It is my proud and privilege to present before you the maiden Annual Report of the Company. As you are aware I became a proud member of the NBCC family in April earlier this year. These few months that I have spent here have re-affirmed my belief in the potential and promise of NBCC as a leading player in the construction space in India and the role it will play in the emergence of New India.
I welcome you all to the 59th Annual General Meeting of NBCC (India) Limited. The Annual Report for financial year ended March 31 2019 along with the Directors' Report Audited Annual Accounts and Auditor's Report of the Company are with you and with your permission I take them as read.
Let me now share with you a review operating context as well as the performance of the Company during the year. I shall also update you on the strategic outlook and outline the roadmap for the Company's future growth.
ECONOMIC AND INDUSTRY OVERVIEW
India continues to surge ahead with confidence and conviction as one of the top growing major economies in the world. While the global economic scenario remained challenging the key macro-factors driving the larger India growth story continued to remain intact. With a strong leadership at the centre that is determined to fulfil its vision of ushering in a New India many bold and ground-breaking reforms have been introduced. The Goods and Services Tax (GST) reform is now starting to show its positive and far-reaching impact. Many other reforms have been implemented in the country which is evident from the improvement in India's ranking in doing business. As per World Bank's Doing Business Report 2019 countries rank improved by 23 places and now India ranks at 77 among 190 economies surveyed by the World bank.
Infrastructure and real-estate feature prominently on the Government's agenda. Both sectors have seen a renewed focus and massive thrust. At the heart of the Hon'ble Prime Minister's vision of India becoming a USD 5 trillion economy by 2024 is the Rs. 100 lakh crore investment in infrastructure development.
Real estate and construction sectors are the second-highest employment generators next only to the agricultural sector. The increased investment planned over the next five years is expected to provide 15 million new jobs(Economic Survey 2017-18).
For India to transform into New India the huge infrastructure gap needs to be filled and the Government is committed to fast-track this. The Union Budget 2019 has set an investment target of Rs. 80250 crore for Phase III of the Pradhan Mantri Gram Sadak Yojana for building 125000 km of village roads.
The finance ministry had allocated the highest-ever budgetary support of Rs. 83016 crore to the highways sector. Several initiatives have been launched to boost the country's infrastructure and housing led by Government's flagship programmes such as Atal Mission for Rejuvenation and Urban Transformation (AMRUT) Smart Cities Mission and Pradhan Mantri Awas Yojana (PMAY) for providing Housing for All by 2022.
In the real-estate sector which has been facing rough weather in recent years the implementation of Real Estate Regulation and Development Act (RERA) is expected to give a fillip.
These developments augur well for NBCC. As a Government of India Navratna Enterprise the Company is an integral part of the Government under the administrative control of the Ministry of Housing and Urban Affairs. Over the last sixty years the Company has evolved into a leading construction player with Concept-to-Completion expertise and capabilities. With a diversified port-folio of services wide pan-India reach strong innovation and R&D base and a team of passionate professionals the Company is today ideally poised to leverage its leadership position and capitalise on the huge opportunity unfolding in the infrastructure and real-estate sectors in the country.
Despite a challenging operating environment the Company continued with its track-record of delivering a robust performance. All the three business areas namely Project Management Consultancy Real Estate and Engineering Procurement & Construction continued to perform well. There was a significant growth in revenues in the project management consultancy and real estate verticals.
Total standalone income of the Company rose by 23.64% i.e. from Rs. 6011.14 crore to Rs. 7432.22 crore and net profit rose by 15.14% i.e. from Rs. 333.61 crore to Rs. 384.11 crore. Further the total consolidated income of the Company rose by 17.91 % i.e. from Rs. 8609.62 crore to Rs. 10151.36 crore.
A dividend of 65% on the paid-up equity share of Rs. 1/- each is proposed in line with the Company's aim to enhance shareholder value creation.
OTHER KEY DEVELOPMENTS
In line with sustained business performance the Company continued to take impressive strides by winning marquee projects. Some of these include AIIMS-Bilaspur (Himachal Pradesh) and Deogarh (Jharkhand) IIM-Ranchi and Vishakhapatnam IIT Bhubaneswar infrastructure projects under Raipur SMART City Redevelopment of WHO Office projects under central government schemes of PMGSY as well as numerous projects in different States.
Internationally the Company got the project to build Mahatma Gandhi International Convention Centres in nine African nations as well as a project to construct the Indian Pavilion at the World Expo 2020 in Dubai. The Company also recently signed an agreement to construct three key projects in Mauritius worth USD 44 million (Rs. 310 crore approximately).
The total value of projects won from April 2018 to March 2019 is Rs. 12427.42 crore.
In case of Amrapali Group pending before the Hon'ble Supreme Court of India the Hon'ble Court has vide its detailed order dated July 23 2019 appointed the NBCC as Project Management Consultant to complete the various projects of Amrapali Group. The PMC charges has been fixed at 8%.
GOING GREEN. GOING SUSTAINABLE.
NBCC has been at the forefront of encouraging and adopting sustainable development. From 'zero energy infrastructure' to 'say no to plastics' the Company is committed to ecological and environmental standards in all its materials processes and projects. As part of its continuing efforts to reduce pollution the Company is increasingly recycling and reusing solid waste and water using modular products and dry construction to reduce dust pollution. It continues with its green drive by planting thousands of trees across all its projects on a pan-India level. During the year a total of 70000 tree saplings were planted.
All new projects undertaken by the Company are conceptualised with the Bureau of Energy Efficiency (BEE) and GRIHA norms. Some well-known green buildings completed by NBCC include the Indian Institute of Corporate Affairs (LEED India Gold rating) CBI Headquarters (Silver rating) as well as India's first and largest green home campus at New Moti Bagh.
ALLIANCES AND COLLABORATIONS
Last year the Company has taken over HSCC (India) Limited a Mini Ratna Category-I Pubic Sector Undertaking. It is a multi-disciplinary organization engaged in rendering comprehensive consultancy services in the field of Hospital planning design detail engineering quality control project management and monitoring as well as procurement supply installation and commissioning of medical equipments. Takeover of HSCC would give synergy benefits and having a specialized team of professionals with vast experience of healthcare sector would add more value to the organization.
The Company has set up a R&D Centre in collaboration with IIT Roorkee focussing on Sustainable Civil Infrastructure.
OPPORTUNITIES & OUTLOOK
With renewed thrust of the government on infrastructure and real estate sectors the Company is poised for a phase of high-growth in the near and mid-term. With its combination of experience and expertise capacity and capabilities reach and presence - complimenting a diverse business model the Company is on track to reap rich benefits both in India and overseas.
In the educational infrastructure space the Company has undertaken that include IIT Delhi IIT Mandi IIT Roorkee NIFTEM Indian Culinary Institute Headquarters and Regional Offices of CBSE amongst others.
In the healthcare infrastructure space the Company has executed prestigious projects that include hospitals medical colleges as well as healthcare facilities across the country.
The Company plays an instrumental role in developing projects on surplus land parcels owned by PSUs and government organisations as part of their efforts to monetise these assets. The Company is also ready to develop townships and affordable housing projects. The Company has now expanded its re-development projects from Delhi to other parts of the country.
A key emerging area where the Company is looking at making significant and worthwhile contribution is in executing stalled and stopped projects of realtors who are under financial stress or other problems. Completing these stalled projects will go a long-way in delivering homes to buyers as well as ensure crucial support for the real estate sector besides establishing the Company as a leading player in the real estate space.
The Company continues to make significant strides in expanding its overseas operations.
At NBCC we have always believed that people are our finest and most valuable assets. Our talent pool comprises of some of the best talent across engineering construction architecture project management and other faculties. The Company has a strong value system that encourages honesty merit and performance. It is a diversity-rich and gender- neutral organisation. Its people centric policies are amongst the best in the industry and not surprisingly the Company has one of the lowest attrition rate. Over the years the Company has diligently worked to bring in fresh blood. This has brought down the average age to 43 years a commendable achievement in my opinion. This not only makes the Company agile but importantly brings in young new thinking energy and dynamism. The Company has a well-defined leadership development plan in place where young leaders are identified and groomed by seniors as their mentors. In July 2019 NBCC was recognised as a Great Place to Work and now ranks 4th amongst the existing 300 CPSEs.
NBCC has been completing DPC proceeding in time every year. During the year 2017-18 around 82.49% of eligible employees were promoted. Further training of 2940 mandays were given under Company's on-going Skill Development initiatives and 1200 (approx.) certificates were given under the Recognition of Prior Learning drive. The Company ensures and invests in continuous Training Development to ensure its employees are abreast with the latest skills and competencies.
During the year NBCC accounted for a direct employment of 2444 employees and generated indirect employment for approximately another 62000 people.
GOVERNANCE AND TRANSPARENCY
NBCC has always believed in strong corporate governance and transparency. The Company has a structured governance framework comprising of values ethics and codes. The Company is committed to deliver responsible growth and ethical wealth creation that results in value for all stakeholders.
The Company ensures total fairness and transparency in all its working and reporting matters often going beyond statutory disclosure norms and making voluntary disclosures that enable a more clear and coherent understanding of its business and value creation.
As a leader in the construction space and as a Government of India Enterprise Navratna company NBCC endeavours to set benchmarks in social responsibility. The Company has always shared its success with the communities and societies. It has actively contributed to their alleviation so that they can be integrated into the mainstream of development and benefit from the fruits of economic growth and prosperity of the country. It is committed to preserve the rich history of India and has undertaken the preservation of Purana Qila in Delhi. Its several social initiatives include supporting education and sports facilitating skill development and empowering youth as well as participating in the Swachh Bharat Mission.
As part of its tribute to the brave soldiers who has given the supreme sacrifice while defending the country NBCC has constructed Sahara - a hostel for widows of the Indian navy personnel who lost their lives.
In the last financial year the company has made a contribution of Rs. 34.93 lakh to Bharat Ke Veer Kosh and contribution of Rs. 1 crore to the Prime Minister Relief Fund.
As I look ahead into the horizon I cannot but feel a sense of pride and positivity. NBCC continues to remain one of the fastest growing companies in the Indian construction space. The Company has doubled its net worth since 2012-13.
In addition to strong financials the Company today remains one of the top proxies for growth in the infrastructure and construction space. With a formidable combination of people projects and processes and a proven track-record of unblemished execution spanning over six decades with cutting-edge technological advances in machines and material - all converging into a renowned dynamic and agile organisation NBCC is looking ahead with confidence and conviction to play its role in building a New India.
I believe the best is yet to come!
Thank you for your sustained faith and trust in NBCC.
Shiv Das Meena