The Board of Directors hereby submit the 21st annual report along with theaudited financial statements of your Company for the financial year ended 31stMarch 2017.
STATEMENT OF COMPANY AFFAIRS
Your Company's financial performance during the financial year 2016-2017 is summarizedbelow:-
| ||2016-17 ||2015-16 |
| || ||(9 Months) |
|Gross Sales ||933.22 ||767.33 |
|Total Income ||978.61 ||786.84 |
|Profit before interest depreciation and taxation but after exceptional items ||235.65 ||138.42 |
|Interest ||147.80 ||120.89 |
|Profit/(loss) before depreciation and taxation ||87.85 ||17.53 |
|Depreciation ||42.05 ||40.42 |
|Net Profit/ (loss) before taxation ||45.79 ||(22.89) |
|Taxation ||11.62 ||(3.61) |
|Net Profit/(loss) ||34.17 ||(19.29) |
|Profit/(loss) brought forward from last year ||(324.47) ||(305.18) |
|Profit available for appropriations ||(290.30) ||(324.47) |
|Appropriations || || |
|Dividend on Equity shares ||0.00 ||0.00 |
|Corporate dividend tax ||0.00 ||0.00 |
|Balance carried to balance sheet ||(290.30) ||(324.47) |
|Total ||(290.30) ||(324.47) |
|EPS (in Rs.) ||13.43 ||(7.58) |
TRANSFER TO RESERVES
The Company has not transferred any amount to reserves of the Company.
In view of the accumulated losses the Board regrets its inability to declare anydividend for the financial year ended 31st March 2017.
The total income of the Company on a Standalone basis stood at ' 978.61 crores for thefinancial year ended on 31st March 2017 as compared to the total income of '786.84 crores for the previous financial period of 9 months. The Company posted a NetProfit of ' 34.17 crores for the financial year under review as against a Net Loss of '19.29 crores for the previous period comprising of nine months.
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 toglobal 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 and issues related thereto order intakeremains sluggish since many of the stalled projects are yet to be kick-started. Projectsalready awarded are generally progressing slowly due to various continuing problems onground which remain unresolved over a period of time leading to cost escalations whichremain unpaid. All these factors combined have led to a vicious cycle culminating in apile up of debt and high consequential costs.
To overcome the challenging business environment the Company is rigorously undertakingthe steps to realization of claims cost optimization monetization of SPV assets andcarefully bidding for new jobs offering good margins and better synergy apart fromfocusing on streamlining the internal organization and processes with emphasis onleveraging the Company's existing core competencies.
The company has undergone debt restructuring in the year 2013 under the framework ofCorporate Debt Restructuring (CDR) of Reserve Bank of India the liquidity position of theCompany is bound to turn around in view of steps undertaken by RBI and the Government andthe Company is optimistic to regularize its banking facilities.
Your Company has secured the following new orders in its own name and in Joint Ventureswith other entities during the year ended on 31st March 2017:
A project by Govt. of India for construction of two lane road on NH Specifications fromPaletwa to India-Myanmar Border (Zorinpui) from Km. 0.00 to Km. 109.02 in Chin State ofMyanmar on EPC Mode. The share of C & C in this JV is 60%.The total contract value ofthe project is ' 1518.00 crores. The project will be governed as perthe terms and conditions set forth in the RFP documents. Discussions are progressing wellwith the JV partner for executing their portion of the EPC contract as well onsub-contract basis. Commercial value/terms forms part of the such discussion only.
The BSC- C & C JV has been awarded five road projects in the State of Bihar valuedat around ' 1493.40 Crores. The share of C & C in this JV is 50%.
A project by Power Grid Corporation of India Ltd. for Transmission line package TW01for 400 KV D/C Mohindergarh- Bhiwani Transmission Line including Supply of Conductorinsulators associated with Northern Region Strengthening Scheme XXXV. The Contract valueof the project is ' 73.61 crores.
The total balance value of works on hand as on March 31 2017 is ' 3929 crores.
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 financial year ended 31st March2017 form 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 financial year ended 31st March 2017 isattached to Financial Statements of the Company. The statement contains the contributionof the associates and joint ventures to overall performance of the Company.
The contribution of the Subsidiaries to overall performance of the Company are asunder:
|Subsidiary ||C&C share profit consider in Balance sheet |
|C&C Projects Ltd. ||(19319933) |
|C&C - Tower Ltd. ||(35664651) |
|C&C - Tolls Ltd. ||(336265) |
|Subsidiary ||C&C share profit consider in Balance sheet |
|C&C - Western UP Expressway Ltd. ||(320985031) |
|C&C Realtors Ltd. ||(622293) |
|C&C - Oman LLC ||(312908598) |
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 financial year ended 31stMarch 2017 is included in the Financial Statement.
No changes have occurred in the Share Capital Structure of the Company during theperiod under review.
DIRECTORS AND KEY MANGERIAL PERSONNEL
Pursuant to provisions of Section 152 of the companies Act 2013 Mr. Gurjeet SinghJohar (DIN 00070530) and Mr. Amrit Pal Singh Chadha (DIN 00065139) retire by rotation atthe ensuing Annual General Meeting and being eligible offer themselves forre-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. Anand Bordia independent director hadresigned from the directorship of the Company w.e.f. 23.07.2016 and Mr. Deepak Nathani hadalso resigned from the post of Company Secretary of the Company w.e.f 31stAugust 2016.
Further Ms. Yogita Narhari Jadhav nominee director has resigned from the directorshipof the Company due to her personal reasons w.e.f. 29th May 2017 and Mr. R.M.Aggarwal Whole Time Director has also resigned from the directorship of the Companyw.e.f. 17-07-2017.
The Board places on record its appreciation for the valuable guidance and servicesrendered by them during their association with the Company.
Further during the period under review Mr. Puneet Kumar Trivedi has been appointed asCompany Secretary cum Compliance Officer of the Company w.e.f 2nd November2016.
The Company has to appoint three Independent Directors and one Woman director in orderto comply with the provisions regarding Composition of Board of Directors under the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. Vistra (ITCL) IndiaLtd. has to nominate its Director on the Board of the Company after resignation of itsearlier Nominee Director Ms. Yogita Narhari Jadhav.
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
The Board of directors duly met four (4) times during the period under review thedetails of which are given in Corporate Governance Report annexed 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 are 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 financial year;
(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 itsCommittees and individual Directors were evaluated as per the Guidance Note issued by SEBIand also 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. The Independent Directors have also reviewed the quality quantity andtimeliness of flow of information between management of the Company and the Board for theeffective performance of the board.
AUDITORS AND AUDITORS' REPORT
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.
As the term of statutory auditors is going to expire so new Auditors has to beappointed in forthcoming Annual General Meeting (AGM) of the Company. The Board hasrecommend the name of M/S Bedi Saxena & Co. Chartered Accountants (FRN: 000776C) forthe appointment as statutory auditors of the Company for continuous five years to holdoffice from the conclusion of this 21st AGM to 26th AGM to be heldin the year 2022.
The Company has received a letter from the proposed Statutory Auditors that theirappointment if made would be within the limits prescribed under the provisions of theCompanies Act 2013 and that they are not disqualified and comply all the conditionsmentioned in the Companies Act 2013 and rules made thereunder.
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 financial year ended 31stMarch 2017 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.
Further as per one of the observations in the report Mr. R.C. Rekhi has been inductedas member of Nomination and Remuneration Committee in the Board Meeting held on11.08.2017.
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 asCost Auditor for the purpose of auditing the Cost accounting records maintained by theCompany for the financial year 2016-17.
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 EXCHAMGE 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) Regulation 2015 forms a partof the annual report.
In pursuance of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulation 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 2016-17.
PARTICULARS OF EMPLOYEESS
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 RPT 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 financial year underreview were in ordinary course of business and on Arm's length basis.
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 ' 90272/- 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 for thefinancial year 2008-09.
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 |
|Date : 11.08.2017 ||Chairman |
|Place: Gurugram ||DIN:00070530 |