It gives me great pleasure to welcome you to the 57th Annual General Meeting of NBCC(India) Ltd. The annual report for the financial year ending March 31 2017 along withthe Directors' Report Audited Annual Accounts and Auditor's Report of your Company arewith you and with your permission I take them as read.
India defying global economic slowdown is poised to be one of the largest growthengines in the world with the IMF projecting decent growth of more than 7 percent thisyear. However even as the country cements its position as one of the world's fastest-growing economy the challenges that lie ahead remain daunting. Millions of people livingin rural India remain intrinsically dependent on natural resources such as water forestsand grasslands etc. to sustain their livelihoods. In the urban context cities arereaching these limits resulting into slower than desirable rate of urbanisation whichholds the key to development. Sustainability is and will be the roadmap to our journey toprogress and prosperity. Going forward we will continue to walk the path of harmoniousand environment friendly development leveraging innovative business strategies to createwealth for our shareholders and sustainable livelihood opportunities for our people.
The reverberations of the slowdown in the global market were felt across all emergingeconomies upsetting their developmental targets. India was not untouched by the tremorshowever sectors such as urban infrastructure railways and telecom witnessed noticeablegrowth providing the much-needed fillip to our economy.
The construction sector found support in the government's initiatives such as theambitious 100 smart cities project to provide sustainable and clean environment by 2020.The Housing for All by 2022 project set the target to construct 20.0 million socialhousing units across the country by 2022. Project AMRUT launched in 2015 to transformthe landscape of 500 towns and cities also provided the much-needed oxygen to fuelIndia's growth trajectory.
In the backdrop of the current economic landscape I am delighted to share with youanother year of strong business performance of your Company in all three areas of business- project management consultancy real estate and engineering procurement &construction.
Driven by robust operational performance and sound fundamentals your Company reportedtotal income from operation to the tune of 6367.96 crore (standalone) and Rs 6400.73 crore(consolidated) at an annual growth of 7.69 % (standalone) and 8.01% (consolidated). Profitafter Tax for the year was 351.10 crore (standalone) and Rs 354.51 crore (consolidated)with an increase of 22.35% and 22.55% respectively.
We have continued to create wealth for our investors and shareholders for the financialyear 2016-17. Your Company paid interim dividend of 53 paisa per equity share of Rs 2/-each (i.e. 26.5%) and recommended final dividend of Rs 1.10 /- per share (i.e. 55%). TheCompany's Earnings Per Share (EPS) for the FY 2016-17 was Rs. 3.90 as compared to Rs 3.19in the previous year.
During the FY 2016-17 NBCC completed number of projects including the TradeFacilitation Centre & Crafts Museum at Varanasi and the ESIC Hospital and MedicalCollege Coimbatore both of which were dedicated to the nation by Hon'ble Prime MinisterShri Narendra Modi Ji. The successful completion and inauguration of the 140- Room Messfor IPS Officers at National Police Academy Hyderabad was another feather in the cap ofyour Company.
We successfully completed the first phase of the prestigious East Kidwai NagarRedevelopment Scheme of the central government. The project is scheduled for completion by2019. NBCC has further been contracted by the central government to redevelop threecolonies Sarojini Nagar Netaji Nagar and Nauroji Nagar as smart colonies at the costof Rs 25000 crore. The Company has work order of Rs. 65937.26 crore in hand as on31.03.2017
NBCC signed the Memorandum of Understanding (MoU) with the Ministry of Housing andUrban Affairs (MoHUA) outlining the targets on various performance parameters for theCompany during the FY 2017-18. Further your Company also entered into MoUs with theGovernments of Maharashtra and Gujarat Ministry of Tourism Indian Navy ArchaeologicalSurvey of India Goa Shipyard Ltd. CM- IGBC and India Habitat Centre to developstate-of-the-art centres undertake redevelopment projects and promote green buildingscapacity building and development of green building resources. We are also extending ourresources and expertise to serve IITs NITs CAPF and Ministry of Housing and UrbanAffairs.
Our path-breaking projects such as the redevelopment of the first of its kind GreenHome Campus at New Moti Bagh New Delhi and the setting up of a C&D waste managementfacility at East Kidwai Nagar have garnered us international attention and brought tofocus our ability to deliver high-quality cost-effective on-budget infrastructureredevelopment projects on selffinancing and self-sustainable basis. Both the central andstate governments have expressed keen interest in utilizing our expertise thus openingredevelopment as a new source of revenue for your Company.
I am also delighted to share that your Company has been entrusted with the task toredevelop the iconic Pragati Maidan into a state-of-the-art IntegratedExhibition-cum-Convention Centre. Further AIIMS has also contracted NBCC for theredevelopment of AIIMS Western Campus and Ayurvigyan Nagar New Dehi to construct 3000flats in two and half years time at a cost of Rs 5828 crore. We have also joined handswith Rail Land Development Authority for the redevelopment of ten railway stations acrossthe country on global standards.
NBCC is also actively engaged in the development of smart cities in the country. YourCompany is already present in various states and is in the process of forming specialpurpose vehicles (SPVs) for smart cities with different project models and with equityparticipation by private sector or financial institutions.
In the current financial year your Company acquired Hindustan Steelworks ConstructionLimited (HSCL) by acquiring 51% of its share capital. Your Company will benefit from itsversatile infrastructure portfolio and its expertise in the implementation of integratedsteel plants. We also formed two wholly owned subsidiaries NBCC International Limited andNBCC Environment Engineering Limited to fulfil our international business goals andfurther the cause of sustainability and environment.
To strengthen our overseas operations we have entered into MoUs with Al Naba Servicesin Oman Construction Industry Development Board Holdings Malaysia and Form YapiMalzemeleri Insaat Samayi Ticaret Ltd. Turkey to jointly explore and secureinfrastructure projects in the international market. We have also been contracted by thegovernment of Mauritius to construct its Supreme Court building at the cost of USD 35million and social housing project to the tune of USD 22 million.
NBCC has also been appointed as land management agency (LMA) by the government of Indiafor disposing of land/immovable assets of sick PSUs.
Building our brand equity
Ever since its inception 57 years ago NBCC has built a strong brand equity on thefoundation of integrity values ethics and quality. From being the extended engineeringarm of the central and various state governments we have transitioned into aninternational consultancy with presence in countries such as Botswana Nepal MauritiusMaldives and Turkey.
Strategically we have been nimble enough to adapt to the changing market requirements.In spite of the volatile environments our diversification into product and serviceofferings in several key infrastructure sectors has paid off. Our delivery platforms havemoved from manual design engineering to 3D and 4D advanced technology solutions thatprovide complete project and product lifecycle management solutions.
We have entered into agreements with leading international technology giants to importcutting-edge technologies to further our business and social goals. We are well-positionedto capture customers in new geographies by investing in business development andmarketing and on back of a brand that is differentiated trusted and respected.
Leadership in innovation
Your Company has been in the forefront of adopting innovative solutions for creatingsustainable value chains across all its business activities. Almost all projects executedby NBCC are in line with the 'Green Building' norms and the equipment used isenergy-efficient. Our approach to address environmental challenges is governed by ourlow-carbon growth strategy integrated water management strategy zero discharge planningand improved efficiencies in natural resource usage. We are also well-
equipped to meet the objectives of Clean Development Mechanism (CDM) thus furtheringthe cause of sustainable development. Your Company has also entered into an agreement withIGBC to promote 'Green Buildings' in the country and shall adopt suitable IGBC/GRIHARating systems for its upcoming projects.
Opening new frontiers with R & D
NBCC has partnered with IIT Roorkee to set up an R&D Centre named"Sustainable Civil Infrastructure' to identify innovative ideas on continuous basisto further the cause of sustainable development. Besides we are collaborating with otherNTs to develop best practices for effective waste management reducing contaminants andrecycling aggregate concrete.
In order to achieve market leadership in a sustained manner we need to continuouslyre-imagine our technological landscape across all our business processes and operations.To address new realities of a pervasively technology-driven world we have entered intokey partnerships with the ETICS-BOLIX (Poland) and Gremound (Hungary) to importenergy-efficient solutions and non-tectonic technology systems respectively. The newtechnologies will help us implement cost-effective superior quality environment-friendlymass housing projects to support the 'Housing for all 2022' mission of the government ofIndia. Further we have also inked a deal with CASSA Tech USA to import 3D printingtechnology to provide complete project and product lifecycle management solutions.
On the road to good corporate governance
Your Company has been a forerunner in India in adopting best practices in corporategovernance with an aim to enhance our wealth-generating capacity while creating largersocietal and natural capital on the back of the values of transparency empowermentaccountability and ethical corporate citizenship.
In its efforts to promote transparency your Company has initiated a CentralProcurement at the Corporate Office to take tendering of all works centrally from the headoffice. Besides all tenders are now available online on various websites. We have alsoimplemented an e-billing module for contractors for ease of business.
To lend support to the Hon'ble Prime Minister's vision to transform India into adigitally empowered society your Company has introduced paperless system in its HRMdivision an in-house ERP system for payments and an online portal for recruitment.
Beyond business: Our social initiatives
Your Company has made significant contribution to the benefit of the society. We inkedan MoU with the Indian Navy and NBCC Services Limited to construct the Sahara hostel forthe widows of the naval personnel who lost their lives in the line of duty. In anotherlandmark your Company contributed Rs 1 crore corpus to the Bharat Ke Veer Kosh in aid ofthe families of our martyrs. NBCC also stepped forward to extend support to the SwatchBharat Mission initiative announced by India's Prime Minister Shri Narendra Modi onAugust 152014.
Your Company has built toilet blocks in the national capital of Delhi and other partsof the country and extended education scholarship to 100 meritorious tribal girl students.Besides we have also collaborated with ALIMCO to distribute wheelchairs and tricycles tothe differently-enabled people. Turning focus on our national heritage we undertook theresponsibility to renovate the Purana Qila in Delhi.
Acknowledgingour human capital
Human resource development at NBCC goes beyond the framework of compensation reviewand promotion. Your Company looks at the entire lifecycle of employees to ensure timelyinterventions that support professional and organizational growth. A large part of thefocus was given to training activities to coach mentor and help employees developthemselves both personally and professionally. Your Company has also set up a transparente-appraisal process and scalable systems to fast-track promotions and address employeegrievances. Through the year we also opened new channels for communications and heldregular interactions between the management and the employees. The practice of rewards andrecognition of exceptional contributions also continued through the year. The inputs andideas of employees found platform in the "SAMVAAD" initiative held by yourCompany on quarterly basis.
As your Company grows from strength to strength several new employees join the NBCCfamily at all levels of the hierarchy. While we benefit from the experience they bring tothe table your Company also conducts on-boarding programs to initiate them to its richand vibrant work culture.
Strengthening investor relationships
The Company has always valued its investor relationships. NBCC held regular meetingswith the investors to update them on various business developments seek their inputs andaddress their queries.
I also take this opportunity to reaffirm our commitment to create wealth for ourshareholders and investors. In June 2016 your Company's equity share of Rs 10/- each wassplit into 5 equity share of Rs 2/- each which has enhanced liquidity in the market.Further the disinvestment of 15% by the Government of India through Offer For Sale (OFS)in October 2016 enriched its coffers to the tune of Rs 2200 crore (approx).
We have continued our practice to consistently reward our shareholders. In February2017 we allotted bonus shares to our existing shareholders in the ratio of 1:2 resultingin increase in paid-up share capital from Rs 120 crore to Rs 180 crore.
Your Company's ability to learn adapt and evolve helped it to tide over uncertainmarket conditions and in a period of five years increase its market capitalization fromRs 1500 crore (year 2012) to Rs 17000 crore (approx) as on date.
In recognition of our services
Last but not the least I am delighted to share that your Company has been recognizedand awarded by the government peers and stakeholders. NBCC was awarded the HindustanRatna PSU Awards 2017 for Excellence in Innovation'. Crossing borders we won the'World Business Leader Award 2016' conferred by World Confederation of Businesses in aceremony held at Houston Texas (US). Your Company was also recognized as the FastestGrowing Construction Company by Construction World Magazine (ASAPP Media). The Gold Awardin the Construction Sector reaffirms our endeavour to redefine the construction landscapeof our country. Our contribution to the cause of socio-economic development fetched us theD&B PSU Award. 2016.
Let me conclude by saying that your Company sustained its position as one of thefastest growing Indian companies in the construction sector leveraging a robust portfolioof orders a deep understanding of the customer landscape and its investment intechnology and business development activities. Looking forward we remain committed topursue competiveness and create social and environmental capital at the core of ourbusiness strategy. We will continue to invest in R&O new digital technologiesstate-of-the-art infrastructure to make the future more profitable and sustainable. Wewill also strengthen our brand as differentiated trusted and global.
Thank you shareholders for your faith and conviction to invest in NBCC.
Anoop Kumar Mittal