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NCC Ltd.

BSE: 500294 Sector: Infrastructure
NSE: NCC ISIN Code: INE868B01028
BSE LIVE 15:45 | 22 Aug 84.15 -1.05
(-1.23%)
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NSE 15:43 | 22 Aug 84.15 -0.90
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OPEN 85.65
PREVIOUS CLOSE 85.20
VOLUME 304612
52-Week high 103.75
52-Week low 71.20
P/E 17.17
Mkt Cap.(Rs cr) 4,678
Buy Price 0.00
Buy Qty 0.00
Sell Price 84.15
Sell Qty 50.00
OPEN 85.65
CLOSE 85.20
VOLUME 304612
52-Week high 103.75
52-Week low 71.20
P/E 17.17
Mkt Cap.(Rs cr) 4,678
Buy Price 0.00
Buy Qty 0.00
Sell Price 84.15
Sell Qty 50.00

NCC Ltd. (NCC) - Director Report

Company director report

To the Members

Your Directors take pleasure in presenting the 26th Annual Report together with theAudited Financial Statements for the Financial Year ended March 31 2016.

Financial results (Standalone)

Rs. in million

2015-16 2014-15
Turnover 83251.55 82969.43
Profit before interest depreciation and tax 9338.66 8444.21
Less: Interest and financial charges 5075.97 5735.59
Profit before depreciation and tax 4262.69 2708.62
Less: Depreciation 1099.59 1118.33
Profit before exceptional item & tax 3163.10 1590.29
Exceptional items (Net) (203.23) --
Profit before tax 2959.87 1590.29
Provision for tax 731.41 472.37
Profit after tax 2228.46 1117.92
Profit brought forward 3101.16 3331.28
Less : Depreciation on transition to - 80.40
Schedule II of the Companies Act 2013
Profit available for appropriation 5329.62 4368.80
Appropriations
Proposed Dividend at Rs. 0.60/- per equity share (30%) 333.56 222.37
Dividend tax on Proposed dividend 67.90 45.27
Transfer to General Reserve 1745.41 1000.00
Balance carried forward 3182.75 3101.16
Paid up Capital 1111.86 1111.86
Reserves and Surplus 32976.36 30932.44

Operational performance

A. Standalone

You will be glad to note that despite the difficult phase through which the IndianConstruction Industry is passing your Company posted a turnover of Rs. 83251.55 millionfor the year ended 31st March 2016 as against Rs. 82969.43 million in FY-2014-15. GrossProfit increased from Rs. 8444.21 million in FY-2014-15 to Rs. 9338.66 million in FY-2015-16. After deducting financial charges of Rs. 5075.97 million providing a sum of Rs.1099.59 million towards depreciation exceptional items of Rs. 203.23 million and Rs.731.41 million for income tax the operations resulted in a net profit of Rs. 2228.46million as against Rs. 1117.92 million in FY-2014-15.

B. Consolidated

During the year under review your Company achieved a consolidated turnover of Rs.95834.79 million as against Rs. 95128.90 million in the previous fiscal. YourCompany has earned a consolidated gross profit of Rs. 11800.17 million before interest anddepreciation as against Rs. 11263.99 million in the previous year. After deductingfinancial charges of Rs. 6690.42 million providing for depreciation of Rs. 3031.27million exceptional items of Rs. 401.72 million and provision for tax of Rs. 773.23million the operations resulted in a net profit of Rs. 903.53 million as against Rs.614.81 million in the previous year.

During the year the Company on consolidated basis bagged new orders valued around Rs.73990 million and executed projects worth Rs. 90670 million. The Order Book position as onMarch 31 2016 stood at Rs. 176550 million.

Proposed Dividend

Keeping in view the tight liquidity situation the Construction and InfrastructureIndustry is passing through and the need to conserve and optimize the use of resourcesyour Board recommends Dividend of Rs. 0.60 per Equity Share of Rs. 2/- each (30%) for theconsideration and approval of the members of the Company at the forthcoming Annual GeneralMeeting. This is fifty percent increase on the expanded capital compared to previousyear’s dividend of 20% despite difficult market conditions. Your Board is optimisticthat the company will further improve its performance in the years to come.

Further information on the Business Overview and Outlook and the state of the affairsof the Company and the Industry in which it operates is discussed in detail in theManagement Discussion & Analysis.

There is no change in the nature of business carried on by the Company during the yearunder review.

Material Changes and Commitments affecting the financial position of the Company

There are no Material Changes and Commitments affecting the financial position of theCompany which occurred between the end of the financial year to which the financialstatements relate and the date of this Report.

Particulars of Contracts or Arrangements with Related Parties

All related party transactions that were entered during the financial year were in theordinary course of the business of the Company and were on arm’s length basis. Therewere no materially significant related party transactions entered by the Company duringthe year with the Promoters Directors Key Managerial Personnel or other persons whichmay have a potential conflict with the interest of the Company.

The policy on Related Party Transactions as approved by the Audit Committee and theBoard of Directors is hosted on the website of the Company and the link for the same is(http:// ncclimited.com/ Policies.html).

Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm’s length basis the requirement of furnishingthe requisite details in Form AOC-2 is not applicable to the Company.

Awards & Accolades

You will be happy to note that during the year under review the Company has receivedthe following awards:

a) National Award for “Excellence in Cost Management” for the year 2015– from the Institute of Cost Accountants of India.

b) Viswakarma Award 2016 – from the Construction Industry Development Council(CIDC) New Delhi in the following categories

1. Best Professionally Managed Construction Company.

2. Industry Doyen – Sri A A V Ranga Raju Managing Director NCC Limited

3. Best Managed Construction Site – ESIC – Medical & Hospital ProjectGulbarga Karnataka c) Dr AVS RAJU Founder Chairman was honoured with the ‘BulandhBharath’ Award for his exemplary contributions towards nation building by theBuilders Association of India.

Directors’ responsibility statement

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 your Directorsto the best of their knowledge and ability confirm as under:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) We have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

(c) We have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

(d) The annual accounts have been prepared on a going concern basis; and

(e) The Company had laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively.

(f) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively

Subsidiary Companies

The Company has 51 subsidiaries (including step down subsidiaries) as of 31st March2016. There was no material change in the nature of the business carried on by thesubsidiaries.

As per the provisions of Section 129 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 a separate statement containing the salient features of thefinancial statements of the subsidiary Companies/ Associate Companies/Joint Ventures isprepared in Form AOC-1 and is attached to the Financial Statements of the Company.

In accordance with the provisions of the Companies Act 2013 the Audited FinancialStatements of the subsidiary companies are being made available on the website of theCompany and are not attached with the Annual Accounts of the Company. The Company willmake available the Annual Accounts of the subsidiary companies and the related informationto any member of the Company who may be interested in obtaining the same. The annualaccounts of the subsidiary companies will also be kept open for inspection by any memberat the Registered office of the Company and that of the respective subsidiary companies.

Consolidated financial statements

In compliance with Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and in compliance with the provisions of Section 129(3) andother applicable provisions of the Companies Act 2013 and the Accounting Standards AS-21and AS-27 on consolidated financial statements read with the Accounting Standard AS-23 onAccounting for Investments in Associates your Directors have pleasure in attaching theconsolidated financial statements for the financial year ended March 31 2016 which formspart of the Annual Report.

Disclosures : Deposits

During the year the Company has not accepted any public deposits.

Conservation of energy technology absorption and foreign exchange earnings and outgo

A. Conservation of energy

The Company’s core activity is civil construction which is not power intensive.The Company is making every effort to conserve the usage of power.

B. R&D and technology absorption:

Not applicable

C. Foreign exchange earnings and outgo

Foreign exchange earnings - Nil

Foreign exchange outgo

i. Towards travel Rs. 2.67 million

ii. Towards import of capital goods & material supplies Rs. 1125.91 million

iii. Others Rs. 28.46 million

D. No significant and material orders were passed by the regulators or courts ortribunals impacting the going concern status and the Company’s operations in future.

Particulars of loans guarantees or investments under Section 186;

In compliance with the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014 the details of LoansGuarantees Investments given / made during the Financial Year ended 31st March 2016 aregiven in Annexure - 1

Particulars of Directors

In pursuance of Section 152 of the Companies Act 2013 and the rules framed thereunderSri Utpal Sheth Director and Sri A V N Raju Whole-time Director are liable toretire by rotation at the ensuing Annual General Meeting and being eligible have offeredthemselves for reappointment. Sri S Ravi and Dr. A.S. Durga Prasad were appointed asAdditional Directors(Independent) on 10th November 2015 and 24th May 2016 respectivelyand their appointments are proposed to be regularized at the forthcoming Annual GeneralMeeting.

During the year under review Sri T N Manoharan Chairman of the Board and IndependentDirector has resigned from the Board consequent to his appointment as the Non-ExecutiveChairman of CANARA Bank. Your Board places on record the valuable contribution made by SriT N Manoharan during his tenure as a Director of the Company.

Other than as stated above there has been no other change in the Board or the KeyManagerial Personnel during the year under review.

The Independent Directors have submitted the declaration of independence pursuant toSection 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in sub-section(6) of Section 149 of the Companies Act 2013.

Meetings of Board of Directors

During the Financial Year under review the Board has met six times i.e. May 14 2015May 28 2015 July 30 2015 August 24 2015 November 10 2015 and February 11 2016.

The details of the familiarisation programme conducted for Independent Directors arehosted on the Company’s website and the web link thereto ishttp://ncclimited.com/corporate_ governance.html

Constitution and Composition of Audit Committee

The Company has constituted the Audit Committee under the Chairmanship of Sri R VShastri an Independent Director and Sri P Abraham Sri Hemant M Nerurkar IndependentDirectors and Sri Amit Dixit Non-executive Director as Members of the Committee.

During the year under review Sri. T N Manohraran ceased to be a member of the Committeefollowing his resignation from the Board of the Company.

Whistle Blower Policy/Vigil Mechanism

Pursuant to Section 177 of the Companies Act 2013 and the Rules framed there under andpursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has established a mechanism through which all thestakeholders can report the suspected frauds and genuine grievances to the appropriateauthority. The Whistle Blower Policy which has been approved by the Board of Directors ofthe Company has been hosted on the website of the Company (http://ncclimited.com/Policies.html). During the year under review the Company has not received anycomplaint(s) under the policy.

Risk Management

The Company has established Enterprise Risk Management process to manage risks with theobjective of maximizing shareholders value.

Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. The Company has policies and procedures inplace for ensuring proper and efficient conduct of its business the safeguarding of itsassets the prevention and detection of frauds the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 for the Financial Yearended 31st March 2016 is given in Annexure -2 and forms part of the DirectorsReport.

Joint Statutory Auditors and their report

The Joint Statutory Auditors of the Company viz. M/s. M Bhaskara Rao & Co.Chartered Accountants (Firm’s Registration No.000459S) and M/s. Deloitte Haskins andSells Chartered Accountants (Firm’s Registration No.008072S) were re-appointed for aterm of two years i.e till the end of 27th Annual General Meeting to be held in F.Y2016-2017 subject to ratification of their appointment for the F.Y 2016-17 by the membersat the ensuing Annual General Meeting. M/s. M Bhaskara Rao & Co. CharteredAccountants and M/s. Deloitte Haskins and Sells Chartered Accountants have confirmedtheir eligibility and willingness to continue as Joint Statutory Auditors for theFY-2016-2017 subject to their appointment is ratified by the members at the forthcomingAGM. Your Board of Directors have recommended for ratification the appointment of the saidJoint Statutory Auditors as indicated above to the members for their approval at the forthcoming Annual General Meeting of the Company based on the recommendation of the AuditCommittee.

The Independent Auditors’ Report to the Members of the Company on the FinancialStatements for the Financial Year ended March 31 2016 forms part of the Annual Report anddoes not contain any qualification(s) or adverse observations.

Secretarial Audit Report

As per the provisions of Section 204(1) of the Companies Act 2013 the Company hasappointed M/s. BS & Company Company Secretaries LLP to conduct Secretarial Audit ofthe records and documents of the Company for the Financial Year 2015-16. The SecretarialAudit Report for the Financial Year ended 31st March 2016 in Form No MR-3 is annexed tothe Directors Report - Annexure - 3 and forms part of this Report. The SecretarialAuditors’ Report to the Members of the Company for the Financial Year ended March 312016 does not contain any qualification(s) or adverse observations

Cost Audit

In compliance with the provisions of Section 148 of the Companies Act 2013 the Boardof Directors of the Company at its meeting held on July 30 2015 had appointed M/s.Vajralingam & Co. Cost Accountants (Firm Registration No.101059) as Cost Auditors ofthe Company for the FY 2015-16. In terms of the provisions of Section 148(3) of theCompanies Act 2013 read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules2014 the remuneration of the Cost Auditors has to be ratified by the members.Accordingly necessary resolution is proposed at the ensuing AGM for ratification of theremuneration payable to the Cost Auditors for FY 2015-16.

Corporate Governance

Pursuant to the provisions of Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section on Corporate Governance has beenincorporated in the Annual Report for the information of the shareholders. A certificatefrom the Statutory Auditors of the Company regarding compliance with the conditions ofCorporate Governance as stipulated under the said Schedule V of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 also forms part of this Report.

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR)Policy of the Company andthe initiatives undertaken by the Company on CSR activities during the year are set out inAnnexure - 4 of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014.The policy is available on the website of theCompany. (http://ncclimited.com/Policies.html)

Particulars of Employees

Details in respect of remuneration paid to employees as required under Section 197 (12)of the Companies Act 2013 read with Rule 5(2) & (3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended forms part of thisreport. In terms of Section 136 of the Companies Act 2013 the same is open for inspectionat the Registered Office of the Company. Copies of this statement may be obtained by themembers by writing to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee’sremuneration and other details in terms of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are enclosed in Annexure – 5 and forms part of this Report.

Evaluation of performance of the Board Members of the Board and the Committees of theBoard of Directors.

The Nomination and Remuneration Committee has laid down criteria for performanceevaluation of Directors Chairperson Board Level Committees and the Board as a whole andalso the evaluation process for the same.

The statement indicating the manner in which formal annual evaluation of the Directorsthe Board and the Board level Committees are given in the report on Corporate Governancewhich forms part of this Annual Report.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. During the financial year ended 31st March 2016 the Companyhas not received any complaints pertaining to Sexual Harassment.

Acknowledgements

Your Directors place on record their sincere appreciation and thanks for the valuablecooperation and support received from the employees of the Company at all levelsCompany’s Bankers Financial Institutions Central and State Government AuthoritiesAssociates JV partners clients consultants sub-contractors suppliers and Members ofthe Company and look forward for the same in equal measure in the coming years.

For and on behalf of the Board
Hemant M Nerurkar
Chairman
(DIN No. 00265887)
Place: Hyderabad
Date: 24th May 2016