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NBCC (India) Ltd.

BSE: 534309 Sector: Infrastructure
NSE: NBCC ISIN Code: INE095N01023
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OPEN 269.90
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VOLUME 420094
52-Week high 291.75
52-Week low 138.00
P/E 64.80
Mkt Cap.(Rs cr) 23,855
Buy Price 265.05
Buy Qty 69.00
Sell Price 0.00
Sell Qty 0.00
OPEN 269.90
CLOSE 268.60
VOLUME 420094
52-Week high 291.75
52-Week low 138.00
P/E 64.80
Mkt Cap.(Rs cr) 23,855
Buy Price 265.05
Buy Qty 69.00
Sell Price 0.00
Sell Qty 0.00

NBCC (India) Ltd. (NBCC) - Auditors Report

Company auditors report

To The Members of NBCC (India) Limited

(Formerly National Buildings Construction Corporation Limited)

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone financial statements of NBCC (India)Limited (Formerly National Buildings Construction Corporation Limited) ("theCompany") which comprise the Balance Sheet as at March 31 2017 the Statement ofProfit and Loss (including Other Comprehensive Income) the Cash Flow Statement and theStatement of Changes in Equity for the year then ended and a summary of the significantaccounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provision of the Act and the Rules made thereunder.

5. We conducted our audit of the standalone Ind AS financial Statements in accordancewith the standards on Auditing specified under Section 143 (10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirement and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement

6. Audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind Asfinancial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired 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 theCompany as at March 31 2017 and its profit (including other comprehensive income) itscash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

9. We draw attention to

a) No provision has been made for penal levy amounting to ? 1654.93 Lakhs (previousyear ? 1654.93 Lakhs) for gurantees given by the government for loans taken in earlieryears by the company in view of issue being under dispute though the same has been shownas contingent liability. (Refer Note 36)

b) Other Financial Assets include outstanding advance of ? 1300 Lakhs recoverable fromIndian Drugs & Pharmaceuticals Limited (IDPL) a public sector undertaking (PSU). M/sIDPL was declared sick by Board for Industrial and Financial reconstruction (BIFR). Thecompany's claim was admitted by IDPL during BIFR proceedings. However BIFR has been woundup by Government of India via Notification dated 25.11.2016 during the year and company isevaluating other alternatives to recover this amount from IDPL. Since the amount hadearlier been admitted by IDPL during BIFR proceeding the company considers advance of ?1300.00 Lakhs recoverable from IDPL as good for recovery. (Refer Note 13)

Our opinion is not modified in respect of these matters.

Other Matter

10. The financial information of the Company for the year ended March 312016 and thetransition date opening balance sheet as at April 1 2015 included in these standalone IndAS financial statements are based on the previously issued statutory financial statementsfor the years ended March 31 2016 and March 31 2015 prepared in accordance with theCompanies (Accounting Standards) Rules 2006 (as amended) which were audited by us onwhich we expressed an unmodified opinion dated May 16 2016 and May 22 2015 respectively.The adjustments to those financial statements for the difference in accounting principlesadopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure 8 a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

12. We enclose our report in terms of Section 143 (5) of the Act on the basis of suchchecks of the books and records of the Company as we considered appropriate and accordingto the information and explanations given to us in the Annexure C on the directions andsub directions issued by the Comptroller and Auditor General of India.

13. As required by Section 143 (3) of the Act we report to the extent applicablethat:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.

e) As per Notification No. GSR 463(E) dated June 5th 2015 issued by Ministry ofCorporate Affairs Government of India provisions of Section 164 (2) of the CompaniesAct 2013 are not applicable to the company.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31 2017 onits financial position in its standalone Ind AS financial statements- Refer Note No.36(a).

ii. The Company has made provision as required under the applicable law or Indianaccounting standards for material foreseeable loss on long term contracts- Refer NoteNo.22A . The company has no derivative contracts as at March 312017

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company duringtheyearended March 312017

iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealing in Specified Bank Notes during the period from November 82016to December 302016 and these are in accordance with the books of accounts maintained bythe company (Refer Note 38)

ForJAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
(Praveen Kumar Jain)
Place of signature: New Delhi Partner
Date: 26th May 2017 Membership Number:085629

Annexure A to Independent Auditors' Report

Referred to in paragraph 13 (f) of the Independent Auditors' Report of even date to themembers of NBCC (India) Limited

(Formerly National Buildings Construction Corporation Limited) on the standalone Ind ASfinancial statements for the year ended March 312017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internal financial controls over financial reporting of NBCC(India) Limited (Formerly National Buildings Construction Corporation Limited) ("theCompany") as of March 31 2017 in conjunction with our audit of the standalone Ind ASfinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

ForJAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
(Praveen Kumar Jain)
Place of signature: New Delhi Partner
Date: 26th May 2017 Membership Number:085629

Annexure B to Independent Auditors' Report

Referred to in paragraph 11 of the Independent Auditors' Report of even date to themembers of NBCC (India) Limited (Formerly National Buildings Construction CorporationLimited) on the standalone Ind AS financial statements as of and for the year ended March312017

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Managementduring the year. The discrepancies noticed on such verification were not material and havebeen properly dealt with in the books of account. In our opinion the frequency ofverification is reasonable.

(c) The title deeds of immovable properties as disclosed in Note 2 on fixed assets tothe financial statements are held in the name of the Company except for details as givenbelow

- In case of Land

Total number of cases: 03 01
Whether lease hold/ free hold: Lease Hold Free Hold
Gross Carrying Amount( at cost as at 31.03.2017): * 664.69 Lakhs * 1138.99 Lakhs
Net Book value (as at 31.03.2017) * 657.73 Lakhs * 1138.99 Lakhs

- In case of Buildings

Total number of cases: 02
Whether lease hold/ free hold: Free Hold
Gross Carrying Amount ( at cost) &. Net Book value ( as at 31.03.2017): *364.74 Lakhs

Gross Carrying Amount (at cost)

* 354.58 Lakhs Net Book value

ii. The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material.

iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. According to the information and explanations given to us and the records examinedby us the Company has not accepted any deposits from the public. Accordingly theParagraph 3(v) of the order is not applicable to the company.

vi. We have broadly reviewed the books of account maintained by the Company in respectof Engineering Procurement and Construction (EPC) division and Real Estate divisionwhere pursuant to the rules made by the Central Government of India the maintenance ofcost records has been specified under sub-section (1) of Section 148 of the Act and areof the opinion that prima facie the prescribed accounts and records have been so madeand maintained. We have not however made a detailed examination of the records with aview to determine whether they are accurate or complete. For Project Management andConsultancy (PMC) division we have been informed that these activities are carried on backto back basis by sub contractors appointed by the Company hence Company is not requiredto maintain cost records for this division.

vii.(a) According to the information and explanation given to us and the records of thecompany examined by us in our opinion the company is generally regular in depositingundisputed statutory dues including Service Tax Provident Fund Value Added Tax/SalesTax Cess Income Tax and other material statutory dues as applicable with theappropriate authorities though there has been delays in few cases in depositing ServiceTax dues and Tax Deducted at Source dues. However no Service Tax dues or Tax Deductedat Source dues were payable for a period of more than six months from the date they becamepayable as at year end. We have been informed that the provisions of the Employees StateInsurance Act are not applicable to the Company.

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of Income Tax Service Tax Value AddedTax/ Sales Tax as at March 31 2017 which have not been deposited on account of a disputeare as follows:

Name of the Statute Nature of Dues (Rs. in Lakhs) Period to which the amount relates Forum where the dispute is pending
Jharkhand VAT Act 2005 VAT 28.79 2011-12 Joint Commissioner of Commercial Taxes
718.21 2012-13 Joint Commissioner of Commercial Taxes
14.14 2013-14 Joint Commissioner of Commercial Taxes
Delhi VAT Act 2004 VAT 40480.18 2013-14 to 2014-15 Special Commissioner VAT Delhi
Karnatka VAT Act 2003 VAT 49.23 2007-08 Karnataka Appellate Tribunal
Haryana VAT VAT 8.99 2008-09 Haryana Tax Tribunal
Act 2003 45.36 2012-13 Haryana Tax Tribunal
31.03 2009-10 Excise & Taxation Officer
Madhya Pradesh VAT Act 2002 VAT 45.07 2012-13 Appellate Deputy Commissioner of Commercial Tax
100.51 2013-14 Appellate Deputy Commissioner of Commercial Tax
Uttar Pradesh VAT Act 2008 VAT 22.46 2010-11 Additional Commissioner of Commercial Tax
52.13 2011-12 Additional Commissioner of Commercial Tax
18.72 2012-13 Additional Commissioner of Commercial Tax
158.98 2008-09 Deputy Commissioner of Commercial Tax
143.83 2009-10 Deputy Commissioner of Commercial Tax
89.20 2010-11 Deputy Commissioner of Commercial Tax
13.10 2011-12 Deputy Commissioner of Commercial Tax
West Bengal VAT 49.87 2008-09 West Bengal Tax Tribunal
VAT Act 2003 42.72 2009-10 West Bengal Tax Tribunal
Income Tax Income Tax Act 157.64 2012-13 Commissioner (Appeal)
Act 1961 154.74 2013-14 Commissioner (Appeal)
215.92 2014-15 Commissioner (Appeal)
1582.18 2007-08 Appellate Tribunal
226.93 2008-09 Appellate Tribunal
86.73 2011-12 Appellate Tribunal
4.18 2008-09 Delhi High Court
31.45 2009-10 Delhi High Court
Finance Act 1994 Service Tax 574.00 2001-02 to 2004-05 CESTAT Kolkata
137.62 2004-05 CESTAT Delhi
699.83 2007-08 to 2011-12 CESTAT Delhi
153.74 2007-08 to 2011-12 Appeal to be filed
84.44 2008-09 CESTAT Kolkata
92.43 2012-13 CESTAT Delhi
7.37 2012-13 to 2014-15 Commissioner of Service Tax
250.45 2013-14 CESTAT Delhi
11.62 2014-15 Addl. Commissioner of Service Tax

viii. As the Company does not have any loans or borrowings from any financialinstitution or bank or Government nor has it issued any debentures as at the balancesheet date the provisions of Clause 3(viii) of the Order are not applicable to theCompany.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3{ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The provisions of Section 197 read with Schedule V to the Act are not applicable toGovernment Companies. Accordingly the provisions of Clause 3(xi) of the Order are notapplicable to the Company.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014 to the extentapplicable to state controlled entities.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

ForJAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Place of signature: New Oelhi
Date: 26th May 2017 Sd/-
(Praveen Kumar Jain)
Partner
Membership Number:085629

Annexure C to Independent Auditors' Report

Directions and Sub-Directions indicating the areas to be examined by the StatutoryAuditors during the course of audit of Annual Accounts of the NBCC (India) Limited(Formerly National Buildings Construction Corporation Limited) for the year 2016-17 issuedbytheComptroller&AuditorGeneralof India under section 143(5)ofthe Companies Act 2013.

Referred to in paragraph 12 of the Independent Auditors' Report of even date to themembers of NBCC (India) Limited (Formerly National Buildings Construction CorporationLimited) on the standalonelnd AS financial statements as of and for the year ended March312017

SI. No. Directions/Sub-directions Action Taken Impact on financial statement
A Directions
1. Whether the company has clear title/lease deeds for freehold and leasehold respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available? The company has clear title/ lease deed for free hold/ lease hold land except as per the details given below: Free hold Land: 8437sqmt. Lease hold Land: l83945sqmt. (This information is in respect of Land included in "Property Plant & Equipment" of the Company) NIL
2. Whether there are any cases of waiver/write off of debts/loans/interest etc. if yes the reasons there for and amount involved? There is a write off Loans and Advances amounting to *60.15 lakhs during the financial year 2016-17. Advances are written off as and when considered unrealizable. Already accounted
3. Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from the Government or other authorities? As per information & explanation given to us there is no inventory lying with third parties and no assets received as gift from Government or other authorities. NIL
B Sub Directions : NIL

 

ForJAGDISH CHAND & CO.
Firm Registration Number: 000129N
Chartered Accountants
Sd/-
(Praveen Kumar Jain)
Place of signature: New Delhi Partner
Date: 26th May 2017 Membership Number:085629