provisions of Section 148 of the Act read with Rules made there under M/s.Pradeep Sud & Co. Practicing Cost
Accountants (FRN. 100626) had been appointed as Cost Auditor for the purpose ofauditing the Cost accounting records maintained by the Company for the year 2015-16 videresolution dated 14th November 2015.
During the year the Company did not accept any public deposits.
EXTRACT OF ANNUAL RETURN
An extract of the annual return in the prescribed format is appended as Annexure 2 tothe Board's report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
There are no significant and material orders passed by the regulators or tribunalsimpacting the going concern status and Company's operations in future.
No cases were filed pursuant to the Sexual Harassment of Women at work Place(Prevention Prohibition and Redressal) Act 2013 during the period under review.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
The Company's core activity is civil construction which is not energy intensive.However your Company takes every effort to conserve the usage of power at its sites andoffices.
There is no information to be furnished regarding Technology Absorption as your Companyhas not undertaken any research and development activity in any manufacturing activity norany specific technology is obtained from any external sources which needs to be absorbedor adapted.
The particulars of expenditure and earnings in foreign currency are furnished in itemNos. 34 and 36 to Notes to Financial Statements.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A separate report on the Management discussion and analysis pursuant to Regulation 34of SEBI (Listing Obligations and Disclosure requirements) Regulations 2015 forms a partof the annual report.
In pursuance of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate section on Corporate Governance has been incorporated in theannual report for the information of the shareholders. A certificate from the Auditors ofthe Company regarding compliance of the conditions of Corporate Governance as stipulatedunder the said regulation also forms a part of the annual report.
CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 of the Act the Company has constituted the CSRcommittee to formulate implement and monitor the CSR Policy of the Company. However asthe Company does not have average net profits for the three immediately precedingfinancial years the Section 135(5) of the Act pertaining to spending of 2% of average netprofits of the Company for immediately preceding three financial years and disclosurerequired to be given under Section 135(5) of the Act and Rule 8 of Companies (CorporateSocial Responsibility Policy) Rules 2014 are not applicable to the Company for thefinancial year 2015-16.
PARTICULARS OF EMPLOYEES
A statement containing the information required under Section 197(12) of the CompaniesAct 2013 and Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended vide notification dated 30th June 2016 formspart of the Board's report as Annexure 3.
PARTICULARS OF LOANS INVESTMENTS AND GURANTEES
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the Notes to the financial statements provided in this Annual Report.
RELATED PARTY TRANSACTIONS
As per the provisions of the Companies Act 2013 and Regulation 22 of the SEBI (Listingobligations and Disclosure requirement) Regulation 2015 the Company has formulated apolicy on Related Party Transactions to ensure the transparency in transactions betweenthe Company and related parties. The said RTP Policy is also available at Company'swebsite at the link http://www.candcinfrastructure.com/images/policies/Related%20party%20transaction%20policy.pdf. There been no change in the RelatedParty policy of the Company.
All Related Party Transactions entered by the Company during the period under reviewwere in ordinary course of business and on Arm's length basis. There was one materialrelated party transaction entered by the Company during year under review details of whichare mentioned in Form AOC-2 appended as Annexure 4. The shareholders' approval forthis transaction was taken at the Annual General Meeting held on December 23 2015 asrequired under Section 188 of the Companies Act 2013.
The Company has established Risk Management process to manage risks with the objectiveof maximizing shareholders value. The details of various risks that are being faced by theCompany are provided in Management Discussion and Analysis Report which forms part ofthis Report.
WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy containing the mechanism as requiredunder Section 177(9) of the Act and Regulation 22 of the SEBI (Listing obligations andDisclosure requirement) Regulation 2015 for directors and employees to report the genuineconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's code of conduct and ethics. Protected disclosures can be made by the employeesof the Company and can also have access to the Chairman of Audit Committee.
The Whistle Blower Policy adopted by the Board has been hosted on Company's website atthe link http:// www.candcinfrastructure.com/images/policies/Whistle%20Blower%20Policy.pdf.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The Company has during the period under review transferred a sum of Rs 132707/- toInvestor Education and Protection Fund in compliance with the provisions of Section 125of the Companies Act 2013. The said amount represents the unpaid/ unclaimed dividend forthe financial year 2007-08.
Your Directors take this opportunity to place on record their appreciation towardsbankers clients and all the business associates for their continuous support to theCompany and to the shareholders for the confidence reposed in the Company management andlook forward for the same in greater measure in the coming years. The Directors alsoconvey their appreciation to the employees at all levels for their enormous personalefforts as well as collective contribution.
By order of the Board
For C&C Constructions Limited
Gurjeet Singh Johar